UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 20-F/A
| ☐ | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES
EXCHANGE ACT OF 1934 |
OR
| ☒ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 2014 |
OR
| ☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 |
OR
| ☐ | SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 |
Commission file number: 1-33659
COSAN LIMITED
(Exact name of Registrant as specified in its charter)
N/A
(Translation of Registrant’s name into English)
Bermuda
(Jurisdiction of incorporation or organization)
Av. Juscelino Kubitschek, 1327 –
4th floor
São Paulo, SP 04543-000, Brazil
(55)(11) 3897-9797
(Address of principal executive offices)
Marcelo Eduardo Martins
(55)(11) 3897-9797
ri@cosan.com
Av. Juscelino Kubitschek, 1327 – 4th floor
São Paulo, SP 04543-000, Brazil
(Name, Telephone, E-Mail and/or Facsimile number and Address of Company Contact Person)
Securities registered or to be registered pursuant to Section
12(b) of the Act:
Title of each class |
Name of each exchange on which registered |
Class A Common Shares |
New York Stock Exchange |
Securities registered or to be registered pursuant to Section
12(g) of the Act:
None
Securities for which there is a reporting obligation pursuant
to Section 15(d) of the Act:
None
Indicate the number of outstanding shares of each of the issuer’s
classes of capital or common stock as of the close of the period covered by the annual report.
The number of outstanding shares as of December 31,
2014 was:
Title of Class |
Number of Shares Outstanding |
Class A Common Shares, par value $.01 per share |
174,355,341 |
Class B – series 1 – Common Shares, par value $.01 per share |
96,332,044 |
Indicate by check mark if the registrant is a well-known seasoned
issuer, as defined in Rule 405 of the Securities Act.
If this report is an annual or transition report, indicate by
check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934.
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements
for the past 90 days.
Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer”
in Rule 12b-2 of the Exchange Act. (Check one):
Large Accelerated Filer ☒ |
Accelerated Filer ☐ |
Non-accelerated Filer ☐ |
Indicate by check mark which basis of accounting the registrant
has used to prepare the financial statements included in this filing:
☐ U.S.
GAAP
☒ International
Financial Reporting Standards as issued by the International Accounting Standards Board
☐ Other
If “Other” has been checked in response to the previous
question, indicate by check mark which financial statement item the registrant has elected to follow.
If this is an annual report, indicate by check mark whether
the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
EXPLANATORY NOTE
We are amending our Annual Report on Form
20-F for the fiscal year ended December 31, 2014 (the “Annual Report” as originally filed with the U.S. Securities
and Exchange Commission (the “SEC”) on April 30, 2015) solely for the purpose of filing with the SEC the financial
statements for the fiscal years ended March 31, 2015, 2014 and 2013 of Raízen Energia and Raízen Combustíveis
as Exhibit 13.3.
Other than set forth above, this Form
20-F/A does not, and does not purport to, amend, update or restate the information in any other item of the Annual Report as
originally filed with the SEC. As a result, this Form 20-F/A does not reflect any events that may have occurred after the
Annual Report was filed on April 30, 2015.
PART III
Item 19. Exhibits
We are filing the
following documents as part of this annual report on Form 20-F:
| 1.1 | Memorandum of Association (incorporated by reference to our amended registration statement filed
on Form F-1/A with the Securities and Exchange Commission on August 9, 2007) |
| 1.2 | By-Laws (incorporated by reference to our amended registration statement filed on Form F-1/A with
the Securities and Exchange Commission on August 9, 2007) |
| 2.1 | Indenture dated as of January 26, 2007 among Cosan Finance Limited, as issuer, Cosan S.A. Indústria
e Comércio and Usina Da Barra S.A.—Açúcar e Álcool, as guarantors, The Bank of New York, as trustee,
The Bank of Tokyo-Mitsubishi UFJ, Ltd., as principal paying agent and The Bank of New York Luxembourg S.A., as Luxembourg paying
agent (incorporated by reference to our registration statement filed on Form F-1 with the Securities and Exchange Commission on
June 25, 2007) |
| 2.2 | Indenture dated August 11, 2009 among CCL Finance Limited, Cosan Combustíveis e Lubrificantes
S.A., (now CLE) The Bank Of New York Mellon, as Trustee, The Bank of New York Mellon Trust (Japan), Ltd., as Principal Paying Agent,
and the Bank of New York Mellon (Luxembourg) S.A., as Luxembourg Listing, Paying and Transfer Agent (incorporated by reference
to Exhibit 2.4 of our annual report on Form 20-F for the year ended March 31, 2009) |
| 2.3 | Indenture dated November 5, 2010 among Cosan Overseas Limited, Cosan S.A. Indústria e Comércio,
The Bank of New York Mellon, as Trustee, New York Paying Agent, Transfer Agent and Registrar, The Bank of New York Mellon (London
Branch), as London Paying Agent and The Bank of New York Mellon (Luxembourg) S.A., as Paying Agent and Transfer Agent (incorporated
by reference to Exhibit 2.5 of our annual report on Form 20-F for the year ended March 31, 2011) |
| 2.4 | Indenture dated March 14, 2013 among Cosan Luxembourg S.A., Cosan S.A. Indústria e Comércio,
Deutsche Bank Trust Company, as Trustee, New York Paying Agent, Transfer Agent and Registrar and Deutsche Bank Luxembourg S.A.,
as Luxembourg Paying Agent (incorporated by reference to Exhibit 2.4 of our annual report on Form 20-F for the year ended March
31, 2013) |
| 2.5 | Indenture dated March 14, 2013 among Cosan Luxembourg S.A., Cosan S.A. Indústria e Comércio,
Deutsche Bank Trust Company, as Trustee, New York Paying Agent, Transfer Agent, Registrar and Calculation Agent and Deutsche Bank
Luxembourg S.A., as Luxembourg Paying Agent (incorporated by reference to Exhibit 2.5 of our annual report on Form 20-F for the
year ended March 31, 2013) |
| 4.1 | Loan Agreement dated as of June 28, 2005 among Cosan S.A. Indústria e Comércio, as
borrower, and International Finance Corporation (incorporated by reference to our registration statement filed on Form F-1 with
the Securities and Exchange Commission on June 25, 2007) |
| 4.2 | Agreement for the Sale and Purchase of all of the Member Interests in Parent Co-Operative 1 and
Parent Co-Operative 2 dated April 23, 2008, between ExxonMobil International Holdings B.V., as vendor, and the registrant’s
subsidiaries Cosan S.A. Indústria e Comércio and Usina da Barra S.A. Açúcar e Álcool, as purchasers*
(incorporated by reference to our Amendment to our Current Report filed on Form 6-K/A on June 10, 2009) |
| 4.3 | Framework Agreement dated August 25, 2010 among Cosan S.A. Indústria e Comércio,
Cosan Distribuidora de Combustíveis S.A., Cosan Limited, Houches Holdings S.A., Shell Brasil Limitada, Shell Brazil Holding
B.V., Shell Overseas Holdings Limited and Milimétrica Participações S.A., or Framework Agreement (incorporated
by reference to Exhibit 4.3 of our annual report on Form 20-F for the year ended March 31, 2010) |
| 4.4 | First Amendment to the Framework Agreement, dated as of April 7, 2011 (incorporated by reference
to Exhibit 4.4 of our annual report on Form 20-F for the year ended March 31, 2011). |
| 4.5 | Second Amendment to the Framework Agreement, dated as of June 1, 2011 (incorporated by reference
to Exhibit 4.5 of our annual report on Form 20-F for the year ended March 31, 2011). |
| 4.6 | Joint Venture Agreement among Cosan S.A. Indústria e Comércio, Cosan Limited, Raízen
Combustíveis S.A., Raízen S.A., Shell Brazil Holding B.V., Shell Overseas Holdings Limited and Raízen Energia
Participações S.A. dated June 1, 2011(incorporated by reference to Exhibit 4.6 of our annual report on Form 20-F
for the year ended March 31, 2011). |
| 4.7 | Operating and Coordination Agreement dated June 1, 2011 relating to Raízen Energia Participações
S.A., Raízen Combustíveis S.A. and Raízen S.A. (incorporated by reference to Exhibit 4.7 of our annual report
on Form 20-F for the year ended March 31, 2011). |
| 4.8 | Shareholders Agreement of Raízen Combustíveis S.A., dated as of June 1, 2011(incorporated
by reference to Exhibit 4.8 of our annual report on Form 20-F for the year ended March 31, 2011). |
| 4.9 | Shareholders Agreement of Raízen Energia Participações S.A., dated as of June
1, 2011 (incorporated by reference to Exhibit 4.9 of our annual report on Form 20-F for the year ended March 31, 2011). |
| 4.10 | Term Loan among Cosan Cayman Limited, certain Lenders party thereto and Morgan Stanley Senior Funding,
Inc., as administrative agent for the Lenders dated April 1, 2011 (incorporated by reference to Exhibit 4.10 of our annual report
on Form 20-F for the year ended March 31, 2012). |
| 4.11 | Share Purchase Agreement for the acquisition of Comma Oil & Chemicals Limited dated February 29, 2012,
between Esso Petroleum Company, Limited and Cosan S.A. Indústria e Comércio (incorporated by reference to Exhibit
4.11 of our annual report on Form 20-F for the year ended March 31, 2013) |
| 4.12 | Share Purchase Agreement for the acquisition of Comgás dated May 28, 2012, between Integra
Investments B.V., BG Energy Holdings Limited, Provence Participações S.A. and Cosan S.A. Indústria e Comércio
(incorporated by reference to Exhibit 4.12 of our annual report on Form 20-F for the year ended March 31, 2013) |
| 8.1 | Subsidiaries of the Registrant (incorporated by reference as exhibit to our Annual Report on Form
20-F for the fiscal year ended December 31, 2014 filed on April 30, 2015). |
| 11.1 | Code of Ethics (incorporated by reference from our exhibit to our annual report filed on Form 20-F
for the Fiscal Year ended April 30, 2008). |
| 12.1 | Certification pursuant to section 302 of the Sarbanes-Oxley Act of 2002 of the Chief Executive
Officer** |
| 12.2 | Certification pursuant to section 302 of the Sarbanes-Oxley Act of 2002 of the Chief Financial
Officer** |
| 13.1 | Certification pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley
Act of 2002, of the Chief Executive Officer** |
| 13.2 | Certification pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley
Act of 2002, of the Chief Financial Officer** |
| 13.3 | Financial Statements as of March 31, 2015 and March 31, 2014 and for the three years ended
March 31,
2015, 2014
and 2013
of Raízen
Energia and
Raízen Combustíveis
** |
| 16.1 | Letter from PricewaterhouseCoopers Auditores Independentes to the SEC dated April 30, 2015 confirming
that PricewaterhouseCoopers Auditores Independentes agrees with the disclosures made by the Company in Item 16F of this annual
report on Form 20-F (incorporated by reference as exhibit to our Annual Report on Form 20-F for the fiscal year ended December
31, 2014 filed on April 30, 2015). |
* Portions
of this item have been omitted pursuant to a request for confidential treatment.
** Filed herewith.
SIGNATURES
The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized
the undersigned to sign this annual report on its behalf.
COSAN LIMITED
|
By: |
/s/ Marcelo Eduardo Martins |
|
Name: |
Marcelo Eduardo Martins |
|
Title: |
Chief Financial Officer |
Date: June 23, 2015
EXHIBIT 12.1
CERTIFICATION PURSUANT TO SECTION 302
OF THE SARBANES-OXLEY ACT OF 2002
I, Marcos Marinho Lutz, certify that:
1. I have reviewed this annual report
on Form 20-F of Cosan Limited;
2. Based on my knowledge, this report
does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made,
in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this
report;
3. Based on my knowledge, the financial
statements, and other financial information included in this report, fairly present in all material respects the financial condition,
results of operations and cash flows of the company as of, and for, the periods presented in this report;
4. [Omitted]
5. [Omitted]
Date: June 23, 2015
By: |
/s/ Marcos Marinho Lutz |
|
Name: |
Marcos Marinho Lutz |
|
Title: |
Chief Executive Officer |
EXHIBIT 12.2
CERTIFICATION PURSUANT TO SECTION 302
OF THE SARBANES-OXLEY ACT OF 2002
I, Marcelo Eduardo Martins, certify that:
1. I have reviewed this annual report
on Form 20-F of Cosan Limited;
2. Based on my knowledge, this report
does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made,
in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this
report;
3. Based on my knowledge, the financial
statements, and other financial information included in this report, fairly present in all material respects the financial condition,
results of operations and cash flows of the company as of, and for, the periods presented in this report;
4. [Omitted]
5. [Omitted]
Date: June 23, 2015
By: |
/s/ Marcelo Eduardo Martins |
|
Name: |
Marcelo Eduardo Martins |
|
Title: |
Chief Financial Officer |
EXHIBIT 13.1
CERTIFICATION PURSUANT TO 18 U.S.C.
SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE U.S. SARBANES-OXLEY ACT OF 2002
The certification set forth below is being
submitted in connection with the annual report on Form 20-F for the fiscal year ended December 31, 2014 ( the “Report”)
for the purposes of complying with Rule 13a-14(b) or Rule 15d-14(b) of the Securities and Exchange Act of 1934 (the “Exchange
Act”) and Section 1350 of Chapter 63 of Title 18 of the United States Code.
I, Marcos Marinho Lutz, the Chief Executive
Officer of Cosan Limited, certify that, to the best of my knowledge:
1. the Report fully complies with the
requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2. the information contained in the
Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: June 23, 2015
By: |
/s/ Marcos Marinho Lutz |
|
Name: |
Marcos Marinho Lutz |
|
Title: |
Chief Executive Officer |
EXHIBIT 13.2
CERTIFICATION PURSUANT TO 18 U.S.C.
SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE U.S. SARBANES-OXLEY ACT OF 2002
The certification set forth below is being
submitted in connection with the annual report on Form 20-F for the fiscal year ended December 31, 2014 ( the “Report”)
for the purposes of complying with Rule 13a-14(b) or Rule 15d-14(b) of the Securities and Exchange Act of 1934 (the “Exchange
Act”) and Section 1350 of Chapter 63 of Title 18 of the United States Code.
I, Marcelo Eduardo Martins, the Chief Financial
Officer of Cosan Limited, certify that, to the best of my knowledge:
1. the Report fully complies with the
requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2. the information contained in the
Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: June 23, 2015
By: |
/s/ Marcelo Eduardo Martins |
|
Name: |
Marcelo Eduardo Martins |
|
Title: |
Chief Financial Officer |
Exhibit
13.3
Item |
|
|
|
1. |
Raízen Combustíveis S.A. consolidated financial statements comprising the
consolidated balance sheets as of March 31, 2015 and 2014, and the related consolidated statements of income, comprehensive
income, changes in shareholders’ equity and cash flows for each of the three years in the period ended March 31, 2015
and Independent Auditors’ Report. |
|
|
2. |
Raízen Energia S.A. consolidated financial statements comprising the consolidated balance sheets as of March 31, 2015 and 2014, and the related consolidated statements of income, comprehensive income, changes in shareholders’ equity and cash flows for each of the three years in the period ended March 31, 2015 and Independent Auditors’ Report. |
These financial statements of Raizen Combustíveis S.A.
and Raizen Energia S.A. are being filed to comply with Rule 3-09 of Regulation S-X.
Raízen Combustíveis S.A.
RAÍZEN COMBUSTÍVEIS S.A.
Financial Statements as
of March 31, 2015
Table of Contents
Independent auditor’s report |
2 |
Consolidated balance sheet |
4 |
Consolidated statement of income |
6 |
Consolidated statement of comprehensive income |
7 |
Consolidated statement of changes in shareholders’ equity |
8 |
Consolidated statement of cash flows |
11 |
Notes to consolidated financial statements |
12 |
Independent Auditor's Report
To the Board of Directors and Shareholders
Raízen Combustíveis S.A.
We have audited the accompanying consolidated financial statements
of Raízen Combustíveis S.A. and its subsidiaries, which comprise the consolidated balance sheets as of March 31,
2015 and March 31, 2014, and the related consolidated statements of income, comprehensive income, changes in shareholders’
equity and cash flows for each of the three years in the period ended March 31, 2015.
Management's Responsibility for the Consolidated
Financial Statements
Management is responsible for the preparation and
fair presentation of the consolidated financial statements in accordance with International Financial Reporting Standards as issued
by the International Accounting Standards Board; this includes the design, implementation, and maintenance of internal control
relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement,
whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express an opinion on the
consolidated financial statements based on our audits. We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether the consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain
audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on our
judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due
to fraud or error. In making those risk assessments, we consider internal control relevant to the entity's preparation and fair
presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances,
but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express
no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant
accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the consolidated financial statements referred
to above present fairly, in all material respects, the financial position of Raízen Combustíveis S.A. and its subsidiaries
at March 31, 2015 and March 31, 2014, and the results of their operations and their cash flows for each of the three years in the
period ended March 31, 2015, in accordance with International Financial Reporting Standards as issued by the International Accounting
Standards Board.
Campinas, Brazil
June 22, 2015
/s/ PricewaterhouseCoopers
PricewaterhouseCoopers
Auditores Independentes
RAÍZEN COMBUSTÍVEIS S.A.
Consolidated balance sheet
March 31, 2015 and 2014
In thousands of Brazilian Reais
|
|
|
|
|
Note |
|
2015 |
|
2014 |
Assets |
|
|
|
|
|
Current assets |
|
|
|
|
|
|
Cash and cash equivalents |
3 |
|
232,943 |
|
566,606 |
|
Restricted cash |
4 |
|
57,313 |
|
52,779 |
|
Trade accounts receivable, net |
5 |
|
1,273,536 |
|
1,190,832 |
|
Derivative financial instruments |
25 |
|
115,899 |
|
23,888 |
|
Inventories |
6 |
|
1,079,085 |
|
941,982 |
|
Related parties |
9 |
|
334,847 |
|
257,813 |
|
Recoverable taxes |
7 |
|
167,834 |
|
145,407 |
|
Recoverable income tax and social contribution |
|
|
14,372 |
|
9,596 |
|
Prepaid expenses |
8 |
|
4,632 |
|
24,963 |
|
Dividends receivable |
10 |
|
- |
|
3,450 |
|
Other receivables |
|
|
27,522 |
|
39,656 |
|
|
|
|
|
3,307,983 |
|
3,256,972 |
|
|
|
|
|
|
|
|
Non-current assets |
|
|
|
|
|
|
Trade accounts receivable |
5 |
|
298,254 |
|
229,069 |
|
Related parties |
9 |
|
1,963,546 |
|
435,188 |
|
Prepaid expenses |
8 |
|
7,236 |
|
9,927 |
|
Recoverable taxes |
7 |
|
316,468 |
|
236,356 |
|
Deferred income tax and social contribution |
16 |
|
26,864 |
|
34,084 |
|
Judicial deposits |
18 |
|
70,998 |
|
83,391 |
|
Other receivables |
|
|
413 |
|
2,228 |
|
Investments in associates |
10 |
|
258,977 |
|
255,711 |
|
Property, plant and equipment |
11 |
|
1,881,818 |
|
1,815,442 |
|
Intangibles |
12 |
|
2,360,112 |
|
2,073,909 |
|
|
|
|
|
|
|
|
|
|
|
|
|
7,184,686 |
|
5,175,305 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
|
10,492,669 |
|
8,432,277 |
RAÍZEN COMBUSTÍVEIS S.A.
Consolidated balance sheet
March 31, 2015 and 2014
In thousands of Brazilian Reais
|
|
|
|
|
|
Note |
|
2015 |
|
2014 |
|
Liabilities and shareholders’ equity |
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
Trade accounts payable |
13 |
|
761,295 |
|
776,224 |
|
Short-term debt and current portion of long-term debt |
14 |
|
8,685 |
|
803,106 |
|
Derivative financial instruments |
25 |
|
19,919 |
|
724 |
|
Wages and salaries payable |
|
|
103,558 |
|
86,164 |
|
Taxes payable |
15 |
|
85,182 |
|
75,300 |
|
Income tax and social contribution |
|
|
12,871 |
|
3,866 |
|
Deferred revenue |
17 |
|
46,740 |
|
49,660 |
|
Dividends and interest on own capital payable |
20.b |
|
83,957 |
|
221,479 |
|
Related parties |
9 |
|
803,459 |
|
174,596 |
|
Bonus payable |
|
|
42,274 |
|
24,383 |
|
Other obligations |
|
|
197,436 |
|
170,160 |
|
|
|
|
|
|
|
|
|
|
|
2,165,376 |
|
2,385,662 |
|
Non-current liabilities
|
|
|
|
|
|
|
Long-term debt |
14 |
|
1,484,265 |
|
12,102 |
|
Derivative financial instruments |
25 |
|
- |
|
773 |
|
Taxes payable |
15 |
|
5,981 |
|
4,862 |
|
Provision for tax, civil and labor risks |
18 |
|
530,551 |
|
457,155 |
|
Deferred revenue |
17 |
|
262,943 |
|
306,093 |
|
Deferred income tax and social contribution |
16 |
|
198,486 |
|
17,012 |
|
Related parties |
9 |
|
1,214,304 |
|
847,921 |
|
Other obligations |
|
|
26,048 |
|
63,339 |
|
|
|
|
3,722,578 |
|
1,709,257 |
|
Total liabilities
|
|
|
5,887,954 |
|
4,094,919 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders’ equity |
20 |
|
|
|
|
|
Capital |
20.a |
|
3,194,918 |
|
3,069,328 |
|
Capital reserves |
|
|
719,664 |
|
721,693 |
|
Other comprehensive income |
20.c |
|
(585 |
) |
(175 |
) |
Retained earnings |
20.b and 20.e |
|
538,557 |
|
435,635 |
|
Equity attributable to controlling shareholders
|
|
|
4,452,554 |
|
4,226,481 |
|
Equity attributable to non-controlling interest |
|
|
152,161 |
|
110,877 |
|
Total shareholders’ equity
|
|
|
4,604,715 |
|
4,337,358 |
|
|
|
|
|
|
|
|
Total liabilities and shareholders’ equity |
|
|
10,492,669 |
|
8,432,277 |
|
RAÍZEN COMBUSTÍVEIS S.A.
Consolidated statement of income
Years ended March 31, 2015, 2014 and 2013
In thousands of Brazilian Reais, except for earnings per share which is presented in R$
|
Note |
|
2015 |
|
2014 |
|
2013 |
|
|
|
|
|
|
|
|
|
|
Continuing operations |
|
|
|
|
|
|
|
|
Net sales |
21 |
|
56,784,481 |
|
50,591,526 |
|
43,532,232 |
|
Cost of sales |
22 |
|
(53,853,650 |
) |
(48,005,216 |
) |
(41,199,019 |
) |
Gross profit
|
|
|
2,930,831 |
|
2,586,310 |
|
2,333,213 |
|
|
|
|
|
|
|
|
|
|
Operating income (expenses) |
|
|
|
|
|
|
|
|
Selling expenses |
22 |
|
(1,110,930 |
) |
(1,015,036 |
) |
(953,696 |
) |
General and administrative expenses |
22 |
|
(382,395 |
) |
(391,039 |
) |
(361,616 |
) |
Other operating income, net |
24 |
|
398,813 |
|
460,577 |
|
314,223 |
|
|
|
|
(1,094,512 |
) |
(945,498 |
) |
(1,001,089 |
) |
|
|
|
|
|
|
|
|
|
Operating income |
|
|
1,836,319 |
|
1,640,812 |
|
1,332,124 |
|
|
|
|
|
|
|
|
|
|
Financial income |
|
|
|
|
|
|
|
|
Finance expenses |
23 |
|
(161,750 |
) |
(83,462 |
) |
(79,227 |
) |
Finance revenues |
23 |
|
124,328 |
|
86,737 |
|
116,530 |
|
Foreign exchange, net |
23 |
|
(277,513 |
) |
(148,537 |
) |
(93,839 |
) |
Derivatives, net |
23 |
|
202,017 |
|
46,723 |
|
(2,096 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
(112,918 |
) |
(98,539 |
) |
(58,632 |
) |
|
|
|
|
|
|
|
|
|
Income before the result of equity method |
|
|
1,723,401 |
|
1,542,273 |
|
1,273,492 |
|
|
|
|
|
|
|
|
|
|
Income from equity method |
10 |
|
13,696 |
|
10,080 |
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before taxes |
|
|
1,737,097 |
|
1,552,353 |
|
1,273,492 |
|
|
|
|
|
|
|
|
|
|
Current tax |
16 |
|
(323,240 |
) |
(375,827 |
) |
(284,774 |
) |
Deferred tax |
16 |
|
(173,284 |
) |
(88,941 |
) |
(87,160 |
) |
|
|
|
(496,524 |
) |
(464,768 |
) |
(371,934 |
) |
Net income
|
|
|
1,240,573 |
|
1,087,585 |
|
901,558 |
|
|
|
|
|
|
|
|
|
|
Attributable to: |
|
|
|
|
|
|
|
|
Controlling shareholders |
|
|
1,202,294 |
|
1,063,546 |
|
877,716 |
|
Non-controlling shareholders |
|
|
38,279 |
|
24,039 |
|
23,842 |
|
|
|
|
1,240,573 |
|
1,087,585 |
|
901,558 |
|
|
|
|
|
|
|
|
|
|
Earnings per share (Basic and diluted) |
20.f |
|
0.34 |
|
0.27 |
|
0.22 |
|
RAÍZEN COMBUSTÍVEIS S.A.
Consolidated statement of comprehensive income
Years ended March 31, 2015, 2014 and 2013
In thousands of Brazilian Reais
|
|
2015 |
|
2014 |
|
2013 |
|
|
|
|
|
|
|
|
|
Net income |
|
1,240,573 |
|
1,087,585 |
|
901,558 |
|
|
|
|
|
|
|
|
|
Other comprehensive income
Items that will not be reclassified to
profit or loss
|
|
|
|
|
|
|
|
Actuarial losses on post-employment benefit plans |
|
(636 |
) |
(265 |
) |
-
|
|
Deferred taxes on adjustments |
|
216 |
|
90 |
|
- |
|
|
|
(420 |
) |
(175 |
) |
- |
|
|
|
|
|
|
|
|
|
Total comprehensive income |
|
1,240,153 |
|
1,087,410 |
|
901,558 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attributable to: |
|
|
|
|
|
|
|
Controlling shareholders |
|
1,201,884 |
|
1,063,371 |
|
877,716 |
|
Non-controlling shareholders |
|
38,269 |
|
24,039 |
|
23,842 |
|
|
|
|
|
|
|
|
|
|
|
1,240,153 |
|
1,087,410 |
|
901,558 |
|
RAÍZEN COMBUSTÍVEIS S.A.
Consolidated
statement of changes in shareholders’ equity
Years ended March 31, 2015, 2014 and 2013
In
thousands of Brazilian ReaisCapital reserves
| |
Attributable to controlling shareholders | |
| |
|
| |
| | | |
| | Capital
reserves | | |
| Retained
earnings | | |
| | | |
| | |
| |
| Capital stock | | |
| Capital reserve | | |
| Special Law 8200/91 | | |
| Profit retention | | |
| Legal reserve | | |
| Accumulated profits (loss) | | |
| Total | | |
| Attributable to non-controlling shareholders | | |
| Total shareholders’ equity | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Balances on March 31, 2012 | |
| 2,625,795 | | |
| 740,768 | | |
| 16,677 | | |
| 360,053 | | |
| 39,920 | | |
| — | | |
| 3,783,213 | | |
| 51,371 | | |
| 3,834,584 | |
Comprehensive income for the fiscal year
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Net income | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 877,716 | | |
| 877,716 | | |
| 23,842 | | |
| 901,558 | |
Total comprehensive income for the fiscal year
| |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 877,716 | | |
| 877,716 | | |
| 23,842 | | |
| 901,558 | |
Contributions of (distributions to) shareholders
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Capital increase | |
| 107,260 | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 107,260 | | |
| 4,907 | | |
| 112,167 | |
Reversal of provision of share-based compensation | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| (1,221 | ) | |
| (1,221 | ) |
Partial realization of the reserve | |
| — | | |
| — | | |
| (3,575 | ) | |
| — | | |
| — | | |
| 3,575 | | |
| — | | |
| — | | |
| — | |
Transfer to the legal reserve | |
| — | | |
| — | | |
| — | | |
| — | | |
| 43,886 | | |
| (43,886 | ) | |
| — | | |
| — | | |
| — | |
Dividends paid and interest on own capital paid in advance | |
| — | | |
| — | | |
| — | | |
| (181,741 | ) | |
| — | | |
| (400,000 | ) | |
| (581,741 | ) | |
| (16,453 | ) | |
| (598,194 | ) |
Dividends to shareholders of preferred shares | |
| 148,412 | | |
| 15,783 | | |
| — | | |
| — | | |
| — | | |
| (143,560 | ) | |
| (10,931 | ) | |
| — | | |
| (10,931 | ) |
Transfer to reserves | |
| — | | |
| — | | |
| — | | |
| 293,845 | | |
| — | | |
| (293,845 | ) | |
| — | | |
| — | | |
| — | |
Total of contributions (distributions to) shareholders
| |
| 255,672 | | |
| (15,783 | ) | |
| (3,575 | ) | |
| 112,104 | | |
| 43,886 | | |
| (877,716 | ) | |
| (485,412 | ) | |
| (12,767 | ) | |
| (498,179 | ) |
Transactions with shareholders
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Acquisition of interest in Mime | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 36,109 | | |
| 36,109 | |
Premium paid on acquisition of non-controlling interest in Mime | |
| — | | |
| (12,607 | ) | |
| — | | |
| — | | |
| — | | |
| — | | |
| (12,607 | ) | |
| (3,308 | ) | |
| (15,915 | ) |
Total of transactions with shareholders
| |
| — | | |
| (12,607 | ) | |
| — | | |
| — | | |
| — | | |
| — | | |
| (12,607 | ) | |
| 32,801 | | |
| 20,194 | |
Balances on March 31, 2013
| |
| 2,881,467 | | |
| 712,378 | | |
| 13,102 | | |
| 472,157 | | |
| 83,806 | | |
| — | | |
| 4,162,910 | | |
| 95,247 | | |
| 4,258,157 | |
RAÍZEN COMBUSTÍVEIS S.A.
Consolidated statement of changes in shareholders’
equity
Years ended March 31, 2015, 2014 and 2013
In thousands of Brazilian Reais
| |
| |
Attributable to controlling shareholders | |
| |
|
| |
| | | |
| | | |
| Capital reserves | | |
| | | |
| Retained earnings | | |
| | | |
| | |
| |
| Note | | |
| Capital stock | | |
| Capital reserve | | |
| Special Law 8200/91 | | |
| Other comprehensive income | | |
| Profit retention | | |
| Legal reserve | | |
| Accumulated profits (loss) | | |
| Total | | |
| Attributable to non-controlling shareholders | | |
| Total shareholders’ equity | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Balances on March 31, 2013 | |
| | | |
| 2,881,467 | | |
| 712,378 | | |
| 13,102 | | |
| — | | |
| 472,157 | | |
| 83,806 | | |
| — | | |
| 4,162,910 | | |
| 95,247 | | |
| 4,258,157 | |
Comprehensive income for the fiscal year
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Net income | |
| | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 1,063,546 | | |
| 1,063,546 | | |
| 24,039 | | |
| 1,087,585 | |
Actuarial losses | |
| | | |
| — | | |
| — | | |
| — | | |
| (175 | ) | |
| — | | |
| — | | |
| — | | |
| (175 | ) | |
| — | | |
| (175 | ) |
Total comprehensive income
| |
| | | |
| — | | |
| — | | |
| — | | |
| (175 | ) | |
| — | | |
| — | | |
| 1,063,546 | | |
| 1,063,371 | | |
| 24,039 | | |
| 1,087, 410 | |
Contributions of (distributions to) shareholders
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Partial realization of reserve
| |
| | | |
| — | | |
| — | | |
| (5,289 | ) | |
| — | | |
| — | | |
| — | | |
| 5,289 | | |
| — | | |
| — | | |
| — | |
Reversal of mandatory minimum dividends | |
| | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 596 | | |
| | | |
| — | | |
| 596 | | |
| 3,624 | | |
| 4,220 | |
Dividends paid and interest on own capital paid in advance | |
| 20.b and 20.e | | |
| — | | |
| — | | |
| — | | |
| — | | |
| (458,898 | ) | |
| — | | |
| (543,000 | ) | |
| (1,001,898 | ) | |
| (7,992 | ) | |
| (1,009,890 | ) |
Dividends to shareholders of preferred shares | |
| 20.a and 20.b | | |
| 187,861 | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| (187,861 | ) | |
| — | | |
| (2,539 | ) | |
| (2,539 | ) |
Transfers to reserves | |
| | | |
| — | | |
| 1,502 | | |
| — | | |
| — | | |
| 284,796 | | |
| 53,178 | | |
| (337,974 | ) | |
| 1,502 | | |
| (1,502 | ) | |
| — | |
Total of contributions (distributions to) shareholders | |
| | | |
| 187,861 | | |
| 1,502 | | |
| (5,289 | ) | |
| — | | |
| (173.506 | ) | |
| 53,178 | | |
| (1,063,546 | ) | |
| (999,800 | ) | |
| (8,409 | ) | |
| (1,008,209 | ) |
Balances on March 31, 2014
| |
| | | |
| 3,069,328 | | |
| 713,880 | | |
| 7,813 | | |
| (175 | ) | |
| 298,651 | | |
| 136,984 | | |
| — | | |
| 4,226,481 | | |
| 110,877 | | |
| 4,337,358 | |
RAÍZEN COMBUSTÍVEIS S.A.
Consolidated statement of changes in shareholders’
equity
Years ended March 31, 2015, 2014 and 2013
In thousands of Brazilian Reais
| |
| |
Attributable to controlling shareholders | |
| |
|
| |
| | | |
| | | |
| Capital reserves | | |
| | | Retained
earnings | | |
| | | |
| | |
| |
| Note | | |
| Capital stock | | |
| Capital reserve | | |
| Special Law 8200/91 | | |
| Other comprehensive income | | |
| Profit retention | | |
| Legal reserve | | |
| Accumulated profits (loss) | | |
| Total | | |
| Attributable to non-controlling shareholders | | |
| Total shareholders’ equity | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Balances on March 31, 2014 | |
| | | |
| 3,069,328 | | |
| 713,880 | | |
| 7,813 | | |
| (175 | ) | |
| 298,651 | | |
| 136,984 | | |
| — | | |
| 4,226,481 | | |
| 110,877 | | |
| 4,337,358 | |
Comprehensive income for the fiscal year
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Net income | |
| | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 1,202,294 | | |
| 1,202,294 | | |
| 38,279 | | |
| 1,240,573 | |
Actuarial losses | |
| | | |
| | | |
| — | | |
| — | | |
| (410 | ) | |
| — | | |
| — | | |
| — | | |
| (410 | ) | |
| (10 | ) | |
| (420 | ) |
Total comprehensive income
| |
| | | |
| — | | |
| — | | |
| — | | |
| (410 | ) | |
| — | | |
| — | | |
| 1,202,294 | | |
| 1,201,884 | | |
| 38,269 | | |
| 1,240,153 | |
Contributions of (distributions to) shareholders | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Capital increase | |
| | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 9,956 | | |
| 9,956 | |
Partial realization of reserve | |
| | | |
| — | | |
| — | | |
| (3,553 | ) | |
| — | | |
| — | | |
| — | | |
| 3,553 | | |
| — | | |
| — | | |
| — | |
Dividends and interest on own capital paid in advance | |
| 20.b and 20.e | | |
| — | | |
| — | | |
| — | | |
| — | | |
| (246,682 | ) | |
| | | |
| (729,860 | ) | |
| (976,542 | ) | |
| (9,544 | ) | |
| (986,086 | ) |
Dividends to shareholders of preferred shares | |
| 20.a and 20.b | | |
| 125,590 | | |
| — | | |
| — | | |
| — | | |
| (51,969 | ) | |
| — | | |
| (74,412 | ) | |
| (791 | ) | |
| — | | |
| (791 | ) |
Transfer to reserves | |
| | | |
| — | | |
| 1,524 | | |
| — | | |
| — | | |
| 341,460 | | |
| 60,113 | | |
| (401,575 | ) | |
| 1,522 | | |
| 2,603 | | |
| 4,125 | |
Total of contributions (distributions to) to shareholders
| |
| | | |
| 125,590 | | |
| 1,524 | | |
| (3,553 | ) | |
| — | | |
| 42,809 | | |
| 60,113 | | |
| (1,202,294 | ) | |
| (975,811 | ) | |
| 3,015 | | |
| (972,796 | ) |
Balances on March 31, 2015
| |
| | | |
| 3,194,918 | | |
| 715,404 | | |
| 4,260 | | |
| (585 | ) | |
| 341,460 | | |
| 197,097 | | |
| — | | |
| 4,452,554 | | |
| 152,161 | | |
| 4,604,715 | |
RAÍZEN COMBUSTÍVEIS S.A.
Consolidated statement of cash flows
Years ended March 31, 2015, 2014 and 2013
In thousands of Brazilian Reais
| |
| 2015 | | |
| 2014 | | |
| 2013 | |
| |
| | | |
| | | |
| | |
Operating activities: | |
| | | |
| | | |
| | |
Income before taxes | |
| 1,737,097 | | |
| 1,552,353 | | |
| 1,273,492 | |
Adjustments: | |
| | | |
| | | |
| | |
Depreciation and amortization (Notes 11 and 12) | |
| 473,040 | | |
| 441,667 | | |
| 421,073 | |
Equity in income of associates (Note 10) | |
| (13,696 | ) | |
| (10,080 | ) | |
| — | |
Gain on disposal of property, plant and equipment (Note 24) | |
| (121,956 | ) | |
| (196,471 | ) | |
| (63,187 | ) |
Bargain purchase in business combination | |
| — | | |
| — | | |
| (17,267 | ) |
Net of provision for doubtful accounts | |
| 6,635 | | |
| 3,258 | | |
| (844 | ) |
Constitution of provision for tax, labor and civil risks | |
| 2,636 | | |
| 8,134 | | |
| 5,128 | |
Interest, monetary and exchange variation, net | |
| 330,607 | | |
| 165,836 | | |
| 93,261 | |
Derivative financial instruments – change in fair value | |
| (95,979 | ) | |
| (22,392 | ) | |
| — | |
Amortization of deferred revenue | |
| (49,115 | ) | |
| (48,028 | ) | |
| (53,872 | ) |
Amortization of prepaid expenses | |
| 57,864 | | |
| 43,590 | | |
| 42,742 | |
Others | |
| 4,814 | | |
| 6,294 | | |
| 9,911 | |
Changes in operating assets and liabilities: | |
| | | |
| | | |
| | |
Restricted cash | |
| (4,535 | ) | |
| (21,924 | ) | |
| (30,855 | ) |
Trade accounts receivable (include related parties) | |
| 2,920 | | |
| 267,859 | | |
| 112,848 | |
Financial instruments | |
| 22,391 | | |
| (19,722 | ) | |
| — | |
Inventories | |
| (111,052 | ) | |
| (36,587 | ) | |
| (174,614 | ) |
Taxes and contributions – Recoverable | |
| (94,346 | ) | |
| (53,691 | ) | |
| 62,332 | |
Advances to suppliers | |
| 5,323 | | |
| 1,470 | | |
| (1,061 | ) |
Judicial deposits | |
| 20,315 | | |
| (33,363 | ) | |
| (2,867 | ) |
Wages and salaries payable | |
| 15,659 | | |
| 8,361 | | |
| 13,777 | |
Taxes and social contributions payable | |
| (117,060 | ) | |
| (157,199 | ) | |
| (107,205 | ) |
Deferred revenue | |
| 3,046 | | |
| 1,028 | | |
| 13,500 | |
Trade accounts payable (include related parties) | |
| (60,696 | ) | |
| 36,090 | | |
| 131,645 | |
Provision for tax, labor and civil risks | |
| (4,024 | ) | |
| (883 | ) | |
| (3,979 | ) |
Other obligations | |
| (25,752 | ) | |
| 12,782 | | |
| (37,027 | ) |
Other assets and liabilities, net | |
| (19,172 | ) | |
| (64,958 | ) | |
| 4,175 | |
Income tax and social contribution paid | |
| (213,584 | ) | |
| (281,927 | ) | |
| (234,333 | ) |
| |
| | | |
| | | |
| | |
Net cash provided by operating activities | |
| 1,751,380 | | |
| 1,601,497 | | |
| 1,456,773 | |
| |
| | | |
| | | |
| | |
Investing activities: | |
| | | |
| | | |
| | |
Addition to property, plant and equipment and intangible assets (Notes 11 and 12) | |
| (732,687 | ) | |
| (722,565 | ) | |
| (697,459 | ) |
Acquisitions of new business, net of acquired cash (Notes 10.d and 27.i) | |
| (177,744 | ) | |
| (250,000 | ) | |
| (16,214 | ) |
Proceeds received from the sale of property, plant and equipment | |
| 206,899 | | |
| 340,150 | | |
| 219,746 | |
Dividends received | |
| 13,880 | | |
| 919 | | |
| — | |
| |
| | | |
| | | |
| | |
Net cash used in investing activities | |
| (689,652 | ) | |
| (631,496 | ) | |
| (493,927 | ) |
| |
| | | |
| | | |
| | |
Financing activities: | |
| | | |
| | | |
| | |
New loans and financing | |
| 1,494,133 | | |
| 103,713 | | |
| — | |
Payment of principal of loans and financing | |
| (1,208,676 | ) | |
| (104,281 | ) | |
| (110,674 | ) |
Interest paid of loans and financing | |
| (59,224 | ) | |
| (78,602 | ) | |
| (67.112 | ) |
Dividends and interest on own capital paid | |
| (1,214,073 | ) | |
| (1,098,439 | ) | |
| (905,073 | ) |
Capital payment | |
| — | | |
| — | | |
| 180,367 | |
Capital payment by non-controlling shareholders | |
| 1,200 | | |
| — | | |
| 4,907 | |
Related parties | |
| (408,751 | ) | |
| 657,985 | | |
| 15,591 | |
| |
| | | |
| | | |
| | |
Net cash used in financing activities | |
| (1,395,391 | ) | |
| (519,624 | ) | |
| (881,994 | ) |
| |
| | | |
| | | |
| | |
Net (decrease)/increase in cash and cash equivalents | |
| (333,663 | ) | |
| 450,377 | | |
| 80,852 | |
At the beginning of year | |
| 566,606 | | |
| 116,229 | | |
| 35,377 | |
| |
| | | |
| | | |
| | |
At the end of year (Note 3) | |
| 232,943 | | |
| 566,606 | | |
| 116,229 | |
| |
| | | |
| | | |
| | |
Supplementary information of cash flows: | |
| | | |
| | | |
| | |
Investments transactions which do not involve cash | |
| | | |
| | | |
| | |
Provision (reversal) for removal of fuel storage tanks | |
| 3,951 | | |
| 25,651 | | |
| 4,031 | |
Interest capitalization on property, plant and equipment (Notes 11 and 23) | |
| (9,685 | ) | |
| (21,441 | ) | |
| (21,132 | ) |
Tax credits on property, plant and equipment | |
| 13,886 | | |
| 10,822 | | |
| (3,339 | ) |
Exclusive rights on Fuel supply | |
| (31,903 | ) | |
| 7,462 | | |
| 14,355 | |
| |
| (23,751 | ) | |
| 22.494 | | |
| (6,085 | ) |
Financial transactions which do not involve cash | |
| | | |
| | | |
| | |
Capital contribution by minority shareholders with dividend | |
| 1,556 | | |
| — | | |
| — | |
Capital contribution by minority shareholders to pay | |
| 7,200 | | |
| — | | |
| — | |
Dividends and interest on own capital payable (Note 20.d) | |
| (83,957 | ) | |
| (221,479 | ) | |
| (147,182 | ) |
| |
| (75,201 | ) | |
| (221,479 | ) | |
| (147,182 | ) |
RAÍZEN COMBUSTÍVEIS S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
Raízen Combustíveis S.A. (the “Company”
or “Raízen Combustíveis”) is a privately owned company headquartered in the city of Rio de Janeiro, state
of Rio de Janeiro, Brazil. The Company is jointly controlled indirectly by Royal Dutch Shell (“Shell”) and Cosan S.A.
Indústria e Comércio (“Cosan”).
The Company’s main activities are: (i) the distribution
and sale of oil and ethanol byproducts and other hydrocarbon fluids and their byproducts, mainly Shell branded, (ii) the sale of
natural gas and acting as sales representative for the sale of lubricants in gas stations, (iii) the purchase and sale of products
and goods for sale in convenience stores, (iv) the import and export of the aforementioned products and (v) investing in other
companies.
The consolidated financial statements were
approved by the Company’s Board of Directors on June 22, 2015.
| 2. | Significant accounting policies |
The consolidated financial statements have
been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards
Board (IASB).
The consolidated financial statements has been prepared using
historical costs as a basis, except, when applicable, for the valuation of certain assets and liabilities, such as financial instruments
derivatives and non-derivatives, which are measured at fair value.
| (b) | Functional currency and presentation currency |
The consolidated financial statements are presented in Brazilian
Reais, which is the Company's functional currency. The financial statements of each subsidiary included in consolidation and those
used as the bases for valuing investments using the equity accounting method are prepared using the functional currency of each
company. For the subsidiaries located abroad, assets and liabilities have been translated into Brazilian Reais using the exchange
rate as at the balance sheet date, while the income has been translated using the monthly rate. The effects of this currency translation
are recorded in the shareholders' equity as other comprehensive income.
| (c) | Judgments, estimates and significant accounting
assumptions |
In preparing these consolidated financial statements, management
has made judgments, estimates and assumptions that affect the application of the Company’s accounting policies and the reported
amounts of assets, liabilities, income and expenses.
Estimates and underlying assumptions are reviewed on an ongoing
basis. Revisions to estimates are recognized prospectively.
RAÍZEN COMBUSTÍVEIS S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
If there is a significant change in the facts or circumstances
on which the estimates and assumptions used are based, this may have a material impact on the Company’s results and financial
condition.
The significant accounting estimates and assumptions are as
follows:
Income tax, social contribution and other taxes payable
The Company is subject to income tax in all countries in which
it operates. Significant judgment is required in determining the provision for income taxes in these various countries.
In many operations, the final tax determination is uncertain.
The Company also recognizes provisions to cover certain situations where it is likely that additional taxes are owed. When the
final outcome of these matters is different from the initially estimated and recorded values, these differences affect assets and
current tax liabilities and deferred in the period in which the determination is made.
Deferred income tax and social contribution
The deferred income tax and social contribution are recognized
for all unused tax losses, to the extent that it is probable that taxable income available to allow the use of these tax losses.
Significant Management judgment is required to determine the value of the income tax and deferred social contribution, which can
be recognized based upon the likely timing and level of future taxable profits together with future tax planning strategies.
The taxes on income deferred assets and liabilities are presented
net in the balance sheet only when there is a legal right and the intention to offset them upon the calculation of current taxes,
usually related to the same legal entity and the same taxation authority. For details of deferred taxes, see Note 16.
Property, plant and equipment and intangible assets, including
goodwill
The accounting treatment of the fixed assets and intangible
assets includes the use of estimates to determine the useful life period for the purposes of their depreciation and amortization,
in addition to their fair value at the acquisition date, in particular for assets acquired in business combinations. The Company
makes the analysis of recoverable amount, in order to identify potential goodwill impairments.
The determination of the recoverable amount of the cash-generating
unit to which goodwill has been allocated also includes the use of assumptions and estimates, and requires a significant degree
of judgment.
Provision for tax, civil, labor and environmental claims
The Company and its subsidiaries recognized a provision for
probable losses for tax, civil, labor and environmental claims. The assessment of probability of loss includes assessing the available
evidence, the hierarchy of laws, available case law, recent court decisions and their relevance in the legal system, as well as
the evaluation of outside counsel. These provisions are reviewed and adjusted to take into account changes in circumstances, such
as applicable statutes of limitation, conclusions of tax audits or additional exposures identified based on new matters or court
decisions.
RAÍZEN COMBUSTÍVEIS S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
Provision for the removal of storage tanks
Future spending for the removal of fuel storage tanks is estimated
and recorded as part of the cost of these assets and a corresponding provision is made for these expenses, the expenses are presented
as property, plant and equipment and the provision is presented as non-current or current liabilities. Estimates of these expenses
are recorded considering the present value of these obligations, discounted at a risk-free interest rate.
Fair value of financial instruments
When the fair value of financial assets and financial liabilities
in the balance sheet cannot be obtained from active markets, it is determined using valuation techniques, including the discounted
cash flow method. Data for these methods are based on those used in the market, if possible; however, when not possible, a certain
level of judgment is required to determine the fair value. Judgment includes considerations on the data used, such as, for example,
liquidity risk, credit risk, and volatility. Changes in the assumptions related to these factors could affect the fair value of
financial instruments. For more details on financial instruments, see Note 25.
| 2.2. | Basis of Consolidation |
The consolidated financial statements include the financial
statements of Raízen Combustíveis and its subsidiaries for the years ended March 31, 2015 and 2014. The subsidiaries
are listed below:
|
2015 |
|
2014 |
|
|
Direct |
|
Indirect |
|
Direct |
|
Indirect |
|
|
|
|
|
|
|
|
|
|
Blueway Trading Importação e Exportação S.A. |
100% |
|
- |
|
100% |
|
- |
|
Raízen Fuels Finance Limited |
100% |
|
- |
|
100% |
|
- |
|
Raízen Mime Combustíveis S.A. |
76% |
|
- |
|
76% |
|
- |
|
Petróleo Sabbá S.A. |
80% |
|
- |
|
80% |
|
- |
|
Sampras Participações Ltda. (“Sampras”) |
100% |
|
- |
|
100% |
|
- |
|
Saturno Investimentos Imobiliários Ltda. (1) |
100% |
|
- |
|
- |
|
- |
|
Sabor Raíz Alimentação S.A. (2) |
- |
|
60% |
|
- |
|
- |
|
| (1) | Company incorporated on December 18, 2014 (Note 28.ii). |
| (2) | Company subsidiary of Sampras, incorporated on July 18, 2014. |
The subsidiaries are fully consolidated as from the date that
control commences and continue to be consolidated until the date that control ceases. The financial statements of the subsidiaries
are prepared for the same period of the Company, using consistent accounting policies. The balances kept among consolidated companies,
revenues, expenses and unrealized gains and losses from transactions among consolidated companies are fully eliminated.
A change in the participation in a subsidiary that does not
result in loss of control is booked as a transaction between shareholders in shareholders’ equity.
RAÍZEN COMBUSTÍVEIS S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
The
Company uses the acquisition method to account for the business combinations. The consideration transferred for the acquisition
of a subsidiary is the fair value of the transferred assets, liabilities incurred and equity instruments issued by the Company.
The consideration transferred includes the fair value of assets and liabilities resulting from a contingent consideration arrangement,
when applicable. Costs related to the acquisition are recorded in the income statement as incurred. The acquired identifiable assets
and liabilities (including contingent) assumed in a business combination are measured initially at their fair values at
the acquisition date.
The Company recognizes non-controlling interest in
the acquire either at fair value as the proportionate share of non-controlling interest in the fair value of net assets acquired.
The measurement of non-controlling interest is determined for each acquisition.
The excess of the consideration transferred and the
fair value at the acquisition date of any previous equity interest in the acquiree over the fair value of the Company's share of
the identifiable net assets acquired is recorded as goodwill. Where applicable, the acquisitions that the Company attributes fair
value to non-controlling interests, the determination of goodwill also includes the value of any non-controlling interest in the
acquisition and the goodwill is determined considering the participation of the Company and non-controlling interests. When the
consideration transferred is less than the fair value of the net assets of the subsidiary acquired, the difference is recognized
directly in the statement of income.
The adjustments are made when necessary to align the accounting
policies with those of the Company.
| 2.3. | Summary of the significant accounting practices |
The accounting practices described below have been applied consistently
to the years presented in the consolidated financial statements.
Revenue is recognized when the significant risks and rewards
of ownership have been transferred to the customer, collection is probable, the associated costs and possible return of goods can
be reliably estimated, there is no continuing managerial involvement with the goods, and the amount of revenue can be measured
reliably. Revenue is measured net of returns, trade discounts, volume rebates, and taxes.
Goods or services for which revenue is deferred are recorded
as liability under prepaid expenses, and are recorded as revenues through delivery of goods or services rendered.
The revenue is presented net of taxes (Tax on the Circulation
of Goods and Services [ICMS], Employees’ Profit Participation Program [PIS], Tax for Social Security Financing [COFINS]),
of returns, abatements and discounts, amortizations related to exclusive rights of supply.
The revenue earned from rental and storage includes fuel station
rentals and fuel storage to counterparts in the terminals of the Company, recognized on an accrual basis, under Other operating
income, net (Note 24).
RAÍZEN COMBUSTÍVEIS S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
| (b) | Transactions in foreign currency |
Transactions in foreign currency are initially recognized by
Company entities at the functional currency rate ruling on the transaction date or on the valuation dates, when the items are revalued.
Monetary assets and liabilities denominated in foreign currency
are converted into Brazilian currency using the exchange rate ruling on the date of the respective balance sheets, and exchange
gains or losses resulting from the settlement of these transactions and conversion at the exchange rates ruling at the end of the
year are recognized in the statement of income, under Financial Income.
Non-monetary items measured by historic cost in foreign currency
are converted at the conversion rate on the initial date of the transaction. Non-monetary items measured by fair value in foreign
currency are converted using the exchange rate effective on the date when the fair value was determined.
| (c) | Financial instruments - Initial recognition and
subsequent measurement |
Initial recognition and measurement
Financial assets are classified in the following categories:
measured at fair value through profit or loss, held to maturity, available for sale, loans and receivables. The Company determines
the classification of its financial assets at initial recognition.
Financial assets are initially recognized at fair value plus,
in the case of investments not designated as being at fair value through profit or loss, the transaction costs directly attributable
to the acquisition of financial assets.
Financial assets include cash and cash equivalents, restricted
cash, trade accounts receivable, related parties and derivative financial instruments
Subsequent measurement
The subsequent measurement of financial assets depends on their
classification, which may be as follows:
Financial assets at fair value through profit or loss
Financial assets measured at fair value through profit or loss
include financial assets maintained for negotiation and assets designated at initial recognition at fair value through profit or
loss. They are classified as held for trading if they are originated for the purpose of sale or repurchase in the short term. Derivatives
are measured at fair value through profit or loss, except for those designated as hedge instruments. Interest, inflation adjustments,
exchange variations and variations resulting from valuation at fair value are recognized on the statement of income as finance
income.
RAÍZEN COMBUSTÍVEIS S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
Loans and receivables
Loans and receivables are non-derivative financial assets with
fixed or determinable payments that are not quoted in an active market. After initial measurement, those financial assets are recorded
at amortized cost using the effective interest method (effective interest rate), less impairment loss. The amortized cost is calculated
taking into account any discount or premium in the acquisition and taxes or costs incurred. The amortization of the effective interest
method is included in financial revenues or the expenses line in the statement of income.
Held-to-maturity financial assets
This includes those non-derivative financial assets with fixed
payments or determinable payments with defined maturity for which the Company has a firm intent and ability to maintain until the
maturity date. Interest, inflation adjustments, exchange variations, less impairment losses, where applicable, are recognized in
the statement of income when incurred in the financial income.
Available-for-sale financial assets
Available for sale financial assets are non-derivative financial
assets that are designated in this category on initial recognition or not classified in any of above categories. They are presented
as non-current assets, unless the Company intends to settle the investment in the 12 months after the balance date.
Derecognition (write-off)
A financial asset is derecognized when: (i) the right for receiving
cash flows from assets expires; and, (ii) The Company has transferred its rights to receive cash flows from the asset or has assumed
an obligation to pay up the cash flows received in full, without significant delay, to a third party under a transfer agreement;
and (a) the Company substantially transfers all the risks and benefits of the asset or (b) the Company does not substantially transfer
all the risks and benefits relating to the asset, but transfers control over it.
Impairment of financial assets
The Company reviews on the balance sheet dates if there is any
objective evidence that the financial assets or group of financial assets would not be recoverable. A financial asset or group
of financial assets is considered to be impaired if, and only if, there is objective evidence that its value are unrecoverable
as the result of one or more events that have taken place since the asset was first recognized (a “loss event”) and
this loss event affects the estimated future cash flow of the financial assets, or group of financial assets, to an extent that
can be reasonably estimated.
RAÍZEN COMBUSTÍVEIS S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
The criteria that the Company follows to determine whether there
is objective evidence of impairment loss include: (i) significant financial difficulty of the issuer or obligor; (ii) a breach
of contract, such as a default or delinquency in interest or principal payments; (iii) the Company, for economic or legal reasons
connected with the financial difficulties of the borrower, extends a concession to the borrower that a creditor would not normally
consider; (iv) it becomes likely that the borrower will declare bankruptcy or file for some other type of financial reorganization;
(v) the disappearance of an active market for a financial asset due to financial problems; or (vi) observable data indicating that
there is a measurable reduction in estimated future cash flows from a portfolio of financial assets, dating from the initial recognition
of such assets, even if the reduction cannot yet be identified in respect of individual financial assets in the portfolio, including:
(a) adverse changes in the payment situation of borrowers of loans contained in the portfolio; and (b) country-wide or local economic
conditions which are correlated with defaults on assets in the portfolio.
If in a subsequent period the amount of the loss due to impairment
reduces, and the reduction can be objectively related to an event that occurred after the impairment was recognized (such as improvement
in the credit rating of the debtor), the reversal of such loss recognized previously will be recognized in the statement of income.
| (ii) | Financial liabilities |
Initial recognition and measurement
Financial liabilities are classified as financial liabilities
at fair value through profit or loss, loans and financing, or derivatives representing an effective hedging instrument, as the
case may be. The Company determines the classification of its financial assets at initial recognition.
Financial liabilities are recognized initially at fair value
and, in the case of loans and financing, are adjusted by the directly related transaction costs.
The Company’s financial liabilities include loans and
financing, derivative financial instruments, trade account payables and related parties.
Subsequent measurement
Subsequent measurement of financial liabilities depends on their
classification, which may be as follows:
Financial assets at fair value through profit or loss
These include financial liabilities usually traded before maturity,
liabilities designated at initial recognition at fair value through profit or loss and derivatives, except for those designated
as hedge instruments. Interest, inflation adjustments, exchange variations and variations resulting from valuation at fair value,
when applicable, are recognized in the statement of income when incurred.
RAÍZEN COMBUSTÍVEIS S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
Amortized cost
After initial recognition, interest-bearing borrowings and financing
are subsequently measured at amortized cost, using the effective interest method. Gains and losses are recognized in the income
statement when liabilities are derecognized, as well as during the amortization process under the effective interest method.
Derecognition (write-off)
A financial liability is derecognized when the obligation is
revoked, cancelled or expired.
| (iii) | Offset of financial instruments – net presentation |
Financial assets and liabilities are presented net in the balance
sheet if, and only if, there is a current and enforceable legal right to settle the amounts recognized, and if there is an intention
to offset them, or to realize the asset and settle the liability simultaneously.
| (iv) | Fair value of financial instruments |
The fair value of financial instruments actively traded in organized
financial markets is determined on the basis of the purchase price quoted on the market at the close of business on the balance
sheet date, without deducting transaction costs.
Fair value of financial instruments to which there is no active
market is determined using valuation techniques. These techniques may include the use of recent market transactions (at arm’s
length); reference to the current fair value of another similar instrument; a discounted cash flow analysis, or other valuation
models.
For an analysis of the fair value of financial instruments and
more details on how they are calculated, see Note 25.
| (d) | Cash and cash equivalents |
Cash and cash equivalents include cash, bank
deposits and other fully liquidity short-term investments, with original maturities of up to three months from issue, readily convertible
into a known amount of cash and with an insignificant risk of changes in their fair value.
| (e) | Trade accounts receivable |
Trade accounts receivables correspond to the amounts receivable
due from sale of goods or rendering of services in the regular course of Company’s activities. If the due date for payment
is one year or less, the accounts receivable are classified as current assets. Otherwise they are presented as non-current assets.
Trade accounts receivable are recognized initially at fair value
and subsequently measured at amortized cost, using the effective interest rate method, less provision for doubtful accounts.
RAÍZEN COMBUSTÍVEIS S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
Inventories are measured at the lower of cost and net realizable
value. The cost of inventories is based on the weighted average cost principle. The net realizable value is the estimated selling
price in the ordinary course of business less the estimated cost of completion plus any costs necessary to conclude the sale. Provisions
for obsolescence, adjustments to net realizable value items are recorded when necessary.
Prepaid expenses are accounted for at the amount effectively
paid and are recognized in income to the extent their benefits are obtained or when there is no expectation of recovery of the
amount paid.
| (h) | Investment in associates |
Investments in entities in which the Company does not detain
control, but on which it exercises significant influence, are accounted for by the equity method. Based on the equity method, investments
are recognized initially at cost, which includes transaction costs. Subsequent to initial recognition, the consolidated financial
statements include the Company’s share of the profit or loss and OCI of equity-accounted investees, until the date on which
significant influence or joint control ceases.
After the application of the equity method, the Company determines
if it is necessary to recognize loss of recoverable value added on investment. The Company determines, at each reporting date,
if there is objective evidence that the investment in the associate suffered impairment loss. If that is the case, the Company
calculates the amount of impairment as the difference among recoverable amount of the investment and the book value and recognizes
the amount in the statement of income.
When there is a loss of significant influence over an associate,
the Company immediately remeasures the investment at fair value.
Unrealized gains on transactions between the Company and its
associates are eliminated to the extent of the Company's interest. Unrealized losses are also eliminated unless the transaction
provides evidence of a loss (impairment) of the transferred asset. The accounting policies of associates have been changed when
necessary to ensure consistency with the policies adopted by the Company.
| (i) | Property, plant and equipment |
Property, plant and equipment items are measured by their historical
cost of acquisition or of construction, after deduction of accumulated depreciation and losses due to impairment, when applicable.
The cost includes expenditure that is directly attributable
to the acquisition of an asset. The costs of assets constructed by the entity itself include the material and direct labor costs,
any other costs incurred to put the asset in place and condition needed to operate as intended by the Company, and cost of borrowings
over qualified assets. The cost of borrowings related to proceeds raised for constructions in progress are capitalized until these
projects are concluded.
RAÍZEN COMBUSTÍVEIS S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
Land is not depreciated. As at March 31, 2015, depreciation
of other assets was calculated according to the useful life of each asset. The weighted average rates of annual depreciation are
presented below:
|
Useful lives |
|
Average annual rate |
|
|
|
|
Buildings and improvements |
25.00 years |
|
4.00% |
Machinery, equipment and installations |
15.48 years |
|
6.46% |
Vehicles |
16.72 years |
|
5.98% |
Furniture, fixtures and computer equipment |
8.49 years |
|
11.78% |
Others |
10.00 years |
|
10.00% |
Useful lives and residual values are reviewed, and adjusted
if appropriate, at the end of each reporting period.
As mentioned at Note 2.1.c the subsequent expenditure relating
to the removal of fuel storage tanks and to the analysis of potential soil contamination are estimated and accounted for as part
of the costs of these assets (property, plant and equipment) against the provision that will cover this expenditure (non-current
or current liabilities).
Repairs and maintenance are charged to income during the period
they are incurred. The cost of any renovation to increase the useful life of an asset is included in the carrying amount of the
asset if it is probable that future economic benefits after the renewal exceed the performance standard initially evaluated for
the existing asset and these benefits will flow to the Company. Major renovations are depreciated over the remaining useful life
of the related asset.
The gains or losses from disposals are determined as the difference
between the proceeds and the net carrying value and are recognized in Other operating income, net in the statement of income.
Goodwill is represented by the positive difference between the
amount paid and/or payable on acquisition of a business and the fair value of the acquired assets and liabilities. Goodwill on
acquisition of subsidiaries is accounted for as Intangible. In the case of determination of negative goodwill, the amount
is accounted for as a gain in profit or loss for the year of the acquisition date.
The goodwill is maintained at its cost, after deduction of any
related impairment. The goodwill is tested on an annual basis for impairment. For testing purposes the recoverable amount, goodwill
acquired in a combination of businesses is, from the acquisition date, allocated to the cash-generating units of the Company that
are expected to benefit from the synergies of the combination, irrespective of when other assets or liabilities of the target are
assigned to those cash generating units.
RAÍZEN COMBUSTÍVEIS S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
| (ii) | Intangible assets with defined useful lives |
Intangible assets with definite useful lives are measured by
the cost after deduction of accumulated amortization and of losses due to impairment loss, when applicable.
As at March 31, 2015 and 2014, annual amortization rates of
intangible assets were as follows:
|
Useful lives |
|
Average annual rate |
|
|
|
|
Software licenses |
5.00 years |
|
20.00% |
Trademarks |
10.00 years |
|
10.00% |
Contractual relationship with customers (a) |
25.00 years |
|
4.00% |
Exclusive rights of supply (b) |
8.33 years |
|
12.00% |
Others |
10.00 years |
|
10.00% |
| (a) | Contractual relationships with customers |
Contractual relationships with customers, acquired in a business
combination, are recognized at fair value on the acquisition date. Contractual relationships with customers have a finite useful
life and are measured at cost less accumulated amortization. Amortization is calculated on a straight-line basis over the expected
life of the relationship with the customer.
| (b) | Rights of exclusivity of supplier |
Refers to bonuses granted to certain customers (Note 12) and
are contingent on the terms and performance to be achieved by the customers, in particular the demand for volumes set forth in
supply agreements. To the extent that contractual conditions are met, the asset are amortized and recognized in income, in the
line item Sales returns and rebates (Note 21).
| (k) | Impairment of non-financial assets |
The Company annually assesses whether there are indicators of
impairment of an asset or a cash generating unit. If these impairment indicators are identified, the Company estimates the recoverable
amount of the asset. The recoverable amount of an asset is the higher of: (a) its fair value less costs to sell; and (b) its value
in use. The value in use is equivalent to discounted cash flows (before taxes) arising from the continuing use of the asset until
the end of its useful life.
Regardless of the existence of indicators of impairment, the
goodwill and intangible assets with indefinite useful life, when applicable, are tested for impairment at least once a year.
When the carrying amount of an asset exceeds its recoverable
value, the impairment loss is recognized in the income statement.
RAÍZEN COMBUSTÍVEIS S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
Borrowing costs related to the acquisition, construction or
production of an asset which necessarily requires a significant period of time to be concluded for the purposes of use or sale,
are capitalized as part of the cost of the corresponding asset. Borrowing costs include interest and other costs incurred by an
entity related to the borrowings. Borrowings costs that are not capitalized as part of the cost of qualified assets is recognized
in the statement of income.
Provision is recorded when: (i) the Company has a current and
present obligation as a result of the events that have already occurred; (ii) it is probable that an outflow of resources will
be necessary to settle the obligation; and (iii) the value can be reliably estimated.
The Company has a defined contribution plan and defined benefits
plan to provide a supplementary private pension for all of its employees. The Company has no legal or constructive liability for
the payment of additional contributions in the event that the fund does not hold sufficient assets to pay all the benefits due.
The Company recognizes a liability and a profit sharing expense
on the basis of a system that takes considers pre-assigned targets for its employees into account a number of factors that are
determined based on actuarial calculations that use certain assumptions to determine the cost (income) net for pension plans.
The actuarial gains and losses arising from adjustments and
changes in actuarial assumptions are recorded directly in equity as other comprehensive income when they occur.
The past costs of services are immediately recognized in income.
The Company records a liability when it is contractually liable,
or when there is a precedent that has created a constructive obligation.
Expenses of income tax and social contribution for the year
include current and deferred taxes. Income tax and social contribution are recognized in the statement of income, except to the
extent that it is related to items recognized directly in shareholders’ equity or in the comprehensive income. In this case,
the tax is also recognized in shareholders’ equity or comprehensive income.
The expenses of income tax and social contribution are calculated
based on tax laws issued or substantially issued on the date of balance sheet in the countries where Company and its subsidiaries
act and generate taxable profits. The Company periodically evaluates positions taken in income tax returns with respect to situations
in which applicable tax regulation is subject to interpretation; and it defines provision, when applicable, based on the payment
of the estimated amounts to tax authorities.
RAÍZEN COMBUSTÍVEIS S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
The taxation on net profit comprises income tax and social contribution.
Income tax is levied at the rate of 15%, plus a 10% surcharge on any income that exceeds R$ 240 in a period of 12 months, while
the social contribution is levied at the rate of 9%, on taxable income recognized on an accrual basis.
On an overall basis, the Company is thus subject to a theoretical
income tax rate of 34%.
Deferred income tax and social contribution relating to tax
losses, negative bases for social contributions and temporary differences, are presented net in the balance sheet when there is
a legal right and the intention to offset them when current taxes are calculated, and when they are generally related to the same
legal entity and the same tax authority. Therefore, deferred tax assets and liabilities relating to different entities, or in different
countries, are generally shown separately and not as a net amount. Deferred tax is calculated on the basis of rates forecast for
the time it is payable and it is reviewed annually.
Tax credits are recognized only to the extent it is likely that
a taxable basis will exist against which temporary differences may be used.
Advances or amounts subject to offsetting are reported in current
and non-current assets, in accordance with their estimated realization.
Business combinations are accounted for using the acquisition
method when control is transferred to the Company. The cost of an acquisition is the sum of the consideration paid, measured at
fair value on the acquisition date, and the amount of any non-controlling interests in the acquiree. For each business combination,
the Company recognizes any non-controlling interest in the acquiree either at fair value or at the non-controlling interest’s
proportionate share of the acquirer’s net assets. Costs directly attributable to the acquisition are expensed as incurred.
When acquiring a business, management evaluates the assets acquired
and the liabilities assumed in order to classify and allocate them pursuant to the terms of the agreement, economic circumstances
and the conditions at the acquisition date.
Goodwill is initially measured as the excess of the consideration
paid over the fair value of the net assets acquired. If the consideration is lower than the fair value of the net assets acquired,
the difference is recognized as a gain in profit or loss.
Subsequent to initial recognition, goodwill is measured at cost,
net of any accumulated impairment losses. For purposes of impairment testing, goodwill acquired in a business combination, is allocated
at the acquisition date to each of the Company’s cash generating units expected to benefit from the synergies of the business
combination, regardless of whether other assets or liabilities of the acquiree are attributed to these units.
RAÍZEN COMBUSTÍVEIS S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
The Company mitigates the risks associated with environmental
matters by way of operating procedures and controls and investments in pollution control equipment and systems. The Company recognized
a provision for environmental losses to the extent that environmental recovery of the damage caused is necessary.
| r) | Capital and shareholders’ compensation |
Capital corresponds to the value obtained in the issuance of
common and preferred shares. Additional costs directly attributable to the issuance of shares are recognized as a deduction from
equity, net of taxes effects.
Class A preferred shares, like common shares, entitle the holder
to one vote on resolutions at the Company general meetings, and to a fixed annual dividend of R$ 0.01 (one cent).
Class B and C preferred comprise shares issued by the Company
intended as reimbursement for assets, represented mainly by tax benefits, contributed by the shareholders Cosan and Shell, to the
extent they are used by the Company.
The declaration of dividends and interest on shareholders’
equity made by the Company’s Management, to the extent of the mandatory minimum dividend, is recorded in current liabilities,
as it represents a legal obligation provided for in the Company’s bylaws. Dividends that exceed the mandatory minimum dividend,
declared by management before the reporting date, not yet approved by the shareholders, is recorded as an additional dividend proposed
in shareholders’ equity.
For financial statement presentation purposes, interest on shareholders’
equity is recorded as an allocation of income directly in shareholders’ equity.
| 2.4. | Adoption of new IFRS and IFRIC Interpretations (International Financial Reporting Interpretations Committee) applicable
to the consolidated financial statements. |
New accounting pronouncements of the IASB and interpretations
of the IFRIC have been published and/or revised. The most relevant of these for the Company are the following:
IFRS 9 - Financial Instruments
- Classification and Measurement
IFRS 9 deals with the classification, measurement and recognition
of financial assets and liabilities.
IFRS 9 was issued in November 2009 and October 2010, and substitutes
parts of IAS 39 relating to the classification and measurement of financial instruments, taking effect from January 1, 2018. The
IFRS 9 requires that financial assets be classified in two categories: measured at fair value and measured at amortized cost. The
category is determined at the time of initial recognition. The classification depends on the entity's business model and the contractual
characteristics of the cash flow of the financial instruments. The standard maintains most of the requirements of IAS 39 in respect
of financial liabilities. The main change is that in cases where the fair value option is adopted for financial liabilities, the
portion of change in fair value that is due to the credit risk of the entity itself is registered in other comprehensive income
instead of in the statement of income, except when this results in an accounting mismatch. The Company believes that this standard
will not produce significant impacts on the quarterly financial information and the Company's annual financial statements because
no financial liability was identified at fair value that could be affected by the Company's credit risk.
RAÍZEN COMBUSTÍVEIS S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
IFRS 15 – Revenue from Contracts with Customers
On May 28, 2014, IFRS 15 – Revenue from Contracts with
Customers was issued, which determines a comprehensive model of revenue accounting from contracts with customers and replace the
current revenue recognition guidance, which is currently in various norms and interpretations within IFRS. The fundamental principle
of this statement is for the entity to recognize revenue reflecting the transfer of goods or services, measurement of the values
that the entity expects to be entitled in exchange for those goods or services.
Application of this new standard is mandatory for annual reporting
periods starting from January 1, 2017. Earlier application is permitted. Management believes that this standard will not produce
significant effects on the Company's consolidated financial statements.
IFRIC
21 – Levies
In May 2013, the IASB issued IFRIC 21, which provides guidance
on when an entity should recognize a liability for a levy in accordance with laws and/or regulations in its financial statements,
except for income taxes. The obligation should only be recognized when the event that triggers such obligation occurs. IFRIC 21
is effective for fiscal years ending on or after January 1, 2014. The adoption of the IFRIC 21 had no material effect on the amounts
reported.
RAÍZEN COMBUSTÍVEIS S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
| 3. | Cash and cash equivalents |
|
|
|
2015 |
|
2014 |
|
|
|
|
|
|
|
|
Cash and banks accounts |
90,828 |
|
290,804 |
Cash in foreign currency (1) |
3 |
|
198,097 |
Investments funds (2) |
142,112 |
|
77,705 |
|
142,112 |
|
77,705 |
|
232,943 |
|
566,606 |
|
|
|
|
In Brazil |
227,314 |
|
364,186 |
Abroad |
5,629 |
|
202,420 |
|
232,943 |
|
566,606 |
| (1) | The amounts pending closing
exchange are resources available for immediate redemption without material change in value and refer basically to receipts of
funds in foreign currency from customers located abroad and the related party RESA by the contract credit assignment. In this
operation the money is free for use of the Company and without expectation of material change in its value. During the year ended
March 31, 2015, the Company made the closing exchange with financial institutions of the outstanding balance of the previous year. |
| (2) | Correspond to highly liquid
investments in fixed-income instruments of top tier banks. The investments are managed by quotas with daily incomes, available
for immediate redemption without expectation of significant value change. On March 31, 2015, the average return on the funds was
99.9% of the CDI (100.9% in 2014). |
Derivatives deposits refer to margin calls
by counterparties in connection with derivatives instrument operations. On March 31, 2015 and 2014, the margin balance on derivative
transactions totals R$ 57,313 and R$ 52,779, respectively.
| 5. | Trade accounts receivable |
|
2015 |
|
2014 |
|
Accounts receivable in Brazil |
1,318,095 |
|
1,204,755 |
|
Accounts receivable abroad |
1,104 |
|
2,943 |
|
Customer financing (i) |
407,311 |
|
363,472 |
|
(-) Allowance for doubtful accounts |
(154,720 |
) |
(151,269 |
) |
|
1,571,790 |
|
1,419,901 |
|
|
|
|
|
|
Current |
1,273,536 |
|
1,190,832 |
|
|
|
|
|
|
Non-current |
298,254 |
|
229,069 |
|
| (i) | Customer financing refers
to installment payments of past-due debts, sales of properties, and financing with the primary purpose of implementing or modernizing
gas stations, using collateral, pledges and guarantees. Financial charges and repayment terms are set forth in agreements and
defined based on the financial and economic analysis of each transaction. |
RAÍZEN COMBUSTÍVEIS S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
The Company does not hold securities as guarantee of trade accounts
receivable.
The maximum exposure to credit risk as of the reporting date
is the carrying value of each class of trade account receivables mentioned above.
Set out below is a breakdown of the maturities of trade accounts
receivable:
|
|
|
2015 |
|
2014 |
|
|
|
|
|
|
|
|
Not yet due |
1,423,894 |
|
1,306,201 |
Overdue: |
|
|
|
Up to 30 days |
48,375 |
|
34,046 |
From 31 to 90 days |
28,640 |
|
22,615 |
Over 90 days |
225,601 |
|
208,308 |
|
302,616 |
|
264,969 |
|
1,726,510 |
|
1,571,170 |
The Company has guarantees, such as pledges and credit letters,
on amounts overdue and not provided.
The roll-forward of allowance for doubtful accounts is presented
below:
As of March 31, 2012 |
|
(156,892 |
) |
Provision
|
|
(28,132 |
) |
Reversal (1) |
|
28,976 |
|
As of March 31, 2013
|
|
(156,048 |
) |
Provision
|
|
(13,570 |
) |
Reversal (1) |
|
18,349 |
|
As of March 31, 2014
|
|
(151,269 |
) |
Provision
|
|
(23,695 |
) |
Reversal (1) |
|
20,244 |
|
|
|
|
|
As of March 31, 2015 |
|
(154,720 |
) |
| | |
| (1) | Reversals are accounted for when receivables are written off as losses or paid. |
RAÍZEN COMBUSTÍVEIS S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
|
2015 |
|
2014 |
|
|
|
|
|
|
Diesel |
448,194 |
|
335,168 |
|
Gasoline |
424,085 |
|
383,656 |
|
Jet fuel (Jet A-1) |
76,229 |
|
105,555 |
|
Hydrated ethanol |
102,441 |
|
103,810 |
|
Others |
31,760 |
|
14,202 |
|
Provision for obsolescence |
(3,624) |
|
(409 |
) |
|
1,079,085 |
|
941,982 |
|
The cost of the inventories recognized in Cost of Sales is in
the amount of R$ 53,853,650 in 2015 (R$ 48,005,216 in 2014 and R$ 41,199,019 in 2013).
The roll-forward of the provision for obsolescence is presented
below:
As of March 31, 2012
|
|
(1,285 |
) |
Provision
|
|
(2,529 |
) |
Reversal |
|
1,678 |
|
As of March 31, 2013
|
|
(2,136 |
) |
Provision
|
|
(1,938 |
) |
Reversal |
|
3,665 |
|
As of March 31, 2014
|
|
(409 |
) |
Provision |
|
(3,215 |
) |
As of March 31, 2015 |
|
(3,624 |
) |
RAÍZEN COMBUSTÍVEIS S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
|
2015 |
|
2014 |
|
|
|
|
|
|
ICMS Reimbursement (a) |
341,773 |
|
233,430 |
|
Recoverable ICMS (b) |
146,936 |
|
157,321 |
|
ICMS credits derived from the acquisition of property, plant and equipment |
24,430 |
|
21,241 |
|
Others |
17,031 |
|
14,475 |
|
Provision for tax losses (c) |
(45,868 |
) |
(44,704 |
) |
|
484,302 |
|
381,763 |
|
|
|
|
|
|
Current |
167,834 |
|
145,407 |
|
Non-current |
316,468 |
|
236,356 |
|
ICMS reimbursements comes from interstate oil by product distribution
activities, were the tax burden in the destination state is lower than that withheld by the supplier, as set forth Agreement 110/07.
The reimbursements are received in cash after the claims are
processed by State governments.
In order to utilize ICMS credit balances, the Company is internally
assessing certain activities, in particular the logistic review of transactions with changes in supply centers. Additionally, there
are requests for special regimes before the given state tax authorities, requests for authorization for transfer of balances between
branches in the same state and analysis of sale of credits to third parties. The balance of recoverable ICMS included in these
financial statements reflects the amount the Group expects to realize, less the allowance for losses on credits Management does
not expect to realize.
| (c) | Provision for tax losses |
Provision comprises credit balances and ICMS refunds. The Company
annually tests tax credits for impairment and verifies the need to recognize a provision.
The roll-forward of the provision for losses are presented below:
As of March 31, 2012 |
(33,000 |
) |
Provision |
(11,704 |
) |
As of March 31, 2013 and 2014
|
(44,704 |
) |
Provision |
(1,164 |
) |
As of March 31, 2015
|
(45,868 |
) |
RAÍZEN COMBUSTÍVEIS S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
|
2015 |
|
2014 |
|
|
|
|
|
|
Rent |
5,747 |
|
7,546 |
|
Various advisory |
1,979 |
|
2,055 |
|
Insurance premiums |
1,506 |
|
900 |
|
Taxes and fees |
1,204 |
|
884 |
|
Advertising and publicity |
704 |
|
19,214 |
|
Other |
728 |
|
4,291 |
|
|
11,868 |
|
34,890 |
|
|
|
|
|
|
Current |
4,632 |
|
24,963 |
|
Non-current |
7,236 |
|
9,927 |
|
| (a) | Summary of balances and transactions with related
parties |
|
2015 |
|
2014 |
|
|
|
|
|
|
Assets |
|
|
|
|
Raízen Energia S.A. and its subsidiaries (1) |
1,600,380 |
|
56,777 |
|
Shell Brazil Holding B.V. (2) |
519,289 |
|
473,998 |
|
Shell Aviation Limited (3) |
97,682 |
|
111,676 |
|
Shell Brasil Petróleo Ltda. (4) |
39,755 |
|
20,630 |
|
Cosan S.A. Indústria e Comércio (5) |
15,976 |
|
13,059 |
|
Other |
25,311 |
|
16,861 |
|
Total assets |
2,298,393
|
|
693,001 |
|
Current assets
|
334,847 |
|
257,813 |
|
|
|
|
|
|
Non-current assets |
1,963,546 |
|
435,188 |
|
|
|
|
|
|
|
2015 |
|
2014 |
|
|
|
|
|
|
Liabilities |
|
|
|
|
Raízen Cayman Limited (1) |
1,644,502 |
|
536,668 |
|
Shell Brazil Holding B.V. (2) |
204,132 |
|
419,895 |
|
Shell
Western Supply and Trading (6) |
109,318 |
|
- |
|
Shell Brasil Petróleo Ltda. (4) |
53,384 |
|
30,675 |
|
Cosan S.A. Indústria e Comércio (5) |
154 |
|
30,312 |
|
Other |
6,273 |
|
4,967 |
|
Total liabilities |
2,017,763
|
|
1,022,517 |
|
Current liabilities
|
803,459 |
|
174,596 |
|
|
|
|
|
|
Non-current liabilities |
1,214,304 |
|
847,921 |
|
|
|
|
|
|
|
|
|
|
|
|
RAÍZEN COMBUSTÍVEIS S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
| (1) | Raízen Energia S.A. and its subsidiaries (“RESA”) |
The term RESA refers to financial and commercial transactions
with Raízen Energia S.A., mainly, with its subsidiaries, Raízen Tarumã Ltda., Raízen Caarapó
Açúcar e Álcool Ltda., Raízen Paraguaçu Açúcar e Álcool Ltda., Raízen
Araraquara Açúcar e Álcool Ltda., Raízen Centroeste Açúcar e Álcool and Raízen
Cayman Ltd.
The amount recorded as current assets
corresponds mainly to: (i) funds transferred by the subsidiaries of RCSA to RESA in the amount of R$ 131,739 (R$ 53,160 in 2014);
(ii) interest on export prepayment contracts (“PPE”) , with final maturity in 2019, 2021
and 2022, in the amount of R$ 2,423, net of recovery funding costs; (iii) commercial operations of
sale of diesel in the amount of R$ 2,459 (R$ 3,441 in 2014); and (iv) issuance of credit notes in the amount of R$ 1,004
(R$ 176 in 2014).
The amount recorded as non-current assets refers to PPE
contracts.
| · | Between April 7 and June 16, 2014, RCSA, through its subsidiary Raízen
Fuels Finance Ltd. ("Raízen Fuels"), granted PPEs to RESA in the amount of R$ 1,104,779, net of cost recovery
capture, equivalent to US $ 350 million, to be paid on March 29, 2019, subject to interest of 1.55% per annum plus quarterly Libor
rate, resulting in an average effective interest rate of 1.80% per annum; |
| · | On October 15, 2014, a PPE contract was issued from Raízen
Fuels to RESA, in the amount R$ 225,135, net of cost recovery capture, equivalent to € 66 million, to be paid on October 15,
2021. The contract is subject to interest of 3.09% per annum; and |
| · | On January 20, 2015, a new PPE contract was issued from Raízen
Fuels to RESA, in the amount of R$ 132,841, net of cost recovery capture, equivalent to € 40 million, to be paid on January
20, 2022 . The contract is subject to interest of 2.21% per annum plus quarterly Euro + Libor (“Euribor”) rate, resulting
in an effective average interest rate of 2.27% per annum. |
The amount recorded as current liabilities refers mainly
to: (i) funds received by the management of financial resources of RESA by the RCSA, in the amount of R$ 619,406 (zero in 2014);
(ii) commercial operations purchase and sale of products in the amount of R$ 9,478 (R$ 23,721 in 2014); (iii) interest on PPEs
contracts in the amount of R$ 814 (R$ 430 in 2014); and (iv) various provisions and apportionment of shared costs in the amount
of R$ 721 (R$ 16,918 in 2014).
The amount recorded as non-current liabilities refers
to PPEs contracts.
| · | On March 28, 2011, RCSA borrowed a PPE with Raízen Cayman Ltd.
("Raízen Cayman"), a subsidiary of RESA, in the amount of US $ 219 million, maturing on December 7, 2015. On March
30, 2015, an amendment was signed that changed the maturity date to April 27, 2020 and renegotiated interest to quarterly Libor
plus interest of 1.50% per annum, resulting in an effective average interest rate of 1.77 % per annum in addition to the exchange
rate of the US dollar. On March 31, 2015, the principal amount is R$ 694,929 (R$ 495,597 in 2014), spent liquid uptake; and |
RAÍZEN COMBUSTÍVEIS S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
| · | In addition, on April 8, 2014, RCSA raised a new PPE with Raízen
Cayman in the amount of US$ 100 million, with final maturity on March, 2018 and 2019. The PPE is subject to the US dollar currency
exchange and quarterly Libor plus annual interest of 1.55%, resulting in an effective interest rate of 1.80% per annum. On March
31, 2015, the principal amount is R$ 319,154, net of funding expenditure. |
| (2) | Shell Brazil Holding B.V. (“SBHBV”) |
The balance recorded as current assets corresponds to
reimbursements receivable from shareholders, as set forth in the framework agreement, comprises the following: (i) reimbursement
of provision for judicial claims in the amount of R$ 12,533 (R$ 13,103 in 2014) (Note 18); (ii) reimbursement of expenditure on
bank guarantees in connection with lawsuits originated before the RCSA formation, in the amount of R$ 14,663 (R$ 15,473 in 20134);
(iii) reimbursement of expenditure relating to Security, Health and Environment (“SSMA”) of R$ 2,859 (R$ 3,207 in 2014);
(iv) reimbursement of court deposits of R$ 14,772 (R$ 11,822 in 2014); (v) reimbursement of expenditure on contingencies of R$
6,174 (R$ 4,347 in 2014); (vi) reimbursement of expenditure on attorneys’ fees and court costs of R$ 5,501 (R$ 7,162 in 2014);
and (vii) other reimbursable expenditure of R$ 4,138 (R$ 655 in 2014).
The amount recorded as non-current assets refers mainly
to the provisions for judicial claims contributed by Shell Brazil Holding B.V. to the organization of RCSA, which should be fully
reimbursed to the Company, when effectively paid, in the amount of R$ 458,648 (R$ 418,229 in 2014) (Note 18).
The balance recorded as current liabilities refers mainly
to: (i) provision for losses relating to deposits made due to legal contingencies in the amount of R$ 864 (R$ 676 in 2014) (Nota
18); e, (ii) other reimbursable expenditure in the amount of R$ 6,030 (R$ 9,582 in 2014). In July, 2014, the Company repaid the
amount of tax benefits to be reimbursed to SBHBV, in the amount of R$ 95,235.
The balance recorded as non-current liabilities refers
mainly to: (i) provision for losses relating to court deposits made due to legal contingencies of R$ 17,946 (R$ 28,390 in 2014)
(Note 18); and (ii) reimbursement of court deposits relating to the period before the formation of RCSA that were not part of the
net assets contributed, and court deposits of shareholders responsibility, paid after the formation of RCSA and to be reimbursed
to SBHBV, in the amount of R$ 30,490 (R$ 41,873 in 2014) (Note 18).
Preferred shares payable – SBHBV
In addition, the preferred shares payable which are
recorded as non-current liabilities refer to the amount of tax benefits to be reimbursed to SBHBV, when effectively utilized
by RCSA, in the amount of R$ 148,802 (R$ 244,139 on March 31, 2014), determined by the balances of tax losses and negative basis
of social contribution (“NOL”) and tax benefit on goodwill amortization. The method of payment will be by distributing
RCSA unique dividends to holders of Class C preferred shares (Note 21.a). Currently, only the SBHBV holds such class of share.
| (3) | Shell Aviation Limited |
The amount of R$ 97,682 (R$ 111,676 in 2014) recorded as current
assets refers mainly to the sale of fuel in Brazil by RCSA for use in the aircraft of foreign airlines comprising the customer
portfolio of Shell Aviation.
RAÍZEN COMBUSTÍVEIS S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
| (4) | Shell Brasil Petróleo Ltda. (“SBPL”) |
The amount recorded as current assets corresponds mainly
to: (i) liabilities contributed in the formation of RCSA by SBPL, which should be fully reimbursed to the Company, when effectively
paid, arising from provisions for judicial claims in the amount of R$ 3,366 (R$ 2,299 in 2014) (Note 18); (ii) expenditure on commercial
operations in the amount of R$ 2,297 (R$ 4,348 in 2014); and (iii) others expenditure in the amount of R$ 905 (R$ 536 in 2014).
The amount recorded as non-current assets refers to liabilities
contributed by SBPL to RCSA which should be fully reimbursed to the Company, when effectively paid, arising from provisions for
judicial claims in the amount of R$ 33,187 (R$ 13,447 in 2014) (Note 18).
The amount recorded as current liabilities
corresponds mainly to: (i) tax credits in the amount of R$ 6,270 (R$ 6,270 in 2014), which will be reimbursed to SBPL when effectively
used by the Company; (ii) return of commission on sales of lubricants of R$ 42,858 (R$ 16,187 in 2014) which was received in advance;
(iii) services provided by employees of SBPL of R$ 1,106 (R$ 727 in 2014); and (iv) other commercial operations of R$ 166 (R$ 257
in 2014).
The amount of R$ 2,984 (R$ 7,234 in 2014), recorded as non-current
liabilities refers to court deposits existing before RCSA, which were not an integral part of the net assets transferred of
the fuel distribution business and court deposits incumbent upon the shareholders paid after the RCSA organization, which should
be reimbursed to SBPL when effectively realized (Note 18).
| (5) | Cosan S.A. Indústria e Comércio S.A. |
The amount recorded as current assets refers mainly to:
(i) reimbursement of expenditure relating to Security, Health and Environment (“SSMA”) in the amount of R$ 12,042 (R$
9,479 in 2014); (ii) reimbursement of expenditure on payroll in the amount of R$ 2,096 in 2014; (iii) reimbursement of expenditure
on judicial claims in the amount of R$ 947 in 2014); and (iv) issuance of debit notes in the amount of R$ 531 (R$ 537 in 2014).
The amount of R$ 154 (R$ 59 in 2014), recorded as
current liabilities corresponds to a reimbursement of various expenditure made through debt notes.
Preferred shares payable – Cosan
The amount recorded in non-current liabilities
referred to the amount of tax benefits to be paid to Cosan, when effectively utilized by RCSA, whose nature and form of payment
was identical to the preferred shares due to SBHBV. During the year ended March 31, 2015, the RCSA made the payment through the
distribution of unique dividends to holders of Class B preferred shares, in the amount of R$ 30,253, only Cosan is the holder of
this class of share.
| (6) | Shell Western Supply and Trading |
On March 31, 2015, the amount payable of
R$ 109,318 recorded as current liabilities corresponds to purchase of diesel by the subsidiary Blueway Trading Importadora
e Exportadora S.A..
RAÍZEN COMBUSTÍVEIS S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
| (b) | Transactions with related parties |
|
2015 |
|
2014 |
|
2013 |
|
Product sales |
|
|
|
|
|
|
Shell Aviation Limited |
1,227,690 |
|
1,226,670 |
|
1,425,289 |
|
Raízen Energia S.A. and its subsidiaries |
417,109 |
|
413,646 |
|
358,531 |
|
Grupo Agricopel |
395,371 |
|
382,670 |
|
- |
|
Other |
51,154 |
|
- |
|
- |
|
|
2,091,324 |
|
2,022,986 |
|
1,783,820 |
|
|
|
|
|
|
|
|
Purchase of goods |
|
|
|
|
|
|
Raízen Energia S.A. and its subsidiaries |
(1,138,591 |
) |
(1,534,355 |
) |
(562,765 |
) |
Shell Western |
(109,318 |
) |
- |
|
- |
|
Grupo Agricopel |
(32,911 |
) |
(19,657 |
) |
(216,227 |
) |
|
(1,280,820 |
) |
(1,554,012 |
) |
(778,992 |
) |
|
|
|
|
|
|
|
Finance income and costs (1) |
|
|
|
|
|
|
Raízen Energia S.A. and its subsidiaries |
(3,008 |
) |
(33,362) |
|
7,834 |
|
|
(3,008 |
) |
(33,362) |
|
7,834 |
|
|
|
|
|
|
|
|
Revenue of services (2) |
|
|
|
|
|
|
Shell Brasil Petróleo Ltda. (i) |
2,285 |
|
27,092 |
|
28,934 |
|
Shell Aviation Limited |
- |
|
195 |
|
- |
|
|
2,285 |
|
27,287 |
|
28,934 |
|
|
|
|
|
|
|
|
Expenses of services (3) |
|
|
|
|
|
|
Raízen Energia S.A and its subsidiaries (i) |
(125,767 |
) |
(116,568 |
) |
(104,195 |
) |
Shell Brasil Petróleo (ii) |
(3,859 |
) |
(8,923 |
) |
(11,973 |
) |
Shell International Petroleum (ii) |
(3,743 |
) |
(3,229 |
) |
- |
|
Shell Aviation Limited (ii) |
(222 |
) |
- |
|
(15,162 |
) |
Others |
(1,011 |
) |
- |
|
- |
|
|
(134,602 |
) |
(128,720 |
) |
(131,330 |
) |
|
|
|
|
|
|
|
|
675,179 |
|
334,179 |
|
910,266 |
|
| (1) | Net financial expenses correspond to interest and exchange variation of
PPEs raised and granted to RESA, as well as income earned in the funds management agreement between the companies. |
| (2) | Refer to (i) the commission on sales of lubricants to Shell and (ii) expenditure
on the sharing of corporate, management and operating costs retrieved from related parties. |
| (3) | Refers to (i) expenditure on the sharing of corporate, management and operating
costs with RESA and (ii) expenditure on technical support, billing and collection process of maintaining, commissions on the sale
of JET and secondees with Shell. |
RAÍZEN COMBUSTÍVEIS S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
| (c) | Officers and members of the board of directors |
The total remuneration and benefits
paid to management key personnel, including the directors, officers, and members of the executive committee, is as follows:
| |
2015 | |
2014 | |
2013 |
Salaries | |
| 42,226 | | |
| 37,743 | | |
| 34,858 | |
| |
| | | |
| | | |
| | |
Bonuses and other variable compensation | |
| 31,488 | | |
| 31,803 | | |
| 27,635 | |
| |
| | | |
| | | |
| | |
Total compensation | |
| 73,714 | | |
| 69,546 | | |
| 62,493 | |
The Company shares its corporate, managerial
and operating structure and costs with its related party Raízen Energia S.A. (“RESA”). Key management personnel
are mostly comprised of RESA’s employees and such costs are charged to the Company by debit note. During the year ended March
31, 2015, the Company reimbursed (“RESA”) for such services for R$ 55,555 (R$ 54,868 and R$ 41,706 in 2014 and 2013,
respectively).
RAÍZEN COMBUSTÍVEIS S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Reais, unless otherwise indicated)
|
|
|
|
|
|
|
|
|
|
|
Investments |
|
Equity accounting |
|
Country |
|
Business |
|
Quantity of shares/quotas of investee |
|
Quantity of shares/quotas of investing company |
|
Percentage of interest |
|
2015 |
|
2014 |
|
2015 |
|
2014 |
|
2013 and 2012 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carrying value |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sistema de Tecnologia de Pagamento (“STP”) (1) |
Brazil |
|
Payment system |
|
22,297,600 |
|
2,229,760 |
|
10% |
|
74,541 |
|
71,275 |
|
13,696 |
|
10,080 |
|
- |
Subtotal
|
|
|
|
|
|
|
|
|
|
|
74,541 |
|
71,275 |
|
13,696 |
|
10,080 |
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill on investment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sistema de Tecnologia de Pagamento |
|
|
|
|
|
|
|
|
|
|
184,436 |
|
184,436 |
|
- |
|
- |
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total investment
|
|
|
|
|
|
|
|
|
|
|
258,977 |
|
255,711 |
|
13,696 |
|
10,080 |
|
- |
| (1) | On March 31, 2015, includes fair value of intangible assets, net of deferred tax, in the amount of R$ 47,284 in 2015 (R$ 53,605
in 2014). In the year ended March 31, 2015, the amortization of the fair value of intangible assets, net of deferred tax effect,
classified as equity income in the amount of R$ 6,320 (zero in 2014). |
| (b) | Roll-forward of investments in associate |
The roll-forward of investments in associates is as follows:
Balance as of March 31, 2013 and 2012 | |
|
| |
| | |
Additions to investment | |
| 11,959 | |
Fair value on intangible assets | |
| 81,219 | |
Deferred taxes on fair value of intangible assets | |
| (27,614 | ) |
Goodwill on investment | |
| 184,436 | |
Equity accounting | |
| 10,080 | |
Dividends receivable | |
| (4,369 | ) |
Balance as of March 31, 2014 | |
| 255,711 | |
| |
| | |
Equity accounting | |
| 13,696 | |
Dividends receivable | |
| (10,430 | ) |
Balance on March 31, 2015 | |
| 258,977 | |
RAÍZEN COMBUSTÍVEIS S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Reais,
unless otherwise indicated)
| (c) | Summarized financial information in subsidiaries
and associates |
| (i) | The summary financial information of the Company’s
subsidiaries are as follows: |
| |
Petróleo Sabbá S.A. (1) | |
Raízen Fuels Finance Limited | |
Raízen Mime Combustíveis S.A. (1) | |
Blueway Trading Imp. e Exportação Ltda. | |
Sampras
Participações Ltda. | |
Sabor
Raiz Alimentação Ltda. | |
Saturno
Investimentos Imobiliários Ltda. |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Assets | |
| 796,808 | | |
| 1,469,411 | | |
| 345,574 | | |
| 135,911 | | |
| 285,049 | | |
| 21,708 | | |
| 188,559 | |
Liabilities | |
| (348,691 | ) | |
| (1,480,810 | ) | |
| (119,947 | ) | |
| (132,972 | ) | |
| (10,979 | ) | |
| (736 | ) | |
| (25,260 | ) |
Shareholder’s equity
| |
| 448,117 | | |
| (11,399 | ) | |
| 225,627 | | |
| 2,939 | | |
| 274,070 | | |
| 20,972 | | |
| 163,299 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Net Sales | |
| 4,811,198 | | |
| — | | |
| 2,647,242 | | |
| 278,572 | | |
| — | | |
| — | | |
| 7,750 | |
Net income (loss) | |
| 99,878 | | |
| (14,808 | ) | |
| 76,310 | | |
| 1,031 | | |
| 14,124 | | |
| (28 | ) | |
| 2,253 | |
Cash Flow | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Net cash from operating activities | |
| 74,425 | | |
| — | | |
| 67,411 | | |
| — | | |
| — | | |
| — | | |
| — | |
Net cash used in investing activities | |
| (62,241 | ) | |
| — | | |
| (11,537 | ) | |
| — | | |
| — | | |
| — | | |
| — | |
Net cash provided by financing activities | |
| (4,051 | ) | |
| — | | |
| (31,227 | ) | |
| — | | |
| — | | |
| — | | |
| — | |
Net increase in cash and cash equivalents | |
| 8,133 | | |
| — | | |
| 24,647 | | |
| — | | |
| — | | |
| — | | |
| — | |
Cash and equivalents at beginning of year | |
| 57,797 | | |
| — | | |
| 62,000 | | |
| — | | |
| — | | |
| — | | |
| — | |
Cash and equivalents at end of year | |
| 65,930 | | |
| — | | |
| 86,647 | | |
| — | | |
| — | | |
| — | | |
| — | |
| |
Petróleo Sabbá S.A. (1) | |
Raízen Fuels Finance Limited | |
Raízen Mime Combustíveis S.A. (1) | |
Blueway Trading Imp. e Exportação Ltda. | |
Sampras
Participações Ltda. |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Assets | |
| 657,183 | | |
| 808,495 | | |
| 280,793 | | |
| 2,116 | | |
| 260,080 | |
Liabilities | |
| (285,191 | ) | |
| (800,771 | ) | |
| (128,801 | ) | |
| (208 | ) | |
| — | |
Shareholders’ equity
| |
| 371,992 | | |
| 7,724 | | |
| 151,992 | | |
| 1,908 | | |
| 260,080 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Net Sales | |
| 4,116,801 | | |
| — | | |
| 2,076,727 | | |
| — | | |
| — | |
Net profit (loss) | |
| 53,412 | | |
| (3,670 | ) | |
| 55,652 | | |
| (153 | ) | |
| 10,080 | |
Cash Flow | |
| | | |
| | | |
| | | |
| | | |
| | |
Net cash from operating activities | |
| 86,696 | | |
| — | | |
| 58,734 | | |
| — | | |
| — | |
Net cash used in investing activities | |
| (66,596 | ) | |
| — | | |
| (6,354 | ) | |
| — | | |
| — | |
Net cash provided by financing activities | |
| 24,945 | | |
| — | | |
| (2,705 | ) | |
| — | | |
| — | |
Net increase in cash and cash equivalents | |
| 45,045 | | |
| — | | |
| 49,675 | | |
| — | | |
| — | |
Cash and equivalents at beginning of year | |
| 12,752 | | |
| — | | |
| 12,325 | | |
| — | | |
| — | |
Cash and equivalents at end of year | |
| 57,797 | | |
| — | | |
| 62,000 | | |
| — | | |
| — | |
| (ii) | The summary of financial information of the Company’s
associate (STP) are as follows: |
| |
2015 | |
2014 |
| |
| | | |
| | |
Assets | |
| 1,197,732 | | |
| 960,034 | |
Liabilities | |
| (925,164 | ) | |
| (783,330 | ) |
Shareholder’s Equity
| |
| 272,568 | | |
| 176,704 | |
| |
| | | |
| | |
Net sales | |
| 671,749 | | |
| 299,855 | |
Net income | |
| 200,164 | | |
| 100,801 | |
The definition of significant influence in STP was given by
the Company's right to elect key people in the Management, as well as the right to decide on strategic and operational issues relevant
in STP.
RAÍZEN COMBUSTÍVEIS S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Reais, unless otherwise indicated)
| (d) | Acquisition of shares in associates |
| (i) | Acquisition of Serviços e Tecnologia de Pagamentos
S.A. (“STP”) |
On October 3, 2013, the Company
concluded the acquisition of a 10% of common shares of STP for the amount of R$ 250,000, paid
in cash. The STP and Raízen Combustíveis are developing a new fuel charge system to be implemented in RCSA fuel stations.
The allocation of purchase price was concluded by Management
according to the appraisal report made by an independent specialized company at the base date of March 31, 2014, based on the fair
value of the purchased assets and assumed liabilities, as below:
Line items | |
Total |
Intangible assets (a) | |
| 81,219 | |
Other net assets | |
| 11,959 | |
Deferred taxes | |
| (27,614 | ) |
| |
| 65,564 | |
Consideration transferred, net of cash received | |
| 250,000 | |
Goodwill | |
| 184,436 | |
The fair value of the assets acquired and liabilities assumed
is categorized within level 3.
The intangible assets will be amortized according to the useful
lives as described below:
Intangible | |
Useful lives | |
Total |
Exclusive agreements | |
60 months | |
| 1,457 | |
Customer relationships | |
147 months | |
| 53,715 | |
Trademarks | |
183 months | |
| 26,047 | |
| |
| |
| 81,219 | |
RAÍZEN COMBUSTÍVEIS S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Reais, unless otherwise indicated)
| 11. | Property, plant and equipment |
| |
Lands | |
Buildings and improvements | |
Machinery, equipment and installations | |
Vehicles | |
Furniture, fixtures and computer equipment | |
Works in progress | |
Others | |
Total |
Cost | |
| |
| |
| |
| |
| |
| |
| |
|
As of March 31, 2012 | |
| 846,966 | | |
| 241,996 | | |
| 1,205,692 | | |
| 85,112 | | |
| 71,054 | | |
| 278,564 | | |
| — | | |
| 2,729,384 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Additions | |
| — | | |
| — | | |
| 21,281 | | |
| — | | |
| — | | |
| 297,085 | | |
| — | | |
| 318,366 | |
Disposals | |
| (50,212 | ) | |
| (15,151 | ) | |
| (226,438 | ) | |
| (7,819 | ) | |
| (10,045 | ) | |
| — | | |
| — | | |
| (309,665 | ) |
Business combination | |
| (3,193 | ) | |
| 792 | | |
| (84,923 | ) | |
| — | | |
| 423 | | |
| 3,495 | | |
| — | | |
| (83,406 | ) |
Transfers | |
| 11,460 | | |
| 16,068 | | |
| 248,583 | | |
| 14,459 | | |
| 9,988 | | |
| (320,414 | ) | |
| 13,313 | | |
| (6,543 | ) |
Reversal of amounts contributed | |
| (10,295 | ) | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| (10,295 | ) |
As of March 31, 2013 | |
| 794,726 | | |
| 243,705 | | |
| 1,164,195 | | |
| 91,752 | | |
| 71,420 | | |
| 258,730 | | |
| 13,313 | | |
| 2,637,841 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Additions | |
| — | | |
| — | | |
| 681 | | |
| — | | |
| — | | |
| 304,216 | | |
| — | | |
| 304,897 | |
Disposals | |
| (103,475 | ) | |
| (18,045 | ) | |
| (105,420 | ) | |
| (2,910 | ) | |
| (7,942 | ) | |
| — | | |
| — | | |
| (237,792 | ) |
Transfers between cost and depreciation | |
| — | | |
| 25 | | |
| 665 | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 690 | |
Transfers (1) | |
| 3,756 | | |
| 16,040 | | |
| 180,762 | | |
| 21,227 | | |
| 306 | | |
| (255,148 | ) | |
| — | | |
| (33,057 | ) |
As of March 31, 2014 | |
| 695,007 | | |
| 241,725 | | |
| 1,240,883 | | |
| 110,069 | | |
| 63,784 | | |
| 307,798 | | |
| 13,313 | | |
| 2,672,579 | |
Additions
| |
| | | |
| | | |
| 8,347 | | |
| | | |
| 65 | | |
| 236,209 | | |
| — | | |
| 244,621 | |
Disposals | |
| (49,389 | ) | |
| (15,273 | ) | |
| (127,445 | ) | |
| (7,150 | ) | |
| (13,321 | ) | |
| — | | |
| — | | |
| (212,578 | ) |
Business combination (2) | |
| 62 | | |
| 478 | | |
| 27,120 | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 27,660 | |
Reversal of amounts contributed (3) | |
| (4,574 | ) | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| (4,574 | ) |
Transfers between cost and depreciation | |
| — | | |
| — | | |
| (18,306 | ) | |
| — | | |
| — | | |
| — | | |
| — | | |
| (18,306 | ) |
Transfers (1) | |
| 7,313 | | |
| 17,625 | | |
| 195,647 | | |
| 4,943 | | |
| 7,306 | | |
| (232,272 | ) | |
| — | | |
| (438 | ) |
As of March 31, 2015 | |
| 648,419 | | |
| 244,555 | | |
| 1,325,246 | | |
| 107,862 | | |
| 57,834 | | |
| 311,735 | | |
| 13,313 | | |
| 2,708,964 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Depreciation | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
As of March 31, 2012 | |
| — | | |
| (108,349 | ) | |
| (653,865 | ) | |
| (48,455 | ) | |
| (46,326 | ) | |
| — | | |
| — | | |
| (856,995 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Depreciation expense | |
| — | | |
| (5,780 | ) | |
| (89,450 | ) | |
| (6,124 | ) | |
| (7,371 | ) | |
| — | | |
| (607 | ) | |
| (109,332 | ) |
Disposals | |
| — | | |
| 8,484 | | |
| 133,628 | | |
| 7,776 | | |
| 8,137 | | |
| — | | |
| — | | |
| 158,025 | |
Transfers | |
| — | | |
| — | | |
| (2,745 | ) | |
| — | | |
| — | | |
| — | | |
| 2,202 | | |
| (543 | ) |
As of March 31, 2013 | |
| — | | |
| (105,645 | ) | |
| (612,432 | ) | |
| (46,803 | ) | |
| (45,560 | ) | |
| — | | |
| 1,595 | | |
| (808,845 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Depreciation expense | |
| — | | |
| (10,746 | ) | |
| (115,093 | ) | |
| (7,426 | ) | |
| (6,740 | ) | |
| — | | |
| (1,820 | ) | |
| (141,825 | ) |
Disposals | |
| — | | |
| 11,489 | | |
| 73,160 | | |
| 2,832 | | |
| 6,632 | | |
| — | | |
| — | | |
| 94,113 | |
Transfers between cost and depreciation | |
| — | | |
| (25 | ) | |
| (665 | ) | |
| — | | |
| — | | |
| — | | |
| — | | |
| (690 | ) |
Transfers (1) | |
| — | | |
| — | | |
| — | | |
| | | |
| 110 | | |
| — | | |
| — | | |
| 110 | |
As of March 31, 2014 | |
| — | | |
| (104,927 | ) | |
| (655,030 | ) | |
| (51,397 | ) | |
| (45,558 | ) | |
| — | | |
| (225 | ) | |
| (857,137 | ) |
Depreciation expenses
| |
| — | | |
| (6,874 | ) | |
| (94,995 | ) | |
| (7,788 | ) | |
| (5,071 | ) | |
| — | | |
| (1,820 | ) | |
| (116,548 | ) |
Disposals | |
| — | | |
| 10,388 | | |
| 99,073 | | |
| 7,084 | | |
| 11,110 | | |
| — | | |
| — | | |
| 127,655 | |
Transfers between cost and depreciation | |
| — | | |
| — | | |
| 18,306 | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 18,306 | |
Transfers (1) | |
| — | | |
| (287 | ) | |
| 1,431 | | |
| (3 | ) | |
| (563 | ) | |
| — | | |
| — | | |
| 578 | |
As of March 31, 2015 | |
| — | | |
| (101,700 | ) | |
| (631,215 | ) | |
| (52,104 | ) | |
| (40,082 | ) | |
| — | | |
| (2,045 | ) | |
| (827,146 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Net carrying value | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
As of March 31, 2015 | |
| 648,419 | | |
| 142,855 | | |
| 694,031 | | |
| 55,758 | | |
| 17,752 | | |
| 311,735 | | |
| 11,268 | | |
| 1,881,818 | |
As of March 31, 2014
| |
| 695,007 | | |
| 136,798 | | |
| 585,853 | | |
| 58,672 | | |
| 18,226 | | |
| 307,798 | | |
| 13,088 | | |
| 1,815,442 | |
As of March 31, 2013
| |
| 794,726 | | |
| 138,060 | | |
| 551,763 | | |
| 44,949 | | |
| 25,860 | | |
| 258,730 | | |
| 14,908 | | |
| 1,828,996 | |
(1) On March 31, 2015,
included transfer for software costs as intangible assets in the amount of R$ 3,302 (R$ 32,947 in 2014), and reclassification of
prepaid expenses to property, plant and equipment costs in the amount of R$ 3,442; (2) Acquisition of Latina (Note 28.i); and (3)
Reversal of the amounts contributed relating to business combination with CCL.
RAÍZEN COMBUSTÍVEIS S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Reais, unless otherwise indicated)
Constructions in progress
As of March 31, 2015, the balance of construction in progress
in the amount of R$ 311,735 (R$ 307,798 in 2014) comprised: (i) construction of new fuel distribution terminals and upgrades of
existing ones; (ii) capital expenditure in Shell branded gas stations such as replacing fuel pumps, steps for compliance with environmental
standards, brand and signage upgrades, refurbishment of convenience stores and new fixtures and fittings; (iii) capital expenditure
at large customers (B2B) such as the construction of fuel pumps and equipment; and (iv) capital expenditure at airports where the
Company has fuel distribution terminals such as, fuel distribution vehicles, fire hoses and other infrastructure at new airport
terminals and the upgrade of infrastructure at existing airport terminals.
Capitalization of borrowing costs
During the year ended March 2015, the Company capitalized borrowing
costs in the amount of R$ 9,685 (R$ 21,441 and R$ 21,132 in 2014 and 2013, respectively). The weighted average interest rate utilized
to determine the capitalized interest was 4.14% in 2015 (9.19% and 8.58% in 2014 and 2013, respectively).
RAÍZEN COMBUSTÍVEIS S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
12.
Intangibles
| |
Software licenses | |
Trademarks | |
Contractual relationship with customers | |
Rights of exclusivity of supplier | |
Goodwill in business combinations | |
Others | |
Total |
Cost | |
| |
| |
| |
| |
| |
| |
|
As of March 31, 2012 | |
| 115,448 | | |
| 589,572 | | |
| 311,463 | | |
| 973,713 | | |
| 283,145 | | |
| 130,761 | | |
| 2,404,102 | |
Additions
| |
| — | | |
| — | | |
| — | | |
| 385,178 | | |
| — | | |
| — | | |
| 385,178 | |
Business combination | |
| — | | |
| 4,823 | | |
| 55,325 | | |
| 3,197 | | |
| 61,922 | | |
| — | | |
| 125,267 | |
Disposals | |
| (3,664 | ) | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| (3,664 | ) |
Transfers between cost and amortization | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| (97,510 | ) | |
| (97,510 | ) |
Measurement period adjustment | |
| — | | |
| — | | |
| — | | |
| — | | |
| 21,702 | | |
| | | |
| 21,702 | |
Transfers | |
| 7,086 | | |
| — | | |
| — | | |
| (26,355 | ) | |
| (890 | ) | |
| | | |
| (20,159 | ) |
As of March 31, 2013 | |
| 118,870 | | |
| 594,395 | | |
| 366,788 | | |
| 1,335,733 | | |
| 365,879 | | |
| 33,251 | | |
| 2,814,916 | |
Additions
| |
| 5,593 | | |
| — | | |
| — | | |
| 389,581 | | |
| — | | |
| — | | |
| 395,174 | |
Disposals | |
| (25,689 | ) | |
| (64,533 | ) | |
| (47,386 | ) | |
| — | | |
| — | | |
| (4,332 | ) | |
| (141,940 | ) |
Transfers between cost and amortization | |
| 37,742 | | |
| — | | |
| — | | |
| — | | |
| — | | |
| (21,917 | ) | |
| 15,825 | |
Transfers (1) | |
| 32,947 | | |
| — | | |
| — | | |
| (15,521 | ) | |
| | | |
| — | | |
| 17,426 | |
As of March 31, 2014 | |
| 169,463 | | |
| 529,862 | | |
| 319,402 | | |
| 1,709,793 | | |
| 365,879 | | |
| 7,002 | | |
| 3,101,401 | |
Additions
| |
| 4,682 | | |
| — | | |
| — | | |
| 507,135 | | |
| — | | |
| — | | |
| 511,817 | |
Business combination (2) | |
| — | | |
| 7,301 | | |
| 43,432 | | |
| 3,073 | | |
| 70,432 | | |
| — | | |
| 124,238 | |
Reversal of contributed amounts (3) | |
| — | | |
| — | | |
| — | | |
| — | | |
| 3,274 | | |
| — | | |
| 3,274 | |
Disposals | |
| (1,907 | ) | |
| (4,822 | ) | |
| — | | |
| (13,074 | ) | |
| — | | |
| — | | |
| (19,803 | ) |
Transfers (1) | |
| 3,880 | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 3,880 | |
As
of March 31, 2015 | |
| 176,118 | | |
| 532,341 | | |
| 362,834 | | |
| 2,206,927 | | |
| 439,585 | | |
| 7,002 | | |
| 3,724,807 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Amortization | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
As of March 31, 2012 | |
| (91,072 | ) | |
| (68,946 | ) | |
| (53,087 | ) | |
| (302,979 | ) | |
| — | | |
| (122,195 | ) | |
| (638,279 | ) |
Amortization during the year
| |
| (6,966 | ) | |
| (96,220 | ) | |
| (17,785 | ) | |
| (188,380 | ) | |
| — | | |
| (2,390 | ) | |
| (311,741 | ) |
Disposals | |
| 3,568 | | |
| (4,823 | ) | |
| — | | |
| — | | |
| — | | |
| — | | |
| (1,255 | ) |
Transfers between cost and amortization | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 97,510 | | |
| 97,510 | |
As of March 31, 2013 | |
| (94,470 | ) | |
| (169,989 | ) | |
| (70,872 | ) | |
| (491,359 | ) | |
| — | | |
| (27,075 | ) | |
| (853,765 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Amortization during the year | |
| (11,615 | ) | |
| (52,504 | ) | |
| (15,152 | ) | |
| (218,980 | ) | |
| | | |
| (1,591 | ) | |
| (299,842 | ) |
Disposals | |
| 25,689 | | |
| 64,533 | | |
| 47,386 | | |
| | | |
| | | |
| 4,332 | | |
| 141,940 | |
Transfers between cost and amortization | |
| (37,742 | ) | |
| — | | |
| — | | |
| — | | |
| — | | |
| 21,917 | | |
| (15,825 | ) |
As of March 31, 2014 | |
| (118,138 | ) | |
| (157,960 | ) | |
| (38,638 | ) | |
| (710,339 | ) | |
| | | |
| (2,417 | ) | |
| (1,027,492 | ) |
Amortization during the year
| |
| (14,242 | ) | |
| (56,676 | ) | |
| (18,752 | ) | |
| (266,043 | ) | |
| — | | |
| (779 | ) | |
| (356,492 | ) |
Disposals | |
| 1,889 | | |
| 4,824 | | |
| — | | |
| 13,074 | | |
| — | | |
| — | | |
| 19,787 | |
Transfers (1) | |
| (578 | ) | |
| — | | |
| — | | |
| 85 | | |
| — | | |
| — | | |
| (498 | ) |
As of March 31, 2015 | |
| (131,072 | ) | |
| (209,812 | ) | |
| (57,390 | ) | |
| (963,223 | ) | |
| — | | |
| (3,196 | ) | |
| (1,364,695 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Net carrying value | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
As of March 31, 2015 | |
| 45,046 | | |
| 322,529 | | |
| 305,444 | | |
| 1,243,704 | | |
| 439,585 | | |
| 3,806 | | |
| 2,360,112 | |
As of March 31, 2014
| |
| 51,325 | | |
| 371,902 | | |
| 280,764 | | |
| 999,454 | | |
| 365,879 | | |
| 4,585 | | |
| 2,073,909 | |
As of March 31, 2013
| |
| 24,400 | | |
| 424,406 | | |
| 295,916 | | |
| 844,374 | | |
| 365,879 | | |
| 6,176 | | |
| 1,961,151 | |
| | |
| (1) | On March 31, 2015, included
Transfer from property, plant and equipment in the amount of R$ 3,302 (R$ 32,947 in 2014) and transfer of providing exclusive
rights cost in the amount of R$ 80 ((R$ 15,521) in 2014) for accounts receivable; (2) Acquisition of Latina (Note 28.i);
and (3)Reversal of contributed amounts that refers to business combination with CCL. |
RAÍZEN COMBUSTÍVEIS S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
Goodwill
As of March 31, 2015 and 2014, the balance
of goodwill is as follows:
Description | |
2015 | |
2014 |
| |
| | | |
| | |
In the business combination with “CCL” (i) | |
| 348,103 | | |
| 344,829 | |
In the acquisition of Latina (Note 28.i) | |
| 70,432 | | |
| — | |
Others | |
| 21,050 | | |
| 21,050 | |
| |
| 439,585 | | |
| 365,879 | |
| (i) | Refers to Cosan's contribution to the Company of net assets of its fuel distribution business on June 1, 2011, in exchange
for 589,448,062 shares of the Company. This contribution was treated as a business combination, as the Company issued shares in
exchange for those assets. |
Analysis of impairment of cash generating units containing
goodwill
As described in Note 2.3 k, the Company reviews property, plant
and equipment for impairment at least once a year.
The Company tests goodwill for
impairment at least annually (Note 2.3 k).
Long-lived non-financial assets that are not subject to amortization
are reviewed whenever there are indicators that their carrying amount might be impaired.
The Company uses the value-in-use method to determine the recoverable
amount, which is based on projected discounted cash flows expected from cash-generating units determined by the Company based on
the budgets that take into consideration the assumptions related to the cash-generating units, whose business management of the
Company takes into consideration an integrated distribution network, comprising one single cash-generating unit using available
market information and past performance.
Discounted cash flows have been prepared over a period of five
years and taken to perpetuity without considering the actual growth rate. Cash flows arising from the continuing use of the underlying
assets are adjusted by specific risks and use a pre-tax discount rate.
The discount rate corresponds to a pre-tax rate estimated at
8.5%.
The key assumptions used were: prices based on market expectation,
estimated growth rates for the business line and extrapolations of growth rates based on the growth of the Gross Domestic Product
(PIB). All future cash flow was discounted using a rate that reflects specific risks related to the material assets in each cash-generating
unit.
On the basis of the annual tests, no impairment loss was recognized
in the years ended March 31, 2015 or 2014. Determination of the recoverability of assets depends on certain key assumptions, as
described above. These assumptions are influenced by market and technological and economic conditions existing at the time of the
test, and so it is impossible to ascertain whether impairment losses will occur in the future or, if they do, whether they will
be material.
RAÍZEN COMBUSTÍVEIS S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Reais, unless otherwise indicated)
| 13. | Trade accounts payable |
| |
2015 | |
2014 |
| |
| | | |
| | |
Oil suppliers | |
| 208,246 | | |
| 170,619 | |
Ethanol suppliers | |
| 450,439 | | |
| 401,226 | |
Other and services suppliers | |
| 102,610 | | |
| 204,379 | |
| |
| | | |
| | |
| |
| 761,295 | | |
| 776,224 | |
| |
Maturity | |
Currency | |
Weighted
average interest rate (%
p.a.) (1) | |
2015 | |
2014 |
| |
| | | |
| |
| | | |
| | | |
| | |
Classification of debts by currency | |
| | | |
| |
| | | |
| | | |
| | |
Denominated in Brazilian Reais | |
| | | |
| |
| | | |
| 12,139 | | |
| 14,904 | |
Denominated in Dollars | |
| | | |
| |
| | | |
| 1,495,816 | | |
| 801,456 | |
| |
| | | |
| |
| | | |
| 1,507,955 | | |
| 816,360 | |
| |
| | | |
| |
| | | |
| | | |
| | |
Debt arrangements (2): | |
| | | |
| |
| | | |
| | | |
| | |
BNDES | |
| Jan/2021 | | |
URTJLP (*) | |
| 7.6% (7.2% in 2014) | | |
| 12,093 | | |
| 14,550 | |
Senior notes due 2014 | |
| — | | |
Dollar (US$) | |
| — | | |
| — | | |
| 801,456 | |
Term Loan Agreement | |
| Mar/2019 | | |
US$ + Libor | |
| 1.7 | % | |
| 1,127,023 | | |
| — | |
Schuldschein | |
| Oct/2021 | | |
EUR | |
| 2.9 | % | |
| 230,413 | | |
| — | |
Schuldschein | |
| Jan/2022 | | |
EUR + Libor | |
| 2.1 | % | |
| 138,380 | | |
| — | |
Others | |
| — | | |
Reais (R$) | |
| — | | |
| 46 | | |
| 354 | |
| |
| | | |
| |
| | | |
| 1,507,955 | | |
| 816,360 | |
| |
| | | |
| |
| | | |
| | | |
| | |
Transaction costs: | |
| | | |
| |
| | | |
| | | |
| | |
Term Loan Agreement | |
| | | |
| |
| | | |
| (7,517 | ) | |
| — | |
Schuldschein | |
| | | |
| |
| | | |
| (7,488 | ) | |
| — | |
Senior Notes Due 2014 | |
| | | |
| |
| | | |
| — | | |
| (1.152 | ) |
| |
| | | |
| |
| | | |
| (15,005 | ) | |
| (1,152 | ) |
| |
| | | |
| |
| | | |
| | | |
| | |
| |
| | | |
| |
| | | |
| 1,492,950 | | |
| 815,208 | |
| |
| | | |
| |
| | | |
| | | |
| | |
Current | |
| | | |
| |
| | | |
| 8,685 | | |
| 803,106 | |
Non-current | |
| | | |
| |
| | | |
| 1,484,265 | | |
| 12,102 | |
(*)Reference Unit to adjusted Long-Term Interest Rate (“URTJLP”)
(1) The effective annual interest rate corresponds to the contractual
rate plus any directly attributable transaction costs.
(2) Loans and financing are generally guaranteed by the Company.
In some cases, those loans and financing have additional guarantees from the Company’s subsidiaries or shareholders.
RAÍZEN COMBUSTÍVEIS S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Reais, unless otherwise indicated)
The maturities of amounts payable in the
long-term debt are as follows:
| |
2015 | |
2014 |
| | | |
| | | |
| | |
| 13 to 24 months | | |
| 2,710 | | |
| 2,756 | |
| 25 to 36 months | | |
| 558,130 | | |
| 2,710 | |
| 37 to 48 months | | |
| 560,891 | | |
| 2,710 | |
| 49 to 60 months | | |
| 1,167 | | |
| 2,481 | |
| 61 to 72 months | | |
| 278 | | |
| 1,167 | |
| 73 to 84 months | | |
| 361,089 | | |
| 278 | |
| | | |
| 1,484,265 | | |
| 12,102 | |
BNDES
In December 2013, the Company entered into a loan related to
the BNDES program to support the sugar and alcohol sector in the amount of R$ 15,000, with fixed interest rate of 2.05% per annum
and indexed to the URTJLP, weighted average interest rate of 7.55% per annum, maturing in January 2021.
Term Loan Agreement
On April 8, 2014, the Company entered into a syndicated loan,
with several banking institutions, in the amount of US$ 350 million. The contract is subject to foreign variation of the US dollar
plus annual fixed interest rate of 1.4% and quarterly Libor, resulting in an average effective interest rate of 1.65% per annum,
final maturity in March 2018 and 2019.
Senior Notes Due 2014
On May 9, 2014, the Company fully repaid this debt through its
subsidiary Raízen Fuels Finance Limited, in the amount of US$ 350 million of principal plus US$ 16,084 million of interest,
equivalent to the total amount of R$ 819,514 in that date.
Schuldschein
In October 2014, the Company entered a financing through its
subsidiary Raízen Fuels Finance Limited in the amount of € 66 million, with a fixed interest rate of 2.88% per annum,
maturity on October 15, 2021.
Additionally, in January 2015, the Company entered a new financing
through its subsidiary Raízen Fuels Finance Limited in the amount of € 40 million, with a fixed interest rate of 2%
per annum and quarterly Euribor interest, resulting in an average effective interest rate of 2.06% per annum, maturity on January
20, 2022.
Covenants
The Company and its subsidiaries are not subject to financial
covenants. The Company and its subsidiaries are subject only to certain restrictive covenants in some of its loans and financing,
such as cross-default and negative pledge. The Company is in compliance with all its covenants as of March 31, 2015.
RAÍZEN COMBUSTÍVEIS S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Reais, unless otherwise indicated)
Fair value
As of March 31, 2015 and 2014, the consolidated carrying values
and fair values of loans and financing are as follows:
| |
Carrying value | |
Fair Value |
| |
2015 | |
2014 | |
2015 | |
2014 |
| |
| |
| |
| |
|
Senior notes Due 2014 | |
| — | | |
| 801,456 | | |
| — | | |
| 825,476 | |
Other loans and financing | |
| 1,492,950 | | |
| 13,752 | | |
| 1,492,950 | | |
| 13,752 | |
| |
| 1,492,950 | | |
| 815,208 | | |
| 1,492,950 | | |
| 839,228 | |
The fair value of the Senior Notes Due 2014 is based on prices
quoted on the reporting date (Note 25.g).
The fair value of other loans and financing is close to their
amortized cost.
| |
2015 | |
2014 |
| |
| | | |
| | |
ICMS | |
| 75,699 | | |
| 59,481 | |
Municipal Tax on Services (“ISS”) | |
| 3,614 | | |
| 3,888 | |
Installment payments – Refis IV | |
| 6,560 | | |
| 5,302 | |
Others | |
| 5,290 | | |
| 11,491 | |
| |
| 91,163 | | |
| 80,162 | |
| |
| | | |
| | |
Current | |
| 85,182 | | |
| 75,300 | |
Non-current | |
| 5,981 | | |
| 4,862 | |
RAÍZEN COMBUSTÍVEIS S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Reais, unless otherwise indicated)
| 16. | Income and social contribution taxes |
| (a) | Effective income tax and social contribution rate
reconciliation |
| |
2015 | |
2014 | |
2013 |
| |
| | | |
| | | |
| | |
Income before taxes | |
| 1,737,097 | | |
| 1,552,353 | | |
| 1,273,492 | |
Nominal tax rate (34%) | |
| (590,613 | ) | |
| (527,800 | ) | |
| (432,987 | ) |
Reconciling items:
| |
| | | |
| | | |
| | |
Interest on own capital | |
| 64,615 | | |
| 62,220 | | |
| 61,025 | |
Deferred tax liability reversal in corporate restructuring (Note 28.ii) | |
| 24,502 | | |
| — | | |
| — | |
Equity interest in income of associates | |
| 4,657 | | |
| 3,427 | | |
| — | |
Tax incentive | |
| 2,333 | | |
| 1,996 | | |
| 2,129 | |
Non-deductible donations and contributions expenses | |
| (3,612 | ) | |
| (2,948 | ) | |
| (3,444 | ) |
Others | |
| 1,594 | | |
| (1,663 | ) | |
| 1,343 | |
Income tax and social contribution benefit (expenses) ( current and deferred tax)
| |
| (496,524 | ) | |
| (464,768 | ) | |
| (371,934 | ) |
Effective rate | |
| 28.6 | % | |
| 29.9 | % | |
| 29.2 | % |
| (b) | Deferred income tax and social contribution - assets
and liabilities |
| |
| |
| |
2015 | |
2014 |
| |
| Base | | |
| IRPJ 25% | | |
| CSLL 9% | | |
| Total | | |
| Total | |
Assets (liabilities) | |
| | | |
| | | |
| | | |
| | | |
| | |
Tax losses: | |
| | | |
| | | |
| | | |
| | | |
| | |
Tax loss carryforwards (corporate income tax) | |
| 324,644 | | |
| 81,161 | | |
| — | | |
| 81,161 | | |
| 147,543 | |
Social contribution tax losses | |
| 396,156 | | |
| — | | |
| 35,654 | | |
| 35,654 | | |
| 59,754 | |
Temporary differences: | |
| | | |
| | | |
| | | |
| | | |
| | |
Foreign exchange variance | |
| 33 | | |
| 8 | | |
| 3 | | |
| 11 | | |
| 131,585 | |
Provision for rights of exclusivity of supply | |
| 428,724 | | |
| 107,181 | | |
| 38,585 | | |
| 145,766 | | |
| 112,868 | |
Other effects | |
| 362,406 | | |
| 90,601 | | |
| 33,723 | | |
| 124,324 | | |
| 96,360 | |
Others – Business combination | |
| 3,915 | | |
| 979 | | |
| 352 | | |
| 1,331 | | |
| 1,342 | |
Total deferred tax – assets (Note 16.d) | |
| | | |
| 279,930 | | |
| 108,317 | | |
| 388,247 | | |
| 549,452 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Tax goodwill amortized | |
| (846,006 | ) | |
| (211,502 | ) | |
| (76,140 | ) | |
| (287,642 | ) | |
| (257,391 | ) |
Fair value of property, plant and equipment – Business combination | |
| (420,138 | ) | |
| (105,035 | ) | |
| (37,812 | ) | |
| (142,847 | ) | |
| (175,606 | ) |
Fair value of intangible assets – Business combination | |
| (308,574 | ) | |
| (77,144 | ) | |
| (27,771 | ) | |
| (104,915 | ) | |
| (95,458 | ) |
Derivatives | |
| (71,958 | ) | |
| (17,990 | ) | |
| (6,475 | ) | |
| (24,465 | ) | |
| (3,925 | ) |
Total deferred tax – liabilities | |
| | | |
| (411,671 | ) | |
| (148,198 | ) | |
| (559,869 | ) | |
| (532,380 | ) |
Total
deferred taxes | |
| | | |
| (131,741 | ) | |
| (39,881 | ) | |
| (171,622 | ) | |
| 17,072 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Deferred assets | |
| | | |
| | | |
| | | |
| 26,864 | | |
| 34,084 | |
Deferred liabilities | |
| | | |
| | | |
| | | |
| (198,486 | ) | |
| (17,012 | ) |
Total deferred
taxes | |
| | | |
| | | |
| | | |
| (171,622 | ) | |
| 17,072 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
| (c) | Roll-forward of deferred tax is as follows: |
| |
2015 | |
2014 | |
2013 |
| |
| | | |
| | | |
| | |
Balance at beginning of year | |
| 17,072 | | |
| 105,923 | | |
| 190,649 | |
Expenses in statement of income from continuing operations | |
| (173,284 | ) | |
| (88,941 | ) | |
| (87,160 | ) |
Deferred taxes on comprehensive income | |
| 216 | | |
| 90 | | |
| — | |
Taxes credited directly to equity (1) | |
| — | | |
| — | | |
| 31,900 | |
Taxes debited directly to equity (2) | |
| — | | |
| — | | |
| (15,783 | ) |
Deferred taxes on business combination (Latina and Mime) | |
| (16,926 | ) | |
| — | | |
| (23,581 | ) |
Others | |
| 1,300 | | |
| — | | |
| 9,898 | |
Balance at the end of the fiscal year
| |
| (171,622 | ) | |
| 17,072 | | |
| 105,923 | |
| (1) | Refers to the fair value adjustment of the business combination (CCL). |
| (2) | Refers to the adjustment of balance of final loss contributed by Shell to the Company’s organization. |
RAÍZEN COMBUSTÍVEIS S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
| (d) | Estimated time of realization |
Deferred tax arising from temporary differences will
be realized as they are settled or realized. Tax loss carryforwards do not expire; however, the use of prior-year accumulated losses
is limited to 30% of annual taxable income. The period of the settlement or realization of such differences would not be reliably
estimated and is tied to several factors that are not under the control of the Management.
On March 31, 2015, the Company has the following expected
realization of the deferred tax assets:
| 2016 | | |
| 209,524 | |
| 2017 | | |
| 14,003 | |
| 2018 | | |
| 14,003 | |
| 2019 | | |
| 14,003 | |
| 2020 | | |
| 51,683 | |
| After 2020 | | |
| 85,031 | |
| Total | | |
| 388,247 | |
On March 31, 2015, the Blueway Trading
Import & Export Ltd. had balances of tax losses and negative basis of social contribution in the amount of R$ 11,441 (R$ 654
and R$ 499 on March 31, 2014 and 2013, respectively), for which there was no recognition of deferred tax assets, given its expected
recovery is not considered probable.
| |
2015 | |
2014 |
| |
| | | |
| | |
Sales Commission (a) | |
| 253,760 | | |
| 294,910 | |
Loyalty - cards (b) | |
| 52,333 | | |
| 54,333 | |
Others | |
| 3,590 | | |
| 6,510 | |
| |
| 309,683 | | |
| 355,753 | |
| |
| | | |
| | |
Current | |
| 46,740 | | |
| 49,660 | |
Non-current | |
| 262,943 | | |
| 306,093 | |
| (a) | Refers to the receipt in advance in the amount of R$
411,502 from Shell, relating to the sales commissions of lubricants at Shell’s gas stations, over a period of ten years,
as set forth in the lubricant sales representation agreement. |
| (b) | Advances received in the amount of R$ 60,000 in connection
with the establishment of business partnerships for the exploration of the customer base over a period of 30 years. |
The amortization of the advanced revenue is recorded in the
income of the year under Other operating income, net (Note 24).
RAÍZEN COMBUSTÍVEIS S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
| 18. | Provision for tax, civil and labor claims |
During the formation of the RCSA, it was agreed that Shell should
reimburse the Company for the settlement of lawsuits in progress prior to the formation, when effectively settled by the courts.
On March 31, 2015 and 2014, the balances of claims to be reimbursed and those which are non-reimbursable are as follows:
| |
2015 | |
2014 |
| Description | | |
| Non-reimbursable claims | | |
| Reimbursable claims (a) | | |
| Total | | |
| Non-reimbursable claims | | |
| Reimbursable claims (a) | | |
| Total | |
| Tax | | |
| 12,978 | | |
| 248,523 | | |
| 261,501 | | |
| 1,965 | | |
| 216,017 | | |
| 217,982 | |
| Civil | | |
| 2,879 | | |
| 189,195 | | |
| 192,074 | | |
| 2,628 | | |
| 143,175 | | |
| 145,803 | |
| Labor | | |
| 5,098 | | |
| 23,918 | | |
| 29,016 | | |
| 4,532 | | |
| 37,281 | | |
| 41,813 | |
| Environmental | | |
| 1,861 | | |
| 46,099 | | |
| 47,960 | | |
| 952 | | |
| 50,605 | | |
| 51,557 | |
| | | |
| 22,816 | | |
| 507,735 | | |
| 530,551 | | |
| 10,077 | | |
| 447,078 | | |
| 457,155 | |
(a) See Note 9.
Also, during the formation of RCSA, it was agreed that the Company
should reimburse Shell the amount of judicial deposits made before its organization, when effectively received. On March 31, 2015
and 2014, the balance of refundable and non-refundable deposits is as follows:
| |
2015 | |
2014 |
| | | |
| Non-refundable court deposits | | |
| Refundable court deposits (a) | | |
| Total | | |
| Non-refundable court deposits | | |
| Refundable court deposits (a) | | |
| Total | |
| Tax | | |
| 14,815 | | |
| 28,050 | | |
| 42,865 | | |
| 2,830 | | |
| 41,677 | | |
| 44,507 | |
| Civil | | |
| 3,521 | | |
| 13,974 | | |
| 17,495 | | |
| 2,329 | | |
| 17,527 | | |
| 19,856 | |
| Labor | | |
| 378 | | |
| 10,260 | | |
| 10,638 | | |
| 59 | | |
| 18,969 | | |
| 19,028 | |
| | | |
| 18,714 | | |
| 52,284 | | |
| 70,998 | | |
| 5,218 | | |
| 78,173 | | |
| 83,391 | |
| (i) | Non-reimbursable claims |
| |
Tax | |
Civil | |
Labor | |
Environmental | |
Total |
As of March 31, 2014 | |
| 1,965 | | |
| 2,628 | | |
| 4,532 | | |
| 952 | | |
| 10,077 | |
Provisioned during the year (1)
| |
| 1,000 | | |
| 819 | | |
| 2,750 | | |
| 1,454 | | |
| 6,023 | |
Write-offs/reversals (1) | |
| (140 | ) | |
| (966 | ) | |
| (2,075 | ) | |
| (206 | ) | |
| (3,387 | ) |
Payments | |
| (2,765 | ) | |
| (38 | ) | |
| (867 | ) | |
| (354 | ) | |
| (4,024 | ) |
Business combinations (Note 28.i) | |
| 10,649 | | |
| — | | |
| — | | |
| — | | |
| 10,649 | |
Interest (2) | |
| 2,269 | | |
| 436 | | |
| 758 | | |
| 15 | | |
| 3,478 | |
As of March 31, 2015 | |
| 12,978 | | |
| 2,879 | | |
| 5,098 | | |
| 1,861 | | |
| 22,816 | |
| (1) | Recorded in the consolidated statement of income under Taxes on sales and general and administrative expenses. |
| (2) | Recorded in the consolidated statement of income under Financial income. |
RAÍZEN COMBUSTÍVEIS S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
| (ii) | Reimbursable claims (1) |
| |
| Tax | | |
| Civil | | |
| Labor | | |
| Environmental | | |
| Total | |
As of March 31, 2014 | |
| 216,017 | | |
| 143,175 | | |
| 37,281 | | |
| 50,605 | | |
| 447,078 | |
Provisioned during the year
| |
| 168,659 | | |
| 40,299 | | |
| 7,582 | | |
| 15,413 | | |
| 231,953 | |
Write-offs/reversals(2) | |
| (85,137 | ) | |
| (3,467 | ) | |
| (21,763 | ) | |
| (12,419 | ) | |
| (122,786 | ) |
Payments | |
| (75,550 | ) | |
| (17,476 | ) | |
| (3,086 | ) | |
| (8,916 | ) | |
| (105,028 | ) |
Interest | |
| 24,534 | | |
| 26,664 | | |
| 3,904 | | |
| 1,416 | | |
| 56,518 | |
As of March 31, 2015 | |
| 248,523 | | |
| 189,195 | | |
| 23,918 | | |
| 46,099 | | |
| 507,735 | |
| (1) | The changes do not affect the consolidated statement of income. |
| (2) | Substantially includes write-off relating to government incentive to ethanol producers. |
| |
Tax | |
Civil | |
Labor | |
Environmental | |
Total |
| |
| |
| |
| |
| |
|
As of March 31, 2014 | |
| 217,982 | | |
| 145,803 | | |
| 41,813 | | |
| 51,557 | | |
| 457,155 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Provisioned during the year
| |
| 169,659 | | |
| 41,118 | | |
| 10,332 | | |
| 16,867 | | |
| 237,976 | |
Write-offs/reversals | |
| (85,277 | ) | |
| (4,433 | ) | |
| (23,838 | ) | |
| (12,625 | ) | |
| (126,173 | ) |
Payments | |
| (78,315 | ) | |
| (17,514 | ) | |
| (3,953 | ) | |
| (9,270 | ) | |
| (109,052 | ) |
Business combination (Note 28.i) | |
| 10,649 | | |
| — | | |
| — | | |
| — | | |
| 10,649 | |
Interest | |
| 26,803 | | |
| 27,100 | | |
| 4,662 | | |
| 1,431 | | |
| 59,996 | |
As of March 31, 2015 | |
| 261,501 | | |
| 192,074 | | |
| 29,016 | | |
| 47,960 | | |
| 530,551 | |
Contingencies for probable
losses
(a)
Tax
The main tax claims as of March 31, 2015
and 2014, are as follows:
| |
Non- Reimbursable claims | | |
Reimbursable claims | | |
Total | |
Description | |
| 2015 | | |
| 2014 | | |
| 2015 | | |
| 2014 | | |
| 2015 | | |
| 2014 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
IPI (i) | |
| — | | |
| — | | |
| 80,781 | | |
| 900 | | |
| 80,781 | | |
| 900 | |
IRPJ and CSLL (ii) | |
| — | | |
| — | | |
| 62,746 | | |
| — | | |
| 62,746 | | |
| — | |
PIS and COFINS (iii) | |
| — | | |
| — | | |
| 33,394 | | |
| 1,939 | | |
| 33,394 | | |
| 1,939 | |
Attorney fees (iv) | |
| 1,751 | | |
| 1,167 | | |
| 35,437 | | |
| 53,466 | | |
| 37,188 | | |
| 54,633 | |
ICMS (v) | |
| 11,227 | | |
| 798 | | |
| 33,325 | | |
| 158,142 | | |
| 44,552 | | |
| 158,940 | |
CIDE and Others (vi) | |
| — | | |
| — | | |
| 2,840 | | |
| 1,570 | | |
| 2,840 | | |
| 1,570 | |
| |
| 12,978 | | |
| 1,965 | | |
| 248,523 | | |
| 216,017 | | |
| 261,501 | | |
| 217,982 | |
RAÍZEN COMBUSTÍVEIS S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
The amount accrued as IPI tax credits is represented
by: (a) tax assessment received relating to the imported goods; and (b) claims of compensation resulting from the inputs used in
immune outputs.
These are assessment notices relating to various
compensation (Perdcomp), referring to the IPI tax credits used to offset income tax and social contribution. These compensations
are no longer approved under the issuance of the tax assessment, which failed to recognize the credits under the grounds that,
from January 2008 to September 2010, (i) the RCSA would have ceased to highlight and collect IPI due to the 8% rate in certain
transactions classified in the Tabela de Incidência do Imposto sobre Produtos Industrializados - TIPI, and (ii) the
RCSA would have ceased to reverse IPI tax credits for inputs used in the manufacturing of certain products classified under TIPI
, considering that the output operations of such products are not taxed. The controversy items firstly from a disagreement as to
the classification of products such as oil products, and secondly from a negative of the authorities to recognize the right to
maintenance of the IPI credits in operations with immune or untaxed outputs.
The amount accrued as PIS and COFINS credits is
represented by: (a) contribution the years 1997-1999 regarding the company incorporation; and (b) compensation related to the IPI
tax credits used to offset the PIS and COFINS arising from inputs used in immune outputs.
The Company hires law firms to defend its civil, tax and labor
claims. Some agreements set forth the attorneys’ compensation based on a percentage of the amounts related to favorable outcomes.
The Company accrues the amounts payable to law firms with respect to claims whose likelihood of loss is assessed as possible or
remote. The amount currently accrued fully refers to claims whose financial liability is Shell responsibility since they are originated
in a period prior to the Company’s organization and, therefore, are reimbursable.
The amount accrued as ICMS credits consists of: (a) tax assessments
received which, despite the defense submitted at the administrative and judicial level, the Company’s legal counsel believes
that the loss is probable, and the Company will be required to make the payment; and (b) credits recoverable and financial charges
on matters for which Management has an interpretation different from the tax authorities.
| (vi) | Contribution for Intervention in the Economic Domain
- CIDE |
The Company accrued the CIDE on services in exploration and
production of oil and natural gas made before the formation of Raízen, on March 31, 2015 in the amount of R$ 171,129. The
amounts due were deposited in court in the same amount. The Company will be fully reimbursed by Shell in the case of effectively
collect the CIDE tax authorities. Therefore, both balances are presented net in these financial statements.
RAÍZEN COMBUSTÍVEIS S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
The main claims are related to contractual, real estate and
credit recovery matters, involving contractual breaches, ownership of Company’s properties and recovery of amounts not paid
by customers.
The Company is also party to various labor claims filed by former
employees and employees of outsourced service providers who require the payment of overtime, night shift premium and hazardous
duty premium, job readmittance, deductions from payroll such as confederation dues, union dues, etc.
The main environmental claims are related to environmental remediation
activities to be performed in gas stations, distribution units, airports and customer distribution centers, including removal of
the contaminated material, treatment of the area, laboratory analyses and post-remediation monitoring.
Contingencies classified as a risk of possible loss
The main tax judicial claims whose likelihood of unfavorable
outcome is rated as possible, and as a consequence, no provision for lawsuits was recorded in the financial statements, as follows:
|
Non-Reimbursable claims |
|
Reimbursable claims |
|
Total |
Description |
2015 |
|
2014 |
|
2015 |
|
2014 |
|
2015 |
|
2014 |
ICMS (i)
|
102,134 |
|
31,847 |
|
1,875,303 |
|
1,825,228 |
|
1,977,437
|
|
1,857,075
|
PIS and COFINS (ii) |
36 |
|
35 |
|
1,086,105 |
|
1,060,438 |
|
1,086,141 |
|
1,060,473 |
IPI (ii) |
- |
|
- |
|
50,741 |
|
130,816 |
|
50,741 |
|
130,816 |
IRPJ and CSLL (ii) |
- |
|
- |
|
397,481 |
|
306,444 |
|
397,481 |
|
306,444 |
Others |
582 |
|
543 |
|
8,397 |
|
13,034 |
|
8,979 |
|
13,577 |
|
102,752 |
|
32,425 |
|
3,418,027 |
|
3,335,960 |
|
3,520,779
|
|
3,368,385
|
If the Company recognizes a reimbursable claim due to a change
in the likelihood of loss, or for any other reason, they will also account for the same amount as a receivable from shareholders;
therefore, there will not any impact on the consolidated statement of income. If a non-reimbursable claim is recognized, the
Company will account for an expense in the consolidated statement of income.
The main contingences are described below:
Refers to various tax assessments notices in connection with
the following matters: (i) non-reversal of ICMS credits, (ii) non-reversal in full of ICMS-ST credits, (iii) payment of ICMS-ST
on interstate sales to industrial customers and (iv) non-performance of accessory obligations.
| (ii) | PIS, COFINS, IPI, IRPJ and CSLL |
The main contingences refers to tax assessment notices in connection
with the offset of credits arising from the semi-annual PIS system as well as offsets of federal taxes (IRPJ, CSLL, PIS, COFINS
and IRRF) not approved by the Receita Federal.
RAÍZEN COMBUSTÍVEIS S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
On March 31, 2015 and
2014, the main civil and labor claims whose likelihood of loss is possible and therefore no provision for Judicial Demands was
recognized in the financial statements , are highlighted below:
|
Non-reimbursable claims |
|
Reimbursable claims |
Description |
2015 |
|
2014 |
|
2015 |
|
2014 |
Civil
|
60,739 |
|
11,459 |
|
696,563 |
|
595,134 |
Labor |
655 |
|
1,565 |
|
31,133 |
|
54,767 |
|
61,394 |
|
13,024 |
|
727,696 |
|
649,901 |
Purchases
The Company enters into agreements with third parties, which
are related to the purchase of fuel to secure a portion of its future sales.
The amounts of the purchase commitments of ethanol, diesel,
gasoline, jet fuel and biodiesel, in cubic meters, on the date of the financial statements are set forth below:
2016
|
|
9,983,568 |
2017 |
|
911,623 |
Fiscal year ended in March 31, 2015
|
|
10,895,191 |
Fiscal year ended in March 31, 2014
|
|
10,617,401 |
The Company also entered into agreements for services of railway,
highway and waterway transportation in order to transport fuel between supply centers and distributors. The amount to be paid by
the Company is set based on the price defined in the agreement.
Crop purchase commitments, in metric meters, on March 31, 2015
are set forth below:
2016
|
|
470,191 |
Fiscal year ended in March 31, 2015
|
|
470,191 |
Fiscal year ended in March 31, 2014
|
|
1,792,365 |
RAÍZEN COMBUSTÍVEIS S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
Storage services
The Company enters into agreements with third parties for fuel
storage service in certain regions due to logistics strategies.
Crop storage services commitments, in cubic meters, on the reporting
date are set out below:
2016
|
|
1,396,928 |
2017 |
|
957,650 |
2018 |
|
284,526 |
2019 |
|
248,400 |
After 2020 |
|
366,300 |
Fiscal year ended in March 31, 2015
|
|
3,253,804 |
Fiscal year ended in March 31, 2014
|
|
2,205,679 |
This non-financial information has not
been audited by independent auditors.
(a)
Capital stock
On December 26, 2013, the shareholder Cosan transferred to Cosan
Investimentos e Participações S.A. (“CIP”) all 1,651,584,242 ordinary shares that held, with usufruct
reserve to Cosan until October 1, 2021, on all political rights, right to receive interest on own capital and the right to receive
dividends linked to such shares, decided by the Company as at April 30, 2014, based on profits until March 31, 2014.
On March 31, 2015 and 2014, the Company’s capital is R$
3,343,720. The line item appears deducted from the balance of redeemable preferred shares in the amount of R$ 148,802 (R$ 274,392
in 2014), totaling R$ 3,194,918 (R$ 3,069,328 in 2014).
The capital stock on March 31, 2015, totally subscribed and
paid is represented as follows:
| |
| |
| |
Shareholders (shares in units) |
| |
Shell | |
CIP | |
Cosan | |
Total in 2015 | |
Total in 2014 |
| |
| |
| |
| |
| |
|
Common shares | |
| 1,651,584,242 | | |
| 1,651,584,242 | | |
| — | | |
| 3,303,168,484 | | |
| 3,303,168,484 | |
Preferred shares Class A | |
| 1 | | |
| — | | |
| — | | |
| 1 | | |
| 1 | |
Preferred shares Class B | |
| — | | |
| — | | |
| 93,648,276 | | |
| 93,648,276 | | |
| 93,648,276 | |
Preferred shares Class C | |
| 262,784,501 | | |
| — | | |
| — | | |
| 262,784,501 | | |
| 262,884,501 | |
Preferred shares Class D (1) | |
| 100,000 | | |
| — | | |
| — | | |
| 100,000 | | |
| — | |
Total
| |
| 1,914,468,744 | | |
| 1,651,584,242 | | |
| 93,648,276 | | |
| 3,659,701,262 | | |
| 3,659,701,262 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
| (1) | On January 21, 2015, the Extraordinary General Meeting approved the conversion of 100,000 preferred
shares Class C into preferred shares Class D, all owned by Shell. |
RAÍZEN COMBUSTÍVEIS S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
Redeemable preferred shares
The tax benefits arising from the use of NOL generated by Shell
before the RCSA’s organization, as well as the tax benefits arising from the tax amortization of goodwill relating to Cosan’s
contribution, and tax benefits arising from the utilization of PIS and COFINS contributed by Fix Investimentos Ltda. (investor
company of the controlled Raízen Mime Combustíveis S.A.) are to be reimbursed to shareholders to the extent that
the Company uses them to reduce the amount of taxes payable.
In
order to compensate shareholders through the payment of dividends of the tax benefits used by the Company during each calendar
year, the Company issued Class A preferred shares to Fix, Class B to Cosan, and Class C and D preferred shares to Shell
in order to pay them through the payment of dividends in the amount of
the tax benefit used by the Company in the fiscal year following to January to December of each year. On March 31, 2015 the dividends
declared for remuneration of the shareholders.
On March 31, 2015, 2014 and 2013, the balance and the changes
of preferred shares payable to the shareholders (Note 9) are as follow:
| |
Class A | |
Class B | |
Class C | |
Total |
| |
| | | |
| | | |
| | | |
| | |
Balance on March 31, 2012 | |
| — | | |
| 140,328 | | |
| 470,337 | | |
| 610,665 | |
Revision of initial balance of tax benefits to be reimbursed | |
| — | | |
| 10,931 | | |
| (15,783 | ) | |
| (4,852 | ) |
Transfer to dividends payable relating to tax benefits used during the period from January, 2012 to December, 2012
| |
| — | | |
| (60,503 | ) | |
| (83,057 | ) | |
| (143,560 | ) |
Balance on March 31, 2013 | |
| — | | |
| 90,756 | | |
| 371,497 | | |
| 462,253 | |
Obligation to Fix Investimentos Ltda regarding to tax benefits to repay recognized on April 29, 2013 | |
| 4,551 | | |
| — | | |
| — | | |
| 4,551 | |
Payment to Fix Investments relating to tax benefits realized to the period of January, 2012 to December, 2012, paid on May 2, 2013 | |
| (578 | ) | |
| — | | |
| — | | |
| (578 | ) |
Payment to Fix Investments relating to tax benefits realized on March 27, 2014 | |
| (3,538 | ) | |
| — | | |
| — | | |
| (3,538 | ) |
Transfer to dividends payable relating to tax benefits used during the period from April, 2013 to March, 2014
| |
| — | | |
| (60,503 | ) | |
| (127,358 | ) | |
| (187,861 | ) |
Balance on March 31, 2014 | |
| 435 | | |
| 30,253 | | |
| 244,139 | | |
| 274,827 | |
| |
| | | |
| | | |
| | | |
| | |
Payment to Cosan and Shell relating to tax benefits used during the period from April 2013 to March 2015, paid on July 28, 2014
| |
| — | | |
| (15,126 | ) | |
| (36,842 | | |
| (51,968 | ) |
Payment to Fix Investments relating to tax benefits realized on October 22, 2014 | |
| (97 | ) | |
| — | | |
| — | | |
| (97 | ) |
Compensation of tax benefits through Refis, on October 22, 2014 | |
| (338 | ) | |
| — | | |
| — | | |
| (338 | ) |
Transfer to dividends payable relating to tax benefits used during the period from April, 2014 to March, 2015
| |
| — | | |
| (15,127 | ) | |
| (58,495 | ) | |
| (73,622 | ) |
Balance on March 31, 2015 | |
| — | | |
| — | | |
| 148,802 | | |
| 148,802 | |
Class B and C of preferred shares deduct the balance of Capital.
RAÍZEN COMBUSTÍVEIS S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
| (b) | Dividends and interest on own capital |
Pursuant to the Company’s bylaws, the amounts of the legal
reserve and dividends to the year ended March 31, 2015 and 2014 were determined as follows:
| |
2015 | |
2014 | |
2013 |
Net income | |
| 1,202,294 | | |
| 1,063,546 | | |
| 877,716 | |
(-) Transfer to legal reserve – 5% | |
| (60,113 | ) | |
| (53,178 | ) | |
| (43,886 | ) |
Calculation basis for dividend distribution | |
| 1,142,181 | | |
| 1,010,368 | | |
| 833,830 | |
| |
| | | |
| | | |
| | |
Common stock | |
| | | |
| | | |
| | |
Mandatory minimum dividend of 1% on net income | |
| 11,422 | | |
| 10,104 | | |
| 8,338 | |
(-) Interest on own capital | |
| (190,500 | ) | |
| (183,000 | ) | |
| (173,000 | ) |
(-) Dividends paid in advance | |
| (539,360 | ) | |
| (360,000 | ) | |
| (227,000 | ) |
| |
| | | |
| | | |
| | |
Remaining interest on own capital | |
| — | | |
| 19,550 | | |
| — | |
| |
| | | |
| | | |
| | |
Preferred shares | |
| 74,412 | | |
| 187,861 | | |
| 143,560 | |
| |
| | | |
| | | |
| | |
Total dividends payable: | |
| | | |
| | | |
| | |
Total parent company | |
| 74,412 | | |
| 207,411 | | |
| 143,560 | |
Dividends payable to non-controlling shareholders
| |
| 9,545 | | |
| 14,068 | | |
| 3,622 | |
Total | |
| 83,957 | | |
| 221,479 | | |
| 147,182 | |
At the Extraordinary General Meeting held on July 28, 2014,
the shareholders of RCSA deliberated and approved the declaration of dividends to the holders of ordinary shares in proportion
to the shares held by them, in the amount of R$ 246,104, fully paid on October 31, 2014.
Additionally, at the same Extraordinary General Meeting, the
shareholders of RCSA deliberated and approved the declaration of additional dividends to those provisioned on March 31, 2014, to
holders of preferred shares B and C, in the amount of R$ 52,548, totaling R$ 240,409. Dividends were paid to the shareholders,
Cosan and Shell, in the amount of R$ 75,630 and R$ 164,779, respectively, fully paid on July 28, 2014. On March 31, 2015, the accrued
dividends, substantially of the same nature, was of R$ 74,412.
At the Extraordinary General Meeting held on October 16, 2014,
the shareholders of RCSA deliberated and approved the declaration of interest on own capital calculated for the period between
February 1 and September 30, 2014 and interim dividends for the period between April 1 and September 30, 2014, in the amount of
R$ 109,500 and R$ 220,360, respectively, individually credited at the rate of 50% for each shareholder. Therefore, the net amount
of interest on own capital and interim dividends payable is R$ 313,435, full paid on October 31, 2014.
Additionally, on October 31, 2014, the RCSA paid the remaining
balance of interest on own capital of the year ended March 31, 2014, in the net amount of R$ 19,550.
At the Extraordinary General Meeting held on December 19, 2014,
the shareholders of RCSA deliberated and approved the declaration of interim dividends for the period between April 1 to November
30, 2014 to the holders of ordinary shares in proportion to the shares held by them, in the amount of R$ 200,000, which R$ 100,000
was paid to Cosan on December 31, 2014 and R$ 100,000 paid to Shell on January 7, 2015.
RAÍZEN COMBUSTÍVEIS S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
At the Extraordinary General Meeting held on December 31, 2014,
the shareholders of RCSA deliberated and approved the declaration of interest on own capital calculated for the period between
October 1 and December 31, 2014, in the amount of R$ 45,000, individually credited at the rate of 50% for each shareholder. Therefore,
the net amount payable is R$ 38,250, full paid on March 18, 2015.
At the Extraordinary General Meeting held on March 16, 2015,
the shareholders of RCSA deliberated and approved the declaration of interim dividends for the period between April 1, 2014 to
January 31, 2015 to the holders of ordinary shares in proportion to the shares held by them, amounting to R$ 119,000, full paid
on March 18, 2015.
At the Extraordinary General Meeting held on March 16, 2015,
the RCSA shareholders deliberated and approved the declaration of interest on own capital calculated for the period between January
1 and February 28, 2015, in the amount of R$ 36,000, individually credited at the rate of 50% for each shareholder. Therefore,
the net amount payable is R$ 30,600, fully paid on March 18, 2015.
| (c) | Valuation adjustment – Actuarial liability |
Refers to gains and losses arising from the provision for payment
of post-employment benefits. This component is recognized in other comprehensive income, but will never be reclassified to profit
or loss in subsequent periods.
On March 31, 2015 and 2014, the Company allocated of 5% of the
net profit to legal reserve, as described in Note 20 (b), pursuant to Company bylaws and in compliance with Brazilian Corporate
Law.
| (e) | Profit retention reserve |
The remaining balance of net income for the year, after allocations
for the establishment of the legal reserve, was allocated to Reserve for retention of earnings until its final allocation
is approved by the Annual General Meeting. Based on the Company's shareholder agreement, up to 80% of net income may be allocated
to this statutory reserve for operations and new investments and projects, and shall not exceed the percentage of 80 % of the share
capital.
RAÍZEN COMBUSTÍVEIS S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
The basic and diluted earnings per share are calculated by dividing
the profit attributable to shareholders by the weighted average number of common shares outstanding during the year.
The table below shows the income and share data used in the
calculation of the earnings per basic and diluted share for the year ended March 31, 2015, 2014 and 2013 (in thousands, except
per share amount):
Basic and diluted
| |
2015 | |
2014 | |
2013 |
Numerator | |
| | | |
| | | |
| | |
Net profit | |
| 1,202,294 | | |
| 1,063,546 | | |
| 1,063,546 | |
Income available to preferred shareholders | |
| (74,412 | ) | |
| (187,861 | ) | |
| (143,560 | ) |
Income available to common shareholders | |
| 1,127,882 | | |
| 875,685 | | |
| 734,156 | |
Denominator: | |
| | | |
| | | |
| | |
Weighted average number of common shares (in thousands) | |
| 3,303,168 | | |
| 3,303,168 | | |
| 3,303,168 | |
Basic and diluted earnings per common share (dollars per share)
| |
| 0.34 | | |
| 0.27 | | |
| 0.22 | |
The Company has no outstanding common shares that may cause
dilution or debt convertible into common shares. Therefore, the basic and diluted earnings per share are equivalents.
| |
2015 | |
2014 | |
2013 |
| |
| | | |
| | | |
| | |
Gross sales | |
| 58,792,859 | | |
| 52,569,840 | | |
| 45,452,355 | |
Sales taxes | |
| (1,186,161 | ) | |
| (1,091,192 | ) | |
| (1,256,495 | ) |
Sales returns and rebates (1) | |
| (822,217 | ) | |
| (887,122 | ) | |
| (663,628 | ) |
Net sales
| |
| 56,784,481 | | |
| 50,591,526 | | |
| 43,532,232 | |
| (1) | On March 31, 2015, includes the amortization of contractual
relationships with customers and supply exclusivity rights of R$ 266,043 (R$ 218,980 in 2014 and R$ 188,380 in 2013). |
RAÍZEN COMBUSTÍVEIS S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
The consolidated statement of income is presented by function.
The reconciliation of statement of income as presented and the expenses by nature for the years ended March 31, 2015, 2014 and
2013 is as follows:
| |
2015 | |
2014 | |
2013 |
| |
| | | |
| | | |
| | |
Fuel - resale | |
| 53,853,650 | | |
| 48,005,216 | | |
| 41,199,019 | |
Personnel expenses | |
| 428,681 | | |
| 404,963 | | |
| 309,029 | |
Depreciation and amortization (1) | |
| 206,998 | | |
| 222,688 | | |
| 232,693 | |
Freight | |
| 277,667 | | |
| 254,693 | | |
| 220,119 | |
Commercial expenses | |
| 212,916 | | |
| 151,727 | | |
| 135,631 | |
Contract labor | |
| 96,563 | | |
| 103,097 | | |
| 91,162 | |
Logistics expenses | |
| 92,278 | | |
| 92,377 | | |
| 79,906 | |
Rentals | |
| 60,397 | | |
| 58,350 | | |
| 56,612 | |
Telecommunications | |
| 13,939 | | |
| 12,753 | | |
| 23,139 | |
Maintenance material | |
| 11,914 | | |
| 8,336 | | |
| 7,788 | |
Other expenses | |
| 91,972 | | |
| 97,091 | | |
| 159,233 | |
| |
| 55,346,975 | | |
| 49,411,291 | | |
| 42,514,331 | |
| (1) | The amortization relating to rights of exclusivity of supply are accounted for as Sales returns and rebates (Note 21). |
| |
2015 | |
2014 | |
2013 |
| |
| | | |
| | | |
| | |
| |
| | | |
| | | |
| | |
Cost of sales | |
| 53,853,650 | | |
| 48,005,216 | | |
| 41,199,019 | |
Selling expenses | |
| 1,110,930 | | |
| 1,015,036 | | |
| 953,696 | |
General and administrative expenses | |
| 382,395 | | |
| 391,039 | | |
| 361,616 | |
| |
| 55,346,975 | | |
| 49,411,291 | | |
| 42,514,331 | |
RAÍZEN COMBUSTÍVEIS S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
| 23. | Financial income (expenses), net |
| |
2015 | |
2014 | |
2013 |
Finance expenses | |
| | | |
| | | |
| | |
Interest | |
| (162,612 | ) | |
| (98,704 | ) | |
| (90,130 | ) |
Monetary variation | |
| (24 | ) | |
| (316 | ) | |
| (161 | ) |
Adjustment to present value – customers | |
| — | | |
| — | | |
| (4,300 | ) |
Others | |
| (8,799 | ) | |
| (5,883 | ) | |
| (5,768 | ) |
| |
| (171,435 | ) | |
| (104,903 | ) | |
| (100,359 | ) |
Amounts capitalized on qualifying assets (Note 11) | |
| 9,685 | | |
| 21,441 | | |
| 21,132 | |
| |
| (161,750 | ) | |
| (83,462 | ) | |
| (79,227 | ) |
Finance revenues
| |
| | | |
| | | |
| | |
Interest | |
| 105,309 | | |
| 78,130 | | |
| 108,833 | |
Monetary variation | |
| — | | |
| 343 | | |
| 1,005 | |
Income from financial investments | |
| 18,181 | | |
| 8,263 | | |
| 6,691 | |
Others | |
| 838 | | |
| 1 | | |
| 1 | |
| |
| 124,328 | | |
| 86,737 | | |
| 116,530 | |
| |
| | | |
| | | |
| | |
Foreign exchange, net | |
| (277,513 | ) | |
| (148,537 | ) | |
| (93,839 | ) |
| |
| | | |
| | | |
| | |
Derivatives, net | |
| 202,017 | | |
| 46,723 | | |
| (2,096 | ) |
| |
| (112,918 | ) | |
| (98,539 | ) | |
| (58,632 | ) |
| 24. | Other operating income, net |
| |
2015 | |
2014 | |
2013 |
| |
| | | |
| | | |
| | |
Rentals and storage | |
| 129,349 | | |
| 117,606 | | |
| 109,748 | |
Gain on sale of property, plant and equipment (1) | |
| 121,956 | | |
| 196,471 | | |
| 63,188 | |
Royalties revenue | |
| 52,533 | | |
| 49,099 | | |
| 42,297 | |
Merchandising | |
| 43,834 | | |
| 41,076 | | |
| 35.360 | |
Commission on sales of lubricants and cards, net (Note 17) | |
| 42,988 | | |
| 48,607 | | |
| 49,199 | |
Revenue from store licenses | |
| 16,913 | | |
| 16,193 | | |
| 13,352 | |
Revenue from commission on sales of aviation fuel | |
| 1,247 | | |
| 2,352 | | |
| 3,882 | |
Bargain purchase gain in the business combination | |
| — | | |
| — | | |
| 17,267 | |
Other expenses, net | |
| (10,007 | ) | |
| (10,827 | ) | |
| (20,070 | ) |
| |
| 398,813 | | |
| 460,577 | | |
| 314,223 | |
| (1) | Mostly relates to the gain on the sale of land to owners of the gas stations which occupy them. This is not part of the ordinary
business activities of the Company. |
RAÍZEN COMBUSTÍVEIS S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
In the normal course of its business, the Company is exposed
to the following risks arising from financial instruments:
This note provides information about the exposure of each of
the aforementioned risks, as well as to the objectives, practices and processes used to measure and manage them. Additionally,
this note provides information regarding the Company’s management of capital.
| (b) | Risk management framework |
The Company has specific policies treasury and trading
that define a direction for risk management.
To monitor the activities and assurance of compliance
with the policies, the Company has the Risk Committee that meets weekly to analyze the foreign exchange market behavior and decide
on the hedging positions in order to reduce the adverse effects of changes in exchange rate.
The Company and its subsidiaries are exposed to market
risks, the main ones are (i) the volatility of the exchange rate; and (ii) the volatility of interest rates. The use of financial
instruments for the purpose of protection is made through a risk exposure analysis for which the Management seeks coverage.
On March 31, 2015 and 2014, the fair values related to transactions
involving derivative financial instruments for hedging purposes or other purposes were measured at fair value through observable
factors such as quoted prices in the active markets or discounted cash flows based on the curves market, which are presented below:
|
Notional |
|
Fair Value |
|
|
2015 |
|
2014 |
|
2015 |
|
2014 |
|
Exchange rate risk |
|
|
|
|
|
|
|
|
Foreign exchange forward |
(929,792 |
) |
- |
|
97,111 |
|
- |
|
Interest swap |
- |
|
(813,891 |
) |
- |
|
23,595 |
|
Futures contracts |
(203,520) |
|
369,025 |
|
(723 |
) |
(431 |
) |
|
(1,133,312 |
) |
(444,866
|
) |
96,388 |
|
23,164 |
|
Interest rate risk |
|
|
|
|
|
|
|
|
Future interest |
710,000 |
|
- |
|
(408 |
) |
|
- |
Swap contracts |
- |
|
(495,597 |
) |
- |
|
(773 |
) |
|
710,000 |
|
(495,597
|
) |
(408 |
) |
(773 |
) |
|
|
|
|
|
|
|
|
|
Total |
(423,312 |
) |
(940,463 |
) |
95,980 |
|
22,391 |
|
Total assets (current) |
|
|
|
|
115,899 |
|
23,888
|
|
|
|
|
|
|
|
|
|
|
Total liabilities |
|
|
|
|
(19,919 |
) |
(1,497 |
) |
|
|
|
|
|
|
|
|
|
Current |
|
|
|
|
(19,919 |
) |
(724 |
) |
Non-current |
|
|
|
|
- |
|
(773 |
) |
RAÍZEN COMBUSTÍVEIS S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
The Company is exposed to currency risk to the extent
that there is a mismatch between the currencies in which sales, purchases and borrowings are denominated and the respective functional
currencies of Company. The functional currency of Company is the Real (BRL). The currency in which these transactions are primarily
denominated is the US dollar. The Company uses derivatives to manage cash flow risk arising from US dollar-denominated export revenues,
net of other foreign currency-denominated cash flows. The table below shows the outstanding derivatives positions as at March 31,
2015 and 2014 used to hedge against currency risk:
Price risk: Outstanding Exchange Derivatives in 2015 |
|
Derivatives |
|
Purchased/
Sold |
|
Market |
|
Contract |
|
Maturity |
|
Notional
(in thousands of US$)
|
|
Notional
(in thousands of R$)
|
|
Fair Value
(in thousands of R$)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Futures |
|
Purchased |
|
BMF&Bovespa |
|
Commercial Dollar |
|
April, 15 |
|
(135,750 |
) |
(435.486 |
) |
(1.933 |
) |
|
Futures |
|
Sold |
|
BMF&Bovespa |
|
Commercial Dollar |
|
April, 15 |
|
165,750 |
|
531.726 |
|
2.362 |
|
|
Futures |
|
Purchased |
|
BMF&Bovespa |
|
Commercial Dollar |
|
May,15 |
|
126,559 |
|
406.000 |
|
2.303 |
|
|
Futures |
|
Sold |
|
BMF&Bovespa |
|
DDI |
|
January, 16 |
|
(220,000 |
) |
(705.760 |
) |
(3.455 |
) |
|
Sub-total of Futures
|
|
|
|
|
|
(63.441 |
) |
(203.520 |
) |
(723 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forward |
|
Purchased |
|
OTC/Cetip |
|
NDF |
|
April, 15 |
|
(320,000 |
) |
(929.792 |
) |
97.111 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sub-total of interest of Forward
|
|
|
|
|
|
(320.000 |
) |
(929.792 |
) |
97,111 |
|
|
Total of exchange rate
|
|
|
|
|
|
(383.441 |
) |
(1.133.312 |
) |
96,388 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Price risk: Outstanding Exchange Derivatives
in 2014
|
|
Derivatives |
|
Purchased/
Sold |
|
Market |
|
Contract |
|
Maturity |
|
Notional
(in thousands of US$)
|
|
Notional
(in thousands of R$)
|
|
Fair Value
(in thousands of R$)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Futures |
|
Sold |
|
BM&FBovespa |
|
Commercial Dollar |
|
May, 2014 |
|
161,500 |
|
369,025 |
|
(431 |
) |
Subtotal of Futures
Sold
|
|
|
|
|
|
161,500 |
|
369,025 |
|
(431 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest swap |
|
Fixed Dollar/ CDI |
|
BM&FBovespa |
|
Commercial Dollar |
|
April, 2014 |
|
(92,949 |
) |
(210,344 |
) |
5,131 |
|
Interest swap |
|
Fixed Dollar/ CDI |
|
BM&FBovespa |
|
Commercial Dollar |
|
May, 2014 |
|
(89,578 |
) |
(202,715 |
) |
5,798 |
|
Interest swap |
|
Fixed Dollar/ CDI |
|
BM&FBovespa |
|
Commercial Dollar |
|
June, 2014 |
|
(88,932 |
) |
(201,252 |
) |
6,174 |
|
Interest swap |
|
Fixed Dollar/ CDI |
|
BM&FBovespa |
|
Commercial Dollar |
|
July, 2014 |
|
(88,193 |
) |
(199,580 |
) |
6,492 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtotal of interest
swap
|
|
|
|
|
|
(359,652 |
) |
(813,891 |
) |
23,595 |
|
Total of exchange rate
|
|
|
|
|
|
(198,152 |
) |
(444,866 |
) |
23,164 |
|
RAÍZEN COMBUSTÍVEIS S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
On March 31, 2015 and 2014, the Company and its subsidiaries
presented the following net balance sheet exposure to US Dollar variance in assets and liabilities denominated in US Dollars:
| |
2015 | |
2014 |
| |
R$ | |
US$ (in
thousands) | |
R$ | |
US$ (in
thousands) |
| |
| |
| |
| |
|
Cash and equivalents (Note 3) | |
| 5,629 | | |
| 1,755 | | |
| 202,420 | | |
| 89,448 | |
Trade notes receivable - foreign (Note 5) | |
| 1,104 | | |
| 344 | | |
| 2,943 | | |
| 1,300 | |
Related parties (Note 9) | |
| 438,645 | | |
| 136,735 | | |
| (384,351 | ) | |
| (169,841 | ) |
Loans and financing (Note 14) | |
| (1,495,816 | ) | |
| (466,277 | ) | |
| (801,456 | ) | |
| (354,156 | ) |
Derivatives (Note 25) | |
| 95,980 | | |
| 29,919 | | |
| 22,391 | | |
| 9,894 | |
Others | |
| (23,624 | ) | |
| (7,364 | ) | |
| (10,660 | ) | |
| (4,711 | ) |
| |
| | | |
| | | |
| | | |
| | |
Foreign exchange exposure, net | |
| (978,082 | ) | |
| (304,888 | ) | |
| (968,713 | ) | |
| (428,066 | ) |
The Company monitors fluctuations in floating interest
rates pegged to some debts and it makes use of derivatives to minimize these risks. The table below shows the outstanding derivative
positions as at March 31, 2015 and 2014 used to hedge against the interest rate risk:
|
Price risk: Outstanding interest rate derivatives in 2015 |
|
|
|
Derivatives |
|
Assets / Liabilities |
|
Market |
|
Maturity |
|
Notional (in thousands of US$) |
|
Notional (in thousands of R$) |
|
Fair Value (in thousands of R$) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DI |
|
Sold |
|
BMF&Bovespa |
|
Jan, 2016 |
|
(221,322 |
) |
(710,000 |
) |
(408 |
) |
|
Total interest – March 31,
2015 |
|
|
|
|
|
(221,322 |
) |
(710,000 |
) |
(408 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Price risk: Outstanding interest rate derivatives
in 2014
|
|
|
Derivatives |
|
Assets / Liabilities |
|
Market |
|
Maturity |
|
Notional (in thousands of US$) |
|
Notional (in thousands of R$) |
|
Fair Value (in thousands of R$) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest swap |
|
Swap Libor / Fixed |
|
OTC |
|
Dec, 2015 |
|
(219,000 |
) |
(495,597 |
) |
(773 |
) |
Total interest – March 31, 2014 |
|
|
|
|
|
(219,000 |
) |
(495,597 |
) |
(773 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RAÍZEN COMBUSTÍVEIS S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
A significant portion of sales by the Company and
its subsidiaries is to a selected group of best-in-class counterparts, i.e. trading companies, fuel distribution companies and
large supermarket chains.
Credit risk is managed through specific rules of
client acceptance, credit rating and setting of limits for customer exposure, including the requirement of a letter of credit from
major banks and obtaining actual warranties on given credit, when applicable. Management believes that the risk of credit is substantially
covered by the allowance for doubtful accounts.
The limits for individual risks are determined based
on internal or external classifications according to the limits determined by the Company Management. The use of the credit limits
is regularly monitored. No credit limits were exceeded during the period, and Management does not expect any losses from default
by these counterparties in excess of the amount already provided.
The Company contracts currency swap derivatives with
selected counterparties. Intercompany derivatives between Raízen Energia and Raízen Combustíveis were registered
with Cetip through the intermediation of a brokerage company.
Guarantee margins – Derivative operations
require an initial guarantee margin. Brokers with whom the Company operates on exchanges offer credit limits for these margins.
On March 31, 2015, the total initial margin required is R$ 41,813 (R$ 14,823 in 2014) through Investment Fund Quotas in guarantee
and R$ 15,500 (R$ 37,956 in 2014) in Bank Certificates of Deposit of prime banks (Note 4). The Company’s derivative transactions
on the over-the-counter market do not require a guarantee margin.
The credit risk on cash and cash equivalents, bank
deposits and investment funds (Note 3), is distributed among the main national and international banks rated by international risk
rating agencies as investment grade.
Liquidity risk is the risk of the Company facing
difficulties to perform obligations associated with its financial liabilities that are settled with spot cash payments or with
another financial asset. The approach of the Company in the management of liquidity is to assure, to the maximum extent, that it
always has sufficient liquidity to perform its obligations as they mature, under normal and stressful conditions, without causing
losses that are unacceptable or have the risk of being detrimental to the Group’s reputation.
The table below shows the financial liabilities by
maturity:
|
|
2015 |
|
2014 |
|
|
|
Up to 1 year |
|
Up to 2 years |
|
3 to 5 years |
|
Over 5 years |
|
Total |
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans and financing (1) |
|
(8,856 |
) |
(2,818 |
) |
(1,199,282 |
) |
(414,109 |
) |
(1,625,065 |
) |
(896,212 |
) |
Related parties (1) |
|
(879,824 |
) |
- |
|
(339,497 |
) |
(972,751 |
) |
(2,192,072 |
) |
(1,039,828 |
) |
|
|
(888,680 |
) |
(2,818 |
) |
(1,538,779 |
) |
(1,386,860 |
) |
(3,817,137 |
) |
(1,936,040 |
) |
(1) Undiscounted contractual cash flows.
RAÍZEN COMBUSTÍVEIS S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
Fair value of financial assets and liabilities is
represented by the amount for which an instrument could be exchanged in a current transaction between willing parties, and not
by way of forced sale or settlement. The following methods and assumptions were used to estimate fair value.
The fair value of cash and cash equivalents, trade
receivables, other financial assets, trade payables to suppliers, due to/from related parties, and other short-term payables approximates
their book values mainly due to the short-term maturity of these instruments. The fair value of other long-term assets and liabilities
do not significantly differ from their book value.
The fair value of loans and financing mainly approximates their
book values since these financial instruments are subject to floating interest rates (Note 14). The fair value of tradable Senior
Notes is based on price quotations at the financial statements date. As at March 31, 2015, the fair value of Senior Notes maturing
in 2014 (Note 14) corresponded to 103.0% of its face value.
The Company contracts derivative financial instruments
with different counterparties, including financial institutions with credit ranking from investment grade. The assessed derivatives
using assessment techniques upon data taken from the market mainly refer to swaps of interest rates, forward exchange and commodities
contracts. The assessment techniques often applied include pricing models for forward contracts and swaps, for which calculations
are made upon the current amount. The models incorporate different data, including those referring to the credit quality of the
counterparties, the exchange rates at sight and long-term, the interest rates and the long-term rates.
The financial instruments categories are presented
as follows:
|
|
|
|
Book value |
|
Fair value |
|
|
|
Classification |
|
2015 |
|
2014 |
|
2015 |
|
2014 |
|
Financial assets |
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents, except Financial investments (Note 3) |
|
Loans and receivables |
|
90,831 |
|
488,901 |
|
90,831 |
|
488,901 |
|
Financial investments (Note 3) |
|
Fair value through profit or loss |
|
142,112 |
|
77,705 |
|
142,112 |
|
77,705 |
|
Restricted cash (Note 4) |
|
Loans and receivables |
|
57,313 |
|
52,779 |
|
57,313 |
|
52,779 |
|
Trade accounts receivable (Note 5) |
|
Loans and receivables |
|
1,571,790 |
|
1,419,901 |
|
1,571,790 |
|
1,419,901 |
|
Related parties (Note 9) |
|
Loans and receivables |
|
2,298,393 |
|
864,130 |
|
2,298,393 |
|
864,130 |
|
Derivative financial instruments (Note 25.b) |
|
Fair value through profit or loss |
|
115,899 |
|
23,888 |
|
115,899 |
|
23,888 |
|
|
|
|
|
4,276,338 |
|
2,927,304 |
|
4,276,338 |
|
2,927,304 |
|
Financial liabilities |
|
|
|
|
|
|
|
|
|
|
|
Trade accounts payable (Note 13) |
|
Amortized cost |
|
(761,295 |
) |
(776,224 |
) |
(761,295 |
) |
(776,224 |
) |
Loans and financing (Note 14) |
|
Amortized cost |
|
(1,492,950 |
) |
(815,208 |
) |
(1,492,950 |
) |
(839,228 |
) |
Related parties (Note 9) |
|
Amortized cost |
|
(2,017,763 |
) |
(1,171,090 |
) |
(2,017,763 |
) |
(1,171,090 |
) |
Derivative financial instruments (Note 25.b) |
|
Fair value through profit or loss |
|
(19,919 |
) |
(1,497 |
) |
(19,919 |
) |
(1,497 |
) |
|
|
|
|
(4,291,927 |
) |
(2,764,019 |
) |
(4,291,927 |
) |
(2,788,039 |
) |
RAÍZEN COMBUSTÍVEIS S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
Fair Value Hierarchy
The Group uses the following hierarchy to determine
and disclose the fair value of financial instruments using the valuation technique:
| · | Level 1 – quoted prices (not adjusted) in active markets for
identical assets and liabilities; |
| · | Level 2 – other techniques for which all inputs with significant
effects on the fair value are observable, either directly or indirectly; and |
| · | Level 3 – techniques that use inputs with significant effects
on fair value not based on observable market input. |
|
|
|
|
Assets and (liabilities) at fair value |
|
Level 1 |
|
Level 2 |
|
Total |
|
March 31, 2015 |
|
|
|
|
|
|
|
Cash and cash equivalents, except Financial investments (Note 3) |
|
- |
|
90,831 |
|
90,831 |
|
Financial investments (Note 3) |
|
- |
|
142,112 |
|
142,112 |
|
Restricted cash (Note 4) |
|
- |
|
57,313 |
|
57,313 |
|
Trade accounts receivable (Note 5) |
|
- |
|
1,571,790 |
|
1,571,790 |
|
Related parties (Note 9) |
|
- |
|
2,298,393 |
|
2,298,393 |
|
Derivative financial assets (Note 25.b) |
|
4,666 |
|
111,233 |
|
115,899 |
|
Trade accounts payable (Note 13) |
|
- |
|
(761,295 |
) |
(761,295 |
) |
Loans and financing (Note 14) |
|
- |
|
(1,492,950 |
) |
(1,492,950 |
) |
Related parties (Note 9) |
|
- |
|
(2,017,763 |
) |
(2,017,763 |
) |
Derivative financial liabilities (Note 25.b) |
|
(5,797 |
) |
(14,122 |
) |
(19,919 |
) |
Total
|
|
(1,131 |
) |
(14,458 |
) |
(15,589 |
) |
|
|
|
|
Assets and (liabilities) at fair value |
|
Level 1 |
|
Level 2 |
|
Total |
|
March 31, 2014 |
|
|
|
|
|
|
|
Cash and cash equivalents, except Financial investments (Note 3) |
|
- |
|
488,901 |
|
488,901 |
|
Financial investments (Note 3) |
|
- |
|
77,705 |
|
77,705 |
|
Restricted cash (Note 4) |
|
- |
|
52,779 |
|
52,779 |
|
Trade accounts receivable (Note 5) |
|
- |
|
1,419,901 |
|
1,419,901 |
|
Related parties (Note 9) |
|
- |
|
864,130 |
|
864,130 |
|
Derivative financial assets (Note 25.b) |
|
294 |
|
23,594 |
|
23,888 |
|
Trade accounts payable (Note 13) |
|
- |
|
(776,224 |
) |
(776,224 |
) |
Loans and financing (Note 14) |
|
- |
|
(839,228 |
) |
(839,228 |
) |
Related parties (Note 9) |
|
- |
|
(1,171,090 |
) |
(1,171,090 |
) |
Derivative financial liabilities (Note 25.b) |
|
(724 |
) |
(773 |
) |
(1,497 |
) |
Total |
|
(430 |
) |
139,695 |
|
139,265 |
|
On March 31, 2015 and 2014, there were no transfers
beween the aforementioned levels to determine the fair value of financial instruments.
RAÍZEN COMBUSTÍVEIS S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
Set out below is a sensitivity analysis of the fair value of
financial instruments in accordance with the risk types considered relevant by the Company.
Assumptions for sensitivity analysis
For the sensitivity analysis, the Company adopted
three scenarios, being one probable, and another two stressed scenarios that may affect the fair value of financial instruments
of the Company. The probable scenario takes into account the future market of Dollar on March 31, 2015 and 2014 that determines
the derivatives fair value on the specified date. The stressed scenarios were defined taking into consideration the adverse impacts
of 25% and 50% on Dollar curves, which were considered as the basis for the probable scenario.
Sensitivity table
The sensitivity table of derivative variation of
the Company in probable, possible and remote scenarios is presented below:
|
|
|
|
Impacts on profit or loss 2015(*) |
|
Interest rate risk
|
|
Risk Factor |
|
Probable Scenario |
|
Scenario +(25%) |
|
Fair Value Balance |
|
Scenario +(50%) |
|
Fair Value Balance |
|
Exchange rate derivatives |
|
|
|
|
|
|
|
|
|
|
|
|
|
Futures Contracts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales commitments |
|
Decrease in the exchange rate R$/US$ |
|
(723 |
) |
71,415 |
|
70,691 |
|
142,830 |
|
142,106 |
|
Forward Contracts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales commitments |
|
Decrease in the exchange rate R$/US$ |
|
97,111 |
|
(111,904 |
) |
(14,793 |
) |
(223,808 |
) |
(126,697 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
96,388 |
|
(40,489 |
) |
55,898 |
|
(80,978 |
) |
15,409 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate derivatives |
|
|
|
|
|
|
|
|
|
|
|
|
|
Futures Contracts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales commitments |
|
Decrease in the interest rate |
|
(408 |
) |
(11,670 |
) |
(12,078 |
) |
(23,340 |
) |
(23,748 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impacts on profit or loss 2014(*) |
|
Interest rate risk
|
|
Risk Factor |
|
Probable Scenario |
|
Scenario +(25%) |
|
Fair Value Balance |
|
Scenario +(50%) |
|
Fair Value Balance |
|
Exchange rate derivatives |
|
|
|
|
|
|
|
|
|
|
|
|
|
Futures Contracts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales commitments |
|
Decrease in the exchange rate R$/US$ |
|
(431 |
) |
92,256 |
|
91,826 |
|
184,512 |
|
184,082 |
|
Exchange swap: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales commitments |
|
Decrease in the exchange rate R$/US$ |
|
23,595 |
|
(212,371 |
) |
(188,776 |
) |
(424,742 |
) |
(401,147 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23,164 |
|
(120,115 |
) |
(96,950 |
) |
(240,230 |
) |
(217,065 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate derivatives |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest swap: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales commitments |
|
Decrease in the interest rate |
|
(773 |
) |
(1,675 |
) |
(2,448 |
) |
(3,350 |
) |
(4,123 |
) |
| (*) | Projected result in up to 12 months from March 31, 2015
and 2014. |
RAÍZEN COMBUSTÍVEIS S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
Set out below are the effects that would be generated by changes
in risk variables to which the Company is exposed at the end of the year.
| i) | Net exposure to US dollar fluctuations |
Based on the US dollar-denominated assets and liabilities as
at March 31, 2015 and 2014, the Company simulation involves the appreciation and depreciation of exchange rates (R$/US$) by 25%
and 50%. The probable scenario takes into consideration the Company’s projections for exchange rates on the maturity of transactions
as follows:
|
|
Exchange rate simulations (R$/US$) |
|
|
Scenarios |
|
|
Balance sheet date |
|
+25% |
|
+50% |
|
-25% |
|
-50% |
|
|
|
|
|
|
|
|
|
|
|
March 31, 2015 |
|
3,2080 |
|
4,0100 |
|
4,8120 |
|
2,4060 |
|
1,6040 |
March 31, 2014 |
|
2,2630 |
|
2,8288 |
|
3,3945 |
|
1,6973 |
|
1,1315 |
The probable scenario takes into consideration the
position as at March 31, 2015. The effects of the stressed scenarios would be recorded in profit or loss as exchange variation
gain (loss) as follows:
|
|
Exchange variation effect |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Scenarios |
|
March 31, 2015 |
|
|
|
Balance sheet date |
|
+25% |
|
+50% |
|
-25% |
|
-50% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and equivalents (Note 3) |
|
|
|
5,629 |
|
1,407 |
|
2,815 |
|
(1,407 |
) |
(2,815 |
) |
Trade notes receivable - foreign (Note 5) |
|
|
|
1,104 |
|
276 |
|
552 |
|
(276 |
) |
(552 |
) |
Related parties (Note 9) |
|
|
|
438,645 |
|
109,661 |
|
219,323 |
|
(109,661) |
|
(219,323 |
) |
Loans and financing (Note 14) |
|
|
|
(1,495,816 |
) |
(373,954 |
) |
(747,908 |
) |
373,954 |
|
747,908 |
|
Others |
|
|
|
(23,624 |
) |
(5,906 |
) |
(11,812 |
) |
5,906 |
|
11,812 |
|
Impact on the results for the year
|
|
|
|
|
|
(268,516 |
) |
(537,030 |
) |
268,516 |
|
537,030 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exchange variation effect |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Scenarios |
|
|
March 31, 2014 |
|
|
|
Balance sheet Date |
|
+25% |
|
+50% |
|
-25% |
|
-50% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and equivalents (Note 3) |
|
|
|
202,420 |
|
50,605 |
|
101,210 |
|
(50,605 |
) |
(101,210 |
) |
|
Trade notes receivable - foreign (Note 5) |
|
|
|
2,943 |
|
736 |
|
1,472 |
|
(736 |
) |
(1,472 |
) |
|
Related parties (Note 9) |
|
|
|
(384,351 |
) |
(96,088 |
) |
(192,176 |
) |
96,088 |
|
192,176 |
|
|
Loans and financing (Note 14) |
|
|
|
(801,456 |
) |
(200,364 |
) |
(400,728 |
) |
200,364 |
|
400,728 |
|
|
Others |
|
|
|
(10,660 |
) |
(2,665 |
) |
(5,330 |
) |
2,665 |
|
5,330 |
|
|
Impact on the results for the year
|
|
|
|
|
|
(247,776 |
) |
(495,552 |
) |
247,776 |
|
495,552 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RAÍZEN COMBUSTÍVEIS S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
| ii) | Changes in interest rates |
The Company simulated the income from investments
linked to the CDI rate involving an appreciation and depreciation by 25% and 50% as follows:
| |
2015 |
| |
| Balance sheet date | | |
| Probable scenario | | |
| +25% | | |
| +50% | | |
| -25% | | |
| -50% | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Financial investments (Note 3) | |
| 142,112 | | |
| 15,567 | | |
| 19,459 | | |
| 23,351 | | |
| 11,675 | | |
| 7,784 | |
Loans and financing (Note 14)
| |
| (1,277,496 | ) | |
| (22,360 | ) | |
| (27,950 | ) | |
| (33,540 | ) | |
| (16,770 | ) | |
| (11,180 | ) |
| |
|
| |
2014 |
| |
| Balance sheet date | | |
| Probable scenario | | |
| +25% | | |
| +50% | | |
| -25 | % | |
| -50 | % |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Financial investments (Note 3) | |
| 77,705 | | |
| 6,779 | | |
| 8,474 | | |
| 10,169 | | |
| 5,084 | | |
| 3,390 | |
Loans and financing (Note 14)
| |
| (14,904 | ) | |
| (1,120 | ) | |
| (1,400 | ) | |
| (1,681 | ) | |
| (840 | ) | |
| (560 | ) |
The other risk factors were considered irrelevant
to the outcome of financial instrument.
The Company's goal, when managing its capital structure, is
to ensure that it will continue as a going concern and be able to finance investment opportunities, by keeping a healthy credit
profile and offering an appropriate return to its shareholders.
The Company has relationships with large local and international
banks and financial institutions. Between May and August, 2014 Fitch Ratings, Moody’s and Standard and Poor’s rated
the Company’s creditworthiness as AAA (bra), Aaa.br and brAAA respectively.
The Company’s leverage ratios as of March 31, 2015 and
2014 were as follows:
|
|
|
|
2015 |
|
2014 |
|
Third party capital |
|
|
|
|
Loans and borrowings (Note 14) |
1,492,950 |
|
815,208 |
|
Less: Cash and cash equivalents (Note 3) |
(232,943 |
) |
(566,606 |
) |
|
1,260,007 |
|
248,602 |
|
Own capital |
|
|
|
|
Shareholders’ equity |
|
|
|
|
Attributable to owners of the Company |
4,452,554 |
|
4,226,481 |
|
Attributable to non-controlling interests |
152,161 |
|
110,877 |
|
|
4,604,715
|
|
4,337,358 |
|
|
|
|
|
|
Total capital |
5,864,722 |
|
4,585,960 |
|
|
|
|
|
|
Leverage ratio |
21% |
|
5% |
|
The increase in the leverage ratio
was basically due to the decrease in cash and by financing funding in Schuldschein mode made during the year ended March 31,
2015. This increase is aligned with the Company’s strategy of maintaining the normal course of business, as well as maintaining
adequate cash balances.
RAÍZEN COMBUSTÍVEIS S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
| 26. | Supplementary retirement plan and other employee benefits |
Defined contribution
On June 1, 2011, the Company began sponsoring the
Raiz Benefits Plan, administered by Raízprev – Entidade de Previdência Privada, which is a closed entity pension
nonprofit.
The Company is endowed with administrative, financial
and equity, having as object the administration and implementation of benefit plans from retirement payments, as defined in the
Regulations of the benefit plans, with the sponsoring the following companies: Raízen Combustíveis S.A., Petróleo
Sabbá S.A. and Raízen Mime Combustíveis S.A.
During the year ended March 31, 2015, the contribution
amount recognized as an expense was R$ 5,250 (R$ 5,108 in 2014 and R$ 4,346 in 2013).
The Company recognizes a liability and an expense
for profit sharing based on a methodology that takes into account previously set goals to employees. The Company recognizes a provision
when it is contractually obliged or when there is a past practice that has created a constructive obligation.
The Company has an insurance and risk management program that
provides coverage and protection compatible with its assets and operations.
The insurance coverage is based on a strict risk and loss study
conducted by local insurance advisors, and the insurance taken out is considered by management as sufficient to cover losses that
may arise, based on the nature of the Company’s activities.
|
|
|
|
March 31,2015 |
|
Asset covered |
|
Coverage |
|
Insured Amount |
|
Amount of coverage |
|
|
|
|
|
|
|
|
|
Inventories and property, plant and equipment |
|
Fire, lightning, explosion, windstorm, breakdown of machinery, loss of profit and other |
|
2,925,771
|
|
464,840
|
|
National transport |
|
Road risk and civil liability of cargo carrier |
|
9,000
|
|
9,000
|
|
General civil liability for directors and officers |
|
Third party complaints
|
|
-
|
|
1,940,000
|
|
Total
|
|
|
|
2,934,771 |
|
2,413,840 |
|
The risk provisions adopted are not part of the scope
of a financial statement audit. Consequently, they were not examined by Company’s independent auditors.
RAÍZEN COMBUSTÍVEIS S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
| 28. | Internal reorganization and business combination |
| (i) | Acquisition of Latina Distribuidora de Petróleo
Ltda. (“Latina”) |
On April 1, 2014, the Company acquired
all of the common shares of Latina, a fuel distribution business in the southern region of Brazil, for R$ 178,336. The purpose
of this acquisition is to expand the presence of the Shell brand and products and services in the three southern states, and improve
the logistics efficiency of the Company’s distribution in the fuel stations, mainly in the interior of Rio Grande do Sul.
The fair value of assets acquired and liabilities assumed at
the acquisition date of Latina was as follows:
Line items | |
Total |
Accounts receivables | |
| 49,648 | |
Inventories | |
| 26,061 | |
Advances to suppliers | |
| 10,443 | |
Taxes and contributions receivable | |
| 1,729 | |
Judicial deposits | |
| 7,925 | |
Deferred tax liabilities (Note 16.c) | |
| (16,926 | ) |
Other assets | |
| 41 | |
Property, plant and equipment (Note 11) | |
| 27,660 | |
Intangible assets (Note 12) | |
| 53,806 | |
Suppliers | |
| (13,515 | ) |
Loans and financing | |
| (22,994 | ) |
Provision for legal proceedings (Note 18) | |
| (10,649 | ) |
Wages and salaries payable | |
| (1,103 | ) |
Income tax payable | |
| (1,481 | ) |
Other liabilities | |
| (3,333 | ) |
| |
| | |
Net assets contributed | |
| 107,312 | |
| |
| | |
Consideration transferred, net of cash received | |
| 177,744 | |
| |
| | |
Goodwill (Note 12) | |
| 70,432 | |
The fair value of the assets acquired and liabilities assumed
is categorized primarily within level 3.
At a meeting of members held on the same date of the acquisition,
the merger of Latina with the Company was approved.
| (ii) | Internal corporate - real estate investment activity |
On November 18, 2014, Saturno Investimentos Imobiliários
Ltda (“Saturno”) was created through a cash contributions made by the Company and Sampras, a Company’s subsidiary,
in the amounts of R$ 999 and R$ 1.00, respectively, paid up on December 23, 2014.
On December 30, 2014, the Saturno received an additional capital
contribution in the amount of R$ 161,067. The capital contribution made by the Company comprised certain properties and are measured
at the book value.
RAÍZEN COMBUSTÍVEIS S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
Such corporate restructuring impacted the consolidated financial
statements based on the partial reversal of deferred taxes liability over the fair value on assets contributed in the amount of
R$ 24,502, as a result of the change in tax regime (i.e. Saturno is taxed based on presumed profit and therefore the related deferred
tax liability should be reversed).
Fire in the Terminal de Líquidos de Santos
The fire occurred on April 2, 2015 in the Terminal Intermodal
de Santos (TIS), a company operated by Ultracargo – Operações Logísticas a Participações
Ltda. (“Ultracargo”), affected products of Raízen Combustíveis S.A. (and its subsidiaries) that were
stored there. Initial estimates assume that the impact of such products does not represent material financial value in the context
of the consolidated financial statements of Raízen Combustíveis S.A.. The contractual relationship between Raízen
Combustíves S.A. (and its subsidiaries) and Ultracargo covers risks they may be exposed. The causes and accident damage
are under investigation.
Raízen Energia S.A.
RAÍZEN ENERGIA S.A.
Financial Statements as
at March 31, 2015
Table of contents
Independent auditor’s report |
2 |
Consolidated balance sheet |
4 |
Consolidated statement of income |
6 |
Consolidated statement of comprehensive income |
7 |
Consolidated statement of changes in shareholders’ equity |
8 |
Consolidated statement of cash flows |
11 |
Notes to consolidated financial statements |
12 |
Independent
Auditor's Report
To the Board of Directors and
Shareholders
Raízen Energia S.A.
We have
audited the accompanying consolidated financial statements of Raízen Energia S.A. and its subsidiaries, which comprise
the consolidated balance sheets as of March 31, 2015 and March 31, 2014, and the related consolidated statements of income, comprehensive
income, changes in shareholders’ equity and cash flows for each of the three years in the period ended March 31, 2015.
Management's Responsibility
for the Consolidated Financial Statements
Management
is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with International
Financial Reporting Standards as issued by the International Accounting Standards Board; this includes the design, implementation,
and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that
are free from material misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility
is to express an opinion on the consolidated financial statements based on our audits. We conducted our audits in accordance with
auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.
An audit involves
performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The
procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the consolidated
financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to
the Company's preparation and fair presentation of the consolidated financial statements in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal
control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies
used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation
of the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinion.
Opinion
In our opinion, the consolidated
financial statements referred to above present fairly, in all material respects, the financial position of Raízen Energia
S.A. and its subsidiaries at March 31, 2015 and March 31, 2014, and the results of their operations and their cash flows for each
of the three years in the period ended March 31, 2015, in accordance with International Financial Reporting Standards as issued
by the International Accounting Standards Board.
Campinas, Brazil
June 22, 2015
/s/ PricewaterhouseCoopers
PricewaterhouseCoopers
Auditores Independentes
RAÍZEN ENERGIA S.A.
Consolidated balance sheet at March 31
(In thousands of Brazilian
Reais)
|
Note |
|
2015 |
|
2014 |
Assets |
|
|
|
|
|
Current assets |
|
|
|
|
|
Cash and cash equivalents |
3 |
|
3,795,287 |
|
1,771,015 |
Restricted cash |
4 |
|
131,311 |
|
251,803 |
Derivative financial instruments |
27 |
|
759,306 |
|
200,588 |
Trade accounts receivable,
net |
5 |
|
331,638 |
|
356,004 |
Other financial assets |
9 |
|
12,931 |
|
13,267 |
Inventories |
7 |
|
354,862 |
|
448,694 |
Recoverable income tax and
social contributions |
18.a.1 |
|
36,859 |
|
359,893 |
Recoverable taxes |
6 |
|
157,304 |
|
145,903 |
Advances to suppliers |
8 |
|
206,004 |
|
209,251 |
Related parties |
10 |
|
767,894 |
|
192,574 |
Other receivables |
|
|
52,328 |
|
57,529 |
|
|
|
6,605,724 |
|
4,006,521 |
|
|
|
|
|
|
Non-current assets |
|
|
|
|
|
Derivative financial instruments |
27 |
|
315,279 |
|
1,109 |
Other financial assets |
9 |
|
968,420 |
|
890,680 |
Recoverable income tax and
social contributions |
18
a.1 |
|
508,360 |
|
- |
Recoverable taxes |
6 |
|
32,184 |
|
26,199 |
Advances to suppliers |
8 |
|
55,172 |
|
21,841 |
Related parties |
10 |
|
1,429,358 |
|
1,371,257 |
Deferred income tax and
social contributions |
18.b |
|
299,314 |
|
256,611 |
Judicial deposits |
19 |
|
205,797 |
|
282,416 |
Other receivables |
|
|
46,892 |
|
30,884 |
Investments in associates
and joint ventures |
11 |
|
210,586 |
|
162,266 |
Biological assets |
12 |
|
1,959,859 |
|
2,036,693 |
Property, plant and equipment |
13 |
|
7,615,059 |
|
7,250,609 |
Intangibles |
14 |
|
1,494,333 |
|
1,535,137 |
|
|
|
15,140,613 |
|
13,865,702 |
Total
assets |
|
|
21,746,337 |
|
17,872,223 |
The accompanying
notes are an integral part of these consolidated financial statements.
RAÍZEN ENERGIA S.A.
Consolidated balance sheet at March 31
(In thousands of Brazilian Reais)
(continued)
|
Note |
|
2015 |
|
2014 |
Liabilities and shareholders’
equity |
|
|
|
|
|
Current liabilities |
|
|
|
|
|
Short-term debt and
current portion of long-term debt |
16 |
|
1,377,898 |
|
1,122,633 |
Derivative financial
instruments |
27 |
|
224,078 |
|
166,175 |
Trade accounts payable |
15 |
|
568,296 |
|
637,863 |
Payroll and related
charges |
|
|
321,116 |
|
292,468 |
Income tax and social
contributions payable |
18 a.2 |
|
8,862 |
|
760 |
Taxes payable |
17 |
|
99,537 |
|
156,572 |
Dividends payable |
21.b |
|
51,066 |
|
78,672 |
Related parties |
10 |
|
226,854 |
|
127,370 |
Other liabilities |
|
|
194,867 |
|
111,070 |
|
|
|
3,072,574 |
|
2,693,583 |
Non-current liabilities |
|
|
|
|
|
Long-term debt |
16 |
|
9,047,745 |
|
6,510,886 |
Derivative financial
instruments |
27 |
|
56,231 |
|
12,105 |
Taxes payable |
17 |
|
169,116 |
|
667,374 |
Related parties |
10 |
|
2,194,965 |
|
897,025 |
Provision for tax,
civil and labor risks |
19 |
|
244,480 |
|
343,274 |
Provision for unsecured
liabilities of investments in associates |
11 |
|
2,653 |
|
2,642 |
Deferred income tax
and social contributions |
18.b |
|
76,914 |
|
21,394 |
Other liabilities |
|
|
106,450 |
|
79,431 |
|
|
|
11,898,554 |
|
8,534,131 |
Total
liabilities |
|
|
14,971,128 |
|
11,227,714 |
|
|
|
|
|
|
Shareholders’
equity |
|
|
|
|
|
|
|
|
|
|
|
Capital |
21.a |
|
4,923,054 |
|
4,752,078 |
Capital reserves |
21.a |
|
1,092,538 |
|
1,253,919 |
Other comprehensive
income |
21.c |
|
15,248 |
|
(10,669) |
Retained earnings |
21.d
e 21.e |
|
744,369 |
|
649,181 |
Equity attributable to
controlling shareholders
|
|
|
6,775,209 |
|
6,644,509 |
Total shareholders’
equity |
|
|
6,775,209 |
|
6,644,509 |
Total
liabilities and shareholders’ equity |
|
|
21,746,337 |
|
17,872,223 |
The accompanying
notes are an integral part of these consolidated financial statements.
RAÍZEN ENERGIA S.A.
Consolidated statement of income
Year ended March 31
(In thousands of Brazilian
Reais, except for earnings per share which is presented in R$)
| |
Note | |
2015 | | |
2014 | | |
2013 | |
| |
| |
| | |
| | |
| |
Continuing operations | |
| |
| | |
| | |
| |
Net sales | |
22 | |
| 9,739,137 | | |
| 9,455,221 | | |
| 8,468,238 | |
Cost of sales | |
24 | |
| (8,064,341 | ) | |
| (7,542,579 | ) | |
| (6,698,108 | ) |
Gross
profit | |
| |
| 1,674,796 | | |
| 1,912,642 | | |
| 1,770,130 | |
| |
| |
| | | |
| | | |
| | |
Operating income (expenses) | |
| |
| | | |
| | | |
| | |
Selling expenses | |
24 | |
| (564,863 | ) | |
| (637,316 | ) | |
| (605,164 | ) |
General and administrative expenses | |
24 | |
| (487,493 | ) | |
| (539,857 | ) | |
| (490,246 | ) |
Other operating income, net | |
25 | |
| 71,340 | | |
| 60,412 | | |
| 47,843 | |
Share of losses of equity-accounted investees | |
11 | |
| (33,938 | ) | |
| (34,435 | ) | |
| (23,107 | ) |
| |
| |
| (1,014,954 | ) | |
| (1,151,196 | ) | |
| (1,070,674 | ) |
Operating
income | |
| |
| 659,842 | | |
| 761,446 | | |
| 699,456 | |
| |
| |
| | | |
| | | |
| | |
Financial expense | |
26 | |
| (655,939 | ) | |
| (465,547 | ) | |
| (423,998 | ) |
Financial income | |
26 | |
| 467,777 | | |
| 252,195 | | |
| 185,572 | |
Foreign exchange losses, net | |
26 | |
| (1,042,138 | ) | |
| (292,073 | ) | |
| (27,519 | ) |
Derivatives, net | |
26 | |
| 518,065 | | |
| (67,506 | ) | |
| (55,662 | ) |
| |
| |
| (712,235 | ) | |
| (572,931 | ) | |
| (321,607 | ) |
| |
| |
| | | |
| | | |
| | |
Income before taxes | |
| |
| (52,393 | ) | |
| 188,515 | | |
| 377,849 | |
| |
| |
| | | |
| | | |
| | |
Current taxes | |
18.a | |
| (61,184 | ) | |
| (29,070 | ) | |
| (104,404 | ) |
Deferred taxes | |
18.a | |
| 224,576 | | |
| (18,562 | ) | |
| 82,299 | |
| |
| |
| 163,392 | | |
| (47,632 | ) | |
| (22,105 | ) |
Net
income | |
| |
| 110,999 | | |
| 140,883 | | |
| 355,744 | |
| |
| |
| | | |
| | | |
| | |
Attributable to: | |
| |
| | | |
| | | |
| | |
Controlling shareholders | |
| |
| 110,999 | | |
| 140,883 | | |
| 354,710 | |
Non-controlling shareholders | |
| |
| — | | |
| — | | |
| 1,034 | |
| |
| |
| 110,999 | | |
| 140,883 | | |
| 355,744 | |
| |
| |
| | | |
| | | |
| | |
Earnings
per share – basic and diluted | |
21.f | |
| 0.02 | | |
| 0.02 | | |
| 0.05 | |
| |
| |
| | | |
| | | |
| | |
The accompanying
notes are an integral part of these consolidated financial statements.
RAÍZEN ENERGIA S.A.
Consolidated statement of comprehensive income
Years ended March 31
(In thousands of Brazilian
Reais)
| |
2015 | | |
2014 | | |
2013 | |
| |
| | |
| | |
| |
Net income | |
| 110,999 | | |
| 140,883 | | |
| 355,744 | |
| |
| | | |
| | | |
| | |
Other comprehensive income | |
| | | |
| | | |
| | |
Gain (loss) on cash flow hedges (Note 27.e) | |
| 51,965 | | |
| (168,292 | ) | |
| 108,169 | |
Currency translation differences | |
| 535 | | |
| 1,082 | | |
| 16,086 | |
Deferred taxes (Note 18.c) | |
| (17,681 | ) | |
| 57,221 | | |
| (36,778 | )) |
Other comprehensive income, net, which may be reclassified to income in subsequent periods | |
| 34,819 | | |
| (109,989 | ) | |
| 87,477 | |
| |
| | | |
| | | |
| | |
Actuarial losses on pension and post-employment plans | |
| (13,405 | ) | |
| (89 | ) | |
| — | |
Taxes on unrealized gains losses on pension post-employment plans (Note 18.c) | |
| 4,503 | | |
| 30 | | |
| — | |
| |
| | | |
| | | |
| | |
Other comprehensive income, net, which will not impact income in subsequent periods | |
| (8,902 | ) | |
| (59 | ) | |
| — | |
| |
| | | |
| | | |
| | |
Total comprehensive income | |
| 136,916 | | |
| 30,835 | | |
| 443,221 | |
| |
| | | |
| | | |
| | |
Attributable to: | |
| | | |
| | | |
| | |
Controlling shareholders | |
| 136,916 | | |
| 30,835 | | |
| 442,187 | |
Non-controlling shareholders | |
| — | | |
| — | | |
| 1,034 | |
| |
| 136,916 | | |
| 30,835 | | |
| 443,221 | |
The accompanying notes are an integral
part of these consolidated financial statements.
RAÍZEN ENERGIA S.A.
Consolidated statement of changes in shareholders’
equity
Years ended March 31
(In thousands of Brazilian
Reais)
| |
Attributable to controlling shareholders | |
| |
|
| |
| |
Capital reserves | |
| |
Retained earnings | |
| |
| |
| |
|
| |
Capital stock | |
Capital reserve | |
Special reserve for goodwill | |
Other comprehensive income | |
Legal Reserve | |
Profit retention | |
Accumulated profits (loss) | |
Total | |
Attributable to non-controlling shareholders | |
Total shareholders' equity |
Balance on March 31, 2012 | |
| 5,331,456 | | |
| 350,389 | | |
| - | | |
| 41,136 | | |
| 20,802 | | |
| 197,618 | | |
| - | | |
| 5,941,401 | | |
| 16,893 | | |
| 5,958,294 | |
Contributions from (distributions to) the shareholders of the company | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Capital increase on November 29, 2012 (Note 21.a) REPSA | |
| 22,119 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 22,119 | | |
| - | | |
| 22,119 | |
Capital increase on November 29, 2012 (Note 21.a) REPSA | |
| 181,417 | | |
| 817,418 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 998,835 | | |
| - | | |
| 998,835 | |
Effect of reverse merger of REPSA by RESA (Notes 1 and 21.a) | |
| (928,509 | ) | |
| (135,824 | ) | |
| - | | |
| (29,234 | ) | |
| 10,917 | | |
| 322,563 | | |
| (238,748 | ) | |
| (998,835 | ) | |
| - | | |
| (998,835 | ) |
Capital Increase on February 28, 2013 (Note 21.a) – RESA | |
| 7,927 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 7,927 | | |
| - | | |
| 7,927 | |
Redemption of class B preferred shares (Note 21.a) | |
| 66,877 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| (66,877 | ) | |
| - | | |
| - | | |
| - | |
Constitution of deferred taxes on goodwill (Note 18 and 21.a) | |
| - | | |
| - | | |
| 241,107 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 241,107 | | |
| - | | |
| 241,107 | |
Reflected effect from operations of subsidiaries | |
| - | | |
| 1,929 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 1,929 | | |
| - | | |
| 1,929 | |
Constitution of the legal reserve (Note 21.a) | |
| - | | |
| - | | |
| - | | |
| - | | |
| 5,798 | | |
| - | | |
| (5,798 | ) | |
| - | | |
| - | | |
| - | |
Mandatory minimum dividends (Note 21.b) | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| (1,102 | ) | |
| (1,102 | ) | |
| - | | |
| (1,102 | ) |
Constitution of reserves | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 42,185 | | |
| (42,185 | ) | |
| - | | |
| - | | |
| - | |
| |
| (650,169 | ) | |
| 683,523 | | |
| 241,107 | | |
| (29,234 | ) | |
| 16,715 | | |
| 364,748 | | |
| (354,710 | ) | |
| 271,980 | | |
| - | | |
| 271,980 | |
Comprehensive income: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Net income | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 354,710 | | |
| 354,710 | | |
| 1,034 | | |
| 355,744 | |
Gain (loss) on cash flow hedge | |
| - | | |
| - | | |
| - | | |
| 71,391 | | |
| - | | |
| - | | |
| - | | |
| 71,391 | | |
| - | | |
| 71,391 | |
Accumulated foreign currency translation adjustments | |
| - | | |
| - | | |
| - | | |
| 16,086 | | |
| - | | |
| - | | |
| - | | |
| 16,086 | | |
| - | | |
| 16,086 | |
| |
| - | | |
| - | | |
| - | | |
| 87,477 | | |
| - | | |
| - | | |
| 354,710 | | |
| 442,187 | | |
| 1,034 | | |
| 443,221 | |
Balance on March 31, 2013 | |
| 4,681,287 | | |
| 1,033,912 | | |
| 241,107 | | |
| 99,379 | | |
| 37,517 | | |
| 562,366 | | |
| - | | |
| 6,655,568 | | |
| 17,927 | | |
| 6,673,495 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
The accompanying
notes are an integral part of these consolidated financial statements.
RAÍZEN ENERGIA S.A.
Consolidated statement of changes in shareholders’
equity
Years ended March 31
(in thousands of Reais)
| |
Attributable
to controlling shareholders | |
| |
|
| |
Capital
Reserves | |
| |
Retained
earnings | |
| |
| |
| |
|
| |
Capital
stock | |
Capital
reserve | |
Special
reserve for goodwill | |
Other
comprehensive income | |
Tax
incentive reserve | |
Legal | |
Profit
retention | |
Accumulated
profits (loss) | |
Total | |
Attributable
to non-controlling shareholders | |
Total shareholders'
equity |
Balance
on March 31, 2013 | |
| 4,681,287 | | |
| 1,033,912 | | |
| 241,107 | | |
| 99,379 | | |
| - | | |
| 37,517 | | |
| 562,366 | | |
| - | | |
| 6,655,568 | | |
| 17,927 | | |
| 6,673,495 | |
Contributions from (distributions
to) shareholders of the Company | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Capital increase (Note 21.a) | |
| 8,427 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 8,427 | | |
| - | | |
| 8,427 | |
Supplemental
amount paid in the acquisition of subsidiary (Notes 11.e and 21.a) | |
| - | | |
| (5,973 | ) | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| (5,973 | ) | |
| - | | |
| (5,973 | ) |
Reduction due to acquisition
of subsidiary (Notes 11.a and 21.a ) | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| (17,927 | ) | |
| (17,927 | ) |
Supplemental
dividends payable to holders of preferred shares (Notes 10 and 21.a) | |
| 6,916 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| (6,916 | ) | |
| - | | |
| - | | |
| - | | |
| - | |
Accumulated foreign currency
translation adjustments | |
| - | | |
| (20,168 | ) | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| (20,168 | ) | |
| - | | |
| (20,168 | ) |
Redemption of class B preferred
shares (Note 21.a and b) | |
| 55,448 | | |
| 3,743 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| (43,636 | ) | |
| 15,555 | | |
| - | | |
| 15,555 | |
Allocation to tax incentive
reserve (Note 21.e) | |
| - | | |
| - | | |
| - | | |
| - | | |
| 30,256 | | |
| - | | |
| (16,221 | ) | |
| (14,035 | ) | |
| - | | |
| - | | |
| - | |
Cumulative translation
adjustment related to subsidiaries | |
| - | | |
| 1,301 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 1,301 | | |
| - | | |
| 1,301 | |
Interest on capital (Note
21.b) | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| (40,000 | ) | |
| (40,000 | ) | |
| - | | |
| (40,000 | ) |
Constitution of the legal
reserve (Note 21.d) | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 7,044 | | |
| - | | |
| (7,044 | ) | |
| - | | |
| - | | |
| - | |
Mandatory minimum dividends
(Note 21.b) | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| (1,036 | ) | |
| (1,036 | ) | |
| - | | |
| (1,036 | ) |
Constitution
of reserves (Note 21.e) | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 35,132 | | |
| (35,132 | ) | |
| - | | |
| - | | |
| - | |
| |
| 70,791 | | |
| (21,097 | ) | |
| - | | |
| - | | |
| 30,256 | | |
| 7,044 | | |
| 11,995 | | |
| (140,883 | ) | |
| (41,894 | ) | |
| (17,927 | ) | |
| (59,821 | ) |
Comprehensive income: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Net profit | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 140,883 | | |
| 140,883 | | |
| - | | |
| 140,883 | |
Gain (loss) on cash flow
hedge (Note 27) | |
| - | | |
| - | | |
| - | | |
| (111,071 | ) | |
| - | | |
| - | | |
| - | | |
| - | | |
| (111,071 | ) | |
| - | | |
| (111,071 | ) |
Accumulated foreign currency
translation adjustments | |
| - | | |
| - | | |
| - | | |
| 1,082 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 1,082 | | |
| - | | |
| 1,082 | |
Actuarial
gains (losses) on post-employment benefit plans | |
| - | | |
| - | | |
| - | | |
| (59 | ) | |
| - | | |
| - | | |
| - | | |
| - | | |
| (59 | ) | |
| - | | |
| (59 | ) |
| |
| - | | |
| - | | |
| - | | |
| (110,048 | ) | |
| - | | |
| - | | |
| - | | |
| 140,883 | | |
| 30,835 | | |
| - | | |
| 30,835 | |
Reserve
transfers | |
| - | | |
| (3 | ) | |
| - | | |
| - | | |
| - | | |
| - | | |
| 3 | | |
| - | | |
| - | | |
| - | | |
| - | |
Balance on March 31, 2014 | |
| 4,752,078 | | |
| 1,012,812 | | |
| 241,107 | | |
| (10,669 | ) | |
| 30,256 | | |
| 44,561 | | |
| 574,364 | | |
| - | | |
| 6,644,509 | | |
| - | | |
| 6,644,509 | |
The accompanying
notes are an integral part of these consolidated financial statements.
RAÍZEN ENERGIA S.A.
Consolidated statement of changes in shareholders’
equity
Years ended March 31
(in thousands of Reais)
| |
| |
| |
| |
Attributable
to controlling shareholders | |
|
| |
Capital
Reserves | |
| |
Retained
earnings | |
| |
| |
|
| |
Capital
stock | |
Capital
reserve | |
Special
reserve for goodwill | |
Other
comprehensive income | |
Tax
incentive reserve | |
Legal | |
Profit
retention | |
Accumulated
profits (loss) | |
Total | |
Total
shareholders' equity |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
|
Balance on March 31, 2014 | |
| 4,752,078 | | |
| 1,012,812 | | |
| 241,107 | | |
| (10,669 | ) | |
| 30,256 | | |
| 44,561 | | |
| 574,364 | | |
| - | | |
| 6,644,509 | | |
| 6,644,509 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Contributions from (distributions to) shareholders of the Company | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Redeem of preference shares | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Redemption of class B preferred shares | |
| 155,755 | | |
| (164,377 | ) | |
| - | | |
| - | | |
| - | | |
| - | | |
| 1,255 | | |
| - | | |
| (7,367 | ) | |
| (7,367 | ) |
Effect of the reverse merger of Curupay | |
| - | | |
| - | | |
| 2,004 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 2,004 | | |
| 2,004 | |
Effect from affiliates | |
| - | | |
| 992 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 992 | | |
| 992 | |
Constitution of the legal reserve (Note 21.a) | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 5,550 | | |
| - | | |
| (5,550 | ) | |
| - | | |
| - | |
Dividends to shareholders of class B and D preferred shares | |
| 15,221 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| (16,012 | ) | |
| (791 | ) | |
| (791 | ) |
Mandatory minimum dividends (Note 21.b) | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| (1,054 | ) | |
| (1,054 | ) | |
| (1,054 | ) |
Constitution of reserves (Note 21.e) | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 88,383 | | |
| (88,383 | ) | |
| - | | |
| - | |
| |
| 170,976 | | |
| (163,385 | ) | |
| 2,004 | | |
| - | | |
| - | | |
| 5,550 | | |
| 89,638 | | |
| (110,999 | ) | |
| (6,216 | ) | |
| (6,216 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Comprehensive income: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Net profit | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 110,999 | | |
| 110,999 | | |
| 110,999 | |
Gain (loss) on cash flow hedge (Note 27) | |
| - | | |
| - | | |
| - | | |
| 34,284 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 34,284 | | |
| 34,284 | |
Accumulated foreign currency translation adjustments | |
| - | | |
| - | | |
| - | | |
| 535 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 535 | | |
| 535 | |
Actuarial gains (losses)
on post-employment benefit plans | |
| - | | |
| - | | |
| - | | |
| (8,902 | ) | |
| - | | |
| - | | |
| - | | |
| - | | |
| (8,902 | ) | |
| (8,902 | ) |
| |
| - | | |
| - | | |
| - | | |
| 25,917 | | |
| - | | |
| - | | |
| - | | |
| 110,999 | | |
| 136,916 | | |
| 136,916 | |
Balance on March 31, 2015 | |
| 4,923,054 | | |
| 849,427 | | |
| 243,111 | | |
| 15,248 | | |
| 30,256 | | |
| 50,111 | | |
| 664,002 | | |
| - | | |
| 6,775,209 | | |
| 6,775,209 | |
The accompanying notes are an integral
part of these consolidated financial statements.
RAÍZEN ENERGIA S.A.
Consolidated statement of cash flows
Years ended March 31
(in thousands of Reais)
|
2015 |
|
2014 |
|
2013 |
|
Cash flows from operating
activities |
|
|
|
|
|
|
Income before taxes |
(52,393) |
|
188,515 |
|
377,849 |
|
Adjustments to reconcile
net income to net cash from operating activities: |
|
|
|
|
|
|
Depreciation and amortization |
1,908,125 |
|
1,709,935 |
|
1,706,819 |
|
Change in fair value of
biological assets |
32,697 |
|
64,918 |
|
225,021 |
|
Change in fair value of
sugarcane harvested (agricultural products) |
(1,314 |
) |
8,443 |
|
2,725 |
|
Share of loss in equity-accounted
investees |
33,938 |
|
34,435 |
|
23,107 |
|
Gain on capital dilution
of equity interest |
(30,333 |
) |
- |
|
- |
|
Interest, indexation and
exchange variation, net |
1,654,689 |
|
655,018 |
|
341,643 |
|
Losses from sale of property,
plant and equipment |
(10,868 |
) |
(33,813 |
) |
(3,459 |
) |
Impairment of technology
contracts |
55,060 |
|
6,959 |
|
- |
|
Grant revenue for investments
– ICMS |
(59,557 |
) |
(32,090 |
) |
- |
|
Provision for tax, civil
and labor risks, net |
16,013 |
|
25,197 |
|
3,502 |
|
Gain on sale of shares |
(40,366 |
) |
- |
|
- |
|
(Gains) losses from derivatives
financial instruments |
(317,470 |
) |
(40,770 |
) |
1,399 |
|
Impairment on property,
plant and equipment and intangible assets |
9,027 |
|
(5,792 |
) |
- |
|
Others |
5,524 |
|
340 |
|
4,069 |
|
|
|
|
|
|
|
|
Changes in operating assets
and liabilities: |
|
|
|
|
|
|
Trade accounts receivable
and advances from customers (including related parties) |
152,557 |
|
(16,691 |
) |
95,231 |
|
Inventories |
128,505 |
|
(147,487 |
) |
71,201 |
|
Restricted cash |
121,249 |
|
(125,085 |
) |
40,316 |
|
Derivative financial instruments |
(40,768 |
) |
(1,399 |
) |
(12,247 |
) |
Others financial assets |
48,910 |
|
(1 |
) |
- |
|
Judicial deposits |
(48,366 |
) |
(41,257 |
) |
(19,406 |
) |
Trade accounts payable and
advances to suppliers (including related parties) |
(126,723 |
) |
174,016 |
|
35,196 |
|
Taxes and contributions,
net |
(83,506 |
) |
(85,141 |
) |
(119,294 |
) |
Payroll and related charges |
28,647 |
|
9,671 |
|
73,097 |
|
Others, net |
(18,930 |
) |
(26,195 |
) |
37,015 |
|
Income tax and social contributions
paid |
(43,165 |
) |
(10,758 |
) |
(13,658 |
) |
|
|
|
|
|
|
|
Net cash provided by operating
activities |
3,321,182 |
|
2,310,578 |
|
2,870,126 |
|
|
|
|
|
|
|
|
Investing activities: |
|
|
|
|
|
|
Capital contributions to
associates |
(58,964 |
) |
(57,131 |
) |
(80,340 |
) |
Acquisitions, net of acquired
cash |
- |
|
(48,903 |
) |
(108,434 |
) |
Addition to property, plant
and equipment, software and other intangible assets |
(1,389,802 |
) |
(1,505,115 |
) |
(1,403,383 |
) |
Cash from sale of property,
plant and equipment |
14,223 |
|
53,648 |
|
16,251 |
|
Sugarcane planting and cultivation
costs |
(851,411 |
) |
(838,647 |
) |
(922,029 |
) |
Net cash used in investing
activities |
(2,285,954 |
) |
(2,396,148 |
) |
(2,497,935 |
) |
|
|
|
|
|
|
|
Financing activities |
|
|
|
|
|
|
Paid in capital contribution
from shareholders |
8,427 |
|
- |
|
- |
|
Proceeds from debt issuance |
4,593,149 |
|
2,398,715 |
|
1,342,906 |
|
Proceeds from issue of debentures,
net of transaction costs |
- |
|
747,710 |
|
- |
|
Payment of principal of
loans and financing |
(3,518,466 |
) |
(1,959,671 |
) |
(1,542,035 |
) |
Interest paid of loans and
financing |
(481,446 |
) |
(314,643 |
) |
(294,344 |
) |
Financial investments related
to financing (restricted cash) |
22,046 |
|
3,155 |
|
(1,451 |
) |
Prepaid dividends |
(43,417 |
) |
(66,022 |
) |
(8,873 |
) |
Related parties |
408,751 |
|
(712,160 |
) |
689,692 |
|
Others |
- |
|
- |
|
932 |
|
Net cash provided by financing
activities |
989,044 |
|
97,084 |
|
186,827 |
|
Net increase in cash and
cash equivalents |
2,024,272 |
|
11,514 |
|
559,018
|
|
At beginning of year |
1,771,015 |
|
1,759,501 |
|
1,200,483 |
|
At end of year |
3,795,287 |
|
1,771,015 |
|
1,759,501 |
|
|
|
|
|
|
|
|
Supplementary information: |
|
|
|
|
|
|
Investments and financing
transactions which do not involve cash |
|
|
|
|
|
|
Depreciation of costs capitalized
to biological assets |
75,222 |
|
67,339 |
|
72,803 |
|
Financed purchase of property,
plant equipment and other additions |
- |
|
- |
|
(11,905 |
) |
Amounts capitalized on qualified
assets (Notes 13 and 26) |
30,951 |
|
44,296 |
|
41,940 |
|
Present value adjustment
in property, plant and equipment |
3,286 |
|
2,010 |
|
9,476 |
|
Capital increase made by
Cosan and Shell through contribution of assets |
- |
|
- |
|
998,835 |
|
Capital payable (Notes 10
and 21.a) |
- |
|
8,427 |
|
7,927 |
|
Financed acquisition of
TEAS shares (Note 11.a) |
- |
|
- |
|
(23,900 |
) |
Renewal of Term Loan Agreement
(Note 16) |
- |
|
- |
|
907,017 |
|
The accompanying notes are an integral
part of these consolidated financial statements.
RAÍZEN ENERGIA S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
Raízen Energia S.A. (the
“Company”, “Raízen Energia” or “RESA”) is a private limited liability company with
its headquarters in the city and state of São Paulo, Brazil. The Company is controlled indirectly by Royal Dutch Shell
(“Shell”) and Cosan S.A. Indústria e Comércio (“Cosan”) and was incorporated on June 1,
2011. Until November 30, 2012, the Company was a direct subsidiary of Raízen Energia Participações S.A. (“REPSA”).
On November 30, 2012, REPSA was subject to a reverse takeover by RESA.
Raízen is a joint venture
between Shell and Cosan and operates in the ethanol, sugar and energy segment.
On October 21, 2013, the Company
was registered with the Brazilian Securities Commission (“CVM”), as a private limited liability company, Category
B, and was authorized to offer its own securities in regulated securities markets, with the exception of shares, share deposit
certificates or securities conferring the right to acquire such securities upon conversion or the exercise of their inherent rights
(Note 16).
The principal business activity
of RESA is the production and domestic and international trading of sugar and ethanol, through its controlled companies Raízen
Trading LLP and Raízen International Universal Corporation, and the cogeneration of energy produced from sugarcane bagasse
in its 24 plants, which are located in the south central region of Brazil.
On January
15, 2015, the Company announced that the industrial activities of the Bom Retiro plant, located in Capivari (SP) would be suspended
for two years due to the low availability of sugar cane in the region – there was an acute shortage of sugar cane due to
drought. The hibernation of these industrial activities is intended to optimize the production of the other Raízen Energia
plants in that area: the raw materials previously allocated to the Bom Retiro unit have been redirected to them. The agricultural
operation of Raízen’s sugar cane providers in the region will not be impacted, and nor will RESA’s planned
production. Also, no adjustment for impairment was required due to this temporary hibernation of the plant.
It takes from 12 to 18 months
for the sugarcane crop to be ready for harvest. The harvest generally begins in April or May each year and ends in November or
December, at which time sugar and ethanol is produced. The product is sold throughout the year, with no seasonal variations, subject
to normal market variations in supply and demand. Due to its production cycle, the Company's fiscal year begins on April 1 and
ends on March 31 of each year.
During
the year ended March 31, 2015, the Company and its subsidiaries have undergone a corporate restructuring, which resulted in the
formation of 11 new thermoelectric companies ("UTE's"). The Company and its subsidiaries subsidiaries
increased the capital of 10 of these new companies by transferring
to them net assets relating to cogeneration activities. The updated consolidation base of the Company and details of corporate
restructuring are discussed in Notes 2.2 and 11, respectively.
The consolidated financial statements
were approved by the Company's Board of Directors on June 22, 2015.
RAÍZEN ENERGIA S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
| 2. | Significant accounting
policies |
The consolidated financial
statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by
the International Accounting Standards Board (“IASB”)
The consolidated financial statements
were prepared using the historical cost basis, except for the determination of assets and liabilities such as financial instruments
(including derivatives) and biological assets, which are measured at fair value.
| b) | Functional
currency and presentation currency |
The consolidated financial statements
are presented in Brazilian Reais. The Brazilian Real is the functional currency of RESA. and its subsidiaries located in Brazil,
as it is the currency of the primary economic environment in which they operate, generate and expend cash. The functional currency
for the subsidiaries located outside Brazil is the U.S. dollar.
| c) | Judgments,
estimates and significant accounting assumptions |
In preparing these consolidated
financial statements, management has made judgments, estimates and assumptions that affect the application of the Company’s
accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these
estimates.
Estimates and underlying assumptions
are reviewed on an ongoing basis. Changes in estimates are recognized prospectively.
If there is a significant change
in the facts or circumstances on which the estimates and assumptions used are based, this may have a material impact on the Company’s
results and financial condition.
The significant accounting estimates
and assumptions are as follow:
Income tax, social contributions
and other taxes payable
The Company is subject to income
tax in all countries in which it operates. Significant judgment is required in determining the provision for income taxes in these
various countries.
For many operations, the final
tax determination is uncertain. The Company also recognizes provisions to cover certain situations where it is likely that additional
taxes are owed. When the final outcome of these matters differs from the initially estimated and recorded values, these differences
affect current and deferred tax assets or liabilities in the period in which the determination is made.
Tax
incentive – ICMS
The
Company has tax incentive program in specific States, which relates to the financing of part of the ICMS payments. The utilization
of this tax incentive by the Company is subject to compliance with all obligations estabilished by the government and the conditions
are under control by the Company.
The tax incentive benefits are recorded as other operating income, see Note 25.
RAÍZEN ENERGIA S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
Deferred income tax and
social contributions
Income tax and deferred social
contributions are recognized for all unused tax losses, to the extent that it is probable that taxable income will be available
to allow the use of these tax losses. Significant management judgment is required to determine the value of the income tax and
deferred social contributions that can be recognized, based upon the likely timing and level of future taxable profits together
with future tax planning strategies.
The taxes on income deferred
assets and liabilities are presented net in the balance sheet only when there is a legal right and an intention to offset them
upon the calculation of current taxes, usually related to the same legal entity and the same taxation authority. For details about
deferred taxes see Note 18.
Biological assets
Biological assets are measured
at fair value as at the date of each balance sheet, and the effects of changes in fair value from year to year are allocated directly
to the cost of products sold. For more details on the premises applied, see Note 12.
The fair value of
the agricultural products are measured through the review of the average production cost of the harvested sugarcane in relation
to its market value.
Property, plant and equipment
and intangible assets, including goodwill
The accounting treatment of the
fixed assets and intangible assets includes the use of estimates to determine the useful life period for the purposes of their
depreciation and amortization, in addition to their fair value at the acquisition date, in particular for assets acquired in business
combinations.
The Company annually reviews
the existence of indicators of impairment on property, plant and equipment and intangible assets.
The determination of the recoverable
amount of the cash-generating unit to which goodwill has been allocated also includes the use of assumptions and estimates, and
requires a significant degree of judgment.
Provision for tax, civil,
labor and environmental claims
The Company and its subsidiaries
recognized a provision for probable losses for tax, civil, labor and environmental risks. The assessment of probability of loss
includes assessing the available evidence, the hierarchy of laws, available case law, recent court decisions and their relevance
in the legal system, as well as the evaluation made by outside counsel. These provisions are reviewed and adjusted to take into
account changes in circumstances, such as applicable statutes of limitation, conclusions of tax audits or additional exposures
identified based on new matters or court decisions.
Fair value of financial
instruments
When the fair value of the financial
assets and liabilities presented in the balance sheet cannot be obtained in active markets, it is determined using valuation techniques,
including the discounted cash flow method. The data for these methods are based on market conditions, when this is possible. However,
where this is not feasible, a certain level of judgment is required to determine the fair value. The judgment includes consideration
of the data used—for example, liquidity risk, credit risk and volatility. Changes in assumptions relating to these factors
could affect the reported fair value of financial instruments. For more details about the financial instruments see Note 27.
RAÍZEN ENERGIA S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
| 2.2 | Basis
of consolidation |
The consolidated financial statements
include the financial statements of Raízen Energia and its subsidiaries for the years ended March 31, 2015 and 2014. The
subsidiaries are listed below:
|
|
Direct
and indirect interests |
|
|
03.31.2015 |
|
03.
31.2014 |
Agrícola
Ponte Alta Ltda. |
|
100.00% |
|
100.00% |
Agropecuária
Santa Hermínia Ltda. |
|
100.00% |
|
100.00% |
América
Trading Investments |
|
100.00% |
|
100.00% |
Benálcool
Açúcar e Álcool Ltda. |
|
100.00% |
|
100.00% |
Bioenergia
Araraquara Ltda. (Notes 1 e 11) |
|
100.00% |
|
- |
Bioenergia
Barra Ltda. (Notes 1 e 11) |
|
100.00% |
|
- |
Bioenergia
Caarapó Ltda. (Notes 1 e 11) |
|
100.00% |
|
- |
Bioenergia
Costa Pinto Ltda. (Notes 1 e 11) |
|
100.00% |
|
- |
Bioenergia
Gasa Ltda. (Notes 1 e 11) |
|
100.00% |
|
- |
Bioenergia
Jataí Ltda. (Notes 1 e 11) |
|
100.00% |
|
- |
Bioenergia
Maracaí Ltda. (Notes 1 e 11) |
|
100.00% |
|
- |
Bioenergia
Rafard Ltda. (Notes 1 e 11) |
|
100.00% |
|
- |
Bioenergia
Serra Ltda. (Notes 1 e 11) |
|
100.00% |
|
- |
Bioenergia
Tarumã Ltda. (Notes 1 e 11) |
|
100.00% |
|
- |
Bioenergia
Univalem Ltda. (Notes 1 e 11) |
|
100.00% |
|
- |
Raízen
Centroeste Açúcar e Álcool Ltda. (2) |
|
100.00% |
|
100.00% |
Curupay
Agroenergia Ltda.(1) |
|
- |
|
100.00% |
Houghton
Venture Capital Ltd. |
|
100.00% |
|
100.00% |
Raízen
Araraquara Açúcar e Álcool Ltda. |
|
100.00% |
|
100.00% |
Raízen
Ásia PT Ltd. |
|
100.00% |
|
100.00% |
Raízen
Biotecnologia S.A. |
|
100.00% |
|
100.00% |
Raízen
Caarapó Açúcar e Álcool Ltda. |
|
100.00% |
|
100.00% |
Raízen
Cayman Limited |
|
100.00% |
|
100.00% |
Raízen
Energy Finance Ltd. |
|
100.00% |
|
100.00% |
Raízen
International Universal Corp. |
|
100.00% |
|
100.00% |
Raízen
North América, Inc. |
|
100.00% |
|
100.00% |
Raízen
Paraguaçú Ltda. |
|
100.00% |
|
100.00% |
Raízen
Tarumã Ltda. |
|
100.00% |
|
100.00% |
Raízen
Trading LLP |
|
100.00% |
|
100.00% |
TEAS
Terminal Exportador de Álcool de Santos Ltda. |
|
100.00% |
|
100.00% |
|
|
|
|
|
|
|
|
| (1) | Company incorporated
by TEAS, on October 30, 2014. |
| (2) | Previously denominated
“Cosan Centroeste Açúcar e Álcool Ltda.” |
The subsidiaries are fully consolidated
as from the date that control commences, and they continue to be consolidated until the date that control ceases. The financial
statements of the subsidiaries are prepared for the same disclosure period as that applied by the Company, using consistent accounting
policies. The balances kept among consolidated companies, revenues, expenses and unrealized gains and losses from transactions
among consolidated companies are fully eliminated.
A change in the participation
in a subsidiary that does not result in a loss of control is booked as a transaction between shareholders in shareholders’
equity.
The Company uses the acquisition
method to record business combinations. The consideration transferred for the acquisition of a subsidiary is the fair value of
the transferred assets, incurred liabilities and equity instruments issued by the Group. The transferred consideration includes
the fair value of assets and liabilities derived from the contingent consideration agreement, when applicable. Costs related to
acquisition are recorded in the income statements as incurred. The identifiable assets acquired and the liabilities and contingent
liabilities assumed in a combination of businesses are measured initially at their fair values on the date of the acquisition.
The Company recognizes a non-controlling interest in the acquired entity by its fair value and the proportionate portion of the
participation of the non-controlling interest in the fair value of the net assets of the acquired entity. The measurement of non-controlling
interest is assessed for each acquisition.
RAÍZEN ENERGIA S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
The excess of the transferred
consideration and of the fair value on the date of acquisition of any previous equity participation in the acquired entity, in
relation to the fair value of the participation of the Company of identifiable net assets acquired, is recorded as goodwill. When
applicable, in an acquisition to which the Group attributes fair value to non-controlled shareholders, the assessment of goodwill
also includes the value of non-controlled interest in the acquired entity, and the goodwill is assessed considering the Group’s
interest and non-controlling interests. When the transferred consideration is less than the fair value of the net assets of the
controlled subsidiary acquired, the difference is recognized directly in the statement of income for the fiscal year.
Adjustments are made, when necessary,
to bring accounting policies into line with those adopted by the Company.
| 2.3 | Summary
of the significant accounting practices |
The accounting practices described
below have been applied consistently in the years presented in the consolidated financial statements.
Revenues derived from the sale
of products and goods, including resale of products in the external market made by subsidiaries of Raízen Trading LLP and
Raízen International Universal Corporation, are recognized when the entity transfers to the buyer significant risks and
benefits inherent to the ownership of products and goods, and when it is probable that economic benefits will be generated by
the transaction in favor of the Company. The sale prices are fixed based on sales orders or agreements. Goods or services for
which revenue is deferred are recorded under other obligations, and are recorded as revenue from delivery of goods or services
rendered.
Revenue from the sale of power
generation is recorded based on the guaranteed energy and tariffs specified in the terms of supply agreements or the prevailing
market price, as applicable. Electric power energy produced and sold through auction is initially recorded as deferred revenue,
and is recognized in the statement of income when it is available for the use of customers.
The revenue is presented net
of taxes (Federal Excise Tax on Manufactured Goods (“IPI”), Tax on the Circulation of Goods and Services (“ICMS”),
Employees’ Profit Participation Program (“PIS”), Tax for Social Security Financing (“COFINS”), National
Social Security Institute (“INSS”) and others), and net of returns, abatements and discounts, as well as elimination
of sales among companies in the Group.
| b) | Transactions
in foreign currency |
Transactions in foreign currency
are initially recognized by Company entities at the functional currency rate on the transaction date, or on the valuation dates,
when the items are revalued.
Monetary assets and liabilities
denominated in foreign currency are converted into Brazilian currency using the exchange rate on the date of the respective balance
sheets, and exchange gains or losses resulting from the settlement of these transactions and conversion at the exchange rates
at the end of the year are recognized in the statement of income, under financial income, except when classified as hedge accounting,
when they are deferred in shareholders’ equity.
RAÍZEN ENERGIA S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
Non-monetary items measured by
historic cost in foreign currency are converted at the conversion rate on the initial date of the transaction. Non-monetary items
measured at their fair value in foreign currency are translated using the exchange rates in effect on the date on which the fair
value is determined.
| c) | Financial
instruments - initial recognition and subsequent measurement |
(i) Financial assets
Initial recognition and
measurement
Financial assets are classified
in the following categories: measured at fair value through statement of income, held to maturity, available for sale, loans and
receivables. The Company determines the classification of its financial assets at initial recognition.
Financial assets are initially
recognized at fair value plus, in the case of investments not designated as being at fair value through income, the transaction
costs directly attributable to the acquisition of the financial assets.
Financial assets include cash
and cash equivalents, restricted cash, trade accounts receivable, derivative financial instruments, related parties and other
financial assets.
Subsequent measurement
The subsequent measurement of
financial assets depends on their classification, which may be as follows:
Financial assets at fair
value through profit or loss
Financial assets measured at
fair value through the statement of income include financial assets maintained for negotiation and assets designated at initial
recognition at fair value through income. They are classified as held for trading if they originated for the purpose of sale or
repurchase in the short-term. Derivatives are measured at fair value through statement of income, except for those designated
as hedge instruments. Interest, inflation adjustments, exchange variations and variations resulting from valuation at fair value
are recognized in the statement of income as finance income.
Held-to-maturity financial
assets
This includes those non-derivative
financial assets with fixed payments or determinable payments with defined maturity which the Company has the firm intention,
and the ability, to maintain until the maturity date. Interest, inflation adjustments, exchange variations, less impairment losses,
where applicable, are recognized in the statement of income when incurred and presented as finance income.
Available-for-sale financial
assets
Available for sale financial
assets are non-derivative financial assets that are designated in this category on initial recognition or not classified in any
of the above categories. They are presented as non-current assets, unless management intends to settle the investment up to 12
months after the balance date.
Loans and receivables
Loans and receivables are non-derivative
financial assets with fixed or determinable payments that are not quoted in an active market. After initial measurement, these
financial assets are recorded at amortized cost using the effective interest method (effective interest rate), less impairment
loss. The amortized cost is calculated taking into account any discount or premium in the acquisition and taxes or costs incurred.
The amortization of the effective interest is included in financial revenues or the expenses line in the statement of income.
RAÍZEN ENERGIA S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
Derecognition (write-off)
A financial asset is written
off when:
| · | the
right to receive cash flows from assets expires; and |
| · | the
Group has transferred its rights to receive cash flows from the asset or has assumed
an obligation to settlethe cash flows received in full, without significant delay, to
a third party under a transfer agreement; and (a) the Group substantially transfers all
the risks and benefits of the asset or (b) the Group does not substantially transfer
all the risks and benefits relating to the asset, but transfers control over it. |
Impairment
of financial assets
The Company reviews on the balance
sheet dates if there is any objective evidence that determines whether the financial assets or group of financial assets are recoverable.
A financial asset or group of financial assets is considered to be impaired if, and only if, there is objective evidence that
its value is unrecoverable as the result of one or more events that have taken place since the asset was first recognized (a “loss
event”) and this loss event affects the estimated future cash flow of the financial assets, or group of financial assets,
to an extent that can be reasonably estimated.
The criteria that the Group uses
to determine whether there is objective evidence of impairment loss include:
| (i) | significant
financial difficulty of the issuer or obligor; |
| (ii) | a
breach of contract, such as a default or delinquency in interest or principal payments; |
| (iii) | the
Company, for economic or legal reasons connected with the financial difficulties of the
borrower, extends a concession to the borrower that a creditor would not normally consider; |
| (iv) | it
becomes likely that the borrower will declare bankruptcy or file for some other type
of financial reorganization; |
| (v) | the
disappearance of an active market for a financial asset due to financial problems; or |
| (vi) | observable
data indicating that there is a measurable reduction in estimated future cash flows from
a portfolio of financial assets, dating from the initial recognition of such assets,
even if the reduction cannot yet be identified in respect of individual financial assets
in the portfolio, including: |
| (a) | adverse
changes in the payment situation of borrowers of loans contained in the portfolio; and |
| (b) | country-wide
or local economic conditions which are correlated with defaults on assets in the portfolio. |
If in a subsequent period the
amount of the loss due to impairment reduces, and the reduction can be objectively related to an event that occurred after the
impairment was recognized (such as improvement in the credit rating of the debtor), the reversal of such loss recognized previously
will be recognized in the statement of income.
RAÍZEN ENERGIA S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
(ii) Financial liabilities
Initial recognition and
measurement
Financial liabilities are classified
as financial liabilities at fair value through income; amortized cost; or derivatives representing an effective hedging instrument,
as the case may be. The Company determines the classification of its financial liabilities at initial recognition.
Financial liabilities are recognized
initially at fair value and, in the case of loans and financing, are adjusted upwards by the directly related transaction costs.
The Company’s financial
liabilities include loans and financing, derivative financial instruments, trade account payables and related parties.
Subsequent measurement
Subsequent measurement of financial
liabilities depends on their classification, which may be as follows:
Financial liabilities
at fair value through statement of income
These include financial liabilities
usually traded before maturity, liabilities designated at initial recognition at fair value through statement of income and derivatives,
except for those designated as hedge instruments. Interest, inflation adjustments, exchange variations and variations resulting
from valuation at fair value, when applicable, are recognized in the statement of income when incurred.
Amortized costs
After initial recognition, interest-bearing
borrowings and financing are subsequently measured at amortized cost, using the effective interest method. Gains and losses are
recognized in the income statement when liabilities are written-off, as well as during the amortization process by applying the
effective interest method.
Derecognition (write-off)
A financial liability is written
off when the obligation is revoked, cancelled or expired.
(iii) Offsetting of
financial instruments – net presentation
Financial assets and liabilities
are shown net in the balance sheet if, and only if, there is a current and enforceable legal right to set off the amounts recognized,
and if there is an intention to offset them, or to realize the asset and settle the liability simultaneously.
(iv) Fair value of financial
instruments
The fair value of financial instruments
actively traded in organized financial markets is determined on the basis of the purchase price quoted on the market at the close
of business on the balance sheet date, without deducting transaction costs.
The fair value of financial instruments
for which there is no active market is determined using valuation techniques. These techniques may include the use of recent market
transactions (at arm’s length); reference to the current fair value of another similar instrument; a discounted cash flow
analysis; or other valuation models.
RAÍZEN ENERGIA S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
For an analysis of the fair value
of financial instruments and more details about how they are calculated see Note 27.
(v) Derivatives and
hedge accounting
Initial recognition and
subsequent measurement
The Company uses derivatives,
such as currency and commodity forward contracts and interest rate swaps, to hedge against the risk of fluctuations in exchange
rates, the risk of fluctuations in commodities prices and the risk of fluctuations in interest rates, respectively. Derivatives
designated as hedge transactions are initially recognized at fair value on transaction date, and subsequently remeasured also
at fair value. Derivatives are stated as financial assets when the fair value of the instrument is positive, and as financial
liabilities when the fair value is negative.
Any gains or losses on changes
in the fair value of derivatives during the year are passed directly to the statement of income, except for the effective portion
of cash flow hedges, which is recognized directly in shareholders’ equity under other comprehensive income.
For the purposes of hedge accounting,
the following classifications are used:
| · | a
fair value hedge to protect against exposure to changes in the fair value of assets and
liabilities recognized, or unrecognized but committed, or in an identifiable part of
such asset, liability or firm commitment, which can be attributed to a specific risk
and could affect the results; |
| · | a
cash flow hedge to protect against changes in cash flows attributable to a specific risk
associated with a recognized asset or liability, or with a proposed transaction that
is highly likely to take place, and which could affect the results; or |
| · | a
net investment hedge in an overseas operating unit. |
Upon the initial recognition
of a hedge relationship, the Company makes a formal classification and documents the hedge relationship to which it intends to
apply the hedge accounting, and the purpose and risk management strategy used by management for hedging purposes.
The documentation includes the
identification of the hedge instrument, the item or transaction to which it applies, the nature of the risk hedged, details of
the anticipated efficacy of the hedge relationship and the way in which the Company will assess the efficacy of the hedging instrument
in order to offset the exposure to changes in the fair value of the hedged item or the cash flows related to it. In the case of
cash flow hedges, a demonstration that the proposed transaction to be hedged is highly likely to take place, and the anticipated
timing of transfer of gains or losses on the hedging instruments from shareholders' equity to income, are also included in the
document describing the hedge.
It is expected that such hedges
will be extremely efficient in offsetting changes in fair value or in cash flows, and the hedges are continually assessed to confirm
that this is the case throughout all the base periods to which they apply.
Hedges that meet the criteria
for hedge accounting are recorded as follows:
Cash flow hedge
The effective portion of the
gain or loss on the hedge instrument is recognized directly in shareholders’ equity, under other comprehensive income, while
the ineffective portion is recognized immediately in financial income.
RAÍZEN ENERGIA S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
Amounts booked under other comprehensive
income are transferred immediately to the statement of income when the hedged transaction affects the results, e.g. when the financial
revenues or expenses to which the hedge applies are recognized, or when an anticipated sale takes place. When the hedged item
is the cost of a non-financial asset or liability, the amounts booked in shareholders’ equity are transferred to the initial
book value of the non-financial asset or liability.
If the transaction forecast,
or the firm commitment, is not yet expected, the amounts previously recognized in shareholders’ equity are transferred to
the statement of income. If the hedging instrument expires or is sold, closed out or exercised without being replaced or rolled
over, or if its classification as a hedge is revoked, gains or losses previously recognized in comprehensive income are maintained
as deferred items in shareholders’ equity, in the reserve for other comprehensive income, until the anticipated transaction
or firm commitment affects the results.
The Group uses forward exchange
contracts to protect against its exposure to exchange risk related to anticipated and highly probable future transactions and
to firm commitments, and forward commodities contracts to protect against its exposure to volatility in commodity prices. See
Note 27 for more details.
| d) | Cash
and cash equivalents |
Cash and cash
equivalents include cash on hand, bank deposits and highly liquid investments, with maturities of 90 days or less from the acquisition
date and which are readily convertible into a known amount of cash and subject to insignificant risk of change in fair value.
| e) | Trade
accounts receivable |
Trade notes receivable correspond
to the amounts receivable due to sale of goods or rendering of services in the regular course of the Company’s activities.
If the due date for payment is one year or less, the accounts receivable are classified as current assets. Otherwise they are
shown as non-current assets.
Trade accounts receivable are
recognized initially at fair value and subsequently measured at amortized cost, using the effective interest rate method, less
provision for doubtful accounts (“PDD”) or impairment.
Inventories are evaluated at
the average cost of acquisition of production, not exceeding the net realizable value, except for RESA’s inventories of
agricultural products, which are measured at fair value. The cost of finished products and products in progress comprises the
costs of projects, raw materials, direct labor, other direct costs and related direct expenses of production (based on the regular
operational capacity), excluding loans costs. Net realizable value corresponds to the selling price in the ordinary course of
business, less estimated completion costs and estimated costs necessary to make the sale.
Sugarcane at the time of cutting
is considered to be an agricultural product and is measured at fair value, less selling expenses, depending on the amounts cut
and valued at the accumulated Council of Sugarcane, Sugar and Alcohol Producers of the State of São Paulo (“CONSECANA”)
value for the corresponding month. The fair value of sugarcane cut becomes the cost of raw materials used in the sugar and ethanol
production process.
Provision for storeroom inventories
with low turnover or which are obsolete is established when there has been no movement within a determined period of time, and
when the storeroom inventories are not considered by management to be strategic.
RAÍZEN ENERGIA S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
| g) | Investments
in associates and joint ventures |
Investments in a company over
which the Company does not exercise control, but over which it exercises significant influence, are booked by the equity accounting
method. Based on the equity accounting method, investments are recorded in the balance sheet at the cost, plus the changes after
acquisition of the corporate interest.
The statement of income reflects
the share of income in the transactions of affiliated companies based on the equity accounting method. When the changes are directly
recognized in the shareholders’ equity of affiliated or subsidiary, the Company will recognize its share in the variations,
and will disclose this fact, in such a case, in the statement of changes in shareholders’ equity.
After the application of the
equity accounting method, the Company determines if it is necessary to recognize loss of recoverable value added on investment.
The Group determines, at each closing date of the balance sheet, if there is objective evidence that the investment in the affiliate
suffered impairment loss. If this is the case, the Company calculates the amount of impairment as the difference between the recoverable
amount of the affiliate and the book value, and recognizes the amount in the statement of income.
When there is a significant loss
of influence over an affiliate, the Company immediately values and recognizes the investment at fair value.
Unrealized gains resulting from
transactions between the Company and affiliates and joint ventures are eliminated in proportion to the Company’s interest
in the investee. Unrealized losses are eliminated, but only up to the point where there is no evidence of loss due to impairment.
The accounting policies of associates are changed when necessary, to ensure consistency with the policies adopted by the Company.
Sugarcane plantations are recorded
as biological assets.
The cane crop is measured at
fair value, excluding the land on which it is planted, using the discounted cash flow method.
Harvesting generally begins in
April of each year, and ends in November or December
For sugarcane, the Company uses
projected future cash flows according to the productivity cycle forecast for each harvest, taking into account the estimated useful
life of each plantation, the prices for total recoverable sugar, estimated productivity and the estimated costs of production,
harvesting, loading and transport for each hectare planted.
Changes in fair value from year
to year are allocated to the cost of products sold.
Any land owned by the Company
where the biological assets are produced appears as property, plant and equipment.
| i) | Property,
plant and equipment |
Property, plant and equipment
items are measured at cost of acquisition or construction, less accumulated depreciation and impairment losses, when applicable.
Cost includes expenditures that
are directly attributable to the acquisition of an asset. The costs of assets constructed by the Company includes material and
direct labor costs and any other costs incurred to put the asset in the required place and condition in order to operate that
asset. Borrowing costs are capitalized as a component of construction in progress, pursuant to IAS 23, using the weighted average
interest rate of the Company’s debt at the date of capitalization.
RAÍZEN ENERGIA S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
The Company performs scheduled
maintenance activities at their facilities on a yearly basis, usually, from January through March, for the purpose of inspecting
and replacing components. Primary maintenance costs include labor, materials, contractor costs and overhead expenses allocated
during the inter-harvest season. Costs are capitalized as parts and components, in property, plant and equipment, being fully
amortized in the next harvest season.
The cost of equipment that needs
to be replaced every year is recorded as part of the equipment cost and depreciated over the next harvest season. Regular maintenance
costs are accounted as expenses when incurred since replaced components do not enhance crushing capacity nor introduce any improvements
to equipment.
Depreciation is calculated in
order to write off the cost of items of property, plant and equipment less their estimated residual values using the straight-line
method over their estimated useful lives, and is generally recognized in profit or loss.
In accordance with IAS 16 / CPC
27, for the year ended March 31, 2015, in conjuction with a company that specializes in such evaluations, the Company carried
out an evaluation of the useful lives of its fixed assets, using the direct comparative method and drawing on market data. This
process indicated the need for a change in the useful lives and annual depreciation rates of the Company’s assets.
Because this represented a change
in accounting estimates, the effects of these changes were recorded prospectively from April 2014. These changes, individually,
represent both an increase or a decrease, depending on the case, of the useful lives applied to the assets, as compared to the
previous useful lives. The changes generated a total reduction of R$ 9,554 in the depreciation expense for the year ended March
31, 2015.
Property, plant and equipment |
|
Useful lives |
|
Annual rate |
Buildings and improvements |
|
25 years |
|
2.38% |
Machinery and equipment |
|
22.83 years |
|
4.67% |
Furniture and fixtures |
|
10 years |
|
10.22% |
IT equipment |
|
5 years |
|
20.27% |
Vehicles, vessels and aircraft |
|
13.04 years |
|
7.67% |
At the inception of an arrangement,
the Company determines whether the arrangement is, or contains, a lease.
Assets held by the Company under
leases that transfer to the Company substantially all of the risks and rewards of ownership are classified as finance leases.
The leased assets are measured initially at an amount equal to the lower of their fair value and the present value of the minimum
lease payments. Subsequent to initial recognition, the assets are accounted for in accordance with the accounting policy applicable
to that asset.
Minimum lease payments made under
finance leases are apportioned between the finance expense and the reduction of the outstanding liability. The finance expense
is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance
of the liability.
Assets held under other leases
are classified as operating leases and are not recognized in the Company’s statement of financial position.
RAÍZEN ENERGIA S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
Payments made under operating
leases are recognized in profit or loss on a straight-line basis over the term of the lease. Lease incentives received are recognized
as an integral part of the total lease expense, over the term of the lease.
i) Goodwill
Goodwill is represented as the
positive difference between the amount paid and/or payable on the acquisition of a business and the net fair value of the assets
and liabilities of the acquiree. Goodwill on the acquisition of subsidiaries is accounted for as "intangible assets"
in the consolidated financial statements. In the case of the determination of negative goodwill, the amount is accounted for as
gain in profit or loss for the year on the acquisition date.
The goodwill is maintained at
its value cost, after deduction of related impairment, if there is any. The goodwill is tested on an annual basis to verify impairment.
For testing purposes the recoverable amount, the goodwill acquired in a combination of businesses, is, from the acquisition date,
allocated to each one of the cash-generating units of the Company that are expected to benefit from the synergies of the combination,
irrespective of when other assets or liabilities of the target are assigned to those units.
ii) Intangible assets with
defined useful lives
Intangible assets with definite
useful lives are measured by the cost after deduction of accumulated amortization and of losses due to impairment loss, when applicable.
As at March 31, 2015 and 2014,
the annual amortization rates of intangible assets were as follows:
Intangible
asset |
|
Annual
rate |
Software
licenses |
|
20% |
Land
lease agreements |
|
9% |
Sugarcane
supply agreements |
|
10% |
Right
to use public concessions |
|
20% |
Others |
|
38% |
Useful lives and residual values
are reviewed at each reporting date and adjusted if appropriate.
| l) | Impairment
of non-financial assets |
The Company annually assesses
whether there are indicators of impairment of an asset. If these impairment indicators are identified, the Company estimates the
recoverable amount of the asset. The recoverable amount of an asset is the higher of: (a) its fair value less costs to sell;
and (b) its value in use. The value in use is equivalent to the discounted cash flows (before taxes) arising from the continuing
use of the asset until the end of its useful life.
Regardless of the existence of
indicators of impairment, the goodwill and intangible assets with indefinite useful lives are tested for impairment at least once
a year.
When the carrying amount of an
asset exceeds its recoverable value, the impairment loss is recognized as operational expenses in the income statement.
The borrowing cost related to
the acquisition, construction or production of an asset which necessarily requires a significant period of time to be concluded
for the purposes of use or sale, are capitalized as part of the cost of the corresponding asset. The borrowing cost includes interest
and other costs incurred by an entity in relation to the loans.
RAÍZEN ENERGIA S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
A provision is established when:
(i) the Company has a current and not present obligation as a result of the events that have already occurred; (ii) it is probable
that an output of resources will be necessary to settle the obligation; and (iii) the value can be precisely estimated.
The Company has a defined contribution
plan and defined benefits plan, which provide a supplementary private pension for all of its employees.
The Company recognizes an employee
benefit liability on the basis of a actuarial model that considers a number of factors. These factors are determined based on
actuarial calculations that use certain assumptions to determine the cost (income) net for the pension plans.
The actuarial gains and losses
arising from adjustments and changes in the actuarial assumptions are recorded directly in equity as other comprehensive income
when they occur.
The past costs of services are
immediately recognized in income.
The Company records a provision
when it is contractually required to do so, or when there is a precedent that has created a constructive obligation.
Revenues (expenses) of income
tax and social contributions for the year include current and deferred taxes. Income tax is recognized in the statement of income,
except to the extent that it is related to items recognized directly in shareholders’ equity or in the comprehensive income.
In this case, the tax is also recognized in shareholders’ equity or comprehensive income.
The charges of income taxes,
which includes income tax and social contributions are calculated based on tax laws issued or substantially issued on the date
of the balance sheet in the countries in which the Company’s entities act and generate taxable profits. Management periodically
evaluates the positions taken by the Company in income tax returns with respect to situations in which applicable tax regulations
are subject to interpretation; and it defines a provision, when applicable, based on the estimated payment amounts payable to
the tax authorities.
The taxation on net income comprises
income tax and social contributions. Income tax is levied at the rate of 15%, plus a 10% surcharge on any income that exceeds
R$240 in a period of 12 months, while the social contributions are levied at the rate of 9% on taxable income, recognized on an
accrual basis.
Overall, the Company is subject
to a theoretical income tax rate of 34%.
Deferred income tax and social
contributions relating to tax losses, negative bases for social contributions and temporary differences, are shown net in the
balance sheet when there is a legal right to, and the intention to, offset them when current taxes are calculated, and when they
are generally related to the same legal entity and the same tax authority. Therefore, deferred tax assets and liabilities relating
to different entities, or in different countries, are generally shown separately and not as a net amount. Deferred tax is calculated
on the basis of rates forecast for the time when the tax is payable, and this is reviewed annually.
Tax credits are recognized only
to the extent it is likely that a taxable basis will exist against which interim differences may be used.
RAÍZEN ENERGIA S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
Advances or amounts subject to
offsetting are reported in current and non-current assets, in accordance with their estimated realization.
| q) | Capital
and shareholders’ compensation |
The capital corresponds to the
value obtained in the issuing of common and preferred shares. Additional costs directly attributable to the issuing of shares
are recognized as a deduction from equity, net of taxes effects.
Class A preferred shares, like
common shares, entitle the holder to one vote on resolutions at the Company general meetings, and to a fixed annual dividend of
R$0.01 (one cent).
Class B and C preferred comprise
shares issued by the Company intended as reimbursement for assets, represented mainly by tax benefits to be used by the Company,
contributed by the shareholders Cosan and Shell. The Company redeems the preferred shares as the tax benefits are used.
Class D are not entitled to vote
but are entitled to receive an annual fixed dividend, to the shareholder Shell.
Remuneration to shareholders
is made in the form of dividends and / or interest on equity based on the limits set out in the Company's bylaws and the applicable
laws.
Business combinations are accounted
for using the acquisition method. The identifiable assets, liabilities and contingent liabilities of the acquired entity or business
are measured at fair value for the purposes of calculating and recognizing the goodwill originating in a transaction. Goodwill
represents the excess of the cost of the acquisition over the Company's interest in the net fair value of identifiable assets,
liabilities and contingent liabilities of the acquired company. If the consideration is less than the fair value of the assets,
liabilities and contingent liabilities acquired the difference is recognized in the income statement.
An operating segment is a component
of a company that carries out business activities from which it generates revenues and for which it incurs expenses, including
revenues and expenses arising from intercompany transactions. When making decisions a company’s management reviews financial
information relating to its operating segments.
The Company has a single business
segment: Ethanol, Sugar and Bioenergy, as indicated in Note 23.
| 2.4 | Adoption
of new IFRS and International Financial Reporting Interpretations Committee (IFRIC) Interpretations
applicable to the consolidated financial statements. |
New accounting pronouncements
of the IASB and interpretations of the IFRIC have been published and/or revised. The most relevant of these for the Company are
the following:
| • | IFRS 9 –
Financial Instruments – Classification and Measurement |
IFRS 9 deals with the classification,
measurement and recognition of financial assets and liabilities.
IFRS 9 was issued in November
2009 and October 2010, and substitutes parts of IAS 39 relating to the classification and measurement of financial instruments.
IFRS 9 takes effect from January 1, 2018. IFRS 9 requires that financial assets be classified in two categories: measured at fair
value and measured at amortized cost. The category is determined at the time of initial recognition. The classification depends
on the entity's business model and the contractual characteristics of the cash flow of the financial instruments. The standard
maintains most of the requirements of IAS 39 in respect of financial liabilities. The main change is that in cases where the fair
value option is adopted for financial liabilities, the portion of change in fair value that is due to the credit risk of the entity
itself is registered in other comprehensive income, instead of in the statement of income—except when this results in an
accounting mismatch. The Company believes that this standard will not produce significant impacts on the quarterly financial information
and the Company's annual financial statements, because no financial liability was not identified at fair value that could be impacted
by the Company's credit risk.
RAÍZEN ENERGIA S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
| · | IFRS
15 – Revenue from Contracts with Customers |
On May 28, 2014, IFRS 15 –
Revenue from Contracts with Customers was issued. IFRS 15 determines a comprehensive model of revenue accounting for contracts
with customers and replaces the current revenue recognition guidance, which currently takes various norms and is subject to varying
interpretations within IFRS. The fundamental principle of IFRS 15 is that an entity must recognize revenue from the transfer of
goods or services by measuring the value that the entity expects to be entitled to in exchange for those goods or
services.
Application of this new standard
is mandatory for annual reporting periods starting from January 1, 2017. Earlier application is permitted. Management believes
that this standard will not produce significant impacts on consolidated financial statements of the Company.
| · | IAS
16 – Property, Plant and Equipment and IAS 41 – Agriculture |
The IASB has issued amendments
to IAS 16 and IAS 41. The main amendment is that biological assets for production (bearer biological assets) are outside the scope
of IAS 41 and should be accounted for in accordance with IAS 16.
Biological assets that are exclusively
utilized to produce and grow agricultural products are still within the scope of IAS 41 and will be measured at fair value.
Entities must apply the changes
as a result of these amendments on a full retrospective basis, and the new requirements are effective for annual periods beginning
on or after January 1, 2016. Earlier adoption is permitted. The Company is still evaluating the impact of these amendments on
its quarterly financial information and annual financial statements. The Company is not planning an earlier adoption.
In May 2013 the IASB issued IFRIC
21, which provides guidance on when an entity should recognize in its financial statements a liability for a levy, in accordance
with applicable laws and/or regulations. IFRIC 21 does not apply to income taxes. The obligation should only be recognized when
the event that triggers such an obligation occurs. IFRIC 21 is an interpretation of IAS 37 – Provisions, Contingent Liabilities
and Contingent Assets. IAS 37 establishes criteria for the recognition of a liability, one of which is the requirement that a
company has a present obligation as a result of a past event, known as the obligating event. IFRIC 21 is effective for fiscal
years ending on or after January 1, 2014. The adoption of IFRIC 21 has had no material impact on the Company’s consolidated
financial statements.
There are no other IFRS
standards or IFRIC interpretations that have been issued and not yet adopted that might, in the opinion of management, have a
significant impact on the results or the equity disclosed by the Company.
RAÍZEN ENERGIA S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
| 3. | Cash and cash equivalents |
|
|
|
2015 |
|
2014 |
Cash
and banks |
264,539 |
|
183,671 |
Amounts
pending of currency exchange closing (1) |
2,059 |
|
10,350 |
Financial
investments: |
|
|
|
Investment
fund (2) |
1,132,442 |
|
545,988 |
Certificates
of Deposit (3) |
2,234,988 |
|
1,029,195 |
Other investments |
161,259 |
|
1,811 |
|
3,795,287 |
|
1,771,015 |
In
Brazil |
|
3,391,488 |
|
1,628,719 |
Abroad |
|
403,799 |
|
142,296 |
|
|
3,795,287 |
|
1,771,015 |
| (1) | Amounts pending of currency
exchange closing are cash available for immediate redemption without material change in value. |
| (2) | Investment fund comprises
an investment in a fixed income fund managed by a high rated financial institution, operating on the basis of units with daily
earnings. As of March 31, 2015, the average return on this fund was 99.9% (100.9%% in 2014) of the Interbank Deposit Certificate
(“CDI”). |
| (3) | The Company has financial
investments in Bank Deposit Certificate (“CDB-type”) fixed income securities and repurchase agreements, with high
rated financial institutions. These are remunerated at an average rate of 102% of the CDI (102.1% in 2014), and are available
for immediate redemption. |
|
|
|
2015 |
|
2014 |
Financial
investments related to financing (1) |
45,829 |
|
71,088 |
Financial
investments related to transactions with derivatives (2) |
54,831 |
|
61,826 |
Margin with
transactions with derivatives (3) |
30,651 |
|
118,889 |
|
131,311 |
|
251,803 |
| (1) | These are financial investments
such as Financial Treasury Bills (“LFTs”) issued by Brazilian Government, which are held pursuant to collateral requirements
of financing from Banco Nacional do Desenvolvimento (“BNDES”), with redemption being conditional on the repayment
of specific installments of this financing. |
| (2) | These are financial investments
such as CDBs, with high rated financial institutions, used in derivate instruments transactions. |
| (3) | Margin deposits for derivatives
transactions refer to margin calls by counterparties in derivative instruments transactions and dollar exchange rate exposure
(Note 27.d). |
RAÍZEN ENERGIA S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
| 5. | Trade accounts receivable |
|
|
|
|
2015 |
|
2014 |
|
|
|
|
|
|
Domestic
customers |
227,363 |
|
216,827 |
|
Foreign
customers |
129,471 |
|
162,557 |
|
(-) Allowance
for doubtful accounts |
(25,196 |
) |
(23,380 |
) |
|
331,638 |
|
356,004 |
|
The maximum exposure to credit
risk as at the balance sheet date is the carrying value of each class of trade account receivables. The Company does not hold
securities as guarantees of trade accounts receivable.
The aging of trade accounts receivables
is as follows:
|
|
|
2015 |
|
2014 |
Current |
317,914 |
|
329,604 |
Overdue: |
|
|
|
01 to 30
days |
12,943 |
|
18,788 |
31 to 90
days |
453 |
|
7,201 |
91 to 180
days |
543 |
|
- |
More than
180 days |
24,981 |
|
23,791 |
|
38,920 |
|
49,780 |
|
356,834 |
|
379,384 |
The roll-forward of the allowance
for doubtful accounts is presented below:
|
|
|
|
As
of March 31, 2012 |
(23,249 |
) |
|
|
|
|
|
Additions |
(1,104 |
) |
|
|
|
|
|
As
of March 31, 2013 |
(24,353 |
) |
|
|
|
|
|
Additions |
(323 |
) |
|
Reversals |
1,296 |
|
|
|
|
|
|
As
of March 31, 2014 |
(23,380 |
) |
|
Additions |
(13,069 |
) |
|
Reversals |
11,253 |
|
|
|
|
|
|
As
of March 31, 2015 |
(25,196 |
) |
|
RAÍZEN ENERGIA S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
6.
Recoverable taxes
|
|
|
|
2015 |
|
2014 |
|
|
|
|
|
|
Value-added
Tax on Sales and Services (“ICMS”) (1) |
84,353 |
|
103,371 |
|
Social Contribution
Tax (“COFINS”) (2) |
38,520 |
|
42,139 |
|
Employees'
Profit Participation Program (“PIS”) (2) |
9,273 |
|
22,156 |
|
Special
Regime for Reintegration of Tax Values (“Reintegra”) (3) |
51,300 |
|
- |
|
Others |
6,042 |
|
4,436 |
|
|
189,488 |
|
172,102 |
|
Current |
157,304 |
|
145,903 |
|
Non-current |
32,184 |
|
26,199 |
|
| (1) | The ICMS credits can be
offset against future debts of the same nature or againts certain purchases of property, plant and equipement. |
| (2) | The PIS and COFINS credits
refer to credits generated in the Company’s normal operations. |
| (3) | The Reintegra credit established
by Law No. 12546 of December 14, 2011, regulated by Decree No. 8304 of September 12, 2014, aims to return part or all of the remaining
tax in the production chain of exported goods, which may vary between 0.1% (one tenth percent) and 3% (three percent). |
The credit is calculated by applying
the percentage of 3% of the gross revenue from October 2014, due to certain industrial products, in accordance with MF Ordinance
No. 428 of September 30, 2014; the credit is calculated by applying the percentage of 1% of the gross revenue from March 2015,
due to certain industrial products, in accordance with MF Ordinance No. 8.415/2015.
RAÍZEN ENERGIA S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
|
|
|
|
2015 |
|
2014 |
|
Finished
goods: |
|
|
|
|
Sugar |
37,257 |
|
49,743 |
|
Ethanol |
162,615 |
|
238,443 |
|
Work in
process |
7,332 |
|
6,078 |
|
Sugarcane
harvested |
(7,129) |
|
(8,443 |
) |
Spare parts
and maintenance materials |
167,130 |
|
172,642 |
|
Provision
for obsolescence |
(12,343 |
) |
(9,769 |
) |
|
354,862 |
|
448,694 |
|
The cost of inventories recognized
in the consolidated statement of income as cost of sales was R$ 8,064,341 in 2015 (R$7,542,579 in 2014).
The roll-forward of the provision
for obsolescence of inventory is presented below:
|
|
|
March 31, 2012 |
(7,471 |
) |
|
|
|
Provision |
(1,880 |
) |
|
|
|
March 31, 2013 |
(9,351 |
) |
|
|
|
Provision |
(673 |
) |
Reversal |
255 |
|
|
|
|
March
31, 2014 |
(9,769 |
) |
|
|
|
Provision |
(7,007 |
) |
Reversal |
4,433 |
|
|
|
|
March
31, 2015 |
(12,343 |
) |
|
|
|
|
2015 |
|
2014 |
|
Sugarcane |
278,118 |
|
248,463 |
|
Materials
and services |
2,538 |
|
972 |
|
Allowance
for losses |
(19,480 |
) |
(18,343 |
) |
|
261,176 |
|
231,092 |
|
Current |
206,004 |
|
209,251 |
|
Non-current |
55,172 |
|
21,841 |
|
Advances to sugarcane suppliers
represent amounts paid upon signing agreements or amendments. They are amortized when the sugarcane supplies are received. Depending
on the amount of sugarcane to be delivered, as estimated by the suppliers, the balances will be settled over a period of nine
harvests.
An allowance
for losses is recorded for advances to suppliers for which they have not delivered within the year of the crop. Once the accrual
is booked, the case will be sent to the court and after the judicial conclusion is reached, the Company will write off the credits.
RAÍZEN ENERGIA S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
|
|
|
2015 |
|
2014 |
|
|
|
|
Credits
from actions for damages (1) |
479,556 |
|
469,580 |
National
Treasury Certificate (“CTN”) (2) |
501,794 |
|
434,366 |
Others |
1 |
|
1 |
|
|
|
|
|
981,351 |
|
903,947 |
Current
|
12,931 |
|
13,267 |
Non-current |
968,420 |
|
890,680 |
| (1) | On February 28, 2007, the
Company recognized a gain of R$318,358, related to a lawsuit filed by a subsidiary against the federal government claiming indemnification
for damages, since prices of its products at the time in the sector were subject to government control. These prices were stipulated
without regard for the prevailing reality in the sector (which, in turn, was a result of government control). A final decision
in favor of the Company was handed down. The gain was recorded in profit or loss for the year, against non-current assets in "Other
financial assets". |
The judgment became final in
favor of the Company and the aforementioned gain was recognized in income for that year, in contrast to non-current assets under
other financial assets. The Company is awaiting the final decision on the form of payment. It is believed that this payment will
take the form of a court-ordered bond, to be received within 10 years. On March 31, 2015, the said compensation was restated in
the amount of R$ 389,039 (R$ 376,713 on March 31, 2014).
In December 2013,
the Company recognized a new award related to a favorable decision obtained in a lawsuit filed against the federal government,
of R$ 122,127. On January 15, 2014, and on August 15, 2014, the Company received R$ 32,391 and R$ 13,230 from the federal government,
which was reimbursed to Cosan. As at March 31, 2015 the balance receivable from the federal government in relation to this lawsuit
was R$ 12,931 and R$ 77,586 (R$ 13,267 e R$ 79,600 on March 31, 2014) classified as current and non-current assets, respectively.
The claim was not recognized within the net assets contributed by Cosan to Raízen at the time of the joint venture formation
(Note 11). Therefore, upon recognition of the assets, the Company recognized a related party liability in the amount that must
be repaid to Cosan (Note 10).
| (2) | This corresponds to government
securities issued by the Brazilian Treasury under the Special Agricultural Securitization Program (“PESA”), for an
original term of 20 years, given in guarantee of the PESA financing program (Note 16). The yield on these securities is 12% per
annum, adjusted annually by the price index (“IGPM”), which may be capitalized. The value of these securities at maturity
will be equal to the principal amount of the PESA debt owed. If the debt is repaid early, the Company may hold it in treasury
until maturity, or apply for redemption. |
RAÍZEN ENERGIA S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
| a) | Summary
of balances and transactions with related parties |
|
2015 |
|
2014 |
Assets |
|
|
|
Cosan Lubrificantes
e Especialidades S.A. |
1,823 |
|
3,900 |
Cosan S.A.
Indústria e Comércio (1) |
433,610 |
|
964,408 |
Raízen
Combustiveis S.A. (2) |
1,644,502 |
|
536,667 |
Grupo Rumo
(i) |
9,139 |
|
6,368 |
Nova America
Agrícola Caarapó Ltda.(4) |
69,787 |
|
34,480 |
Agroterenas
S.A. (4) |
26,450 |
|
11,894 |
Others |
11,941 |
|
6,114 |
|
2,197,252 |
|
1,563,831 |
|
|
|
|
Current
assets |
767,894 |
|
192,574 |
Non-current
assets |
1,429,358 |
|
1,371,257 |
|
2015 |
|
2014 |
Liabilities |
|
|
|
Cosan S.A.
Indústria e Comércio (1) |
772,945 |
|
931,050 |
Grupo Rumo
(i) |
11,225 |
|
8,775 |
Raízen
Combustíveis S.A.(2) |
1,600,380 |
|
56,777 |
Nova América
Agrícola Ltda (4) |
7,069 |
|
6,174 |
Nova América
Agrícola Caarapó Ltda. (4) |
8,317 |
|
3,466 |
Agroterenas
S.A. (4) |
10,368 |
|
7,693 |
Shell Brazil
Holding B.V. (3) |
3,538 |
|
3,538 |
Others |
7,977 |
|
6,922 |
|
2,421,819 |
|
1,024,395 |
|
|
|
|
Current
liabilities |
226,854 |
|
127,370 |
Non-current
liabilities |
2,194,965 |
|
897,025 |
RAÍZEN ENERGIA S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
|
2015 |
|
2014 |
|
2013 |
|
Sale of products |
|
|
|
|
|
|
Docelar Alimentos e Bebidas S.A. |
- |
|
- |
|
318,696 |
|
Raízen
Combustíveis S.A. and its subsidiaries |
1,138,591 |
|
1,534,355 |
|
562,765 |
|
Shell Western
Supply and Trading |
139,470 |
|
248,294 |
|
347,254 |
|
Pilipinas Shell
Petroleum |
82,396 |
|
80,294 |
|
- |
|
Shell Trading
US Company |
154,425 |
|
15,443 |
|
- |
|
Others |
1,591 |
|
1,458 |
|
2,078 |
|
|
1,516,473 |
|
1,879,844 |
|
1,230,793 |
|
Purchase
of products |
|
|
|
|
|
|
Grupo Rumo (i) |
(298,553 |
) |
(362,023 |
) |
(292,051 |
) |
Raízen Combustíveis S.A.
and its subsidiaries |
(417,109 |
) |
(413,646 |
) |
(358,531 |
) |
Agroterenas S.A. |
(170,634 |
) |
(166,669 |
) |
(163,253 |
) |
Nova América Agrícola
Caarapó Ltda. |
(94,897 |
) |
(80,637 |
) |
(98,102 |
) |
Nova América Agrícola
Ltda. |
(143,867 |
) |
(139,346 |
) |
(140,943 |
) |
Others |
(16,970 |
) |
(22,025 |
) |
(6,713 |
) |
|
(1,142,030 |
) |
(1,184,346 |
) |
(1,059,593 |
) |
Recharge
of shared expenses |
|
|
|
|
|
|
Cosan Lubrificantes
e Especialidades S.A. |
4,518 |
|
4,929 |
|
4,928 |
|
Cosan Indústria
e Comércio |
4,330 |
|
4,247 |
|
- |
|
Companhia de
Gás de São Paulo |
23,221 |
|
- |
|
- |
|
Docelar Alimentos
e Bebidas S.A. |
- |
|
- |
|
2,646 |
|
Grupo Rumo
(i) |
5,330 |
|
5,723 |
|
5,765 |
|
Raízen
Combustíveis S.A. and its subsidiaries |
125,767 |
|
116,568 |
|
104,195 |
|
Others |
1,824 |
|
1,705 |
|
1,364 |
|
|
164,990 |
|
133,172 |
|
118,898 |
|
Lease of land |
|
|
|
|
|
|
Grupo Aguassanta (ii) |
(32,386 |
) |
(28,627 |
) |
(36,523 |
) |
Grupo Radar (iii) |
(57,596 |
) |
(54,945 |
) |
(52,558 |
) |
|
(89,982 |
) |
(83,572 |
) |
(89,081 |
) |
Finance
income (costs) |
|
|
|
|
|
|
Raízen Combustíveis S.A.
and its subsidiaries (2) |
3,008 |
|
33,362 |
|
(7,711 |
) |
Agroterenas S.A. (4) |
2,557 |
|
894 |
|
- |
|
Nova América Agrícola
Caarapó Ltda. (4) |
5,299 |
|
1,481 |
|
- |
|
Shell Brazil Holding B.V. (3) |
(3 |
) |
12,516 |
|
- |
|
Shell Finance B.V. |
(5,640 |
) |
(4,361 |
) |
- |
|
Others |
(2,804 |
) |
1,945 |
|
(89 |
) |
|
2,417 |
|
45,837 |
|
(7,800 |
) |
|
|
|
|
|
|
|
|
526,868 |
|
695,198 |
|
193,217 |
|
| (i) | Grupo
Rumo refers to rail road and shipment operations made through the following companies:
Rumo Logística Operadora Multimodal S.A. and Logispot Armazéns Gerais S.A.. |
| (ii) | Grupo
Aguassanta represents lands leased for sugarcane harvesting from the following entities:
Aguassanta Agrícola Ltda., Aguassanta Participações S.A., Aguapar
Agrícola Ltda, Palermo Agrícola S.A. e Vila Santa Empreendimentos Imobiliários
Ltda. |
| (iii) | Grupo
Radar represents lands leased for sugarcane harvesting from the following entities: Radar
Propriedades Agrícolas S.A., Nova Agrícola Ponte Alta S.A., Nova Amaralina
S.A., Terras da Ponte Alta, Nova Santa Barbara Agrícola S.A., Radar II Propriedades
Agrícolas S.A., Proud Participações S.A. e Bioinvestments Negócios
S.A.. |
RAÍZEN ENERGIA S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
| (1) | Cosan S.A. Indústria
e Comércio |
On
March 31, 2015, the amount recorded in consolidated current assets referred to payments or payables for the formation of the joint
venture, which are reimbursable in full, as follows: i) reimbursement of payment in installments of tax refinancings (Refis IV),
of R$18,510 (R$65,326 in 2014) (Note 17); ii) reimbursement of legal and administrative expenses of R$17,631 (R$8,804 in 2014);
iii) reimbursement of costs of court deposits amounting to R$44,478 (R$31,012 in 2014); iv) reimbursement of expenses of legal
claims of R$20,061 (R$13,408 in 2014); and v) reimbursement of expenses of Health, Safety and the Environment ("SSMA")
and other costs of R$1,021 (R$ 1,021 in 2014).
In addition, the remaining
balance receivable from Cosan represents debit notes for shared expenses of R$5,524 (R$7,124 in 2014).
The amount registered
in consolidated non-current assets refers to liabilities of the Company before the joint venture was formed, which are to be fully
reimbursed by Cosan, when paid, and which represent: i) provisions for legal claims of R$175,485 (R$196,958 in 2014) (Note 19);
ii) installments of tax debts payable, especially Refis IV, of R$ 150,900 (R$632,218 in 2014) (Note 17); and iii) other reimbursable
liabilities in the amount of R$ 110, received in the year ended March 31, 2015.
The reduction of R$
528,134 of the receivables consolidated (current and non-current) related to the division of tax debts payable (Refis IV), which
pre-existed the formation of Raízen, was substantially completed within the period, following the accession by Cosan to
the debt settlement program of the Receita Federal do Brasil ("RFB"), Law No. 13,043. The details in this regard are
described in Note 17.
The amount of R$ 43,340
in consolidated current liabilities refers to a payment received from Destivale of R$ 12,931 (R$ 13,267 in 2014) relating to an
action for indemnity which must be reimbursed to Cosan. The residual amount of R$ 30,409 (R$ 23,364 in 2014) (Note 9) corresponds
to debit notes and financial transfers arising from the formation of the joint venture.
The amount registered
in consolidated non-current liabilities refers to credits from shares for damages and judicial deposits of R$466,625 (R$456,313
in 2014) (Note 9) and R$172,450 (R$177,368 in 2014) (Note 19), respectively, existing before the joint venture was formed, which
are to be reimbursed to Cosan when realized, since Cosan did not contribute these credits to the formation of the joint venture.
The
remaining balance in the amount of R$ 767 refers to credits from actions
recorded in Cosan, but where the responsibility for the claims lies with Raízen.
Preferred shares
– Cosan
The balance of preferred shares
payable, which are recorded as non-current liabilities, relates to the value of tax benefits to reimburse Cosan, when effectively
utilized by the Company, determined by the balance of tax losses and negative basis of social contribution ("NOL ")
and tax benefit on goodwill amortization (" GW "). The payment will be made through the distribution of unique dividends
to holders of the Class B preferred shares (Note 21.a). Currently, only Cosan holds this class of shares.
On March 31, 2014,
the Company proposed to make a dividend distribution to the holders of Class B preferred shares of R$43,636, corresponding to
the partial used of tax benefit during the fiscal year.
As at March 31, 2014,
the Company reviewed the balance of preferred shares outstanding, and determined to reverse R$ 11,812 of the obligation to Cosan.
RAÍZEN ENERGIA S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
At the Annual General Meeting
held on July 28, 2014, the Company's shareholders resolved and approved payments in the amount of R$ 42,381, less than the amount
of R$ 1,255 declared on March 31, 2014. RESA made a payment in relation to these preferred shares on 29 July 2014.
During the quarter ended December
31, 2014, RESA joined the program for the settlement of the debts in the RFB through the use of NOL (Note 17). Thus, RESA partially
used the NOL balances owned by Cosan, arising prior to the formation of the Group, resulting in a decrease in the preferred shares
in the amount of R$ 157,010.
The amount of Cosan credits was
R$ 171,750, of which R$ 14,740 had not recognized preferred shares. These credits had not been registered before the formation
of the joint venture, due to the absence of probability of use at that time.
On March 31, 2015,
the Company proposed the destination of the dividends to the holders of Class B preferred shares, in the amount of R$ 15,221,
which corresponds to the partial utilization of the amount recorded as fiscal benefits in the year ended.
On March 31, 2015,
the remaining balance of Class B preferred shares payable to Cosan on March 31, 2015 was R$ 89,762 (R$ 260,738 in 2014) (Nota
21.a).
Summary of balances
to be reimbursed to and collected from shareholder Cosan
When the joint venture
was formed it was agreed that Cosan should reimburse some assets and repay some liabilities which were previously in existence,
at the time that they were actually realized or settled. As at March 31, 2015 and 2014, the counterpart of the reimbursable and
collectable amounts with Cosan were presented in the Company’s balance sheet under the following classifications:
|
2015 |
|
2014 |
|
|
|
|
Current
assets |
|
|
|
Other financial
assets (Note 9) |
12,391 |
|
13,267 |
|
12,391 |
|
13,267 |
|
|
|
|
Non-current
assets |
|
|
|
Judicial
deposits (Note 19) |
172,450 |
|
177,368 |
Other financial
assets (Note 9) |
466,625 |
|
456,313 |
|
|
|
|
|
639,075 |
|
633,681 |
Total
assets |
651,466 |
|
646,948 |
|
|
|
|
Current
liabilities |
|
|
|
Taxes payable
(Note 17) |
18,510 |
|
65,326 |
Others payable |
83,191 |
|
54,245 |
|
101,701 |
|
119,571 |
|
|
|
|
Non-current
liabilities |
|
|
|
Taxes payable
(Note 17) |
150,901 |
|
632,218 |
Provision
for judicial demands (Note 19) |
175,485 |
|
196,958 |
|
326,386 |
|
829,176 |
Total
liabilities |
428,087 |
|
948,747 |
RAÍZEN ENERGIA S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
| (2) | Raízen
Combustíveis S.A. and its subsidiaries ("RCSA") |
RCSA refers to the
financial operations of Raízen Combustíveis S.A. and its subsidiaries, Petróleo Sabba S.A., Raízen
Mime Combustíveis S.A., Saturno Investimentos Imboliários Ltda., Blueway Trading Importações e Exportações,
and Raízen Fuels Finance Ltda.
On March 31, 2015,
the amount recorded in the consolidated current assets of R$ 619,406 referred mainly to funds sent as a form of financial resource
management.
The
remaining balance receivable of this Company, recorded in consolidated current assets, mainly refers to: i) the issue of debt
notes on the costs shared between the companies, in the amount of R$ 21,579 (R$ 16,920 in 2014), ii ) sale of ethanol and ESALQ
adjustment provision totaling the negative amount of R$ 11,379 (R$ 23,720 in 2014); and; iii) interest on the export prepayment
financing contracts with maturities in 2015 and 2019 in the amount of R$ 814 (R$ 430 in 2014).
On March 31, 2015,
the amount in consolidated non-current assets was related to a export prepayment financing agreement in the amount of US$ 702,552
(495,597 in 2014), equivalent to US$ 219,000 to be settled on April 27, 2020. The agreement has quarterly payments of the London
Interbank Offered Rate (“LIBOR”) plus annual interest of 1.50%, which results in a weighted average rate of 1.77%
a year (1.73% in 2014).
In addition, during
the year ended March 31, 2015, the Company entered into a new export prepayment financing agreement in the amount of R$ 320,800,
equivalent to US $ 100,000, to be paid on March 29, 2019. This agreement is subject to quarterly LIBOR plus annual interest of
1.55%, resulting in an average effective interest rate of 1.80% per annum.
The remaining balance
recorded in current liabilities refers to interest on the export prepayment financing contracts in the amount of R$ 9,269.
At March 31, 2015,
R$ 135,202 (R$ 56,777 in 2014) registered in consolidated current liabilities corresponded mainly to funds received by the Company
due to the cash management agreement of R$ 131,739 (R$ 53,160 in 2014),; ethanol commerce of R$ 2,459 (R$ 3,441 in 2014); and
debit notes for overhead expenses shared between the companies of R$ 1,004 (R$ 176 in 2014).
The amount recorded
in consolidated non-current liabilities refers to an export prepayment financing agreement entered into with Raízen Fuels
Finance Ltd. at March 25, 2015 in the amount of R$ 1,122,800, equivalent to US$ 350,000 , to be paid on March 29, 2019. This agreement
is subject to quarterly LIBOR rate plus annual interest of 1.55%, resulting in an average effective interest rate of 1.80% per
annum.
In addition, during
the year ended on March 31, 2015 the Company entered into the following export prepayment financing agreement with export Raízen
Fuels Finance Ltd., with the following terms:
i) R$ 227,416, equivalent
to EUR$ 66,000, to be paid on October 15, 2021. The contract is subject to annual interest of 3.09%.
ii) R$ 137,828, equivalent
to EUR$ 40,000, to be paid on January 20, 2022. The contract is subject to annual interest of 2.21% plus quarterly Euribor rate,
resulting in an average effective interest rate of 2.27% per annum.
The remaining balance
in current liabilities and non-current in the amount of R$ 2,423 and R$ 25,289, respectively, refers to expenses and income with
capture of export prepayment financing contracts ("PPEs"), to be amortized over the contract.
RAÍZEN ENERGIA S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
In the year ended
March 31, 2015, the Company recognized net loss in its financial results in the amount of R$ 319,723, arising from transactions
with RCSA. This amount is composed of R$ 401,275, which relates to the interest of the PPE contract and loss of foreign exchange
variation of the contract by the devaluation of the real against the dollar, and R$ 81,552, which relates to the income charged
due to the cash management funds position held by RESA.
On March 31, 2015,
the Company had a foreign currency exposure liability with RCSA in the amount of R$ 450,282 (liability exposure of R$ 1,399,516
and asset exposure of R$ 496,027 in 2014), (Note 27.d).
| (3) | Shell
Brazil Holding B.V. |
Preferred shares
payable – Shell
As a result of the merger of
Ispagnac Participação Ltda.’s (“IPL’s”) net assets into REPSA and, subsequently, the merger
into Raízen on November 30, 2012, the Company issued preferred Class C shares, which will guarantee exclusive dividends
to Shell of R$ 3,538 from tax benefits and cash equivalents that were a part of IPL net assets. The amounts of R$ 932 and R$ 2,606
are recorded as current and non-current liabilities, respectively.
| (4) | Nova
América Agrícola Caarapó Ltda, Nova América Agrícola
Ltda. e Agroterenas S.A. |
Amounts receivable from these
entities mostly comprise advances paid to finance biological asset planting costs. The amounts payable are for purchases of sugarcane.
Advances accrue interest income at 100% of the CDI benchmark interest rate. In the year ended March 31, 2015, interest income
of R$ 7,856 (R$ 2,375 in 2014) was recognized in respect of these advances. Prices for the purchase of sugarcane are linked to
price of Total Recoverable Sugar (“ATR”) issued by CONSECANA.
| b) | Officers
and members of the Board of Directors |
The
total remuneration and benefits paid to key management personnel, including the officers and members of the Board of Directors,
are as follows:
|
2015 |
|
2014 |
|
2013 |
Salary |
42,226 |
|
37,743 |
|
34,858 |
Bonuses
and other variable compensation |
31,488 |
|
31,803 |
|
27,635 |
|
|
|
|
|
|
Total
compensation |
73,714 |
|
69,546 |
|
62,493 |
The Company shares its corporate,
managerial and operating structure and costs with its related party, RCSA. Most management positions are held by employees of
the Company. As a result, on March 31, 2015, RCSA reimbursed the Company for all the shared corporate costs, including key personnel
and other management employee costs, in the amount of R$ 55,555 (R$ 54,868 and R$ 41,706 in 2014 and 2013, respectively).
RAÍZEN ENERGIA S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
| 11 | Investments
in associates and joint-ventures |
|
Investments
(1) |
|
Equity
accounting |
|
|
Country
|
|
Business
|
|
Number
of shares/quotas of investee (2) |
|
Number
of shares/quotas of investing company (2) |
|
Percentage
interest |
|
2015 |
|
2014 |
|
2015 |
|
2014 |
|
2013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carrying
value |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Centro de Tecnologia
Canavieira S.A. |
Brazil |
|
R&D |
|
718,132 |
|
150,305 |
|
20.93% |
|
68,574 |
|
35,977 |
|
1,962 |
|
(3,645 |
) |
- |
|
Codexis Inc.
(4) |
Brazil |
|
R&D |
|
- |
|
- |
|
- |
|
- |
|
13,734 |
|
(6,684 |
) |
(14,225 |
) |
(4,933 |
) |
Logum Logística
S.A. |
Brazil |
|
Logistics |
|
1,407,803,888 |
|
281,560,778 |
|
20.00% |
|
64,370 |
|
49,496 |
|
(29,054 |
) |
(16,385 |
) |
(12,182 |
) |
Uniduto Logística
S.A. |
Brazil |
|
Logistics |
|
234,847,909 |
|
109,172,285 |
|
46.48% |
|
30,587 |
|
20,285 |
|
(161 |
) |
(179 |
) |
(1,240 |
) |
Subtotal |
|
|
|
|
|
|
|
|
|
|
163,531 |
|
119,492 |
|
(33,937) |
|
(34,434 |
) |
(18,355 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill
on investment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Uniduto Logística
S.A. |
|
|
|
|
|
|
|
|
|
|
5,676 |
|
5,676 |
|
- |
|
- |
|
-- |
|
Centro de Tecnologia
Canavieira S.A. |
|
|
|
|
|
|
|
|
|
|
41,379 |
|
37,098 |
|
- |
|
- |
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
47,055 |
|
42,774 |
|
- |
|
- |
|
- |
|
Total
investment |
|
|
|
|
|
|
|
|
|
|
210,586 |
|
162,266 |
|
(33,937 |
) |
(34,434 |
) |
(18,355) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision
for unsecured liabilities of subsidiaries and affiliated companies (3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unimodal Ltda. |
Brazil |
|
Logistics |
|
2,697 |
|
1,980 |
|
73.41% |
|
(2,653 |
) |
(2,642 |
) |
(1) |
|
(1 |
) |
(90 |
) |
Others |
Brazil |
|
|
|
|
|
|
|
|
|
- |
|
- |
|
- |
|
- |
|
(79) |
|
Total
provision for unsecured liabilities |
|
|
|
|
|
|
|
|
|
|
(2,653 |
) |
(2,642 |
) |
(1) |
|
(1 |
) |
(169 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(33,938 |
) |
(34,435 |
) |
(18,524 |
) |
(1) Investments under
the equity method; (2) Shares / quotas in units; (3) Ranked in non-current liabilities; and (4) On March 10, 2015 the Company
sold the shares of Codexis (Note 25 ii).
RAÍZEN ENERGIA S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
The roll-forward of investments
in associates and joint-venture is as follows:
|
|
|
Balance
on March 31, 2013 |
267,489 |
|
|
|
|
Equity accounting |
(34,434 |
) |
Additions
to investment (Nota 11. 2.2) |
33,228 |
|
Write-offs |
(23,900 |
) |
Transfers
to intangible assets (Nota 14) |
(61,629 |
) |
Others |
(18,488 |
) |
|
|
|
Balance
on March 31, 2014 |
162,266 |
|
|
|
|
Equity
accounting |
(33,938 |
) |
Additions
to investment (Note 11.1) |
58,964 |
|
Transfer
to "Other financial assets" (Note 9.3) |
(8,147 |
) |
Capital
gain on dilution of equity interest (Note 11.1) |
30,333 |
|
Others |
1,108 |
|
|
|
|
Balance
on March 31, 2015 |
210,586 |
|
The roll-forward for the provision
for unsecured liabilities in subsidiaries and affiliates is as follows:
|
|
|
Balance
on March 31, 2013 |
(2,720 |
) |
|
|
|
Equity accounting |
(1 |
) |
Write-offs |
79 |
|
|
|
|
Balance
on March 31, 2014 |
(2,642 |
) |
|
|
|
Equity
accounting |
(1 |
) |
Others |
(10) |
|
|
|
|
Balance
on March 31, 2015 |
(2,653 |
) |
| b) | Summarized financial
information of associates and joint-ventures |
| |
Logum Logística S.A. (1)/(2) | | |
Uniduto Logística Ltda. (1)/(2) | | |
Centro de Tecnologia Canavieira S.A. (2) | | |
Unimodal Ltda. (4) | | |
Iogen Energy Corporation (3) | |
| |
| | |
| | |
| | |
| | |
| |
Assets | |
| 2,049,903 | | |
| 65,810 | | |
| 454,036 | | |
| — | | |
| 48,652 | |
Liabilities | |
| (1,728,055 | ) | |
| (4 | ) | |
| (126,403 | ) | |
| (3,617 | ) | |
| (283,746 | ) |
Shareholders’
equity | |
| 321,848 | | |
| 65,806 | | |
| 327,633 | | |
| (3,617 | ) | |
| (235,094 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Net operating revenue | |
| 41,479 | | |
| — | | |
| 75,093 | | |
| — | | |
| — | |
Income (Loss) for the year | |
| (145,266 | ) | |
| (346 | ) | |
| 499 | | |
| (15 | ) | |
| (15,377 | ) |
RAÍZEN ENERGIA S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
| (1) | Associates with a December
31 fiscal year-end. |
| (2) | The
determination of significant influence in these companies was made on the basis that
the Company has the right to appoint key personnel to manage them, as well as the right
to decide on significant strategic and operational matters. |
| (3) | Raizan
has an interest of 50% in Iogen, wich is a joint venture with August 31 fiscal year-end.
The Company does not recorded a provision for capital deficiency and loss of equity,
since it does not have responsibility for legal or constructive obligations (not formalized)
to make payments for that company. |
| (4) | March 31 fiscal year-end. |
| |
Logum Logística S.A. (1)/(2) | | |
Uniduto Logística Ltda. (1)/(2) | | |
Codexis, Inc. (1)/(2) | | |
Centro de Tecnologia Canavieira S.A. (2) | | |
Unimodal Ltda. | | |
Iogen Energy Corporation (3) | |
| |
| | |
| | |
| | |
| | |
| | |
| |
Assets | |
| 1,752,011 | | |
| 43,650 | | |
| 137,839 | | |
| 271,262 | | |
| 1 | | |
| 45,765 | |
Liabilities | |
| (1,504,533 | ) | |
| (9 | ) | |
| (40,661 | ) | |
| (117,387 | ) | |
| (3,603 | ) | |
| (231,162 | ) |
Shareholders’
equity | |
| 247,478 | | |
| 43,641 | | |
| 97,178 | | |
| 153,875 | | |
| (3,602 | ) | |
| (185,397 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Net operating revenue | |
| 3,500 | | |
| — | | |
| 68,913 | | |
| 56,875 | | |
| — | | |
| — | |
Income (loss) for the year | |
| (117,148 | ) | |
| (395 | ) | |
| (89,165 | ) | |
| (910 | ) | |
| — | | |
| (1.904 | ) |
| (1) | These associates have a
December 31 fiscal year-end. |
| (2) | The determination of significant
influence in these companies was made on the basis that the Company has the right to appoint key personnel to manage them, as
well as the right to decide on significant strategic and operational matters. |
| (3) | Joint venture with August
31 fiscal year-end. The Company does not recorded a provision for capital deficiency and loss of equity, since it does not have
responsibility for legal or constructive obligations (not formalized) to make payments for that company. |
| c) | Transactions
occurring in 2015 and 2014 |
1) Transactions occurring
during the year ended on March 31, 2015
Additions to investments
Capital increase in Logum
Logística S.A. (“Logum”)
On May 23, 2014, a Board Meeting
of the subsidiary Logum resolved to approve a capital increase in the company of R$ 81,230, through the issue of 231,830,850 new
common shares. RESA subscribed for and paid in a total of R$ 16,246, corresponding to 46,366,170 common shares.
On July 30, 2014, a Board Meeting
resolved to approved a capital increase of the Company in the amount of R$52,857 , through the issue of 155,644,876 new common
shares. The amount subscribed by RESA and fully paid totaled R$10,572, corresponding to 31,128,975 common shares.
On November
3, 2014, a Board Meeting resolved to approved a capital increase
of the Company in the amount of R$ 65,527, through the issue of 234,025,000 new common shares. The amount subscribed by RESA and
fully paid totaled R$13,105, corresponding to 46,805,000 common shares.
RAÍZEN ENERGIA S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
On March 13, 2015, a Board Meeting
resolved toapproved a capital increase in the company in the amount of R$ 20,000, through the issue of 80,000,000 new common shares.
The amount subscribed by RESA and fully paid totaled R$ 4,000, corresponding to 16,000,000 common shares.
In these transactions, there
were no variations in the percentage of participation in the share capital of the investees, since all shareholders effected contributions
in proportion to their shares previously held.
Capital increase in Uniduto
Logística S.A. (“Uniduto”)
On May 20, 2014, in a Board Meeting
of the subsidiary Uniduto, it was resolved to approve a capital increase in the company for R$8,573, through the issue of 30,303,995
new common shares. RESA subscribed for and paid in a total of R$3,891, corresponding to 14,085,297 common shares.
On July 31, 2014, in an Board
Meeting, a capital increase of the company in the amount of R$ 5,286 was discussed and approved, through the issue of 18,790,260
new ordinary shares. The amount subscribed by RESA and paid in this operation totaled R$ 2,457, corresponding to 8,732,904 common
shares.
On November 3, 2014, in a Board
Meeting, a capital increase of the company in the amount of R$ 6,553 was discussed and approved, through the issue of 23,327,519
new ordinary shares. The amount subscribed by RESA and paid in this transaction totaled R$ 3,045, corresponding to 10,842,631
common shares.
On March 11, 2015, in an RCA,
a capital increase of the company in the amount of R$ 2,300 was discussed and approved, through the issue of 8,193,800 new ordinary
shares. The amount subscribed by RESA and paid in this transaction totaled R$ 1,069, corresponding to 3,808,478 common shares
In these transactions, there
were no variations in the percentage of participation in the share capital of the investees, since all shareholders effected contributions
in proportion to their shares previously held.
Capital increase in Centro
de Tecnologia Canavieira S.A. (“CTC”)
At the Extraordinary General
Meeting held on July 10, 2014, a capital increase amounting to R$ 165,002 was discussed and approved by the shareholders of CTC,
through the issue of 83,741 new ordinary shares. The amount subscribed by RESA in this operation totaled R$ 4,579, corresponding
to 2,324 shares. 50% of the subscribed amount of R$ 2,291 was paid on September 19, 2014, and the remaining of 50% was paid on
March 24, 2015.
As stipulated in CTC’s
shareholders’ agreement, in this operation RESA gave 90.9% of its rights to the preferential allocation of shares of CTC.
Therefore, its percentage interest in the capital went from 23.33% to 20.93%, generating a capital gain on the dilution of equity
interest amounting to R$ 30,333. This was recorded in "Other operating income, net" (Note 25).
RAÍZEN ENERGIA S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
2) Transactions occurring
during the year ended on March 31, 2014
2.2) Additions to investments
Capital increase in Logum
On September 12, 2013, pursuant
to the approval of Logum’s Board of Directors, Logum issued 158,056,914 common shares, for R$ 80,000. The amount subscribed
and paid by the Company totaled R$ 16,000, corresponding to 31,611,383 common shares. There was no interest dilution.
Additionally, on November 19,
2013, pursuant to the approval of Logum’s Board of Directors, the Company issued 117,689,804 more common shares, for R$
53,000. The amount subscribed and paid by the Company totaled R$ 10,600, corresponding to 23,537,961 common shares. There was
no interest dilution.
Uniduto
On September 9, 2013,
under a private agreement relating to the purchase and sale of shares, Raízen Energia purchased 528,406 common shares of
Uniduto, for R$354, representing 0.49% of the shareholders’ capital of Uniduto, thereby increasing the Company’s interest
in Uniduto to 46.47%.
On the same date, the Board of
Directors approved an increase of the shareholders’ capital in the amount of R$ 8,000. The amount subscribed and paid by
the Company totaled R$ 3,718, and there was no interest dilution.
Additionally, the Board of Directors
approved an increase of the shareholders’ capital of R$ 5,300 on November 19, 2013. The amount subscribed and paid by the
Company totaled R$ 2,463,and there was no interest dilution.
In February 2014, the Company
transferred the amount of R$ 93 to Uniduto as a future capital increase.
Iogen Energy Corporation (“Iogen”)
On 15 October 2013,
RESA received from the shareholder Shell the shares that it held in Iogen. This was registered by RESA using the equity method,
because it is a joint venture.
Regarding the negative equity
of Iogen, which on March 31, 2014, totaled R$ 185,397, the Company does not recognized losses of equity as it does not have responsibility
for legal or constructive obligations (constructive) to make payments for that company.
RAÍZEN ENERGIA S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
The roll-forward
of biological assets (sugarcane) is presented below:
|
|
|
Balance
on March 31, 2013 |
1,978,477 |
|
Expenditures
on plantations (1) |
399,889 |
|
Sugarcane
cultivation costs (1) |
506,097 |
|
Absorption
of costs of sugarcane harvest |
(794,238 |
) |
Provisional
allocation of Cerrado (Note 11.c) |
15,240 |
|
Change
in fair value, net of amortization |
(68,772 |
) |
|
|
|
Balance
on March 31, 2014 |
2,036,693 |
|
|
|
|
Expenditures
on plantations (1) |
385,102 |
|
Sugarcane
cultivation costs (1) |
541,531 |
|
Absorption
of costs of sugarcane harvest |
(972,128 |
) |
Change
in fair value, net of amortization |
(31,339 |
) |
|
|
|
Balance
on March 31, 2015 |
1,959,859 |
|
(1) Includes agricultural assets
depreciation of R$75.222 (R$67,339 in 2014).
Sugarcane stumps
The cultivated areas represent
only the sugarcane plantations, without taking into account the land on which the crops are planted. The fair value of the biological
assets is categorized within level 3 and the following assumptions were used to determine fair value using the discounted cash
flow method:
|
2015 |
|
2014 |
Estimated
area of the harvest (hectare) |
412,738 |
|
425,708 |
Productivity
expected (metric tons of sugarcane, per hectare) |
75.30 |
|
79.67 |
Amount
of Total Recoverable Sugar (TRS)(Kg) |
132.60 |
|
134.14 |
Price
of Kg of projected average TRS (R$/Kg) |
0.52 |
|
0.49 |
Sugar production depends on the
volume and sucrose content of the sugarcane grown or supplied by growers located near the Company's plants. The yield of the crop
and the sucrose content in the sugarcane depend mainly on climatic conditions, such as the amount of rain and the temperature,
which can vary.
In the past, climatic
conditions have led to volatility in the ethanol and sugar sectors of the Company's operating results, as a result of damage to
the crops and reductions in yield. Climatic conditions can reduce the amount of sugar and sugarcane that the Company obtains in
a specific season, or the sucrose content in the sugarcane. The business is also affected by the growth cycle of sugarcane in
the south centralregion of Brazil. The annual sugarcane harvest in the south centralregion of Brazil starts in April or May and
ends in November or December. The seasonality increases the inventory levels, which are generally high in November and December
to cover the period between harvests (i.e. from December to April). There is also a degree of seasonality in gross profit,
which is lower in the last quarter of the fiscal year (i.e., October to December).
The Company adopted various estimates
to evaluate the sugar cane fields. The discount rate applied on this calculation was 7,73% per year. These estimates were based
on the market information, which are subject to the scenario changes that may impact the financial statements. A decrease of 5%
in market prices of sugar cane, would result in a reduction of the fair value of biological assets in the approximately amount
of R$ 175,672, net of taxes. If the discount rate present an increase of 0.5 p.p. would cause a reduction in the fair value of
biological assets in the amount approximately of R$ 18,726, net of taxes.
RAÍZEN ENERGIA S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
| 13. | Property,
plant and equipment |
| a) | Property, plant and
equipment roll-forward |
|
Land
and rural properties |
|
Buildings
and improvements |
|
Machinery,
equipment and installations |
|
Aircraft
and vehicles |
|
Furniture,
fixtures and computer equipment |
|
Works
in progress |
|
Parts
and components to be periodically replaced |
|
Others |
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As at March 31, 2013 |
36,525 |
|
924,988 |
|
6,279,087 |
|
389,802 |
|
107,057 |
|
718,324 |
|
1,102,438 |
|
29,372 |
|
9,587,593 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additions |
- |
|
576 |
|
51,060 |
|
- |
|
1,504 |
|
936,245 |
|
561,761 |
|
- |
|
1,551,146 |
|
Disposals |
(10,148 |
) |
(2,404 |
) |
(54,789 |
) |
(7,653 |
) |
(2,373 |
) |
- |
|
- |
|
(1,410 |
) |
(78,777 |
) |
Transfers
from cost to depreciation |
- |
|
(679 |
) |
(5,622 |
) |
(420 |
) |
(41 |
) |
(482 |
) |
- |
|
- |
|
(7,244 |
) |
Transfers
(1) |
- |
|
65,124 |
|
580,960 |
|
87,644 |
|
13,738 |
|
(762,751 |
) |
(616,762 |
) |
2,384 |
|
(629,663 |
) |
Reversal
of loss provision (2) |
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
5,792 |
|
5,792 |
|
Others |
- |
|
- |
|
- |
|
- |
|
167 |
|
- |
|
- |
|
- |
|
167 |
|
As
at March 31, 2014 |
26,377 |
|
987,605 |
|
6,850,696 |
|
469,373 |
|
120,052 |
|
891,336 |
|
1,047,437 |
|
36,138 |
|
10,429,014 |
|
Additions |
- |
|
- |
|
34,728 |
|
22 |
|
490 |
|
749,924 |
|
624,883 |
|
- |
|
1,410,047 |
|
Disposals |
(2 |
) |
(170 |
) |
(143,332 |
) |
(14,792 |
) |
(3,214 |
) |
(71 |
) |
- |
|
- |
|
(161,581 |
) |
Transfers
(1) |
8,836 |
|
74,867 |
|
534,816 |
|
79,163 |
|
16,973 |
|
(736,966 |
) |
(553,340 |
) |
4,268 |
|
(571,383 |
) |
Reversal
of loss provision (3) |
- |
|
- |
|
(3,189 |
) |
- |
|
- |
|
(5,489 |
) |
- |
|
- |
|
(8,678 |
) |
Others |
- |
|
- |
|
- |
|
- |
|
682 |
|
- |
|
- |
|
- |
|
682 |
|
As
at March 31, 2015 |
35,211 |
|
1,062,302 |
|
7,273,719 |
|
533,766 |
|
134,983 |
|
898,734 |
|
1,118,980 |
|
40,406 |
|
11,098,101 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As at March 31, 2013 |
- |
|
(239,418 |
) |
(1,847,829 |
) |
(184,938 |
) |
(62,794 |
) |
- |
|
(616,762 |
) |
(22,274 |
) |
(2,974,015 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expense with
depreciation for the year |
- |
|
(36,110 |
) |
(255,069 |
) |
(29,072 |
) |
(13,490 |
) |
- |
|
(553,340 |
) |
(2,069 |
) |
(889,150 |
) |
Disposals |
- |
|
2,406 |
|
48,287 |
|
6,263 |
|
2,254 |
|
- |
|
- |
|
1,378 |
|
60,588 |
|
Transfers
from cost to depreciation |
- |
|
679 |
|
6,105 |
|
107 |
|
353 |
|
- |
|
- |
|
- |
|
7,244 |
|
Transfers
(1) |
- |
|
(42 |
) |
163 |
|
37 |
|
8 |
|
- |
|
616,762 |
|
- |
|
616,928 |
|
As
at March 31, 2014 |
- |
|
(272,485 |
) |
(2,048,343 |
) |
(207,603 |
) |
(73,669 |
) |
- |
|
(553,340 |
) |
(22,965 |
) |
(3,178,405 |
) |
Expense
with depreciation for the year |
- |
|
(13,096 |
) |
(356,379 |
) |
(33,364 |
) |
(15,911 |
) |
- |
|
(596,376 |
) |
(4,837 |
) |
(1,019,963 |
|
Disposals |
- |
|
170 |
|
141,200 |
|
13,627 |
|
3,229 |
|
- |
|
- |
|
- |
|
158,226 |
|
Transfers
(1) |
- |
|
(767 |
) |
407 |
|
256 |
|
4,368 |
|
- |
|
553,340 |
|
(504 |
) |
557,100 |
|
As
at March 31, 2015 |
- |
|
(286,178 |
) |
(2,263,115 |
) |
(227,084 |
) |
(81,983 |
) |
- |
|
(596,376 |
) |
(28,306 |
) |
(3,483,042 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net carrying
value: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of March
31, 2015 |
35,211 |
|
776,124 |
|
5,010,604 |
|
306,682 |
|
53,000 |
|
898,734 |
|
522,604 |
|
12,100 |
|
7,615,059 |
|
As
of March 31, 2014
|
26,377 |
|
715,120 |
|
4,802,353 |
|
261,770 |
|
46,383 |
|
891,336 |
|
494,097 |
|
13,173 |
|
7,250,609 |
|
| (1) | Includes R$10,290 transferred
to current assets in respect of recoverable ICMS credits, and R$24,573 transferred to intangible assets for software. |
| (2) | Includes R$1,373 of provision
for inventories losses and reversal of R$ 7,165 of provision for loss on advances, recorded under “Other operating revenues
(expenses), net" (Note 25). |
| (3) | Refers to inventories losses,
recorded under “Other operating revenues (expenses), net" (Note 25). |
RAÍZEN ENERGIA S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
Construction in progress
On March 31, 2015, the balance
of works in progress, in the amount of R$898,734 (R$891,336 in 2014), refers to: (i) vinasse project concentration; (ii) investments
to expand the sugar cane mill; (iii) energy cogeneration project – shredded cane and straw separation; (iv) tank installation
for ethanol stock capacity improvement; (v) investments to improve industrial conditions, agricultural automations, and health,
safety and environment and administrative investments.
Capitalization of loan
costs
During the year ended March 31,
2015, loan costs capitalized in the Company amounted to R$30,951 (R$44,296 and R$41,490 in 2014 and 2013 respectively). The weighted
average interest rate utilized to determine the capitalized amount was 6.40% p.a. (4.17% and 4.07% in 2014 and 2013, respectively).
Finance leases
On March 31, 2015, the net amount
of aircraft, furniture and fittings subject to financial leasing was R$ 5,694 (R$ 6,662 in 2014).
Property, plant and equipment
pledged
On March 31, 2015, the loans
and financing were secured by land, buildings and machinery of R$1,957, 387 (R$2,291,344 in 2014).
RAÍZEN ENERGIA S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
| a) | Intangible assets roll-forward |
| |
Software licenses (3) | | |
Goodwill | | |
Agricultural partnership agreements | | |
Sugarcane supply agreements | | |
Right to use public concessions | | |
Technology (4) | | |
Others (1) | | |
Total | |
Cost | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| |
As at March 31, 2013 | |
| 87,396 | | |
| 1,517,602 | | |
| 9,375 | | |
| 157,439 | | |
| 10,811 | | |
| — | | |
| 18,692 | | |
| 1,801,315 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Additions | |
| 275 | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 275 | |
Capital contributions – Iogen (Note 11.d) | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 179,876 | | |
| — | | |
| 179,876 | |
Costa Rica Allocation (Note 11.c) | |
| — | | |
| (1,333 | ) | |
| (3,268 | ) | |
| 20,847 | | |
| — | | |
| — | | |
| — | | |
| 16,246 | |
Provisional allocation of Cerrado (Note 11.c) | |
| — | | |
| 33,663 | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 33,663 | |
Transfer | |
| 20,180 | | |
| — | | |
| — | | |
| — | | |
| 1,732 | | |
| 61,629 | | |
| — | | |
| 83,541 | |
Provision for losses (5) | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| (6,569 | ) | |
| — | | |
| (6,569 | ) |
Accumulated translation adjustments | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 1,553 | | |
| 1,553 | |
As at March 31, 2014 | |
| 107,851 | | |
| 1,549,932 | | |
| 6,107 | | |
| 178,286 | | |
| 12,543 | | |
| 234,936 | | |
| 20,245 | | |
| 2,109,900 | |
Additions | |
| 13,992 | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 13,992 | |
Final allocation of the acquisition of Cerrad0 (11.c) | |
| — | | |
| (9,003 | ) | |
| 12,303 | | |
| 3,230 | | |
| — | | |
| — | | |
| — | | |
| 6,530 | |
Retirements | |
| (1 | ) | |
| — | | |
| 1 | | |
| — | | |
| (2 | ) | |
| — | | |
| — | | |
| (2 | ) |
Transfer | |
| 28,333 | | |
| (2,483 | ) | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 25,850 | |
Provision for losses (5) | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| (55,060 | ) | |
| — | | |
| (55,060 | ) |
Accumulated translation adjustments | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 3,775 | | |
| 3,775 | |
As at March 31, 2015 | |
| 150,175 | | |
| 1,538,446 | | |
| 18,411 | | |
| 181,516 | | |
| 12,541 | | |
| 179,876 | | |
| 24,020 | | |
| 2,104,985 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Amortization | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
As at March 31, 2013 | |
| (71,544 | ) | |
| (431,380 | ) | |
| (879 | ) | |
| (32,536 | ) | |
| (1,040 | ) | |
| — | | |
| (9,664 | ) | |
| (547,043 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Amortization expense in the year | |
| (7,877 | ) | |
| — | | |
| (880 | ) | |
| (11,700 | ) | |
| (2,162 | ) | |
| — | | |
| (4,983 | ) | |
| (27,602 | ) |
Transfers | |
| (11 | ) | |
| — | | |
| — | | |
| — | | |
| (107 | ) | |
| — | | |
| — | | |
| (118 | ) |
As at March 31, 2014 | |
| (79,432 | ) | |
| (431,380 | ) | |
| (1,759 | ) | |
| (44,236 | ) | |
| (3,309 | ) | |
| — | | |
| (14,647 | ) | |
| (574,763 | ) |
Amortization expense in the year | |
| (12,621 | ) | |
| — | | |
| (4,044 | ) | |
| (11,718 | ) | |
| (2,466 | ) | |
| — | | |
| (1,283 | ) | |
| (32,132 | ) |
Retirements | |
| — | | |
| — | | |
| — | | |
| — | | |
| 3 | | |
| — | | |
| — | | |
| 3 | |
Transfers (2) | |
| (3,760 | ) | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| (3,760 | ) |
As at March 31, 2015 | |
| (95,813 | ) | |
| (431,380 | ) | |
| (5,803 | ) | |
| (55,954 | ) | |
| (5,772 | ) | |
| — | | |
| (15,930 | ) | |
| (610,652 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Net carrying value: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
As at March 31, 2015 | |
| 54,362 | | |
| 1,107,066 | | |
| 12,608 | | |
| 125,562 | | |
| 6,769 | | |
| 179,876 | | |
| 8,090 | | |
| 1,494,333 | |
As at March 31, 2014 | |
| 28,419 | | |
| 1,118,552 | | |
| 4,348 | | |
| 134,050 | | |
| 9,234 | | |
| 234,936 | | |
| 5,598 | | |
| 1,535,137 | |
| (1) | Intangible assets registered
in Raízen Trading, corresponding to the portfolio of customers, and licenses to operate in Europe and the United States. |
| (2) | Includes the transfer from
property, plant and equipment in the amount of R$24,573, and transfer of the reverse merger of Curupay in the amount of (R$ 2,483
) (Note 11.d.iv ). |
| (3) | As at March 31, 2015, software
licenses, net, amounted to R$ 1,421 (R$ 2,842 in 2014). The Company is a lessee in certain financial leasing operation agreements. |
| (4) | As at March 31, 2015, the
ethanol second generation(“E2G”) thecnology is concluded and ready for the use. The Company is building the first
ethanol second generation facility in Brazil. The facility will have a production capacity of 40 million liters of ethanol, and
will use technology developed by Iogen. This technology was granted to RESA with the exclusive contractual right to use and sell
it in the territories in which Raízen operates. Amortization will start when the plant is ready for use, which is expected
to be in the first semester of 2015, and will continue over the estimated period of financial returns from the technology. |
| (5) | On March 31, 2015, the
Company impaired technology intangible assets related to ethanol second generation of R$ 55,060 (R$ 6,569 in 2014) in the consolidated
statement of income as other expenses (Note 25). |
RAÍZEN ENERGIA S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
Goodwill
Goodwill refers to the
expectation of future profitability of the entities acquired by the Company. Goodwill was amortized on a straight-line basis through
March 31, 2009, prior to the adoption of IFRS. As at March 31, 2015 and 2014, the balance of goodwill was as follows:
|
|
|
|
|
2015 |
|
2014 |
In
the acquisition of Costa Rica Canavieira Ltda. (Note 30.2.i) |
|
57,169 |
|
57,169 |
In the acquisition of Cerrado
Açúcar e Álcool S.A. (Note 30.1.ii) |
|
24,660 |
|
33,663 |
In the acquisition of Cosan
S.A. Açúcar e Álcool (atual RESA) |
|
558 |
|
558 |
In the acquisition of Univalem
S.A. Açúcar e Álcool |
|
5,018 |
|
5,018 |
In the acquisition of Usina
Açucareira Bom Retiro S.A. |
|
81,575 |
|
81,575 |
In the acquisition of Usina
Benálcool |
|
149,247 |
|
149,247 |
In the acquisition of Usina
Santa Luíza |
|
42,348 |
|
42,348 |
In the acquisition of Usina
Zanin Açúcar e Álcool |
|
98,380 |
|
98,380 |
In the acquisition of Vertical |
|
4,313 |
|
4,313 |
In the acquisition of shares
of TEAS |
|
4,818 |
|
7,301 |
In the acquisition of Grupo
Corona |
|
380,003 |
|
380,003 |
In the acquisition of Grupo
Destivale |
|
42,494 |
|
42,494 |
In the acquisition of Grupo
Mundial |
|
87,435 |
|
87,435 |
In the organization of FBA
- Franco Brasileira S.A. Açúcar e Álcool |
|
4,407 |
|
4,407 |
In the merger of Curupay
S.A. Participações |
|
109,841 |
|
109,841 |
In capital payment of Mundial |
|
14,800 |
|
14,800 |
|
|
1,107,066 |
|
1,118,552 |
Analysis of
impairment of cash-generating units containing goodwill
As described in Note 2.3 l, the
Company reviews property, plant and equipment for impairment at least once a year.
The Company tests goodwill for
impairment at least annually (Note 2.3 l).
Goodwill is allocated to cash-generating
units, identified according to the operating region, as follows:
|
|
Operating
– Regional |
2015 |
|
2014 |
Piracicaba |
129,742 |
|
138,744 |
Jaú |
558 |
|
558 |
Araraquara |
554,394 |
|
554,394 |
Araçatuba |
303,400 |
|
303,400 |
Assis |
109,840 |
|
109,840 |
Others |
9,132 |
|
11,616 |
Total |
1,107,066 |
|
1,118,552 |
Long-term non-financial assets
which are not subject to amortization are revised whenever there are indications of impairment.
RAÍZEN ENERGIA S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
The Company determines recoverable
value using the value in use method (Note 13), which is based on a projection of the expected discounted cash flows from the cash-generating
units, as determined by management on the basis of budgets, taking into account the assumptions for each cash-generating unit
and using information available in the market and referring to past performance.
The value in use is estimated
on the basis of the present value of future cash flows, according to the Company's best estimates. Cash flows from the continued
use of the related assets are adjusted for specific risks of the assets.
The discounted cash flows were
prepared for a period of 20 years, without taking into account a growth rate. The discount rates corresponds to a pre-tax rate
estimated at 6.5% per year.
The main assumptions used were:
commodity sales price expectations over the long term, productivity of the agricultural areas, performance of TRS, and operating
and administrative costs. All future cash flows were discounted at a rate that reflects the specific risks applicable to the relevant
assets in each cash-generating unit.
On the basis of the annual tests,
no impairment charge against assets or goodwill was recognized in the years ended March 31, 2015 or 2014, except for the provision
for losses, disclosed as item 5 above. Determination of the recoverability of assets depends on certain key assumptions, as described
above. These assumptions are influenced by market, technological and economic conditions that exist at the time of the test, and
so it is not possible to ascertain whether impairment losses will occur in the future or, if they do, whether they will be material.
| 15. | Trade accounts payable |
|
|
|
2015 |
|
2014 |
|
|
|
|
Materials
and services |
438,656 |
|
511,313 |
Sugarcane |
129,640 |
|
126,550 |
Current |
568,296 |
|
637,863 |
Materials and services mainly
refers to equipment and machinery acquired that will be settled in the next 12 months.
The sugarcane harvest period,
which takes place between April and December each year, on average, has a direct impact on the balances with sugarcane suppliers
and the corresponding harvesting, loading and transport services.
RAÍZEN ENERGIA S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
|
|
Financial charges |
|
|
|
|
|
|
Purpose |
|
Floating/fixed
rate |
|
Effective
annual average interest rate (1) |
|
2015 |
|
2014 |
|
Maturity |
|
|
|
|
|
|
|
|
|
|
|
Classification of debts by
currency |
|
|
|
|
|
|
|
|
|
|
Denominated in Brazilian
Reais |
|
|
|
|
|
5,856,201 |
|
4,527,519 |
|
|
Denominated in dollars |
|
|
|
|
|
4,619,226 |
|
3,128,269 |
|
|
|
|
|
|
|
|
10,475,427 |
|
7,655,788 |
|
|
Nature of debts (2): |
|
|
|
|
|
|
|
|
|
|
BNDES |
|
URTJLP |
|
8.0% (7.7% in 2014) |
|
1,306,322 |
|
1,415,767 |
|
October
2025 |
BNDES |
|
Fixed rate |
|
4.1% (4.3% in 2014) |
|
1,218,098 |
|
657,742 |
|
November
2023 |
BNDES |
|
UMBND |
|
6.6% (6.7% in 2014) |
|
81,657 |
|
44,477 |
|
January
2024 |
Debentures |
|
CDI |
|
13.7% (11.6% in 2014) |
|
471,020 |
|
467,421 |
|
October
2018 |
Debentures |
|
IPCA |
|
15.1% (17.1% in 2014) |
|
350,187 |
|
324,243 |
|
October
2020 |
Advance payments |
|
Dollar (US) +
LIBOR |
|
1.7% (2.0% in 2014) |
|
863,123 |
|
1,076,882 |
|
September
2017 |
Term Loan Agreement |
|
Dollar (US) +
LIBOR |
|
1.5% (1.7% in 2014) |
|
2,248,675 |
|
1,019,233 |
|
December
2015 |
Working capital |
|
Fixed rate |
|
(14% in 2014) |
|
- |
|
5,383 |
|
March
2015 |
Senior Notes Due 2017 |
|
Dollar (US) |
|
7.0% (7.0% in 2014) |
|
1,297,921 |
|
915,585 |
|
February
2017 |
Resolution 2471 (PESA) |
|
IGP-M |
|
10.7% (11.4% in 2014) |
|
832,213 |
|
806,703 |
|
April
2023 |
Resolution 2471 (PESA) |
|
Fixed rate |
|
3.0% (3.0% in 2014) |
|
84 |
|
91 |
|
October
2025 |
Resolution 2471 (PESA) |
|
CDI |
|
13.0% (10.9% in 2014) |
|
717,478 |
|
643,623 |
|
October
2020 |
Resolution 2471 (PESA) |
|
Fixed rate |
|
4.9% (4.8% in 2014) |
|
96,610 |
|
111,720 |
|
January
2024 |
Credit notes |
|
URTJLP |
|
(10.6% in 2014) |
|
- |
|
102 |
|
May 2014 |
Finame/Leasing |
|
Fixed rate |
|
6.5% (5.5% in 2014) |
|
67,176 |
|
50,246 |
|
November
2014 |
Agribusiness Receivables
Certificates (“CRA”) |
|
CDI |
|
12.6% |
|
605,109 |
|
- |
|
December
2019 |
CRA |
|
IPCA |
|
14.3% |
|
110,247 |
|
- |
|
December
2021 |
|
|
Dollar (US) |
|
Miscellaneous |
|
209,507 |
|
116,570 |
|
Miscellaneous |
|
|
|
|
|
|
10,475,427 |
|
7,655,788 |
|
|
Transaction costs: |
|
|
|
|
|
|
|
|
|
|
BNDES |
|
|
|
|
|
(4,379 |
) |
(3,135 |
) |
|
CRA |
|
|
|
|
|
(11,619 |
) |
|
|
|
Rural credit |
|
|
|
|
|
(68 |
) |
|
|
|
Debentures |
|
|
|
|
|
(4,532 |
) |
(5,185 |
) |
|
Advance payments |
|
|
|
|
|
(1,717 |
) |
(5,854 |
) |
|
Term Loan Agreement |
|
|
|
|
|
(20,716 |
) |
- |
|
|
Senior Notes Due 2017 |
|
|
|
|
|
(6,443 |
) |
(7,143 |
) |
|
Credit notes |
|
|
|
|
|
(310 |
) |
(952 |
) |
|
|
|
|
|
|
|
(49,784 |
) |
(22,269 |
) |
|
|
|
|
|
|
|
10,425,643 |
|
7,633,519 |
|
|
Current |
|
|
|
|
|
(1,377,898 |
) |
(1,122,633 |
) |
|
Non-current |
|
|
|
|
|
9,047,745 |
|
6,510,886 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (1) | The effective annual interest
rate corresponds to the contractual interest rate of the agreement plus LIBOR, Reference Unit to adjusted Long-Term Interest Rate
(“URTJLP”), General Market Price Index (“IGP-M”) or Monetary Unit of Banco Nacional do Desenvolvimento
( “UMBND”), as applicable. |
| (2) | The loans and financing
are generally secured by promissory notes issued by the Company. In some cases, sureties are also given by its subsidiaries, by
Raízen Combustíveis S.A. or by shareholders, in addition to collateral such as: i) credit rights arising from
energy sales agreements (BNDES); ii) CTN and mortgage of land (PESA); iii) property, plant and equipment (Note 13); and iv) fiduciary
lien on the assets financed (Finame). |
RAÍZEN ENERGIA S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
The maturities of the non-current
amounts of loans and financing, net of amortization of transaction costs, are as follows:
|
|
|
|
|
2015 |
|
2014 |
13
to 24 months |
|
2,194,832 |
|
1,735,825 |
25 to 36
months |
|
1,183,603 |
|
1,576,290 |
37 to 48
months |
|
1,625,948 |
|
593,017 |
49 to 60
months |
|
1,396,340 |
|
1,107,656 |
61 to 72
months |
|
2,170,176 |
|
697,353 |
73 to 84
months |
|
232,881 |
|
574,401 |
85 to 96
months |
|
134,536 |
|
100,042 |
Greater
than 97 months |
|
109,429 |
|
126,302 |
|
|
9,047,745 |
|
6,510,886 |
PESA – Resolution
2471
From 1998 to 2000 the Company
renegotiated debt related to agricultural funding with several financial institutions, thereby reducing financial costs to annual
interest rates below 10.7% and guaranteeing the settlement of the debt with the assignment and transfer of CTNs, restricted Brazilian
treasury bills redeemable on the debt maturity dates. In doing so it took advantage of the incentive introduced by Resolution
No. 2471, issued by the Central Bank of Brazil on February 26, 1998. This debt is settled through redemption of CTNs and the compliance
with the contractual dispositions, as mentioned in Note 9.
Senior Notes Due 2017
On January 26, 2007, the subsidiary
Raízen Energy Finance Limited issued in the international capital markets, pursuant to Regulations S and 144A, US$ 400,000
thousands of Senior Notes that bear interest at a rate of 7% per annum, payable semi-annually in February and August of each year.
BNDES
These are funds raised by the
Company and its direct and indirect subsidiaries for financing cogeneration and greenfield projects and for renewing cane fields,
establishing new cane fields (Prorenova), and to finance the construction of the E2G facility.
As at March 31, 2015, the Company
had unused lines of credit available from BNDES amounting to R$ 510,167 (R$ 1,227,872 in 2014). Use of these lines of credit is
conditional upon meeting certain contractual conditions.
Advances on foreign exchange
contracts and credit notes
Advances on foreign exchange
contracts and credit notes were obtained from several banking institutions. The advances on foreign exchange were paid in February
2015, in the amount of US$ 100 million of principal, plus U$ 606,000 of interest, through the Company’s subsidiary Raízen
Energia S.A.. The total amount was R$ 283,803 million. The credit notes will be settled against export proceeds in 2020. These
transactions bear interest at rates of 13% per annum, payable semi-annually and at the maturity date.
FINAME
This refers to financing operations
under FINAME – Financiamento de Máquinas e Equipamentos (Machinery and Equipment Financing), made available
through several financial institutions, to be used for investment in property, plant and equipment. These loans are subject to
effective interest of 4.9% per annum, payable monthly. The loans are secured by liens on the financed assets.
RAÍZEN ENERGIA S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
Term Loan Agreement
(syndicated loan)
On December 5, 2012, the indirect
subsidiary Raízen Cayman Limited obtained a syndicated loan from several financial institutions in the amount of US$ 450
million. The principal and the interest, US$ 450million and US$ 2,267, respectively, was paid on March 30, 2015, totaling R$ 1,450,873.
On April 8, 2014, the Company
obtained syndicated loans from various financial institutions, amounting to US$ 250million. The loan is subject to exchange rate
variations in relation to the US dollar plus interest at the quarterly LIBOR and annual rate fixed of 1.4% p.a., giving an effective
average rate of 1.63% p.a. The principal is to be repaid in March 2018 and 2019.
On March
30, 2015, the indirect subsidiary Raízen Cayman Limited, signed a loan from a syndicate composed of several global commercial
banks, in the amount of R$ 1,443,600 (US$ 450 million). The loan is subject to the exchange variations of the US dollar plus interest
at the quarterly Libor and rate of 1.2% p.a., giving an effective average rate of 1.47% p.a. payable quarterly. The principal
repaid on April 27, 2020. Through this syndicate, the Company also obtained a Revolving Credit Facility in the amount of $ 285
million, maturing on April 27, 2020.
Export prepayment financing
agreement
Between the years 2009 and 2013,
the Group entered into several export prepayment financing agreements. These contracts are subject to the exchange rate variations
relating to the US dollar and bear LIBOR interest (quarterly and annually), resulting in an effective average interest rate of
1.7% p.a., with final maturity in September 2017.
Issuing of Agribusiness Receivables
Certificates (“CRAs”)
In October 2014, RESA and its
subsidiaries issued CPR (Rural Product Note) related to the Agribusiness Receivables Certificatesamounting to R$ 675,000 and maturing
in December 2021. The funds raised will be used exclusively in the ordinary course of Raízen's activities related to agribusiness,
including the operations, investments and financing needs related to the production, marketing, processing or manufacturing of
agricultural products, inputs, machinery and implements used in agricultural activities.
|
|
Annual
interest rate |
|
Effective
annual average interest rate |
|
|
|
Date
of proceeds |
|
|
Index |
|
|
|
Principal |
|
|
Maturity |
CDI |
|
- |
|
12.6% |
|
573,013 |
|
21/10/2014 |
|
Dec/19 |
IPCA |
|
5,69% |
|
14.3% |
|
101,987 |
|
21/10/2014 |
|
Dec/21 |
Debentures
On October 21, 2013, the CVM
approved the registration by RESA of its first public issue of simple debentures, and 750,000 non-convertible unsecured debentures
were issued, in three series, with a unit face value of R$ 1 , giving a total of R$ 750,000.
RAÍZEN ENERGIA S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
The net proceeds of the issue,
amounting to R$ 747,710, were used in full as follows: (i) to reinforce RESA’s cash in the case of the first and second
series debentures; and, (ii) to fund part of RESA’s investments in the 2013/2014 harvest, both in the agricultural and the
industrial area, pursuant to Law 12,431 in the case of the third series.
|
Index |
|
Annual
interest rate |
|
Effective
annual average interest rate |
|
Principal |
|
Date
of proceeds |
|
Maturity |
|
|
|
|
|
|
|
|
|
|
|
|
1ª
Series |
CDI |
|
0.89% |
|
13.6% |
|
105,975 |
|
25/10/2013 |
|
October
2018 |
2ª
Series |
CDI |
|
0.94% |
|
13.7% |
|
340,000 |
|
28/10/2013 |
|
October
2018 |
3ª
Series |
IPCA
(*) |
|
6.38% |
|
15.1% |
|
304,025 |
|
29/10/2013 |
|
October
2020 |
(*) National Extended Consumer
Price Index.
Covenants
On March 31, 2015 and 2014, the
Company had loans and financing agreement contracts with covenants relating to cash generation, debt ratios and other. These covenants
are being observed by the Company and do not restrict its capacity in its ordinary course of business.
Fair value
As at March 31, 2015 and 2014,
the consolidated carrying values and fair value of loans and financing were as follows:
|
Carrying
value |
|
Fair
value |
|
|
2015 |
|
2014 |
|
2015 |
|
2014 |
|
|
|
|
|
|
|
|
|
|
Senior Notes
Due 2017 |
1,291,478 |
|
908,442 |
|
1,385,577 |
|
1,003,938 |
|
Other loans
and financing |
9,134,165 |
|
6,725,077 |
|
9,134,165 |
|
6,725,077 |
|
|
10,425,643 |
|
7,633,519 |
|
10,519,742 |
|
7,729,015 |
|
The fair value of the Senior
Notes due in 2017 is based on prices quoted at the balance sheet dates (Note 27.j).
The fair value of other loans
and financing is close to their amortized cost.
|
|
|
|
2015 |
|
2014 |
|
Installment
payments (Refis IV) |
166,822 |
|
697,492 |
|
ICMS |
25,701 |
|
56,832 |
|
Social Security
(INSS) |
23,018 |
|
24,181 |
|
COFINS |
24,369 |
|
20,235 |
|
IRRF (withholding
income tax) |
10,041 |
|
7,506 |
|
FGTS (government
severance indemnity fund for employees) |
5,543 |
|
5,587 |
|
IOF (tax
on financial transactions) |
3,639 |
|
3,636 |
|
PIS |
5,297 |
|
4,439 |
|
IPI (excise
tax) |
550 |
|
547 |
|
Others |
3,673 |
|
3,491 |
|
|
268,653 |
|
823,946 |
|
Current |
99,537 |
|
156,572 |
|
Non-current |
169,116 |
|
667,374 |
|
RAÍZEN ENERGIA S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
The
breakdown of current and non-current liabilities is as follows:
|
|
|
2015 |
|
2014 |
Current |
|
|
|
Taxes payable |
80,127 |
|
89,162 |
Installments
taxes – reimbursable (Note 10) |
18,510 |
|
65,326 |
Installments
taxes – non-reimbursable |
900 |
|
2,084 |
|
99,537 |
|
156,572 |
Non-current |
|
|
|
Installments
taxes – reimbursable (Note 10) |
150,901 |
|
632,218 |
Tax incentive
– ICMS |
18,215 |
|
31,393 |
Installments
taxes – non-reimbursable |
- |
|
3,763 |
|
169,116 |
|
667,374 |
|
268,653 |
|
823,946 |
The
amounts payable over one year are scheduled to mature as follows:
|
|
|
2015 |
|
2014 |
13
to 24 months |
18,510 |
|
66,422 |
25 to 36
months |
17,791 |
|
65,611 |
37 to 48
months |
17,408 |
|
64,936 |
49 to 60
months |
17,408 |
|
63,702 |
61
to 72 months |
17,408 |
|
63,702 |
73
to 84 months |
17,408 |
|
63,702 |
85
to 96 months |
17,408 |
|
63,702 |
As from
97 months |
45,775 |
|
215,597 |
|
169,116 |
|
667,374 |
Tax Amnesty and Refinancing
– Law 11.941/09 and Provisional Measure (MP) 470/09 ("Refis IV")
On May 27 and October 13, 2009,
Law 11.941 and MP 470 were passed by the Brazilian government, setting up an amnesty and tax refinancing program (Refis IV) that
allows taxpayers to settle federal tax obligations though refinancing programs. The obligations covered by Refis IV include other
federal taxes challenged in the courts. Discounts on existing penalties and interest are available under the program.
Laws No. 12.865 of October 10,
2013, No. 12.973 of May 14, 2014 and No. 12.996 of June 18, 2014, reopened the deadline for inclusion of debts in Refis IV. This
benefit was obtained by the Company. The Company is now awaiting the announcement of the consolidation of the values included
in the program.
With the publication of the Law
No. 13.043 of November 14, 2014, conversion of MP 651, it became possible to liquidate federal debts in installments, through
the use of tax losses and negative basis of social contributions, including subsidiaries and parent companies, direct or indirect,
conditional on payment of 30% of the balance in installments (as per article 33 of the Law).
After the evaluation of the financial
benefits resulting from the application of this legal provision, Cosan chose to pay off the debt installments pursuant to Law
11,941 / 2009, since the installments were its responsibility (they pre-existed the formation of Raízen).
RAÍZEN ENERGIA S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
The amounts after application
of this legal provision are as follows:
Payment in installments of tax debits – Refis IV | |
Total | |
| |
| |
On March 31, 2014 | |
| 697,492 | |
Recognition of interest and previous payments to the publication of Law No. 13.043 | |
| (9,737 | ) |
Adhesion to the installment program | |
| 12,782 | |
Use of tax losses and negative basis of social contributions (1) | |
| (372,627 | ) |
Cash payment of 30% | |
| (132,647 | ) |
Financial discount | |
| (28,441 | ) |
| |
| | |
On March 31, 2015 | |
| 166,822 | |
| (1) | Includes
tax losses of Cosan in the amount of R$ 171,750, recorded as preferred shares payable
by the Company (Notes 10.a, 18.a and 21.a). The remaining balance used to settle the
REFIS IV comprises: (a) assignment of credits of Cosan and subsidiaries of R$ 142,761;
(b) Raízen’s own credits assigned to payment of R$ 55,870; and (c) Raízen’s
own credits for payment the Refis IV of Raízen Araraquara in the amount of R$
2,246. |
According to Raízen´s
agreement (Note 1), any payment linked to the debt in installments existing before June 1, 2011, shall be fully refunded to the
Company by Cosan. Thus, due to the settlement of the debts under Refis IV, under Law No. 13.043, the balance receivable from Cosan
was substantially lowered. See Note 10.
Tax incentive – ICMS
On September 11, 2008,
the subsidiary Raízen Caarapó Ltda. signed Agreement No. 331/2008 ("TC 331") with the state of Mato Grosso
do Sul ("MS"). This agreement guaranteed until September 22, 2018, the tax benefit on the sugar manufacturing operations
in this state, equivalent to 67% of the outstanding balance of ICMS. The amount recognized in the income statement on March 31,
2015, totaled R$ 9,340 (R $ 6,830 in 2014) (Note 24.a).
The Company, through
its subsidiary Raízen Centroeste, benefits from a state incentive program in the State of Goiás, in the form of
financing of part of the ICMS payments, called "Programa de Desenvolvimento Industrial de Goiás - Produzir",
with the deferral of tax payments. The Company's right to the benefit is conditional on its complying with all the obligations
determined by the program, the terms of which relate to factors under the Company's control.
For the years ended
March 31, 2015, 2014 and 2013, the incentives in the consolidated statement of income were R$50,217, R$25,260 and R$22,930, respectively,
recorded under "Other operating income, net" (Note 25).
RAÍZEN ENERGIA S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
| 18. | Income
and social contribution taxes |
| a) | Reconciliation
of income tax and social contribution benefit (expense): |
| |
2015 | | |
2014 | | |
2013 | |
Income before taxes | |
| (52,393 | ) | |
| 188,515 | | |
| 377,849 | |
Nominal tax rate (34%) | |
| 17,814 | | |
| (64,095 | ) | |
| (128,469 | ) |
Reconciling items: | |
| | | |
| | | |
| | |
Equity interest in income of associates | |
| (11,539 | ) | |
| (11,708 | ) | |
| (7,856 | ) |
Non-deductable expenses related to gifts, donations, class associations | |
| (2,373 | ) | |
| (3,379 | ) | |
| (3,752 | ) |
Income tax rate difference of presumed profit taxation method (ii) | |
| 56,814 | | |
| — | | |
| — | |
Reversal of deferred tax liability related tocorporate restructuring (i) | |
| 43,341 | | |
| — | | |
| — | |
Tax incentive – ICMS – (Note 17) | |
| 20,249 | | |
| 10,911 | | |
| 15,264 | |
Tax benefit - Reintegra (Note 6) | |
| 17,442 | | |
| — | | |
| — | |
Exchange variation on overseas investee | |
| 11,254 | | |
| 3,046 | | |
| 2,149 | |
Capital gain on dilution of equity interest (Note 11.c.1) | |
| 10,313 | | |
| — | | |
| — | |
Non-taxable financial results | |
| — | | |
| — | | |
| 82,691 | |
Deferred taxes on provisions contributed upon formation of the JV | |
| — | | |
| — | | |
| 16,924 | |
Interest on own equity | |
| — | | |
| 13,600 | | |
| — | |
Others | |
| 77 | | |
| 3,993 | | |
| 944 | |
Income and social contribution taxes benefit (expense) | |
| 163,392 | | |
| (47,632 | ) | |
| (22,105 | ) |
Effective
rate | |
| (311.86% | ) | |
| (25.27% | ) | |
| (5.85% | ) |
| (i) | Refers
to the reversal of deferred tax liabilities on temporary differences that had been generated
by changes in the useful lives and fair value step up of property, plant and equipment
upon transition to IFRS. Upon the contribution of energy cogeneration’s assets
(internal reorganization – Note 30.1.i) to a separate entity the deferred tax liabilities
were reversed, as the new subsidiary follows the presumed profit regime and under such
tax regime depreciation or amortization is not deductible. |
| (ii) | Refers
to the effect of the difference between the tax rate applicable to presumed profit regime,
which is followed by the Company’s cogeneration business, and the tax rate applicable
to real profit regime, which is followed by parent company and other company’s
subsidiaries. |
a.1) Recoverable income tax and
social contributions
|
|
|
2015 |
|
2014 |
Income
tax |
404,499 |
|
269,244 |
Social contributions |
140,720 |
|
90,649 |
|
545,219 |
|
359,893 |
|
|
|
|
Current |
36,859 |
|
359,893 |
|
|
|
|
Noncurrent |
508,360 |
|
- |
a.2) Payable income tax and social
contributions
|
|
|
2015 |
|
2014 |
Income
tax |
6,432 |
|
570 |
Social contributions |
2,430 |
|
190 |
|
|
|
|
Current |
8,862 |
|
760 |
RAÍZEN ENERGIA S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
Beginning in August 2013, the
Company started to antecipate income tax and social contributions based on estimated revuene, which had a positive effect on the
recoverable taxes accounted for as current and non-current assets (Note 18.a.1). The prepaid tax was offset against other federal
taxes (Pis, Cofins and IOF).
b) Deferred income tax
(IRPJ) and social contribution (CSLL) assets and liabilities:
| |
| | |
| | |
| | |
2015 | | |
2014 | |
Assets (liabilities) | |
Base | | |
IRPJ 25% | | |
CSLL 9% | | |
Total | | |
Total | |
Tax losses: | |
| | |
| | |
| | |
| | |
| |
Tax loss carryforwards (corporate income tax) | |
| 747,943 | | |
| 186,986 | | |
| — | | |
| 186,986 | | |
| 280,409 | |
Negative calculation basis (social contributions) | |
| 747,994 | | |
| — | | |
| 67,319 | | |
| 67,319 | | |
| 102,023 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Temporary differences: | |
| | | |
| | | |
| | | |
| | | |
| | |
Tax goodwill from downstream merger | |
| 402,349 | | |
| 100,587 | | |
| 36,211 | | |
| 136,798 | | |
| 180,830 | |
Provision for tax, civil and labor risks | |
| 319,697 | | |
| 79,924 | | |
| 28,773 | | |
| 108,697 | | |
| 90,549 | |
Provision for write-off against goodwill | |
| 288,549 | | |
| 72,137 | | |
| 25,969 | | |
| 98,106 | | |
| 98,106 | |
Miscellaneous provisions and other temporary differences | |
| 462,334 | | |
| 115,583 | | |
| 41,610 | | |
| 157,193 | | |
| 133,480 | |
Foreign exchange variance – Cash basis | |
| 1,645,455 | | |
| 411,364 | | |
| 148,091 | | |
| 559,455 | | |
| 118,464 | |
Total | |
| | | |
| 966,581 | | |
| 347,973 | | |
| 1,314,554 | | |
| 1,003,861 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Biological assets | |
| (41,795 | ) | |
| (10,449 | ) | |
| (3,762 | ) | |
| (14,211 | ) | |
| (23,168 | ) |
Unrealized derivatives | |
| (861,077 | ) | |
| (215,269 | ) | |
| (77,497 | ) | |
| (292,766 | ) | |
| (38,687 | ) |
Capitalized cost of loans | |
| (223,508 | ) | |
| (55,877 | ) | |
| (20,116 | ) | |
| (75,993 | ) | |
| (75,134 | ) |
Fair value of property, plant and equipment | |
| (336,074 | ) | |
| (84,018 | ) | |
| (30,247 | ) | |
| (114,265 | ) | |
| (126,541 | ) |
Revision of property, plant and equipment useful life | |
| (943,854 | ) | |
| (235,964 | ) | |
| (84,947 | ) | |
| (320,911 | ) | |
| (270,649 | ) |
Amortized tax goodwill | |
| (805,913 | ) | |
| (201,477 | ) | |
| (72,531 | ) | |
| (274,008 | ) | |
| (234,465 | ) |
Total | |
| | | |
| (803,054 | ) | |
| (289,100 | ) | |
| (1,092,154 | ) | |
| (768,644 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Total deferred taxes | |
| | | |
| 163,527 | | |
| 58,873 | | |
| 222,400 | | |
| 235,217 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Deferred taxes – assets, net | |
| | | |
| | | |
| | | |
| 299,314 | | |
| 256,611 | |
Deferred taxes – liabilities, net | |
| | | |
| | | |
| | | |
| (76,914 | ) | |
| (21,394 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Total deferred taxes | |
| | | |
| | | |
| | | |
| 222,400 | | |
| 235,217 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
RAÍZEN ENERGIA S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
| c) | The
roll-forward of the deferred taxes is set out below: |
|
2015 |
|
2014 |
|
2013 |
|
|
|
|
|
|
|
|
Balance
at beginning of the year |
235,217 |
|
209,031 |
|
(72,668 |
) |
Recognized
in the statement of income |
224,576 |
|
(18,562 |
) |
82,299 |
|
Deferred
taxes on other comprehensive income |
(13,178 |
) |
57,251 |
|
(36,778 |
) |
Merger of
subsidiaries |
4,486 |
|
- |
|
- |
|
Deferred
taxes on allocation of the acquisition of Cerrado (Nota 30.1.ii) |
(6,530 |
) |
- |
|
- |
|
Deferred
taxes on goodwill (Notes 1 and 21.a) |
- |
|
- |
|
241,107 |
|
Deferred
taxes on fair value allocation of Costa Rica (Note 30.2.1.i) |
- |
|
(17,357 |
) |
- |
|
Use of tax
losses and negative base of social contribution to settle Refis IV |
(222,492 |
) |
- |
|
- |
|
Write off
of contractual land leasing rights |
- |
|
1,111 |
|
- |
|
Other adjustments
in connection with the formation of the joint venture |
321 |
|
3,743 |
|
(4,929 |
) |
|
|
|
|
|
|
|
Balance
at the end of the year |
222,400 |
|
235,217 |
|
209,031 |
|
| d) | Estimated time of realization |
In assessing the deferred
tax recovery capacity, management takes into consideration future taxable income projections and changes in temporary differences.
When it is more likely that part of or all taxes will not be realized a provision is recognized. There is no validity period for
using net operating loss (NOL); however, the use of prior-year accumulated losses is limited to 30% of annual taxable income.
As at March 31, 2015,
the Company had the following expected realization of deferred tax assets:
|
|
|
Years: |
2015 |
2014 |
2015 |
- |
309,386 |
2016 |
363,308 |
278,672 |
2017 |
530,292 |
117,973 |
2018 |
99,024 |
67,153 |
2019 |
35,696 |
33,226 |
2020 |
147,700 |
171,310 |
After 2020 |
138,534 |
26,141 |
|
|
|
Total |
1,314,554 |
1,003,861 |
As at March 31, 2015,
the Company’s subsidiaries Curupay Agroenergia Ltda., Agrícola Ponte Alta Ltda., Raízen Biotecnologia S.A.
and Unimodal Ltda had accumulated tax losses of R$ 5,608 (R$ 32,422 in 2014) for which no deferred tax assets are recognized,
as the use of these losses is not considered probable.
RAÍZEN ENERGIA S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
| 19. | Provision for tax, civil
and labor risks |
During
the process of the formation of the joint venture (Notes 1 and 21.a), it was agreed that Cosan should reimburse the Company for
the cost of lawsuits in progress before its incorporation, when these are effectively settled by the courts. On March 31, 2015
and 2014, the balances of such claims to be reimbursed and non-reimbursable are as follows:
|
|
|
|
|
2015 |
|
2014 |
|
Non-reimbursable
claims |
|
Reimbursable
claims |
|
Total |
|
Total |
Tax |
4,972 |
|
26,218 |
|
31,190 |
|
152,178 |
Civil |
4,243 |
|
28,838 |
|
33,081 |
|
33,806 |
Labor |
59,780 |
|
120,429 |
|
180,209 |
|
157,290 |
|
68,995 |
|
175,485 |
|
244,480 |
|
343,274 |
Also, at the time of
the formation of the joint venture, it was agreed that the Company would reimburse Cosan for the amount of judicial deposits made
before its incorporation, when these are effectively received. On March 31, 2015 and 2014, the balance of refundable and non-refundable
deposits was as follows:
|
|
|
|
|
2015 |
|
2014 |
|
Court
deposits of the Company |
|
Refundable
court deposits |
|
Total |
|
Total |
Tax (1 and 2) |
19,926 |
|
142,924 |
|
162,850 |
|
250,413 |
Civil |
3,231 |
|
5,852 |
|
9,083 |
|
6,277 |
Labor |
10,190 |
|
23,674 |
|
33,864 |
|
25,726 |
|
33,347 |
|
172,450 |
|
205,797 |
|
282,416 |
| (1) | As at March 31, 2015
and 2014, this included R$ 112,153 (R$ 86,169 in 2014) in refundable judicial deposits, which are being constituted under Law
11.941 (Note 17). |
| (2) | On March 31, 2015, this
was offset against the balance of lawsuits in the amount of R$ 132,543 and R $ 30,745 of its own and refundable escrow deposits,
respectively. |
| i) | Non-reimbursable claims |
|
Tax |
|
Civil |
|
Labor |
|
Total |
|
As at March 31, 2014 |
92,249 |
|
6,140 |
|
47,927 |
|
146,316 |
|
Provisioned in the year (i) |
35,295 |
|
2,984 |
|
43,042 |
|
81,321 |
|
Write-offs / reversals (ii) |
(132,760 |
) |
(4,340 |
) |
(36,888 |
) |
(173,988 |
) |
Interest |
10,188 |
|
(541 |
) |
5,699 |
|
15,346 |
|
As at March 31, 2015 |
4,972 |
|
4,243 |
|
59,780 |
|
68,995 |
|
| (i) | Accounted
for in the consolidated statement of income of the year as "Other operating income
(expenses)" (Note 25), except for the INSS provision on revenues, of R$ 31,546 (R$
31,301 in 2014), reclassified from "Taxes payable" in current liabilities. |
| (ii) | Includes
compensation relating to court deposits in the amount of R$ 132,543. The amount of R$
132,543, described as write off / reversals refers to the offset of judicial deposits
with the tax provision. This offset has no impact on the profit and loss for the year
ended. |
RAÍZEN ENERGIA S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
|
Tax |
|
Civil |
|
Labor |
|
Total |
|
As at March 31, 2014 |
59,929 |
|
27,666 |
|
109,363 |
|
196,958 |
|
|
|
|
|
|
|
|
|
|
Provisioned in the year |
6,600 |
|
4,245 |
|
57,275 |
|
68,120 |
|
Write-offs / reversals (ii) |
(39,212 |
) |
(6,232 |
) |
(52,945 |
) |
(98,389 |
) |
Interest |
(1,099 |
) |
3,159 |
|
6,736 |
|
8,796 |
|
|
|
|
|
|
|
|
|
|
As at March 31, 2015 |
26,218 |
|
28,838 |
|
120,429 |
|
175,485 |
|
(i) The roll-forward of refundable
claims does not affect the consolidated statement of income.
(ii) Includes
compensation relating to judicial deposits of R$ 30,745.
|
Tax |
|
Civil |
|
Labor |
|
Total |
|
As at March 31, 2014 |
152,178 |
|
33,806 |
|
157,290 |
|
343,274 |
|
|
|
|
|
|
|
|
|
|
Provisioned in the year |
41,895 |
|
7,229 |
|
100,317 |
|
149,441 |
|
Write-offs / reversals |
(171,972 |
) |
(10,572 |
) |
(89,833 |
) |
(272,377 |
) |
Interest |
9,089 |
|
2,618 |
|
12,435 |
|
24,142 |
|
|
|
|
|
|
|
|
|
|
As at March 31, 2015 |
31,190 |
|
33,081 |
|
180,209 |
|
244,480 |
|
Contingencies for probable
losses
The
main tax claims as at March 31, 2015 and 2014 were as follows:
|
|
|
|
|
|
|
2015 |
|
2014 |
|
Non-reimbursable
claims |
|
Reimbursable
claims |
|
Total |
|
Total |
INSS
(i) |
1,000 |
|
1,166 |
|
2,166 |
|
123,096 |
ICMS
credits (ii) |
- |
|
21,086 |
|
21,086 |
|
17,151 |
IPI |
1,358 |
|
1,031 |
|
2,389 |
|
967 |
PIS
and COFINS |
- |
|
892 |
|
892 |
|
2,970 |
Others |
2,614 |
|
2,043 |
|
4,657 |
|
7,994 |
|
4,972 |
|
26,218 |
|
31,190 |
|
152,178 |
| i) | The accrued INSS amount
corresponds to the amounts relating to social security contributions on billings, in conformity with art. 22-A of Law 8.212/91.
The constitutionality of this article is being challenged in the courts. The Company made judicial deposits related to the lawsuit
in the amount of R$ 163,288. Therefore, both balances are presented net in these financial statements. |
RAÍZEN ENERGIA S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
| ii) | The amount accrued as ICMS
credits refers to: (a) tax assessment notices received which, despite being challenged at the administrative or court levels,
the Company's legal counsel believes the likelihood of loss is probable; (b) use of credits and financial charges in matters where
the interpretation of the Company's management and legal counsel differs from that of the tax authorities. |
The Company is a party to various
civil lawsuits relating to (i) indemnity for tangible damages and pain and suffering, (ii) contractual disputes, (iii) civil class
actions to abstain from burning sugarcane straw, and (iv) environmental claims.
The Company is also a party to
various labor claims filed by former employees and employees of outsourced service providers who are claiming the payment of overtime,
night shift premium and hazardous work premiums, job re-admittance, deductions from payroll (such as confederation dues, union
dues, etc).
Contingencies classified
as having a possible risk of loss
The main tax contingences classified
as having a possible risk of loss are as follows:
|
|
|
2015 |
|
2014 |
|
Non-
reimbursable
claims |
|
Reimbursable
claims |
|
Total |
|
Total |
|
|
|
|
|
|
|
|
ICMS (i) |
126,789 |
|
755,420 |
|
882,209 |
|
799,019 |
INSS (ii) |
43,506 |
|
352,740 |
|
396,246 |
|
353,723 |
IPI (iii) |
3,171 |
|
384,689 |
|
387,860 |
|
368,929 |
IRPJ and CSLL (iv) |
22,473 |
|
301,857 |
|
324,330 |
|
305,325 |
PIS and COFINS (v) |
- |
|
462,021 |
|
462,021 |
|
318,923 |
Offsets against IPI credits - IN 67/98 (vi) |
- |
|
119,891 |
|
119,891 |
|
115,921 |
Others |
18,418 |
|
232,293 |
|
250,711 |
|
222,238 |
|
214,357 |
|
2,608,911 |
|
2,823,268 |
|
2,484,078 |
Refers mainly to (i) fines on
tax assessment received from May 2005 through March 2006, and May 2006 and March 2007, alleging the Company had not paid the ICMS
originating from agricultural joint operations and scheduled manufacture; and (ii) ICMS on shipments of crystal sugar exportation.
The tax inspector argues that such products are classified as semi-finished products which, according to the ICMS regulations,
would be subject to taxation; (iii) tax assessments relating to ICMS rate difference arising from sales of ethanol to companies
located in other Brazilian states whose state enrollment numbers were subsequently cancelled; (iv) tax assessments relating to
credit disallowance in regard to purchase of products from companies that, subsequently, had their registrations revoked and declared
ineligible; and (v) payment of ICMS arising from disallowances of credits of diesel fuel used in the agro-industrial production
process.
RAÍZEN ENERGIA S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
| ii) | Possible
losses on INSS-related claims mainly involve: |
(i) In regard to the validity
and constitutionality of MPS/SRP Regulatory Instruction 03/2005, which restricted the constitutional exemption of social security
contributions in relation to revenues derived from exports made exclusively through direct sales, it is understood that exports
made through export or trading companies will start to be taxed; (ii) payment of SENAR contributions in direct and indirect export
transactions, where the tax authorities understand that there is no right to constitutional exemption; and, (iii) payment of social
security contributions on resale of products in the domestic market and to third parties, which is not included within the social
security tax basis and which is levied only on the gross revenue deriving from the effective production of the entity rather than
on the products purchased.
| iii) | IPI
– Excise tax on manufactured products |
Normative Instruction 67/98 of
the Brazilian Federal Revenue Service (“SRF”) has validated the procedure adopted by manufacturing plants that made
sales without calculating and paying IPI related to several types of sugarcane sugar, including demerara, higher refined, special
refined, special extra refined and granulated refined sugars, from July 6, 1995 through November 16, 1997, as well as amorphous
refined sugar sales from January 14, 1992 through November 16, 1997. This rule was put into effect in the related proceedings
filed by the Brazilian Federal Revenue Service. The risk of loss was classified as possible based on the opinion of the Company’s
legal advisers.
In December 2011, the Company
received tax assessment notices issued by the Brazilian Federal Revenue Service, related to IRPJ and CSLL for calendar years 2006
to 2009, challenging: (i) the deductibility of amortization expenses relating to certain specific items of goodwill; (ii) the
offset of tax loss carryforwards; and (iii) the tax on differences of revaluations of property, plant and equipment items. The
taxes assessments amounted to R$ 496,522 (R$ 551,852 in 2014). The Company submitted its defense in January 2012 and, together
with its legal counsel, assessed as having a likelihood of possible loss the amount of R$ (R$ 229,443 in 2014). The remaining
balance is R$ 246,672 (R$ 75,882 in 2014).
Additionally, in February 2014,
Raízen Tarumã received tax assessments, in the amount of 45,421, issued by the RFB, charging income tax and social
contributions for the calendar years 2009 to 2012, and questioning: (i) the amortization of goodwill; and (ii) the offsetting
of tax losses and negative basis of social contributions calculation. The Company presented its defense in January 2012 and, together
with its legal counsel, classified this case as being a possible loss.
The remaining balance of the
contingency IRPL and CSLL and social contributions, in the amount of R $ 9,764, relates
to various factors. Management, together with its legal counsel, classified this balance being a possible loss.
In non-refundable lawsuits in
November 2014, the Company received assessment notices from the RFB dealing with the disallowance of non-cumulative PIS / COFINS
arising from goods and services purchased in the domestic merchant and offset against withholding tax and social contributions
/ income tax. Because disallowed credits are linked to goods and services used in the Company's supply chain, the disallowance
is improper and illegal under existing legislation (Law 10,637 / 02 and Law 10,833 / 03), which is why the loss of classification
is classified as possible.
RAÍZEN ENERGIA S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
Refers mainly to the disallowances
of PIS and COFINS credits under the non-cumulative system, set forth in Laws 10,637/2002 and 10,833/2003, respectively. Such disallowances
mainly came from the restrictive interpretation by the Brazilian Federal Revenue Service of the concept of "inputs",
as well as differences with respect to the interpretation of these laws. The disputes are at the administrative phase.
| vi) | Offsets
against IPI credits – IN 67/98 |
Normative Instruction SRF 67/98
made it possible to obtain a refund of IPI tax payments for sales of refined amorphous sugar from January 14, 1992, through November
16, 1997. In view of this rule, RESA offset the amounts paid during the relevant periods against other tax liabilities. However,
the Brazilian Federal Revenue Service denied its application for both reimbursement and offsetting of such amounts. RESA challenged
this ruling in an administrative proceeding.
Upon being notified to pay tax
debts resulting from offsets in light of certain changes introduced by IN SRF 210/02, RESA filed a writ of mandamus and applied
for a preliminary injunction seeking to stay enforcement in relation to the offset taxes, in an attempt to prevent the tax authorities
from demanding the relevant tax debts in court. The preliminary injunction was granted by the court. The legal counsel of the
Company in charge of this suit has deemed it a possible loss.
b)
Civil and labor
As at March 31, 2015 and 2014,
the nature of civil and labor claims, whose likelihood of loss is assessed as possible, is similar to the previous litigation
mentioned above. The civil and labor claims assessed as having a possibility of loss are as follows:
|
|
|
|
|
2015 |
|
2014 |
|
Non-reimbursable
claims |
|
Reimbursable
claims |
|
Total |
|
Total |
|
|
|
|
|
|
|
|
Civil |
125,549 |
|
312,448 |
|
437,997 |
|
314,220 |
Labor |
156,318 |
|
333,645 |
|
489,963 |
|
496,821 |
|
281,867 |
|
646,093 |
|
927,960 |
|
811,041 |
Sales
The Company is the parent
company of entities that operate in the sugar, ethanol and energy cogeneration market. Sales agreements are managed on a consolidated
basis. Therefore, the Company, together with its group entities, are responsible for total sales commitments.
Sales of commodities are essentially
made at spot prices. However, the Company enters into several sugar and ethanol agreements to sell future crops of those products.
RAÍZEN ENERGIA S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
The amounts of sugar
sales agreements, in metric tons, on the date of the financial statements are set out below:
Years |
2015 |
|
2014 |
|
|
|
|
2014/2015 |
- |
|
2,242,000 |
2015/2016 |
3,564,000 |
|
514,000 |
2016/2017 |
514,000 |
|
514,000 |
2017/2018 |
514,000 |
|
- |
2018/2019 |
514,000 |
|
- |
|
|
|
|
Total |
5,106,000 |
|
3,270,000 |
Data presented in
the table above were not examined by Company’s independent auditors.
The amounts of ethanol
sales agreements, in cubic meters, on the date of the financial statements are out forth below:
Years |
2015 |
|
2014 |
|
|
|
|
2014/2015 |
- |
|
1,375,479 |
2015/2016 |
1,630,429 |
|
175,000 |
2016/2017 |
146,016 |
|
- |
Total |
1,776,445 |
|
1,550,479 |
Data presented in
the table above were not examined by Company’s independent auditors.
The amounts of power and steam
sales agreements, in MWh and metric tons, on the date of the financial statements are set out below:
|
Electric
power (in MWh) |
|
Steam
(in metric tons) |
Years |
2015 |
|
2014 |
|
2015 |
|
2014 |
|
|
|
|
|
|
|
|
2014/2015 |
- |
|
1,894,665 |
|
- |
|
- |
2015/2016 |
1,876,707 |
|
1,824,147 |
|
140,000 |
|
- |
2016/2017 |
1,825,395 |
|
1,825,395 |
|
- |
|
- |
2017/2018 |
1,824,147 |
|
1,824,147 |
|
- |
|
- |
2018/2019 |
1,958,175 |
|
1,958,175 |
|
- |
|
- |
After 2019/2020 |
13,683,222 |
|
13,817,250 |
|
- |
|
- |
|
|
|
|
|
|
|
|
Total |
21,167,646 |
|
23,143,779 |
|
140,000 |
|
- |
Data presented in
the table above were not examined by Company’s independent auditors.
Purchases
In the normal course
of its business, the Company enters into sugarcane purchase agreements with third parties, which are mainly related to securing
a portion of its production for the following harvest season. The quantity of sugarcane to be purchased is calculated based on
the estimate of the quantity to be crushed per location. Amounts payable by the Company are determined at the end of each harvest,
in accordance with prices published by CONSECANA.
RAÍZEN ENERGIA S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
The amounts of the crop purchase
agreements, in metric tons, on the date of the financial statements are set out below:
Years |
2015 |
|
2014 |
|
|
|
|
2014/2015 |
- |
|
28,070,662 |
2015/2016 |
28,252,062 |
|
25,002,452 |
2016/2017 |
25,173,669 |
|
21,732,360 |
2017/2018 |
21,214,536 |
|
18,049,020 |
2018/2019 |
17,194,669 |
|
14,433,131 |
After 2019/2020 |
83,895,574 |
|
80,792,716 |
|
|
|
|
Total |
175,730,510 |
|
188,080,341 |
The Company has entered
into several agreements to purchase equipment utilized for plant maintenance and expansion, as well as to support energy cogeneration
projects, in the total amount of R$129,787 (R$264,995 in 2014).
Lease Agreements
Operating leases
The
Company has entered into several operating lease agreements to secure land for sugarcane plantations. These agreements will mature
in 20 years.
The minimum payments and variables
are calculated based on the ATR issued by CONSECANA and the volume of sugarcane per hectare, as defined in the agreements. The
expense commitments of the agreements, on the date of the financial statements, are set out below:
|
2015 |
|
2014 |
Within
one year |
506,971 |
|
544,665 |
Between
one and five years |
1,463,769 |
|
1,719,548 |
More
than five years |
889,938 |
|
1,141,130 |
|
|
|
|
Total |
2,860,678 |
|
3,405,343 |
Non-financial
information is not part of the scope of financial statement auditing. Consequently, ATR issued by CONSECANA and the volume of
sugarcane per hectare were not examined by the Company’s independent auditors.
RAÍZEN ENERGIA S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
| a) | Capital
transactions and capital reserves |
On November 30, 2012, the Extraordinary
General Meeting discussed and approved a stock split of 2,066,237,649 common shares issued by the Company, based on a ratio of
1: 2.43036163648, with no change in the value of capital stock, resulting in a total of 5,021,704,714 common shares, all held
by the Company's sole shareholder.
Additionally, the shareholders
approved, without increasing the Company's capital stock, the conversion of 119,109,080 common shares into preferred shares, as
follows:
|
Conversion |
Class
A preferred shares |
1 |
Class
B preferred shares |
118,345,603 |
Class
C preferred shares |
763,476 |
Total |
119,109,080 |
As a result of the conversion
of shares, the Company’s capital stock was as follows:
|
Shares |
|
Common |
|
Preferred |
|
Total |
Common |
4,902,595,634 |
|
- |
|
4,902,595,634 |
Class
A |
- |
|
1 |
|
1 |
Class
B |
- |
|
118,345,603 |
|
118,345,603 |
Class
C |
- |
|
763,476 |
|
763,476 |
Total |
4,902,595,634 |
|
119,109,080 |
|
5,021,704,714 |
Subsequently, on the same date,
the merger of REPSA was approved, consisting of the residual portion of its shareholders’ equity, in the amount of R$998,835,
and subsequent cancellation of shares corresponding to its capital stock.
Immediately thereafter, new shares
were issued to replace the cancelled shares, which were held as follows by the shareholders Shell and Cosan:
|
Shareholders |
|
Shell |
|
Cosan |
|
Total |
Common |
2,451,297,817 |
|
2,451,297,817 |
|
4,902,595,634 |
Class
A |
- |
|
1 |
|
1 |
Class
B |
- |
|
118,345,603 |
|
118,345,603 |
Class
C |
763,476 |
|
- |
|
763,476 |
Total |
2,452,061,293 |
|
2,569,643,421 |
|
5,021,704,714 |
The amount of R$998,835 was allocated
by the issuing of 1,000,000,000 new common shares, of which R$181,417 and R$817,417 were allocated to "Shareholders’
capital " and "Capital reserve", respectively. The shareholders’ capital increased from R$4,818,583 to R$5,000,000,
and comprised of 6,021,704,714 shares, as follows:
RAÍZEN ENERGIA S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
|
Shareholders |
|
Shell |
|
Cosan |
|
Total |
Common |
2,951,297,817 |
|
2,951,297,817 |
|
5,902,595,634 |
Class
A |
- |
|
1 |
|
1 |
Class
B |
- |
|
118,345,603 |
|
118,345,603 |
Class
C |
763,476 |
|
- |
|
763,476 |
Total |
2,952,061,293 |
|
3,069,643,421 |
|
6,021,704,714 |
At the Extraordinary General
Meeting held on February 7, 2014, the Company's shareholders discussed and approved the capital increase of R$8,427, through the
issuing of 7,818,300 new Class B preferred shares, fully subscribed by Cosan, paid on May 2, 2014.
On June 23, 2014, the shareholder
Cosan transferred to Cosan Investimentos e Participações S.A. (“CIP”) all 2.951.297.817 ordinary shares
held, with usufruct reserve, to Cosan until October 1, 2021, together with all political rights, right to receive interest on
own capital and the right to receive dividends linked to such shares.
The Extraordinary General Meeting
held on January 21, 2015, discussed and approved the conversion of 100,000 Class C preferred shares into an equal number of preferred
Class D shares, all held by the shareholder Shell Brazil Holdings BV.
On March 31, 2015, the shareholders’
social capital was R$ 5,016,354 (R$ 5,016,354 in 2014). This balance is presented deducted from the balance of redeemable preferred
shares in the amount of R$ 93,300 (R$ 264,276 in 2014), totaling R$ 4,923,054(R$ 4,752,078 in 2014).
As at the year ended March 31,
2015, the shareholders’ capital was as follows:
|
Shareholders |
|
Shell |
|
CIP |
|
Cosan |
|
Total |
Common |
2,951,297,817 |
|
2,951,297,817 |
|
- |
|
5,902,595,634 |
Class
A |
- |
|
- |
|
1 |
|
1 |
Class
B |
- |
|
- |
|
133,242,457 |
|
133,242,457 |
Class
C |
663,476 |
|
- |
|
- |
|
663,476 |
Class
D |
100,000 |
|
- |
|
- |
|
100,000 |
As
at March 31, 2015 |
2,952,061,293 |
|
2,951,297,817 |
|
133,242,458 |
|
6,036,601,568 |
As
at March 31, 2014 |
2,952,061,293 |
|
- |
|
3,084,540,275 |
|
6,036,601,568 |
Redeemable preferred shares
The tax benefits arising from
the use of tax loss carryforwards and goodwill tax amortization, recognized before the formation of the joint venture, will be
reimbursed to Cosan to the extent that the Company uses them to reduce taxes payable. Such reimbursements will be made by means
of payment of exclusive dividends to Cosan, the holder of Class B preferred shares, in the amount of the tax benefit used by the
Company in the period from January to December.
RAÍZEN ENERGIA S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
On July 19, 2013, the Company's
shareholders approved the payment of supplemental dividends of R$6,916, in addition to those accrued in the annual financial statements,
without interest.
On March 31, 2014, the Company
proposed the allocation of dividends to the holders of Class B preferred shares in the amount of R$ 43,636, corresponding to partial
use of the tax benefit for the year balance (Note 10.a).
As at March 31, 2014, the Company
reviewed the balance of preferred shares, and determined the reversal of R$ 11,812 of the obligation to Cosan, based on the fact
that the tax benefit will not be used by the company.
Due to the merger of IPL into
REPSA, and subsequently into the Company, Class C preferred shares were issued to guarantee exclusive dividends to Shell of R$3,538,
through the use by the Company of tax credits and the funds in the current account, comprising the merged net assets (Note 10.a.).
As mentioned in Notes 10 and
17, during the year ended March 31, 2015, the Company joined the program for settlement of the debt installments on RFB by the
use of NOL, resulting in decrease of Class B preferred shares, totaling R$ 157,010.
On March 31, 2015, the balance
of preferred shares (Class B and C) was R$ 93,300 (R$ 264,276 in 2014). The counterparts to shareholders' equity are recorded
under the related parties (Note 10.a), of which R$ 89,762 (R$ 260,738 in 2014) belonging to Cosan, is classified as non-current
liabilities, and R$ 932 and R$ 2,606 (R$ 932 and R$ 2,606 in 2014) belonging to Shell, are classified in current liabilities and
non-current, respectively.
Capital reserve
The capital reserve corresponds
to the share premium arising from the difference between the subscription price paid in consideration for the shares and their
par value. Such a reserve can only be used to increase capital, absorb losses, redeem, reimburse or purchase shares or pay accumulated
dividends to preferred shares.
In addition, the balance includes
surplus paid by the Company in the acquisition of additional interest in the subsidiary TEAS, amounting to R$ 5,973 (Note 11.d.2).
As mentioned in Notes 10, 17
and 18, Cosan settled the debts in the Brazilian Tax Authority (“RFB) through the use of NOL. Therefore, the capital reserve
was reduced by R$ 164,377, comprising: i) R$ 157,010 arising from ownership of Cosan, with obligation to NOL of preferred shares
payable (Note 10.a); and ii) R $ 7,367 corresponding to the NOL from the subsidiary Benálcool Açúcar e Álcool
Ltda., and for which the related tax credits were not included in the balance of Class B preferred shares in the formation of
Raízen.
RAÍZEN ENERGIA S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
Special goodwill reserve
Following the merger of IPL into
REPSA (Note 1), whose main assets comprised investments held by it in the capital stock of REPSA and the goodwill recorded based
on tax records, recognized upon the formation of the ethanol, sugar and bioenergy joint venture, such goodwill started to be deductible
for income tax and social contributions purposes. Therefore, a special goodwill reserve was recognized in the equity of Raízen
Energia against deferred tax assets, of R$241,107—equivalent to the tax benefit of 34% arising from the amortization of
the goodwill.
Due to the reverse merger of
Curupay into TEAS, whose main assets correspond to the investment held by the capital of Curupay and whose goodwill is determined
based on the tax books, that goodwill will be deductible for tax purposes in relation to income tax and social contributions on
net income. Therefore, the Company recorded a special goodwill reserve in shareholders' equity, reflecting the effect of reverse
merger of Curupay into TEAS in return for their investment, in the same amount of R$ 2,004.
| b) | Dividends
and interest on own capital |
Pursuant to the Company's bylaws,
the shareholders are entitled to a minimum mandatory dividend of 1% of the net income reported at year end, as adjusted in accordance
with article 202 of the Brazilian Corporate Law. The amounts of the legal reserves and dividends of the years ended March 31,
2015 ,2014 and 2013, were as follows:
| |
2015 | | |
2014 | | |
2013 | |
| |
| | |
| | |
| |
Net income | |
| 110,999 | | |
| 140,883 | | |
| 355,744 | |
(-) Consolidated results of operations of REPSA (Note 1) | |
| — | | |
| — | | |
| (239,782 | ) |
Net income | |
| 110,999 | | |
| 140,883 | | |
| 115,962 | |
Legal reserve at 5% | |
| (5,550 | ) | |
| (7,044 | ) | |
| (5,798 | ) |
Tax incentives | |
| — | | |
| (30,256 | ) | |
| — | |
Calculation basis for dividend distribution | |
| 105,449 | | |
| 103,583 | | |
| 110,164 | |
Mandatory minimum dividends | |
| (1,054 | ) | |
| (1,036 | ) | |
| (1,102 | ) |
Dividends to holders of Class B preferred shares | |
| (15,221 | ) | |
| (43,636 | ) | |
| (66,877 | ) |
Dividends to holders of Class D preferred shares | |
| (791 | ) | |
| — | | |
| — | |
(-) Prepaid dividends | |
| — | | |
| — | | |
| 8,873 | |
Remaining dividends payable | |
| (17,066 | ) | |
| (43,636 | ) | |
| (58,004 | ) |
| |
| | | |
| | | |
| | |
Interest on own capital | |
| — | | |
| (34,000 | ) | |
| — | |
Dividends payable | |
| (17,066 | ) | |
| (78,672 | ) | |
| (59,106 | ) |
On March 31, 2015, the dividends
accrued in the previous fiscal year were paid in full.
RAÍZEN ENERGIA S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
| ii) | Interest
on own capital |
On December 31, 2013, at the
Extraordinary General Meeting, the shareholders of RESA discussed and approved the distribution of interest on own capital to
each shareholder of R$ 40,000 for the period of January 1, 2013, through December 31, 2013, to be individually credited in the
proportion of 50% to each shareholder. Therefore, the net amount to be paid in the year ended March 31, 2014 was R$ 34,000.Interest
on own capital paid or provisioned is recorded as a financial expense for tax purposes. However, for purposes of these consolidated
financial statements, the amount is disclosed as distribution of net income for the year, and the gross amount is reclassified
to shareholders’ equity, as the tax benefits arising from the distribution are included in the net income for the year.
| c) | Other
comprehensive income |
| i) | Foreign
currency translation adjustments – CTA |
Represents the exchange differences
from the translation of the financial statements of investees with functional currencies different than that of the parent company
into Brazilian Real.
On March 31, 2015, due to the
loss of significant influence in Codexis, the Company wrote off the balance of CTA in the amount of R $ 1,387.
| ii) | Net
derivative gain – hedge accounting |
This refers to changes in the
fair value arising from cash flow hedging of revenue from the export of raw sugar (called “VHP”), and exchange variations
on foreign exchange agreement advances (“ACCs”) and PPEs.
| iii) | Actuarial
liabilities |
These relate to gains and losses
from adjustment for changes in actuarial assumptions relating to the defined benefit plan. This component is recognized in other
comprehensive income. It will not be reclassified to income in subsequent periods.
The
following movement of valuation adjustments, ended March 31:
| |
2012 | | |
Comprehensive
Income | | |
2013 | | |
Comprehensive
Income | | |
2014 | | |
Comprehensive
Income | | |
2015 | |
Currency translation differences - CTA | |
| — | | |
| (240 | ) | |
| (240 | ) | |
| 1.082 | | |
| 842 | | |
| 535 | | |
| 1,377 | |
Actuarial losses on pension and post-employment plans | |
| — | | |
| — | | |
| — | | |
| (59 | ) | |
| (59 | ) | |
| (8,902 | ) | |
| (8,961 | ) |
Gain (loss) on cash flow hedges | |
| 28,228 | | |
| 71,391 | | |
| 99,619 | | |
| (111,071 | ) | |
| (11,452 | ) | |
| 34,284 | | |
| 22,832 | |
Total | |
| 28,228 | | |
| 71,151 | | |
| 99,379 | | |
| (110,048 | ) | |
| (10,669 | ) | |
| 25,917 | | |
| 15,248 | |
This refers to the appropriation
of 5% of the net income to a legal reserve, pursuant to the Company’s bylaws and in compliance with the Brazilian Corporate
Law.
RAÍZEN ENERGIA S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
| e) | Profit
retention reserve |
The remaining balance of net
income on March 31, 2014, after the allocations to the legal reserve and provisioning of dividends, approved at the Annual General
Meeting, on July 28, 2014,was allocated to the profit retention reserve.
The
remaining balance of net income on March 31, 2015, after the allocations to the legal reserve and provisioning of minimum dividends
payable calculation, was appropriated to the profit retention reserve until its final destination is approved at the Annual General
Meeting. Based on the Article 28 (vi ) of the Company's shareholder agreement, up to 80% of net income may be allocated to this
statutory reserve for operations and new investments and projects, and shall not exceed the percentage of 80 % of the share capital.
Incentive tax reserve
This corresponds to the effect
of the tax incentive recognized by the subsidiary Raízen Caarapó Açúcar e Álcool Ltda. (“Caarapó”)
on the consolidated shareholders’ equity. Caarapó entered into an agreement with the governemnt of the State of Mato
Grosso do Sul, which grants a tax benefit of 67% on the ICMS payable generated from the manufacturing process of sugar in the
state.
Basic earnings per share are
calculated by dividing the net income attributable to the shareholders by the weighted average of common shares outstanding during
the year.
The table below sets out the
data on net income and shares used to calculate basic and diluted earnings per share for the years ended March 31, 2015, 2014
and 2013 (in thousands, except in the case of amounts per share):
Basic and Diluted:
| |
2015 | | |
2014 | | |
2013 | |
Numerator | |
| | |
| | |
| |
Net income for the year | |
| 110,999 | | |
| 140,883 | | |
| 354,710 | |
Profit available to preferred shareholders | |
| (16,012 | ) | |
| (43,636 | ) | |
| (66,877 | ) |
Profit available to common shareholders | |
| 94,987 | | |
| 97,247 | | |
| 287,833 | |
| |
| | | |
| | | |
| | |
Denominator: | |
| | | |
| | | |
| | |
Weighted average of number of outstanding common shares (in thousands) | |
| 5,902,596 | | |
| 5,902,596 | | |
| 5,305,629 | |
Basic and diluted earnings per common share (reais per share) | |
| 0.02 | | |
| 0.02 | | |
| 0.05 | |
The Company does not have outstanding
common shares that may give rise to a dilution or debt convertible into common shares. Therefore, basic and diluted earnings per
share are equal.
RAÍZEN ENERGIA S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
| |
2015 | | |
2014 | | |
2013 | |
Gross sales of products and services | |
| 10,330,454 | | |
| 10,055,383 | | |
| 9,063,189 | |
Sales taxes and deductions | |
| (591,317 | ) | |
| (600,162 | ) | |
| (594,951 | ) |
Net
sales | |
| 9,739,137 | | |
| 9,455,221 | | |
| 8,468,238 | |
The sales are also segregated
in the following items:
| |
2015 | | |
2014 | | |
2013 | |
Products and services revenue | |
| 9,703,302 | | |
| 9,182,269 | | |
| 8,192,289 | |
Hedge accounting loss | |
| (190,693 | ) | |
| — | | |
| 7,368 | |
Hedge accounting gain | |
| 231,740 | | |
| 261,929 | | |
| 268,581 | |
Commodities derivatives gain | |
| (5,212 | ) | |
| 11,023 | | |
| — | |
| |
| 9,739,137 | | |
| 9,455,221 | | |
| 8,468,238 | |
| 23. | Information
by segment |
The management of Raízen
Energia have defined the ethanol, sugar and bioenergy ("EAB") segment as the only operating segment, based on reports
used by the Chief Executive Officer (“CEO”) and the Board of Directors, in regard to making key decisions about
strategic and operational matters. The performance goals for evaluation purposes are defined and monitored for the EAB segment
as a whole.
The EAB segment comprises the
production and sale of ethanol and sugar originating from sugarcane processing, as well as energy cogeneration from the burning
of the sugarcane bagasse.
Since the assets are equally
used to produce sugar, ethanol and bioenergy, there is no disclosure of these assets by business segment.
The Company monitors the net
operating revenue deriving from the sale of its products in the domestic and foreign markets, as follows:
| |
2015 | | |
2014 | | |
2013 | |
Net sales | |
| | |
| | |
| |
Foreign market (1) | |
| 5,626,797 | | |
| 5,582,123 | | |
| 5,473,976 | |
Domestic market | |
| 4,112,340 | | |
| 3,873,098 | | |
| 2,994,262 | |
| |
| | | |
| | | |
| | |
Total | |
| 9,739,137 | | |
| 9,455,221 | | |
| 8,468,238 | |
(1) Includes sales made to customers
in Brazil under the export-related category.
RAÍZEN ENERGIA S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
The net sales are segregated
by product as follows:
|
|
2015 |
|
2014 |
|
2013 |
|
Net
sales |
|
|
|
|
|
|
|
Sugar |
|
4,242,437 |
|
4,353,084 |
|
4,353,994 |
|
Ethanol |
|
4,682,031 |
|
4,464,527 |
|
3,299,938 |
|
Power |
|
604,003 |
|
403,845 |
|
569,709 |
|
Other
products and services |
|
210,666 |
|
233,765 |
|
244,597 |
|
Total |
|
9,739,137 |
|
9,455,221 |
|
8,468,238 |
|
The percentage of
net sales by geographic area is as follows:
Geographic
area |
2015 |
|
2014 |
|
2013 |
Brazil |
46.80% |
|
45.81% |
|
40.27% |
Europe |
23.35% |
|
30.52% |
|
29.59% |
Asia |
21.11% |
|
13.26% |
|
15.75% |
Central
America |
2.07% |
|
3.25% |
|
7.57% |
North
America |
5.57% |
|
2.39% |
|
5.81% |
Africa
and Oceania |
1.10% |
|
4.77% |
|
1.01% |
Total |
100.00% |
|
100.00% |
|
100.00% |
The main EAB customers
in the years ended March 31, 2015 and 2014, which individually account for 5% or more of the Company's total revenue, were as
follows:
Customer |
|
2015 |
|
2014 |
|
2013 |
Raízen
Combustíveis S.A. |
|
10.89% |
|
15.30% |
|
6.23% |
Wilmar
Sugar Pte Ltd |
|
13.51% |
|
7.75% |
|
10.16% |
Sucden |
|
6.88% |
|
7.86% |
|
9.84% |
Camil
Alimentos S.A. |
|
5.60% |
|
5.12% |
|
- |
Cosan
S.A. Indústria e Comércio |
|
- |
|
- |
|
3.55% |
Petrobrás |
|
- |
|
- |
|
0.24% |
| 24. | Statement
of income by nature |
| a) | Reconciliation
of expenses by nature |
The Company has chosen to disclose
its statement of income by function, and therefore below it presents the details by nature:
|
2015 |
|
2014 |
|
2013 |
|
Raw
materials |
4,058,475 |
|
4,064,982 |
|
3,327,136 |
|
Depreciation
and amortization |
1,908,125 |
|
1,709,935 |
|
1,706,819 |
|
Personnel
expenses |
1,011,098 |
|
936,800 |
|
866,522 |
|
Cutting,
loading and transport (“CCT”) |
685,931 |
|
737,132 |
|
571,271 |
|
Maintenance
materials |
359,254 |
|
300,624 |
|
383,237 |
|
Contracted
labor |
167,579 |
|
191,171 |
|
233,042 |
|
Biological
assets and agricultural products |
31,383 |
|
73,361 |
|
227,746 |
|
Rents
and leasing |
201,741 |
|
217,991 |
|
209,892 |
|
Other
expenses |
693,111 |
|
487,756 |
|
267,853 |
|
|
9,116,697 |
|
8,719,752 |
|
7,793,518 |
|
RAÍZEN ENERGIA S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
|
|
2015 |
|
2014 |
|
2013 |
Costs
of sales |
|
8,064,341 |
|
7,542,579 |
|
6,698,108 |
Selling
expenses |
|
564,863 |
|
637,316 |
|
605,164 |
General
and administrative expenses |
|
487,493 |
|
539,857 |
|
490,246 |
|
|
9,116,697 |
|
8,719,752 |
|
7,793,518 |
| 25. | Other operating income,
net |
|
2015 |
|
2014 |
|
2013 |
|
Other operating income |
|
|
|
|
|
|
Capital
gain on dilution of equity interest (Nota 11.c 1.iii) |
30,333 |
|
- |
|
- |
|
Reversal
of provision for onerous contracts |
- |
|
1,079 |
|
14,951 |
|
Gain in
fair value of shares (i) |
40,366 |
|
- |
|
- |
|
Revenue
– tax incentive – ICMS (Note 17) |
50,217 |
|
25,260 |
|
22,930 |
|
Income from
sale of property, plant and equipment |
10,868 |
|
33,813 |
|
3,689 |
|
Revenue
from sale of scrap and waste |
8,670 |
|
10,211 |
|
8,562 |
|
Gain on
sale of ratoon |
3,444 |
|
- |
|
- |
|
Gain from
port operations |
3,294 |
|
8,779 |
|
1,396 |
|
Other income |
4,248 |
|
7,244 |
|
- |
|
|
151,440 |
|
86,386 |
|
51,528 |
|
Other
operating expenses |
|
|
|
|
|
|
Impairment
of intangible assets (Note 14) |
(55,060 |
) |
(6,569 |
) |
- |
|
Provision
for claims and paid indemnities (Note 19) |
(8,333 |
) |
(25,197 |
) |
(3,502 |
) |
Provision
for property, plant and equipment and intangible losses (Note 13 e 14) |
(9,027 |
) |
5,792 |
|
- |
|
Provision
for hybrid contingencies |
(7,680 |
) |
- |
|
- |
|
Other expenses |
- |
|
- |
|
(185 |
) |
|
(80,100 |
) |
(25,974 |
) |
(3,687 |
) |
|
71,340 |
|
60,412 |
|
47,841 |
|
(i) On March 10, 2015, the Company
signed a Stock Purchase Agreement relating to the sale of 5,573,319 shares of Codexis, Vivo and Vivo Fund Affiliates, together
"Vivo". The traded value was US$ 15,500, equivalent to approximately R$ 48,513. The sales of the share, at a fair value,
resulted in a gain of R$ 40,366, recorded as “other operation income”.
RAÍZEN ENERGIA S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
| 26. | Finance income (expenses),
net |
| |
2015 | | |
2014 | | |
2013 | |
Finance expenses | |
| | |
| | |
| |
Interest | |
| (600,514 | ) | |
| (443,560 | ) | |
| (399,615 | ) |
| |
| — | | |
| — | | |
| (5,710 | ) |
Indexation credits | |
| (71,644 | ) | |
| (58,754 | ) | |
| (60,067 | ) |
Bank expenses | |
| (14,732 | ) | |
| (7,529 | ) | |
| (546 | ) |
| |
| (686,890 | ) | |
| (509,843 | ) | |
| (465,938 | ) |
Less: capitalized amounts on qualified assets (Note 13) | |
| 30,951 | | |
| 44,296 | | |
| 41,940 | |
| |
| (655,939 | ) | |
| (465,547 | ) | |
| (423,998 | ) |
| |
| | | |
| | | |
| | |
Finance income | |
| | | |
| | | |
| | |
Income from financial investments | |
| 230,097 | | |
| 114,898 | | |
| 91,804 | |
Interest | |
| 222,002 | | |
| 96,207 | | |
| 68,800 | |
Indexation charges | |
| 14,983 | | |
| 28,316 | | |
| 24,903 | |
Financial
instrument measured at fair value through profit or loss | |
| — | | |
| 12,516 | | |
| — | |
Discounts earned | |
| 695 | | |
| 258 | | |
| 65 | |
| |
| 467,777 | | |
| 252,195 | | |
| 185,572 | |
| |
| | | |
| | | |
| | |
Foreign exchange variance (1) | |
| (1,042,138 | ) | |
| (292,073 | ) | |
| (27,519 | ) |
| |
| | | |
| | | |
| | |
Effect
of derivatives, net (2) | |
| 518,065 | | |
| (67,506 | ) | |
| (55,662 | ) |
| |
| | | |
| | | |
| | |
| |
| (712,235 | ) | |
| (572,931 | ) | |
| (321,607 | ) |
| (1) | Includes currency losses,
net, on foreign currency-denominated assets and liabilities |
| (2) | Includes realized and unrealized
option, swap and non deliverable forward (“NDFs”) transactions. |
Management of financial risk
The Company has exposure
to the following risks deriving from the use of financial instruments:
This note provides information
about the exposure to each risk, as well as the objectives, practices and processes used to measure and manage the risks. Additionally,
this note provides information regarding the Company’s management of capital.
RAÍZEN ENERGIA S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
| b) | Risk
management framework |
The Company has specific
treasury and trading policies that define the way in which risk management shall be effected. To monitor the activities and ensure
compliance with the Group’s policies it has two committees: (i) the Risk Committee, which meets on a weekly basis to analyze
the performance of commodities (mainly sugar) and exchange markets and decide on the hedge positions and pricing strategies
of sugar exports, in order to reduce the adverse effects of changes in price and exchange rates, and to monitor liquidity and
counterparty (credit) risks; and (ii) the Ethanol Committee, which meets on a monthly basis in order to analyze the risks related
to the sale of ethanol and the adequacy of the limits set in risk policies.
The Company is exposed
to market risks. The main market risks to which it is exposed are: (i) volatility of sugar and ethanol prices, (ii) volatility
of the exchange rate and, (iii) volatility of the interest rate. The contracting of financial instruments for hedging
purposes is made based on a periodic analysis of the exposure to risk that management intends to cover.
As at March 31, 2015
and 2014, the fair values relating to derivative financial instruments transactions for hedging or other purposes were measured
at fair value using observable inputs, such as prices quoted in active markets or discounted cash flows based on market curves,
and were as follows:
| |
Notional | | |
Fair value | |
| |
2015 | | |
2014 | | |
2015 | | |
2014 | |
Price risk | |
| | |
| | |
| | |
| |
Derivatives | |
| | |
| | |
| | |
| |
Futures contracts | |
| 1,660,432 | | |
| 1,336,437 | | |
| 409,316 | | |
| (12,053 | ) |
| |
| 1,660,432 | | |
| 1,336,437 | | |
| 409,316 | | |
| (12,053 | ) |
Exchange rate risk | |
| | | |
| | | |
| | | |
| | |
Exchange rate derivative | |
| | | |
| | | |
| | | |
| | |
Futures contracts | |
| (616,923 | ) | |
| (326,525 | ) | |
| (2,558 | ) | |
| 705 | |
Forward contracts | |
| (650,675 | ) | |
| 1,810 | | |
| 134,478 | | |
| 42,310 | |
Exchange rate lock-in | |
| (5,974 | ) | |
| 227,698 | | |
| 1,191 | | |
| 21,106 | |
Exchange rate swap | |
| (2,685,844 | ) | |
| 813,891 | | |
| 256,170 | | |
| (23,595 | ) |
| |
| (3,959,416 | ) | |
| 716,874 | | |
| 389,281 | | |
| 40,526 | |
Interest rate risk | |
| | | |
| | | |
| | | |
| | |
Interest derivatives | |
| (561,400 | ) | |
| 1,088,503 | | |
| (4,321 | ) | |
| (5,056 | ) |
| |
| (561,400 | ) | |
| 1,088,503 | | |
| (4,321 | ) | |
| (5,056 | ) |
Total | |
| | | |
| | | |
| 794,276 | | |
| 23,417 | |
| |
| | | |
| | | |
| | | |
| | |
Total current assets | |
| | | |
| | | |
| 759,306 | | |
| 200,588 | |
Total non-current assets | |
| | | |
| | | |
| 315,279 | | |
| 1,109 | |
| |
| | | |
| | | |
| | | |
| | |
Total assets | |
| | | |
| | | |
| 1,074,585 | | |
| 201,697 | |
Total current liabilities | |
| | | |
| | | |
| (224,078 | ) | |
| (166,175 | ) |
Total non-current liabilities | |
| | | |
| | | |
| (56,231 | ) | |
| (12,105 | ) |
| |
| | | |
| | | |
| | | |
| | |
Total liabilities | |
| | | |
| | | |
| (280,309 | ) | |
| (178,280 | ) |
| |
| | | |
| | | |
| | | |
| | |
RAÍZEN ENERGIA S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
This
risk derives from the possibility of oscillations in the market prices of goods sold by the Company – mainly VHP sugar (sugar
#11), refined sugar (#5 or white sugar) and ethanol – mainly through the subsidiary Raízen Trading LLP. These price
fluctuations can cause substantial changes in the revenue from the Company’s sales. To minimize this risk, the Company always
monitors the market, so as to be prepared for price fluctuations. In the table below the positions of derivative financial instruments
to cover risks of commodities price are shown:
Price risk: Outstanding derivatives of products in 2015 |
Derivatives |
|
Purchased/ Sold |
|
Market |
|
Contract |
|
Maturity |
|
Notional
(units) |
|
Notional
(R$ thousands) |
|
Fair value (R$ thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Future |
|
Sold |
|
NYSE LIFFE |
|
Sugar#5 |
|
Apr/15 |
|
5,050 t |
|
6,429 |
|
671 |
Future |
|
Sold |
|
NYSE LIFFE |
|
Sugar#5 |
|
Jul/15 |
|
5,850 t |
|
7,710 |
|
1,125 |
Future |
|
Sold |
|
NYSE LIFFE |
|
Sugar#5 |
|
Sep/15 |
|
7,800 t |
|
10,474 |
|
1,676 |
Future |
|
Sold |
|
NYSE LIFFE |
|
Sugar#5 |
|
Nov/15 |
|
2,850 t |
|
3,907 |
|
628 |
Future |
|
Sold |
|
ICE |
|
Sugar#11 |
|
Apr/15 |
|
386,047 t |
|
418,630 |
|
92,907 |
Future |
|
Sold |
|
ICE |
|
Sugar#11 |
|
Jun/15 |
|
474,545 t |
|
544,920 |
|
140,164 |
Future |
|
Sold |
|
ICE |
|
Sugar#11 |
|
Sep/15 |
|
611,508 t |
|
729,414 |
|
181,025 |
Future |
|
Sold |
|
ICE |
|
Sugar#11 |
|
Feb/16 |
|
145,701 t |
|
179,934 |
|
36,597 |
Future |
|
Sold |
|
ICE |
|
Sugar#11 |
|
Jun/16 |
|
44,858 t |
|
48,177 |
|
3,919 |
Future |
|
Sold |
|
ICE |
|
Sugar#11 |
|
Sep/16 |
|
43,537 t |
|
46,876 |
|
3,398 |
Future |
|
Sold |
|
OTC |
|
Sugar#11 |
|
Sep/15 |
|
- |
|
- |
|
687 |
Sub-total of future sugar sold |
|
|
|
|
|
1,727,746 t |
|
1,996,471 |
|
462,797 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Future |
|
Purchased |
|
NYSE LIFFE |
|
Sugar#5 |
|
Apr/15 |
|
(1,300) t |
|
(1,591) |
|
(109) |
Future |
|
Purchased |
|
ICE |
|
Sugar#11 |
|
Apr/15 |
|
(231,913) t |
|
(253,183) |
|
(57,508) |
Future |
|
Purchased |
|
ICE |
|
Sugar#11 |
|
Jun/15 |
|
(50,294) t |
|
(56,392) |
|
(13,494) |
Future |
|
Purchased |
|
ICE |
|
Sugar#11 |
|
Sep/15 |
|
(28,500) t |
|
(31,756) |
|
(6,197) |
Future |
|
Purchased |
|
ICE |
|
Sugar#11 |
|
Feb/16 |
|
(9,500) t |
|
(11,511) |
|
(2,165) |
Future |
|
Purchased |
|
ICE |
|
Sugar#11 |
|
Apr/16 |
|
(1,016) t |
|
(1,064) |
|
(60) |
Future |
|
Purchased |
|
ICE |
|
Sugar#11 |
|
Jun/16 |
|
(1,016) t |
|
(1,062) |
|
(60) |
Sub-total of future sugar purchased |
|
|
|
|
|
(323,539) t |
|
(356,559) |
|
(79,593) |
Sub-total of future sugar |
|
|
|
|
|
1,404,207 t |
|
1,639,912 |
|
383,204 |
Future
|
|
Sold |
|
BMFBovespa |
|
Ethanol |
|
Mar/15 |
|
17,700 m³ |
|
31,729 |
|
71 |
Future |
|
Sold |
|
BMFBovespa |
|
Ethanol |
|
May/15 |
|
7,860 m³ |
|
9,550 |
|
- |
Future |
|
Sold |
|
BMFBovespa |
|
Ethanol |
|
Jul/15 |
|
600 m³ |
|
720 |
|
6 |
Future |
|
Sold |
|
BMFBovespa |
|
Ethanol |
|
Aug/15 |
|
3,150 m³ |
|
3,797 |
|
43 |
Future |
|
Sold |
|
BMFBovespa |
|
Ethanol |
|
Sep/15 |
|
2,400 m³ |
|
2,940 |
|
- |
Future |
|
Sold |
|
BMFBovespa |
|
Ethanol |
|
Oct/15 |
|
2,400 m³ |
|
2,988 |
|
- |
Future |
|
Sold |
|
BMFBovespa |
|
Ethanol |
|
Nov/15 |
|
900 m³ |
|
1,146 |
|
- |
Future |
|
Sold |
|
BMFBovespa |
|
Ethanol |
|
Dec/15 |
|
900 m³ |
|
1,165 |
|
(7) |
Future |
|
Sold |
|
NYMEX |
|
Ethanol |
|
Apr/15 |
|
17,488 m³ |
|
7,360 |
|
1,640 |
Future |
|
Sold |
|
NYMEX |
|
Ethanol |
|
May/15 |
|
12,719 m³ |
|
5,515 |
|
1,663 |
Future |
|
Sold |
|
NYMEX |
|
Ethanol |
|
Jun/15 |
|
12,719 m³ |
|
5,515 |
|
1,711 |
Future |
|
Sold |
|
NYMEX |
|
Ethanol |
|
Jul/15 |
|
1,590 m³ |
|
615 |
|
(17) |
Future |
|
Sold |
|
NYMEX |
|
Ethanol |
|
Aug/15 |
|
1,590 m³ |
|
615 |
|
2 |
Future |
|
Sold |
|
NYMEX |
|
Ethanol |
|
Sep/15 |
|
1,590 m³ |
|
615 |
|
22 |
Future |
|
Sold |
|
CHGOETHNL |
|
Ethanol |
|
Apr/15 |
|
152,800 m³ |
|
198,677 |
|
10,160 |
Future |
|
Sold |
|
CHGOETHNL |
|
Ethanol |
|
May/15 |
|
56,800 m³ |
|
80,502 |
|
9,382 |
Future |
|
Sold |
|
CHGOETHNL |
|
Ethanol |
|
Jun/15 |
|
53,600 m³ |
|
76,490 |
|
9,575 |
Future |
|
Sold |
|
CHGOETHNL |
|
Ethanol |
|
Jul/15 |
|
40,800 m³ |
|
49,443 |
|
(1,320) |
RAÍZEN ENERGIA S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
Future |
|
Sold |
|
CHGOETHNL |
|
Ethanol |
|
Aug/15 |
|
14,400 m³ |
|
17,343 |
|
(405) |
Future |
|
Sold |
|
CHGOETHNL |
|
Ethanol |
|
Sep/15 |
|
14,400 m³ |
|
17,343 |
|
(225) |
Future |
|
Sold |
|
CHGOETHNL |
|
Ethanol |
|
Oct/15 |
|
4,000 m³ |
|
4,808 |
|
(23) |
Future |
|
Sold |
|
CHGOETHNL |
|
Ethanol |
|
Nov/15 |
|
21,600 m³ |
|
26,021 |
|
192 |
Future |
|
Sold |
|
CHGOETHNL |
|
Ethanol |
|
Dec/15 |
|
44,000 m³ |
|
52,739 |
|
250 |
Future |
|
Sold |
|
NYMEX |
|
Ethanol |
|
Jul/15 |
|
1,500 m³ |
|
2,344 |
|
(142) |
Sub-total of future ethanol sold |
|
|
|
|
|
487,506 m³ |
|
599,980 |
|
32,578 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Future |
|
Purchased |
|
BMFBovespa |
|
Ethanol |
|
Mar/15 |
|
(26,310) m³ |
|
(31,729) |
|
(105) |
Future |
|
Purchased |
|
BMFBovespa |
|
Ethanol |
|
Apr/15 |
|
(6,750) m³ |
|
(8,066) |
|
- |
Future |
|
Purchased |
|
BMFBovespa |
|
Ethanol |
|
May/15 |
|
(750) m³ |
|
(284) |
|
- |
Future |
|
Purchased |
|
BMFBovespa |
|
Ethanol |
|
Jun/15 |
|
(600) m³ |
|
(718) |
|
(8) |
Future |
|
Purchased |
|
BMFBovespa |
|
Ethanol |
|
Jul/15 |
|
(600) m³ |
|
(720) |
|
(6) |
Future |
|
Purchased |
|
BMFBovespa |
|
Ethanol |
|
Oct/15 |
|
(150) m³ |
|
(187) |
|
- |
Future |
|
Purchased |
|
NYMEX |
|
Ethanol |
|
Apr/15 |
|
(15,899) m³ |
|
(6,406) |
|
(576) |
Future |
|
Purchased |
|
NYMEX |
|
Ethanol |
|
May/15 |
|
(11,129) m³ |
|
(4,629) |
|
(828) |
Future |
|
Purchased |
|
NYMEX |
|
Ethanol |
|
Jun/15 |
|
(11,129) m³ |
|
(4,629) |
|
(869) |
Future |
|
Purchased |
|
NYMEX |
|
Ethanol |
|
Jul/15 |
|
(4,770) m³ |
|
(1,860) |
|
7 |
Future |
|
Purchased |
|
NYMEX |
|
Ethanol |
|
Aug/15 |
|
(1,590) m³ |
|
(616) |
|
(5) |
Future |
|
Purchased |
|
NYMEX |
|
Ethanol |
|
Sep/15 |
|
(1,590) m³ |
|
(616) |
|
(25) |
Future |
|
Purchased |
|
CHGOETHNL |
|
Ethanol |
|
Apr/15 |
|
(74,400) m³ |
|
(97,452) |
|
(4,666) |
Future |
|
Purchased |
|
CHGOETHNL |
|
Ethanol |
|
May/15 |
|
(88,160) m³ |
|
(113,782) |
|
(3,737) |
Future |
|
Purchased |
|
CHGOETHNL |
|
Ethanol |
|
Jun/15 |
|
(57,280) m³ |
|
(75,715) |
|
(4,206) |
Future |
|
Purchased |
|
CHGOETHNL |
|
Ethanol |
|
Jul/15 |
|
(29,600) m³ |
|
(36,416) |
|
413 |
Future |
|
Purchased |
|
CHGOETHNL |
|
Ethanol |
|
Aug/15 |
|
(56,000) m³ |
|
(68,421) |
|
(372) |
Future |
|
Purchased |
|
CHGOETHNL |
|
Ethanol |
|
Sep/15 |
|
(57,600) m³ |
|
(70,496) |
|
(441) |
Future |
|
Purchased |
|
CHGOETHNL |
|
Ethanol |
|
Oct/15 |
|
(51,200) m³ |
|
(61,182) |
|
567 |
Future |
|
Purchased |
|
CHGOETHNL |
|
Ethanol |
|
Nov/15 |
|
(33,600) m³ |
|
(39,969) |
|
209 |
Future |
|
Purchased |
|
CHGOETHNL |
|
Ethanol |
|
Dec/15 |
|
(11,200) m³ |
|
(13,251) |
|
8 |
Future |
|
Purchased |
|
CHGOETHNL |
|
Ethanol |
|
Jul/15 |
|
(1,500) m³ |
|
(2,453) |
|
33 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtotal of future ethanol purchased |
|
|
|
|
|
|
|
|
|
(541,807) m³ |
|
(639,597) |
|
(14,607) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Physical fixed
|
|
Sold |
|
CHGOETHNL |
|
Etanol |
|
Apr-Oct/15 |
|
176,304 m³ |
|
288,193 |
|
17,945 |
Physical fixed |
|
Purchased |
|
CHGOETHNL |
|
Etanol |
|
Apr-Oct/15 |
|
(146,184) m³ |
|
(228,056) |
|
(9,804) |
|
|
|
|
|
|
|
|
|
|
|
Subtotal of physical fixed ethanol |
|
|
|
|
|
30,120 m³ |
|
60,137 |
|
8,141 |
Subtotal of future ethanol |
|
|
|
|
|
|
|
20,520 |
|
26,112 |
Total of products |
|
|
|
|
|
|
|
1,660,432 |
|
409,316 |
RAÍZEN ENERGIA S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
Price risk: Outstanding derivatives of products in 2014
|
Derivatives |
|
Purchased/ Sold |
|
Market |
|
Contract |
|
Maturity |
|
Notional
(units) |
|
Notional
(R$ thousands) |
|
Fair value (R$ thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Future |
|
Sold |
|
ICE |
|
Sugar#11 |
|
Apr/14 |
|
248,017 t |
|
221,316 |
|
1,435 |
Future |
|
Sold |
|
ICE |
|
Sugar#11 |
|
Jun/14 |
|
631,219 t |
|
565,834 |
|
(5,114) |
Future |
|
Sold |
|
ICE |
|
Sugar#11 |
|
Sep/14 |
|
673,081 t |
|
608,587 |
|
(14,326) |
Future |
|
Sold |
|
ICE |
|
Sugar#11 |
|
Feb/15 |
|
148,241 t |
|
141,318 |
|
(460) |
Future |
|
Sold |
|
ICE |
|
Sugar#11 |
|
Sep/15 |
|
24,994 t |
|
23,071 |
|
(360) |
Future |
|
Sold |
|
ICE |
|
Sugar#11 |
|
Jun/16 |
|
7,264 t |
|
6,698 |
|
(156) |
Future |
|
Sold |
|
ICE |
|
Sugar#11 |
|
Sep/16 |
|
5,943 t |
|
5,541 |
|
(102) |
Future |
|
Sold |
|
NYSE LIFFE |
|
Sugar#5 |
|
Apr/14 |
|
1,650 t |
|
1,803 |
|
32 |
Future |
|
Sold |
|
NYSE LIFFE |
|
Sugar#5 |
|
Jul/14 |
|
3,500 t |
|
3,849 |
|
(9) |
Sub-total of future sugar sold |
|
|
|
|
|
1,743,909 t |
|
1,578,017 |
|
(19,060) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Future |
|
Purchased |
|
ICE |
|
Sugar#11 |
|
Apr/14 |
|
(58,016 t) |
|
(47,362) |
|
4,072 |
Future |
|
Purchased |
|
ICE |
|
Sugar#11 |
|
Jun/14 |
|
(10,058 t) |
|
(8,553) |
|
546 |
Future |
|
Purchased |
|
ICE |
|
Sugar#11 |
|
Sep/14 |
|
(3,200 t) |
|
(2,659) |
|
303 |
Future |
|
Purchased |
|
ICE |
|
Sugar#11 |
|
Feb/15 |
|
(3,302 t) |
|
(2,884) |
|
274 |
Future |
|
Purchased |
|
NYSE LIFFE |
|
Sugar#5 |
|
Apr/14 |
|
(100 t) |
|
(99) |
|
8 |
Sub-total of future sugar purchased |
|
|
|
|
|
(74,676 t) |
|
(61,557) |
|
5,203 |
Sub-total of future sugar |
|
|
|
|
|
1,669,233 t |
|
1,516,460 |
|
(13,857) |
Future |
|
Sold
|
|
BMFBovespa |
|
Ethanol |
|
Jun/14 |
|
900 m³ |
|
1,039 |
|
(2) |
Future |
|
Sold |
|
BMFBovespa |
|
Ethanol |
|
Jul/14 |
|
2,100 m³ |
|
2,352 |
|
16 |
Future |
|
Sold |
|
BMFBovespa |
|
Ethanol |
|
Aug/14 |
|
1,800 m³ |
|
2,007 |
|
50 |
Future |
|
Sold |
|
BMFBovespa |
|
Ethanol |
|
Sep/13 |
|
1,500 m³ |
|
1,695 |
|
30 |
Future |
|
Sold |
|
CHGOETHNL |
|
Ethanol |
|
Apr/14 |
|
131 m³ |
|
169,886 |
|
(60,734) |
Future |
|
Sold |
|
CHGOETHNL |
|
Ethanol |
|
May/14 |
|
44 m³ |
|
52,036 |
|
(15,987) |
Future |
|
Sold |
|
CHGOETHNL |
|
Ethanol |
|
Jun/14 |
|
43 m³ |
|
52,521 |
|
(9,165) |
Future |
|
Sold |
|
CHGOETHNL |
|
Ethanol |
|
Jul/14 |
|
21 m³ |
|
24,076 |
|
(4,568) |
Future |
|
Sold |
|
CHGOETHNL |
|
Ethanol |
|
Aug/14 |
|
12 m³ |
|
14,389 |
|
(18) |
Future |
|
Sold |
|
CHGOETHNL |
|
Ethanol |
|
Sep/14 |
|
8 m³ |
|
11,233 |
|
(642) |
Future |
|
Sold |
|
CHGOETHNL |
|
Ethanol |
|
Jan/15 |
|
25 m³ |
|
25,860 |
|
(1,223) |
Sub-total of future ethanol sold |
|
|
|
|
|
6,584 m³ |
|
357,094 |
|
(92,243) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Future |
|
Purchased |
|
CHGOETHNL |
|
Ethanol |
|
Apr/14 |
|
(92 m³) |
|
(114,552) |
|
56,598 |
Future |
|
Purchased |
|
CHGOETHNL |
|
Ethanol |
|
May/14 |
|
(41 m³) |
|
(48,389) |
|
15,348 |
Future |
|
Purchased |
|
CHGOETHNL |
|
Ethanol |
|
Jun/14 |
|
(38 m³) |
|
(45,366) |
|
8,352 |
Future |
|
Purchased |
|
CHGOETHNL |
|
Ethanol |
|
Jul/14 |
|
(13 m³) |
|
(13,456) |
|
3,930 |
Future |
|
Purchased |
|
CHGOETHNL |
|
Ethanol |
|
Aug/14 |
|
(5 m³) |
|
(4,833) |
|
1,165 |
Future |
|
Purchased |
|
CHGOETHNL |
|
Ethanol |
|
Sep/14 |
|
(3 m³) |
|
(3,155) |
|
681 |
Future |
|
Purchased |
|
CHGOETHNL |
|
Ethanol |
|
Dec/14 |
|
(25 m³) |
|
(25,676) |
|
(3) |
Future |
|
Purchased |
|
CHGOETHNL |
|
Ethanol |
|
Jan/15 |
|
(50 m³) |
|
(51,809) |
|
656 |
|
|
|
|
|
|
|
|
|
|
(267 m³) |
|
(307,236) |
|
86,727 |
Physical fixed |
|
Sold |
|
CHGOETHNL |
|
Ethanol |
|
Apr-Dec/14 |
|
272 m³ |
|
154,832 |
|
(53,835) |
Physical fixed |
|
Purchased |
|
CHGOETHNL |
|
Ethanol |
|
Apr-Dec/14 |
|
(274 m³) |
|
(384,713) |
|
61,155 |
|
|
|
|
|
|
(2 m³)
|
|
(229,881) |
|
7,320 |
Subtotal of future ethanol |
|
|
|
|
|
6,315 m³ |
|
(180,023) |
|
1,804 |
Total of products |
|
|
|
|
|
|
|
1,336,437 |
|
(12,053) |
RAÍZEN ENERGIA S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
This risk arises from the possibility
of fluctuations in the exchange rates used by the Raízen Group to calculate export and import revenue, debt flows and other
foreign currency denominated assets and liabilities. The Group uses derivatives transactions to manage cash flow risks arising
from US dollar denominated export revenue, net of other foreign currency denominated cash flow. The table below shows the outstanding
derivative positions as at December 31, 2015 and 2014, used to hedge against exchange rate risk:
Foreign exchange risk: Outstanding exchange rate derivatives in 2015 |
Derivatives |
|
Purchased/Sold |
|
Market |
|
Contract |
|
Maturity |
|
Notional
(US$ thousands) |
|
Notional
(R$ thousands) |
|
Fair value
(R$ thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Future |
|
Sold |
|
BM&FBovespa |
|
Commercial dollar |
|
Apr/15 |
|
304,250 |
|
976,034 |
|
4,335 |
Future |
|
Sold |
|
BM&FBovespa |
|
Commercial dollar |
|
May/15 |
|
79,257 |
|
254,255 |
|
1,520 |
Future |
|
Sold |
|
BM&FBovespa |
|
DDI |
|
Jan/16 |
|
355,000 |
|
1,138,840 |
|
(5,575) |
Subtotal future sold |
|
|
|
|
|
738,507 |
|
2,369,129 |
|
280 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Future |
|
Purchased |
|
BM&FBovespa |
|
Commercial dollar |
|
Apr/15 |
|
(409,250) |
|
(1,312,874) |
|
(5,832) |
Future |
|
Purchased |
|
BM&FBovespa |
|
Commercial dollar |
|
May/15 |
|
(166,564) |
|
(534,338) |
|
(2,581) |
Future |
|
Purchased |
|
BM&FBovespa |
|
DDI |
|
Jan/16 |
|
(355,000) |
|
(1,138,840) |
|
5,575 |
Subtotal future purchased |
|
|
|
|
|
(930,814) |
|
(2,986,052) |
|
(2,838) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forward |
|
Purchased |
|
OTC/Cetip |
|
NDF |
|
Apr/15 |
|
(150,000) |
|
(435,840) |
|
45,521 |
Forward |
|
Purchased |
|
OTC/Cetip |
|
NDF |
|
May/15 |
|
(150,000) |
|
(485,032) |
|
(550) |
Forward |
|
Purchased |
|
OTC/Cetip |
|
NDF |
|
Jan/16 |
|
(250,000) |
|
(659,595) |
|
186,618 |
Forward |
|
Sold |
|
OTC/Cetip |
|
NDF |
|
Apr/15 |
|
320,000 |
|
929,792 |
|
(97,111) |
Subtotal forward purchased/sold |
|
|
|
|
|
(230,000) |
|
(650,675) |
|
134,478 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exchange rate lock |
|
Sold |
|
OTC |
|
Exchange rate lock |
|
Apr/15 |
|
947 |
|
3,039 |
|
628 |
Exchange rate lock |
|
Purchased |
|
OTC |
|
Exchange rate lock |
|
Apr/15 |
|
(3,100) |
|
(9,013) |
|
563 |
Subtotal exchange rate lock-in |
|
|
|
|
|
(2,153) |
|
(5,974) |
|
1,191 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exchange rate swap (1) |
|
Fixed Dollar/CDI |
|
BMF |
|
Exchange rate swap |
|
Feb/17 |
|
(100,000) |
|
(320,800) |
|
28,245 |
Exchange rate swap (1) |
|
Fixed Dollar/CDI |
|
BMF |
|
Exchange rate swap |
|
Mar/19 |
|
(600,000) |
|
(1,924,800) |
|
263,235 |
Exchange rate swap (1) |
|
Fixed Dollar/CDI |
|
BMF |
|
Exchange rate swap |
|
Oct/21 |
|
(70,890) |
|
(227,416) |
|
(51,791) |
Exchange rate swap (1) |
|
Fixed Dollar/CDI |
|
BMF |
|
Exchange rate swap |
|
Jan/22 |
|
(42,964) |
|
(137,828) |
|
15,362 |
Exchange rate swap (1) |
|
Fixed Dollar/CDI |
|
BMF |
|
Exchange rate swap |
|
Feb/17 |
|
(23,379) |
|
(75,000) |
|
1,119 |
Subtotal exchange rate swap |
|
|
|
|
|
(837,233) |
|
(2,685,844) |
|
256,170 |
Total of exchange rate |
|
|
|
|
|
(1,261,693) |
|
(3,959,416) |
|
389,281 |
(1) In June 2012,
the Company entered into an intercompany interest and foreign currency swap, between Raízen Energia and Raízen Combustíveis,
in which Raízen Energia receives a fixed exchange rate and pays an interest rate of 100% of CDI. The fair value of this
swap on March 31, 2014 is R$ 23,595.
RAÍZEN ENERGIA S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
Foreign
exchange risk: Outstanding exchange rate derivatives in 2014 |
Derivatives |
|
Purchased/Sold |
|
Market |
|
Contract |
|
Maturity |
|
Notional
(US$ thousands) |
|
Notional
(R$ thousands) |
|
Fair
value
(R$ thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Future |
|
Sold |
|
BM&FBovespa |
|
Commercial
dollar |
|
May/14 |
|
126,250 |
|
288,479 |
|
(355) |
Future |
|
Sold |
|
BM&FBovespa |
|
DDI |
|
May/14 |
|
150,000 |
|
339,450 |
|
(398) |
Subtotal
future sold |
|
|
|
|
|
276,250 |
|
627,929 |
|
(753) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Future |
|
Purchased |
|
BM&FBovespa |
|
Commercial
dollar |
|
Jul/14 |
|
(265,000) |
|
(615,004) |
|
766 |
Future |
|
Purchased |
|
BM&FBovespa |
|
DDI |
|
Jan/16 |
|
(150,000) |
|
(339,450) |
|
692 |
Subtotal
future purchased |
|
|
|
|
|
(415,000) |
|
(954,454) |
|
1,458 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forward |
|
Sold |
|
OTC/Cetip |
|
NDF |
|
Jan/14 |
|
210,000 |
|
497,063 |
|
21,824 |
Forward |
|
Purchased |
|
OTC/Cetip |
|
NDF |
|
Apr/14 |
|
(1,132) |
|
(2,562) |
|
(29) |
Forward |
|
Purchased |
|
OTC/Cetip |
|
NDF |
|
Apr
/14 |
|
(337) |
|
(762) |
|
16 |
Forward |
|
Purchased |
|
OTC/Cetip |
|
NDF |
|
May/14 |
|
(855) |
|
(1,934) |
|
(103) |
Forward |
|
Purchased |
|
OTC/Cetip |
|
NDF |
|
Jun/14 |
|
(1,046) |
|
(2,366) |
|
(122) |
Forward |
|
Purchased |
|
OTC/Cetip |
|
NDF |
|
Jul/14 |
|
(160,000) |
|
(343,912) |
|
26,727 |
Forward |
|
Purchased |
|
OTC/Cetip |
|
NDF |
|
Oct/14 |
|
(394) |
|
(891) |
|
(3) |
Forward |
|
Purchased |
|
OTC/Cetip |
|
NDF |
|
Oct/14 |
|
(323) |
|
(731) |
|
9 |
Forward |
|
Purchased |
|
OTC/Cetip |
|
NDF |
|
Jan/16 |
|
(50,000) |
|
(142,095) |
|
(6,009) |
Subtotal forward
purchased/sold |
|
|
|
|
|
(4,087) |
|
1,810 |
|
42,310 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exchange
rate lock |
|
Sold |
|
OTC |
|
Exchange
rate lock |
|
Aug/14 |
|
100,000 |
|
258,240 |
|
21,797 |
Exchange
rate lock |
|
Purchased |
|
OTC |
|
Exchange
rate lock |
|
Apr/14 |
|
(5,895) |
|
(13,341) |
|
(306) |
Exchange
rate lock |
|
Purchased |
|
OTC |
|
Exchange
rate lock |
|
May/14 |
|
(5,250) |
|
(11,880) |
|
(111) |
Exchange
rate lock |
|
Purchased |
|
OTC |
|
Exchange
rate lock |
|
Jun/14 |
|
(1,120) |
|
(2,536) |
|
(98) |
Exchange
rate lock |
|
Purchased |
|
OTC |
|
Exchange
rate lock |
|
Oct/14 |
|
(4,191) |
|
(9,485) |
|
(94) |
Exchange
rate lock |
|
Purchased |
|
OTC |
|
Exchange
rate lock |
|
Nov/14 |
|
(4,342) |
|
(9,825) |
|
(87) |
Exchange
rate lock |
|
Purchased |
|
OTC |
|
Exchange
rate lock |
|
Dec/14 |
|
(5,454) |
|
(12,341) |
|
(114) |
Exchange
rate lock |
|
Purchased |
|
OTC |
|
Exchange
rate lock |
|
Jan/15 |
|
(6,817) |
|
(15,427) |
|
(141) |
Exchange
rate lock |
|
Sold |
|
OTC |
|
Exchange
rate lock |
|
Apr/14 |
|
4,396 |
|
9,947 |
|
101 |
Exchange
rate lock |
|
Sold |
|
OTC |
|
Exchange
rate lock |
|
May/14 |
|
4,612 |
|
10,437 |
|
100 |
Exchange
rate lock |
|
Sold |
|
OTC |
|
Exchange
rate lock |
|
Jun/14 |
|
921 |
|
2,084 |
|
83 |
Exchange
rate lock |
|
Sold |
|
OTC |
|
Exchange
rate lock |
|
Oct/14 |
|
4,132 |
|
9,352 |
|
(7) |
Exchange
rate lock |
|
Sold |
|
OTC |
|
Exchange
rate lock |
|
Dec/14 |
|
5,512 |
|
12,473 |
|
(17) |
Subtotal
exchange rate lock-in |
|
|
|
|
|
86,504 |
|
227,698 |
|
21,106 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exchange rate swap (1) |
|
Fixed
Dollar/CDI |
|
BMF |
|
Exchange rate swap |
|
Apr/14 |
|
92,949 |
|
210,344 |
|
(5,131) |
Exchange rate swap (1) |
|
Fixed
Dollar/CDI |
|
BMF |
|
Exchange rate swap |
|
May/14 |
|
89,578 |
|
202,715 |
|
(5,798) |
Exchange rate swap (1) |
|
Fixed
Dollar/CDI |
|
BMF |
|
Exchange rate swap |
|
Jun/14 |
|
88,932 |
|
201,252 |
|
(6,174) |
Exchange rate swap (1) |
|
Fixed
Dollar/CDI |
|
BMF |
|
Exchange rate swap |
|
Jul/14 |
|
88,193 |
|
199,580 |
|
(6,492) |
Subtotal
exchange rate swap |
|
|
|
|
|
359,652 |
|
813,891 |
|
(23,595) |
Total of exchange
rate |
|
|
|
|
|
303,319 |
|
716,874 |
|
40,526 |
On March 31, 2015
and 2014, the Company presented the following net balance sheet exposure to the US dollar variance in assets and liabilities denominated
in US dollars:
RAÍZEN ENERGIA S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
|
2015 |
|
2014 |
|
|
R$ |
|
US$ (in
thousands) |
|
R$ |
|
US$ (in
thousands) |
|
Cash
and cash equivalents (Note 3) |
403,799 |
|
125,873 |
|
142,296 |
|
62,879 |
|
Restricted cash (Note 4) |
30,651 |
|
9,555 |
|
118,889 |
|
52,536 |
|
Trade notes receivable abroad
(Note 5) |
129,471 |
|
40,359 |
|
162,557 |
|
71,833 |
|
Related parties (Note 10) |
(450,282) |
|
(140,362) |
|
496,027 |
|
219,190 |
|
Loans and financing (Note
16) |
(4,619,226 |
) |
(1,439,908 |
) |
(3,128,269 |
) |
(1,382,355 |
) |
Derivatives (Note 27) |
794,276 |
|
247,592 |
|
23,417 |
|
10,348 |
|
|
|
|
|
|
|
|
|
|
Foreign exchange exposure,
net |
(3,711,311 |
) |
(1,156,891 |
) |
(2,185,083 |
) |
(965,569 |
) |
| e) | Effects
of hedge accounting |
On April 1, 2011,
the Company formally designated its transactions subject to hedge accounting for derivatives used to hedge cash flows from VHP
sugar export revenues, by documenting: (i) the hedge relationship, (ii) the Group’s risk management goal and strategy in
contracting the hedge, (iii) the identification of the financial instrument, (iv) the hedged item or transaction, (v) the nature
of the risk to be hedged, (vi) the description of the hedge relationship, (vii) the correlation between the hedge and the hedged
item, and (viii) the retrospective and prospective statement of hedge effectiveness. The Group designated the Sugar#11 (NYBOT
or OTC) derivatives to hedge the price risk and NDFs to hedge the currency risk, as shown in items (c) and (d) of this note.
The Company accounted
for gains and losses considered as effective for hedge accounting purposes in a specific account in shareholders’ equity,
until the hedged item affects income, when such gain or loss of each designated instrument should affect profit or loss in the
same line item as the hedged item (in this case, sales revenue). On March 31, 2015 and 2014, the impacts accounted for in the
Company’s shareholders’ equity and the estimated realization in the income statement were as follows:
As at March 31, 2015 |
|
|
|
|
|
|
|
Realization period |
|
Derivative |
|
Market |
|
Risk |
|
2015/16 |
|
2016/15 |
|
Total |
|
Future |
|
OTC / NYBOT |
|
Sugar#11 |
|
388,130 |
|
7,318 |
|
395,448 |
|
Future |
|
BM&FBovespa |
|
Ethanol |
|
(178) |
|
- |
|
(178 |
) |
Advance on export Contracts and PPE |
|
Debt |
|
Exchange rate |
|
(360,652) |
|
- |
|
(360,652) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
27,300 |
|
7,318 |
|
34,618 |
|
(-) Deferred taxes |
|
|
|
|
|
(9,295 |
) |
(2,491 |
) |
(11,786 |
) |
Effect in equity in 2015 |
|
18,005 |
|
4,827 |
|
22,832 |
|
As at March 31, 2014 |
|
|
|
|
|
|
|
Realization period |
|
Derivative |
|
Market |
|
Risk |
|
2014/15 |
|
2015/16 |
|
Total |
|
Future |
|
OTC / NYBOT |
|
Sugar#11 |
|
(16,377) |
|
(915) |
|
(17,292) |
|
Future |
|
BM&FBovespa |
|
Ethanol |
|
(61) |
|
- |
|
(61) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(16,438 |
) |
(915 |
) |
(17,353 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
(-) Deferred taxes |
|
|
|
|
|
5,590 |
|
311 |
|
5,901 |
|
Effect in equity in 2014 |
|
(10,848) |
|
(604) |
|
(11,452) |
|
RAÍZEN ENERGIA S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
Below are the changes
in the balances of other comprehensive income during the year:
Cash flow hedge | |
| |
| |
| |
Balance on March 31, 2013 | |
| 99,619 | |
Gains/(losses) in the year: | |
| | |
Futures contracts and commodities swap contracts | |
| 94,173 | |
Recycled to statement of income | |
| | |
Sales / finance result | |
| (262,465 | ) |
Financial income | |
| 91,929 | |
Total effect in adjustment for equity valuation from cash flow hedge (before deferred taxes) | |
| (168,292 | ) |
Effect of deferred taxes in equity valuation adjustment | |
| 57,221 | |
| |
| (111,071 | ) |
Balance on March 31, 2014
| |
| (11,452 | ) |
| |
| | |
Gains/(losses) in the year: | |
| | |
Futures contracts for commodities | |
| 649,186 | |
Exchange rate lock | |
| (1,780 | ) |
Advance on export contracts and PPE | |
| (549,564 | ) |
Recycled to statement of income | |
| | |
Sales revenue – commodities | |
| (231,740 | ) |
Sales revenue – foreign exchange | |
| 190,693 | |
Financial income | |
| (4,830 | ) |
Total effect in adjustment for equity valuation from cash flow hedge (before deferred taxes) | |
| 51,965 | |
Effect of deferred taxes in equity valuation adjustment | |
| (17,681 | ) |
| |
| 34,284 | |
Balance on March 31, 2015
| |
| 22,832 | |
There are no gains
or losses recognized in the statement of income that is related to the infectiveness of the Company’s hedge’s relationships.
The Company monitors
fluctuations in floating interest rates pegged to some debts (mainly those pegged to the LIBOT risk) and it makes use of derivatives
to minimize these risks. The table below shows the outstanding derivative positions as at March 31, 2015 and 2014, used to hedge
against the interest rate risk:
RAÍZEN ENERGIA S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
Interest
rate risk: Outstanding interest rate derivatives in 2015 |
|
Derivatives |
|
Assets/
Liabilities |
|
Market |
|
Maturity |
|
Notional
(US$ thousands) |
|
Notional
(R$ thousands) |
|
Fair
value (R$ thousands) |
|
Interest
swap rate |
|
Interest
swap |
|
OTC |
|
Sep/17 |
|
(75,000) |
|
(240,600) |
|
(1,281) |
|
Interest
swap rate |
|
Interest
swap |
|
OTC |
|
Mar/19 |
|
(100,000) |
|
(320,800) |
|
(3,040) |
|
Subtotal
interest swap |
|
|
|
|
|
|
|
(175,000) |
|
(561,400) |
|
(4,321) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Future |
|
BM&FBovespa |
|
DI |
|
Jan/16 |
|
366,272 |
|
1,175,000 |
|
675 |
|
Future |
|
BM&FBovespa |
|
DI |
|
Jan/16 |
|
(366,272) |
|
(1,175,000) |
|
(675) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtotal
of futures sold |
|
|
|
|
|
|
|
- |
|
- |
|
- |
|
Total
interest on March 31, 2015 |
|
|
|
(175,000) |
|
(561,400) |
|
(4,321) |
|
Interest
rate risk: Outstanding interest rate derivatives in 2014 |
|
Derivatives |
|
Assets/
Liabilities |
|
Market |
|
Maturity |
|
Notional
(US$ thousands) |
|
Notional
(R$ thousands) |
|
Fair
value (R$ thousands) |
|
Interest
swap rate |
|
Interest
swap |
|
OTC |
|
Dec/15 |
|
231,000 |
|
522,753 |
|
(821) |
|
Interest
swap rate |
|
Interest
swap |
|
OTC |
|
Jan/16 |
|
175,000 |
|
396,025 |
|
(4,657) |
|
Interest
swap rate |
|
Interest
swap |
|
OTC |
|
Sep/17 |
|
75,000 |
|
169,725 |
|
306 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtotal
interest swap |
|
|
|
|
|
|
|
481,000 |
|
1,088,503 |
|
(5,172) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Future |
|
BM&FBovespa |
|
DI |
|
Jan/16 |
|
- |
|
(521,000 |
) |
110 |
|
Future |
|
BM&FBovespa |
|
DI |
|
May/14 |
|
- |
|
521,000 |
|
6 |
|
|
|
|
|
|
|
|
|
- |
|
- |
|
116 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Interest |
|
|
|
481,000 |
|
1,088,503 |
|
(5,056) |
|
A significant portion
of the sales made by the Company is to a selected group of best-in-class counterparties, i.e. trading companies, fuel distribution
companies and large supermarket chains.
Credit risk is managed
through specific parameters for client acceptance, analysis of credit and setting of limits for customer exposure, including the
requirement of a letter of credit from prime banks and the obtaining of real guarantees, when applicable. Management believes
that the credit risk is substantially covered by the allowance for doubtful accounts.
RAÍZEN ENERGIA S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
The limits for individual
risks are determined based on internal or external classifications according to the limits determined by the Company’s management.
The use of the credit limits is regularly monitored. No credit limits were exceeded during the period, and nanagement does not
expect any losses from default by these counterparties in excess of the amount already provided.
The Company operates
goods derivatives in futures and options markets in the New York Board of Trade (“NYBOT”) and in the London International
Financial Futures and Options Exchange (“LIFFE”), as well as in the over-the-counter market, with selected counterparties.
The Group operates derivatives from exchange fees and commodities in BM&FBovespa and in over-the-counter contracts registered
in CETIP, mainly with the major national and international banks that considered to have the international risk classification
of investment grade.
Guarantee margins
– Derivative operations on commodity exchanges (NYBOT, LIFFE and BM&FBovespa) require an initial guarantee margin.
On March 31, 2015, the total margin deposited was R$85,482, of which R$ 54,831 was in restricted investments and R$ 30,651 was
in the margin of derivative transactions. The total margin deposited on March 31, 2014, was R$ 180,715, of which R$ 61,826 was
in restricted investments and R$ 118,889 was in the margin of derivative transactions. The derivatives transactions of the Group
in the market do not require a margin in guarantee.
The credit risk on
cash and cash equivalents, comprised mainly of investment funds and CDBs (Note 3), is distributed among the main national and
international banks rated by international risk rating agencies as investment grade.
Liquidity risk is
the risk of the Group facing difficulties to perform obligations associated with its financial liabilities that are settled with
spot cash payments or with another financial asset. The approach of the Group to the management of liquidity is to ensure, to
the maximum extent, that it always has sufficient liquidity to perform its obligations as they mature, under normal and stressful
conditions, without causing losses that are unacceptable or have the risk of being detrimental to the Group’s reputation.
The table below shows the financial
liabilities by maturity:
|
|
2015 |
|
2014 |
|
|
Up
to 1 year |
|
Up
to 2 years |
|
3
to 5 years |
|
Over
5 years |
|
Total |
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans
and financing |
|
1,470,647 |
|
2,500,252 |
|
5,482,971 |
|
4,002,780 |
|
13,456,650 |
|
9,790,566 |
Related
parties |
|
243,454 |
|
- |
|
1,185,565 |
|
1,154,650 |
|
2,583,669 |
|
1,031,093 |
|
|
1,714,101 |
|
2,500,252 |
|
6,668,536 |
|
5,157,430 |
|
16,040,319 |
|
10,821,659 |
As at March 31, 2015
and 2014, the Company was subject to certain covenants under its loans and financing, related to cash generation, a debt to equity
ratio and others. These covenants are being fully complied with by the Company and do not place any restrictions on its operations.
RAÍZEN ENERGIA S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
The fair value of
financial assets and liabilities is represented by the amount for which an instrument could be exchanged in a current transaction
between willing parties, and not by way of forced sale or settlement. The following methods and assumptions were used to estimate
fair value.
The fair value of
cash and cash equivalents, trade receivables, other financial assets, trade payables to suppliers, dues to/from related parties,
and other short-term payables approximates their book values, mainly due to the short-term maturity of these instruments. The
fair value of other long-term assets and liabilities do not significantly differ from their book values.
The fair value of
loans and financing mainly approximates their book values since these financial instruments are subject to floating interest rates
(Note 16). The fair value of tradable Senior Notes is based on price quotations at the financial statements date. As at March
31, 2015, the fair value of Senior Notes maturing in 2017 (Note 16) corresponded to 107.25% of its face value (110.43% in 2014).
The Company contracts
derivative financial instruments with different counterparties, including financial institutions with the credit ranking of investment
grade or higher. The derivatives evaluated using evaluation techniques with observable market data, mainly refer to swaps of interest
rates, forward exchange and commodities contracts. The assessment techniques often applied include pricing models for forward
contracts and swaps, for which calculations are made upon the current amount. The models incorporate different data, including
those referring to the credit quality of the counterparties, the exchange rates at sight and long-term, the interest rates and
the long-term rates for the commodity.
The financial instruments
categories are presented as follows:
|
|
|
|
Carrying
value |
|
Fair
value |
|
|
|
Measurement
basis |
|
2015 |
|
2014 |
|
2015 |
|
2014 |
|
Financial assets |
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents, except financial investments (Note 3) |
|
Loans and financing |
|
266,598 |
|
194,021 |
|
266,598 |
|
194,021 |
|
Financial investments (Note 3) |
|
Fair value through statement of income
|
|
3,528,689 |
|
1,576,994 |
|
3,528,689 |
|
1,576,994 |
|
Restricted cash (Note 4) |
|
Loans and financing |
|
131,311 |
|
251,803 |
|
131,311 |
|
251,803 |
|
Trade accounts receivable (Note
5) |
|
Loans and financing |
|
331,638 |
|
356,004 |
|
331,638 |
|
356,004 |
|
Derivative financial instruments
(2) |
|
Fair value through
statement of income |
|
1,074,585 |
|
201.697 |
|
1,074,585 |
|
201,697 |
|
Related parties (Note
10) |
|
Loans and financing |
|
2,197,252 |
|
1,563,831 |
|
2,197,252 |
|
1,563,831 |
|
Other financial assets (Note 9) |
|
Loans and financing |
|
981,351 |
|
903,947
|
|
981,351 |
|
903,947
|
|
|
|
|
|
8,511,424 |
|
5,048,297 |
|
8,511,424 |
|
5,048,297 |
|
Financial liabilities |
|
|
|
|
|
|
|
|
|
|
|
Loans and financing (1) (Note 16) |
|
Amortized cost |
|
(10,425,643 |
) |
(7,633,519 |
) |
(10,519,742 |
) |
(7,729,015 |
) |
Derivative financial instruments |
|
Fair value through
statement of income |
|
(280,309) |
|
(178,280 |
) |
(280,309 |
) |
(178,280 |
) |
Trade accounts payable (Note 15) |
|
Amortized cost |
|
(568,296 |
) |
(637,863 |
) |
(568,296 |
) |
(637,863 |
) |
Related parties (Note 10) |
|
Amortized cost |
|
(2,421,819 |
) |
(1,024,395 |
) |
(2,421,819 |
) |
(1,024,395 |
) |
|
|
|
|
(13,696,067 |
) |
(9,474,057 |
) |
(13,790,166 |
) |
(9,569,553 |
) |
| (1) | Stated net of securities
placement expenses. |
| (2) | On March 31, 2015, included
derivatives designated as hedge instruments in the amount of R$ 34,618 (R$ 17,353 in 2014). |
RAÍZEN ENERGIA S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
Fair value hierarchy
The Company uses the
following hierarchy to determine and disclose the fair value of financial instruments using the valuation technique:
| · | Level
1 – quoted prices (not adjusted) in active markets for identical assets and liabilities; |
| · | Level
2 – other techniques for which all inputs with significant effects on the fair value are observable, either directly or
indirectly; and |
| · | Level
3 – techniques that use inputs with significant effects on fair value not based
on observable market input. |
Assets and (liabilities) at fair value | |
Level 1 | | |
Level 2 | | |
Total | |
| |
| | |
| | |
| |
March 31, 2014 | |
| | |
| | |
| |
Cash and cash equivalents, except financial investments (Note 3) | |
| — | | |
| 194,021 | | |
| 194,021 | |
Financial investments | |
| — | | |
| 1,576,994 | | |
| 1,576,994 | |
Restricted cash (Note 4) | |
| — | | |
| 251,803 | | |
| 251,803 | |
Trade accounts receivable (Note 5) | |
| — | | |
| 356,004 | | |
| 356,004 | |
Derivative financial assets | |
| 130,730 | | |
| 70,967 | | |
| 201,697 | |
Related parties (Note 10) | |
| — | | |
| 1,563,831 | | |
| 1,563,831 | |
Other financial assets (Note 9) | |
| — | | |
| 903,947 | | |
| 903,947 | |
Loans and financing (1) (Note 16) | |
| — | | |
| (7,729,015 | ) | |
| (7,729,015 | ) |
Derivative financial liabilities | |
| (141,962 | ) | |
| (36,318 | ) | |
| (178,280 | ) |
Trade accounts payable (Note 15) | |
| — | | |
| (637,863 | ) | |
| (637,863 | ) |
Related parties (Note 10) | |
| — | | |
| (1,024,395 | ) | |
| (1,024,395 | ) |
Total | |
| (11,232 | ) | |
| (4,510,024 | ) | |
| (4,521,256 | ) |
| |
Level 1 | | |
Level 2 | | |
Level 3 | | |
Total | |
| |
| | |
| | |
| | |
| |
March 31, 2015 | |
| | |
| | |
| | |
| |
Cash and cash equivalents, except financial investments (Note 3) | |
| — | | |
| 266,598 | | |
| — | | |
| 266,598 | |
Financial investments | |
| — | | |
| 3,528,689 | | |
| — | | |
| 3,528,689 | |
Restricted cash (Note 4) | |
| — | | |
| 131,311 | | |
| — | | |
| 131,311 | |
Trade accounts receivable (Note 5) | |
| — | | |
| 331,638 | | |
| — | | |
| 331,638 | |
Derivative financial assets | |
| 533,293 | | |
| 540,605 | | |
| 687 | | |
| 1,074,585 | |
Related parties (Note 10) | |
| — | | |
| 2,197,252 | | |
| — | | |
| 2,197,252 | |
Other financial assets (Note 9) | |
| — | | |
| 981,351 | | |
| — | | |
| 981,351 | |
Loans and financing (1) (Note 16) | |
| — | | |
| (10,519,742 | ) | |
| — | | |
| (10,519,742 | ) |
Derivative financial liabilities | |
| (127,221 | ) | |
| (153,088 | ) | |
| — | | |
| (280,309 | ) |
Trade accounts payable (Note 15) | |
| — | | |
| (568,296 | ) | |
| — | | |
| (568,296 | ) |
Related parties (Note 10) | |
| — | | |
| (2,421,819 | ) | |
| — | | |
| (2,421,819 | ) |
Total | |
| 406,072 | | |
| (5,685,501 | ) | |
| 687 | | |
| (5,278,742 | ) |
On March 31, 2015 and 2014, there
were no transfers between the aforementioned levels to determine the fair value of financial instruments.
RAÍZEN ENERGIA S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
The following analysis is a sensitivity
analysis of the fair value of financial instruments in accordance with the risk types considered relevant by the Company.
Assumptions for sensitivity
analysis
For the analysis,
the Company adopted three scenarios, one being probable and two that include the effects of impairment in the fair value of the
Group’s derivative financial instruments. The probable scenario was defined based on the future markets of sugar and the
dollar as at March 31, 2015 and 2014, being the same markets that determine the fair value of the derivatives at that date. The
possible adverse and remote scenarios were established in view of adverse impacts of 25% and 50% on the curves in the prices of
the U.S. dollar and sugar, which were considered as the basis for the probable scenario.
Sensitivity table
The Company and its
subsidiaries made two simulations involving appreciations and depreciations of exchange rates (R$/US$) by +/- 25% (possible) and
+/- 50% (remote):
Sugar
prices simulation (US$/Ton) March 31, 2015 |
|
|
|
Scenario |
Maturity |
Balance
sheet date |
|
25% |
|
50% |
|
-25% |
|
-50% |
April
30, 2015 |
11.93 |
|
14.91 |
|
17.9 |
|
8.95 |
|
5.97 |
June
30, 2015 |
12.06 |
|
15.08 |
|
18.09 |
|
9.05 |
|
6.03 |
September
30, 2015 |
12.68 |
|
15.85 |
|
19.02 |
|
9.51 |
|
6.34 |
February
29, 2016 |
13.91 |
|
17.39 |
|
20.87 |
|
10.43 |
|
6.96 |
April
29, 2016 |
13.98 |
|
17.48 |
|
20.97 |
|
10.49 |
|
6.99 |
June
30,2016 |
13.95 |
|
17.44 |
|
20.93 |
|
10.46 |
|
6.98 |
September
30, 2016 |
14.12 |
|
17.65 |
|
21.18 |
|
10.59 |
|
7.06 |
February
28, 2017 |
14.54 |
|
18.18 |
|
21.81 |
|
10.91 |
|
7.27 |
April
28, 2017 |
14.44 |
|
18.05 |
|
21.66 |
|
10.83 |
|
7.22 |
June
30, 2017 |
14.36 |
|
17.95 |
|
21.54 |
|
10.77 |
|
7.18 |
September
29, 2017 |
14.43 |
|
18.04 |
|
21.65 |
|
10.82 |
|
7.22 |
Sugar
prices simulation (US$/Ton) March 31, 2014 |
|
|
|
Scenario |
Maturity |
Balance
sheet date |
|
25% |
|
50% |
|
-25% |
|
-50% |
April
30, 2014 |
17.77 |
|
22.21 |
|
26.66 |
|
13.33 |
|
8.89 |
June
30, 2014 |
18.13 |
|
22.66 |
|
27.20 |
|
13.60 |
|
9.07 |
September
30, 2014 |
18.55 |
|
23.19 |
|
27.83 |
|
13.91 |
|
9.28 |
February
28, 2015 |
19.17 |
|
23.96 |
|
28.76 |
|
14.38 |
|
9.59 |
April
30, 2015 |
19.00 |
|
23.75 |
|
28.50 |
|
14.25 |
|
9.50 |
June
30, 2015 |
18.74 |
|
23.43 |
|
28.11 |
|
14.06 |
|
9.37 |
September
30, 2015 |
18.79 |
|
23.49 |
|
28.19 |
|
14.09 |
|
9.40 |
February
28, 2016 |
19.04 |
|
23.80 |
|
28.56 |
|
14.28 |
|
9.52 |
April
30, 2016 |
18.96 |
|
23.70 |
|
28.44 |
|
14.22 |
|
9.48 |
June
30, 2016 |
18.91 |
|
23.64 |
|
28.37 |
|
14.18 |
|
9.46 |
September
30, 2016 |
19.03 |
|
23.79 |
|
28.55 |
|
14.27 |
|
9.52 |
The following is the
sensitivity exhibited on the change in the fair value of the Company’s financial derivatives and its subsidiaries in the
probable, possible and remote scenarios:
RAÍZEN ENERGIA S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
|
|
|
Impacts
in results(*) |
|
|
|
|
As
at March 31, 2015 |
|
Price
risk |
|
Risk
factor |
|
Probable
scenario |
|
Scenario
+ (25%) |
|
Fair
value balance |
|
Scenario
+ (50%) |
|
Fair
value balance |
|
Derivatives of products |
|
|
|
|
|
|
|
|
|
|
|
|
|
Futures contracts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase and sales commitments |
|
Increase
of sugar price |
|
383,204 |
|
(314,349) |
|
68,855 |
|
(628,698) |
|
(245,494) |
|
Purchase
and sales commitments |
|
Increase
of hydrated ethanol price |
|
26,110 |
|
(54,391) |
|
(28,279) |
|
(108,782) |
|
(82,670) |
|
|
|
|
|
409,314 |
|
(368,740) |
|
40,576 |
|
(737,480) |
|
(328,164) |
|
Exchange
rate risk |
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivatives of exchange rate |
|
|
|
|
|
|
|
|
|
|
|
|
|
Futures contracts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase and sales commitment |
|
R$/USD
exchange rate decrease |
|
(2,558) |
|
(166,360) |
|
(168,918) |
|
(332,720) |
|
(335,278) |
|
Forward contracts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase and sales commitment |
|
R$/USD
exchange rate decrease |
|
134,478 |
|
(311,555) |
|
(177,077) |
|
(623,110) |
|
(488,632) |
|
Exchange rate lock-in: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase and sales commitment |
|
R$/USD
exchange rate decrease |
|
1,191 |
|
(4,341) |
|
(3,150) |
|
(8,682) |
|
(7,491) |
|
Exchange rate swap |
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase and sales commitments |
|
R$/USD
exchange rate decrease |
|
256,170 |
|
(531,127) |
|
(274,957) |
|
(1,062,254) |
|
(806,084) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
rate risk |
|
|
|
389,281 |
|
(1,013,383) |
|
(624,102) |
|
(2,026,766) |
|
(1,637,485) |
|
Swap contracts, exchange
rate lock-in and NDF |
|
Decrease
of interest curve |
|
(4,321) |
|
(46,454) |
|
(50,775) |
|
(92,908) |
|
(97,229) |
|
(*)
Projected results to occur up to 12 months from March 31, 2015.
|
|
|
Impacts
in results(*) |
|
|
|
|
As
at March 31, 2014 |
|
Price risk
|
|
Risk
factor |
|
Probable
scenario |
|
Scenario
+ (25%) |
|
Fair
value balance |
|
Scenario
+ (50%) |
|
Fair
value balance |
|
Derivatives of products |
|
|
|
|
|
|
|
|
|
|
|
|
|
Futures contracts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase and sales commitments |
|
Increase
of sugar price |
|
(13,857 |
) |
(382,580 |
) |
(396,437 |
) |
(765,160 |
) |
(779,017 |
) |
Purchase and sales commitments
|
|
Decrease
of hydrated ethanol price |
|
1,804 |
|
(35,737 |
) |
(37,541 |
) |
(71,474 |
) |
(73,278 |
) |
|
|
|
|
(12,053 |
) |
(418,317 |
) |
(433,978 |
) |
(836,634 |
) |
(852,295 |
) |
Exchange
rate risk |
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivatives of exchange
rate |
|
|
|
|
|
|
|
|
|
|
|
|
|
Futures contracts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase and sales commitment |
|
R$/USD
exchange rate increase |
|
705 |
|
75,911 |
|
76,616 |
|
151,822 |
|
152,527 |
|
Forward Contracts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase and sales commitment |
|
R$/USD
exchange rate increase |
|
42,310 |
|
(11,770 |
) |
30,540 |
|
(23,540 |
) |
18,770 |
|
Exchange rate lock-in: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase and sales commitment |
|
R$/USD
exchange rate increase |
|
21,106 |
|
(65,000 |
) |
(43,893 |
) |
(130,000 |
) |
(108,893 |
) |
Exchange rate swap |
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase and sales commitments |
|
R$/USD
exchange rate increase |
|
(23,595 |
) |
(213,697 |
) |
(237,292 |
) |
(427,394 |
) |
(450,988 |
) |
|
|
|
|
40,526 |
|
(214,556 |
) |
(174,029 |
) |
(429,112 |
) |
(388,584 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
rate risk |
|
|
|
|
|
|
|
|
|
|
|
|
|
Swap contracts, Exchange
rate lock-in and NDF |
|
Decrease
of LIBOR curve |
|
(5,056 |
) |
(10,108 |
) |
(15,164 |
) |
(20,216 |
) |
(25,272 |
) |
(*)
Projected results to occur in up to 12 months as from March 31, 2014.
RAÍZEN ENERGIA S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
Additionally, the
Company and its subsidiaries made two simulations involving appreciations and depreciations of exchange rates (R$/US$) by +/-
25% (possible) and +/- 50% (remote) and the impacts on its assets and liabilities pegged to the US dollar.
|
|
Exchange
rate simulation (R$/US$) |
|
|
|
|
Scenarios |
|
|
Balance sheet
date |
|
+25% |
|
+50% |
|
-25% |
|
-50% |
March
31, 2015 |
|
3.2080 |
|
4.0100 |
|
4.8120 |
|
2.4060 |
|
1.6040 |
March 31,
2014 |
|
2.2630 |
|
2.8288 |
|
3.3945 |
|
1.6973 |
|
1.1315 |
The probable scenario takes into
consideration the position as at March 31, 2015. The effects of possible and remote scenarios would be recorded in consolidated
income as exchange variation gain (loss) and foreign exchange are as follow:
| |
Exchange variation effect | |
| |
Scenarios | |
Foreign exchange exposure, net March 31, 2015 | |
+25% | | |
+50% | | |
-25% | | |
-50% | |
Cash and cash equivalents (Note 3) | |
| 403,799 | | |
| 100,950 | | |
| 201,900 | | |
| (100,950 | ) | |
| (201,900 | ) |
Restricted cash | |
| 30,651 | | |
| 7,663 | | |
| 15,326 | | |
| (7,663 | ) | |
| (15,326 | ) |
Trade notes receivable abroad (Note 5) | |
| 129,471 | | |
| 32,368 | | |
| 64,736 | | |
| (32,368 | ) | |
| (64,736 | ) |
Related parties (Note 10) | |
| (450,282 | ) | |
| (112,571 | ) | |
| (225,141 | ) | |
| 112,571 | | |
| 225,141 | |
Loans and financing (Note 16) | |
| (4,619,226 | ) | |
| (1,154,807 | ) | |
| (2,309,613 | ) | |
| 1,154,807 | | |
| 2,309,613 | |
| |
| (4,505,587 | ) | |
| (1,126,397 | ) | |
| (2,252,792 | ) | |
| 1,126,397 | | |
| 2,252,792 | |
| |
Exchange variation effect | |
| |
Scenarios | |
Foreign exchange exposure, net March 31, 2014 | |
+25% | | |
+50% | | |
-25% | | |
-50% | |
Cash and cash equivalents (Note 3) | |
| 142,296 | | |
| 35,575 | | |
| 71,146 | | |
| (35,575 | ) | |
| (71,146 | ) |
Restricted cash | |
| 118,889 | | |
| 29,725 | | |
| 59,445 | | |
| (29,725 | ) | |
| (59,445 | ) |
Trade notes receivable abroad (Note 5) | |
| 162,557 | | |
| 40,643 | | |
| 81,279 | | |
| (40,643 | ) | |
| (81,279 | ) |
Related parties (Note 10) | |
| 496,027 | | |
| 124,018 | | |
| 248,014 | | |
| (124,018 | ) | |
| (248,014 | ) |
Loans and financing (Note 16) | |
| (3,128,269 | ) | |
| (782,136 | ) | |
| (1,564,135 | ) | |
| 782,136 | | |
| 1,564,135 | |
| |
| (2,208,500 | ) | |
| (552,173 | ) | |
| (1,104,249 | ) | |
| 552,173 | | |
| 1,104,249 | |
The Company simulated
floating interest rates on borrowings and financing and income from investments linked to the CDI rate involving an appreciation
and depreciation by 25% and 50%. as follows:
|
|
|
March
31, 2015 |
|
|
|
Interest
rate sensitivity |
|
|
|
Probable
scenario |
|
Scenario
(+/-25%) |
|
Scenario
(+/-50%) |
Financial
investments |
Decrease |
|
402,767 |
|
302,075 |
|
201,384 |
|
Increase |
|
402,767 |
|
503,459 |
|
604,151 |
Loans
and financing |
Decrease |
|
(506,722) |
|
(380,042) |
|
(253,361) |
|
Increase |
|
(506,722) |
|
(633,403) |
|
(760,084) |
RAÍZEN ENERGIA S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
| |
| | |
March 31, 2014 | |
| |
| | |
Interest rate sensitivity | |
| |
| | |
Probable scenario | | |
Scenario (+/-25%) | | |
Scenario (+/-50%) | |
Financial investments | |
| Decrease | | |
| 138,784 | | |
| 104,088 | | |
| 69,392 | |
| |
| Increase | | |
| 138,784 | | |
| 173,480 | | |
| 208,176 | |
Loans and financing | |
| Decrease | | |
| (425,590 | ) | |
| (319,193 | ) | |
| (212,795 | ) |
| |
| Increase | | |
| (425,590 | ) | |
| (531,988 | ) | |
| (638,385 | ) |
| |
| | | |
| | | |
| | | |
| | |
The Company's goal, when managing
its capital structure, is to ensure that it will continue as a going concern and be able to finance investment opportunities,
by keeping a healthy credit profile and offering an appropriate return to its shareholders.
The Company has relationships
with the main national and international financial institutions. As off March 31, 2015, Fitch Ratings, Moody's and Standard and
Poor's assigned the Company the credit ratings "AAA (bra)", "Aaa.br" and "brAAA", respectively,
in their local rating tables.
The financial leverage ratios
as at March 31, 2015 and 2014, were as follows:
| |
2015 | | |
2014 | |
Third-party capital | |
| | |
| |
Loans and financing (Note 16) | |
| 10,425,643 | | |
| 7,633,519 | |
(-) Cash and cash equivalents (Note 3) | |
| (3,795,287 | ) | |
| (1,771,015 | ) |
(-) Financial investments related to financing (Note 4.1) | |
| (45,829 | ) | |
| (71,088 | ) |
(-) CTNs (Note 9.2) | |
| (501,794 | ) | |
| (434,366 | ) |
| |
| 6,082,733 | | |
| 5,357,050 | |
Equity | |
| | | |
| | |
Shareholder's equity: | |
| | | |
| | |
Attributable to parent company's shareholders | |
| 6,775,209 | | |
| 6,644,509 | |
| |
| 6,775,209 | | |
| 6,644,509 | |
Total capital | |
| 12,857,942 | | |
| 12,001,559 | |
Financial leverage ratios | |
| 47 | % | |
| 45 | % |
The increase in the Company’s
leverage ratios was influenced by new loans and borrowings raised during the year ended March 31, 2015, mainly the syndicated
loan arrangements, CRA, ACCs and BNDES (Note 16). This increase is in line with the Company’s strategy of investing in industrial
equipment and in biological assets, as well as maintaining adequate cash balances.
RAÍZEN ENERGIA S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
| 28. | Retirement
supplementation plan |
Defined contribution
Beginning on June 1, 2011, the
Company started to sponsor the Raiz Benefits Plan, managed by Raízprev - Entidade de Previdência Privada, which is
a not-for-profit private supplementary pension entity.
The entity has administrative
and financial autonomy and is engaged in managing and implementing social security benefit plans, as set out in the Benefit Plan
Rules , whose sponsors are the following companies:
| · | Raízen
Caarapó Açúcar e Álcool Ltda. |
| · | Raízen
Centroeste Açúcar e Álcool Ltda. |
| · | Raízen
Araraquara Açúcar e Álcool Ltda. |
| · | Bioenergia
Costa Pinto Ltda |
| · | Bioenergia
Univalem Ltda |
| · | Bioenergia
Araraquara Ltda |
| · | Raízen
Combustíveis S.A. and its subsidiaries |
In the year ended March 31, 2015,
the amount of contributions recognized as expense was R$11,631 (R$ 8,584 in 2014).
The Company recognizes
a profit sharing liability and expense based on a methodology that takes into account goals already defined to the employees.
The Company recognizes a provision when there is a contractual obligation or when there was a previous practice which created
a constructive obligation.
The Company and its subsidiaries
have an insurance and risk management program that provides coverage and protection compatible with its assets and operations.
RAÍZEN ENERGIA S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
The insurance coverage
taken is based on a strict risk and loss study conducted by local insurance advisors, and the insurance taken is considered by
Management as sufficient to cover probable losses that may arise, based on the nature of the Company’s activities. The details
are as follows:
|
|
|
|
March
31,2015 |
|
Asset
covered |
|
Coverage |
|
Insured
Amount |
|
Amount
of coverage |
|
|
|
|
|
|
|
|
|
Inventories
and property, plant and equipment |
|
Fire,
lightning, explosion, windstorm, breakdown of machinery, loss of profit and other. |
|
12,341,163 |
|
6,575,749 |
|
National
transport |
|
Maritime
risk shipper loads |
|
24,000 |
|
24,000 |
|
General
civil liability for directors and officers |
|
Third
party complaints |
|
Not
aplicable |
|
240,000 |
|
Total |
|
|
|
12,365,163 |
|
6,839,749 |
|
The risk provisions
adopted are not part of the scope of financial statement auditing. Consequently, they were not examined by the Company’s
independent auditors.
| 30. | Internal
reorganization and business combinations |
1) Transactions occurring
during the year ended on March 31, 2015
i) Restructuring of
cogeneration business activities
As mentioned in Note 1, during
the year ended March 31, 2015, the Company and its subsidiaries underwent a corporate restructuring in which 11 new companies
were created in June 2nd 2014. These companies are holders of permits for exploration of thermoelectric companies (“TPSs”).
The Company and its subsidiaries also carried out a capital increase in its net assets at book value on the energy cogeneration
activities in 10 of these new companies. This corporate restructuring has no impact on the consolidated financial statement.
ii) Purchase of Cerrado Açúcar
e Álcool S.A. (“Cerrado”)
On December 17, 2013, Raízen
Energia acquired all the shares of Cerrado for R$ 48,903, paid in cash resulting in a preliminary goodwill of R$ 33,663 recorded
in the Company’s consolidated financial statements as of March 31, 2014. This acquisition was made to increase the supply
of sugar cane and expected synergies arising from the Company's existing operations.
During the year ended March 31,
2015, the allocation of the purchase price was concluded by the Company’s management, based on the fair value of assets
acquired and liabilities assumed, as follows:
RAÍZEN ENERGIA S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
Description |
|
Total |
|
|
|
|
|
Biological assets |
|
15,240 |
|
(-) Consideration transferred, net of cash received |
|
48,903 |
|
|
|
|
|
Preliminary goodwill |
|
33,663 |
|
Leases (Note 14) |
|
4,184 |
|
Partnership contracts (Note 14) |
|
8,119 |
|
Supply contracts (Note 14) |
|
3,230 |
|
Deferred taxes on appreciation of assets (Note 18.c) |
|
(6,530) |
|
|
|
9,003 |
|
Goodwill |
|
24,660 |
|
The fair value of the assets
acquired and liabilities assumed is categorized within level 3.
2) Transactions occurring
during the year ended on March 31, 2014
2.1) Business combination
| i) | Costa Rica Canavieira
Ltda. ("Costa Rica") |
On June 28, 2012, Raízen
Energia acquired all the shares of Costa Rica, for R$115,000, as follows: i) R$100,000 paid in cash, and ii) conditional payment
of up to R$15,000, dependent on the fulfillment of specified terms of the agreement. This acquisition was made to increase the
supply of sugarcane and to achieve synergies in existing Company operations.
On July 6, 2012, the Company
paid R$8,435 to settle the conditional payment. Thus, upon completion of the transaction, the amount paid for the acquisition
of Costa Rica totaled R$108,435.
During the year ended March 31,
2014, the purchase price allocation was concluded, based on the fair value of assets acquired and liabilities assumed, as follows:
|
|
Total |
|
|
|
|
|
Biological assets |
|
20,827 |
|
Lease agreements for land |
|
9,375 |
|
Supply contracts for cane |
|
20,847 |
|
Deferred taxes on appreciation
of assets |
|
(17,357 |
) |
|
|
33,692 |
|
Consideration
transferred, net of cash received |
|
108,434 |
|
Preliminary
goodwill |
|
74,742 |
|
Net effect of the sale of
contractual rights of leases of land (i) |
|
(17,573 |
) |
Final goodwill |
|
57,169 |
|
(i)
On September 26, 2012, Raízen Energia sold to São Martinho S.A. the rights of certain agricultural contracts acquired
through the business combination with Costa Rica, for R$ 19,730.
RAÍZEN ENERGIA S.A.
Notes to consolidated financial statements
Years ended March 31, 2015, 2014 and 2013
(In thousands of Brazilian Reais, unless otherwise indicated)
The main differences between
the preliminary and final goodwill are presented below:
Description |
|
Total |
|
|
|
|
|
Biological
assets |
|
20,827 |
|
Land
leasing agreements |
|
9,375 |
|
Partnership
agricultural agreements (i) |
|
19,730 |
|
|
|
49,932 |
|
Consideration
transferred, net of cash acquired |
|
108,434 |
|
Preliminary goodwill
|
|
58,502 |
|
Sugarcane supply agreements |
|
(1,117 |
) |
Deferred taxes on appreciation
of assets |
|
17,357 |
|
Net effect of the sale of
contractual rights of leases of land |
|
(17,573 |
) |
Final goodwill |
|
57,169 |
|
The fair value of the assets
acquired and liabilities assumed is categorized within level 3.
Fire in the Santos Liquids
Terminal
On April 2, 2015, a fire broke
out at the Terminal Intermodal de Santos (“TIS”), facility operated by Ultracargo - Operações Logísticas
e Participações Ltda. (“Ultracargo”), which reached partially assets belonging to Terminal de Exportação
de Álcool de Santos Ltda. (“TEAS”). The TEAS is a company controlled by Raizen Energia SA. On March 31, 2015,
TEAS had assets in the amount of R$ 59 million. The contractual relationship between the TEAS and Ultracargo covers risks to which
the TEAS is exposed. The causes and accident damage are under investigation.
Issuance of Agricultural Receivable
Certificates (CRAs)
According to the notice about
the Closing of Public Offering of 1st Series of the 14th Issue of Gaia Agro Securitizadora, published on June 18, 2015, RESA concluded
the issue of CRAs for funding the amount of R$ 675 million maturing in June 2021, considering the full exercise of Greenshoe (20%),
pursuant to Article 14, paragraph 2 of CVM Instruction 400 and full exercise of Hot Issue (15%), in accordance with Article 24
of CVM Instruction No. 400. The financial settlement occurred on June 16, 2015.
* * *
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