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Agropecuária Maggi Ltda. - amaggi.com.br
Transcript of Agropecuária Maggi Ltda. - amaggi.com.br
Agropecuária Maggi Ltda.
Financial Statements as of
December 31, 2014
Agropecuária Maggi Ltda.
Financial statements as of
December 31, 2014
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Content
Independent auditor’s report 3
Statements of financial position 5
Statements of comprehensive income 6
Statements of changes in equity 7
Statements of cash flows 8
Notes to the consolidated and individual financial statements 9
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KPMG Auditores Independentes
Rua Sete de Setembro, 1.950
13560-180 - São Carlos, SP - Brasil
Caixa Postal 708
13560-970 - São Carlos, SP - Brasil
Central Tel 55 (16) 2106-6700
Fax 55 (16) 2106-6767
Internet www.kpmg.com.br
KPMG Auditores Independentes, uma sociedade simples brasileira e
firma-membro da rede KPMG de firmas-membro independentes e
afiliadas à KPMG International Cooperative (“KPMG International”),
uma entidade suíça.
KPMG Auditores Independentes, a Brazilian entity and a member
firm of the KPMG network of independent member firms affiliated
with KPMG International Cooperative (“KPMG International”), a
Swiss entity.
Independent auditor’s report
To
The Board of directors and quotaholders of
Agropecuária Maggi Ltda.
Cuiabá - MT
We have audited the accompanying individual and consolidated financial statements of
Agropecuária Maggi Ltda. (“the Company”), identified as Company and Consolidated,
respectively, which comprise the statement of financial position as at December 31, 2014, the
statements of profit and loss and other comprehensive income, changes in equity and cash flows
for the year then ended, and notes, comprising a summary of significant accounting policies and
other explanatory information.
Management’s responsibility for the financial statements
Management is responsible for the preparation and fair presentation of these individual and
consolidated financial statements in accordance with accounting practices adopted in Brazil and
in accordance with International Financial Reporting Standards (IFRS) issued by the
International Accounting Standards Board – IASB and for such internal control as management
determines is necessary to enable the preparation of financial statements that are free from
material misstatement, whether due to fraud or error.
Auditors’ responsibility
Our responsibility is to express an opinion on these individual and consolidated financial
statements based on our audit. We conducted our audit in accordance with the Brazilian and
International Standards on Auditing. Those standards require that we comply with ethical
requirements and plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the individual and consolidated financial statements. The procedures selected
depend on our judgment, including the assessment of the risks of material misstatement of the
individual and 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 individual and 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. An audit also includes evaluating
the appropriateness of accounting policies used and the reasonableness of accounting estimates
made by management, as well as evaluating the overall presentation of the individual and
consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinion.
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Opinion
In our opinion, the individual and consolidated financial statements give a true and fair view of
the individual and consolidated financial position of the Agropecuária Maggi Ltda. as at
December 31, 2014, and of its individual and consolidated financial performance and its
individual and consolidated cash flows for the year then ended in accordance with International
Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board –
IASB.
KPMG Auditores Independentes
CRC 2SP014428/O-6
Claudio José Biason
Accountant CRC 1SP144806/O-7
São Carlos, February 27, 2015
Agropecuária Maggi Ltda.
Statements of financial position
December 31, 2014 and 2013
(In thousands of US Dollars)
Assets Note 2014 2013 2014 2013 Liabilities Note 2014 2013 2014 2013
Cash and cash equivalents 6 89,138 22,466 88,288 22,452 Accounts payable to suppliers 16 62,308 64,857 45,386 51,342
Trade accounts receivable 7 46,554 41,547 44,350 42,248 Loans and financing 17 135,374 178,095 135,261 178,095
Inventories 8 133,313 128,886 107,023 128,885 Advances from customers 16,953 61,013 7,253 61,007
Biological assets 9 168,682 180,940 148,863 180,938 Taxes payable 559 1,317 470 1,299
Advances to suppliers 11 15,227 11,574 12,779 11,556 Salaries and vacation payable 5,934 6,028 5,389 6,024
Recoverable taxes 12 20,863 9,386 20,097 9,335 Derivative financial instruments 18 36,545 35,401 36,545 35,401
Securities brokerage operations 9,414 2,894 9,414 2,894 Other accounts payable 227 797 308 762
Derivative financial instruments 18 534 4,948 534 4,948 Total current liabilities 257,900 347,508 230,612 333,930
Prepaid expenses 5,323 2,798 5,186 2,798
Other credits 16,765 10,986 16,756 10,983
Total current assets 505,813 416,425 453,290 417,037 Accounts payable to suppliers 16 3,916 33,401 3,916 19,451
Loans and financing 17 477,450 230,130 476,778 230,130
Taxes payable - 3 - -
Trade accounts receivable 7 2,142 4,309 2,842 5,009 Provision for civil, labor and tax risks 20 1,540 1,859 1,486 1,811
Advances to suppliers 11 23,722 27,090 23,722 27,090 Deferred income tax and social contribution 10 150,581 186,920 139,846 182,755
Recoverable taxes 12 2,160 1,705 2,122 1,705 Total non-current liabilities 633,487 452,313 622,026 434,147
Loans granted 13 3,813 816 3,813 7,358
Prepaid expenses 7,548 1,566 7,044 1,566 Total liabilities 891,387 799,821 852,638 768,077
Other credits 627 755 509 603
Biological assets 9 3,804 25,744 3,738 25,679 Equity
Investments 14 2,588 2,528 107,216 42,828 Capital 115,190 115,190 115,190 115,190
Property, plant and equipment 15 758,680 710,467 667,853 630,786 Equity valuation adjustments 251,364 254,686 251,364 254,686
Intangible assets 2,108 14 2,107 14 Reserve special of goodwill on merger (21,353) (21,353) (21,353) (21,353)
Total non-currrent assets 807,192 774,994 820,966 742,638 Profit reserve to be destined 76,417 43,075 76,417 43,075
Total equity attributable to controlling interest 421,618 391,598 421,618 391,598
Total equity 22 421,618 391,598 421,618 391,598
Total assets 1,313,005 1,191,419 1,274,256 1,159,675 Total equity and liabilities 1,313,005 1,191,419 1,274,256 1,159,675
The notes are na integral part of these consolidated financial statements
Consolidated Company CompanyConsolidated
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Agropecuária Maggi Ltda.
Statements of comprehensive income
Years ended December 31, 2014 and 2013
(In thousands on US Dollars)
Note 2014 2013 2014 2013
Net revenue 23 378,017 409,536 343,458 409,536
Changes in fair value of biological assets 9 39,516 76,756 27,251 76,756
Cost of goods and services (405,371) (454,428) (371,667) (455,128)
Gross profit 24 12,162 31,864 (958) 31,164
Selling expenses 25 (6,139) (5,496) (5,106) (5,496)
Administrative expenses 26 (9,982) (15,053) (9,492) (14,374)
Net other operating income (expenses) 27 20,448 25,988 19,560 26,085
Equity interest gain (loss) in subsidiaries 14 44 255 8,818 18,988
Income from operating activities and emplayees' profit sharing 16,533 37,558 12,822 56,367
Financial revenues 85,218 27,199 78,604 23,968
Financial expenses (134,661) (62,485) (131,372) (60,266)
Translation gain (loss) 48,615 13,672 44,742 (3,335)
Net financial income (expenses) 28 (828) (21,614) (8,026) (39,633)
Net income before income tax and social contribution and emplayees' profit
sharing 15,705 15,944 4,796 16,734
Income tax and social contribution - deferred 17,304 (2,263) 27,924 (3,113)
Income tax and social contribution - current (119) (9,220) - (9,160)
Net income before emplayees' profit sharing 32,890 4,461 32,720 4,461
Employees' profit sharing (2,870) (3,500) (2,700) (3,500)
Net income for the year 30,020 961 30,020 961
The notes are na integral part of these consolidated financial statements
Consolidated Company
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Agropecuária Maggi Ltda.
Statements of changes in equity
Years ended December 31, 2014 and 2013
(In thousands on US Dollars)
Capital
Equity valuation
adjustments
Reserve special of
goodwill on merger
Profit reserve to
be destined
Accumulated
profit Total equity
Balances at January 1, 2013 115,190 240,754 - 81,094 - 437,038
Dividends distribution - - - (25,048) - (25,048)
Deemed Cost realization - (1,748) - - 1,748 -
Deemed Cost realization in subsidiaries - (89) - - 89 -
Imcorporation Agropecuária Morrinhos Ltda - 15,769 - - (15,769) -
Recognition of special reserve of goodwill on merger - - (21,353) - - (21,353)
Net income for the year - - - - 961 961
Profit destination
Profit reserve to be destined - - - (12,971) 12,971 -
Balances at December 31, 2013 115,190 254,686 (21,353) 43,075 - 391,598
Deemed Cost realization - (2,014) - - 2,014 -
Deemed Cost realization in subsidiaries - (1,308) - - 1,308 -
Net income for the year - - - - 30,020 30,020
Allocation of net income:
Profit reserve to be destined - - - 33,342 (33,342) -
Balances at December 31, 2014 115,190 251,364 (21,353) 76,417 - 421,618
30,020
The notes are na integral part of these consolidated financial statements
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Agropecuária Maggi Ltda.
Statements of cash flows
Years ended December 31, 2014 and 2013
(In thousands on US Dollars)
2014 2013 2014 2013
Cash flows from operating activities
Net income for the year 30,020 961 30,020 961
Adjustment to:
Depreciation and amortization 10,733 11,354 8,592 10,734
Residual cost on disposal of fixed assets 16,929 2,756 15,361 1,734
Deferred income tax and social contribution (17,304) 2,263 (27,924) 3,113
Net impacts of cumulative translation adjustments in subsidiaries - - - 8
Equity interest gain (loss) (44) (255) (8,818) (18,988)
Provision (reversion) for civil, labor and tax risks (319) (273) (325) (266)
Incurred interests and exchange variation 4,277 (2,183) 3,453 8,288
Accrued interests (337) (76) (557) (25)
Unrealized derivatives 5,558 29,798 5,558 29,798
Changes in fair value of biological assets (39,516) (76,756) (27,251) (76,756)
Reversal of allowance for doubtful accounts 216 - 180 -
Provision for inventory losses 112 112 112 112
Investments losses on incorporation - - - 4,640
Provision for devaluation of inventories 7,726 - 6,504 -
18,051 (32,299) 4,905 (36,647)
Changes on assets and liabilities
(Increase) Trade accounts receivable (3,090) (11,904) (149) (11,905)
Decrease (Increase) Inventories (12,265) 52,612 655 52,610
Decrease (Increase) Advances to suppliers (285) 21,467 2,145 21,468
Decrease (Increase) Recoverable taxes (11,932) 4,988 (11,179) 4,803
Decrease (Increase) Securities brokerage operations (6,520) 4,699 (6,520) 4,699
(Increase) Prepaid expenses (8,507) (4,364) (8,372) (4,364)
Decrease (Increase) Other credits (5,617) 9,077 (5,645) 9,054
Decrease Biological assets 73,714 47,758 63,647 47,760
Increase (Decrease) Accounts payable to suppliers (32,034) (1,387) (21,491) 11,239
Increase (Decrease) Advances from customers (44,060) 18,623 (53,754) 18,624
Increase (Decrease) Taxes payable (761) 98 (829) 233
(Decrease) Salaries and vacation payable (94) (1,603) (635) (1,603)
Increase (Decrease) Other accounts payable (570) 334 (454) 339
Increase (Decrease) Deferred income tax and social contribution (19,035) 29,298 (14,985) 31,783
Cash provided (utilized) in from operations (71,056) 169,696 (57,566) 184,740
Interest paid (32,202) (18,146) (32,202) (18,622)
Net cash provided (utilized) in operating activities (85,207) 119,251 (84,863) 129,471
Cash flow from investing activities
Increase on investments - (220) - (216)
Advances for future capital increase - - (12,417) (15,941)
Acquisition of property, plant and equipment and intangible (77,969) (125,492) (73,534) (125,471)
Loans granted to related parties (4,007) (55,734) (8,767) (29,347)
Loans received from related parties 1,347 55,053 12,909 23,372
Cash flow utilized in investing activities (80,629) (80,629) (81,809) (147,603)
Cash flows from financing activities
Financial funding 494,282 264,176 494,282 264,176
Payments of loans and financing (261,774) (207,064) (261,774) (207,064)
Dividends paid - (25,048) - (25,048)
Net cash provided in financing activities 232,508 32,064 232,508 32,064
Increase in cash and cash equivalents 66,672 66,672 65,836 13,933
Statements of increase in cash and cash equivalents
At beginning for the year 22,466 8,544 22,452 8,519
At end for the year 89,138 22,466 88,288 22,452
66,672 13,922 65,836 13,933
The notes are na integral part of these consolidated financial statements
Consolidated Company
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Agropecuária Maggi Ltda.
Financial statements as of
December 31, 2014
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Notes to the consolidated and individual financial statements
(In thousands of U.S. dollars)
1. Reporting entity
Agropecuária Maggi Ltda. (the “Company”) is a limited entity domiciled in the city of Cuiabá,
state of Mato Grosso, Brazil. Its activities consist on the production and trading of agricultural
products, mainly soybean, corn and cotton and production and processing of seeds.
2. Subsidiaries
Shareholding
2014 2013
Direct subsidiary Country
Agro Sam Agricultura e Pecuária Ltda. Brazil 100.00% 100.00%
Associate
Amaggi Argentina S.A. Brazil 11.00% 11.00%
Amaggi Construções de Rodovias Ltda. Brazil 36.00% 36.00%
Agro Sam Agricultura e Pecuária Ltda.
Agro Sam Agricultura and Pecuária Ltda. is domiciled in the city of Cuiabá, state of Mato
Grosso, Brazil. Company’s activities consists on the production and trading of agricultural
products, mainly soybean, corn and cotton.
Amaggi Argentina S.A.
Amaggi Argentina S.A. is located in the city of San Isidro, state of Buenos Aires, Argentina and
its operations mainly consist in the trading of soybean, corn, wheat, sorghum and barley.
Amaggi Construções de Rodovias Ltda.
Amaggi Construções de Rodovias Ltda. is domiciled in the city of Cuiabá, state of Mato Grosso,
Brazil, and its activities consist, mainly, in the construction of roads.
3. Basis of preparation
a. Basis of accounting
The financial statements of the Company, which were prepared in accordance with
accounting practices adopted in Brazil, including the pronouncements issued by the
Accounting Pronouncements Committee - CPC and the International Financial Reporting
Standards - IFRS issued by the International Accounting Standards Board - IASB, one
since starting in 2014, the IFRS applicable to separated financial statements allowed the
application of the equity method in subsidiaries in the separated financial statements.
Agropecuária Maggi Ltda.
Financial statements as of
December 31, 2014
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The financial statements, accompanied by the independent auditors report were authorized
for issue by the Board of Directors on February 27, 2015.
Details of the Company's accounting policies are presented in note 4.
b. Basis of measurement
Financial statements have been prepared based on the historical cost basis except for the
following material items recognized on balance sheet:
Derivative financial instruments measured at fair value through profit and loss;
Non-derivative financial instruments measured at fair value through profit or loss; and
Biological assets measured at fair value.
c. Functional and presentation currency
Management defined Dollar (USD) as Company’s functional currency, according with the
rules described on “IAS 21 – The Effects of Changes in Foreign Exchange Rates”.
All financial information presented in U.S. Dollar has been rounded to the nearest
thousands, except when otherwise indicated.
d. Use of estimates and judgments
The preparation of financial statements according to IFRS requires management to perform
judgments, estimates and to adopt assumptions that affect the application of accounting
policies and the reported amounts of assets, liabilities, revenue and expenses. Actual results
of assets, liabilities, revenues and expenses may differ from these estimates.
Estimates and assumptions are reviewed on an ongoing basis. Reviews of accounting
estimates are recognized prospectively.
(i) Judgments
Information about judgments made in applying accounting policies that have the most
significant effects on the amounts recognized in the financial statements is included in the
following notes:
Note 2 and 4.a – Consolidation: whether the Company has the facto control over an
investee.
(ii) Assumptions and estimation uncertainties
Information about uncertainties on assumptions and estimates that have a significant risk of
resulting in a material adjustment within the next financial year are included in the
following notes:
Agropecuária Maggi Ltda.
Financial statements as of
December 31, 2014
11
Note 4.d. (iii) – Useful life of property, plant and equipment;
Note 4.g. – Impairment test: key assumptions underlying recoverable amounts;
Note 4.n. e 10 – Recognition of deferred tax assets: availability of future taxable income to
compensate tax losses;
Note 5 e 9 – Determination of fair value of biological assets;
Note 18 – Determination of fair value of financial assets and liabilities; and
Note 20 – Provision for civil, labor and tax risks.
4. Significant accounting policies
The accounting policies set out below have been applied consistently to all periods reported in
these consolidated and individual financial statements.
a. Basis of consolidation
(i) Controlled entities
The entity controls another entity when is exposed, or have the rights, on the variable
income if this entity and has the ability to affect this income exercising its power over the
entity. The financial statements of controlled entities are included in the consolidated
financial statements from the date the control begins and they are maintained until the date
the control no longer exists.
(ii) Investments in associates
Associates are those entities in which the Group, directly or indirectly, has significant
influence, but not control, over the financial and operating policies.
The investments on associates are accounted by equity method on the consolidated and
individual financial statements and are initially recognized by cost plus transaction costs.
After initial recognition, consolidated financial statements include the participation on profit
or loss and other comprehensive income of the investee until the date that significant
influence exists.
The consolidated financial statements include the profit or loss and other comprehensive
income of equity accounted investees, after adjustments to align its accounting policies with
those of the Group, from the date that significant influence begins until the date that
significant influence or ceases.
When the Company’s share of losses exceeds its interest in an equity-accounted investee,
the carrying amount of the investment, including any long-term interests that form part
thereof, is reduced to zero, and the recognition of further losses is discontinued except to the
extent that the Group has an obligation or has made payments on behalf of the investee.
Agropecuária Maggi Ltda.
Financial statements as of
December 31, 2014
12
(iii) Transactions eliminated on consolidation
Intra-group balances and transactions, and any unrealized profit or loss arising from intra-
group transactions, are eliminated during the preparation of the consolidated financial
statements.
Unrealized gains arising from transactions with equity-accounted investees are eliminated
against the investment on the extent of the Group’s interest in the investee.
Unrealized losses are eliminated in the same way as unrealized gains, but only to the extent
that there’s no evidence of impairment.
b. Foreign currency
(i) Foreign currency transactions
Transactions in foreign currency are converted to the respective functional currency of the
Company at exchange rates in the dates of the transactions.
Monetary assets and liabilities denominated in foreign currencies at the reporting date are
converted to the functional currency at the exchange rate at that date. Exchange rate gain or
loss on monetary items is the difference between the amortized cost in the functional
currency at the beginning of the year, adjusted for effective interest and payments during the
year, and the amortized cost in foreign currency at the exchange rate at the reporting
exercise.
Non-monetary assets and liabilities denominated in foreign currencies that are measured at
fair value are converted to the functional currency at the exchange rate at the date that the
fair value was determined. Foreign currency differences are generally recognized in profit
or loss. Non-monetary items that are measured based on historical cost in foreign currency
are not translated.
The income and expenses of foreign operations are converted to U.S. Dollar at exchange
rates on the date of transactions.
c. Financial instruments
(i) Non-derivative financial assets
The Company and its subsidiary recognizes loans and receivables on the date that they are
originated. All other financial assets (including assets designated as at fair value through
profit or loss) are recognized initially on the trade date, which is the date that the Company
becomes party to the contractual dispositions of the instrument.
The Company and its subsidiary derecognizes a financial asset when the contractual rights
to the cash flows from the asset expire, or when the Company transfers the rights to receive
the contractual cash flows of a financial asset in a transaction in which substantially all the
risks and rewards of ownership of the financial asset are transferred. Any interest in such
Agropecuária Maggi Ltda.
Financial statements as of
December 31, 2014
13
transferred financial assets that is created or retained by the Company is recognized as a
separate asset or liability.
Financial assets and liabilities are offset and the net amount reported in the statement of
financial position when, and only when, the Company has legal right to offset the amounts
and intends either to settle on a net basis or to realize the asset and settle the liability
simultaneously.
The Company and its subsidiary classifies non-derivative financial assets into the following
categories: recorded at fair value through profit or loss and loans and receivables.
Financial assets at fair value through profit or loss
A financial asset is classified as at fair value through profit or loss if it is classified as held
for trading or is designated as such on initial recognition. Financial assets are designated as
at fair value through profit or loss if the Company or its subsidiary manages such
investments and makes purchase and sales decisions based on the fair value in accordance
with the Company’s documented risk management and the Company investments strategy
or its subsidiary. Attributable transaction costs are recognized as incurred after the initial
recognition. Financial assets recorded as at fair value through profit or loss are measured at
fair value and changes on the fair value are recognized in profit or loss.
Loans and receivables
Loans and receivables are financial assets with fixed or determinate payments that are not
quoted in an active market. Such assets are recognized initially at fair value plus any
directly attributable transaction costs. Subsequent to initial recognition, loans and
receivables are measured at amortized cost using the effective interest method, less any
impairment losses.
Loans and receivables comprise cash and cash equivalents, trade accounts receivable,
securities brokerage operation (assets), loans granted and other credits.
Cash and cash equivalents
Cash and cash equivalents includes cash balances, bank deposits and financial investments
convertible into cash in an period within 90 days without significant loss on the amounts.
(ii) Non-derivative financial liabilities
Financial liabilities are initially recognized on the trade date, which is the date that the
Company or its subsidiary becomes party to the contractual dispositions of the instrument.
The Company or its subsidiary derecognizes a financial liability when its contractual
obligations are discharged, cancelled or expire.
The Company and its subsidiary classifies non-derivative financial liabilities into the other
financial liabilities category. Such liabilities are recognized initially at fair value plus any
directly attributable transaction cost. Subsequent to initial recognition, these financial
liabilities are measured at amortized cost using the effective interest method.
Agropecuária Maggi Ltda.
Financial statements as of
December 31, 2014
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The Company and its subsidiary has the following non-derivative financial liabilities:
accounts payable to suppliers, loans and financing and other accounts payable.
(iii) Capital
Quotes of capital are classified as equity.
(iv) Derivative financial instruments
The Company has derivative financial instruments to protect itself from exposures resulting
from changes in foreign currency and interest rate. Embedded derivatives are separated
from their principal contracts and are recorded individually in case the economic features,
the risks of the principal contract and the embedded derivative aren’t intrinsically related; or
if an individual instrument with the same conditions of the embedded derivative meets the
same conditions as a derivative, and the instrument combined is not measured by the fair
value through profit or loss.
Derivatives are initially recognized at the fair value; directly attributable transaction costs
are recognized at profit or loss as incurred. Subsequent to the initial recognition, derivatives
are recorded by its fair value, and the changes on fair value are recognized on profit or loss.
d. Property, plant and equipment
(i) Recognition and measurement
Items of property, plant and equipment are measured at cost of acquisition or construction
less accumulated depreciation and accumulated losses by impairment losses.
Cost includes disbursements that are directly attributable to the acquisition of the asset. The
cost of self-constructed assets includes the following:
The cost of materials and direct labor;
Any other costs directly attributable to bring the assets to a working condition for their
intended use by Management;
Dismantling costs and the costs to restore the site on which the assets are located; and
Capitalized borrowing costs on qualifying assets.
Purchased software that is an integrant part of the functionality of an equipment is
capitalized as part of that equipment.
When parts of an item of property, plant and equipment have different useful lives, they are
accounted for as separate items (major components) of property, plant and equipment.
Gains and losses on the disposal of an item of property, plant and equipment (the difference
between the amount of the disposal and the carrying amount), are recognized in “net other
operating income (expense)” in the “statements of comprehensive income”.
Agropecuária Maggi Ltda.
Financial statements as of
December 31, 2014
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(ii) Subsequent costs
Subsequent costs are capitalized only when it is probable that the future economic benefits
associated with the costs will flow to the Company. Ongoing repairs and maintenance are
expensed as incurred.
(iii) Depreciation
Items of property, plant and equipment are depreciated on a straight-line basis in profit or
loss over the estimated useful lives of each component. Land is not depreciated.
Items of property, plant and equipment are depreciated from the date that they are installed
and are ready for use, or in respect of internally constructed assets, from the date that the
asset is completed and ready for use.
The estimated useful lives for the current year are as follows:
Classes of assets
Useful life
(Average) years
Weighted
Average Rate (p.y.)
Aircraft 19.60 5.10%
Improvements in properties of third parties 26.33 3.80%
Buildings 32.23 3.10%
Ships 13.92 7.19%
Hardware 3.15 31.71%
Facilities 19.58 5.11%
Machines and equipment 16.51 6.06%
Furniture and fixtures 10.77 9.28%
Radio-communication 7.72 12.95%
Vehicles 4.66 21.46%
Depreciation methods, useful lives and residual amounts are reviewed at each reporting date
and eventual adjustments are recorded as changes in accounting estimates.
e. Biological assets
Biological assets are measured at fair value less costs to sell. Changes on fair value less
costs to sell are recognized in profit or loss.
f. Inventories
Inventories are measured at the lower of cost and net realizable value. The cost of
inventories is based on the mobile weighted average. In the case of manufactured
inventories and work in progress, cost includes an appropriate share of production
overheads based on normal operating capacity.
The cost of biological assets transferred to inventories is its fair value less expense to sell at
the date of harvest.
Agropecuária Maggi Ltda.
Financial statements as of
December 31, 2014
16
g. Impairment
(i) Non-derivative financial assets
Financial assets not classified at fair value through profit or loss, including in an interest in
an equity-accounted investee, are assessed at each reporting date to determine whether there
is objective evidence of impairment.
Objective evidence that financial assets are impaired includes:
default or delinquency by a debtor;
restructuration of amounts on terms that would not be considered otherwise;
indications that a debtor or issuer will enter bankruptcy;
adverse changes in the payment status of borrowers or issuers;
the disappearance of an active market for a security; or
Observable date indicating that there is measurable decrease in expected cash flows from
a group of financial assets.
For an investment in an equity security, objective evidence of impairment includes a
significant or prolonged decline in its fair value below its cost.
Financial assets measured at amortized cost
The Company considers evidence of impairment for assets measured at amortized cost at
both a specific asset and collective level.
All individually significant assets are assessed for specific impairment and if found not to
be specifically impaired are then collectively assessed for any impairment that has been
incurred but not yet identified.
Assets that are not individually significant are collectively assessed for impairment by
grouping together assets with similar risk characteristics.
In assessing collective impairment, the Company uses historical trends of the probability of
default, the timing of recoveries and the amount of loss incurred, adjusted for management’s
judgment as to whether current economic and credit conditions are such that the actual
losses are likely to be greater or less than suggested by historical trends.
An impairment loss in respect of a financial asset measured at amortized cost is calculated
as the difference between its carrying amount and the present value of the estimated future
cash flows discounted at the assets original effective interest rate.
Losses are recognized in profit or loss and reflected in an allowance account against loans
and receivables.
Agropecuária Maggi Ltda.
Financial statements as of
December 31, 2014
17
When an event occurring after the impairment was recognized causes the amount of the
impairment loss to decrease, the decrease in impairment loss is reversed through profit or
loss.
Equity-accounted investees
An impairment loss in respect of an equity-accounted investee is measured by comparing
the recoverable amount of the investment with is carrying amount. An impairment loss is
recognized on profit or loss and is reversed if there has been a favorable change in the
estimates used to determine the recoverable amount.
(ii) Non-financial assets
The carrying amounts of the Company's non-financial assets (other than biological assets,
inventories and deferred tax assets) are reviewed at each reporting date to determine
whether there is any indication of impairment. If any such indication exists, than the asset's
recoverable amount is estimated. Goodwill is tested annually for impairment.
An impairment loss is recognized if the carrying amount of the asset or cash generation unit
(“CGU”), that comprises assets that cannot be tested individually and that for this reason are
grouped into the smallest group of assets that generates inflows in a continuous use and that
are significantly independents of inflows generated by other assets or group of assets,
exceeds the recoverable amount.
The recoverable amount of an asset or CGU is the greater between its value in use and its
fair value less costs to sell.
In assessing value in use, the estimated future cash flows are discounted to their present
value using a pre-tax discount rate that reflects current market assessments of the time value
of money and the risks specific to the asset or CGU.
Impairment losses are recognized in profit or loss.
An impairment loss is reversed only to the extent that the asset’s carrying amount does not
exceed the carrying amount that would have been determined, net of depreciation or
amortization, if no impairment loss had been recognized.
h. Advances to suppliers
The advances to suppliers with prices to be determined are update in accordance with the
rates defined in the purchase agreement. Other advances are maintained by their original
amount.
i. Employee benefits
(i) Defined contribution plans
A defined contribution plan is a post-employment benefit plan under which an entity pays
fixed contributions into a separate entity (Private pension entity) and has no legal or
Agropecuária Maggi Ltda.
Financial statements as of
December 31, 2014
18
constructive obligation to pay further amounts. Obligations for contributions to defined
contribution plans are recognized as an employee benefit expense in profit or loss in the
periods during which related services are rendered by employees.
(ii) Short-term employee benefits
Short-term employee benefits obligations are measured on an undiscounted basis and are
expensed as the related service is rendered. A liability is recognized for the amount
expected to be paid under short-term cash bonus or profit-sharing plans if the Company p
has a present legal or constructive obligation to pay this amount as a result of past service
provided by the employee, and the obligation can be estimated reliably.
j. Provisions
A provision is recognized, as a result of a past event, if the Company has a present legal or
constructive obligation that can be estimated reliably, and it is probable that an outflow of
economic benefits will be required to settle the obligation.
k. Revenue
(i) Agricultural goods sold
Revenue from the sale of goods in the course of ordinary activities is measured at the fair
value of the consideration received or receivable.
Operational revenue is recognized when persuasive evidence exists, usually in the form of
an executed sales agreement, that the significant risks and rewards of ownership have been
transferred to the customer, recovery of the consideration is probable, the associated costs
and possible return of goods can be estimated reliably, there is no continuing management
involvement with the goods, and the amount of revenue can be measured reliably.
The timing of the transfer of risks and rewards varies depending on the individual terms of
the sales agreement. For sales of the following products: soybean, gross and degummed
soybean oil, soy meal, soybean hulls, corn, cotton, seeds and fertilizers, the transference
usually occurs when the product is delivered to the client’s warehouse; however, in cases
where the sells take place in foreign markets, the transferences are made when the shipment
of the products occurs in the seller’s port.
l. Lease
(i) Lease payments
Payments made under operating leases are recognized in profit or loss on a straight-line
basis over the term of the lease.
(ii) Determining whether an arrangement contains a lease
At inception of an arrangement, the Company determines whether such an arrangement is or
contains a lease. This will be the case if the following conditions are fulfilled:
Agropecuária Maggi Ltda.
Financial statements as of
December 31, 2014
19
the arrangement is dependent on the use of a specific asset or assets; and
the arrangement contains a right to use the assets.
The Company separates, on the begin or in the moment of an eventual revaluation of the
contract, payments and other consideration required by an arrangement into those for the
lease and those for other elements on the basis of their relative fair values.
m. Finance income and costs
Financial income comprises interest on marketable securities, gains on hedge instruments
gains on exchange rates variation and changes in fair value of financial assets measured at
fair value through profit or loss. The interest income is recognized in profit or loss using the
effective interest method.
The finance cost comprises interest expense on borrowings, losses with hedge instruments
and losses with exchange rates variation.
Borrowing costs that are not directly attributable to the acquisition, construction or
production of a qualifying asset are recognized in profit or loss using the effective interest
method.
Exchange rata variation gains and losses are presented on a net basis.
n. Income tax
The Company’s and its investees are on the real profit regime or on the presumed tax
regime.
(i) Entities on the real profit regime
The current and deferred income tax and social contribution are calculated on the basis of
the following rates: 15% with an additional of 10% over the taxable profit exceeding BRL
240 for the income tax and 9% over the taxable profit for social contribution and it takes
into consideration the compensation of tax losses and the negative base of social
contribution limited to 30% of the annual taxable profit.
The expenses with income tax and social contribution comprise current and deferred income
taxes. The current tax and the deferred tax are recognized in the income unless they are
related to a business combination or to items directly recognized in equity or other
comprehensive income.
Current tax is the expected tax payable or receivable on the taxable income or loss for the
year, using tax rates enacted or substantively enacted at the reporting date, and any
adjustment to tax payable in respect of previous years.
Deferred tax is recognized taking into consideration the aliquots that are expected to be used
in respect of temporary differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for taxation purposes.
Agropecuária Maggi Ltda.
Financial statements as of
December 31, 2014
20
Deferred tax is measured at the tax rates that are expected to be applied to temporary
differences when they reverse, using tax rates enacted or substantively enacted at the
reporting date.
A deferred tax asset is recognized for unused tax losses, tax credits and deductible
temporary differences to the extent that it is probable that future taxable profits will be
available against which they can be utilized.
Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it
is no longer probable that the related tax benefit will be performed.
In the determination of current and deferred income taxes entities take into consideration the
impact of uncertainties related to tax positions taken and if the payment of an additional
income tax and interest is necessary.
o. Environmental aspects
The Company considers that its facilities and activities are subject to environmental
regulations and decrease the risk associated to environmental aspects with operating
procedures and controls and with investments on equipments that controls pollution.
Company believes that no provision for losses related to environmental aspects is required,
based on the actual laws and regulations.
p. New rules and interpretations not yet adopted
A series of new rules and changes in rules and interpretations are effective to the exercises
started after January 1, 2013 and were not adopted on the preparation of these consolidated
financial statements. Those that may be relevant to the Company are shown below. The
Company do not intend to adopt these rules until they be mandatory.
IFRS 9 Financial Instruments (2010 and 2009)
IFRS 9 (2009) introduces new requirements to classification and measurement of financial
assets. In IFRS 9 (2009) financial assets are classified and measured based in the model they
are maintained and according to its contractual cash flow characteristics. IFRS 9 (2010)
introduces changes related to financial liabilities.
IASB has a project to implement changes on requirements of classification and
measurement of IFRS 9 and to add new requirements relate to impairment of financial
assets and hedge accounting.
IFRS 9 (2010 and 2009) is effective to the exercises started on or after January 1, 2015. The
adoption of IFRS 9 (2010) may not cause impacts in financial assets and liabilities of the
Company.
5. Determination of fair value
Many accounting policies and disclosures of the Company require the determination of fair
value, for both financial and non-financial assets and liabilities. Fair values have been
Agropecuária Maggi Ltda.
Financial statements as of
December 31, 2014
21
determined for measurement and/or disclosure purposes based on the following methods. When
applicable, further information about the assumptions made in determining fair value is
disclosed in the notes specific to that asset or liability.
(i) Biological assets
Fair value of soybean, cotton and corn is based on the present value of future cash flows
expected from biological assets on the most relevant market and include potential biological
transformation and risks related to the assets.
Fair value of rubber trees is based on the present value of future cash flows expected from
biological assets, including revenues from wood sells in the end of the rubber trees useful
lives, on the most relevant market and include potential biological transformation and risks
related to the assets
(ii) Derivative financial instruments
The fair value of forward exchange contract is based on their quoted price, if available. The
fair value of derivative instruments to protect currency and interest is determined by the
future value of agreed conditions and the present value based on market curves, taken from
the Bloomberg and BM&F database.
If a quoted price is not available, then fair value is estimated by discounting the difference
between the contractual forward price and the current forward price for the residual maturity
of the contract using a risk-free interest rate (based on government bonds).
(iii) Transactions with brokers
The fair value of assets and liabilities of the brokerage operations is measured by updating
these amounts at the end of each period, based on contracts of sale and the future price of
commodities in its active markets.
(iv) Trade Accounts receivable
The fair value of trade accounts receivable is estimated as the present value of future cash
flow, discounted by the market rate of interest at the reporting date.
(v) Other credits
The fair value of other receivables is estimated as the present value of future cash flow,
discounted by the market rate of interest at the reporting date.
(vi) Other non-derivative financial liabilities
The fair value of other non-derivative financial liabilities is estimated as the present value of
future cash flow, discounted by the market rate of interest at the reporting date.
Agropecuária Maggi Ltda.
Financial statements as of
December 31, 2014
22
6. Cash and cash equivalents
Consolidated Company
2014 2013 2014 2013
Cash 3 2 3 2
Bank deposits 37,784 19,470 36,934 19,456
Marketable securities 51,351 2,994 51,351 2,994
89,138 22,466 88,288 22,452
Marketable securities refer substantially to Banking Deposits Certificate (CDB), remunerated at
market rates based on Interbank Deposit Certificate (CDI) determined by Cleaning House for
the Custody and Financial Statement of Securities (CETIP). The average percentage of CDI that
remunerates short-term investments of Company on December 31, 2014 is 101.36%.
Details about credit risk, interest rate and other risks related to those assets are reported on note
18.
7. Trade accounts receivable
Consolidated Company
2014 2013 2014 2013
Foreign market 11,606 6,384 6,505 6,384
Foreign market - related parties (note 21) 15,022 5,538 14,724 5,538
Domestic market 10,570 8,797 9,437 8,573
Domestic market - related parties (note 21) 12,066 25,879 16,905 27,279
(-) Provision for doubtful accounts (a) (568) (742) (379) (517)
48,696 45,856 47,192 47,257
Current assets 46,554 41,547 44,350 42,248
Non-current assets 2,142 4,309 2,842 5,009
a) Provision for doubtful accounts
Consolidated Company
2014 2013 2014 2013
Initial balances (742) (742) (517) (517)
Addition (379) - (379) -
Reversed 527 - 517 -
Exchange rate variation 26 - - -
Final balances (568) (742) (379) (517)
Exposure to currency and credit risk and impairment related to trade accounts receivable and
other accounts, except to working in process, are reported on note 18.
Agropecuária Maggi Ltda.
Financial statements as of
December 31, 2014
23
8. Inventories
Consolidated Company
2014 2013 2014 2013
Cotton in seed 2,637 1,727 1,257 1,727
Cotton lint 45,535 26,186 31,249 26,186
Storeroom materials 4,728 3,708 4,278 3,708
Inputs 70,227 72,499 57,945 72,499
Corn 8,733 20,686 8,702 20,686
Seeds 1,774 831 1,684 831
Soybean 2,275 2,265 2,118 2,265
Other inventories 2,107 1,096 3,270 1,095
(-) Impairment provision (a) - (112) - (112)
(-) Provision for inventories devaluation (b) (4,703) - (3,480) -
133,313 128,886 107,023 128,885
Impairment provision of inventories is calculated based on the technical losses estimated to
incur during the transportation of commodities between farms and ports.
Provision for inventories devaluation was calculated to bring inventories of agricultural
products at the lower of cost and net realizable value.
a) Impairment provision
Consolidated Company
2014 2013 2014 2013
Cotton - (76) - (76)
Soybean - (36) - (36)
- (112) - (112)
b) Provision for inventories devaluation
Consolidated Company
2014 2013 2014 2013
Cotton (3,670) - (2,511) -
Soybean (1,033) - (969) -
(4,703) - (3,480) -
9. Biological assets
The Company has eight agricultural units (farms) producing biological assets, which are:
Itamarati, Tucunaré, SM01, Vale do Araguaia, Michelin and Tanguro.
The direct subsidiary Agro Sam owns one agricultural unit (farm) denominated Água Quente.
These farms are located in the state of Mato Grosso, in the cities of Sapezal, Campo Novo do
Parecis, Rondonópolis and São Felix do Araguaia and its activities consist basically on the
agricultural exploration, mainly related to soybean, corn and cotton.
Below are shown the changes on the biological assets:
Agropecuária Maggi Ltda.
Financial statements as of
December 31, 2014
24
Consolidated
Soybean
Soybean
seeds Corn Cotton
Other Total
Balances as of January 01, 2014 162,897 - 10,209 5,812 27,766 206,684
Production costs 154,768 1,947 41,547 52,858 3,336 254,456
Harvested products, transferred to inventory (218,278) - (33,283) (73,598) (3,011) (328,170)
Changes in fair value (b) 30,353 15,863 (7,874) 23,358 (22,184) 39,516
Balances as of December 31, 2014 129,740 17,810 10,599 8,430 5,907 172,486
Soybean
Soybean
seeds Corn Cotton
Other Total
Balances as of January 01, 2013 144,085 - 10,206 3,498 19,897 177,686
Production costs 134,177 - 46,991 26,726 5,653 213,547
Harvested products, transferred to inventory (197,956) - (61,501) (26,034) (3,373) (288,864)
Impairment (a) - - - - 27,559 27,559
Changes in fair value 82,591 - 14,513 1,622 (21,970) 76,756
Balances as of December 31, 2013 162,897 - 10,209 5,812 27,766 206,684
Company
Soybean
Soybean
seeds Corn Cotton
Other Total
Balances as of January 01, 2014 162,897 - 10,209 5,812 27,699 206,617
Production costs 130,677 1,567 37,727 37,604 3,087 210,662
Paid in capital through soybean crops (6,760) - - - - (6,760)
Harvested products, transferred to inventory (198,632) - (30,998) (52,779) (2,760) (285,169)
Changes in fair value (b) 26,843 14,875 (7,091) 14,809 (22,185) 27,251
Balances as of December 31, 2014 115,025 16,442 9,847 5,446 5,841 152,601
Soybean
Soybean
seeds Corn Cotton
Other Total
Balances as of January 01, 2013 144,085 - 10,206 3,498 19,832 177,621
Production costs 134,177 - 46,991 26,726 5,651 213,545
Harvested products, transferred to inventory (197,956) - (61,501) (26,034) (3,373) (288,864)
Impairment (a) - - - - 27,559 27,559
Changes in fair value 82,591 - 14,513 1,622 (21,970) 76,756
Balances as of December 31, 2013 162,897 - 10,209 5,812 27,699 206,617
Consolidated Company
2014 2013 2014 2013
Current assets 168,682 180,940 148,863 180,938
Non-current assets 3,804 25,744 3,738 25,679
172,486 206,684 152,601 206,617
(a) In 2013, a provision of impairment of biological assets constituted in 2012 was reversed
based on the consideration that rubber trees would not be rented during all its useful life.
Initially it was considered a rent during all its useful life.
(b) The reduction on fair value of other biological assets is due to a reduction of the price of
raw rubber sold by Agropecuária Maggi. The price in 2013 was BRL 2.76 and in 2014 BRL
1.81.
Biological assets comprise, substantially, the following plantations (in ha):
Agropecuária Maggi Ltda.
Financial statements as of
December 31, 2014
25
Consolidated Company
2014
2013
2014
2013
Cotton - 4,000 - 4,000
Corn 2,154 - 2,154 -
Rubber trees 7,411 7,411 7,411 7,411
Soybean 161,725 146,697 144,856 146,697
Fair value measurement to all the cultures above have been categorized as level 3, based on the
inputs used on the valuation technique.
There are several risks related to the plantations, which are:
Regulatory and environmental risks
The Company and its direct subsidiary are subject to laws and regulations in many countries in
which it operates. Due to this it was established environmental policies and procedures aimed to
comply with environmental laws and regulations.
Management conducts regular analysis to identify environmental risks and to ensure that the
working systems are suitable to manage these risks.
Risk of supply and demand
The Company and its direct subsidiary are exposed to the risk of price and sales volume of
crops fluctuations. When possible, the Company manages this risk by aligning the extraction
volume with the market supply and demand.
Management conducts regular analysis of the industry trends to ensure that the price structure of
the Company complies with the market and to ensure that projected volumes of extraction are
consistent with the expected demand.
Weather and other risks
The Company and its direct subsidiary are plantations are exposed to damage from weather
change, diseases, forest fires and other nature forces. The Company has extensive processes in
place aimed at monitoring and reducing these risks, including regular health inspections and
analyzes of forest diseases and pests in the industry.
10. Income and social contribution taxes
a) Deferred assets and liabilities
Deferred tax assets and liabilities are recorded to reflect future tax effects related to temporary
differences between the tax bases and their respective carrying amount.
Deferred assets and liabilities are originated from:
Agropecuária Maggi Ltda.
Financial statements as of
December 31, 2014
26
Consolidated Company
2014 2013 2014 2013
Goodwill 8,800 11,000 - -
Exchange rate variation (11,945) (27,826) (10,913) (23,777)
Deemed cost (129,491) (131,202) (113,959) (115,050)
Accelerated depreciation (28,362) (26,613) (26,388) (26,613)
Negative goodwill on investment (219) (181) (219) (181)
Fair value of inventories - 7,270 - 7,270
Employees’ profit sharing 976 - 918 -
Tax losses carry forward 6,933 4,944 5,226 -
Provision for civil, labor and tax risks 523 563 505 547
Allowance for doubtful accounts 205 252 140 176
Impairment of inventories 1,599 38 1,183 38
Impairment of investments - 934 - 934
Fair value of biological assets (11,844) (35,588) (8,583) (35,588)
Fair value of derivative financial
instruments 12,244 9,489 12,244 9,489
(150,581) (186,920) (139,846) (182,755)
b) Current income Tax and Social Contribution
The income tax and social contribution amounts recorded on profit or loss is calculated
according to the terms of Brazilian regulation and do not consider, on the calculation, the
translation amounts due to financial statements conversion to functional currency.
11. Advances to suppliers
Consolidated Company
2014 2013 2014 2013
Foreign market 25 12 25 12
Domestic market 36,625 38,595 34,918 38,577
Domestic market - related parties (note 21) 2,299 57 1,558 57
38,949 38,664 36,501 38,646
Current assets 15,227 11,574 12,779 11,556
Non-current assets 23,722 27,090 23,722 27,090
Advances with prices to be fixed and fixed prices are secured by commercial pledge represented
by ballot farmer and guarantees provided by third parties.
Agropecuária Maggi Ltda.
Financial statements as of
December 31, 2014
27
12. Recoverable taxes
Consolidated Company
2014 2013 2014 2013
COFINS - Contribution for social security funding 9,770 3,310 9,385 3,310
CSLL - Social contribution taxes recoverable 1,548 648 1,539 639
ICMS - Value-added tax on sales and services (on
fixed assets recoverable) 5,243 3,773 5,176 3,773
IRPJ - Income tax 4,031 1,919 4,001 1,884
PIS – Social integration program 1,611 485 1,527 485
Other taxes 820 956 591 949
23,023 11,091 22,219 11,040
Current assets 20,863 9,386 20,097 9,335
Non-current assets 2,160 1,705 2,122 1,705
13. Loans granted
Consolidated
Currency
Weighted
average rate
on 12/31/2014 Maturity
2014 2013
Amaggi Construções de Rodovias Ltda. USD 2% p.y. Undetermined 10 10
Amaggi Insumos Agrícolas e
Comércio Ltda. BRL 110% CDI Undetermined 3,803 806
3,813 816
Company
Currency
Weighted
average rate
on 12/31/2014 Maturity
2014 2013
Agro Sam Agricultura e Pecuária Ltda. USD 4% p.y. Undetermined - 6,542
Amaggi Construções de Rodovias Ltda. USD 2% p.y. Undetermined 10 10
Amaggi Insumos Agrícolas e
Comércio Ltda. BRL 110% CDI Undetermined 3,803 806
3,813 7,358
14. Investments
a. Investments value
Consolidated Company
2014 2013 2014 2013
Agro Sam Agricultura e Pecuária Ltda. - - 104,628 40,300
Amaggi Argentina S.A. 1,542 1,511 1,542 1,511
Amaggi Construção de Rodovias Ltda. 30 17 30 17
Unisoja S.A. 1,013 997 1,013 997
Other 3 3 3 3
2,588 2,528 107,216 42,828
Agropecuária Maggi Ltda.
Financial statements as of
December 31, 2014
28
b. Changes on investments
Consolidated
Balances
on
12/31/2013
Equity
method
Cumulative
translation
adjustments AFCI
Disposal/
Transfer
Goodwill in
Agro Sam
incorporation Addition
Balances
on
12/31/2014
Amaggi Argentina S.A. 1,511 31 - - - - - 1,542
Amaggi Construção de Rodovias Ltda. 17 13 - - - - - 30
Unisoja S.A. 997 - - - - - 16 1,013
Other 3 - - - - - - 3
Total 2,528 44 - - - - 16 2,588
Balances
on
12/31/2012
Equity
method
Cumulative
translation
adjustments AFCI
Disposal/
Transfer
Goodwill in
Agro Sam
incorporation Addition
Balances
on
12/31/2013
Amaggi Argentina S.A. 895 612 - - - - 4 1,511
Amaggi Construção de Rodovias Ltda. 374 (357) - - - - - 17
Unisoja S.A. 781 - - - - - 216 997
Other 3 - - - - - - 3
Total 2,053 255 - - - - 220 2,528
Company
Balances
on
12/31/2013
Equity
method
Cumulative
translation
adjustments AFCI
Disposal/
Transfer
Goodwill in
Agro Sam
incorporation Addition
Balances
on
12/31/2014
Agro Sam Agricultura e Pecuária Ltda. 40,300 8,774 - 12,417 - - 43,137 104,628
Amaggi Argentina S.A. 1,511 31 - - - - - 1,542 Amaggi Construção de Rodovias Ltda. 17 13 - - - - - 30
Unisoja S.A. 997 - - - - - 16 1,013
Other 3 - - - - - - 3
Total 42,828 8,818 - 12,417 - - 43,153 107,216
Balances
on
12/31/2012
Equity
method
Cumulative
translation
adjustments AFCI
Disposal/
Transfer
Goodwill in
Agro Sam
incorporation Addition
Balances
on
12/31/2013
Agro Sam Agricultura e Pecuária Ltda. - 14,096 - 40,657 (14,453) - - 40,300
Agropecuária Morrinhos Ltda. 31,616 4,640 - (24,715) 9,812 (21,353) - - Amaggi Argentina S.A. 895 616 - - - - - 1,511
Amaggi Construção de Rodovias Ltda. 374 (364) 7 - - - - 17
Unisoja S.A. 781 - - - - - 216 997
Other 3 - - - - - - 3
Total 33,669 18,988 7 15,942 (4,641) (21,353) 216 42,828
c. Information concerning the direct subsidiaries
2014
Share % Total assets Total liabilities Total equity Net income for the year
Agro Sam Agricultura e Pecuária Ltda. 100.00000% 152,221 47,480 95,855 8,886
Amaggi Argentina S.A. 11.00086% 36,198 22,174 13,740 284 Amaggi Construções de Rodovias Ltda. 36.00000% - 11 45 (56)
9,114
2013
Share % Total assets Total liabilities Total equity Net income for the year
Agro Sam Agricultura e Pecuária Ltda. 100.00000% 79,986 39,686 21,568 18,732
18,732
Agropecuária Maggi Ltda.
Financial statements as of
December 31, 2014
29
15. Property, plant and equipment
Consolidated
Cost
Balances on
January 1,
2014 Additions Disposals Transfers
Balances on
December 31,
2014
Balances on
December 31,
2013
Lands 535,250 511 - - 535,761 535,250 Buildings 38,805 23 (246) 1,942 40,524 38,805 Machine and equipments 139,264 59,075 (30,416) 203 168,126 139,264 Facilities 2,912 43 (31) 153 3,077 2,912 Furniture and fixtures 2,307 716 (303) 6 2,726 2,307 Vehicles 7,604 3,673 (1,592) 85 9,770 7,604 Hardware 730 268 (143) 16 871 730 Vessels 1 - - - 1 1 Aircraft 10,972 (74) - - 10,898 10,972 Radio-communication 798 196 (112) 36 918 798 Improvements in properties of
third
819 1,868 - - 2,687 819 Work in progress 10,058 25,764 - (2,342) 33,480 10,058 Equipment for mounting 190 938 - (99) 1,029 190 Advances to suppliers 5,556 15,803 (21,003) - 356 5,556
Other - 29 - - 29 -
755,266 108,833 (53,846) - 810,253 755,266
Depreciation
Balances on
January 1,
2014 Additions Disposals Transfers
Balances on
December 31,
2014
Balances on
December 31,
2013
Buildings (5,835) (1,184) 175 - (6,844) (5,835)
Machines and equipments (31,353) (10,288) 6,054 - (35,587) (31,353)
Facilities (905) (130) 3 - (1,032) (905)
Furniture and fixtures (737) (189) 93 - (833) (737)
Vehicles (3,743) (1,237) 527 - (4,453) (3,743)
Hardware (494) (139) 110 - (523) (494)
Aircraft (1,317) (455) - - (1,772) (1,317)
Radio-communication (343) (85) 46 - (382) (343)
Improvements in properties of third
(72) (75) - - (147) (72)
(44,799) (13,782) 7,008 - (51,573) (44,799)
Carrying amount 710,467 758,680 710,467
Agropecuária Maggi Ltda.
Financial statements as of
December 31, 2014
30
Company
Cost
January 1,
2014 Additions Disposals Transfers
December 31,
2014
December 31,
2013
Lands 463,126 511 - - 463,637 463,126
Buildings 32,413 - (246) 1,942 34,109 32,413
Machine and equipments
134,814 47,670 (28,696) 203 153,991 134,814
Facilities 2,839 17 (31) 153 2,978 2,839
Furniture and fixtures 2,223 413 (269) 6 2,373 2,223
Vehicles 7,555 2,661 (1,464) 85 8,837 7,555
Hardware 658 218 (87) 16 805 658
Vessels 1 - - - 1 1
Aircraft 10,972 (74) - - 10,898 10,972
Radio-communication 774 140 (103) 36 847 774
Improvements in properties of
third 819 1,869 - - 2,688 819
Work in progress 10,058 23,784 - (2,342) 31,500 10,058
Equipment for mounting 189 937 - (99) 1,027 189
Advances to suppliers 5,557 14,628 (19,827) - 358 5,557
Other - 29 - - 29 -
671,998 92,803 (50,723) - 714,078 671,998
Depreciation
January 1,
2014 Additions Disposals Transfers
December 31,
2014
December 31,
2013
Buildings (4,758) (980) 175 - (5,563) (4,758)
Machine and equipments (29,042) (8,662) 5,817 - (31,887) (29,042)
Facilities (882) (124) 3 - (1,003) (882)
Furniture and fixtures (684) (165) 70 - (779) (684)
Vehicles (3,694) (995) 463 - (4,226) (3,694)
Hardware (433) (113) 58 - (488) (433)
Aircraft (1,317) (455) - - (1,772) (1,317)
Radio-communication (330) (74) 43 - (361) (330)
Improvements in properties of
third
(72) (74) - - (146) (72)
(41,212) (11,642) 6,629 - (46,225) (41,212)
Carrying amount 630,786 667,853 630,786
16. Accounts payable to suppliers
Consolidated Company
2014 2013 2014 2013
Foreign market - related parties (note 21) 970 743 135 743
Domestic market 47,927 58,363 43,676 58,362
Domestic market - related parties (a) (note
21) 17,327 39,152 5,491 11,688
66,224 98,258 49,302 70,793
Current liabilities 62,308 64,857 45,386 51,342
Non-current liabilities 3,916 33,401 3,916 19,451
Agropecuária Maggi Ltda.
Financial statements as of
December 31, 2014
31
17. Loans and financing
Below is the composition of the consolidated and company loans:
Consolidated
Modality or resource source
Currency
Weighted
average rate
on 12/31/2014
Maturity
Carrying amount
2014 2013
ACC - Advances on exchange contracts USD 0.99% p.y. 2014 - 8,036
CCB - Certificate of bank credit USD 3.26% p.y. + Libor 2017 854 1,139
Agricultural loans BRL 6.50% p.y. 2015 7,667 8,764
Working capital BRL 10.00% p.y. 2015 27,788 -
FCO - Constitutional Funds BRL 8.50% p.y. 2019-2021 15,431 17,573
FEPM – Stocking loan BRL 6.50% p.y. 2015 4,028 -
FINAME BRL 4.14% p.y. 2015-2024 47,786 18,001
Related party loans (note 21) USD 4.50% p.y. Undetermined 3,770 9,843
NCE - Export notes USD 4.30% p.y. 2015 - 35,172
NCE - Export notes BRL 1.67% p.y. + 100% CDI 2015-2017 156,804 218,015
NCE - Export notes BRL 115.87% CDI 2015 5,025 11,240
PPE – Prepayment USD 3.36% p.y. + Libor 2015-2018 343,671 80,442
612,824 408,225
Current liabilities 135,374 178,095
Non-current liabilities 477,450 230,130
Company
Modality or resource source
Currency
Weighted
average rate
on 12/31/2014
Maturity
Carrying amount
2014 2013
ACC - Advances on exchange contracts USD 0.99% p.y. 2014 - 8,036
CCB - Certificate of bank credit USD 3.26% p.y. + Libor 2017 854 1,139
Agricultural loans BRL 6.50% p.y. 2015 7,667 8,764
Working capital BRL 10.00% p.y. 2015 27,788 -
FCO - Constitutional Funds BRL 8.50% p.y. 2019-2021 15,431 17,573
FEPM – Stocking loan BRL 6.50% p.y. 2015 4,028 -
FINAME BRL 4.14% p.y. 2015-2024 47,001 18,001
Related party loans (note 21) USD 4.50% p.y. Undetermined 3,770 9,843
NCE - Export notes USD 4.30% p.y. 2015 - 35,172
NCE - Export notes BRL 1.67% p.y. + 100% CDI 2015-2017 156,804 218,015
NCE - Export notes BRL 115.87% CDI 2015 5,025 11,240
PPE – Prepayment USD 3.36% p.y. + Libor 2015-2018 343,671 80,442
612,039 408,225
Current liabilities 135,261 178,095
Non-current liabilities 476,778 230,130
On December 31, 2014, financing are guaranteed by: promissory notes guaranteed by quota
holders, chattel mortgage of rural properties and commercial pledge.
The maturity of maturities for loans and financing and other risks related to theses financial
liabilities are presented in Note 18.
Agropecuária Maggi Ltda.
Financial statements as of
December 31, 2014
32
18. Financial instruments
The Company and its subsidiary have exposure to the following risks arising from financial
instruments:
Credit risk;
Liquidity risk; and
Market risk.
This note presents information about the Company’s exposure to each of the above risks, the
Company’s objectives, polices and processes for measuring risks, risk management and capital
management.
18.1 Risk management framework
The Chief Executive Officer - CEO has overall responsibility for the establishment and
oversight Company’s risk management structure and is assisted on this function by the
Department of Risk Management, which is responsible for monitor and analyze with the
objective of identify risks the Company is exposed, as well as to map possible impacts due to
economic and financial variables, like exchange and interest fluctuations and other.
These analyzes are also used as a management tool to set commercial and hedge strategies,
reducing exposures.
Policies of risk management were established to identify and analyze exposure risks and define
acceptable risk limits. It was also created an appropriate structure of controls to monitor risks
and the utilization of limits set. Policies and limits are revised in a regular base.
18.2 Credit risk
Credit risk is the risk of financial losses to the Company or its subsidiary due to a customer or
counterparty in a financial instrument and arises from a fail of them to meet their contractual
obligations.
18.2.1 Exposure to credit risk
The carrying amount of financial assets represents the maximum credit exposure. The maximum
exposure to credit risk at the reporting date was the follows:
Consolidated Company
Note 2014 2013 2014 2013
Marketable securities (a) 6 51,351 2,994 51,351 2,994
Trade accounts receivable (b) 7 48,696 45,856 47,192 47,257
Bank deposits (c) 6 37,784 19,470 36,934 19,456
Loans granted 13 3,813 816 3,813 7,358
Derivative financial instruments 534 4,948 534 4,948
Securities brokerage operations 9,414 2,894 9,414 2,894
Other credits 17,392 11,741 17,265 11,586
168,984 88,719 166,503 96,493
Agropecuária Maggi Ltda.
Financial statements as of
December 31, 2014
33
(a) Marketable securities
Amounts maintained in first line financial institutions to minimize credit risk of these
operations.
(b)Trade accounts receivables
Management seeks to mitigate credit of trade accounts receivable through monitoring and
periodic individual evaluation of its customers.
Criteria for accepting new customers include an analysis of potential customer’s financial
condition and socio-economic profile, defining credit limits and payment terms. The analysis of
this information by the Company may include external ratings, where available, and bank
references.
Credit limits are established to each customer, in an individual basis, and represent the
maximum amount of exposure accepted to each customer. Credit limits are reviewed when
considered necessary or when it is required. Transactions with customers with no approved
credit limits are only The Company's exposure to credit risk is influenced mainly by the
individual characteristics only performed through advances.
The segment where the Company operates rarely presents losses by default, however, when
necessary, it is recorded a provision for doubtful accounts, analyzing each customer
individually.
(c) Bank deposits
Amounts maintained in first line financial institutions to minimize credit risk of these
operations.
18.3 Liquidity risk
Liquidity risk is the risk of difficulties to meet the obligations associated with its financial
liabilities that are settled by delivering cash or other financial assets. Company’s or its
subsidiary approach to manage liquidity is to ensure, as far as possible, that it will always have
sufficient liquidity to meet its liabilities when it is due, under both normal and stressed
conditions, without incurring unacceptable losses or risking damage to reputation.
Below, the contractual maturities of financial liabilities are presented, including estimated
interest payments:
Agropecuária Maggi Ltda.
Financial statements as of
December 31, 2014
34
Consolidated
December 31, 2014 Note
Total
amount
Contractual
Cash flow
Until 1
year
1 - 2
years
2 - 4
years
More than
4 years
Non-derivative financial liabilities
Accounts payable to suppliers 16 66,224 66,224 62,308 3,916 - -
Loans and financing 17 612,824 851,629 135,374 318,875 223,679 173,701
Other accounts payable 227 227 227 - - -
679,275 918,080 197,909 322,791 223,679 173,701
Derivative financial liabilities
Derivative financial liabilities 36,545 36,545 36,545 - - -
36,545 36,545 36,545 - - -
715,820 954,625 234,454 322,791 223,679 173,701
December 31, 2013 Note Total
amount
Contractual
Cash flow Until 1 year 1 - 2
years
2 - 4
years
More than
4 years
Non-derivative financial liabilities
Accounts payable to suppliers 16 98,258 98,258 64,857 33,401 - -
Loans and financing 17 408,225 653,682 178,095 315,792 134,365 25,430
Other accounts payable 797 797 797 - - -
507,280 752,737 243,749 349,193 134,365 25,430
Derivative financial liabilities
Derivative financial liabilities 35,401 35,401 35,401 - - -
35,401 35,401 35,401 - - -
542,681 788,138 279,150 349,193 134,365 25,430
Company
December 31, 2014 Note
Total
amount
Contractual
Cash flow
Until 1
year
1 - 2
years
2 - 4
years
More than
4 years
Non-derivative financial liabilities
Accounts payable to suppliers 16 49,302 49,302 45,386 3,916 - -
Loans and financing 17 612,039 850,573 135,261 318,592 223,395 173,325
Other accounts payable 308 308 308 - - -
661,649 900,183 180,955 322,508 223,395 173,325
Derivative financial liabilities
Derivative financial liabilities 36,545 36,545 36,545 - - -
36,545 36,545 36,545 - - -
698,194 936,728 217,500 322,508 223,395 173,325
December 31, 2013 Note Total
amount
Contractual
Cash flow Until 1 year 1 - 2
years
2 - 4
years
More than
4 years
Non-derivative financial liabilities
Accounts payable to suppliers 16 70,793 70,793 51,342 19,451 - -
Loans and financing 17 408,225 653,682 178,095 315,792 134,365 25,430
Other accounts payable 762 762 762 - - -
479,780 725,237 230,199 335,243 134,365 25,430
Derivative financial liabilities
Derivative financial liabilities 35,401 35,401 35,401 - - -
35,401 35,401 35,401 - - -
515,181 760,638 265,600 335,243 134,365 25,430
Agropecuária Maggi Ltda.
Financial statements as of
December 31, 2014
35
Amounts stated above represent cash flows related to derivative and non-derivative financial
instruments recorded as liabilities maintained to risk management and normally, not liquidated
before their contractual maturity.
18.4 Market risk
Market risk is the risk that changes on market prices, such as foreign exchange rates, interest
rates and commodity prices will affect the Company’s income or the value of its investments in
financial instruments.
The objective of market risk management is to manage and control market risk exposures,
within acceptable parameters, while optimizing returns.
The Company also operates with derivative financial instruments and complies with financial
obligations to manage market risks. All these operations are conducted within the Department of
Risk Management requirements.
18.4.1 Exchange rate risk
The Exchange rate risk is related to market risk and is related to the possibility of oscillations of
exchange rates that may cause losses to the Company or its subsidiary, reducing its assets or
increasing its obligations.
As the Company and its subsidiary are located in Brazil, the main Company’s exposure to
exchange rate risk refers to the fluctuation of Dollar (USD), its functional currency, in relation
to Real (BRL), the Brazilian currency.
The entity gets into some non-deliverable (NDF) and option contracts with financial institutions
to hedge itself from this exposure.
Follows, below, the composition of these financial instruments:
Consolidated and Company
a) Non-deliverable of currency
2014
2013
Position
Kind of
asset
Notional
(USD)
Maturity
Fair
value
Effect on
profit/loss
Notional
(USD)
Maturity
Fair
value
Effect on
profit/loss
Long USD - - - - 3,780 2014 95 95
Long USD 4,876 2015 (2) (2) - - - -
Short USD - - - - 57,646 2014 (2,842) (2,842)
Short USD 21,678 2015 (1,625) (1,625) - - - -
(1,627) (1,627)
(2,747)
(2,747)
Agropecuária Maggi Ltda.
Financial statements as of
December 31, 2014
36
b) SWAP of currency
2014
2013
Position
Kind of
asset
Notional
(USD)
Maturity
Fair
value
Effect on
profit/loss
Notional
(USD)
Maturity
Fair
value
Effect on
profit/loss
Active
CDI +
Pre fixed
rate
5,000 2015
4,991 4,991
- -
- -
Passive % CDI 5,000 2015 (5,098) (5,098) - - - -
(107) (107)
-
-
Exchange rate sensitivity analysis
Company presents three scenarios to sensitivity analysis, one probable and two others that
presents the deterioration of fair value. Follows the scenarios:
Scenarios
Risk Remote Possible Probable
Possible Remote
(-50%) (-25%) (+ 25%) (+50%)
Non-deliverable of currency Variation of Dollar (814) (1,220) (1,627) (2,034) (2,441)
SWAP of currency Variation of Dollar (54) (80) (107) (134) (161)
(868) (1,300) (1,734) (2,168) (2,602)
18.4.2 Interest rate risk
The Company and its subsidiary seeks to maintain its exposure to interest rates at acceptable
levels. Exposure to this risk is substantially related to loans and financing and financial
investments.
On the date of these financial statements, the profile of financial investments remunerated
through interests was, without any interference of hedge instruments, as follows:
Consolidated Company
Note 2014 2013 2014 2013
Variable rate financial instruments
Marketable securities 6 51,351 2,994 51,351 2,994
Loans granted 13 3,803 816 3,803 7,358
Loans and financing 17 (506,354) - (534,142) -
(451,200) 3,810 (478,988) 10,352
Fixed rate financial instruments
Loans granted 13 10 - 10 -
Loans and financing 17 (106,470) (408,225) (77,897) (408,225)
(106,460) (408,225) (77,887) (408,225)
(557,660) (404,415) (556,875) (397,873)
The Company and its subsidiary does not account for any financial assets or liabilities indexed
to fixed rates at fair value through profit or loss and does not designate derivatives (swap of
interest rates) as fair value hedges. This results that any variation on interest rates at the date of
financial statements would not change profit or loss.
Agropecuária Maggi Ltda.
Financial statements as of
December 31, 2014
37
Hedge instruments contracted to mitigate this risk that prevails on the date of these financial
statements are presented below:
Consolidated and Company
a) SWAP of interest rates
2014
2013
Position
Kind of
asset
Notional
(USD)
Maturity
Fair
value
Effect on
profit/loss
Notional
(USD)
Maturity
Fair
value
Effect on
profit/loss
Active
% CDI
- - - -
61,910 2014
4,369
4,369
Active
% CDI
6,497 2015 288 288
12,993 2015
811
811
Active
CDI + Pre
fixed rate -
-
- -
23,877 2014
1,999
1,999
Active
CDI + Pre
fixed rate 3,300
2015
230 230
22,643 2015
3,199
3,199
Active
CDI + Pre
fixed rate 31,533
2016
2,709 2,709
14,981 2016
3,815
3,815
Active
CDI + Pre
fixed rate 139,795
2017
15,130 15,130
114,795 2017
17,320
17,320
Active
Pre fixed
rate -
-
- -
9,362 2014
427
427
Active
Dollar + Pre
fixed rate 22,959
2017
4,863 4,863
22,959 2017
2,824
2,824
Passive
Dollar + Pre
fixed rate -
-
- -
95,149 2014
(26,306)
(26,306)
Passive
Dollar + Pre
fixed rate 16,427
2015
(3,305) (3,305)
35,636 2015
(8,475)
(8,475)
Passive
Dollar + Pre
fixed rate 30,078
2016
(10,771) (10,771)
14,981
2016
(5,559)
(5,559)
Passive
Dollar + Pre
fixed rate 47,959 2017 (15,195) (15,195)
22,959
2017
(8,175)
(8,175)
Passive
Dollar +
Libor + Pre
fixed rate
114,796 2017 (26,119) (26,119)
114,795
2017
(15,392)
(15,392)
(32,170) (32,170)
(29,143) (29,143)
Interest rate sensitivity analysis
Company presents three scenarios to sensitivity analysis, one probable and two others that
presents the deterioration of fair value. Follows the scenarios:
Scenarios
Risk Remote Possible Probable
Possible Remote
(-50%) (-25%) (+ 25%) (+50%)
SWAP of interest rates Variation of interest rates (16,085) (24,128) (32,170) (40,213) (48,255)
(16,085) (24,128) (32,170) (40,213) (48,255)
18.4.3 Commodities price risk
Company and its subsidiary commercializes soybean, corn, cotton, products considered as
commodities.
As commodities are traded, in Brazil (BM&FBOVESPA) and abroad (CBOT) it is able to adopt
some hedge tools. Between the most common practices adopted, we can see the use of future
contracts and options as the main hedge tools to mitigate the risk of price variations.
Buy and sell operation of grains and other products are done simultaneously, using hedge tools
to protect prices when clients are not immediately available in the moment of grains acquisition.
Agropecuária Maggi Ltda.
Financial statements as of
December 31, 2014
38
The Company may incur in physical position open, in acquisitions and sells, on the following
situations:
Purchase long position: if the quantity of products acquired or contracted exceeds the
quantity of products sold or contracted so, the difference is protected through hedge tools;
and
Sell short position: if the quantity of products acquired or contracted is lower than the
quantity of products sold or contracted so, the difference is protected through hedge tools
Hedge instruments contracted to mitigate this risk that prevails on the date of these financial
statements are presented below:
Consolidated and Company
a) Future of commodities
2014
2013
Position
Kind of
asset
Notional
(Ton)
Maturity
Fair
value
Effect on
profit/loss
Notional
(Ton)
Fair
value
Effect on
profit/loss Maturity
Long
Corn
-
-
-
-
113,923
2014
(1,807) (1,807)
Short
Corn
- - - -
154,946
2014
4,099 4,099
Short Corn 43,436 2015 (960) (960) - - - -
Short Corn 80,013 2015 (855) (855) - - - -
Short
Soybean
- - - -
126,818
2014
(306) (306)
Short Soybean 179,350 2015 (48) (48) - - - -
(1,863) (1,863)
1,986 1,986
Consolidated and Company
b) Term of commodities
2014
2013
Position
Kind of
asset
Notional
(Ton)
Maturity
Fair
value
Effect on
profit/loss
Notional
(Ton)
Maturity
Fair
value
Effect on
profit/loss
Short
Cotton
-
-
-
-
12,590
2013
(15) (15)
Short Corn - - - - 91,789 2013 (1,085) (1,085)
Short Corn - - - - 55,000 2014 551 551
Short Corn 40,000 2015 (244) (244) - - - -
(244) (244)
(549) (549)
Commodity price risk sensitivity analysis
It is presented three scenarios to sensitivity analysis, one probable and two others that presents
the deterioration of fair value. Follows the scenarios:
Agropecuária Maggi Ltda.
Financial statements as of
December 31, 2014
39
Consolidated and Company
Scenarios
Risk Remote Possible
Probable
Possible Remote
(-50%) (-25%) (-25%) (-50%)
Future of commodities
Short position Price increase (932) (1,397) (1,863) (2,329) (2,795)
(932) (1,397) (1,863) (2,329) (2,795)
Term of commodities
Short position Price increase (122) (183) (244) (305) (366)
(122) (183) (244) (305) (366)
(1,054) (1,580) (2,107) (2,634) (3,161)
18.5 Reconciliation of net effects of fair value of derivatives with balance sheet
The fair value of derivative financial instruments is recorded as an asset or a liability on
financial statements.
Follows, below, the reconciliation of net effects of fair value recorded on the balance sheet:
a) Amounts on the balance sheet:
Consolidated Company
2014 2013 2014 2013
Derivative financial instruments (assets) 534 4,948 534 4,948
Derivative financial instruments (liabilities) (36,545) (35,401) (36,545) (35,401)
(36,011) (30,453) (36,011) (30,453)
b) Amounts by kind of operation:
Consolidated Company
2014 2013 2014 2013
NDF of currency (1,627) (2,747) (1,627) (2,747)
SWAP of currency (107) - (107) -
SWAP of interest rates (32,170) (29,143) (32,170) (29,143)
Future of commodities (1,863) 1,986 (1,863) 1,986
Term of commodities (244) (549) (244) (549)
(36,011) (30,453) (36,011) (30,453)
18.6 Capital management
The Board’s policy is to maintain a strong capital base to maintain investors, creditors and
market confidence and to sustain future development of the business. The Board of Directors
monitors capital returns that Company and its subsidiary defines as result of operational
activities divided by total equity. The Board of Directors also monitors the level of profit
distribution to shareholders.
Agropecuária Maggi Ltda.
Financial statements as of
December 31, 2014
40
The Board of Directors tries to maintain a good relation between high returns and adequate level
of loans, advantages and security, provided by a healthy position of capital.
The Company’s and its subsidiary net debt to adjusted equity ratio was as follows:
Consolidated Company
Note 2014 2013 2014 2013
Current and non-current liabilities 891,387 799,821 852,638 768,077
(-) Cash and cash equivalents 6 (89,138) (22,466) (88,288) (22,452)
(=) Net debt 802,249 777,355 764,350 745,625
(/) Shareholders' equity 22 421,618 391,598 421,618 391,598
(=) Net debt by shareholders' equity 1.90 1.99 1.81 1.90
18.7 Accounting classifications and fair value
Fair value versus carrying amounts
The fair value of financial assets and liabilities, together with the carrying amounts presented in
financial statements, are as follows:
Consolidated
December 31, 2014 Note
Fair value
through
profit or loss
Loans and
receivables
Liabilities at
amortized cost
Carrying
amount Fair value
Non derivative financial instruments
Marketable securities 6 51,351 - - 51,351 51,351
Cash 6 - 3 - 3 3
Bank deposits 6 - 37,784 - 37,784 37,784
Trade accounts receivable 7 - 48,696 - 48,696 48,696
Securities brokerage operations - 9,414 - 9,414 9,414
Loans granted 13 - 3,813 - 3,813 3,813
Other credits - 17,392 - 17,392 17,392
Accounts payable to suppliers 16 - - (66,224) (66,224) (66,224)
Loans and financing 17 - - (612,824) (612,824) (492,930)
Other accounts payable - - (227) (227) (227)
51,351 117,102 (679,275) (510,822) (390,928)
Derivative financial instruments
Assets 534 - - 534 534
Liabilities (36,545) - - (36,545) (36,545)
(36,011) - - (36,011) (36,011)
15,340 117,102 (679,275) (546,833) (426,939)
Agropecuária Maggi Ltda.
Financial statements as of
December 31, 2014
41
December 31, 2013 Note
Fair value
through
profit or loss
Loans and
receivables
Liabilities at
amortized cost
Carrying
amount Fair value
Non derivative financial instruments
Marketable securities 6 2,994 - - 2,994 2,994
Cash 6 - 2 - 2 2
Bank deposits 6 - 19,470 - 19,470 19,470
Trade accounts receivable 7 - 45,856 - 45,856 45,856
Securities brokerage operations - 2,894 - 2,894 2,894
Loans granted 13 - 816 - 816 816
Other credits - 11,741 - 11,741 11,741
Accounts payable to suppliers 16 - - (98,258) (98,258) (98,258)
Loans and financing 17 - - (408,225) (408,225) (431,909)
Other accounts payable - - (797) (797) (797)
2,994 80,779 (507,280) (423,507) (447,191)
Derivative financial instruments
Assets 4,948 - - 4,948 4,948
Liabilities (35,401) - - (35,401) (35,401)
(30,453) - - (30,453) (30,453)
(27,459) 80,779 (507,280) (453,960) (477,644)
Company
December 31, 2014 Note
Fair value
through
profit or loss
Loans and
receivables
Liabilities at
amortized cost
Carrying
amount Fair value
Non derivative financial instruments
Marketable securities 6 51,351 - - 51,351 51,351
Cash 6 - 3 - 3 3
Bank deposits 6 - 36,934 - 36,934 36,934
Trade accounts receivable 7 - 47,192 - 47,192 47,192
Securities brokerage operations - 9,414 - 9,414 9,414
Loans granted 13 - 3,813 - 3,813 3,813
Other credits - 17,265 - 17,265 17,265
Accounts payable to suppliers 16 - - (49,302) (49,302) (49,302)
Loans and financing 17 - - (612,039) (612,039) (492,145)
Other accounts payable - - (308) (308) (308)
51,351 114,621 (661,649) (495,677) (375,783)
Derivative financial instruments
Assets 534 - - 534 534
Liabilities (36,545) - - (36,545) (36,545)
(36,011) - - (36,011) (36,011)
15,340 114,621 (661,649) (531,688) (411,794)
Agropecuária Maggi Ltda.
Financial statements as of
December 31, 2014
42
December 31, 2013
Fair value
through
profit or loss
Loans and
receivables
Liabilities at
amortized cost
Carrying
amount Fair value
Non derivative financial instruments
Marketable securities 2,994 - - 2,994 2,994
Cash - 2 - 2 2
Bank deposits - 19,456 - 19,456 19,456
Trade accounts receivable - 47,257 - 47,257 47,257
Securities brokerage operations - 2,894 - 2,894 2,894
Loans granted 13 - 7,358 - 7,358 7,358
Other credits - 11,586 - 11,586 11,586
Accounts payable to suppliers 16 - - (70,793) (70,793) (70,793)
Loans and financing 17 - - (408,225) (408,225) (431,909)
Other accounts payable - - (762) (762) (762)
2,994 88,553 (479,780) (388,233) (411,917)
Derivative financial instruments
Assets 4,948 - - 4,948 4,948
Liabilities (35,401) - - (35,401) (35,401)
(30,453) - - (30,453) (30,453)
(27,459) 88,553 (479,780) (418,686) (442,370)
18.8 Fair value hierarchy
The table below presents financial instruments recorded at fair value, based on the evaluation
method.
Level 1: quoted prices available in active markets for identical assets or liabilities on the
date of the Financial Statements. Active markets are those where transactions to the assets
or liabilities occurs in a sufficient frequency and in volumes that allows anyone to gather
information about the price in any moment. Level 1 is normally composed by derivatives,
shared and other assets traded on stock exchanges.
Level 2: other prices observable in different markets of Level 1, but that is directly or
indirectly observable on the date of Financial Statements. Level 2 includes derivative
financial instruments evaluated through an evaluation model or other evaluation
methodology. These models are standardized by the market and are largely used by other
players that consider many assumptions as future commodity prices, amounts through
time, volatility factors, actual market and contractual prices to subjacent instruments, as
well as any other relevant economic measurements. Almost all of these assumptions may
be observed in the long term market of the instrument which is being priced, derived from
observable inputs or though levels that may be observed where similar transactions are
performed in the market. Instruments in this level include derivatives not traded on stock
exchanges as swaps, futures and options traded in over-the-counter market.
Level 3: price information that is less observable, but from objective sources. These
sources can be combined with internal methodologies developed by the Company that
results in the best fair value estimate of management. On the date of each Financial
Statements, the Company performs an analysis and includes on level 3 all those fair
values that are not based on non-observable information.
Agropecuária Maggi Ltda.
Financial statements as of
December 31, 2014
43
Consolidated
December 31, 2014 Note Level 1 Level 2 Level 3 Total
Assets
Marketable securities 6 - 51,351 - 51,351
Derivative financial instruments - 534 - 534
- 51,885 - 51,885
Liabilities
Derivative financial instruments - (36,545) - (36,545)
- (36,545) - (36,545)
- 15,340 - 15,340
December 31, 2013 Note Level 1 Level 2 Level 3 Total
Assets
Marketable securities 6 - 2,994 - 2,994
Derivative financial instruments - 4,948 - 4,948
- 7,942 - 7,942
Liabilities
Derivative financial instruments - (35,401) - (35,401)
- (35,401) - (35,401)
- (27,459) - (27,459)
Company
December 31, 2014 Note Level 1 Level 2 Level 3 Total
Assets
Marketable securities 6 - 51,351 - 51,351
Derivative financial instruments - 534 - 534
- 51,885 - 51,885
Liabilities
Derivative financial instruments - (36,545) - (36,545)
- (36,545) - (36,545)
- 15,340 - 15,340
December 31, 2013 Note Level 1 Level 2 Level 3 Total
Assets
Marketable securities 6 - 2,994 - 2,994
Derivative financial instruments - 4,948 - 4,948
- 7,942 - 7,942
Liabilities
Derivative financial instruments - (35,401) - (35,401)
- (35,401) - (35,401)
- (27,459) - (27,459)
Agropecuária Maggi Ltda.
Financial statements as of
December 31, 2014
44
19. Employee benefits
The Company provides several benefits to its employees and the most important ones are:
Managers and employees salaries:
Consolidated
Company
2014
2013
2014
2013
Wages and benefits 38,828 34,625 33,514 34,612
Supplementary pension plan with defined contribution:
The Company maintains a defined contribution plan to which contributions are made in
proportion to the contribution made by their employees. The Company's contributions
correspond to the percentage up to 4% of employee salary, in accordance with internal rules.
Consolidated
Company
2014
2013
2014
2013
Defined contribution plan 57 42 53 42
Profit sharing plan: 100% of employees are eligible and the Company distributes the
minimum percentage of 6% of the net results, as the collective bargaining agreement;
Health plan: 100% of employees are eligible and includes dependents;
Life insurance: 100% of employees are eligible;
Meal tickets: 100% of employees are eligible;
Education assistance: employees are eligible according to a specific internal rule.
Refectory: the Group holds refectories in some plants, specifically at manufacture plants,
pushers and tugs.
20. Provision for civil, labor and tax risks
The Company and its controlled entities are part (defendant) in judicial lawsuits and
administrative proceedings in several courts and government agencies, arising from the normal
course of operations, including tax, labor, civil and other proceedings.
Management recorded the following provisions in amounts considered sufficient to cover
probable estimated losses from the current actions based on information from its legal advisors,
review of pending legal proceedings, and previous experience with regards to amounts claimed:
Agropecuária Maggi Ltda.
Financial statements as of
December 31, 2014
45
Consolidated
Balances at: Civil Labor Tax Total
January 01, 2014 9 250 1,600 1,859
Addition - 3 9 12
Reversed (8) (135) (1) (144)
Exchange rate variation (1) 2 (188) (187)
December 31, 2014 - 120 1,420 1,540
January 01, 2013 10 287 1,835 2,132
Exchange rate variation (1) (37) (235) (273)
December 31, 2013 9 250 1,600 1,859
Company
Balances at: Civil Labor Tax Total
January 01, 2014 9 202 1,600 1,811
Reversed (8) (135) (1) (144)
Exchange rate variation (1) 8 (188) (181)
December 31, 2014 - 75 1,411 1,486
January 01, 2013 10 232 1,835 2,077
Exchange rate variation (1) (30) (235) (266)
December 31, 2013 9 202 1,600 1,811
Company and its subsidiary are counterpart in other labor, civil and tax lawsuits that according
to its consultants presents a possible, but not probable, risk of losses that cannot be reliable
measured. Company management, supported by its consultants opinion and accounting
practices, understand that no provision is necessary to these lawsuits.
21. Related parties transactions
Related party transactions
The main balances of assets and liabilities, as well as transactions that influence profit or loss
related to transactions with the Company and related parties, arising from operations between
the Company and its related parties.
Agropecuária Maggi Ltda.
Financial statements as of
December 31, 2014
46
Impact on balance sheet
Consolidated Company
Note 2014 2013 2014 2013
Trade accounts receivable
Agro Sam Agricultura e Pecuária Ltda. - - 5,251 1,400
Amaggi Exportação e Importação Ltda. 9,702 24,543 9,290 24,543
Amaggi Insumos Agrícolas e Comércio Ltda. 1,935 1,089 1,935 1,089
Amaggi International Ltd. 15,022 5,538 14,724 5,538
André Maggi Participações S.A. 423 237 423 237
Divisa Energia S.A. 1 1 1 1
Ilha Comprida Energia S.A. 2 3 2 3
Maggi Energia S.A. 1 3 1 3
Segredo Energia S.A. 2 3 2 3
7 27,088 31,417 31,629 32,817
Advances to suppliers
Amaggi Exportação e Importação Ltda. 806 57 65 57
Hermasa Navegação da Amazônia S.A. 1,493 - 1,493 -
11 2,299 57 1,558 57
Loans granted
Agro Sam Agricultura e Pecuária Ltda. - - - 6,542
Amaggi Construções de Rodovia Ltda. 10 10 10 10
Amaggi Insumos Agrícolas e Comércio Ltda. 3,803 806 3,803 806
13 3,813 816 3,813 7,358
Accounts payable to suppliers
Agro Sam Agricultura e Pecuária Ltda. - - 3,401 -
Amaggi Exportação e Importação Ltda. 2,180 8,618 2,089 -
Amaggi International Ltd. 970 743 136 8,618
Hermasa Navegação da Amazônia S.A. 3,705 3,068 - -
Ilha Comprida Energia S.A. - 1 - 3,068
Segredo Energia S.A. - 1 - 743
Shareholder’s - - - 1
SVB Participações e Empreendimentos Ltda. 11,442 27,464 - 1
16 18,297 39,895 5,626 12,431
Loans and financing
BBM Administração e Participação Ltda. - 4,733 - 4,733
HFLC Administração e Participação Ltda. 3,770 4,740 3,770 4,740
MP Administração e Participação Ltda. - 159 - 159
Shareholder’s - 211 - 211
17 3,770 9,843 3,770 9,843
Advances from customers
Amaggi Exportação e Importação Ltda. - 25,778 - 25,778
Amaggi International Ltd. 9,654 22,850 - 22,850
9,654 48,628 - 48,628
Agropecuária Maggi Ltda.
Financial statements as of
December 31, 2014
47
Impact on income statement
Consolidated Company
Note 2014 2013 2014 2013
Revenue
Agro Sam Agricultura e Pecuária Ltda. - - 3,732 -
Amaggi Exportação e Importação Ltda. 25,268 37,921 24,804 37,921
Amaggi Insumos Agrícolas e Comércio Ltda. 700 701 700 701
Amaggi International Ltd. 230,392 260,492 205,447 260,492
23 256,360 299,114 234,683 299,114
Corporate expenses
Amaggi Exportação e Importação Ltda. (6,401) (7,540) (6,401) (7,540)
André Maggi Participações S.A. 1,109 523 1,109 523
Divisa Energia S.A. 3 5 3 5
Ilha Comprida Energia S.A. 6 10 6 10
Maggi Energia S.A. 4 15 4 15
Segredo Energia S.A. 8 13 8 13
26 (5,271) (6,974) (5,271) (6,974)
Despatch
Amaggi International Ltd. - 13 - 13
27 - 13 - 13
Demurrage
Amaggi International Ltd. (81) (345) (71) (345)
27 (81) (345) (71) (345)
Financial revenues
Agro Sam Agricultura e Pecuária Ltda. - - 220 381
Amaggi Insumos Agrícolas e Comércio Ltda. 302 143 302 143
Shareholder’s 35 - 35 -
28 337 143 557 524
Financial expenses
BBM Administração e Participação Ltda. (186) (191) (186) (191)
Hermasa Navegação da Amazônia S.A. (433) (54) (392) (54)
HFLC Administração e Participação Ltda. (191) (145) (191) (145)
MP Administração e Participação Ltda. - (8) - (8)
Shareholder’s (2) (56) (2) (56)
VIP Administração e Participação Ltda. - (8) - (8)
28 (812) (462) (771) (462)
22. Equity
Capital
The subscribed capital on December 31, 2014 and December 31, 2013 is represented by USD
115,190, which corresponds to 249,074,220 quotas.
Equity valuation adjustments
The Company recognizes in this account increases or decreases in value assigned to assets and
liabilities as a result of its evaluation at fair value, while not recorded in profit or loss according
to the accrual basis.
Agropecuária Maggi Ltda.
Financial statements as of
December 31, 2014
48
Special reserve special of goodwill on merger
Amounts of goodwill written-off to equity during the process of reverse incorporation (where an
investee incorporates an investor).
Profit reserve to be destined
Management decided to propose to a “profit reserve to be destined” the amounts of accumulated
profit, to the deliberation of shareholders on the next Annual General Meeting.
23. Net revenue
a. Reconciliation of net revenue
Consolidated Company
2014 2013 2014 2013
Sale to related parties - foreign market
(note 21) 230,392 260,492 205,447 260,492
Sale to related parties - domestic market
(note 21) 25,968 38,622 26,812 38,622
Sale to third parties - foreign market 118,983 106,290 104,908 106,290
Sale to third parties - domestic market 12,064 16,308 12,040 16,308
Services rendered 365 - 365 -
Services rendered to third parties - - 2,424 -
(=) Gross revenue 387,772 421,712 351,996 421,712
(-) Sale returns (1,578) (2,196) (1,578) (2,196)
(-) Tax on sales (8,177) (9,980) (6,960) (9,980)
(=) Net revenue 378,017 409,536 343,458 409,536
b. Revenue by kind of product/service sold
Consolidated Company
2014 2013 2014 2013
Cotton 64,486 73,586 53,931 73,586
Corn 68,476 104,606 62,568 104,606
Soybean seeds 11,041 - 11,248 -
Soybean 235,106 226,323 212,501 226,323
Other 8,663 17,197 11,748 17,197
387,772 421,712 351,996 421,712
Agropecuária Maggi Ltda.
Financial statements as of
December 31, 2014
49
c. Revenue month by month
Consolidated Company
2014 2013 2014 2013
January 13,146 44,485 13,146 44,485
February 19,447 35,274 19,448 35,274
March 58,489 38,837 58,592 38,837
April 46,610 35,890 47,040 35,890
May 35,080 20,024 35,097 20,024
June 58,358 34,435 46,722 34,435
July 30,950 62,486 20,608 62,486
August 30,176 30,218 28,506 30,218
September 33,485 42,163 30,291 42,163
October 31,662 43,438 25,772 43,438
November 16,843 10,084 14,659 10,084
December 13,526 24,378 12,115 24,378
387,772 421,712 351,996 421,712
24. Reconciliation of gross profit without biological assets effects
Consolidated Company
2014 2013 2014 2013
Net revenue (nota 23) 378,017 409,536 343,458 409,536
(-) Cost of good sale (except biological assets
realization) (309,657) (344,886) (285,387) (345,586)
(=) Gross profit before biological assets fair
value impacts 68,360 64,650 58,071 63,950
Percentage of net revenue 18,08% 15,79% 16,91% 15,62%
Gross profit before biological assets fair value
impacts 68,360 64,650 58,071 63,950
(+) Changes in fair value of biological assets
(note 9) 39,516 76,756 27,251 76,756
(-) Impact of biological assets on cost (95,714) (109,542) (82,280) (109,542)
Gross profit on income statement 12,162 31,864 (958) 31,164
25. Selling expenses
Consolidated Company
2014 2013 2014 2013
Brokerage and commissions (785) (966) (746) (966)
Freight (1,970) (263) (1,147) (263)
Inputs (1,062) (168) (1,062) (168)
Royalties (260) (315) (260) (315)
Other services (564) (777) (507) (777)
Port fees (1,477) (2,578) (1,363) (2,578)
Other (21) (429) (21) (429)
(6,139) (5,496) (5,106) (5,496)
Agropecuária Maggi Ltda.
Financial statements as of
December 31, 2014
50
26. Administrative expenses
Consolidated Company
2014 2013 2014 2013
Rents and leases (242) (804) (242) (804)
Fuels and lubricants (256) (188) (256) (188)
Depreciation and amortization (33) (1,002) (33) (383)
Corporate expenses (note 21) (5,271) (6,974) (5,271) (6,974)
General expenses (443) (1,115) (443) (1,077)
Social charges (191) (199) (188) (197)
Maintenance (264) (503) (264) (502)
Taxes recovered 1,400 (259) 1,540 (259)
Salaries (2,003) (1,211) (1,657) (1,205)
Consultancy and audit services (1,588) (1,502) (1,588) (1,502)
Other services (227) (147) (227) (147)
Other (864) (1,149) (863) (1,136)
(9,982) (15,053) (9,492) (14,374)
27. Net other operating income (expenses)
Consolidated Company
2014 2013 2014 2013
Other operational revenues Non realized gain on non-deliverable forwards
(NDF) 1,419 - 1,419 -
Realized gain on non-deliverable forwards (NDF) - 1,174 - 1,174
Despatch 635 154 292 154
Despatch – related parties (note 21) - 13 - 13
Impairment provision - 27,559 - 27,559
Dividends revenue 99 - 99 -
Rural leases revenue 3,140 4,880 3,140 4,880
Public sale revenues - CONAB 8,203 - 7,433 -
Indemnity revenues 377 118 377 118
Inventory differences 8,253 - 8,253 -
Other revenues 2,141 1,603 1,826 1,603
24,267 35,501 22,839 35,501
Other operational expenses
Demurrage – related parties (note 21) (81) (345) (71) (345)
Non realized loss on non-deliverable forwards
(NDF) - (3,167) - (3,167)
Realized loss on non-deliverable forwards (NDF) (51) - (51) -
Loading and execution (377) - (377) -
Taxes on other revenues (1,032) (622) (990) (564)
Loss on the disposal of property, plant and
equipment (2,278) (174) (1,790) (206)
Other expenses - (5,205) - (5,134)
(3,819) (9,513) (3,279) (9,416)
Net 20,448 25,988 19,560 26,085
Agropecuária Maggi Ltda.
Financial statements as of
December 31, 2014
51
28. Net financial income (expenses)
Consolidated Company
2014 2013 2014 2013
Financial revenues
Discounts obtained 331 17 331 17
Gains on derivatives 69,927 11,889 69,927 11,889
Interest on marketable securities 2,477 - 2,477 -
Interest on investments - 346 - 346
Interest on related party transactions (note
21) 337 143 557 524
Price index variation 9,914 9,571 3,080 5,976
Other 2,232 5,233 2,232 5,216
85,218 27,199 78,604 23,968
Financial expenses
Brokerage and commissions - (43) - (43)
Discounts granted (62) (626) (62) (626)
Taxes on financial transactions (303) (385) (188) (236)
Interest on loans and financing (39,970) (28,243) (39,969) (28,243)
Interest on related party transactions (note
21) (812) (462) (771) (462)
Loss on derivatives (82,665) (27,058) (82,665) (27,058)
Price index variation (10,745) (5,561) (7,662) (3,511)
Other (104) (107) (55) (87)
(134,661) (62,485) (131,372) (60,266)
Translation gain (loss)
Translation adjustments 48,615 13,672 44,742 (3,335)
48,615 13,672 44,742 (3,335)
Net financial income and expenses (828) (21,614) (8,026) (39,633)