bakfs1q16pcaob_6k.htm - Generated by SEC Publisher for SEC Filing
 
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 

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


For the month of May, 2016

(Commission File No. 1-14862 )

 

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


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



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

Form 20-F ___X___       Form 40-F ______

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

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

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

Yes ______       No ___X___

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


 
 

 

Braskem S.A.

Quarterly Information at

March 31, 2016

and Independent Auditors’ Report Review

 

 

 

Report of Independent Registered Public Accounting Firm

 

To Board of Directors and Shareholders of Braskem S.A

 

We have reviewed the accompanying consolidated balance sheet of  Braskem S.A  and its subsidiaries as of  March 31, 2016, and the related consolidated statements of operations, comprehensive income, and changes in equity  for the three-month periods ended March 31, 2016 and 2015 and the consolidated statement of cash flows for the three-month periods ended March 31,2016 and 2015. These interim financial information are the responsibility of the Company’s management.

 

We conducted our review in accordance with the standards of Public Company Accounting Oversight Board (United States).  A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters.  It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States), the objective of which is the expression of an opinion regarding the financial statements taken as a whole.  Accordingly, we do not express such an opinion.

 

Based on our review, we are not aware of any material modifications that should be made to the accompanying consolidated interim financial information for it to be in conformity with IAS 34 — Interim Financial Reporting issued by the International Accounting Standard Board (“IASB”)

 

We previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) the consolidated balance sheet as of December 31, 2015, and related consolidated statements of operations, comprehensive income, changes in equity, and of cash flows for the year then ended (not presented herein), and in our report dated February 17,2016, we expressed an unqualified opinion on those consolidated financial statements.  In our opinion, the information set forth in the accompanying consolidated balance sheet as of December 31, 2015, is fairly stated in all material respects in relation to the balance sheet from which it has been derived.

 

 

/s/ PricewaterhouseCoopers

Auditores Independentes

Salvador, Brazil,May 5, 2016

 

 


 
 

Braskem S.A.

 

Balance sheet

at March 31, 2016

All amounts in thousands of reais

 

 

 

Assets

       

Note

 

Mar/2016

 

Dec/2015

                     

Current assets

                 
 

Cash and cash equivalents

       

3

 

7,523,641

 

7,439,723

 

Financial investments

 

     

4

 

1,397

 

1,172

 

Trade accounts receivable

       

5

 

2,308,564

 

2,735,144

 

Inventories

       

6

 

5,145,074

 

5,517,206

 

Taxes recoverable

       

8

 

1,081,509

 

1,272,004

 

Dividends and interest on capital

       

7

 

2,350

 

1,998

 

Prepaid expenses

       

 

 

157,901

 

166,170

 

Related parties

       

7

 

10,320

 

10,507

 

Derivatives operations

       

14.2

 

11,058

 

53,662

 

Other receivables

       

 

 

180,185

 

300,901

           

 

 

 

 

 

           

 

 

16,421,999

 

17,498,487

           

 

       

Non-current assets

       

 

       
 

Financial investments

 

     

4

 

37,457

 

46,193

 

Trade accounts receivable

       

5

 

11,871

 

19,822

 

Advances to suppliers

       

6

 

86,249

 

135,046

 

Taxes recoverable

       

8

 

1,273,060

 

1,304,056

 

Deferred income tax and social contribution

       

16

 

2,363,688

 

3,226,507

 

Judicial deposits

       

 

 

278,139

 

277,093

 

Related parties

       

7

 

308,321

 

144,633

 

Insurance claims

       

 

 

69,523

 

63,199

 

Derivatives operations

       

14.2

 

 

 

12,280

 

Other receivables

       

 

 

256,029

 

298,057

 

Investments in subsidiaries and jointly-controlled investments

       

9

 

73,964

 

82,290

 

Other investments

       

 

 

4,064

 

4,064

 

Property, plant and equipment

       

10

 

32,836,812

 

33,961,963

 

Intangible assets

       

11

 

2,833,739

 

2,887,604

               

 

 

 

               

40,432,916

 

42,462,807

                     

Total assets

           

56,854,915

 

59,961,294

 

 

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

 

1

 


 
 

Braskem S.A.

 

Balance sheet

at March 31, 2016

All amounts in thousands of reais

Continued

 

                                                                                                                                                                                

 

    

Liabilities and shareholders' equity

       

Note

 

Mar/2016

 

Dec/2015

                     
                     

Current liabilities

                 
 

Trade payables

       

 

 

9,046,935

 

11,698,695

 

Borrowings

       

12

 

2,261,540

 

1,968,540

 

Project finance

       

13

 

392,181

 

302,266

 

Derivatives operations

       

14.2

 

43,615

 

57,760

 

Payroll and related charges

       

 

 

675,049

 

605,059

 

Taxes payable

       

15

 

811,383

 

744,660

 

Dividends

       

 

 

753,664

 

753,668

 

Advances from customers

       

 

 

114,344

 

119,680

 

Sundry provisions

       

17

 

71,512

 

93,942

 

Other payables

       

 

 

299,649

 

337,959

           

 

 

 

 

 

           

 

 

14,469,872

 

16,682,229

           

 

       

Non-current liabilities

       

 

       
 

Trade payables

       

7

 

100,917

 

57,148

 

Borrowings

       

12

 

23,117,215

 

25,370,260

 

Project finance

       

13

 

11,040,341

 

11,975,167

 

Derivatives operations

       

14.2

 

1,141,819

 

1,184,741

 

Taxes payable

       

15

 

29,574

 

26,716

 

Non-controlling loan in Braskem Idesa

       

 

 

1,580,402

 

1,538,784

 

Deferred income tax and social contribution

       

16

 

699,716

 

731,241

 

Post-employment benefits

       

 

 

148,981

 

154,707

 

Sundry provisions

       

17

 

671,399

 

653,972

 

Other payables

       

 

 

212,617

 

248,618

           

 

 

 

 

 

           

 

 

38,742,981

 

41,941,354

           

 

       

Shareholders' equity

       

19

       
 

Capital

       

 

 

8,043,222

 

8,043,222

 

Capital reserve

       

 

 

232,430

 

232,430

 

Revenue reserves

       

 

 

2,882,019

 

2,882,019

 

Other comprehensive income

       

 

 

(7,555,217)

 

(9,085,256)

 

Treasury shares

       

 

 

(49,819)

 

(49,819)

 

Accumulated profit

       

 

 

781,784

 

 

           

 

 

 

 

 

 

Total attributable to the Company's shareholders

       

 

 

4,334,419

 

2,022,596

           

 

       
 

Non-controlling interest in Braskem Idesa

       

 

 

(692,357)

 

(684,885)

                   

 

               

3,642,062

 

1,337,711

                     

Total liabilities and shareholders' equity

           

56,854,915

 

59,961,294

 

 

 

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

 

2

 


 
 

Braskem S.A.

 

Statement of operations and statement of comprehensive income

at March 31, 2016

All amounts in thousands of reais

 

 

    

     

Note

 

Mar/2016

 

Mar/2015

 

Mar/2014

                   

Net sales revenue

 

21

 

12,171,941

 

10,195,322

 

11,842,626

 

Cost of products sold

 

 

 

(8,924,605)

 

(8,590,489)

 

(10,324,626)

                 

 

Gross profit

     

3,247,336

 

1,604,833

 

1,518,000

                 

 

Income (expenses)

             

 

 

Selling and distribution

 

 

 

(319,877)

 

(261,924)

 

(269,509)

 

General and administrative

 

 

 

(348,717)

 

(297,096)

 

(275,014)

 

Research and development

 

 

 

(42,594)

 

(39,819)

 

(34,142)

 

Results from equity investments

     

1,687

 

2,003

 

(6)

 

Other operating income (expenses), net

 

 

 

(64,605)

 

(39,893)

 

189,949

                 

 

Operating profit

     

2,473,230

 

968,104

 

1,129,278

                   

Financial results

 

22

           
 

Financial expenses

 

 

 

(1,212,290)

 

(1,192,102)

 

(577,028)

 

Financial income

 

 

 

(263,115)

 

603,323

 

16,883

                   
         

(1,475,405)

 

(588,779)

 

(560,145)

                   

Profit before income tax and social contribution

 

 

 

997,825

 

379,325

 

569,133

                 

 

 

Current and deferred income tax and social contribution

 

16

 

(250,928)

 

(175,333)

 

(172,790)

         

(250,928)

 

(175,333)

 

(172,790)

                   

Profit for the period

 

 

 

746,897

 

203,992

 

396,343

                   

Attributable to:

             

 

 

Company's shareholders

 

 

 

774,734

 

251,403

 

405,306

 

Non-controlling interest in Braskem Idesa

 

 

 

(27,837)

 

(47,411)

 

(8,963)

                   

Profit for the period

     

746,897

 

203,992

 

396,343

 

 

 

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

 

3

 


 
 

Braskem S.A.

 

Statement of operations and statement of comprehensive income

at March 31, 2016

All amounts in thousands of reais, except earnings per share

Continued

 

  

     

Note

 

Mar/2016

 

Mar/2015

 

Mar/2014

                   

Profit for the period

       

746,897

 

203,992

 

396,343

                   

Other comprehensive income or loss:

                 

Items that will be reclassified subsequently to profit or loss

                 

Fair value of cash flow hedge

   

 

 

27,918

 

(389,703)

 

4,634

Income tax and social contribution

   

 

 

(13,959)

 

122,966

 

(8,395)

Fair value of cash flow hedge from jointly-controlled - RPR

   

 

 

(10,004)

 

 

   
         

3,955

 

(266,737)

 

(3,761)

                   

Exchange variation of foreign sales hedge - Parent company

   

14.3(a.i)

 

2,220,529

 

(3,728,640)

 

537,876

Sales Hedge - transfer to profit or loss

   

14.3(a.i)

 

421,800

 

 

   

Income tax and social contribution on exchange variation - Parent company

   

 

 

(898,392)

 

1,267,738

 

(182,878)

Exchange variation of foreign sales hedge - Braskem Idesa

   

14.3(a.ii)

 

(179,723)

 

(379,332)

 

 

Income tax on exchange variation - Braskem Idesa

   

 

 

53,917

 

70,984

 

 

         

1,618,131

 

(2,769,250)

 

354,998

                   

Foreign subsidiaries currency translation adjustment

   

 

 

(64,632)

 

437,758

 

(49,669)

         

 

 

 

 

 

Total

       

1,557,454

 

(2,598,229)

 

301,568

                   

Total comprehensive loss for the period

       

2,304,351

 

(2,394,237)

 

697,911

                   

Attributable to:

                 

Company's shareholders

   

 

 

2,311,823

 

(2,272,840)

 

715,423

Non-controlling interest in Braskem Idesa

   

 

 

(7,472)

 

(121,397)

 

(17,512)

         

 

 

 

 

 

Total comprehensive loss for the period

       

2,304,351

 

(2,394,237)

 

697,911

                   
                   
         

Basic and diluted

     

Note

 

Mar/2016

 

Mar/2015

 

Mar/2014

Profit per share attributable to the shareholders of the Company

                 

at the end of the period (R$)

   

20

           

Earnings per share - common

   

 

 

0.9735

 

0.0944

 

0.4351

Earnings per share - preferred shares class "A"

   

 

 

0.9735

 

0.6061

 

0.6062

Earnings per share - preferred shares class "B"

   

 

 

0.6065

 

0.6062

 

0.6062

 

 

The Management notes are an integral part of the financial statements

 

4

 


 
 

Braskem S.A.

 

Statement of changes in shareholder's equity

at March 31, 2016

All amounts in thousands of reais

 

 

     

Attributed to shareholders' interest

       
             

Revenue reserves

             

Total

       
                     

Additional

 

Other

         

Braskem

 

Non-controlling

 

Total

         

Capital

 

Legal

 

Retention

 

dividends

 

comprehensive

 

Treasury

 

Retained

 

shareholders'

 

interest in

 

shareholders'

 

Note
 

 

Capital
 

 

reserve
 

 

reserve
 

 

of profits
 

 

proposed
 

 

income
 

 

shares
 

 

earnings
 

 

interest
 

 

Braskem Idesa

 

equity
 

At December 31, 2013

   

8,043,222

 

232,430

 

26,895

 

28,412

 

354,842

 

(1,092,691)

 

(48,892)

 

 

 

7,544,218

 

137,116

 

7,681,334

                                               

Comprehensive income for the period:

                                             

Profit for the period

       

405,306

 

405,306

 

(8,963)

 

396,343

Exchange variation of foreign sales hedge, net of taxes

     

354,998

   

354,998

 

 

 

354,998

Fair value of cash flow hedge, net of taxes

     

1,253

   

1,253

 

(5,014)

 

(3,761)

Foreign currency translation adjustment

     

(46,134)

   

(46,134)

 

(3,535)

 

(49,669)

     

 

 

 

 

 

 

 

 

 

 

310,117

 

 

 

405,306

 

715,423

 

(17,512)

 

697,911

                                               

Equity valuation adjustments

                                             

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

     

(6,810)

   

6,810

 

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

     

(241)

   

241

 
     

 

 

 

 

 

 

 

 

 

 

(7,051)

 

 

 

7,051

 

 

 

 

 

 

                                               

At March 31, 2014

   

8,043,222

 

232,430

 

26,895

 

28,412

 

354,842

 

(789,625)

 

(48,892)

 

412,357

 

8,259,641

 

119,604

 

8,379,245

                                               

At December 31, 2014

   

8,043,222

 

232,430

 

71,542

 

394,121

 

270,517

 

(2,924,057)

 

(48,892)

 

 

 

6,038,883

 

(144,533)

 

5,894,350

                                               
                                               

Comprehensive income for the period:

                                             

Profit for the period

     

251,403

 

251,403

 

(47,411)

 

203,992

Exchange variation of foreign sales hedge, net of taxes

   

(2,692,163)

     

(2,692,163)

 

(77,087)

 

(2,769,250)

Fair value of cash flow hedge, net of taxes

   

(251,439)

     

(251,439)

 

(15,298)

 

(266,737)

Foreign currency translation adjustment

   

419,359

     

419,359

 

18,399

 

437,758

     

(2,524,243)

   

251,403

 

(2,272,840)

 

(121,397)

 

(2,394,237)

                                           

Equity valuation adjustments

                                         

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

   

(6,810)

   

6,810

 

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

   

(241)

   

241

 
     

(7,051)

   

7,051

 
                         

Contribution to shareholders:

                     

Repurchase of treasury shares

19(b)

     

(927)

   

(927)

   

(927)

       

(927)

   

(927)

   

(927)

                     

At March 31, 2015

 

8,043,222

 

232,430

 

71,542

 

394,121

 

270,517

 

(5,455,351)

 

(49,819)

 

258,454

 

3,765,116

 

(265,930)

 

3,499,186

                                             

At December 31, 2015

 

8,043,222

 

232,430

 

229,992

 

2,404,663

 

247,364

 

(9,085,256)

 

(49,819)

 

 

 

2,022,596

 

(684,885)

 

1,337,711

                           

Comprehensive income for the period:

                         

Profit for the period

     

774,734

 

774,734

 

(27,837)

 

746,897

Exchange variation of foreign sales hedge, net of taxes

   

1,649,583

   

1,649,583

 

(31,452)

 

1,618,131

Fair value of cash flow hedge, net of taxes

   

23,497

   

23,497

 

(19,542)

 

3,955

Foreign currency translation adjustment

   

(135,991)

   

(135,991)

 

71,359

 

(64,632)

     

1,537,089

 

 

 

774,734

 

2,311,823

 

(7,472)

 

2,304,351

                           

Equity valuation adjustments

                         

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

   

(6,809)

   

6,809

 

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

   

(241)

   

241

 
     

(7,050)

   

7,050

 
                           

At March 31, 2016

 

8,043,222

 

232,430

 

229,992

 

2,404,663

 

247,364

 

(7,555,217)

 

(49,819)

 

781,784

 

4,334,419

 

(692,357)

 

3,642,062

 

 

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

 

5

 


 
 

Braskem S.A.

 

Statement of changes flows

at March 31, 2016

All amounts in thousands of reais

 

 

 

   

Note

 

Mar/2016

 

Mar/2015

 

Mar/2014

               

Profit before income tax and social contribution

   

997,825

 

379,325

 

569,133

               

Adjustments for reconciliation of profit

             

Depreciation, amortization and depletion

   

582,819

 

518,805

 

505,535

Results from equity investments

 

9(c)

 

(1,687)

 

(2,003)

 

6

Interest and monetary and exchange variations, net

 

 

 

386,645

 

998,244

 

213,410

Cost amount of the investment sold in the divestment date

 

 

   

37,662

Other

 

 

 

19,584

 

3,790

 

3,691

   

 

 

 

 

 

 

 

   

 

 

1,985,186

 

1,898,161

 

1,329,437

   

 

           

Changes in operating working capital

 

 

           

Held-for-trading financial investments

 

 

 

17,252

 

8,330

 

(4,744)

Trade accounts receivable

 

 

 

434,434

 

(618,069)

 

23,282

Inventories

 

 

 

413,307

 

578,262

 

(498,471)

Taxes recoverable

 

 

 

316,153

 

290,810

 

(44,633)

Prepaid expenses

 

 

 

8,269

 

5,494

 

16,702

Other receivables

 

 

 

(8,479)

 

(252,734)

 

(332,375)

Trade payables

 

 

 

(1,870,551)

 

449,302

 

(266,760)

Taxes payable

 

 

 

(208,486)

 

129,570

 

(50,545)

Advances from customers

 

 

 

(5,336)

 

8,242

 

(12,086)

Sundry provisions

 

 

 

(5,003)

 

(28,869)

 

(14,551)

Other payables

 

 

 

32,171

 

(40,600)

 

184,657

   

 

 

 

 

 

 

 

Cash from operations

 

 

 

1,108,917

 

2,427,899

 

329,913

   

 

           

Interest paid

 

 

 

(259,042)

 

(181,343)

 

(101,389)

Income tax and social contribution paid

 

 

 

(94,662)

 

(10,459)

 

(22,362)

   

 

 

 

 

 

 

 

Net cash generated by operating activities

 

 

 

755,213

 

2,236,097

 

206,162

   

 

           

Proceeds from the sale of fixed assets

 

 

 

97

 

532

 

363

Acquisitions to property, plant and equipment

 

(i)

 

(751,078)

 

(816,353)

 

(1,156,787)

Acquisitions of intangible assets

   

(4,557)

 

(595)

 

(8,870)

Held-for-maturity financial investments

     

7,265

     

 

 

 

 

 

Net cash used in investing activities

   

(755,538)

 

(816,416)

 

(1,158,029)

               

Short-term and long-term debt

             

Obtained borrowings

   

803,625

 

1,394,810

 

1,656,951

Payments of borrowings

   

(968,354)

 

(1,886,696)

 

(1,841,649)

Project finance

 

13

           

Obtained funds

   

91,094

 

357,319

 

Payments

   

(80,391)

 

(86,748)

 

Dividends paid

   

(4)

 

(6)

 

(2)

Repurchase of treasury shares

 

19(b)

 

 

 

(927)

 

 

     

 

 

 

 

 

Net cash used in financing activities

   

(154,030)

 

(222,248)

 

(184,700)

               

Exchange variation on cash of foreign subsidiaries

   

238,273

 

(119,521)

 

14,773

     

 

 

 

 

 

Increase (decrease) in cash and cash equivalents

   

83,918

 

1,077,912

 

(1,121,794)

               

Represented by

             

Cash and cash equivalents at the beginning for the period

   

7,439,723

 

3,993,359

 

4,335,859

Cash and cash equivalents at the end for the period

   

7,523,641

 

5,071,271

 

3,214,065

     

 

 

 

 

 

Increase (decrease) in cash and cash equivalents

   

83,918

 

1,077,912

 

(1,121,794)

 

(i)    Includes capitalized financial charges paid: Mar/2016 – R$188,725.

 

 

 

 

 

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

 

6

 


 

 

Braskem S.A.

 

Notes to the financial statements

at March 31, 2016

All amounts in thousands, unless otherwise stated

 

1.                       Operations

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

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

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

2.                       Summary of significant accounting policies

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

2.1.                 Basis of preparation

This Quarterly Information should be read together with the financial statements of Braskem as of December 31, 2015, which were prepared and presented in accordance with the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB).

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

Issue of these financial statements was authorized by the Executive Board on May 04, 2016.

2.1.1             Consolidated quarterly information

The consolidated Quarterly Information was prepared and is being presented in accordance with the pronouncements IAS 34 - Interim Financial Reporting, which establishes the minimum content for interim financial statements.

The consolidated financial statements were prepared and presented in accordance with the International Financial Reporting Standards “IFRS” issued by the International Accounting Standards Board “IASB”.

All the financial statements’ relevant information are properly supported and correspond to the information used by Management in the Company’s management.

 

 

 

 

7

 


 
 

Braskem S.A.

 

Notes to the financial statements

at March 31, 2016

All amounts in thousands, unless otherwise stated

 

2.1.2            Consolidated quarterly information

 

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

    

         

Total and voting interest - %

                       
         

Headquarters

 

Mar/2016

 

Dec/2015

 

Dec/2014

Direct and Indirect subsidiaries

                   

Alclor Química de Alagoas Ltda ("Alclor")

 

(i)

 

Brazil

 

100.00

 

100.00

 

100.00

Braskem America Finance Company ("Braskem America Finance")

 

 

 

USA

 

100.00

 

100.00

 

100.00

Braskem America, Inc. (“Braskem America”)

 

 

 

USA

 

100.00

 

100.00

 

100.00

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

 

 

 

Argentina

 

100.00

 

100.00

 

100.00

Braskem International GmbH ("Braskem Austria")

 

(ii)

 

Austria

 

100.00

 

100.00

 

100.00

Braskem Austria Finance GmbH ("Braskem Austria Finance")

 

(iii)

 

Austria

 

100.00

 

100.00

 

100.00

Braskem Europe GmbH ("Braskem Alemanha")

 

 

 

Germany

 

100.00

 

100.00

 

100.00

Braskem Finance Limited (“Braskem Finance”)

 

 

 

Cayman Islands

 

100.00

 

100.00

 

100.00

Braskem Idesa

 

 

 

Mexico

 

75.00

 

75.00

 

75.00

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

     

Mexico

 

75.00

 

75.00

 

75.00

Braskem Importação e Exportação Ltda. ("Braskem Importação")

 

(iv)

 

Brasil

         

100.00

Braskem Incoporated Limited ("Braskem Inc")

     

Cayman Islands

 

100.00

 

100.00

 

100.00

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

     

Mexico

 

100.00

 

100.00

 

 

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

     

Mexico

 

100.00

 

100.00

 

100.00

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

     

Mexico

 

100.00

 

100.00

 

100.00

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

     

Netherlands

 

100.00

 

100.00

 

100.00

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

     

Netherlands

 

100.00

 

100.00

 

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

     

Netherlands

 

100.00

 

100.00

 

Braskem Participações S.A. ("Braskem Participações")

 

(iv)

 

Brasil

         

100.00

Braskem Petroquímica Chile Ltda. (“Petroquímica Chile”)

     

Chile

 

100.00

 

100.00

 

100.00

Braskem Petroquímica Ibérica, S.L. ("Braskem Espanha")

 

(v)

 

Espanha

         

100.00

Braskem Petroquímica Ltda. ("Braskem Petroquímica")

     

Brazil

 

100.00

 

100.00

 

100.00

Quantiq Distribuidora Ltda. ("Quantiq")

     

Brazil

 

100.00

 

100.00

 

100.00

IQAG Armazéns Gerais Ltda. ("IQAG")

     

Brazil

 

100.00

 

100.00

 

100.00

Lantana Trading Co. Inc. (“Lantana”)

     

Bahamas

 

100.00

 

100.00

 

100.00

Norfolk Trading S.A. (“Norfolk”)

 

(vi)

 

Uruguai

         

100.00

Politeno Empreendimentos Ltda. (“Politeno Empreendimentos”)

 

(iv)

 

Brasil

         

100.00

     

 

     

Specific Purpose Entity ("SPE")

 

 

     

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

 

 

 

Brazil

 

100.00

 

100.00

 

100.00

Fundo de Investimento Caixa Júpiter Multimercado
Crédito Privado Longo Prazo ("FIM Júpiter")

 

 

 

Brazil

 

100.00

 

100.00

 

100.00

 

 

 

 

 

 

           

(i)

Currently being merged.

                   

(ii)

In the process of dissolution.

                   

(iii)

Dissolved in January 2016.

                   

(iv)

Merged in February 2015.

                   

(v)

Dissolved in September 2015.

                   

(vi)

Dissolved in March 2015.

                   

 

8

 


 
 

Braskem S.A.

 

Notes to the financial statements

at March 31, 2016

All amounts in thousands, unless otherwise stated

 

2.2.                 Foreign currency translation

 

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

 

(a)               Brazilian real as functional currency

 

The company has a few companies abroad that also use the real as their functional currency. Foreign currency transactions and balances are translated into the functional currency using the foreign exchange rates prevailing at the dates of the transactions or at year end, as applicable. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end foreign exchange rates of monetary assets and liabilities denominated in foreign currencies are recognized in the statement of operations as “financial income” and “financial expenses”, respectively, except those designated for hedge accounting, which are, in this case, deferred in equity as cash flow hedges.

 

(b)              Exchange variation effects

 

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

 

 

End of period rate

 

Average rate for period ended

 

Mar/2016

 

Dec/2015

 

Variation

 

Mar/2016

 

Mar/2015

 

Mar/2014

 

Variation

U.S. dollar - Brazilizan real

3.5589

 

3.9048

 

-8.86%

 

3.9022

 

2.8702

 

2.3652

 

35.95%

U.S. dollar - Mexican peso

17.2230

 

17.3700

 

-0.85%

 

18.0244

 

14.9592

 

13.2311

 

20.49%

U.S. dollar - Euro

0.8779

 

0.9187

 

-4.44%

 

0.9068

 

0.8900

 

0.7300

 

1.89%

 

3.                       Cash and cash equivalents

 

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

 

               

Mar/2016

 

Dec/2015

                   

 

Cash and banks

         

(i)

772,528

 

873,966

Cash equivalents:

               
 

Domestic market

         

1,502,370

 

2,428,995

 

Foreign market

         

(i)

5,248,743

 

4,136,762

Total

           

7,523,641

 

7,439,723

 

(i)         On March 31, 2016, it includes cash and banks of R$53,586 (R$96,830 on December 31, 2015) and cash equivalents of R$74,503 (R$37,809 on December 31, 2015) of the subsidiary Braskem Idesa, available for use in its project.

 

 

9

 


 
 

 

Braskem S.A.

 

Notes to the financial statements

at March 31, 2016

All amounts in thousands, unless otherwise stated

 

4.                       Financial investments

 

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

  

               

Mar/2016

 

Dec/2015

Held-for-trading

                 
 

Other

           

1,397

 

1,172

Held-to-maturity

                 
 

Quotas of investment funds in credit rights

         

37,457

 

46,193

Total

           

38,854

 

47,365

                     

Current assets

           

1,397

 

1,172

Non-current assets

           

37,457

 

46,193

Total

           

38,854

 

47,365

 

5.                       Trade accounts receivable

 

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

 

           

Mar/2016

 

Dec/2015

Consumers

             
 

Domestic market

       

1,373,915

 

1,439,133

 

Foreign market

       

1,297,068

 

1,643,807

Allowance for doubtful accounts

     

(350,548)

 

(327,974)

Total

       

2,320,435

 

2,754,966

                 

Current assets

       

2,308,564

 

2,735,144

Non-current assets

       

11,871

 

19,822

Total

       

2,320,435

 

2,754,966

 

   

6.                       Inventories

 

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

 

  

               

Mar/2016

 

Dec/2015

                     

Finished goods

           

3,710,937

 

3,928,446

Raw materials, production inputs and packaging

         

802,912

 

1,008,217

Maintenance materials

           

292,757

 

289,568

Advances to suppliers

           

301,294

 

315,234

Imports in transit and other

           

123,423

 

110,787

Total

           

5,231,323

 

5,652,252

                     

Current assets

     

5,145,074

 

5,517,206

Non-current assets

     

86,249

 

135,046

Total

           

5,231,323

 

5,652,252

 
 

10


 
 

Braskem S.A.

 

Notes to the financial statements

at March 31, 2016

All amounts in thousands, unless otherwise stated

 

7.                       Related parties

 

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

 

Balance sheet for associated companies, jointly-controlled investment and related companies

               
     

 

 

 

 

 

 

Mar/2016

 

 

 

 

 

 

 

Dec/2015

               
     

Odebrecht

and

 

Petrobras

and

         

Odebrecht

and

 

Petrobras

 and

                       

Balance sheet

 

subsidiaries

 

subsidiaries

 

Other

 

Total

 

subsidiaries

 

subsidiaries

 

Other

 

Total

               

Assets

                                               

Current

                                               
 

Trade accounts receivable

 

8,304

 

121,548

34,182

164,034

 

12,851

 

141,550

33,997

188,398

               
 

Inventories

 

167,442

7(b.i)

 

167,442

 

138,619

7(b.i)

138,619

               
 

Dividends and interest on capital

   

2,350

2,350

   

 

               
 

Related parties

   

10,320

 

10,320

   

9,927

580

10,507

               
                               

Non-current

                             
 

Advances to suppliers

 

15,222

7(b.i)

15,222

 

58,443

7(b.i)

58,443

               
 

Related parties

 

 

 

 

               
 

Intracompany loan

 

80,175

80,175

 

78,332

78,332

               
 

Other

 

228,146

228,146

 

66,301

66,301

               

Total assets

 

190,968

 

440,189

36,532

667,689

 

209,913

296,110

34,577

540,600

               
                                                   

Liabilities

                                               

Current

                 

 

 

 

 

 

                   
 

Trade payables

 

118,406

 

1,235,830

 

1,517

 

1,355,753

284,973

 

1,400,485

 

2,011

 

1,687,469

               

Total liabilities

 

118,406

 

1,235,830

 

1,517

 

1,355,753

 

284,973

 

1,400,485

 

2,011

 

1,687,469

               
                                                   
                                                   
                                                   

Transactions between associated companies, jointly-controlled investment and related companies

     

 

 

 

 

 

 

Mar/2016

 

 

 

 

 

 

 

Mar/2015

 

 

 

 

 

 

 

Mar/2014

     

Odebrecht

and

 

Petrobras

and

         

Odebrecht

and

 

Petrobras

and

         

Odebrecht

and

 

Petrobras

and

       
     

subsidiaries

 

subsidiaries

 

Other

 

Total

 

subsidiaries

 

subsidiaries

 

Other

 

Total

 

subsidiaries

 

subsidiaries

 

Other

 

Total

Transactions

                                               
 

Sales of products

 

15,569

 

695,947

 

117,856

 

829,372

 

12,688

 

601,706

 

118,932

 

733,326

 

8,845

 

303,220

 

59,552

 

371,617

 

Purchases of raw materials, finished goods

 
 

  services and utilities

 

361,144

(i)

2,536,367

 

22,165

 

2,919,676

829,358

(i)

2,558,116

13,450

 

3,400,924

 

49,933

 

2,110,336

 

5,752

 

2,166,021

 

Financial income (expenses)

 

187

 

(50,061)

 

 

 

(49,874)

 

 

(35,065)

 

 

 

(35,065)

 

 

 

1,166

 

 

 

1,166

 

General and administrative expenses

 
 

Post-employment benefits

 
 

Odebrecht previdência Privada ("Odeprev")

   

5,055

 

5,055

4,907

 

4,907

   

6,037

 

6,037

 

Gain from divestment of asset

           

277,338

   

277,338

 

(i)    Includes expenses with the Braskem Idesa project, of which R$330,406 related to the first quarter of 2016, and R$782,024 related to the first quarter of 2015 (Note 13).

11

 


 
 

 

Braskem S.A.

 

Notes to the financial statements

at March 31, 2016

All amounts in thousands, unless otherwise stated

 

 

The main transactions with related companies in the period, were:

 

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

 

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

 

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

 

(b)                    Key management personnel

 

Income statement transactions

 

Mar/2016

 

Mar/2015

 

Mar/2014

Remuneration

           

Short-term benefits

 

10,280

 

10,160

 

3,486

Post-employment benefit

 

76

 

59

 

76

Long-term incentives

         

22

Total

 

10,356

 

10,219

 

3,584

   

8.                       Taxes recoverable

 

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

 

       

Mar/2016

 

Dec/2015

Brazil

       

 

 

IPI

   

47,511

 

23,996

 

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

 

414,115

 

403,842

 

ICMS - credits from PP&E

 

124,033

 

121,954

 

Social integration program (PIS) and social contribution on revenue (COFINS) - normal operations

 

21,415

 

69,431

 

PIS and COFINS - credits from PP&E

 

233,884

 

230,030

 

Income tax and social contribution (IR and CSL)

 

901,651

 

944,863

 

REINTEGRA program

 

138,936

 

274,654

 

Federal supervenience

 

173,042

 

173,436

 

Other

   

18,702

 

14,281

       

Other countries

   
 

Value-added tax

   

271,009

 

277,751

 

Income tax (IR)

   

5,449

 

40,263

 

Other

   

4,822

 

1,559

Total

   

2,354,569

 

2,576,060

             

Current assets

   

1,081,509

 

1,272,004

Non-current assets

 

1,273,060

 

1,304,056

Total

   

2,354,569

 

2,576,060

 

12

 


 
 

Braskem S.A.

 

Notes to the financial statements

at March 31, 2016

All amounts in thousands, unless otherwise stated

 

9.                       Investments

 

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

 

(a)                    Information on investments

 

 

           

Interest in total

 

Adjusted net profit (loss)

 

Adjusted

           

and voting
capital (%) - Mar/2016

 

for the period

 

equity

             

Mar/2016

 

Mar/2015

 

Mar/2014

 

Mar/2016

 

Dec/2015

                                 

Jointly-controlled investment

 

 

 

 

 

 

 

 

     

 

 

 

 

RPR

   

33.20

4,788

 

8,173

 

324

 

120,211

 

145,551

 

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

   

20.00

(82)

 

216

 

159

 

11,360

 

11,441

         

 

Associates

     
 

Borealis Brasil S.A. ("Borealis")

   

20.00

796

 

8,529

 

 

 

158,887

 

158,366

 

13

 
 

Braskem S.A.

 

Notes to the financial statements

at March 31, 2016

All amounts in thousands, unless otherwise stated

 

(b)                    Summary of information from the partially owned subsidiary Braskem Idesa

 

 

Balance sheet

 

 

 

 

 

 

 

 

 

 

Assets

Mar/2016

 

Dec/2015

 

Liabilities

   

Mar/2016

 

Dec/2015

Current

       

Current

         
 

Cash and cash equivalents

128,089

 

134,639

 

Trade payables

   

221,093

 

429,400

 

Inventories

159,145

 

173,129

 

Project finance

   

392,181

 

302,266

 

Taxes recoverable

178,903

 

219,071

 

Other payables

   

91,558

 

106,911

 

Other receivables

126,893

 

150,109

       

704,832

 

838,577

   

593,030

 

676,948

             

Non-current

       

Non-current

         
 

Deferred tax

819,398

 

825,416

 

Project finance

   

11,040,341

 

11,975,167

 

Other receivables

18,221

 

32,080

 

Loan agreements

   

6,211,364

 

5,911,266

 

Property, plant and equipment

14,507,990

 

15,134,641

 

Other payables

   

104,105

 

7,065

 

Intangible

74,326

 

80,870

       

17,355,810

 

17,893,498

   

15,419,935

 

16,073,007

             
           

Shareholders' equity

 

(2,047,677)

 

(1,982,120)

                       

Total assets

16,012,965

 

16,749,955

 

Total liabilities and shareholders' equity

16,012,965

 

16,749,955

                     

-

                       

Statement of operations

 

 

 

 

 

 

 

 

 

 

             

Mar/2016

 

Mar/2015

 

Mar/2014

Gross profit (loss)

         

2,564

 

(4,717)

 

(768)

 

Operating expenses, net

         

(29,825)

 

(18,589)

 

(14,017)

 

Financial results

         

(45,711)

 

(28,460)

 

(4,819)

Loss before income tax

         

(72,972)

 

(51,766)

 

(19,604)

 

Income tax

         

(2,338)

 

(23,337)

 

4,464

Loss for the period

         

(75,310)

 

(75,103)

 

(15,140)

                       
                       

Statement of cash flows

 

 

 

 

 

 

 

 

 

 

             

Mar/2016

 

Mar/2015

 

Mar/2014

Cash flows from operating activities

                   
 

Cash generated by operating activities

         

(123,198)

 

(49,925)

 

(251,389)

                       

Net cash used in investing activities

         

(569,535)

 

(548,290)

 

(773,660)

Net cash provided by financing activities

                   
 

Project finance

         

9,593

 

357,319

 

 

 

Related parties

         

662,966

 

244,322

 

357,061

             

672,559

 

601,641

 

357,061

                       

Exchange variation on cash

         

13,624

 

(35,096)

 

8,163

                     

 

Decrease in cash and cash equivalents

         

(6,550)

 

(31,670)

 

(659,825)

                       

Represented by:

                   
 

Cash and cash equivalents at the beginning for the period

       

134,639

 

333,864

 

809,875

 

Cash and cash equivalents at the end for the period

       

128,089

 

302,194

 

150,050

                     

 

Decrease in cash and cash equivalents

         

(6,550)

 

(31,670)

 

(659,825)

 

14

 


 
 

Braskem S.A.

 

Notes to the financial statements

at March 31, 2016

All amounts in thousands, unless otherwise stated

 

10.                   Property, plant and equipment

 

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

 

       

 

 

 

 

Mar/2016

 

 

 

 

 

Dec/2015

           

Accumulated

         

Accumulated

   
           

depreciation/

         

depreciation/

   
       

Cost

 

depletion

 

Net

 

Cost

 

depletion

 

Net

                             

Land

 

 

465,777

 

 

 

465,777

 

479,621

 

 

 

479,621

Buildings and improvements

 

 

5,138,834

 

(917,734)

 

4,221,100

 

5,435,600

 

(904,324)

 

4,531,276

Machinery, equipment and installations

 

36,673,379

 

(14,914,956)

 

21,758,423

 

37,401,007

 

(14,513,744)

 

22,887,263

Projects and stoppage in progress

 

(i)

5,815,999

 

 

 

5,815,999

 

5,506,044

 

 

 

5,506,044

Other

 

 

1,249,616

 

(674,103)

 

575,513

 

1,212,365

 

(654,606)

 

557,759

Total

   

49,343,605

 

(16,506,793)

 

32,836,812

 

50,034,637

 

(16,072,674)

 

33,961,963

On March 31, 2016, the main amounts included in this account refer to the expenditures with the subsidiary Braskem Idesa project (R$2,278,116) and expenditures with planned shutdown maintenance which is in preparation or in progress (R$636,416). The balance corresponds mainly to diverse projects aimed at maintenance of plants’ production capacity.

 

Capitalized charges in the period: R$219,536 (R$170,987 on March 31, 2015).

 

Impairment test for property, plant and equipment

 

There were no significant events or circumstances in the period ended March 31, 2016 that indicate the need for impairment testing on the property, plant and equipment.

 

11.                   Intangible assets

 

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

  

       

 

 

 

 

Mar/2016

 

Dec/2015

           

Accumulated

         

Accumulated

   
       

Cost

 

amortization

 

Net

 

Cost

 

amortization

 

Net

                             

Goodwill based on future profitability

 

3,187,722

 

(1,128,804)

 

2,058,918

 

3,187,722

 

(1,128,804)

 

2,058,918

Trademarks and patents

 

289,504

 

(101,951)

 

187,553

 

298,438

 

(100,782)

 

197,656

Software and use rights

 

534,770

 

(340,205)

 

194,565

 

536,786

 

(336,029)

 

200,757

Contracts with customers and suppliers

 

743,353

 

(350,650)

 

392,703

 

795,782

 

(365,509)

 

430,273

Total

   

4,755,349

 

(1,921,610)

 

2,833,739

 

4,818,728

 

(1,931,124)

 

2,887,604

 

Impairment of intangible assets with definite and indefinite useful life

 

There were no significant events or circumstances in the period ended March 31, 2016 that indicated the need for updating the impairment testing of intangible assets with indefinite useful life made in the end of 2015, or that indicated the need to perform an impairment testing of intangible assets with definite useful life.

 

 

15

 


 
 

Braskem S.A.

 

Notes to the financial statements

at March 31, 2016

All amounts in thousands, unless otherwise stated

 

12.                   Borrowings

 

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

 

         

Annual financial charges

 

Mar/2016

 

Dec/2015

Foreign currency

                 

 

 

Bonds

     

Note 12 (a)

     

15,537,988

 

17,004,617

 

Advances on exchange contracts

     

US dollar exchange variation + 3.34%

 

557,659

 

255,809

 

Export prepayment

     

US dollar exchange variation + 1.10% + semiannual Libor

501,538

 

549,036

 

BNDES

     

Note 12 (b)

     

333,295

 

409,076

 

Export credit notes

     

Note 12 (c)

     

1,285,417

 

1,405,227

 

Working capital

     

US dollar exchange variation + 1.70% above Libor

 

1,736,993

 

1,907,145

 

Transactions costs

             

(236,137)

 

(248,838)

                 

19,716,753

 

21,282,072

                       

Current liabilities

             

1,269,632

 

763,070

Non-current liabilities

             

18,447,121

 

20,519,001

Total

             

19,716,753

 

21,282,071

                       

Local currency

                   
 

Export credit notes

     

Note 12 (c)

     

2,122,870

 

2,350,965

 

BNDES

     

Note 12 (b)

     

2,866,296

 

3,001,776

 

BNB/ FINAME/ FINEP/ FUNDES

     

6.47%

     

608,886

 

642,739

 

BNB/ FINAME/ FINEP/ FUNDES

     

TJLP + 1.90%

     

2,097

 

2,177

 

Fundo de Desenvolvimento do Nordeste (FDNE)

     

6.50%

     

52,760

 

51,939

 

Other

     

CDI + 0.04%

     

24,488

 

23,714

 

Transactions costs

             

(15,395)

 

(16,581)

                 

5,662,002

 

6,056,729

                       

Current liabilities

             

991,908

 

1,205,469

Non-current liabilities

             

4,670,094

 

4,851,260

Total

             

5,662,002

 

6,056,729

                       

Current liabilities

             

2,261,540

 

1,968,540

Non-current liabilities

             

23,117,215

 

25,370,260

Total

             

25,378,755

 

27,338,800

 

 

 

16

 


 
 

 

Braskem S.A.

 

Notes to the financial statements

at March 31, 2016

All amounts in thousands, unless otherwise stated

 

 

(a)                    Bonds

 

     

Issue amount

     

Interest

   

Issue date

 

 

US$

 

Maturity

 

(% per year)

 

Mar/2016

 

Dec/2015

September - 2006

   

275,000

 

January - 2017

 

8.00

 

201,672

 

225,637

June - 2008

   

500,000

 

June - 2018

 

7.25

 

482,209

 

539,327

May - 2010

   

400,000

 

May - 2020

 

7.00

 

174,396

 

188,088

May - 2010

   

350,000

 

May - 2020

 

7.00

 

1,280,250

 

1,380,764

October - 2010

   

450,000

 

no maturity date

 

7.38

 

1,629,720

 

1,757,160

April - 2011

   

750,000

 

April - 2021

 

5.75

 

2,730,387

 

2,953,803

July - 2011

   

500,000

 

July - 2041

 

7.13

 

1,803,398

 

2,013,453

February - 2012

   

250,000

 

April - 2021

 

5.75

 

913,173

 

987,894

February - 2012

   

250,000

 

no maturity date

 

7.38

 

905,400

 

976,200

May - 2012

   

500,000

 

May - 2022

 

5.38

 

1,818,771

 

1,969,307

July - 2012

   

250,000

 

July - 2041

 

7.13

 

901,699

 

1,006,727

February - 2014

   

500,000

 

February - 2024

 

6.45

 

1,797,942

 

2,004,171

May-2014

   

250,000

 

February - 2024

 

6.45

 

898,971

 

1,002,086

Total

   

5,225,000

         

15,537,988

 

17,004,617

 

(b)                    BNDES borrowings

 

 

Projects

 

Issue date

 

Maturity

 

Charges (% per year)

 

Mar/2016

 

Dec/2015

                     

Foreign currency

                   

Other

 

2006

 

October - 2016

 

US dollar exchange variation + 6.89

 

2,044

 

3,204

Braskem Qpar expansion

 

2007/2008

 

April - 2016

 

US dollar exchange variation + 6.89

 

549

 

2,426

Green PE

 

2009

 

July - 2017

 

US dollar exchange variation + 6.67

 

22,528

 

29,352

Limit of credit II

 

2009

 

January - 2017

 

US dollar exchange variation + 6.67

 

33,199

 

47,353

New plant PVC Alagoas

 

2010

 

January - 2020

 

US dollar exchange variation + 6.67

 

110,209

 

128,806

Limit of credit III

 

2011

 

October - 2018

 

US dollar exchange variation + 6.51 to 6.54

 

122,788

 

149,495

Butadiene

 

2011

 

January - 2021

 

US dollar exchange variation + 6.54

 

41,978

 

48,440

               

333,295

 

409,076

                     

Local currency

                   

Other

 

2006

 

September - 2016

 

TJLP + 2.80

 

9,032

 

13,501

Braskem Qpar expansion

 

2007/2008

 

February - 2016

 

TJLP + 2.15 to 3.30

 

 

 

5,372

Green PE

 

2009

 

June - 2017

 

TJLP + 0.00 to 4.78

 

99,687

 

119,201

Limit of credit II

 

2009

 

January - 2017

 

TJLP + 2.58 to 3.58

 

65,619

 

85,004

Limit of credit II

 

2009

 

January - 2021

 

4.00 to 4.50

 

92,141

 

96,698

New plant PVC Alagoas

 

2010

 

December - 2019

 

TJLP + 0.00 to 3.58

 

221,646

 

235,641

New plant PVC Alagoas

 

2010

 

December - 2019

 

5.50

 

25,061

 

26,732

Limit of credit III

 

2011

 

December - 2021

 

TJLP + 0.00 to 3.58

 

1,081,689

 

1,154,552

Limit of credit III

 

2011

 

December - 2021

 

SELIC + 2.32 to 2.78

 

278,849

 

284,263

Limit of credit III

 

2011

 

December - 2021

 

3.50 to 7.00

 

219,816

 

230,198

Butadiene

 

2011

 

December - 2020

 

TJLP + 0.00 to 3.45

 

91,911

 

96,407

Finem

 

2014

 

March - 2021

 

TJLP + 0.00 to 2.78

 

222,441

 

215,372

Finem

 

2014

 

March - 2021

 

SELIC + 2.78

 

170,109

 

160,603

Finem

 

2014

 

March - 2021

 

6.00

 

6,664

 

6,664

Limit of credit IV

 

2015

 

January - 2022

 

TJLP + 0.00 to 2.62

 

144,175

 

140,024

Limit of credit IV

 

2015

 

January - 2022

 

SELIC + 2.32

 

137,456

 

131,544

               

2,866,296

 

3,001,776

                     

Total

             

3,199,591

 

3,410,852

 

17

 


 
 

Braskem S.A.

 

Notes to the financial statements

at March 31, 2016

All amounts in thousands, unless otherwise stated

 

(c)                    Export credit notes (“NCE”)

 

     

Initial amount

               

Issue date

 

 

of the transaction

 

Maturity

 

Charges (% per year)

 

Mar/2016

 

Dec/2015

                       

Foreign currency

   

US$

               

November - 2006

 

 

167,014

 

May - 2018

 

Us dollar exchange variation + 8.10

 

286,463

 

308,069

April - 2007

 

 

101,605

 

March - 2018

 

Us dollar exchange variation + 7.87

 

184,714

 

198,782

May - 2007

 

 

146,010

 

May - 2019

 

Us dollar exchange variation + 7.85

 

274,018

 

294,840

January - 2008

 

 

266,430

 

February - 2020

 

Us dollar exchange variation + 7.30

 

540,222

 

603,536

 

 

 

681,059

         

1,285,417

 

1,405,227

 

 

                   

Local currency

 

                   

April - 2010

 

 

50,000

 

October - 2021

 

105% of CDI

 

37,905

 

36,653

June - 2010

 

 

200,000

 

October - 2021

 

105% of CDI

 

151,620

 

146,611

February - 2011

 

 

250,000

 

October - 2021

 

105% of CDI

 

151,620

 

146,611

April - 2011

(i)

 

450,000

 

April - 2019

 

112.5% of CDI

 

463,758

 

464,039

June - 2011

 

 

80,000

 

October - 2021

 

105% do CDI

 

60,648

 

58,644

August - 2011

(i)

 

400,000

 

August - 2019

 

112,5% of CDI

 

405,474

 

405,478

June - 2012

 

 

100,000

 

October - 2021

 

105% of CDI

 

75,810

 

73,305

September - 2012

 

 

300,000

 

October - 2021

 

105% of CDI

 

227,431

 

219,917

October - 2012

 

 

85,000

 

October - 2021

 

105% of CDI

 

64,439

 

62,310

February - 2013

(ii)

 

100,000

 

September - 2017

 

8.00

 

101,183

 

101,118

February - 2013

(ii)

 

100,000

 

February - 2016

 

8.00

 

 

 

101,248

February - 2013

(ii)

 

50,000

 

September - 2017

 

8.00

 

50,440

 

50,440

February - 2013

(ii)

 

100,000

 

February - 2016

 

8.00

 

 

 

101,118

March - 2013

(ii)

 

50,000

 

March - 2016

 

8.00

 

 

 

50,253

June - 2014

(ii)

 

50,000

 

June - 2017

 

7.50

 

50,010

 

50,010

June - 2014

(ii)

 

17,500

 

June - 2017

 

8.00

 

17,504

 

17,504

June - 2014

(ii)

 

10,000

 

June - 2017

 

8.00

 

10,002

 

10,002

September - 2014

 

 

100,000

 

August - 2020

 

108% of CDI

 

101,029

 

104,642

November - 2014

(ii)

 

150,000

 

November - 2017

 

8.00

 

153,997

 

151,062

Total

   

2,642,500

         

2,122,870

 

2,350,965

 

(i)         The Company enters into swap transactions to offset the variation in the Interbank Certificate of Deposit (CDI) rate (Note 14.2.1 (a.i)).

(ii)       The Company enters into swap transactions for these contracts (from fixed rate to 67.10% to 92.70% of CDI) (Note 14.2.1).

 

18

 


 
 

 

Braskem S.A.

 

Notes to the financial statements

at March 31, 2016

All amounts in thousands, unless otherwise stated

 

(d)                    Payment schedule

 

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

 

       

Mar/2016

 

Dec/2015

2017

     

1,269,181

 

1,737,331

2018

     

2,468,266

 

2,633,143

2019

     

3,176,126

 

3,320,800

2020

     

2,568,133

 

2,757,234

2021

     

3,909,096

 

4,257,177

2022

     

1,891,474

 

2,071,030

2023

     

7,668

 

7,540

2024

     

2,685,429

 

2,944,726

2025 and thereafter

     

5,141,842

 

5,641,279

Total

     

23,117,215

 

25,370,260

 

(e)                    Guarantees

 

Braskem gave collateral for part of its borrowings as follows:

 

       

Total

 

Total

   

Loans

 

Maturity

 

debt 2015

 

guaranteed

 

Guarantees

                 

BNB

 

December - 2022

 

157,169

 

157,169

 

Mortgage of plants, pledge of machinery and equipment

BNB

 

August - 2024

 

239,899

 

239,899

 

Bank surety

BNDES

 

December - 2021

 

3,199,591

 

3,199,591

 

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

FUNDES

 

June-2020

 

135,801

 

135,801

 

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

FINEP

 

July - 2024

 

76,017

 

76,017

 

Bank surety

FINAME

 

February-2022

 

2,097

 

2,097

 

Pledge of equipment

Total

     

3,810,574

 

3,810,574

   

 

19

 
 

Braskem S.A.

 

Notes to the financial statements

at March 31, 2016

All amounts in thousands, unless otherwise stated

 

13.                   Project finance

 

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

 

   

US$

               

Identification

 

Contract value

 

Value received

 

Maturity

 

Charges (% per year)

 

Mar/2016

 

Dec/2015

Project finance I

 

700,000

 

700,000

 

February - 2027

 

Us dollar exchange variation + quarterly Libor + 3.25

 

2,529,725

 

2,720,874

Project finance II

 

210,000

 

189,996

 

February - 2027

 

Us dollar exchange variation + 6.17

 

761,033

 

740,902

Project finance III

 

600,000

 

600,000

 

February - 2029

 

Us dollar exchange variation + 4.33

 

2,169,555

 

2,334,133

Project finance IV

 

660,000

 

680,004

 

February - 2029

 

Us dollar exchange variation + quarterly Libor + 3.88

 

2,388,521

 

2,645,645

Project finance V

 

400,000

 

400,000

 

February - 2029

 

Us dollar exchange variation + quarterly Libor + 4.65

 

1,448,033

 

1,557,360

Project finance VI

 

90,000

 

89,994

 

February - 2029

 

Us dollar exchange variation + quarterly Libor + 2.73

 

325,095

 

349,464

Project finance VII

 

533,095

 

533,095

 

February - 2029

 

Us dollar exchange variation + quarterly Libor + 4.64

 

1,929,525

 

2,075,524

Transactions costs

           

(153,480)

 

(173,240)

Total

 

3,193,095

 

3,193,089

         

11,398,007

 

12,250,662

                         
                         

VAT borrowings (i)

       

November - 2029

 

2,00% above TIIE (ii)

 

34,515

 

26,771

                   

34,515

 

26,771

                         
                   

11,432,522

 

12,277,433

                         

Current liabilities

                 

392,181

 

302,266

Non-current liabilities

             

11,040,341

 

11,975,167

Total

                 

11,432,522

 

12,277,433

 

(i)         Financing for Braskem IDESA obtained in Mexican peso paid exclusively using the reimbursement of value-added taxes (Note 8 (a).ii). During the period ended March 31, 2016, the subsidiary Braskem Idesa raised R$91,094 and repaid R$81,501 (R$80,391 as principal and R$1,110 as interest).

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

 

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

 

  

   

Mar/2016

 

Dec/2015

2017

 

533,136

 

687,211

2018

 

771,776

 

840,247

2019

 

801,599

 

872,994

2020

 

940,924

 

1,025,621

2021

 

1,075,239

 

1,172,569

2022

 

895,770

 

977,593

2023

 

1,186,548

 

1,294,219

2024

 

1,284,077

 

1,400,843

2025

 

1,283,676

 

1,398,554

2026

 

1,111,309

 

1,210,426

2027 and thereafter

 

1,156,287

 

1,094,890

Total

 

11,040,341

 

11,975,167

 

 

 

20

 


 
 

Braskem S.A.

 

Notes to the financial statements

at March 31, 2016

All amounts in thousands, unless otherwise stated

 

14.                   Financial instruments

 

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

14.1.             Non-derivative financial instruments

 

           

Fair value

 

Book value

 

Fair value

   

Note

 

Classification by category

 

hierarchy

 

Mar/2016

 

Dec/2015

 

Mar/2016

 

Dec/2015

                             

Cash and cash equivalents

 

3

                       

Cash and banks

 

 

         

772,528

 

873,966

 

772,528

 

873,966

Financial investments in Brazil

 

 

 

Held-for-trading

 

Level 2

 

 

 

605,770

 

 

 

605,770

Financial investments in Brazil

 

 

 

Loans and receivables

     

1,502,370

 

1,823,225

 

1,502,370

 

1,823,225

Financial investments abroad

 

 

 

Held-for-trading

 

Level 2

 

5,248,743

 

4,136,762

 

5,248,743

 

4,136,762

   

 

         

7,523,641

 

7,439,723

 

7,523,641

 

7,439,723

   

 

                       

Financial investments

 

4

                       

Other

 

 

 

Held-for-trading

 

Level 2

 

1,397

 

1,172

 

1,397

 

1,172

Quotas of receivables investment fund

 

 

 

Held-to-maturity

     

37,457

 

46,193

 

37,457

 

46,193

   

 

         

38,854

 

47,365

 

38,854

 

47,365

   

 

                       

Trade accounts receivable

 

5

         

2,320,435

 

2,754,966

 

2,320,435

 

2,754,966

   

 

                       

Related parties credits

 

7

 

Loans and receivables

     

318,641

 

155,140

 

318,641

 

155,140

   

 

                       

Trade payables

 

 

         

9,147,852

 

11,755,843

 

9,147,852

 

11,755,843

   

 

                       

Borrowings

 

12

                       

Foreign currency - Bond

 

 

     

Level 1

 

15,537,988

 

17,004,617

 

12,250,933

 

14,434,854

Foreign currency - other borrowings

 

 

         

4,414,902

 

4,526,293

 

4,414,902

 

4,526,293

Local currency

 

 

         

5,677,397

 

6,073,310

 

5,677,397

 

6,073,310

   

 

         

25,630,287

 

27,604,220

 

22,343,232

 

25,034,457

   

 

                       

Project finance

 

13

         

11,586,002

 

12,450,673

 

11,586,002

 

12,450,673

   

 

                       

Non-controlling loan in Braskem Idesa

 

 

         

1,580,402

 

1,538,784

 

1,580,402

 

1,538,784

   

 

                       

Other payables (BNDESPAR)

 

 

         

279,861

 

273,294

 

279,861

 

273,294

 

 

(a)                    Fair value hierarchy

 

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

 

Level 2 – fair value obtained from discounted cash flow models, when the instrument is a forward purchase or sale or a swap contract, or valuation models of option contracts, such as the Black-Scholes model, when the derivative has the characteristics of an option.

 

 

21

 


 
 

Braskem S.A.

 

Notes to the financial statements

at March 31, 2016

All amounts in thousands, unless otherwise stated

 

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

 

14.2.1    Changes

   

           

Operation characteristics

 

Net

         

Net

Identification

 

Note

 

Fair value

hierarchy

 

Principal exposure

 

Derivatives

 

(Asset)/Liability

Dec/2015 

 

Change in

fair value

 

Financial

settlement

 

(Asset)/Liability

Mar/2016 

                                 

Non-hedge accounting transactions

                               

Exchange swap

 

 

 

Level 2

 

Argentine peso

 

Dollar

 

(38,990)

 

(5,348)

 

47,880

 

3,542

Interest rate swaps

 

 

 

Level 2

 

Fixed rate

 

CDI

 

8,351

 

(2,380)

 

(4,456)

 

1,515

                   

(30,639)

 

(7,728)

 

43,424

 

5,057

                                 

Hedge accounting transactions

                               

Exchange swap

 

14.2.1 (a.i)

 

Level 2

 

CDI

 

Dollar+Interests

 

1,172,125

 

(138,043)

 

675

 

1,034,757

Interest rate swaps

 

14.2.1 (a.ii.i)

Level 2

 

Libor

 

Fixed rates

 

35,073

 

117,643

 

(18,154)

 

134,562

                   

1,207,198

 

(20,400)

 

(17,479)

 

1,169,319

                                 

Derivatives operations

                               

Current assets

                 

(53,662)

         

(11,058)

Non-current assets

                 

(12,280)

         

 

Current liabilities

                 

57,760

         

43,615

Non-current liabilities

                 

1,184,741

         

1,141,819

                   

1,176,559

         

1,174,376

 

(a)                    Operations designated for hedge accounting

 

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

 

Identification

     

Hedge

 

Maturity

   
     

(exchange variation

   

Fair value

 

Nominal value

 

+ interest rate)

   

Mar/2016

 

Dec/2015

Swap NCE I

 

200,000

 

Us dollar exchange variation + 6.15%

 

August 2019

 

267,631

 

301,325

Swap NCE II

 

100,000

 

Us dollar exchange variation + 6.15%

 

August 2019

 

130,426

 

147,021

Swap NCE III

 

100,000

 

Us dollar exchange variation + 6.15%

 

August 2019

 

128,076

 

144,496

Swap NCE IV

 

100,000

 

Us dollar exchange variation + 5.50%

 

April 2019

 

109,006

 

124,071

Swap NCE V

 

100,000

 

Us dollar exchange variation + 5.50%

 

April 2019

 

108,909

 

123,966

Swap NCE VI

 

150,000

 

Us dollar exchange variation + 7.90%

 

April 2019

 

178,159

 

203,675

Swap NCE VII

 

100,000

 

Us dollar exchange variation + 4.93%

 

April 2019

 

112,550

 

127,571

Total

 

850,000

         

1,034,757

 

1,172,125

                     

Derivatives operations

                   

Current assets

             

(11,058)

 

(12,616)

Non-Current liabilities

             

1,045,815

 

1,184,741

Total

         

1,034,757

 

1,172,125

 

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

 

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

 

 

22

 


 
 

Braskem S.A.

 

Notes to the financial statements

at March 31, 2016

All amounts in thousands, unless otherwise stated

 

(a.ii.i)     Interest rate swap linked to Libor

  

Identification

 

Nominal value

 

Hedge

 

Maturity

 

 

 

Fair value

 

US$

 

(interest rate per year)

   

Mar/2016

 

Dec/2015

Swap Libor I

 

299,996

 

1.9825%

 

May-2025

 

30,737

 

7,997

Swap Libor II

 

299,996

 

1.9825%

 

May-2025

 

30,771

 

8,050

Swap Libor III

 

299,996

 

1.9825%

 

May-2025

 

30,733

 

7,956

Swap Libor IV

 

129,976

 

1.9825%

 

May-2025

 

13,317

 

3,465

Swap Libor V

 

132,996

 

1.9825%

 

May-2025

 

13,642

 

3,569

Swap Libor VI

 

149,932

 

1.9825%

 

May-2025

 

15,362

 

4,036

Total

 

1,312,892

         

134,562

 

35,073

                     

Derivatives operations

                   

Non-Current assets

             

 

 

(12,280)

Current liabilities

             

38,558

 

47,353

Non-Current liabilities

             

96,004

 

 

Total

             

134,562

 

35,073

 

 

14.3       Non-derivative liabilities designated for export hedge accounting

 

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

 

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

 

Exports that were designated and not yet realized amounted to US$6,550,280, as shown below:

 

 

 

 

 

 

 

Total nominal value

         

 

US$

 

 

 

 

 

 

 

2016

 

 

 

 

 

632,496

2017

 

 

 

 

 

829,684

2018

 

 

 

 

 

787,894

2019

 

 

 

 

 

733,980

2020

 

 

 

 

 

724,000

2021

 

 

 

 

 

716,000

2022

 

 

 

 

 

719,000

2023

 

 

 

 

 

718,372

2024

 

 

 

 

 

688,854

 

 

 

 

 

 

6,550,280

 

Considering the strong cash generation in recent quarters, the Management of the Company believed it was an opportunity to prepay dollar-denominated debt, including liabilities designated as export hedging instruments. As a result of the decision, the amount of US$210,752 was discontinued prospectively. Exchange differences on the discontinued amount, of R$345,442, which is recorded under Shareholders' Equity as "OCI" will be transferred to net financial income (expenses) as from April 2016 onwards, as the hedged exports are realized.

 

23

 


 
 

Braskem S.A.

 

Notes to the financial statements

at March 31, 2016

All amounts in thousands, unless otherwise stated

 

For the portion of hedge accounting discontinued, Braskem will follow the international accounting standards IAS 39-32 and IFRS 7. In other words, if the hedging instrument expires or is sold, terminated or exercised, and the hedge was effective before this event (expiration, sale, termination or exercise), the cumulative gain or loss resulting from such hedging instrument will continue to be retained in equity since the period the hedge was in place, and continue to be recognized under shareholders' equity until the future hedged exports occur.

 

The following table provides the balances of exchange differences recognized in the Company's net financial income (expenses) due to the realization of exports designated for hedge accounting over the course of the quarter ended March 31, 2016:

  

 

 

Total nominal

 

Convertion rate at

 

Closing rate

 

Total nominal

 

 

value US$

 

inception R$/US$

 

R$/US$

 

value R$

 

 

 

 

 

 

 

 

 

First quarter

 

206,951

 

2.0017

 

4.0399

 

421,800

 

 

 

 

 

 

 

 

421,800

 

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

  

   

 

 

 

 

 

 

US$

       

Exports in

 

Hedge

   
   

Dec/2015

 

the period

 

descontinued

 

Mar/2016

                 

Designated balance

 

6,757,231

 

(206,951)

 

(210,751)

 

6,339,529

 

On March 31, 2016, the maturities of the financial liabilities designated as this hedge, within the scope of the consolidated balance sheet, were as follows:

 

 

 

 

 

 

 

 

Total nominal value

         

 

US$

 

 

 

 

 

 

 

2016

 

 

 

 

 

1,664,035

2017

 

 

 

 

 

281,802

2018

 

 

 

 

 

1,152,280

2019

 

 

 

 

 

444,236

2020

 

 

 

 

 

570,782

2021

 

 

 

 

 

1,017,703

2022

 

 

 

 

 

519,837

2024

 

 

 

 

 

688,854

 

 

 

 

 

 

6,339,529

 

The changes in the exchange differences and the IR and CSL under “Other comprehensive income” (“OCI”) in equity are as follows: 

 

Exchange

     

Net

 

difference

 

IR and CSL

 

effect

           

At December 31, 2015

(12,859,687)

 

4,372,294

 

(8,487,393)

           

Foreign exchange gain (loss) recorded in the period on OCI / IR and CSL

2,220,529

 

(754,980)

 

1,465,549

           

Foreign exchange gain (loss) transferred to profit or loss / IR and CSL

421,800

 

(143,412)

 

278,388

           

At March 31, 2016

(10,217,358)

 

3,473,902

 

(6,743,456)

 

24

 


 
 

Braskem S.A.

 

Notes to the financial statements

at March 31, 2016

All amounts in thousands, unless otherwise stated

 

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

 

On March 31, 2016, hedged sales and the maturities of financial liabilities amounted to US$3,193,089 thousand and were distributed as follows:

 

 

 

 

 

 

 

Nominal value

         

 

US$

 

 

 

 

 

 

 

2016

 

 

 

 

 

67,774

2017

 

 

 

 

 

183,253

2018

 

 

 

 

 

221,790

2019

 

 

 

 

 

229,270

2020

 

 

 

 

 

266,690

2021

 

 

 

 

 

303,392

2022

 

 

 

 

 

253,204

2023

 

 

 

 

 

333,093

2024

 

 

 

 

 

359,559

2025

 

 

 

 

 

357,903

2026

 

 

 

 

 

309,240

2027

 

 

 

 

 

152,103

2028

 

 

 

 

 

124,654

2029

 

 

 

 

 

31,164

 

 

 

 

 

 

3,193,089

 

   

The changes in the exchange differences and the IR under OCI in equity are as follows:

 

 

Exchange

 

 

 

Net

 

difference

 

IR

 

effect

 

 

 

 

 

 

At December 31, 2015

(2,246,820)

 

674,046

 

(1,572,774)

 

 

 

 

 

 

Foreign exchange gain (loss) recorded in the period on OCI / IR

(179,723)

 

53,917

 

(125,806)

 

 

 

 

 

 

At March 31, 2016

(2,426,543)

 

727,963

 

(1,698,580)

 

 

 

14.4       Credit quality of financial assets

 

(a)                    Trade accounts receivable

 

On March 31, 2016, the credit ratings for the domestic market were as follows:

 

 

 

 

 

 

(%)

 

 

 

Mar/2016

 

Dec/2015

1

Minimum risk

 

6.47

 

7.67

2

Low risk

 

40.78

 

42.84

3

Moderate risk

 

33.68

 

33.07

4

High risk

 

16.62

 

13.74

5

Very high risk

(i)

2.45

 

2.69

 

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

 

25

 


 
 

 

Braskem S.A.

 

Notes to the financial statements

at March 31, 2016

All amounts in thousands, unless otherwise stated

 

Default indicators for the periods ended:

 

 

Last 12 months

 

Domestic

 

Export

 

Market

 

Market

March 31, 2016

0.48%

 

0.11%

December 31, 2015

0.39%

 

0.70%

March 31, 2015

0.18%

 

0.68%

 

(b)                    Other financial assets

 

In order to determine the credit ratings of counterparties in financial assets classified as cash and cash equivalents, held-for-trading, held-to-maturity and loans and receivables, Braskem uses credit rating from the following agencies: Standard & Poor’s, Moody’s and Fitch Ratings. Braskem’s financial policy determines “A-” as the minimum rating for financial investments.

 

     

Mar/2016

 

Dec/2015

Financial assets with risk assessment

       

 

AAA

   

5,656,534

 

5,982,393

AA+

   

30

 

 

AA

   

4

 

27,753

AA-

   

153,781

 

163,188

A+

   

1,397,662

 

1,076,803

A

   

145,357

 

69,576

A-

   

170,134

 

120,219

     

7,523,502

 

7,439,932

Financial assets without risk assessment

         

Quotas of investment funds in credit rights

 

(i)

37,457

 

46,193

Other financial assets with no risk assessment

   

1,536

 

963

     

38,993

 

47,156

           

Total

   

7,562,495

 

7,487,088

 

(i)         Investments approved by the Management of the Company, as permitted by the Financial Policy.

 

26

 
 

Braskem S.A.

 

Notes to the financial statements

at March 31, 2016

All amounts in thousands, unless otherwise stated

 

14.5       Sensitivity analysis

 

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

 

(a)                    Selection of risks

 

On March 31, 2016, the main risks that can affect the value of Braskem’s financial instruments are:

 

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

·      Brazilian real/Mexican peso exchange rate;

·      Libor floating interest rate;

·      Selic interest rate;

·      CDI interest rate; and

·      TJLP interest rate.

 

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

(b)                    Value at risk

 

The value at risk of the derivatives held by Braskem which is defined as the loss that could result in one month as from March 31, 2016, with a probability of 5%, and under normal market conditions, was estimated by the Company at US$33,521 for the NCE exchange rate swap (Note 14.2.1(a.i)); and at US$6,987 for the swap of Libor related to Braskem Idesa’s project (Note 14.2.1 (a.ii.i)).

 

(c)                    Selection of scenarios

 

(c.1)       Probable scenario

 

The Market Readout published by the Central Bank of Brazil was used to create the probable scenario for the U.S. dollar/Brazilian real exchange rate, Selic basic interest rate and the CDI interest rate, using the reference date of March 31, 2016. According to the Market Readout, at the end of 2016, the U.S. dollar will appreciate by 16.61% against the Brazilian real, compared to the closing PTAX rate at March 31, 2016, while the Selic rate will be 14.25% p.a. The Selic rate is used as a reference for analyses of sensitivity to the CDI.

 

The probable scenario for the TJLP is an increase of 0.50% from the current rate of 7.5%, in line with the size of the government’s most recent decisions to increase or decrease the rate. The Selic rate in this scenario will remain stable by the end of 2016. The Market Readout does not publish forecasts for the Libor interest rate. Therefore, to determine the probable scenario, Braskem considered a 5% increase on current market levels.

 

 

27

 


 
 

 

Braskem S.A.

 

Notes to the financial statements

at March 31, 2016

All amounts in thousands, unless otherwise stated

 

(c.2)       Possible and extreme adverse scenarios

 

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

    

       

Possible adverse

 

Extreme adverse

Instrument / Sensitivity

 

Probable

(25%)

 

(50%)

             

Brazilian real/U.S. dollar exchange rate

           

Bonds

 

(2,544,201)

 

(3,829,537)

 

(7,659,074)

BNDES

 

(55,357)

 

(83,324)

 

(166,647)

Working capital / structured operations

 

(501,994)

 

(755,602)

 

(1,511,205)

Export prepayments

 

(80,797)

 

(121,616)

 

(243,233)

Project finance

 

(1,893,102)

 

(2,849,502)

 

(5,699,003)

Exchange Agreement Advances

 

(62,498)

 

(94,072)

 

(188,143)

Swaps

 

(322,238)

 

(485,033)

 

(647,828)

Financial investments abroad

 

843,758

 

1,270,026

 

2,540,052

   

Mexican peso/Brazilian real

 

Project finance

 

(8,136)

 

(8,629)

 

(17,258)

   

Selic interest rate

 

BNDES

 

 

 

(97,994)

 

(208,897)

   

Libor floating interest rate

 

Working capital / structured operations

 

(2,212)

 

(11,062)

 

(22,124)

Export prepayments

 

(2,137)

 

(10,686)

 

(21,372)

Swaps

 

(2,773)

 

(13,961)

 

(28,165)

   

CDI interest rate

   

NCE

 

   

(56,270)

 

(117,047)

NCA

 

 

 

(180,248)

 

(389,329)

Swaps NCE

 

 

 

(224)

 

(446)

Financial investments in local currency

 

 

 

61,675

 

122,973

   

 

 

 

 

   

Probable

 

Possible adverse

 

Extreme adverse

Instrument / Sensitivity

 

8.0%

 

8.5%

 

9.0%

             

TJLP interest rate

           

BNDES

 

(53,429)

 

(108,080)

 

(163,975)

Other government agents

 

(59)

 

(119)

 

(181)

 

28

 


 
 

Braskem S.A.

 

Notes to the financial statements

at March 31, 2016

All amounts in thousands, unless otherwise stated

 

15.                   Taxes payable

 

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

  

               

Mar/2016

 

Dec/2015

                   

 

Brazil

                 
 

IPI

           

75,906

 

61,784

 

IR and CSL

           

150,700

 

175,963

 

ICMS

           

206,254

 

149,811

 

Other

           

97,368

 

88,198

                     

Other countries

                 
 

IR

           

247,754

 

238,645

 

Value-added tax

           

62,975

 

56,975

Total

           

840,957

 

771,376

                     

Current liabilities

           

811,383

 

744,660

Non-current liabilities

           

29,574

 

26,716

Total

           

840,957

 

771,376

 

 

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

 

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

 

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

 

  

     

Mar/2016

 

Mar/2015

 

Mar/2014

             

 

Income before IR and CSL

   

997,825

 

379,325

 

569,133

               

IR and CSL at the rate of 34%

   

(339,261)

 

(128,974)

 

(193,505)

               

Permanent adjustments to the IR and CSL calculation basis

             

IR and CSL on equity in results of investees

   

573

 

681

 

(8,057)

Other permanent adjustments

   

87,760

 

(47,040)

 

28,772

               

Effect of IR and CSL on results of operations

   

(250,928)

 

(175,333)

 

(172,790)

               

Breakdown of IR and CSL:

             
               

Current IR and CSL

   

(331,825)

 

(50,302)

 

(53,456)

Deferred IR and CSL

   

80,897

 

(125,031)

 

(119,334)

Total

   

(250,928)

 

(175,333)

 

(172,790)

 

 

29

 


 
 

Braskem S.A.

 

Notes to the financial statements

at March 31, 2016

All amounts in thousands, unless otherwise stated

 

(b)                    Breakdown of deferred income tax and social contribution

 

Assets

 

Mar/2016

 

Dec/2015

Tax losses (IR) and negative base (CSL)

 

1,635,962

 

2,144,798

Goodwill amortized

 

5,669

 

6,017

Exchange variations

 

1,847,995

 

2,925,895

Temporary adjustments

 

763,315

 

50,628

Business combination

 

189,832

 

189,403

Deferred charges - write-off

 

20,848

 

20,848

   

4,463,621

 

5,337,589

         

Liabilities

       

Amortization of goodwill based on future profitability

 

743,505

 

735,019

Tax depreciation

 

835,316

 

815,243

Temporary differences

 

470,409

 

521,030

Business combination

 

208,868

 

217,182

Additional indexation PP&E

 

104,242

 

110,731

Amortization of fair value adjustments on the assets from the acquisiton of Quattor

 

289,528

 

289,528

Other

 

147,781

 

153,590

   

2,799,649

 

2,842,323

         

Net

 

1,663,972

 

2,495,266

         

Presentation in the Balance Sheet:

       

Assets

 

2,363,688

 

3,226,507

(-) Liabilities

 

699,716

 

731,241

 

30

 
 

Braskem S.A.

 

Notes to the financial statements

at March 31, 2016

All amounts in thousands, unless otherwise stated

 

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

 

         

 

 

Mar/2016

         

Headquarters

 

 

 

IR and CSL

 

 

       

(Country)

 

Asset

 

Liability

 

Balance

                     

Assets

                   

Braskem S.A.

     

Brazil

 

3,320,019

 

(1,981,500)

 

1,338,519

Braskem Argentina

     

Argentina

 

12,664

 

 

 

12,664

Braskem Alemanha

     

Germany

 

83,636

 

 

 

83,636

Braskem Idesa

     

Mexico

 

879,419

 

(60,022)

 

819,397

Braskem México Serviços

     

Mexico

 

2,488

 

 

 

2,488

Quantiq

     

Brazil

 

8,564

 

(1,643)

 

6,921

Braskem Petroquímica - business combination effects

 

Brazil

 

100,063

 

 

 

100,063

             

4,406,853

 

(2,043,165)

 

2,363,688

Liabilities

                   

Braskem America

     

USA

 

 

 

(459,163)

 

(459,163)

Braskem Petroquímica

 

Brazil

 

56,601

 

(162,350)

 

(105,749)

Braskem Petroquímica - business combination effects

     

Brazil

 

 

 

(134,802)

 

(134,802)

Petroquímica Chile

     

Chile

 

168

 

(170)

 

(2)

           

56,769

 

(756,485)

 

(699,716)

                       
                       
                       
                       
                       
         

 

 

Dec/2015

         

Headquarters

 

 

 

IR and CSL

 

 

         

(Country)

 

Asset

 

Liability

 

Balance

                       

Assets

                   

Braskem S.A.

     

Brazil

 

4,146,404

 

(1,967,050)

 

2,179,354

Braskem Argentina

     

Argentina

 

8,235

 

 

 

8,235

Braskem Alemanha

     

Germany

 

104,785

 

 

 

104,785

Braskem Idesa

     

Mexico

 

890,723

 

(65,306)

 

825,417

Braskem México Serviços

     

Mexico

 

2,894

 

 

 

2,894

Quantiq

     

Brazil

 

7,811

 

(1,623)

 

6,188

Braskem Petroquímica - business combination effects

Brazil

 

99,634

 

 

 

99,634

             

5,260,486

 

(2,033,979)

 

3,226,507

                       

Liabilities

                   

Braskem America

USA

 

 

 

(509,328)

 

(509,328)

Braskem Petroquímica

     

Brazil

 

76,978

 

(160,812)

 

(83,834)

Braskem Petroquímica - business combination effects

     

Brazil

 

 

 

(138,029)

 

(138,029)

Petroquímica Chile

     

Chile

 

125

 

(175)

 

(50)

             

77,103

 

(808,344)

 

(731,241)

   

(d)                    Realization of deferred income tax and social contribution

           

In the period ended March 31, 2016, there were no material events or circumstances that indicate any compromise of the realization of these deferred taxes.

 

 

31

 


 
 

Braskem S.A.

 

Notes to the financial statements

at March 31, 2016

All amounts in thousands, unless otherwise stated

 

17.                   Sundry provisions

 

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

  

               

Mar/2016

 

Dec/2015

Provision for customers rebates

           

30,600

 

46,929

Provision for recovery of environmental damages

           

114,026

 

127,227

Judicial and administrative provisions

           

580,254

 

554,479

Other

             

18,031

 

19,279

Total

             

742,911

 

747,914

                     

Current liabilities

             

71,512

 

93,942

Non-current liabilities

           

671,399

 

653,972

Total

             

742,911

 

747,914

 

 

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

  

               

Mar/2016

 

Dec/2015

Labor claims

             

164,878

 

158,711

                     

Tax claims

                   

IR and CSL

             

49,512

 

48,252

PIS and COFINS

           

50,724

 

49,266

ICMS - interstate purchases

           

201,759

 

195,320

ICMS - other

             

37,433

 

36,965

Other

             

47,146

 

38,337

                     

Societary claims and other

       

-

 

28,802

 

27,628

               

580,254

 

554,479

 

 

32

 


 
 

Braskem S.A.

 

Notes to the financial statements

at March 31, 2016

All amounts in thousands, unless otherwise stated

 

18.                   Contingencies

 

(a)                    Allegations

 

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

 

In early March 2015, declarations made by defendants in judicial proceedings of a criminal nature were made public, in which Braskem, certain former managers and one former executive were cited in allegations of alleged improper payments in order to benefit the Company in raw-material supply agreements entered into with Petrobras (“Allegations”).

 

In light of such facts, the Company's Management and Board of Directors immediately approved the engagement of law firms with experience in similar cases in the United States and Brazil to conduct an independent internal investigation into the Allegations ("Investigation"). These firms are conducting the Investigation and will report their findings directly to an Ad Hoc committee of the Board of Directors of the Company.  Through said firms, Braskem voluntarily contacted the regulatory agencies of capital markets in Brazil (Securities and Exchange Commission of Brazil - CVM) and the United States (Securities and Exchange Commission – SEC, and the Department of Justice - DOJ) to inform them of the ongoing Investigation. The Company has been cooperating with these agencies and maintaining regular contact therewith through its law firms.  The cooperation between the Company and these agencies includes the voluntary submission of documents to the regulatory agencies, as well as compliance with document requests, including the formal request made by the SEC (subpoena) on February 8, 2016.

 

The Company cannot anticipate the duration or outcome of the Investigation, which could take a significant length of time. The Company cannot anticipate the impact of the Investigation and the actions of authorities on the Company, or the resources required to remedy any occurrences. The scope of the Investigation may be expanded to include other matters. The Company cannot forecast the actions said authorities may take, which may include lawsuits brought against the Company or even against current or former officers, directors and employees. Moreover, the authorities with jurisdiction over the Company may impose financial penalties if the Investigation, or a concurrent investigation by authorities, find evidence of unlawful conduct. The financial exposure of the Company may be subject to obligations to indemnify, observing the legal limits, current and former officers, directors and employees for any losses incurred as a result of actions carried out on behalf of the Company, including reimbursement for attorneys’ fees.  Additionally, the negative publicity of the Investigation and any potential regulatory sanctions may have a material adverse impact on our businesses, including reducing the demand for our products.  Therefore, the Investigation and any concurrent investigation by the applicable authorities, as well as the class action mentioned below, may have a material adverse impact on our businesses, our reputation, financial condition, results of our operations, liquidity and price of any securities issued by the Company.

 

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

 

 

33

 


 
 

 

Braskem S.A.

 

Notes to the financial statements

at March 31, 2016

All amounts in thousands, unless otherwise stated

 

 

(b)                    Class actions

 

A class action has been filed in the U.S. courts by the Boilermaker-Blacksmith National Pension Trust, as Lead Plaintiff, alleging the Company has made misrepresentations and/or failed to disclose through its SEC filings the existence of unlawful payments. The Company has engaged an expert U.S. law firm to represent it and the Lead Plaintiff is expected to present its amended initial pleading by May 19, 2016.

 

The Company cannot foresee the outcome of this process.  The Company may be cited as defendant in other legal actions. Furthermore, the Company is generally required to, observing the legal limits, indemnify directors, officers and employees that are defendants in actions of this nature.  Said action requires significant time and dedication of the Management of the Company. The Company may also incur financial obligations that may have a material adverse impact on its financial condition and the results of its operations.

 

(c)                    Labor

 

(c.1)       The labor action mentioned in Note 23(a.i) of the 2015 financial statements ended through a settlement between the parties.

 

(c.2)       In the class action suits filed by the Trade Union of Petrochemical and Chemical Workers of Triunfo, Rio Grande do Sul, in the third quarter of 2010, claiming the payment of overtime related to breaks during work shifts and the inclusion of overtime in the calculation of the weekly remunerated rest, in the restated amount of R$369,895, the following developments occurred: (i) the Superior Labor Court (“TST”) upheld the appeal by Braskem to eliminate breaks during work shifts, with the Trade Union filing an appeal at the TST, where it is pending trial; and (ii) judgment for plaintiff in the suit involving the inclusion of overtime in the calculation of the weekly remunerated rest, which was upheld by the Regional Appellate Labor Court ("TRT"), for which Braskem appealed to the TST, which ordered the case to be sent back to the TRT for a new trial. However, as the TRT did not judge on the merits, Braskem appealed once again to the TST.

 

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

 

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

 

19.                   Shareholders’ Equity

 

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

 

(a)                    Capital

 

34

 


 
 

Braskem S.A.

 

Notes to the financial statements

at March 31, 2016

All amounts in thousands, unless otherwise stated

 

 

             

Preferred

     

Preferred

           
     

Common

     

shares

     

shares

           
     

shares

 

%

 

class A

 

%

 

class B

 

%

 

Total

 

%

                                   

OSP and Odebrecht

 

 

226,334,623

 

50.11%

 

79,182,498

 

22.95%

   

305,517,121

 

38.32%

Petrobras

 

 

212,426,952

 

47.03%

 

75,753,239

 

21.96%

   

288,180,191

 

36.15%

ADR

(i)

   

26,859,246

 

7.79%

   

26,859,246

 

3.37%

Other

 

 

12,907,077

 

2.86%

 

161,973,237

 

46.95%

 

593,618

 

100.00%

 

175,473,932

 

22.01%

Total

 

 

451,668,652

 

100.00%

 

343,768,220

 

99.65%

 

593,618

 

100.00%

 

796,030,490

 

99.85%

Braskem shares owned by subsidiary
of Braskem Petroquímica

(ii)

   

1,234,758

 

0.35%

   

1,234,758

 

0.15%

Total

   

451,668,652

 

100.00%

 

345,002,978

 

100.00%

 

593,618

 

100.00%

 

797,265,248

 

100.00%

 

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

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

 

(b)                    Stock buyback programs

 

On February 11, 2015, Braskem’s Board of Directors approved the fifth program for the repurchase of shares effective for the period between February 19, 2015 and February 19, 2016, through which the Company may acquire up 3,500,000 class A preferred shares at market price.

 

Only one repurchase was made under this program, on March 11, 2015, at the average price of R$11.58.

 

35

 


 
 

 

Braskem S.A.

 

Notes to the financial statements

at March 31, 2016

All amounts in thousands, unless otherwise stated

 

(c)                    Other comprehensive income - shareholders' equity

  

   

Attributed to shareholders' interest

       
           

Defined

         

Foreign

               
   

Additional

 

Deemed

 

benefit

 

Foreign

     

currency

 

Gain (loss)

 

Total

       
   

indexation of

 

cost of

 

plans actuarial

 

sales

 

Fair value

 

translation

 

on interest

 

Braskem

 

Non-controlling

   
   

PP&E

 

PP&E

 

loss

 

hedge

 

of hedge

 

adjustment

 

in subsidiary

 

shareholders'

 

interest in

   
   

(i)

 

(i)

 

(ii)

 

(iii)

 

(iii)

 

(iv)

 

(v)

 

interest

 

Braskem Idesa

 

Total

As of December 31, 2013

 

272,069

19,240

 

(11,647)

 

(1,520,336)

 

(85,020)

 

242,407

 

(9,404)

 

(1,092,691)

 

14,860

 

(1,077,831)

   

Additional indexation

 

Realization by depreciation or write-off assets

 

(10,317)

 

(10,317)

     

(10,317)

Income tax and social contribution

 

3,507

3,507

     

3,507

     

 

       

Deemed cost of jointly-controlled investment

 

Realization by depreciation or write-off assets

 

 

(366)

(366)

     

(366)

Income tax and social contribution

 

 

125

125

     

125

       

 

       

Foreign sales hedge

               

Exchange rate

 

537,876

   

537,876

     

537,876

Income tax and social contribution

 

(182,878)

   

(182,878)

     

(182,878)

     
     

Fair value of Cash flow hedge

   

Change in fair value

   

8,431

8,431

 

(5,014)

 

3,417

Transfer to profit or loss

   

1,217

1,217

     

1,217

Income tax and social contribution

   

(8,395)

(8,395)

     

(8,395)

                 

Foreign currency translation adjustment

       

(46,134)

 

 

 

(46,134)

 

(3,535)

 

(49,669)

                                   

On March 31, 2014

 

265,259

18,999

 

(11,647)

 

(1,165,338)

 

(83,767)

 

196,273

 

(9,404)

 

(789,625)

 

6,311

 

(783,314)

                                       

On December 31, 2014

 

244,831

18,275

 

(11,647)

 

(3,263,732)

 

(289,667)

 

387,287

 

(9,404)

 

(2,924,057)

 

(115,385)

 

(3,039,442)

                                       

Additional indexation

                                   

Realization by depreciation or write-off assets

 

(10,317)

 

(10,317)

   

(10,317)

Income tax and social contribution

 

3,507

 

3,507

   

3,507

               

Deemed cost of jointly-controlled investment

             

Realization by depreciation or write-off assets

 

 

(365)

   

(365)

   

(365)

Income tax and social contribution

 

 

124

   

124

   

124

             

Foreign sales hedge

                           

Exchange rate

   

(4,013,139)

   

(4,013,139)

 

(94,833)

 

(4,107,972)

Income tax and social contribution

   

1,320,976

   

1,320,976

 

17,746

 

1,338,722

                 

Fair value of Cash flow hedge

                   

Change in fair value

   

(347,224)

   

(347,224)

 

(10,032)

 

(357,256)

Transfer to profit or loss

   

(22,911)

   

(22,911)

 

(9,536)

 

(32,447)

Income tax and social contribution

   

118,696

   

118,696

 

4,270

 

122,966

                   

Foreign currency translation adjustment

     

419,359

 

419,359

 

18,399

 

437,758

                     

On March 31, 2015

 

238,021

18,034

 

(11,647)

 

(5,955,895)

 

(541,106)

 

806,646

 

(9,404)

 

(5,455,351)

 

(189,371)

 

(5,644,722)

 

36

 


 
 

Braskem S.A.

 

Notes to the financial statements

at March 31, 2016

All amounts in thousands, unless otherwise stated

 

 

     

Attributed to shareholders' interest

       
             

Defined

         

Foreign

               
     

Additional

 

Deemed

 

benefit

 

Foreign

     

currency

 

Gain (loss)

 

Total

       
     

indexation of

 

cost of

 

plans actuarial

 

sales

 

Fair value

 

translation

 

on interest

 

Braskem

 

Non-controlling

   
     

PP&E

 

PP&E

 

loss

 

hedge

 

of hedge

 

adjustment

 

in subsidiary

 

shareholders'

 

interest in

   
     

(i)

 

(i)

 

(ii)

 

(iii)

 

(iii)

 

(iv)

 

(v)

 

interest

 

Braskem Idesa

 

Total

                                           

On December 31, 2015

 

217,595

 

17,309

 

(12,496)

 

(9,666,973)

 

(728,296)

 

1,097,009

 

(9,404)

 

(9,085,256)

 

(476,708)

 

(9,561,964)

                                           

Additional indexation

                                     
 

Realization by depreciation or write-off assets

 

(10,317)

   

(10,317)

   

(10,317)

 

Income tax and social contribution

 

3,508

   

3,508

   

3,508

                 

Deemed cost of jointly-controlled investment

             
 

Realization by depreciation or write-off assets

   

(365)

   

(365)

   

(365)

 

Income tax and social contribution

   

124

   

124

   

124

               

Foreign sales hedge

                           
 

Exchange rate

   

2,085,737

 

2,085,737

 

(44,931)

 

2,040,806

 

Transfer to profit or loss

   

421,800

 

421,800

 

 

 

421,800

 

Income tax and social contribution

   

(857,954)

 

(857,954)

 

13,479

 

(844,475)

                             

Fair value of Cash flow hedge

                 
 

Change in fair value

   

53,931

 

53,931

 

(27,812)

 

26,119

 

Transfer to profit or loss

   

1,904

 

1,904

 

(105)

 

1,799

 

Income tax and social contribution

   

(22,334)

 

(22,334)

 

8,375

 

(13,959)

                     

Fair value of cash flow hedge from jointly-controlled

   

(10,004)

 

(10,004)

 

 

 

(10,004)

                     

Foreign currency translation adjustment

   

 

 

(135,991)

   

(135,991)

 

71,359

 

(64,632)

                           

On March 31, 2016

 

210,786

 

17,068

 

(12,496)

 

(8,017,390)

 

(704,799)

 

961,018

 

(9,404)

 

(7,555,217)

 

(456,343)

 

(8,011,560)

 

 

37

 


 
 

Braskem S.A.

 

Notes to the financial statements

at March 31, 2016

All amounts in thousands, unless otherwise stated

 

20.                   Earnings per share

 

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

 

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

 

       

Basic and diluted

       

Mar/2016

 

Mar/2015

 

Mar/2014

                 

Profit for the period attributed to Company's shareholders

     

774,734

 

251,403

 

405,306

                 

Distribution of dividends attributable to priority:

               

Preferred shares class "A"

     

208,409

 

208,409

 

208,437

Preferred shares class "B"

     

360

 

360

 

360

       

208,769

 

208,769

 

208,797

                 

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

     

273,824

 

42,634

 

196,509

                 

Distribution of plus income, by class:

               

Common shares

     

165,885

 

Preferred shares class "A"

     

126,256

 
       

292,141

 
                 

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

             

Common shares

     

439,709

 

42,634

 

196,509

Preferred shares class "A"

     

334,665

 

208,409

 

208,437

Preferred shares class "B"

     

360

 

360

 

360

       

774,734

 

251,403

 

405,306

                 

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

               

Common shares

     

451,668,652

 

451,668,652

 

451,668,652

Preferred shares class "A"

     

343,768,220

 

343,830,342

(i)

343,848,120

Preferred shares class "B"

     

593,618

 

593,818

 

593,818

       

796,030,490

 

796,092,812

 

796,110,590

                 

Profit per share (in R$)

               

Common shares

     

0.9735

 

0.0944

 

0.4351

Preferred shares class "A"

     

0.9735

 

0.6061

 

0.6062

Preferred shares class "B"

     

0.6065

 

0.6062

 

0.6062

 

 

(i)         Calculation of weighted average of outstanding shares at the beginning of the period, adjusted by the number of shares repurchased during the period ended March 31, 2015, multiplied by a weighted time factor:

 

     

Preferred shares class "A"

     

Outstanding

 

Weighted

 

Note

 

shares

 

average

 

 

 

 

 

 

Balance at December 31, 2014

 

 

343,848,120

 

343,848,120

 

 

 

 

 

 

Repurchase of treasury shares

19(b)

 

(80,000)

 

(17,778)

 

 

 

 

 

 

Balance at March 31, 2015

 

 

343,768,120

 

343,830,342

 

38

 
 

Braskem S.A.

 

Notes to the financial statements

at March 31, 2016

All amounts in thousands, unless otherwise stated

 

21.                   Net sales revenues

 

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

 

       

Mar/2016

 

Mar/2015

 

Mar/2014

                 

Sales revenue

             

Domestic market

   

8,337,765

 

7,674,427

 

8,505,375

Foreign market

   

5,800,842

 

4,264,711

 

5,125,059

       

14,138,607

 

11,939,138

 

13,630,434

Sales deductions

             

Taxes

   

(1,861,544)

 

(1,673,392)

 

(1,688,017)

Sales returns

   

(105,122)

 

(70,424)

 

(99,791)

       

(1,966,666)

 

(1,743,816)

 

(1,787,808)

                 

Net sales revenue

   

12,171,941

 

10,195,322

 

11,842,626

 

22.                   Financial results

    

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

 

 

           

Mar/2016

 

Mar/2015

 

Mar/2014

                     

Financial income

                 
 

Interest income

       

112,850

 

152,115

 

52,124

 

Monetary variations

     

41,514

 

38,705

 

16,719

 

Exchange rate variations

     

(430,911)

 

402,395

 

(60,899)

 

Other

       

13,432

 

10,108

 

8,939

           

(263,115)

 

603,323

 

16,883

                     

Financial expenses

                 
 

Interest expenses

       

(425,457)

 

(422,194)

 

(306,859)

 

Monetary variations

     

(105,034)

 

(84,778)

 

(85,866)

 

Exchange rate variations

     

(425,773)

 

(451,495)

 

53,865

 

Monetary variations on fiscal debts

     

(27,613)

 

(8,918)

 

(30,425)

 

Tax expenses on financial operations

               
 

Discounts granted

       

(20,863)

 

(48,056)

 

(31,293)

 

Loans transaction costs - amortization

     

(15,100)

 

(20,450)

 

(6,777)

 

Adjustment to present value - appropriation

     

(138,159)

 

(111,731)

 

(141,992)

 

Other

       

(54,291)

 

(44,480)

 

(27,681)

           

(1,212,290)

 

(1,192,102)

 

(577,028)

                     
 

Total

       

(1,475,405)

 

(588,779)

 

(560,145)

 

39

 


 
 

Braskem S.A.

 

Notes to the financial statements

at March 31, 2016

All amounts in thousands, unless otherwise stated

 

 

       

Mar/2016

 

Mar/2015

 

Mar/2014

                 

Interest income

               

Held for sale

     

4,415

 

22,362

 

373

Loans and receivables

   

93,608

 

52,932

 

32,759

Held-to-maturity

     

8,514

 

8,317

 

8,558

       

106,537

 

83,611

 

41,690

Other assets not classifiable

   

6,313

 

68,504

 

10,434

Total

     

112,850

 

152,115

 

52,124

 

23.                   Expenses by nature

 

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

 

         

Mar/2016

 

Mar/2015

 

Mar/2014

                   

Classification by nature:

             
 

Raw materials other inputs

   

(7,286,714)

 

(7,141,820)

 

(8,939,861)

 

Personnel expenses

   

(637,648)

 

(552,904)

 

(530,148)

 

Outsourced services

   

(469,769)

 

(381,240)

 

(418,358)

 

Tax expenses

   

(3,686)

 

(3,120)

 

(3,257)

 

Depreciation, amortization and depletion

   

(582,819)

 

(518,805)

 

(501,105)

 

Freights

   

(503,801)

 

(429,418)

 

(386,191)

 

Other expenses, net

   

(215,961)

 

(201,914)

 

65,578

 

Total

   

(9,700,398)

 

(9,229,221)

 

(10,713,342)

                   

Classification by function:

             
 

Cost of products sold

   

(8,924,605)

 

(8,590,489)

 

(10,324,626)

 

Selling and distribution

   

(319,877)

 

(261,924)

 

(269,509)

 

General and administrative

   

(348,717)

 

(297,096)

 

(275,014)

 

Research and development

   

(42,594)

 

(39,819)

 

(34,142)

 

Other operating income (expenses), net

     

(64,605)

 

(39,893)

 

189,949

 

Total

   

(9,700,398)

 

(9,229,221)

 

(10,713,342)

 

 

 

40

 


 
 

Braskem S.A.

 

Notes to the financial statements

at March 31, 2016

All amounts in thousands, unless otherwise stated

 

24.                   Segment information

 

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

 

     

 

 

 

 

 

 

 

 

 

 

 

 

Mar/2016

                 

Operating expenses

   
     

Net

 

Cost of

     

Selling, general

 

Results from

 

Other operating

   
     

sales

 

products

 

Gross

 

and distribution

 

equity

 

income

 

Operating

     

revenue

 

sold

 

profit

 

expenses

 

investments

 

(expenses), net

 

profit (loss)

Reporting segments

                           
 

Basic petrochemicals

 

5,949,856

 

(4,814,505)

 

1,135,351

 

(154,698)

   

(32,526)

 

948,127

 

Polyolefins

 

5,091,772

 

(4,048,606)

 

1,043,166

 

(313,602)

   

(12,163)

 

717,401

 

Vinyls

 

746,358

 

(676,611)

 

69,747

 

(55,398)

   

64

 

14,413

 

USA and Europe

 

2,534,641

 

(1,623,713)

 

910,928

 

(122,818)

   

1,978

 

790,088

 

Chemical distribution

 

213,909

 

(168,940)

 

44,969

 

(34,257)

   

1,691

 

12,403

Total

 

14,536,536

 

(11,332,375)

 

3,204,161

 

(680,773)

   

(40,956)

 

2,482,432

   

 

                       

Other segments

(i)

171,134

 

(165,421)

 

5,713

 

(31,444)

 

 

 

(3,332)

 

(29,063)

Corporate unit

 

 

(19,834)

 

1,687

 

(20,317)

 

(38,464)

   

 

                         

Braskem consolidated before
eliminations and reclassifications

 

14,707,670

 

(11,497,796)

 

3,209,874

 

(732,051)

 

1,687

 

(64,605)

 

2,414,905

   

 

                         

Eliminations and reclassifications

 

(2,535,729)

 

2,573,191

 

37,462

 

20,863

   

58,325

   

 

                         

Total

 

12,171,941

 

(8,924,605)

 

3,247,336

 

(711,188)

 

1,687

 

(64,605)

 

2,473,230

   

 

                         
   

 

                         
   

 

 

 

 

 

 

 

 

 

 

 

 

 

Mar/2015

   

 

           

Operating expenses

   
   

 

Net

 

Cost of

     

Selling, general

 

Results from

 

Other operating

   
   

 

sales

 

products

 

Gross

 

and distribution

 

equity

 

income

 

Operating

   

 

revenue

 

sold

 

profit

 

expenses

 

investments

 

(expenses), net

 

profit (loss)

Reporting segments

 

                         
 

Basic petrochemicals

 

5,100,026

 

(4,629,944)

 

470,082

 

(157,188)

   

(6,583)

 

306,311

 

Polyolefins

 

4,605,943

 

(3,714,139)

 

891,804

 

(277,232)

   

(6,302)

 

608,270

 

Vinyls

 

639,826

 

(599,738)

 

40,088

 

(51,116)

   

4,837

 

(6,191)

 

USA and Europe

 

1,751,244

 

(1,582,825)

 

168,419

 

(88,981)

   

 

 

79,438

 

Chemical distribution

 

193,009

 

(152,199)

 

40,810

 

(30,156)

   

148

 

10,802

Total

 

12,290,048

 

(10,678,845)

 

1,611,203

 

(604,673)

   

(7,900)

 

998,630

   

 

                       

Other segments

(i)

106,689

 

(77,189)

 

29,500

 

(51,853)

   

(1,750)

 

(24,103)

Corporate unit

 

 

9,631

 

2,003

 

(30,243)

 

(18,609)

   

 

                         

Braskem consolidated before
eliminations and reclassifications

 

12,396,737

 

(10,756,034)

 

1,640,703

 

(646,895)

 

2,003

 

(39,893)

 

955,918

   

 

                         

Eliminations and reclassifications

 

(2,201,415)

 

2,165,545

 

(35,870)

 

48,056

   

12,186

   

 

                         

Total

 

10,195,322

 

(8,590,489)

 

1,604,833

 

(598,839)

 

2,003

 

(39,893)

 

968,104

   

 

                         
   

 

 

 

 

 

 

 

 

 

 

 

 

 

Mar/2014

   

 

           

Operating expenses

   
   

 

Net

 

Cost of

     

Selling, general

 

Results from

 

Other operating

   
   

 

sales

 

products

 

Gross

 

and distribution

 

equity

 

income

 

Operating

   

 

revenue

 

sold

 

profit

 

expenses

 

investments

 

(expenses), net

 

profit (loss)

Reporting segments

 

                         
 

Basic petrochemicals

 

6,638,139

 

(5,993,749)

 

644,390

 

(151,098)

   

217,528

(ii)

710,820

 

Polyolefins

 

4,529,089

 

(3,807,709)

 

721,380

 

(233,081)

   

(7,609)

 

480,690

 

Vinyls

 

699,563

 

(645,765)

 

53,798

 

(43,075)

   

1,746

 

12,469

 

USA and Europe

 

2,042,039

 

(1,914,377)

 

127,662

 

(78,459)

   

2,795

 

51,998

 

Chemical distribution

 

231,348

 

(193,567)

 

37,781

 

(24,159)

   

(3,070)

 

10,552

Total

 

14,140,178

 

(12,555,167)

 

1,585,011

 

(529,872)

   

211,390

 

1,266,529

   

 

                       

Other segments

(i)

56,599

 

(56,912)

 

(313)

 

(15,423)

   

784

 

(14,952)

Corporate unit

 

 

(64,663)

 

(6)

 

(22,225)

 

(55,601)

   

 

                         

Braskem consolidated before
eliminations and reclassifications

 

14,196,777

 

(12,612,079)

 

1,584,698

 

(609,958)

 

(6)

 

189,949

 

1,195,976

   

 

                         

Eliminations and reclassifications

 

(2,354,151)

 

2,287,453

 

(66,698)

 

31,293

   

(66,698)

   

 

                         

Total

 

11,842,626

 

(10,324,626)

 

1,518,000

 

(578,665)

 

(6)

 

189,949

 

1,129,278

   

(i)         This segment includes the results of the subsidiary Braskem Idesa.

(ii)       Includes gain from sale of DAT.

41

 


 
 

Braskem S.A.

 

Notes to the financial statements

at March 31, 2016

All amounts in thousands, unless otherwise stated

 

25.                   Subsequent events

 

On April 6, 2016, the Annual Shareholders’ Meeting approved the payment of dividends for the fiscal year ended December 31, 2015, in the amount of R$1,000,000, which will be paid as from April 15, 2016.

 

Additionally, on the same date, Braskem Idesa produced the first batch of polyethylene in the Petrochemical Complex in Mexico. The plant’s commissioning began in December 2015 with the startup of the utilities area, followed by the cracker in March 2016. Over the coming months, the goal is to ramp up operations to reach the complex’s annual polyethylene production capacity of 1.05 million tons.

 

26.                   Information related to guaranteed securities issued by subsidiaries

 

Braskem S.A. has fully and unconditionally guaranteed the debt securities issued by Braskem Finance, Braskem America Finance and Braskem Holanda 100-percent-owned subsidiaries of Braskem. There are no significant restrictions on the ability of Braskem to obtain funds from these subsidiaries.

 

42

 

 

SIGNATURES

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

Date: May 9, 2016
  BRASKEM S.A.
       
       
  By:      /s/     Pedro van Langendonck Teixeira de Freitas
   
    Name: Pedro van Langendonck Teixeira de Freitas
    Title: Chief Financial Officer

 

FORWARD-LOOKING STATEMENTS

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