companhia mineira de açúcar e Álcool...
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Companhia Mineira de Açúcar e Álcool Participações
Quarterly Information - ITR
at June 30, 2020
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Contents Independent auditor’s review report on quarterly information 1
Statements of financial position 3
Statements of profit or loss 5
Statements of comprehensive income (loss) 6
Statements of changes in equity 7
Statements of cash flows - indirect method 8
Statements of value added 9
Notes to quarterly information 10
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Ed. Walk Bueno Business Rua T-55 esq. Com T-30, 930 - 11o Andar Setor Bueno 74,215-17 – Goiânia, GO, Brasil Tel: +55 62 3605 1100 www.ey.com.br
A free translation from Portuguese into English of Independent auditor’s review report on quarterly information prepared in Brazilian currency in accordance with the Brazilian and international standards on review engagements (NBC TR 2410 and ISRE 2410) and with the rules issued by the Brazilian Securities and Exchange Commission (CVM) applicable to the preparation of Quarterly Information Form (ITR)
Independent auditor’s review report on quarterly information To the Shareholders, Board of Directors and Officers of Companhia Mineira de Açúcar e Álcool Participações Uberaba - MG Introduction We have reviewed the accompanying individual and consolidated interim financial information of Companhia Mineira de Açúcar e Álcool Participações (“Company”), contained in the Quarterly Information Form (ITR) for the quarter ended June 30, 2020, comprising the statement of financial position as of June 30, 2020 and the related statements of profit or loss, of comprehensive income, of changes in equity and of cash flows for the three-month period then ended, including the explanatory notes. Management is responsible for preparation of the individual and consolidated interim financial information in accordance with Accounting Pronouncement NBC TG 21 - Interim Financial Reporting and IAS 34 - Interim Financial Reporting issued by the International Accounting Standards Board (IASB), as well as for the presentation of this information in conformity with the rules issued by the Brazilian Securities and Exchange Commission (CVM) applicable to the preparation of the Quarterly Information Form (ITR). Our responsibility is to express a conclusion on this interim financial information based on our review.
Scope of review We conducted our review in accordance with Brazilian and international standards on review engagements (NBC TR 2410 and ISRE 2410 - Review of Interim Financial Information Performed by the Independent Auditor of the Entity, respectively). A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with auditing standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. Conclusion on the individual and consolidated interim financial information Based on our review, nothing has come to our attention that causes us to believe that the accompanying individual and consolidated interim financial information included in the quarterly information referred to above were not prepared, in all material respects, in accordance with NBC TG 21 and IAS 34 applicable to the preparation of Quarterly Information Form (ITR), and presented consistently with the rules issued by the Brazilian Securities and Exchange Commission (CVM).
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2
Other matters Statements of value added The abovementioned quarterly information include the individual and consolidated statement of value added (SVA) for the three-month period ended June 30, 2020, prepared under Company’s Management responsibility and presented as supplementary information by IAS 34. These statements have been subject to review procedures performed together with the review of the quarterly information with the objective to conclude whether they are reconciled to the interim financial information and accounting records, as applicable, and if its format and content are in accordance with the criteria set forth by NBC TG 09 – Statement of Value Added. Based on our review, nothing has come to our attention that causes us to believe that they were not prepared, in all material respects, consistently with overall individual and consolidated interim financial information. Goiânia, August 28, 2020.
Wagner dos Santos Junior
Partner - Accountant - CRC-1SP-216386/O-T
ERNST & YOUNG Auditores Independentes S.S. CRC-2SP015199/O-6
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Consolidated Individual
Assets Note 06/30/2020 03/31/2020 06/30/2020 03/31/2020
Cash and cash equivalents 3 202,419 453,310 14 93
Short-term investments 4 - 71 - -
Trade accounts receivable and other receivables 5 101,939 43,456 - -
Leases receivable 6 59,616 51,380 - -
Inventories 7 200,397 56,854 - -
Advances to suppliers and other assets 10 28,438 26,566 94 94
Biological assets 8 126,198 109,876 - -
Taxes and contributions recoverable 9 13,750 9,746 182 182
Derivative financial instruments 20 98,605 124,898 - -
Dividends receivable 11 - - 3,138 3,138
Total current assets 831,362 876,157 3,428 3,507
Noncurrent assets
Short-term investments 4 16,175 16,057 - -
Trade accounts receivable and other receivables 5 73,859 20,796 293 292
Leases receivable 6 84,082 145,454 - -
Advances to suppliers and other assets 10 1,005 1,380 - -
Judicial deposits 2,163 1,719 21 21
Taxes and contributions recoverable 9 29,263 28,710 66 66
Derivative financial instruments 20 51,956 178,711 - -
Deferred income and social contribution taxes 21 103,575 62,441 - -
Total noncurrent assets 362,078 455,268 380 379
Investments 11 2,537 2,541 279,818 333,964
Property, plant and equipment 12 766,755 761,325 - -
Intangible assets 5,992 5,883 722 722
Right of use 13 249,084 254,634 - -
Total noncurrent assets 1,386,446 1,479,651 280,920 335,065
Total assets 2,217,808 2,355,808 284,348 338,572
A free translation from Portuguese into English of quarterly information prepared in Brazilian currency in accordance with the Brazilian and international standards on review engagements (NBC TR 2410 and ISRE 2410)
Companhia Mineira de Açúcar e Álcool Participações Statements of financial position at June 30 and March 31, 2020
(In thousands of Reais)
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4
Consolidated Individual
Liabilities Note 06/30/2020 03/31/2020 06/30/2020 03/31/2020
Loans and financing 0 241,258 244,548 - -
Derivative financial instruments 20 170,704 122,838 - -
Trade accounts payable and other payables 15 111,729 92,582 - 71
Leases and agricultural partnerships payable 16 42,205 66,913 - -
Provisions and labor charges 37,340 25,022 - -
Tax obligations 14,237 10,676 5,245 5,238
Advances from customers 17 29,262 14,379 1 1
Other current liabilities 373 6 83 84
Total current liabilities 647,108 576,964 5,329 5,394
Trade accounts payable and other payables 15 1,038 - - -
Loans and financing 0 747,690 782,054 - -
Intercompany loans 0 - 11,062 7,441 7,214
Derivative financial instruments 20 155,521 214,024 - -
Leases and agricultural partnerships payable 16 283,844 332,637 - -
Other noncurrent liabilities 5,753 5,753 - -
Advances from customers 17 101,873 103,974 - -
Provisions for contingencies 18 3,403 3,376 - -
Total noncurrent liabilities 1,299,122 1,452,880 7,441 7,214
Equity 19
Capital 379,239 379,239 379,239 379,239
Capital reserve 4,164 4,164 4,164 4,164
Equity adjustment (143,240) (46,868) (143,240) (46,868)
Retained earnings (accumulated losses) 31,415 (10,571) 31,415 (10,571)
Total equity 271,578 325,964 271,578 325,964
Total liabilities 1,946,230 2,029,844 12,770 12,608
Total liabilities and equity 2,217,808 2,355,808 284,348 338,572
See accompanying notes.
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Companhia Mineira de Açúcar e Álcool Participações Statements of profit or loss Three-month periods ended June 30, 2020 and 2019
(In thousands of Reais, except for earnings per share)
Consolidated Individual
Note 06/30/2020 06/30/2019 06/30/2020 06/30/2019
Net operating revenue 23 270,310 262,797 - -
Changes in fair value of biological assets 8 30,367 274 - -
Costs of sales and services 24 (197,332) (212,043) - -
Gross profit 103,345 51,028 - -
Operating expenses Selling expenses 24 (19,434) (10,343) - -
Administrative expenses 24 (7,986) (7,252) (213) (326)
Other operating income (expenses), net (1,884) (79) - -
Equity pickup 11 (4) - 42,227 4,677
(29,308) (17,674) 42,014 4,351
Income (loss) before net finance income (costs),
and taxes 74,037 33,354 42,014 4,351
Finance costs 25 (94,944) (53,446) (29) (32)
Finance income 25 74,527 27,637 1 1
Finance income (costs), net (20,417) (25,809) (28) (31)
Income before taxes 53,620 7,545 41,986 4,320 Current income and social contribution taxes 21 (2,790) - - -
Deferred income and social contribution taxes 21 (8,844) (3,225) - -
(11,634) (3,225) - -
Net income for the period
41,986 4,320
41,986 4,320
Basic and diluted earnings per share (in reais) 26 0.0395 0.0041
See accompanying notes.
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Companhia Mineira de Açúcar e Álcool Participações
Statements of comprehensive income (loss)
Three-month periods ended June 30, 2020 and 2019
(In thousands of Reais)
Consolidated Individual
06/30/2020 06/30/2019 06/30/2020 06/30/2019
Net income for the period 41,986 4,320 41,986 4,320
Net gains (losses) from cash flow hedge in subsidiaries/investees (96,372) 6,391 (96,372) 6,391
Total comprehensive income (loss) (54,386) 10,711 (54,386) 10,711
See accompanying notes.
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Companhia Mineira de Açúcar e Álcool Participações Statements of changes in equity
Three-month periods ended June 30, 2020 and 2019 (In thousands of Reais)
Capital
Capital
reserve
Equity
adjustment
Retained
earnings
(accumulated
losses)
Total
equity
Balance at April 1, 2019 379,239 4,164 (17,476) (73,242) 292,685
Net losses on cash flow hedge - - 6,391 - 6,391
Net income for the period - - - 4,320 4,320
Balance at June 30, 2019 379,239 4,164 (11,085) (68,922) 303,396
Balance at April 1, 2020 379,239 4,164 (46,868) (10,571) 325,964
Net losses on cash flow hedge - - (96,372) - (96,372)
Net income for the period - - - 41,986 41,986
Balance at June 30, 2020 379,239 4,164 (143,240) 31,415 271,578
See accompanying notes.
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Companhia Mineira de Açúcar e Álcool Participações Statements of cash flows - indirect method
Three-month periods ended June 30, 2020 and 2019 (In thousands of Reais)
Consolidated Individual
06/30/2020 06/30/2019 06/30/2020 06/30/2019
Cash flow from operating activities
Income for the period 41,986 4,320 41,986 4,320
Adjustments to reconcile P&L:
Present value adjustment 4,632 3,852 - -
Changes in fair value of biological assets (30,367) (274) - -
Depreciation and amortization 14,451 13,965 - -
Amortization of the right of use on leases and agricultural partnerships 6,734 13,305 - -
Reduction in crop due to sugarcane harvest 19,400 20,560 - -
Amortization of intercrop 35,282 25,807 - -
Amortization of ratoon cane treatments 35,984 30,555 - -
Equity pickup 4 - (42,227) (4,677)
Residual value of property, plant and equipment written off 6 1,162 - -
Interest on loans and financing 12,886 20,224 - -
Interest and Tax on Financial Transactions (IOF) on receivables from
related parties 1,235 2,892 - -
Unrealized foreign exchange differences and monetary restatement on
loans 4,794 (1,458) - -
Reversal of provision for obsolescence (1,601) - - -
Unrealized gains (losses) on derivative financial instruments (3,939) 2,934 - -
Provision for contingencies and other liabilities 27 492 - 2
Deferred income and social contribution taxes 8,844 3,225 - -
150,358 141,561 (241) (355)
(Increase) decrease in trade accounts receivable and other receivables (59,240) (17,693) (1) -
Decrease (increase) in inventories (141,942) (79,231) - -
Decrease (increase) in taxes and contributions recoverable (4,557) 5,113 - -
Decrease (increase) in advances to suppliers and other assets 6,553 (646) - 32
(Decrease) increase in trade accounts payable and other payables 20,185 24,543 (71) -
(Decrease) increase in provisions and labor charges 12,318 6,255 - -
(Decrease) increase in tax obligations 3,561 454 7 -
(Decrease) increase in advances from customers 12,782 (32,462) - -
Other assets and other liabilities 352 690 - (15)
Cash from (used in) operating activities 370 48,584 (306) (338)
Payment of interest on loans and financing (19,178) (21,712) -
Cash flow from (used in) operating activities (18,808) 26,872 (306) (338)
Cash flow from investing activities
Restricted short-term investments (47) (3,299) - -
Formation of biological assets (21,939) (15,593) - -
Proceeds from disposal of property, plant and equipment 9 230 - -
Acquisition of property, plant and equipment (73,810) (50,223) - -
Acquisition of intangible assets (109) (71) - -
Intercompany loans received (granted) (53,956) (56,436) 341
Cash from (used in) investing activities (149,852) (125,392) - 341
Cash flow from financing activities
Loans and financing taken out 23,560 - - -
Repayment of principal of loans and financing (59,716) (72,459) - -
Intercompany loans (paid)/taken out (11,062) - 227 -
(Payment) of leases and agricultural partnerships (35,013) (18,687) - -
Cash from (used in) financing activities (82,231) (91,146) 227 -
Net increase (decrease) in cash and cash equivalents (250,891) (189,666) (79) 3
Cash and cash equivalents at beginning of period 453,310 381,350 93 11
Cash and cash equivalents at end of period 202,419 191,684 14 14
See accompanying notes.
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Companhia Mineira de Açúcar e Álcool Participações Statements of value added
Three-month periods ended June 30, 2020 and 2019
(In thousands of Reais)
Consolidated Individual 06/30/2020 06/30/2019 06/30/2020 06/30/2019
Revenues
Sales of goods, products and services 282,010 297,274 - - Other revenues 1,193 2,996 - - 283,203 300,270 - -
Brought-in inputs (including PIS and COFINS)
Cost of goods and products sold and services
rendered (25,273) (36,120) - -
Gain (loss) on fair value of biological assets 30,367 879 Materials, electricity, third-party services and others (36,736) (35,394) (196) (311) Other 568 357 - - (31,074) (70,278) (196) (311)
Gross value added 252,129 229,992 (196) (311)
Depreciation and amortization (111,851) (104,192) - -
Net value added produced by the Company 140,278 125,800 (196) (311)
Value added received in transfer
Equity pickup (4) - 42,227 4,677 Finance income 6,935 8,606 1 - Foreign exchange differences - financial instruments and derivatives
67,592 19,031
Total value added to be distributed 214,801 153,437 42,032 4,366 Personnel 43,350 37,977 - -
Direct compensation 28,456 25,238 - - Benefits 12,905 10,556 - - Unemployment Compensation Fund (FGTS) 1,989 2,183 - -
Taxes, charges and contributions 29,306 40,372 35 39
Federal 27,337 26,744 18 23 State (128) 12,026 4 3 Other taxes 2,097 1,602 13 13 Debt remuneration 100,159 70,768 11 7
Interest 13,464 22,095 1 9 Foreign exchange differences - financial instruments and derivatives
53,751 10,630 - -
Rents 7,606 18,281 - - Other 25,338 19,762 10 (2) Equity remuneration 41,986 4,320 41,986 4,320
Income for the period 41,986 4,320 41,986 4,320
Value added distributed 214,801 153,437 42,032 43,667 See accompanying notes.
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Companhia Mineira de Açúcar e Álcool Participações
Quarterly information – ITR Quarter ended June 30, 2020
10
Notes to quarterly information
(In thousands of Reais)
1 Operations
Companhia Mineira de Açúcar e Álcool Participações (the “Company” or the “Group”), located
at Rodovia BR 050 (KM 121) - Distrito Industrial I, city of Uberaba, Minas Gerais State, is a
joint-stock corporation engaged in holding interest in other entities engaged in the production, sale and export of sugar, ethanol, energy and other sugarcane processing by-products. On March
4, 2009, the Company was registered as a publicly-held company through Circular Letter
CVM/SEP/RIC No. 001/2009 for trading of common shares in the non-organized over-the-counter market.
The Company is the Parent of the following entities:
• Vale do Tijuco Açúcar e Álcool S.A. (Vale do Tijuco)
• Vale do Pontal Açúcar e Etanol Ltda. (Vale do Pontal)
Subsidiary Vale do Tijuco Açúcar e Álcool S.A. started up on April 12, 2010. Its manufacturing unit has a milling capacity of approximately 4.5 million tons of sugarcane per annum, producing
sugar, anhydrous ethanol, hydrated ethanol and energy, as well as fusel oil and sugarcane bagasse
by-products.
Subsidiary Vale do Pontal Açúcar e Álcool Ltda. is a privately held company whose operations
started on July 1, 2016. It became a subsidiary of Companhia Mineira de Açúcar e Álcool Participações on July 1, 2018, as shown in Note 11. Its manufacturing unit has a milling capacity
of approximately 2.5 million tons of sugarcane per annum, producing sugar, anhydrous ethanol,
hydrated ethanol, as well as fusel oil and sugarcane bagasse by-products.
Sugarcane plantation requires an 18-month period for maturing and for the beginning of the harvest. The harvest generally takes place between April and November, which is also the period
when sugar and ethanol are produced. The sale of production takes place throughout the year and
does not suffer changes due to seasonality, only changes in the regular market supply and demand
(commodity price and foreign exchange differences).
Impacts of Covid-19
On March 11, 2020, the World Health Organization (WHO) declared coronavirus (COVID-19) a
pandemic. The outbreak triggered significant decisions by governments and private sector entities, which added to the potential impact of outbreak, increased the degree of uncertainty for
economic agents and may generate impacts on the interim financial statements. Aware of its
responsibility with the health and safety of its employees, partners, customers, as well as the
community, due to the spread of COVID-19, the Company announced that, from March 23, 2020, it would take a series of preventive actions.
Significant measures adopted were:
- Reinforcement of cleaning teams in order to increase the frequency of cleaning, especially in
points and places of greater manual contact;
- Anticipation of the vaccination campaign against flu.
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Companhia Mineira de Açúcar e Álcool Participações
Quarterly information – ITR Quarter ended June 30, 2020
11
1 Operations (Continued)
Impacts of Covid-19 (Continued)
In order to manage the economic and financial impacts, the Company set the production
of VHP sugar for practically the entire 20/21 crop at good levels of price, and
approximately 30% of the total volume of ethanol. In addition, in order to ensure the
normal operation of manufacturing units and reduce the impact on prices, investment
strategies were adopted to expand product storage. Regarding pricing policy:
Sugar and Ethanol:
- 100% set for VHP sugar and 30% set for Ethanol;
Power:
- 20% of the Company’s sales are agreed upon in a long-term auction;
- 60% of the volume is sold to top-tier companies based on long-term contracts; - 20% are settled with the Electric Energy Trade Chamber (CCEE) at the average market price
(Settlement Price for the Differences - “PLD”);
- All the Company’s contracts are registered with the CCEE, especially those carried out by the traders, and the consuming party also has the obligation to register. It should be highlighted that
these contracts do not present significant risks, since the system is highly regulated.
Management continues to monitor all aspects that may positively and negatively affect the
Company. At the moment, the Company’s priority is the care and attention to people, without, however, failing to keep up with the market fluctuations to which its products are inserted, caused
by the drop in national economic activity.
Based on the aforementioned events, the Company understands that there are no considerations
to be made in the interim financial statements as at June 30, 2020, with respect to: impairment
tests of its assets, breaches of covenants or significant change in the fair value of its assets and
liabilities.
2 Presentation of interim financial information and significant accounting policies
2.1 Basis of preparation The individual interim financial information has been prepared in accordance with Accounting Pronouncement CPC 21 - Interim Financial Reporting, while the consolidated interim financial
information has been prepared in accordance with CPC 21 (R1) - Interim Financial Reporting and
with International Accounting Standard (IAS) 34 - Interim Financial Reporting, issued by the
International Accounting Standards Board (IASB), and is presented consistently with the rules issued by the Brazilian Securities and Exchange Commission (CVM) applicable to the preparation
of Quarterly Information (ITR).
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Companhia Mineira de Açúcar e Álcool Participações
Quarterly information – ITR Quarter ended June 30, 2020
12
2 Presentation of interim financial information and significant accounting practices (Continued)
2.1 Basis of preparation (Continued) This interim financial information has been prepared based on the basis of preparation and
accounting policies consistent with those adopted in preparing the annual financial statements as
at March 31, 2020, authorized and issued by management on June 08, 2020, and should be read together with the referred to annual financial statements. The explanatory note information that
did not suffer material changes compared with that contained in the financial statements as at
March 31, 2020 is not fully disclosed in this interim financial information. However, selected
information was included to explain significant events and transactions occurred in order to enable the understanding of changes in the Company’s financial position and performance since the
publication of the annual financial statements at March 31, 2020.
In preparing this interim financial information, management used judgments, estimates and
assumptions that affect the application of the Group’s accounting practices and reported amounts
of assets, liabilities, revenues and expenses. Actual results may differ from those estimates.
Estimates and assumptions are reviewed on an ongoing basis and had no significant changes upon preparing this interim financial information in relation to the annual financial statements as at
March 31, 2020.
The presentation of the Statement of Value Added (SVA) is required by the Brazilian Corporation
Law and by accounting practices adopted in Brazil applicable to publicly-held companies. The IFRS do not require SVA presentation. As a result, under the IFRS, this statement is presented as
supplementary information, without detriment to the set of quarterly information.
The non-financial data included in this individual and consolidated interim financial information
such as crop mix per hectare, planted hectares and total hectares and qualitative aspects to
determine insurance coverage were not audited/reviewed by independent auditors.
Management authorized the issue of this interim financial information on August 28, 2020.
2.2 Basis of consolidation The consolidated financial information includes the quarterly information of Companhia Mineira
de Açúcar and Álcool Participações and its subsidiaries listed below:
Percentage of
equity interest
Subsidiaries Country 06/30/2020 03/31/2020
Vale do Tijuco Açúcar e Álcool S.A. (Vale do Tijuco) Brazil 99.99% 99.99% Vale do Pontal Açúcar e Etanol Ltda. (Vale do Pontal) Brazil 99.99% 99.99%
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Companhia Mineira de Açúcar e Álcool Participações
Quarterly information – ITR Quarter ended June 30, 2020
13
3 Cash and cash equivalents
Consolidated Individual
06/30/2020
03/31/2020 06/30/2020
03/31/2020
Cash and banks 20,828
51,180 14
93
Short-term investments 181,591
402,130 -
-
Total 202,419
453,310 14
93
The balance of cash and cash equivalents derives from receipts related to commercial transactions
and long-term loans taken out. Short-term investments are cash equivalents since they are readily
convertible into a known cash amount and subject to insignificant risk of change in their value.
At June 30, 2020, these investments refer to Bank Deposit Certificates (CDB) and Investment
Funds, which are deposited in top-tier banks, whose remuneration rate ranges from 95% to 105% of the Interbank Deposit Certificate (CDI) variation. These investments have no maturity date
and may be redeemed to meet the immediate cash needs of the Company and its subsidiaries.
Information on the Group’s exposure to market, credit and fair value measurement risks related to cash and cash equivalents is included in Note 20.
4 Short-term investments
Consolidated
06/30/2020 03/31/2020
Short-term investments 16,175
16,128
Total 16,175 16,128
Current assets - 71 Noncurrent assets 16,175 16,057
The Group maintains short-term investments amounting to R$16,175 at June 30, 2020, which
refer to balances restricted to financing transactions, bearing interest that ranges from 95% to 100% of the Interbank Deposit Certificate Interbank (CDI) fluctuation.
Information on the Group’s exposure to market, credit and fair value measurement risks related
to restricted short-term investments is included in Note 20.
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Companhia Mineira de Açúcar e Álcool Participações
Quarterly information – ITR Quarter ended June 30, 2020
14
5 Trade accounts receivable and other receivables Consolidated Individual
06/30/2020 03/31/2020 06/30/2020 03/31/2020
From sales of ethanol 8,770 9,155 - -
From sales of energy 15,171 11,168 - -
From sales of sugar 60,207 12,505 - -
From sales of sugarcane 1,789 2,321 - -
Other (a) 33,505 26,884 - -
Trade accounts receivable 119,442 62,033 - -
Receivables from related parties (Note 28) 56,356 2,219 293 292
Other receivables 56,356
2,219
293
292
Total 175,798 64,252 293 292
Current assets 101,939 43,456 - -
Noncurrent assets 73,859 20,796 293 292
(a) On November 27, 2017, subsidiary Bacuri Agrícola Ltda. was sold by its parent JFLIM Participações S.A., which transferred the receivables from the referred transaction to Vale do Pontal Açúcar e Etanol Ltda. for
settlement of loans between the parties. This account receivable amounts to R$20,352 at June 30, 2020, adjusted annually by the Extended Consumer Price Index (IPCA) until its final maturity in 2026.
Information on the Group’s exposure to credit, market and fair value measurement risks, as well
as impairment losses related to trade accounts receivable and other receivables is disclosed in
Note 20.
6 Leases receivable
Consolidated
Balance at March 31, 2020 196,834
Additions of new lease agreements 14,558
Adjustments due to change in the payment department (760)
Interest 3,985
Receipt (64,098)
Write-off due to termination of/amendments to contracts (6,821)
Balance at June 30, 2020 143,698
Current assets 59,616
Noncurrent assets 84,082
The aging list of long-term contracts is as follows:
Maturity Consolidated
07/01/2021 to 06/30/2022 15,594
07/01/2022 to 06/30/2023 15,222
07/01/2023 to 06/30/2024 12,748
07/01/2024 to 06/30/2025 11,340
07/01/2025 to 06/30/2026 9,047
07/01/2026 to 06/30/2027 7,424
07/01/2028 onwards 12,707
84,082
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Companhia Mineira de Açúcar e Álcool Participações
Quarterly information – ITR Quarter ended June 30, 2020
15
7 Inventories
Consolidated
06/30/2020 03/31/2020 Finished product
VHP sugar 80,527 10,269 Anhydrous ethanol 75,438 17,754 Hydrated ethanol 22,399 4,225
Supplies Storeroom - sundry (a) 24,716 28,891 Provision for obsolescence (4,214) (5,815) Inventories held by third parties (b) 1,531 1,530
Total 200,397 56,854
(a) The most significant storeroom amounts refer to consumer goods and inventory of agricultural inputs and pesticides to be used in the planting areas.
(b) These refer to agricultural inputs and pesticides to be used in planting areas with third-party crops.
Changes in provision for obsolescence
The Company adopts the criterion of recording a provision for storeroom items that have not been
moved for more than 365 days. At June 30, 2020, the subsidiaries presented the total amount of
R$4,214 relating to obsolete inventories, of which R$1,872 recorded at Vale do Tijuco Açúcar e
Alcool S.A. and R$2,342 at Vale do Pontal Açúcar e Etanol Ltda., as follows:
Consolidated
06/30/2020 03/31/2020
Opening balance (5,815) (2,525)
Addition (29) (3,871)
Write-off 1,630 581
Total (4,214) (5,815)
8 Biological assets
Changes in biological assets (sugarcane) are as follows:
Consolidated
Balance at April 1, 2019 90,996
Additions - sugarcane treatments 15,593
Absorption of harvested sugarcane costs (30,555)
Fair value less estimated selling expenses 274
Balance at June 30, 2019 76,308
Additions - sugarcane treatments 64,457
Absorption of harvested sugarcane costs (39,439)
Fair value less estimated selling expenses 8,550
Balance at April 1, 2020 109,876
Additions - sugarcane treatments 21,939
Absorption of harvested sugarcane costs (35,984)
Fair value less estimated selling expenses 30,367
Balance at June 30, 2020 126,198
-
Companhia Mineira de Açúcar e Álcool Participações
Quarterly information – ITR Quarter ended June 30, 2020
16
8 Biological assets (Continued)
Sugarcane ratoon crops Planted areas consider only sugarcane crops and not the land where such crops are located. The
following assumptions were used to determine fair value using the discounted cash flow method:
Consolidated
06/30/2020 03/31/2020 Estimated harvest area (hectare) 34,969 32,349 Projected production (ton of sugarcane per hectare) 80 82.19 Total Recoverable Sugar - ATR (kg) 135 135
Price of ATR per kilo (R$) 0.69 0.63
The discount rate used in the cash flow for each period, denominated “Weighted Average Cost of Capital”, corresponded to 5.07% p.a. (5.72% at March 31, 2020), which was reviewed and
approved by Company management.
The Group is exposed to a number of risks related to its plantations:
Regulatory and environmental risks The Group is subject to laws and regulations and established environmental policies and procedures focused on compliance with environmental and other laws. Management conducts
regular analysis to identify environmental risks and ensure that systems in place are adequate to
manage those risks.
Supply and demand risks The Group is exposed to risks arising from fluctuation in prices and volume of sales of its
plantations. Whenever possible, the Group manages this risk by aligning its extraction volume with market supply and demand. Management conducts regular reviews of the industry trend to
ensure that the Group’s price structure is in line with the market and that projected extraction
volumes are consistent with expected demand.
Climate risks and other The Group’s plantations are exposed to the risks of damage caused by climate change, diseases,
forest fires and other natural forces. The Group has extensive procedures in place to monitor and reduce these risks, including regular inspections of the sugarcane plantation health and analysis
of industrial diseases and pests. The Group also takes out insurance against natural disasters.
-
Companhia Mineira de Açúcar e Álcool Participações
Quarterly information – ITR Quarter ended June 30, 2020
17
9 Taxes and contributions recoverable
Consolidated Individual
06/30/2020
03/31/2020 06/30/2020
03/31/2020
Contribution Tax on Gross Revenue for Social Security Financing (COFINS) recoverable 13,477
13,240 -
-
State VAT (ICMS) recoverable - purchase of inputs 10,280
9,111 -
-
State VAT (ICMS) recoverable - acquisition of property, plant and equipment 10,837
8,383 -
-
Withholding Income Tax (IRRF) on short-term
investments 3,780
3,222 166
166 Contribution Tax on Gross Revenue for Social Integration Program (PIS) recoverable 2,056
2,005 -
-
Other taxes recoverable 2,583
2,495 82
82
Total 43,013
38,456 248
248
Current assets 13,750 9,746 182 182
Noncurrent assets 29,263 28,710 66 66
PIS and COFINS
This balance comprises credits arising from PIS and COFINS non-cumulative payment, referring
to the acquisitions of parts and pieces used in the maintenance of manufacturing facilities and
agricultural fleet, maintenance services of manufacturing and agricultural facilities, freight and warehousing in sales transactions, electric power and other credits on acquisitions of machinery
and equipment, and buildings and constructions intended for production. These credits may be
offset against other federal taxes and are not time-barred by statutes.
ICMS – acquisition of property, plant and equipment
This balance basically comprises credits determined on acquisitions of property, plant and
equipment items, which are being realized at the ratio of 1/48, and may be offset against taxes of the same nature.
ICMS - purchase of inputs
This balance refers to credits computed in the acquisition of sugarcane, through the tax benefit
granted to subsidiary Vale do Pontal Açúcar e Etanol Ltda. in the state of Goiás.
Withholding Income Tax (IRRF)
This refers to Withholding Income Tax (IRRF) on short-term investments and prepaid income
and social contribution taxes, which may be offset against federal taxes payable.
-
Companhia Mineira de Açúcar e Álcool Participações
Quarterly information – ITR Quarter ended June 30, 2020
18
10 Advances to suppliers and other assets
Consolidated
06/30/2020
03/31/2020
Advances to sugarcane suppliers - third parties 16,599
17,849
Advances to local suppliers - third parties 9,003
9,005
Other 3,841
1,092
Total 29,443
27,946
Current assets 28,438 26,566
Noncurrent assets 1,005 1,380
The balance of advances to suppliers refers to sugarcane supply contracts entered into by
subsidiaries Vale do Tijuco Açúcar e Álcool S.A. and Vale do Pontal Açúcar e Álcool Ltda. with
their suppliers. The balance classified as noncurrent assets refers to sugarcane supply advance
contracts that will be realized upon receipt of sugarcane in subsequent crops, priced based on the Total Recoverable Sugar (ATR) index disclosed by the São Paulo State Council of Sugarcane,
Sugar and Ethanol Producers (Consecana) by the end of the crop.
-
Companhia Mineira de Açúcar e Álcool Participações
Quarterly information – ITR Quarter ended June 30, 2020
19
11 Investments
Balance breakdown
Individual
06/30/2020 03/31/2020
Investments measured by the equity method
Vale do Tijuco Açúcar e Álcool S.A. 196,171 237,456 Vale do Pontal Açúcar e Etanol Ltda. 83,647 96,508
279,818 333,964
Consolidated
06/30/2020 03/31/2020
Investments measured by the equity method
CZ Energy Comercializadora de Etanol S.A. 2,489 2,400 Other investments 48 141
2,537 2,541
The Company’s investments in its subsidiaries are accounted for using the equity method. The
Company’s and its subsidiaries’ shares are not traded on the Stock Exchange.
The Company recorded a gain of R$42,227 in the year ended June 30, 2020 (R$4,677 at June 30, 2019) referring to the equity pickup of its subsidiaries. In the consolidated financial statements,
loss of R$(4) was recorded at the end of year.
Subsidiary Vale do Tijuco began to hold equity interest in joint venture CZ Energy
Comercializadora de Etanol S.A. (“CZ Energy”) by subscribing 2,600 registered common shares with no par value, issued by virtue of the capital increase of CZ Energy approved at the Special
General Meeting held on June 18, 2019. The subscribed shares were paid up in domestic currency
at the issue price of R$1.00 (one real) per share, totaling R$2,600.
Changes in investments in subsidiaries
Individual
06/30/2020 03/31/2020
Investment opening balance 333,964 302,254
Equity pickup 42,227 64,240
Equity adjustment (96,373) (29,392)
Dividends - (3,138)
Total 279,818 333,964
Consolidated
06/30/2020 03/31/2020
Investment opening balance 2,541 144
Capital contribution – Cz Energy - 2,600
Equity pickup (4) (203)
Total 2,537 2,541
-
Companhia Mineira de Açúcar e Álcool Participações
Quarterly information – ITR Quarter ended
June 30, 2020
20
11 Investments (Continued)
Information on investees The table below presents a summary of all financial information of the subsidiaries:
Period ended June 30, 2020
Consolidated Equity interest
%
Current
assets
Noncurrent
assets
Total
assets Current
liabilities
Noncurrent
liabilities
Total
liabilities
Equity Revenues Expenses Loss Equity pickup
June 30, 2020
CZ Energy S.A. 26.00% 9,603 - 9,603 29 - 29 9,574 165 (177) (12) (4)
9,603 - 9,603 29 - 29 9,574 165 (177) (12) (4)
Period ended June 30, 2020
Individual Equity interest
%
Current
assets
Noncurrent
assets
Total
assets Current
liabilities
Noncurrent
liabilities
Total
liabilities
Equity Revenues Expenses Income
Equity
pickup
June 30, 2020
Vale do Tijuco S.A. 100.00% 604,051 1,249,093 1,853,144 509,857 1,147,115 1,656,972 196,171 291,770 (257,746) 34,024 34,024
Vale do Pontal Ltda. 100.00% 227,023 393,599 620,622 135,061 401,915 536,976 83,647 97,187 (88,984) 8,203 8,203
831,074 1,642,692 2,473,766 644,918 1,549,030 2,193,948 279,818 388,957 (346,730) 42,227 42,227
-
Companhia Mineira de Açúcar e Álcool Participações
Quarterly information – ITR Quarter ended June 30, 2020
21
11 Investments (Continued)
Information on investees
Period ended June 30, 2019
Consolidated Equity interest
%
Current
assets
Noncurrent
assets
Total
assets Current
liabilities
Noncurrent
liabilities
Total
liabilities
Equity Revenues Expenses Income/
loss Equity pickup
March 31, 2020
CZ Energy S.A. 26.00%- 9,590 - 9,590 3 - 3 9,587 - - - - 9,590 - 9,590 3 - 3 9,587 - - - -
Period ended June 30, 2019
Equity interest
%
Current
assets
Noncurrent
assets
Total
assets Current
liabilities
Noncurrent
liabilities
Total
liabilities
Equity Revenues Expenses Income/
loss Equity pickup
March 31, 2020
Vale do Tijuco S.A. 100.00% 739,227 1,261,560 2,000,787 481,514 1,278,464 1,759,978 237,456 233,271 (224,912) 8,359 8,359
Vale do Pontal Ltda. 100.00% 136,561 454,069 590,630 90,053 404,069 494,122 96,508 91,912 (95,594) (3,682) (3,682)
875,788 1,715,629 2,591,417 571,567 1,682,533 2,254,100 333,964 325,183 (320,506) 4,677 4,677
-
Companhia Mineira de Açúcar e Álcool Participações
Quarterly information – ITR Quarter ended June 30, 2020
22
12 Property, plant and equipment
Consolidated Industrial
equipment
Constructions
and buildings
Agricultural
machinery
and tractors
Paving Vehicles Agricultural
equipment Land
Machinery,
equipment
and tools
Furniture
and
fixtures
Computers and
peripherals
Construction
in progress (a)
Expenses with
intercrop
maintenance
Crop in
formation Other Total
Cost
Balance at April 1, 2019 456,857 126,832 46,742 29,739 19,654 26,394 13,988 173,172 3,778 4,310 23,513 206,291 360,608 22,993 1,514,871
Additions 106 - - - 544 240 - 22 20 7 21,848 - 26,956 480 50,223
Write-off - - (2,790) - - (218) - (50) (2) (17) (173) (888) (101) - (4,239)
Transfers - 70 - 7,520 - 56 - 37 6 34 2,671 - - (10,394) -
Balance at June 30, 2019 456,963 126,902 43,952 37,259 20,198 26,472 13,988 173,181 3,802 4,334 47,859 205,403 387,463 13,079 1,560,855
Additions 840 - - - 637 120 2,690 96 5 26 33,894 79,045 57,211 2,634 177,198
Write-off (415) - (3,022) - (1,133) (98) - (307) (1) (16) (3,154) (956) (2,760) (2,837) (14,699)
Transfers 24,864 11,411 7,256 1,367 1,819 676 (1) (101,173) (1,006) 2,043 (34,709) 7,665 85,092 (5,304) -
Balance at March 31, 2020 482,251 138,313 48,186 38,626 21,522 27,170 16,677 71,796 2,800 6,387 43,890 291,156 527,007 7,572 1,723,354
Additions 12 - - - - 77 - 56 7 3 40,972 - 32,654 869 74,651
Write-off - - - - - (3) - (77) (8) - - - - - (88)
Transfers 20,197 1,018 - 8,264 960 18,204 - 72 54 203 (49,023) - - 50 -
Balance at June 30, 2020 502,460 139,331 48,186 46,890 22,482 45,448 16,677 71,848 2,853 6,593 35,840 291,156 559,661 8,492 1,797,917
-
Companhia Mineira de Açúcar e Álcool Participações
Quarterly information – ITR Quarter ended June 30, 2020
23
12 Property, plant and equipment (Continued)
Consolidated Industrial
equipment
Constructions
and buildings
Agricultural
machinery
and tractors
Paving Vehicles Agricultural
equipment Land
Machinery,
equipment
and tools
Furniture
and
fixtures
Computers
and
peripherals
Construction
in progress (a)
Expenses with
intercrop
maintenance
Crop in
formation Other Total
Depreciation
Balance at April 1, 2019 (174,597) (53,853) (35,386) (14,194) (13,461) (19,766) - (163,945) (2,956) (2,339) - (135,058) (205,443) (4,794) (825,792)
Additions (7,290) (1,142) (1,302) (1,821) (390) (592) - (740) (29) (168) - (25,807) (20,560) (491) (60,332)
Write-off - - 2,790 - - - - 50 - 5 - - - - 2,845
Balance at June 30, 2019 (181,887) (54,995) (33,898) (16,015) (13,851) (20,358) - (164,635) (2,985) (2,502) - (160,865) (226,003) (5,285) (883,279)
Additions (22,579) (3,557) (4,988) (7,263) (1,180) (1,681) - (1,347) (73) (546) - (36,715) (2,387) (283) (82,599)
Write-off 75 - 2,657 - 732 98 - 239 - 9 - - - 39 3,849
Transfers - 5,598 1,104 (5,564) 644 204 - 101,548 1,004 (766) - (7,970) (95,323) (478) -
Balance at March 31, 2020 (204,391) (52,955) (35,124) (28,842) (13,655) (21,737) - (64,195) (2,055) (3,805) - (205,550) (323,713) (6,008) (962,029)
Additions (7,400) (1,255) (1,433) (2,116) (355) (1,138) - (485) (32) (203) - (35,282) (19,400) (107) (69,207)
Write-off - - - - - - - 66 8 - - - - - 74
Balance at June 30, 2020 (211,791) (54,209) (36,557) (30,958) (14,009) (22,875) - (64,614) (2,079) (4,009) - (240,832) (343,113) (6,115) (1,031,162)
Net carrying amount - - - - - - - - - - - - -
Balance at March 31, 2020 277,860 85,358 13,062 9,783 7,867 5,433 16,677 7,601 745 2,582 43,890 85,606 203,294 1,564 761,325
Balance at June 30, 2020 290,669 85,122 11,629 15,932 8,472 22,573 16,677 7,233 774 2,584 35,840 50,324 216,548 2,376 766,755
(a) This basically refers to construction works for expanding the manufacturing facility and acquisitions of equipment.
-
Companhia Mineira de Açúcar e Álcool Participações
Quarterly information – ITR Quarter ended June 30, 2020
24
12 Property, plant and equipment (Continued)
Guarantee Property, plant and equipment items were granted as guarantee for loans and financing, as described in Note 14.
Impairment test In accordance with CPC 01 (R1)/IAS 36 - Impairment of Assets, the Group assessed the impairment indicators at June 30, 2020 and concluded that there was no need to carry out an
impairment test.
13 Right of use on leases and agricultural partnerships
The Company adopted IFRS 16 / CPC 06 (R2) as of April 1, 2019.
Changes in the right of use on leases and agricultural partnerships during the current interim
financial information were as follows:
a) Projected discounted flow without projected future inflation
Cost: Properties Machinery and
equipment Vehicles Land Total
Balance at March 31, 2020 - 11,261 3,992 295,433 310,686
Additions of new right-of-use
agreements -
-
-
15,366
15,366
Adjustments due to change in the payment department
-
-
-
3,491
3,491
Write-off due to termination of/amendments to contracts
-
-
-
(18,826)
(18,826)
Balance at June 30, 2020 - 11,261 3,992 295,464 310,717
Accumulated amortization:
Balance at March 31,
2020 - (6,272) (2,223) (47,557) (56,052)
Amortization for the period
-
(79)
(28)
(15,121)
(15,228)
Write-offs - - - 9,647 9,647
Balance at June 30, 2020 - (6,351) (2,251) (53,031) (61,633)
Residual value at March
31, 2020 -
4,989
1,769
247,876
254,634
Residual value at June
30, 2020 -
4,910
1,741
242,433
249,084
-
Companhia Mineira de Açúcar e Álcool Participações Quarterly information – ITR Quarter ended
June 30, 2020
25
13 Right of use on leases and agricultural partnerships (Continued) In addition, in compliance with CVM Memorandum Circular No. 02/2019, following are
presented comparisons in accounts Right of use and Depreciation in future periods, using the
discounted cash flow considering inflation projected in the payment flows, discounted at the
nominal rate used by the Company:
Right of use
07/01/2020
to 06/30/2021
07/01/2021
to 06/30/2022
07/01/2022
to 06/30/2023
07/01/2023
to 06/30/2024
07/01/2024
to 06/30/2025
07/01/2025
to 06/30/2026
07/01/2026
to 06/30/2040
IFRS 188,490 146,325 108,407 83,182 61,260 43,534 -
CVM 210,859 166,466 126,133 98,308 73,796 53,427 -
10.61% 12.10% 14.05% 15.39% 16.99% 18.52% -
Depreciation
expense 07/01/2020
to 06/30/2021
07/01/2021
to 06/30/2022
07/01/2022
to 06/30/2023
07/01/2023
to 06/30/2024
07/01/2024
to 06/30/2025
07/01/2025
to 06/30/2026
07/01/2026
to 06/30/2040
IFRS (61,114) (42,165) (37,919) (25,225) (21,922) (17,726) (43,534)
CVM (63,015) (44,393) (40,332) (27,825) (24,512) (20,369) (53,427)
3.02% 5.02% 5.98% 9.35% 10.57% 12.97% 18.52%
-
Companhia Mineira de Açúcar e Álcool Participações Quarterly information – ITR Quarter ended
June 30, 2020
26
14 Loans and financing
This note discloses contractual information on loans and financing of the Company and its
subsidiaries. Note 20 discloses additional information regarding the Company’s and its
subsidiaries’ exposure to interest rate and currency risks.
Credit facility
RE. Currency Index Year of
maturity
Consolidated
06/30/2020 03/31/2020
CCB
(c) R$ CDI 2020 5,082 5,096
CCB
(c) R$ CDI 2022 52,618 60,171
CCB
(c) R$ SELIC 2024 22,860 21,864
CCE
(b) R$ CDI 2020 70,691 70,112
CCE
(b) R$ CDI 2021 14,044 17,575
CCE
(b) R$ CDI 2022 50,649 60,118
CPR
(c) R$ CDI 2022 54,469 65,000
CPR
(c) R$ Fixed rate 2022 24,277 26,362
CRA
(f) R$ CDI 2022 151,404 154,161
CRA
(f) R$ CDI 2023 76,398 75,500
CRA
(f) R$ IPCA 2025 304,353 307,934
Finame
(a) R$ Fixed rate 2021 646 760
Finame
(a) R$ TJLP 2021 368 456
Finame
(a) R$ Fixed rate 2022 187 207
Finame
(a) R$ TJLP 2022 2,414 2,731
Finame
(a) R$ Fixed rate 2023 3,100 3,344
Finame
(a) R$ SELIC 2023 865 929
Finame
(a) R$ TJLP 2023 526 566
Finame
(a) R$ Fixed rate 2024 6,784 8,108
Finame
(a) R$ SELIC 2024 343 364
Finame
(a) R$ TJLP 2024 920 984
Finame
(a) R$ Fixed rate 2025 1,872 1,830
Finame
(a) R$ Fixed rate 2026 1,336 1,463
Finame
(a) R$ SELIC 2026 105 107
Finame
(a) R$ TLP 2026 3,440 3,588
Finame
(a) R$ TLP 2028 4,233 4,247
Finame
(a) R$ TLP 2030 20,542 -
NCE
(b) R$ CDI 2021 32,147 32,185
NCE
(b) R$ CDI 2022 27,726 30,830
PPE
(b) USD LIBOR 2021 75,295 92,296
1,009,694 1,048,888
Transaction costs (20,746) (22,286)
Total (*) 988,948 1,026,602
Current liabilities 241,258 244,548
Noncurrent liabilities 747,690 782,054
(*) The weighted average rates of finance charges are 7.75% p.a.
-
Companhia Mineira de Açúcar e Álcool Participações Quarterly information – ITR Quarter ended
June 30, 2020
27
14 Loans and financing (Continued)
Consolidated
Credit facility RE. Currency Index
Year of
maturity 06/30/2020 03/31/2020
Intercompany loan - noncurrent liabilities (Note 28) (e) R$ (e) (e) - 11,062
Individual
Credit facility RE. Currency Index
Year of
maturity 06/30/2020 03/31/2020
Intercompany loan - noncurrent liabilities (Note 28) (d) R$ (d) (d) 7,441 7,214
(a) This refers to loans taken out with the purpose of financing the acquisition of industrial and agricultural equipment. These loans have a grace period for payment of the first installment of principal from 6 to 24 months from the agreement execution date. The agreements
are guaranteed by assignment in trust upon disposal of financed assets.
(b) This refers to loans with various financial institutions which will be settled through exports made in the period from 2020 to 2022.
(c) This refers to loans with various financial institutions which will be settled in the period from 2020 to 2022.
(d) Amount granted to the Parent Company by subsidiaries Vale do Tijuco Açúcar e Álcool S.A. and Vale do Pontal Açúcar e Etanol Ltda., without interest, which will be paid by the Company according to its cash availability, as described in Note 28.
(e) Amount granted by Usina Canápolis Açúcar e Etanol S.A., subject to interest, which was settled by the Company in April 2020.
(f) This refers to Agribusiness Receivables Certificates (“CRA”):
The first issue was in October 7, 2014, in the amount of R$99 million. The Agribusiness Credit Rights Certificates (CDCA)
installments will be increased by annual conventional interest, from the CRA payment date up to the payment date of each CDCA
interest installment. The following financial institutions and agents were contracted: coordinator leading bank: BB-Banco de
Investimentos S.A.; creditor issuing agent: Gaia Agro Securitizadora S.A.; trustee: Planner Trustee Distribuidora de Títulos e Valores
Mobiliários Ltda; registrar agent: BNY Mellon Serviços Financeiros Distribuidora de Títulos e Valores Mobiliários S.A.; and
custodian: SLW Corretora de Valores de Câmbio Ltda. These agreements were guaranteed by assignment in trust upon disposal of
financed assets, binding of VHP sugar receivables, agricultural pledge as well as corporate surety. The agreements were fully settled
on September 10, 2019.
The second issue was in October 15, 2018, in the amount of R$150 million. The debenture installments will be increased by semiannual
conventional interest, from the CRA payment date up to the payment date of each debenture interest installment, calculated on nominal
value. The following financial institutions and agents were contracted: coordinator leading bank: Eco Securitizadora de Direitos
Creditórios do Agronegócio S.A.; leading coordinator: XP Investimentos Corretora de Câmbio, Títulos e Valores Mobiliários S.A.;
trustee: Pentágono S.A. Distribuidora de Títulos e Valores Mobiliários; settling bank: Banco Bradesco S.A., custodian: Pentágono
S.A. Distribuidora de Títulos e Valores Mobiliários, bookkeeping agent: Vórtx Distribuidora de Títulos e Valores Mobiliários Ltda.,
market maker: XP Investimentos Corretora de Câmbio, Títulos e Valores Mobiliários S.A.
The third issue was in January 31, 2019, in the amount of R$75 million. The debenture installments will be increased by semiannual
conventional interest, from the CRA payment date up to the payment date of each debenture interest installment, calculated on nominal
value. The grace period is 3 years and amortization will occur at the end of the 3rd and 4th years. The following financial institutions
and agents were contracted: coordinator leading bank: Eco Securitizadora de Direitos Creditórios do Agronegócio S.A.; leading
coordinator: XP Investimentos Corretora de Câmbio, Títulos e Valores Mobiliários S.A.; trustee: Pentágono S.A. Distribuidora de
Títulos e Valores Mobiliários; settling bank: Banco Bradesco S.A., custodian: Pentágono S.A. Distribuidora de Títulos e Valores
Mobiliários, bookkeeping agent: Vórtx Distribuidora de Títulos e Valores Mobiliários Ltda., market maker: XP Investimentos
Corretora de Câmbio, Títulos e Valores Mobiliários S.A.
-
Companhia Mineira de Açúcar e Álcool Participações Quarterly information – ITR Quarter ended
June 30, 2020
28
14 Loans and financing (Continued)
The fourth issue was on November 14, 2019, under the terms of CVM Ruling No. 400 of December 29, 2003, as amended, relating
to the 26th (twenty-sixth) issue of Eco Securitizadora de Direitos Creditórios do Agronegócio S.A. (“Offer”), backed by agribusiness
receivables represented by non-privileged nonconvertible debentures, with additional personal guarantee, issued within the scope of
the 4th (fourth) issue of Vale do Tijuco Açúcar e Álcool S.A. (a subsidiary of CMAA). The base offer corresponded to 250,000 (two
hundred and fifty thousand) CRAs, with the possibility of exercising an additional 20% lot, totaling 300,000 (three hundred thousand)
CRAs. The Offer ended on February 4, 2020; three hundred thousand (300,000) registered and book-entry CRAs were subscribed and
paid up, with par value of R$1 (one thousand reais) on the issue date, i.e. November 14, 2019, totaling R$300,000 (three hundred
million reais), with a grace period of 4 years and amortization by the end of the 4 th, 5th and 6th year. The “Leading Coordinator” and
“Market Maker” of the Offer was XP Investimentos Corretora de Câmbio, Títulos e Valores Mobiliários S.A., the “Trustee” was
Pentágono S.A. Distribuidora de Títulos e Valores Mobiliários, and the “Custodian” was Vórtx Distribuidora de Títulos e Valo res
Mobiliários Ltda.
The aging list of consolidated loans and financing is as follows:
June 30, 2020 Book Within 1 to 2 2 to3 3 to 4 4 to 5 Above
value 12 months years years years years 5 years Loans and financing 988,948 241,258 274,690 148,441 109,170 102,741 112,648
March 31, 2020 Book Within 1 to 2 2 to3 3 to 4 4 to 5 Above
value 12 months years years years years 5 years Loans and financing 1,026,602 244,548 294,197 177,098 107,754 101,390 101,615
Covenants
The Company has contractual obligations arising from financing agreements related to the maintenance of
certain financial and nonfinancial ratios established in these contracts (covenants), whose calculation period
is at the year ending March 31, 2021. Management has timely controls on these indicators and at June 30,
2020 understands that pre-established requirements have been met and any requirement by creditors before
the original long-term maturity as well as the need for reclassification are unlikely.
15 Trade accounts payable and other payables
Consolidated Individual
06/30/2020 03/31/2020 06/30/2020 03/31/2020 Local suppliers of materials and services 87,992 84,662 - 71
Sugarcane suppliers 15,987 7,920 - -
Sugarcane suppliers (related parties - Note 28) 8,788 - - -
Total 112,767 92,582 - 71
Current 111,729 92,582 - 71 Noncurrent 1,038 - - -
The crop period of sugarcane, between April and December of each year, on average, has a direct impact on the balance of sugarcane suppliers and cutting, loading and transportation services.
-
Companhia Mineira de Açúcar e Álcool Participações Quarterly information – ITR Quarter ended
June 30, 2020
29
15 Trade accounts payable and other payables (Continued)
The amounts payable to sugarcane suppliers and agricultural partners take into consideration
sugarcane delivered and not yet paid, as well as the price supplement calculated based on the final crop price through the Total Recoverable Sugar (ATR) index disclosed by the São Paulo State
Council of Sugarcane, Sugar and Ethanol Producers (Consecana).
The Company and its subsidiaries evaluated the present value adjustment of their trade accounts
payable at June 30, 2020 and March 31, 2020, and concluded that these balances do not generate material adjustments to present value in financial information.
Information on the Group’s exposure to liquidity and fair value measurement risks related to trade accounts payable and other payables is disclosed in Note 20.
16 Leases and agricultural partnerships payable
Changes in lease liabilities, for the three-month period ended June 30, 2020, are as follows:
Consolidated
Balance at March 31, 2020 399,550
Additions of new right-of-use lease agreements 29,924 Additions due to change in the payment department 2,731 Interest 8,955 Payments (99,111)
Write-off due to termination of/amendments to contracts (16,000)
Balance at June 30, 2020 326,049
Current liabilities 42,205 Noncurrent liabilities 283,844
The aging list of estimated balances of noncurrent lease and partnership payable is as follows: Maturity Consolidated
07/01/2021 to 06/30/2022 41,853
07/01/2022 to 06/30/2023 41,285
07/01/2023 to 06/30/2024 37,786
07/01/2024 to 06/30/2025 34,820
07/01/2025 to 06/30/2026 29,539
07/01/2026 to 06/30/2027 26,175
07/01/2028 onwards 72,836
283,844
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Companhia Mineira de Açúcar e Álcool Participações Quarterly information – ITR Quarter ended
June 30, 2020
30
16 Leases and agricultural partnerships payable (Continued)
Below is the potential right to PIS/COFINS recoverable embedded in the lease consideration:
Consolidated
Agricultural lease Present value
Lease consideration 31,095 25,469
Potential PIS/COFINS (9.25%) (2,876) (2,355)
Total 28,219 23,114
In addition, in compliance with CVM Memorandum Circular No. 02/2019, comparisons are
presented below in accounts Leases and agricultural partnerships payable and Interest expenses
in future periods, using the discounted cash flow considering inflation projected in the payment flows, discounted at the nominal rate used by the Company:
Leases payable
07/01/2020
to 06/30/2021
07/01/2021
to
06/30/2022
07/01/2022
to 06/30/2023
07/01/2023
to
06/30/2024
07/01/2024
to
06/30/2025
07/01/2025
to
06/30/2026
07/01/2026
to 06/30/2040
IFRS 267,222 218,485 170,409 126,409 85,861 51,464 -
CVM 312,414 264,656 214,862 167,244 121,425 80,973 -
14.47% 17.45% 20.69% 24.42% 29.29% 36.44% -
Interest expenses
07/01/2020
to 06/30/2021
07/01/2021
to 06/30/2022
07/01/2022
to 06/30/2023
07/01/2023
to 06/30/2024
07/01/2024
to
06/30/2025
07/01/2025
to
06/30/2026
07/01/2026
to
06/30/2040
IFRS (32,214) (27,323) (23,018) (18,974) (15,235) (11,895) (26,304)
CVM (36,745) (32,064) (27,739) (23,476) (19,359) (15,523) (37,147)
12.33% 14.79% 17.02% 19.18% 21.30% 23.37% 29.19%
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Companhia Mineira de Açúcar e Álcool Participações Quarterly information – ITR Quarter ended
June 30, 2020
31
17 Advances from customers
Consolidated
06/30/2020
03/31/2020 Advances from customers - sugar 123,852 114,158
Advances from customers - ethanol 4,838 3,146
Other 2,445 1,049
Total 131,135
118,353 Current liabilities 29,262 14,379
Noncurrent liabilities 101,873 103,974
18 Provision for contingencies
The Group is a party to lawsuits involving labor, civil, tax and environmental contingencies. To cover future losses relating to these proceedings, a provision was recorded at an amount deemed
sufficient by the Group management to cover losses assessed as probable. The assessment of the
likelihood of loss in these lawsuits, as well as the determination of amounts involved, was performed considering the claims of plaintiffs, the case law on the matters and the opinion of the
Group’s legal advisors. Significant information on these proceedings is as follows:
Labor Civil Tax Total Opening balance at April 1, 2019 2,678 43 1,635 4,356 Additions - - 832 832 Write-offs - (43) (1,769) (1,812)
Closing balance at March 31, 2020 2,678 - 698 3,376 Opening balance at April 1, 2019 2,678 - 698 3,376 Additions 239 - - 239 Write-offs (212) - - (212)
Closing balance at March 31, 2020 2,705 - 698 3,403
Based on information from its legal advisors, analysis of pending legal proceedings and previous
experience with regard to the amounts claimed, management set up a provision at an amount
deemed sufficient to cover losses, if any, on ongoing proceedings.
Unaccrued contingent liabilities
Contingent liabilities not recognized in the quarterly information refer to proceedings whose
likelihood of loss is assessed as possible by the legal advisors, amounting to R$2,651 at June 30,
2020 (R$2,339 At March 31, 2020), for which no provision has been recorded, since the
accounting practices adopted in Brazil and International Financial Reporting Standards (IFRS) do not require such recording.
-
Companhia Mineira de Açúcar e Álcool Participações Quarterly information – ITR Quarter ended
June 30, 2020
32
19 Equity
a. Capital
At June 30, 2020, capital is represented by 1,064,082,217 (the same at March 31, 2020) common
registered shares, with no par value, held as follows:
Individual and Consolidated
06/30/2020 03/31/2020
Shares R$ Shares R$
IndoAgri Brazil Participações Ltda. 372,428,776 175,466 372,428,776 175,466 Ápia SP Participações S.A. 372,428,776 127,898 372,428,776 127,898
JFLIM Participações S.A. 319,224,665 75,875 319,224,665 75,875
Total 1,064,082,217 379,239 1,064,082,217 379,239
b. Capital reserve
As a result of the capital increase on July 13, 2007, the Company recorded a special premium
reserve in the amount of R$4,164 according to the Brazilian Corporation Law.
c. Legal reserve
The legal reserve is set up at 5% of the net income for each year, under the terms of Law No. 6404/76, article 193, capped at 20% of the capital. Due to accumulated losses, the legal reserve
was not recorded.
d. Statutory reserve
The Company shall maintain a statutory reserve for the development or expansion of its
business, the purposes of which shall be: (i) ensure funds for investments in research and
technology; (ii) increase working capital to ensure operational conditions appropriate to the
achievement of the Company’s purposes; and (iii) finance the growth of the Company’s
business. After legal adjustments and deductions, up to 100% of the remaining net income may
be allocated to the statutory reserve, up to the limit of capital, if approved at the Annual General
Meeting.
e. Equity adjustment
This includes the effective portion of the cumulative net foreign exchange difference of liabilities
denominated in US dollar and derivatives designated as hedging instruments for cash flows from
its future exports (hedged item), as described in Note 20.
The Company also maintains comprehensive income referring to actuarial liabilities of employee
benefit plans, in accordance with CPC 33 (R1) approved and reviewed by CVM Rule No. 695/12.
f. Dividends
The Company’s Articles of Incorporation determine a percentage not lower than 25% for payment
of mandatory minimum dividends. Due to accumulated losses, there were no declarations and payments of dividends.
-
Companhia Mineira de Açúcar e Álcool Participações Quarterly information – ITR Quarter ended
June 30, 2020
33
20 Financial instruments
a) Accounting classification and fair values
The table below shows the carrying amounts and fair values of financial assets and liabilities, including
their levels in the fair value hierarchy. It does not include information on the fair value of assets and
liabilities not measured at fair value, if the book value is a reasonable approximation of fair value.
Consolidated Book value Fair value
June 30, 2020
Fair value
through
profit
or loss
Amortized
cost Total Level 1 Level 2 Level 3 Total
Financial assets measured
at fair value
Cash and cash equivalents 20,828 - 20,828 20,828 - - 20,828 Short-term investments 181,591 - 181,591 - 181,591 - 181,591 Restricted short-term investments 16,175 - 16,175 - 16,175 - 16,175 Derivative financial instruments 151,283 - 151,283
- 151,283 - 151,283
Total 369,877 - 369,877 20,828 349,049 - 369,877 Financial assets not
measured at fair value
Trade accounts receivable and other receivables - 119,442 119,442
Receivables from related parties (Note 28) - 56,356 56,356
Leases receivable - 143,698 143,698 Total - 319,496 319,496
Consolidated Book value Fair value
June 30, 2020
Fair value
through
profit
or loss
Amortized
cost Total Level 1 Level 2 Level 3 Total
Financial liabilities
measured at fair value
Derivative financial instruments 327,529 - 327,529
- 327,529 - 327,529
Total 327,529 - 327,529 - 327,529 - 327,529 Financial liabilities not
measured at fair value
Leases and agricultural partnership payable - 326,049 326,049
Loans and financing - 988,948 988,948 Trade accounts payable and other payables - 112,767 112,767
Total - 1,427,764 1,427,764
-
Companhia Mineira de Açúcar e Álcool Participações Quarterly information – ITR Quarter ended
June 30, 2020
34
20 Financial instruments (Continued)
21 March 31, 2020
Fair value
through
profit
or loss
Amortized
cost Total Level 1 Level 2 Level 3 Total
Financial assets measured
at fair value
Cash and cash equivalents 51,180 - 51,180 51,180 - - 51,180 Short-term investments 402,130 - 402,130 - 402,130 - 402,130 Restricted short-term investments 16,128 - 16,128 - 16,128 - 16,128 Derivative financial instruments 303,609 - 303,609
- 303,609 - 303,609
Total 773,047 - 773,047 51,180 721,867 - 773,047 Financial assets not
measured at fair value
Trade accounts receivable and
other receivables - 62,033 62,033
Receivables from related parties (Note 28) - 2,219 2,219
Leases receivable - 196,834 196,834 Total - 261,086 261,086
March 31, 2020
Fair value
through
profit
or loss
Amortized
cost Total Level 1 Level 2 Level 3 Total
Financial liabilities
measured at fair value
Derivative financial instruments 336,862 - 336,862
- 336,862 - 336,862
Total 336,862 - 336,862
- 336,862 - 336,862
Financial liabilities not
measured at fair value
Loans and financing - 1,026,602 1,026,602
Intercompany loans (Note 28) - 11,062 11,062
Leases and agricultural partnership payable - 399,550 399,550
Trade accounts payable and other payables - 92,582 92,582
Total - 1,529,796 1,529,796
-
Companhia Mineira de Açúcar e Álcool Participações Quarterly information – ITR Quarter ended
June 30, 2020
35
20 Financial instruments (Continued)
b) Fair value measurement The book value of financial instruments recorded in the statement of financial position, when
compared to the amounts that could be obtained from their trading in an active market, or in the
absence of such markets, using the net present value adjusted for the current market interest rate, substantially approximates the related market value.
There were no transfers between levels to be considered as at June 30, 2020, in relation to the disclosures as at March 31, 2020.
c) Financial risk management The Group engages in transactions involving financial instruments to meet its own needs. As at
June 30, 2020, the Group does not have financial instruments that are not recorded in the
accounting books and does not carry out transactions involving financial instruments for
speculation purposes. The main risks related to the Group’s operations are the following:
• Credit risk;
• Liquidity risk; and
• Market risk.
This Note brings information about the Group’s exposure to each of the aforementioned risks, the Group’s objectives, policies and processes for measuring and managing risks, and its capital
management.
Risk management structure The Board of Directors is responsible for monitoring the Group’s risk management policies, and
each manager regularly reports the department activities to the Board.
The Group’s risk management policies are intended to identify and analyze any risks to which the
Group is exposed, to define limits and appropriate risk controls, and to monitor risks and
compliance with these limits. These risk management systems and policies are regularly reviewed to reflect changes in market conditions and in the Group’s activities. Through its standards and
training and management procedures, the Groups seeks to develop a disciplined and constructive
control environment, where all employees understand their duties and obligations.
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Companhia Mineira de Açúcar e Álcool Participações Quarterly information – ITR Quarter ended
June 30, 2020
36
20 Financial instruments (Continued) Credit risk Credit risk is the risk of the Group incurring losses in the event a customer or a counterparty in a
financial instrument fails to comply with its contractual obligations. The risk derives mainly from trade accounts receivable and financial instruments, as shown below.
Credit risk exposure The book values of financial assets represent the maximum credit risk exposure. The maximum
credit risk exposure at the reporting date of the interim financial statements was as follows:
Consolidated Individual
06/30/2020 03/31/2020 06/30/2020 03/31/2020
Cash and cash equivalents 202,419 453,310 14 93
Short-term investments 16,175 16,128 - -
Trade accounts receivable and other receivables 175,798 64,252 293 292
Leases receivable 143,698 196,834 - -
Derivative financial instruments 150,561 303,609 - -
Total 688,651 1,034,133 307 385
Current assets 462,579 673,115 14 93
Noncurrent assets 226,072 361,018 293 292
Cash and cash equivalents The principle adopted by the Company and its subsidiaries is to handle a limited number of
financial institutions, seeking to do business with solid institutions. In addition, another policy
intended to mitigate credit risk is the policy of holding balances of short-term investments in
proportion to the balance of loans and financing with each institution.
The Company and its subsidiaries have not recorded losses on cash and cash equivalents.
Loans and receivables The exposure of the Company and its subsidiaries to credit risk is mainly influenced by the individual characteristics of each customer. In addition, sales are well-distributed throughout the
fiscal year (mainly in the crop period, from March to December of each calendar year), which
enables the Company and its subsidiaries to interrupt deliveries to customers that may be a
potential credit risk.
-
Companhia Mineira de Açúcar e Álcool Participações Quarterly information – ITR Quarter ended
June 30, 2020
37
20 Financial instruments (Continued)
Impairment losses The aging list of trade accounts receivable recorded in current assets at the reporting date of the interim
financial statements for which no impairment losses were recognized is as follows:
Consolidated
06/30/2020 03/31/2020
Falling due 170,723 54,793
Overdue within 30 days 741 2,083
Overdue from 31 to 90 days 3,930 2,915
Overdue from 91 to 180 days 404 4,461
Overdue above 181 days 6 6
175,804 64,258
Allowance for doubtful accounts (6) (6)
175,798 64,252
The Company and its subsidiaries reviewed the present value adjustment of their trade accounts receivable
at June 30, 2020 and March 31, 2020, and concluded that the amounts approximate the related book value,
since the receivables turnover is in the short term.
The allowance for doubtful accounts is recorded based on trade notes overdue for more than 180 days, in
an amount considered sufficient by management to cover probable losses on the realization of trade
accounts receivable. Management assessed the characteristics of its accounts receivable by customer and
does not expect future losses, and no additional allowance for losses is required.
For customers with a history of non-compliance with their financial obligations, the Company and its
subsidiaries seek to require prepayments.
Guarantees Subsidiaries Vale do Tijuco Açúcar e Álcool S.A. and Vale do Pontal Açúcar e Álcool Ltda. are guarantors
with financial entities and credit cooperatives for transactions involving purchase of inputs and financing
to be used in the planting and harvesting of sugarcane of their suppliers. At June 30, 2020, the total amount
guaranteed is R$150,512. The subsidiaries will assume the debt of their suppliers within the limit of the
guarantee provided, in case they fail to pay their obligations. Any amounts disbursed by the Company to
pay the suppliers’ obligations, in the event of default, will be adjusted by reference to the TJLP (Long-Term
Interest Rate), plus 5.5% per annum on a daily “pro-rata” basis, and will be discounted when the sugarcane
is supplied by the supplier.
Liquidity risk Liquidity risk is the risk that the Group may have difficulty in meeting obligations associated with financial
liabilities that are settled by delivering cash or another financial asset. The responsibility for managing
liquidity risk lies with the Group’s Management and Board of Directors, which manages liquidity risk based
on the need for funding and short, medium and long-term liquidity management, having credit facilities
according to cash needs, combining the maturity profiles of their financial assets and liabilities.
-
Companhia Mineira de Açúcar e Álcool Participações Quarterly information – ITR Quarter ended
June 30, 2020
38
20 Financial instruments (Continued)
The Group uses information systems and management tools that provide the conditions for
monitoring cash flow requirements and optimizing its cash return on investments. The Group’s policy is to operate with high liquidity to ensure compliance with operating and financial
obligations for at least one operating cycle; this includes the potential impact of extreme
circumstances that cannot be reasonably anticipated, such as natural disasters and cyclical changes
in the commodities market.
The Company does expect that the cash flows included in the Group’s aging list may occur
significantly earlier or at amounts significantly different.
Liquidity risk exposure
The carrying amount of financial liabilities with liquidity risk is shown below:
Consolidated Individual
06/30/2020 03/31/2020 06/30/2020 03/31/2020
Loans and financing 988,948 1,026,602 - -
Intercompany loans (Note 28) - 11,062 7,441 7,214
Leases and agricultural partnerships payable 326,049 399,550 - -
Trade accounts payable and other payables 112,767 92,582 - 71
Derivative financial instruments 326,225 336,862 - -
Total 1,753,989 1,866,658 7,441 7,285
Current liabilities 565,896 526,881 8 71
Noncurrent liabilities 1,188,093 1,339,776 7,433 7,214
The aging list of financial liabilities is as follows:
Consolidated Book
value
Contractual
flow
Within 12
months
1 to 2
years
2 to 3
years
3 to 4
years
4 to 5
years
Above 5
years
June 30, 2020
Loans and financing 988,948 1,010,417 241,258 274,690 148,441 109,170 102,741 134,117
Leases and agricultural partnership payable
326,049 326,049 42,205 41,853 41,285 37,786 34,820 128,515
Trade accounts payable and other payables
112,767 112,767 111,729 1,038 - - - -
Derivative financial instruments
326,225 326,225 170,704 155,521 - - - -
Total 1,753,989 1,775,458 565,896 473,102 189,726 146,956 137,561 262,632
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Companhia Mineira de Açúcar e Álcool Participações Quarterly information – ITR Quarter ended
June 30, 2020
39
20 Financial instruments (Continued)
Consolidated Book
value
Contractual
flow
Within 12
months
1 to 2
years
2 to 3
years
3 to 4
years
4 to 5
years
Above 5
years
March 31, 2020
Loans and financing 1,026,602 1,048,888 244,548 294,197 177,098 107,754 101,390 101,615
Intercompany loans 11,062 11,062 - 11,062 - - - -
Leases and agricultural partnership payable
399,550 410,176 66,913 51,637 47,780 43,670 40,021 160,155
Trade accounts payable and other payables
92,582 92,582 92,582 - - - - -
Derivative financial instruments
336,862 336,862 122,838 137,145 68,662 7,032 108 1,077
Total 1,866,658 1,899,570 526,881 494,041 293,540 158,456 141,519 262,847
Cash flows included in the Group’s aging list are not expected to occur significantly earlier or in
significantly different amounts.
Market risk Market risk is the risk that changes in market prices, such as exchange rates and interest rates, will affect the Group’s income or the amount of its financial instruments. Through its activities,
the Group is also exposed to financial risks resulting from changes in the price of Total
Recoverable Sugar (ATR), used to calculate the fair value of the biological asset, and in the price
of VHP (Very High Polarization) sugar.
Interest rate risk The Group is exposed to interest rate risks related to loans and financing taken out and