bakfs2018_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 March, 2019

(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.

Consolidated and parent company financial statements

at December 31, 2018

and Independent Auditors' Report

 


 
 
Independent auditor’s report in the individual and consolidated financial statements

 

 

To Shareholders, Members of the Board and Management

Braskem S.A.

Camaçari - Bahia

 

 

Opinion

We have audited the individual and consolidated financial statements of Braskem S.A. (“the Company”), respectively referred to as Parent and Consolidated, which comprise the statement of financial position as at December 31, 2018, the statements of profit or loss and other comprehensive income, changes in equity and cash flows for the year then ended, and notes, comprising significant accounting policies and other explanatory information.

 

Opinion on the individual financial statements

In our opinion, the accompanying individual financial statements present fairly, in all material respects, the financial position of the Braskem S.A. (“the Company”) as at December 31, 2018, and of its financial performance and its cash flows for the year then ended in accordance with Accounting Practices Adopted in Brazil.

 

Opinion on the consolidated financial statements

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Braskem S.A. as at December 31, 2018, and of its consolidated financial performance and its cash flows for the year then ended in accordance with Accounting Practices Adopted in Brazil and with International Financial Reporting Standards (IFRS), issued by the International Accounting Standards Board (IASB).

 

 

1


 
 
Basis for Opinion

We conducted our audit in accordance with Brazilian and International Standards on Auditing. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Individual and Consolidated Financial Statements section of our report. We are independent of the Company and its subsidiaries in accordance with the relevant ethical requirements included in the Accountant Professional Code of Ethics (“Código de Ética Profissional do Contador”) and in the professional standards issued by the Brazilian Federal Accounting Council (“Conselho Federal de Contabilidade”) and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

 

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the current period. These matters were addressed in the context of our audit of the individual and consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

 

Recoverable value of intangible assets with indefinite useful life (goodwill) - notes 3.4 (b) and 13 (a) (individual and consolidated)

The Company maintains a significant balance of intangible assets with indefinite useful life, in connection with the goodwill on business combination, allocated to operating segments of Polyolefins, Vinyls and Chemicals (cash generating unit Químicos Sul).

 

The recoverability of these assets is based on analyses and projections of cash flow. Due to uncertainties inherent to the process of determining future cash flows and some assumptions - such as discount and growth rates, which are the basis for evaluation of recoverable value of such assets, we considered this matter as significant for our audit.

 

How our audit conducted this issue

We understood the process and evaluated the design of internal controls related to the preparation and review of the business plan, budgets and impairment analysis provided by the Company. We used the support of our specialists in corporate finance, we have evaluated assumptions and methodologies used by the Company to forecast cash flows for each segment, such as discount rate based on average capital cost (WAAC), growth rate for the next 5 years, expected sales volume and margin, among others. Also with the assistance of our specialists, sensitivity analyses were conducted in relation to the main assumptions used by management. We also evaluated disclosures made by the Company, including those related to sensitivity analysis, which demonstrate the impact on recoverable value resulting from possible and reasonable changes in key assumptions used by the Company.

 

Based on evidence from the procedures summarized above, we consider that, in relation to its recoverability, the value of intangible assets with indefinite useful life (goodwill), as the related disclosures, are acceptable in the context of individual and consolidated financial statements taken as a whole, for the year ended December 31, 2018.

 

 

 

2


 
 
Designation of hedge accounting - notes 3.6, 19.3 and 19.4 (individual and consolidated)

The Company designates derivative financial instruments and non-derivative financial liabilities as a hedge instruments when adopting hedge accounting policy, and regularly performs effectiveness tests on designated hedge relations.

 

The designation of these financial instruments as a hedge accounting and their measurement of effectiveness, requires the fulfillment of certain formal obligations, and includes the need for the Company to make judgments regarding the effective protection of exchange variation risk and alignment with its business risk management strategy.

 

Considering the complexity involved in designation and regular measurement of effectiveness of hedge accounting relation held by the Company, we consider that as a significant matter for our audit.

 

How our audit conducted this issue

We understood the process and evaluated design and implementation of internal controls related to the hedge accounting process. With the involvement of our valuation specialists in financial instruments, we evaluated the sufficiency of the documentation prepared by the Company supporting the designation as hedge accounting, particularly designations containing the descriptions of all strategies and methodologies adopted for measurement of effectiveness. We also evaluated the adequacy of disclosures made by the Company involving the hedge accounting transactions.

 

Based on the evidences obtained through the procedures summarized above, we considered acceptable the designations maintained as hedge accounting in the context of the individual and consolidated financial statements taken as a whole, for the year ended December 31, 2018.

 

Disclosure about the adoption of the standard IFRS 16/CPC 06(R2) - Leases - note 2.4 (a) (individual and consolidated)

The Company and its subsidiaries maintain operational lease agreements, which include mainly, ships, railcars and properties used on its business. As of January 1, 2019, the Company will adopt the accounting standard IFRS 16/CPC 06(R2) - Leases, and pursuant to IAS8/CPC 23 - Accounting Policies, Change of Estimate and Error Correction, it is required disclose the main impacts arising from this new accounting standard. Due to complexity in the adoption of this new standard, related mainly by the judgments involved in the determination of the incremental borrowing rates used to measure the lease liability, which will be recognized against a right the use of an asset, we consider that as a significant matter for our audit.

 

How our audit conducted this issue

With the assistance of our corporate finance specialists, we evaluated the methodology and assumptions used in determining the incremental borrowing rates by the Company. Our analysis also included, the evaluation about the measurement of the right of use an asset and lease liability, the evaluation about the lease term considering renewing clauses and tests of documents over the agreements database, including lease terms, amounts and renew clauses, as well as, evaluation of the disclosures on the financial statements.

 

 

3


 
 
Based on the evidences obtained through the procedures summarized above, we considered acceptable the disclosures about the impact of the adoption of the accounting standard IFRS16/CPC (02) - Leases in the context of the individual and consolidated financial statements taken as a whole, for the year ended December 31, 2018.

 

Other matters

 

Statements of value added

The individual and consolidated statements of value added (DVA) for the year ended December 31, 2018, prepared under the responsibility of the Company’s management, and presented herein as supplementary information for IFRS purposes, have been subject to audit procedures jointly performed with the audit of the Company's financial statements. In order to form our opinion, we assessed whether those statements are reconciled with the financial statements and accounting records, as applicable, and whether their format and contents are in accordance with criteria determined in the Technical Pronouncement 09 (CPC 09) - Statement of Value Added issued by the Committee for Accounting Pronouncements (CPC). In our opinion, the statements of value added have been fairly prepared, in all material respects, in accordance with the criteria determined by the aforementioned Technical Pronouncement, and are consistent with the overall individual and consolidated financial statements.

 

Other information accompanying the individual and consolidated financial statements and the auditor's report

Management is responsible for the other information comprising the management report.

 

Our opinion on the individual and consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

 

In connection with our audit of the individual and consolidated financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the individual and consolidated financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

 

Responsibilities of Management and Those Charged with Governance for the Individual and Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the individual financial statements in accordance with Accounting Practices Adopted in Brazil, and consolidated financial statements in accordance with Accounting Practices Adopted in Brazil and with International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB), and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

 

In preparing the individual and consolidated financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company and subsidiaries or to cease operations, or has no realistic alternative but to do so.

 

 

4


 
 
Those charged with governance are responsible for overseeing the Company’s and subsidiaries financial reporting process.

 

Auditors’ Responsibilities for the Audit of the Individual and Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the individual and consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Brazilian and international standards on auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

 

As part of an audit in accordance with Brazilian and international standards on auditing, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

 

·            Identify and assess the risks of material misstatement of the individual and consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

 

·            Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s and its subsidiaries internal control.

 

·            Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

 

·            Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s and its subsidiaries ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the individual and consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Company and subsidiaries to cease to continue as a going concern.

 

·            Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the individual and consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

 

5


 
 
·            Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the individual and consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

 

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

 

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

 

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the individual and consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

 

 

São Paulo, March 12, 2019

 

 

KPMG Auditores Independentes

CRC 2SP014428/O-6

Original report in Portuguese signed by

Anselmo Neves Macedo

Accountant CRC 1SP160482/O-6

 

 

6


 
 

Braskem S.A.

 

Statement of financial position at December 31

All amounts in thousands of reais                                                                                                                                                                                   

 
       

 Consolidated

 

 Parent company

Assets

Note

 

2018

 

2017

 

2018

 

2017

   

Current assets

 

Cash and cash equivalents

5

 

   5,547,637

 

   3,775,093

 

   2,016,724

 

   1,953,056

 

Financial investments

6

 

   2,357,613

 

   2,302,672

 

   2,297,566

 

   1,833,320

 

Trade accounts receivable

7

 

   3,075,218

 

   3,281,196

 

   1,766,418

 

   1,824,740

 

Inventories

8

 

   8,486,577

 

   6,846,923

 

   6,042,679

 

   4,800,860

 

Income tax and social contribution

 

 

   773,952

 

   896,225

 

   306,082

 

   473,655

 

Taxes recoverable

10

 

   423,188

 

   452,839

 

   240,905

 

   356,497

 

Dividends and interest on capital

9

 

890

 

  10,859

 

890

 

  10,859

 

Prepaid expenses

   239,500

 

   134,337

 

   168,271

 

   105,255

 

Related parties

9(b)

   

  38,044

 

  30,478

 

Derivatives

19.3.1

 

  27,714

 

3,793

 

6,715

 

3,793

 

Other receivables

 

   451,578

 

   288,391

 

   161,337

 

   232,532

     

 

 

 

 

 

 

 

     

     21,383,867

 

  17,992,328

 

  13,045,631

 

  11,625,045

       

Non-current assets

   
 

Financial investments

6

 

9,998

 

  10,336

 
 

Trade accounts receivable

7

 

  17,785

 

  37,496

 

   244,080

 

   1,336,229

 

Advances to suppliers

8

 

  31,394

 

  46,464

 

  31,394

 

  46,464

 

Taxes recoverable

10

 

   1,369,188

 

   812,718

 

   1,368,033

 

   812,330

 

Income tax and social contribution

   

   241,788

 

   210,915

 

   241,788

 

   210,915

 

Deferred income tax and social contribution

21.2(a)

 

   1,104,158

 

   1,165,726

 
 

Judicial deposits

 

 

   169,536

 

   289,737

 

   158,612

 

   278,006

 

Related parties

9(b)

   

  19,481

 

  16,053

 

Insurance claims

0

 

  63,054

 

  39,802

 

  63,054

 

  39,802

 

Derivatives

19.3.1

 

  46,664

 

  32,666

 
 

Other receivables

 

 

   189,724

 

   112,997

 

   143,864

 

   109,129

 

Investments

11

 

  65,954

 

   101,258

 

   8,762,057

 

   4,915,609

 

Property, plant and equipment

12

 

31,759,890

 

29,761,610

 

15,950,334

 

16,326,216

 

Intangible assets

13

 

   2,740,982

 

   2,727,497

 

   2,509,778

 

   2,501,503

     

 

 

 

 

 

 

 

     

     37,810,115

 

  35,349,222

 

  29,492,475

 

  26,592,256

                   

Total assets

 

  59,193,982

 

  53,341,550

 

  42,538,106

 

  38,217,301

 

The notes are an integral part of the financial statements.

 

1


 
 

Braskem S.A.

 

Statement of financial position at December 31

All amounts in thousands of reais 

Continued

   

       

 Consolidated

 

 Parent company

Liabilities and shareholders' equity

Note

 

2018

 

2017

 

2018

 

2017

                   

Current liabilities

               
 

Trade payables

14

 

8,341,252

 

  5,265,670

 

8,259,259

 

  1,198,842

 

Borrowings

15

 

737,436

 

  1,184,781

 

128,132

 

  382,304

 

Braskem Idesa borrowings

16

 

  10,504,592

 

  9,691,450

 
 

Debenture

17

 

   27,732

 

27,183

 
 

Derivatives

19.3.1

 

   70,305

 

   6,875

 

   70,198

 

 

 

Payroll and related charges

 

645,396

 

  630,517

 

485,800

 

  493,098

 

Income tax and social contribution

 

419,320

 

  840,130

 

   31,429

 

  400,544

 

Taxes payable

20

 

432,005

 

  421,074

 

392,573

 

  373,847

 

Dividends

 

672,395

 

   3,850

 

672,294

 

   3,709

 

Advances from customers

 

153,264

 

  353,222

 

133,002

 

  187,304

 

Leniency agreement

23.3

 

288,123

 

  257,347

 

230,356

 

  202,892

 

Sundry provisions

22

 

191,536

 

  178,676

 

137,424

 

  125,130

 

Accounts payable to related parties

9(b)

   

613,085

 

  783,181

 

Other payables

 

632,774

 

  276,957

 

155,510

 

  104,181

     

 

 

 

 

 

 

 

     

     23,116,130

 

19,137,732

 

  11,309,062

 

   4,255,032

                   

Non-current liabilities

               
 

Trade payables

14

 

273,264

 

  259,737

 

273,264

 

   13,845,472

 

Borrowings

15

 

  24,160,720

 

   22,176,640

 

2,148,993

 

  2,823,692

 

Debenture

17

 

266,777

 

  286,141

 
 

Derivatives

19.3.1

 

161,694

 

 

 

161,694

 

 

 

Taxes payable

20

 

   85,904

 

52,802

 

   85,136

 

50,815

 

Accounts payable to related parties

9(b)

   

  19,200,324

 

  7,197,573

 

Loan to non-controlling shareholders of Braskem Idesa

 

 

2,183,830

 

  1,756,600

 
 

Deferred income tax and social contribution

21.2(a)

 

324,908

 

  940,079

 

   56,395

 

  715,938

 

Post-employment benefits

24.2

 

206,373

 

  193,775

 

   90,679

 

83,233

 

Provision for losses on subsidiaries

 

   

   99,918

 

  102,750

 

Contingencies

23

 

965,317

 

  1,092,645

 

954,538

 

  1,084,528

 

Leniency agreement

23.3

 

1,154,879

 

  1,371,767

 

1,154,879

 

  1,322,051

 

Sundry provisions

22

 

233,006

 

  234,996

 

207,907

 

  213,318

 

Other payables

 

149,935

 

  148,286

 

  7,672

 

   5,048

     

 

 

 

 

 

 

 

     

     30,166,607

 

28,513,468

 

  24,441,399

 

27,444,418

                   

Shareholders' equity

25

               
 

Capital

 

8,043,222

 

  8,043,222

 

8,043,222

 

  8,043,222

 

Capital reserve

 

232,430

 

  232,430

 

232,430

 

  232,430

 

Revenue reserves

 

4,673,220

 

  3,945,898

 

4,673,220

 

  3,945,898

 

Equity valuation adjustments

 

  (6,111,408)

 

(5,653,880)

 

  (6,111,408)

 

(5,653,880)

 

Treasury shares

 

(49,819)

 

   (49,819)

 

(49,819)

 

   (49,819)

     

 

 

 

 

 

 

 

 

Total attributable to the  Company's shareholders

 

6,787,645

 

  6,517,851

 

6,787,645

 

  6,517,851

                   
 

Non-controlling interest in subsidiaries

 

  (876,400)

 

(827,501)

 

 

 

 

                   
     

5,911,245

 

   5,690,350

 

  6,787,645

 

   6,517,851

                   

Total liabilities and shareholders' equity

 

 

  59,193,982

 

53,341,550

 

  42,538,106

 

38,217,301

 

The notes are an integral part of the financial statements.

 

2


 
 

Braskem S.A.

 

Statement of profit or loss

Years ended December 31

All amounts in thousands of reais, except earnings (loss) per share  

 
       

Consolidated

 

Parent company

Continued operations

 

Note

 

2018

 

2017

 

2018

 

2017

   

 

               

Net revenue

 

27

 

   57,999,866

 

   49,260,594

 

41,859,645

 

36,481,806

 Cost of products sold      

(46,407,495)

 

(36,400,748)

 

  (35,764,386)

 

  (28,929,876)

                     
       

   11,592,371

 

   12,859,846

 

   6,095,259

 

   7,551,930

                     

Income (expenses)

                   
 Selling and distribution      

   (1,545,568)

 

   (1,459,608)

 

(898,186)

 

(925,663)

 General and administrative      

   (1,633,003)

 

   (1,434,272)

 

(1,148,537)

 

(865,085)

 Research and development      

   (199,821)

 

   (167,456)

 

(120,547)

 

(105,286)

 Results from equity investments  

11(c)

 

(888)

 

39,956

 

   2,773,148

 

   2,441,996

 Other income (expenses), net

 

29

 

90,852

 

   (479,404)

 

(170,613)

 

(449,092)

                     
       

  8,303,943

 

  9,359,062

 

   6,530,524

 

   7,648,800

                     

Financial results

 

30

               
 Financial expenses      

   (2,983,511)

 

   (3,747,217)

 

(2,015,870)

 

(2,627,262)

 Financial income      

  589,052

 

  603,630

 

   478,533

 

   545,262

 Exchange rate variations, net      

   (2,256,983)

 

   (798,762)

 

(1,991,999)

 

(878,154)

                     
       

(4,651,442)

 

(3,942,349)

 

  (3,529,336)

 

  (2,960,154)

                     

Profit before income tax and social contribution

     

  3,652,501

 

  5,416,713

 

   3,001,188

 

   4,688,646

                     
 Current and deferred income tax and social contribution  

21.1

 

   (745,291)

 

   (1,292,268)

 

(134,513)

 

(614,532)

                     

Profit for the year of continued operations

     

  2,907,210

 

  4,124,445

 

   2,866,675

 

   4,074,114

                     

Discontinued operations results

                   
 Profit from discontinued operations          

13,499

     

  13,499

 Current and deferred income tax and social contribution          

(4,623)

     

  (4,623)

           

   8,876

     

8,876

                     

Profit for the year

     

  2,907,210

 

  4,133,321

 

   2,866,675

 

   4,082,990

                     

Attributable to:

                   
 Company's shareholders      

  2,866,675

 

  4,082,990

        
 Non-controlling interest in subsidiaries      

40,535

 

50,331

       
                     

Profit for the year

     

  2,907,210

 

  4,133,321

        
                     
               

Parent company

               

 2018

 

 2017

   

Note

         

Basic and diluted

 

Basic and diluted

Profit per share attributable to the shareholders of the Company

                   

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

 

26

               
 Earnings per share - common              

  3.6033

 

  5.1214

  Earnings per share - preferred shares class "A"              

  3.6033

 

  5.1214

  Earnings per share - preferred shares class "B"                

  0.5910

 

  0.6069

                     

Profit per share attributable to the shareholders of the Company

                   

of discontinued operations at the end of the year (R$)

                   
 Earnings per share - common                  

  0.0111

 Earnings per share - preferred shares class "A"                  

  0.0111

                     

Profit per share attributable to the shareholders of the Company

                   

at the end of the year (R$)

                   
 Earnings per share - common              

  3.6033

 

  5.1325

 Earnings per share - preferred shares class "A"              

  3.6033

 

  5.1325

 Earnings per share - preferred shares class "B"              

  0.5910

 

  0.5913

 

 

The notes are an integral part of the financial statements.

3


 
 

Braskem S.A.

Statement of comprehensive income
Years ended December 31
All amounts in thousands of reais  

Continued
 
           

 

 

Consolidated

 

 

 

Parent company

     

Note

   

2018

 

2017

 

2018

 

2017

                         

Profit for the year

       

  2,907,210

 

  4,133,321

 

   2,866,675

 

4,082,990

                         

Other comprehensive income:

                     

Items that will be reclassified subsequently to profit or loss

                   
 

Fair value of cash flow hedge

       

   (151,718)

 

  605,204

 

(224,147)

 

   540,628

 

Income tax and social contribution

       

54,481

 

   (203,186)

 

  76,210

 

  (183,813)

 

Fair value of cash flow hedge - Braskem Idesa

               

  54,321

 

  48,432

 

Income tax and social contribution

               

   (16,296)

 

(14,530)

 

Fair value of cash flow hedge from jointly-controlled

       

(2,329)

 

   3,534

 

  (2,329)

 

3,534

         

  (99,566)

 

  405,552

 

(112,241)

 

   394,251

                         
 

Exchange variation of foreign sales hedge

 

19.4(a.i)

   

   (3,145,857)

 

   (397,045)

 

(3,145,857)

 

  (397,045)

 

Sales Hedge - transfer to profit or loss

 

19.4(a.i)

   

  1,022,782

 

  1,022,830

 

   1,022,782

 

   1,022,830

 

Income tax and social contribution on exchange variation

 

 

   

  721,845

 

   (212,767)

 

   721,845

 

  (212,767)

 

Exchange variation of foreign sales hedge - Braskem Idesa

 

19.4(a.ii)

   

16,681

 

  472,717

 

  12,511

 

   354,538

 

Sales Hedge - transfer to profit or loss - Braskem Idesa

 

19.4(a.ii)

   

  236,570

 

  163,696

 

   177,427

 

   122,772

 

Income tax on exchange variation - Braskem Idesa

       

  (75,975)

 

   (190,924)

 

   (56,981)

 

  (143,193)

           

   (1,223,954)

 

  858,507

 

(1,268,273)

 

   747,135

                         
 

Foreign subsidiaries currency translation adjustment

       

  801,223

 

(602)

 

   946,342

 

  51,445

           

 

 

 

 

 

 

 

 

Total

       

(522,297)

 

  1,263,457

 

  (434,172)

 

1,192,831

                         

Items that will not be reclassified to profit or loss

                     
 

Defined benefit plan actuarial loss, net of taxes

       

(1,569)

 

(8,654)

 

  (1,569)

 

   (8,654)

 

Long term incentive plan, net of taxes

       

   6,406

 

 

 

6,406

 

 

 

Loss on investments

       

   (65)

 

 

 

(65)

 

 

                         
 

Total

       

   4,772

 

(8,654)

 

4,772

 

   (8,654)

                         

Total comprehensive income for the year

       

  2,389,685

 

  5,388,124

 

   2,437,275

 

5,267,167

                         

Attributable to:

                     
 

Company's shareholders

       

  2,437,275

 

  5,267,167

       
 

Non-controlling interest in Braskem Idesa

       

  (47,590)

 

  120,957

       
           

 

 

 

       

Total comprehensive income for the year

       

  2,389,685

 

  5,388,124

       

 

The notes are an integral part of the financial statements.

4


 
 

Braskem S.A.

 

Statement of changes in equity

All amounts in thousands of reais

 
 
     

Consolidated

     

Attributed to shareholders' interest

         
             

Revenue reserves

             

Total

       
                         

Additional

 

Equity

         

Braskem

 

Non-controlling

 

Total

         

Capital

 

Legal

 

Tax

 

Retention

 

dividends

 

valuation

 

Treasury

 

Retained

 

shareholders'

 

interest in

 

shareholders'

 

Note

 

Capital

 

reserve

 

reserve

 

incentive

 

of profits

 

proposed

 

adjustments

 

shares

 

earnings

 

interest

 

subsidiaries

 

equity

                                                   

At December 31, 2016

 

   8,043,222

 

   232,430

 

   229,992

 

   

  604,624

 

 

 

  (6,321,859)

 

   (49,819)

 

    

 

2,738,590

 

   (1,017,880)

 

   1,720,710

                                             
                                             

Comprehensive income for the year:

     

 

     

 

   

Profit for the year

     

   4,082,990

 

4,082,990

 

   50,331

 

  4,133,321

Exchange variation of foreign sales hedge, net of taxes

 

   747,135

     

747,135

 

111,372

 

  858,507

Fair value of cash flow hedge, net of taxes

 

   394,251

     

394,251

 

   11,301

 

  405,552

Foreign subsidiaries currency translation adjustment

 

  51,445

     

   51,445

 

    (52,047)

 

(602)

   

   1,192,831

   

   4,082,990

 

5,275,821

 

120,957

 

  5,396,778

                       

Equity valuation adjustments:

                 

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

 

   (26,847)

   

  26,847

     

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

 

  (963)

   

963

     

Actuarial loss with post-employment benefits, net of taxes

 

  (8,654)

   

  

 

   (8,654)

   

(8,654)

     

   (36,464)

 

 

 

  27,810

 

   (8,654)

   

(8,654)

Contributions and distributions to shareholders:

                 

  

Lapsed dividends

     

482

 

  482

   

   482

Tax incentive reserve

   

   71,745

     

   (71,745)

 

 

   

  

Prepaid dividends

     

(1,000,000)

 

  (1,000,000)

   

   (1,000,000)

Legal reserve

 

  204,150

   

(204,150)

 

Additional dividends proposed

   

 

 

1,500,000

   

(1,500,000)

 

Retained earnings

   

1,335,387

 

 

   

(1,335,387)

 

Goodwill on the acquisition of a subsidiary under common control

     

(488,388)

   

  

 

  (488,388)

 

  

 

   (488,388)

Non-controlling interest in subsidiaries

       

  

 

   69,422

 

69,422

   

  204,150

 

   71,745

 

1,335,387

 

1,500,000

 

(488,388)

 

  

 

(4,110,800)

 

  (1,487,906)

 

   69,422

 

   (1,418,484)

                                         

At December 31, 2017

 

   8,043,222

 

   232,430

 

   434,142

 

71,745

 

  1,940,011

 

  1,500,000

 

  (5,653,880)

 

   (49,819)

 

  

 

6,517,851

 

   (827,501)

 

   5,690,350

                                                 

Comprehensive income for the year:

                                               

Profit for the year

   

 

   

   2,866,675

 

2,866,675

 

   40,535

 

  2,907,210

Exchange variation of foreign sales hedge, net of taxes

   

(1,268,273)

     

  (1,268,273)

 

   44,319

 

   (1,223,954)

Fair value of cash flow hedge, net of taxes

   

(112,241)

     

  (112,241)

 

   12,675

 

  (99,566)

Foreign currency translation adjustment

   

   946,342

     

946,342

 

  (145,119)

 

  801,223

     

(434,172)

   

   2,866,675

 

2,432,503

 

(47,590)

 

  2,384,913

                         

Equity valuation adjustments:

             

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

   

   (26,717)

   

  26,717

 

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

   

  (962)

   

962

 

Actuarial gains post-employment benefits of subsidiaries , net of taxes

   

  (1,569)

     

   (1,569)

 

 

 

(1,569)

Long term incentive plan, net of taxes

   

6,406

     

  6,406

 

  133

 

   6,539

Fair value adjustments of trade accounts receivable

   

  (449)

     

  (449)

 

 

 

(449)

       

   (23,291)

 

 

 

  27,679

 

  4,388

 

  133

 

   4,521

Contributions and distributions to shareholders:

                 

 

     

 

Prescribed dividends

       

460

 

  460

 

 

 

   460

Additional dividends approved in the boar meeting

25(e.2)

   

   (1,500,000)

   

(73)

 

  (1,500,073)

 

   (1,396)

 

   (1,501,469)

Reversal of fiscal incentive

 

     

130

 

Legal reserve

25(e.1)

         

  143,334

                     

(143,334)

 

Tax incentive reserve

25(e.1)

             

   81,863

                 

   (81,863)

 

Mandatory minimum dividends

25(e.1)

                                 

(667,419)

 

  (667,419)

     

   (667,419)

Additional dividends proposed

25(e.1)

                 

 

 

2,002,255

         

(2,002,255)

 

 

     

 

Loss on investments

   

(65)

   

  (65)

 

65

 

  

Sale of investments

   

   (111)

 

(111)

     

  143,334

 

   81,733

 

 

 

502,255

 

(65)

 

  

 

(2,894,354)

 

  (2,167,097)

 

  (1,442)

 

   (2,168,539)

                                                 

At December 31, 2018

 

   8,043,222

 

   232,430

 

   577,476

 

  153,478

 

  1,940,011

 

  2,002,255

 

  (6,111,408)

 

   (49,819)

 

 

 

6,787,645

 

   (876,400)

 

   5,911,245

 

The notes are an integral part of the financial statements.

5


 
 

Braskem S.A.

 

Statement of changes in equity

All amounts in thousands of reais


     

Parent company

     

Attributed to shareholders' interest

 
             

Revenue reserves

             

Total

                         

Additional

 

Equity

         

Braskem

         

Capital

 

Legal

 

Tax

 

Retention

 

dividends

 

valuation

 

Treasury

 

Retained

 

shareholders'

 

Note

 

Capital

 

reserve

 

reserve

 

incentive

 

of profits

 

proposed

 

adjustments

 

shares

 

earnings

 

interest

                                           

At December 31, 2016

   

   8,043,222

 

   232,430

 

   229,992

 

 

 

  604,624

 

 

 

  (6,321,859)

 

  (927)

 

 

 

2,787,482

                                           

Comprehensive income for the year:

                                         

Profit for the year

                       

 

 

 

 

   4,082,990

 

4,082,990

Exchange variation of foreign sales hedge, net of taxes

               

   747,135

         

747,135

Fair value of cash flow hedge, net of taxes

               

   394,251

       

394,251

Foreign subsidiaries currency translation adjustment

       

 

 

 

 

 

 

  51,445

         

   51,445

     

  

 

 

 

 

 

 

 

 

 

  

 

   1,192,831

     

   4,082,990

 

5,275,821

                                           

Equity valuation adjustments:

                                         

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

                           

   (26,847)

   

  26,847

   

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

                         

  (963)

     

963

   

Actuarial loss with post-employment benefits, net of taxes

                           

  (8,654)

   

 

 

   (8,654)

                             

   (36,464)

     

  27,810

 

   (8,654)

Contributions and distributions to shareholders:

                                       

 

Lapsed dividends

                                   

482

 

  482

Addition by merger of subsidiary

                               

(48,892)

 

 

 

(48,892)

Goodwill on the acquisition of a subsidiary under common control

                           

(488,388)

     

 

 

  (488,388)

Tax incentive reserve

               

   71,745

                 

   (71,745)

 

 

Prepaid dividends

                                 

(1,000,000)

 

  (1,000,000)

Legal reserve

           

  204,150

                     

(204,150)

 

 

Additional dividends proposed

           

 

         

1,500,000

         

(1,500,000)

 

 

Retained earnings

           

 

     

1,335,387

 

 

         

(1,335,387)

 

 

             

  204,150

 

   71,745

 

1,335,387

 

1,500,000

 

(488,388)

 

(48,892)

 

(4,110,800)

 

  (1,536,798)

                                           

At December 31, 2017

   

   8,043,222

 

   232,430

 

   434,142

 

71,745

 

  1,940,011

 

  1,500,000

 

  (5,653,880)

 

   (49,819)

 

 

 

6,517,851

                                           

Comprehensive income for the year:

                                         

Profit for the year

                         

 

     

   2,866,675

 

2,866,675

Exchange variation of foreign sales hedge, net of taxes

                       

(1,268,273)

         

  (1,268,273)

Fair value of cash flow hedge, net of taxes

                         

(112,241)

         

  (112,241)

Foreign currency translation adjustment

                         

   946,342

         

946,342

                           

(434,172)

     

   2,866,675

 

2,432,503

                                         

Equity valuation adjustments:

                                       

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

                         

   (26,717)

     

  26,717

   

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

                         

  (962)

     

962

   

Actuarial gains post-employment benefits of subsidiaries , net of taxes

                         

  (1,569)

         

   (1,569)

Long term incentive plan, net of taxes

                         

6,406

         

  6,406

Fair value adjustments of trade accounts receivable

                         

  (449)

         

   (449)

                           

   (23,291)

     

  27,679

 

  4,388

Contributions and distributions to shareholders:

                                     

 

Prescribed dividends

                                 

460

 

  460

Additional dividends approved in the boar meeting

25(e.2)

                   

   (1,500,000)

         

(73)

 

  (1,500,073)

Reversal of fiscal incentive

             

   (130)

     

 

         

130

   

Legal reserve

25(e.1)

       

  143,334

                     

(143,334)

   

Tax incentive reserve

25(e.1)

           

   81,863

                 

   (81,863)

   

Mandatory minimum dividends

25(e.1)

                                 

(667,419)

 

  (667,419)

Additional dividends proposed

25(e.1)

                     

2,002,255

         

(2,002,255)

 

 

Loss on investments