Oxiteno S. A. - Indústria e Comércio and Subsidiary Companies

Transcription

1 O x i t e n o

2 Balance sheet at December 31, 2001 and 2000 C o n s o l i d a t e d A s s e t s Current assets C a s h 8, 469 5, 522 Temporary cash investments 380, , 287 Accounts receivable 50, , 513 I n v e n t o r i e s 78, , 167 Recoverable taxes 45, , 584 Dividends receivable O t h e r 7, 188 7, , , 456 Noncurrent assets Related parties 4, 267 4, 267 Deferred tax credits 9, 352 6, 454 Judicial deposits 1, 218 2, 123 O t h e r 571 1, , , 583 Permanent assets I n v e s t m e n t s 88, , 578 P r o p e r t y, plant and equipment 308, , 945 Deferred charges 2, 850 4, , , , , 436 2

3 Balance sheet at December 31, 2001 and 2000 C o n s o l i d a t e d Liabilities and shareholders investment Current liabilities Bank loans 77, , 685 S u p p l i e r s 31, , 863 Dividends payable 8, 995 7, 486 Accrued income and social contribution taxes Salaries and related charges 24, , 541 Other taxes payable 2, 480 2, 583 O t h e r 17, , , , 679 Long-term liabilities Related companies 11, , 989 Bank loans 57, , 158 Deferred income and social contribution taxes 23, , 193 Other taxes 12, , , , 249 Minority interest 11, , 644 Shareholders' investment Capital stock 299, , 361 Revaluation reserves 8, 100 9, 412 Income reserves 399, , 079 Retained earnings 82, , , 864 Total investment of shareholders (controlling and minority) 718, , , , 436 3

4 Statements of income years ended December 31, 2001 and 2000 C o n s o l i d a t e d S a l e s 973, , 285 R e t u r n s, discounts and sales taxes ( 132, 394 ) ( 111, 256 ) 840, , 029 Cost of products sold ( 568, 119 ) ( 488, 557 ) Gross profit 272, , 472 Operating income (expenses) S e l l i n g ( 53, 910 ) ( 42, 415 ) Management compensation ( 1, 628 ) ( 1, 584 ) General and administrative ( 53, 470 ) ( 49, 337 ) Depreciation and amortization ( 2, 958 ) ( 3, 199 ) Employee profit sharing ( 12, 870 ) ( 11, 852 ) Other operating income 2, Equity in subsidiaries and affiliates 25, , 292 Income from operations before financial items 175, , 287 Financial income 67, , 960 Financial expenses ( 61, 445 ) ( 32, 455 ) Taxes on financial transactions ( 10, 628 ) ( 7, 167 ) ( 4, 886 ) 21, 338 Income from operations 170, , 625 Non-operating expenses, net ( 5, 939 ) ( 6, 110 ) Income before taxes on income 164, , 515 Income and social contribution taxes C u r r e n t ( 39, 467 ) ( 40, 616 ) D e f e r r e d ( 823 ) 2, 072 ( 40, 290 ) ( 38, 544 ) Net income 124, , 971 4

5 Summary of the notes to the financial statements at December 31, 2001 and Significant Accounting Practices The consolidated statements include the accounts of the Company, Oxiteno Nordeste S. A. Indústria e Comércio, Camaçari Renovada S. A. and Oxiteno International Corporation. The affiliated company Terminal Químico de Aratu S. A. Tequimar was consolidated proportionally to the stake of the Company in its capital (19.02 % ). 2. Bank Loans (Consolidated) A n n u a l Pa y m e n t f i n a n c i a l period and c h a r g e s m a t u r i t y Foreign currency Foreign loans for acquisition of inventories and property, plant and equipment 3, , 204 Interest of 6.2% S e m i a n n u a l to 10.5% plus and annual up exchange variation to 2003 Foreign loan IFC 23, , 453 Interest of 9.4% S e m i a n n u a l plus exchange up to 2003 v a r i a t i o n Advances on foreign exchange contracts 33, , 610 Interest of 2.8% Maximum of 128 to 6.0% plus days after exchange variation contract date 60, , 267 Local currency BNDES National Economic and Social Development Bank 60, , 036 Interest up Monthly and to 6.5% plus TJLP s e m i a n n u a l or IGP-indices up to 2008 FINAME Government Agency for Equipment Financing 11, , 807 Interest up M o n t h l y to 5.5% up to 2006 plus TJLP Repass loans 1, 543 3, 733 Interest up M o n t h l y to 4.0% up to 2002 plus TJLP 73, , 576 Total financings 134, , 843 Current ( 77, 436 ) ( 95, 685 ) Long-term 57, , 158 5

6 Summary of the notes to the financial statements at December 31, 2001 and 2000 The long-term position matures as follows: C o n s o l i d a t e d , , , , 645 8, , 739 5, onwards 8, 231 7, , , Dividends During 2001, quarterly dividends amounting to R$ 22,591 have been paid, equivalent to R$ per common share and R$ per preferred share. The distribution of income for 2001 is summarized as follows: 2001 Net income 124, 190 Legal reserve ( 6, 210 ) Unrealized income reserve ( 15, 241 ) Current income available for dividends 102, 739 Dividends (of which R$ 22,591 was paid in advance) 25, 685 Remaining balance transferred to profit retention reserve 77, 054 % of dividends paid and proposed in relation to income available for dividends

7 Summary of the notes to the financial statements at December 31, 2001 and 2000 In addition, the Company's management proposed to pay dividends of R$ 4,938 calculated on the amount of R$ 19,752 in connection with the reversal of the unrealized income reserve. The sum of dividends payable for the year and dividends payable on the realization of the unrealized income reserve total R$ per common share and R$ per preferred share. The Company's management proposed the retention of retained earnings heading the caption "Income reserves", in order to provide for the expansion project established in its investment plan. 4. Risks and Financial Instruments (Consolidated) The major risk factors the Company is exposed to reflect both strategic-operating and economic-financial aspects. The former (such as industry demand behavior, competition, technological innovation, relevant shifts in the industry structure, among others) are addressed by the Company's management model. The latter reflect mainly credit losses, macroeconomic factors such as foreign currency exchange rates and interest rates, as well as the features of the financial instruments used by the Company. These risks are managed by control policies, specific strategies and definition of limits, as follows: Credit Losses - These risks are addressed by specific policies on customer acceptance and credit analysis, besides being mitigated by the diversification of sales. The Company and the subsidiary Oxiteno Nordeste recorded allowances for potential losses from Argentine customers amounting to R$ 1,265 (R$ 6,094 - consolidated). As of December 31, 2001, accounts receivable from Argentine customers, net of allowances, amounted to R$ 1,201 (R$ 28,021 - consolidated). Interest Rates - The Company has conservative policies for funding and financial investments aimed at minimizing the cost of capital. The temporary investment of funds has been made in operations linked to Interbank Deposit Rates CDI. A portion of these funds is used as a foreign currency hedge, as indicated below. Funding has originated from BNDES loans denominated in local currency and foreign currency denominated loans, as disclosed in Note 8. Foreign Currency Exchange Rates - The Company makes use of exchange risk hedge instruments available in the financial market to cover its obligations denominated in foreign currency. In light of the instability of the currency exchange rate during 2001, the Company decided to hedge all of those obligations. Assets and liabilities denominated in foreign currency as of December 31, 2001 were as follows: 2001 Foreign currency denominated loans 60, 619 Accounts payable to suppliers denominated in U. S. dollars (imports) 12, 193 Total consolidated debt denominated in U. S. dollars 72, 812 Temporary cash investments with foreign currency hedge 65, 891 Temporary cash investments denominated in U. S. dollars 81, 214 Accounts receivable from foreign customers, net of advances under foreign currency contracts 10, 178 Total consolidated assets denominated in U. S. dollars 157, 283 Net assets denominated in U. S. dollars 84, 471 7

8 Summary of the notes to the financial statements at December 31, 2001 and 2000 The Company and its subsidiaries recognized the net effect of the devaluation of the Brazilian currency in 2001 in income, declining use of the deferral option provided for by CVM Ruling N 404/01. Except for the investment in Petroquímica União S. A. discussed below, Company's management did not identify the need for other specific disclosures required by CVM Instruction N 235/95, since other financial instruments for assets and liabilities presented in the financial statements as of December 31, 2001 were defined in accordance with the criteria and accounting practices disclosed in specific explanatory notes, and the recorded amounts approximate the respective market values as of that date. The investment in Petroquímica União S. A., representing 1.95% of that Company's total capital, acquired at a privatization auction in 1994, is reflected in the financial statements at restated cost through December 31, 1995, amounting to R$ 18,694. The market value of this interest, determined based on the quotation of the shares on the Stock Exchange, was approximately R$ 11,993 as of December 31, Company management believes that the valuation at restated cost mentioned in the preceding paragraph is fairly supported, considering that this investment in Petroquímica União S. A. has a clearly defined strategic and permanent nature, since that company is an important supplier of raw material for the Company. In addition, this investment was acquired through long-term financing with BNDES, at favorable interest rates compared with those prevailing in the market. The complete financial statements, published in Diário Oficial and Gazeta Merc a n t i l newspapers in the State of São Paulo on February 26, 2001, were audited by Arthur Andersen S/C, who issued an unqualified opinion thereon dated January 29,