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FINANCIAL INSTRUMENTS (Tables) | 12 Months Ended
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Dec. 31, 2017
FINANCIAL INSTRUMENTS |
Schedule of market value of financial instruments |
|  | 2017 |  | 2016 |
|  | Book |  | Fair |  | Book |  | Fair |
|  | value |  | value |  | value |  | value |
Assets |  |  |  |  |  |  |  |  |
Cash and cash equivalents |  | 2,555,338 |  | 2,555,338 |  | 5,063,383 |  | 5,063,383 |
Short-term investments |  | 821,518 |  | 821,518 |  | 1,024,411 |  | 1,024,411 |
Trade accounts receivable |  | 2,798,420 |  | 2,798,420 |  | 3,576,699 |  | 3,576,699 |
Related parties |  | 51,839 |  | 51,839 |  | 57,541 |  | 57,541 |
Unrealized gains on derivatives |  | — |  | — |  | 12,951 |  | 12,951 |
Judicial deposits |  | 2,051,181 |  | 2,051,181 |  | 1,861,784 |  | 1,861,784 |
Other current assets |  | 469,737 |  | 469,737 |  | 668,895 |  | 668,895 |
Other non-current assets |  | 542,973 |  | 542,973 |  | 447,260 |  | 447,260 |
Liabilities |  |  |  |  |  |  |  |  |
Trade accounts payable |  | 3,179,954 |  | 3,179,954 |  | 2,743,818 |  | 2,743,818 |
Loans and Financing |  | 16,461,656 |  | 17,102,512 |  | 20,417,810 |  | 20,716,266 |
Debentures |  | 47,928 |  | 47,928 |  | 165,423 |  | 165,423 |
Unrealized losses on financial instruments |  | 1,267 |  | 1,267 |  | 6,584 |  | 6,584 |
FIDC Obligation |  | 1,135,077 |  | 1,135,077 |  | 1,007,259 |  | 1,007,259 |
Other current liabilities |  | 625,410 |  | 625,410 |  | 514,599 |  | 514,599 |
Other non-current liabilities |  | 653,670 |  | 653,670 |  | 401,582 |  | 401,582 |
Schedule of capital management risk |
WACC |  | between 10% to 13% a year |
Net debt/EBITDA |  | less than or equal to 2.5 times |
Net Financial Expenses Coverage Ratio |  | greater than 5.5 times |
Debt/Equity Ratio |  | less than or equal to 60% |
Schedule of maturity of contractual obligations for liquidity risk |
|  | 2017 |
Contractual obligations |  | Total |  | Less than 1 year |  | 1-3 years |  | 4-5 years |  | More than 5 years |
Trade accounts payable |  | 3,179,954 |  | 3,179,954 |  | — |  | — |  | — |
Loans and financings |  | 24,470,750 |  | 3,191,793 |  | 6,060,186 |  | 3,168,144 |  | 12,050,627 |
Debentures |  | 59,128 |  | — |  | 6,528 |  | 40,289 |  | 12,311 |
Unrealized losses on financial instruments |  | 1,267 |  | 1,267 |  | — |  | — |  | — |
Obligations with FIDC |  | 1,135,077 |  | — |  | — |  | — |  | 1,135,077 |
Other current liabilities |  | 625,410 |  | 625,410 |  | — |  | — |  | — |
Other non-current liabilities |  | 653,670 |  | — |  | 13,209 |  | — |  | 640,461 |
|  | 30,125,256 |  | 6,998,424 |  | 6,079,924 |  | 3,208,433 |  | 13,838,475 |
|  | 2016 |
Contractual obligations |  | Total |  | Less than 1 year |  | 1-3 years |  | 4-5 years |  | More than 5 years |
Trade accounts payable |  | 2,743,818 |  | 2,743,818 |  | — |  | — |  | — |
Loans and financings |  | 29,258,030 |  | 5,940,222 |  | 4,818,322 |  | 8,443,080 |  | 10,056,406 |
Debentures |  | 277,879 |  | — |  | — |  | 93,488 |  | 184,391 |
Unrealized losses on financial instruments |  | 6,584 |  | 6,584 |  | — |  | — |  | — |
Obligations with FIDC |  | 1,007,259 |  | — |  | — |  | — |  | 1,007,259 |
Other current liabilities |  | 514,599 |  | 514,599 |  | — |  | — |  | — |
Other non-current liabilities |  | 401,582 |  | — |  | 11,081 |  | — |  | 390,501 |
|  | 34,209,751 |  | 9,205,223 |  | 4,829,403 |  | 8,536,568 |  | 11,638,557 |
Schedule of sensitivity analysis |
Assumptions |  | Percentage of change |  | 2017 |  | 2016 |
Foreign currency sensitivity analysis |  | 5% |  | 129,209 |  | 253,294 |
Interest rate sensitivity analysis |  | 10 bps |  | 54,908 |  | 63,416 |
Sensitivity analysis of changes in prices of products sold |  | 1% |  | 369,176 |  | 376,517 |
Sensitivity analysis of changes in raw material and commodity prices |  | 1% |  | 234,239 |  | 228,637 |
Sensitivity analysis of interest rate and foreign currency swaps |  | 10 bps/5% |  | 6,479 |  | 9,870 |
Sensitivity analysis of NDF (Non Deliverable Forwards) |  | 5% |  | 1,480 |  | 15,816 |
Schedule of financial instruments per category |
2017 Assets |  | Loans and receivables |  | Assets at fair value with gains and losses recognized in income |  | Total |
Cash and cash equivalents |  | 2,555,338 |  | — |  | 2,555,338 |
Short-term investments |  | — |  | 821,518 |  | 821,518 |
Trade accounts receivable |  | 2,798,420 |  | — |  | 2,798,420 |
Related parties |  | 51,839 |  | — |  | 51,839 |
Judicial deposits |  | 2,051,181 |  | — |  | 2,051,181 |
Other current assets |  | 469,737 |  | — |  | 469,737 |
Other non-current assets |  | 462,735 |  | 80,238 |  | 542,973 |
Total |  | 8,389,250 |  | 901,756 |  | 9,291,006 |
Financial income |  | 177,466 |  | 87,242 |  | 264,708 |
Liabilities |  | Liabilities at fair value with gains and losses recognized in income |  | Other financial liabilities at amortized cost |  | Total |
Trade accounts payable |  | — |  | 3,179,954 |  | 3,179,954 |
Loans and financings |  | — |  | 16,461,656 |  | 16,461,656 |
Debentures |  | — |  | 47,928 |  | 47,928 |
FIDC Obligation |  | — |  | 1,135,077 |  | 1,135,077 |
Other current liabilities |  | — |  | 625,410 |  | 625,410 |
Other non-current liabilities |  | — |  | 653,670 |  | 653,670 |
Unrealized losses on financial instruments |  | 1,267 |  | — |  | 1,267 |
Total |  | 1,267 |  | 22,103,695 |  | 22,104,962 |
Financial income (expenses) |  | (12,503 | ) | (1,395,553 | ) | (1,408,056 | )
2016 Assets |  | Loans and receivables |  | Assets at fair value with gains and losses recognized in income |  | Assets at fair value with gains and losses recognized in shareholder’s equity |  | Total |
Cash and cash equivalents |  | 5,063,383 |  | — |  | — |  | 5,063,383 |
Short-term investments |  | — |  | 1,024,411 |  | — |  | 1,024,411 |
Unrealized gains on financial instruments |  | — |  | — |  | 12,951 |  | 12,951 |
Trade accounts receivable |  | 3,576,699 |  | — |  | — |  | 3,576,699 |
Related parties |  | 57,541 |  | — |  | — |  | 57,541 |
Judicial deposits |  | 1,861,784 |  | — |  | — |  | 1,861,784 |
Other current assets |  | 668,895 |  | — |  | — |  | 668,895 |
Other non-current assets |  | 380,211 |  | 67,049 |  | — |  | 447,260 |
Total |  | 11,608,513 |  | 1,091,460 |  | 12,951 |  | 12,712,924 |
Financial income |  | 100,150 |  | 300,123 |  | — |  | 400,273 |
Liabilities |  | Liabilities at fair value with gains and losses recognized in income |  | Other financial liabilities at amortized cost |  | Total |
Trade accounts payable |  | — |  | 2,743,818 |  | 2,743,818 |
Loans and financings |  | — |  | 20,417,810 |  | 20,417,810 |
Debentures |  | — |  | 165,423 |  | 165,423 |
FIDC Obligation |  | — |  | 1,007,259 |  | 1,007,259 |
Other current liabilities |  | — |  | 514,599 |  | 514,599 |
Other non-current liabilities |  | — |  | 401,582 |  | 401,582 |
Unrealized losses on financial instruments |  | 6,584 |  | — |  | 6,584 |
Total |  | 6,584 |  | 25,250,491 |  | 25,257,075 |
Financial income (expenses) |  | (58,068 | ) | (1,287,460 | ) | (1,345,528 | )
Summary of derivative instruments |
|  |  |  |  |  | Notional value |  | Amount receivable |  | Amount payable |
Contracts |  | Position |  | 2017 |  | 2016 |  | 2017 |  | 2016 |  | 2017 |  | 2016 |
Forward |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Maturity at 2017 |  |  |  | purchase in US$ |  | — |  | US$ | 84.8 million |  | — |  | 734 |  | — |  | (6,584 | )
Maturity at 2017 |  |  |  | sell in US$ |  | — |  | US$ | 15.0 million |  | — |  | 1,823 |  | — |  | — |
Cross currency swap |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Maturity in 2017 |  | receivable under the swap |  | Libor 6M + 2.25% |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | payable under the swap |  | INR 11.02% |  | — |  | US$ | 25.0 million |  | — |  | 5,684 |  | — |  | — |
Maturity in 2019 |  | receivable under the swap |  | Libor 6M +2% |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | payable under the swap |  | INR 10.17% |  | US$ | 40.0 million |  | US$ | 40.0 million |  | — |  | 4,710 |  | (1,267 | ) | — |
Total fair value of financial instruments |  |  |  |  |  |  |  |  |  | — |  | 12,951 |  | (1,267 | ) | (6,584 | )
Summary of prospective and retrospective tests of derivative financial instruments |
|  | 2017 |  | 2016 |
Unrealized gains on financial instruments |  |  |  |  |
Current assets |  | — |  | 2,557 |
Non-current assets |  | — |  | 10,394 |
|  | — |  | 12,951 |
Unrealized losses on financial instruments |  |  |  |  |
Current liabilities |  | — |  | (6,584 | )
Non-current liabilities |  | (1,267 | ) | — |
|  | (1,267 | ) | (6,584 | )
|  | 2017 |  | 2016 |
Net Income |  |  |  |  |
Gains on financial instruments |  | 9,666 |  | 33,753 |
Losses on financial instruments |  | (19,107 | ) | (72,683 | )
|  | (9,441 | ) | (38,930 | )
Other comprehensive income |  |  |  |  |
(Losses) Gains on financial instruments |  | (11,364 | ) | 212 |
|  | (11,364 | ) | 212 |
Schedule of financial assets and liabilities measures at fair value on recurring basis | Financial assets and liabilities of the Company, measured at fair value on a recurring basis and subject to disclosure requirements of IFRS 7 as of December 31, 2017, are as follows:
|  | Fair Value Measurements at Reporting Date Using |
|  |  |  |  |  | Quoted Prices Active Markets for Identical Assets (Level 1) |  | Quoted Prices in Non-Active Markets for Similar Assets (Level 2) |
|  | 2017 |  | 2016 |  | 2017 |  | 2016 |  | 2017 |  | 2016 |
Current assets |  |  |  |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents |  | 2,555,338 |  | 5,063,383 |  | — |  | — |  | 2,555,338 |  | 5,063,383 |
Short-term investments - Held for Trading |  | 821,518 |  | 1,024,411 |  | 238,008 |  | 458,639 |  | 583,510 |  | 565,772 |
Trade Accounts receivable |  | 2,798,420 |  | 3,576,699 |  | — |  | — |  | 2,798,420 |  | 3,576,699 |
Unrealized gains on financial instruments |  | — |  | 2,557 |  | — |  | — |  | — |  | 2,557 |
Other current assets |  | 469,737 |  | 668,895 |  | — |  | — |  | 469,737 |  | 668,895 |
Non-current assets |  |  |  |  |  |  |  |  |  |  |  |  |
Related parties |  | 51,839 |  | 57,541 |  | — |  | — |  | 51,839 |  | 57,541 |
Unrealized gains on financial instruments |  | — |  | 10,394 |  | — |  | — |  | — |  | 10,394 |
Judicial deposits |  | 2,051,181 |  | 1,861,784 |  | — |  | — |  | 2,051,181 |  | 1,861,784 |
Other non-current assets |  | 542,973 |  | 447,260 |  | — |  | — |  | 542,973 |  | 447,260 |
|  | 9,291,006 |  | 12,712,924 |  | 238,008 |  | 458,639 |  | 9,052,998 |  | 12,254,285 |
Current liabilities |  |  |  |  |  |  |  |  |  |  |  |  |
Trade accounts payable |  | 3,179,954 |  | 2,743,818 |  | — |  | — |  | 3,179,954 |  | 2,743,818 |
Short-term debt |  | 2,004,341 |  | 4,458,220 |  | — |  | — |  | 2,004,341 |  | 4,458,220 |
Unrealized losses on financial instruments |  | — |  | 6,584 |  | — |  | — |  | — |  | 6,584 |
Other current liabilities |  | 625,410 |  | 514,599 |  | — |  | — |  | 625,410 |  | 514,599 |
Non-current liabilities |  |  |  |  |  |  |  |  |  |  |  |  |
Long-term debt |  | 14,457,315 |  | 15,959,590 |  | — |  | — |  | 14,457,315 |  | 15,959,590 |
Debentures |  | 47,928 |  | 165,423 |  | — |  | — |  | 47,928 |  | 165,423 |
Unrealized losses on financial instruments |  | 1,267 |  | — |  | — |  | — |  | 1,267 |  | — |
Obligations with FIDC |  | 1,135,077 |  | 1,007,259 |  | — |  | — |  | 1,135,077 |  | 1,007,259 |
Other non-current liabilities |  | 653,670 |  | 401,582 |  | — |  | — |  | 653,670 |  | 401,582 |
|  | 22,104,962 |  | 25,257,075 |  | — |  | — |  | 22,104,962 |  | 25,257,075 |
Summary of changes in liabilities of cash flow from financing activities |
|  | Balances as of January 1, 2015 |  | Cash transactions |  | Non cash transactions |  |  |
|  |  | Proceeds/(Repayment) from financing activities |  | Interest paid on loans and financing |  | Interest expense on loans and Interest on loans with related parties |  | Exchange variation, operations with subsidiaries and associate company and others |  | Balances as of December 31, 2015 |
Related parties, net |  | (80,920 | ) | 30,126 |  | — |  | (2,712 | ) | — |  | (53,506 | )
Debt, Debentures and Losses/Gains on financial instruments, net |  | 19,488,733 |  | (1,985,603 | ) | (946,041 | ) | 1,471,526 |  | 8,388,641 |  | 26,417,256 |
|  | Balances as of December 31, 2015 |  | Cash transactions |  | Non cash transactions |  |  |
|  |  | Proceeds/(Repayment) from financing activities |  | Interest paid on loans and financing |  | Interest expense on loans and Interest on loans with related parties |  | Exchange variation, operations with subsidiaries and associate company and others |  | Balances as of December 31, 2016 |
Related parties, net |  | (53,506 | ) | (6,492 | ) | — |  | 2,457 |  | — |  | (57,541 | )
Debt, Debentures and Losses/Gains on financial instruments, net |  | 26,417,256 |  | (2,150,035 | ) | (1,240,165 | ) | 1,540,797 |  | (3,990,987 | ) | 20,576,866 |
|  | Balances as of December 31, 2016 |  | Cash transactions |  | Non cash transactions |  |  |
|  |  | Proceeds/(Repayment) from financing activities |  | Interest paid on loans and financing |  | Interest expense on loans and Interest on loans with related parties |  | Exchange variation, operations with subsidiaries and associate company and others |  | Balances as of December 31, 2017 |
Related parties, net |  | (57,541 | ) | 5,797 |  | — |  | (95 | ) | — |  | (51,839 | )
Debt, Debentures and Losses/Gains on financial instruments, net |  | 20,576,866 |  | (3,975,541 | ) | (1,330,116 | ) | 1,323,448 |  | (83,806 | ) | 16,510,851 |

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