Derivative Financial Instruments

12 Months Ended

Dec. 31, 2021

Derivative Financial Instruments [Abstract]

24.

Derivative financial instruments

Option to purchase common shares

As of the beginning of year-ended December 31, 2021, dLocal Limited had an option agreement in place with one shareholder (“Investor”), pursuant to which the Investor had outstanding options to purchase up to 18,068,000 common shares from certain existing shareholders, or by direct issuance of Company shares, which could be exercised by the Investor on or before December 16, 2021.

On March 3, 2021, the investor exercised the right to purchase 18,068,000 Class A Ordinary shares in dLocal Group Limited, by acquiring them from other existing shareholders, without being required the issuance of new shares by dLocal. In this sense, as of March 3, 2021 the obligations of dLocal under this agreement ceased.

Considering that as of December 31, 2020 the derivative financial instrument represented a liability for dLocal of USD 2,896, a gain for the same amount was recognized within Operating profit in the line item “Other operating gain/(loss)” in the Consolidated Statements of Comprehensive Income for the twelve-month period ended December 31, 2021.

Other derivative financial instruments

During the year-ended December 31, 2021, dLocal entered into short-term derivative contracts (delivery and non-delivery forwards) with different counterparties in different countries in which the Group operates, according to the following detail:


Transaction	Type of Forward Transaction		Local currency		Notional amount in USD		Fair value of transactions recognized in Income Statement during 2021 - (Loss)/Gain			Outstanding balance as of December 31, 2021 - Derivative financial liabilities
Non-delivery forwards	Buy USD		Brazilian Reais			37,709,420		(220	)		(152	)
Non-delivery forwards	Buy USD		Argentinean Peso			2,500,000		(125	)		—
Delivery forwards (1)	Buy USD		Chilean Peso			107,483,927		40			(8	)
Non-delivery forwards	Buy USD		Indian Rupee			10,000,000		(59	)		(14	)
Non-delivery forwards	Buy USD		South African Rand			9,582,534		120			(47	)
Total		—		—		167,275,881		(244	)		(221	)

(1) dLocal entered into hedge operations of trade and other receivables in Chilean Peso subject to foreign exchange exposure using the delivery forward contracts. The transactions have been elected for hedge accounting and classified as fair value hedge in accordance with IFRS 9. During 2021, dLocal recognized a gain of USD 322 and a derivative financial liability of USD 8 derived from these hedging transactions.
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