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Financial instruments by category

12 Months Ended

Jun. 30, 2023

16. Financial instruments by category

The following note presents the financial assets and financial liabilities by category and a reconciliation to the corresponding line in the Consolidated Statement of Financial Position, as appropriate. Since the line items “Trade and other receivables” and “Trade and other payables” contain both financial instruments and non-financial assets or liabilities (such as prepayments, trade receivables, trade payables in-kind and tax receivables and payables), the reconciliation is shown in the columns headed “Non-financial assets” and “Non-financial liabilities”. Financial assets and liabilities measured at fair value are assigned based on their different levels in the fair value hierarchy

IFRS 9 defines the fair value of a financial instrument as the amount for which an asset could be exchanged, or a financial liability settled, between knowledgeable, willing parties in an arm’s length transaction. All financial instruments recognized at fair value are allocated to one of the valuation hierarchy levels of IFRS 7. This valuation hierarchy provides for three levels.

In the case of Level 1, valuation is based on quoted prices (unadjusted) in active markets for identical assets and liabilities that the Company can refer to at the date of valuation.

In the case of Level 2, fair value is determined by using valuation methods based on inputs directly or indirectly observable in the market. If the financial instrument concerned has a fixed contract period, the inputs used for valuation must be observable for the whole of this period.

In the case of Level 3, the Group uses valuation techniques not based on inputs observable in the market. This is only permissible insofar as no market data is available. The inputs used reflect the Group’s assumptions regarding the factors which market players would consider in their pricing.

The Group’s Finance Division has a team in place in charge of estimating the valuation of financial assets required to be reported in the Consolidated Financial Statements, including the fair value of Level-3 instruments. The team directly reports to the Chief Financial Officer ("CFO"). The CFO and the valuation team discuss the valuation methods and results upon the acquisition of an asset and, as of the end of each reporting period.

According to the Group’s policy, transfers among the several categories of valuation are recognized when occurred, or when there are changes in the prevailing circumstances requiring the transfer.

Financial assets and financial liabilities as of June 30, 2023 are as follows:

	Financial assets at		Financial assets at fair value through profit or loss				Subtotal financial		Non-financial
	amortized cost		Level 1		Level 2		assets		assets		Total
June 30, 2023
Assets as per Statement of Financial Position
Trade and other receivables (excluding the allowance for doubtful accounts and other receivables) (Note 17)		73,864		14,850		-		88,714		24,329		113,043
Investment in financial assets:
- Public companies’ securities		-		5,046		-		5,046		-		5,046
- Bonds		-		13,034		767		13,801		-		13,801
- Mutual funds		-		25,035		-		25,035		-		25,035
- Others		695		1,309		-		2,004		-		2,004
Derivative financial instruments:
- Commodities options contracts		-		209		-		209		-		209
- Commodities futures contracts		-		2,062		-		2,062		-		2,062
- Foreign-currency options contracts		-		276		-		276		-		276
- Foreign-currency future contracts		-		1,773		-		1,773		-		1,773
- Swaps		-		-		279		279		-		279
- Others		-		1,955		-		1,955		-		1,955
Restricted assets (i)		1,202		-		-		1,202		-		1,202
Cash and cash equivalents (excluding bank overdrafts):
- Cash on hand and at bank		9,265		-		-		9,265		-		9,265
- Short-term investments		-		29,671		-		29,671		-		29,671
Total assets		85,026		95,220		1,046		181,292		24,329		205,621

	Financial liabilities at		Financial liabilities at fair value through profit or loss				Subtotal financial		Non-financial
	amortized cost		Level 1		Level 2		liabilities			liabilities	Total
June 30, 2023
Liabilities as per Statement of Financial Position
Trade and other payables (Note 20)		57,278		-		-		57,278		30,910	88,188
Borrowings (Note 22)		262,052		-		-		262,052		-	262,052
Derivative financial instruments:
- Commodities options contracts		-		810		-		810		-	810
- Commodities futures contracts		15		335		-		350		-	350
- Foreign-currency options contracts		-		-		-		-		-	-
- Foreign-currency future contracts		-		126		-		126		-	126
- Swaps		-		6		-		6		-	6
Total liabilities		319,345		1,277		-		320,622		30,910	351,532

Financial assets and financial liabilities as of June 30, 2022 were as follows

	Financial assets at		Financial assets at fair value through profit or loss				Subtotal		Non-financial
	amortized cost		Level 1		Level 2		financial assets		assets		Total
June 30, 2022
Assets as per Statement of Financial Position
Trade and other receivables (excluding the allowance for doubtful accounts and other receivables) (Note 17)		73,533		9,408		-		82,941		22,985		105,926
Investment in financial assets:
- Public companies’ securities		-		3,333		-		3,333		-		3,333
- Bonds		-		3,814		-		3,814		-		3,814
- Mutual funds		-		34,769		-		34,769		-		34,769
- Others		245		830		-		1,075		-		1,075
Derivative financial instruments:
- Commodities options contracts		-		655		-		655		-		655
- Commodities futures contracts		-		4,801		-		4,801		-		4,801
- Foreign-currency options contracts		-		151		-		151		-		151
- Foreign-currency future contracts		-		569		-		569		-		569
Restricted assets (i)		1,005		-		-		1,005		-		1,005
Cash and cash equivalents (excluding bank overdrafts):
- Cash on hand and at bank		39,369		-		-		39,369		-		39,369
- Short-term investments		-		35,892		-		35,892		-		35,892
Total assets		114,152		94,222		-		208,374		22,985		231,359

	Financial liabilities at		Financial liabilities at fair value through profit or loss				Subtotal financial		Non-financial
	amortized cost		Level 1		Level 2		liabilities			liabilities	Total
June 30, 2022
Liabilities as per Statement of Financial Position
Trade and other payables (Note 20)		53,578		-		-		53,578		22,996		76,574
Borrowings (Note 22)		304,897		-		-		304,897		-		304,897
Derivative financial instruments:
- Commodities options contracts		-		382		222		604		-		604
- Commodities futures contracts		6		1,037		-		1,043		-		1,043
- Foreign-currency options contracts		-		351		-		351		-		351
- Foreign-currency future contracts		-		300		-		300		-		300
- Swaps		-		84		34		118		-		118
Total liabilities		358,481		2,154		256		360,891		22,996		383,887

(i)	Corresponds to deposits in guarantee and escrows.

The following are details of the book value of financial instruments recognized, which were offset in the statement of financial position:

	06.30.2023							06.30.2022
	Gross amounts recognized		Gross amounts offset			Net amount presented		Gross amounts recognized		Gross amounts offset			Net amount presented
Financial assets
Trade and other receivables (excluding the allowance for doubtful accounts and other receivables)		90,761		(2,047	)		88,714		90,062		(7,121	)		82,941
Financial liabilities
Trade and other payables		59,325		(2,047	)		57,278		60,699		(7,121	)		53,578

Income, expense, gains and losses on financial instruments can be assigned to the following categories:

	Financial assets and liabilities at amortized cost			Financial assets and liabilities at fair value through profit or loss		Total
June 30, 2023
Interest income		2,199			-		2,199
Interest and allowances generated by operating assets		(1,472	)		-		(1,472	)
Interest expenses		(20,991	)		-		(20,991	)
Lease liabilities interest		(651	)		-		(651	)
Foreign exchange, net		20,075			-		20,075
Fair value gain on financial assets at fair value through profit or gain		-			8,668		8,668
Gain from repurchase of Non-convertible Notes		3,516			-		3,516
Gain on financial instruments derived from commodities		-			909		909
Gain from derivative financial instruments, net		-			2,960		2,960
Other financial costs		(3,336	)		-		(3,336	)
Net result (i)		(660	)		12,537		11,877

	Financial assets and liabilities at amortized cost			Financial assets and liabilities at fair value through profit or loss			Total
June 30, 2022
Interest income		2,773			-			2,773
Interest and allowances generated by operating assets		3,081			-			3,081
Interest expenses		(29,696	)		-			(29,696	)
Lease liabilities interest		(630	)		-			(630	)
Foreign exchange, net		63,486			-			63,486
Dividends income		4			-			4
Fair value gain on financial assets at fair value through profit or gain		-			12,732			12,732
Gain from repurchase of Non-convertible Notes		3,139			-			3,139
Loss on financial instruments derived from commodities		-			(5,083	)		(5,083	)
Loss from derivative financial instruments, net		-			(3,104	)		(3,104	)
Other financial costs		(2,303	)		-			(2,303	)
Net result (i)		39,854			4,545			44,399

	Financial assets and liabilities at amortized cost			Financial assets and liabilities at fair value through profit or loss			Total
June 30, 2021
Interest income		2,318			-			2,318
Interest and allowances generated by operating assets		10,906			-			10,906
Interest expenses		(49,316	)		-			(49,316	)
Lease liabilities interest		(908	)		-			(908	)
Foreign exchange, net		37,063			-			37,063
Dividends income		4			-			4
Fair value gain on financial assets at fair value through profit or gain		-			35,663			35,663
Loss from repurchase of Non-convertible Notes		(88	)		-			(88	)
Loss on financial instruments derived from commodities		-			(16,089	)		(16,089	)
Loss from derivative financial instruments, net		-			(1,686	)		(1,686	)
Other financial costs		(4,790	)		-			(4,790	)
Net result (i)		(4,811	)		17,888			13,077

(i) Included within “Financial results, net” in the Statement of income and Other Comprehensive Income, with the exception of Interest and discount generated by operating assets, which are included in ”Other operating results, net”.

The following table presents the changes in Level 3 financial instruments as of June 30, 2022 and 2021:

	Investments in financial assets - Others			Total
Balance as of June 30, 2021		170			170
Currency translation adjustment		(17	)		(17	)
Deconsolidation		(207	)		(207	)
Gains recognized in the year (i)		54			54
Balance as of June 30, 2022 (ii)		-			-

(i)	Included within “Financial results, net” in the Statement of income and Other Comprehensive Income.

(ii)	During the year ended June 30, 2023 there were no changes in Level 3 financial instruments.

During the fiscal year ended June 30, 2023 and 2022, there were no transfers between levels. When there are no quoted prices available in an active market, fair values (especially derivative instruments) are based on recognized valuation methods. The Group uses a range of valuation models for the measurement of Level 2 and Level 3 instruments, details of which may be obtained from the following table.

Description

Pricing model / method

Parameters

Fair value hierarchy

Range

Derivative financial instruments - Swaps and Commodities options contracts

Theoretical price

Underlying asset price and volatility

Level 2

As of June 30, 2023, there have been no changes to the economic or business circumstances affecting the fair value of the financial assets and liabilities of the group that were not considered in the fair value estimation.