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17. LEASES
 12 Months Ended
Dec. 31, 2020
Presentation of leases for lessee [abstract]  
LEASES
17. LEASES

The Company is lessee in several lease agreements for forest lands, offices, distribution centers, outgrowers, vehicles, among others. Some contracts have a renewal option for an additional period at the end of the agreement, established by contractual amendments. Automatic renewals or renewals for undetermined periods are not allowed.

 

The contract clauses mentioned, with respect to renewal, readjustment and purchase option, are contracted according to market practices. In addition, there are no clauses of contingent payments or restrictions on dividends distribution, payments of interest on shareholders’ equity or obtaining debt.

 

17.1. Right-of-use assets

The right-of-use assets as set forth below are part of the balances of property, plant and equipment and intangible assets (notes 12 and 13).

   
  Average rate (1)   12.31.19   Additions   Disposals Transfers     Exchange rate variation   12.31.20
Cost                          
Land     22,790   5,900    (961) 20,751     181    48,661
Buildings      2,615,883   287,451   (86,557)  (2,487)     47,626    2,861,916
Machinery and equipment     115,173   5,518   (8,289)  -     191   112,593
Vehicles     207,443   165,699   (54,260)  -     26,036   344,918
Software     55,705   72,766   (35,625)  (18,264)      -    74,582
       3,016,994   537,334    (185,692)  -     74,034    3,442,670
                           
Depreciation                          
Land 16.32%   (5,086)   (6,861)   813  (1,799)      (593)   (13,526)
Buildings 29.11%    (512,836)    (464,159)   85,042  (6,765)     (16,098)   (914,816)
Machinery and equipment 42.48%   (96,958)   (17,865)   7,610  -      (103)   (107,316)
Vehicles 26.39%   (57,357)   (71,768)   41,024  -     (13,394)   (101,495)
Software 45.21%   (44,815)   (32,422)   35,625 8,564      -   (33,048)
       (717,052)    (593,075)   170,114  -     (30,188)    (1,170,201)
       2,299,942   (55,741)   (15,578)  -     43,846    2,272,469
                           
  (1) Weighted average annual rate.
   
  Average rate (1)   12.31.18   Initial adoption IFRS 16   Additions   Disposals   Exchange rate variation   Transfers   12.31.19
Cost                              
Land      -    23,453    -    (421)   (42)   (200)   22,790
Buildings     214,171   2,278,982   216,514    (119,540)   4,650    21,106    2,615,883
Machinery and equipment     129,589    1,182   4,110    (13,321)    28   (6,415)   115,173
Facilities     14,492   -    -    -    -   (14,492)    -
Vehicles      -    94,065   119,422   (8,751)   2,707   -   207,443
Software     68,424    61   (6,998)    (50,160)    -    44,378   55,705
      426,676   2,397,743   333,048    (192,193)   7,343    44,377    3,016,994
                               
Depreciation                              
Land 22.31%    -   -   (5,134)   27    21   -   (5,086)
Buildings 17.79%    (74,527)   -    (429,600)   1,948   (644)   (10,013)    (512,836)
Machinery and equipment 36.32%    (75,422)   -    (39,361)   9,545    (8)    8,288   (96,958)
Facilities  -    (1,725)   -    -    -    -    1,725    -
Vehicles 34.32%    -   -    (58,325)   1,502   (534)   -   (57,357)
Software 67.81%    (57,486)   -    (37,489)   50,160    -   -   (44,815)
       (209,160)   -    (569,909)   63,182    (1,165)   -    (717,052)
      217,516   2,397,743    (236,861)    (129,011)   6,178    44,377    2,299,942
                               
  (1) Weighted average annual rate.
17.2. Lease liabilities
   
  WAM (1)   12.31.19   Additions   Payments   Interest paid   Interest accrued   Disposals   Transfers   Exchange rate variation   12.31.20
Land 4.7   20,355   5,900   (5,819)   (4,716)   4,716   (1,729)   18,811   350   37,868
Buildings 3.4    2,227,026   310,204    (425,594)   (99,426)   170,763    (762)    (18,238)    31,434    2,195,407
Machinery and equipment 1.8   25,687   5,518   (26,776)   (13,285)   13,285    (755)   8   91    3,773
Vehicles 2.2   156,975   165,699   (64,674)   (15,231)   15,231    (14,155)    (581)    13,159   256,423
Software 1.6    1,137   72,767   (30,693)   (3,967)   3,966    -    -   -   43,210
       2,431,180   560,088    (553,556)    (136,625)   207,961    (17,401)    -    45,034    2,536,681
                                       
Current     376,628                               383,162
Non-current      2,054,552                                2,153,519

 

  (1) Weighted average maturity in years.
   
  WAMT (1)   12.31.18   Initial adoption IFRS 16   Additions   Payments   Interest paid   Interest accrued   Disposals   Exchange rate variation   12.31.19
                                       
Land  5.5    -   17,166   6,287    (4,505)    (762)    2,909   (421)    (319)   20,355
Buildings  4.3   167,012    2,278,982   216,514   (410,466)   (85,940)   167,689    (111,134)   4,369    2,227,026
Machinery and equipment  1.3   66,534    1,182   4,110   (42,216)   (17,756)    17,757    (3,898)    (26)   25,687
Vehicles  2.0    -   94,065   119,422   (51,263)   (11,359)    11,359    (7,438)   2,189   156,975
Software  1.3   8,263   61   37,379   (44,567)   (85)   86    -    -   1,137
      241,809    2,391,456   383,712   (553,017)   (115,902)   199,800    (122,891)   6,213    2,431,180
                                       
Current     75,293                               376,628
Non-current     166,516                                2,054,552

 

  (1) Weighted average maturity in years.
17.3. Lease liabilities maturity schedule

The maturity schedule of the minimum required future payments are presented below:

 

   
  12.31.20
Current 383,162
Non-current  2,153,519
2022 475,563
2023 367,486
2024 289,775
2025 203,854
2026 onwards 816,841
   2,536,681

 

17.4. Incremental borrowing rate

The Company uses nominal incremental borrowing rates to measure its lease liabilities. The nominal and real interest rates are presented below:

 

                 
    12.31.20   12.31.19
Contract Terms   Nominal rate % p.a.   Real rate % p.a.   Nominal rate % p.a.   Real rate % p.a.
1 year   5.69%   1.05%   8.46%   4.97%
2 years   5.96%   2.61%   9.49%   5.37%
3 years   6.80%   2.53%   10.60%   6.28%
4 years   8.50%   4.56%   11.43%   7.01%
5 years   8.98%   4.40%   11.84%   7.28%
6 years   -   -   12.13%   7.48%
8 years   10.47%   5.71%   12.43%   7.67%
9 years   10.75%   5.97%   12.51%   7.78%
10 years   11.39%   6.64%   12.61%   7.84%
11 years   -   -   12.68%   7.86%
13 years   11.68%   7.38%   12.81%   7.93%
14 years   11.84%   7.13%   12.86%   7.96%
15 years   -   -   12.90%   7.97%
18 years   -   -   13.01%   8.03%
20 years   13.26%   9.00%   13.12%   8.12%

 

The nominal rates presented above as of December 31, 2020 refer to the incremental borrowing rates used in contracts recognized during the year ended on December 31, 2020 and the rates as of December 31, 2019 refer to the rates used in contracts recognized during the year ended on December 31, 2019.

 

17.5. Amounts recognized in the statement of income

The amounts directly recognized in the statement of income presented below relate to items exempt of recognition: low-value assets, short-term leases and leases with variable payments.

       
    12.31.20   12.31.19
Variable payments not included in the lease liabilities   300,949   222,096
Expenses related to short-term leases   162,313   226,010
Expenses related to low-value assets    3,531    4,890
    466,793   452,996

 

17.6. Sale-and-leaseback transactions

 

During the year ended on December 31, 2020 four sale-and-leaseback transactions of grain warehouses were concluded. These warehouses are located in: (i) Campo Erê – Santa Catarina, (ii) Pato Branco, (iii) Medianeira, and (iv) Paranaguá both in the state of Paraná; which were analyzed within of IFRS 16 premises. The right-of-use assets and lease liabilities of each contract were recognized and are presented in the additions of the Buildings class, with the following amounts: right-of-use asset of R$13,473 and lease liability of R$36,245. A gain was recognized under Other operating income in the amount of R$23,849.