Instituto Black Jaguar
(Free translation from the original issued in Portuguese. In the event of discrepancies, the Portuguese language version prevails )
Financial Statements
December 31, 2022
Independent Auditors' Report
ALF/RR/DS/YB 1031i/2023
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Financial statements December 31, 2022 Contents Independent auditors’ report on the financial statements 3 Audited financial statements Statements of financial position....................................................................................6 Statements of income................................................................................................... 8 Statements of comprehensive income..........................................................................9 Statements of changes in equity.................................................................................10 Statements of cash flows............................................................................................11 Notes to the financial statements ...............................................................................12
Instituto Black Jaguar
Rua Castilho, 392 - 4º Andar
Brooklin - São Paulo - SP
CEP 04568-010
São Paulo - Brasil
T: +5511 5102-2510
www.bakertillybr.com br
Independent auditors’ report on the financial statements
(Free translation from the original issued in Portuguese. In the event of discrepancies, the Portuguese language version prevails. See Note 14 to the financial statements.)
To the Management of Instituto Black Jaguar São Paulo – SP
Qualified opinion on the financial statements
We have audited the accompanying financial statements of Instituto Black Jaguar (“Institute”), which comprise the balance sheet as of December 31, 2022 and the related statements of income, comprehensive income, changes in equity and cash flows for the year then ended, as well as a summary of the main accounting practices and other notes to the financial statements.
In our opinion, except for the effects of the matter described in the section “Basis for qualified opinion on the financial statements”, the financial statements referred to above presente fairly, in all material respects, the equity and financial position of Black Jaguar as of December 31, 2022, the results of its operations and its cash flows for the year then ended in accordance with accounting practices adopted in Brazil, specially the NBC TG 1000 (R1) – Accounting for Small and Medium–Sized Enterprises, that is alignment with International Financial Reporting Standards for Small and Medium Entities (IFRS for SMEs), issued by International Accounting Standards Board (IASB) and non-profit entities (ITG 2002 (R1)
Basis of the qualified opinion on the financial statements
As presented in Note 12.2, the Institute hired service providers to carry out activities related to its operation, however, it did not make any provision to cover possible disbursements or contingencies associated with this matter. Consequently, liabilities have been understated and shareholders' equity and income for the year has been overstated by approximately BRL957 thousand (BRL616 thousand in 2021), related to the estimated social security risk to which the Instituto is exposed.
Our audit was conducted in accordance with Brazilian and international auditing standards Our responsibilities, in accordance with such standards, are described in the following section entitled "Auditor's Responsibilities for audit of financial statements " We are independent in relation to the Company in accordance with the relevant ethical principles provided for in the Accountant’s Code of Professional Ethics and professional standards issued by the Federal Accounting Council, and we comply with other ethical responsibilities pursuant to these standards
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion.
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Emphasis of matter
As mentioned in note 4.5, the Institute has legal protection for the non-payment of the ITCMD (Tax on transmission of cause of death and donations) on the donations received, and must have to follow the application process from SIMA - Secretariat of the Environment, and SEFAZ - State Secretariat of Finance.
For donations received during fiscal year 2022, formal procedures together were in progress, where the Institute estimates that their approval will take place until the second half of 2023 Our opinion is not qualified as to the situation
Responsibilities of management for the financial statements
Management is responsible for the preparation and adequate presentation of the financial statements in accordance with the accounting practices adopted in Brazil, specially the NBC TG 1000 (R1) – Accounting for Small and Medium–Sized Enterprises, that is alignment with International Financial Reporting Standards for Small and Medium Entities (IFRS for SMEs), issued by International Accounting Standards Board (IASB), non-profit entities (ITG 2002 (R1) and the internal controls it deemed necessary to enable the preparation of these financial statements free of significant distortions, regardless of whether the latter were caused by fraud or error
In the preparation of financial statements, management is responsible for assessing the ability of the Company to continue as a going concern, disclosing, where applicable, the matters relating to its going concern and the use of this basis of accounting in preparing the financial statements, unless management intends to wind-up the Company and its subsidiaries or cease its operations, or has no realistic alternative to avoid the closure of operations.
Auditor’s responsibilities for the audit of the financial statements
Our purposes are to obtain reasonable assurance that the financial statements, taken as a whole, are free from material misstatement, whether due to fraud or error, and issue the audit report with our opinion. Reasonable assurance means a high level of security, but not a guarantee that an audit conducted in accordance with Brazilian and international auditing standards always detects any existing material misstatements Misstatements may be due to fraud or error and are considered material when, individually or taken as a whole, can influence, within a reasonable perspective, the economic decisions of users taken based on these financial statements.
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Auditor’s responsibilities for the audit of the financial statements Continued
As part of the audit conducted in accordance with Brazilian and international auditing standards, we exercise professional judgment and maintain our professional skepticism throughout the audit. Moreover:
We identify and evaluate the risks of material misstatement of financial statements, whether due to fraud or error, plan and perform audit procedures in response to such risks and obtain sufficient and appropriate audit evidence for expressing our opinion
The risk of not detecting a material misstatement due to fraud is higher than due to error, since a fraud can involve the act of circumventing internal controls, collusion, falsification, omission or intentional misrepresentations;
We obtain an understanding of the internal controls relevant to the audit to plan the audit procedures appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of internal controls of the Company; We evaluate the adequacy of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management; We conclude on the appropriateness of the use of the going concern accounting basis by management, and based on the audit evidence obtained, whether there is significant uncertainty in relation to events or conditions that may cast significant doubt on the ability of the Company to continue as a going concern. If we conclude that there is a material uncertainty, we must highlight the related disclosures in the financial statements in our report, or include a modification in our opinion if disclosures are inadequate. Our conclusions are based on audit evidence obtained up to the date of our report. However, future events or conditions may lead the Company to no longer remain as a going concern;
We evaluate the overall presentation, structure and content of financial statements, including disclosures, and whether the financial statements represent the underlying transactions and events in a manner consistent with the objective of fair presentation.
We communicate with management regarding, among other issues, the planned scope, the timing of the audit and the significant audit findings, including any significant weaknesses in internal controls that we have identified during our work.
São Paulo, July 20, 2023.
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Baker Tilly 4Partners, operating under the name Baker Tilly, is a member firm of the Baker Tilly International global network, whose members are separate and independent legal entities
Baker Tilly 4Partners Auditores Independentes S.S. CRC 2SP-031.269/O-1
Alexandre De Labetta Filho
Renato Ruiz Filiciano da Silva
Accountant CRC 1SP-182.396/O-2
Accountant CRC 1SP-268.528/O-6
Instituto Black Jaguar
Statements of financial position
December 31, 2022 and 2021
(Amounts stated in thousands of Reais)
ASSETS
The notes are an integral part of these financial statements.
Notes 2022 2021 Current assets Cash and cash equivalents 5 5,456 7,710 Inventory 6 1,839 217 Other receivables - 58 26 Total current assets 7,353 7,953 Noncurrent assets Fixed assets 7 3,715 2,162 Total current assets 3,715 2,162 Total assets 11,068 10,115
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Instituto Black Jaguar
Statements of financial position
December 31, 2022 and 2021
(Amounts stated in thousands of Reais) LIABILITIES AND EQUITY
The notes are an integral part of these financial statements.
Notes 2022 2021 Current liabilities Accounts payable 8 1,290 895 Labor and tax obligations 9 411 18 Total current liabilities 1,701 913 Equity Equity 10 9,202 1,218 Surplus for the year - 165 7,984 Total equity 9,367 9,202 Total liabilities and equity 11,068 10,115
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Instituto Black Jaguar
Statements of income statements for the financial years ended December 31, 2022 and 2021
The notes are an integral part of these financial statements.
Notes 2022 2021 Net operating revenues 11 11,580 11,233 Operating costs and expenses: General and administrative 12.1 (2,761) (1,336) Personnel 12.2 (3,756) (1,198) Field expenses 12.3 (4,179) (701) Field expenses CEF 12.4 (743)Commercial 12.5 (237) (30) Depreciation - (33) (3) Surplus/(deficit) before financial income (129) 7,965 Finance income - 332 42 Finance costs - (38) (23) Surplus for the year 165 7,984
(Amounts stated in thousands of Reais) 8
Instituto Black Jaguar
Statements of comprehensive
income for the financial years ended December 31, 2022 and 2021
(Amounts stated in thousands of Reais)
The notes are an integral part of these financial statements.
2022 2021 Surplus for the year 165 7,984 OCI -165 7,984
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Instituto Black Jaguar
Statements of changes in equity for the financial years ended December 31, 2022 and 2021
(Amounts stated in thousands of Reais)
The notes are an integral part of these financial statements.
Equity Surplus for the year Total Balances at December 31, 2020 95 1,123 1,218 Incorporation of prior-year surplus 1,123 (1,123)Surplus for the year - 7,984 7,984 Balances at 12/31/2021 1,218 7,984 9,202 Incorporation of prior-year surplus 7,984 (7,984)Surplus for the year - 165 165 Balances at 12/31/2022 9,202 165 9,367
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Instituto Black Jaguar
Statements of cash flows for the financial years ended December 31, 2022 and 2021
(Amounts stated in thousands of Reais)
Adjustments of items without cash disbursement for reconciliation of surplus for the year against the cash flow
The notes are an integral part of these financial statements.
2022 2021 Operating activities Surplus for the year 165 7,984 Depreciation 33 3 198 7,987 Decrease/ (increase) in assets Inventory (1,622) (101) Other receivables (32) 33 Increase in liabilities Trade and accounts payable 395 627 Labor and tax obligations 393 10 Net cash flow provided by/(used in) operations (668) 8,556 Investment activities Acquisition of property, plant and equipment (1,586) (2,136) Net cash flows used in investing activities (1,586) (2,136) Increase/(decrease) in cash and cash equivalents (2,254) 6,420 Cash and cash equivalents At beginning of year 7,710 1,290 At end of year 5,456 7,710 Increase/(decrease) in cash and cash equivalents (2,254) 6,420
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Instituto Black Jaguar
Notes to the financial statements
December 31, 2022
(Amounts stated in Thousands Reais)
1. Reporting entity
Instituto Black Jaguar (“Institute”) is a non-profit entity, having its registered office at the address Avenida Paulista, 1.159 – Conjunto 1 009 – Bela Vista, São Paulo, São Paulo state.
The Institute was founded to restore the balance between mankind and nature, and is accordingly committed to promoting, preserving and restoring the natural environment, in order to improve the quality of life of society as a whole by raising awareness amongst its target audience and implementing effective measures.
The Institute is engaged in creating the Araguaia Biodiversity Corridor in the heart of Brazil, consisting of sections of reforested areas that connect to isolated “islands” of pristine virgin forest The Araguaia Biodiversity Corridor was conceived by Instituto Onça Pintada. It will be the largest such corridor in the world and one of the largest reforestation projects in South America. With a length of 2,600 km and width of 40 km distributed along the whole length of the Araguaia River and a part of the Tocantins River, it will connect the two most important ecosystems in the world; the Amazon rain forest and the “pockets of native forest” in the Cerrado Savannah Hundreds of millions of native trees will be planted, reverting part of arable land to native Amazon and Cerrado Forest
The Black Jaguar Institute in Brazil receives donations from the Black Jaguar Netherlands Institute, a non-profit institution registered with the Amsterdam Chamber of Commerce that supports and publicizes the Institute's actions in Brazil In addition, it receives donations from Brazilian private entities One of the supports that stood out in 2022 was the financial cooperation agreement signed with the Socio-Environmental Fund (FSA) of Caixa Econômica Federal With the ACF signed in March 2022, this new partnership of the Institute provides for the restoration of degraded areas in Permanent Preservation Areas (APPs) and Legal Reserves in the Araguaia Biodiversity Corridor, through the planting of 1 million trees Due to its magnitude and need for recurring accountability, the Institute opened a specific CoA for the project (CEF Project).
2. Basis of preparation and presentation of the financial statements
2.1. Statement of compliance and approving the financial statements
The Institute’s financial statements for the financial year ended December 31, 2022 have been prepared in conformity with accounting practices adopted in Brazil for small and middle-market companies (NBC TG 1000 (R1)) and nonprofit entities (CFC Resolution 1.409/12 - ITG 2002 (R1))
The financial statements for the financial year ended December 31, 2022 were authorized for issuance by the Institute’s executive board on July 20, 2023, and include subsequent events up to this date
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Instituto Black Jaguar
Notes to the financial statements
December 31, 2022
(Amounts stated in Thousands Reais)
2. Basis of preparation and presentation of the financial statements-
-Continued
2.2. Basis of presentation
The financial statements have been prepared in accordance with various valuation techniques used in the accounting estimates The accounting estimates used to prepare the financial statements were based on objective and subjective factors, according to Management’s judgment to determine the adequate amount to be recorded in these financial statements. Significant items subject to these estimates and assumptions include credit risk analysis to determine the allowance for doubtful accounts and analyzing other risks to determine other provisions, including for contingencies.
Settlement of transactions involving these estimates may result in amounts different from those recorded in the financial statements due to the probability treatment inherent in the estimation process. The Institute reviews its estimates and assumptions annually
2.3. Functional currency and presentation currency
The Institute’s functional currency is the Real, which is also used to prepare and present its financial statements
2.4 Measurement of values
Income on operations (revenue, cost and expenses) is calculated according to the accrual system for the financial years, using the historical cost for measurement
3. Accounting practices
3.1. Financial instruments – initial recognition and measurement
3.1.1. Financial assets– recognition and measurement
The Institute’s financial assets are classified as financial assets at fair value through profit or loss. The Institute determines the classification of its financial assets upon initial recognition
Financial assets are initially recognized at fair value, plus transaction costs directly attributable to the acquisition of the financial asset
The institute’s financial assets comprise cash and cash equivalents and other accounts receivable.
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Instituto Black Jaguar
Notes to the financial statements
December 31, 2022
(Amounts stated in Thousands Reais)
3. Accounting policies—Continued
3.1. Financial instruments – initial recognition and measurement--Continued
3.1.2. Financial liabilities – recognition and measurement
The Institute’s financial liabilities are classified as financial liabilities at fair value through profit or loss The Institute determines the classification of its financial liabilities upon initial recognition.
The Institute’s financial liabilities comprise trade accounts payable and other accounts payable.
3.2. Revenue recognition
Revenue is recognized upon receipt as the time of receipt and amounts cannot be predicted Revenue comes from member contributions, donations from individuals and legal entities, partnerships and arrangements with public and private agencies, voluntary services and finance income This revenue is used to fund the Institute’s activities and projects
3.3.
Cash and cash equivalents
Include cash, cash in transit and positive balances in checking accounts at financial institutions Cash equivalents are held for the purpose of meeting short-term cash commitments rather than for investment or other purposes. The Institute considers cash equivalents to be a short-term investment readily convertible into a known amount of cash and subject to an insignificant risk of impairment An investment is therefore normally qualified as cash equivalents if it matures in the short term, for example within three months from procurement.
3.4. Property, plant and equipment Recognition and measurement
Items of property, plant and equipment are measured at the historic cost of acquisition or construction, minus accumulated depreciation and impairment. Any gain or loss on disposal of an item of property, plant and equipment is recognized in profit or loss
Depreciation
Depreciation is calculated to write off the cost of items of property, plant and equipment less their estimated residual values using the straight-line basis over their estimated useful lives. Depreciation is recognized in profit or loss according to the straight-line method for the estimated useful lives of each item
The depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted when necessary
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Instituto Black Jaguar
Notes to the financial statements
December 31, 2022
(Amounts stated in Thousands Reais)
3. Accounting policies--Continued
3.5. Provisions
3.5.1. General
A provision is recognized when the Institute has a present obligation as a result of past events, and it is probable that an outflow of economic benefits will be required to settle the obligation, which can be reliably estimated. Expenses related to any provision are presented in profit or loss
3.5.2. Provisions for tax, civil and labor risks
Provisions are made for all contingencies related to judicial proceedings for which an outflow of economic benefits will probably be required to settle the contingency/obligation and which can be reliably estimated. The chance of defeat is rated according to the evidence available, the hierarchy of law, available case law, recent court decisions and their relevance in the legal framework, in addition to independent legal advisors' opinions. Provisions are reviewed and adjusted to reflect changes in circumstances, such as the applicable statute of limitations, the conclusions from tax audits or additional exposure identified as a result of new issues or court decisions.
3.6 Statements of cash flows
The statements of cash flows have been prepared by the indirect method and are being presented in accordance with the accounting pronouncement applicable to small and middle-market companies (NBC ITG 1000 (R1))
4. Taxes and contributions
4.1. Corporate Income Tax (IRPJ) and Social Contribution on Income (CSLL)
Because it is non-profit, the Institute qualifies for the exemption from the payment of federal taxes on income, under Articles 178 to 184 of the Income Tax Regulations approved by Decree 9.580 of 11/23/2018
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Instituto Black Jaguar
Notes to the financial statements
December 31, 2022
(Amounts stated in Thousands Reais)
4. Taxes and contributions--continued
4.2. Social Integration Program (PIS)
Because it is non-profit, the Institute is subject to payment of the PIS contribution on payroll at the rate of 1% in accordance with Law 9.532/1997
4.3 Contribution for Social Security Financing (COFINS)
Because it is non-profit, the Institute qualifies for the exemption from the payment of COFINS on revenue generated by its activities, in accordance with Laws 9.718/1998 and 10.833/2003. Finance income has been subject to the differentiated rates, since 7/1/2015, pursuant to Decree nº 8,426 / 2015.
4.4. National Social Security Institute (INSS)
The Institute is required to pay the employer’s contribution on payroll.
4.5. Tax on transmission of cause of death and donations (ITCMD)
Donations of goods or rights to entities with a social object linked to the preservation of the environment are exempt from ITCMD collection, provided that their condition is cumulatively recognized by SIMA - Secretariat of the Environment and by SEFAZ - Secretariat of Finance, as Article 6 of Law nº 10,705 /2000 The Institute started its recognition process with SIMA, which is in progress.
5. Cash and cash equivalents
Short-term investments classified as cash and cash equivalents consist of Bank Deposit Certificates (CDBs) with immediate liquidity, with yield based on investment time
6. Inventory
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2022 2021 Money in transit 43Short-term investments 5,413 7,710 5,456 7,710
2022 2021 Fertilizers 1,305 183 Seeds 375Hydrogel 67Ant bait 41 Herbicides 14 17 Saplings 37 17 1,839 217
Instituto Black Jaguar
Notes to the financial statements
December 31, 2022
(Amounts stated in Thousands Reais)
7. Fixed assets
7.1.
(a) Refers to the construction of a structure for planting seedlings completed in 2022.
8. Accounts payable
(i) Right of use payable to JCF - Jaguar Conservation Fund, related to the Araguaia Biodiversity Corridor concept. The Institute will spend the amount on jaguar collars and other items related to jaguar protection that will be donated to them. Jaguar Conservation Fund it’s a third party and has no other relation or transaction with BJF.
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Description % - annual rates 2022 2021 Nursery structures 10 3,200 2,121 Field equipment 10 384 30 Computers 20 104 15 Furniture and utensils 10 64Subtotal 3,752 2,166 Accumulated depreciation (37) (4) Fixed asset, net 3,715 2.162
Fixed assets details Descrição 2021 Adições/baixas 2022 Nursery structures (a) 2,121 1,079 3,200 Field equipment 30 354 384 Computers 15 89 104 Furniture and utensils - 64 64 Total custo 2,166 1,586 3,752 (-) Depreciation (4) (33) (37) 2,162 1,553 3,715 Descriptions 2020 Additions/writeoffs 2021 Nursery structures (a) - 2,121 2,121 Field equipment 30 - 30 Computers - 15 15 Total cost 30 2,136 2,166 (-) Depreciation (1) (3) (4) 29 2,133 2,162
2022 2021 Right of use payable (i) 837 837 Payable service providers 435 52 Other accounts payable 18 6 1,290 895
Instituto Black Jaguar
Notes to the financial statements
December 31, 2022
(Amounts stated in Thousands Reais)
9. Tax liabilities and labor liabilities
10. Equity
Consists of the original equity resulting from the Institute’s foundation and the surplus absorbed annually. Institute spent its funds on institutional purposes in accordance with its bylaws.
Because it is non-profit, the Institute does not pay out profits, dividends, advantages or equity payments to its associates, founders and administrators, in any form.
In the event the Institute is wound down, the remaining equity should be allocated to a nonprofit institution with similar activities, registered at the National Social Welfare Council, or to a government entity, at the discretion of the General Meeting
11. Net operating revenues
12. Operating costs and expenses of projects
12.1 General and administrative expenses
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2022 2021 Tax liabilities PIS/COFINS/CSLL payable 1 4 IRRF payable - 1 Other taxes payable 7 2 8 6 Labor liabilities Salaries payable 258 12 Allowance for vacation pay 145403 12 411 18
2022 2021 Restricted donations and grants 4,889 6,788 Related party revenue (a) 6,567 4,356 Non-restricted donations and grants 124 89 11,580 11,233
(a) The Black Jaguar Foundation located in Amsterdam, promotes and captures donations from other countries, transferring these amounts as a donation to the Black Jaguar project in Brazil.
2022 2021 Rights of use provision - (581) Transportation (1,507) (299) Outsourced services (149) (186) Travels (647) (182) Rental and leasing (190) (69) Other expenses (268) (19) (2,761) (1,336)
Instituto Black Jaguar
Notes to the financial statements
December 31, 2022
(Amounts stated in Thousands Reais)
12. Operating costs and expenses of projects--Continued
12.2
(a) These refer to hiring service providers to carry out activities related to the Institute's operation, including engineers, builders, environmentalists, etc 12.3.
13. Risk management and valuation of financial instruments
a) Considerations about risks
Credit risk
Credit risk posed by investments, securities and cash equivalents, where the Institute only invests at low-risk institutions deemed tier-one in Brazil.
Liquidity risk
The risk management policy requires the maintenance of a secure level of cash equivalents or immediately available funds. The Institute therefore has funds available for immediate use
Capital risk management
The Company’s capital management objectives are to safeguard its future as a going concern.
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Personnel expenses 2022 2021 Services engaged by legal entities (a) (1,995) (771) Salaries payable (1,708) (51) Services engaged by professionals (26) (151) Other expenses (27) (17) (3,756) (1,198)
Field expenses 2022 2021 Plantation materials and services (3.596) (626) Consultancy (277) (35) Transportation (306) (40) (4,179) (701) 12.4. Field expenses CEF 2022 2021 Restoration implantation (545)Planting preparation plan (87)Community mobilization (60)Restoration analysis (25)Other expenses (26)(743)12.5. Commercial 2022 2021 Advertising and marketing (123) (28) Congresses and events (104) (2) Other expenses (10)(237) (30)
Instituto Black Jaguar
Notes to the financial statements
December 31, 2022
(Amounts stated in Thousands Reais)
13. Risk management and valuation of financial instruments
Continued
Tax risk
The Institute is a non-profit entity that qualifies for federal, state and municipal tax benefits Maintaining these benefits is conditional on meeting certain requirements and rules, that the Institute has to follow. As of December 31,2022 there were no signs that jeopardize the existing tax benefits
b) Operations with derivative instruments
The Institute does not invest in derivatives or any other risky assets on a speculative basis As of December 31, 2022 there were no assets or liabilities balances hedged by derivative instruments.
c) Valuation of financial instruments
The financial instruments currently used by the Institute are restricted to cash and cash equivalents, other accounts receivable and payable and trade payables and are recognized in the financial statements using the criteria described in Note 3.1.
The main financial instrument assets and liabilities as of December 31, 2022 are described below, as well as their valuation criteria:
Cash and cash equivalents (Note 5): current account balances held at tierone banks have market values similar to the carrying amounts; Accounts payable (Note 8): the recognized amounts denote the portion in Reais of the services provided and commission payable.
14. Explanation added to the translation for the English version
The accompanying financial statements were translated into English from the original Portuguese version prepared for local purposes. Certain accounting practices applied by the Company that conform to those accounting practices adopted in Brazil may not conform to the generally accepted accounting principles in the countries where these financial statements may be used.
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