30. Related parties
The Company’s related parties are predominantly subsidiaries, joint ventures, associates and key management personnel of the Company. Transactions between the parent company and its subsidiaries are eliminated on consolidation and are not disclosed in this note. Details of material non-consolidated entities are disclosed in note 15.
Related party transactions were made by the Company on terms equivalent to those that prevail in arm´s-length transactions, observing the price and usual market conditions, therefore these transactions are under terms that are no less favorable to the Company than those arranged with third parties.
Purchases, accounts receivable and other assets, and accounts payable and other liabilities relates largely to amounts charged by joint ventures and associates related to the pelletizing plants lease and railway transportation services.
Information about related party transactions and effects on the financial statements is set out below:
a)Transactions with related parties
|
|
|
Year ended December 31 |
|
||||||||||||||||
|
|
|
2017 |
|
2016 |
|
2015 |
|
||||||||||||
|
|
|
Joint Ventures |
|
Associates |
|
Total |
|
Joint Ventures |
|
Associates |
|
Total |
|
Joint Ventures |
|
Associates |
|
Total |
|
|
Net operating revenue |
|
399 |
|
337 |
|
736 |
|
166 |
|
346 |
|
512 |
|
139 |
|
353 |
|
492 |
|
|
Cost and operating expenses |
|
(1,943 |
) |
(29 |
) |
(1,972 |
) |
(916 |
) |
(50 |
) |
(966 |
) |
(815 |
) |
(83 |
) |
(898 |
) |
|
Financial result |
|
118 |
|
(14 |
) |
104 |
|
(29 |
) |
(20 |
) |
(49 |
) |
— |
|
8 |
|
8 |
|
Net operating revenue relates to sale of iron ore to the steelmakers and right to use capacity on railroads.
Cost and operating expenses mostly relates to the operational leases of the pelletizing plants. Further information in relation to these operational leases is disclosed in note 31.
b)Outstanding balances with related parties
|
|
|
December 31, 2017 |
|
December 31, 2016 |
|
||||||||
|
|
|
Joint Ventures |
|
Associates |
|
Total |
|
Joint Ventures |
|
Associates |
|
Total |
|
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable |
|
73 |
|
38 |
|
111 |
|
69 |
|
35 |
|
104 |
|
|
Dividends receivable |
|
112 |
|
14 |
|
126 |
|
53 |
|
20 |
|
73 |
|
|
Loans to related parties |
|
4,526 |
|
— |
|
4,526 |
|
— |
|
— |
|
— |
|
|
Other assets |
|
17 |
|
— |
|
17 |
|
— |
|
— |
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplier and contractors |
|
192 |
|
20 |
|
212 |
|
95 |
|
11 |
|
106 |
|
|
Loans from related parties |
|
— |
|
1,245 |
|
1,245 |
|
— |
|
440 |
|
440 |
|
|
Other liabilities |
|
612 |
|
— |
|
612 |
|
359 |
|
— |
|
359 |
|
In 2017, the loans from/to related parties mainly arose in connection with the transaction of Nacala’s corridor business (further information in relation to this transaction is disclosed in note 15). Loans to related parties corresponds to the loan of US$4,526 to Nacala BV, which carries interest at 7.44% p.a. The loan from related parties mainly relates to the loan from Pangea Emirates Ltd. in the amount of US$1,166, which carries interest at 6.54% p.a.
c)The key management personnel remuneration is as follows:
|
|
|
Year ended December 31 |
|
||||
|
|
|
2017 |
|
2016 |
|
2015 |
|
|
Short-term benefits |
|
|
|
|
|
|
|
|
Wages or pro-labor |
|
9 |
|
8 |
|
8 |
|
|
Direct and indirect benefits |
|
10 |
|
4 |
|
6 |
|
|
Profit sharing program (“PLR”) |
|
10 |
|
— |
|
8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
29 |
|
12 |
|
22 |
|
|
Long-term benefits |
|
|
|
|
|
|
|
|
Shares based |
|
16 |
|
1 |
|
1 |
|
|
|
|
|
|
|
|
|
|
|
Severance |
|
7 |
|
5 |
|
6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
52 |
|
18 |
|
29 |
|
|
|
|
|
|
|
|
|
|