Braskem(BAK) - 2022 Q4 - Annual Report

Financial Position - As of December 31, 2022, the company had currency options with an aggregate notional amount of US$2.1 billion (R$10.96 billion) in puts and US$1.4 billion (R$7.3 billion) in calls[1255]. - The company had R$8.3 billion (US$1.6 billion) in foreign currency-denominated cash and cash equivalents as of December 31, 2022[1257]. - U.S. dollar-denominated debt amounted to R$43.3 billion (US$8.3 billion) as of December 31, 2022, compared to R$47.8 billion (US$8.6 billion) in 2021[1264]. - The company had total loans and financings of R$47.96 billion (US$9.1 billion) as of December 31, 2022[1261]. Interest Rates - The short-term domestic CDI rate increased to 13.65% per annum as of December 31, 2022, up from 4.4% per annum in 2021[1258]. - The average interest rate for fixed-rate loans denominated in U.S. dollars was 6.1% for 2023 and 6.5% for 2024[1261]. - The average interest rate for variable-rate loans denominated in reais was 14.1% for 2023[1261]. Risk Management - The company maintains a conservative risk management policy to mitigate market risks, including foreign exchange and commodity risks[1256]. - The company does not hedge the exposure to the price of naphtha, its principal raw material, which could adversely affect financial results[1266]. - If the real depreciated by 10% against the U.S. dollar during 2022, financial expenses indexed to the dollar would have increased by R$4.3 billion[1265]. Internal Control - Management assessed the effectiveness of internal control over financial reporting as of December 31, 2022, concluding that effective controls were maintained[1275]. - There were no changes to internal control over financial reporting during the year ended December 31, 2022, that would materially affect the controls[1279]. - Remediation actions taken in 2022 addressed a material weakness reported as of December 31, 2021, and the company concluded that this weakness was remediated by December 31, 2022[1278]. - The company plans to improve hedge accounting control descriptions and provide training for personnel involved in transactional activities related to hedge accounting[1277]. Corporate Activities - The company received US$611.9 thousand from the depositary of its ADSs during the year ended December 31, 2022, for general corporate purposes[1270].