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Sendas Distribuidora SA

07/28/2021 | Press release | Distributed by Public on 07/28/2021 04:01

FREE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE) (Form 6-K)

FREE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE)

ITR - Interim Financial Information - June 30,2021 - SENDAS DISTRIBUIDORA S.A.

Index
Corporate Information / Capital Composition 2
Consolidated and Individual interim financial information
Individual Statements
Balance Sheet - Assets 3
Balance Sheet - Liabilities 4
Statements of Operations 5
Statements of Comprehensive Income 6
Statements of Changes in Shareholder' Equity 1/1/2021 to 6/30/2021 7
Statements of Changes in Shareholder' Equity 1/1/2020 to 6/30/2020 8
Statements of Cash Flows 9
Consolidated Statements
Balance Sheet - Assets 10
Balance Sheet - Liabilities 11
Statements of Operations 12
Statements of Comprehensive Income 13
Statements of Changes in Shareholder' Equity 1/1/2021 to 6/30/2021 14
Statements of Changes in Shareholder' Equity 1/1/2020 to 6/30/2020 15
Statements of Cash Flows 16
Notes to the consolidated and individual interim financial information 17

FREE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE)

ITR - Interim Financial Information - June 30,2021 - SENDAS DISTRIBUIDORA S.A.

Corporate information / Capital composition
Number of Shares Current quarter
(Thousands) 6/30/2021
Share Capital
Common 268,896
Preferred 0
Total 268,896
Treasury Shares
Common 0
Preferred 0
Total 0
2
FREE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE) ITR - Interim Financial Information - June 30,2021 - SENDAS DISTRIBUIDORA S.A.
Individual Interim Financial Information / Balance Sheet - Assets
R$ (in thousands)
Current quarter Prior period
Code Description 6/30/2021 12/31/2020
1 Total Assets 20,481,000 18,821,000
1.01 Current Assets 9,371,000 8,349,000
1.01.01 Cash and Cash Equivalents 4,511,000 3,532,000
1.01.03 Accounts Receivable 264,000 216,000
1.01.03.01 Trade Receivables 230,000 182,000
1.01.03.02 Other Receivables 34,000 34,000
1.01.04 Inventories 3,688,000 3,739,000
1.01.06 Recoverable Taxes 683,000 768,000
1.01.08 Other Current Assets 225,000 94,000
1.01.08.01 Non-current Assets Held for Sale 147,000 -
1.01.08.01.01 Assets Held for Sale 147,000 -
1.01.08.03 Other 78,000 94,000
1.01.08.03.01 Derivative Financial Instruments - 57,000
1.01.08.03.03 Other Current Assets 78,000 37,000
1.02 Non-current Assets 11,110,000 10,472,000
1.02.01 Long-Term Assets 1,105,000 1,190,000
1.02.01.09 Receivable From Related Parties 179,000 178,000
1.02.01.10 Other Non-current Assets 926,000 1,012,000
1.02.01.10.04 Recoverable Taxes 771,000 866,000
1.02.01.10.05 Restricted Deposits for Legal Proceedings 132,000 134,000
1.02.01.10.06 Derivative Financial Instruments 2,000 11,000
1.02.01.10.07 Other Non-current Assets 21,000 1,000
1.02.02 Investments 798,000 769,000
1.02.02.01 Investments in Associates 798,000 769,000
1.02.03 Property, Plant and Equipment 8,160,000 7,476,000
1.02.03.01 Property, Plant and Equipment in Use 5,456,000 5,043,000
1.02.03.02 Right of Use on Leases 2,704,000 2,433,000
1.02.04 Intangible Assets 1,047,000 1,037,000
1.02.04.01 Intangible Assets 1,047,000 1,037,000
1.02.04.01.02 Intangible Assets 1,047,000 1,037,000
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FREE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE) ITR - Interim Financial Information - June 30,2021 - SENDAS DISTRIBUIDORA S.A.
Individual Interim Financial Information / Balance Sheet - Liabilities
R$ (in thousands)
Current quarter Prior period
Code Description 6/30/2021 12/31/2020
2 Total Liabilities 20,481,000 18,821,000
2.01 Current Liabilities 8,006,000 8,786,000
2.01.01 Payroll and Related Taxes 408,000 371,000
2.01.02 Trade Payables 4,505,000 5,058,000
2.01.03 Taxes and Contributions Payable 282,000 528,000
2.01.04 Borrowings and Financing 2,191,000 2,120,000
2.01.04.01 Borrowings and Financing 260,000 280,000
2.01.04.02 Debentures 1,931,000 1,840,000
2.01.05 Other Liabilities 620,000 709,000
2.01.05.01 Payables to Related Parties 104,000 41,000
2.01.05.02 Others 516,000 668,000
2.01.05.02.01 Dividends and Interest on Own Capital - 85,000
2.01.05.02.08 Financing Related to Acquisition of Assets 51,000 34,000
2.01.05.02.09 Deferred Revenue 139,000 227,000
2.01.05.02.12 Other Current Liabilities 113,000 150,000
2.01.05.02.17 Lease Liability 213,000 172,000
2.02 Non-current Liabilities 10,558,000 8,688,000
2.02.01 Borrowings and Financing 7,344,000 5,711,000
2.02.01.01 Borrowings and Financing 984,000 952,000
2.02.01.02 Debentures 6,360,000 4,759,000
2.02.02 Other Liabilities 2,890,000 2,612,000
2.02.02.02 Others 2,890,000 2,612,000
2.02.02.02.07 Property Tax 12,000 8,000
2.02.02.02.09 Other Accounts Payable 2,878,000 2,604,000
2.02.03 Deferred Taxes 72,000 82,000
2.02.03.01 Deferred Income Tax and Social Contribution 72,000 82,000
2.02.04 Provision for Legal Proceedings 251,000 282,000
2.02.06 Deferred Revenue 1,000 1,000
2.03 Shareholders' Equity 1,917,000 1,347,000
2.03.01 Share Capital 779,000 761,000
2.03.02 Capital Reserves 11,000 4,000
2.03.04 Earnings Reserve 1,127,000 582,000
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FREE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE) ITR - Interim Financial Information - June 30,2021 - SENDAS DISTRIBUIDORA S.A.
Individual Interim Financial Information / Statements of Operations
R$ (in thousands)
Current Quarter Year to date current period Previous Quarter Year to date previous period
Code Description 4/1/2021 to 6/30/2021 1/1/2021 to 6/30/2021 4/1/2020 to 6/30/2020 1/1/2020 to 6/30/2020
3.01 Net Operating Revenue 10,049,000 19,497,000 8,242,000 16,080,000
3.02 Cost Of Sales (8,327,000) (16,268,000) (6,904,000) (13,525,000)
3.03 Gross Profit 1,722,000 3,229,000 1,338,000 2,555,000
3.04 Operating Income / Expenses (1,126,000) (2,150,000) (948,000) (1,855,000)
3.04.01 Selling Expenses (804,000) (1,560,000) (647,000) (1,267,000)
3.04.02 General and Administrative Expenses (152,000) (289,000) (104,000) (198,000)
3.04.05 Other Operating Expenses (184,000) (330,000) (203,000) (380,000)
3.04.05.01 Depreciation and Amortization (154,000) (299,000) (121,000) (238,000)
3.04.05.03 Other Operating Expenses, Net (30,000) (31,000) (82,000) (142,000)
3.04.06 Share of Profit of Associates 14,000 29,000 6,000 (10,000)
3.05 Profit from Operations Before Net Financial Expenses 596,000 1,079,000 390,000 700,000
3.06 Net Financial Expenses (145,000) (279,000) (131,000) (286,000)
3.06.01 Financing Revenues 52,000 69,000 66,000 129,000
3.06.02 Financing Expenses (197,000) (348,000) (197,000) (415,000)
3.07 Income Loss Before Income Tax and Social Contribution 451,000 800,000 259,000 414,000
3.08 Income Tax and Social Contribution (146,000) (255,000) (84,000) (139,000)
3.08.01 Current (164,000) (265,000) (184,000) (261,000)
3.08.02 Deferred 18,000 10,000 100,000 122,000
3.09 Net Income from Continued Operations 305,000 545,000 175,000 275,000
3.11 Net Income for the Period 305,000 545,000 175,000 275,000
3.99 Earnings per Share - (Reais/Share)
3.99.01 Basic Earnings per Share
3.99.01.01 Common 1.13758 2.02854 0.67829 1.06589
3.99.02 Diluted Earnings per Share
3.99.02.01 Common 1.13758 2.02854 0.67829 1.06589
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FREE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE) ITR - Interim Financial Information - June 30,2021 - SENDAS DISTRIBUIDORA S.A.
Individual Interim Financial Information / Statements of Comprehensive Income
R$ (in thousands)
Current Quarter Year to date current period Previous Quarter Year to date previous period
Code Description 4/1/2021 to 6/30/2021 1/1/2021 to 6/30/2021 4/1/2020 to 6/30/2020 1/1/2020 to 6/30/2020
4.01 Net income for the Period 305,000 545,000 175,000 275,000
4.02 Other Comprehensive Income - - 1,069,000 1,553,000
4.02.02 Foreign Currency Translation - - 1,072,000 1,563,000
4.02.04 Fair Value of Expected Credit Loss - - (1,000) -
4.02.05 Hedge Operations - - (2,000) (6,000)
4.02.06 Income Taxes over Other Comprehensive Income - - - (2,000)
4.02.08 Other Comprehensive Income - - - (2,000)
4.03 Total comprehensive Income for the Period 305,000 545,000 1,244,000 1,828,000
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FREE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE) ITR - Interim Financial Information - June 30,2021 - SENDAS DISTRIBUIDORA S.A.
Individual Interim Financial Information / Satatements of Cash Flows - Indirect method
R$ (in thousands)
Yeat to date current period Year to date previous period
Code Description 1/1/2021 to 6/30/2021 1/1/2020 to 6/30/2020
6.01 Net Cash Operating Activities 496,000 1,788,000
6.01.01 Cash Provided By the Operations 1,347,000 863,000
6.01.01.01 Net Income for the Period 545,000 275,000
6.01.01.02 Deferred Income Tax and Social Contribution (10,000) (123,000)
6.01.01.03 Loss of Disposal of Property, Plant and Equipment 68,000 27,000
6.01.01.04 Depreciation and Amortization 324,000 252,000
6.01.01.05 Interest and Monetary Variations 401,000 295,000
6.01.01.07 Share of Profit (Loss) of Subsidiaries and Associates (29,000) 10,000
6.01.01.08 (Reversal) Provision for Legal Proceedings (24,000) (3,000)
6.01.01.10 Provision for Share Purchase Options 7,000 3,000
6.01.01.11 Provision (Reversal) for Doubtful Accounts 1,000 (1,000)
6.01.01.13 Provision (Reversal) for Inventory Losses and Damages 138,000 132,000
6.01.01.16 Gain on Leasing Liabilities Write-Off (74,000) (4,000)
6.01.02 Changes in Assets and Liabilities (851,000) 925,000
6.01.02.01 Accounts Receivable (49,000) (44,000)
6.01.02.02 Inventories (87,000) 9,000
6.01.02.03 Recoverable Taxes 189,000 77,000
6.01.02.04 Other Assets (67,000) 77,000
6.01.02.05 Related Parties 66,000 201,000
6.01.02.06 Restricted Deposits for Legal Proceeding 3,000 19,000
6.01.02.07 Trade Payables (551,000) (971,000)
6.01.02.08 Payroll and Related Taxes 37,000 47,000
6.01.02.09 Taxes and Social Contributions Payable (8,000) 175,000
6.01.02.10 Provision for Legal Proceedings (19,000) (2,000)
6.01.02.11 Deferred Revenue (97,000) 4,000
6.01.02.12 Other Payables (30,000) (66,000)
6.01.02.13 Income Tax and Social Contribution, Paid (238,000) -
6.01.02.15 Received Dividends and Interest on Own Capital - 1,399,000
6.02 Net Cash of Investing Activities (757,000) (199,000)
6.02.02 Purchase of Property, Plant and Equipment (739,000) (571,000)
6.02.03 Purchase of Intangible Assets (19,000) (13,000)
6.02.04 Proceeds From Sale of Property, Plant and Equipment 1,000 385,000
6.03 Net Cash of Financing Activities 1,240,000 (1,026,000)
6.03.01 Capital Increase 18,000 -
6.03.02 Proceeds From Borrowings and Financing 1,874,000 599,000
6.03.03 Payments of Borrowings and Financing (366,000) (1,478,000)
6.03.05 Payments of Dividends and Interesr on Own Capital (85,000) -
6.03.09 Payment of Lease Liability (201,000) (147,000)
6.05 Increase (Decrease) in Cash and Cash Equivalents 979,000 563,000
6.05.01 Cash and Cash Equivalents at the Beginning of the Period 3,532,000 1,876,000
6.05.02 Cash and Cash Equivalents at the End of the Period 4,511,000 2,439,000
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Individual Interim Financial Information / Statements of Changes in Shareholders' Equity 1/1/2021 to 6/30/2021
R$ (in thousands)
Code Description Capital stock Capital reserve, granted options and treasury shares Profit reserve Retained earnings
/Accumulated losses
Other comprehensive income Shareholders' equity
5.01 Opening balance 761,000 4,000 645,000 - - 1,410,000
5.02 Prior Period Adjustments - - (63,000) - - (63,000)
5.03 Adjusted Opening Balance 761,000 4,000 582,000 - - 1,347,000
5.04 Capital Transactions with Shareholders 18,000 7,000 - - - 25,000
5.04.01 Capital Increase 18,000 - - - - 18,000
5.04.03 Stock Options Granted - 7,000 - - - 7,000
5.05 Total Comprehensive Income - - - 545,000 - 545,000
5.05.01 Net Income for the Period - - - 545,000 - 545,000
5.07 Closing Balance 779,000 11,000 582,000 545,000 - 1,917,000
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Individual Interim Financial Information / Statements of Changes in Shareholders' Equity 1/1/2020 to 6/30/2020
R$ (in thousands)
Code Description Capital stock Capital reserve, granted options and treasury shares Profit reserve Retained earnings
/Accumulated losses
Other comprehensive income Shareholders' equity
5.01 Opening Balance 4,421,000 18,000 2,497,000 - 162,000 7,098,000
5.03 Adjusted Opening Balance 4,421,000 18,000 2,497,000 - 162,000 7,098,000
5.04 Capital Transactions with Shareholders 57,000 3,000 - - - 60,000
5.04.01 Capital Increases 57,000 - - - - 57,000
5.04.03 Stock Options Granted - 3,000 - - - 3,000
5.05 Total Comprehensive Income - - - 275,000 1,553,000 1,828,000
5.05.01 Net Income for the Period - - - 275,000 - 275,000
5.05.02 Other Comprehensive Income - - - - 1,553,000 1,553,000
5.05.02.07 Fair Value of Trade Receivable - - - - (2,000) (2,000)
5.05.02.08 Cash Flow Hedge - - - - (6,000) (6,000)
5.05.02.09 Income Taxes Related to Other Comprehensive Income - - - - (2,000) (2,000)
5.05.02.10 Exchange Differences over Conversion of Foreign Operations - - - - 1,563,000 1,563,000
5.06 Internal Changes of Shareholders' Equity - - 102,000 - - 102,000
5.06.08 Other - - (6,000) - - (6,000)
5.06.09 Hyperinflationary Economy Effect - - 108,000 - - 108,000
5.07 Closing Balance 4,478,000 21,000 2,599,000 275,000 1,715,000 9,088,000
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Consolidated Interim Financial Information / Balance Sheet - Assets
R$ (in thousands)
Current quarter Prior period
Code Description 06/30/2021 12/31/2020
1 Total Assets 20,481,000 18,821,000
1.01 Current Assets 9,371,000 8,349,000
1.01.01 Cash and Cash Equivalents 4,511,000 3,532,000
1.01.03 Accounts Receivable 264,000 216,000
1.01.03.01 Trade Receivables 230,000 182,000
1.01.03.02 Other Receivables 34,000 34,000
1.01.04 Inventories 3,688,000 3,739,000
1.01.06 Recoverable Taxes 683,000 768,000
1.01.08 Other Current Assets 225,000 94,000
1.01.08.01 Non-current Assets Held for Sale 147,000 0
1.01.08.01.01 Assets Held for Sale 147,000 0
1.01.08.03 Other 78,000 94,000
1.01.08.03.01 Derivative Financial Instruments 0 57,000
1.01.08.03.03 Other Current Assets 78,000 37,000
1.02 Non-current Assets 11,110,000 10,472,000
1.02.01 Long-Term Assets 1,105,000 1,190,000
1.02.01.09 Receivable From Related Parties 179,000 178,000
1.02.01.10 Other Non-current Assets 926,000 1,012,000
1.02.01.10.04 Recoverable Taxes 771,000 866,000
1.02.01.10.05 Restricted Deposits for Legal Proceedings 132,000 134,000
1.02.01.10.06 Derivative Financial Instruments 2,000 11,000
1.02.01.10.07 Other Non-current Assets 21,000 1,000
1.02.02 Investments 798,000 769,000
1.02.02.01 Investments in Associates 798,000 769,000
1.02.02.01.02 Investments in Subsidiaries 798,000 769,000
1.02.03 Property, Plant and Equipment 8,160,000 7,476,000
1.02.03.01 Property, Plant and Equipment in Use 5,456,000 5,043,000
1.02.03.02 Right of Use on Leases 2,704,000 2,433,000
1.02.04 Intangible Assets 1,047,000 1,037,000
1.02.04.01 Intangible Assets 1,047,000 1,037,000
1.02.04.01.02 Intangible Assets 1,047,000 1,037,000
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Consolidated Interim Financial Information / Balance Sheet - Liabilities
R$ (in thousands)
Current quarter Prior period
Code Description 06/30/2021 12/31/2020
2 Total Liabilities 20,481,000 18,821,000
2.01 Current Liabilities 8,006,000 8,786,000
2.01.01 Payroll and Related Taxes 408,000 371,000
2.01.02 Trade Payables 4,505,000 5,058,000
2.01.03 Taxes and Contributions Payable 282,000 528,000
2.01.04 Borrowings and Financing 2,191,000 2,120,000
2.01.04.01 Borrowings and Financing 260,000 280,000
2.01.04.02 Debentures 1,931,000 1,840,000
2.01.05 Other Liabilities 620,000 709,000
2.01.05.01 Payables to Related Parties 104,000 41,000
2.01.05.02 Others 516,000 668,000
2.01.05.02.01 Dividends and Interest on Own Capital - 85,000
2.01.05.02.08 Financing Related to Acquisition of Assets 51,000 34,000
2.01.05.02.09 Deferred Revenue 139,000 227,000
2.01.05.02.12 Other Current Liabilities 113,000 150,000
2.01.05.02.17 Lease Liability 213,000 172,000
2.02 Non-current Liabilities 10,558,000 8,688,000
2.02.01 Borrowings and Financing 7,344,000 5,711,000
2.02.01.01 Borrowings and Financing 984,000 952,000
2.02.01.02 Debentures 6,360,000 4,759,000
2.02.02 Other Liabilities 2,890,000 2,612,000
2.02.02.02 Others 2,890,000 2,612,000
2.02.02.02.07 Property Tax 12,000 8,000
2.02.02.02.09 Other Accounts Payable 2,878,000 2,604,000
2.02.03 Deferred Taxes 72,000 82,000
2.02.03.01 Deferred Income Tax and Social Contribution 72,000 82,000
2.02.04 Provision for Legal Proceedings 251,000 282,000
2.02.06 Deferred Revenue 1,000 1,000
2.03 Shareholders' Equity 1,917,000 1,347,000
2.03.01 Share Capital 779,000 761,000
2.03.02 Capital Reserves 11,000 4,000
2.03.04 Earnings Reserve 1,127,000 582,000
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Consolidated Interim Financial Information / Statements of Operations
R$ (in thousands)
Current Quarter Year to date current period Previous Quarter Year to date previous period
Code Description 4/1/2021 to 6/30/2021 1/1/2021 to 6/30/2021 4/1/2020 to 6/30/2020 1/1/2020 to 6/30/2020
3.01 Net Operating Revenue 10,049,000 19,497,000 8,242,000 16,080,000
3.02 Cost Of Sales (8,327,000) (16,268,000) (6,904,000) (13,525,000)
3.03 Gross Profit 1,722,000 3,229,000 1,338,000 2,555,000
3.04 Operating Income / Expenses (1,126,000) (2,150,000) (954,000) (1,845,000)
3.04.01 Selling Expenses (804,000) (1,560,000) (647,000) (1,267,000)
3.04.02 General and Administrative Expenses (152,000) (289,000) (104,000) (198,000)
3.04.05 Other Operating Expenses (184,000) (330,000) (203,000) (380,000)
3.04.05.01 Depreciation and Amortization (154,000) (299,000) (121,000) (238,000)
3.04.05.03 Other Operating Expenses, Net (30,000) (31,000) (82,000) (142,000)
3.04.06 Share of Profit of Associates 14,000 29,000 - -
3.05 Profit from Operations Before Net Financial Expenses 596,000 1,079,000 384,000 710,000
3.06 Net Financial Expenses (145,000) (279,000) (131,000) (286,000)
3.06.01 Financing Revenues 52,000 69,000 66,000 129,000
3.06.02 Financing Expenses (197,000) (348,000) (197,000) (415,000)
3.07 Income Loss Before Income Tax and Social Contribution 451,000 800,000 253,000 424,000
3.08 Income Tax and Social Contribution (146,000) (255,000) (84,000) (139,000)
3.08.01 Current (164,000) (265,000) (184,000) (261,000)
3.08.02 Deferred 18,000 10,000 100,000 122,000
3.09 Net Income from Continued Operations 305,000 545,000 169,000 285,000
3.10 Net Income from Discontinued Operations - - 58,000 64,000
3.10.01 Net Income from Discontinued Operations - - 58,000 64,000
3.11 Net Income for the Period 305,000 545,000 227,000 349,000
3.11.01 Attributed Controlling Company Partners 305,000 545,000 175,000 275,000
3.11.02 Attributed Partners Non-controlling - - 52,000 74,000
3.99 Earnings per Share - (Reais/Share)
3.99.01 Basic Earnings per Share
3.99.01.01 Common 1.13758 2.02854 0.67829 1.06589
3.99.02 Diluted Earnings per Share
3.99.02.01 Common 1.13758 2.02854 0.67829 1.06589
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Consolidated Interim Financial Information / Statements of Comprehensive Income
R$ (in thousands)
Current Quarter Year to date current period Previous Quarter Year to date previous period
Code Description 4/1/2021 to 6/30/2021 1/1/2021 to 6/30/2021 4/1/2020 to 6/30/2020 1/1/2020 to 6/30/2020
4.01 Net income for the Period 305,000 545,000 227,000 349,000
4.02 Other Comprehensive Income - - 1,431,000 2,043,000
4.02.02 Foreign Currency Translation - - 1,433,000 2,052,000
4.02.04 Fair Value of Trade Receivables - - (1,000) -
4.02.05 Cash Flow Hedge - - (1,000) (5,000)
4.02.06 Income Taxes over Other Comprehensive Income - - - (2,000)
4.02.08 Other Comprehensive Income - - - (2,000)
4.03 Total Comprehensive Income for the Period 305,000 545,000 1,658,000 2,392,000
4.03.01 Attributable To Controlling Shareholders 305,000 545,000 1,244,000 1,828,000
4.03.02 Attributable To Non-Controlling Shareholders - - 414,000 564,000
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Consolidated Interim Financial Information / Satatements of Cash Flows - Indirect method
R$ (in thousands)
Current period accumulated Prior period accumulated
Code Description 01/01/2021 - 06/30/2021 01/01/2020 - 06/30/2020
6.01 Net Cash Operating Activities 496,000 (888,000)
6.01.01 Cash Provided by The Operations 1,347,000 1,315,000
6.01.01.01 Net Income for The Period 545,000 349,000
6.01.01.02 Deferred Income Tax and Social Contribution (10,000) (185,000)
6.01.01.03 Gain (Losses) on Disposal of Property and Equipments 68,000 127,000
6.01.01.04 Depreciation and Amortization 324,000 646,000
6.01.01.05 Interest and Inflation Adjustments 401,000 415,000
6.01.01.07 Share of Profit (Loss) of Subsidiaries and Associates (29,000) 41,000
6.01.01.08 (Reversal) Provision for Legal Proceedings (24,000) 3,000
6.01.01.10 Provision for Share Purchase Options 7,000 3,000
6.01.01.11 Provision (Reversal) for Doubtful Accounts 1,000 -
6.01.01.13 Provision (Reversal) for Inventory Losses and Damages 138,000 (7,000)
6.01.01.14 Other Operating Expenses / Revenues - 20,000
6.01.01.16 Gain on Leasing Liabilities Write-Off (74,000) (97,000)
6.01.02 Changes in Assets and Liabilities (851,000) (2,203,000)
6.01.02.01 Accounts Receivable (49,000) (32,000)
6.01.02.02 Inventories (87,000) 28,000
6.01.02.03 Recoverable Taxes 189,000 (94,000)
6.01.02.04 Other Assets (67,000) 89,000
6.01.02.05 Related Parties 66,000 208,000
6.01.02.06 Restricted Deposits for Legal Proceeding 3,000 17,000
6.01.02.07 Trade Payables (551,000) (2,593,000)
6.01.02.08 Payroll and Related Taxes 37,000 19,000
6.01.02.09 Taxes and Social Contributions Payable (8,000) 301,000
6.01.02.10 Payments of Provision for Risk (19,000) (13,000)
6.01.02.11 Deferred Revenue (97,000) (15,000)
6.01.02.12 Other Payables (30,000) (118,000)
6.01.02.13 Income Tax and Social Contribution,Paid (238,000) -
6.02 Net Cash of Investing Activities (757,000) (359,000)
6.02.02 Acquisition of Property and Equipment (739,000) (697,000)
6.02.03 Increase in Intangible Assets (19,000) (40,000)
6.02.04 Sales of Property and Equipment 1,000 385,000
6.02.09 Acquisition of Investment Property - (7,000)
6.03 Net Cash of Financing Activities 1,240,000 384,000
6.03.01 Capital Increase 18,000
6.03.02 Proceeds From Borrowings and Financing 1,874,000 2,659,000
6.03.03 Payments of Borrowings and Financing (366,000) (1,788,000)
6.03.05 Dividends and Interest on Equity, Paid (85,000) (124,000)
6.03.09 Payment of Lease Liability (201,000) (363,000)
6.04 Exchange Variation Cash and Cash Equivalents - 455,000
6.05 Increase (Decrease) in Cash and Cash Equivalents 979,000 (408,000)
6.05.01 Cash and Cash Equivalents at the Beginning of the Period 3,532,000 5,026,000
6.05.02 Cash and Cash Equivalents at the End of the Period 4,511,000 4,618,000
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FREE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE) ITR - Interim Financial Information - June 30,2021 - SENDAS DISTRIBUIDORA S.A.
Consolidated Interim Financial Information / Statements of Changes in Shareholders' Equity 1/1/2021 to 6/30/2021
R$ (in thousands)
Code Description

Capital

stock

Capital reserve, granted options and treasury shares Profit reserve Retained earnings
/Accumulated losses
Other comprehensive income Shareholders' equity Non-Controlling Shareholders' participation Consolidated Shareholders' equity
5.01 Opening balance 761,000 4,000 645,000 - - 1,410,000 - 1,410,000
5.02 Prior Period Adjustments - - (63,000) - - (63,000) - (63,000)
5.03 Adjusted Opening Balance 761,000 4,000 582,000 - - 1,347,000 - 1,347,000
5.04 Capital Transactions with Shareholders 18,000 7,000 - - - 25,000 - 25,000
5.04.01 Capital Increase 18,000 - - - - 18,000 - 18,000
5.04.03 Stock Options Granted - 7,000 - - - 7,000 - 7,000
5.05 Total Comprehensive Income - - - 545,000 - 545,000 - 545,000
5.05.01 Net Income for the Period - - - 545,000 - 545,000 - 545,000
5.07 Closing Balance 779,000 11,000 582,000 545,000 - 1,917,000 - 1,917,000
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FREE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE) ITR - Interim Financial Information - June 30,2021 - SENDAS DISTRIBUIDORA S.A.
Consolidated Interim Financial Information / Statements of Changes in Shareholders' Equity 1/1/2020 to 6/30/2020
R$ (in thousands)
Code Description Capital stock Capital reserve, granted options and treasury shares Profit reserve Retained earnings
/Accumulated losses
Other comprehensive income Shareholders' equity Non-Controlling Shareholders' participation Consolidated Shareholders' equity
5.01 Opening Balance 4,421,000 18,000 2,497,000 - 162,000 7,098,000 2,603,000 9,701,000
5.03 Adjusted Opening Balance 4,421,000 18,000 2,497,000 - 162,000 7,098,000 2,603,000 9,701,000
5.04 Capital Transactions with Shareholders 57,000 3,000 - - - 60,000 (68,000) (8,000)
5.04.01 Capital Increases 57,000 - - - - 57,000 - 57,000
5.04.03 Stock Options Granted - 3,000 - - - 3,000 - 3,000
5.04.06 Dividends - - - - - - (68,000) (68,000)
5.05 Total Comprehensive Income - - - 275,000 1,553,000 1,828,000 564,000 2,392,000
5.05.01 Net Income for the Period - - - 275,000 - 275,000 74,000 349,000
5.05.02 Other Comprehensive Income - - - - 1,553,000 1,553,000 490,000 2,043,000
5.05.02.06 Other Comprehensive Income - - - - (2,000) (2,000) - (2,000)
5.05.02.08 Cash Flow Hedge - - - - (6,000) (6,000) 1,000 (5,000)
5.05.02.09 Income Taxes Related to Other Comprehensive Income - - - - (2,000) (2,000) - (2,000)
5.05.02.10 Exchange Differences over Conversion of Foreign Operations - - - - 1,563,000 1,563,000 489,000 2,052,000
5.06 Internal Changes of Shareholders' Equity - - 102,000 - - 102,000 1,000 103,000
5.06.08 Other - - (6,000) - - (6,000) (2,000) (8,000)
5.06.09 Hyperinflationary Economy Effect - - 108,000 - - 108,000 3,000 111,000
5.07 Closing Balance 4,478,000 21,000 2,599,000 275,000 1,715,000 9,088,000 3,100,000 12,188,000
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1 Corporate Information
Sendas Distribuidora S.A. (the 'Company' or 'Sendas') is mainly engaged in the retail and wholesale sale of food, bazar, and other products through its stores, represented by the banner 'ASSAÍ'. The Company is based in the State of Rio de Janeiro, at Avenida Ayrton Senna, 6.000, Lote 2 - Anexo A, Jacarepaguá/RJ. On June 30, 2021, the Company operated 187 stores and 13 Distribution Centers which were present in all five regions of the country, distributed in 23 states (including Federal District).
With the corporate reorganization process concluded on December 31, 2020, see note 1.2, the Company ceased to be a wholly owned subsidiary of Grupo Pão de Açucar ('GPA') and became a direct subsidiary of Wilkes Participações S.A. ('Wilkes').
On November 27, 2019, the Company took over from Casino Guichard Perrachon ('Casino') the control of Almacenes Éxito S.A. ('Éxito'), an entity operating in Colombia, under the supermarket and hypermarket banners Éxito, Carulla, Super Inter, Surtimax, and Surtimayorista, in Argentina under the banner Libertad and in Uruguay under the banners Disco and Devoto. Additionally, Éxito operates in Colombia under the banner Viva in the mall centers. On December 31, 2020, the Company transferred Éxito's control in its entirety to GPA as part of spin-off transaction, see note 1.2 and the Éxito's operations has been presented as discontinued operations, see note 27.
1.1 Listing of Sendas in the Novo Mercado of B3 and NYSE
On February 19, 2021, the Company communicated to the market, through Material Fact, that on February 10, 2021 the request for listing and admission to the trading of the Company's shares in the Novo Mercado segment of the B3 S.A. - Brasil, Bolsa, Balcão was approved. And, on February 12, 2021 the request for listing of the Company American Depositary Securities ('ADSs') representing its common shares on the New York Stock Exchange ('NYSE') was approved.
GPA's shareholders received, after the close of trading on February 26, 2021 ('Cut-off Date'), shares issued by the Company, in proportion to their respective holdings in the capital stock of GPA.
The shares and ADSs issued by the Company became to be negotiated on B3 and NYSE since March 1, 2021.
1.2 Corporate reorganization
At meetings held on December 12, 2020 and disclosed to the market on December 14, 2020, the Board of Directors of the Company and GPA approved the Transaction to separate the cash and carry business under the ASSAÍ banner from the traditional retail business of GPA.
At the Extraordinary Shareholders' Meeting held on December 31, 2020, shareholders of the Company and GPA approved the Transaction described below:
i) Spin-off of the Company: partial spin-off of Sendas with the incorporation of the spin-off assets by GPA whose the net carrying amount calculated by the independent evaluator company was R$9,179, comprising 90.93% of the total Éxito's shares held by the Company, corresponding to 393,010,656 (three hundred ninety-three million, ten thousand, six hundred fifty-six) shares and equivalent to approximately 87.80% of the total shares issued by Éxito ('Éxito participation') and for 6 (six) gas stations held by Sendas ('Operational Assets') in the amount of R$25; and
ii) Spin-off of GPA: partial spin-off of GPA which aims segregate the totality of shareholding participation that GPA holds, whose net carrying amount calculated by the independent evaluator company was R$1,216, with the distribution of the shares issued by Sendas, owned by GPA, directly to GPA's shareholders, as a proportion of one share issued by the Company for each one share issued by GPA.
In the spin-off process between Sendas and GPA, an exchange of assets was performed that transferred to GPA 9.07% of the total shares held by the Company, corresponding to 39,246,012 (thirty-nine million, two hundred and forty-six thousand and twelve) shares and equivalent to approximately 8.77% of total shares issued by Éxito undertaking the receipt of the following assets owned by GPA that may be developed by the Company:
i) 50% of the shares of Bellamar Empreendimento e Participações Ltda. ('Bellamar'), a holding Company that holds an investment in 35.76% of the Financeira Itaú CBD S.A - Crédito, Financiamento e Investimento ('FIC'), in the amount of R$769, see note 11.1, and real state in the amount of R$146.
ii) Company's capital stock increase in the amount of R$685 through: a) R$500 in cash; b) R$140 capitalization of amounts payable to GPA; c) R$45 net book assets of stores that may be developed by the Company.
iii) R$168 regarding to contingent liabilities and related judicial deposits and which the Company and GPA have agreed to be responsible after the spin-off. This indemnity effects were recorded in related parties, see note 10.
According to the material fact published on November 19, 2020, the Company obtained all necessary authorizations from its creditors, in order to proceed with the segregation of its cash & carry operation through referred spin-off, on the same date, the renegotiation of certain remuneration rates was also approved and the release from GPA as guarantor for the issuance of the Company's debentures and promissory notes. The total amount of the renegotiated debt was R$6,644, representing 85% of the Company's gross debt of the Company on December 31, 2020.On the other hand of the renegotiation of the remuneration rates, the Company obtained a 'waiver' related to financial covenants for the period of December 31, 2020 up to December 31, 2023 and due to this renegotiation, the amount of R$71 was recognized in the financial result as debt cost.
17
1.2.1 Derecognition of Éxito subsidiary
Éxito's balance sheet as of December 31, 2020 is presented below. The Company no longer presents consolidated financial statements on December 31, 2020, since the derecognition of Company's only subsidiary has occurred.
ASSETS 12/31/2020
Current
Cash and cash equivalents 3,687
Trade receivables 384
Other accounts receivables 220
Inventories 2,993
Recoverable taxes 570
Other current assets 130
7,984
Assets held for sale 30
Total current assets 8,014
Non-current
Related parties 82
Legal deposits 3
Other non-current assets 171
Investments 480
Investment properties 3,639
Property, plant and equipment 10,504
Intangible assets 4,051
Total non-current assets 18,930
Total assets 26,944
LIABILITIES
Current
Trade payable 6,449
Borrowings and financing 1,051
Payroll and related taxes 375
Lease liabilities 377
Related parties 77
Taxes and social contribution payable 288
Acquisition of non-controlling interest 636
Deferred revenues 200
Dividends payable 40
Other current liabilities 236
Total current liabilities 9,729
Non-current
Borrowings and financing 520
Deferrend income tax and social contribution 883
Provision for legal proceedings 139
Lease liabilities 2,039
Other non-current liabilities 39
Total non-current liabilities 3,620
SHAREHOLDERS' EQUITY
Total shareholders' equity 13,595
Total liabilities and shareholders' equity 26,944
1.3 Impacts of the pandemic on the Company's interim financial information
Since December 2019, a new strain of Coronavirus named as COVID-19 has spread across the world. Since then, the Company has been monitoring the spread of COVID-19 and its impacts on its operations. Several actions have been taken by the Company, among them, we appointed a crisis committee composed of senior management, which makes decisions in line with recommendations of the Brazilian Ministry of Health, local authorities, and professional associations.
The Company implemented all the measures to mitigate the transmission of virus at our stores, warehouses, and offices, such as frequent sanitization, employees' safety/protection equipment, flexible working hours, and home office, among others.
Since the beginning of the COVID-19 outbreak, our stores have remained open during periods of general lockdown, as we are considered an essential service. The Company has a strong commitment to society to continue selling essential products to its customers. We did not face supply-side hurdles from industries that continued supplying our distribution centers and stores.
On March 10, 2020, CVM issued circular letter CVM-SNC/SEP No. 02/2020 and on January 29, 2021 issued circular letter CVM-SNC/SEP No. 01/2021, guiding publicly held Companies to carefully assess the impacts of COVID-19 on their business and report in the interim financial information the main risks and uncertainties as result of such analysis, following the applicable accounting standards.
In this regard, the Company fully analyzed its financial statements, in addition to updating the analyses of going concern. Below are the key topics analyzed:
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• The Company reviewed its budget, adopted to estimate the calculation of the recovery of store assets and intangible assets on December 31, 2020, and no significant reductions were seen in revenues, and in other items of the income statement to evidence impairment of these assets. Due to uncertainties concerning the end of the pandemic and its macroeconomic effects, the Company analyzed the indication of impairment for certain assets and, accordingly, updated its impairment tests. There were no new elements in the semester ended June 30, 2021 that the Company's need to review the asset recovery test.
The recoverable value is determined by calculating the value in use, from cash projections deriving from financial budgets, which were reviewed and approved by senior management for the next three years, considering the assumptions updated for December 31, 2020. The discount rate applied to cash flow projections is 9.8% on December 31, 2020, and the cash flows to exceed three years are extrapolated, applying a growth rate of 4.6% on December 31, 2020. As a result of this analysis, we did not identify the need for recording a provision for impairment of these assets;
• The Company analyzed the collection of balances of trade receivables from credit card operators, clients, galleries at our stores, property rentals, and concluded that, at this point, it is not necessary to record provisions, in addition to those already recorded;
• Concerning inventories, the Company does not foresee the need to make a market price adjustment;
• Financial instruments already reflect the market assumptions in their valuation, there are no additional exposures not disclosed. The Company is not exposed to significant financing denominated in US dollars;
• At this point, the Company does not foresee additional funding; and
• Finally, the costs necessary to adapt the Company's stores to serve the public were not significant.
In summary, according to Management's estimates and the monitoring of the impacts of the pandemic, there are no effects that should be recorded in the Company's interim financial information for de period ended June 30, 2021, nor are there any effects on the continuity and / or estimates of the Company that would justify changes or recording provisions in addition to those already disclosed. The Company will continue to monitor and evaluate the impacts and, if necessary, make the necessary disclosures.
1.4 Going concern analysis
Management has assessed the Company's ability to continue operating in a foreseeable future and concluded that Company has ability to maintain its operations and systems working regularly, even in the face of the COVID-19 pandemic (see note 1.3). Therefore, Management is not aware of any material uncertainty that could indicates significant doubts about its ability to continue operating. The interim financial information has been prepared based on the assumption of business continuity.
2 Basis of preparation and disclosure of the individual and consolidated interim financial information
The individual and consolidated interim financial information have been prepared in accordance with IAS 34 - Interim Financial Reporting issued by International Accounting Standards Board ('IASB') and accounting standard CPC 21 (R1) - Interim report and disclosed aligned with the standards approved by the Brazilian Securities and Exchange Commission ('CVM'), applicable to the preparation of the Interim Financial Information.
The interim financial information has been prepared on a historical cost basis except for certain financial instruments measured at their fair value. All relevant information in the financial statements is being evidenced by and corresponds to that used by Management in the administration of the Company.
The individual and consolidated interim financial information are presented in millions of Brazilian Reais (R$), which is the functional currency of the Company.
The interim financial information for the six-month period ended June 30, 2021 were approved by the Board of Directors on July 27, 2021.
3 Significant accounting policies
The main accounting policies and practices applied by the Company to the preparation of the individual and consolidated interim financial information are in accordance with those adopted and disclosed in note 3 and in each explanatory note corresponding to the financial statements for the year ended December 31, 2020, and, therefore, it should be read together.
3.1 Standards, amendments and interpretation
There were no new standards, amendments and interpretation issued that must be disclosed for the three-month period ended June 30, 2021.
4 Restatement of the interim financial information
4.1 Restatement of the corresponding amounts as result of Éxito's spin-off
The consolidated interim financial statement of operations, consolidated statement of added value for the period and the explanatory notes for the six-month period ended June 30, 2020 are being restated due to Éxito subsidiary's spin-off according to the effects of such transaction in compliance with the accounting standard CPC 31 / IFRS 5 - Non-Current Assets Held for Sale and Discontinued Operation.
19
The cash flow statement includes continued and discontinued operations in line with accounting standard CPC 31 / IFRS 5.
Statement of Operations Consolidated
6/30/2020
Orinally presented Spin-off effects Restated
Net operating revenue 26,411 (10,331) 16,080
Cost of sales (21,328) 7,803 (13,525)
Gross profit 5,083 (2,528) 2,555
Operating expenses, net
Selling expenses (2,657) 1,390 (1,267)
General and administrative expenses (639) 441 (198)
Depreciation and amortization (584) 346 (238)
Share of profit (loss) of associates (41) 41 -
Other operating expenses, net (244) 102 (142)
(4,165) 2,320 (1,845)
Operating profit before net financial result 918 (208) 710
Net financial result (444) 158 (286)
Income before income taxes from continued operations 474 (50) 424
Income tax and social contribution (125) (14) (139)
Net income from continued operations 349 (64) 285
Discontinued operations
Net income from discontinued operations - 64 64
Net income for the period 349 - 349
Statement of added value Consolidated
6/30/2020
Orinally presented Spin-off effects Restated
Revenues
Sales of goods 29,195 (11,570) 17,625
(Allowance) reversal for doubtful accounts (10) 9 (1)
Other revenues 280 43 323
29,465 (11,518) 17,947
Products acquired from third parties
Costs of goods sold (21,828) 7,399 (14,429)
Materials, energy, outsourced services and other (2,111) 979 (1,132)
(23,939) 8,378 (15,561)
Gross value added 5,526 (3,140) 2,386
Retention
Depreciation and amortization (646) 394 (252)
Net value added produced by the Company 4,880 (2,746) 2,134
Value added received in transfer
Share of profit (loss) of subsidiaries and associates (41) 41 -
Financial revenue 227 (98) 129
186 (57) 129
Net income from discontinued operations - 64 64
Total value added to distribute 5,066 (2,739) 2,327
Personnel 1,911 (1,023) 888
Direct compensation 1,459 (902) 557
Benefits 317 (86) 231
Government severance indemnity fund for employees (FGTS) 46 - 46
Others 89 (35) 54
Taxes, fees and contributions 2,127 (1,460) 667
Federal 506 (213) 293
State 1,530 (1,184) 346
Municipal 91 (63) 28
External financiers 679 (256) 423
Interest 671 (256) 415
Rental 8 - 8
Shareholders' remuneration 349 - 349
Retained earnings for the period 275 - 275
Non-controlling interest in retained earnings 74 - 74
Total added value distributed 5,066 (2,739) 2,327
4.2 Restatement - Earnings per share
On October 5, 2020, the reverse stock split of 3,269,992,034 (three billion, two hundred sixty-nine million, nine hundred ninety-two thousand and thirty-four) nominative common shares, without nominal value issued by the Company, in the proportion of 12,1854776946393 to compose 1 (one) share ('Reverse Stock Split') was approved, resulting in the Company's capital stock divided into 268,351,567 (two hundred sixty-eight million, three hundred fifty-one thousand and five hundred sixty-seven) nominative common shares, without nominal value. The reverse stock split was not reflected in the interim financial information on June 30, 2020, originally issued on October 6, 2020, which disagree with the accounting standard CPC 41 / IAS 33 - Earning per share, resulting in the following restatement:
6/30/2020
Originally presented Reverse stock split effects Restated
Basic and diluted number:
Basic profit allocated and not distributed 275 - 275
Allocated net income available to ordinary shareholders 275 - 275
Basic and diluted denominator (million shares)
Weighted average number of shares 3,141 12.18548 258
Basic and diluted earnings per million shares (R$) 0.08755 - 1.06589
20
4.3 Restatement of profit retention reserve and proposed dividends
In the financial statements as of December 31, 2020, published on February 22, 2021, the legal reserve was constituted in the amount of R$217, exceeding the limit of 20% of the Company's capital stock as established by art. 193 of Law No. 6,404/1976. The table below presents the impacts of the adjustments for the proper constitution of the legal reserve and proposed dividends and the restatement of the Company's financial statement, see note 20.2 and 20.3.
Below we present the impacts on the balance sheet lines:
12/31/2020
Originally presented Adjustments Restated
Current liabilities
Dividends payable 22 63 85
Total current liabilities 8,723 63 8,786
Shareholders' equity
Legal reserve 217 (65) 152
Profit retention 428 65 493
Dividends allocation (22) (63) (85)
Total Shareholders' equity 1,410 (63) 1,347
5 Significant accounting judgments, estimates, and assumptions
The preparation of the individual and consolidated interim financial information requires Management to makes judgments and estimates and adopt assumptions that impact the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities at the end of the period, however, the uncertainty about these assumptions and estimates could result in substantial adjustments to the carrying amount of asset or liability impacted in upcoming periods.
The significant assumptions and estimates applied on the preparation of the individual and consolidated interim financial information for the period ended June 30, 2021, were the same as those adopted in the individual and consolidated financial statements for the year ended December 31, 2020.
6 Cash and cash equivalents
6/30/2021 12/31/2020
Cash and bank accounts - Brazil 70 64
Cash and bank accounts - Abroad (*) 23 29
Financial investments - Brazil (**) 4,418 3,439
4,511 3,532
(*) On June 30, 2021, the Company had funds held abroad, being R$23 in US Dollars (R$24 in US Dollars and R$5 in Colombian Pesos on December 31, 2020).
(**) On June 30, 2021, the financial investments correspond to the repurchase and resale agreements and certificate of deposits, yielded by the weighted average of 98.90% of CDI - Interbank Deposit Certificate (96.96% of CDI on December 31, 2020) and redeemable within terms less than 90 days, as of the date of investment, without losing income.
7 Trade receivables
Note 6/30/2021 12/31/2020
From sales with:
Credit card companies 7.1 68 62
Credit card companies with related parties 10.1 13 17
Sales ticket and others 122 77
Trade receivables with related parties 10.1 20 10
Trade receivables with suppliers/slips 12 20
Allowance for doubtful accounts 7.2 (5) (4)
230 182
7.1 Credit card companies
The Company, through the cash management strategy, anticipates the amount receivable with credit card companies, without any right of recourse or related obligation and derecognizes the balance of trade receivables.
7.2 Allowance for doubtful accounts
6/30/2021 12/31/2020
At the beginning of the period (4) (5)
Additions (16) (12)
Reversals 15 13
At the end of the period (5) (4)
Set forth below the breakdown of trade receivables by their gross amount by maturity period:
Overdue
Total Due Up to
30 days
> 90 days
6/30/2021 235 231 1 3
12/31/2020 186 181 2 3 -
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8 Inventories
Note 6/30/2021 12/31/2020
Stores 3,321 3,416
Distribution centers 8.1 392 374
Allowance for loss on inventory obsolescence and damages 8.2 (25) (51)
3,688 3,739
8.1 Commercial agreements
On June 30, 2021, the amount of unrealized commercial agreements, as a reduction of inventory balance, totaled R$474 (R$444 on December 31, 2020).
8.2 Allowance for loss on inventory obsolescence and damages
6/30/2021 12/31/2020
At the beginning of the period (51) (41)
Additions (147) (140)
Write-offs 9 8
Reversals 164 141
At the end of the period (25) (32)
9 Recoverable taxes
Note 6/30/2021 12/31/2020
State VAT tax credits - ICMS 9.1 1,205 1,311
Social Integration Program and Contribution for Social Security Financing - PIS/COFINS 9.2 266 141
Provision for exclusion of ICMS on PIS/COFINS calculation base 9.2 (51) -
Social Security Contribution - INSS 9.3 31 36
Income tax and social contribution 1 144
Others 2 2
Total 1,454 1,634
Current 683 768
Non-current 771 866
9.1 State VAT tax credits - ICMS
Since 2008, the Brazilian States have been substantially amending their local laws aiming at implementing and broadening the ICMS tax replacement system. The referred system implies the prepayment of ICMS throughout the commercial chain, upon goods outflow from a manufacturer or importer or their inflow into the State. The expansion of such system to a wider range of products traded at retail assumes that the trading cycle of these products will end in the State, such that ICMS is fully owed to such State.
The refund process requires evidence through tax documents and digital files of transactions made, entitling the Company to such a refund. Only after ratification by State tax authorities and/or the compliance with specific ancillary obligations aiming to support such evidence that credits can be used by the Company, which occur in periods after these are generated.
Since the number of items traded at the retail subject to tax replacement has been continuously increasing, the tax credit to be refunded by the Company has also grown. The Company has been realizing referred credits with authorization for immediate offset with those credits due in view of its operations, through the special regime, also other procedures regulated by state rules.
With respect to credits that cannot yet be immediately offset, the Company's Management, based on a technical recovery study, based on the future expectation of growth and consequent compensation with taxes payable arising from its operations, believes that its future compensation is viable. The studies mentioned are prepared and periodically reviewed based on information extracted from the strategic planning previously approved by the Company's Board of Directors. For the interim financial information as of June 30, 2021, the Company's management has monitoring controls over adherence to the annually established plan, reassessing and including new elements that contribute to the realization of the ICMS balance to be recovered, as shown in the table below:
Year Amount
Em 1 year 453
From 1 to 2 years 248
From 2 to 3 years 260
From 3 to 4 years 139
From 4 to 5 years 32
After 5 years 73
Total 1,205
9.2 PIS and COFINS credits
On March 15, 2017, the Federal Supreme Court ('STF') recognized, as a matter of general repercussion, the unconstitutionality of the inclusion of ICMS in the PIS and COFINS calculation base. On May 13, 2021 judged the Declaration Embargoes in relation to the amount to be excluded from the calculation basis of the contributions, in which case it should only be the ICMS paid, or if the entire ICMS, as shown in respective invoices.
22
The STF decided to modulate the effects of the decision, for taxpayers who distributed the lawsuits before March 15, 2017 or with administrative proceedings in progress before that same date, would be have rights to take advantage of the past period. As the decision was rendered in a process with recognized general repercussions, the understanding reached is mandatory for all judges and courts. The Company informs that it had a lawsuit filed on October 31, 2013, having obtained a favorable decision and a final and unappealable decision on July 16, 2021, thus allowing the recognition of the credit for the period covered by the lawsuit.
The Brazilian Securities and Exchange Commission (CVM) had published Circular Letter No. 01/2021, among other topics, giving recommendations to publicly traded companies regarding the recognition of tax credits arising from the exclusion of ICMS from the PIS calculation basis and of COFINS, recommending that recognition only occur when there is reference, in the final decision, to the period covered in the lawsuit and the amount of ICMS to be excluded, until the decision becomes final.
On June 30, 2021, regarding available information, the Company partially recorded its right, net of provision, in the amount of R$62 (R$40 in net revenue and R$22 in financial result, arising from monetary correction). Due to the volume of data, the extension of the period to be calculated and the complexity of the calculation, in addition to the rules of the Federal Revenue of Brazil to be attended to determine all the credit to be offset, that is a preliminary estimate and the total amount will be calculated, the Company estimates that the difference between the estimate amount and the amount to be calculated will not be significant. Such provision refers to the period that the Company is calculating and detailing the supporting documentation. The Company will use its best efforts in order to have the definitive recognition in the third quarter of 2021, with the final and unappealable decision, as mentioned above.
Currently, the Company, according the favorable judgment of the STF, has been recognizing the exclusion of ICMS from the PIS and COFINS calculation basis based on the same assumptions mentioned previously.
9.3 Incidence of social security contributions
On August 28, 2020, the STF, in general repercussion, recognized as constitutional the incidence of social security contributions (INSS) on the additional one-third of vacation payment. The Company has been monitoring the progress of these issues involving unconstitutionality in social security contributions, and together with its legal advisors, concluded that the elements to date do not impact the recoverability of the respective INSS credits recorded in the amount of R$11 on June 30, 2021 (R$11 on December 31, 2020).
10 Related Parties
10.1 Balances and related party transactions
Assets Liabilities
Clients Other assets Suppliers Other liabilities
6/30/2021 12/31/2020 6/30/2021 12/31/2020 6/30/2021 12/31/2020 6/30/2021 12/31/2020
Controlling shareholders
Euris - - - - - - 1 -
Casino Guichard Perrachon 10 10 - - - - - -
10 10 - - - - 1 -
Other related parties
GPA (i) 10 - 166 168 10 - 103 41
Greenyellow - - 2 - - - - -
Joint venture
Financeira Itaú CBD S.A. Crédito, Financiamento e Investimento ('FIC') 13 17 11 10 8 11 - -
23 17 179 168 10 - 103 41
Total 33 27 179 168 10 - 104 41
Parent Company Consolidated
Transactions Transactions
Revenue (expenses) Revenue (expenses)
6/30/2021 6/30/2020 6/30/2021
Controlling shareholders
Wilkes Participações S/A (1) - -
Euris (1) - -
Casino Guichard Perrachon (23) - -
(25) - -
Other related parties
GPA (i) (89) (115) (115)
FIC 6 4 4
Compre Bem (3) 2 2
Puntos Colombia - - (54)
Tuya - - 11
Greenyellow (14) (2) (18)
Grupo Exito - - (10)
Others - - (1)
(100) (111) (181)
Total (125) (111) (181)
(i) Amounts refer to the spin-off and responsibility agreement which the Company assigned related to the corporate reorganization occurred on Decemebr 31, 2020. See note 1.2.
23
10.2 Management compensation
Expenses referring to the statutory executive board compensation recorded in the Company's statement of operations in the periods ended June 30, 2021 and 2020 as follows (amounts expressed in thousands reais):
Base salary Variable compensation Stock option plan Total
2021 2020 2021 2020 2021 2020 2021 2020
Executive officers 16,024 - - - 2,125 - 18,149 -
Board of director 14,660 9,690 7,243 3,513 1,597 2,835 23,500 16,038
Fiscal council 72 - - - - - 72 -
30,756 9,690 7,243 3,513 3,722 2,835 41,721 16,038
The stock option plan refers to the Company's executives holding GPA shares and this plan has been treated in the Company's statement of operations, related expenses are allocated to the Company and recorded in the statement of operations against capital reserve - stock options in shareholders' equity.
11 Investiments
The details of the Company's investment at the end of the period are presented below:
Participation in investments - %
Direct participation
Investment type Company Country 6/30/2021 12/31/2020
Joint venture Bellamar Empreendimento e Participações S.A. Brazil 50.00 50.00
Investiments composition and breakdown
Bellamar
As of Decemeber 31, 2020 769
Share of profit and loss of associates 29
As of June 30, 2021 798
11.1 Acquisition of Bellamar's participation
On December 31, 2020, the Company's shareholders approved through extraordinary general meeting the exchange transaction between GPA and Sendas that comprised the acquisition of 50% of Bellamar's participation which holds 35.76% of FIC'S capital stock. According to this transaction, the Company indirectly holds hereafter 17.88% of FIC's capital stock.
The transaction related to Bellamar's acquisition was assessed as a joint venture, in accordance with CPC 19 (R2) / IFRS 11 - Joint business.
Since the acquisition is a joint venture valued through the equity method, the assets identified, and the liabilities assumed are recorded within the investment line.
Corporate information
FIC has the practice off entire operations, as permitted by laws and regulamentation, to credit, financing and investments entities, the issuance and management of owned and third parties' credit cards, as well as the performance of correspondents' function in the country. FIC's operations are conducted by Itaú Unibanco Holding S.A.
In regard with corporate reorganization process involving the Company, see note 1.2, the Company prepared a study in order to evaluate the fair value of intangible assets and the indicative purchase price allocation ('PPA') related to the minority participation acquisition of 17.88% of FIC's shares, through Bellamar, by the Company on December 31, 2020.
Determination of consideration transferred through the acquisition
The Company transferred to GPA equivalent to 9.07% of Éxito's shares, corresponding to 39,246,012 (thirty-nine million, two hundred forty-six thousand and twelve) shares.
Fair value of identified assets and liabilities acquired
Management hired an independent company to determine the value of FIC's shares, evaluated in the range of R$4.63 up to R$4.86 per share.
In order to determine the value of shares during the spin-off process, it was adopted the amount of R$4.74, therefore, on December 31, 2020, the market value of FIC was in the amount of R$4,301, that represents the amount of R$1,538 related to the fair value of Bellamar's investment on FIC.
According to the exchange transaction, the Company received 50% of Bellamar's shares by means of fair value, in amount of R$769.
Composition of acquisition price
For the period ended June 30, 2021, the Company concluded the allocation of the acquisition value corresponding to the 17.88% participation in FIC of R$ 769. FIC's identifiable assets and liabilities are demonstrated in the table below.
Assets acquired and liabilities assumed
The fair value of FIC's identifiable assets and liabilties on December 31, 2020 (acquisition date) are demonstrated as follows:
24
Assets
Cash and cash equivalents 29
Marketable securities 22
Credit operations 6,213
Other credits 98
Other receivables 3
Other credits, non-current 265
Property, plant and equipment and intangible assets 3,127
Investments 47
9,804
Liabilities
Deposits (790)
Interfinancial relations (2,457)
Other liabilities (2,256)
(5,503)
Total fair value of identifiable net assets 4,301
Company's participation 17.88%
Acquisition price 769
Book shareholders's equity acquired (211)
Fair value adjustment - intangible assets (388)
Unallocated portion 170
11.2 Joint venture

The Company's investment in Bellamar is recognized as a joint venture and is recorded through the equity method, in accordance with account standard CPC 18 / IAS 28 - Investments in associates and joint ventures. Based on equity method, the investment in a joint venture should be recognized by the cost, on the beginning. The account value of investment is adjusted for variation recognition purposes related to Company's participation on shareholders' equity of joint venture after the acquisition date.

The joint venture's interim financial information is prepared on the same period basis of disclosure that the Company. When necessary, adjustments are made to ensure that polices are aligned with the Company's.
After the method equity is applied, the Company determines if it is necessary recognize additional loss of recuperable value over investments related to the joint venture. The Company will determine, on each annual closing date of balance sheet, if exists objective evidence that means the investment on joint venture suffered loss due to the reduction of recuperable value. In case of such loss is identified, the Company calculates the value of loss due to the reduction of recuperable value as a difference between the joint venture's recuperable value and the carrying amount and recognizes the loss on its statement of operations. On December 31, 2020, the analysis was not made by the Company, since on this date, the Company recognized the initial participation, regarding explanation on note 11.1.
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12 Property, plant and equipment
12.1 Property, plant and equipment breakdown
As of Decemeber 31, 2020 Additions Remeasurment Write-off Depreciation Transfers and others (i) As of June 30, 2021
Lands 481 26 - - - (33) 474
Buildings 609 58 - - (7) 1 661
Improvements 2,598 423 - (1) (86) (68) 2,866
Equipment 635 83 - (1) (62) (1) 654
Facilities 269 31 - - (12) 1 289
Furnitures and appliances 340 28 - (1) (25) 6 348
Constructions in progress 78 111 - - - (64) 125
Others 37 2 - - (7) 7 39
Subtotal 5,047 762 - (3) (199) (151) 5,456
Lease - right of use:
Buildings 2,423 206 231 (66) (113) 4 2,685
Equipment 6 16 - - (3) - 19
Subtotal 2,429 222 231 (66) (116) 4 2,704
Total 7,476 984 231 (69) (315) (147) 8,160
As of December 31, 2019 Additions Remeasurment Write-off Depreciation Transfers and others (ii) As of June 30, 2020
Lands 450 38 - (100) - (114) 274
Buildings 846 32 - (168) (6) (163) 541
Improvements 1,849 319 - (62) (68) 280 2,318
Equipment 548 72 - (2) (51) (8) 559
Facilities 265 14 - (16) (10) (13) 240
Furnitures and appliances 290 22 - - (21) 10 301
Constructions in progress 37 47 - (5) - (46) 33
Others 35 2 - - (6) 6 37
Subtotal 4,320 546 - (353) (162) (48) 4,303
Lease - right of use:
Buildings 1,700 441 99 (59) (80) 5 2,106
Equipment 5 - - - - - 5
Subtotal 1,705 441 99 (59) (80) 5 2,111
Total 6,025 987 99 (412) (242) (43) 6,414
(i) On the six-month period ended June 30, 2021, the transfer column presents the transfer between fixed assets to 'assets held for sale' in amount of R$147, see note 28.2.
(ii) On the six-month period ended June 30, 2020, the transfer column presents: (a) the capital contribution through GPA's real state in the amount of R$57 and (b) the transfer of fixed assets to 'assets held for sale' in amount of R$106.
12.2 Composition of Property, plant and equipment
6/30/2021 12/31/2020
Historical cost Accumulated depreciation Net amount Historical cost Accumulated depreciation Net amount
Lands 474 - 474 481 - 481
Buildings 759 (98) 661 704 (95) 609
Improvements 3,555 (689) 2,866 3,203 (605) 2,598
Equipment 1,138 (484) 654 1,061 (426) 635
Facilities 385 (96) 289 354 (85) 269
Furnitures and appliances 543 (195) 348 513 (173) 340
Constructions in progress 125 - 125 78 - 78
Others 110 (71) 39 101 (64) 37
7,089 (1,633) 5,456 6,495 (1,448) 5,047
Financial lease
Buildings 3,540 (855) 2,685 3,205 (782) 2,423
Equipment 62 (43) 19 47 (41) 6
3,602 (898) 2,704 3,252 (823) 2,429
Total property, plant and equipment 10,691 (2,531) 8,160 9,747 (2,271) 7,476
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12.3 Capitalized borrowing costs
The capitalized borrowing costs for the six-month periods ended on June 30, 2021 were R$7 (R$3 on June 30, 2020). The rate used for the capitalization of borrowing costs was 155.25% (140.78% on June 30, 2020) of CDI, corresponding to the effective interest rate of loans taken by the Company.
12.4 Additions to property, plant and equipment for cash flow presentation purpose are as follows
6/30/2021 6/30/2020
Additions 984 987
Leases (222) (441)
Capitalized interest (7) (3)
Financing of property and equipment - Additions (711) (478)
Financing of property and equipment - Payments 695 506
Total 739 571
(i) Additions related to the acquisition of operating assets, purchase of land and buildings to expansion activities, building of new stores, improvements of existing distribution centers and stores and investments in equipment and information technology.
(ii) The additions and payments of property, plant and equipment above are presented to reconcile the acquisitions during the period with the amounts presented in the statement of cash flows net of items that did not impact cash flow.
12.5 Other information
On June 30, 2021, the Company recorded in the cost of sales and services the amount of R$25 (R$15 on June 30, 2020), relating to the depreciation of machinery, building and facilities of distribution centers.
13 Intangible
12/31/2020 Additions Amortization 6/30/2021
Goodwill 618 - - 618
Softwares 70 7 (6) 71
Commercial rights 310 12 (3) 319
Tradename 39 - - 39
1,037 19 (9) 1,047
12/31/2019 Additions Amortization Transfers 6/30/2020
Goodwill 618 - - - 618
Softwares 64 7 (8) 1 64
Commercial rights 312 6 (2) - 316
Tradename 39 - - - 39
1,033 13 (10) 1 1,037
6/30/2021 12/31/2020
Historical cost Accumulated amortization Net amount Historical cost Accumulated amortization Net amount
Goodwill 871 (253) 618 1,741 (1,123) 618
Softwares 132 (61) 71 126 (56) 70
Commercial rights 339 (20) 319 327 (17) 310
Tradename 39 - 39 39 - 39
Total intangible 1,381 (334) 1,047 2,233 (1,196) 1,037
13.1 Impairment test of intangible assets with an indefinite useful life, including goodwill
The impairment test of intangible assets uses the same practices described in note 16 as part of individual and consolidated financial statements as of December 31, 2020.
On December 31, 2020, the Company revised the plan used to assess impairment for Cash Generating Units (CGUs) and there is no significant deviation which could indicates losses or the need of a new evaluation for the period ended June 30, 2021. See the considerations related to the COVID-19 pandemic effects in note 1.3.
14 Trade payable, net
Note 6/30/2021 12/31/2020
Product suppliers 4,726 5,450
Service providers 71 85
Service providers - related parties 10.1 18 11
Bonuses from suppliers 14.1 (310) (488)
Total 4,505 5,058
14.1 Commercial agreements
Such agreements include discounts obtained from suppliers. Those amounts are defined according to contracts agreements and include discounts based on purchase volume, joint marketing actions, logistics refund and others. The receipt occurs through the offset of outstanding invoices regarding supply agreement, therefore, the financial liquidity occur by the net amount.
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15 Financial instruments
The main financial instruments and their amounts recorded in the interim financial information, by category, are as follows:
Note 6/30/2021 12/31/2020
Financial assets
Amortized cost
Related parties - assets 10 179 178
Trade receivables and other accounts receivable 113 117
Fair value through income
Cash and cash equivalentes 6 4,511 3,532
Financial instruments - fair value hedge - long position 15.7 2 68
Fair value through other comprehensive income
Trade receivables with credit card companies and sales tickets 151 99
Financial liabilities
Other financial liabilities - amortized cost
Related parties - liabilities 10 (104) (41)
Trade payables 14 (4,505) (5,058)
Financing through acquisition of assets (51) (34)
Borrowings and financing 15.7 (893) (897)
Debenture 15.7 (8,291) (6,599)
Lease liabilities 17 (3,091) (2,776)
Fair value through income
Borrowings and financing, including derivatives 15.7 (318) (335)
Financial instruments - fair value hedge - short position 15.7 (33) -
Net exposure (12,330) (11,746)
The fair value of other financial instruments described on the table above approximates to the carrying amount based on the existing payments terms. Financial instruments measured at amortized cost, whose fair values differ from book value are disclosed in note 15.4.
15.1 Considerations on risk factors that may affect the Company's business
15.1.1 Credit Risk
• Cash and cash equivalents
In order to minimize credit risks, the Company adopts investments policies at financial institutions approved by the Company's Financial Committee, also taking into consideration monetary limits and financial institution evaluations, which are regularly updated.
• Trade receivables
Credit risk related to trade receivables is minimized by the fact that a large portion of sales are paid with credit cards, and the Company sells these receivables to banks and credit card companies, aiming to strengthen working capital. The sales of receivables result in derecognition of the accounts receivable due to the transfer of the credit risk, benefits and control of such assets. Additionally, regarding the trade receivables collected in installments, the Company monitor the risk through the credit concession and by periodic analysis of the provision for losses.
The Company also has counterparty risk related to derivative instruments, which is mitigated by the Company carrying out transactions, according to policies approved by governance boards.
There are no amounts receivable or sales that are individually, higher than 5% of trade receivables or sales, respectively.
15.1.2 Interest rate risk
The Company obtains borrowings and financing with major financial institutions for cash needs for investments. As a result, the Company is mainly exposed to relevant interest rates fluctuation risk, especially in view of derivatives liabilities (foreign currency exposure hedge) and CDI Indexed debts. The balance of cash and cash equivalents, indexed to CDI, partially offsets the interest rate risk.
15.1.3 Foreign currency exchange rate risk
The Company is exposed to exchange rate fluctuations, which may increase outstanding balances of foreign currency-denominated borrowings. The Company uses derivatives, such as swaps, aiming to mitigate the foreign currency exchange rate risk, converting the cost of debt into domestic currency and interest rates.
15.1.4 Capital risk management
The main objective of the Company's capital management is to ensure that the Company maintains its credit rating and a well-balanced equity ratio, in order to support businesses and maximize shareholder value. The Company manages the capital structure and adjusts taking into account changes in the economic conditions.
The capital structure is thus demonstrated:
6/30/2021 12/31/2020
Restated
Borrowings, financing and debentures (9,535) (7,831)
(-) Cash and cash equivalents 4,511 3,532
(-) Derivative financial instruments 2 68
Net debt (5,022) (4,231)
Shareholders' equity 1,917 1,347
% Net debt over Shareholders' equity 262% 314%
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15.1.5 Liquidity risk management
The Company manages liquidity risk through the daily analysis of cash flows and maturities of financial assets and liabilities.
The table below summarizes the aging profile of the Company's financial liabilities as of June 30, 2021.
Less than 1 year 1 to 5 years More than 5 years Total
Borrowings and financing 1,251 429 24 1,704
Debenture 2,287 6,035 1,760 10,082
Derivative financial instruments (4) (9) (2) (15)
Lease liabilities 497 2,163 3,175 5,835
Trade payable 4,505 - - 4,505
Total 8,536 8,618 4,957 22,111
The table above was prepared considering the undiscounted cash flows of financial liabilities based on the earliest date the Company may be required to make a payment or be eligible to receive a payment. To the extent that interest rates are floating, the non-discounted amount is obtained based on interest rate curves for the period ended June 30, 2020. Therefore, certain balances are not consistent with the balances reported in the balance sheet.
15.2 Derivative financial instruments
Reference value Fair value
6/30/2021 12/31/2020 6/30/2021 12/31/2020
Swap with hedge accounting
Hedge purpose (debt) 388 309 318 335
Long Position
Fixed rate 106 106 67 72
USD + Fixed 282 203 251 263
Short Position (388) (309) (349) (267)
Net hedge position - - (31) 68
Realized and unrealized gains and losses on these contracts during the six-month period ended June 30, 2021, are recorded as financial income or expenses and the balance payable at fair value is R$31 (balance receivable of R$68 as of December 31, 2020). Assets are recorded as 'financial instruments' and liabilities as 'borrowings and financing'.
The effects of the fair value hedge recorded in the statement of operations for the six-month periods ended June 30, 2021, resulted in a loss of R$23, recorded under debt of cost, note 24 (gain of R$104 as of June 30, 2020).
15.2.1 Fair values of derivative financial instruments
Fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm's length transaction.
Fair values are calculated using projected the future cash flow, using the CDI curves and discounting to present value, using CDI market rates for swap both disclosed by the B3.
The fair value of exchange coupon swaps versus CDI rate was determined based on market exchange rates effective at the date of the financial statements and projected based on the currency coupon curves.
In order to calculate the coupon of foreign currency indexed-positions, the straight-line convention - 360 consecutive days was adopted and to calculate the coupon of CDI indexed-positions, the exponential convention - 252 business days was adopted.
15.3 Sensitivity analysis of financial instruments
According to Management's assessment, the most probable scenario is what the market has been estimating through market curves (currency and interest rates) of the B3, on the maturity dates of each transaction.
Therefore, in the probable scenario (I) there is no impact on the fair value of financial instruments. For scenarios (II) and (III), for the exclusive effect, a deterioration from 25% to 50% was taken into account, respectively, on risk variables, up to one year of financial instruments.
For a probable scenario, the weighted exchange rate was R$5.28 on the due date, and the interest rate weighted was 6.58% per year.
In the case of derivative financial instruments (aiming at hedging the financial debt), changes in scenarios are accompanied by respective hedges, indicating that the effects are not significant.
The Company disclosed the net exposure of derivative financial instruments, each of the scenarios mentioned above in the sensitivity analysis as follows:
Market projections
Transactions Risk
(CDI Increase)
As of 6/30/2021 Scenario (I) Scenario (II) Scenario (III)
Borrowings and financing CDI + 2% per year (1,155) (80) (100) (120)
Fixed rate swap contract (Passive Tip) CDI + 0,03% per year (64) (49) (52) (55)
Exchange swap contract (Passive Tip) CDI + 1,35% per year (284) (22) (28) (34)
Debentures CDI + 1,93% per year (8,282) (541) (677) (812)
Total net effect (loss) (9,785) (692) (857) (1,021)
Cash equivalents 98.90% 4,511 248 310 372
Net exposure loss: (5,274) (444) (547) (649)
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15.4 Fair values measurement
The Company discloses the fair value of financial instruments measured at fair value and of financial instruments measured at amortized cost, the fair value of which differ from the carrying amount, in accordance with CPC46 / IFRS13, which refer to the requirements of measurement and disclosure. The fair value hierarchy levels are defined below:
Level 1: fair value measurement at the balance date considering quoted (unadjusted) market prices in active markets for identical assets or liabilities which the Company can access at the measure date.
Level 2: Valuation techniques for which the lowest level inputs that is significant to the fair value measurement is directly or indirectly observable, except for quoted prices included on Level 1.
Level 3: Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.
The fair values of trade receivables and trade payables approximate their carrying amounts.
The table below sets forth the fair value hierarchy of financial assets and liabilities measured at fair value of financial instruments measured at amortized cost, for which the fair value has been disclosed in the interim financial information:
Carrying amount Fair value
6/30/2021 12/31/2020 6/30/2021 12/31/2020 Level
Trade receivables with credit cards companies and sales vouchers 151 99 151 99 2
Swaps of annual rates between currencies (33) 57 (33) 57 2
Interest rate swaps 2 11 2 11 2
Borrowings and financing (fair value) (318) (335) (351) (335) 2
Borrowings and financing (amortized cost) (9,184) (7,496) (8,397) (6,529) 2
(9,382) (7,664) (8,628) (6,697)
There were no changes between fair value measurement hierarchy levels during the period ended June 30, 2021.
Interest rate swaps, cross-currency and borrowings and financing are classified in level 2 since the fair value of such financial instruments was determined based on readily observable inputs, such as expected interest rate and current and future foreign exchange rate.
15.5 Operations with derivative financial instruments
The Company has derivative contracts with the following financial institutions: Itaú BBA ans Scotiabank
The outstanding derivative financial instruments are presented in the table below:
Description Reference value Maturity 6/30/2021 12/31/2020
Debt
USD - BRL US$ 50 2021 - 57
USD - BRL USD 50 2023 (33) -
Interest rate swaps registered at CETIP
Pre-fixed rate x CDI R$ 54 2027 4 5
Pre-fixed rate x CDI R$ 52 2027 (2) 6
Derivatives - Fair value hedge - Brazil (31) 68
15.6 Borrowings and financing
15.7 Debt composition
Weighted average 6/30/2021 12/31/2020
Current
Debenture and promissory notes
Debenture and promissory notes CDI + 1,73% per year 1,954 1,864
Borrowing costs (23) (24)
Total debenture and promissory notes 1,931 1,840
Borrowings and financing
In national currency
Working capital TR + 9,80% 10 12
Working capital CDI + 2% per year 253 9
Borrowing costs (5) (5)
Total national currency 258 16
In foreign currency
Working capital CDI + 1,25% aper year 2 264
Total in foreign currency 2 264
Total of borrowings and financing 260 280
Derivative financial instruments
Swap contracts CDI + 1,35% per year - (57)
Total derivative financial instruments - (57)
Total current 2,191 2,063
30
Weighted average 6/30/2021 12/31/2020
Non-current
Debenture and promissory notes
Debenture and promissory notes CDI + 1,99% per year 6,374 4,780
Borrowing costs (14) (21)
Total debenture and promissory notes 6,360 4,759
Borrowings and financing
In national currency
Working capital TR + 9,80% 57 60
Working capital CDI + 2% per year 650 901
Borrowing costs (6) (9)
Total of national currrency 701 952
In foreign currency
Working capital 250 -
Total of foreign currency 250 -
Total national currency 951 952
Derivative financial instruments
Swap contracts CDI + 0,03% per year (2) (11)
Swap contracts CDI + 1,35% per year 33 -
Total derivative financial instruments 31 (11)
Total of non-current 7,342 5,700
Total 9,533 7,763
Current asset - 57
Non-current asset 2 11
Current liabilities 2,191 2,120
Non-current liabilities 7,344 5,711
15.8 Rollforward of borrowings and financing
Amount
Balance on Decemeber 31, 2019 8,467
Funding 599
Interest provision 222
Swap contracts (72)
Mark-to-market (2)
Exchange rate and monetary variation 71
Borrowing costs 21
Interest amortization (257)
Principal amortization (1,223)
Swap amortization 2
Balance on June 30, 2020 7,828
Amount
Balance on Decemeber 31, 2020 7,763
Funding 1,874
Interest provision 195
Swap contracts 89
Mark-to-market 7
Exchange rate and monetary variation (24)
Debt modification effect IFRS 9 (23)
Borrowing costs 18
Interest amortization (96)
Principal amortization (273)
Swap amortization 3
Balance on June 30, 2021 9,533
15.9 Schedule of non-current maturities
Maturity Amount
From 1 to 2 years 3,091
From 2 to 3 years 3,104
From 3 to 4 years 569
From 4 to 5 years 352
After 5 years 246
Total 7,362
Borrowing cost (20)
Total 7,342
-
31
15.10 Debenture and promissory notes
Date
Type Issue amount Outstanding debentures (units) Issue Maturity Annual financial charges Unit price (in Reais) 6/30/2021 12/31/2020
First Issue of Promissory Notes - 2nd series Non-preemptive right 50 1 4/7/2019 5/7/2021 CDI + 0,72% per year 52,998,286 54 53
First Issue of Promissory Notes - 3rd series Non-preemptive right 50 1 4/7/2019 4/7/2022 CDI + 0,72% per year 52,998,286 54 53
First Issue of Promissory Notes - 4th series Non-preemptive right 250 5 4/7/2019 4/7/2023 CDI + 0,72% per year 52,998,286 271 267
First Issue of Promissory Notes - 5th series Non-preemptive right 200 4 4/7/2019 4/7/2024 CDI + 0,72% per year 52,998,286 217 214
First Issue of Promissory Notes - 6th series Non-preemptive right 200 4 4/7/2019 4/7/2025 CDI + 0,72% per year 52,998,286 217 213
First Issue of Debentures - 2nd series Non-preemptive right 2,000 200,000 4/9/2019 08/20/2021 CDI + 2,34% per year 876 1,779 1,762
First Issue of Debentures - 3rd series Non-preemptive right 2,000 200,000 4/9/2019 08/20/2022 CDI + 2,65% per year 1,004 2,055 2,033
First Issue of Debentures - 4th series Non-preemptive right 2,000 200,000 4/9/2019 08/20/2023 CDI + 3% per year 1,005 2,076 2,049
Second Issue of Debentures - 1st series Non-preemptive right 940,000 940,000 1/6/2021 05/22/2026 CDI + 1,70% per year 1,005 943 -
Second Issue of Debentures - 2nd series Non-preemptive right 600,000 600,000 1/6/2021 05/22/2028 CDI + 1,95% per year 1,005 662 -
Borrowing cost (37) (45)
8,291 6,599
Current 1,931 1,840
Non-current 6,360 4,759
The Company issues debentures to strengthen its working capital, maintain its cash strategy, lengthen its debt profile and make investments. The debentures issued are unsecured, without renegotiation clauses and not convertible into shares.
15.11 Guarantees
The company signed promissory notes for certain borrowings agreements.
15.12 Swap contracts
The Company uses swap operations for 100% of its borrowings denominated in US dollars and fixed interest rates, exchanging these liabilities for Real linked to CDI (floating) interest rates. The annual weighted average rate on June 30, 2021 was 2.64% of CDI (2.76% on December 31, 2020).
15.13 Financial convenants
In connection with the debentures and promissory notes issued and part of loan operations denominated in foreign currencies, the Company is required to maintain certain financial ratios. These ratios are calculated quarterly based on the Company's consolidated financial statements drawn up in accordance with the accounting practices adopted in Brazil, as follows: (i) consolidated net debt / equity less than or equal to 5.0 not exceeding equity; and (ii) consolidated net debt/EBITDA ratio should be lower than or equal to 3.25.
Also, the instrument of the 1st issuance of the Company's debentures provides for a restrictive covenant that determines limits for distribution of dividends above the legal minimum and higher indebtedness for the acquisition of other entities.
On June 30, 2021, the Company was compliant with those ratios. In addition, the Company has been complying with all restrictive covenants, and, over the last three years ended on December 31, 2020, no event occurred that would require the Company to accelerate the payment of its debts.
16 Provision for legal proceedings
The provision for legal proceedings is estimated by the Company and it is corroborated by its legal advisors, and such provision is recorded in sufficient amount to settle losses assessed and classified as probable.
Tax claims Social security and labor Civil Total
Balance as of Decemeber 31, 2020 169 64 49 282
Additions 48 24 3 75
Reversal (82) (10) (7) (99)
Payments - (9) (10) (19)
Monetary correction 4 3 5 12
Balance as of June 30, 2021 139 72 40 251
Tax claims Social security and labor Civil Total
Balance as of Decemeber 31, 2019 143 61 36 240
Additions - 5 3 8
Reversal (1) (4) (6) (11)
Payments - (1) (1) (2)
Monetary correction 1 4 1 6
Balance as of June 30, 2020 143 65 33 241
16.1 Tax claims
Tax claims are subject by law to the monthly monetary correction, which refers to an adjustment to the provision based on indexing rates adopted by each tax jurisdiction. Both interest rates charges and fines, where applicable, were calculated and provisioned with respect to unpaid amounts.
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The main tax claims provisioned are as follows:
The Company has other tax claims, which according to its legal counsels' analysis, were provisioned, namely: (i) discussions on the non-application of Prevention Accident Factor (FAP); (ii) discussions with State tax authorities on ICMS tax rate calculated in electricity bills; (iii) staple basket; (iv) IPI on resale of imported goods and (v) other matters.
The provisioned amount on June 30, 2021, for these matters is R$139 (R$169 on December 31, 2020).
16.2 Social security and labor
The Company is a party to various labor proceedings, especially due to dismissals in the regular course of business. On June 30, 2021, the Company recorded a provision of R$72 (R$64 on December 31, 2020), referring to a potential risk of loss relating to labor claims. Management, with the assistance of its legal counsels, assesses these claims and recording provisions for losses when reasonably estimated, considering previous experiences in relation to amounts claimed.
16.3 Civel
The Company is party to civil proceedings (indemnifications, collections, among others) at in different procedural phases and various central courts. Management records provisions in amounts considered sufficient to cover unfavorable court decisions when its internal and external legal counsel assess the losses to be probable.
Among these proceedings, we highlight the following:
The Company is party to various lawsuits requesting the renewal of rental agreements and the review of the current rent paid. The Company records a provision for the difference between the amount originally paid by stores and the amounts claimed by the adverse party in the lawsuit when internal and external legal counsels consider the probability of changing the lease amount paid by the entity. On June 30, 2021, the provision for these lawsuits amounted to R$9 (R$23 on December 31, 2020), for which there are no judicial deposits for legal proceedings.
The Company is party to certain lawsuits relating to the fines applied by inspection bodies of direct and indirect administration of the federal government, states, and municipalities, including consumer defense bodies (PROCONs, INMETRO, and local governments). The Company, assisted by its legal counsel, assesses these claims recording provisions for probable cash disbursements, according to the probability of loss. On June 30, 2021, the provision for these lawsuits is R$5 (R$5 on December 31, 2020).
The Company's total civil and regulatory claims on June 30, 2021, is R$40 (R$49 on December 31, 2020).
16.4 Possible contingent liabilities
The Company is party to other litigations for which the probability of loss was deemed by its legal counsel to be possible, but not probable, therefore, not accrued, totaling an updated amount of R$2,313 on June 30, 2021 (R$2,408 on December 31, 2020). Accordingly, no provisions were recorded in connection with these proceedings, which are mainly related to:
IRPJ (corporate income tax), IRRF (withholding income tax), CSLL (social contribution on net income) - The Company received several tax assessment notices relating to tax offsetting proceedings, goodwill disallowance, disagreements regarding payments and overpayments, fines due to non-compliance with ancillary obligation, among other less relevant issues. The amount involved corresponds to R$469 on June 30, 2021 (R$466 on December 31, 2020).
COFINS, PIS (federal taxes on gross revenues) - The Company has been questioned about discrepancies in payments and overpayments; fine due to non-compliance with ancillary obligation, disallowance of COFINS and PIS credits, among other issues. These proceedings are pending judgment at the administrative and judicial levels. The amount involved in these tax assessments is R$629 as of June 30, 2021 (R$632 on December 31, 2020).
ICMS (State VAT) - The Company received tax assessment notices from State tax authorities in connection with credits from purchases from suppliers' acquisitions considered unqualified by the registry of the State Revenue Service, among others matters. These tax assessments amount to R$1,124 on June 30, 2021 (R$1,235 on December 31, 2020). These proceedings are pending final judgment at the administrative and judicial levels.
ISS (services tax), IPTU (urban property tax), Fees and other - The Company has received tax assessments relating to discrepancies in payments of IPTU, fines due to non-compliance with ancillary obligations, ISS - refund of advertising expenses and various fees, totaling R$12 on June 30, 2021 (R$13 on December 31, 2020). These proceedings are pending judgment at the administrative and judicial levels.
INSS (national institute of social security) - The Company was assessed due to the levy of payroll charges over benefits granted to its employees, among other issues, with possible losses of R$22 on June 30, 2021 (R$21 on December 31, 2020). Proceedings have been discussed in the administrative and judicial levels.
Other litigation- These proceedings refer to real estate lawsuits in which the Company claims the renewal of lease agreements and rents according to market prices. These lawsuits involve proceedings litigated in civil court, and special civil court, as well as administrative proceedings filed by inspection bodies, such as the consumer defense body (PROCONs), the National Institute of Metrology, Standardization and Industrial Quality- INMETRO, the National Agency of Sanitary Surveillance - ANVISA, among others, totaling R$43 on June 30, 2021 (R$24 on December 31, 2020).
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The Company engages external legal counsel to represent it in the tax assessments, whose fees are contingent on the final outcome of the lawsuits. Percentages may vary according to qualitative and quantitative factors of each proceeding, on June 30, 2021, the estimated amount, in case of success of all lawsuits, was approximately R$14 (R$17 on December 31, 2020).
16.5 Guarantees
The Company granted guarantees to judicial process related a civil, tax and labor nature, described below:
Lawsuits Letter of guarantees
Tax claims 456
Social security and labos 105
Civil and others 53
Total 614
The guarantees cost is aproximately 0.37% per year of the value of the lawsuits and it is registered as expense in the course of time.
16.6 Deduction of ICMS from the calculation basis of PIS and COFINS
Since the adoption of the non-cumulative regime to calculate PIS and COFINS, the Company has claimed the right to deduct ICMS taxes from the calculation basis of PIS and COFINS. On March 15, 2017, the Federal Supreme Court (STF) recognized, in terms of general repercussion, the unconstitutionality of including ICMS in the PIS and COFINS calculation basis.
In May 2021, the STF Plenary judged the Declaration Embargoes, in relation to the amount to be excluded from the PIS and COFINS calculation basis, if it should only be the ICMS paid, or if all the ICMS highlighted in the invoices, the STF issued a favorable decision to the taxpayers, concluding that all outstanding ICMS should be excluded from the PIS and COFINS calculation basis.
Since of such decision on March 15, 2017, the procedural progress has been as anticipated by our legal advisors without any change in the management's judgment. On July 16, 2021, the Company obtained a favorable decision in its individual legal proceeding, with the decision the Company will revisit the rationale adopted in the reliable measurement, in order to ensure that the calculations are in accordance with the final decision. See note 9.2.
16.7 Restricted deposits for legal proceedings
The Company is challenging the payment of certain taxes, contributions, and labor liabilities and made judicial deposits in the corresponding amounts, as well as escrow deposits related to the provision for legal proceedings.
The Company recorded amounts referring to judicial deposits in its assets as follows.
Lawsuits 6/30/2021 12/31/2020
Tax claims 65 64
Social security and labor 64 67
Civil and others 3 3
Total 132 134
17 Leases
17.1 Minimum future payments and potential right of PIS and COFINS
Leasing agreements totaled R$ 3,091 on June 30, 2021 (R$ 2,776 on December 31, 2020). The minimum future payments as leases, by leases term and with the fair value of minimum lease payments, are as follows:
6/30/2021 12/31/2020
Financial lease liabilities - minimum payments
Less than 1 year 213 172
1 to 5 years 1,009 866
More than 5 years 1,869 1,738
Present value of financial lease agreements 3,091 2,776
Future financing charges 2,744 2,478
Gross amount of financial lease agreements 5,835 5,254
PIS and COFINS embedded in the present value of lease agreements 188 169
PIS and COFINS embedded in the gross value of lease agreements 355 319
Lease liabilities interest expense is stated in note 24. The incremental interest rate of the Company on the signing date of the agreement was 10.12% in the period ended June 30, 2021 (9.72% on December 31, 2020).
If the Company had adopted the projection of inflation imbedded in the nominal incremental rate and converting to a present value as a calculation method, the average percentage of inflation to be project for year will be 3.47% approximately. The average term of the agreements analyzed is 15.5 years.
17.2 Lease obligation rollforward
Amount
As of Decemeber 31, 2019 1,885
Funding - Lease 441
Remeasurement 99
Interest provision 104
Amortization (147)
Write-off due to early termination of agreement (4)
Aquisition of partnership 8
As of June 30, 2020 2,386
Current 135
Non-current 2,251
Amount
As of Decemeber 31, 2020 2,776
Funding - Lease 222
Remeasurement 231
Interest provision 137
Amortization (201)
Write-off due to early termination of agreement (74)
As of June 30, 2021 3,091
Current 213
Non-current 2,878
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17.3 Lease expense on variable rents, low-value, and short-term assets
Parent Company Parent Company and Consolidated
6/30/2021 12/31/2020
(Expenses) revenues of the period:
Variables (1% of sales) (4) (8)
Subleases (*) 13 8
(*) It refers mainly to the revenue from rental contracts to be received from commercial galleries.
18 Deferred revenues
6/30/2021 12/31/2020
Back Lights 93 186
Checkstand 21 29
Gift card 1 2
Marketing 21 11
Others 4 -
Total 140 228
Current 139 227
Non-current 1 1
The Company received in advance amounts referring to the rental of backlight panels, supplier product exhibition modules, or check stands, rental of displays, and front-fee anticipation with credit card operators.
19 Income tax and social contribution
19.1 Reconciliation of income tax and social contribution expense
Parent Company Consolidated
6/30/2021 6/30/2020 6/30/2020
Restated
Earnings before income tax and social contribution 800 414 424
Expense of income tax and social contribution at nominal rate (272) (141) (144)
Adjustments to reflect the effective rate
Tax fines (1) - -
Share of profits 10 (3) -
Tax benefits 8 10 10
Other permanent differences - (5) (5)
Effective income tax (255) (139) (139)
Income tax and social contribution for the period
Current (265) (261) (261)
Deferred 10 122 122
Income tax and social contribution expenses (255) (139) (139)
Effective tax 31.9% 33.6% 32.8%
19.2 Breakdown of deferred income tax and social contribution
Key components of deferred income tax and social contribution in the balance sheet are the following:
6/30/2021 12/31/2020
Assets Liabilities Net Assets Liabilities Net
Deferred income tax and social contribution
Provision for legal proceedings 67 - 67 81 - 81
Exchange rate variation 1 - 1 26 - 26
Goodwil tax amortization - (318) (318) - (315) (315)
Mark-to-market adjustment - - - - (2) (2)
Property, plant and equipment and intangibles and investment properties 27 - 27 37 - 37
Unrealized gains with tax credits - (21) (21) - (60) (60)
Cash flow hedge - (17) (17) - (20) (20)
Lease net of right of use 140 - 140 131 - 131
Modification debt effects - IFRS 9 16 - 16 24 - 24
Others 33 - 33 16 - 16
Gross deferred income tax and social contribution assets (liabilities) 284 (356) (72) 315 (397) (82)
Compensation (284) 284 - (315) 315 -
Net deferred income tax and social contribution assets (liabilities), net - (72) (72) - (82) (82)
Management has assessed the future realization of deferred tax assets, considering the projections of future taxable income. This assessment was based on information from the strategic planning report previously approved by the Board of Directors of the Company.
The Company estimates the recovery of the deferred tax assets as follows:
Years Amount
Up to 1 year 56
From 1 year to 2 years 73
From 2 years to 3 years 1
More than 5 years 154
284
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19.3 Rollfoward of deferred income tax and social contribution
6/30/2021 12/31/2020
At the beginning of the period (82) (395)
Benefits in the period 10 268
Corporate reorganization - 45
At the end of the period (72) (82)
20 Shareholders' equity
20.1 Capital stock and stock rights
The Company's capital stock on June 30, 2021 is R$ 779 (R$ 761 on December 31, 2020), represented by 269 million registered common shares, (268 million on December 31, 2020), all non-par and registered shares. According to the Company's bylaws, the Company's authorized capital stock may be increased up to 400 million common shares.
On June 1, 2021 the Management Board approved a capital increase of R$18, corresponding to the issuance of 544 thousands common shares.
20.2 Distribution of dividends and interest on equity
The Extraordinary Shareholders' Meeting held on September 29, 2020 approved the interim payment of interest on equity, in the gross amount of R$ 310, over which the withholding income tax was deducted in the amount of R$ 46, corresponding to the net amount of R$ 264.
Management proposed dividends to be distributed, considering the anticipation of interest on equity to its shareholders, calculated as follows:
12/31/2020
Restetad
Net income for the year ended on December 31, 2020 1,398
% Legal reserve 5%
Legal reserve for the year 5
Base for dividends 1,393
Interest on equity payment - net 264
Minimum mandatory dividends - 25% 349
Dividends proposed payable 85
On March 26, 2021, the amount of dividends and profits company's destination related to year ended December 31, 2020 proposed by the Management were disclosed to the market. Such management's proposal was approved on April 28, 2021 (see note 28.2) and the amount of dividends will be adjusted to reflect the minimum percentage required by law.
At the general shareholders' meeting held on April 28, 2021, the shareholders voted to approve the minimum mandatory dividend in the aggregate amount of R$349, calculated in accordance with Brazilian Corporate Law and the Company's bylaws, with respect to the fiscal year ended December 31, 2020. This amount corresponds to R$1.29846211682919 per common share. Of the total amount, R$264 was paid on November 27, 2020 as interest on shareholders' equity, and R$85 will be payable as follows: (i) on June 7, 2021, to holders of common shares based on the shareholding composition of April 28, 2021; and (ii) on June 14, 2021, to holders of ADSs as of April 30, 2021. The residual amount payable corresponds to R$0.31654126223623 per common share.
20.3 Legal reserve
Legal reserve: this is recorded by appropriating 5% of the net income of each fiscal year, observing the 20% limit of capital. On June 30, 2021, the amount is R$152 (R$152 on December 31, 2020).
The destination differs from the financial statements, since the destination of 5% of net income to the legal reserve would result on the exceeding of 20% of capital stock.
21 Net operating revenue
Parent Company Parent Company and Consolidated
6/30/2021 6/30/2020
Gross operating revenue Restated
Goods 21,246 17,615
Services rendered and others 52 44
21,298 17,659
(-) Revenue deductions
Returns and sales cancellation (36) (30)
Taxes (1,765) (1,549)
(1,801) (1,579)
Net operating revenue 19,497 16,080
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22 Expenses by nature
Parent Company Parent Company and Consolidated
6/30/2021 6/30/2020
Restated
Inventory costs (16,001) (13,300)
Personnel expenses (1,189) (972)
Outsourced services (116) (113)
Selling expenses (283) (213)
Functional expenses (328) (283)
Other expenses (200) (109)
(18,117) (14,990)
Cost of sales (16,268) (13,525)
Selling expenses (1,560) (1,267)
General and administrative expenses (289) (198)
(18,117) (14,990)
23 Other operating expenses, net
Parent Company Parent Company and Consolidated
6/30/2021 6/30/2020
Restated
Result with property and equipment 6 (23)
Reversal (provision) for legal proceedings 5 (2)
Reestructuring expenses (42) (51)
Covid-19 spending on prevention - (66)
Total (31) (142)
24 Net financial result
Parent Company Parent Company and Consolidated
6/30/2021 6/30/2020
Financial expenses Restated
Cost of debt (190) (235)
Cost and discount of receivables (15) (22)
Monetary correction (liabilities) (9) (7)
Interest on leasing liabilities (133) (100)
Other financial expenses (1) (51)
Total financial expenses (348) (415)
Financial revenues
Cash and cash equivalents profitability 25 18
Monetary correction (assets) 41 108
Other financial revenues 3 3
Total financial revenues 69 129
Total (279) (286)
25 Earnings per share
The Company calculates earnings per share by dividing the net income, referring to each class of share, by total outstanding common shares during the period.
At the extraordinary general shareholders´ meeting held on October 5, 2020, Company' shareholders voted to approve the reverse stock split of 3,269,992,034 (three billion, two hundred and sixty-nine million, nine hundred and ninety-two thousand and thirty-four) common shares, with no par value issued by Company, in the proportion of 12.1854776946393 to 1 (one) (the 'Reverse Stock Split'). Immediately following the Reverse Stock Split, capital stock of Company was represented by 268,351,567 (two hundred and sixty-eight million, three hundred and fifty-one thousand, five hundred and sixty-seven) common shares, with no par value.
The table below sets forth the net income available to holders of common shares and the weighted average number of common shares outstanding used to calculate basic and diluted earnings per share in each period:
6/30/2021 6/30/2020
Basic and diluted number: Restated
Allocated basic earnings and not distributed from continued operation 545 275
Net income allocated available to common shareholders 545 275
Basic and diluted denominator (millions of shares)
Weighted average of the number of shares 268 258
Basic and diluted earnings per million shares (R$) from continued operation 2.02854 1.06589
26 Non-cash transactions
The Company had transactions that did not represent a cash disbursement, and therefore, such transactions were note presented in the cash flow statements, as described below:
• Purchase of property, plant and equipment not yet paid, in note 12.4
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27 Discontinued operation
At the Extraordinary Shareholders' meeting held on December 31, 2020, shareholders of the Company and GPA approved the corporate restructuring proposal which consisted of the full spin-off of Éxito to GPA. Éxito is a Colombian company operating in Colombia under the banners of Éxito, Carulla, Super Inter, Surtimax, and Surtimayorista supermarkets and hypermarkets, in Argentina, under the Libertad banner, and in Uruguay under Disco and Devoto banners. Also, Éxito operates shopping malls in Colombia under the banner Viva.
On June 30, 2020, Éxito's results were classified as a discontinued operation as follows:
6/30/2020
Statement of operations 10,331
Cost of sales (7,803)
Gross profit 2,528
Operating expenses
Selling expenses (1,390)
General and administrative expenses (441)
Depreciation and amortization (346)
Share of loss of associates (41)
Other operating expenses, net (102)
(2,320)
Operating profit before net financial result 208
Net financial result (158)
Income before income taxes 50
Income tax and social contribution 14
Net income for the period 64
Comprehensive income results as presented below:
6/30/2020
Net income for the period 64
Items that may be subsequently reclassified to statement of operations
Exchange rate variation of foreign Investments (4)
Other comprehensive income 1
Comprehensive income for the period 61
Net cash flow incurred are:
6/30/2020
Operating activities (1,278)
Investment activities (159)
Financing activities 11
Exchange rate variation on cash and cash equivalents 455
Net cash used (971)
Earnings per share:
6/30/2020
Basic and diluted 0.1429
Operation segment:
6/30/2020
Net sales 10,331
Gross profit 2,528
Depreciation and amortization (346)
Share of loss of associates (41)
Operating profit 208
Net financial result (158)
Income before income taxes 50
Income taxes and social contribution 14
Net income for the period 64
12/31/2020
Current assets 8,014
Non-current assets 18,930
Current liabilities 9,729
Non-current liabilities 3,620
Equity capital/ minority 13,595
The Éxito Group's operations were treated as a separate segment on June 30, 2020 and as result of the discontinuity of its operation in the financial statements as of December 31, 2020, the Company operates now as a single segment, as described in note 1.2.
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28 Subsequent events
28.1 Split of common shares
On July 8, 2021, the Company issued the extraordinary general meeting announcement to be held on August 11, 2021, in order to approval of the proposal of split of common shares issued by the Company, whereby each share issued by the the Company will be split into 5 (five) shares of the same type, without changing the amount of the Company's current capital stock.
28.2 Commitment of purchase and sale of real state
On July 19, 2021, the Company entered into the 'Private Instrument of Commitment of Real Estate Investment, Commitment of Purchase and Sale of Real Estate and Incorporation of in Rem Right of Surface, Under Suspensive Conditions and Other Covenants' with an investment fund administered by BRL Trust Distribuidora de Títulos e Valores Mobiliários SA and managed by TRX Gestora de Recursos Ltda. The purpose of the Instrument is the sale, development and lease of 5 properties of the Company located in the States of São Paulo, Rio de Janeiro and Rondônia.
The transaction covers the sale of 1 property already built and other 4 lands, over which shall be carried out construction and real estate development project. The total sale amount of the Properties to be received by the Company is R$ 364, the sale amount and cost amount of the construction of the properties will be base for defining the final amount of the properties' monthly rents. On June 30, 2021, the assets transferred to 'assets held for sale' was in amount of R$147.
The performance of the acquisition of the properties is conditioned to the fulfilment of certain suspensive conditions provided in the Instrument until October 14, 2021.
28.3 Approval of obtention of financial resources
On July 27, 2021, were approved the acquisition of real estate receivables certificates (CRI), in the amount of R$1,500 and of promissory notes, in the total amount of R$2,500. Such transactions will have an average maturity of more than 4 years and have due dates from 2022 and 2023.
The conclusion of the public offering is subject to full compliance with the conditions precedent set out in the documentation relating to the respective funding.
28.4 Capital stock increase
On July 27, 2021, the Company approved, in accordance with Article 6 of the Bylaws and the limit of authorized capital, the increase of capital stock in the amount of R$ 8 by menos of the issuance of 404,186 (four hundred four thousand, one hundred eighty-six) common shares. With this, the Company's capital stock increased from R$ 779 to R$ 787, fully subscribed and paid for, divided into 269,299,859 common shares with no par value.
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