Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2019shares | |
Document And Entity Information | |
Entity Registrant Name | COMPANHIA DE SANEAMENTO BASICO DO ESTADO DE SAO PAULO-SABESP |
Entity Central Index Key | 0001170858 |
Document Type | 20-F/A |
Document Period End Date | Dec. 31, 2019 |
Amendment Flag | true |
Amendment Description | This amendment is being filed to include XBRL in the submission. |
Current Fiscal Year End Date | --12-31 |
Is Entity a Well-known Seasoned Issuer? | Yes |
Is Entity a Voluntary Filer? | No |
Is Entity's Reporting Status Current? | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Emerging Growth Company | false |
Entity Shell Company | false |
Entity Interactive Data Current | Yes |
Entity Incorporation State Country Code | D5 |
Entity Common Stock, Shares Outstanding | 683,509,869 |
Document Fiscal Period Focus | FY |
Document Fiscal Year Focus | 2019 |
Document Annual Report | true |
Document Transition Report | false |
Document Shell Company Report | false |
Statements of Financial Positio
Statements of Financial Position - BRL (R$) R$ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | |
Current assets | |||
Cash and cash equivalents | R$ 2253210 | R$ 3029191 | |
Trade receivables | 2,137,752 | 1,843,333 | |
Accounts receivable from related parties | 192,906 | 174,148 | |
Inventories | 70,454 | 65,596 | |
Restricted cash | 26,018 | 31,900 | |
Recoverable taxes | 141,266 | 380,703 | |
Other receivables | 74,532 | 77,371 | |
Total current assets | 4,896,138 | 5,602,242 | |
Noncurrent assets | |||
Trade receivables | 215,275 | 209,083 | |
Accounts receivable from related parties | 657,990 | 669,102 | |
Escrow deposits | 177,982 | 152,018 | |
Water National Agency - ANA | 32,466 | 49,136 | |
Other receivables | 119,646 | 103,310 | |
Investments | 53,187 | 44,587 | |
Investment properties | 47,562 | 47,620 | |
Contract assets | 7,617,714 | 7,407,948 | |
Intangible assets | 32,325,447 | [1] | 29,012,460 |
Property, plant and equipment | 314,393 | 267,612 | |
Total noncurrent assets | 41,561,662 | 37,962,876 | |
Total assets | 46,457,800 | 43,565,118 | |
Current liabilities | |||
Trade payables and contractors | 369,631 | 465,993 | |
Borrowings and financing | 2,859,843 | 2,103,612 | |
Accrued payroll and related taxes | 594,279 | 564,830 | |
Taxes and contributions | 250,318 | 200,563 | |
Interest on capital | 800,352 | 673,765 | |
Provisions | 550,247 | 458,387 | |
Services payable | 474,078 | 454,022 | |
Public-Private Partnership - PPP | 110,291 | 137,827 | |
Program Contract Commitments | 273,932 | 230,695 | |
Other liabilities | 170,453 | 108,938 | |
Total current liabilities | 6,453,424 | 5,398,632 | |
Noncurrent liabilities | |||
Borrowings and financing | 10,384,866 | 11,049,184 | |
Deferred income tax and social contribution | 433,996 | 261,242 | |
Deferred Cofins and PASEP | 143,693 | 140,830 | |
Provisions | 485,561 | 434,475 | |
Pension obligations | 3,360,932 | 2,970,009 | |
Public-Private Partnership - PPP | 3,183,689 | 3,275,297 | |
Program Contract Commitments | 103,321 | 142,314 | |
Other liabilities | 272,535 | 341,447 | |
Total noncurrent liabilities | 18,368,593 | 18,614,798 | |
Total liabilities | 24,822,017 | 24,013,430 | |
Equity | |||
Capital stock | 15,000,000 | 15,000,000 | |
Earnings reserves | 7,547,954 | 5,100,783 | |
Other comprehensive loss | (912,171) | (549,095) | |
Total equity | 21,635,783 | 19,551,688 | |
Total equity and liabilities | R$ 46457800 | R$ 43565118 | |
[1] | As of December 31, 2019, intangible assets includes leases recognized before December 31, 2018 in accordance with IAS 17 amounting to R$ 292,824 - (R$ 315,717 as of December 31, 2018 - R$ R$ 98,077 recognized as concession agreements - equity value and R$ 217,640 recognized as program contracts). |
Income Statement
Income Statement - BRL (R$) R$ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Profit or loss [abstract] | |||
Net operating income | R$ 17983654 | R$ 16085094 | R$ 14608233 |
Cost of services | (10,137,637) | (9,086,456) | (8,778,963) |
Gross profit | 7,846,017 | 6,998,638 | 5,829,270 |
Selling expenses | (803,404) | (693,480) | (686,012) |
Allowance for doubtful accounts | (128,099) | (166,727) | (82,681) |
Administrative expenses | (1,187,844) | (996,877) | (1,098,990) |
Other operating income (expenses), net | (18,748) | 28,591 | (5,679) |
Equity in results of investments in affiliaties | 3,701 | 6,510 | 5,760 |
Profit from operations before finance income (expenses) and income tax and social contribution | 5,711,623 | 5,176,655 | 3,961,668 |
Financial expenses | (1,173,425) | (807,967) | (688,280) |
Financial revenues | 372,842 | 446,302 | 326,244 |
Exchange result, net | (233,098) | (902,671) | (96,018) |
Financial result, net | (1,033,681) | (1,264,336) | (458,054) |
Profit before income tax and social contribution | 4,677,942 | 3,912,319 | 3,503,614 |
Income tax and social contribution | |||
Current | (1,155,463) | (852,655) | (882,787) |
Deferred | (154,962) | (224,596) | (101,517) |
Income tax and social contribution, total | (1,310,425) | (1,077,251) | (984,304) |
Profit for the year | R$ 3367517 | R$ 2835068 | R$ 2519310 |
Earnings per share - basic and diluted (in reais) | R$ 4.93 | R$ 4.15 | R$ 3.69 |
Statements of Comprehensive Inc
Statements of Comprehensive Income - BRL (R$) R$ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Profit or loss [abstract] | |||
Profit for the year | R$ 3367517 | R$ 2835068 | R$ 2519310 |
Other comprehensive income (loss) | (363,076) | (10,994) | 287,547 |
Items which will not be subsequently reclassified to the income statement: | |||
Actuarial gains and (losses) on defined benefit plans, net of income tax | (363,059) | (10,994) | 287,547 |
Other | (17) | 0 | 0 |
Total comprehensive income for the year | R$ 3004441 | R$ 2824074 | R$ 2806857 |
Statements of Changes in Equity
Statements of Changes in Equity - BRL (R$) R$ in Thousands | Capital stock | Legal reserve | Investment reserve | Additional dividend proposed | Retained earnings | Other comprehensive loss | Total |
Beginning balance at Dec. 31, 2016 | R$ 10000000 | R$ 932310 | R$ 5249830 | R$ 62719 | R$ 0 | R$ 825648 | R$ 15419211 |
Net income for the year | 2,519,310 | 2,519,310 | |||||
Actuarial gains (losses) | 287,547 | 287,547 | |||||
Total comprehensive income for the year | 2,519,310 | 287,547 | 2,806,857 | ||||
Legal reserve | 125,965 | (125,965) | 0 | ||||
Interest on capital (R$0.87539 per share) | (598,336) | (598,336) | |||||
2016 additional proposed dividends, approved (R$0.09176 per share) | (62,719) | (62,719) | |||||
Additional proposed dividends | 105,543 | (105,543) | 0 | ||||
Withholding income tax on interest on capital attributable as minimum mandatory dividends | (52,004) | (52,004) | |||||
Transfer to investments reserve | 1,689,466 | (1,689,466) | 0 | ||||
Ending balance at Dec. 31, 2017 | 10,000,000 | 1,058,275 | 6,939,296 | 53,539 | 0 | (538,101) | 17,513,009 |
Net income for the year | 2,835,068 | 2,835,068 | |||||
Actuarial gains (losses) | (10,994) | (10,994) | |||||
Total comprehensive income for the year | 2,835,068 | (10,994) | 2,824,074 | ||||
Legal reserve | 141,755 | (141,755) | 0 | ||||
Investments reserve capitalized | 5,000,000 | (5,000,000) | 0 | ||||
Interest on capital (R$0.9851 per share) | (673,328) | (673,328) | |||||
2017 additional proposed dividends, approved (R$0.07833 per share) | (53,539) | (53,539) | |||||
Additional proposed dividends | 118,859 | (118,859) | 0 | ||||
Withholding income tax on interest on capital attributable as minimum mandatory dividends | (58,528) | (58,528) | |||||
Transfer to investments reserve | 1,901,126 | (1,901,126) | 0 | ||||
Ending balance at Dec. 31, 2018 | 15,000,000 | 1,200,030 | 3,840,422 | 60,331 | 0 | (549,095) | 19,551,688 |
Net income for the year | 3,367,517 | 0 | 3,367,517 | ||||
Actuarial gains (losses) | (363,076) | (363,076) | |||||
Total comprehensive income for the year | 3,367,517 | (363,076) | 3,004,441 | ||||
Legal reserve | 168,376 | (168,376) | 0 | ||||
Interest on shareholder's equity (R$1.17012 per share) | (799,785) | (799,785) | |||||
2018 additional proposed dividends, approved (R$0.08827 per share) | (60,331) | (60,331) | |||||
Additional proposed dividends | 141,203 | (141,203) | 0 | ||||
Withholding income tax on interest on capital attributable as minimum mandatory dividends | (60,230) | (60,230) | |||||
Transfer to investments reserve | 2,258,153 | (2,258,153) | 0 | ||||
Ending balance at Dec. 31, 2019 | R$ 15000000 | R$ 1368406 | R$ 6098575 | R$ 80973 | R$ 0 | R$ 912171 | R$ 21635783 |
Statements of Cash Flows
Statements of Cash Flows - BRL (R$) R$ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Cash flow from operating activities | |||
Profit before income tax and social contribution | R$ 4677942 | R$ 3912319 | R$ 3503614 |
Adjustments for: | |||
Depreciation and amortization | 1,780,094 | 1,392,541 | 1,301,897 |
Residual value of property, plant and equipment, intangible assets and investment properties written-off | 45,434 | 24,974 | 24,935 |
Bad debt expense | 128,099 | 165,433 | 82,681 |
Agreement signed with the municipality of Guarulhos | 0 | (928,014) | 0 |
Agreement signed with the municipality of Santo André | (1,336,908) | 0 | 0 |
Provisions and inflation adjustment | 384,620 | 111,940 | 185,080 |
Interest calculated on borrowings and financing payable | 568,679 | 563,902 | 426,781 |
Inflation adjustment and exchange gains (losses) on borrowings and financing | 280,526 | 982,072 | 159,087 |
Interest and inflation adjustment on liabilities | 46,038 | 30,103 | 25,751 |
Interest and inflation adjustment on assets | (39,547) | (64,046) | (31,619) |
Finance charges from customers | (364,291) | (289,321) | (193,683) |
Margin of fair value on intangible assets arising from concession | (65,172) | (63,013) | (70,335) |
Provision for Consent Decree (TAC) | (130,345) | 80,245 | 72,933 |
Share of profit of investees | (3,701) | (6,510) | (5,760) |
Interest and monetary restatement (PPP) | 397,576 | 0 | 0 |
Provision from São Paulo agreement | 135,013 | 135,735 | 0 |
Pension obligations | 267,423 | 243,569 | 304,500 |
Other adjustments | 5,863 | 33,349 | 92,461 |
Total adustments | 6,777,343 | 6,325,278 | 5,878,323 |
Changes in assets | |||
Trade receivables | (72,538) | (71,679) | (42,194) |
Accounts receivable from related parties | 26,358 | 39,919 | 51,594 |
Inventories | (4,858) | 20,075 | (27,633) |
Recoverable taxes | 239,437 | (104,118) | (233,952) |
Escrow deposits | (12,302) | (1,639) | (32,200) |
Other receivables | (1,966) | 11,760 | 8,312 |
Changes in liabilities | |||
Trade payables and contractors | (349,037) | (176,826) | (180,353) |
Services payable | (114,957) | (89,988) | (51,779) |
Accrued payroll and related taxes | 159,794 | (103,488) | 56,841 |
Taxes and contributions payable | 63,276 | (4,829) | 15,983 |
Deferred Cofins/PASEP | 2,863 | 10,648 | (7,889) |
Provisions | (241,674) | (297,282) | (279,951) |
Pension obligations | (221,784) | (217,000) | (228,282) |
Other liabilities | (92,637) | 122,214 | (16,741) |
Cash generated from operations | 6,157,318 | 5,463,045 | 4,910,079 |
Interest paid | (737,326) | (732,048) | (676,087) |
Income tax and social contribution paid | (1,222,747) | (888,077) | (932,110) |
Net cash generated from operating activities | 4,197,245 | 3,842,920 | 3,301,882 |
Cash flows from investing activities | |||
Acquisition of contract assets and intangible assets | (3,195,247) | (2,132,559) | (1,957,780) |
Restricted cash | 5,882 | (13,078) | 5,256 |
Investment increase/(decrease) | 240 | (1,136) | 0 |
Purchase of property, plant and equipment | (78,159) | (50,645) | (18,920) |
Dividends received | 0 | 8,131 | 0 |
Net cash used in investing activities | (3,267,284) | (2,189,287) | (1,971,444) |
Borrowings and financing | |||
Proceeds from loans | 1,793,388 | 1,634,553 | 1,007,572 |
Payment of loans | (2,148,198) | (1,678,748) | (1,098,558) |
Payment of interest on capital | (739,996) | (653,393) | (765,933) |
Public-Private Partnership - PPP | (548,079) | (178,333) | (31,758) |
Program Contract Commitments | (63,057) | (31,568) | (44,935) |
Net cash used in financing activities | (1,705,942) | (907,489) | (933,612) |
Increase/(decrease) in cash and cash equivalents | (775,981) | 746,144 | 396,826 |
Represented by : | |||
Cash and cash equivalents at the beginning of the year | 3,029,191 | 2,283,047 | 1,886,221 |
Cash and cash equivalents at the end of the year | 2,253,210 | 3,029,191 | 2,283,047 |
Increase/(decrease) in cash and cash equivalents | R$ 775981 | R$ 746144 | R$ 396826 |
1. Operations
1. Operations | 12 Months Ended |
Dec. 31, 2019 | |
Operations | |
Operations | Companhia de Saneamento Básico do Estado de São Paulo ("SABESP" or the "Company") is a mixed-capital company headquartered in São Paulo, at Rua Costa Carvalho, 300, CEP 05429-900, controlled by the São Paulo State Government. The Company is engaged in the provision of basic and environmental sanitation services in the State of São Paulo, as well as it supplies treated water and sewage services on a wholesale basis. In addition to providing basic sanitation services in the State of São Paulo, SABESP may performs these activities in other states and countries, and can operate in drainage, urban cleaning, solid waste handling and energy markets. SABESP aims to be a world reference in the provision of sanitation services, in a sustainable, competitive and innovative manner, with a focus on customers. As of December 31, 2019, the Company operated water and sewage services in 372 municipalities of the State of São Paulo. Most of these municipalities’ operations are based on 30-year concession, program and services contracts; of the 372 municipalities served, 324 have already signed contracts, accordingly by Law 11,445/07, until December 31, 2019. Management believes that concession agreements expired and not yet renewed will result in new contracts, disregarding the risk of discontinuity in the provision of municipal water supply and sewage services. The table below shows a summary of the contractual situation: December 31, 2019 December 31, 2018 Total municipalities that have already signed contracts (*) 325 307 Balance – intangible and contract assets 35,990,087 29,187,524 Percentage of intangible and contract assets 90.10% 80.14% Gross revenue (except Construction Revenue) 13,700,777 11,297,242 Percentage of gross revenue (except Construction Revenue) 84.92% 79.26% Municipalities with contracts under negotiation (expired): 21 35 Balance – intangible and contract assets 1,637,878 4,485,203 Percentage of intangible and contract assets 4.10% 12.32% Gross revenue (except Construction Revenue) 451,603 858,277 Percentage of gross revenue (except Construction Revenue) 2.80% 6.02% Municipalities with concession agreements due by 2030: 27 31 Balance – intangible and contract assets 1,181,172 1,917,142 Percentage of intangible and contract assets 2.96% 5.26% Gross revenue (except Construction Revenue) 588,628 980,679 Percentage of gross revenue (except Construction Revenue) 3.65% 6.88% Municipality of São Paulo: Percentage of intangible and contract assets 43.37% 46.97% Percentage of gross operating revenue 44.48% 47.05% (*) Includes the municipality of Tapiratiba, which signed a contract in October 2019, to begin operating in April 2020. The Company operates under an authorization by public deed in the municipalities of Ilhabela, Juquitiba e Ubatuba. As of December 31, 2019, the gross revenue calculated in these municipalities totaled R$89,165 (R$81,385 as of December 31, 2018 and R$81,911 as of December 31, 2017) and the intangible asset was R$351,441 in the year ended December 31, 2019 (R$289,922 as of December 31, 2018). The Company's shares have been listed in the Novo Mercado (New Market) segment of B3 under the ticker symbol SBSP3 since April 2002 and on the New York Stock Exchange (NYSE) as American Depositary Receipts (“ADRs”) Level III, under the SBS code, since May 2002. Since 2008, the Company has been setting up partnerships with other companies, which resulted in the following companies: Sesamm, Águas de Andradina, Saneaqua Mairinque, Aquapolo Ambiental, Águas de Castilho, Attend Ambiental and Paulista Geradora de Energia. Although SABESP has no majority interest in the capital stock of these companies, the shareholders’ agreements provide for the power of veto and casting vote in certain issues jointly with associates, indicating the shared control in the management of investees. Management expects that with the decrease in default resulting from the signature with the municipalities of Guarulhos and Santo André, improved water security, due to the works carried out, and the generation of operating cash and the credit lines available for investment, the Company will have sufficient funds to meet its commitments and not compromise the scheduled investments. The financial statements were approved by Management on April 30, 2020. |
2. Basis of preparation and pre
2. Basis of preparation and presentation of the financial statements | 12 Months Ended |
Dec. 31, 2019 | |
Basis Of Preparation And Presentation Of Financial Statements | |
Basis of preparation and presentation of the financial statements | The financial statements of the Company have been prepared in accordance with the International Financial Reporting Standards – IFRS as issued by the International Accounting Standards Board – IASB. All material information related to the financial statements, and this information alone, is being disclosed and corresponds to the information used by the Company’s Management in its administration. The financial statements have been prepared under the historical cost except for certain financial instruments measured at fair value when required by the standards. The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires Management to exercise its judgment in the process of applying the Company's accounting policies. The areas involving a higher degree to judgment or complexity, or areas where assumptions and estimates are significant to the financial statements are described in Note 6. |
3. Summary of significant accou
3. Summary of significant accounting policies | 12 Months Ended |
Dec. 31, 2019 | |
Summary Of Significant Accounting Policies | |
Summary of significant accounting policies | The main accounting policies applied in the preparation of these financial statements are defined below. These policies have been applied consistently in all years presented, except for the note 3.20. 3.1 Cash and cash equivalents Cash and cash equivalents include cash in hand, bank deposits, overdraft accounts and other short-term highly liquid investments with maturities and intention of use by the Company’s Management in a period lower than three months. 3.2 Financial assets and liabilities Financial Asset - Classification As of December 31, 2019 and 2018, the Company classified its financial assets according to the following categories: measured at amortized cost, measured at fair value through other comprehensive income and measured at fair value through profit or loss. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of the financial assets at inception. As of December 31, 2019 and 2018, the Company did not have financial assets classified as fair value through other comprehensive income and fair value through profit or loss. · Amortized cost This comprises financial assets that meet the following conditions: (i) it is held within the business model whose objective is to hold financial assets to collect contractual cash flows; and (ii) the contractual terms of the financial asset give rise, on specified dates, to cash flows that are solely payments of principal and interest on the principal amount outstanding. Presented as current assets, except for those with maturity of more than 12 months after the reporting date (these are classified as noncurrent assets). The Company's financial assets measured at amortized cost include cash and cash equivalents, restricted cash, balances of trade receivables, accounts receivable from related parties, other receivables, receivables from the Water National Agency – ANA. Financial assets measured at amortized cost are recorded at fair value and subsequently at amortized cost, under the effective interest rate method. Financial Liabilities - Classification As of December 31, 2019 and 2018, with the adoption of IFRS 9, the Company classifies its financial liabilities measured at amortized cost. Classification depends on the purpose to which the financial liabilities were assumed. This category comprises balances payable to contractors and suppliers, borrowings and financing, services payable, balances payable from public-private partnership (PPP), and program contract commitments. The effective interest rate method is adopted to calculate the amortized cost of a financial liability and allocate its interest expense under the respective period. The effective interest rate exactly deducts the estimated future cash flows (including fees, transaction costs and other issue costs) throughout the financial liability’s estimated life or, when appropriate, during a shorter period, for initial recognition of the net carrying amount. Impairment IFRS 9 – Financial Instruments introduces a new impairment model, replacing the incurred loss model for the expected credit loss model, which requires the recording of provision upon initial recognition of asset exposed to credit risk. Trade receivables Due to the caractheristics of the Company’s accounts receivable such as (i) insignificant financial component, (ii) non-complex receivables portfolio, and (iii) low credit risk, the Company adopted the simplified approach of expected credit loss, which consists in recognizing expected credit loss based on the total asset’s useful life. As of December 31, 2019 and 2018, the methodology to calculate allowance for doubtful accounts consisted of using an estimate calculated based on the average default observed in the last 12 months, per maturity range, in addition to estimating the recovery of credits overdue for more than 360 days, based on the track record of the last two years. For estimate purposes, it also considered the category of private and public customers, and segregated accounts receivable among the regular consumption accounts and agreements.. The Company also concluded that the macroeconomic indicators did not have significant impact on its estimates. In order to support this understanding, the Company carried out several analyses of the correlation between indicators that could potentially have some influence the sanitation sector and its history of losses on doubtful accounts, such as Gross Domestic Product (GDP), Unemployment Rate and the Extended Consumer Price Index (IPCA). Deposit transactions and financial investments measured at amortized cost The Company analyzes changes in the rates of investments in bank deposits certificates and information obtained from regulatory agencies about the financial institutions. The likelihood of delinquency over 12 months and during the terms of these investments was based on historical data provided by credit rating agencies for each credit level and analyzed in terms of sensitivity based on current returns. These deposits and financial investments are subject to an insignificant risk of change in value. 3.3 Operating income (a) Revenue from sanitation services Revenue from water supply and sanitation services are recognized as the water is consumed and services are provided. Revenues, including revenues unbilled, are recognized at the fair value of the consideration received or receivable for the sale of those services. Revenue is shown net of value-added tax, rebates and discounts. Unbilled revenues represent incurred revenues in which the services were provided, but not yet billed until the end of the each period and are recorded as trade receivables based on monthly estimates of the completed services. As of December 31, 2017, the Company recognized revenue when: i) products were delivered or services were rendered; ii) the amount of revenue could be reliably measured, iii) it was probable that future economic benefits would flow to the Company, and iv) it was probable that the amounts will be collected. The amount of revenue was not considered to be reliably measurable until all conditions relating to the sale had been satisfied. Amounts in dispute were recognized as revenue when collected. As of December 31, 2019 and 2018, with the adoption of IFRS 15, since 1 January, 2018, which establishes a five-step model applicable over revenue from a contract with a customer, as a result, the Company started to recognize revenue when: i) it identifies the contracts with customers; ii) it identifies the different obligations in the contract; iii) it determines the transaction price; iv) it allocates the transaction price to the performance obligations in the contracts; and (v) it satisfies all performance obligations. Amounts in dispute are recognized as revenue when collected. The Company analyzed sales transactions to private sector, government entities and wholesale customers and concluded IFRS 15 did not have significant impacts. The Company adopted IFRS 15 using the cumulative effect method, with application and recognition as from first-time adoption, i.e. January 1, 2018. Consequently, the Company did not apply the requirements of IFRS 15 for comparison purposes. Accordingly, data relating to 2017 is presented based on information previously reported and prepared in accordance with IAS 18 Revenue and related interpretations. (b) Construction revenue As of December 31, 2017, revenue from concession construction contracts was recognized in accordance with IFRIC 12 (Concession Arrangements) and IAS 11 (Construction Contracts), using the percentage-of-completion method, provided that the applicable conditions for application were fulfilled, with non-cash effect. The percentage of completion was calculated from the ratio of the actual costs incurred on the balance sheet date to the planned total costs (cost-to-cost method). Revenue from cost plus contracts was recognized by reference to the construction costs incurred during the period plus a fee earned. The fee represents the additional margin related to the work performed by the Company in relation to such construction contracts and it is added construction costs, resulting in the construction revenue . As of December 31, 2019 and 2018, revenue from concession construction contracts is recognized in accordance with IFRS 15 (Revenue from Contracts with Customers) and IFRIC 12 (Concession Contracts), as all performance obligations are satisfied over time. During the construction of the contract, an asset is classified as contract assets, as the Company estimates that the fair value of its consideration is equivalent to expected construction costs plus margin. The fee represents the additional margin related to the work performed by the Company in relation to such construction contracts and it is added to construction costs, resulting in the construction revenue. 3.4 Trade receivables and allowance for doubtful accounts Trade receivables are amounts due from customers for services performed in the ordinary course of business. These are classified as current assets, except when maturity exceeds 12 months after the end of the reporting period. In these cases, they are presented as noncurrent assets. The Company establishes an allowance for doubtful accounts for receivable balances at an amount that Management considers to be sufficient to cover eventual losses, as described in note 3.2. 3.5 Inventories Inventories comprise supplies for consumption and maintenance of the water and sewage systems are stated at the lower of average cost of acquisition or net realizable value, and are classified in current assets. 3.6 Investment properties The investment properties are recorded at the acquisition or construction cost, less accumulated depreciation, except for the land group, calculated by the straight-line method at rates that consider the estimated useful life of assets. Expenditures related to repairs and maintenance are recorded in the income statement when incurred. The Company also maintains few assets for undetermined use in the future, i.e., it is not defined if the Company will use these assets in the operation or sell them in the short term during the ordinary course of business. 3.7 Property, plant and equipment Property, plant and equipment comprise mainly administrative facilities not composing the assets, subject-matter of the concession agreements. Those assets are stated at historical acquisition or construction cost less depreciation, net of impairment charge, when necessary. Interest, other finance charges and inflationary effects deriving from financing effectively applied to construction in progress are recorded as cost of respective property, plant and equipment, in this case, for the qualifying assets, as applicable. Qualifying assets are assets that, necessarily, take a substantial period to get ready for its intended use or sale. The Company considers that substantial period means a period greater than 12 months. This period was established by considering the completion period of the majority of its constructions, which is greater than 12 months, which corresponds to one fiscal year of SABESP. Subsequent costs included in the existing asset's carrying amount or recognized as a separate asset, as appropriate, only when it is probable that the future economic benefit associated with the item will flow to the Company and the cost of the item can be measured reliably. Repairs and maintenance are charged to the income statement during the financial period in which they were incurred. Depreciation is calculated using the straight-line method to allocate their cost and is described in Note 15 (a). Residual values and the useful life of assets are revised and adjusted, where applicable, at the end of each year. Gain and losses on disposals are determined by the difference between the proceeds with the carrying amount and are recognized within other operating income (expenses) in the income statement. 3.8 Intangible assets Intangibles are stated at acquisition cost and/or construction of the underlying assets, including construction margin, interest and other finance charges capitalized during the construction period, in this case, for the qualifying assets. Qualifying assets are assets that, necessarily, take a substantial period to get ready for its intended use or sale. The Company considers that substantial period means a period greater than 12 months. This period was established by considering the completion period of the majority of its constructions, which is greater than 12 months, which corresponds to one fiscal year of SABESP. The intangible has its amortization initiated when the intangible assets are available for use in location and the necessary condition when this asset becomes operational. The amortization of the intangible assets is discontinued when the asset is totally consumed or it is disposed of, whatever occurs first. Donations in assets, received from third parties and governmental entities, to allow the Company to render water and sewage services are not recorded in the Company’s financial statements, since these assets are controlled by the concession grantor. Financial resources received as donations for the construction of infrastructure are recorded under “Other operating income”. (a) Concession agreements/program contracts/service contracts The Company operates concession agreements including the rendering of basic sanitation, environmental, water supply and sewage services signed with the concession grantor. The infrastructure used by SABESP subject to service concession arrangements is considered to be controlled by the concession grantor when: (i) The grantor controls or regulates what services the operator must provide with the infrastructure, to whom it must provide them, and at what price; and (ii) The grantor controls the infrastructure, i.e., retains the right to take back the infrastructure at the end of the concession. SABESP's rights over infrastructure operated under concession agreements is accounted for as an intangible asset as SABESP has the right to charge for use of the infrastructure assets, and users (consumers) have the primary responsibility to pay SABESP for the services. The fair value of construction and other work on the infrastructure is recognized as revenue, as its fair value, when the infrastructure is built, provided that this work is expected to generate future economic benefits. The accounting policy to recognize construction revenue is described in Note 3.3 (b). Investments made and not recovered through rendering of services, in cases where there is the right to receive the residual value of the assets at the end of the contract , must be indemnified by the concession grantor, with cash or cash equivalents or also, in general with the contract extension. These investments are amortized by the useful life of asset. The details referring to amortization of intangible assets are described in Note 14 (c). Law 11,445/2007 indicates, whenever possible, that basic sanitation public utilities will have the economic and financial sustainability ensured through the remuneration due to service collection, preferably as tariffs and other public prices, which may be established for each service or both jointly. Therefore, investments made and not recovered through services rendered, within original term of the contract, are recorded as intangible assets and amortized by the useful life of the asset, taking into consideration a solid track record of concession renewal and, therefore, the continuity of services. (b) Software license of use Software licensing is capitalized based on the acquisition costs and other implementation costs. Amortizations are recorded according to the useful lives and the expenses associated with maintaining these are recognized as expenses when incurred. 3.9 Impairment of non-financial assets Property, plant and equipment, intangibles assets and other noncurrent assets with definite useful lives, are yearly reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The Company does not record assets with indefinite useful life and assessed that there are no indications of impairment losses, mainly supported by Law 11,445/2007, which ensures that basic sanitation public utilities will have assured its economic and financial sustainability through tariffs or via indemnity. 3.10 Trade accounts payable and contractors Accounts payable to contractors and suppliers are obligations to pay for goods or services purchased from suppliers in the ordinary course of business and are initially measured at fair value, which generally correspond to the bill and subsequently at amortized cost, being classified as current liabilities, except when the maturity exceeds 12 months after the reporting date and are, otherwise, presented as noncurrent liabilities. 3.11 Borrowings and financing Borrowings and financing are initially recognized at fair value, upon receipt of funds, net of transaction costs. Subsequently, borrowings and financing are stated at amortized cost, as presented in Note 16. Borrowings and financing are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after the end of the reporting period. Nonconvertible bonds issued by the Company are recognized in a similar manner to borrowings. 3.12 Borrowing costs Borrowing costs attributable to acquisition, construction or production of an asset, which, necessarily, requires a substantial time period to be ready for use or sale are capitalized as part of the cost of these assets. Other borrowing costs are recognized as expenses in the period they are incurred. Borrowing costs are interest rates and other charges incurred by the Company related to borrowings, including exchange variation, as described below. The capitalization occurs during the period in which the asset has been built, considering the weighted average rate of borrowings effective on the capitalization date. For foreign currency-denominated borrowings or financing, the Company analyzes them as if they were contracted in local currency, restricting the capitalization of interest and/or exchange variation by the amount that would be capitalized if these were contracted in the domestic market in similar lines of credit and loans. 3.13 Salaries, payroll charges and contributions Salaries, vacations, 13 th The profit sharing plan for its employees is based on operational and financial targets of the Company, which creates provision when it is contractually required or when there is a practice in the past that created a constructive obligation, and is recorded on the accrual basis period as operating cost, selling, administrative expenses or capitalized in assets. 3.14 Provisions, legal liabilities, escrow deposits and contingent assets Provisions related to claims are recognized when: i) the Company has a present (legal or constructive) obligation as a result of past event; ii) it is probable that an outflow of resources that comprise economic benefits will be required to settle the obligation; and iii) the amount can be reliably estimated. Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. Provisions are measured at the present value of the disbursements expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provision due to passage of time is recognized as interest expense. For financial statement presentation purposes, the provision is stated net of the related escrow deposits based on the legal right to offset. The bases and the nature of the provisions for civil, tax, labor and environmental risks are described in Note 20. Escrow deposits not linked to related liabilities are recorded in noncurrent assets. Escrow deposits are adjusted for inflation. Contingent assets are not recognized in the statements of financial position. 3.15 Environmental costs Costs related to ongoing environmental programs are expensed in the income statement, when there is any indication of an event. Ongoing programs are designed to minimize the environmental impact of the operations and to manage the environmental risks inherent to the Company's activities. 3.16 Income taxes – current and deferred Income taxes expenses comprise current and deferred income tax and social contributions. Current tax The provision for income tax and social contribution is based on the taxable income for the year. The income tax was accrued at rate 15%, plus 10% surtax on taxable income exceeding R$ 240. The social contribution was accrued at rate 9% over adjusted net income. Taxable income differs from net income (profit presented in the income statement), because it excludes income and expenses taxable or deductible in other years, and excludes items not permanently taxable or not deductible. Income tax and social contribution are accrued based on legislation in place in the end of the year. Management periodically evaluates and measures the positions taken in the income tax return with respect to situations in which applicable tax regulations are subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities. Deferred tax Deferred income tax is recognized, using the liability method, on temporary differences arising between the tax basis of assets and liabilities and their carrying amounts in the financial statements. However, the deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction that at the time of the transaction affects neither accounting nor taxable profit nor loss, except for business combinations. Deferred income tax is determined using tax rates (and laws) effective at the end of the reporting period and expected to apply when the related deferred income tax asset is realized or the deferred income tax liability is settled. Deferred income tax and social contribution assets are recognized only to the extent that it is probable that future taxable profit will be available for which temporary differences can be utilized and tax losses can be carryforward. Deferred taxes assets and liabilities are offset when there is a legally enforceable right of offsetting current tax assets against current tax liabilities and when deferred income tax assets and liabilities are related to income taxes levied by same tax authority over the tax entity. 3.17 Taxes on revenues Revenues from sanitation services are recognized on accrual basis for PASEP (Programa de Formação do Patrimônio do Servidor Público) and Cofins (Contribuição para o Financiamento da Seguridade Social), calculated at the rates of 1.65% and 7.60%, respectively. In addition, revenues from sanitation services are also subject to the Regulatory, Control and Oversight Fee (TRCF - Taxa de Regulação, Controle e Fiscalização), whose taxable event is the performance of regulatory, control and monitoring activities by ARSESP, calculated at 0.50% of the annual revenue directly generated by the service provided less taxes levied on the service. The taxes related to PASEP and Cofins incident on amounts invoiced to public entities are due when invoices are received. These taxes are calculated by the non-cumulativeness regime and presented net, as deductions from gross revenues. Tax debts calculated over “other operating income” are presented as deductions from the respective operating income. 3.18 Pension obligations (a) Defined benefit The Company makes contributions to defined benefit plans on a contractual basis and sponsored thereby. The regular contributions comprise the net administrative expenses and are recognized in the income statement for the period. Liabilities from defined benefit pension plan obligations correspond to the present value of the defined benefit obligation at the end of the reporting period, less the fair value of the plan’s assets. The defined benefit obligation (G1) and (G0) are calculated on an annual basis by independent actuaries, using the projected unit credit method. The estimated future cash outflows is discounted to its present value, using the interest rates of Government bonds with maturities that approximate the maturity of the related liability. Referring to actuarial gains and losses deriving from adjustments based on the experience and changes in actuarial assumptions are directly recorded under equity, as other comprehensive income (OCI), so that the plan's net assets or liabilities are recognized in the statement of financial position in order to reflect the full amount of plan’s deficit or surplus. In an event where a curtailment relates to only some of the employees covered by a plan, or where only part of an obligation is settled, the gain or loss includes a proportionate share of the past service cost and actuarial gains and losses. The proportionate share is determined on the basis of the present value of the obligations before and after the curtailment or settlement. (b) Defined contribution The Company makes contributions to defined contribution plans on a contractual basis and sponsored thereby, a supplementary private pension entity that provides post-employment benefits to its employees, in which the Company makes fixed and equal contributions to employees, within the limits set by regulation. In this model, the benefits paid are directly related to the amount contributed, with no deficits to be covered by the Company. 3.19 Financial revenues and expenses Financial revenue is primarily comprised of interest and inflation adjustments resulting from financial investments, escrow deposits and negotiations with customer to pay by installments, calculated using the effective interest rate method. Financial expenses are primarily comprised of interest, inflation adjustments and exchange rate changes on borrowings and financing, provisions, public-private partnership and program contract commitments. These financial income and expenses are calculated using the effective interest rate method. Inflation adjustments and exchange gains and losses derive from the collection or payment to third parties, as contractually required by law or court decision, and recognized on an accrual basis pro rata temporis. Inflation adjustments included in the agreements are not considered embedded derivatives, since they are deemed as inflation adjustment rates for the Company’s economic scenario. 3.20 Leases As of December 31, 2018 lease agreements were classified as finance lease when property, risks and rewards inherent to the ownership of asset to the lessee are transferred. Other leases were classified as operational lease, recognized as expenses in the income statement on a straight-line basis during the lease term. Finance lease agreements were measured based on the lower amount between the present value of minimum mandatory payments of the agreement or the fair value of asset on the start date the lease agreement. The amounts payable deriving from considerations of finance lease agreements are impacted by financial expenses and amortization of finance lease payables so that to obtain a constant interest rate. The corresponding lessor’s liability is recorded as current and noncurrent debt. On January 1, 2019, the Company applied IFRS16, which introduced one sole lease model, replacing the concept of classifying between operating and finance lease, which was applied by the Company up to December 31, 2018. The impact of this new standard is detailed in Note 4.1. 3.21 Other current and noncurrent assets and liabilities Other assets are stated at cost of acquisition, net of any impairment loss, where applicable. The amounts recognized as other liabilities are stated at known or estimated amounts, including, where applicable, related charges and inflation adjustments. 3.22 Dividends and interest on capital The Company uses the tax benefits of distributing dividends as interest on capital, as permitted by Brazilian Law and based on the Bylaws. This distribution of dividend is accounted for in accordance with Brazilian Law 9,249/95 for tax deductibility purposes, limited to the daily pro rata fluctuation of the Long-term Interest Rate (TJLP). The benefit attributed to the shareholders is recognized in the current liability against Equity, based on its by-laws. Dividends and interest on capital over the minimum established in the by-laws are recognized when approved by the shareholders in the shareholders’ meeting, except for taxes incurring in the distribution of interest on capital. The tax benefit of the interest on capital is accrued in the income statement of the year, under the same recognition basis of expenses with interest on capital. 3.23 Present value adjustment Current and noncurrent financial assets and liabilities are adjusted to present value based on discount rate at current market rate as of the transaction date, when the effects are relevant. 3.24 Segment information Operating segments are determined in a manner consistent with the internal reporting to the Company’s chief operating decision maker (“CODM”), which, in the case of SABESP, is the Board of Executive Officers, to make strategic decisions, allocate resources and evaluate performance. Consequently, the Company determined that it has one operating segment (sanitation services). The accounting policies used to determine segment information are the same as those used to prepare the Company’s financial statements. The measure of the segment’s profit or loss is operating income before other operating expenses, net and equity accounting, which excludes construction revenue and related costs. The CODM analyzes asset and liabilitity information on a consolidated basis. Consequently, the Company does not disclose segment information on assets and liabilities. Substantially all of the Company’s noncurrent assets and revenue generated from customers are located in São Paulo State. Consequently, financial information is not disclosed by geographic area. 3.25 Translation into foreign currency (a) Functional and reporting currency Items included in the financial statements are measured using the currency of the primary economic environment in which the company operates ("the functional currency"). The financial statements are presented in Brazilian reais (R$), which is also the Company's functional currency. All financial information has been stated in reais and rounded to the next thousand, except where otherwise indicated. (b) Foreign currency translation Foreign currency-denominated transactions are translated into Brazilian reais using the exchange rates prevailing at the transaction dates. Statement of financial position accounts are translated by the exchange rate prevailing at reporting date. Exchange gains and losses resulting from the settlement of these transactions and the translation of foreign currency-denominated cash assets and liabilities are recognized in the income statement, except for borrowings and financing referring to property, plant and equipment or intangible assets in progress, where exchange losses are recognized as corresponding entry to the asset while construction is in progress, as described in Note 3.12. |
4. Changes in accounting practi
4. Changes in accounting practices and disclosures | 12 Months Ended |
Dec. 31, 2019 | |
Changes In Accounting Practices And Disclosures | |
Changes in accounting practices and disclosures | 4.1 New standards, amendments and interpretations effective for periods beginning on or after January 1, 2019 New standards and revisions Standard Description Impact IFRS 16 – Leases Establishes a single model for the accounting of leases in the balance sheet for lessees. A lessee recognizes a right of use asset that represents his right to use the leased asset and a lease liability that represents his obligation to make lease payments. The lessor's accounting remains similar to the current standard, that is, the lessors continue to classify the leases as financial or operating. IFRS 16 superseded the leases guidance including IAS 17 Leases and IFRIC 4, SIC 15 and SIC 27 Determining Whether an Arrangement Contains a Lease. (*) See impact analysis below. IFRIC 23 – Uncertainty over Income Tax Treatments 1 Clarify accounting when there are uncertainties about the treatment of taxes on profit. The application of this interpretation did not impact the disclosures or amounts recognized in the annual financial statements. Amendments to IFRS 9 – Prepayment Features with Negative Compensation Clarify that, to determine whether a prepayment feature meets the condition of “solely payments of principal and interest”, the party exercising the option may pay or receive compensation for the prepayment regardless of the reason for the prepayment, that is, the prepayment features with negative compensation do not automatically break the condition of “solely payments of principal and interest”. The application of this amendment did not impact the disclosures or amounts recognized in the annual financial statements. Amendments to IAS 28 – Long-term interests in Associates and Joint Ventures Clarify that IFRS 9, including its requirements for impairment, is applicable to other financial instruments in an associate or joint venture to which the equity method is not applicable. Include long-term investments that, in substance, are part of the entity's net investment in an associate or joint venture. The application of this amendment did not impact the disclosures or amounts recognized in the annual financial statements. Annual Improvements to IFRSs: 2015-2017 Cycle (Amendments to IFRS 3, IFRS 11, IAS 12 and IAS 23) · IFRS 3 – Business Combinations - clarify that when the control of a business that is a joint operation is obtained, the requirements for business combination are applied in stages, including the remeasurement of the interest previously held in the joint operation at fair value. · IFRS 11 – Joint Arrangements - clarify that when a party that participates in a joint operation that corresponds to a business, but does not have joint control of that operation, obtains joint control of that joint operation, its interest previously held in the joint operation is not remeasured. · IAS 32 – Income Taxes - clarify that the Company must recognize the consequences of income tax on dividends in profit or loss, in other comprehensive income or in equity, depending on where the transactions that generated the profit to be distributed were originally recognized. · IAS 23 – Borrowing Costs – clarify that if there is any specific borrowing outstanding after the corresponding asset is ready for its intended use or sale, that borrowing becomes part of the funds that the Company usually borrows to calculate the capitalization rate on borrowings in general. The application of this amendment did not impact the disclosures or amounts recognized in the annual financial statements. Amendments to IAS 19 – Plan Amendment, Curtailment or Settlement The amendments clarify that the cost of past services (or settlement gain or loss) is calculated by measuring the defined benefit liability (asset) based on updated assumptions and comparing the benefits offered and the plan’s assets before and after the change of the plan (or its curtailment or settlement) but ignoring the effect of the asset ceiling (which may arise when the defined benefit plan is in surplus). IAS 19 clarifies that the change in the effect of the asset ceiling resulting from the change in the plan (or its curtailment or settlement) is determined in a second step and is normally recognized in other comprehensive income. The application of this amendment did not impact the disclosures or amounts recognized in the annual financial statements. (*) Transition to IFRS 16 - Leases The new standard replaces IAS 17 – “Leases” and corresponding interpretations, introducing significant changes to lessees, as it requires lessees to recognize the liability of future payments and the right of use of leased assets to virtually all lease agreements, including operating leases; specific short-term contracts or contracts with small amounts may be excluded from the scope of this new standard. The Company’s financial statements were impacted as follows: a) recognition of right-of-use assets and lease liabilities in the statement of financial position, initially measured at present value of future lease payments; b) recognition of amortization expenses of right-of-use assets and interest expenses on lease liabilities in the income statement; and c) separation of the total cash paid in these transactions between principal (recorded in financing activities) and interest (recorded in operating activities) in the statement of cash flows. SABESP applied the requirements of IFRS 16 as of the fiscal year beginning on January 1, 2019. To this end, the transition method selected by the Company was the modified retrospective approach, whereby the amount referring to the Right-of-Use Asset equals the Lease Liability, without the cumulative effect of the initial application of this new standard recorded as adjustment to the opening balance of equity and without the restatement of comparative periods. The new lease definitions were applied to all contracts in effect on the transition date. The change in the definition of a lease refers mainly to the concept of control. IFRS 16 establishes whether a contract contains a lease based on the fact that customer has the right to control an identified asset for a defined period of time in exchange of consideration. The Company’s Management analyzed contracts (out of a total of approximately 20,000 contracts), evaluating whether they contained leases in accordance with IFRS 16. This analysis identified mainly impacts related to vehicles and properties leased from third parties, corresponding to nearly 95% of the total amount, and less representative amounts arising from other transactions in which we identified assets leased individually or in combination in service contracts. The recognition of lease expenses of short-term leases (12 months or less) and leases of low-value assets (below RS$ 19) will remain on a linear basis, as permitted by IFRS 16. On January 1, 2019, the measurement of lease liabilities corresponds to the total future fixed lease payments, adjusted to present value, considering an incremental rate on borrowings, which corresponds to the incremental borrowing rate applicable to borrowings or debt issues in the local capital market, which represent the financing of these assets classified as right of use, allocating the assets based on useful life at the incremental borrowing rate per maturity term of each borrowing contract. The Company decided to use the practical expedient of using an incremental borrowing rate of 8.97% p.y., based on the respective terms for contracts with similar characteristics. Regarding renewals, the Company considered the assumptions, policies and internal regulations, whose term cannot be automatically renewed, and for which extensions will only occur based on an agreement between the parties in cases proven to be advantageous and necessary to attain the Company’s interests, i.e. when it is reasonable certain that the option will be exercised. The Company applied the practical expedient relating to the definition of leases during the transition period. This means that it applied IFRS 16 to all agreements signed before January 1, 2019, identified as leases in accordance with IAS 17 and IFRIC 4. After carrying out analysis, the Company concluded that on January 1, 2019, 70 contracts fell under the scope of IFRS 16. The adoption of this standard increased assets, due to the recognition of the right of use of leased assets, and liabilities, as shown below: Impact from first-time adoption of the standard Group Future payments of fixed leases Impact of the discount rate Right of use of leased assets Lease liabilities Vehicles 63,795 (9,313) 54,482 54,482 Properties 7,525 (1,333) 6,192 6,192 Equipment 741 (100) 641 641 Other 4,243 (603) 3,640 3,640 Leases (IAS 17)* - - 581,388 568,666 Total 76,304 (11,349) 646,343 633,621 *Leases recognized in accordance with IAS 17 through December 31, 2018. See additional information in Notes 14 (k), 16 and 32. 4.2 New standards, amendments and interpretations to existing standards that are not yet effective The Company did not early adopt these standards and is assessing the impacts of the new and revised IFRS below on the disclosures or amounts recognized in the financial statements: Standard Description Impact IFRS 17 – Insurance Contracts 2 Establishes the principles for the recognition, measurement, presentation and disclosure of insurance contracts. IFRS 17 will supersede IFRS 4 Insurance Contracts. The Company does not expect effects from adopting this standard. Amendments to IFRS 10 and IAS 28 – Sale or Contribution of Assets between an Investor and its Associate or Joint Venture 3 Clarify situations involving the sale or contribution of assets between an investor and its associates or joint venture. The Company is assessing the impacts and effects of the amendments, however, it does not expect material effects from adopting this standard. Amendments to IFRS 3 – Definition of a Business 1 Clarify that even though businesses normally present outputs (“products”), products are not necessary for an integrated set of activities and assets to qualify as businesses. To be considered as a business, an acquired set of activities and assets must include at least one input and a substantive process that together contribute significantly to the ability to create products. The Company does not expect effects from adopting this amendment. Amendments to IAS 1 and IAS 8 – Definition of Material 1 The purpose of the amendments is to facilitate the understanding of the definition of material in IAS 1 and not to change the underlying concept of materiality in the IFRS Standards. The concept of “hidden” material information by immaterial information was included as part of the new definition. The Company is assessing the impacts and effects of the amendments, however it does not expect material effects from adopting this standard. 1 Effective for annual periods beginning on or after January 1, 2020. 2 Effective for annual periods beginning on or after January 1, 2021. 3 The effective date for these amendments was deferred indefinitely. There are no other standards and interpretations not yet adopted that may, in the opinion of Management, have a significant impact on the result for the year of equity disclosed by the Company in its financial statements. |
5. Risk management
5. Risk management | 12 Months Ended |
Dec. 31, 2019 | |
Risk Management | |
Risk management | 5.1 Financial Risk Management Financial risk factors The Company's activities are affected by Brazilian economic scenario, making it exposed to market risk (exchange rate and interest rate), credit risk and liquidity risk. The Company’s financial risk management is focused on the unpredictability of financial markets and seeks to minimize potential adverse effects on the Company’s financial performance. The Company has not utilized derivative instruments in any of the reported periods. (a) Market risk Foreign currency risk SABESP’s foreign exchange exposure implies market risks associated with currency fluctuations, since the Company has foreign currency-denominated liabilities, mainly US dollar and yen-denominated short and long-term borrowings. The management of SABESP’s foreign currency exposure considers several current and projected economic factors, besides market conditions. This risk arises from the possibility that the Company may incur in losses due to exchange rate fluctuations that would impact liability balances of foreign currency-denominated borrowings and financing raised in the market and related financial expenses. The Company does not maintain hedge or swap contracts or any derivative financial instrument to hedge against this risk. A significant amount of the Company’s financial debt is indexed to the US dollar and Yen, in the total amount of R$6,382,009 as of December 31, 2019 (R$6,694,912 as of December 31, 2018). Below, the Company’s exposure to exchange risk: December 31, 2019 December 31, 2018 Foreign currency R$ Foreign currency R$ Borrowings and financing – US$ 1,051,881 4,239,817 1,191,152 4,615,476 Borrowings and financing – Yen 56,452,885 2,097,225 57,463,173 2,026,726 Interest and charges from borrowings and financing – US$ 32,242 40,193 Interest and charges from borrowings and financing – Yen 12,725 12,517 Total exposure 6,382,009 6,694,912 Borrowing cost – US$ (20,173) (22,390) Borrowing cost – Yen (3,038) (3,113) Total foreign-currency denominated borrowings (Note 16) 6,358,798 6,669,409 The 4.7% decrease in foreign currency-denominated debt from December 31, 2018 to December 31, 2019 was mainly due to decrease of debt in US dollar and Yen, resulting from the amortizations occurred in 2019, mitigated by the increase in exchange rates, as shown in the table below: December 31, 2019 December 31, 2018 Variation US$ R$ 4.0307 R$ 3.8748 4.0% Iene R$ 0.03715 R$ 0.03527 5.3% As of December 31, 2019, if the Brazilian real had depreciated or appreciated by 10 percentage points, in addition to the impacts mentioned above, against the US dollar and Yen with all other variables held constant, effects on results before taxes on the year would have been R$638,201 (R$669,491 as of December 31, 2018), lower or higher, mainly as a result of exchange losses or gains on the translation of foreign currency-denominated loans. Interest rate risk This risk arises from the possibility that the Company could incur losses due to fluctuations in interest rates, increasing the financial expenses related to borrowings and financing. The Company has not entered into any derivative contract to hedge against this risk; however continually monitors market interest rates, in order to evaluate the possible need to replace its debt. The table below provides the Company's borrowings and financing subject to variable interest rate: December 31, 2019 December 31, 2018 CDI (i) 1,866,755 1,250,000 TR (ii) 1,675,203 1,637,290 IPCA (iii) 1,366,134 1,614,595 TJLP (iv) 1,381,342 1,322,854 LIBOR (v) 2,829,073 3,259,295 Interest and charges 105,667 134,725 Total 9,224,174 9,218,759 (i) CDI – (Certificado de Depósito Interbancário), an interbank deposit certificate (ii) TR – Interest Benchmark Rate (iii) IPCA – (Índice Nacional de Preços ao Consumidor Amplo), a consumer price index (iv) TJLP – (Taxa de Juros a Longo Prazo), a long-term interest rate index (v) LIBOR – London Interbank Offered Rate Another risk to which the Company is exposed, is the mismatch of monetary restatement indices of its debts with those of its service revenues. Tariff adjustments of services provided by the Company do not necessarily follow the increases in the inflation indexes to adjust loans, financing and interest rates affecting indebtedness As of December 31, 2019, if interest rates on borrowings and financing had been 1 percentage point higher or lower with all other variables held constant, the effects on profit before taxes would have been R$ 92,242 (b) Credit risk Credit risk arises from cash and cash equivalents, deposits in banks and financial institutions, as well as credit exposures to wholesale basis and retail customers, including outstanding accounts receivable, restricted cash and accounts receivable from related parties. Credit risk exposure to customers is mitigated by sales to a dispersed base. The maximum exposures to credit risk as of December 31, 2019 are the carrying amounts of instruments classified as cash and cash equivalents, deposits in banks and financial institutions, restricted cash, trade receivables and accounts receivable from related parties in the balance sheet date. See additional information in Notes 7, 8, 9 and 10. Regarding the financial assets held with financial institutions, the credit quality that is not past due or subject to impairment can be assessed by reference to external credit ratings (if available) or to historical information about the bank’s default rates. For the credit quality of the banks, such as deposits and financial investments, the Company considers the lower rating published by three main international rating agencies (Fitch, Moody's and S&P), according to internal policy of market risk management: December 31, 2019 December 31, 2018 Cash and cash equivalents AA+(bra) 2,193,725 2,966,080 AAA(bra) 41,992 45,430 Other (*) 17,493 17,681 2,253,210 3,029,191 (*) This category includes current accounts and investment funds in banks whose balances were not significant, and after assessing the impact of IFRS 9, concluded that expected losses are not material. The available credit rating information of the banks, as at December 31, 2019, in which the Company made deposit transactions and financial investments in local currency (R$ - domestic rating) during the year is as follows: Banks Fitch Moody's Standard Poor's Banco do Brasil S/A AA(bra) Aa1.br - Banco Santander Brasil S/A - Aaa.br brAAA Brazilian Federal Savings Bank AA(bra) Aa1.br brAAA Banco Bradesco S/A AAA(bra) Aa1.br brAAA Itaú Unibanco Holding S/A AAA(bra) Aa1.br brAAA (c) Liquidity risk The Company's liquidity is primarily reliant upon cash provided by operating activities and borrowings and financing obtained in the domestic and international capital markets. The liquidity risk management considers the assessment of its liquidity requirements to ensure it has sufficient cash to meet its operating and capital expenditures needs, as well as the payment of debts. The funds held by the Company are invested in interest-bearing current accounts, time deposits and securities, selecting instruments with appropriate maturity or liquidity sufficient to provide margin as determined by projections mentioned above. The table below shows the financial liabilities of the Company, by relevant maturities, including the installments of principal and future interest to be paid according to the agreement. Future interest was calculated based on the contractual clauses for all agreements. For agreements with floating interest rate, the interest rates used correspond to the base dates above. 2020 2021 2022 2023 2024 2025 onwards Total As of December 31, 2019 Liabilities Borrowings and financing 3,303,736 1,574,711 1,595,436 1,317,996 1,574,770 6,715,873 16,082,522 Accounts payables to suppliers and contractors 369,631 - - - - - 369,631 Services payable 474,078 - - - - - 474,078 Public-Private Partnership – PPP 383,421 383,421 383,421 383,421 338,765 4,615,324 6,487,773 Program contract commitments 276,580 46,733 31,983 31,983 1,014 13,771 402,064 Cross default The Company has borrowings and financing agreements including cross default clauses, e.g., the early maturity of any debt, may imply the early maturity of these agreements. The indicators are continuously monitored in order to avoid the execution of these clauses and the more restrictive are showed in Note 16 (d). 5.2 Capital management The Company’s objectives when managing capital are ensure its ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders, and to maintain an optimal capital structure to reduce the cost of capital. The Company monitors capital based on the leverage ratio. This ratio corresponds to net debt divided by total capital (shareholders and providers of capital). Net debt corresponds to total borrowings and financing less cash and cash equivalents. Total capital is calculated as total equity as shown in the statement of the financial position plus net debt. December 31, 2019 December 31, 2018 Total borrowings and financing (Note 16) 13,244,709 13,152,796 (-) Cash and cash equivalents (Note 7) (2,253,210) (3,029,191) Net debt 10,991,499 10,123,605 Total equity 21,635,783 19,551,688 Total capital (shareholders + providers of capital) 32,627,282 29,675,293 Leverage ratio 34% 34% As of December 31, 2019, the leverage ratio remained at 34% compared to December 31, 2018, mainly due to the increase in equity, generated by the 2019 earnings retention, which was mitigated by the decrease of cash and cash equivalents. 5.3 Fair value estimates The Company considers that balances from trade receivables (current) and accounts payable to suppliers by carrying amount, less impairment approximate their fair values, considering the short maturity. Long-term trade receivables also approximate their fair values, as they will be adjusted by inflation and/or will bear contractual interest rates over time. 5.4 Financial instruments The Company did not have financial assets classified as fair value through other comprehensive income and fair value through profit or loss. The Company’s financial instruments included in the amortized cost category comprise cash and cash equivalents, restricted cash, trade receivables, balances with related parties, other receivables, and balances receivable from the Water National Agency – ANA, accounts payable to contractors and suppliers, borrowings and financing, services payable, balances payable deriving from the Public Private Partnership-PPP and program contract commitments, which are non-derivative financial assets and liabilities with fixed or determinable payments, not quoted in an active market. The estimated fair values of financial instruments are as follows: Financial assets December 31, 2019 December 31, 2018 Carrying amount Fair value Carrying amount Fair value Cash and cash equivalents 2,253,210 2,253,210 3,029,191 3,029,191 Restricted cash 26,018 26,018 31,900 31,900 Trade receivables 2,353,027 2,353,027 2,052,416 2,052,416 Water National Agency – ANA 32,466 32,466 49,136 49,136 Other receivables 194,178 194,178 180,681 180,681 Additionally, SABESP has financial instrument assets receivables from related parties, in the amount of R$850,896 as of December 31, 2019 (R$843,250 as of December 31, 2018), which were calculated in accordance with the conditions negotiated between related parties. The conditions and additional information referring to these financial instruments are disclosed in Note 10 to the financial statements. Part of this balance, in the amount of R$747,579 (R$737,503 as of December 31, 2018), refers to reimbursement of additional retirement and pension plan - G0 and is indexed by IPCA plus simple interest of 0.5% p.m. This interest rate approximates that one practiced by federal government bonds (NTN-b) with terms similar to those of related-party transactions. The agreement with the municipality of Santo André was recorded considering the Level 3 fair value hierarchy, due to the fact that this transaction is unobservable under market conditions, i.e., the inputs were not based on market data. All recurring and non-recurring transactions carried out by the Company, when classified at Level 3, are assessed by SABESP’s Controllership, in order to assess unobservable data and any valuation adjustments. Financial liabilities December 31, 2019 December 31, 2018 Carrying amount Fair value Carrying amount Fair value Borrowings and financing 13,244,709 13,937,611 13,152,796 13,116,684 Accounts payables to suppliers and contractors 369,631 369,631 465,993 465,993 Services payable 474,078 474,078 454,022 454,022 Program contract commitments 377,253 377,253 373,009 373,009 Public-Private Partnership - PPP 3,293,980 3,293,980 3,413,124 3,413,124 To obtain fair value of borrowings and financing, the following criteria have been adopted: (i) Agreements with Banco do Brasil and CEF (Brazilian Federal Savings Bank) were projected until their final maturities, at contractual rates (projected TR + spread) and discounted at present value by TR x DI, both rates were obtained from B3. (ii) Debentures were projected up to the final maturity date according to contractual rates (IPCA, DI, TJLP or TR), and discounted to present value considering the future interest rate published by ANBIMA in the secondary market, or by market equivalent rates, or the Company’s share traded in the Brazilian market. (iii) BNDES loans are financial instruments valued at carrying amount plus contractual interest rate until the maturity date, and are indexed by long term interest rate – TJLP. These financing have specific characteristics and the conditions defined in the financing agreements with BNDES between independent parties, and reflect the conditions for those types of loan. In Brazil, a consolidated market of long-term debts does not exist with the same characteristics of BNDES financing, the offering of credit to the entities in general, with this long-term characteristic, usually is restricted to BNDES. (iv) Other financing in local currency are considered by carrying amount plus contractual interest rate until maturity date, discounted to present value considering a future interest rate published by B3. (v) Agreements with BID and IBRD, were projected until final maturity in origin currency, applying interest rates contracted, discounted at present value at Libor futures rate, obtained from Bloomberg. Eurobonds was priced at market value through quotes published by Bloomberg. All the amounts obtained were translated into Brazilian reais at the exchange rate of December 31, 2019. (vi) Agreements with JICA, were projected until final maturity in origin currency, using interest rates contracted and discounted at present value, at Tibor futures rate obtained from Bloomberg. The amounts obtained were translated into Brazilian reais at the exchange rate of December 31, 2019. (vii) Leases and leases based on IFRS 16 are financial instruments considered by face value restated until maturity date, whose characteristic is the indexation by fixed contractual rate. Thus, the Company discloses as market value, the amount recorded as of December 31, 2019. Financial instruments referring to investments and borrowings and financing are classified as Level 2 in the fair value hierarchy. Considering the nature of other financial instruments, assets and liabilities of the Company, except for borrowings and financing, the balances recognized in the statement of financial position approximate the fair values, taking into account the maturities close to the end of the reporting date, comparison of contractual interest rates with market rates in similar operations at the end of the reporting periods, their nature and maturity terms. |
6. Key accounting estimates and
6. Key accounting estimates and judgments | 12 Months Ended |
Dec. 31, 2019 | |
Key Accounting Estimates And Judgments | |
Key accounting estimates and judgments | The preparation of the financial statements requires management to make certain judgments and use assumptions and estimates based on experience and other factors considered relevant, which affect the values of assets and liabilities and which may present results that differ from actual results. The significant judgment made by the Company is related to the recognition of revenue. The areas that require a higher level of judgment and have greater complexity, as well as the areas in which assumptions and estimates are significant for the financial statements, are disclosed below: (a) Allowance for doubtful accounts The Company establishes an allowance for doubtful accounts in an amount that Management considers sufficient to cover expected losses (see Note 9 (c)), based on an analysis of trade receivables, in accordance with the accounting policy stated in Note 3.4. The methodology for determining the allowance for doubtful accounts receivable requires significant estimates, considering a number of factors including historical receipt experience, current economic trends, estimates of forecast write-offs, the aging of the accounts receivable portfolio and expectation of future losses. While the Company believes that the assumptions used are reasonable, actual results could be different. (b) Intangible assets arising from concession and program contracts The Company recognizes as intangible assets those arising from concession agreements. The Company estimates the fair value of construction and other work on the infrastructure to recognize the cost of the intangible asset, upon completion of the construction and provided that it will generate future economic benefits. The great majority of the Company's contracts for service concession agreements entered with each grantor is under service concession agreements in which the Company has the right to receive, at the end of the contract, a payment equivalent to the unamortized asset balance of the concession intangible asset, which in this case, are amortized over the useful life of the underlying physical assets, thus at the end of the contract, the remaining value of the intangible would be equal to the residual value of the related fixed asset. Concession intangible assets under Concession agreements, Service contracts and Program contracts, in which, at the end of the contract, the Company has no right to receive a payment equivalent to the unamortized asset balance of the concession intangible, are amortized on a straight-line basis over the useful life of asset or contract period, which occurs first. Additional information on the accounting for intangible assets arising from concession agreements are described in Notes 3.8 and 14. The recognition of fair value for the intangible assets arising on concession agreements is subject to assumptions and estimates, and the use of different assumptions could affect the balances recorded. Different assumptions and estimates and changes in the useful lives of the intangible assets may have relevant impacts on the results of operations . (c) Pension benefits The Company sponsors the defined benefit plan and the defined contribution plan, as described in Note 20. The liability recognized in the balance sheet in relation to defined benefit pension plans is the present value of defined benefit obligation on the balance sheet date, less the fair value of plan’s assets. The benefit obligation is calculated yearly by independent actuaries, applying the projected credit unit method. The present value of defined benefit obligation is determined by discounting the estimated future cash outflows, using interest rates compatible with the market, which are denominated in currency in which benefits will be paid and with maturity terms close to those of corresponding pension plan obligation . (d) Deferred income tax and social contribution The Company recognizes and settles taxes on income based on the results of operations verified according to the Brazilian Corporation Law, taking into consideration the provisions of the tax laws. The Company recognizes deferred tax assets and liabilities based on the differences between the accounting balances and the tax bases of assets and liabilities. The Company regularly reviews the recoverability of deferred tax assets and recognizes a provision for impairment if it is probable that these assets will not be realized, based on the historic taxable income, in the projection of future taxable income and the estimated period of reversing temporary differences. These calculations require the use of estimates and assumptions. The use of different estimates and assumptions could result in provision for impairment of all or a significant amount of deferred tax assets . Additional information related to deferred taxes is described in Note 18. (e) Provisions The provisions for civil, labor, environmental and tax risks are recorded based on Note 3.14. Judgments regarding future events may differ significantly from actual estimates and could exceed the amounts provisioned. Provisions are revised and adjusted to take into consideration changes in circumstances involved. Additional information of these legal proceedings are disclosed in Note 19 . |
7. Cash and cash equivalents
7. Cash and cash equivalents | 12 Months Ended |
Dec. 31, 2019 | |
Cash and cash equivalents [abstract] | |
Cash and cash equivalents | December 31, 2019 December 31, 2018 Cash and banks 176,497 151,558 Cash equivalents 2,076,713 2,877,633 Total 2,253,210 3,029,191 Cash and cash equivalents include cash, bank deposits and high-liquidity short-term financial investments, mainly represented by repurchase agreements (accruing CDI interest rates), whose original maturities are lower than three months, which are convertible into a cash amount and subject to an insignificant risk of change in value, deposited in a fund, in which SABESP is exclusive quotaholder, at Banco do Brasil. The fund is intended, exclusively, to receive funds from SABESP, and as of December 31, 2019, it was essentially composed of investments in governments bonds, repurchase agreements and fixed income financial assets. Due to SABESP is the exclusive quotaholder and has control over the fund, it should be consolidated in the Company's financial statements, however, due to the fact that 99% of the balance has already been presented in SABESP's financial statements under the items of cash and cash equivalents and the magnitude of the remaining balance, referring to the administration and maintenance expenses of the fund, is irrelevant (R$ 205), the Company chose not to present the balances between Parent Company and Consolidated due to the fact that there is no significant difference between such balances and for not generating relevant disclosure to users of the financial statements. The average yield of cash equivalents corresponds to 98.02% of CDI in December 2019 (98.28% in December 2018). |
8. Restricted cash
8. Restricted cash | 12 Months Ended |
Dec. 31, 2019 | |
Restricted Cash | |
Restricted cash | December 31, 2019 December 31, 2018 Agreement with the São Paulo municipal government (i) 17,068 19,977 Brazilian Federal Savings Bank – escrow deposits (ii) 2,245 5,880 Other 6,705 6,043 26,018 31,900 (i) Refers to the amount deducted from the 7.5% of municipal revenue transferred to the Municipal Fund, corresponding to eventual amounts unpaid by direct management bodies, foundations and government agencies, as established in the agreement entered into with the municipal government of São Paulo; and (ii) Refers to savings account for receiving escrow deposits regarding lawsuits with final and unappealable decisions in favor of the Company, which are blocked as per contractual clause. |
9. Trade receivables
9. Trade receivables | 12 Months Ended |
Dec. 31, 2019 | |
Trade Receivables | |
Trade receivables | (a) Financial position balances December 31, 2019 December 31, 2018 Private sector: General (i) and special (ii) customers 1,505,150 1,372,667 Agreements (iii) 378,341 347,679 1,883,491 1,720,346 Government entities: Municipal 472,666 575,733 Federal 2,805 3,876 Agreements (iii) 277,047 274,906 752,518 854,515 Wholesale customers – Municipal governments: (iv) Mogi das Cruzes 3,278 3,056 São Caetano do Sul 9,871 2,869 Total wholesale customers – Municipal governments 13,149 5,925 Unbilled supply 745,884 571,072 Subtotal 3,395,042 3,151,858 Allowance for doubtful accounts (1,042,015) (1,099,442) Total 2,353,027 2,052,416 Current 2,137,752 1,843,333 Noncurrent 215,275 209,083 2,353,027 2,052,416 (i) General customers - residential and small and mid-sized companies (ii) Special customers - large consumers, commercial, industries, condominiums and special billing consumers (fixed demand agreements, industrial waste, wells, etc.). (iii) Agreements - installment payments of past-due receivables, plus monetary adjustment and interest, according to the agreements. (iv) Wholesale basis customers - municipal governments - This balance refers to invoices issued as a result of services provided to municipalities, which are responsible for distributing to, billing and charging final customers. The balance presented does not include the municipality of Mauá, as it is questioning in court the tariffs charged. Therefore, SABESP did not record revenues and receivables of this municipality, due to low expectation of realization, in accordance with IFRS 15 and IFRS 9, as the Company does not believe that it is likely that it will receive the consideration it is entitled to in exchange for the services transferred to the municipalities. The historical value of unrecognized receivables from these municipalities is as follows: December 31, 2019 December 31, 2018 Wholesale customers – Municipal governments: Mauá 6 7 7,298 6 0 1 , 9 1 Santo André (*) - 1,1 6 9 Total 6 7 7,298 1,7 6 6, (*) Agreement with the municipality of Santo André On July 31, 2019, the Company entered into a debt payment and receipt with the Municipality of Santo André (“Santo André”) and the Santo André Municipal Water and Sanitation Service (SEMASA), aiming to settle SEMASA’s existing debt upon the transfer of sanitation services to SABESP for 40 years. On the same date, the São Paulo State, the Municipality of Santo André and SABESP signed the Public Service Provision Agreement of Water Supply and Sewage Services in the Municipality of Santo André, through which the São Paulo State and the Municipality of Santo André granted SABESP the right to provide services for a period of 40 years. Due to the service transfer, the Company paid R$ 70,000 to settle administrative costs and terminate the services provided by SEMASA. Additionally, R$ 90,000 was transferred in two annual installments, the first of which due 30 days after the signature of the agreement, and the second by February 28, 2020; these amounts shall be allocated to sanitation initiatives. The total amount of R$ 160,000 was recorded in intangible assets against current liabilities. From the first quarter of 2021, 4% of gross revenue earned in the municipality by SABESP, net of Cofins/Pasep, ARSESP’s Regulation, Control and Oversight Fee (TRCF) and any business charges levied on revenue, will be allocated to environmental sanitation, housing, drainage and other urban infrastructure services in the Municipality. Receivables mentioned above, that were discussed in court, in the form of registered warrants, will be held as collateral of compliance with the Adjustment Instrument. The payment of the registered warrants will be suspended during the term of the Decree. The will be progressively reduced according to the following rules: · Until the seventh (7 th · After the seventh (7 th th · After the twelfth (12 th th · After the twenty-seventh (27 th th · After the thirty-fifth (35 th th The measurement of the non-recurring fair value for the transaction with Santo André was categorized within level 3 of the fair value hierarchy, in its initial recognition, in the amount of R$ 1,336,908. The Company considered the discounted cash flow technique to carry out the evaluation, based on the judgment that the market participants could and / or should apply. The discounted cash flow considered the present value of the net cash flows expected to be generate with the Company’s assumption water supply and sewage services for a period of 40 years, taking into consideration the following unobservable inputs: • Average tariff and average volume of water and sewage by economy based on SEMASA’s average consumption histogram, referring to the period between January and December 2018; • Indirect revenues based on historical data of the municipalities operated by SABESP in the Metropolitan Region of São Paulo; • Average unit cost of the Metropolitan Region of São Paulo with synergy, due to economies of scale and the use of existing structures at SABESP (administrative and operational); • Personnel costs - in the first two years, considering the payment of employees assigned by SEMASA; • Costs and investments in the integrated metropolitan supply system prorated based on the volume of water supplied to the municipality; • Exclusive investments by the municipality following the Municipal Sanitation Plan; • Complementary investments to be made by the municipality and paid by SABESP, corresponding to na installment of R$ 90 million in the first year, plus 4% of net revenue as of the second year; • Projected cash flow discount rate - 8.11% per year (WACC). (b) The aging of trade receivables is as follows December 31, 2019 December 31, 2018 Current 1,762,606 1,449,927 Past-due: Up to 30 days 330,488 330,310 From 31 to 60 days 164,913 145,153 From 61 to 90 days 86,765 83,679 From 91 to 120 days 58,971 54,486 From 121 to 180 days 81,003 89,740 From 181 to 360 days 33,206 44,856 Over 360 days 877,090 953,707 Total past-due 1,632,436 1,701,931 Total 3,395,042 3,151,858 The increase in the current balance was mainly due to the assumption of the provision of sanitation services to the municipalities of Guarulhos and Santo André, as well as by the 4.39% tariff increase. (c) Allowance for doubtful accounts December 31, 2019 December 31, 2018 December 31, 2017 Balance at beginning of the year 1,099,442 1,067,973 1,068,747 Private sector /government entities 54,064 61,315 75,973 Recoveries (111,491) (29,846) (76,747) Net additions for the year (57,427) 31,469 (774) Balance at the end of the year 1,042,015 1,099,442 1,067,973 Reconciliation of estimated/historical losses of income December 31, 2019 December 31, 2018 December 31, 2017 Write-offs (179,929) (184,555) (171,729) (Losses)/reversal with state entities - related parties (5,597) 1,294 21,510 (Losses) with private sector / government entities (54,064) (61,315) (75,973) (Losses)/reversal with wholesale customers - (29,458) 9,781 Recoveries 111,491 107,307 133,730 Amount recorded expense (128,099) (166,727) (82,681) The Company does not have customers representing 10% or more of its total revenues. |
10. Related-party balances and
10. Related-party balances and transactions | 12 Months Ended |
Dec. 31, 2019 | |
Related party transactions [abstract] | |
Related-party balances and transactions | (a) Accounts receivable, interest on capital payable, revenue and expenses with GESP December 31, 2019 December 31, 2018 Accounts receivable Current: Sanitation services (i) 131,851 122,522 Allowance for losses (i) (39,417) (33,820) Reimbursement for retirement and pension benefits paid (G0): - monthly flow (payments) (ii) and (vi) 31,584 22,926 - GESP Agreement – 2015 (iv) 68,888 62,520 Total current 192,906 174,148 Noncurrent: Agreement for the installment payment of sanitation services 10,883 17,045 Reimbursement for retirement and pension benefits paid (G0): - GESP Agreement – 2015 (iv) 647,107 652,057 Total noncurrent 657,990 669,102 Total receivables from shareholders 850,896 843,250 Assets: Sanitation services 103,317 105,747 Reimbursement of additional retirement and pension benefits (G0) 747,579 737,503 Total 850,896 843,250 Liabilities: Interest on capital payable to related parties 401,963 338,407 2019 2018 2017 Revenue from sanitation services 556,574 501,146 462,989 Payments received from related parties (546,365) (509,672) (471,081) Receipt of GESP reimbursement referring to Law 4,819/58 (152,112) (173,516) (192,889) (i) Sanitation services The Company provides water supply and sewage services to the São Paulo State Government and other companies related to it in accordance with usual market terms and conditions, as considered by management, except for the settlement of credits which can be made according to items (iii) of this Note. The Company recognized R$39,417 as of December 31, 2019 (R$33,820 as of December 31, 2018 and R$35,114 as of December 31, 2017) as allowance for losses in accordance of IFRS 9. (ii) Reimbursement of additional retirement and pension benefits paid Refers to amounts of supplementary retirement and pension benefits provided for in State Law 4,819/58 ("Benefits") paid by the Company to former employees and pensioners, referred to as Go. Under the Agreement referred on item (iii) GESP recognizes its liability from charges arising from the Benefits, provided that the payment criteria set forth by the State Department of Personnel (DDPE), based on legal guidance of the Legal Consultancy of the Department of Finance and of the State Attorney General's Office (PGE). As discussed on item (vi), during the assessment of the debt due from GESP to the Company there were certain divergences in the calculation and eligibility criteria of the benefits paid by the Company on behalf of GESP. See additional information about the Go plan in Note 20 (b) (iii). In January 2004, the payments of supplement retirement and pension benefits were transferred to the Department of Finance and would be made in accordance with the calculation criteria determined by the PGE. As a result of a court decision, the responsibility for making the payments returned to SABESP, as originally established. (iii) GESP Agreement On December 11, 2001, the Company, the São Paulo State Government (through the State Department of Finance Affairs, currently Department of Finance) and the Water and Electricity Department (DAEE), with the intermediation of the State Department of Sanitation and Energy (former Department of Water Resources, Sanitation and Construction Works), entered into the Obligations, Payment Commitment and Other Covenants Acknowledgement and Consolidation Agreement ("GESP Agreement") for the settlement of outstanding debts between GESP and the Company related to sanitation services and to the retirement benefits. In view of the strategic importance of the Taiaçupeba, Jundiaí, Biritiba Mirim, Paraitinga and Ponte Nova reservoirs for ensuring and maintaining the Alto Tietê water volume, the Company agreed to receive them as partial repayment of the reimbursement related to the Benefits. The DAEE would transfer the reservoirs to the Company, replacing the amount owed by GESP. However, the São Paulo State Public Prosecution Office challenges the legal validity of this agreement, and its main argument is the lack of bidding and the absence of a specific legislative authorization for disposal of DAEE's assets. There is an unfavorable decision to SABESP not yet unappealable. See additional information in item (iv) below. On March 22, 2004, the Company signed the first amendment to the GESP Agreement, settling the amounts due by the São Paulo State Government for water supply and sewage services provided, monetarily adjusted through February 2004; and formally authorizing the offset of amounts due by the São Paulo State Government with interest on capital declared by the Company and any other debt owed to the São Paulo State Government as of December 31, 2003, monetarily adjusted through February 2004; and defining the payment conditions of the remaining liabilities of the São Paulo State Government for the receipt of the water supply and sewage services. On December 28, 2007, the Company and the São Paulo State Government, represented by the Department of Finance, signed the second amendment to the terms of the original GESP Agreement, agreeing upon the payment in installments of the remaining balance of the First Amendment. In December 2012 the last installment was paid. On November 17, 2008, GESP, SABESP and DAEE signed the third amendment to the GESP Agreement, through which GESP recognized a debt balance payable to SABESP of R$915,251, monetarily adjusted until September 2008 in accordance with the fluctuation of the IPCA-IBGE, corresponding to the Undisputed Reimbursement, determined by FIPECAFI. SABESP accepted on a provisional basis the reservoirs as part of the payment of the Undisputed Reimbursement and offered to GESP a provisional settlement, recognizing a credit totaling R$696,283, corresponding to the value of the reservoirs in the Alto Tietê system. The Company did not recognize the reimbursement receivable of R$696,283 related to the reservoirs, as it is not virtually certain that will be transferred by the State. In March 2015, Sabesp and GESP entered into an agreement to pay the amounts receivable, totaling R$696,283 (more information in item (iv) of this note). In addition, the third amendment provides for the regularization of the monthly flow of benefits. While SABESP is liable for the monthly payment of benefits, the State shall reimburse SABESP based on the criteria identical to those applied when determining the Undisputed Reimbursement. Should there be no preventive court decision, the State will assume the flow of monthly payment of benefits portion deemed as undisputed. (iv) Agreement with the São Paulo State Government entered into in 2015 On March 18, 2015, the Company, the State of São Paulo and the Department of Water and Electricity (DAEE), and the Sanitation and Water Resources Department as the intervening party, entered into a Term of Agreement in the amount of R$1,012,310, of which R$696,283 refer to the principal of the Undisputed Amount mentioned in item (iii) and R$316,027 corresponding to the inflation adjustment of the principal until February 2015. The Principal Amount will be paid in 180 installments, as follows: · The first 24 installments were settled by immediately transferring 2,221,000 preferred shares issued by Companhia de Transmissão de Energia Elétrica Paulista - CTEEP, totaling R$87,174, based on the share closing on March 17, 2015, which were sold on April 20, 2016; and · The amount of R$609,109, payable in 156 monthly installments, was adjusted by IPCA (Extended Consumer Price Index) until the initial payment date, on April 5, 2017. As of this date, installments are being adjusted by IPCA plus simple interest of 0.5% per month. Considering the lawsuit which objects the possibility of transferring the reservoirs is pending final and unappealable court decision, the agreement also provides for the following situations: · If transfer is possible and the Reservoirs are effectively transferred to SABESP and registered at the notary’s office, SABESP will reimburse to the State the amounts paid in replacement of Reservoirs (Principal Amount) in 60 monthly installments adjusted by IPCA until the date of payment of each installment; and · If the transfer of Reservoirs is not possible, the State will pay to SABESP, in addition to the Principal Amount, the inflation adjustment credit of R$316,027 in 60 installments, starting these payments at the end of Principal Amount installment payment. The amount will be adjusted by IPCA to the start date of payments and, as of this date, IPCA will be incurred plus 0.5% simple interest rates/month over the amount of each installment. As of December 31, 2019, the balance receivable totaled R$ 68,888 in current assets (R$ 62,520 as of December 31, 2018) and R$ 647,107 in noncurrent assets (R$ 652,057 December 31, 2018). (v) Disputed Amounts As mentioned before, on November 17, 2008 the Company and the State signed the third amendment to the GESP Agreement, when the reimbursements called disputed and undisputed were quantified. The amendment established the efforts to calculate the so-called Disputed Reimbursement of the Benefits. Under the fourth clause of the amendment, the Disputed Reimbursement represents the difference between the Undisputable Reimbursement and the amount actually paid by the Company as pension benefits and pensioners set out in Law 4,819/58, for which, the Company understands, the State of São Paulo is originally liable, but paid by SABESP under a court order. By entering into the third amendment, the State's Legal Representative (PGE) agreed to reassess the differences that gave rise to the Disputed Amount of benefits set out in Law 4,819/58. At the time, the expectation was based on the willingness of the PGE to reanalyze the issue and the implied right of the Company to the reimbursement, including based on opinions from outside legal advisors. However, the latest opinions issued by the PGE and received on September 4 and 22, 2009 and January 4, 2010, refute the reimbursement of previously defined as Disputed Amount. Even though the negotiations with the State are still in progress, it is not possible to assure that the Company will recover the disputed receivables without dispute. As part of the actions intended to recover the receivables that management considers due by the State, related to discrepancies in the reimbursement of the pension benefits paid by the Company, SABESP: (i) on March 24, 2010, reported to the controlling shareholder the official letter approved by the executive committee, proposing that the matter be discussed at the São Paulo Stock Exchange (B3) Arbitration Chamber; (ii) in June 2010, presented to Department of Finance a proposal to solve the outstanding items, such proposal was not accepted; (iii) on November 9, 2010, filed a judicial action against the State of São Paulo pleading the entire reimbursement related to employee benefits set out in Law 4,819/58 to finalize the discussion between the Company and GESP. Despite the legal action, the expectation of which is a possible gain, the Company will persist to obtain an agreement with GESP since the management believes that it is the best course of action to the Company and to its shareholders than waiting until the end of the lawsuit. As of December 31, 2019 and 2018, the disputed amounts between SABESP and GESP, corresponding to additional retirement and pension benefits paid (Law 4,819/1958), totaled R$ 1,195,217 and R$ 1,107,104, respectively. The Company recorded allowances for doubtful accounts for such amounts. (vi) Actuarial liability The Company also recognized an actuarial liability corresponding to additional retirement and pension benefits paid to employees, retired employees and pensioners of Plan G0. As of December 31, 2019 and 2018, the amounts corresponding to the actuarial liability totaled R$ 3,046,255 and R$ 2,606,107, respectively. For more information on additional retirement and pension benefits, see Note 20 (b). (b) Use of reservoirs – EMAE Empresa Metropolitana de Águas e Energia S.A. - EMAE planned to receive for the credit and obtain financial compensation for alleged past and future losses in electricity generation, due to water collection, and compensation for costs already incurred and to be incurred with the operation, maintenance and inspection of the Guarapiranga and Billings reservoirs used by SABESP in its operations. On October 28, 2016, the Company entered into an agreement based on a Private Transaction Agreement and Other Adjustments aimed to fully and completely settle the disputes involving the two companies and the SABESP will continue using the reservoirs. As of December 31, 2019, the Company recorded R$16,653 and R$87,231 in Other Liabilities, under current and noncurrent liabilities, respectively (in December 31, 2018, R$16,055 and R$90,518). In 2019, the Company paid the amount of R$17,246. (c) Agreements with reduced tariffs with State and Municipal Government Entities that joined the Rational Water Use Program (PURA) The Company has signed agreements with government entities related to the State Government and municipalities where it operates that benefit from a reduction of 25% in the tariff of water supply and sewage services when they are not in default. These agreements provide for the implementation of the rational water use program, which takes into consideration the reduction in water consumption. (d) Guarantees The State Government provides guarantees for some borrowings and financing of the Company and does not charge any fee with respect to such guarantees. (e) Personnel assignment agreement among entities related to GESP The Company has personnel assignment agreements with entities related to the State Government, whose expenses are fully passed on and monetarily reimbursed. In 2019, the expenses related to personnel assigned by SABESP to other state government entities amounted to R$4,881 (R$8,903 in 2018 and R$9,853 in 2017). In 2019, the expenses related to personnel assigned by other entities to SABESP were R$ 139 (In 2018, the expenses related to personnel assigned by other entities to SABESP were R$ 116 and in 2017 there were no expenses related to personnel assigned by other entities to SABESP). (f) Non-operating assets As of December 31, 2019, the Company had an amount of R$3,613 related to a land and lent structures (as of December 31, 2018 – R$ 969). (g) SABESPREV The Company sponsors a private defined benefit pension plan (G1 Plan), which is operated and administered by SABESPREV. The net actuarial liability recognized as of December 31, 2019 amounted to R$314,677 (R$363,902 as of December 31, 2018), according to Note 20 (b). (h) Compensation of Management Key Personnel - Compensation: SABESP's compensation policy for the Management and officers is set out according to guidelines of the São Paulo State Government, issued by the CODEC (State Capital protection Board), and are based on performance, market competitiveness, or other indicators related to the Company's business, and is subject to approval by shareholders at an Annual Shareholders' Meeting. The Executive Officers’ fees are also defined by government authorities. Management and Fiscal Council’s compensation is equivalent to 30% and 20%, respectively, of the Executive Officers’ fee, contingent on attendance of at least one monthly meeting. The objective of the compensation policy is to set a private sector management paradigm to retain its staff and recruit competent, experienced and motivated professionals, considering the level of management efficiency currently required by the Company. In addition to the monthly fee, the members of the Board of Directors, Fiscal Council and the Board of Executive Officers receive annual reward equivalent to a monthly fee, calculated on a prorated basis in December of each year. The purpose of this reward is to correspond to the thirteenth salary paid to the Company’s employees, as officers and directors' relationship with the Company is governed by its bylaws and not the labor code. Benefits paid only to Statutory Officers - meal ticket, basket of food staples, medical care, annual paid rest typified as a paid leave of 30 calendar days, and payment of a premium equivalent to one third of the monthly fee and bonuses. SABESP pays bonuses for the purposes of compensating Executive Officers, in accordance with the guidelines of the São Paulo State Government, as an incentive policy, as long as the Company records quarterly, semiannual, and yearly profits, and distributes mandatory dividends to shareholders, even if in the form of interest on capital. Annual bonuses cannot exceed six times the monthly compensation of the officers/directors or 10% of the interest on capital paid by the Company, prevailing the shortest amount. Expenses related to the compensation to the members of its Board of Directors, Fiscal Council and Board of Executive Officers amounted to R$5,344, R$4,077 and R$3,813 for 2019, 2018 and 2017, respectively. An additional amount of R$1,348, related to the bonus program, was recorded in 2019 (R$538 in 2018 and R$556 in 2017). (i) Loan agreement through credit facility The Company holds interest in certain Special Purpose Entities (SPEs), not holding the majority interest but with cast vote and power of veto in some issues, with no ability to use such power of veto in a way to affect returns over investments. Therefore, these SPEs are considered for accounting purposes as joint arrangements. The Company entered into a loan agreement through credit facility with the SPE Aquapolo Ambiental S/A to finance the operation of this company, until the borrowings and financing requested with financial institutions is granted. As of December 31, 2019, the balance of principal and interest related to this agreement was R$ 34,992, recorded in Noncurrent Assets under "Other Accounts Receivables" (December 31, 2018 - R$ 32,857) with interest at the CDI rate + 1.2% per year. The loan agreement originally matured on April 30, 2015 but was extended to October 30, 2015 and on November 25, 2015 a new amendment changed the payment schedule for three annual installments, the first of which maturing on December 30, 2021 and the last on December 30, 2023. (j) “Se Liga na Rede” (Connect to the Network Program) The State Government enacted the State Law no. 14,687/1912, creating the pro-connection program, destined to financially subsidize the execution of household branches necessary to connect to the sewage collecting networks, in low income households which agreed to adhere to the program. The program expenditures, except for indirect costs, construction margin and borrowing costs are financed with 80% of funds deriving from the State Government and the remaining 20% invested by SABESP, which is also liable for the execution of works. As of December 31, 2019, the program total amount was R$117,272 (R$100,928 as of December 31, 2018), there was no balance receivable as of December 31, 2019 and 2018 from related parties. The amount of R$65,099 (R$49,919 as of December 31, 2018) was recorded in the group of intangible assets and R$52,174 was reimbursed by GESP (R$51,009 as of December 31, 2018) from the beginning of the program until December 31, 2019. |
11. Investments
11. Investments | 12 Months Ended |
Dec. 31, 2019 | |
Investments Abstract | |
Investments | The Company holds interest in certain Special Purpose Entities (SPE). Although SABESP has no majority shares of its investees, the shareholders’ agreement provides for the power of veto in certain management issues, however, with no ability to use such power of veto in a way to affect returns over investments, indicating participating shared control (joint venture – IFRS 11). The Company holds interest recognized by the equity accounting in the following investees: Sesamm As of August 15, 2008, the Company, together with GS Inima Brasil Ltda (“GS Inima”), successor of Técnicas y Gestion Medioambiental S.A.U. (“TGM”) and GS Inima Environment S/A (currently OHL Medio Ambiente); and Estudos Técnicos e Projetos ETEP Ltda. (“ETEP”), succeeded by ECS Operações e Participações Ltda (“ECS”), incorporated Sesamm – Serviços de Saneamento de Mogi Mirim S/A for a period of 30 years from the date the concession agreement with the municipality for the purpose of providing complementary services to the sewage diversion system and implementing and operating sewage treatment system in the municipality of Mogi Mirim, including the disposal of solid waste. On October 30, 2019, ECS shares were transferred to GS Inima Brasil, after the transfer SABESP continues to hold a 36% interest and GS Inima has increased to 64%. Sesamm's capital as of December 31, 2019, totaled R$ 19,532, and was represented by 19,532,409 registered common shares without a par value. The operations initiated in June 2012. Águas de Andradina As of September 15, 2010, the Company, together with Companhia de Águas do Brasil – Cab Ambiental, currently Iguá Saneamento S/A (“Iguá”), incorporated Águas de Andradina S.A., with indefinite term, for the purpose of providing water supply and sewage services to the municipality of Andradina. As of December 31, 2019, the capital of Águas de Andradina totaled R$ 17,936, divided into 17,936,174 registered common shares without a par value. SABESP holds 30% of its equity interest and Iguá 70%. The amount of R$ 12 is recorded under investee’s equity, as advance for future capital increase. The Company pledges as guarantee 100% of its shares in Águas de Andradina as a counter guarantee for the issuance of Letters of Guarantee with BNDES. The operations initiated in October 2010. Águas de Castilho As of October 29, 2010, the Company, together with Águas do Brasil – Cab Ambiental, currently Iguá Saneamento S/A (“Iguá”), incorporated Águas de Castilho, for the purpose of providing water supply and sewage services to the municipality of Castilho. As of December 31, 2019, the company’s capital was R$ 2,785, and was represented by 2,785,225 registered shares without a par value. SABESP holds a 30% interest and Iguá 70%. The Company pledges as guarantee 100% of its shares in Águas de Castilho as a counter guarantee for the issuance of Letters of Guarantee with BNDES. The operations initiated in January 2011. Saneaqua Mairinque As of June 14, 2010, the Company, together with BRK Ambiental Participações S/A (“BRK”) currently Odebrecht Utilities S/A, former Foz do Brasil S.A., incorporated Saneaqua Mairinque S/A, with indefinite term, for the purpose of exploring water supply and sewage services of the municipality of Mairinque. As of December 31, 2019, the capital of Saneaqua Mairinque totaled R$ 4,183, and was represented by 3,141,239 registered common shares without a par value. SABESP holds a 30% interest and BRK 70%. As guarantee for the financing for Saneaqua Mairinque, the Company pledges 100% of its shares in said company.. The operations initiated in October 2010. Attend Ambiental As of August 23, 2010, SABESP, jointly with Companhia Estre Ambiental S.A. (“Estre”), incorporated Attend Ambiental S.A., for constructing and operating a pretreatment of non-domestic effluent station, sludge transportation and related services in the city of São Paulo as well as implement similar structures in other areas in Brazil and abroad. In 2019, the investee received a capital contribution in the amount of R$ 24,277, through the issuance of 24,277,245 new registered common shares with no par value, through the conversion of the total credits held by the shareholders against the Company, resulting from Loan Agreements. As of December 31, 2019, the capital totaled R$ 37,677, and was represented by 37,677,245 registered common shares without a par value. SABESP holds a 45% interest and Estre 55%. The operations initiated in December 2014. Aquapolo Ambiental S/A. As of October 8, 2009, the Company, together with Odebrecht Utilities S/A, formerly Foz do Brasil S.A., incorporated Aquapolo Ambiental S.A., for the purpose of producing, providing and trading reused water for Quattor Química S.A., Quattor Petroquímica S.A., Quattor Participações S.A. and other companies comprising the Petrochemical Complex of Capuava and the metropolitan region of São Paulo. As of December 31, 2019, the capital of Aquapolo totaled R$ 36,412, and was represented by 42,419,045 registered common shares without a par value. SABESP holds 49% of its equity interest. The Company pledges as guarantee to the loan acquired through the issuance of debentures, 100% of its shares in Aquapolo Ambiental S/A. The operations initiated in October 2012. Paulista Geradora de Energia As of April 13, 2015, the Company acquired shares from Empresa Paulista Geradora de Energia S/A - PGE, jointly with Servtec Investimentos e Participações Ltda ("Servtec) and Tecniplan Engenharia e Comércio Ltda ("Tecniplan"), which operational purpose is the implementation and commercial exploration of water potential in small hydroelectric power plants (PCHs), located at the Guaraú and Vertedouro Cascata Water Treatment Stations. As of December 31, 2019, the capital of Paulista Geradora de Energia was R$ 8,679, represented by 8,679,040 registered common shares without a par value, in which SABESP holds a 25% interest, Servtec holds 37.5% and Tecniplan 37.5%. As of December 31, 2019, operations had not initiated yet. Below is a summary of the investees’ financial information and SABESP’s equity interest: Company Equity Capital increase Dividends distributed Other Comprehensive Income Profit (loss) for the year 2019 2018 2017 2019 2019 2019 2019 (*) 2018 2017 Sesamm 45,923 43,547 39,262 - (2,042) - 6,485 (2,067) 5,621 2,707 Águas de Andradina (i) 30,065 24,832 19,392 - (2,038) - 7,070 201 2,407 4,471 Águas de Castilho 7,242 6,084 4,880 - (609) - 1,648 119 1,001 933 Saneaqua Mairinque 4,783 5,720 4,327 - (11) (55) (867) (4) (790) 390 Attend Ambiental 7,486 1,426 5,169 24,277 - - (17,781) (436) (3,743) 1,324 Aquapolo Ambiental 37,772 30,170 18,757 - (8,681) - 16,283 - 11,413 6,470 Paulista Geradora de Energia 7,144 7,625 8,447 - - - (481) - (822) (22) Company Investments Capital increase Dividends distributed Other Comprehensive Income Equity in the earnings of subsidiaries Interest percentage 2019 2018 2019 2019 2019 2019 (*) 2018 2017 2019 2018 2017 Sesamm 16,533 15,677 - (735) - 2,335 (744) 2,023 975 36% 36% 36% Águas de Andradina 9,020 7,450 - (611) - 2,121 60 722 729 30% 30% 30% Águas de Castilho 2,172 1,826 - (183) - 493 36 300 287 30% 30% 30% Saneaqua Mairinque 1,434 1,716 - (3) (17) (260) (2) (237) 71 30% 30% 30% Attend Ambiental 3,369 642 10,925 - - (8,002) (196) (1,684) 560 45% 45% 45% Aquapolo Ambiental 18,508 14,783 - (4,254) - 7,979 - 5,592 3,144 49% 49% 49% Paulista Geradora de Energia 1,786 1,905 - - - (119) - (206) (6) 25% 25% 25% Total 52,822 43,999 10,925 (5,786) (17) 4,547 (846) 6,510 5,760 Other investments 365 588 Overall total 53,187 44,587 (*) Refer to changes in the equity of investees, as their financial statements for the year ended December 31, 2018 were issued, including some adjustments, after the Company’s financial statements. |
12. Investment properties
12. Investment properties | 12 Months Ended |
Dec. 31, 2019 | |
Investment property [abstract] | |
Investment properties | December 31, 2018 Transfers Depreciation December 31, 2019 Investment properties 47,620 (9) (49) 47,562 December 31, 2017 Write-offs and disposals Transfers Depreciation December 31, 2018 Investment properties 57,652 (9,995) 13 (50) 47,620 December 31, 2016 Write-offs and disposals Depreciation December 31, 2017 Investment properties 57,968 (244) (72) 57,652 As of December 31, 2019 and 2018, the market value of these properties is approximately R$386,000. |
13. Contract assets
13. Contract assets | 12 Months Ended |
Dec. 31, 2019 | |
Contract assets [abstract] | |
Contract assets | Contract assets (works in progress) is the right to consideration in exchange for goods or services transferred to customers. As established by IFRS 15 - Revenue from contract with customers, assets related to the concession under construction, recorded under the scope of IFRIC 12 – Service Concession Arrengements, should be classified as Contract Assets during the construction period and transferred to Intangible Assets only after the completion of the works. A contract assets is initially recognized at fair value and includes borrowing costs capitalized during the period when the asset is under construction, based on the weighted average rate of borrowings in effect on the capitalization date, as described in Note 14. As of December 31, 2019, the amount recorded as contract assets was R$ 7,618 million, and the largest works are located in the municipalities of São Paulo, Praia Grande and São Bernardo do Campo, in the amounts of R$ 3,593 million, R$ 338 million and R$ 330 million, respectively. Additionally, R$ 3,328 million was transferred to intangible assets (under book value); the most significant work is the expansion of the Barueri Sewage Treatment Station, while the largest additions of the period are located in the municipalities of São Paulo, Praia Grande and São Bernardo do Campo, in the amounts of R$ 1,790 million, R$ 212 million and R$ 151 million, respectively. December 31, 2018 Additions Write-offs Transfers Transfers of works to intangible assets December 31, 2019 Total contract assets (*) 7,407,948 3,532,283 (4,910) 10,710 (3,328,317) 7,617,714 * As of December 31, 2019, contract assets includes leases recognized before December 31, 2018 in accordance with IAS 17 amounting to R$ 276,893 (R$ 265,671 as of December 31, 2018). January 1, 2018 Additions Transfers of works to intangible assets December 31, 2018 Total contract assets 10,387,715 3,188,943 (6,168,710) 7,407,948 |
14. Intangible assets
14. Intangible assets | 12 Months Ended |
Dec. 31, 2019 | |
Intangible assets other than goodwill [abstract] | |
Intangible assets | (a) Statement of financial position details December 31, 2019 December 31, 2018 Cost Accumulated amortization Net Cost Accumulated amortization Net Intangible right arising from: Concession agreements – equity value 2,066,459 (571,606) 1,494,853 5,465,206 (1,391,862) 4,073,344 Concession agreements – economic value 1,334,531 (621,679) 712,852 1,948,255 (716,246) 1,232,009 Program contracts 19,413,768 (5,594,068) 13,819,700 12,710,937 (3,933,008) 8,777,929 Program contracts – commitments 1,651,434 (286,559) 1,364,875 1,320,106 (240,555) 1,079,551 Services contracts – São Paulo 19,217,091 (4,826,328) 14,390,763 17,474,797 (4,083,345) 13,391,452 Software license of use 829,739 (358,033) 471,706 748,962 (290,787) 458,175 Right of use 113,233 (42,535) 70,698 - - - Total 44,626,255 (12,300,808) 32,325,447 39,668,263 (10,655,803) 29,012,460 (b) Changes December 31, 2018 First-time adoption of IFRS 16 Addition Contract renewal Transfer to indemnities receivable Transfer of contract assets Transfers Write-offs and disposals Amortization December 31, 2019* Intangible right arising from: Concession agreements – equity value (*) 4,073,344 - 2 (2,690,660) (4,345) 131,809 76,804 (8,311) (83,790) 1,494,853 Concession agreements – economic value 1,232,009 - 2,034 (532,173) - 89,041 1,956 (569) (79,446) 712,852 Program contracts (*) 8,777,929 - 1,338,443 3,223,773 - 970,534 137,283 (10,312) (617,950) 13,819,700 Program contracts – commitments 1,079,551 - 331,328 - - - - - (46,004) 1,364,875 Services contracts – São Paulo 13,391,452 - 3,867 (940) - 2,054,940 (228,583) (20,739) (809,234) 14,390,763 Software license of use 458,175 - - - - 81,993 (991) - (67,471) 471,706 Right of use - Other assets - 64,955 48,278 - - - - - (42,535) 70,698 Intangible right arising from: 29,012,460 64,955 1,723,952 - (4,345) 3,328,317 (13,531) (39,931) (1,746,430) 32,325,447 (*) As of December 31, 2019, intangible assets includes leases recognized before December 31, 2018 in accordance with IAS 17 amounting to R$ 292,824 - (R$ 315,717 as of December 31, 2018 – R$ R$ 98,077 recognized as concession agreements – equity value and R$ 217,640 recognized as program contracts). December 31, 2017 Transfers to contract assets (*) Additions Contract renewal Transfers of works (**) Transfers Write-offs and disposals Amortization December 31, 2018 Intangible right arising from: Concession agreements – equity value 7,141,614 (1,427,046) 93 (1,935,780) 499,002 (5,268) (1,406) (197,865) 4,073,344 Concession agreements – economic value 1,433,937 (233,361) 373 - 114,442 88 (1,031) (82,439) 1,232,009 Program contracts 7,595,066 (2,019,461) 928,818 1,935,780 681,742 3,011 (7,616) (339,411) 8,777,929 Program contracts – commitments 910,375 - 206,946 - - - - (37,770) 1,079,551 Services contracts – São Paulo 15,917,015 (6,707,847) 3,724 - 4,818,734 12 (14,813) (625,373) 13,391,452 Software license of use 468,125 - 4,774 - 54,790 686 - (70,200) 458,175 Total 33,466,132 (10,387,715) 1,144,728 - 6,168,710 (1,471) (24,866) (1,353,058) 29,012,460 (*) Work in progress transferred to contract assets due to adoption of IFRS 15, as of January 1, 2018, as described in Note 4.1. (**) Work in progress transferred from contract assets to intangible assets. December 31, 2016 Additions Contract renewal Reversal of estimated losses Transfers Write-offs and disposals Amortization December 31, 2017 Intangible right arising from: Concession agreements – equity value 7,482,955 374,775 (531,818) 2,078 1,663 (2,795) (185,244) 7,141,614 Concession agreements – economic value 1,381,652 142,429 - 8 2,604 (1,163) (91,593) 1,433,937 Program contracts 6,576,021 772,278 531,818 4,834 (1,784) (6,606) (281,495) 7,595,066 Program contracts – commitments 823,216 121,313 - - - - (34,154) 910,375 Services contracts – São Paulo 14,552,707 1,976,079 - 6,460 (18,346) (13,848) (586,037) 15,917,015 Software license of use 430,237 103,424 - - 6,489 - (72,025) 468,125 Total 31,246,788 3,490,298 - 13,380 (9,374) (24,412) (1,250,548) 33,466,132 In 2019, the Company renewed the program contract with the municipalities of Águas de São Pedro, Alambari, Bertioga, Caraguatatuba, Espírito Santo do Turvo, Guarujá, Itanhaém, Lavrinhas, Mongaguá, Nazaré Paulista, Oriente, Paraguaçu Paulista, Pedra Bela, Peruíbe, São Bernardo do Campo, São Sebastião e Vargem. The Company also started operations in the municipality of Santo André. All of these contracts are valid for 30 years, except for the contracts signed with São Bernardo do Campo and Santo André, which are valid for 40 years. In October 2019, the Company signed a contract with the municipality of Tapiratiba, to begin operating in April 2020. (c) Intangible arising from concession agreements The Company operates public utility service concession agreements for water supply and sewage services mostly based on agreements that set out rights and obligations relative to the exploration of assets related to the public utility service (See Note 3.8 (a)). A general obligation also exists to return the concession infrastructure to the concession grantor in good working condition at the end of the concession. As of December 31, 2019, the Company operated in 372 municipalities in the State of São Paulo (369 as of December 31, 2018). Most of these contracts have a 30-year concession period. The services provided by the Company are billed at a price regulated and controlled by São Paulo State Sanitation and Energy Regulatory Agency (ARSESP). Intangible rights arising from concession agreements include: (i) Concession agreements – equity value These refer to municipalities assumed until 2006, except for the municipalities assumed by economic value through assets valuation report prepared by independent experts. The amortization of assets is calculated according to the straight-line method, which considers the assets useful life. (ii) Concession agreements – economic value From 1999 through 2006, the negotiations for new concessions were conducted on the basis of the economic and financial result of the transaction, determined in a valuation report issued by independent appraisers. The amount determined in the related contract, after the transaction is closed with the municipal authorities, realized through the subscription of the Company's shares or in cash, is recorded as "concession agreements" and amortized over the period of the related concession (usually 30 years). As of December 31, 2019 and 2018 there were no amounts pending related to these payments to the municipalities. Intangible assets are amortized on a straight-line basis over the period of the concession agreements or for the useful lives of the underlying assets, whichever is shorter. (iii) Program contracts These refer to the renewal of contracts previously referred to as concession agreements whose purpose is to provide sanitation services. The amortization of the assets acquired until the dates of signatures of the program contracts is calculated according to the straight-line method, which considers the assets’ useful lives. Assets acquired or built after the signature dates of program contracts are amortized during the contracted period (mostly, 30 years) or during the useful lives of underlying assets, whichever is shorter. (iv) Program contracts - Commitments After the enactment of the regulatory framework in 2007, renewals of concessions started to be made through of program contracts. In some of these program contracts, the Company undertook the commitment to financially participate in social and environmental actions. The assets built within the program contracts are recorded as intangible assets and are amortized by the straight-line method in accordance with the duration of the program contract (mostly, 30 years). As of December 31, 2019 and 2018, the amounts not yet disbursed were recorded under “program contract commitments”, in current liabilities, totaling R$ 273,932 and R$ 230,695, respectively, and in noncurrent liabilities, totaling R$ 103,321 and R$ 142,314, respectively. In 2019, the annual rate of 8.11% (WACC) was applied to calculate the present value adjustment of these contracts. (v) Services agreement with the Municipality of São Paulo On June 23, 2010, the Company entered into an agreement with the State of São Paulo and the Municipality of São Paulo to regulate the provision of water and sewage services in the municipality of São Paulo for a 30-year period, which is extendable for an another 30-year period. Also on June 23, 2010, an agreement was signed between the state and municipal government, and SABESP and the Sanitation and Energy Regulatory Agency of the State of São Paulo (“ARSESP”) are the consenting and intervening parties, whose main aspects are the following: 1. The State and the Municipality of São Paulo grant to SABESP the right to explore the sanitation services in the capital of the State of São Paulo, which consists of the obligation to provide such service and charge the respective tariff for this service; 2. The State and the Municipality sets forth ARSESP as the agency responsible for regulating the tariff, controlling and monitoring the services. 3. The evaluation model of the contract was the discounted cash flow, which considered the financial and economic sustainability of SABESP’s operations in the metropolitan region of São Paulo; 4. All operating costs, taxes, investments and the opportunity cost of investors and the creditors of SABESP’s were considered in the cash flow analysis; 5. The agreement provides for investments established in the agreement comply with the minimum of 13% of the gross revenue from the municipality of São Paulo, net of the taxes on revenues. Investment plans referring to SABESP’s execution shall be compatible with the activities and programs foreseen in the state, municipal sanitation plans, and where applicable, the metropolitan plan. The investment plan is not definite and will be revised by Managing Committee every four years, especially as to investments to be made in the following period; 6. The payment related to the Municipal Fund of Environmental Sanitation and Infrastructure to be applied in the sanitation service within the municipality must be recovered through the tariffs charges. Such payment represents 7.5% of the total revenue from the municipality of São Paulo, net of the taxes on revenue and delinquency in the period, recognized in profit or loss, as operating cost; 7. The opportunity cost of the investors and the creditors was established by the Weighted Average Cost of Capital (WACC) methodology. The WACC was the interest rate used to discount the cash flow of the operation; and 8. The agreement considers the recovery of net assets in operation, preferably evaluated through equity valuation or carrying amount monetarily restated, as defined by ARSESP. In addition, the agreement provides for the remuneration of investments to be made by SABESP, so that there is no residual value at the end of the agreement. Referring to the recovery through tariff, mentioned in item 6 above, of transfer to the Municipal Fund of Environmental Sanitation and Infrastructure, ARSESP issued in April 2013, the Resolution no. 413, postponing the application of Resolution no. 407 until the conclusion of the tariff revision process, the transfer to the bill of services of amounts referring to the municipal charges which were stipulated in Resolution no. 407. The postponement to apply Resolution no. 407 was due to a request by the São Paulo State Government to analyze, among other things, methods to reduce the impact on consumers. As of April 18, 2014, ARSESP Resolution no. 484 was published with the final results of SABESP’s Tariff Revision, however, both the São Paulo Municipal Government, through Official Letter no. 1,309/2014-SGM/GAB and the São Paulo State Government through a petition filed by the São Paulo State Office, through the Official Letter ATG/Official Letter no. 092/2014-CC, requested a postponement of the effects of ARSESP Resolution no. 413, published in the São Paulo State Official Gazette on March 20, 2013, until the conclusion of the revision of the Agreement entered into between the São Paulo Municipal Government, the São Paulo State Government and SABESP. By means of Resolution no. 488 of May 7, 2014, ARSESP maintained the suspension of the effectiveness of ARSESP Resolution no. 407, published on March 22, 2013, until the results obtained in the revision of the Agreement entered into by the São Paulo Municipal Government, the São Paulo State Government and SABESP postponing authorization for the transfer to the bill of the services related to the legally established municipal fees that, by force of the Program Agreements and Water Supply and Sewage Services Agreements, should be included in the Tariff Revision. The agreement represents 44.48% of the total revenue of the Company as of December 31, 2019, and ensures the judicial and assets security. The municipality of São Paulo and the Company did not conclude an agreement to equalize financial pending issues existing until the signature date of the Agreement related to the rendering of water supply and sewage services to the real properties of the municipality, and for that reason, the Company filed a suit to collect these accounts, which are accrued for losses. (d) Capitalization of interest and other finance charges In 2019, the Company capitalized interest and inflation adjustment, including related foreign currency exchange effects in concession intangible assets, totaling R$233,251, including the São Lourenço Production System and Leases (R$488,502 in 2018 and R$649,048 in 2017) during the construction period. (e) Construction margin The Company acts as a principal responsible to construct and install the infrastructure related to the concession, using own efforts or hiring outsourcing services, receiving the risks and benefits. Accordingly, the Company recognizes revenue from construction service corresponding to the cost of construction increased by gross margin. Generally, the constructions related to the concessions are performed by third parties, in such case, the margin of the Company is lower, normally, to cover eventual administration costs, and the responsibility of the primary risk. In 2019 and 2018 the margin was 2.3%. Construction margin for 2019, 2018 and 2017 were R$65,172, R$63,013 and R$70,335, respectively. (f) Expropriations As a result of the construction of priority projects related to water and sewage systems, the Company was required to expropriate third-parties' properties, and the owners of these properties will be compensated either amicably or through courts. The costs of these expropriations are recorded as concession intangible assets after the transaction is concluded. In 2019, the total amount related to expropriations was R$34,681 (R$106,429 in 2018 and R$19,576 in 2017). (g) Public-Private Partnership - PPP SABESP carries out operations related to the PPPs mentioned below. These operations and their respective obligations and guarantees are supported by agreements executed according to Law 11,079/2004. Alto Tietê Production System The Company and the special purpose entity CAB-Sistema Produtor Alto Tietê S/A, formed by Galvão Engenharia S.A. and Companhia Águas do Brasil – Cab Ambiental, signed in June 2008 the contract of public-private- partnership of Alto Tietê production system. The contract last 15 years which purpose is to expand the capacity of treated water of Taiaçupeba from 10 thousand to 15 thousand of liters per second, whose operation began in October 2011. As of December 31, 2019 and 2018, the amounts recognized as intangible asset related to PPP were R$348,586 and R$359,759, respectively. In 2019 and 2018, a discount rate of 8.20% p.a. was used to calculate the adjustment to present value of the agreement. On a monthly basis, SABESP assigns funds from tariffs to the SPE CAB Sistema Produtor Alto Tietê S/A, in the amount of R$10,361, corresponding to the monthly remuneration. This amount is annually adjusted by the IPC – FIPE and is recorded in a restricted account, pursuant to the contractual operating proceeding. The guarantee is effective since the beginning of the operation and will be valid until the conclusion, termination, intervention, annulment or caducity of the Administrative Concession, or other extinction events provided for in the Concession Agreement or in the law applicable to administrative concessions, including in the event of bankruptcy or extinction of the SPE. São Lourenço Production System In August 2013, SABESP and the special purpose entity Sistema Produtor São Lourenço S/A, composed of Construções e Comércio Camargo Corrêa S/A and Construtora Andrade Gutierrez S/A, signed the public-private partnership agreements of the São Lourenço Production System. In May 2018, the control of SPE Sistema Produtor São Lourenço S/A was transferred to CGGC Construtora do Brasil Ltda, previously composed of Construções e Comércio Camargo Corrêa S/A and Construtora Andrade Gutierrez S/A. The objective of the contract is: a) the construction of a water producing system, mainly consisting of a water pipeline connecting Ibiúna to Barueri, a water collection station in Ibiúna, a water treatment station in Vargem Grande Paulista and water reservoirs; and b) the provision of services for a 25-year term, aiming at rendering services to operate the dehydration system, drying and final disposal of sludge, maintenance and works of the São Lourenço Production System. Works started in April 2014. The São Lourenço Production System (SPSL) PPP started operating on July 10, 2018. The estimated amount by inflation adjustment through December 31, 2019 is approximately R$7.73 billion. After the beginning of the operations, every month SABESP will transfer to the SPE Sistema Produtor São Lourenço S/A funds from tariffs arising from the services provided, in the amount of R$33.0 million, equivalent to the estimated monthly remuneration plus interest and charges. The amount above will be annually reevaluated by the IPC - FIPE and should be monthly recorded in a restricted account, in accordance with the operating procedures of the agreements. This obligation with the SPE will become effective as of the beginning of the system’s appropriate operation, duly accepted by SABESP, valid until the occurrence of any of the following events, whichever occurs first: (i) the original payment date of the last installment of interest / amortization of the principal taken out by the SPE to execute the works; (ii) the end, termination, intervention, annulment, caducity of the Administrative Concession, or other extinction events provided for in the Concession Agreement or in the law applicable to administrative concessions, including bankruptcy or extinction of the SPE. As of December 31, 2019 and 2018, the carrying amounts recorded in the Company’s intangible assets, related to this PPP, amounted to R$3,235,008 and R$3,208,464, respectively. Intangible assets are accrued for based on the physical evolution of the construction, with a counter-entry in the Private Public Partnership (PPP) liabilities account. In 2019, a discount rate of 7.80% p.a. was used to calculate the adjustment to present value of the agreement. The São Lourenço Production System had its main works completed in the first quarter of 2019 with the end of the works phase (phase 1) occurred on November 1, 2019, after checking compliance with the contractual clauses and the absence of documentary pending issues. The obligations assumed by the Company as of December 31, 2019 and 2018 are shown in the table below: December 31, 2019 December 31, 2018 Current liabilities Noncurrent liabilities Total liabilities Current liabilities Noncurrent liabilities Total liabilities Alto Tietê 44,003 208,217 252,220 39,283 252,093 291,376 São Lourenço 66,288 2,975,472 3,041,760 98,544 3,023,204 3,121,748 Total 110,291 3,183,689 3,293,980 137,827 3,275,297 3,413,124 (h) Works in progress With the adoption of IFRS 15 - Revenue from contract with customers, as of January 1, 2018, assets related to the concession under construction, recorded under the scope of IFRIC 12 – Service Concession Arrengements, previously recognized as part of of intangible assets as works in progress were reclassified to contract assets, according to note 13, in the amount of R$ 10,387 million. (i) Amortization of intangible assets The amortization average rate totaled 4.2% as of December 31, 2019 (4.2% and 3.9% as of December 31, 2018 and 2017, respectively) . (j) Software license of use The software license of use is capitalized based on the costs incurred to acquire software and make them ready for use. As of April 10, 2017, the Company implemented the Integrated Business Management System (Enterprise Resource Planning – SAP ERP), which includes the administrative/financial module. The implementation of the commercial module is in progress. (k) Right of use The statement of financial position account Right of Use, created by the Company on January 1, 2019, reflects the amendment introduced by IFRS 16, which requires lessees to record the right-of-use asset and the lease liability. The Company has utilized the exemption in adoption of IFRS 16 related to leases with a lease term of 12 months or less and containing no purchase options and leases where the underlying asset has a low value when new. For those leases accounted for under the exemption option, the Company recognized R$40,577, R$9,132 and R$2,146 in its results, allocated to operating costs, selling expenses and administrative expenses, respectively in 2019. Details of right of use asset are as follows: Nature December 31, 2019 Leases related to Contract Assets 276,893 Leases related to Concession Agreements and Program Contracts 292,824 - Cost 405,426 - Accumulated amortization (112,602) Other assets 70,698 - Vehicles 91,709 - Properties 13,309 - Equipment 3,801 - Other 4,414 - Accumulated amortization (42,535) Right of use 640,415 Lease liability corresponds to total future fixed lease payments, adjusted to present value, considering an incremental rate on borrowings. For further information, see Note 16. The table below shows the impact in the income statements as of December 31, 2019: Impact in the income statement December 31, 2019 Right-of-use amortization (65,413) Financial result – interest expenses (54,791) Short-term and low-value lease expenses (51,855) Decrease of the income of the year (172,059) |
15. Property, plant and equipme
15. Property, plant and equipment | 12 Months Ended |
Dec. 31, 2019 | |
Property, plant and equipment [abstract] | |
Property, plant and equipment | (a) Statement of financial position details December 31, 2019 December 31, 2018 Cost Accumulated depreciation Net Depreciation average rate Cost Accumulated depreciation Net Depreciation average rate Land 92,962 - 92,962 - 92,979 - 92,979 - Buildings 82,143 (40,438) 41,705 2.1% 79,086 (38,961) 40,125 3.0% Equipment 402,850 (250,577) 152,273 16.3% 372,872 (256,786) 116,086 16.5% Transportation equipment 8,946 (6,962) 1,984 9.9% 11,333 (7,860) 3,473 10.0% Furniture and fixtures 31,365 (13,146) 18,219 6.7% 27,250 (13,672) 13,578 6.8% Other 7,559 (309) 7,250 5.0% 1,659 (288) 1,371 6.2% Total 625,825 (311,432) 314,393 12.5% 585,179 (317,567) 267,612 12.3% (b) Changes December 31, 2018 Additions Transfers Write-offs and disposals Depreciation December 31, 2019 Land 92,979 - (17) - - 92,962 Buildings 40,125 3,497 15 - (1,932) 41,705 Equipment 116,086 63,216 3,149 (429) (29,749) 152,273 Transportation equipment 3,473 308 (1,117) (2) (678) 1,984 Furniture and fixtures 13,578 5,266 734 (162) (1,197) 18,219 Other 1,371 5,872 66 - (59) 7,250 Total 267,612 78,159 2,830 (593) (33,615) 314,393 December 31, 2017 Additions Transfers Write-offs and disposals Depreciation December 31, 2018 Land 92,507 - 472 - - 92,979 Buildings 42,360 73 - - (2,308) 40,125 Equipment 103,803 46,473 986 (81) (35,095) 116,086 Transportation equipment 3,680 589 - - (796) 3,473 Furniture and fixtures 11,816 2,972 - (27) (1,183) 13,578 Other 884 538 - - (51) 1,371 Total 255,050 50,645 1,458 (108) (39,433) 267,612 December 31, 2016 Additions Transfers Write-offs and disposals Depreciation December 31, 2017 Land 92,494 - 13 - - 92,507 Buildings 43,262 86 1,358 - (2,346) 42,360 Equipment 149,140 17,627 (15,945) (178) (46,841) 103,803 Transportation equipment 4,531 - (33) (27) (791) 3,680 Furniture and fixtures 11,986 1,207 (75) (54) (1,248) 11,816 Other 970 - (15) (20) (51) 884 Total 302,383 18,920 (14,697) (279) (51,277) 255,050 |
16. Borrowings and financing
16. Borrowings and financing | 12 Months Ended |
Dec. 31, 2019 | |
Borrowings [abstract] | |
Borrowings and financing | Borrowings and financing outstanding balance December 31, 2019 December 31, 2018 Financial institution Current Noncurrent Total Current Noncurrent Total Local currency 10th issue debentures 41,021 - 41,021 42,493 40,194 82,687 12th issue debentures 45,450 203,829 249,279 45,450 249,249 294,699 14th issue debentures 41,940 63,012 104,952 41,270 103,005 144,275 15th issue debentures - - - 359,394 - 359,394 17th issue debentures 289,211 263,226 552,437 279,100 532,691 811,791 18th issue debentures 34,239 133,679 167,918 33,469 165,267 198,736 20th issue debentures - - - 248,334 - 248,334 21th issue debentures 150,000 349,660 499,660 - 499,604 499,604 22th issue debentures - 765,689 765,689 - 756,040 756,040 23th issue debentures - 864,603 864,603 - - - 24th issue debentures - 395,855 395,855 - - - Brazilian Federal Savings Bank 83,519 1,341,660 1,425,179 75,223 1,266,592 1,341,815 Brazilian Development Bank - BNDES BAIXADA SANTISTA - - - 16,899 - 16,899 Brazilian Development Bank - BNDES PAC 11,184 27,854 39,038 11,227 39,169 50,396 Brazilian Development Bank - BNDES PAC II 9751 6,990 40,685 47,675 4,364 18,811 23,175 Brazilian Development Bank - BNDES PAC II 9752 3,913 24,457 28,370 3,186 23,100 26,286 Brazilian Development Bank - BNDES ONDA LIMPA 23,704 100,582 124,286 23,632 123,875 147,507 Brazilian Development Bank - BNDES TIETÊ III 52,874 383,191 436,065 30,589 252,197 282,786 Brazilian Development Bank - BNDES 2015 31,712 460,646 492,358 31,615 490,729 522,344 Brazilian Development Bank - BNDES 2014 4,659 25,411 30,070 - - - Leases (Concession Agreements, Program Contracts and Contract Assets) 27,314 432,357 459,671 19,077 549,589 568,666 Leases (Others) 51,088 23,365 74,453 - - - Other 1,665 8,207 9,872 1,380 8,163 9,543 Interest and charges 77,460 - 77,460 98,410 - 98,410 Total in local currency 977,943 5,907,968 6,885,911 1,365,112 5,118,275 6,483,387 Borrowings and financing outstanding balance December 31, 2019 December 31, 2018 Financial institution Current Noncurrent Total Current Noncurrent Total Foreign currency Inter-American Development Bank - BID 1212 – US$61,668 thousand (US$71,947 thousand in December 2018) 41,428 207,140 248,568 39,826 238,954 278,780 Inter-American Development Bank - BID 2202 – US$510,573 thousand (US$544,457 thousand in December 2018) 128,623 1,914,298 2,042,921 124,098 1,969,565 2,093,663 International Bank of Reconstruction and Development -BIRD – US$88,871 thousand (US$91,286 thousand in December 2018) 24,505 330,898 355,403 11,779 341,646 353,425 Deutsche Bank – (US$75,000 thousand in December 2018) - - - 288,479 - 288,479 Eurobonds – US$350,000 thousand (US$350,000 thousand in December 2018) 1,409,921 - 1,409,921 - 1,354,532 1,354,532 JICA 15 – ¥11,524,300 thousand (¥12,676,730 thousand in December 2018) 42,813 385,315 428,128 40,646 406,462 447,108 JICA 18 – ¥10,361,600 thousand (¥11,397,760 thousand in December 2018) 38,493 346,237 384,730 36,545 365,230 401,775 JICA 17 – ¥2,830,420 thousand (¥1,826,957 thousand in December 2018) 12,466 91,845 104,311 11,835 51,786 63,621 JICA 19 – ¥31,736,565 thousand (¥31.561.726 thousand in December 2018) 67,372 1,109,644 1,177,016 64,028 1,047,081 1,111,109 BID 1983AB – US$40,769 thousand (US$58,462 thousand in December 2018) 71,312 91,521 162,833 68,554 155,653 224,207 Interest and charges 44,967 - 44,967 52,710 - 52,710 Total in foreign currency 1,881,900 4,476,898 6,358,798 738,500 5,930,909 6,669,409 Total borrowings and financing 2,859,843 10,384,866 13,244,709 2,103,612 11,049,184 13,152,796 Exchange rate as of December 31, 2019: US$4.0307; ¥0.03715 (as of December 31, 2018: US$3.8748; ¥0.03527). As of December 31, 2019, the Company did not have balances of borrowings and financing, raised during the year, to mature within 12 months. Local currency Guarantees Maturity Annual interest rates Inflation adjustment 10th issue debentures Own funds 2020 TJLP +1.92% (Series 1 and 3) and 9.53% (Series 2) IPCA (Series 2) 12th issue debentures Own funds 2025 TR + 9.5% 14th issue debentures Own funds 2022 TJLP +1.92% (Series 1 and 3) and 9.19% (Series 2) IPCA (Series 2) 17th issue debentures Own funds 2023 CDI +0.75 (Series 1) and 4.5% (Series 2) and4.75% (Series 3) IPCA (Series 2 and 3) 18th issue debentures Own funds 2024 TJLP 1.92 % (Series 1 and 3) and 8.25% (Series 2) IPCA (Series 2) 21th issue debentures Own funds 2022 CDI + 0.60% e CDI+ 0.90% 22th issue debentures Own funds 2025 CDI +0.58 (Series 1) and CDI + 0.90% (Series 2) and 6.0% (Series 3) IPCA (Series 3) 23th issue debentures Own funds 2027 CDI +0.63 (Series 1) and CDI + 0.49% (Series 2) 24th issue debentures Own funds 2029 3.20 (Series 1) and 3.37% (Series 2) IPCA (Series 1 and 2) Brazilian Federal Savings Bank Own funds 2020/2039 5% to 9.5% TR Brazilian Development Bank - BNDES PAC Own funds 2023 TJLP+2.15% Brazilian Development Bank - BNDES PAC II 9751 Own funds 2027 TJLP+1.72% Brazilian Development Bank - BNDES PAC II 9752 Own funds 2027 TJLP+1.72% Brazilian Development Bank - BNDES ONDA LIMPA Own funds 2025 TJLP+1.92% Brazilian Development Bank - BNDES TIETÊ III Own funds 2028 TJLP+1.66% Brazilian Development Bank - BNDES 2015 Own funds 2035 TJLP+2.5% Brazilian Development Bank - BNDES 2014 Own funds 2026 TJLP+1.76% Leases (Concession Agreements, Program Contracts and Contract Assets) 2035 7.73% to 10.12% IPC Leases (Others) 2023 6.01% to 9.84% Other Own funds 2025 3% (FEHIDRO) and TJLP + 1.5% (FINEP) Foreign currency Guarantees Maturity Annual interest rates Exchange rate changes Inter-American Development Bank - BID 1212 - US$61,668 thousand Government 2025 3.31% (*) US$ Inter-American Development Bank - BID 2202 - US$510,573 thousand Government 2035 3.42% (*) US$ International Bank for Reconstruction and Development - BIRD US$88,871 thousand Government 2034 2.85% (*) US$ Eurobonds – US$350,000 thousand - 2020 6.25% US$ JICA 15 – ¥11,524,300 thousand Government 2029 1.8% and 2.5% Yen JICA 18 – ¥10,361,600 thousand Government 2029 1.8% and 2.5% Yen JICA 17– ¥2,830,420 thousand Government 2035 1.2% and 0.01% Yen JICA 19– ¥31,736,565 thousand Government 2037 1.7% and 0.01% Yen BID 1983AB – US$40,769 thousand - 2023 2.08% to 2.38% (*) US$ (*)Rates comprising LIBOR + contractually defined spread. (i) Payment schedule – book value as of December 31, 2019 2020 2021 2022 2023 2024 2025 2026 to 2040 TOTAL LOCAL CURRENCY Debentures 601,861 484,363 563,291 366,330 700,583 280,062 644,924 3,641,414 Brazilian Federal Savings Bank 83,519 87,951 92,727 85,554 84,289 89,569 901,570 1,425,179 BNDES 135,036 134,584 134,584 128,886 123,400 105,460 435,912 1,197,862 Leases (Concession Agreements, Program Contracts and Contract Assets) 27,314 29,093 31,063 33,711 36,697 39,951 261,842 459,671 Leases (Others) 51,088 22,630 678 57 - - - 74,453 Other 1,665 1,865 1,865 1,825 1,384 1,268 - 9,872 Interest and charges 77,460 - - - - - - 77,460 TOTAL IN LOCAL CURRENCY 977,943 760,486 824,208 616,363 946,353 516,310 2,244,248 6,885,911 FOREIGN CURRENCY BID 170,051 170,051 170,051 170,051 170,051 170,051 1,271,183 2,291,489 BIRD 24,505 24,505 24,505 24,505 24,505 24,505 208,373 355,403 Eurobonds 1,409,921 - - - - - - 1,409,921 JICA 161,144 154,857 154,857 154,857 154,857 154,857 1,158,756 2,094,185 BID 1983AB 71,312 31,005 31,005 29,511 - - - 162,833 Interest and charges 44,967 - - - - - - 44,967 TOTAL IN FOREIGN CURRENCY 1,881,900 380,418 380,418 378,924 349,413 349,413 2,638,312 6,358,798 Overall Total 2,859,843 1,140,904 1,204,626 995,287 1,295,766 865,723 4,882,560 13,244,709 (ii) Changes December 31, 2018 Addition as per IFRS 16 Funding Borrowing costs Monetary variation and exchange rate changes Inflation adjustment / exchange rate changes - Capitalized Interest paid Amortization Accrued interest Provision for interest and fees - Capitalized Amortization of borrowing costs December 31, 2019 LOCAL CURRENCY Debentures 3,486,861 - 1,266,755 (11,814) 42,692 - (234,307) (1,055,623) 195,586 17,233 3,845 3,711,228 Brazilian Federal Savings Bank 1,345,684 - 162,767 - - - (109,128) (79,404) 74,421 34,910 - 1,429,250 BNDES 1,072,605 - 256,981 (628) 2,082 826 (83,419) (131,026) 60,644 23,112 234 1,201,411 Leases (Concession Agreements, Program Contracts and Contract Assets) 568,666 - - - 1,765 3,761 (47,663) (123,880) 49,160 7,862 - 459,671 Leases (Others) - 113,233 - - - - (1,141) (42,646) 5,007 - - 74,453 Other 9,571 - 1,683 - 28 - (655) (1,383) 652 2 - 9,898 TOTAL IN LOCAL CURRENCY 6,483,387 113,233 1,688,186 (12,442) 46,567 4,587 (476,313) (1,433,962) 385,470 83,119 4,079 6,885,911 FOREIGN CURRENCY BID 2,399,985 - - - 40,594 49,387 (83,602) (171,892) 26,332 54,431 955 2,316,190 BIRD 356,420 - 2,540 (2,540) 12,575 1,657 (10,627) (12,273) 8,548 1,561 19 357,880 Deutsche Bank 292,872 - - - 13,255 - (18,562) (303,866) 12,929 1,240 2,132 - Eurobonds 1,358,412 - - - 54,565 - (102,883) - 94,095 8,943 824 1,413,956 JICA 2,036,128 - 117,861 (112) 104,027 3,675 (35,001) (155,064) 32,194 3,013 187 2,106,908 BID 1983AB 225,592 - - (105) 8,943 - (10,338) (71,141) 9,111 870 932 163,864 TOTAL IN FOREIGN CURRENCY 6,669,409 - 120,401 (2,757) 233,959 54,719 (261,013) (714,236) 183,209 70,058 5,049 6,358,798 Overall Total 13,152,796 113,233 1,808,587 (15,199) 280,526 59,306 (737,326) (2,148,198) 568,679 153,177 9,128 13,244,709 December 31, 2017 Funding Borrowings costs Monetary variation and exchange rate changes Inflation adjustment / update incorporated interest - Capitalized Interest and fees paid Amortization Accrued interest Interest and fees – Capitalized (*) Borrowings costs - expenses December 31, 2018 LOCAL CURRENCY Debentures 3,576,842 750,000 (3,021) 62,676 - (259,175) (905,080) 226,810 34,409 3,400 3,486,861 Brazilian Federal Savings Bank 1,236,674 194,244 - - - (102,772) (85,515) 75,668 27,385 - 1,345,684 BNDES 1,042,036 131,000 - 3,438 4,001 (90,397) (102,314) 28,909 55,725 207 1,072,605 Leases 561,616 - - - 6,366 (38,196) (17,427) 40,290 16,017 - 568,666 Other 10,977 - - 69 - (772) (1,470) 763 4 - 9,571 TOTAL IN LOCAL CURRENCY 6,428,145 1,075,244 (3,021) 66,183 10,367 (491,312) (1,111,806) 372,440 133,540 3,607 6,483,387 FOREIGN CURRENCY BID 1,743,257 484,690 (2,365) 237,433 53,208 (55,391) (130,520) 26,910 41,878 885 2,399,985 BIRD 303,278 - - 48,279 3,462 (7,607) - 6,945 2,044 19 356,420 Deutsche Bank 496,726 - - 62,918 - (35,207) (268,508) 28,862 4,454 3,627 292,872 Eurobonds 1,158,642 - - 198,380 - (97,952) - 85,072 13,448 822 1,358,412 JICA 1,700,448 80,196 (191) 329,638 6,787 (33,519) (82,608) 33,992 1,209 176 2,036,128 BID 1983AB 270,470 - - 39,241 - (11,060) (85,306) 9,681 1,488 1,078 225,592 TOTAL IN FOREIGN CURRENCY 5,672,821 564,886 (2,556) 915,889 63,457 (240,736) (566,942) 191,462 64,521 6,607 6,669,409 Overall Total 12,100,966 1,640,130 (5,577) 982,072 73,824 (732,048) (1,678,748) 563,902 198,061 10,214 13,152,796 (*) amount related to accrued interest which as part of the contract assets. December 31, 2016 Funding Borrowings costs Lease Monetary variation and exchange rate changes Inflation adjustment / update incorporated interest - Capitalized Interest and fees paid Amortization Accrued interest Interest and fees – Capitalized (*) Borrowings costs - expenses December 31, 2017 LOCAL CURRENCY Debentures 3,641,912 500,000 (1,157) - 51,768 - (301,493) (597,794) 176,780 103,215 3,611 3,576,842 Brazilian Federal Savings Bank 1,150,691 144,654 - - 5,495 1,415 (95,854) (65,836) 78,283 17,826 - 1,236,674 BNDES 946,984 171,153 - - 5,405 2,512 (78,466) (87,993) 33,938 48,294 209 1,042,036 Leases 552,516 - - 24,693 - - - (15,593) - - - 561,616 Other 11,677 - - - 116 - (876) (750) 779 31 - 10,977 TOTAL IN LOCAL CURRENCY 6,303,780 815,807 (1,157) 24,693 62,784 3,927 (476,689) (767,966) 289,780 169,366 3,820 6,428,145 FOREIGN CURRENCY BID 1,811,664 96,889 (2,497) - (15,193) 40,228 (38,654) (189,280) 22,547 16,803 750 1,743,257 BIRD 261,337 35,710 - - 2,874 2,837 (4,049) - 3,662 888 19 303,278 Deutsche Bank 485,090 - (720) - 7,335 - (31,774) - 21,286 11,925 3,584 496,726 Eurobonds 1,141,469 - - - 17,115 - (85,338) - 55,046 29,529 821 1,158,642 JICA 1,617,215 63,909 (287) - 82,563 2,525 (28,652) (65,702) 27,602 1,115 160 1,700,448 BID 1983AB 343,588 - (82) - 1,609 - (10,931) (75,610) 6,858 3,715 1,323 270,470 TOTAL IN FOREIGN CURRENCY 5,660,363 196,508 (3,586) - 96,303 45,590 (199,398) (330,592) 137,001 63,975 6,657 5,672,821 Overall Total 11,964,143 1,012,315 (4,743) 24,693 159,087 49,517 (676,087) (1,098,558) 426,781 233,341 10,477 12,100,966 (*) amount related to accrued interest which as part of the contract assets. (*) amount related to accrued interest which as part of the contract asset (a) Debentures (i) Funding On May 27, 2019, the Company raised funds through the 23 rd Value Maturity Remuneration Series 1 S eries 2 9 1,7 5 375,000 May /2 0 2 May /2 0 2 CDI CDI + 0.49 p On July 24, 2019, the Company raised funds through the 24 th Value Maturity Remuneration Series 1 S eries 2 10 0,00 300,000 July/ 2 0 2 July / 2 0 29 IPCA 3. 2 p IPCA + 3.37 p (ii) Covenants Applicable to the 23 rd th Calculated every quarter upon the disclosure of interim or annual financial statements : - Net debt/ EBITDA: - Adjusted - Non-compliance with the covenant clauses, during, at least, two consecutive quarters, or also two nonconsecutive quarters within a twelve-month period shall result in the early maturity of the agreement. The agreement has a clause that, in case of early maturity of any Company debt, in an individual or aggregate amount equal to or higher than R$ 145 million, adjusted by the variation of the IPCA as from the issue date, is a default event that may cause the early maturity of the obligations arising from the Debentures. (b) BNDES (i) Funding The initial funding of agreement 14.2.0535.1 ( (ii) Covenants Applicable to financing agreement no. 14.2.0535.1 (BNDES 2014) The financing agreements entered into with the BNDES specifies two ranges in which the Company needs to maintain its Adjusted EBITDA / Adjusted Financial Expenses, Adjusted Net Debt / Adjusted EBITDA, and Other Onerous Debt / Adjusted EBITDA ratios. This agreements also specifies a guarantee mechanism in which the Company needs to ensure that a portion of the monthly receivables amount is daily recorded in a fiduciary account linked to the BNDES. In this process, every day, after the BNDES notifies the depositary bank that the Company is not in default, this portion of the monthly receivables amount is transferred to a Company current account. The renegotiated/amended covenants are: A. Maintenance of the following ratios, quarterly calculated and related to accrued amounts over the last 12 months, upon the disclosure of reviewed interim financial statements or audited annual financial statements entails the need to record R$225.9 million per month in a fiduciary account linked to the BNDES: · Adjusted EBITDA / Adjusted financial expenses equal to or higher than 3.50; · Adjusted net debt / Adjusted EBITDA equal to or lower than 3.00; · Other onerous debt (*) / Adjusted EBITDA equal to or lower than 1.00. (*)“Other Onerous Debts” correspond to the sum of social security liabilities, health care plan, installment payment of tax debts and installment payment of debts with the Electricity supplier. B. In case of failure to comply with one or more ratios specified in item A, in two or more quarters, consecutive or not, within twelve months, the Company will be failing to comply with the first range of ratios and the portion of the monthly receivables to be recorded in a fiduciary account linked to the BNDES will be automatically increased by 20%, if the ratios are maintained in the following range: · Adjusted EBITDA / Adjusted financial expenses lower than 3.50 and equal to or higher than 2.80; · Adjusted net debt / adjusted EBITDA equal to or lower than 3.80 and higher than 3.00; · Other onerous debt / Adjusted EBITDA equal to or lower than 1.30 and higher than 1.00. C. The failure to achieve one or more than one ratio stipulated in item B, and/or the Company does not comply with the automatic reinforcement of guarantee under the terms of item B, the Company will be failing to comply with the covenant terms and the BNDES may, at its sole discretion: · require the creation of additional guarantees, not below 30 days, within term to be defined by it through notice; · suspend the release of funds; and/or · declare the early maturity of the financing agreements. As of December 31, 2019, the amount of R$255.3 million was guaranteed for the BNDES agreements. (c) Leases The Company has work service agreements which includes specific assets under lease terms. During the construction period, works are capitalized to intangible assets in progress and the lease amount is recorded at the same proportion. After startup, the lease payment period starts (240 monthly installments), whose amount is periodically restated by contracted price index. (d) Financial commitments - Covenants The table below shows the more restrictive covenants ratios as of December 31, 2019. Restrictive Ratios Adjusted EBITDA / Adjusted financial expenses Equal to or higher than 2.80 Adjusted net debt / Adjusted EBITDA Equal to or lower than 3.80 Adjusted total debt / Adjusted EBITDA Lower than 3.65 Other onerous debt (1) Equal to or lower than 1.30 Adjusted current ratio Higher than 1.00 EBITDA / Paid financial expenses Equal to or higher than 2.35 Net debt / Adjusted EBITDA Equal to or lower than 3.50 (1) “Other Onerous Debts” correspond to the sum of social security liabilities, health care plan, installment payment of tax debts and installment payment of debts with electricity supplier. As of December 31, 2019 and 2018, the Company met the financial debt covenants as set forth by its borrowing and financing agreements. (e) Borrowings and financing – Credit Limits Agent December 31, 2019 (in millions of reais (*)) Brazilian Federal Savings Bank 1,729 Brazilian Development Bank – BNDES 1,203 Japan International Cooperation Agency – JICA 94 Inter-American Development Bank – BID 1,209 International Bank for Reconstruction and Development - IBRD 1,005 Other 41 TOTAL 5,281 (*) Brazilian Central Bank’s exchange sell rate as of December 30, 2019 (US$ 1.00 = R$ 4.0307; ¥ 1.00 = R$ 0.03715) . Financing resources contracted have specific purposes, which have been released for the execution of their respective investments, according to the progress of the works. |
17. Taxes recoverable_payable
17. Taxes recoverable/payable | 12 Months Ended |
Dec. 31, 2019 | |
Taxes Recoverablepayable | |
Taxes recoverable/payable | (a) Current assets December 31, 2019 December 31, 2018 Recoverable taxes Income tax and social contribution 136,436 361,758 Withholding income tax (IRRF) on financial investments 1,359 6,423 Other federal taxes 3,471 12,522 Total 141,266 380,703 (b) Current liabilities December 31, 2019 December 31, 2018 Taxes and contributions payable Cofins and Pasep 94,027 82,381 INSS (Social Security contribution) 39,404 38,871 IRRF (withholding income tax) 69,932 66,825 Other 46,955 12,486 Total 250,318 200,563 |
18. Deferred taxes and contribu
18. Deferred taxes and contributions | 12 Months Ended |
Dec. 31, 2019 | |
Deferred Taxes And Contributions | |
Deferred taxes and contributions | (a) Statement of financial position details December 31, 2019 December 31, 2018 Deferred income tax assets Provisions 366,673 337,833 Pension obligations - G1 157,998 157,044 Donations of underlying asset on concession agreements 51,818 54,131 Credit losses 145,622 197,920 Other 183,147 186,887 Total deferred tax assets 905,258 933,815 Deferred income tax liabilities Temporary difference on concession of intangible asset (408,732) (433,842) Capitalization of borrowing costs (409,236) (420,978) Profit on supply to governmental entities (372,289) (206,978) Actuarial gain/loss – G1 Plan (54,222) (36,430) Construction margin (83,399) (86,164) Borrowing costs (11,376) (10,665) Total deferred tax liabilities (1,339,254) (1,195,057) Deferred tax assets (liabilities), net (433,996) (261,242) (b) Realization December 31, 2019 December 31, 2018 Deferred income tax assets to be realized within 12 months 189,740 158,294 to be realized after one year 715,518 775,521 Total deferred tax assets 905,258 933,815 Deferred income tax liabilities to be realized within 12 months (35,954) (32,546) to be realized after one year (1,303,300) (1,162,511) Total deferred tax liabilities (1,339,254) (1,195,057) Deferred tax asset (liabilities) (433,996) (261,242) (c) Changes Deferred income tax assets December 31, 2018 Net change December 31, 2019 Provisions 337,833 28,840 366,673 Pension obligations - G1 157,044 954 157,998 Donations of underlying asset on concession agreements 54,131 (2,313) 51,818 Credit losses 197,920 (52,298) 145,622 Other 186,887 (3,740) 183,147 Total 933,815 (28,557) 905,258 Deferred income tax liabilities Temporary difference on concession of intangible asset (433,842) 25,110 (408,732) Capitalization of borrowing costs (420,978) 11,742 (409,236) Profit on supply to governmental entities (206,978) (165,311) (372,289) Actuarial (gain)/loss – G1 (36,430) (17,792) (54,222) Construction margin (86,164) 2,765 (83,399) Borrowing costs (10,665) (711) (11,376) Total (1,195,057) (144,197) (1,339,254) Deferred tax assets (liabilities), net (261,242) (172,754) (433,996) Deferred income tax assets December 31, 2017 Net change December 31, 2018 Provisions 482,863 (145,030) 337,833 Pension obligations - G1 165,503 (8,459) 157,044 Donations of underlying asset on concession agreements 55,112 (981) 54,131 Credit losses 199,063 (1,143) 197,920 Other 151,562 35,325 186,887 Total 1,054,103 (120,288) 933,815 Deferred income tax liabilities Temporary difference on concession of intangible asset (460,177) 26,335 (433,842) Capitalization of borrowing costs (415,379) (5,599) (420,978) Profit on supply to governmental entities (76,705) (130,273) (206,978) Actuarial (gain)/loss – G1 (36,538) 108 (36,430) Construction margin (88,947) 2,783 (86,164) Borrowing costs (13,111) 2,446 (10,665) Total (1,090,857) (104,200) (1,195,057) Deferred tax assets (liabilities), net (36,754) (224,488) (261,242) Deferred income tax assets December 31, 2016 Net change December 31, 2017 Provisions 524,129 (41,266) 482,863 Actuarial gain/loss – G1 85,044 (85,044) - Pension obligations - G1 167,922 (2,419) 165,503 Donations of underlying asset on concession agreements 57,317 (2,205) 55,112 Credit losses 266,757 (67,694) 199,063 Other 151,247 315 151,562 Total 1,252,416 (198,313) 1,054,103 Deferred income tax liabilities Temporary difference on concession of intangible asset (492,341) 32,164 (460,177) Capitalization of borrowing costs (374,512) (40,867) (415,379) Profit on supply to governmental entities (92,365) 15,660 (76,705) Actuarial gain/loss – G1 - (36,538) (36,538) Construction margin (91,790) 2,843 (88,947) Borrowing costs (15,063) 1,952 (13,111) Total (1,066,071) (24,786) (1,090,857) Deferred tax assets (liabilities), net 186,345 (223,099) (36,754) December 31, 2019 December 31, 2018 December 31, 2017 Opening balance (261,242) (36,754) 186,345 Net change in the year: - corresponding entry to the income statement (154,962) (224,596) (101,517) - corresponding entry to valuation adjustments to equity (Note 20 (b)) (17,792) 108 (121,582) Total net change (172,754) (224,488) (223,099) Closing balance (433,996) (261,242) (36,754) (d) Reconciliation of the effective tax rate The amounts recorded as income tax and social contribution expenses in the financial statements are reconciled to the statutory rates, as shown below: December 31, 2019 December 31, 2018 December 31, 2017 Profit before income taxes 4,677,942 3,912,319 3,503,614 Statutory rate 34% 34% 34% Estimated expense at statutory rate (1,590,500) (1,330,186) (1,191,229) Tax benefit of interest on equity 312,339 264,816 245,444 Permanent differences Provision – Law 4,819/1958 – G0 (i) (44,426) (46,544) (57,104) Donations (19,888) (13,068) (12,413) Other differences 32,050 47,731 30,998 Income tax and social contribution (1,310,425) (1,077,251) (984,304) Current income tax and social contribution (1,155,463) (852,655) (882,787) Deferred income tax and social contribution (154,962) (224,596) (101,517) Effective rate 28% 28% 28% (i) Permanent difference related to the provision for actuarial liability (Note 20 (b) (iii)). |
19. Provisions
19. Provisions | 12 Months Ended |
Dec. 31, 2019 | |
Provisions [abstract] | |
Provisions | (a) Lawsuits and proceedings that resulted in provisions (I) Statement of financial position details The Company is party to a number of claims and legal proceedings arising from the normal course of business, including civil, tax, labor and environmental matters. Management recognizes provisions in the financial statements consistently with the recognition and measurement criteria established in Note 3.14. The ultimate timing and amounts of the payments depends on the outcome of the court cases. Provisions Escrow deposits December 31, 2019 Provisions Escrow deposits December 31, 2018 Customer claims (i) 253,665 (9,973) 243,692 290,649 (43,841) 246,808 Supplier claims (ii) 153,654 (298) 153,356 67,985 (24,380) 43,605 Other civil claims (iii) 93,910 (16,496) 77,414 98,302 (13,519) 84,783 Tax claims (iv) 59,143 (3,518) 55,625 63,335 (8,091) 55,244 Labor claims (v) 325,129 (12,329) 312,800 302,935 (10,932) 292,003 Environmental claims (vi) 192,950 (29) 192,921 170,419 - 170,419 Total 1,078,451 (42,643) 1,035,808 993,625 (100,763) 892,862 Current 550,247 - 550,247 458,387 - 458,387 Noncurrent 528,204 (42,643) 485,561 535,238 (100,763) 434,475 (II) Changes December 31, 2018 Additional provisions Interest and inflation adjustment Use of the accrual Amounts not used (reversal) December 31, 2019 Customer claims (i) 290,649 57,314 53,929 (99,379) (48,848) 253,665 Supplier claims (ii) 67,985 54,223 102,686 (42,948) (28,292) 153,654 Other civil claims (iii) 98,302 28,888 18,713 (9,766) (42,227) 93,910 Tax claims (iv) 63,335 11,821 2,918 (4,982) (13,949) 59,143 Labor claims (v) 302,935 167,995 61,483 (112,084) (95,200) 325,129 Environmental claims (vi) 170,419 42,198 24,358 (312) (43,713) 192,950 Subtotal 993,625 362,439 264,087 (269,471) (272,229) 1,078,451 Escrow deposits (100,763) (14,051) (11,844) 19,191 64,824 (42,643) Total 892,862 348,388 252,243 (250,280) (207,405) 1,035,808 December 31, 2017 Additional provisions Interest and inflation adjustment Use of the accrual Amounts not used (reversal) December 31, 2018 Customer claims (i) 438,619 29,732 40,749 (141,421) (77,030) 290,649 Supplier claims (ii) 332,037 36,100 21,161 (308,253) (13,060) 67,985 Other civil claims (iii) 114,544 22,578 12,939 (16,146) (35,613) 98,302 Tax claims (iv) 77,100 10,763 4,157 (2,490) (26,195) 63,335 Labor claims (v) 299,842 83,499 32,290 (44,900) (67,796) 302,935 Environmental claims (vi) 160,446 33,392 18,294 (115) (41,598) 170,419 Subtotal 1,422,588 216,064 129,590 (513,325) (261,292) 993,625 Escrow deposits (344,384) (53,205) (5,533) 269,248 33,111 (100,763) Total 1,078,204 162,859 124,057 (244,077) (228,181) 892,862 December 31, 2016 Additional provisions Interest and inflation adjustment Use of the accrual Amounts not used (reversal) December 31, 2017 Customer claims (i) 572,210 26,642 44,805 (138,466) (66,572) 438,619 Supplier claims (ii) 332,667 23,017 36,888 (39,433) (21,102) 332,037 Other civil claims (iii) 131,286 13,517 12,057 (19,975) (22,341) 114,544 Tax claims (iv) 69,898 6,877 7,392 (259) (6,808) 77,100 Labor claims (v) 285,413 55,106 38,861 (43,498) (36,040) 299,842 Environmental claims (vi) 150,084 32,377 16,156 (24,585) (13,586) 160,446 Subtotal 1,541,558 157,536 156,159 (266,216) (166,449) 1,422,588 Escrow deposits (368,483) (29,089) (7,823) 15,354 45,657 (344,384) Total 1,173,075 128,447 148,336 (250,862) (120,792) 1,078,204 (b) Lawsuits deemed as contingent liabilities The Company is party to lawsuits and administrative proceedings relating to environmental, tax, civil and labor claims, which are assessed as contingent liabilities in the financial statements, since it either does not expect outflows to be required or the amount of the obligation cannot be reliably measured. Contingent liabilities, net of escrow deposits, are represented as follows: December 31, 2019 December 31, 2018 Customer claims (i) 86,061 207,600 Supplier claims (ii) 1,986,736 1,459,100 Other civil claims (iii) 679,623 719,300 Tax claims (iv) 1,184,811 1,439,100 Labor claims (v) 631,364 624,200 Environmental claims (vi) 4,864,894 4,343,800 Total 9,433,489 8,793,100 (c) Explanation on the nature of main classes of lawsuits (i) Customer claims Approximately 680 lawsuits (890 as of December 31, 2018) were filed by commercial customers, who claim that their tariffs should correspond to other consumer categories, and 320 lawsuits (490 as of December 31, 2018) in which customers claim a reduction in the sewage tariff due to losses in the system, consequently requesting the refund of amounts charged by the Company and 30 lawsuits (40 as of December 31, 2018) in which customers plead the reduction in tariff under the category as “Social Welfare Entity”. The R$ 121,539 decrease in the lawsuits deemed as contingent liabilities was mainly due to the revisions of expectations arising from court decisions in the period. (ii) Supplier claims These lawsuits include lawsuits filed by some suppliers alleging underpayment of monetary restatements and the economic and financial imbalance of the agreements, and are in progress at different courts. The R$ 109,751 increase in accrued lawsuits was mainly due to revisions of expectations arising from court decisions in the period. The R$ 527,636 increase in lawsuits deemed as contingent liabilities is mainly due to updates and revisions of expectations arising on lawsuits in progress. (iii) Other civil claims These mainly refer to indemnities for property damage, pain and suffering, and loss of profits allegedly caused to third parties, such as vehicle accidents, claims, challenges on the methodology to collect tariffs, among others, filed at different court levels. (iv) Tax claims Tax claims refer mainly to issues related to tax collections and fines in general challenged due to disagreements regarding notification or differences in the interpretation of legislation by the Company's Management, that were accrued and others that were deemed as contingent liabilities. The R$ 254,289 decrease in lawsuits deemed as contingent liabilities was mainly due to changes in expectations arising from agreements with the municipalities of Guarujá and São Bernardo do Campo in the period. The municipality of São Paulo, through law, revoked the services tax exemption which until then the company withheld and thereafter issued tax deficiency notices related to the sewage service and ancillary activities, in the updated amount of R$ 664,669 (R$ 605,008 as of December 31, 2018), which currently are subject-matter of three Tax Foreclosures. SABESP filed a writ of mandamus against this revocation, which was rejected. Writs of prevention and actions for annulment were also filed, aiming the suspension of enforceability of credits and the annulment of tax deficiency notices, as it understands that notwithstanding the exemption revocation, the sewage activities and ancillary activities are not included in the list of activities subject to taxation by municipality. The appellate decision was favorable to the Company. The Municipality’s special and extraordinary appeal is still pending. The Company deemed the proceeding as contingent liability. (v) Labor claims The Company is a party to a number of labor lawsuits, involving issues such as overtime, shift schedule, health hazard premium and hazardous duty premium, prior notice, change of function, salary equalization, service outsourcing and other, which are at various court levels. (vi) Environmental claims These refer to several administrative proceedings and lawsuits filed by government entities, including Companhia Ambiental do Estado de São Paulo – CESTESB and the Public Prosecution Office of the State of São Paulo, that aim affirmative and negative covenants and penalty is estimated due to failure to comply in addition to the imposition of indemnity due to environmental damages allegedly caused by the Company. The R$ 22,502 and 521,004 increases in accrued lawsuits and deemed as contingent liabilities, respectively, are mainly due to updates and revision of estimates on lawsuits in progress in the period. Among the main lawsuits the Company is involved, there are public civil actions the subject-matters of which are: a) sentence SABESP to restrain itself from discharging or releasing sewage without due treatment; b) invest in the water and sewage treatment system of the municipality, under the penalty of paying a fine; c) payment of indemnity due to environmental damages, amongst others. (d) Other concession-related legal proceedings The Company is a party to concessions-related proceedings, where it challenges compensatory issues for the resumption of sanitation services by some municipalities or by the right to continue operating said services. The amount recorded as indemnities receivable in noncurrent assets, referring to municipalities of Cajobi, Macatuba, Álvares Florence, Embaúba, Araçoiaba da Serra, Itapira, Tuiuti e Mauá was R$ 114,335 as December 31, 2019 (R$ 109,990 as of December 31, 2018), with allowance for doubtful accounts in the full amount recorded. All municipalities mentioned are not operated by the Company. When a municipality is awarded a final an unappealable favorable sentence, allowing it to repossess sanitation service assets and operations, the Brazilian legislation provides for the indemnity of the Company’s investments. (e) Environmental lawsuits with settlements In 2019, the Company has not entered into any Environmental agreement. The accumulated balance as of December 31, 2019, corresponding to environmental indemnifications, totaled R$ 43,923 (R$ 44,828 as of December 31, 2018), recorded under “other liabilities”. (f) Guarantee insurance for escrow deposit On May 25, 2019, the Company contracted guarantee insurance for escrow deposit, effective for one year, in the amount of R$ 500 million. Such insurance will be used to settle legal claims instead of having cash disbursement by the Company, such insurance is used until the conclusion of these proceedings limited to up to five years. In 2019, the Company used R$ 126,4 million of the guarantee insurance (R$ 160,4 in 2018), of which R$ 75,5 million from the current contract with an outstanding amount of R$ 424,5 million from the current contract. |
20. Employees benefits
20. Employees benefits | 12 Months Ended |
Dec. 31, 2019 | |
Employees Benefits | |
Employees benefits | (a) Health plan – Medical Assistance Since August 1, 2019, the new health plans managed by Fundação CESP - FUNCESP, which replaced the previous health plans managed by SABESPREV, have been in effect. The health plan operator was changed by means of the signature of an Adhesion Agreement between the parties. The entire process was in accordance with the current industry law, which is applicable to SABESP, and was approved by the controlling authorities of the State Government. Benefits are now paid after the event, free of choice, sponsored by contributions of SABESP and the employees is as follows: Company: 9.3% (December 31, 2018 – 7.2%) on average, of gross payroll, totaling R$ 237,898 in 2019 (R$ 196,281 in 2018). (b) Pension plan benefits The Company has Post-Employment Benefit Plans in the following modalities: Defined Benefit (BD) – G1 (i) and G0 (ii); Defined Contribution (CD) – Sabesprev Mais (iii) and FUNCESP (iv). Statements of defined benefit plans Summary of pension obligations – Liabilities December 31, 2019 December 31, 2018 G1 Plan G0 Plan Total G1 Plan G0 Plan Total Present value of defined benefit obligations (3,067,094) (3,046,255) (6,113,349) (2,532,338) (2,606,107) (5,138,445) Fair value of the plan’s assets 2,752,417 - 2,752,417 2,168,436 - 2,168,436 Liability as per statement of financial position – pension obligations (314,677) (3,046,255) (3,360,932) (363,902) (2,606,107) (2,970,009) Pension obligations December 31, 2019 December 31, 2018 G1 Plan G0 Plan Total G1 Plan G0 Plan Total Plan’s liabilities Defined benefit obligation, beginning of the year (2,532,338) (2,606,107) (5,138,445) (2,319,841) (2,543,877) (4,863,718) Current service cost (47,001) (227,367) (274,368) (13,905) (232,248) (246,153) Interest cost (224,429) - (224,429) (213,201) - (213,201) Actuarial (gains)/losses recorded as other comprehensive income (392,876) (397,597) (790,473) (114,188) (10,783) (124,971) Benefits paid 129,550 184,816 314,366 128,797 180,801 309,598 Defined benefit obligation, end of the year (3,067,094) (3,046,255) (6,113,349) (2,532,338) (2,606,107) (5,138,445) Plan’s assets Fair value of the plan’s assets, beginning of the year 2,168,436 - 2,168,436 1,931,380 - 1,931,380 Expected return on the plan assets 192,965 - 192,965 179,449 - 179,449 Expected Company’s contributions 36,968 - 36,968 36,199 - 36,199 Expected participant’s contributions 38,391 - 38,391 36,336 - 36,336 Benefits paid (129,549) - (129,549) (128,797) - (128,797) Actuarial gains/(losses) recorded as other comprehensive income 445,206 - 445,206 113,869 - 113,869 Fair value of the plan’s assets, end of the year 2,752,417 - 2,752,417 2,168,436 - 2,168,436 (Deficit)/Surplus (314,677) (3,046,255) (3,360,932) (363,902) (2,606,107) (2,970,009) Despite the decrease in interest rate in the year, the decrease of actuarial deficit in G1 Plan was mainly due to the higher profitability of the plan’s assets. Other comprehensive income Pursuant to IAS19, the Company recognizes gains/(losses), due to changes in assumptions under equity, as valuation adjustments to equity, as shown below: December 31, 2019 December 31, 2018 December 31, 2017 G1 Plan G0 Plan Total G1 Plan G0 Plan Total G1 Plan G0 Plan Total Actuarial gains/(losses) on obligations (392,876) (397,597) (790,473) (114,188) (10,783) (124,971) 305,511 51,535 357,046 Actuarial gains/(losses) recorded as other comprehensive income 445,206 - 445,206 113,869 - 113,869 52,083 - 52,083 Total gains/(losses) 52,330 (397,597) (345,267) (319) (10,783) (11,102) 357,594 51,535 409,129 Deferred income tax and social contribution (17,792) - (17,792) 108 - 108 (121,582) - (121,582) Valuation adjustments to equity 34,538 (397,597) (363,059) (211) (10,783) (10,994) 236,012 51,535 287,547 The amounts recognized in the year are as follows: December 31, 2019 December 31, 2018 December 31, 2017 G1 Plan G0 Plan Total G1 Plan G0 Plan Total G1 Plan G0 Plan Total Cost of service, net 8,609 227,367 235,976 (22,431) 232,248 209,817 (35,093) 262,873 227,780 Interest cost rates 224,429 - 224,429 213,201 - 213,201 260,409 - 260,409 Expected return on the plan’s assets (192,965) - (192,965) (179,449) - (179,449) (183,689) - (183,689) Amount received from GESP (undisputed) - (97,300) (97,300) - (96,282) (96,282) - (95,191) (95,191) Total expenses 40,073 130,067 170,140 11,321 135,966 147,287 41,627 167,682 209,309 Actuarial assumptions: December 31, 2019 December 31, 2018 December 31, 2017 G1 Plan G0 Plan G1 Plan G0 Plan G1 Plan G0 Plan Discount rate – actual rate (NTN-B) 3.37% a.a. 3.36% a.a. 4.91% a.a. 4.84% 5.35% a.a. 5.30% Inflation rate 3.5% a.a. 3.5% a.a. 4.01% a.a. 4.01% 3.96% a.a. 3.96% Expected nominal rate of return on assets 6.99%a.a. - 9.12%a.a. - 9.52%a.a. - Nominal rate of salary growth 5.57% a.a. 5.57% a.a 6.09% a.a. 6.09% a.a 6.04% a.a. 6.04% a.a Mortality table AT-2000 AT-2000 AT-2000 AT-2000 AT-2000 AT-2000 Sensitivity analysis Sensitivity analysis of the defined benefit pension plan as of December 31, 2019 regarding the changes in the main assumptions are: Impact on presente value of the defined benefit obligations Assumptions Change in assumption G1 G0 Discount rate Increase of 1.0% Decrease of R$ 326,714 Decrease of R$ 301,727 Decrease of 1.0% Increase of R$ 396,026 Increase of R$ 314,156 Life expectation Increase of 1 year Increase of R$ 80,048 Increase of R$ 117,324 Decrease of 1 year Decrease of R$ 72,676 Decrease of R$ 140,051 Wage increase rate Increase of 1.0% Increase of R$ 36,140 Increase of R$ 388,886 Decrease of 1.0% Decrease of R$ 31,070 Decrease of R$ 372,127 (i) G1 Plan Managed by Sabesprev, the defined benefit plan (“G1 Plan”) receives similar contributions established in a plan of subsidy of actuarial study of Sabesprev, as follows: · 0.99% of the portion of the salary of participation up to 20 salaries; and · 8.39% of the surplus, if any, of the portion of the salary of participation over 20 salaries. In 2019, the expenses related to defined benefit obligation amounting to R$ 29,637, R$ 4,187 and R$ 2,685 were recorded in operating costs, and selling and administrative expenses, respectively (R$ 7,530, R$ 1,133 and R$ 704 in 2018 and R$ 35,156, R$ 1,864 and R$ 619 in 2017). The amount of R$ 3,564 (R$ 1,955 in 2018) was capitalized in assets. The active participants as of December 31, 2019 totaled 3,758 (4,056 as of December 31, 2018), while inactive participants were 7,399 (7,149 as of December 31, 2018). The expected benefit to be paid in 2020 referring to the G1 pension plan is R$ 167,202. The contributions of the Company and participants of the G1 Plan in 2019 were R$ 36,968 (R$ 36,199 in 2018) and R$ 38,391 (R$ 36,336 in 2018), respectively. Of this amount, the Company and the participants’ payments corresponding to the actuarial deficit of the G1 pension plan totaled R$ 25,531 and R$ 13,497, respectively, in 2019. Estimated expenses 2020 Service cost 3,796 Interest cost rates 208,485 Net profitability on financial assets (187,317) Expense to be recognized by the employeer 24,964 Plan’s assets The plan’s investment policies and strategies are aim at getting consistent returns and reduce the risks associated to the utilization of financial assets available on the Capital Markets through diversification, considering factors, such as the liquidity needs and the long-term nature of the plan liability, types and availability of financial instruments in the local and international markets, general economic conditions and forecasts as well as requirements under the law. The plan's asset allocation management strategies are determined with the support of reports and analysis prepared by Sabesprev and independent financial advisors: December 31, 2019 % December 31, 2018 % Total fixed income 1,795,554 65.2 1,477,643 68.1 Total equities 301,707 11.0 249,740 11.6 Total structures investments 630,933 22.9 431,828 19.9 Other 24,223 0.9 9,225 0.4 Fair value of the plan’s assets 2,752,417 100 2,168,436 100 Restrictions with respect to asset portfolio investments, in the case of federal government securities: i) instruments securitized by the National Treasury will not be permitted; ii) derivative instruments must be used for hedge. Restrictions with respect to asset portfolio investments, in the case of variable-income securities for internal management, are as follows: i) day-trade operations will not be permitted; ii) sale of uncovered share is prohibited; iii) swap operations without guarantee are prohibited iv) leverage will not be permitted, i.e., operations with derivatives representing leverage of asset or selling short, such operations cannot result in losses higher than invested amounts. As of December 31, 2019, Sabesprev did not have financial assets issued by the Company in its own portfolio; however, said assets could have been part of the investment fund portfolio invested by the Foundation. The real estate held in the portfolio is not used by the Company. (ii) G0 Plan Pursuant to State Law 4,819/1958, employees who started providing services prior to May 1974 and retired as an employee of the Company acquired a legal right to receive supplemental pension payments, which rights are referred as "G0 Plan ". The Company pays these supplemental benefits on behalf of the State Government and makes claims for reimbursements from the State Government, which are recorded as accounts receivable from related parties, limited to the amounts considered virtually certain that will be reimbursed by the State Government. The number of active participants of Plan - Go as of December 31, 2019 and 2018 was 10. The number of beneficiaries, retirees and survivors as of December 31, 2019 was 1,960 (2,038 as of December 31, 2018). The benefit payable from the Go pension plan expected for 2020 is R$180,382. In 2019 and 2018, the expenses related to the defined benefit obligation under Plan G0 were recorded in administrative expenses. Estimated expenses for 2020 2020 Interest cost rate 206,262 Expense to be recognized 206,262 (iii) Sabesprev Mais Plan As of December 31, 2019, this Defined Contribution Plan administered by Sabesprev had had 9,774 active and assisted participants (9,586 as of December 31, 2018). With respect to the Sabesprev Mais plan, the contributions from the sponsor represent 100% over the total basic contribution from the participants. In 2019, the expenses related to defined pension plan amounting to R$ 14,293, R$ 1,865 and R$ 3,845 were recorded in operating costs, and selling and administrative expenses, respectively (R$ 13,227, R$ 1,820 and R$ 3,599 in 2018 and R$ 12,034, R$ 1,744 and R$ 3,245 in 2017). The amount of R$ 2,458 (R$ 2,115 in 2018) was capitalized in assets. (iv) FUNCESP plan Sabesprev Mais Plan was closed to new adhesions on December 31, 2019, and as of January 1, 2020, hired employees will have the option to join the Fundação Cesp Defined Contribution Plan (FUNCESP), as well as those employees not opting for the Sabesprev Mais Plan. (c) Profit sharing The Company has a profit-sharing program in accordance with an agreement with labor union and SABESP. The period covered represents the Company fiscal year, from January to December 2019. The limit of the profit sharing is up to one-month salary for each employee, depending on performance goals reached. As of December 31, 2019, the Program’s balance payable was recorded under “salaries, payroll charges and social contributions” in the amount of R$ 93,486 (R$ 110,464 as of December 31, 2018). |
21. Services payable
21. Services payable | 12 Months Ended |
Dec. 31, 2019 | |
Services Payable | |
Services payable | The services account records the balances payable, mainly from services received from third parties, such as supply of electric power, reading of hydrometers and delivery of water and sewage bills, cleaning, surveillance and security services, collection, legal counsel services, audit, marketing and advertising and consulting services, among others. This account also includes the amounts payable to the Municipal Fund of Environmental Sanitation and Infrastructure based on a percentage of the revenues from São Paulo municipal government (Note 14 (c) (v) (6)). The balances as of December 31, 2019 and 2018 were R$ 474,078 and R$ 454,022, respectively. |
22. Knowledge retention program
22. Knowledge retention program | 12 Months Ended |
Dec. 31, 2019 | |
Knowledge Retention Program | |
Knowledge retention program | a) Knowledge Retention Program (PRC) In June 2018, SABESP implemented the Knowledge Retention Program (PRC), which is expected to end in December 2020, aiming to provide personnel planning conditions and mitigate the impact of the exit of employees who possess strategic knowledge acquired throughout their career. For those enrolled in the Program, the compliance with the agreements of the Collective Bargaining Agreement effective on the date of termination is thereby guaranteed. They will also receive a severance incentive proportional to the length of service at SABESP, corresponding to a percentage of the balance of the Guarantee Fund for Length of Service (FGTS), for termination purposes, on the date of termination. In 2019, the Company paid the amount of R$ 43,905, corresponding to the exit of employees enrolled in the Program. As of December 31, 2019, the total balance was R$ 153,377 in current liabilities (as of December 31, 2018 - R$ 74,324 in current liabilities and R$ 122,148 in non-current liabilities). b) Consent Decree (“TAC”) On February 20, 2009, SABESP signed a Consent Decree, proposed by the State Prosecution Office, in which the Company undertook to: a) continue hiring employees by means of public competition, except for filling positions in commission or trust functions; b) gradually dismissing retired employees, replacing them with permanent staff, except in segments where increased efficiency requires the reduction in the effective number of employees. The Consent Decree clarifies “the need of training and carrying out phased dismissal of approximately two thousand an two hundred (2,200) retired employees within a reasonable period of time, as well as those who will retire in the future”, On October 11, 2019, the Prosecutor filed the Consent Decree stating that for the time elapsed and the successive information provided by SABESP, the objective of the Consent Decree was fully complied with. Accordingly, the amount of R$ 173,284, corresponding to the provisioned amount related to number of employees who retired after February 20, 2009 was reversed, taking into consideration that the Consent Decree was filed following the dismissal of the 2,200 retired employees on the date the Decree was signed. As of December 31, 2019, the amount provisioned under “Labor obligations”, related to the Consent Decree totaled R$ 10,472 (R$ 140,818 as of December 31, 2018), of which R$ 8,242 (R$ 136,293 as of December 31, 2018) under current liabilities, and R$ 2,230 (R$ 4,525 as of December 31, 2018) under noncurrent liabilities. |
23. Equity
23. Equity | 12 Months Ended |
Dec. 31, 2019 | |
Equity | |
Equity | (a) Authorized capital As of December 31, 2019 and 2018 the Company’s capital is R$ 15,000,000. (b) Subscribed and paid-in capital As of December 31, 2019 and 2018, subscribed and paid-in capital was represented by 683,509,869 registered, book-entry common shares with no par value, as follows: December 31, 2019 December 31, 2018 Number of shares % Number of shares % State Department of Finance 343,524,285 50.26 343,524,285 50.26 Companhia Brasileira de Liquidação e Custódia (**) 235,643,765 34.47 212,612,143 31.10 The Bank of New York ADR Department (equivalent in shares) (*) (**) 103,823,655 15.19 125,278,967 18.33 Other 518,164 0.08 2,094,474 0.31 683,509,869 100.00 683,509,869 100.00 (*) each ADR corresponds to 1 share. (**) custodians (c) Distribution of earnings Shareholders are entitled to a minimum mandatory dividend of 25% of the adjusted net income under Brazilian GAAP, calculated according to the Brazilian corporate law. The dividends do not bear interest and the amounts not claimed within three years from the date of the Shareholders' Meeting that approved them mature in favor of the Company. 2019 2018 2017 Profit for the year 3,367,517 2,835,068 2,519,310 (-) Legal reserve - 5% 168,376 141,755 125,965 3,199,141 2,693,313 2,393,345 Minimum mandatory dividend – 25% 799,785 673,328 598,336 Dividend per share and per ADS 1.17012 0.9851 0.87539 On April 29, 2019, the Shareholders’ General Meeting approved the distribution of dividends as interest on capital amounting to R$ 118,859, for the 2018 fiscal year. Therefore, the amount of R$ 60,331 related to the surplus minimum mandatory dividends of 25%, set forth in the Bylaws, recorded in the 2018 equity under “Additional proposed dividends” was transferred to current liabilities. These amounts started being paid in June 2019. The Company proposed dividends as interest on capital ad referendum Pursuant to CVM Resolution 207/1996, the Company imputed interest on capital to the minimum dividend by its net value of withholding income tax. The amount of R$ 60,230 (R$ 58,258 in 2018) referring to the withholding income tax was recognized in current liabilities, in order to comply with tax liabilities related to the credit of interest on capital. The interest on capital balance payable as of December 31, 2019, totaling R$ 800,352 (R$ 673,765 in 2018), refers to the amount of R$ 799,785 (R$ 673,328 in 2018) declared in 2019, net of withholding income tax and R$ 567 declared in previous years (R$ 437 in 2018). (d) Legal reserve Earnings reserve - legal reserve is a requirement for all Brazilian corporations and represents an allocation of retained earnings of 5% of annual net income determined based on Brazilian law, up to 20% of capital. However, we are not required to make any allocations to our legal reserve in a year in which the legal reserve, when added to our other established capital and earnings reserves, exceeds 30% of our capital stock. The amounts allocated to such reserve may only be used to increase our capital stock or to offset losses and are not available for the payment of dividends. (e) Investments reserve Earnings reserve - investments reserve is specifically formed by the portion corresponding to own funds assigned to the expansion of the water supply and sewage treatment systems, based on capital budget approved by the Management. As of December 31, 2019 and 2018, the balance of investment reserve totaled R$6,098,575 and R$3,840,422, respectively. Pursuant to paragraph four of article 28 of the by-laws, the Board of Directors may propose to the Shareholders’ Meeting that the remaining balance of profit for the year, after deducting the legal reserve and minimum mandatory dividends, be allocated to an investment reserve that will comply with the following criteria: I- its balance, jointly with the balance of the other earnings reserves, except for reserves for contingencies and realizable profits, may not exceed the capital stock; II- the reserve is intended to guarantee the investment plan and its balance may be used: a) to absorb losses, whenever necessary; b) to distribute dividends, at any moment; c) in share redemption, reimbursement or purchase transactions authorized by law; d) in incorporation to the capital stock. (f) Allocation of profit for the year 2019 2018 2017 Profit (+) Profit for the year 3,367,517 2,835,068 2,519,310 (-) Legal reserve – 5% 168,376 141,755 125,965 (-) Minimum mandatory dividends 799,785 673,328 598,336 (-) Additional proposed dividends 141,203 118,859 105,543 Investment reserve recorded 2,258,153 1,901,126 1,689,466 Management will send for approval at the Shareholders’ Meeting, a proposal to reallocate retained earnings the amount of R$2,258,153 to the Investment Reserve account, in order to meet the investment needs foreseen in the Capital Budget. (g) Retained earnings Retained earnings (accumulated losses): the statutory balance of this account is zero as all retained earnings must be distributed or allocated to an earnings reserve. (h) Other comprehensive loss Gains and losses arising from changes in the actuarial assumptions are accounted for as equity valuation adjustments, net of income tax and social contribution effects. See Note 20 (b), the breakdown of amounts recorded in 2019 and 2018. G1 plan G0 plan Total Balance as of December 31, 2018 70,716 (619,811) (549,095) Actuarial gains/(losses) for the year (Note 20 (b)) 34,538 (397,597) (363,059) Balance as of December 31, 2019 105,254 (1,017,408) (912,154) |
24. Earnings per share
24. Earnings per share | 12 Months Ended |
Dec. 31, 2019 | |
Earnings per share [abstract] | |
Earnings per share | Basic and diluted Basic earnings per share is calculated by dividing the equity attributable to the Company’s owners by the weighted average number of outstanding common shares during the year. The Company does not have potentially dilutive common shares outstanding or debts convertible into common shares. Accordingly, basic and diluted earnings per share are equal. 2019 2018 2017 Earnings attributable to Company’s owners 3,367,517 2,835,068 2,519,310 Weighted average number of common shares issued 683,509,869 683,509,869 683,509,869 Basic and diluted earnings per share (reais per share) 4.93 4.15 3.69 |
25. Operating segment informati
25. Operating segment information | 12 Months Ended |
Dec. 31, 2019 | |
Disclosure of operating segments [abstract] | |
Operating segment information | Management, comprised of the Board of Directors and Board of Executive Officers, has determined the operating segment used to make strategic decisions, as sanitation services. Result 2019 Sanitation (i) Reconciliation to the financial statements (ii) Balance as per financial statements Gross operating revenue 16,134,032 2,946,566 19,080,598 Gross sales deductions (1,096,944) - (1,096,944) Net operating revenue 15,037,088 2,946,566 17,983,654 Costs, selling and administrative expenses (9,375,590) (2,881,394) (12,256,984) Income from operations before other net operating expenses, net and equity accounting 5,661,498 65,172 5,726,670 Other operating income / (expenses), net (18,748) Equity accounting 3,701 Financial result, net (1,033,681) Income from operations before taxes 4,677,942 Depreciation and amortization (1,780,094) (1,780,094) (i) See note 32 for further information about non-cash items, other than depreciation and amortization that impact segment results, and for additionals to long-lived asset information; (ii) Construction revenue and related costs not reported to the CODM. Revenue from construction is recognized in accordance with IFRIC 12 (Concession Agreements) and IFRS 15 (Revenue from Contracts with Customers), as all performance obligations are satisfied over time. See Note 14 (e). 2018 Sanitation (i) Reconciliation to the financial statements (ii) Balance as per financial statements Gross operating revenue 14,253,609 2,802,670 17,056,279 Gross sales deductions (971,185) - (971,185) Net operating revenue 13,282,424 2,802,670 16,085,094 Costs, selling and administrative expenses (8,203,883) (2,739,657) (10,943,540) Income from operations before other net operating expenses, net and equity accounting 5,078,541 63,013 5,141,554 Other operating income / (expenses), net 28,591 Equity accounting 6,510 Financial result, net (1,264,336) Income from operations before taxes 3,912,319 Depreciation and amortization (1,392,541) (1,392,541) (i) See note 32 for further information about non-cash items, other than depreciation and amortization that impact segment results, and for additionals to long-lived asset information; (ii) Construction revenue and related costs not reported to the CODM. Revenue from construction is recognized in accordance with IFRIC 12 (Concession Agreements) and IFRS 15 (Revenue from Contracts with Customers), as all performance obligations are satisfied over time. See Note 14 (e). 2017 Sanitation (i) Reconciliation to the financial statements (ii) Balance as per financial statements Gross operating revenue 12,223,746 3,150,877 15,374,623 Gross sales deductions (766,390) - (766,390) Net operating revenue 11,457,356 3,150,877 14,608,233 Costs, selling and administrative expenses (7,566,104) (3,080,542) (10,646,646) Income from operations before other net operating expenses, net and equity accounting 3,891,252 70,335 3,961,587 Other operating income / (expenses), net (5,679) Equity accounting 5,760 Financial result, net (458,054) Income from operations before taxes 3,503,614 Depreciation and amortization (1,301,897) - (1,301,897) (i) See note 32 for further information about non-cash items, other than depreciation and amortization that impact segment results, and for additionals to long-lived asset information; (ii) Construction revenue and related costs not reported to the CODM. Explanation on the reconciliation items for the financial statements. The impacts on gross operating income and costs are as follows: 2019 2018 2017 Gross revenue from construction recognized under IFRIC 12 (a) 2,946,566 2,802,670 3,150,877 Construction costs recognized under IFRIC 12 (a) (2,881,394) (2,739,657) (3,080,542) Construction margin 65,172 63,013 70,335 (a) Revenue from concession construction contracts is recognized in accordance with Note 3.3 (b ). |
26. Insurance
26. Insurance | 12 Months Ended |
Dec. 31, 2019 | |
Insurance | |
Insurance | The Company has insurance that covers fire and other damage to its assets and office buildings, and liabilities to third parties, among others. It also has civil liability insurance for the members of the Board of Directors and Board of Executive Officers (“D&O insurance”) and guarantee insurance for escrow deposit (as described in Note 19 (f)) and traditional guarantee insurance. The Company contracts insurance through bidding processes with the participation of the main Brazilian and international insurance companies that operate in Brazil. As of December 31, 2019, the Company’s insurance coverage is as follows: Coverage Specified risks – fire 2,185,827 Engineering risk 1,960,248 Guarantee insurance for escrow deposit 500,000 Traditional guarantee insurance 100,000 Civil liability– D&O (Directors and Officers) 100,000 Civil liability – works 105,695 Domestic and international transportation 6,058 Civil liability – operations 5,000 Other 14 Total 4,962,842 |
27. Operating revenue
27. Operating revenue | 12 Months Ended |
Dec. 31, 2019 | |
Operating Revenue | |
Operating revenue | (a) Revenue from sanitation services: 2019 2018 2017 Metropolitan region of São Paulo 11,849,776 10,295,509 8,636,926 Regional Systems 4,284,256 3,958,100 3,586,820 Total 16,134,032 14,253,609 12,223,746 (b) Reconciliation between gross operating income and net operating income: 2019 2018 2017 Revenue from sanitation services (i) 16,134,032 14,253,609 12,223,746 Construction revenue 2,946,566 2,802,670 3,150,877 Sales tax (1,035,051) (916,808) (757,619) Regulatory, Control and Oversight Fee (TRCF) (ii) (61,893) (54,377) (8,771) Net revenue 17,983,654 16,085,094 14,608,233 (i) Includes the amount of R$70,122 corresponding to the TRCF charged from customers from the municipalities regulated by ARSESP (R$ 63,901 in 2018). (ii) Amount payable to ARSESP referring to regulatory, control and oversight activities, pursuant to State Complementary Law 1,025/07. |
28. Operating costs and expense
28. Operating costs and expenses | 12 Months Ended |
Dec. 31, 2019 | |
Operating Costs And Expenses | |
Operating costs and expenses | 2019 2018 2017 Operating costs Salaries, payroll charges and benefits (1,938,265) (1,959,539) (1,841,571) Pension obligations (49,564) (25,066) (48,381) Construction costs (Note 25) (2,881,394) (2,739,657) (3,080,542) General supplies (259,401) (238,034) (163,712) Treatment supplies (310,380) (265,146) (287,592) Outsourced services (1,250,890) (996,477) (857,063) Electricity (1,140,160) (956,840) (794,352) General expenses (647,804) (629,253) (531,985) Depreciation and amortization (1,659,779) (1,276,444) (1,173,765) (10,137,637) (9,086,456) (8,778,963) Selling expenses Salaries, payroll charges and benefits (270,549) (289,378) (305,440) Pension obligations (6,848) (3,602) (7,296) General supplies (10,332) (6,391) (4,451) Outsourced services (360,190) (273,470) (258,287) Electricity (1,333) (1,154) (762) General expenses (122,503) (102,213) (94,112) Depreciation and amortization (31,649) (17,272) (15,664) (803,404) (693,480) (686,012) Bad debt expense, net of recoveries (Note 9 (c)) (128,099) (166,727) (82,681) Administrative expenses Salaries, payroll charges and benefits (278,507) (254,284) (229,752) Pension obligations (138,207) (141,758) (171,830) General supplies (3,216) (4,881) (5,675) Outsourced services (197,357) (204,728) (183,746) Electricity (1,436) (1,363) (965) General expenses (407,250) (232,288) (302,113) Depreciation and amortization (88,666) (98,825) (112,468) Tax expenses (73,205) (58,750) (92,441) (1,187,844) (996,877) (1,098,990) Operating costs and expenses Salaries, payroll charges and benefits (2,487,321) (2,503,201) (2,376,763) Pension obligations (194,619) (170,426) (227,507) Construction costs (Note 25) (2,881,394) (2,739,657) (3,080,542) General supplies (272,949) (249,306) (173,838) Treatment supplies (310,380) (265,146) (287,592) Outsourced services (1,808,437) (1,474,675) (1,299,096) Electricity (1,142,929) (959,357) (796,079) General expenses (1,177,557) (963,754) (928,210) Depreciation and amortization (1,780,094) (1,392,541) (1,301,897) Tax expenses (73,205) (58,750) (92,441) Bad debt expense, net of recoveries (Note 9 (c)) (128,099) (166,727) (82,681) (12,256,984) (10,943,540) (10,646,646) |
29. Financial income (expenses)
29. Financial income (expenses) | 12 Months Ended |
Dec. 31, 2019 | |
Financial Income | |
Financial income (expenses) | 2019 2018 2017 Financial expenses Interest and charges on borrowings and financing – local currency (331,367) (332,149) (289,780) Interest and charges on borrowings and financing – foreign currency (165,421) (171,686) (119,100) Other financial expenses (i) (344,508) (187,563) (97,533) Income tax over international remittance (17,650) (19,779) (17,901) Inflation adjustment on borrowings and financing (ii) (44,802) (66,183) (62,787) Other inflation adjustments (i) (107,584) (45,193) (50,941) Interest and inflation adjustments on provisions (iii) (162,093) 14,586 (50,238) Total financial expenses (1,173,425) (807,967) (688,280) Financial income Inflation adjustment gains (iv) 91,180 105,952 89,010 Income on short-term investments (v) 151,622 187,094 195,992 Interest income (vi) 150,054 175,939 57,166 Cofins and Pasep (20,028) (22,693) (16,366) Other 14 10 442 Total financial income 372,842 446,302 326,244 Financial income (expenses), net before exchange rate changes (800,583) (361,665) (362,036) Exchange gains (losses) Exchange rate changes on borrowings and financing (vii) (233,960) (915,897) (96,300) Exchange rate changes on assets 863 13,235 336 Other exchange rate changes (1) (9) (54) Exchange rate changes, net (233,098) (902,671) (96,018) Financial income (expenses), net (1,033,681) (1,264,336) (458,054) (i) Increase in recognition of interest on Public-Private Partnership (PPP) contracts, due to the beginning of the the service provision of São Lourenço Production System (SPSL), on July 10, 2018. (ii) Decrease of R$ 21.4 milion in monetary variation derives mainly on local borrowings and financing, mainly in debentures, due to the amortization of the 15 th th (iii) Lawsuits accrued interest and monetary restatement due to inflation in Brazil. The increase in interest and monetary restatement on lawsuits is due to a change in the expectations regarding unfavorable outcome of the court cases against the Company. (iv) The monetary variations gains decreased mainly due to the higher restatement on escrow deposits. (v) The decrease is a result of the reduction in the CDI rate, of 6.42% p.a. in 2019 and 5.96% p.a. in 2018. The average balance applied in 2019 was R$ 2.199 billion, compared to R$ 2.972 billion in 2018. (vi) The increase in interest income is mainly due to the recognition of interest on installment agreements with customers, in 2018 (vii) Decrease of R$ 681.9 million in exchange rate changes on borrowings and financing mainly due to the lower appreciation of the U.S. dolar and the Yen against the Real in 2019 (4.0% and 5.3%, respectively), compared to appreciation presented in 2018 (17.1% and 20.0, respectively). |
30. Other operating income (exp
30. Other operating income (expenses), net | 12 Months Ended |
Dec. 31, 2019 | |
Other Operating Income Expenses Net | |
Other operating income (expenses), net | 2019 2018 2017 Other operating income, net 75,667 93,089 75,410 Other operating expenses (94,415) (64,498) (81,089) Other operating income (expenses), net (18,748) 28,591 (5,679) Other operating income is comprised by sale of property, plant and equipment, sale of contracts awarded in public bids, right to sell electricity, indemnities and reimbursement of expenses, fines and collaterals, property leases, reuse water, PURA projects and services, net of Cofins and Pasep. Other operating expenses consist mainly of derecognition of concessions assets due to obsolescence, discontinued construction works, unproductive wells, projects considered economically unfeasible, losses on property, plant and equipment and exceeding cost of electricity sold. |
31. Commitments
31. Commitments | 12 Months Ended |
Dec. 31, 2019 | |
Commitments | |
Commitments | The Company has agreements to manage and maintain its activities, as well as agreements to build new projects aiming at achieving the objectives proposed in its target plan. Below, the main unrecorded committed amounts as of December 31, 2019: 1 year 1-3 years 3-5 years More than 5 years Total Contractual obligations – Expenses 944,045 2,787,402 1,188,276 3,006,756 7,926,479 Contractual obligations – Investments 2,247,765 2,015,873 745,603 36,611 5,045,852 Total 3,191,810 4,803,275 1,933,879 3,043,367 12,972,331 The main commitment refers to the São Lourenço PPP. See Note 14 (g). |
32. Supplemental cash flow info
32. Supplemental cash flow information | 12 Months Ended |
Dec. 31, 2019 | |
Supplemental Cash Flow Information | |
Supplemental cash flow information | 2019 2018 2017 Total additions of contract assets (Note 13) 3,532,283 3,188,943 - Total additions to intangible assets (Note 14 (b)) 1,788,907 1,144,728 3,490,298 Items not affecting cash (see breakdown below) (2,125,943) (2,201,112) (1,532,518) Total additions to intangible assets as per statement of cash flows 3,195,247 2,132,559 1,957,780 Investment and financing operations affecting intangible assets but not cash: Interest capitalized in the year (Note 14 (d)) 233,251 488,502 649,048 Contractors payable 252,675 297,872 213,340 Program contract commitments 35,817 149,974 95,126 Public Private Partnership - São Lourenço PPP (Note 14 (g)) 10,591 273,737 501,591 Leases - - 3,078 Performance agreements 78,296 - - Right of use 113,233 - - Construction margin (Note 25) 65,172 63,013 70,335 Agreement with the Municipality of Santo André (Note 9 (a)) 1,336,908 Agreement with the municipality of Guarulhos (Note 9 (a)) - 928,014 - Total 2,125,943 2,201,112 1,532,518 |
33. Events after the reporting
33. Events after the reporting period | 12 Months Ended |
Dec. 31, 2019 | |
Events After Reporting Period | |
Events after the reporting period | 25th Issuance of Debentures On February 20, 2020, the Board of Directors approved the 25th issuance simple, unsecured, non-convertible debentures, in up to three series, for public distribution, with restricted placement efforts, pursuant to CVM Instruction nº 476, in the total amount of R $ 1,000,000,000.00. The amount of Debentures to be allocated in each series of the Offer will occur through the communicating vessels system. In April 27, 2020, Sabesp carried out the twenty-fifth issuance of debentures of R$1.45 billion, with a maturity date of October 2021 and bearing interest at a rate of CDI plus 3.30% per year. Considering the uncertainties arising from the coronavirus crisis and its effect on the economy and financial markets, the Company decided to increase the amount issued in R$ 450 million. The proceeds from the issuance and offering of the Debentures will be used to the refinance of its financial commitments maturing in 2020 and to replenish the Company's cash position. COVID-19 (Coronavirus) The services provided by the Company become even more essential to society in the context of the COVID 19 pandemic. The interruption of water supply by a basic sanitation company may compromise the guidance given by the World Health Organization (WHO) so that everyone maintains good hygiene habits, such as washing your hands correctly and more often. The Company has implemented several preventive measures so that its employees are not exposed to risky situations, such as: (i) use of home-office practice particularly in the administrative sectors and for all employees over 60; (ii) restriction of national and international travel; (iii) use of remote communication; (iv) anticipation of the vaccination campaign; among others. The Company additionally took all necessary preventive measures so that employees with strategic functions can comply with them without increasing the risk of contamination, ensuring continuity in the provision of essential services. Some materials used in the treatment of water and sewage are imported and may suffer some type of restriction, however these can be replaced by alternative products in Brazil. Accordingly, there is no expectation of any negative effect on the Company's operations. On March 20, 2020, SABESP released a Material Fact stating that the Executive Board approved the proposal to exempt customer categories consumption of "Residencial Social" and "Residencial Favela (Shantytown)" from paying water/sewage bills. This measure covers all municipalities operated for a period of 90 days and refer to accounts issued as of April 1, 2020, which must be ratified by the Board of Directors. To preserve the economic and financial sustainability of Company, the impact on revenue may be offset by reduced expenses and budgetary adjustments. On March 22, 2020, the São Paulo State Government decreed quarantine throughout the State, restricting activities in order to avoid the accelerated spread of COVID 19. In this sense, the Company's revenues in the commercial and public categories may have a negative impact in future reporting periods due to the reduction in the level of activity. On the other hand, this same measure may increase consumption in the residential category. The trend in the industrial category is not clear, since there are sectors that will increase production and, therefore, increase the demand for water, while others will have to reduce it. In order to cope with the constant investments in infrastructure, the Company annually uses third party capital, as a complement to its own resources. The impacts of COVID-19 in attracting borrowings and financing is still uncertain, however the Company has sufficient resources of funds to fulfill its short and medium term strategy for the next 12 months. At this time, it is not possible to assess all the impacts that COVID-19 may have in the future, for this reason this topic is being assessed daily by the Company's management. On March 30, 2020, the Board of Directors ratified the exemption approved by the Executive Board On March 19, 2020 that deals with the proposal to exempt customer categories consumption of "Residencial Social" and "Residencial Favela (Shantytown)", registered on March 19, 2020, from paying water/sewage bills for 90 days for bills issued as of April 1, 2020, covering all municipalities operated by the Company. Tariff Adjustment Index On April 9, 2020, the São Paulo State Sanitation and Energy Regulatory Agency ("ARSESP") published Resolutions nº 980 and nº 979. Resolution nº 980 disclosing a tariff adjustment index of 2.4924% for the Company, broken down as follows: · IPCA variation of 3.3032% in the period; · Efficiency Factor (X Factor) of 0.6920%; and · Quality factor (Q Factor) of -0.1188%. However, considering Official Letter SIMA/GAB/370/2020, of the State Secretariat for Infrastructure and Environment, which requests ARSESP to evaluate the possibility of postponing the tariff adjustment for 90 days, further to Decree 64,879/2020, recognizing the state of public calamity resulting from the COVID-19 pandemic, ARSESP decided: · To postpone the publication of the new tariff tables, resulting from the annual tariff adjustment to June 10, 2020; · The adjusted tariff tables, including the tables of the municipalities of Iperó, Pereiras, Santa Branca and Santa Isabel, will be published by June 10, 2020 and will be applied as of thirty days from their publication, pursuant to Law 11,445/2007; · The compensatory adjustments for the postponement of the application of the annual tariff adjustment will be calculated until June 10, 2020; and · The amount to be compensated will be distributed in the tariffs in the period between July 10, 2020 and May 10, 2021, when the results of the Third Ordinary Tariff Revision will be applied. Resolution No. 979 informs that ARSESP will evaluate the economic-financial balance of the provision of services in order to restore it in due course, if necessary, as a result of the impact of the exemption from tariffs on water / sewage bills of consumers in the "Residential Social" and "Residential Favela (Shantytown)" categories consumption, registered on 03/19/2020 for 90 days for accounts issued as of 04/01/2020 and which will cover all municipalities operated by the Company. Conversion from Dollars to Reais of the debt contracted with the Inter American Development Bank (IDB) On April 28, 2020, the Company carried out the conversion from Dollars to Reais of the debt contracted with the Inter American Development Bank (IDB) in the amount of US$ 494,616,801.20, corresponding to the debt balance of the 2202 / OC-BR loan related to the Rio Tietê Stage III Depollution Program. The details are: o Date: Executed, April 27, 2020 / effective, May 5, 2020 o Expiration: 3 September 2035 o Amortization: Semiannual installments o Total amount: o From: US$ 494,616,801.20 o To: R$ 2,810,907,281.22 o Interest rate: o From: Dollar - Libor 3 months + 0.39% per year (*) o For: Reais – DI + 0.06% per year (*) |
3. Summary of significant acc_2
3. Summary of significant accounting policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Summary Of Significant Accounting Policies | |
Cash and cash equivalents | Cash and cash equivalents include cash in hand, bank deposits, overdraft accounts and other short-term highly liquid investments with maturities and intention of use by the Company’s Management in a period lower than three months. |
Financial assets and liabilities | Financial Asset - Classification As of December 31, 2019 and 2018, the Company classified its financial assets according to the following categories: measured at amortized cost, measured at fair value through other comprehensive income and measured at fair value through profit or loss. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of the financial assets at inception. As of December 31, 2019 and 2018, the Company did not have financial assets classified as fair value through other comprehensive income and fair value through profit or loss. · Amortized cost This comprises financial assets that meet the following conditions: (i) it is held within the business model whose objective is to hold financial assets to collect contractual cash flows; and (ii) the contractual terms of the financial asset give rise, on specified dates, to cash flows that are solely payments of principal and interest on the principal amount outstanding. Presented as current assets, except for those with maturity of more than 12 months after the reporting date (these are classified as noncurrent assets). The Company's financial assets measured at amortized cost include cash and cash equivalents, restricted cash, balances of trade receivables, accounts receivable from related parties, other receivables, receivables from the Water National Agency – ANA. Financial assets measured at amortized cost are recorded at fair value and subsequently at amortized cost, under the effective interest rate method. Financial Liabilities - Classification As of December 31, 2019 and 2018, with the adoption of IFRS 9, the Company classifies its financial liabilities measured at amortized cost. Classification depends on the purpose to which the financial liabilities were assumed. This category comprises balances payable to contractors and suppliers, borrowings and financing, services payable, balances payable from public-private partnership (PPP), and program contract commitments. The effective interest rate method is adopted to calculate the amortized cost of a financial liability and allocate its interest expense under the respective period. The effective interest rate exactly deducts the estimated future cash flows (including fees, transaction costs and other issue costs) throughout the financial liability’s estimated life or, when appropriate, during a shorter period, for initial recognition of the net carrying amount. Impairment IFRS 9 – Financial Instruments introduces a new impairment model, replacing the incurred loss model for the expected credit loss model, which requires the recording of provision upon initial recognition of asset exposed to credit risk. Trade receivables Due to the caractheristics of the Company’s accounts receivable such as (i) insignificant financial component, (ii) non-complex receivables portfolio, and (iii) low credit risk, the Company adopted the simplified approach of expected credit loss, which consists in recognizing expected credit loss based on the total asset’s useful life. As of December 31, 2019 and 2018, the methodology to calculate allowance for doubtful accounts consisted of using an estimate calculated based on the average default observed in the last 12 months, per maturity range, in addition to estimating the recovery of credits overdue for more than 360 days, based on the track record of the last two years. For estimate purposes, it also considered the category of private and public customers, and segregated accounts receivable among the regular consumption accounts and agreements.. The Company also concluded that the macroeconomic indicators did not have significant impact on its estimates. In order to support this understanding, the Company carried out several analyses of the correlation between indicators that could potentially have some influence the sanitation sector and its history of losses on doubtful accounts, such as Gross Domestic Product (GDP), Unemployment Rate and the Extended Consumer Price Index (IPCA). Deposit transactions and financial investments measured at amortized cost The Company analyzes changes in the rates of investments in bank deposits certificates and information obtained from regulatory agencies about the financial institutions. The likelihood of delinquency over 12 months and during the terms of these investments was based on historical data provided by credit rating agencies for each credit level and analyzed in terms of sensitivity based on current returns. These deposits and financial investments are subject to an insignificant risk of change in value. |
Operating income | (a) Revenue from sanitation services Revenue from water supply and sanitation services are recognized as the water is consumed and services are provided. Revenues, including revenues unbilled, are recognized at the fair value of the consideration received or receivable for the sale of those services. Revenue is shown net of value-added tax, rebates and discounts. Unbilled revenues represent incurred revenues in which the services were provided, but not yet billed until the end of the each period and are recorded as trade receivables based on monthly estimates of the completed services. As of December 31, 2017, the Company recognized revenue when: i) products were delivered or services were rendered; ii) the amount of revenue could be reliably measured, iii) it was probable that future economic benefits would flow to the Company, and iv) it was probable that the amounts will be collected. The amount of revenue was not considered to be reliably measurable until all conditions relating to the sale had been satisfied. Amounts in dispute were recognized as revenue when collected. As of December 31, 2019 and 2018, with the adoption of IFRS 15, since 1 January, 2018, which establishes a five-step model applicable over revenue from a contract with a customer, as a result, the Company started to recognize revenue when: i) it identifies the contracts with customers; ii) it identifies the different obligations in the contract; iii) it determines the transaction price; iv) it allocates the transaction price to the performance obligations in the contracts; and (v) it satisfies all performance obligations. Amounts in dispute are recognized as revenue when collected. The Company analyzed sales transactions to private sector, government entities and wholesale customers and concluded IFRS 15 did not have significant impacts. The Company adopted IFRS 15 using the cumulative effect method, with application and recognition as from first-time adoption, i.e. January 1, 2018. Consequently, the Company did not apply the requirements of IFRS 15 for comparison purposes. Accordingly, data relating to 2017 is presented based on information previously reported and prepared in accordance with IAS 18 Revenue and related interpretations. (b) Construction revenue As of December 31, 2017, revenue from concession construction contracts was recognized in accordance with IFRIC 12 (Concession Arrangements) and IAS 11 (Construction Contracts), using the percentage-of-completion method, provided that the applicable conditions for application were fulfilled, with non-cash effect. The percentage of completion was calculated from the ratio of the actual costs incurred on the balance sheet date to the planned total costs (cost-to-cost method). Revenue from cost plus contracts was recognized by reference to the construction costs incurred during the period plus a fee earned. The fee represents the additional margin related to the work performed by the Company in relation to such construction contracts and it is added construction costs, resulting in the construction revenue . As of December 31, 2019 and 2018, revenue from concession construction contracts is recognized in accordance with IFRS 15 (Revenue from Contracts with Customers) and IFRIC 12 (Concession Contracts), as all performance obligations are satisfied over time. During the construction of the contract, an asset is classified as contract assets, as the Company estimates that the fair value of its consideration is equivalent to expected construction costs plus margin. The fee represents the additional margin related to the work performed by the Company in relation to such construction contracts and it is added to construction costs, resulting in the construction revenue. |
Trade receivables and allowance for doubtful accounts | Trade receivables are amounts due from customers for services performed in the ordinary course of business. These are classified as current assets, except when maturity exceeds 12 months after the end of the reporting period. In these cases, they are presented as noncurrent assets. The Company establishes an allowance for doubtful accounts for receivable balances at an amount that Management considers to be sufficient to cover eventual losses, as described in note 3.2. |
Inventories | Inventories comprise supplies for consumption and maintenance of the water and sewage systems are stated at the lower of average cost of acquisition or net realizable value, and are classified in current assets. |
Investment properties | The investment properties are recorded at the acquisition or construction cost, less accumulated depreciation, except for the land group, calculated by the straight-line method at rates that consider the estimated useful life of assets. Expenditures related to repairs and maintenance are recorded in the income statement when incurred. The Company also maintains few assets for undetermined use in the future, i.e., it is not defined if the Company will use these assets in the operation or sell them in the short term during the ordinary course of business. |
Property, plant and equipment | Property, plant and equipment comprise mainly administrative facilities not composing the assets, subject-matter of the concession agreements. Those assets are stated at historical acquisition or construction cost less depreciation, net of impairment charge, when necessary. Interest, other finance charges and inflationary effects deriving from financing effectively applied to construction in progress are recorded as cost of respective property, plant and equipment, in this case, for the qualifying assets, as applicable. Qualifying assets are assets that, necessarily, take a substantial period to get ready for its intended use or sale. The Company considers that substantial period means a period greater than 12 months. This period was established by considering the completion period of the majority of its constructions, which is greater than 12 months, which corresponds to one fiscal year of SABESP. Subsequent costs included in the existing asset's carrying amount or recognized as a separate asset, as appropriate, only when it is probable that the future economic benefit associated with the item will flow to the Company and the cost of the item can be measured reliably. Repairs and maintenance are charged to the income statement during the financial period in which they were incurred. Depreciation is calculated using the straight-line method to allocate their cost and is described in Note 15 (a). Residual values and the useful life of assets are revised and adjusted, where applicable, at the end of each year. Gain and losses on disposals are determined by the difference between the proceeds with the carrying amount and are recognized within other operating income (expenses) in the income statement. |
Intangible assets | Intangibles are stated at acquisition cost and/or construction of the underlying assets, including construction margin, interest and other finance charges capitalized during the construction period, in this case, for the qualifying assets. Qualifying assets are assets that, necessarily, take a substantial period to get ready for its intended use or sale. The Company considers that substantial period means a period greater than 12 months. This period was established by considering the completion period of the majority of its constructions, which is greater than 12 months, which corresponds to one fiscal year of SABESP. The intangible has its amortization initiated when the intangible assets are available for use in location and the necessary condition when this asset becomes operational. The amortization of the intangible assets is discontinued when the asset is totally consumed or it is disposed of, whatever occurs first. Donations in assets, received from third parties and governmental entities, to allow the Company to render water and sewage services are not recorded in the Company’s financial statements, since these assets are controlled by the concession grantor. Financial resources received as donations for the construction of infrastructure are recorded under “Other operating income”. (a) Concession agreements/program contracts/service contracts The Company operates concession agreements including the rendering of basic sanitation, environmental, water supply and sewage services signed with the concession grantor. The infrastructure used by SABESP subject to service concession arrangements is considered to be controlled by the concession grantor when: (i) The grantor controls or regulates what services the operator must provide with the infrastructure, to whom it must provide them, and at what price; and (ii) The grantor controls the infrastructure, i.e., retains the right to take back the infrastructure at the end of the concession. SABESP's rights over infrastructure operated under concession agreements is accounted for as an intangible asset as SABESP has the right to charge for use of the infrastructure assets, and users (consumers) have the primary responsibility to pay SABESP for the services. The fair value of construction and other work on the infrastructure is recognized as revenue, as its fair value, when the infrastructure is built, provided that this work is expected to generate future economic benefits. The accounting policy to recognize construction revenue is described in Note 3.3 (b). Investments made and not recovered through rendering of services, in cases where there is the right to receive the residual value of the assets at the end of the contract , must be indemnified by the concession grantor, with cash or cash equivalents or also, in general with the contract extension. These investments are amortized by the useful life of asset. The details referring to amortization of intangible assets are described in Note 14 (c). Law 11,445/2007 indicates, whenever possible, that basic sanitation public utilities will have the economic and financial sustainability ensured through the remuneration due to service collection, preferably as tariffs and other public prices, which may be established for each service or both jointly. Therefore, investments made and not recovered through services rendered, within original term of the contract, are recorded as intangible assets and amortized by the useful life of the asset, taking into consideration a solid track record of concession renewal and, therefore, the continuity of services. (b) Software license of use Software licensing is capitalized based on the acquisition costs and other implementation costs. Amortizations are recorded according to the useful lives and the expenses associated with maintaining these are recognized as expenses when incurred. |
Impairment of non-financial assets | Property, plant and equipment, intangibles assets and other noncurrent assets with definite useful lives, are yearly reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The Company does not record assets with indefinite useful life and assessed that there are no indications of impairment losses, mainly supported by Law 11,445/2007, which ensures that basic sanitation public utilities will have assured its economic and financial sustainability through tariffs or via indemnity. |
Trade accounts payable and contractors | Accounts payable to contractors and suppliers are obligations to pay for goods or services purchased from suppliers in the ordinary course of business and are initially measured at fair value, which generally correspond to the bill and subsequently at amortized cost, being classified as current liabilities, except when the maturity exceeds 12 months after the reporting date and are, otherwise, presented as noncurrent liabilities. |
Borrowings and financing | Borrowings and financing are initially recognized at fair value, upon receipt of funds, net of transaction costs. Subsequently, borrowings and financing are stated at amortized cost, as presented in Note 16. Borrowings and financing are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after the end of the reporting period. Nonconvertible bonds issued by the Company are recognized in a similar manner to borrowings. |
Borrowing costs | Borrowing costs attributable to acquisition, construction or production of an asset, which, necessarily, requires a substantial time period to be ready for use or sale are capitalized as part of the cost of these assets. Other borrowing costs are recognized as expenses in the period they are incurred. Borrowing costs are interest rates and other charges incurred by the Company related to borrowings, including exchange variation, as described below. The capitalization occurs during the period in which the asset has been built, considering the weighted average rate of borrowings effective on the capitalization date. For foreign currency-denominated borrowings or financing, the Company analyzes them as if they were contracted in local currency, restricting the capitalization of interest and/or exchange variation by the amount that would be capitalized if these were contracted in the domestic market in similar lines of credit and loans. |
Salaries, payroll charges and contributions | Salaries, vacations, 13 t th The profit sharing plan for its employees is based on operational and financial targets of the Company, which creates provision when it is contractually required or when there is a practice in the past that created a constructive obligation, and is recorded on the accrual basis period as operating cost, selling, administrative expenses or capitalized in assets. |
Provisions, legal obligations, escrow deposits, contingent assets | Provisions related to claims are recognized when: i) the Company has a present (legal or constructive) obligation as a result of past event; ii) it is probable that an outflow of resources that comprise economic benefits will be required to settle the obligation; and iii) the amount can be reliably estimated. Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. Provisions are measured at the present value of the disbursements expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provision due to passage of time is recognized as interest expense. For financial statement presentation purposes, the provision is stated net of the related escrow deposits based on the legal right to offset. The bases and the nature of the provisions for civil, tax, labor and environmental risks are described in Note 20. Escrow deposits not linked to related liabilities are recorded in noncurrent assets. Escrow deposits are adjusted for inflation. Contingent assets are not recognized in the statements of financial position. |
Environmental costs | Costs related to ongoing environmental programs are expensed in the income statement, when there is any indication of an event. Ongoing programs are designed to minimize the environmental impact of the operations and to manage the environmental risks inherent to the Company's activities. |
Income taxes - current and deferred | Income taxes expenses comprise current and deferred income tax and social contributions. Current tax The provision for income tax and social contribution is based on the taxable income for the year. The income tax was accrued at rate 15%, plus 10% surtax on taxable income exceeding R$ 240. The social contribution was accrued at rate 9% over adjusted net income. Taxable income differs from net income (profit presented in the income statement), because it excludes income and expenses taxable or deductible in other years, and excludes items not permanently taxable or not deductible. Income tax and social contribution are accrued based on legislation in place in the end of the year. Management periodically evaluates and measures the positions taken in the income tax return with respect to situations in which applicable tax regulations are subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities. Deferred tax Deferred income tax is recognized, using the liability method, on temporary differences arising between the tax basis of assets and liabilities and their carrying amounts in the financial statements. However, the deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction that at the time of the transaction affects neither accounting nor taxable profit nor loss, except for business combinations. Deferred income tax is determined using tax rates (and laws) effective at the end of the reporting period and expected to apply when the related deferred income tax asset is realized or the deferred income tax liability is settled. Deferred income tax and social contribution assets are recognized only to the extent that it is probable that future taxable profit will be available for which temporary differences can be utilized and tax losses can be carryforward. Deferred taxes assets and liabilities are offset when there is a legally enforceable right of offsetting current tax assets against current tax liabilities and when deferred income tax assets and liabilities are related to income taxes levied by same tax authority over the tax entity. |
Taxes on revenues | Revenues from sanitation services are recognized on accrual basis for PASEP (Programa de Formação do Patrimônio do Servidor Público) and Cofins (Contribuição para o Financiamento da Seguridade Social), calculated at the rates of 1.65% and 7.60%, respectively. In addition, revenues from sanitation services are also subject to the Regulatory, Control and Oversight Fee (TRCF - Taxa de Regulação, Controle e Fiscalização), whose taxable event is the performance of regulatory, control and monitoring activities by ARSESP, calculated at 0.50% of the annual revenue directly generated by the service provided less taxes levied on the service. The taxes related to PASEP and Cofins incident on amounts invoiced to public entities are due when invoices are received. These taxes are calculated by the non-cumulativeness regime and presented net, as deductions from gross revenues. Tax debts calculated over “other operating income” are presented as deductions from the respective operating income. |
Pension obligations | (a) Defined benefit The Company makes contributions to defined benefit plans on a contractual basis and sponsored thereby. The regular contributions comprise the net administrative expenses and are recognized in the income statement for the period. Liabilities from defined benefit pension plan obligations correspond to the present value of the defined benefit obligation at the end of the reporting period, less the fair value of the plan’s assets. The defined benefit obligation (G1) and (G0) are calculated on an annual basis by independent actuaries, using the projected unit credit method. The estimated future cash outflows is discounted to its present value, using the interest rates of Government bonds with maturities that approximate the maturity of the related liability. Referring to actuarial gains and losses deriving from adjustments based on the experience and changes in actuarial assumptions are directly recorded under equity, as other comprehensive income (OCI), so that the plan's net assets or liabilities are recognized in the statement of financial position in order to reflect the full amount of plan’s deficit or surplus. In an event where a curtailment relates to only some of the employees covered by a plan, or where only part of an obligation is settled, the gain or loss includes a proportionate share of the past service cost and actuarial gains and losses. The proportionate share is determined on the basis of the present value of the obligations before and after the curtailment or settlement. (b) Defined contribution The Company makes contributions to defined contribution plans on a contractual basis and sponsored thereby, a supplementary private pension entity that provides post-employment benefits to its employees, in which the Company makes fixed and equal contributions to employees, within the limits set by regulation. In this model, the benefits paid are directly related to the amount contributed, with no deficits to be covered by the Company. |
Financial revenues and expenses | Financial revenue is primarily comprised of interest and inflation adjustments resulting from financial investments, escrow deposits and negotiations with customer to pay by installments, calculated using the effective interest rate method. Financial expenses are primarily comprised of interest, inflation adjustments and exchange rate changes on borrowings and financing, provisions, public-private partnership and program contract commitments. These financial income and expenses are calculated using the effective interest rate method. Inflation adjustments and exchange gains and losses derive from the collection or payment to third parties, as contractually required by law or court decision, and recognized on an accrual basis pro rata temporis. Inflation adjustments included in the agreements are not considered embedded derivatives, since they are deemed as inflation adjustment rates for the Company’s economic scenario. |
Leases | As of December 31, 2018 lease agreements were classified as finance lease when property, risks and rewards inherent to the ownership of asset to the lessee are transferred. Other leases were classified as operational lease, recognized as expenses in the income statement on a straight-line basis during the lease term. Finance lease agreements were measured based on the lower amount between the present value of minimum mandatory payments of the agreement or the fair value of asset on the start date the lease agreement. The amounts payable deriving from considerations of finance lease agreements are impacted by financial expenses and amortization of finance lease payables so that to obtain a constant interest rate. The corresponding lessor’s liability is recorded as current and noncurrent debt. On January 1, 2019, the Company applied IFRS16, which introduced one sole lease model, replacing the concept of classifying between operating and finance lease, which was applied by the Company up to December 31, 2018. The impact of this new standard is detailed in Note 4.1. |
Other current and noncurrent assets and liabilities | Other assets are stated at cost of acquisition, net of any impairment loss, where applicable. The amounts recognized as other liabilities are stated at known or estimated amounts, including, where applicable, related charges and inflation adjustments. |
Dividends and interest on capital | The Company uses the tax benefits of distributing dividends as interest on capital, as permitted by Brazilian Law and based on the Bylaws. This distribution of dividend is accounted for in accordance with Brazilian Law 9,249/95 for tax deductibility purposes, limited to the daily pro rata fluctuation of the Long-term Interest Rate (TJLP). The benefit attributed to the shareholders is recognized in the current liability against Equity, based on its by-laws. Dividends and interest on capital over the minimum established in the by-laws are recognized when approved by the shareholders in the shareholders’ meeting, except for taxes incurring in the distribution of interest on capital. The tax benefit of the interest on capital is accrued in the income statement of the year, under the same recognition basis of expenses with interest on capital. |
Present value adjustment | Current and noncurrent financial assets and liabilities are adjusted to present value based on discount rate at current market rate as of the transaction date, when the effects are relevant. |
Segment information | Operating segments are determined in a manner consistent with the internal reporting to the Company’s chief operating decision maker (“CODM”), which, in the case of SABESP, is the Board of Executive Officers, to make strategic decisions, allocate resources and evaluate performance. Consequently, the Company determined that it has one operating segment (sanitation services). The accounting policies used to determine segment information are the same as those used to prepare the Company’s financial statements. The measure of the segment’s profit or loss is operating income before other operating expenses, net and equity accounting, which excludes construction revenue and related costs. The CODM analyzes asset and liabilitity information on a consolidated basis. Consequently, the Company does not disclose segment information on assets and liabilities. Substantially all of the Company’s noncurrent assets and revenue generated from customers are located in São Paulo State. Consequently, financial information is not disclosed by geographic area. |
Translation into foreign currency | (a) Functional and reporting currency Items included in the financial statements are measured using the currency of the primary economic environment in which the company operates ("the functional currency"). The financial statements are presented in Brazilian reais (R$), which is also the Company's functional currency. All financial information has been stated in reais and rounded to the next thousand, except where otherwise indicated. (b) Foreign currency translation Foreign currency-denominated transactions are translated into Brazilian reais using the exchange rates prevailing at the transaction dates. Statement of financial position accounts are translated by the exchange rate prevailing at reporting date. Exchange gains and losses resulting from the settlement of these transactions and the translation of foreign currency-denominated cash assets and liabilities are recognized in the income statement, except for borrowings and financing referring to property, plant and equipment or intangible assets in progress, where exchange losses are recognized as corresponding entry to the asset while construction is in progress, as described in Note 3.12. |
1. Operations (Tables)
1. Operations (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Operations | |
Concession agreements | December 31, 2019 December 31, 2018 Total municipalities that have already signed contracts (*) 325 307 Balance – intangible and contract assets 35,990,087 29,187,524 Percentage of intangible and contract assets 90.10% 80.14% Gross revenue (except Construction Revenue) 13,700,777 11,297,242 Percentage of gross revenue (except Construction Revenue) 84.92% 79.26% Municipalities with contracts under negotiation (expired): 21 35 Balance – intangible and contract assets 1,637,878 4,485,203 Percentage of intangible and contract assets 4.10% 12.32% Gross revenue (except Construction Revenue) 451,603 858,277 Percentage of gross revenue (except Construction Revenue) 2.80% 6.02% Municipalities with concession agreements due by 2030: 27 31 Balance – intangible and contract assets 1,181,172 1,917,142 Percentage of intangible and contract assets 2.96% 5.26% Gross revenue (except Construction Revenue) 588,628 980,679 Percentage of gross revenue (except Construction Revenue) 3.65% 6.88% Municipality of São Paulo: Percentage of intangible and contract assets 43.37% 46.97% Percentage of gross operating revenue 44.48% 47.05% (*) Includes the municipality of Tapiratiba, which signed a contract in October 2019, to begin operating in April 2020. |
4. Changes in accounting prac_2
4. Changes in accounting practices and disclosures (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Changes In Accounting Practices And Disclosures | |
New standards, amendments and interpretations, adopted | Standard Description Impact IFRS 16 – Leases Establishes a single model for the accounting of leases in the balance sheet for lessees. A lessee recognizes a right of use asset that represents his right to use the leased asset and a lease liability that represents his obligation to make lease payments. The lessor's accounting remains similar to the current standard, that is, the lessors continue to classify the leases as financial or operating. IFRS 16 superseded the leases guidance including IAS 17 Leases and IFRIC 4, SIC 15 and SIC 27 Determining Whether an Arrangement Contains a Lease. (*) See impact analysis below. IFRIC 23 – Uncertainty over Income Tax Treatments 1 Clarify accounting when there are uncertainties about the treatment of taxes on profit. The application of this interpretation did not impact the disclosures or amounts recognized in the annual financial statements. Amendments to IFRS 9 – Prepayment Features with Negative Compensation Clarify that, to determine whether a prepayment feature meets the condition of “solely payments of principal and interest”, the party exercising the option may pay or receive compensation for the prepayment regardless of the reason for the prepayment, that is, the prepayment features with negative compensation do not automatically break the condition of “solely payments of principal and interest”. The application of this amendment did not impact the disclosures or amounts recognized in the annual financial statements. Amendments to IAS 28 – Long-term interests in Associates and Joint Ventures Clarify that IFRS 9, including its requirements for impairment, is applicable to other financial instruments in an associate or joint venture to which the equity method is not applicable. Include long-term investments that, in substance, are part of the entity's net investment in an associate or joint venture. The application of this amendment did not impact the disclosures or amounts recognized in the annual financial statements. Annual Improvements to IFRSs: 2015-2017 Cycle (Amendments to IFRS 3, IFRS 11, IAS 12 and IAS 23) · IFRS 3 – Business Combinations - clarify that when the control of a business that is a joint operation is obtained, the requirements for business combination are applied in stages, including the remeasurement of the interest previously held in the joint operation at fair value. · IFRS 11 – Joint Arrangements - clarify that when a party that participates in a joint operation that corresponds to a business, but does not have joint control of that operation, obtains joint control of that joint operation, its interest previously held in the joint operation is not remeasured. · IAS 32 – Income Taxes - clarify that the Company must recognize the consequences of income tax on dividends in profit or loss, in other comprehensive income or in equity, depending on where the transactions that generated the profit to be distributed were originally recognized. · IAS 23 – Borrowing Costs – clarify that if there is any specific borrowing outstanding after the corresponding asset is ready for its intended use or sale, that borrowing becomes part of the funds that the Company usually borrows to calculate the capitalization rate on borrowings in general. The application of this amendment did not impact the disclosures or amounts recognized in the annual financial statements. Amendments to IAS 19 – Plan Amendment, Curtailment or Settlement The amendments clarify that the cost of past services (or settlement gain or loss) is calculated by measuring the defined benefit liability (asset) based on updated assumptions and comparing the benefits offered and the plan’s assets before and after the change of the plan (or its curtailment or settlement) but ignoring the effect of the asset ceiling (which may arise when the defined benefit plan is in surplus). IAS 19 clarifies that the change in the effect of the asset ceiling resulting from the change in the plan (or its curtailment or settlement) is determined in a second step and is normally recognized in other comprehensive income. The application of this amendment did not impact the disclosures or amounts recognized in the annual financial statements. |
Effects of new accounting standard | Impact from first-time adoption of the standard Group Future payments of fixed leases Impact of the discount rate Right of use of leased assets Lease liabilities Vehicles 63,795 (9,313) 54,482 54,482 Properties 7,525 (1,333) 6,192 6,192 Equipment 741 (100) 641 641 Other 4,243 (603) 3,640 3,640 Leases (IAS 17)* - - 581,388 568,666 Total 76,304 (11,349) 646,343 633,621 *Leases recognized in accordance with IAS 17 through December 31, 2018. |
New standards, amendments and interpretations, not yet effective | Standard Description Impact IFRS 17 – Insurance Contracts 2 Establishes the principles for the recognition, measurement, presentation and disclosure of insurance contracts. IFRS 17 will supersede IFRS 4 Insurance Contracts. The Company does not expect effects from adopting this standard. Amendments to IFRS 10 and IAS 28 – Sale or Contribution of Assets between an Investor and its Associate or Joint Venture 3 Clarify situations involving the sale or contribution of assets between an investor and its associates or joint venture. The Company is assessing the impacts and effects of the amendments, however, it does not expect material effects from adopting this standard. Amendments to IFRS 3 – Definition of a Business 1 Clarify that even though businesses normally present outputs (“products”), products are not necessary for an integrated set of activities and assets to qualify as businesses. To be considered as a business, an acquired set of activities and assets must include at least one input and a substantive process that together contribute significantly to the ability to create products. The Company does not expect effects from adopting this amendment. Amendments to IAS 1 and IAS 8 – Definition of Material 1 The purpose of the amendments is to facilitate the understanding of the definition of material in IAS 1 and not to change the underlying concept of materiality in the IFRS Standards. The concept of “hidden” material information by immaterial information was included as part of the new definition. The Company is assessing the impacts and effects of the amendments, however it does not expect material effects from adopting this standard. 1 Effective for annual periods beginning on or after January 1, 2020. 2 Effective for annual periods beginning on or after January 1, 2021. 3 The effective date for these amendments was deferred indefinitely. |
5. Risk management (Tables)
5. Risk management (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Risk Management | |
Exposure to exchange risk | December 31, 2019 December 31, 2018 Foreign currency R$ Foreign currency R$ Borrowings and financing – US$ 1,051,881 4,239,817 1,191,152 4,615,476 Borrowings and financing – Yen 56,452,885 2,097,225 57,463,173 2,026,726 Interest and charges from borrowings and financing – US$ 32,242 40,193 Interest and charges from borrowings and financing – Yen 12,725 12,517 Total exposure 6,382,009 6,694,912 Borrowing cost – US$ (20,173) (22,390) Borrowing cost – Yen (3,038) (3,113) Total foreign-currency denominated borrowings (Note 16) 6,358,798 6,669,409 |
Increase/decrease in exchange rate | December 31, 2019 December 31, 2018 Variation US$ R$ 4.0307 R$ 3.8748 4.0% Iene R$ 0.03715 R$ 0.03527 5.3% |
Borrowing and financing variable interest rate | December 31, 2019 December 31, 2018 CDI (i) 1,866,755 1,250,000 TR (ii) 1,675,203 1,637,290 IPCA (iii) 1,366,134 1,614,595 TJLP (iv) 1,381,342 1,322,854 LIBOR (v) 2,829,073 3,259,295 Interest and charges 105,667 134,725 Total 9,224,174 9,218,759 (i) CDI – (Certificado de Depósito Interbancário), an interbank deposit certificate (ii) TR – Interest Benchmark Rate (iii) IPCA – (Índice Nacional de Preços ao Consumidor Amplo), a consumer price index (iv) TJLP – (Taxa de Juros a Longo Prazo), a long-term interest rate index (v) LIBOR – London Interbank Offered Rate |
Credit rating | December 31, 2019 December 31, 2018 Cash and cash equivalents AA+(bra) 2,193,725 2,966,080 AAA(bra) 41,992 45,430 Other (*) 17,493 17,681 2,253,210 3,029,191 (*) This category includes current accounts and investment funds in banks whose balances were not significant, and after assessing the impact of IFRS 9, concluded that expected losses are not material. |
Credit information of banks | Banks Fitch Moody's Standard Poor's Banco do Brasil S/A AA(bra) Aa1.br - Banco Santander Brasil S/A - Aaa.br brAAA Brazilian Federal Savings Bank AA(bra) Aa1.br brAAA Banco Bradesco S/A AAA(bra) Aa1.br brAAA Itaú Unibanco Holding S/A AAA(bra) Aa1.br brAAA |
Liquidity risk | 2020 2021 2022 2023 2024 2025 onwards Total As of December 31, 2019 Liabilities Borrowings and financing 3,303,736 1,574,711 1,595,436 1,317,996 1,574,770 6,715,873 16,082,522 Accounts payables to suppliers and contractors 369,631 - - - - - 369,631 Services payable 474,078 - - - - - 474,078 Public-Private Partnership – PPP 383,421 383,421 383,421 383,421 338,765 4,615,324 6,487,773 Program contract commitments 276,580 46,733 31,983 31,983 1,014 13,771 402,064 |
Capital management | December 31, 2019 December 31, 2018 Total borrowings and financing (Note 16) 13,244,709 13,152,796 (-) Cash and cash equivalents (Note 7) (2,253,210) (3,029,191) Net debt 10,991,499 10,123,605 Total equity 21,635,783 19,551,688 Total capital (shareholders + providers of capital) 32,627,282 29,675,293 Leverage ratio 34% 34% |
Fair value of financial instruments | December 31, 2019 December 31, 2018 Carrying amount Fair value Carrying amount Fair value Cash and cash equivalents 2,253,210 2,253,210 3,029,191 3,029,191 Restricted cash 26,018 26,018 31,900 31,900 Trade receivables 2,353,027 2,353,027 2,052,416 2,052,416 Water National Agency – ANA 32,466 32,466 49,136 49,136 Other receivables 194,178 194,178 180,681 180,681 |
Financial liabilities | December 31, 2019 December 31, 2018 Carrying amount Fair value Carrying amount Fair value Borrowings and financing 13,244,709 13,937,611 13,152,796 13,116,684 Accounts payables to suppliers and contractors 369,631 369,631 465,993 465,993 Services payable 474,078 474,078 454,022 454,022 Program contract commitments 377,253 377,253 373,009 373,009 Public-Private Partnership - PPP 3,293,980 3,293,980 3,413,124 3,413,124 |
7. Cash and cash equivalents (T
7. Cash and cash equivalents (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Cash and cash equivalents [abstract] | |
Cash and cash equivalents | December 31, 2019 December 31, 2018 Cash and banks 176,497 151,558 Cash equivalents 2,076,713 2,877,633 Total 2,253,210 3,029,191 |
8. Restricted cash (Tables)
8. Restricted cash (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Restricted Cash | |
Restricted cash | December 31, 2019 December 31, 2018 Agreement with the São Paulo municipal government (i) 17,068 19,977 Brazilian Federal Savings Bank – escrow deposits (ii) 2,245 5,880 Other 6,705 6,043 26,018 31,900 (i) Refers to the amount deducted from the 7.5% of municipal revenue transferred to the Municipal Fund, corresponding to eventual amounts unpaid by direct management bodies, foundations and government agencies, as established in the agreement entered into with the municipal government of São Paulo; and (ii) Refers to savings account for receiving escrow deposits regarding lawsuits with final and unappealable decisions in favor of the Company, which are blocked as per contractual clause. |
9. Trade receivables (Tables)
9. Trade receivables (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Trade Receivables | |
Financial position | December 31, 2019 December 31, 2018 Private sector: General (i) and special (ii) customers 1,505,150 1,372,667 Agreements (iii) 378,341 347,679 1,883,491 1,720,346 Government entities: Municipal 472,666 575,733 Federal 2,805 3,876 Agreements (iii) 277,047 274,906 752,518 854,515 Wholesale customers – Municipal governments: (iv) Mogi das Cruzes 3,278 3,056 São Caetano do Sul 9,871 2,869 Total wholesale customers – Municipal governments 13,149 5,925 Unbilled supply 745,884 571,072 Subtotal 3,395,042 3,151,858 Allowance for doubtful accounts (1,042,015) (1,099,442) Total 2,353,027 2,052,416 Current 2,137,752 1,843,333 Noncurrent 215,275 209,083 2,353,027 2,052,416 (i) General customers - residential and small and mid-sized companies (ii) Special customers - large consumers, commercial, industries, condominiums and special billing consumers (fixed demand agreements, industrial waste, wells, etc.). (iii) Agreements - installment payments of past-due receivables, plus monetary adjustment and interest, according to the agreements. (iv) Wholesale basis customers - municipal governments - This balance refers to invoices issued as a result of services provided to municipalities, which are responsible for distributing to, billing and charging final customers. The balance presented does not include the municipality of Mauá, as it is questioning in court the tariffs charged. Therefore, SABESP did not record revenues and receivables of this municipality, due to low expectation of realization, in accordance with IFRS 15 and IFRS 9, as the Company does not believe that it is likely that it will receive the consideration it is entitled to in exchange for the services transferred to the municipalities. |
Wholesale customers | December 31, 2019 December 31, 2018 Wholesale customers – Municipal governments: Mauá 6 7 7,298 6 0 1 , 9 1 Santo André (*) - 1,1 6 9 Total 6 7 7,298 1,7 6 6, |
Aging of trade receivables | December 31, 2019 December 31, 2018 Current 1,762,606 1,449,927 Past-due: Up to 30 days 330,488 330,310 From 31 to 60 days 164,913 145,153 From 61 to 90 days 86,765 83,679 From 91 to 120 days 58,971 54,486 From 121 to 180 days 81,003 89,740 From 181 to 360 days 33,206 44,856 Over 360 days 877,090 953,707 Total past-due 1,632,436 1,701,931 Total 3,395,042 3,151,858 |
Allowance for doubtful accounts | December 31, 2019 December 31, 2018 December 31, 2017 Balance at beginning of the year 1,099,442 1,067,973 1,068,747 Private sector /government entities 54,064 61,315 75,973 Recoveries (111,491) (29,846) (76,747) Net additions for the year (57,427) 31,469 (774) Balance at the end of the year 1,042,015 1,099,442 1,067,973 |
Reconciliation of estimated/historic losses of income | Reconciliation of estimated/historical losses of income December 31, 2019 December 31, 2018 December 31, 2017 Write-offs (179,929) (184,555) (171,729) (Losses)/reversal with state entities - related parties (5,597) 1,294 21,510 (Losses) with private sector / government entities (54,064) (61,315) (75,973) (Losses)/reversal with wholesale customers - (29,458) 9,781 Recoveries 111,491 107,307 133,730 Amount recorded expense (128,099) (166,727) (82,681) |
10. Related-party balances an_2
10. Related-party balances and transactions (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Related party transactions [abstract] | |
Accounts receivable, interest on capital payable, revenue and expenses with the Sao Paulo State Government | December 31, 2019 December 31, 2018 Accounts receivable Current: Sanitation services (i) 131,851 122,522 Allowance for losses (i) (39,417) (33,820) Reimbursement for retirement and pension benefits paid (G0): - monthly flow (payments) (ii) and (vi) 31,584 22,926 - GESP Agreement – 2015 (iv) 68,888 62,520 Total current 192,906 174,148 Noncurrent: Agreement for the installment payment of sanitation services 10,883 17,045 Reimbursement for retirement and pension benefits paid (G0): - GESP Agreement – 2015 (iv) 647,107 652,057 Total noncurrent 657,990 669,102 Total receivables from shareholders 850,896 843,250 Assets: Sanitation services 103,317 105,747 Reimbursement of additional retirement and pension benefits (G0) 747,579 737,503 Total 850,896 843,250 Liabilities: Interest on capital payable to related parties 401,963 338,407 |
Loan agreement through credit facility | 2019 2018 2017 Revenue from sanitation services 556,574 501,146 462,989 Payments received from related parties (546,365) (509,672) (471,081) Receipt of GESP reimbursement referring to Law 4,819/58 (152,112) (173,516) (192,889) |
11. Investments (Tables)
11. Investments (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Investments Abstract | |
Summary of the investees' financial statements and equity interest | Company Equity Capital increase Dividends distributed Other Comprehensive Income Profit (loss) for the year 2019 2018 2017 2019 2019 2019 2019 (*) 2018 2017 Sesamm 45,923 43,547 39,262 - (2,042) - 6,485 (2,067) 5,621 2,707 Águas de Andradina (i) 30,065 24,832 19,392 - (2,038) - 7,070 201 2,407 4,471 Águas de Castilho 7,242 6,084 4,880 - (609) - 1,648 119 1,001 933 Saneaqua Mairinque 4,783 5,720 4,327 - (11) (55) (867) (4) (790) 390 Attend Ambiental 7,486 1,426 5,169 24,277 - - (17,781) (436) (3,743) 1,324 Aquapolo Ambiental 37,772 30,170 18,757 - (8,681) - 16,283 - 11,413 6,470 Paulista Geradora de Energia 7,144 7,625 8,447 - - - (481) - (822) (22) Company Investments Capital increase Dividends distributed Other Comprehensive Income Equity in the earnings of subsidiaries Interest percentage 2019 2018 2019 2019 2019 2019 (*) 2018 2017 2019 2018 2017 Sesamm 16,533 15,677 - (735) - 2,335 (744) 2,023 975 36% 36% 36% Águas de Andradina 9,020 7,450 - (611) - 2,121 60 722 729 30% 30% 30% Águas de Castilho 2,172 1,826 - (183) - 493 36 300 287 30% 30% 30% Saneaqua Mairinque 1,434 1,716 - (3) (17) (260) (2) (237) 71 30% 30% 30% Attend Ambiental 3,369 642 10,925 - - (8,002) (196) (1,684) 560 45% 45% 45% Aquapolo Ambiental 18,508 14,783 - (4,254) - 7,979 - 5,592 3,144 49% 49% 49% Paulista Geradora de Energia 1,786 1,905 - - - (119) - (206) (6) 25% 25% 25% Total 52,822 43,999 10,925 (5,786) (17) 4,547 (846) 6,510 5,760 Other investments 365 588 Overall total 53,187 44,587 (*) Refer to changes in the equity of investees, as their financial statements for the year ended December 31, 2018 were issued, including some adjustments, after the Company’s financial statements. |
12. Investment properties (Tabl
12. Investment properties (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Investment property [abstract] | |
Investment properties | December 31, 2018 Transfers Depreciation December 31, 2019 Investment properties 47,620 (9) (49) 47,562 December 31, 2017 Write-offs and disposals Transfers Depreciation December 31, 2018 Investment properties 57,652 (9,995) 13 (50) 47,620 December 31, 2016 Write-offs and disposals Depreciation December 31, 2017 Investment properties 57,968 (244) (72) 57,652 |
13. Contract assets (Tables)
13. Contract assets (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Contract assets [abstract] | |
Contract assets | December 31, 2018 Additions Write-offs Transfers Transfers of works to intangible assets December 31, 2019 Total contract assets (*) 7,407,948 3,532,283 (4,910) 10,710 (3,328,317) 7,617,714 * As of December 31, 2019, contract assets includes leases recognized before December 31, 2018 in accordance with IAS 17 amounting to R$ 276,893 (R$ 265,671 as of December 31, 2018). January 1, 2018 Additions Transfers of works to intangible assets December 31, 2018 Total contract assets 10,387,715 3,188,943 (6,168,710) 7,407,948 |
14. Intangible assets (Tables)
14. Intangible assets (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Intangible assets other than goodwill [abstract] | |
Statement of financial position details | December 31, 2019 December 31, 2018 Cost Accumulated amortization Net Cost Accumulated amortization Net Intangible right arising from: Concession agreements – equity value 2,066,459 (571,606) 1,494,853 5,465,206 (1,391,862) 4,073,344 Concession agreements – economic value 1,334,531 (621,679) 712,852 1,948,255 (716,246) 1,232,009 Program contracts 19,413,768 (5,594,068) 13,819,700 12,710,937 (3,933,008) 8,777,929 Program contracts – commitments 1,651,434 (286,559) 1,364,875 1,320,106 (240,555) 1,079,551 Services contracts – São Paulo 19,217,091 (4,826,328) 14,390,763 17,474,797 (4,083,345) 13,391,452 Software license of use 829,739 (358,033) 471,706 748,962 (290,787) 458,175 Right of use 113,233 (42,535) 70,698 - - - Total 44,626,255 (12,300,808) 32,325,447 39,668,263 (10,655,803) 29,012,460 |
Changes in intangible assets | December 31, 2018 First-time adoption of IFRS 16 Addition Contract renewal Transfer to indemnities receivable Transfer of contract assets Transfers Write-offs and disposals Amortization December 31, 2019* Intangible right arising from: Concession agreements – equity value (*) 4,073,344 - 2 (2,690,660) (4,345) 131,809 76,804 (8,311) (83,790) 1,494,853 Concession agreements – economic value 1,232,009 - 2,034 (532,173) - 89,041 1,956 (569) (79,446) 712,852 Program contracts (*) 8,777,929 - 1,338,443 3,223,773 - 970,534 137,283 (10,312) (617,950) 13,819,700 Program contracts – commitments 1,079,551 - 331,328 - - - - - (46,004) 1,364,875 Services contracts – São Paulo 13,391,452 - 3,867 (940) - 2,054,940 (228,583) (20,739) (809,234) 14,390,763 Software license of use 458,175 - - - - 81,993 (991) - (67,471) 471,706 Right of use - Other assets - 64,955 48,278 - - - - - (42,535) 70,698 Intangible right arising from: 29,012,460 64,955 1,723,952 - (4,345) 3,328,317 (13,531) (39,931) (1,746,430) 32,325,447 (*) As of December 31, 2019, intangible assets includes leases recognized before December 31, 2018 in accordance with IAS 17 amounting to R$ 292,824 - (R$ 315,717 as of December 31, 2018 – R$ R$ 98,077 recognized as concession agreements – equity value and R$ 217,640 recognized as program contracts). December 31, 2017 Transfers to contract assets (*) Additions Contract renewal Transfers of works (**) Transfers Write-offs and disposals Amortization December 31, 2018 Intangible right arising from: Concession agreements – equity value 7,141,614 (1,427,046) 93 (1,935,780) 499,002 (5,268) (1,406) (197,865) 4,073,344 Concession agreements – economic value 1,433,937 (233,361) 373 - 114,442 88 (1,031) (82,439) 1,232,009 Program contracts 7,595,066 (2,019,461) 928,818 1,935,780 681,742 3,011 (7,616) (339,411) 8,777,929 Program contracts – commitments 910,375 - 206,946 - - - - (37,770) 1,079,551 Services contracts – São Paulo 15,917,015 (6,707,847) 3,724 - 4,818,734 12 (14,813) (625,373) 13,391,452 Software license of use 468,125 - 4,774 - 54,790 686 - (70,200) 458,175 Total 33,466,132 (10,387,715) 1,144,728 - 6,168,710 (1,471) (24,866) (1,353,058) 29,012,460 (*) Work in progress transferred to contract assets due to adoption of IFRS 15, as of January 1, 2018, as described in Note 4.1. (**) Work in progress transferred from contract assets to intangible assets. December 31, 2016 Additions Contract renewal Reversal of estimated losses Transfers Write-offs and disposals Amortization December 31, 2017 Intangible right arising from: Concession agreements – equity value 7,482,955 374,775 (531,818) 2,078 1,663 (2,795) (185,244) 7,141,614 Concession agreements – economic value 1,381,652 142,429 - 8 2,604 (1,163) (91,593) 1,433,937 Program contracts 6,576,021 772,278 531,818 4,834 (1,784) (6,606) (281,495) 7,595,066 Program contracts – commitments 823,216 121,313 - - - - (34,154) 910,375 Services contracts – São Paulo 14,552,707 1,976,079 - 6,460 (18,346) (13,848) (586,037) 15,917,015 Software license of use 430,237 103,424 - - 6,489 - (72,025) 468,125 Total 31,246,788 3,490,298 - 13,380 (9,374) (24,412) (1,250,548) 33,466,132 |
Liabilities assumed | December 31, 2019 December 31, 2018 Current liabilities Noncurrent liabilities Total liabilities Current liabilities Noncurrent liabilities Total liabilities Alto Tietê 44,003 208,217 252,220 39,283 252,093 291,376 São Lourenço 66,288 2,975,472 3,041,760 98,544 3,023,204 3,121,748 Total 110,291 3,183,689 3,293,980 137,827 3,275,297 3,413,124 |
Right of use | Nature December 31, 2019 Leases related to Contract Assets 276,893 Leases related to Concession Agreements and Program Contracts 292,824 - Cost 405,426 - Accumulated amortization (112,602) Other assets 70,698 - Vehicles 91,709 - Properties 13,309 - Equipment 3,801 - Other 4,414 - Accumulated amortization (42,535) Right of use 640,415 |
Income statement impact | Impact in the income statement December 31, 2019 Right-of-use amortization (65,413) Financial result – interest expenses (54,791) Short-term and low-value lease expenses (51,855) Decrease of the income of the year (172,059) |
15. Property, plant and equip_2
15. Property, plant and equipment (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Property, plant and equipment [abstract] | |
Statement of financial position details | December 31, 2019 December 31, 2018 Cost Accumulated depreciation Net Depreciation average rate Cost Accumulated depreciation Net Depreciation average rate Land 92,962 - 92,962 - 92,979 - 92,979 - Buildings 82,143 (40,438) 41,705 2.1% 79,086 (38,961) 40,125 3.0% Equipment 402,850 (250,577) 152,273 16.3% 372,872 (256,786) 116,086 16.5% Transportation equipment 8,946 (6,962) 1,984 9.9% 11,333 (7,860) 3,473 10.0% Furniture and fixtures 31,365 (13,146) 18,219 6.7% 27,250 (13,672) 13,578 6.8% Other 7,559 (309) 7,250 5.0% 1,659 (288) 1,371 6.2% Total 625,825 (311,432) 314,393 12.5% 585,179 (317,567) 267,612 12.3% |
Changes in property, plant, and equipment | December 31, 2018 Additions Transfers Write-offs and disposals Depreciation December 31, 2019 Land 92,979 - (17) - - 92,962 Buildings 40,125 3,497 15 - (1,932) 41,705 Equipment 116,086 63,216 3,149 (429) (29,749) 152,273 Transportation equipment 3,473 308 (1,117) (2) (678) 1,984 Furniture and fixtures 13,578 5,266 734 (162) (1,197) 18,219 Other 1,371 5,872 66 - (59) 7,250 Total 267,612 78,159 2,830 (593) (33,615) 314,393 December 31, 2017 Additions Transfers Write-offs and disposals Depreciation December 31, 2018 Land 92,507 - 472 - - 92,979 Buildings 42,360 73 - - (2,308) 40,125 Equipment 103,803 46,473 986 (81) (35,095) 116,086 Transportation equipment 3,680 589 - - (796) 3,473 Furniture and fixtures 11,816 2,972 - (27) (1,183) 13,578 Other 884 538 - - (51) 1,371 Total 255,050 50,645 1,458 (108) (39,433) 267,612 December 31, 2016 Additions Transfers Write-offs and disposals Depreciation December 31, 2017 Land 92,494 - 13 - - 92,507 Buildings 43,262 86 1,358 - (2,346) 42,360 Equipment 149,140 17,627 (15,945) (178) (46,841) 103,803 Transportation equipment 4,531 - (33) (27) (791) 3,680 Furniture and fixtures 11,986 1,207 (75) (54) (1,248) 11,816 Other 970 - (15) (20) (51) 884 Total 302,383 18,920 (14,697) (279) (51,277) 255,050 |
16. Borrowings and financing (T
16. Borrowings and financing (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Borrowings [abstract] | |
Borrowings and financing outstanding | Borrowings and financing outstanding balance December 31, 2019 December 31, 2018 Financial institution Current Noncurrent Total Current Noncurrent Total Local currency 10th issue debentures 41,021 - 41,021 42,493 40,194 82,687 12th issue debentures 45,450 203,829 249,279 45,450 249,249 294,699 14th issue debentures 41,940 63,012 104,952 41,270 103,005 144,275 15th issue debentures - - - 359,394 - 359,394 17th issue debentures 289,211 263,226 552,437 279,100 532,691 811,791 18th issue debentures 34,239 133,679 167,918 33,469 165,267 198,736 20th issue debentures - - - 248,334 - 248,334 21th issue debentures 150,000 349,660 499,660 - 499,604 499,604 22th issue debentures - 765,689 765,689 - 756,040 756,040 23th issue debentures - 864,603 864,603 - - - 24th issue debentures - 395,855 395,855 - - - Brazilian Federal Savings Bank 83,519 1,341,660 1,425,179 75,223 1,266,592 1,341,815 Brazilian Development Bank - BNDES BAIXADA SANTISTA - - - 16,899 - 16,899 Brazilian Development Bank - BNDES PAC 11,184 27,854 39,038 11,227 39,169 50,396 Brazilian Development Bank - BNDES PAC II 9751 6,990 40,685 47,675 4,364 18,811 23,175 Brazilian Development Bank - BNDES PAC II 9752 3,913 24,457 28,370 3,186 23,100 26,286 Brazilian Development Bank - BNDES ONDA LIMPA 23,704 100,582 124,286 23,632 123,875 147,507 Brazilian Development Bank - BNDES TIETÊ III 52,874 383,191 436,065 30,589 252,197 282,786 Brazilian Development Bank - BNDES 2015 31,712 460,646 492,358 31,615 490,729 522,344 Brazilian Development Bank - BNDES 2014 4,659 25,411 30,070 - - - Leases (Concession Agreements, Program Contracts and Contract Assets) 27,314 432,357 459,671 19,077 549,589 568,666 Leases (Others) 51,088 23,365 74,453 - - - Other 1,665 8,207 9,872 1,380 8,163 9,543 Interest and charges 77,460 - 77,460 98,410 - 98,410 Total in local currency 977,943 5,907,968 6,885,911 1,365,112 5,118,275 6,483,387 Borrowings and financing outstanding balance December 31, 2019 December 31, 2018 Financial institution Current Noncurrent Total Current Noncurrent Total Foreign currency Inter-American Development Bank - BID 1212 – US$61,668 thousand (US$71,947 thousand in December 2018) 41,428 207,140 248,568 39,826 238,954 278,780 Inter-American Development Bank - BID 2202 – US$510,573 thousand (US$544,457 thousand in December 2018) 128,623 1,914,298 2,042,921 124,098 1,969,565 2,093,663 International Bank of Reconstruction and Development -BIRD – US$88,871 thousand (US$91,286 thousand in December 2018) 24,505 330,898 355,403 11,779 341,646 353,425 Deutsche Bank – (US$75,000 thousand in December 2018) - - - 288,479 - 288,479 Eurobonds – US$350,000 thousand (US$350,000 thousand in December 2018) 1,409,921 - 1,409,921 - 1,354,532 1,354,532 JICA 15 – ¥11,524,300 thousand (¥12,676,730 thousand in December 2018) 42,813 385,315 428,128 40,646 406,462 447,108 JICA 18 – ¥10,361,600 thousand (¥11,397,760 thousand in December 2018) 38,493 346,237 384,730 36,545 365,230 401,775 JICA 17 – ¥2,830,420 thousand (¥1,826,957 thousand in December 2018) 12,466 91,845 104,311 11,835 51,786 63,621 JICA 19 – ¥31,736,565 thousand (¥31.561.726 thousand in December 2018) 67,372 1,109,644 1,177,016 64,028 1,047,081 1,111,109 BID 1983AB – US$40,769 thousand (US$58,462 thousand in December 2018) 71,312 91,521 162,833 68,554 155,653 224,207 Interest and charges 44,967 - 44,967 52,710 - 52,710 Total in foreign currency 1,881,900 4,476,898 6,358,798 738,500 5,930,909 6,669,409 Total borrowings and financing 2,859,843 10,384,866 13,244,709 2,103,612 11,049,184 13,152,796 |
Borrowings terms | Local currency Guarantees Maturity Annual interest rates Inflation adjustment 10th issue debentures Own funds 2020 TJLP +1.92% (Series 1 and 3) and 9.53% (Series 2) IPCA (Series 2) 12th issue debentures Own funds 2025 TR + 9.5% 14th issue debentures Own funds 2022 TJLP +1.92% (Series 1 and 3) and 9.19% (Series 2) IPCA (Series 2) 17th issue debentures Own funds 2023 CDI +0.75 (Series 1) and 4.5% (Series 2) and4.75% (Series 3) IPCA (Series 2 and 3) 18th issue debentures Own funds 2024 TJLP 1.92 % (Series 1 and 3) and 8.25% (Series 2) IPCA (Series 2) 21th issue debentures Own funds 2022 CDI + 0.60% e CDI+ 0.90% 22th issue debentures Own funds 2025 CDI +0.58 (Series 1) and CDI + 0.90% (Series 2) and 6.0% (Series 3) IPCA (Series 3) 23th issue debentures Own funds 2027 CDI +0.63 (Series 1) and CDI + 0.49% (Series 2) 24th issue debentures Own funds 2029 3.20 (Series 1) and 3.37% (Series 2) IPCA (Series 1 and 2) Brazilian Federal Savings Bank Own funds 2020/2039 5% to 9.5% TR Brazilian Development Bank - BNDES PAC Own funds 2023 TJLP+2.15% Brazilian Development Bank - BNDES PAC II 9751 Own funds 2027 TJLP+1.72% Brazilian Development Bank - BNDES PAC II 9752 Own funds 2027 TJLP+1.72% Brazilian Development Bank - BNDES ONDA LIMPA Own funds 2025 TJLP+1.92% Brazilian Development Bank - BNDES TIETÊ III Own funds 2028 TJLP+1.66% Brazilian Development Bank - BNDES 2015 Own funds 2035 TJLP+2.5% Brazilian Development Bank - BNDES 2014 Own funds 2026 TJLP+1.76% Leases (Concession Agreements, Program Contracts and Contract Assets) 2035 7.73% to 10.12% IPC Leases (Others) 2023 6.01% to 9.84% Other Own funds 2025 3% (FEHIDRO) and TJLP + 1.5% (FINEP) Foreign currency Guarantees Maturity Annual interest rates Exchange rate changes Inter-American Development Bank - BID 1212 - US$61,668 thousand Government 2025 3.31% (*) US$ Inter-American Development Bank - BID 2202 - US$510,573 thousand Government 2035 3.42% (*) US$ International Bank for Reconstruction and Development - BIRD US$88,871 thousand Government 2034 2.85% (*) US$ Eurobonds – US$350,000 thousand - 2020 6.25% US$ JICA 15 – ¥11,524,300 thousand Government 2029 1.8% and 2.5% Yen JICA 18 – ¥10,361,600 thousand Government 2029 1.8% and 2.5% Yen JICA 17– ¥2,830,420 thousand Government 2035 1.2% and 0.01% Yen JICA 19– ¥31,736,565 thousand Government 2037 1.7% and 0.01% Yen BID 1983AB – US$40,769 thousand - 2023 2.08% to 2.38% (*) US$ (*)Rates comprising LIBOR + contractually defined spread. |
Borrowings payment schedule | 2020 2021 2022 2023 2024 2025 2026 to 2040 TOTAL LOCAL CURRENCY Debentures 601,861 484,363 563,291 366,330 700,583 280,062 644,924 3,641,414 Brazilian Federal Savings Bank 83,519 87,951 92,727 85,554 84,289 89,569 901,570 1,425,179 BNDES 135,036 134,584 134,584 128,886 123,400 105,460 435,912 1,197,862 Leases (Concession Agreements, Program Contracts and Contract Assets) 27,314 29,093 31,063 33,711 36,697 39,951 261,842 459,671 Leases (Others) 51,088 22,630 678 57 - - - 74,453 Other 1,665 1,865 1,865 1,825 1,384 1,268 - 9,872 Interest and charges 77,460 - - - - - - 77,460 TOTAL IN LOCAL CURRENCY 977,943 760,486 824,208 616,363 946,353 516,310 2,244,248 6,885,911 FOREIGN CURRENCY BID 170,051 170,051 170,051 170,051 170,051 170,051 1,271,183 2,291,489 BIRD 24,505 24,505 24,505 24,505 24,505 24,505 208,373 355,403 Eurobonds 1,409,921 - - - - - - 1,409,921 JICA 161,144 154,857 154,857 154,857 154,857 154,857 1,158,756 2,094,185 BID 1983AB 71,312 31,005 31,005 29,511 - - - 162,833 Interest and charges 44,967 - - - - - - 44,967 TOTAL IN FOREIGN CURRENCY 1,881,900 380,418 380,418 378,924 349,413 349,413 2,638,312 6,358,798 Overall Total 2,859,843 1,140,904 1,204,626 995,287 1,295,766 865,723 4,882,560 13,244,709 |
Changes in borrowings | December 31, 2018 Addition as per IFRS 16 Funding Borrowing costs Monetary variation and exchange rate changes Inflation adjustment / exchange rate changes - Capitalized Interest paid Amortization Accrued interest Provision for interest and fees - Capitalized Amortization of borrowing costs December 31, 2019 LOCAL CURRENCY Debentures 3,486,861 - 1,266,755 (11,814) 42,692 - (234,307) (1,055,623) 195,586 17,233 3,845 3,711,228 Brazilian Federal Savings Bank 1,345,684 - 162,767 - - - (109,128) (79,404) 74,421 34,910 - 1,429,250 BNDES 1,072,605 - 256,981 (628) 2,082 826 (83,419) (131,026) 60,644 23,112 234 1,201,411 Leases (Concession Agreements, Program Contracts and Contract Assets) 568,666 - - - 1,765 3,761 (47,663) (123,880) 49,160 7,862 - 459,671 Leases (Others) - 113,233 - - - - (1,141) (42,646) 5,007 - - 74,453 Other 9,571 - 1,683 - 28 - (655) (1,383) 652 2 - 9,898 TOTAL IN LOCAL CURRENCY 6,483,387 113,233 1,688,186 (12,442) 46,567 4,587 (476,313) (1,433,962) 385,470 83,119 4,079 6,885,911 FOREIGN CURRENCY BID 2,399,985 - - - 40,594 49,387 (83,602) (171,892) 26,332 54,431 955 2,316,190 BIRD 356,420 - 2,540 (2,540) 12,575 1,657 (10,627) (12,273) 8,548 1,561 19 357,880 Deutsche Bank 292,872 - - - 13,255 - (18,562) (303,866) 12,929 1,240 2,132 - Eurobonds 1,358,412 - - - 54,565 - (102,883) - 94,095 8,943 824 1,413,956 JICA 2,036,128 - 117,861 (112) 104,027 3,675 (35,001) (155,064) 32,194 3,013 187 2,106,908 BID 1983AB 225,592 - - (105) 8,943 - (10,338) (71,141) 9,111 870 932 163,864 TOTAL IN FOREIGN CURRENCY 6,669,409 - 120,401 (2,757) 233,959 54,719 (261,013) (714,236) 183,209 70,058 5,049 6,358,798 Overall Total 13,152,796 113,233 1,808,587 (15,199) 280,526 59,306 (737,326) (2,148,198) 568,679 153,177 9,128 13,244,709 December 31, 2017 Funding Borrowings costs Monetary variation and exchange rate changes Inflation adjustment / update incorporated interest - Capitalized Interest and fees paid Amortization Accrued interest Interest and fees – Capitalized (*) Borrowings costs - expenses December 31, 2018 LOCAL CURRENCY Debentures 3,576,842 750,000 (3,021) 62,676 - (259,175) (905,080) 226,810 34,409 3,400 3,486,861 Brazilian Federal Savings Bank 1,236,674 194,244 - - - (102,772) (85,515) 75,668 27,385 - 1,345,684 BNDES 1,042,036 131,000 - 3,438 4,001 (90,397) (102,314) 28,909 55,725 207 1,072,605 Leases 561,616 - - - 6,366 (38,196) (17,427) 40,290 16,017 - 568,666 Other 10,977 - - 69 - (772) (1,470) 763 4 - 9,571 TOTAL IN LOCAL CURRENCY 6,428,145 1,075,244 (3,021) 66,183 10,367 (491,312) (1,111,806) 372,440 133,540 3,607 6,483,387 FOREIGN CURRENCY BID 1,743,257 484,690 (2,365) 237,433 53,208 (55,391) (130,520) 26,910 41,878 885 2,399,985 BIRD 303,278 - - 48,279 3,462 (7,607) - 6,945 2,044 19 356,420 Deutsche Bank 496,726 - - 62,918 - (35,207) (268,508) 28,862 4,454 3,627 292,872 Eurobonds 1,158,642 - - 198,380 - (97,952) - 85,072 13,448 822 1,358,412 JICA 1,700,448 80,196 (191) 329,638 6,787 (33,519) (82,608) 33,992 1,209 176 2,036,128 BID 1983AB 270,470 - - 39,241 - (11,060) (85,306) 9,681 1,488 1,078 225,592 TOTAL IN FOREIGN CURRENCY 5,672,821 564,886 (2,556) 915,889 63,457 (240,736) (566,942) 191,462 64,521 6,607 6,669,409 Overall Total 12,100,966 1,640,130 (5,577) 982,072 73,824 (732,048) (1,678,748) 563,902 198,061 10,214 13,152,796 (*) amount related to accrued interest which as part of the contract assets. December 31, 2016 Funding Borrowings costs Lease Monetary variation and exchange rate changes Inflation adjustment / update incorporated interest - Capitalized Interest and fees paid Amortization Accrued interest Interest and fees – Capitalized (*) Borrowings costs - expenses December 31, 2017 LOCAL CURRENCY Debentures 3,641,912 500,000 (1,157) - 51,768 - (301,493) (597,794) 176,780 103,215 3,611 3,576,842 Brazilian Federal Savings Bank 1,150,691 144,654 - - 5,495 1,415 (95,854) (65,836) 78,283 17,826 - 1,236,674 BNDES 946,984 171,153 - - 5,405 2,512 (78,466) (87,993) 33,938 48,294 209 1,042,036 Leases 552,516 - - 24,693 - - - (15,593) - - - 561,616 Other 11,677 - - - 116 - (876) (750) 779 31 - 10,977 TOTAL IN LOCAL CURRENCY 6,303,780 815,807 (1,157) 24,693 62,784 3,927 (476,689) (767,966) 289,780 169,366 3,820 6,428,145 FOREIGN CURRENCY BID 1,811,664 96,889 (2,497) - (15,193) 40,228 (38,654) (189,280) 22,547 16,803 750 1,743,257 BIRD 261,337 35,710 - - 2,874 2,837 (4,049) - 3,662 888 19 303,278 Deutsche Bank 485,090 - (720) - 7,335 - (31,774) - 21,286 11,925 3,584 496,726 Eurobonds 1,141,469 - - - 17,115 - (85,338) - 55,046 29,529 821 1,158,642 JICA 1,617,215 63,909 (287) - 82,563 2,525 (28,652) (65,702) 27,602 1,115 160 1,700,448 BID 1983AB 343,588 - (82) - 1,609 - (10,931) (75,610) 6,858 3,715 1,323 270,470 TOTAL IN FOREIGN CURRENCY 5,660,363 196,508 (3,586) - 96,303 45,590 (199,398) (330,592) 137,001 63,975 6,657 5,672,821 Overall Total 11,964,143 1,012,315 (4,743) 24,693 159,087 49,517 (676,087) (1,098,558) 426,781 233,341 10,477 12,100,966 (*) amount related to accrued interest which as part of the contract assets. (*) amount related to accrued interest which as part of the contract asset |
Funding | On May 27, 2019, the Company raised funds through the 23 rd Value Maturity Remuneration Series 1 S eries 2 4 9 1,7 5 375,000 May /2 0 2 May /2 0 2 CDI CDI + 0.49 p On July 24, 2019, the Company raised funds through the 24 th Value Maturity Remuneration Series 1 S eries 2 10 0,00 300,000 July/ 2 0 2 July / 2 0 29 IPCA 3. 2 p IPCA + 3.37 p |
Restrictive covenants ratios | Restrictive Ratios Adjusted EBITDA / Adjusted financial expenses Equal to or higher than 2.80 Adjusted net debt / Adjusted EBITDA Equal to or lower than 3.80 Adjusted total debt / Adjusted EBITDA Lower than 3.65 Other onerous debt (1) Equal to or lower than 1.30 Adjusted current ratio Higher than 1.00 EBITDA / Paid financial expenses Equal to or higher than 2.35 Net debt / Adjusted EBITDA Equal to or lower than 3.50 (1) “Other Onerous Debts” correspond to the sum of social security liabilities, health care plan, installment payment of tax debts and installment payment of debts with electricity supplier. |
Borrowings and financing - Credit Limits | Agent December 31, 2019 (in millions of reais (*)) Brazilian Federal Savings Bank 1,729 Brazilian Development Bank – BNDES 1,203 Japan International Cooperation Agency – JICA 94 Inter-American Development Bank – BID 1,209 International Bank for Reconstruction and Development - IBRD 1,005 Other 41 TOTAL 5,281 |
17. Taxes recoverable_payable (
17. Taxes recoverable/payable (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Taxes Recoverablepayable | |
Current tax assets | December 31, 2019 December 31, 2018 Recoverable taxes Income tax and social contribution 136,436 361,758 Withholding income tax (IRRF) on financial investments 1,359 6,423 Other federal taxes 3,471 12,522 Total 141,266 380,703 |
Current tax liabilities | December 31, 2019 December 31, 2018 Taxes and contributions payable Cofins and Pasep 94,027 82,381 INSS (Social Security contribution) 39,404 38,871 IRRF (withholding income tax) 69,932 66,825 Other 46,955 12,486 Total 250,318 200,563 |
18. Deferred taxes and contri_2
18. Deferred taxes and contributions (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Deferred Taxes And Contributions | |
Deferred taxes | December 31, 2019 December 31, 2018 Deferred income tax assets Provisions 366,673 337,833 Pension obligations - G1 157,998 157,044 Donations of underlying asset on concession agreements 51,818 54,131 Credit losses 145,622 197,920 Other 183,147 186,887 Total deferred tax assets 905,258 933,815 Deferred income tax liabilities Temporary difference on concession of intangible asset (408,732) (433,842) Capitalization of borrowing costs (409,236) (420,978) Profit on supply to governmental entities (372,289) (206,978) Actuarial gain/loss – G1 Plan (54,222) (36,430) Construction margin (83,399) (86,164) Borrowing costs (11,376) (10,665) Total deferred tax liabilities (1,339,254) (1,195,057) Deferred tax assets (liabilities), net (433,996) (261,242) |
Realization | December 31, 2019 December 31, 2018 Deferred income tax assets to be realized within 12 months 189,740 158,294 to be realized after one year 715,518 775,521 Total deferred tax assets 905,258 933,815 Deferred income tax liabilities to be realized within 12 months (35,954) (32,546) to be realized after one year (1,303,300) (1,162,511) Total deferred tax liabilities (1,339,254) (1,195,057) Deferred tax asset (liabilities) (433,996) (261,242) |
Changes | Deferred income tax assets December 31, 2018 Net change December 31, 2019 Provisions 337,833 28,840 366,673 Pension obligations - G1 157,044 954 157,998 Donations of underlying asset on concession agreements 54,131 (2,313) 51,818 Credit losses 197,920 (52,298) 145,622 Other 186,887 (3,740) 183,147 Total 933,815 (28,557) 905,258 Deferred income tax liabilities Temporary difference on concession of intangible asset (433,842) 25,110 (408,732) Capitalization of borrowing costs (420,978) 11,742 (409,236) Profit on supply to governmental entities (206,978) (165,311) (372,289) Actuarial (gain)/loss – G1 (36,430) (17,792) (54,222) Construction margin (86,164) 2,765 (83,399) Borrowing costs (10,665) (711) (11,376) Total (1,195,057) (144,197) (1,339,254) Deferred tax assets (liabilities), net (261,242) (172,754) (433,996) Deferred income tax assets December 31, 2017 Net change December 31, 2018 Provisions 482,863 (145,030) 337,833 Pension obligations - G1 165,503 (8,459) 157,044 Donations of underlying asset on concession agreements 55,112 (981) 54,131 Credit losses 199,063 (1,143) 197,920 Other 151,562 35,325 186,887 Total 1,054,103 (120,288) 933,815 Deferred income tax liabilities Temporary difference on concession of intangible asset (460,177) 26,335 (433,842) Capitalization of borrowing costs (415,379) (5,599) (420,978) Profit on supply to governmental entities (76,705) (130,273) (206,978) Actuarial (gain)/loss – G1 (36,538) 108 (36,430) Construction margin (88,947) 2,783 (86,164) Borrowing costs (13,111) 2,446 (10,665) Total (1,090,857) (104,200) (1,195,057) Deferred tax assets (liabilities), net (36,754) (224,488) (261,242) Deferred income tax assets December 31, 2016 Net change December 31, 2017 Provisions 524,129 (41,266) 482,863 Actuarial gain/loss – G1 85,044 (85,044) - Pension obligations - G1 167,922 (2,419) 165,503 Donations of underlying asset on concession agreements 57,317 (2,205) 55,112 Credit losses 266,757 (67,694) 199,063 Other 151,247 315 151,562 Total 1,252,416 (198,313) 1,054,103 Deferred income tax liabilities Temporary difference on concession of intangible asset (492,341) 32,164 (460,177) Capitalization of borrowing costs (374,512) (40,867) (415,379) Profit on supply to governmental entities (92,365) 15,660 (76,705) Actuarial gain/loss – G1 - (36,538) (36,538) Construction margin (91,790) 2,843 (88,947) Borrowing costs (15,063) 1,952 (13,111) Total (1,066,071) (24,786) (1,090,857) Deferred tax assets (liabilities), net 186,345 (223,099) (36,754) December 31, 2019 December 31, 2018 December 31, 2017 Opening balance (261,242) (36,754) 186,345 Net change in the year: - corresponding entry to the income statement (154,962) (224,596) (101,517) - corresponding entry to valuation adjustments to equity (Note 20 (b)) (17,792) 108 (121,582) Total net change (172,754) (224,488) (223,099) Closing balance (433,996) (261,242) (36,754) |
Reconciliation of the effective tax rate | December 31, 2019 December 31, 2018 December 31, 2017 Profit before income taxes 4,677,942 3,912,319 3,503,614 Statutory rate 34% 34% 34% Estimated expense at statutory rate (1,590,500) (1,330,186) (1,191,229) Tax benefit of interest on equity 312,339 264,816 245,444 Permanent differences Provision – Law 4,819/1958 – G0 (i) (44,426) (46,544) (57,104) Donations (19,888) (13,068) (12,413) Other differences 32,050 47,731 30,998 Income tax and social contribution (1,310,425) (1,077,251) (984,304) Current income tax and social contribution (1,155,463) (852,655) (882,787) Deferred income tax and social contribution (154,962) (224,596) (101,517) Effective rate 28% 28% 28% (i) Permanent difference related to the provision for actuarial liability (Note 20 (b) (iii)). |
19. Provisions (Tables)
19. Provisions (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Provisions [abstract] | |
Lawsuits and proceedings that resulted in provisions | Provisions Escrow deposits December 31, 2019 Provisions Escrow deposits December 31, 2018 Customer claims (i) 253,665 (9,973) 243,692 290,649 (43,841) 246,808 Supplier claims (ii) 153,654 (298) 153,356 67,985 (24,380) 43,605 Other civil claims (iii) 93,910 (16,496) 77,414 98,302 (13,519) 84,783 Tax claims (iv) 59,143 (3,518) 55,625 63,335 (8,091) 55,244 Labor claims (v) 325,129 (12,329) 312,800 302,935 (10,932) 292,003 Environmental claims (vi) 192,950 (29) 192,921 170,419 - 170,419 Total 1,078,451 (42,643) 1,035,808 993,625 (100,763) 892,862 Current 550,247 - 550,247 458,387 - 458,387 Noncurrent 528,204 (42,643) 485,561 535,238 (100,763) 434,475 |
Changes in provisions | December 31, 2018 Additional provisions Interest and inflation adjustment Use of the accrual Amounts not used (reversal) December 31, 2019 Customer claims (i) 290,649 57,314 53,929 (99,379) (48,848) 253,665 Supplier claims (ii) 67,985 54,223 102,686 (42,948) (28,292) 153,654 Other civil claims (iii) 98,302 28,888 18,713 (9,766) (42,227) 93,910 Tax claims (iv) 63,335 11,821 2,918 (4,982) (13,949) 59,143 Labor claims (v) 302,935 167,995 61,483 (112,084) (95,200) 325,129 Environmental claims (vi) 170,419 42,198 24,358 (312) (43,713) 192,950 Subtotal 993,625 362,439 264,087 (269,471) (272,229) 1,078,451 Escrow deposits (100,763) (14,051) (11,844) 19,191 64,824 (42,643) Total 892,862 348,388 252,243 (250,280) (207,405) 1,035,808 December 31, 2017 Additional provisions Interest and inflation adjustment Use of the accrual Amounts not used (reversal) December 31, 2018 Customer claims (i) 438,619 29,732 40,749 (141,421) (77,030) 290,649 Supplier claims (ii) 332,037 36,100 21,161 (308,253) (13,060) 67,985 Other civil claims (iii) 114,544 22,578 12,939 (16,146) (35,613) 98,302 Tax claims (iv) 77,100 10,763 4,157 (2,490) (26,195) 63,335 Labor claims (v) 299,842 83,499 32,290 (44,900) (67,796) 302,935 Environmental claims (vi) 160,446 33,392 18,294 (115) (41,598) 170,419 Subtotal 1,422,588 216,064 129,590 (513,325) (261,292) 993,625 Escrow deposits (344,384) (53,205) (5,533) 269,248 33,111 (100,763) Total 1,078,204 162,859 124,057 (244,077) (228,181) 892,862 December 31, 2016 Additional provisions Interest and inflation adjustment Use of the accrual Amounts not used (reversal) December 31, 2017 Customer claims (i) 572,210 26,642 44,805 (138,466) (66,572) 438,619 Supplier claims (ii) 332,667 23,017 36,888 (39,433) (21,102) 332,037 Other civil claims (iii) 131,286 13,517 12,057 (19,975) (22,341) 114,544 Tax claims (iv) 69,898 6,877 7,392 (259) (6,808) 77,100 Labor claims (v) 285,413 55,106 38,861 (43,498) (36,040) 299,842 Environmental claims (vi) 150,084 32,377 16,156 (24,585) (13,586) 160,446 Subtotal 1,541,558 157,536 156,159 (266,216) (166,449) 1,422,588 Escrow deposits (368,483) (29,089) (7,823) 15,354 45,657 (344,384) Total 1,173,075 128,447 148,336 (250,862) (120,792) 1,078,204 |
Lawsuits deemed as contingent liabilities | December 31, 2019 December 31, 2018 Customer claims (i) 86,061 207,600 Supplier claims (ii) 1,986,736 1,459,100 Other civil claims (iii) 679,623 719,300 Tax claims (iv) 1,184,811 1,439,100 Labor claims (v) 631,364 624,200 Environmental claims (vi) 4,864,894 4,343,800 Total 9,433,489 8,793,100 |
20. Employees benefits (Tables)
20. Employees benefits (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Employees Benefits | |
Pension plan benefits | December 31, 2019 December 31, 2018 G1 Plan G0 Plan Total G1 Plan G0 Plan Total Present value of defined benefit obligations (3,067,094) (3,046,255) (6,113,349) (2,532,338) (2,606,107) (5,138,445) Fair value of the plan’s assets 2,752,417 - 2,752,417 2,168,436 - 2,168,436 Liability as per statement of financial position – pension obligations (314,677) (3,046,255) (3,360,932) (363,902) (2,606,107) (2,970,009) |
Reconciliation of defined benefit obligations | December 31, 2019 December 31, 2018 G1 Plan G0 Plan Total G1 Plan G0 Plan Total Plan’s liabilities Defined benefit obligation, beginning of the year (2,532,338) (2,606,107) (5,138,445) (2,319,841) (2,543,877) (4,863,718) Current service cost (47,001) (227,367) (274,368) (13,905) (232,248) (246,153) Interest cost (224,429) - (224,429) (213,201) - (213,201) Actuarial (gains)/losses recorded as other comprehensive income (392,876) (397,597) (790,473) (114,188) (10,783) (124,971) Benefits paid 129,550 184,816 314,366 128,797 180,801 309,598 Defined benefit obligation, end of the year (3,067,094) (3,046,255) (6,113,349) (2,532,338) (2,606,107) (5,138,445) |
Fair value of plan | Plan’s assets Fair value of the plan’s assets, beginning of the year 2,168,436 - 2,168,436 1,931,380 - 1,931,380 Expected return on the plan assets 192,965 - 192,965 179,449 - 179,449 Expected Company’s contributions 36,968 - 36,968 36,199 - 36,199 Expected participant’s contributions 38,391 - 38,391 36,336 - 36,336 Benefits paid (129,549) - (129,549) (128,797) - (128,797) Actuarial gains/(losses) recorded as other comprehensive income 445,206 - 445,206 113,869 - 113,869 Fair value of the plan’s assets, end of the year 2,752,417 - 2,752,417 2,168,436 - 2,168,436 (Deficit)/Surplus (314,677) (3,046,255) (3,360,932) (363,902) (2,606,107) (2,970,009) |
(Gains)/losses, due to changes in assumptions | December 31, 2019 December 31, 2018 December 31, 2017 G1 Plan G0 Plan Total G1 Plan G0 Plan Total G1 Plan G0 Plan Total Actuarial gains/(losses) on obligations (392,876) (397,597) (790,473) (114,188) (10,783) (124,971) 305,511 51,535 357,046 Actuarial gains/(losses) recorded as other comprehensive income 445,206 - 445,206 113,869 - 113,869 52,083 - 52,083 Total gains/(losses) 52,330 (397,597) (345,267) (319) (10,783) (11,102) 357,594 51,535 409,129 Deferred income tax and social contribution (17,792) - (17,792) 108 - 108 (121,582) - (121,582) Valuation adjustments to equity 34,538 (397,597) (363,059) (211) (10,783) (10,994) 236,012 51,535 287,547 |
Amounts recognized in income statement | December 31, 2019 December 31, 2018 December 31, 2017 G1 Plan G0 Plan Total G1 Plan G0 Plan Total G1 Plan G0 Plan Total Cost of service, net 8,609 227,367 235,976 (22,431) 232,248 209,817 (35,093) 262,873 227,780 Interest cost rates 224,429 - 224,429 213,201 - 213,201 260,409 - 260,409 Expected return on the plan’s assets (192,965) - (192,965) (179,449) - (179,449) (183,689) - (183,689) Amount received from GESP (undisputed) - (97,300) (97,300) - (96,282) (96,282) - (95,191) (95,191) Total expenses 40,073 130,067 170,140 11,321 135,966 147,287 41,627 167,682 209,309 |
Actuarial assumptions | December 31, 2019 December 31, 2018 December 31, 2017 G1 Plan G0 Plan G1 Plan G0 Plan G1 Plan G0 Plan Discount rate – actual rate (NTN-B) 3.37% a.a. 3.36% a.a. 4.91% a.a. 4.84% 5.35% a.a. 5.30% Inflation rate 3.5% a.a. 3.5% a.a. 4.01% a.a. 4.01% 3.96% a.a. 3.96% Expected nominal rate of return on assets 6.99%a.a. - 9.12%a.a. - 9.52%a.a. - Nominal rate of salary growth 5.57% a.a. 5.57% a.a 6.09% a.a. 6.09% a.a 6.04% a.a. 6.04% a.a Mortality table AT-2000 AT-2000 AT-2000 AT-2000 AT-2000 AT-2000 |
Sensitivity analysis of benefit plans | Impact on presente value of the defined benefit obligations Assumptions Change in assumption G1 G0 Discount rate Increase of 1.0% Decrease of R$ 326,714 Decrease of R$ 301,727 Decrease of 1.0% Increase of R$ 396,026 Increase of R$ 314,156 Life expectation Increase of 1 year Increase of R$ 80,048 Increase of R$ 117,324 Decrease of 1 year Decrease of R$ 72,676 Decrease of R$ 140,051 Wage increase rate Increase of 1.0% Increase of R$ 36,140 Increase of R$ 388,886 Decrease of 1.0% Decrease of R$ 31,070 Decrease of R$ 372,127 |
Benefit plan expenses recognized by employer | 2020 Service cost 3,796 Interest cost rates 208,485 Net profitability on financial assets (187,317) Expense to be recognized by the employeer 24,964 |
Plan assets | December 31, 2019 % December 31, 2018 % Total fixed income 1,795,554 65.2 1,477,643 68.1 Total equities 301,707 11.0 249,740 11.6 Total structures investments 630,933 22.9 431,828 19.9 Other 24,223 0.9 9,225 0.4 Fair value of the plan’s assets 2,752,417 100 2,168,436 100 |
Expense related to defined benefit plan | 2020 Interest cost rate 206,262 Expense to be recognized 206,262 |
23. Equity (Tables)
23. Equity (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Equity | |
Subscribed and paid-in capital | December 31, 2019 December 31, 2018 Number of shares % Number of shares % State Department of Finance 343,524,285 50.26 343,524,285 50.26 Companhia Brasileira de Liquidação e Custódia (**) 235,643,765 34.47 212,612,143 31.10 The Bank of New York ADR Department (equivalent in shares) (*) (**) 103,823,655 15.19 125,278,967 18.33 Other 518,164 0.08 2,094,474 0.31 683,509,869 100.00 683,509,869 100.00 (*) each ADR corresponds to 1 share. (**) custodians |
Distribution of earnings | 2019 2018 2017 Profit for the year 3,367,517 2,835,068 2,519,310 (-) Legal reserve - 5% 168,376 141,755 125,965 3,199,141 2,693,313 2,393,345 Minimum mandatory dividend – 25% 799,785 673,328 598,336 Dividend per share and per ADS 1.17012 0.9851 0.87539 |
Allocation of profit | 2019 2018 2017 Profit (+) Profit for the year 3,367,517 2,835,068 2,519,310 (-) Legal reserve – 5% 168,376 141,755 125,965 (-) Minimum mandatory dividends 799,785 673,328 598,336 (-) Additional proposed dividends 141,203 118,859 105,543 Investment reserve recorded 2,258,153 1,901,126 1,689,466 |
Other comprehensive loss | G1 plan G0 plan Total Balance as of December 31, 2018 70,716 (619,811) (549,095) Actuarial gains/(losses) for the year (Note 20 (b)) 34,538 (397,597) (363,059) Balance as of December 31, 2019 105,254 (1,017,408) (912,154) |
24. Earnings per share (Tables)
24. Earnings per share (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Earnings per share [abstract] | |
Earnings per share, basic and diluted | 2019 2018 2017 Earnings attributable to Company’s owners 3,367,517 2,835,068 2,519,310 Weighted average number of common shares issued 683,509,869 683,509,869 683,509,869 Basic and diluted earnings per share (reais per share) 4.93 4.15 3.69 |
25. Operating segment informa_2
25. Operating segment information (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Disclosure of operating segments [abstract] | |
Operating segment information | 2019 Sanitation (i) Reconciliation to the financial statements (ii) Balance as per financial statements Gross operating revenue 16,134,032 2,946,566 19,080,598 Gross sales deductions (1,096,944) - (1,096,944) Net operating revenue 15,037,088 2,946,566 17,983,654 Costs, selling and administrative expenses (9,375,590) (2,881,394) (12,256,984) Income from operations before other net operating expenses, net and equity accounting 5,661,498 65,172 5,726,670 Other operating income / (expenses), net (18,748) Equity accounting 3,701 Financial result, net (1,033,681) Income from operations before taxes 4,677,942 Depreciation and amortization (1,780,094) (1,780,094) (i) See note 32 for further information about non-cash items, other than depreciation and amortization that impact segment results, and for additionals to long-lived asset information; (ii) Construction revenue and related costs not reported to the CODM. Revenue from construction is recognized in accordance with IFRIC 12 (Concession Agreements) and IFRS 15 (Revenue from Contracts with Customers), as all performance obligations are satisfied over time. See Note 14 (e). 2018 Sanitation (i) Reconciliation to the financial statements (ii) Balance as per financial statements Gross operating revenue 14,253,609 2,802,670 17,056,279 Gross sales deductions (971,185) - (971,185) Net operating revenue 13,282,424 2,802,670 16,085,094 Costs, selling and administrative expenses (8,203,883) (2,739,657) (10,943,540) Income from operations before other net operating expenses, net and equity accounting 5,078,541 63,013 5,141,554 Other operating income / (expenses), net 28,591 Equity accounting 6,510 Financial result, net (1,264,336) Income from operations before taxes 3,912,319 Depreciation and amortization (1,392,541) (1,392,541) (i) See note 32 for further information about non-cash items, other than depreciation and amortization that impact segment results, and for additionals to long-lived asset information; (ii) Construction revenue and related costs not reported to the CODM. Revenue from construction is recognized in accordance with IFRIC 12 (Concession Agreements) and IFRS 15 (Revenue from Contracts with Customers), as all performance obligations are satisfied over time. See Note 14 (e). 2017 Sanitation (i) Reconciliation to the financial statements (ii) Balance as per financial statements Gross operating revenue 12,223,746 3,150,877 15,374,623 Gross sales deductions (766,390) - (766,390) Net operating revenue 11,457,356 3,150,877 14,608,233 Costs, selling and administrative expenses (7,566,104) (3,080,542) (10,646,646) Income from operations before other net operating expenses, net and equity accounting 3,891,252 70,335 3,961,587 Other operating income / (expenses), net (5,679) Equity accounting 5,760 Financial result, net (458,054) Income from operations before taxes 3,503,614 Depreciation and amortization (1,301,897) - (1,301,897) (i) See note 32 for further information about non-cash items, other than depreciation and amortization that impact segment results, and for additionals to long-lived asset information; (ii) Construction revenue and related costs not reported to the CODM. |
Impacts on gross operating income and costs | 2019 2018 2017 Gross revenue from construction recognized under IFRIC 12 (a) 2,946,566 2,802,670 3,150,877 Construction costs recognized under IFRIC 12 (a) (2,881,394) (2,739,657) (3,080,542) Construction margin 65,172 63,013 70,335 (a) Revenue from concession construction contracts is recognized in accordance with Note 3.3 (b ). |
26. Insurance (Tables)
26. Insurance (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Insurance | |
Insurance coverage | Coverage Specified risks – fire 2,185,827 Engineering risk 1,960,248 Guarantee insurance for escrow deposit 500,000 Traditional guarantee insurance 100,000 Civil liability– D&O (Directors and Officers) 100,000 Civil liability – works 105,695 Domestic and international transportation 6,058 Civil liability – operations 5,000 Other 14 Total 4,962,842 |
27. Operating revenue (Tables)
27. Operating revenue (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Operating Revenue | |
Operating revenue | 2019 2018 2017 Metropolitan region of São Paulo 11,849,776 10,295,509 8,636,926 Regional Systems 4,284,256 3,958,100 3,586,820 Total 16,134,032 14,253,609 12,223,746 |
Reconciliation between gross operating income and net operating income | 2019 2018 2017 Revenue from sanitation services (i) 16,134,032 14,253,609 12,223,746 Construction revenue 2,946,566 2,802,670 3,150,877 Sales tax (1,035,051) (916,808) (757,619) Regulatory, Control and Oversight Fee (TRCF) (ii) (61,893) (54,377) (8,771) Net revenue 17,983,654 16,085,094 14,608,233 (i) Includes the amount of R$70,122 corresponding to the TRCF charged from customers from the municipalities regulated by ARSESP (R$ 63,901 in 2018). (ii) Amount payable to ARSESP referring to regulatory, control and oversight activities, pursuant to State Complementary Law 1,025/07. |
28. Operating costs and expen_2
28. Operating costs and expenses (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Operating Costs And Expenses | |
Operating costs and expenses | 2019 2018 2017 Operating costs Salaries, payroll charges and benefits (1,938,265) (1,959,539) (1,841,571) Pension obligations (49,564) (25,066) (48,381) Construction costs (Note 25) (2,881,394) (2,739,657) (3,080,542) General supplies (259,401) (238,034) (163,712) Treatment supplies (310,380) (265,146) (287,592) Outsourced services (1,250,890) (996,477) (857,063) Electricity (1,140,160) (956,840) (794,352) General expenses (647,804) (629,253) (531,985) Depreciation and amortization (1,659,779) (1,276,444) (1,173,765) (10,137,637) (9,086,456) (8,778,963) Selling expenses Salaries, payroll charges and benefits (270,549) (289,378) (305,440) Pension obligations (6,848) (3,602) (7,296) General supplies (10,332) (6,391) (4,451) Outsourced services (360,190) (273,470) (258,287) Electricity (1,333) (1,154) (762) General expenses (122,503) (102,213) (94,112) Depreciation and amortization (31,649) (17,272) (15,664) (803,404) (693,480) (686,012) Bad debt expense, net of recoveries (Note 9 (c)) (128,099) (166,727) (82,681) Administrative expenses Salaries, payroll charges and benefits (278,507) (254,284) (229,752) Pension obligations (138,207) (141,758) (171,830) General supplies (3,216) (4,881) (5,675) Outsourced services (197,357) (204,728) (183,746) Electricity (1,436) (1,363) (965) General expenses (407,250) (232,288) (302,113) Depreciation and amortization (88,666) (98,825) (112,468) Tax expenses (73,205) (58,750) (92,441) (1,187,844) (996,877) (1,098,990) Operating costs and expenses Salaries, payroll charges and benefits (2,487,321) (2,503,201) (2,376,763) Pension obligations (194,619) (170,426) (227,507) Construction costs (Note 25) (2,881,394) (2,739,657) (3,080,542) General supplies (272,949) (249,306) (173,838) Treatment supplies (310,380) (265,146) (287,592) Outsourced services (1,808,437) (1,474,675) (1,299,096) Electricity (1,142,929) (959,357) (796,079) General expenses (1,177,557) (963,754) (928,210) Depreciation and amortization (1,780,094) (1,392,541) (1,301,897) Tax expenses (73,205) (58,750) (92,441) Bad debt expense, net of recoveries (Note 9 (c)) (128,099) (166,727) (82,681) (12,256,984) (10,943,540) (10,646,646) |
29. Financial income (expense_2
29. Financial income (expenses) (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Financial Income | |
Financial income (expenses) | 2019 2018 2017 Financial expenses Interest and charges on borrowings and financing – local currency (331,367) (332,149) (289,780) Interest and charges on borrowings and financing – foreign currency (165,421) (171,686) (119,100) Other financial expenses (i) (344,508) (187,563) (97,533) Income tax over international remittance (17,650) (19,779) (17,901) Inflation adjustment on borrowings and financing (ii) (44,802) (66,183) (62,787) Other inflation adjustments (i) (107,584) (45,193) (50,941) Interest and inflation adjustments on provisions (iii) (162,093) 14,586 (50,238) Total financial expenses (1,173,425) (807,967) (688,280) Financial income Inflation adjustment gains (iv) 91,180 105,952 89,010 Income on short-term investments (v) 151,622 187,094 195,992 Interest income (vi) 150,054 175,939 57,166 Cofins and Pasep (20,028) (22,693) (16,366) Other 14 10 442 Total financial income 372,842 446,302 326,244 Financial income (expenses), net before exchange rate changes (800,583) (361,665) (362,036) Exchange gains (losses) Exchange rate changes on borrowings and financing (vii) (233,960) (915,897) (96,300) Exchange rate changes on assets 863 13,235 336 Other exchange rate changes (1) (9) (54) Exchange rate changes, net (233,098) (902,671) (96,018) Financial income (expenses), net (1,033,681) (1,264,336) (458,054) (i) Increase in recognition of interest on Public-Private Partnership (PPP) contracts, due to the beginning of the the service provision of São Lourenço Production System (SPSL), on July 10, 2018. (ii) Decrease of R$ 21.4 milion in monetary variation derives mainly on local borrowings and financing, mainly in debentures, due to the amortization of the 15 th th (iii) Lawsuits accrued interest and monetary restatement due to inflation in Brazil. The increase in interest and monetary restatement on lawsuits is due to a change in the expectations regarding unfavorable outcome of the court cases against the Company. (iv) The monetary variations gains decreased mainly due to the higher restatement on escrow deposits. (v) The decrease is a result of the reduction in the CDI rate, of 6.42% p.a. in 2019 and 5.96% p.a. in 2018. The average balance applied in 2019 was R$ 2.199 billion, compared to R$ 2.972 billion in 2018. (vi) The increase in interest income is mainly due to the recognition of interest on installment agreements with customers, in 2018 (vii) Decrease of R$ 681.9 million in exchange rate changes on borrowings and financing mainly due to the lower appreciation of the U.S. dolar and the Yen against the Real in 2019 (4.0% and 5.3%, respectively), compared to appreciation presented in 2018 (17.1% and 20.0, respectively). |
30. Other operating income (e_2
30. Other operating income (expenses), net (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Other Operating Income Expenses Net | |
Other operating income (expenses), net | 2019 2018 2017 Other operating income, net 75,667 93,089 75,410 Other operating expenses (94,415) (64,498) (81,089) Other operating income (expenses), net (18,748) 28,591 (5,679) |
31. Commitments (Tables)
31. Commitments (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Commitments | |
Commitments | 1 year 1-3 years 3-5 years More than 5 years Total Contractual obligations – Expenses 944,045 2,787,402 1,188,276 3,006,756 7,926,479 Contractual obligations – Investments 2,247,765 2,015,873 745,603 36,611 5,045,852 Total 3,191,810 4,803,275 1,933,879 3,043,367 12,972,331 |
32. Supplemental cash flow in_2
32. Supplemental cash flow information (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Supplemental Cash Flow Information | |
Supplemental cash flow information | 2019 2018 2017 Total additions of contract assets (Note 13) 3,532,283 3,188,943 - Total additions to intangible assets (Note 14 (b)) 1,788,907 1,144,728 3,490,298 Items not affecting cash (see breakdown below) (2,125,943) (2,201,112) (1,532,518) Total additions to intangible assets as per statement of cash flows 3,195,247 2,132,559 1,957,780 Investment and financing operations affecting intangible assets but not cash: Interest capitalized in the year (Note 14 (d)) 233,251 488,502 649,048 Contractors payable 252,675 297,872 213,340 Program contract commitments 35,817 149,974 95,126 Public Private Partnership - São Lourenço PPP (Note 14 (g)) 10,591 273,737 501,591 Leases - - 3,078 Performance agreements 78,296 - - Right of use 113,233 - - Construction margin (Note 25) 65,172 63,013 70,335 Agreement with the Municipality of Santo André (Note 9 (a)) 1,336,908 Agreement with the municipality of Guarulhos (Note 9 (a)) - 928,014 - Total 2,125,943 2,201,112 1,532,518 |
1. Operations (Details)
1. Operations (Details) - BRL (R$) R$ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | ||
SummaryOfOperationsLineItems [Line Items] | |||
Municipalities | 372 | 369 | |
Signed Contracts | |||
SummaryOfOperationsLineItems [Line Items] | |||
Municipalities | 325 | [1] | 307 |
Intangible and contract assets | R$ 35990087 | R$ 29187524 | |
Percentage of intangible and contract assets | 90.10% | 80.14% | |
Gross revenue (except construction revenue) | R$ 13700777 | R$ 11297242 | |
Percentage of gross revenue (except construction revenue) | 84.92% | 79.26% | |
Contracts Under Negotiation | |||
SummaryOfOperationsLineItems [Line Items] | |||
Municipalities | 21 | 35 | |
Intangible and contract assets | R$ 1637878 | R$ 4485203 | |
Percentage of intangible and contract assets | 4.10% | 12.32% | |
Gross revenue (except construction revenue) | R$ 451603 | R$ 858277 | |
Percentage of gross revenue (except construction revenue) | 2.80% | 6.02% | |
Concession Agreements Due by 2030 | |||
SummaryOfOperationsLineItems [Line Items] | |||
Municipalities | 27 | 31 | |
Intangible and contract assets | R$ 1181172 | R$ 1917142 | |
Percentage of intangible and contract assets | 2.96% | 5.26% | |
Gross revenue (except construction revenue) | R$ 588628 | R$ 980679 | |
Percentage of gross revenue (except construction revenue) | 3.65% | 6.88% | |
São Paulo | |||
SummaryOfOperationsLineItems [Line Items] | |||
Percentage of intangible and contract assets | 43.37% | 46.97% | |
Percentage of gross revenue (except construction revenue) | 44.48% | 47.05% | |
[1] | Includes the municipality of Tapiratiba, which signed a contract in October 2019, to begin operating in April 2020. |
1. Operations (Details Narrativ
1. Operations (Details Narrative) - BRL (R$) R$ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
SummaryOfOperationsLineItems [Line Items] | |||
Total municipalities | 372 | 369 | |
Municipalities with signed contracts | 324 | ||
Ilhabela, Juquitiba e Ubatuba | |||
SummaryOfOperationsLineItems [Line Items] | |||
Gross revenue (except construction revenue) | R$ 89165 | R$ 81385 | R$ 81911 |
Intangible and contract assets | R$ 351441 | R$ 289922 |
4. Changes in accounting prac_3
4. Changes in accounting practices and disclosures (Details) | 12 Months Ended |
Dec. 31, 2019 | |
Standard One | |
SummaryOfChangesInAccountingPracticesAndDisclosuresLineItems [Line Items] | |
New standards and revisions | IFRS 16 - Leases. Description: Establishes a single model for the accounting of leases in the balance sheet for lessees. A lessee recognizes a right of use asset that represents his right to use the leased asset and a lease liability that represents his obligation to make lease payments. The lessor's accounting remains similar to the current standard, that is, the lessors continue to classify the leases as financial or operating. IFRS 16 superseded the leases guidance including IAS 17 Leases and IFRIC 4, SIC 15 and SIC 27 Determining Whether an Arrangement Contains a Lease. |
Standard Two | |
SummaryOfChangesInAccountingPracticesAndDisclosuresLineItems [Line Items] | |
New standards and revisions | IFRIC 23 - Uncertainty over Income Tax Treatments. Description: Clarify accounting when there are uncertainties about the treatment of taxes on profit. Impact: The application of this interpretation did not impact the disclosures or amounts recognized in the annual financial statements. |
Standard Three | |
SummaryOfChangesInAccountingPracticesAndDisclosuresLineItems [Line Items] | |
New standards and revisions | Amendments to IFRS 9 - Prepayment Features with Negative Compensation. Description: Clarify that, to determine whether a prepayment feature meets the condition of “solely payments of principal and interest”, the party exercising the option may pay or receive compensation for the prepayment regardless of the reason for the prepayment, that is, the prepayment features with negative compensation do not automatically break the condition of “solely payments of principal and interest”. Impact: The application of this amendment did not impact the disclosures or amounts recognized in the annual financial statements. |
Standard Four | |
SummaryOfChangesInAccountingPracticesAndDisclosuresLineItems [Line Items] | |
New standards and revisions | Amendments to IAS 28 - Long-term interests in Associates and Joint Ventures. Description: Clarify that IFRS 9, including its requirements for impairment, is applicable to other financial instruments in an associate or joint venture to which the equity method is not applicable. Include long-term investments that, in substance, are part of the entity's net investment in an associate or joint venture. Impact: The application of this amendment did not impact the disclosures or amounts recognized in the annual financial statements. |
Standard Five | |
SummaryOfChangesInAccountingPracticesAndDisclosuresLineItems [Line Items] | |
New standards and revisions | Annual Improvements to IFRSs: 2015-2017 Cycle (Amendments to IFRS 3, IFRS 11, IAS 12 and IAS 23). Description: IFRS 3 - Business Combinations - clarify that when the control of a business that is a joint operation is obtained, the requirements for business combination are applied in stages, including the remeasurement of the interest previously held in the joint operation at fair value. IFRS 11 - Joint Arrangements - clarify that when a party that participates in a joint operation that corresponds to a business, but does not have joint control of that operation, obtains joint control of that joint operation, its interest previously held in the joint operation is not remeasured. IAS 32 - Income Taxes - clarify that the Company must recognize the consequences of income tax on dividends in profit or loss, in other comprehensive income or in equity, depending on where the transactions that generated the profit to be distributed were originally recognized. IAS 23 - Borrowing Costs – clarify that if there is any specific borrowing outstanding after the corresponding asset is ready for its intended use or sale, that borrowing becomes part of the funds that the Company usually borrows to calculate the capitalization rate on borrowings in general. Impact: The application of this amendment did not impact the disclosures or amounts recognized in the annual financial statements. |
Standard Six | |
SummaryOfChangesInAccountingPracticesAndDisclosuresLineItems [Line Items] | |
New standards and revisions | Amendments to IAS 19 - Plan Amendment, Curtailment or Settlement. Description: The amendments clarify that the cost of past services (or settlement gain or loss) is calculated by measuring the defined benefit liability (asset) based on updated assumptions and comparing the benefits offered and the plan’s assets before and after the change of the plan (or its curtailment or settlement) but ignoring the effect of the asset ceiling (which may arise when the defined benefit plan is in surplus). IAS 19 clarifies that the change in the effect of the asset ceiling resulting from the change in the plan (or its curtailment or settlement) is determined in a second step and is normally recognized in other comprehensive income. Impact: The application of this amendment did not impact the disclosures or amounts recognized in the annual financial statements. |
4. Changes in accounting prac_4
4. Changes in accounting practices and disclosures (Details 1) R$ in Thousands | 12 Months Ended |
Dec. 31, 2019BRL (R$) | |
DisclosureOfChangesInAccountingPracticesAndDisclosuresLineItems [Line Items] | |
Future payments of fixed leases | R$ 76304 |
Impact of the discount rate | (11,349) |
Right of use of leased assets | 646,343 |
Lease liabilities | 633,621 |
Vehicles | |
DisclosureOfChangesInAccountingPracticesAndDisclosuresLineItems [Line Items] | |
Future payments of fixed leases | 63,795 |
Impact of the discount rate | (9,313) |
Right of use of leased assets | 54,482 |
Lease liabilities | 54,482 |
Properties | |
DisclosureOfChangesInAccountingPracticesAndDisclosuresLineItems [Line Items] | |
Future payments of fixed leases | 7,525 |
Impact of the discount rate | (1,333) |
Right of use of leased assets | 6,192 |
Lease liabilities | 6,192 |
Equipment | |
DisclosureOfChangesInAccountingPracticesAndDisclosuresLineItems [Line Items] | |
Future payments of fixed leases | 741 |
Impact of the discount rate | (100) |
Right of use of leased assets | 641 |
Lease liabilities | 641 |
Other | |
DisclosureOfChangesInAccountingPracticesAndDisclosuresLineItems [Line Items] | |
Future payments of fixed leases | 4,243 |
Impact of the discount rate | (603) |
Right of use of leased assets | 3,640 |
Lease liabilities | 3,640 |
Leases | |
DisclosureOfChangesInAccountingPracticesAndDisclosuresLineItems [Line Items] | |
Future payments of fixed leases | 0 |
Impact of the discount rate | 0 |
Right of use of leased assets | 581,388 |
Lease liabilities | R$ 568666 |
4. Changes in accounting prac_5
4. Changes in accounting practices and disclosures (Details 2) | 12 Months Ended | |
Dec. 31, 2019 | ||
Standard One | ||
SummaryOfChangesInAccountingPracticesAndDisclosuresLineItems [Line Items] | ||
New standards, amendments and interpretations to existing standards that are not yet effective | IFRS 17 - Insurance Contracts. Description: Establishes the principles for the recognition, measurement, presentation and disclosure of insurance contracts. IFRS 17 will supersede IFRS 4 Insurance Contracts. Impact: The Company does not expect effects from adopting this standard. | [1] |
Standard Two | ||
SummaryOfChangesInAccountingPracticesAndDisclosuresLineItems [Line Items] | ||
New standards, amendments and interpretations to existing standards that are not yet effective | Amendments to IFRS 10 and IAS 28 - Sale or Contribution of Assets between an Investor and its Associate or Joint Venture. Description: Clarify situations involving the sale or contribution of assets between an investor and its associates or joint venture. Impact: The Company is assessing the impacts and effects of the amendments, however, it does not expect material effects from adopting this standard. | [2] |
Standard Three | ||
SummaryOfChangesInAccountingPracticesAndDisclosuresLineItems [Line Items] | ||
New standards, amendments and interpretations to existing standards that are not yet effective | Amendments to IFRS 3 - Definition of a Business. Description: Clarify that even though businesses normally present outputs (“products”), products are not necessary for an integrated set of activities and assets to qualify as businesses. To be considered as a business, an acquired set of activities and assets must include at least one input and a substantive process that together contribute significantly to the ability to create products. Impact: The Company does not expect effects from adopting this amendment. | [3] |
Standard Four | ||
SummaryOfChangesInAccountingPracticesAndDisclosuresLineItems [Line Items] | ||
New standards, amendments and interpretations to existing standards that are not yet effective | Amendments to IAS 1 and IAS 8 - Definition of Material. Description: The purpose of the amendments is to facilitate the understanding of the definition of material in IAS 1 and not to change the underlying concept of materiality in the IFRS Standards. The concept of “hidden” material information by immaterial information was included as part of the new definition. Impact: The Company is assessing the impacts and effects of the amendments, however it does not expect material effects from adopting this standard. | [3] |
[1] | Effective for annual periods beginning on or after January 1, 2021. | |
[2] | The effective date for these amendments was deferred indefinitely. | |
[3] | Effective for annual periods beginning on or after January 1, 2020. |
5. Risk management (Details)
5. Risk management (Details) ¥ in Thousands, R$ in Thousands, $ in Thousands | Dec. 31, 2019BRL (R$) | Dec. 31, 2019USD ($) | Dec. 31, 2019JPY (¥) | Dec. 31, 2018BRL (R$) | Dec. 31, 2018USD ($) | Dec. 31, 2018JPY (¥) |
SummaryOfRiskManagementLineItems [Line Items] | ||||||
Borrowings and financing - US$ | $ | $ 4,239,817 | $ 4,615,476 | ||||
Borrowings and financing - Yen | ¥ | ¥ 2,097,225 | ¥ 2,026,726 | ||||
Interest and charges from borrowings and financing - US$ | $ | 32,242 | 40,193 | ||||
Interest and charges from borrowings and financing - Yen | ¥ | 12,725 | 12,517 | ||||
Total exposure | R$ | R$ 6382009 | R$ 6694912 | ||||
Borrowing cost - US$ | $ | (20,173) | (22,390) | ||||
Borrowing cost - Yen | ¥ | (3,038) | (3,113) | ||||
Total foreign currency-denominated borrowings | R$ | R$ 6358798 | R$ 6669409 | ||||
Foreign currency | ||||||
SummaryOfRiskManagementLineItems [Line Items] | ||||||
Borrowings and financing - US$ | $ | $ 1,051,881 | $ 1,191,152 | ||||
Borrowings and financing - Yen | ¥ | ¥ 56,452,885 | ¥ 57,463,173 |
5. Risk management (Details 1)
5. Risk management (Details 1) | Dec. 31, 2019R$ / $R$ / ¥ | Dec. 31, 2018R$ / $R$ / ¥ |
US$ | ||
SummaryOfRiskManagementLineItems [Line Items] | ||
Exchange rate | R$ / $ | 4.0307 | 3.8748 |
Exchange rate variation | 4.00% | |
Yen | ||
SummaryOfRiskManagementLineItems [Line Items] | ||
Exchange rate | R$ / ¥ | 0.03715 | 0.03527 |
Exchange rate variation | 5.30% |
5. Risk management (Details 2)
5. Risk management (Details 2) - BRL (R$) R$ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | |
SummaryOfRiskManagementLineItems [Line Items] | |||
Borrowings | R$ 9224174 | R$ 9218759 | |
CDI | |||
SummaryOfRiskManagementLineItems [Line Items] | |||
Borrowings | [1] | 1,866,755 | 1,250,000 |
TR | |||
SummaryOfRiskManagementLineItems [Line Items] | |||
Borrowings | [2] | 1,675,203 | 1,637,290 |
IPCA | |||
SummaryOfRiskManagementLineItems [Line Items] | |||
Borrowings | [3] | 1,366,134 | 1,614,595 |
TJLP | |||
SummaryOfRiskManagementLineItems [Line Items] | |||
Borrowings | [4] | 1,381,342 | 1,322,854 |
LIBOR | |||
SummaryOfRiskManagementLineItems [Line Items] | |||
Borrowings | [5] | 2,829,073 | 3,259,295 |
Interest and charges | |||
SummaryOfRiskManagementLineItems [Line Items] | |||
Borrowings | R$ 105667 | R$ 134725 | |
[1] | CDI - (Certificado de Deposito Interbancario), an interbank deposit certificate. | ||
[2] | TR - Interest Benchmark Rate. | ||
[3] | IPCA - (Indice Nacional de Precos ao Consumidor Amplo), a consumer price index. | ||
[4] | TJLP - (Taxa de Juros a Longo Prazo), a long-term interest rate index. | ||
[5] | LIBOR - London Interbank Offered Rate. |
5. Risk management (Details 3)
5. Risk management (Details 3) - BRL (R$) R$ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
SummaryOfRiskManagementLineItems [Line Items] | |||||
Cash and cash equivalents | R$ 2253210 | R$ 3029191 | R$ 2283047 | R$ 1886221 | |
AA+(bra) | |||||
SummaryOfRiskManagementLineItems [Line Items] | |||||
Cash and cash equivalents | 2,193,725 | 2,966,080 | |||
AAA(bra) | |||||
SummaryOfRiskManagementLineItems [Line Items] | |||||
Cash and cash equivalents | 41,992 | 45,430 | |||
Other | |||||
SummaryOfRiskManagementLineItems [Line Items] | |||||
Cash and cash equivalents | [1] | R$ 17493 | R$ 17681 | ||
[1] | This category includes current accounts and investment funds in banks whose balances were not significant, and after assessing the impact of IFRS 9, concluded that expected losses are not material. |
5. Risk management (Details 4)
5. Risk management (Details 4) | 12 Months Ended |
Dec. 31, 2019 | |
Banco do Brasil S/A | Standard Poor's | |
SummaryOfRiskManagementLineItems [Line Items] | |
Credit rating information of the banks | |
Banco do Brasil S/A | Moody's | |
SummaryOfRiskManagementLineItems [Line Items] | |
Credit rating information of the banks | Aa1.br |
Banco do Brasil S/A | Fitch | |
SummaryOfRiskManagementLineItems [Line Items] | |
Credit rating information of the banks | AA(bra) |
Banco Santander Brasil S/A | Standard Poor's | |
SummaryOfRiskManagementLineItems [Line Items] | |
Credit rating information of the banks | brAAA |
Banco Santander Brasil S/A | Moody's | |
SummaryOfRiskManagementLineItems [Line Items] | |
Credit rating information of the banks | Aaa.br |
Banco Santander Brasil S/A | Fitch | |
SummaryOfRiskManagementLineItems [Line Items] | |
Credit rating information of the banks | |
Brazilian Federal Savings Bank | Standard Poor's | |
SummaryOfRiskManagementLineItems [Line Items] | |
Credit rating information of the banks | brAAA |
Brazilian Federal Savings Bank | Moody's | |
SummaryOfRiskManagementLineItems [Line Items] | |
Credit rating information of the banks | Aa1.br |
Brazilian Federal Savings Bank | Fitch | |
SummaryOfRiskManagementLineItems [Line Items] | |
Credit rating information of the banks | AA(bra) |
Banco Bradesco S/A | Standard Poor's | |
SummaryOfRiskManagementLineItems [Line Items] | |
Credit rating information of the banks | brAAA |
Banco Bradesco S/A | Moody's | |
SummaryOfRiskManagementLineItems [Line Items] | |
Credit rating information of the banks | Aa1.br |
Banco Bradesco S/A | Fitch | |
SummaryOfRiskManagementLineItems [Line Items] | |
Credit rating information of the banks | AAA(bra) |
Itaú Unibanco Holding S/A | Standard Poor's | |
SummaryOfRiskManagementLineItems [Line Items] | |
Credit rating information of the banks | brAAA |
Itaú Unibanco Holding S/A | Moody's | |
SummaryOfRiskManagementLineItems [Line Items] | |
Credit rating information of the banks | Aa1.br |
Itaú Unibanco Holding S/A | Fitch | |
SummaryOfRiskManagementLineItems [Line Items] | |
Credit rating information of the banks | AAA(bra) |
5. Risk management (Details 5)
5. Risk management (Details 5) - BRL (R$) R$ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
SummaryOfRiskManagementLineItems [Line Items] | ||
Borrowings and financing | R$ 16082522 | |
Accounts payables to suppliers and contractors | 369,631 | |
Services payable | 474,078 | R$ 454022 |
Public-Private Partnership - PPP | 6,487,773 | |
Program contract commitments | 402,064 | |
2020 | ||
SummaryOfRiskManagementLineItems [Line Items] | ||
Borrowings and financing | 3,303,736 | |
Accounts payables to suppliers and contractors | 369,631 | |
Services payable | 474,078 | |
Public-Private Partnership - PPP | 383,421 | |
Program contract commitments | 267,580 | |
2021 | ||
SummaryOfRiskManagementLineItems [Line Items] | ||
Borrowings and financing | 1,574,711 | |
Accounts payables to suppliers and contractors | 0 | |
Services payable | 0 | |
Public-Private Partnership - PPP | 383,421 | |
Program contract commitments | 46,733 | |
2022 | ||
SummaryOfRiskManagementLineItems [Line Items] | ||
Borrowings and financing | 1,595,436 | |
Accounts payables to suppliers and contractors | 0 | |
Services payable | 0 | |
Public-Private Partnership - PPP | 383,421 | |
Program contract commitments | 31,983 | |
2023 | ||
SummaryOfRiskManagementLineItems [Line Items] | ||
Borrowings and financing | 1,317,996 | |
Accounts payables to suppliers and contractors | 0 | |
Services payable | 0 | |
Public-Private Partnership - PPP | 383,421 | |
Program contract commitments | 31,983 | |
2024 | ||
SummaryOfRiskManagementLineItems [Line Items] | ||
Borrowings and financing | 1,574,770 | |
Accounts payables to suppliers and contractors | 0 | |
Services payable | 0 | |
Public-Private Partnership - PPP | 338,765 | |
Program contract commitments | 1,014 | |
2025 onwards | ||
SummaryOfRiskManagementLineItems [Line Items] | ||
Borrowings and financing | 6,715,873 | |
Accounts payables to suppliers and contractors | 0 | |
Services payable | 0 | |
Public-Private Partnership - PPP | 4,615,324 | |
Program contract commitments | R$ 13771 |
5. Risk management (Details 6)
5. Risk management (Details 6) - BRL (R$) R$ in Thousands | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Risk Management | ||||
Borrowings and financing | R$ 13244709 | R$ 13152796 | R$ 12100966 | R$ 11964143 |
(-) Cash and cash equivalents | (2,253,210) | (3,029,191) | (2,283,047) | (1,886,221) |
Net debt | 10,991,499 | 10,123,605 | ||
Total equity | 21,635,783 | 19,551,688 | R$ 17513009 | R$ 15419211 |
Total capital (shareholders + providers of capital) | R$ 32627282 | R$ 29675293 | ||
Leverage ratio | 34.00% | 34.00% |
5. Risk management (Details 7)
5. Risk management (Details 7) - BRL (R$) R$ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
SummaryOfRiskManagementLineItems [Line Items] | ||||
Cash and cash equivalents | R$ 2253210 | R$ 3029191 | R$ 2283047 | R$ 1886221 |
Restricted cash | 26,018 | 31,900 | ||
Trade receivables | 2,353,027 | 2,052,416 | ||
Water National Agency - ANA | 32,466 | 49,136 | ||
Borrowings and financing | 13,244,709 | 13,152,796 | R$ 12100966 | R$ 11964143 |
Services payable | 474,078 | 454,022 | ||
Public-Private Partnership - PPP | 6,487,773 | |||
Carrying amount | ||||
SummaryOfRiskManagementLineItems [Line Items] | ||||
Cash and cash equivalents | 2,253,210 | 3,029,191 | ||
Restricted cash | 26,018 | 31,900 | ||
Trade receivables | 2,353,027 | 2,052,416 | ||
Water National Agency - ANA | 32,466 | 49,136 | ||
Other receivables | 194,178 | 180,681 | ||
Borrowings and financing | 13,244,709 | 13,152,796 | ||
Accounts payables to suppliers and contractors | 369,631 | 465,993 | ||
Services payable | 474,078 | 454,022 | ||
Program contract commitments | 377,253 | 373,009 | ||
Public-Private Partnership - PPP | 3,293,980 | 3,413,124 | ||
Fair value | ||||
SummaryOfRiskManagementLineItems [Line Items] | ||||
Cash and cash equivalents | 2,253,210 | 3,029,191 | ||
Restricted cash | 26,018 | 31,900 | ||
Trade receivables | 2,353,027 | 2,052,416 | ||
Water National Agency - ANA | 32,466 | 49,136 | ||
Other receivables | 194,178 | 180,681 | ||
Borrowings and financing | 13,937,611 | 13,116,684 | ||
Accounts payables to suppliers and contractors | 369,631 | 465,993 | ||
Services payable | 474,078 | 454,022 | ||
Program contract commitments | 377,253 | 373,009 | ||
Public-Private Partnership - PPP | R$ 3293980 | R$ 3413124 |
5. Risk management (Details Nar
5. Risk management (Details Narrative) - BRL (R$) R$ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Risk Management | ||
Total exposure | R$ 6382009 | R$ 6694912 |
Effects on results before taxes | 638,201 | 669,491 |
Effects on profit for the year before taxes | R$ 92242 | R$ 92188 |
Leverage ratio | 34.00% | 34.00% |
Financial instrument assets receivables from related parties | R$ 850896 | R$ 843250 |
Reimbursement of additional retirement and pension plan | R$ 747579 | R$ 737503 |
7. Cash and cash equivalents (D
7. Cash and cash equivalents (Details) - BRL (R$) R$ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Cash and cash equivalents [abstract] | ||||
Cash and banks | R$ 176497 | R$ 151558 | ||
Cash equivalents | 2,076,713 | 2,877,633 | ||
Cash and cash equivalents | R$ 2253210 | R$ 3029191 | R$ 2283047 | R$ 1886221 |
7. Cash and cash equivalents _2
7. Cash and cash equivalents (Details Narrative) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Cash and cash equivalents [abstract] | ||
Average yield of financial investments | 98.02% | 98.28% |
8. Restricted cash (Details)
8. Restricted cash (Details) - BRL (R$) R$ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
SummaryOfRestrictedCashLineItems [Line Items] | ||
Restricted cash | R$ 26018 | R$ 31900 |
Agreement with the São Paulo municipal government | ||
SummaryOfRestrictedCashLineItems [Line Items] | ||
Restricted cash | 17,068 | 19,977 |
Brazilian Federal Savings Bank - escrow deposit | ||
SummaryOfRestrictedCashLineItems [Line Items] | ||
Restricted cash | 2,245 | 5,880 |
Other | ||
SummaryOfRestrictedCashLineItems [Line Items] | ||
Restricted cash | R$ 6705 | R$ 6043 |
9. Trade receivables (Details)
9. Trade receivables (Details) - BRL (R$) R$ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
SummaryOfTradeReceivablesLineItems [Line Items] | ||||
Trade receivables, gross | R$ 3395042 | R$ 3151858 | ||
Allowance for doubtful accounts | (1,042,015) | (1,099,442) | R$ 1067973 | R$ 1068747 |
Total trade receivables | 2,353,027 | 2,052,416 | ||
Current | 2,137,752 | 1,843,333 | ||
Noncurrent | 215,275 | 209,083 | ||
Total | 2,353,027 | 2,052,416 | ||
Unbilled supply | ||||
SummaryOfTradeReceivablesLineItems [Line Items] | ||||
Trade receivables, gross | 745,884 | 571,072 | ||
Private sector | ||||
SummaryOfTradeReceivablesLineItems [Line Items] | ||||
Trade receivables, gross | 1,883,491 | 1,720,346 | ||
Private sector | General and special customers | ||||
SummaryOfTradeReceivablesLineItems [Line Items] | ||||
Trade receivables, gross | 1,505,150 | 1,372,667 | ||
Private sector | Agreements | ||||
SummaryOfTradeReceivablesLineItems [Line Items] | ||||
Trade receivables, gross | 378,341 | 347,679 | ||
Government entities | ||||
SummaryOfTradeReceivablesLineItems [Line Items] | ||||
Trade receivables, gross | 752,518 | 854,515 | ||
Government entities | Agreements | ||||
SummaryOfTradeReceivablesLineItems [Line Items] | ||||
Trade receivables, gross | 277,047 | 274,906 | ||
Government entities | Municipal | ||||
SummaryOfTradeReceivablesLineItems [Line Items] | ||||
Trade receivables, gross | 472,666 | 575,733 | ||
Government entities | Federal | ||||
SummaryOfTradeReceivablesLineItems [Line Items] | ||||
Trade receivables, gross | 2,805 | 3,876 | ||
Wholesale customers - Municipal governments | ||||
SummaryOfTradeReceivablesLineItems [Line Items] | ||||
Trade receivables, gross | 13,149 | 5,925 | ||
Total trade receivables | 677,298 | 1,766,309 | ||
Total | 677,298 | 1,766,309 | ||
Wholesale customers - Municipal governments | Mogi das Cruzes | ||||
SummaryOfTradeReceivablesLineItems [Line Items] | ||||
Trade receivables, gross | 3,278 | 3,056 | ||
Wholesale customers - Municipal governments | São Caetano do Sul | ||||
SummaryOfTradeReceivablesLineItems [Line Items] | ||||
Trade receivables, gross | R$ 9871 | R$ 2869 |
9. Trade receivables (Details 1
9. Trade receivables (Details 1) - BRL (R$) R$ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
SummaryOfTradeReceivablesLineItems [Line Items] | ||
Trade receivables | R$ 2353027 | R$ 2052416 |
Wholesale customers - Municipal governments | ||
SummaryOfTradeReceivablesLineItems [Line Items] | ||
Trade receivables | 677,298 | 1,766,309 |
Wholesale customers - Municipal governments | Mauá | ||
SummaryOfTradeReceivablesLineItems [Line Items] | ||
Trade receivables | 677,298 | 601,910 |
Wholesale customers - Municipal governments | Santo André | ||
SummaryOfTradeReceivablesLineItems [Line Items] | ||
Trade receivables | R$ 0 | R$ 1164399 |
9. Trade receivables (Details 2
9. Trade receivables (Details 2) - BRL (R$) R$ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
SummaryOfTradeReceivablesLineItems [Line Items] | ||
Current | R$ 1762606 | R$ 1449927 |
Past-due | 1,632,436 | 1,701,931 |
Total | 3,395,042 | 3,151,858 |
Up to 30 days | ||
SummaryOfTradeReceivablesLineItems [Line Items] | ||
Past-due | 330,488 | 330,310 |
From 31 to 60 days | ||
SummaryOfTradeReceivablesLineItems [Line Items] | ||
Past-due | 164,913 | 145,153 |
From 61 to 90 days | ||
SummaryOfTradeReceivablesLineItems [Line Items] | ||
Past-due | 86,765 | 83,679 |
From 91 to 120 days | ||
SummaryOfTradeReceivablesLineItems [Line Items] | ||
Past-due | 58,971 | 54,486 |
From 121 to 180 days | ||
SummaryOfTradeReceivablesLineItems [Line Items] | ||
Past-due | 81,003 | 89,740 |
From 181 to 360 days | ||
SummaryOfTradeReceivablesLineItems [Line Items] | ||
Past-due | 33,206 | 44,856 |
Over 360 days | ||
SummaryOfTradeReceivablesLineItems [Line Items] | ||
Past-due | R$ 877090 | R$ 953707 |
9. Trade receivables (Details 3
9. Trade receivables (Details 3) - BRL (R$) R$ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Trade Receivables | |||
Balance at beginning of the year | R$ 1099442 | R$ 1067973 | R$ 1068747 |
Private sector /government entities | 54,064 | 61,315 | 75,973 |
Recoveries | (111,491) | (29,846) | (76,747) |
Net additions for the year | (57,427) | 31,469 | (774) |
Balance at end of the year | R$ 1042015 | R$ 1099442 | R$ 1067973 |
9. Trade receivables (Details 4
9. Trade receivables (Details 4) - BRL (R$) R$ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Trade Receivables | |||
Write-offs | R$ 179929 | R$ 184555 | R$ 171729 |
(Losses)/reversal with state entities - related parties | (5,597) | 1,294 | 21,510 |
(Losses) with private sector/government entities | (54,064) | (61,315) | (75,973) |
(Losses)/reversal with wholesale customers | 0 | (29,458) | 9,781 |
Recoveries | 11,491 | 107,307 | 133,730 |
Allowance for doubtful accounts | R$ 128099 | R$ 166727 | R$ 82681 |
9. Trade receivables (Details N
9. Trade receivables (Details Narrative) R$ in Thousands | 12 Months Ended |
Dec. 31, 2019BRL (R$) | |
Trade Receivables | |
Revenue recognized from service agreement | R$ 1336908 |
Payment to settle administrative costs and terminate the services provided by SEMASA | 70,000 |
Sanitation initiatives | 90,000 |
Service transfer intangible assets | 160,000 |
Non-recurring fair value for the transaction with Santo André | R$ 1336908 |
10. Related-party balances an_3
10. Related-party balances and transactions (Details) - BRL (R$) R$ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Disclosure of transactions between related parties [line items] | |||
Accounts receivable, current | R$ 192906 | R$ 174148 | |
Accounts receivable, noncurrent | 657,990 | 669,102 | |
Total receivables from shareholders | 850,896 | 843,250 | |
Interest on capital payable to related parties | 401,963 | 338,407 | |
Sanitation services | |||
Disclosure of transactions between related parties [line items] | |||
Accounts receivable, current | 131,851 | 122,522 | |
Total receivables from shareholders | 103,317 | 105,747 | |
Allowance for losses | |||
Disclosure of transactions between related parties [line items] | |||
Accounts receivable, current | (39,417) | (33,820) | R$ 35114 |
Reimbursement for benefits - monthly flow | |||
Disclosure of transactions between related parties [line items] | |||
Accounts receivable, current | 31,584 | 22,926 | |
Total receivables from shareholders | 747,579 | 737,503 | |
Reimbursement for benefits - GESP 2015 | |||
Disclosure of transactions between related parties [line items] | |||
Accounts receivable, current | 68,888 | 62,520 | |
Accounts receivable, noncurrent | 647,107 | 652,057 | |
Agreement for the installment payment of sanitation services | |||
Disclosure of transactions between related parties [line items] | |||
Accounts receivable, noncurrent | R$ 10883 | R$ 17045 |
10. Related-party balances an_4
10. Related-party balances and transactions (Details 1) - BRL (R$) R$ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure of transactions between related parties [line items] | |||
Revenues | R$ 17983654 | R$ 16085094 | R$ 14608233 |
Sanitation services | |||
Disclosure of transactions between related parties [line items] | |||
Revenues | 556,574 | 501,146 | 462,989 |
Payments received from related parties | |||
Disclosure of transactions between related parties [line items] | |||
Revenues | (546,365) | (509,672) | (471,081) |
Receipt of GESP reimbursement referring to Law 4819/58 | |||
Disclosure of transactions between related parties [line items] | |||
Receipt of GESP reimbursement | R$ 152112 | R$ 173516 | R$ 192889 |
10. Related-party balances an_5
10. Related-party balances and transactions (Details Narrative) - BRL (R$) R$ in Thousands | 12 Months Ended | ||||||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Apr. 05, 2017 | Mar. 18, 2015 | Mar. 17, 2015 | Nov. 17, 2008 | |
Disclosure of transactions between related parties [line items] | |||||||
Accounts receivable, current | R$ 192906 | R$ 174148 | |||||
Undisputed reimbursement | R$ 915251 | ||||||
Reimbursement receivable related to the reservoirs | R$ 696283 | ||||||
Government Agreement receivable | R$ 1012310 | ||||||
Government Agreement inflation adjustment | R$ 316027 | ||||||
Preferred shares issued for installments, value | R$ 87174 | ||||||
Government Agreement receivable, adjusted | R$ 609109 | ||||||
Receivables in current assets | 68,888 | 62,520 | |||||
Receivables in non-current assets | 647,107 | 652,057 | |||||
Disputed amounts receivable | 1,195,217 | 1,107,104 | |||||
Pension benefit obligations | 3,046,255 | 2,606,107 | |||||
Other liabilities, current | 16,653 | 16,055 | |||||
Other liabilities, non-current | 87,231 | 90,518 | |||||
Balance related to the first amendment with EMAE | 17,246 | ||||||
Expenses related to personnel assigned by SABESP to other state government entities | 4,881 | 8,903 | R$ 9853 | ||||
Expenses related to personnel by other entities to SABESP | 139 | 116 | 0 | ||||
Non-operating assets | 3,613 | 969 | |||||
Net actuarial liability | 314,677 | 363,902 | |||||
Compensation to Officers | 5,344 | 4,077 | 3,813 | ||||
Bonus program | 1,348 | 538 | 556 | ||||
Total loan agreement related party | R$ 34992 | 32,857 | |||||
Connect to the Network Program expenditure concentration | 20.00% | ||||||
Connect to the Network Program | R$ 117272 | 100,928 | |||||
Connect to the Network Program receivable from related parties | 0 | 0 | |||||
Connect to the Network Program intangible assets | 65,099 | 49,919 | |||||
Connect to the Network Program reimbursement | R$ 52174 | 51,009 | |||||
State Government | |||||||
Disclosure of transactions between related parties [line items] | |||||||
Connect to the Network Program expenditure concentration | 80.00% | ||||||
Allowance for losses | |||||||
Disclosure of transactions between related parties [line items] | |||||||
Accounts receivable, current | R$ 39417 | R$ 33820 | R$ 35114 |
11. Investments (Details)
11. Investments (Details) - BRL (R$) R$ in Thousands | 12 Months Ended | ||||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
SummaryOfInvestmentsLineItems [Line Items] | |||||
Equity | R$ 21635783 | R$ 19551688 | R$ 17513009 | R$ 15419211 | |
Dividends distributed | 800,352 | 673,765 | 598,612 | ||
Other comprehensive income | (363,076) | (10,994) | 287,547 | ||
Profit for the year | 3,367,517 | 2,835,068 | 2,519,310 | ||
Investments | 53,187 | 44,587 | 36,932 | ||
Other comprehensive income | (17) | 0 | 0 | ||
Sesamm | |||||
SummaryOfInvestmentsLineItems [Line Items] | |||||
Equity | 45,923 | 43,547 | 39,262 | ||
Capital increase | 0 | ||||
Dividends distributed | (2,042) | ||||
Other comprehensive income | 0 | ||||
Profit for the year | 6,485 | 5,621 | 2,707 | ||
Profit for the year - change in the equity | [1] | (2,067) | |||
Investments | 16,533 | 15,677 | |||
Capital increase | 0 | ||||
Dividends distributed - change in the equity | (735) | ||||
Other comprehensive income | 0 | ||||
Equity in the earnings of subsidiaries | R$ 2335 | 2,023 | R$ 975 | ||
Equity in the earnings of subsidiaries - change in the equity | [1] | R$ 744 | |||
Interest percentage | 36.00% | 36.00% | 36.00% | ||
Águas de Andradina | |||||
SummaryOfInvestmentsLineItems [Line Items] | |||||
Equity | R$ 30065 | R$ 24832 | R$ 19392 | ||
Capital increase | 0 | ||||
Dividends distributed | (2,038) | ||||
Other comprehensive income | 0 | ||||
Profit for the year | 7,070 | 2,407 | 4,471 | ||
Profit for the year - change in the equity | [1] | 201 | |||
Investments | 9,020 | 7,450 | |||
Capital increase | 0 | ||||
Dividends distributed - change in the equity | (611) | ||||
Other comprehensive income | 0 | ||||
Equity in the earnings of subsidiaries | R$ 2121 | 722 | R$ 729 | ||
Equity in the earnings of subsidiaries - change in the equity | [1] | R$ 60 | |||
Interest percentage | 30.00% | 30.00% | 30.00% | ||
Águas de Castilho | |||||
SummaryOfInvestmentsLineItems [Line Items] | |||||
Equity | R$ 7242 | R$ 6084 | R$ 4880 | ||
Capital increase | 0 | ||||
Dividends distributed | (609) | ||||
Other comprehensive income | 0 | ||||
Profit for the year | 1,648 | 1,001 | 933 | ||
Profit for the year - change in the equity | [1] | 119 | |||
Investments | 2,172 | 1,826 | |||
Capital increase | 0 | ||||
Dividends distributed - change in the equity | (183) | ||||
Other comprehensive income | 0 | ||||
Equity in the earnings of subsidiaries | R$ 493 | 300 | R$ 287 | ||
Equity in the earnings of subsidiaries - change in the equity | [1] | R$ 36 | |||
Interest percentage | 30.00% | 30.00% | 30.00% | ||
Saneaqua Mairinque | |||||
SummaryOfInvestmentsLineItems [Line Items] | |||||
Equity | R$ 4783 | R$ 5720 | R$ 4327 | ||
Capital increase | 0 | ||||
Dividends distributed | (11) | ||||
Other comprehensive income | (55) | ||||
Profit for the year | (867) | (790) | 390 | ||
Profit for the year - change in the equity | [1] | (4) | |||
Investments | 1,434 | 1,716 | |||
Capital increase | 0 | ||||
Dividends distributed - change in the equity | (3) | ||||
Other comprehensive income | (17) | ||||
Equity in the earnings of subsidiaries | R$ 260 | (237) | R$ 71 | ||
Equity in the earnings of subsidiaries - change in the equity | [1] | R$ 2 | |||
Interest percentage | 30.00% | 30.00% | 30.00% | ||
Attend Ambiental | |||||
SummaryOfInvestmentsLineItems [Line Items] | |||||
Equity | R$ 7486 | R$ 1426 | R$ 5169 | ||
Capital increase | 24,277 | ||||
Dividends distributed | 0 | ||||
Other comprehensive income | 0 | ||||
Profit for the year | (17,781) | (3,743) | 1,324 | ||
Profit for the year - change in the equity | [1] | (436) | |||
Investments | 3,369 | 642 | |||
Capital increase | 10,925 | ||||
Dividends distributed - change in the equity | 0 | ||||
Other comprehensive income | 0 | ||||
Equity in the earnings of subsidiaries | R$ 8002 | (1,684) | R$ 560 | ||
Equity in the earnings of subsidiaries - change in the equity | [1] | R$ 196 | |||
Interest percentage | 45.00% | 45.00% | 45.00% | ||
Aquapolo Ambiental | |||||
SummaryOfInvestmentsLineItems [Line Items] | |||||
Equity | R$ 37772 | R$ 30170 | R$ 18757 | ||
Capital increase | 0 | ||||
Dividends distributed | (8,681) | ||||
Other comprehensive income | 0 | ||||
Profit for the year | 16,283 | 11,413 | 6,470 | ||
Profit for the year - change in the equity | [1] | 0 | |||
Investments | 18,508 | 14,783 | |||
Capital increase | 0 | ||||
Dividends distributed - change in the equity | (4,254) | ||||
Other comprehensive income | 0 | ||||
Equity in the earnings of subsidiaries | R$ 7979 | 5,592 | R$ 3144 | ||
Equity in the earnings of subsidiaries - change in the equity | [1] | R$ 0 | |||
Interest percentage | 49.00% | 49.00% | 49.00% | ||
Paulista Geradora de Energia | |||||
SummaryOfInvestmentsLineItems [Line Items] | |||||
Equity | R$ 7144 | R$ 7625 | R$ 8447 | ||
Capital increase | 0 | ||||
Dividends distributed | 0 | ||||
Other comprehensive income | 0 | ||||
Profit for the year | (481) | (822) | (22) | ||
Profit for the year - change in the equity | [1] | 0 | |||
Investments | 1,786 | 1,905 | |||
Capital increase | 0 | ||||
Dividends distributed - change in the equity | 0 | ||||
Other comprehensive income | 0 | ||||
Equity in the earnings of subsidiaries | R$ 119 | (206) | R$ 6 | ||
Equity in the earnings of subsidiaries - change in the equity | [1] | R$ 0 | |||
Interest percentage | 25.00% | 25.00% | 25.00% | ||
Total | |||||
SummaryOfInvestmentsLineItems [Line Items] | |||||
Investments | R$ 52822 | R$ 43999 | |||
Capital increase | 10,925 | ||||
Dividends distributed - change in the equity | (5,786) | ||||
Other comprehensive income | (17) | ||||
Equity in the earnings of subsidiaries | 4,547 | 6,510 | R$ 5760 | ||
Equity in the earnings of subsidiaries - change in the equity | [1] | (846) | |||
Other investments | |||||
SummaryOfInvestmentsLineItems [Line Items] | |||||
Investments | R$ 365 | R$ 588 | |||
[1] | Refer to changes in the equity of investees, as their financial statements for the year ended December 31, 2018 were issued, including some adjustments, after the Company's financial statements. |
11. Investments (Details Narrat
11. Investments (Details Narrative) - BRL (R$) R$ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
DisclosureOfInvestmentsLineItems [Line Items] | |||
Capital stock | R$ 15000000 | R$ 15000000 | |
Capital stock, shares | 683,509,869 | ||
Shares issued | 683,509,869 | 683,509,869 | 683,509,869 |
Sesamm | |||
DisclosureOfInvestmentsLineItems [Line Items] | |||
Capital stock | R$ 19532 | ||
Capital stock, shares | 19,532,409 | ||
Equity interest | 36.00% | 36.00% | 36.00% |
Águas de Andradina | |||
DisclosureOfInvestmentsLineItems [Line Items] | |||
Capital stock | R$ 17936 | ||
Capital stock, shares | 17,936,174 | ||
Equity interest | 30.00% | 30.00% | 30.00% |
Advance for future capital increase | R$ 12 | ||
Águas de Castilho | |||
DisclosureOfInvestmentsLineItems [Line Items] | |||
Capital stock | R$ 2785 | ||
Capital stock, shares | 2,785,225 | ||
Equity interest | 30.00% | 30.00% | 30.00% |
Saneaqua Mairinque | |||
DisclosureOfInvestmentsLineItems [Line Items] | |||
Capital stock | R$ 4183 | ||
Capital stock, shares | 3,141,239 | ||
Equity interest | 30.00% | 30.00% | 30.00% |
Attend Ambiental | |||
DisclosureOfInvestmentsLineItems [Line Items] | |||
Capital stock | R$ 37677 | ||
Capital stock, shares | 37,677,245 | ||
Equity interest | 45.00% | 45.00% | 45.00% |
Capital increase | R$ 24277 | ||
Shares issued | 24,277,245 | ||
Aquapolo Ambiental | |||
DisclosureOfInvestmentsLineItems [Line Items] | |||
Capital stock | R$ 36412 | ||
Capital stock, shares | 42,419,045 | ||
Equity interest | 49.00% | 49.00% | 49.00% |
Paulista Geradora de Energia | |||
DisclosureOfInvestmentsLineItems [Line Items] | |||
Capital stock | R$ 8679 | ||
Capital stock, shares | 8,679,040 | ||
Equity interest | 25.00% | 25.00% | 25.00% |
12. Investment properties (Deta
12. Investment properties (Details) - BRL (R$) R$ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Investment property [abstract] | |||
Investment properties, beginning | R$ 47620 | R$ 57652 | R$ 57968 |
Write-offs and disposals | (9,995) | (244) | |
Transfers | (9) | 13 | |
Depreciation | (49) | (50) | (72) |
Investment properties, ending | R$ 47562 | R$ 47620 | R$ 57652 |
12. Investment properties (De_2
12. Investment properties (Details Narrative) - BRL (R$) R$ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Investment property [abstract] | ||
Investment properties, market value | R$ 386000 | R$ 386000 |
13. Contract assets (Details)
13. Contract assets (Details) - BRL (R$) R$ in Thousands | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | ||
Contract assets [abstract] | ||||
Contract assets, beginning | R$ 7407948 | R$ 10387715 | ||
Additions | 3,532,283 | 3,188,943 | R$ 0 | |
Write-offs | (4,910) | |||
Transfers | 10,710 | |||
Transfers of works to intangible assets | (3,328,317) | (6,168,710) | ||
Contract assets, ending | R$ 7617714 | [1] | R$ 7407948 | R$ 10387715 |
[1] | As of December 31, 2019, contract assets includes leases recognized before December 31, 2018 in accordance with IAS 17 amounting to R$ 276,893 (R$ 265,671 as of December 31, 2018). |
13. Contract assets (Details Na
13. Contract assets (Details Narrative) - BRL (R$) R$ in Thousands | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | ||
Disclosure of assets recognised from costs to obtain or fulfil contracts with customers [line items] | ||||
Contract assets | R$ 7617714 | [1] | R$ 7407948 | R$ 10387715 |
Transfers of works to intangible assets | (3,328,317) | (6,168,710) | ||
Additions | 3,532,283 | R$ 3188943 | R$ 0 | |
São Paulo | ||||
Disclosure of assets recognised from costs to obtain or fulfil contracts with customers [line items] | ||||
Contract assets | 3,593,000 | |||
Additions | 1,790,000 | |||
Praia Grande | ||||
Disclosure of assets recognised from costs to obtain or fulfil contracts with customers [line items] | ||||
Contract assets | 338,000 | |||
Additions | 212,000 | |||
São Bernardo do Campo | ||||
Disclosure of assets recognised from costs to obtain or fulfil contracts with customers [line items] | ||||
Contract assets | 330,000 | |||
Additions | R$ 151000 | |||
[1] | As of December 31, 2019, contract assets includes leases recognized before December 31, 2018 in accordance with IAS 17 amounting to R$ 276,893 (R$ 265,671 as of December 31, 2018). |
14. Intangible assets (Details)
14. Intangible assets (Details) - BRL (R$) R$ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
SummaryOfIntangibleAssetsLineItems [Line Items] | ||||||
Cost | R$ 44626255 | R$ 39668263 | ||||
Accumulated amortization | (12,300,808) | (10,655,803) | ||||
Net | 32,325,447 | [1] | 29,012,460 | R$ 33466132 | R$ 31246788 | |
Concession agreements - equity value | ||||||
SummaryOfIntangibleAssetsLineItems [Line Items] | ||||||
Cost | 2,066,459 | 5,465,206 | ||||
Accumulated amortization | (571,606) | (1,391,862) | ||||
Net | 1,494,853 | [1] | 4,073,344 | [1] | 7,141,614 | 7,482,955 |
Concession agreements - economic value | ||||||
SummaryOfIntangibleAssetsLineItems [Line Items] | ||||||
Cost | 1,334,531 | 1,948,255 | ||||
Accumulated amortization | (621,679) | (716,246) | ||||
Net | 712,852 | [1] | 1,232,009 | 1,433,937 | 1,381,652 | |
Program contracts | ||||||
SummaryOfIntangibleAssetsLineItems [Line Items] | ||||||
Cost | 19,413,768 | 12,710,937 | ||||
Accumulated amortization | (5,594,068) | (3,933,008) | ||||
Net | 13,819,700 | [1] | 8,777,929 | [1] | 7,595,066 | 6,576,021 |
Program contracts - commitments | ||||||
SummaryOfIntangibleAssetsLineItems [Line Items] | ||||||
Cost | 1,651,434 | 1,320,106 | ||||
Accumulated amortization | (286,559) | (240,555) | ||||
Net | 1,364,875 | [1] | 1,079,551 | 910,375 | 823,216 | |
Services contracts - São Paulo | ||||||
SummaryOfIntangibleAssetsLineItems [Line Items] | ||||||
Cost | 19,217,091 | 17,474,797 | ||||
Accumulated amortization | (4,826,328) | (4,083,345) | ||||
Net | 14,390,763 | [1] | 13,391,452 | 15,917,015 | 14,552,707 | |
Software license | ||||||
SummaryOfIntangibleAssetsLineItems [Line Items] | ||||||
Cost | 829,739 | 748,962 | ||||
Accumulated amortization | (358,033) | (290,787) | ||||
Net | 471,706 | [1] | 458,175 | R$ 468125 | R$ 430237 | |
Right of use | ||||||
SummaryOfIntangibleAssetsLineItems [Line Items] | ||||||
Cost | 113,233 | 0 | ||||
Accumulated amortization | R$ 42535 | R$ 0 | ||||
[1] | As of December 31, 2019, intangible assets includes leases recognized before December 31, 2018 in accordance with IAS 17 amounting to R$ 292,824 - (R$ 315,717 as of December 31, 2018 - R$ R$ 98,077 recognized as concession agreements - equity value and R$ 217,640 recognized as program contracts). |
14. Intangible assets (Details
14. Intangible assets (Details 1) - BRL (R$) R$ in Thousands | 12 Months Ended | |||||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | ||||
SummaryOfIntangibleAssetsLineItems [Line Items] | ||||||
Intangible assets, beginning | R$ 29012460 | R$ 33466132 | R$ 31246788 | |||
First-time adoption of IFRS 16 | 64,955 | |||||
Transfers to contract assets | [1] | (10,387,715) | ||||
Additions | 1,723,952 | 1,144,728 | 3,490,298 | |||
Contract renewal | 0 | 0 | 0 | |||
Reversal of estimated losses | 13,380 | |||||
Transfers of works | [2] | 6,168,710 | ||||
Transfer to indemnities receivable | (4,345) | |||||
Transfer of contract assets | 3,328,317 | |||||
Transfers | (13,531) | (1,471) | (9,374) | |||
Write-offs and disposals | (39,931) | (24,866) | (24,412) | |||
Amortization | (1,746,430) | (1,353,058) | (1,250,548) | |||
Intangible assets, ending | 32,325,447 | [3] | 29,012,460 | 33,466,132 | ||
Concession agreements - equity value | ||||||
SummaryOfIntangibleAssetsLineItems [Line Items] | ||||||
Intangible assets, beginning | 4,073,344 | [3] | 7,141,614 | 7,482,955 | ||
First-time adoption of IFRS 16 | [3] | 0 | ||||
Transfers to contract assets | [1] | (1,427,046) | ||||
Additions | 2 | [3] | 93 | 374,775 | ||
Contract renewal | (2,690,660) | [3] | (1,935,780) | (531,818) | ||
Reversal of estimated losses | 2,078 | |||||
Transfers of works | [2] | 499,002 | ||||
Transfer to indemnities receivable | [3] | (4,345) | ||||
Transfer of contract assets | [3] | 131,809 | ||||
Transfers | 76,804 | [3] | (5,268) | 1,663 | ||
Write-offs and disposals | (8,311) | [3] | (1,406) | (2,795) | ||
Amortization | (83,790) | [3] | (197,865) | (185,244) | ||
Intangible assets, ending | 1,494,853 | [3] | 4,073,344 | [3] | 7,141,614 | |
Concession agreements - economic value | ||||||
SummaryOfIntangibleAssetsLineItems [Line Items] | ||||||
Intangible assets, beginning | 1,232,009 | 1,433,937 | 1,381,652 | |||
First-time adoption of IFRS 16 | 0 | |||||
Transfers to contract assets | [1] | (233,361) | ||||
Additions | 2,034 | 373 | 142,429 | |||
Contract renewal | (532,173) | 0 | 0 | |||
Reversal of estimated losses | 8 | |||||
Transfers of works | [2] | 114,442 | ||||
Transfer to indemnities receivable | 0 | |||||
Transfer of contract assets | 89,041 | |||||
Transfers | 1,956 | 88 | 2,604 | |||
Write-offs and disposals | (569) | (1,031) | (1,163) | |||
Amortization | (79,446) | (82,439) | (91,593) | |||
Intangible assets, ending | 712,852 | [3] | 1,232,009 | 1,433,937 | ||
Program contracts | ||||||
SummaryOfIntangibleAssetsLineItems [Line Items] | ||||||
Intangible assets, beginning | 8,777,929 | [3] | 7,595,066 | 6,576,021 | ||
First-time adoption of IFRS 16 | [3] | 0 | ||||
Transfers to contract assets | [1] | (2,019,461) | ||||
Additions | 1,338,443 | [3] | 928,818 | 772,278 | ||
Contract renewal | 3,223,773 | [3] | 1,935,780 | 531,818 | ||
Reversal of estimated losses | 4,834 | |||||
Transfers of works | [2] | 681,742 | ||||
Transfer to indemnities receivable | [3] | 0 | ||||
Transfer of contract assets | [3] | 970,534 | ||||
Transfers | 137,283 | [3] | 3,011 | (1,784) | ||
Write-offs and disposals | (10,312) | [3] | (7,616) | (6,606) | ||
Amortization | (617,950) | [3] | (339,411) | (281,495) | ||
Intangible assets, ending | 13,819,700 | [3] | 8,777,929 | [3] | 7,595,066 | |
Program contracts - commitments | ||||||
SummaryOfIntangibleAssetsLineItems [Line Items] | ||||||
Intangible assets, beginning | 1,079,551 | 910,375 | 823,216 | |||
First-time adoption of IFRS 16 | 0 | |||||
Transfers to contract assets | [1] | 0 | ||||
Additions | 331,328 | 206,946 | 121,313 | |||
Contract renewal | 0 | 0 | 0 | |||
Reversal of estimated losses | 0 | |||||
Transfers of works | [2] | 0 | ||||
Transfer to indemnities receivable | 0 | |||||
Transfer of contract assets | 0 | |||||
Transfers | 0 | 0 | 0 | |||
Write-offs and disposals | 0 | 0 | 0 | |||
Amortization | (46,004) | (37,770) | (34,154) | |||
Intangible assets, ending | 1,364,875 | [3] | 1,079,551 | 910,375 | ||
Services contracts - São Paulo | ||||||
SummaryOfIntangibleAssetsLineItems [Line Items] | ||||||
Intangible assets, beginning | 13,391,452 | 15,917,015 | 14,552,707 | |||
First-time adoption of IFRS 16 | 0 | |||||
Transfers to contract assets | [1] | (6,707,847) | ||||
Additions | 3,867 | 3,724 | 1,976,079 | |||
Contract renewal | (940) | 0 | 0 | |||
Reversal of estimated losses | 6,460 | |||||
Transfers of works | [2] | 4,818,734 | ||||
Transfer to indemnities receivable | 0 | |||||
Transfer of contract assets | 2,054,940 | |||||
Transfers | (228,583) | 12 | (18,346) | |||
Write-offs and disposals | (20,739) | (14,813) | (13,848) | |||
Amortization | (809,234) | (625,373) | (586,037) | |||
Intangible assets, ending | 14,390,763 | [3] | 13,391,452 | 15,917,015 | ||
Software license | ||||||
SummaryOfIntangibleAssetsLineItems [Line Items] | ||||||
Intangible assets, beginning | 458,175 | 468,125 | 430,237 | |||
First-time adoption of IFRS 16 | 0 | |||||
Transfers to contract assets | [1] | 0 | ||||
Additions | 0 | 4,774 | 103,424 | |||
Contract renewal | 0 | 0 | 0 | |||
Reversal of estimated losses | 0 | |||||
Transfers of works | [2] | 54,790 | ||||
Transfer to indemnities receivable | 0 | |||||
Transfer of contract assets | 81,993 | |||||
Transfers | (991) | 686 | 6,489 | |||
Write-offs and disposals | 0 | 0 | 0 | |||
Amortization | (67,471) | (70,200) | (72,025) | |||
Intangible assets, ending | 471,706 | [3] | 458,175 | 468,125 | ||
Right of use - other assets | ||||||
SummaryOfIntangibleAssetsLineItems [Line Items] | ||||||
Intangible assets, beginning | 0 | 0 | 0 | |||
First-time adoption of IFRS 16 | 64,955 | |||||
Additions | 48,278 | |||||
Contract renewal | 0 | |||||
Transfer to indemnities receivable | 0 | |||||
Transfer of contract assets | 0 | |||||
Transfers | 0 | |||||
Write-offs and disposals | 0 | |||||
Amortization | (42,535) | |||||
Intangible assets, ending | R$ 70698 | [3] | R$ 0 | R$ 0 | ||
[1] | Work in progress transferred to contract assets due to adoption of IFRS 15, as of January 1, 2018, as described in Note 4.1. | |||||
[2] | Work in progress transferred from contract assets to intangible assets. | |||||
[3] | As of December 31, 2019, intangible assets includes leases recognized before December 31, 2018 in accordance with IAS 17 amounting to R$ 292,824 - (R$ 315,717 as of December 31, 2018 - R$ R$ 98,077 recognized as concession agreements - equity value and R$ 217,640 recognized as program contracts). |
14. Intangible assets (Detail_2
14. Intangible assets (Details 2) - BRL (R$) R$ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
SummaryOfIntangibleAssetsLineItems [Line Items] | ||
Current liabilities | R$ 110291 | R$ 137827 |
Noncurrent liabilities | 3,183,689 | 3,275,297 |
Liabilities | 3,293,980 | 3,413,124 |
Alto Tietê | ||
SummaryOfIntangibleAssetsLineItems [Line Items] | ||
Current liabilities | 44,003 | 39,283 |
Noncurrent liabilities | 208,217 | 252,093 |
Liabilities | 252,220 | 291,376 |
São Lourenço | ||
SummaryOfIntangibleAssetsLineItems [Line Items] | ||
Current liabilities | 66,288 | 98,544 |
Noncurrent liabilities | 2,975,472 | 3,023,204 |
Liabilities | R$ 3041760 | R$ 3121748 |
14. Intangible assets (Detail_3
14. Intangible assets (Details 3) R$ in Thousands | Dec. 31, 2019BRL (R$) |
SummaryOfIntangibleAssetsLineItems [Line Items] | |
Right of use | R$ 640415 |
Leases related to contract assets | |
SummaryOfIntangibleAssetsLineItems [Line Items] | |
Right of use | 276,893 |
Leases related to concession agreements and program contracts | |
SummaryOfIntangibleAssetsLineItems [Line Items] | |
Right of use | 292,824 |
Leases related to concession agreements and program contracts | Cost | |
SummaryOfIntangibleAssetsLineItems [Line Items] | |
Right of use | 405,426 |
Leases related to concession agreements and program contracts | Accumulated amortization | |
SummaryOfIntangibleAssetsLineItems [Line Items] | |
Right of use | (112,602) |
Other assets | |
SummaryOfIntangibleAssetsLineItems [Line Items] | |
Right of use | 70,698 |
Vehicles | |
SummaryOfIntangibleAssetsLineItems [Line Items] | |
Right of use | 91,709 |
Properties | |
SummaryOfIntangibleAssetsLineItems [Line Items] | |
Right of use | 13,309 |
Equipment | |
SummaryOfIntangibleAssetsLineItems [Line Items] | |
Right of use | 3,801 |
Other | |
SummaryOfIntangibleAssetsLineItems [Line Items] | |
Right of use | 4,414 |
Accumulated amortization | |
SummaryOfIntangibleAssetsLineItems [Line Items] | |
Right of use | R$ 42535 |
14. Intangible assets (Detail_4
14. Intangible assets (Details 4) R$ in Thousands | 12 Months Ended |
Dec. 31, 2019BRL (R$) | |
Intangible assets other than goodwill [abstract] | |
Right-of-use amortization | R$ 65413 |
Financial result - interest expenses | (54,791) |
Short-term and low-value lease expenses | (51,855) |
Decrease of the income of the year | R$ 172059 |
14. Intangible assets (Detail_5
14. Intangible assets (Details Narrative) - BRL (R$) R$ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Intangible assets other than goodwill [abstract] | |||
Number of municipalities | 372 | 369 | |
Program contracts commitments, current | R$ 273932 | R$ 230695 | |
Program contracts commitments, noncurrent | 103,321 | 142,314 | |
Capitalized interest and inflation adjustment | R$ 233251 | R$ 488502 | R$ 649048 |
Construction margin | 2.30% | 2.30% | |
Construction margin | R$ 65172 | R$ 63013 | 70,335 |
Expropriations | 34,681 | 106,429 | R$ 19576 |
Intangible assets related to PPP ALTO TIETÊ | 348,586 | 359,759 | |
Monthly assigned funds from tariffs | 10,361 | ||
Estimated monetary restatement | 7,730,000 | ||
Funds from tariffs arising from services provided - PPP São Lourenço | 33,000 | ||
Intangible assets related to PPP São Lourenço | R$ 3235008 | R$ 3208464 | |
Intangible assets, discount rate for adjustment - PPP | 7.80% | ||
Amortization average rate | 4.20% | 4.20% | 3.90% |
Right of use operating expense | R$ 40577 | ||
Right of use selling expense | 9,132 | ||
Right of use administrative expense | R$ 2146 |
15. Property, plant and equip_3
15. Property, plant and equipment (Details) - BRL (R$) R$ in Thousands | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disclosure of detailed information about property, plant and equipment [line items] | ||||
Cost | R$ 625825 | R$ 585179 | ||
Accumulated amortization | (311,432) | (317,567) | ||
Net | R$ 314393 | R$ 267612 | R$ 255050 | R$ 302383 |
Depreciation average rate | 12.50% | 12.30% | ||
Land | ||||
Disclosure of detailed information about property, plant and equipment [line items] | ||||
Cost | R$ 92962 | R$ 92979 | ||
Accumulated amortization | 0 | 0 | ||
Net | R$ 92962 | R$ 92979 | 92,507 | 92,494 |
Depreciation average rate | 0.00% | 0.00% | ||
Buildings | ||||
Disclosure of detailed information about property, plant and equipment [line items] | ||||
Cost | R$ 82143 | R$ 79086 | ||
Accumulated amortization | (40,438) | (38,961) | ||
Net | R$ 41705 | R$ 40125 | 42,360 | 43,262 |
Depreciation average rate | 2.10% | 3.00% | ||
Equipment | ||||
Disclosure of detailed information about property, plant and equipment [line items] | ||||
Cost | R$ 402850 | R$ 372872 | ||
Accumulated amortization | (250,577) | (256,786) | ||
Net | R$ 152273 | R$ 116086 | 103,803 | 149,140 |
Depreciation average rate | 16.30% | 16.50% | ||
Transportation equipment | ||||
Disclosure of detailed information about property, plant and equipment [line items] | ||||
Cost | R$ 8946 | R$ 11333 | ||
Accumulated amortization | (6,962) | (7,860) | ||
Net | R$ 1984 | R$ 3473 | 3,680 | 4,531 |
Depreciation average rate | 9.90% | 10.00% | ||
Furniture and fixtures | ||||
Disclosure of detailed information about property, plant and equipment [line items] | ||||
Cost | R$ 31365 | R$ 27250 | ||
Accumulated amortization | (13,146) | (13,672) | ||
Net | R$ 18219 | R$ 13578 | 11,816 | 11,986 |
Depreciation average rate | 6.70% | 6.80% | ||
Other | ||||
Disclosure of detailed information about property, plant and equipment [line items] | ||||
Cost | R$ 7559 | R$ 1659 | ||
Accumulated amortization | (309) | (288) | ||
Net | R$ 7250 | R$ 1371 | R$ 884 | R$ 970 |
Depreciation average rate | 5.00% | 6.20% |
15. Property, plant and equip_4
15. Property, plant and equipment (Details 1) - BRL (R$) R$ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure of detailed information about property, plant and equipment [line items] | |||
Property, plant, and equipment, beginning | R$ 267612 | R$ 255050 | R$ 302383 |
Additions | 78,159 | 50,645 | 18,920 |
Transfers | 2,830 | 1,458 | (14,697) |
Write-offs and disposals | (593) | (108) | (279) |
Depreciation | (33,615) | (39,433) | (51,277) |
Property, plant, and equipment, ending | 314,393 | 267,612 | 255,050 |
Land | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Property, plant, and equipment, beginning | 92,979 | 92,507 | 92,494 |
Additions | 0 | 0 | 0 |
Transfers | (17) | 472 | 13 |
Write-offs and disposals | 0 | 0 | 0 |
Depreciation | 0 | 0 | 0 |
Property, plant, and equipment, ending | 92,962 | 92,979 | 92,507 |
Buildings | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Property, plant, and equipment, beginning | 40,125 | 42,360 | 43,262 |
Additions | 3,497 | 73 | 86 |
Transfers | 15 | 0 | 1,358 |
Write-offs and disposals | 0 | 0 | 0 |
Depreciation | (1,932) | (2,308) | (2,346) |
Property, plant, and equipment, ending | 41,705 | 40,125 | 42,360 |
Equipment | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Property, plant, and equipment, beginning | 116,086 | 103,803 | 149,140 |
Additions | 63,216 | 46,473 | 17,627 |
Transfers | 3,149 | 986 | (15,945) |
Write-offs and disposals | (429) | (81) | (178) |
Depreciation | (29,749) | (35,095) | (46,841) |
Property, plant, and equipment, ending | 152,273 | 116,086 | 103,803 |
Transportation equipment | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Property, plant, and equipment, beginning | 3,473 | 3,680 | 4,531 |
Additions | 308 | 589 | 0 |
Transfers | (1,117) | 0 | (33) |
Write-offs and disposals | (2) | 0 | (27) |
Depreciation | (678) | (796) | (791) |
Property, plant, and equipment, ending | 1,984 | 3,473 | 3,680 |
Furniture and fixtures | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Property, plant, and equipment, beginning | 13,578 | 11,816 | 11,986 |
Additions | 5,266 | 2,972 | 1,207 |
Transfers | 734 | 0 | (75) |
Write-offs and disposals | (162) | (27) | (54) |
Depreciation | (1,197) | (1,183) | (1,248) |
Property, plant, and equipment, ending | 18,219 | 13,578 | 11,816 |
Other | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Property, plant, and equipment, beginning | 1,371 | 884 | 970 |
Additions | 5,872 | 538 | 0 |
Transfers | 66 | 0 | (15) |
Write-offs and disposals | 0 | 0 | (20) |
Depreciation | (59) | (51) | (51) |
Property, plant, and equipment, ending | R$ 7250 | R$ 1371 | R$ 884 |
16. Borrowings and financing (D
16. Borrowings and financing (Details) - BRL (R$) R$ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Disclosure of detailed information about borrowings [line items] | ||||
Current | R$ 2859843 | R$ 2103612 | ||
Noncurrent | 10,384,866 | 11,049,184 | ||
Total | 13,244,709 | 13,152,796 | R$ 12100966 | R$ 11964143 |
Local currency | ||||
Disclosure of detailed information about borrowings [line items] | ||||
Current | 977,943 | 1,365,112 | ||
Noncurrent | 5,907,968 | 5,118,275 | ||
Total | 6,885,911 | 6,483,387 | 6,428,145 | 6,303,780 |
Local currency | 10th issue debentures | ||||
Disclosure of detailed information about borrowings [line items] | ||||
Current | 41,021 | 42,493 | ||
Noncurrent | 0 | 40,194 | ||
Total | 41,021 | 82,687 | ||
Local currency | 12th issue debentures | ||||
Disclosure of detailed information about borrowings [line items] | ||||
Current | 45,450 | 45,450 | ||
Noncurrent | 203,829 | 249,249 | ||
Total | 249,279 | 294,699 | ||
Local currency | 14th issue debentures | ||||
Disclosure of detailed information about borrowings [line items] | ||||
Current | 41,940 | 41,270 | ||
Noncurrent | 63,012 | 103,005 | ||
Total | 104,952 | 144,275 | ||
Local currency | 15th issue debentures | ||||
Disclosure of detailed information about borrowings [line items] | ||||
Current | 0 | 359,394 | ||
Noncurrent | 0 | 0 | ||
Total | 0 | 359,394 | ||
Local currency | 17th issue debentures | ||||
Disclosure of detailed information about borrowings [line items] | ||||
Current | 289,211 | 279,100 | ||
Noncurrent | 263,226 | 532,691 | ||
Total | 552,437 | 811,791 | ||
Local currency | 18th issue debentures | ||||
Disclosure of detailed information about borrowings [line items] | ||||
Current | 34,239 | 33,469 | ||
Noncurrent | 133,679 | 165,267 | ||
Total | 167,918 | 198,736 | ||
Local currency | 20th issue debentures | ||||
Disclosure of detailed information about borrowings [line items] | ||||
Current | 0 | 248,334 | ||
Noncurrent | 0 | 0 | ||
Total | 0 | 248,334 | ||
Local currency | 21th issue debentures | ||||
Disclosure of detailed information about borrowings [line items] | ||||
Current | 150,000 | 0 | ||
Noncurrent | 349,660 | 499,604 | ||
Total | 499,660 | 499,604 | ||
Local currency | 22th issue debentures | ||||
Disclosure of detailed information about borrowings [line items] | ||||
Current | 0 | 0 | ||
Noncurrent | 765,689 | 756,040 | ||
Total | 765,689 | 756,040 | ||
Local currency | 23th issue debentures | ||||
Disclosure of detailed information about borrowings [line items] | ||||
Current | 0 | 0 | ||
Noncurrent | 864,603 | 0 | ||
Total | 864,603 | 0 | ||
Local currency | 24th issue debentures | ||||
Disclosure of detailed information about borrowings [line items] | ||||
Current | 0 | 0 | ||
Noncurrent | 395,855 | 0 | ||
Total | 395,855 | 0 | ||
Local currency | Brazilian Federal Savings Bank | ||||
Disclosure of detailed information about borrowings [line items] | ||||
Current | 83,519 | 75,223 | ||
Noncurrent | 1,341,660 | 1,266,592 | ||
Total | 1,425,179 | 1,345,684 | 1,236,674 | 1,150,691 |
Local currency | Brazilian Development Bank - BNDES BAIXADA SANTISTA | ||||
Disclosure of detailed information about borrowings [line items] | ||||
Current | 0 | 16,899 | ||
Noncurrent | 0 | 0 | ||
Total | 0 | 16,899 | ||
Local currency | Brazilian Development Bank - BNDES PAC | ||||
Disclosure of detailed information about borrowings [line items] | ||||
Current | 11,184 | 11,227 | ||
Noncurrent | 27,854 | 39,169 | ||
Total | 39,038 | 50,396 | ||
Local currency | Brazilian Development Bank - BNDES PAC II 9751 | ||||
Disclosure of detailed information about borrowings [line items] | ||||
Current | 6,990 | 4,364 | ||
Noncurrent | 40,685 | 18,811 | ||
Total | 47,675 | 23,175 | ||
Local currency | Brazilian Development Bank - BNDES PAC II 9752 | ||||
Disclosure of detailed information about borrowings [line items] | ||||
Current | 3,913 | 3,186 | ||
Noncurrent | 24,457 | 23,100 | ||
Total | 28,370 | 26,286 | ||
Local currency | Brazilian Development Bank - BNDES ONDA LIMPA | ||||
Disclosure of detailed information about borrowings [line items] | ||||
Current | 23,704 | 23,632 | ||
Noncurrent | 100,582 | 123,875 | ||
Total | 124,286 | 147,507 | ||
Local currency | Brazilian Development Bank - BNDES TIETÊ III | ||||
Disclosure of detailed information about borrowings [line items] | ||||
Current | 52,874 | 30,589 | ||
Noncurrent | 383,191 | 252,197 | ||
Total | 436,065 | 282,786 | ||
Local currency | Brazilian Development Bank - BNDES 2015 | ||||
Disclosure of detailed information about borrowings [line items] | ||||
Current | 31,712 | 31,615 | ||
Noncurrent | 460,646 | 490,729 | ||
Total | 492,358 | 522,344 | ||
Local currency | Brazilian Development Bank - BNDES 2014 | ||||
Disclosure of detailed information about borrowings [line items] | ||||
Current | 4,659 | 0 | ||
Noncurrent | 25,411 | 0 | ||
Total | 30,070 | 0 | ||
Local currency | Leases (Concession Agreements, Program Contracts and Contract Assets) | ||||
Disclosure of detailed information about borrowings [line items] | ||||
Current | 27,314 | 19,077 | ||
Noncurrent | 432,357 | 549,589 | ||
Total | 459,671 | 568,666 | 561,616 | 552,516 |
Local currency | Leases (Others) | ||||
Disclosure of detailed information about borrowings [line items] | ||||
Current | 51,088 | 0 | ||
Noncurrent | 23,365 | 0 | ||
Total | 74,453 | 0 | 0 | 0 |
Local currency | Other | ||||
Disclosure of detailed information about borrowings [line items] | ||||
Current | 1,665 | 1,380 | ||
Noncurrent | 8,207 | 8,163 | ||
Total | 9,872 | 9,543 | ||
Local currency | Interest and charges | ||||
Disclosure of detailed information about borrowings [line items] | ||||
Current | 77,460 | 98,410 | ||
Noncurrent | 0 | 0 | ||
Total | 77,460 | 98,410 | ||
Foreign currency | ||||
Disclosure of detailed information about borrowings [line items] | ||||
Current | 1,881,900 | 738,500 | ||
Noncurrent | 4,476,898 | 5,930,909 | ||
Total | 6,358,798 | 6,669,409 | 5,672,821 | 5,660,363 |
Foreign currency | Interest and charges | ||||
Disclosure of detailed information about borrowings [line items] | ||||
Current | 44,967 | 52,710 | ||
Noncurrent | 0 | 0 | ||
Total | 44,967 | 52,710 | ||
Foreign currency | Inter-American Development Bank - BID 1212 | ||||
Disclosure of detailed information about borrowings [line items] | ||||
Current | 41,428 | 39,826 | ||
Noncurrent | 207,140 | 238,954 | ||
Total | 248,568 | 278,780 | ||
Foreign currency | Inter-American Development Bank - BID 2202 | ||||
Disclosure of detailed information about borrowings [line items] | ||||
Current | 128,623 | 124,098 | ||
Noncurrent | 1,914,298 | 1,969,565 | ||
Total | 2,042,921 | 2,093,663 | ||
Foreign currency | International Bank of Reconstruction and Development - BIRD | ||||
Disclosure of detailed information about borrowings [line items] | ||||
Current | 24,505 | 11,779 | ||
Noncurrent | 330,898 | 341,646 | ||
Total | 355,403 | 353,425 | ||
Foreign currency | Deutsche Bank | ||||
Disclosure of detailed information about borrowings [line items] | ||||
Current | 0 | 288,479 | ||
Noncurrent | 0 | 0 | ||
Total | 0 | 292,872 | 496,726 | 485,090 |
Foreign currency | Eurobonds | ||||
Disclosure of detailed information about borrowings [line items] | ||||
Current | 1,409,921 | 0 | ||
Noncurrent | 0 | 1,354,532 | ||
Total | 1,409,921 | 1,358,412 | 1,158,642 | 1,141,469 |
Foreign currency | JICA 15 | ||||
Disclosure of detailed information about borrowings [line items] | ||||
Current | 42,813 | 40,646 | ||
Noncurrent | 385,315 | 406,462 | ||
Total | 428,128 | 447,108 | ||
Foreign currency | JICA 18 | ||||
Disclosure of detailed information about borrowings [line items] | ||||
Current | 38,493 | 36,545 | ||
Noncurrent | 346,237 | 365,230 | ||
Total | 384,730 | 401,775 | ||
Foreign currency | JICA 17 | ||||
Disclosure of detailed information about borrowings [line items] | ||||
Current | 12,466 | 11,835 | ||
Noncurrent | 91,845 | 51,786 | ||
Total | 104,311 | 63,621 | ||
Foreign currency | JICA 19 | ||||
Disclosure of detailed information about borrowings [line items] | ||||
Current | 67,372 | 64,028 | ||
Noncurrent | 1,109,644 | 1,047,081 | ||
Total | 1,177,016 | 1,111,109 | ||
Foreign currency | BID 1983AB | ||||
Disclosure of detailed information about borrowings [line items] | ||||
Current | 71,312 | 68,554 | ||
Noncurrent | 91,521 | 155,653 | ||
Total | R$ 162833 | R$ 225592 | R$ 270470 | R$ 343588 |
16. Borrowings and financing _2
16. Borrowings and financing (Details 1) | 12 Months Ended | |
Dec. 31, 2019 | ||
Local currency | 10th issue debentures | ||
Disclosure of detailed information about borrowings [line items] | ||
Guarantees | Own funds | |
Maturity | 2020 | |
Annual interest rates | TJLP +1.92% (Series 1 and 3) and 9.53% (Series 2) | |
Inflation adjustment | IPCA (Series 2) | |
Local currency | 12th issue debentures | ||
Disclosure of detailed information about borrowings [line items] | ||
Guarantees | Own funds | |
Maturity | 2025 | |
Annual interest rates | TR + 9.5% | |
Local currency | 14th issue debentures | ||
Disclosure of detailed information about borrowings [line items] | ||
Guarantees | Own funds | |
Maturity | 2022 | |
Annual interest rates | TJLP +1.92% (Series 1 and 3) and 9.19% (Series 2) | |
Inflation adjustment | IPCA (Series 2) | |
Local currency | 17th issue debentures | ||
Disclosure of detailed information about borrowings [line items] | ||
Guarantees | Own funds | |
Maturity | 2023 | |
Annual interest rates | CDI +0.75 (Series 1) and 4.5% (Series 2) and4.75% (Series 3) | |
Inflation adjustment | IPCA (Series 2 and 3) | |
Local currency | 18th issue debentures | ||
Disclosure of detailed information about borrowings [line items] | ||
Guarantees | Own funds | |
Maturity | 2024 | |
Annual interest rates | TJLP 1.92 % (Series 1 and 3) and 8.25% (Series 2) | |
Inflation adjustment | IPCA (Series 2) | |
Local currency | 21th issue debentures | ||
Disclosure of detailed information about borrowings [line items] | ||
Guarantees | Own funds | |
Maturity | 2022 | |
Annual interest rates | CDI + 0.60% e CDI+ 0.90% | |
Local currency | 22th issue debentures | ||
Disclosure of detailed information about borrowings [line items] | ||
Guarantees | Own funds | |
Maturity | 2025 | |
Annual interest rates | CDI +0.58 (Series 1) and CDI + 0.90% (Series 2) and 6.0% (Series 3) | |
Inflation adjustment | IPCA (Series 3) | |
Local currency | 23th issue debentures | ||
Disclosure of detailed information about borrowings [line items] | ||
Guarantees | Own funds | |
Maturity | 2027 | |
Annual interest rates | CDI +0.63 (Series 1) and CDI + 0.49% (Series 2) | |
Local currency | 24th issue debentures | ||
Disclosure of detailed information about borrowings [line items] | ||
Guarantees | Own funds | |
Maturity | 2029 | |
Annual interest rates | 3.20 (Series 1) and 3.37% (Series 2) | |
Inflation adjustment | IPCA (Series 1 and 2) | |
Local currency | Brazilian Federal Savings Bank | ||
Disclosure of detailed information about borrowings [line items] | ||
Guarantees | Own funds | |
Maturity | 2020/2039 | |
Annual interest rates | 5% to 9.5% | |
Inflation adjustment | TR | |
Local currency | Brazilian Development Bank - BNDES PAC | ||
Disclosure of detailed information about borrowings [line items] | ||
Guarantees | Own funds | |
Maturity | 2023 | |
Annual interest rates | TJLP+2.15% | |
Local currency | Brazilian Development Bank - BNDES PAC II 9751 | ||
Disclosure of detailed information about borrowings [line items] | ||
Guarantees | Own funds | |
Maturity | 2027 | |
Annual interest rates | TJLP+1.72% | |
Local currency | Brazilian Development Bank - BNDES PAC II 9752 | ||
Disclosure of detailed information about borrowings [line items] | ||
Guarantees | Own funds | |
Maturity | 2027 | |
Annual interest rates | TJLP+1.72% | |
Local currency | Brazilian Development Bank - BNDES ONDA LIMPA | ||
Disclosure of detailed information about borrowings [line items] | ||
Guarantees | Own funds | |
Maturity | 2025 | |
Annual interest rates | TJLP+1.92% | |
Local currency | Brazilian Development Bank - BNDES TIETÊ III | ||
Disclosure of detailed information about borrowings [line items] | ||
Guarantees | Own funds | |
Maturity | 2028 | |
Annual interest rates | TJLP+1.66% | |
Local currency | Brazilian Development Bank - BNDES 2015 | ||
Disclosure of detailed information about borrowings [line items] | ||
Guarantees | Own funds | |
Maturity | 2035 | |
Annual interest rates | TJLP+2.5% | |
Local currency | Brazilian Development Bank - BNDES 2014 | ||
Disclosure of detailed information about borrowings [line items] | ||
Guarantees | Own funds | |
Maturity | 2026 | |
Annual interest rates | TJLP+1.76% | |
Local currency | Leases (Concession Agreements, Program Contracts and Contract Assets) | ||
Disclosure of detailed information about borrowings [line items] | ||
Maturity | 2035 | |
Annual interest rates | 7.73% to 10.12% | |
Inflation adjustment | IPC | |
Local currency | Leases (Others) | ||
Disclosure of detailed information about borrowings [line items] | ||
Maturity | 2023 | |
Annual interest rates | 6.01% to 9.84% | |
Local currency | Other | ||
Disclosure of detailed information about borrowings [line items] | ||
Guarantees | Own funds | |
Maturity | 2025 | |
Annual interest rates | 3% (FEHIDRO) and TJLP + 1.5% (FINEP) | |
Foreign currency | Inter-American Development Bank - BID 1212 | ||
Disclosure of detailed information about borrowings [line items] | ||
Guarantees | Government | |
Maturity | 2025 | |
Annual interest rates | 3.31% | [1] |
Exchange rate changes | US$ | |
Foreign currency | Inter-American Development Bank - BID 2202 | ||
Disclosure of detailed information about borrowings [line items] | ||
Guarantees | Government | |
Maturity | 2035 | |
Annual interest rates | 3.42% | [1] |
Exchange rate changes | US$ | |
Foreign currency | International Bank for Reconstruction and Development - BIRD | ||
Disclosure of detailed information about borrowings [line items] | ||
Guarantees | Government | |
Maturity | 2034 | |
Annual interest rates | 2.85% | [1] |
Exchange rate changes | US$ | |
Foreign currency | Eurobonds | ||
Disclosure of detailed information about borrowings [line items] | ||
Maturity | 2020 | |
Annual interest rates | 6.25% | |
Exchange rate changes | US$ | |
Foreign currency | JICA 15 | ||
Disclosure of detailed information about borrowings [line items] | ||
Guarantees | Government | |
Maturity | 2029 | |
Annual interest rates | 1.8% and 2.5% | |
Exchange rate changes | Yen | |
Foreign currency | JICA 18 | ||
Disclosure of detailed information about borrowings [line items] | ||
Guarantees | Government | |
Maturity | 2029 | |
Annual interest rates | 1.8% and 2.5% | |
Exchange rate changes | Yen | |
Foreign currency | JICA 17 | ||
Disclosure of detailed information about borrowings [line items] | ||
Guarantees | Government | |
Maturity | 2035 | |
Annual interest rates | 1.2% and 0.01% | |
Exchange rate changes | Yen | |
Foreign currency | JICA 19 | ||
Disclosure of detailed information about borrowings [line items] | ||
Guarantees | Government | |
Maturity | 2037 | |
Annual interest rates | 1.7% and 0.01% | |
Exchange rate changes | Yen | |
Foreign currency | BID 1983AB | ||
Disclosure of detailed information about borrowings [line items] | ||
Maturity | 2023 | |
Annual interest rates | 2.08% to 2.38% | [1] |
Exchange rate changes | US$ | |
[1] | Rates comprising LIBOR + contractually defined spread. |
16. Borrowings and financing _3
16. Borrowings and financing (Details 2) R$ in Thousands | Dec. 31, 2019BRL (R$) |
Disclosure of detailed information about borrowings [line items] | |
2020 | R$ 2859843 |
2021 | 1,140,904 |
2022 | 1,204,626 |
2023 | 995,287 |
2024 | 1,295,766 |
2025 | 865,723 |
2026 to 2040 | 4,882,560 |
Total | 13,244,709 |
Local currency | |
Disclosure of detailed information about borrowings [line items] | |
2020 | 977,943 |
2021 | 760,486 |
2022 | 824,208 |
2023 | 616,363 |
2024 | 946,353 |
2025 | 516,310 |
2026 to 2040 | 2,244,248 |
Total | 6,885,911 |
Local currency | Debentures | |
Disclosure of detailed information about borrowings [line items] | |
2020 | 601,861 |
2021 | 484,363 |
2022 | 563,291 |
2023 | 366,330 |
2024 | 700,583 |
2025 | 280,062 |
2026 to 2040 | 644,924 |
Total | 3,641,414 |
Local currency | Brazilian Federal Savings Bank | |
Disclosure of detailed information about borrowings [line items] | |
2020 | 83,519 |
2021 | 87,951 |
2022 | 92,727 |
2023 | 85,554 |
2024 | 84,289 |
2025 | 89,569 |
2026 to 2040 | 901,570 |
Total | 1,425,179 |
Local currency | BNDES | |
Disclosure of detailed information about borrowings [line items] | |
2020 | 135,036 |
2021 | 134,584 |
2022 | 134,584 |
2023 | 128,886 |
2024 | 123,400 |
2025 | 105,460 |
2026 to 2040 | 435,912 |
Total | 1,197,862 |
Local currency | Leases (Concession Agreements, Program Contracts and Contract Assets) | |
Disclosure of detailed information about borrowings [line items] | |
2020 | 27,314 |
2021 | 29,093 |
2022 | 31,063 |
2023 | 33,711 |
2024 | 36,697 |
2025 | 39,951 |
2026 to 2040 | 261,842 |
Total | 459,671 |
Local currency | Leases (Others) | |
Disclosure of detailed information about borrowings [line items] | |
2020 | 51,088 |
2021 | 22,630 |
2022 | 678 |
2023 | 57 |
2024 | 0 |
2025 | 0 |
2026 to 2040 | 0 |
Total | 74,453 |
Local currency | Other | |
Disclosure of detailed information about borrowings [line items] | |
2020 | 1,665 |
2021 | 1,865 |
2022 | 1,865 |
2023 | 1,825 |
2024 | 1,384 |
2025 | 1,268 |
2026 to 2040 | 0 |
Total | 9,872 |
Local currency | Interest and charges | |
Disclosure of detailed information about borrowings [line items] | |
2020 | 77,460 |
2021 | 0 |
2022 | 0 |
2023 | 0 |
2024 | 0 |
2025 | 0 |
2026 to 2040 | 0 |
Total | 77,460 |
Foreign currency | |
Disclosure of detailed information about borrowings [line items] | |
2020 | 1,881,900 |
2021 | 380,418 |
2022 | 380,418 |
2023 | 378,924 |
2024 | 349,413 |
2025 | 349,413 |
2026 to 2040 | 2,638,312 |
Total | 6,358,798 |
Foreign currency | Interest and charges | |
Disclosure of detailed information about borrowings [line items] | |
2020 | 44,967 |
2021 | 0 |
2022 | 0 |
2023 | 0 |
2024 | 0 |
2025 | 0 |
2026 to 2040 | 0 |
Total | 44,967 |
Foreign currency | BID | |
Disclosure of detailed information about borrowings [line items] | |
2020 | 170,051 |
2021 | 170,051 |
2022 | 170,051 |
2023 | 170,051 |
2024 | 170,051 |
2025 | 170,051 |
2026 to 2040 | 1,271,183 |
Total | 2,291,489 |
Foreign currency | BIRD | |
Disclosure of detailed information about borrowings [line items] | |
2020 | 24,505 |
2021 | 24,505 |
2022 | 24,505 |
2023 | 24,505 |
2024 | 24,505 |
2025 | 24,505 |
2026 to 2040 | 208,373 |
Total | 355,403 |
Foreign currency | Eurobonds | |
Disclosure of detailed information about borrowings [line items] | |
2020 | 1,409,921 |
2021 | 0 |
2022 | 0 |
2023 | 0 |
2024 | 0 |
2025 | 0 |
2026 to 2040 | 0 |
Total | 1,409,921 |
Foreign currency | JICA | |
Disclosure of detailed information about borrowings [line items] | |
2020 | 161,144 |
2021 | 154,857 |
2022 | 154,857 |
2023 | 154,857 |
2024 | 154,857 |
2025 | 154,857 |
2026 to 2040 | 1,158,756 |
Total | 2,094,185 |
Foreign currency | BID 1983AB | |
Disclosure of detailed information about borrowings [line items] | |
2020 | 71,312 |
2021 | 31,005 |
2022 | 31,005 |
2023 | 29,511 |
2024 | 0 |
2025 | 0 |
2026 to 2040 | 0 |
Total | R$ 162833 |
16. Borrowings and financing _4
16. Borrowings and financing (Details 3) - BRL (R$) R$ in Thousands | 12 Months Ended | ||||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |||
Disclosure of detailed information about borrowings [line items] | |||||
Borrowings and financing, beginning | R$ 13152796 | R$ 12100966 | R$ 11964143 | ||
Addition as per IFRS 16 | 113,233 | ||||
Funding | 1,808,587 | 1,640,130 | 1,012,315 | ||
Borrowing costs | (15,199) | (5,577) | (4,743) | ||
Leases | 24,693 | ||||
Monetary variation and exchange rate changes | 280,526 | 982,072 | 159,087 | ||
Inflation adjustment/update and incorporated interest - capitalized | 59,306 | 73,824 | 49,517 | ||
Interest and fees paid | (737,326) | (732,048) | (676,087) | ||
Amortization | (2,148,198) | (1,678,748) | (1,098,558) | ||
Accrued interest | 568,679 | 563,902 | 426,781 | ||
Provision for interest and fees - capitalized | 153,177 | 198,061 | [1] | 233,341 | [1] |
Amortization of borrowing costs | 9,128 | ||||
Borrowing costs expenses | 10,214 | 10,477 | |||
Borrowings and financing, ending | 13,244,709 | 13,152,796 | 12,100,966 | ||
Local currency | |||||
Disclosure of detailed information about borrowings [line items] | |||||
Borrowings and financing, beginning | 6,483,387 | 6,428,145 | 6,303,780 | ||
Addition as per IFRS 16 | 113,233 | ||||
Funding | 1,688,186 | 1,075,244 | 815,807 | ||
Borrowing costs | (12,442) | (3,021) | (1,157) | ||
Leases | 24,693 | ||||
Monetary variation and exchange rate changes | 46,567 | 66,183 | 62,784 | ||
Inflation adjustment/update and incorporated interest - capitalized | 4,587 | 10,367 | 3,927 | ||
Interest and fees paid | (476,313) | (491,312) | (476,689) | ||
Amortization | (1,433,962) | (1,111,806) | (767,966) | ||
Accrued interest | 385,470 | 372,440 | 289,780 | ||
Provision for interest and fees - capitalized | 83,119 | 133,540 | [1] | 169,366 | [1] |
Amortization of borrowing costs | 4,079 | ||||
Borrowing costs expenses | 3,607 | 3,820 | |||
Borrowings and financing, ending | 6,885,911 | 6,483,387 | 6,428,145 | ||
Local currency | Debentures | |||||
Disclosure of detailed information about borrowings [line items] | |||||
Borrowings and financing, beginning | 3,486,861 | 3,576,842 | 3,641,912 | ||
Addition as per IFRS 16 | 0 | ||||
Funding | 1,266,755 | 750,000 | 500,000 | ||
Borrowing costs | (11,814) | (3,021) | (1,157) | ||
Leases | 0 | ||||
Monetary variation and exchange rate changes | 42,692 | 62,676 | 51,768 | ||
Inflation adjustment/update and incorporated interest - capitalized | 0 | 0 | 0 | ||
Interest and fees paid | (234,307) | (259,175) | (301,493) | ||
Amortization | (1,055,623) | (905,080) | (597,794) | ||
Accrued interest | 195,586 | 226,810 | 176,780 | ||
Provision for interest and fees - capitalized | 17,233 | 34,409 | [1] | 103,215 | [1] |
Amortization of borrowing costs | 3,845 | ||||
Borrowing costs expenses | 3,400 | 3,611 | |||
Borrowings and financing, ending | 3,711,228 | 3,486,861 | 3,576,842 | ||
Local currency | Brazilian Federal Savings Bank | |||||
Disclosure of detailed information about borrowings [line items] | |||||
Borrowings and financing, beginning | 1,345,684 | 1,236,674 | 1,150,691 | ||
Addition as per IFRS 16 | 0 | ||||
Funding | 162,767 | 194,244 | 144,654 | ||
Borrowing costs | 0 | 0 | 0 | ||
Leases | 0 | ||||
Monetary variation and exchange rate changes | 0 | 0 | 5,495 | ||
Inflation adjustment/update and incorporated interest - capitalized | 0 | 0 | 1,415 | ||
Interest and fees paid | (109,128) | (102,772) | (95,854) | ||
Amortization | (79,404) | (85,515) | (65,836) | ||
Accrued interest | 74,421 | 75,668 | 78,283 | ||
Provision for interest and fees - capitalized | 34,910 | 27,385 | [1] | 17,826 | [1] |
Amortization of borrowing costs | 0 | ||||
Borrowing costs expenses | 0 | 0 | |||
Borrowings and financing, ending | 1,425,179 | 1,345,684 | 1,236,674 | ||
Local currency | BNDES | |||||
Disclosure of detailed information about borrowings [line items] | |||||
Borrowings and financing, beginning | 1,072,605 | 1,042,036 | 946,984 | ||
Addition as per IFRS 16 | 0 | ||||
Funding | 256,981 | 131,000 | 171,153 | ||
Borrowing costs | (628) | 0 | 0 | ||
Leases | 0 | ||||
Monetary variation and exchange rate changes | 2,082 | 3,438 | 5,405 | ||
Inflation adjustment/update and incorporated interest - capitalized | 826 | 4,001 | 2,512 | ||
Interest and fees paid | (83,419) | (90,397) | (78,466) | ||
Amortization | (131,026) | (102,314) | (87,993) | ||
Accrued interest | 60,644 | 28,909 | 33,938 | ||
Provision for interest and fees - capitalized | 23,112 | 55,725 | [1] | 48,294 | [1] |
Amortization of borrowing costs | 234 | ||||
Borrowing costs expenses | 207 | 209 | |||
Borrowings and financing, ending | 1,201,411 | 1,072,605 | 1,042,036 | ||
Local currency | Leases (Concession Agreements, Program Contracts and Contract Assets) | |||||
Disclosure of detailed information about borrowings [line items] | |||||
Borrowings and financing, beginning | 568,666 | 561,616 | 552,516 | ||
Addition as per IFRS 16 | 0 | ||||
Funding | 0 | 0 | 0 | ||
Borrowing costs | 0 | 0 | 0 | ||
Leases | 24,693 | ||||
Monetary variation and exchange rate changes | 1,765 | 0 | 0 | ||
Inflation adjustment/update and incorporated interest - capitalized | 3,761 | 6,366 | 0 | ||
Interest and fees paid | (47,663) | (38,196) | 0 | ||
Amortization | (123,880) | (17,427) | (15,593) | ||
Accrued interest | 49,160 | 40,290 | 0 | ||
Provision for interest and fees - capitalized | 7,862 | 16,017 | 0 | ||
Amortization of borrowing costs | 0 | ||||
Borrowing costs expenses | 0 | 0 | |||
Borrowings and financing, ending | 459,671 | 568,666 | 561,616 | ||
Local currency | Leases (Others) | |||||
Disclosure of detailed information about borrowings [line items] | |||||
Borrowings and financing, beginning | 0 | 0 | 0 | ||
Addition as per IFRS 16 | 113,233 | ||||
Funding | 0 | ||||
Borrowing costs | 0 | ||||
Monetary variation and exchange rate changes | 0 | ||||
Inflation adjustment/update and incorporated interest - capitalized | 0 | ||||
Interest and fees paid | (1,141) | ||||
Amortization | (42,646) | ||||
Accrued interest | 5,007 | ||||
Provision for interest and fees - capitalized | 0 | ||||
Amortization of borrowing costs | 0 | ||||
Borrowings and financing, ending | 74,453 | 0 | 0 | ||
Local currency | Other | |||||
Disclosure of detailed information about borrowings [line items] | |||||
Borrowings and financing, beginning | 9,571 | 10,977 | 11,677 | ||
Addition as per IFRS 16 | 0 | ||||
Funding | 1,683 | 0 | 0 | ||
Borrowing costs | 0 | 0 | 0 | ||
Leases | 0 | ||||
Monetary variation and exchange rate changes | 28 | 69 | 116 | ||
Inflation adjustment/update and incorporated interest - capitalized | 0 | 0 | 0 | ||
Interest and fees paid | (655) | (772) | (876) | ||
Amortization | (1,383) | (1,470) | (750) | ||
Accrued interest | 652 | 763 | 779 | ||
Provision for interest and fees - capitalized | 2 | 4 | [1] | 31 | [1] |
Amortization of borrowing costs | 0 | ||||
Borrowing costs expenses | 0 | 0 | |||
Borrowings and financing, ending | 9,898 | 9,571 | 10,977 | ||
Foreign currency | |||||
Disclosure of detailed information about borrowings [line items] | |||||
Borrowings and financing, beginning | 6,669,409 | 5,672,821 | 5,660,363 | ||
Addition as per IFRS 16 | 0 | ||||
Funding | 120,401 | 564,886 | 196,508 | ||
Borrowing costs | (2,757) | (2,556) | (3,586) | ||
Leases | 0 | ||||
Monetary variation and exchange rate changes | 233,959 | 915,889 | 96,303 | ||
Inflation adjustment/update and incorporated interest - capitalized | 54,719 | 63,457 | 45,590 | ||
Interest and fees paid | (261,013) | (240,736) | (199,398) | ||
Amortization | (714,236) | (566,942) | (330,592) | ||
Accrued interest | 183,209 | 191,462 | 137,001 | ||
Provision for interest and fees - capitalized | 70,058 | 64,521 | [1] | 63,975 | [1] |
Amortization of borrowing costs | 5,049 | ||||
Borrowing costs expenses | 6,607 | 6,657 | |||
Borrowings and financing, ending | 6,358,798 | 6,669,409 | 5,672,821 | ||
Foreign currency | BID | |||||
Disclosure of detailed information about borrowings [line items] | |||||
Borrowings and financing, beginning | 2,399,985 | 1,743,257 | 1,811,664 | ||
Addition as per IFRS 16 | 0 | ||||
Funding | 0 | 484,690 | 96,889 | ||
Borrowing costs | 0 | (2,365) | (2,497) | ||
Leases | 0 | ||||
Monetary variation and exchange rate changes | 40,594 | 237,433 | (15,193) | ||
Inflation adjustment/update and incorporated interest - capitalized | 49,387 | 53,208 | 40,228 | ||
Interest and fees paid | (83,602) | (55,391) | (38,654) | ||
Amortization | (171,892) | (130,520) | (189,280) | ||
Accrued interest | 26,332 | 26,910 | 22,547 | ||
Provision for interest and fees - capitalized | 54,431 | 41,878 | [1] | 16,803 | [1] |
Amortization of borrowing costs | 955 | ||||
Borrowing costs expenses | 885 | 750 | |||
Borrowings and financing, ending | 2,316,190 | 2,399,985 | 1,743,257 | ||
Foreign currency | BIRD | |||||
Disclosure of detailed information about borrowings [line items] | |||||
Borrowings and financing, beginning | 356,420 | 303,278 | 261,337 | ||
Addition as per IFRS 16 | 0 | ||||
Funding | 2,540 | 0 | 35,710 | ||
Borrowing costs | (2,540) | 0 | 0 | ||
Leases | 0 | ||||
Monetary variation and exchange rate changes | 12,575 | 48,279 | 2,874 | ||
Inflation adjustment/update and incorporated interest - capitalized | 1,657 | 3,462 | 2,837 | ||
Interest and fees paid | (10,627) | (7,607) | (4,049) | ||
Amortization | (12,273) | 0 | 0 | ||
Accrued interest | 8,548 | 6,945 | 3,662 | ||
Provision for interest and fees - capitalized | 1,561 | 2,044 | [1] | 888 | [1] |
Amortization of borrowing costs | 19 | ||||
Borrowing costs expenses | 19 | 19 | |||
Borrowings and financing, ending | 357,880 | 356,420 | 303,278 | ||
Foreign currency | Deutsche Bank | |||||
Disclosure of detailed information about borrowings [line items] | |||||
Borrowings and financing, beginning | 292,872 | 496,726 | 485,090 | ||
Addition as per IFRS 16 | 0 | ||||
Funding | 0 | 0 | 0 | ||
Borrowing costs | 0 | 0 | (720) | ||
Leases | 0 | ||||
Monetary variation and exchange rate changes | 13,255 | 62,918 | 7,335 | ||
Inflation adjustment/update and incorporated interest - capitalized | 0 | 0 | 0 | ||
Interest and fees paid | (18,562) | (35,207) | (31,774) | ||
Amortization | (303,866) | (268,508) | 0 | ||
Accrued interest | 12,929 | 28,862 | 21,286 | ||
Provision for interest and fees - capitalized | 1,240 | 4,454 | [1] | 11,925 | [1] |
Amortization of borrowing costs | 2,132 | ||||
Borrowing costs expenses | 3,627 | 3,584 | |||
Borrowings and financing, ending | 0 | 292,872 | 496,726 | ||
Foreign currency | Eurobonds | |||||
Disclosure of detailed information about borrowings [line items] | |||||
Borrowings and financing, beginning | 1,358,412 | 1,158,642 | 1,141,469 | ||
Addition as per IFRS 16 | 0 | ||||
Funding | 0 | 0 | 0 | ||
Borrowing costs | 0 | 0 | 0 | ||
Leases | 0 | ||||
Monetary variation and exchange rate changes | 54,565 | 198,380 | 17,115 | ||
Inflation adjustment/update and incorporated interest - capitalized | 0 | 0 | 0 | ||
Interest and fees paid | (102,883) | (97,952) | (85,338) | ||
Amortization | 0 | 0 | 0 | ||
Accrued interest | 94,095 | 85,072 | 55,046 | ||
Provision for interest and fees - capitalized | 8,943 | 13,448 | [1] | 29,529 | [1] |
Amortization of borrowing costs | 824 | ||||
Borrowing costs expenses | 822 | 821 | |||
Borrowings and financing, ending | 1,409,921 | 1,358,412 | 1,158,642 | ||
Foreign currency | JICA | |||||
Disclosure of detailed information about borrowings [line items] | |||||
Borrowings and financing, beginning | 2,036,128 | 1,700,448 | 1,617,215 | ||
Addition as per IFRS 16 | 0 | ||||
Funding | 117,861 | 80,196 | 63,909 | ||
Borrowing costs | (112) | (191) | (287) | ||
Leases | 0 | ||||
Monetary variation and exchange rate changes | 104,027 | 329,638 | 82,563 | ||
Inflation adjustment/update and incorporated interest - capitalized | 3,675 | 6,787 | 2,525 | ||
Interest and fees paid | (35,001) | (33,519) | (28,652) | ||
Amortization | (155,064) | (82,608) | (65,702) | ||
Accrued interest | 32,194 | 33,992 | 27,602 | ||
Provision for interest and fees - capitalized | 3,013 | 1,209 | [1] | 1,115 | [1] |
Amortization of borrowing costs | 187 | ||||
Borrowing costs expenses | 176 | 160 | |||
Borrowings and financing, ending | 2,106,908 | 2,036,128 | 1,700,448 | ||
Foreign currency | BID 1983AB | |||||
Disclosure of detailed information about borrowings [line items] | |||||
Borrowings and financing, beginning | 225,592 | 270,470 | 343,588 | ||
Addition as per IFRS 16 | 0 | ||||
Funding | 0 | 0 | 0 | ||
Borrowing costs | (105) | 0 | (82) | ||
Leases | 0 | ||||
Monetary variation and exchange rate changes | 8,943 | 39,241 | 1,609 | ||
Inflation adjustment/update and incorporated interest - capitalized | 0 | 0 | 0 | ||
Interest and fees paid | (10,338) | (11,060) | (10,931) | ||
Amortization | (71,141) | (85,306) | (75,610) | ||
Accrued interest | 9,111 | 9,681 | 6,858 | ||
Provision for interest and fees - capitalized | 870 | 1,488 | [1] | 3,715 | [1] |
Amortization of borrowing costs | 932 | ||||
Borrowing costs expenses | 1,078 | 1,323 | |||
Borrowings and financing, ending | R$ 162833 | R$ 225592 | R$ 270470 | ||
[1] | Amount related to accrued interest which as part of the contract assets. |
16. Borrowings and financing _5
16. Borrowings and financing (Details 4) R$ in Thousands | 12 Months Ended |
Dec. 31, 2019BRL (R$) | |
23th issue debentures - Series 1 | |
Disclosure of detailed information about borrowings [line items] | |
Amount | R$ 491755 |
Maturity | May/2024 |
Remuneration | CDI + 0.63 p.a. |
23th issue debentures - Series 2 | |
Disclosure of detailed information about borrowings [line items] | |
Amount | R$ 375000 |
Maturity | May/2027 |
Remuneration | CDI + 0.49 p.a. |
24th issue debentures - Series 1 | |
Disclosure of detailed information about borrowings [line items] | |
Amount | R$ 100000 |
Maturity | July/2026 |
Remuneration | IPCA+ 3.20 p.a. |
24th issue debentures - Series 2 | |
Disclosure of detailed information about borrowings [line items] | |
Amount | R$ 300000 |
Maturity | July/2029 |
Remuneration | IPCA+ 3.37 p.a. |
16. Borrowings and financing _6
16. Borrowings and financing (Details 5) | 12 Months Ended | |
Dec. 31, 2019 | ||
Adjusted EBITDA / Adjusted financial expenses | ||
Disclosure of detailed information about borrowings [line items] | ||
Restrictive ratios | Equal to or higher than 2.80 | |
Adjusted net debt / Adjusted EBITDA | ||
Disclosure of detailed information about borrowings [line items] | ||
Restrictive ratios | Equal to or lower than 3.80 | |
Adjusted total debt / Adjusted EBITDA | ||
Disclosure of detailed information about borrowings [line items] | ||
Restrictive ratios | Lower than 3.65 | |
Other onerous debt / Adjusted EBITDA | ||
Disclosure of detailed information about borrowings [line items] | ||
Restrictive ratios | Equal to or lower than 1.30 | [1] |
Adjusted current ratio | ||
Disclosure of detailed information about borrowings [line items] | ||
Restrictive ratios | Higher than 1.00 | |
EBITDA / Paid financial expenses | ||
Disclosure of detailed information about borrowings [line items] | ||
Restrictive ratios | Equal to or higher than 2.35 | |
Net debt / Adjusted EBITDA | ||
Disclosure of detailed information about borrowings [line items] | ||
Restrictive ratios | Equal to or lower than 3.50 | |
[1] | "Other Onerous Debts" correspond to the sum of social security liabilities, health care plan, installment payment of tax debts and installment payment of debts with electricity supplier. |
16. Borrowings and financing _7
16. Borrowings and financing (Details 6) R$ in Thousands | Dec. 31, 2019BRL (R$) | [1] |
Disclosure of detailed information about borrowings [line items] | ||
Borrowings and financing - credit limits | R$ 5281000 | |
Brazilian Federal Savings Bank | ||
Disclosure of detailed information about borrowings [line items] | ||
Borrowings and financing - credit limits | 1,729,000 | |
BNDES | ||
Disclosure of detailed information about borrowings [line items] | ||
Borrowings and financing - credit limits | 1,203,000 | |
Japan International Cooperation Agency - JICA | ||
Disclosure of detailed information about borrowings [line items] | ||
Borrowings and financing - credit limits | 94,000 | |
Inter-American Development Bank - BID | ||
Disclosure of detailed information about borrowings [line items] | ||
Borrowings and financing - credit limits | 1,209,000 | |
International Bank for Reconstruction and Development - IBRD | ||
Disclosure of detailed information about borrowings [line items] | ||
Borrowings and financing - credit limits | 1,005,000 | |
Other | ||
Disclosure of detailed information about borrowings [line items] | ||
Borrowings and financing - credit limits | R$ 41000 | |
[1] | Brazilian Central Bank's exchange sell rate as of December 30, 2019 (US$ 1.00 = R$ 4.0307; Yen 1.00 = R$ 0.03715). |
16. Borrowings and financing _8
16. Borrowings and financing (Details Narrative) R$ in Thousands | 12 Months Ended | |
Dec. 31, 2019BRL (R$)R$ / $R$ / ¥ | Dec. 31, 2018R$ / $R$ / ¥ | |
Disclosure of detailed information about borrowings [line items] | ||
Agreement clause in case of early maturity of debt | R$ 145000 | |
Initial funding of BNDES 2014 | 33,000 | |
BNDES 2014 agreement total | 61,143 | |
Monthly amount recorded in fiduciary account linked to the BNDES | 225,900 | |
Guaranteed | R$ 255300 | |
US$ | ||
Disclosure of detailed information about borrowings [line items] | ||
Exchange rate | R$ / $ | 4.0307 | 3.8748 |
Yen | ||
Disclosure of detailed information about borrowings [line items] | ||
Exchange rate | R$ / ¥ | 0.03715 | 0.03527 |
17. Taxes recoverable_payable_2
17. Taxes recoverable/payable (Details) - BRL (R$) R$ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
SummaryOfTaxesRecoverablePayableLineItems [Line Items] | ||
Current tax assets | R$ 141266 | R$ 380703 |
Income tax and social contribution | ||
SummaryOfTaxesRecoverablePayableLineItems [Line Items] | ||
Current tax assets | 136,436 | 361,758 |
Withholding income tax (IRRF) on financial investments | ||
SummaryOfTaxesRecoverablePayableLineItems [Line Items] | ||
Current tax assets | 1,359 | 6,423 |
Other federal taxes | ||
SummaryOfTaxesRecoverablePayableLineItems [Line Items] | ||
Current tax assets | R$ 3471 | R$ 12522 |
17. Taxes recoverable_payable_3
17. Taxes recoverable/payable (Details 1) - BRL (R$) R$ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
SummaryOfTaxesRecoverablePayableLineItems [Line Items] | ||
Current tax liabilities | R$ 250318 | R$ 200563 |
Cofins and Pasep | ||
SummaryOfTaxesRecoverablePayableLineItems [Line Items] | ||
Current tax liabilities | 94,027 | 82,381 |
INSS (Social Security contribution) | ||
SummaryOfTaxesRecoverablePayableLineItems [Line Items] | ||
Current tax liabilities | 39,404 | 38,871 |
IRRF (Withholding income tax) | ||
SummaryOfTaxesRecoverablePayableLineItems [Line Items] | ||
Current tax liabilities | 69,932 | 66,825 |
Other | ||
SummaryOfTaxesRecoverablePayableLineItems [Line Items] | ||
Current tax liabilities | R$ 46955 | R$ 12486 |
18. Deferred taxes and contri_3
18. Deferred taxes and contributions (Details) - BRL (R$) R$ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
SummaryOfDeferredTaxesAndContributionsLineItems [Line Items] | ||||
Deferred tax assets | R$ 905258 | R$ 933815 | R$ 1054103 | R$ 1252416 |
Deferred tax liabilities | (1,339,254) | (1,195,057) | (1,090,857) | (1,066,071) |
Deferred tax assets (liabilities), net | (433,996) | (261,242) | (36,754) | 186,345 |
Provisions | ||||
SummaryOfDeferredTaxesAndContributionsLineItems [Line Items] | ||||
Deferred tax assets | 366,673 | 337,833 | 482,863 | 524,129 |
Pension obligations - G1 | ||||
SummaryOfDeferredTaxesAndContributionsLineItems [Line Items] | ||||
Deferred tax assets | 157,998 | 157,044 | 165,503 | 167,922 |
Donations of underlying asset on concession agreements | ||||
SummaryOfDeferredTaxesAndContributionsLineItems [Line Items] | ||||
Deferred tax assets | 51,818 | 54,131 | 55,112 | 57,317 |
Credit losses | ||||
SummaryOfDeferredTaxesAndContributionsLineItems [Line Items] | ||||
Deferred tax assets | 145,622 | 197,920 | 199,063 | 266,757 |
Other | ||||
SummaryOfDeferredTaxesAndContributionsLineItems [Line Items] | ||||
Deferred tax assets | 183,147 | 186,887 | 151,562 | 151,247 |
Temporary difference on concession of intangible asset | ||||
SummaryOfDeferredTaxesAndContributionsLineItems [Line Items] | ||||
Deferred tax liabilities | (408,732) | (433,842) | (460,177) | (492,341) |
Capitalization of borrowing costs | ||||
SummaryOfDeferredTaxesAndContributionsLineItems [Line Items] | ||||
Deferred tax liabilities | (409,236) | (420,978) | (415,379) | (374,512) |
Profit on supply to governmental entities | ||||
SummaryOfDeferredTaxesAndContributionsLineItems [Line Items] | ||||
Deferred tax liabilities | (372,289) | (206,978) | (76,705) | (92,365) |
Actuarial gain/loss - G1 Plan | ||||
SummaryOfDeferredTaxesAndContributionsLineItems [Line Items] | ||||
Deferred tax assets | 85,044 | |||
Deferred tax liabilities | (54,222) | (36,430) | (36,538) | 0 |
Construction margin | ||||
SummaryOfDeferredTaxesAndContributionsLineItems [Line Items] | ||||
Deferred tax liabilities | (83,399) | (86,164) | (88,947) | (91,790) |
Borrowing costs | ||||
SummaryOfDeferredTaxesAndContributionsLineItems [Line Items] | ||||
Deferred tax liabilities | R$ 11376 | R$ 10665 | R$ 13111 | R$ 15063 |
18. Deferred taxes and contri_4
18. Deferred taxes and contributions (Details 1) - BRL (R$) R$ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
SummaryOfDeferredTaxesAndContributionsLineItems [Line Items] | ||||
Deferred tax assets | R$ 905258 | R$ 933815 | R$ 1054103 | R$ 1252416 |
Deferred tax liabilities | (1,339,254) | (1,195,057) | (1,090,857) | (1,066,071) |
Deferred tax assets (liabilities), net | (433,996) | (261,242) | R$ 36754 | R$ 186345 |
to be realized within 12 months | ||||
SummaryOfDeferredTaxesAndContributionsLineItems [Line Items] | ||||
Deferred tax assets | 189,740 | 158,294 | ||
Deferred tax liabilities | (35,954) | (32,546) | ||
to be realized after one year | ||||
SummaryOfDeferredTaxesAndContributionsLineItems [Line Items] | ||||
Deferred tax assets | 715,518 | 775,521 | ||
Deferred tax liabilities | R$ 1303300 | R$ 1162511 |
18. Deferred taxes and contri_5
18. Deferred taxes and contributions (Details 2) - BRL (R$) R$ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
SummaryOfDeferredTaxesAndContributionsLineItems [Line Items] | |||
Deferred tax assets, beginning | R$ 933815 | R$ 1054103 | R$ 1252416 |
Deferred tax liabilities, beginning | (1,195,057) | (1,090,857) | (1,066,071) |
Deferred tax assets (liabilities) net, beginning | (261,242) | (36,754) | 186,345 |
Deferred tax asset, changes | (28,557) | (120,288) | (198,313) |
Deferred tax liabilities, changes | (144,197) | (104,200) | (24,786) |
Deferred tax assets, net, changes | (172,754) | (224,488) | (223,099) |
Deferred tax assets, ending | 905,258 | 933,815 | 1,054,103 |
Deferred tax liabilities, ending | (1,339,254) | (1,195,057) | (1,090,857) |
Deferred tax assets (liabilities) net, ending | (433,996) | (261,242) | (36,754) |
Provisions | |||
SummaryOfDeferredTaxesAndContributionsLineItems [Line Items] | |||
Deferred tax assets, beginning | 337,833 | 482,863 | 524,129 |
Deferred tax asset, changes | 28,840 | (145,030) | (41,266) |
Deferred tax assets, ending | 366,673 | 337,833 | 482,863 |
Pension obligations - G1 | |||
SummaryOfDeferredTaxesAndContributionsLineItems [Line Items] | |||
Deferred tax assets, beginning | 157,044 | 165,503 | 167,922 |
Deferred tax asset, changes | 954 | (8,459) | (2,419) |
Deferred tax assets, ending | 157,998 | 157,044 | 165,503 |
Donations of underlying asset on concession agreements | |||
SummaryOfDeferredTaxesAndContributionsLineItems [Line Items] | |||
Deferred tax assets, beginning | 54,131 | 55,112 | 57,317 |
Deferred tax asset, changes | (2,313) | (981) | (2,205) |
Deferred tax assets, ending | 51,818 | 54,131 | 55,112 |
Credit losses | |||
SummaryOfDeferredTaxesAndContributionsLineItems [Line Items] | |||
Deferred tax assets, beginning | 197,920 | 199,063 | 266,757 |
Deferred tax asset, changes | (52,298) | (1,143) | (67,694) |
Deferred tax assets, ending | 145,622 | 197,920 | 199,063 |
Other | |||
SummaryOfDeferredTaxesAndContributionsLineItems [Line Items] | |||
Deferred tax assets, beginning | 186,887 | 151,562 | 151,247 |
Deferred tax asset, changes | (3,740) | 35,325 | 315 |
Deferred tax assets, ending | 183,147 | 186,887 | 151,562 |
Temporary difference on concession of intangible asset | |||
SummaryOfDeferredTaxesAndContributionsLineItems [Line Items] | |||
Deferred tax liabilities, beginning | (433,842) | (460,177) | (492,341) |
Deferred tax liabilities, changes | 25,110 | 26,335 | 32,164 |
Deferred tax liabilities, ending | (408,732) | (433,842) | (460,177) |
Capitalization of borrowing costs | |||
SummaryOfDeferredTaxesAndContributionsLineItems [Line Items] | |||
Deferred tax liabilities, beginning | (420,978) | (415,379) | (374,512) |
Deferred tax liabilities, changes | 11,742 | (5,599) | (40,867) |
Deferred tax liabilities, ending | (409,236) | (420,978) | (415,379) |
Profit on supply to governmental entities | |||
SummaryOfDeferredTaxesAndContributionsLineItems [Line Items] | |||
Deferred tax liabilities, beginning | (206,978) | (76,705) | (92,365) |
Deferred tax liabilities, changes | (165,311) | (130,273) | 15,660 |
Deferred tax liabilities, ending | (372,289) | (206,978) | (76,705) |
Actuarial gain/loss - G1 Plan | |||
SummaryOfDeferredTaxesAndContributionsLineItems [Line Items] | |||
Deferred tax assets, beginning | 85,044 | ||
Deferred tax liabilities, beginning | (36,430) | (36,538) | 0 |
Deferred tax asset, changes | (85,044) | ||
Deferred tax liabilities, changes | (17,792) | 108 | (36,538) |
Deferred tax liabilities, ending | (54,222) | (36,430) | (36,538) |
Construction margin | |||
SummaryOfDeferredTaxesAndContributionsLineItems [Line Items] | |||
Deferred tax liabilities, beginning | (86,164) | (88,947) | (91,790) |
Deferred tax liabilities, changes | 2,765 | 2,783 | 2,843 |
Deferred tax liabilities, ending | (83,399) | (86,164) | (88,947) |
Borrowing costs | |||
SummaryOfDeferredTaxesAndContributionsLineItems [Line Items] | |||
Deferred tax liabilities, beginning | (10,665) | (13,111) | (15,063) |
Deferred tax liabilities, changes | (711) | 2,446 | 1,952 |
Deferred tax liabilities, ending | R$ 11376 | R$ 10665 | R$ 13111 |
18. Deferred taxes and contri_6
18. Deferred taxes and contributions (Details 3) - BRL (R$) R$ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Deferred Taxes And Contributions | |||
Deferred tax assets (liabilities) net, beginning | R$ 261242 | R$ 36754 | R$ 186345 |
Net change in the year - corresponding entry to the income statement | (154,962) | (224,596) | (101,517) |
Net change in the year - corresponding entry to valuation adjustments to equity (Note 20 (b)) | (17,792) | 108 | (121,582) |
Total net change | (172,754) | (224,488) | (223,099) |
Deferred tax assets (liabilities) net, ending | R$ 433996 | R$ 261242 | R$ 36754 |
18. Deferred taxes and contri_7
18. Deferred taxes and contributions (Details 4) - BRL (R$) R$ in Thousands | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | ||
Deferred Taxes And Contributions | ||||
Profit before income taxes | R$ 4677942 | R$ 3912319 | R$ 3503614 | |
Statutory rate | 34.00% | 34.00% | 34.00% | |
Estimated expense at statutory rate | R$ 1590500 | R$ 1330186 | R$ 1191229 | |
Tax benefit of interest on equity | 312,339 | 264,816 | 245,444 | |
Permanent differences: Provision - Law 4,819/58 | [1] | (44,426) | (46,544) | (57,104) |
Permanent differences: Donations | (19,888) | (13,068) | (12,413) | |
Other differences | 32,050 | 47,731 | 30,998 | |
Income tax and social contribution | (1,310,425) | (1,077,251) | (984,304) | |
Current income tax and social contribution | (1,155,463) | (852,655) | (882,787) | |
Deferred income tax and social contribution | R$ 154962 | R$ 224596 | R$ 101517 | |
Effective rate | 28.00% | 28.00% | 28.00% | |
[1] | Permanent difference related to the provision for actuarial liability (Note 20 (b) (iii)). |
19. Provisions (Details)
19. Provisions (Details) - BRL (R$) R$ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
SummaryOfProvisionsLineItems [Line Items] | ||
Provisions | R$ 1078451 | R$ 993625 |
Escrow deposits | (42,643) | (100,763) |
Total | 1,035,808 | 892,862 |
Current | 550,247 | 458,387 |
Noncurrent | 485,561 | 434,475 |
Customer claims | ||
SummaryOfProvisionsLineItems [Line Items] | ||
Provisions | 253,665 | 290,649 |
Escrow deposits | (9,973) | (43,841) |
Total | 243,692 | 246,808 |
Supplier claims | ||
SummaryOfProvisionsLineItems [Line Items] | ||
Provisions | 153,654 | 67,985 |
Escrow deposits | (298) | (24,380) |
Total | 153,356 | 43,605 |
Other civil claims | ||
SummaryOfProvisionsLineItems [Line Items] | ||
Provisions | 93,910 | 98,302 |
Escrow deposits | (16,496) | (13,519) |
Total | 77,414 | 84,783 |
Tax claims | ||
SummaryOfProvisionsLineItems [Line Items] | ||
Provisions | 59,143 | 63,335 |
Escrow deposits | (3,518) | (8,091) |
Total | 55,625 | 55,244 |
Labor claims | ||
SummaryOfProvisionsLineItems [Line Items] | ||
Provisions | 325,129 | 302,935 |
Escrow deposits | (12,329) | (10,932) |
Total | 312,800 | 292,003 |
Environmental claims | ||
SummaryOfProvisionsLineItems [Line Items] | ||
Provisions | 192,950 | 170,419 |
Escrow deposits | (29) | 0 |
Total | 192,921 | 170,419 |
Current | ||
SummaryOfProvisionsLineItems [Line Items] | ||
Provisions | 550,247 | 458,387 |
Escrow deposits | 0 | 0 |
Total | 550,247 | 458,387 |
Noncurrent | ||
SummaryOfProvisionsLineItems [Line Items] | ||
Provisions | 528,204 | 535,238 |
Escrow deposits | (42,643) | (100,763) |
Total | R$ 485561 | R$ 434475 |
19. Provisions (Details 1)
19. Provisions (Details 1) - BRL (R$) R$ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
SummaryOfProvisionsLineItems [Line Items] | |||
Provisions, beginning | R$ 892862 | R$ 1078204 | R$ 1173075 |
Additional provisions | 348,388 | 162,859 | 128,447 |
Interest and inflation adjustment | 252,243 | 124,057 | 148,336 |
Use of the accrual | (250,280) | (244,077) | (250,862) |
Amounts not used (reversal) | (207,405) | (228,181) | (120,792) |
Provisions, ending | 1,035,808 | 892,862 | 1,078,204 |
Customer claims | |||
SummaryOfProvisionsLineItems [Line Items] | |||
Provisions, beginning | 290,649 | 438,619 | 572,210 |
Additional provisions | 57,314 | 29,732 | 26,642 |
Interest and inflation adjustment | 53,929 | 40,749 | 44,805 |
Use of the accrual | (99,379) | (141,421) | (138,466) |
Amounts not used (reversal) | (48,848) | (77,030) | (66,572) |
Provisions, ending | 253,665 | 290,649 | 438,619 |
Supplier claims | |||
SummaryOfProvisionsLineItems [Line Items] | |||
Provisions, beginning | 67,985 | 332,037 | 332,667 |
Additional provisions | 54,223 | 36,100 | 23,017 |
Interest and inflation adjustment | 102,686 | 21,161 | 36,888 |
Use of the accrual | (42,948) | (308,253) | (39,433) |
Amounts not used (reversal) | (28,292) | (13,060) | (21,102) |
Provisions, ending | 153,654 | 67,985 | 332,037 |
Other civil claims | |||
SummaryOfProvisionsLineItems [Line Items] | |||
Provisions, beginning | 98,302 | 114,544 | 131,286 |
Additional provisions | 28,888 | 22,578 | 13,517 |
Interest and inflation adjustment | 18,713 | 12,939 | 12,057 |
Use of the accrual | (9,766) | (16,146) | (19,975) |
Amounts not used (reversal) | (42,227) | (35,613) | (22,341) |
Provisions, ending | 93,910 | 98,302 | 114,544 |
Tax claims | |||
SummaryOfProvisionsLineItems [Line Items] | |||
Provisions, beginning | 63,335 | 77,100 | 69,898 |
Additional provisions | 11,821 | 10,763 | 6,877 |
Interest and inflation adjustment | 2,918 | 4,157 | 7,392 |
Use of the accrual | (4,982) | (2,490) | (259) |
Amounts not used (reversal) | (13,949) | (26,195) | (6,808) |
Provisions, ending | 59,143 | 63,335 | 77,100 |
Labor claims | |||
SummaryOfProvisionsLineItems [Line Items] | |||
Provisions, beginning | 302,935 | 299,842 | 285,413 |
Additional provisions | 167,995 | 83,499 | 55,106 |
Interest and inflation adjustment | 61,483 | 32,290 | 38,861 |
Use of the accrual | (112,084) | (44,900) | (43,498) |
Amounts not used (reversal) | (95,200) | (67,796) | (36,040) |
Provisions, ending | 325,129 | 302,935 | 299,842 |
Environmental claims | |||
SummaryOfProvisionsLineItems [Line Items] | |||
Provisions, beginning | 170,419 | 160,446 | 150,084 |
Additional provisions | 42,198 | 33,392 | 32,377 |
Interest and inflation adjustment | 24,358 | 18,294 | 16,156 |
Use of the accrual | (312) | (115) | (24,585) |
Amounts not used (reversal) | (43,713) | (41,598) | (13,586) |
Provisions, ending | 192,950 | 170,419 | 160,446 |
Subtotal | |||
SummaryOfProvisionsLineItems [Line Items] | |||
Provisions, beginning | 993,625 | 1,422,588 | 1,541,558 |
Additional provisions | 362,439 | 216,064 | 157,536 |
Interest and inflation adjustment | 264,087 | 129,590 | 156,159 |
Use of the accrual | (269,471) | (513,325) | (266,216) |
Amounts not used (reversal) | (272,229) | (261,292) | (166,449) |
Provisions, ending | 1,078,451 | 993,625 | 1,422,588 |
Escrow deposits | |||
SummaryOfProvisionsLineItems [Line Items] | |||
Provisions, beginning | (100,763) | (344,384) | (368,483) |
Additional provisions | (14,051) | (53,205) | (29,089) |
Interest and inflation adjustment | (11,844) | (5,533) | (7,823) |
Use of the accrual | 19,191 | 269,248 | 15,354 |
Amounts not used (reversal) | 64,824 | 33,111 | 45,657 |
Provisions, ending | R$ 42643 | R$ 100763 | R$ 344384 |
19. Provisions (Details 2)
19. Provisions (Details 2) - BRL (R$) R$ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
SummaryOfProvisionsLineItems [Line Items] | ||
Significant contingent liabilities | R$ 9433489 | R$ 8793100 |
Customer claims | ||
SummaryOfProvisionsLineItems [Line Items] | ||
Significant contingent liabilities | 86,061 | 207,600 |
Supplier claims | ||
SummaryOfProvisionsLineItems [Line Items] | ||
Significant contingent liabilities | 1,986,736 | 1,459,100 |
Other civil claims | ||
SummaryOfProvisionsLineItems [Line Items] | ||
Significant contingent liabilities | 679,623 | 719,300 |
Tax claims | ||
SummaryOfProvisionsLineItems [Line Items] | ||
Significant contingent liabilities | 1,184,811 | 1,439,100 |
Labor claims | ||
SummaryOfProvisionsLineItems [Line Items] | ||
Significant contingent liabilities | 631,364 | 624,200 |
Environmental claims | ||
SummaryOfProvisionsLineItems [Line Items] | ||
Significant contingent liabilities | R$ 4864894 | R$ 4343800 |
19. Provisions (Details Narrati
19. Provisions (Details Narrative) - BRL (R$) R$ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
SummaryOfProvisionsLineItems [Line Items] | ||
Lawsuits filed by commercial customers | 680 | 890 |
Lawsuits which customers claim a reduction in the sewage tariff | 320 | 490 |
Lawsuits which customers plead reduction in tariff | 30 | 40 |
Increase in accrued lawsuits due to revisions of expectations arising from court decisions | R$ 109751 | |
Tax deficiency notice related to sewage services | 664,669 | R$ 605008 |
Indemnities receivable | 114,335 | 109,990 |
Environmental indemnifications | 43,923 | 44,828 |
Renewed guarantee insurance | 500,000 | |
Guarantee insurance for escrow deposit | 126,400 | R$ 160400 |
Guarantee insurance for escrow deposit, current | 75,500 | |
Guarantee insurance for escrow deposit outtanding | 424,500 | |
Customer claims | ||
SummaryOfProvisionsLineItems [Line Items] | ||
Increase (decrease) in the lawsuits deemed as contingent liabilities | (121,539) | |
Supplier claims | ||
SummaryOfProvisionsLineItems [Line Items] | ||
Increase (decrease) in the lawsuits deemed as contingent liabilities | 527,636 | |
Tax claims | ||
SummaryOfProvisionsLineItems [Line Items] | ||
Increase (decrease) in the lawsuits deemed as contingent liabilities | (254,289) | |
Environmental claims | ||
SummaryOfProvisionsLineItems [Line Items] | ||
Increase (decrease) in the lawsuits deemed as contingent liabilities | R$ 22502 |
20. Employees benefits (Details
20. Employees benefits (Details) - BRL (R$) R$ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
SummaryOfEmployeeBenefitsLineItems [Line Items] | |||
Present value of defined benefit obligations | R$ 6113349 | R$ 5138445 | R$ 4863718 |
Fair value of the plan's assets | 2,752,417 | 2,168,436 | 1,931,380 |
Liability as per statement of financial position - pension obligations | (3,360,932) | (2,970,009) | |
G1 Plan | |||
SummaryOfEmployeeBenefitsLineItems [Line Items] | |||
Present value of defined benefit obligations | (3,067,094) | (2,532,338) | (2,319,841) |
Fair value of the plan's assets | 2,752,417 | 2,168,436 | 1,931,380 |
Liability as per statement of financial position - pension obligations | (314,677) | (363,902) | |
G0 Plan | |||
SummaryOfEmployeeBenefitsLineItems [Line Items] | |||
Present value of defined benefit obligations | (3,046,255) | (2,606,107) | (2,543,877) |
Fair value of the plan's assets | 0 | 0 | R$ 0 |
Liability as per statement of financial position - pension obligations | R$ 3046255 | R$ 2606107 |
20. Employees benefits (Detai_2
20. Employees benefits (Details 1) - BRL (R$) R$ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
SummaryOfEmployeeBenefitsLineItems [Line Items] | ||
Defined benefit obligation, beginning | R$ 5138445 | R$ 4863718 |
Current service cost | (274,368) | (246,153) |
Interest cost | (224,429) | (213,201) |
Actuarial (gains)/losses recorded as other comprehensive income | (790,473) | (124,971) |
Benefits paid | 314,366 | 309,598 |
Defined benefit obligation, ending | (6,113,349) | (5,138,445) |
G1 Plan | ||
SummaryOfEmployeeBenefitsLineItems [Line Items] | ||
Defined benefit obligation, beginning | (2,532,338) | (2,319,841) |
Current service cost | (47,001) | (13,905) |
Interest cost | (224,429) | (213,201) |
Actuarial (gains)/losses recorded as other comprehensive income | (392,876) | (114,188) |
Benefits paid | 129,550 | 128,797 |
Defined benefit obligation, ending | (3,067,094) | (2,532,338) |
G0 Plan | ||
SummaryOfEmployeeBenefitsLineItems [Line Items] | ||
Defined benefit obligation, beginning | (2,606,107) | (2,543,877) |
Current service cost | (227,367) | (232,248) |
Interest cost | 0 | 0 |
Actuarial (gains)/losses recorded as other comprehensive income | (397,597) | (10,783) |
Benefits paid | 184,816 | 180,801 |
Defined benefit obligation, ending | R$ 3046255 | R$ 2606107 |
20. Employees benefits (Detai_3
20. Employees benefits (Details 2) - BRL (R$) R$ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
SummaryOfEmployeeBenefitsLineItems [Line Items] | |||
Fair value of the plan's assets, beginning | R$ 2168436 | R$ 1931380 | |
Expected return on the plan assets | 192,965 | 179,449 | R$ 183689 |
Expected Company's contributions | 36,968 | 36,199 | |
Expected participants' contributions | 38,391 | 36,336 | |
Benefits paid | (129,549) | (128,797) | |
Actuarial gains/(losses) included in other comprehensive income (loss) | 445,206 | 113,869 | 52,083 |
Fair value of the plan's assets, ending | 2,752,417 | 2,168,436 | 1,931,380 |
(Deficit)/Surplus | (3,360,932) | (2,970,009) | |
G1 Plan | |||
SummaryOfEmployeeBenefitsLineItems [Line Items] | |||
Fair value of the plan's assets, beginning | 2,168,436 | 1,931,380 | |
Expected return on the plan assets | 192,965 | 179,449 | 183,689 |
Expected Company's contributions | 36,968 | 36,199 | |
Expected participants' contributions | 38,391 | 36,336 | |
Benefits paid | (129,549) | (128,797) | |
Actuarial gains/(losses) included in other comprehensive income (loss) | 445,206 | 113,869 | 52,083 |
Fair value of the plan's assets, ending | 2,752,417 | 2,168,436 | 1,931,380 |
(Deficit)/Surplus | (314,677) | (363,902) | |
G0 Plan | |||
SummaryOfEmployeeBenefitsLineItems [Line Items] | |||
Fair value of the plan's assets, beginning | 0 | 0 | |
Expected return on the plan assets | 0 | 0 | 0 |
Expected Company's contributions | 0 | 0 | |
Expected participants' contributions | 0 | 0 | |
Benefits paid | 0 | 0 | |
Actuarial gains/(losses) included in other comprehensive income (loss) | 0 | 0 | 0 |
Fair value of the plan's assets, ending | 0 | 0 | R$ 0 |
(Deficit)/Surplus | R$ 3046255 | R$ 2606107 |
20. Employees benefits (Detai_4
20. Employees benefits (Details 3) - BRL (R$) R$ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
SummaryOfEmployeeBenefitsLineItems [Line Items] | |||
Actuarial gains/(losses) on obligations | R$ 790473 | R$ 124971 | R$ 357046 |
Actuarial gains/(losses) recorded as other comprehensive income | 445,206 | 113,869 | 52,083 |
Total gains/(losses) | (345,267) | (11,102) | 409,129 |
Deferred income tax and social contribution - G1 Plan | (17,792) | 108 | (121,582) |
Valuation adjustments to equity | (363,059) | (10,994) | 287,547 |
G1 Plan | |||
SummaryOfEmployeeBenefitsLineItems [Line Items] | |||
Actuarial gains/(losses) on obligations | (392,876) | (114,188) | 305,511 |
Actuarial gains/(losses) recorded as other comprehensive income | 445,206 | 113,869 | 52,083 |
Total gains/(losses) | 52,330 | (319) | 357,594 |
Deferred income tax and social contribution - G1 Plan | (17,792) | 108 | (121,582) |
Valuation adjustments to equity | 34,538 | (211) | 236,012 |
G0 Plan | |||
SummaryOfEmployeeBenefitsLineItems [Line Items] | |||
Actuarial gains/(losses) on obligations | (397,597) | (10,783) | 51,535 |
Actuarial gains/(losses) recorded as other comprehensive income | 0 | 0 | 0 |
Total gains/(losses) | (397,597) | (10,783) | 51,535 |
Deferred income tax and social contribution - G1 Plan | 0 | 0 | 0 |
Valuation adjustments to equity | R$ 397597 | R$ 10783 | R$ 51535 |
20. Employees benefits (Detai_5
20. Employees benefits (Details 4) - BRL (R$) R$ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
SummaryOfEmployeeBenefitsLineItems [Line Items] | |||
Cost of service, net | R$ 235976 | R$ 209817 | R$ 227780 |
Interest cost rates | 224,429 | 213,201 | 260,409 |
Expected return on the plan's assets | (192,965) | (179,449) | (183,689) |
Amount received from GESP (undisputed) | (97,300) | (96,282) | (95,191) |
Total expenses | 170,140 | 147,287 | 209,309 |
G1 Plan | |||
SummaryOfEmployeeBenefitsLineItems [Line Items] | |||
Cost of service, net | 8,609 | (22,431) | (35,093) |
Interest cost rates | 224,429 | 213,201 | 260,409 |
Expected return on the plan's assets | (192,965) | (179,449) | (183,689) |
Amount received from GESP (undisputed) | 0 | 0 | 0 |
Total expenses | 40,073 | 11,321 | 41,627 |
G0 Plan | |||
SummaryOfEmployeeBenefitsLineItems [Line Items] | |||
Cost of service, net | 227,367 | 232,248 | 262,873 |
Interest cost rates | 0 | 0 | 0 |
Expected return on the plan's assets | 0 | 0 | 0 |
Amount received from GESP (undisputed) | (97,300) | (96,282) | (95,191) |
Total expenses | R$ 130067 | R$ 135966 | R$ 167682 |
20. Employees benefits (Detai_6
20. Employees benefits (Details 5) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
G1 Plan | |||
SummaryOfEmployeeBenefitsLineItems [Line Items] | |||
Discount rate - actual rate (NTN-B) | 3.37% | 4.91% | 5.35% |
Inflation rate | 3.50% | 4.01% | 3.96% |
Expected rate of return on assets | 6.99% | 9.12% | 9.52% |
Nominal rate of salary growth | 5.57% | 6.09% | 6.04% |
Mortality table | AT-2000 | AT-2000 | AT-2000 |
G0 Plan | |||
SummaryOfEmployeeBenefitsLineItems [Line Items] | |||
Discount rate - actual rate (NTN-B) | 3.36% | 4.84% | 5.30% |
Inflation rate | 3.50% | 4.01% | 3.96% |
Expected rate of return on assets | |||
Nominal rate of salary growth | 5.57% | 6.09% | 6.04% |
Mortality table | AT-2000 | AT-2000 | AT-2000 |
20. Employees benefits (Detai_7
20. Employees benefits (Details 6) | 12 Months Ended |
Dec. 31, 2019 | |
G1 Plan | Discount rate | Increase of 1.0% | |
SummaryOfEmployeeBenefitsLineItems [Line Items] | |
Impact on present value of the defined benefit obligations | Decrease of R$ 326,714 |
G1 Plan | Discount rate | Decrease of 1.0% | |
SummaryOfEmployeeBenefitsLineItems [Line Items] | |
Impact on present value of the defined benefit obligations | Increase of R$ 396,026 |
G1 Plan | Life expectation | Increase of 1 year | |
SummaryOfEmployeeBenefitsLineItems [Line Items] | |
Impact on present value of the defined benefit obligations | Increase of R$ 80,048 |
G1 Plan | Life expectation | Decrease of 1 year | |
SummaryOfEmployeeBenefitsLineItems [Line Items] | |
Impact on present value of the defined benefit obligations | Decrease of R$ 72,676 |
G1 Plan | Wage increase rate | Increase of 1.0% | |
SummaryOfEmployeeBenefitsLineItems [Line Items] | |
Impact on present value of the defined benefit obligations | Increase of R$ 36,140 |
G1 Plan | Wage increase rate | Decrease of 1.0% | |
SummaryOfEmployeeBenefitsLineItems [Line Items] | |
Impact on present value of the defined benefit obligations | Decrease of R$ 31,070 |
G0 Plan | Discount rate | Increase of 1.0% | |
SummaryOfEmployeeBenefitsLineItems [Line Items] | |
Impact on present value of the defined benefit obligations | Decrease of R$ 301,727 |
G0 Plan | Discount rate | Decrease of 1.0% | |
SummaryOfEmployeeBenefitsLineItems [Line Items] | |
Impact on present value of the defined benefit obligations | Increase of R$ 314,156 |
G0 Plan | Life expectation | Increase of 1 year | |
SummaryOfEmployeeBenefitsLineItems [Line Items] | |
Impact on present value of the defined benefit obligations | Increase of R$ 117,324 |
G0 Plan | Life expectation | Decrease of 1 year | |
SummaryOfEmployeeBenefitsLineItems [Line Items] | |
Impact on present value of the defined benefit obligations | Decrease of R$ 140,051 |
G0 Plan | Wage increase rate | Increase of 1.0% | |
SummaryOfEmployeeBenefitsLineItems [Line Items] | |
Impact on present value of the defined benefit obligations | Increase of R$ 388,886 |
G0 Plan | Wage increase rate | Decrease of 1.0% | |
SummaryOfEmployeeBenefitsLineItems [Line Items] | |
Impact on present value of the defined benefit obligations | Decrease of R$ 372,127 |
20. Employees benefits (Detai_8
20. Employees benefits (Details 7) - G1 Plan R$ in Thousands | 12 Months Ended |
Dec. 31, 2020BRL (R$) | |
SummaryOfEmployeeBenefitsLineItems [Line Items] | |
Service cost | R$ 3796 |
Interest cost rates | 208,485 |
Net profitability on financial assets | (187,317) |
Expense to be recognized by employer | R$ 24964 |
20. Employees benefits (Detai_9
20. Employees benefits (Details 8) - BRL (R$) R$ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Employees Benefits | |||
Fixed income | R$ 1795554 | R$ 1477643 | |
Total equities | 301,707 | 249,740 | |
Total structured investments | 630,933 | 431,828 | |
Other | 24,223 | 9,225 | |
Fair value of plan's assets | R$ 2752417 | R$ 2168436 | R$ 1931380 |
20. Employees benefits (Deta_10
20. Employees benefits (Details 9) - G0 Plan R$ in Thousands | 12 Months Ended |
Dec. 31, 2020BRL (R$) | |
SummaryOfEmployeeBenefitsLineItems [Line Items] | |
Interest cost rates | R$ 206262 |
Expense to be recognized by employer | R$ 206262 |
20. Employees benefits (Deta_11
20. Employees benefits (Details Narrative) R$ in Thousands | 12 Months Ended | ||
Dec. 31, 2019BRL (R$)Participants | Dec. 31, 2018BRL (R$)Participants | Dec. 31, 2017BRL (R$) | |
SummaryOfEmployeeBenefitsLineItems [Line Items] | |||
Average gross payroll | 9.30% | 7.20% | |
Average gross payroll | R$ 237898 | R$ 196281 | |
Defined pension plan expense recorded in operating costs | 29,637 | 7,530 | R$ 35156 |
Defined pension plan expense recorded in selling expense | 4,187 | 1,133 | 1,864 |
Defined pension plan expense recorded in administrative expense | 2,685 | 704 | 619 |
Defined pension plan expense capitalized in assets | R$ 3564 | R$ 1955 | |
Number of active participants | Participants | 3,758 | 4,056 | |
Number of inactive participants | Participants | 7,399 | 7,149 | |
Contribution - participants | R$ 38391 | R$ 36336 | |
Salaries, payroll charges and social contributions | 93,486 | 110,464 | |
Sabesprev Mais | |||
SummaryOfEmployeeBenefitsLineItems [Line Items] | |||
Defined pension plan expense recorded in operating costs | 14,293 | 13,227 | 12,034 |
Defined pension plan expense recorded in selling expense | 1,865 | 1,820 | 1,744 |
Defined pension plan expense recorded in administrative expense | 3,845 | 3,599 | R$ 3245 |
Defined pension plan expense capitalized in assets | R$ 2458 | R$ 2115 | |
Active participants of Plan | 9,774 | 9,586 | |
G1 Plan | |||
SummaryOfEmployeeBenefitsLineItems [Line Items] | |||
Benefits payable | R$ 167202 | ||
Contribution | 36,968 | R$ 36199 | |
Contribution - participants | 38,391 | 36,336 | |
Actuarial deficit | 25,531 | ||
Actuarial deficit - participants | 13,497 | ||
G0 Plan | |||
SummaryOfEmployeeBenefitsLineItems [Line Items] | |||
Benefits payable | 180,382 | ||
Contribution - participants | R$ 0 | R$ 0 | |
Active participants of Plan | 10 | 10 | |
Beneficiaries, retirees and survivors | 1,960 | 2,038 |
21. Services payable (Details N
21. Services payable (Details Narrative) - BRL (R$) R$ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Services Payable | ||
Services payable | R$ 474078 | R$ 454022 |
22. Knowledge retention progr_2
22. Knowledge retention program (Details) - BRL (R$) R$ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Knowledge Retention Program | ||
Severance payable, current | R$ 153377 | R$ 74324 |
Severance payable, noncurrent | 122,148 | |
Labor obligations | 10,472 | 140,818 |
Labor obligations, current | 8,242 | 136,293 |
Labor obligations, noncurrent | R$ 2230 | R$ 4525 |
23. Equity (Details)
23. Equity (Details) - shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | ||
SummaryOfEquityLineItems [Line Items] | |||
Number of shares | 683,509,869 | 683,509,869 | |
Percentage of shares | 1 | 1 | |
State Department of Finance | |||
SummaryOfEquityLineItems [Line Items] | |||
Number of shares | 343,524,285 | 343,524,285 | |
Percentage of shares | .5026 | 0.5026 | |
Companhia Brasileira de Liquidação e Custódia | |||
SummaryOfEquityLineItems [Line Items] | |||
Number of shares | [1] | 235,643,765 | 212,612,143 |
Percentage of shares | [1] | .3447 | 0.3110 |
The Bank of New York ADR Department | |||
SummaryOfEquityLineItems [Line Items] | |||
Number of shares | [1],[2] | 103,823,655 | 125,278,967 |
Percentage of shares | [1],[2] | .1519 | 0.1833 |
Other | |||
SummaryOfEquityLineItems [Line Items] | |||
Number of shares | 518,164 | 2,094,474 | |
Percentage of shares | .0008 | 0.0031 | |
[1] | Each ADR corresponds to 1 share. | ||
[2] | Custodians. |
23. Equity (Details 1)
23. Equity (Details 1) - BRL (R$) R$ / shares in Units, R$ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Equity | |||
Profit for the year | R$ 3367517 | R$ 2835068 | R$ 2519310 |
(-) Legal reserve - 5% | 168,376 | 141,755 | 125,965 |
Distribution of earnings | 3,199,141 | 2,693,313 | 2,393,345 |
Minimum mandatory dividend - 25% | R$ 799785 | R$ 673328 | R$ 598336 |
Dividend per share and per ADS | R$ 1.17012 | R$ 0.9851 | R$ 0.87539 |
23. Equity (Details 2)
23. Equity (Details 2) - BRL (R$) R$ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Equity | |||
Profit for the year | R$ 3367517 | R$ 2835068 | R$ 2519310 |
Legal reserve | 168,376 | 141,755 | 125,965 |
Minimum mandatory dividends | 799,785 | 673,328 | 598,336 |
Additional proposed dividends | 141,203 | 118,859 | 105,543 |
Investment reserve recorded | R$ 2258153 | R$ 1901126 | R$ 1689466 |
23. Equity (Details 3)
23. Equity (Details 3) - BRL (R$) R$ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
SummaryOfEquityLineItems [Line Items] | |||
Other comprehensive loss, beginning | R$ 549095 | ||
Actuarial gains (losses) | (363,059) | R$ 10994 | R$ 287547 |
Other comprehensive loss, ending | (912,171) | (549,095) | |
G1 Plan | |||
SummaryOfEquityLineItems [Line Items] | |||
Other comprehensive loss, beginning | 70,716 | ||
Actuarial gains (losses) | 34,538 | ||
Other comprehensive loss, ending | 105,254 | 70,716 | |
G0 Plan | |||
SummaryOfEquityLineItems [Line Items] | |||
Other comprehensive loss, beginning | (619,811) | ||
Actuarial gains (losses) | (397,597) | ||
Other comprehensive loss, ending | R$ 1017408 | R$ 619811 |
23. Equity (Details Narrative)
23. Equity (Details Narrative) - BRL (R$) R$ / shares in Units, R$ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Equity | |||
Authorized capital | R$ 15000000 | R$ 15000000 | |
Subscribed and paid-in-capital | 683,509,869 | 683,509,869 | |
Minimum mandatory dividend per share and per ADS | R$ 1.17012 | R$ 0.9851 | R$ 0.87539 |
Surplus minimum mandatory | R$ 60331 | ||
Dividends | 799,785 | R$ 673328 | |
Additional proposed dividends | R$ 141203 | R$ 118859 | R$ 105543 |
Dividend per common share | R$ 1.3767 | R$ 1.1590 | |
Withholding income tax recognized in current liabilities | R$ 60230 | R$ 58258 | |
Interest on capital balance payable | 800,352 | 673,765 | R$ 598612 |
Interest on capital balance payable declared | 799,785 | 673,328 | |
Interest on capital balance payable witheld income tax | 567 | 437 | |
Investment reserve | R$ 6098575 | R$ 3840422 |
24. Earnings per share (Details
24. Earnings per share (Details) - BRL (R$) R$ / shares in Units, R$ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Earnings per share [abstract] | |||
Equity attributable to Company's owners | R$ 3367517 | R$ 2835068 | R$ 2519310 |
Number of shares | 683,509,869 | 683,509,869 | 683,509,869 |
Basic and diluted earnings per share (reais per share) | R$ 4.93 | R$ 4.15 | R$ 3.69 |
25. Operating segment informa_3
25. Operating segment information (Details) - BRL (R$) R$ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure of operating segments [line items] | |||
Gross operating revenue | R$ 19080598 | R$ 17056279 | R$ 15374623 |
Gross sales deductions | (1,096,944) | (971,185) | (766,390) |
Net operating revenue | 17,983,654 | 16,085,094 | 14,608,233 |
Costs, selling and administrative expenses | (12,256,984) | (10,943,540) | (10,646,646) |
Income from operations before other operating expenses, net and equity accounting | 5,726,670 | 5,141,554 | 3,961,587 |
Other operating income/(expenses), net | (18,748) | 28,591 | (5,679) |
Equity accounting | 3,701 | 6,510 | 5,760 |
Financial result, net | (1,033,681) | (1,264,336) | (458,054) |
Income from operations before taxes | 4,677,942 | 3,912,319 | 3,503,614 |
Depreciation and amortization | (1,780,094) | (1,392,541) | (1,301,897) |
Sanitation | |||
Disclosure of operating segments [line items] | |||
Gross operating revenue | 16,134,032 | 14,253,609 | 12,223,746 |
Gross sales deductions | (1,096,944) | (971,185) | (766,390) |
Net operating revenue | 15,037,088 | 13,282,424 | 11,457,356 |
Costs, selling and administrative expenses | (9,375,590) | (8,203,883) | (7,566,104) |
Income from operations before other operating expenses, net and equity accounting | 5,661,498 | 5,078,541 | 3,891,252 |
Depreciation and amortization | (1,780,094) | (1,392,541) | (1,301,897) |
Reconciliation to the financial statements | |||
Disclosure of operating segments [line items] | |||
Gross operating revenue | 2,946,566 | 2,802,670 | 3,150,877 |
Gross sales deductions | 0 | 0 | 0 |
Net operating revenue | 2,946,566 | 2,802,670 | 3,150,877 |
Costs, selling and administrative expenses | (2,881,394) | (2,739,657) | (3,080,542) |
Income from operations before other operating expenses, net and equity accounting | R$ 65172 | R$ 63013 | R$ 70335 |
25. Operating segment informa_4
25. Operating segment information (Details 1) - BRL (R$) R$ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure of operating segments [abstract] | |||
Gross revenue from construction recognized under IFRIC 12 | R$ 2946566 | R$ 2802670 | R$ 3150877 |
Construction costs recognized under IFRIC 12 | (2,881,394) | (2,739,657) | (3,080,542) |
Construction margin | R$ 65172 | R$ 63013 | R$ 70335 |
26. Insurance (Details)
26. Insurance (Details) R$ in Thousands | Dec. 31, 2019BRL (R$) |
SummaryOfInsuranceLineItems [Line Items] | |
Coverage | R$ 4962842 |
Specified risks - fire | |
SummaryOfInsuranceLineItems [Line Items] | |
Coverage | 2,185,827 |
Engineering risk | |
SummaryOfInsuranceLineItems [Line Items] | |
Coverage | 1,960,248 |
Guarantee insurance for escrow deposit | |
SummaryOfInsuranceLineItems [Line Items] | |
Coverage | 500,000 |
Traditional guarantee insurance | |
SummaryOfInsuranceLineItems [Line Items] | |
Coverage | 100,000 |
Civil liability- D&O (Directors and Officers) | |
SummaryOfInsuranceLineItems [Line Items] | |
Coverage | 100,000 |
Civil liability - works | |
SummaryOfInsuranceLineItems [Line Items] | |
Coverage | 105,695 |
Domestic and international transportation | |
SummaryOfInsuranceLineItems [Line Items] | |
Coverage | 6,058 |
Civil liability - operations | |
SummaryOfInsuranceLineItems [Line Items] | |
Coverage | 5,000 |
Other | |
SummaryOfInsuranceLineItems [Line Items] | |
Coverage | R$ 14 |
27. Operating revenue (Details)
27. Operating revenue (Details) - BRL (R$) R$ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
SummaryOfOperatingRevenueLineItems [Line Items] | |||
Net operating revenue | R$ 17983654 | R$ 16085094 | R$ 14608233 |
Metropolitan region of São Paulo | |||
SummaryOfOperatingRevenueLineItems [Line Items] | |||
Net operating revenue | 11,849,776 | 10,295,509 | 8,636,926 |
Regional Systems | |||
SummaryOfOperatingRevenueLineItems [Line Items] | |||
Net operating revenue | 4,284,256 | 3,958,100 | 3,586,820 |
Sanitation services | |||
SummaryOfOperatingRevenueLineItems [Line Items] | |||
Net operating revenue | R$ 16134032 | R$ 14253609 | R$ 12223746 |
27. Operating revenue (Details
27. Operating revenue (Details 1) - BRL (R$) R$ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Operating Revenue | |||
Sanitation services | R$ 16134032 | R$ 14253609 | R$ 12223746 |
Construction revenue | 2,946,566 | 2,802,670 | 3,150,877 |
Sales tax | (1,035,051) | (916,808) | (757,619) |
Regulation, Control and Oversight Fee (TRCF) | (61,893) | (54,377) | (8,771) |
Net operating revenue | R$ 17983654 | R$ 16085094 | R$ 14608233 |
28. Operating costs and expen_3
28. Operating costs and expenses (Details) - BRL (R$) R$ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
SummaryOfOperatingCostsAndExpensesLineItems [Line Items] | |||
Operating costs | R$ 10137637 | R$ 9086456 | R$ 8778963 |
Selling expenses | (803,404) | (693,480) | (686,012) |
Bad debt expense, net of recoveries | (128,099) | (166,727) | (82,681) |
Administrative expenses | (1,187,844) | (996,877) | (1,098,990) |
Total | (12,256,984) | (10,943,540) | (10,646,646) |
Salaries, payroll charges and benefits | |||
SummaryOfOperatingCostsAndExpensesLineItems [Line Items] | |||
Operating costs | (1,938,265) | (1,959,539) | (1,841,571) |
Selling expenses | (270,549) | (289,378) | (305,440) |
Administrative expenses | (278,507) | (254,284) | (229,752) |
Total | (2,487,321) | (2,503,201) | (2,376,763) |
Pension obligations | |||
SummaryOfOperatingCostsAndExpensesLineItems [Line Items] | |||
Operating costs | (49,564) | (25,066) | (48,381) |
Selling expenses | (6,848) | (3,602) | (7,296) |
Administrative expenses | (138,207) | (141,758) | (171,830) |
Total | (194,619) | (170,426) | (227,507) |
Construction costs | |||
SummaryOfOperatingCostsAndExpensesLineItems [Line Items] | |||
Operating costs | (2,881,394) | (2,739,657) | (3,080,542) |
Total | (2,881,394) | (2,739,657) | (3,080,542) |
General supplies | |||
SummaryOfOperatingCostsAndExpensesLineItems [Line Items] | |||
Operating costs | (259,401) | (238,034) | (163,712) |
Selling expenses | (10,332) | (6,391) | (4,451) |
Administrative expenses | (3,216) | (4,881) | (5,675) |
Total | (272,949) | (249,306) | (173,838) |
Treatment supplies | |||
SummaryOfOperatingCostsAndExpensesLineItems [Line Items] | |||
Operating costs | (310,380) | (265,146) | (287,592) |
Total | (310,380) | (265,146) | (287,592) |
Outsourced services | |||
SummaryOfOperatingCostsAndExpensesLineItems [Line Items] | |||
Operating costs | (1,250,890) | (996,477) | (857,063) |
Selling expenses | (360,190) | (273,470) | (258,287) |
Administrative expenses | (197,357) | (204,728) | (183,746) |
Total | (1,808,437) | (1,474,675) | (1,299,096) |
Electricity | |||
SummaryOfOperatingCostsAndExpensesLineItems [Line Items] | |||
Operating costs | (1,140,160) | (956,840) | (794,352) |
Selling expenses | (1,333) | (1,154) | (762) |
Administrative expenses | (1,436) | (1,363) | (965) |
Total | (1,142,929) | (959,357) | (796,079) |
General expenses | |||
SummaryOfOperatingCostsAndExpensesLineItems [Line Items] | |||
Operating costs | (647,804) | (629,253) | (531,985) |
Selling expenses | (122,503) | (102,213) | (94,112) |
Administrative expenses | (407,250) | (232,288) | (302,113) |
Total | (1,177,557) | (963,754) | (928,210) |
Depreciation and amortization | |||
SummaryOfOperatingCostsAndExpensesLineItems [Line Items] | |||
Operating costs | (1,659,779) | (1,276,444) | (1,173,765) |
Selling expenses | (31,649) | (17,272) | (15,664) |
Administrative expenses | (88,666) | (98,825) | (112,468) |
Total | (1,780,094) | (1,392,541) | (1,301,897) |
Tax expenses | |||
SummaryOfOperatingCostsAndExpensesLineItems [Line Items] | |||
Administrative expenses | (73,205) | (58,750) | (92,441) |
Total | (73,205) | (58,750) | (92,441) |
Bad debt expense, net of recoveries | |||
SummaryOfOperatingCostsAndExpensesLineItems [Line Items] | |||
Bad debt expense, net of recoveries | (128,099) | (166,727) | (82,681) |
Total | R$ 128099 | R$ 166727 | R$ 82681 |
29. Financial income (expense_3
29. Financial income (expenses) (Details) - BRL (R$) R$ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
SummaryOfFinancialIncomeExpenseLineItems [Line Items] | |||
Financial expenses | R$ 1173425 | R$ 807967 | R$ 688280 |
Financial income | 372,842 | 446,302 | 326,244 |
Financial income (expenses), net before exchange rate changes | (800,583) | (361,665) | (362,036) |
Exchange rate changes, net | (233,098) | (902,671) | (96,018) |
Financial income (expenses), net | (1,033,681) | (1,264,336) | (458,054) |
Interest and charges on borrowings and financing - local currency | |||
SummaryOfFinancialIncomeExpenseLineItems [Line Items] | |||
Financial expenses | (331,367) | (332,149) | (289,780) |
Interest and charges on borrowings and financing - foreign currency | |||
SummaryOfFinancialIncomeExpenseLineItems [Line Items] | |||
Financial expenses | (165,421) | (171,686) | (119,100) |
Other financial expenses | |||
SummaryOfFinancialIncomeExpenseLineItems [Line Items] | |||
Financial expenses | (344,508) | (187,563) | (97,533) |
Income tax over international remittance | |||
SummaryOfFinancialIncomeExpenseLineItems [Line Items] | |||
Financial expenses | (17,650) | (19,779) | (17,901) |
Inflation adjustment on borrowings and financing | |||
SummaryOfFinancialIncomeExpenseLineItems [Line Items] | |||
Financial expenses | (44,802) | (66,183) | (62,787) |
Other inflation adjustments | |||
SummaryOfFinancialIncomeExpenseLineItems [Line Items] | |||
Financial expenses | (107,584) | (45,193) | (50,941) |
Interest and inflation adjustments on provisions | |||
SummaryOfFinancialIncomeExpenseLineItems [Line Items] | |||
Financial expenses | (162,093) | 14,586 | (50,238) |
Inflation adjustment gains | |||
SummaryOfFinancialIncomeExpenseLineItems [Line Items] | |||
Financial income | 91,180 | 105,952 | 89,010 |
Income on short-term investments | |||
SummaryOfFinancialIncomeExpenseLineItems [Line Items] | |||
Financial income | 151,622 | 187,094 | 195,992 |
Interest income | |||
SummaryOfFinancialIncomeExpenseLineItems [Line Items] | |||
Financial income | 150,054 | 175,939 | 57,166 |
Cofins and Pasep | |||
SummaryOfFinancialIncomeExpenseLineItems [Line Items] | |||
Financial income | (20,028) | (22,693) | (16,366) |
Other | |||
SummaryOfFinancialIncomeExpenseLineItems [Line Items] | |||
Financial income | 14 | 10 | 442 |
Exchange rate changes on borrowings and financing | |||
SummaryOfFinancialIncomeExpenseLineItems [Line Items] | |||
Exchange rate changes, net | (233,960) | (915,897) | (96,300) |
Exchange rate changes on assets | |||
SummaryOfFinancialIncomeExpenseLineItems [Line Items] | |||
Exchange rate changes, net | 863 | 13,235 | 336 |
Other exchange rate changes | |||
SummaryOfFinancialIncomeExpenseLineItems [Line Items] | |||
Exchange rate changes, net | R$ 1 | R$ 9 | R$ 54 |
30. Other operating income (e_3
30. Other operating income (expenses), net (Details) - BRL (R$) R$ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Other Operating Income Expenses Net | |||
Other operating income, net | R$ 75667 | R$ 93089 | R$ 75410 |
Other operating expenses | (94,415) | (64,498) | (81,089) |
Other operating income (expenses), net | R$ 18748 | R$ 28591 | R$ 5679 |
31. Commitments (Details)
31. Commitments (Details) R$ in Thousands | Dec. 31, 2019BRL (R$) |
SummaryOfCommitmentsLineItems [Line Items] | |
Contractual obligations - expenses | R$ 7926479 |
Contractual obligations - investments | 5,045,852 |
Total | 12,972,331 |
1 year | |
SummaryOfCommitmentsLineItems [Line Items] | |
Contractual obligations - expenses | 944,045 |
Contractual obligations - investments | 2,247,765 |
Total | 3,191,810 |
1-3 years | |
SummaryOfCommitmentsLineItems [Line Items] | |
Contractual obligations - expenses | 2,787,402 |
Contractual obligations - investments | 2,015,873 |
Total | 4,803,275 |
3-5 years | |
SummaryOfCommitmentsLineItems [Line Items] | |
Contractual obligations - expenses | 1,188,276 |
Contractual obligations - investments | 745,603 |
Total | 1,933,879 |
More than 5 years | |
SummaryOfCommitmentsLineItems [Line Items] | |
Contractual obligations - expenses | 3,006,756 |
Contractual obligations - investments | 36,611 |
Total | R$ 3043367 |
32. Supplemental cash flow in_3
32. Supplemental cash flow information (Details) - BRL (R$) R$ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Supplemental Cash Flow Information | |||
Total additions of contract assets | R$ 3532283 | R$ 3188943 | R$ 0 |
Total additions to intangible assets | 1,788,907 | 1,144,728 | 3,490,298 |
Items not affecting cash (see breakdown below) | (2,125,943) | (2,201,112) | (1,532,518) |
Total additions to intangible assets as per statement of cash flows | 3,195,247 | 2,132,559 | 1,957,780 |
Investment and financing operations affecting intangible assets but not cash: | |||
Interest capitalized in the year | 233,251 | 488,502 | 649,048 |
Contractors payable | 252,675 | 297,872 | 213,340 |
Program contract commitments | 35,817 | 149,974 | 95,126 |
Public Private Partnership - São Lourenço PPP | 10,591 | 273,737 | 501,591 |
Leases | 0 | 0 | 3,078 |
Performance agreements | 78,296 | 0 | 0 |
Right of use | 113,233 | 0 | 0 |
Construction margin | 65,172 | 63,013 | 70,335 |
Agreement with the Municipality of Santo André | 1,336,908 | 0 | 0 |
Agreement with the municipality of Guarulhos | 0 | 928,014 | 0 |
Total | R$ 2125943 | R$ 2201112 | R$ 1532518 |