| Financial instruments | 19 Financial instruments Financial assets are recognized
when the Company assumes contractual rights of receiving cash or other financial assets of agreements to which it is a party. Financial
assets are derecognized when the rights to receive cash linked to the financial asset expire or risks and benefits were substantially
transferred to third parties. Assets and liabilities are recognized when rights and/or obligations are retained by the Company. Financial liabilities are
recognized when the Company assume contractual liabilities for settlement in cash or assumption of third-party obligations through
a contract to which it is a party. The financial liabilities are initially recognized at fair value and derecognized when settled,
extinguished, or expired. Purchases or sales of financial
assets requiring delivery of assets within a term defined by regulation or agreement in the market (negotiations under normal conditions)
are recognized on the trade date, i.e., on the date the Company undertakes to buy or sell the asset.
19.1 Classification and measurement of financial
assets and liabilities Pursuant to IFRS 9, on initial
recognition, a financial asset is classified as measured: at amortized cost, at fair value through other comprehensive income or
at fair value through income. The classification of financial assets pursuant to IFRS 9 is usually based on the business model
in which a financial asset is managed and its contractual cash flow characteristics. Embedded derivatives in which the main contract
is a financial asset within the scope of the standard are never split. Instead, the hybrid financial instrument is assessed for
classification as a whole. A financial asset is measured
at amortized cost if it meets both of the following conditions and is not designated as measured at fair value through income:
• it is maintained in a business model whose objective is to keep financial assets to receive contractual cash flows; and
• its contractual terms generate, on specific dates, cash flows related to the payment of principal and interest on the outstanding principal amount. A debt instrument is measured
at fair value through other comprehensive income, if it meets both of the following conditions and is not designated as measured
at fair value through income:
• it is maintained in a business model whose objective is achieved both by receipt of contractual cash flows and sale of financial assets; and
• its contractual terms generate, on specific dates, cash flows related to the payment of principal and interest on the outstanding principal amount. At the initial recognition
of an investment in an equity instrument that is not held for trading, the Company may irrevocably opt to report subsequent alterations
in the fair value of investment under other comprehensive income. This option is made on each individual investment. All financial assets not classified
as measured at amortized cost or at fair value through other comprehensive income, as described above, are classified as fair value
through income. This includes all derivative financial assets. At initial recognition, the Company may irrevocably designate a
financial asset that otherwise meets the requirements to be measured at amortized cost, at fair value through other comprehensive
income or fair value through income if this significantly eliminates or reduces an accounting mismatch that otherwise would arise
(option of fair value available in IFRS 9). A financial asset (unless
these are trade receivables without a significant financing component which is firstly measured by the price of the transaction)
is initially measured by fair value, accrued, for an item not measured at fair value through income of transaction costs which
are directly attributable to its acquisition.
• Financial assets measured at fair value through income
• Financial assets at amortized cost
• Financial assets at fair value through other comprehensive income
19.2 Derecognition of financial assets and
liabilities A financial asset (or, where
applicable, part of a financial asset or part of a group of similar financial assets) is derecognized when:
• The rights of cash flows receivables expire; and
• The Company transfers its rights to receive cash flows from an asset or assume an obligation of fully paying the cash flows received to a third party, under the terms of a transfer agreement; and (a) the Company substantially transferred all the risks and benefits related to the asset; or (b) the Company neither transferred nor substantially retained all the risks and benefits relating to the asset, but transferred its control. When the Company assigns its
rights to receive cash flows from an asset or enters into a transfer agreement without having substantially transferred or retained
all of the risks and benefits relating to the asset nor transferred the asset control, the asset is maintained and the related
liability is recognized. The asset transferred and related liability are measured to reflect the rights and obligations retained
by the Company. A financial liability is derecognized
when the liability underlying obligation is settled, canceled, or expired. When a financial liability
is replaced by another of the same creditor, through substantially different terms, or terms of an existing liability are substantially
modified, this replacement or modification is treated as the derecognition of original liability and recognition of a new liability,
and the difference between respective carrying amounts is recognized in the statement of operations.
19.3 Offset of financial instruments The financial assets and liabilities
are offset and reported net in consolidated financial statements, if, and only if, amounts recognized can be offset and with the
intention of settlement on a net basis, or realize assets and settle liabilities, simultaneously.
19.4 Derivative financial instruments The Company uses derivative
financial instruments to limit the exposure to variation unrelated to the local market, such as interest rate swaps and exchange
rate variation swaps. These derivative financial instruments are initially recognized at fair value on the date on which the derivative
contract is executed and subsequently re-measured at fair value at the end of the reporting period. Derivatives are recorded as
financial assets when the fair value is positive and as financial liabilities when the fair value is negative. Gains or losses
resulting from changes in the fair value of derivatives are directly recorded in the statement of operations. At the inception of a hedge
relationship, the Company formally designates and documents the hedge relationship to which it intends to apply hedge accounting
and its objective and risk management strategy for contracting the hedge. The documentation includes identification of the hedging
instrument, the hedged item or transaction, the nature of the risk being hedged and how the Company will assess the effectiveness
of the changes in the hedging instrument’s fair value in offsetting the exposure to changes in the fair value of the hedged
item or cash flow attributable to the hedged risk. These hedges are expected to be highly effective in offsetting changes in the
fair value or cash flow and are assessed on an ongoing basis to determine if they have been highly effective throughout the periods
for which they were designated. The following are recognized as
fair value hedges:
• The change in the fair value of a derivative financial instrument classified as fair value hedging is recognized as financial result. The change in the fair value of the hedged item is recorded as a part of the carrying amount of the hedged item and is recognized in the statement of operations; and
• In
order to calculate the fair value, debts and swaps are measured through rates available in the financial market and projected
up to their maturity date. The discount rate used in the calculation by the interpolation method for borrowings denominated
in foreign currency is developed through CDI curves, free coupon and DI, indexes disclosed by the B3, whereas for borrowings
denominated in Reais, the Company uses the DI curve, an index published by the CETIP (Securities Custodial and Clearing Center)
and calculated through the exponential interpolation method. The
Company uses financial instruments only to hedge identified, risks limited to 100% of the value of these risks. Derivative instruments
transactions are exclusively used to reducing the exposure to the risk of changes in interest rates and foreign currency fluctuation
and maintaining a balanced capital structure
19.5 Cash flow hedge Derivative instruments are recorded
as cash flow hedge, using the following principles:
• The effective portion of the gain or loss on the hedge instrument is recognized directly in shareholders’ equity in other comprehensive income. In case the hedge relationship no longer meets the hedging ratio but the objective of management risk remains unchanged, the Company should “rebalance” the hedge ratio to meet the eligibility criteria.
• Any remaining gain or loss on the hedge instrument (including arising from the "rebalancing" of the hedge ratio) is ineffective, and therefore should be recognized in profit or loss.
• Amounts recorded in other comprehensive income are immediately transferred to the statement of operations together with the hedged transaction by affecting the statement of operations, for example, when the hedge financial income or expense is recognized or when a forecast sale occurs. When the hedged item is the cost of a non-financial asset or liability, the amounts recorded in equity are transferred to the initial carrying amount of the non-financial asset or liability.
• The Company should prospectively discontinue hedge accounting only when the hedge relationship no longer meets the qualification criteria (after taking into account any rebalancing of the hedge relationship).
• If the expected transaction or firm commitment is no longer expected, amounts previously recognized in shareholders’ equity are transferred to the statement of operations. If the hedging instrument expires or is sold, terminated or exercised without replacement or rollover, or if its hedge classification is revoked, gains or losses previously recognized in comprehensive income remain deferred in equity in other comprehensive income until the expected transaction or firm commitment affect the profit or loss.
19.6 Impairment of financial assets IFRS 9 replaces the “incurred
loss” model of IAS 39 with an expected loan loss model. The new impairment loss model applies to financial assets measured
at amortized cost, contractual assets, and debt instruments measured at fair value through other comprehensive income but does
not apply to investments in equity instruments (shares) or financial assets measured at fair value through income. Pursuant to IFRS 9, provisions for losses are measured
at one of the following bases:
• Loan losses expected for 12 months (general model): these are loan losses resulting from possible default events within 12 months after the end of the reporting period, and subsequently, in case of a deterioration of credit risk for the entire life of the instrument.
• Loan losses expected for entire life (simplified model): these are loan losses resulting from all possible default events over the expected life of a financial instrument.
• Practical expedient: these are loan losses expected and consistent with reasonable and sustainable information available, at the end of the reporting period on past events, current conditions, and estimates of future economic conditions that allow verifying probable future loss based on the historical loan loss occurred in accordance with instruments maturity. The Company measures provisions
for trade receivable losses and other receivables and contractual assets through an amount corresponding to the loan loss expected
for the entire life, and for trade receivables, whose receivables portfolio is fragmented, rents receivable, the practical expedient
is applied by adopting a matrix of losses for each maturity level. When determining whether the
credit risk of a financial asset significantly increased from initial recognition, and when estimating the expected loan losses,
the Company considers reasonable and sustainable information which is relevant and available without cost or excessive effort.
This includes qualitative and quantitative information and analyses, based on the Company’s historical experience, the assessment
of credit, and considering projection information. The Company assumes that the
credit risk in a financial asset significantly increased if it is more than 90 days overdue. The Company considers a financial asset in default when:
• it is unlikely that the debtor will fully pay its loan obligations to the Company, without resorting to collateral (if any); or
• the financial asset is more than 90 days overdue. The Company determines the
credit risk of a debt instrument by analyzing the payment history, financial, and current macroeconomic conditions of counterparty
and assessment of rating agencies, where applicable, thereby evaluating each instrument, individually. The maximum period considered
in the estimate of expected receivable loss is the maximum contractual period during which the Company is exposed to the credit
risk.
• Measurement
of expected loan losses Expected loan losses are discounted
by the effective interest rate of a financial asset.
• Financial assets with credit recovery problems
• Reporting of impairment loss For financial instruments
measured at fair value through other comprehensive income, the provision for losses is recognized in other comprehensive income,
instead of reducing the asset’s carrying amount. Impairment losses related
to trade receivables and other receivables, including contractual assets, are reported separately in the statement of operations
and other comprehensive income. Losses of recoverable amounts from other financial assets are stated under "selling expenses”.
• Trade receivables and contractual assets Positions within each group were segmented based
on common characteristics of credit risk, such as:
• Level of credit risk and loss history for wholesale clients and property lease; and
• Status of default risk and loss history for credit card companies and other clients The main financial instruments and their carrying
amounts, by category, are as follows:
Carrying
amounts
Notes 2020 2019
Financial
assets
Amortized
cost
Related parties - assets 12 178 97
Accounts receivable and other accounts receivable 8
and 9 117 686
Other assets 51
Fair
value through income
Cash and cash equivalents 7 3,532 5,026
Financial instruments - fair value hedge- long position 19 68 40
Other assets 2
Fair
value through other comprehensive income
Accounts receivable with credit card companies and sales tickets 8 99 48
Other assets 0 — 19
Financial
liabilities
Other
financial liabilities - amortized cost
Related parties - liabilities 12 (41 ) (152 )
Trade payables 18 (5,058 ) (9,770 )
Financing through acquisition of assets (34 ) (101 )
Borrowings and financing 19.13 (897 ) (843 )
Debentures 19.13 (6,599 ) (7,883 )
Lease liabilities 21.2 (2,776 ) (3,751 )
Fair
value through income
Borrowings and financing, including derivatives 19.13 (335 ) (84 )
Financial instruments - Fair value hedge - short position — (11 )
Financial instruments on suppliers - Fair value hedge – Short — (8 )
Grupo Disco put option 19.10 — (466 )
Net
exposure (11,746 ) (17,100 ) The fair value of other financial instruments detailed
in table above approximates the carrying amount based on the existing terms and conditions. The financial instruments measured
at amortized cost, the related fair values of which differ from the carrying amounts, are disclosed in note 19.10.
19.7 Considerations on risk factors that
may affect the businesses of the Company
19.7.1 Credit Risk
· Cash equivalents: In order to minimize credit risks, the Company adopts investments policies at financial institutions approved by the Company’s Financial Committee, also taking into consideration monetary limits and financial institution evaluations, which are regularly updated.
· Trade receivables: Credit risk related to trade receivables is minimized by the fact that a large portion of sales are paid with credit cards, and the Company sells these receivables to banks and credit card companies, aiming to strengthen working capital. The sales of receivables result in derecognition of the accounts receivable due to the transfer of the credit risk, benefits and control of such assets. Additionally, regarding the trade receivables collected in installments, the Company monitor the risk through the credit concession and by periodic analysis of the provision for losses. The
Company also has counterparty risk related to derivative instruments, which is mitigated by the Company carrying out transactions,
according to policies approved by governance boards. There
are no amounts receivable that are individually, higher than 5% of accounts receivable or sales, respectively.
19.7.2 Interest rate risk The Company obtains borrowings
and financing with major financial institutions for cash needs for investments. As a result, the Company is mainly exposed to relevant
interest rates fluctuation risk, especially in view of derivatives liabilities (foreign currency exposure hedge) and CDI Indexed
debts. The balance of cash and cash equivalents, indexed to CDI, partially offsets the interest rate risk.
19.7.3 Foreign currency exchange rate risk The Company is exposed to exchange
rate fluctuations, which may increase outstanding balances of foreign currency-denominated borrowings. The Company uses derivatives,
such as swaps, aiming to mitigate the foreign currency exchange rate risk, converting the cost of debt into domestic currency and
interest rates.
19.7.4 Capital risk management The main objective of the Company’s
capital management is to ensure that the Company maintains its credit rating and a well-balanced equity ratio, in order to support
businesses and maximize shareholder value. The Company manages the capital structure and makes adjustments taking into account
changes in the economic conditions. The Company’s capital structure
is as follows:
As
of December 31,
2020 2019
Borrowings and financing (7,831 ) (8,821 )
(-) Cash and cash equivalents 3,532 5,026
(-) Derivative financial instruments 68 40
Net debt (4,231 ) (3,755 )
Shareholders´ equity (1,347 ) (9,701 )
% Net debt over shareholders´ equity 314 % 39 %
19.7.5 Liquidity risk management The Company manages liquidity
risk through the daily analysis of cash flows and maturities of financial assets and liabilities. The table below summarizes
the aging profile of the Company’s financial liabilities as of December 31, 2020.
Less
than 1 year 1
to 5 years More
than 5 years Total
Borrowings
and financing 318 1,037 18 1,373
Debentures 2,018 5,392 — 7,410
Derivative
financial instruments (61 ) (11 ) (2 ) (74 )
Lease
liabilities 423 1,918 2,913 5,254
Trade
payable 5,058 — — 5,058
Total 7,756 8,336 2,929 19,021 The table above was prepared
considering the undiscounted cash flows of financial assets and liabilities based on the earliest date the Company may be required
to make a payment or be eligible to receive a payment. To the extent that interest rates are floating, the non-discounted amount
is obtained based on interest rate curves in the six months ended on December 31, 2020. Therefore, certain balances are not
consistent with the balances reported in the balance sheets.
19.8 Derivative financial instruments Swap transactions are designated
as fair value hedges, with the objective to hedge the exposure to changes in foreign exchange rates and fixed interest rates (U.S.
dollars), converting the debt into domestic interest rates and currency. On December 31, 2020, the
notional amount of these contracts was R$407 (R$106 on December 31, 2019). These transactions are usually contracted under the
same term of amounts and carried out with a financial institution of the same economic group, observing the limits set by Management. According to the Company’s
treasury policies, swaps cannot be contracted with restrictions (“caps”), margins, as well as return clauses, double
index, flexible options or any other types of transactions different from traditional “swap” and “forwards”
transactions to hedge against debts. The Company’s internal
controls were designed to ensure that transactions executed conform to the treasury policy. The Company calculates the
effectiveness of hedge transactions at the inception date and on a continuing basis. Hedge transactions contracted in the year
ended December 31, 2020 were effective in relation to the covered risk. For derivative transactions that qualify as hedge accounting,
the debt which is the hedged item, is also adjusted at fair value.
Notional
value Fair
value
2020 2019 2020 2019
Swap
with hedge accounting
Hedge purpose (debt) 301 750 335 84
Long position
Fixed rate 301 95 11 84
USD + Fixed 106 655 57 —
Short position (407 ) (698 ) — (73 )
Net hedge position — 52 68 11 Realized and unrealized gains
and losses on these contracts during the year ended December 31, 2020, are recorded as financial income or expenses and the balance
receivable at fair value is R$68 (R$11 as of December 31, 2019). Assets are recorded as “financial instruments” and
liabilities as “borrowings and financing”. The effects of the fair value hedge recorded in the statement of operations for the year ended December 31, 2020, resulted in a gain of R$68, recorded under debt of cost, note 28 (gain of R$30 as of December 31, 2019 and gain of R$69 as of December 31, 2018).
19.8.1 Fair values of derivative financial instruments Fair value is the amount for
which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm’s length transaction. Fair values are calculated
using projected the future cash flow, using the CDI curves and discounting to present value, using CDI market rates for swap both
disclosed by the B3. The fair value of exchange
coupon swaps versus CDI rate was determined based on market exchange rates effective at the date of the financial statements and
projected based on the currency coupon curves. In order to calculate the
coupon of foreign currency indexed-positions, the straight-line convention - 360 consecutive days was adopted and to calculate
the coupon of CDI indexed-positions, the exponential convention - 252 business days was adopted.
19.9 Sensitivity analysis of financial instruments According to Management’s
assessment, the most probable scenario is what the market has been estimating through market curves (currency and interest rates)
of the B3, on the maturity dates of each transaction. Therefore, in the probable
scenario (I) there is no impact on the fair value of financial instruments. For scenarios (II) and (III), for the exclusive effect,
a deterioration from 25% to 50% was taken into account, respectively, on risk variables, up to one year of financial instruments. For a probable scenario, the
weighted exchange rate was R$5.64 on the due date, and the interest rate weighted was 1.96% per year. In the case of derivative
financial instruments (aiming at hedging the financial debt), changes in scenarios are accompanied by respective hedges, indicating
that the effects are not significant. The Company disclosed the
net exposure of derivative financial instruments, each of the scenarios mentioned above in the sensitivity analysis as follows:
Market
projections
Transactions Risk Balance
at 2020 Scenario
(I) Scenario
(II) Scenario
(III)
Borrowings
and Financing CDI
+ 3.58 per year (910 ) (937 ) (944 ) (951 )
Fixed
rate swap contract (short position) CDI
+ 0.04 per year (62 ) (176 ) (179 ) (182 )
Foreign
exchange swap contract (short position) CDI
+0.59 per year (206 ) (210 ) (212 ) (214 )
Debentures CDI
+ 2.07 per year (6,573 ) (6,763 ) (6,811 ) (6,858 )
Total
net effect (loss) (7,751 ) (8,086 ) (8,146 ) (8,205 )
Cash
equivalents 96.96%
of CDI 3,532 3,611 3,630 3,650
Net
exposure (loss): (4,219 ) (4,475 ) (4,516 ) (4,555 )
Net
effect (loss): (256 ) (297 ) (336 )
19.10 Fair value measurement The Company discloses the
fair value of financial instruments measured at fair value and of financial instruments measured at amortized cost, the fair value
of which differ from the carrying amount, in accordance with IFRS13, which refer to the requirements of measurement and disclosure.
The fair value hierarchy levels are defined below: Level 1: Quoted (unadjusted)
market prices in active markets for assets or liabilities. Level 2: Valuation techniques
for which the lowest level inputs that is significant to the fair value measurement is directly or indirectly observable. Level 3: Valuation techniques
for which the lowest level input that is significant to the fair value measurement is unobservable. The data used in fair value
models are obtained, whenever possible, from observable markets or from information in comparable transactions in the market, the
benchmarking of the fair value of similar financial instruments, the analysis of discounted cash flows or other valuation models.
Judgment is used in the determination of assumptions in relation to liquidity risk, credit risk and volatility. Changes in assumptions
may affect the reported fair value of financial instruments. In the case of financial
instruments not actively negotiated, the fair value is based on valuation techniques defined by the Company and compatible with
usual market practices. These techniques include the use of recent market operations between independent parties, the
benchmarking of similar financial instruments’ fair value, the analysis of discounted cash flows, or other valuation
models. The fair values of cash and
cash equivalents, trade receivables and trade payables approximate their carrying amounts. The table below sets forth
the fair value hierarchy of financial assets and liabilities measured at fair value of financial instruments measured at amortized
cost, for which the fair value has been disclosed in the consolidated financial statements:
Carrying
amount Fair
value
2020 2019 2020 2019 Level
(*)
Trade receivables with credit cards 99 48 99 48 2
Swaps of annual rates between currencies 57 — 57 — 2
Interest rate swaps 11 40 11 10 2
Loans and financing (fair value) (335 ) (95 ) (335 ) (84 ) 2
Loans and financing (amortized cost) (7,496 ) (8,726 ) (6,529 ) (8,056 ) 2
Grupo Disco put option (*) — (466 ) — (466 ) 3
(7,664 ) (9,199 ) (6,697 ) (8,548 ) (*) Non-controlling shareholders
of Group Disco del Uruguay S.A., Éxito’s subsidiary have an exercisable put option based on a formula that uses data
such as net income, EBITDA - earnings before interest, taxes, depreciation and amortization - and net debt, in addition to fixed
amounts determined in the contract and the exchange variation applicable for conversion to the functional currency. This put option
is presented in “Acquisition of non-controlling interest”. There was no change between
the fair value measurements hierarchy levels during the year ended December 31, 2020. Cross-currency and interest
rate swaps and borrowings and financing are classified in level 2 since the fair value of such financial instruments was determined
based on readily observable inputs, such as expected interest rate and current and future foreign exchange rate.
19.11 Position of operations with derivative
financial instruments The Company has derivative
contracts with the following financial institutions: Itaú BBA, Bradesco, Banco Tokyo, Scotiabank, Credit Agricole Corporate,
Banco de Bogotá, BBVA, BNP, BBVA, Davivenda, Bancolombia, HSBC, and Corficolombia. The outstanding derivative
financial instruments are presented in the table below:
As
of December 31,
Description
Risk Notional
(millions) Due
date 2020 2019
Debt
USD – BRL US$ 50 2021 57 —
Currency
swaps registered at the Clearing House for the Custody and Financial Settlement of Securities - CETIP
Interest
rate swaps registered at CETIP
Fixed
rate x CDI R$ 54 2027 5 5
Fixed rate x CDI R$ 52 2027 6 5
Derivatives
- Fair value hedge - Brazil 68 10
Debt
USD – COP — 2020 — 20
USD – COP US$ 2 2022 — 1
Interest rate - COP COP 49,950 2020 — (1 )
Interest rate - COP COP 383,235 2021 — (1 )
Suppliers
USD – COP USD 24 2020 — (8 )
Derivatives
- Éxito Group — 11 19.12 19.13
As
of December 31,
Weighted
average rate 2020 2019
Current
Debentures and promissory notes
Debentures CDI + 2.44 per year 1,864 1,189
Borrowing costs (24 ) (33 )
1,840 1,156
Borrowing and financing in domestic currency
BNDES 3.72% per year — 7
Working capital TR + 9.80% 12 14
Working capital CDI + 1.97 per year 9 —
Borrowing costs (5 ) (3 )
Total domestic currency 16 18
In foreign currency
Working capital USD + 2.35% per year 264 287
Swap contracts CDI +0.59 per year (57 ) —
Swap contracts IBR 3M+3.7% — (18 )
Total foreign currency 207 269
Total current 2,063 1,443
As
of December 31,
Weighted
average rate 2020 2019
Non-current
Debentures
and promissory notes
Debentures CDI
+ 2.44 per year 4,780 6,773
Borrowing
costs (21 ) (46 )
4,759 6,727
Borrowings
and financing domestic currency
BNDES 4.31%
per year — 16
Working
capital TR
+ 9.80% 60 70
Working
capital CDI
+ 1.97 per year 901 500
Swap
contracts CDI
+ 0.04 per year (11 ) (10 )
Borrowing
costs (9 ) (10 )
Total
domestic currency 941 566
In
foreign currency
Working
capital IBR
3M+3.7% — 46
Borrowing
costs — (1 )
Total
foreign currency — 45
Total
non-current 5,700 7,338
Total 7,763 8,781
Current
assets 57 29
Non-current
assets 11 11
Current
liabilities 2,120 1,472
Non-current
liabilities 5,711 7,349 19.14
Rollforward
Amounts
Balance as of January 1, 2018 471
Additions 417
Accrued interest 30
Swap contracts (50 )
Mark-to-Market 10
Exchange rate and monetary variation 63
Interest amortization (24 )
Principal amortization (175 )
Swap amortization (7 )
IFRS 16 - related adjustment (9 )
Balance as of December 31, 2018 726
Funding - working capital 9,395
Interest provision 246
Swap contracts (16 )
Mark-to-market (46 )
Exchange rate and monetary variation (29 )
Borrowing costs 21
Interest amortization (116 )
Principal amortization (6,102 )
Swap amortization 95
Swap amortization 4,527
Conversion adjustment to reporting currency 80
Balance as of December 31, 2019 8,781
Funding - working capital 2,852
Interest provision 486
Swap contracts (60 )
Mark-to-market 12
Exchange rate and monetary variation 57
Debt modification impact 71
Borrowing costs 42
Interest amortization (549 )
Principal amortization (2,543 )
Swap amortization 13
Conversion adjustment to reporting
currency 172
Discontinued
operations (1,571 )
Balance as of December 31, 2020 7,763
19.15 Schedule of non-current maturities
Maturity Amounts
From 1 to 2 years 2,484
From 2 to 3 years 2,790
From 3 to 4 years 224
From 4 to 5 years 224
More than 5 years 8
Total 5,730
Borrowing Cost (30 )
Total 5,700
19.16 Debentures and promissory notes
Data As
of December 31,
Type Issue
amount Outstanding
Debentures (units) Issuance Maturity Annual
financial charges Unit
price (in Reais) 2020 2019
First Issue of Promissory Notes - 1st series non-preemptive right 50 1 7/4/2019 7/3/2020 CDI + 0.72% per year — — 52
First Issue of Promissory Notes - 2nd series non-preemptive right 50 1 7/4/2019 7/5/2021 CDI + 0.72% per year 52,998,286 53 52
First Issue of Promissory Notes - 3rd series non-preemptive right 50 1 7/4/2019 7/4/2022 CDI + 0.72% per year 52,998,286 53 52
First Issue of Promissory Notes - 4th series non-preemptive right 250 5 7/4/2019 7/4/2023 CDI + 0.72% per year 52,998,286 267 258
First Issue of Promissory Notes - 5th series non-preemptive right 200 4 7/4/2019 7/4/2024 CDI + 0.72% per year 52,998,286 214 206
First Issue of Promissory Notes - 6th series non-preemptive right 200 4 7/4/2019 7/4/2025 CDI + 0.72% per year 52,998,286 213 206
First Issue of Debentures- 1st series non-preemptive right 2,000 200,000 9/4/2019 8/20/2020 CDI + 1.60% per year — — 1,001
First Issue of Debentures - 2nd series non-preemptive right 2,000 200,000 9/4/2019 8/20/2021 CDI + 1.74% per year 876 1,762 2,044
First Issue of Debentures - 3rd series non-preemptive right 2,000 200,000 9/4/2019 8/20/2022 CDI + 1.95% per year 1,004 2,033 2,045
First Issue of Debentures - 4th series non-preemptive right 2,000 200,000 9/4/2019 8/20/2023 CDI + 2.20% per year 1,005 2,049 2,046
Borrowing Cost (45 ) (79 )
6,599 7,883
Current liabilities 1,840 1,156
Non-current liabilities 4,759 6,727 The Company issues debentures
to strengthen its working capital, ma |
