Exhibit 99.1
Vinci Partners
Investimentos Ltda.
Report of independent registered
public accounting firm
Report of independent registered
public accounting firm
To the Quotaholders of Vinci Partners Investimentos Ltda.
Opinion on the financial statements
We have audited the accompanying consolidated balance sheets of Vinci Partners Investimentos Ltda. and its subsidiaries (the "Company") as of December 31, 2020 and December 31, 2019, and the related consolidated statements of income, comprehensive income, changes in equity and cash flows for each of the three years in the period ended December 31, 2020, including the related notes (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and December 31, 2019, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2020 in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.
Basis for opinion
These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
Rio de Janeiro, March 5, 2021
/s/ PricewaterhouseCoopers
Auditores Independentes
We have served as the Company's auditor since 2010.
F-2
Vinci Partners Investimentos Ltda.
Consolidated balance sheets
All amounts in thousands of reais
Assets | Note | 12/31/2020 | 12/31/2019 | |||||||
Current assets | ||||||||||
Cash and cash equivalents | 5(d) | 83,449 | 3,896 | |||||||
Cash and bank deposits | 5(d) | 13,096 | 3,564 | |||||||
Financial instruments at fair value through profit or loss | 5(d) | 70,353 | 332 | |||||||
Financial instruments at fair value through profit or loss | 5(c) | 8,253 | 85,944 | |||||||
Trade receivables | 5(a) | 47,978 | 58,808 | |||||||
Sub-leases receivable | 10 | 2,963 | 2,883 | |||||||
Taxes recoverable | 1,153 | 789 | ||||||||
Other assets | 6 | 12,383 | 5,044 | |||||||
Total current assets | 156,179 | 157,364 | ||||||||
Non-current assets | ||||||||||
Financial instruments at fair value through profit or loss | 5(c) | 31,596 | 24,164 | |||||||
Trade receivables | 5(a) | 27,545 | 15,961 | |||||||
Sub-leases receivable | 10 | - | 2,717 | |||||||
Taxes recoverable | 134 | 513 | ||||||||
Deferred taxes | 18 | 4,568 | 2,207 | |||||||
Other assets | 6 | 1,540 | 1,330 | |||||||
65,383 | 46,892 | |||||||||
Property and equipment | 8 | 15,043 | 16,412 | |||||||
Right of use - Leases | 10 | 90,478 | 88,384 | |||||||
Intangible assets | 9 | 1,441 | 2,720 | |||||||
172,345 | 154,408 | |||||||||
TOTAL | 328,524 | 311,772 |
The accompanying notes are an integral part of these consolidated financial statements.
F-3
Vinci Partners Investimentos Ltda.
Consolidated balance sheets
All amounts in thousands of reais
Liabilities and equity | Note | 12/31/2020 | 12/31/2019 | |||||||
Current liabilities | ||||||||||
Trade payables | 1,039 | 326 | ||||||||
Leases | 10 and 5(e) | 19,828 | 17,738 | |||||||
Accounts payable | 11 | 125,795 | 37,669 | |||||||
Labor and social security obligations | 12 | 40,724 | 30,948 | |||||||
Taxes and contributions payable | 13 | 22,878 | 16,297 | |||||||
Total current liabilities | 210,264 | 102,978 | ||||||||
Non-current liabilities | ||||||||||
Accounts payable | 11 | 33 | 33 | |||||||
Leases | 10 and 5(e) | 86,371 | 85,153 | |||||||
Deferred taxes | 18 | 12,620 | 8,883 | |||||||
99,024 | 94,069 | |||||||||
Equity | 14 | |||||||||
Quota capital | 8,730 | 8,595 | ||||||||
Retained earnings | - | 91,430 | ||||||||
Other reserves | 10,491 | 8,119 | ||||||||
19,221 | 108,144 | |||||||||
Non-controlling interests in the equity of subsidiaries | 15 | 6,581 | ||||||||
Total equity | 19,236 | 114,725 | ||||||||
Total liabilities and equity | 328,524 | 311,772 |
The accompanying notes are an integral part of these consolidated financial statements.
F-4
Vinci Partners Investimentos Ltda.
Consolidated statements of income
Years ended December 31
All amounts in thousands of reais unless otherwise stated
Statements of Income | Note | 2020 | 2019 | 2018 | ||||||||||
Net revenue from services rendered | 15 | 339,892 | 296,717 | 172,204 | ||||||||||
General and administrative expenses | 16 | (124,245 | ) | (113,287 | ) | (90,755 | ) | |||||||
Operating profit | 215,647 | 183,430 | 81,449 | |||||||||||
Finance income | 17 | 10,050 | 21,161 | 8,723 | ||||||||||
Finance expenses | 17 | (13,097 | ) | (12,476 | ) | (12,472 | ) | |||||||
Finance profit/(loss), net | (3,047 | ) | 8,865 | (3,749 | ) | |||||||||
Profit before income taxes | 212,600 | 192,115 | 77,700 | |||||||||||
Income taxes | 18 | (43,446 | ) | (36,483 | ) | (21,022 | ) | |||||||
Profit for the year | 169,154 | 155,632 | 56,678 | |||||||||||
Attributable to the quotaholders of the parent company | 170,199 | 151,373 | 56,613 | |||||||||||
Attributable to non-controlling interests | (1,045 | ) | 4,259 | 65 | ||||||||||
Basic and diluted earnings per quota | 19.60 | 17.41 | 6.54 |
The accompanying notes are an integral part of these consolidated financial statements.
F-5
Vinci Partners Investimentos Ltda.
Consolidated statements of comprehensive income
Years ended December 31
All amounts in thousands of reais
2020 | 2019 | 2018 | ||||||||||
Profit for the year | 169,154 | 155,632 | 56,678 | |||||||||
Other comprehensive income | ||||||||||||
Items that may be reclassified to profit or loss: | ||||||||||||
Foreign exchange variation of investee located abroad | ||||||||||||
Vinci Financial Ventures (VF2) GP | - | 16 | 39 | |||||||||
Vinci Capital Partners GP Limited | 69 | 326 | 670 | |||||||||
Vinci USA LLC | 2,284 | (1 | ) | (2 | ) | |||||||
Vinci Capital Partners F III GP Limited | 19 | 2 | 12 | |||||||||
Total comprehensive income for the year | 171,526 | 155,975 | 57,397 | |||||||||
Attributable to: | ||||||||||||
Quotaholders of the parent company | 172,571 | 151,716 | 57,332 | |||||||||
Non-controlling interests | (1,045 | ) | 4,259 | 65 | ||||||||
171,526 | 155,975 | 57,397 |
The accompanying notes are an integral part of these consolidated financial statements.
F-6
Vinci Partners Investimentos Ltda.
Consolidated statements of changes in equity
All amounts in thousands of reais
Quota | Retained | Other | Treasury | Non-controlling | Total | |||||||||||||||||||||||
capital | earnings | reserves | quotas | Total | interests | equity | ||||||||||||||||||||||
At January 01, 2018 | 8,550 | 38,857 | 7,057 | - | 54,464 | 1,635 | 56,099 | |||||||||||||||||||||
Profit for the year | - | 56,613 | - | - | 56,613 | 65 | 56,678 | |||||||||||||||||||||
Other comprehensive income: | ||||||||||||||||||||||||||||
Foreign exchange variation of investee located abroad | - | - | 719 | - | 719 | - | 719 | |||||||||||||||||||||
Capital increase | 270 | - | - | - | 270 | 266 | 536 | |||||||||||||||||||||
Allocation of profit: | ||||||||||||||||||||||||||||
Dividends | - | (45,759 | ) | - | - | (45,759 | ) | (207 | ) | (45,966 | ) | |||||||||||||||||
At December 31, 2018 | 8,820 | 49,711 | 7,776 | - | 66,307 | 1,759 | 68,066 | |||||||||||||||||||||
Profit for the year | - | 151,373 | - | - | 151,373 | 4,259 | 155,632 | |||||||||||||||||||||
Other comprehensive income: | ||||||||||||||||||||||||||||
Foreign exchange variation of investee located abroad | - | - | 343 | - | 343 | - | 343 | |||||||||||||||||||||
Capital increase | - | - | - | - | - | 580 | 580 | |||||||||||||||||||||
Treasury quotas bought | - | - | - | (225 | ) | (225 | ) | - | (225 | ) | ||||||||||||||||||
Treasury quotas canceled | (225 | ) | - | - | 225 | - | - | - | ||||||||||||||||||||
Allocation of profit: | ||||||||||||||||||||||||||||
Dividends | - | (109,654 | ) | - | - | (109,654 | ) | (17 | ) | (109,671 | ) | |||||||||||||||||
At December 31, 2019 | 8,595 | 91,430 | 8,119 | - | 108,144 | 6,581 | 114,725 | |||||||||||||||||||||
Profit for the year | - | 170,199 | - | - | 170,199 | (1,045 | ) | 169,154 | ||||||||||||||||||||
Other comprehensive income: | ||||||||||||||||||||||||||||
Foreign exchange variation of investee located abroad | - | - | 2,372 | - | 2,372 | - | 2,372 | |||||||||||||||||||||
Capital increase (deacrease) | 135 | - | - | - | 135 | (900 | ) | (765 | ) | |||||||||||||||||||
Acquisition of non-controlling quotas | (1,183 | ) | (1,183 | ) | ||||||||||||||||||||||||
Allocation of profit: | ||||||||||||||||||||||||||||
Dividends | - | (261,629 | ) | - | - | (261,629 | ) | (3,438 | ) | (265,067 | ) | |||||||||||||||||
At December 31, 2020 | 8,730 | - | 10,491 | - | 19,221 | 15 | 19,236 |
The accompanying notes are an integral part of these consolidated financial statements.
F-7
Vinci Partners Investimentos Ltda.
Consolidated statements of cash flows
Years ended December 31
All amounts in thousands of reais unless otherwise stated
2020 | 2019 | 2018 | ||||||||||
Cash flows from operating activities | ||||||||||||
Profit before taxation | 212,600 | 192,115 | 77,700 | |||||||||
Adjustments to reconcile net income to cash flows from operations: | ||||||||||||
Depreciation and amortization | 13,228 | 16,520 | 17,520 | |||||||||
Unrealized gain of financial instruments at fair value through profit or loss | (8,251 | ) | (20,104 | ) | (7,103 | ) | ||||||
Finance expense on liabilities at amortized cost | 203 | 181 | 162 | |||||||||
Allowance for expected credit loss | 59 | 69 | 52 | |||||||||
Financial result on lease agreements | 11,691 | 11,180 | 10,584 | |||||||||
229,530 | 199,961 | 98,915 | ||||||||||
Changes in assets and liabilities | ||||||||||||
Accounts receivables | (813 | ) | (53,798 | ) | (4,762 | ) | ||||||
Taxes recoverable | 15 | (639 | ) | 439 | ||||||||
Other assets | (7,549 | ) | (3,500 | ) | 144 | |||||||
Trade payables | 713 | 115 | (2,629 | ) | ||||||||
Accounts payable | (858 | ) | 1,899 | (4,345 | ) | |||||||
Labor and social security obligations | 9,776 | 13,053 | 695 | |||||||||
Taxes and contributions payable | (5,246 | ) | 3,248 | (1,362 | ) | |||||||
Payables to related parties | - | (27 | ) | 21 | ||||||||
Other payables | - | (2,039 | ) | 2,507 | ||||||||
(3,962 | ) | (41,687 | ) | (9,292 | ) | |||||||
Cash generated from operations | 225,568 | 158,274 | 89,623 | |||||||||
Income tax paid | (30,242 | ) | (25,932 | ) | (16,339 | ) | ||||||
Net cash inflow from operating activities | 195,326 | 132,342 | 73,284 | |||||||||
Cash flows from investing activities | ||||||||||||
Purchases of property and equipment and additions to intangible assets | (2,016 | ) | (1,737 | ) | (965 | ) | ||||||
Acquisition of non-controlling quotas | (1,183 | ) | - | - | ||||||||
Purchase of financial instruments at fair value through profit or loss | (375,006 | ) | (273,051 | ) | (192,083 | ) | ||||||
Sales of financial instruments at fair value through profit or loss | 453,517 | 234,942 | 176,028 | |||||||||
Net cash (outflow) from investing activities | 75,312 | (39,846 | ) | (17,020 | ) | |||||||
Cash flows from financing activities | ||||||||||||
Issuance (purchase) of quotas | 135 | (225 | ) | 112 | ||||||||
Advance to capital increase | - | - | 580 | |||||||||
Capital increase (deacrease) of non-controlling interests in the equity of subsidiaries | (900 | ) | - | 266 | ||||||||
Lease payments, net of sublease received | (16,497 | ) | (15,483 | ) | (16,836 | ) | ||||||
Borrowings acquisitions (payments) | - | (8,500 | ) | 8,500 | ||||||||
Dividends paid | (176,287 | ) | (76,226 | ) | (45,885 | ) | ||||||
Net cash (outflow) from financing activities | (193,549 | ) | (100,434 | ) | (53,263 | ) | ||||||
Net increase (decrease) in cash and cash equivalents | 77,089 | (7,938 | ) | 3,001 | ||||||||
Cash and cash equivalents at the beginning of the year | 3,896 | 11,713 | 8,240 | |||||||||
Foreign exchange variation of cash and cash equivalents in subsidiary abroad | 2,464 | 121 | 472 | |||||||||
Cash and cash equivalents at the end of the year (Notes 6 and 7) | 83,449 | 3,896 | 11,713 |
Non-cash financing activities
Dividends declared and not yet paid was R$ 123,191 (Note 11)
The accompanying notes are an integral part of these consolidated financial statements.
F-8
Vinci Partners Investimentos Ltda.
Notes to the consolidated financial statements
All amounts in thousands of reais
1 | Operations |
Vinci Partners Investimentos Ltda. (referred to herein as "Entity", "Group" or "Vinci") started its activities in September 2009. Its objective is to hold investments in the capital of other companies as partner (quotaholder). The investees are specialized in rendering alternative investment management, asset allocation and financial advisory services. The actual quotaholders of the Entity are disclosed in Note 14.
The Entity is established and domiciled in Brazil, and its headquarters are located at Rua Bartolomeu Mitre nº 336, Leblon, in the city of Rio de Janeiro.
The issuance of these financial statements was authorized by the Entity's management on March 5, 2021.
Corporate reorganization
Prior to the consummation of the initial public offering, on January 15, 2021 the individual partners of Vinci contributed the entirety of their quotas in Vinci to Vinci Partners Investments Ltd (referred to herein as "Vinci Partners Ltd"), a Cayman Islands exempted company incorporated with limited liability for purposes of effectuating the initial public offering of Vinci Partners Ltd.
In return for this contribution Vinci Partners Ltd issued (1) new Class B common shares to Gilberto Sayão da Silva and (2) new Class A common shares to all other quotaholders of Vinci in exchange for the quotas of Vinci contributed to Vinci Partners Ltd, or the Contribution. Until the Contribution, Vinci Partners Ltd did not commence operations and had only nominal assets and liabilities and no material contingent liabilities or commitments.
The reorganization mentioned above is disclosed in these financial statements as a non-adjusting post balance sheet event, with the impacts to be reflected in financial statements for periods subsequent to December 31, 2020.
Initial Public Offering (IPO) – Vinci Partners Ltd
On January 28, 2021 Vinci Partners Ltd announced the price of its public offering of the Class A common shares. being offered 13,873,474 Class A common shares. The impact of the transaction is disclosed in these financial statements as a non-adjusting post balance sheet event, with the accounting impacts to be reflected in financial statements for periods subsequent to December 31, 2020. Prior to this offering, there has been no public market for our Class A common shares. The initial public offering price per Class A common share was US$18.00.
The Class A common shares have been approved for listing on the Nasdaq Global Select Market, or Nasdaq, under the symbol "VINP." Vinci Partners Ltd has two classes of common shares: Class A common shares and our Class B common shares.
Class B common shares carry rights that are identical to the Class A common shares, except that (1) holders of Class B common shares are entitled to 10 votes per share, whereas holders of our Class A common shares are entitled to one vote per share; (2) holders of Class B common shares have certain conversion rights; (3) holders of Class B common shares are entitled to preemptive rights in the event that additional Class A common shares are issued in order to maintain their proportional ownership interest; and (4) Class B common shares shall not be listed on any stock exchange and will not be publicly traded.
On February 1, 2021, Vinci Partners Ltd announced the closing of its initial public offering The net proceeds from the offering were US$ 232 million, after deducting underwriting discounts and commissions. The Class A common shares began trading on the Nasdaq Global Select Market on January 28, 2021 under the ticker symbol "VINP."
F-9
Vinci Partners Investimentos Ltda.
Notes to the consolidated financial statements
All amounts in thousands of reais
In connection with the offering, Vinci Partners has granted the underwriters a 30-day option to purchase up to an additional 2,081,021 Class A common shares at the initial public offering price, less underwriting discounts and commissions. On February 8, 2021, Vinci Partners Ltd received net proceeds of US$ 23 million in respect of the additional 1,398,014 Class A common shares issued.
Vinci Partners Ltd intends to use the net proceeds from the offering to (1) to fund investments in its own products alongside its investors; (2) to pursue opportunities for strategic transactions; and (3) for other general corporate purposes.
Impacts of the coronavirus pandemic (COVID-19)
Since January 2020, the outbreak of coronavirus has impacted global commercial activities. The rapid development of the pandemic generated significant uncertainty of the real consequences of an ultimate impact. During the year there was a continued adverse effect on economic and market conditions that triggered a period of global economic slowdown.
The COVID-19 pandemic and government measures taken in response thereto have caused disruptions in some of our funds' portfolio companies' businesses and could lead to long-term disruptions or closures. For instance, the COVID-19 pandemic has caused work stoppages and increased unemployment, including because of illness or travel or government restrictions in connection with the pandemic. Additionally, the COVID-19 pandemic has resulted in the temporary or permanent closure of many businesses and has required adjustments in how many businesses operate. For example, certain funds in our real estate segment were adversely impacted as a result of shopping mall closures in Brazil lasting over six months. In addition, there is uncertainty surrounding real estate funds with concentrated investments in office space as the real estate market adjusts to shifts in office space demand in response to changes in economic activity and remote working arrangements. These factors have adversely impacted certain companies in our investment portfolio and severely disrupted operations and economic conditions generally. Finally, significant market fluctuations driven by the COVID-19 pandemic have resulted in fluctuations in the fair value component of our Assets Under Management and could result in additional fluctuations in our Assets Under Management depending on the severity and extent of the ongoing crisis. However, despite the adverse impact, Vinci expanded its operations during the pandemic and had increased its total assets, net revenue, profits and did not record any impairment in 2020 as result of COVID-19. Additionally the Group completed its Initial Public Offering ("IPO") on the Nasdaq Global Select Market in January 2021.
2 | Summary of significant accounting policies |
2.1 | Basis of preparation and presentation |
The consolidated financial statements of the Group have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).
The consolidated financial statements have been prepared on a historical cost basis, except for the financial instruments assets that have been measured at fair value.
F-10
Vinci Partners Investimentos Ltda.
Notes to the consolidated financial statements
All amounts in thousands of reais
(a) | Consolidated financial statements |
Ownership interest in subsidiaries at December 31 is as follows:
Interest - % | ||||||||||||
2020 | 2019 | 2018 | ||||||||||
Direct subsidiaries | ||||||||||||
Vinci Assessoria financeira Ltda. (*) | 100 | 100 | 100 | |||||||||
Vinci Equities Gestora de Recursos Ltda. (*) | 100 | 100 | 100 | |||||||||
Vinci Gestora de Recursos Ltda. (*) | 100 | 100 | 100 | |||||||||
Vinci Capital Gestora de Recursos Ltda. (*) | 100 | 100 | 100 | |||||||||
Vinci Gestão de Patrimônio Ltda. | 100 | 100 | 100 | |||||||||
Vinci Real Estate Gestora de Recursos Ltda. (**) | 100 | 80 | 80 | |||||||||
Vinci Capital Partners GP Limited. | 100 | 100 | 100 | |||||||||
Vinci USA LLC | 100 | 100 | 100 | |||||||||
Vinci GGN de Recursos Ltda. (*) | 100 | 100 | 100 | |||||||||
Vinci Infraestrutura Gestora de Recursos Ltda. (***) | 100 | 80 | 80 | |||||||||
Vinci Financial Ventures (VF2) GP (****) | - | 100 | 100 | |||||||||
Vinci Capital Partners GP III Limited. | 100 | 100 | 100 | |||||||||
GGN GP LLC | 100 | 100 | - | |||||||||
Amalfi Empreendimentos e Participações Ltda. | 100 | 100 | - |
(*) | Minority interest represents less than 0.001%. |
(**) | On August 31, 2020, Vinci acquired the remaining interest of its investee Vinci Real Estate Gestora de Recursos Ltda from the minority quotaholder, by the price of R$ 1.00 per quota. The transaction was settled by the nominal value of the quota, in the amount of R$ 657 for the acquisition of 657,200 quotas. |
(***) | On November 21, 2020, Vinci acquired the remaining interest of its investee Vinci Infraestrutura Gestora de Recursos Ltda from the minority quotaholder, by the price of R$ 1.00 per quota. The transaction was settled by the nominal value of the quota, in the amount of R$ 526 for the acquisition of 526.020 quotas. |
(****) | Vinci Financial Ventures (VF2) GP was terminated on June 2nd, 2020. |
Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an entity where the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases.
Inter-company transactions, balances and unrealized gains on transactions between Group companies are eliminated. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the transferred asset. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.
Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated statement of profit or loss, consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated balance sheet respectively.
The Group treats transactions with non-controlling interests that do not result in a loss of control as transactions with equity owners of the Group. A change in ownership interest results in an adjustment between the carrying amounts of
F-11
Vinci Partners Investimentos Ltda.
Notes to the consolidated financial statements
All amounts in thousands of reais
the controlling and non-controlling interests to reflect their relative interests in the subsidiary. Any difference between the amount of the adjustment to non-controlling interests and any consideration paid or received is recognized in another reserve within equity attributable to owners of Entity.
When the Group ceases to consolidate an investment or account for it under equity method because of a loss of control, joint control or significant influence, any retained interest in the entity is remeasured to its fair value, with the change in carrying amount recognized in profit or loss. This fair value becomes the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previously recognized in other comprehensive income in respect of that entity are accounted for as if the group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognized in other comprehensive income are reclassified to profit or loss.
2.2 | Segment reporting |
The CEO is responsible for the decision-making process related to executive themes, resources allocation and strategic decisions of Vinci.
The strategic decisions of Group comprise eight distinct business segments: (i) hedge funds; (ii) public equities; (iii) private equity; (iv) financial advisory services, (v) Investment products and solutions; (vi) real estate; (vii) infrastructure and (viii) Credit (Note 20).
2.3 | Foreign currency translation |
Functional and presentation currency
Items included in the financial statements are measured using the currency of the primary economic environment in which the entity operates (the "functional currency"). The financial statements are presented in thousands of Brazilian reais, which is the Entity's functional currency and also its presentation currency. All amounts disclosed in the financial statements and notes have been rounded off to the nearest thousand currency units unless otherwise stated.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions, and from the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates, are recognized in profit or loss.
Group companies
The results and financial position of foreign operations (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:
· assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet
· income and expenses for each statement of profit or loss and statement of comprehensive income are translated at average exchange rates (unless this is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions), and
· all resulting exchange differences are recognized in other comprehensive income.
F-12
Vinci Partners Investimentos Ltda.
Notes to the consolidated financial statements
All amounts in thousands of reais
2.4 | Cash and cash equivalents |
For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand, bank deposits held with financial institutions, other short-term, highly liquid investments with original maturities of three months or less, that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
2.5 | Financial assets |
(i) Classification
The Group classifies its financial assets in the following measurement categories:
· those to be measured subsequently at fair value (either through OCI or through profit or loss), and
· those to be measured at amortized cost.
The classification depends on the Entity's business model for managing the financial assets and the contractual terms of the cash flows.
For assets measured at fair value, gains and losses will either be recorded in profit or loss or OCI. For investments in equity instruments that are not held for trading, this will depend on whether the group has made an irrevocable election at the time of initial recognition to account for the equity investment at fair value through other comprehensive income (FVOCI).
The Group reclassifies debt investments when and only when its business model for managing those assets changes.
(ii) Recognition and derecognition
Regular way purchases and sales of financial assets are recognized on trade date, being the date on which the Group commits to purchase or sell the asset. Financial assets are derecognized when the rights to receive cash flows from the financial assets have expired or have been transferred and the Group has transferred substantially all the risks and rewards of ownership.
(iii) Measurement
At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss (FVPL), transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at FVPL are expensed in profit or loss.
(iv) Impairment
The group assesses on a forward-looking basis the expected credit loss associated with its debt instruments carried at amortized cost and FVOCI. The impairment methodology applied depends on whether there has been a significant increase in credit risk. For trade receivables, the group applies the simplified approach permitted by IFRS 9, which requires expected lifetime losses to be recognized from initial recognition of the receivables.
F-13
Vinci Partners Investimentos Ltda.
Notes to the consolidated financial statements
All amounts in thousands of reais
2.6 | Trade receivables |
Receivables are amounts due for financial advisory services and for investment fund management services rendered in the ordinary course of Group's business. Except for unrealized performance fee, collection is expected in less than one year; therefore, they are classified as current assets.
Trade receivables are recognized initially at the amount of consideration that is unconditional, unless they contain significant financing components when they are recognized at fair value. They are subsequently measured at amortized cost using the effective interest method, less allowance for losses. See note 5 for further information about the Group's accounting for trade receivables.
The Group use a provision matrix to calculate expected credit losses, for trade receivables. The provision rates are based on days past due for customer. The provision matrix is initially based on our historical observed default rates. When applicable, the Group calibrate the matrix to adjust the historical credit loss experience with forward-looking information. The assessment of the correlation between historical observed default rates, forecast economic conditions and expected credit losses is a significant estimate. The amount of expected credit losses is sensitive to changes in circumstances and of forecast economic conditions. Our historical credit loss experience and forecast of economic conditions may also not be representative of customer's actual default in the future. The information about the expected credit losses on our trade receivables and contract assets is disclosed in note 5.
2.7 | Intangible assets |
Computer software
Computer software licenses purchased are capitalized on the basis of the costs incurred to acquire and bring to use the specific software. These costs are amortized over their estimated useful lives of five years.
Costs associated with maintaining computer software programs are recognized as an expense as incurred.
Development costs that are directly attributable to the design and testing of identifiable and unique software products controlled by the Group are recognized as intangible assets when the following criteria are met:
· | It is technically feasible to complete the software product so that it will be available for use. |
· | Management intends to complete the software product and use or sell it. |
· | There is an ability to use or sell the software product. |
· | It can be demonstrated how the software product will generate probable future economic benefits. |
· | Adequate technical, financial and other resources to complete the development and to use or sell the software product are available. |
· | The expenditure attributable to the software product during its development can be reliably measured. |
Directly attributable costs that are capitalized as part of the software product include the software development employee costs and an appropriate portion of applicable overheads.
Capitalized development costs are recorded as intangible assets and amortized from the point at which the asset is ready for use. Refer to note 9 for details about amortization methods and periods used by the Group for intangible assets.
F-14
Vinci Partners Investimentos Ltda.
Notes to the consolidated financial statements
All amounts in thousands of reais
Other development expenditures that do not meet these criteria are recognized as an expense as incurred.
Development costs previously recorded as an expense are not recognized as an asset in a subsequent period.
Intangible assets with definite life are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. During the years ended December 31, 2020 and 2019 management do not identify any event that could impact the recoverable value of the intangible assets.
2.8 | Property and equipment |
Property and equipment are stated at cost, less depreciation calculated on the straight-line method, based on the estimated economic useful lives of the assets, using the following annual rates: furniture and fixtures, telephony equipment and facilities have a useful life of 10 years; IT equipment has a useful life 5 years.
The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period. An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in profit or loss. When revalued assets are sold, it is Group policy to transfer any amounts included in other reserves in respect of those assets to retained earnings.
2.9 | Leases |
The Group leases various offices. Rental contracts are typically made for fixed periods of 5 years to 10 years, but may have extension options.
Extension and termination options are included in a number of property leases across the Group. These are used to maximize operational flexibility in terms of managing the assets used in the Group's operations. The majority of extension and termination options held are exercisable only by the Group and not by the respective lessor.
In determining the lease term, management considers all facts and circumstances that create an economic incentive to exercise an extension option, or not exercise a termination option. Extension options (or periods after termination options) are only included in the lease term if the lease is reasonably certain to be extended (or not terminated).
The following factors are normally the most relevant:
- | If there are significant penalties to terminate (or not extend), the Group is typically reasonably certain to extend (or not terminate). |
- | If any leasehold improvements are expected to have a significant remaining value, the Group is typically reasonably certain to extend (or not terminate). |
- | Otherwise, the Group considers other factors including historical lease durations and the costs and business disruption required to replace the leased asset. |
F-15
Vinci Partners Investimentos Ltda.
Notes to the consolidated financial statements
All amounts in thousands of reais
Contracts may contain both lease and non-lease components. The group allocates the consideration in the contract to the lease and non-lease components based on their relative stand-alone prices. However, for leases of real estate for which the group is a lessee, it has elected not to separate lease and non-lease components and instead accounts for these as a single lease component. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose any covenants other than the security interests in the leased assets that are held by the lessor. Leased assets may not be used as security for borrowing purposes.
2.10 | Trade payables |
These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition. Trade and other payables are presented as current liabilities unless payment is not due within 12 months after the reporting period. They are recognized initially at their fair value and subsequently measured at amortized cost using the effective interest method.
2.11 | Provisions |
Provisions for legal claims are recognized when the Group has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation, and 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. A provision is recognized even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small.
Provisions are measured at the present value of the expenditures 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.
2.12 | Profit-sharing and bonus plans |
The Group recognizes a liability and an expense for bonuses and profit-sharing based on a formula that takes into consideration the profit attributable to the company's quotaholders after certain adjustments. The Group recognizes a provision where contractually obliged or where there is a past practice that has created a constructive obligation. The provision is recognized in labor and social security obligations and the related expense in general and administrative expense.
2.13 | Income taxes |
The income tax and social contribution expenses for the year comprise current taxes. Taxes on income are recognized in the statement of income.
The current income tax and social contribution are calculated on the basis of the tax laws enacted by the balance sheet date. Management periodically evaluates positions taken by the Entity in income tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.
F-16
Vinci Partners Investimentos Ltda.
Notes to the consolidated financial statements
All amounts in thousands of reais
The Entity recognizes liabilities for situations where it is probable that additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the current and deferred tax assets and liabilities in the period in which such determination is made.
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, deferred tax liabilities are not recognized if they arise from the initial recognition of goodwill. Deferred income tax is also not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that, at the time of the transaction, affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting period and are expected to apply when the related deferred income tax asset is realized or the deferred income tax liability is settled.
Deferred tax assets are recognized only if it is probable that future taxable amounts will be available to utilize those temporary differences and losses.
Deferred tax liabilities and assets are not recognized for temporary differences between the carrying amount and tax bases of investments in foreign operations where the company is able to control the timing of the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future.
Deferred tax assets and liabilities are offset where there is a legally enforceable right to offset current tax assets and liabilities and where the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.
Current and deferred tax is recognized in profit or loss, except to the extent that it relates to items recognized in other comprehensive income or directly in equity. In this case, the tax is also recognized in other comprehensive income or directly in equity, respectively.
As permitted by tax legislation, certain of the Entity's investees opted for the deemed profit regime, according to which the income tax calculation basis is 32% of revenues from service rendering and 100% of finance income, on which regular rates of 15% are levied, plus an additional 10% for income tax over a certain limit and 9% for social contribution. The Entity opted for the actual taxable profit regime. The entities that opted for the deemed profit regime evaluates their income tax and social contribution expenses based on the services revenue and realized investment income recognized on monthly basis.
2.14 | Capital |
Ordinary quotas are classified as equity.
Incremental costs directly attributable to the issue of new quotas or options are shown in equity as a deduction, net of tax, from the proceeds.
Dividends
Provision is made for the amount of any dividend declared, being appropriately authorized and no longer at the discretion of the entity, on or before the end of the reporting period but not distributed at the end of the reporting period.
Earnings per quota
(i) Basic earnings per quota
Basic earnings per quota is calculated by dividing:
• the profit attributable to owners of the Entity;
• by the weighted average number of quotas outstanding during the financial year, adjusted for bonus elements in quotas issued during the year and excluding treasury quotas.
F-17
Vinci Partners Investimentos Ltda.
Notes to the consolidated financial statements
All amounts in thousands of reais
(ii) Diluted earnings per quota
Diluted earnings per quota adjusts the figures used in the determination of basic earnings per quota to take into account:
• the after-income tax effect of interest and other financing costs associated with dilutive potential ordinary quotas, and;
• the weighted average number of additional ordinary quotas that would have been outstanding assuming the conversion of all dilutive potential ordinary quotas.
2.15 | Revenue recognition |
Accordingly to IFRS 15, revenue is recognized when the performance obligation is satisfied. Revenue comprises the fair value of the consideration received or receivable for financial advisory and investment fund management services rendered in the ordinary course of the Group's activities. Revenue is shown net of taxes, returns, rebates and discounts.
Management fees and performance fees are accounted for as contracts with customers. Under the guidance for contracts with customers, an Entity is required to (a) identify the contract(s) with a customer, (b) identify the performance obligations in the contract, (c) determine the transaction price, (d) allocate the transaction price to the performance obligations in the contract, and (e) recognize revenue when (or as) the entity satisfies a performance obligation. In determining the transaction price, an entity may include variable consideration only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized would not occur when the uncertainty associated with the variable consideration is resolved. See Note 20 "Segment Reporting" for a disaggregated presentation of revenues from contracts with customers., as follows:
(a) | Management fees |
Management fees are recognized in the period when the corresponding services are rendered, which generally consist of a percentage on the net asset value of each investment fund being managed. These customer contracts require Vinci to provide investment management services, which represents a performance obligation that the Group satisfies over time. Management fee percentages currently range between 0.1% and 2%.
(b) | Performance fees |
Brazilian regulation set forth certain minimum criteria for the performance fee structures of fund managed by Vinci, as described below:
• | Performance fee must be assessed based on a verifiable index, the benchmark, obtained from an independent source, and compatible with the corresponding fund investment policy. |
• | Performance fee may not be calculated at a percentage lower than 100.0% of the index. |
• | The performance fee cannot be charged in a period less than 6 months (except for private asset funds). |
• | The performance fee shall be calculated based on net asset value, including management fees and all other expenses and may consider any distribution for shareholders in the calculation. |
As a multi-asset-class asset management firm, Vinci manage a number of funds with different performance fee structures that may be classified in three main categories: (1) liquid funds, (2) closed-ended funds focused on value generation, and (3) closed-ended funds focused on income generation.
For liquid funds such as equity funds, credit funds and hedge funds, we charge performance fees every semester based
F-18
Vinci Partners Investimentos Ltda.
Notes to the consolidated financial statements
All amounts in thousands of reais
on the performance of the fund above the benchmark or when the customer makes a redemption and a performance fee is due. For hedge funds and credit funds, performance fees are generally benchmarked to the Interbank Deposit Certificate index, or CDI, and for inflation-indexed funds, performance fees are generally indexed to the Amplified Consumer Price Index, or IPCA, plus a fixed real interest rate or a market index such as the Market Index Sub-Index B from the Brazilian Financial and Capital Markets Association, or IMA-B. For equity funds, the benchmark varies according to the strategy. For our "long only" and "long-biased" strategies, performance fees are assessed to the IBOVESPA index, under the dividend strategy performance fees are tied to the IDIV index, and for the small cap funds we use SMLL index.
For closed-ended funds focused on value generation, such as the private equity and infrastructure funds, we follow a European-style waterfall structure and the threshold and carry is different between the Brazilian funds and the foreign investor funds. For the Brazilian funds we use a threshold of IPCA plus 8% and a carried interest over capital invested plus the return of IPCA. For the foreign investor funds, the threshold is an 8% return in U.S. dollars and the carried interest is on excess return over the capital contribution.
For the closed-ended funds focused on income such as real estate funds, we charge a performance fee every semester over the excess return between the amount distributed to investors and the benchmark of the relevant fund, which can vary according to the fund strategy.
The performance revenue is determined and recorded at the end of the reporting period and are not subject to clawback once paid.
The Entity recognize the revenue according to IFRS 15. Unrealized performance fees are recognized when the revenue is highly probable that they will not be reversed in the income statements, even if the established period given in the fund's memorandum is not concluded.
(c) | Financial advisory services |
Financial advisory fees are related to the service provided by Vinci Assessoria Financeira Ltda. on the support of mergers and acquisitions transactions. Substantially, the fees are recognized when the transaction is concluded, based on success fees.
3 | Accounting estimates and judgments |
The Entity makes estimates and assumptions concerning the future, based on historical experience and other factors, including expectations of future events. The resulting accounting estimates will, by definition, seldom equal the related actual results. The main estimations and assumptions made by the Entity comprises the provision for impairment of trade receivables, provision for profit sharing, and the revenue recognition of management fees for some funds abroad and the fair value measurement of financial assets.
F-19
Vinci Partners Investimentos Ltda.
Notes to the consolidated financial statements
All amounts in thousands of reais
4 | Financial risk management |
The main risks related to the financial instruments are credit risk, market risk, and liquidity risk, as defined below: The management of such risks involves various levels in the Entity and comprehends a number of policies and strategies. The Group's risk management focuses on the unpredictability of financial markets and seeks to mitigate potential adverse impacts on the Group's financial performance.
4.1 | Financial risk factors |
This note explains the Group's exposure to financial risks and how these risks could affect the Group's future financial performance. Current year profit and loss information has been included where relevant to add further context.
The Group's risk management is predominantly controlled by a central treasury department (group treasury) under process and controls approved by the management. The management provides written process and controls for overall risk management, as well as policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity.
(a) | Credit risk |
Credit risk arises from cash and cash equivalents, contractual cash flows of debt investments carried at amortized cost, at fair value through profit or loss (FVTPL), and deposits with banks and financial institutions, as well as credit exposures to wholesale and retail customers, including outstanding receivables.
(i) Risk management
Vinci's treasury manages credit risk on a group basis. As of December 31, 2020, and 2019 the expected credit losses is considered immaterial due to the short maturities of the deposits and the credit quality of the counterparty, which have a credit rating AAA evaluated by Fitch Ratings. The Entity has not suffered any losses from cash and cash equivalent since inception. Vinci's treasury review expected credit losses on a regular basis.
(ii) Impairment of financial assets
The group has the following types of financial assets that are subject to the expected credit loss model:
> trade receivables
> debt investments carried at amortized cost, and
While cash and cash equivalents are also subject to the impairment requirements of IFRS 9, the identified impairment loss was immaterial.
(b) | Market risk |
(i) Foreign exchange risk
The Group's exposure to foreign currency risk at the end of the reporting period, expressed in functional
currency units, was as follows:
The amounts presented in the table below are originally presented in US Dollar and were converted into Brazilian Reais (R$) by the foreign exchange rate at the closing date.
F-20
Vinci Partners Investimentos Ltda.
Notes to the consolidated financial statements
All amounts in thousands of reais
Balance sheet | 12/31/2020 | 12/31/2019 | ||||||
Cash and cash equivalents | 11,676 | 3,304 | ||||||
Trade receivable | 3,151 | 3,846 | ||||||
Other receivables | 1,206 | 935 | ||||||
Current assets | 16,033 | 8,085 | ||||||
Leases, property and equipment | 4,049 | 4,033 | ||||||
Non-current assets | 4,049 | 4,033 | ||||||
Trade payables | 9 | 124 | ||||||
Lease | 1,008 | 782 | ||||||
Labor and social security obligations | 7,527 | 5,410 | ||||||
Current liabilities | 8,544 | 6,316 | ||||||
Lease | 2,712 | 2,732 | ||||||
Non-current liabilities | 2,712 | 2,732 | ||||||
Net Equity | 8,826 | 3,070 |
The aggregate net foreign exchange gains/losses recognized in profit or loss were:
Net foreign exchange result | 12/31/2020 | 12/31/2019 | 12/31/2019 | |||||||||
Financial revenue | 416 | 56 | 169 | |||||||||
Financial expense | (193 | ) | (196 | ) | (225 | ) | ||||||
Net foreign exchange result, net | 223 | (140 | ) | (56 | ) |
The group operates internationally and is exposed to foreign exchange risk, exclusively the US dollar.
Foreign exchange risk arises from future commercial transactions and recognized assets and liabilities denominated in a currency that is not the functional currency of the Group.
(ii) interest rate risk
The Group's profit or loss is sensitive to higher/lower interest income from cash equivalents and fixed income funds as a result of changes in interest rates.
F-21
Vinci Partners Investimentos Ltda.
Notes to the consolidated financial statements
All amounts in thousands of reais
The table below summarize the sensitivity of changes in interest rates.
Impact on post-tax profit | ||||||||
2020 | 2019 | |||||||
Interest rates – increase by 70 basis points * | 288 | 195 | ||||||
Interest rates – decreased by 100 basis points * | (412 | ) | (279 | ) |
* Holding all other variables constant
(iii) Price risk
The Group's exposure to investment securities price risk arises from investments held by the group and classified in the balance sheet at fair value through profit or loss (note 5).
To manage its price risk arising from investments in investment securities, the group diversifies its portfolio. Diversification of the portfolio is done in accordance with the limits set by the Group.
The majority of the Group's financial investments, that are exposed to significantly price risk are the private equity investments. Note 5(d) demonstrate the sensitivity analyses of impact for the assets held by the Group.
(c) | Liquidity risk |
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due and to close out market positions. At the end of the reporting period the Group held bank deposits and certificate of deposits of R$ 83,449 (2019 – R$3,896) that are expected to readily generate cash inflows for managing liquidity risk.
Net debt reconciliation
This section sets out an analysis of net debt and the movements in net debt for each of the periods presented.
12/31/2020 | 12/31/2019 | |||||||
Cash and cash equivalents | 83,449 | 3,896 | ||||||
Liquid investments (i) | 8,253 | 85,944 | ||||||
Trade payables | (1,039 | ) | (326 | ) | ||||
Labor and social security obligations | (40,724 | ) | (30,948 | ) | ||||
Accounts payable | (125,828 | ) | (37,702 | ) | ||||
Lease liabilities | (106,199 | ) | (102,891 | ) | ||||
Net debt | (182,088 | ) | (82,027 | ) | ||||
(i) Liquid investments comprise current investments that are traded in an active market, being the Group's financial assets held at fair value through profit or loss.
F-22
Vinci Partners Investimentos Ltda.
Notes to the consolidated financial statements
All amounts in thousands of reais
Financial liabilities | Other assets | |||||||||||||||
Payables | Lease liabilities | Cash and cash equivalents | Liquid investments | |||||||||||||
Net debt as at | ||||||||||||||||
1 January 2019 | (30,846 | ) | (93,004 | ) | 11,713 | 37,583 | ||||||||||
Cash flow and dividends provision | (37,949 | ) | 19,027 | (7,938 | ) | 48,361 | ||||||||||
Amortization cost | (181 | ) | - | - | - | |||||||||||
Addition and financial expenses accrual | - | (29,016 | ) | - | - | |||||||||||
Foreign exchange adjustments | - | - | 121 | - | ||||||||||||
Other changes (ii) | - | 102 | - | - | ||||||||||||
31 December 2019 | (68,976 | ) | (102,891 | ) | 3,896 | 85,944 | ||||||||||
Cash flow and dividends provision | (98,412 | ) | 19,652 | 77,203 | (77,681 | ) | ||||||||||
Amortization cost | (203 | ) | - | - | - | |||||||||||
Addition and finance expenses accrual | - | (21,949 | ) | - | - | |||||||||||
Foreign exchange adjustments | - | - | 2,350 | - | ||||||||||||
Other changes (ii) | - | (1,011 | ) | - | - | |||||||||||
31 December 2020 | (167,591 | ) | (106,199 | ) | 83,449 | 8,253 | ||||||||||
(ii) Other changes include non-cash movements, including CTA adjustments which will be presented as in other comprehensive income statement.
Maturities of financial liabilities
The tables below analyses the Group's financial liabilities into relevant maturity groupings based on
their contractual maturities for significant financial liabilities.
Contractual maturities of financial liabilities at 31 December 2020 | Less than 1 year | Between 1 and 3 years | Over 3 years | Carrying amount | ||||||||||||
Trade payables | (1,039 | ) | - | - | (1,039 | ) | ||||||||||
Labor and social security obligations | (40,724 | ) | - | - | (40,724 | ) | ||||||||||
Lease liabilities | (19,828 | ) | (40,279 | ) | (113,929 | ) | (106,199 | ) | ||||||||
Accounts payable | (125,795 | ) | (33 | ) | - | (125,828 | ) | |||||||||
Total | (187,386 | ) | (40,312 | ) | (113,929 | ) | (273,790 | ) |
F-23
Vinci Partners Investimentos Ltda.
Notes to the consolidated financial statements
All amounts in thousands of reais
Contractual maturities of financial liabilities at 31 December 2019 | Less than 1 year | Between 1 and 3 years | Over 3 years | Carrying amount | ||||||||||||
Trade payables | (326 | ) | - | - | (326 | ) | ||||||||||
Labor and social security obligations | (30,948 | ) | - | - | (30,948 | ) | ||||||||||
Lease liabilities | (17,738 | ) | (37,914 | ) | (120,884 | ) | (102,891 | ) | ||||||||
Accounts payable | (37,669 | ) | (33 | ) | - | (37,702 | ) | |||||||||
Total | (86,681 | ) | (37,947 | ) | (120,884 | ) | (171,867 | ) |
The amounts disclosed in the table below are the lease liabilities contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant.
Contractual maturities of | Total | Carrying amount | ||||||||||||||||||||
financial liabilities | Rio de Janeiro | São Paulo | NY Office | contractual | non-current | |||||||||||||||||
At 31 December 2020 | Office (BM336) | Office | (3rd Avenue) | cash flows | liabilities | |||||||||||||||||
2022 | (17,148 | ) | (2,930 | ) | (1,038 | ) | (21,116 | ) | (17,635 | ) | ||||||||||||
2023 | (17,148 | ) | (977 | ) | (1,038 | ) | (19,163 | ) | (14,254 | ) | ||||||||||||
2024 | (17,148 | ) | - | (1,038 | ) | (18,186 | ) | (12,004 | ) | |||||||||||||
2025 | (17,148 | ) | - | - | (17,148 | ) | (9,871 | ) | ||||||||||||||
2026 | (17,148 | ) | - | - | (17,148 | ) | (8,740 | ) | ||||||||||||||
2027 | (17,148 | ) | - | - | (17,148 | ) | (7,738 | ) | ||||||||||||||
2028 | (17,148 | ) | - | - | (17,148 | ) | (6,851 | ) | ||||||||||||||
2029 | (17,148 | ) | - | - | (17,148 | ) | (6,066 | ) | ||||||||||||||
2030 | (10,003 | ) | - | - | (10,003 | ) | (3,212 | ) | ||||||||||||||
Total | (147,187 | ) | (3,907 | ) | (3,114 | ) | (154,208 | ) | (86,371 | ) |
F-24
Vinci Partners Investimentos Ltda.
Notes to the consolidated financial statements
All amounts in thousands of reais
Contractual maturities of | Total | Carrying amount | ||||||||||||||||||||
financial liabilities | Rio de Janeiro | São Paulo | NY Office | contractual | non-current | |||||||||||||||||
At 31 December 2019 | Office (BM336) | Office | (3rd Avenue) | cash flows | liabilities | |||||||||||||||||
2021 | (15,617 | ) | (2,535 | ) | (805 | ) | (18,957 | ) | (15,819 | ) | ||||||||||||
2022 | (15,617 | ) | (2,535 | ) | (805 | ) | (18,957 | ) | (14,065 | ) | ||||||||||||
2023 | (15,617 | ) | (845 | ) | (805 | ) | (17,267 | ) | (11,401 | ) | ||||||||||||
2024 | (15,617 | ) | - | (805 | ) | (16,422 | ) | (9,618 | ) | |||||||||||||
2025 | (15,617 | ) | - | - | (15,617 | ) | (7,959 | ) | ||||||||||||||
2026 | (15,617 | ) | - | - | (15,617 | ) | (7,047 | ) | ||||||||||||||
2027 | (15,617 | ) | - | - | (15,617 | ) | (6,239 | ) | ||||||||||||||
2028 | (15,617 | ) | - | - | (15,617 | ) | (5,524 | ) | ||||||||||||||
2029 | (15,617 | ) | - | - | (15,617 | ) | (4,891 | ) | ||||||||||||||
2030 | (9,110 | ) | - | - | (9,110 | ) | (2,590 | ) | ||||||||||||||
Total | (149,663 | ) | (5,915 | ) | (3,220 | ) | (158,798 | ) | (85,153 | ) |
5 | Financial instruments |
This note provides information about the group's financial instruments, including:
- an overview of all financial instruments held by the Group
- specific information about each type of financial instrument
- accounting policies
- information about determining the fair value of the instruments, including judgements and estimation uncertainty involved.
The group classifies its financial assets in the following measurement categories:
· | those measured at fair value or through profit or loss, and |
· | those measured at amortized cost. |
The classification depends on the entity's business model for managing the financial assets and the contractual terms of the cash flows.
For assets measured at fair value, gains and losses will be recorded in profit or loss.
Recognition and derecognition
Regular way purchases and sales of financial assets are recognized on trade date, being the date on which the group commits to purchase or sell the asset. Financial assets are derecognized when the rights to receive cash flows from the financial assets have expired or have been transferred and the group has transferred substantially all the risks and rewards of ownership.
F-25
Vinci Partners Investimentos Ltda.
Notes to the consolidated financial statements
All amounts in thousands of reais
Measurement
At initial recognition, the group measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss (FVPL), transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at FVPL are expensed in profit or loss.
The Group holds the following financial instruments:
Financial assets | Section | 12/31/2020 | 12/31/2019 | |||||||
Trade receivables | (a) | 75,523 | 74,769 | |||||||
Other financial assets at amortized cost | (b) | 474 | 817 | |||||||
Cash and cash equivalents | (d) | 83,449 | 3,896 | |||||||
Financial assets at fair value through profit or loss (FVPL) | (c) | 39,849 | 110,108 | |||||||
199,295 | 189,590 | |||||||||
Financial liabilities | ||||||||||
Liabilities at amortized cost | (e) | 167,591 | 68,976 | |||||||
Lease liabilities | (e) | 106,199 | 102,891 | |||||||
273,790 | 171,867 |
The Group's exposure to risks associated with the financial instruments is discussed in note 4. The maximum exposure to credit risk at the end of the reporting period is the carrying amount of each class of financial assets mentioned above.
a) | Trade receivables |
Current assets | 12/31/2020 | 12/31/2019 | ||||||
Trade receivables from contracts with customers | 48,127 | 58,898 | ||||||
Loss allowance | (149 | ) | (90 | ) | ||||
Non-current assets | ||||||||
Trade receivables from contracts with customers | 27,545 | 15,961 | ||||||
75,523 | 74,769 |
Trade receivables are recognized initially at the amount of consideration that is unconditional and are not submitted to any financial components. They are subsequently measured at amortized cost, less loss allowance.
Current trade receivables are amounts due from customers for services performed in the ordinary course of business. They are generally due for settlement within 30 days and are therefore all classified as current. Due to the short-term nature of the current receivables, their carrying amount is considered to be the same as their fair value.
Non-current trade receivables are unrealized performance fees that management, with accumulated experience, estimate that it is highly probable that a significant reversal will not occur.
The Entity use a provision matrix to calculate expected credit losses and the exposure to credit risk from receivables are reviewed on a regular basis. Trade receivables allowance are presented in general and administrative expense.
F-26
Vinci Partners Investimentos Ltda.
Notes to the consolidated financial statements
All amounts in thousands of reais
The loss allowances for trade receivables as at 31 December reconcile to the opening loss allowances as follows:
2020 | 2019 | |||||||
Opening loss allowance at 1 January | (90 | ) | (190 | ) | ||||
Increase in trade receivable allowance recognized in profit or loss | (59 | ) | (69 | ) | ||||
Write-off | - | 169 | ||||||
Closing loss allowance at 31 December | (149 | ) | (90 | ) |
Trade receivables are written off when there is no reasonable expectation of recovery. Indicators that there is no reasonable expectation of recovery include, among others, the failure of a debtor to engage in a repayment plan with the group, and a failure to make contractual payments. The Entity have not written any amount of trade receivables during 2020 (R$ 169 - 2019). Subsequent recoveries of amounts previously written off are credited against the same line item.
b) | Other financial assets at amortized cost |
Financial assets at amortized cost include the following debt instruments:
12/31/2020 | 12/31/2019 | |||||||
Prepayments to employees (Note 6 (i)) | 474 | 817 |
These amounts generally arise from transactions outside the usual operating activities of the group. Interest are charged at commercial rates and collateral is not normally obtained.
All of the financial assets at amortized cost are denominated in Brazilian currency units. As a result, there is no exposure to foreign currency risk. There is also no exposure to price risk as the investments will be held to maturity.
See note 6 for more details.
c) | Financial assets at fair value through profit or loss |
The group classifies the following financial assets at fair value through profit or loss (FVPL):
- | Mutual funds; |
- | Public equities funds; |
- | Real Estate listed funds and |
- | Private equity funds. |
F-27
Vinci Partners Investimentos Ltda.
Notes to the consolidated financial statements
All amounts in thousands of reais
Financial assets measured at FVPL include the following categories:
12/31/2020 | 12/31/2019 | |||||||
Current assets | 8,253 | 85,944 | ||||||
Real estate listed funds | - | 445 | ||||||
Mutual funds | 8,253 | 84,665 | ||||||
Public equities funds | - | 834 | ||||||
Non-current assets | 31,596 | 24,164 | ||||||
Private equity funds | 31,596 | 24,164 |
The following tables demonstrate the funds invested included in each category mentioned above.
Mutual funds | ||||||||
12/31/2020 | 12/31/2019 | |||||||
Vinci Multiestratégia FIM (i) | - | 21,074 | ||||||
Vinci Valorem FIM | - | 826 | ||||||
Vinci Selection FIC de FIM | - | 537 | ||||||
Vinci Selection FIM | - | 526 | ||||||
FI Vinci Renda Fixa CP (ii) | 8,253 | 61,227 | ||||||
Vinci Atlas FIC de FIM | - | 475 | ||||||
8,253 | 84,665 |
(i) Vinci Multiestratégia FIM is focused to seek return to its quotaholders through investments in various classes of financial assets available in the fixed income, variable income, foreign exchange, derivatives and quotas of other investment funds, traded in the domestic and foreign markets, without the commitment to concentration in any specific class. In 2019, the fund's portfolio was composed primarily by Brazilian Government Bonds.
(ii) FI Vinci Renda Fixa CP is focused to seek return to its quotaholders through investments in various classes of financial assets available in the fixed income, derivatives and quotas of other investment funds, traded in the domestic markets, without exposition to variable income assets, foreign markets and leverage. As of December 2020, and 2019, the fund's portfolio is composed primarily by Brazilian Government Bonds.
Public equities funds | ||||||||
12/31/2020 | 12/31/2019 | |||||||
Vinci Mosaico FIA | - | 834 | ||||||
- | 834 |
Real Estate funds | ||||||||
12/31/2020 | 12/31/2019 | |||||||
Vinci Shopping Centers FII | - | 391 | ||||||
Vinci Offices FII (*) | - | 54 | ||||||
- | 445 |
(*) Vinci Office FII became a listed Fund since November 2019.
F-28
Vinci Partners Investimentos Ltda.
Notes to the consolidated financial statements
All amounts in thousands of reais
Private Equity | ||||||||
12/31/2020 | 12/31/2019 | |||||||
Vinci Capital Partners III Feeder FIP Multiestratégia | 768 | 590 | ||||||
Vinci Infra Coinvestimento I FIP - Infraestrutura (i) | 21,218 | 16,669 | ||||||
Vinci Infra Transmissão FIP - Infraestrutura (i) | 6,128 | 4,875 | ||||||
Nordeste III FIP Multiestratégia | 2,652 | 2,030 | ||||||
Vinci Impacto Ret IV FIP Multiestratégia | 830 | - | ||||||
31,596 | 24,164 |
(i) These funds are focused in acquisition of shares, share bonuses subscriptions, debentures convertible or not into shares, or other securities issued by publicly-held, publicly-traded or private corporations, that develop new projects of infrastructure in the development sector and operations of electric power transmission lines, participating in the decision-making process of the investee, with effective influence. As of December 31, 2020, and 2019, these funds held investment in Linhas de Energia do Sertão Transmissora S.A. ("LEST") and Água Vermelha Transmissora de Energia S.A.
During the year, the following gains/(losses) were recognized in profit or loss:
12/31/2020 | 12/31/2019 | 12/31/2018 | ||||||||||
Fair value gains (losses) on investments at FVPL recognized in finance income | 9,066 | 20,244 | 7,130 |
d) | Cash and cash equivalents |
Current assets | 12/31/2020 | 12/31/2019 | ||||||
Cash and bank deposits | 13,096 | 3,564 | ||||||
Certificate of deposit (i) | 70,353 | 332 | ||||||
83,449 | 3,896 |
For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand, bank deposits held at financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
(i) Comprises certificates of deposits issued by Banco Bradesco (credit rating AAA evaluated by Fitch Ratings) with interest rates variable from 99.50% to 101% of CDI (interbank deposit rate). The certificates are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. During 2020 the increase in the amount is mainly related to the redemption made by Vinci in Mutual Funds, which were used to invest on the certificate of deposit.
F-29
Vinci Partners Investimentos Ltda.
Notes to the consolidated financial statements
All amounts in thousands of reais
e) | Financial liabilities |
12/31/2020 | 12/31/2019 | |||||||
Current | 187,386 | 86,681 | ||||||
Trade payables | 1,039 | 326 | ||||||
Labor and social security obligations (Note 12) | 40,724 | 30,948 | ||||||
Lease liabilities (i) | 19,828 | 17,358 | ||||||
Accounts payable (Note 11) | 125,795 | 37,669 | ||||||
Non-current | 86,404 | 85,186 | ||||||
Lease liabilities (i) | 86,371 | 85,153 | ||||||
Accounts payable (Note 11) | 33 | 33 | ||||||
273,790 | 171,867 |
(i) As of 31 December 2020, and 2019, the Group leased offices with a carrying amount of R$ 106,199 and R$ 102,891, respectively, under leases expiring within five to ten years. The carrying amount of the lease liabilities comprises the net present value of the future cash expenditures up to the termination of the lease term.
(i) | Recognized fair value measurements |
(a) | Fair value hierarchy |
This section explains the judgements and estimates made in determining the fair values of the financial instruments that are recognized and measured at fair value through profit or loss in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the group has classified its financial instruments into the three levels prescribed under the accounting standards. An explanation of each level follows underneath the table.
On 31 December 2020 | ||||||||||||||||
Recurring fair value measurements | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Financial Assets | ||||||||||||||||
Certificate Deposits | - | 70,353 | - | 70,353 | ||||||||||||
Public equities funds | - | - | - | - | ||||||||||||
Mutual funds | - | 8,253 | - | 8,253 | ||||||||||||
Private equity funds | - | - | 31,596 | 31,596 | ||||||||||||
Total Financial Assets | - | 78,606 | 31,596 | 110,202 | ||||||||||||
On 31 December 2019 | ||||||||||||||||
Recurring fair value measurements | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Financial Assets | ||||||||||||||||
Certificate Deposits | - | 332 | - | 332 | ||||||||||||
Public equities funds | - | 834 | - | 834 | ||||||||||||
Mutual funds | - | 84,665 | - | 84,665 | ||||||||||||
Real estate listed funds | 445 | - | - | 445 | ||||||||||||
Private equity funds | - | - | 24,164 | 24,164 | ||||||||||||
Total Financial Assets | 445 | 85,831 | 24,164 | 110,440 |
F-30
Vinci Partners Investimentos Ltda.
Notes to the consolidated financial statements
All amounts in thousands of reais
Level 1: The fair value of financial instruments traded in active markets (such as publicly traded real estate funds) is based on quoted market prices at the end of the reporting period. The quoted market price used for financial assets held by the group is the current bid price. These instruments are included in level 1.
Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities.
(b) Valuation techniques used to determine fair values
Specific valuation techniques used to value financial instruments include:
- the use of quoted market prices
- for level 3 financial instruments – discounted cash flow analysis.
All non-listed assets fair value estimates are included in level 2, except for private equity funds, where the fair values have been determined based on fair value appraisals for fund's investments, performed by the fund's management (Vinci Capital) or a third party hired by the Administration. The most part of the level 3 financial instruments evaluation uses discount cash flows techniques to evaluate the fair value of the Fund's investments. The appraisals performed by a third party are reviewed by Vinci or its subsidiaries (fund's management).
F-31
Vinci Partners Investimentos Ltda.
Notes to the consolidated financial statements
All amounts in thousands of reais
(c) Fair value measurements using significant unobservable inputs (level 3)
The following table presents the changes in level 3 items for the years ended 31 December 2020 and 2019:
Fair Value | ||||
Opening balance 1 January 2019 | 14,313 | |||
Purchases | 6,110 | |||
Transfer between level 3 to 1 | (90 | ) | ||
Sales and distributions | (12,972 | ) | ||
Gain recognized in finance income | 16,803 | |||
Closing balance 31 December 2019 | 24,164 | |||
Purchases | 1,748 | |||
Sales and distributions | (778 | ) | ||
Gain recognized in finance income | 6,462 | |||
Closing balance 31 December 2020 | 31,596 |
F-32
Vinci Partners Investimentos Ltda.
Notes to the consolidated financial statements
All amounts in thousands of reais
(d) Valuation inputs and relationships to fair value
The following table summarizes the quantitative information about the significant unobservable inputs used in level 3 fair value measurements:
Fair value at | |||||||||
Description | 12/31/2020 | 12/31/2019 | Valuation Technique | Unobservable inputs | Value input | Reasonable possible shift +/- | 2019 Gain / (Losses) | 2020 Gain / (Losses) | Possible shift in Gain and losses |
Vinci Infra Coinvestimento I FIP – Infraestrutura | 21,218 | 16,669 | Discounted cash flow | Discount rate | 7.99% | 0.5% / 1% | 12,870 | 4,548 | Lower discount rate in 50 basis points would increase fair value by R$ 1,095 (R$ 559 – 2019) and higher discount rate in 100 basis points would decrease fair value by R$ 1,920 (1,992 – 2019) |
Vinci Infra Transmissão FIP - Infraestrutura | 6,128 | 4,875 | Discounted cash flow | Discount rate | 7.99% | 0.5% / 1% | 3,499 | 1,253 | Lower discount rate in 50 basis points would increase fair value by R$ 656 (R$ 163 – 2019) and higher discount rate in 100 basis points would decrease fair value by R$ 682 (R$ 583 – 2019) |
Nordeste III FIP Multiestratégia | 2,652 | 2,030 | Discounted cash flow | Discount rate | 16.50% | 0.5% / 1% | 307 | 702 | Lower discount rate in 50 basis points would increase fair value by R$ 9 and higher discount rate in 100 basis points would decrease fair value by R$ 18 |
Others | 1,598 | 590 | NAV Valuation | NAV | N/A | 1% / 2% | 128 | (41) | Increased NAV in 100 basis points would increase fair value by R$ 26 (R$ 26 – 2019) and lower NAV in 200 basis points would decrease fair value by R$ 52 (R$ 52 – 2019) |
F-33
Vinci Partners Investimentos Ltda.
Notes to the consolidated financial statements
All amounts in thousands of reais
6 Other assets
2020 | 2019 | |||||||
Prepayments to employees (i) | 474 | 817 | ||||||
Sundry advances | 159 | 192 | ||||||
Advances to projects in progress (ii) | 7,882 | 4,009 | ||||||
Transaction costs (iii) | 3,571 | - | ||||||
Other prepayments | 81 | 117 | ||||||
Related parties receivables (iv) | 260 | 301 | ||||||
Guarantee deposits | 1,040 | 806 | ||||||
Sublease receivables | 398 | - | ||||||
Others | 58 | 132 | ||||||
13,923 | 6,374 | |||||||
Current | 12,383 | 5,044 | ||||||
Non-current | 1,540 | 1,330 | ||||||
13,923 | 6,374 |
(i) | Refers to amounts receivable from employees, in which the amount is rated at the interest rate of the Interbank Deposit Certificate (CDI). |
(ii) | Refers to costs incurred by projects related to funds administered by Vinci, that are initially paid by the Group and subsequently reimbursed. |
(iii) | Refers to transaction costs incurred by Vinci related to the initial public offering. |
(iv) | Refers to an intercompany transaction. See note 19 for more details. |
F-34
Vinci Partners Investimentos Ltda.
Notes to the consolidated financial statements
All amounts in thousands of reais
7 | Investments |
(a) | The main information on the ownership interest held can be summarized as follows: |
Entity | Principal activities | Place of business | Quotas | Equity | 2020 Profit / (Loss) For the year | |||||||||
Vinci Assessoria Financeira Ltda. | Financial advisory services | Brazil | 100% | 3,464 | 20,059 | |||||||||
Vinci Equities Gestora de Recursos Ltda. | Equity Funds Management | Brazil | 100% | 4,584 | 30,045 | |||||||||
Vinci Gestora de Recursos Ltda. | Equity Funds Management | Brazil | 100% | 7,967 | 10,968 | |||||||||
Vinci Capital Gestora de Recursos Ltda. | Private Equity Funds Management | Brazil | 100% | 176 | 33,460 | |||||||||
Vinci Gestão de Patrimônio Ltda. | Funds management | Brazil | 100% | 8,440 | 31,987 | |||||||||
Vinci Real Estate Gestora de Recursos Ltda. | Real Estate Funds Management | Brazil | 100% | 4,505 | 21,393 | |||||||||
Vinci Capital Partners GP Limited | Funds General Partners | Cayman Islands | 100% | 171 | (203 | ) | ||||||||
Vinci USA LLC | Offhsore Funds Management | USA | 100% | 8,380 | 3,570 | |||||||||
Vinci International Real Estate Ltd (*) | Offhsore Funds Management | USA | 100% | 61 | - | |||||||||
Vinci Crédito Gestora de Recurso Ltda. | Credit Funds Managament | Brazil | 100% | 1,104 | 159 | |||||||||
Vinci Infraestrutura Gestora de Recursos Ltda. | Infrastructure Funds Management | Brazi | 100% | 24,640 | 17,942 | |||||||||
Vinci Financial Ventures (VF2) GP | Funds General Partners | USA | 100% | - | (28 | ) | ||||||||
Vinci Capital Partners GP III Limited | Funds General Partners | Cayman Islands | 100% | 69 | (25 | ) | ||||||||
Amalfi Empreendimentos e Participações Ltda. | Non-operational Company | Brazil | 100% | 18 | (72 | ) | ||||||||
GGN GP LLC | Funds General Partners | USA | 100% | 208 | - |
(*) Vinci International Real Estate Ltd is controlled by Vinci USA LLC, which holds 75% of interest in the company
F-35
Vinci Partners Investimentos Ltda.
Notes to the consolidated financial statements
All amounts in thousands of reais
Entity | Principal activities | Place of business | Quotas | Equity | 2019 Profit / (Loss) For the year | |||||||||
Vinci Assessoria Financeira Ltda. | Financial advisory services | Brazil | 100% | 532 | 3,143 | |||||||||
Vinci Equities Gestora de Recursos Ltda. | Equity Funds Management | Brazil | 100% | 30,531 | 40,974 | |||||||||
Vinci Gestora de Recursos Ltda. | Equity Funds Management | Brazil | 100% | 8,201 | 2,448 | |||||||||
Vinci Capital Gestora de Recursos Ltda. | Private Equity Funds Management | Brazil | 100% | 18,107 | 72,230 | |||||||||
Vinci Gestão de Patrimônio Ltda. | Funds management | Brazil | 100% | 10,680 | 19,620 | |||||||||
Vinci Real Estate Gestora de Recursos Ltda. | Real Estate Funds Management | Brazil | 80% | 12,804 | 10,515 | |||||||||
Vinci Capital Partners GP Limited | Funds General Partners | Cayman Islands | 100% | 305 | (1,224 | ) | ||||||||
Vinci USA LLC | Offhsore Funds Management | USA | 100% | 1,755 | 8,816 | |||||||||
Vinci International Real Estate Ltd (*) | Offhsore Funds Management | USA | 100% | 198 | 681 | |||||||||
Vinci Crédito Gestora de Recurso Ltda. | Credit Funds Managament | Brazil | 100% | (5 | ) | (272 | ) | |||||||
Vinci Infraestrutura Gestora de Recursos Ltda. | Infrastructure Funds Management | Brazi | 80% | 19,849 | 12,520 | |||||||||
Vinci Financial Ventures (VF2) GP | Funds General Partners | USA | 100% | 15 | (14 | ) | ||||||||
Vinci Capital Partners GP III Limited | Funds General Partners | Cayman Islands | 100% | 75 | (107 | ) | ||||||||
Amalfi Empreendimentos e Participações Ltda. | Non-operational Company | Brazil | 100% | 1 | (163 | ) | ||||||||
GGN GP LLC | Funds General Partners | USA | 100% | - | - |
(*) Vinci International Real Estate Ltd is controlled by Vinci USA LLC, which holds 75% of interest in the company
F-36
Vinci Partners Investimentos Ltda.
Notes to the consolidated financial statements
All amounts in thousands of reais
(b) | Non-controlling interests (NCI) |
Set out below is summarized financial information for each subsidiary that has non-controlling interests that are material to the group. The amounts disclosed for each subsidiary are before inter-company eliminations.
Vinci Real Estate | Vinci Infraestrutura | Vinci Int'l Real Estate | Total | |||||||||||||||||||||||||||||
2020(*) | 2019 | 2020(**) | 2019 | 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||||
Summarized Balance Sheet | ||||||||||||||||||||||||||||||||
Current assets | - | 15,832 | - | 10,352 | 270 | 500 | 270 | 26,684 | ||||||||||||||||||||||||
Current liabilities | - | (4,699 | ) | - | (2,957 | ) | (209 | ) | (302 | ) | (209 | ) | (7,958 | ) | ||||||||||||||||||
Current net assets | - | 11,133 | - | 7,395 | 61 | 198 | 61 | 18,726 | ||||||||||||||||||||||||
Non-current assets | - | 9,936 | - | 14,870 | - | - | - | 24,806 | ||||||||||||||||||||||||
Non-current liabilities | - | (8,258 | ) | - | (2,419 | ) | - | - | - | (10,677 | ) | |||||||||||||||||||||
Non-current net assets | - | 1,678 | - | 12,451 | - | - | - | 14,129 | ||||||||||||||||||||||||
Net assets | - | 12,811 | - | 19,846 | 61 | 198 | 61 | 32,855 | ||||||||||||||||||||||||
Accumulated NCI | - | 2,562 | - | 3,969 | 15 | 50 | 15 | 6,581 |
(*) As informed in note 2.1 (a), in August 31, 2020 Vinci acquired the remaining interest of its investee Vinci Real Estate Gestora de Recursos Ltda from the minority quotaholder.
(*) As informed in note 2.1 (a), in November 21, 2020 Vinci acquired the remaining interest of its investee Vinci Infraestrutura Gestora de Recursos Ltda from the minority quotaholder.
F-37
Vinci Partners Investimentos Ltda.
Notes to the consolidated financial statements
All amounts in thousands of reais
Summarized statement | Vinci Real Estate | Vinci Infraestrutura | Vinci International Real Estate | Total | ||||||||||||||||||||||||||||
of comprehensive income | 2020(*) | 2019 | 2020(**) | 2019 | 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||||
Revenue | 21,367 | 19,182 | 23,394 | 20,110 | 237 | 1,037 | 44,998 | 40,329 | ||||||||||||||||||||||||
Profit for the period | 15,020 | 10,519 | 16,865 | 12,520 | - | 681 | 31,885 | 23,720 | ||||||||||||||||||||||||
Other comprehensive income | - | - | - | - | - | |||||||||||||||||||||||||||
Total comprehensive income | 15,020 | 10,519 | 16,865 | 12,520 | - | 681 | 31,885 | 23,720 | ||||||||||||||||||||||||
Profit allocated to NCI before dividends | 3,004 | 2,104 | 3,373 | 2,504 | - | 170 | 6,377 | 4,778 | ||||||||||||||||||||||||
- | ||||||||||||||||||||||||||||||||
Disproportionate dividends distributions | (2,037 | ) | (670 | ) | (5,385 | ) | 151 | - | - | (7,422 | ) | (519 | ) | |||||||||||||||||||
Profit/(loss) allocated to NCI | 967 | 1,434 | (2,012 | ) | 2,655 | - | 170 | (1,045 | ) | 4,259 |
(*) The statement of comprehensive income is presented up to August 31, 2020 once Vinci acquired the remaining interest of its investee Vinci Real Estate Investimentos Ltda from the minority quotaholder at this date, as informed in note 2.1.
(*) The statement of comprehensive income is presented up to October 31, 2020 once Vinci acquired the remaining interest of its investee Vinci Real Estate Investimentos Ltda from the minority quotaholder on November 21, 2020, as informed in note 2.1.
F-38
Vinci Partners Investimentos Ltda.
Notes to the consolidated financial statements
All amounts in thousands of reais
8 | Property and equipment |
2020 | ||||||||||||||||||||||||
Furniture and fittings stuffs | Improvements in properties of third parties | Computers and peripherals- improvements | Equipaments and tools | Work of arts and others | Total | |||||||||||||||||||
Cost | ||||||||||||||||||||||||
At January 1, 2020 | 9,003 | 42,534 | 5,560 | 8,459 | 785 | 66,341 | ||||||||||||||||||
Aquisitions | 1,462 | - | 242 | 235 | 76 | 2,015 | ||||||||||||||||||
Foreign Exchange variations of property and equipment abroad | - | 4,361 | - | 1,291 | - | 5,652 | ||||||||||||||||||
At December 31, 2020 | 10,465 | 46,895 | 5,802 | 9,985 | 861 | 74,008 | ||||||||||||||||||
Accumulated depreciation | ||||||||||||||||||||||||
At January 1, 2020 | (6,008 | ) | (31,751 | ) | (4,913 | ) | (7,257 | ) | - | (49,929 | ) | |||||||||||||
Annual depreciation | (787 | ) | (1,580 | ) | (351 | ) | (638 | ) | - | (3,356 | ) | |||||||||||||
Foreign Exchange variations of property and equipment abroad | - | (4,500 | ) | - | (1,180 | ) | - | (5,680 | ) | |||||||||||||||
At December 31, 2020 | (6,795 | ) | (37,831 | ) | (5,264 | ) | (9,075 | ) | - | (58,965 | ) | |||||||||||||
Net book value | ||||||||||||||||||||||||
At January 1, 2020 | 2,995 | 10,783 | 647 | 1,202 | 785 | 16,412 | ||||||||||||||||||
At December 31, 2020 | 3,670 | 9,064 | 538 | 910 | 861 | 15,043 | ||||||||||||||||||
Annual depreciation rate - % | 10 | From 10 to 20 | 20 | 10 |
Extension options in offices leases have not been included in the lease liability, because the Group could replace the assets without significant cost or business disruption.
F-39
Vinci Partners Investimentos Ltda.
Notes to the consolidated financial statements
All amounts in thousands of reais
2019 | ||||||||||||||||||||||||
Furniture and fittings stuffs | Improvements in properties of third parties | Computers and peripherals - improvements |
Equipaments and tools | Work of arts and others | Total | |||||||||||||||||||
Cost | ||||||||||||||||||||||||
At January 1, 2019 | 8,968 | 41,386 | 5,253 | 7,992 | 616 | 64,215 | ||||||||||||||||||
Aquisitions | 35 | 582 | 307 | 84 | 169 | 1,177 | ||||||||||||||||||
Foreign Exchange variations of property and equipment abroad | - | 566 | - | 383 | - | 949 | ||||||||||||||||||
At December 31, 2019 | 9,003 | 42,534 | 5,560 | 8,459 | 785 | 66,341 | ||||||||||||||||||
Accumulated depreciation | ||||||||||||||||||||||||
At January 1, 2019 | (5,105 | ) | (29,090 | ) | (4,390 | ) | (6,300 | ) | - | (44,885 | ) | |||||||||||||
Annual depreciation | (903 | ) | (2,075 | ) | (523 | ) | (818 | ) | - | (4,319 | ) | |||||||||||||
Foreign Exchange variations of property and equipment abroad | - | (586 | ) | - | (139 | ) | - | (725 | ) | |||||||||||||||
At December 31, 2019 | (6,008 | ) | (31,751 | ) | (4,913 | ) | (7,257 | ) | - | (49,929 | ) | |||||||||||||
Net book value | ||||||||||||||||||||||||
At January 1, 2019 | 3,863 | 12,296 | 863 | 1,692 | 616 | 19,330 | ||||||||||||||||||
At December 31, 2019 | 2,995 | 10,783 | 647 | 1,202 | 785 | 16,412 | ||||||||||||||||||
Annual depreciation rate - % | 10 | From 10 to 20 | 20 | 10 |
F-40
Vinci Partners Investimentos Ltda.
Notes to the consolidated financial statements
All amounts in thousands of reais
9 | Intangible assets |
Intangible assets include expenditures with the development of the software product for Risk System and Portfolio Allocation, whose purpose is to evaluate the risk of the funds and to allocate the clients' portfolio.
Economic benefits will flow to the Group from the service fees charged to the clients for the sale of advisory services on market risks or through a service which the Vinci's managers named Wealth Management.
The Entity assesses, at each reporting date, whether there is an indication that an intangible asset may be impaired. If any indication exists, the Entity estimates the asset's recoverable amount. There were no indications of impairment of intangible assets for the years ended December 31, 2020 and 2019.
2020 | ||||||||
Software development | Total | |||||||
Cost | ||||||||
At January 1, 2020 | 21,908 | 21,908 | ||||||
Purchases | - | - | ||||||
Foreign exchange variation of intangible assets abroad | 1,815 | 1,815 | ||||||
At December 31, 2020 | 23,723 | 23,723 | ||||||
Accumulated amortization | ||||||||
At January 1, 2020 | (19,188 | ) | (19,188 | ) | ||||
Annual amortization | (1,286 | ) | (1,286 | ) | ||||
Foreign exchange variation of intangible assets abroad | (1,808 | ) | (1,808 | ) | ||||
At December 31, 2020 | (22,282 | ) | (22,282 | ) | ||||
At January 1, 2020 | 2,720 | 2,720 | ||||||
At December 31, 2020 | 1,441 | 1,441 | ||||||
Amortization rate (per year) - % | 20 | % | ||||||
F-41
Vinci Partners Investimentos Ltda.
Notes to the consolidated financial statements
All amounts in thousands of reais
2019 | ||||||||
Software development | Total | |||||||
Cost | ||||||||
At January 1, 2019 | 21,105 | 21,105 | ||||||
Purchases | 560 | 560 | ||||||
Foreign exchange variation of intangible assets abroad | 243 | 243 | ||||||
At December 31, 2019 | 21,908 | 21,908 | ||||||
Accumulated amortization | ||||||||
At January 1, 2019 | (17,272 | ) | (17,272 | ) | ||||
Annual amortization | (1,680 | ) | (1,680 | ) | ||||
Foreign exchange variation of intangible assets abroad | (236 | ) | (236 | ) | ||||
At December 31, 2019 | (19,188 | ) | (19,188 | ) | ||||
At January 1, 2019 | 3,833 | 3,833 | ||||||
At December 31, 2019 | 2,720 | 2,720 | ||||||
Amortization rate (per year) - % | 20 | % | ||||||
F-42
Vinci Partners Investimentos Ltda.
Notes to the consolidated financial statements
All amounts in thousands of reais
10 | Leases |
This note provides information for leases where the Group is a lessee. The notes also provide the information of subleases agreements where the Group is a lessor, once part of the assets leased by the Group is subleased to third parties.
(i) | Amount recognized in the balance sheet |
The balance sheet shows the following amounts relating to leases:
12/31/2020 | 12/31/2019 | |||||||
Sub-lease receivable | ||||||||
Rio de Janeiro Office - BM 336 | 2,963 | 5,600 | ||||||
Total | 2,963 | 5,600 | ||||||
Current | 2,963 | 2,883 | ||||||
Non-current | - | 2,717 | ||||||
Total | 2,963 | 5,600 | ||||||
Right of use assets | ||||||||
Rio de Janeiro Office - BM 336 | 82,117 | 79,101 | ||||||
São Paulo Office – JRA | 4,987 | 6,012 | ||||||
NY Office - third Avenue | 3,374 | 3,271 | ||||||
Total | 90,478 | 88,384 | ||||||
Lease liabilities | ||||||||
Rio de Janeiro Office - BM 336 | (96,507 | ) | (92,444 | ) | ||||
São Paulo Office – JRA | (5,972 | ) | (6,933 | ) | ||||
NY Office - third Avenue | (3,720 | ) | (3,514 | ) | ||||
Total | (106,199 | ) | (102,891 | ) | ||||
Current | (19,828 | ) | (17,738 | ) | ||||
Non-current | (86,371 | ) | (85,153 | ) | ||||
Total | (106,199 | ) | (102,891 | ) |
Additions to the right-of-use assets during the 2020 financial year were R$ 9,740 (R$ 3,544 during 2019).
F-43
Vinci Partners Investimentos Ltda.
Notes to the consolidated financial statements
All amounts in thousands of reais
(ii) | Amount recorded in the statement of profit or loss |
The statement of profit or loss shows the following amounts relating to leases:
2020 | 2019 | 2018 | ||||||||||
Right of use assets depreciation | (8,586 | ) | (10,521 | ) | (11,447 | ) | ||||||
Financial expense | (12,209 | ) | (11,980 | ) | (11,609 | ) | ||||||
(20,795 | ) | (22,501 | ) | (23,056 | ) |
The total cash outflow for leases in 2020 was R$ 20,141 (R$ 19,027 in 2019 and R$ 22,871 in 2018).
(iii) | The Group's leasing activities and how these are accounted for |
The Group leases various offices. Rental contracts are typically made for fixed periods of 5 years to 10 years, but may have extension options as described in (iv) below.
Contracts may contain both lease and non-lease components. The group allocates the consideration in the contract to the lease and non-lease components based on their relative stand-alone prices.
For all periods presented, the sub-leases were classified as finance leases on a lessor perspective. Therefore, the Group account the sub-leases on a lease-by-lease basis, subtracting the right of use assets and recognizing a receivable related to the present value of the receivables of the sub-lease.
Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose any covenants other than the security interests in the leased assets that are held by the lessor. Leased assets may not be used as security for borrowing purposes.
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of the following lease payments:
- fixed payments (including in-substance fixed payments), less any lease incentives receivable
- variable lease payment that are based on an index or a rate, initially measured using the index or rate as at the commencement date
- amounts expected to be payable by the group under residual value guarantees
- the exercise price of a purchase option if the group is reasonably certain to exercise that option, and
- payments of penalties for terminating the lease, if the lease term reflects the group exercising that option.
Lease payments to be made under reasonably certain extension options are also included in the measurement of the liability. The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, which is generally the case for leases in the Group, the lessee's incremental borrowing rate is used, being the rate that the individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment with similar terms, security and conditions.
To determine the incremental borrowing rate, the Group:
- where possible, uses recent third-party financing received by the individual lessee as a starting point, adjusted to reflect changes in financing conditions since third party financing was received
F-44
Vinci Partners Investimentos Ltda.
Notes to the consolidated financial statements
All amounts in thousands of reais
- uses a build-up approach that starts with a risk-free interest rate adjusted for credit risk for leases, which does not have recent third party financing, and
- make adjustments specific to the lease, e.g. term, country, currency and security.
The Group is exposed to potential future increases in variable lease payments based on an index, which are not included in the lease liability until they take effect. When adjustments to lease payments based on an index or rate take effect, the lease liability is reassessed and adjusted against the right-of-use asset.
Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.
Right-of-use assets are measured at cost comprising the following:
- the amount of the initial measurement of lease liability
- any lease payments made at or before the commencement date less any lease incentives received
- any initial direct costs, and
- restoration costs.
Right-of-use assets are generally depreciated over the shorter of the asset's useful life and the lease term on a straight-line basis. If the Group is reasonably certain to exercise a purchase option, the right-of-use asset is depreciated over the underlying asset's useful life.
(iv) | Extension and termination options |
Extension and termination options are included in a number of property and equipment leases across the Group. These are used to maximize operational flexibility in terms of managing the assets used in the group's operations. The majority of extension and termination options held are exercisable only by the Group and not by the respective lessor.
F-45
Vinci Partners Investimentos Ltda.
Notes to the consolidated financial statements
All amounts in thousands of reais
11 | Accounts payable |
12/31/2020 | 12/31/2019 | |||||||
Dividends payable (i) | 123,191 | 34,410 | ||||||
Rent payable – prior month expense | 1,673 | 1,260 | ||||||
Funds quotas acquisition (ii) | - | 1,835 | ||||||
Other payables | 964 | 197 | ||||||
125,828 | 37,702 | |||||||
Current | 125,795 | 37,669 | ||||||
Non-current | 33 | 33 |
(i) On April 30, 2019, the partners approved a distribution of dividends in the amount of R$ 67,400, based on the available retained earnings and results for the accumulated period as a base or balance until the available data. As of December 31, 2019, the amount of R$ 33,955 was paid, with the outstanding balance of R$ 33,445 remaining on December 31, 2019.
The entire amount recognised as dividends payable as of December 31, 2019, was settled in January 2020.
On November 30, 2020, the partners approved a distribution of dividends in the amount of R$ 133,194, based on the available retained earnings and results for the accumulated period as a base or balance until the available data. As of December 31, 2020, the amount of R$ 37,426 was paid, with the outstanding balance of R$ 95,768 remaining on December 31, 2020.
On December 31, 2020, the partners approved a distribution of dividends for the results of the current month. Based on the balance until the available data, Vinci settled an additional provision for dividends payable of R$ 27,423.
(ii) On December 29, 2016, Vinci acquired FIP and FII quotas with the commitment to pay the amount of R$ 2,038 in up to 4 years. This commitment is subjected to a discount rate of 10.8% per year and was settled in August 2020.
F-46
Vinci Partners Investimentos Ltda.
Notes to the consolidated financial statements
All amounts in thousands of reais
12 | Labor and social security obligations |
2020 | 2019 | |||||||
Profits sharing | 37,802 | 28,563 | ||||||
Labor provisions | 2,922 | 2,385 | ||||||
40,724 | 30,948 |
The accrual for profits sharing payable on December 31, 2020 was entirely paid in January, 2021. Profit sharing is calculated based on the performance review of each employee plus the area performance, in accordance with an Entity policies.
13 | Taxes and contributions payable |
2020 | 2019 | |||||||
Income tax | 14,063 | 8,926 | ||||||
Social contribution | 5,082 | 3,385 | ||||||
Social Contribution on Revenues (COFINS) | 1,882 | 2,292 | ||||||
Social Integration Program (PIS) | 407 | 483 | ||||||
Service tax (ISS) on billing | 1,160 | 1,078 | ||||||
Withholding Income Tax (IRRF) deducted from third parties | 80 | 41 | ||||||
Others | 204 | 92 | ||||||
22,878 | 16,297 |
F-47
Vinci Partners Investimentos Ltda.
Notes to the consolidated financial statements
All amounts in thousands of reais
14 | Equity |
(a) | Capital |
The capital comprises 8,730,000 quotas (2019 – 8,595,000), with a par value of R$ 1.00 each (2018 - R$ 1.00 each). All issued quotas are paid up. The liability of the partners is personally limited to the value of their respective quotas, but all partners are jointly liable for the payment of capital.
In June 29 2018, the quotaholders unanimously approved a capital increase of R$ 270. Accordingly, capital was increased from R$ 8,550 to R$ 8,820 through the issue of 270,000 quotas at R$ 1.00 each. The capital increase includes conversion of R$ 158 of advance to capital increase, occurred in 2017, in capital, therefore, the cash portion in 2018 was R$ 112.
On May 31, 2019, the quotaholders unanimously approved a capital decrease of R$ 225. Accordingly, capital was decreased from R$ 8,820 to R$ 8,595 through the redeem of 225,000 quotas at R$ 1.00 each.
On March 16, 2020, the quotaholders unanimously approved a capital increase of R$ 90. Accordingly, capital was increased from R$ 8,595 to R$ 8,685 through the issue of 90,000 quotas at R$ 1.00 each.
On August 8, 2020, the quotaholders unanimously approved a capital increase of R$ 45. Accordingly, capital was increased from R$ 8,685 to R$ 8,730 through the issue of 45,000 quotas at R$ 1.00 each.
F-48
Vinci Partners Investimentos Ltda.
Notes to the consolidated financial statements
All amounts in thousands of reais
The Entity's quotaholders as at December 31, 2020, 2019 and 2018 are presented in the table below:
Quotaholder | 01/01/2018 Quantity | Subscribed | Transferred | Cancelled | 12/31/2018 Quantity | |||||||||||||||
Gilberto Sayão da Silva | 2,412,000.00 | - | - | - | 2,412,000.00 | |||||||||||||||
Alessandro Monteiro Morgado Horta | 1,206,000.00 | - | - | - | 1,206,000.00 | |||||||||||||||
Paulo Fernando Carvalho de Oliveira | 1,206,000.00 | - | - | - | 1,206,000.00 | |||||||||||||||
Salzburg Empreendimentos e Participações Ltda. | 1,206,000.00 | - | - | - | 1,206,000.00 | |||||||||||||||
Others Quotaholders | 2,520,000.00 | 270,000.00 | - | - | 2,790,000.00 | |||||||||||||||
Total | 8,550,000.00 | 270,000.00 | - | - | 8,820,000.00 |
Quotaholder | 12/31/2018 Quantity | Subscribed | Transferred | Cancelled | 12/31/2019 Quantity | |||||||||||||||
Gilberto Sayão da Silva | 2,412,000.00 | - | (2,412,000.00 | ) | - | - | ||||||||||||||
Alessandro Monteiro Morgado Horta | 1,206,000.00 | - | (1,206,000.00 | ) | - | - | ||||||||||||||
Paulo Fernando Carvalho de Oliveira | 1,206,000.00 | - | (1,206,000.00 | ) | - | - | ||||||||||||||
Salzburg Empreendimentos e Participações Ltda. | 1,206,000.00 | - | - | - | 1,206,000.00 | |||||||||||||||
Vinci Partners Participações Ltda. | - | - | 4,194,000.00 | - | 4,194,000.00 | |||||||||||||||
Treasury Quotas | - | - | 225,000.00 | (225,000.00 | ) | - | ||||||||||||||
Others Quotaholders | 2,790,000.00 | - | 405,000.00 | - | 3,195,000.00 | |||||||||||||||
Total | 8,820,000.00 | - | - | (225,000.00 | ) | 8,595,000.00 |
Quotaholder | 12/31/2019 Quantity | Subscribed | Transferred | Cancelled | 12/31/2020 Quantity | |||||||||||||||
Salzburg Empreendimentos e Participações Ltda. | 1,206,000.00 | - | - | - | 1,206,000.00 | |||||||||||||||
Vinci Partners Participações Ltda. | 4,194,000.00 | - | - | - | 4,194,000.00 | |||||||||||||||
Others Quotaholders | 3,195,000.00 | 135,000 | - | - | 3,330,000.00 | |||||||||||||||
Total | 8,595,000.00 | 135,000 | - | - | 8,730,000.00 |
F-49
Vinci Partners Investimentos Ltda.
Notes to the consolidated financial statements
All amounts in thousands of reais
(b) | Treasury quotas |
Treasury quotas comprises the quotas acquired by the Entity. The acquisition of its own quotas and the disposal of those quotas are capital transactions with the quotaholders and do not affect the income statement. During 2019 the Entity acquired 225,000 quotas from one of its quotaholders at a price of R$ 1.00 per quota and subsequently cancelled these quotas.
(c) | Retained earnings |
Earning reserves comprises the net profit generated by the Entity which were not distributed to their quotaholders or approved to be distributed by the Entity management.
(d) | Other reserves |
Comprises the exchange variation in investments made on investees which have a functional currency other than Brazilian Reais, the Entity functional currency. When a foreign operation is sold , the associated exchange differences are reclassified to profit or loss, as part of the gain or loss on sale.
(e) Dividends
In accordance with the Entity by-laws dividends are distributed based on the resolution of the partners. Therefore, dividends could be distributed on a non-proportional basis among quotaholders, which are comprised by the partners of Vinci. On annual basis the partners determine the dividends amount to be paid to each quotaholder.
In 2018 the Entity declared R$ 45,759 as dividends which was fully paid. In 2019 the Entity declared R$ 109,654 as dividends. During 2019 dividends were paid in the amount of R$ 76,226 (R$ 45,885 in 2018).
In 2019 the Entity declared R$ 109,654 as dividends which was fully paid. In 2020 the Entity declared and approved R$ 261,629 as dividends which R$ 123,191 remains unpaid on December 31, 2020. During 2020 dividends were paid in the amount of R$ 176,287 (R$ 76,226 in 2019).
F-50
Vinci Partners Investimentos Ltda.
Notes to the consolidated financial statements
All amounts in thousands of reais
(f) Basic and diluted earnings per quota
a) Basic earning per quota | 2020 | 2019 | 2018 | |||||||||
From continuing operations attributable to the ordinary equity holders of the Entity | 19.60 | 17.41 | 6.52 | |||||||||
Total basic earning per quota attributable to the ordinary equity holders of the Entity | 19.60 | 17.41 | 6.52 |
b) Diluted earning per quota | 2020 | 2019 | 2018 | |||||||||
From continuing operations attributable to the ordinary equity holders of the Entity | 19.60 | 17.41 | 6.52 | |||||||||
Total basic earning per quota attributable to the ordinary equity holders of the Entity | 19.60 | 17.41 | 6.52 |
c) Reconciliations of earnings used in calculating earnings per quota
Basic earnings per quota: | 2020 | 2019 | 2018 | |||||||||
Profit attributable to the ordinary equity holders of the Entity used in calculating basic earnings per quota: | ||||||||||||
From continuing operations | 170,199 | 151,373 | 56,613 | |||||||||
170,199 | 151,373 | 56,613 |
Diluted earnings per quota: | 2020 | 2019 | 2018 | |||||||||
Profit from continuing operations attributable to the ordinary equity holders of the Entity | ||||||||||||
Used in calculating basic earnings per quota | 170,199 | 151,373 | 56,613 | |||||||||
Used in calculating diluted earnings per quota | 170,199 | 151,373 | 56,613 |
d) Weighted average number of quotas used as the denominator
Number 2020 | Number 2019 | Number 2018 | ||||||||||
Weighted average number of ordinary quotas used as the denominator in calculating basic earnings per quota: | 8,683,893 | 8,688,082 | 8,686,849 | |||||||||
Adjustments for calculation of diluted earnings per quota: | - | - | - | |||||||||
Weighted average number of ordinary quotas and potential ordinary quotas used as the denominator in calculating diluted earnings per quota | 8,683,893 | 8,688,082 | 8,686,849 |
F-51
Vinci Partners Investimentos Ltda.
Notes to the consolidated financial statements
All amounts in thousands of reais
15 | Revenue from services rendered |
2020 | 2019 | 2018 | ||||||||||
Gross revenue from fund management | 285,798 | 233,826 | 152,571 | |||||||||
Gross revenue from realized performance fees | 31,358 | 48,295 | 6,383 | |||||||||
Gross revenue from unrealized performance fees | 10,511 | 17,033 | - | |||||||||
Gross revenue from advisory | 31,569 | 11,939 | 21,383 | |||||||||
Gross revenue from services rendered | 359,236 | 311,093 | 180,337 | |||||||||
In Brazil | 264,493 | 215,941 | 122,935 | |||||||||
Abroad | 94,743 | 95,152 | 57,402 | |||||||||
Taxes and contributions | ||||||||||||
COFINS | (9,488 | ) | (6,494 | ) | (3,688 | ) | ||||||
PIS | (2,057 | ) | (1,407 | ) | (798 | ) | ||||||
ISS | (7,799 | ) | (6,475 | ) | (3,647 | ) | ||||||
Net revenue from services rendered | 339,892 | 296,717 | 172,204 | |||||||||
Net revenue from fund management | 271,266 | 223,808 | 146,551 | |||||||||
Net revenue from realized performance fees | 29,866 | 45,949 | 6,042 | |||||||||
Net revenue from unrealized performance fees | 9,918 | 16,071 | - | |||||||||
Net revenue from advisory | 28,842 | 10,889 | 19,611 |
F-52
Vinci Partners Investimentos Ltda.
Notes to the consolidated financial statements
All amounts in thousands of reais
16 | General and administrative expenses |
2020 | 2019 | 2018 | ||||||||||
Personnel | (37,175 | ) | (33,748 | ) | (28,307 | ) | ||||||
Profit sharing (a) | (37,198 | ) | (28,788 | ) | (15,886 | ) | ||||||
(74,373 | ) | (62,536 | ) | (44,193 | ) | |||||||
Third party expense (b) | (24,651 | ) | (19,497 | ) | (15,146 | ) | ||||||
Right of use depreciation (c) | (8,586 | ) | (10,521 | ) | (11,447 | ) | ||||||
Depreciation and amortization (d) | (4,642 | ) | (5,998 | ) | (6,074 | ) | ||||||
Other operating expenses (e) | (5,199 | ) | (5,021 | ) | (5,811 | ) | ||||||
Travel and representations | (933 | ) | (3,589 | ) | (2,434 | ) | ||||||
Condominium expenses | (2,818 | ) | (2,953 | ) | (2,639 | ) | ||||||
Payroll taxes | (2,132 | ) | (2,230 | ) | (2,094 | ) | ||||||
Rental expense | (428 | ) | (313 | ) | (160 | ) | ||||||
Telephony services | (278 | ) | (315 | ) | (508 | ) | ||||||
Legal | (146 | ) | (204 | ) | (125 | ) | ||||||
Trade receivables allowance | (59 | ) | (69 | ) | (52 | ) | ||||||
Office consumables | - | (41 | ) | (72 | ) | |||||||
(124,245 | ) | (113,287 | ) | (90,755 | ) |
(a) | Profit sharing |
According to the profit-sharing program and based on Law 10,101 of December 19, 2000 and on objectives established at the beginning of each year, management approved the payment of profit sharing in the amount of R$ 37,198 (R$ 28,788 in 2019 and R$ 15,886 in 2018) for the year ended December 31, 2020.
(b) Third party expense
Third party expense is composed for accounting, advisory, information technology, and other contracted services.
(c) | Right of use depreciation |
See note 10 for more details.
(d) | Depreciation and amortization |
The amount is mainly comprised by property and equipment depreciation.
(e) | Other operating expenses |
The amount is mainly comprised by office expenses, including energy, cleaning, maintenance and conservation, among others several expenses.
F-53
Vinci Partners Investimentos Ltda.
Notes to the consolidated financial statements
All amounts in thousands of reais
17 | Finance profit/(loss) |
2020 | 2019 | 2018 | ||||||||||
Investment income (i) | 9,066 | 20,244 | 7,464 | |||||||||
Foreign currency variation income | 416 | 56 | 169 | |||||||||
Financial revenue on sublease agreements | 519 | 800 | 1,025 | |||||||||
Other finance income | 49 | 61 | 65 | |||||||||
Finance income | 10,050 | 21,161 | 8,722 | |||||||||
Financial expense on lease agreements | (12,209 | ) | (11,980 | ) | (11,609 | ) | ||||||
Bank fees | (258 | ) | (86 | ) | (109 | ) | ||||||
Investment losses (i) | (234 | ) | - | (334 | ) | |||||||
Fines on taxes | - | (3 | ) | (5 | ) | |||||||
Financial expense on liabilities at amortized cost | (203 | ) | (181 | ) | (162 | ) | ||||||
Interest on taxes | - | (30 | ) | (28 | ) | |||||||
Foreign currency variation expense | (193 | ) | (196 | ) | (225 | ) | ||||||
Finance costs | (13,097 | ) | (12,476 | ) | (12,472 | ) | ||||||
Finance profit/(loss), net | (3,047 | ) | 8,865 | (3,749 | ) |
(i) | Segregated investment income result is demonstrated below: |
2020 | 2019 | 2018 | ||||||||||
Mutual funds and fixed income investments | 2,604 | 2,819 | 2,031 | |||||||||
Private equity funds | 6,462 | 16,803 | 5,378 | |||||||||
Real Estate listed funds | - | 99 | 36 | |||||||||
Public equities funds | - | 523 | 17 | |||||||||
9,066 | 20,244 | 7,464 | ||||||||||
Mutual funds | - | - | (14 | ) | ||||||||
Private equity funds | (71 | ) | - | (320 | ) | |||||||
Real Estate listed funds | (77 | ) | - | - | ||||||||
Public equities funds | (86 | ) | - | - | ||||||||
(234 | ) | - | 7,130 |
F-54
Vinci Partners Investimentos Ltda.
Notes to the consolidated financial statements
All amounts in thousands of reais
18 | Income tax and social contribution |
The Entity is taxed based on the actual taxable profit regime, and its subsidiaries, except for Vinci Capital Gestora Ltda are taxed based on the deemed profit. Vinci Capital was taxed on deemed profit until 2019 and changed to profit regime since January 1st, 2020.
Vinci has tax losses and negative basis resulting from previous years and deferred income tax and social contribution credits are recognized since there is expectation of future tax results for these companies. The tax credit arising from the tax loss and negative basis under the taxable profit regime on December 31, 2020 is R$ 2,769 (R$ 1,161 on December 31, 2019).
No foreign subsidiaries presented net income for taxation of income and social contribution taxes in 2020, 2019 and 2018.
The income tax and social contribution charge on the results for the year can be summarized as follows:
2020 | 2019 | 2018 | ||||||||||
Current income tax | (11,462 | ) | (23,738 | ) | (14,333 | ) | ||||||
Current social contribution | (31,204 | ) | (8,621 | ) | (5,227 | ) | ||||||
(42,666 | ) | (32,359 | ) | (19,560 | ) | |||||||
Deferred income tax | (206 | ) | (3,033 | ) | (1,075 | ) | ||||||
Deferred social contribution | (574 | ) | (1,091 | ) | (387 | ) | ||||||
(780 | ) | (4,124 | ) | (1,462 | ) |
F-55
Vinci Partners Investimentos Ltda.
Notes to the consolidated financial statements
All amounts in thousands of reais
Deferred tax balances
2020 | 2019 | |||||||
Deferred tax assets | ||||||||
Tax losses | 2,769 | 1,161 | ||||||
Leases | 1,799 | 1,046 | ||||||
Total | 4,568 | 2,207 | ||||||
Deferred tax liabilities | ||||||||
Financial revenue | (7,842 | ) | (5,731 | ) | ||||
Estimated revenue | (2,997 | ) | (1,855 | ) | ||||
Leases | (224 | ) | (336 | ) | ||||
Total Income Tax | (11,063 | ) | (7,922 | ) | ||||
Estimated revenue | (1,557 | ) | (961 | ) | ||||
Total (Taxes and contribution) | (1,557 | ) | (961 | ) | ||||
Total deferred tax liabilities | (12,620 | ) | (8,883 | ) |
F-56
Vinci Partners Investimentos Ltda.
Notes to the consolidated financial statements
All amounts in thousands of reais
Movements | Tax losses | Leases | Total | |||||||||
Deferred tax assets | ||||||||||||
As at December 31, 2018 | - | 575 | 575 | |||||||||
to profit and loss | 1,161 | 470 | 1,631 | |||||||||
As at December 31, 2019 | 1,161 | 1,046 | 2,207 | |||||||||
to profit and loss | 1,608 | 753 | 2,361 | |||||||||
As at December 31, 2020 | 2,769 | 1,799 | 4,568 |
Movements | Financial Revenue | Estimated Revenue | Leases | Total | ||||||||||||
Deferred tax liabilities | ||||||||||||||||
As at December 31, 2018 | (1,866 | ) | - | (301 | ) | (2,167 | ) | |||||||||
to profit and loss | (3,865 | ) | (2,816 | ) | (35 | ) | (6,716 | ) | ||||||||
As at December 31, 2019 | (5,731 | ) | (2,816 | ) | (336 | ) | (8,883 | ) | ||||||||
to profit and loss | (2,111 | ) | (1,738 | ) | 112 | (3,737 | ) | |||||||||
As at December 31, 2020 | (7,842 | ) | (4,554 | ) | (224 | ) | (12,620 | ) |
F-57
Vinci Partners Investimentos Ltda.
Notes to the consolidated financial statements
All amounts in thousands of reais
(a) | Tax effective rate |
2020 | 2019 | 2018 | ||||||||||
Profit (loss) before income taxes | 212,600 | 192,115 | 77,700 | |||||||||
Combined statutory income taxes rate - % | 34 | % | 34 | % | 34 | % | ||||||
Income tax benefit (expense) at statutory rates | (72,284 | ) | (65,319 | ) | (26,418 | ) | ||||||
Reconciliation adjustments: | ||||||||||||
Expenses not detuctible | (93 | ) | (323 | ) | - | |||||||
Tax loss compensation | - | 361 | - | |||||||||
Tax loss accrual | - | 1.161 | (822 | ) | ||||||||
Tax benefits | 440 | - | - | |||||||||
Effect of presumed profit of subsidiaries (i) | 28,435 | 27,812 | 6,215 | |||||||||
Other additions (exclusions), net | 56 | (175 | ) | 3 | ||||||||
Income taxes expenses | (43,446 | ) | (36,483 | ) | (21,022 | ) | ||||||
Current | (42,666 | ) | (32,360 | ) | (21,402 | ) | ||||||
Deferred | (780 | ) | (4,123 | ) | 380 | |||||||
Effective rate | 20 | % | 19 | % | 27 | % |
(i) | Brazilian tax law establishes that companies that generate gross revenues of up to R$ 78,000 in the prior fiscal year may calculate income taxes as a percentage of gross revenue, using the presumed profit income tax regime. The Entity's subsidiaries adopted this tax regime and the effect of the presumed profit of subsidiaries represents the difference between the taxation based on this method and the amount that would be due based on the statutory rate applied to the taxable profit of the subsidiaries. |
19 | Related parties |
(a) | Key management remuneration |
The total remuneration (salaries and benefits) of key management personnel, is solely represented by the Executive Committee, amounted to R$ 3,897 (2019 - R$ 3,638 and 2018 – R$ 3,210) for the year ended December 31, 2020.
(b) | Receivables from related parties |
The Entity receivables from related parties as of December 31, 2020 and 2019, as shown in the table below:
2020 | 2019 | |||||||
Salzburg Empreendimentos E Participações Ltda. | - | 60 | ||||||
Vinci Projetos de Infraestrutura XIV S.A. | 80 | 153 | ||||||
Vinci Infra Investimentos V2I S.A. | 49 | 29 | ||||||
Maranello Empreend. e Participações S.A. | 1 | 1 | ||||||
Cagliari Participações S.A. | 4 | 4 | ||||||
Grassano Participações SA | 53 | 23 | ||||||
Accadia Participações SA | 51 | 22 | ||||||
Vinci Partners Participações Ltda | - | 7 | ||||||
Norcia Participações SA | 22 | 2 | ||||||
260 | 301 |
F-58
Vinci Partners Investimentos Ltda.
Notes to the consolidated financial statements
All amounts in thousands of reais
(c) | Prepayments to employees |
As presented in note 6(i), Vinci may advance payments to its employees, in which the amount is rated at the interest rate of the Interbank Deposit Certificate (CDI).
20 | Segment reporting |
The Entity's reportable segments are those business units which provide different services and are separately managed since each business demands different market strategies.
The main information used by management for assessment of the performance of each segment is the profit by segment for the analysis of the return of these investments.
The information on assets and liabilities by segment is not disclosed in these financial statements because it is not used by management when managing segments. Management does not make an analysis by geographical areas for the management of the Entity's business.
Segments are independently managed, with professionals specifically skilled allocated in each segment.
The Entity's operations are segmented according to the organization and management model approved by management, and they are divided as follows:
Hedge Funds
The hedge fund segment manages funds though Brazilian and international financial instruments such as stock, credit, interest, foreign exchange and commodities. Monitoring and risk control are based on different techniques such as: use of options for high conviction trades, monitoring liquidity conditions for each position, VaR monitoring, scenarios simulations (including stress test), stop loss rules on individual positions and on the portfolio level.
Public equities
The public equities segment manages long-term positions based on fundamental analysis of Brazilian publicly traded companies. The mains strategy is through absolute return, dividends, and small caps.
Private Equity
The private equity segment has a generalist and control-oriented approach, focusing on growth and turnaround. The primary strategy is value creation pursuing transformation of invested companies, with changes in the growth and management profile, using a proprietary methodology ("Value from the Core").
Another strategy of the segment is focused on sectors resilient to different investment cycles and minority holdings in small and medium enterprises with business models that exhibit high growth potential and clear, mensurable ESG (Environmental, Social and Governance) goals.
Financial advisory services
The financial advisory services objective is including high value-added to financial and strategic advisory services to entrepreneurs, corporate senior management teams and boards of directors, focusing primarily on IPO advisory and M&A transactions.
F-59
Vinci Partners Investimentos Ltda.
Notes to the consolidated financial statements
All amounts in thousands of reais
Investment products and solutions
Investment products and solutions segments offer financial products on an open platform basis providing portfolio and management services considering medium/long term risk allocation.
Real Estate
The Real Estate Investment Funds (FIIs) segment focused on mature assets and co-investment alongside a large global pension fund seeking returns from investments in various segments, such as malls and logistics.
Infrastructure
The infrastructure segment has exposure to real assets through equity and debt instruments, with active in the following sub-segments: power, oil & gas, transportation & logistic and water & sewage.
Credit
This credit segment is focused on fundamental credit analysis, consistency, and long-term value creation to investors. The area dynamic approach is to tactically allocate capital between assets classes and adapt to different cycles. It is also sourcing of credit instruments with resilient structures and sound collateral packages.
F-60
Vinci Partners Investimentos Ltda.
Notes to the consolidated financial statements
All amounts in thousands of reais
2020 | ||||||||||||||||||||||||||||||||||||||||
Private Equity | Public Equities | Investment Products and solutions | Infrastructure | Real Estate | Credit | Hedge Funds | Financial Advisory Services | Corporate Center | Total | |||||||||||||||||||||||||||||||
In Brazil | 36,630 | 44,948 | 54,178 | 30,193 | 32,928 | 17,815 | 17,463 | 30,338 | 264,493 | |||||||||||||||||||||||||||||||
Abroad | 71,715 | 13,989 | 8,790 | - | 71 | - | 178 | - | 94,743 | |||||||||||||||||||||||||||||||
Gross revenue from services rendered | 108,345 | 58,937 | 62,968 | 30,193 | 32,999 | 17,815 | 17,641 | 30,338 | - | 359,236 | ||||||||||||||||||||||||||||||
Fund Advisory fee | - | - | 135 | - | 1,096 | - | - | 30,338 | 31,569 | |||||||||||||||||||||||||||||||
Fund Management fee | 108,690 | 53,212 | 48,489 | 17,268 | 30,561 | 16,054 | 11,524 | - | 285,798 | |||||||||||||||||||||||||||||||
Fund Performance fee | (344 | ) | 5,725 | 14,344 | 12,925 | 1,341 | 1,761 | 6,117 | - | 41,869 | ||||||||||||||||||||||||||||||
Taxes and contributions | (5,149 | ) | (2,847 | ) | (3,040 | ) | (1,838 | ) | (1,878 | ) | (994 | ) | (974 | ) | (2,624 | ) | (19,344 | ) | ||||||||||||||||||||||
Net revenue from services rendered | 103,197 | 56,090 | 59,928 | 28,355 | 31,120 | 16,821 | 16,667 | 27,714 | 339,892 | |||||||||||||||||||||||||||||||
(-) General and administrative expenses | (9,668 | ) | (6,288 | ) | (10,789 | ) | (5,472 | ) | (4,879 | ) | (2,584 | ) | (3,021 | ) | (3,012 | ) | (78,532 | ) | (124,245 | ) | ||||||||||||||||||||
Operating profit | 93,529 | 49,802 | 49,139 | 22,883 | 26,241 | 14,237 | 13,646 | 24,702 | (78,532 | ) | 215,647 | |||||||||||||||||||||||||||||
Finance income | 10,050 | |||||||||||||||||||||||||||||||||||||||
Finance cost | (13,097 | ) | ||||||||||||||||||||||||||||||||||||||
Finance result, net | (3,047 | ) | ||||||||||||||||||||||||||||||||||||||
Profit before income taxes | 212,600 | |||||||||||||||||||||||||||||||||||||||
Income taxes | (43,446 | ) | ||||||||||||||||||||||||||||||||||||||
Profit for the year | 169,154 |
F-61
Vinci Partners Investimentos Ltda.
Notes to the consolidated financial statements
All amounts in thousands of reais
2019 | ||||||||||||||||||||||||||||||||||||||||
Private Equity | Public Equities | Investment Products and solutions | Infrastructure | Real Estate | Credit | Hedge Funds | Financial Advisory Services | Corporate Center | Total | |||||||||||||||||||||||||||||||
In Brazil | 48,220 | 54,875 | 35,339 | 25,645 | 20,553 | 13,780 | 9,639 | 7,890 | - | 215,941 | ||||||||||||||||||||||||||||||
Abroad | 71,395 | 14,577 | 7,977 | - | 1,203 | - | - | - | - | 95,152 | ||||||||||||||||||||||||||||||
Gross revenue from services rendered | 119,615 | 69,452 | 43,315 | 25,645 | 21,757 | 13,780 | 9,639 | 7,890 | - | 311,093 | ||||||||||||||||||||||||||||||
Fund Advisory fee | - | - | 1,736 | - | 2,313 | - | - | 7,890 | - | 11,939 | ||||||||||||||||||||||||||||||
Fund Management fee | 119,271 | 37,736 | 26,687 | 11,025 | 19,297 | 12,962 | 6,847 | - | - | 233,826 | ||||||||||||||||||||||||||||||
Fund Performance fee | 344 | 31,716 | 14,892 | 14,620 | 146 | 818 | 2,791 | - | - | 65,328 | ||||||||||||||||||||||||||||||
Taxes and contributions | (3,590 | ) | (3,452 | ) | (2,660 | ) | (1,447 | ) | (1,225 | ) | (776 | ) | (542 | ) | (682 | ) | - | (14,376 | ) | |||||||||||||||||||||
Net revenue from services rendered | 116,025 | 66,000 | 40,655 | 24,198 | 20,531 | 13,004 | 9,097 | 7,207 | - | 296,717 | ||||||||||||||||||||||||||||||
(-) General and administrative expenses | (9,416 | ) | (7,163 | ) | (8,467 | ) | (6,041 | ) | (4,088 | ) | (1,939 | ) | (2,970 | ) | (2,727 | ) | (70,478 | ) | (113,287 | ) | ||||||||||||||||||||
Operating profit | 106,609 | 58,838 | 32,188 | 18,156 | 16,443 | 11,065 | 6,127 | 4,481 | (70,478 | ) | 183,430 | |||||||||||||||||||||||||||||
Finance income | 21,161 | |||||||||||||||||||||||||||||||||||||||
Finance cost | (12,476 | ) | ||||||||||||||||||||||||||||||||||||||
Finance result, net | 8,685 | |||||||||||||||||||||||||||||||||||||||
Profit before income taxes | 192,115 | |||||||||||||||||||||||||||||||||||||||
Income taxes | (36,483 | ) | ||||||||||||||||||||||||||||||||||||||
Profit for the year | 155,632 |
F-62
Vinci Partners Investimentos Ltda.
Notes to the consolidated financial statements
All amounts in thousands of reais
2018 | ||||||||||||||||||||||||||||||||||||||||
Private Equity | Public Equities | Investment Products and solutions | Infrastructure | Real Estate | Credit | Hedge Funds | Financial Advisory Services | Corporate Center | Total | |||||||||||||||||||||||||||||||
In Brazil | 26,394 | 21,138 | 16,413 | 12,991 | 12,159 | 9,119 | 6,681 | 18,039 | - | 122,935 | ||||||||||||||||||||||||||||||
Abroad | 43,081 | 7,488 | 5,935 | - | 898 | - | - | - | - | 57,402 | ||||||||||||||||||||||||||||||
Gross revenue from services rendered | 69,475 | 28,626 | 22,348 | 12,991 | 13,057 | 9,119 | 6,681 | 18,039 | - | 180,337 | ||||||||||||||||||||||||||||||
Fund Advisory fee | - | - | 2,970 | - | 374 | - | - | 18,039 | - | 21,383 | ||||||||||||||||||||||||||||||
Fund Management fee | 69,475 | 26,252 | 16,974 | 12,991 | 12,684 | 8,511 | 5,685 | - | - | 152,571 | ||||||||||||||||||||||||||||||
Fund Performance fee | - | 2,375 | 2,404 | - | - | 608 | 996 | - | - | 6,383 | ||||||||||||||||||||||||||||||
Taxes and contributions | (1,908 | ) | (1,319 | ) | (1,094 | ) | (703 | ) | (687 | ) | (493 | ) | (367 | ) | (1,560 | ) | - | (8,133 | ) | |||||||||||||||||||||
Net revenue from services rendered | 67,567 | 27,307 | 21,254 | 12,288 | 12,370 | 8,626 | 6,314 | 16,479 | - | 172,204 | ||||||||||||||||||||||||||||||
(-) General and administrative expenses | (2,314 | ) | (5,238 | ) | (7,943 | ) | (5,286 | ) | (3,279 | ) | (1,795 | ) | (3,316 | ) | (1,967 | ) | (59,617 | ) | (90,755 | ) | ||||||||||||||||||||
Operating profit | 65,253 | 22,069 | 13,311 | 7,001 | 9,091 | 6,831 | 2,998 | 14,512 | (59,617 | ) | 81,449 | |||||||||||||||||||||||||||||
Finance income | 8,723 | |||||||||||||||||||||||||||||||||||||||
Finance cost | (12,472 | ) | ||||||||||||||||||||||||||||||||||||||
Finance result, net | (3,749 | ) | ||||||||||||||||||||||||||||||||||||||
Profit before income taxes | 77,700 | |||||||||||||||||||||||||||||||||||||||
Income taxes | (21,022 | ) | ||||||||||||||||||||||||||||||||||||||
Profit for the year | 56,678 |
F-63
Vinci Partners Investimentos Ltda.
Notes to the consolidated financial statements
All amounts in thousands of reais
21 | Legal Claim |
As of December 31, 2020, and 2019, the Entity is not aware of disputes classified as probable chance of loss.
Find below the disputes classified as possible chance of loss segregated into labor, tax and civil.
2020 | 2019 | |||||||
Tax | 22,234 | 21,824 | ||||||
Civil | - | - | ||||||
Labor | 1,883 | 1,743 | ||||||
Total | 24,117 | 23,567 |
Tax Claims
Vinci Gestora is a party to two tax administrative proceedings in course arising from the payment of social security contributions (employer's portion and Work Accident Insurance (SAT) and contributions to third parties in 2011 and 2012, charged on amounts paid by virtue of quota of profits and results, totaling R$ 3,167 and R$ 2,848, respectively.
Vinci Equities has one proceeding related to the requirement of ISS under rendered services to investment funds located abroad in the amount of R$ 950. Supported by the opinion of its legal advisors, management classified these proceedings as having a possible risk of loss and did not record a provision for contingencies related to these proceedings.
On March 21, 2018, the Brazilian federal revenue opened an act of infraction against Vinci Equities for the collection of open debts of IRPJ, CSLL, PIS and COFINS in the amount of R$ 15,269 for the calendar year of 2013.
22 | Commitment |
The Group has capital commitment that expect to incur in cash disbursements. Unfunded commitments not recognized as liabilities in private equity investment funds at December 31, 2020 and 2019 are as follow:
2020 | 2019 | |||||||
Vinci Impacto e Retorno IV Feeder B | 5,945 | - | ||||||
Vinci Capital Partners III Feeder FIP Multiestratégia | 2,465 | 2,510 | ||||||
Nordeste III FIP Multiestratégia | 1,967 | 2,798 | ||||||
10,377 | 5,308 |
F-64
Vinci Partners Investimentos Ltda.
Notes to the consolidated financial statements
All amounts in thousands of reais
23 | Subsequent Events |
In January 2020 the Entity paid dividends to the quotaholders in the amount of R$ 90,320, arising from the profit for the year ended in December, 2020.
As informed in Note 1, the initial offering price per Class A common share was US$ 18.00, resulting in gross proceeds of US$ 249,723 thousand (or R$ 1,355,394) to Vinci Partners Ltd, deducting R$ 94,878 as underwriting discounts and commissions. Subsequently, on February 8, 2021, Vinci Partners Ltd issued additional shares resulting in gross proceeds of US$ 24,164 thousand (or R$ 135,041), deducting R$ 9,453 as underwriting discounts and commissions. Additionally, the Entity incurred in R$ 9,049 thousand regarding other offering expenses out of, which R$ 596 was recognized directly in income statement and the amount of R$ 8,453 in equity as transaction cost. After the corporate organization mention in the referred note, Vinci Partners Ltd owns 100% interest on Vinci Partners Investimentos Ltda. On January 28, 2021 Vinci Partners Ltd also concludes its initial public offering on Nasdaq.
F-65