Exhibit 99.1
Sendas Distribuidora S.A.
Condensed Interim Financial Statements as
of September 30, 2022
Sendas Distribuidora S.A.
Condensed Interim Financial Statements
September 30, 2022
Table of contents
F-1
Sendas Distribuidora S.A.
Condensed interim statement of operations and comprehensive income
For the nine-month period ended September 30, 2022
(In millions of Brazilian Reais, except earnings per share)
| For the nine-month period ended September 30, | ||||||||||
| Notes | 2022 | 2021 | ||||||||
| Net operating revenue | 20 | |||||||||
| Cost of sales | 21 | ( | ) | ( | ) | |||||
| Gross profit | ||||||||||
| Operating expenses, net | ||||||||||
| Selling expenses | 21 | ( | ) | ( | ) | |||||
| General and administrative expenses | 21 | ( | ) | ( | ) | |||||
| Depreciation and amortization | ( | ) | ( | ) | ||||||
| Share of profit of associates | 10 | |||||||||
| Other operating expenses, net | 22 | ( | ) | ( | ) | |||||
| Operating profit | ||||||||||
| Financial revenues | 23 | |||||||||
| Financial expenses | 23 | ( | ) | ( | ) | |||||
| Net financial result | ( | ) | ( | ) | ||||||
| Income before income taxes | ||||||||||
| Income tax and social contribution | 18.1 | ( | ) | ( | ) | |||||
| Net income - Total controlling shareholders | ||||||||||
| Other comprehensive income | ||||||||||
| Items that may be subsequently reclassified to the statement of operations | ||||||||||
| Fair value of expected credit loss | ( | ) | ||||||||
| Income tax effect | ||||||||||
| Other comprehensive income for the period | ( | ) | ||||||||
| Total comprehensive income for the period | ||||||||||
| Net income for the period | ||||||||||
| Total comprehensive income | ||||||||||
| Basic earnings per share attributable to controlling shareholders (in Reais - R$) | 24 | |||||||||
| Diluted earnings per share attributable to controlling shareholders (in Reais - R$) | 24 | |||||||||
The accompanying notes are integral part of the condensed interim financial statements.
F-2
Sendas Distribuidora S.A.
Condensed interim balance sheet
As of September 30, 2022
(In millions of Brazilian Reais)
| As of | ||||||||||
| Notes | September 30, 2022 | December 31, 2021 | ||||||||
| Current assets | ||||||||||
| Cash and cash equivalents | 5 | |||||||||
| Trade receivables | 6 | |||||||||
| Inventories | 7 | |||||||||
| Recoverable taxes | 8 | |||||||||
| Derivative financial instruments | 14.6 | |||||||||
| Dividends receivable | - | |||||||||
| Other accounts receivable | ||||||||||
| Other current assets | ||||||||||
| Assets held for sale | 26 | |||||||||
| Total current assets | ||||||||||
| Non-current assets | ||||||||||
| Recoverable taxes | 8 | |||||||||
| Deferred income tax and social contribution | 18.2 | |||||||||
| Derivative financial instruments | 14.6 | |||||||||
| Related parties | 9.1 | |||||||||
| Restricted deposits for legal proceedings | 15.7 | |||||||||
| Other non-current assets | ||||||||||
| Investments | 10 | |||||||||
| Property, plant and equipment | 11.1 | |||||||||
| Intangible assets | 12 | |||||||||
| Total non-current assets | ||||||||||
| Total assets | ||||||||||
The accompanying notes are integral part of the condensed interim financial statements.
F-3
Sendas Distribuidora S.A.
Condensed interim balance sheet
As of September 30, 2022
(In millions of Brazilian Reais)
| As of | ||||||||||
| Notes | September 30, 2022 | December 31, 2021 | ||||||||
| Current liabilities | ||||||||||
| Trade payables, net | 13 | |||||||||
| Borrowings and financing | 14.6 | |||||||||
| Debentures and promissory notes | 14.6 | |||||||||
| Payroll and related taxes | ||||||||||
| Lease liabilities | 16.1 | |||||||||
| Related parties | 9.1 | |||||||||
| Taxes payable | ||||||||||
| Income tax and social contribution payable | - | |||||||||
| Deferred revenues | 17 | |||||||||
| Dividends payable | - | |||||||||
| Other current liabilities | ||||||||||
| Total current liabilities | ||||||||||
| Non-current liabilities | ||||||||||
| Trade payables, net | 13 | - | ||||||||
| Borrowings and financing | 14.6 | |||||||||
| Debentures and promissory notes | 14.6 | |||||||||
| Provision for legal proceedings | 15 | |||||||||
| Related parties | 9.1 | - | ||||||||
| Lease liabilities | 16.1 | |||||||||
| Deferred revenues | 17 | - | ||||||||
| Other non-current liabilities | ||||||||||
| Total non-current liabilities | ||||||||||
| Shareholders´ equity | ||||||||||
| Share capital | 19.1 | |||||||||
| Capital reserve | ||||||||||
| Earnings reserves | ||||||||||
| Other comprehensive income | ( | ) | ( | ) | ||||||
| Total shareholders’ equity | ||||||||||
| Total liabilities and shareholders´ equity | ||||||||||
The accompanying notes are integral part of the condensed interim financial statements.
F-4
Sendas Distribuidora S.A.
Condensed interim statements of changes in shareholders´ equity
For the nine-month period ended September 30, 2022
(In millions of Brazilian Reais)
| Earnings reserves | Accumulated | |||||||||||||||||||||||||||||||||||
| Share capital | Capital reserve | Legal reserve | Expansion reserve | Tax incentive granted | Profit reserve | Retained earnings | other comprehensive income | Total | ||||||||||||||||||||||||||||
| As of December 31, 2020 | ||||||||||||||||||||||||||||||||||||
| Other comprehensive income | ||||||||||||||||||||||||||||||||||||
| Net income for the period | ||||||||||||||||||||||||||||||||||||
| Comprehensive income for the period | ||||||||||||||||||||||||||||||||||||
| Capital contribution | ||||||||||||||||||||||||||||||||||||
| Stock options granted | ||||||||||||||||||||||||||||||||||||
| Interest on own capital | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
| As of September 30, 2021 | ||||||||||||||||||||||||||||||||||||
| As of December 31, 2021 | ( | ) | ||||||||||||||||||||||||||||||||||
| Other comprehensive income | - | |||||||||||||||||||||||||||||||||||
| Net income for the period | ||||||||||||||||||||||||||||||||||||
| Fair value of expected credit loss | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
| Income tax and social contribution of other comprehensive income | ||||||||||||||||||||||||||||||||||||
| Comprehensive income for the period | ( | ) | ||||||||||||||||||||||||||||||||||
| Capital contribution (note 19.1) | ||||||||||||||||||||||||||||||||||||
| Capital contribution – capitalization of reserve (note 19.1) | ( | ) | ||||||||||||||||||||||||||||||||||
| Stock options granted | ||||||||||||||||||||||||||||||||||||
| Tax incentive reserve (note 19.4) | ( | ) | ||||||||||||||||||||||||||||||||||
| Expansion reserve | ( | ) | ||||||||||||||||||||||||||||||||||
| As of September 30, 2022 | ( | ) | ||||||||||||||||||||||||||||||||||
The accompanying notes are integral part of the condensed interim financial statements.
F-5
Sendas Distribuidora S.A.
Condensed interim statements of cash flows
For the nine-month period ended September 30, 2022
(In millions of Brazilian Reais)
| For the period ended September 30, | ||||||||
| 2022 | 2021 | |||||||
| Cash flows from operating activities | ||||||||
| Net income for the period | ||||||||
| Net income for the period | ||||||||
| Adjustments to reconcile net income for the period to net cash flows | ||||||||
| Deferred income tax and social contribution | ( | ) | ||||||
| Loss (gain) on disposal of property, plant and equipment and leasing write-off | ( | ) | ||||||
| Depreciation and amortization | ||||||||
| Financial charges | ||||||||
| Share of profit of associate | ( | ) | ( | ) | ||||
| Reversal of provision for legal proceedings | ( | ) | ( | ) | ||||
| Provision for stock option | ||||||||
| Provision for allowance for inventory losses and damages | ||||||||
| Allowance for doubtful accounts | ||||||||
| Variations in operating assets and liabilities | ||||||||
| Trade receivables | ( | ) | ( | ) | ||||
| Inventories | ( | ) | ( | ) | ||||
| Recoverable taxes | ( | ) | ( | ) | ||||
| Restricted deposits for legal proceedings | ||||||||
| Other assets | ( | ) | ( | ) | ||||
| Trade payables, net | ||||||||
| Payroll and related taxes | ||||||||
| Related parties | ||||||||
| Provision for legal proceedings | ( | ) | ( | ) | ||||
| Taxes and social contributions payable | ||||||||
| Deferred revenue | ( | ) | ( | ) | ||||
| Dividends received | ||||||||
| Other liabilities | ( | ) | ||||||
| Income tax and social contribution, paid | - | ( | ) | |||||
| ( | ) | ( | ) | |||||
| Net cash generated by operating activities | ||||||||
| Cash flow investment activities | ||||||||
| Purchase of property, plant and equipment | ( | ) | ( | ) | ||||
| Purchase of intangible assets | ( | ) | ( | ) | ||||
| Proceeds from the sale of property, plant and equipment | - | |||||||
| Acquisition of assets held for sale | ( | ) | ||||||
| Proceeds from the sale of assets held for sale | ||||||||
| Net cash used in investment activities | ( | ) | ( | ) | ||||
| Cash flow financing activities | ||||||||
| Capital contribution | ||||||||
| Proceeds from borrowings and financing | ||||||||
| Payment of borrowings and financing | ( | ) | ( | ) | ||||
| Payment of interest of borrowings and financing | ( | ) | ( | ) | ||||
| Dividends and interest on equity paid | ( | ) | ( | ) | ||||
| Payment of lease liabilities | ( | ) | ( | ) | ||||
| Payment of interest of lease liabilities | ( | ) | ( | ) | ||||
| Net cash generated by (used in) financing activities | ( | ) | ||||||
| Net increase (decrease) in cash and cash equivalents | ( | ) | ||||||
| Cash and cash equivalents at the beginning of the period | ||||||||
| Cash and cash equivalents at the end of the period | ||||||||
The accompanying notes are integral part of the condensed interim financial statements.
F-6
Sendas Distribuidora S.A.
Notes to the condensed interim financial statements
September 30, 2022
(In millions of Brazilian Reais, unless otherwise stated)
| 1 | Corporate information |
Sendas Distribuidora S.A. (“Company” or “Sendas”) is a publicly-held company listed in the Novo Mercado segment of B3 S.A. - Brasil, Bolsa, Balcão (B3) under ticker symbol “ASAI3” and on the New York Stock Exchange (NYSE) under ticker symbol “ASAI”. The Company is primarily engaged in the retail and wholesale of food products, bazaar items and other products through its chain of stores, operated under the “ASSAÍ” brand. The Company’s registered office is at Avenida Ayrton Senna, 6.000, Lote 2 - Anexo A, Jacarepaguá, in the State of Rio de Janeiro. As of September 30, 2022, the Company operated 233 stores and 12 distribution centers in the five regions of the country, with operations in 23 states and in the Federal District.
The Company is a direct subsidiary of Wilkes Participações S.A. (“Wilkes”) and indirect subsidiary of Casino Guichard Perrachon.
| 1.1 | Conversion of Extra Hiper stores into Assaí |
On October 14, 2021, the Board of Directors of the Company and of Grupo Pão de Açúcar (“GPA”) approved the transaction for the conversion of Extra Hiper stores, operated by GPA, into cash & carry stores operated by the Company under the ASSAÍ brand (the “Transaction”).
On December 16, 2021, the Company and
GPA signed the “Agreement for Onerous Assignment of Exploration Rights of Commercial Points and Other Agreements” (the “Agreement”),
governing the transfer to the Company the exploitation rights of up to 70 commercial points located in several states in Brazil and the
Federal District (17 properties owned by GPA and 53 properties owned by third parties), that was operated by GPA for a total amount of
up to R$
On April 13, 2022, the Brazilian antitrust agency (“CADE”) issued a favorable opinion without restrictions on the sale of the 17 properties owned by GPA to the real estate investment fund Barzel Properties (“Fund”).
According to the Agreement, the closing of the transaction is subject to the fulfillment of certain precedent conditions, including, but not limited to, obtaining the prior consent of the property owners and discontinuance of the stores by GPA, with a deadline for the assignment of all commercial points to the Company by December 31, 2022. This transaction is not subject to approval by competition authorities.
Up to September 30, 2022, the Company
and GPA signed the transfer of 46 commercial points in the amount of R$
On August 17, 2022, GPA’s Board of Directors, with Company’s Board of Directors consent, approved GPA’s Management to anticipate Company’s receivables through a sale of installments due between 2023 and 2024 with financial institution, see note 13.2.
F-7
Sendas Distribuidora S.A.
Notes to the condensed interim financial statements
September 30, 2022
(In millions of Brazilian Reais, unless otherwise stated)
| 1.2 | Impacts of the pandemic on the Company’s condensed interim financial statements |
The Company has been monitoring the spread of COVID-19 (Coronavirus) and its impacts on its operations. Management took actions, among them, we appointed a crisis committee composed of senior management, which makes decisions in line with recommendations of the Brazilian Ministry of Health, local authorities, and professional associations.
The Company implemented all the measures to mitigate the transmission of virus at our stores, distribution centers, and offices, such as frequent sanitization, employees’ safety/protection equipment, flexible working hours, and home office, among others.
Since the beginning of the COVID-19 outbreak, our stores have remained open during periods of general lockdown, as we are considered an essential service. The Company has a strong commitment to society to continue selling essential products to its customers. We did not face supply-side hurdles from industries that continued supplying our distribution centers and stores.
Accordingly, the Company performed a complete analysis in the condensed interim financial statements and updated the analyses of the Company’s ability to continue as a going concern. The main topics analyzed are described below:
| ● | The Company reviewed its budgets used for calculation of recoverable amounts of store assets and intangible assets as of December 31, 2021, and no significant reductions in revenues and in other lines of the statement of profit or loss indicating impairment of these assets were noted. Due to the uncertainty regarding the end of the pandemic and its macroeconomic effects, the Company assessed the existence of indication of impairment of assets. There were no new elements in the period ended September 30, 2022 indicating the need for the Company to review the asset impairment test; |
| ● | The recoverable amount is determined by calculating the value in use, based on cash flow projections derived
from financial budgets, which were reviewed and approved by Senior Management for the next three years, considering the assumptions updated
for December 31, 2021. The discount rate applied to cash flow projections is |
| ● | We assessed the realization of the balances of trade receivables from credit card companies, customers, galleries in our stores and property rentals, and concluded that it is not necessary to record provisions for losses in addition to those already recorded; |
| ● | For inventories, we do not foresee the need to make an adjustment for realization; |
| ● | Financial instruments already reflect the market assumptions in their valuation and there are no additional exposures not disclosed in this condensed interim financial staments. The Company is not exposed to significant financing in US dollars; |
| ● | Currently the Company does not foresee the need for additional funding; and |
F-8
Sendas Distribuidora S.A.
Notes to the condensed interim financial statements
September 30, 2022
(In millions of Brazilian Reais, unless otherwise stated)
| ● | Finally, the costs necessary to adapt our stores for customer service were not significant. |
In summary, according to Management’s estimates and with the monitoring of the impacts of the pandemic, including the Omicron variant, there are no effects that should be recorded in the Company’s condensed interim financial statements as of September 30, 2022 and there are no effects on the Company’s continuity and/ or estimates that would justify changes or recording of provisions in addition to those already disclosed. The Company will continue to monitor and assess the impacts and, if necessary, will make the appropriate disclosures.
| 2 | Basis of preparation |
The condensed interim financial statements have been prepared in accordance with IAS 34 – Interim Financial Reporting issued by the International Accounting Standards Board (“IASB”).
The condensed interim financial statements have been prepared on the historical cost basis, except for (i) certain financial instruments; and (ii) assets and liabilities arising from business combinations measured at their fair values, where applicable. All significant information related to the condensed interim financial statements, is being disclosed and is consistent with the information used by Management in managing the Company’s activities.
The condensed interim financial statements are presented in millions of Brazilian Reais (R$), which is the Company’s functional currency.
The condensed interim financial statements for the nine-month period ended September 30, 2022, were approved by the Board of Directors on November 28, 2022.
| 3 | Significant accounting policies |
The main accounting policies adopted by the Company in the preparation of the condensed interim financial statements are consistent with those adopted and disclosed in note 3 and in each corresponding note to the financial statements for the year ended December 31, 2021, and, therefore, they should be read together.
| 3.1 |
In the quarter ended September 30, 2022, the new standards effective were assessed and produced no effects on the condensed interim financial statements; additionally, the Company did not early adopt the IFRS issued and not yet effective.
| 4 | SIGNIFICANT ACCOUNTING JUDGMENTS, ESTIMATES, AND ASSUMPTIONS |
The preparation of the condensed interim financial statements requires Management to makes judgments and estimates and adopt assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities at the end of the reporting period, however, the uncertainties about these assumptions and estimates may generate results that require substantial adjustments to the carrying amount of the asset or liability in future periods.
F-9
Sendas Distribuidora S.A.
Notes to the condensed interim financial statements
September 30, 2022
(In millions of Brazilian Reais, unless otherwise stated)
The significant assumptions and estimates applied in the preparation of the condensed interim financial statements for the nine-month period ended September 30, 2022, were the same as those adopted in the financial statements for the year ended December 31, 2021, as described in note 6 of the corresponding financial statements.
| 5 | Cash and cash equivalents |
| As of | ||||||||
| September 30, 2022 | December 31, 2021 | |||||||
| Cash and bank accounts | ||||||||
| Cash and bank accounts – Abroad (*) | ||||||||
| Financial investments (**) | ||||||||
| (*) |
| (**) |
| 6 | Trade receivables |
| As of | ||||||||||||
| Notes | September 30, 2022 | December 31, 2021 | ||||||||||
| Credit card operators | 6.1 | |||||||||||
| Credit card operators with related parties | 9.1 | |||||||||||
| Sales ticket and payment slips | 6.2 | |||||||||||
| Trade receivables with related parties | 9.1 | |||||||||||
| Trade receivables with suppliers/payment slips | ||||||||||||
| Provision for expected credit losses | 6.3 | ( | ) | ( | ) | |||||||
F-10
Sendas Distribuidora S.A.
Notes to the condensed interim financial statements
September 30, 2022
(In millions of Brazilian Reais, unless otherwise stated)
The breakdown of trade receivables by their gross amount by maturity period is presented below:
| Overdue | ||||||||||||||||
| Total | Due | Less than 30 days | > 90 days | |||||||||||||
| 09/30/2022 | ||||||||||||||||
| 12/31/2021 | ||||||||||||||||
| 6.1 | Credit card operators |
The Company, through a cash management strategy, advances receivables from credit card operators, without any right of recourse or related obligation and derecognizes the balance of trade receivables.
| 6.2 | Sales ticket and payment slips |
Refers to amounts derived from transactions
through receipts: (i) tickets and meal vouchers R$
| 6.3 | Provision for expected credit losses |
| For the nine-month period ended September 30, | ||||||||
| 2022 | 2021 | |||||||
| At the beginning of the period | ( | ) | ( | ) | ||||
| Additions | ( | ) | ( | ) | ||||
| Reversals | ||||||||
| At the end of the period | ( | ) | ( | ) | ||||
| 7 | Inventories |
| As of | ||||||||||
| Notes | September 30, 2022 | December 31, 2021 | ||||||||
| Stores | ||||||||||
| Distribution centers | ||||||||||
| Commercial agreements | 7.1 | ( | ) | ( | ) | |||||
| Allowance for loss on inventory obsolescence and damages | 7.2 | ( | ) | ( | ) | |||||
F-11
Sendas Distribuidora S.A.
Notes to the condensed interim financial statements
September 30, 2022
(In millions of Brazilian Reais, unless otherwise stated)
| 7.1 | Commercial agreements |
On September 30, 2022, the amount
of unrealized commercial agreements, presented as a reduction of the inventory balance, totaled R$
| 7.2 | Allowance for loss on inventory (obsolescence and damages) |
| For the nine-month period ended September 30, | ||||||||
| 2022 | 2021 | |||||||
| At the beginning of the period | ( | ) | ( | ) | ||||
| Additions | ( | ) | ( | ) | ||||
| Reversals | ||||||||
| Write-offs | ||||||||
| At the end of the period | ( | ) | ( | ) | ||||
| 8 | Recoverable taxes |
| As of | ||||||||||
| Notes | September 30, 2022 | December 31, 2021 | ||||||||
| State VAT tax credits – ICMS | 8.1 | |||||||||
| Social Integration Program and Contribution for Social Security Financing – PIS/COFINS | 8.2 | |||||||||
| Social Security Contribution – INSS | ||||||||||
| Income tax and social contribution | ||||||||||
| Others | ||||||||||
| Total | ||||||||||
| Current | ||||||||||
| Non-current | ||||||||||
| 8.1 | ICMS – State VAT tax credits |
Since 2008, the Brazilian States have been substantially amending their local laws aiming at implementing and broadening the ICMS tax replacement system. This system entails the prepayment of ICMS of the whole commercial chain, upon goods outflow from an industrial establishment or importer or their inflow into each State. The expansion of this system to an increasingly wider range of products sold in the retail generates the prepayment of the tax and consequently a refund in certain operations.
F-12
Sendas Distribuidora S.A.
Notes to the condensed interim financial statements
September 30, 2022
(In millions of Brazilian Reais, unless otherwise stated)
The refund process requires evidence through tax documents and digital files of the transactions carried out that generated the right to refund for the Company. Only after its ratification by state tax authorities and/or the compliance with specific ancillary obligations to support such evidence the credits can be used by the Company, which occur in periods after their generation.
As the number of items sold in the retail subject to tax replacement has increased continuously, the tax credit to be refunded by the Company has also increased. The Company has realized these credits with authorization for immediate offset in view of its operation, by obtaining a special regime and also by means of other procedures regulated by state rules.
With respect to credits that cannot yet be immediately offset, the Company’s management, according to a technical recovery study based on the future expectation of growth and consequent offset against taxes payable from its operations, believes that its future offset is viable. The mentioned studies are prepared and periodically reviewed based on information obtained from the strategic planning previously approved by the Company’s Board of Directors. For the condensed interim financial statements as of September 30, 2022, the Company’s management has monitoring controls over the adherence to the annually established plan, reassessing and including new elements that contribute to the realization of the recoverable ICMS balance, as shown in the table below.
| Year | Amounts | |||
| Within 1 year | ||||
| From 1 to 2 years | ||||
| From 2 to 3 years | ||||
| From 3 to 4 years | ||||
| From 4 to 5 years | ||||
| More than 5 years | ||||
| Total | ||||
| 8.2 | PIS and COFINS credit |
On May 15, 2017, the Federal Supreme Court (“STF”) recognized the unconstitutionality of the inclusion of ICMS in the PIS and COFINS calculation base. On May 13, 2021, the STF judged the Declaration Embargoes in relation to the amount to be excluded from the calculation basis of the contributions, which should only be the ICMS paid, or if the entire ICMS, as shown in the respective invoices.
The STF decided to modulate the effects of the decision, providing that taxpayers who distributed lawsuits before March 15, 2017 or who had administrative proceedings in progress before that same date, would be have right to take advantage of the past period. As the decision was rendered in a process with recognized general repercussions, the understanding reached is binding on all judges and courts. The Company filed a lawsuit on October 31, 2013, having obtained a favorable decision and a final and unappealable decision on July 16, 2021, thus allowing the recognition of the credit for the period covered by the lawsuit.
Currently the Company, with the favorable judgment of the Supreme Court, has recognized the exclusion of ICMS from the PIS and COFINS calculation basis based on the same assumptions above.
| ● | Expected realization of PIS and COFINS credits |
With respect to the recoverable PIS and COFINS credits, the Company’s Management, based on a technical recovery study considering future growth expectations and consequent offset against debts from its operations, projects its future realization. The mentioned studies are prepared and periodically reviewed based on information obtained from the strategic planning previously approved by the Company’s Board of Directors. For the condensed interim financial statements as of September 30, 2022, the Company’s management has monitoring controls over the adherence to the annually established plan, reassessing and including new elements that contribute to the realization of the recoverable PIS and COFINS balance, as shown in the table below:
| Year | Amounts | |||
| Within 1 year | ||||
| From 1 to 2 years | ||||
| From 2 to 3 years | ||||
| Total | ||||
F-13
Sendas Distribuidora S.A.
Notes to the condensed interim financial statements
September 30, 2022
(In millions of Brazilian Reais, unless otherwise stated)
| 9 | Related Parties |
| 9.1 | Balances and related party transactions |
| Assets balance | Liabilities balance | Transactions | ||||||||||||||||||||||||||||||||||||||
| Clients | Other assets | Suppliers | Other liabilities | Revenue (expenses) | ||||||||||||||||||||||||||||||||||||
| As of September 30, 2022 | As of December 31, 2021 | As of September 30, 2022 | As of December 31, 2021 | As of September 30, 2022 | As of December 31, 2021 | As of September 30, 2022 | As of December 31, 2021 | For the nine-month period ended September 30, 2022 | For the nine-month period ended September 30, 2021 | |||||||||||||||||||||||||||||||
| Controlling shareholder | ||||||||||||||||||||||||||||||||||||||||
| Wilkes Participações S.A. | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||
| Euris | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||
| Casino Guichard Perrachon | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||
| ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||
| Other related parties | ||||||||||||||||||||||||||||||||||||||||
| GPA (i) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||
| Compre Bem | ( | ) | ||||||||||||||||||||||||||||||||||||||
| Greenyellow | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||
| Joint venture | ||||||||||||||||||||||||||||||||||||||||
| Financeira Itaú CBD S.A. Crédito, Financiamento e Investimento (“FIC”) | ||||||||||||||||||||||||||||||||||||||||
| ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||
| Total | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||
| Current | ||||||||||||||||||||||||||||||||||||||||
| Non-current | ||||||||||||||||||||||||||||||||||||||||
| (i) |
F-14
Sendas Distribuidora S.A.
Notes to the condensed interim financial statements
September 30, 2022
(In millions of Brazilian Reais, unless otherwise stated)
| 9.2 | Management compensation |
Expenses related to management compensation that were recorded in the Company’s statement of profit or loss in the periods ended September 30, 2022 and 2021 are as follows (amounts in thousands of reais):
| Base salary | Variable compensation | Stock option plan | Total | |||||||||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||||
| Board of director | ||||||||||||||||||||||||||||||||
| Director and Executive officers | ||||||||||||||||||||||||||||||||
| Fiscal council | ||||||||||||||||||||||||||||||||
The stock option plan refers to the Company’s executive officers and has been recorded in the Company’s results. There are no other short-term or long-term benefits granted to members of the Company’s management.
| 10 | Investments |
The details of the Company’s joint venture at the end of September 30, are as follow:
| Participation in investments - % | ||||||||||||
| 2022 | 2021 | |||||||||||
| Group | Company | Country | Company | |||||||||
| Financeira Itaú CBD S.A. | ||||||||||||
Breakdown
| Amount | ||||
| As of December 31, 2020 | ||||
| Share of profit of associates | ||||
| As of September 30, 2021 | ||||
| Amount | ||||
| As of December 31, 2021 | ||||
| Share of profit of associates | ||||
| As of September 30, 2022 | ||||
F-15
Sendas Distribuidora S.A.
Notes to the condensed interim financial statements
September 30, 2022
(In millions of Brazilian Reais, unless otherwise stated)
| 11 | Property, plant and equipment |
| 11.1 | Rollforward |
| As of December 31, 2021 | Additions | Lease modification | Write-off | Depreciation | Transfer and others | As of September 30, 2022 | ||||||||||||||||||||||
| Land | ||||||||||||||||||||||||||||
| Buildings | ( | ) | ( | ) | ||||||||||||||||||||||||
| Improvements | ( | ) | ( | ) | ||||||||||||||||||||||||
| Equipment | ( | ) | ( | ) | ||||||||||||||||||||||||
| Facilities | ( | ) | ( | ) | ||||||||||||||||||||||||
| Furniture and appliances | ( | ) | ( | ) | ||||||||||||||||||||||||
| Constructions in progress | ( | ) | ( | ) | ||||||||||||||||||||||||
| Others | ( | ) | ||||||||||||||||||||||||||
| Subtotal | ( | ) | ( | ) | ||||||||||||||||||||||||
| Lease - right of use: | ||||||||||||||||||||||||||||
| Buildings | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||
| Equipment | ( | ) | ||||||||||||||||||||||||||
| Subtotal | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||
| Total | ( | ) | ( | ) | - | |||||||||||||||||||||||
| As of December 31, 2020 | Additions | Lease modification | Write-off | Depreciation | Transfer and others (i) | As of September 30, 2021 | ||||||||||||||||||||||
| Land | ( | ) | ( | ) | ||||||||||||||||||||||||
| Buildings | ( | ) | ( | ) | ||||||||||||||||||||||||
| Improvements | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||
| Equipment | ( | ) | ( | ) | ||||||||||||||||||||||||
| Facilities | ( | ) | ||||||||||||||||||||||||||
| Furniture and appliances | ( | ) | ||||||||||||||||||||||||||
| Constructions in progress | ( | ) | ||||||||||||||||||||||||||
| Others | ( | ) | ||||||||||||||||||||||||||
| Subtotal | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||
| Lease - right of use: | ||||||||||||||||||||||||||||
| Buildings | ( | ) | ( | ) | ||||||||||||||||||||||||
| Equipment | ( | ) | ||||||||||||||||||||||||||
| Subtotal | ( | ) | ( | ) | ||||||||||||||||||||||||
| Total | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||
| (i) | In the period ended September 30, 2021, transfers of property,
plant and equipment items to “Assets held for sale” in the amount of R$ |
F-16
Sendas Distribuidora S.A.
Notes to the condensed interim financial statements
September 30, 2022
(In millions of Brazilian Reais, unless otherwise stated)
| 11.2 | Breakdown |
| As of | ||||||||||||||||||||||||
| September 30, 2022 | December 31, 2021 | |||||||||||||||||||||||
| Historical cost | Accumulated depreciation | Net amount | Historical cost | Accumulated depreciation | Net amount | |||||||||||||||||||
| Land | ||||||||||||||||||||||||
| Buildings | ( | ) | ( | ) | ||||||||||||||||||||
| Improvements | ( | ) | ( | ) | ||||||||||||||||||||
| Equipment | ( | ) | ( | ) | ||||||||||||||||||||
| Facilities | ( | ) | ( | ) | ||||||||||||||||||||
| Furniture and appliances | ( | ) | ( | ) | ||||||||||||||||||||
| Construction in progress | ||||||||||||||||||||||||
| Others | ( | ) | ( | ) | ||||||||||||||||||||
| ( | ) | ( | ) | |||||||||||||||||||||
| Finance lease | ||||||||||||||||||||||||
| Buildings | ( | ) | ( | ) | ||||||||||||||||||||
| Equipment | ( | ) | ( | ) | ||||||||||||||||||||
| ( | ) | ( | ) | |||||||||||||||||||||
| Total Property, plant and equipment | ( | ) | ( | ) | ||||||||||||||||||||
| 11.3 | Capitalization of interest on borrowings |
Borrowing costs directly attributable to the acquisition, construction
or production and interest of lease liabilities related to assets that necessarily takes a substantial period of time to get ready for
its intended use or sale are capitalized as part of the cost of the asset, amounted to R$
| 11.4 | Additions to property, plant and equipment for cash flow presentation purpose are as follows: |
| As of September 30, | ||||||||
| 2022 | 2021 | |||||||
| Additions | ||||||||
| Leases | ( | ) | ( | ) | ||||
| Capitalized interest | ( | ) | ( | ) | ||||
| Financing of property, plant and equipment – Additions | ( | ) | ( | ) | ||||
| Financing of property, plant and equipment – Payments | ||||||||
| Total | ||||||||
Additions made by the Company refer to purchases of operating assets, purchases of land and buildings for expansion of activities, building of new stores and distribution centers, modernization of distribution centers, renovation of various stores, and investments in equipment and information technology.
The additions to and payments for property, plant and equipment items previously mentioned are presented to show only the purchases for the periods, in order to reconcile with the statement of cash flows and the total additions included in the table.
F-17
Sendas Distribuidora S.A.
Notes to the condensed interim financial statements
September 30, 2022
(In millions of Brazilian Reais, unless otherwise stated)
| 11.5 | Other information |
On September 30, 2022, the Company
recorded in the cost of sales and services the amount of R$
| 12 | Intangible Assets |
| As of December 31, 2021 | Additions | Amortizations | As of September 30, 2022 | |||||||||||||
| Goodwill | ||||||||||||||||
| Softwares | ( | ) | ||||||||||||||
| Commercial rights (i) | ( | ) | ||||||||||||||
| Trade name | ||||||||||||||||
| Subtotal | ( | ) | ||||||||||||||
| Lease - right of use: | ||||||||||||||||
| Assets and rights | ( | ) | ||||||||||||||
| Subtotal | ( | ) | ||||||||||||||
| Total | ( | ) | ||||||||||||||
| As of December 31, 2020 | Additions | Amortizations | As of September 30, 2021 | |||||||||||||
| Goodwill | ||||||||||||||||
| Softwares | ( | ) | ||||||||||||||
| Commercial rights | ( | ) | ||||||||||||||
| Trade name | ||||||||||||||||
| Total | ( | ) | ||||||||||||||
| (i) |
| As of | ||||||||||||||||||||||||
| As of September 30, 2022 | December 31, 2021 | |||||||||||||||||||||||
| Historical cost | Accumulated amortization | Net amount | Historical cost | Accumulated amortization | Net amount | |||||||||||||||||||
| Goodwill | ( | ) | ( | ) | ||||||||||||||||||||
| Softwares | ( | ) | ( | ) | ||||||||||||||||||||
| Commercial rights | ( | ) | ( | ) | ||||||||||||||||||||
| Trade name | ||||||||||||||||||||||||
| ( | ) | ( | ) | |||||||||||||||||||||
| Lease - right of use: | ||||||||||||||||||||||||
| Assets and rights | ( | ) | ( | ) | ||||||||||||||||||||
| Total of intangible assets | ( | ) | ( | ) | ||||||||||||||||||||
F-18
Sendas Distribuidora S.A.
Notes to the condensed interim financial statements
September 30, 2022
(In millions of Brazilian Reais, unless otherwise stated)
| 12.1 | Impairment test of intangible assets with an indefinite useful life, including goodwill |
The impairment test of intangible assets uses the same practices described in note 13.1 to the financial statements of December 31, 2021.
The Company monitored the plan used to assess impairment as of December 31, 2021 and concluded that no events occurred indicating impairment or the need for a new valuation as of September 30, 2022.
| 12.2 | Additions to intangible assets for cash flow presentation purpose are as follows |
| As of September 30, | ||||||||
| 2022 | 2021 | |||||||
| Additions | ||||||||
| Acquisition of intangible assets – Additions | ( | ) | - | |||||
| Acquisition of intangible assets - Payments | - | |||||||
| Total | ||||||||
| 13 | Trade payables, net |
| As of | ||||||||||||
| Notes | September 30, 2022 | December 31, 2021 | ||||||||||
| Product suppliers | ||||||||||||
| Service providers | ||||||||||||
| Service providers - related parties | 9.1 | |||||||||||
| Suppliers – Acquisition of Extra Hiper stores | 13.2 | |||||||||||
| Bonuses from suppliers | 13.1 | ( | ) | ( | ) | |||||||
| Total | ||||||||||||
| Current | ||||||||||||
| Non-current | ||||||||||||
| 13.1 | Bonuses from suppliers |
These include commercial agreements and discounts obtained from suppliers. These amounts are defined in agreements and include discounts for purchase volume, joint marketing programs, freight reimbursements, and other similar programs. The receipt occurs by deducting trade notes payable to suppliers, according to conditions established in the supply agreements, so that the financial settlements occur for the net amount.
| 13.2 | Suppliers - Acquisition of Extra Stores |
As mentioned in note 1.1, in September 2022, GPA concluded the assignment of its receivables on the sale of Extra stores to the Company with a financial institution corresponding to the installments due between 2023 and 2024. The Company’s management, as the consenting party of the operation, evaluated the contractual terms of the assignment of receivables and in accordance with IAS 1 - Presentation of financial statements, concluded that there was no modification in the conditions originally contracted with the GPA, maintaining the characteristic of the terms, and the payments of the installments will be made directly by the Company to the financial institution, maintaining the same due dates and interest previously agreed with GPA. Therefore, Management concluded that the characteristic of the operation was maintained as accounts payable for the acquisition of the commercial points of the Extra Hiper stores.
F-19
Sendas Distribuidora S.A.
Notes to the condensed interim financial statements
September 30, 2022
(In millions of Brazilian Reais, unless otherwise stated)
| 14 | Financial instruments |
The main financial instruments and their carrying amounts, by category, are as follows:
| Carrying amounts | ||||||||||
| Notes | As of September 30, 2022 | As of December 31, 2021 | ||||||||
| Financial assets | ||||||||||
| Amortized cost | ||||||||||
| Cash and cash equivalents | 5 | |||||||||
| Related parties - assets | 9.1 | |||||||||
| Trade receivables and other accounts receivable | ||||||||||
| Fair value through income | ||||||||||
| Financial instruments – hedge measured at fair value | 14.6.1 | |||||||||
| Fair value through other comprehensive income | ||||||||||
| Accounts receivable with credit card companies and sales tickets | ||||||||||
| Financial liabilities | ||||||||||
| Other financial liabilities - amortized cost | ||||||||||
| Related parties - liabilities | 9.1 | ( | ) | ( | ) | |||||
| Trade payables | 13 | ( | ) | ( | ) | |||||
| Financing through acquisition of assets | ( | ) | ( | ) | ||||||
| Borrowings and financing | 14.6.1 | ( | ) | ( | ) | |||||
| Debentures and promissory notes | 14.7 | ( | ) | ( | ) | |||||
| Lease liabilities | 16.1 | ( | ) | ( | ) | |||||
| Fair value through income | ||||||||||
| Borrowings and financing, including derivatives | 14.6.1 | ( | ) | ( | ) | |||||
| Financial instruments – hedge measured at fair value | 14.6.1 | ( | ) | ( | ) | |||||
| Net exposure | ( | ) | ( | ) | ||||||
The fair value of other financial instruments detailed in the table above approximates the carrying amount based on the existing payment terms and conditions. The financial instruments measured at amortized cost, the fair values of which differ from the carrying amounts, are disclosed in note 14.4.
| 14.1 | Considerations on risk factors that may affect the businesses of the Company |
| 14.1.1 | Credit Risk |
| ● | Cash equivalents: In order to minimize the credit risk, the investment policies adopted establish investments in financial institutions approved by the Company’s Financial Committee, considering the monetary limits and evaluations of financial institutions, which are regularly updated. |
| ● | The credit risk related to trade receivables is minimized by the fact that a large part of installment sales is made with credit cards. These receivables may be advanced at any time, without right of recourse, with banks or credit card companies, for the purpose of providing working capital, generating the derecognition of the accounts receivable. In addition, the acquirers used by the Company are related to first-tier financial institutions with low credit risk. Additionally, mainly for trade receivables collected in installments, the Company monitors the risk for the granting of credit and for the periodic analysis of the expected loss balances. |
The Company also incurs counterparty risk related to derivative instruments, this risk is mitigated by the policy of carrying out transactions according to policies approved by governance bodies.
There
are no amounts receivable that individually account for more than
F-20
Sendas Distribuidora S.A.
Notes to the condensed interim financial statements
September 30, 2022
(In millions of Brazilian Reais, unless otherwise stated)
| 14.1.2 | Interest rate risk |
The Company obtains borrowings and financing with major financial institutions in order to meet cash requirements for investments. Accordingly, the Company is mainly exposed to the risk of significant fluctuations in the interest rate, especially the rate related to derivative liabilities (foreign currency exposure hedge) and debts indexed to CDI. The balance of cash and cash equivalents, indexed to CDI, partially offsets the risk of fluctuations in the interest rates.
| 14.1.3 | Foreign currency exchange rate risk |
The fluctuations in the exchange rates may increase the balances of borrowings in foreign currency and for this reason the Company uses derivative financial instruments such as swaps to mitigate the foreign exchange rate risk, converting the cost of debt into domestic currency and interest rates.
| 14.1.4 | Capital risk management |
The main objective of the Company’s capital management is to ensure that the Company maintains its credit rating and a well-balanced equity ratio, in order to support businesses and maximize shareholder value. The Company manages the capital structure and makes adjustments considering the changes in the economic conditions.
The capital structure is as follows:
| As of | ||||||||
| September 30, 2022 | December 31, 2021 | |||||||
| Borrowings, financing, debentures and promissory notes | ( | ) | ( | ) | ||||
| (-) Cash and cash equivalents | ||||||||
| (-) Derivative financial instruments | ||||||||
| Net debt | ( | ) | ( | ) | ||||
| Shareholders´ equity | ||||||||
| % Net debt over shareholders´ equity | % | % | ||||||
F-21
Sendas Distribuidora S.A.
Notes to the condensed interim financial statements
September 30, 2022
(In millions of Brazilian Reais, unless otherwise stated)
| 14.1.5 | Liquidity risk management |
The Company manages liquidity risk through daily monitoring of cash flows and control of maturities of financial assets and liabilities.
The table below summarizes the maturity profile of the Company’s financial liabilities as of September 30, 2022.
| Less than 1 year | 1 to 5 years | More than 5 years | Total | |||||||||||||
| Borrowings and financing | ||||||||||||||||
| Debentures and promissory notes | ||||||||||||||||
| Derivative financial instruments | ( | ) | ( | ) | ||||||||||||
| Lease liabilities | ||||||||||||||||
| Trade payable | ||||||||||||||||
| Total | ||||||||||||||||
The information was prepared considering the undiscounted cash flows of financial liabilities based on the earliest date the Company may be required to make the payment or be eligible to receive the payment. To the extent that interest rates are floating, the undiscounted amount is obtained based on interest rate curves for the period ended September 30, 2022. Therefore, certain balances presented do not agree with the balances presented in the balance sheets.
| 14.2 | Derivative financial instruments |
| Notional value | Fair value | |||||||||||||||
| As of September 30, 2022 | As of December 31, 2021 | As of September 30, 2022 | As of December 31, 2021 | |||||||||||||
| Swap with hedge accounting | ||||||||||||||||
| Hedge item (debt) | ||||||||||||||||
| Long position | ||||||||||||||||
| Hedge instrument - Fixed rate | ||||||||||||||||
| Hedge instrument - USD + Fixed | ||||||||||||||||
| Hedge instrument - CRI | ||||||||||||||||
| Short position | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net hedge position | ( | ) | ||||||||||||||
Realized and unrealized gains and
losses on these contracts during the nine-month period ended September 30, 2022, are recorded as financial revenues or expenses, net and
the balance receivable at fair value is R$
The effects of the hedge at fair value
through profit or loss for the period ended September 30, 2022 resulted in a gain of R$
F-22
Sendas Distribuidora S.A.
Notes to the condensed interim financial statements
September 30, 2022
(In millions of Brazilian Reais, unless otherwise stated)
| 14.2.1 | Fair values of derivative financial instruments |
Fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm’s length transaction.
The fair values are calculated based on projected future cash flow, using the future CDI curves released by B3, plus the operation spreads, and discounting them to present value using the same CDI curves released by B3.
The fair values of exchange coupon swaps versus CDI rate were obtained using the exchange rates effective at the reporting date and the rates projected by the market based on the currency coupon curves.
In order to calculate the coupon of foreign currency indexed-positions the straight-line convention - 360 consecutive days was adopted and to calculate the coupon of CDI indexed-positions the exponential convention - 252 business days was adopted.
| 14.3 | Sensitivity analysis of financial instruments |
According to Management’s assessment, the most probable scenario considered was, on the maturity date of each transaction, the market curves (currencies and interest) of B3.
Therefore, in the probable scenario (I) there is no impact on the fair value of financial instruments. For scenarios (II) and (III), for the exclusive effect of sensitivity analysis, a deterioration of 5% and 10%, respectively, in the risk variables was considered, up to one year of financial instruments.
For a probable scenario, the weighted
exchange rate set was R$
In the case of derivative financial instruments (aiming at hedging the financial debt), the variations of the scenarios are accompanied by the respective hedges, indicating that the effects are not significant.
The Company disclosed the net exposure of the derivative financial instruments, the corresponding financial instruments and certain financial instruments in the sensitivity analysis table below, for each of the mentioned scenarios:
| Risk | Carrying | As of September 30, | Market projections | |||||||||||||||||||||||
| Transactions | Notes | (CDI Increase) | Amount | 2022 | Scenario (I) | Scenario (II) | Scenario (III) | |||||||||||||||||||
| Borrowings and financing | 14.6.1 | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||
| Borrowings and financing (fixed rate) | 14.6.1 | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||
| Borrowings and financing (foreign currency) | 14.6.1 | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||
| Debentures and promissory notes | 14.6.1 | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||
| Total net effect (loss) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
| Cash and cash equivalents | 5 | |||||||||||||||||||||||||
| Net exposure loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
F-23
Sendas Distribuidora S.A.
Notes to the condensed interim financial statements
September 30, 2022
(In millions of Brazilian Reais, unless otherwise stated)
| 14.4 | Fair value measurement |
The Company discloses the fair value of financial instruments measured at fair value and of financial instruments measured at amortized cost the fair values of which differ from the carrying amounts, pursuant to CPC 46/IFRS 13, which address the concepts of measurement and disclosure requirements. The fair value hierarchy levels are defined below:
Level 1: fair value measurement at the balance sheet date using quoted prices (unadjusted) in active markets for identical assets or liabilities to which the entity may have access at the measurement date.
Level 2: fair value measurement at the balance sheet date using other significant observable assumptions for the asset or liability, either directly or indirectly, except quoted prices included in Level 1.
Level 3: fair value measurement at the balance sheet date using non-observable data for the asset or liability.
The fair values of cash and cash equivalents, trade receivables and trade payables approximate their carrying amounts.
The table below presents the fair value hierarchy of financial assets and liabilities measured at fair value and of financial instruments measured at amortized cost, the fair value of which is being disclosed in the condensed interim financial statements:
| Carrying amount | Fair value | |||||||||||||||||||
| As of September 30, 2022 | As of December 31, 2021 | As of September 30, 2022 | As of December 31, 2021 | Level | ||||||||||||||||
| Trade receivables with credit cards companies and sales vouchers | 2 | |||||||||||||||||||
| Swaps of annual rates between currencies | ( | ) | ( | ) | ( | ) | ( | ) | 2 | |||||||||||
| Interest rate swaps | 2 | |||||||||||||||||||
| Interest rate swaps - CRI | 2 | |||||||||||||||||||
| Borrowings and financing (fair value) | ( | ) | ( | ) | ( | ) | ( | ) | 2 | |||||||||||
| Borrowings and financing (amortized cost) | ( | ) | ( | ) | ( | ) | ( | ) | 2 | |||||||||||
| ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||
There was no change between the fair value measurement levels in the period ended September 30, 2022.
Interest rate and foreign currency swaps and borrowings and financing are classified as level 2 since the readily observable inputs are used, such as expected interest rate and current and future foreign exchange rate.
F-24
Sendas Distribuidora S.A.
Notes to the condensed interim financial statements
September 30, 2022
(In millions of Brazilian Reais, unless otherwise stated)
| 14.5 | Transactions with derivative financial instruments |
The Company has derivative contracts with the financial institutions: Itaú BBA, Scotiabank and BR Partners.
The outstanding derivative financial instruments are presented in the table below:
| As of | ||||||||||||||
| Notional | September 30, | December 31, | ||||||||||||
| Description Risk | (millions) | Due date | 2022 | 2021 | ||||||||||
| Debt | ||||||||||||||
| USD – BRL | US$ | ( | ) | ( | ) | |||||||||
| Debt | ||||||||||||||
| IPCA – BRL | R$ | |||||||||||||
| Interest rate swaps registered at CETIP | ||||||||||||||
| Fixed rate x CDI | R$ | |||||||||||||
| Fixed rate x CDI | R$ | |||||||||||||
| Derivatives - Fair value hedge | ( | ) | ||||||||||||
| 14.6 | Borrowings and financing |
| 14.6.1 | Debt breakdown |
| As of | ||||||||||
| Weighted average rate | September 30, 2022 | December 31, 2021 | ||||||||
| Current | ||||||||||
| Debentures and promissory notes | ||||||||||
| Debentures and promissory notes | ||||||||||
| Borrowing costs | ( | ) | ( | ) | ||||||
| Total debentures and promissory notes | ||||||||||
| Borrowings and financing in domestic currency | ||||||||||
| Working capital | ||||||||||
| Working capital | ||||||||||
| Borrowing costs | ( | ) | ( | ) | ||||||
| Total domestic currency | ||||||||||
| In foreign currency | ||||||||||
| Working capital | ||||||||||
| Total foreign currency | ||||||||||
| Total of borrowings and financing | ||||||||||
| Derivative financial instruments | ||||||||||
| Swap contracts | ( | ) | ( | ) | ||||||
| Swap contracts | ||||||||||
| Total derivative financial instruments | - | ( | ) | |||||||
| Total current | ||||||||||
F-25
Sendas Distribuidora S.A.
Notes to the condensed interim financial statements
September 30, 2022
(In millions of Brazilian Reais, unless otherwise stated)
| As of | ||||||||||
| Weighted average rate | September 30, 2022 | December 31, 2021 | ||||||||
| Non-current | ||||||||||
| Debentures and promissory notes | ||||||||||
| Debentures and promissory notes | ||||||||||
| Borrowing costs | ( | ) | ( | ) | ||||||
| Total debentures and promissory notes | ||||||||||
| Borrowings and financing in domestic currency | ||||||||||
| Working capital | ||||||||||
| Working capital | ||||||||||
| Borrowing costs | ( | ) | ( | ) | ||||||
| Total domestic currency | ||||||||||
| In foreign currency | ||||||||||
| Working capital | - | |||||||||
| Total foreign currency | - | |||||||||
| Total of borrowings and financing | ||||||||||
| Derivative financial instruments | ||||||||||
| Swap contracts | ( | ) | ( | ) | ||||||
| Swap contracts | - | |||||||||
| Total derivative financial instruments | ( | ) | ||||||||
| Total non-current | ||||||||||
| Total | ||||||||||
| Current assets | ||||||||||
| Non-current assets | ||||||||||
| Current liabilities | ||||||||||
| Non-current liabilities | ||||||||||
F-26
Sendas Distribuidora S.A.
Notes to the condensed interim financial statements
September 30, 2022
(In millions of Brazilian Reais, unless otherwise stated)
| 14.6.2 | Rollforward |
| Amounts | ||||
| Balance as of December 31, 2020 | ||||
| Funding | ||||
| Interest provision | ||||
| Swap contracts | ||||
| Mark-to-market | ( | ) | ||
| Exchange rate and monetary variation | ( | ) | ||
| Debt modification impact | ( | ) | ||
| Borrowing costs | ||||
| Interest amortization | ( | ) | ||
| Principal amortization | ( | ) | ||
| Swap amortization | ||||
| Balance as of September 30, 2021 | ||||
| Balance as of December 31, 2021 | ||||
| Funding | ||||
| Interest provision | ||||
| Swap contracts | ||||
| Mark-to-market | ( | ) | ||
| Exchange rate and monetary variation | ( | ) | ||
| Borrowing costs | ||||
| Interest amortization | ( | ) | ||
| Principal amortization | ( | ) | ||
| Swap amortization | ( | ) | ||
| Balance as of September 30, 2022 | ||||
| 14.6.3 | Schedule of non-current maturities |
| Maturity | Amounts | |||
| From 1 to 2 years | ||||
| From 2 to 3 years | ||||
| From 3 to 4 years | ||||
| From 4 to 5 years | ||||
| More than 5 years | ||||
| Total | ||||
| Borrowing Cost | ( | ) | ||
| Total | ||||
F-27
Sendas Distribuidora S.A.
Notes to the condensed interim financial statements
September 30, 2022
(In millions of Brazilian Reais, unless otherwise stated)
| 14.7 | Debentures and promissory notes |
| Date | As of | |||||||||||||||||||||||||||
| Type | Issue amount (in thousands) | Outstanding Debentures (units) | Issuance | Maturity | Annual financial charges | Unit price (in Reais) | September 30,
2022 | December 31, 2021 | ||||||||||||||||||||
| First Issue of Promissory Notes – 3rd series | | | - | - | ||||||||||||||||||||||||
| First Issue of Promissory Notes – 4th series | | | ||||||||||||||||||||||||||
| First Issue of Promissory Notes – 5th series | | | ||||||||||||||||||||||||||
| First Issue of Promissory Notes – 6th series | | | ||||||||||||||||||||||||||
| Second Issue of Debentures – 1st series | | | ||||||||||||||||||||||||||
| Second Issue of Debentures – 2nd series | | | ||||||||||||||||||||||||||
| Second Issue of Promissory Notes – 1st series | | | ||||||||||||||||||||||||||
| Second Issue of Promissory Notes – 2nd series | | | ||||||||||||||||||||||||||
| Third Issue of Debentures – 1st series – CRI | | | ||||||||||||||||||||||||||
| Third Issue of Debentures – 2nd series – CRI | | | ||||||||||||||||||||||||||
| Fourth Issue of Debentures – single series | | | - | |||||||||||||||||||||||||
| First Issue of Commercial Paper Notes – single series | | | - | |||||||||||||||||||||||||
| Fifth Issue of Debentures – single series - CRI | | | - | |||||||||||||||||||||||||
| Sixth Issue of Debentures – 1st series - CRI | | | - | |||||||||||||||||||||||||
| Sixth Issue of Debentures – 2nd series - CRI | | | - | |||||||||||||||||||||||||
| Sixth Issue of Debentures – 3rd series - CRI | | | - | |||||||||||||||||||||||||
| Borrowing Cost | ( | ) | ( | ) | ||||||||||||||||||||||||
| Current liabilities | ||||||||||||||||||||||||||||
| Non-current liabilities | ||||||||||||||||||||||||||||
F-28
Sendas Distribuidora S.A.
Notes to the condensed interim financial statements
September 30, 2022
(In millions of Brazilian Reais, unless otherwise stated)
The Company issues debentures to strengthen its working capital, maintain its cash strategy, lengthen its debt and investment profile. The debentures issued are non-convertible into shares, do not have renegotiation clauses and do not have guarantee.
| 14.8 | Borrowings in foreign currencies |
As of September 30, 2022, the Company has borrowings in foreign currency (US dollar) to strengthen its working capital, maintain its cash strategy and lengthen its debt and investment profile.
| 14.9 | Guarantees |
The Company has signed a promissory note for a borrowing agreement with Scotiabank in the amount of USD50 million, which can be executed after maturity and non-payment of the borrowing.
| 14.10 | Swap contracts |
The Company uses swap operations for
| 14.11 | Financial covenants |
In connection with the debentures and promissory notes issued and part of borrowing operations in foreign currency, the Company is required to maintain certain financial ratios. These ratios are calculated quarterly based on the Company’s condensed interim financial statements prepared in accordance with accounting practices adopted in Brazil, as follows: (i) consolidated net debt/equity less than or equal to 3.00 not exceeding equity; and (ii) consolidated net debt/EBITDA ratio less than or equal to 3.0.
As of September 30, 2022, the Company was compliant with these ratios.
F-29
Sendas Distribuidora S.A.
Notes to the condensed interim financial statements
September 30, 2022
(In millions of Brazilian Reais, unless otherwise stated)
| 15 | Provision for legal proceedings |
The provision for legal proceedings is estimated by the Company and supported by its legal counsel and was established in an amount considered sufficient to cover probable losses.
| Tax claims | Social security and labor | Civil | Total | |||||||||||||
| Balance as of December 31, 2020 | ||||||||||||||||
| Additions | ||||||||||||||||
| Reversals | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Payments | ( | ) | ( | ) | ( | ) | ||||||||||
| Monetary correction | ||||||||||||||||
| Balance as of September 30, 2021 | ||||||||||||||||
| Restricted deposits for legal proceedings | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net provision of judicial deposits | ||||||||||||||||
| ( | Tax claims | Social security and labor | Civil | Total | ||||||||||||
| Balance as of December 31, 2021 | ||||||||||||||||
| Additions | ||||||||||||||||
| Reversals | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Payments | ( | ) | ( | ) | ( | ) | ||||||||||
| Monetary correction | ||||||||||||||||
| Balance as of September 30, 2022 | ||||||||||||||||
| Restricted deposits for legal proceedings | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net provision of judicial deposits | ||||||||||||||||
| 15.1 | Tax claims |
Tax claims are subject by law to monthly monetary adjustment, which refers to an adjustment to the provision based on indexing rates adopted by each tax jurisdiction. Both interest charges and fines, where applicable, were calculated and provisioned with respect to unpaid amounts.
The Company has other tax claims, according to its legal counsels’ analysis, were provisioned, namely: (i) discussions on the non-application of the Accident Prevention Factor (FAP); (ii) discussions with State tax authorities on ICMS tax rate calculated in electricity bills; (iii) IPI in the resale of imported products; and (iv) other matters.
The amount provisioned for these matters
on September 30, 2022 is R$
| 15.2 | Social security and labor |
The Company is a party to various labor
proceedings, especially due to dismissals in the regular course of business. On September 30, 2022, the Company recorded a provision of
R$
F-30
Sendas Distribuidora S.A.
Notes to the condensed interim financial statements
September 30, 2022
(In millions of Brazilian Reais, unless otherwise stated)
| 15.3 | Civil |
The Company is party to civil proceedings (indemnifications, collections, among others) that are in different procedural phases and various courts. Management records provisions in amounts considered sufficient to cover unfavorable court decisions when its internal and external legal counsel assess the losses to be probable.
Among these proceedings, we highlight the following:
The Company is party to various lawsuits
requesting the renewal of rental agreements and the review of the current rent paid. The Company records a provision for the difference
between the amount originally paid by stores and the amounts claimed by the adverse party in the lawsuit when internal and external legal
counsels consider the probability of changing the lease amount paid by the entity. On September 30, 2022, the amount of the provision
for these lawsuits is R$
The Company is party to certain lawsuits
relating to the fines applied by inspection bodies of direct and indirect administration of the federal government, states, and municipalities,
including consumer defense bodies (PROCONs, INMETRO, and local governments). The Company, with the assistance of its legal counsel, assesses
these claims recording provisions for probable cash disbursements according to the estimate of loss. On September 30, 2022, the amount
of provision for these lawsuits is R$
The Company’s total civil, regulatory
and property claims on September 30, 2022, is R$
| 15.4 | Possible contingent liabilities |
The Company is a party to other litigations
for which the risk of loss was classified by its legal counsel to be possible, therefore, not accrued, totaling an updated amount of R$
IRPJ (corporate income tax), IRRF (withholding
income tax), CSLL (social contribution on net income) – The Company received several tax assessment notices relating to tax offsetting
proceedings, goodwill tax amortization disallowance, disagreements regarding payments and overpayments, fines for non-compliance with
ancillary obligation, among other less relevant issues. The amount involved corresponds to R$
COFINS and PIS (federal taxes on gross
revenues) – The Company has been questioned about discrepancies in payments and overpayments; fine for non-compliance with ancillary
obligation, disallowance of COFINS and PIS credits, among other issues. These proceedings are pending judgment at the administrative and
judicial levels. The amount involved in these tax assessments is R$
F-31
Sendas Distribuidora S.A.
Notes to the condensed interim financial statements
September 30, 2022
(In millions of Brazilian Reais, unless otherwise stated)
ICMS (State VAT) – The Company received
tax assessment notices from State tax authorities in connection with credits from: (i) purchases from suppliers considered unqualified
by the registry of the State Revenue Service, and (ii) among others matters. These tax assessments amount to R$
ISS (services tax), IPTU (urban property
tax), Fees and other – The Company has received tax assessments relating to discrepancies in payments of IPTU, fines for non-compliance
with ancillary obligations, ISS – refund of advertising expenses and various fees, totaling R$
INSS (national institute of social security)
– The Company was assessed for divergences in the FGTS and Social Security form (GFIP), offsets not approved, among other matters,
with possible losses of R$
Other litigation– These proceedings
refer to real estate lawsuits in which the Company claims the renewal of lease agreements and rents according to market prices. These
lawsuits involve proceedings in civil court, as well as administrative proceedings filed by inspection bodies, such as the consumer defense
body (PROCONs), the National Institute of Metrology, Standardization and Industrial Quality– INMETRO, the National Agency of Sanitary
Surveillance - ANVISA, among others, totaling R$
Three collective proceedings were filed due to an approach to a customer, in August 2021 at the store in Limeira - SP, which allege racial issues. All cases were satisfactorily answered and are under analysis by the court and, therefore, it is still not possible to reasonably estimate the amounts involved, due to the subjectivity of the matter. No significant impact on the condensed interim financial statements is expected.
The Company engages external legal counsel
to represent it in tax matters, whose fees are contingent on the final outcome of the lawsuits. Percentages may vary according to qualitative
and quantitative factors of each proceeding, on September 30, 2022, the estimated amount, in case of success of all lawsuits, was approximately
R$
F-32
Sendas Distribuidora S.A.
Notes to the condensed interim financial statements
September 30, 2022
(In millions of Brazilian Reais, unless otherwise stated)
| 15.5 | Guarantees |
The Company provided bank guarantees and insurance guarantees for judicial proceedings of a civil, tax and labor nature, described below:
| Lawsuits | Letter of guarantees | |||
| Tax | ||||
| Labor | ||||
| Civil and others | ||||
| Total | ||||
The cost of guarantees is approximately
| 15.6 | Restricted deposits for legal proceedings |
The Company is challenging the payment of certain taxes, contributions, and labor liabilities and made judicial deposits in amounts equivalent to the final court decisions, as well as judicial deposits related to the provision for legal claims.
The Company recorded amounts referring to judicial deposits in its assets as follows:
| As of | ||||||||
| Lawsuits | September 30, 2022 | December 31, 2021 | ||||||
| Tax | ||||||||
| Labor | ||||||||
| Civil and others | ||||||||
| Total | ||||||||
| 16 | Leases |
| 16.1 | Minimum future payments |
Lease contracts totaled R$
| As of | ||||||||
| September 30, 2022 | December 31, 2021 | |||||||
| Lease liabilities - minimum payments | ||||||||
| Less than 1 year | ||||||||
| 1 to 5 years | ||||||||
| More than 5 years | ||||||||
| Present value of lease liabilities | ||||||||
| Current | ||||||||
| Non-current | ||||||||
Lease liabilities interest expense is stated
in note 23. The Company’s incremental interest rate at the agreement signing date was
F-33
Sendas Distribuidora S.A.
Notes to the condensed interim financial statements
September 30, 2022
(In millions of Brazilian Reais, unless otherwise stated)
| 16.2 | Lease liability rollforward |
| Amounts | ||||
| As of December 31, 2020 | ||||
| Addition – Lease | ||||
| Lease modification | ||||
| Interest provision | ||||
| Principal amortizations | ( | ) | ||
| Interest amortization | ( | ) | ||
| Write-off due to early termination of agreement | ( | ) | ||
| As of September 30, 2021 | ||||
| As of December 31, 2021 | ||||
| Addition – Lease | ||||
| Lease modification | ||||
| Interest provision | ||||
| Principal amortizations | ( | ) | ||
| Interest amortization | ( | ) | ||
| Write-off due to early termination of agreement | ( | ) | ||
| As of September 30, 2022 | ||||
| 16.3 | Lease expense on variable rents, low-value, and short-term assets |
| As of September 30, | ||||||||
| 2022 | 2021 | |||||||
| (Expenses) revenues for the period: | ||||||||
| Variables (1% of sales) | ( | ) | ( | ) | ||||
| Subleases (*) | ||||||||
(*)
F-34
Sendas Distribuidora S.A.
Notes to the condensed interim financial statements
September 30, 2022
(In millions of Brazilian Reais, unless otherwise stated)
| 17 | Deferred revenues |
| As of | ||||||||
| September 30, 2022 | December 31, 2021 | |||||||
| Sale and Leaseback | ||||||||
| Rental of spaces in stores (i) | ||||||||
| Checkstand (ii) | ||||||||
| Commercial agreement – payroll (iii) | ||||||||
| Gift card and others | ||||||||
| Marketing | ||||||||
| Total | ||||||||
| Current | ||||||||
| Non-current | ||||||||
| (i) |
| (ii) |
| (iii) |
| 18 | Income tax and social contribution |
| 18.1 | Reconciliation of income tax and social contribution expense |
| For the nine-month period ended September 30, | ||||||||
| 2022 | 2021 | |||||||
| Earnings before income tax and social contribution | ||||||||
| Expense of income tax and social contribution | ( | ) | ( | ) | ||||
| Adjustments to reflect the effective rate | ||||||||
| Tax fines | ( | ) | ( | ) | ||||
| Share of profits | ||||||||
| Interest on equity | - | |||||||
| ICMS subsidy - tax incentives (i) | ||||||||
| Interest selic credits | - | |||||||
| Current period credit | - | |||||||
| Tax benefits | - | |||||||
| Effective income tax | ( | ) | ( | ) | ||||
| Income tax and social contribution for the period | ||||||||
| Current | ( | ) | ( | ) | ||||
| Deferred | ( | ) | ||||||
| Income tax and social contribution expenses | ( | ) | ( | ) | ||||
| Effective rate | % | % | ||||||
| (i) |
F-35
Sendas Distribuidora S.A.
Notes to the condensed interim financial statements
September 30, 2022
(In millions of Brazilian Reais, unless otherwise stated)
| 18.2 | Breakdown of deferred income tax and social contribution |
The main components of deferred income tax and social contribution in the balance sheets are the following:
| As of | ||||||||||||||||||||||||
| As of September 30, 2022 | December 31, 2021 | |||||||||||||||||||||||
| Assets | Liabilities | Net | Assets | Liabilities | Net | |||||||||||||||||||
| Deferred income tax and social contribution | ||||||||||||||||||||||||
| Tax losses | ||||||||||||||||||||||||
| Provision for legal proceedings | ||||||||||||||||||||||||
| Exchange rate variation | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||
| Goodwill tax amortization | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||
| Fair value adjustment | ( | ) | ( | ) | ||||||||||||||||||||
| Property, plant and equipment, intangible and investment properties | ||||||||||||||||||||||||
| Unrealized gains with tax credits | ( | ) | ( | ) | ||||||||||||||||||||
| Cash flow hedge | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||
| Lease net of right of use | ||||||||||||||||||||||||
| Provision for restructuring | ||||||||||||||||||||||||
| Provision of inventory | ||||||||||||||||||||||||
| Others | ( | ) | ( | ) | ||||||||||||||||||||
| Gross deferred income tax and social contribution assets (liabilities) | ( | ) | ( | ) | ||||||||||||||||||||
| Compensation | ( | ) | ( | ) | ||||||||||||||||||||
| Net deferred income tax and social contribution assets (liabilities), net | ||||||||||||||||||||||||
Management has assessed the future realization of deferred tax assets, considering the projections of future taxable income, in the context of the main variables of its businesses. This assessment was based on information from the strategic planning report approved by the Company’s Board of Directors.
The Company estimates the recovery of the deferred tax assets as of September 30, 2022 as follows:
| Years | Amounts | |||
| Up to 1 year | ||||
| From 1 year to 2 years | ||||
| From 4 years to 5 years | ||||
| More than 5 years | ||||
F-36
Sendas Distribuidora S.A.
Notes to the condensed interim financial statements
September 30, 2022
(In millions of Brazilian Reais, unless otherwise stated)
| 18.3 | Rollforward |
| As of | ||||||||
| September 30, 2022 | December 31, 2021 | |||||||
| At the beginning of the period | ( | ) | ||||||
| Benefits (expenses) in the period | ( | ) | ||||||
| Tax over other comprehensive income | - | |||||||
| Others | - | |||||||
| At the end of the period | ||||||||
| 19 | Shareholders’ equity |
| 19.1 | Capital stock and stock rights |
The capital stock, fully subscribed and
paid-up on September 30, 2022, is R$
On February 21, 2022, the Board of Directors
approved a capital increase in the amount of R$
At the Extraordinary General Meeting held
on April 28, 2022, the Company approved, observing the authorized capital limit, a capital increase in the amount R$
On May 9, 2022, the Board of Directors
approved a capital increase in the amount of R$
On July 27, 2022, the Board of Directors
approved a capital increase in the amount of R$
The Company’s shareholding structure is as follows:
| As of | ||||||||||||||||
| September 30, 2022 | December 31, 2021 | |||||||||||||||
| Number of shares | Participation | Number of shares with split effect | Participation | |||||||||||||
| Controlling shareholders | % | % | ||||||||||||||
| Outstanding shares | % | % | ||||||||||||||
| Total | % | % | ||||||||||||||
| 19.2 | Distribution of dividends and interest on own equity |
At the Annual General Meeting (“AGM”)
held on April 28, 2022, the shareholders voted to approve the minimum mandatory dividend in the amount of R$
F-37
Sendas Distribuidora S.A.
Notes to the condensed interim financial statements
September 30, 2022
(In millions of Brazilian Reais, unless otherwise stated)
| 19.3 | Expansion Reserve |
At the AGM held on April 28, 2022, the
constitution of the expansion reserve in the amount of R$
| 19.4 | Tax incentive granted |
Tax incentives granted by the States are
considered investment subsidies, which are deductible for the calculation of income tax and social contributions. Therefore, for the nine-month
period ended of September 30, 2022, the Company allocated the amount of R$
As provided for in article 30 of Law 12,973/14, the tax incentive reserve may be used to absorb losses, provided that the other profit reserves have already been fully absorbed, except for the legal reserve, or for capital increase. Within the same legal provision, the tax incentive reserve and the legal reserve are not part of the calculation basis for the minimum mandatory dividend, and the Company must subject it to taxation in case of distribution.
| 19.5 | Share-based payment |
| 19.5.1 | Recognized Options Granted |
Information relating to the Company’s option plan and compensation plan is summarized below:
| 1st | Strike
price on the grant | As of September 30, 2022 | ||||||||||||||||||||||
| exercise | date | Number of shares (in thousands) | ||||||||||||||||||||||
| Granted series | Grant date | date | (in reais) | Grantees | Exercised | Cancelled | Current | |||||||||||||||||
| B8 | | ( | ) | ( | ) | |||||||||||||||||||
| C8 | | ( | ) | ( | ) | |||||||||||||||||||
| B9 | | |||||||||||||||||||||||
| C9 | | |||||||||||||||||||||||
| ( | ) | ( | ) | |||||||||||||||||||||
F-38
Sendas Distribuidora S.A.
Notes to the condensed interim financial statements
September 30, 2022
(In millions of Brazilian Reais, unless otherwise stated)
| 19.5.2 | Consolidated information of Company’s share-based payment plans |
According to the plans, the options granted
in each of the series may represent a maximum of
The table below shows the maximum percentage of dilution to which current shareholders could eventually be subject to in the event that all options granted are exercised until September 30, 2022:
| For the nine-month period ended September 30, 2022 | ||||
| (in thousands) | ||||
| Number of shares | ||||
| Balance of effective stock options granted | ||||
| Maximum percentage of dilution | % | |||
The fair value of each option granted is estimated on the grant date, by using the options pricing model “Black&Scholes” taking into account the following assumptions for B8, C8, B9 and C9 series: (a) expectation of dividends of 1.28% (series 8) and 1.20% (series 9); (b) expectation of volatility nearly 37.06% (series 8) and 37.29% (series 9); (c) the weighted average interest rate without risk of 7.66% (series 8) and 12.18% (series 9), and (d) exit rate of approximately 8.00% in both series.
The expectation of remaining average life of the series outstanding on September 30, 2022, is 20 months (series 8) and 32 months (series 9). The weighted average fair value of options granted on September 30, 2022, was R$17.21 and R$7.69 (B8 and C8 respectively), and R$15.27 and R$7.35 (B9 and C9 respectively).
| Shares (in thousands) | Weighted average of exercise price (R$) | Weighted average of remaining contractual term | ||||||||||
| On December 31, 2021 | ||||||||||||
| On September 30, 2022 | ||||||||||||
| Granted in the period | ||||||||||||
| Exercised during the period | ( | ) | ||||||||||
| Outstanding at period end | ||||||||||||
| Total to be exercised on September 30, 2022 | ||||||||||||
The amount recorded for the nine-month
period ended September 30, 2022 was R$
F-39
Sendas Distribuidora S.A.
Notes to the condensed interim financial statements
September 30, 2022
(In millions of Brazilian Reais, unless otherwise stated)
| 20 | Net operating revenue |
| For the nine-month period ended September 30, | ||||||||
| 2022 | 2021 | |||||||
| Gross operating revenue | ||||||||
| Goods | ||||||||
| Services rendered and others | ||||||||
| (-) Revenue deductions | ||||||||
| Returns and sales cancellation | ( | ) | ( | ) | ||||
| Taxes | ( | ) | ( | ) | ||||
| ( | ) | |||||||
| Net operating revenue | ||||||||
| 21 | Expenses by nature |
| For the nine-month period ended September 30, | ||||||||
| 2022 | 2021 | |||||||
| Inventory cost | ( | ) | ( | ) | ||||
| Personnel expenses | ( | ) | ( | ) | ||||
| Outsourced services | ( | ) | ( | ) | ||||
| Selling expenses | ( | ) | ( | ) | ||||
| Functional expenses | ( | ) | ( | ) | ||||
| Other expenses | ( | ) | ( | ) | ||||
| ( | ) | ( | ) | |||||
| Cost of sales | ( | ) | ( | ) | ||||
| Selling expenses | ( | ) | ( | ) | ||||
| General and administrative expenses | ( | ) | ( | ) | ||||
| ( | ) | ( | ) | |||||
| 22 | Other operating expenses, net |
| For the nine-month period ended September 30, | ||||||||
| 2022 | 2021 | |||||||
| Result with property, plant and equipment | ( | ) | ||||||
| Reversal (provision) for legal proceedings | ( | ) | ||||||
| Restructuring expenses and others | ( | ) | ( | ) | ||||
| Others | ( | ) | ||||||
| Total | ( | ) | ( | ) | ||||
F-40
Sendas Distribuidora S.A.
Notes to the condensed interim financial statements
September 30, 2022
(In millions of Brazilian Reais, unless otherwise stated)
| 23 | Net financial result |
| For the
nine-month period ended September 30, | ||||||||
| 2022 | 2021 | |||||||
| Financial revenues | ||||||||
| Cash and cash equivalents interest | ||||||||
| Monetary correction (assets) | ||||||||
| Other financial revenues | ||||||||
| Total financial revenues | ||||||||
| Financial expenses | ||||||||
| Cost of debt | ( | ) | ( | ) | ||||
| Cost and discount of receivables | ( | ) | ( | ) | ||||
| Monetary correction (liabilities) | ( | ) | ( | ) | ||||
| Interest on leasing liabilities | ( | ) | ( | ) | ||||
| Other financial expenses | ( | ) | ( | ) | ||||
| Total financial expenses | ( | ) | ( | ) | ||||
| Total | ( | ) | ( | ) | ||||
| 24 | Earnings per share |
The Company calculates earnings per share by dividing the net income for the period, relating to each class of shares, by the total number of common shares outstanding in the period.
The table below presents the determination of the net income for the period available to holders of common shares outstanding to calculate the basic earnings and diluted earnings per share in each period presented:
| As of September 30, | ||||||||
| 2022 | 2021 | |||||||
| Basic number: | ||||||||
| Allocated basic earnings and not distributed | ||||||||
| Net income allocated available to common shareholders | ||||||||
| Basic denominator (millions of shares) | ||||||||
| Weighted average of the number of shares | ||||||||
| Basic earnings per million shares (R$) | ||||||||
| Diluted number: | ||||||||
| Allocated diluted earnings and not distributed | ||||||||
| Net income allocated available to common shareholders | ||||||||
| Dilute denominator (millions of shares) | ||||||||
| Weighted average of the number of shares | ||||||||
| Weighted average of stock options plan | ||||||||
| Diluted weighted average of shares | ||||||||
| Diluted earnings per million shares (R$) | ||||||||
F-41
Sendas Distribuidora S.A.
Notes to the condensed interim financial statements
September 30, 2022
(In millions of Brazilian Reais, unless otherwise stated)
| 25 | Non-cash transactions |
The Company had transactions that did not represent cash disbursements and, therefore, these were not presented in the Statement of Cash Flows, as follows:
| ● | Acquisition of intangibles with related parties and suppliers, in notes 9.1, 12.2 and 13.3; |
| ● | Acquisition of property, plant and equipment not yet paid, in note 11.4.; and |
| ● | Acquisition of assets held for sale with related parties, in note 26.1. |
| 26 | Assets held for sale |
| As of | ||||||||
| September 30, 2022 | December 31, 2021 | |||||||
| Sale and leaseback | ||||||||
| Extra Hiper stores (i) | ||||||||
| (i) | As of September 30, 2022, corresponds to 1 property owned by
GPA, which is sold to the real estate investment fund Barzel Properties, see note |
| 26.1 | Additions to assets held for sale for cash flow presentation purpose |
| As of September 30, 2022 | ||||
| Additions | ||||
| Acquisition of assets - Additions | ( | ) | ||
| Acquisition of assets - Payments | ||||
| Total | ||||
| 27 | Subsequent events |
| 27.1 | Capital contribution |
At the meeting of the Board of Directors
held on October 20, 2022, the Company approved, observing the authorized capital limit, a capital increase in the amount of R$
| 27.2 | Casino’s potential sale of part its stake |
On October 26, 2022, Casino Guichard Perrachon
informed the Company’s Board of Directors that it has initiated the study of a potential sale of part of its stake in the Company
for an amount of approximately US$
F-42