SECURITIES AND EXCHANGE
COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF THE
SECURITIES EXCHANGE ACT OF
1934
For the month of April, 2021
(Commission File No. 001-33356),
Gafisa S.A.
(Translation of Registrant's name into
English)
Av. Juscelino Kubitschek 1830 |03º andar|
Conj. 32 Torre 2 - Cond. São Luiz
São Paulo, SP, 04543-
000
Federative Republic of
Brazil
(Address of principal executive
office)
Indicate by check mark whether the registrant files or will
file
annual reports under cover Form 20-F or Form 40-F.
Form 20-F ___X___ Form 40-F ______
Indicate by check mark if the
registrant is submitting
the Form 6-K in paper as permitted by Regulation S-T Rule
101(b)(1)
Yes ______ No ___X___
Indicate by check mark if the
registrant is submitting
the Form 6-K in paper as permitted by Regulation S-T Rule
101(b)(7):
Yes ______ No
___X___
Indicate by check mark whether by
furnishing the information contained in this Form,
the Registrant is also thereby furnishing the information to the
Commission pursuant
to Rule 12g3-2(b) under the Securities Exchange Act of
1934:
Yes ______ No
___X___
If “Yes” is marked, indicate below
the file number assigned
to the registrant in connection with Rule 12g3-2(b):
N/A
Financial Statements
Gafisa S.A.
December 31, 2020
Independent Auditor’s Report on the Financial Statements
(A free translation of the
original report in Portuguese as published in
Brazil)
Gafisa S.A.
Financial Statements
December 31, 2020
Contents
Management Report |
1 |
Independent
Auditor’s Report on the Financial Statements |
7 |
|
|
Audited financial
statements |
|
|
|
Statements of financial position |
13 |
Statement of profit or loss |
15 |
Statement of comprehensive income |
16 |
Statement of changes in equity |
17 |
Statement of cash flows |
18 |
Statement of value added |
19 |
Notes to the financial statements |
20 |
Statement of the executive officers about the financial
statements |
78 |
Statement of the executive officers about the opinion report of
the independent auditors |
79 |
Minutes of the Audit Committee’s meeting |
80 |
Minutes of the Board of Directors’ meeting |
81 |
Earnings release 4Q20 |
82 |
2020 MANAGEMENT REPORT
GAFISA RESUMES SUSTAINABLE GROWTH AND PROFITABILITY IN
2020
Recurring net income of R$ 29 million for the 4Q20 as compared to
R$ 23 million down for the 4Q19, an increase of R$ 52 million.
Dear Shareholders,
In 2020 we have reaped the first fruits of the restructuring
process initiated in 2019 in an incisive and assertive way.
Supported by a capital structure strengthened by our shareholders,
combined with the current Management’s determination and focus on
results, we have successfully responded to the extraordinary
challenges of an unprecedent crisis and achieved impressive
results. The resumption of Gafisa’s growth has materialized in 2020
in the operational, financial and strategic levels.
In the operational level, we have launched R$898.0 million in TSV,
the best annual performance since 2016. The resumption of launches
in 2020 is a direct consequence of the Company’s growth strategy in
organic way as well as through M&As, considering that 67.5% of
launches arise from the assets acquired by the new management
through M&A. Two transactions are worth noting: the acquisition
of Upcon and four Calçada projects in Rio. In both, besides the
landbank, there was an important Human Capital addition, with the
joining of cooperative and high performance teams. The acquisition
of Calçada also enabled “Gafisa Rio” to start its operations with
an iconic launch already in the 4Q20, and to have active operations
on a local office’s initiative.
In terms of landbank, we have a acquired a total of 14 land in 2020
with potential TSV of R$2.1 billion, considering that approximately
60.0% are also from M&A transactions. In the fourth quarter,
our sales amounted to R$292.0 million, doubling our sales for the
3Q20, and the best quarterly sales performance since 2Q18. This
increase shows that not only Gafisa’s launches resumed with
differentiated ventures, but also the continuous strengthening of
our sales force. Additionally, we have delivered a total of 12
ventures in 2020, with over 2,000 units and R$ 1.1 billion in TSV,
all within the terms renegotiated by the new management with
customers, which shows the Company’s focus on results and great
delivery capacity. This large delivery volume was made in a year
marked by the challenges posed by the pandemic, which reaffirms the
great commitment and consistency of the new Management’s work with
all of its stakeholders.
It is worth noting that the year 2020 was deeply marked by the
Covid-19 pandemic, which required rapid and assertive changes to
work practices, adjustments in operational and financial planning,
among other changes introduced to assure that construction works
continued, but without failing to give priority to the safety of
our employees, customers and suppliers. As Company and part of a
deeply shaken society, Gafisa understands its role and shows
solidarity with the innumerous victims of this crisis. This
experience heightened our sense of responsibility and our
commitment to work for the benefit of the society, the environment
and governance.
Our financial results for the 4Q20 and 2020 reflect the growth of
our operating activities and start to reflect the new project era.
We recorded a growth in adjusted gross margin from 24.6% for the
3Q20 to 29% for the 4Q20. Net revenue reached R$579.9 million, a
growth above 290.0% as compared to the 3Q20, being determining
factor in generating a net income of R$29 million (all of which
recurring). When compared to the recurring net income for the 4Q19,
which was R$ 23 million down, we have an increase of R$ 52 million
in the latest quarter. It is also worth mentioning that the REF
margin (unrecognized profit or loss) is still at a very healthy
level of 32.8%.
This year can be considered as the company’s recovery in the credit
agenda in the financial and capital markets. New funding for
projects were negotiated at rates from CDI + 3.5% p.a. All projects
that were launched have identified financing calculations, as well
as all construction works in progress. Moreover, we have adopted
for some projects the rationale of obtaining finance in advance,
considering the business lifecycle, partially or fully refunding
land disbursement and guaranteeing funds for completing works. We
thus started to re-leverage the Company, with discipline and
well-developed projects, to maximize the return of capital of
shareholders and enjoying the good moment in the credit market.
We rely on a well-devised business planning for the next cycles,
and for 2021 we have disclosed the Launch Guidance of R$1.5 to
R$1.7 billion. Our short and medium-term landbank considers a
pipeline of 18 projects and approximately R$2.5 billion in
estimated TSV. We continue to intensely seek growth through
acquisitions of both land and assets for Gafisa or Gafisa
Propriedades.
Also in 2020, we have structured Gafisa Propriedades according to
our strategic planning devised in the end of 2019 and that included
the transformation of Gafisa into a broad real estate business
platform, with new business lines and use of innovation and
technology to diversify its income generation. We gained leverage
from the Company’s extensive expertise in the real estate sector,
this new business unit will be Gafisa’s vehicle for real estate
investment, development and management focused on income
generation.
Gafisa understands its power and relevance in the development and
construction market, potentialized by the tradition of its
trademark – one of the top recognized trademarks in this sector of
the Brazilian market. Our new management model has been adopted
with energy and discipline, reviving the Company’s history of
success and creation of value to our shareholders.
OPERATIONAL AND FINANCIAL PERFORMANCE
The year 2020 marked the consistent recovery of good operational
performance by the Company, of which sales, launches and deliveries
of construction works were noteworthy.
In the year 2020, the Company resumed its launches, relying on five
ventures that totaled a TSV estimated at R$898 million. It is worth
noting that the Covid-19 pandemic - that restricted travels, closed
sales stands and affected the country’s economic activities -
postponed for some months the launches planned for the beginning of
the year, demonstrating our focus and commitment to the Company’s
growth recovery.
Sales
In 2020, the Company recorded gross sales of R$ 516.9 million
(without including a transaction between Gafisa and Gafisa
Propriedades), 77.0% up on 2019. The growth can be explained by the
resumption of launches, which had been discontinued from the 1Q19,
besides the continuous strengthening of our sales force. Cancelled
contracts totaled R$78.9 million, 18.1% drop from 2019, of R$96.4
million.
Changes in Gross Sales and Cancelled Contracts (R$
million)

Total deliveries in 2020 was above the estimate of 10 ventures,
reaching 12 delivered projects, with 2,115 units and a total TSV of
R$1.1 billion. Such large delivery volume in a year marked by the
pandemic, and little longer than 18 months after the new Management
took over the Company.

Net revenue reached R$579.9 million for the 4Q20, an increase of
over 290.0% as compared to the 3Q20, a result of the increase in
sales, acquisitions made over the period, and construction
progress. In relation to the same period of the previous year, the
growth was nearly 400.0%. Considering yearly figures, in 2020 net
revenue totaled R$884.0 million, up 120.8% from 2019.
Gafisa’s adjusted gross profit for the fourth quarter amounted to
R$168.0 million, as compared to the R$36.6 million reported for the
3Q20 and R$44.2 million for the 4Q19. The adjusted gross margin for
the quarter was 29.0%, a 4.4 p.p. increase quarter-on-quarter, due
to the start of the recognition of the new management projects,
which have overall shown better margins as compared to previous
managements.
In the year-over-year comparison, we also note a growth in total
adjusted gross profit, which reached R$260.9 million in 2020, up
76.1% from 2019.

1 Adjusted for capitalized
interest
The net income was recorded in the amount of R$29.0 million for the
4Q20, while a net loss was recorded in the amount of R$56.5 million
for the 3Q20, and profit of R$47.0 million was recorded for the
4Q19 – a drop of 38.3% year-over-year. Meanwhile, in the 4Q19
nearly R$ 33 million was non-recurring. Considering recurring net
income, the 4Q20 is double as compared to the one recorded for the
4Q19. In relation to yearly amounts, the net loss for 2020 amounted
to R$76.5 million.
The net income for the 4Q20 starts to reflect the new era of
ventures, with differentiated projects and more robust margins.
HUMAN RESOURCES
We have an experienced team who is at the vanguard of the Brazilian
real estate sector and other business types, which positively
contributes to the continuous improvement in our processes, client
satisfaction and respect, as well as to attain favorable results to
our Company.
Occupational safety and accident are central themes for Gafisa.
Therefore, we maintain a continuous program of risk identification,
prevention and mitigation, which aims, besides preserving the
physical integrity of our direct or indirect staff, to offer a
basis for a healthier life. For us, investing in safety is a
guarantee of wellness in and out of the work environment. We offer
training programs to the team in the field (directly related to
construction works), as well as to our collaborators of third-party
companies, who provide services in our sites and some ventures.
The Company has 277 employees (base December 2020).
CORPORATE GOVERNANCE
Gafisa’s Board of Directors is responsible for making decisions and
formulating general guidelines and policies for the Company’s
business, including its long-term strategies. In addition, the
Board also appoints executive officers and supervises their
activities. The decisions of the Board of Directors are taken by
the majority vote of its members. In the event of a disagreement,
the Chair of the Board of Directors has, in addition to her/his
personal vote, to cast a tie-breaking vote.
The current Board is formed by eight members, most of whom are
independent (62.5%). The members serve for a unified term of office
of two years*, according to the Listing Rules of Novo Mercado, with
reelection and removal being permitted by shareholders in
Shareholders’ Meeting. The members of Board of Directors are shown
in the following table.
Name |
Birth
date |
Position |
Election
date |
Leo Julian
Simpson |
03/30/1956 |
Chairman |
April 15,
2019 |
Antonio
Carlos Romanoski |
02/12/1945 |
Effective
Member |
April 15,
2019 |
Eduardo
Larangeira Jácome |
10/15/1955 |
Effective
Member |
April 15,
2019 |
Nelson
Sequeiros Rodriguez Tanure |
11/21/1951 |
Effective
Member |
April 15,
2019 |
João
Antonio Lopes Filho |
08/12/1963 |
Effective
Member |
February
7, 2020 |
Thomas
Cornelius Azevedo Reichenheim |
12/04/1947 |
Effective
Member |
April 15,
2019 |
Nelson de
Queiroz Sequeiros Tanure |
05/28/1985 |
Effective
Member |
August 7,
2020 |
Gilberto
Benevides |
07/24/1951 |
Effective
Member |
April 30,
2020 |
FISCAL COUNCIL
Gafisa’s Articles of Incorporation provide for a non-permanent
Fiscal Council, the Shareholders’ Meeting being able to determine
its installation and members, as provided in the Law. The Fiscal
Council, when installed, will comprise three to five members, and
an equal number of alternates. The operations of the Fiscal
Council, when installed, ends in the first Annual Shareholders’
Meeting (ASM) held after its installation, the re-election of its
members being permitted. The compensation of fiscal council members
is set at the Shareholders’ Meeting that elect them. The Company’s
Fiscal Council is not currently installed.
EXECUTIVE MANAGEMENT
The Executive Management is the Company’s body mainly responsible
for managing and daily monitoring the general policies and
guidelines established at the Shareholders’ Meeting and Board of
Directors. Gafisa’s Executive Management shall be composed of a
minimum of two and a maximum of eight members, including the CEO,
the CFO and the IR Officer, elected by the Board of Directors for a
three-year term of office, reelection being permitted, as
established in the Articles of Incorporation. In the current term
of office, six members comprise the Executive Management:
NAME |
POSITION |
DATE OF LAST
INVESTITURE |
TERM OF
OFFICE |
Ian
Monteiro de Andrade |
CFO and
Investor Relations Officer |
March 2,
2020 |
March 2,
2023 |
Guilherme
Augusto Soares Benevides |
COO |
May 17,
2019 |
May 16,
2022 |
Guilherme
Luis Pesenti e Silva |
Statutory
Officer |
January
28, 2020 |
January
28, 2023 |
Luiz
Fernando Ortiz |
Statutory
Officer |
January
28, 2020 |
January
28, 2023 |
Fabio
Freitas Romano |
Statutory
Officer |
March 2,
2020 |
March 2,
2023 |
André
Ackermann |
Statutory
Officer |
March 2,
2020 |
March 2,
2023 |
AUDIT COMMITTEE
The Audit Committee supervises the Company’s accounting and
financial reporting, planning and analysis processes, including
those of quarterly and financial reporting. It guides the
involvement and disclosure of auditors throughout the auditing
process, assuring the full compliance with legal requirements and
accounting standards. Moreover, it is responsible for monitoring
the internal control and internal audit processes, and choosing the
accounting policies. The members are Gilberto Braga, Pedro Carvalho
de Mello and Thomas Cornelius Azevedo Reichenheim.
DIVIDENDS, SHAREHOLDERS RIGHTS AND SHARE DATA
In order to protect the interest of all shareholders equally, the
Company establishes that, according to the effective legislation
and the best governance practices, the following rights are
entitled to Gafisa’s shareholders:
|
ü |
Vote in annual or
extraordinary Shareholders' Meeting, and make recommendations and
provide guidance to the Board of Directors on decision
making; |
|
ü |
Receive dividends and
participate in profit sharing or other share-related distributions,
in proportion to their interests in capital; |
|
ü |
Supervise Gafisa's
management, according to its Articles of Incorporation, and step
down from the Company in the cases provided in the Brazilian
Corporate Law; and |
|
ü |
Receive at least 100% of
the price paid for common share of the controlling stake, according
to the Listing Rules of Novo Mercado, in case of public offering of
shares as a result of the disposal of the Company's
control. |
Under the terms of article 47, paragraph 2 (b) of Articles of
Incorporation, the balance of net income for the year, calculated
after the deductions provided in the Articles of Incorporation and
adjusted according to article 202, of the Brazilian Corporate Law,
will have 25% of it allocated to the payment of mandatory dividend
to all shareholders of the Company.
Considering that the Company recognized loss for the year ended
December 31, 2020, there is no proposal for allocation of net
income and dividend distribution for such year.
CAPITAL MARKETS
The Company has diluted capital, and its securities are traded in
the Brazilian market and abroad through American Depositary Receipt
(ADR). From December 17, 2018, Gafisa’s shares are no longer listed
on the New York Stock Exchange (NYSE), and its ADRs started to be
traded Over the Counter (OTC). The Company’s delisting process was
approved in the meeting of the Board of Directors held on November
26, 2018.
Gafisa is currently reevaluating the re-listing process of the New
York Stock Exchange (NYSE), aiming to increase the visibility of
the Company and access to new markets.
In 2020, we reached an average daily trading volume of R$35.6
million on B3 and US$ 33,071 on NYSE/OTC. The Company’s shares
ended the year 2020 quoted at R$4.35 (GFSA3) and US$1.62
(GFASY).
INDEPENDENT AUDITORS
The Company’s policy on commissioning non-external audit services
to independent auditors is based on principles that preserve their
autonomy. These internationally accepted principles consist of the
following: (a) the auditor cannot audit its own work, (b) the
auditor cannot function in the role of management in its client,
and (c) the auditor cannot promote the interests of its client.
According to Article 2 of CVM Instruction 381/03, Gafisa informs
that BKR Lopes Machado, the independent audit firm of the Company
and its subsidiaries, did not provide services other than
independent audit in 2020.
MANAGEMENT STATEMENT
The Executive Management declares, in compliance with article 25,
paragraph 1, items V and VI, of CVM Instruction 480/2009, that it
revised, discussed and agrees with the Financial Statements
contained in this Report and the opinion issued in the Independent
Auditor’s Report on them.
INDEPENDENT AUDITOR’S REPORT ON INDIVIDUAL AND CONSOLIDATED
FINANCIAL STATEMENTS
To
Shareholders and Management of
Gafisa S.A.
São Paulo, SP
Opinion
We have audited the accompanying individual and consolidated
financial statements of Gafisa S.A. (“Gafisa” or
“Company”), identified as Company and Consolidated,
respectively, which comprise the statement of financial position as
of December 31, 2020, and the respective statement of profit or
loss, statement of comprehensive income, statement of changes in
equity, and statement of cash flows for the year then ended, as
well as the corresponding explanatory notes, including the summary
of significant accounting policies.
Opinion on the individual financial statements
In our opinion, the aforementioned individual financial statements
present fairly, in all material respects, the financial position of
Gafisa S.A. as of December 31, 2020, and the performance of its
operations and cash flows for the year then ended, in accordance
with the accounting practices adopted in Brazil, applicable to real
estate development entities in Brazil, registered with the
Brazilian Securities and Exchange Commission (CVM).
Opinion on the consolidated financial statements
In our opinion, the aforementioned consolidated financial
statements present fairly, in all material respects, the
consolidated financial position of Gafisa S.A. as of December 31,
2020, and its consolidated performance of its operations and cash
flows for the year then ended, in accordance with the accounting
practices adopted in Brazil and the International Financial
Reporting Standards (IFRS), issued by the International Accounting
Standards Board (IASB), applicable to real estate development
entities in Brazil, registered with the Brazilian Securities and
Exchange Commission (CVM).
Basis for opinion on the individual and consolidated financial
statements
We conducted our audit in accordance with the Brazilian and
International Standards on Auditing. Our responsibilities,
according to such standards, are described in the following
section, entitled “Auditor’s responsibility for the audit of
individual and consolidated financial statements”. We are
independent of the Company and its subsidiaries, according to the
relevant ethical principles established in the Accountant’s Code of
Professional Ethics and the professional standards issued by the
Federal Accounting Council (CFC), and comply with other ethical
responsibilities according to such standards. We believe that the
audit evidence we have obtained is sufficient and appropriate to
base our opinion.
Emphasis
Accounting practices adopted in Brazil applicable to real estate
development entities in Brazil, registered with the CVM
As described in Note 2.1, the individual (Company) and consolidated
financial statements have been prepared in accordance with the
accounting practices adopted in Brazil and the International
Financial Reporting Standards (IFRS), issued by the International
Accounting Standards Board (IASB), applicable to real estate
development companies in Brazil, registered with the CVM.
Accordingly, the determination of the accounting policy to be
adopted by entity, on recognition of revenue from purchase and sale
of real estate unit not yet completed, on aspects related to
transfer of control, follows the understanding expressed by CVM in
the Circular Letter/CVM/SNC/SEP 02/2018 on the application of NBC
TG 47 (IFRS 15).
Our opinion does not contain exception in relation to this
matter.
Key audit matters
Key Audit Matters (KAM) are those that, in our professional
judgment, were of most significance in our audit of the current
year. These matters were addressed in the context of our audit of
the individual and consolidated financial statements as a whole,
and in forming our opinion thereon, and, therefore, we do not
provide a separate opinion on these matters.
The Company recognizes real estate sales revenue during
construction as established in the Circular Letter CVM/SNC/SEP
02/2018, as described in the Notes 2.1 and 2.2.2 to the individual
and consolidated financial statements. The recognition of the
revenue of the Company and its subsidiaries requires the
measurement of progress and satisfaction of performance obligation
over time. This measurement requires significant and timely
judgment by the Management of the Company and its subsidiaries of
the estimate of inputs and expenditures necessary for satisfying
the respective performance obligations, considering, for example,
the costs to be incurred until the completion of construction works
and measurement of the progress of the respective real estate
ventures.
Consequently this matter was considered key for our audit because
we consider the high risk of subjectivity in the evaluation of the
estimates made by the Company’s Management, linked to the relevance
and amounts involved in revenue recognition.
How our audit conducted this matter:
Our main audit procedures aimed at the appropriate recognition of
the revenue from real estate sales during construction were the
following: (i) Evaluation of the effectiveness of the internal
controls directly related to the approval and revision of
construction costs (incurred and to be incurred), used in the
calculation of the percentage of completion of real estate
ventures; (ii) On sampling basis, we have obtained budget maps –
from the commencement of construction of the qualifiable asset
until its latest version - and we compared them with the accounting
records. We also compared, on sampling basis, the documents
supporting the incurred costs, units sold, and amount of sales
contracts used in revenue calculation. (iii) Recalculation of
revenue recognized based on information extracted from budgets
approved by the engineer responsible for the venture. (iv)
analytical reviews of the estimates of costs incurred and to be
incurred; and (v) evaluation of the disclosure in the individual
and consolidated financial statements.
Based on the findings of the followed audit procedures, we
understand that: (i) the assumptions adopted by Management to
estimate the costs to be incurred are acceptable in the context of
the individual and consolidated financial statements; and (ii) the
calculations made by Management about the percentage of completion
correspond to the criteria established in the Circular Letter
CVM/SNC/SEP 02/2018.
Provisions and contingent liabilities
According to Note 2.2.1 – item © and 16, the Company and its
subsidiaries are parties to lawsuits of tax, civil and labor
nature, for which Management estimates the involved amounts and
records a provision in the individual and consolidated financial
statements for the cases it considers that there will be a probable
loss, as established in the accounting standard CPC 25 (IAS 17) -
Provisions, Contingent Liabilities and Contingent Assets. Besides
the lawsuits considered as probable loss, the Company is party to
labor and civil lawsuits in progress, for which no provision is
recorded, as the likelihood of loss is considered possible or
remote by Management, based on the positions of its legal counsel.
The risk evaluation and loss estimates are prepared by management
based on available evidences and opinion of the Company’s legal
counsel, involving high judgment level, given the complexity of
themes. The progress of such lawsuits in the many applicable levels
may result in change in the evaluation of risk of loss, and
significantly impact the recognized provisions and the profit or
loss of the Company and its subsidiaries.
Due to the volume of claims, the criteria established for timely
identifying the need for recognizing a provision and the existence
of significant judgments involved in the process of evaluation and
measurement of provisions and disclosures of contingent
liabilities, we considered it a key audit matter.
How our audit conducted this matter:
Our audit procedures included, but were not limited to the
following: (i) obtaining, reading and evaluating the mails of the
legal counsel of the Company and its subsidiaries, (ii) matching
the total contingent liabilities mentioned by the Company’s legal
counsel that are expected to lead to a probable outflow of funds
with the existing provision in the individual and consolidated
financial statements, (iii) inspecting the Management’s meeting
minutes, and (iv) analyzing the disclosures made in the notes to
the individual and consolidated financial statements.
We consider that the criteria and assumptions adopted by
Management for determining the provision for contingent
liabilities, as well as the corresponding disclosures are
reasonable, being consistent with the information received during
our audit.
Business combination – Company and Consolidated
As detailed in Notes 2.1 and 9.1.1 to the financial statements, the
Company completed the process of acquisition of the total shares in
Upcon S.A. (“UPCON”) on September 23, 2020 and the process of
acquisition of a total of four ventures of Calçada S.A. (SPE of
Calçada) on November 16, 2020, companies that carry out operations
in the same business segments of the Company. This transaction was
recognized by using the acquisition method, which requires, among
other procedures, that the Company determines at the effective
control acquisition date, the fair value of the consideration
transferred, the fair value of assets acquired and liabilities
assumed, and the determination of goodwill or gain from bargain
purchase. Such procedures often involve a high level of judgment
and are subject to a high level of uncertainty. In view of the
related high judgment level and the impact that any change in
assumptions may have on the financial statements, we consider this
to be a key audit matter.
Performed audit procedures
Our audit procedures included, but were not limited to, reading the
documents that formalized the transaction, such as contracts and
minutes, and obtaining evidences that support the determination of
the control acquisition date and consideration transferred, and
calculation of the acquisition cost. With the support of our
corporate finance experts, we analyzed the methodology adopted for
measuring the previously held interest in acquired assets and
liabilities assumed, and evaluated whether the adopted assumptions
for projecting cash flows and making calculations were reasonable,
by comparing, when available, with market information, as well as
evaluated the sensitivity analysis regarding the main adopted
assumptions and the impacts of possible changes in such assumptions
on the measured amounts and their relevance in relation to the
financial statements as a whole.
Based on the analyzed information, we analyzed the calculation to
determine acquisition cost and goodwill, and evaluated the
appropriateness of the disclosures made by the Company.
Based on the evidences obtained through the above-summarized
procedures, we consider the balances related to the investments in
UPCON and Calçada’s SPE acceptable, and we consider that the
judgments and assumptions adopted by management to evaluate the
recoverable amount of goodwill to be reasonable, and the
disclosures are consistent with the obtained data and
information.
Other matters
Statements of Value Added
The individual and consolidated statements of value added (DVA) for
the year ended December 31, 2020, prepared under the responsibility
of the Company’s management, and presented as supplementary
information for IFRS purposes, were submitted to the audit
procedures performed together with the audit of the financial
statements of the Company. To form our opinion, we evaluated
whether these statements are reconciled with the financial
statements and accounting records, as applicable, and whether their
formats and contents follow the criteria established in the NTC TG
09 – Statement of Value Added. In our opinion, the accompanying
statements of value added were fairly prepared, in all material
respects, according to the criteria established in such Standard
and are consistent with the individual and consolidated financial
statements taken as a whole.
Other information that accompany the individual and consolidated
financial statements and the auditor’s report
The Company’s Management is responsible for such other information,
which comprise the Management Report.
Our opinion on the individual and consolidated financial statements
does not include the Management Report, and we do not express any
type of audit conclusion on such report.
In connection with the audit of the individual and consolidated
financial statements, our responsibility is to read the Management
Report, and, in doing so, consider whether such report is, in
material respects, inconsistent with the financial statements or
with the knowledge we obtained in the audit or otherwise appears to
be materially misstated If, based on the work we have performed, we
conclude that there is material misstatement in the Management
Report, we are required to report such fact. We have nothing to
report in this regard.
Management’s and governance responsibility for the individual
and consolidated financial statements
The Company’s Management is responsible for the preparation and
fair presentation of the individual and consolidated financial
statements in accordance with the accounting practices adopted in
Brazil and the International Financial Reporting Standards (IFRS),
applicable to real estate development entities in Brazil,
registered with the Brazilian Securities and Exchange Commission
(CVM), and for the internal controls that it deemed necessary to
enable the preparation of financial statements free from material
misstatement, whether due to fraud or error.
In the preparation of the individual and consolidated financial
statements, Management is responsible for assessing the Company’s
ability to continue as going concern, disclosing, when applicable,
the matters related to its going concern, and the use of this
accounting basis in the preparation of the financial statements,
unless Management intends to liquidate the Company and its
subsidiaries, or cease their operations, or do not have any
realistic alternative to avoid the discontinuance of
operations.
Those charged with governance of the Company and its subsidiaries
are those with responsibility for supervising the process of
preparation of the financial statements.
Independent auditor’s responsibilities for the audit of
financial statements
Our objectives are to obtain reasonable assurance about whether the
individual and consolidated financial statements as a whole are
free from material misstatement, whether due to fraud or error, and
to issue an auditor’s report including our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with Brazilian and International
Standards on Auditing will always detect any existing material
misstatements. Misstatements can arise from fraud or error and are
considered material if, individually or in aggregate, they could be
reasonably expected to influence the economic decisions of users
taken on the basis of such financial statements.
As part of the audit in accordance with Brazilian and International
Standards on Auditing, we exercise professional judgment and
maintain professional skepticism throughout the audit. We also:
·
Identify and
assess risks of material misstatements of the individual and
consolidated financial statements, whether due to fraud or error,
design and perform audit procedures responsive to those risks, and
obtain audit evidence that is sufficient and appropriate to provide
basis for our opinion. The risk of not detecting material
misstatement resulting from fraud is higher than for one resulting
from error, once fraud may involve collusion, forgery, intentional
omissions, misrepresentations and the override of internal
control.
·
Obtain
understanding of internal controls relevant to the audit in order
to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on
the effectiveness of the internal controls of the Company and its
subsidiaries.
·
Evaluate the
appropriateness of accounting policies used and the reasonableness
of accounting estimates and related disclosures made by
management.
·
Conclusion on
the appropriateness of management’s use of the going concern basis
of accounting, and, based on the audit evidence obtained, whether a
material uncertainty exists related to events or conditions that
may cast significant doubts on the Company’s ability to continue as
a going concern. If we conclude that a material uncertainty exists,
then we are required to draw attention in our auditor’s report to
the related disclosures in the individual and consolidated
financial statements or, if such disclosures are inadequate, to
modify our opinion. Our conclusions are based on the audit
evidences obtained up to the date of our auditor’s report. However,
future events or conditions may cause the Company to cease to
continue as a going concern.
·
Evaluate the
overall presentation, structure and content of the financial
statements, including the disclosures, and whether the individual
and consolidated financial statements represent the underlying
transactions and events in a manner that achieves fair
presentation. _ Obtain sufficient appropriate audit evidence
regarding the financial information of the entities or business
activities within the group to express an opinion on the individual
and consolidated financial statements. We are responsible for the
direction, supervision and performance of the group audit, and,
consequently, the audit opinion.
We communicate with those charged with governance regarding, among
other matters, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies
in the internal control that we identify during our audit.
We also provide to those charged with governance with a statement
that we have complied with relevant ethical requirements, including
the applicable independence requirements, and communicate with them
all relationships and other matters that may reasonably be thought
to bear on our independence and where applicable, related
safeguards.
From the matters communicated with those charged with governance,
we determine those that were of most significance in the audit of
the financial statements of the current year and are therefore the
key audit matters. We describe these matters in our auditor’s
report, unless the law or regulation precludes public disclosure
about the matter or when, in extremely rare circumstances, we
determine that a matter should not be communicated in our report
because the adverse consequences of doing so would reasonably be
expected to outweigh the public interest benefits of such
communication.
Rio de Janeiro, March 16, 2021.

Mário
Vieira Lopes |
Accountant
- CRC- RJ
060.611/O-0 |
Gafisa S.A.
Statements of financial position – Assets
Years
ended December 31, 2020 and 2019
(In
thousands of Brazilian reais)
|
|
Company |
Consolidated |
|
Notes |
2020 |
2019 |
2020 |
2019 |
|
|
|
|
|
|
Current
assets |
|
|
|
|
|
Cash and cash
equivalents |
4.1 |
469 |
810 |
29,038 |
12,435 |
Short-term
investments |
4.2 |
413,438 |
401,243 |
593,082 |
401,895 |
Trade accounts
receivable |
5 |
340,096 |
361,649 |
487,083 |
445,303 |
Properties for
sale |
6 |
319,516 |
490,419 |
1,243,841 |
786,660 |
Receivables
from related parties |
21.1 |
147,369 |
23,388 |
1,102 |
77,606 |
Prepaid
expenses |
- |
269 |
1,227 |
890 |
1,860 |
Non-current
assets held for sale |
8.1 |
3,709 |
3,709 |
7,014 |
7,014 |
Other
assets |
7 |
125,498 |
52,455 |
180,837 |
67,395 |
Total current
assets |
|
1,350,364 |
1,334,900 |
2,542,887 |
1,800,168 |
|
|
|
|
|
|
Non-current
assets |
|
|
|
|
|
Trade accounts
receivable |
5 |
182,117 |
98,368 |
217,169 |
112,135 |
Properties for
sale |
6 |
194,974 |
230,049 |
305,460 |
279,207 |
Receivables
from related parties |
21.1 |
44,972 |
33,416 |
115,502 |
33,416 |
Other
assets |
7 |
106,330 |
107,435 |
112,739 |
166,916 |
|
|
528,393 |
469,268 |
750,870 |
591,674 |
|
|
|
|
|
|
Investments in
ownership interests |
9.1 |
1,199,683 |
681,645 |
307,412 |
138,802 |
Investment
property |
9.2 |
- |
- |
119,119 |
- |
Property and
equipment |
10 |
11,919 |
12,147 |
25,181 |
14,159 |
Intangible
assets |
11 |
4,444 |
6,552 |
4,530 |
7,084 |
|
|
1,216,046 |
700,344 |
456,242 |
160,045 |
|
|
|
|
|
|
Total
non-current assets |
|
1,744,439 |
1,169,612 |
1,207,112 |
751,719 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
assets |
|
3,094,803 |
2,504,512 |
3,749,999 |
2,551,887 |
The
accompanying notes are an integral part of these financial
statements.
Gafisa S.A.
Statements of financial position – Liabilities
Years
ended December 31, 2020 and 2019
(Amounts in thousands of Brazilian reais)
|
|
Company |
Consolidated |
|
Notes |
2020 |
2019 |
2020 |
2019 |
|
|
|
|
|
Current
liabilities |
|
|
|
|
|
Loans and
financing |
12 |
291,270 |
383,647 |
332,447 |
426,124 |
Debentures |
13 |
120,399 |
158,179 |
120,737 |
158,179 |
Financial
instruments |
20 |
6,125 |
- |
6,125 |
- |
Payables for
purchase of properties and advances from customers |
17 |
65,969 |
89,825 |
336,029 |
129,353 |
Payables for
goods and service suppliers |
- |
93,392 |
79,106 |
122,576 |
95,450 |
Taxes and
contributions |
- |
57,280 |
58,556 |
86,831 |
69,868 |
Salaries,
payroll charges and profit sharing |
- |
15,472 |
11,963 |
16,983 |
12,291 |
Provisions for
legal claims and commitments |
16 |
145,636 |
139,623 |
147,066 |
140,735 |
Obligations
assumed on the assignment of receivables |
14 |
10,829 |
14,755 |
13,296 |
20,526 |
Payables to
related parties |
21.1 |
295,261 |
191,364 |
98,430 |
64,384 |
Other
payables |
15 |
124,434 |
110,189 |
186,466 |
135,492 |
Total current
liabilities |
|
1,226,067 |
1,237,207 |
1,466,986 |
1,252,402 |
|
|
|
|
|
|
Non-current
liabilities |
|
|
|
|
|
Loans and
financing |
12 |
109,523 |
107,029 |
338,027 |
107,029 |
Debentures |
13 |
18,543 |
39,346 |
143,588 |
39,346 |
Payables for
purchase of properties and advances from customers |
17 |
37,175 |
68,515 |
79,400 |
93,075 |
Deferred
income tax and social contribution |
19 |
12,114 |
12,114 |
14,649 |
12,114 |
Provisions for
legal claims and commitments |
16 |
103,003 |
123,858 |
103,417 |
123,878 |
Obligations
assumed on the assignment of receivables |
14 |
9,431 |
16,463 |
10,896 |
19,835 |
Other
payables |
15 |
16,570 |
6,272 |
34,648 |
9,065 |
Total
non-current liabilities |
|
306,359 |
373,597 |
724,625 |
404,342 |
|
|
|
|
|
|
Equity |
|
|
|
|
|
Capital |
18.1 |
1,083,249 |
2,926,280 |
1,083,249 |
2,926,280 |
Treasury
shares |
18.1 |
(2,632) |
(43,517) |
(2,632) |
(43,517) |
Reserve for
capital and granting stock options |
- |
319,569 |
337,611 |
319,569 |
337,611 |
Profit
reserve |
18.2 |
162,191 |
- |
162,191 |
- |
Retained
losses |
18.2 |
- |
(2,326,666) |
- |
(2,326,666) |
|
|
1,562,377 |
893,708 |
1,562,377 |
893,708 |
Non-controlling
interests |
|
- |
- |
(3,989) |
1,435 |
Total
equity |
|
1,562,377 |
893,708 |
1,558,388 |
895,143 |
Total
liabilities and equity |
|
3,094,803 |
2,504,512 |
3,749,999 |
2,551,887 |
|
|
|
|
|
|
The
accompanying notes are an integral part of these financial
statements.
Gafisa S.A.
Statement of profit or loss
Years
ended December 31, 2020 and 2019
(Amounts in thousands of Brazilian reais, except as otherwise
stated)
|
|
Company |
Consolidated |
|
Notes |
2020 |
2019 |
2020 |
2019 |
|
|
|
|
|
|
Continuing
operations |
|
|
|
|
|
Net operating
revenue |
22 |
412,663 |
360,589 |
884,045 |
400,465 |
|
|
|
|
|
|
Operating
costs |
|
|
|
|
|
Real estate
development and sales |
23 |
(321,733) |
(238,714) |
(702,824) |
(282,684) |
|
|
|
|
|
|
Gross
profit |
|
90,930 |
121,875 |
181,221
|
117,781 |
|
|
|
|
|
|
Operating
(expenses)/income |
|
|
|
|
|
Selling
expenses |
23 |
(11,461) |
(12,020) |
(28,992) |
(14,889) |
General and
administrative expenses |
23 |
(78,772) |
(46,954) |
(81,553) |
(54,133) |
Income from
equity method investments |
9 |
49,886 |
46,863 |
(2,339) |
(5,003) |
Depreciation
and amortization |
10 and
11 |
(6,623) |
(12,859) |
(8,278) |
(14,181) |
Derecognition
of goodwill from remeasurement of investment |
- |
- |
(161,100) |
- |
(161,100) |
Other
income/(expenses), net |
23 |
(52,474) |
79,483 |
(56,455) |
141,771 |
|
|
|
|
|
|
Profit
(loss) before finance income and costs and income tax
and social contribution |
|
(8,514)
|
15,288 |
3,604
|
10,246 |
|
|
|
|
|
|
Finance
costs |
24 |
(93,478) |
(82,920) |
(101,532) |
(76,830) |
Finance
income |
24 |
25,638 |
16,631 |
28,537 |
17,206 |
|
|
|
|
|
|
Loss before
Income tax and social contribution |
|
(76,354)
|
(51,001) |
(69,391)
|
(49,378) |
|
|
|
|
|
|
Current income
tax and social contribution |
|
(167) |
- |
(7,608) |
(1,984) |
Deferred
income tax and social contribution |
|
- |
37,259 |
- |
37,259 |
|
|
|
|
|
|
Total income
tax and social contribution |
19.i |
(167) |
37,259 |
(7,608) |
35,275 |
|
|
|
|
|
|
Net income
(loss) from continuing operations |
|
(76,521)
|
(13,742) |
(76,999)
|
(14,103) |
|
|
|
|
|
|
Net income
(loss) from discontinued operations |
|
- |
- |
- |
- |
|
|
|
|
|
|
Loss for the
year |
|
(76,521)
|
(13,742) |
(76,999)
|
(14,103) |
|
|
|
|
|
|
(-) Loss
attributable to: |
|
|
|
|
|
Non-controlling
interests |
|
- |
- |
(478) |
(361) |
Owners of the
parent |
|
(76,521) |
(13,742) |
(76,521) |
(13,742) |
|
|
|
|
|
|
Weighted
average number of shares (in thousands) |
27 |
179,882 |
68,584 |
|
|
|
|
|
|
|
|
Basic loss per
thousand shares - In reais |
27 |
(0.425) |
(0.200) |
|
|
From
continuing operations |
|
(0.425) |
(0.200) |
|
|
|
|
- |
|
|
|
|
|
|
|
|
|
Diluted loss
per thousand shares - In reais |
27 |
(0.425) |
(0.200) |
|
|
From
continuing operations |
|
(0.425) |
(0.200) |
|
|
|
|
|
|
|
|
The accompanying notes are an
integral part of these financial statements.
Gafisa S.A.
Statement of comprehensive income
Years
ended December 31, 2020 and 2019
(Amounts in thousands of Brazilian reais, except as otherwise
stated)
|
Company |
Consolidated |
|
2020 |
2019 |
2020 |
2019 |
|
|
|
|
|
Loss for the
year |
(76,521) |
(13,742) |
(76,999)
|
(14,103) |
|
|
|
|
|
Total
comprehensive income for the year, net of taxes |
(76,521)
|
(13,742) |
(76,999)
|
(14,103) |
|
|
|
|
|
Attributable
to: |
|
|
|
|
Owners of the
parent |
(76,521) |
(13,742) |
(76,521) |
(13,742) |
Non-controlling
interests |
- |
- |
(478) |
(361) |
|
|
|
|
|
The accompanying notes are an integral part of these financial
statements.
Gafisa S.A.
Statement of changes in equity
Years
ended December 31, 2020 and 2019
(Amounts in thousands of Brazilian reais)
|
|
|
Attributed to Owners
of the Parent |
|
|
|
Notes |
Capital |
Treasury
shares |
Reserve
for capital and granting shares |
Profit
reserve |
Retained
losses |
Total
Company |
Non-controlling
interests |
Total
consolidated |
Balance as of December
31, 2018 |
|
2,521,319 |
(58,950) |
337,351 |
- |
(2,308,403) |
491,317 |
1,874 |
493,191 |
|
|
|
|
|
|
|
|
|
|
Capital
increase |
18.1 |
404,961 |
- |
(157) |
- |
- |
404,804 |
- |
404,804 |
Stock option
plan |
18.3 |
- |
- |
417 |
- |
- |
417 |
- |
417 |
Treasury shares
sold |
18.1 |
- |
141 |
- |
- |
7 |
148 |
- |
148 |
Treasury shares
cancelled |
18.1 |
- |
5,747 |
- |
- |
(5,747) |
- |
- |
- |
Treasury shares
reissued |
18.1 |
- |
(20,671) |
- |
- |
20,671 |
- |
- |
- |
Share repurchase
program |
18.1 |
- |
30,216 |
- |
- |
(19,452) |
10,764 |
- |
10,764 |
Recognition of
reserves |
- |
- |
- |
- |
- |
- |
- |
(78) |
(78) |
Loss for the
year |
- |
- |
- |
- |
- |
(13,742) |
(13,742) |
(361) |
(14,103) |
|
|
|
|
|
|
|
|
|
|
Balances as of December
31, 2019 |
|
2,926,280 |
(43,517) |
337,611 |
- |
(2,326,666) |
893,708 |
1,435 |
895,143 |
|
|
|
|
|
|
|
|
|
|
Capital
reduction |
18.1 |
(2,585,032) |
- |
|
- |
2,585,032 |
- |
- |
- |
Capital
increase |
18.1 |
742,001 |
- |
- |
- |
- |
742,001 |
- |
742,001 |
Expenditures for issuing
shares |
18.1 |
- |
- |
(18,288) |
- |
- |
(18,288) |
- |
(18,288) |
Recognized granted
options |
18.1 |
- |
- |
246 |
- |
- |
246 |
- |
246 |
Stock option
plan |
18.3 |
- |
- |
- |
- |
- |
- |
- |
- |
Treasury shares
sold |
18.1 |
- |
40,885 |
- |
- |
(19,654) |
21,232 |
- |
21,232 |
Recognition of
reserves |
- |
- |
- |
- |
- |
- |
- |
(2) |
(2) |
Loss for the
year |
- |
- |
- |
- |
- |
(76,521) |
(76,521) |
(478) |
(76,999) |
Acquisition of
non-controlling interests |
- |
- |
- |
- |
- |
- |
- |
(4,945) |
(4,945) |
Retained
earnings |
|
|
|
|
162,191 |
(162,191) |
- |
- |
- |
Balance as of December
31, 2020 |
|
1,083,249 |
(2,632) |
319,569 |
162,191 |
- |
1,562,377 |
(3,989) |
1,558,388 |
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an
integral part of these financial statements.
Gafisa S.A.
Statement of cash flows
Years
ended December 31, 2020 and 2019
(Amounts in thousands of Brazilian reais)
|
Company |
Consolidated |
|
2020 |
2019 |
2020 |
2018 |
Operating
activities |
|
|
|
Profit (loss)
before Income tax and social contribution |
(76,354) |
(51,001) |
(69,393) |
(49,378) |
Expenses/(income) not
affecting cash and cash equivalents: |
|
|
|
|
Depreciation
and amortization (Notes 10 and 11) |
6,623 |
12,859 |
8,278 |
14,181 |
Stock option
plan (Note 18.3) |
(347) |
(2,366) |
(347) |
(2,366) |
Unrealized
interest and charges, net |
1,664 |
3,068 |
1,009 |
5.448 |
Warranty
provision (Note 15) |
9,208 |
(7,521) |
9,208 |
(7,521) |
Provisions for
legal claims and commitments (Note 16) |
64,302 |
9,990 |
56,148 |
8,300 |
Provision for
profit sharing (Note 25 (iii)) |
16,194 |
5,000 |
16,194 |
5,000 |
Allowance for
expected credit losses and cancelled contracts (Note 5) |
15,822 |
(61,460) |
43,343 |
(47,257) |
Provision for
realization of non-financial assets: |
|
|
|
|
Properties and
land for sale (Notes 6 and 8) |
(68,215) |
(37,394) |
(69,282) |
(36,913) |
Provision for
penalties due to delay in construction work (Note 15) |
(793) |
3,659 |
2,137 |
5,283 |
Income from
equity method investments (Note 9) |
(49,886) |
(46,863) |
2,340 |
5,003 |
Derecognition
of goodwill based on inventory surplus (Note 6 and 9) |
- |
3,000 |
- |
- |
Derecognition
of goodwill from remeasurement of investment in associate (Note
9) |
- |
161,100 |
- |
161,100 |
Acquisition of
subsidiary (Note 9) |
- |
(43,954) |
- |
- |
Goodwill based
on inventory surplus and gain from bargain purchase (Note
9) |
- |
(39,886) |
- |
- |
Assignment of
investment shares (Note 9) |
- |
27,843 |
- |
2,759 |
|
- |
|
|
|
Decrease/(increase) in
operating assets |
|
|
|
|
Trade accounts
receivable |
(88,976) |
134,996 |
(206,326) |
115,003 |
Properties for
sale and land for sale |
274,193 |
232,986 |
(414,152) |
131,581 |
Other
assets |
(185,783) |
(36,498) |
(151,536) |
(98,544) |
Prepaid
expenses |
958 |
956 |
970 |
808 |
|
|
|
|
|
Increase/(decrease) in
operating liabilities |
|
|
|
|
Payables for
purchase of properties and advances from customers |
(55,196) |
(75,759) |
193,001 |
(87,003) |
Taxes and
contributions |
(1,277) |
12,888 |
16,963 |
12,592 |
Payables for
goods and service suppliers |
14,095 |
(48,714) |
27,559 |
(37,750) |
Salaries,
payroll charges and profit sharing |
(12,651) |
835 |
(11,468) |
511 |
Other
payables |
(71,016) |
(87,818) |
51,061 |
(76,443) |
Transactions
with related parties |
26,149 |
(56,408) |
49,006 |
21,608 |
Paid
taxes |
(167) |
- |
(7,608) |
(1,983) |
Cash and cash
equivalents from (used in) operating activities |
(181,453) |
13,538 |
(452,895) |
44,019 |
|
|
|
|
|
Investing
activities |
|
|
|
|
Acquisition of
property and equipment and intangible assets (Notes 10 and
11) |
(4,287) |
(3,275) |
(16,746) |
(3,581) |
Increase in
short-term investments |
(500,350) |
(360,294) |
(564,749) |
(387,319) |
Redemption of
short-term investments |
488,155 |
61,878 |
373,562 |
90,280 |
Investments |
(30,000) |
- |
(30,000) |
- |
Cash (used in)
from investing activities |
(46,482) |
(301,691) |
(237,933) |
(300,620) |
|
|
|
|
|
Financing
activities |
|
|
|
|
Increase in
loans, financing and debentures |
98,036 |
113,839 |
625,677 |
122,639 |
Payment of
loans, financing and debentures - principal |
(213,524) |
(200,937) |
(382,666) |
(229,846) |
Payment of
loans, financing and debentures - interest |
(28,517) |
(54,033) |
(33,774) |
(56,976) |
Loan
transactions with related parties |
(125,552) |
(11,179) |
(12,604) |
(11,179) |
Treasury
shares repurchase program (Note 18.1) |
19,251 |
7,132 |
19,251 |
7,132 |
Capital
increase |
477,900 |
404,962 |
477,900 |
404,962 |
Cash and cash
equivalents from (used in) financing activities |
227,594 |
259,784 |
693,784 |
236,732 |
|
|
|
|
|
Cash acquired
from Upcon and Calçada |
- |
- |
13,647 |
- |
Net
increase/(decrease) in cash and cash equivalents |
(341) |
(28,369) |
16,603 |
(19,869) |
|
|
|
|
|
Cash and cash
equivalents |
|
|
|
|
At the
beginning of the year |
810 |
29,179 |
12,435 |
32,304 |
At the end of
the year |
469 |
810 |
29,038 |
12,435 |
|
|
|
|
|
Net
increase/(decrease) in cash and cash equivalents |
(341) |
(28,369) |
16,603 |
(19,869) |
The accompanying notes are an
integral part of these financial statements.
Gafisa S.A.
Statement of value added
Years
ended December 31, 2020 and 2019
(Amounts in thousands of Brazilian reais)
|
Company |
Consolidated |
|
|
|
|
|
|
2020 |
2019 |
2020 |
2019 |
|
|
|
|
|
|
|
|
|
|
Revenues |
451,706 |
394,252 |
935,013 |
437,289 |
Real estate
development and sales |
467,528 |
332,792 |
978,360 |
390,032 |
Reversal
(recognition) of allowance for doubtful accounts and cancelled
contracts |
(15,822) |
61,460 |
(43,347) |
47,257 |
Inputs acquired from
third parties (including taxes on purchases) |
(353,164) |
(314,103) |
(737,722) |
(294,610) |
Operating
costs - Real estate development and sales |
(259,538) |
(208,823) |
(623,106) |
(244,409) |
Materials,
energy, outsourced labor and other |
(93,626) |
39,228 |
(114,616) |
94,307 |
Gain from
bargain purchase |
- |
16,592 |
- |
16,592 |
Derecognition of
goodwill from remeasurement of investment |
- |
(161,100) |
- |
(161,100) |
|
|
|
|
|
Gross value
added |
98,542 |
80,149 |
197,291 |
142,679 |
|
|
|
|
|
Depreciation and
amortization |
(6,623) |
(12,859) |
(8,278) |
(14,181) |
|
|
|
|
|
Net value added produced
by the entity |
91,919 |
67,290 |
189,013 |
128,498 |
|
|
|
|
|
Value added received on
transfer |
75,524 |
63,494 |
26,198 |
12,203 |
Income from
equity method investments |
49,886 |
46,863 |
(2,339) |
(5,003) |
Finance
income |
25,638 |
16,631 |
28,537 |
17,206 |
|
|
|
|
|
Total value added to be
distributed |
167,443 |
130,784 |
215,211 |
140,701 |
|
|
|
|
|
Value added
distribution |
167,443 |
130,784 |
215,211 |
140,701 |
Personnel and payroll
charges |
37,316 |
26,851 |
39,652 |
28,429 |
Taxes and
contributions |
47,417 |
1,647 |
67,271 |
7,106 |
Interest and
rents |
159,231 |
116,028 |
184,809 |
118,908 |
Retained earnings
attributable to non-controlling interests |
- |
- |
478 |
361 |
Incurred
losses |
(76,521) |
(13,742) |
(76,999) |
(14,103) |
The accompanying notes are an
integral part of these financial statements.
Gafisa S.A.
Notes to the financial
statements--Continued
December 31, 2020
(Amounts in thousands of
Brazilian Reais, except as otherwise stated)
|
|
Gafisa S.A. ("Gafisa" or "Company") is a publicly-traded company
with registered office at Presidente Juscelino Kubitschek, 1.830,
conjunto comercial 32, 3o andar, Bloco 2, in the city
and state of São Paulo, Brazil, and began its operations in 1997
with the objectives of: (i) promoting and managing all forms of
real estate ventures on its own behalf or for third parties (in the
latter case, as construction company or proxy); (ii) selling and
purchasing real estate properties; (iii) providing civil
construction and civil engineering services; (iv) developing and
implementing marketing strategies related to its own and third
party real estate ventures; and (v) investing in other companies
who share similar objectives.
The Company enters into real estate development projects with third
parties through special purpose entities (SPEs) or through the
formation of consortia and condominiums. Subsidiaries significantly
share the managerial and operating structures, and corporate,
managerial and operating costs with the Company. The SPEs,
condominiums and consortia operate solely in the real estate
industry and are linked to specific ventures.
The Company has stocks traded on B3 S.A. – Brasil, Bolsa, Balcão
(former BM&FBovespa), reporting its information to the
Brazilian Securities and Exchange Commission (CVM) and the U.S.
Securities and Exchange Commission (SEC). The ADSs were delisted on
the NYSE on December 17, 2018, and are currently traded Over the
Counter (OTC).
|
1.1 |
Coronavirus –
COVID-19 |
In the year 2020, there has not been any significant impact from
the outbreak of Coronavirus on the Company’s operations. A Crisis
Management Committee has been created that holds daily meetings and
total availability for discussing and taking important disease
prevention measures.
Awareness campaigns to promote actions that mitigate transmission
(frequent hygiene, distancing, meeting through virtual platforms,
exclusive service channel, among others) have been created. We have
implemented a series of educative and preventative measures
targeted at our construction site employees, reducing the staff
considered to be in the risk group. The sales activities have
focused on digital interactions with prospective customers.
The Company will keep following the implementation of the necessary
actions with the Government Authorities, Ministry of Health, and
trade associations.
Until the disclosure date of these financial statements, the
Company has not noted a significant increase in customer default
and contract cancellation or reduction in sales volume. Moreover,
the construction of ventures has been according to the original
schedule, considered essential service by the federal
government.
Also, due to the Covid-19 pandemic, the Company has postponed the
launches planned for the second quarter to the second half of this
year.
The Company has opted for deferring the payment of the federal
taxes related to March, April and May 2020, collected later on,
pursuant to Ordinances 139, 150 and 245. Under the terms of
Provisional Measure 927, of March 22, 2020, the Company has also
opted for deferring the FGTS deposits by employers, related to
March, April and May 2020, with collection in six monthly
installments from July 2020. Pursuant to Provisional Measure 936,
of March 31, 2020, converted into Law 14,020 of 2020, the Company
has reduced salaries by 25%, with proportional reduction in working
hours, of a certain group of employees over a 90-day period.
Additionally, there has been a voluntary 50% reduction in the fees
of the Board of Director’s members over a 180-day period.
Moreover, a volatility in the Company’s stock price traded on the
stock exchange has been noted as a result of the global concern for
this pandemic and its developments.
Gafisa S.A.
Notes to the financial
statements--Continued
December 31, 2020
(Amounts in thousands of
Brazilian Reais, except as otherwise stated)
|
|
|
1.1 |
Coronavirus –
COVID-19 |
Management understands that at present, the projections used in the
analysis of realization of its assets shall not suffer significant
changes in the face of this event, and keeps the adopted
assumptions.
In the year 2020, the Company created a new business unit, which
will comprise real estate assets aimed to generate income, aimed to
carry out management services of own and third-party real estate.
Gafisa Propriedades (former Upcon S.A) borns with Gafisa’s assets
that currently exist and others that are in development (Note 9.2)
and with acquisitions of assets in unique locations and/or
opportunities for operational turnaround. It is worthy of note the
acquisitions made in the first quarter of 2021 of Hotel Fasano
Itaim in the city of São Paulo, currently under construction, of
Jardim Guadalupe Shopping and São Conrado Fashion Mall (pending
closing), both in the city of Rio de Janeiro, and the entry in the
venture Cidade Matarazzo in São Paulo, as mentioned below and in
Note 31(ii).
On January 13, 2021, the Company completed the acquisition of 32
studio apartments and Hotel Fasano Itaim through the investment
funds it controls. The transaction totaled R$ 310,000, with the
interest of Gafisa Propriedades reaching 80.37% in Hotel Fasano
Itaim and 100% in studio apartments.
Also in January 2021, Gafisa Propriedades completed the acquisition
of Jardim Guadalupe Shopping and signed the agreement for the
acquisition of São Conrado Fashion Mall. The transaction totals R$
99,300, in two tranches, the first in January 2021, and the other
in January 2022. The acquisition is being made through Equity
Fund.
On March 8, 2021, the Company informed that Gafisa Propriedades
entered into a contract for entering in Cidade Matarazzo, related
to the acquisition of private suites with hotel services.
On November 16, 2020, the Company completed the acquisition of four
ventures of Calçada S.A. (Note 9.1.1), marking the return of Gafisa
to Rio de Janeiro’s real estate development market. “Gafisa Rio”
becomes the Company’s base for operating in the segment with local
office, and performing an active role on the acquisition of new
land and launches in progress.
|
2. |
Presentation of financial
statements and summary of significant accounting
policies |
|
2.1. |
Basis of presentation and
preparation of individual and consolidated financial
statements |
On March 16, 2021, the Company’s Board of Directors approved these
individual and consolidated financial statements of the Company and
authorized their disclosure.
The individual financial statements, identified as “Company”, have
been prepared and are being presented according to the accounting
practices adopted in Brazil, including the pronouncements issued by
the Accounting Pronouncements Committee (CPC), approved by the
Brazilian Securities and Exchange Commission (CVM) and are
disclosed together with the consolidated financial statements.
The consolidated financial statements of the Company have been
prepared and are being presented according to the accounting
practices adopted in Brazil, including the pronouncements issued by
the CPC, approved by the Brazilian Securities and Exchange
Commission (CVM), and according to the International Financial
Reporting Standards (IFRS) issued by the International Accounting
Standards Board (IASB).
Gafisa S.A.
Notes to the financial
statements--Continued
December 31, 2020
(Amounts in thousands of
Brazilian Reais, except as otherwise stated)
|
|
|
2. |
Presentation of financial statements and
summary of significant accounting policies—Continued |
|
2.1. |
Basis of presentation and
preparation of individual and consolidated financial
statements--Continued |
The individual financial statements of the Company are not
considered in compliance with the International Financial Reporting
Standards (IFRS), once they consider the capitalization of interest
on qualifying assets of investees in the financial statements of
the Company. In view of the fact that there is no difference
between the Company’s and the consolidated equity and profit or
loss, the Company opted for presenting such individual and
consolidated information in only one set.
The consolidated financial statements are specifically in
compliance with the International Financial Reporting Standards
(IFRS) applicable to real estate development entities in Brazil,
registered with the CVM. The aspects related to the transfer of
control in the sale of real estate units follow the understanding
of the Company’s Management, aligned with that expressed by the CVM
in Circular Letter/CVM/SNC/SEP 02/2018 about the application of
Technical Pronouncement CPC 47 – Revenue from contracts with
customers (IFRS 15).
All material information characteristic of the financial
statements, and only it, is being evidenced, and corresponds to
those used by Management in its administration.
The presentation of the individual and consolidated Statement of
Value Added (DVA) is required by the Brazilian corporate
legislation and the accounting practices adopted in Brazil
applicable to publicly-held companies and was prepared according to
CVM Resolution 557, of November 12, 2008, which approved the
accounting pronouncement CPC 09 – Statement of Value Added. The
IFRS does not require the presentation of this statement.
Consequently, under the IFRS, this statement is presented as
additional information, without causing harm to the financial
statements as a whole.
The financial statements have been prepared on a going concern
basis. Management makes an assessment of the Company’s ability to
continue as going concern when preparing the financial
statements.
The individual and consolidated financial statements have been
prepared based on historical cost, except for those measured at
fair value, when indicated.
All amounts reported in the accompanying financial statements are
in thousands of Reais, except as otherwise stated.
|
2.1.1. |
Consolidated financial
statements |
The consolidated financial statements of the Company include the
financial statements of Gafisa and its direct and indirect
subsidiaries. The Company controls an entity when it is exposed or
is entitled to variable returns arising from its involvement with
the entity and has the ability to affect those returns through the
power that it exerts over the entity. The existence and the
potential effects of voting rights, which are currently exercisable
or convertible, are taken into account when evaluating whether the
Company controls other entity. The subsidiaries are fully
consolidated from the date the control is transferred and the
consolidation is discontinued from the date control
ceases.
Gafisa S.A.
Notes to the financial
statements--Continued
December 31, 2020
(Amounts in thousands of
Brazilian Reais, except as otherwise stated)
|
|
|
2. |
Presentation of financial
statements and summary of significant accounting
policies--Continued |
|
2.2. |
Summary of significant accounting
policies |
|
2.1.1. |
Consolidated financial
statements--Continued |
In the Company’s individual financial statements, the financial
statements of direct and indirect subsidiaries are recognized using
the equity method.
The accounting practices were uniformly adopted in all subsidiaries
included in the consolidated financial statements, and the fiscal
year of these companies is the same of the Company. See further
details in Note 9.
|
2.1.2. |
Functional and presentation
currency |
The functional and presentation currency of the Company is the
Brazilian real, mainly because of its revenues and the incurred
costs of operations.
|
2.2.1. |
Accounting judgments, estimates and
assumptions |
Accounting estimates and judgments are evaluated on an ongoing
basis based on historical experience and other factors, including
expectations on future events, considered reasonable under the
circumstances.
The preparation of the individual and consolidated financial
statements of the Company requires Management to make judgments,
estimates and assumptions that affect the reported amounts of
revenue, expenses, assets and liabilities, as well as the
disclosure of contingent liabilities, at the reporting date of
financial statements.
Assets and liabilities subject to estimates and assumptions include
the provision for impairment of asset, transactions with
share-based payment, provision for legal claims, fair value of
financial instruments, measurement of the estimated cost of
ventures, deferred tax assets, among others.
The main assumptions related to sources of uncertainty over future
estimates and other important sources of uncertainty over estimates
at the reporting date of the statement of financial position, which
may result in different amounts upon settlement are discussed
below:
|
a) |
Impairment loss
of non-financial assets |
An impairment loss exists when the asset’s carrying amount exceeds
its recoverable amount, which is the higher of an asset’s fair
value less costs to sell and its value in use. The calculation of
the fair value less cost to sell is based on available information
on sale transactions of similar assets or market prices less
additional costs of disposal. The calculation of the value in use
is based on the discounted cash flow model.
Cash flows are derived from the budget for the following five
years, and do not include uncommitted restructuring activities or
future significant investments that will improve the asset basis of
the cash-generating unit being tested. The recoverable amount is
sensitive to the discount rate used under the discounted cash flow
method, the estimated future cash inflows, and to the growth rate
used for purposes of extrapolation.
Indefinite lived intangible assets and goodwill attributable to
future economic benefit are tested at least annually, and/or when
circumstances indicate a decrease in the carrying amount. The main
assumptions used for determining the recoverable amount of
cash-generating units are detailed in Note 9.
Gafisa S.A.
Notes to the financial
statements--Continued
December 31, 2020
(Amounts in thousands of
Brazilian Reais, except as otherwise stated)
|
|
|
2. |
Presentation of financial
statements and summary of significant accounting
policies--Continued |
|
2.2. |
Summary of significant accounting
policies--Continued |
|
2.2.1. |
Accounting judgments, estimates and
assumptions--Continued |
b) Share-based payment transactions
The Company measures the cost of transactions with employees to be
settled with shares based on the fair value of equity instruments
on the grant date. For cash-settled share-based transactions, the
liability is required to be remeasured at the end of each reporting
period through the settlement date, recognizing in profit or loss
possible changes in fair value, which requires revaluation of the
estimates used at the end of each reporting period. The estimate of
the fair value of share-based payments requires the determination
of the most adequate pricing model to grant equity instruments,
which depends on the grant terms and conditions.
It also requires the determination of the most adequate data for
the pricing model, including the expected option life, volatility
and dividend income, and the corresponding assumptions. The
assumptions and models used for estimating the fair value of
share-based payments are disclosed in Note 18.3.
|
c) |
Provision for legal
claims |
The Company is party to many lawsuits and administrative
proceedings and recognizes a provision for tax, labor and civil
claims (Note 16). Provisions are recognized for all claims related
to lawsuits which likelihoods of losses are considered probable.
Provisions are reviewed and adjusted to take into account the
changes in circumstances, such as applicable statutes of
limitations, findings of tax inspections, or additional exposures
found based on new court issues or decisions.
Contingent liabilities for which losses are considered possible are
only disclosed in a note to financial statements, and those for
which losses are considered remote are neither accrued nor
disclosed.
Contingent assets are recognized only when there are secured
guarantees or final and unappealable favorable court decisions.
Contingent assets with probable favorable decision are only
disclosed in explanatory note.
There are uncertainties inherent in the interpretation of complex
tax rules and in the value and timing of future taxable income. In
the ordinary course of business, the Company and its subsidiaries
are subject to assessments, audits, legal claims and administrative
proceedings in civil, tax and labor matters.
Gafisa S.A.
Notes to the financial
statements--Continued
December 31, 2020
(Amounts in thousands of
Brazilian Reais, except as otherwise stated)
|
|
|
2. |
Presentation of financial
statements and summary of significant accounting
policies--Continued |
|
2.2. |
Summary of significant accounting
policies—Continued |
|
2.2.1. |
Accounting judgments, estimates and
assumptions– Continued |
|
d) |
Allowance for expected credit
losses |
The Company makes an in-depth analysis of the contracts with
customers outstanding for recognizing the allowance for expected
credit losses for all sale contracts of real estate units, and the
amounts are accrued as contra-entry to the recognition of the
respective development revenue, based on data history of its
current operations and estimates. This allowance is calculated
based on the percentage of completion of the construction work, the
methodology used for recognizing profit or loss (Note 2.2.2). Such
analysis is individually made by sale contract, in line with CPC 48
– Financial Instruments, item 5.5.17 (c).
The Company annually reviews its assumptions for recognizing the
loss allowance, in the face of the review of the history of its
current operations and improvement in its estimates.
The Company and its subsidiaries record a provision to cover
expenditures for repairing construction defects covered during the
warranty period, based on the estimate that considers the history
of incurred expenditures adjusted by the future expectation, which
is regularly reviewed, except for the subsidiaries that operate
with third-party companies, which are the own guarantors of the
provided construction services. The warranty term provided is five
years from the delivery of the venture.
|
f) |
Estimated cost of
construction |
Estimated costs, mainly comprising the incurred and estimated costs
for completing the construction works, are regularly reviewed,
based on the progress of construction, and any resulting
adjustments are recognized in profit or loss of the Company. The
effects of such estimate reviews affect profit or loss.
|
g) |
Realization of deferred
income tax |
The initial recognition and further analysis of the realization of
a deferred income tax is carried out when it is probable that a
taxable profit will be available in subsequent years to offset the
deferred tax asset, based on projections of results, and supported
by internal assumptions and future economic scenarios that enable
its total or partial use.
|
h) |
Allowance for contract
cancellation |
The Company recognizes an allowance for contract cancellation when
it identifies risks of cash inflows. Contracts are monitored to
identify the moment when these conditions are mitigated. While it
does not occur, no revenue or cost is recognized in profit or loss,
the amounts only being recorded in asset and liability
accounts.
The other provisions recognized in the Company are described in
Note 2.2.22.
Gafisa S.A.
Notes to the financial
statements--Continued
December 31, 2020
(Amounts in thousands of
Brazilian Reais, except as otherwise stated)
|
|
|
2. |
Presentation of financial
statements and summary of significant accounting
policies—Continued |
|
2.2. |
Summary of significant accounting
policies—Continued |
|
2.2.2. |
Recognition of revenues and
expenses |
The Company applied CPC 47 – Revenue from Contracts with Customers
from January 1, 2018, including the guidance contained in Circular
Letter CVM/SNC/SEP 02/2018, of December 12, 2018, which establishes
the accounting procedures for recognition, measurement and
disclosure of certain types of transactions arising from contracts
for purchase and sale of real estate unit not yet completed in real
estate development entities.
According to CPC 47, the recognition of revenue from contracts with
customers started to have a new regulation, based on transfer of
control over promised goods or service, which can be at a point in
time or over time, according to the satisfaction or not of the
“contractual performance obligations”. Revenue is measured in an
amount that reflects the consideration the entity expects to be
entitled and is based on a five-step model detailed as follows: 1)
identification of contract; 2) identification of performance
obligations; 3) determination of transaction price; 4) allocation
of transaction price to performance obligations; 5) revenue
recognition.
The Company records the accounting effects of contracts only when:
(i) the parties approve the contract; (ii) it can identify each
party’s rights and the established payment terms; (iii) the
contract has commercial substance; and (iv) is probable that it
will collect the consideration to which the Company is
entitled.
|
(i) |
Real estate development and
sales |
(a)
For the
sales of completed units, revenues are recognized when the sale is
completed with transfer of control, regardless of the timing of
receipt of the contractual value.
(b)
For the
pre-sale of completed units during construction phase:
|
· |
The incurred cost
(including cost of land, and other directly related expenditure for
making inventory) that corresponds to the units sold is included in
profit or loss. For the units not yet sold, the incurred cost is
included in inventory (Note 2.2.7); |
|
· |
Sales revenues are
recognized in profit or loss to the extent construction progresses,
once the transfer of control is performed continually, using the
percentage-of-completion method for each venture, this percentage
being measured in view of the incurred cost in relation to the
total estimated cost of the respective ventures; |
|
· |
Sales revenues
recognized in excess of actual payments received from customers is
recorded as either a current asset or long-term receivables in
“Trade accounts receivable”. Any payment received in connection
with the sales of units that exceeds the amount of revenues
recognized is recorded as “Payables for purchase of land and
advances from customers"; |
Gafisa S.A.
Notes to the financial
statements--Continued
December 31, 2020
(Amounts in thousands of
Brazilian Reais, except as otherwise stated)
|
|
|
2. |
Presentation of financial
statements and summary of significant accounting
policies—Continued |
|
2.2. |
Summary of significant accounting
policies--Continued |
|
2.2.2. |
Recognition of revenues and
expenses--Continued |
|
(i) |
Real estate development and
sales |
|
· |
Interest and
inflation-indexation charges on accounts receivable, as well as the
adjustment to present value of account receivable, are included in
the real estate development and sales when incurred, on a pro rata
basis using the accrual basis of accounting; |
|
· |
Financial charges on
accounts payable for acquisition of land and those directly
associated with the financing of construction are capitalized and
recorded in the inventory of properties for sale, and included in
the incurred cost of units under construction until their
completion, and follow the same recognition criteria as the cost of
real estate development for units sold while under
construction; |
|
· |
The taxes levied and
deferred on the difference between real estate development revenues
and the cumulative revenue subject to tax are calculated and
recognized when this difference in revenues is
recognized; |
|
· |
Other expenses,
including advertising and publicity, are recognized in profit or
loss when incurred. |
|
(ii) |
Construction services |
Revenues from real estate services are recognized as services are
rendered and tied to the construction management activities for
third parties and technical advisory services.
|
(iii) |
Barter transactions |
Barter transactions have the objective of receiving land from third
parties that are settled with the delivery of real estate units or
transfer of portions of the revenue from the sale of real estate
units of ventures. The land acquired by the Company and its
subsidiaries is determined based on fair value, as a component of
inventories, with a corresponding entry to advances from customers
in liabilities. Revenues and costs incurred from barter
transactions are included in profit or loss over the course of
construction period of ventures, as previously described in item
(i)(b).
|
2.2.3. |
Financial instruments |
Financial instruments are recognized from the date the Company
becomes a party to the contractual provisions of financial
instruments, and mainly comprise cash and cash equivalents,
short-term investments, accounts receivable, loans and financing,
suppliers, and other debts.
After initial recognition, financial instruments are measured as
described below:
Gafisa S.A.
Notes to the financial
statements--Continued
December 31, 2020
(Amounts in thousands of
Brazilian Reais, except as otherwise stated)
|
|
|
2. |
Presentation of financial
statements and summary of significant accounting
policies--Continued |
|
2.2. |
Summary of significant accounting
policies--Continued |
|
2.2.3. |
Financial
instruments--Continued |
|
(i) |
Financial instruments at fair value
through profit or loss |
A financial instrument is classified into fair value through profit
or loss if it is held for trading, or designated as such at initial
recognition.
Financial instruments are designated at fair value through profit
or loss if the Company manages these investments and makes purchase
and sale decisions based on their fair value in accordance with the
investment strategy and risk management. After initial recognition,
related transaction costs are recognized in profit or loss when
incurred.
Financial instruments at fair value through profit or loss are
measured at fair value, and their fluctuations are recognized in
profit or loss.
In the year ended December 31, 2020, the Company entered into
derivative financial instruments to mitigate the risk arising from
its exposure to index and interest volatility recognized at fair
value in profit or loss for the year. In accordance with its
treasury policies, the Company had derivative contracts to hedge
the interest rate fluctuation, maturing in February 2021.
The Company does not adopt the hedge accounting practice.
Financial assets are classified
into financial assets at fair value through profit or loss,
amortized cost and fair value through comprehensive income. The
Company determines the classification of its financial assets at
their initial recognition, when it becomes a party to the
contractual provisions of the instrument, based on the business
model in which the asset is managed and its contractual cash flow
characteristics.
Financial assets are initially
recognized at fair value, plus, in the case of investments not
designated at fair value through profit or loss, the transaction
costs that are directly attributable to their
acquisition.
The financial assets of the
Company include cash and cash equivalents, short-term investments,
trade accounts receivable, and derivative financial
instruments.
Derecognition
(write-off)
A financial asset (or, as the
case may be, a portion of a financial asset or portion of a group
of similar financial assets) is derecognized when:
|
· |
The
rights to receive cash inflows of an asset expire; |
|
· |
The
Company transfers its rights to receive cash inflows of an asset or
assume an obligation to fully pay the cash inflows received,
without significant delay, to a third party because of a “transfer”
agreement; and (a) the Company substantially transfers the risks
and rewards of the asset, or (b) the Company does not substantially
transfer or retain all risks and rewards related to the asset, but
transfers the control over the asset. |
Gafisa S.A.
Notes to the financial
statements--Continued
December 31, 2020
(Amounts in thousands of
Brazilian Reais, except as otherwise stated)
|
|
|
2. |
Presentation of financial
statements and summary of significant accounting
policies--Continued |
|
2.2. |
Summary of significant accounting
policies--Continued |
|
2.2.3. |
Financial
instruments--Continued |
|
(ii) |
Financial
assets--Continued |
Derecognition
(write-off)
When the Company has transferred
its rights to receive cash inflows of an asset, or signed an
agreement to transfer it, and has not substantially transferred or
has retained all risks and rewards related to the asset, an asset
is recognized to the extent of the continuous involvement of the
Company with the asset. In this case, the Company also recognizes a
related liability. The transferred asset and related liability are
measured based on the rights and obligations that the Company has
maintained.
The continuous involvement by
means of a guarantee on the transferred asset is measured at the
lower of the original carrying amount of the asset and the highest
consideration that may be required from the Company.
Impairment of financial
assets
Financial assets, except for
those designated at fair value through profit or loss, are tested
for indication of impairment at the end of each reporting period.
The impairment losses are recognized if, and only if, there is
objective evidence of impairment of the financial asset as a result
of one or more events that have occurred after its initial
recognition, with impact on the estimated future cash flows of such
asset.
For financial assets recorded at
cost, the impairment loss corresponds to the difference between the
asset’s carrying amount and the present value of the estimated
future cash flows, discounted at the current return rate of a
similar asset. This impairment loss will not be reversed in
subsequent periods.
The carrying amount of the
financial asset is directly reduced by the impairment loss for all
financial assets, except for accounts receivable, in which the
carrying amount is reduced by allowance. Subsequent recoveries of
previously derecognized amounts are credited to the allowance. The
changes in the carrying amount of the allowance are recognized in
profit or loss.
|
(iii) |
Financial liabilities |
Financial liabilities are
classified at initial recognition at amortized cost or measured at
fair value through profit or loss.
Financial liabilities at fair
value through profit or loss include financial liabilities for
trading and financial liabilities designated at initial recognition
as fair value through profit or loss.
Loans and
financing
Subsequent to initial
recognition, loans and financing accruing interest are measured at
amortized cost, using the effective interest rate method. Gains and
losses are recognized in statement of profit or loss, at the time
liabilities are derecognized, as well as during the amortization
process using the effective interest rate method.
Gafisa S.A.
Notes to the financial
statements--Continued
December 31, 2020
(Amounts in thousands of
Brazilian Reais, except as otherwise stated)
|
|
|
2. |
Presentation of financial
statements and summary of significant accounting
policies--Continued |
|
2.2. |
Summary of significant accounting
policies--Continued |
|
2.2.3. |
Financial
instruments--Continued |
|
(iii) |
Financial
liabilities--Continued |
A debt security convertible into
the Company’s common shares is presented separately in the
statement of financial position between the liability and equity
components. The issuer’s obligation to make payments of interest
and principal is a liability that exists while the instrument is
not converted and the equity instrument is an embedded option to
convert the liability into the issuer’s shares.
Derecognition
(write-off)
A financial liability is
derecognized when its contractual obligations are discharged,
cancelled or expire. When an existing financial liability is
substituted for another from the same creditor, under substantially
different terms, or when the terms of an existing liability are
significantly modified, this substitution or modification is
treated as a derecognition of the original liability and
recognition of a new liability, the difference in the corresponding
carrying amounts being recognized in profit or loss.
|
2.2.4. |
Cash and cash equivalents and short-term
investments |
Cash and cash equivalents substantially comprise demand deposits
and bank certificates of deposit held under resale agreements,
denominated in Reais, with high market liquidity and contractual
maturities of 90 days or less, and for which there are no penalties
or other restrictions for the immediate redemption thereof.
Cash equivalents are classified as financial assets at fair value
through profit or loss and are recorded at the original amounts
plus income earned, calculated on a “pro rata basis", which are
equivalent to their market values, not having any impact to be
accounted for in the Company’s equity.
Short-term investments include bank deposit certificates, federal
government bonds, exclusive investment funds that are fully
consolidated, and collaterals, which are classified at fair value
through profit or loss (Note 4.2).
|
2.2.5. |
Trade accounts receivable |
These are presented at present and realizable values. The
classification between current and non-current is made based on the
expected maturity of contract installments, considering current
those falling due in one year or less.
The installments due are indexed based on the National Civil
Construction Index (INCC) during the period of construction, and
based on the General Market Price Index (IGP-M) and interest at 12%
p.a., after the delivery of the units.
The adjustment to present value is calculated between the contract
signature date and the estimated date to transfer the completed
property’ keys to the buyer, using a discount rate represented by
the average rate of the financing obtained by the Company, net of
inflation, as mentioned in Note 2.2.19.
Considering that financing its customers is an important part of
the Company operations, the reversal of the present value
adjustment was carried out as contra-entry to the group of real
estate development revenue, consistently with interest incurred on
the portion of receivables balance related to the period subsequent
to the handover of keys.
Gafisa S.A.
Notes to the financial
statements--Continued
December 31, 2020
(Amounts in thousands of
Brazilian Reais, except as otherwise stated)
|
|
|
2. |
Presentation of financial
statements and summary of significant accounting
policies--Continued |
|
2.2. |
Summary of significant accounting
policies--Continued |
|
2.2.6. |
Housing Loan Certificate
(CCI) |
The Company and its subsidiaries carry out the assignment and/or
securitization of receivables related to receivables with
collateral of completed projects and those still under
construction. This securitization is carried out through the
issuance of the Housing Loan Certificate (“Cédula de Crédito
Imobiliário” or CCI), which is assigned to financial institutions.
When there is no right of recourse, this assignment is recorded as
reduction of accounts receivable. When there is right of recourse
against the Company, the assigned receivable is maintained in the
statement of financial position and the funds from assignment are
classified into the account “Obligations assumed on assignment of
receivable”, until certificates are settled by customers.
In this situation, the transaction cost is recorded in “finance
costs” in the statement of profit or loss for the year in which the
transaction is made.
|
2.2.7. |
Properties for sale |
The Company and its subsidiaries acquire land for future real
estate developments, on payment conditions in current currency or
through barter transactions. Land acquired through barter
transaction is stated at fair value of the units to be delivered,
and the revenue and cost are recognized according to the criteria
described in Note 2.2.2 (iii).
Properties are stated at construction cost, and decreased by
provision when it exceeds its net realizable value. In the case of
real estate under construction, the portion in inventories
corresponds to the cost incurred for units that have not yet been
sold. The incurred cost comprises construction costs (materials,
own or outsourced labor, and other related items), and legal
expenses relating to the acquisition of land and projects, land
costs, and financial charges on the venture incurred over the
construction period.
The classification of land between current and non-current assets
is made by Management based on the expected period for launching
real estate ventures. Management periodically revises the estimates
of real estate ventures launches.
These are recognized in profit or loss as incurred using the
accrual basis of accounting.
|
2.2.9. |
Land available for sale |
Land available for sale is measured at the lower of the carrying
amount and the fair value less costs to sell, and is classified as
held for sale if its carrying amount is to be recovered through a
sale transaction of the land. This condition is considered
fulfilled only when the sale is highly probable, and the asset is
available for immediate sale under its current condition.
Management shall commit to sell it within one year of the
classification date.
Gafisa S.A.
Notes to the financial
statements--Continued
December 31, 2020
(Amounts in thousands of
Brazilian Reais, except as otherwise stated)
|
|
|
2. |
Presentation of financial
statements and summary of significant accounting
policies--Continued |
|
2.2. |
Summary of significant accounting
policies--Continued |
|
2.2.10. |
Investments in ownership
interests |
Investments in ownership interest are recorded in the Company
balance using the equity method.
When the Company's equity in the losses of investees is equal to or
higher than the amount invested, the Company recognizes the
residual portion in net capital deficiency since it assumes
obligations and makes payments on behalf of these companies. For
this purpose, the Company recognizes a provision at an amount
considered appropriate to meet the obligations of the investee
(Note 9).
|
2.2.11. |
Property and equipment |
Items of property and equipment are measured at cost, less
accumulated depreciation and/or any accumulated impairment losses,
if applicable.
An item of property and equipment is derecognized upon disposal or
when no future economic benefits are expected from its use or
disposal. The gain or loss arising from derecognition of an asset
(calculated as the difference between the net disposal proceeds and
the carrying amount of the asset) is recognized in profit or loss
for the year when the asset is derecognized.
Depreciation is calculated based on the straight-line method
considering the estimated useful lives of the assets (Note 10).
Expenditures incurred in the construction of sales stands, display
apartments and related furnishings are included in property and
equipment of the Company and its subsidiaries. Depreciation of
these assets commences upon launch of the development and is
recorded over the term the stand is in use, and is written-off when
it is retired.
Property and equipment are subject to periodic assessments of
impairment.
|
2.2.12. |
Intangible assets |
(i)
Expenditures related to
the acquisition and implementation of computer systems and software
licenses are recorded at acquisition cost, and amortized on
straight-line basis over a period of up to five years, and are
subject to periodic assessments of impairment of assets.
(ii)
The
Company’s investments in subsidiaries include goodwill when the
acquisition cost exceeds the market value of net assets of the
acquiree.
Impairment testing of goodwill is performed at least annually, or
whenever circumstances indicate an impairment loss.
|
2.2.13. |
Payables for purchase of properties and
advances from customers |
Payables for purchase of properties are recognized at the amounts
corresponding to the contractual obligations assumed. Subsequently
they are measured at amortized cost, plus, when applicable,
interest and charges proportional to the incurred period (“pro
rata” basis), net of present value adjustment.
The obligations related to barter transactions of land in exchange
for real estate units are stated at fair value of the units to be
delivered.
Gafisa S.A.
Notes to the financial
statements--Continued
December 31, 2020
(Amounts in thousands of
Brazilian Reais, except as otherwise stated)
|
|
|
2. |
Presentation of financial
statements and summary of significant accounting
policies--Continued |
|
2.2. |
Summary of significant accounting
policies--Continued |
|
2.2.14. |
Income tax and social contribution on net
income |
(i)
Current
income tax and social contribution
Current tax is the expected tax payable or receivable/to be offset
in relation to taxable profit for the year.
Income taxes in Brazil comprise income tax (25%) and social
contribution on net income (9%), for entities on the standard
profit regime, for which the composite statutory rate is 34%.
Deferred taxes for these entities are recognized on all temporary
differences at the reporting date between the tax bases of assets
and liabilities, and their carrying amounts.
As permitted by tax legislation, certain subsidiaries opted for the
presumed profit regime, a method under which the taxable profit is
calculated as a percentage of gross sales. For these companies, the
income tax is calculated on estimated profits at rate of 8% and 12%
of gross revenues, respectively, on which the rates of the
respective tax and contribution are levied.
As permitted by legislation, the development of certain ventures
are subject to the “afetação” regime, based on which the land and
its features where a real estate will be developed, as well as
other binding assets, rights and obligations, are separated from
the developer’s assets, and comprise the “patrimônio de afetação”
(detached assets), intended for the completion of the corresponding
development, and delivery of real estate units to the respective
buyers. In addition, certain subsidiaries made the irrevocable
option for the Special Taxation Regime (RET), according to which
the income tax and social contribution are calculated at 1.92% on
gross revenues (4% also considering PIS and COFINS on
revenues).
(ii)
Deferred
income tax and social contribution
Deferred taxes are recognized in relation to tax losses and
temporary differences between the amount of assets and liabilities
for accounting purposes and the corresponding amounts used for tax
purposes.
They are recognized to the extent that it is probable that future
taxable profit will be available to be used for offsetting deferred
tax assets, based on profit projections made using internal
assumptions, and considering future economic scenarios that make it
possible their full or partial use, upon the recognition of a
provision for the non-realization of the balance. The recognized
amounts are periodically reviewed, and the impacts of realization
or settlement are reflected in compliance with tax legislation
provisions.
Deferred tax on accumulated tax losses does not have an expiration
date, however, they can only be offset against up to 30% of the
taxable profit for each year. Companies that opt for the presumed
profit tax regime cannot offset tax losses for a period in
subsequent years.
Deferred tax assets and liabilities are stated at net amount in the
statement of financial position when there is the legal right and
intention to offset them when determining the current taxes,
related to the same legal entity and the same tax authority.
|
2. |
Presentation of financial
statements and summary of significant accounting
policies--Continued |
|
2.2. |
Summary of significant accounting
policies--Continued |
Gafisa S.A.
Notes to the financial
statements--Continued
December 31, 2020
(Amounts in thousands of
Brazilian Reais, except as otherwise stated)
|
|
|
2.2.15. |
Other current and non-current
liabilities |
These liabilities are stated at their known or estimated amounts,
plus, when applicable, adjustment for charges and inflation-indexed
variations through the reporting date of the statement of financial
position, which contra-entry is recorded in profit or loss. When
applicable, current and non-current liabilities are recorded at
present value based on interest rates that reflect the term,
currency and risk of each transaction.
|
2.2.16. |
Stock option plan |
As approved by its Board of Directors, the Company offers
executives and employees share-based compensation plans (stock
options), as payments for services received.
The fair value of options is determined on the grant date,
considering that it is recognized as expense in profit or loss (as
contra-entry to equity), to the extent services are provided by
employees and management members.
In an equity-settled transaction, in which the plan is modified, a
minimum expense is recognized corresponding to the expense as if
the terms had not been changed. An additional expense is recognized
for any modification that increases the total fair value of granted
options, or that otherwise benefits the employee, measured on the
modification date.
In case of cancellation of a stock option plan, this is treated as
if it had been granted on the cancellation date, and any
unrecognized plan expense is immediately recognized. However, if a
new plan substitutes the cancelled plan, and a substitute plan is
designated on the grant date, the cancelled plan and the new plan
are treated as if they were a modification of the original plan, as
previously mentioned.
The Company annually revises its estimates of the amount of options
that shall be vested, considering the vesting conditions not
related to the market and the conditions based on length of
service. The Company recognizes the impact of the revision of the
initial estimates, if any, in the statement of profit or loss, as
contra-entry to equity.
|
2.2.17. |
Share-based payment - Phantom
Shares |
The Company has a cash-settled
share-based payment plan (phantom shares) under fixed terms and
conditions. There is no expectation of the effective negotiation of
shares, once there shall be no issue and/or delivery of shares for
settling the plan.
According to CPC 10 (R1) –
Share-based Payment, these amounts are recorded as a reserve
payable, with contra-entry in profit or loss for the year, based on
the fair value of the phantom shares granted, and during the
vesting period. The fair value of this liability is remeasured and
adjusted every reporting period, according to the change in the
fair value of the benefit granted and vesting.
|
2. |
Presentation of financial
statements and summary of significant accounting
policies--Continued |
|
2.2. |
Summary of significant accounting
policies--Continued |
|
2.2.18. |
Other employee benefits |
The salaries and benefits granted to the Company’s employees and
executives include fixed compensation (salaries, social security
contributions (INSS), Government Severance Indemnity
Gafisa S.A.
Notes to the financial
statements--Continued
December 31, 2020
(Amounts in thousands of
Brazilian Reais, except as otherwise stated)
|
|
Fund for Employees (FGTS), vacation pay, and 13th monthly salary,
among other) and variable compensation such as profit sharing,
bonus, and stock option-based payments. These benefits are recorded
in profit or loss for the year, under the account “General and
administrative expenses”, as they are incurred.
The bonus system operates with individual and corporate targets,
structured based on the efficiency of corporate goals, followed by
the business goals and, finally, individual goals.
The Company and its subsidiaries do not offer private pension or
retirement plans.
|
2.2.19. |
Present value adjustment – assets and
liabilities |
Assets and liabilities arising from long or short-term transactions
are adjusted to present value if significant.
In installment sales of units not completed, real estate
development entities present receivables adjusted for inflation,
including the installment related to the delivery of units, without
accrual of interest, and shall be discounted to present value, as
the agreed inflation rates do not include interest.
Borrowing costs and those related to finance the construction of
real estate ventures are capitalized. Therefore, the reversal of
the present value adjustment of an obligation related to these
items is included in the cost of real estate unit sold or in the
inventories of properties for sale, as the case may be, until the
period of construction of the project is completed.
Accordingly, certain assets and liabilities are adjusted to present
value based on discount rates that reflect the best estimate of the
time value of money.
The applied discount rate’s underlying economic basis and
assumption is the average rate of the financing and loans obtained
by the Company, net of the inflationary effect (Notes 5 and
12).
|
2.2.20. |
Debenture and public offering
costs |
Transaction costs and premiums on issuance of securities are
accounted for as a direct reduction in the amount raised by the
Company and are amortized over the terms of the instrument and the
net balance is classified as reduction in the respective
transaction (Note 13).
The borrowing costs directly attributable to ventures during
construction phase, and to land during the development of assets
for sale are capitalized as part of the cost of that asset during
the construction period, since there is borrowing outstanding,
which is recognized in profit or loss to the extent units are sold.
All other borrowing costs are recorded as expense when incurred.
Borrowing costs comprise interest and other related costs incurred,
including those for raising finance.
Gafisa S.A.
Notes to the financial
statements--Continued
December 31, 2020
(Amounts in thousands of
Brazilian Reais, except as otherwise stated)
|
|
|
2. |
Presentation of financial
statements and summary of significant accounting
policies--Continued |
|
2.2. |
Summary of significant accounting
policies--Continued |
Charges that are not recognized in profit or loss of subsidiaries
are recorded in the financial statements of the Company, in the
account investments in non-current assets (Note 9).
|
(i) |
Provision for penalties due to
delay in construction work |
As contractually provided, the Company has the practice of
provisioning the charges payable to eligible customers for projects
whose delivery is delayed over 180 days, in line with the
respective contractual clause and history of payments.
For companies under the taxable profit regime, levied on
non-cumulative basis, the PIS and COFINS contribution rates are
levied at 1.65% and 7.6%, respectively, on gross revenue and
discounting certain credits determined based on incurred costs and
expenses. For companies that opt for the presumed profit taxation
regime, under the cumulative taxation regime, the PIS and COFINS
contribution rates are levied at 0.65% and 3%, respectively, on
gross revenue, without discounts of credits in relation to incurred
costs and expenses.
Own equity instruments that are repurchased (treasury shares) and
are recognized at cost and charged to equity. No gain or loss is
recognized in the statement of profit or loss upon purchase, sale,
issue, or cancellation of the Company’s own equity instruments.
|
2.2.25. |
Interest on equity and
dividends |
The proposal for distributing dividends and interest on equity made
by Management that is in the portion equivalent to the minimum
mandatory dividend is recorded as current liabilities in the
heading “Dividends payable”, as it is considered a legal obligation
provided for in the Articles of Incorporation of the Company.
|
2.2.26. |
Earnings (loss) per share – basic and
diluted |
Basic earnings (loss) per share are calculated by dividing the net
income (loss) available (allocated) to ordinary shareholders by the
weighted average number of common shares outstanding over the
period.
Diluted earnings per share are calculated in a similar manner,
except that the shares outstanding are increased, to include the
additional shares that would be outstanding, in case the shares
with dilutive potential attributable to stock option had been
issued over the respective periods, using the weighted average
price of shares.
|
2. |
Presentation of financial
statements and summary of significant accounting
policies--Continued |
|
2.2. |
Summary of significant accounting
policies--Continued |
|
2.2.27. |
Non-current asset held for
sale |
Gafisa S.A.
Notes to the financial
statements--Continued
December 31, 2020
(Amounts in thousands of
Brazilian Reais, except as otherwise stated)
|
|
The Company classifies a non-current asset as held for sale if its
carrying amount is recovered by sale transaction. In such case, the
asset or group of assets held for sale shall be available for
immediate sale on its current conditions, subject only to the terms
that are usual and common for sale of such assets held for sale.
With this, the sale shall be highly probable.
For a sale to be highly probable, Management shall be committed to
the plan to sell the asset, and shall have initiated an active
program to locate a buyer and complete the plan. In addition, the
asset held for sale shall also be effectively marketed for sale at
a sales price that is reasonable in relation to its current fair
value. Also, the sale is expected to be completed within one year
of the classification date, unless events beyond the control of the
Company change such period.
The asset held for sale is measured at the lower of its carrying
amount and the fair value less cost to sell. In case the carrying
amount is higher than the fair value, an impairment loss is
recognized in statement of profit or loss for the year. Any
reversal or gain will only be recorded within the limit of the
recognized loss.
|
2.2.28. |
Business combination |
The business combination transactions are recognized using the
acquisition method. The cost of an acquisition is measured by the
sum of the consideration transferred, measured at fair value at the
acquisition date, and the amount of any non-controlling interests
in the acquired entity. The acquisition directly related costs
shall be recognized as expense when incurred.
In the acquisition of a business, Management evaluates the
financial assets and liabilities assumed to classify and allocate
them according to the contractual terms, the economic
circumstances, and the pertinent conditions that exist at the
acquisition date.
Goodwill is initially measured as the excess of the consideration
transferred over the fair value of the acquired net assets
(identifiable assets and liabilities assumed, net). If the
consideration is lower than the fair value of acquired net assets,
the difference shall be recognized as gain in the statement of
profit or loss. Gains from a bargain purchase are immediately
recognized in profit or loss.
After initial recognition, goodwill is measured at cost, less any
accumulated loss on recoverable amount. For purposes of testing the
recoverable amount, the goodwill acquired in a business
combination, from the acquisition date, shall be allocated to each
of the cash-generating units of the Company that are expected to be
benefitted from the combination synergies, regardless of the other
assets or liabilities of the acquired entity that are attributed to
such units.
In the year ended December 31, 2020, the Company made a business
combination transaction, related to the acquisition by Gafisa of
the totality of shares issued by Upcon, which became a subsidiary
of the Company, and the acquisition of the totality of interest in
four real estate ventures of Calçada S.A. in Rio de Janeiro (Note
9.1.1).
Gafisa S.A.
Notes to the financial
statements--Continued
December 31, 2020
(Amounts in thousands of
Brazilian Reais, except as otherwise stated)
|
|
|
2. |
Presentation of financial
statements and summary of significant accounting
policies--Continued |
|
2.2. |
Summary of significant accounting
policies—Continued |
|
2.2.29. |
Investment property |
Investment properties are properties held to earn rentals or for
capital appreciation, and are initially measured at cost, including
transaction costs. After initial recognition, investment properties
are measured at fair value. All income from operating lease of
assets for purposes of earning rental or capital appreciation are
recorded as investment properties and measured using the fair value
model. The gains and losses arising from changes in the fair value
of investment property are recognized in profit or loss for the
period in which they arise.
An investment property is derecognized on disposal or when the
investment property is permanently withdrawn from use and no future
economic benefits are expected from its disposal. Any gain or loss
arising from the property derecognition (calculated as the
difference between the net disposal proceeds and the carrying
amount of the asset) is recognized in the profit or loss for the
period in which it is derecognized.
|
3. |
New standards, changes and
interpretation of standards issued and adopted from 2020, and not
yet adopted |
3.1 New standards, changes and interpretation of standards issued
and adopted from 2020
As of January 1, 2020, the following standards are in effect. The
adoption of these standards and interpretations did not have any
material impact on the disclosures or amounts disclosed in these
financial statements.
|
(i) |
Amendments to CPC 15
(R1): Definition of business - clarify that to be considered a
business, an acquired set of activities and assets must include, at
a minimum, an input and a substantive process that together
significantly contribute to the ability to create outputs. These
amendments did not have impact on the Company’s financial
statements. |
(ii)
Amendments to
CPC 38, CPC 40 (R1) and CPC 48: Interest Rate Benchmark Reform,
provide exemptions that apply to all hedging relationships directly
affected by the interest rate benchmark reform. A hedging
relationship is directly affected if the reform gives rise to
uncertainties about the timing or the amount of interest rate
benchmark-based cash flows of the hedged item or of the hedging
instrument. These amendments do not have impact on the financial
statements of the Company, once the latter does not have interest
rate hedging relationships.
(iii)
Amendments to
CPC 26 (R1) and CPC 23: Definition of material, provide a new
definition of material that states that the “information is
material if omitting, misstating or obscuring it could reasonably
be expected to influence decisions that the primary users of
general purpose financial statements make on the basis of those
financial statements, which provide financial information about a
specific reporting entity”. The amendments clarify that materiality
will depend on the nature or magnitude of information, either
individually or in combination with other information, in the
context of financial statements. A misstated information is
material if it could be reasonably expected to influence decisions
taken by primary users. These amendments did not have any impact on
the financial statements, nor are expected to have any future
impact on the Company.
Gafisa S.A.
Notes to the financial
statements--Continued
December 31, 2020
(Amounts in thousands of
Brazilian Reais, except as otherwise stated)
|
|
|
3. |
New standards, changes and
interpretation of standards issued and adopted from 2020, and not
yet adopted--Continued |
3.1 New standards, changes and interpretation of standards issued
and adopted from 2020--Continued
(iv)
Revision of
CPC 00 (R2): Conceptual Framework for Financial Reporting, provides
updated definitions and criteria for recognition of assets and
liabilities, and clarifies some important concepts. These
amendments did not have impact on the Company’s financial
statements.
(v)
Amendments to
CPC 06 (R2): Covid-19-related Rent Concessions, provides lessees
with concessions in the application of the CPC 06 (R2) provisions
about the modification of lease contract, by recognizing the
concessions occurring as direct consequence of the Covid-19
pandemic. As a practical expedient, a lessee may elect not to
assess whether a Covid-related rent concession granted by the
lessor is a lease modification. This amendment did not have any
impact on the Company’s financial statements.
3.1 New standards, changes and interpretation of standards issued
and not yet adopted
A series of new standards are coming into effect for years
beginning after January 1, 2021. The Company has not adopted these
standards in the preparation of the accompanying Financial
Statements. The following amended standards and interpretations
shall not have a significant impact on the Company’s consolidated
financial statements.
|
(i) |
Onerous
contracts - costs of fulfilling a contract (amendments to CPC
25/IAS 37) |
|
(ii) |
Interest rate benchmark
reform – Phase 2 (amendments to CPC 48/IFRS 9, CPC 38/IAS39, CPC
40/IFRS 7, CPC 11/IFRS 4 and CPC 06/IFRS 16), |
|
(iii) |
Property, plant and
equipment: Proceeds before intended use (amendments to CPC 27/IAS
16) |
|
(iv) |
Reference to the
Conceptual Framework (amendments to CPC 15 / IFRS 3) |
|
(v) |
Classification of
Liabilities as Current or Non-current (amendments to CPC 26/IAS
1) |
|
(vi) |
IFRS 17 Insurance
Contracts. |
There is no other standard, changes to standards or interpretation
issued and not yet adopted that could, on the Management’s opinion,
have significant impact arising from their adoption on its
financial statements, however, studies on them are in
progress.
Gafisa S.A.
Notes to the financial
statements--Continued
December 31, 2020
(Amounts in thousands of
Brazilian Reais, except as otherwise stated)
|
|
|
4. |
Cash and cash equivalents and short-term investments |
|
4.1. |
Cash and cash equivalents |
|
Company |
Consolidated |
|
2020 |
2019 |
2020 |
2019 |
|
|
|
|
|
Cash and banks
(a) |
469 |
810 |
29,038 |
12,435 |
Total cash and cash equivalents (Note 20.i.d, 20.ii.a and
20.iii)
|
469
|
810 |
29,038 |
12,435 |
(a)
These are held
to meet short-term cash commitments and not for investment or other
purposes. They comprise cash balance with immediate liquidity and
insignificant risk of change in value.
|
4.2. |
Short-term investments |
|
Company |
Consolidated |
|
2020 |
2019 |
2020 |
2019 |
|
|
|
|
|
Fixed-income
funds (a) |
136,058 |
125,961 |
144,437 |
125,962 |
Government
bonds (LFT) (a) |
3,078 |
231,725 |
3,078 |
231,725 |
Real estate
investment fund (a) |
151,553 |
- |
151,553 |
- |
Securities
purchased under resale agreements |
- |
125 |
- |
125 |
Bank
certificates of deposit (b) |
99,489 |
10,460 |
118,466 |
10,523 |
Restricted
credits (c) |
23,260 |
32,972 |
175,548 |
33,560 |
Total short-term investments (Note 20.i.d, 20.ii.a and
20.iii)
|
413,438
|
401,243 |
593,082 |
401,895 |
|
|
|
|
|
(a)
Exclusive and
open-end funds whose purpose is to invest in financial assets
and/or fixed-income investment modalities that follow the
fluctuations in interest rates in the interbank deposit market
(CDI), by investing its funds mostly in investment fund shares
and/or investment funds comprising investment fund shares. The
Company entered into a swap contract to mitigate the risk of its
exposure to index and interest rate volatility (Note
20(i)(b)).
(b)
As of December
31, 2020, Certificates of Bank Deposit (CDBs) include interest
earned ranging from 93.5% to 103.5% (93.5% to 110% in 2019) of
Interbank Deposit Certificates (CDI).
(c)
Restricted
credits are represented by funds pledged and asset separated from
transactions with financial institutions.
|
5. |
Trade accounts receivable |
|
Company |
Consolidated |
|
2020 |
2019 |
2020 |
2019 |
|
|
|
|
|
Real estate
development and sales |
518,847 |
492,205 |
749,065 |
605,067 |
(-) Allowance
for expected and incurred credit losses |
(10,421) |
(12,065) |
(16,365) |
(16,265) |
( - )
Allowance for cancelled contracts (a) |
(44,947) |
(27,481) |
(80,727) |
(37,485) |
( - ) Present
value adjustment |
(329) |
(7,133) |
(7,038) |
(8,518) |
Services and
construction and other receivables |
59,063 |
14,491 |
59,317 |
14,639 |
|
|
|
|
|
Total trade accounts receivable (Note 20.i.d and
20.ii.a)
|
522,213
|
460,017 |
704,252
|
557,43B8 |
|
|
|
|
|
Current |
340,096 |
361,649 |
487,083 |
445,303 |
Non-current |
182,117 |
98,368 |
217,169 |
112,135 |
|
|
|
|
|
(a)
The increase
in the allowance for cancelled contracts was mainly caused by the
re-evaluation of the current contracts in relation to the
uncertainty over cash inflows due to the impact of the Covid-19
pandemic on the Company’s portfolio of receivables.
Gafisa S.A.
Notes to the financial
statements--Continued
December 31, 2020
(Amounts in thousands of
Brazilian Reais, except as otherwise stated)
|
|
|
5. |
Trade accounts receivable--Continued |
The current and non-current
portions have the following maturities:
|
Company |
Consolidated |
Maturity |
2020 |
2019 |
2020 |
2019 |
|
|
|
|
|
Past due:
(a) |
|
|
|
|
Up to 90
days |
19,601 |
19,785 |
42,726 |
32,306 |
From 91 to 180
days |
37,096 |
8,294 |
38,081 |
11,424 |
Over 180
days |
116,290 |
90,216 |
157,484 |
115,619 |
|
172,987 |
118,295 |
238,291 |
159,349 |
|
|
|
|
|
Falling
due: |
|
|
|
|
2020 |
- |
286,456 |
- |
343,971 |
2021 |
221,301 |
83,082 |
350,078 |
97,213 |
2022 |
47,186 |
5,276 |
72,280 |
5,368 |
2023 |
36,049 |
3,180 |
46,790 |
3,247 |
2024 |
26,899 |
2,791 |
27,269 |
2,830 |
2025
onwards |
73,488 |
7,616 |
73,674 |
7,728 |
|
404,923 |
388,401 |
570,091 |
460,357 |
|
|
|
|
|
( - ) Present
value adjustment |
(329) |
(7,133) |
(7,038) |
(8,518) |
(-) Allowance
for expected and incurred credit losses and cancelled
contracts |
(55,368) |
(39,546) |
(97,092) |
(53,750) |
|
|
|
|
|
|
522,213 |
460,017 |
704,252 |
557,438 |
|
(a) |
The increase in the period
is due to the relevance of the delivery of ten ventures in the year
ended December 31, 2020. As reflection of the Covid-19 pandemic,
the time required by banks and registry offices to process
information for transferring the ownership of delivered units
increased. |
The balance of accounts
receivable from units sold and not yet completed is not fully
reflected in the financial statements. Its recording is limited to
the portion of the recognized revenues net of the amounts already
received, according to the accounting practice mentioned in Note
2.2.2(i)(b).
As of December 31, 2020, the
amount received from customers in excess of the recognized revenues
totaled R$1,471 (R$1,540 in 2019) in the Company’s statements, and
R$151,172 (R$14,197 in 2019) in the consolidated statements, and
are classified in the heading “Payables for purchase of properties
and advances from customers" (Note 17). The change in the year is
due to the acquisition of the totality of shares in Upcon S.A. and
assets of Calçada S.A. (Note 9.2).
Accounts receivable from
completed real estate units financed by the Company are in general
adjusted by the IGP-M variation plus annual interest of 12%, with
revenue being recorded in profit or loss in the account “Revenue
from real estate development and sale, barter transactions and
construction services".
The balances of allowance for
expected credit losses are considered sufficient by the Company’s
management to cover the estimate of future losses on realization of
the accounts receivable.
During the years ended December 31, 2020 and 2019, the changes in
the allowances for expected credit losses and cancelled contracts
are summarized as follows:
Gafisa S.A.
Notes to the financial
statements--Continued
December 31, 2020
(Amounts in thousands of
Brazilian Reais, except as otherwise stated)
|
|
|
5. |
Trade accounts receivable--Continued |
|
|
|
Company |
Consolidated |
|
|
|
Balance as of
December 31, 2018 |
(101,006) |
(101,006) |
Additions
(Note 22) |
(10,630) |
(26,150) |
Write-offs /
Reversals (Note 22) |
72,090 |
73,406 |
Balance as of
December 31, 2019 |
(39,546) |
(53,750) |
Acquired
balance Upcon/ assets of Calçada |
- |
(3,568) |
Additions
(Note 22) |
(26,198) |
(76,905) |
Write-offs /
Reversals (Note 22) |
10,376 |
37,131 |
Balance as
of December 31, 2020 |
(55,368) |
(97,092) |
The present value adjustment
recognized in revenue from real estate development for the year
ended December 31, 2020 totaled R$6,804 (R$10,764 in 2019), in the
Company’s statements, and R$1,479 (R$10,873 in 2019) in the
consolidated statements.
Receivables from units not yet
completed were measured at present value using a discount rate
determined according to the criteria described in Note 2.2.2. The
discount rate applied by the Company and its subsidiaries was 2.21%
for the year 2020 (6.64% in 2019), net of Civil Construction
National Index (INCC).
The Company entered into the
following Housing Loan Certificate (CCI) transactions, which are
aimed at the assignment by the assignor to the assignee of a
portfolio comprising select residential and business real estate
receivables performed and to be performed arising out of Gafisa and
its subsidiaries. The assigned portfolios, discounted to present
value, are recorded under the heading “obligations assumed on the
assignment of receivables”.
|
|
|
|
Transaction
balance Company (Note 14) |
Transaction
balance Consolidated (Note 14) |
|
Transaction
date |
Assigned
portfolio |
Portfolio
discounted to present value |
2020 |
2019 |
2020 |
2019 |
(i) |
Jun 27,
2011 |
203,915 |
171,694 |
23 |
322 |
23 |
412 |
(ii) |
Nov 14,
2012 |
181,981 |
149,025 |
- |
- |
85 |
2,586 |
(iii) |
Dec 27,
2012 |
72,021 |
61,647 |
972 |
1,683 |
972 |
1,683 |
(iv) |
Nov 29,
2013 |
24,149 |
19,564 |
173 |
242 |
480 |
1,170 |
(v) |
Nov 25,
2014 |
15,200 |
12,434 |
371 |
833 |
486 |
1,203 |
(vi) |
Dec 3,
2015 |
32,192 |
24,469 |
1,232 |
2,342 |
3,148 |
5,300 |
(vii) |
Dec 19,
2016 |
27,954 |
27,334 |
3,287 |
5,845 |
3,682 |
6,429 |
(viii) |
May 9,
2016 |
17,827 |
17,504 |
2,250 |
3,385 |
3,062 |
4,625 |
(ix) |
Aug 19, 2016
(a) |
15,418 |
14,943 |
1,752 |
2,351 |
1,774 |
2,392 |
(x) |
Dec 21,
2016 |
21,102 |
19,532 |
4,964 |
5,961 |
5,067 |
6,106 |
(xi) |
Mar 29,
2017 |
23,748 |
22,993 |
5,236 |
8,254 |
5,413 |
8,455 |
|
|
|
|
20,260 |
31,218 |
24,192 |
40,361 |
|
(a) |
The
consolidated balance of the transaction as of December 31, 2020 and
2019 (Note 14) does not include the jointly-controlled entities,
which are accounted for using the equity method, according to CPCs
18(R2) and 19(R2). |
Transaction (i) was entered into
with Banco BTG Pactual S.A. (Note 14).
Transactions (ii), (iii), (iv)
and (v) were entered into with Polo Multisetorial Fundo de
Investimento em Direitos Creditórios Não Padronizados (Note
14).
Transactions (vi), (vii), (viii),
(ix), (x) and (xi) were entered into with Polo Capital
Securitizadora S.A. (Note 14).
In the transactions above, the
Company and its subsidiaries are jointly responsible until the time
of the transfer of the collateral to the securitization
company.
For the items
(i) to (iii) and (viii) to (xiii) above, the Company was engaged to
perform, among other duties, the management of the receipt of
receivables, the assignment’s underlying assets,
collection of defaulting
customers, among other, according to the criteria of each investor,
being paid for these services.
Gafisa S.A.
Notes to the financial
statements--Continued
December 31, 2020
(Amounts in thousands of
Brazilian Reais, except as otherwise stated)
|
|
|
Company |
Consolidated |
|
2020 |
2019 |
2020 |
2019 |
|
|
|
|
|
Land |
384,324 |
423,074 |
607,564 |
573,715 |
( - )
Provision for loss on realization of land |
(111,307) |
(122,621) |
(111,307) |
(122,621) |
( - ) Present
value adjustment |
(641) |
(5,200) |
(676) |
(5,198) |
Properties
under construction (Note 29) |
148,865 |
190,383 |
880,471 |
355,980 |
Completed
units |
63,246 |
264,381 |
107,882 |
283,991 |
( - )
Provision for loss on realization of properties under construction
and completed units |
(8,726)
|
(65,627) |
(9,131)
|
(67,099) |
Allowance for
cancelled contracts |
38,729 |
36,078 |
74,498 |
47,099 |
|
|
|
|
|
Total
properties for sale |
514,490
|
720,468 |
1,549,301
|
1,065,867 |
|
|
|
|
|
Current |
319,516 |
490,419 |
1,243,841 |
786,660 |
Non-current |
194,974 |
230,049 |
305,460 |
279,207 |
During the years ended December
31, 2020 and 2019, the changes in the provision for loss on
realization is summarized as follows:
|
Company |
Consolidated |
Balance as of
December 31, 2018 |
(163,078) |
(164,603) |
Reclassification from land
available for sale (Note 8.1) |
(52,196) |
(52,196) |
Write-off
(a) |
27,026 |
27,079 |
Balance as of
December 31, 2019 |
(188,248) |
(189,720) |
Additions |
(3,025) |
(3,482) |
Write-offs
(a) |
59,926 |
61,450 |
Reversal
(b) |
11,314 |
11,314 |
Balance as
of December 31, 2020 |
(120,033) |
(120,438) |
|
(a) |
The amount of write-offs
refers to the respective units sold and project revision in the
year 2020. |
|
(b) |
Amount related to the
reversal of land impairment in view of project revision and
viability. |
The amount of properties for sale offered as guarantee for
financial liabilities is described in Note 12.
As disclosed in Note 12, the balance of capitalized financial
charges as of December 31, 2020 was R$146,582 (R$193,798 in 2019)
in the Company’s statements, and R$173,228 (R$206,935 in 2019) in
the consolidated statements.
|
Company |
Consolidated |
|
2020 |
2019 |
2020 |
2019 |
|
|
|
|
|
Advances to
suppliers |
11,091 |
20,142 |
15,217 |
20,702 |
Advance -
Fasano transaction (Notes 1.2 and 31(ii)) |
62,000 |
- |
62,000 |
- |
Recoverable
taxes (IRRF, PIS, COFINS, among other) |
13,739 |
11,733 |
18,833 |
17,285 |
Judicial
deposits (Note 16.a) |
110,314 |
122,238 |
120,407 |
129,933 |
Arbitration
decision amount (a) |
5,777 |
5,777 |
66,391 |
66,391 |
Credit for
land acquisition (b) |
25,570 |
- |
- |
- |
Other |
3,337 |
- |
10,728 |
- |
Total other
assets |
231,828 |
159,890 |
293,576 |
234,311 |
|
|
|
|
|
Current |
125,498 |
52,455 |
180,837 |
67,395 |
Non-current |
106,330 |
107,435 |
112,739 |
166,916 |
|
(a) |
Amount related to the
outcome of the arbitration decision related to venture construction
contracts with partners, which was awarded on November 12, 2019 by
the Arbitration Court, managed by the Center for Arbitration and
Mediation of the Chamber of Commerce Brazil – Canada. |
|
(b) |
Amount related to credits
for acquisition of land located in Rio de Janeiro, carried out by
subsidiary. |
Gafisa S.A.
Notes to the financial
statements--Continued
December 31, 2020
(Amounts in thousands of
Brazilian Reais, except as otherwise stated)
|
|
|
8. |
Non-current assets held for sale |
8.1 Land available for sale
The Company, in line with its
strategic direction, opted to sell land not included in the
business plan in effect. Likewise, it devised a specific plan for
the sale of such land. Their carrying amount, adjusted to market
value when applicable, after the test for impairment, is as
follows:
|
Company |
|
Consolidated |
|
Cost |
Provision
for impairment |
Net
balance |
|
Cost |
Provision
for impairment |
Net
balance |
|
|
|
|
|
|
|
|
Balance as of December 31,
2018 |
146,182 |
(71,340) |
74,842 |
|
149,488 |
(71,340) |
78,148 |
Reclassification from
properties for sale (Note 6) |
- |
- |
- |
|
- |
- |
- |
Reclassification to
properties for sale (Note 6) |
(83,579) |
52,196 |
(31,383) |
|
(83,579) |
52,196 |
(31,383) |
Additions (Note
23) |
- |
- |
- |
|
- |
- |
- |
Reversal / write-offs
(a) |
(50,117) |
10,367 |
(39,750) |
|
(50,117) |
10,366 |
(39,751) |
Balance as of December
31, 2019 |
12,486 |
(8,777) |
3,709 |
|
15,792 |
(8,778) |
7,014 |
Additions (Note
23) |
- |
- |
- |
|
- |
- |
- |
Reversal /
write-offs |
- |
- |
- |
|
- |
- |
- |
Balance as of December
31, 2020 |
12,486 |
(8,777) |
3,709 |
|
15,792
|
(8,778) |
7,014 |
|
(a) |
The
amount of write-offs over the period mainly refers to the cancelled
land sales contract in January 2019, located in the city of Rio de
Janeiro – RJ. |
The sale of assets held for sale
is considered highly probable, and the Company keeps an active
program to locate buyers. Additionally, Management has made the
necessary efforts to successfully dispose such assets for amounts
not below the recorded ones. Changes in economic conditions or
transactions currently in discussion may result in the recognition
of losses in addition to those already recognized.
Gafisa S.A.
Notes to the financial
statements--Continued
December 31, 2020
(Amounts in thousands of
Brazilian Reais, except as otherwise stated)
|
|
9. Investments
|
9.1 |
Investments in ownership interests |
|
(i) |
Information
on subsidiaries, associates and jointly-controlled
investees |
|
|
|
|
|
|
|
|
|
|
|
Company |
Consolidated |
|
|
Interest in
capital - % |
Total
assets |
Total
liabilities |
Equity and
advance for future capital increase |
Profit
(loss) for the year |
Investments |
Income from
equity method investments |
Investments |
Income from
equity method investments |
Subsidiaries: |
|
2020 |
2019 |
2020 |
2020 |
2020 |
2019 |
|
2020 |
2019 |
2020 |
2019 |
2020 |
2019 |
2020 |
2019 |
2020 |
2019 |
Gafisa Rio |
- |
100% |
100% |
228,826 |
140,758 |
88,068 |
- |
|
50,288 |
- |
88,068 |
- |
50,288 |
- |
- |
- |
- |
- |
Gafisa Propriedades
S.A. |
- |
100% |
100% |
312,752 |
230,708 |
82,044 |
- |
|
(6,021) |
- |
82,045 |
- |
(6,022) |
- |
- |
- |
- |
- |
Novum Directiones SPE
Ltda. |
- |
100% |
100% |
207,585 |
130,311 |
77,274 |
44,120 |
|
(3,089) |
(6,078) |
77,274 |
44,120 |
(3,089) |
(6,078) |
- |
- |
- |
- |
Gafisa SPE 80 Emp. Imob.
Ltda. |
- |
100% |
100% |
82,479 |
6,062 |
76,417 |
- |
|
315 |
- |
76,417 |
- |
315 |
- |
- |
- |
- |
- |
Gafisa SPE-104 Emp. Imob.
Ltda. |
- |
100% |
100% |
91,079 |
24,296 |
66,783 |
55,422 |
|
11,140 |
5,454 |
66,783 |
55,422 |
11,361 |
5,454 |
- |
- |
- |
- |
Upcon SPE 29 Emp. Imob.
Ltda |
- |
100% |
100% |
53,776 |
38 |
53,738 |
- |
|
- |
- |
53,738 |
- |
- |
- |
- |
- |
- |
- |
Gafisa SPE-89 Emp. Imob.
Ltda. |
- |
100% |
100% |
51,991 |
979 |
51,012 |
51,015 |
|
(3) |
(15) |
51,012 |
51,015 |
(3) |
(15) |
- |
- |
- |
- |
Gafisa SPE-81 Emp. Imob.
Ltda. |
- |
100% |
100% |
48,914 |
825 |
48,089 |
47,964 |
|
125 |
47,963 |
48,089 |
47,964 |
125 |
47,963 |
- |
- |
- |
- |
Upcon Spe 28 Emp. Imob.
Ltda |
- |
100% |
100% |
44,047 |
26 |
44,021 |
- |
|
- |
- |
44,021 |
- |
- |
- |
- |
- |
- |
- |
GDU Loteamentos
Ltda. |
- |
100% |
100% |
43,206 |
19 |
43,187 |
43,206 |
|
(19) |
- |
43,187 |
43,206 |
(19) |
- |
- |
- |
- |
- |
Nuove Direzioni SPE
Ltda |
- |
100% |
100% |
54,793 |
17,509 |
37,283 |
30,887 |
|
6,396 |
- |
37,283 |
30,887 |
6,396 |
- |
- |
- |
- |
- |
Gafisa SPE- 132 Emp. Imob.
Ltda. |
- |
100% |
100% |
39,199 |
9,006 |
30,193 |
30,193 |
|
- |
(1) |
30,193 |
30,193 |
- |
(1) |
- |
- |
- |
- |
Gafisa SPE-137 Emp. Imob.
Ltda. |
- |
100% |
100% |
25,608 |
42 |
25,567 |
25,567 |
|
- |
- |
25,567 |
25,567 |
- |
- |
- |
- |
- |
- |
Edsp 88 Participações
S.A. |
- |
100% |
100% |
29,332 |
12,682 |
16,650 |
16,724 |
|
(74) |
212 |
16,650 |
16,724 |
(74) |
212 |
- |
- |
- |
- |
Gafisa SPE-111 Emp. Imob.
Ltda. |
- |
100% |
100% |
18,614 |
2,944 |
15,670 |
14,848 |
|
822 |
14,847 |
15,670 |
14,848 |
822 |
14,847 |
- |
- |
- |
- |
Gafisa SPE 33 Emp. Imob.
Ltda. |
- |
100% |
100% |
196,861 |
182,424 |
14,437 |
13,227 |
|
1,209 |
(103) |
14,437 |
13,227 |
1,209 |
(103) |
- |
- |
- |
- |
Maraville Gafsa SPE Emp.
Imob. Ltda. |
- |
100% |
100% |
15,222 |
1,711 |
13,511 |
13,257 |
|
254 |
1,172 |
13,511 |
13,257 |
254 |
1,172 |
- |
- |
- |
- |
Gafisa SPE-134 Emp. Imob.
Ltda. |
- |
100% |
100% |
13,748 |
2,232 |
11,516 |
11,630 |
|
(114) |
(1,073) |
11,516 |
11,630 |
(114) |
(1,073) |
- |
- |
- |
- |
Upcon SPE 7 Emp. Imob.
Ltda |
- |
100% |
100% |
14,091 |
4,759 |
9,331 |
- |
|
- |
- |
9,331 |
- |
- |
- |
- |
- |
- |
- |
Gafisa SPE 78 Emp. Imob.
Ltda. |
- |
100% |
100% |
9,123 |
2,717 |
6,406 |
6,479 |
|
(73) |
1,415 |
6,406 |
6,479 |
(73) |
1,415 |
- |
- |
- |
- |
OCPC01 adjustment -
capitalized interest (d) |
(a) |
100% |
100% |
- |
- |
- |
- |
|
- |
- |
16,481 |
21,923 |
- |
- |
- |
- |
- |
- |
Other |
|
100% |
100% |
356,111 |
318,912 |
37,200 |
127,682 |
|
4,483 |
(10,676) |
36,601 |
86,720 |
4,490 |
(11,027) |
- |
- |
- |
- |
Subtotal
Subsidiaries |
|
|
|
1,937,357 |
1,088,960 |
848,397 |
532,221 |
|
65,639 |
53,117 |
864,280 |
513,182 |
65,866 |
52,766 |
- |
- |
- |
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jointly-controlled
investees: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gafisa e Ivo
Rizzo SPE-47 Emp. Imob. Ltda. |
|
80% |
80% |
34,263 |
1,952 |
32,310 |
32,347 |
|
(36) |
6 |
25,849 |
25,877 |
(28) |
5 |
25,849 |
25,877 |
(28) |
5 |
Sitio Jatiuca
Emp. Imob. SPE Ltda |
|
50% |
50% |
36,190 |
3,844 |
32,345 |
29,636 |
|
2,709 |
223 |
16,173 |
14,818 |
1,355 |
111 |
16,173 |
14,818 |
1,355 |
111 |
Varandas Grand
Park Emp. Imob. Spe Ltda. |
(b) |
50% |
50% |
34,093 |
5,034 |
29,059 |
28,773 |
|
457 |
2,742 |
14,529 |
14,387 |
143 |
1,917 |
14,529 |
14,387 |
143 |
1,917 |
Parque Arvores
Empr. Imob. Ltda. |
(b) |
50% |
50% |
29,533 |
3,622 |
25,911 |
24,616 |
|
1,716 |
3,116 |
12,956 |
12,308 |
648 |
1,407 |
12,956 |
12,308 |
648 |
1,407 |
Atins Emp.
Imob.s Ltda. |
|
50% |
50% |
19,952 |
659 |
19,293 |
20,813 |
|
4,859 |
3,084 |
9,646 |
10,406 |
2,430 |
1,542 |
9,646 |
10,406 |
2,430 |
1,542 |
Gafisa SPE-116
Emp. Imob. Ltda. |
|
50% |
50% |
24,278 |
3,414 |
20,863 |
25,111 |
|
(909) |
2,574 |
10,432 |
12,555 |
(454) |
1,287 |
10,432 |
12,555 |
(454) |
1,287 |
FIT 13 SPE
Emp. Imob. Ltda. |
|
50% |
50% |
21,423 |
1,699 |
19,724 |
19,779 |
|
(55) |
72 |
9,862 |
9,889 |
(27) |
36 |
9,862 |
9,889 |
(27) |
36 |
Performance
Gafisa General Severiano Ltda |
|
50% |
50% |
11,658 |
33 |
11,625 |
11,631 |
|
(6) |
(69) |
5,813 |
5,816 |
(3) |
(35) |
5,813 |
5,816 |
(3) |
(35) |
Other
(*) |
|
|
|
69,334 |
27,769 |
41,567 |
38,751 |
|
(6,802) |
(1,080) |
21,532 |
19,850 |
(3,462) |
(6,895) |
32,711 |
29,122 |
(3,494) |
(6,650) |
Subtotal
jointly-controlled investees |
|
|
|
280,724 |
48,026 |
232,697 |
231,457 |
|
1,933 |
10,668 |
126,792 |
125,906 |
602 |
(625) |
137,971 |
135,178 |
570 |
(380) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Associates: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alphaville Urbanismo
S.A |
|
0% |
0% |
- |
- |
- |
(1,479,312) |
|
- |
(603,985) |
- |
- |
- |
- |
- |
- |
- |
- |
Città Ville SPE Emp. Imob.
Ltda. |
|
50% |
50% |
4,912 |
534 |
4,378 |
4,272 |
|
107 |
1,571 |
2,189 |
2,136 |
53 |
785 |
2,189 |
2,136 |
53 |
785 |
Gafisa Tiner Campo Belo I
Emp. Imob. Ltda. |
|
45% |
45% |
1,153 |
25 |
1,128 |
1,189 |
|
(60) |
55 |
508 |
535 |
(27) |
25 |
508 |
535 |
(27) |
25 |
Other |
|
|
|
- |
- |
- |
(2) |
|
(1) |
- |
- |
- |
- |
4 |
716 |
953 |
- |
5 |
Indirect
jointly-controlled investees Gafisa |
|
|
|
6,065 |
559 |
5,506 |
(1,473,853) |
|
46 |
(602,359) |
2,697 |
2,671 |
26 |
814 |
3,413 |
3,624 |
26 |
815 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill
arising from acquisition of subsidiaries (Note 9.1.1) |
(c) |
|
|
|
|
|
|
|
|
|
166,028 |
- |
- |
- |
166,028 |
- |
- |
- |
Goodwill based
on inventory surplus |
(d) |
|
|
|
|
|
|
|
|
|
39,886 |
39,886 |
- |
- |
- |
- |
- |
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
investments |
|
|
|
|
|
|
1,199,683 |
681,645 |
66,494 |
52,955 |
307,412 |
138,802 |
596 |
435 |
(*) Includes
companies with investment balances below R$ 5,000. |
Gafisa S.A.
Notes to the financial
statements--Continued
December 31, 2020
(Amounts in thousands of
Brazilian Reais, except as otherwise stated)
|
|
9. Investments--Continued
|
9.1 |
Investments in ownership interests--Continued |
|
(i) |
Information on subsidiaries, associates and jointly-controlled
investees--Continued |
|
|
|
|
|
|
|
|
|
|
|
Company |
Consolidated |
|
Interest in
capital - % |
|
Total
assets |
Total
liabilities |
Equity and
advance for future capital increase |
Profit
(loss) for the year |
Investments |
Income from
equity method investments |
Investments |
Income from
equity method investments |
Provision
for net capital deficiency (e): |
2020 |
2019 |
|
2020 |
2020 |
2020 |
2019 |
|
2020 |
2019 |
2020 |
2019 |
2020 |
2019 |
2020 |
2019 |
2020 |
2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gafisa SPE 45
Ltda |
100% |
100% |
|
4,091 |
10,773 |
(6,682) |
- |
|
(6,986) |
- |
(6,682) |
- |
(6,986) |
- |
- |
- |
- |
- |
Manhattan Square Emp. Im.
Resid. 01 SPE Ltda |
50% |
50% |
|
2,499 |
15,431 |
(12,932) |
(6,569) |
|
(149) |
(313) |
(6,467) |
(3,284) |
(3,178) |
(1,130) |
(6,467) |
(3,284) |
(3,178) |
(1,130) |
Manhattan Square Emp. Im.
Com. 01 SPE Ltda |
50% |
50% |
|
3,342 |
9,888 |
(6,546) |
(6,558) |
|
(4) |
(294) |
(3,273) |
(3,279) |
4 |
(2,175) |
(3,273) |
(3,279) |
4 |
(2,175) |
Upcon SPE26 Emp. Imob.
Ltda |
100% |
100% |
|
103,644 |
106,780 |
(3,135) |
- |
|
- |
- |
(3,135) |
- |
- |
- |
- |
- |
- |
- |
Gafisa Spe- 130 Emp.
Imobiliários Ltda. |
100% |
100% |
|
8,594 |
10,072 |
(1,477) |
(1,137) |
|
(340) |
(1,138) |
(1,477) |
(1,137) |
(340) |
(1,138) |
- |
- |
- |
- |
Delfim Moreira
RJ |
100% |
100% |
|
111,660 |
112,550 |
(890) |
- |
|
(890) |
- |
(890) |
- |
(890) |
- |
- |
- |
- |
- |
Gafisa SPE-133 Emp. Imob.
Ltda. |
100% |
100% |
|
394,838 |
395,080 |
(241) |
- |
|
(328) |
- |
(241) |
- |
(328) |
- |
- |
- |
- |
- |
Other |
|
|
|
232,687 |
235,722 |
(18,491) |
(10,138) |
|
(10,158) |
(12,457) |
632 |
(7,094) |
(4,890) |
(1,649) |
3,010 |
(4,400) |
239 |
(2,133) |
Total
provision for net capital deficiency |
|
|
|
861,355 |
896,296 |
(50,394) |
(24,402) |
- |
(18,855) |
(14,202) |
(21,533) |
(14,794) |
(16,608) |
(6,092) |
(6,730) |
(10,963) |
(2,935) |
(5,438) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
income from equity method investments |
|
|
|
|
|
|
|
|
|
|
|
|
49,886 |
46,863 |
|
|
(2,339) |
(5,003) |
(*) Includes companies with
investment balances below (R$ 5,000).
|
(a) |
Financial charges
of the Company not recorded in the profit or loss of subsidiaries,
as required by paragraph 6 of OCPC01. |
|
(b) |
The Company
recorded expense of R$386 in Income from equity method investments
for the year ended December 31, 2020 related to the recognition, by
jointly-controlled entities, of prior year adjustments, in
accordance with the ICPC09 (R2) - Individual, Separate and
Consolidated Financial Statements and the Equity Method of
Accounting. |
|
(c) |
Recognition of
goodwill on acquisition of the totality of UPCON S.A.’s shares and
Calçada S.A.’s four ventures in the amounts of R$130,643 and
R$35,385, respectively. The Company commissioned a study from a
company specialized in determining Purchase Price Allocation (PPA)
for allocation of goodwill over a period of up to one year,
according to CPC 15(R1) - Business Combinations. |
|
(d) |
Amount related to
the goodwill arising from purchase of the control of SPE GDU
Loteamentos Ltda. granted on December 27, 2019 by Alphavile
Urbanismo for the urban development business. |
|
(e) |
The provision for
net capital deficiency is recorded in the line item “Other
payables” (Note 15). |
|
(ii) |
Information on significant investees |
|
Other
investees: |
|
Subsidiaries |
Jointly-controlled
investees |
Associates |
|
2020 |
2019 |
2020 |
2019 |
2020 |
2019 |
|
|
|
|
|
|
|
Cash and cash
equivalents |
139,172 |
4,611 |
12,174 |
37,267 |
1,615 |
2,087 |
Current assets |
1,432,951 |
636,457 |
239,756 |
265,219 |
5,883 |
6,702 |
Non-current
assets |
504,394 |
409,773 |
40,968 |
30,084 |
182 |
84 |
Current
liabilities |
936,767 |
550,908 |
28,661 |
42,975 |
486 |
1,159 |
Non-current
liabilities |
152,169 |
6,307 |
19,366 |
20,871 |
73 |
167 |
|
|
|
|
|
|
|
Net revenue |
354,506 |
57,038 |
40,601 |
63,551 |
30 |
264 |
Operating
costs |
(256,353) |
(37,503) |
(18,545) |
(45,014) |
- |
- |
Depreciation and
amortization |
(885) |
(1,294) |
(5) |
(21) |
- |
- |
Finance income
(cost) |
(10,544) |
(657) |
(273) |
670 |
12 |
312 |
Income tax and social
contribution |
(2,338) |
(1,603) |
(1,182) |
(1,883) |
(14) |
(94) |
Profit or loss from
continuing operations |
65,639 |
53,117 |
10,594 |
10,668 |
46 |
1,626 |
|
(iii) |
Change in investments |
|
|
Company |
Consolidated |
|
|
|
|
Balance as
of December 31, 2019 |
|
681,645 |
138,802 |
Income from
equity method investments |
|
66,494 |
596 |
Capital
contribution (reduction) |
|
(1,111) |
92 |
Dividends
receivable |
|
(5,005) |
(5,005) |
Goodwill
arising from acquisition of subsidiaries (Note 9.1.1) |
|
166,028 |
166,028 |
Acquisition of
subsidiaries (Note 9.1.1) |
|
160,032 |
- |
Acquisition of
subsidiaries of Upcon (a) |
|
76,074 |
- |
Merger of
subsidiaries (b) |
|
55,757 |
- |
Other
investments |
|
(231) |
6,899 |
Balance as
of December 31, 2020 |
|
1,199,683 |
307,412 |
(a) Amount related to the
acquisition of shares in SPEs controlled by Upcon S.A., which is
fully controlled by Gafisa S.A.
(b) Amount related to the
assignment of shares in SPEs controlled by Gafisa S.A., to SPE 80
Emp. Imob. Ltda, which is fully controlled by the
Company.
Gafisa S.A.
Notes to the financial
statements--Continued
December 31, 2020
(Amounts in thousands of
Brazilian Reais, except as otherwise stated)
|
|
9. Investments--Continued
|
9.1 |
Investments in ownership interests--Continued |
9.1.1 Business combination
(i)
Acquisition
Upcon S.A.
On September 23, 2020, the Company disclosed the completion of the
acquisition of the totality of Upcon S.A.’s shares, settled with
the Company’s shares. Such transaction gave rise to a goodwill in
the amount of R$130,063, for which the Company commissioned a study
from a company specialized in determining Purchase Price Allocation
(PPA) for allocation of goodwill over a period of up to one year,
according to CPC 15(R1) - Business Combinations.
The following table shows the determination of the acquisition
cost, pursuant to CVM Resolution 665/11:
|
|
Acquisition
cost |
252,895 |
Acquired
net assets |
122,252 |
Goodwill
not allocated |
130,643 |
(ii)
Acquisition
of Calçada S.A.’s ventures
On November 16, 2020, the Company disclosed the completion of the
acquisition of the totality of four ventures from Calçada S.A.,
settled through shares of the Company and financial disbursement.
Such transaction gave rise to a total net goodwill in the amount of
R$35,385, for which the Company commissioned a study from a company
specialized in determining Purchase Price Allocation (PPA) for
allocation of goodwill over a period of up to one year, according
to CPC 15(R1) - Business Combinations.
The following table shows the determination of the acquisition
cost, pursuant to CVM Resolution 665/11:
|
|
Acquisition
cost |
73,165 |
Acquired
net assets |
37,780 |
Goodwill
not allocated |
35,385 |
Gafisa S.A.
Notes to the financial
statements--Continued
December 31, 2020
(Amounts in thousands of
Brazilian Reais, except as otherwise stated)
|
|
9. Investments--Continued
As
mentioned in Note 1, in the year of 2020 the Company created a new
business unit, Gafisa Propriedades, for carrying out the management
of real estate that are completed and of third parties. In this
context, as of December 31, 2020 the investment properties of this
new business unit comprise commercial properties of ventures
located in the state of São Paulo and Rio de Janeiro and acquired
of Gafisa S.A. and subsidiaries. These properties were initially
recognized at cost and will be measured at fair value in subsequent
years.
The Company does not have restriction to the capacity of
realization of its investment property or for repairs, maintenance
or improvements.
|
Consolidated |
Balance as
of December 31, 2019 |
- |
Additions of
commercial properties: |
|
Rio de
Janeiro |
73,229 |
São
Paulo |
45,890 |
Balance as
of December 31, 2020 |
119,119 |
|
10. |
Property and equipment |
|
|
Company |
|
|
|
Description |
2019 |
Additions |
Write-offs |
100%
depreciated items |
2020 |
2019 |
Additions |
Write-offs |
Additions Upcon
|
100%
depreciated items |
2020 |
Cost |
|
|
|
|
|
|
|
|
|
|
|
Hardware |
8,922 |
- |
- |
(4,918) |
4,004 |
9,111 |
- |
- |
- |
(4,946) |
4,165 |
Leasehold
improvements and installations |
785 |
2,655
|
(1,389)
|
-
|
2,051
|
771 |
2,655
|
(1,389)
|
9
|
-
|
2,046
|
Furniture and
fixtures |
637 |
- |
- |
- |
637 |
741 |
- |
- |
122 |
- |
863 |
Machinery and
equipment |
2,561 |
- |
- |
(2,528) |
33 |
2,561 |
- |
- |
22 |
(2,528) |
55 |
Right-of-use
assets |
3,235 |
1,039 |
617 |
- |
4,891 |
3,235 |
1,039 |
617 |
726 |
- |
5,617 |
Sales
stands |
5,794 |
779 |
(2,188) |
- |
4,385 |
11,638 |
8,666 |
(3.018) |
7,904 |
- |
25,190 |
|
21,934 |
4,473 |
(2,960) |
(7,446) |
16,001 |
28,057 |
12,360 |
(3,790) |
8,783 |
(7,474) |
37,936 |
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated
depreciation |
|
|
|
|
|
|
|
|
|
|
|
Hardware |
(3,826) |
(2,333) |
- |
4,918 |
(1,241) |
(3,905) |
(2,372) |
- |
- |
4,946 |
(1,331) |
Leasehold
improvements and installations |
(782) |
(399)
|
1,984
|
-
|
803
|
(737) |
(406)
|
1,984
|
(7)
|
-
|
834
|
Furniture and
fixtures |
(511) |
(64) |
- |
- |
(575) |
(604) |
(66) |
- |
(78) |
- |
(748) |
Machinery and
equipment |
(2,315) |
(240) |
- |
2,528 |
(27) |
(2,315) |
(240) |
- |
(8) |
2,528 |
(35) |
Right-of-use
assets |
(1,711) |
(689) |
- |
- |
(2,400) |
(1,711) |
(688) |
- |
(714) |
- |
(3,113) |
Sales
stands |
(642) |
- |
- |
- |
(642) |
(4,626) |
(1,386) |
826 |
(3,176) |
- |
(8,362) |
|
(9,787) |
(3,725) |
1,984 |
7,446 |
(4,082) |
(13,898) |
(5,158) |
2,810 |
(3,983) |
7,474 |
(12,755) |
|
|
|
|
|
|
|
|
|
|
|
|
Total property
and equipment |
12,147 |
748 |
(976) |
- |
11,919 |
14,159 |
7,202 |
(980) |
4,800 |
- |
25,181 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The
following useful lives and rates are used for calculating
depreciation:
|
Useful
life |
Average
annual depreciation rate - % |
Leasehold improvements and
installations |
4
years |
25 |
Furniture and
fixtures |
10
years |
10 |
Hardware |
5
years |
20 |
Machinery and
equipment |
10
years |
10 |
Sales stands |
1
year |
100 |
The residual value, useful life, and depreciation methods are
reviewed at the end of each year; no change having been made in
relation to the information for the prior year.
Property and equipment are subject to periodic assessments of
impairment. As of December 31, 2020 and 2019 there was no
indication of impairment of property and equipment.
Gafisa S.A.
Notes to the financial
statements--Continued
December 31, 2020
(Amounts in thousands of
Brazilian Reais, except as otherwise stated)
|
|
|
|
|
Company |
|
2019 |
|
|
|
|
2020 |
|
Balance |
Additions |
Write-offs |
Amortizations |
100%
amortized items |
Balance |
|
|
|
|
|
|
|
Software –
Cost |
15,953 |
42 |
(2,162) |
- |
(3,514) |
10,319 |
Software –
Depreciation |
(9,401) |
- |
1,405 |
(2,804) |
3,514 |
(7,286) |
Other |
- |
1,505 |
- |
(94) |
- |
1,411 |
Total intangible
assets |
6,552 |
1,547 |
(757) |
(2,898) |
- |
4,444 |
|
|
|
|
|
|
|
Consolidated |
|
2019 |
|
|
|
|
2020 |
|
Balance |
Additions |
Write-offs |
Amortizations |
100%
amortized items |
Balance |
|
|
|
|
|
|
|
Software –
Cost |
17,353 |
42 |
(3,190) |
- |
(3,514) |
10,691 |
Software –
Depreciation |
(10,269) |
- |
2,209 |
(3,026) |
3,514 |
(7,572) |
Other |
- |
1,505 |
- |
(94) |
- |
1,411 |
Total intangible
assets |
7,084 |
1,547 |
(981) |
(3,120) |
- |
4,530 |
|
|
|
|
|
|
|
Other intangible assets comprise expenditures on the acquisition
and implementation of information systems and software licenses,
amortized over the average term of five years (20% per year).
As of December 31, 2020, the test of recovery of the intangible
assets of the Company resulted in the need for recognition of a
provision for loss on realization (impairment) in the amount of
R$981 (R$536 in 2019), related to the Company’s software.
|
|
|
Company |
Consolidated |
Type |
Maturity |
Annual
interest rate |
2020 |
2019 |
2020 |
2019 |
|
|
|
|
|
|
|
National
Housing System - SFH /SFI (i) |
May 2019 to July
2025 |
7.00% to 14.20% + TR
13.66% and 143% of CDI
|
341,495
|
421,382 |
389,258 |
456,247 |
Certificate of Bank Credit (CCB) (ii)
|
March 2021 to October 2025
|
Fixed 16.77%
3.5%/ 3.70%/ 4.25%/ 6%+CDI
|
48,954
|
55,022
|
257,123
|
55,022
|
Other
transactions |
|
|
10,344 |
14,272 |
24,093 |
21,884 |
|
|
|
|
|
|
Total loans and
financing (Note 20.i.d, 20.ii.a and 20.iii) |
400,793 |
490,676 |
670,474 |
533,153 |
|
|
|
|
|
|
|
Total
current |
|
|
291,270 |
383,647 |
332,447 |
426,124 |
Non-current |
|
|
109,523 |
107,029 |
338,027 |
107,029 |
|
(i) |
The SFH financing is
used for covering costs related to the development of real estate
ventures of the Company and its subsidiaries, and backed by secured
guarantee by the first-grade mortgage of real estate ventures and
the fiduciary assignment or pledge of receivables. |
|
(ii) |
In the year ended
December 31, 2020, the Company made payments totaling R$293,029, of
which R$274,237 related to principal and R$18,793 related to the
interest payable. Additionally, during the year, the Company
entered into CCB transactions in the total amount of R$195,000,
with final maturity between October 2023 and November
2025. |
|
· |
CDI - Interbank
Deposit Certificates; |
Gafisa S.A.
Notes to the financial
statements--Continued
December 31, 2020
(Amounts in thousands of
Brazilian Reais, except as otherwise stated)
|
|
12. Loans and financing--Continued
The current and non-current
portions have the following maturities:
|
Company |
Consolidated |
Maturity |
2020 |
2019 |
2020 |
2019 |
|
|
|
|
|
2020 |
- |
383,647 |
- |
426,124 |
2021 |
291,270 |
103,269 |
332,447 |
103,269 |
2022 |
11,560 |
3,760 |
27,664 |
3,760 |
2023 |
7,800 |
- |
73,106 |
- |
2024 |
7,800 |
- |
7,800 |
- |
2025 |
82,363 |
- |
229,457 |
- |
|
400,793 |
490,676 |
670,474 |
533,153 |
The Company and its subsidiaries have restrictive covenants under
certain loans and financing that limit their ability to perform
certain actions, such as issuing debt, and that could require the
acceleration or refinancing of loans if the Company does not
fulfill certain restrictive covenants.
The ratios and minimum and maximum amounts required under
restrictive covenants for loan and financing transactions are as
follows:
|
2020 |
2019 |
|
|
|
|
|
|
Loans and
financing |
|
|
Total accounts
receivable(1) plus inventories required to be below zero
or 2.0 times over venture debt(2) |
7.35 times |
4.52 times |
Total accounts
receivable(1) plus inventories of completed units
required to be below zero or 2.0 times over net debt less venture
debt(2) |
(34.63) times |
(9.04) times |
Total debt, less venture
debt, less cash and cash equivalents and short-term
investments(3), cannot exceed 75% of equity plus
non-controlling interests |
-2.03% |
-15.81% |
Total
receivables(1) plus unrecognized income plus total
inventories of completed units required to be 1.5 time over the net
debt plus payable for purchase of properties plus unrecognized
cost |
2.52 times |
3.79 times |
|
|
|
|
(1) |
Total receivables, whenever mentioned,
refer to the amount reflected in the Statement of Financial
Position plus the amount not shown in the Statement of Financial
Position. |
|
(2) |
Venture debt and secured guarantee
debt refer to SFH debts, defined as the sum of all disbursed
borrowing contracts which funds were provided by the
SFH. |
|
(3) |
Cash and cash equivalents and
short-term investments refer to cash and cash equivalents and
marketable securities. |
Finance costs of loans, financing and debentures (Note 13) are
capitalized at the cost of each venture and land, according to the
use of funds, and recognized in profit or loss for the year,
according to the criteria for revenue recognition. The average
capitalization rate used in the determination of costs of loans
eligible to capitalization was 8.93% as of December 31, 2020
(10.84% in 2019).
The following table shows the summary of finance costs and charges
and the capitalized portion in the line item properties for
sale.
|
Company |
Consolidated |
|
2020 |
2019 |
2020 |
2019 |
|
|
|
|
|
Total
financial charges for the year |
80,081 |
88,230 |
95,116 |
89,737 |
Capitalized
financial charges (Note 30) |
(18,819) |
(21,179) |
(35,516) |
(30,358) |
Subtotal (Note
24) |
61,262 |
67,051 |
59,600 |
59,379 |
|
|
|
|
|
Financial
charges included in “Properties for sale”: |
|
|
|
|
|
|
|
|
|
Opening
balance |
193,798 |
211,465 |
206,935 |
223,807 |
Capitalized
financial charges |
18,819 |
21,179 |
35,516 |
30,358 |
Financial
charges related to cancelled land sales contract |
(3,840) |
(8,955) |
(3,840) |
(8,955) |
Charges
recognized in profit or loss (Note 23) |
(62,195) |
(29,891) |
(79,719) |
(38,275) |
Balance
acquired from subsidiaries |
- |
- |
14,336 |
- |
Closing
balance (Note 6) |
146,582 |
193,798 |
173,228 |
206,935 |
|
|
|
|
|
The recorded amount of properties for sale offered as guarantee for
loans, financing and debentures is R$307,233 (R$421,120 in
2019).
Gafisa S.A.
Notes to the financial
statements--Continued
December 31, 2020
(Amounts in thousands of
Brazilian Reais, except as otherwise stated)
|
|
|
|
|
|
Company |
Consolidated |
Program/placements |
Principal
- R$ |
Annual
interest |
Final
maturity |
2020 |
2019 |
2020 |
2019 |
|
|
|
|
|
|