EX-99.3 4 dp211019_ex9903.htm EXHIBIT 99.3

 

Exhibit 99.3

 

 

Vinci Partners Investments Ltd.

 

Interim Financial Statements as of March 31, 2024

 

 

 

Vinci Partners Investments Ltd.

 

Consolidated balance sheets

All amounts in thousands of reais unless otherwise stated 

Assets  Note  03/31/2024  12/31/2023
          
Current assets               
Cash and cash equivalents   5(c)   531,988    660,305 
Cash and bank deposits   5(c)   45,738    15,896 
Financial instruments at fair value through profit or loss   5(c)   85,649    173,300 
    Financial instruments at amortized cost   5(c)   400,601    471,109 
Financial instruments at fair value through profit or loss   5(d)   1,221,642    1,168,355 
Accounts receivable   5(a)   89,701    101,523 
Sub-leases receivable   10    3,601    4,071 
Taxes recoverable        1,630    2,219 
Other assets   6    25,169    19,109 
Total current assets        1,873,731    1,955,582 
                
Non-current assets               
Financial instruments at fair value through profit or loss   5(c)   57,965    7,146 
Accounts receivable   5(a)   16,412    16,638 
Sub-leases receivable   10    1,079    1,467 
Taxes recoverable        1,139    325 
Deferred taxes   20    16,395    13,487 
Other assets   6    19,556    19,427 
         112,546    58,490 
                
Property and equipment   8    11,924    12,591 
Right of use – Leases   10    55,917    58,308 
Intangible assets   9    215,527    214,748 
Total non-current assets        395,914    344,137 
                
Total assets        2,269,645    2,299,719 

 

The accompanying notes are an integral part of these interim consolidated financial statements.

 

F-2

Vinci Partners Investments Ltd.

 

Consolidated balance sheets

All amounts in thousands of reais unless otherwise stated 

Liabilities and equity  Note  03/31/2024  12/31/2023
          
Current liabilities               
Trade payables        348    1,869 
Deferred revenue   25    10,419    - 
Leases   10 and 5(e)    25,104    24,381 
Accounts payable   11    6,052    6,020 
Labor and social security obligations   12    27,325    101,506 
Loans and obligations   14    78,138    76,722 
Taxes and contributions payable   13    18,618    24,853 
Total current liabilities        166,004    235,351 
                
Non-current liabilities               
Leases   10 and 5(e)    43,188    48,431 
Labor and social security obligations   12    6,784    5,357 
Loans and obligations   14    554,452    540,369 
Deferred taxes   20    4,303    3,883 
Retirement plans liabilities   15    144,782    85,554 
Total non-current liabilities        753,509    683,594 
                
Total liabilities        919,513    918,946 
                
Equity   16           
Share capital        15    15 
Additional paid-in capital        1,408,438    1,408,438 
Treasury shares   16(f)   (201,165)   (172,863)
Retained earnings        104,244    111,444 
Other reserves        37,185    31,876 
         1,348,717    1,378,910 
                
Non-controlling interests in the equity of subsidiaries   7(b)   1,415    1,864 
                
Total equity        1,350,132    1,380,774 
                
Total liabilities and equity        2,269,645    2,299,719 

 

The accompanying notes are an integral part of these interim consolidated financial statements.

 

F-3

Vinci Partners Investments Ltd.

 

Interim consolidated statement of income 

For the three-month period ended March 31 

All amounts in thousands of reais unless otherwise stated

 

Statements of Income  Note  03/31/2024  03/31/2023
          
Net revenue from services rendered   17    109,087    102,308 
                
General and administrative expenses   18    (61,658)   (54,130)
                
Operating profit        47,429    48,178 
                
Finance income   19    32,611    4,253 
Finance expenses   19    (23,948)   (6,844)
                
Finance profit, net        8,663    (2,591)
                
Profit before income taxes        56,092    45,587 
                
Income taxes   20    (10,384)   (12,881)
                
Profit for the year        45,708    32,706 
                
Attributable to the shareholders of the parent company        46,157    32,737 
Attributable to non-controlling interests        (449)   (31)
                
Basic earnings per share in Brazilian Reais   16(g)   0.84    0.58 
Diluted earnings per share in Brazilian Reais   16(g)   0.80    0.57 

 

The accompanying notes are an integral part of these interim consolidated financial statements.

 

F-4

Vinci Partners Investments Ltd.

 

Interim consolidated statement of comprehensive income

For the three-month period ended March 31 

All amounts in thousands of reais unless otherwise stated

 

   03/31/2024  03/31/2023
       
Profit for the year   45,708    32,706 
           
Other comprehensive income          
Items that may be reclassified to profit or loss:          
Foreign exchange variance of investees          
Vinci Capital Partners GP Limited   4    (3)
Vinci USA LLC   947    (869)
Vinci Capital Partners F III GP Limited   22    (22)
GGN GP LLC   2    (3)
VICC Infra GP LLC   11    (4)
Vinci Capital Partners IV GP LLC   58    (48)
VICC Infra GP (Lux), S.A.R.L.   (14)   - 
           
Total comprehensive income for the year   46,738    31,757 
           
Attributable to:          
Shareholders of the parent company   47,187    31,788 
Non-controlling interests   (449)   (31)
           
    46,738    31,757 

 

The accompanying notes are an integral part of these interim consolidated financial statements.

 

F-5

Vinci Partners Investments Ltd.

 

Interim consolidated statement of changes in equity 

For the three-month period ended March 31 

All amounts in thousands of reais unless otherwise stated

 

  

Share

capital

 

Additional

Paid-in capital

 

Retained

earnings

 

Other

reserves

 

Treasury

shares

  Total 

Non-controlling

interests

 

Total

equity

                         
At January 01, 2023   15    1,382,038    81,310    24,149    (114,978)   1,372,534    3,013    1,375,547 
                                         
Profit for the year   -    -    32,737    -    -    32,737    (31)   32,706 
Other comprehensive income:                                        
   Foreign exchange variation of investee located abroad   -    -    -    (949)   -    (949)   -    (949)
Share based payments   -    -    -    1,986    -    1,986    -    1,986 
Treasury quotas bought   -    -    -    -    (17,988)   (17,988)   -    (17,988)
Allocation of profit:                                        
Dividends   -    -    (49,015)   -    -    (49,015)   -    (49,015)
                                         
                                         
At March 31, 2023   15    1,382,038    65,032    25,186    (132,966)   1,339,305    2,982    1,342,287 
                                         
At January 01, 2024   15    1,408,438    111,444    31,876    (172,863)   1,378,910    1,864    1,380,774 
                                         
Profit for the year   -    -    46,157    -    -    46,157    (449)   45,708 
Other comprehensive income:                                        
   Foreign exchange variation of investee located abroad   -    -    -    1,030    -    1,030    -    1,030 
Share based payments   -    -    -    4,279    -    4,279    -    4,279 
Treasury shares bought, net of shares sold   -    -    -    -    (28,302)   (28,302)   -    (28,302)
Allocation of profit:                                        
Dividends   -    -    (53,357)   -    -    (53,357)   -    (53,357)
                                         
At March 31, 2024   15    1,408,438    104,244    37,185    (201,165)   1,348,717    1,415    1,350,132 

 

The accompanying notes are an integral part of these interim consolidated financial statements.

 

F-6

Vinci Partners Investments Ltd.

 

Interim consolidated statements of cash flows

For the three-month period ended March 31 

All amounts in thousands of reais unless otherwise stated

 

   Notes  03/31/2024  03/31/2023
Cash flows from operating activities               
                
Profit before taxation        56,092    45,587 
Adjustments to reconcile net income to cash flows from operations:               
Depreciation and amortization   18    5,464    4,555 
Investment income of financial instruments at fair value through profit or loss        34,844    3,173 
Net foreign exchange on liabilities at amortized cost   14(i)   15,576    - 
Interest expense on loans and obligations   19    15,010    3,934 
Loss/(gain) on remeasurement of contingent consideration   19    5,756    (4,051)
Share based payments   18    6,148    2,107 
Financial result on lease agreements   19    2,037    2,555 
         140,927    57,860 
Changes in assets and liabilities               
Accounts receivables        12,048    (2,494)
Taxes recoverable        (225)   (568)
Other assets        (6,188)   (3,552)
Trade payables        (1,521)   (726)
Deferred revenue        10,419    17,219 
Accounts payable        32    (85)
Labor and social security obligations        (74,623)   (62,473)
Taxes and contributions payable        (4,847)   (419)
Contribution for retirements plans        58,000    - 
         (6,905)   (53,098)
                
Cash generated from operations        134,022    4,762 
Income tax paid        (15,417)   (18,219)
Net cash inflow from operating activities        118,605    (13,457)
                
Cash flows from investing activities               
Purchases of property and equipment and additions to intangible assets        (3,302)   (4,196)
Purchase of financial instruments at fair value through profit or loss        (383,265)   (13,338)
Sales of financial instruments at fair value through profit or loss        245,543    76,375 
                
Net cash (outflow) from investing activities        (141,024)   58,841 
                
Cash flows from financing activities               
    Interest payments of loans and obligations   14(ii)   (11,955)   (5,943)
    Principal payments of loans and obligations   14(ii)   (8,889)   - 
    Treasury shares acquisition paid, net of treasury shares sold   16(f)   (28,302)   (18,431)
    Lease payments, net of sublease received        (5,652)   (5,864)
    Dividends paid   16(e)   (53,228)   (48,474)
                
Net cash (outflow) from financing activities        (108,026)   (78,712)
                
Net increase in cash and cash equivalents        (130,445)   (33,328)
                
Cash and cash equivalents at the beginning of the year   5(c)   660,305    136,581 
                
Foreign exchange variation of cash and cash equivalents in subsidiary        2,128    (2,051)
                
Cash and cash equivalents at the end of the year   5(c)   531,988    101,202 

 

Non-cash financing activities

Dividends declared and not yet paid until March 31, 2024 and 2023 were R$ 3,791 (Note 11), respectively.

Consideration payable and contingent consideration (earn-out) as of March 31, 2024 and 2023 were 119,552 and 82,123 (Note 14), respectively. Vinci expects to pay the contingent consideration through its equity instruments. However, accordingly to IAS 32, the earn-out obligation was classified as a financial liability.

 

The accompanying notes are an integral part of these interim consolidated financial statements.

 

F-7

Vinci Partners Investments Ltd.

 

Notes to the interim consolidated financial statements

All amounts in thousands of reais unless otherwise stated

 

1Operations

 

Vinci Partners Investments Ltd. is an exempted company incorporated in the Cayman Islands (referred to herein as "Entity", "Group" or "Vinci"). The Group started its activities in September 2009. Its objective is to hold investments in the capital of other companies as partner (shareholder). The investees are specialized in rendering alternative investment management, asset allocation, corporate advisory services and retirement services.

 

The registered office of the Entity is at Harneys Fiduciary (Cayman) Limited, 4th Floor, Harbour Place, 103 South Church Street, P.O. Box 10240, Grand Cayman KY1-1002, Cayman Islands.

 

2Summary of significant accounting policies

 

2.1Basis of preparation and presentation

 

The unaudited interim condensed consolidated financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting as issued by the International Accounting Standards Board (“IASB”).

 

The unaudited interim condensed consolidated financial statements do not include all the information and disclosures required in the annual financial statements and should be read in conjunction with the Group’s annual consolidated financial statements as of December 31, 2023.

 

The accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period.

 

The unaudited interim condensed consolidated financial statements are presented in Brazilian reais (“R$”), and all amounts disclosed in the financial statements and notes have been rounded off to the nearest thousand currency units unless otherwise stated.

 

The issuance of these financial statements was authorized by the Entity's management on May 9, 2024.

 

(a)Interim consolidated financial statements

 

Vinci operates as an asset management firm. The Group focuses on private markets, public equities, corporate advisory, investment products and solutions, and retirement services, which comprise the main activity of the Group.

 

The Group controls an entity where the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity.

 

Also, the Entity holds interest in subsidiaries whose main purpose and activities are providing services that relate to the Entity’s activities. Therefore, the Entity consolidates these subsidiaries.

 

Ownership interest in subsidiaries on March 31, 2024 and December 31, 2023 are as follows:

 

F-8

Vinci Partners Investments Ltd.

 

Notes to the interim consolidated financial statements

All amounts in thousands of reais unless otherwise stated

 

   Interest - %
       
    03/31/2024    12/31/2023 
           
Subsidiaries          
Vinci Partners Investimentos Ltda.   100    100 
Vinci Assessoria financeira Ltda. (1)   100    100 
Vinci Equities Gestora de Recursos Ltda. (1)   100    100 
Vinci Gestora de Recursos Ltda. (1)   100    100 
Vinci Capital Gestora de Recursos Ltda. (1)   100    100 
Vinci Soluções de Investimentos Ltda.   100    100 
Vinci Real Estate Gestora de Recursos Ltda. (1)   100    100 
Vinci Capital Partners GP Limited.   100    100 
Vinci Partners USA LLC   100    100 
Vinci GGN Gestão de Recursos Ltda. (1)   100    100 
Vinci Infraestrutura Gestora de Recursos Ltda.   100    100 
Vinci Capital Partners GP III Limited.   100    100 
GGN GP LLC   100    100 
Vinci APM Ltda. (1)   100    100 
Vinci Monalisa FIM Crédito Privado IE (2)   100    100 
Vinci Asset Allocation Ltda.   75    75 
VICC Infra GP LLC   100    100 
Vinci Capital Partners IV GP LLC   100    100 
Vinci Holding Securitária Ltda.   85    85 
Vinci Vida e Previdência S.A. (3)   85    85 
Vinci SPS Capital Gestão de Recursos Ltda. (4)   100    100 
VICC Infra GP (Lux), S.A.R.L.   100    100 
VINCI US RE Corporation (5)   98    - 

 

(1)Minority interest represents less than 0.001%.

(2)Under the terms of IFRS 10, the Entity does not consolidate its investment in Vinci Monalisa FIM Crédito Privado IE and measures at fair value through profit or loss in accordance with IFRS 9.

(3)Vinci has an indirect interest at Vinci Vida e Previdência of 85% through its subsidiary Vinci Holding Securitária Ltda., which holds 100% of ownership interest at Vinci Vida e Previdência. Vinci Vida e Previdência commenced its operations in April 2023.

(4)On 16 August 2022, Vinci Soluções de Investimentos Ltda. acquired 90% of the issued share capital of SPS Capital Gestão de Recursos Ltda. The acquisition gives to Vinci Soluções de Investimentos the right of 100% on the economic interest of SPS Gestão de Recursos Ltda.

(5)Under the terms of IFRS 10, the Entity does not consolidate its investment in Vinci US RE Corporation and measures at fair value through profit or loss in accordance with IFRS 9.

 

Subsidiaries are all entities (including structured entities) over which the Group has control. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases.

 

Inter-company transactions, balances and unrealized gains on transactions between Group companies are eliminated. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the transferred asset. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.

 

Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated statement of profit or loss, consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated balance sheet respectively.

 

The Group treats transactions with non-controlling interests that do not result in a loss of control as transactions with equity

 

F-9

Vinci Partners Investments Ltd.

 

Notes to the interim consolidated financial statements

All amounts in thousands of reais unless otherwise stated

 

owners of the Group. A change in ownership interest results in an adjustment between the carrying amounts of the controlling and non-controlling interests to reflect their relative interests in the subsidiary. Any difference between the amount of the adjustment to non-controlling interests and any consideration paid or received is recognized in another reserve within equity attributable to owners of Entity.

 

When the Group ceases to consolidate an investment or account for it under equity method because of a loss of control, joint control or significant influence, any retained interest in the entity is remeasured to its fair value, with the change in carrying amount recognized in profit or loss. This fair value becomes the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previously recognized in other comprehensive income in respect of that entity are accounted for as if the group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognized in other comprehensive income are reclassified to profit or loss.

 

2.2Segment reporting

 

In 2021, the members of the Board of Directors of Vinci Partners Investments Ltd were appointed. Under the supervision of the Board of Directors, the CEO is responsible for the decision-making process related to executive themes, resources allocation and strategic decisions of Vinci.

 

The strategic decisions of the Group comprise five distinct business segments: (i) Private market strategies, (ii) Public equities, (iii) Investment products and solutions; (iv) Corporate advisory and (v) Vinci retirement services (Note 20).

 

Strategies were sorted out within business segments following technical and strategic similarities among funds’ attributes, such as management and performance fee structures, liquidity constraints, targeted returns and investor profile.

 

3Accounting estimates and judgments

 

The Entity makes estimates and assumptions concerning the future, based on historical experience and other factors, including expectations of future events. The resulting accounting estimates will, by definition, seldom equal the related actual results. The main estimations and assumptions made by the Entity is included as follow:

 

Allowance of expected credit losses of accounts receivable.

Provision for profit sharing.

Consolidation of subsidiaries.

Fair value measurement of financial assets.

Provision for contingent liabilities.

Impairment for goodwill and other intangible assets.

Fair value measurement of contingent consideration.

Fair value of share-based payments.

Financial evaluation of compound instruments.

 

4Financial risk management

 

The main risks related to the financial instruments are credit risk, market risk, and liquidity risk, as defined below. The management of such risks involves various levels in the Entity and comprehends a number of policies and strategies. The Group's risk management focuses on the unpredictability of financial markets and seeks to mitigate potential adverse impacts on the Group's financial performance.

 

F-10

Vinci Partners Investments Ltd.

 

Notes to the interim consolidated financial statements

All amounts in thousands of reais unless otherwise stated

 

4.1Financial risk factors

 

This note explains the Group's exposure to financial risks and how these risks could affect the Group's future financial performance. Current year profit and loss information has been included where relevant to add further context.

 

The Group's risk management is predominantly controlled by a risk assessment department under process and controls approved by the management. The management provides written process and controls for overall risk management, as well as policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity.

 

(a)Credit risk

 

Credit risk arises from cash and cash equivalents, contractual cash flows of debt investments carried at amortized cost, at fair value through profit or loss (FVTPL), and deposits with banks and financial institutions, as well as credit exposures to wholesale and retail customers, including outstanding receivables.

 

(i) Risk management

 

As of March 31, 2024, and 2023 the expected credit losses are considered immaterial due to the short maturities of the deposits and the credit quality of the main counterparty, which have a credit rating AAA evaluated by Fitch Ratings. The Entity has not suffered any losses from cash and cash equivalents since inception. Vinci's treasury review expected credit losses on a regular basis.

 

(ii) Impairment of financial assets

 

The Group has the following types of financial assets that are subject to the expected credit loss model:

 

Accounts receivable.

Debt investments carried at amortized cost.

 

While cash and cash equivalents are also subject to the impairment requirements of IFRS 9, the expected impairment loss was immaterial.

 

F-11

Vinci Partners Investments Ltd.

 

Notes to the interim consolidated financial statements

All amounts in thousands of reais unless otherwise stated

 

(b)Market risk

 

(i) Foreign exchange risk

 

At the reporting date, the carrying amount value of the Group’s financial assets and liabilities exposed to US Dollars and Euros were as follows:

 

Balance sheet  03/31/2024  12/31/2023
       
Cash and cash equivalents   453,194    486,977 
Financial instruments at fair value through profit or loss   -    606 
Accounts receivable   10,890    5,927 
Other receivables   3,410    2,381 
Current assets   467,494    495,891 
           
Financial instruments at fair value through profit or loss   35,020    - 
Other receivables   -    (29)
Leases, property and equipment   2,561    2,684 
Non-current assets   37,581    2,655 
           
Trade payables   307    589 
Deferred revenue   2,398    - 
Loans and obligations   9,992    6,993 
Labor and social security obligations   311    5,485 
Taxes and contributions payable   3    - 
Current liabilities   13,011    13,067 
           
Other payables   250    242 
Loans and obligations   441,358    424,340 
Lease   733    940 
Non-current liabilities   442,341    425,522 
           
Net Equity exposed to US Dollars   48,242    59,957 
Net Equity exposed to Euros   1,481    - 

 

The aggregate net foreign exchange gains/losses recognized in profit or loss were:

 

Net foreign exchange result  03/31/2024  03/31/2023
       
Financial expense   (614)   (155)
           
Net foreign exchange result, net   (614)   (155)

 

The Group operates internationally and is exposed to foreign exchange risk, exclusively the US dollar.

 

Foreign exchange risk arises from future commercial transactions and recognized assets and liabilities denominated in a currency that is not the functional currency of the Group.

 

(ii) Interest rate risk

 

The Group's profit or loss is sensitive to higher/lower interest income from cash equivalents and fixed income funds as a result of changes in interest rates.

 

F-12

Vinci Partners Investments Ltd.

 

Notes to the interim consolidated financial statements

All amounts in thousands of reais unless otherwise stated

 

(iii) Price risk

 

The Group's exposure to investment securities price risk arises from investments held by the group and classified in the balance sheet at fair value through profit or loss (note 5).

 

To manage its price risk arising from investments in investment securities, the Group diversifies its portfolio. Diversification of the portfolio is done in accordance with the limits set by the Group.

 

The majority of the Group's financial investments that are exposed to significant price risk are the private equity investments and investments held by Monalisa FIM. Note 5(d) demonstrates the sensitivity analyses of impact for the assets held by the Group.

 

(c)Liquidity risk

 

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due and to close out market positions. At the end of the reporting period the Group held bank deposits, certificates of deposits and US treasury bills of R$ 531,988 (12/31/2023 – R$ 189,196) that are expected to readily generate cash inflows for managing liquidity risk.

 

Net debt reconciliation

 

This section sets out an analysis of net debt and the movements in net debt for each of the years presented.

 

   03/31/2024  12/31/2023
Cash and cash equivalents   531,988    660,305 
Financial instruments at fair value through profit or loss (i)   1,221,642    1,168,355 
Trade payables   (348)   (1,869)
Labor and social security obligations   (34,109)   (106,863)
Accounts payable   (6,052)   (6,020)
Lease liabilities   (68,292)   (72,812)
Convertible preferred shares   (451,350)   (431,334)
Commercial notes   (61,688)   (73,189)
Consideration payable   (49,425)   (48,199)
Contingent consideration   (70,127)   (64,370)
Retirement plans liabilities   (144,782)   (85,554)
Net debt   867,457    938,450 

 

(i)Comprised of liquid and illiquid investments. Liquid investments are current assets that are traded in an active market. Illiquid investments are comprised of assets that trade infrequently.

 

F-13

Vinci Partners Investments Ltd.

 

Notes to the interim consolidated financial statements

All amounts in thousands of reais unless otherwise stated

 

   Financial liabilities  Other assets
   Payables  Loans and obligations  Retirement plans  Lease liabilities  Cash and cash equivalents  Financial instruments at fair value through profit or loss
Net debt as at December 31, 2022   (99,275)   (175,290)   -    (86,211)   136,581    1,243,764 
                               
Cash flow and dividends provision   (15,477)   20,864    (82,734)   25,830    522,328    (172,629)
Fair value adjustment   -    (28,686)   (2,820)   (2,737)   1,396    97,220 
Addition and finance expenses accrual   -    (450,493)        -    -    - 
Foreign exchange adjustments   -    16,513         -    -    - 
Other changes (i)   -    -         (9,694)   -    - 
December 31, 2023   (114,752)   (617,092)   (85,554)   (72,812)   660,305    1,168,355 
                               
Cash flow and dividends provision   74,243    20,845    (58,000)   6,764    (138,042)   29,966 
Fair value adjustment   -    (6,983)   (1,228)   -    8,820    23,321 
Addition and finance expenses accrual   -    (13,784)   -    (2,216)   -    - 
Foreign exchange adjustments   -    (15,576)   -    -    905    - 
Other changes (i)   -    -    -    (28)   -    - 
March 31, 2024   (40,509)   (632,590)   (144,782)   (68,292)   531,988    1,221,642 

 

(i) Other changes include non-cash movements, including Cumulative Translation Adjustments (“CTA”) which are being presented as in other comprehensive income statements.

 

Maturities of financial liabilities

 

Except for the retirement plans liabilities, the tables below analyze the Group's financial liabilities into relevant maturity groupings based on their contractual maturities for significant financial liabilities.

 

Contractual maturities of
financial liabilities
at March 31, 2024
  Less than 1 year  Between 1 and 3 years  Over 3 years  Total  Carrying amount
                
Trade payables   (348)   -    -    (348)   (348)
Labor and social security obligations   (27,325)   (3,100)   (3,684)   (34,109)   (34,109)
Lease liabilities   (25,104)   (28,782)   (33,504)   (87,390)   (68,292)
Accounts payable   (6,052)   -    -    (6,052)   (6,052)
Loans and financing   (116,526)   (153,262)   (821,749)   (1,091,537)   (632,590)
Total   (175,355)   (185,144)   (858,937)   (1,219,436)   (741,391)

 

Contractual maturities of
financial liabilities
at December 31, 2023
  Less than 1 year  Between 1 and 3 years  Over 3 years  Total  Carrying amount
                
Trade payables   (1,869)   -    -    (1,869)   (1,869)
Labor and social security obligations   (101,505)   (2,458)   (2,900)   (106,863)   (106,863)
Lease liabilities   (24,381)   (32,786)   (36,017)   (93,184)   (72,812)
Accounts payable   (6,020)   -    -    (6,020)   (6,020)
Loans and financing   (114,390)   (182,178)   (783,572)   (1,080,140)   (617,092)
Total   (248,165)   (217,422)   (822,489)   (1,288,076)   (804,656)

F-14

Vinci Partners Investments Ltd.

 

Notes to the interim consolidated financial statements

All amounts in thousands of reais unless otherwise stated

 

(d)Sensitivity analysis

 

The Group monitors and evaluates the market risk related to its financial investments portfolio periodically to assess its volatility, through changes that can significantly impact its financial results. Considering a period of one day and the historical results over the past year, the following Value at Risk (VAR) parameters were used:

 

0.21% (or R$ 3.1 million) of the financial investment portfolio for a confidence interval of 95% on March 31, 2024 (0.26% or R$ 3.2 million on December 31, 2023).

0.36% (or R$ 5.2 million) of the financial investment portfolio for a confidence interval of 99% on March 31, 2024 (0.53% or R$ 6.8 million on December 31, 2023).

 

Additionally, the Group evaluated the financial investment portfolio on March 31, 2024 and December 31, 2023, through stress scenarios according to the main risk factors related to its investments, as presented in the table below:

 

         Financial Impact (**)
Risk Factor  Variation in   Stress Scenario (*)    03/31/2024    12/31/2023 
Current inflation  Inflation index   -100bps   11.9    12.3 
Exchange traded real estate funds  Share prices   -10%   (21.9)   (14.4)
Brazilian stock prices  Share prices   -10%   (5.4)   (9.3)
Fixed-rate offshore rates  US yield curve   -100bps   (44.4)   (34.9)
Foreign exchange rate  Foreign exchange rates   10%(***)   (0.9)   (0.4)
Domestic base overnight rate  Domestic base overnight rate   -100bps   (4.3)   (6.0)

 

(*) bps - basis point (1bps = 0,01%)

(**) In millions of Brazilian reais

(***) Brazilian reais devaluation against US Dollars

 

An equal change in the opposite direction of the stress scenario would have affected the financial investment portfolio by a similar amount, on the basis that all other variables remain constant.

 

5Financial instruments

 

This note provides information about the group's financial instruments, including:

 

-an overview of all financial instruments held by the Group

-specific information about each type of financial instrument

-accounting policies

-information about determining the fair value of the instruments, including judgements and estimation uncertainty involved.

 

The Group classifies its financial assets in the following measurement categories:

 

those measured at fair value or through profit or loss, and

those measured at amortized cost.

 

The classification depends on the entity's business model for managing the financial assets and the contractual terms of the cash flows.

 

F-15

Vinci Partners Investments Ltd.

 

Notes to the interim consolidated financial statements

All amounts in thousands of reais unless otherwise stated

 

For assets measured at fair value, gains and losses will be recorded in profit or loss.

 

Recognition and derecognition

 

Regular way purchases and sales of financial assets are recognized on trade date, being the date on which the group commits to purchase or sell the asset. Financial assets are derecognized when the rights to receive cash flows from the financial assets have expired or have been transferred and the group has transferred substantially all the risks and rewards of ownership.

 

Measurement

 

At initial recognition, the group measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss (FVPL), transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at FVPL are expensed in profit or loss.

 

The Group holds the following financial instruments:

 

Financial assets  Section  03/31/2024  12/31/2023
          
Accounts receivable   (a)    106,113    118,161 
Other financial assets at amortized cost   (b)    5,564    5,519 
Cash and cash equivalents   (c)    531,988    660,305 
Financial assets at fair value through profit or loss (FVPL)   (d)    1,279,607    1,175,501 
         1,923,272    1,959,486 
                
Financial liabilities               
                
Liabilities at amortized cost   (e)    40,509    114,752 
Lease liabilities   (e)    68,292    72,812 
Loans and financing   (e)    632,590    617,091 
         741,391    804,655 

 

The Group's exposure to risks associated with the financial instruments is discussed in Note 4. The maximum exposure to credit risk at the end of the reporting period is the carrying amount of each class of financial assets mentioned above.

 

a)Accounts receivable

 

Current assets  03/31/2024  12/31/2023
Accounts receivable from contracts with customers   89,851    101,673 
Loss allowance   (150)   (150)
           
Non-current assets          
Accounts receivable from contracts with customers   16,412    16,638 
    106,113    118,161 

 

Accounts receivables are recognized initially at the amount of consideration that is unconditional and are not submitted to any financial components. They are subsequently measured at amortized cost, less loss allowance.

 

Current accounts receivable are amounts due from customers for services performed in the ordinary course of business. They are generally due for settlement within 30 days and are therefore classified as current in its entirety. Due to the short-term nature of the current receivables, their carrying amount is considered to be the same as their fair value.

 

F-16

Vinci Partners Investments Ltd.

 

Notes to the interim consolidated financial statements

All amounts in thousands of reais unless otherwise stated

 

Non-current accounts receivable comprised by unrealized performance fees and other receivables. Unrealized performance fees are recognized when the management, with accumulated experience, estimate that it is highly probable that a significant reversal will not occur. Vinci expects the unrealized performance fees will be received during 2024. However, since its realization is subject to uncertainty, the balance is presented as a non-current receivable.

 

Monthly, the Entity evaluates the revenues and receipts for each customer (Funds). Additionally, on quarterly basis Vinci analyzes the outstanding balances to calculate expected credit losses and the exposure to credit risk from receivables are reviewed. Accounts receivable allowance for expected credit losses are presented in general and administrative expense.

 

The loss allowances for accounts receivable as of March 31, 2024 and December 31, 2023 reconcile to the opening loss allowances as follows:

 

   03/31/2024  12/31/2023
Opening loss allowance on January 1   (150)   (166)
Decrease in accounts receivable allowance recognized in profit or loss   -    16 
Closing loss allowance on December 31   (150)   (150)

 

Accounts receivables are written off when there is no reasonable expectation of recovery. Indicators that there is no reasonable expectation of recovery include, among others, the failure of a debtor to engage in a repayment plan with the group, and a failure to make contractual payments. The Entity has not written any amount of accounts receivable during 2024 and 2023. Subsequent recoveries of amounts previously written off are credited against the same line item.

 

b)Other financial assets at amortized cost

 

Financial assets at amortized cost refer to the following debt instruments:

 

   03/31/2024  12/31/2023
           
Employees loans (Note 6 (i))   5,564    5,519 

 

These amounts generally arise from transactions outside the usual operating activities of the group. Interest may be charged at commercial rates and collateral is not normally obtained.

 

All the financial assets at amortized cost are denominated in Brazilian currency units. As a result, there is no exposure to foreign currency risk. There is also no exposure to price risk as the investments will be held to maturity.

 

See note 6 for more details.

 

c)Cash and cash equivalents

 

   12/31/2023  12/31/2022
       
Cash and bank deposits   45,738    15,896 
Financial instruments at fair value through profit or loss (i)   85,649    173,300 
Financial instruments at amortized cost (ii)   400,601    471,109 
    531,988    660,305 

 

For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand, bank deposits held at financial institutions, and highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

 

F-17

Vinci Partners Investments Ltd.

 

Notes to the interim consolidated financial statements

All amounts in thousands of reais unless otherwise stated

 

(i) Comprises certificates of deposits issued by Banco Bradesco (credit rating AAA evaluated by Fitch Ratings) with an interest rate of 100.5% of CDI (interbank deposit rate). The certificates are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

 

(ii)Comprised of US Treasury Bills with maturity date in June 2024.

 

d)Financial assets at fair value through profit or loss

 

The group classifies the following financial assets at fair value through profit or loss (FVPL):

 

-Mutual funds;

-Private markets funds;

-Real Estate Investments

 

Financial assets measured at FVPL include the following categories:

 

   03/31/2024  12/31/2023
       
Current assets   1,221,642    1,168,355 
Mutual funds (i)   1,221,642    1,168,355 
           
Non-current assets   57,965    7,146 
Private markets funds (ii)   22,945    7,146 
Real Estate Investments (iii)   35,020    - 

 

The following table demonstrate the funds invested included in each category mentioned above.

 

(i) Mutual funds      
   03/31/2024  12/31/2023
       
Vinci Monalisa FIM Crédito Privado IE (3)   1,011,775    991,470 
Vinci Multiestratégia FIM   11,676    11,642 
Vinci International Master Portfolio SPC - Reflation SP   -    606 
Vinci Institucional FI RF Referenciado DI   46,853    62,687 
Vinci Reservas Técnicas FI RF DI   2,256    2,199 
Retirement services investment funds (1)   144,782    85,554 
FI Vinci Renda Fixa CP   4,300    14,197 
    1,221,642    1,168,355 

 

(1)These funds refer to the financial products as part of the Company's retirement plans services. See Note 15 for further information.

(2)Vinci US RE Corporation holds investments in real estate properties.

(3)Vinci Monalisa FIM Crédito Privado IE (“Vinci Monalisa”) is a mutual fund incorporated in Brazil and wholly owned by the Company. Vinci Monalisa’s balances are the following:

 

   03/31/2024  12/31/2023
Net Asset Value   1,011,775    991,470 
Real estate funds   240,604    234,245 
Mutual funds   531,235    535,430 
Private equity funds   147,902    136,810 
Other assets/liabilities   92,034    84,985 

F-18

Vinci Partners Investments Ltd.

 

Notes to the interim consolidated financial statements

All amounts in thousands of reais unless otherwise stated

 

The Vinci Monalisa’s portfolio is comprised of liquid and illiquid investee funds with different redemption criteria. Over 74% of its investments are liquid and may be redeemed and 26% are non-redeemable investments. The following tables demonstrate the funds invested by Vinci Monalisa:

 

Mutual funds

 

Vinci Monalisa holds investments in several mutual funds to seek profitability through investments in various classes of financial assets such as fixed income assets, Brazilian government bonds, public equities, derivatives financial instruments, investment funds and other short-term liquid securities. As of March 31, 2024 and December 31, 2023, Vinci Monalisa holds R$ 531,235 and R$ 535,430 of investments in mutual funds, respectively, which are distributed in the following classification:

 

   03/31/2024  12/31/2023
Mutual Funds’ classification          
Interest and foreign exchange (a)   86.07%   84.93%
Foreign investments (b)   4.91%   4.56%
Macro (c)   4.13%   3.96%
Specific strategy (d)   4.89%   6.55%
    100.00%   100.00%

 

(a)Funds that seek long-term returns via investments in fixed-income assets, admitting strategies that imply interest risk, price index risk and foreign currency risk.

(b)Funds that invest in financial assets abroad in a portion greater than 40% of their net asset values.

(c)Funds that operate in various asset classes (fixed income, variable income, foreign exchange, etc.), with investment strategies based on medium and long-term macroeconomic scenarios.

(d)Funds that adopt an investment strategy that involves specific risks, such as commodities, futures of index, etc.

 

Real Estate funds      
   03/31/2024  12/31/2023
       
Vinci Credit Securities FII (a)   71,884    70,049 
Vinci Imóveis Urbanos FII (b)   51,460    53,884 
Vinci Offices FII (c)   35,229    34,639 
Vinci Fulwood DL FII (d)   59,158    52,849 
Other real estate funds (e)   22,873    22,824 
    240,604    234,245 

 

(a) The fund invests in real estate receivable certificates, bonds and other real estate assets;

(b) The fund’s investment strategy is to acquire properties in the retail, general markets, health and education sectors located in large urban centers that, in the Manager's view, generate long-term value;

(c) The fund invests in controlling corporate buildings, mostly leased, which, in the Manager's view, generate value for the properties.

(d) The fund’s strategy is to provide its shareholders with profitability resulting from the sale of properties, as well as the eventual commercial exploitation of properties. The Fund may carry out renovations or improvements to properties with the aim of enhancing the returns arising from their commercial exploitation or eventual commercialization.

(e) Comprised of funds that allocate their capital in diversified portfolios of shares of real estate funds, real estate receivable certificates, bonds, securities and other real estate assets.

 

Private markets funds      
   03/31/2024  12/31/2023
       
Vinci Infra Água e Saneamento Strategy FIP – Infraestrutura (a)   50,740    50,698 
Vinci Crédito Infra Institucional Fundo Incentivado – Infraestrutura (b)   47,395    46,844 
Vinci Infra Coinvestimento I FIP - Infraestrutura (c)   10,323    10,290 
Vinci Impacto Ret IV FIP Multiestratégia   4,851    4,687 
Other funds   34,593    24,291 
Total private markets funds   147,902    136,810 
           

F-19

Vinci Partners Investments Ltd.

 

Notes to the interim consolidated financial statements

All amounts in thousands of reais unless otherwise stated

 

(a) The Fund's investment policy is the acquisition of shares, subscription bonuses, debentures convertible or not into shares, or other securities, convertible or exchangeable into shares issued by companies, publicly or privately held in the water sector and basic sanitation.

 

(b) The Fund aims to increase the value of its shares through the subscription or acquisition, on the primary or secondary market, predominantly of debentures issued by privately held companies, for the purpose of raising funds to implement projects relating to the implementation, expansion, maintenance, recovery, adaptation, or modernization of infrastructure projects.

 

(c) Fund focused on the acquisition of shares, share bonuses subscriptions, debentures convertible or not into shares, or other securities issued by publicly held, publicly traded or private corporations that develop new projects of infrastructure in the development sector and operations of electric power transmission lines, participating in the decision-making process of the investee, with effective influence. As of March 31, 2024 and December 31, 2023, the fund held investment in Água Vermelha Transmissora de Energia S.A.

 

(ii) Private markets      
   03/31/2024  12/31/2023
       
Vinci Capital Partners III Feeder FIP Multiestratégia   4,251    4,262 
Nordeste III FIP Multiestratégia   3,395    2,884 
Fundo Garantidor de Infraestrutura – FGIE – Class A   3,047    - 
Fundo Garantidor de Infraestrutura – FGIE – Class B   12,252    - 
Total Private markets   22,945    7,146 

 

(iii) Real Estate Investments      
   03/31/2024  12/31/2023
       
Vinci US RE Corporation (a)   35,020    - 
Total Real Estate Investments   35,020    - 

 

(a)In March 2024, Vinci invested in several properties through its subsidiary Vinci US RE Corporation. The investments are intended to develop real estate properties for capital appreciation through income or sale of the respective properties.

 

During the year, the following gains were recognized in profit or loss:

 

    
    03/31/2024    03/31/2023 
           
Fair value gains on investments at FVPL recognized in finance income   25,871    (111)

F-20

Vinci Partners Investments Ltd.

 

Notes to the interim consolidated financial statements

All amounts in thousands of reais unless otherwise stated

 

e)Financial liabilities

 

   03/31/2024  12/31/2023
       
Current   136,967    210,498 
Trade payables   348    1,869 
Labor and social security obligations (Note 12)   27,325    101,506 
Loans and obligations (Note 14)   78,138    76,722 
Lease liabilities   25,104    24,381 
Accounts payable (Note 11)   6,052    6,020 
           
Non-current   604,424    594,157 
Lease liabilities   43,188    48,431 
Labor and social security obligations (Note 12)   6,784    5,357 
Loans and obligations (Note 14)   554,452    540,369 
           
    741,391    804,655 

 

Fair value hierarchy

 

This section explains the judgments and estimates made in determining the fair values of the financial instruments that are recognized and measured at fair value through profit or loss in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the group has classified its financial instruments into the three levels prescribed under the accounting standards. An explanation of each level follows underneath the table.

 

   On March 31, 2024
Recurring fair value measurements  Level 1  Level 2  Level 3  Total
Financial Assets                    
Certificate of deposits   -    85,649    -    85,649 
Mutual funds   -    1,221,642    -    1,221,642 
Private equity funds   -    -    22,945    22,945 
Real Estate Investments   -    -    35,020    35,020 
Total Financial Assets   -    1,307,291    57,965    1,365,256 

 

   On December 31, 2023
Recurring fair value measurements  Level 1  Level 2  Level 3  Total
Financial Assets                    
Certificate of deposits   -    173,300    -    173,300 
Mutual funds   -    1,168,355    -    1,168,355 
Private equity funds   -    -    7,146    7,146 
Total Financial Assets   -    1,341,655    7,146    1,348,801 

 

Level 1: The fair value of financial instruments traded in active markets (such as publicly traded real estate funds) is based on quoted market prices at the end of the reporting period. The quoted market price used for financial assets held by the group is the current bid price. These instruments are included in level 1.

 

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

 

Vinci Monalisa is a financial instrument classified as level 2. Its portfolio is comprised of items that could be classified as level 1, level 2 and level 3, in the amount of R$ 151,526, R$ 538,514 and R$ 229,701, respectively (2023: R$ 151,645, R$ 542,358 and R$ 212,482, respectively).

 

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities.

 

F-21

Vinci Partners Investments Ltd.

 

Notes to the interim consolidated financial statements

All amounts in thousands of reais unless otherwise stated

 

Valuation techniques used to determine fair values

 

Specific valuation techniques used to value financial instruments include:

 

-the use of quoted market prices

 

-for level 3 financial instruments – discounted cash flow analysis.

 

All non-listed assets fair value estimates are included in level 2, except for private equity funds, where the fair values have been determined based on fair value appraisals for fund's investments, performed by the fund's management (Vinci Capital and Vinci Infra) or a third party hired by the Fund’s Administrator. The most part of the level 3 financial instruments evaluation uses discount cash flows techniques to evaluate the fair value of the Fund's investments. The appraisals performed by a third party are reviewed by Vinci or its subsidiaries (fund's management).

 

Fair value measurements using significant unobservable inputs (level 3)

 

The following table presents the changes in level 3 items for the period/year ended March 31, 2024 and December 31, 2023:

 

   Fair Value
Opening balance January 1, 2023   5,985 
Capital deployment   947 
Sales and distributions   (247)
Gain recognized in finance income   461 
Closing balance December 31, 2023   7,146 
Capital deployment   49,788 
Sales and distributions   (31)
Gain recognized in finance income   1,062 
Closing balance March 31, 2024   57,965 

F-22

Vinci Partners Investments Ltd.

 

Notes to the interim consolidated financial statements

All amounts in thousands of reais unless otherwise stated

 

6Other assets

 

   03/31/2024  12/31/2023
       
Employees loans (i)   5,564    5,519 
Sundry advances   188    152 
Advances to projects in progress (ii)   18,787    12,771 
Other prepayments   320    319 
Related parties’ receivables (iii)   4    4 
Guarantee deposits (iv)   511    494 
Receivables from employees (v)   18,946    18,820 
Sublease receivables   224    224 
Others   181    233 
           
    44,725    38,536 
           
Current   25,169    19,109 
Non-current   19,556    19,427 
    44,725    38,536 

 

(i)Refers to amounts receivable from employees.

 

(ii)Refers to costs incurred by projects related to funds administered by Vinci, that are initially paid by the Group and subsequently reimbursed.

 

(iii)Refers to an intercompany transaction. See Note 21 (b) for more details.

 

(iv)Refers to the security deposit of a lease.

 

(v)Refers to an intercompany transaction. See Note 21 (d) for more details.

 

F-23

Vinci Partners Investments Ltd.

 

Notes to the interim consolidated financial statements

All amounts in thousands of reais unless otherwise stated

 

7Investments

 

(a)Business Combination

 

Compass Business Combination

 

On March 07, 2024, Vinci announced an agreement for a combination with Compass. Once closed, the transaction will create a full-service Latin American alternative asset manager with more than US$50 billion in assets under management, across private markets, investment products and solutions, public equities, and corporate advisory segments. Founded in 1995, Compass is a leading independent asset manager and investment advisory firm in Latin America, currently present in seven countries in Latin America, the United States and United Kingdom.

 

The transaction will have a total upfront consideration of 11,783,384 shares of VINP Class A common stock, and a cash consideration of US$31.3 million, in the form of VINP Class C redeemable common stock. Under the agreement, Compass partners are entitled to an earn-out of up to an additional 7.5% stake in the combined entity, subject to the achievement of pre-determined metrics, to be paid in VINP Class A common stock until 2028.

 

The transaction is expected to close in the third quarter of 2024, subject to regulatory approvals and other customary closing conditions.

 

(b)Non-controlling interests (NCI)

 

Set out below is summarized financial information for each subsidiary that has non-controlling interests. The amounts disclosed for each subsidiary are before inter-company eliminations.

 

   Vinci Asset Allocation  Vinci Holding Securitária  Total
Summarized Balance Sheet   03/31/2024    12/31/2023    03/31/2024    12/31/2023    03/31/2024    12/31/2023 
                               
Current assets   198    232    164,064    100,873    164,262    101,105 
Current liabilities   (156)   (707)   (958)   (2,816)   (1,114)   (3,523)
Current net assets   42    (475)   163,106    98,057    163,148    97,582 
                               
Non-current assets   601    601    15,432    13,549    16,033    14,150 
Non-current liabilities   (2,250)   (1,550)   (166,425)   (96,805)   (168,675)   (98,355)
Non-current net assets   (1,649)   (949)   (150,993)   (83,256)   (152,642)   (84,205)
                               
Net assets   (1,607)   (1,424)   12,113    14,801    10,506    13,377 
                               
Accumulated NCI   (402)   (356)   1,817    2,220    1,415    1,864 

F-24

Vinci Partners Investments Ltd.

 

Notes to the interim consolidated financial statements

All amounts in thousands of reais unless otherwise stated

 

  Vinci Asset Allocation  Vinci Holding Securitária  Total
Summarized statement of comprehensive income  03/31/2024  03/31/2023  03/31/2024  03/31/2023  03/31/2024  03/31/2023
                   
Revenue   83    -    75    -    158    - 
                               
Profit for the period   (183)   (185)   (2,688)   103    (2,871)   (82)
                               
Total comprehensive income   (183)   (185)   (2,688)   103    (2,871)   (82)
                               
Profit/(loss) allocated to NCI   (46)   (46)   (403)   15    (449)   (31)

 

F-25

Vinci Partners Investments Ltd.

 

Notes to the interim consolidated financial statements

All amounts in thousands of reais unless otherwise stated

 

8Property and equipment

 

 

                  03/31/2024
  

Furniture

and fittings

stuffs

 

Improvements in properties

of third

parties

 

Computers

and peripherals -

improvements

 

Equipment

and tools

  Work of arts and others  Total
                   
Cost                              
At January 1, 2024   12,858    48,963    7,634    10,325    791    80,571 
       Acquisitions, net of disposals   37    237    141    25    -    440 
       Foreign Exchange variations of property and equipment abroad   -    590    -    169    -    759 
                               
At March 31, 2024   12,895    49,790    7,775    10,519    791    81,770 
                               
Accumulated depreciation                              
At January 1, 2024   (9,303)   (43,205)   (6,128)   (9,344)   -    (67,980)
    Depreciation   (220)   (708)   (117)   (66)   -    (1,111)
    Foreign Exchange variations of property and equipment abroad   -    (590)   -    (165)   -    (755)
                               
At March 31, 2024   (9,524)   (44,503)   (6,245)   (9,575)   -    (69,846)
                               
Net book value                              
At January 1, 2024   3,555    5,758    1,506    981    791    12,591 
                               
At March 31, 2024   3,371    5,287    1,530    944    791    11,924 
                               
Annual depreciation rate - %   10    From 10 to 20    20    10    -    - 

  

F-26

Vinci Partners Investments Ltd.

 

Notes to the interim consolidated financial statements

All amounts in thousands of reais unless otherwise stated

 

                  12/31/2023
  

Furniture

and fittings

stuffs

 

Improvements in properties

of third

parties

 

Computers

and peripherals -

improvements

 

Equipaments

and tools

  Work of arts and others  Total
Cost                              
At January 1, 2023   11,782    47,824    7,113    10,241    873    77,833 
       Acquisitions   1,076    2,574    521    496    (82)   4,585 
       Foreign Exchange variations of property and equipment abroad   -    (1,435)   -    (412)   -    (1,847)
                               
At December 31, 2023   12,858    48,963    7,634    10,325    791    80,571 
                               
Accumulated depreciation                              
    At January 1, 2023   (8,473)   (42,188)   (5,707)   (9,514)   -    (65,882)
    Depreciation   (830)   (2,447)   (421)   (229)   -    (3,927)
    Foreign Exchange variations of    property and equipment abroad        1,430    -    399    -    1,829 
                               
At December 31, 2023   (9,303)   (43,205)   (6,128)   (9,344)   -    (67,980)
                               
Net book value                              
At January 1, 2023   3,309    5,636    1,406    727    873    11,951 
                               
At December 31, 2023   3,555    5,758    1,506    981    791    12,591 
                               
Annual depreciation rate - %   10    From 10 to 20    20    10           

 

F-27

Vinci Partners Investments Ltd.

 

Notes to the interim consolidated financial statements

All amounts in thousands of reais unless otherwise stated

 

9Intangible assets

 

Intangible assets include expenditures with the development of the software, placement agent, management contracts and the goodwill generated by the acquisition of SPS.

 

The software development comprises mainly the following assets:

 

-Products for Risk System and Portfolio Allocation, whose purpose is to evaluate the risk of the funds and to allocate the clients' portfolio; and

-Systems and applications which are being developed to support retirement services applications.

 

The Entity assesses at each reporting date whether there is an indication that an intangible asset may be impaired, If any indication exists, the Entity estimates the asset's recoverable amount. There were no indications of impairment of intangible assets for the year ended March 31, 2024 and December 31, 2023.

 

                   03/31/2024 
    Software development    Placement Agent (a)    Goodwill (b)    Management Contracts (c)    Total 
                          
Cost                         
At January 1, 2024   40,333    20,722    162,290    22,049    245,394 
Additions   2,779    83    -    -    2,862 
Foreign exchange variation of intangible assets abroad   246    50    -    -    296 
                          
At March 31, 2024   43,358    20,855    162,290    22,049    248,552 
                          
Accumulated amortization                         
At January 1, 2024   (24,686)   (1,896)   -    (4,064)   (30,646)
Amortization   (824)   (526)   -    (762)   (2,112)
Foreign exchange variation of intangible assets abroad   (237)   (30)   -    -    (267)
                          
At March 31, 2024   (25,747)   (2,452)   -    (4,826)   (33,025)
                          
At January 1, 2024   15,647    18,826    162,290    17,985    214,748 
                          
   At March 31, 2024   17,611    18,403    162,290    17.223    215,527 
                          
Amortization rate (per year) - %   20%   (a)    (b)    (c)    - 
                          

F-28

Vinci Partners Investments Ltd.

 

Notes to the interim consolidated financial statements

All amounts in thousands of reais unless otherwise stated

 

(a) Refers to amounts capitalized relating to agreements with investments placement agents relating to funds raised from investors in funds managed by the Group. These amounts are amortized based on the estimated duration of the related funds. When a Fund has an undefined useful life (Perpetual funds), placement agent costs are amortized within 10 years. In case of an early liquidation of the funds, the amortization period is adjusted, or if there is an indication of impairment, an impairment evaluation is performed and recognized, if necessary.

 

(b) Goodwill has an indefinite useful life and are not subject to amortization. Goodwill is tested annually for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. At December 31, 2023, goodwill was tested and no provision for impairment losses was identified by Vinci.

 

Key assumptions to determine the fair value of goodwill include discounted cash flow calculations based on current performance and considering current market indicators listed below. There were no significant changes to assumptions between acquisition and reporting date.

 

Inputs to determine fair value of Goodwill:

 

Annual inflation rate – Brazil   4%
Discount Rate   12.5%

 

(c) Refers to the purchase price allocated to Fund’s Management Contracts as a result of SPS acquisition. These amounts are amortized based on the duration of the related funds, from September 2022 to December 2030.

 

Other assets than Goodwill are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs of disposal and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets (cash-generating units).

 

F-29

Vinci Partners Investments Ltd.

 

Notes to the interim consolidated financial statements

All amounts in thousands of reais unless otherwise stated

 

                   12/31/2023 
    Software development    Placement Agent (a)    Goodwill (b)    Management Contracts (c)    Total 
                          
Cost                         
At January 1, 2023   28,250    1,359    162,290    22,049    213,948 
Additions   12,684    19,469    -    -    32,153 
Foreign exchange variation of intangible assets abroad   (601)   (106)   -    -    (707)
                          
At December 31, 2023   40,333    20,722    162,290    22,049    245,394 
                          
Accumulated amortization                         
At January 1, 2023   (23,629)   (65)   -    (1,016)   (24,710)
Annual amortization   (1,636)   (1,863)   -    (3,048)   (6,547)
Foreign exchange variation of intangible assets abroad   579    32    -         611 
                          
At December 31, 2023   (24,686)   (1,896)   -    (4,064)   (30,646)
                          
                          
At January 1, 2023   4,621    1,294    162,290    21,033    189,238 
                          
   At December 31, 2023   15,647    18,826    162,290    17,985    214,748 
                          
Amortization rate (per year) - %   20%   (a)    (b)    (c)    - 
                          

F-30

Vinci Partners Investments Ltd.

 

Notes to the interim consolidated financial statements

All amounts in thousands of reais unless otherwise stated

 

10Leases

 

This note provides information for leases where the Group is a lessee. The notes also provide the information of subleases agreements where the Group is a lessor, once part of the assets leased by the Group is subleased to third parties.

 

(i)Amount recognized in the balance sheet

 

The balance sheet shows the following amounts relating to leases:

 

   03/31/2024  12/31/2023
Sub-lease receivable          
Rio de Janeiro Office - BM 336   4,680    5,538 
Total   4,680    5,538 
           
Current   3,601    4,071 
Non-current   1,079    1,467 
Total   4,680    5,538 
           
Right of use assets          
Rio de Janeiro Office - BM 336   47,504    48,741 
São Paulo Office – JRA   7,804    8,780 
NY Office - Third Avenue   609    787 
Total   55,917    58,308 
           
Lease liabilities          
Rio de Janeiro Office - BM 336   (57,620)   (61,051)
São Paulo Office – JRA   (9,939)   (10,821)
NY Office - Third Avenue   (733)   (940)
Total   (68,292)   (72,812)
           
Current   (25,104)   (24,381)
Non-current   (43,188)   (48,431)
Total   (68,292)   (72,812)

 

Reduction to the right-of-use assets until March 31, 2024 were R$ 75 (reductions of R$ 2,045 during 2023 financial year).

 

F-31

Vinci Partners Investments Ltd.

 

Notes to the interim consolidated financial statements

All amounts in thousands of reais unless otherwise stated

 

(ii)Amount recorded in the statement of profit or loss

 

The statement of profit or loss shows the following amounts relating to leases:

 

   03/31/2024  03/31/2023
       
Right of use assets depreciation   (2,339)   (2,777)
Financial expense   (2,216)   (2,631)
    (4,555)   (5,408)

 

The total cash outflow for leases until March 31, 2024 was R$ 6,764 (R$ 6,270 until March 31, 2023).

 

The Group’s leasing activities and how these are accounted for are disclosed in the Group’s annual consolidated financial statements as of December 31, 2023.

 

11Accounts payable

 

   03/31/2024  12/31/2023
       
Dividends payable   3,791    3,791 
Lease payable – prior month expense   2,170    2,161 
Other payables   91    68 
           
    6,052    6,020 

 

12Labor and social security obligations

 

       
   03/31/2024  12/31/2023
       
Profit sharing   17,981    93,611 
Labor provisions   16,128    13,252 
           
    34,109    106,863 
           
Current   27,325    101,506 
Non-current   6,784    5,357 

 

Except for the profit sharing related to the unrealized performance fees, the accrual for profits sharing payable on December 31, 2023 was paid in January 2024. Profit sharing is calculated based on the performance review of each employee plus the area performance, in accordance with the Entity policy. Vinci Management estimated the profit sharing as of March 31, 2024 based on the management and advisory net revenue recognized and the realized performance fee up to March 31, 2024.

 

Since the second quarter of 2022 labor provisions are being impacted by provisions and social charges related to Restricted Share Units Plan (RSUs). The non-current amount comprises the provisions and social charges for the RSUs which the vesting dates are over than 1 year. Please see note 24 for more details.

 

F-32

Vinci Partners Investments Ltd.

 

Notes to the interim consolidated financial statements

All amounts in thousands of reais unless otherwise stated

 

13Taxes and contributions payable

 

   03/31/2024  12/31/2023
       
Income tax   11,049    14,467 
Social contribution   4,051    5,061 
Social Contribution on
     revenues (COFINS)
   1,982    2,780 
Social Integration Program (PIS)   434    606 
Service tax (ISS) on billing   652    1,742 
Withholding Income Tax (IRRF)
     deducted from third parties
   199    103 
Others   251    94 
           
    18,618    24,853 

F-33

Vinci Partners Investments Ltd.

 

Notes to the interim consolidated financial statements

All amounts in thousands of reais unless otherwise stated

 

14Loans and obligations

 

   03/31/2024  12/31/2023
       
Convertible Preferred Shares (i)   451,350    431,333 
Commercial Notes (ii)   61,688    73,189 
Consideration payable (iii)   49,425    48,199 
Contingent consideration (iv)   70,127    64,370 
           
    632,590    617,091 
           
Current   78,138    76,722 
Non-current   554,452    540,369 

 

(i)Convertible Preferred Shares

 

On October 10, 2023, Vinci and Ares Management Corporation (“Ares”) announced an agreement to form a strategic partnership to accelerate the growth of Vinci's platform in Latin America and to collaborate on distribution, product development and other business opportunities. In connection with the formation of the strategic partnership, an affiliate of Ares invested US$100 million (R$ 500,550) in new Series A Convertible Preferred Shares issued by Vinci.

 

The Series A Convertible Preferred Shares will be entitled to cumulative dividends payable quarterly in cash at a rate of 8,00% per annum. The dividend rate is subject to increase to 10,00% per annum in the case of certain breaches by the Company of its obligations under the Certificate of Designations.

 

The Series A Convertible Preferred Shares will be convertible at the option of the holders at any time after the closing of the issuance into Class A Common Shares at an initial conversion rate of 73,5402 Class A Common Shares for each Series A Convertible Preferred Share, which represents an initial conversion price of approximately $13,60 per Class A Common Share.

 

Under certain conditions, Vinci may redeem, following the dissolution or termination of the strategic partnership with Ares, and prior to the one-year anniversary of such dissolution or termination, for cash all, or, if Ares no longer holds all Series A Convertible Preferred Shares, all of the Series A Convertible Preferred Shares held by Ares and any whole number of Series A Convertible Preferred Shares held by such other holders, On or around October 1, 2033, if not earlier repurchased, redeemed or converted, the Company will redeem, in whole but not in part, all of the outstanding Series A Convertible Preferred Shares for an amount in cash equal to the stated value of the Series A Convertible Preferred Shares.

 

Under the terms of IAS 32, this agreement was evaluated by the Management and classified as a compound instrument, having both a liability and an equity component from the issuer's perspective. Based on it, the component parts were accounted for and presented separately according to their substance. The split was made at issuance and not revised for subsequent changes in market interest rates, share prices, or other event that changes the likelihood that the conversion option will be exercised.

 

F-34

Vinci Partners Investments Ltd.

 

Notes to the interim consolidated financial statements

All amounts in thousands of reais unless otherwise stated

 

The following table presents the changes in the Convertible Preferred Shares up the period ended March 31, 2024:

 

Fair value of the convertible preferred shares, net of transaction costs   439,651 
Net foreign exchange loss/(gain)   (16,513)
Interest expense   8,195 
Closing balance December 31, 2023   431,333 
Net foreign exchange loss/(gain)   15,576 
Interest expense   11,434 
Interest paid   (6,993)
Closing balance March 31, 2024   451,350 
      
Current
   9,992 
Non-current   441,358 

 

On January 1, 2024, the Entity paid the total amount of R$ 6,993 related to the dividends of the series A convertible preferred shares.

 

(ii)Commercial notes

 

On August 15, 2022, Vinci Soluções de Investimentos Ltda., a subsidiary of Vinci, issued 80,000 commercial notes in the total amount of R$ 80,000 (R$ 1,000,00 reais for each commercial note). The commercial notes were subject to public distribution 90 days after the issuing date. The main characteristics of the financial instrument are indicated below:

 

Term and expiration date: 5 (five) years, ending on August 15, 2027.

 

Interest rate: 100% of the daily rates of interbank deposits (“DI”) plus a spread of 2,15% on an annual basis.

 

Amortization: On semi-annually basis, beginning on February 15, 2023.

 

Commercial Notes comprises a financial liability evaluated at amortized cost. Interest expense is calculated using the effective interest method and is recognized in profit or loss as part of financial expense.

 

Accordingly, to the terms of the agreement, the Group is committed to be compliant with financial covenants, on an annual basis and beginning on December 31, 2022. The entity was in compliance with the covenants as of March 31, 2024 and December 31, 2023.

 

The following table presents the changes in the Commercial Notes up the period ended March 31, 2024 and December 31, 2023:

 

Closing balance December 31, 2022   83,212 
Interest expense   10,841 
Interest paid   (11,975)
Principal paid   (8,889)
Closing balance December 31, 2023   73,189 
Interest expense   2,350 
Interest paid   (4,962)
Principal paid   (8,889)
Closing balance March 31, 2024   61,688 
      
Current   18,720 
Non-current   42,968 

F-35

Vinci Partners Investments Ltd.

 

Notes to the interim consolidated financial statements

All amounts in thousands of reais unless otherwise stated

 

(iii)Consideration payable

 

According to Note 7(a), Vinci acquired SPS Capital Gestão de Recursos Ltda, on August 16, 2022. As part of the deal, Vinci assumed a financial obligation to be paid on the second anniversary of the closing date. The amount as of March 31, 2024 and December 31, 2023 is R$ 49,425 and R$ 48,199, respectively.

 

Consideration payable is financial liability evaluated at amortized cost. Interest expense is calculated using the effective interest method and is recognized in profit or loss as part of financial expense.

 

(iv)Contingent consideration

 

Vinci shall pay an additional consideration in VINP’s Class A shares through an earnout structure to be paid in 2027, up to a maximum number of 1,7 million shares, subject to the achievement of certain fundraising and incremental management fee revenue targets. The amount reflects the fair value of the obligation, based on the terms of the purchase agreement and how the current economic environment is likely to impact it, accordingly to Vinci’s best estimate.

 

On March 31, 2024, Vinci reevaluated the fair value of the obligation based on the economic conditions at that date, resulting in an increase of the contingent consideration fair value. The variation was recognized as an expense in the financial result in the amount of R$ 5,756 for the three months period ended March 31, 2024 (revenue of R$ 4,051 for the three months period ended March 31, 2023).

 

15Retirement plans liabilities

 

During the year of 2023, the subsidiary Vinci Vida e Previdência S.A. started its retirement services operations. As of March 2024 and December 2023, active plans are principally accumulation of financial resources through products PGBL (Free Benefit Generator Plan) and VGBL (Free Benefit Generator Life) structured in the form of variable contribution, for the purpose of granting participants with returns based on the accumulated capital in the form of monthly withdraws for a certain term or temporary monthly withdraws.

 

In this respect, such financial products represent investment contracts that have the legal form of retirement plans, but which do not transfer insurance risk to the Group. Therefore, contributions received from participants are accounted for as liabilities and balance consists of the balance of the participant in the linked Specially Constituted Investment Fund (“FIE”) at the reporting date (Note 5). On March 31, 2024 the Retirement plan liabilities are R$ 144,782 (R$ 85,554 as of December 31, 2023).

 

16Equity

 

(a)Capital

 

The capital comprises 42,447,349 Class A shares and 14,466,239 Class B shares with a par value of US$ 0,00005 each and 100,000 Series A convertible preferred shares.

 

The Class A common shares have been approved for listing on the Nasdaq Global Select Market, or Nasdaq, under the symbol "VINP," Vinci has two classes of common shares: Class A common shares and our Class B common shares.

 

Class B common shares carry rights that are identical to the Class A common shares, except that (1) holders of Class B common shares are entitled to 10 votes per share, whereas holders of our Class A common shares are entitled to one vote per share; (2) holders of Class B common shares have certain conversion rights; (3) holders of Class B common shares are entitled to preemptive rights in the event that additional Class A common shares are issued in order to maintain their proportional ownership interest; and (4) Class B common shares shall not be listed on any stock exchange and will not be publicly traded.

 

F-36

Vinci Partners Investments Ltd.

 

Notes to the interim consolidated financial statements

All amounts in thousands of reais unless otherwise stated

 

Series A Convertible Preferred Shares will be convertible at the option of the holders at any time after the closing of the issuance into Class A Common Shares at an initial conversion rate of 73,5402 Class A Common Shares for each Series A Convertible Preferred Share, which represents an initial conversion price of approximately $13,60 per Class A Common Share.

 

Fair value option of convertible preferred shares

 

As informed on note 14 (i), when the initial carrying amount of a compound financial instrument is allocated to its equity and liability components, the equity component is assigned the residual amount after deducting from the fair value of the instrument determined for the liability component. At the transaction date, the fair value of the stock option and the amount of transaction cost were allocated to the equity in the amounts of R$ 34,141 and 1,958, respectively.

 

(b)Transactions costs

 

Transactions costs comprises the expenses incurred by the Entity in connection with the IPO and the issuance of the convertible preferred shares.

 

(c)Retained earnings

 

Retained earnings comprises the net profit generated by the Entity which were not distributed to their shareholders or approved to be distributed by the Entity management.

 

(d)Other reserves

 

Other reserves are comprised by the following operations:

 

(i)Exchange variation on investees

 

Comprises the exchange variation in investments made on investees which have a functional currency other than Brazilian Reais, the Entity functional currency. When a foreign operation is sold, the associated exchange differences are reclassified to profit or loss, as part of the gain or loss on sale.

 

(ii)Share-based payments

 

Benefits to its employees through a share-based incentive.

 

(e)Dividends

 

On February 7, 2024, Vinci declared a quarterly dividend distribution of US$ 0.20 per common share to shareholders as of February 22, 2024, totalizing US$ 10,756 (R$ 53,357), paid on March 5, 2024.

 

Once dividends are declared and approved by the board of directors, they will be paid on proportional basis to the owners of the common shares.

 

(f)Treasury shares

 

When shares recognized as equity are repurchased, the amount of the consideration paid, which includes directly attributable costs, is recognized as a deduction from equity. Repurchased shares are classified as treasury shares and are presented in the treasury share reserve. When treasury shares are sold or reissued subsequently, the amount received is recognized as an increase in equity and the resulting surplus or deficit on the transaction is presented within the additional paid-in capital.

 

F-37

Vinci Partners Investments Ltd.

 

Notes to the interim consolidated financial statements

All amounts in thousands of reais unless otherwise stated

 

On February 14, 2023, the Company announced a new share buyback plan and a share repurchase plan to buy back up to R$60.0 million of the Company's outstanding Class A common shares across both plans. The new buyback and repurchase plans will commence on the expiration date of the legacy plans and will not have specified expiration dates (other than when the R$60.0 million buyback limit is reached).

 

In October 2023, the Company suspended for undetermined time the Repurchase Program, in compliance with SEC Rule 10b5-1.

 

On February 7, 2024, the Company announced a new share buyback plan and a share repurchase plan to buy back up to R$60.0 million of the Company's outstanding Class A common shares which shall be executed through open market transactions or privately negotiated purchases. The plan is approved to replace the share buyback and repurchase plans approved on February 14, 2023, which expired on the date that the R$60.0 million buyback limit set thereunder was reached.

 

During the first quarter of 2024, the Company bought back 533,981 shares from its shareholders, in the amount of R$ 28,302.

 

In March 2024 the Company holds 3,668,752 Class A common shares in treasury.

 

(g)Basic and diluted earnings per share

 

a) Basic earning per share  03/31/2024  03/31/2023
From continuing operations attributable to the ordinary equity holders of the Entity   0.84    0.58 
Total basic earning per share attributable to the ordinary equity holders of the Entity   0.84    0.58 

 

b) Diluted earning per share  03/31/2024  03/31/2023
From continuing operations attributable to the ordinary equity holders of the Entity   0.80    0.57 
Total basic earning per share attributable to the ordinary equity holders of the Entity   0.80    0.57 

 

c) Reconciliations of earnings used in calculating earnings per share

 

Basic earnings per share:  03/31/2024  03/31/2023
Profit attributable to the ordinary equity holders of the Entity used in calculating basic earnings per share:   
From continuing operations   46,157    32,737 
    46,157    32,737 

 

Diluted earnings per share  03/31/2024  03/31/2023
Profit from continuing operations attributable to the ordinary equity holders of the Entity   
Used in calculating basic earnings per share   46,157    32,737 
Used in calculating diluted earnings per share   46,157    32,737 

 

d) Weighted average number of share used as the denominator 

Number

03/31/2024

 

Number

03/31/2023 

Weighted average number of ordinary share/quotas used as the denominator in calculating basic earnings per share:   54,799,469    56,741,596 
Adjustments for calculation of diluted earnings per share:   3,079,155    725,084 
Weighted average number of ordinary shares/quotas and potential ordinary shares used as the denominator in calculating diluted earnings per share   57,878,624    57,466,680 

F-38

Vinci Partners Investments Ltd.

 

Notes to the interim consolidated financial statements

All amounts in thousands of reais unless otherwise stated

 

17Revenue from services rendered

 

   03/31/2024  03/31/2023
       
Gross revenue from fund management   103,185    102,491 
Gross revenue from performance fees   2,352    2,075 
Gross revenue from corporate advisory services   10,934    4,891 
           
Gross revenue from services rendered   116,471    109,457 
           
In Brazil   87,902    87,034 
Abroad   28,569    22,423 
           
Taxes and contributions          
COFINS   (3,947)   (4,044)
PIS   (856)   (877)
ISS   (2,581)   (2,228)
           
Net revenue from services rendered   109,087    102,308 
           
Net revenue from fund management   96,455    95,877 
Net revenue from performance fees   2,273    1,963 
Net revenue from advisory services   10,359    4,468 

 

18General and administrative expenses

 

   03/31/2024  03/31/2023
       
Personnel and profit-sharing (a)   (17,314)   (17,677)
Share Based Plans (b)   (6,148)   (2,107)
Profit sharing (a)   (19,757)   (18,795)
    (43,219)   (38,579)
Third party expense (c)   (8,413)   (6,584)
Right of use depreciation (d)   (2,339)   (2,777)
Depreciation and amortization (e)   (3,125)   (1,778)
Travel and representations   (1,140)   (865)
Condominium expenses   (660)   (985)
Other operating expenses (f)   (2,762)   (2,562)
    (61,658)   (54,130)

 

(a)Personnel and profit-sharing

 

According to the profit-sharing program and based on Law 10,101 of December 19, 2000 and on objectives established at the beginning of each year, management estimated the payment of profit sharing in the amount of R$ 19,757 (R$ 18,795 on March 31, 2023) for the three-months period ended March 31, 2024.

 

(b)Share-based payments

 

See Note 24 for more details.

 

F-39

Vinci Partners Investments Ltd.

 

Notes to the interim consolidated financial statements

All amounts in thousands of reais unless otherwise stated

 

(c)Third party expense

 

Third party expenses are composed for accounting, advisory, information technology, marketing, and other contracted services.

 

(d)Right of use depreciation

 

See Note 10 for more details.

 

(e)Depreciation and amortization

 

The amount is mainly comprised by property and equipment depreciation and intangible amortization.

 

(f)Other operating expenses

 

The amount is mainly comprised of office expenses, including energy, cleaning, maintenance and conservation, among others several expenses.

 

F-40

Vinci Partners Investments Ltd.

 

Notes to the interim consolidated financial statements

All amounts in thousands of reais unless otherwise stated

 

19Finance profit/(loss)

 

    03/31/2024    03/31/2023 
           
Investment income (i)   25,871    - 
Financial revenue through amortized cost   6,065    - 
Financial revenue on sublease agreements   179    76 
Contingent consideration variation (iii)   -    4,051 
Other finance income   496    126 
           
Finance income   32,611    4,253 
           
Financial expense on lease agreements   (2,216)   (2,631)
Interest expense on loans and financing (ii)   (15,010)   (3,934)
Bank fees   (36)   (13)
Investment losses (i)   -    (111)
Fines on taxes   (1)   - 
Foreign currency variation on liabilities at amortized cost   (614)   (155)
Interest on taxes   (78)   - 
Contingent consideration variation (iii)   (5,756)   - 
Other financial expenses   (237)   - 
           
Finance costs   (23,948)   (6,844)
           
Finance profit/(loss), net   8,663    (2,591)

 

(i)Investment income and losses comprises the fair value changes on the financial instruments at fair value through profit or loss, Segregated investment income result is demonstrated below.

 

   03/31/2024  03/31/2023
Mutual funds and fixed income investments (a)   25,038    - 
Private equity funds   833    - 
    25,871    - 
           
Mutual funds   -    (108)
Private equity funds   -    (3)
    -    (111)

 

(a)Vinci Monalisa corresponds to the most part of the Group’s investment income,

 

(ii)Interest expense on loans and financing comprises the financial result on the Commercial notes, the consideration payable related to SPS acquisition and interest expense on the convertible preferred shares. Please see note 14 for more detail.

 

(iii)Variation on contingent consideration comprises the financial result of the fair value evaluation. Please see note 14 (iii) for more detail.

 

F-41

Vinci Partners Investments Ltd.

 

Notes to the interim consolidated financial statements

All amounts in thousands of reais unless otherwise stated

 

20Income tax and social contribution

 

As an exempted company incorporated in the Cayman Islands, Vinci Partners Ltd is subject to Cayman Islands laws, which currently levy no taxes on individuals or corporations based upon profits, income, gains or appreciation and there is no taxation in the nature of inheritance tax or estate duty or withholding tax applicable to us.

 

Vinci Partners Ltd subsidiaries, except for certain subsidiaries, are taxed based on the deemed profit.

 

Vinci has tax losses and negative basis resulting from previous years and deferred income tax and social contribution credits are recognized since there is expectation of future tax results for these companies, The tax credit arising from the tax loss and negative basis under the taxable profit regime on March 31, 2024 is R$ 6,066 (R$ 6,066 on December 31, 2023).

 

The income tax and social contribution charge on the results for the year can be summarized as follows:

 

   03/31/2024  03/31/2023
       
Current income tax   (9,440)   (9,210)
Current social contribution   (3,431)   (3,307)
           
    (12,871)   (12,517)
           
Deferred income tax   1,829    (227)
Deferred social contribution   658    (137)
           
    2,487    (364)
           
Total income tax and social contribution   (10,384)   (12,881)

F-42

Vinci Partners Investments Ltd.

 

Notes to the interim consolidated financial statements

All amounts in thousands of reais unless otherwise stated

 

Deferred tax balances

 

   03/31/2024  12/31/2023
Deferred tax assets          
Tax losses   6,066    6,066 
Leases   930    1,084 
RSU   2,617    2,188 
Interest expense on obligation for acquisition   2,538    2,121 
Amortization on management Contracts   1,641    1,382 
Contingent consideration   2,603    646 
Total   16,395    13,487 
Deferred tax liabilities      
Financial revenue   (1,434)   (1,147)
Estimated revenue   (1,570)   (1,570)
Leases   (484)   (351)
Total Income Tax   (3,488)   (3,068)
           
Estimated revenue   (815)   (815)
Total (Taxes and contribution)   (815)   (815)
           
Total deferred tax liabilities   (4.303)   (3,883)

 

Movements  Tax losses  Leases  RSU  Other (*)  Total
Deferred tax assets                         
As at December 31, 2022   4,912    1,805    1,628    896    9,241 
to profit and loss   1,154    (721)   560    3,253    4,246 
As at December 31, 2023   6,066    1,084    2,188    4,149    13,487 
to profit and loss   -    (154)   429    2,633    2,908 
As at March 31, 2024   6,066    930    2,617    6,782    16,395 

 

(*) Comprises deferred taxes related to interest expense on obligation for ownership acquisition, amortization on management contracts and contingent consideration.

 

Movements  Financial Revenue  Estimated Revenue  Leases  Contingent consideration  Total
Deferred tax liabilities                         
As at December 31, 2022   (973)   (2,568)   (49)   (4,750)   (8,340)
to profit and loss   (174)   183    (302)   4,750    4,457 
As at December 31, 2023   (1,147)   (2,385)   (351)   -    (3,883)
to profit and loss   (287)   -    (133)   -    (420)
As at March 31, 2024   (1,434)   (2,385)   (484)   -    (4,303)

F-43

Vinci Partners Investments Ltd.

 

Notes to the interim consolidated financial statements

All amounts in thousands of reais unless otherwise stated

 

(a)Tax effective rate

 

   03/31/2024  03/31/2023
       
Profit (loss) before income taxes   56,092    45,587 
Combined statutory income taxes rate - %   34%   34%
Income tax benefit (expense) at statutory rates   (19,071)   (15,500)
Reconciliation adjustments:          
Expenses not deductible   (99)   (62)
Tax benefits   37    35 
Share based payments   (338)   (29)
Unrecognized tax loss credits   (918)   - 
Effect of presumed profit of subsidiaries (i) and offshore subsidiaries   9,981    2,662 
           
Other additions (exclusions), net   24    13 
           
Income taxes expenses   (10,384)   (12,881)
Current   (12,871)   (12,517)
Deferred   2,487    (364)
           
Effective rate   19%   28%

 

(i)Brazilian tax law establishes that companies that generate gross revenues of up to R$ 78,000 in the prior fiscal year may calculate income taxes as a percentage of gross revenue, using the presumed profit income tax regime. The Entity's subsidiaries adopted this tax regime and the effect of the presumed profit of subsidiaries represents the difference between the taxation based on this method and the amount that would be due based on the statutory rate applied to the taxable profit of the subsidiaries.

 

F-44

Vinci Partners Investments Ltd.

 

Notes to the interim consolidated financial statements

All amounts in thousands of reais unless otherwise stated

 

21Related parties

 

(a)Key management remuneration

 

The total remuneration (salaries and benefits) of key management personnel, including the Executive Committee, amounted to R$ 1,755 for the three-month period ended March 31, 2024 (March 31, 2023 – R$ 1,878).

 

According to Vinci internal policy, the key management is entitled to receive a profit-sharing compensation for the current year. As informed in Note 12, Vinci accrued a provision for profit sharing for the Group as of March 31, 2024.

 

(b)Receivables from related parties

 

The Entity receivables from related parties as of December 31, 2023 and 2022, as shown in the table below:

 

   03/31/2024  12/31/2023
Cagliari Participações S,A,   4    4 
    4    4 

 

(c)Employees loans

 

As presented in Note 6(i), Vinci may advance payments to its employees.

 

(d)Receivables from employees

 

During 2023, Vinci sold part of its treasury shares to employees. The amount will be received from January 31, 2025, in annual installments until January 31, 2029, and a monetary variation will be charged by inflation index.

 

22Segment reporting

 

The Entity's reportable segments are those business units which provide different services and are separately managed since each business demands different market strategies.

 

The main information used by management for assessment of the performance of each segment is the profit by segment for the analysis of the return of these investments.

 

The information on assets and liabilities by segment is not disclosed in these financial statements because it is not used by management when managing segments. Management does not make an analysis by geographical areas for the management of the Entity's business.

 

In 2024, the Entity reassessed the allocation of certain revenues and expenses across its segments and restated the segment reporting as of March 31, 2023, for comparative purposes.

 

Segments are independently managed, with professionals specifically skilled allocated in each segment.

 

The Entity's operations are segmented according to the organization and management model approved by management, and they are divided as follows:

 

F-45

Vinci Partners Investments Ltd.

 

Notes to the interim consolidated financial statements

All amounts in thousands of reais unless otherwise stated

 

Private Market Strategies

 

Comprises the investments in illiquid funds, as described below:

 

(i)Private Equity

 

The private equity segment has a generalist and control-oriented approach, focusing on growth and turnaround. The primary strategy is value creation pursuing transformation of invested companies, with changes in the growth of revenue, productivity, profitability and management profile, using a proprietary methodology ("Value from the Core").

 

Another strategy of the segment is focused on sectors resilient to different investment cycles and minority holdings in small and medium enterprises with business models that exhibit high growth potential and clear, mensurable ESG (Environmental, Social and Governance) goals.

 

(ii)Real Estate

 

The Real Estate Investment Funds segment are focused on shopping centers, logistics, offices, urban real estate and funds of funds, and seek to achieve differentiated returns through an active management of a diversified and quality portfolio. The segment’s objective is also the development of real estate properties, following up to five key steps: origination of opportunities, analysis, execution, monitoring and asset sale.

 

(iii)Infrastructure

 

The infrastructure segment has exposure to real assets through equity and debt instruments, active in the following sub-segments: power, oil & gas, transportation & logistic and water & sewage. The strategy invests across two sub-strategies: sector-focused funds and structured credit. The fund’s investments are periodically monitored, including the evolution of ESG metrics, financial and operational metrics.

 

(iv)Credit

 

This credit segment is focused on fundamental credit analysis, consistency, and long-term value creation to investors. The area dynamic approach is to tactically allocate capital between asset classes and adapt to different cycles. It is also sourcing of credit instruments with resilient structures and sound collateral packages. The credit strategy investments include for core sub-strategies: infrastructure debt, real estate debt, structured credit and exclusive mandates, following four key steps: origination, analysis, structuring and monitoring.

 

(v)Special situations (SPS)

 

This Special situation segment is focused in complex situations in which financial and human capital are employed to generate superior returns, maintaining adequate risk levels and preserving the interests of all parties involved.

 

Public Equities

 

This segment seeks return through investments in liquid funds and manages long-term positions based on fundamental analysis of Brazilian publicly traded companies, trading bonds, public stocks and derivatives, among other assets.

 

F-46

Vinci Partners Investments Ltd.

 

Notes to the interim consolidated financial statements

All amounts in thousands of reais unless otherwise stated

 

Investment products and solutions

 

Investment products and solutions segments offer financial products on an open platform basis providing portfolio and management services considering medium/long term risk allocation. The strategy aims to provide an advanced investment strategy with alpha generation according to the clients’ targets. The strategy is divided in five sub-strategies: separate exclusive mandates, commingled funds, international allocation, pension plans and hedge funds. Monitoring and risk control are based on different techniques such as: use of options for high conviction trades, monitoring liquidity conditions for each position, VaR monitoring, scenarios simulations (including stress test), stop loss rules on individual positions and on the portfolio level.

 

Corporate advisory

 

The corporate advisory services objective is including high value-added to financial and strategic advisory services to entrepreneurs, corporate senior management teams and boards of directors, focusing primarily on IPO advisory and M&A transactions for Brazilian middle-market companies. The corporate advisory services team serves as trusted advisors to clients targeting local and/or product expertise in the Brazilian marketplace.

 

Vinci retirement services

 

The retirement services focus on planning and building long-term investment portfolios that assist investors to achieve their retirement goals. The retirement services segment started its operations during the first semester of 2023.

 

F-47

Vinci Partners Investments Ltd.

 

Notes to the interim consolidated financial statements

All amounts in thousands of reais unless otherwise stated

 

      Three-month period ended 03/31/2024
   Private Market Strategies  Public Equities  Investment Products and solutions  Corporate Advisory  Vinci Retirement Services  Corporate Center  Total
In Brazil   65,466    2,210    19,869    188    169    -    87,902 
Abroad   1,485    14,988    1,964    10,132    -    -    28,569 
Gross revenue from services rendered   66,951    17,198    21,833    10,320    169    -    116,471 
Fund Advisory fee   605    -    9    10,320    -    -    10,934 
Fund Management fee   66,338    14,864    21,814    -    169    -    103,185 
Fund Performance fee   8    2,334    10    -    -    -    2,352 
Taxes and contributions   (3,871)   (977)   (2,003)   (523)   (11)   -    (7,384)
Net revenue from services rendered   63,081    16,221    19,831    9,797    158    -    109,087 
(-) General and administrative expenses   (11,444)   (3,700)   (5,390)   (3,507)   (2,869)   (28,600)   (55,510)
Share-based payments   (61)   (13)   (10)   -    -    (6,064)   (6,148)
Operating profit   51,576    12,508    14,431    6,290    (2,711)   (34,664)   47,429 
Finance income                                 32,611 
Finance cost                                 (23,948)
Finance result, net                                 8,663 
Profit before income taxes                                 56,092 
Income taxes                                 (10,384)
Profit for the period                                 45,708 

F-48

Vinci Partners Investments Ltd.

 

Notes to the interim consolidated financial statements

All amounts in thousands of reais unless otherwise stated

 

      Three-month period ended 03/31/2023 (Restated)
   Private Market Strategies  Public Equities  Investment Products and solutions  Corporate Advisory  Vinci Retirement Services  Corporate Center  Total
In Brazil   44,806    15,701    21,944    4,582    -    -    87,034 
Abroad   17,384    1,190    3,849    -    -    -    22,423 
Gross revenue from services rendered   62,190    16,891    25,793    4,582    -    -    109,457 
Fund Advisory fee   300    -    9    4,582    -    -    4,891 
Fund Management fee   61,883    15,701    24,907    -    -    -    102,491 
Fund Performance fee   7    1,190    877    -    -    -    2,075 
Taxes and contributions   (3,477)   (1,097)   (2,179)   (396)   -    -    (7,149)
Net revenue from services rendered   58,713    15,794    23,614    4,186    -    -    102,308 
(-) General and administrative expenses   (9,607)   (3,007)   (7,516)   (1,293)   (1,394)   (29,204)   (52,023)
Share-based payments   (264)   (72)   184    -    -    (1,955)   (2,107)
Operating profit   48,842    12,715    16,282    2,893    (1,394)   (31,159)   48,178 
Finance income                                 4,253 
Finance cost                                 (6,844)
Finance result, net                                 (2,591)
Profit before income taxes                                 45,587 
Income taxes                                 (12,881)
Profit for the period                                 32,706 

F-49

Vinci Partners Investments Ltd.

 

Notes to the interim consolidated financial statements

All amounts in thousands of reais unless otherwise stated

 

23Legal Claims

 

As of March 31, 2024 and December 31, 2023, the Entity is not aware of disputes classified as probable chance of loss.

 

Find below the disputes classified as possible chance of loss segregated into labor, tax and civil,

 

   03/31/2024  12/31/2023
       
Tax   22,644    22,095 
Labor   37    780 
Total   22,681    22,875 

 

Tax Claims

 

Vinci Gestora de Recursos Ltda, is a party to a tax administrative proceeding in course arising from the payment of social security contributions (employer's portion and Work Accident Insurance (SAT)) in 2011, charged on amounts paid by virtue of quota of profits and results, totaling R$ 3,717 (December 31, 2023: R$ 3,652).

 

Vinci Equities Gestora de Recursos Ltda, has one proceeding related to the requirement of ISS (excise tax) under rendered services to investment funds located abroad in the amount of R$ 273 (December 31, 2023: R$ 266). Supported by the opinion of its legal advisors, management classified these proceedings as having a possible risk of loss and did not record a provision for contingencies related to these proceedings.

 

On December 21, 2018, the Brazilian federal revenue opened a tax assessment against Vinci Equities for the collection of open debts of IRPJ, CSLL, PIS and COFINS in the amount of R$ 18,631 (December 31, 2023: R$ 18,154) for the calendar year of 2013.

 

24Share-based payments

 

The Entity provides benefits to its employees through a share-based incentive. The following item refers to the outstanding plan on March 31, 2024.

 

Stock Options

 

May 2021

 

On May 6, 2021, the Entity launched a Stock Option Plan (“SOP” or “Plan”) in order to grant stock options to certain key employees (“Participants”) to incentivize and reward such individuals. These awards are scheduled to vest over a three-year period and the holders of vested options are entitled to purchase shares at the market price of the shares at grant date. This right may be subject to certain conditions to be imposed by the Entity and aims at aligning the interests of the Entity's shareholders with those of the Participants. Each option will entitle the Participant to acquire 1 Class A common shares issued by the Company.

 

The issue or purchase price of the shares to be subscribed or purchased by the Participants (“Exercise Price”) will be US$18,00. The Exercise Price will be reduced by the amount in dollars per share distributed to its shareholders from the date of execution of this Plan, whether as dividends, interest on equity, redemption, capital reduction or other events defined by the Board of Directors.

 

As of March 31, 2024, there are stock options outstanding with respect to 1,482,753 Class A common shares. All the stock options were vested on February 1st, 2024, and the Participants have a period of 12 months to exercise their vested options from February 1, 2024 (“Exercise Deadline”).

 

The total expense recognized for the programs for the three- month period ended March 2024 was R$ 119 (December 31, 2023 was R$ 120).

 

February 2023

 

In February 2023, the Board of Directors approved a second Stock Option Plan, which aims to grant up to 1,150,000 options, each entitling the beneficiary to purchase one Class A common share, Such options have an exercise price per share equal to US$9,96; provided that, unless otherwise provided for in an option agreement, this exercise price will be reduced by the amount per share distributed to our shareholders from the date of the grant of the option, whether as dividends, interest on capital, redemption, capital reduction or others. Options will become eligible to be exercised in May 2026. During the second quarter of 2023 the Entity and its subsidiaries issued stock option in connection to the related Plan.

 

F-50

Vinci Partners Investments Ltd.

 

Notes to the interim consolidated financial statements

All amounts in thousands of reais unless otherwise stated

 

As of March 31, 2024, there are stock options outstanding with respect to 1,116,884 Class A common shares.

 

The total expense recognized for the programs for the three-month period ended March 2024 was R$ 977.

 

January 2024

 

In January 2024, the Board of Directors approved a third Stock Option Plan, which aims to grant up to 1,274,000 options, each entitling the beneficiary to purchase one Class A common share. Such options have an exercise price per share equal to US$11,04; provided that, unless otherwise provided for in an option agreement, this exercise price will be reduced by the amount per share distributed to our shareholders from the date of the grant of the option, whether as dividends, interest on capital, redemption, capital reduction or others. Options will become eligible to be exercised in January 2027. During the first quarter of 2024 the Entity and its subsidiaries issued stock option in connection to the related Plan.

 

As of March 2024, there are stock options outstanding with respect to 1,273,492 Class A common shares.

 

The total expense recognized for the programs for the three-month period ended March 2024 was R$ 1,430.

 

Restricted Share Unit (RSU)

 

a)       Restricted Shares Units Plan

 

On April 04, 2022, the Entity announced its Restricted Share Unit Award Plan (“Plan”). The purpose of this Plan is to provide the opportunity for officers and employees of Vinci and its Subsidiaries, as elected by the Executive Compensation Committee, to receive restricted Shares (“RSU”). Shares representing up to 1,65% of the total amount of the capital stock of the Company, which equals, on this date, approximately 950,000 shares.

 

Under the Plan, stocks are awarded to the recipient upon their grant date. Subject to the terms of the Plan, each RSU shall grant the beneficiary the right to receive one (1) share, subject to the satisfaction of the conditions for acquisition of the shares. The RSUs awarded to the beneficiary shall be vested in different tranches, as long as the service condition is fulfilled and verified. The vesting dates may vary from 1 to 6 years after the granted date, accordingly to the dates defined in each Restricted Share Unit Award Agreement.

 
If an eligible participant ceases its relationship with the Group, within the vesting period, the rights will be forfeited, except in limited circumstances.

 

b)       Fair value of shares granted.

 

Estimating fair value for share-based payment transactions requires determination of the most appropriate valuation model and underlying assumptions, which depends on the terms and conditions of the grant and the information available at the grant date.

 

The Company uses certain assumptions to determine the RSUs fair value at the granted date, including the following:

 

Market value of the shares at the granted date.

Estimative of dividend yield and the US interest rate for the years comprised from the granted date until the vesting dates.

 

These estimates also require determination of the most appropriate inputs to the valuation models including assumptions, regarding the expected life of a share-based payment.

 

F-51

Vinci Partners Investments Ltd.

 

Notes to the interim consolidated financial statements

All amounts in thousands of reais unless otherwise stated

 

c)       Outstanding shares granted and valuation inputs

 

The total RSUs awarded for this Plan was 781,881. The table below summarize the activity for the year ended December 31, 2023, and for the three-month period ended March 31, 2024.

 

   03/31/2024  12/31/2023
       
RSU outstanding on January 1st   688,779    781,881 
Granted   -    - 
Forfeited   -    (35,689)
Vested   -    (57,413)
RSU outstanding on December 31   688,779    688,779 

 

d)       As of March 31, 2024, total compensation expense of the plans was R$ 3,622 (R$ 1,987 as of March 31, 2023), including R$ 1,869 (R$ 121 as of March 31, 2023) of social charges provisions.

 

25Deferred Revenue

 

In accordance with the Partnership Agreement of Vinci Private Equity and Vinci Impact and Return Offshore Funds, management fees are payable in advance semiannually on January 1 and July 1. The revenue fees are recognized monthly on a linear basis during the semester. The deferred revenue balance in March is R$10,419.

 

26Subsequent Events

 

MAV Capital business combination

 

On April 25, 2024, Vinci announced a transaction to acquire MAV Capital. Founded in 2021, MAV Capital is an alternative asset manager focused on the agribusiness sector. MAV Capital manages roughly R$550 million in assets, through five investment vehicles comprising more than 35 in-house structured credit operations across a number of sectors, such as agribusiness, real estate and infrastructure.

 

The transaction will have an initial cash component, with an additional consideration in cash through an earnout structure to be paid in 2028, subject to the achievement of certain incremental management fee revenue targets. The transaction is expected to close in the third quarter of 2024, subject to regulatory approvals and other customary closing conditions.

 

F-52