C&A Modas S A : 2022 Financial Statements

Individual and Consolidated Financial Statements under BR GAAP and IFRS

C&A Modas S.A.

December 31, 2022 and 2021

and Independent Auditor´s Report

C&A Modas S.A.

Individual and Consolidated Financial Statements

December 31, 2022 and 2021

Contents

Report of the independent auditor on the individual and consolidated financial statements
Financial Statements
Statements of financial position	7
Statement of earnings	9
Statements of comprehensive income (loss)	10
Statements of changes in equity	11
Statements of cash flow	12
Statement of value added	13
Notes to the financial statements	14

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Av. Presidente Juscelino Kubitschek, 1.909

Vila Nova Conceição

04543-011 - São Paulo - SP - Brasil

Tel: [phone] ey.com.br

A free translation from Portuguese into English of Independent Auditor's Report on Individual and Consolidated Financial Statements prepared in Brazilian currency in accordance with accounting practices adopted in Brazil and with the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB)

Independent auditor´s report on the individual and consolidated financial statements

To the Management and Shareholders of

C&A Modas S.A.

Barueri - SP

Opinion

We have audited the individual and consolidated financial statements of C&A Modas S.A. ("Company"), identified as Parent Company and Consolidated, respectively, which comprise the statement of financial position as at December 31, 2022 and the statements of operations, comprehensive income (loss), changes in equity and cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying financial statements present fairly, in all material respects, the individual and consolidated financial position of C&A Modas S.A. as at December 31, 2022, and its individual and consolidated financial performance and cash flows for the year then ended in accordance with the accounting practices adopted in Brazil and with the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB).

Basis for opinion

We conducted our audit in accordance with Brazilian and International Standards on Auditing. Our responsibilities under those standards are further described in the 'Auditor's responsibilities for the audit of the individual and consolidated financial statements' section of our report. We are independent of the Company and its subsidiaries and in accordance with the relevant ethical principles set forth in the Code of Professional Ethics for Accountants, the professional standards issued by the Brazilian National Association of State Boards of Accountancy ("CFC") and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the individual and consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter, including any commentary on the findings or outcome of our procedures, is provided in that context.

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We have fulfilled the responsibilities described in the "Auditor's responsibilities for the audit of the individual and consolidated financial statements" section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying financial statements.

Recoverability of deferred income and social contribution tax assets

As disclosed in Note 14, the Company has recorded deferred income and social contribution tax assets in the amount of R$710,110 thousand as at December 31, 2022, computed on temporary differences and income and social contribution tax losses carryforward. The Company evaluated the recoverability of deferred income and social contribution tax assets based on projections of future taxable profits.

We consider this to be a key audit matter since this evaluation involves a high degree of professional judgment by Management based on assumptions and criteria used in determining the projections of taxable profits, which are affected by future market expectation and economic conditions.

How our audit conducted this matter

Our procedures included, among others, the engagement of subject matter experts in valuation and taxes to assist us in assessing the assumptions and methodology used by the Company, in particular those related to the projections of future taxable profits. Projections of future taxable profits were prepared based on the Company's business plan, which was approved by the Management's bodies. We also evaluated the appropriateness of the disclosures related to this matter in Note 14.

Based on the result of the audit procedures performed on the recoverability of deferred income and social contribution tax assets, which is consistent with Management's assessment, we consider that the criteria and assumptions adopted by Management, as well as the related disclosures in Note 14 are acceptable in the context of the financial statements taken as a whole.

Realization of extemporaneous tax credits

As disclosed in Note 12, on December 31, 2022, the Company has extemporaneous tax credits related to PIS and COFINS in the amount of R$1,363,664 thousand and ICMS in the amount of R$ 75,382 thousand, arising from legal claims that have already become final ruling and causes that await the final ruling, but whose probability of favorable outcome to the Company is considered by the legal advisors as being virtually certain. The Company evaluated the recoverability of these balances based on projections of its prospective financial information.

We consider it as a main audit subject since such assessment involves a high degree of professional judgment by management in determining assumptions and criteria used in these projections of prospective financial information, which are affected by future market expectation and economic conditions.

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