Valid Soluções S A : Financial Statements 4Q23*

Individual and Consolidated Financial Statements

Valid Soluções S.A.

December 31, 2023

with Independent Auditor's Report

Valid Soluções S.A.
Individual and consolidated financial statements
December 31, 2023
Contents
Independent auditor's report on the individual and consolidated financial statements	..........................1
Financial statements
Statements of financial position	8
Statements of profit or loss	10
Statements of comprehensive income	11
Statements of changes in equity	12
Statements of cash flows	13
Statements of value added	14
Notes to the individual and consolidated financial statements	15

Centro Empresarial PB 370

Praia de Botafogo, 370

8º ao 10º andares - Botafogo

22250-040 - Rio de Janeiro, RJ, Brasil

Tel: [phone]

Fax: [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 the accounting practices adopted in Brazil and 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

The Shareholders, Board of Directors and Officers

Valid Soluções S.A.

Rio de Janeiro - RJ

Opinion

We have audited the individual and consolidated financial statements of Valid Soluções S.A. (the "Company"), identified as Individual and Consolidated, respectively, which comprise the statement of financial position as at December 31, 2023, and the statements of profit or loss, of comprehensive income, of changes in equity and cash flows for the year then ended, and notes to the financial statements, including material accounting policy information.

In our opinion, the accompanying financial statements present fairly, in all material respects, the individual and consolidated financial position of the Company as at December 31, 2023, 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 the 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 in accordance with the relevant ethical principles set forth in the Code of Professional Ethics for Accountants and the professional standards issued by Brazil's 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.

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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.

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.

1. Impairment of goodwill and deferred tax credits

As mentioned in Notes 6.b and 10, at December 31, 2023, the Company has significant balances of goodwill and deferred tax assets. These assets are annually tested for impairment to determine whether there are any events or economic changes, operational or technological circumstances that may indicate that those assets are impaired. The impairment test of these assets, including, in the case of goodwill, the definition of Cash-Generating Units (CGU), is highly subjective and is based on various assumptions that the outcomes are affected by market projections and uncertain economic scenarios.

Due to the significance of the balances, the level of uncertainty and the high degree of judgment inherent to determining these recoverable amounts, we considered this a key audit matter.

How our audit addressed this matter

Our audit procedures included, among others: (i) assessing the criteria used to identify CGUs; (ii) involving specialists to assist us in evaluating the impairment projections prepared by the executive board; (iii) assessing the adequacy and consistency of assumptions used in the estimates and projections of future cash flows and taxable profit, comparing them with data from external sources, where available, such as projected economic growth and cost inflation; (iv) evaluating the calculation methodology and sensitivity analysis of the assumptions; and (iv) reviewing the disclosures in the Company financial statements.

Based on the result of the audit procedures, which is consistent with the executive board's assessment, we considered the estimates prepared by the executive board, as well as the respective disclosures, acceptable in the context of the financial statements as a whole.

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2. Revenue recognition

As mentioned in Note 2.6, the Company recognizes its revenue on an accrual basis at a specific point in time as services are rendered and the control over the goods is transferred to the customer, for an amount that reflects the consideration the Company expects to receive in exchange for these goods or services. The high transaction volume requires controls and processes that ensure the integrity of the transactions.

Due to the significance of the amounts involved and the characteristics inherent in the revenue recognition process, as well as the transaction volume and accuracy of the information captured, including those generated in other jurisdictions within the accrual period, we considered this matter a key audit matter.

How our audit addressed this matter

Our audit procedures included, among others: (i) understanding the Company's internal processes for measuring and recognizing revenue; (ii) external confirmation procedures for a sample of the base that makes up the balance of accounts receivable by sending confirmation letters; (iii) checking, on a sampling basis, the supporting documentation of sales made and services rendered in the year; (iv) cut-off test of revenue accrual period, including checking of documentation that proves the delivery of the goods and/or services; (v) monthly analysis of revenues using aggregated and disaggregated data in order to identify relations or changes contrary to our expectations based on our knowledge of the Company and industry; and (vi) review of the disclosures in the Company financial statements.

Based on the result of our audit procedures, which is consistent with executive board's assessment, we considered the Company's revenue recognition policies acceptable to support the judgments, estimates and information included, in the context of the financial statements as a whole.

3. Acquisition of Flexdoc Tecnologia da Informação Ltda. ("FlexDoc")

As disclosed in Note 9 to the financial statements, on May 22, 2023, the Company acquired 100% of Flexdoc. This transaction was accounted for using the acquisition method, which requires measuring, on the acquisition date, the fair value of the consideration transferred, the assets acquired and liabilities assumed. In a business combination, this assessment involves a high degree of judgment and requires that fair value estimates be prepared based on calculations and assumptions relating to the future performance of the business acquired, which are subject to a high degree of uncertainty.

Due to the relevance, complexity, and subjectivity involved, we considered this matter a key audit matter.

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How our audit addressed this matter

Our procedures relating to the business combination included, among others, reading the documents related to the transaction, such as contracts and minutes, and obtaining the evidence that supported the determination of the date the entity obtained control. With the involvement of our business valuation experts, we analyzed the methodology used to measure the consideration transferred, the assets acquired and liabilities assumed at fair value, and evaluated the reasonableness of the assumptions used and calculations made, comparing them with market information, where available; we also performed sensitivity analysis on the key assumptions used and the impacts of possible changes in such assumptions on the fair values computed. We also analyzed the acquiree's financial information and discussed with the executive board about the consistency of accounting practices and estimates. Based on the information analyzed, we recalculated goodwill and also evaluated the adequacy of the disclosures in the Company financial statements.

Based on the result of the audit procedures, which is consistent with the executive board's assessment, we considered the criteria and assumptions adopted by the executive board, as well as the respective disclosures, acceptable in the context of the financial statements as a whole.

Other matters

Statements of value added

The individual and consolidated statements of value added (SVA) for the year ended December 31, 2023, prepared under the responsibility of the Company's executive board, and presented as supplementary information for purposes of IFRS, were submitted to audit procedures conducted together with the audit of the Company's financial statements. To form our opinion, we evaluated if these statements are reconciled to the financial statements and accounting records, as applicable, and if their form and content comply with the criteria defined by NBC TG 09 - Statement of Value Added. In our opinion, these statements of value added were prepared fairly, in all material respects, in accordance with the criteria defined in the abovementioned Accounting Pronouncement, and are consistent in relation to the overall individual and consolidated financial statements.

Other information accompanying the individual and consolidated financial statements and the auditor's report

The executive board is responsible for such other information, which comprise the Management Report.

Our opinion on the individual and consolidated financial statements does not cover the Management Report and we do not express any form of assurance conclusion thereon.

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In connection with our audit of the individual and consolidated financial statements, our responsibility is to read the Management Report and, in doing so, consider whether this report is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of the Management Report, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of the executive board and those charged with governance for the individual and consolidated financial statements

The executive board is responsible for the preparation and fair presentation of the individual and consolidated financial statements in accordance with the accounting practices adopted in Brazil and with the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB), and for such internal control as the executive board determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the individual and consolidated financial statements, the executive board is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the executive board either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Company's and its subsidiaries' financial reporting process.

Auditor's responsibilities for the audit of the individual and consolidated financial statements

Our objectives are to obtain reasonable assurance about whether the individual and consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Brazilian and International Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

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As part of an audit in accordance with the Brazilian and International Standards on Auditing, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identified and assessed the risks of material misstatement of the individual and consolidated financial statements, whether due to fraud or error, designed and performed audit procedures responsive to those risks, and obtained audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtained an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's and its subsidiaries' internal control.
• Evaluated the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the executive board. Concluded on the appropriateness of the executive board's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the individual and consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or future conditions may cause the Company to cease to continue as a going concern.
• Evaluated the overall presentation, structure and content of the financial statements, including the disclosures, and whether the individual and consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
• Obtained sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the group to express an opinion on the individual and consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements, including applicable independence requirements, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

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From the matters communicated with those charged with governance, we determined those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Rio de Janeiro, March 6, 2024.

ERNST & YOUNG

Auditores Independentes S.S. Ltda.

CRC-SP015199/O

Wilson J. O. Moraes

Accountant CRC 1RJ 107.211/O-1

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A free translation from Portuguese into English of individual and consolidated financial statements prepared in Brazilian currency in accordance with the accounting practices adopted in Brazil and the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB)

Valid Soluções S.A.

Statements of financial position

December 31, 2023 and December 31, 2022 (In thousands of reais)

Note	Individual	Consolidated
12/31/2023	12/31/2022	12/31/2023	12/31/2022

Assets
Current assets
Cash and cash equivalents	4
Restricted financial investment	4
Trade accounts receivable	5
Related parties	14
Taxes recoverable	6.a
Inventories	7
Other
Assets available for sale and discontinued	27
operations
Noncurrent assets
Marketable securities	4
Restricted short-term investment	4
Trade accounts receivable	5
Related parties	14
Taxes recoverable	6.a
Judicial deposits	8
Deferred income and social contribution taxes	6.b
Other
Investments	9
Property, plant and equipment	11
Intangible assets	10

179,837	234,037	422,029	365,161
16,117	19,621	16,142	19,644
160,005	181,778	386,929	347,115
35,177	19,009	-	-
57,321	58,997	86,137	96,478
160,004	174,422	267,477	344,161
18,168	15,342	40,164	122,414
626,629	703,206	1,218,878	1,294,973
12,749	14,949	48,557	16,746
13,538	11,940	13,538	11,940
180,780	128,423	180,780	128,423
-	3,818	-	3,818
36,944	88,192	2,038	2,138
71,891	83,892	71,891	83,892
19,455	19,132	19,767	19,365
17,971	22,006	93,644	103,855
10,453	9,663	13,525	12,418
873,515	784,531	18,886	56,975
164,000	209,832	207,775	262,562
31,513	39,666	656,347	666,246
1,420,060	1,401,095	1,278,191	1,351,632

Total assets

2,059,438

2,119,250

2,545,626

2,663,351

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