Vulcabras Azaleia S A : ITR 4Q21*

Vulcabras S.A.

(formerly Vulcabras Azaleia S.A.)

Individual and consolidated financial statements December 31, 2021

(A Free Translation of the original report in Portuguese as published in Brazil contain individual and consolidated financial statements prepared in accordance with accounting practices adopted in Brazil and IFRS)

KPDS 988615

Vulcabras S.A. Individual and consolidated financial statements December 31, 2021

Contents

Independent auditors' report on individual and consolidated financial statements	3
Balance sheets	7
Statements of profit or loss	8
Statements of comprehensive income	9
Statement of changes in equity - Parent company and Consolidated	10
Statements of cash flows - Indirect method	11
Statements of added value	12
Notes to the individual and consolidated financial statements	13

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KPMG Auditores Independentes Ltda.

Ed. BS Design - Avenida Desembargador Moreira, 1300 SC 1001 - 10º Andar - Torre Sul - Aldeota 60170-002 - Fortaleza/CE - Brasil

Telefone [phone] kpmg.com.br

Independent auditors' report on individual and consolidated financial statements

To the Shareholders of

Vulcabras S.A.

Jundiaí - SP

Opinion

We have examined the individual and consolidated financial statements of Vulcabras S.A. ("Company"), identified as Parent Company and Consolidated, respectively, comprising the balance sheet as of December 31, 2021 and the related Statements of profit or loss, comprehensive income, changes in equity and cash flows for the year then ended, as well as the corresponding notes, comprising the significant accounting policies and other clarifying information.

In our opinion, the aforementioned financial statements present fairly, in all material respects, the individual and consolidated financial position of Vulcabras S.A as of December 31, 2021, the individual and consolidated performance of its operations and its individual and consolidated cash flows for the year then ended, in conformity with accounting practices adopted in Brazil and International Financial Reporting Standards - IFRS issued by the International Accounting Standards Board (IASB).

Basis for opinion

Our audit was conducted in accordance with Brazilian and international standards on auditing. Our responsibilities under those standards are further described in the following section denominated "Auditors' Responsibilities for the Audit of the Individual and Consolidated Financial Statements." We are independent in relation to the Company and its subsidiaries, in accordance with the relevant ethical principles provided for in the Accountant's Code of Professional Ethics and in professional standards issued by the Federal Accounting Council, and we comply with other ethical responsibilities according to these standards. 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 current year. These matters were addressed in the context of our audit of the individual and consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

KPMG Auditores Independentes Ltda., uma sociedade simples brasileira, de responsabilidade limitada e firma-membro da organização global KPMG de firmas-membro independentes licenciadas da KPMG International Limited, uma empresa inglesa privada de responsabilidade limitada.

KPMG Auditores Independentes Ltda., a Brazilian limited liability company and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee.

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Goodwill recoverable amount in business combinations

See Notes 3.10, 14 and 15 to the individual and consolidated financial statements

Key audit matters	How our audit addressed this matter
As disclosed in notes 3.10, 14 and 15, on	Our audit procedures included, among others,
December 31, 2021, the Company recorded	the evaluation, assisted by our corporate
the goodwill paid for expected future	finance experts, of the model adopted to
profitability in its consolidated intangible assets	measure the recoverable value and
in the amount of R$ 198,214, arising from the	assumptions, projections and methodologies
acquisition of businesses. The Company carries	adopted by the Company, specially those
out the impairment of goodwill test every year.	related to estimates of future sales, growth
This process is complex and involves a high	and discount rates used in discounted cash
level of subjectivity, and it is based on several	flows and the profit margin of cash generating
assumptions, such as the determination of	unit to which goodwill was allocated. Evaluate
cash generating units, discount rates,	the adequacy of the disclosures made by the
projection of inflation, growth percentages, and	Company on the assumptions used in the
profitability of business of the Company for the	impairment calculation, especially those that
next years. These assumptions will be affected	had the most significant effect on its
by the market conditions or future economic	calculation. Our audit procedures also included
scenarios, which cannot be precisely	assessing the reliability of the information
estimated. We consider the annual impairment	produced by the entity, assessing the flow and
test of goodwill generated from business	design of internal controls.
combinations as one of the key audit matters	As a result of evidence from the procedures
due to the high degree of subjectivity and
summarized above, we consider that the
complexity in the assumptions and calculations
balance of intangible assets related to goodwill
involved, as well as due to the impact that any
generated in business combination is
changes in assumptions could have on the
acceptable in the context of individual financial
amounts recorded in the individual financial
statements due to possible effects in the
statements based on the impact on
balance of investments and equity in net
investments and on the adoption of the equity
income of subsidiaries and consolidated
method and consolidated financial statements.
financial statements taken as a whole for the
	year ended December 31, 2021.

Other matters - Statements of added value

Individual and consolidated statements of added value for the year ended December 31, 2021, prepared under responsibility of Company's management, and presented as supplementary information for IFRS purposes, were submitted to audit procedures carried out together with the audit of Company's financial statements. To form our opinion, we evaluated whether these statements are reconciled with the financial statements and accounting records, as applicable, and whether their form and content are in accordance with the criteria defined in Technical Pronouncement CPC 09 - Statement of Added Value. In our opinion, these statements of added value were prepared, in all material respects, in accordance with the criteria defined in this Technical Pronouncement and are consistent in relation to the individual and consolidated financial statements taken as a whole.

KPMG Auditores Independentes Ltda., uma sociedade simples brasileira, de responsabilidade limitada e firma-membro da organização global KPMG de firmas-membro independentes licenciadas da KPMG International Limited, uma empresa inglesa privada de responsabilidade limitada.

KPMG Auditores Independentes Ltda., a Brazilian limited liability company and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee.

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Other information accompanying individual and consolidated financial statements and the auditors' report

The Company's management is responsible for such other information that comprises the Management Report.

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

In connection with our audit of the individual and consolidated financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the individual and consolidated 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 this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of management and governance for the individual and consolidated financial statements

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

In the preparation of individual and consolidated financial statements, management is responsible for assessing the ability of the Company to continue as a going concern, disclosing, where applicable, the matters relating to its going concern and the use of this basis of accounting in preparing the financial statements, unless management intends to wind-up the Company and its subsidiaries or cease its operations, or has no realistic alternative to avoid the closure of operations.

Those charged with governance of the Company and its subsidiaries are the people responsible for overseeing the process of preparation of the financial statements.

Auditors' Responsibilities for the Audit of the Individual and Consolidated Financial Statements

Our purposes are to obtain reasonable assurance that the individual and consolidated financial statements, taken as a whole, are free from material misstatement, whether caused by fraud or error, and to issue audit report containing our opinion. Reasonable assurance is a high level of assurance, but not a guarantee that the audit conducted pursuant to Brazilian and international auditing standards will always detect any existing material misstatements. Misstatements may arise from fraud or error, and are considered material when, individually or in aggregate, may influence, from a reasonable perspective, the economic decisions of users taken based on such financial statements.

As part of the audit conducted in accordance with Brazilian and international auditing standards, we exercise professional judgment and maintain our professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the individual and consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide 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.

KPMG Auditores Independentes Ltda., uma sociedade simples brasileira, de responsabilidade limitada e firma-membro da organização global KPMG de firmas-membro independentes licenciadas da KPMG International Limited, uma empresa inglesa privada de responsabilidade limitada.

KPMG Auditores Independentes Ltda., a Brazilian limited liability company and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee.

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