Moura Dubeux Engenharia S A : Dados Econômico-Financeiros

(Free translation from the original issued in Portuguese. In the event of any discrepancies, the Portuguese language version shall prevail.)

Individual and consolidated financial statements and independent auditor's report

As of December 31, 2021

	Page
Independent auditor's report	3
Individual and consolidated financial statements	9
Notes to the individual and consolidated financial statements for the
year ended December 31, 2021	16
Appendix I	64

(Free translation from the original issued in Portuguese. In the event of any discrepancies, the Portuguese language version shall prevail. See Note 30 to the financial statements.)

Grant Thornton Auditores

Independentes

Rua Padre Carapuceiro, 752 -

6oandar, Sala 601 Boa Viagem, Recife (PE) Brasil

T [phone]

To the Shareholders and Management of

Moura Dubeux Engenharia S.A.

Recife - PE

Opinion on the individual and consolidated financial statements prepared in accordance with accounting practices adopted in Brazil and the International Financial Reporting Standards (IFRS) applicable to real estate development entities in Brazil, registered with the Brazilian Securities and Exchange Commission (CVM).

We have audited the accompanying individual and consolidated financial statements of Moura Dubeux Engenharia S.A. ("Company"), identified as Parent and consolidated, respectively, which comprise the statement of position as of December 31, 2021, and the statement of profit and loss, statement of comprehensive loss, statement of changes in equity, and statement of cash flows for the year then ended, and the corresponding explanatory notes, including a summary of significant accounting policies.

In our opinion, the financial statements present fairly, in all material respects, the individual and consolidated financial position of Moura Dubeux Engenharia S.A. as of December 31, 2021, and its individual and consolidated financial performance and individual and consolidated cash flows for the year then ended, in accordance with accounting practices adopted in Brazil and the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB) applicable to real estate development entities in Brazil, registered with the Brazilian Securities Commission (CVM).

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Basis for opinion

We conducted our audit in accordance with Brazilian and International Standards on Auditing (ISAs). 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 requirements set forth in the Code of Ethics for Professional Accountants and the professional standards issued by the Federal Accounting Council 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 audit opinion.

Emphasis of matter

Recognition of revenues from uncompleted units

As described in Note 3.16, the individual and consolidated financial statements were prepared in accordance with accounting practices adopted in Brazil and the International Financial Reporting Standards (IFRS) applicable to real estate development entities in Brazil, registered with the Brazilian Securities Commission (CVM). Therefore, the determination of the accounting policy adopted by the entity to recognize revenue from contracts relating to purchase and sale of uncomplete real estate units, on aspects relating to transfer of control, is in accordance with the Company´s management´s understanding as to the application of NBC TG 47 (IFRS 15), aligned with that expressed in CVM Official Letter/SNC/SEP No. 02/2018. Our opinion is not qualified regarding this matter.

Key audit matters

Key audit matters are those matters that, in our judgment, were of most significance in our audit of the financial statements in the current period. These matters were addressed in the context of our audit of the individual and consolidated financial statements taken as a whole and in forming our opinion on such individual and consolidated financial statements, and, therefore, we do not provide a separate opinion on these matters.

1. Determination of revenue from real estate development activities and allowance for sales cancellations

Why the matter was determined to be a KAM

As mentioned in Note 3.16 - Recognition of revenue from sale of properties and provision of services, the revenue from real estate development activities, relating to each project that is under construction, are determined by the Company and its subsidiaries considering the respective stages of completion, by using the percentage-of-completion (POC) method, in conformity with CVM Official Letter/SNC/SEP No. 02/2018.The procedures to determine, measure, compute and record revenues from real estate development activities involve, among other aspects, the use of estimates based on budgeted costs and costs incurred on projects under the calculation criteria established in the POC methodology. In this regard, the controls, assumptions and adjustments used to prepare the budgets for projects under construction may significantly affect the Company´s revenue recognition, thus impacting its profit and loss and respective performance.

Additionally, when sales contracts are cancelled, revenues, costs and expenses that had been previously recognized are reversed (in conformity with CVM Official Letter/SNC/SEP No. 02/2018), since, with respect to units sold, for which there is risk of default but whose sale contract was not actually cancelled), the Company and its subsidiaries recognize an allowance for sales cancellations.

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The Company and its subsidiaries, through internal analyses, based on Management´s judgment, adopt criteria and assumptions to identify and map risks that cash will not be generated from these contracts, which are then qualified to be included in the allowance for sales cancellations. Due to the materiality of the revenue cycle, any changes in the judgment of the estimate of sales cancellations will consequently change the allowance for sales cancellations, which may significantly impact the individual and consolidated financial statements.

Therefore, this matter was again considered a key audit matter because net revenue is a material component in relation to the income statement and a critical item for the real estate development sector and respective performance measurement, since any changes in the budget of the works, the margins, non-satisfaction of performance obligations as well as any sales cancellations that are not identified on a timely basis or not anticipated in the allowance for sales cancellations may have a significant impact on the Company's individual and consolidated financial statements. Therefore, we considered this a key audit matter in accordance with the standards on auditing, since revenue recognition is supported by estimates based on budgeted costs (among other metrics) which may be subjective in nature through the end of the work.

How the matter was addressed in our audit

Regarding the profit and loss from real estate development activities, our auditing procedures included, among others: (a) understand the process and main control activities used by Management to determine the profit and loss arising from real estate development activities; (b) on a sampling basis, we obtained the budgets approved by Management and matched them to the amounts used in calculating the profit and loss from real estate development activities; (c) analyze unincurred cost estimates (approved by the Engineering Department), as well as profit and loss between actual and budgeted costs, obtain clarifications and examine evidence to support unusual variances; (d) test the arithmetic accuracy of the calculations made, including the determination of the percentage of completion applied to each project;

1. on a sampling basis, examine sales contracts, perform tests over subsequent cash receipts and recalculate the adjustment of trade receivables in conformity with the indices established in the underlying contracts; (f) on a sampling basis, test the documentation supporting the costs incurred and payments made, including costs on acquisition of plots of land; (g) analyze the controls over changes in capitalized interest and evaluate if such interest meets the requirements to qualify for capitalization.

Regarding the allowance for sales cancellations, our auditing procedures included, among others:

1. understand the process and main control activities used by Management to assess the risk associated with cash flow generation and the qualification of sales contracts for recognition of an allowance for sales cancellations; (b) analyze the assumptions and criteria for qualification of a sale contract for recognition of an allowance for sales cancellations; (c) test the arithmetic accuracy of the calculations made; (d) on a sampling basis, perform tests for completeness of the trade receivable portfolio, by analyzing the data used to measure and recognize the allowance for sales cancellations, by means of documental examination; (e) perform a comparative analysis and an analytical review of the provision recognized in prior year versus the sales cancellations recorded in the current year; (f) recalculate the model used by Management to measure the allowance for sales cancellations and develop an independent expectation, corroborating the balance of the provision recognized by Management.

Based on the procedures performed, we consider that the profit and loss from real estate development activities, the allowance for sales cancellations and respective disclosures are adequate in the context of the individual (as a result of the effects on investments and share of profit of investees) and consolidated financial statements taken as a whole.

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