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PPLA Participations Ltd. Fund Information / Factsheet 2022

Sep 1, 2022

14935_10-k_2022-09-01_8ff488cd-a1f2-4a6e-a78c-770b78192626.html

Fund Information / Factsheet

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(A free translation of the original in Portuguese)

www.pwc.com.br

PPLA

Participations Ltd.

Financial statements at

December 31, 2021

and independent auditor's report

DocuSign Envelope ID: 5531E257-DC1B-4720-B38B-1DD6A594B629

(A free translation of the original in Portuguese)

PricewaterhouseCoopers, Av. Francisco Matarazzo 1400, Torre Torino, São Paulo, SP, Brasil, 05001-903,

T: +55 (11) 3674 2000, www.pwc.com.br

Independent auditor's report

To the Board of Directors and Shareholders

PPLA Participations Ltd.

Opinion

We have audited the accompanying financial statements of PPLA Participations Ltd. (the "Company"),

which comprise the balance sheet as at December 31, 2021 and the statements of income,

comprehensive income, changes in equity and cash flows for the year then ended, and notes to the

financial statements, including significant accounting policies and other explanatory information.

In our opinion the financial statements referred to above present fairly, in all material respects, the

financial position of PPLA Participations Ltd. as at December 31, 2021, and its financial performance

and its cash flows for the year then ended, in accordance with the International Financial Reporting

Standards (IFRS) as 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 financial statements" section of our report. We are independent of the Company in

accordance with the ethical requirements established in the Code of Professional Ethics and

Professional Standards issued by the Brazilian 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.

Material uncertainty related to going concern

We draw attention to Note 1 to these financial statements, which states that the Company has incurred

recurring decreases in shareholders' equity over the past few years for the reasons set out in that Note.

Management's plans for reversing this situation, are also described in Note 1, and depends on the

success of the initiatives taken by Management, through obtaining loans and capitalization, if

necessary. This situation, among others described in that Note, indicates the existence of significant

uncertainty that may cast significant doubts about the ability of the Company to continue as a going on

concern. Our conclusion is not qualified in respect of this matter.

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

financial statements as a whole, and in forming our opinion thereon,

and we do not provide a separate opinion on these matters.

In addition to the matter described in the "Material uncertainty related to

going concern" section, we have determined the matters described below

to be the key audit matters to be communicated in our report.

Matters

Why it is a

Key Audit

Matter

How the

matter was

addressed

DocuSign Envelope ID: 5531E257-DC1B-4720-B38B-1DD6A594B629

PPLA Participations Ltd.

3

Why it is a Key Audit Matter

How the matter was addressed in the audit

Fair value measurement of financial

instruments Level III

As disclosed in Notes 1, 3(f) and 5, the

Company has a investment in the subsidiary

PPLA Investments LP., which, as of

December 31, 2021, invested in financial

instruments as shares and quotas of privately-

held companies, classified as Level III, with

operations in different industries and locations.

These shares and quotas of privately held

companies, with no stock exchange quoted prices,

which are, as a result, valued at fair value

estimated by Management, in accordance with

the Company's assumptions and internal pricing

models, that are based mainly on cash flow,

and/or recent price negotiations transactions.

We consider this a focus area in our audit as the

use of different valuation techniques and

assumptions may produce significantly different

fair value estimates and also due to the

materiality of the derivative financial instruments

in the context of the financial statements.

Our main audit procedures considered, among

others, our understanding of the main processes

involving the fair value measurement of financial

instruments Level III.

With the support of our specialists, we had

meetings with those in the Management

responsible for the preparation and approval of

calculation of valuation of shares and quotas, in

order to establish, based on our experience and

judgment, whether the Company's measurement

work is consistent with the valuation techniques

usually applied in the market.

We also tested the valuation methodology as

well as the assumptions used by Management

through the following: (i) understanding

of the methodology used in the assessment;

(ii) comparison of assumptions observable

in the market, when applicable; (iii) performing

independent valuation on a test basis;

(iv) comparison with the information and

fair value obtained by the Company and

(v) comparison of the spreadsheets used for the

share and quotas valuation with the accounting

records and with the disclosures made in the

notes to the financial statements.

We believe that the criteria adopted by

management in the fair value measurement of the

derivative financial instruments are consistent

with the information analyzed in our audit.

Other matters

Audit of corresponding figures of the year

The audit of the financial statements for the year ended December 31, 2020 was conducted under the

responsibility of other independent auditors, who issued audit report, without modifications, dated

March 19, 2021.

Responsibilities of management and those charged with governance for the

financial statements

Management is responsible for the preparation and fair presentation of these financial statements in

accordance with the International Financial Reporting Standards (IFRS) as 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.

DocuSign Envelope ID: 5531E257-DC1B-4720-B38B-1DD6A594B629

PPLA Participations Ltd.

4

In preparing the financial statements, management 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 management 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 financial reporting process.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the 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 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.

As part of an audit in accordance with Brazilian and International Standards on Auditing, we exercise

professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the 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.

• Obtain 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 internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting

estimates and related disclosures made by management.

• Conclude on the appropriateness of management'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 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 conditions may cause the Company to

cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the financial statements, including the

disclosures, and whether the financial statements represent the underlying transactions and events

in a manner that achieves fair presentation.

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.

DocuSign Envelope ID: 5531E257-DC1B-4720-B38B-1DD6A594B629

PPLA Participations Ltd.

5

We also provide those charged with governance with a statement that we have complied with relevant

ethical requirements regarding independence, 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.

From the matters communicated with those charged with governance, we determine 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

6

.

São Paulo, March 21, 2022

PricewaterhouseCoopers

Auditores Independentes Ltda.

CRC 2SP000160/O-5

Edison Arisa Pereira

Contador CRC 1SP127241/O-0

DocuSign Envelope ID: 5531E257-DC1B-4720-B38B-1DD6A594B629

3

PPLAParticipationsLtd.

Balancesheet

AsatDecember31

(Inthousandsofreais)

Assets

Note

12/31/2021

12/31/2020

Cashandcashequivalents

‐

‐

Investmententityportfolio

5

10

5

Amountsreceivable

6

555

540

Totalassets

565

545



Liabilities

Otherliabilities

7

554

540

Totalliabilities

554

540



Shareholders'equity

Capitalstockandsharepremium

8a

1,504,802

1,504,802

Othercomprehensiveincome

424,143

424,142

Accumulatedlosses

(1,928,934)

(1,928,939)

Totalshareholders'equity

11

5

Totalliabilitiesandshareholders'equity

565

545

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

DocuSign Envelope ID: 5531E257-DC1B-4720-B38B-1DD6A594B629

4

PPLAParticipationsLtd.

Statementofincome 

AsatDecember31

(Inthousandsofreais,exceptprofit/(loss)pershare)

Note

12/31/2021

12/31/2020

Gain/(Loss)oninvestmententityportfoliomeasuredatfairvalue

10

5

(25)

Administrativeexpenses

11

(555)

(4,703)

Otheroperatingincome

12

555

4,703

Operatingprofit/(loss)

5

(25)

Profit/(Loss)fortheYear

5

(25)

Profit/(Loss)pershare‐basicanddiluted(inreais)

9

0.0018

(0.0013)

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

DocuSign Envelope ID: 5531E257-DC1B-4720-B38B-1DD6A594B629

5

PPLAParticipationsLtd.

Statementofcomprehensiveincome

YearsendedDecember31

(Inthousandsofreaisunlessotherwisestated)

12/31/2021

12/31/2020

Profit/(Loss)fortheYear

5

(25)

Othercomprehensiveincomenottobereclassifiedtoprofitorloss: 

1

4

Currencytranslationadjustments

1

4

Totalcomprehensiveincome/(loss)

6

(21)

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

DocuSign Envelope ID: 5531E257-DC1B-4720-B38B-1DD6A594B629

6

PPLAParticipationsLtd.

Statementofchangesinshareholders’equity

YearsendedDecember31

(Inthousandsofreaisunlessotherwisestated)

Capitalstock

andshare

premium

Othercomprehensive

income

Treasury

shares

Accumulated

losses

Total

shareholders'

equity

BalanceasofDecember31,2019

1,504,802

424,138

(2,954)

(1,925,960)

26

Cancelationoftreasuryshares

‐

‐

2,954

(2,954)

‐

Lossoftheyear

‐

‐

‐

(25)

(25)

Currencytranslationadjustments

‐

4

‐

‐

4

BalanceasofDecember31,2020

1,504,802

424,142

‐

(1,928,939)

5

Profitfortheyear

‐

‐

‐

5

5

Currencytranslationadjustments

‐

1

‐

‐

1

BalanceasofDecember31,2021

1,504,802

424,143

‐

(1,928,934)

11

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

DocuSign Envelope ID: 5531E257-DC1B-4720-B38B-1DD6A594B629

7

PPLAParticipationsLtd.

Statementofcashflows

YearsendedDecember31

(Inthousandsofreaisunlessotherwisestated)

Note

12/31/2021

12/31/2020

Operatingactivities

Profit/(Loss)fortheYear

5

(25)

Adjustmentstothelossfortheyear

Gain/(Loss)frominvestmententityportfoliomeasuredatfairvalue

10

(5)

25

Adjustedgain/(loss)fortheyear

‐

‐

Increase/(decrease)incashandcashequivalents

‐

‐

Balanceofcashandcashequivalents

Atthebeginningoftheyear

‐

‐

Attheendoftheyear

‐

‐

Increase/(decrease)incashandcashequivalents

‐

‐

Non‐cashtransactions

Amountsreceivable

(15)

(1,198)

Otherliabilities

14

1,198

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

DocuSign Envelope ID: 5531E257-DC1B-4720-B38B-1DD6A594B629

PPLAParticipationsLtd.

Notestothefinancialstatements

December31,2021

(Inthousandsofreais)

8

Notestotheinterimcondensedfinancialstatements

  1. Operations

PPLA Participations Ltd. ("PPLA Participations" or "Company") wa s constituted as a tax exempted

LimitedLiabilityCompanyunderthelawsofBermudaonMarch26,2010.OnDecember29,2010,the

Bermuda monetary authority approved the constitution of the Company. PPLA Participations

headsemestersislocatedonClarendonHouse,2ChurchStreet,

HM11,Hamilton,Bermuda.

TheCompanyhasappliedforandhasbeengrantedexemptionfromallformsoftaxationinBermuda

untilMarch31,2035,includingincome,capitalgainsandwi thholdingtaxes.Injurisdictionsotherthan

Bermuda,someforeigntaxeswillbewithheldatsourceondividendsandcertaininterestreceived

by

theCompany.

PPLAParticipations(together withBTGPactual, the“Group”)haveunitslistedonNYSEEuronext in

AmsterdamandB3inSãoPaulo.Eachunitissued,correspondsto1classAsharesand2classBshares 

ofPPLAParticipationsLtd.AllunitslistedandtradedinAmsterdamremained

whollyinterchangeable

withtheunitsinBrazil.

TheCompanyisthesoleownerofBTGBermudaLPHoldcoLtd("BTGHoldco")which,onDecember

29, 2010, received a Class C common share from BTG Pactual Managemen t Ltd. and thus became

general partner of PPLA Investments  LP. (“PPLA Investments“), previously denominated BTG

InvestmentsLP.Asaconsequenceofthistransaction,theCompanyobtainedtherighttocontrolthe

financialandoperatingpoliciesofPPLAInvestments.

PPLAInvestmentswasformedin2008andmakesproprietarycapitalinvestmentsinawiderangeof

financialinstruments,includingMerchantBankinginvestmentsinBrazilandoverseas,and

avarietyof

financialinvestmentsinglobalmarkets.

BTGPactual’sassetmanagementareamanagesPPLAInvestments’assets andreceivesfeesatarm’s

length.

The Management of PPLA Investments is monitoring the recurring reduction in the Company's

Shareholders' Equity over the last few years, mainly due to losses arising from negative

mark‐to‐

market in its investment entity portfolio.Reverting the deficitary situation requires a successful

implementation ofManagement'sinitia tivesthrough loans‐made between theCompanyandBTG

MBInvestmentsLP(“BTGMB”)‐whichcanbecapitalized,ifnecessary.

Althoughthedeficitpictureportraitstheexistenceofarelevantuncertaintythatcan

raise questions

abouttheCompany's operationalcontinuity,managementevaluationcametoconclude,bas edonthe

aforementionedinitiatives,thatPPLAInvestmentshasthecapacitytocontinueoperatinginthenext

12months.

DocuSign Envelope ID: 5531E257-DC1B-4720-B38B-1DD6A594B629

PPLAParticipationsLtd.

Notestothefinancialstatements

AsofDecember31,2021

(Inthousandsofreais)

9

COVID‐19

TheCompany’smanagementistrackingtheeffectsCOVID‐19mayhaveonitsbusiness.Anyoutcome

predictionishamperedduetothesituation’srapidandfluiddevelopment,whichcanleadtoafallout

ineconomicandmarketconditions,triggeringadeclineinglobaleconomicactivity.TheCompanyis

monitoringalldevelopmentsrelatedtoCOVID‐19andcoordinatingitsoperatingresponse,takinginto

account the contin uity plans from preexisting business  ventures and on the guidelines exposed by

globalhealthorganizations,governmentsandgeneralbest

practicesinresponsetothispandemic.The 

COVID‐19 pandemic has had, and continues to have, a  material impact on businesses around the

world, including ours, and the economic and  political environments in which businesses operate.

There are a number of factors  associated with the ongoing COVID ‐19 pandemic and its

 impact on

globaleconomiesthatcouldhaveamaterialadverseeffectonourbusiness,financialcondition,results

ofoperations,cashflows,prospectsandthemarke t priceofoursecurities.Inparticular,theCOVID‐

19pandemichasaffectedbusinessandeconomicexpectations,causingsignificantvolatilityinglobal

marketsandaffectingthe

outlookoftheBrazilianeconomyandthatofothercountriesinwhichwe

maintain investments, may in the future make investments and conduct business through our

subsidiaries.

LoanAgreement

OnFebruary28,2020, March17, 2020 andMay 5,200,PPLA Investments(“PPLAI”)received loans

fromBTGMB,througha

LoanAgreement,intheamountsofUS$72million,U$29millionandU$43

million, respectively, with maturities of 1 (one) year, of the respective loans dates, paying interes t

indexedtothe3(three)monthLIBORaddedof2.85%spreadperyear.Thisloanagreementincludes

thepossibilityofbeingtotallyorpartially

convertedintocapital,oncecertainconditionsaremet.

OnJune21st,2021PPLAIenteredintoaLoanAgreementwithBTGMBInvestmentsLP("BTGMB")in

whichPPLAIapprovedacreditlinewithBTGMBthatcouldamounttoR$750million,tobedisbursed

accordingtoPPLAIrequest,ondates

andamountsofthecompanyloaninstallments,onthefollowing

dates:June21st,2021,July9th,2021,December16th,2021,June14th,2022,December12th,2022

andJune9th,2023,with30monthsmaturitystartingattheissuancedate,payinginterestsindexed

to117.3%ofCDIrate.Attheagreementdate,theseloan

agreementsdonotincludethepossibilityof

being totally or partially converted into capital. On June 21st, 2021 PPLAI requested the first

disbursement ofapproxi mately R$ 90 million,which was made onthe samedatebyBTG  MB.The

Loan was carried out within the scope of the Company's

initiatives to address its economic and

financialsituationandPPLAInvestments'recurringcapitalneeds,especiallyconsideringthematurity

ofcertainloansandliabilitiesintheshortterm.

OnJuly9,2021,PPLAInvestmentsrequestedtheseconddisbursementfromBTGMBintheamount

ofapproximatelyR$160million,whichwasmade

onthesamedate.

On December 16, 2021, PPLA Investments requested the third disbursement from BTG MB in the

amountofapproximatelyR$116million,whichwasmadeonthesamedate.

TheLoanwascarriedout withinthe scopeoftheCompany'sinitiativestoaddressitseconomicand

financialsituationand

PPLAInvestme nts'recurringcapitalneeds,especially consideringthematurity

ofcertainloansandothershort‐termliabilities.

DocuSign Envelope ID: 5531E257-DC1B-4720-B38B-1DD6A594B629

PPLAParticipationsLtd.

Notestothefinancialstatements

AsofDecember31,2021

(Inthousandsofreais)

10

MerchantBankingloans

OnMarch4,2020,theLojasLeaderS.A(“Leader”)releaseditsManagement'sdecisionbyrequesting

judicial reorganization. As of March 31, 2020, the Company´s Management assessed the possible

impacts and  does

 not have expectations for receivables related to this operation. Due to Leader´s

financialsituationandtheentity´srequestforjudicialreorganization,anadditionalimpairmentwas

recordedcorresponding totheamountof credits,correspondingto R$603mil lion,resulting inzero

exposure.

Acquisitionsandsales

OnFebruary6,2021,Beontag'scapitalincrease

wasapproved,withtheissueof39,671,903common,

nominativeshareswithnoparvalue.FIPTurquesa,PPLAI'sindirectinvestee,subscribed12,215,916

of this total, for the amount of R$22,786, with no relevant change in the percentage of PPLAI's

investment in Beontag.

On August 12, 2021, September 23, 2021 and December 17, 2 021, new

contributions to Beontag's share  cap ital  were approved. The FIP Turquesa did not like the

contributionsandwasthereforediluted

  1. Presentationoffinancialstatements

The Company’s financial statements were prepared and are being presented in accordance with

International Financial Reporting Standards, issued by International Accounting Standards

Board(IASB).

TheitemsincludedinthefinancialstatementsofeachofthebusinessesoftheCompanyaremeasured

usingthecurrencyoftheprimaryeconomicenvironmentin

whichthecompanyoperates("functional

currency").TheCompany'sfunctionalcurrencyistheU.S.Dollar,sincethemajorityoftheCompany's

businesstransactions areinthementionedcurrency. Thesubsidiariesfunctional currencygenerally 

correspondstothecurrencyfromitscountry.

Thefinancialstatementswereapproved bytheManagementonMarch21,2022,

andtheycontaina

trueandfairviewofthefinancialpositionandresultsoftheCompany.

  1. Mainaccountingpractices

a. Useofestimatives

The preparation of financial statements in conformity with IFRS requires  management to make

estimates and assumptions that affect the reported balances of assets, liabilities  and disclosure of

contingent assets and liabilities at the date of the financial statements, as well as the reported

amounts of revenues

 and expenses during the year. These estimates are based  on historical

experience and various other factors that Management believes are reasonable under the

circumstances,theresultsformthebasisforjudgmentsaboutcarryingvaluesofassetsandliabilities,

whichare notdeterminedthroughothersources.Theactual resultscoulddiffer

fromthoseestimates.

DocuSign Envelope ID: 5531E257-DC1B-4720-B38B-1DD6A594B629

PPLAParticipationsLtd.

Notestothefinancialstatements

AsofDecember31,2021

(Inthousandsofreais)

11

b. Functionalcurrencyandpresentation

Functionalcurrency

The items included in the financial  statements of each of the subsidiaries of the Company are

measured using the currency of the primary economic environment in which

 the company

operates("functionalcurrency").

TheCompany'sfunctionalcurrencyistheU.S.Dollar, sincethemajorityoftheCompany'sbusiness

transactions are in the mentioned currency. The subsidiaries functional currency generally

correspondstothecurrencyfromitscountry.

Foreigncurrencytranslation

Thefinancialstatementsofsubsidiarieswhosefunctionalcurrency

isdifferentfromthatadopted

bytheparent Company,aretranslatedintothefunctionalcurrencyoftheparentusingthecriteria

inIAS21.

MonetaryassetsandliabilitiesdenominatedincurrenciesotherthanU.S.Dollarsareconverted

intoU.S.Dollarusingexchangeratesclosingattheendofeachyear.

Thenon‐monetaryassetsand

liabilitiesaretranslatedusingthehistoricalratedate.Transactionsduringtheendofthefinancial

year, including purchases and sales of securities, income and expenses are translated at the

exchangerateineffectatthetransactiondate.Gains and lossesonforeigncurrencytransactions

areincluded

in“translationadjustments”inthestatementofcomprehensiveincome.

Presentationcurrency

ThesefinancialstatementsarepresentedusingtheBrazilianReal(“Real”or“rea is”or“R$”),the

presentationcurrency,asitsreportingcurrencyexclusivelytomeetthespecificrequirementsof

theBrazilianFederalSecuritiesCommission(“CVM”),theBrazilianregulatorybody.

TheconversionofU.S.Dollarfunctionalcurrencyintoreais(presentationcurrency)wasrecorded

pursuanttothemethodologydescribedinIAS21–(“Theeffectsofchangesinexchangerates”),

andissummarizedbelow:

 Theassetsandliabilitiesforeachbalancesheetdateweretranslatedatthe closingexchange 

rate

atthebalancesheetdate;incomeandexpensesweretranslatedusingmonthlyaverage

exchangerate.

 ForassetsandliabilitiesforeachbalancewhichIAS21doesnotestablishamethodologyfor

translation,theCompanyelectedtotranslatebalanc esusingtheclosingrateofeachbalance

sheet,andothermovements

inshareholders’equitywereconvertedusingmonthlyaverage

rate, except those that correspond to a specific transaction with shareholders that were

convertedattheexchangerateatthetransactiondate.

 Forthe preparation ofthe statementofcash flows, the Companyused the average annual

rate for the conversion

 of balances of changes in assets and liabilities items of operational

cashflows.Fortheremainingtransactions,theCompanyusedthehistoricalrate.Allresulting

DocuSign Envelope ID: 5531E257-DC1B-4720-B38B-1DD6A594B629

PPLAParticipationsLtd.

Notestothefinancialstatements

AsofDecember31,2021

(Inthousandsofreais)

12

translationdifferencesarerecognizeddirectlyin“translationadjustments”inthestatement

ofothercomprehensiveincome.Allresultingtranslationdifferencesarerecognizeddirectly

in“translationadjustments”inthestatementofothercomprehensiveincome.

c. Cash

andcashequivalents

Forthepurposesofstatementsofcashflow,cashandcashequivalentsincludescash,bankdeposits

andhighly‐liquidshort‐terminvestmentsredeemableinupto90days, subject toaninsignificantrisk

ofchangeinvalue.

d. Revenueandexpenserecognition

Netgainswithfinancialinstruments

Amounts that arise from trading activity including all gains and losses from changes in the fair

valueandtheinterestanddividendincomeorexpenseoffinancialassetsandliabilitiesheldfor

trading.

Interestincome(expense)

Interestincome(expense) isrecognizedasincurred,usingtheeffectiveinterestingratemethod. 

The

interestonfinancialinstrumentsheldfortradingarerecordedin“Gain(losses)onfinancial

instrumentsheldfortrading”.

e. Financialinstruments

ThissectiondescribedtheaccountingpracticesadoptedasaresultoftheearlyadoptionofIFRS9.

Recognitiondate

Allfinancialassetsandliabilitiesareinitiallyrecognizedonthe

tradingdate, thatis,the  datein

whichtheentitybecomesaninterestedpartytothecontractualrelationshipoftheinstrument.

Thisincludes purchasesorsalesoffinancialassetsorliabilitiesthatrequiredeliveryoftheasset

ataspecifiedtimeestablishedbyregulationormarketstandard.

Initialrecognitionof

financialinstruments

Theclassificationofthefinancialinstrumentsattheirinitialrecognitiondependsonthepurpose

forwhichtheywereacquiredandtheircharacteristics.IFRS9classificationisgenerallybasedon

the business model in which a financial asset is managed and its contractual cash flows.

Subsequently to the IFRS

9 early  adoption without electing fair value option, the Company

classified itsfinancial assets as measured at fair value through profit or loss (FVTPL), fair v alue 

throughothercomprehensiveincome(FVOCI)withorwithoutrecyclingoratamortizedcost.

Derivativesfinancialinstruments

Derivativefinancial instrumentsarerecordedatfairvalueand

held asassets  whenfairvalue is

positiveandasliabilitieswhenfairvalueisnegative.Thechangesinfairvalueofderivativesare

DocuSign Envelope ID: 5531E257-DC1B-4720-B38B-1DD6A594B629

PPLAParticipationsLtd.

Notestothefinancialstatements

AsofDecember31,2021

(Inthousandsofreais)

13

recognized in the income statement “Net gains (losses) with financial instruments held for

trading”.

Financialassetsandliabilitiesdesignatedatfairvaluethroughprofitandloss

Financial assets and liabilities classified in this cat egory

are those designed as such on initial

recognition.Thedesignati on ofafinancialinstrumentatfairvaluethroughprofitorlossoninitial

recognitionisonlypossiblewhen thefollowing criteriais observedandthedesignationofea ch 

instrumentisindividuallydetermined:

 Designationeliminatesorsignificantlyreducestheinconsistent

treatmentwhichwouldoccur

in the measurement of assets and liabilities or in the recognition of gains and losses

correspondingtodifferentways;or

 Assetsandliabilitiesarepartofagroupoffinancialassets,financialliabilities,orboth,which

aremanagedandwiththeirperformanceassessedbasedon

thefairvalue,asadocumented

strategyofriskorinvestmentmanagement;or

 Thefinancialinstrumentcontains one(ormore)embeddedderivative(s),whichsignificantly

modifiesthecashflowsthatwouldotherwiseberequiredbytheagreement.

Financial assets and liabilities at fair value through profit and lo ss  are recorded

in the balance

sheetatfairvalue.Changesinthefair valueandearnedorincurredinterestarerecordedin“Net

gainonfinancialassetsorliabilitiesdesignatedatfairvaluethroughprofitandloss”.

Financialassetsatfairvaluethroughothercomprehensiveincome

Financialassetsatfairvaluethrough

othercomprehensiveincomeincludesequitiesanddebt

instruments:

 EquityInstruments

At initial recognition, the Company may make an irrevocable election to present in other

comprehensive income subsequent changes in the fair value of an investment in an equity

instrumentthatisnotheldfortrading,norcontingentconsiderationrecognizedbyanacquirer

in a business combination to which IFRS 3

applies. If it makes such  election,  only dividend

income that does not clearly represent a recovery of part of the cost of the investment is

recognizedinprofitorloss,withallothergainsandlosses(includingthoserelatedtoforeign

exchange) recognized in other comprehensive income. These gains and losses

 remain

permanently in equity and are not subsequently reclassified to profit or loss, even on

derecognition. After derecognition of the investment, the Company may transfer the

cumulativegainorlossretainedinothercomprehensiveincometoretainedearnings.

 DebtInstruments

Debtinstrumentscanberecognizedunderthiscategoryifthefinancialassetisheldwithina

business model whose o bjective is achieved by both collecting contractual cash flows and

sellingfinancialassetsand;thecontractualtermsofthefinancialassetgiveriseonspecified

DocuSign Envelope ID: 5531E257-DC1B-4720-B38B-1DD6A594B629

PPLAParticipationsLtd.

Notestothefinancialstatements

AsofDecember31,2021

(Inthousandsofreais)

14

datestocashflowsthataresolelypaymentsofprincipalandinterestontheprincipalamount

outstanding. The unrealized gains or losses are recognized directly in equity as other

comprehensiveincome.Upontherealization

ofthedebtinstrument,theunrealizedgainsor

losses,previouslyrecognizedinthestatementofcomprehensiveincome,arereclassifiedto

theincomestatement,as“Gain(losses)onfairvaluethroughothercomprehensiveincome”.

Financialassetsmeasuredatamortizedcost

Afinancialassetshallbemeasuredatamortizedcostifboth

ofthefollowingconditionsaremet:

 Thefinancialassetisheldwithinabusinessmodel whoseobjectiveistoholdfinancialassets

inordertocollectcon tractualcashflowsand;

 Thecontractualtermsofthefinancialassetgiveriseonspecifieddatestocashflows thatare

solely

paymentsofprincipalandinterestontheprincipalamountoutstanding.

After initial measurement, financial assets are measured at amortized cost using the effective 

interestrate  method. Although theCompanyisnot expected tosellafinancialassetmeasured

underthiscategory,asitisexpectedtohold ittomaturity

tocollectcontractualcashflows,the

Companyneednotholdallofthoseinstrumentsuntilmaturityandsalesmayoccur.

Financialliabilitiesatamortizedcost

Financialliabilitiesaremeasuredat amortizedcostusingtheeffectiveinterestratemethodand

takingintoaccountanydiscountorpremiumonissueandrelevant

coststhatbecomepartofthe

effectiveinterestrate.

Reclassifications

Financialassetsarenotreclassifiedsubsequenttotheirinitial recognition, exceptin the period

aftertheCompanychangesitsbusinessmodelformanagingfinancialassets.

Impairmentoffinancialassets

Under IFRS 9, at initial recognition of  a debt instrument, the

Company needs to project its 

expectedcreditlossesforthenext12monthsandr e cognizeitasanallowanceforcreditlosses,

eventhoughnolosses haveyetoccurred.Thisisachangeofconcepttoanexpectedlossmodel,

ratherthananincurredlossmodelthatwaseffectiveunderIAS

39.

IftheCompanyisexpectingasignificantdeterioratio n inthecreditqualityofitscounterparty,it

shouldrecognizeanallowance equivalenttothelifeti meexpectedcreditlosses oftheinstrument,

ratherthanonlythe12monthexpectedcreditlosses.

Measurement

Expectedcreditlossesareaprobability‐weightedesti mate

ofcreditlosses.Theyaremeasuredas

follows:

DocuSign Envelope ID: 5531E257-DC1B-4720-B38B-1DD6A594B629

PPLAParticipationsLtd.

Notestothefinancialstatements

AsofDecember31,2021

(Inthousandsofreais)

15

 Financialassetsthatarenotcre dit‐impairedatther eportingdate:asthepresentvalueofall

cashshortfalls(i.e.thedifference betweenthecashflowsduetotheentityinaccordancewith 

the

contractandthecashflowsthattheCompanyexpectstoreceive);

 Financialassetsthatarecredit‐impairedatthereportingdate:asthedifferencebetweenthe

grosscarryingamountandthepresentvalueofestimatedfuturecashflows;

 Undrawnloancommitments:asthepresentvalueofthediff erence betweenthecontractu a l

cashflowsthatareduetotheCompanyifthecommitmentisdrawndownandthecashflows

thattheCompanyexpectstoreceive;and

 Financial guarantee contracts: the expected payments to reimburse the holder less any

amountsthattheCompanyexpectstorecover.

If

theassetsarenolongerperforming(acreditevent),despiteconsideringtheexpectedcredit

lossesforthelifetimeoftheinstrument,theCompanyshouldalsorecognizeinterestrevenue

basedonthenetcarryingamount,whichmeansthattheallowanceshouldbeaccountedforon

interestrecognition.Themainevidenceofdeterioration

ofthecreditqualityofthecounterparty

are:

 Thesignificantdeclineinthefairvalueofanysecurityforaprolongedperiod;

 Noncompliancewithcontracttermsfordelayofprincipalorinterest;

 Deteriorationinabilitytopayandoperationalperformance;

 Breachofcovenants;

 Significantchangeintheperformanceofthecounterpartymarket;

 Reducedliquidityoftheassetduetofinancialdifficultiesthelender.

For impairment losses rela ted to debt instruments through othercomprehensive income, such

losseswillberecognizedonthestatementsofincomeagainstothercomprehensiveincomeinan

accountcalled“accumulatedimpairmentamount”.However,ifinasubsequentperiodoccuran

increaseinthefairvalueofthefinancialassetthatcanberelatedtoanyevent,thelosspreviously

consideredwillbereversedinprofitandlosses.

TheCompanyisrequiredtoreducethegrosscarryingamountof

itsfinancialinstrumentswhen

thereisnoreasonableexpectationofrecoveringthecontractualcashflowsonthefinancialassets

onitsentiretyoraportionthereof.

f. ValuationofInvestmententityportfolio

Within the context of IF RS 10, this entity  is treated as an investment entity and therefore it is

 not

necessarytocarryoutalltheproceduresrelatedtotheconsolidationofinvestees,astheexception

indicated in this rule. The objective is to earn gai ns through the management of portfolios and

eventualpurchaseandsaletransactions.

DocuSign Envelope ID: 5531E257-DC1B-4720-B38B-1DD6A594B629

PPLAParticipationsLtd.

Notestothefinancialstatements

AsofDecember31,2021

(Inthousandsofreais)

18

Investmententityportfolioisheldatfairvaluewithmovemen tsinfairvaluegoingthroughtheprofit

and loss account. The investments held by BTG Holdco (through BTGI) are defined as underlying

investments. These

underlying investments correspond substantially to an investment in global

marketsandmerchantbankinginvestmentswhicharegenerallymadedirectlyorthroughownership

inlimitedpartnershipfunds.Themerchantbankinginvestmentsarecomprisedofequityownerships,

loansandconvertibleinstrumentswhichmostoftheriskandreturnaredependentonthefair

value

and characteristics of underlying equity. The Company may adjust these values if, in its view, the

values do not reflect the price which would be paid in an open and unrestricted market between

informedandprudentparties,actingatarm'slengthandundernocompulsiontoact.

Investmententity

portfolioaremeasuredaccordingtothefairvaluemeasurementhierarchy

describedbelow:

Level1:Pricequotationsobservedinactivemarketsforthesameinstrument;

Level 2: Price quotations observed in active markets for instruments with similar characteristics or

basedonpricingmodelinwhichtherelevantparametersarebasedon

observableactivemarketdata;

Level3:Pricingmodelsinwhichcurrentmarkettransactionsorobservabledataarenotavailableand

requireahighdegreeofjudgmentandestimation.Instrumentsinthiscategoryhavebeenvaluedusing

a valuation technique where at least one  input which could have a significant effect 

on the

instrument’svaluation,isnotbasedonobservablemarketdata.Whereinputscanbeobservedfrom

market data without undue cost and effort, the observed input is used. Otherwise, the Company

determinesareasonablelevelfortheinput.Thevaluationmodels aredevelopedinternallyandare

reviewed by the pricing

 team, which is independent from the revenue generating areas, they are

updatedwheneverthereisevidenceofeventsthatcouldhaveaffected theassets’pricing.Investment

entityportfolioprimarilyincludescertainlimitedpartnershipinterestsinprivateequityfundsmainly

derived from our merchant banking activities and OTC derivatives which valuation

depends upon

unobservableinputs.Nogainorlossisrecognizedontheinitialrecognitionofaninvestmententity

portfoliovaluedusingatechniqueincorporatingsignificantunobservabledata.

Level3valuationassumptions

Asset Valuationtechnique Mainassumptions

PrivateEquityFunds(unquoted

investments)

Priceofrecentinvestments;Modelsbasedon

discountedcashflowsorearnings;Marketand

transaction(M&A)multiples.

Market and revenue growth, profitability and

leverage expectations, discount rates, macro‐

economic assumptions such as inflation and

exchangerates,riskpremiumsincludingmarket,

sizeandcountryriskpremiums.



Derivatives

Standardmodelsandnon‐biddingquoted

prices

Probabilityofdefaultandrecoveryrates.

 

Incertaincases,datausedtodeterminefairvaluemaybefromthedifferentlevelsofthefairvalue

measurementhierarchy.Inthesecases,thefinancialinstrumentisclassifiedinthemostconservative

hierarchyinwhichtherelevantdataforthefairvalueassessmentwereused.Thisevaluationrequires

judgment

and considers specific factors  of the relevant financial instruments. Changes in the

availabilityoftheinformatio n mayresultinreclassificationofcertainfinancialinstrumentsamongthe

differentlevelsoffairvaluemeasurementhierarchy.

DocuSign Envelope ID: 5531E257-DC1B-4720-B38B-1DD6A594B629

PPLAParticipationsLtd.

Notestothefinancialstatements

AsofDecember31,2021

(Inthousandsofreais)

14

g. Financialinstruments–Offsetting

Financialassetsandliabilitiesarepresentednetinthebalancesheetif,andonlyif,thereisacurrent

andenforceablelegalrighttooffsettheamounts recognizedand

ifthereistheintentiontooffset,or

torealizetheassetandcleartheliabilitysimultaneously.

h. Contingentassetsandliabilities

ProvisionsarerecognizedwhentheCompanyhasa currentobligation(legalorconstructive),asthe

resultof a pasteventand it isprobablethatan outflowof

resourceswhich incorporateseconomic

benefits shall be required to settle the obligation and a reliable estimate of the amount of the

obligationcanbemade.Theexpense relatedtoanyallowanceispresentedintheincomestatement

netofanyreimbursement.

Therecognition,measure mentandthedisclosureoftheassetsand

contingentliabilitiesandofthe

legalaremadepursuanttothecriteriadescribedbelow.

Contingent assets‐notrecognized in the financial statements, exceptwhen there is evidence that

realizationisvirtuallycertain.

Contingentliabilities‐arerecognizedinthefinancialstatementswhen,basedontheopinionoflegal

advisorsandManagement,

theriskoflossofanaction,judicialoradministrativeisdeemedlikely,with

aprobableoutflowofresourcestosettlementoftheobligationsandwhentheamountsinvolvedcan

bereasonably measured. Contingent liabilities classifiedaspossible losses bythe legal advisorsare

onlydisclosedinexplanatorynotes,while

thoseclassifiedasremotelossesareneitherprovidedfor

nordisclosed.

i. Profitallocation

The dividends are classified as liabilities when declared by the board and approved by the

Extraordinary/OrdinaryGeneralMeeting.

j. Segmentinformation

IFRS8requiresthatoperatingsegmentsaredisclosedconsistentlywithinformationprovided

tothe

Company’s chief operating decision maker, who is the person or group of persons that allocates

resourcestothesegmentsandassessestheirperformance.ManagementbelievestheCompanyhas

onlyonesegment,whichisrelatedtotheoverallactivityofaninvestmententityandso no segment

informationisdisclosed.

k. Investedcompanies

ThetablebelowpresentsthedirectandindirectinterestoftheCompanyinitsinvestees:

Equityinterest‐%

Country

3/31/2021

12/31/2020

Directsubsidiaries

BTGBermudaLPHoldcoLtd. Bermuda  100

100

Indirectsubsidiaries

PPLAInvestmentsLP. Bermuda  0.003

0.003

DocuSign Envelope ID: 5531E257-DC1B-4720-B38B-1DD6A594B629

PPLAParticipationsLtd.

Notestothefinancialstatements

December31,2021

(Inthousandsofreais)

19

OnJune30,2020,thecapitalizationofPPLAInvestmentsbyBTGMBInvestmentsLP(“BTGMB”)was

concluded, a company that has an indirect controlling shareholder common to the Company, by

issuing 91,805,085,836 Class D shares by

 PPLA Investments, in the amount of R$801.1 million,

correspondingto R$0.0087 per share. Asaresultofthe capitalization, PPLA Investments' investors

were diluted in their participation, in such a way that: (i) the Company started to indirectly hold,

throughPPLABermudaLPHoldcoLtd,0.003%ofPPLAInvestments;(ii)

BTGMB nowdirectly holds

approximately99.99%ofPPLAInvestments.

BelowistheownershipinterestheldbyPPLAInvestmentsinitsinvesteesandinvestmentfunds:

Equityinterest‐%



Country

3/31/2021

12/31/2020

Directsubsidiaries

BTGLoancoLLC USA

100.00

100.00

Indirectsubsidiaries

TimberXISPES.A.(i) Brazil

8.40

8.73

TimberIXParticipaçõesS.A.(i) Brazil

8.40

8.73

TimberXIISPES.A. Brazil

8.40

8.73

SãoLourençoEmpreendimentosFlorestaisLtda.(i) Brazil

8.40

8.73

FazendaCoriscoParticipaçõesS.A.(i) Brazil

8.40

8.73

BTGPactualSantaTerezinhaHoldingS.A.

(i) Brazil

8.40

8.73

SCFlorEmpreendimentosAgrícolasLtda. Brazil

8.40

8.73

FazendaSantaTerezinhaParticipaçõesS.A.(i) Brazil

8.40

8.73

TimberVIISPES.A.(i) Brazil

8.40

8.73

BTGIQuartzoParticipaçõesS.A Brazil

100.00

100.00

BTGISafiraParticipaçõesS.A Brazil 100.00 100.00

BTGIVIIParticipações

S.A. Brazil

100.00

100.00

BTGIVIIIParticipaçõesS.A. Brazil

100.00

100.00

BTGPactualStigmaLLC USA

100.00

100.00

BTGEquityInvestmentsLLC USA

100.00

100.00

HárpiaOmegaParticipaçõesS.A. Brazil

100.00

100.00

BTGPactualServiciosS.A.deC.V. México

100.00

100.00

BTGPactualInvestimentosFlorestais

S.A. Brazil

30.59

32.75

BRPECAgroPecuáriaS.A. Brazil

100.00

100.00

BTGPactualProprietaryFeeder(1)Limited Cayman

100.00

100.00

Investedfunds

BTGPactualBrazilInvestmentFundILP Cayman

100.00

100.00

BTGPactualBrazilInvestmentFundIALP Cayman

1.02

1.02

BTGPactualBrazilInvestmentFundIBLP Cayman

23.62

23.62

(i) Theinvesteeequityisdividedintoordinaryandpreferredshares.TheCompanyhasthemajorityoftheordinarysharesandvotingrights.

  1. Riskmanagement

TheCompany’sriskmanagemen tinvolvesseverallevelsofourmanagementteamandvariouspolicies

andstrategies.ThestructureoftheCompany’scommitteesallowsengagingthewholeorganization

andensuringdecisionsarereadilyimplemented. 

Themaincommittees/meetingsinvolvedinriskmanagementactivitiesare:(i)Managementmeeting,

whichapprovespolicies,definesoverall

limitsand,alongsidewiththeothercommittees,monitorsthe

managementofourrisks;(ii)ComplianceCommittee,whichisresponsibleforestablishingpolicyrules

and reporting potential problems related to money laundering; and (iii) Audit Committee, which is

responsible for independent verification of compliance with internal controls and assessment of

maintenance

oftheaccountingrecords.

DocuSign Envelope ID: 5531E257-DC1B-4720-B38B-1DD6A594B629

PPLAParticipationsLtd.

Notestothefinancialstatements December31,2021

(Inthousandsofreais)

20

a. Creditrisk

Thefollowingtableshowsthemaximumexposureoftheinvestmententityportfoliobygeographic

region:

12/31/2021

Brazil

UnitedStates

Others

Total

Assets

Assets

Cashandcashequivalents‐

‐

1

1

Investmententityportfolio 4

‐

‐

4

Derivativefinancialinstruments‐

‐

‐

‐

Investmentsatfairvaluethroughothercomprehensiveincome 14

‐

‐

14

Financialassetsatamortizedcost(i)‐

3

‐

3

Otherassets‐

‐

2

2

Total

 18

3

3

24

12/31/2020

Brazil

UnitedStates

Others

Total

Assets

Investmententityportfolio

Assets

Cashandcashequivalents‐

‐

3

3

Investmententityportfolio 5

‐

‐

5

Investmentsatfairvaluethroughothercomprehensiveincome 16

‐

‐

16

Financialassetsatamortizedcost(i)‐

3

‐

3

Otherassets‐‐2 2

Total 21

3

5

29

(i) Theamountbasicallycorrespondstoloanstopartners.

DocuSign Envelope ID: 5531E257-DC1B-4720-B38B-1DD6A594B629

PPLAParticipationsLtd.

Notestothefinancialstatements

December31,2021

(Inthousandsofreais)

21

The table below states the maximum exposures to credit risk of the investment entity portfolio,

classifiedbythecounterparties’economicactivities:

12/31/2021

Private

institutions

Companies

Individuals

Others

Total

Assets

Investmententityportfolio

Assets

Cashandcashequivalents 1

‐

‐

‐

1

Investmententityportfolio 10

11

‐

(17)

4

Investmentsatfairvaluethroughothercomprehensiveincome‐

13

‐

1

14

Financialassetsatamortizedcost‐

‐

3

‐

3

Otherassets‐

‐

‐

2

2

Total

11

24

3

(14)

24

12/31/2020

Private

institutions

Companies

Individuals

Others

Total

Assets

Cashandcashequivalents 3

‐

‐

‐

3

Investmententityportfolio 16

7

‐

(18)

5

Investmentsatfairvaluethroughothercomprehensiveincome‐

16

‐

‐

16

Financialassetsatamortizedcost‐

‐

3

‐

3

Otherassets‐

‐

‐

2

2

Total

19

23

3

(16)

29

(i)IncludesfinancialliabilitiesenteredintobyPPLAInvestments(PPLAParticipationsisnotacounterpartyofsuchcontracts).

b. Liquidityanalysisandrisk

AsatDecember31,2021and2020,theCompanydoesnothaveanycashorcashequivalents.

AsatDecember31,2021,thereisnofixedmaturityforthediscountedcashflowsfortheinvestment

entityportfoliooftheCompany.Thefollowingtableshowsthe

Investmententityportfolio’sliquidity

positionasatDecember31,2021and2020:

12/31/2021

Upto90days/

Nomaturity

90to365

days

1to3

years

Over3

years

Total

Assets

Investmententityportfolio

Assets

Cashandcashequivalents 1

‐

‐

‐

1

Investmententityportfolio 4

‐

‐

‐

4

Investmentsatfairvaluethroughothercomprehensiveincome 14

‐

‐

‐

14

Financialassetsatamortizedcost‐

‐

‐

3

3

Derivativefinancialinstruments‐

‐

‐

‐

‐

Otherassets 2

‐

‐

‐

2

Liabilities(i) (8)

(8)

‐

‐

(16)

Total 13

(8)

‐

3

8

12/31/2020

Upto90days/

Nomaturity

90to365

days

1to3

years

Over3

years

Total

Assets

Investmententityportfolio

Cashandcashequivalents 3

‐

‐

‐

3

Investmententityportfolio 3

‐

‐

2

5

Investmentsatfairvaluethroughothercomprehensiveincome‐

‐

‐

16

16

Financialassetsatamortizedcost‐

‐

‐

3

3

Otherassets 2

‐

‐

‐

2

Liabilities(i) (25)

‐

‐

‐

(25)

Total (17)

‐

‐

21

4

(i)IncludesfinancialliabilitiesenteredintobyPPLAInvestments(PPLAParticipationsisnotacounterpartyofsuchcontracts).

DocuSign Envelope ID: 5531E257-DC1B-4720-B38B-1DD6A594B629

PPLAParticipationsLtd.

Notestothefinancialstatements

December31,2021

(Inthousandsofreais)

22

  1. Investmententityportfolio

The financial statements of PPLA Investments (“PPLAI”) for year ended December 31, 2 021 were

reviewed by independent auditors who issued a review report on March 21, 2022, without

modification,presentingasectionofrelevantuncertaintyrelatedtooperationalcontinuity.

AsatDecember31,2021,PPLAInvestments'equityisR$323,959due

toresultswiththeinvestment

entityportfolio.PPLAParticipationsmarkeditsinvestmentinPPLAInvestmentsatR$10inyearended

December 31, 2021. PPLA P does not have contractual commitments with the liabilities of its 

investees.

PPLAParticipationsvaluesitsinvestmentsatfairvalue,inaccordancewiththeaccountingsstandard s

ofPPLAInvestments.

TherelevantfiguresofthePPLAInvestmentsinvestmentportfolio,asatDecember31,2021and2020,

arepresentedbelow:

Note

12/31/2021(1)

12/31/2020(1)

Assets

Cashandcashequivalents (a)

45,732

104,152

Investmententityportfolio (b)

148,415

201,150

Derivativefinancialinstruments

‐

2,271

Investmentsatfairvaluethroughothercomprehensiveincome (c)

515,789

584,162

Financialassetsatamortizedcost (d)

113,151

116,369

Otherassets

62,477

72,035

Total

885,564

1,080,139

Liabilities

Derivatives

414

71,016

Financialliabilitiesatamortizedcost (e)

375,100

588,579

Otherliabilities

186,091

252,133

Total

561,605

911,728

Shareholders'equity

323,959

168,411

Totalliabilitiesandshareholders'equity

885,564

1,080,139

Investmententityportfolioreconciliation

PPLAIshareholder'sequity

323,959

168,411

PPLAPownership(viaBTGHoldco)

0.003%

0.003%

Total

10

5

(1) BalancesasreportedbyPPLAInvestmentsasatDecember31,2021and2020.

(a) Cashandcashequivalents

Cashandcashequivalentsarecomprisedexclusivelyofhighlyliquidbankdeposits.

(b) Investmententityportfolio

AsofDecember31,2021

AsofDecember31,2020

Cost

Fairvalue

Cost

Fairvalue

MerchantBankinginvestments(i)

3,329,711

394,453

3,233,111

250,607

Privateequityfunds("FIP")

438,313

250,655

407,523

116,760

Subsidiaries,associatesandjointlycontrolled

entities

2,891,398

143,798

2,825,588

133,847

Globalmarketsinvestments(ii)

‐

‐

5,927

5,927

Loans(1)

‐

‐

588,576

588,576

Others(2)

(246,038)

(246,038)

(643,960)

(643,960)

Total



3,083,673



148,415



3,183,654



201,150

(1) OnDecember31,2020referstoloansgrantedbyBTGPactualProprietaryFeeder(1)LimitedtoPPLAInvestments.Theamountisreflectedasfinancial

liabilitiesatamortizedcostinNote5e.

(2) IncludesfinancialassetsandliabilitiesenteredintobyCompanysubsidiaries.

DocuSign Envelope ID: 5531E257-DC1B-4720-B38B-1DD6A594B629

PPLAParticipationsLtd.

Notestothefinancialstatements December31,2021

(Inthousandsofreais)

23

(i) MerchantBankinginvestments

Merchant Banking investments consist of investments, held di rectly or through investment

vehicles(includingfundsthatalsoincludethirdpartyinvestors),inadiversifiedgroupofportfolio

companies primarily located in Brazil.

Merchant Banking investments are structured generally

throughprivatelynegotiatedtransactionswithaviewtodivestinfourtotenyears.

AsatDecember31,2021and2020,PPLAInvestmentsMerchantBankinginvestmentscorresponds

to private equity and real estate investments, through FIP or other investment vehicles, as

disclosedbelow:

12/31/2021

12/31/2020

MerchantBankinginvestments

Description/Segment

activity

 

(%)(1)

Fairvalue

(%)

(1)

Fair

value

ThroughFIPs:

BrPecAgropecuáriaS.A.(4) Ranching

100%

114,900

100%  55,310

AutoAdesivosParanáS.A.(2)

Adhesives,labelsand

specialpaper

company

11.9%

135,755

30.1%  61,450

Throughsubsidiaries,associatesandjointlycontrolledentities:

TimberXISPES.A. Biologicalassets

8.40%

4,424

8.73%  5,651

TimberIXParticipaçõesS.A. Biologicalassets

8.40%

40,247

8.73%  41,441

TimberXIISPES.A. Biologicalassets

8.40%

28,244

8.73%  25,126

BTGPactualSantaTerezinhaHoldingS.A. Biologicalassets

8.40%

41,157

8.73%  8,557

FazendaCoriscoParticipaçõesS.A. Biologicalassets

8.40%

10,381

8.73%  10,636

TimberVIISPES.A. Biologicalassets

8.40%

11,545

8.73%  42,436

Loans‐MerchantBankinginvestments(3) Others

‐

7,800

‐  ‐

Total

394,453

 250,607

(1)TheequityinterestdisclosedinthetableabovereferstotheCompanyindirectinterest.

(2)AsdescribedinNote1.

(3)DuringtheyearendedDecember31,2021,newdebentureswereissuedtoPhosfazMineraçãoS.A.

(4)OnDecember7,2021,thetermofassignmentoftheentiretyoftheshares

ofFundodeInvestimentoemParticipaçõesBravo–MultiestratégiaInvestimento

noExterior(“FIPBravo”)heldbyBTGIStigmaLLC(“Stigma”)wassigned.FIPBravo'smainassetistheequityinterestintheentirecapitalstockofBRPECAgro‐

precuáriaS.A.(“BrPec”),thecompanyisawaitingapprovalfromcompetentauthorities.

(ii) Globalmarketinvestments

Ahedge fundisaninvestmentfundthattypically undertakes a wider range of investmentand 

asset trading than other funds, but which is only open for investment from particular types of

investors specified by regulators (these funds have hybrid portfolios composed of a mixture of

fixed

 income, stocks, currencies, foreign exchange, derivatives, commodities, mortgages and

interestrates,theyalsogenerallyemployawidevarietyofinvestmentstrategies,andmakeuse

oftechniquessuchasshortsellingandleverage).

AsofDecember31,2021,PPLAInvestmentsnolongerhasaninvestmentinBTGPactualAbsolute

ReturnII

MasterFundLP(December31,2020:R$5,927).

As at December 31, 2020, the Net Asset Value (“NAV”) of global markets investments

approximatestoitsfairvalue,whichisequivalenttoitscostvalueonthereferreddate.

(c) Investmentsatfairvaluethroughothercomprehensiveincome

Subsequently to the

 IFRS 9 early adoption, PPLA Investments now presents part of its investment

entityportfolioasinvestmentsatfairvaluethroughothercomprehensiveincome,asshownbelow:

DocuSign Envelope ID: 5531E257-DC1B-4720-B38B-1DD6A594B629

PPLAParticipationsLtd.

Notestothefinancialstatements

December31,2021

(Inthousandsofreais)

24

AsofDecember31,2021

AsofDecember31,2020

Cost  Fairvalue

Cost  Fairvalue

MerchantBankinginvestments‐FIP

1,761,355  490,145

1,934,555  574,058

Others

25,644  25,644

10,104  10,104

Total

1,786,999  515,789

1,944,659  584,162

(i) Merchantbankinginvestments‐FIP

AsatDecember31,2021and2020,PPLAInvestmentsMerchantBankinginvestmentscorresponds

toprivateequityandrealestateinvestments,throughFIP,asdisclosedbelow:

MerchantBankinginvestments

Description/Segment

activity



(%)(1)

Fairvalue

(%)(1)

Fair

value

A!BodytechParticipaçõesS.A.

Fitnesssegment

10.5%

6,311

10.4%  5,937

LatteS.A.

Wastecollection,

treatmentand

disposal

15.7%

3,674

15.7%  10,997

EstreParticipaçõesS.A.

Wastecollection,

treatmentand

disposal

‐

‐

‐  1,606

SeteBrasilParticipaçõesS.A.

Oilandgas

‐

204

‐  199

UOLUniversoonLineS.A.

Internetandserver

provider

3.1%

479,956

3.1%  555,319

            

Total

490,145

 574,058

(1) TheequityinterestdisclosedinthetableabovereferstotheCompanyindirectinterest.

(d) Financialassetsatamortizedcost

12/31/202112/31/2020

Partners(i)

113,151

116,369

Total

113,151

116,369

(i) LoansgrantedbyPPLAInvestmentsareindexedtoCDIorlibor,andthematurityareingeneralhigherthanoneyear.Loanstopartnersareprovidedin

connectiontotheacquisitionofsharesinBTGPactualGroup.

AsatDecember31,2021and2020,thefairvalueattributedtotheLoansandreceivablesissimilarto

itsamortizedcost.

(e) Financialliabilitiesatamortizedcost

PartoftheloansandmediumtermnotesareguaranteedbyBTGPactualHoldingS.A.,indirectparent

companyofBancoBTGPactual.

(f) FairvalueHierarchy

PPLAInvestmentsclassifies itsinvestmententityportfolioaslevel3.However,theunderlyingassets

andliabilitiesofthisportfoliohavedifferentclassificationwhichispresentedasfollows:

DocuSign Envelope ID: 5531E257-DC1B-4720-B38B-1DD6A594B629

PPLAParticipationsLtd.

Notestothefinancialstatements

December31,2021

(Inthousandsofreais)

25

(i) Investmententityportfolio

12/31/2021

Level1

Level2

Level3

Total

Investmententityportfolio

MerchantBankinginvestments

Privateequityfunds ‐

‐

250,655

250,655

Subsidiaries,associatesandjointlycontrolledentities ‐

7,800

135,998

143,798

Globalmarketsinvestments ‐

‐

‐

‐

Loans ‐

‐

‐

‐

Others ‐

(246,038)

‐

(246,038)

Total ‐

(238,238)

386,653

148,415

12/31/2020

Level1

Level2

Level3

Total

Investmententityportfolio

MerchantBankinginvestments

Privateequityfunds ‐

‐

116,760

116,760

Subsidiaries,associatesandjointlycontrolledentities ‐

‐

133,847

133,847

Globalmarketsinvestments ‐

5,927

‐

5,927

Loans ‐

588,576

‐

588,576

Others ‐

(643,960)

‐

(643,960)

Total ‐

(49,457)

250,607

201,150

(ii) Investmentsatfairvaluethroughothercomprehensiveincome

Thesummary ofassetsandliabili tiesclassifiedin accordance with thefairvalue hierarchy isas

follows:

12/31/2021

Level1

Level2

Level3

Total

Investmentsatfairvaluethroughothercomprehensiveincome

MerchantBankinginvestments‐FIP ‐ ‐ 490,145 490,145

Others ‐

‐

25,644

25,644

Total ‐

‐

515,789

515,789

12/31/2020

Level1

Level2

Level3

Total

Investmentsatfairvaluethroughothercomprehensiveincome

MerchantBankinginvestments‐FIP ‐

‐

574,058

574,058

Others ‐

‐

10,104

10,104

Total ‐

‐

584,162

584,162

(iii) Financialassetsatamortizedcost

LoansandreceivablesarepresentedatfairvalueatPPLAInvestmentslevelusingapricingmodel

inwhichtherelevantparametersarebasedonobservableactivemarketdata.Therefore,theyfall

intheFairValueLevel2category.

(iv) Financialliabilitiesatamortizedcost

FinancialliabilitiesatamortizedcostarepresentedatfairvalueatPPLAInvestmentslevelusinga

pricing model in which the relevant parameters are based on observable active market data.

Therefore,theyfallintheFairValueLevel2category.

(v) Summaryofvaluationtechniques

Therewerenochanges

fromthevaluationtechniquesdisclosedinthefinancialstatementsforthe

yearendedDecember31,2021.

(vi) Reclassificationbetweenlevels

DocuSign Envelope ID: 5531E257-DC1B-4720-B38B-1DD6A594B629

PPLAParticipationsLtd.

Notestothefinancialstatements December31,2021

(Inthousandsofreais)

26

DuringtheyearendedDecember31,2021,therewerenoreclassificationbetweenlevelsandfair

valuehierarchy.

  1. Amountsreceivable

As at December 31, 2 021 and 2020, the item ref ers entirely to amounts receivable from

investees/subsidiaries,topayfortheCompany'sadministrativeexpenses.

  1. Otherliabilities

As at  December 31, 20 21 and 2020, the item refers entirely to amounts payable regarding

administrativeexpensesfromtheCompany'sBDRsprogram.

  1. Shareholders’equity

a. Capital

Atthegeneralmeetingheld onMarch18,2020,thereversestocksplitbetweensharesclassAandB

issuedbytheCompanywasapprovedintheproportionof30sharesfor1share.

AsatDecember31,2021and2020,the Company’scapital wascomprised bythefollowing class

of

shares:

12/31/2021

Authorized

Issued

Parvalue(R$)

Votingrights

Votepershare

ClassA(i)

5,000,000,000

938,222

Yes

1

ClassB(i)

10,000,000,000

1,876,444

No

‐

ClassC

1

1

1

Yes

(*)

ClassD

1,000,000,000

‐

0,0000000001

Yes

1

Total

16,000,000,001

2,814,667

12/31/2020

Authorized

Issued

Parvalue(R$)

Votingrights

Votepershare

ClassA(i)

5,000,000,000

938,222

Yes

1

ClassB(i)

10,000,000,000

1,876,444

No

‐

ClassC

1

1

1

Yes

(*)

ClassD

1,000,000,000

‐

0,0000000001

Yes

1

Total

16,000,000,001

2,814,667

(*)ClassCshareholdershavevotingrightsequivalenttotentimesthetotalnumberofissuedandsubscribedAandDClasssharesatanymoment.

(i)OnlyclassAandclassBshareholdersareentitledtoeconomicbenefits.

b. Treasuryshares

In the year ended December 31, 2020, the 690.200 unit shares that were held in treasury were

canceled.

Duringtheyearsended31,2021December31,2020,theCompanydidnotrepurchasedunits.

c. Dividends

TheCompanydidnotdistributedividendsduringtheyearsendedon

December31,2021and2020.

DocuSign Envelope ID: 5531E257-DC1B-4720-B38B-1DD6A594B629

PPLAParticipationsLtd.

Notestothefinancialstatements

December31,2021

(Inthousandsofreais)

27

  1. Profit/(Loss)pershare

12/31/2021

12/31/2020

Profit/(Loss)fortheYear

5

(25)

Weightedaverageperthousandsharesoutstandingduringtheyear

2,815

19,987

Profit/(Loss)pershare‐basicanddiluted(inreais)

0.0018

(0.0013)

0.0018

(0.001)

  1. Lossfrominvestimententityportifoliomeasuredatfairvalue

12/31/2021

12/31/2020

Lossoninvestmententityportfolio

5

(25)

Total

5

(25)

  1. Administrativeexpenses 

In the years ended December 31, 2021 and 2020, the item iscomposed exclusively of custodial

expenses,duetotheCompany'sBDRprogram.

  1. Otherincome

In the years ended December 31, 2021 and 2020, the item is co mposed exclusively by amounts

regardingreimbursedfromsubsidiaries.

  1. RelatedParties



Assets(Liabilities)

Revenues(Expenses)

Relationship

12/31/2021

12/31/2020

12/31/2021

12/31/2020

Assets

Amountsreceivable

‐PPLAInvestmentsLP Related

555

540

555

4,703

NomanagementcompensationwasrecordedduringtheyearsendedDecember31,2021and2020.

DocuSign Envelope ID: 5531E257-DC1B-4720-B38B-1DD6A594B629

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