(APPROVED BY THE COMPANY’S BOARD OF DIRECTORS ON March 8, 2022)
The Board of Directors of Mahle Metal Leve S.A. (“Company”) approved these Internal Rules of the Audit Committee (“Rules” and “Audit Committee”, respectively) as hereinafter provided:
1.1. The purpose of these Internal Rules is to regulate: (a) the functioning of the Audit Committee of the Company; (b) the relationship between the Audit Committee and the Board of Directors and the other corporate bodies of the Company; and (c) the rights and duties of the members of the Audit Committee.
1.2. The Audit Committee is an advisory body directly subordinated to the Board of Directors. In addition to the competences provided for in these Rules, the provisions of the Company’s Code of Conduct, other internal policies and in the B3 S.A. – Brasil, Bolsa, Balcão (“B3”)’s Listing Regulation of the Novo Mercado shall also be applicable to the Audit Committee’s members.
2.1. The Audit Committee’s mission is to advise the Board of Directors in the monitoring and controlling the quality of the Company’s financial reports, internal controls, risk management and compliance.
2.2. In the execution of its competences, the Audit Committee will maintain an effective relationship with the Board of Directors, the Board of Executive Officers, the internal audit, the independent audit and, when installed, with the Company’s Fiscal Council.
2.3. As an advisory body to the Board of Directors, recommendations and opinions, as well as measures proposed by the Audit Committee, constitute non-binding recommendations to be forwarded to the Board of Directors, which shall always be accompanied by analysis and supporting material.
3.1. Composition. The Audit Committee will be composed by a minimum of three (3) members, nominated by the Board of Directors, all with unified term of office of 2 years, reelection admitted. One of the members will be designated as the Audit Committee Coordinator (“Coordinator”), also appointed by the Board of Directors upon election or re-election.
3.1.1. Of the members of the Audit Committee, at least 1 shall be an Independent Member, as defined in the Listing Regulation of the Novo Mercado, and at least 1 of the members shall have recognized experience and knowledge in the areas of business accounting, pursuant to the rules issued by the Brazilian Securities and Exchange Commission – CVM (“CVM”), which provides for the registration and practice of independent auditing activities in the securities market and defines the duties and responsibilities of the management of audited entities and in their relations with independent auditors. The same Audit Committee member can accumulate both qualifications.
3.1.2. The participation of Executive Officers of the Company, officers of its subsidiaries, affiliates or companies under common control as members of the Audit Committee is prohibited, subject to the Listing Regulation of the Novo Mercado in this regard.
3.2. Investiture. The members of the Audit Committee shall be vested in their respective positions upon signing of the Investiture Term, as per the provisions of the Company’s Bylaws and of the Brazilian Corporate Law.
3.2.1. Each member of the Audit Committee, upon signing the Investiture Term, shall submit to the Company the following documents: (i) a certified copy of his/her identification card; (ii) a certified copy of the individual taxpayers registry card; (iii) a statement that he/she is not precluded by special law nor has not been convicted of any bankruptcy, prevarication, bribery, graft, peculation crime or crime against the welfare, the property, nor of any criminal conviction that prevents him/her from accepting, even temporarily, public offices; (iv) a statement that he/she is not under the effects of temporarily suspension or disqualification imposed by CVM, which renders him/her ineligible to serve at the board of directors of listed companies; (v) a statement, signed under penalty of law, that he/she is not prevented from carrying out acts of commerce or of being part of the management of a commercial entity due to criminal conviction; (vi) a statement that he/she meets the requirement of unblemished reputation; (vii) a statement that he/she does not occupy any position in an entity which may be considered a direct competitor of the Company, and neither has nor represents any conflicting interest with those of the Company’s; and (viii) a statement on the number of shares, warrants (bonus de subscrição), stock options and share-convertible debentures issued by the Company and by subsidiaries or companies within the same group, he/she holds.
3.3. Replacement. The members of the Audit Committee, including the Coordinator, shall be replaced in their absence, impediment or in the event of vacancy by a substitute nominated by the Board of Directors. The substitute member, upon signing de Investiture Term, shall present to the Company the documents listed on item 3.2. above.
3.3.1. In his absence or temporary impediment, the Coordinator shall be replaced by a member nominated by the Audit Committee.
3.3.2. For the purposes of Section 3.3 above, (i) absent member is the member of the Audit Committee who fails to attend meetings of the Committee; and (ii) impeded member is the member of the Audit Committee who has a conflict of interest with the Company or who has been elected and occupies any position in a competitor of the Company.
3.3.3. The member of the Audit Committee who fails to attend three (3) consecutive meetings without proper justification or approval of the Board of Directors, could forfeit his/her office, giving rise to a permanent vacancy. In the event of a definitive vacancy of any member of the Audit Committee, the Board of Directors will be convened within 30 (thirty) days to elect the substitute who will complete the term of office of the substituted.
3.3.4. The substitute member of the absent or impeded member of the Audit Committee shall remain in office until the reasons for the absence and/or impediment of the titular member cease.
3.3.5. At the end of their term of office, the members of the Audit Committee shall remain in their positions until their replacements take office, unless otherwise resolved by the Board of Directors.
3.3.6. Resignation shall occur by written notice sent to the Chairman of the Board of Directors and becomes effective as of the date thereof, in relation to the Company, and shall be effective towards third parties after the resignation notice is filed with the commercial registry and duly published, which measures that can be taken by the resigning member.
4.1. Competences. It is the responsibility of the Audit Committee, among other matters:
4.2. The Audit Committee will report its activities to the Board of Directors on a quarterly basis, through the Coordinator or any of its members, and the minutes of the Board of Directors shall be disclosed, indicating the aforementioned report.
4.3. For the performance of its duties, the Audit Committee will have operational autonomy and its own budget approved by the Board of Directors, intended to cover its operating costs and expenses.
4.4. The Company shall annually disclose the summarized report of the Audit Committee outlining the meetings held and the main matters discussed, and highlighting the recommendations made by the Audit Committee to the Board of Directors.
5.1.1 Coordinator Competences. It is the sole responsibility of the Coordinator, among other matters:
5.2. Secretary. The Audit Committee may, upon nomination by the Coordinator, appoint an employee of the Company to act as Secretary, whom, in this position, shall be subject to the Coordinator, with the following main duties:
6.1. Frequency. The Audit Committee shall meet, ordinarily, every quarter, and, extraordinarily, whenever called pursuant to Section 6.2. below. Ordinary meetings shall necessarily precede the meetings of the Board of Directors that will decide on the Company’s quarterly information, interim statements, and annual financial statements.
6.2. Convening. The meetings of the Audit Committee shall be convened by the Coordinator, on its own initiative or at the request of the Board of Directors, at least with 7 (seven) days in advance, via electronic mail (e-mail) or any other written means of communication with proof of receipt, which shall state the agenda of the meeting. The material for discussion at the meetings also shall be sent at least with seven (7) days in advance, allowing the analysis in appropriate detail.
6.2.1. The Audit Committee shall also meet, extraordinarily, whenever convened in writing, pursuant to Section 6.2. above, upon substantiated request of any of its members or the Coordinator, and the call shall include the date, time, venue and the agenda of the meeting. The request by any Board member shall be sent to the Coordinator, who shall take the necessary steps to call the meeting. If the Coordinator fails to meet the request of any member within fifteen (15) days or fails to act or answer or even is impeded, the meeting may be called directly by any member of the Audit Committee.
6.2.2. The meetings shall be held at a location to be defined by the Coordinator, or by teleconference or videoconference, or other means that can ensure your effective participation and the authenticity of your vote.
126.96.36.199. The vote of the Audit Committee member who participated via teleconference or videoconference or any other means, pursuant to item 6.2.2, shall be recorded on media compatible with the chosen means of communication and be filed at the Company’s headquarters. The Audit Committee member, in this case, shall be considered present at the meeting and his/her expression valid, for all legal purposes, and incorporated into the minutes of the meeting.
6.2.3. Notwithstanding the formalities provided in the Sections above, any meeting at which all members are present shall be considered a regularly called and convened meeting.
6.2.4. The Audit Committee may convene the Company’s internal and external employees to participate in its meetings, as well as any other people who hold relevant information or whose subjects, included in the agenda, are relevant to their area of activity.
6.3. Agenda. At least the following items shall be considered at the ordinary meetings, without prejudice to the other responsibilities of the Audit Committee:
6.3.1. Matters not included in the call notice shall not be discussed or deliberated upon, except in the event of extreme urgency, as so considered by the Coordinator or deliberation by the majority of the members in attendance. Notwithstanding the foregoing, matters may be presented at the meetings of the Audit Committee for future inclusion in the agenda.
6.3.2. No matter of the agenda of the meetings of the Audit Committee may be removed from the agenda, unless by the majority vote of the members present at the respective meeting.
6.4. Installation. The meetings shall be installed with the presence of the majority of the members of the Audit Committee and will be presided over by the Coordinator, except in the cases in which he appoints another member to preside over. In the absence of a minimum quorum, a new meeting will be convened, observing the convening rules above, and will be held with any quorum, according to the urgency required for the matter to be dealt with.
6.5. Issuance of opinions or recommendations. The issuance of opinions or recommendations by the Audit Committee will depend on the approval of the majority of the members present at the respective meeting.
6.5.1. Each member of the Audit Committee may manifest in person or by representation of any of his/her peers, upon submission and delivery to the Secretary for filing at the Company’s headquarters, (i) a specific proxy for the meeting in question and (ii) written vote of the absent member of the Audit Committee and justification for such absence. The specific proxy referred to in this Section and any vote statements, when prepared as a non-public document, shall not require certification of signatures.
6.6. Confidentiality. Any meeting of the Audit Committee may be confidential, in whole or in part, if, at the discretion of its Coordinator or the majority of the Audit Committee, the nature of a matter that is to be discussed requires confidentiality, including with regard to the disclosure of the decisions taken.
6.6.1. The information made available for proper assessment and manifestation of the Audit Committee, by its Coordinator, by the Secretary or by any other body of the Company’s management, along with the respective call notice, will be strictly confidential and an exclusive property of the Company, and will be destined to the members of the Audit Committee, in order to allow them to make a decision about the object to which they refer. The information, therefore, cannot be disclosed to third parties or used for any other purpose. This provision is fully applicable to the Secretary of the Audit Committee and any other person attending the meeting, who shall fully observe it.
6.7. Conflict of Interest. In the event of a conflict of interest or particular interest of one of the members or of any other person who is participating or has been invited to participate in a meeting of the Audit Committee in relation to a certain matter to be decided by the Audit Committee, that person shall declare him/herself prevented, explaining his/her involvement in the matter. The impediment shall be included in the minutes of the respective Committee’s meeting and said person shall withdraw from the respective discussions and resolutions.
6.7.1. In case any person in a potential situation of conflict of interest does not report the issue, any other member of the body to which he/she is a member of, and is aware of the situation, may inform the conflict. In this case, the conflicted person shall withdraw from the discussions and deliberations and the impediment shall be recorded in the minutes of the Audit Committee’s meeting.
6.8. Drawing up of Minutes. At the end of each meeting, the respective minutes shall be drawn up, containing the date, venue, names of the members and others attending the meeting, the general information and the resolutions passed. The minutes of the meetings should be written in clear language, record the resolutions taken, the attendees, the dissenting votes, and any abstentions.
6.8.1. The minutes of the meeting shall be signed by the members of the Audit Committee at the end of the meeting. If a signature cannot be secured at the end of a meeting, the minutes shall be sent to the member(s) for signature, as soon as possible.
6.8.2. Acceptance via e-mail (“Acceptance”) of a member of the Audit Committee of the full contents of the minutes sent digitally shall be equivalent to signature thereupon.
6.8.3. The minutes with the respective signatures and any e-mails indicating any “Acceptances” shall be filed at the Company’s headquarters.
7.1. The members of the Audit Committee shall perform the duties provided for in the applicable legislation and the Company’s Bylaws, in strict compliance with these Internal Rules and the provisions of the Corporate Law, observing their duties and responsibilities.
7.2. Apart from the duties provided for in the applicable law, each member of the Audit Committee shall:
8.1. The dispositions contained in these Internal Rules shall reflect the contents of the Company’s Bylaws and may not conflict with the provisions therein or of the applicable law. In the event of any conflict between the provisions set out in these Internal Rules and those provided for in the Company`s By Laws, the latter shall always prevail, and in case of conflict between the provisions of these Rules and the applicable legislation in force, the provisions of the current legislation will prevail.
8.2. Any omission in these Internal Rules, questions of interpretation and changes in their provisions shall be settled by the Board of Directors.
8.3. These Internal Rules shall become effective as of the date of their approval by the Board of Directors and shall be kept at the Company’s headquarters and published on the websites of CVM (gov.br/cvm), B3 (www.b3.com.br) and the Company itself (https://ri.mahle.com.br/en/).
These Internal Rules shall be immediately observed by the Company, by the Board of Directors and by the Audit Committee, and by the other areas of the Company, and may only be amended by resolution of the Board of Directors.