Article 1 – The purpose of this Internal Rules, based on the laws in force, in the Company’s Bylaws, and in the good practices of Corporate Governance, is to establish the general rules of its Fiscal Council as for the organization, operation, structure and activities, providing thereto proper conditions for the performance of its function.
Article 2 – The Fiscal Council, having a non-permanent nature, when installed, shall consist of number of effective members and equal number of alternates, in accordance with the established in the Company’s Bylaws, shareholders or not, elected by the Shareholders’ General Meeting.
Paragraph One – In the case of absence or temporary impediment of any member, it shall be substituted for his respective alternate member, which shall participate in the Fiscal Council as member.
Paragraph Two – In the event of vacancy of the effective member, the respective alternate member shall take his place until a new appointment by the Shareholder’ General Meeting. Should there be no alternate member, the Shareholders’ General Meeting shall be convened for causing the election of member to the vacant position, and of his respective alternate.
Article 3 – The Fiscal Council shall select, among its members, upon majority vote, at the first meeting of the Fiscal Council, after the election of its members by the Shareholders’ General Meeting, the one to hold the office of Chairman of the Fiscal Council, who shall perform his functions to the end of his term of office as Fiscal Councilor.
Paragraph One – In occasional absence of the Chairman of the Fiscal Council, the meetings shall be conducted by another member of the Fiscal Council, at that time selected by the other members of Fiscal Council.
Paragraph Two – In the hypothesis of vacancy of the office of Chairman of the Fiscal Council, a new Chairman shall be elected, and the functions shall be exercised until the end of the term of office of the substituted one.
Article 4 – The following are requisites for performing the office of Fiscal Councilor:
a) to be a natural person, resident in the Country;
b) to have spotless reputation;
c) not to be hindered to the performance of the office;
d) not to be convicted of crime or misdemeanor;
e) not to be member of management bodies and employee of the Company or subsidiary thereof or company belonging to the same group, or spouse, or relative up to the third degree, of a manager of the Company;
f) to hold undergraduate college degree or having held, at least for three (3) years, the office of corporate manager or Fiscal Councilor;
g) to be able to analyze and issue opinions on financial statements.
Sole Paragraph – The requisites determined by law to the holding of offices of Fiscal Councilor shall be confirmed by the elected members by the Shareholders’ General Meeting, provided that the body is installed.
Article 5 – The Fiscal Council shall meet, ordinarily, no later than ninety (90) days upon the end of the accounting year and, at most, forty-five (45) days after the ending of each quarter (exception made to December, which is covered by the previous item), and such meetings shall comprise, as the case may be, the presentation cycle for the financial statements of the Company. The meetings of the Fiscal Council may be held through teleconference, videoconference, or any other communication channel able to identify the member and to propitiate concurrent communication with all other persons attending the meeting.
Paragraph One – Further to other forms provided for in law, the meetings of the Fiscal Council may be convened, extraordinarily, at any time whatsoever, by the Chairman of the Fiscal Council, two (2) members of the Fiscal Council, the Chairman of the Company’s Board of Directors, the Chief Executive Officer, or whenever it is so requested by the independent and/or internal auditors.
Paragraph Two – Meetings shall be convened in writing, through email, no later than seven (7) days before the meeting, with return receipt requested, and the convening shall include: date, time of the beginning and end of the meeting, place, and the matters to be included in the agenda of the meeting.
Paragraph Three – In the event of urgency, acknowledged by the attendants, documents not included in the agenda may be referred for discussion and voted, in which event the requirement contained in Paragraph Two of the Article 5 of this Internal Rules, shall be waived.
Paragraph Four – The Fiscal Council may invite, through its Chairman, members of the Company’s management to attend their meetings, as well as internal and external collaborators who have material information related to matters included in the agenda, and which are relevant to the matters under its responsibility.
Article 6 – The meetings of the Fiscal Council shall be installed with the presence of the majority of its effective members. Members of the Fiscal Council expressing their vote through proxy granted to another member of such body, written vote issued in advance, and through any other express communication channel, shall be deemed present thereat.
Sole Paragraph – In the absence of the minimum quorum established in the caput of this Article, new meeting shall be convened, which shall be installed with any number of attendees, and which shall be held according to the urgency required for the matter to be addressed.
Article 7 – The decisions of the Fiscal Council shall only be valid when made by the absolute majority of the votes of the attendees, and the member with dissenting vote may register it in the minutes of the respective meeting.
Article 8 – Minutes shall be drawn up in a clear manner, record the resolutions taken, the attendees, the dissenting votes, and any abstentions, being transcribed on proper book, which shall be signed by all the attendees, and be available to shareholders at the Company’s headquarters.
Paragraph One – The minutes shall be disclosed when required by law or regulation, or if requested by one of the members of the Fiscal Council, unless the majority of the members understand that the disclosure could endanger the Company’s legitimate interest.
Paragraph Two – Until the disclosure of the minutes, when authorized pursuant to the previous paragraph, the resolutions taken shall be confidential and of limited knowledge to its members and to the participants of the meetings. Confidentiality and restricted knowledge of the matters resolved upon by the Fiscal Council shall be retained if the disclosure is not authorized by the Fiscal Council members, subject to legal and regulatory requirements.
Article 9 – The Fiscal Council shall:
a) supervise, through any of its members, the managers’ actions, and shall verify the compliance with their legal and statutory duties;
b) issue opinion on the annual management report causing the inclusion, in its opinion, of the complementary information it sees required to or useful for deliberation by the Shareholders’ General Meeting;
c) issue opinion on the proposals of the management bodies, to be submitted to the Shareholders’ General Meeting, as regards changes in the capital share, issue of debentures or warrants, investment plans or capital budgets, dividend distribution, transformation, takeover, merger or split;
d) denounce, through any of its members, to the management bodies and, should they fail to take the necessary actions for protecting the Company’s interests, to the Shareholders’ General Meeting, errors, frauds or crimes found thereby, and suggest useful actions to Company;
e) convene the Shareholders’ Annual General Meeting if the management bodies delay the convening for more than one (1) month, and the Shareholders’ Special General Meeting, whenever serious or urgent reasons occur, including in the agenda of the meetings the matters deemed required thereby;
f) analyze, at least on a quarterly basis. in the terms set forth in Article 5 above, the trial balance and the other financial statements prepared, from time to time, by the Company;
g) review the financial statements of the fiscal year and issue opinion thereon;
h) request the presence of the Company’s Independent Auditors at the meetings for further clarifications as for the financial statements and opinions; and
i) perform such assignments during the liquidation, in view of the special provisions regulating it.
Paragraph One – The Chairman of the Fiscal Council shall, among other attributions provided for in this Internal Rules, be liable for:
a) convening and chairing the meetings of the Fiscal Council;
b) forwarding, to whom it may concern, the resolutions of the Fiscal Council;
c) preparing the agenda and calendar of meetings;
d) preparing the minutes of meetings;
e) complying and causing the compliance with the Fiscal Council’s Internal Rules; and,
f) Representing the Fiscal Council before the other bodies of the Company.
Paragraph Two – The function of member of the Fiscal Council cannot be delegated, as well as the assignments and powers granted thereto by law cannot be granted to another body of the Company.
Article 10 – The Fiscal Council, in the first meeting, shall define an indicative work program in order to meet its liability accordingly to the legal provisions. The work program shall contain:
a) definition of the scope and depth of the analyzes to be carried out, allowing the distribution of the tasks to facilitate the analyzes; and
b) sufficient coverage to ensure the certification of relevant information for inclusion in the applicable disclosure instruments.
Article 11 – When performing their tasks, during their terms of offices, the Fiscal Council members shall:
a) perform their functions in compliance with the fidelity and diligence duties provided for in law, within the legal limits, contributing to the defense of the interests of the Company and all shareholders, indistinctively, and avoiding any conflict situations that may affect the interests of the Company;
b) have available thereto copies of the Minutes of the meetings of the Board of Directors or the Executive Board, accounting or financial reports, further to clarifications and information;
c) when so requested, attend the meetings of the Board of Directors or the Executive Board, providing the necessary support and grounds to the decisions of the Board of Directors or the Executive Board, as the case may be;
d) attend the meetings of the Board of Directors and the Executive Board where matters they must issue opinion on shall be deliberated;
e) appear, at least one of them, to the Shareholders’ General Meetings, and respond information requests made by the stockholders; and
f) keep confidential information not yet disclosed to the market, obtained in reason of their office.
Article 12 – The compensation of the members of the Fiscal Council shall be fixed by the Shareholders’ General Meeting electing them, pursuant to Article 162, Paragraph Three of the Corporation Law
Article 13 – Cases not covered by this Internal Rulesshall be resolved at meetings of the very Fiscal Council of the Company, under the law and the Bylaws.
Article 14 – The members of the Fiscal Council shall be invested in their offices upon execution of the Investiture Term, which shall contain the obligation to comply with the arbitration clause, as provided in the Listing Rules of Novo Mercado.
Article 15 – When elected, Councilors shall execute the Company’s Disclosure Policy assuring, during and even after the term of office, the non-disclosure of any information they have or shall have access to when performing their functions as Fiscal Councilor, which is not publicly available, unless when complying with their legal liabilities.
Article 16 – The Company has a permanent D&O insurance in favor of the members of the Fiscal Council to protect them from liability for acts arising from the exercise of the office or function for the entire term of office respective mandates (including administrative and / or judicial defenses), except for acts committed with intent or bad faith.
Article 17 – This Internal Rules may be modified at any time whatsoever upon resolution of the majority of the members of the Fiscal Council.