1. Persons Responsible for the Form 1
Natura Cosméticos S.A.
2016 Reference Form
CONTENTS:
1. Persons responsible for the form 1
1.1 Declaration and identification of persons responsible for the information provided herein 1
2. Auditors 2
2.1./2.2. Identification and remuneration of independent auditors 2
2.3. Other material information 4
3. Selected financial information 5
3.1 Financial information - Consolidated 5
3.2 Selected non-accounting measurements 6
3.3. Material events subsequent to December 31, 2013 7
3.4 Income allocation policy 8
3.5 Dividend distribution and retained earnings 9
3.6 Dividends declared out of retained earnings or reserves accrued in previous years 10
3.7 Level of indebtedness 11
3.8 Liabilities by nature and maturity 12
3.9 Other material information 13
4. Risk factors 14
4.1 Description of risk factors that may influence investment decisions, particularly as regards to the following: 14
4.2 Description of key market risks 21
4.3 Arbitration and administrative procedures and lawsuits that are not protected by absolute privilege 23
4.4 Arbitration, administrative and court procedures in which the Other Parties are managers or former managers, controlling shareholders or former controlling shareholders or investors 34
4.5 Relevant procedures protected by absolute privilege 35
4.6 Repetitive or connected arbitration, administrative and court procedures that are jointly relevant, based on similar facts and legal causes and not protected by absolute privilege, that the Company or its Subsidiaries are parties to, broken down by labor, tax, civil and others, and providing: 36
4.7 Other significant contingencies 38
4.8 Considering the regulations in effect in the country of origin of foreign issuers, as well as those in effect in countries where the securities issued by said foreign issuers are held in custody, if other than the country of origin, identify: 39
5. Risk management and internal control policy 40
5.1 Regarding the risks referred to in item 4.1, inform: 40
5.2. Regarding market risks referred to in item 4.2, inform: 41
5.3. Regarding the controls adopted by the issuer to ensure the preparation of reliable financial statements, indicate: 42
5.4. Inform if, with regard to the last fiscal year, there were significant changes in the main risks to which the issuer is exposed or in the risk management policy adopted, commenting further on any expectations for reducing or increasing the issuer's exposure to such risks 44
6. History of the issuer 46
6.1 / 6.2 / 6.4 – Incorporation of the issuer, duration and date of registration with the CVM 46
6.3 Brief history of the company 47
6.5 Indicate any filing for bankruptcy, provided that the filing was based on a material amount, or for a court-supervised or out-of-court reorganization by the issuer, and the current status 48
6.6 Provide any other information deemed material by the issuer 49
7. Activity of Issuer 50
7.1 Summary of the activities undertaken by the Company and its subsidiaries 50
7.2 Information on operating segments 55
7.3 Information on products and services related to operating segments 57
7.4 Clients responsible for more than 10% of total net revenue 73
7.5 Effects of government regulations on our activities 74
7.6 Material revenues from other countries 79
7.7 Effects of foreign regulations on our business 80
7.8 Social and Environmental Policies 81
7.9 Other Material Information 86
8. Extraordinary business 87
8.1 Inform the acquisition or disposal of any material asset that is not deemed part of the normal course of business of the Company. 87
8.2 Significant changes to the conduction of the issuer's business 88
8.3 Material agreements signed by the issuer and its subsidiaries that are not directly related to their operating activities 89
8.4 Other material information – Extraordinary business 90
9. Material assets 91
9.1 Noncurrent assets 91
9.1 - Material noncurrent assets / 9.1.a – Property, plant and equipment 103
9.1 - Material noncurrent assets / 9.1.b. Patents, brands, licenses, concessions, franchises and technology transfer agreements 104
9.1 Material noncurrent assets / 9.1.c Interest held in companies 105
9.2 Other material information 106
10. Officers' comments 107
10.1 The Officers must comment on: 107
10.2 The Officers must comment on: 139
10.3 The Officers must comment on any relevant effects that the following events have caused or are expected to cause on its financial statements and results: 145
10.4. The Officers must comment on: 147
10.5. The Officers must indicate and comment on critical accounting policies adopted by the Company, exploring in particular any accounting estimates made by management about uncertain and relevant matters for describing the financial situation and results, which require subjective or complex judgments, such as: provisions, contingencies, revenue recognition, tax credits, long-term assets, useful life of non-current assets, pension plans, adjustments of foreign currency conversion, environmental recovery costs, criteria for impairment testing assets and financial instruments 148
10.6. The Officers must describe the relevant items not shown in the financial statements of the Company, indicating: 150
10.7. For each item not shown on the financial statements indicated in item 10.6, the Officers must comment on: 151
10.8. The Officers must indicate and comment on the main elements of the Company’s business plan, exploring the following topics in particular: 152
10.9. Comment on other factors that materially influenced operating performance and were not identified or commented on in the other items of this section 154
11. Forecasts 155
11.1 Forecasts and assumptions disclosed 155
11.2 Monitoring of forecasts and assumptions disclosed 156
12. Shareholders’ meeting and management 157
12.1 Administrative structure 157
12.2 Describe the rules, policies and practices applicable to shareholders’ meetings 163
12.3 Rules, policies and practices applicable to the Board of Directors 165
12.4 Description of the arbitration clause for the resolution of conflicts through arbitration. 167
12.5/6 Composition and professional background of directors, officers and audit board members 168
12.7/8 Composition of committees 175
12.9 Existence of marital or steady union relationship or kinship to the second degree: 178
12.10 Relationship of subordination, service supplier or control among the directors and officers and subsidiaries, controlling shareholders and other 179
12.11 Agreement, including insurance policies, for the payment or reimbursement of expenses borne by directors and officers 180
12.12 Inform whether the issuer maintains any code of good practice of corporate governance and, if so, provide the code followed by any differentiated corporate governance practices adopted as a result thereof 181
12.13 Other material information 185
13. Management compensation 188
13.1. Describe the policy or practice for compensating the Board of Directors, Board of Executive Officers, Audit Board and Committees, including the following aspects: 188
13.2. For compensation recognized in the past three fiscal years and the compensation projected for current fiscal year of the board of directors, statutory board of executive officers and audit board, prepare a table including the following: 191
13.3. Regarding the variable compensation of the Board of Directors, Board of Executive Officers and Audit Board in the past three fiscal years of the Company and the compensation projected for fiscal year 2016 195
13.4. Regarding the stock option plan of the board of directors and statutory board of executive officers in effect in the past fiscal year and projected for the current fiscal year, describe: 198
13.5. Stock Option Plan and Restricted Share Plan recognized in the last three fiscal years 203
13.6. Outstanding Stock Options and Restricted Shares 206
13.7. Exercised options and/or restricted shares 208
13.8. Summarized description of the information required for understanding the data disclosed in items 13.5 to 13.7, such as an explanation of the method for pricing the shares and option, indicating, at least: 209
13.9. Inform the number of shares or ownership interests directly or indirectly held, in Brazil or abroad, and other securities convertible into shares or ownership interests, issued by the Company, its direct or indirect controlling shareholders, subsidiaries or companies under joint control, by members of the board of directors, statutory board of executive officers or audit board, grouped by body 211
13.10. Regarding the pension plan for members of the Board of Directors and Board of Executive Officers, provide a table with the following information: 212
13.11. Average compensation of the Board of Directors, Board of Executive Officers and Audit Board for the last three fiscal years 213
13.12. Description of the contractual arrangements, insurance policies or other instruments that structure compensation or indemnification mechanisms for executives in the event of termination or retirement, indicating the financial consequences for the Company 214
13.13. For the last three fiscal years, indicate the percentage of total compensation of each organ recognized in the profit or loss of the Company for members of the Board of Directors, Board of Executive Officers or the Audit Board that are parties related to the direct or indirect controlling shareholders, as defined by the accounting rules dealing with this matter 215
13.14. For the last three fiscal years, indicate the amounts recognized in the profit or loss of the Company as compensation of the members of the board of directors, statutory officers or Audit Board grouped by body, for any reason other than the position they hold, such as consulting or advisory commissions and services 216
13.15. For the last three fiscal years, indicate the values recognized in the profit or loss of the direct or indirect controlling shareholders, of companies under shared control and of subsidiaries of the Company as compensation of the members of the Board of Directors, Board of Executive Officers or Audit Board, grouped by body, specifying the reason for such values being attributed to these individuals 217
13.16. Provide other Material Information 218
14. Human Resources 219
14.1 Describe the issuer’s human resources, providing the following information: 219
14.2. Comment on any material change in the numbers disclosed in item 14.1 above 221
14.3 Description of employee compensation policy 222
14.4. Describe the relations between the issuer and trade unions, indicating if there were any stoppages or strikes in the past three fiscal years 228
14.5. Provide other information deemed material by the issuer 229
15. Ownership 230
15.3 Capital breakdown 237
15.4 Organizational chart of shareholders and economic group 238
15.5 For any Shareholders' Agreement filed at the issuer’s registered office or to which the controlling shareholder is a party that regulates voting rights or the transfer of the issuer’s shares, indicate: 241
15.6 Indicate material changes in ownership interest held by participants in the controlling group and by the Company’s directors and officers 244
16. Transactions with related parties 248
16.1 Describe the rules, policies and practices adopted by the issuer for related-party transactions, as determined by the accounting policies addressing this topic 248
16.2 Information on transactions with related parties 249
16.3 Identification of actions taken to address conflicts of interest and evidence that related-party transactions have been entered at an arm’s length basis 252
17. Capital Stock 254
17.1 Information on capital stock 254
17.2 Capital increases 255
17.3 Information on share splits, reverse splits, bonus shares 258
17.4 Information on capital reductions 259
17.5 Other material information 260
18. Securities 261
18.1 Describe the rights of each type and class of share issued: 261
18.2 Bylaws provisions restricting the voting rights of relevant shareholders or that require the issuer to carry out a public tender offer 262
18.3 Bylaws provisions establishing exceptions or events of suspension of policy (voting) or economic rights envisaged by the Bylaws 265
18.4 Trading volume, highest and lowest prices of shares traded 266
18.5 Description of other securities issued in Brazil 267
18.6 Domestic markets in which the securities of the Company have been listed for trading 273
18.7 Class and type of securities admitted for trading in the international markets 274
18.8 Describe securities issued abroad, when material, indicating, if applicable: 275
18.9 Describe public offerings for distribution carried out by the issuer or by third parties, including controlling shareholders and affiliated companies and subsidiaries, involving the securities of the Company 276
18.10 If the issuer conducted public tender offers, indicate: 277
18.11 Describe public tender offers made by the issuer involving shares issued by third parties 278
18.12. Provide other information deemed material by the issuer 279
19. Share Buyback / Treasury Shares 280
19.1 Information on share buyback programs of the issuer 280
19.2 Transactions involving securities held in treasury 281
19.3 Provide other information deemed material by the issuer 282
20. Securities Trading Policy 283
20.1 Indicate if the issuer adopted a trading policy for securities issued by the direct or indirect controlling shareholders, managers, members of the board of directors, of the audit board and of any other body with technical or advisory functions created by the Bylaws, informing: 283
20.2 Provide other information deemed material by the issuer 284
21. Disclosure Policy 285
21.1 Description of internal rules, regulations or procedures adopted by the Company to ensure that the information to be made public is gathered, processed and reported accurately and timely 285
21.2 Describe the policy for disclosing material acts or facts adopted by the issuer, indicating the communication channel(s) used to disseminate information on material acts and facts and the procedures for maintaining the confidentiality of the material information that is not disclosed and the places in which the policy is available for consultation 287
21.3 Inform the managers responsible for implementing, maintaining, evaluating and overseeing the information disclosure policy 288
21.4 Other material information 289
Natura Cosméticos S.A.
2016 Reference Form
1. Persons responsible for the form
1.1 Declaration and identification of persons responsible for the information provided herein
Name of the person responsible for the content of the form Roberto Oliveira de Lima
Position of the person responsible Chief Executive Officer
Name of the person responsible for the content of the form José Roberto Lettiere
Position of the person responsible Chief Financial and
Investor Relations Officer
The above officers declare that:
a. they have reviewed the reference form
b. all the information contained herein is in compliance with CVM Instruction 480, particularly articles 14 to 19.