Persons responsible for the form - INFOinvestnatu.infoinvest.com.br/enu/5875/Formulario de...

Natura Cosméticos S.A.2016 Reference Form

CONTENTS:

1. PERSONS RESPONSIBLE FOR THE FORM....................................................................11.1 Declaration and identification of persons responsible for the information provided herein...............................................................................................................................1

2. AUDITORS..................................................................................................................22.1./2.2. Identification and remuneration of independent auditors.................................22.3. Other material information.......................................................................................4

3. SELECTED FINANCIAL INFORMATION..........................................................................53.1 Financial information - Consolidated.........................................................................53.2 Selected non-accounting measurements...................................................................63.3. Material events subsequent to December 31, 2013.................................................73.4 Income allocation policy............................................................................................83.5 Dividend distribution and retained earnings..............................................................93.6 Dividends declared out of retained earnings or reserves accrued in previous years.......................................................................................................................................103.7 Level of indebtedness..............................................................................................113.8 Liabilities by nature and maturity............................................................................123.9 Other material information......................................................................................13

4. RISK FACTORS..........................................................................................................144.1 Description of risk factors that may influence investment decisions, particularly as regards to the following:................................................................................................144.2 Description of key market risks...............................................................................214.3 Arbitration and administrative procedures and lawsuits that are not protected by absolute privilege..........................................................................................................234.4 Arbitration, administrative and court procedures in which the Other Parties are managers or former managers, controlling shareholders or former controlling shareholders or investors..............................................................................................344.5 Relevant procedures protected by absolute privilege.............................................354.6 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:..............................................................................364.7 Other significant contingencies...............................................................................384.8 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.............................................405.1 Regarding the risks referred to in item 4.1, inform:............................................405.2. Regarding market risks referred to in item 4.2, inform:......................................415.3. Regarding the controls adopted by the issuer to ensure the preparation of reliable financial statements, indicate:.......................................................................................425.4. 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..........................................................................................466.1 / 6.2 / 6.4 – Incorporation of the issuer, duration and date of registration with the CVM...............................................................................................................................466.3 Brief history of the company...................................................................................476.5 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.................................................................................................507.1 Summary of the activities undertaken by the Company and its subsidiaries..........507.2 Information on operating segments.........................................................................557.3 Information on products and services related to operating segments....................577.4 Clients responsible for more than 10% of total net revenue...................................737.5 Effects of government regulations on our activities................................................747.6 Material revenues from other countries...................................................................797.7 Effects of foreign regulations on our business.........................................................807.8 Social and Environmental Policies...........................................................................817.9 Other Material Information......................................................................................86

8. EXTRAORDINARY BUSINESS.....................................................................................878.1 Inform the acquisition or disposal of any material asset that is not deemed part of the normal course of business of the Company.............................................................878.2 Significant changes to the conduction of the issuer's business...............................888.3 Material agreements signed by the issuer and its subsidiaries that are not directly related to their operating activities...............................................................................898.4 Other material information – Extraordinary business..............................................90

9. MATERIAL ASSETS....................................................................................................919.1 Noncurrent assets....................................................................................................919.1 - Material noncurrent assets / 9.1.a – Property, plant and equipment...................1039.1 - Material noncurrent assets / 9.1.b. Patents, brands, licenses, concessions, franchises and technology transfer agreements.........................................................1049.1 Material noncurrent assets / 9.1.c Interest held in companies..............................1059.2 Other material information....................................................................................106

10. OFFICERS' COMMENTS...........................................................................................10710.1 The Officers must comment on:...................................................................10710.2 The Officers must comment on:...........................................................................13910.3 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:.........14510.4. The Officers must comment on:....................................................................14710.5. 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..................................................................................................................14810.6. The Officers must describe the relevant items not shown in the financial statements of the Company, indicating:......................................................................15010.7. For each item not shown on the financial statements indicated in item 10.6, the Officers must comment on:.........................................................................................15110.8. The Officers must indicate and comment on the main elements of the Company’s business plan, exploring the following topics in particular:.......................15210.9. 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............................................................................................................15511.1 Forecasts and assumptions disclosed..................................................................15511.2 Monitoring of forecasts and assumptions disclosed............................................156

12. SHAREHOLDERS’ MEETING AND MANAGEMENT.....................................................15712.1 Administrative structure......................................................................................15712.2 Describe the rules, policies and practices applicable to shareholders’ meetings16312.3 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....................................................................................................................16712.5/6 Composition and professional background of directors, officers and audit board members......................................................................................................................16812.7/8 Composition of committees..............................................................................17512.9 Existence of marital or steady union relationship or kinship to the second degree:.....................................................................................................................................17812.10 Relationship of subordination, service supplier or control among the directors and officers and subsidiaries, controlling shareholders and other...............................17912.11 Agreement, including insurance policies, for the payment or reimbursement of expenses borne by directors and officers....................................................................18012.12 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......................................................18112.13 Other material information................................................................................185

13. MANAGEMENT COMPENSATION..............................................................................18813.1. Describe the policy or practice for compensating the Board of Directors, Board of Executive Officers, Audit Board and Committees, including the following aspects:....18813.2. 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:...............................19113.3. 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........................................................19513.4. 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:.............................................................................................................19813.5. Stock Option Plan and Restricted Share Plan recognized in the last three fiscal years............................................................................................................................20313.6. Outstanding Stock Options and Restricted Shares.............................................20613.7. Exercised options and/or restricted shares.........................................................20813.8. 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:........................................................................20913.9. 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................................................21113.10. Regarding the pension plan for members of the Board of Directors and Board of Executive Officers, provide a table with the following information:.............................21213.11. Average compensation of the Board of Directors, Board of Executive Officers and Audit Board for the last three fiscal years............................................................21313.12. 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......................................................................................................................21413.13. 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...............................................................................................21513.14. 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............21613.15. 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......................................21713.16. Provide other Material Information...................................................................218

14. HUMAN RESOURCES..............................................................................................219


14.1 Describe the issuer’s human resources, providing the following information:....21914.2. Comment on any material change in the numbers disclosed in item 14.1 above.....................................................................................................................................22114.3 Description of employee compensation policy....................................................22214.4. Describe the relations between the issuer and trade unions, indicating if there were any stoppages or strikes in the past three fiscal years.......................................22814.5. Provide other information deemed material by the issuer.................................229

15. OWNERSHIP...........................................................................................................23015.3 Capital breakdown...............................................................................................23715.4 Organizational chart of shareholders and economic group.................................23815.5 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:.............................................................................................24115.6 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................................................................24816.1 Describe the rules, policies and practices adopted by the issuer for related-party transactions, as determined by the accounting policies addressing this topic............24816.2 Information on transactions with related parties.................................................24916.3 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......................................................................................................25417.1 Information on capital stock................................................................................25417.2 Capital increases.................................................................................................25517.3 Information on share splits, reverse splits, bonus shares....................................25817.4 Information on capital reductions........................................................................25917.5 Other material information..................................................................................260

18. SECURITIES............................................................................................................26118.1 Describe the rights of each type and class of share issued:................................26118.2 Bylaws provisions restricting the voting rights of relevant shareholders or that require the issuer to carry out a public tender offer....................................................26218.3 Bylaws provisions establishing exceptions or events of suspension of policy (voting) or economic rights envisaged by the Bylaws.................................................26518.4 Trading volume, highest and lowest prices of shares traded..............................26618.5 Description of other securities issued in Brazil....................................................26718.6 Domestic markets in which the securities of the Company have been listed for trading.........................................................................................................................27318.7 Class and type of securities admitted for trading in the international markets...27418.8 Describe securities issued abroad, when material, indicating, if applicable:.......27518.9 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......................................................................27618.10 If the issuer conducted public tender offers, indicate:.......................................27718.11 Describe public tender offers made by the issuer involving shares issued by third parties..........................................................................................................................27818.12. Provide other information deemed material by the issuer...............................279

19. SHARE BUYBACK / TREASURY SHARES...................................................................28019.1 Information on share buyback programs of the issuer........................................28019.2 Transactions involving securities held in treasury...............................................28119.3 Provide other information deemed material by the issuer..................................282

20. SECURITIES TRADING POLICY.................................................................................28320.1 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..............................................................................................28521.1 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..................................................................................................28521.2 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.................................................................................................................28721.3 Inform the managers responsible for implementing, maintaining, evaluating and overseeing the information disclosure policy..............................................................28821.4 Other material information..................................................................................289


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 LimaPosition of the person responsible Chief Executive Officer

Name of the person responsible for the content of the form José Roberto LettierePosition of the person responsible Chief Financial and

Investor Relations Officer

The above officers declare that:

a. they have reviewed the reference formb. all the information contained herein is in compliance with CVM Instruction 480, particularly articles 14 to 19. c. said information gives a true, accurate and complete picture of the Company’s economic and financial situation, the risks inherent to its activities and the securities issued by it.

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2. Auditors

2.1./2.2. Identification and remuneration of independent auditors

Has an auditor? YES

CVM code 471-5

Type of auditor Brazilian

Name Ernst & Young Terco Auditores Independentes S/A

Individual Taxpayer Id. (CPF) or Corporate Taxpayer Id. (CNPJ) 61.366.936/0001-25

Services provided during 1/1/2012 to 12/31/2016

Description of services

- Integrated audit: fees and reimbursement of expenses for the performance of independent audit services for the Financial Statements in BR GAAP and IFRS;- Study related to transfer prices in the operation established in Mexico;- Revision of the calculation of adjusted EBITDA, in accordance with the shareholders’ agreement for the additional acquisition of shares in Emeis Holdings Pty Ltd;- Revision of the social and environmental data included in the GRI indicators reported in our 2015 Annual Report.

Total remuneration paid to the independent auditors, broken down by type of service Payments in fiscal year 2013 (R$ thousand)

Audit .............................................2,715.9Other non-audit services ...............3,914.6Total...............................................6,630.5

Payments in fiscal year 2014 (R$ thousand)Audit .............................................3,059.0Other non-audit services ...............2,436.4Total...............................................5,495.4

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Payments in fiscal year 2015 (R$ thousand)Audit .............................................3,201.0Other non-audit services ...............99.0Total...............................................3,300.0

Reason for replacement Instruction 509, which amends the rule on the rotation of audit firmsReason given by the auditor if in disagreement with the justification of the issuer

Not applicable

Name of person responsible Period of services

Individual Taxpayer Id. (CPF) Address

Drayton Teixeira de Melo 4/1/2013 515.710.054-04 Av. Presidente Juscelino Kubitschek, 1830 – Torre I, 10º andar, Vila Nova Conceição, São Paulo, SP, Brasil, CEP 04543-900, Telephone (55 11) 25735222, e-mail [email protected]

Luiz Carlos Passetti 1/1/2012 to 3/31/2013

001.625.896-32 Av. Presidente Juscelino Kubitschek, 1830 – Torre I, 10º andar, Vila Nova Conceição, São Paulo, SP, Brasil, CEP 04543-900, Telephone (55 11) 25735222, e-mail [email protected]

Has an auditor? YES

CVM code 418-9

Type of auditor Brazilian

Name KPMG Auditores Independentes

Individual Taxpayer Id. (CPF) or Corporate Taxpayer Id. (CNPJ) 57.755.217/0001-29

Services provided during 1/1/2017

Description of services - Integrated audit: fees and reimbursement of expenses for the performance of independent audit services for the Financial Statements in BR GAAP and IFRS;

Total remuneration paid to the independent auditors, broken down by type of service

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Reason for replacement CVM Instruction CVM nº 308/99, which amends the rule on the rotation of audit firmsReason given by the auditor if in disagreement with the justification of the issuer

Not applicable

Name of person responsible Period of services

Individual Taxpayer Id. (CPF) Address

Guilherme Nunes 1/1/2017 201.828.928-40 Rua Arquiteto Olavo Redig de Campos, 105, Torre A, 6º andar,, Vila São Francisco, São Paulo, SP, Brasil, CEP 04711-904, Telefone (11) 39403104, Fax (11) 39403104, e-mail: [email protected]

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2.3. Other material information

In compliance with CVM Instruction 381/03, we hereby announce that the Company and its subsidiaries not only make their own judgments but also adopt the formal procedure of consulting with independent auditors Ernst & Young Terco Auditores Independentes S/A (since January 1, 2012), to ensure that the provision of other services does not affect their autonomy and objectivity required for performing independent audit services, and that due approval is obtained from the audit committee.In addition, these auditors are required to produce formal statements of their autonomy in performing non-audit services.The Company has the procedure of consulting its independent auditors before contracting them for services other than external audit to ensure that the provision of such services does not affect the autonomy and objectiveness required for performing independent audit services. The Company also seeks to obtain due approval from its Audit Committee for contracting such services.

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3. Selected financial information

3.1 Financial information - Consolidated

Brazilian real (R$) Fiscal year (12/31/2015) Fiscal year (12/31/2014) Fiscal year (12/31/2013)Shareholders’ equity 1,028,185,374.22 1,123,700,212.28 1,145,636,844.16

Total assets 9,394,980,783.85 7,200,084,210.81 6,248,321,149.01Net revenue/Interest income/Insurance prem. earned 7,899,002,377.28 7,408,422,884.13 7,010,311,277.43

Gross income 5,483,012,337.28 5,158,303,555.48 4,899,191,283.78

Net income (loss) 522,732,774.20 741,220,816.15 842,608,428.93

Diluted earnings (loss) per share (R$ per share) 1.1928 1.7057 1.9586

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3.2 Selected non-accounting measurements

Other financial information

Fiscal year endedDecember 31,

2015 2014 2013(in R$ million)

Net income from continuing operations (attributable to non-controlling shareholders) 513.5 732.8 842.6

(+) Depreciation and amortization 239.2 189.8 193.0 (+) Net financial (income) expenses 381.4 268.3 158.3 (+) Taxes 352.6 355.2 409.9 (+) Noncontrolling interest 9.2 8.4 5.2EBITDA (1) 1,496.0 1,554.5 1,609.0

(1) We define “EBITDA” as net income before income tax and social contribution, net financial result, depreciation and amortization. “EBITDA” is not an accounting measurement recognized by the accounting principles adopted in Brazil (BR GAAP) or International Financial Reporting Standards (IFRS) (as defined in this Reference Form), and should not be considered as a replacement for net income, cash flow from operations or other measures of operating performance or liquidity established by the IFRS or BR GAAP. Our definition of EBITDA may differ from the one used by other companies. We use EBITDA to analyze our financial and operating performance, and as the basis for some of our administrative decisions. We also believe that EBITDA provides us and investors with a better understanding of our ability to meet our obligations and to obtain fresh financing for investments and working capital. However, EBITDA has limitations that hamper its utilization as a measure of our profitability, since it does not take into account some of the costs arising from our business, which may adversely impact our profits, such as financial expenses, taxes, depreciation, capital expenses and other related charges.

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3.3. Material events subsequent to December 31, 2013On April 20, 2016, the Company paid dividends in the amount of R$105.7 million and gross interest on equity in the amount of R$17.4 million (R$14.3 million, net of income tax), related to the results for fiscal year 2015, which, in addition to the amounts of R$207.3 million in dividends and R$29.0 million in gross interest on equity paid in August 2015, correspond to a distribution of approximately 70% of net income for fiscal year 2015.

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3.4 Income allocation policy

Fiscal years ended December 312014 2014 2013

Rules on retention of earnings

On December 31, 2015, the retained earnings reserve was constituted in accordance with article 196 of Law 6,404/76, in the amount of R$ 154,053,753.44. The retention related to fiscal year 2015 is based on the capital budget prepared by Management and approved by the Board of Directors on February 17, 2016, which was submitted to the Annual Shareholders Meeting held on April 15, 2016, for approval.

On December 31, 2014, the retained earnings reserve was constituted in accordance with article 196 of Law 6,404/76, in the amount of R$ 27,226,925.20, from which R$ 3,824,854.44 related to the acquisition of minority interest was deducted, resulting in a total of R$ 23,402,070.76. The retention related to fiscal year 2014 is based on the capital budget prepared by Management and approved by the Board of Directors on February 11, 2015 and rectified at the Board of Directors Meeting held on April 8, 2015, which was submitted to the Annual Shareholders Meeting held on April 14, 2015, for approval.

On December 31, 2013, there was no retention of earnings. Non-retention in fiscal year 2013 was proposed by Management and approved by the Board of Directors on February 12, 2014, which was submitted for approval by shareholders at the Annual Shareholders’ Meeting held on April 11, 2014.

Rules on distribution of dividends

Our shareholders were entitled to receive dividends equivalent to 30% (thirty percent) of our net income for the fiscal year.

Pursuant to our Bylaws in effect, our net income could be adjusted:

(i) by adding the amounts resulting from the reversal, during the year, of contingency reserves previously accrued;

(ii) by deducting the amounts allocated, in the year, to the constitution of the legal reserve and contingency reserves; and

(iii) whenever the minimum mandatory dividend exceeds the realized portion of net income from the year, Management may propose, and the Shareholders’ Meeting may approve, allocating the surplus to the constitution of an unrealized profits reserve.



(iv) by adding the amounts resulting from the reversal, during the year, of contingency reserves previously accrued;

(v) by deducting the amounts allocated, in the year, to the constitution of the legal reserve and contingency reserves; and

(i) whenever the minimum mandatory dividend exceeds the realized portion of net income from the year, Management may propose, and the Shareholders’ Meeting may approve, allocating the surplus to the constitution of an unrealized profits reserve.



(ii) by adding the amounts resulting from the reversal, during the year, of contingency reserves previously accrued;

(iii) by deducting the amounts allocated, in the year, to the constitution of the legal reserve and contingency reserves; and

(i) whenever the minimum mandatory dividend exceeds the realized portion of net income from the year, Management may propose, and the Shareholders’ Meeting may approve, allocating the surplus to the constitution of an unrealized profits reserve.

Periodicity of distribution of dividends (1)

Semiannual Semiannual Semiannual

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Any restrictions to distribution of dividends imposed by law or special regulation applicable to the issuer, or contracts, court orders, administrative or arbitral decisions

None None None

(1) The Bylaws guarantee the right to report biannual or interim balance sheets, based on which the Board of Directors may approve the distribution of interim dividends.

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3.5 Dividend distribution and retained earnings

(in Brazilian real) Fiscal year 12/31/2015 Fiscal year 12/31/2014 Fiscal year 12/31/2013Adjusted net income 513,512,511.47 709,416,737.61 861,225,849.28

Dividend distribution as a percentage of adjusted net income 70.000000 100.000000 100.000000

Rate of return over shareholders’ equity 49.943590 65.962506 73.719310

Total dividend distribution 359.458.758;43 709,416,737.61 861,225,849.28

Retained earnings 154.053.753;44 0.00 0.00

Date of retention approval 4/15/2016 4/11/2015 4/11/2014

Retained earnings Amount Payment date Amount Payment date Amount Payment dateMandatory dividendsCommon shares 313,022,284.31 4/20/2016 212,825,021.28 4/16/2015 258,367,754.78 4/16/2014

Interest on equityCommon shares 46,436,474.12 4/20/2016 48,139,066.25 4/16/2015 49,916,186.45 4/16/2014

OtherCommon shares 448,452,650.08 4/16/2015 552,941,908.05 4/16/2014

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3.6 Dividends declared out of retained earnings or reserves accrued in previous years

(R$ million) Fiscal years ended December 31,2015 2014 2013

Constitution/(Consumption) of retained earnings reserve 154.1 27.2 (18.6)Constitution of tax incentive reserve 0.0 0.0 0.0

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3.7 Level of indebtedness

Fiscal Year Total debt of any type Type of ratio Debt ratio Description and reason for using a different ratio

12/31/2015 5,535,880,869.50 Debt ratio 5.13643568

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3.8 Liabilities by nature and maturityFiscal year (12/31/2015)

Type of debtType of guarantee

Other guarantees or privileges Less than 1 year 1 to 3 years 3 to 5 years Over 5 years Total

Loan Security interest 2,161,383,456.46 1,894,018,350.52 1,202,115,089.00 278,363,973.52 5,535,880,869.50

Total 2,161,383,456.46 1,894,018,350.52 1,202,115,089.00 278,363,973.52 5,535,880,869.50

Notes

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3.9 Other material information

Certain amounts and percentages included in this document were rounded off and hence the total amounts shown in some of the tables may not correspond to the arithmetic sum of the numbers preceding them.

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4. Risk factors

4.1 Description of risk factors that may influence investment decisions, particularly as regards to the following: a) to the issuer; b) to its controller, direct or indirect, or control group; c) to its shareholders; d) to its subsidiaries and affiliates; e) to its suppliers; f) to its clients; g) to the sectors of the economy in which the issuer operates; h) regulation of the sectors in which the issuer operates; i) to the foreign countries where the issuer operates; j) to socio-environmental issues.

The risks related to our Business and Industry that may impact the investment decision are listed below:

4.1.1 Issuer

a) Brand Management

i. Changes in consumer preferences

Changes in consumer preferences or reduction in demand could negatively affect our operating results and growth prospects.The success of our brand management strategy depends on our ability to foresee, evaluate and react effectively to changes in the spending levels of consumers and their preferences regarding beauty and other products.Our competitiveness partly depends on the successful creation of new products, as well as on consumer satisfaction and preferences in line with market trends. Preferences and trends may change due to a variety of factors, such as changes in demographic trends, changes in the characteristics and ingredients of products, new market trends, climate, negative publicity from lawsuits against us or our peers, or a weak economy in one or more of the markets where we operate.Consumers could start buying the products of competitors, or the demand for products in our segment as a whole could decline. If we are unable to foresee changes in consumer preferences and trends, our business, financial condition and operating results could be adversely affected.

ii. Changes in consumer preferences

Failure to implement key growth initiatives which are part of our strategy may hamper our capacity to:

• strengthen the Natura brand and our other brands and sub-brands, and their association with personal well-being, quality, innovation and sustainability.

• develop value proposition and innovative products.• successfully develop new products in the market segments where we operate,

identify new raw materials, technologies and manufacture products that fulfill current market needs and trends.

• protect our trademarks and other intellectual property rights.

Failure to implement other growth initiatives may also adversely affect our business, financial condition and operation’s results and impact our success in:

• attain sustainable rates of growth and profitability in our existing markets and successfully identify opportunities in new markets.

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• expand the network of autonomous resellers (Natura Consultants) in Brazil and other markets across Latin America where we operate, with an increase in productivity.

• achieve significant growth and profitability rates in the business model called Natura Network (Rede Natura – evolution of direct sales that digitally connects consultants, consumers and Natura), considering the expansion in Brazil and international operations.

• improve the operational efficiency of our existing equipment and installations.• maintain our information technology systems functioning, avoiding disruptions,

breakdowns, failures and integration restrictions.

b) Innovation

i. Loss of innovation capability

One critical element of our strategy is our capacity to maintain close relations with autonomous resellers. One of the ways of maintaining these relations is to constantly revamp our portfolio of innovative and attractive products. Our capacity to constantly evolve our portfolio depends on a variety of factors, including our capacity to foresee market requirements and use new raw materials and technologies. If we are not capable of constantly revamping our product portfolio, our ability to maintain and expand our network of autonomous resellers could be affected.

ii. Protection of brands and patent

If we are not capable of protecting our intellectual property rights, especially patents and trademarks, our competitiveness could be adversely affected.

The market for our products significantly depends on the value associated with our innovations and the value recognition of our brand. Our intellectual property, including patents, patent drawings, trademarks, sub-brands, copyrights and trade secrets, is very important for us. We own significant patents, patent drawings, and trademarks that are used in marketing and distributing our flagship products in the countries where we operate. Though a major part of our significant intellectual property is registered in certain foreign countries where we operate, there can be no guarantee of the rights associated with said intellectual property in these countries. Moreover, the laws of a few countries may not protect our intellectual property rights or may not provide adequate protection. The costs required for protecting our intellectual property rights could be substantial.

b) Business Continuity

i. Interruption at our research and development, production and distribution units

Since we are involved in the research, production, distribution and development of products, we are subject to risks inherent to such activities, including industrial accidents, environmental actions, strikes and other labor disputes, interruptions in logistics, power supply or information systems, total or partial loss of operating units, product quality control, safety, specific license requirements and other regulatory factors, as well as natural disasters and other external factors over which we have no control whatsoever. For example, we use inflammable or explosive substances, such as alcohol, in the manufacture of our products. These inflammable products are stored in our operational units and could pose risks of damage to our installations. Accidents at our operational units, especially our main industrial plant in Cajamar (São Paulo), could expose us to the risks of total or partial loss of our facilities, depending on the severity.

ii. Interruption in our main Information Technology (IT) systems

We use IT systems to support our business. The IT systems we use include support systems for financial reports, web-based tools, and an internal communication and data transfer network. We may also use a variety of technological tools (online ordering system, electronic billing and online training tools) to assist us and enable us communicate with our autonomous resellers. In the coming years, we plan to increase the use of IT tools to

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communicate with our autonomous resellers. Any IT system is subject to failure or interruptions that are inherent in the complex scenario of localized applications and the system architecture. Incidents originating from legacy or non-integrated systems, or both, as well as fires, floods, power failure, telecommunication failure, terrorist attacks, break-ins, data corruption and similar events too may occur. Other risks and challenges could arise as we upgrade, modernize and standardize our IT systems. Though our network security measures are standardized, which include due diligence at service providers, our systems could also be vulnerable to computer viruses, data security failures, break-ins, data corruption and similar interruptions caused by unauthorized access to these systems. The occurrence of these and other incidents could damage our IT systems and adversely affect our business, financial condition and operating results.

4.1.2 Resellers

Inability to attract and retain our autonomous resellers could affect our results.In countries where we operate, our business is mainly in the form of direct sales through a network of autonomous resellers, who sell our products, and autonomous sales advisors (Natura Consultant Advisors), who, besides selling our products, are also responsible for sharing business information and guidelines to small groups of Natura Consultants. These autonomous resellers are our main sales channel and our business expansion is linked to the growth of the reseller network.Natura Consultants (CN) and Natura Consultant Advisors (CNO) are autonomous resellers who buy products directly from us and sell them to their clients. There is no exclusivity agreement between us and our autonomous resellers, nor do we require a minimum period of association with us.On December 31, 2015, we had 1,376.9 thousand Natura Consultants in Brazil and 506.1 thousand outside Brazil. Our success in attracting and retaining autonomous resellers depends on a series of factors, which include:

• maintaining close and quality relationships with our autonomous resellers;• continuing to create innovative and successful products, which is important to secure

the interest of autonomous resellers in our company/brand;• maintaining the average prices of products that enable our autonomous resellers to

increase their profits;• public perception of our brand, the line of products and the direct sales channel;• competitiveness among autonomous resellers of other direct sales companies;• the level of service provided to autonomous resellers;• macroeconomic conditions in Brazil and other countries where we operate.

4.1.3 Regulation of the sector in which we operate

a) Taxation

We believe we run a greater risk, compared to other industries, of an increase in our tax burden because, historically, the federal and state governments in Brazil have treated certain products, such as cosmetics, alcoholic beverages and cigarettes as non-essential consumer goods and levied higher taxes. We may be forced to pass on, wholly or a significant portion of, these tax increases to the price of our products. Any increase in prices could adversely affect demand for our products and, consequently, our business, financial condition and operating results.Moreover, we are responsible for withholding and paying the state VAT tax on direct sales (ICMS), of autonomous resellers, calculated based on a survey to determine the value-added margin (VAM) or based on a presumed additional margin for each Brazilian state. The ICMS withheld is reflected in the price of products we sell to our autonomous resellers. If any Brazilian state increases the value-added margin of the products bought by autonomous resellers, we will have to withhold additional amounts on their behalf and will thus be obliged to pass on a part or the whole of these increases to the final prices of our products. If the prices increase significantly, our autonomous resellers might concluded that reselling our products is no longer profitable. Any increase in the ICMS withheld from autonomous resellers

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or a reduction in the volume sold by them can negatively affect our business, financial condition and operating results

b) Legal

i. Labor

Change of the legal status of autonomous resellers and advisors could adversely affect our operating results.

According to Brazilian laws, the autonomous resellers and advisors, considering the autonomous and entrepreneurial nature of their activity, do not have any employment relationship with Natura. However, the Brazilian government could enact a law or regulation that could characterize autonomous resellers and advisors as employees or in any other manner oblige us to make social security contributions on their behalf. Any amendment in law or numerous unfavorable court decisions that determine the existence of employment relationship or the obligation to make social security contributions of autonomous resellers and advisors would imply substantial additional costs that could result in restructuring our business, which could severely affect our financial condition and operating results. Similar changes in other countries where we operate could also cause adverse impacts on our strategy and results.

ii. Civil, Tax and Labor

We could incur losses and spend time and money defending lawsuits and arbitration proceedings.

Currently, we are a party in several civil, administrative, environmental, labor, tax and arbitration cases. These claims involve substantial amounts and other punitive measures. Several individual disputes account for a significant portion of the total claims against us. See "Items 4.3, 4.4, 4.5, 4.6 and 4.7 on lawsuits, administrative proceedings and arbitration procedures" and note 17 and 18 of the consolidated financial statements of 2015 for a description of these lawsuits.In case of unfavorable decisions in claims involving substantial amounts, or if the actual losses are significantly higher than the provisions constituted, the aggregate cost of unfavorable decisions could have a significantly adverse effect on our financial condition and operating results. Moreover, our management may be forced to dedicate its time and attention to defend against these claims, which could prevent it from concentrating in our core business. Depending on the result, certain lawsuits could result in restrictions to our operations and have a significantly adverse effect on our business, financial condition and operating results

4.1.4 Sector of Economy in which we operate

a) Significant competition in the cosmetics, fragrances and toiletries (CFT) segment

We face stiff competition from several Brazilian and multinational manufacturers who sell their products through a diverse range of distribution channels, including direct sales. On a global scale, a few of our competitors have much more marketing and financial resources, a broader consumer base and a greater variety of products than we do.

b) Significant competition for autonomous resellers in the direct sales channel

We face strong competition in the direct sales channel, who seek to attract our resellers by offering income opportunities, campaigns and other incentives. These competitors sell products that are similar to ours and also other categories of products.

4.1.5 Our controller (direct or indirect) or control group

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We believe that our capacity to retain our competitive advantage largely depends on our top management. Despite having in our Company long-term incentive and retention programs, the loss of any member of our top management or our inability to attract and retain experienced managers could adversely affect our business, financial condition and operating results

4.1.6 Socio-environmental issues

Changes in environmental laws and regulations, including those applicable to access and use of Brazilian biodiversity, can adversely affect our business, including our capacity to develop new products

Brazilian manufacturers and distributors, including us, are subject to strict environmental laws at the federal, state and municipal spheres, including with regard to water consumption, solid waste, biodiversity, licenses and gas emissions into the atmosphere, among others. We need authorizations from government agencies for a few of our activities. If we fail to comply with these laws and regulations, we could be fined and have our authorizations canceled and our company, as well as our executive officers and directors, could be subject to penal sanctions.

We may have to incur expenditure on environmental corrective measures. We may also have to suspend certain operations until corrective measures are taken. Government agencies or other authorities may also announce new rules that are more restrictive or may seek more restrictive interpretations of existing laws and regulations, which could force us to spend additional funds on adapting to environmental laws which, in turn, could adversely affect our business, financial condition and operating results.

Brazilian environmental rules could become more restrictive in areas related to our activities, including with regard to climate changes (greenhouse gas emission standards), solid waste (targets for return of packaging to the company and its recycling after use by consumers) and water resources (payments by companies in Brazil for use of water), among other issues. In December 2009, the Brazilian Congress approved the National Policy on Climate Change (PNMC), which establishes objectives based on the commitments voluntarily undertaken by Brazil at the UN Framework Convention on Climate Change, the Kyoto Protocol and other international norms on climate changes. The PNMC could result the implementation of new technologies and/or industrial conditions that restrict our production and selling activities and force us to incur additional costs. Brazil’s National Policy on Solid Waste was enacted in 2010 introduces obligations of returning packaging to improve recycling and could introduce additional environment-related obligations on manufacturers in relation to collection of such materials.

Finally, contrary to the traditional way of industrial innovation, our innovation strategy is based mainly on using the biodiversity of the Pan-Amazon region. This critical element of our strategy could be harmed if new laws or regulations, or even different interpretations of existing laws, further restrict the use of the country’s natural resources or the associated traditional knowledge. This element will also be affected if additional research and development costs were imposed. Brazil’s biodiversity protection rules were established at the UN Convention on Biological Diversity and in Brazilian laws, which represent additional costs and challenges to our research and development initiatives. In the future, these rules could become stricter, driving up our innovation and new product launch costs.The changes described above could adversely affect our business, financial condition and operating results, as well as our image as a company that creates, among others, products developed from the resources in Brazil’s ecosystem, as described in “Item 7. Issuer’s activities.”4.1.7 Countries where we operate

On December 31, 2015, including the Natura brand, we had operations in six countries other than Brazil (Argentina, Chile, Colombia, Mexico, Peru and France). We are exposed to the risk of changes in social, political and economic conditions, including inflation, inherent to foreign

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operations, which could adversely affect our business, financial condition and/or operating results. These alterations include changes in laws and policies that govern foreign investment in countries where we operate, hyperinflation, currency depreciation, exchange controls, changes in consumer buying habits, including changes in the procurement channels, as well as amendments in Brazilian laws and regulations on foreign trade and investment, or the adoption of new Brazilian tax or international laws, or exposure to additional tax obligations. Also, by virtue of the acquisition on December 20, 2012, through subsidiary Natura Brasil Pty Ltd, of 65% of Emeis Holding Pty Ltd, which operates under the “Aesop” brand in Australia, Asia, Europe and North America, we added these regions to the risks described above. In December 2015, the indirect interest held by Natura Cosméticos S.A. in Emeis, through its subsidiary Natura Australia Pty Ltd., reached 78.74%.

4.1.8 Subsidiaries and colligate

We continue to seek investment opportunities in the cosmetics, fragrances and toiletries sector around the world, both in markets where we already operate and in other markets, and we could consider possible acquisitions, partnerships or alliances anytime. Any future acquisitions, partnerships or alliances or related financing could significantly affect our business, financial condition and operating results, and we cannot offer any guarantee that we will conclude any transaction we had planned. Moreover, we could incur high costs and expenses such as for integrating the acquired companies with our business or investing in geographical expansion or even in new projects. Finally, investments outside Brazil may involve risks to which we have not been earlier exposed.

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4.2 Description of key market risks

4.2 Descrever, quantitativa e qualitativamente, os principais riscos de mercado a que o emissor está exposto, inclusive em relação a riscos cambiais e a taxas de juros.The federal government has exercised and continues to exercise significant influence over the Brazilian economy. This influence, coupled with the political and economic conditions, could adversely affect our operations and the market value of our sharesThe Brazilian economy has been marked by frequent – and at times significant – interventions by the federal government, which frequently changes the monetary policy in terms of credit and tax aspects, among others. The federal government’s actions to control inflation and other policies, in the past, involved interest rate hikes, changes in the fiscal policy, price controls, currency devaluation, controls on capital flows and limits on imports of goods and services. We do not have control and cannot foresee what measures or policies the federal government could adopt in the future. Our business, financial condition and operating results, as well as the market value of our shares may be adversely affected by changes in public policy at the federal, state and municipal spheres, with regard to public tariffs and exchange controls, and other factors, such as:

• interest rates;• inflation;• liquidity in financial and capital markets;• fiscal policy and tax regime; and• political, social and economic measures that may be taken or could affect Brazil.

Interest rate riskIn 2013, 2014 and 2015, approximately 75.0%, 58.0% and 50.3%, respectively, of our debt was denominated in foreign currency, of which 99.99% was hedged through derivatives operations, whose interest rates were generally based on the interbank rate (DI). As a result, our main exposure to interest rates is related to the variations in the DI rate.On December 31, 2015, our exposure at fixed interest rates was R$377.5 million, which corresponds to 6.82% of our debt. For 49.1% of the R$377.5 million, fixed interest rates were swapped for the DI rate, accompanying the rate applied to financial investments. The remaining 50.9% are subsidized loans, whose interest rates do not exceed the long-term interest rate (TJLP) and hence are considered low risk by the company. Also, on the same date, R$192.1 million of our short- and long-term debt, or 3.47% of our total debt, were pegged to the TJLP, compared to R$220.5 million, or 5.54%% of total debt on December 31, 2014.Any increase in the interest rates will increase the costs of servicing our net debt and the net financial expenses originated by them, which could negatively affect our business, financial condition and operating results. Moreover, any increase in the basic interest rate by the Central Bank of Brazil could negatively affect our results by stifling economic growth and, consequently, demand for our products.In addition, the Company maintains certain contracts for borrowings and financing that require the Company and its subsidiaries to maintain certain leverage ratios. Any deterioration in our financial situation and/or operating results could affect our capacity to comply with these pre-established ratio requirements.

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Foreign exchange risk Any sharp depreciation of the real against the dollar could cause significantly negative effects on the Brazilian economy and/or our business.On December 31, 2015, around 20% of our cost of goods sold was pegged to foreign currency, especially, the exchange rate of the Brazilian real to the U.S. dollar and the euro.On December 31, 2015, R$2,782 million of our short- and long-term debt, or 50.3% of our total debt, was denominated in foreign currency, compared to R$2.309.9 million, or 58.0% of our total debt on December 31, 2014. These accounts, entirely made up of borrowings and financing on December 31, 2015 and December 31, 2014, are hedged by swap contracts.Foreign exchange volatility could adversely affect the Brazilian economy and our CompanyIn 2014, the Brazilian real continued to depreciate, driven by the improvement in the U.S. economy, and the exchange rate closed the year at R$ 2.66/US$1.00, down 13.4%. In 2015, given the deterioration in the federal government’s budget deficit, high inflation and the political crisis, Brazil lost the investment grade ratings assigned to it by the main credit rating agencies and the Brazilian real registered an exchange rate against the U.S. dollar of R$3.90/US$1.00 on December 31, 2015, representing depreciation in the year of 47.0%.The depreciation of the real against the dollar creates inflationary pressures in Brazil and force interest rate hikes which, in turn, adversely affect the growth of the Brazilian economy in general and hamper both our financial situation and operating results, besides restricting access to international financial markets and drawing government interventions that could include recessionary policies. Moreover, the depreciation of the real against the dollar could, at a time of a slowdown in economic activity, lead to a reduction in consumption, inflationary pressures and weaker growth of the economy in general. On the other hand, any appreciation of the real against the dollar and other foreign currencies could worsen Brazil’s balance of trade, besides braking export-driven growth. Depending on the circumstances, the appreciation or devaluation of the real could have a significant and adverse effect on the growth of the Brazilian economy and on our business.Developments and changes in the risk perception in other countries, especially in developed economies, could affect the market price of global securities, including the market price of our stockThe market value of securities issued by Brazilian companies is influenced, to varying degrees, by economic and market conditions in other countries, including developed and emerging economies. Though the economic scenario in these countries significantly differs from the economic scenario in Brazil, investors’ reaction to developments in other countries may cause an adverse effect on the market value of the securities issued by Brazilian companies. Crises in other emerging economies or differentiated economic policies may reduce investor interest in the securities of Brazilian companies, including securities issued by us, which could affect the market price of our shares.Moreover, changes in foreign trade regulations and customs rules on imports of goods could jeopardize the business dynamics of companies.

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4.3 Arbitration and administrative procedures and lawsuits that are not protected by absolute privilege

The Company is party to lawsuits and/or administrative procedures in the civil, tax, labor and regulatory spheres.Civil claims

The most relevant civil lawsuits include: (i) the public-interest civil action filed by the Federal Prosecution Office of the State of Acre against the Company and other institutions for alleged access to the traditional knowledge associated with the active ingredient Murumuru owned by the Ashaninka indigenous community. In the opinion of our legal counsel, the probability of loss is remote; and (ii) a preparatory procedure implemented to investigate alleged violations of traditional knowledge associated with genetic heritage. Our legal counsel believes that the risk of these procedures becoming public-interest civil actions (ACP) in December 2015 is possible.

The main ongoing procedures are detailed below:

(i)

Procedure no. 2007.30.00.002117-3 (2009.01.00.028297-0)

Court Federal Courts of Rio Branco (AC)

Instance 2nd Court of Justice of Acre

Date Filed 08/08/2007

Parties FEDERAL PROSECUTION OFFICE against FÁBIO DIAS FERNANDES, FÁBIO DIAS FERNANDES-ME, CHEMYUNION QUÍMICA LTDA, NATURA COSMÉTICOS S.A. and INSTITUTO NACIONAL DA PROPRIEDADE INDUSTRIAL – INPI

Principal Amounts Amount in dispute: R$ 15.1 million

Main Facts The Federal Prosecution Office filed a public-interest civil action for alleged violations to the traditional knowledge associated with the genetic heritage of murumuru held by the Ashaninka indigenous community. During the preparatory procedure that investigated the relationship between Ashaninkas and the researcher Fábio Dias Fernantes, Natura was cited as an example and ended up becoming a party to the claim because it makes products using murumuru. In May 2013, the claim against Natura was dismissed. The Federal Prosecution Office filed an appeal and the final and unappealable decision has not yet been given.

Chance of Loss In the opinion of our Company’s legal counsel, the risk of loss in this case is remote.

Analysis of Impact For Natura, the maximum impact could be (a) the declaration of nullity of patents involving murumuru, (b) decision to “pay indemnification of 50% of the gross income obtained in the years of the commercial exploration of murumuru products by the Company to date, and for the next five (5) years following the date of the final and unappealable decision or, alternatively, as arbitrated in court,” (c) joint decision for the defendants to pay for collective pain and suffering caused to the Ashaninka indigenous community, and (d) decision for the defendants to pay fees for the loss of suit.

Amount Provisioned The chance of success in the procedure does not justify the provisioning of any amount of the claim in this case. Only fees ad exitum were provisioned for, in the restated amount of R$1.9 million in December 2015.

(ii)

Administrative procedure no. 1.13.000.000816/2008-95

Court Prosecution Office

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Instance Federal Prosecution Office in Amazonas


Parties Natura Inovação e Tecnologia de Produtos Ltda.

Principal Amounts none

Main Facts The federal civil investigation refers to alleged violations of the traditional knowledge associated with the genetic heritage of andiroba and murumuru, related to the traditional communities of Médio Juruá in the municipality of Carauari. A similar investigation, pending before the State Prosecution Office (002/2005), was attached to this procedure in 2009. Natura submitted its defense, requesting dismissal of the procedure.

Chance of Loss In the opinion of our Company's legal counsel, the probability of the investigation becoming a public-interest civil action is possible

Analysis of Impact The possible impact would be the filing of a public-interest civil action against Natura.

Amount Provisioned The probability of a loss from this procedure does not justify the provisioning of any amounts.

Labor claims

(i)

Tax Deficiency Notice No. 200.488.457

Court Regional Labor and Employment Superintendence of TocantinsInstance

Instance Administrative court of first instance

Date Filed Filing date: 4/12/2013

Parties REGIONAL LABOR AND EMPLOYMENT SUPERINTENDENCY OF TOCANTINS and NATURA COSMÉTICOS S.A.

Principal Amounts

Four hundred thirty-one million, two hundred thirty thousand, nine hundred twenty reais (R$431,230,920.00).

Main Facts The tax auditor of Labor in Tocantins, Ricardo Adriano Fujita, claimed that the requirements for establishing an employment relationship were met by all active Natura Consultants, totaling one million, seventy-one thousand, two hundred ninety-four (1,071,294) people. Decision in favor of the defendant on 06/19/13.

Decision for the defendant maintained and case filed on 10/29/2015.

Chance of Loss Natura’s probability of loss is remote.

Analysis of Impact

If the grounds for this violation are maintained, Natura will have a financial impact (fine) as well as a commercial impact, because the recognition of an employment relationship with the sales channel could potentially prevent the Company from maintaining its sales model.

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Amount Provisioned In view of the strong arguments presented by the company to withdraw this violation, combined with the decision of invalidity by the administrative court of first instance, pending analysis by the administrative courts of first instance, there is no reason to provision any amount for this procedure.

Tax claims

On December 31, 2015, Natura was a party to 235 tax procedures involving the aggregate amount of R$5,429 million. Of this amount, R$684.8 million was provisioned under the item “Tax contingencies” and R$40.6 million under “Provision for tax risks.” Escrow deposits amounted to R$276 million.

Interdependence – IPI, PIS and COFINS taxes

Natura has had this current organizational structure since 1994, which separates the production and commercial operations at different facilities and fully complies with governing law.The vast majority of the companies operating in the Toiletries, Fragrancies and Cosmetics (CFT) market adopt the same structure.On December 20, 2012, notices of deficiency related to IPI, PIS and COFINS taxes were issued against Natura in the original amount of R$1,373 million for fiscal year 2008. Both deficiency notices are based on the assumption that the “Industry” (Subsidiary) applied incorrect prices in sales to the “Distributor” “(Parent Company”) and thus the calculation basis used as the parameter for the payment of taxes (IPI, PIS and COFINS) would be lower than it should be. To arrive at this conclusion, tax authorities criticize Natura’s organizational structure, the separation of production and distribution activities as different legal entities, as well as the profit margin adopted by the Subsidiary to establish the selling price in operations to Natura, which, pursuant to law, is its interdependent company.Specifically in the IPI tax deficiency notice, the tax inspection authority challenged the tax calculation basis used by “Industry” in sales to the legal entity with which it has an interdependent relationship, (inappropriately) expanding the concept of “sender’s region” incorporated by item I of article 136 of RIPI/2002 (Decree 4,544/2002). Note that the Administrative Authority’s attempt to expand the concept of “sender’s region,” incorporated by IPI legislation to explore the territorial limits of the municipality, has already been dismissed by the Office of the Federal Revenue Service of Brazil and the erstwhile Board of Taxpayers, specifically in notices of deficiency that addressed a similar question, previously issued against the Subsidiary itself.On the other hand, in its notices of deficiency regarding PIS and COFINS, the inspection authority, in a completely ideological and generalized manner, questioned the separation of industrial and commercial activities by Natura in August 1994, understanding that there had been abuse of the right to self-organization and, thus, implementation of alleged "tax planning" to artificially reduce the calculation basis for PIS and COFINS, such that the activities conducted by the "Industry" would not be binding on the tax authority. In this regard, note that in August 1994, the date of separation of the activities, revenues from the “Industry” and the “Distributor” were normally taxed by PIS and COFINS, with application of the same rates, and this taxation system lasted for another six (6) years until the enactment of Federal Law 10,147 on 12/22/2000, which implemented the single-phase taxation system, concentrated in the “Industry,” and hence the claim that there was abuse of rights is absolutely baseless in this case.According to our internal and external legal counsel, the way the operation was structured and its tax effects are defensible and hence the risk of loss is classified as remote. For this reason, Natura did not accrue any provision on its financial statements and an unfavorable final decision could adversely affect the Company.The details of the respective administrative procedures still pending follow:(i)

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Procedure no. 16561.720180/2012-76

Court Administrative Council of Tax Appeals

Instance Administrative court of second instance


Parties Indústria e Comércio de Cosméticos Natura Ltda. and Federal Revenue Service of Brazil

Amounts in December/15 R$823.60 million

Main Facts On December 20, 2012, tax deficiency notices for PIS and COFINS were issued against “Indústria” (Subsidiary) in the original amount of R$723.54 million referring to the year 2008, concerning the alleged irregularity regarding the form of organization of the companies to artificially decrease the tax calculation base on said payments. In January 2013, Natura presented an administrative objection. In July 2013, Natura was informed of the decision by the court of first instance, which rejected the notice. The trial of the appeal filed by the tax authorities is currently pending.

Chance of Loss In the opinion of our Company’s legal counsel, the risk of loss in this procedure is remote.

Analysis of Impact Payment of the amount involved

Amount Provisioned The probability of loss in the procedure does not justify the provisioning of any amount of the claim.

(ii)

Procedure no. 16561,720176/2012-16


Instance 2nd administrative instance


Parties Indústria e Comércio de Cosméticos Natura Ltda. and Federal Revenue Service of Brazil


Main Facts On December 20, 2012, an IPI tax deficiency notice was issued against the Company in the original amount of R$ 649.88 million referring to the year 2008, concerning the alleged irregularity resulting from the non-application of the Minimum Taxable Amount on sales to “Distribuidora” (Parent Company), with which it has an interdependent relationship, resulting in the alleged payment of a lower amount of the tax in question. In January 2013, Natura presented an administrative objection. In July that year, Natura was informed of the decision by the court of first instance, which rejected the notice. A trial of the Appeal filed by Natura is currently pending.




Goodwill amortizationOn December 27, 2000, Natura Empreendimentos S.A. (“Natura Empreendimentos”) became a wholly-owned subsidiary of Natura Participações S.A. (“Natura Participações”) through the absorption of the shares of Natura Empreendimentos by Natura Participações and the consequent increase in capital. The shares of Natura Empreendimentos were merged at their

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economic value. The economic value of the shares was calculated by an independent company based on the discounted cash flow of Natura Empreendimentos projected over a ten-year horizon. Natura Participações issued new shares to the former shareholders of Natura Empreendimentos and recognized on its balance sheet goodwill equivalent to the difference between the book value and economic value of the shares of Natura Empreendimentos.On March 5, 2004, Natura Cosméticos S.A. absorbed successively Natura Empreendimentos and Natura Participações. These operations enabled us, pursuant to tax law, to amortize the goodwill originally booked by Natura Participações during the absorption of the shares of Natura Empreendimentos, while calculating income and social contribution taxes of Natura Cosméticos S.A. On January 31, 2004, Natura Participações booked, before its merger, a provision for the distribution of future dividends, in accordance with CVM Instruction 319 of December 3, 1999, amended by CVM Instruction 349 of March 6, 2001, on the goodwill booked. Consequent to the merger of Natura Participações into Natura Cosméticos S.A., the latter started amortizing goodwill based on its period of realization, that is, using the straight line method for seven years as from April 2004. Of the total goodwill of R$1,028 million, a sum of R$840.3 million had been amortized as of December 31, 2008.The decision was made by the Company after the Management consulted with our legal counsel and external legal counsel, and is based on a valuation report that proves that we had already reached, in the period from 2004 through 2008, the profitability results earlier projected at the time of the stock merger. It must also be noted that after the goodwill was fully amortized in 2009, the effective rates of income and social contribution taxes did not enjoy the benefit of goodwill amortization.On June 30, 2009, income and social contribution tax deficiency notices were issued against the Company relating to the period from 2004 through 2007, in the aggregate amount of approximately R$544 million, questioning the tax deductibility of the amortization of goodwill generated from the operation by which Natura Empreendimentos became a wholly-owned subsidiary of Natura Participações (stock merger carried out on December 27, 2000). The rationale for the notice was basically that the acquisition of equity interest with goodwill in this case was not possible since it was an operation within the same business group (“internal goodwill”), with no payment involved. The tax authorities also accuse the Company of fraud and, hence, are claiming an aggravated fine. The Company was not successful in the administrative court of first instance and filed an appeal with the Administrative Council of Tax Appeals (CARF), which, in December 2012, partially ruled in favor of the Company, setting aside the accusation of fraud and the consequent application of the increased fine. The Company filed for a Special Appeal with the Higher Chamber of Tax Appeals of CARF and is currently awaiting its decision.In the tax administrative procedure resulting from this notice, the investment of R$747 million held by the Company in the subsidiary Natura Indústria was called into question.On August 30, 2013, new income and social contribution tax notices were issued against the Company for 2008 and 2009, in the aggregate amount of approximately R$547 million, relating to the same subject of the tax deficiency notices served on June 30, 2009. Tax authorities insist on accusing the Company of fraud and include the Company’s managers at the time of the operation in the notices as joint debtors. In June 2014, the Company was notified of the decision of the administrative court of first instance upholding the tax notice in relation to the Company, but excluded the several and joint liability of the managers. The Company currently is awaiting a ruling on the motion for clarification filed against the decision of the Administrative Council of Tax Appeals (CARF), which upheld the tax claim.According to our legal counsel, the way the operation was structured and its tax effects are defensible and the risk of loss is classified as remote, and hence Natura did not accrue any provision on its financial statements and an unfavorable final decision could adversely affect the Company.The details of the respective procedure follow:(i)

Procedure no. 16561.000059/2009-29

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Court Higher Chamber for Tax Appeals

Instance Administrative court of third instance


Parties Natura Cosméticos S.A. and Federal Revenue Service of Brazil

Amounts in December/15 R$666 million (without considering the 75% reduction in the fine)

Main Facts On June 30, 2009, income and social contribution tax deficiency notices were served against Natura totaling approximately R$ 544 million, questioning the tax deductibility of the amortization of goodwill generated from the operation by which Natura Empreendimentos became a wholly-owned subsidiary of Natura Participações (stock merger carried out on December 27, 2000). In November 2009, the objection filed by the Company was dismissed. In December 2012, the Administrative Council of Tax Appeals (CARF) partially granted the appeal filed by Natura, reducing the fine amount since there was no evidence of fraud. Natura is currently awaiting a trial of the Special Appeal by the Higher Chamber for Tax Appeals (CSRF).




(ii)Procedure no. 10880.722.396/2013-68


Instance Administrative court of second instance



Principal Amounts R$655 million

Main Facts On August 30, 2013, income and social contribution tax deficiency notices were served against Natura, once again questioning the legality of tax deductibility of the amortization of goodwill generated from the operation by which Natura Empreendimentos became a wholly-owned subsidiary of Natura Participações. In June 2014, the Company was notified of the adverse decision on the objection it filed. The Company currently is awaiting a ruling on the motion for clarification filed against the decision of the Administrative Council of Tax Appeals (CARF), which upheld the tax claim.

Chance of Loss In the opinion of our Company’s legal counsel, the probability of loss in this procedure is remote.

Analysis of Impact Payment of the amount involved.


Debentures

Natura is a party to two tax administrative procedures and one lawsuit in the aggregate amount of R$175.5 million on December 31, 2015. The merits are related to the subordinated debentures issued by Natura in 1998 and redeemed in March 2004, which were fully

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subscribed to by the controlling shareholders. In 2003, 2006 and 2007, the Brazilian Federal Revenue Service issued notices of deficiency claiming that the payments made as remuneration for these debentures are not deductible for the calculation of Corporate Income Tax (IRPJ) and Social Contribution on Net Income (CSLL) for the fiscal years ended December 31, 1999, 2001 and 2002, respectively. The Administrative Authority based the notices on the fact that the debentures were subscribed to by related parties and therefore remuneration for those debentures would not be necessary and usual for Natura’s business.

• The notices of deficiency for the fiscal years ended December 31, 2001 and 2002 are pending in the third instance of Administrative Appeals, and the final decisions of said body may be disputed in the judicial sphere.

• The decision regarding the tax deficiency notice for fiscal year 1999 was given in January 2010 by the Administrative Council of Tax Appeals (CARF), which upheld part of the claim for IRPJ and the full claim for CSLL. Natura appealed this decision through a lawsuit, which received a decision in favor of the Company in the first instance and was appealed by the Administrative Authority. Natura is currently awaiting the decision of the Regional Federal Appellate Court of the Third Region (second instance).

In the opinion of our legal counsel, the probability of loss in any of these three procedures is remote and hence Natura did not accrue any provision on its financial statements, meaning that an unfavorable final decision could adversely affect the Company.The details of the respective administrative procedure follow:(i)

Procedure no. 13899.001314/2006-16

Court Higher Chamber for Tax AppealsInstance Administrative court of third instanceDate Filed 12/22/2006Parties Natura Cosméticos S.A. and Brazil’s Federal Revenue ServiceAmounts in December/13 R$52.50 millionMain Facts Tax deficiency notice filed claiming an alleged tax liability related to income tax

(IRPJ) and social contribution on net profit (CSLL) for the reference year 2001, under the allegation that the remuneration guaranteed for debentures issued by the Company and subscribed to by individual shareholders cannot be deducted from taxable income and from the calculation base of CSLL. The decision of the court of first instance was against Natura, which voluntarily appealed the decision, which was denied. Natura filed motions for clarification, which were partially granted. The Company is currently awaiting the trial of the appeal it filed at the Superior Court of Justice.


Analysis of Impact Payment of the amount involvedAmount Provisioned The probability of loss in the procedure does not justify the provisioning of any

amount of the claim.

(ii)

Procedure no. 13.896.002592/2007-93

Court Higher Chamber of Tax Appeals

Instance Administrative court of third instance



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Amounts in December/13 R$101 million

Main Facts Tax deficiency notice issued claiming an alleged tax liability related to income tax (IRPJ) and social contribution on net profit (CSLL) for the reference year 2002, alleging that the remuneration guaranteed for debentures issued by the Company and subscribed to by individual shareholders cannot be deducted from taxable income and from the calculation base of CSLL. The lower court ruled against the Company, which filed an appeal, which was partially granted on January 31, 2012, to reduce the amount to be paid as Withholding Income Tax (IRRF) on the remuneration attributed to the debentures. The Company is currently awaiting the trial of the appeal filed at the Superior Court of Justice by it and by the General Counsel for the Federal Treasury.




Notice of Infraction and Application of Fine by the State of São Paulo

On April 27, 2016, the branch office of the subsidiary Indústria e Comércio de Cosméticos Natura Ltda. was notified of the issuing of a Notice of Tax Deficiency and Fine (AIIM) claiming the collection of ICMS tax, under the tax substitution regime (ICMS-ST), by the Tax Authority of the State of São Paulo, which was fully paid by the recipient of the goods, the Parent Company, the distributor, Natura Cosméticos S/A. The details of the respective procedure follow:(i)

Procedure no. 4.076.898

Court Tax Authority Court

Instance Administrative court of first instance


Parties Indústria e Comércio de Cosméticos Natura Ltda. and the Tax Authority of the State of São Paulo


Main Facts On April 27, 2016, a tax deficiency notice was filed against the branch office of the subsidiary Indústria, in the amount of R$558.6 million, questioning the shipment of goods to the Parent Company, the distributor, the recipient of the goods. On May 25 2016, an Objection was filed against the notice, which is currently pending trial.

Chance of Loss In the opinion of our legal counsel, the probability of loss in this procedure is possible.With regard to the payment of a fine exceeding 100% (between 100% and 150%) the probability of loss is considered remote.


Amount Provisioned The probability of loss in the procedure does not justify the provisioning of any amount.

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Tax Deficiency Notice of Minas Gerais

On July 25, 2014, the parent company “Cosméticos” was notified of the filing of a tax deficiency notice claiming payment of ICMS tax under the tax substitution regime (ICMS-st), alleging that the Company could not use the special regime agreed upon with the State for shipments to resellers in the state of Minas Gerais from its branch office located in the state of São Paulo. The details of the respective procedure follow:(i)

Procedure no. 01.000223556-16

Court 1st Court of Tax Procedures of the District of Belo Horizonte/MG

Instance Court of first instance


Parties Natura Cosméticos S/A and the Tax Authority of the State of Minas Gerais


Main Facts On July 25, 2014, a tax deficiency notice was filed against the Parent Company “Cosméticos” for collection of ICMS-st tax liabilities. The decision in the administrative instance was against the Parent Company. Since the trial of the appeal filed by the Minas Gerais Taxpayers Council did not follow the constitutional precepts applicable to the case, a Writ of Mandamus (no. 6098924-10.2015.8.13.0024) was filed to declare the administrative decision void and resume the trial.

Chance of Loss In the opinion of our legal counsel, the probability of loss in this procedure is possible for the tax liability (R$188.1 million) and remote for the remaining amount (R$112.6 million)


Amount Provisioned The probability of loss in the procedure does not justify the provisioning of any amount.

Writ of Mandamus – payment of income tax (IRPJ) and social contribution on net profit (CSLL) on amounts received as compensatory interest on arrearsOn January 27, 2009, the Parent Company “Cosméticos” filed a Writ of Mandamus to protect its clear legal right to not pay income tax (IRPJ) and social contribution on net profit (CSLL) on amounts received as compensatory interest on arrears received for late fulfillment of contractual obligations in which it is the creditor party and to compensate amounts unduly paid for such purpose.The details of the respective procedure follow:(i)

Procedure no. 20096100002644-3

Court Regional Federal Appellate Court of the 3rd Region

Instance Legal court of second instance


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Parties Natura Cosméticos S/A and the Federative Republic of Brazil

Amounts in December/13 R$265 millionR$67.9 million to be reimbursed if the process is in favor of the Parent Company.

Main Facts On January 27, 2009, the Parent Company “Cosméticos” filed a writ of mandamus to recognize its right not to pay income tax (IRPJ) and social contribution on net profit (CSLL) on amounts received due to the late payment of contractual obligations in which it is the creditor party. ON 2/4/2009, an injunction was granted and on 4/7/2009 a decision was made in favor of plaintiff. The Company is currently awaiting a decision on the appeal filed by the Federative Republic of Brazil.

Chance of Loss In the opinion of our legal counsel, the probability of loss in this procedure is possible.


Amount Provisioned The entire amount in dispute.

4.3.1 provide the total provisioned amount, if any, of the procedures and lawsuits described in the item.On December 31, 2015, cases involving contingent liabilities amounted to R$5,936.6 million, and the total amount involved in cases with the risk of possible loss was R$ 1,425 million, based on our assessment and that of our legal counsel, and our provisioning for lawsuits and administrative procedures was approximately R$77.9 million (recorded under “Provision for tax, civil and labor risks”, related to lawsuits protected or not by secrecy), of which R$40.6 million were related to tax lawsuits, R$19.3 million to labor lawsuits and R$17.9 million to civil lawsuits. Additionally, the Company also provisioned R$684.8 under tax obligations. We believe that our provisions for legal and administrative risks are sufficient to cover probable losses. Thus, we believe that if any court and/or administrative decisions come to be unfavorable for the Company, they should have no materially adverse effect on our business, except the cases related to the relationship of interdependence among companies (IPI, PIS and COFINS taxes) and the procedures related to our subordinated debentures and goodwill amortization, which are described above.

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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

4.4 Arbitration and administrative procedures and lawsuits to which the Company or its Subsidiaries are a Party, not protected by absolute privilege, and in which the Other Parties are their managers or former managers, controlling shareholders or former controlling shareholders, investors or investors in the Company or its Subsidiaries4.4.1 Provide the total provisioned amount, if any, of the procedures or lawsuits described in the itemOn December 31, 2014, there was no arbitration or administrative procedure or lawsuit to which our Company or our subsidiaries were a party and in which the other parties were their managers or former managers, controlling shareholders or former controlling shareholders or investors in the Company or its subsidiaries.

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4.5 Relevant procedures protected by absolute privilege

4.5 In relation to the material processes protected by privilege to which the Company or its Subsidiaries are party and that have not been disclosed in items 4.3 and 4.4 above, analyze their impact in case of an unfavorable outcome and the amounts involved.

Civil Lawsuits

In December 2015, we had an aggregate amount of R$13.7 million in pending lawsuits involving Biodiversity, of which R$5.2 million were classified with a probability of loss of possible according to our opinion and our legal counsel. The total amount provisioned is R$997 thousand, which corresponds to attorney fees.The main procedures in course are detailed below:

i. Declaratory judgment actions filed by Natura. Natura has filed eight (8) lawsuits against the Brazilian government requesting a declaration that no action by government authorities is required to access the genetic heritage of Brazilian biodiversity. In the opinion of our Company’s legal counsel, the probability of loss in each of the suits is possible.

ii. Notices from IBAMA:

Until December 2015, Natura received 70 notices of environmental violation from IBAMA for alleged irregular access to the Brazilian biodiversity to conduct research and product development. The fines related to these notices total R$14,192,500.00, for alleged irregular access to the Brazilian biodiversity to conduct product research and development or for alleged lack of sharing the benefits from such accesses. These notices total R$13,693 million in fines and date mostly to 2010, and only two were issued in 2011. The notice of violation with an initial amount of R$10 million was reduced to R$1,850 million after the defense was presented (none of these amounts is monetarily restated). Four notices of environmental violation notices were annulled by IBAMA, but no unappealable administrative judgment has yet been announced. As of December 2015, we had a total of R$997 thousand provisioned for attorney fees for the administrative procedures arising from the abovementioned notices of violation.Natura does not agree with these notices and has filed an administrative challenge against them. We believe that the need for authorization from the government to launch a study is an obstacle to the development of science and does not guarantee the rights of traditional communities or the protection of biodiversity. In addition, the analysis of the request for authorization by the appropriate authority, which normally takes almost three years, would hinder pure and applied research in business activities.Natura will challenge in court any unfavorable decision announced in the administrative procedures at IBAMA and hence the Company’s legal advisors chose to classify the risk of these procedures as follows: (a) for lawsuits involving violations for allegedly not sharing benefits, the risk of loss in court is remote; and (b) for lawsuits involving violations for alleged access to genetic heritage without authorization, the risk of loss in court is possible.

In this regard, note that except for an input from land belonging to the Brazilian government, with which Natura has been negotiating through its Negotiation Committee, the Company shares benefits in the case of 100% of its accesses to the genetic heritage of Brazilian biodiversity and traditional knowledge associated therewith, and in fact is a pioneer in sharing benefits with the traditional communities, holding most of the access authorizations issued by the regulatory agency to private Brazilian companies to date.

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:

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Civil Lawsuits

On December 31, 2015, we were party to 2,317 civil lawsuits in Brazil and four elsewhere in Latin America. The total amount involved in the lawsuits was approximately R$88.3 million, of which R$5.9 million is provisioned for. The majority of these procedures refers to requests for damages and pain and suffering related to the use of our products, claims of undue inclusion of the names of Natura Consultants in the database of the Credit Protection Service as delinquent debtors and undue inclusion of third-party names in the database of the Credit Protection Service as delinquent debtors due to the fraudulent registration practices.Labor Lawsuits

On December 31, 2015, we were party to 1,240 labor claims in Brazil and 35 elsewhere in Latin America. The total amount claimed in these lawsuits was approximately R$427.1 million, of which R$19.3 million is provisioned for (R$17.1 million from lawsuits in Brazil and R$1.6 million abroad), of which R$14.5 million is net of deposits into court. Approximately 43.6% of pending labor claims was filed by employees of outsourced companies that provide customer service, security and transportation services, among other services. The claims of the employees of third-party service providers relate to severance payments, salary premiums, overtime and other amounts due. Governing law determines that we have joint liability for the payment of the labor obligations of our contracted service providers. Labor claims filed by former employees also seek the payment of overtime.On December 31, 2015, there were no labor lawsuits that individually or jointly were relevant to the business of the Company and/or its subsidiaries.Regulatory

On December 31, 2015, the Company had 86 administrative procedures and one lawsuit pending. The administrative procedures mostly involve sanitary violations related to standards issued by the National Health Surveillance Agency (ANVISA) and one involving the retroactive payment of the Sanitary Inspection Fee (TFVS) related to goods subject to violation notices. The lawsuit claims the annulment of the administrative act (violation notice issued by PROCON/SP), which is based on an alleged violation of the Consumer Defense Code (marketing a product to consumers without including on the outer packaging information on the composition of its elements, which were printed only on the inside of the packaging). In accordance with Law 6,437 of August 20, 1977, if the administrative procedures filed against us are upheld, a fine of no less than R$2,000 and no more than R$1.5 million, among other penalties, may apply for each violation committed, in addition to the banning of the product, the suspension of the product’s sale and/or manufacture, the cancellation of product registration, the partial or full ban of the establishment, the cancellation of the establishment’s permit and the cancellation of the company’s operating license. The health authority will take into account mitigating and aggravating circumstances, the seriousness of the fact in terms of its consequences for public health, and the violator’s record with regard to sanitary standards. In 2015, we had no administrative sanctions or fines from ANVISA or significant fines related to product labeling.4.6.1 Provide the total provisioned amount, if any, of the processes described in item 4.6.

For civil lawsuits, the amount discussed is approximately R$88,3 million, of which R$5,9 million are provisioned.For labor claims, the amount claimed in these lawsuits was approximately R$427.1 million. Of this total, R$19.3 million were provisioned (R$ 17.7 million originating from discussions in the national territory and R$1.6 million abroad), of which R$14.5 million net of judicial deposits.The regulatory processes involve infractions with probable risk of loss in the amount of R$5.4 million.

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4.7 Other significant contingenciesThere were no other significant contingencies not addressed in previous items.

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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:Item 4.8 does not apply to our Company.

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5. Risk management and internal control policy

5.1 Regarding the risks referred to in item 4.1, inform:

a. If the issuer has a formalized risk management policy. If so, describe the body that approved it and the approval date. If not, describe the reasons for not adopting a policy.

b. The Company has a document establishing guidelines for risk management that was approved, in 2013, by the Audit, Risk Management and Finance Committee and by the Board of Directors.

c. The purposes and strategies of risk management policy, if any, including:

i. The risks from which the Company must protect itself

ii. The protection instruments used

iii. The organizational structure for risk managementThe Company seeks to protect against its risks considering their economic, social and environmental aspects in two groups: strategic risks, which can affect the business aspirations and perpetuity of the Company; and operational risks, which are related to the Company's internal and business continuity processes. The work is monitored by the Statutory Executive Board and by the Board of Directors, with the support of its advisory committees.

The Company has a global strategic plan defined for the next three years that was approved at various levels of hierarchy within the company, including the Board of Directors. As actions to protect the execution of the strategy, the plan is reviewed annually and divided into budget and priority projects, which are monitored by the Statutory Executive Board. The action plans for mitigating risks are monitored by the respective executive in a decentralized manner.

With regard to topics involving strategic risks, in 2015, the Company conducted a comprehensive strategic review of the structural aspects of its market and business. Based on the findings, the Company defined actions focused on revitalizing our direct selling channel, on the ongoing projects to enter other channels, on streamlining our portfolio, on concentrating investments in priority brands and projects and on reviewing our brand position and strategy to forge closer relations with the new profile of consumers. With regard to the market scenario in Brazil, the economic slowdown, higher tax burden and local-currency depreciation contributed to a reduction in sales and profitability during 2015. Despite this challenging scenario, supported by actions to protect against risks, we maintained our focus on initiatives to recover growth, innovate new products and capture operating efficiency gains. In this context, the Company made important launches in the Ekos and Todo Dia lines, in the fragrance segment and in the face care category, for example. The Company began conducting credit analyses of consultants on an individual basis, with the consequent expansion in credit limits generating R$212 million in incremental gross revenue. In July 2015, the Company began offering to its consultants access to credit and debit card terminals, mobile SIM cards and applications for placing orders, in partnership with specialized companies.In 2015, the International Operations maintained their accelerated pace of revenue and profitability growth. The actions to protect against risks included strengthening the strategic integration and the decision-making process of leaderships to meet the specific needs in each country and accelerating the dissemination of knowledge and the incorporation of practices, tools and processes. The Company has also continuously monitors the political and economic scenario of the countries in which it operates and reassesses its operational strategy, if necessary.

The Company also seeks to mitigate operational risks that could directly affect the execution of its strategy. Financial losses due to faults or interruptions at operating units are mitigated by taking out and managing insurance policies customized to meet the needs of the various different business profiles. The Company's critical systems are also taken into account in the disaster recovery plans being developed.

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The Company continuously monitors changes in taxation at the federal and state levels and is heavily involved in the industry environment through associations. It also rigorously monitors its legal liabilities, for which it draws on the support of an internal team formed by highly trained professionals as well as external expert partners, if necessary. The Company has a specific program for developing and retaining leaders, which is coordinated by the People Management department and connected to the business strategy, with the aim of strengthening and maintaining its executives.

The Company addresses the topic of information security through guidelines formalized in its Code of Conduct and through continuous efforts to raise awareness among employees, in accordance with the standard ISO 27002:2013. We also use tools that ensure traceability of communications.

With regard to the risk management structure, the Company has an Internal Controls and Risk Management Department that reports to the Chief Financial and Investor Relations Officer. The Executive Board is responsible across the organization (Brazil and international operations) for implementing the internal and risk management controls. The findings of their work are reported to the Audit, Risk Management and Financial Committee, which meets at least ten times per year. The Executive Board participates in all meetings of the Committee.

a. The adequacy of the operational and internal control structure for verifying the effectiveness of the policy adopted

The risk management activities for verify the effectiveness of the policy adopted include: monitoring the priority risks identified and described in this document; conducting annual self-assessments of risks and controls to learn managers’ perceptions of the Company’s business processes; taking out and managing insurance policies; assuring information security; regularly updating the internal control matrix and periodically assessing its effectiveness.

As part of the Company’s corporate governance and to support verification of the policy adopted, other functions (detailed in item 5.3) play an important role in the risk management and controls, including:

Internal Audit, which is part of the work plan for reviewing processes and investigating any irregularities.

Compliance, which focuses on topics related to Brazil’s anticorruption law.

Management Systems, which support the Company’s process chain, in addition to the existing guidance documents.

Ombudsman, which receives reports through Company’s hotline and/or other internal sources.

5.2. Regarding market risks referred to in item 4.2, inform:

a. If the issuer has a formalized risk management policy. If so, describe the body that approved it and the approval date. If not, describe the reasons for not adopting a policy.

The Company has a general treasury policy that establishes rules for currency hedging, which was formally approved in October 2011 by the Board of Directors.

b. The goals and strategies of the market risk management policy.

c. The adequacy of the operational and internal control structure for verifying the effectiveness of the policy adopted.

The Company’s currency hedge policy considers the amounts in denominated in foreign currency in its accounts receivable and payable for obligations already assumed and recorded on our financial statements arising from our operations and those of our subsidiaries, as well as future cash flows, which have an average term of six months, that have not yet been recorded on the balance sheet arising from: (i) purchases of raw materials for production; (ii) imports of machinery and equipment; and (iii) investments in overseas subsidiaries in their respective currencies.To minimize the effects from foreign exchange variation on its production costs, the Company monitors the behavior of the Brazilian real in relation to the U.S. dollar and euro, and contracts derivatives operations, mostly forward contracts, in line with the currency

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hedge policy in force. The Company’s derivative operations in this market are contracted exclusively to hedge against variations in these currencies and are not used for any speculative purposes.In addition to the currency risks related to its operations, the Company hedges 100% of its borrowings and financing contracted in foreign currencies.

Risks and financial instruments are managed by adopting the policies, formulating strategies and implementing control systems, which are defined by the Treasury Committee and approved by the Board of Directors. The compliance of treasury positions in financial instruments, including derivatives, with these policies is presented and evaluated on a monthly basis by the Treasury Committee and later submitted for analysis to the Audit Committee, the Statutory Executive Board and the Board of Directors.

Risk management is conducted by the Company’s Central Treasury, which also approves all investment and borrowing operations conducted by the Company’s subsidiaries and monitors compliance with the leverage ratios established in the covenants of our financing contracts.

5.3. Regarding the controls adopted by the issuer to ensure the preparation of reliable financial statements, indicate:

a. The main internal control practices and the level of efficiency of these controls, indicating any imperfections and the measures adopted to correct them.

b. The organizational structures involved.

c. If and how the efficiency of internal controls is supervised by the issuer’s management, indicating the positions of the persons in charge for such monitoring.

Natura has an internal control framework that focuses specifically on the financial statements, which was created based on the framework of the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In 2015, pursuing continuous improvement in its internal control structures for its financial statements, Natura began to implement, in Argentina, a control framework for its International Operations. The Company is planning to expand this framework to its other operations in Latin America, excluding AESOP.

The Company’s Internal Control and Risk Management Department is responsible for always keeping the internal control framework up-to-date. The control descriptions are reviewed annually jointly with the persons in charge for implementing these controls. The department also executes, jointly with its expert partners, the tests for the effectiveness of these controls and monitors the implementation of action plans to mitigate any nonconformities identified. The works are substantiated by specific documentation that is provided to the Company’s Independent Auditor, which can, at its discretion, complement its analyses with additional tests. The findings from this testing conducted by the Company and its Independent Auditor are reported to the managers responsible for the controls and to the Audit, Risk Management and Financial Committee.

With regard to the organizational structures involved, in addition to the Internal Controls and Risk Management Department, as described in item 5.1, Natura has a defined governance structure. Note that the global Internal Audit structure conducts works in Natura’s various business processes, in accordance with the audit plan validated annually by the Audit, Risk Management and Financial Committee. Any weaknesses identified in the Internal Audit reports are validated by the persons responsible for each business process and presented to said Committee.

Our control and transparency mechanisms also evolved in 2015, with the creation of the Compliance Department, which is part of its Statutory Executive Board and reports directly to the Company’s chief executive officer, and of a new channel that receives reports of corruption and any cases involving the Board of Directors, their support bodies and the Statutory Executive Board. The Compliance Department is formed by two managers from the legal department that reports to the compliance officer.Other cases of non-compliance continue to be handled by Natura’s Ombudsman and Ethics Committee, which are also chaired by the compliance officer, whose function is to analyze the cases received via both channels. These advances were implemented to strengthen our anti-corruption controls and further promote ethical behavior throughout Natura.

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The Company’s compliance program for combating corruption and bribery is structured, applied and updated in accordance with the current characteristics and risks of Natura’s activities. The good practices determined by Brazilian law are observed in the exercise of ethical behavior and transparency in all issues that affect our business activities.

a. Deficiencies and recommendations on internal controls included in the detailed report that are prepared and submitted by the independent auditor, in accordance with the regulations of the Securities and Exchange Commission of Brazil (CVM) addressing the registration and exercise of independent audit activities.

The detailed report issued by the external audit, which aims to improve the Company’s accounting procedures and internal control systems, identified certain deficiencies in the internal controls and opportunities for improving its internal processes.

The main recommendation refers to the inclusion of significant accounts from the International Operations in its annual plan for internal control testing in order to attain satisfactory coverage of the main accounting practices presented in the consolidated financial statements. During 2015, the Company compiled and tested the processes and controls that are relevant to the operations in Argentina seeking to align that country’s control base with the one tested in Brazil. It also mapped the processes corresponding to the respective significant accounting lines for the following countries: Chile, Colombia, Mexico and Peru. However, the Company still must conduct control tests in these countries’ operations, which is expected in 2016. It also expects to start the process of planning the mapping of processes and controls at AESOP in 2016.

The independent auditors also recommended that the Company formalize certain internal controls or better substantiate their execution, for topics such as: procedures for closing accounting books, monitoring third-party inventories, transitory accounting lines for collections and write-offs of scrap inventories. They also recommended formalizing the reconciliation of accounts receivable and impairment testing in specific international operations. With regard to internal controls for Information Technology, opportunities for improvement were identified in the access management process involving a review of profiles and movements in employees and outsourced workers. Lastly, the independent auditors recommended improvements in the processing and generation of tax information.

b. Comments by the executive officers on the deficiencies identified in the detailed report prepared by the independent auditor and on the corrective measures adopted

The Company has already addressed all recommendations of the Independent Auditor through specific action plans that are expected to be implemented during 2016. With the exception of the implementation of internal controls in the international operations, the other deficiencies were not deemed significant given their lower level of complexity; therefore, they are expected to be addressed during 2016.

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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 risksIn the fiscal year ended December 31, 2015, there were no significant changes in the main market risks to which we are subject nor any change in the risk management policy adopted.The Company is aware that a higher contribution from the international operations to the consolidated results could increase the intensity of its known risks. The Company is evaluating adjustments to its current policies for monitoring and mitigating risks.

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5.5. Provide other information deemed material by the issuerWe believe in the efficiency of the internal controls and procedures that we adopt to ensure the quality, precision and reliability of our financial statements. That is why, in the opinion of our management, our financial statements adequately present the profit and loss of our operations and our financial and equity positions on the respective dates.The Company clarifies that it voluntarily implemented internal controls based on the criteria established in the document “Internal Control – Integrated Framework” published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), a private U.S.-based organization whose mission is to disseminate principles and guidance for companies on their internal control structures. The effectiveness of these internal controls was attested to in 2010, 2011 and 2012 by the Company’s Independent Auditors, in accordance with the standards established by the U.S. Sarbanes-Oxley Act (“SOx”). This specific attestation did not occur for 2013, 2014 and 2015, however, the internal controls have been subjected to testing for the purposes of the reporting of the financial statements. During these years, the internal controls of operations in Brazil maintained the same effectiveness standards of the previous years.Since 2013, the operations of the Company’s subsidiaries in other countries have increased their importance to the consolidated financial statements, which generated the need to implement the same internal controls for these subsidiaries. In this light, the Company developed a plan that would enable it to create the environment required for implementing the internal controls. Already in 2013, the Company mapped and redesigned the processes of all of its subsidiaries in Latin America. In 2014, the Company began implementing in these countries an Integrated Business Management System (Enterprise Resource Planning – ERP), which includes financial, accounting, inventory management and quality modules, all integrated for the purposes of consolidation and control. With the implementation of the system completed in 2015, the Company designed and tested, in that year, the controls relevant to the operation in Argentina. The Company also mapped the controls corresponding to the respective significant accounting items for the following countries: Chile, Colombia, Mexico and Peru. In 2016, the Company will conduct control tests on-site in these countries. In the same year, it also expects to start mapping the processes and controls at AESOP. The Company reinforces its commitment to maintaining strict internal controls, even if voluntarily adopted, and recognizes that an important benefit of a more-efficient controls environment is the transparency and security it provides for our stakeholders with regard to the execution of our operations.Therefore, the Company is working intensely to support an environment of robust controls in its International Operations.

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6. History of the issuer5.2 5.3

6.1 / 6.2 / 6.4 – Incorporation of the issuer, duration and date of registration with the CVM

Date of constitution of Issuer 08/28/1969

Form of constitution of Issuer Our company was incorporated as a limited liability company and transformed into a joint stock company on September 6, 1995.

Country where company was constituted

Brazil

Duration of company Indeterminate

Date of registration with CVM 05/21/2004

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6.3 Brief history of the companyThe Company was created on August 28, 1969, when Antonio Luiz da Cunha Seabra joined forces with Jean Pierre Berjeaut to found Indústria e Comércio de Cosméticos JeBerjeaut Ltda., whose name was changed to Indústria e Comércio de Cosméticos Natura Ltda. in January 1970. At the time, there was only one store in São Paulo and production was carried out in a small plant that had only seven employees. In 1974, the Company adopted direct selling as its main sales channel and ever since its growth has been based on expanding its sales consultant base, making it the leader in the Cosmetics, Fragrances and Toiletries (CFT) sector in Brazil until 2013.Its current corporate name is Natura Cosméticos S.A., with indefinite duration, and its headquarters is located at Avenida Alexandre Colares, n°. 1188, Vila Jaguara, in the city and state of São Paulo, Brazil.Its biggest market is Brazil, which in 2015 accounted for 71% of consolidated net revenue and where 1.4 million self-employed resellers operate, compared to 1.9 million in its combined operations. The Company’s international expansion started in 1982, when Natura Cosméticos S.A. entered Chile, and later it entered Argentina and Peru in 1992, Mexico and France in 2005 and finally Colombia in 2007. On December 20, 2013, in alignment with its strategy, Natura Cosméticos S.A. entered into an agreement for the acquisition, subject to conditions precedent, of 65% of Emeis Holdings Pty Ltd. an Australian manufacturer of premium cosmetics and beauty products under the “Aesop” brand, with operations in Australia, Asia, Europe, Latin America and North America. In October 2014, Emeis Holding Pty Ltd (“Emeis”) repurchased 46,009 common shares held by a noncontrolling shareholder, which corresponded to 1.83% of the capital stock of the Company. Those shares were canceled immediately after repurchase. The total number of shares of Emeis Holding Pty Ltd decreased from 2,517,815 million to 2,471,806 million, with the same of number of shares maintained for all shareholders. Therefore, Natura Cosméticos S.A., through its subsidiary Natura Austrália Pty Ltd (“Natura Austrália”), changed its interest in Emeis Holding Pty Ltd. from 65% to 66.21%. In December 2014, the Company, through its holding company Natura Austrália, acquired 126,731 common shares based on the options established in the purchase and sale agreement from a noncontrolling shareholder of Emeis, which corresponded to 5.13% of the capital stock of the Company. Accordingly, the indirect interest held by Natura Cosméticos S.A. in Emeis, through its subsidiary Natura Austrália Pty Ltd., changed from 66.21% to 71.34%.In December 2015, the Company, through its holding company Natura Austrália, acquired 183,111 common shares based on the options established in the purchase and sale agreement from noncontrolling shareholders of Emeis, which corresponded to 7.40% of the capital stock of Emeis. Accordingly, the indirect interest held by Natura Cosméticos S.A. in Emeis, through its subsidiary Natura Austrália, changed from 71.34% to 78.74%. The amount paid to purchase the shares was AU$ 23.524 million, with an increase in investment of AU$ 4.243 million and a reduction in shareholders' equity of AU$19.281 million recognized as an offsetting entry against cash. As a result, the Company recognized in its shareholders' equity, under “Effects of changes in interest held in subsidiaries,” a reduction in the amount of AU$ 19.281 million or R$ 53,873. The realization of 7.40% of the provision for acquisition from noncontrolling shareholders recorded as liabilities of the Company in the amount of R$66,141 was offset by an increase in shareholders’ equity under “Realization of reserve for acquisition of interest from noncontrolling shareholders through purchase of shares in a foreign subsidiary."On May 21, 2004, Natura Cosméticos S.A. obtained its registration as a public corporation at the Securities and Exchange Commission of Brazil (CVM). The initial public offering was held on May 26, 2004, with its shares beginning trading on the Novo Mercado listing segment of the BM&FBOVESPA. The selling shareholders in the above-mentioned offering were Antonio Luiz da Cunha Seabra, Guilherme Peirão Leal, Pedro Luiz Barreiros Passos, Anizio Pinotti and Ronuel Macedo de Mattos. In July 2009, Natura Cosméticos S.A. held a secondary share offering and the interest held by the same controlling shareholders changed to approximately 60%.

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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 Item 6.5 is not applicable to the Company.

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6.6 Provide any other information deemed material by the issuerThere is no other information material to this section.

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7. Activity of Issuer7.1 Summary of the activities undertaken by the Company and its subsidiariesNatura Cosméticos S.A., a company that, through its subsidiaries in Brazil and abroad, integrates the development, manufacture, distribution and sale of its products, operates primarily in the cosmetics, fragrances and toiletries industry. Its flagship brand is Natura, which in 2015 accounted for 94.5% of its consolidated net revenue, while Aesop, a brand acquired in late 2012, accounted for 5.5%.The Company’s corporate purpose is broader than its current offering and encompasses (i) the trading, export and import of beauty, personal care, toiletry and cosmetics products, garments, foods, nutritional supplements, medicines, including herbal and homeopathic medicines, drugs, pharmaceutical inputs and household cleaning materials, for both human and animal use, and for which the company can take all measures and carry out all operations related to this purpose; (ii) commercial exploration and export and import of personal use electrical appliances, jewelry, imitation jewelry, household items, articles for infants and children, bed, bath and linen, software, mobile SIM cards, books, editorial material, entertainment products, phonographic products, and for which the company can take all measures and carry out all operations related to this purpose; (iii) rendering of services of any kind, such as services related to aesthetic treatments, marketing consulting, registration, planning and analysis of risks; and (iv) organization, participation and management, in any manner, in companies and businesses of any type, as partner or shareholder.Natura is present in seven countries, namely Brazil, Argentina, Chile, Peru, Colombia, Mexico and France, and has a distribution center in Bolivia. Brazil is its core operation, which in 2015 accounted for 71% of the company’s net revenue and 35.0% of brand preference. Moreover, according to data published by Euromonitor International, an agency that provides market analyses and reports, Natura is one of the leading brands in the industry, with an 11.1% market share in Brazil in 2015. Also according to Euromonitor, Brazil is the world’s fourth largest market in this industry (US$30.24 billion in 2015) and has excellent growth potential.The Company’s value proposition is one of its key competitive differentials, sustained by three pillars: (1) Products and Concepts, (2) Network, and (3) Entrepreneurial Behavior. The Company’s essence, which is at the heart of its value proposition, is reflected in all forms of interaction of society with diverse stakeholders, including consumers, sales representatives (called Natura Consultants), employees, extractivist communities or suppliers. The essence of Natura is based on its raison d'être, which is to create and sell products and services that promote Well Being Well. Well-being is the harmonious, pleasant relationship of individuals with themselves and their body; and being well is the empathetic, successful and gratifying relationship of a person with others, with nature and with the whole. Note that the value proposition is always backed by a management and a triple-bottom-line thinking that addresses the economic, social and environmental aspects. Below is a description of the three pillars of the value proposition mentioned earlier.

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(1) Products and Concepts:

Innovation is an important driver of the Company’s growth, supporting the pace of its business and attracting consumers. As such, in 2015, the Company invested 2.9% of net revenue in R&D, launched more than 220 products and posted an innovation index of 58.9%, as shown below.

Fiscal Year ended December 31

2015 2014 2013Number of products launched * 220 193 179Investment in innovation (R$ million) 221 216 181Percentage of net revenue invested in innovation 2.96% 2.92% 2.90%Innovation Index 58.90% 67.90% 63.40%

* Information excludes development actions conducted by the International Operations, considering only products launched in Brazil. All products are developed through the consideration of their functional, emotional and philosophical aspects, in an effort to awaken the senses and expand the individual’s consciousness of themselves, others and the world. In addition to high levels of quality and safety, products have not been tested on animals since 2006, and use ingredients originating from Brazilian biodiversity that are extracted sustainably based on science and local traditions with low levels of environmental impact. In 2007, the Company began to substitute a portion of the common alcohol used in products with organic alcohol, since it considers organic certification the best method to acquire alcohol produced in accordance with best environmental practices. In 2015, 83% of all raw materials used in the Company’s products came from renewable plants, in comparison with 82% in 2012 and 81% in 2011. It is also important to note that the Company’s complete elimination of animal testing while maintaining high levels of safety in the use of its products has been extended to its network of development partners. For this reason, the Company does not accept animal testing during the research and development of exclusive Natura products and does not acquire exclusive active ingredients that were tested on animals. The Natura brand’s product portfolio is made up of more than 1,300 products, distributed among different sub-brands and categories, namely Cosmetics, Fragrances and Personal Hygiene. A summary follows of the categories and sub-brands that make up the Company’s portfolio:_Fragrances: offered through 18 sub-brands of fragrances and feminine perfumes (such as Ekos, Humor, Kriska, Essencial, Biografia and Luna) and 11 sub-brands of fragrances and masculine perfumes (such as Natura Homem, Essencial and Kaiak), in addition to the children’s lines Mamãe Bebê and Naturé._Make-up: three sub-brands of make-up, each with a different position and concept, namely: Natura Una, Natura Faces and Natura Aquarela._Body and Facial Care: the Company has two dedicated facial care lines, known as Chronos and Tez, in addition to offering a variety of body lotions under the Natura Ekos, Natura Tododia, Erva Doce and Natura SOU brands._Sunscreen: mainly represented by the sub-brand Fotoequilíbrio, which also offers products specifically for children. _ Soaps: offering both liquid and bar soap, in addition to other types such as exfoliating products. The Company was a pioneer in Brazil with the introduction of liquid hand soaps in 1984 with the Erva Doce brand. This segment of the Brazilian market is currently led by bar soaps, a sub-category in which Natura Cosméticos S.A. offers nine different sub-brands of soap, particularly Natura Tododia and Natura Ekos._Deodorants: offering 14 different sub-brands, including perfumed deodorants that act as extensions of the feminine and masculine fragrance lines and the Erva Doce brand.

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_Body Oils: offered through two different sub-brands, Séve and Ekos. The Séve brand was a pioneer in the Brazilian oil market and has been part of the Company’s portfolio for more than 30 years. _Hair Care: this category, which includes shampoos, conditioners and capillary treatments such as hydrating masks, is represented by three sub-brands (Natura Ekos, Natura Plant and Natura SOU).

(2) Network:The Company adopted the direct selling business model mainly due to its belief in the power of sales through relationships and that greater interaction between the buyer and seller is important in providing personalized service. Therefore, the Company’s products under the Natura brand are sold directly to consumers through 1.9 million Natura Consultants, most of whom are women. It is important to note that Natura Consultants are non-exclusive, freelance representatives and therefore hold no employment relationship with the Company. Natura Consultants are the first consumers of the brand’s products, improving their knowledge of benefits and making sales through relationships and more effectively disseminating the Well Being Well concept. Natura Consultants, however, are first and foremost individuals, and as such are provided with incentives for professional, personal and material development. The Company has also implemented the Natura network, which is an evolution of the traditional direct selling business format and seeks to use digital means to connect consumers, Consultants and Natura, in addition to allowing the inclusion of new offerings of categories, brands and services. In December 2014, this format was expanded throughout Brazil. In April 2016, the Company launched an e-commerce operation without any involvement of the Natural Digital Consultants.Also in April 2016, the Company inaugurated a store in the mall Shopping Morumbi in São Paulo City. The initiative is consistent with the Company's current projects to improve the shopping experience of its consumers.

(3) Corporate Behavior:The Company seeks to create value for society sustainably by forging relationships based on quality and generating integrated social, environmental and economic results. As such, return on shareholder investment is obtained by balancing of short- and long-term focus. Some examples of the Company’s social actions include: supporting organizations and associations representing its industry that contribute in some way to sustainable development; adopting fair trade principles in its partnerships with extraction communities and supporting sustainable local development; and sharing benefits with communities through access to genetic heritage and associated traditional knowledge. Furthermore, Natura stock is traded on the Novo Mercado listing segment of the BM&FBovespa (special category for listing companies with the highest levels of corporate governance) and, in 2015, was included for the eleventh straight year in the exchange’s Corporate Sustainability Index (ISE). Since 2014, we are a component of the Dow Jones Sustainability Index (DJSI), a benchmark for investors who base their investment decisions on social and environmental aspects.In its constant pursuit of best industry practices and in line with its industry leadership, Natura voluntarily adopted internal controls based on the criteria established in the document “Internal Control – Integrated Framework” published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), a private U.S. organization that disseminate principles and guidance on internal control structures for companies. Since its creation, the Company's internal control framework is regularly updated and the effectiveness of its controls is assessed annually by the External Auditors. Since 2007, Natura has been a member of the Company Circle of Latin American Corporate Governance, a group formed by companies in Latin America selected by the World Bank’s International Finance Corporation for their governance practices. The Company’s Board of Directors is formed by nine members (five of whom are independent) and advised by four committees:

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_ Audit, Risk Management and Financial Committee;_ People and Organizational Development Committee;_ Strategic Committee; and_ Corporate Governance Committee.

SubsidiariesIn addition to activities conducted directly by Natura Cosméticos S.A., the Company’s organizational structure also includes subsidiaries that conduct the following activities:

Indústria e Comércio de Cosméticos Natura Ltda.: activities focused primarily on the production and sale of Natura products Natura to Natura Cosméticos S.A., Natura Cosméticos S.A. - Chile, Natura Cosméticos S.A. - Peru, Natura Cosméticos S.A. - Argentina, Natura Cosméticos Ltda. - Colombia, Natura Europa SAS - France and Natura Cosméticos de México, S.A. de C.V.

Natura Biosphera Franqueadora Ltda. (formerly Natura Biosphera Cosméticos e Serviços Ltda.): grants and manages corporate franchises, as well as other activities inherent to franchise operations.

Natura Cosméticos S.A. - Chile, Natura Cosméticos S.A. - Peru, Natura Cosméticos S.A. - Argentina, Natura Cosméticos Ltda. - Colombia and Natura Distribuidora de México, S.A. de C.V.: activities similar to those conducted by the parent company, Natura Cosméticos S.A., in Brazil.

Natura Cosméticos C.A. - Venezuela: company currently being closed and with no investments or material balances recorded on its books.

Natura Inovação e Tecnologia de Produtos Ltda.: activities focused on developing products, technologies and market research. Is the parent company of Natura Innovation et Technologie de Produits SAS - France, the satellite center for research and development inaugurated in Paris, in 2007.

Natura Cosméticos y Servicios de México, S.A. de C.V.: activities focused on providing administrative and logistics services to Natura Cosméticos de México, S.A. de C.V. and Natura Distribuidora de México, S.A. de C.V.

Natura Cosméticos de México, S.A. de C.V.: activities focused on importing and selling cosmetics, general fragrances and personal hygiene products for Natura Distribuidora de México, S.A. de C.V.

Natura Cosméticos España S.L.: is in the pre-operational phase and its operations will be similar to those of the parent company, Natura Cosméticos S.A., in Brazil.

Natura (Brasil) International B.V. - Netherlands: the holding company that is the parent company of Natura Europa SAS – France, Natura Brasil Inc. and Natura International Inc.

Natura Logística e Serviços Ltda.: engaged in the provision of services involving the picking, packaging and forwarding of goods, logistics advisory services, human resources management and human resources training.

Natura Innovation et Technologie de Produits SAS - France: engaged in research activities for in vitro testing as an alternative to animal testing to study the safety and efficacy of active ingredients, skincare treatments and new packaging materials.

Natura Brasil Inc.: holding company of Natura International Inc. Natura International Inc. - USA: firm that studies trends in design, fashion and

technology, transforming them into ideas, concepts and prototypes. Natura Europa SAS - France: activities concentrated in the purchase, sale, import,

export and distribution of cosmetics, fragrances in general and toiletries. Natura Brazil Pty Ltd – Australia: holding and parent company of Natura Cosmetics

Austrália Pty Ltd. Natura Cosmetics Austrália Pty Ltd – Australia: holding and parent company of Emeis

Holdings Pty Ltd. Emeis Holdings Pty Ltd - Australia: activities focused on the development and

marketing of premium cosmetics under the brand “Aesop,” with products sold in retail chains and own stores.

Essential Investment Fund: exclusive fixed-income investment fund for private credit. Natura Comercial Ltda. – focused mostly on retail sales of Natura brand products.

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7.2 Information on operating segments

7.2 For each operating segment reported in the most recent financial statements for the fiscal year or, if any, in the consolidated financial statements, provide the following information:a. products and services soldManagement defined the operational segments of the Company and its subsidiaries in accordance with internal reports utilized in strategic decision-making and approved by the Board of Executive Officers. While main decision-makers analyze information on revenue at several different levels, the Corporation’s business is mainly segmented based on cosmetic sales by geographic region.Until March 31, 2015, the business information was segmented as follows: Brazil (“Brazil Operation”), Latin America (“LATAM”) and other countries (“Other”), the latter including the operations in France, Latam Corporate and Emeis Holding Pty Ltd (“Aesop”). In addition, LATAM was analyzed in two groups: (a) Argentina, Chile and Peru (“Operations in Consolidation”); and (b) Mexico and Colombia (“Operations in Implementation”). As from the reporting of the interim information on June 30, 2015, due primarily to the maturation of the operations in Mexico and Colombia, the Management started to adopt the following business segmentation: Brazil (“Brazil Operation”), Latin America (“LATAM Operation,” including LATAM Corporate), Emeis Holdings Pty Ltd. (“Aesop”) (including the results of holding companies Natura Brazil Pty Ltd. and Natura Cosmetics Australia Pty Ltd.) and Other (“includes the results from France, Natura (Brasil) International B.V. – Netherlands, Natura Brasil Inc. – USA”).The Company opted to change its form of disclosure by geographic region to provide greater visibility of the international operations through a format that represents the maturity of each of the segments and how Management monitors and manages each business as of the second quarter of 2015. Details by segment follow:

(1) Brazil: as the most relevant location of the Company. (2) LATAM: this group of countries, reported pro-forma, includes the operations in

Argentina, Chile, Peru, Colombia and Mexico, and the expenses with the corporate structure based in Buenos Aires (Argentina) and dedicated to LATAM.

(3) Aesop: reported on a pro-forma basis, acquired in December 2012 and consolidated in the results as of March 2013.

(4) Other: operation in France, International B.V. – Netherlands, Natura Brasil Inc. – USA, reported on a pro-forma basis

(5) Consolidated: the sum of the segments Brazil, LATAM, Aesop and Other.

b. revenue from the segment and share of net revenueNet revenue from the region was broken down as follows in the fiscal year ended December 31, 2015, by segment:

(1) Brazil Operations: 71.1%(2) LATAM Operations: 23.3%(3) Aesop Operations: 5.5%(4) Other Operations: 0.2%

The following tables provide financial information on the pro-forma segments described previously for the fiscal years ended December 31, 2015, 2014 and 2013. The amounts provided to the Executive Committee regarding results and total assets are in line with balances recorded in financial statements, as well as applicable accounting policies:

Fiscal year ended12/31/15

Net Revenue

Net Income

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(Loss)Brazil 5,610,222 407,937

LATAM 1,842,359 105,645Aesop 431,533 27,624Other 14,888 (27,693)Consolidated(attributable to the controlling shareholders of the Company)

7,899,002 513,513


Net Revenue

Net Income (Loss)

Brazil 5,994,645 701,667LATAM 1,158,111 27,262Aesop 242,403 20,512Others 13,263 (16,623)Consolidated(attributable to the controlling shareholders of the Company)

7,408,422 732,818


Net Revenue

Net Income (Loss)

Brazil 5,880,224 852,102LATAM 978,947 3,384Aesop 137,907 2,312Others 13,233 (15,640)Consolidated(attributable to the controlling shareholders of the Company)

7,010,311 842,608

c. profit or loss, whichever the case, from the segment and its share in net revenueFor a discussion of income or loss from the segment and its share in our net revenue, see item (b) revenue from the segment and its share in our net revenue.

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7.3 Information on products and services related to operating segments

7.3 For the products and services corresponding to the operating segments disclosed in item 7.2., please provide:a. characteristics of the production processConsidering cosmetics only, the Company produces internally 61% of its volume, while 39% is manufactured by partner manufacturers. For its own production, the Company has three plants at its integrated research, production and logistics center in Cajamar (inaugurated in 2011) and a plant in Benevides (state of Paraná) known as Ecoparque, the latter currently being the main producer of soaps. In 2015, the Company produced 354 million units internally, in Cajamar, in comparison with 361 million in 2014 and approximately 382 million in 2013. The soap plant produced 36 million units, compared to 18 million units in 2014, its first year of operation.In Cajamar, the facilities were laid out to allow for efficient expansion as operations grow, thereby ensuring greater economies of scale at the physical plant. In 2014, Natura concluded the expansion of the Viscous product plant in Cajamar, and the construction of an industrial center in Benevides called Ecoparque. Ecoparque was based on sustainable chain concepts promoting a form of symbiosis between the different companies operating therein, thereby becoming an industrial center based on strong concepts of sustainability, while also contributing to the development of local communities. The Company, during the last fiscal year, obtained a production volume equal to approximately 50% of its production capacity, compared to the same percentage in 2014 and to 65% in 2013. Given the characteristics of its commercial model, Natura opted for a manufacturing model that favored flexibility, thereby allowing it to meet spikes in demand influenced by product promotions that lead to significant changes in normal demand behavior or strategies to offer specially prepared packaging for holidays such as Mothers’ Day or Christmas. Outsourced products include bar and liquid soaps, hair care products, aerosol products and certain types of make-up, in addition to samples and gifts. It is important to note that the decision to produce a product internally or to outsource production is based on the Company’s analysis of the cost of each option, in addition to requirements such as formula confidentiality and the specific nature of the production process. Of the products manufactured in Brazil, either by the Company or partners, nearly 32% was exported in 2015, in comparison with 27% in 2014. In 2010, the Company began a process to expand local production in Latin American countries (excluding Brazil) through partnerships with third parties. During the same year, it began a perfume bottling operation in Argentina and in 2012 began production of products for the body and make-up in the same country. The Company currently conducts local production with partners in Colombia (soaps, fragrances, body care and conditioners) and Mexico (perfumes, shampoos and conditioners). In 2015, the Company reached a local production average of 33.5% of net revenue in the region (vs. 23.7% in 2014), with Argentina accounting for 54.4% of production, followed by Colombia (39.3%) and Mexico (6.3%). During the year, the production process is interspersed with continuous preventive and corrective maintenance procedures to meet the Company’s production and sales demand. In its productive processes, the Company mainly utilizes German, French, Italian and Brazilian technology, represented by several different suppliers. All equipment, as well as all facilities and operations, are insured against incidents.In 2006, the Company received the NBR ISO 9001 certification, resulting from its continuous commitment to the quality of processes, products and services, which the Company seeks to improve daily. Since then, the Company has maintained its certification through annual audits or recertification.

b. characteristics of the distribution process

Commercial Model

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As mentioned above, the Company’s choice of the direct sale model for distribution of its products is due to a belief in the power of sale through relationships, which offers greater interaction between the buyer and the seller, thereby allowing for more individualized service. This commercial model has been adopted in Brazil, Argentina, Chile, Peru, Colombia, Mexico and France. Thus, Natura brand products are distributed through a network of Natura Consultants (sales representatives) made up of nearly 1.9 million people, as shown in the table below. The majority of consultants are women, with direct selling serving as a supplement to the household income. Natura does not maintain an employment relationship with Consultants, as they are freelance resellers with non-exclusive contracts, allowing them to sell other brands. Historically, the network of Natura consultants has shown low levels of turnover (approximately 33.9%), resulting from Natura Consultant’s identification with the Company’s values, leading to strong, lasting ties to the Company, making them loyal to the brand. An annual survey conducted by the Company indicates 92% satisfaction among CNs in 2015.

Consultants (‘000) 2015 2014 2013

Brazil 1,376.9 1,318.5 1,289.9Argentina 139.6 115.7 94.6Chile 72.7 66.6 59.6Mexico 130.4 98.0 97.8Peru 90.5 83.2 70.6Colombia 71.9 59.0 42.3France 1.1 1.5 1.7

* Refers to the number of Natura Consultants at the end of the year that sent orders during the last six of the Company’s sale cycles.

To resell products, consultants use a catalogue of Natura products (“Natura Magazine”), either print or digital, which allows them to present products to their clients; Natura Magazine contains all products in the Company’s portfolio, as well as the indicated price for sale to the consumer, while Natura Consultants are completely free to establish prices and sales conditions for the final consumer. Natura Magazine is an important marketing tool for the Brand and transmits the Company’s beliefs and values, as well as the concepts of each sub-brand. A new Natura Magazine is released approximately every 21 days with new promotions and launches, thereby forming different sales cycles throughout the year. Each cycle, the Company sends at least one print version of Natura Magazine to its Consultants. The average number of catalogues distributed per sales cycle in 2015 was 3 million, in addition to a digital version of the catalogue provided by the Company.Natura offers a direct selling model with high levels of service – Consultants may place as may orders as they wish during sales cycles, as long as the order meets a minimum volume of 80 points. Each product is assigned a point value by Natura Magazine in accordance with its suggested price – the higher the price, the higher the assigned point value. In monetary terms, a minimum order stands at approximately R$388.00 in suggested sales price. Natura Consultants can place orders in one of two ways, via the Company’s website (www.natura.com.br) or by phone, calling the Natura Service Center (CAN). Most orders are made by internet, for a total of 99% in 2015, versus 98% in 2014 and 98% in 2013.To summarize the sales process, after placing an order with Natura, Consultants receive the products in approximately 4 days (average) and are given 21 days to pay for the products received. The Company may cancel contracts with Natura Consultants that fail to pay for products, those that use the “Natura” brand inappropriately or that do not place orders in more than 6 sales cycles. To encourage Consultants to provide quality service in its resale and product consulting activities, the Company invests in recognition and training on the brand, products and categories.

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The Company rigorously seeks to comply with its commitment to becoming a signatory of ABEVD’s Code of Conduct in Direct Selling between Direct Sellers and Companies, having registered in 2015 zero legal suits regarding child, slave or dangerous labor, in addition to not recording a single instance of legal or administrative suits related to violation of privacy or loss of Consultant data. The model in question was adapted to the regional characteristics of each country – for this reason, Natura operates three different Direct Selling models in Latin America, in addition to another retail model for the Aesop brand:

(1) For operations in Argentina, Natura adopted the single-level model for direct selling, meaning that the consultant network, including attraction, training and relations, is managed by Relationship Managers (GR). GRs are Natura employees who manage the Consultant network. To ensure quality relations with GRs, and as a result, with the Consultant network, Natura values the recognition of their efforts and encourages its GRs to develop close relations with consultants through initiatives such as: (i) an annual campaign for the sales force, which recognizes Relationship Managers that achieved pre-established objectives; (ii) the use of a new vehicle approximately every three years; and (iii) payment of awards.

(2) For operations in Brazil (2008), Colombia (2011), Chile (2011) and Peru (2011) direct selling is conducted based on a bi-level model known as “Advising Natura Consultant” (CNO), who has no employment relationship with the Company, with non-exclusive contracts. Under this model, Relationship Managers also exist, however recruitment and training of CNs is performed by CNOs.

In addition to being a Consultant that sells Natura products, the CNO is the closest point-of-contact to Consultants. Besides initial training, Natura offers training sessions on planning and transformative attitudes, in which CNOs are challenged to become a force for social change within their group of CNs. This model initially promotes accelerated growth of the CN network, taking advantage of demand in micro-regions, which will eventually ensure gradual growth of CN productivity.

As of December 31, 2014, in Brazil, the sales structure was comprised of: two regional leaders, 43 sales managers, 775 Relationship Managers, 9,606 CNOs and 1,376.9 thousand CNs available.

(3) For operations in Mexico since 2011, direct selling is conducted under a multi-level model known as the “Sustainable Relations Network” (RRS). This model was implemented due to local characteristics, thereby ensuring that the business model was as attractive as possible given local realities. The RRS model provides eight levels of career progression for consultants, namely: Natura Consultant, Entrepreneurial Natura Consultant, Natura Developer 1 and 2, Natura Transformer 1 and 2, Natura Inspirer and Natura Associate. To rise up through the various stages, consultants must meet certain criteria, such as: (i) sales volume, (ii) attraction of new consultants, (iii) personnel development and (iv) social and environmental relations with the community. The last two points mentioned are the RRS model’s main differentials in comparison with other existing multi-level models. To ensure that Consultants are able to meet these criteria, Natura offers a series of training sessions focused on integrated development, driving sustainable entrepreneurship and connecting consultants with partner institutions.

(4) Aesop brand products, acquired in 2012, are sold in Australia, Asia, Europe and the United States, mainly through brand stores and department stores. Aesop ended the 2015 with 135 stores in 18 countries.

Logistics Network

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After the products are manufactured by the Industrial unit, large volumes are transferred to the warehouses (Hubs) and later sold to the company Comercial – Distribuidora Atacadista to be transported and stored at the distribution centers (CD) in Brazil or exported to distribution centers and warehouses in other countries of Latin America and also to France. The Company’s logistics network is currently as follows:

(1) Brazil:_ 8 distribution centers: São Paulo (SP), Matias Barbosa (MG), Uberlândia (MG), Jaboatão dos Guararapes (PE), Canoas (RS), Simões Filho (BA), Castanhal (PA) and São José dos Pinhais (PR);_ 1 warehouse (hub) in Itupeva (SP).

(2) International operations are based out of five distribution centers (Argentina, Chile, Peru, Colombia and Mexico).

A hub’s purpose is to act as a point for receiving and consolidating raw material and finished product inventory, thereby allowing for management of supply from different CDs in accordance with the demand in each region. All management is supported by advanced demand planning systems implemented in 2012. Distribution Centers are responsible for separating the orders from each Consultant. Separated orders are automatically verified and then packaged and labeled for delivery to Consultants. CDs are equipped with cutting-edge picking technology, are highly automated and consume very little energy, thereby contributing to productivity gains and reducing the cost of each order. CD infrastructure is capable of handling order volume from Consultants in accordance with the minimum order size (80 points, equal to approximately R$388.00 in suggested resale price), even if the order is comprised of a smaller number of items. The equipment used in distribution centers to sort boxes by Consultant are owned by Natura, although the buildings where the equipment is installed are owned by third parties.In 2009, the Company began a process for decentralization of logistics in Brazil, moving from a single distribution point for all of Brazil in the state of São Paulo, to 8 distribution centers throughout all of Brazil, in addition to hubs, as described above. Decentralization sought to reduce delivery times for Natura Consultants, improving services and driving Natura Consultants to place orders more frequently. Furthermore, this initiative also sought to reduce the cost of each order, while also reducing greenhouse gas emissions. Once Consultants’ products are picked, they are sent to Consultants in nearly every city in Brazil, using third-party transportation companies. In Brazil, Natura works with ten different transportation companies selected through a bidding process in accordance with rules of cost per order, service level for each region and concentration of volume, thereby preventing dependence on any given third-party company. Partners for transportation of orders include Fedex, TNT Mercúrio, Dias, Rodofly, Via Log, TAM, Patrus, among others.All deliveries are tracked by Natura, guaranteeing service level and compliance with contracts. In Brazil, delivery time for consultants, counted from the moment the order is placed, stands at approximately 4.2 days, while in large capitals, most deliveries are made within two days.

c. characteristics of markets of operation, particularly:

i. market share in each market

Overview of Global MarketNatura Cosméticos S.A. operates under the Natura brand on the Cosmetics, Fragrances and Toiletries (CFT) market. In 2015, according to the institution Euromonitor International, this sector totaled US$ 425.91 billion (world), with average annual growth of 4.7% between 2013 and 2015. Analyzing the global result broken down by category, Skin Care is the largest category, with a 25.9% share in the CFT market mix in 2015. It is important to note that the Children category

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has posted the greatest growth on the market in recent years. Below is a selection of global market data by category.

Global Market by 2015 2014 2013 CAGRSegment (US$ billion) (2013-2015, %)Total* 425.91 406.74 388.17 4.7%Skincare 110.45 105.60 100.66 4.7%Hair care 68.97 67.05 64.12 3.7%Make-up 56.59 53.16 50.57 5.8%Men care 45.78 43.12 41.14 5.5%Fragrancies 47.17 44.57 42.42 5.4%Oral hygiene 40.34 38.55 36.89 4.6%Soaps and Bath 37.14 35.54 34.05 4.4%Deodorant 19.96 19.07 17.81 5.9%Kits 17.94 17.20 16.57 4.0%Children products 14.79 13.85 13.03 6.5%Sunscreen 9.20 8.92 8.77 2.4%Hair removal 4.35 4.16 4.05 3.7%

Source: Euromonitor International, 2014 constant U.S. dollars. * The sum of all segments is not equal to the total due to double counting. Male skincare products, for example, are included under both the masculine products and body and facial care segments. The breakdown of this market by channels is tied to the characteristics of each region and the manner in which each market has been organized over the years. In Latin American, for example, there is greater adherence to the direct selling model, in comparison with greater adherence to the specialized retail, department stores and internet sales in developed countries. On the global market, the online/internet model has posted the greatest rates of growth over the last three years, increasing market share from 3.7% in 2011 to 5.0% in 2015. The following table shows the share of each distribution model by macro-region for the total Cosmetics, Fragrances and Toiletries market.

Distribution by Region (% total regional market)

Latin America

North America

Asia Pacific Oceana Western

EuropeEastern Europe

Middle East and

Africa

Global Averag

e

Hyper/Supermarkets 32.5 22.8 21.0 40.2 28.5 23.3 25.5 27.7Direct Selling 25.7 5.5 10.4 6.9 3.4 15.0 4.1 10.1Pharmacy / Drugstores 12.1 16.8 11.4 8.2 14.5 14.1 7.9 12.1Specialized Retail 15.4 9.8 16.2 16.7 29.7 24.4 32.5 20.7Sundry Retail 1.0 16.8 1.1 5.9 1.5 0.1 0.9 3.9Department Stores 2.1 12.2 14.7 13.3 6.3 1.5 6.7 8.1Internet 1.4 7.2 9.9 5.0 5.7 5.0 0.7 5.0Other 9.8 8.9 15.3 3.8 10.4 16.6 21.7 12.4Total 100 100 100 100 100 100 100 100

Source: Euromonitor International, data for 2015.

According to Euromonitor International, Brazil is the world’s fourth largest market for Cosmetics, Fragrances and Toiletries (CFT). Total CFT Market

by country 2015 2014 2013CAGR

(US$ billion) (2013-2015,%)

World 426.06 406.74 3 4.7

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88.17

Top 10 275.33 266.70

255.79

3.7%

United States80.04 77.22

75.66

2.9%

China50.68 47.54

44.25

7.0%

Japan32.15 31.99

31.65

0.8%

Brazil30.25 30.48

27.51

4.9%

United Kingdom17.85 17.50

17.03

2.4%

Germany16.54 16.27

15.90

2.0%

France14.40 14.35

14.26

0.5%

India11.66 10.26

8.93

14.2%

South Korea11.64 11.01

10.44

5.6%

Italy10.12 10.08

10.17

-0.2%

Source: Euromonitor International, in 2015 constant U.S. dollars.

Overview of Latin American MarketIn Latin America, the Cosmetics, Fragrances and Toiletries market grew by an annual average of 7.8% between 2013 and 2015, according to data from Euromonitor International. Below is market data for the region in addition to annual growth for the period between 2013 and 2015.

CFT Market in Latin America 2015 2014 2013Market Volume (US$ billion) 60.19 56.91 51.76Growth compared to the previous year (%) 5.8 9.9 10.88


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Brazil and Mexico are the largest markets and together represented 65.4% of the region in 2015. Furthermore, the share of direct selling is quite relevant in countries where the Natura brand is present, a result of adherence to the commercial model adopted in the region. The table below shows the size of the market in countries where Natura products are sold, as well as the share of direct selling in the total market of each country in 2015.

Size of CFT Market Direct Selling(US$ billion) 2015 2014 2013 (2015, %)Latin America 60.19 56.91 51.76 25.7

Brazil 30.25 30.48 27.51 25.2Mexico 9.14 8.66 8.31 24.2Argent

ina 6.25 4.62 3.48 25.0

Colombia

2.87 2.73 2.64 34.5Chile 2.63 2.45 2.28 15.4Peru 2.12 2.08 1.96 35.2


The Natura brand has seen a significant increase in market share by International Operations. The following table shows the evolution of market share over the last three years in the aforementioned regional segments.

Natura’s share of CFT market (%) 2015 2014 2013

Brazil 11.1% 11.4% 12.4%LATAM

Argentina 6.4% 5.5% 4.8%Chile 5.7% 5.6% 5.4%Colombia 3.7% 2.9% 2.1%Mexico 1.8% 1.6% 1.3%Peru 6% 5.5% 4.8%

TOTAL 8.0% 8.2% 8.6%Source: Euromonitor International – 2015In LATAM, Natura’s Preference remained stable in all countries, and it maintained its leadership in preference in Argentina, Chile and Peru. Colombia and Mexico continued to expand their base. In Brazil, Natura lost 7 p.p. in preference, as shown in the following table based on surveys requested by Natura and conducted by Ipsos Brand Essence:

Preference for Natura Brand (%) 2015 2014 2013

Brazil 35% 42% 44%Argentina 24% 24% 23%Chile 35% 35% 26%Colombia 5% 7% 7%Mexico 11% 11% 6%Peru 26% 25% 19%

Source: Brand Essence / Instituto Ipsos

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Overview of Brazilian MarketBrazilian diversity, in geographic and demographic terms, poses challenges and opportunities for producers of cosmetics, fragrances and toiletry products. Brazil’s landmass, with its nearly 8.5 million square kilometers and population of over 200 million, is home to many different climates and lifestyles. Over more than four decades of experience in the sector, Natura Cosméticos S.A. has seen an increase in the level of sophistication of customer expectations, supplier quality, technology and marketing. Thus, knowledge of the particularities of the Brazilian market is essential to a company’s success. The Company monitors its performance in the Brazilian market through the following metrics: ABIHPEC, Euromonitor International and Kantar Worldpanel. Divided by methodology, we have:

SIPATESP/ABIHPEC measures the net revenue of manufacturers in the industry (sell-in), with data provided by member companies;

Euromonitor International measures the market using its own methodology, combining several different sources to estimate total market based on prices to end consumers; and

Kantar Worldpanel audits consumption through a sample of households and the percentage of penetration, which measures Natura’s presence in Brazilian households. It is one of the main metrics.

The ABIHPEC market is only monitored for categories in which the Company offers products, while Euromonitor International data is consolidated for the total market, which includes markets in which the Company is not present, such as diapers, hair dye and nail polish. The Company opted to monitor its performance using two metrics for the following reasons: (1) frequency with which data is obtained (Euromonitor International only provides an annual overview, while ABIHPEC is bi-yearly) and (2) the scope of information provided (Euromonitor International discloses data by company and channel, while ABIHPEC released consolidated data, not broken down by company). The table below provides a history of the last three years of the size of both markets and growth according to both sources. For other operations in Latin America and France, only Euromonitor International is utilized.

Brazilian CFT MarketABIHPEC * 2015 2014 2013Market Size (R$ billion) - - 27.5Growth over previous year (%) - - 10.6%Natura Market Share (%) - - 20.7%

Euromonitor International **Market Size (R$ billion) 30.25 30.48 27.51Growth over previous year anterior (%) (0.8%) 10.8% 12.7%Natura Market Share (%) 11.1 11.4% 12.4%

* Since 3Q14, a few significant companies stopped reporting their data to the association, which could significantly affect the quality of statistics. Hence, we decided not to report this information until the situation normalizes. ** Euromonitor data considers sales in 2015 constant U.S. dollars, and the institution recalculated market value and market share for 2012.Analyzing the market using the Euromonitor International methodology, the table below shows that the CFT market in Brazil is concentrated in the Hair Care and Fragrance categories;

Brazilian Market by Segment

(US$ billion)2015 2014 2013 CAGR

(2013-15, %)

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Total* 30.230.5

27.5

4.9%

Skincare3.1 3.2 2

.9

2.1%

Hair Care6.1 6.6 5

.8

2.5%

Make-up2.5 2.5 2

.2

5.6%

Men’s Care6.5 5.9 5

.1

12.4%

Fragrancies5.7 5.4 4

.8

8.5%

Oral Hygiene2.3 2.3 2

.3

1.6%

Soaps and Bath2.3 2.3 2

.1

5.1%

Deodorant3.4 3.5 3

.1

5.9%

Kits 0.4 0.5 0.5 (5.6%)Children’s Products 1.4 1.3 1.2 7.1%Sunscreen 1.1 1.1 1.1 (1.9%)

Hair Removal0.3 0.3 0

.2

13.6%

Source: Euromonitor International in 2014 constant U.S. dollars. * The sum of all segments is not equal to the total due to double counting. Male skin care products, for example, are included under both the masculine products and body and facial care segments.Another important point in Natura’s relations with its consumers is the wide range of products offered through a dynamic portfolio that seeks to meet the needs of all publics as best as possible, as well as support services, which serve as an important point of contact with consultants and consumers. Thus, the Natura brand registered a decline in the preference index – as of December 31, 2015, the brand was positioned as the most preferred brand on the CFR market, with a preference rate of 35% according to a survey sponsored by Natura and conducted by Ipsos Brand Essence, and was present in 52.5% of Brazilian households according to Kantar Painel, meaning that 57% of Brazilian households purchased at least one Natura brand product in the last 12 months.

Natura Brand in Brazil 2015 2014 2013Brand Preference (%) 35% 42% 44%Household Penetration (%) 52.5% 56.2% 59.2%

Source: Ipsos /Brand Essence for the brand preference rate and Kantar Painel for household penetration.

ii. market competition conditions The cosmetics, fragrances and personal hygiene market is very competitive, both in Brazil and in other Latin American countries where the Natura brand operates. Brands and new product launches are important elements for consumer activation. In recent years, the markets in which the Company operates have grown 1.5 times faster than the global average, proving quite attractive for new investors. Furthermore, in offering a wide range of

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categories, the Natura brand competes with several different companies that operate through different distribution channels: direct selling, retail and internet sales. The following graph represents the Natura brand’s market share in Brazil according to Euromonitor International data released in 2015, considering even CFT market categories that are not available in the Company’s portfolio:

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Market Share in Brazil(%, Euromonitor, 2015)

In countries in which the Company operates, the market is organized in two major distribution channels: direct selling and retail. Direct selling in Brazil represent 25.2% of the market, versus 10.1% globally. While certain Cosmetics and Fragrance categories are more relevant in the direct selling channel, the personal hygiene categories are traditionally distributed via retail. In Brazil, Natura’s competitors may vary in accordance with the category in question. For example, in the fragrance and make-up categories, the Company’s main competitors are Avon and O Boticário; in the body and skin care, they are Avon, Beiersdorf AG (particularly the Nivea brand) and Unilever; and for hair care, the multinational brands Unilever, L’Oréal, Colgate-Palmolive Company and Johnson & Johnson.Several of the competitors mentioned above have more resources at their disposal than Natura Cosméticos S.A. On a global scale, however the Company believes that the strength of the brand, its consultant network and the concept and quality of its products ensure its market advantage and resumed leadership in Brazil. In other countries where the Natura brand is present, market conditions are quite similar, as are the local competitors by category and distribution channel. Major differences can be found in the strong operations of Corporación Belcorp in Peru and Colombia; Unique-Yanbal Group in Peru and Colombia; and Voewerk & Co KG (with the Jafra brand) in México. It is important to note that domestic competitors (Brazil) such as O Boticário and Jequiti do not have relevant operations in other regions of Latin America. d. possible seasonalityIn Brazil, the Company observes peaks in demand in the second and fourth quarters: (1) in Brazil during the weeks leading up to Mother’s Day, which occurs in the country during the first half of the month of May and (2) in November, in the run up to Christmas sales, being the most significant. Similar seasonality can be seen in the International Operations.

Share of Net Revenue by Quarter (%) 2015 2014 2013Brazil

1st Quarter22%

21%

20%

2nd Quarter 2 2 2

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5%

5%

5%

3rd Quarter24%

25%

25%

4th Quarter28%

29%

30%

Total Year Brazil100%

100%

100%

Consolidated

1st Quarter21%

21%

19%

2nd Quarter24%

24%

24%

3rd Quarter25%

25%

26%

4th Quarter30%

29%

31%

Total Year Consolidated100%

100%

100%

e. main inputs and raw materials, informing:i. a description of relations with suppliers, including whether they are subject to government control or regulation, indicating the entities and their respective applicable legislation

Supplier OverviewThe Company values quality relations with its suppliers, many of whom have been partners for more than 20 years. Supplier relations are guided by the Company’s Code of Conduct for Suppliers, released in 2014. The document represents an evolution of our main Relationship Principles from 2007, brings guidelines for social, environmental and quality aspects, describes the expectation from our supplier network and reflects our commitment to the well-being of our partners, each person, society and the planet. Natura Cosméticos S.A. has adopted a “Sustainable Supply Chain” strategy to select and develop suppliers based on a methodology for evaluating social and environmental aspects, converting them into monetary values for assessment. Using methodology developed with the help of international specialists and the participation of its suppliers, the Company can determine the potential impacts caused by its supply chain and establishes development plans in which partners manage their main social and environmental indicators and commit to continued investment in items such as education for employees, labor safety and private social investment. To reinforce these precepts and qualify partners for improvements in their social and environmental management, the Company promotes training and specific actions. Additionally, the Company monitors eight partner performance indicators on a bi-yearly basis, namely: CO2 emissions, water consumption, waste generation, investments in education, employee training, labor accident index, social inclusion and private social investment. The Company relies on a diverse base, with nearly 5,000 commercial partners in Brazil. This base is divided among suppliers for outsourcing (finished products), productive inputs (biodiversity assets, raw materials and packaging material) and materials and indirect services. In 2015, the Company totaled 4,947 active suppliers in productive inputs and

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materials and indirect services. Of this total, 173 partners accounted for 80% of purchasing volume during the year. The Company’s main suppliers are: Provider Indústria e Comércio; Albea do Brasil Embalagens Ltda.; IFF Essências e Fragrâncias Ltda.; SG Indústria e Comércio de Frascos Ltda.; Givaudan do Brasil; Razzo Ltda.; Companhia Refinadora da Amazônia; Aptar B & H Embalagens Ltda.; Higident Brasil Indústria e Comércio Ltda.; Lipson Cosméticos; K&G Indústria e Comércio Ltda.; BASF S/A; Wheaton Brasil Vidros Ltda.; Sinter Futura Ltda.; Box Print Ltda.; JBS S/A; Klabin S/A; Solev do Brasil Ltda.; Usina São Francisco S/A; A.W. Faber Castell S/A and Symrise Aromas e Fragrâncias Ltda.Due to the large number of suppliers and the active effort to manage purchasing concentration in each link in our productive chain, we are less dependent on a single supplier and are generally capable of responding to interruptions in the supply chain, moving production or material supply to other suppliers.

Raw MaterialsPercentage

of Costs with Raw Materials Number of Suppliers

Plastic Packaging 21.8% 71Fragrances 17.5% 16Graphics 14.6% 39Oleo chemicals 11.8% 43Glass Packaging 11.4% 13Valves 8.4% 12Filters, pigments, silicon and specialties 4.2% 32Petrochemicals 3.6% 64Essential oils and extracts from Brazilian biodiversity 3.1% 81

Alcohol 2.0% 6Other 1.5% 13

For its key suppliers, the Company has adopted the QLICAR (Quality, Logistics, Innovation, Competitiveness, Environmental, Social and Relations) Program, which focuses on the development of suppliers, evaluating critical indicators of service level, as well as social and environmental questions, in line with the sustainable supply chain strategy. With this program, suppliers are evaluated according to more traditional criteria such as quality and competitiveness, in addition to investments and long-term social and environmental impact. The program aids in recognizing the evolution of commercial partners through the QLICAR Prize, held annually. It is also important to note that all contacts signed with suppliers contain clauses regarding human rights, such as the risks involved in child labor and forced or slave-like labor. Risk management for suppliers considers market, financial, social and environmental, occupational health and safety and quality factors, in addition to other legal requirements. In 2015, the Company identified 409 eligible suppliers in its evaluation and risk control process, through audits and the development of plans for continuous improvement: 128 suppliers presented some aspects for potential environmental improvement, 126 plans to reduce negative impacts on society and 120 for improvements to labor conditions. It is important to note that all of these aspects include actions with differing levels of impact (high, medium and low), and that over 70% of suppliers that had improvement gaps conducted one or more actions. The Company has yet to sign an agreement to correct human rights issues, given its zero-tolerance policy for this form of violation.

Supplier Communities

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Natura’s product formulations use active ingredients from Brazil’s social and biodiversity, which are extracted sustainably. We prioritize the sourcing of these active ingredients from cooperatives and small farmers, with which we establish relationships that go beyond commercial aspects to promote a relationship based on fair price and the sharing of benefits arising from the use of the genetic heritage and the associated traditional knowledge.Through these relationships, we contribute to our corporate strength and economic diversification and foster sustainable development in the regions where we operate.In 2015, Natura had 30 community partners, benefitting a total of 2,251 families (3,121 in 2014).This group of communities is characterized by its diversity, both culturally and socioeconomically. Furthermore, communities are located in different ecosystems and present different forms of social and institutional organization. This public includes everything from small groups of family farmers in Southern Brazil to traditional extraction communities with large number of families in Northern Brazil. The Company’s relationship with these groups over the years has been guided, either directly or indirectly, by local value creation. In addition to purchasing inputs, the Company establishes contracts for the sharing of benefits, and in some cases provides financial or development support to suppliers and their productive chains. The table below shows the quantity of funds that were allocated to Natura’s partner communities and the number of communities and families benefitted in 2013, 2014 and 2015:

2015 2014 2013Supplier Communities

Communities with which Natura maintains relations

30 33 32Families benefitted 2,251 3,121 3,117

Funds Allocated (R$ million)Supply (1) 2,837 3,040 3,435Sharing of benefits (2) 2,411 3,982 4,350Support and Infrastructure (3) 443 300 1,449Use of image (4) 14 21 -Training (5) 245 946 350Technical Services (6) 139 185 -Studies (7) 490 414 1,590

(1) Acquisition of inputs from the social biodiversity to be used in Natura products. (2) Amounts paid in benefit sharing to communities that provided genetic heritage and/or associated

traditional knowledge of a species of Brazilian biodiversity. (3) Support to sustainable development, the payment of which is tied to the execution of projects

aimed to strengthen production chains, sustainable use of biodiversity and environmental conservation. Until 2014, this category was called Funds and Sponsorships. Since then, money from Funds has been allocated to the category Benefit Sharing.

(4) Amount paid for use of the image of members of communities in institutional or marketing disclosure materials.

(5) Workshops and courses paid to perfect sustainable production techniques. (6) Indirect funds allocated according to Natura's investment decision. All technical services provided

by external consultants or those contracted by Natura from cooperatives/communities (7) Indirect funds allocated according to Natura's investment decision. All kinds of diagnosis,

management plans, mapping, information surveys, field surveys, loyalty/satisfaction surveys. Regardless of whether done by external consultant, by Natura or by the community using funds transferred by Natura. Until 2014, this category was called Certification and Management Plans.

bioQlicar is a monitoring and development program similar to the program applied to regular suppliers, but is focused on rural suppliers. The program was revised in 2014 and will be applied in 2015 with the focus on a system to verify the social and biodiversity input chains based on the principles of ethical biotrade of the Union for Ethical BioTrade (UEBT). By monitoring the actions to improve the social and biodiversity input chains and OTIF.bioQlicar fosters the improvement and development of production and chains and the preparation of communities with the market in general.The Company also works with communities to set high standards for human rights, promoting the practice of dignified work with suppliers that maintain direct commercial relations with the Company, and uses contracts to require practices identical to those seen among partners in the previous supply chain.

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It is important to note that all contracts for sharing benefits and supply signed by the Company carry clauses requiring respect for human rights and indication that we do not hire forced/slave-like or child labor in its production chain.In 2015, the Company implemented the Biodiversity Verification System in all communities to promote and/or encourage corrective actions throughout the supply chain. These actions involve organizational management, knowledge of legislation applicable to cooperatives, best stewardship practices and more. Natura also invested in the implementation of Social and Biodiversity System, a geographical intelligence solution that enables online location of all chains and access to indicators such as investments made, local production and infrastructure, and integration with other enterprise management systems. Over the course of 2015, the system received information related to the traceability of our suppliers, which gave us improved visibility and control of the number of households involved in our procurement.

ii. possible dependence on a limited number of suppliersThe Brazilian cosmetic, fragrances and personal hygiene sector is characterized by low levels of concentration of raw material and packaging suppliers. Most global suppliers have operations in Brazil, practically covering all specialties required by the cosmetics industry. These conditions increase the competitiveness of the Brazilian cosmetic sector versus the remainder of Latin America, leading to greater levels of exports. In this context, the Company was not, as of the reference date for this Reference Form, dependent on any one of its suppliers.

iii. possible price volatilityOf the volume of raw materials, packaging material and finished products purchased, 80% is produced in Brazil, while around 20%* of total purchased volume is directly tied to the Real/US Dollar exchange rate and Real/Euro Exchange rate, and suffers from volatility of the currencies in question.

*Note that this amount includes a portion of the volume of inputs purchased by our finished product suppliers in Brazil that are also tied to exchange rates.

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7.4 Clients responsible for more than 10% of total net revenue

7.4 Identify if there are clients responsible for more than 10% of the issuer's total net revenue, informing:

a. total revenue from the client; b. operating segments affected by revenue from the clientThe Company does not have any client or sales representative (Natura Consultant) that accounts for more than 10% of its consolidated net revenue. The direct sales market in which the company operates is highly fragmented.

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7.5 Effects of government regulations on our activities

7.5 Describe the material effects of government regulations on our activities, specifically commenting on:

a. Need for government authorizations to carry out activities and the history of relationship with public authorities to obtain such authorizations

Regulation of our businessBrazil’s cosmetics industry is regulated by the National Health Surveillance Agency (ANVISA), created by Law 9,782, of January 26, 1999. Our operations are thus subject to authorizations and inspections by ANVISA, which also lays down the health standards for the production, storage and transport of cosmetics, fragrances and toiletries.Registration of cosmetics, toiletries, fragrances and other productsAccording to Federal Law 6,360/76, registration of cosmetics, toiletries, fragrances and other similar products should fit with the list of harmless substances, prepared by a competent body of ANVISA and published in the Federal Official Gazette, which should contain the specifications of each category, as well as the drugs, inputs, raw materials, coloring agents, solvents and other items allowed in their production. If the registration does not fit the list mentioned above, the harmless nature of the respective formulas must be recognized through conclusive reports issued by competent authorities from the Ministry of Health.The composition formula of cosmetics, toiletry products for adults and children, fragrances and similar products can be altered, provided such alterations are approved by ANVISA based on competent technical reports.Health surveillance regulationAccording to the Brazilian Constitution, the federal, state and municipal governments have the power to regulate matters related to health and sanitary surveillance in order to eliminate, reduce and prevent health problems caused by the manufacturing of products and provision of services related to the health of individuals. The federal government has enacted broadly applicable laws and regulations, which are strengthened and complemented by states and municipal governments. Thus, health surveillance is carried out by federal, state and municipal authorities, who act in an integrated manner to safeguard the health of the population.According to Federal Law 6,360 of September 23, 1976, companies intending to extract, produce, manufacture, process, synthesize, purify, separate, package, repackage, import, export, store or ship toiletries, cosmetics and perfumes must obtain an operating license from ANVISA, which will inspect the industrial process, the nature and type of products and proof of technical, scientific and operating capacity of the Company, as well as other applicable requirements.Apart from federal authorization, companies must also obtain license from the respective local health authority, for all industrial and/or commercial establishments that manufacture or sell the above-mentioned products.Companies operating without the registrations mentioned above or without the presence of a professional responsible for the technical operations, or in breach of laws and regulations relating to federal, state and municipal health law and regulations will be subject to penalties such as warnings, fines, suspension of operations and cancellation of the permit or registration by heath surveillance authorities.For details of our material fixed assets, see sub-item “a” of item 9.1 of this Reference Form.Our establishments and technical experts are registered with the regional chemical and/or pharmaceutical councils of the respective States, duly accompanied by the technical responsibility records for the following production and distribution units: Castanhal, Itupeva, São Paulo, Matias Barbosa, Jaboatão dos Guararapes, Uberlândia, Simões Filho, Benevides, Cajamar, Canoas and São José dos Pinhais.We have already renewed the registration of all Natura companies at the councils for 2015. Environmental licenses and authorizationsBrazilian environmental laws require projects and activities that, in any way, cause or may cause damage to the environment, first obtain environmental license. This is necessary both

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for the initial phases of the project and for expansions to it, and the licenses must be renewed periodically.In general terms, the authority for granting licenses for projects with environmental impact at the regional and national level is IBAMA. In other cases, the competent authorities are the state and municipal environmental bodies. Nevertheless, the definition of competent authority for licenses is also influenced by other factors, such as, for instance, national security, responsibility of the institution at the conservation unit and the nature of activity carried out, as established in Complementary Law 140/2011.The environmental licensing process basically consists of the issue of three licenses, all with determined validity: preliminary license, installation license and operating license. Each of these licenses is issued according to the phase of implementation of the project and its validity depends on compliance with the conditions set by the environmental licensing authority. When compulsory, the lack of environmental license, regardless of whether the activity is actually causing damage to the environment, is an environmental crime that is punishable by administrative penalties, such as fines of up to R$ 10 million, as envisaged in Decree 6,514/2008, and the suspension of the activity for which a license was not obtained. On the date of this Reference Form, the Company had all the environmental licenses required for carrying out its activities. This applies also to Ecoparque, Natura’s industrial complex in the state of Pará.Access to genetic heritage component and associated traditional knowledgeOne of the discussions that Natura has been having with the Brazilian government for more than a decade is the law on access to biodiversity and the traditional knowledge associated with it. In partnership with several other companies from diverse sectors, specialists and civil society entities, we are advocating the creation of a new legal framework for access to biodiversity and benefit sharing that encourages research and increased use of raw materials from Brazilian social and biodiversity, combining innovation and the sustainable use of these resources. We contributed substantially in this process, providing suggestions, technical reports and participating in negotiations, besides articulating the entry of new and important partners in the discussion group, facilitating the alignment of ideas and diverse interests.Natura supports the idea that it is possible to make the country more competitive through responsible use of natural resources and strives to establish a system that integrates production and consumption, favors conservation of biodiversity and promotes the development of traditional peoples and communities. The most critical point of the previous rule, which was in force until November 2015, was the requirement of authorization from the Genetic Heritage Management Council (CGEN), an entity linked to the Ministry of Environment, before the company could conduct research on species from the Brazilian biodiversity. This restriction hampered the freedom of research and free initiative guaranteed by the Federal Constitution, besides creating bureaucracy that is incompatible with the reality of business, since authorizations could delay inordinately. There have been cases when authorization took three years to be granted. As a result of this scenario, as mentioned in item 4.5 above, between 2010 and 2011, we were served 70 infraction notices by Ibama, the Brazilian environmental protection agency that is entrusted with monitoring compliance with said law, for alleged irregular access to biodiversity to carry out research and development of products and for alleged non-sharing of benefits resulting from these accesses. The process of preparing the new legal framework intensified especially in the years from 2012 to 2015. In 2012, the first proposal was submitted by the private sector to the Ministry of Environment and later a Business Coalition for Biodiversity was formed to discuss the text with the Federal Government. In 2014, the government sent the bill to Congress with constitutional urgency. During the whole of 2014 and in early 2015, the text was broadly discussed in both houses and, after being approved with a few amendments, obtained presidential sanction, was enacted on May 20, 2015, and came into effect one hundred eighty (180) days after the date of its official publication. Thus, the previous law has been replaced with a modern and more efficient legal framework that promotes the sustainable use of Brazilian biodiversity and the respective benefit sharing, for the benefit of the country, its companies, universities, and traditional communities or indigenous peoples. The law has yet to be regulated, and we will continue to actively

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contribute to its developments, implementing our Policy for the Sustainable Use of Social and Biodiversity.Federal Law 13,123/2015 came into effect at the end of 2015, enabling the discussions on ratification of the Nagoya Protocol, which are closely related to the subject, progress further already considering this text.On the environmental front, we are a member of the commission of the Brazilian Cosmetics, Fragrances and Toiletries Industry Association (ABIHPEC), which participated in the development of an industry agreement that meets the requirements of the National Solid Waste Policy (PNRS), in effect since 2010. PNRS establishes targets for the collection and disposal of solid waste and enables its execution through Sector Agreements. In this regard, the packaging industry submitted to the Ministry of Environment in December 2013, an Industry Agreement proposal that was the result of joint efforts of the various organizations representing the industry. The proposal was made available for public consultation from September to November 2014 and after all the inputs were received, it was submitted to the Ministry of Environment for approval and signed by the parties in November 2015.

b. Environmental policy of the issuer and costs incurred to comply with environmental regulations and, if applicable, other environmental practices, including compliance with international environmental protection standards.

Responsibility in environmental mattersBrazilian environmental legislation imposes penal and administrative sanctions on individuals and legal entities whose conduct is characterized as environmental crime or infraction, regardless of the obligation to remedy the environmental damage caused. Sanctions may be imposed for the practice of any environmental crimes and infractions that include the Law on Environmental Crimes (Law 9,605/1998), which include:

Fines that, in the administrative sphere, could reach R$50 million, according to the economic capacity and the history of the entity that broke the law, as well as the severity of the facts and background, which could be doubled or tripled in case of repeat occurrences;

Suspension or prohibition of activities; and Loss of benefits, such as the suspension of financing and withdrawal of authorization

for public tenders, and tax incentives.In the civil sphere, environmental damages imply joint and objective, direct and indirect liability. This signifies that the obligation to compensate the degradation caused may affect all those involved directly or indirectly, regardless of proof of guilt of the agents. As a result, the hiring of third parties to carry out any intervention in our activities, including, for example, for the treatment and final disposal of solid waste, does not absolve our responsibility for any environmental damage caused by the contractor.Also, environmental legislation envisages the possibility of lifting the corporate veil with regard to the controlling shareholder if the same is an obstacle in indemnifying for the damages caused to the quality of the environment.Brazilian regulation on biodiversityOn March 16, 1998, the Convention on Biological Diversity (CDB) was introduced in the Brazilian legal system through Decree no. 2,519 of March 16, 1998. The CDB was drafted by world leaders in 1992 at the ECO 92 summit held in Rio de Janeiro, establishing three key objectives: (i) conservation of biological diversity; (ii) sustainable use of its components; and (iii) fair and equitable sharing of benefits arising from genetic resources. The CDB laid down the general principles that could be implemented by each of the signatories in order to promote the objectives of the convention, which include the drafting and enactment of appropriate laws, campaigns to educate and raise awareness of the public, periodical monitoring of available resources and financial cooperation among the signatories.CDB also obliges the signatory countries to regulate access to their genetic resources and traditional knowledge associated with biodiversity. Notwithstanding the contents of the CBD, the Brazilian legislation on access and exploitation of Brazilian biodiversity was incipient until 2015. In 2000, the Brazilian government started regulating access to resources taken from Brazilian biodiversity and the associated traditional knowledge through Provisional Presidential Decree 2,052 -1, converted into Provisional Presidential Decree 2,186-16, published on August 23, 2001, which, among others, created the Genetic Heritage

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Management Council (CGEN) to regulate the government’s policies on the matters indicated in said decree. The provisional presidential decree established the general concepts of access to genetic heritage and associated traditional knowledge to promote scientific and technological research, and technological development, as well as the development of biological processes and methodologies for use in industrial activities and other applications, and several other conditions for said activities to be performed. Note that we had been advocating for many years, as described in the item "a" above, the need for a new law that protects Brazilian genetic heritage and associated traditional knowledge, while ensuring the conditions for research and development of products based on our biodiversity. We adopt the best practices for managing access to genetic heritage and associated traditional knowledge to share the benefits which, in fact, are reflected in our Policy on the Sustainable Use of Social Biodiversity.In this regard, Natura filed a few lawsuits to obtain a statement that the prior authorization for accessing genetic heritage, which was required by said Provisional Presidential Decree is unconstitutional. The company achieved a few positive results in these lawsuits, at the lower and appellate court levels, as well as at the higher court (in this case, the Superior Court of Justice - STJ).Note that Federal Law 13,123/2015, which came into effect in November 2015, no longer requires prior authorization from CGen to access the genetic heritage and associated traditional knowledge, only requiring registration of the access.With regard to the biodiversity agreements, note that in 2009, 2010, 2011, 2012, 2013, 2014 and 2015, we signed four, two, three, ten, five, one and six Agreements for the Usage of genetic heritage and benefit sharing (CURB) and five, two, five, ten, five, one and six Instruments of Prior Consent (TAP). We also signed addenda to a few of these agreements to expand the possibilities of our researches and, consequently, generate more benefits that could be shared with the providers.Finally, note that in 2015, the CGEN granted 45 access authorizations requested by Natura and renewed 16 authorizations granted earlier. Until the enactment of the new law, six authorization requests and nine renewal requests were still awaiting authorization from the CGEN. With regard to Ibama, we have a special authorization that covers 25 research projects.

c. dependence on patents, brands, licenses, concessions, franchises or royalty contracts relevant to the development of activitiesThe Company is not dependent on any third-party patents, brands, licenses, concessions, franchisees and royalty contracts that are relevant to the development of its activities.

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7.6 Material revenues from other countries

7.6 With regard to countries where the issuer obtains material revenues, identifyThe Company’s revenues are almost entirely obtained from its operations. The following table shows the share of its foreign subsidiaries, which jointly accounted for 29.0% of consolidated net revenue in the fiscal year ended December 31, 2015.

(% share of consolidated net revenue) 2015 2014 2013LATAM operations 23.3% 15.6% 13.9%AESOP operations 5.5% 3.3% 2.0%Other 0.2% 0.2% 0.2%Total Subsidiaries (Export Market) 29.0% 19.1% 16.1%

Total Natura Cosméticos S.A. (domestic market, Brazil) 71.0% 80.9% 83.9%

Total Consolidated 100.0% 100.0% 100.0%

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7.7 Effects of foreign regulations on our business

7.7 With regard to the foreign countries disclosed in item 7.6, inform to what extent the issuer is subject to the regulation of these countries and how it affects the issuer's business. The Natura operations in Argentina, Chile, Colombia, Mexico, Peru and France and the Aesop operations in Australia, Brazil, Canada, France, Germany, Hong Kong, Italy, Japan, South Korea, United Kingdom, Macaw, Malaysia, Norway, Singapore, Switzerland, Sweden, Taiwan and the United States, are subject to the laws of the respective countries. Changes in these laws could affect local operations. However, the Company does not believe that changes in foreign regulations could have a generalized effect on its operations.

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7.8 Social and Environmental Policies7.8 With regard to social and environmental policies, inform:

a. if the issuer discloses social and environmental information

Annual report: brings key data regarding the company’s performance during the year.Quarterly releases: published every quarter for the market, these are mandatory for publicly traded companies and replicate the same integrated approach, informing Natura’s performance in the economic, social and environmental spheres. Also published is qualitative information on the results of structural projects and product innovation that contribute to Natura's competitive advantage.

b. the methodology adopted to prepare this informationSustainability VisionIn 2014 we launched our Sustainability Vision, with the purpose of creating a positive impact in 2050. Structured on three interdependent pillars, brands and products, our network and management, the Sustainability Vision contains guidelines, quantitative aspirations and qualitative commitments until 2020.As part of this commitment to engage our relationship network in a continuous and transparent dialogue to enhance its vision for sustainability, we reviewed our materiality matrix in 2014. The goal was to share with the Company’s stakeholders the strategy for 2050 and the ambitions for 2020. After mapping the perceptions of the relationship network with Natura’s internal aspirations, six new priority topics were recognized that will help guide the management of the company and its interaction with both strategic stakeholders and society:

Water Climate change Waste Valuation of social diversity and biodiversity Product transparency and origin Education

The following table shows the evolution in quantitative indicators in the last three years:

Indicator 2013 2014 2015 2020 Target

Water consumption (liters/unit manufactured) 0.40 0.45 0.49

To be determined – new target with a

broader scope

Relative GHG emissions (kg of CO2e/kg of product manufactured) 2.93 3.00 3.17

2.15(Reduce emissions by 33% in relation

to 2012)

% of post-consumer recycled materials 1.4 1.2 2.9 10

% eco-efficient packaging 22 29 26 40

Cumulative Business Volume in the Pan-Amazonian region (R$ million)

385 582 752 1000

Purchase of Amazonian inputs (%) 13.4 13.3 12.3 30

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Climate changeIn 2007, we created the Natura Carbon Neutral Program, a process to manage the GHG emissions of the production processes in our value chain. The program establishes the emissions inventory, actions to reduce impacts and a compensation pillar for the emissions we can't avoid. We adopted the GHG Protocol methodology and our management considers the entire value chain, from the extraction of raw materials to the disposal of post-consumer packaging, except the stage of product use by consumers, which is most complex to be quantified.

In 2013, we reached our goal of reducing by 33.2% our relative GHG emissions by product mass compared to 2006 levels.

In 2014 and 2015, however, we observed an increase in our relative emissions, mainly due to the lower sales volume in Brazil, the higher fixed emissions from operations and the increased use of airfreight in the LATAM operations. The mitigating initiatives include reducing airfreight in Brazil, expanding the use of sustainable technologies in the portfolio (e.g., fragrances in recycled glass containers) and optimizing the printing of catalogs in Latam.

WaterWe are the first company in the world to conduct a corporate inventory of our water footprint in accordance with the new standard ISO 14.046, from 2014, for water management.In 2014 we established the calculation methodology, which was applied to our entire product portfolio. One of the most innovative aspects is the inclusion of indicators that consider water availability and basic sanitation conditions in each region. Another relevant aspect is the accounting of the phase of product use by consumers. This has the highest impact, since many of our products require water to be used.As for the water consumption results at internal operations, in 2014, for each item produced, 0.45 liters of water was used, an increase of 11% compared to the last three years, due to the expansion of the Cajamar industrial unit and the opening of Ecoparque in Benevides, which houses Natura’s soap plant.The absolute value in 2015 declined by 0.3% over the previous year, but the liter per unit manufactured indicator increased by almost 10%, influenced by the lower sales volume in Brazil. Production volume, which was around 10% lower, also impacted the indicator, since 30% of the total volume of water consumed is used regardless of production.

Waste Based on a lifecycle perspective that encompasses the entire value chain, Natura has been conducting for five years its inventory of solid waste generation, which accompanies the results of the three key phases of the chain: manufacturing processes (internal and outsourced), distribution, and use and disposal by consumers.The Company has been dedicating special attention to discussions with organizations and companies to efficiently and fairly connect the entire reverse logistics chain, including the consumer and considering the stage of final disposal of recycled materials in the industry. In 2014, the volume of waste generated for each unit produced grew 15% in comparison with the previous year, affected by the more significant losses in production processes and in inventory. However, the company attained 40% of eco-efficient packaging*, an increase of 34% from 2013, due to the growth in the sale of refills and of the Natura Sou line, whose packaging is in pouch format.Despite the higher level of relative solid waste generation and the lower share of recyclable materials in packaging due to changes in the product mix, in 2015, we managed to increase the use of post-consumer recycled materials, mainly by adopting the use of recycled glass for fragrances and increasing recycled PET in the Ekos line.

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* Eco-efficient packaging is at least 50% lighter than regular/similar packaging; or is composed of potentially marketable recycled materials and/or renewable non-cellulosic materials that do not increase mass.

Social diversity and biodiversityNatura established ambitious targets to advance its businesses in the Amazon: by 2020, the Company plans to increase from 11% to 30% the consumption of raw materials from the region, engage 10,000 agro-extractivist families in the program and generate business of around R$1 billion. In 2014, consumption of raw materials from the Amazon region, which includes both Brazil’s social diversity and biodiversity assets as well as those specific to the Amazon, remained at 13% (same as in 2013), while in 2015 it decreased to 12.3%. Cumulative business volume in the region went from R$385 million in 2013 to R$752 million in 2015.

Social IndicatorsEducation

We plan to play a more relevant role in generating social value on various different fronts. With 20 years of existence, the program Crer para Ver continues to increase the funds it raises every year. Profit from the sale of items in this line (such as reusable bags, notebooks and pencils) is allocated to projects that work to improve the quality of public education. The Natura Institute now manages and invests funds from the program's sales, which in 2015 amounted to R$19.5 million in Brazil and R$10.5 million in the International Operations.

• Social Progress Index (SPI) The challenge of measuring the development of the supplier communities where we operate and identifying their needs led us to establish a partnership, in 2015, with the base communities, public partners, NGOs and local companies to develop the SPI Communities – Social Progress Index. It was used to measure quality of life and well-being in the riverside communities along the Juruá River in Carauari, Amazonas. We based the index on the principles of the Global SPI developed by Michael Porter, which has 52 social and environmental indicators is used in over 150 countries. SPI Communities influenced the activities of the Territory Development Forum of Médio Juruá, a multi-sector organization in the region.

• HDI adapted to Natura's direct selling channel Inspired by the methodology of the Human Development Index (HDI), we created a model that is capable of determining the current stage of living conditions of Natura Consultants (CNs) and can monitor their annual progress. This is the world’s first corporate human development indicator, and was customized in accordance with Natura’s actual situation. Like the HDI for countries, Natura's study considers three dimensions: health, knowledge and living standards. From 2014 to 2015, we observed an increase of 7.3% in the development of consultants, from 0.550 to 0.590. Although it is impossible to compare HDI-CN to the national HDI, because of methodological discrepancies, we can derive conclusions by comparing certain national indicators.HDI-CN will help us create fine instruments for corporate social management and investment associated with the business that can influence improvements in quality of life for the CNs. Our goal is to reach an index of 1, which is top of the HDI-CN scale, between 2027 and 2032.

• Union for Ethical Biotrade (UEBT) Verification Model for social and biodiversity chainsIn addition to the geolocation system of supplier communities, another advance was the development and implementation of the Natura Verification System for Biodiversity Input Supply Chains, which was developed in partnership with the Union for Ethical Biotrade (UEBT). The initiative monitors and develops biodiversity supply chains based on the requirements of the UEBT, an organization of which the company is a member, as well as the Code of Good Practices to Guarantee Compliance with Social and Environmental Standards of

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the International Social and Environmental Accreditation and Labeling Alliance (Iseal), and the standards established by Natura related to good production and handling practices, traceability, biodiversity conservations, raw materials quality, labor relations and workplace health and safety.

B CorpWe are one of the largest companies in the world to receive the B Corp certification and the first public corporation to win this seal in 2014. B Corp is an international certification issued by B-Lab that recognizes organizations that aim to have a positive social and environmental impact. This reinforces our commitment to remain alongside companies that share our beliefs in building a fairer world.

c. if this information is audited or reviewed by an independent organizationThe B Corp certification is approved by an independent organization (B Lab) and all of the above information is described in our annual report, which was drafted in accordance with the framework GRI G4 and audited by Ernst & Young.

d. the page on the world wide web that provides this informationhttp://natu.infoinvest.com.br/http://www.natura.com.br/http://www.natura.com.br/relatorio-anual/2015http://www.natura.com.br/relatorio-anual/2014http://www.natura.com.br/sites/default/files/static/sustentabilidade/natura_visao_sustentabilidade_2050.pdf?utm_so

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http://www.natura.com.br/sites/default/files/static/sustentabilidade/natura_visao_sustentabilidade_2050.pdf?utm_so

http://www.natura.com.br/sites/default/files/static/sustentabilidade/natura_visao_sustentabilidade_2050.pdf?utm_so

http://www.natura.com.br/relatorio-anual/2014

http://www.natura.com.br/relatorio-anual/2015

http://www.natura.com.br/

http://natu.infoinvest.com.br/


7.9 Other Material Information

7.9 Provide other information that the issuer deems relevant

There is no other material information that has not been discussed in this section.

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8. Extraordinary business

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.

There have been no acquisitions or disposals of material assets that are not deemed part of the normal course of business of the Company.

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8.2 Significant changes to the conduction of the issuer's business

Ownership changes in 2015:

In December 2015, the Company, through its holding company Natura Australia Pty Ltd. (“Natura Australia”), acquired 183,111 common shares based on the options established in the purchase and sale agreement, from the noncontrolling shareholders of Emeis Holdings Pty Ltda. (“Emeis”), corresponding to 7.40% of the capital of Emeis. Thus, the indirect interest held by Natura Cosméticos S.A. in Emeis, through its subsidiary Natura Austrália Pty Ltd., changed from 71.34% to 78.74%.

The share purchase amount was AU$ 23,524 million, with the cash offset recognized as an increase in investment of AU$ 4.243 million and a reduction in shareholders' equity of AU$19,281 million. As a result, the Company recognized in its shareholders' equity, under “Effects of changes in interest held in subsidiaries”, a reduction in the amount of AU$ 19.281 million or R$ 53,873.

The realization of 7.40% of the provision for acquisition from noncontrolling shareholders recorded as liabilities by the Company in the amount of R$66,141 was offset by an increase in shareholders’ equity under “Realization of reserve for acquisition of interest from noncontrolling shareholders through purchase of shares in a foreign subsidiary."

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8.3 Material agreements signed by the issuer and its subsidiaries that are not directly related to their operating activities

8.3 Inform the material agreements signed by the issuer and its subsidiaries that are not directly related to their operating activities

In the normal course of our business, in the last three (3) fiscal years, we did not enter into any material contracts that are not directly related to our business operations.

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8.4 Other material information – Extraordinary business

8.4. Provide other information deemed material by the issuer

There is no other information of relevance to this section.

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9. Material assets9.1 Noncurrent assets9.1 Describe any non-current asset relevant to the development of issuer’s activities, particularly:

a. Property, plant and equipment of the Company, including rented or leased assets, identifying their locationNatura Cosméticos has distribution centers in the cities of Matias Barbosa and Uberlândia (Minas Gerais), Jaboatão dos Guararapes (Pernambuco), Canoas (Rio Grande do Sul), São José dos Pinhais (Paraná), Castanhal (Pará) and Simões Filho (Bahia), and offices in Taguatinga (Federal District), Rio de Janeiro (Rio de Janeiro), Recife (Pernambuco), Salvador (Bahia) and Porto Alegre (Rio Grande do Sul). In 2009, we inaugurated a training center in São João do Meriti (Rio de Janeiro). In 2013, to ensure evolution of the business and expansion of our logistics network, the Company opened a new distribution center in São Paulo with an expanded production capacity to drive growth and reduce product delivery times. The new distribution center has high-technology equipment, and, at the same area, an administrative unit for 2,000 employees will be built, through a built-to-suit leasing agreement, by 2017.The Annual Shareholders' Meeting held on April 12, 2013 approved the transfer of the registered office to the city of São Paulo, at NASP, Av. Alexandre Colares, 1188 – Vila Jaguara.Our subsidiary Indústria e Comércio de Cosméticos Natura Ltda. inaugurated in 2001 an integrated production, logistics and research center in Cajamar, located approximately 20 kilometers from the city of São Paulo. Our Cajamar unit, called “Espaço Natura,” was designed by renowned architect Roberto Loeb, and consists of a cutting-edge manufacturing unit and a corporate space that we believe contributes to the high level of satisfaction of our employees. The plant uses modern production equipment that is designed to ensure the safety of our employees and environmental responsibility.Our subsidiary Indústria e Comércio de Cosméticos Natura Ltda. also maintains manufacturing and distribution activities in the city of Benevides (state of Pará), in a project called Ecoparque. This project concentrates the production of soaps and fixed oils of Natura, which are produced through a processing model. Ecoparque was one of the company’s investment priorities in 2013, along with the Cajamar plant expansion. Inaugurated in March 2014, Ecoparque has production capacity of 200 million soap bars and some 400 tons of fixed oils. The new plant will also absorb the production of the “noodle” base used to make soaps, which until then was produced by another plant in Benevides. The production complex is built on an area of 172 hectares and plans to receive companies from various market segments.In our International Operations, we have 5 distribution centers in Latin America and 137 Aesop stores worldwide.

Production Capacity and Expansion PotentialIn 2014, we concluded the process to expand our Cajamar unit and expanded our production capacity to 718 million units, compared to 591 million units in 2013.Our industrial development model also includes the expansion of infrastructure and capacity at Benevides and third-party facilities.

b. Patents, trademarks, licenses, concessions, franchises and technology transfer agreements of the Company, informing the (i) duration; (ii) territory covered; (iii) events that could cause loss of rights in relation to said assets; (iv) possible consequences from the loss of said rights for the Company.

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The most important intellectual property right of the Issuer is the NATURA trademark. The NATURA trademark was considered a renowned brand in 2005 by the National Institute of Industrial Property (INPI), i.e. it is a brand that enjoys undeniable knowledge and prestige, which ensured it special protection in Brazil in all branches of activities. The recognition by INPI as a highly reputed brand was renewed in 2010 and a new renewal was requested in 2015. The new renewal process is currently under analysis by INPI.In addition to Brazil, the NATURA trademark is registered in the following countries and region, among others: Argentina, Chile, Peru, Colombia, Mexico, Bolivia, France and the European Union.On April 27, 2016, the Company had 3,440 requests and trademarks registered worldwide.

In addition to the NATURA trademark, the Issuer holds the following relevant trademark registrations in Brazil:

Trademark Filing in Brazil Approval in Brazil

Countries where the brand is also registered or filed

ÁGUAS DE NATURA 1/17/2003 5/2/2007 Argentina, Bolivia, Chile, Colombia,México, Peru and European Union

AQUARELA 11/17/2003 12/22/2009 Argentina, Bolivia, Chile, Colombia,Peru

BEM ESTAR – ESTAR BEM 10/20/1992 6/10/1997 Argentina, Bolivia, Chile, Colombia and México

BIOGRAFIA 2/9/1993 6/21/1994 Argentina, Bolivia, Chile, Colombia, México and Peru

CHRONOS 7/8/1985 6/29/1993 Argentina, Bolivia, Chile, Colombia, México, Peru and European Union

CRER PARA VER 5/19/2005 2/11/2014 Argentina, Bolivia, Chile, Colombia,México, Peru and European Union

ESSENCIAL DE NATURA 8/23/1994 4/1/1997 Bolivia, Chile, Colombia, México and Peru

ESTA FLOR NATURA 7/13/2015 Awaiting publication

Argentina, Bolivia, Chile, Colombia,México and Peru

FACES NATURA 2/21/2007 4/9/2013 Argentina, Bolivia, Chile, Colombia, Peru and European Union

HORUS 12/20/1996 12/9/2003 Argentina, Bolivia, Chile and Peru

KAIAK 9/6/1994 4/1/1997 Argentina, Bolivia, Chile, Colombia, México, Peru and European Union

KRISKA 5/12/1995 1/27/2009 Argentina, Bolivia, Chile, Colombia, México and Peru

LUA DE NATURA 5/22/1998 10/31/2000 Argentina, Chile, Colombia, México, Peru

MAMÃE E BEBÊ 3/30/1992 4/4/2006 Argentina, Bolivia, Chile, Colombia, México, Peru and European Union

NATURA AMÓ 9/5/2007 1/26/2010 Argentina, Bolivia, Chile, Colombia, México, Peru and European Union

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NATURA EKOS 10/15/1999 10/28/2003 Argentina, Bolivia, Chile, Colombia, México, Peru and European Union

NATURA ERVA DOCE 9/11/2002 8/1/2007 Argentina, European Union

NATURA FOTOEQUILÍBRIO 4/19/2000 4/25/2006 Argentina, Chile, Colombia, México, Peru and European Union

NATURA HIGEIA 9/9/2010 2/25/2014 Argentina, Bolivia, Chile, Colombia, México and Peru

NATURA HOMEM 5/17/1995 10/28/1997 Argentina, Bolivia, Chile, Colombia, México, Peru and European Union

NATURA HUMOR 7/19/2005 3/25/2008 Argentina, Bolivia, Chile, Colombia, México, Peru and European Union

NATURA LUNA 9/25/2013 Awaiting publication

Argentina, Bolivia, Chile, Colombia, México and Peru

NATURA NATURÉ 5/17/2006 5/6/2008 Argentina, Bolivia, Chile, Colombia, México, Peru and European Union

NATURA PLANT 8/25/2006 6/23/2009 Argentina, Bolivia, Chile, Colombia, México, Peru and European Union

NATURA SOU NÓS 1/31/2011 7/1/2014 Argentina, Bolivia, Chile, Colombia, México and Peru

NATURA TEZ 10/29/2012 9/1/2015 Argentina, Bolivia, Chile, Colombia, México, Peru and European Union

NATURA TODODIA 5/28/2003 4/7/2015 Argentina, Colombia, Peru and European Union

NATURA UNA 2/4/2010 1/15/2013 Argentina, Bolivia, Chile, Colombia, México, Peru and European Union

NATURA VÔVÓ 6/4/2010 4/16/2013 -

REVELAR DE NATURA 10/15/1999 10/28/2003 Argentina, Bolivia, Chile, Colombia, México and Peru

REVELAR NOITE 8/13/2013 Awaiting publication

Argentina, Bolivia, Colombia, Chile, México and Peru

SEVE 2/14/1984 9/3/1985 Bolivia, Colombia, México, Peru

SOL DE NATURA 8/1/1997 12/7/1999 Argentina, Chile, México and Peru

SR N 10/10/1994 7/1/1997 Argentina, Bolivia, Chile, Colombia, México and Peru

#URBANO NATURA 10/24/2013 Awaiting publication

Argentina, Chile, Colombia, México, Peru and European Union

The trademarks are registered initially for ten years, which may be renewed for successive ten-year periods. The only event in which the registration of a trademark could be lost is in case of renewal not requested within the legal period. However, the chance of this occurring is remote, since the Issuer has a computerized system to control the expiry of registrations.

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Patents

On April 27, 2016, the Company had 419 patents granted and pending worldwide. Our patents mainly safeguard the technologies applied in our skincare products.The following table lists the most important filed on behalf of the Issuer:Official number Title Filing Concessio

nCountries into which it was extended

P 15 01 01523

ANTIPERSPIRANT DEODORANT COSMETIC COMPOSITION HAVING DERMO-CALMING ACTION

5/15/2015 USA, PCT, Argentina

P150102465

COMPOSITIONS FOR COSMETICS FORMULAS THAT INCLUDE A SELECT MIX OF MURUMURU BUTTER, UCUUBA BUTTER, BRAZIL NUT OIL, PASSION FRUIT OIL, CUPUASSU BUTTER, ACAÍ OIL AND/OR ANDIROBA OIL AND/OR ESTERS

7/31/2015 USA, PCT, Argentina

62/147.963

COMPOSITIONS FOR COSMETICS FORMULAS THAT INCLUDE UCUÚBA BUTTER WITH A HIGH CONCENTRATION OF MYRISTIC ACID, AND THE USE OF SAID FORMULATION TO PREPARE A HIGH MOISTURIZING PRODUCT AND A KIT.

4/15/2015 USA

PCT/BR2016/050048COSMETIC ANTIOXIDANT FORMULATION FOR TOPICAL USE

3/4/2016 PCT, Argentina

PI0500886-7 Process of preparation of jambu extract, use of said extract, cosmetic formulas using the extract and cosmetic products including said cosmetic formulas

3/23/2005

Brazil, Europe, Canada, USA

PI0503738-7 Locking system and bottle with said locking system

8/23/2005

Brazil, Canada, Germany, Spain, France, Italy, United Kingdom

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PI0503719-0 Cosmetic formula and process for preparing said formula

9/9/2005Brazil, Europe, Canada, USA

10 57494 High protection UVA/UVB composition and topical cosmetic composition

9/20/2010France, Europe, USA, Brazil

BR112013008659-9 High protection UVA/UVB composition, its preparation process and topical cosmetic composition

9/20/2011 4/4/2014

Brazil, Europe, USA, France

1786394 Use of cupuassu butter-based amphoteric amidoamines as amphoteric surfactants

9/9/2005 4/6/2011

France, Italy, Canada, United Kingdom, Spain, Germany, USA

13/757.302 Method for promoting sales over online social networks

2/1/2013USA

PI0409264-3 Cosmetic composition of two polysaccharides based on fucose and rhamnose 4/7/2004

Brazil, Italy, United Kingdom, France, Spain, Germany

PI9704728-7 A process for stabilizing levogyre ascorbic acid (LAA), a stable aqueous LAA composition, a process for preparing of a stable topical solution of LAA and vitamin product

9/16/1997 5/18/2010

Brazil

PCT/BR2011/000308 Cosmetic formula for use in skin makeup, and article including said formula

8/31/2011

PCT

PCT/BR2011/000306 Cosmetic formula for lips containing spherical microparticles

8/31/2011PCT

PCT/BR2011/000307 Cosmetic formula for skin (face) makeup, cosmetic product and use of babassu polysaccharides

8/31/2011

PCT

PI0921331-7 Moisturizing mixture, cosmetic and/or pharmaceutical formulas containing the moisturizing mixture, use of the moisturizing mixture and cosmetic method

11/27/2009

Brazil, USA, Canada, France, Europe

PI1103185-9 Cosmetic formulas for hair care , their uses and preparation processes, as well as methods of use

7/15/2011

Brazil

PI1103184-0 Cosmetic formulas for hair care, their uses and preparation processes, as well as methods of use

7/15/2011

Brazil

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PI9605425-5 Set for closing bottle

11/5/1996 12/10/2002

Brazil, Chile, France, Germany, Mexico, Peru, Argentina, USA, Uruguay, Venezuela

PI0921699-5 Antioxidant complex, cosmetic and pharmaceutical compositions containing said complex, and use of said complex

10/30/2009

Brazil, Europe, France, Canada, USA

PI0505786-8 Packaging composed of detachable strap and informative opening device

12/20/2005Brazil

PI0003166-6 Process for stabilizing antioxidant compounds and aqueous compositions

2/18/2000Brazil

BR112012010075-0 Cosmetic formula comprising silicone ester of sapucainha

8/27/2010Brazil, Canada, Europe

BR112012016287-0 Method for measuring the aesthetic and morphological conditions of skin and prescription of cosmetic and/or dermatological treatment

12/29/2010

Brazil, France, Europe, USA

PI0201235-9 Multiphase cosmetic composition

4/12/2002

Brazil, Portugal, United Kingdom, USA, Peru, Chile, Argentina, France, Italy, Spain

PI0916977-6 Cosmetic composition giving the matte effect, a process for preparing ucuuba butter and use of the ucuuba

7/30/2009

Brazil, Europe, France, Canada, USA

BR112012000043-8 Cosmetic composition, kit for skin treatment, method for treating oily or mixed skin or acne

6/29/2010

Brazil, Europe, France, USA, PCT

PI0402633-0 Cosmetic composition composed a vegetable-based lipid fraction and an anticrystalling agent

7/2/2004

Brazil, Argentina, Chile, Peru, Uruguay, Venezuela, USA, Canada, Germany, Spain, France, United Kingdom, Italy

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PI0401785-4 Process for preparing multiphase soap bar

3/25/2004

Brazil, Europe, Italy, United Kingdom, France, Spain, Germany, Canada, USA

PI9804596-2 Biphasic cosmetic composition

11/10/1998 12/2/2008

Brazil, Argentina, Bolivia, Chile, Colombia, Peru, Venezuela, Mexico, USA, Canada

61/239.215 and 12/604.684

Silicone modified fatty acids, method of preparation and usage thereof

10/23/2009

Brazil, Europe, Canada, USA

BR102013009302-5 Cosmetic composition for mature skin, use of said composition and product kit containing said composition. 4/16/2013

Brazil

Industrial designs

On April 27, 2016, the Company had 283 Industrial Designs granted and pending in Brazil and 616 Industrial Designs granted and pending abroad, most of which were related to fragrance bottles, containers in general and the packaging of makeup products.The following table presents the most important industrial designs registered in the Issuer’s name:Official number Title Filing Grant date Country

29/539.112ENSEMBLE OF CONTAINER 10/09/2015 USA, Europe, Brazil

29/539.115ENSEMBLE OF CONTAINER AND LID 10/09/2015 USA, Europe, Brazil

29/539.117 SPATULA 10/09/2015 USA, Europe, Brazil

29/529.355REFILL CONTAINER FOR COSMETIC PRODUCT 05/06/2015 USA, Europe, Brazil

29/529.351PACKAGE FOR COSMETICS PRODUCTS 05/06/2015 USA, Europe, Brazil

29/529.313 FLASK WITH CAP 05/06/2015 USA, Europe, BrazilDI6802163-1 Configuration applied

to bottles 5/20/2008 10/11/2011 Brazil, USA, Europe

DI6902296-8 Configuration applied to the set of container, cap and refill

6/30/2009 5/4/2010Brazil, USA, Europe

DI6403985-4 Configuration applied to bag and changing table mat

11/12/2004 1/25/2005Brazil

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601.022 Bottle and cap 1/31/2008 9/29/2009 USA, EuropeDI6702025-9 Configuration applied

to bottle 6/22/2007 2/12/2008 Brazil, Europe

BR302013002745-7 Foldable bag 3/27/2013 BrazilDI5800472-6 Sponge 4/1/1998 12/29/1998 BrazilBR302012003328-4 Configuration applied

to packaging 7/2/2012 6/25/2013 Brazil

BR302012003329-2 Configuration applied to packaging 7/2/2012 7/2/2013 Brazil

DI6702029-1 Configuration applied to bottle 6/22/2007 2/12/2008 Brazil, Europe

DI6803308-7 Configuration applied to bottle 7/22/2008 10/20/2009 Brazil, Europe, United

StatesDI6203495-2 Configuration applied

to bottle 11/6/2002 3/11/2003 Brazil, Chile, Peru, Argentina

DI6301930-2 Configuration applied to bottle and cap together

6/25/2003 8/19/2003Brazil

DI6803904-2 Configuration applied to bottle with valve 9/4/2008 9/22/2009 Brazil, USA

DI6700233-1 Configuration applied to bottle 1/22/2007 6/26/2007 Brazil

DI6002760-6 Configuration applied to bottle. 10/11/2000 3/5/2002 Brazil, Argentina, Chile,

Colombia, USADI7100562-5 Configuration applied

to packaging 1/14/2011 12/11/2012 Brazil, Europe

655.045 Configuration applied to packaging 1/14/2011 2/28/2012 USA

DI7100557-9 Configuration applied to packaging 1/14/2011 12/11/2012 Brazil, Europe, USA

DI7100560-9 Ornamental pattern applied to cosmetic packaging

1/14/2011 12/11/2012Brazil, Europe

DI7106441-9 Configuration applied to bottle 12/22/2011 11/6/2012

Brazil, Europe, USA, Canada, Japan, China, Mexico

BR302012002756-0 Configuration applied to bottle with cap 5/31/2012 2/19/2013

Brazil, Europe, Canada, Japan, China, USA, Mexico

BR302012002755-1 Configuration applied to tube 5/31/2012 2/19/2013


BR302012002754-3 Configuration applied to bottle with cap 5/31/2012 2/19/2013


BR302012002761-6 Configuration applied to bottle with cap 5/31/2012 2/19/2013 Brazil, Europe, Canada,

Japan, USA, MexicoBR302012002757-8 Configuration applied

to soap bar 5/31/2012 2/19/2013Brazil, Europe, Canada, Japan, China, USA, Mexico

BR302012002763-2 Configuration applied to fastening clip 5/31/2012 2/19/2013


BR302012005173-8 Configuration applied to bottle 10/3/2012 10/1/2013 Brazil






BR302012005175-4 Configuration applied to the set of bottle and 10/3/2012 10/1/2013 Brazil

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cylindrical capBR302012005160-6 Configuration applied

to cylindrical container 10/3/2012 10/1/2013 Brazil

BR302012005159-2 Configuration applied to cap 10/3/2012 Brazil

BR302012005166-5 Configuration applied to cap 10/3/2012 Brazil

BR302012005178-9 Configuration applied to cap 10/3/2012 10/1/2013 Brazil

BR302012005174-6 Configuration applied to the cap set 10/3/2012 10/1/2013 Brazil

BR302012005162-2 Configuration applied to valve 10/3/2012 10/1/2013 Brazil

BR302013001047-3 Configuration applied to the bottle and cap set

3/12/2013Brazil



BR302013003480-1 Bottle 7/17/2013 Brazil, United StatesDI6602283-5 Configuration applied

to bottle 7/10/2006 10/24/2006 Brazil, Europe

DI7100561-7 Configuration applied to bottle 1/14/2011 12/11/2012 Brazil, Europe, USA




DI6100244-5 Bottle 2/14/2001 6/5/2001 Brazil, Argentina, Chile, Peru



DI6300098-9 Configuration applied to the bottle and cap set

1/9/2003 5/13/2003Brazil, Bolivia, Chile, Peru, USA, Europe, Argentina

DI6803625-6 Configuration applied to bottle 8/12/2008 10/13/2009 Brazil, USA



BR302013005988-0 Bottle 11/26/2013 11/26/2013 Brazil, Europe, United States

DI6803312-5 Bottle and cap 12/5/2008 6/1/2010 Europe, United StatesBR302013005989-8 Configuration applied

to the bottle and cap set

11/26/2013Brazil, Europe, United States

c. Information about the companies in which the Company holds an equity interest

Corporate name

Indústria e Comércio de Cosméticos Natura Ltda.

Natura Inovação e Tecnologia de Produtos

Ltda.Natura Cosméticos Chile

HeadquartersVia de Acesso Km 30.5, Prédio "C", Bairro: Itaim Empresarial, Cajamar/SP

Via de Acesso Km 30.5, Prédio "A", Bairro: Itaim Empresarial, Cajamar/SP

Cordillera 321, Modulo B6, Comuna de Quilicura- Santiago, Chile

ActivitiesManufacture and sale of products, mainly of the Natura brand.

Development of products and technologies, and market research

Sale, import and export of beauty, toiletries, cleaning, cosmetics and other products.

Interest(%) 99.99% 99.99% 99.99%

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Subsidiary or associated company

Subsidiary Subsidiary Subsidiary

CVM Registry N/A N/A N/A

Book Value of Interest (R$ ‘000)

1,251,225 77,649 111,453

Dividends Received in the last three fiscal years

2013: 80,0002014: N/A2015: N/A

2013: 16,0802014: 17,0002015: N/A

2013: N/A2014: N/A2015: N/A

Purpose of acquisition or maintenance

Operating Unit Operating Unit Operating Unit

Corporate name

Natura Cosméticos S.A.Peru

Natura Cosméticos S.A.Argentina

Natura Cosméticos Ltda.Colombia

Headquarters Av. Del Ejército.801 - Miraflores - Lima - Peru

Calle Edison 2500, 2º Piso, Martínez, Provincia de Buenos Aires

Carrera 7 N. 77 – 07, Bogotá, Colombia

ActivitiesSale, import and export of beauty, toiletries, cleaning, cosmetics and other products.



Interest(%) 99.99% 99.99% 99.99%





7,970 219,273 26,170


2013: N/A2014: N/A2015: N/A

2013: N/A2014: N/A2015: N/A

2013: N/A2014: N/A2015: N/A


Operating Unit Operating Unit Operating Unit

Corporate name

Natura Distribuidora de Mexico, S.A. Natura

Cosmeticos y Servicios de Mexico, S.A. de C.V.

Natura Cosmeticos de Mexico, S.A. de C.V.

Natura (Brasil) International B.V.

Holanda

Natura Cosméticos España, S.L.

Espanha

HeadquartersHomero 823, Polanco Reforma, Mexico D.F. 11550

Prins Bernhardplein 200, 1097 JB Amsterdam, the Netherlands

Calle Gran Via de las Cortes Catalanas, 583, 5 piso, 08011, Barcelona, Espanha.

Activities


Sale, import and export of beauty, toiletries, cleaning, cosmetics and other products; holding of interest in and management of business of any nature as partner or shareholder.

Sale, import and export of beauty, toiletries, cleaning, cosmetics, clothing, home care, decoration, food, herbal and other products.

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Interest(%)

99.99% 100% 100%





(21,519) 14,298 603


2013: N/A2014: N/A2015: N/A

2013: N/A2014: N/A2015: N/A

2013: N/A2014: N/A2015: N/A


Operating Unit Holding Operating Unit

Page 97 of 293


Corporate name

Natura Biosphera Franqueadora Ltda

NaturaBrasil Pty

Ltd (*)

Natura Comercial Ltda.

Headquarters

Rua Werner Von Siemens, n° 111, prédio 11, Torre A, 15º andar, conjuntos 151 e 152, CEP 05069-010, São Paulo/SP

11 Coppin Street, Richmond VIC 3121

Rua Werner Von Siemens, n° 111, prédio 11, Torre A, 15º andar, conjuntos 151 e 152, CEP 05069-010, São Paulo/SP

ActivitiesGranting and management of business franchise, as well as other activities related to franchising.

Holding and parent company of Natura Cosmetics Austrália Pty Ltd.

Retail of Natura brand products.

Interest

(%)

99.99% 100% 99.9%


Subsidiary SubsidiarySubsidiary

CVM Registry

N/A N/A N/A


6,398 285,757 4,000


2013: N/A

2014: N/A

2015: N/A

2013: N/A

2014: N/A

2015: N/A

2013: N/A

2014: N/A

2015: N/A


Operating Unit Holding Operating Unit

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9.1 - Material noncurrent assets / 9.1.a – Property, plant and equipment

Description of Fixed Asset Country State City Type of ownershipIntegrated production, logistics and research center Brazil SP Cajamar OwnManufacturing and distribution Brazil PA Benevides OwnDistribution and logistics center Brazil SP São Paulo Own

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9.1 - Material noncurrent assets / 9.1.b. Patents, brands, licenses, concessions, franchises and technology transfer agreementsType of asset Description of

assetTerritory covered

Duration Events that could cause loss of rights

Consequence of loss of rights

Trademarks Natura trademark Brazil 5 years The Natura trademark has been considered a highly reputable brand since 2005 by the INPI, i.e. it is a brand that enjoys undeniable recognition and prestige, which ensures special protection in Brazil in all branches of activities.Apart from Brazil, the NATURA trademark is registered in the following countries, among others: Argentina, Chile, Peru, Colombia, Mexico, Bolivia, France and the European Union.

The recognition as a highly reputed brand by INPI was renewed in 2010 and is valid through 2015 (which may be extended).

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9.1 Material noncurrent assets / 9.1.c Interest held in companies

Company name Corporate Taxpayer’s (CNPJ) CVM Code Type of

Company Country State City Description of activities Issuer’s interest (%)

Fiscal Year Book value - % chg. Market cap - % chg.

Amount of dividends received (R$)

Date Value (R$)

Indústria e Com. de Cosméticos Natura Ltda.

00.190.373/0001-72 - Subsidiary Brazil SP Cajamar Manufacturing of cosmetics, fragrances and toiletries 99.990000

Market cap12/31/2015 0.000000 0.000000 0.00 Book value 12/31/2015 1,159,394,000.0012/31/2014 3.466600 0.000000 0.0012/31/2013 1.718700 0.000000 0.00Reasons for acquisition and maintenance of interestOperating unit.Natura Inovação eTecnologia de Produtos Ltda.

60.883.329/0001-70 - Subsidiary brazil SP CajamarResearch and development of new technologies and cosmetics, fragrances and toiletries

99.990000

Market cap12/31/2015 0.000000 0.000000 0.00 Book value 12/31/2015 38,686,000.0012/31/2014 10.563000 0.000000 0.0012/31/2013 13.600200 0.000000 0.00Reasons for acquisition and maintenance of interestOperating unit.

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9.2 Other material informationThere is no other information that has not yet been disclosed in other items of this Chapter.

Page 102 of 293

10. Officers' comments

10.1 The Officers must comment on: a. general financial and equity conditions

In 2015, we conducted a comprehensive strategic review of the structural aspects of our market and business. Based on the findings of this process, we defined actions focused on revitalizing our direct selling channel, streamlining our portfolio, concentrating investments in priority brands and projects and reviewing our brand position and strategy to move closer to the new profile of consumers. This process created opportunities that are bearing fruit and that, combined with the new tools and technologies offered to consultants and consumers, leave us confident that we are boosting our competitiveness and execution capacity in the industry.Regarding results, the year 2015 was marked by a sharp contrast between the results in Brazil and those in the international operations. In Brazil, the deterioration in the economic environment, the higher tax burden and the weaker local currency contributed to lower sales volume and profitability in comparison with the previous year.Meanwhile, the International Operations, which represented 29.0% of total sales, maintained their accelerated pace of growth in sales and profitability.

b. capital structure

The objectives of the Company in managing its capital are to safeguard its continued capacity to offer returns for its shareholders and benefits to other stakeholders, while maintaining an optimal capital structure for reducing these costs.

The following table shows the Company's Net Debt, which remained virtually stable in 2015 compared to 2014.

(R$ million) Fiscal year ended

IndebtednessDecember 31, 2015

December 31, 2014

December 31, 2013

Short-term borrowings and financing (2,161.4) (1,466.6) (693.1)Long-term borrowings and financing (3,374.5) (2,514.6) (2,200.8)(-) Cash and cash equivalents 2,783.7 1,696.0 1,309.3(+) Unrealized derivate gains (losses) 729.4 317.0 153.7(Net Debt)* (2,022.8) (1,968.2) (1,430.9)Leasing / Other** 336.1 292.8 197.1(Net Treasury Debt)*** 1,686.6 1,675.4 1,233.8

*Net borrowings and financing correspond to total borrowings and financing plus the unrealized derivative gains or losses less cash and cash equivalents.** Other adjustments correspond to the adjustment of the amount of borrowings with interest rates below market rates, in accordance with accounting pronouncement CPC07 – Government Grants and Assistance and non-cash impacts of mark-to-market adjustments of derivatives pegged to foreign-denominated debt.*** The criterion, defined in the Treasury policy, used to determine the powers for contracting liabilities established by the Board of Directors. Our net debt went from R$1,968.2 million in 2014 to R$2,022.8 million in 2015, remaining virtually stable between the periods. Net debt increased from R$1,968.2 million in 2014 to R$2,022.8 million in 2015, remaining virtually stable between the years.

c. ability to meet the financial obligations undertaken

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Consolidated net revenue in 2015 was R$7,899.0 million, growing 6.6% on 2014. EBITDA was R$1,495.9 million, decreasing 3.8%, with EBITDA margin of 18.9% (21.0% in 2014). Net income in 2015 was R$513.5 million, down 29.9%, with net margin of 6.5% (9.9% in 2014). At the end of fiscal year 2015, the total cash balance was R$2,783.7 million, which is higher than the amount of short-term borrowings and financing coming due. The liquidity ratio (Net Treasury Debt/EBITDA) remained virtually stable, increasing from 1.08 in 2014 to 1.13 in 2015, despite the more challenging economic scenario marked by higher interest rates, reflecting the more efficient cash management in 2015, which supported a reduction in lower working capital needs, and the reduction in capital injections compared to previous years. Pro-forma free cash flow in the year was R$818.1 million, or R$609.5 million higher than in the previous year.

Considering our debt profile, our cash flow and our liquidity position, we believe we have the capacity to honor all of our financial obligations coming due over the coming years.

d. sources of financing for working capital and for investments in non-current assets used by the Company

When needed, we raise funds through financial agreements, which are used to finance our working capital requirements and short and long-term investments, as well as for maintaining our cash at a level we deem appropriate for the execution of our activities.

On February 25, 2014, the Company conducted the 5th issue of simple non-convertible debentures, registered and unsecured of Natura Cosméticos S.A. ("Natura Cosméticos" or "Company"), amounting to R$ 600 million. A total of 60,000 debentures were issued, of which 20,000 debentures allotted in 1st series, maturing on February 25, 2017, 20,000 Debentures allocated in the 2nd series, maturing on February 25, 2018, and 20,000 allocated debentures in 3rd series, maturing on February 25, 2019, and remuneration corresponding to 107%, 107.5% and 108% of the cumulative variation of the overnight rate (CDI).On March 16, 2015, the Company carried out the 6th issue of simple, registered, book-entry, non-convertible, unsecured debentures of Natura Cosméticos S.A. in the total amount of R$ 800 million. The issue was composed of 80,000 debentures, of which 40,000 in the 1 st series, maturing on March 16, 2018, 25,000 in the 2nd series, maturing on March 16, 2019, and 15,000 in the 3rd series, maturing on March 16, 2020, and paying remuneration of 107%, 108.25% and 109% of the cumulative variation of the average daily rates of Interbank Deposits (DI), respectively.

e. sources of financing for working capital and for investments in non-current assets that the Company plans to use to cover liquidity deficiencies.

For information on the sources of financing used for working capital and for investments in noncurrent assets that we plan to use to cover liquidity deficiencies, see Sub-item (f) below.

f. debt levels and the characteristics of such debts

Our main source of debt is raising funds used to finance our investments in property, plant and equipment and working capital.

With the increase in debt, Net Treasury Debt/EBITDA ratio was 1.13 in 2015 (1.08 in 2014).In 2015, we had R$3,374.5 million in long-term borrowings and financing and R$2,161.4 million in short term borrowings and financing, and in 2014 these values were R$2,514.6

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million and R$1,466.6 million, respectively. These borrowings and financing consist primarily of obligations with funding abroad through Resolution 4131/62, financial lease agreements, debentures, Brazilian Development Bank (BNDES), FINEP (the research and project finance mechanism of the Ministry of Science and Technology) and new loans by International Operations.

The following table presents the maturity schedule of our long-term consolidated debt in 2015:

Maturity of long-term borrowings and financing Amount(R$ million)

2017 1,512.5

2018 381.5

2019 onwards 1,480.53,374.5

Our borrowings and financing include the instruments described below. Despite the existence of the borrowings and financing described below, we believe we are not dependent on third-party funds for the performance of our business, given our consistent cash generation and our financial solidity. Intermittent funding operations, especially short-term funding operations, are a typical process in our business.

i. Material borrowing and financing contracts

- Financing Contracts with the BNDES

We executed Financing Contracts upon Credit Approval with the BNDES for, among other purposes, making direct investments in the Company and optimizing certain product lines of the Company and its subsidiaries. The main financing contracts executed with the BNDES are described below.

On January 21, 2008, the Company, Indústria e Comércio de Cosméticos Natura Ltda. (“Natura Indústria”) and the BNDES executed a Financing Contract upon Credit Approval for a R$224.0 million revolving credit line, which will be used to finance investments. The credit will be amortized in consecutive monthly installments within a period to be established in the documents concerning use of the credit limit, observing the maximum term of ninety months from the date of the execution of this contract. The contracts signed to date total R$58.0 million, of which R$ 46.1 million was received, increasing the level of debt of the Company and its subsidiaries. The contracts are secured by five bank guaranties issued by Banco do Brasil S.A., which establish joint and several liability for the pecuniary obligations of Natura Indústria in the event of the non-performance of said contract, which in addition to the principal of the debt, also includes the interest, commissions, conventional penalties and other charges, until June 15, 2016.

On February 26, 2009, Natura Produtos Inovação e Tecnologia Ltda. (“Natura Inovação”) and the BNDES executed a Financing Contract upon Credit Approval in the amount of R$63.8 million, which was used for generating competencies, gathering knowledge and qualifying the research and development area of Natura Inovação. The credit will be amortized in seventy-two consecutive monthly installments, with the first due on April 15, 2010 and the last due on March 15, 2016. The contract is secured by a Bank Guaranty issued by Banco do Brasil S.A., which establishes joint and several liability for the pecuniary obligations of Natura

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Inovação in the event of the non-performance of said contract, which in addition to the principal of the debt, also includes the interest, commissions, conventional penalties and other charges, until September 15, 2016.

On July 13, 2011, Natura Cosméticos and the BNDES executed a Financing Contract upon Credit Approval in the amount of R$41.5 million, which will be used to install new information systems for optimizing the “order cycle”, develop and install a new corporate governance model in the people and materials registration process, install two new Distribution Centers located in Uberlândia/MG and Castanhal/PA and revitalize the Distribution Centers located in Matias Barbosa/MG, Jaboatão dos Guararapes/PE, Simões Filho/BA and Canoas/RS. For R$37.5 million the credit will be amortized in sixty consecutive monthly installments, with the first due on February 15, 2013 and the last due on January 15, 2018, and for R$3.9 million the credit will be amortized in sixty consecutive monthly installments, with the first due on August 15, 2012 and the last due on July 15, 2017. The contract has financial covenant clauses that establish the following financial indicators: EBITDA margin equal to or greater than 15%, Net Debt/EBITDA ratio equal to or less than 2.5.

On July 18, 2012, Natura Indústria and BNDES executed a Financing Contract upon Credit Approval in the amount of R$141.1 million, which will be used to build a soap and noodle plant in Benevides/PA, finance working capital and acquire the machinery and equipment required for this purpose. For R$12.6 million, the credit will be amortized in seventy-eight consecutive monthly installments, with the first due on May 15, 2014 and the last due on October 15, 2020, and for R$128.5 million the credit will be amortized in seventy-eight consecutive monthly installments, with the first due on March 15, 2014 and the last due on August 15, 2020. The contract has financial covenants that require the following financial indicators: EBITDA margin equal to or greater than 15%, and net debt/EBITDA ratio equal to or lower than 2.5.

On May 9, 2012, Natura Cosméticos and BNDES executed a Financing Contract upon Credit Approval in the amount of R$17.5 million, which will be used to build a distribution center plant in the Parque Anhanguera district in São Paulo and to finance the acquisition of machinery and equipment required for this purpose. For R$12.6 million, the credit will be amortized in seventy-eight consecutive monthly installments, with the first due on February 15, 2014 and the last due on July 15, 2020, and for R$4.8 million the credit will be amortized in seventy-eight (78) consecutive monthly installments, with the first due on December 15, 2013 and the last due on May 15, 2020. The contract has financial covenants that require the following financial indicators: EBITDA margin equal to or greater than 15%, and net debt/EBITDA ratio equal to or lower than 2.5.

On May 9, 2012, Natura Cosméticos and BNDES executed a Financing Contract upon Credit Approval in the amount of R$ 4.2 million, which will be used for the research and development of new products in the hair, body and soap segments, as well as for the pilot launch of a new product line. The credit will be amortized in seventy-eight consecutive monthly installments, with the first due on December 15, 2013 and the last due on May 15, 2020. The contract has financial covenants that require the following financial indicators:

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EBITDA margin equal to or greater than 15%, and net debt/EBITDA ratio equal to or lower than 2.5.

On May 9, 2012, Natura Cosméticos and BNDES executed a Financing Contract upon Credit Approval in the amount of R$ 8.6 million, which will be used for the research and development of new products in the hair, body and soap segments, as well as for the pilot launch of a new product line. The credit will be amortized in seventy-eight consecutive monthly installments, with the first due on December 15, 2013 and the last due on May 15, 2020. The contract has financial covenants that require the following financial indicators: EBITDA margin equal to or greater than 15%, and net debt/EBITDA ratio equal to or lower than 2.5.

On May 9, 2012, Natura Indústria and BNDES executed a Financing Contract upon Credit Approval in the amount of R$ 4.6 million, which will be used to import machinery and equipment not available in Brazil and which is needed for the research and development of new products in the hair, body and soap segments, as well as for the pilot launch of a new product line. For R$4.1 million, the credit will be amortized in seventy-eight consecutive monthly installments, with the first due on February 15, 2014 and the last due on July 15, 2020, and for R$0.5 thousand the credit will be amortized in seventy-eight consecutive monthly installments, with the first due on December 15, 2013 and the last due on May 15, 2020. The contract has financial covenants that require the following financial indicators: EBITDA margin equal to or greater than 15%, and net debt/EBITDA ratio equal to or lower than 2.5 (two point five).

On August 13, 2013, the Natura Cosméticos, Natura Indústria, Natura Inovação and the BNDES executed a financing agreement for a revolving credit facility of R$600.0 million, which will be used to finance investments. The loan will be amortized in consecutive monthly installments within a period to be established in the documents concerning use of the credit limit, subject to the maximum term of sixty months from the date of signing of the agreement. The agreements total R$59.8 million on this date. The agreements are guaranteed by Natura Cosméticos S.A., with joint and several liability for the pecuniary obligations of Natura Indústria and Natura Inovação in case of default on said agreement, which covers the principal as well as interest, commissions, conventional penalties and other charges. The agreement has restrictive covenants that establish the following financial indicators: EBITDA margin equal to or greater than 15%, and net debt/EBITDA ratio equal to or lower than 2.5.

On September 13, 2013, Natura Cosméticos and the BNDES signed a financing agreement for R$37.3 million, whose funds will be used to implement the first phase of the project to connect Natura to its consultants and final consumers electronically. The loan will be amortized in seventy-two consecutive monthly installments, with the first installment due on October 15, 2015 and the final installment due on September 15, 2021. The agreement has

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restrictive covenants that establish the following financial indicators: EBITDA margin equal to or greater than 15%, and net debt/EBITDA ratio equal to or lower than 2.5.

- FINAME - Financiamento de Máquina e Equipamentos (Machinery and Equipment Financing)

Natura Indústria is the beneficiary of a credit line contracted from the BNDES for the onlending of FINAME operations, which are loans for financing the acquisition of domestically produced new machinery and equipment granted by the BNDES. This onlending operation is made by grating credit to Natura Indústria, generating disbursement rights via the financial institution accredited as the financial agent, which typically has been Banco Itaú Unibanco S.A. and Banco do Brasil S.A., which contract with Natura Indústria said financing operations.

From 2011 to 2015, Natura Cosméticos and Natura Indústria executed 55 fixed loan contracts with the banks cited above to finance machinery and equipment in the total amount of R$29.3 million, which had similar terms and conditions. These contracts are secured by transferring the fiduciary ownership of the assets described in the respective contracts. Natura Indústria is the trustee of these assets, with Natura Cosméticos as surety. Additionally, Natura Cosméticos and its subsidiaries must comply with the Applicable Provisions of the BNDES Contracts and the General Regulatory Conditions of Operations for FINAME operations.

- Financiamento de Máquina e Equipamentos (FINEP) Financing Contract

The Company has innovation programs for developing and acquiring new technologies through partnerships with universities and research centers in Brazil and abroad. These innovation programs are supported by programs to promote research and technological development, including those from Financiamento de Máquina e Equipamentos - FINEP (the research and project finance mechanism of the Ministry of Science and Technology), which finances and/or co-finances equipment, scientific scholarships and research materials for participating universities.

On December 29, 2010, Natura Inovação and FINEP executed a Financing Contract in the amount of R$74.2 million, which will be used to partially cover the expenses incurred in preparing the project “Research and Innovation for the Development of New Cosmetic Products”. The credit will be amortized in eighty-one consecutive monthly installments, with the first due on September 15, 2012 and the last due on May 15, 2019. The contract is secured by Natura Cosméticos, which establishes joint and several liability for the pecuniary obligations of Natura Inovação in the event of the non-performance of said contract.

On December 6, 2013, Natura Inovação and FINEP signed a financing agreement in the amount of R$205.8 million, to finance technological innovation in a systematic manner, resulting in expanded innovation capacity through investments in tangible assets, including physical infrastructure, and intangible assets. The credit will be amortized in eighty-one consecutive monthly installments, with the first due on June 15, 2023 and the last due on June 15, 2019. The contract is secured by Natura Cosméticos, which establishes joint and several liability for the pecuniary obligations of Natura Inovação in the event of the non-performance of said contract.

- Resolution 4,131 and Derivative Financial Instruments

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Letter of Credit (Cédula de Crédito Bancário - CCB) – Onlending of Funds Raised Offshore via Resolution 4,131/62 contracted from Financial Institutions. The contracts in force are listed below:

Letter of Credit (CCB) - Onlending of Funds Raised Offshore via Resolution 4,131/62 contracted from Bank of America on March 6, 2015 with maturity on January 25, 2018 and principal of R$290,000,000.00. The interest is amortized quarterly and the principal in four installments, with the first due on July 25, 2016, the second on January 25, 2017, the third on July 25, 2017 and the last on January 25, 2018.Letter of Credit (CCB) - Onlending of Funds Raised Offshore via Resolution 4,131/62 contracted from Bank of America on February 18, 2015 with maturity on October 25, 2017 and principal of R$90,083,338.00. The interest is amortized quarterly and the principal in four installments, with the first due on April 25, 2016, the second on October 25, 2016, the third on April 25, 2017 and the last on October 25, 2017.Letter of Credit (CCB) - Onlending of Funds Raised Offshore via Resolution 4,131/62 contracted from Scotiabank on September 29, 2015 with maturity on September 25, 2017 and principal of R$399,500,000.00. The interest is amortized semiannually and the amount will be settled in a Treasury account at the end of the contract.Letter of Credit (CCB) - Onlending of Funds Raised Offshore via Resolution 4,131/62 contracted from HSBC on April 7, 2015 with maturity on April 7, 2017 and principal of R$312,960,000.00. The interest is amortized quarterly and the amount will be settled in a Treasury account at the end of the contract

Letter of Credit (CCB) - Onlending of Funds Raised Offshore via Resolution 4,131/62 contracted from Bank of America on October 11, 2013 with maturity on October 11, 2016 and principal of R$190,875,207.07. The interest is amortized quarterly and the principal in two semiannual installments, with the first due on April 11, 2016 and the last due on October 11, 2016.

Letter of Credit (CCB) - Onlending of Funds Raised Offshore via Resolution 4,131/62 contracted from Bank of America on October 31, 2013 with maturity on October 31, 2016 and principal of R$95,745,009.41. The interest is amortized quarterly and the principal in two semiannual installments, with the first due on May 3, 2016 and the last due on October 31, 2016.

Letter of Credit (CCB) - Onlending of Funds Raised Offshore via Resolution 4,131/62 contracted from Banco de Tókyo on August 1, 2013 with maturity on August 1, 2016 and principal of R$160,580,000.00. The interest is amortized quarterly and the amount will be settled in a Treasury account at the end of the contract.

Letter of Credit (CCB) - Onlending of Funds Raised Offshore via Resolution 4,131/62 contracted from Banco Bradesco on September 22, 2014 with maturity on September 22, 2016 and principal of R$177,420,000.00. The interest is amortized quarterly and the amount will be settled in a Treasury account at the end of the contract.

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Letter of Credit (CCB) - Onlending of Funds Raised Offshore via Resolution 4,131/62 contracted from Banco HSBC on October 27, 2014 with maturity on October 27, 2016 and principal of R$107,517,200.00. The interest is amortized quarterly and the amount will be settled in a Treasury account at the end of the contract.

Letter of Credit (CCB) - Onlending of Funds Raised Offshore via Resolution 4,131/62 contracted from Banco HSBC on October 27, 2014 with maturity on October 27, 2016 and principal of R$55,008,800.00. The interest is amortized quarterly and the amount will be settled in a Treasury account at the end of the contract.

Letter of Credit (CCB) - Onlending of Funds Raised Offshore via Resolution 4,131/62 contracted from Bank of America on November 25, 2014 with maturity on November 25, 2017 and principal of R$86,666,666.66 million. The interest is amortized quarterly and the principal in four semiannual installments, with the first due on April 25, 2016 and the last due on October 25, 2017.

- NCE – Export Credit Note

Letter of Credit (CCB) as working capital for exporters, taken from financial institutions. The contracts in force are listed below:

Letter of Credit (CCB) as working capital for exporters, taken from Banco Santander on August 18, 2014, with maturity on August 15, 2017, and principal of R$5,000,000.00. The interest is amortized semiannually and the amount will be settled in a Treasury account at the end of the contract.

Letter of Credit (CCB) as working capital for exporters, taken from Banco Itaú on August 2, 2013, with maturity on August 1, 2016 and principal of R$10,000,000.00. The interest is amortized quarterly and the amount will be settled in a Treasury account at the end of the contract.Letter of Credit (CCB) as working capital for exporters, taken from Banco HSBC on February 7, 2013, with maturity on February 5, 2016 and principal of R$50,000,000.00. The interest is amortized semiannually and the amount will be settled in a Treasury account at the end of the contract.

Letter of Credit (CCB) as working capital for exporters, taken from Banco Itaú on February 4, 2013, with maturity on February 10, 2016 and principal of R$100,000,000.00. The interest is amortized quarterly and the amount will be settled in a Treasury account at the end of the contract.

Letter of Credit (CCB) as working capital for exporters, taken from Banco Itaú on March 7, 2013, with maturity on March 7, 2016 and principal of R$17,500,000.00. The interest is

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amortized quarterly and the amount will be settled in a Treasury account at the end of the contract.

Letter of Credit (CCB) as working capital for exporters, taken from Banco do Brasil on May 14, 2014, with maturity on May 5, 2017 and principal of R$70,000,000.00. The interest is amortized quarterly and the amount will be settled in two installments, the first one due on May 5, 2016 and the last one due on May 5, 2017.

- Operations with derivatives

The operations with derivatives contracted by the Company are basically swaps and Non Deliverable Forwards (NDF) that seek exclusively to mitigate the currency translation and interest risks associated with positions on the balance sheet and the projected cash flows in foreign currencies. The main contracts for the swap operations contracted are described below.

On March 6, 2015, the Company and Bank of America executed a Swap Contract to hedge against currency translation impacts for the loans contracted under the scope of Resolution 4,131/62 in the amount of R$290 million, with the specified settlement date of January 25, 2018.

On February 18, 2015, the Company and Bank of America executed a Swap Contract to hedge against currency translation impacts for the loans contracted under Resolution 4,131/62 in the amount of R$90 million, with the settlement date scheduled for October 25, 2017.On September 25, 2015, the Company and Scotiabank executed a Swap Contract to hedge against currency translation impacts for the loans contracted under Resolution 4,131/62 in the amount of R$399.5 million, with the settlement date scheduled for September 25, 2017.

On April 7, 2015, the Company and HSBC executed a Swap Contract to hedge against currency translation impacts for the loans contracted under Resolution 4,131/62 in the amount of R$312.9 million, with the settlement date scheduled for April 7, 2017.

On August 1, 2013, the Company and Banco de Tokyo executed a Swap Contract to hedge against currency translation impacts for the loans contracted under the scope of Resolution 4,131/62 in the amount of R$160.6 million, with the specified settlement date of August 1, 2016.

On September 22, 2014, the Company and Banco HSBC executed a Swap Contract to hedge against currency translation impacts for the loans contracted under the scope of Resolution 4,131/62 in the amount of R$177.4 million, with the specified settlement date of September 22, 2016.On October 27, 2014, the Company and Banco HSBC executed a Swap Contract to hedge against currency translation impacts for the loans contracted under the scope of Resolution 4,131/62 in the amount of R$107.5 million, with the specified settlement date of October 27, 2016.

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On October 27, 2014, the Company and Banco HSBC executed a Swap Contract to hedge against currency translation impacts for the loans contracted under the scope of Resolution 4,131/62 in the amount of R$55.0 million, with the specified settlement date of October 27, 2016.On October 11, 2013, the Company and Bank of America executed a Swap Contract to hedge against currency translation impacts for the loans contracted under the scope of Resolution 4,131/62 in the amount of R$190.9 million, with the specified settlement date of October 11, 2016.On October 31, 2013, the Company and Bank of America executed a Swap Contract to hedge against currency translation impacts for the loans contracted under the scope of Resolution 4,131/62 in the amount of R$95.7 million, with the specified settlement date of October 31, 2016.On November 25, 2014, the Company and Bank of America executed a Swap Contract to hedge against currency translation impacts for the loans contracted under the scope of Resolution 4,131/62 in the amount of R$86.6 million, with the specified settlement date of November 25, 2017.On August 2, 2013, the Company and Banco Itaú executed a Swap Contract to hedge against interest rate risks for the NCE loans in the amount of R$10.0 million, with the specified settlement date of August 1, 2016.On February 4, 2013, the Company and Banco Itaú executed a Swap Contract to hedge against interest rate risks for the NCE loans in the amount of R$100.0 million, with the specified settlement date of February 10, 2016.On March 7, 2013, the Company and Banco Itáu executed a Swap Contract to hedge against interest rate risks for the NCE loans in the amount of R$17.5 million, with the specified settlement date of March 7, 2016.On February 7, 2013, the Company and Banco HSBC executed a Swap Contract to hedge against interest rate risks for the NCE loans in the amount of R$50.0 million, with the specified settlement date of February 5, 2016.On August 18, 2014, the Company and Banco Santander executed a Swap Contract to hedge against interest rate risks for the NCE loans in the amount of R$5.0 million, with the specified settlement date of August 18, 2017.On April 13, 2010, the Company and HSBC Bank Brasil S.A. executed a Cash Flow Swap and Forward Cash Flow Swap Contract in the amount of R$2.9 million, with the specified settlement date of February 15, 2017.On April 13, 2010, Natura Indústria and HSBC Bank Brasil S.A. executed a Cash Flow Swap and Forward Cash Flow Swap Contract in the amount of R$1.7 million, with the specified settlement date of April 15, 2016.On January 15, 2014, the Company and Bank of America executed a Cash Flow Swap and Forward Cash Flow Swap Contract in the amount of R$5.1 million, with the specified settlement date of July 15, 2020.On April 15, 2013, the Company and Bank of America executed a Cash Flow Swap and Forward Cash Flow Swap Contract in the amount of R$1.6 million, with the specified settlement date of April 17, 2017

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On April 15, 2013, the Company and Bank of America executed a Cash Flow Swap and Forward Cash Flow Swap Contract in the amount of R$1.2 million, with the specified settlement date of April 17, 2017On January 15, 2014, the Company and Bank of America executed a Cash Flow Swap and Forward Cash Flow Swap Contract in the amount of R$5.2 million, with the specified settlement date of July 15, 2020.On January 17, 2014, the Company and Bank of America executed a Cash Flow Swap and Forward Cash Flow Swap Contract in the amount of R$1.5 million, with the specified settlement date of July 15, 2020On January 15, 2014, the Company and Bank of America executed a Cash Flow Swap and Forward Cash Flow Swap Contract in the amount of R$4.4 million, with the specified settlement date of July 15, 2020.On August 15, 2014, the Company and Bank of America executed a Cash Flow Swap and Forward Cash Flow Swap Contract in the amount of R$5.7 million, with the specified settlement date of October 15, 2020.On July 16, 2012, the Company and Bank of America executed a Cash Flow Swap and Forward Cash Flow Swap Contract in the amount of R$1.6 million, with the specified settlement date of July 17, 2017On January 15, 2013, the Company and Bank of America executed a Cash Flow Swap and Forward Cash Flow Swap Contract in the amount of R$2.2 million, with the specified settlement date of January 15, 2018.On January 15, 2015, the Company and Bank of America executed a Cash Flow Swap and Forward Cash Flow Swap Contract in the amount of R$2.7 million, with the settlement date scheduled for January 15, 2020.On July 15, 2015, the Company and Bank of America executed a Cash Flow Swap and Forward Cash Flow Swap Contract in the amount of R$8.9 million, with the settlement date scheduled for July 15, 2021.

ii. Other long-term relations with financial institutions

Except for the aforesaid operations, we do not have any other material long term relations with financial institutions.

iii. Degree of subordination of debt

There is no subordination of our debts.

iv. Restrictions imposed on debt limits and contracting new debt, dividend distributions, asset divestments, issuing new securities and transfer of control.

In 2015 and 2014, most of the borrowing and financing contracts maintained by the Company and its subsidiaries do not contain financial covenants obligating the Company and its subsidiaries to maintain certain financial ratios.

The contracts signed with the BNDES after July 2011 contained financial covenant clauses that required the following financial ratios, which are measured annually:

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- EBITDA margin equal to or greater than 15%; and- Net Debt/EBITDA ratio equal to or less than two point five (2.5).

In 2015, the Company fully complied with all financial covenant clauses.

The loans from the BNDES are formalized through financing contracts with the opening of a credit facility and are subject to the “Provisions Applicable to BNDES Contracts”. According to the “Provisions Applicable to BNDES Contracts”, borrowers of BNDES loans, including the Company, may not, without prior authorization from the BNDES: (i) give preference to other credits; (ii) amortize shares; (iii) issue debentures; (iv) issue profit-sharing bonds; (v) contract new debt (with certain exceptions expressly stated in the “Provisions Applicable to BNDES Contracts”); and (vi) divest or pledge its permanent assets.

g. limits of borrowings contracted and percentages already used

Of the contracts effectively entered into with FINEP and BNDES, the following disbursements are pending for 2016:

FINEP: R$22.4 million, which was already disbursed in January 2016 and, therefore, was 100% used.

BNDES: R$5.7 million. Yet to be used.

h. significant changes in each item of the financial statements

Summary of the financial statements

According to our management, the Company's annual financial statements accurately portray the financial and equity positions and operating results for the periods stated.

Presentation of financial statements

For a better understanding and analysis of the financial statements and any other related accounting information, the following aspects regarding their preparation and presentation:

Fiscal years ended in 2015, 2014 and 2013.

The balance sheets (parent company and consolidated) prepared in 2015, 2014 and 2013 and respective statements of income (parent company and consolidated), of comprehensive income (parent company and consolidated), of changes in shareholders' equity (parent company and consolidated), of cash flow (parent company and consolidated) and of value added (parent company and consolidated) for the fiscal years ending in 2015, 2014 and 2013 were prepared in accordance with the accounting practices adopted in Brazil and the International Financial Reporting Standards (IFRS) and regulations of the Securities and Exchange Commission of Brazil (CVM), including CVM Resolution 603/09.

The independent auditor’s report on the financial statements (parent company and consolidated) for fiscal year 2015 does not contain an emphasis of matter paragraph as it did in fiscal year 2013. In the fiscal year 2013, the emphasis of matter paragraph regarded the fact that the individual financial statements were prepared in accordance with Generally Accepted Accounting Principles in Brazil (BR GAAP), which means the investments in subsidiaries, affiliates and shared-control companies were valued using the equity method, and that these practices differed from IFRS, under which these investments are stated at historical cost or fair value.

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As of fiscal year 2014, with the issue of pronouncement IAS 27 (Separate Financial Statements) revised by IASB in 2014, the separate financial statements in accordance with IFRS may now use the value investments in subsidiaries, affiliates and joint ventures using the equity method of accounting. In December 2014, CVM issued Resolution no. 733/2014, which approved the Technical Pronouncement Revision Document no. 7 referring to Pronouncements CPC 18, CPC 35 and CPC 37 issued by the Accounting Pronouncements Committee, welcoming said amendment to IAS 27 and allowing its adoption as from the fiscal years ended December 31, 2014. Therefore, the parent company's individual financial statements are now in compliance with IFRS.

The financial statements related to fiscal years 2015, 2014 and 2013 were audited by Ernst & Young Auditores Independentes S.S., in accordance with the applicable audit standards in Brazil.

Income Statements, Balance Sheets and Additional Financial Information

The following income statements, balance sheets and additional consolidated financial information for the periods indicated:

Fiscal year ended December 31,2015 AV (1) 2014 VA (1) Chg.

2015/2014(R$ million, except earnings per share for the year)

7,899.0 100.0% 7,408.4 100.0% 6.6%Net revenueCost of goods sold (2,416.0) 30.6% (2,250.1) 30.4% 7.4%Gross profit 5,483.0 69.4% 5,158.3 69.6% 6.3%Operating (Expenses) IncomeSelling, marketing and logistics expenses (2,998.8) 38.0% (2,680.1) 36.2% 11.9%Administrative, R&D. IT and Projects expenses (1,293.2) 16.4% (1,133.3) 15.3% 14.1%Equity in subsidiaries - 0.0% - 0.0% 0.0%Other operating (expenses) income, net 65.8 0.8% 19.8 0.3% 232.3%Operating profit before financial income (loss) 1,256.8 15.9% 1,364.7 18.4% -7.9%Financial income 1,927.2 24.4% 703.8 9.5% 173.8%Financial expenses (2,308.6) 29.2% (972.1) 13.1% 137.5%Income before income tax and social contribution 875.4 11.1% 1,096.4 14.8% -20.2%Income tax and social contribution (352.6) 4.5% (355.2) 4.8% -0.7%Net income for the fiscal year 522.7 6.6% 741.2 10.0% -30.7%

Attributable to:Shareholders of the Company 513.5 6.5% 732.8 9.9% -29.9%Non-controlling shareholders 9.2 8.4 9.5%Earnings per share for the year – R$ 1.1934 1.7064 -30.1% (1) Vertical Analysis

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Fiscal year ended December 31,2014 VA (1) 2013 (2) VA (1) Chg.

2014/2013(R$ million, except earnings per share for the year)

7,408.4 100.0% 7,010.3 100.0% 5.7%Net revenueCost of goods sold (2,250.1) 30.4% (2,111.1) 30.1% 6.6%Gross profit 5,158.3 69.6% 4,899.2 69.9% 5.3%Operating (Expenses) IncomeSelling, marketing and logistics expenses (2,680.1) 36.2% (2,449.4) 34.9% 9.4%Administrative, R&D, IT and Projects expenses (1,133.3) 15.3% (1,042.6) 14.9% 8.7%Equity in subsidiaries - 0.0% - 0.0% 0.0%Other operating (expenses) income, net 19.8 0.3% 8.9 0.1% 122.5%Operating profit before financial income (loss) 1,364.7 18.4% 1,416.0 20.2% -3.6%Financial income 483.8 6.5% 364.2 5.2% 32.8%Financial expenses (752.1) 10.2% (522.5) 7.5% 43.9%Income before income tax and social contribution 1,096.4 14.8% 1,257.8 17.9% -12.8%

Income tax and social contribution (355.2) 4.8% (409.9) 5.8% -13.3%Net income for the fiscal year 741.2 10.0% 847.8 12.1% -12.6%

Attributable to:Shareholders of the Company 732.8 9.9% 842.6 12.0% -13.0%Non-controlling shareholders 8.4 5.2 - 61.5%Basic earnings per share for the year – R$ 1.7064 1.9618 -13.0% (1) Vertical Analysis

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Balance sheets prepared in 2015, 2014 and 2013

The following tables present a summary of the consolidated Balance Sheets prepared in 2015, 2014 and 2013, as well as the variations occurring between the periods presented:

Fiscal year ended December 31,Balance Sheet 2015 VA (1) 2014 VA (1) 2013 VA (1) Chg. Chg.

15/14 14/13(R$ million)

AssetsCurrent assetsCash and cash equivalents 1,591.8 16.9% 1,164.2 16.2% 1,002.9 16.1% 36.7% 16.1%

Marketable securities 1,191.8 12.7% 531.8 7.4% 306.4 4.9% 124.1% 73.6%

Trade accounts receivable 909.0 9.7% 847.5 11.8% 807.0 12.9% 7.3% 5.0%Inventories 963.7 10.3% 890.0 12.4% 799.5 12.8% 8.3% 11.3%Recoverable taxes 320.4 3.4% 240.3 3.3% 181.1 2.9% 33.3% 32.7%Derivative financial instruments 734.5 7.8% 317.0 4.4% 153.6 2.5%

131.7% 106.4%

Other current assets 307.5 3.3% 248.5 3.5% 262.4 4.2% 23.7% -5.3%Total current assets 6,018.7 64.1% 4,239.3 58.9% 3,512.9 56.2% 42.0% 20.7%Noncurrent assets Recoverable taxes 289.4 3.1% 182.7 2.5% 175.1 2.8% 58.4% 4.3% Deferred Income and Social Contribution taxes 212.6 2.3% 147.7 2.1% 193.8 3.1% 43.9% -23.8%Escrow deposits 287.8 3.1% 263.3 3.7% 412.4 6.6% 9.3% -36.2%Other noncurrent assets 17.6 0.2% 85.6 1.2% 37.2 0.6% -79.4% 130.1%Property, plant and equipment 1,752.4 18.7% 1,672.1 23.2% 1,439.7 23.0% 4.8% 16.1%Intangible assets 816.5 8.7% 609.2 8.5% 477.3 7.6% 34.0% 27.6%Total noncurrent assets 3,376.3 35.9% 2,960.8 41.1% 2,735.4 43.8% 14.0% 8.2%Total assets 9,395.0 100.00% 7,200.1 100.0% 6,248.3 100.0% 30.5% 15.2%

Fiscal year ended December 31,Balance Sheet 2015 VA (1) 2014 VA (1) 2013 VA (1) Chg. Chg.

15/14 14/13(R$ million)

LiabilitiesCurrent liabilitiesBorrowings and financing 2,161.4 23.0% 1,466.6 23.5% 693.1 11.1% 47.4% -30.7%Trade and other payables 802.9 8.6% 599.6 9.6% 706.6 11.3% 33.9% 8.7%Payroll, profit sharing and related taxes 201.2 2.1% 210.5 3.4% 177.6 2.8% -4.4% -16.1%Taxes payable 1,048.0 11.2% 715.5 11.5% 659.3 10.6% 46.5% 31.5%Provision for acquisition of interest from non-controlling shareholders 190.7 2.0% 48.2 0.8% - -

295.6% n/a

Other liabilities 168.8 1.8% 78.5 1.3% 90.2 1.4% 115.0% 73.3%

Total current liabilities 4,572.9 48.7%3,119.

0 49.9% 2,326.8 37.2% 46.6% -3.6%

Noncurrent liabilitiesBorrowings and financing 3,374.5 35.9% 2,514.6 40.2% 2,200.8 35.2% 34.2% 68.1%Taxes payable 87.7 0.9% 99.0 1.6% 215.6 3.5% -11.4% 21.6%Deferred income tax and social contribution 34.1 0.4% - - - - n/a -Provision for tax, civil and labor risks 77.9 0.8% 75.7 1.2% 73.8 1.2% 2.9% 16.6%Provision for acquisition of interest from non-controlling shareholders - - 97.2 1.6% 141.6 2.3% n/a n/aOther provisions 170.1 1.8% 145.8 2.3% 121.3 1.9% 16.7% 15.7%

Total noncurrent liabilities 3,744.3 39.9%2,932.

4 46.9%2,753.

2 44.1% 27.7% 66.4%Shareholders' EquityCapital 427.1 4.6% 427.1 6.8% 427.1 6.8% 0.0% 0.0%Treasury stock -37.9 -0.4% (37.9) -0.6% (84.0) -1.3% 0.0% 27.1%Capital reserves 134.7 1.4% 137.3 2.2% 150.4 2.4% -1.9% -3.5%

Earnings reserves 409.5 4.4% 189.3 3.0% 162.6 2.6%116.3

% -47.8%Proposed additional dividend 123.1 1.3% 449.3 7.2% 496.4 7.9% -72.6% 1.0%Asset valuation adjustment -28.3 -0.3% (41.4) -0.7% (6.9) -0.1% -31.6% -78.7%

Non-controlling interest 49.6 0.5% 24.5 0.4% 22.6 0.4%102.4

% n/a

Total shareholders' equity 1,077.8 11.5%1,148.

7 18.4%1,168.

3 18.7% -6.2% -9.3%Total liabilities and shareholders' equity 9,395.0

100.0%

7,200.1

100.0%

6,248.3

100.0% 30.5% 16.6%

(1) Vertical analysis.(2) The impacts of each new standard and amendment are described below:

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(i) Comparison of the operating results in fiscal years 2015 and 2014

Gross revenueGross revenue reached R$10,806.5 million in 2015, an increase of 8.6% from the R$9.950.3 million posted in 2014, primarily due to the accelerated growth of International Operations.The following table presents a breakdown of our gross revenue by segment:

Gross revenue breakdown (in millions of Brazilian real - R$) Fiscal year ended

Change 2015/2014 (%)

December 31, 2015

December 31, 2014

Domestic market 7,885.0 8,181.7 -3.6%Export market - International Operations (1) 2,917.4 1,767.1 65.1%Other domestic sales (2) 4.1 1.5 173.3%Gross revenue 10,806.5 9,950.3 8.6%

(1) Sales made by the subsidiaries in Argentina, Chile, Colombia, France, Mexico, Peru and Australia.(2) Sales of scrap.

_Domestic sales

In Brazil, where gross revenue amounted to R$7.89 billion, down 3.6% from 2014, the Cosmetics, Fragrances and Toiletry industry posted its first year of negative growth in 23 years, according to Abihpec._Sales in international markets

Our International Operations posted net revenue growth of 65.1% in Brazilian real compared to 2014, underlining robust and consistent expansion and margin improvement. In LATAM, we closed the year with 505,000 consultants (+19.5% vs. 2014), revenue of R$2.4 billion (+62.9% vs. 2014 in Brazilian real and +30.4% in local currency). Aesop ended the quarter with 135 stores in 18 countries (98 stores in 14 countries in Dec/14), maintaining its strong growth in revenue and EBITDA. In June 2015, we opened the first store in Brazil, at Rua Oscar Freire in São Paulo, with positive initial results.Sales tax, returns and cancellations.Sales tax, returns and deductions were R$2,907.5 million in 2015 (R$2,541.9 million in 2014), increasing 14.41% mainly due to the higher revenue and greater tax burden in 2015.

Net revenueThe Company’s net revenue was R$7,899.0 million in 2015, up 6.6% from the net revenue of R$7,408.4 million in 2014.

Cost of goods soldCost of goods sold was R$2,416.0 million in 2015, increasing 7.4% from the cost of goods sold of R$2,250.1 million in 2014.The following table presents the components of cost of goods sold for the periods indicated and the annual variation in each component:

(in millions of Brazilian real - R$) Fiscal year Change 2015/2014

(%)2015 2014Raw material for products and packaging(1) and resale products(2)) 1,936.5 1,822.5 6.3%Labor 213.0 211.9 0.5%Depreciation 79.1 61.1 29.5%Other costs (3) 187.4 154.6 21.2%

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Cost of goods sold 2,416.0 2,250.1 7.4%(1) Mainly plastics, glass, printing and fragrances.(2) Products made by third parties, soaps, hair care products, etc.(3) “Other costs” includes electricity, water, gas, consulting services, IT services and other items.As a ratio of net revenue, our cost of goods sold increased to 30.6% in 2015, compared to 30.4% in 2014. The increase was mainly due to the depreciation of the Brazilian real against the U.S. dollar and higher production costs.

Gross profitOur gross profit increased 6.3% in 2015 to R$5,483.0 million, compared to gross profit of R$5,158.3 million in 2014. Gross margin decreased to 69.4% in 2015, from 69.6% in 2014.

Operating income (expenses) Operating expenses were R$4,226.2 million in 2015, for an increase of 11.4% from the operating expenses of R$3,793.6 million in 2014.This following table presents the composition of our operating expenses (income) for the periods indicated and the variation in each component:

(in millions of Brazilian real - R$) Fiscal year ended Change2015 2014 15/14 (%)

Selling, marketing and logistics expenses 2,998.8 2,680.1 11.9%Administrative, R&D, IT and Projects expenses 1,293.2 1,133.3 14.1%Other net operating expenses (income) -65.8 -19.8 232.3%Net operating expenses 4,226.2 3,793.60 11.4%

_Selling, marketing and logistics expenses

Selling, marketing and logistics expenses increased from R$2,680.1 million in 2014 to R$2,998.8 million in 2015. As a ratio of net revenue, the item increased to 38.0% in 2015, compared to 36.2% in 2014. Selling, marketing and logistics expenses remained aligned with the Company’s strategy and consistent with the competitive environment. In 2015, the increase in expenses was due to the continuity of competitive marketing investments. _Administrative, R&D, IT and Projects expenses

Administrative, R&D, IT and Projects expenses increased from R$1,133.3 million in 2014 to R$1,293.2 million in 2015, up 14.1% from 2014. As a ratio of net revenue, the item increased from 15.3% in 2014 to 16.4% in 2015. The increase in administrative expenses in relation to the prior year is due to the investments in innovation, strategic projects and depreciation and amortization expenses._Other net operating income (expenses)

Other net operating income (expenses) increased from income of R$19.8 million in 2014 to income of R$65.8 million in 2015. The growth is mainly due to the increase of R$45.1 million referring to the reclassification of interest and subsidized loans from financial result for this item, in accordance with accounting pronouncement CPC 07, and a positive result of R$41.3 million referring to divestment of property, plant and equipment, partially offset by a negative result of R$19.3 million referring to the allocation of operating results of the “Crer para Ver” project to Natura Institute.

Net financial income (expenses)The Company recorded a net financial expense of R$381.4 million in 2015, compared to the net financial expense of R$268.3 million in 2014.The financial expense increased to R$2,308.6 million in 2015, compared to R$972.1 million in

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2014. This increase was mainly due to the marking to market of derivatives, higher debt and the adjustment in the provision for the additional acquisition of capital in Emeis Holdings Pty Ltd.Financial income increased to R$1,927.2 million in 2015, from R$703.8 million in 2014. This variation is explained by the increase in gains from derivative operations contracted to provide a currency hedge against the Company’s exposure in foreign currencies, as well as the increased yield from financial investments.Most of the debts contracted in foreign currency have derivative operations contracted to eliminate from the financial result the effects of currency translation that offset any decreases in financial income and any increases in financial expenses. In practice, the variation in the CDI interbank overnight rate serves as the reference for our debt profile.

Income tax and social contribution tax (CSLL)Income tax and social contribution tax (CSLL) decreased to R$352.6 million in 2015, from R$355.2 million in 2014. The variation in expenses with income tax and social contribution was directly driven by the operating income (loss) in the period. The effective rate in 2015 was 40.3%, significantly higher than the 32.4% in 2014, due to the permanent effect from the adjustments to the commitment undertaken to acquire additional capital in Emeis Holdings Pty Ltd., the expenses for which are added to the profit when determining income and social contribution taxes.

Net incomeIn view of the aforementioned reasons, our net income before non-controlling interest decreased to R$522.7 million in 2015 (6.6% of net revenue), compared to R$741.2 million in 2014 (10.1% of net revenue).

Other information and non-accounting measures_EBITDA

In view of the aforementioned results, EBITDA reached R$1,495.9 million in 2015, representing a reduction of 3.8% compared to EBITDA of R$1,554.5 million in 2014. Our EBITDA margin was 18.9% in 2015, compared to 21.0% in 2014. The following table presents a conciliation of net income with EBITDA for the periods indicated.

(in millions of Brazilian real - R$) Fiscal year2015 2014 Change 2015/2014 (%)

Net income 513.5 732.8 -29.9% (+) Depreciation and amortization 239.2 189.8 26.0% (+) Net financial income (expenses) 381.4 268.3 42.2% (+) Income tax and social contribution tax (CSLL) 352.6 355.2 -0.7%(+) Non-controlling interest 9.2 8.4 9.5%EBITDA 1,495.90 1,554.5 -3.8%

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(ii) Comparison of the operating results in the fiscal years ended in 2014 and 2013

Gross revenueGross revenue reached R$9,950.3 million in 2014, an increase of 5.3% from the R$9,451.7 million posted in 2013, primarily due to the accelerated growth of International Operations and the positive impact on average price from the product mix, mostly due to the excellent performance in fragrances seen in Brazil in 2014.The following table presents a breakdown of our gross revenue by segment:

Gross revenue breakdown (in millions of Brazilian real - R$) Fiscal year ended

Change 2014/2013 (%)

December 31, 2014

December 31, 2013

Domestic market 8,181.7 8,037.6 1.8%Export market - International Operations (1) 1,767.1 1,412.8 25.1%Other domestic sales (2) 1.5 1.3 15.4%Gross revenue 9,950.3 9,451.7 5.3%

(1) Sales made by the subsidiaries in Argentina, Chile, Colombia, France, Mexico, Peru and Australia.(2) Sales of scrap.

_Domestic sales

The 1.8% increase in domestic sales can be broken down into the positive impact on average price from the product mix, mainly due to the greater relevance of fragrances (new launches), partially offset by the 6.9% decrease in the number of units sold (446.9 million units in 2014 compared to 479.9 million units in 2013)._Sales in international markets

The revenue from sales at our international operations was R$1,767.1 million in 2014, up 25.1% from sales in 2013 of R$1,412.8 million. In weighted local currency, in 2014 compared to 2013, sales in international markets grew by 27.3% in the Operations in Consolidation (11.9% in reais) and by 29.5% in the Operations in Implementation (33.7% in reais). International operations grew significantly in terms of consultant base. In Operations in Consolidation, we had an adverse impact form the depreciation in the Argentine peso and Chilean peso against the Brazilian real. Our subsidiary Aesop ended the year with 98 stores in 14 countries, registering strong growth.

Sales tax, returns and cancellations.Sales tax, returns and deductions were R$2,541.9 million in 2014, compared to R$2,441.4 million in 2013, increasing 4.1% mainly due to the higher revenue.

Net revenueThe Company’s net revenue was R$7,408.4 million in 2014, up 5.7% from the net revenue of R$7,010.3 million in 2013.

Cost of goods soldCost of goods sold was R$2,250.1 million in 2014, increasing 6.6% from the cost of goods sold of R$2,111.1 million in 2013.The following table presents the components of cost of goods sold for the periods indicated and the annual variation in each component:

(in millions of Brazilian real - R$) Fiscal year Change

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2014/2013(%)2014 2013

Raw material for products and packaging(1) and resale products(2)) 1,822.5 1,718.7 6.0%Labor 211.9 183.5 15.5%Depreciation 61.1 65.7 -7.0%Other costs (3) 154.6 143.2 8.0%Cost of goods sold 2,250.1 2,111.1 6.6%

(1) Mainly plastics, glass, printing and fragrances.(2) Products made by third parties, soaps, hair care products, etc.(3) “Other costs” includes electricity, water, gas, consulting services, IT services and other items.As a ratio of net revenue, our cost of goods sold increased to 30.4% in 2014, compared to 30.1% in 2013. The increase was mainly due to the depreciation of the Brazilian real against the U.S. dollar and higher labor costs.

Gross profitOur gross profit increased 5.3% in 2014 to R$5,158.3 million, compared to gross profit of R$4,899.2 million in 2013. Gross margin decreased to 69.6% in 2014, from 69.9% in 2013.

Operating income (expenses) Operating expenses were R$3,793.6 million in 2014, for an increase of 8.9% from the operating expenses of R$3,483.1 million in 2013.This following table presents the composition of our operating expenses (income) for the periods indicated and the variation in each component:(in millions of Brazilian real - R$) Fiscal year ended Change

2014 2013 2014/2013 (%)Selling, marketing and logistics expenses 2,680.10 2,449.40 9.40%Administrative, R&D, IT and Projects expenses 1,133.30 1,042.60 8.70%Other net operating expenses (income) -19.8 -8.9 122.50%Net operating expenses 3,793.60 3,483.10 8.90%

_Selling, marketing and logistics expenses

Selling, marketing and logistics expenses increased from R$2,449.4 million in 2013 to R$2,680.1 million in 2014. As a ratio of net revenue, the item increased to 36.2% in 2014, compared to 34.9% in 2013. Selling, marketing and logistics expenses remained aligned with the Company’s strategy and consistent with the competitive environment. In 2014, the increase in expenses was due to the continuity of competitive marketing investments. _Administrative, R&D, IT and Projects expenses

Administrative, R&D, IT and Projects expenses increased from R$1,042.6 million in 2013 to R$1,133.3 million in 2014, up 8.7% from 2013. As a ratio of net revenue, the item increased from 14.9% in 2013 to 15.3% in 2014. The increase in administrative expenses in relation to the prior year is due to the investments in innovation, strategic projects and depreciation and amortization expenses._Other net operating income (expenses)

Other net operating income (expenses) increased from income of R$8.9 million in 2013 to income of R$19.8 million in 2014. The growth is mainly due to the increase of R$7.2 million in INSS tax credit on the additional 1/3 vacation pay, recognized based on the evolution of the decision from the Superior Court of Justice (STJ), increase of R$6.2 million in reversal of credit for contingent consideration related to the acquisition of 65% of the capital of Aesop and increase of R$17.7 million referring to the reclassification of interest and subsidized loans from financial result for this item, in accordance with accounting pronouncement CPC 07, partially offset by a negative result of R$22.3 million referring to divestment of property, plant and equipment.

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Net financial income (expenses)The Company recorded a net financial expense of R$268.3 million in 2014, compared to the net financial expense of R$158.3 million in 2013.Financial expense increased to R$752.1 million in 2014, compared to R$522.5 million in 2013. This increase was mainly due to the marking to market of derivatives and higher debt.Financial income increased to R$483.8 million in 2014, from R$364.2 million in 2013. This variation is explained by the increase in gains from derivative operations contracted to provide a currency hedge against the Company’s exposure in foreign currencies, as well as the increased yield from financial investments.Most of the debts contracted in foreign currency have derivative operations contracted to eliminate from the financial result the effects of currency translation that offset any decreases in financial income and any increases in financial expenses. In practice, the variation in the CDI interbank overnight rate serves as the reference for our debt profile.

Income tax and social contribution tax (CSLL)Income tax and social contribution tax (CSLL) decreased to R$355.2 million in 2014, from R$409.9 million in 2013. The variation in expenses with income tax and social contribution was directly driven by the operating income (loss) in the period. The effective rate remained virtually stable in both periods (32.4% in 2014 and 32.6% in 2013).

Net incomeFor the abovementioned reasons, our net income before non-controlling interest decreased to R$741.2 million in 2014 (10.1% of net revenue), compared to R$847.8 million in 2013 (12.1% of net revenue).

Other information and non-accounting measures_EBITDA

Due to the abovementioned results, EBITDA reached R$1,554.5 million in 2014, representing a reduction of 3.4% compared to EBITDA of R$1,609.0 million in 2013. Our EBITDA margin was 21.0% in 2014, compared to 23.0% in 2013. The following table presents a conciliation of net income with EBITDA for the periods indicated.

(in millions of Brazilian real - R$) Fiscal year2014 2013 Change 2014/2013 (%)

Net income 732.8 842.6 -13.0 (+) Depreciation and amortization 189.8 193.0 -1.7 (+) Net financial income (expenses) 268.3 158.3 69.5 (+) Income tax and social contribution tax (CSLL) 355.2 409.9 -13.4(+) Non-controlling interest 8.4 5.2 61.6EBITDA 1,554.5 1,609.0 -3.4

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(iii) Comparison of Main Equity Accounts in 2015 and 2014

ASSETS

Current assets

In 2015, current assets were R$6,018.7 million, up 42.0% from 2014. This scenario was mainly due to the increase in cash and cash equivalents and marketable securities, increase in accounts receivable, inventories and derivative financial instruments:

_Cash and cash equivalents and marketable securities

In 2015, the balance of Cash and cash equivalents was R$1,591.8 million, up 36.7% from 2014. This variation is mainly explained by the higher funding from loans net of payments made in the period (debt rollover), higher volume of cash from growth and efficiency in our client portfolio, and higher level of investments in marketable securities. Cash and cash equivalents corresponded to 16.9% of our assets in 2015, compared to 12.7% in 2014.

_Trade accounts receivable

In 2015, Trade accounts receivable was R$909.0 million, up 7.3% from 2014.Trade accounts receivable corresponded to 9.7% of our assets in 2015, compared to 11.8% in 2014. This increase was mainly due to the higher contribution from the international operations.

_Inventories

In 2015, the balance of Inventories was R$963.7 million, up 8.3% from 2014. This variation is mainly due to the increase in sales in International Operations, lower-than-expected sales in Brazil, and the building of inventories to efficiently meet demand.Inventories corresponded to 10.3% of our assets in 2015, compared to 12.4% in 2014.

_Derivatives

In 2015, the balance of Derivatives was R$734.5 million, accounting for 7.8% of our total assets, while in 2014 balance was of R$317.0 million, accounting for 4.4% of our total assets. This variation reflects the greater appreciation of the long position of derivatives in dollar (protection-buyer end).

Non-current assets

In 2015, Non-current assets were R$3,376.3 million, up 14.0% from 2014. This increase is attributable mainly to an increase in Property, plant and equipment and Intangible assets, Taxes recoverable and Deferred income tax and social contribution, as explained below.

_Property, plant and equipment and Intangible assets

In 2015, Property, plant and equipment was R$2,568.9 million, up 12.6% from 2014. This variation is due to the allocation of R$383.0 million (Capex) to production, logistics and technology projects, which are indispensable for supporting our growth. The Property, plant and equipment and Intangible assets account represented 27.3% of our total assets in 2015,

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compared to 31.7% in 2014.

_Taxes recoverable

In 2015, the balance of Taxes recoverable was R$289.4 million, up 58.4% from the balance in 2014. This variation is mainly due to the accumulation of ICMS credits. Taxes recoverable accounted for 3.1% of our assets in 2015, compared to 2.5% in 2014.Deferred income tax and social contribution

In 2015, the balance of Deferred income tax and social contribution was R$212.6 million, up 43.9% from the balance in 2014. This variation is mainly due to the effect on changes in fair value of derivatives, including hedge accounting operations, increase in social contribution tax loss carryforwards and increase in temporary differences. Deferred income tax and social contribution corresponded to 2.3% of our assets in 2015, compared to 2.1% in 2014.

LIABILITIES

Current liabilities

In 2015, Current liabilities were R$4,572.9 million, up 46.6% from 2015. This increase was mainly due to the higher volume of funding from third parties through borrowings and financing operations.

_Borrowings and financing

In 2014, the balance of Borrowings and financing was R$2,161.4 million, which was 47.4% higher than in 2014. This change was mainly due to the Company's decision to bring forward a certain volume of transactions to raise capital to prepare for the more challenging macroeconomic scenario expected for the second half of 2015 / first half of 2016, with the creation of a liquidity reserve for future debt amortizations. Borrowings and financings corresponded to 23.0% of our total liabilities and shareholders’ equity in 2015, compared to 20.4% in 2014.

_Trade and other payables

In 2015, the balance of Trade and other payables was R$802.9 million, for an increase of 33.9% from 2014, due to the increase in purchases of raw materials and packaging, as well as third-party finished product, due to the currently high level of inventories. The balance of Trade and other payables corresponded to 8.6% of our total liabilities and shareholders’ equity in 2015, compared to 9.6% in 2014.

_Payroll, profit sharing and related taxes

In 2015, Payroll, profit sharing and related taxes amounted to R$201.2 million, down 4.4% from R$210.5 million in 2014, due to the achievement of the profit sharing targets for 2015 and the reductions in the administrative expenses base following the restructuring. Payroll, profit sharing and related taxes represented 2.1% of our total liabilities and shareholders’ equity in 2015, compared to 2.8% in 2014.

_Taxes payable

In 2015, Taxes payable amounted to R$1,048.0 million, up 46.5% from R$715.5 million in 2014, mainly due to the increase in the balance of the provision for income tax and social

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contribution levied on any amounts received as indemnification due to delays in contractual liabilities by Natura consultants, the higher taxes payable by subsidiaries abroad and the increase in federal taxes payable (PIS, COFINS and IPI). Taxes payable accounted for 11.2% of our total liabilities and shareholders’ equity in 2015, compared to 11.5% in 2014.

_Provision for the acquisition of interest from non-controlling shareholders

In 2015, the balance of Provision for the acquisition of interest from non-controlling shareholders was R$190.7 million. This balance refers to liabilities recorded in accordance with the obligation set forth in the purchase and sale agreement for Aesop stock, which determines the acquisition of additional shares. The account represented 2.0% of our total liabilities and shareholders’ equity in 2015, from 0.8% in 2014.

_Other payables

In 2015, the balance under Other payables was R$168.8 million, increasing 115.0% from R$78.5 million in 2014. Other payables represented 1.3% of our total liabilities and shareholders’ equity in 2015, compared to 1.1% in 2014.

Non-current liabilities

In 2015, Non-current liabilities were R$3,744.3 million, up 27.7% from 2014. This increase was largely due to the proceeds from new Borrowings and financing in the period, partially offset by the decrease in taxes payable and the provision for the acquisition of interest from non-controlling shareholders.


In 2015, Borrowings and financing amounted to R$3,374.5 million, growing 34.2% from 2014. Borrowings and financings corresponded to 35.9% of our total liabilities and shareholders’ equity in 2015, compared to 40.2% in 2014.

_Taxes payable

In 2015, Taxes payable amounted to R$87.7 million, down 11.4% from R$99.0 million in 2014, mainly due to the lower ICMS-ST tax due to the agreement made with certain Brazilian states in fiscal year 2015. Taxes payable represented 0.9% of our total liabilities and shareholders’ equity in 2015, compared to 1.4% in 2014.

_Other provisions

In 2015, the balance under Other provisions was R$170.1 million, increasing 16.7% from R$145.8 million in 2014. Other provisions represented 1.8% of our total liabilities and shareholders’ equity in 2015, compared to 2.3% in 2014.

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Shareholders’ equity

Shareholders' Equity went from R$1,148.7 million in 2014 to R$1,077.8 million in 2015, chiefly due to:(a) the increase in net income for the year, including the share attributable to the non-controlling shareholders, in the amount of R$522.7 million;(b) the increase in other comprehensive income, including: (i) the gain on the currency translation of the financial statements of subsidiaries abroad in the amount of R$45.2 million; (ii) the gain on cash flow hedge operations net of tax effects in the amount of R$2.2 million; (iii) the actuarial loss in the amount of R$0.4 million;(c) the reduction from the reversal in the plans for the granting of stock option and restricted stock in the amount of R$2.6 million;(d) the increase in the result from changes in the interests held in subsidiaries abroad in the amount of R$12.3 million.(e) the increase due to the interests of non-controlling shareholders in the equity of subsidiaries in the amount of R$35.3 million;(f) the reduction due to dividends and interest on equity in the amount of R$685.6 million.

_Other equity accounts

Any equity accounts not mentioned above did not show any significant variations between the balances in 2015 and 2014.

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(iv) Comparison of Main Equity Accounts in 2014 and 2013

ASSETS

Current assets

In 2014, current assets were R$4,239.3 million, up 20.7% from 2013. This scenario was mainly due to the increase in cash and cash equivalents and marketable securities, increase in accounts receivable, inventories and derivative financial instruments:

_Cash and cash equivalents and marketable securities

In 2014, the balance of Cash and cash equivalents was R$1,696.0 million, up 29.5% from 2013. This variation is mainly explained by the higher funding from loans net of payments made in the period (debt rollover), higher volume of cash from growth and efficiency in our client portfolio, and higher level of investments in marketable securities. Cash and cash equivalents corresponded to 23.6% of our assets in 2014, compared to 21.0% in 2013.

_Trade accounts receivable

In 2014, Trade accounts receivable was R$847.5 million, up 5.0% from 2013.Trade accounts receivable corresponded to 11.8% of our assets in 2014, compared to 12.9% in 2013. This increase was mainly due to greater payment terms granted to our consultants.

_Inventories

In 2014, the balance of Inventories was R$890.0 million, up 11.3% from 2013. This variation is mainly due to the increase in sales in International Operations, lower-than-expected sales in Brazil, and the building of inventories to efficiently meet demand, as well as greater efficiency in the provision for losses.Inventories corresponded to 12.4% of our assets in 2014, compared to 12.8% in 2013.

_Derivatives

In 2014, the balance of Derivatives was negative at R$317.0 million, accounting for 4.4% of our total assets, while in 2013 balance was negative at R$153.6 million, accounting for 2.5% of our total assets. This variation reflects the greater appreciation of the long position of derivatives in dollar (protection-buyer end)

Non-current assets

In 2014, Non-current assets were R$2,960.8 million, up 8.2% from 2013. This increase is attributable mainly to an increase in Property, plant and equipment and Intangible assets, net of the decrease in the balance of escrow deposits, as explained below.

_Property, plant and equipment and Intangible assets

In 2014, Property, plant and equipment was R$2,281.3 million, up 19.0% from 2013. This variation is due to the allocation of R$505.7 million (Capex) to production, logistics and technology projects, which are indispensable for supporting our growth. The Property, plant and equipment and Intangible assets account represented 31.7% of our total assets in 2014, compared to 30.7% in 2013.

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_Escrow deposits

In 2014, the balance of Escrow deposits was R$263.3 million, down 36.2% from the balance in 2013. This variation is mainly due to the agreement to reduce the value added margin (MVA) with some States, decreasing our balance of escrow deposits since part of the balance was converted into income for the States. Escrow deposits accounted for 3.7% of our assets in 2014, compared to 6.6% in 2013.

LIABILITIES

Current liabilities

In 2014, Current liabilities were R$3,119.0 million, up 34.0% from 2013. This increase was mainly due to the higher volume of funding from third parties through borrowings and financing operations.


In 2014, the balance of Borrowings and financing was R$1,466.6 million, which was 111.6% higher than in 2013. This variation mainly reflects Capex investments (logistics, manufacturing and IT) and greater need for working capital. Borrowings and financings corresponded to 20.4% of our total liabilities and shareholders’ equity in 2014, compared to 11.1% in 2013.

_Trade and other payables

In 2014, the balance of Trade and other payables was R$599.6 million, for a reduction of 15.1% from 2013, due to the decrease in purchases of raw materials and packaging, as well as third-party finished product, due to the currently high level of inventories. The balance of Trade and other payables corresponded to 8.3% of our total liabilities and shareholders’ equity in 2014, compared to 11.3% in 2013.

_Payroll, profit sharing and related taxes

In 2014, Payroll, profit sharing and related taxes was R$210.5 million, up 18.5% from R$177.6 million in 2013, due to the higher achievement of the internal profit sharing targets in 2014 compared to 2013. This account Payroll, profit sharing and related taxes represented 2.9% of our total liabilities and shareholders’ equity in 2014, compared to 2.8% in 2013.

_Taxes payable

In 2014, Taxes payable amounted to R$715.4 million, up 8.5% from R$659.3 million in 2013, mainly due to higher sales in the period, the increase in the balance of provision for income tax and social contribution levied on any amounts received as interest in arrears due to delays in contractual liabilities by Natura consultants, partially offset by the lower ICMS-ST tax due to the agreement made with certain Brazilian states in 2014. Taxes payable accounted for 9.9% of our total liabilities and shareholders’ equity in 2014, compared to 10.6% in 2013.

_Provision for the acquisition of interest from non-controlling shareholders

In 2014, the balance of Provision for the acquisition of interest from non-controlling Page 129 of 293

shareholders was R$48.2 million. In 2013, the balance was entirely recorded under non-current liabilities. This balance refers to liabilities recorded in accordance with the obligation set forth in the purchase and sale agreement for Aesop stock, which determines the acquisition of interest as from 2015. Therefore, part of the total balance (R$48.2 million of a total of R$145.5 million) is recorded under current liabilities. The account represented 0.7% of our total liabilities and shareholders’ equity in 2014.

_Other payables

In 2014, the balance under Other payables was R$78.5 million, decreasing 13.0% from R$90.2 million in 2013. Other payables represented 1.1% of our total liabilities and shareholders’ equity in 2014, compared to 1.4% in 2013.

Non-current liabilities

In 2014, Non-current liabilities were R$2,932.4 million, up 6.5% from 2013. This increase was largely due to the proceeds from new Borrowings and financing in the period, partially offset by the decrease in taxes payable and the provision for the acquisition of interest from non-controlling shareholders.


In 2014, Borrowings and financing amounted to R$2,514.6 million, growing 14.3% from 2013. Borrowings and financings corresponded to 34.9% of our total liabilities and shareholders’ equity in 2014, compared to 35.2% in 2013.

_Taxes payable

In 2014, Taxes payable amounted to R$99.0 million, down 54.1% from R$215.6 million in 2013, mainly due to the lower ICMS-ST tax due to the agreement made with certain Brazilian states in fiscal year 2014. Taxes payable represented 1.4% of our total liabilities and shareholders’ equity in 2014, compared to 3.5% in 2013.

_Other provisions

In 2014, the balance under Other provisions was R$145.8 million, increasing 20.2% from R$121.3 million in 2013. Other provisions represented 2.0% of our total liabilities and shareholders’ equity in 2014, compared to 1.9% in 2013.

Shareholders’ equity

Shareholders' Equity went from R$1,168.3 million in 2013 to R$1,148.7 million in 2014, substantially due to: (a) the increase in net income for the year, including the share attributable to the non-controlling shareholders, in the amount of R$741.2 million;(b) the decrease in other comprehensive income, including: (i) the loss on the currency translation of the financial statements of subsidiaries abroad in the amount of R$6.0 million; (ii) the loss from cash flow hedge operations net of tax effects in the amount of R$7.9 million; (iii) the actuarial loss in the amount of R$0.6 million;(c) the increase due to the build in the provision for stock option plans in the amount of R$2.5 million;

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(d) the increase due to the sale of treasury stock for the stock option plans in the amount of R$33.8 million;(d) the decrease in the result from changes in the interests held in subsidiaries abroad in the amount of R$19.9 million.(e) the decrease due to the interests of non-controlling shareholders in the equity of subsidiaries in the amount of R$6.0 million;(f) the decrease due to dividends and interest on equity in the amount of R$756.5 million.

_Other equity accounts

Any equity accounts not mentioned above did not show any significant variations between the balances in 2014 and 2013.

Uses and sources of funds

Our main sources of funds are our operations and borrowings from financial institutions.

_Operations by overseas subsidiaries

The profit margin on exports from Brazil to international operations was subtracted from the COGS of the respective operations in order to show the actual impact of these subsidiaries on the Company’s consolidated result. Accordingly, the pro-forma income statement for the Brazilian operations considers only the sales made in the domestic market.

At December 31, 2014, the reporting date of the most recent annual financial statements, the business segments were divided as follows: Brazil (“Brazil Operation”), Latin America (“LATAM”) and other countries (“Other”), the latter including the operations in France, the Netherlands, the USA, LATAM Corporate and Emeis Holding Pty Ltd (“Aesop”) (included the results of the holding companies Natura Brazil Pty Ltd. and Natura Cosmetics Australia Pty Ltd.). In addition, LATAM was analyzed in two groups: (a) Argentina, Chile and Peru (“Operations in Consolidation”); and (b) Mexico and Colombia (“Operations in Implementation”).

As from the reporting of the interim information on June 30, 2015, due primarily to the maturation of operations in Mexico and Colombia, the Management started to adopt the following business segmentation: Brazil (“Brazil Operation”), Latin America (“LATAM Operation,” including LATAM Corporate), Emeis Holdings Pty Ltd. (“Aesop”) (including the results of holding companies Natura Brazil Pty Ltd. and Natura Cosmetics Australia Pty Ltd.) and Others (“includes results from France, Natura (Brasil) International B.V. – Netherlands, Natura Brasil Inc. – USA”). The amounts at December 31, 2014 presented herein were reclassified to provide improved comparison.

In 2015, the international operations made an important contribution and already account for 29.0% of consolidated net revenue. LATAM operations (Argentina, Chile, Peru, Mexico and Colombia including LATAM Corporate) registered net revenue growth in Brazilian reais of 59.7% from 2014. In Aesop operations (including results from the holding companies Natura Brazil Pty Ltd. and Natura Cosmetics Australia Pty Ltd.), net revenue in Brazilian reais grew by 78.0% when compared to 2014. These operations also recorded an increase in profitability, with positive EBITDA of R$259.9 million (R$117.8 million in 2014).

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_Cash Flow

Fiscal year ended

(R$ million)2015 2014 2013

Net cash provided by operating activities 1,578.0 757.5 979.0

Net cash (used) in investing activities (965.0) (731.1

) (469.3)Net cash generated by (used) in financing activities (202.3) 136.8 (652.7)Increase (decrease) in cash and cash equivalents, excluding the effect of exchange variation on cash and cash equivalents 410.8 163.2 (143.0)

Our cash flow derives primarily from our operational activities and may vary in accordance with the fluctuations in our operating revenue, cost of goods sold, operating expenses and financial gains or losses. Our main source of funds is the revenue from sales to Natura Consultants.

Net cash provided by operating activities increased from R$757.5 million in 2014 to R$1,578.0 million in 2015. This was mainly driven by greater efficiency on working capital.Net cash used in investing activities increased to R$965.0 million in 2015 from R$731.1 million in 2014. This was mainly due to the reduction of R$122.8 million in acquisition of fixed and intangible assets and by the increase in the net volume of investments in securities of R$434.6 million, net of redemption of investments in securities, and an increase of R$77.9 million in proceeds from asset divestment compared to 2014.Net cash from financing activities was cash burn of R$202.3 million in 2015 (cash generation of R$136.8 million in 2014). This variation was mainly due to the decrease in funds from Borrowings and financing, net of amortizations in the period (R$337.9 million in 2015 vs. R$887.4 million in 2014) and lower payment of interest on equity from the previous year and early payment for the current year (R$685.6 million in 2015 vs. R$756.5 million in 2014).

_Uses of funds

Our funds are used mainly to pay our borrowings, make investments and pay dividends and interest on equity. In 2015, we had R$5,535.9 million in short and long term Borrowings and financing. In 2014, these amounts were R$3,981.2 million.

We paid dividends and/or interest on equity of R$685.6 million in 2015, R$756.5 million in 2014 and R$856.2 million in 2013.

Our investments totaled R$383.0 million in 2015, R$505.7 million in 2014 and R$553.9 million in 2013. See details of our investments below in the section “Investments”.

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_Investments

Our operational activities require regular investments, particularly those related to the development of our infrastructure and the acquisition of the tools used in our business, such as software, machinery, tools, vehicles and industrial molds.

The following table shows the investments made in the periods indicated:

Fiscal year ended 2015 2014 2013

(R$ million)Software and information technology equipment 62.8 41.1 85.5Machinery, tools and accessories 24.9 48.5 71.0Vehicles 26.4 22.3 29.0Buildings and facilities 8.2 16.4 8.6Molds (1) 32.9 19.3 38.6IT machinery and equipment 9.6 9.5 6.6Furniture and fixtures 10.6 8.4 5.1PPE in progress/ advances to suppliers 185.2 322.4 302.0Other investments 22.4 17.8 7.5Total investments 383.0 505.7 553.9

_____________________(1)These are steel molds made especially for use by our suppliers to produce plastic bottles

and packaging for our products. We hold ownership of these molds.

In 2015, our investments were in general guided by the need to better meet the need for improvements in logistics, expansion of production capacity and in our information technology structures.

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10.2 The Officers must comment on:

a. the results from the operations of the Company, in particular: (i) a description of any important revenue components; and (ii) factors that materially affect the operating results of the Company

In Brazil, the Company operates on an integrated basis in Brazil’s cosmetic, fragrance and toiletry industry, engaged in the development, manufacture, distribution and marketing of products. It is also present in seven other countries in Latin American and Europe with the Natura brand: Argentina, Bolivia, Chile, Colombia, Mexico, Peru and France. The operations in Venezuela were discontinued in 2009. The Company also holds 78.74% of Emeis Holdings Pty Ltd. an Australian premium cosmetics and beauty products manufacturer that operates under the “Aesop” brand in Australia, Asia, Europe, North America and Brazil.

Nearly all (71.0% in 2015) of our net revenue is denominated in Brazilian real and derives from the sale of our products to our Natura Consultants. The number of Natura Consultants and their productivity are the main drivers of growth in the gross operating revenue. The portion of revenue denominated in foreign currency derives from sales in other countries where the company has operations under the brands Natura and Aesop, and from the exports made to its distributor in Bolivia and to Duty Free.

In addition to the activities engaged in directly by the Company, on December 31, 2015, our organizational structure was formed primarily by the subsidiaries whose activities are described below:

Indústria e Comércio de Cosméticos Natura Ltda.: activities focused mainly on the manufacturing and sale of products under the brand Natura to Natura Cosméticos S.A. Natura Cosméticos S.A. - Chile, Natura Cosméticos S.A. - Peru, Natura Cosméticos S.A. - Argentina, Natura Cosméticos Ltda. - Colombia, Natura Europa SAS - France and Natura Cosméticos de México, S.A. de C.V.

Natura Biosphera Franqueadora Ltda. (formerly Natura Biosphera Cosméticos e Serviços Ltda.): granting and managing business franchises, as well as other activities related to franchising.

Natura Cosméticos S.A. - Chile, Natura Cosméticos S.A. - Peru, Natura Cosméticos S.A. - Argentina, Natura Cosméticos Ltda. - Colombia and Natura Distribuidora de México, S.A. de C.V.: its activities are similar to the activities of the parent company Natura Cosméticos S.A. in Brazil.

Natura Cosméticos C.A. – Venezuela: company currently being closed and with no investments of material balances recorded in its books.

Natura Inovação e Tecnologia de Produtos Ltda.: its activities focus on the development of products, technologies and market research. it is the parent company of Natura Innovation et Technologie de Produits SAS - France, the satellite center for research and development inaugurated in Paris, in 2007.

Natura Cosméticos y Servicios de México, S.A. de C.V.: its activities focus on providing administrative and logistics services to the companies Natura Cosméticos de México, S.A. de C.V. and Natura Distribuidora de México, S.A. de C.V.

Natura Cosméticos de México, S.A. de C.V.: engaged in the import and sale of cosmetics, Page 134 of 293

fragrances in general, and personal care products to Natura Distribuidora de Mexico, S.A. de C.V.

Natura Cosméticos España S.L.: company in pre-operational stage and its activities will be an extension of the activities carried out by its parent company Natura Cosméticos S.A. in Brazil.

Natura (Brasil) International B.V. – Netherlands: the holding company that is the parent company of Natura Europa SAS, Natura Brasil Inc. and Natura International Inc.

Natura Logística e Serviços Ltda.: engaged in the provision of picking, packaging and forwarding of goods, logistics advisory, human resource management and human resource training.

Natura Innovation et Technologie de Produits SAS - France: engaged in research activities developed for in vitro testing as an alternative to animals testing, to study the safety and efficacy of active compounds, skincare treatments and new packaging materials.

Natura Brasil Inc.: holding company of Natura International Inc.

Natura International Inc: firm that captures trends in design, fashion and technology, transforming them into ideas, concepts and prototypes.

Natura Europa SAS - France: its activities are concentrated in the purchase, sale, import, export and distribution of cosmetics, fragrances in general and toiletries.

Natura Brazil Pty Ltd – Australia: holding company of Natura Cosmetics Australia Pty Ltd.

Natura Cosmetics Australia Pty Ltd – Australia: holding company of Emeis Holdings Pty Ltd.

Emeis Holdings Pty Ltd: Activities focused on developing manufacturing and marketing of premium cosmetics under the brand of “Aesop”, with its products sold in retail chains and own stores.

Essential Investment Fund: exclusive fixed-income investment fund for private credit.

Natura Comércio Ltda.: retailer specializing in cosmetics, fragrances and toiletries.

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Our revenue is almost entirely generated by our operations. The following table shows the contribution from our subsidiaries, which together accounted for 29.0% of our net revenue in the fiscal year ended December 31, 2015:

Fiscal year ended onDecember 31,

2015 2014 2013Subsidiaries (% contribution)LATAM Operations 23.3% 15.6% 13.9%Aesop Operations 5.5% 3.3% 2.0%Other (Bolivia, Duty Free and France)

0.2% 0.2% 0.2%

Total Subsidiaries 29.0% 19.1% 16.1%Total Natura Cosméticos 71.0% 80.9% 83.9%Total 100.0% 100.0% 100.0%

Brazilian economic scenario

Brazil’s economic scenario directly affects our financial position and our operating result. Sudden changes in the economic and politic scenarios that already took place or might happen in the future have demanded, and will continue to demand, constant evaluation of the risks associated with our activities and corresponding adjustments to our business strategy. Household income and employment levels, especially, are factors that drive the growth of our business. Moreover, our production costs are affected by inflation and by foreign exchange variations, which affect the cost of imported components that we use in our products.

The country’s GDP measured by the Brazilian Institute of Geography and Statistics (IBGE) dropped 0.2% in 2009, grew 7.5%, 2.7%, 0.9%, 1.6% and 0.1% in 2010, 2011, 2012, 2013 and 2014, respectively, and dropped 3.8% in 2015 in a challenging scenario. Inflation, as measured by the IPCA consumer price index and published by the IBGE, stood at 4.3%, 5.9%, 6.5%, 5.8%, 5.9%, 6.4% and 10.7% p.a. in 2009, 2010, 2011, 2012, 2013, 2014 and 2015, respectively.

The following table shows the changes in GDP and interest rates for years ended December 31, 2009, 2010, 2011, 2012, 2013, 2014 and 2015.

December 31,2009 2010 2011 2012 2013 2014 2015

Growth (reduction) in GDP(1) (0.3)% 7.5% 2.7% 0.9% 2.3% 0.1% (3.8)%Average CDI(2) rate 9.8% 9.7% 11.6% 8.4% 9.8% 10.8% 13.2%TJLP(3) 6.0% 6.0% 6.0% 5.5% 5.0% 5.0% 6.3%___________________________(1) As measured by IBGE’s new methodology for the period from 2008 through 2011 and by the Central Bank of

Brazil after 2012.(2) CDI rate is the average of the daily interbank rates practiced in Brazil (past 12 months). Source: CETIP(3) TJLP rate is the average of the daily interbank rates practiced in Brazil (past 12 months). Source: BNDES

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Effects of inflation and foreign exchange variationThe following table show the annual inflation indices measured in terms of the IGP-M price index and the IPCA consumer price index for the period from 2009 to 2015, as well as variations of the Brazilian real against the U.S. dollar, using the exchange rates announced by the Central Bank on the last date of each period:

December 31,2009 2010 2011 2012 2013 2014 2015

Inflation (IGP-M)(1) (1.7)% 11.3% 5.1% 7.8% 5.5% 3.7% 10.5%Inflation (IPCA)(2) 4.3% 5.9% 6.5% 5.8% 5.9% 6.4% 10.7%Foreign exchange rate (end of period) (R$/US$) 1.75 1.69 1.84 2.04 2.34 2.65 3.90Foreign exchange rate variation (R$/US$) (25.6)% (4.5)% 12.6% 8.9% 14.7% 13.2% 47.0%

__________________________(1) Inflation (IGP-M) is the General Market Price Index measured by the Getúlio Vargas Foundation (FGV).(2) Inflation (IPCA) is the Broad Consumer Price Index measured by IBGE.

Foreign exchange variations affect, and will continue to affect, our financial conditions and operating result. They also affect our monetary assets and liabilities denominated in Brazilian real. The value of these assets and liabilities in dollar declines when the real weakens against the dollar and increases when the real strengthens against the dollar. During periods of devaluation of the real, we report (a) a revaluation of the losses from monetary assets denominated in real, and (b) a revaluation of the gains from monetary liabilities denominated in real.

b. revenue variations attributed to changes in prices, exchange rates, inflation, volumes and the launch of new products and services

Our operating revenue is directly impacted by changes in the quantity of products sold by our Natura Consultants and the prices of such products.In fiscal year 2015, consolidated gross revenue reached R$10,806.5 million, increasing 8.6%. The total consultant base reached 1,883 thousand in the period, expanding by 8.0% from 2014. In Brazil, the Company ended 2015 with 1,376.9 thousand consultants, for growth of 4.4%, and with 60,000 CNOs (Super Consultants). In the international operations, the number of consultants was 505.1 thousand, for growth of 19.5% on a year earlier.In fiscal year 2014, consolidated gross revenue was R$9,950.3 million, increasing by 5.3%. Our total consultant base reached 1,742 thousand, growing 5.2% compared to 2013. In Brazil, we ended 2014 with 1,318 thousand consultants, which represents growth of 2.2%, and with 11,815 Super Consultants (CNO). In the international operations, we ended the year with 424 thousand consultants, for growth of 15.7%.Note that the prices practiced in the Company’s industry are characterized by gradual increases over time, basically due to (i) the higher production costs; and (ii) the higher demand for higher-value products. Consistent gains in productivity in the industry have allowed manufacturers to avoid fully passing through their cost increases to consumers. Furthermore, the low concentration of suppliers and the high level of competition among them minimize the increases in raw material costs.We expect consumer prices to continue growing gradually and that companies will continue to achieve productivity gains to avoid fully passing through their cost increases to consumers.

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For information on the impacts of inflation, exchange and interest rates on the performance of the Company, see item (c) of this item 10.2. below.

c. impact of inflation, variations in the prices of main inputs and products, the exchange rate and interest rates on our operating and financial results

Inflation

The Company’s results have been affected by inflation. Most of our costs and expenses are incurred in Brazilian real and are increased when our suppliers or service providers raise their prices. Our service providers in general use the IPCA consumer price index to adjust their prices, while our suppliers in general use the INPC consumer price index published by the Brazilian Geography and Statistics Institute (IBGE) and the IGP-M general price index published by the Getúlio Vargas Foundation (FGV) or a variation in the prices of certain commodities to adjust their prices for inflation. Our gross revenue is also indirectly affected by inflation, since in general we pass through part of our cost increases to consumers through price increases.

Foreign exchange

Due to the accounts receivable and financial obligations of various natures undertaken by the Company in foreign currencies, a Currency Hedge Policy was implemented that establishes the levels of exposure connected with these risks.

Our operating and financial results are affected by fluctuations in the exchange rate between the Brazilian real and the U.S. dollar and between the Brazilian real and the euro, mainly regarding: (i) changes in the costs of raw materials and packaging that are imported or pegged to the dollar; (ii) our financing pegged to foreign currencies; (iii) the costs of products sold in Brazilian real to our subsidiaries that conduct operations in Argentina, Chile, Peru, Mexico, Colombia and France; and (iv) our operations in Australia, Asia, Europe and the United States through the Aesop brand.

For their currency exposure, the Company and its subsidiaries contract operations with derivative instruments such as swaps and forward currency purchases known as Non Deliverable Forwards (NDF). The currency hedge policy determines that the hedge instruments contracted by the Company must limit the losses from currency devaluation in relation to the net income projected for the current fiscal year, based on a certain estimate of currency devaluation in relation to the U.S. dollar. This limit sets the ceiling or the maximum currency exposure allowed by the Company.

Interest Rates

Since the Company does not have significant interest-bearing assets, the results and operating cash flow of the Company are substantially independent of changes in market interest rates.

The Company’s interest rate risk derives from short- and long-term financial investments and loans and financing facilities. The Company’s management has a policy of maintaining the indexers of its exposures to the interest rates of its funding and lending operations linked to

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floating rates. The financial investments and loans and financing facilities, except those contracted based on the Long-Term Interest Rate (TJLP), are restated by a floating rate (CDI rate), in accordance with the contracts signed with financial institutions and the securities traded with investors in this market.

The Company contracts swap derivative instruments with the goal of mitigating the risks of its loan and financing operations contracted with indexers other than the CDI rate.

The Company’s business is affected by interest rates to the extent that higher interest rates could lead to lower household consumption. However, recent history has shown that our business model, which is very dependent on credit, has not suffered significant impacts from interest rate fluctuations.

The Company has not experienced difficulties or suffered financial losses arising from interest rate volatility in the fiscal years ended December 31, 2015, 2014 and 2013.

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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:

(a) the introduction or divestment of operating segments

There were no introductions or divestments of operating segments in our activities during the fiscal years ended December 31, 2015, 2014 and 2013 that caused or are expected to cause relevant effects on the financial statements or results of our Company.

(b) the constitution, acquisition or divestment of ownership interests

In February 2013, Natura Cosméticos S.A., through its subsidiary Natura Brasil Pty Ltd ("Natura Australia"), acquired 65% ownership interest in Emeis Holding Pty Ltd ("Emeis"), an Australian producer of cosmetics and premium beauty products operating with the “Aesop” brand in Australia, Asia, Europe, North America and recently Brazil, for the final price agreed by the parties of AU$ 71,104 million.

In October 2014, Emeis Holding Pty Ltd bought back 46,009 shares, which represented ownership interest of 1.83% in the Company, from a non-controlling shareholder. These shares were promptly cancelled after the acquisition. The total number of shares of Emeis Holding Pty Ltd decreased from 2,517,815 million shares to 2,471,806 million shares, maintaining the same number of shares for all the shareholders. In view of this, Natura Cosméticos S.A., through its subsidiary Natura Australia, increased its ownership interest from 65% to 66.21% in Emeis Holding Pty Ltd.

The share buy-back price was of AU$3,409 million, recognizing a decrease in own equity matching against cash. As a consequence, the Company recognized in its equity, in “Effects from changes in ownership interest in subsidiaries” account, the amount of AU$1,851 million or R$ 3,969 million.

In December 2014, Natura Cosméticos, through holding Natura Australia, acquired 126,731 shares from a non-controlling shareholder, which represents 5.13% ownership interest in the Company. In view of this, Natura Cosméticos S.A., through its subsidiary Natura Australia, increased its ownership interest from 66.21% to 71.34% in Emeis Holding Pty Ltd.

The shares purchase value amounted to AU$ 9,391 million, recognizing an investment increase of AU$ 2,054 million Australian dollars and a decreased in its equity of AU$7,337 million matching against cash. As a consequence, the Company recognized in its equity, in “Effects from changes in ownership interest in subsidiaries” account, the amount of AU$7,337 million Australian dollars or R$ 15,968 million.

In December 2015, Natura Cosméticos, through Natura Australia, acquired 183,111 common shares based on the options established in the purchase and sale agreement, from a noncontrolling shareholder of Emeis, corresponding to 7.40% of the capital of Emeis. Thus, the indirect interest held by Natura Cosméticos in Emeis, through its subsidiary Natura Australia, changed from 71.34% to 78.74%.

The share purchase amount was AU$ 23.524 million, with the cash offset recognized as an increase in investment of AU$ 4.243 million and a reduction in shareholders' equity of AU$19.281 million. As a consequence, the Company recognized in its shareholders' equity, under “Effects of changes in interest held in subsidiaries”, a reduction in the amount of AU$ 19.281 million or R$53,873 million.

The realization of 7.40% of the provision for acquisition from noncontrolling shareholders recorded as liabilities by the Company in the amount of R$66,141 million was offset by an increase in shareholders’ equity under “Realization of reserve for acquisition of interest from noncontrolling shareholders through purchase of shares in a foreign subsidiary".

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(c) atypical events or operations

No atypical events or operations occurred during the fiscal years ended December 31, 2015, 2014 and 2013 that caused or are expected to cause relevant effects on the financial statements or results of our Company.

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10.4. The Officers must comment on:

a. any significant changes in accounting practices

There were no significant changes in accounting practices.

b. any significant effects of the changes in accounting practices

There were no significant effects from changes in accounting practices

c. any qualifications or emphasis of matter paragraphs in the auditor’s report

The parent company's individual financial statements were prepared in accordance with the accounting practices adopted in Brazil, which comprise the provisions set forth in the Brazilian Corporations Law, Federal Law no. 6,404/76, amended by Law no. 11,638/07 and Federal Law no. 11,941/09, as well as the accounting pronouncements, interpretations and guidelines issued by the Accounting Pronouncements Committee (CPC), approved by the Securities and Exchange Commission of Brazil (CVM). Until December 31, 2013, these practices differed from IFRS, applicable to the separate financial statements, only regarding the measuring of investments in subsidiaries, affiliates and joint ventures using the equity method, whereas under IFRS these would be measures at cost or fair value. Therefore, the independent auditors' report referring to the fiscal year ended December 31, 2013, contained an emphasis of matter paragraph on this matter.The issue of pronouncement IAS 27 (Separate Financial Statements) revised by IASB in 2014 started to allow the use of the equity method to measure investments in subsidiaries, affiliates and joint ventures in the separate financial statements prepared in accordance with IFRS. In December 2014, CVM issued Resolution no. 733/2014, which approved the Technical Pronouncement Revision Document no. 7 referring to Pronouncements CPC 18, CPC 35 and CPC 37 issued by the Accounting Pronouncements Committee, welcoming said amendment to IAS 27 and allowing its adoption as from the fiscal year ended December 31, 2014. Therefore, the parent company's individual financial statements are now in compliance with IFRS, and the emphasis of matter paragraph has been removed from the independent auditors' report as from fiscal year 2014.

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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

The main accounting practices are those that are relevant to portraying our financial condition and our results, and whose determination is more difficult, subjective and complex, frequently requiring estimates about inherently uncertain issues. To the extent that the number of variables and assumptions related to such uncertain and future matters increase, these determinations become even more subjective and complex. To describe the manner in which our management makes these determinations concerning future events, including the variables and assumptions underlying such estimates and the sensitivity of such judgments under different circumstances, we highlight the following accounting practices:- The preparation of financial statements requires the use of certain critical accounting estimates and the exercise of judgment by the Company’s management in the process of application of accounting policies.- The accounting estimates and underlying assumptions are reviewed on an ongoing basis and are based on historical experience and other factors that are considered to be relevant in the circumstances. Actual results may differ from those estimates. The effects resulting from the revision of accounting estimates are recognized in the revision period.- These significant assumptions and accounting estimates used in the preparation of the financial statements are follows:a. Income tax, social contribution, and other taxesThe Company recognizes deferred tax assets and liabilities based on differences between the carrying amount stated in the financial statements and the tax base assets and liabilities using statutory tax rates. The Company reviews regularly deferred tax assets in terms of possible recovery, considering the history of earnings generated and projected future taxable income, based on a technical feasibility study.b. Provision for tax, civil, and labor contingenciesThe Company is a party to several lawsuits and administrative proceedings. Provisions are recognized for all contingent liabilities arising from lawsuits that represent probable losses and can be reliably estimated. The probability assessment includes assessing available evidences, the hierarchy of laws, available previous decisions, most recent court decisions and their relevance within the legal system, and the assessment of the outside legal counsel. Management believes that these provisions for tax, civil and labor contingencies are fairly presented in the financial statements.c. Retirees’ healthcare planThe current amount of the retirees’ healthcare plan is contingent to a series of factors determined based on actuarial calculations that update a series of assumptions, for example, the discount and other rates.d. Stock option planThe stock option plan, the stock option plan of restricted shares and the program for acceleration of the strategy are measured at fair value on the granting date and are expensed during the vesting period as a balancing item to “Additional paid-in capital”, in shareholders’ equity. At the end of the reporting period, the Company’s management reviews

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its estimates on the number of options/restricted shares vesting based on the conditions fulfilled and, when applicable, recognizes in the income statement for the year the effect arising from the revision of the initial estimates as a balancing item to shareholders’ equity.e. Provision for acquisition of non-controlling interestIt reflects the commitment of acquiring non-controlling interests resulting from a business combination, which is measured at fair value at acquisition date, also subsequent changes for revaluation of the obligation must be recognized in P&L for the year.

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10.6. The Officers must describe the relevant items not shown in the financial statements of the Company, indicating:

(a) the assets and liabilities held directly or indirectly by the Company that do not appear on its balance sheet (off balance sheet items), such as (i) operating leases, assets and liabilities; (i) portfolios of written off receivables for which the entity continues to carry risks and responsibilities, indicating the respective liabilities; (ii) contracts for the future purchase and sale of products or services; (iv) contracts for unfinished construction projects; and (v) contracts for the receipt of financing in the future

The Company does not maintain any operations, contracts, obligations or other types of commitment with unconsolidated subsidiaries or other liability operations that could generate relevant effects, in the present or future, on its financial situation and/or changes in its financial situation, revenues or expenses, operating income, liquidity, capital costs or capital resources that are not recorded on its balance sheet.

On December 31, 2015, the Company maintained commitments arising from operating lease agreements for properties where some of its subsidiaries are located abroad, registered offices, distribution centers in Brazil, and properties where “Casas Natura” are located abroad.

The agreements have lease terms from one to ten years and do not contain clauses establishing the option to purchase upon expiration, but do allow timely renewals based on conditions in the market in which they are executed, on average every two years.

The commitment undertaken regarding the future considerations of these operating lease agreements on December 31, 2015, amounted to R$98.5 million.

(b) Other items not shown on the financial statements

There are no other relevant items that do not appear in our financial statements.

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10.7. For each item not shown on the financial statements indicated in item 10.6, the Officers must comment on:

a. how such items change or could come to change the revenues, expenses, operating income, financial expenses or other items on the financial statements of the Company

Not applicable.

b. (b) the nature and purpose of the operation

Not applicable.

c. (c) the nature and amount of liabilities undertaking and the rights generated on behalf of the Company as a result of the operation

Not applicable.

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10.8. The Officers must indicate and comment on the main elements of the Company’s business plan, exploring the following topics in particular:

(a) Investments, including: (i) quantitative and qualitative description of the ongoing investments and projected investments; (ii) funding sources of the investments; and (iii) the relevant ongoing divestments and projected divestments

Investments

Our operating activities require regular investments, particularly those related to the development of our infrastructure and the acquisition of items used in our business, such as machinery, software, tools, vehicles and industrial molds. Such investments are in general guided by the need to meet the growing demand for our products.

The following table shows the investments made in the periods indicated:

Fiscal year ended on December 31,2015 2014 2013

(in R$ million)Information technology software and equipment 62.8 41.1 85.5Machinery, tools and accessories 24.9 48.5 71Vehicles 26.4 22.3 29Buildings and facilities 8.2 16.4 8.6Molds (1) 32.9 19.3 38.6Computer machinery and equipment 9.6 9.5 6.6Furniture and fixtures 10.6 8.4 5.1Fixed asset in progress/ advances to suppliers 185.2 322.4 302Other investments 22.4 17.8 7.5Total investments 383.0 505.7 553.9Capital Budget 385,0 500,0 550,0Change % -0,5% 1,1% 0,7%

(1) These are steel molds made especially for use by our suppliers to produce plastic bottles and packaging for our products. We hold ownership of these molds.

We plan to continue the efforts to obtain gains in operating efficiency and productivity based on the infrastructure platform already installed and an increase in scale.

Since 2009, our logistics structure has undergone significant transformations. We aim to ensure that our products reach the hands of our consultants and consumers even faster, with a reduction in cost per order and in greenhouse gas emissions.

In 2011, we inaugurated a Distribution Center (DC) and three more DCs underwent capacity expansion, with the lines substituted. Equipped with high technology picking lines, high levels of automation and low energy consumption, we are prepared to meet a higher number of orders, including those with fewer items, allowing for deliveries to be divided into smaller batches. This allows for productivity gains and a reduction in order costs.

In 2013, we continued to decentralize our logistics operations (with investments in a Distribution Center and a hub, both in São Paulo). With the investments made, we accelerated by almost two years the planning schedule for revamping the logistics network. In our international operations, we also obtained efficiency gains in the logistics operations, with new planning for the distribution operations in Latin America, which centralized services in Colombia and Mexico. We consolidated the perfume bottling operations in Argentina, which

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was begun in 2010, and we began to produce soaps in Colombia. With these initiatives, we expect to significantly increase the percentage of products manufactured locally.

In 2014, we launched the Ecoparque in Benevides (Pará), an industrial complex that plans to generate sustainable business opportunities based on the Amazon's social and biodiversity and foster local entrepreneurship, which currently focuses on producing soap bars. We also launched the fourth plant in Cajamar and the new distribution center in São Paulo and started investments to implement SAP in our international operations, in addition to continuing to invest in Digital Technology.In 2015, we concluded the implementation of the SAP system in our Latin America operations, opened 37 Aesop stores in various countries and made investments in Brazil to capture productivity gains.Capital Budget for 2016:The Company's Management clarifies that the resources of the Capital Budget approved at the Extraordinary and Ordinary General Meeting held on April 15, 2016 in the amount of R$ 350,000,000.00 will be used to meet the necessary investments in Capex to consolidate the Company's growth plans.The company will be invest R$ 213,000,000 in Brazil, R$ 81,000,000 in Aesop and the remaining R$ 56,000,000 in Latam. In Brazil, the investments will be destined to maintain our infrastructure, to advance digital technologies, productivity projects and efficiency of the industry and also in the new distribution channels. At Latam we will make investments in maintenance and also in the expansion of infrastructure, as well as technology and new channels. Finally, the investments in Aesop will primarily be destined to the opening of new stores.

b. if already disclosed, inform the acquisition of plants, equipment, patents or other assets that may materially influence the issuer's production capacityNot applicable

c. new products and services, informing: (i) description of the ongoing research already disclosed; (ii) total amounts spent by the issuer in research for the development of new products or services; (iii) projects under development already disclosed; (iv) total amounts spent by the issuer in the development of new products or services.The Company has a plan for launching new products that is aligned with market trends. In 2014, the Company invested R$124.7 million in research for the development of new products, and in 2013 it invested R$117.1 million in this activity. These investments have been consistent over the past few years. In 2015, the Company invested R$137 million in research for the development of new products.

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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

The Officers are of the opinion that there are no other factors that materially influenced operational performance that were not identified or commented on in the other items of this Section 10.

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11. Forecasts11.1 Forecasts and assumptions disclosed

11.1 Forecasts must identify:

a. the subject-matter of the forecastI) Investments- CAPEX

b. the period forecast and the validity of the forecastFiscal year 2016, with validity in the same fiscal year.

c. the assumptions of the forecast, indicating which ones may be influenced by the Company’s management and which ones are beyond its control The assumptions on which the forecast is based are listed below:_The Company’s management adopts assumptions for the budget process that may influence these forecasts. The assumptions that are beyond the control of the Company include:

changes in interest and foreign exchange rates, particularly between the Brazilian real and the U.S. dollar;

changes in the Brazilian tax scenario and in the status of our contingencies; changes in the legal framework of direct selling activities in Brazil or Latin

America; new rules for accessing the genetic heritage and associated traditional

knowledge that prevent the use of biodiversity in our product innovation process; a stricter environmental legal framework, particularly with regard to solid waste,

water use and GHG emissions; change in the market's level of growth; entry of a major competitor in the industry; maintenance of the inflation rate at the historical levels of the last 3 years;

_The assumptions that may be influenced by Management include: amount of investments in marketing and sales; promotion and price strategies; execution of the plan for determining headcount and compensation; period for executing project sand investments (CAPEX). management of plant productivity.

d. values of the indicators that are the subject-matter of the forecast2016

*2015*

*2014*

*2013*

*2012*

*2011*

*2010*

*Investments (CAPEX) – R$ million

350.0 382.9 505.7 553.7 437.5 346.4 236.8*Projected**Actual

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11.2 Monitoring of forecasts and assumptions disclosed

11.2 If the issuer has disclosed, in the past three fiscal years, forecasts of the evolution in its indicator:

The Company does not disclose.

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12.Shareholders’ meeting and management12.1 Administrative structure

12.1 Describe the administrative structure of the issuer, in accordance with its Bylaws and charter, identifying:

(a) Responsibilities of each management body and committee, and whether they have their own charter

Board of DirectorsThe Board of Directors shall be responsible forI. regulating the affairs of the Company, and to take charge of, examine and deliberate

on, any matters that do not fall within the exclusive authority of the Shareholders’ Meeting or the Board of Executive Officers;

II. setting the general guidelines for the business of the Company; III. electing and removing from office the executive officers of the Company; IV. assigning the duties of each executive officer, and designating the Investor Relations

Officer, in compliance with the provisions hereof; V. taking action to call the Shareholders’ Meeting, at such times as the Board deems fit,

or in the case of Article 132 of the Corporation Law (Federal Law 6,404/76); VI. supervising the performance of the executive officers; examining at any time the

books and records of the Company; and requesting information on any contracts made or about to be made and any other acts;

VII. reviewing the quarterly results of operations of the Company; VIII. selecting and replacing the independent auditors; IX. calling for the presence of the independent auditors to provide clarification as

required; X. issuing an opinion on the Management Report and the accounts of the Board of

Executive Officers, and deciding on the submission thereof to the Shareholders’ Meeting;

XI. approving the annual and multi-annual budgets, strategic plans, expansion projects and investment programs, and following up on their implementation;

XII. approving the creation and dissolution of subsidiaries and the taking of ownership interests in other companies, in Brazil or abroad, as well as the establishment of branch offices, warehouses, offices and any other premises abroad;

XIII. ordering any inspection, audit or taking of accounts with respect to subsidiaries, Controlled companies or affiliates of the Company, or any foundations maintained by the Company;

XIV. previously discussing any matters to be submitted to the Shareholders’ Meeting; XV. authorizing the issuance of shares in the Company within the limits authorized in

Article 6 hereof, and setting the terms for any such issuance of shares, including as to price and payment, provided, further, that the Board may exclude preemptive rights or reduce the time period for exercise thereof in the case of shares, convertible debentures and warrants to be placed by way of sale on a stock exchange, public subscription or tender offer, in keeping with the provisions of law;

XVI. deciding on the purchase by the Company of the shares of its own capital stock to be held in treasury and/or subsequently cancelled or sold;

XVII. deciding on the issuance of warrants, as provided for in Paragraph 1st of Article 6 hereof;

XVIII. granting stock purchase or subscription options, under Stock Purchase or Subscription Option Plans adopted by the Shareholders’ Meeting, to the Managers and employees of the Company, as well as to the Managers and employees of other companies directly or indirectly controlled by the Company, without preemptive

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rights to the shareholders at the time of either award or exercise of such options, with due regard for the balance of the authorized capital at the time of exercise of stock subscription options, and the balance of treasury shares at the time of exercise of the stock purchase options;

XIX. setting the amount of any profit-sharing to the executive officers, managers and employees of the Company;

XX. deciding on the issuance of debentures; XXI. authorizing the Company to give a guaranty or security for the obligations of third

parties; XXII. approving the levels of authority and the policies of the Board of Executive Officers,

as well as any amendments thereof, including the rules governing (a) the acquisition of fixed and intangible assets and the assumption of financial obligations, (b) the encumbrance of fixed and intangible assets, (c) the contracting of any transactions to raise funds and the issuing of any securities to raise funds, such as bonds, notes, commercial papers, promissory notes and any other instruments typically used by the market, considering also the conditions for their issue and redemption, among other rules on levels of authority, and to oversee the compliance with such policies by the executive officers;

XXIII. defining the list of three firms specialized in economic appraisal in charge of preparing an appraisal report for the shares of the Company in the case of the Tender Offer for cancellation of registration as a publicly-held company or delisting from the Novo Mercado;

XXIV. approving the engagement of the institution that will serve as transfer agent for the book-entry shares of the Company;

XXV. with due regard for the provisions of these By-laws and prevailing legislation, regulating the proceedings of the Board and issuing or adopting internal regulations for its operation;

XXVI. issuing a favorable or unfavorable opinion on any tender offer to purchase shares of the capital stock of the Company, such opinion to be well-reasoned and to be issued no later than fifteen (15) days after publication of the notice for the tender offer, covering at least (i) the convenience and timeliness of the tender offer, in view of the interests of the shareholders as a whole and the liquidity of their securities; (ii) the repercussions of the tender offer on the interests of the Company; (iii) the strategic plans communicated by the offerer with regard to the Company; and (iv) other points that the Board of Directors may deem relevant, as well as any information required by the applicable rules issued by CVM; and

XXVII. deciding on (i) payment of interim dividends, pursuant to Article 28, Paragraph 3rd; and (ii) payment or credit to the shareholders of interest on shareholders’ equity during the fiscal year, in accordance with applicable legislation.

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Committees of the Board of Directors

In accordance with our Bylaws, the Board of Directors created four advisory committees to support it in assessing strategic themes for the business: Audit, Risk Management and Finance Committee; People and Corporate Development Committee; Strategy Committee and Corporate Governance Committee.Although each of the committees is chaired by a member of our Board of Directors, their members need not be Directors. Committee members are appointed and may be removed at any time by the Board of Directors.

_Audit, Risk Management and Finance Committee

The Audit, Risk Management and Finance Committee is responsible for ensuring the swift operation of internal and external audit processes, mechanisms and controls related to risk management, compliance of the financial policies with the strategic guidelines and risk profile of the business, while also ensuring the revision of the financial statements and related information disclosed to the market. This committee is composed of three members of the Board of Directors, one of whom an independent member. The Committee also includes one financial expert appointed by the Board of Directors as one of its members in the minutes of the meeting that elect its members. Additionally, the meetings of the Committee are also attended by two expert tax and financial consultants. Our internal audit management reports to the Audit, Risk Management and Finance Committee, which is responsible for recommending the external auditors engaged by the Company.

_People and Corporate Development Committee

The People and Corporate Development Committee is responsible for assisting the Board of Directors in taking decisions related to strategies, policies and rules related to Human Resources, Corporate Development, and Management Systems, and ensuring compliance therewith in relation to people planning and development, compensation and benefits of the management of the Company. This committee shall be composed of at least three (3) and no more than seven (7) members, with at least two (2) being members of the Board of Directors, one of whom shall chair the Committee.

_Strategy Committee

The Strategy Committee is responsible, among other things, for helping to monitor and guide our corporate strategy, observing the strategic guidelines approved by the Board of Directors, as well as for transmitting our concepts, values and beliefs and supporting our perpetuity. This committee shall be composed of at least three (3) and no more than six (6) members, with at least two (2) being members of the Board of Directors, one of whom shall chair the Committee.

_Corporate Governance Committee

The Corporate Governance Committee is responsible for monitoring the operations of the Company’s entire corporate governance system, following the evolution of best international corporate governance practices and for proposing adjustments and improvements to the Company’s corporate governance system whenever it deems necessary. The Committee also ensures compliance with the corporate governance guidelines approved by the Board. This committee shall be composed of at least three (3) and no more than five (5) members, with at least two (2) being members of the Board of Directors, one of whom shall chair the Committee.

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Board of Executive Officers

The members of the Board of Executive Officers (“Officers”) are our legal representatives, and are responsible primarily for managing the Company’s daily activities and implementing the general policies and guidelines set by the Board of Directors.In accordance with Brazilian Corporation Law, every member of the Board of Executive Officers shall reside in Brazil, and may be a shareholder of the Company or not. Furthermore, up to one third of the positions on the Board of Executive Officers may be held by members of the Board of Directors.Officers are elected by the Board of Directors to serve a term of office of 3 years, reelection being allowed, and may be removed by the Board at any time. In accordance with our Bylaws, the Board of Executive Officers shall be composed of at least four (4) and no more than ten (10) members, one of whom being the Chief Executive Officer, one Chief Financial Officer, and the others Operational Officers.All new members of the Board of Executive Officers must sign the Consent to Appointment of Managers (“Consent to Appointment”), their investiture being conditioned on the execution of said instrument. Through the Consent to Appointment, the new officers personally undertake to act in compliance with the Novo Mercado Listing Agreement, the Regulations of the Market Arbitration Chamber (created by BM&FBOVESPA – “Market Arbitration Chamber”) and with the Novo Mercado Listing Regulations.The Board of Executive Officers shall be responsible for the following:I. to comply with and enforce the By-laws of the Company and the resolutions passed

by the Board of Directors and the Shareholders’ Meeting; II. to prepare and submit each year to the Board of Directors a strategic plan, the

annual revisions thereof, and the general budget of the Company, and to see to their implementation;

III. to resolve on the opening, relocation and closing of branch offices, warehouses, offices and any other premises of the Company in Brazil;

IV. decide on, within the limits of authority established by the Board of Directors, the acquisition, sale and/or encumbrance of fixed and intangible assets and financial commitments associated with projects in which the Company intends to invest;

V. to submit each year for review to the Board of Directors a Management Report and the accounts of the Board of Executive Officers, together with the report of the independent auditors and the proposed application of the income for the preceding year; and

VI. to submit every quarter to the Board of Directors a detailed trial balance sheet of the Company and its Controlled Companies.

Audit Board

In accordance with Brazilian Corporation Law, the Audit Board is independent from the Company’s management and external audit. The main responsibility of the Audit Board is to oversee the acts of the managers and analyze the financial statements, reporting their findings to shareholders.As authorized under Brazilian Corporation Law, our Audit Board is not permanently installed. Whenever it is, it shall be composed of three members and their respective alternates. Under Brazilian Corporation Law, the Audit Board may be installed upon request in the Shareholders’ Meeting, of shareholders representing at least 10% of the shares, with its members holding office until the first Annual Shareholders' Meeting to follow their election. Since the Company has non-controlling shareholders representing at least 10% of its shares, in accordance with the CVM, non-controlling shareholders gathered in a Shareholders’ Meeting may elect a member to the Audit Board, regardless of the number of shares they hold.

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The members of the Audit Board may not be members of the Board of Directors, Board of Executive Officers or employees of a subsidiary or other company of the same group, nor spouse or relative of any member of the management. In addition, Brazilian Corporation Law determines that members of the Audit Board shall be paid compensation equivalent to at least 10% of the average compensation paid to Officers, excluding benefits, representation fees and profit sharing.When installed, all new members of the Audit Board must subscribe to the “Consent to Appointment of Members of the Audit Board,” with their investiture conditioned upon the execution of said instrument. Through the “Consent to Appointment of Members of the Audit Board”, the new members of the Company’s Audit Board personally undertake to act in compliance with the Novo Mercado Listing Agreement, the Regulations of the Market Arbitration Chamber and the Novo Mercado Listing Regulations.

(b) date of installation of the audit board, if not a permanent body, and of creation of the Committees

Our Audit Board is not currently installed. Our Audit, Risk Management and Finance Committee was created on July 27, 2000, the People and Corporate Development Committee was created on March 6, 2001, the Strategy Committee was created on October 5, 2005 and the Corporate Governance Committee was created on April 26, 2004.

(c) mechanisms to assess the performance of each body or committee and their members, and identification of the assessment method

The Board of Directors is responsible for establishing an evaluation process of its performance and the performance of its committees. Historically, this process has been conducted through a self-evaluation made in most years. This self-evaluation is submitted for validation by the Corporate Governance Committee. However, the process was not conducted during fiscal year 2015.

(d) in relation to members of the executive board, their responsibilities and individual powers

_Responsibilities of the Chief Executive Officer

According to our Bylaws, the Chief Executive Officer is responsible, in addition to coordinating the action of Officers and guiding the general planning activities of the Company, for: (i) calling and presiding over meetings of the Board of Executive Officers; (ii) keeping the members of the Board of Directors abreast of the affairs of the Company and the progress of its operations; (iii) proposing to the Board of Directors, on its own non-exclusive initiative, the duties to be assigned to the executive officers; and (iv) carrying out such other duties as are assigned by the Board of Directors._Responsibilities of the Chief Financial and Investor Relations Officer

According to our Bylaws, the Chief Financial Officer is responsible for (i) planning, implementing and coordinating the financial policies of the Company, and for organizing, preparing and monitoring its budget; (ii) preparing financial statements and managing the accounting activities and the treasury of the Company, in compliance with applicable legal requirements; (iii) providing guidance to the Company on any decision-making that involves financial risks; (iv) preparing financial reports and providing information on his areas of responsibility to the bodies of the Company; and (v) planning and carrying out management policies for his areas of responsibility._Responsibilities of Operational Officers

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According to our Bylaws, Operational Officers are responsible, among other responsibilities attributed thereto by the Board of Directors, for (i) promoting the development of the Company’s activities in keeping with its corporate purpose; (ii) coordinating the activities of the Company and its subsidiaries; (iii) managing the budget of the areas of the Company under their responsibility, by keeping control over management and costs; (iv) coordinating the activities of their area and specific responsibilities with those of other officers; and (v) representing the Company before clients, the press, society and legal, business and governmental agencies, preserving the interests of the organization and its image.

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12.2 Describe the rules, policies and practices applicable to shareholders’ meetings

(a) Call notices – period

First call is made at least 15 days prior to the Meeting, and second call at least 8 days prior to the meeting. However, under certain circumstances, CVM may determine first call to shareholders' meetings to be made at least 30 days prior to the meeting, on which date the documents related to the matters to be discussed and voted in the meeting are made available to shareholders.

(b) Powers and responsibilities

The Shareholders’ Meeting shall be responsible, in addition to the requirements of law, for: I. electing and removing from office the members of the Board of Directors and the

members of the Audit Committee, when applicable; II. setting the aggregate remuneration of the members of the Board of Directors and of

the Board of Executive Officers, as well as the compensation of the members of the Audit Committee, when installed;

III. paying stock dividends and approving any stock split or reverse stock split; IV. approving stock purchase or subscription option plans for the Managers and

employees of the Company, as well as for the Managers and employees of other companies directly or indirectly controlled by the Company;

V. deciding on the allocation of the net income for the year and the distribution of dividends;

VI. appointing a liquidator and the Audit Committee that will serve during the period of liquidation;

VII. deciding on delisting the Company from the Novo Mercado listing segment of the BM&FBOVESPA - Bolsa de Valores Mercadorias e Futuros – (“BM&FBOVESPA”); and

VIII. selecting the specialized firm or entity charged with preparation of an appraisal report for the shares of the Company, in the case of cancelation of registration as publicly-held company or delisting from the Novo Mercado, as provided in Chapter V hereof, from a list of specialized firms or entities produced by the Board of Directors.

(c) Addresses (physical or electronic) where documents related to the Shareholders' Meeting will be made available to shareholders for examination

_Electronic

www.natura.net/investidor www.cvm.gov.br www.bmfbovespa.com.br

_Physical

Avenida Alexandre Colares, n° 1188, Vila Jaguara, São Paulo/SP, CEP 05106-000.

(d) Identification and management of conflicts of interest

In case any shareholder has conflicts of interest with any matter included in the meeting agenda, in accordance with Brazilian law, said shareholders shall be prevented from casting votes in the Shareholders' Meeting. Managers, in their capacity as shareholders or proxies,

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are also prohibited from voting in matters regarding documents prepared by the management (Article 133 of Brazilian Corporation Law) and on the Audit Board Report, if applicable.

(e) Proxy solicitation by the management for exercise of voting rights

Shareholders may be represented by proxy constituted within one year of the Shareholders' Meeting, provided said proxy is a shareholder of the Company, manager or attorney, or also through a financial institution. Investment funds must be represented by their administrator. Managers may not vote as proxies on matters regarding documents prepared by the management (Article 133 of Brazilian Corporation Law) and on the Audit Board Report, if applicable.

(f) formalities required for accepting the proxy instruments granted by shareholders, stating whether the issuer requires or waives notarization, registration with the consulate and sworn translation, and whether the issuer accepts electronic proxies

In the call notices, the Company recommends shareholders to file their proxy instruments for voting in shareholders’ meetings prior to the meeting. In addition to the proxy, if applicable, for participating in shareholders’ meetings, shareholders must present documents evidencing their identity and ownership of Natura stock.The Company does not accept electronic proxy instruments.(g) formalities required for accepting distance voting ballots when sent directly to the

company, stating whether the issuer requires or waives authentication of signature, notarization or consularization

The Company does not prepare distance-voting ballots and does not accept the submission of such documents directly by shareholders.

(h) whether the company has an electronic system for receiving distance voting ballots or distance participation lists

The Company does not have an electronic system for receive distance-voting ballots.

(i) whether instructions for shareholders or groups of shareholders include proposals for voting, slates or candidates for positions on the board of directors and on the audit board on the distance voting ballot

The Company does not have an electronic system for receiving distance-voting ballots.(j) Whether the company maintains forums and websites created to receive and share

shareholders’ comments on meeting agendas

Our Company does not use such websites. We have a public internet website where shareholders and other users may post and share comments on the Company and its products.(k) other information required for distance participation and the exercise of distance voting

The Company does not offer shareholders mechanisms for participating at a distance in meetings or for the exercise of distance voting.

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12.3 Rules, policies and practices applicable to the Board of DirectorsThe election and number of members of the Board of Directors shall be established in the shareholders’ meetings by majority vote of shareholders. As a rule, Directors are elected in the Annual Shareholders' Meeting for a unified term of office of 2 years, reelection being allowed, and may be removed from their position at any time by shareholders in a shareholders’ meeting.Brazilian Corporation Law, jointly with CVM Instruction 282 of June 26, 1998, allows the adoption of a cumulative vote process, upon request of shareholders representing at least 5% of the Company’s voting capital. In case cumulative voting is not requested, Directors are elected by majority vote of the shareholders of record. Also, according to Brazilian Corporation Law, common shareholders of the Company representing 15% of the capital stock, may combine their shares to elect or remove from office, in a separate voting, one member of the Board of Directors and the respective alternate. All new members of the Board of Directors must subscribe to the Instrument of Investiture and Consent to Appointment to the Novo Mercado rules. Through the Consent to Appointment, the new members of the Board of Directors personally undertake to act in compliance with the Novo Mercado Listing Agreement, the Regulations of the Market Arbitration Chamber and with the Novo Mercado Listing Regulations.Our Board of Directors is currently composed of 9 members, who were elected in the Annual Shareholders' Meeting held on April 15, 2016. Their term of office shall end on the date of the next Annual Shareholders' Meeting to be held in 2012.The Novo Mercado Regulation of BM&FBOVESPA and our Bylaws require that at least 20% of the members of the Board of Directors be “Independent Directors.” In accordance with the Novo Mercado Regulations, Independent Directors may not: (i) be linked to the Company, except as a shareholder; (ii) be a controlling shareholder, spouse or relative of up to second degree, or be or has been, in the last three years, linked to a company or entity related to the controlling shareholder (persons related to public education and/or survey institutions are not included in this restriction); (iii) have been, in the last three years, an employee or officer of the Company, of our controlling shareholder or of any subsidiary of the Company; (iv) be an employee or purchases, whether directly or indirectly, services and/or products of the Company, in a scale that may lead to loss of independence; (v) be an employee or manager of a company or entity that provides or demands services and/or products to/from the Company; (vi) be a spouse or relative of up to second degree of any manager of the Company; and (vii) receive any other compensation from the Company other than the one due to its Directors (cash dividends from stockholding are not included in this restriction). “Independent Directors” will also be deemed as those elected in accordance with the provisions in Paragraphs 4 and 5, Article 141 of Brazilian Corporation Law, which include the necessary forum and form of election of members of the Board of Directors by non-controlling shareholders.When, as a result of compliance with the 20% requirement mentioned above, the number of Directors results in a fraction, it shall be rounded to (i): (i) the immediately higher integer, when the fraction is equal or greater than 0.5; or (ii) the immediately lower integer, if the fraction is lower than 0.5. The decisions of the Board of Directors are taken by majority vote of the members present in any given meeting.

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Frequency of the MeetingsThe Board of Directors will meet, ordinarily, four times a year and, extraordinarily, whenever called by its Co-Chairman appointed to preside over the meetings of the Board of Directors or by the majority of its members. In 2015, the Board held 4 ordinary meetings and 6 extraordinary ones. The meetings of the Board may be held, exceptionally, via conference call, video conference, e-mail or any other form of communication. Call notices to the meetings are made at least 72 hours prior to the meeting. All decisions taken by the Board of Directors are transcribed in minutes that are drawn up in the Company’s Book of Minutes and signed by the Directors present.Any provisions in shareholders' agreement that place restrictions or conditions for the exercise of voting rights by directors.Not applicable to the Company.Rules to identify and manage conflicts of interestPursuant to our Bylaws, a director cannot have access to information or participate in meetings dealing with matters in which he has or represents conflict of interest with the Company.

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12.4 Description of the arbitration clause for the resolution of conflicts through arbitration.

12.4 If any, describe the arbitration clause in the Bylaws to resolve conflicts between shareholders and the issuer through arbitration

In accordance with our Bylaws, the Company, its shareholders, managers and members of the Audit Board agree to resolve by arbitration, any and all disputes or controversies that arise between them concerning or arising from, in particular, the application, validity, effectiveness, interpretation and effects of the provisions of Brazilian Corporate Law, of the Company’s Bylaws, of the rules issued by the National Monetary Council, the Central Bank of Brazil and the Securities and Exchange Commission of Brazil, and any other rules applicable to the capital markets in general, as well as those in the Novo Mercado Regulations, Novo Mercado Listing Agreement and Arbitration Regulations of the Market Arbitration Chamber Regulations.

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12.5/6 Composition and professional background of directors, officers and audit board members

Name Date of Birth Administrative Organ Election Date Term of Office Consecutive number of mandates

Individual Tax Payer Id (CPF) Profession Elective Position Data Ownership Elected by the controller Percentage of participation in meetings

Other position and function exercised in the issuer Description of other office/ funtionRobert Claus Chatwin 05/16/1970 Belongs only to the Board of Directors 04/28/2015 3 Years 0570.897.013- 87 Economist 19 - Others Directors 05/01/2015 Yes 0.00%Don´t exercise other positions and funtions Operational Executive DirectorAgenor Leão de Almeida J unior 09/17/1973 Belongs only to the Board of Directors 04/28/2015 3 Years 0706.439.545- 20 Data processing 19 - Others Directors 05/01/2015 Yes 0.00%Don´t exercise other positions and funtions Operational Executive DirectorGerson Valença Pinto 04/09/1964 Belongs only to the Board of Directors 04/28/2015 3 Years 0104.403.718- 05 Chemical 19 - Others Directors 05/01/2015 Yes 0.00%Don´t exercise other positions and funtions Operational Executive DirectorRoberta Salvador dos Santos 01/22/1973 Belongs only to the Board of Directors 04/28/2015 01/09/2016 0045.468.177- 11 Laywer 19 - Others Directors 05/01/2015 Yes 0.00%Don´t exercise other positions and funtions Operational Executive DirectorRoberto Oliveira Lima 04/01/1963 Belongs only to the Board of Directors 04/28/2015 3 Years 0860.196.518- 00 Business Administrator 10 - CEO / Superintendent 05/01/2015 Yes 0.00%Don´t exercise other positions and funtionsJ oão Paulo Brotto Gonçalves Ferreira 12/09/1967 Belongs only to the Board of Directors 04/28/2015 3 Years 0050.269.878- 00 Eletric Engineer 19 - Others Directors 05/01/2015 Yes 0.00%Don´t exercise other positions and funtions Operational Executive DirectorJ osé Roberto Lettiere 03/09/1963 Belongs only to the Board of Directors 04/28/2015 3 Years 0054.147.548- 70 Business Administrator 12 - Director of Investor Relations 05/01/2015 Yes 0.00%Director of Investor Relations

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of 293

Name Date of Birth Administrative Organ Election Date Term of Office Consecutive number of mandates

Individual Tax Payer Id (CPF) Profession Elective Position Data Ownership Elected by the controller Percentage of participation in meetings

Other position and function exercised in the issuer Description of other office/ funtionAndrea Figueiredo Teixeira Álvares 07/01/1971 Belongs only to the Board of Directors 04/26/2016 2 Years 0561.029.761- 34 Business Administrator 19 - Others Directors 04/26/2016 Yes 0.00%

Operational Executive DirectorPedro Luiz Barreiros Passos 06/29/1951 Belongs only to the Administrative Council 04/26/2016 1 Year 12672.924.618- 91 Engineer 29 - Other Board Member 04/26/2016 Yes 100.00%Member of the Comittee as item 12.7 Co Chairman of the Administrative CouncilGuilherme Peirão Leal 02/22/1950 Belongs only to the Administrative Council 04/26/2016 1 Year 12385.599.108- 63 Business Administrator 29 - Other Board Member 04/26/2016 Yes 100.00%Member of the Comittee as item 12.7 Co Chairman of the Administrative CouncilSilvia Freire Dente da Silva Dias Lagnado 08/25/1963 Belongs only to the Administrative Council 04/15/2016 1 Year 1000.000.000- 00 Executive 27 - Independent Adm. Council (Active) 04/15/2016 Yes 100.00%Member of the Comittee as item 12.7Giovanni Giovannelli 06/22/1972 Belongs only to the Administrative Council 04/15/2016 1 Year 1057.856.767- 96 Business Administrator 27 - Independent Adm. Council (Active) 04/15/2016 Yes 100.00%Member of the Comittee as item 12.7Marcos de Barros Lisboa 08/02/1964 Belongs only to the Administrative Council 04/15/2016 1 Year 5806.030.257- 49 Economist 27 - Independent Adm. Council (Active) 04/15/2016 Yes 100.00%Member of the Comittee as item 12.7Antonio Luiz da Cunha Seabra 03/23/1942 Belongs only to the Administrative Council 04/26/2016 1 Year 12332.927.288- 00 Economist 29 - Other Advisers 04/26/2016 Yes 100.00%Member of the Comittee as item 12.7 Co Chairman of the Administrative CouncilPlínio Villares Musetti 01/27/1954 Belongs only to the Administrative Council 04/15/2016 1 Year 4954.833.578- 68 Engineer 22 - Administrativo Council (Active) 04/15/2016 Yes 100.00%Member of the Comittee as item 12.7Carla Schmitzberger 06/21/1962 Belongs only to the Administrative Council 04/15/2016 1 Year 0667.280.967- 87 Engineer 27 - Independent Adm. Council (Active) 04/15/2016 Yes 0.00%

Roberto de Oliveira Marques 07/13/1965 Belongs only to the Administrative Council 04/15/2016 1 Year 0000.000.000- 00 Business Administrator 27 - Independent Adm. Council (Active) 04/15/2016 Yes 0.00%

Professional Experience / Declaration of eventual convictions / Independence CriteriaRobert Claus Chatwin - 570.897.013- 87

Agenor Leão de Almeida J unior - 706.439.545- 20

Gerson Valença Pinto - 104.403.718- 05

Roberta Salvador dos Santos - 045.468.177- 11

Roberto Oliveira Lima - 860.196.518- 00

Not suffered any criminal conviction, any conviction in an administrative proceeding of the CVM or any final conviction in the judicial or administrative, which has suspended ordisqualified to practice a professional or commercial activity.

Holds a degree in economics and an MBA from IMD in Switzerland. He is also a chartered accountant certified by the Institute of Chartered Accountants in England and Wales (ICAEW). He held several positions at Royal Philips Electronics, including as Global CEO of Philips Avent, Vice President of Mergers and Acquisitions and Vice President of Strategy and New Business Development in the Consumer Goods Division in Amsterdam, and at Philips LATAM in São Paulo. He also worked at HSBC Investment Bank in London and at KPMG Corporate Finance in London and in Brazil.


Has a degree in data processing from the Federal University of Bahia (UFBA). He has an MBA in Business Management from the FGV, a graduate degree in Strategic People Management from the School of Economics, Business Administration and Accounting from the University of São Paulo (FEA- USP) and PMD at the Institute of Higher Business Studies (IESE) of the University of Navarra in Spain. He worked in Vivo for 13 years, leading major projects.


Has a degree in chemistry. He has dedicated more than 25 years to innovation in large companies, such as Unilever, J ohnson & Johnson and PepsiCo, having worked at diverse places around the world.

Has a law degree from the Pontifical Catholic University of Rio de J aneiro and has completed specialization program in Strategic Human Resources Management at INSEAD in France. She has worked in the legal department at Oi/Telemar and was general counsel at IBM.Not suffered any criminal conviction, any conviction in an administrative proceeding of the CVM or any final conviction in the judicial or administrative, which has suspended ordisqualified to practice a professional or commercial activity.

Holds a bachelor’s degree in Public Administration and a graduate degree in Accounting and Finance Management from the Fundação Getúlio Vargas (FGV), and a graduate degree in Strategic Planning from Institut Superieur des Affaires in France. He has worked in the Saint Gobain, Rhodia and Accor groups. He has also presided over Credicard and Vivo. He has served on the boards of several companies in Brazil and abroad. In January 2014, he became chairman of the Publicis Group Worldwide in Brazil.


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Professional Experience / Declaration of eventual convictions / Independence CriteriaJ oão Paulo Brotto Gonçalves Ferreira - 050.269.878- 00

J osé Roberto Lettiere - 054.147.548- 70

Andrea Figueiredo Teixeira Álvares - 561.029.761-34

Pedro Luiz Barreiros Passos - 672.924.618- 91

There is an independent member, according to the criterion set out in the New Market Listing Rules.

Currently, Peter holds the following positions in other companies or third sector organizations: (i) Director of Passos Participações S.A .; (Ii) Director of Anima Investimentos Ltda .; (I ii) Chairman of the Board Totvs; (Iv) Member of the IPT Board; (V) Member of IEDI Council; (Vi) Member of the Fapesp Council; (Vii) Member of Endeavor Council; (Viii) Member of the Council of Don Cabral Foundation; (Ix) Chairman of SOS Atlantic Forest; (X) Member of the Institute sown Council.

Has a degree in electronic engineering from USP and an MBA from the University of Michigan. Previously, he served as Vice President of Supply Chain at Unilever, where he worked for 20 years. In 2009, he joined Natura as Vice President of Operations and Logistics.


Has a degree in Business Administration from the Fundação Getúlio Vargas in São Paulo, with specialization in finance. He has participated in several career development programs, including the Executive Development Program at the Graduate School of Business of the University of Chicago, the Mastery Reengineering Finance Program - Hammer and Company in Boston, the Leadership Program at INSEAD and Corporate Governance Program at the IBGC.He built his career in consumer goods multinationals, starting with Unilever in 1986 as trainees, where he worked for 17 years holding strategic positions in finance and general management in Brazil and abroad. Between 2004 and 2008, he was Vice President of Finance at PepsiCo do Brasil Ltda. From March 2009 to April 2015, he was CFO of Alpargatas S/A.He was elected CFO of the year 2012 by the Brazilian Institute of Finance Executives (IBEF): He has won the Equilibrista award. Mr. Lettiere is currently Executive Vice President of IBEF.Not suffered any criminal conviction, any conviction in an administrative proceeding of the CVM or any final conviction in the judicial or administrative, which has suspended ordisqualified to practice a professional or commercial activity.

Holds a B.S. in Business Administration from the Getúlio Vargas Foundation (FGV). Previously she served as head of the snacks division of PepsiCo in Latin America. Prior to PepsiCo, where she worked for 15 years, she served for seven years at Procter&Gamble in Brazil as a grouper of new businesses and brand manager.Not suffered any criminal conviction, any conviction in an administrative proceeding of the CVM or any final conviction in the judicial or administrative, which has suspended ordisqualified to practice a professional or commercial activity.

Is co- chairman of the Board of Directors of Natura and co- founder of the Company. He is a director of Natura Institute. Since 2013, he serves as Chairman of the Board of Directors of TOTVS. Mr. Passos graduated in Production Engineering from Escola Politécnica of the University of São Paulo and an extension in Business Administration from Fundação Getúlio Vargas. Mr. Passos dedicates his time to various entities and organizations. He was President of the Institute of Studies for Industrial Development (IEDI) from 2009 to 2015, when he became director of the institute. In 2013, he became President of Fundação SOS Mata Atlântica. He has been a member of Curating Board of the National Quality Foundation (FNO) since 2003, and of the Boards of Directors of Instituto Empreender Endeavor since 2005, of the Technological Research Institute (IPT) since 2006, of the Dom Cabral Foundation (FDC) since 2010. He is also a member of the Business Engagement for Innovation (MEI).


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Professional Experience / Declaration of eventual convictions / Independence CriteriaGuilherme Peirão Leal - 383.599.108- 63

There is an independent member, according to the criterion set out in the New Market Listing Rules.Silvia Freire Dente da Silva Dias Lagnado - 000.000.000- 00

Is an independent member, according to the criterion set out in the New Market Listing Rules.

Graduated in Business Administration from the University of São Paulo (USP) and attended the Advanced Administration Program from Fundação Dom Cabral/ INSEAD. He is co- chairman of the Board of Directors and one of the founders of Natura. He is also a director of Natura Institute. Over the past 25 years, he has participated in the creation and promotion of various companies and social organizations, such as Fundação Abrinq para os Direitos da Criança e do Adolescente (Abrinq Foundation for Children’s Rights), Instituto Ethos de Empresas de Responsabilidade Social (Ethos Institute of Companies and Social Responsibility) and Instituto Akatu para o Consumo Consciente (Akatu Institute for Conscious Consumption). He also participated in institutions such as Ashoka - Empreendedorismo Social (Ashoka – Social Entrepreneurship). After 2000, he closely engaged in various environmental institutions, such as the Fundo Brasileiro para a Biodiversidade (Brazilian Fund for the Biodiversity) (Funbio) and WWF Brasil. In 2007, he was one of the founders of Movimento Nossa São Paulo, intended to articulate various sectors of the local society for a better, fairer and more sustainable city. Since 2008 he has been structuring his legacy through Arapyaú Institute, an organization dedicated to education and sustainable development. In the 2010 national elections, he joined former Senator Marina Silva, then a member of the Green Party (Partido Verde), as candidate for Vice President. Together, they received approximately 20 million votes. In 2012, he helped founding Rede de Ação Política pela Sustentabilidade (Political Action Network for the Sustainability - RAPS), an institution not related to any party dedicated to supporting, developing and bringing together the best political leaders committed to ethical values and to the construction of inclusive and sustainable development. The same year, he became part of B–Team, a group composed of international leaders aimed at engaging corporations and leaders from all over the world with t new vision of successful business ventures, by incorporating profits to social and environmental goals.

Currently, William holds the following positions in other companies or third sector organizations: (i) Chief Executive Officer Management GPLeal e Participações Ltda .; (Ii) Director of J anos Administration e Participações Ltda .; (I ii) President of Utopia Participações S.A .; (Iv) Executive Director of Administration and Daedalus Participações Ltda .; (V) Executive Director of Administration and Homagus Participações Ltda .; (Vi) Executive Director Homagus Asset Management Ltda .; (Vii) Vice President of Administration Axiom e Participações Ltda .; (Viii) Chief Executive Officer of Administration and Apoena Participações Ltda .; (Ix) Executive Director of SG Debret Participações Ltda .; (X) Executive Director Modusvivendi Participações Ltda .; (Xi) Member of the Board of Ethics and the Ethos Institute Corporate Social Responsibility; (Xii) Chairman of the Board Director of Political Action For Sustainability Network - RAPS; (Xiii) Co- founder of The BTeam; (Xiv) the Board of Directors Member Arapyaú Institute of Education and Sustainable Development; (Xv) Member of the Board of Directors - J anos Holding Consultoria Ltda .; (Xvi) Member of the Board of Directors Biofílica Investments Environmental S / ANot suffered any criminal conviction, any conviction in an administrative proceeding of the CVM or any final conviction in the judicial or administrative, which has suspended ordisqualified to practice a professional or commercial activity.

Graduated from the Polytechnic School of the University of São Paulo in 1986. She was Chief Marketing Officer and CEO of Bacardi Global Brands from J une 2010 to November 2012. She also worked at Unilever from 1986 to 2010, reaching the position of Global Executive Vice President of the Culinary Division, in addition to serving in several other international positions during her 25 years with the company. As Executive Vice President of the Culinary Category, based in London, she supervised the entire business unit, including Soups, Sauces, Broths and Frozen Products. While at Unilever, she also acted as Senior Global Vice President of the Dove Brand, based in the United States, and Vice President of Deodorants in Latin America, based in Buenos Aires. She served as an independent member of the Boards of Nuelle Inc., a US- based company, Sapient, in Boston, MA, and Britvic Plc., a soft drink production and marketing company in the United Kingdom. She is currently Executive Vice- President and Currently, Silvia holds the following positions in other companies and third sector organizations: Chief Marketing Officer of McDonald's CorporationNot suffered any criminal conviction, any conviction in an administrative proceeding of the CVM or any final conviction in the judicial or administrative, which has suspended ordisqualified to practice a professional or commercial activity.

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Professional Experience / Declaration of eventual convictions / Independence Criteria

Giovanni Giovannelli - 057.856.767- 96

Is an independent member, according to the criterion set out in the New Market Listing Rules.Marcos de Barros Lisboa - 806.030.257- 49

Is an independent member, according to the criterion set out in the New Market Listing Rules.Antonio Luiz da Cunha Seabra - 332.927.288- 00


Currently, Mark holds the following positions in other companies or third sector organizations: (i) Chairman of Insper; (Ii) Member of the Board of Management of Mercedes-Benz do Brazil Ltda .; (Iii) Member of the Board of Directors of AMBEV S.A .; (Iv) Member of the Board of Management FGV - Getulio Vargas Foundation; (V) Member of the Board of Directors of SWISS RE; (Vi) Member Board of Directors of Itaú Unibanco; (Vii) Member of the Board of Directors of FGC.

Is President of Pearson Growth Markets, a division of Pearson PLC, a leading education company listed on the London Stock Exchange. The division is responsible for the Basic Education, Postsecondary Education and Language businesses of Pearson in Latin America (including Brazil), China, India, South America and the Middle East. Since 2012, Giovanni has served as CEO of Grupo Multi, a company in the Language School Franchise segment. With the full acquisition of Grupo Multi by Pearson in 2013, he was appointed President of Pearson in Brazil and later, in 2016, was promoted to President of Growth Markets. From 2009 to 2012, he served as CEO of Allis, a company engaged in offering HR Services and POS Promoters. From 2006 to 2008, he served as CEO of Terna Part., a power transmission company at which he had worked since 2002, which he took public on the BOVESPA in October 2006. From 1996 to 2001, he served as Project Finance executive at the Inter- American Development Bank (IDB) in Washington. He is a member of the Board of Directors of CVC Viagens e Turismo, which is listed on the BOVESPA. He is a graduate of Bocconi University in Milan, holds a Ph.D. in Economics from American University in Washington and completed the Owner and President Management (OPM) Program at Harvard Business School.Currently, Giovanni holds the following positions in other companies or third sector organizations: (i) Chairman of Pearson Education, Brazil and (ii) Member of the Board of Directors of CVC Travel and TourismNot suffered any criminal conviction, any conviction in an administrative proceeding of the CVM or any final conviction in the judicial or administrative, which has suspended ordisqualified to practice a professional or commercial activity.

Is the President of Insper. Mr. Lisboa is an economist with a Master’s degree in Economics from the Federal University of Rio de J aneiro (UFRJ ) and Ph.D. in Economics from the University of Pennsylvania (USA). He was assistant professor at Stanford University from 1996 to 1998 and assistant professor of EPGF/FGV from 1998 to 2002. He was the Secretary of Economic Policy of the Ministry of Finance from 2003 to 2005, and President of the Brazilian Institute of Reinsurance, IRB- Brasil Re, from 2005 to 2006. He was also Vice President of Itaú Unibanco between 2010 and 2013.


Founded Natura in 1969. Since then, he has dedicated his efforts to building and developing the company. He started with a small store on Rua Oscar Freire, where he offered personalized consulting services. Five years later, he expanded the reach of his message and products by adopting sales through consultant relationships as Natura’s commercial model. With a B.S. in Economics, Luiz Seabra developed new products, languages and messages for the beauty industry. He actively participated in the organization’s transformation into one of the world’s largest cosmetics companies, marked by its strong commitment to ethical conduct and sustainability.

Currently, Luiz Antonio holds the following positions in other companies or third sector organizations: (i) Executive Director of Orexis Participações Ltda .; (Ii) CEO of Viva Vida Institute of Sharessolidarity; (Iii) CEO of Lisis Participações S.A; (Iv) Director of Homagus Adm. E Participações Ltda .; (V) Director J anos Com. Adm. E Participações Ltda. (Vi) Chief Executive Officer of Axioma Adm. E Participações Ltda .; (Vii) CEO of heuristic Adm. E Consultoria Ltda.


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Professional Experience / Declaration of eventual convictions / Independence CriteriaPlínio Villares Musetti - 954.833.578- 68

Is an independent member, according to the criterion set out in the New Market Listing Rules.Roberto Oliveira Marques - 000.000.000- 00

Currently, Roberto holds the following positions in other companies or third sector organizations: (i) Chairman of Mondelez North America; (I i) Member of the Board of GMA (Grocery Manufacturers Association).



Holds a B.A. in Business Administration and completed a non- degree program in Marketing & Strategic Planning at the Getúlio Vargas Foundation in São Paulo (FGV-SP) and graduate programs at the Kellogg School of Management at Northwestern University and at The Wharton School at the University of Pennsylvania. He serves as Executive Vice- President and President for North America at Mondeléz International, which is responsible for global sales of brands such as Oreo, Halls, Lacta and Trident. He worked for many years at J ohnson&J ohnson in positions such as Global Head of beauty & baby care products and over- the- counter medications. He is also a director at the Grocery Manufacturer Association (GMA). Previously he served as a director at the Consumer Health Care Products Association, at ENACTUS and at the Brazil- U.S. Business Council in the U.S. Chamber of Commerce.


Graduated in Civil Engineering and Business Administration from Mackenzie University. He was the CEO of Elevadores Atlas S.A. from 1992 to 1999 and of Elevadores Atlas Schindler S.A. up to 2002. From 2002 to 2007 he was a partner at J P Morgan Partners, a branch of Private Equity of J P Morgan Chase Bank, leading the process of investments in Private Equity in Brazil and Latin America. He held executive positions and seats in Boards of Directors of various companies where J P Morgan Partners invests, such as Vitopel, Diagnósticos da América S.A. and Latasa. From the beginning of 2008 to the end of 2009, he was the CEO of the wooden panels company, Satipel Industrial S.A. In May 2010 he became managing partner of Pragma Patrimônio and subsequently of J anos Holding. He is currently a member of the Boards of Directors of Natura, Raia Drogasil S.A., Adecoagro (a company listed on the NYSE) and of Portobello S.A.

Currently, Plinio holds the following positions in other companies or third sector organizations: (i) General Manager J anos Holding Investimentos e Participações Ltda. (I i) General Manager J anos Holding Consultoria Ltda .; (I ii) Member of the Board of Directors of RaiaDrogasil; (Iv) Member of the Board of Directors of Adecoagro's; (V) Member of the Board of Directors of Portobello; (Vi) Member of the Board of Directors of elevators Schindler; (Vii) Member of the Advisory Council of Cacau Show; (Viii) Member of the Advisory Council of Leo Madeiras; (Ix) Member of the Advisory Council of Eurofarma; (X) Member of the Advisory Board of Sika.

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12.7/8 Composition of committeesName Type of Comittee Position Held Profession Election Date Term of Office Percentage of

Participation

Individual Tax Payer Id (CPF) Description of other Comittees Description of position Held Date of Birth Data Ownership Number of consecutive Mandates

Other position and function exercised in the issuerAntonio Luzi da Cunha Seabra Others Comittee Member of the Comittee (Active) Economist 04/26/2016 1 Year 100%332.927.288- 00 Corporate Governance Comitte 03/23/1942 04/26/2016 0Co Chairman of the Administrative CouncilGiovanni Giovannelli Others Comittee Member of the Comittee (Active) Business Administrator 04/26/2016 1 Year 100%057.856.767- 96 Organization Development and people Comittee 06/22/1972 04/26/2016 0Member of the Administrative CouncilGuilherme Peirão Leal Others Comittee Member of the Comittee (Active) Business Administrator 04/26/2016 1 Year 100%383.599.108- 63 Corporate Governance Comitte 02/22/1950 04/26/2016 0Co Chairman of the Administrative CouncilMarcos de Barros Lisboa Others Comittee President of the Comittee Economist 04/26/2016 1 Year 100%806.030.257- 49 Audit, Management, Risk and Finance Comittee 08/02/1964 04/26/2016 0Member of the Administrative CouncilPedro Luiz Barreiros Passos Others Comittee President of the Comittee Engineer 04/26/2016 1 Year 100%

672.924.618- 91Corporate Governance Comittee and Audit, Management, Risk and Finance Comittee 06/29/1951 04/26/2016 0

Co Chairman of the Administrative CouncilPlínio Villares Musetti Others Comittee Member of the Comittee (Active) Engineer 04/26/2016 1 Year 100%

954.833.578- 68Corporate Governance Comittee and Audit, Management, Risk and Finance Comittee 01/27/1954 04/26/2016 0

Member of the Administrative CouncilRoberto de Oliveira Marques Others Comittee Member of the Comittee (Active) Business Administrator 04/26/2016 1 Year 100%000.000.000- 00 Organization Development and people Comittee 07/13/1965 04/26/2016 0Member of the Administrative CouncilSilvia Freire Dente da Silva Dias Lagnado Others Comittee Member of the Comittee (Active) Engineer 04/26/2016 1 Year 100%000.000.000- 00 Strategic Comittee 08/25/1963 04/26/2016 0

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Antonio Luzi da Cunha Seabra - 332.927.288- 00

Not suffered any criminal conviction, any conviction in an administrative proceeding of the CVM or any final conviction in the judicial or administrative, which has suspended ordisqualified to practice a professional or commercial activity.Is not an independent member, according to the criterion set out in the New Market Listing Rules.

Giovanni Giovannelli - 057.856.767- 96

Not suffered any criminal conviction, any conviction in an administrative proceeding of the CVM or any final conviction in the judicial or administrative, which has suspended ordisqualified to practice a professional or commercial activity.Is an independent member, according to the criterion set out in the New Market Listing Rules.Guilherme Peirão Leal - 383.599.108- 63


Is not an independent member, according to the criterion set out in the New Market Listing Rules.Marcos de Barros Lisboa - 806.030.257- 49

Not suffered any criminal conviction, any conviction in an administrative proceeding of the CVM or any final conviction in the judicial or administrative, which has suspended ordisqualified to practice a professional or commercial activity.Is an independent member, according to the criterion set out in the New Market Listing Rules.

Currently, Giovanni holds the following positions in other companies or third sector organizations: (i) Chairman of Pearson Education, Brazil and (ii) Member of the Board of Directors of CVC Travel and Tourism

Graduated in Business Administration from the University of São Paulo (USP) and attended the Advanced Administration Program from Fundação Dom Cabral/ INSEAD. He is co- chairman of the Board of Directors and one of the founders of Natura. He is also a director of Natura Institute. Over the past 25 years, he has participated in the creation and promotion of various companies and social organizations, such as Fundação Abrinq para os Direitos da Criança e do Adolescente (Abrinq Foundation for Children’s Rights), Instituto Ethos de Empresas de Responsabilidade Social (Ethos Institute of Companies and Social Responsibility) and Instituto Akatu para o Consumo Consciente (Akatu Institute for Conscious Consumption). He also participated in institutions such as Ashoka - Empreendedorismo Social (Ashoka – Social Entrepreneurship). After 2000, he closely engaged in various environmental institutions, such as the Fundo Brasileiro para a Biodiversidade (Brazilian Fund for the Biodiversity) (Funbio) and WWF Brasil. In 2007, he was one of the founders of Movimento Nossa São Paulo, intended to articulate various sectors of the local society for a better, fairer and more sustainable city. Since 2008 he has been structuring his legacy through Arapyaú Institute, an organization dedicated to education and sustainable development. In the 2010 national elections, he joined former Senator Marina Silva, then a member of the Green Party (Partido Verde), as candidate for Vice President. Together, they received approximately 20 million votes. In 2012, he helped founding Rede de Ação Política pela Sustentabilidade (Political Action Network for the Sustainability - RAPS), an institution not related to any party dedicated to supporting, developing and bringing together the best political leaders committed to ethical values and to the construction of inclusive and sustainable development. The same year, he became part of B–Team, a group composed of international leaders aimed at engaging corporations and leaders from all over the world with t new vision of successful business ventures, by incorporating profits to social and environmental goals.

Currently, William holds the following positions in other companies or third sector organizations: (i) Chief Executive Officer Management GPLeal e Participações Ltda .; (I i) Director of J anos Administration e Participações Ltda .; (I ii) President of Utopia Participações S.A .; (Iv) Executive Director of Administration and Daedalus Participações Ltda .; (V) Executive Director of Administration and Homagus Participações Ltda .; (Vi) Executive Director Homagus Asset Management Ltda .; (Vii) Vice President of Administration Axiom e Participações Ltda .; (Viii) Chief Executive Officer of Administration and Apoena Participações Ltda .; (Ix) Executive Director of SG Debret Participações Ltda .; (X) Executive Director Modusvivendi Participações Ltda .; (Xi) Member of the Board of Ethics and the Ethos Institute Corporate Social Responsibility; (Xii) Chairman of the Board Director of Political Action For Sustainability Network - RAPS; (Xiii) Co- founder of The BTeam; (Xiv) the Board of Directors Member Arapyaú Institute of Education and Sustainable Development; (Xv) Member of the Board of Directors - J anos Holding Consultoria Ltda .; (Xvi) Member of the Board of Directors Biofílica Investments Environmental S / A

Is the President of Insper. Mr. Lisboa is an economist with a Master’s degree in Economics from the Federal University of Rio de J aneiro (UFRJ ) and Ph.D. in Economics from the University of Pennsylvania (USA). He was assistant professor at Stanford University from 1996 to 1998 and assistant professor of EPGF/FGV from 1998 to 2002. He was the Secretary of Economic Policy of the Ministry of Finance from 2003 to 2005, and President of the Brazilian Institute of Reinsurance, IRB- Brasil Re, from 2005 to 2006. He was also Vice President of Itaú Unibanco between 2010 and 2013.

Founded Natura in 1969. Since then, he has dedicated his efforts to building and developing the company. He started with a small store on Rua Oscar Freire, where he offered personalized consulting services. Five years later, he expanded the reach of his message and products by adopting sales through consultant relationships as Natura’s commercial model. With a B.S. in Economics, Luiz Seabra developed new products, languages and messages for the beauty industry. He actively participated in the organization’s transformation into one of the world’s largest cosmetics companies, marked by its strong commitment to ethical conduct and sustainability.Currently, Luiz Antonio holds the following positions in other companies or third sector organizations: (i) Executive Director of Orexis Participações Ltda .; (Ii) CEO of Viva Vida Institute of Sharessolidarity; (Iii) CEO of Lisis Participações S.A; (Iv) Director of Homagus Adm. E Participações Ltda .; (V) Director J anos Com. Adm. E Participações Ltda. (Vi) Chief Executive Officer of Axioma Adm. E Participações Ltda .; (Vii) CEO of heuristic Adm. E Consultoria Ltda.

Is President of Pearson Growth Markets, a division of Pearson PLC, a leading education company listed on the London Stock Exchange. The division is responsible for the Basic Education, Postsecondary Education and Language businesses of Pearson in Latin America (including Brazil), China, India, South America and the Middle East. Since 2012, Giovanni has served as CEO of Grupo Multi, a company in the Language School Franchise segment. With the full acquisition of Grupo Multi by Pearson in 2013, he was appointed President of Pearson in Brazil and later, in 2016, was promoted to President of Growth Markets. From 2009 to 2012, he served as CEO of Allis, a company engaged in offering HR Services and POS Promoters. From 2006 to 2008, he served as CEO of Terna Part., a power transmission company at which he had worked since 2002, which he took public on the BOVESPA in October 2006. From 1996 to 2001, he served as Project Finance executive at the Inter- American Development Bank (IDB) in Washington. He is a member of the Board of Directors of CVC Viagens e Turismo, which is listed on the BOVESPA. He is a graduate of Bocconi University in Milan, holds a Ph.D. in Economics from American University in Washington and completed the Owner and President Management (OPM) Program at Harvard Business School.

Currently, Mark holds the following positions in other companies or third sector organizations: (i) Chairman of Insper; (Ii) Member of the Board of Management of Mercedes- Benz do Brazil Ltda .; (I ii) Member of the Board of Directors of AMBEV S.A .; (Iv) Member of the Board of Management FGV - Getulio Vargas Foundation; (V) Member of the Board of Directors of SWISS RE; (Vi) Member Board of Directors of Itaú Unibanco; (Vii) Member of the Board of Directors of FGC.

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Pedro Luiz Barreiros Passos - 672.924.618- 91


Plínio Villares Musetti - 954.833.578- 68


Roberto de Oliveira Marques - 000.000.000- 00

Currently, Roberto holds the following positions in other companies or third sector organizations: (i) Chairman of Mondelez North America; (Ii) Member of the Board of GMA (Grocery Manufacturers Association).Not suffered any criminal conviction, any conviction in an administrative proceeding of the CVM or any final conviction in the judicial or administrative, which has suspended ordisqualified to practice a professional or commercial activity.Is an independent member, according to the criterion set out in the New Market Listing Rules.Silvia Freire Dente da Silva Dias Lagnado - 000.000.000- 00

Currently, Silvia holds the following positions in other companies and third sector organizations: Chief Marketing Officer of McDonald's CorporationNot suffered any criminal conviction, any conviction in an administrative proceeding of the CVM or any final conviction in the judicial or administrative, which has suspended ordisqualified to practice a professional or commercial activity.Is an independent member, according to the criterion set out in the New Market Listing Rules.

Graduated from the Polytechnic School of the University of São Paulo in 1986. She was Chief Marketing Officer and CEO of Bacardi Global Brands from J une 2010 to November 2012. She also worked at Unilever from 1986 to 2010, reaching the position of Global Executive Vice President of the Culinary Division, in addition to serving in several other international positions during her 25 years with the company. As Executive Vice President of the Culinary Category, based in London, she supervised the entire business unit, including Soups, Sauces, Broths and Frozen Products. While at Unilever, she also acted as Senior Global Vice President of the Dove Brand, based in the United States, and Vice President of Deodorants in Latin America, based in Buenos Aires. She served as an independent member of the Boards of Nuelle Inc., a US- based company, Sapient, in Boston, MA, and Britvic Plc., a soft drink production and marketing company in the United Kingdom. She is currently Executive Vice- President and Chief Marketing Officer of the McDonalds Corporation.

Is co- chairman of the Board of Directors of Natura and co- founder of the Company. He is a director of Natura Institute. Since 2013, he serves as Chairman of the Board of Directors of TOTVS. Mr. Passos graduated in Production Engineering from Escola Politécnica of the University of São Paulo and an extension in Business Administration from Fundação Getúlio Vargas. Mr. Passos dedicates his time to various entities and organizations. He was President of the Institute of Studies for Industrial Development (IEDI) from 2009 to 2015, when he became director of the institute. In 2013, he became President of Fundação SOS Mata Atlântica. He has been a member of Curating Board of the National Quality Foundation (FNO) since 2003, and of the Boards of Directors of Instituto Empreender Endeavor since 2005, of the Technological Research Institute (IPT) since 2006, of the Dom Cabral Foundation (FDC) since 2010. He is also a member of the Business Engagement for Innovation (MEI).

Currently, Peter holds the following positions in other companies or third sector organizations: (i) Director of Passos Participações S.A .; (I i) Director of Anima Investimentos Ltda .; (I ii) Chairman of the Board Totvs; (Iv) Member of the IPT Board; (V) Member of IEDI Council; (Vi) Member of the Fapesp Council; (Vii) Member of Endeavor Council; (Viii) Member of the Council of Don Cabral Foundation; (Ix) Chairman of SOS Atlantic Forest; (X) Member of the Institute sown Council.

Graduated in Civil Engineering and Business Administration from Mackenzie University. He was the CEO of Elevadores Atlas S.A. from 1992 to 1999 and of Elevadores Atlas Schindler S.A. up to 2002. From 2002 to 2007 he was a partner at J P Morgan Partners, a branch of Private Equity of J P Morgan Chase Bank, leading the process of investments in Private Equity in Brazil and Latin America. He held executive positions and seats in Boards of Directors of various companies where J P Morgan Partners invests, such as Vitopel, Diagnósticos da América S.A. and Latasa. From the beginning of 2008 to the end of 2009, he was the CEO of the wooden panels company, Satipel Industrial S.A. In May 2010 he became managing partner of Pragma Patrimônio and subsequently of J anos Holding. He is currently a member of the Boards of Directors of Natura, Raia Drogasil S.A., Adecoagro (a company listed on the NYSE) and of Portobello S.A.

Currently, Plinio holds the following positions in other companies or third sector organizations: (i) General Manager J anos Holding Investimentos e Participações Ltda. (I i) General Manager J anos Holding Consultoria Ltda .; (Iii) Member of the Board of Directors of RaiaDrogasil; (Iv) Member of the Board of Directors of Adecoagro's; (V) Member of the Board of Directors of Portobello; (Vi) Member of the Board of Directors of elevators Schindler; (Vii) Member of the Advisory Council of Cacau Show; (Viii) Member of the Advisory Council of Leo Madeiras; (Ix) Member of the Advisory Council of Eurofarma; (X) Member of the Advisory Board of Sika.

Holds a B.A. in Business Administration and completed a non- degree program in Marketing & Strategic Planning at the Getúlio Vargas Foundation in São Paulo (FGV- SP) and graduate programs at the Kellogg School of Management at Northwestern University and at The Wharton School at the University of Pennsylvania. He serves as Executive Vice- President and President for North America at Mondeléz International, which is responsible for global sales of brands such as Oreo, Halls, Lacta and Trident. He worked for many years at J ohnson&J ohnson in positions such as Global Head of beauty & baby care products and over- the- counter medications. He is also a director at the Grocery Manufacturer Association (GMA). Previously he served as a director at the Consumer Health Care Products Association, at ENACTUS and at the Brazil- U.S. Business Council in the U.S. Chamber of Commerce.

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12.9 Existence of marital or steady union relationship or kinship to the second degree:

Name Individual Tax Payer Id (CPF) Bussines name of the Issuer, Controlled or Company Company Tax Payer Id (CNPJ) Relationship type with the administrator emitter or controlledRoleIssuer administrator or ControlledPedro Luiz Barreiros Passos 672.924.618- 91 Natura Cosmésticos S.A. 71.673.990/0001- 77 Son / Doughter (1 st degree)Co Chairman of the Administrative CouncilRelated PersonGuilherme Ruggiero Passos 219.929.778- 01 Natura Cosmésticos S.A. 71.673.990/0001- 77ControlerObservation

Issuer administrator or ControlledPedro Luiz Barreiros Passos 672.924.618- 91 Natura Cosmésticos S.A. 71.673.990/0001- 77 Son / Doughter (1 st degree)Co Chairman of the Administrative CouncilRelated PersonPatrícia Ruggiero Passos 220.814.928- 90 Natura Cosmésticos S.A. 71.673.990/0001- 77ControlerObservation

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12.10 Relationship of subordination, service supplier or control among the directors and officers and subsidiaries, controlling shareholders and other

IdentificationIndividual or Corporate Taxpayer ID (CPF/CNPJ)

Degree of relationship with the manager at the Corporation or subsidiary Type of related person

PositionFiscal year ended December 31, 2015Manager at the IssuerAntonio Luiz da Cunha Seabra 332.927.288-00 Control Indirect controlling shareholderCo-chairman of the Board of Directors, member of the Corporate Governance Committee

Related personLisis Participações S.A. 05.561.628/0001-80

Controlling PartnerNote

Manager at the IssuerGuilherme Peirão Leal 383.599.108-63 Control Indirect subsidiaryCo-chairman of the Board of Directors, member of the Corporate Governance Committee

Related personUtopia Participações S.A. 04.819.657/0001-36


Manager at the IssuerPedro Luiz Barreiros Passos 672.924.618-91 Control Indirect subsidiaryCo-chairman of the Board of Directors, member of the Corporate Governance Committee, member of the Audit, Risk Management and Finance Committee, the Strategy Committee and the People and Corporate Development Committee

Related personPassos Participações S.A 05.561.635/0001-81


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12.11 Agreement, including insurance policies, for the payment or reimbursement of expenses borne by directors and officers12.11 Describe any provisions of any agreements, including insurance policies, that provide for the payment or reimbursement by managers of expenses arising from the remediation of damages caused to third parties or to the issuer, from penalties imposed by government agents or from settlements to end administrative proceedings or lawsuits, as a result of the exercise of their functionsThe Company has Directors and Officers Liability (D&O) Insurance contracted with Seguradora Chubb, for the period from December 31, 2015 to December 31, 2016, to cover losses and damages to third parties arising from acts related to the exercise of functions and powers by the Directors and/or Executive Officers of the Company and/or Administrators, in the amount of up to one hundred and twenty million reais (R$ 120,000,000.00).In 2014, the Company had insurance contracted with Ace Seguros, for the period from December 31, 2014 to December 31, 2015, in the amount of up to sixty million reais (R$ 60,000,000.00).

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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

Corporate Governance Practices

_Introduction

According to the Brazilian Institute of Corporate Governance (“IBGC”), corporate governance is the system through which companies are guided and monitored, involving the relationship between shareholders, the board of directors, board of executive officers, independent auditors and the audit board. The basic principles guiding this practice are: (i) transparency; (ii) equity; (iii) accountability; and (iv) corporate responsibility.The principle of transparency means that the management is responsible for reporting not only the company’s economic and financial performance, but all other factors as well (even those intangible) that guide their business decisions. Equity means the fair and unbiased treatment of all minority groups, employees, clients, suppliers and creditors. Accountability means accounting for the actions of corporate governance agents to those who elected them, while they take full responsibility for their acts. Lastly, corporate governance represents a broader vision of the business strategy, including social and environmental aspects when defining businesses and operations._Differentiated Corporate Governance Practices

In 2000, BM&FBOVESPA introduced 4 special segments of stock trading, called Level 1, Level 2, Bovespa Mais and Novo Mercado. The goal was to create a secondary market for securities issued by Brazilian publicly held companies that adopt the best corporate governance practices. The listing segments aim to trade stocks issued by companies that spontaneously undertake commitments to comply with good corporate governance practices and stricter reporting requirements compared to those already required under Brazilian corporation law. In general, these rules increase the rights of shareholders and improve the quality of the information they receive. In its pursuit of the highest standards of corporate governance and to enhance and strengthen its controls environment, Natura voluntarily adopted internal controls based on the criteria established in the document “Internal Control – Integrated Framework” published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), a private U.S.-based organization whose mission is to disseminate principles and guidance for companies on their internal control structures. Since its creation, the Company's internal control framework is regularly updated and the effectiveness of its controls is assessed annually by the External Auditor. We believe the main benefit of having a more efficient control environment is to offer transparency and safety to our stakeholders regarding the execution of our operations, ensuring that financial statements accurately represent business processes. Once again in 2015, Natura’s internal controls were assessed as effective, i.e. no deficiencies were reported (whether material or significant) in the independent assessment conducted by its external auditors._Adherence to the Novo Mercado

To uphold the highest standards of corporate governance, on April 26, 2004, we entered into with BM&FBOVESPA a contract undertaking to comply with the Novo Mercado listing requirements. Companies joining the Novo Mercado listing segment spontaneously undertake to comply with certain corporate governance and additional reporting practices compared to the requirements under Brazilian law, which include, among other requirements: (i) issue of only common shares; (ii) maintain a minimum free float of 25%; (iii) detailing and including additional information in the quarterly information, annual information and standard financial statements; and (iv) translate the annual financial statements into English and based on

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international financial reporting standards. Adhesion to Novo Mercado is consummated upon execution of contracts between the company, its managers and controlling shareholders and BM&FBOVESPA, in addition to adapting the Bylaws of the company to the rules of the Novo Mercado Listing Regulations.By signing the contracts, companies undertake to adopt standards and practices required by Novo Mercado, which aim to increase transparency in relation to the activities and economic condition of the companies to the market, as well as to increase the powers of non-controlling shareholders in the management of the companies, among other rights. The main rules related to Novo Mercado, to which adhering companies are also subject, are briefly described next.Firstly, companies intending to list their securities in the Novo Mercado segment must obtain and maintain updated their registration as a publicly held company with the CVM. In addition, the company must, among other conditions, sign the Novo Mercado Listing Agreement and adjust its Bylaws to the minimum requirements of BM&FBOVESPA. In relation to the capital stock, it must be composed exclusively of common shares and a minimum free float, equivalent to 25% of the capital stock, must be maintained. The issue of (or maintenance of any outstanding) founder's shares is also prohibited by companies trading in the Novo Mercado segment.The Board of Directors of companies authorized to have their shares traded in Novo Mercado must be composed of at least five members, elected by the shareholders’ meeting, for a unified term of office of no longer than two years, reelection being allowed. Of the members of the Board of Directors, at least 20% must be Independent Directors. All new members of the Board of Directors and the Board of Executive Officers must subscribe to the Consent to Appointment of Managers, their investiture being subject to the execution of said instrument. Through the Consent to Appointment, the new managers of the company personally undertake to act in compliance with the Novo Mercado Listing Agreement, the Regulations of the Market Arbitration Chamber and the Novo Mercado Listing Regulations.Companies traded in the Novo Mercado must comply, among other things, with the following: (i) obligation to conduct a public tender offer of shares for at least their economic value under certain circumstances, including upon delisting from Novo Mercado; (ii) obligation to always carry out public offerings aiming to promote share dispersion; (iii) obligation to extend to all shareholders the same conditions enjoyed by the controlling shareholders upon sale of control of the company; (iv) obligation to report non-financial information in each quarter, such as the number of shares held by the managers of the company and free float; (v) obligation to increase the disclosure of operations with related parties; and (vi) submission of the company, its shareholders, managers and members of the Audit Board to the Regulations of the Market Arbitration Chamber of BM&FBOVESPA to resolve by means of arbitration, any and every dispute or controversy that may arise among them, related to or deriving from the application, validity, effectiveness, interpretation, breach and its effects of the provisions of the Brazilian Corporation Law, the Company’s Bylaws, rules issued by the National Monetary Council (CMN), the Central Bank of Brazil (BACEN) and the Brazilian Securities and Exchange Commission (CVM), as well as other rules contained in the Novo Mercado Listing Regulations, the Regulations of the Market Arbitration Chamber and the Novo Mercado Listing Agreement. _IBGC’s Code of Best Corporate Governance Practices

The “Code of Best Corporate Governance Practices”, issued by the IBGC aims to guide all types of companies in: (i) increasing their value; (ii) improving their performance; (iii) enabling their access to capital at lower costs; and (iv) contributing to increasing their lives, grounded on the basic principles of transparency, equity, accountability and corporate responsibility. The corporate governance practices recommended by IBGC in said code include the following, which our Company adopts:

Issue exclusively common stock; “One share equal to one vote” policy;

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Engagement of an external and independent audit firm to analyze the financial statements, which is not engaged in any other services that may compromise its independence;

Clear Bylaws clauses regarding (i) the form of calling the Shareholders’ Meeting; (ii) the responsibilities of the Board of Directors and Board of Executive Officers; (iii) the voting, election and removal systems and the term of office of the members of the Board of Directors and Board of Executive Officers;

Transparency in reporting the annual management reports; Publication of the documents pertaining to matters included in the agenda of the

Meetings from the first day of the call, including details of the matters in the agenda, always aiming to conduct the meetings in times and venues that may allow for the participation of the greatest possible number of shareholders;

Include the statement of dissenting votes in the meetings of shareholders’ meetings or meetings, when requested;

Prohibition of use of insider information and maintenance of a material information disclosure policy;

Inclusion of an arbitration clause in the Bylaws as the means to resolve eventual conflicts between shareholders and the Company;

Directors with experience in operational and financial matters; Provision in the Bylaws prohibiting the access to information and right to vote of

directors who have conflict of interest with the company; Obligation to include all shareholders in any tender offer that results in the

transfer of control, who shall have the option to sell their shares in the same conditions enjoyed by the controlling shareholders (tag along right), including the participation in the control premium, if applicable; and

Number of members of the Board of Directors between 5 and 9.

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_Committees

Pursuant to paragraph 5 of article 16 of the Bylaws of the Company, the Board of Directors has set up the following committees, whose members are appointed by it, to assist it in the best performance of its functions:

Audit, Risk Management and Finance Committee: It is responsible for ensuring the swift operation of internal and external audit processes, mechanisms and controls related to risk management, compliance of the financial policies with the strategic guidelines and risk profile of the business, while also ensuring the revision of the financial statements and related information disclosed to the market.

Organizational and People Committee: It is responsible for advising the Board of Directors on decisions regarding strategies, policies and rules related to Human Resources, Organizational Development and Management Systems and for ensuring they are correctly implemented with regard to (i) people planning and development, (ii) management compensation and benefits and (iii) Natura executive compensation and benefits, in addition to advising the Board on monitoring and providing guidance on issues related to Management Systems;

Strategy Committee: its mission is to (i) contribute to the monitoring and guiding of the Company’s corporate strategy, respecting the strategic guidelines approved by the Board of Directors, (ii) follow and supervise the strategic projects defined by the Board of Directors, reporting to it, (iii) serve as the forum that enables the exchange learning between employees and management, (iv) transfer concepts, values and beliefs of the Company, (v) aid the CEO and management in defining the Company’s strategies, (vi) support the pursuit of constant success and perpetuity of the Company, and (vii) provide recommendations to the Board of Directors on issues discussed at meetings; and

Corporate Governance Committee: its mission is to (i) monitor the functioning of the entire corporate governance system of the Company, (ii) follow the progress of best international corporate governance practices, (iii) propose adjustments and improvements to the Company’s corporate governance system, whenever it deems necessary, (iv) monitor the corporate governance metrics approved by the Board of Directors, and (v) report to the Board of Directors the status and progress of the Company’s corporate governance system.

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Shareholders' Meetings

Type Date QuorumExtraordinary Shareholders’ Meeting 7/27/15

Shareholders representing 82.5% of the total and voting capital of the Company.

Annual and Extraordinary Shareholders’ Meeting 4/14/15


Extraordinary Shareholders’ Meeting 2/6/15


Extraordinary Shareholders’ Meeting 10/10/14





Shareholders representing 78% of the total and voting capital of the Company.


Shareholders representing 83% of the total and voting capital of the Company.

No shareholders meeting of the Company was held on second call in the past three years.

_Quorum

As a general rule, Brazilian Corporation Law requires the shareholders’ meeting to be installed, on first call, upon presence of shareholders representing at least ¼ of the voting capital and, on second call, with the presence of any number of voting shareholders. In case shareholders have been summoned to decide and vote on an amendment to the Company’s Bylaws, the quorum, on first call, shall be at least 2/3 of the voting capital and, on second call, any number of shareholders.As a general rule, votes equivalent to at least the majority of shareholders present at the meeting, are required to approve any matter, in which case abstaining shareholders do not count for the calculation. However, the following matters require the favorable votes of shareholders representing at least half of the voting capital of the Company to be approved: (i) reduction in the mandatory dividend; (ii) change of the Company’s corporate purpose; (iii) consolidation of the Company or its merger into another company; (iv) spin-off of the Company; (v) acquisition of interest in a group of companies; (vi) the interruption of the Company’s state of liquidation; (vii) the dissolution of the Company; (viii) the merger of the Company’s stock into another company; and (ix) the Company’s delisting from the Novo Mercado segment, among others.

_Responsibility for Summoning Shareholders’ Meetings

Shareholders’ meetings are usually summoned by the Board of Directors. However, the meetings may be summoned as follows, in certain occasions:

By any shareholder, in case the management delays, for more than 60 days, the summoning of a meeting pursuant to the law or the Bylaws;

By shareholders representing at least 5% of the capital stock, in case the management fails to call, within 8 days, a meeting requested by a duly grounded request including the matters to be discussed and voted on;

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By shareholders representing at least 5% of the voting capital, in case the management does not comply, within eight days, with a request to summon a meeting with the objective of installing the Audit Board; and

By the Audit Board, if installed, in case the Board of Directors delays by more than 1 month the summoning of the Annual Shareholders' Meeting. The Audit Board may also call the Extraordinary Shareholders' Meeting in case of serious or urgent matters.

_Legitimacy and Representation

Shareholders attending the shareholders’ meeting must evidence their shareholding and ownership of the shares in relation to which they wish to exercise their voting rights.

_Venue

Shareholders’ meetings take place at our registered office in São Paulo. Brazilian Corporation Law allows shareholders’ meetings to be held outside the registered office, in the event of force majeure, provided they are held in the same region.

_Frequency of employee training on the Code of Conduct or Integrity

Training on the Code of Conduct is mandatory for all employees and includes 15 topics, seven of which are related to the topic of corruption, as follows: contracting suppliers; travel and accommodation; promotional gifts, gifts and other offerings; fraud, bribery and corruption; preserving and properly using the company’s assets and resources; compliance with corporate policies, rules and procedures; and posture before media and government and public presentations. Employees have 60 days to complete the training course on the Code as from their admission date. The Code of Conduct is updated annually, with the next update scheduled for September 2016. During this period, the e-learning course will be updated and all employees will have to complete it once again. In 2015, 90% of managers and 92% of non-managers completed training on the Code of Conduct and Anti-Corruption Compliance.In 2016, all managers and non-managers whose job involves interacting with government agents will complete a training course on Anti-Corruption Compliance. Every year, the Compliance department releases the calendar for training courses based on the pre-established target public.

_Number of internal and external reports of violations of the Code of Conduct or Integrity

In 2015, we received 62 reports of violations, of which 29 could not be proven, 29 were proven and 4 are under investigation. Action plans were developed to address all proven reports. For processes that required disciplinary measures, oral and written warnings were given and employees were terminated, which included monitoring and consequences for repeated violations. Reports that exposed weaknesses in processes resulted in enhancements in the systemic monitoring controls of these processes and in adjustments to internal procedures and policies. The annual review and enhancement of the Codes of Conduct reinforce Natura’s commitment to ethical conduct.

_Description of the process for evaluating the Board of Directors, its Committees, the Board of Executive Officers and their members.

The Board of Directors is responsible for establishing a performance evaluation process of its performance and of the performance of its committees. Historically, this process has been conducted through a self-evaluation conducted in most years. This self-evaluation is submitted to validation by the Corporate Governance Committee. However, the process was not conducted in fiscal year 2015.There were no direct decisions regarding changes in the nomination and compensation of members of the Board of Directors as a result of their self-evaluations.

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The Chief Executive Officer is evaluated annually by the Board of Directors. The evaluation of the Board of Executive Officers is presented to the Board of Directors by the Chief Executive Officer, also on an annual basis, for informative and validation purposes.

_Description of training programs administered to members of the Board of Directors, its Committees, the Board of Executive Officers and the Audit Board.

No formal training was administered to the members of the Board of Directors. Recently invested Directors undergo a program of integration with the other Directors and executives of the Company to get to know the spaces and facilities.

_Inform the frequency of employee training on the Code of Conduct or Integrity in the most recent fiscal year.

Training on the Code of Conduct is mandatory for all employees and includes 15 topics, seven of which are related to the topic of corruption, as follows: contracting suppliers; travel and accommodation; promotional gifts, gifts and other offerings; fraud, bribery and corruption; preserving and properly using the company’s assets and resources; compliance with corporate policies, rules and procedures; and posture before media and government and public presentations. Employees have 60 days to complete the training program on the Code as from their admission date. The Code of Conduct is updated annually, with the next update scheduled for September 2016. During this period, the e-learning course will be updated and all employees will have to complete it once again. In 2015, 90% of managers and 92% of non-managers completed training on the Code of Conduct and Anti-Corruption Compliance.In 2016, all managers and non-managers whose job involves interacting with government agents will complete a training course on Anti-Corruption Compliance. Every year, the Compliance department releases the calendar for training courses based on the pre-established target public.

_Provide the number of internal and external reports of violations of the Code of Conduct or Integrity received by the company in the most recent fiscal year, the improvements made and those to be made during the current fiscal year.

In 2015, we received 62 reports of violations, of which 29 could not be proven, 29 were proven and 4 are under investigation. Action plans were developed to address all proven reports. For processes that required disciplinary measures, oral and written warnings were given and employees were terminated, which included monitoring and consequences for repeated violations. Reports that exposed weaknesses in processes resulted in enhancements in the systemic monitoring controls of these processes and in adjustments to internal procedures and policies. The annual review and enhancement of the Codes of Conduct reinforce Natura’s commitment to ethical conduct.

_Policy for submission of matters for analysis by the directors and members of Committees

We strive to submit matters several days prior to meetings of the board and its committees to give members sufficient time to prepare.

_Resignation of the Operational Officer Roberta Salvador dos Santos

The Board of Director of the Company in meeting of August 26th, 2016 registered the resignation of Roberta Salvador dos Santos as Chief Operational Officer of the Company, effective as of September 1st, 2016. The resignation letter is duly filed at the Company’s head office.

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13.Management compensation

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:

(a) Objectives of the compensation policy or practice

The compensation of our Company is linked to its results and to the increase in its value, as well as to social and environmental indicators. The compensation that we offer allows us to recruit, retain and recognize highly qualified professionals in the management of our Company.

We monitor the variations in the external environment and on an annual basis we compare our compensation practices with reference markets, such as competitors in the consumer goods sector, Brazilian multinationals, exchange-listed companies or companies with similar compensation strategies to that of Natura. We maintained a policy that positions the total compensation of the various groups of employees above the market in order to share the generation of wealth with all those who participate independently or entrepreneurially to transform our value proposition into reality.

One of our competitive advantages in relation to the market is our model of variable compensation and gains, which is adapted to the characteristics of each public of employees and executives, such as form of payment, values and targets adapted to each situation.

Concerning the fixed portion of the compensation, we opt to pay 14 monthly salaries per year in Brazil, whereas the legal requirement is 13 salaries, which especially benefits lower-income professional and fosters a culture of savings.For short-term incentives, an Employee Profit Sharing model for Natura’s managers is linked to strategic planning and the new performance management program. The new model is more collective and based on a simpler process for assessing results, using financial, social, environmental and individual performance indicators.For a group of senior executives responsible for its long-term strategy, Natura offers a restricted stock program, in addition to the stock option program. For a select group of executives chosen by the Board, it also offers a Stock Option Program for Strategy Acceleration.These programs aim to ensure a sense of ownership, strengthening the relation between compensation and gains and creating value at the Company in the long term and ensuring its healthy growth with a balanced distribution of income when business profitability allows.

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(b) Breakdown of the compensation, indicating:

i. description of the elements of compensation and the objectives of each;

Our Management members have a base compensation and a variable compensation, as well as indirect benefits.

_Base Compensation: the base compensation is the monthly sum paid to recognize and reflect the value of the experience and responsibility of the position of each manager.

_Variable Compensation: the variable portion of the compensation of a member of the Company’s Management is a way to reward achieving and exceeding goals based on economic, social and environmental factors that can help the Company obtain its goals based upon these factors.

The variable component, whether short-term compensation or long-term gains, represents a greater portion for senior executives in relation to the other employees, since we believe in building value together. Besides the well-defined limits, all variable compensation is linked to effectively attaining the goals, i.e. exceeding the minimum expectations of growth established annually by management. The system of performance indicators that measures this performance encompasses the three dimensions of sustainability (Economic, Social and Environmental)

ii. for the past three fiscal years, the proportions of each element in the total compensation were;

As shown in the following table, the proportions for the fiscal year ended December 31, 2015, 2014 and 2013, respectively, were:

% related to the total compensation of the amount paid as

December 31, 2015Base compensation

Variable Compensation Benefits Total

Board of Directors 100.0% 0.0% 0.0% 100.0%Board of Executive Officers (*) 70.9% 28.2% 0.9% 100.0%

(*) The amount related to stock option (share-based compensation) has not been considered in the table above.




Board of Directors 100.0% 0.0% 0.0% 100.0%Board of Executive Officers (*) 65.9% 33.7% 0.4% 100.0%





Board of Directors 82.4% 17.2% 0.4% 100.0%Board of Executive Officers (*) 71.3% 28.1% 0.% 100.0%


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iii. method for calculating and adjusting each compensation element; and

The adjustment of the compensation of the members of our Management is defined annually in the Annual Shareholder’s Meeting. Compensation for the Statutory Board of Executive Officers is based on an annual market survey of salaries.

iv. reasons justifying the composition of the compensation.

With the compensation policy indicated above, we have the objective of compensating our professionals in accordance with the responsibilities of their position, market practices and the level of competitiveness of the Company.

v. existence of members who are not compensated by the issuer and the reason for not being remuneratedThere are no members who do not receive compensation.

(c) main performance indicators taken into consideration in determining each compensation element

The performance indicators used to determine the elements of variable compensation take into consideration financial, social and environmental aspects, as mentioned in item 13.1 (b).

(d) structure of compensation to reflect the evolution in performance indicators

The performance indicators are monitored on a quarterly basis and the final calculation of the financial results is performed in the subsequent year. The performance indicator determines the total variable compensation.

(e) relationship between the compensation policy or practice and the interests of the Company

Since the Company considers the financial results when determining the variable compensation detailed below, the Company ensures a sustainable compensation without committing any other investments.

(f) existence of compensation borne by direct or indirect subsidiaries or controlling shareholders

Not applicable.

(g) compensation or benefits related to the occurrence of corporate events

There are no benefits or compensation linked to the occurrence of corporate events.

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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:

Total compensation planned for the current fiscal year 12.31.2016 - Annual Amounts

Board of Directors Board of Executive Officers Audit Comittee Total

Total number of members 8,42 6,17 14,59

Number of paid members 0,00 0,00 0,00

Fixed Annual Remuneration

Salary 12.166.900,00 52.470.400,00 64.637.300,00

Direct and Indirect Benefits 0,00 0,00 0,00

Comittee Participation 0,00 0,00 0,00

Others 0,00 0,00 0,00

Description of other salary

Variable Salary

Bonus 0,00 0,00 0,00

Profit Sharing 0,00 0,00 0,00

Participation in meetings 0,00 0,00 0,00

Commission 0,00 0,00 0,00

Others 0,00 0,00 0,00

Description of other Variable salary

Post-employment 0,00 0,00 0,00

Post Cessation 0,00 0,00 0,00

Based Actions (including options) 0,00 0,00 0,00

Observation

Total Payment 12.166.900,00 52.470.400,00 64.637.300,00

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Total Remuneration of Fiscal Year on 12/ 31/ 2015 - Annual Amounts





Salary 5.744.700,00 27.907.200,00 33.651.900,00

Direct and Indirect Benefits 0,00 0,00 0,00


Others 0,00 0,00 0,00


Variable Salary

Bonus 0,00 0,00 0,00

Profit Sharing 0,00 0,00 0,00



Others 0,00 0,00 0,00




Based Actions (including options) 0,00 0,00 0,00

Observation

Total Payment 5.744.700,00 27.907.200,00 33.651.900,00

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Salary 6.387.000,00 8.557.900,00 14.944.900,00

Direct and Indirect Benefits 0,00 53.800,00 53.800,00


Others 0,00 0,00 0,00


Variable Salary

Bonus 0,00 0,00 0,00

Profit Sharing 0,00 4.367.600,00 4.367.600,00



Others 0,00 0,00 0,00




Based Actions (including options) 0,00 1.947.000,00 1.947.000,00

Observation

Total Payment 6.387.000,00 14.926.300,00 21.313.300,00

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Salary 6.512.200,00 7.605.000,00 14.117.200,00

Direct and Indirect Benefits 28.800,00 59.100,00 87.900,00


Others 0,00 0,00 0,00


Variable Salary

Bonus 0,00 0,00 0,00

Profit Sharing 0,00 2.992.900,00 2.992.900,00



Others 0,00 0,00 0,00




Based Actions (including options) 0,00 3.255.500,00 3.255.500,00

Observation

The amount approved at the AGM held on April 12, 2013 was notconsumed fully, therefore, theresults were below our expectation and payment of PLR It was lower than budgeted.

The amount approved at the AGM held on April 12, 2013It was not consumed fully, therefore, the results were below our expectation andPLR payment was lower the budgeted.

Total Payment 6.541.000,00 13.912.500,00 20.453.500,00

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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

Amounts estimated for 2016, according to our compensation plan (R$ thousand)

Board of DirectorsBoard of Executive Officers

Total

Number of Members* 9 9 18Salary / Pro-labore 6,720.9 16,278.0 22,998.8 Estimated minimum amount 687.2 1,264.3 1,951.5 Estimated maximum amount 870.7 3,129.9 4,000.6 Estimated average amount 746.8 1,792.2 2,539.0Profit sharing (100% targets achieved) 5,446.0 14,299.5 19,745.5 Estimated minimum amount 605.2 831.1 1,436.3 Estimated maximum amount 605.2 3,405.8 4,011.0 Estimated average amount 605.2 1,588.9 2,194.1

regarding profit sharing: Estimated minimum amount Estimated maximum amount Estimated average amount Amount estimated in

compensation plan if targets were achieved

Benefits - 147.7 147.7 Estimated maximum amount - 10.0 10.0 Estimated average amount - 17.2 17.2 Estimated maximum amount - 16.4 16.4 Estimated average amount - 3,000.0 3,000.0Other - 500.0 500.0 Estimated minimum amount - 1,200.0 1,200.0 Estimated maximum amount - 1,000.0 1,000.0 Estimated average amount - 3,000.0 3,000.0Benefits from the position (**) - 3,000.0 3,000.0 Estimated minimum amount - 3,000.0 3,000.0 Estimated maximum amount - 3,000.0 3,000.0 Estimated average amount - 15,893.0 15,893.0Share-based compensation (***) - 407.6 407.6 Estimated minimum amount - 3,746.0 3,746.0 Estimated maximum amount - 1,986.7 1,986.7 Estimated average amount

12,166.9 52,470.4 64,637.3Total 10,773.2 50,996.7 61,769.9* There are no members who do not receive compensation.** For more information, please see the table of amounts estimated for 2016, in item 13.2*** The amount of share-based compensation refers to expenses in the period with gains

from stock options, restricted shares and the proposal for the Stock Option Program for

Strategy Acceleration, which are not yet vested.

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Amounts paid in fiscal year 2015, according to our compensation plan (R$ thousand)

Board of Directors


Total

Number of Members 8.42 6.17 14.59Salary / Pro-labore 5,744.7 11,477.7 17,222.4 Minimum amount 190.8 790.0 980.8 Maximum amount 1,392.9 3,176.2 4,569.1 Average amount 574.5 1,860.2 2,434.7Profit sharing - 4,563.5 4,563.5 Minimum amount - 173.7 173.7 Maximum amount - 2,110.6 2,110.6 Average amount - 739.6 739.6 Amount– goals reached - 4,563.5 4,563.5 Amount effectively recognized - 4,563.5 4,563.5Benefits - 154.8 154.8 Minimum amount - 2.1 2.1 Maximum amount - 32.1 32.1 Average amount - 25.1 25.1Other - 2,000.0 2,000.0 Minimum amount - 1,000.0 1,000.0 Maximum amount - 1,000.0 1,000.0 Average amount - 324.1 324.1Benefits from the position - 4,675.0 4,675.0 Estimated minimum amount - 500.0 500.0 Estimated maximum amount - 3,000.0 3,000.0 Estimated average amount - 757.7 757.7Share-based compensation - 5,036.2 5,036.2 Estimated minimum amount - 227.3 227.3 Estimated maximum amount - 1,873.2 1,873.2 Estimated average amount - 816.2 816.2

Total 5,744.7 27,907.2 33,651.9


Board of Directors


Total

Number of Members 8.25 4 12.25Salary / Pro-labore 6,387.0 8,557.9 14,944.9 Minimum amount 534.2 939.5 1,473.7 Maximum amount 1,213.6 2,919.1 4,132.7 Average amount 774.2 2,139.5 2,913.7Profit sharing - 4,367.6 4,367.6 Minimum amount - 448.9 448.9 Maximum amount - 1,915.6 1,915.6 Average amount - 1,091.9 1,091.9 Amount– goals reached - 4,367.6 4,367.6 Amount effectively recognized - 4,367.6 4,367.6Benefits - 53.8 53.8 Minimum amount - 10.2 10.2 Maximum amount - 17.5 17.5 Average amount - 13.5 13.5Share-based compensation - 1,947.0 1,947.0 Estimated minimum amount - 654.8 654.8 Estimated maximum amount - 1,292.2 1,292.2 Estimated average amount - 486.8 486.8

Total 6,387.0 14,926.3 21,313.3

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Board of Directors


Total

Number of Members 9 4 13Salary / Pro-labore 6,512.2 7,605.0 14,117.2 Minimum amount 504.0 886.3 1,390.3 Maximum amount 1,264.9 3,288.6 4,553.5 Average amount 723.6 1,901.3 2,624.8Profit sharing - 2,992.9 2,992.9 Minimum amount - 257.7 257.7 Maximum amount - 1,434.3 1,434.3 Average amount - 748.2 748.2 Amount– goals reached - 2,992.9 2,992.9 Amount effectively recognized - 2,992.9 2,992.9Benefits 28.8 59.1 87.9 Minimum amount - 9.6 9.6 Maximum amount 9.6 16.5 26.1 Average amount 3.2 14.8 18.0Share-based compensation - 3,255.5 3,255.5 Estimated minimum amount - 227.8 227.8 Estimated maximum amount - 1,515.9 1,515.9 Estimated average amount - 813.9 813.9

Total 6,541.0 13,912.5 20,453.5

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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:

(a) general terms and conditions

The Annual and Extraordinary Shareholders' Meetings held on March 23, 2009 approved a “Stock Option Program” valid through the end of 2018 (“2009 Program”), which sets forth the general conditions for granting options to buy or subscribe to the shares issued by the Company (“Options”) at fixed terms and prices, to our executive officers and employees, and officers and employees of other companies that hold, or may come to hold, the direct or indirect control of the Company (“Eligible Employees”), pursuant to the Program. Under the program, the number of Options that may be granted annually in the Program is limited to 0.75% of shares representing the total capital stock of the Company. Similarly, the total number of Options not exercised, considering all active Plans of the Program, may not exceed 4% of the shares representing the total capital stock of the Company, provided that the total number of Shares issued or that may be issued under the Plan is always within the limit of authorized capital of the Company.In relation to the vesting and exercise periods of the Options: At the end of the third year from the date of the Meeting of the Board of Directors that approves the Stock Option Plan, half of the options will become vested. If they are exercised, the remaining 50% of the options will be canceled. At the end of the fourth year from the date of the Meeting of the Board of Directors that approves the Stock Option Plan, all the options will become vested and can be exercised.The maximum term for exercising the Options is eight years as of the date of the Meeting of the Board of Directors that approves the Stock Option Plan. The criteria for determining the value of the Option acquired under the Program is the simple average of the last thirty (30) trading sessions on the BM&FBOVESPA in the past sixty (60) consecutive days, as of the five days prior to the approval of the Plans in each year, always based on the average daily stock quote of each trading session.In connection with the 2009 Program, the meeting of the Board of Directors held on March 23, 2011 approved the Stock Option Plan – Calendar Year 2011 (“2011 Plan”) by which a total of 1,711,891 Options were granted at the purchase price of R$42.39 per share. The Plan elected as Program Participants, executive officers and employees who could: (i) prove the investment of at least 50% of the net amount received as profit sharing for 2010 to acquire shares issued by the Company, by submitting the respective brokerage statements to the Company; (ii) sign the Private Stock Option Instrument (“Option Agreement”), authorizing the blocking of said shares for sale; and (iii) evidence, in writing, upon notice sent to the Company, the intention to purchase the shares. Said grant was conditioned upon the ratification, by the Board of Directors, of the Option grant, which were to take place after the deadline for the submission of the brokerage statements. Of the 1,711,891 Options granted, only 1,491,780 Options were ratified by the Board.In connection with the 2009 Program, the meeting of the Board of Directors held on March 18, 2013 approved the Stock Option Plan – Calendar Year 2013 (“2013 Plan”) by which a total of 2,152,448 Options were granted at the purchase price of R$51.95 per share. The eligibility conditions remained the same as in previous Plans. Of the 2,152,448 Options granted, only 2,135,760 Options were ratified by the Board.In connection with the 2009 Program, the meeting of the Board of Directors held on March 17, 2014 approved the Stock Option Plan – Calendar Year 2014 (“2014 Plan”) by which a total of 1,548,107 Options were granted at the purchase price of R$36.87 per share. The eligibility conditions remained the same as in the previous Plan. In addition, employees can now use

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the free shares of the Company held by them in a number sufficient to attain the investment amount indicated in the expression of intent.Of the 1,548,107 Options granted, only 1,517,535 Options were ratified by the Board.The program describes the rules applicable to the managers in cases of voluntary termination, whether without or for cause, retirement due to time of service and/or age, permanent disability and death.The Extraordinary Shareholders' Meeting is responsible for approving and therefore amending, suspending or extinguishing the Program, as well as for amending the Bylaws to define the level of authority of the Board of Directors with regard to issues and their conditions.In connection with the 2015 Program, the Board of Directors meeting held on March 16, 2015 approved the Stock Option Plan for 2015 – Calendar Year 2015 (“2015 Plan”), under which 1,169,893 Options were granted at the purchase price of R$ 29.20 per share. Under the program, the number of Options that may be granted annually in the Program is limited to 0.55% of shares representing the total capital stock of the Company. Similarly, the total number of Options not exercised, considering all active Plans of the Program, may not exceed 3.35% of the shares representing the total capital stock of the Company, provided that the total number of Shares issued or that may be issued under the Plan is always within the limit of authorized capital of the Company.The Plan elected as Program Participants, executive officers and employees who could: (i) prove the investment of up to 50% of the net amount received as profit sharing for 2014 to acquire shares issued by the Company, by submitting the respective brokerage statements to the Company; (ii) sign the Private Stock Option Instrument (“Option Agreement”), authorizing the blocking of said shares for sale; and (iii) evidence, in writing, through notice sent to the Company, the intention to purchase the shares. Said grant was conditioned upon the ratification, by the Board of Directors, of the Option grant, which were to take place after the deadline for the submission of the brokerage statements. Of the 1,169,893 Options granted, only 1,073,855 Options were ratified by the Board.Shares acquired by Participants of the 2009, 2010, 2011, 2013, 2014 and 2015 Plans, using the amounts received as profit sharing for the reference-periods 2008, 2009, 2010, 2012, 2013 and 2014, respectively, cannot be sold, assigned, given as collateral, exchanged, rented or somehow transferred to third parties, under penalty of, (i) before the options are vested, losing the right to exercise the Options, which will be canceled; (ii) after the Options are vested, being obliged to immediately exercise the vested Options, regardless of their maximum exercise period.The program describes the rules applicable to the managers in cases of voluntary termination, whether without or for cause, retirement due to time of service and/or age, permanent disability and death.The Extraordinary Shareholders' Meeting is responsible for approving and therefore amending, suspending or extinguishing the Program. Any amendment to the Program and to prior Programs proposed by the Board of Executive Officers must be submitted for approval to the Extraordinary Shareholders’ Meeting and, once approved, may only involve stock options to be granted. The reasons that could lead the Program to be changed or extinguished include the occurrence of factors that cause severe changes in the economic scenario and compromise the financial situation of the Company.

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Stock Options

The 2009 Program is a burdensome program in which, until the fiscal year ended December 31, 2014, in order to participate managers were required to invest between 50% and 100% of the net value of their profit sharing program in the Company's shares, which remained blocked until the option was exercised, in accordance with the rules established in items (a) and (b) below.

(a) 50% 3 years after the Grant Date; (*)(b) all options 4 years after Grant Date.

(*) If the participant chooses to exercise 50% in the third year after the Grant Date, they automatically lose the right to the other half of the options.

As of the 2015 Program, the manager must invest part of the net value of their profit sharing (limited to 50%) in the Company’s shares, which remain blocked until the option is exercised, in accordance with the rules established in item (a); (b) and (c) below.

(a) one-third (1/3) 2 years after the Grant Date;(b) two-thirds (2/3) 3 years after the Grant Date; and(c) all options 4 years after the Grant Date.

If participants meet all requirements and conditions under the Stock Option Program and the respective vesting periods and option expiration dates are observed, Participants will be entitled to exercise their options, paying an amount to do so. The fair value of options granted is calculated using the binominal pricing method and recognized as an expense in the profit or loss for the year.

The criterion for calculating the value of the Option acquired under the Program is the mean of the past thirty (30) trading sessions on the BM&FBOVESPA in the past sixty (60) calendar days, as from the period of five days prior to approval of the Plans in each year, always based on the average daily stock quote in each trading session.

For plans granted up to the fiscal year ended December 31, 2014, the exercise of each plan by management is only permitted after meeting certain requirements of each plan, such as vesting dates and payment, by the participant, of the exercise price restated monthly in accordance with the IPCA inflation index. The exercise price of stock options granted as of 2015 will not be restated in accordance with this index, but rather in accordance with dividends paid after the option was granted and up to the option’s vesting.

For the aforementioned programs with the stock option model, the difference between the amount paid to exercise the option and the future price of sale of the Company’s share may represent a gain for participants in each plan.

Restricted Shares

The restricted stock program was implemented during fiscal year 2015 to a group of executives and employees eligible by the Board of Directors to encourage improvement in management and in their permanence at the Company. To participate in the Program, Eligible Executives and/or Employees must be formally nominated by the Board of Directors, in accordance with defined terms. The program has an indefinite duration and consists of the granting of common shares by the Company up to the annual limit of 0.20% of the total capital stock, and the total shares not transacted in the aggregate of all active plans of the program may not exceed 0.65% of the capital stock.

For each Plan, the Board of Directors, in accordance with this Program, will set a number of Restricted Shares for distribution amongst participants.

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The rights of Participants to Restricted Shares shall only be fully acquired in accordance with the Participants continued ties as a Manager or employee of the Company during the period between the Grant Date and the following dates and proportions:

(a) one-third (1/3) 2 years after the Grant Date;(b) two-thirds (2/3) 3 years after the Grant Date; and(c) all options 4 years after the Grant Date.

The Restricted Shares, whose rights have been fully acquired, pursuant to the Program and this Plan, may be freely sold by the Participant in accordance with applicable laws, observing the Blackout Periods.

In the Restricted Stock model, once the shares become vested, participants will not be required to pay any amount. The fair value of restricted stock granted is calculated using the binominal pricing method and recognized as an expense in profit or loss for the year.

Within the Restricted Stock model, the amount received upon acquiring ownership of the shares will represent a gain to participants.

The meeting of the Board of Directors held on April 10, 2015 approved the granting of 506,831 restricted shares to the beneficiaries of the 2015 restricted stock plan. No beneficiary has exercised any of these restricted shares yet.

The program describes the rules applicable to the managers in cases of voluntary termination, whether without or for cause, retirement due to time of service and/or age, permanent disability and death.

The Shareholders' Meeting is responsible for approving and therefore amending, suspending or extinguishing the Program. Any and all amendments to the Program proposed by the Board of Executive Officers must be submitted for approval to the Shareholders’ Meeting and, once approved, may only affect the Restricted Shares to be granted. The reasons that could lead the Program to be changed or extinguished include the occurrence of factors that cause severe changes in the economic scenario and compromise the financial situation of the Company.

Strategy Acceleration

The Company’s Extraordinary Shareholders’ Meeting held on July 27, 2015 approved the Stock Option Plan to Accelerate Strategy.

The Program consists of the granting, without consideration, of stock options or the subscription of common shares to a select group of managers and employees chosen by the Board of Directors, as well as to a select group of managers and employees of other companies that are or come to be under the direct or indirect control of the Company, whether domestic or foreign, as part of their compensation.

For this Program, the number of Options that may be granted shall not exceed 1.5% of the shares representing the total capital stock of the Company, provided that the total number of Shares issued or that may be issued under the Plan is always within the limit of the authorized capital of the Company. If any Option is extinguished or canceled without being fully exercised, the Shares linked to these Options shall be made available again for future grants of Options.

The criterion for calculating the value of the Option acquired under the Program is the mean of the past thirty (30) trading sessions on the BM&FBOVESPA in the past sixty (60) calendar days, as from the period of five days prior to approval of the Plans in each year, always based on the average daily stock quote in each trading session.

Under this program, options may be exercised as follows:

(a) 50% 4 years after the Grant Date;(b) 50% 5 years after the Grant Date;

Once the requirements and conditions under the Stock Option Program for Strategy Acceleration are met, and observing the vesting period and deadline for exercising the Options, participants will be entitled to exercise the Options, after paying an amount. The fair

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value of options granted is calculated using the binominal pricing method and recognized as an expense in the profit or loss for the year.

The exercise price of these stock options will not be restated at the IPCA inflation index, but rather in accordance with dividends paid after the option was granted and up to the option’s vesting.

The meeting of the Board of Directors held on April 10, 2015 approved the granting of 1,870,000 options to the beneficiaries of the 2015 Stock Option Program for Strategy Acceleration. No beneficiary has exercised any of these options yet. The exercise price on December 31, 2015 was R$26.97.

The program describes the rules applicable to the managers in cases of voluntary termination, whether without or for cause, retirement due to time of service and/or age, permanent disability and death.

The Extraordinary Shareholders' Meeting is responsible for approving and therefore amending, suspending or extinguishing the Program. Any amendment to the Program and to prior Programs proposed by the Board of Executive Officers must be submitted for approval to the Extraordinary Shareholders’ Meeting and, once approved, may only involve stock options to be granted. The reasons that could lead the Program to be changed or extinguished include the occurrence of factors that cause severe changes in the economic scenario and compromise the financial situation of the Company.

Stock options and Strategy Acceleration

On December 31, 2015, a total of 8,124,419 options were available at the weighted average exercise price of R$37.91, of which 1,548,211 were vested.

On December 31, 2014, a total of 5,296,478 options were available at the weighted average exercise price of R$47.30, of which 1,939,132 were vested.

Restricted SharesOn December 31, 2015, the program totaled 509,832 shares, which were not yet vested.

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13.5. Stock Option Plan and Restricted Share Plan recognized in the last three fiscal years

Amounts planned for fiscal year 2016 (the Audit Board was not installed this year):

The following table refers to options granted or to be granted in 2016:


Number of Members* 9

In relation to each Grant of Options, restricted shares and strategy acceleration program

2016 stock option plan 2016 Restricted shares

Stock options (strategy acceleration program)

2016Tranche 1 Tranche 2 Tranche 3 Tranche 1 Tranche 2 Tranche 3 Tranche 1 Tranche 2

Grant Date March 16, 2016

March 16, 2016

March 16, 2016

March 16, 2016

March 16, 2016

March 16, 2016

March 16, 2016

March 16, 2016

Number granted 32,667 32,667 32,667 233,167 33,167 33,167 1,045,000 1,045,000Vesting period 3.16.2018 3.16,2019 3.16,2020 3.16.2018 3.16,2019 3.16,2020 3.16,2020 3.16,2021Deadline for exercising options 3.16,2024 3.16,2024 3.16,2024 N/A N/A N/A 3.16,2024 3.16,2025Period with restriction to share transfer N/A N/A N/A 3.16.2020 3.16.2021 3.16.2022 N/A N/AAverage weighted exercise price of each of the following groups of shares: 26.8 26.8 26.8 N/A N/A N/A 26.8 26.8Outstanding at start of fiscal year - - - - - - - -Ratified (canceled) during fiscal year - - - - - - - -Exercised during fiscal year - - - - - - - -Expired during fiscal year - - - - - - - -Fair value at Grant Date 14.8 15.1 15.3 26.1 25.2 24.4 16.5 16.5Potential dilution in event of exercise 0.01% 0.01% 0.01% 0.05% 0.01% 0.01% 0.24% 0.24%* There are no members who do not receive compensation.

Amounts related to fiscal year 2015 (The Audit Board was not installed this year):


Number of Members 6.17

In relation to each Grant of Options, restricted shares and strategy acceleration program

2015 stock option plan Restricted sharesStock options (strategy acceleration program)

Tranche 1 Tranche 2 Tranche 3 Tranche 1 Tranche 2 Tranche 3 Tranche 1 Tranche 2

Grant Date March 16, 2016

March 16, 2016

March 16, 2016

March 16, 2016

March 16, 2016

March 16, 2016 July 28, 2015

July 28, 2015

Number granted 31,797 31,797 31,797 5,667 5,667 5,667 137,500 137,500Vesting period 3.16,2017 3.16.2018 3.16,2019 3.16,2017 3.16.2018 3.16,2019 7.28.2019 7.28.2020Deadline for exercising 3.16,2023 3.16,2023 3.16,2023 N/A N/A N/A 7.28.2023 7.28.2024Period with restriction to share transfer N/A N/A N/A 3.16.2019 3.16.2020 3.16.2021 N/A N/AAverage weighted exercise price of each of the following groups of shares: 28.4 28.4 28.4 N/A N/A N/A 27.0 27.0Outstanding at the start of the fiscal year - - - - - - - -Ratified (canceled) during fiscal year (16,700) (16,700) (16,700) (2,833) (2,833) (2,833) - -Rectified due to change in the Board of Executive Officers 34,793 34,793 34,793 44,110 44,110 44,110 577,500 577,500Exercised during fiscal year - - - - - - - -

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Expired during fiscal year - - - - - - - -Fair value of at Grant Date 9.7 10.1 10.6 22.3 21.3 20.4 12.5 12.4Potential dilution in the event of exercise

0.01% 0.01% 0.01% 0.00% 0.00% 0.00% 0.03% 0.03%

The following table refers to options granted prior to 2015:

Number of Members 4In relation to each Grant

Grant Date March 21, 2011 March 21, 2013 March 17, 2014Number of Options granted 243,410 203,094 299,299Vesting period 3.21.2015 3.17.2017 3.17.2018Deadline for exercising the options 3.21.2019 3.17.2021 3.17.2022Period with restriction to share transfer N/A N/A N/AAverage weighted exercise price of each of the

following groups of shares: 58.1 63.5 42.5Outstanding at the start of the fiscal year 271,422 203,094 135,168Ratified (canceled) during fiscal year (66,132) (95,090) (59,422)Exercised during fiscal year - - -Expired during fiscal year - - -Rectified due to change in the Board of Executive Officers - - 119,745Fair value of the options at Grant Date 16.5 12.1 8.5Potential dilution in the event of exercise of the options 0.05% 0.03% 0.05%

Amounts related to fiscal year 2014 (The Audit Board was not installed this year):

Board of Executive OfficersNumber of Members 4In relation to each Grant

Grant Date March 19,

2010

March 21,

2011

March 21,

2013

March 17,

2014Number of Options granted 601,822 188,199 495,366 275,915Vesting period 19,03,2014 21,03,2015 17,03,2017 17,03,2018Deadline for exercising the options 19,03,2018 21,03,2019 17,03,2021 17,03,2022Period with restriction to share transfer N/A N/A N/A N/AAverage weighted exercise price of each of

the following groups of shares: 45.00 52.51 57.99 38.40Outstanding at the start of the fiscal year 601,822 393,489 479,393 135,168Ratified (canceled) during fiscal year (378,857) (122,067) (276,299) -Exercised during fiscal year - - - -Expired during fiscal year - - - -Fair value of the options at Grant Date 10.82 16.45 12.10 8.54Potential dilution in the event of exercise of the options 0.13% 0.05% 0.09% 0.06%

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Amounts related to fiscal year 2013 (The Audit Board was not installed this year) and 2014 grant


Number of Members 4In relation to each Grant

Grant Date April 22, 2009March 19,

2010

March 21,

2011

March 21,

2013

March 17,

2014Number of Options granted 510,048 601,822 188,199 495,366 275,915

Vesting period 22,04,2013 19,03,201421,03,20

15

17,03,201

7

17,03,201

8

Deadline for exercising the options 22,04,2017 19,03,201821,03,20

19

17,03,202

1

17,03,202

2Period with restriction to share transfer N/A N/A N/A N/A N/AAverage weighted exercise price of each

of the following groups of shares: 28.82 42.49 49.35 53.93 36.87Outstanding at the start of the fiscal year 510,048 601,822 188,199 495,366 275,915Ratified (canceled) during fiscal year - - - (123,977) -Exercised during fiscal year (113,721) - - - -Expired during fiscal year - - - - -Fair value of the options at Grant Date 7.83 10.82 16.45 12.10 8.54Potential dilution in the event of exercise of the options 0.12% 0.13% 0.05% 0.09% 0.06%

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13.6. Outstanding Stock Options and Restricted Shares

Amounts related to fiscal year 2015(1)

Board of Executive OfficersNumber of Members* 6.17Regarding options Plan 2011 Plan 2013 Plan 2014 Plan 2015

(tranche 1)Outstanding number 205,290 108,004 195,491 49,891

Number of vested options 205,290 - - -

Vesting date 03.23.2015 03.17.2017 03.17.2018 03.16.2017Deadline for exercising the options 03.23.2019 03.17.2021 03.17.2022 03.16.2023Period with restriction to share transfer N/A N/A N/A N/AAverage weighted exercise price 58.1 63.5 42.5 28.4Fair value of the options at the last day of the fiscal year

16.5 12.1 8.5 9.70

Fair value of all options at the last day of the fiscal year

11,931,455 6,859,334 8,308,368 1,415,897

*There are no members who do not receive compensation.

Board of Executive OfficersNumber of Members 6.17

Regarding options 2015 Plan (tranche 2)

2015 Plan (tranche 3)

2015 Plan - Strategy

acceleration (tranche 1)

2015 Plan - Strategy

acceleration (tranche 2)

Outstanding number 49,891 49,891 715,000 715,000Number of exercisable

options - - - -

Vesting date 03.16.2018 03.16.2019 07.28.2019 07.28.2020Deadline for exercising the options 03.16.2023 03.16.2023 07.28.2023 07.28.2023Period with restriction to share transfer N/A N/A N/A N/AAverage weighted exercise price 28.38 28.38 26.97 26.97Fair value of the options at the last day of the fiscal year 10.10 10.57 12.46 12.40

Fair value of all options at the last day of the fiscal year 1,415,897 1,415,897 19,283,550 19,283,550

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Board of Executive OfficersNumber of Members 6.17

Regarding restricted shares2015 Plan –

Restricted shares (tranche 1)

2015 Plan - Restricted shares

(tranche 2)

2015 Plan - Restricted shares

(tranche 3)Outstanding number 46,944 46,944 46,944

Number of vested shares - - -Vesting date 03.16.2017 03.16.2018 03.16.2019Deadline for exercising the restricted shares 03.16.2023 03.16.2023 03.16.2023Period with restriction to share transfer N/A N/A N/AAverage weighted exercise price - - -Fair value of the restricted shares at the last day of the fiscal year

22.27 21.33 20.42

Fair value of all restricted shares at the last day of the fiscal year

- - -

(1) The Audit Board was not installed in 2015.

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13.7. Exercised options and/or restricted shares

Amounts related to fiscal year 2015 (1):

No options and/or restricted shares were exercised in fiscal year 2015.

Amounts related to fiscal year 2014 (1):Board of Executive Officers

Number of Members* 4Regarding outstanding options 2008

Plan2009Plan

2010Plan

2011Plan

Number 139,298 396,327 - -

Average weighted exercise price 26.75 30.67 n/a n/aDifference between the exercise price and the market price of shares in relation to exercised Options

1,584 468 n/a n/a

In relation to the shares from the exercise

Shares related to the share-based compensation for the Board of Directors and the Board of Executive Officers were not delivered

(1) The Audit Board was not installed in 2014.*There are no members who do not receive compensation.

Amounts related to fiscal year 2013 (1):Board of Executive Officers

Number of Members 4Regarding outstanding options 2007

Plan2008Plan

2009Plan

2010Plan

Number 120,000 5,523 113,721 0Average weighted exercise price 32.63 25.68 28.11 N/ADifference between the exercise price and the market price of shares in relation to exercised Options

1,999 112 2,360 N/A

In relation to the shares from the exercise

Shares related to the share-based compensation for the Board of Directors and the Board of Executive Officers were not delivered


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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:

Amounts related to fiscal year 2016 (1)

Stock option and Restricted shares plan

Board of Directors


a) pricing model N/A Binomialb) data and assumptions used in the pricing

model, including average weighted price of shares, exercise price, expected volatility, option duration, expected dividends and risk-free interest rate

N/A

Volatility of approximately 37.2%; Dividend yield of 3.4%; Risk-free rate of 12.9-

13.2%.c) method and assumptions used to incorporate

the expected effects of early exercise N/A N/A

d) how expected volatility is determined N/A Standard deviation 740 days.

e) whether any other characteristic of the option was incorporated in the calculation of its fair value

N/A N/A

Strategy acceleration program

Board of Directors




N/A

Volatility of approximately 37.2%; Dividend yield of 3.4%; Risk-free rate of 12.9-

13.2%.c) method and assumptions used to incorporate

the expected effects of early exercise N/A N/A



N/A N/A


Stock option and Restricted shares plan

Board of Directors




N/AVolatility of 30%; Dividend yield of 4.3%; Risk-free rate of 12.6%.

c) method and assumptions used to incorporate the expected effects of early exercise N/A N/A

d) how expected volatility is determined N/A Standard Page 204 of 293

deviation 740 days.


N/A N/A

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Strategy acceleration program

Board of Directors




N/AVolatility of

approximately 32%; Dividend yield of 4.2%; Risk-free rate of 12.2%.




N/A N/A


Board of Directors






d) how expected volatility is determined N/AStandard

deviation 740 days.


N/A N/A


Board of Directors






d) how expected volatility is determined N/AStandard

deviation 740 days.


N/A N/A (1) The Audit Board was not installed in 2016, 2015, 2014 and 2013.

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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

Not applicable.

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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:

Board of Directors

Board of Executive Officers Total

a) Number of members* 8.42 6.17 14.59b) Name of the plan Not applicable Incentive savings Incentive

savingsc) number of managers in

conditions to retireNot applicable

According to 60 years

Contract (end of relationship with the

Company )

-

d) conditions for early retirementNot applicable

Minimum age 50 years (end of

relationship with the Company)

-

e) updated amount of contributions accumulated in the pension plan up to the closing of the last fiscal year, discounting the portion related to contributions made directly by the managers

Not applicable 170.2 170.2 (*)

f) total amount accumulated of the contributions made during the last fiscal year, discounting the portion related to contributions made directly by the managers

Not applicable 23.8 23.8

g) whether there is the possibility of early redemption and under which conditions

Not applicable

Yes, early redemption of

Company portion, only upon

termination of the employee

and after 5 years of contributions to the

plan

-

(*) Amounts restated in accordance with the BrasilPrev account reference December 2015, considering the entire Company.

*There are no members who do not receive compensation.

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13.11. Average compensation of the Board of Directors, Board of Executive Officers and Audit Board for the last three fiscal years

Annual Value

12/ 31/ 2015 12/ 31/ 2014 12/ 31/ 2013 12/ 31/ 2015 12/ 31/ 2014 12/ 31/ 2013Number of members 6,17 4,00 4,00 8,42 8,25 9,00Number of paid members 6,17 0,00 0,00 8,42 0,00 0,00Value of the bigger salary (Reais) 6.779.000,00 6.144.400,00 6.255.260,00 1.392.900,00 1.213.600,00 1.274.500,00Value of the minor salary (Reais) 1.266.600,00 2.053.400,00 1.381.420,00 190.800,00 534.200,00 504.000,00Value of the average salary (Reais) 2.537.000,00 3.731.700,00 3.478.130,00 574.500,00 774.200,00 726.800,00

Observation

Executive Board Board of Directors

Executive Board

Board of Directors

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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

A proposal was submitted for shareholder approval at the Extraordinary Shareholders Meeting held on February 6, 2015 recommending a R$9 million increase in overall annual compensation for management approved by the Annual and Extraordinary Shareholders Meeting held on April 11, 2014, to include the amount negotiated with a member of the Board of Directors that left the Company recently, in the form of a Private Instrument of Confidentiality and Non-Competition ("Agreement"). The value of this contract is being amortized on a monthly basis during its duration of thirty-six (36) months, since January 1, 2015, against expenses recorded in this category. Payments will be made in two (2) installments: the first, equal to sixty percent (60%) of the total value paid upon the signature of the Agreement and the remaining installment, representing forty percent (40%) of the total value was paid on January 1, 2018.

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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


Board of Directors Board of Executive Officers Total32% 0% 8%








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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

Amounts related to fiscal year 2015 (1) Board of Directors Board of Executive Officers Total

0 0 0(1) The Audit Board was not installed in 2015.

Amounts related to fiscal year 2014(1) Board of Directors Board of Executive Officers Total


Amounts related to fiscal year 2013 (1) Board of Directors Board of Executive Officers Total


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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

We do not have any values recognized in the profit or loss of the direct or indirect controlling shareholders, of companies under shared control or of subsidiaries of the Company as compensation of the members of the Board of Directors or Board of Executive Officers. In addition, during fiscal year 2015, the Audit Board was not installed.

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13.16. Provide other Material Information

There is no other material information that was not mentioned in the previous topics.

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14.Human Resources14.1 Describe the issuer’s human resources, providing the following information:

a. number of employees (total, by groups based on function and geographic region)

G10- Number of Natura employees Unit

2015

FEMALE MALE TOTAL

Brazil number 2,988 2,163 5,151

Argentina number 465 85 550

Chile number 141 44 185

Mexico number 70 47 117

Peru number 202 28 230

Colombia number 272 50 322

France number 28 8 36

Total number 4,166 2,425 6,591

G4-10- Number of employees by functional level (Brazil and

Intl. Ops.)Unit

2015

FEMALE MALE TOTAL

Production Positions unit 897 1,349 2,246

Administrative Positions unit 2,874 751 3,625

Management Positions unit 381 285 666

Executive Positions unit 14 40 54

TOTAL unit 4,166 2,425 6,591

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b. Number of outsourced workers (total, by groups based on function and geographic)

G4-10- Other employment contracts Unit

2015

FEMALE MALE TOTAL

Apprentices(1) unit 108 49 157

Interns unit 84 31 115

Temporary workers(2) unit 118 1,025 1,143

Resident outsourced workers(3) unit 721 1,444 2,165

Total unit 1,031 2,549 3,580

c. Turnover rate

LA2 – Turnover in Brazil by Gender * (%) Unit 2015

Male % 9

Female % 8*Definition of turnover: number of involuntary (without and for cause) or voluntary terminations, with the hiring of other person to fill the opening. Calculation method: terminations with request for filling the opening/effective headcount of the company.

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14.2. Comment on any material change in the numbers disclosed in item 14.1 above

- Although the number of apprentices and interns increased 34% and decreased 32%, respectively, the number of openings approved remained the same. The difference is due to seasonality, more specifically, the difference between the start and end of the period. - The difference in the number of temporary workers was due to the seasonal increase in demand. The Company needed to hire temporary workers to meet the sales strategy for the Mother’s Day and Christmas periods.- International Operations – The business in France was restructured and the physical store was closed, which resulted in a reduction in headcount.- Managerial and Executive Positions. The reduction reported in these levels was due to efforts to capture efficiency and productivity gains in the first half of 2015, when the Company implemented a project to reduce headcount to obtain a leaner organization with fewer hierarchical levels.

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14.3 Description of employee compensation policy

(a) Policy on salaries and variable compensation

Compensation in our Company is linked to our results and the increase in its value, as well as social and environmental aspects. The compensation we offer enables us to attract, retain and recognize highly qualified professionals to manage our Company.We monitor the changes in the external environment and annually compare our compensation practices with reference markets, such as competitors in the consumer goods segment, Brazilian multinationals, companies listed on the stock exchange or whose compensation strategies are similar to those of Natura. We have a policy that positions the total compensation of different employee groups at above the market standard in order to share the wealth generated with all those who participate, in an autonomous and entrepreneurial manner, in making our value proposition come true.Concerning the base compensation, we opt to pay 14 monthly salaries per year in Brazil, whereas the legal requirement is 13 salaries, which especially benefits lower-income professional, promoting a culture of savings. Meanwhile, our sales team employees receive a premium for each cycle (period of 21 days), proportional to the results obtained. For this public, the 14th salary is replaced by the sales premium, which is a specific model of variable compensation.For short-term incentives, the new Employee Profit Sharing model for all managers is linked to Natura’s strategic planning and to the performance management program. With more collective characteristics and a simpler process for calculating profit or loss, the system considers financial performance indicators (EBITDA), social and environmental indicators (consolidated workplace climate survey and consultant loyalty survey, consolidated carbon emissions, Natura brand preference) and individual indicators.For the group of operational employees, sales force and administrative employees up to the coordinator level, variable compensation is linked to the achievement of Operating Results and social and environmental and individual targets. Moreover, for the sales force, we have a sales commission program (sales bonus) linked to the achievement of certain business indicators.(b) Policy on benefits

Benefits play a strategic role in the organization and are offered through a comprehensive benefits package covering health, safety and quality of life.The Company seeks to define policies and programs that are competitive with the market, aligned with Natura concepts and help to recruit and retain employees, with the big challenge ensuring the lowest cost with the highest productivity.The Company also engages consultants to provide support to the HR departments, evaluating what is most pertinent for each client.The benefits include: Health and Dental PlanTo provide greater convenience to employees and their dependents (spouses, partners and children up to age 24), the Company offers health and dental plans with nationwide coverage.

Life InsuranceTo ensure financial security and provide a financial guarantee in the event of a loss for employees and their dependents (spouses, partners and children up to age 24), Natura has a Group Life Policy covering natural death, accidental death and disability.The plan also includes Funeral Assistance for employees and their dependents in the event of death.

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Chartered Bus Service Natura offers its employees chartered bus service that is fully paid by the Company, with various lines served on major thoroughfares with high concentrations of employees.

Payroll LoansEmployees may request personal loan with interest rates below those of other credit facilities in the market. The amount can be repaid in up to 48 monthly installments, which are discounted directly from their payroll and may not exceed 30% of their monthly salary. NurseryThe nursery service gives mothers the proximity to support the magical moment of breastfeeding shared by them and their babies, strengthen the connection between mother and child and maintain contact with their children any time they deem necessary.It offers children a space for education, human relations, constructing meanings and contact with cultural objects, which supports their independence. It also gives mothers an opportunity to conciliate maternity with a career.EligibilityMothers with children aged from 4 months to 2 years, 11 months and 29 days, and fathers with custody of the child. Nurseries are currently available at the sites in Cajamar and Lapa.

Daycare AssistanceFor mothers working at sites without nurseries or who opted not to use them, Natura offers Daycare Assistance, which is a monthly amount paid to the mother to support preschool expenses for children aged up to 2 years, 11 months and 29 days.

GymAt the Cajamar site, Natura offers a gym for use by employees and their dependents and partners. The benefit is yet another way to promote good health by encouraging physical activity, which provides various health benefits, such as: - lower risk of heart disease, high blood pressure, osteoporosis and obesity;- better cholesterol levels;- increased muscle resistance;- mental well-being and treatment of depression;- relieves stress and anxiety;- combats insomnia and other symptoms.

The Company offers the following programs:- Runners Project- Soccer Project- Get Moving Project (functional training)

The Company also participates in various sports events, where it has won some awards:- First place in Ilha Bela Relay Race in 2014;- Fifth place in three-man relay race (2011); - Fourth place in three-man relay race (2012); - Fifth place in six-man relay race (2013); - Third place in eight-person and six-person relay races (both in 2014); - Third place in six-man relay race in 2015.

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RestaurantA balanced diet is essential for a healthy life. With that in mind, Natura offers at the Cajamar and NAPS units restaurants with a diversified and balanced menu prepared by nutritionists, as well as snack bars and snack carts serving all departments with healthy products, such as yogurts, fresh fruits, whole-grain foods, etc., providing greater convenience to employees. The Company’s restaurants serve no fried foods, only baked foods.For sites without restaurants, the Company provides the Meal Voucher benefit, which can be used in nearby restaurants. It also publishes notices reinforcing the importance of a healthy diet and offers nutritional guidance in person at the Cajamar site or through the health plan or the Personal Support Program (PAP).

Personal Support Program (PAP)Natura is a company that promotes Well Being Well. It believes that each employee is responsible for caring for themselves and for enhancing the relations they forge with themselves and with the world around them. To support them in this process, the Company offers a series of programs, opportunities, benefits and services that encourage them to take care of their body and mind.Within this concept, the Company offers an important tool: Personal Support Program (PAP) – a communication channel available 24 hours a day (toll-free and unlimited) to talk with a team formed by nutritionists, educators, psychologists, physiotherapists and personal trainers. The program also offers practical tips on resolving bureaucracy, organizing your financial life and caring for your pets.The benefit is offered to employees and their spouses, children and parents.Guidance and help is available in the following areas: - Psychological- Legal Assistance- Financial Guidance- Nutrition- Physiotherapy- Personal Trainer- Education- Pet Care

Benefits for You ProgramThe program organizes actions for Natura employees that facilitate their day-to-day lives so that they can focus fully on what really matters to them.- Cultural Partnership (e.g., tickets for Cinemark movie theaters and theatrical performances)- Education Partnership (e.g., college, vocational programs and language courses)- Product and Service Partnerships (e.g., Compra Certa and Electrolux buying clubs)- Tourism Partnership (e.g., TAM and Agastur)- School Supplies Sale, conducted once a year- Convenience Store: space for sales of medicines, eyeglasses and showcasing products from NGOs and certain organizations.- Healthy Eating Guide- Dressing Guide

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Birthday gift and Happy DayOn their birthdays, employees receive a day off and a gift certificate corresponding to the price of a Kaiak perfume (R$109.80) to be spent in the VIP store

Newborn kit When a child is born, employees receive a gift certificate to receive a Special Baby Kit from the Natura Mamãe e Bebê line.

VIP – Sales and donations of products- 40% discount on five Natura products - 40% discount on five Natura products in the SOU line

(c) Salary and variable compensation policy

The Restrictive Shares and Stock Option or Subscription programs apply to employees in the management level or above, in accordance with the conditions described in item 14.3.

The following table presents the characteristics of share-based compensation to non-management employees for the fiscal year ended December 31, 2015:

Stock Option or Subscription Plan 2015

Stock Option or Subscription Plan for Strategic Acceleration 2015

Restricted Stock Option Plan 2015

a) Group of beneficiaries 90 6 148

b) Vesting conditions (1) (2) (3)

c) Exercise price 29.20 27.79 -

e) Number of shares under the plan 978,460 1,155,000 445,000

(1) The first lot of options, e.g., 33% of the options from the 2015 Plan, will be vested as from 3/16/17, the second lot (33.33%) as from 3/16/18 and the third lot (33.33%) as from 3/16/19. As lots are vested and exercised, the shares linked to the options are unblocked and may be traded.(1) The first lot of options, e.g., 50% of the options of the Stock Option Plan for Strategy Acceleration, will be vested as from 7/28/19 and the second lot as from 7/28/20. As the lots become vested, they may be exercised.(3) The first lot of options, e.g., 33% of the options from the 2015 Plan, will be vested as from 3/16/17, the second lot (33.33%) as from 3/16/18 and the third lot (33.33%) as from 3/16/19. As lots are vested, the shares are transferred to the name of the participant and may be traded.

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14.4. Describe the relations between the issuer and trade unions, indicating if there were any stoppages or strikes in the past three fiscal yearsOur Employees, whether or not members of labor unions, are represented by five different unions, namely:

1. Sindicato dos Empregados de Agentes Autônomos do Comércio e em Empresas de Assessoramento, Perícias, Informações e Pesquisas e de Empresas de Serviços Contábeis no Estado de São Paulo (Union of Employees of Autonomous Business Agents, and Advisory, Investigation, Information and Research and Accounting Services Companies in the State of São Paulo)

2. Sindicato dos Comerciários de São Paulo (Union of Commerce Employees of São Paulo)3. Sindicato dos Trabalhadores nas Indústrias Químicas, Farmacêuticas, Plásticas, de

Explosivos, Abrasivos, Fertilizantes e Lubrificantes de Osasco e Cotia (Union of Workers of Chemical, Pharmaceutical, Plastic, Explosive, Abrasive, Fertilizer and Lubricant Industries of Osasco and Cotia)

4. Sindicato dos Trabalhadores nas Indústrias Químicas, Farmacêuticas do Estado do Pará (Union of Workers of Industrial, Chemical and Pharmaceutical Industries of the State of Pará)

5. Sindicato dos Empregados em Entidades Culturais, Recreativas, de Assistência Social, de Orientação e Formação Profissional no Estado de São Paulo (Union of Workers of Cultural, Recreational, Social Assistance, Professional Guidance and Training of the State of São Paulo)

6. Sindicato dos Trabalhadores na Movimentação de Mercadorias em Geral e Logística de Jundiaí e Região (Union of Workers Handling General Goods and Logistics in the City of Jundiaí and Region)

Collective bargaining negotiations and the relationship with labor unions representing Natura employees are conducted by the Vice-President of People and Culture / Union and Labor Relations and the respective Employers Union, in accordance with the limits and standards set by applicable law, as well as clauses set forth in Collective Agreements and Conventions. Formal meetings are periodically held with these labor unions (Workers and Employers) to address matters that interest both parties, preferably ahead of time, prioritizing transparent dialogue in the Capital-Work relationship. Natura respects the freedom of association and recognizes the Labor Union as the legitimate representative of the working class, and does not impose any restriction on the free association of its employees to their respective labor unions.

In February 2014, the Cajamar plant located in the state of São Paulo had a stoppage of two hours and thirty minutes in the beginning of the third shift. The situation was contained and the plant resumed normal operation.

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14.5. Provide other information deemed material by the issuer There is no other material information related to this Section.

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15. Ownership15.1 / 15.2 – Ownership

ShareholderShareholder’s Individual / Corporate Taxpayer ID (CPF / CNPJ)

Nationality – State Signatory to shareholders’ agreement

Controlling shareholder Last alteration

Shareholders residing abroad

Name of Legal Representative or Proxy

Type of person CPF / CNPJ

Number of commonshares (units)

Common shares - % Number of preferredshares (units)

Preferred shares - % Total number ofshares (units)

Total shares - %

Breakdown per type of share (units)Type of share Number of shares (units) Shares - %Fabricius Pinotti290.883.888-57 Brazilian-SP Yes Yes 2/12/2015No

2,929,968 0,679430 % 0 0.000000% 2.929.968 0,679430%

Vinicius Pinotti272.056.278-50 Brazilian-SP Yes Yes 2/12/2015No

2.929.968 0,679430% 0 0.000000% 2.929.968 0,679430%

Estate of Ronuel Macedo de Mattos553.144.148-72 Brazilian-SP Yes Yes 7/22/2009No

602,081 0,139600% 0 0.000000% 602,081 0,139600%

Maria Heli Dalla Colletta de Mattos436.825.888-68 Brazilian-SP Yes Yes 2/12/2015No

11,939,066 2.768500% 0 0.000000% 11,939,066 2.768500%

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Total shares - %

Breakdown per type of share (units)Type of share Number of shares (units) Shares - %Passos Participações S.A05.561.635/0001-81 Brazilian-SP Yes Yes 12/30/2014No

25,335 0.005875% 0 0.000000% 25,335 0.005875%

Fábio Dalla Colletta de Mattos184.090.138-19 Brazilian-SP Yes Yes 2/12/2015No

1,989,844 0.461425% 0 0.000000% 1,989,844 0.461425%

Gustavo Dalla Colletta de Mattos196.793.638-21 Brazilian-SP Yes Yes 2/12/2015No

1,989,844 0.461400% 0 0.000000% 1,989,844 0.461400%

Pedro Luiz Barreiros Passos672.924.618-91 Brazilian-SP Yes Yes 12/30/2014No

13,115,823 3.041426% 0 0.000000% 18,920,220 3.041426%

Page 225 of 293










Total shares - %

Breakdown per type of share (units)Type of share Number of shares (units) Shares - %Utopia Participações S.A.04.819.657/0001-36 Brazilian-SP Yes Yes 7/22/2009No

91,557,964 21.231400% 0 0.000000% 91,557,964 21.231400%

Lisis Participações S.A.05.561.628/0001-80 Brazilian-SP Yes Yes 7/22/2009No

95,946,968 22.249100% 0 0.000000% 95,946,968 22.249100%

Itatiaia Multimercado Fundo de Investimento-Investimento no Exterior22.014.235/0001-75 Brazilian-SP Yes Yes 2/12/2016No

10,320,689 2,393263% 0 0.000000% 10,320,689 2,393263%

Guilherme Peirão Leal383.599.108-63 Brazilian-SP Yes Yes 7/22/2009No

3,462,917 0.803000% 0 0.000000% 3,462,917 0.803000%

Antonio Luiz da Cunha Seabra332.927.288-00 Brazilian-SP Yes Yes 7/22/2009No

3,628,920 0.841500% 0 0.000000% 3,628,920 0.841500%

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Shareholders residing abroad Name of Legal Representative or Proxy





Total shares - %

Breakdown per type of share (units)Type of share Number of shares (units) Shares - %Norma Regina Pinotti187.890.098-60 Brazilian-SP Yes Yes 2/12/2015No

17,578, 032 4.076166% 0 0.000000% 17,578,032 4. 076166%

Commonwealth Bank of Australia(CBA)Commonwealth Bank of Australia(CBA

Não Não 29/07/2016

Sim21.692.700 5,030317% 0 0.00000% 21.692.700 5,030317%

OTHER150.592.26 34,920939 0 0.00000% 150.592.26 34,920939

TREASURY SHARES – Date of last change: 8/31/2013936.884 0,217254% 0 0.00000% 936.884 0,217254%

TOTAL431,239,264 100.000000% 0 0.000000% 431,239,264 100.000000%

Page 227 of 293

CONTROLLING SHAREHOLDER / INVESTORSHAREHOLDERShareholder’s Individual / Corporate Taxpayer ID (CPF / CNPJ)



Shareholder residing abroad Name of Legal Representative or Proxy

Type of person CPF/CNPJ

Breakdown of shares (units)Number of common

shares (units)Common shares - % Number of preferred

shares (units)Preferred shares - % Total number of

shares (units)Total shares - %

CONTROLLING SHAREHOLDER / INVESTORShareholder’s Individual / Corporate Taxpayer’s ID (CPF / CNPJ)

Breakdown capital stock

Lisis Participações S.A. 05.561.628/0001-80Antonio Luiz da Cunha Seabra332.927.288-00 Brazilian-SP Yes Yes

No19,012,949 99.990000 0 0.000000 19,012,949 99.990000

Share type Number of shares (units) Shares - %

TOTAL 0 0.000000%

OTHER

10 0.010000 0 0.000000 10 0.010000

TOTAL

19,012,959 100.000000 0 0.000000 19,012,959 100.000000

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shares (units)Common shares – % Number of preferred





Passos Participações S.A. 05.561.635/0001-81

OTHER

367 0.010000 0 0.000000 367 0.010000

Pedro Luiz Barreiros Passos672.924.618-91 Brazilian-SP Yes NoNo

5,116,906 99.990000 0 0.000000 5,116,906 99.990000

Share type Number of shares (units) Shares - %

TOTAL 0 0.000000%

TOTAL

5,117,273 100.000000 0 0.000000 5,117,273 100.000000

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Nationality - State Signatory to shareholders’ agreement





shares (units)Common shares - % Number of preferred





Utopia Participações S.A. 04.819.657/0001-36Guilherme Peirão Leal383.599.108-63 Brazilian-SP Yes YesNo

5,716,131 48.750000 0 0.000000 5,716,131 48.750000

Share type Number of shares (units) Shares - %TOTAL 0 0.000000%OTHER

6,007,680 51.250000 0 0.000000 6,007,680 51.250000

TOTAL

11,723,811 100.000000 0 0.000000 11,723,811 100.000000

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15.3 Capital breakdown

Date of last shareholders’ meeting/ last alteration April 11, 2015

Number of individual shareholders (units) 15,817

Number of corporate shareholders (units) 438

Number of institutional investors (units) 685

Outstanding shares

Outstanding shares correspond to all the shares not held by the controlling shareholder, parties related to the controlling shareholder, managers, as well as treasury stock.

Number of common shares (units) 171.991.677 39,883121%

Number of preferred shares (units) 0 0.000000%

Total 171.991.677 39,883121%

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15.4 Organizational chart of shareholders and economic group15.1. Insert an organizational chart of shareholders of the issuer and their economic group, indicating:

Indústria e Com. de Cosméticos Natura Ltda.

(CNPJ 00.190.373/ 0001-72)

Natura Inovação e Tecnologia de Produtos Ltda.

(CNPJ 60.883.329/ 0001-70)

Natura Cosméticos S.A. Chile

Natura Cosméticos S.A. Peru

Natura Cosméticos S.A.

Argentina

Natura Cosméticos y Vestimentas

S.A.Uruguai

Natura Cosmeticos y Servicios de Mexico,

S.A. de C.V.Natura Cosmeticos de Mexico, S.A. de C.V.

Natura Distribuidora de Mexico, S.A. de C.V.

Natura Cosméticos C.A.

Venezuela

Natura Cosméticos Ltda.

Colômbia

Natura Brasil, Inc. - EUA (Delaware)

Natura Cosméticos S.A.Brasil

(CNPJ 71.673.990/ 0001-77)BRASIL

99,99% 99,99%99,99% 99,99% 99,99% 100%99,99% 99,99% 99,99% 99,99%99,99%

100%Natura Innovation et

Technologie de Produits SAS

França

100%Natura Logística e

Serviços Ltda.

(CNPJ 56.680.176/ 0001-96)

99,99%

Lisis Participações S.A.

Utopia Participações S.A.

Passos Participações S.A. Tesouraria Circulação Controladores

PFAdministradores

Natura International Inc. EUA (NY)

100%

Natura Cosméticos España, S.L.

Espanha

100%

Natura (Brasil) International

B.V.Holanda

100%

3,6914% 22,2491% 21,2313% 0,0058% 0,2213% 40,0939% 12,4550%

Em fase de de encerramento

Natura Europa SAS França

100%

2016

Natura Biosphera Franqueadora Ltda.(CNPJ 15.537.2860001-16)

99,99%

Natura Brazil Pty. Ltd.

Natura Cosmetics Australia Pty.

Ltd.

100%

100%

78,74%

Emeis Holdings Pty Ltd.

Aesop Brasil Comércio de

Cosméticos Ltda.

99,9%

Natura Comercial Ltda.

(CNPJ 24.276.833/ 0001-48)

99,99%

Chart Translation

- Managers

- Treasury stock

- Free-float

- Individual controlling shareholders

- In dissolution

A more detailed description of the above chart follows:(a) Direct and indirect controlling shareholders

On December 31, 2015, 59.83% of the entire share capital was held by other companies (Lisis Participações S.A., Utopia Participações S.A. and Passos Participações S.A.) and by individuals (Antônio Luiz da Cunha Seabra, Guilherme Peirão Leal, Pedro Luiz Barreiros Passos, Guilherme Ruggiero Passos, Patrícia Ruggiero Passos, Norma Regina Pinotti, Vinicius Pinotti, Fabricius Pinotti, Maria Heli Dalla Colletta de Mattos, Gustavo Dalla Colletta de Mattos, Fábio Dalla Colletta de Mattos and the estate of Ronuel Macedo de Mattos).

(b) Subsidiaries and affiliated companies and (c) Interest held by the Company in other group companies

On December 31 of each year indicated, the Company was the direct or indirect parent company of the following companies:

Page 232 of 293

Interest - %

2015 2014 2013

Direct interest

Indústria e Comércio de Cosméticos Natura Ltda. 99.99 99.99 99.99

Natura Biosphera Comércio de Cosméticos e Serviços Ltda.

99.99 99.99 99.99

Natura Comercial Ltda. 99.99 - -

Natura Cosméticos S.A. – Chile 99.99 99.99 99.99

Natura Cosméticos S.A. – Peru 99.99 99.99 99.99

Natura Cosméticos S.A. – Argentina 99.99 99.99 99.99

Natura Inovação e Tecnologia de Produtos Ltda. 99.99 99.99 99.99

Natura Cosméticos y Servicios de Mexico, S.A. de C.V.

99.99 99.99 99.99

Natura Cosméticos de México, S.A. de C.V. 99.99 99.99 99.99

Natura Distribuidora de México, S.A. de C.V. 99.99 99.99 99.99

Natura Cosméticos Ltda. – Colombia 99.99 99.99 99.99

Natura Cosméticos España S.L. – Spain 100.00 100.00 100.00

Natura (Brasil) International B.V. – Netherlands 100.00 100.00 100.00

Natura Brazil Pty Ltd – Australia 100.00 100.00 -

Indirect interest:

Via Indústria e Comércio de Cosméticos Natura Ltda.

Natura Logística e Serviços Ltda. 99.99 99.99 99.99

Via Natura Inovação e Tecnologia de Produtos Ltda.

Natura Innovation et Technologie de Produits SAS – France

100.00 100.00 100.00

Via Natura (Brasil) International B.V. – Netherlands

Natura Brasil Inc. - EUA – Delaware 100.00 100.00 100.00

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Natura Brasil SAS – France 100.00 100.00 100.00

Via Brasil Inc. – EUA – Delaware

Natura International Inc. - EUA - New York 100.00 100.00 100.00

Via Natura Brazil Pty Ltda. - Australia:

Natura Cosmetics Austrália Pty Ltd. - Australia 100.00 100.00 100.00

Via Natura Cosmetics Austrália Pty Ltd. – Australia

Emeis Holdings Pty Ltd - Australia 78.74 71.34 65.00

(d) Interest held by group companies in the Company

On December 31, 2015, no Natura group company held interest in the Company.

(e) Companies under common control

There is no material information regarding this section.

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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:On February 12, 2015, the Shareholders' Agreement was signed between Lisis Participações S.A. Utopia Participações S.A. Passos Participações S.A. Antonio Luiz da Cunha Seabra, Guilherme Peirão Leal, Pedro Luiz Barreiros Passos, Guilherme Ruggiero Passos, Patrícia Ruggiero Passos, Norma Regina Pinotti, Vinicius Pinotti, Fabricius Pinotti, Estate of Anizio Pinotti, Maria Heli Dalla Colletta de Mattos, Gustavo Dalla Colletta de Mattos, Fábio Dalla Colletta de Mattos and the Estate of Ronuel Macedo de Mattos, with the Company being the intervening consenting party. The Shareholders' Agreement is valid until February 12, 2025. In compliance with clause nine of the Shareholders' Agreement, the signatories, by themselves and their successors on any account, undertake to exercise the voting right attributed to the shares held by them such that the obligations assumed under the Shareholders’ Agreement are fully complied with. The signatories shall exercise their voting right and power of control in good faith and to ensure that the activities of the Company are based on the following basic principles and assumptions (clause two): (i) the management of the Company shall be exercised by ethical, experienced and independent professionals; (ii) the Company’s strategy will be based on the principle of sustainable growth and the exercise of the Company’s reason for being, in line with our economic, environmental and social commitments; (iii) our operations with related parties shall be conducted in accordance with market conditions; (iv) our management shall pursue high levels of profitability, efficiency and competitiveness, always complying with its commitment of being an agent of economic, environmental and social development; and (v) except if authorized, in writing, by all the Parties, the Company may not, directly or indirectly, hire as an employee, worker or service provider of the Company and/or its subsidiaries, the heirs and/or spouses of any of the Shareholders and Related Parties.In case of any breach of the Shareholders' Agreement, if the defaulting party(ies) fail(s) to remedy the breach within ninety (90) days, the right to vote in Preliminary Meetings conferred on the shares held by the Defaulting Party(ies) will be suspended and the parties not at default (“Non-Defaulting Parties") must convene a Preliminary Meeting to suspend the voting rights of the Defaulting Party (ies). Suspension of voting rights of one of the Parties will not lead to the suspension of voting rights of other Parties in the Shareholders’ Group. Once the breach is remedied, the Shares held by the Defaulting Party(ies) will once again have the right to vote at the Preliminary Meetings (clause 11, sole paragraph).Clause eight of the Shareholders' Agreement is about the Board of Directors. Signatories to the Shareholders’ Agreement must always elect the highest possible number of Directors, subject to the rules applicable to the Company and to its Bylaws. While Pedro Luiz Barreiros Passos, together with his spouse or with his heirs, directly or indirectly, holds shares in a percentage not lower than 3.33% and whenever the signatories to the Shareholders' Agreement manage to elect more than two (2) members to the Board of Directors of the Company, said shareholders undertake to exercise their right to vote at the Preliminary Meeting and the Shareholders Meeting in such a way as to ensure that the third (3rd) member is Pedro Luiz Barreiros Passos. The signatories undertake to vote for amending the Bylaws of the Company to stipulate that the Board of Directors will consist of at least nine (9) and a maximum of eleven (11) members, twenty percent (20%) of whom must be Independent Directors, elected for a term of up to two (2) years, with the possibility of reelection.For the purposes of the Shareholders' Agreement, the Parties are organized into five groups constituted by the Parties (“Shareholder Groups”). Each Shareholder Group will have a representative (“Group Representative”) and an alternate (“Alternate Representative”). Following are the duties of the Group Representative: (a) to represent the Shareholder Group in its relations with other Groups; (b) to represent the Shareholder Group in Preliminary Meetings, with powers to vote and consider and vote on all and any matters discussed in Preliminary Meetings; and (c) to represent the Shareholder Group and each member of the

Page 235 of 293

Group in the exercise of all rights and compliance with all obligations established in this Agreement.The Shareholders' Agreement will be immediately and automatically terminated in relation to all the members of a Shareholder Group if the shares linked to said Shareholder Group represent less than three point three three percentage (3.33%) of the Shares.The Shareholders' Agreement also provides that:

The Sale of Shares may only take place in strict observance of the Shareholders' Agreement and provided the acquirer or assignee subscribes to the agreement, without restrictions, by signing the statement of adherence, except if otherwise decided as per the procedure set forth in the Shareholders' Agreement.

Shareholders who wish to Sell their Shares, either all or a part of them (“Offering Parties”), undertake, in the first place, to prepare a written offer, in good faith, in a binding and irrevocable manner, including the price to be paid and the number of Shares offered and, after that, through Representative(s) of the Shareholders’ Group they belong to, to notify other Parties belonging to other Shareholders’ Groups, who shall be notified through the Representatives of their respective Shareholders’ Groups, in writing, of their intention to Sell Shares (“Offering Notice”) and granting such Parties ("Offered Parties"), preemptive rights to acquire the Shares. The exercise of the preemptive right by the Offered Parties must be informed in writing and solely through Representative(s) of the Group(s) to which such Offered Parties belong, within 60 (sixty) days from the receipt of notice from the Offering Party.

If any Legal Entity Shareholder that is the object of Sale of Interest has, for any reason, liabilities or contingencies, the Party(ies) who had exercised the preemptive right envisaged in this Clause can deduct from the acquisition price in the offer made by the Sale of Interest, the amount corresponding to said liabilities and any contingencies not related to the Shares or the Company, regardless of the probability of loss or materialization of said liabilities and contingencies. In the case of disagreement regarding the value of said liabilities and contingencies, the Party(ies) that exercised the preemptive rights envisaged in this Clause and the Legal Entity Shareholder must indicate a specialized audit firm to determine the value of said liabilities and contingencies, and that value shall be final and binding on the parties.

The Representative of a Shareholder Group can delink the Delinkable Shares of all the Parties who are members of his Shareholder Group, in the same proportion among them (considering the number of Shares held by each Party), for sale on the stock exchange, at any time and to any person, during each this Shareholders' Agreement is in effect, provided he informs, in writing, other Representatives of the Shareholder Group the plan to sell said Shares on the stock market and gives them the same period, not extendable, of ten (10) calendar days so that they pay the Market Price for all the Shares that the Parties wish to sell. The delinking of Delinkable Shares may exceptionally be made disproportionately among the Parties to a Shareholder Group if unanimously approved by the Parties of said Shareholder Group;

if the signatories to the Shareholders' Agreement decide to sell to any third parties, shares representing an amount greater than or equal to ten percent (10%) of the total Shares, other signatories will be entitled to jointly sell the Shares held by them, in proportion to the Shares held by the Offering Party being sold in the transaction; and

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Before each shareholders meeting of the Company, a Preliminary Meeting must be called and held, in which only Representatives of the Groups will participate, which will discuss each of the matters on the agenda of the shareholders meeting. The decisions approved at the Preliminary Meeting shall bind the vote of all the Parties in the respective shareholders meeting and the Parties must vote as a group at the shareholders meeting according to such decisions, including with the Free Shares held by them.

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15.6 Indicate material changes in ownership interest held by participants in the controlling group and by the Company’s directors and officers

Lisis Participações S.A.There were no material changes at Lisis Participações S.A. in the last three fiscal years and in the current fiscal year.As a result, this Shareholder Group now consists of the following parties:

Lisis Participações S.A. Antonio Luiz da Cunha Seabra

Utopia Participações S.A.There were no material changes at Utopia Participações S.A. in the last three fiscal years and in the current fiscal year.As a result, this Shareholder Group now consists of the following parties:

Utopia Participações S.A. Guilherme Peirão Leal

Passos Participações S.A.In view of the ownership restructuring and consequent reduction in the capital stock, the common shares of Natura held by it were transferred to its shareholders, members of the Passos family. Consequently, the shareholding interest formerly held by Passos Participações is now held by members of the Passos family.As a result, this Shareholder Group now consists of the following parties:

Passos Participações S.A. Pedro Luiz Barreiros Passos Guilherme Ruggiero Passos Patrícia Ruggiero Passos

RM Futura Participações S.A.The common shares of Natura owned by RM Futura Participações S.A were transferred to its shareholders, members of the Mattos family. As a result, the shareholding interest formerly held by RM Futura Participações is now held by members of the Mattos family.As a result, this Shareholder Group now consists of the following parties:

Maria Heli Dalla Colletta de Mattos Gustavo Dalla Colletta de Mattos Fábio Dalla Colletta de Mattos Estate of Ronuel Macedo de Mattos

ANP Participações S.A.In December 2014, the common shares of Natura owned by ANP Participações S.A were transferred to its shareholders, members of the Pinotti family. Consequently, the shareholding interest formerly held by ANP Participações is now held by members of the Pinotti family.

In January 2016, the common shares pertaining to the estate of Anizio Pinotti issued by Natura were transferred to his widow and heirs due to judicial ratification of the will of Anizio Pinotti.As a result, this Shareholder Group now consists of the following parties:

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Norma Regina Pinotti Vinicius Pinotti Fabricius Pinotti

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15.7. Describe the main corporate transactions within the group that had a material effect on the issuer, such as mergers, consolidations, spin-offs, share mergers, transfers of control, acquisitions and divestments of material assets, indicating, when they involve the issuer or any of its subsidiaries or affiliated companies:There were no significant corporate transactions in the fiscal year.

Page 240 of 293


There is no other material information related to this Section.

Page 241 of 293

16.Transactions with related parties16.1 Describe the rules, policies and practices adopted by the issuer for related-party transactions, as determined by the accounting policies addressing this topicOn November 7, 2014, the Board of Directors approved the Related-Party Transaction Policy, which aims to ensure that transactions of Natura Cosméticos S.A. and its subsidiaries involving related parties are carried out transparently and under conditions not less favorable to the Company than they would be if carried out with third parties that are not related parties, under the same circumstances or similar scenarios. This policy can be accessed in our Investor Relations website at: http://natu.infoinvest.com.br/ptb/s-31-ptb.html?idioma=ptb.

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16.2 Information on transactions with related parties

Related party Transaction date Amount involved (R$) Existing balance Amount (R$) Duration

Loan or other debt

Interest rate charged

Bres Itupeva Empreendimentos Imobiliários 6/5/2012 716,298.00

15 years extendable for an equal period

NO

0.000000

Relationship with the issuer Antonio Luiz da Cunha Seabra, Guilherme Peirão Leal and Pedro Luiz Barreiros Passos, members of the controlling group of the Company, indirectly hold control of Bres Itupeva

Object of Agreement Construction and leasing of a distribution center (Hub) in Itupeva, São Paulo - Lessee: Natura Cosméticos S.A. - Lessor: Bres Itupeva Empreendimentos Imobiliários Ltda.

Warranty and insurance The Lessee will take out construction insurance while starting construction.

Rescission or extinction

Rescission in case of: (a) failure to obtain licenses by the Service Provider within 90 days; (b) delay by the Service Provider at any stage for a period of more than 240 days; (c) embargo or suspension of works for a period of 240 days due to fault of Lessor or builder; (d) delay in delivery of construction for a period of over 240 days.In case of Termination without cause by the Lessee, the same will pay the Lessor a fine calculated based on the number of months remaining for the termination of the contract and the amount of monthly installments

Nature and reason for the transactionContractual position of issuer Debtor

Specify

Natura Cosméticos S.A. and Raia Drogasil S/A 9/1/2015 0.00 Not applicable

Not estimated, since it will depend on sales

from 9/1/2015 to12/31/2016

YES

0.000000

Relationship with the issuer RAIA DROGASIL S/A is a related party of NATURA COSMÉTICOS, since Natura's founding controlling shareholders are shareholders in Raia Drogasil through the company FIMM Atena.

Object of Agreement Sale by NATURA COSMÉTICOS S.A. to DROGARAIA BRASIL S.A. of products from the SOU line for sale to end consumers.Warranty and insurance Not applicableRescission or extinction a) Rescission: at any time by either party upon written notice to the other party 30 days in advance.

b) Termination: if by NATURA COSMÉTICOS S.A., the costs of returned goods may be discounted from Accounts Payable

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Loan or other debt


and, if there are none, NATURA COSMÉTICOS S.A. will make a deposit to DROGARAIA BRASIL S.A. within five (5) business days from the removal of the goods and upon the issue of the Return Invoice.

Nature and reason for the transaction Shift in Natura’s business model, with the sale of goods through retailers.

Contractual position of issuer Creditor

SpecifyDédalus Administração e Participações Ltda. 9/24/2014 1,338,591.00 3 years NO 0.000000

Relationship with the issuer The company belongs to Guilherme Peirão Leal and Antonio Luiz Seabra, both members of the controlling group of Natura Cosméticos S.A.

Object of Agreement Contract for the assignment of aircraft for use - Client: Natura Cosméticos S.A. - Service Provider: Dédalus Administração e Participações Ltda

Warranty and insurance N/A

Rescission or extinction The contract can be rescinded anytime, without any justification, or in case of bankruptcy, dissolution or liquidation of the other party or in case of force majeure.

Nature and reason for the transactionContractual position of issuer Debtor

SpecifyHomagus Administração e Participações Ltda. 9/24/2014 1,338,591.00 3 years NO 0.000000

Relationship with the issuer The company belongs to Guilherme Peirão Leal and Antonio Luiz Seabra, both members of the controlling group of Natura Cosméticos S.A.

Object of Agreement Contract for the assignment of aircraft for use - Client: Natura Cosméticos S.A. - Service Provider: Homagus Administração e Participações Ltda.

Warranty and insurance N/A

Rescission or extinction The contract can be rescinded anytime, without any justification, or in case of bankruptcy, dissolution or liquidation of the other party or in case of force majeure.

Nature and reason for the transaction

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Loan or other debt


Contractual position of issuer Debtor

Specify

Page 245 of 293

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

16.3 Regarding each transaction or group of transactions referred to in item 16.2 above occurring in the past fiscal year: (a) identify the measures taken to deal with conflicts of interest; and (b) declare the strictly arm’s length nature of the conditions agreed upon or the adequate compensatory payment

We adopt corporate governance practices as well as those recommended and/or required under the applicable laws. All decisions regarding the Company’s operations are submitted to our Management, as per the responsibilities established in our Bylaws. Thus, our operations, particularly those between related parties, are submitted to the Company’s decision-making bodies in accordance with the applicable rules. In case of possible conflict of interest between matters under analysis and any member of our management bodies, we comply with the Brazilian Corporation Law, and said member must abstain from voting, with the remaining members who are not related to the matter being responsible for deciding on the ter.

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There is no other material information related to this Section.

Page 247 of 293

17.Capital Stock

17.1 Information on capital stock

Date of authorizationor approval Capital in Brazilian real Term for payment

Number of common shares(units)

Number of preferred shares(units)

Total shares(units)

Type of capital Issued capital8/31/2011 427,072,707.32 431,239,264 0 431,239,264

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17.2 Capital increasesDate of resolution

Body approving the increase

Issue date Total issue amount (R$)

Type of increase

Common shares (units)

Preferred shares (units)

Total shares (units)

Previous subscription/ capital

Issue price

Unit

4/2/2007 Annual and Extraordinary General Meeting

4/2/2007 3,100,069.56 Private subscription

1,000,405 0 1,000,405 1.32560000 3.10 R$ per unit

Criteria to determine issue price

Issue price = Total issue amount divided by number of common shares

Payment method Cash



735,591 0 735,591 0.72100000 3.83 R$ per unit



Payment method Cash


3/23/2009 804,546.96 Private subscription

155,698 0 155,698 0,20550000 5.17 R$ per unit



Payment method Cash

8/5/2009 Extraordinary Shareholders’ Meeting


943,950 0 943,950 2.42890000 10.32 R$ per unit



Payment method Cash

4/28/2010 Board of Directors’ Meeting


181,212 0 181,212 0.69420000 15.53 R$ per unit

Criteria to determine issue Issue amount / Total number of shares

Page 249 of 293

Date of resolution



Type of increase





Issue price

Unit

price

Payment method Cash

Date of resolution



Type of increase





Issue price

Unit



101,439 0 101,439 0.65790000 26.57 R$ per unit


Total issue amount / Total number of shares

Payment method Cash



242,098 0 242,098 1.50630000 25.50 R$ per unit



Payment method Cash



82,106 0 82,106 0.50620000 25.65 R$ per unit



Payment method Cash



153,230 0 153,230 0.90823400 24.78 R$ per unit



Page 250 of 293

Date of resolution



Type of increase





Issue price

Unit

Payment method Cash



200,059 0 200,059 1.20256300 25.51 R$ per unit



Payment method Cash

Date of resolution



Type of increase





Issue price

Unit


8/31/2011 110,183.30 Private subscription

4,559 0 4,559 0.02580630 24.17 R$ per unit



Payment method Cash

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17.3 Information on share splits, reverse splits, bonus sharesThere was no reverse split in the last three fiscal years

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17.4 Information on capital reductionsThere was no capital reduction since the Company’s initial public offering in 2004.

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Merger of companiesAt the Annual and Extraordinary Shareholders' Meeting held on March 5, 2004, our shareholders approved the mergers of Natura Empreendimentos and Natura Participações into our Company. According to the Protocol and Justification of the Merger of Natura Empreendimentos, dated March 3, 2004, 23,005,500 preferred shares and 37,914,184 common shares held by Natura Empreendimentos in our capital stock were canceled in our capital stock account, and 13,748,955 common shares were canceled in the earnings reserve account balance, with 832,661 common shares remaining as treasury shares. As a result of said cancellation, 75,501,300 new shares were issued and our capital increased by R$1,415,145.07, to R$196,370,519.07, represented by 83,266,061 shares.

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18.Securities18.1 Describe the rights of each type and class of share issued:

Type of shares or DRs Common shares

Tag along rights 0.000000

Right to dividends Our Bylaws established the minimum percentage to be paid to shareholders as mandatory dividends at 30% of the adjusted annual net income. If the mandatory dividends exceed the realized profit portion of net income, the surplus amount may be allocated to set up the unrealized profit reserve.

Voting rights Full

Convertibility No

Capital reimbursement Yes

Description of reimbursement privileges

Right to Withdraw. Any shareholder in disagreement with certain resolutions taken at a shareholders’ meeting may withdraw from our Company, being entitled to reimbursement of the equity value of his shares.

For more information, see “Right of Withdrawal and Redemption” in item 10.10 below.

Transfer restrictions No

Condition for change to rights on such securities

Preemptive Rights. Our Bylaws sets forth that the Board of Directors may remove or reduce the preemptive right granted to shareholders on the issues of shares, debentures convertible into shares or subscription warrants, within the authorized capital, the placement of which is carried out upon the sale on stock exchange or by public subscription in a tender offer for acquisition of control, under the terms set forth by the Brazilian Corporation Law. Furthermore, our Bylaws establish that our shareholders have no preemptive rights in the granting of stock option or share subscription to our administrators and employees as well as to the administrators and employees of other companies that are direct or indirect subsidiaries of our company.

Other material features In the event of liquidation of our Company, shareholders are entitled to capital refund proportionally to the shares they hold, after compliance with all of our obligations. Shareholders have preemptive rights in the subscription of new common shares issued by the Company, except in the specific cases described under the “Preemptive Rights” item. No resolution may deprive our shareholders of the following rights: profit sharing; receiving its portion of any remaining assets in the event of our liquidation; inspecting our management; preemptive rights in the subscription of shares, debentures or warrants, except in certain circumstances; and withdrawing from the company in the cases provided for by law.

While the Company is listed on the Novo Mercado, it cannot issue preferred shares or founder shares and, to delist from the Novo Mercado (see item 18.10 for more details), the Company has to conduct a public tender offer.

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18.2 Bylaws provisions restricting the voting rights of relevant shareholders or that require the issuer to carry out a public tender offer

Shareholding Dilution Protection MechanismOur Bylaws have a provision that aims to avoid the concentration of our shares in the hands of a small group of investors, so as to promote a more diluted shareholder base. The provision requires that any shareholder acquiring or becoming the holder of shares issued by our Company in a number equal to or higher than 25% of the Company's total capital stock (“Relevant Shareholder”), shall, within no more than 60 days as of the date of acquisition or of the event that resulted in the ownership of shares or rights in a number equal to or higher than 25% of all the shares issued by the Company, carry out or request the registration of a public tender offer for the acquisition of all Company-issued shares (“PTO”), pursuant to the applicable provisions of the of the Brazilian Securities and Exchange Commission ("CVM”) regulations, BM&FBOVESPA's regulations, and the terms of Article 34 of our Bylaws.The PTO (Public Tender Offer of Shares) shall be indistinctly addressed to all our shareholders and be conducted at an auction to be held at BM&FBOVESPA and paid in cash in local currency. The PTO acquisition price of each share issued by the Company shall not be lower than the result obtained by applying the following formula:

PTO Price = Share Value

Where: PTO Price corresponds to the price of acquisition of each share issued by the Company in the PTO.Share Value corresponds to the greater value between: (i) the highest unit price of the shares issued by the Company during the 12-month period prior to the PTO on any stock exchange in which the mentioned shares are traded; (ii) the highest unit price paid by the Relevant Shareholder, at any time, for a share or tranche of shares issued by the Company; and (iii) the amount equivalent to 12 times the Consolidated Average EBITDA of the Company (arithmetic mean of the Consolidated EBITDAs relating to the two most recent full fiscal years), reduced by the net consolidated debt of the Company, divided by the total number of shares that it has issued.

The holding of the PTO shall not prevent another shareholder or, as the case may be, the Company itself, from formulating a competing PTO, in accordance with applicable regulations.It is possible not to carry out the PTO upon the affirmative vote of shareholders representing the majority of capital stock at an extraordinary shareholders’ meeting of the Company especially convened to resolve on this matter. The Relevant Shareholder shall be required to comply with any requests or demands made by CVM regarding the PTO, within the deadline set forth by the applicable regulations. If the Relevant Shareholder fails to comply with the obligations set forth by our Bylaws, including in regard to the fulfillment of the deadlines (i) to conduct or request registration of the PTO; or (ii) to comply with any requests or demands by CVM, our Board of Directors shall call an Extraordinary Shareholders’ Meeting, where the Relevant Shareholder may not vote, to resolve on the suspension of the exercise of the rights of the Relevant Shareholder that did not comply with any obligation related to the PTO, in accordance with Article 120 of the Brazilian Corporation Law.The need to carry out an PTO is not applicable if a person becomes holder of shares issued by the Company in a number higher than 25% of the total of shares due to the (i) merger of

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another company into the Company; (ii) merger of the shares of another company into the Company; or (iii) subscription of the Company's shares, carried out through a single primary issue, which was approved at an Shareholders’ Meeting and whose proposal for capital increase determined that the share issue price be based on an economic value obtained from an economic-financial valuation report of the Company made by a specialized company with proven experience in appraisals of publicly-held companies.

Sale of Shareholding ControlAccording to the regulations of the Novo Mercado segment, the disposal of the Company’s shareholding control, either through a single operation or a series of successive operations, should occur under condition precedent or subsequent, in which the acquirer of the control must make a public tender offer for acquisition of the remaining shares of the other shareholders under the same terms and conditions granted to the selling controlling shareholder.A PTO shall also be required:

In the event of an onerous assignment of rights for subscription of shares and other securities or rights related to convertible securities which may result in the sale of the Company’s shareholding control;When a company is the controlling shareholder and the control of said company is transferred;When that already holding Company’s shares acquires the power of control by means of a private agreement for the purchase of shares. In this case, the Acquiring Shareholder shall be required to conduct a PTO under the same terms and conditions offered to the selling shareholder and reimburse the shareholders who had purchased shares on stock exchanges in the six months prior to the date of selling the control. The reimbursement amount corresponds to the difference between the price paid to the selling controlling shareholder and the amount paid on the stock exchange for shares in that period duly restated.

The acquirer, when necessary, shall take the proper measures to rebuild, within the subsequent six months, the minimum percentage of 25% of outstanding shares in the market.The controlling shareholders shall not transfer the shares held by them nor can the Company register any transfer of these shares until the acquirer signs the Term of Consent of the Controlling Shareholders mentioned in the Novo Mercado Listing Rules.

Public Tender Offer of SharesIn the event that more than one of the situations described in item “Sale of Shareholding Control” above takes place concurrently, which entail an PTO, the conduction of a single PTO comprising more than one purpose is permitted, provided that it is possible to satisfy the procedures of all modalities of PTOs, that there is no loss to the recipients of the offering and that an authorization is obtained from CVM when required by the applicable laws. Suspension of the Relevant Shareholder’s rights due to non-compliance with the BylawsShould there be a violation of the rules set forth in the Company’s Bylaws, the Relevant Shareholder that fails to conduct an PTO set forth in the event of sale of the shareholding control (see item 18.2 above) and acquisition of shares representing 25% or more of the Company’s capital stock shall have the exercise of his shareholder rights suspended at a Shareholder’s Meeting, the call of which becomes mandatory in such a case. The Relevant Shareholder may not vote at the Meeting resolving on the suspension of the exercise of his rights.

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18.3 Bylaws provisions establishing exceptions or events of suspension of policy (voting) or economic rights envisaged by the BylawsNot applicable.

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18.4 Trading volume, highest and lowest prices of shares traded

Fiscal year 12/31/2015

Quarter Security Type Class Market Market operator Financial volume traded (in R$)

Highest closingprice (in R$)

Lowest closing price (in R$) Unit

3/31/2015 Shares Common Stock exchange

BM&FBOVESPA S.A. – Securities, Commodities and Futures Exchange 32,518,141 31.78 23.58 R$ per unit































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18.5 Description of other securities issued in Brazil Security Debentures

Identification of security

Limited Offer and CVM Instruction no. 476/09

Issue date 2/25/2014

Maturity date 2/25/2017

Amount (units) 20,000

Total amount (R$) 200,000,000.00

Outstanding balance

0.00

Transfer restriction Yes

Description of restriction

Debentures can only be traded among Qualified Investors defined as such under Article 4 of CVM Instruction 476 and Article 109 of CVM Instruction 409, of August 18, 2004, as amended (“Qualified Investors”), after ninety (90) days from the date of their subscription and payment or acquisition by the Qualified Investor, pursuant to the provisions of Article 13 of CVM Instruction 476 and the compliance, by the Issuer, of the provisions of Article 17 of CVM Instruction 476.

Convertibility No

Redemption allowed

No

Characteristics of the securities

On February 25, 2014, the Company carried out the 5th issue of simple, non-convertible, registered and book-entry, unsecured debentures of Natura Cosméticos S.A., in the total amount of R$ 600 million. On March 24, 2014, the Company filed the notice of closing with the CVM. Sixty thousand (60,000) debentures were issued, of which twenty thousand (20,000) were allocated to the 1st series, with a 3-year term as from the issue date, that is, February 25, 2017, 20,000 allocated to the 2nd series, with a 4-year term as from the issue date, that is, February 25, 2018, and twenty thousand (20,000) allocated to the 3 rd series, with a 5-year term as from the issue date, that is, February 25, 2019, and remuneration corresponding respectively to 107%, 107.5% and 108% of the accrued variation of the average overnight daily interbank deposit (DI) rates of one (1) day (extra group), expressed in the percentage rate per year, based on two hundred and fifty-two (252) business days, calculated and published by CETIP in the daily bulletin available on its website (http://www.cetip.com.br) (“DI Rate”). The proceeds of the offer were allocated to refinancing the Company’s debts.

Conditions for changing the rights assured by such securities

N/A

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Security Debentures






Total amount (R$) 250,000,000.00

Outstanding balance

0.00




Convertibility No

Redemption allowed

No


On March 16, 2015, the Company carried out the 6th issue of simple, non-convertible, registered and book-entry, unsecured debentures of Natura Cosméticos S.A., in the total amount of R$ 800 million. Eighty thousand (80,000) debentures were issued, of which forty thousand (40,000) were allocated to the 1st series, with a 3-year term as from the issue date, that is, March 16, 2018, twenty-five thousand (25,000) allocated to the 2nd series, with a 5-year term as from the issue date, that is, March 16, 2019, and fifteen thousand (15,000) allocated to the 3rd series, with a 5-year term as from the issue date, that is, March 16, 2020, and remuneration corresponding respectively to 107%, 108.25% and 109% of the accrued variation of the average overnight daily interbank deposit (DI) rates of one (1) day (extra group), expressed in the percentage rate per year, based on two hundred and fifty-two (252) business days, calculated and published by CETIP in the daily bulletin available on its website (http://www.cetip.com.br) (“DI Rate”). The proceeds of the offer were allocated to refinancing the Company’s debts.


N/A

Other material characteristics

N/A

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Security Debentures






Total amount (R$) 150,000,000.00

Outstanding balance

0.00




Convertibility No

Redemption allowed

No




N/A


N/A

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Security Debentures






Total amount (R$) 400,000,000.00

Outstanding balance

0.00




Convertibility No

Redemption allowed

No




N/A


N/A

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Security Debentures






Total amount (R$) 200,000,000.00

Outstanding balance

0.00



Debentures can only be traded among Qualified Investors defined as such under Article 4 of CVM Instruction 476 and of Article 109 of CVM Instruction 409, of August 18, 2004, as amended (“Qualified Investors”), after ninety (90) days from the date of their subscription and payment or acquisition by the Qualified Investor, pursuant to the provisions of Article 13 of CVM Instruction 476 and the compliance, by the Issuer, of the provisions of Article 17 of CVM Instruction 476.

Convertibility No

Redemption allowed

No


On February 25, 2014, the Company carried out the 5th issue of simple, non-convertible, registered and book-entry, unsecured debentures of Natura Cosméticos S.A., in the total amount of R$ 600 million. On March 24, 2014, the Company filed the notice of closing with the CVM. Sixty thousand (60,000) debentures were issued, of which 20,000 were allocated to the 1st series, with a 3-year term as from the issue date, that is, February 25, 2017, twenty thousand (20,000) allocated to the 2nd series, with a 4-year term as from the issue date, that is, February 25, 2018, and twenty thousand (20,000) allocated to the 3rd series, with a 5-year term as from the issue date, that is, February 25, 2019, and remuneration corresponding respectively to 107%, 107.5% and 108% of the accrued variation of the average overnight daily interbank deposit (DI) rates of one (1) day (extra group), expressed in the percentage rate per year, based on two hundred and fifty-two (252) business days, calculated and published by CETIP in the daily bulletin available on its website (http://www.cetip.com.br) (“DI Rate”). The proceeds of the offer were allocated to refinancing the Company’s debts.


N/A

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Security Debentures






Total amount (R$) 200,000,000.00

Outstanding balance

0.00



Debentures can only be traded among Qualified Investors defined as such under Article 4 of CVM Instruction 476 and of Article 109 of CVM Instruction 409, of August 18, 2004, as amended (“Qualified Investors”), after ninety (90) days from the date of their subscription and payment or acquisition by the Qualified Investor, pursuant to the provisions of Article 13 of CVM Instruction 476 and the compliance, by the Issuer, of the provisions of Article 17 of CVM Instruction 476.

Convertibility No

Redemption allowed

No


On February 25, 2014, the Company carried out the 5th issue of simple, non-convertible, registered and book-entry, unsecured debentures of Natura Cosméticos S.A., in the total amount of R$600 million. On March 24, 2014, the Company filed the notice of closing with the CVM. Sixty thousand (60,000) debentures were issued, of which twenty thousand (20,000) were allocated to the 1st series, with a 3-year term as from the issue date, that is, February 25, 2017, twenty thousand (20,000) allocated to the 2nd series, with a 4-year term as from the issue date, that is, February 25, 2018, and twenty thousand (20,000) allocated to the 3rd series, with a 5-year term as from the issue date, that is, February 25, 2019, and remuneration corresponding respectively to 107%, 107.5% and 108% of the accrued variation of the average overnight daily interbank deposit (DI) rates of one (1) day (extra group), expressed in the percentage rate per year, based on two hundred and fifty-two (252) business days, calculated and published by CETIP in the daily bulletin available on its website (http://www.cetip.com.br) (“DI Rate”). The proceeds of the offer were allocated to refinancing the Company’s debts.


N/A

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18.6 Domestic markets in which the securities of the Company have been listed for tradingThe common shares issued by the Company are listed in the Novo Mercado segment of BM&FBOVESPA S.A., where they are traded under the ticker symbol NATU3.

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18.7 Class and type of securities admitted for trading in the international marketsOn the base date of this Reference Form, the Company did not have any security admitted for trading in international markets.

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18.8 Describe securities issued abroad, when material, indicating, if applicable:There were no issues of securities abroad as of the date of this Reference Form.

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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 CompanyAs of the date of this Reference Form, we had not carried out any public tender offer to acquire shares issued by third parties.

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18.10 If the issuer conducted public tender offers, indicate:

a. how the proceeds from the tender offer were used:The proceeds were used to strengthen the working capital of the Company and the transaction contributed to the objective of improving the Company’s debt profile.

b. if there were material deviations between the actual use of proceeds and the proposed use of proceeds disclosed in the prospectuses of the respective tender offer:

There were no material deviations.

c. in the case of deviations, indicate the reasons:N/A

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18.11 Describe public tender offers made by the issuer involving shares issued by third partiesAs of the date of this Reference Form, we had not carried out any public tender offer to acquire shares issued by third parties

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18.12. Provide other information deemed material by the issuerThere is no other material information to be reported in this section.

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19.Share Buyback / Treasury Shares

19.1 Information on share buyback programs of the issuerThe Company has no ongoing share buyback plan.

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19.2 Transactions involving securities held in treasury

Fiscal year – December 31, 2015Shares

Type of shareClass of preferred shares Description of securities

Common

Transaction Number of shares (units)

Total amount (R$)

Average weighted price (R$)

Opening balance 954,584 37,851,000.00 39.65Purchased 0 0.00 0.00Sold 0 0.00 0.00Canceled 0 0.00 0.00Closing balance 954,584 37,851,000.00 39.65



Common


Total amount (R$)


Opening balance 2,120,459 83,984,000.00 39.61Purchased 0 0.00 0.00Sold 1,165,875 46,133,000.00 39.57Canceled 0 0.00 0.00Closing balance 954,584 37,851,000.00 39.65



Common


Total amount (R$)


Opening balance 1,941,345 66,104,952.41 34.05Purchased 1,375,500 60,172,131.90 43.75Sold 1,196,386 42,293,180.09 35.35Canceled 0 0.00 0.00Closing balance 2,120,459 83,983,904.22 39.61

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19.3 Provide other information deemed material by the issuerThere is no other material information related to this Section.

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20.Securities Trading Policy20.1 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:

Date of approval: 2/28/2007

Persons Bound by Policies: controlling shareholders, members of the Board of Directors, Board of Executive Officers, Audit Board and employees.Main characteristics:

The prohibition on trading of securities issued by the Company, its direct and indirect controlling shareholders, members of the Board of Directors, Executive Board, Audit Board or any other body with technical or advisory functions, created pursuant to the Bylaws, managers and employees, subsidiaries or companies under common control and their respective controlling shareholders, members of the management and of technical or advisory bodies, service providers and other professionals that have expressly adhered to the Disclosure and Trading Policies and are obliged to abide by the rules described in the Disclosure or Trading Policies (“Persons Bound by the Trading Policy”);

The prohibition on trading, provision of investment advisory services or assistance in securities issued by the Company by Persons Bound by the Trading Policy, who quit the positions in our management, during a period of six months after their exit or until the material information is made public;

The prohibition on trading, providing advisory or assistance to investments in securities issued by the Company by the Persons Bound by the Trading Policy during any ongoing acquisition or sale of the shares issued by the Company by the Company itself, its subsidiaries, affiliated companies or any other company under common control, whenever any agreement or contract has been signed for the transfer of shareholding control of the Company and if there exists any plan to carry out a merger, consolidation, transformation, total or partial spinoff or corporate restructuring of the Company. This restriction will apply only to our direct or indirect controlling shareholders, executive officers and directors of the Company during any ongoing acquisition or sale of the shares issued by the Company is carried out by the Company itself, its subsidiaries, affiliated companies or any other company under common control.

Blackout periods and description of inspection procedures:

The Persons Bound by the Trading Policy must refrain from trading on Securities issued by the Company (i) during fifteen days prior to the disclosure of quarterly information and annual information required by CVM; between the date of the competent body’s decision to increase the capital, distribute dividends and pay interest on equity and the publication of the respective notices and announcements.

places where the policy is made available for consultationhttp://natu.infoinvest.com.br/ptb/102/Politica_Negociacao.pdf

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http://natu.infoinvest.com.br/ptb/102/Politica_Negociacao.pdf


20.2 Provide other information deemed material by the issuerThere is no other material information related to this Section.

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21.Disclosure Policy21.1 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 timelyAs a publicly held company, we must comply with certain disclosure requirements in accordance with Brazilian Corporation Law and the rules issued by the CVM. Also, since our stock is listed in the Novo Mercado segment, we must also observe the disclosure requirements provided for in the Novo Mercado Regulation.

Disclosure of Eventual and Periodic InformationThe law applicable to securities markets provides that a publicly held company must provide CVM and BM&FBOVESPA certain periodic information, which includes the standardized financial statements, annual information, quarterly information and quarterly management and independent auditors’ reports. Said law requires the company to file with the CVM any shareholders’ agreements and call notices to shareholders’ meetings, as well as copies of the minutes of the respective meetings.In addition to the disclosure requirements under Brazilian Corporation Law and the CVM, we are also required by the Novo Mercado Regulation, to submit the financial statements after the end of each quarter (except the final) and each fiscal year, including the cash flow statement, which must contain, at least, the changes in the balance of cash and cash equivalents, segregated into cash flow from operating, financing and investment activities;In accordance with Law 11,638 of December 28, 2007 and CVM Instruction 457 of July 13, 2007, we were allowed until fiscal year 2009 to present our consolidated financial statements under IFRS, instead of under BR GAAP. As from fiscal year 2010, the presentation of financial statements under IFRS became mandatory.

Quarterly and annual informationFor companies listed in the Novo Mercado segment, the quarterly and annual information, in addition to the information required under applicable law, must also contain the following information:

consolidated balance sheet, consolidated income statement, and consolidated comments on the company’s performance, if applicable;

information on the ownership structure of any shareholder holding more than 5% of the capital stock of the Company, directly or indirectly, up to the individual level;

consolidated statement of the number and characteristics of securities issued by the Company held, directly or indirectly, by the controlling shareholders, managers and members of the audit board;

statement on the change of interest of controlling shareholders, members of the Board of Directors, Board of Executive Officers and Audit Board, if applicable, in relation to the respective securities, in the previous 12 months;

statement on the free float and its percentage in relation to the stock issued; information on the existence and binding to any arbitration clause.

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Public Meeting with AnalystsThe Novo Mercado Regulation determines that, at least once a year we must conduct a public meeting with analysis and any other interested parties, to disseminate information on our economic and financial condition, projects and outlook.

Annual CalendarThe Company must submit to BM&FBOVESPA and disclose an Annual Calendar including the dates of the Company’s main corporate events, as per the model made available by BM&FBOVESPA.

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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 consultationIn accordance with the law applicable to securities markets, we must inform CVM and BM&FBOVESPA of the occurrence of any material act or fact related to our business. An act or fact is deemed material when it can influence the price of the securities issued by the Company, investors’ decision to trade on the securities issued by the Company or investors’ decision to exercise any rights to which they are entitled as holders of securities issued by the Company.Under special circumstances, we may submit to the CVM a request for confidential treatment of a material act or fact.In relation to the procedures adopted to disclose a material act or fact and maintain the confidentiality about non-public material information, we clarify that the Company complies with internal rules and maintains a disclosure policy, approved on January 21, 2014, which strictly complies with the rules of the CVM and Federal Law 6,404 of December 15, 1976.Our disclosure policy establishes that the Investor Relations Officer shall be responsible for: a) disclosing and notifying the CVM and BM&FBOVESPA, immediately after taking cognizance of and analyzing, any Material Fact or Event that has occurred or is related to the Company; b) disclosing to the CVM and BM&FBOVESPA any Notice to the Market in situations deemed necessary; c) ensuring the broad and immediate dissemination of the Material Fact or Event simultaneously in all the markets in which the Securities issued by the Company are admitted for trading; and d) providing to the appropriate authorities, when duly requested, additional clarifications to the disclosure of the Material Fact or Event or Notice to the Market. The Company will have a Disclosure Committee, which will be responsible for advising and issuing recommendations to the Investor Relations Officer of the Company on the treatment to be given to any information submitted for its analysis and its need for disclosure to the public. The Disclosure Committee will be formed by four (4) members, namely, the Investor Relations Officer of the Company, who will preside over it, the Corporate Affairs Officer, the Legal Officer and the Investor Relations Manager.Persons Bound to the Policy are understood as: the Company itself, its direct and indirect Controlling Shareholders; Managers; the members of the Audit Board, if installed, of the advisory Committees to the Board of Directors and of any other bodies with technical or advisory functions created pursuant to the bylaws; any person hired directly or indirectly by the Company who, by virtue of their current or prior position or function at the Company, its Subsidiaries or Affiliated Companies has access to information that could potentially result in a Material Fact or Event; other persons who the Company deems appropriate to sign the Declaration of Agreement to the Policy. Bound Persons who take cognizance of acts or facts that may be deemed material acts or facts must immediately inform the Investor Relations Officer.Under the abovementioned Policy, Persons Bound must maintain confidential any material fact or event that has not yet been disclosed and to which they have access by virtue of the position they hold and must also ensure that their subordinates and third parties with whom they have a relationship of trust do the same, until said material acts or facts are made public.The Persons Bound who inadvertently or without authorization somehow communicate, personally or through third parties, material acts or facts to any non-bound person before they have been disclosed must immediately report said fact to the Investor Relations Officer for the appropriate measures to be taken.Any breaches of our policy verified by Persons Bound by this Policy must immediately be reported to the Company, represented by its Investor Relations Officer.

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21.3 Inform the managers responsible for implementing, maintaining, evaluating and overseeing the information disclosure policyOur manager responsible for implementing, maintaining and inspecting our disclosure policy is our Investor Relations Officer, José Roberto Lettiere.

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21.4 Other material informationThere is no other material information related to this Section.

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