Reference Form 2018 - ir.mills.com.brir.mills.com.br/enu/2802/Formulrio de Referncia 2018_i.pdf ·...

Reference Form 2018

MILLS ESTRUTURAS E SERVIÇOS DE ENGENHARIA S.A.

Publicly Held Company

CNPJ n.º 27.093.558/0001-15 – NIRE 33.3.0028974-7

Estrada do Guerenguê 1.381, Taquara, Jacarepaguá, CEP 22713-004

Rio de Janeiro - RJ

December 10, 2018

1.1 – Declaration of the Chief Executive Officer

Name of the responsible for the content of the form: SÉRGIO KARIYA

Title of the responsible: Chief Executive Officer

The officer qualified above declare that:

a. Reviewed the reference form.

b. All information contained in the form meets the requirements of CVM Instruction 480, especially arts. 14 to 19.

c. The information contained in the form is true, accurate and complete with respect to the issuer’s financial situation and the risks inherent in its activities and the securities issued by it.

1.2 – Declaration of the Administrative Financial and Investor Relations Officer

Name of the responsible for the content of the form:

Sergio Kariya


a. Reviewed the reference form.

b. All information contained in the form meets the requirements of CVM Instruction 480, especially arts. 14 to 19.

c. The information contained in the form is true, accurate and complete with respect to the issuer’s financial situation and the risks inherent in its activities and the securities issued by it.

1.3 Declaration of the Administrative Financial and Investor Relations Officer

Name of the responsible for the content of the form:

Sergio Kariya


d. Reviewed the reference form.

e. All information contained in the form meets the requirements of CVM Instruction 480, especially arts. 14 to 19.

f. The information contained in the form is true, accurate and complete with respect to the issuer’s financial situation and the risks inherent in its activities and the securities issued by it.

2.1/2.2 - Identification and compensation of Auditors

Auditor? YES

CVM Code 418-9

Auditor type National

Name/Social Reason KPMG Auditores Independentes

CPF/CNPJ 57.755.217/0003-90

Period of Service 01/01/2017 to 12/31/2017

Descripition of contracted service

In 2017, KPMG's independent audit service of the Company, for the fiscal year ended December 31, 2017, with the issuance of the respective opinion and limited review of the quarterly information for the quarters ended March 31, June 30 and September 30, 2016, with the issuance of the respective review.

Total amount of remuneration of auditors separated by offered services

In 2017, the Company recorded R$ 402.3 thousand in fees for services rendered by KPMG, related to the limited reviews of the quarterly information and the audit of the financial statements for the year ended December 31, 2017.

Replacement justification

Reason presented by the auditor in the event of a discrepancy between the statement of issuer

Not applicable.

Name of the technician responsable Period of service CPF

Address

Luis Claudio França de Araújo 01/01/2017 to 12/31/2017079.525.807-01 Avenida Almirante Barroso, 52, Centro, Rio de Janeiro, RJ, Brasil, CEP 20001-970, Telefone (21) 3515-

9400 Fax (21) 3515-9000, e-mail: [email protected]

Auditor? YES

CVM Code 418-9


Name/Social Reason KPMG Auditores Independentes

CPF/CNPJ 57.755.217/0003-90


Descripition of contracted service

In 2016, KPMG's independent audit service of the Company, for the fiscal year ended December 31, 2016, with the issuance of the respective opinion and limited review of the quarterly information for the quarters ended March 31, June 30 and September 30, 2016, with the issuance of the respective review.


In 2016, the Company recorded R$ 409.3 thousand in fees for services rendered by KPMG, related to the limited reviews of the quarterly information and the audit of the financial statements for the year ended December 31, 2016.

Replacement justification


Not applicable.

mailto:%203515-9400%20Fax%20(21)%203515-9000,%20e-mail:%[email protected]




Address

Luis Claudio França de Araújo 01/01/2016 to 12/31/2016079.525.807-01 Avenida Almirante Barroso, 52, Centro, Rio de Janeiro, RJ, Brasil, CEP 20001-970, Telefone (21) 3515-

9400 Fax (21) 3515-9000, e-mail: [email protected]

Auditor? YES

CVM Code 385-9


Name/Social Reason Deloitte Touche Tomahtsu

CPF/CNPJ 49.928.567/0001-11


Descripition of contracted service In the fiscal year ended 2015 the services provided by Deloitte of independent audit of the financial statements of Mills

Estruturas e Serviços de Engenharia S.A. (Company or Mills) for the fiscal year ended 2015, with issuance of the opinion,




and limited review of quarterly financial statements for the periods ended March 31, June 30 and September 30, 2015, with the issuance of the related reports; In the fiscal year ended 2014 the services provided by Deloitte of independent audit of the financial statements of Mills Estruturas e Serviços de Engenharia S.A. (Company or Mills) for the fiscal year ended 2014, with issuance of the opinion, and limited review of quarterly financial statements for the periods ended March 31, June 30 and September 30, 2014, with the issuance of the related reports; and services related to the release of previously agreed procedures (PAP) about the financial statements ended December 31st of 2013 of the investee Rohr S.A Estruturas Tubulares.


In the fiscal year of 2015, the Company registered R$ 366.4 thousand of fees paid to Deloitte, referring to limited reviews of financial statements and the Audit Report of that year. In the fiscal year ended in December 2014, the Company registered R$ 448.0 thousand of fees paid to Deloitte, referring to limited reviews of financial statements and the Audit Report of that year and ; R$ 30.2 thousand related to the release of previously agreed procedures (PAP) about the financial statements ended December 31st of 2013 of the investee Rohr S.A Estruturas Tubulares.

Replacement Justification Periodic rotation of auditors, in the form of CVM 308/99 Instruction.


Not applicable


Address

Fernando de Souza Leite 08/06/2014 to 03/09/2016004.400.929-14 Avenida Presidente Wilson, 231, Centro, Rio de Janeiro, RJ, Brasil, CEP 20030-021, Telefone (21)

39810500, Fax (21) 39810600, e-mail: [email protected]

mailto:[email protected]



2.3 Other relevant information

At a meeting of the Board of Directors held on March 28, 2016, approved the replacement of Deloitte Touche Tohmatsu, KPMG Independent Auditors, as from the first quarter of fiscal year 2016, as independent auditors Company, in compliance with the rotation provided for in CVM Instruction 308 of May 14, 1999, as amended.

3.1 - Financial Information - Consolidated

(Reais) Fiscal year (12/31/2017) Fiscal year (12/31/2016) Fiscal year (12/31/2015)

Equity 846,580,000.00 997,949,000.00 962,231,000.00

Total Assets 1,223,576,000.00 1,510,747,000.00 1,637,957,000.00

Net Revenue/Rev. Intermed. Fin./Prem. Seg. Gains

291,265,000.00 396,617,000.00 576,106,000.00

Gross Profit 1,307,000.00 82,994,000.00 232,327,000.00

Net Income -138,381,000.00 -99,408,000.00 -97,801,000.00

Number of shares, excluding treasury (Units)

173,308,020 173,308,020 125,779,503

Book value per share (Reais unit)

4.880000 5.760000 7.650000

Earnings per share -0.860000 -0.620000 -0.770000

3.2 – Non accounting measures

(i) Inform the value of non-accounting measures (ii) make the reconciliations between the amounts disclosed and the values of the audited

financial statements (iii) explain why you believe such measurement is more appropriate for a correct

understanding of your financial condition and the results of your operations

1) EBITDA

EBITDA is a non-accounting measurement adopted by the Company, reconciled with its financial statements,

in accordance with CVM Instruction no 527/2012 of October 4th, 2012, as applicable. The Company has

calculated its EBITDA as net earnings before financial results, the effect of depreciation of assets and equipment used for rental, and the amortization of intangible assets. EBITDA is not a measure recognized

under BR GAAP, IFRS or US GAAP. It is not significantly standardized and cannot be compared to measurements with similar names provided by other companies. The Company has reported EBITDA because

it is used to measure its performance. EBITDA should not be considered in isolation or as a substitute for

"net income" or "operating income" as indicators of operational performance or cash flow, or for the measurement of liquidity or Company´s debt repayment capacity.

Reconciliation of EBITDA with Net Profit:

Reasons for EBITDA utilization

EBITDA is used as a performance measurement by the Company’s Management, reason why it is important to be included in this Reference Form. The Company believes that the EBITDA is an efficient measurement to evaluate the performance of operations, as an indicator that is less impacted by interest rates fluctuation, changes in the rates and chances of incidence of the corporate income tax (IRPJ) and social contribution on net profits (CSLL) and depreciation levels.

2) Net Debt/Adjusted EBITDA

Net debt/EBITDA is a non-GAAP measure that reflects the total amount of debt, of any Nature, or gross debt, subtracted from the amount of cash and cash equivalents, divided by EBITDA. Even considering the indicator that best represents the Company's actual indebtedness, based on net debt, the Board of Executive Officers calculates certain indices that demonstrate the Company's financial situation.

In R$ million 2017 2016 2015

Net Profit (138.4) (99.4) (97.8)

Financial Result (13.6) (26.3) (63.1)

Income tax and social contribution 64.1 45.0 30.9

Profit (Loss) before Financial Result (189.0) (118.1) (65.6)

Depreciation (145.7) (159.0) (169.6)

CVM EBITDA (43.2) 40.9 104.1

Non-recurring items – Expenses related to the Industrial Services business unit

0.4 (3.1) (3.7)

Non-recurring items –Restructuring expenses (13.0) (10.1) (21.9)

Non-recurring items – Scrap sale result (19.6) (3.7) -

Non-recurring items - Impairment (6.0) - (57.1)

EBITDA ex. non-recurring items (5.0) 57.8 186.7

Net Revenue of sales of semi new equipment 6.4 12.1 12.7

EBITDA ex. Result of Sales of semi new equipment, Non-recurring items, Provision for the net value of sale

(11.4) 45.7 174.1

In R$ million 2017 2016 2015

Short and long term indebtedness (299.4) (450.1) (620.8)

(-) Cash, cash equivalents and related bank deposits 218.3 330.7 232.0

Net Debt (81.0) (119.4) (388.8)

Financial Revenue 31.8 55.5 36.8

Financial Expense (45.4) (81.7) (99.9)

Financial Result (13.6) (26.2) (63.1)

Adjusted EBITDA (5.0) 57.8 186.7

Net Debt/Adjusted EBITDA NA 2.1 2.1

Adjusted EBITDA/Financial Result NA 2.2 3.0

Reasons for the utilization The Net Debt/Adjusted EBITDA ratio is used by Management as a measure of indebtedness of the Company and there are clauses contained in bank credit agreements and other debt instruments of the Company that require compliance with this financial indicator, among others. The Company's Management believes that the Net Debt/EBITDA ratio is a practical indicator of the level of indebtedness. The index should not be considered in isolation or as a substitute for the total liability ratio on shareholders' equity as the Company's indebtedness index.

3) Adjusted Operating Cash Flow

As the Company's EBITDA is currently very far from operating cash generation, we present EBITDA reconciliation with the operating cash flow adjusted by net monetary and asset variations, investments in leased assets and interest paid. Considering that EBITDA is a good proxy of the Company's operating cash flow, we need to exclude certain provisions and write-off, which are relevant amounts. The bars indicated in gray indicate the variations between years.

64,0

(43,2) (0,6) 2,0 4,0

10,6 (2,5)

29,3 1,4 (40,5)

24,5

(42,8) 14,5

40,5 36,7

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Reasons for Adjusted Operating Cash Flow utilization

On March 22, 2017, the General Meeting of Debenture Holders of the 2nd and 3rd emission was approved to change the terms and conditions of the respective deeds, including (i) change in the formula for calculating financial indices (covenants), (ii) the concession of additional guarantees (iii) change in certain early maturity assumptions, and (iv) increase in the remuneration of debentures. The Company is in compliance with its pecuniary and non-pecuniary obligations related to the Debentures, but believes that the amendments approved on this date will give you additional comfort in relation to the fulfillment of these same obligations until the maturity of the Debentures. The change in the calculation formula of the covenants was from March 31, 2017 up to the maturity date: (a) the financial index resulting from the quotient of the division of the Net Debt by the OCF must be equal to or less than 3.0; and (b) the financial index resulting from the quotient of the OCF division by Net Financial Expenses shall be equal to or greater than 2.0. OCF means, based on the immediately preceding four (4) Consolidated Financial Statements, net cash provided by operating activities, excluding interest and monetary changes in net assets and liabilities, acquisitions of property, plant and equipment and interest paid.

3.3 Events subsequent to the latest financial statements The were no events subsequente to the latest financial statements related to the fiscal year 12/31/2017.

3.4 Policy for allocation of results

Fiscal year ended December, 31

2015 2016 2017

Rules on retention of profits In addition to the cases provided by the law, as provision introduced on February 8, 2010, the Company’s bylaws provide that up to 75% of the adjusted net income for the year could be allocated to the expansion reserve, as long as the recorded amount in such reservation does not exceed 80% of its capital.

In addition to the cases provided by the law, as provision introduced on February 8, 2010, the Company’s bylaws provide that up to 75% of the adjusted net income for the year could be allocated to the expansion reserve, as long as the recorded amount in such reservation does not exceed 80% of its capital.

In addition to the cases provided by the law, as provision introduced on February 8, 2010, the Company’s bylaws provide that up to 75% of the adjusted net income for the year could be allocated to the expansion reserve, as long as the recorded amount in such reservation does not exceed 80% of its capital.

Amounts of the retention of profits In General Meeting

Ordinary held in April 28, 2016, It was decided that in reason for being loss on the Fiscal year ended on December 31 of 2015, there were no deliberation on the profit allocation liquid to the extent that the Company does not presented a profit in this period.

In General Meeting Ordinary held in April 27, 2017, It was decided that in reason for being loss on the Fiscal year ended on December 31 of 2016, there were no deliberation on the profit allocation liquid to the extent that the Company does not presented a profit in this period.

In General Meeting Ordinary held in April 26, 2018, It was decided that in reason for being loss on the Fiscal year ended on December 31 of 2017, there were no deliberation on the profit allocation liquid to the extent that the Company does not presented a profit in this period.

Arrangements for distribution The Company's

shareholders are entitled to receive the mandatory minimum dividend of 25% of adjusted net income (after allocation to the legal reserve).

The Company's shareholders are entitled to receive the mandatory minimum dividend of 25% of adjusted net income (after allocation to the legal reserve).

The Company's shareholders are entitled to receive the mandatory minimum dividend of 25% of adjusted net income (after allocation to the legal reserve).

of dividends

Frequency of dividend distribution

The dividends are distributed according to the deliberation from the Company’s Ordinary General Meeting.

The Company can distribute Interest on Capital, through a Board of Directors resolution and attribute it to mandatory dividends as well.


The Company can distribute Interest on Capita, through a Board of Directors resolution and atribute it to mandatory dividends as well.


The Company can distribute Interest on Capital, through a Board of Directors resolution and attribute it to mandatory dividends as well.

Restrictions to dividend

distribution

No restrictions. No restrictions. No restrictions.

3.5 - Summary of distributions of dividends and retained earnings occurred

(Reais) Fiscal year 12/31/2017 Fiscal year 12/31/2016 Fiscal year 12/31/2015

Adjusted Net Income -138,381,000.00 -99,408,000.00 -97,801,000.00

Distributed dividend in relation to the adjusted net income

0.000000 0.000000 0.000000

Return rate in relation to the net equity of the issuer

0.000000 0.000000 0.000000

Total distributed dividend 0.00 0.00 0.00

Retained Net Income 0.00 0.00 0.00

Date of approval of the retention 04/26/2018 04/27/2017 04/28/2016

Retained Net Income Amount Dividend Payment

Amount Dividend Payment

Amount Dividend Payment

Interests on own capital

Common

Mandatory Dividend

Common

3.6 Dividends declared on account of retained earnings or reserves The dividends presented in the chart of item 3.5 were declared in the net income of the last three fiscal years. 3.7 Indebtedness

- Indebtedness (Total liabilities/net equity): 0.445316 Total of current and non-current liabilities: R$ 376,996,000 - Other index Net debt/Adjusted Operating Cash flow: is a non-accounting measure that reflects the total amount of debt, of any nature, or gross debt, subtracted from the amount of cash and cash equivalents, divided by the adjusted Operating Cash Flow. Gross debt R$299.4 million (-)Cash, cash equivalents, titles and transferable securities and related bank deposits: R$218.3 million Net Debt R$81.0 million (÷) Adjusted Operating Cash Flow R$36.7 million Adjusted operating cash flow disregards interest paid on debentures and Finame, leasing investment and net asset and liability monetary changes. Net debt on Adjusted Operating Cash Flow: 2.2x Reasons for using the index Net debt on Adjusted Operating Cash Flow: The ratio of Net Debt/Adjusted Operating Cash Flow is used by Management as a measure of indebtedness of the Company and there are clauses contained in bank credit agreements and other debt instruments of the Company that impose compliance with this financial indicator, among others. The Company's Management believes that the Net Debt/Adjusted Operating Cash Flow Index is a practical indicator of the level of indebtedness. The index should not be considered in isolation.

3.8 - Obligations

Type of obligation Type of

guarantee Less than one year

Between one and

three years

Between three and

Five years Over 5 years Total

Loan Collateral 3,182,000.00 5,085,000.00 603,000.00 0.00 8,870,000.00

Financing Unsecured 40,163,000.00 26,062,000.00 2,690,000.00 8,706,000.00 77,621,000.00

Debt Securities Unsecured 122,094,000.00

168,411,000.00 0.00 0.00 290,505,000.00

Total 165,439,000.00 199,558,000.00 3,293,000.00 8,706,000.00 376,996,000.00

3.9 Other information that the Company deems relevant

As discussed in the Minutes of the General Meeting of Debenture Holders of March 22, 2017, due to the renegotiation of the terms of the deeds of the debentures, relating to the covenants, a real guarantee of fiduciary assignment was constituted through the opening of restricted accounts held by the Company in favor of the debenture holders, in an amount equivalent to 50% of the debit balance.

4.1 Risk Factors

a. To the Company. The Company's activities consist of providing solutions and meeting the demands of various sectors of the economy, especially the civil and industrial construction segments. Consequently, their operations are subject to risks similar to those faced by companies operating in these and other sectors. Mills Estruturas e Serviços de Engenharia S.A. ("Mills" or "Company") operates in two major business areas: Construction and Rental. The Construction business unit offers customized solutions to companies involved in major works and infrastructure projects. Finally, the products of the Rental business unit are required by companies operating in the most diverse segments of the economy, industry, construction, logistics and retail, among others. Consequently, the operations and results of all our activities are tied to the performance and development of such economic sectors, which makes the Company vulnerable to the risks faced by the companies operating in these segments.

Events that may negatively affect these industries in such sectors, includes macroeconomic factors, adverse climate conditions, deterioration of the Brazilian social conditions, decreases in investment, changes to laws and regulations that adversely affect these industries, credit restrictions, supplier problem, reductions in client purchasing power, and difficulties in the management of the client’s business, among others, are beyond the management’s control and may cause an adverse material effect on the Company’s operations and results. The Company´s equipments are needed on projects with construction methods that require onsite concrete. In case there is significant modification in construction firms to other construction methods, as, for instance, steel or pre-molded structures, the demand for Company´s equipment and services can be reduced. The Company may not be able to fully implement its business strategy

The Company's growth depends on several factors, many of them outside the control of the Company. In particular, the strategy for the growth of all business units depends mainly on the performance of the civil and industrial construction sectors in Brazil in the coming years, which depend on public and private investments to improve the Brazilian infrastructure in several areas, such as energy, sanitation and transportation, and the set of projects of concessions of the government to the private initiative, among others. In the event that such investments are not realized, are delayed or generate a demand for products and services at a level lower than that estimated by the Company, the Company may not be able to satisfactorily implement its expansion strategy. Additionally, the Company’s future performance will depend on its ability to manage the growth of its operations. The Company cannot warrantee that it will be able to manage its growth successfully, or that this growth will not have an adverse effect on its existing business. If the Company is unable to manage its growth, it may lose its leading market position, which could have a material adverse effect on its financial condition, results of operations and the negotiation price of its shares. The organic growth strategy of Rental business unit includes, yet, activities for geographic expansion, counting with opening of new branches. The Company may not be able to successfully establish business in different cities and regions of Brazil due to several factors, as, for instance, skilled labor shortage, lack of reliable suppliers in the local, local competitors, expensive and hard to find terrains, licensing term, and difficulties to brand acceptance. Even though geographic expansion comes to happen, the Company is subject to new local economy risks.

With operations growth current facilities may become insufficient to store our equipment and provide space to maintenance and handling of the equipment in an efficient way, which can result in an increase of our operational costs or a need of moving to new facilities. In case of moving, Company may suffer increase in rental costs, incur termination fines and may necessitate a supplementary improvement investment on the new branches. Adverse conditions in the financial and credit markets, or the Company’s failure to secure financing on adequate terms, may adversely affect its ability to run its business or to implement its strategy. The implementation of the Company’s expansion strategy, as well as the maintenance of its operational capacity, could demand additional investments and require additional capital, which may not result in an equivalent increase in its operating income. In addition, the Company may face an increase in operating costs as a result of other factors, as, for instance, shortages of raw materials, equipment or skilled labor, increased equipment costs and increased competition in the segments in which it operates. The Company may need to raise additional funds through securities offerings, including offerings of its shares or debt instruments, or through credit financings, in order to meet its future capital needs. The Company may not be able to secure such funds on favorable terms, or at all.

The Company future capital needs will be determined by a number of factors, which includes growth rate of its revenues, cost and significance of future acquisitions, and expansion of its business operations. Depending on the investment volume needed, or of costs that may incur, the Company may be forced to increment cash flow and/or search alternate sources of funds, including creating strategic partnerships. Anny effort to increment cash flow, by increasing sales, costs reduction, more efficient receivables charge, and inventory reduction, can be unsuccessful. In addition, the Company may not be able to raise funds to finance the Company’s operations on favorable terms, in which case it may be unable to take advantage of future opportunities, to react to an increase in competition, or to meet its existing debt obligations. Any of the events mentioned above could have a material adverse effect on its financial condition, operation results and the negotiation price of its shares.

The current funding lines from the Company represented, on December 31 of 2017, total debt of R$ 299.4 million. Pursuant to the terms of the Company’s existing financing agreements it must comply with certain conditions which restrict, among other things, its ability to incur additional debt, pay dividends and carry out capital reductions. As a result of these restrictions, the Company may have difficulty in securing additional financing to run its operations. New financing contracts may require even more severe restrictions. In addition, some of the Company’s clients are dependent on the credit availability to finance their investments. A scenario of credit shortages and high interest rates may adversely affect its clients’ ability to fund their projects and, consequently, purchase the Company’s services, which may have a material adverse effect on its financial condition and results of operations. The Company is also exposed to the fact that counterparts to its financing agreements may be prevented from fulfilling their obligations toward the company, should they go bankrupt or into receivership due to a sharp decrease in their liquidity levels, so great that such institutions may be prevented from fulfilling their obligations. The Company’s difficulty in the credit scarcity may also adversely affect its suppliers. Therefore, should the Company’s financial counterparts or suppliers be unable to satisfactorily meet their obligations under the terms of the Company’s existing agreements, the Company may need to secure alternative financing and/or approach alternative suppliers in order to meet its own obligations toward its clients. Such events could also lead to litigation with its partners or clients, which could have a significant adverse impact on its reputation, operation and financial condition.

Service cycle leads the Company to apply significant financial and technical resources even before engaging. Company´s services require high level of initial investment, directed to new process development and, mainly, to machinery and equipment acquisition which will be used in clients operation, besides the constant improvement of employees. Some of these investments are performed without any assurance that the company will be hired in a continuous base to provide service. Thus, the company is particularly vulnerable to its equipment idleness, until it is reallocated in a project.

The loss of members of the Company’s management team may have a material adverse effect on its operations.

The Company's ability to maintain its competitive position depends to a large extent on the experience of members of management in the sectors in which it operates. None of the members of the administration are subject to long-term employment contracts or non-compete agreements. There is no guarantee that the Company will be able to retain members of the current management or hire new qualified members. The loss of some senior management or the inability to attract and retain experienced executives could negatively impact the business.

Flaw in asset management can affect credibility and profitability of the Company. As a rental Company, it needs to manage efficiently its assets, being in investment and disinvestment decision or in its equipment rental contracts, equally both. The Company performs investment and disinvestment based on a demand forecast for its services. In case this forecast does not happen or changes, the Company may have increase on its idle capacity, affecting its profitability in terms of return on invested capital, or loss of market share. In its rental contracts, the Company counts the amount of rented equipment in delivery versus the amount returned. In case the Company is not efficient in account of rented spare parts, it can have its credibility affected by charging its clients improper compensation or having not enough equipment to replace lost or broken equipment, if it charges lower than payable.

All of the Company’s business units face significant competition in the markets in which they operate. The Company faces strong competition in all of the segments in which it operates. Moreover, the Company may be exposed in the future to additional competition from new market players, as well as from foreign competitors entering the Brazilian market. The Company operates in a fragmented market which demonstrates considerable potential for growth and is served by a substantial number of companies offering less sophisticated and, therefore, less cost services. The Company’s clients’ decision to hire a particular service provider is influenced by a number of factors, including the quality of the services, the reliability of the contractor and its ability to offer innovative solutions, and the price charged for the services required. The Company’s competitors are making substantial efforts to improve their market positions and the Company may lose certain clients to these competitors, including long-standing clients that regularly employ its services.

In addition, if construction companies and industries create new in-house departments to complement their core operations, and no longer require the Company’s services (or even to compete with the Company). Competition could also come from substitute products, such as scaffolding, stairs and other types of access equipment, in the case of motorized access equipment. All these events can lead to a reduction in demand for Company’s services, and a potential increase in competition, which may adversely affect its market stock price and results of operations.

The development of engineering solutions and technological innovations which add value to the Company’s services is critical to the protection of its leading market position and to the expansion of its business. Due to the nature of the Company’s business, it must remain abreast of the latest engineering solutions and technological innovations in its industry. The Company must employ qualified personnel, maintain an adequate infrastructure, and expand relationships with suppliers that have a successful track record. Should the Company fail to provide value-added engineering solutions, or to buy or license new technologies developed by third-parties on acceptable terms, the services rendered by the Company could become outdated or obsolete in comparison to the services offered by its competitors. Any failure to remain at the technological forefront of the industry would adversely affect its relationship with clients and, consequently, its financial condition and results of operations. In case the Company is unable to hire qualified professionals and provide training to its staff.

In case there in growth in its activities, the Company will need to hire new qualified professionals active in the most various business sectors. However, it faces significant competition in the hiring of qualified personnel from other providers of engineering and industrial services and there can be no assurance that it will be able to attract the number of professionals necessary to implement its expansion plan in the desired timeframe. In addition, the Company may face difficulties in retaining its current staff if it is unable to preserve its corporate culture and offer competitive compensation packages. The Company believes that the hiring and retention of skilled labor is a critical factor for business success and its growth strategy. If the Company does not achieve its strategy, it can affect operation and future results. The Company’s operations have already been interrupted in the past by labor issues, and the Company cannot guarantee that such interruptions will not occur in the future. As of December 31, 2017, approximately 0.5% of the Company’s employees were members of labor

unions, primarily in the civil construction and trade industries. The Company has entered into collective

bargaining agreements with each of these unions, which agreements are renegotiated on an annual basis.

The renegotiation of these agreements could become more difficult as unions campaign for salary

increases on the basis of the growth of its operations.

The Company’s success depends, to a large extent, on the quality and safety of its services and products. The Company’s success depends, to a large extent, on the quality and safety of the machinery and equipment that it uses in the provision of its services or that are rented to its clients. If the Company’s products are in any way defective, incorrectly assembled or unsafe, if they cause any kind of accident or delay in its clients’ operations, or if they do not meet the expected quality and safety standards, the Company’s relationships with its clients and partners could suffer, its reputation and strength of its brand could be adversely affected, and the Company could lose market share, besides being exposed to administrative proceedings and lawsuits in connection with any potential failures of its machinery or equipment and incur significant expenses. The occurrence of any of these factors could adversely affect the Company’s activities.

Proceeds from the Company’s insurance policies may not be sufficient to cover damages resulting from a contingent event.

The Company cannot guarantee that proceeds from its insurance policies will be sufficient to cover the damages resulting from any event covered by such policies. Accordingly, certain risks may not be covered under the terms of its insurance policies (such as war, fortuitous events, force majeure and interruption of certain operations). Therefore, if any non-covered event occurs, the Company may incur additional expenses to rebuild or refurbish its buildings, or to repair or replace its equipment. Furthermore, the Company cannot guarantee that the proceeds from its insurance policies will be sufficient to cover the damages caused by any event for which its insurance policies provide coverage. There can be no assurance that the Company will be able to renew its insurance policies on favorable or acceptable terms, or at all, or enter into new insurance policies with alternate providers.

The Company’s results could be adversely affected if it receives an unfavorable judgment or decision in one or more of the administrative proceedings and lawsuits filed against the company.

As of December 31, 2017, the Company was involved in administrative proceedings and lawsuits involving contingencies amounting to R$ 141.6 million, for which it has recorded provisions of R$ 20.1 million. For more information in this regard, refer to item 4.3 in this Reference Form.

The Company’s financial condition and results of operations could be materially adversely affected, if it receives an unfavorable judgment or decision with respect to a significant share of these proceedings and lawsuits. In addition, proceedings involving alleged acts of negligence, imprudence or failure could affect the Company’s reputation and adversely affect its operations, whether or not it receives an unfavorable decision. The Company’s growth may be adversely affected if it fails to identify and complete strategic acquisitions. Difficulties in the integration of acquisitions could adversely affect its results of operations.

The Company operates in a fragmented market, where the credit access is limited. The Company believes, therefore, that its sector will go through a process of consolidation over the next few years, which may significantly change the existing competitive landscape. The Company believes that identifying and executing strategic acquisitions is one way it could successfully implement its growth strategy and quickly and efficiently expand its operations and geographic footprint. However, this strategy could be adversely affected if the Company fails to identify suitable acquisition opportunities and/or fail to execute such acquisitions on favorable terms. In addition, the Company may not be able to integrate companies it acquires into its operations within the timeframe and in the manner determined by its management. Any such failure could have an adverse effect on the rate of return on the Company’s investment, preventing from taking full advantage of the potential synergies of any such acquisition and result in an adverse effect on its financial condition and results of operations.

b. To the controlling shareholder The interests of the Company’s controlling shareholder may conflict with the interests of its investors.

The Company’s controlling shareholder has the ability, among other things, to elect the majority of the members of its board of directors and determine the outcome of decisions requiring shareholder approval, including with respect to transactions with related parties, corporate restructurings, asset sales and partnership agreements, and will have power to influence the amount and timing of any dividends to be distributed in the future, subject to the provisions of the Brazilian corporate law regarding the payment of mandatory dividends. The Company’s controlling shareholder may choose to pursue acquisition opportunities, dispose of assets, and enter into partnership and financing agreements or similar operations which may conflict with the interests of its other shareholders. The Company is a diffused controlled company, since it does not have a controlling shareholder or group of shareholders holding more than 50% of its voting capital, which can allow it be susceptible to alliances and conflicts between shareholders and other events resulting from the absence of a controlling shareholder or shareholder group holding more than 50% of the voting capital.

The Company does not have a shareholder holding more than 50% of its voting capital. Alliances or agreements can be made between the new shareholders, which could have the same effect as having a group of shareholders. In the event of a group of shareholders and this group takes a hold of the decision power of the company, it can suffer sudden and unexpected changes in the corporate policies and strategies, including through mechanisms such as the replacement of the Company’s management staff. Besides this, the Company may be more vulnerable to hostile attempts to acquire control and conflicts from this outcome. Additionally, the Company's shareholders can possibly change or exclude these provisions from its bylaws which provide a public offering for share acquisition by a shareholder who becomes holder of 20% of its share capital and then disregard their obligation to make a public offering to acquire shares as it is required by its bylaws. The absence of a controlling shareholder or controlling group of shareholders of more than 50% of the voting shares of the Company may also hinder certain decision-making processes, which could not be reached the quorum required by law for certain decisions. In the case that there isn’t a controlling shareholder holding the absolute majority of the voting shares of the Company, the Company's shareholders may not use of the same protection granted by Share Companies’ Law against abuses practiced by other shareholders and, consequently, may have difficulty in repairing the damage caused. Any sudden or unexpected change in the Company's management team in its business policy or strategic direction, attempt to acquire control or any dispute among shareholders concerning their respective rights may adversely affect the Company's business and operating results.

c. To the shareholders

An active and liquid market for the Company’s shares may not develop. The volatility and lack of liquidity of the Brazilian capital market could substantially limit the investor’s ability to sell their shares at the desired price and time.

An investment in securities traded in emerging market countries such as Brazil frequently involves a greater degree of risk when compared to investments in securities of issuers located in major international securities markets, and are generally considered to be more speculative in nature. The Brazilian securities market is substantially smaller, less liquid, more concentrated and usually more volatile than major international securities markets such as the United States.

These characteristics of the Brazilian capital market may substantially limit investor’s ability to sell the Company’s shares for the desired price and at the desired time, which in turn may have a significant adverse effect on the price of its shares.

As of December 31, 2017, the BM&FBOVESPA represented, with an average daily trading volume of R$ 3.2 million during the year.

Shareholders may not receive dividends. The Company’s bylaws provide that 25% of the net profit for any year, adjusted pursuant to the provisions of the Brazilian corporate law, should be distributed to shareholders as mandatory dividends or as interest on stockholders’ equity. Despite the requirements regarding the payment of mandatory dividends, the Company may limit such payment to the realized portion of the dividends or suspend the distribution of dividends to its shareholders in any year, if the Company’s board of directors determines that such distribution would not be advisable given its financial condition.

The Company may need additional funds in the future and may issue additional securities to secure such funds. This may adversely affect the price of the shares and result in a dilution of the investor’s percentage interest in the Company’s shares.

The Company may need to raise funds in the future through an additional public or private offering of shares or securities convertible into or exchangeable for shares. Any additional funds raised by the distribution of shares or securities convertible into or exchangeable for shares may impact their price and dilute the investor’s percentage interest.

Provisions in the Company’s bylaws may discourage, delay or make more difficult a change of control of the company or the approval of transactions that might otherwise in the best interests of its shareholders.

The Company’s bylaws contain provisions intended to avoid the concentration of ownership of its shares in small groups of investors and to foster a dispersed ownership. These provisions require that any shareholder that: (a) acquires or becomes the holder, of the Company’s shares with 20% (twenty percent) or more of emited shares of the company shall, within sixty (60) days from the date of acquisition or event that resulted in the ownership of shares in an amount equal to or exceeding 20% (twenty percent) of the total shares issued by the Company; (b) acquires or becomes the holder of other rights such as (i) other Corporate Rights over a volume equal to or greater than 20% (twenty percent) of the total shares issued by the Company or that might result in the acquisition of shares issued by the Company in an amount equal to or greater than 20% (twenty percent) of the total shares issued by the Company, or (ii) derivatives that give the right to shares of the Company representing 20% (twenty percent) or more of the shares of the company, or that give the right to receive corresponding to 20% (twenty percent) or more of the shares of the Company, shall apply or request for registration for subsequent realization of an OPA of all shares issued by the Company, observing the applicable CVM regulations, to the Novo Mercado, the other regulations of BM&FBOVESPA and the terms of the Company's Bylaws.

These provisions could have the effect to discourage, delay or even prevent the Company to merge with another company or be acquired by another company, including transactions in which the investor may receive a bonus over the market value of the Company’s shares. Likewise, statutory provision might allow the maintenance or perpetuation of the staff members of the Company nominated and elected by shareholders holding less predominant portion of the Company's capital.

d. to its subsidiaries and affiliates. Not applicable, the Company does not have subsidiaries or affiliates. The only society in which the Company holds a stake is Rohr S/A – Estruturas Tubulares (Rohr). Since Rohr operates in the same market of the Company, the Company’s management believes that both societies are subject to the same risks listed in the items (a) above and (e), (f) and (g) below.

In addition, the minority stake held by the Company in Rohr does not allow it to prevail in the deliberations of its general meetings or elect administrators, and shall only be facultative to elect a fiscal council member and exercise the rights of shareholders provided for in corporate law. Consequently, the Company is exposed to various risks, such as (i) does not receive dividends beyond the minimum required in Rohr’s bylaws, the corresponding amount, in each fiscal year of 6% of its capital, (ii) to not be able to influence the executive administration and management of Rohr, including the case of disagreeing with decisions made by its officers, and (iii) eventual difficulty to access Rohr’s documents and information, or related to its operations.

e. To suppliers

Fluctuations in the price of raw materials, components and equipment used in the Company’s

operations, as well as of commodities, may adversely affect its results.

Certain raw materials and components used in the Company’s operations are prone to sudden and significant fluctuations in price, over which it has no control. The final price of components, machinery and equipment that are acquired or rented from third parties correlates to a significant extent with the price of commodities such as steel and aluminum. A substantial increase in the price of such commodities generally results in an equivalent increase in the Company’s suppliers’ operating costs and, consequently, in an increase in the prices they charge for their products. The Company may not be able to pass these price increases on to its clients, which could have an adverse effect on its operating costs and financial condition and results of operations. In addition, all of the equipment used by the Rental business unit is imported, as there is no equipment of comparable quality available locally, and their prices are defined in foreign currencies. Brazilian Real depreciation against the foreign currencies in which the Company purchases equipment increases costs and the Company may not be able to reflect the increased cost of equipment in the rental prices charged.

The components, machinery and equipment used in the Company’s operations are manufactured and supplied by third parties. The components, machinery and equipment used in the Company’s operations are manufactured by third-parties. The Company also buys other materials used in its operations from local or foreign companies. The Company generally does not carry a very large inventory of equipment in its warehouses, only the minimum required for the provision of its services. As a result, the Company is vulnerable to delays in the delivery of equipment or increases in the prices charged by its suppliers, which could prevent from providing its services or renting its equipment to its clients in a timely manner. Also, if the Company’s suppliers are not prepared for and are unable to meet potential increases in the demand for their products, it may not be able to buy the amount of equipment or volume of raw materials necessary to carry out its operations. The same can occur if the company interrupts its purchases with a supplier and, because of the interruption, this supplier is not able to serve by having compromising its production to another client or by any other reason. If such delays in delivery or lack of products become recurrent, the company may not be able to find new suppliers quickly enough to meet its client’s needs. In addition, the introduction of restrictions on the acquisition of imported goods, or the increase of taxes due on imported equipment, may have a negative impact on the Company’s business, in particular on the operations of the Rental business unit. If any of the events above happens, the Company may suffer demand contraction, which, consequently, will impair its results and financial situation.

f. To clients. The Company is exposed to the credit risk of its clients

The company is subject to the credit risk of clients for payments due by the equipment rental and service provision. Provisions for allowance for doubtful debts made by the Company monthly, may not be sufficient to deal with any defaults. For more information, see the section "Credit Risk (accounts receivable)" in table 4.2 of this reference form. Losses above Company’s expectations (and therefore not reflected in provisions) may adversely impact the Company's results. In 2017, allowance for doubtful debt reached 3.6% of Company´s net revenues, versus 5.3% in 2016 and 6.6% in 2015. The Company has significant exposition to clients related to ongoing “Car Wash” investigation

By 2017, approximately 10% of the Company's total net rental revenue came from companies and their respective consortia that are being related in some way to ongoing investigations related to corruption at Petrobras, called "Car Wash Operation". On December 31, 2017, the Company had an exposure of R$37 million in its accounts receivable net. Investigations may lead to a decrease in activities, a lack of access to credit or even the extinction of companies involved, which could result in delays in existing works, late payment or delinquency, less future construction activity and, consequently, the demand for equipment and services of the Company. The Company decreased the balance of leased balance by 57% in Rental and 40% in Construction compared to the balance leased from January 2017 with December of the same year. Monthly revenue decreased by 70% compared to January 2017 with December of the same year.

The Company may have difficulty to recover its equipment if its clients enter in judicial recovery or suspends its payments In case of judicial recovery or suspension of payments, the Company may recover its shoring equipment only after the concrete structure, held by it, is able to sustain itself, which can take months to happen. During this period, the Company might not receive rental revenue, and therefore have its profitability affected. Client relationship can be affected by undue protest Due to increase in payment delay and, consequently, in the allowance for doubtful debts, the Company performed a procurement centralization. This change can generate undue clients protests and, consequently, damage future relationships between the Company and its Clients. The success of the Heavy Construction business unit depends on the development of long-term relationships with a limited number of large companies operating in the Brazilian civil construction sector. The ten biggest clients of the Company represented 33% of Heavy Construction billings in fiscal year ended on December 31st, 2017. Maintaining long-standing partnerships with such companies is the key to ensure the Company’s involvement in the implementation of prestigious and innovative activities and execute its operations, in particular, more complex projects. Should the Company lose any of its main clients, or in case the Company is unable to maintain a close relationship with such clients, the operations and revenue from the Heavy Construction business unit could be materially adversely affected.

The Company may be unable to attract new clients or to develop new business at the pace required for the expansion of the Real Estate and Rental business units. The average term of the service agreements in Rental business unit and their clients is generally shorter than that of the service agreements negotiated by the other business unit. As a result, Rental business unit relies on the constant generation of new business in order to maintain their revenue at a constant level. Due to the high degree of competition faced by the Rental business unit, the Company must make significant investments in order to attract new clients and retain existing ones, in addition to offering its services at competitive prices. If the Company is unable to generate new business at the rate required by the Rental business unit, the operations and expansion of the activities carried out by this business unit could be adversely affected.

The Company may be unable to meet the needs of all of its clients or deliver its services in a timely manner. The Company owns a limited number of machinery and equipment, which must be properly allocated to each project in which it is involved. Delays or interruptions in the manufacturing and maintenance of such equipment and its component parts, as well as sudden increases in the demand for the Company’s services, could prevent from providing its services in the agreed timeframe or from meeting the needs of its clients satisfactorily and efficiently, as a result of any of the following factors:

inability to foresee the needs of its clients;

delays caused by its suppliers;

insufficient production capacity;

equipment failure;

shortage of qualified workers, strikes and labor claims;

interruption in the provision of public services, in particular power cuts;

delays or interruption of the equipment transportation system;

changes to customs regulations;

macroeconomic factors; and

natural disasters.

Besides being subject to applicable penalties, if the Company is unable to meet its deadlines, either due to internal problems, or as a result of events over which it has no control or not, it may lose the trust of its clients and, therefore, experience a decrease in the demand for its services, which could adversely affect its financial condition and operation results.

Fluctuations in the price of commodities may impact the Company’s clients’ investment decisions and the cost of equipment and, consequently, the Company may face cancellations or delays affecting its existing and future projects or loss of revenue.

Fluctuation in commodity prices may affect the Company’s clients in many areas. For example, for clients engaged in the oil and gas, copper and fertilizers business, fluctuation in their product prices may have a direct impact in the profit margins and cash flows, and consequently influence decisions between maintaining existing investments or making new expenditures. Should the Company’s clients choose to postpone new investments and/or to cancel or delay the execution of existing projects, the demand for the Company’s services would drop, which could have a material adverse effect on its operations and financial condition.

The Company’s operations and financial situation has been adversely affected in the past, and could be substantially affected in the future, due to cancellations and delays in connection with projects in which it was or is involved. g. to the economic sectors in which the issuer is involved.

Risk factors related to macroeconomic aspects

The Brazilian economy has been marked by numerous and, sometimes, by the federal government, which often changes monetary, credit, tax and others. The Brazilian government’s actions to control inflation and effect other policies have involved in the past, among others, increases in interest rates, changes in tax policy, price control, currency devaluation, controls the flow of capital and certain limits on goods and services imported. The Company has no control and can’t predict what measures or policies the Brazilian government may adopt in the future. The Company’s business, financial condition and results of operations, as well as the market value of the shares may be adversely affected due to changes in public policy at the feral, state and municipal, referring to public tariffs and exchange controls, as well as other factors such as:

interest rates;

exchange controls and restrictions on remittances abroad;

changes in exchange rates;

inflation;

social and political instability;

expansion or contraction of global and Brazilian economy;

liquidity in the domestic financial and capital markets and lending markets;

tax burden, fiscal policy, tax regime; and

political, social and economic developments that may affect Brazil. The uncertainly about the implementation of changes promoted by the government regarding the policies or standarts that may affect these or other factors in the future can contribute to economic uncertainty in Brazil and heightened volatility in the securities market in the country. It is not possible to predict whether the current or future management of the Federal Government Will implement changes in fiscal, Exchange rate policies, monetary, social security, among others, or what will be the consequences of such policies in the Brazilian economy and the Company’s operations.

Efforts of the Federal Government to combat inflation may slow the growth of the Brazilian economy and harm our business.

In the past, Brazil experienced extremely high rates of inflation and, consequently, adopted monetary policies that resulted in one of the hightest real interest rates in the world. In 2017, SELIC showed average of 10.30%. The annual inflation calculated by the IGP-M was 10.54%, 7.17% and -0.52% in 2015, 2016 and 2017, respectively, and by the IPCA was 10.67%, 6.29% and 2.95% in 2015, 2016 and 2017, respectively. Inflation and the measures adopted by the Federal Government to combat it, mainly through the Central Bank, have had and may have significant effects on the Brazilian economy on the Company’s business. Tight monetary policies with high interest rates may restrict Brazil’s growth and the availability of credit. Conversely, government policy and looser monetary, the decrease in interest rates and intervention in the foreign Exchange and stock market adjust or fix the real value may trigger increases in inflation and, consequently, the volatility of growth and the need for sudden and significant increases in interest rates. In addition, the Company may not have conditions to adjust the prices to offset the effects of inflation on its cost structure. Any of these factors could affect their business negatively.

The demand for the Company’s services is directly linked to the volume of public investment in the engineering, construction and infrastructure sectors. The public sector is generally involved in the implementation of large engineering and infrastructure projects in Brazil, either by means of direct investment in such projects or through financing agreements.

In Brazil, public investments have historically been influenced by macroeconomic, political and legal factors, which are all beyond of the Company’s control. Such factors could determine, among other things, the suspension or cancelation of projects that require the involvement of the public sector. Any such suspension or cancellation could have a material adverse effect on the Company’s clients’ operations and on the demand for its services. If estimates regarding the level of future investments in construction and infrastructure are not correct, or if such investments are not made, the Company’s clients’ operations (and, consequently, the Company’s financial condition and operations) may be adversely affected. The Company may have difficulties in adjusting the prices charged by it to offset the effects of inflation The Company seeks to pass along the effects of price inflation which charges for its products and services. However, in case of long-term contracts, the adjustment is only permitted by Brazilian Law every 12 months. The main price índices used for the correction values in its long-term contracts are the IGP-M (Índice Geral de Preços do Mercado), [released by Fundação Getúlio Vargas (FGV)], and the IPCA (Índice de Preços ao Consumidor Amplo), released by Instituto Brasileiro de Geografia e Estatística (IBGE). In addition, the cost of the Company's workforce is impacted by increases agreed in collective bargaining, with adjustments generally also defined according to price indices.

In periods of low demand and therefore price pressure, you probably can’t pass on the effects of inflation the prices it charges for its products and services and hence profitability could suffer reduction.

Raw Material Price Risk and Imported Equipment

Increase in the price of commodities used in the manufacture of the equipment used in providing the Company's services, such as steel and aluminum above the inflation rate used in the adjustment of their contracts may also compromise their future earnings until these real increases are incorporated into prices. Additionally, in the case of contracts in which imported equipment is used, such as business unit Rental, increases the exchange rate above inflation also compromise their future earnings until these increases can be incorporated into prices.

to the sectors’ regulation in which the issuer acts. h.

Costs related to laws and workplace safety regulations as well as those third-party professionals. Such costs can be relevant and adversely impact the Company’s results.

As of December 31, 2017, the Company had 1.260 active employees (to further information go to section 14 in this Reference Form). Due to the nature of the services provided, both the Company’s employees and employees of third parties face risks when executing its projects, which could result in serious injury or death. In accordance with existing labor laws and regulations, the Company is required to provide and ensure the use of safety equipment for its employees and other individuals working on its projects, under the Company’s responsibility. If the Company fails to provide all necessary safety equipment and ensure its proper use, or if it works with companies that are not sufficiently committed to ensuring the safety of their staff, the Company could be deemed responsible for any accidents that take place at the worksites where it provides services. Any accidents at the worksites where it provides its services could potentially reduce the number of able bodied employees available to carry out its operations and would expose the Company to the payment of fines and penalties to the workers involved. Any changes to existing safety regulations may impose additional obligations on the Company and result in an increase in its expenses with respect to safety equipment and procedures. The Company cannot predict whether any such changes would have a significant impact on its operations. For example, changes imposing a reduced work day, for safety reasons, could result in a drop in employee productivity, therefore forcing the Company to hire additional staff. Similarly, provisions requiring the Company to install additional safety components could increase the cost of its equipment and, therefore, adversely impact its operating costs and financial results. In addition, the Company engaged a third-party labor provider to hire temporary employees during periods of rapid increases in the demand for the Company’s services. As a result, the Company could be considered responsible for meeting any employment obligations relating to such professionals, or deemed to be their employer under the terms of existing laws and regulations, and would be subject to potential costs associated with failure to comply with workplace safety regulations with respect to such professionals. Besides, the editing of stricter legal and regulatory provisions regarding the use of outsourced personnel, or of provisions imposing additional obligations on the contractor of

outsourced services, could increase the Company’s labor costs and have a negative effect on its financial condition and results of operations. In addition, the Company may have to use outsourced professionals and companies in periods of growth in demand for services. Due to the use of outsourced workers, in accordance with labor legislation, the Company may be considered as a subsidiary responsible for labor and social security obligations related to outsourced employees or be considered by labor direct employer of outsourced employees. In addition, the adoption of stricter rules regarding outsourcing or imposing more responsibilities on the beneficiary of services may lead to an increase in labor costs, negatively impacting the Company's financial situation. The technical requirements and the use of the Company’s equipments, as well as, the way which the Company renders its services, may suffer relevant changes due to the incident of drastic climate change. Moreover, the Company’s inability to adapt to climate change may adversely affect its business and financial results. Additionally, the Company is subjected to several environmental laws and regulations that may become stricter in the future, as a response to the drastic climate changes, and may result in higher duties and greater capital investment. Climate change, including flooding or erosion caused by increased rainfall, could adversely affect the technical requirements in the projects and equipment to which the Company is subjected to, the way in which the Company uses its equipment and the way it render its services. In addition, variations in weather caused by climate change may lead to postponements in project schedules, which in turn may lead to a decrease in the demand for the Company’s services. The Company’s inability to adapt its operations to such climate change and maintain its quality standards from our equipment and services, may lead to a decrease in its market share, adversely affecting its business and financial results. The Company’s operations are subject to several federal, state and municipal environmental laws and regulations, including protocols and international treaties to which Brazil is party. Such regulatory framework may become more stringent in the future due to, among other things, climate change. Operations are subject to extensive federal, state and local legislation on environmental protection, which covers even the normative introduced in the legal system in international function of agreements and treaties to which Brazil is or may become a party. The occurrence or perception about climate change at national and international level can lead to the issue of more stringent environmental standards. Compliance with the provisions of these laws and regulations is monitored by certain governmental bodies and agencies that are responsible for applying administrative sanctions in the event of the breach of any relevant provisions. These sanctions may consist of fines ranging from R$500 to R$50,000,000, result in the cancelation of our licenses and, ultimately, the temporary or permanent suspension of the Company’s operations, among other penalties. Environmental laws and regulations may become stricter in the future, which may require the Company to make additional investments in compliance and, as a result, affect its existing investment program. Such changes may cause an adversely affect to its financial condition and results of operations. Besides, the failure to comply with such laws and regulations, such as operating without the necessary environmental licenses and permits, or failing to adequately dispose of residues arising from the Company’s painting and equipment maintenance services, may result in the application of criminal and administrative sanctions, as well as the obligation to repair the alleged harm or pay penalties for any potential damage to the environment. Criminal sanctions may include, among other things, the arrest of the persons responsible for the breach, the revocation or restriction of tax incentives and the cancelation or suspension of credit facilities provided by public financial institutions. The Company could also be prohibited from providing services to the public sector. The application of any of these sanctions could have an adverse effect on the Company’s revenues and prevent us from being able to raise capital in the financial markets. The introduction of additional environmental obligations in the future as a result of legal or regulatory changes or as a consequence of an increase in the environmental impact of the Company’s operations, or failure to obtain any necessary environmental licenses and permits, may result in additional and substantial compliance costs and have an adverse effect on its business, financial condition and results of operations.

i. to foreign countries in which the issuer operates.

Not applicable, since the Company restricts its operations to Brazil. j. the environmental issues The Company is subject to various environmental laws and regulations that may become more stringent in the future, resulting in increased obligations and increased capital investments. Operations are subject to extensive federal, state and local legislation on environmental protection, which covers even the normative introduced in the legal system in international function of agreements and treaties to which Brazil is or may become a party. The occurrence or perception about climate change at national and international level can lead to the issue of more stringent environmental standards.

Compliance with the provisions of these laws and regulations is monitored by certain governmental bodies and agencies that are responsible for applying administrative sanctions in the event of the breach of any relevant provisions. These sanctions may consist of fines ranging from R$500 to R$50,000,000, result in the cancelation of our licenses and, ultimately, the temporary or permanent suspension of the Company’s operations, among other penalties. Environmental laws and regulations may become stricter in the future, which may require the Company to make additional investments in compliance and, as a result, affect its existing investment program. Such changes may cause an adversely affect to its financial condition and results of operations. Besides, the failure to comply with such laws and regulations, such as operating without the necessary environmental licenses and permits, or failing to adequately dispose of residues arising from the Company’s painting and equipment maintenance services, may result in the application of criminal and administrative sanctions, as well as the obligation to repair the alleged harm or pay penalties for any potential damage to the environment. Criminal sanctions may include, among other things, the arrest of the persons responsible for the breach, the revocation or restriction of tax incentives and the cancelation or suspension of credit facilities provided by public financial institutions. The Company could also be prohibited from providing services to the public sector. The application of any of these sanctions could have an adverse effect on the Company’s revenues and prevent us from being able to raise capital in the financial markets. The introduction of additional environmental obligations in the future as a result of legal or regulatory changes or as a consequence of an increase in the environmental impact of the Company’s operations, or failure to obtain any necessary environmental licenses and permits, may result in additional and substantial compliance costs and have an adverse effect on its business, financial condition and results of operations.

4.2 Comments on the Company’s expectations to reduce or increase its exposure to the risks factors

The Company's activities expose it to several financial risks: market risk (including currency risk, interest rate risk, cash flow risk and price risk), credit risk and liquidity risk. The risk management program focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on the Company's financial performance. The Company uses derivative financial instruments to hedge certain risk exposures and has the policy of not participating in any derivative trading for speculative purposes. Risks Interest Rate and Monetary Restatement The Company's indebtedness is subject, mostly at floating interest rates, especially rates CDI, IPCA and TJLP. There is a risk that the Company may incur losses due to fluctuations in interest rates, which increase financial expenses related to loans, financing and debentures obtained in the market. On December 31, 2015, 2016 and 2017, the CDI rate was 14.14%, 13.63% and 6.99%, respectively; IPCA was 10.67%, 6.29% and 2.95%, respectively; and TJLP was 6.25%, 7.5% and 7.12%, respectively.

As a management policy, the Company does not use any instruments to mitigate its exposure to fluctuations in interest rates. This is a market risk due to macroeconomic and regulatory conditions inherent to all companies operating in Brazil.

Risk management is carried out by the Finance Department, according to the policies approved by the Board of Directors, when applicable. The Finance Department identifies, evaluates and protects the Company against possible financial risks in cooperation with the Company's operating units. The Financial Department establishes principles for risk management as well as specific areas such as foreign exchange risk, interest rate risk, credit risk, use of derivative and non-derivative financial instruments and investment of cash surpluses. The Company analyzes its exposure to interest rate dynamically. Various scenarios taking into consideration refinancing, financing and hedging are simulated. Based on these scenarios, the Company defines a reasonable change in the interest rate. The scenarios are run only for liabilities that represent the major interest-bearing positions. See below sensitivity analysis of possible fluctuations in interest rates. Sensitivity analysis

Below, the analysis chart of sensitivity of financial instruments, describing the risks that may result in material losses for the Company, with the most probable scenario (scenario I) according to an evaluation carried out by management, considering a horizon of one year. In addition, two other scenarios are presented in terms determined by the Brazilian Securities Commission, through Instruction No. 475/2008 in order to provide 25% and 50% deterioration in the risk variable considered, respectively (scenarios II and III):

Effect on the outcome - in R$ thousand

Effect on the outcome

Financial investments Indicator Accounting Probable 25% 50%

Financial investments CDI 67.781 4.484 3.381 2.254

Restricted bank deposits CDI 150.519 10.407 7.847 5.231

Total

218.300 14.891 11.228 7.485

Variation 25.00% 50.00%

Effect on the outcome

Debt Indicator Atual Prospective 25% 50%

BNDES TJLP (8,870) (697) (853) (1,009) 2nd issue of debentures 1st serie CDI - - - - 2nd serie IPCA (156,811) (17,218) (18,779) (20,339)

3rd issue of debentures CDI (134,175) (10,506) (13,132) (15,759)

Total

(299,856) (28,421) (32,764) (37,107)

Variation 15% 31%

The sensitivity analysis presented above considers changes relating to the risk of interest rate, holding constant other variables associated with other risks.

12/31/2017

References

Probable I Scenario II Scenario III

25% 50%

Rates

CDI (%) (i) 6,75% 8,44% 10,13%

TJLP (%) (ii) 7,00% 8,75% 10,50%

IPCA (%) (iii) 3,72% 4,65% 5,58%

(i) As regards the interest rate risk, the Company's Management considered as the probable premise (Scenario I) for its financial instruments a rate of 6.75%, extracted from the FOCUS report information released by the Central Bank of Brazil on January 12, 2018 considering an increase in the CDI rate in line with the expected increase in the Selic rate, since there is a direct relationship between charges, and an increased rate as the premise for the other two scenarios, according to the impairment scenario.

(ii) For financial liabilities related to loans and financing - BNDES, the Company's Management considered as the probable premise (Scenario I) would be the maintenance of the TJLP rate, since there is no evidence of change in the rate in the short term and increased rate as the premise for the other two scenarios. (iii) For financial liabilities related to the second series debentures, the Company's Management considered as the probable premise (Scenario I) the expectation of the IPCA in 2018 described the FOCUS report released by the Central Bank of Brazil on January 12, 2018, since there is no evidence of change in the rate in the short term and increasing rate as the premise for the other two scenarios.

Credit Risk

(i) Cambial Risk

The Company's policy is to reduce the risk related to the cash exchange rate, conservatively, since all its

revenues are in reais. At December 31, 2017, the Company has foreign exchange exposure or open derivative

instruments, referring to NDFs on equipment exports.

(ii) Risks Interest Rate and Monetary Restatement

The Company's indebtedness is subject, mostly at floating interest rates, especially rates CDI, IPCA and TJLP. There is a risk that the Company may incur losses due to fluctuations in interest rates, which increase financial expenses related to loans, financing and debentures obtained in the market.

As a management policy, the Company does not use any instruments to mitigate its exposure to fluctuations in interest rates. This is a market risk due to macroeconomic and regulatory conditions inherent to all companies operating in Brazil.

The Company analyzes its exposure to interest rate dynamically. Various scenarios taking into consideration refinancing, financing and hedging are simulated. Based on these scenarios, the Company defines a reasonable change in the interest rate. The scenarios are run only for liabilities that represent the major interest-bearing positions. See below sensitivity analysis of possible fluctuations in interest rates.

Credit Risk Credit risk arises from the possibility of the Company suffering financial loss if a customer or counterparty to a financial instrument fails to meet its contractual obligations arising from its operating activities (primarily with respect to trade receivables) and financing, including deposits in banks and financial institutions.

(i) Accounts Receivable

The Company periodically invoices values for leases and sales due by its customers by overdue periods ranging

typically from 30 to 60 days, the average collection period in 2017 was 66 days. Thus, it is subject to default risk with respect to accounts receivable. Primarily, the portfolio of the Company's commercial credit is focused on domestic clients. The Company establishes a provision for impairment when understands that there is a risk of not receiving the amounts due. The customer credit risk management is exercised by the Company's financial management, which assesses the financial ability to pay customers. This analysis is carried out before the actual trade agreement between the parties and such, are individually analyzed each client, taking mainly into consideration the following information: (i) registration data; (ii) information and financial indicators; (iii) risk classes (SERASA methodology); (iv) majority controller; and (v) disputes and protests in Serasa.

(ii) Financial instruments and money deposit

The risk of credit balances with banks and financial institutions is managed by the Company's treasury in accordance with the policy established by this. Excess funds are invested only in approved counterparties. The Company's practice to use only large financial institutions, which are among the 10 largest banks with assets in Brazil. Management does not expect any counterparty to fail to meet its obligations.

Liquidity Risk Liquidity risk arises from the possibility that the Company encounters difficulties in meeting the obligations associated with its financial liabilities that are settled with cash payments or other financial assets. The Company's approach to managing liquidity is to ensure, as much as possible, you always have sufficient liquidity to meet its obligations as they fall due under normal and stress conditions, without causing unacceptable losses or risk damaging the reputation of the Company. The Company's finance department monitors rolling forecasts of the Company's liquidity requirements to ensure it has sufficient cash to meet operational needs. The monthly forecasts take into account the plans of our debt financing, compliance with contract terms and compliance with internal goals as the Company's strategic plan. In addition, the Company has credit lines with major financial institutions operating in Brazil. The chart below analyzes the main financial liabilities by maturity, corresponding to the remaining period in the balance sheet to the contractual maturity when the Company expects to make payment:

Values in R$ mil

Expired Up to one

month

Between one and

three months

Between three

months and one year

Between one and

two years

Between two and

Five years More than

5 years Total

December 31, 2017

Loans and financing - 317 624 2.751 3.469 2.669 - 9.830

Debentures - - - 137.443 131.553 60.608 - 329.604

Suppliers 1.695 11.611 2.524 1.068 - - - 16.898

December 31, 2016

Loans and financing - 337 653 2.896 3.669 5.484 620 13.655

Debentures - - 5.815 183.533 142.405 195.627 - 527.380

Suppliers 1.276 10.919 532 331 - - - 13.058

4.3 Judicial, administrative or arbitral awards, which are not under confidentiality, in which

the company or its subsidiaries are part and whose apelles are administrators or former administrators, owners or ex-owners or investors of the company or its subsidiaries.

Mills Estrutura e Serviços de Engenharia S.A. (“Company”) is a party to judicial and administrative proceedings in the civil, tax, social security, labor as described below. Its reserves are recorded in the financial statements the total amount of probable losses. At December 31, 2017, the total value of cases involving contingent liabilities was R$141.6 million, and the total amount involved in processes with probable loss, according to an evaluation of the Company and its legal counsel, was R$20.1 million, as indicated below:

Contingencies Fiscal Year ended

December, 31

2015 2016 2017

(in R$ thousand)

Civil Probable Losses 2.419 3.502 2.051

Probable Losses 5.198 8.477 6.755

Remote Loss 2.560 23.354 44.609

Fiscal and Social Securities


Probable Losses 40.461 35.203 43.335

Remote Loss 33.215 36.079 37.565

Labor


Probable Losses 18.006 17.230 11.584

Remote Loss 2.620 1.149 1.002

Others

Probable Losses - - -

Probable Losses - - -

Remote Loss - - -

Provisions 16.612 20.125 21.364

Judicial Deposits 11.023 10.820 10.968

The Company believes that the provisions for judicial and administrative contingencies are sufficient to cover probable losses. The main processes in which the Company is a defendant are described below.

Civil Proceedings

The Company is defendant in 80 proceedings concerning civil liability and indemnification payments, regarding, above all, contract terminations and indemnification payments, whose total value was of R$53.4 million on December 31, 2017. Based on the advice of the Company’s external legal counsel, as of December 31, 2017 it has recorded provisions of R$2.0 million to cover probable losses arising from these proceedings.

Process nº 0053271-19.2013.8.17.0001

Jurisdiction State Justice of Pernambuco

Instance 1st Instance

Date of filing 7/4/2013

Parties in the suit Mills Estruturas e Serviços de Engenharia S.A. and Habitacional Empreendimentos LTDA.

Amounts, goods or rights involved R$ 6.241 thousand (materials damage – updated on 12/31/2016)

Main facts

Object: This is Indemnity action filed by Housing Empreendimentos Ltda. against the company seeking payment by way of damages in the amount of R$ 6.241 (property damage) updated on 31/12/2017, and moral damages, because the contract to provide concrete structure for implementing service signed the Housing and Reserva do Paiva Company Residence South Real Estate Development Ltda.

Chances of loss Possible

Analysis of impact in the case of losing the suit

In the event of an unfavorable decision, the Company will have to collect fiscal credit subject matter of the administrative procedures in question, in the updated amount of R$6.241 thousand (until December 31, 2017). Since this is an isolated fact, which is not a habitual practice of the Company, the Company does not believe that an unfavorable decision would have a material adverse effect on its financial situation or on its operating results.

Amount provisioned (if any) -

Process nº 5047677-70.2016.8.13.0024

Jurisdiction Federal Justice of Minas Gerais

Instance 1st instance


Parties in the suit Mills Estruturas e Serviços de Engenharia S.A. and Ancona Engenharia e Participações S/A Empreendimentos LTDA.


Main facts

Object: This is Indemnity action filed by Ancona Engenharia e Participações S/A against the company seeking payment by way of damages in the amount of R$ 6,845 thousand (property damage) uptaded on 12/31/2017 and moral damages, due to supposed delay in delivery of aluminum molds.



In the event of an unfavorable decision, the Company will have to collect fiscal credit subject matter of the administrative procedures in question, in the updated amount of R$ 6,845 thousand (materials damage – uptaded on 12/31/2017) in addition to moral damages that will be arbitrated by the judge. Since this is an isolated fact, which is not a habitual practice of the Company, the Company does not believe that an unfavorable decision would have a material adverse effect on its financial situation or on its operating results.


Process nº 0116275-15.2003.8.05.0001

Jurisdiction State Justice of Bahia



Parties in the suit

Mills Estruturas e Serviços de Engenharia S.A. and Mitti Andaimes e Equipamentos LTDA


Main facts

Object: This is the Execution of a Judicial Title on the basis of a final decision on the judgment that recognized against the Company the payment of property damage in the amount of R$5,660 thousand (material damages) as of 12/31/2017.



In the event of an unfavorable decision, the Company will have to collect fiscal credit subject matter of the administrative procedures in question, in the updated amount of R$5.660 thousand (until December 31, 2017). Since this is an isolated fact, which is not a habitual practice of the Company, the Company does not believe that an unfavorable decision would have a material adverse effect on its financial situation or on its operating results.


Tax and social security processes

At December 31, 2017, the Company litigates the defendant in 106 tax proceedings, the total value was R$89.1 million. Of this total, R$8.2 million (for the likely snag losses) were provisioned. Below is structured summary of the main tax and social security actions which the Company is a party:

Process nº 0062399-62.2001.8.07.0001 (2001.01.1.062399-0)

Jurisdiction Federal District



Parties in the suit Aluma Systems Formas e Escoramentos Ltda. (taken by the Company) and Federal District

Amounts, goods or rights involved R$ 2.976 thousand on 12/31/2017

Main facts

Object: This is the Declaration of absence of legal and tax relationship between the plaintiff and defendant in relation to the ISS requirement on the lease of movables, suspending the payment of the tax in question and condemning the defendant to repeat the magpie.

Last progress on 12/31/2017: Began compliance sentence. Municipality objected motions to stay execution. Process halted by receipt of embargoes. In the records of the Execution Embargoes, it was decided that there was no executive title that would guarantee the repetition of the indebt;

Chances of loss Remote


Given the share of loss with respect to the repetition of Misuse (Embargoes), the Company will be liable to pay the burden of defeat in the import of R $ 1,000.00 (one thousand reais) and also the payment of 1% of the value of the claim (a fine title) properly fixed until the time of payment. There will be no payment of condemnation of the tax, given that declared unconstitutional their collection.


Process nº 0505089-94.2008.4.02.5101

Jurisdiction Federal Justice

Instance 2nd Instance


Parties in the suit Mills do Brasil Estruturas e Serviços Ltda. (taken by the Company) and Federal Union


Main facts

Subject: Tax Enforcement filed to require income tax debts for the Administrative Proceeding No.. 13708000745 / 2003-12, in which considerable part of credit issued refers to the ILL, declared unconstitutional by the Supreme Court. In addition, required credit entirety is subject to cancellation due to the compensation with the accumulated tax losses in the supervised exercise. CDA's: 7020800011581/7020800011662/7060800044438. Obs .: Linked to Annulment Action No.. 0011682-70.2006.4.02.5101. Latest Progress on 30/04/2014: was suspended the course of tax enforcement until the final decision of the Annulment Action No. 0011682-70.2006.4.02.5101, based on the general power of caution in order to avoid possible procedural disorders if the credit exequendo be satisfied and executed, on the other hand, is successful in case of such action.



If the action will be dismissed, the Company shall collect the tax credits at issue, the value of R$ 2.515 thousand (until 12/31/2017). Because it is an isolated incident that does not reflect a company's usual practice, the Company does not believe in an unfavorable decision would have a material adverse effect on its financial condition or results of operations.


Process nº 12267.000047/2007-14

Jurisdiction Federal Revenue

Instance 1st Administrative Instance


Parties in the suit Mills do Brasil Estruturas e Serviços Ltda. (taken by the Company) and INSS


Main facts

This is a tax assessment notice (NFLD No. 35739839-4) aimed at collecting amounts supposedly not paid by way of contribution to the SAT. In his defense, the company claimed that the amounts were deposited in the records of the Writ No. Measure. 0012818-49.1999.4.02.5101 having been converted into income including the National Treasury. The company claimed also that the tax assessment dismissed payments made by the Company. Latest Progress on 6/17/2015: Delivery of the case to the Board of Tax Appeals ("CARF").



The Company shall collect the tax credit in question, the value of R$ 3.759 thousand on 12/31/2017, if that is unsuccessful in proving that it is deposited in court. Because it is an isolated incident that does not reflect a company's usual practice, the Company does not believe that an unfavorable decision would have a material adverse effect on its financial condition or results of operations.


Process nº 0026197-47.2005.4.02.5101

Jurisdiction Federal Justice



Parties in the suit Mills do Brasil Estruturas e Serviços Ltda. (taken by the Company) and INSS


Main facts

Object: This is Lawsuit seeking the termination of the tax credit subject of NFLD No. 35102802-1 (Contribution Education Allowance) to the extent that their values were deposited in the records of the Writ No. 97.0010128-2 Latest Progress on 12/19/2014: Autos completed for analysis and decision of the Judge Rapporteur.



The Company shall collect the tax credit subject of NFLD No. 35102802-1, the value of R$ 3,727 thousand on 12/31/2016. The company already collects the education allowance regularly. Given the amount involved in demand, the Company does not believe that an unfavorable decision would have a material adverse effect on its financial condition or results of operations.


Process nº 0196576-65.2017.8.19.0001 (CDA nº. 2017/009.537-4)

Jurisdiction Secretary of Finance of Rio de Janeiro State (State Administrative Area)

Instance 1st Instance (Administrative)


Parties in the suit

Mills Estruturas e Serviços de Engenharia S.A. and Secretaria de Fazenda do Estado do Rio de Janeiro


Main facts

Object: This is notice of infraction issued to demand ICMS and a fine as a result of carrying goods transfer operations with Construtora Norberto Odebrecht S / A. without the payment of tax due. Argues the state tax authorities that company would not "Trading Company", why the VAT payable on the Mills' sales operations. OBS .: Volunteer Appeal no. 57,768 - 3rd Chamber. Latest Progress on 3/11/2015: protocolled petition by the Company, with the special registration certificates, updated and in force in 2006 and 2007 period in the face of the recipient's address changes, construction company Norberto Odebrecht and export memos related all listed invoices in self table showing infringement, pgs. 310 and 312, and their bills of lading and export receipts, as provided in § 1 of the fourth clause of the agreement ICMS No. 113/96, in compliance with the subpoena form.



The Company shall collect credit worth updated on 12/31/2017 at R$ 3.768 thousand. Given the amount involved in the demand, the Company does not believe that an unfavorable decision will result in a material adverse effect on its financial condition or results of operations.

Process nº 12259.000998/2008-65

Amount provisioned (if any)

-

Jurisdiction Administrative Instance

Instance Administrative Instance


Parties in the suit Instituto Nacional da Previdência Social – INSS and Mills Estruturas e Serviços de Engenharia S.A


Main facts

Tax delinquency notice served only to prevent the loss of the right of the Treasury to release the social security contribution debts discussed at the Annual Action 0062493-78.1999.4.02.5101, plus late-payment penalty. Obs.: The Annual Action was filed in order to be recognized the possibility of compensation payments unduly Social Security contribution, based on the systematic established by Law no. 9.711 / 98. Last Progress on 9/13/2017: Entrance into CARF by volunteer appeals.



The Company shall collect credit in the amount of R$ 5.973 thousand (updated to 12/31/2017). Given the amount involved in the demand, the Company does not believe that an unfavorable decision will result in a material adverse effect on its financial condition or results of operations.


Process nº 2009.01.1.057971-6

Jurisdiction 7ª Vara da Fazenda Pública do Distrito Federal



Parties in the suit Federal District and Mills Estruturas e Serviços de Engenharia S.A


Main facts

This is the opposite Embargoes execution by the Federal District, through which to ward off the condemnation that fell to him (repetition of magpie - ISS on lease). The sentence was the unenforceability statements of judicial title, requiring the final award.



The Company will proceed with the ultimate award in the main proceedings, in 2001.01.1.081292-9. There will be the payment of condemnation of the tax, since it comes to motions to stay execution of judicial title by Which the Company was Entitled to receive back the collected ISS in the exercise of leasing activity of movable property. In case of sentence maintenance in Their molds present, there will be need for payment of compensation for legal fees in favor of the Federal District in the import of R $ 1,000.00 (one thousand reais).


Process nº 2004.51.01.004267-5

Jurisdiction 12th Vara Federal do Rio de Janeiro

Instance Second Instance (Sobrestados)


Parties in the suit

Petitioner: Mills Estruturas e Serviços de Engenharia S.A., sucessora por incorporação de JAHÚ INDÚSTRIA E COMÉRCIO. Fileds: Delegado da Delegacia da Receita Federal de Administração Tributária (DERAT) e Delegado da Delegacia da Receita Federal de Fiscalização (DEFIC).


Main facts

This is a Writ of Mandamus aiming away from the increase in COFINS PIS rate imposed, respectively, by Law No. 10,637/02 and 10,833/03, on the grounds of offense to several constitutional provisions.

Chances of loss Probable


The Company will not have to collect the tax credit of R$ 4.376 thousand, as of 12/31/2017, given that the amount involved in the lawsuit was filed in court until September 2005. distributed action on 3/11/2004. Decision favorable 1st instance. Decision of 2nd unfavorable instance. In 07.01.2010 was brought Extraordinary Appeal (RE) against decision of the Federal Regional Court of the 2nd Region (TRF of the 2nd Region). In 2/28/2012, decision was rendered by the Federal Court of the 2nd Region, which recognized the existence of general repercussion on the subject discussed in this action, and sobrestou the case to the judgment of RE No. 570,122. Pending a final decision of the paradigm.

Amount provisioned (if any) R$ 4.376 thousand

Process nº 5240450/2013

Jurisdiction Secretary of Finance of Mato Grosso State (State Administrative Area)

Instance 1st Administrative Instance


Parties in the suit

Petitioner: Mills Estruturas e Serviços de Engenharia S.A. Fileds: Secretaria de Fazenda de Estado do Mato Grosso


Main facts

Release Review Request Concerning the Collection Document No. 981513/53/32/2013 concerning wrongly declared invoices as free goods, hypothesis that reverberated wrongly in the calculation of ICMS estimate. Last progress on 11/4/2013: Delivered Order: "The suspension of payment is granted with respect to Paragraph V, the 467-A Article RICMS / MT TO GPPS for distribution and analysis."



The Company shall collect credit in the amount of R$ 3.949 thousand (updated on 12/31/2017). Given the amount involved in the demand, the Company believes that an unfavorable decision would not cause a material adverse effect on its financial condition or results of operations.


Process nº 0127652-35.2017.4.02.5101

Jurisdiction Federal Government / National Treasury Attorney's Office

Instance 28th Vara Federal/1st Instance


Parties in the suit

Petitioner: Mills Estruturas e Serviços de Engenharia S.A. Fileds: Federal Government


Main facts

Mandate of Security filed with the purpose of guaranteeing the net and certain right of Mills to have its statements of compensation analyzed by the Federal Revenue Service of Brazil. Last progress on 10/27/2017: Injunction granted to suspend the enforceability of the tax credit. The federal government filed an Instrument of Appeal, which was upheld, suspending the effects of the injunction.



The Company shall collect credit in the amount of R$ 3.949 thousand (updated on 12/31/2017). Given the amount involved in the demand, the Company believes that an unfavorable decision would not cause a material adverse effect on its financial condition or results of operations. In addition, the Company believes that the judgment of merit of the writ of mandamus will be favorable.


Labor Process

On December 31, 2017, the Company is defendant in 272 labor claims, on the amount of R$ 23.7 million. Of this amount, R$ 11.1 million was endowed. The labor claims filed against the Company relate to the following matters: (i) payment of indemnifications for material damages; (ii) payment of risk, hazard, transfer and night shift allowances; (iii) length of lunch and shift breaks; (ix) payment of equal pay for equal work; (v) workplace accidents; (vi) re-hiring as a result of the development of professional illness; (vii) recognition of employment relationships; and (viii) existence of subsidiary (or joint and several) responsibility between the Company and its services providers, with respect to outsourced workers employed by such providers and allocated to providing services for the Company. Below, the Company included a structured summary of the major labor claims that it is part:

Process nº 000388-67.2015.5.05.0015

Jurisdiction 5th. Vara do Trabalho de Maceió/AL

Instance 1st. Instance


Parties in the suit

Autor: D.C.B Sought: Mills Estruturas e Serviços de Engenharia S.A.


Main facts

The Claimant filed suit pleading for overtime, misuse of function, accumulation, substitutions, vehicle wear, fuel, vacation, transfer additional, farewell, normative fine, 477, 467.



Payment of amounts claimed, which updated up to 12/31/2017, amount to approximately R$ 1.051 thousand. Given the amount involved in the demand, the Company believes that an unfavorable decision would not cause a material adverse effect on its financial condition or results of operations.


Process nº 0002070-07.2014.5.09.0084

Jurisdiction 22nd. Vara do Trabalho de Curitiba/PR



Parties in the suit

Autor: M. A. J. D. A. Sought: Mills Estruturas e Serviços de Engenharia S.A.

Amounts, goods or rights involved R$ 590 thousand on 12/31/2016

Main facts

Sentence sentenced Mills to pay the fold 23 days of vacation and compensation for moral damages in the amount of R$ 70 thousand. Current position: Brought ordinary appeal. Awaiting trial.



The Claimed shall pay to the former employee, of the value of enforceable as compensation for moral damages and folded vacation, updated to 31/12/2016, reach the amount of approximately R $ 133 thousand. Awaiting judgment of the ordinary appeal, which can interfere with the conviction installments.


Process nº 0117200-48.2008.5.17.0002

Jurisdiction 2nd Vara do Trabalho de Vitória/ES



Parties in the suit

Autor: Sindicato dos Trabalhadores nas Indústrias Metalúrgicas Mecânicas de Material Elétrico e Eletrônico no Estado do Espírito Santo – SINDIMETAL Sought: Mills Estruturas e Serviços de Engenharia S.A. e Arcellormittal Brasil S.A.


Main facts

The union author postulates the conviction of the defendants to pay commuting time, the argument that, every day, or every scale of toil, the opportunity of joining the drudgery, and also during office hours end, replaced would, by considerable time (fifty-five to seventy minutes every day), to provide its services makers, on the way between the gate of the industrial unit of the second defendant and the construction site (where would the point marking), and vice versa, this route it would be difficult to access and devoid of regular public transport, other means not providing the workers for said displacement but the transportation provided by the defendants. The defendants denied the peremptory manner that the time consumed by substituted in the path taken in the inner area of the plant may be the one alluded to in the play ticket, saying he did not spend fifteen minutes a day, at most, and say they are surprised by the claim deducted in these proceedings because the union author have been responsible for making collective norm that literally repels nature commuting the distance traveled by such replaced in their facilities. In the ruling the judge granted extraordinary twenty minutes per day of effective service, provided increases of collective norms and reflexes and law integrations given the customary character of their provision to both condemning the defendants, the second, in the alternative. Decision upheld by the courts, including the TST. Last Progress on 09/21/2017: Decision of the Appeal of SINDIMETAL recognizing the right of the union to execute the sentence handed down in the class action suits. The proceedings were referred back to the original process.



The Company shall collect credit in the amount of R$ 1.277 thousand (updated to 12/31/2017). Given the amount involved in demand.

Amount provisioned (if any) R$ 1.277 thousand

Process nº 00000801420115020384

Jurisdiction 4th Vara do Trabalho de Osasco

Instance Superior


Parties in the suit Autor: Espólio de A. V. F. Defendant: Mills Estruturas e Serviços de Engenharia S.A Amounts, goods or rights

involved R$ 1.316 thousand on 12/31/2017

Main facts Action involving claim for compensation for material and moral damages for the death of the worker hiccup. The lawsuit was dismissed in 1st instance, but the decision was revised and amended by the Regional Court, which ordered the Company to pay a compensation for moral damages over a lifetime monthly pension for the widow. The Company appealed to the Superior Court, and is still waiting for final decision.



According to its legal advisors, if maintained the decision of the Regional Labor Court - SP, the Company shall pay to the former employee Estate the estimated amount of R$ 1.204 thousand on 12/31/2016. It has fired the liability insurance company. Last progress: In 04/25/2015 concluded for voting with Min Claudio Mascarenhas Brandão. In 10/20/2015 issued settlement sentence in judgment provisionally enforceable.


Process nº 0010445-27.2014.515.0137

Jurisdiction 3rd Vara do Trabalho de Piracicaba



Parties in the suit Autor: V. D. S. D. e Outros Defendant: Mills Estruturas e Serviços de Engenharia S.A Amounts, goods or rights

involved R$ 1.515 thousand on 12/312016

Main facts Action involving claim for compensation for material and moral damages for the death of the worker in a typical work accident (bridge fall over the river Piracicaba). The action was upheld in part in 1st instance, being the Mills ordered to indemnify the claimants for damages (R$450 thousand) plus a monthly pension. Last progress: On 07/08/2017, Mills filed an appeal. Awaiting judgment.



The Company will be ordered to pay the indemnity of R$ 1,515 updated up to 12/31/2017. The lawsuit was partially dismissed and the claimants (wife and children of employee Adalto - deceased) were granted compensation for moral and property damages resulting from the death of the worker in the Rio Piracicaba accident. There is a chance of (small) reversal or reduction of the indemnity values, considering that the worker's salary was not high.


Process nº 00021450620145030139

Jurisdiction 39th Vara do Trabalho de Belo Horizonte



Parties in the suit Autor: A. C. M. Defendant: Mills Estruturas e Serviços de Engenharia S.A Amounts, goods or rights

involved R$ 589 thousand on 12/31/2017

Main facts Process involving request for reintegration and payment of all salaries and other advantages of the period of remission or compensatory compensation of wages and all other advantages from waiver until the end of the stabilization period; Compensation for non-pecuniary damages and declaration of nullity of a non-compete agreement. . The action was deemed partially valid, and the claimant was granted compensation in the amount corresponding to the salaries and other advantages of the provisional (pre-retirement) period of stability. In the TRT-MG, the decision was maintained. However, we believe there is a chance of reversion, since the TRT has adopted an amplifying interpretation of the conventional clause, which is forbidden according to the TST's understanding. Last progress: The documents sent to Superior Labor Court on 06/13/2017 to adjudicate an Instrument of Appeal in Journal Resource - AIRR



According to its legal advisors, it upheld the action may result in the company's conviction to pay about R$ 589 thousand on 12/31/2017.


4.4 Judicial, administrative or arbitral awards, which are not under confidentiality, in which the company or its subsidiaries are part and whose appellees are administrators or former administrators, owners or ex-owners or investors of the company or its subsidiaries. Not applicable, since the Company or its subsidiaries are not parties to proceedings in which the opposing parties are managers or former managers, controlling shareholders or former controlling shareholders or investors of the Company or its subsidiaries.

4.5 Judicial, administrative or arbitral lawsuits, repetitive or related, non confidential and based on similar legal facts and causes, which are not under confidentiality and which together, are relevant.

Not applicable, since the Company or its subsidiaries are not parties to the repetitive or related processes based on similar facts and legal causes, which are not confidential and that are collectively relevant.

4.6 Repetitive or related judicial, administrative or arbitration proceedings, not Secretive and relevant together

Not applicable.

4.7 Other significant contingencies.

No other significant contingencies relating to this item 4. 4.8 Rules of the country of origin of foreign issuer and rules of the country in which the foreign Company's securities are held in custody, if different from the country of origin.

Not applicable, as the Company is not a foreign issuer.

5. Risk Management Policy and internal controls

5.1 In relation to the risks listed in item 4.1, inform:

a. if the issuer has a formal policy of risk management, highlighting, if so, the organ which approved it and the date of its approval, and if negative, the reasons why the issuer has not adopted a policy.

The Company does not have a formal risk management policy, but is supported by the financial management

processes and by the Finance and Risk Committee, created in November 2016.

The Company has a financial risk management policy, approved by the Board, in accordance with good practices

and consistent with the standards set by Brazilian and foreign regulatory bodies. This policy describes the

company's financial risk protection philosophy and establishes its guidelines

When implementing and practicing this Policy, we aim to ensure:

i) The proactive and continuous management of risks, through anticipation and, when necessary,

protection of unfavorable scenarios, in order to protect the results and assets of Mills;

ii) Consideration of the associated risk-weighted return on investments in Mills' strategy analysis;

iii) Permanent preservation of the financial health of Mills;

iv) Protection of Mills' results and equity against non-compliance with obligations contracted with

counterparties;

v) The ongoing improvement of Mills' valuations by investors, creditors, and rating agencies due to

our conservative financial practices and risk management;

(vi) efficiency and effectiveness in hedging risk exposure by contracting financial instruments or

observing the existence of natural hedges and correlations between the prices of different assets

and markets;

vii) The evaluation of effectiveness and presentation to the Board of Directors annually.

The Company's practice is to constantly monitor changes in the macroeconomic and sectorial scenario that may

influence its activities, by monitoring the main performance indicators and their risk matrix. The Company

analyzes the risks to which it is exposed and which may affect its business, financial condition and the results of

its operations.

The Company has not formalized a general risk management policy, since it believes that the practices adopted

by it are sufficient to deal with the risks to which it is exposed. The Company is in the process of structuring a risk

management function and until the end of 2018 intends to implement a Risk Management Policy approved by the

Board of Directors. The objective of the policy is to establish guidelines and responsibilities to be observed in the

company's risk management process and guidelines for the processes of identification, evaluation, treatment,

monitoring and communication of risks inherent in the business, incorporating the risk vision to decision making,

in accordance with good market practice, preventing its occurrence or minimizing its impact.

b. the objectives and strategies of risk management policy, if any, including:

(i) the risks for which protection is sought;

The risk management practices adopted by the Company seek to protect the main risks that may adversely and relevantly impact the objectives set by the Company's senior management, our reputation as well as our financial

and operating results, which are described in item 4.1 of this Reference Form.

(ii) the instruments used for protection;

The Company is carrying out the mapping of corporate / corporate risks, as well as the actions necessary for its

mitigation.

(iii) the organizational structure of risk management

The financial risk mapping organizational structure is hierarchically composed of the Treasury and Financial Planning areas, the Finance Department, the Company's Board of Directors, the Finance and Risk Committee, and the Board of Directors. The other risks include the management structure: Company's Board of Directors (collegiate), Advisory Committees (Finance and Risk and People and Management) and, finally, the Board of Directors. Risk control policies and procedures are defined directly by the Board of Directors and implemented by the Financial Department. The Board of Directors is also responsible for supervising compliance with these practices. The Board of Directors monitors Risk Management issues, directly by reports made available by the Company's Management, or through its Committees composed of Board members, such as: Finance and Risk Committee and People and Management Committee. To ensure the alignment and uniformity of ethical and moral standards that Mills believes are important to its activities, the Board of Directors approved in May 2015 the Mills Code of Conduct, which should guide the attitudes and behaviors of all stakeholders. contributors. All employees were trained on the new Code of Conduct and signing their membership agreement after their training. With the objective of strengthening ethics and combating fraud in the Company's activities, the “Speak One’s Mind” program was launched in 2015, which consists of a denunciations channel managed by a specialized company and can be used by all employees to report unethical situations and / Or illegal in a confidential and anonymous manner. All reports are ascertained and directed in accordance with internal policies and current legislation. The Company also has available a communication channel for the external public to clarify doubts, criticisms, suggestions and denunciations.

In November 2016, the Finance and Risk Committees and the People and Management Committees were created to make the Board of Directors more efficient, strengthening the relevant discussions with sound recommendations, and assisting in the performance of its legal and statutory functions. The Finance and Risks Committee, as an advisory body, has the purpose of making the Board's work more technical and efficient, enhancing relevant discussions with sound recommendations, issuing recommendations to the Board on risks and strategies to be adopted by the Company, accompanying the execution of the And assisting in the performance of the legal and statutory functions of the Board. The Finance and Risk Committee follows the risk matrix prepared by the Company. The purpose of the People and Management Committee, as an advisory body, is to: (i) prepare, regularly review and improve human resources and personnel management policies, (ii) recommend general remuneration criteria and benefit policies for employees and managers of the Company and of controlled companies, directly or indirectly (if applicable); and (iii) assist the Board of Directors in the exercise of its duties.

c. Adequacy of operating structure and internal controls to verify the effectiveness of the policy

adopted

Currently, the Company does not adopt a formal risk management policy nor an organizational structure or internal control systems specifically aimed at verifying the management of the risks indicated above, since it understands that the practices adopted by it are sufficient to deal with the risks to which it is exposed. Exposed. Mills has an Internal Ethics Committee, which is responsible for judging the most serious breaches of the Mills Code of Conduct and imposing appropriate disciplinary sanctions. The Internal Ethics Committee is composed of a multidisciplinary team consisting of members from the following areas: HR, Legal and Board. For complaints involving the Board of Executive Officers, the Committee shall be composed of a member of HR and the Chair of the Board of Directors. The Ethics Committee shall be convened on the occasion of a complaint, evidence of misconduct or on the initiative of the members of the committee, and minutes of the meetings shall be kept In the fiscal years ended December 31, 2015, 2016 and 2017, the independent auditors' reports did not identify any relevant deficiencies in said controls.

5.2 In relation to market risks indicated in item 4.2, inform:

If the issuer has a formal policy of managing market risks, highlighting, if so, the organ which

approved it and the date of its approval, and if not, the reasons for which the issuer has not adopted

a policy.

a.

Mills does not have a formal policy of managing market risks. The Company formalized a market risk

management policy; understanding that the practices adopted by it are sufficient to deal with the risks it is exposed. Risk management is carried out by the Financial Department, under policies approved by the Board of Directors, if applicable. The Financial Department identifies, evaluates and protects the Company against possible financial risks in cooperation with the Company's operating units. The Finance Department establishes principles for overall risk management, as well as for specific areas such as currency risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative and investment of excess liquidity. Management is responsible for establishing and supervising the Company's risk management structure. The Board of Directors monitors Risk Management through the Finance and Risk Committee or directly through reports from the Company's Senior Management, which is responsible for developing and monitoring risk management policies. The Finance and Risk Committee has as its relevant scope of action the risk analysis of the following points: level of leverage, dividend policy, purchase/sale of securities issued by the Company and investments.

b. The objectives and strategies of the market risk management policy, if any, including:

(i) market risks for which protection is sought

As stated in item 4.2 of this Reference Form, the Company's activities expose it to various market risks, including risks of interest rate and monetary, credit risk, currency risk and liquidity risk. The risk management program

focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on the

Company's financial performance. In particular, the Company seeks protection against the risks of changes in exchange rates and interest rates.

Asset protection strategy (hedge)

(ii)

In order to protect the assets from exposure to commitments in foreign currency, the Company has developed a strategy to mitigate such market risk. The strategy when applied, is carried out to reduce the volatility of the

desired cash flow, ie the maintenance of the planned fund disbursements.

Mills believes that the management of these risks is fundamental to support its growth strategy without potential

financial losses reducing its operating results, as the Company does not wish to obtain financial gains through the use of derivatives. Risk management in foreign currency is made by the Management and Financial

Management, that assess the possible risk exposures and establish guidelines to measure, monitor and manage

the risk related to the Company's activities.

The Company intends on using financial derivative instruments locally and abroad to manage the exchange and

interest rate fluctuation risks. In accordance with the accounting principles generally accepted in Brazil, the derivative contracts are going to be recorded in the balance sheet based on the fair market value recognized in

the revenue’s statements, unless in cases when the specific hedging criteria are met. The market value

estimations are going to be held on a specific date, usually based on the mark-to-market.

Instruments used for asset protection (hedge)

(iii)

The Company enters into derivative transactions, normally swaps and NDFs (Non Deliverable Forwards), with financial institutions line (credit risk rating brAAA - national, Standard & Poor's or similar), to ensure the agreed commercial value at the time of ordering the goods to be imported. Similarly, swaps and NDFs contracts must be hired to ensure the flow of payments (amortization of principal and interest) of loans in foreign currency. Under the Company's bylaws, any contract or assumption of obligation in the amount exceeding R $ 10,000,000.00 (ten million Reais) must be approved by the Board, unless foreseen in the Business Plan. To less than R $ 100,000.00 (one hundred thousand reais), with maturity of less than 90 days, it is not necessary to contract hedge operations. Other commitments are to be protected against currency exposure. Swap transactions and NDFs are to convert to actual future financial commitments in foreign currency. At the time of hiring these operations the Company minimizes the currency risk equaling both the value of commitment and the exposure period. The cost of contracting the derivative is linked to interest rates, normally the percentage of the CDI (interbank deposit certificate). Swaps and NDFs maturing less than or the final maturity of the commitments may, over time, be renegotiated so that their final maturity matches - or closer - the final maturity of the commitment. Thus, on the settlement date, the result of the swap and NDF may offset part of the impact of the exchange variation of the foreign currency the real, contributing to stabilize the cash flow. Derivative instruments are contracted by the Company to certain imports of equipment in the interval between placing the order and the corresponding nationalization, against risks of fluctuations in exchange rates, which are not used for speculative purposes.

(iv) Parameters used to managing these risks Regarding the exchange rate risk, The Company's policy is to not be exposed to any commitments in foreign currency. For the interest rate risk, the Company’s policy is to operate with floating interest rates, since their revenues also grow along with inflation. The Company does not use protection against the inflation risk caused by momentary mismatch between its revenues and costs.

It is noteworthy that the calculation of the monthly position of the derivative contracts is done according to the

methodology of fair value, and are evaluated by calculating their present value by using market rates that are impacted on the dates of each calculation. This methodology, widely used, can present monthly distortions in

relation to the derivative curve hired, however, the Company believes that this methodology is the best to be applied, since it measures the financial risk if necessary the early settlement of the derivative.

The monitoring of commitments and monthly assessment of the fair value of derivatives for monitoring the

financial results and the impact on cash flow as well as to ensure that the initially planned objectives are

achieved. The calculation of the fair value of positions is available monthly for management monitoring.

The Company proves the effectiveness of these instruments based on the methodology "Dollar offset", which is

commonly used by participants in the derivatives market. This methodology is to compare the present value of future net foreign currency exposures, commitments assumed by the Company with derivatives contracted to

such hedging.

The Company's policy is to reduce the cash risk related to exchange variation since the majority of its operations

are denominated in Reais. On December 31, 2017, the Company presents foreign exchange exposure or open

derivative instruments, related to NDFs on equipment exports as described in notes 10 and 35.3 of the Financial Statements as of December 31, 2017 and 2016.

For the year ended December 31, 2016, there was no ineffectiveness recognized in the income arising from the Company's hedging transactions.

(v) If the Company uses various financial instruments with various objectives for asset protection (hedge) and what these objectives are

The Company operates financial instruments in order to maintain the price of imported equipments and, consequently with foreign currency prices, in Brazilian reais, solely for hedge purposes.

The Company's policy not to participate in any trading derivatives for speculative purposes.

(vi) Organizational structure for risk management control

The risk control politics and procedures are defined directly through the Company’s Board of Directors and are implemented by the Company’s Executive Officers. The Board of Directors are also responsible for monitoring the fulfillment of these practices.

It is noteworthy that all contracts with possible clauses for derivative instruments or securities to be made are

evaluated by Financial Management in conjunction with the legal team, prior to signing, so there is guidance on

the eventual realization of the effectiveness tests , establishment of accounting policies to be adopted and the methodology for calculating the fair value. The Company currently holds contracts with open embedded

derivatives.

c. Adequacy of the operational structure and internal controls to verify the effectiveness of the adopted policy

Currently, the Company does not adopt an organizational structure or internal control systems specifically aimed at verifying the management of the risks indicated above, since it understands that the practices adopted by it are sufficient to deal with the risks to which it is exposed. However, in the future, the Company will implement specific policies for risk management.

In the fiscal years ended December 31, 2015, 2016 and 2017, the independent auditors' reports did not identify any deficiency of said controls.

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 degree of efficiency of such controls, indicating

any imperfections and measures adopted to correct them.

The board of the Company believes that its internal controls and trade policies, operational, financial, tax and accounting and human resources are adequate to ensure the preparation of reliable financial statements.

b. Organizational structures involved

The financial statements are prepared by an area belonging to the Financial Management and Investor Relations. The information is reviewed by the area manager, Financial Planning Manager and the Financial and Investor Relations Officer, President, Finance and Risk Committee, Board of Directors and by the Fiscal Council, in addition to being submitted to the independent audit process.

Thus, the Company believes that it discloses reliable, consistent and timely information to the market.

All of the Company's organizational structures are involved in internal control practices, whether Business Units are business support areas.

c. If and how the effectiveness of internal control is supervised by the issuer's management, indicating the position of the persons responsible for such monitoring.

The effectiveness of internal controls is supervised by management constantly and reviewed at least annually by the Board and Board of Directors, upon the issuance of Control Deficiencies of Internal Communication by the Independent Auditors.

d. Deficiencies and recommendations on internal controls included in the detailed report prepared and sent to the issuer by the independent auditor, in accordance with regulations issued by the CVM that deals with the registration and the exercise of independent auditing activity.

1.1 Suppliers - Balances long overdue

Situation observed

On December 31, 2017, we verified that the balances of long-term suppliers (domestic and foreign) over 365 days were R $ 598 thousand.

Recommendation

We recommend that the Company make a reconciliation of the accounting balances in a timely manner, avoiding the collection / recognition of financial charges on the balances in arrears.

1.2 Registration of Invoices for service rendering outside the period of competence

Situation observed

We identified an invoice referring to the surveillance service of December 2016, registered in January 2017.

Recommendation

We recommend the implementation of preventive controls that allow the analysis and recognition of expenses within the appropriate period of competence.

Possible effects

Presentation of accounting information in disagreement with accounting practices with regard to the period of competence.

1.3 Need for detail in the description of calls for reclassification of expenses by the MillDesk system Situation observed As of April 2017, the Company implemented an electronic channel called "MillDesk", which among other functions centralizes requests for reclassification of accounting records. Through the reclassification requests created in MillsDesk, we did not identify detailed information about the invoice initially recorded, basically the amount to be reclassified. Recommendation We suggest that the employee, when requesting the reclassification of an accounting record in the electronic channel "MillDesk", provide all the information so that the original release can be traced, for example: invoice or purchase order number and avoid duplicate reclassifications for same invoice. Possible effects Possibility of launching reclassifications in duplicate, for the same invoice.

1.4 Timely recognition of write-off of property, plant and equipment

Situation observed

In February 2017 we identified the accounting record in the net amount of R $ 706 thousand referring to the write-off of property, plant and equipment, due to the loss of 7 machines rented to customers in 2016. Recommendation We recommend that the Company implement controls that allow a timely communication between the areas and the accounting record of the write-off of property, plant and equipment to be performed within the correct period of competence. Possible effects The lack of communication timing between the Company's areas may cause distortions in the recognition and presentation of the accounting balances.

1.5 Presentation of accounts receivable relating to lease assets in the Statement of Cash Flows Situation observed We have identified that the amounts received during the year related to the receivables from lease assets are presented together with the other receivables of the Company in the "accounts receivable" account in the cash flow statements of the cash flow statements (DFC). Recommendation We recommend that the amount received during the year related to accounts receivable from the lease assets be presented in a specific line in the operating flow of the Company's cash flow statements. Possible effects Distortions and / or inaccurate valuation of the effects (cash inflows / outflows) occurring in the year related to leasing assets, since the acquisition of leasing assets are already presented in the operating flow of the Company's cash flow statements, which will allow the comparability and adequate evaluation of the impact on the Company's cash flow related to the movement of the leasing assets.

1.6 Absence of monitoring controls on the service rendering contracts of the Company's legal advisors.

Situation observed

We identified four law firms that sponsored lawsuits involving the Company, but we were informed by the Company's legal department that these law firms ceased to provide services to the Company, but we did not identify any evidence the termination of the service contract and / or formal communication for the continuity of the evaluation of the legal / administrative processes that were under the care of these third parties.

Recommendation

We recommend the implementation of controls to monitor the service rendering contracts of the Company's legal advisors and timely evaluation of the legal and administrative processes that are under the care of these service providers.

Possible effects

Inaccurate assessment of the Company's contingencies and inadequate presentation of the accounting balances in the financial statements. 1.7 Divergence between the position of the lawyer and the contingency control of the Company

Situation observed

During the process of circularization of lawyers, we identified some cases that were answered by the external attorneys and that were not presented in the Company's controls. Recommendation

We recommend that the Company implement controls to reconcile in a timely manner the evaluation of all processes (administrative / judicial) with its control of causes, ensuring the integrity and precision of the contingencies involving the Company. Possible effects

Accounting for the contingent liability or disclosure of causes with a possible probability of loss less than the real.

1.8 Actuarial Liability - Post-employment benefit

Situation observed

On December 31, 2017, the Company performed the initial recognition of the actuarial liability related to the post-employment benefit in the gross amount of R $ 8,902 directly against shareholders' equity, not recognizing the effects of current service cost and interest on the obligation actuarial result in the result for the year 2017, in the amount of R $ 963 thousand.

Recommendation

We recommend that the Company make the accounting records within the appropriate period of competence and annually review the measurement of the actuarial liability related to the post-employment benefit.

Possible effects

Inadequate measurement, accounting recognition and presentation of the actuarial liability referring to the post-employment benefit.

e. Management comments on the shortcomings identified in the comprehensive report prepared by the independent auditor and on the corrective measures taken

1.1 Suppliers - Balances long overdue

The main components of this balance are the following suppliers: (i) Strukturas, which has an outstanding balance for R$ 407 thousand related to the purchase of property, plant and equipment for the year 2014. These are imported equipment that suffered damages and Construction Directorate is in negotiation with the supplier to extinguish the debt, still without a definitive solution; and (ii) Mills SI (current Priner), which has an outstanding balance in the amount of R$ 101 thousand referring to the invoicing made by Mills SI against Mills as compensation for Mills' billing against PCP, due to delays in the transfer of the contract, which was not effected due to internal problems of the client in 2014. The invoices of the PCP are also open. If the matter is not resolved within the 5-year limitation period, the balances will be written off.

1.2 Registration of Invoices for service rendering outside the period of competence

The Company normally observes this situation during the monthly accounting closings. In order to recognize accounting facts, the accounting department performs monthly detailed analysis of recurrent expenses (rentals, electricity, water, car rental and computer equipment, conservation, cleaning and surveillance, etc.) and provisions the amounts whose notes will be received in the following period. Therefore, the Company understands that the financial reports adequately reflect the operations, mitigating eventual nonconformities, which have not been relevant.

1.3 Need for detail in the description of calls for reclassification of expenses by the

MillDesk system.

We will ask the IT department to include the information pertinent to the process (eg invoice numbering, requisition / purchase order) within the MillDesk tool. In anticipation of the definitive systemic solution, which we expect to see concluded by the third quarter of 2018, we implemented in April 2018 the analysis of the so-called open reclassifications, aiming at not having equivocations in the process, as a duplication of reclassification.

1.4 Timely recognition of write-off of property, plant and equipment

This event was atypical, as we were negotiating to effect the collection of the refund with the client. In addition, we report that the write-offs of sales of our fixed assets are automatically and simultaneously processed in SAP AA (accounting) and ETM (operational control) modules, being analyzed monthly by the Accounting Sector. In relation to manual casualties, they only occur in the cases of scrap and casualty sales. These losses are processed exclusively by the Accounting Department, after receiving the list of goods to be downloaded sent by the Business Units linked to the invoices for the sale of scrap and for the timely receipt of the documentation of the process, including police report, in case which is sent in a timely manner by the Business Units and Treasury, which is the insurance management area of the Company.

1.5 Presentation of accounts receivable relating to lease assets in the Statement of Cash

Flows

We understand that there is no need to change the way of disclosure because, in our understanding, the disclosure of the way it is done meets the information needs for the Company's financial management purposes and information from the investors. In addition, we inform that we have not received any questioning in this regard from the Board of Directors and Investors. We also inform that the accounts receivable from sale of property, plant and equipment are contained in the total accounts receivable of Mills, in the "net cash provided by operating activities" group, as well as the amount of property acquisitions of property, plant and equipment leased.

1.6 Absence of monitoring controls on the service rendering contracts of the Company's

legal advisors.

We have not been able to contact the offices of Nagem and Marques Advogados Associados and Lins e Silva Advogados, in spite of several attempts. Mills Law is following the processes that are active polo, even without having formally assumed the sponsorship of the cases.

The processes under the sponsorship of the offices Calcado Advogados and WAC Assessoria are also active poles and are archived. The Company will formalize the closing of the contracts until May 31, 2018.

There is no risk of improper presentation of the accounting balances in the financial statements.

1.7 Divergence between the position of the lawyer and the contingency control of the

Company

The Company has control of the administrative / judicial processes and reconciles monthly all the processes with the controls sent by the lawyers. In some of the above cases, one-off errors were detected by the employee responsible for compiling the data, which were corrected in March 2018.

1.8 Actuarial Liability - Post-employment benefit

Management decided to recognize the effects of cost of current service and interest on the actuarial obligation of 2017, in the amount of R $ 963 thousand, together with the portion of previous years, as an adjustment to shareholders' equity in 2017, for not there is sufficient materiality to justify the change in the result already presented to the Board of Directors. As from 2018, all amounts related to the cost of the current service and interest will be duly recognized in the result.

5.4 Inform if compared 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 yet, any reduction or increase in expectations issuer's exposure to such risks

In the fiscal year ended December 31, 2017, there were no events that significantly alter the main risks to which the Company is exposed or the risk management policy adopted. In 2015 and 2016, the uncertainties in the economy and politics impacted the markets where the Company operates and many of its customers reduced investments, discontinued projects and slowed down works. This market behavior directly affected the Company's performance, which was reflected in higher idleness of their equipment and forced a revision in their plans for investment and expansion. With this, the Company reduced its investments in 2015 and 2016 to the new reality of the market and focused its efforts on operational efficiency. If these prospects remain in 2017, the Company's operations may continue to be affected.

5.5 Other information that the Company deems relevant.

There is no further relevant information about this item 5.

6.1 / 6.2 / 6.4 - Constitution of the Company, Company Lifetime and Date of registration with the CVM

Date of the Constitution of the Company

Constitution of the Company

Country of the Constitution

Company Lifetime

CVM Registration

12/01/1980

The Company was established on December 1, 1980 as a limited liability company. On January 29, 2009, the Company’s shareholders approved a corporate transformation of the Company, which became a privately held corporation. The first company of Mills’ group, named Aços Firth Brown SA was established in 1952 in the city of Rio de Janeiro, State of Rio de Janeiro, in the form of privately held corporation.

Brazil

Undetermined.

04/14/2010

6.3 Brief Company History

The Company was formed in 1952 by the Nacht family, as a scaffold and shoring company which provided services to the civil construction sector. Mr. Andres Cristian Nacht was a member of the Company’s management team from 1969 to 1998, being President Director from 1978 until 1998. In 1998, Mr. Andres Cristian Nacht became Chairman of the Board of Directors of the Company, position that occupies until this Reference Form’s date. In the 70’s and 80’s, the Company had substantial growth due to the significant civil construction and industrial sectors expansion in Brazil. Among its activities from this period can be highlighted the construction of the Rio-Niteroi Bridge (1971), the Itaipu Hydroelectric Plant (1979) and the first Brazilian oil drilling platform (1983), among other projects.

During this period the Company made important partnerships with international companies that cooperated with the

Company’s development. From 1974 to 1986, GKN plc, a large British conglomorate, was the Company’s

shareholder, strengthening the beginning of good governance and credibility. In 1980, the Company signed a

partnership with the Canadian company Aluma Systems Inc., the Aluma Systems Concrete Forms and Formwork

Ltda., which had as main objective the introduction of aluminum formworks in the civil construction sector in Brazil

which lasted until 2001.

In the 90’s, while seeking to expand the Company’s portfolio of services, it made new strategic partnerships. In 1996, the Company entered into a licensing contract with the German company NOE-Schaltechnik Georg Meyer-Keller GmbH, to produce and supply modular steel and aluminum panels formwork to the Brazilian civil construction market. In 1997, the Company entered into a joint venture partnership with the American company JLG Industries, Inc., to begin activities in the equipment rental sector in Brazil. In 2001, the Argentine company Sullair Argentina S.A., replaced JLG Industries, Inc. as the Company’s partner in the in the industrial equipment rental venture, and subsequently acquired its stake in 2003. In 2007, the private equity funds, Peninsula FIP, managed by IP, and the Natipriv Global L.L.C., managed by the Axxon Group, became the Company’s shareholders, acquiring, each one, 10% of the Company for R$ 20 million. The resources from these investments were used, mainly, to acquire equipment. In 2008, the Company returned to its activities in the rental unit in an organic way, with the establishment of the Rental business unit, and suspended the operations of its Events business unit, which was responsible for providing temporary structures, such as outdoor stages and grandstands for the sports and entertainment segment, as an objective to focus on the segments where it has competitive advantages. Also in 2008, the Company acquired Jahu Indústria e Comércio Ltda. (Jahu), which became the Real Estate business unit, focused on providing engineering services to the residential and commercial civil construction industry, complementing its activities in the Heavy Construction segment.

The Company’s IPO was on April 2010, with a transaction totaling R$ 685 million, of which R$ 411 million related to the primary offering that, consequently, were used to enable its growth plan. Shortly after the offer, the Company’s free float was of 48%. In October 2010, after the expiration from the lock-up period, due to the IPO, the private equity funds, Peninsula FIP and Natipriv Global L.L.C., sold the joint participation of 6.2% of the Company’s capital, increasing its free float to 57.2%. On January 19, 2011, the Company entered into a purchase and sales agreement to acquire 25.0% of the voting and total capital stock of Rohr S/A Estrutura Tubulares (Rohr), a privately held company specialized in access engineering and solutions for civil construction, for R$90.0 million. This strategic acquisition will enable the Company to broaden its exposure to the sectors it serves, especially in the areas of infrastructure and the oil and natural gas industry. In September 2011, there was a rise in the stake held in Rohr to 27.5%, resulting from the repurchase by Rohr of 9% of its shares held as treasury stock.

In May 2011, the Company entered into a purchase and sales agreement to acquire 100% of the voting and total

capital stock of GP Sul, one of the largest players in the suspended scaffold rental market to residential and

commercial construction in the state of Rio Grande do Sul, for R$5.5 million, which was merger into the Company in

August 2011. This strategic acquisition, according to Management’s opinion, enabled the Company to become the

leader in the suspended scaffold rental market in the state of Rio Grande do Sul and to broaden its exposure to the

residential and commercial construction market in the South region, in line with the geographic expansion plan of the

Real Estate business unit.

In July 10, 2013, the company entered into an agreement for the sale of its Industrial Services business unit for a total sum of R$102 million, through the sale of their participation in the company Albuquerque Participações Ltda. On November 30, 2013, the transaction was completed and the Company recorded a net gain of R$8,3 million. This sale was made in line with the Company's strategy to focus on businesses where their skills are able to generate greater value for its shareholders and customers. Therefore, the Company ceased to operate in the Industrial Services sector where they were offered access services, industrial painting, surface treatment and thermal insulation, both during construction and in the maintenance phase of large industrial plants.

On April 19, 2016, the Board of Directors resolved on the homologation of the capital increase of the Company, by private subscription of 47,528,517 new common shares in the total amount of R$ 125 million, approved at the meeting of the Company's Board of Directors, held on February 5, 2016.

On April 7, 2016, the Company's controlling shareholders, Nacht Family, entered into a Shareholders Agreement with the Axxon Brazil Private Equity Fund II (Axxon). The agreement provides, among other provisions, clauses relating to (i) the exercise of voting power and control; (ii) appointment of directors and members of committees; (iii) the transfer of shares and preference to acquire them; and (iv) the restriction or binding of voting rights of members of the board of directors. On July 20, 2016, Axxon became the holder of 7% of the Company's capital stock, acquiring as a consequence the political rights set forth in the shareholders' agreement. On January 16, 2017, Axxon did not become the holder of shares representing 13% of the Company's capital stock, thus not meeting the conditions set forth in Clause 3.2.2 of the shareholders' agreement executed on April 7, 2016 between Axxon and the controlling shareholders of the Company within the period provided for in the aforementioned clause, which has expired in this date. Consequently, Axxon ceased to definitively enjoy the political rights set forth in Clauses 4.4, 4.5, 11.3.2 and 11.5 of the shareholders' agreement. The other provisions of the aforementioned Shareholders' Agreement remain unchanged.

On March 22, 2017, the Debenture Holders' General Meeting approved the amendment of the terms and conditions of the respective deeds, including (i) a change in the formula for calculating financial indices (covenants), (ii) the granting of additional guarantees, (iii) the alteration of certain early maturity assumptions and (iv) an increase in the remuneration of debentures.

6.5 Bankruptcy filings based on relevant values, judicial or extrajudicial recovery of the Company

Not applicable.


There is no further relevant information about this item "6”.

7.1 Summary of Company and Subsidiary activities

[Orientações CVM: Neste item devem ser prestadas ao mercado as informações úteis e necessárias para que o investidor possa

conhecer as atividades desenvolvidas pelo emissor e suas controladas, tais como objeto social do emissor, mercado de atuação,

diversificação geográfica, dentre outros. A descrição das atividades deve abranger não somente o que está no objeto social,

mas, no caso de sociedades de economia mista, também o que foi disposto em eventual lei que autorizou a criação da

companhia. Nesse sentido, a companhia deve evidenciar, além de suas atividades regulares: (a) descrever sua atuação em

atendimento às políticas públicas (incluindo metas de universalização), incluindo os programas governamentais executados no

exercício social anterior, os definidos para o exercício social em curso, e os previstos para os próximos exercícios sociais,

destacando os programas governamentais criados; b) indicar, relativamente ao que a impactar e considerando o disposto nos

planos e leis orçamentárias aplicáveis, os investimentos, custos e receitas não auferidas, bem como os recursos envolvidos, as

fontes e condições de financiamento, inclusive quanto a eventual dotação orçamentária, das políticas públicas descritas no item

(a); c) divulgar estimativa dos impactos das políticas públicas descritas no item (a) no desempenho financeiro da Estatal, ou, se

for o caso, declarar que não é realizada análise de impacto financeiro das políticas públicas acima referidas; e d) indicar o

processo de formação de preços e as regras aplicáveis à fixação de tarifas.]

The Company holds as purpose: (a) the rental, commercial intermediation and sale, with or without assembly, of mobile

goods of its own manufacturing or acquired from third-parties, comprising forms, shoring, scaffolding, pressurized

dwellings, floors, structures and similar equipment, steel, aluminum, metal, plastic and wood, as well as its parts,

components, accessories and raw materials; (b) the rental, with or without an operator, commercial intermediation and sale

of aerial work platforms and telescopic handlers, personnel training for the respective equipment’s operation, maintenance

and technical assistance of its own equipment or third-party; (c) import and export of the above described goods, including

its parts, components and raw materials; (d) the provision of painting, blasting, thermal insulation, surface treatment,

passive protection against fires, cargo movement, boiler, refractory, inspection and nondestructive testing, including the

access by rope used by the industrial climbers and other equipment and services inherent to such activities, as wll as

manufacturing, assembly and marketing of proprietary products for such activities; (e) consulting and sale of engineering

projects; (f) roofing construction in structured tent with closing a plastic or similar; (g) low voltage electrical installat ions;

and (h) participation as a shareholder or partner in other companies or corporations.

The Company is a complete engineering solutions company with the capacity to plan, integrate services and products and

provide support for the most varied types of projects in the civil and industrial sectors. It is present throughout Brazil,

providing a closer relationship with the customer and faster service. The knowledge of the team of professionals, combined

with the diversified experience and international partnerships with leading companies in the market, allows to deliver

customized solutions and with the most advanced technology adapted to each need.

The Company believes that it is one of the largest providers of specialized engineering services in Brazil and is a leader in

the supply of concrete forms and tubular structures and in the leasing of motorized access equipment in the Brazilian

market. The Company offers its clients specialized engineering services, providing differentiated solutions, specialized

labor and essential equipment for major infrastructure projects, residential and commercial construction and the industrial

sector. Custom engineering solutions include the planning, design, technical supervision and implementation of temporary

structures for civil construction (such as concrete forms, shoring and scaffolding) and motorized access equipment (such

as aerial platforms and telescopic handlers) as well as Technical assistance and skilled labor.

During 65 years of history, the Company has developed relationships with most of the largest and most active Brazilian companies in heavy construction, residential and commercial construction and industry sector. The Company enjoys strong reputation in accordance to the provision of services on a consistent, timely, reliable, and quality manner, observing the high safety standards.

The services are offered by two business units: Construction and Rental. Construction

The Company estimates, according to data published by the “O Empreiteiro” magazine in 2017, that its business unit is

Brazil’s leading provider of specialty engineering solutions and equipment in revenue. In this unit, the Company’s focus is

directed to large engineering projects, including infrastructure projects toward the logistics’ sectors (specially railways,

underground urban networks, highways, airports, ports and shipyards), social and urban infrastructure (including sanitation

networks) and energy (primarily regarding hydroelectric, thermoelectric and nuclear plants), besides the industrial and

large building construction projects. Such projects are characterized by long-term (usually over one year), usually

developed by the major construction companies in Brazil.

The business unit offers its clients specific and customized engineering solutions for every type of construction, considering all the peculiarities and specificities inherent to the location and complexity of the construction works, with the objective of facilitating the project execution, ensuring safety, cost, speed and schedule compliance optimization. In many situations, due to its vast experience, the Company is looked for by its clients to participate in preliminary studies that will provide structuring for its proposals in the biddings for the construction of large engineering projects.

The main competitive advantages of the Company are its expertise, agility, reliability, quality and safety standards, as well as its ability to provide equipment on a large scale, factors that contribute to the reduction of overall duration and costs from its client’s projects. The Company provides services throughout the Brazilian territory and also in international projects from its customers, providing high value service and providing equipment.

The Company's extensive track record includes participation in several of the largest and most important infrastructure

projects in Brazil, such as the construction of the city of Brasilia, the Rio de Janeiro-Niterói Bridge and the Itaipu

Hydroelectric Power Plant. Recently, the Company participated in the construction of the Ring Road, in São Paulo, the

subway systems in the cities of Rio de Janeiro and Sao Paulo, airports and renovated stadiums or built for the World Cup

in 2014, the hydroelectric plant of Estreito, Jirau and Belo Monte located in northern Brazil, in the João Havelange Olympic

Stadium and Olympic Park in the city of Rio de Janeiro. Typical contractual terms of this business unit ranging from six to

24 months, since the services are critical for a large portion of the construction project.

In order to facilitate the implementation of the solutions that the Company idealizes, it offers customers through leasing

contracts and in some cases selling a wide range of equipment, including concrete formwork and shoring structures,

including projects and technical studies, technical support and training necessary for its correct use. Taking into account

the specific needs of a particular project, there is flexibility to hire the manufacture of specially modeled equipment for the

work in question.

In general, customers use their own employees to implement solutions designed and assembly of the Company's

equipment. However, in the case of more complex assemblies, the client's discretion, company employees may be

allocated for the assembly and disassembly of structures. Rental

The Company has the largest aerial platform fleet in Brazil: pantographic platforms - better known as scissor platforms, articulated boom platforms and telescopic boom platforms, which can reach up to 56m in height. The Company has new and new equipment for sale or lease. The market for aerial platforms in Brazil relies on Mills' more than 60 years of experience in access technologies and solutions for the challenges of construction, commerce and industry. Mills was recognized internationally as the first Brazilian company to receive the IPAF (International Powered Access Federation) certificate as the best training center in the world for operator training. With a highly qualified technical team and certified by the manufacturers, the Company offers technical assistance, in person or remotely. In addition, it counts on the services of control of preventive/corrective maintenance and sale of spare parts of the biggest manufacturers worldwide in all the national territory. The main objective of this segment is to increase productivity and security, it is also offered to customers operating training certified by IPAF (world authority air access) and we serve all the rules of NR 18. The use of aerial work platforms in Brazil has been growing year after year, and an example of this is the increasing use of Mills machines in urban art events. In the International Festival of Urban Art in São Paulo, and Art Rio and Art Rua, in Rio de Janeiro, the platforms allowed the artists access to large panels and gables. Mills has the ideal aerial platform for your challenge, whether for internal work, such as a simple lamp change, inventory or maintenance of air-conditioning installations, or even the assembly of complex industrial plants and civil construction.

The Rental business unit serves the same sectors as the other business units, such as heavy or residential and commercial

construction and industrial construction, as well as other economic sectors, as the automotive, retail and logistics sectors,

among others. Therefore, its client base is diverse, including clients from the other business units. Generally, the Company

rents equipment on a monthly basis, being the average contract length from two to three months, although 18-month or

even longer contracts.

The Company introduced the large-scale use in Brazil of motorized access equipment specific for height purposes in 1997, when it entered into a joint venture agreement with the American company JLG Industries Inc., world leader in access equipment manufacturing, to rent aerial platforms and telescopic handlers, the first joint venture in JLG’s history.

In 1999, the Company introduced the large-scale use of telescopic handlers in the Brazilian market. This motorized

equipment can be used to transport loads to various heights and replaces a number of other pieces of equipment

traditionally used at construction sites, such as cranes, munck trucks and service lifts, among other equipment. In 2001,

Sullair, an Argentine equipment rental company, replaced JLG as the Company’s partner. In 2003, due to unfavorable

market conditions in Brazil and the lack of capital necessary to carry out essential investments, the Company suspended

its equipment rental operations and transferred the joint venture to Sullair.

In December 2007, as part of its diversification strategy and based on favorable market and credit conditions, the Company established its Rental business unit and began renting aerial platforms and telescopic handlers again.

There are more than 60 years of stories and achievements. Mills is proud of all its history and believes that it still has much to conquer, to be always a complete, agile and reliable company for its clients.

Indications and Awards

2012 IAPA Awards: Nominated for the award for Best Training Center. Winner of the Year Access Company Award 2013 IAPA Awards: Nominated as the company that invested in security. Access International: Among the 5 companies of rental access equipment that grew most and the 30th biggest of the world, according the ranking of Acess International 2014 IAPA Awards: Nominated as the Year Access Company Award. IAPA Awards: Winner of the Best Training Center award. PINI Awards: Elected as the best supplier (aerial platforms) and most used product (scaffolding facade and aerial platforms) on PINI Awards. 2015 IAPA Awards: Indicated as pioneer company in Motorized Access PINI Awards: Winner as the Best supplier (aerial platforms) and product most used (metallic molds and aerial platformas) on PINI Awards. 2016 IAPA Awards: Elected as the Best Aerial Platform Instructor in the world. IAPA Awards: Nominated as the Best Training Center of the Year. IAPA Awards: Nominated as the Best Project of the Year. IAPA Awards: Total of 10 nominations in 6 years and 3 awards. PINI Awards: Elected as the Best Supplier and Product Most Used in the categories Aluminum Form and Lift Platform in the PINI Awards

2017 IAPA Awards: Elected as the Best Aerial Platform Instructor in the world. PINI Awards: Highlight Launches (Project Name or Product: Hydraulic Subsequent Balance). Case of Success (Name of the Project or Product: Launching Beams with Trellis Anchored Boom with Alumills Towers)

2018 IAPA Awards: Elected as the Best Aerial Platform Instructor in the world. PINI Awards: Highlight Launches (Project Name or Product: Hydraulic Subsequent Balance). Case of Success (Name of the Project or Product: Launching Beams with Trellis Anchored Boom with Alumills Towers)

7.2 In relation to each operating segment that has been disclosed in the last financial statements at the end of the fiscal year or, where applicable, in the consolidated financial statements, indicate the following information

a. Commercialized products e services

The Company has two business units: Construction and Rental, and basically operates in the infrastructure, real estate, services and industrial markets, performing the following main activities: (a) Rental and sales, including import and export, of tubular structures, shoring and access equipment in steel and aluminum for civil construction, as well as reusable concrete forms, with supply of related engineering projects, supervision and assembly option. (b) Sale, leasing and distribution of aerial work platforms, as well as their parts and components, and technical assistance and maintenance of these equipment. Offered Equipment:

(i) Access: Mills is a pioneer in the supply and development of equipment for access in Brazil, through the Elite System, Mills Ladder, Platform Rack, Mills Lock, Aluminum Floor and Tube Mills.

(ii) Scaffholding: they are versatile equipment, ideal for works in height, and can be used for refurbishment of

façades, interior and exterior of buildings, or in large constructions. Mills is a pioneer in the supply of scaffolding in Brazil and has several types of equipment within this category: Cable Puller, Fencing Scaffolds and Electric Scaffolds.

(iii) Shoring: shoring systems are made up of towers or metal profiles with galvanized steel or aluminum fittings

and parts used to support the weight of a floor while the concrete does not harden and builds resistance. Equipment: Alumills, Metallic Anchors, Peripheral Fork, Bucket Guide, Flying Table, Millstour, TS System, Metal Beams and Trellis M150.

(iv) Formworks: Mills' form systems are the best choice for the construction of wide walls, pillars, galleries and tunnels of the most diverse types, providing more quality, safety and productivity for your work. Equipment: Aluma System, SL 2000, ALU-L, Mills Deck Light, Self-Climbing, Top Mills and Climbing

(v) Aerial Platforms: Electric Scissor Platform, Diesel Scissor Platform, Electric Articulated Boom Aerial Platform, Diesel Articulated Boom Aerial Platform, Telescopic Boom Aerial Platform and Personal Elevator

(vi) Special Systems: this category comprises a set of high technology equipment to meet complex projects such as the construction of bridges and viaducts, providing greater productivity and safety to buildings. Equipment: Successive Swing, Carrelone Mills, Lifting Cars, Fischietti (Lifting System and lateral drive on rails of preformed beams), SM Mills and Trellis Shuttle.

b. Revenue from the segment and its participation in the Company's net revenues

The table below indicates the net revenue from each of the business units and its share in the total net revenue on the

indicated periods:

In R$ million 2015 % of Total

Net Revenue

2016 % of Total

Net Revenue

2017 % of Total

Net Revenue

Net Revenue from Sales and Services 576.1 100.0% 396.6 100.0% 291.3 100.0%

Construction 283.0 49.1% 182.3 46.0% 110.0 37.8%

Rental 293.2 50.9% 214.3 54.0% 181.3 62.2%

b. Profit or loss resulting from the segment and its participation in the Company's net income.

The table below indicates the net income from each of the business unit and its share in the total net income on the

indicated periods:

In R$ million 2015 % of Total Net

Revenue

2016 % of Total Net

Revenue

2017 % of Total Net

Revenue

Profit (Loss) (97.8) 100.0% (99.4) 100.0% (138.4) 100.0%

Construction (94.1) 96.2% (79.6) 80.1% (102.0) 73.7%

Rental 13.6 -13.9% (19.4) 19.6% (32.8) 23.7%

Others¹ (17.3) 17.7% (0.4) 0.4% (3.6) 2.6%

¹ Pro-forma results consolidated data considering the Industrial Services business unit, events and the investment in Rohr.

7.3 Products and services that correspond to the operating segments disclosed in

item "7.2”

a. Characteristics of the production process

[Orientações CVM: Quanto às características do processo de produção (letra “a”) devem ser prestadas, de modo objetivo, as informações necessárias para a compreensão do processo de produção do emissor, incluindo, por exemplo, informações relativas a: origem e detentores da tecnologia utilizada, comparação entre a produção anual e a capacidade instalada, comparação com indicadores de produtividade característicos do setor de atividade, existência de seguros de máquinas, equipamentos, produtos etc., riscos inerentes ao processo de produção que poderão gerar paralisação das atividades, inclusive época destinada à manutenção e outros aspectos relevantes para o melhor entendimento do processo produtivo.]

The Company outsources the entire manufacturing process of the equipment used in its operations. Equipment technology

can be purchased from a company that owns the technology or is developed internally by Mills Engineering. At the time of

manufacture, the Company purchases the raw material, steel and aluminum, and sends it to the manufacturer for

processing. The manufacturer has to be registered as an authorized supplier and to be homologated, the Company

performs engineering and product quality tests to ensure that the manufacturing process is within the standards and

technical standards that regulate the industry. The equipment is sent ready to the Company that starts to rental it, however

the Company is responsible for the inspection of the manufacturing process. Subsequent to manufacturing, upon receipt of

the finished product, the company also performs quality assessments and tests, for activation in its inventory of rent and

sale. The risk involved in the process is some error that is not perceived in the process and the loss of raw material.

After the use of the equipment in the various works, the equipment destined to rental, return to the deposits of MILLS

where the services of maintenance and conservation are carried out, the criteria established by the internal engineering,

based on the national technical standards, are applied. With this, the equipment is made available again for use in new

works.

See item 7.3(e) above.

b. Characteristics of the distribution process

[Orientações CVM: Quanto às características do processo de distribuição (letra “b”), devem ser informados os métodos de distribuição física dos produtos e serviços, incluindo informações sobre o número de agências, lojas, revendedores, frota etc., e ainda, se no processo são utilizadas empresas controladas, coligadas, controladoras diretas ou indiretas ou de propriedade do acionista controlador. Devem ser informados também os tipos de canais de venda utilizados, tais como intermediários, representantes, vendedores próprios etc.]

The Company rents its equipment and provides their services according to the needs from their clients. The Construction business unit had, on December 31, 2017, 7 operational units, located in the states of Bahia, Distrito Federal, Maranhão, Pernambuco, Rio de Janeiro, Rio Grande do Sul e São Paulo. The branch in Minas Gerais is without operating activity (hibernated). On December 31, 2017, the Rental business unit acted through 30 operation units in the states of Amazonas, Bahia, Ceará, Espírito Santo, Goiás, Maranhão, Mato Grosso, Mato Grosso do Sul, Minas Gerais, Pará, Paraná, Pernambuco, Rio de Janeiro, Rio Grande do Norte, Rio Grande do Sul, Santa Catarina, São Paulo e Sergipe e no Distrito Federal. For greater details about our equipment, see item 7.2 above.

c. Characteristics of the markets, in particular:

[Orientações CVM: Em relação ao requisitado na letra “c” devem ser apresentados, de forma objetiva, fatores que influenciam o comportamento dos mercados de atuação da companhia, tais como: benefícios fiscais, situações de monopólio ou oligopólio, subsídios, nível de concorrência, custos de matérias-primas e outras despesas, dependência de tecnologia e mão de obra, utilização de concessões e franquias, legislação especial. ]

(i) participation in each market

The Company believes to be Brazil’s leading provider of specialty engineering solutions and equipment, such as formwork, shoring and scaffolding, and in the access motorized equipment rental for the for the Brazilian market. However, there is no public information about the exact market share of the Company and its competitors.

(ii) Competition conditions in the markets

The Company faces significant competition with respect to all its business units. However, the Company believes it has competitive advantages in different sectors in which it operates, by offering solutions with a high degree of excellence, service capacity and innovation in order to meet or exceed the deadlines expected by potential customers. Construction: The Company believes that in the Infrastructure sector it has a solid leadership position in the market for this business unit. The Company's recognized reputation in the Brazilian market is a very important factor for the success in the activities of this business unit. The Company’s biggest competitive advantage is its vast experience, having participated in the main infrastructure works in Brazil, the size of its fleet and the speed in the answers. The competition is qualified, with companies that have been in the market for quite some time. In the Real Estate sector, the sector responsible for residential and commercial construction in Brazil, is highly fragmented. When compared to the infrastructure sector, projects in this sector are generally spread across different Brazilian cities, are smaller in terms of physical size and have a shorter duration, with the average contractual term being four to six months. With its large regional coverage, the Real Estate business unit is closer to its customers, meeting its needs with agility and with a range of equipment leading to a better fit in the solutions.

In this sector, the attraction of new clients and the growth in the participation in new ventures is essentially due to the reduction of construction costs, preferably accompanied by solutions that reduce the total time of the work and the use of labor.

Rental: Due to the participation in a still minor market with great potential for expansion, the Rental market presents more dynamism, typified by the entry and exit of new companies and high investments of the established competitors.

The Company believes that its Rental business unit is one of the major providers of motorized access equipment, aerial

platforms and telescopic handlers, both for lifting personnel and cargo to considerable heights in Brazil. Besides the lack of

public information about its competitors, the Company believes to be leader in this segment.

The Company believes that its geographical capillarity with 30 branches, its technical assistance team, size and diversity

of the fleet are its competitive advantages.

d. Seasonality

[Orientações CVM: Existindo sazonalidade (letra “d”), deve ser informado o período do exercício social em que esta se concentra, bem como incluída informação sobre o impacto, em percentual, da sazonalidade sobre as contas de resultado. ] The Company believes that there is not seasonality in its business.

e. Key inputs and raw materials: (i) description of the relationships with suppliers, including whether they are subject to governmental control or regulation, identifying the bodies and the respective legislation; (ii) potential dependence on few suppliers; and (iii) possible volatility in their prices To the Construction business units, the raw material necessary for the manufacture of equipment offered by the Company, primarily steel and aluminum sheets, which prices paid for such materials are directly impacted by fluctuations in commodity prices. The Company has a large number of options when choosing its raw material suppliers and the choice is influenced mainly by the charged price.

After purchasing the raw materials, the Company outsources the entire manufacturing process to third parties, as well as subsequent to the assembly. In this manner, all of the equipment manufactured is done by third-parties. Due to the very high quality standards that are needed from the equipment, the Company has very careful restricted selected companies to perform the manufacturing. To catch up with demand, equipment is also imported from China, through carefully verified suppliers, which must be within the Company’s high-quality standards.

Regarding the Rental business unit, the aerial platforms and telescopic manipulators used are acquired from third parties. The criterion that guides the choice of suppliers for these products is based on its quality and on after-sale services. The main suppliers of finished products are JLG, Terex and Skyjack, of whom the Company is partially dependent on, due to the small number of suppliers in the market. Furthermore, motorized components and pieces are acquired from others suppliers, either national or foreign.

Regarding the inputs, gasoline and diesel are regularly acquired for the motorized equipment in the Rental division. For the

Heavy Construction and Real Estate unit, hardboards for the maintenance and industrialization of the equipment are acquired, with the plasticized hardboards used to equip the formwork in the aluminum chassis systems (Mills Deck-Light, Mills Deck and ALU-L), and in the steel chassis systems, (SL 2000 formworks). Additionally, the Company buys spare parts for its motorized equipment from other Brazilian and foreign supliers.

Generally, the agreements with the suppliers are short-term. The charged prices by the suppliers may experience volatility as

a result from the labor prices, and commodities that are used in the equipment manufacturing, especially steel and aluminum.

The Rental Business unit equipment, are impacted by the exchange rate fluctuations. 7.4 Clients accounted for more than 10% of total net revenues of the Company In the fiscal years ended December 31, 2015, 2016 and 2017, the Company had no sole clients accounting for more than 10% of the total net revenue. 7.5 Relevant effects of state regulation on the Company's activities

a. The need for government authorization to exercise the activities and long-standing relationships with the

government to obtain such permits

There is no specific regulation on the activities that the Company carries. The Company does not need to obtain permission or license in addition to those required to all commercial companies.For more information about the judicial, administrative or arbitral not confidential and relevant Company, see item 4.3 of this Reference Form.

b. environmental policy of the Company and costs incurred for compliance with

environmental regulation and, where appropriate, other environmental practices,

including adherence to international standards of environmental protection.

Considering the nature of its activities, the Company does not adopt environmental policy and is not subject to specific environmental regulations. The main environmental impacts of the Company are the maintenance of its equipment, which includes, among others, offset, paint, lubricating oils and washing machines. The Company seeks to mitigate the possible environmental impacts arising from its activities by surveying the aspects and searching for their proper disposal, such as the proper disposal of lubricating oils through separation and disposal in licensed companies. Investments are also made in the water/oil separation systems from the lubrication / washes of the machines and subsequent appropriate disposal with licensed companies. In addition, the Company has products that reduce the environmental impact, mainly the use of new forms, shoring and metallic structures, which reduce the use of wood in the construction process. The equipment that is damaged in the construction work, when classified as improper for reuse, are turned into pieces of smaller sizes or discarded and sent to further recycling. In the discarding, carbon steel pieces are sent to steel makers and turn into other metallic products; aluminum beams and floors are sent for reprocessing in plants, returning to the Company in the form of new products with the same characteristics; and the wooden floors are sent to accredited partners who transform this residue into an energy source.

c. reliance on patents, trademarks, licenses, concessions, franchises, contracts,

royalties for the development of relevant activities.

In case the Company may not use its main brand, Mills, or if such brand loses distinctiveness, the Company may have problems in relationships with their clients to tailor their services and equipment in the market, which may prevent the development from its activities in a satisfactory condition. The development from its activities does not dependent on secondary brands, patents, concessions, franchises and contracts, royalties. The Company has contracts of technology transfer for the exclusive manufacturing of several equipment, as detailed in Item 9.1b. In case any of these contracts are discontinued or the regulation on patents or on the use of technology changes, the Company may have its portfolio of products reduced and its competitiveness affected.

7.6 Countries to which the Company derives revenue a) revenue from the clients assigned to the host country and their participation share in the Company’s total net revenue;

The Company only operates in Brazil. The fiscal year ended on December 31, 2017, 94.06% of the Company's revenue came from clients located in Brazil. b) revenue from the clients assigned to each foreign country and their participation share in the Company’s total net revenue;

In the fiscal year ended December 31, 2017, 5.94% of our revenues came from clients in other countries:

Country %

CHILE 0.01%

REPÚBLICA DOMINICANA 0.13%

EUA 5.80%

Grand Total 5.94%

c) total revenue from foreign countries and their participation share in the Company's total net revenue.

The fiscal year ended on December 31, 2017, 5.94% of the Company's revenue came from clients located outside of Brazil.

7.7 In relation to the foreign countries disclosed in item 7.6, to inform to what extent the issuer is subject to the regulation of those countries and in what way such subjection affects the business of the issuer. Not applicable. 7.8 In relation to environmental policies, indicate: (a) if the issuer disclose social and environmental information; (b) the methodology followed in the preparation of such information; (c) if the information is audited or reviewed by an independent entity; (d) the page on the World Wide Web which can be found this information The Company is in the process design phase, aiming to act sustainably.

The company does not publish sustainability report or similar. Considering the significant increase of transparency about the sustainability issue, the Company is considering formalizing a process of analysis (diagnosis) and action plan to improve its sustainability practices. 7.9 Other information which the Company judges to be relevant. There is no other relevant information pertaining to this item 7.

8.1 Indicate the acquisition or disposal of any relevant asset that does not fit as normal operation in

the issuer's business.

Since 2016, in the Construction business unit, the Company has been taking measures to restructure its

structure, focusing increasingly on the infrastructure market and works that require more complex and cost-

effective engineering solutions. With this, there was the closing of warehouses and sale/scrapping of

equipment, but maintaining the commercial presence at the national level.

In 2016, the Company closed 3 warehouses and 6 warehouses in 2017, ending the year with 7 branches plus

one hibernated.

Restructuring expenses (R$ million) 2015 2016 2017 Closing of branches and organizational changes 9.0 10.1 13.0 Result of scrap sale (resizing of equipment focused on the light real estate market)

0.0 3.7 19.6

Total 9.0 13.8 32.6 Cash Impact 9.0 4.3 3.0 Non Cash Impact

- 9.6 29.6

Revenue of sales of equipments in the Construction business unit as scrap:

In R$ million, except tons 2017 2016

Sales Revenue 5.0 1.9

Write-off (24.7) (5.6)

Net result (19.6) (3.7)

Quantity sold in tons

12,145 5,668

8.2 Indicate significant changes in the manner of conduct of business of the issuer. In the last three years, there was no significant change in the conduct of business in order.

8.3 Identify the relevant agreements entered into by the issuer and its subsidiaries not directly related to its operating activities In the fiscal years ended December 31, 2015, 2016 and 2017, there was no celebration of relevant contracts that were not related to the Company's operating activities.

8.4 Other information which the Company judges to be relevant. There is no other relevant information pertaining to this item 8.

9.1 - Description of non-current relevant assets - others

Description of noncurrent relevant assets for the development of the Company’s activities

a) Fixed assets, including those subject to rent or lease, indicating its location.

Most of the Company’s revenues are generated by the rental and use of equipment, as well the provision of services related to such equipment, including insulation, industrial painting and equipment assembly and disassembly.

The Company also owns several fixed assets for its own use; mainly warehouses to storage the equipment described above, offices, furniture, fixtures, and other general equipment used at the Company’s facilities.

The Company’s main fixed assets are listed in the table below:

Values in R$ thousand

Assets Fiscal year ended December 31,

2015 2016 2017

Accumulated Accumulated Accumulated

Cost Depreciation Net Cost Depreciation Net Cost Depreciation Net

Buildings and Lands 24,211 (2,826) 21,385 24,138 (3,496) 20,642 24,138 (4,166) 19,972

Facilities 8,711 (2,017) 6,694 9,317 (2,860) 6,457 9,863 (3,780) 6,083

Equipment 1,499,502 (555,547) 943,955 1,426,339 (650,320) 776,019 1,259,154 (665,942) 593,212

IT Equipment 16,511 (11,300) 5,211 15,191 (11,986) 3,205 14,934 (13,508) 1,426 Others 43,700 (18,309) 25,391 36,954 (22,214) 14,740 35,066 (16,335) 18,731

Subtotal 1,592,635 (589,999) 1,002,636 1,511,939 (690,876) 821,063

1,343,155 (703,731) 639,424

Imobilization in Resources 1,431 - 1,431 168 (39) 129 304 (39) 265

Total 1,594,066 (589,999) 1,004,067 1,512,107 (690,915) 821,192 1,343,459 (703,770) 639,689

Company’s Facilities

The Company requires, primarily, warehouses to safely and efficiently store the equipment used in its operations. The

Company believes that the location of the warehouses, which covers most part of the Brazilian territory, consists of a relevant competitive advantage, as it is able to rapidly deploy its equipment to its clients at various locations.

The table below shows the Company’s main facilities:

Facility Plot Size Constructed Area Status End of the

lease contract City State Location

Office/Warehouse 36,072 m² 4,159 m² Rented 05/05/2025 Camaçari BA Via Parafuso (BA 535), km 14,

Polo Logístico

Office/Warehouse 13,552 m² 4,360 m² Rented 12/01/2019 Fortaleza CE Rodovia BR 116, 5360 A KM

14 Bairro Pedras

Office/Warehouse 20,000 m² 17,011 m² Rented 10/25/2021 Brasília DF Rodovia DF 290, KM 1,2

Núcleo Rural Hortigranjeiro de Santa Maria

Office/Warehouse 10,000 m² 3,675 m² Rented Undetermined

period Serra ES

Rua 7, nº 170, Quadra XIV–G, Lotes 01 ao 04 – Civit II

Office/Warehouse 11,689 m² 1,849 m² Rented 10/27/2020 Goiânia GO Rodovia BR 153, s/n Qd CH Lt

11 e 12 Chácaras Retiro

Office/Warehouse 47,076 m² 3,388 m² Rented 01/03/2018 São Luís MA

Av. Engenheiro Emiliano Macieira, 116, BR 135, Km

2,5, Galpão 04, Disol, Bairro Tibiri

Office/Warehouse 25,000 m² 4,179 m² Rented 01/31/2023 Contagem MG AV. Helena Vasconcelos

Costa, 785

Office/Warehouse 3,452 m² 1,200 m² Rented 07/01/2019 Juiz de Fora MG Rua Vera Lúcia Barros de

Paula, n185, Lt 02, Qd 11-A

Office/Warehouse 48,370 m² 2,511 m² Rented 10/06/2019 Pouso Alegre MG Rod BR 459, S/N, KM 108,

Ipiranga

Office/Warehouse 2,869 m² 260 m² Rented Undetermined

period Uberlândia MG

Rua Nicarágua, 1656 Tibery, Lotes 01, 02, 03, 04 ,05 ,06

Office/Warehouse 3,750 m² 848 m² Rented 08/26/2018 Três Lagoas MS Av. Ranulpho Marques Leal,

179, Lt 01 A Qd 21

Office/Warehouse 4,320 m² Obra em

andamento Rented 05/05/2019 Cuiabá MT

Av. D, n°504 (Lt Dist Ind Setor Industrial), área A, Distrito

Industrial


period Ananindeua PA

Rua Jardim Providência, 242, BR 316, KM 4, Distrito 2, Qd

8, Lt 255, Águas Lindas

Office/Warehouse 7,500 m² 1,280 m² Rented 11/01/2018 Parauapebas PA Rodovia PA 275, s/n KM 67,

Zona Rural

Office/Warehouse 19,740 m² 3,888 m² Rented 09/15/2019 Cabo de

Santo Agostinho

PE

Rua Interna 07, nº 645 Pontezinha 83 e 85

(Estacionamento), (Módulos 128 e 129), (Módulos 15,

Parte e 130 a 133)

General Warehouse 11,000 m² 2,140m² Rented 11/10/2022 Teresina PI AV. Prefeito Wall Ferraz, 14491, Complemento 09,

Bairro Parque Jacinta

Office/Warehouse 10,000 m² 3,102 m² Rented 01/06/2022 São José dos

Pinhais PR

Alameda Arpo, 850, Bairro Ouro Fino


period Itatiaia RJ

Rodovia Presidente Dutra, KM 316, Galpão 2, Área “A”,

Centro

Office 2,000 m² 972 m² Rented 05/09/2018 Macaé RJ Av. Aristeu Ferreira da Silva,

SN, Granja dos Cavaleiros

Head office/Office/Warehouse

54,793 m² 12,207 m² Owned N.A. Rio de Janeiro

RJ Estrada do Guerenguê, 1381

– Taquara

Office ND 293 m² Onwed N.A. Rio de Janeiro

RJ Av. das Américas, Nº 500, BL 14, SLS 207 e 208, Barra da

Tijuca

Office/Warehouse 8,173 m² 226 m² Rented Undetermined

period Parnamirim RN

Rodovia BR 101, S/N, Km 8, Lado 02 (oeste), Parque

Industrial, Emaús

Office/Warehouse 27,938 m² 10,000 m² Rented 05/05/2020 Cachoeirinha RS Av. Frederico Augusto Ritter,

nº 3130, Bairro Distrito Industrial

Office/Warehouse 10,800 m² ND Rented 12/31/2019 Rio Grande RS Rua A (DIRG), S/Nº, Setor 04,

LT 04, parte B - Zona Portuária

Office/Warehouse 5,105 m² 687 m² Rented 09/24/2020 Itajaí SC Rua José Gall, 1.700 –

Ressacada

Office/Warehouse 6,480 m² 883 m² Rented 07/20/2018 Aracaju SE Rua Elizete Aragão Cabral,

185, Distrito Industrial, Bairro Inácio Barbosa

Office/Warehouse 6,661 m² 1,177 m² Rented 05/01/2020 Campinas SP Av. Carlos Pellegrini Júnior,

nº 48, Polo I

Office/Warehouse 44,578 m² 3,736 m² Rented 08/14/2026 Cotia SP Av. Syr Henry Wellcome, nº

70 e 280

Office/Warehouse 4,764 m² 3,500 m² Rented 07/01/2020 Ribeirão

Preto SP

Estrada Antônia Mugnatto Marincek, 1.160, Jardim

Aeroporto

Office/Warehouse 850 m² 350 m² Rented 01/01/2020 São José dos

Campos SP

Rodovia Presidente Dutra, s/n KM 154,7 Edifício 36 Rio

Comprido

Office 1,170 m² 343 m² Rented Undetermined

period São Vicente SP

Av. João Francisco Bendorp, 803, Qd 135, Lt 01 a 03,

Cidade Náutica

a. Fixed asset

Description of the fixed asset Country of Location

State of Location

Municipality of Location

Type of Property

Real property Brazil RJ Rio de Janeiro Owned

Lands Brazil RJ Rio de Janeiro Owned

Equipment for rent (formwork, shoring and equipment machines) Brazil Owned

IT Equipment Brazil Owned

Facilities Brazil Owned

Resources Assets Brazil Owned

b. Patents, trademarks, licenses, concessions, franchises and contracts for technology transfer:

DURATION

REGISTRATION # COVERAGE Events that may cause the loss of

the rights

Consequences of losing the rights

TERRITORY

11/10/2021 740164244 NATIONAL

06/19/2024 780190670 NATIONAL

03/25/2020 7200595 NATIONAL

12/07/2022 800121546 NATIONAL

08/30/2021 829369724 NATIONAL

02/08/2019 812940792 NATIONAL The requested brand registrations still not granted by the INPI do not have term of effectiveness established and

may still be refused. The granted registrations may be challenged through,

invalidity lawsuits, in the event of an invalid granted registration, either by

revocational applications, partial or total, in case the brand is not being utilized, to

mark all of the products or services included in the registry certificate. The

brand registrations, which had requested an extension, may still be awaiting its

approval of INPI. In the judicial sphere, despite the fact that the Company

already is a holder of several brands, we cannot ensure that third-parties will not

claim that the Company violated the intellectual property rights and eventually

succeed in court. The Company is not aware of any procedure violation by the Company other than those described in

this Reference Form. The brand registration maintenance is done by periodic fee payments to the INPI.

12/18/2021 821121316

NATIONAL

12/18/2021 821121324

NATIONAL

The impact cannot be qualified. The loss of rights over the brands imply the

impossibility to prevent third-parties from using the identical brands or similar to mark, specially, services or competing

products, once the holder loses its right to use exclusively. There is also the

possibility that the holder suffers criminal and civil lawsuits, for misuse in case of infringement of third parties, possibly

resulting in the inability to use the brand to conduct their activities. Consequently,

the Company would have to incur the costs related to the creation and

promotion of any new brand, extraordinary marketing initiatives and

use of human resources and management’s time to deal with this

situation.

12/18/2021 200018167

NATIONAL

09/25/2019 6989454

NATIONAL

09/25/2019 6989462

NATIONAL

12/21/2022 200065726 NATIONAL

03/22/2023 608965065 NATIONAL

12/21/2022 800221737

NATIONAL

09/27/2018 812987683

NATIONAL

05/30/2019 812987691

NATIONAL

09/13/2018 813141010

NATIONAL

05/30/2019 813782414

NATIONAL

04/21/2022 815236662 NATIONAL

02/12/2024 830724915 NATIONAL

03/18/2024 830724931 NATIONAL

04/24/2017 824647548 NATIONAL

04/24/2017

824647556

NATIONAL

Order Status: Awaiting

for granting 912323876 NATIONAL

Order Status: Awaiting

for granting. 912323892 NATIONAL

DURAÇÃO

REGISTRO N.º TERRITÓRIO Eventos que podem causar a perda

Consequência da perda dos direitos

ATINGIDO

dos direitos

Order Status: Awaiting for granting

PI0705035-6 NATIONAL

In requirement Status

BR 30 2013 002803-8

NATIONAL

06/13/2018 BR 30 2013 002802-0 NATIONAL

The requested brand registrations still not granted by the INPI do not have term of effectiveness established and

may still be refused. The granted registrations may be challenged through,

invalidity lawsuits, in the event of an invalid granted registration, either by

revocational applications, partial or total, in case the brand is not being utilized, to

mark all of the products or services included in the registry certificate. The

brand registrations, which had requested an extension, may still be awaiting its

approval of INPI. In the judicial sphere, despite the fact that the Company

already is a holder of several brands, we cannot ensure that third-parties will not

claim that the Company violated the intellectual property rights and eventually

succeed in court. The Company is not aware of any procedure violation by the Company other than those described in

this Reference Form. The brand registration maintenance is done by periodic fee payments to the INPI.


BR 10 2013 013430-9 NATIONAL

Order Status: Expired

The impact cannot be qualified. The loss of rights over the brands imply the impossibility to prevent third-parties from using the identical

brands or similar to mark, specially, services or competing products, once

the holder loses its right to use exclusively. There is also the

possibility that the holder suffers criminal and civil lawsuits, for misuse

in case of infringement of third parties, possibly resulting in the

inability to use the brand to conduct their activities. Consequently, the Company would have to incur the costs related to the creation and

promotion of any new brand, extraordinary marketing initiatives and use of human resources and

management’s time to deal with this situation.

BR 30 2013 002801-1 NATIONAL

09/11/2024.

MU8901783-8

NATIONAL

In requirement Status

MU8901887-7

NATIONAL








MU9101029-2 NATIONAL

9.2 Other information that the Company judges relevant.

There were no information that the Company judges relevant.

10.1 The management should comment about:

The financial information included in this section, except when expressly stated, apply to our financial

statements related to the fiscal years ended on December 31 of 2015, 2016 and 2017.

The information included in this item 10 of the Reference Form should be read and analyzed toguether

with our financial statements, available in our Company’s Investor Relations website (www.mills.com/ri)

and in the website of the Brazilian Securities and Exchange Commission (Comissão de Valores Mobiliários)

(www.cvm.gov.br).

a. General financial and equity condition

The year of 2017, as expected by the Administration, was another year with difficult results. Throughout

the year several measures were implemented, among which, we highlight the following, aiming:

Revenue Increase

Hiring in January of 2017 the new Commercial and Marketing Officer with the creation of the

Business Intelligence area and important measures for the implementation of the new commercial

strategy.

More structured initiatives in the Rental business unit to increase exposure to the non-

construction market.

Realization of the first Sales Convention in July, with all the commercial team in a single event,

as a result of the integration of the area.

Costs Reduction

Better allocation of invested capital, through the reduction of our PP&E and consequent

rationalization of branches in the Construction business unit, mainly focused on the light real

estate market.

Change of our branch in São Paulo, from Osasco to Cotia.

Adequacy of Financial Covenants

Renegotiation of the covenants of the debentures, of the 2nd and 3rd issues, in March 2017, with

the creation of the linked accounts and alteration of the remuneration of tranches.

In the Construction business unit, prices were still under pressure in 2017 due to the slowdown of the

economy in recent years, the reduction of public investment in infrastructure and the timid resumption of

the real estate market. With the new policy of minimum prices implemented in December 2017 for new

proposals, the average price of new contracts is expected to increase in 2018.

Regarding the Rental business unit, GDP has shown signs of improvement in household consumption,

which has been reflected in demand. Once again we return to our successful strategy of seeking to

increase our exposure to the non-construction market, which represented 56.6% of revenue this year,

compared to 35.4% in 2016 and 20.0% in 2015. This effect has positively impacted the increase in

demand in the second half of 2017, which is enabling us to increase the prices of the most demanded

models. With the new commercial strategy, made possible by the new Commercial Board and by the

Business Intelligence area, we implemented several initiatives, such as the creation of weekly business

process meetings to monitor the demand for our products by region, creation and monitoring of market

leads and weekly update of the price charts, which can be either up or down.

http://www.linguee.com.br/ingles-portugues/traducao/collectively.html

http://www.linguee.com.br/ingles-portugues/traducao/Securities+and+Exchange+Commission.html

In 2017, the Company presented a reduction of 26.6% in net revenues, totaling R$291.3 million,

compared to R$396.6 million in 2016 and R$576.1 million in 2015. The Company continues to generate

cash, with adjusted operating cash flow (before interest paid, acquisition of leasing assets and interest

and net monetary and net asset variations) of R$36.7 million in 2017 versus R$130.7 million in 2016 and

R$202.1 million in 2015. The adjusted free cash flow to the firm (before interest paid and monetary

changes in net assets and liabilities) was R$35.6 million in 2017, against R$146.4 million in 2016 and

R$195.7 million in 2015, being the fourth year of positive cash generation, after years of large

investments, which enabled its organic growth, its geographical expansion and, above all, the conquest

and consolidation of its leading position in its markets.

EBITDA calculated in accordance with CVM Instruction 527 was negative R$43.2 million in 2017,

compared to R$40.9 million in 2016. Excluding the non-recurring items mentioned above, EBITDA would

be equal to negative R$5 million in 2017, versus R$57.8 million in 2016, as a reflection of the continued

drop in leased volume and price practiced, mainly in the Construction business unit. EBITDA in 2015 was

R$104.1 million, excluding non-recurring items EBITDA would total R$186.7 million.

In 2017, the Company recorded a net loss of R$138.4 million, while in 2016 recorded a net loss of R$99.4

million, in front of a net loss of R$97.8 million in 2015.

In April 2016, the Company approved the capital increase, with the subscription and payment in its

maximum amount of R$125 million, positively impacting cash and strengthening the Company's capital

structure and liquidity levels.

Mills' gross debt at December 31, 2017 totaled R$299.4 million, against R$450.1 million on December 31,

2016 and R$620.8 million at December 31, 2015. We ended 2017 with a position of net debt of R$81.0

million, against R$119.4 million in 2016, against R$388.8 million in 2015.

As a result of the separation between the Operating Cash Flow and EBITDA, on March 22, 2017, the

Company held a General Meeting of Debenture Holders at its headquarters. In this meeting the following

changes were made:

(i) Covenants previously determined in the original deed of debentures of Net Debt/LTM Adjusted EBITDA

≤ 3 and LTM Adjusted EBITDA/Financial Result ≥ 2 became Net Debt/Adjusted Operating Cash Flow ≤ 3

and Adjusted Operating Cash Flow/Financial Result ≥ 2;

(ii) Creation of linked accounts to 50% of the balance of debt with rule of release of the account if it

occurs for two consecutive quarters of the original covenants;

(iii) The rate of the 2nd issuance of debentures, the 1st series, which was CDI+0.88%, went to

CDI+1.2%. This series will be closed in August 2017. The 2nd issue of debentures, 2nd series that was

previously IPCA+5.5% is now IPCA+7.0% and the 3rd debentures issue rate was 108.8% of CDI passed

to 116% of CDI; and

(iv) Restrictions on the distribution of dividends, which may be distributed only the mandatory minimum

that is 25% of the Company's net income and granting of loans by the Company to related parties.

The Company continues to generate cash (before interest and principal payments), ending the year with

R$67.8 million in cash and cash equivalents and R$150.5 million in related bank deposits.

In this way, the Adjusted Net Debt/Operating Cash Flow ratio was 2.2x at the end of December 2017.

The Adjusted Operating Cash Flow/Financial Result ratio was 2.7x. At the closing of the Financial

Statements of December 31, 2017, all covenants are being complied with.

We ended the year of 2016 with measured leverage by net debt/LTM adjusted EBITDA ratio of 2.1x, while

the interest coverage ratio, measured by LTM adjusted EBITDA/LTM interest payment, was 2.2x. In 2015

we ended the year with leverage of 2.1x, and interest coverage ratio was 3.0x, both excluding non-

recurring items.

We are confident that we will overcome the challenges of the market, with our financial strength,

management model and commercial strategy and we will leave this cycle even stronger.

b. Capital Structure

Values in R$ million 2017 % 2016 % 2015 %

Equity capital 865.5 70.2% 997.9 66.1% 962.2 58.7%

Third-party capital 368.1 29.8% 512.8 33.9% 675.7 41.3%

Total Capital Structure

1,233.6 100.0%

1,510.7 100.0%

1,638.0 100.0%

(i) Own Equity (Net Equity)

The net equity composition is composed as:

Values in R$ million 2017 % 2016 % 2015 %

Subscribed capital

688.3 79.5%

688.3 69.0%

563.3 58.5%

Capital reserves

33.0 3.8%

30.9 3.1%

30.0 3.1%

Profit reserves

155.4 18.0%

289.8 29.0%

389.2 40.5%

Shares in treasury

(20.3) -2.3%

(20.3) -2.0%

(20.3)

Equity adjustment

9.1 1.1%

9.1 0.9% - 0.0%

Total Equity

865.5 100.0%

997.9 100.0%

962.2 100.0%

On December 31, 2017, the subscribed and paid-up capital was R$688.3 million, represented by one

hundred and seventy-five million, five hundred and eighty-six thousand, four hundred and forty-two

(175,586,442) common shares, in nominative form and without par value. On December 31, 2015 and

2014, the subscribed and paid-in capital stock was R$563.3 million, comprising 128,057,925 (one hundred

twenty-eight million, fifty-seven thousand, nine hundred and twenty-five) nominative common shares,

without nominal value.

On April 19, 2016, the Board of Directors approved the the capital increase, with the issuance of

47,528,517 new common shares, in the total amount of R$125 million.

The Board of Directors approved, in the second quarter of 2015, the sale of 6,878 shares, which were

held in treasury, to meet the Company's stock option exercise. As of December 31, 2015, the Company

had 2,278,422 shares held in treasury.

The Company's directors generally use both own capital from operational cash generation and third-party

capital through the contracting of new loans and/or the issuance of debt securities to finance the

investment needs of non-current assets and working capital of the Company. For strategic operations,

when necessary, the Company may use the capital of its shareholders or third parties, through the

issuance of shares.

There is no possibility of redemption of shares issued by the Company in addition to those legally provided

for.

(i) Third-party Capital

The table below presents the consolidated net debt of the Company on December 31 of 2017, 2016 and

2015:

Values in R$ million 2017 2016 2015

Short-term debt

125.3

159.7

189.8

Long-term debt

174.1

290.4

431.0

(-) Cash and cash equivalents

67.8

330.7

232.0

(-) Related bank deposits

150.5

Net Debt

81.0

119.4

388.8

On December 31, 2017, our debt consisted of 41.8% of short-term debt and 58.2% of long-term debt,

with an average maturity of 2.1 years and an average cost of CDI+2.1%. As of December 31, 2016, our

debt consisted of 35.5% of short-term debt and 64.5% of long-term debt, with an average term of 2.5

years and an average cost of CDI+0.28%. As of December 31, 2015, our debt consisted of 30.6% of

short-term debt and 69.4% of long-term debt, with an average term of 2.8 years and an average cost of

CDI+1,21%. In terms of currency, the total debt is in reais.

c. Ability to pay in relation to financial commitments

The current capital structure and the debt repayment term are comfortable, according to the indicators

presented below:

218,3

106,2 106,2

38,9

Cash/Related bankdeposits

2018 2019 2020+

2nd Emission of Debentures - CDI + 1,20% 2nd Emission of Debentures - IPCA + 7,0%

3rd Emission of Debentures - 116,0% CDI Finame

2017

Net Debt/Adjusted Operating Free Cash Flow < 3 2,2

Adjusted Operating Free Cash Flow/Financial Result > 2 2,7

The Company's debt as of December 31, 2017 was R$299.4 million. The payment flow of this debt,

considering the indebtedness profile on that date, will occur over a period of 4 years, of which R$125.3

million is due in less than one year, R$174.1 million between two and five years, and R$0.6 million above

five years. The Company's long-term debt profile follows a policy for contracting loans and financing, the

purpose of which is to ensure that all financial commitments are honored, if necessary, through the

Company's cash generation.

Additionally, on December 31, 2017, the Company recorded liabilities in the total amount of R$8.8 million

related to the adhesion to the Tax Recovery Program (REFIS), whose total installment period was 180

months. The Company is in compliance with said installment program and the balance of the remaining

installments corresponds to the amount of R$8.8 million, with the last installment due in December 2024.

In this way, the Company's management believe that its cash generation and current cash position are

sufficient to meet its financial commitments in the medium term.

With regard to contractual limitations on the assumption of new debts, there are clauses contained in the

Company's bank credit agreements that require it to comply with certain financial indicators, among

which: the ratio between EBITDA and net indebtedness and the relation between financial expenses And

EBITDA.

On December 31, 2017, 2016 and 2015, the Company was within the contractual limits of these financial

indicators.

d. Sources of financing for working capital and for investments in non-current assets

used

The Company's investments in non-current assets and working capital are financed by its own of

operational cash generation and third-party capital, through the contracting of new loans and/or the

issuance of debt securities, such as commercial promissory notes and debentures. For strategic

operations, when necessary, the Company may use the capital of its shareholders or third parties, through

the issuance of shares.

On April 11, 2014, the Company issued commercial promissory notes in the amount of R$200 million,

remunerated at a rate corresponding to 106% of the DI rate. The funds raised from these operations

were used to (a) refinance of the Company's indebtedness, (b) acquisition of rental equipment, and (c)

uses and general expenses of the Company.

On May 30, 2014, the Company issued R$ 200 million in simple debentures, non-convertible in shares,

maturing on May 30, 2019. The nominal value will be amortized in three annual installments as from the

third year of its and interest payable semi-annually will correspond to 108.75% of the accumulated CDI

interest rate variation. The net proceeds obtained by the Company with the third issuance of debentures

were fully utilized for the full discharge of the commercial promissory notes of the Company's fourth issue,

issued on April 11, 2014, previously described.

e. Sources of financing for working capital and investments in non-current assets that it intends to use to cover liquidity deficiencies

The main Company’s sources of liquidity are:

Cash flow of Company’s activities;

Bank finances and trough capital market; and

Increases in its capital stock

The main Company’s cash requirements are:

investments for maintenance and increase of the equipment inventory;

working capital requirements;

investments in the Company’s facilities and the technology center, which are necessary to support

its operations;

investments in the improvement of processes and controls;

investments in training and occupational safety; and

distribution of dividends and payment of interest on equity.

The management believes that current cash and cash generation capacity, coupled with their

indebtedness capacity, with adequate leverage, are sufficient to finance their investments and their need

for working capital.

f. Debt levels and debt characteristics, describing:

(i) loans contracts and financing relevants

The table below presents loans and financing of the Company, divided by indexer, with the related charges

and open balances on December, 31 of 2015, 2016 and 2017:

In December, 31 of

Charges (year)¹ 2015 2016 2017

(in R$ million)

Financing with Financial Institutions TJLP+0.2% to 0.9% 15.1 12.0 8.9

Simple debentures non-convertible in shares 112.5% of CDI 92.8 0 0

Simple debentures non-convertible in shares

1st serie: CDI + 0.88% 169.7 84.8 0

2nd serie: IPCA +

5.5%// IPCA + 7,0% as

of May, 2017

142.3 151.7

156.8

Simple debentures non-convertible in shares

108.75% of CDI //

116.0% of CDI as of

May, 2017

202.5 202.4

134.2

Total 622.3 450.9 299.9

¹ In December, 31.

Short-term indebtedness

This account totaled R$125.3 million on December 31, 2017, compared to R$159.7 million on December

31, 2016, a reduction of R$34.5 million, or 21.6%. This reduction was mainly due to: (i) payment of the

first installment of the 3rd Issue of Debentures in May 2017, (ii) payment of the last installment of the

2nd issue of Debentures, 1st series CDI, in August 2017, (iii) Transfer of long-term indebtedness to short-

term indebtedness of the 1st installment of amortization, of the 2nd Issue of Debentures, 2nd series IPCA,

in August 2018 (iv) the transfer of long-term indebtedness to short-term indebtedness of the 2nd

installment of the 3rd Issue of Debentures, in May 2018.

This account totaled R$159.7 million on December 31, 2016, compared to R$189.8 million on December

31, 2015, a reduction of R$30.1 million, or 18.9%. This reduction was mainly due to: (i) payment of the

last installment of the 1st Issue of Debentures in April 2016, (ii) payment of the 1st installment of the

2nd issue of Debentures, 1st series CDI, in August 2016, (iii) Transfer of long-term indebtedness to short-

term indebtedness of the 2nd installment of amortization in August 2016 of the second issue of

Debentures and (iv) the transfer of long-term indebtedness to short-term indebtedness of the 1st

installment of the 3rd Issue of Debentures, in May 2017.

Long-term indebtedness

This account totaled R$174.1 million on December, 31, 2017, compared to R$290.4 million on December,

31, 2016, a reduction of R$116.3 million, or 40%. This reduction was mainly due to: (i) tranfer of long-

term indebtedness to short-term indebtedness of the 1st installment of amortization, of the second issue

of debentures, entitled in August, 2018; and (ii) transfer of long-term indebtedness to short-term

indebtedness of the 2nd installment of amortization, of the 3rd issue of debentures, entitled in May, 2018.

This account totaled R$290.4 million on December, 31, 2016, compared to R$431.0 million on December,

31, 2015, a reduction of R$140.6 million, or 48.4%. This reduction was mainly due to: (i) transfer of long-

term indebtedness to short-term indebtedness of the 2nd installment of amortization, of the second issue

of debentures, entitled in August, 2012; and (ii) transfer of long-term indebtedness to short-term

indebtedness of the 1st installment of amortization, of the 3rd issue of debentures, entitled in May, 2014.

Relevant Financial Contracts

The loans were used to finance the expansion of the Company's investments and its uses and general

expenses, being indexed to CDI, TJLP and US Dollar. For loans denominated in foreign currency, financial

instruments were contracted to protect the Company against currency fluctuation exposure.

Financing of leasing equipment was contracted with long-term interest rate (TJLP) charges plus 0.20%

to 0.90% per year and amortizations on a monthly basis until June 2021.

The financial institutions with which the Company has loans and financing as of December 31, 2017 are:

Banco do Brasil

Itaú BBA

On December 6, 2013, the Company entered into a loan agreement with Banco Itaú BBA SA, Nassau

Branch, in the amount of US$16.9 million (equivalent to R$40.0 million, with a quotation of the closing

date of the agreement) . The settlement of the loan and interest was made in a single installment,

maturing on January 30, 2015, without rollover. With the purpose of canceling the exchange variation

risk of this loan, was contracted with Banco Itaú BBA SA, on the same date as the loan, a financial

instrument (swap) in the amount of R$40.0 million for all obligations (principal and interest) were fully

converted into local currency and realized on the same dates of the respective maturities.

Debentures

On August 3, 2012, the second issuance of simple, non-convertible debentures of the Company's

unsecured type was approved, subject to a public offering for distribution with restricted placement efforts

(dated August 16, 2012). 27,000 debentures were issued, each with nominal value of R$10.000,00, of

which: (i) 16,094 debentures of the first series, totaling R$160.9 million, maturing on August 15, 2017,

not subject to monetary restatement, with nominal value amortized in two annual installments as of the

fourth year of issue and interest paid semi-annually, corresponding to the surcharge of 0.88% per year

on 100% of the accumulated variation of the DI rate; and (ii) 10,906 second series debentures, totaling

R$109.1 million, maturing on August 15, 2020, subject to monetary restatement based on the

accumulated variation of the IPCA, with a nominal value amortized in three annual installments from the

sixth year of its issue and interest paid annually, corresponding to 5.50% per annum of the monetarily

restated amount in the form above. The transaction costs associated with this issue in the amount of

R$1.8 million are being recognized as Company funding expenses, according to the contractual terms of

this issue.

On April 23, 2014, the third issuance of simple, non-convertible, nominative, single series unsecured

debentures of the Company in the amount of R$200 million, with a par value of R$10,000, issued in June

18, 2014. The debentures mature on May 30, 2019 and remuneration of 108.75% of the CDI, with

semiannual payments of interest and amortization in three successive annual installments, the first

maturity on May 30, 2017 The transaction costs associated with this issue in the amount of R$0.7 million

are being recognized as Company funding expenses, according to the contractual terms of this issue.

As of December 31, 2015, the balances of gross debentures of transaction costs were R$ 187.3 million in

current liabilities and R$419.9 million in non-current liabilities, and R$186.6 million and R$419.1 million

net of transaction costs, respectively.

At December 31, 2016, gross transaction balances were R$157.0 million in current liabilities and R$282.0

million in non-current liabilities, and R$156.6 million and R$281.6 million net of transaction costs,

respectively.

At December 31, 2017, gross transaction balances were R$122.338 million in current liabilities and

R$168.647 million in non-current liabilities, and R$122.094 million and R$168.411 million net of

transaction costs, respectively.

On May 19, 2017, as deliberated in the Minutes of the General Meeting of Debenture Holders on March

22, 2017, due to the renegotiation of the terms of the deeds of the debentures, relating to the covenants,

a real guarantee of fiduciary assignment was constituted through the opening of linked accounts held by

the Company in favor of the debenture holders, in an amount equivalent to 50% of the debit balance.

Finance Lease

It referred, substantially, to contracts for the purchase of fixed assets with maturities between 36 and 60

months, with maturities up to 2015 and indexed to CDI plus 2.5% to 3.80% per year. This obligation was

guaranteed by the leased assets themselves. The Company settled, in advance, all existing financial lease

contracts during the third quarter of 2014.

(ii) other long-term relations with financial institutions

The Company has as policy reduce the cash risk related to exchange variation, conservatively, since all

its revenues are denominated in Reais. For this purpose, the Company enters into NDFs contracts with

financial institutions for hedge purposes. All these contracts provide for the fixing of the future exchange

rate from reais to dollars.

The derivative instruments contracted by the Company are intended to protect it, in its equipment

importation operations, in the interval between placing orders and nationalization, against exchange rate

fluctuation risks, and are not used for speculative purposes.

The Company also has a dollar loan agreement and to hedge substantially the foreign exchange risk, it

contracted a swap transaction.

On December 6, 2013, the Company entered into a loan agreement with Banco Itaú BBA SA, Nassau

Branch, in the amount of US$16.9 million (equivalent to R$40.0 million, at the closing date of the

agreement). The settlement of the loan and interest was made in a single installment, maturing on

January 30, 2015, without rollover. With the purpose of canceling the exchange variation risk of this loan,

a financial instrument (swap) in the amount of R$40.0 million was contracted with Banco Itaú BBA SA,

on the same date as the loan, so that all obligations (principal and interest) were fully converted into local

currency and realized on the same dates of the respective maturities.

On December 31, 2017 and on December 31, 2016, the Company had no purchase orders for equipment

with foreign suppliers, with a balance of US$0.4 million in the account "foreign suppliers", basically

referring to the purchase of property, plant and equipment. In 2015, term purchases totaled US$0.2

million, and in 2014, such orders totaled US$0.3 million.

(iii) Debt Level of Subordination

The debentures issued by the Company are all unsecured.

Most of the real guarantees provided by the Company refers to financing contracted in years prior to the

IPO, when the Company's financial situation required it to offer real guarantees to facilitate its access to

credit.

Following its initial stock offering held in April 2010, the Company entered into a financing agreement

with real guarantee only for the operations of FINAME, BNDES credit line to finance investments in the

manufacture of a portion of its equipment, where, as a financing agreement, the manufactured equipment

is disposed of until the end of the financing agreement, with a balance of R$8.9 million in real guarantees

as of December 31, 2017. There are no other debentures with real guarantee in the last three fiscal years.

The Company's officers believe that the clauses in force regarding the creation of guarantees will not

significantly restrict the ability to contract new debts to satisfy its capital requirements.

(iv) any restrictions imposed on the issuer, especially in relation to limits of indebtedness and contracting

of new debts, to the distribution of dividends, to the sale of assets, to the issuance of new securities and

to the disposal of corporate control, as well as the Company has been complying with these restrictions.

Covenants

Until the General Meeting of Debenture Holders, held on March 22, 2017, the deeds of issuance of

debentures provided for the maintenance of indebtedness indices and interest coverage with pre-

established parameters, as follows:

(1) Financial ratio resulting from the quotient of the Net Debt¹ division by EBITDA² should be equal to or

less than 3.

(2) Financial ratio resulting from the quotient of the division of EBITDA by Net Financial Expenses³ should

be equal to or greater than 2.

¹ "Net Debt" means, based on the Company's previous consolidated financial statements, (a) the sum of

the Company's onerous debts, on a consolidated basis, to legal entities, including loans and financing

with third parties and/or related parties and issuance of fixed income securities, convertible or not, in the

local and/or international capital markets, in addition to guarantees provided by the Company, but

excluding debts arising from tax installments; (b) less the sum of the Company's cash and cash

equivalents on a consolidated basis.

² "EBITDA" means, based on the four previous consolidated financial statements of the Company, the

net profit or loss before social contribution and income tax, subtracting the income and adding the

expenses generated by the financial results and non-operating, depreciation and amortization and non-

recurring items.

³ "Net Financial Expenses" means, based on the four previous consolidated financial statements of the

Company, the balance of the difference between the consolidated gross financial income and the

consolidated gross financial expense.

Also, some of the Company's long-term financial instruments contain restrictions related to (i) change or

transfer of shareholder control (direct and indirect), and (ii) disposal of assets whose value represents

more than 15% of the total value of the Company's assets, based on the Company's Consolidated

Financial Statements. If the Company is in default with any of its contractual obligations, it may not

distribute and/or pay dividends, interest on capital or any other distributions of profits to the shareholders

of the Company above the mandatory minimum dividend established by law, defined in the respective

instruments.

The Company's officers believe that the current clauses will not significantly restrict their ability to borrow

new debt to meet their capital needs.

On March 22, 2017 was approved at the General Meeting of the Debenture holders of its 2nd and 3rd

issuance the amendment to the terms and conditions of the respective indentures, including (i) financial

covenants, (ii) additional collateral, (iii) changes to certain early-termination events, and (iv) increase the

remuneration of the debentures.

The Company is in compliance with its pecuniary and non-pecuniary obligations in connection with the

Debentures, but believes the amendments approved on the data hereof will provide additional comfort in

relation to the compliance with these obligations until maturity of the Debentures.

(i) Change the formula to calculate the covenants from 31 March 2017, including, until the due date:

(a) Financial ratio resulting from the quotient of the Net Debt division by Operating Cash Flow should be

equal to or less than 3; and

(b) Financial ratio resulting from the quotient of the division of Operating Cash Flow by Net Financial

Expenses should be equal to or greater than 2.

Operating Cash Flow means, on the basis of the 4 consolidated financial statements of the Company

immediately before, Net cash generated by operating activities excluding net interest and monetary

exchange gains and losses, acquisition of rental equipment and interest paid.

In the fiscal years ended December 31, 2015, 2016 and 2017, the Company was in compliance with the

levels required for the indicators.

g. limits of contracted financing and percentages already used

On December 31, 2017, the Company had no limits to be used in financing operations already contracted.

At the same date, the Company had unrecorded and unused bank credit lines, revised annually, of R$56.0

million, and secured and used banking credit lines of R$6.0 million, 10.7% of the total, with multiple

maturity dates and which can be extended by mutual agreement.


At the same date, the Company had unrecorded and unused bank credit lines, revised annually, of

R$113.0 million, and secured and used banking credit lines of R$12.0 million, 10.6% of the total, with

multiple maturity dates and which can be extended by mutual agreement.


At the same date, the Company had unrecorded and unused bank credit lines, revised annually, of

R$109.6 million, and secured and used banking credit lines of R$15.1 million, 12.1% of Total, with multiple

maturities and can be extended by mutual agreement.

The Company maintains relationships with the main financial institutions operating in Brazil and, in the

evaluation of its board of directors, has conditions and credit risk classification that allow it to contract

new debts in the amounts necessary to meet its current needs for short and long term.

h. significant changes in each item of the financial statements

In accordance with current accounting policies adopted in Brazil, revenue reported in the income

statement should include only the gross inflows of economic benefits received and receivable by the

Company when originating from its own activities. The amounts collected on behalf of third parties - such

as sales taxes, taxes on goods and services and value added taxes - do not generate benefits for the

Company and do not result in an increase in shareholders' equity and, therefore, are excluded from

revenue. Therefore, the comments below regarding the variations between the results for the years ended

December 31, 2015, 2016 and 2017 refer only to net revenue, not to gross revenue.

DISCUSSION AND ANALYSIS OF PROFIT AND LOSS STATEMENTS

(1) Vertical analysis, which consists of percentage of total net sales and service revenues.

(2) Horizontal analysis, which consists of the percentage variation of the income statement accounts between the indicated fiscal years.

Year ended 31 December 2017 compared to the year ended 31 December 2016

Net Revenue from Sales and Services

Mills' net revenue reached R$291.3 million in the fiscal year ended on December 31, 2017, a decrease of

26.6% compared to the figure recorded in the previous year. The biggest impact was the drop in rental

revenues, reflecting the lower utilization rate and the lower price practiced in both business units.

In the Construction business unit, in 2017 there was a 39.7% drop in revenue compared to the amount

realized in 2016, with the biggest offenders being the postponement and cancellation of works planned

in early 2017 and the shrinkage in the prices of closed proposals, impacting, especially, rental revenue.

In the Rental business unit, revenue in 2017 showed a drop of 15.4% over the year 2016. The biggest

offenders in Rental revenue were the postponement of part of the new sales schedule for 2018 and the

prices practiced in the 1st half that impacted rental revenue.

In 2017 we worked simultaneously on 4 sales contracts, in line with our strategy of adjusting the mix of

our fleet and divesting the fleet of telescopic handlers, which demand a high maintenance cost and high

idleness.

As announced in previous quarters, we closed in 1Q17 a contract for the sale of 170 handlers, of which

we deliver 102 in 2017 and the remainder will be delivered by the end of 2Q18. In 3Q17 we signed a

contract for the sale of 60 aerial platforms with more than 7 years of use and with a high rate of idleness.

This strategy aims not only to adjust the size of the fleet to the market, but also to adapt our fleet to the

non-construction market. The amount was set at US$1.4 million, with the expectation of an auction in

Values in R$ million 2017 AV¹ AH² 2016 AV¹ AH² 2015 AV¹ AH²

Net Revenue from Sales and Services 291.3 100.0% -65.0% 396.6 100.0% 36.2%

576.1 100.0% 45.3%

Heavy Construction 63.9 21.9% -70.6%

112.5 28.4% 76.1%

165.7 28.8% 47.3%

Real Estate 46.1 15.8% -82.1% 69.8 17.6% 51.5%

117.2 20.3% 67.9%

Rental 181.3 62.2% -49.3% 214.3 54.0% 18.2%

293.2 50.9% 36.8%

Cost of products sold and services rendered (290.0) -99.6% -13.4%

(313.6) -79.1% 8.2%

(343.8) -59.7% 9.6%

Gross Profit 1.3 0.4% -99.7%

83.0 20.9% 6250.1%

232.3 40.3% 179.9%

General and administrative expenses (168.6) -57.9% -25.2%

(193.5) -48.8% 14.8%

(240.8) -41.8% 24.4%

Other operational revenues (expenses) (19.6) -6.7%

- (3.7) -0.9%

- (57.1) -9.9% 1443.5%

Estimated losses due to non-recoverable amount (2.0) -0.7%

- (3.9) -1.0%

- (57.1) -9.9% 1354.7%

Net (Loss) Earnings before Financial Result (189.0) -64.9% -167.4%

(114.2) -28.8% -39.6%

(65.6) -11.4% -42.6%

Financial Expenses (45.4) -15.6% -24.3%

(81.8) -20.6% 80.2%

(100.1) -17.4% 22.3%

Financial Revenues 31.8 10.9% 142.0%

55.5 14.0% 74.5%

36.9 6.4% -33.5%

Financial Result (13.6) -4.7% -105.8%

(26.3) -6.6% 93.6%

(63.1) -11.0% 140.3%

Profit (Loss) before taxation (202.5) -69.5% 208.2%

(140.5) -35.4% -30.6%

(128.7) -22.3% -8.4%

Income tax and social contribution expenses 64.1 22.0% -62.8%

45.0 11.3% -29.9%

30.9 5.4% -31.3%

Net profit of the period (138.4) -47.5% -180.2%

(95.5) -24.1% -31.0%

(97.8) -17.0% 2.4%

the international market for the sale of these machines. The planned delivery schedule of equipment is

up to 1Q18.

Regarding the fleet mix adequacy strategy to increase our exposure to the non-construction market, we

announced in the second quarter the signing of two contracts for the sale of 108 new aerial platforms,

with the aim of replacing some larger and lower models rate of use, by smaller electric models. So far we

have sold 101 equipment of the 108 provided in contract, and we bought 116 equipment of the 135

predicted, of different models. We will continue to make this mix exchange movement until the end of

1Q18, which corresponds to the forecast for the closing of the last contract.

All the equipment involved in the aforementioned contracts have already been classified as assets

available for sale.

With the gradual recovery of the non-construction market, the current focus on the Rental business unit

is increasing the price and availability of equipment.

Net Revenue per type: in R$ million 2017 Part % 2016 Part % 2015 Part %

Total Net Revenue 291.3 100.0% 396.6 100.0% 576.1 100.0%

Rental 230.2 79.0% 312.3 78.7% 484.4 84.1%

Sales of new equipment 6.1 2.1% 8.0 2.0% 24.8 4.3%

Sales of semi new equipment 36.9 12.7% 41.8 10.5% 29.1 5.0%

Technical Assistance 5.6 1.9% 8.2 2.1% 7.9 1.4%

Indemnification and Recovery of Expenses 12.5 4.3% 26.3 6.6% 29.9 5.2%

Net Revenue per business unit: in R$ million 2017 % 2016 % 2015 %


Heavy Construction 63.9 21.9% 112.5 28.4% 165.7 28.8%

Real Estate 46.1 15.8% 69.8 17.6% 117.2 20.3%

Rental 181.3 62.2% 214.3 54.0% 293.2 50.9%

Costs of goods and services and general and administrative expenses

The table below shows the costs of products sold and services rendered by the Company by nature in

the fiscal years ended on December 31, 2016 and 2017.

The table below shows the costs of goods and services and general and administrative expenses of the

Company, without considering the effects of depreciation, opened by business unit in the fiscal years

ended on December 31, 2016 and 2017.

COGS and SGV total excluding depreciation: in R$ million

2016 % Part 2017 % Part Var%

Construction (198.2) 55.7% (179.5) 54.6% -9.4%

COGS (89.4) 25.1% (76.0) 23.1% -15.0%

SG&A ex ADD (99.0) 27.8% (96.4) 29.3% -2.7%

ADD (9.7) 2.7% (7.1) 2.2% -26.7%

Rental (154.5) 43.4% (149.4) 45.5% -3.3%

COGS (82.0) 23.0% (83.8) 25.5% 2.2%

SG&A ex ADD (60.9) 17.1% (62.0) 18.9% 1.8%

ADD (11.6) 3.2% (3.5) 1.1% -69.5%

Others (3.1) 0.9% 0.4 -0.1% -112.0%

Total (355.7) 100.0% (328.5) 100.0% -7.6%

The costs of goods and services rendered and of the Company's general and administrative expenses,

excluding depreciation, went from R$355.7 million in the fiscal year ended on December 31, 2016 to

R$328.5 million in the fiscal year ended on December 31, 2017, an increase of R$27.2 million, or 7.6%.

Values in R$ million

2017 2016 Variation 2017 x 2016

Direct costs work and

rental

General and administrative expenses and others

Total


rental

General and

administrative

expenses and others

Total


rental

General and administrative expenses and others

Total

Personnel (60.4) (61.4)

(121.8)

(64.2)

(71.0)

(135.2)

3.7

9.7

13.4

Third-parties (2.0) (22.2)

(24.2)

(6.0)

(25.5)

(31.4)

3.9

3.3

7.2

Freight (13.8) (6.6)

(20.4)

(8.6)

(4.6)

(13.1)

(5.3)

(2.0)

(7.2)

Construction material/maintenance and repair (35.3) (4.9)

(40.3)

(37.5)

(4.0)

(41.6)

2.2

(0.9)

1.3

Equipment rental and others (3.8) (18.3)

(22.1)

(4.8)

(16.3)

(21.1)

1.1

(2.1)

(1.0)

Travel (1.7) (3.7)

(5.4)

(1.7)

(4.2)

(5.9)

0.0

0.5

0.5

Cost of goods sold (4.2) -

(4.2)

(5.7) -

(5.7)

1.5

-

1.5

Depreciation and Amortization (130.1) (15.6)

(145.7)

(142.2)

(16.8)

(159.0)

12.1

1.2

13.3

Assets Write-off (37.5) -

(37.5)

(41.1) -

(41.1)

3.6

-

3.6

Allowance for Doubtful Debts - ADD - (10.6)

(10.6)

-

(21.2)

(21.2)

-

10.6

10.6

Stock Plan - (2.0)

(2.0)

-

(4.4)

(4.4)

-

2.3

2.3

Provisions - (2.3)

(2.3)

-

(3.1)

(3.1)

-

0.8

0.8

Others (1.2) (20.9)

(22.1)

(1.9)

(22.4)

(24.2)

0.7

1.4

2.1

Total costs and expenses (290.0) (168.6)

(458.5)

(313.6)

(193.5)

(507.1)

23.7

24.9

48.6

Consolidated costs of Mills, excluding depreciation, decreased by 6.8% in relation to the previous year,

as a result of lower sales, decrease in rented volume and the strategy of resizing of the Construction

business unit. This year we now classify the expenses of the project area in the COGS, previously

registered under the SG&A Commercial, Operational and Administrative line, this change is due, therefore,

we believe that the area is directly linked to the rental billing. In 2017, costs related to this area totaled

R$7.4 million, compared to R$6.6 million in 2016. As a percentage of total net revenue, costs increased

from 43.2% in 2016 to 54.9% in 2017.

SG&A excluding the ADD remained stable between years, but was negatively impacted by non-recurring

expenses. Excluding non-recurring expenses and project expenses, we would present a reduction of 10%

in the year, equivalent to R$13.7 million. In 2017, there were the closing or change of 8 Construction

addresses, being: Ananindeua, Fortaleza, Belo Horizonte, Ribeirão Preto, Campinas and Curitiba in

addition to making the change of Porto Alegre and Cotia.

In 2017 the accumulated ADD totaled R$10.6 million, equivalent to 3.6% of net revenue, compared to

5.3% in 2016.

The depreciation of assets used to provide services, which is a component of the costs of products sold

and services rendered, decreased from R$159.0 million in the fiscal year ended December 31, 2016 to

R$145.7 million in the fiscal year closed on December 31, 2017, maintaining the average depreciation

terms of 10 years.

Non-recurring items

During 2017, we recorded R$38.2 million in non-recurring expenses. These expenses include: (i) mainly

restructuring expenses, as a reflection of the Company's strategy of resizing branches and equipment for

light real estate market, (ii) the change of our branch from Osasco (SP) to Cotia (SP) and (iii) liabilities of

the Industrial Services business unit, sold in 2013. In the Construction business unit, due to the duration

of the contracts and the complexity of the projects, they allow us to serve customers remotely.

In 2017, we finalized the process of demobilization of the branches in Ribeirão Preto (SP), Campinas (SP),

Fortaleza (Ceará), Belém (Pará), Curitiba (Paraná), Vitória (Espirito Santo) and Belo Horizonte

construction. Changes were made to Cachoeirinha (Rio Grande do Sul) and Osasco (São Paulo) branches

of the Rental and Construction business units, and the branches in Belém (Pará), Curitiba (Paraná),

Campinas (São Paulo) and Ribeirão Preto (São Paulo) from the Rental business unit. In addition to the

above operations, we delivered a piece of land that stored equipment from the Construction business unit

in São Luis. We fulfilled the initial schedule and demobilized a total of 30 thousand tons and scraped

approximately 11 thousand tons of equipment, thus fulfilling the plan defined at the beginning of the

project.

With this we ended the year 2017 with 7 branches in Construction and a hibernated branch, and 29

branches in the Rental business unit and a foothold in Teresina (Piauí). In 4Q17 we closed the Manaus

branch in the Rental business unit.

Restructuring expenses continue to be influenced by the cost of improvement in the branches being

delivered and the freight transfer of equipment that is being returned in respect of the old contracts.

In 2016, the Company performed all necessary tests, but it was not necessary to establish impairment

losses in any of the cash generating units. Likewise, in 2017, the Company performed all necessary tests,

but it was not necessary to establish impairment in any of the cash generating units.

During 2017, the Company reviewed the fair value of the financial instrument related to the investment

in Rohr through an internal study. The fair value of this asset was determined based on economic market

projections to determine its fair value through the income approach, through the projection of discounted

cash flow for a period of ten years plus perpetuity, for purposes of rationing of the recorded amount in

view of the long maturity of investments in infrastructure and civil construction. Revenue was projected

on the basis of gross domestic product (GDP) plus broad consumer price index (IPCA), considering

multipliers. For costs and expenses, the indicator considered was the National Broad Consumer Price

Index (IPCA). Also considered was the need for working capital and investments to maintain the asset

tested. The respective flows were discounted at an average discount rate of 14.4%, including premium

per size of 1%, obtained through a methodology usually applied by the market, taking into account the

weighted average cost of capital (WACC). Growth rate in real terms in perpetuity was not considered.

Based on this study, Management estimates that the fair value of the investment in Rohr as of December

31, 2017 is R$55.2 million (R$75.1 million as of December 31, 2016). The fair value variation of R$19.8

million was recorded in the statement of income as a result of the reclassification of R$13.8 million in the

income statement of other comprehensive income as of December 31, 2016, R$6.0 million. The net

change was R$4.0 million considering the effect of deferred income and social contribution taxes as of

December 31, 2017.

During 2016, we registered R$16.9 million in non-recurring expenses, being: (i) R$3.7 million related to

the sale of scrap, equivalent to 2,3 thousand tons of equipment; (ii) R$6.2 million related to the

restructuring and demobilization of branches; (iii) R$3.9 million related to the impairment of

improvements in Osasco, Campinas and Ribeirão Preto; and (iv) R$3.1 million related to expenses of the

Industrial Services business unit sold in 2013.

In 2015, an impairment of R$57.1 million was recorded, in which R$30.9 million in Construction and

R$26.2 million in the investment in Rohr. In 2016, the Company performed all necessary tests, but it was

not necessary to establish impairment in any of the cash generating units. In 2015, R$25.6 million of non-

recurring expenses were recorded, of which R$6.0 million in 4Q15.

In 2016, the Company began to classify the investment in Rohr as a financial asset available for sale,

submitted, therefore, to the fair value valuation. The adjustment to fair value is recognized as equity

valuation adjustment within shareholders' equity and the net effect shown in the Comprehensive Income

Statement, in the financial statements. The Company assessed that, as of December 31, 2016, it has no

significant influence in accordance with CPC 18 (R2) and no change in relation to the valuation as of

December 31, 2015.

During 2016, the Company reviewed the fair value of the financial instrument related to investment in

Rohr through an internal study. The fair value of this asset was determined based on economic

projections, through the income approach, through the projection of discounted cash flow for a period of

ten years for the purpose of rationalizing the book value, bearing in mind the long maturity of investments

in infrastructure and civil construction. The respective flows are discounted by the average discount rate,

obtained through a methodology usually applied by the market, taking into account the weighted average

cost of capital (WACC). Based on this study, administration estimates that the fair value of the investment

in Rohr on December 31, 2016 is R$75.1 million (R$61.2 million on December 31, 2015). The fair value

variation, of R$13.9 million, less deferred income tax and social contribution of R$4.8 million, was

registered in the Company's Shareholders' Equity as an asset valuation adjustment (R$9.1 million).

Operating Loss

Operating income before financial results increased from a loss of R$118.1 million in the fiscal year ended

on December 31, 2016 to a loss of R$183.0 million in the year ended on December 31, 2017. The increase

in the loss is mainly due to the drop in net revenue in both business units.

Financial Performance

The financial result was a negative R$13.6 million in 2017, against a negative R$26.3 million in 2016, as

a consequence of the reduction in indebtedness, despite the increase in average cost of debt in the

period, mainly due to the negotiation of remuneration of debentures in April 2017. In that year, we

amortized R$150.3 million of principal, of which 98% related to debentures.

Income tax and social contribution

Income tax and social contribution expenses increased from a positive amount of R$45.0 million in the

fiscal year ended on December 31, 2016 to a positive amount of R$62.1 million in the fiscal year ended

on December 31, 2017, derived from deferred income tax. The effective tax rate was 32% in 2017, versus

31% in 2016.

Net Income for the Fiscal Year

In 2017, we recorded a loss of R$134.4 million, against a loss of R$99.4 million in 2016.


Net Revenue from Sales and Services

Mills' net revenue reached R$396.6 million in the fiscal year ended on December 31, 2016, a decrease of

31.2% compared to the figure recorded in the previous year. The biggest impact was the drop in rental

revenues, reflecting the lower utilization rate and the lower price practiced in both business units. The

drop in leased volume accounted for 52% of the reduction in rental revenue, while the price/mix of

equipment accounted for 48%.

54.0% of the Company's Net Revenue in 2016 came from the Rental business unit.

We are implementing structuring initiatives in Rental focused on the non-construction market and the

greater penetration of this segment. Therefore, we believe that this business unit will be the first to

present better revenues.

Net Revenue per type: in R$ million 2014 2015 2016 (B)/(A) (C )/(B)

(A) (B) (C )

Total Net Revenue 794.2 576.1 396.6 -27.5% -31.2%

Rental 663.3 484.4 312.3 -27.0% -35.5%

Sales of new equipment 45.7 24.8 8.0 -45.6% -67.7%

Sales of semi new equipment 34.8 29.1 41.8 -16.5% 43.8%

Technical Assistance 8.1 7.9 8.2 -2.2% 4.4%

Indemnification and Recovery of Expenses 42.3 29.9 26.3 -29.3% -12.3%

Revenues from sales of new equipment increased 43.8% year-on-year. In 2016, due to liquidity, 227

Rental machines were sold, of which 209 went to a specific contract closed in the second half of 2015

before the capital increase.

Costs of goods and services and general and administrative expenses

The table below shows the costs of products sold and services rendered by the Company by nature in

the fiscal years ended on December 31, 2015 and 2016.

The table below shows the costs of goods and services and general and administrative expenses of the

Company, without considering the effects of depreciation, opened by business unit in the fiscal years

ended on December 31, 2015 and 2016.

COGS and SGV total excluding depreciation: in R$ million

2015 % Part 2016 % Part Var%

Construction (281.6) 59.7% (198.2) 55.7% -29.6%

COGS (106.8) 22.6% (89.4) 25.1% -16.3%

SG&A ex ADD (149.2) 31.6% (99.0) 27.8% -33.6%

ADD (25.6) 5.4% (9.7) 2.7% -62.0%

Rental (160.6) 34.0% (154.5) 43.4% -3.8%

COGS (85.0) 18.0% (82.0) 23.0% -3.6%

SG&A ex ADD (62.8) 13.3% (60.9) 17.1% -3.0%

PDD (12.8) 2.7% (11.6) 3.2% -9.5%

Others (29.8) 6.3% (3.1) 0.9% -89.6%

Total (472.0) 100.0% (355.7) 100.0% -24.6%

The costs of goods and services rendered and of the Company's general and administrative expenses,

excluding depreciation, went from R$472.0 million in the fiscal year ended on December 31, 2015 to

R$355.7 million in the fiscal year ended on December 31, 2016, an increase of R$116.3 million, or 24.6%.

Consolidated costs of Mills, excluding depreciation, decreased by 10.7% over the previous year. As a

percentage of total net revenue, costs rose from 33.3% in 2015 to 43.2% in 2016. Despite the increase

in productivity in the maintenance of our equipment, we were not able to reduce the cost in the same

proportion as the reduction of rented equipment volume. Sales margin was also lower.

Direct

costs

works and

rental

General

and

Administrati

ve

expenses

and others

Total

Direct

costs

works

and rental

General

and

Administrati

ve

expenses

and others

Total

Direct

costs

works

and

rental

General and

Administrative

expenses

and others

Total

Personnel (64.2) (71.0) (135.2) (74.2) (97.6) (171.8) 10.1 26.6 36.6

Third-parties (6.0) (25.5) (31.4) (4.9) (20.5) (25.4) (1.0) (5.0) (6.0)

Freight (8.6) (4.6) (13.1) (12.1) (3.3) (15.4) 3.5 (1.3) 2.3

Construction material/maintenance and repair (37.5) (4.0) (41.6) (42.3) (5.8) (48.2) 4.8 1.8 6.6

Equipment rental and others (4.8) (16.3) (21.1) (5.8) (19.5) (25.4) 1.0 3.3 4.3

Travel (1.7) (4.2) (5.9) (2.4) (6.4) (8.8) 0.6 2.2 2.9

Cost of goods sold (5.7) - (5.7) (34.7) - (34.7) 29.0 - 29.0

Depreciation and Redemption (142.2) (16.8) (159.0) (151.9) (17.7) (169.6) 9.7 0.9 10.6

Write-offs (41.1) - (41.1) (12.8) - (12.8) (28.2) - (28.2)

Allowance for Doubtful Debts - ADD - (21.2) (21.2) - (38.2) (38.2) - 17.0 17.0

Stock plan - (4.4) (4.4) - (9.6) (9.6) - 5.3 5.3

Provisions - (3.1) (3.1) - (4.4) (4.4) - 1.2 1.2

Updating provisions - 0.0 0.0 - - - - 0.0 0.0

Provisions for estimated losses for non-recoverable value - (3.9) (3.9) - (57.1) (57.1) - 53.2 53.2

Others (1.9) (26.1) (28.0) (2.6) (17.6) (20.2) 0.8 (8.5) (7.7)

Total costs and expenses (313.6) (201.1) (514.7) (343.8) (297.9) (641.7) 30.2 96.8 126.9

2015

Values in R$ million

Variation 2015 x 20142016

General and administrative expenses, excluding ADD, fell by 32.6%, as a result of the measures taken to

rationalize costs and expenses adopted by the Company. We had a reduction of R$36.0 million between

years, disregarding the expenses allocated to other expenses such as the impairment occurred in 2015,

stock options and labor provisions. In 2016 the Company closed 5 branches, 3 of which were Construction

branches: Manaus, Goiania and Cuiaba and 2 branches of Rental - Guarulhos and Sorocaba. We are in

the process of closing more branches in the Construction unit with the goal of reducing exposure in the

light real estate market.

The depreciation of assets used to provide services, which is a component of costs of products sold and

services rendered, decreased from R $ 169.6 million in the fiscal year ended December 31, 2015 to

R$159.0 million in the fiscal year ended on December 31, 2016, maintaining the average depreciation

terms of 10 years.

Non-recurring items

During 2016, we registered R$16.9 million in non-recurring expenses, being: (i) R$3.7 million related to

the sale of scrap, equivalent to 2,3 thousand tons of equipment; (ii) R$1.4 million related to the

restructuring and demobilization of branches; (iii) R$3.9 million related to the impairment of

improvements in Osasco, Campinas and Ribeirão Preto; and (iv) R$0.4 million related to expenses of the

Industrial Services business unit sold in 2013. Considering non-recurring expenses for determination of

adjusted EBITDA, at the closing of financial statements on December, 31, 2016, all covenants are being

fulfilled. Impairment occurred in 2015 will be treated in the next item.

Impairment

In 2015, an impairment of R$57.1 million was registered, in which R$30.9 million in Construction and

R$26.2 million in the investment in Rohr. In 2016, the Company performed all necessary tests, but it was

not necessary to establish impairment in any of the cash generating units.

In 2016, the Company began to classify the investment in Rohr as a financial asset available for sale,

submitted, therefore, to the fair value valuation. The adjustment to fair value is recognized as equity

valuation adjustment within shareholders' equity and the net effect shown in the Comprehensive Income

Statement, in the financial statements.


Rohr through an internal study. The fair value of this asset was determined based on economic


ten years for the purpose of rationalizing the book value, bearing in mind the long maturity of investments

in infrastructure and civil construction. The respective flows are discounted by the average discount rate,


cost of capital (WACC). Based on this study, administration estimates that the fair value of the investment

in Rohr on December 31, 2016 is R$75.1 million (R$61.2 million on December 31, 2015). The fair value

variation, of R$13.9 million, less deferred income tax and social contribution of R$4.8 million, was

registered in the Company's Shareholders' Equity as an asset valuation adjustment (R$9.1 million).

Additionally, in 4Q16, a provision for impairment of R$3.9 million in third-party improvements was

recorded as a consequence of the demobilization project of Osasco, Campinas and Ribeirão Preto

branches of the Construction business unit, since such improvements in these branches will not take place

within the contractual term initially expected.

Operating Loss

Operating income before financial results increased from a loss of R$65.6 million in the fiscal year ended

on December 31, 2015 to a loss of R$118.1 million in the year ended on December 31, 2016. The increase

in the loss is mainly due to the drop in net revenue in both business units.

Financial Performance

In 2016, the financial result was negative in R$26.3 million, an improvement of R$36.8 million related to

the previous year. This result was due to the income from investments of funds raised through the capital

increase approved in April and the lower financial expenses. The expenses incurred during the capital

increase did not impact the result, however, the investments had a positive impact of R$14.3 million on

our financial results.

Income tax and social contribution

Income tax and social contribution expenses increased from a positive amount of R$30.9 million in the

fiscal year ended on December 31, 2015 to a positive amount of R$45.0 million in the fiscal year ended

on December 31, 2016, derived from deferred income tax. The effective tax rate was 31% in 2016, versus

24% in 2015.

Net Income for the Fiscal Year

In 2016, we recorded a loss of R$99.4 million, against a loss of R$97.8 million in 2015. The variation in

relation to the previous year is explained by the lower operating income, partially offset by the positive

effect of deferred income tax and financial result.


Current Assets

Current asset went from R$472.3 million, on December 31, 2016, to R$232.4 million, on December 31,

2017, a decrease of R$239.8 million, or 50.8%. The main variations, on the Company’s management

evaluation, were:

Decrease in cash and cash equivalents of R$262.8 million, influenced by the creation of the linked

bank deposit as a result of the debentures negotiation, and also impacted by the drop in cash

generation in the period;

Increase of R$63.3 million in the linked bank deposit;

Reduction in accounts receivable of R$9.0 million, as a consequence of lower net revenue; and

R$22.6 million fall in the recoverable taxes account, mainly due to the monthly appropriation of PIS

and COFINS credits with acquisitions of assets for property, plant and equipment leased.

Non-current Assets

Non-current assets increased from R$98.8 million on December 31, 2016 to R$258.3 million on December

31, 2017, an increase of R$159.5 million, or 161.4%. The main variations in the evaluation of the

Company's management were:

• Increase of R$87.2 million in the linked bank deposit, as a result of the negotiation of the debentures;

and

• Increase of R$72.2 million in deferred IRPJ and CSLL, due to tax loss for the year and the variation of

temporary differences.

Investment – Financial Asset available for sale

The investment – financial asset available for sale went from R$75.1 million, on December 31, 2016, to

R$55.2 million, on December 31, 2017, an increase of R$20.0 million, or 26.4%, related to the adjustment

of recoverable value in Rohr investment.

As already mentioned, during 2017, the Company reviewed the fair value of the financial instrument

related to investment in Rohr through an internal study. Based on this study, Management estimates that

the fair value of the investment in Rohr as of December 31, 2017 is R$55.2 million (R$75.1 million as of

December 31, 2016). The fair value variation of R$19.8 million was recorded in the statement of income

as a result of the reclassification of R$13.8 million in the statement of income of other comprehensive

income as of December 31, 2016, R$6.0 million. The net change was R$4.0 million considering the effect

of deferred income and social contribution taxes as of December 31, 2017.

Fixed Assets

Fixed asset went from R$821.2 million, on December 31, 2016, to R$639.7 million, on December 31,

2017, a reduction of R$181.5 million, or 22.1%. This reduction is due to the Company’s strategy to reduce

your exposition to the light real estate market.

Intangible Assets

Intangible asset went from R$43.4 million, on December 31, 2016, to R$37.9 million, on December 31,

2017.

Current Liability

Current liability went from R$193.8 million, on December 31, 2016, to R$165.4 million, on December 31,

2017, a reduction of R$28.3 million or 14.6%, as a consequence mainly due to debentures amortization.

Non-current Liability

Non-current liability went from R$319.0 million, on December 31, 2016, to R$211.6 million, on December

31, 2017, a decrease of R$107.5 million, or 33.7%. The main impact of this variation was due to

debentures amortization.

Net Equity

Net equity went from R$997.9 million on December 31, 2016 to R$846.6 million on December 31, 2017,

a decrease of R$151.4 million, or 15.2%. The main impact of this variation was the reduction of the

retained earnings reserve accounts by R$74.7 million and an expansion reserve of R$63.7 million as a

result of the absorption of the loss for the year.

Saldo em 31 de Dezembro de 2016 comparado com o saldo em 31 de Dezembro de 2015

Current Assets

Current asset went from R$435.5 million, on December 31, 2015, to R$472.3 million, on December 31,

2016, an increase of R$36.7 million, or 8.4%. The main variations, on the Company’s management

evaluation, were:

Increase on cash and cash equivalents, of R$98.7 million, influenced by the capital increase of R$125

million, approved in April, 2016;

Reduction on trades receivable of R$33.9 million, as a consequence of the lower net revenue; and

Reduction of R$20.7 million on stocks account – other assets for sale, as a consequence of the sales

contract of access motorized equipment.

Non-current Assets

Non-current asset went from R$90.4 million, on December 31, 2015, to R$98.8 million, on December 31,

2016, an increase of R$8.4 million, or 9.3%.

Investment – Financial Asset available for sale

The investment – financial asset available for sale went from R$61.2 million, on December 31, 2015, to

R$75.1 million, on December 31, 2016, an increase of R$13.9 million, or 22.6%, related to the adjustment

of recoverable value in Rohr investment.


Rohr through an internal study. The fair value of this asset was determined based on economic projections

of the market, by the income approach, through discounted cash flow projection for a period of ten years,

for purposes of substantiation of the book value, considering the long period of maturity of investments

in infrastructure and civil construction. For the projection of the volume, Management considered in the

study the expectation of growth of investments in large works, provided by a specialized consultancy in

the segment and the resumption of the cycle of growth of investments in infrastructure and civil

construction in the country. Revenue was projected on the basis of the Indice Nacional de Custo da

Construção (INCC) and, for costs and expenses, the indicator considered was the Indice Nacional de

Preço ao Consumidor Amplo (IPCA). Also considered was the need for working capital and investments

to maintain the asset tested. The respective flows were discounted at an average discount rate of 14.20%,

including premium per size of 0.30%, obtained through a methodology usually applied by the market,

taking into account the weighted average cost of capital (WACC).


31, 2016 is R$75.1 million (R$61.2 million on December 31, 2015). The fair value variation was recorded

in the Company's Shareholders' Equity as an asset valuation adjustment, net of deferred income tax and

social contribution, on December 31, 2016.

Fixed Assets

Fixed asset went from R$1,004.1 million, on December 31, 2015, to R$821.2 million, on December 31,

2016, a reduction of R$182.9 million, or 18.2%.

Intangible Assets

Intangible asset went from R$46.8 million, on December 31, 2015, to R$43.4 million, on December 31,

2016.

Current Liability

Current liability went from R$218.9 million, on December 31, 2015, to R$193.8 million, on December 31,

2016, a reduction of R$25.1 million or 11.5%, as a consequence mainly due to debentures amortization.

Non-current Liability

Non-current liability went from R$456.8 million, on December 31, 2015, to R$319.0 million, on December

31, 2016, a decrease of R$137.8 million, or 30.2%. The main impact of this variation was due to

debentures amortization.

Net Equity

Net equity went from R$962.2 million, on December 31, 2015, to R$997.9 million, on December 31, 2016,

an increase of R$ 97.2 million, or 3.7%. In the Company’s management evaluation, the main factors of

this increase were:

Increase of R$125 million on equity capital, as a result of capital increase approved in April 2016;

Reduction of R$99.4 million on income reserve account, as a result of profit reduction.

CASH FLOW

Year ended on December 31

2015 2016 2017

(in R$ million)

Cash generated for operational activities ..................................... 200.3 133.1 24.5

Net cash (applied) generated on investment activities .................. 2.1 17.6 13.4

Net cash coming (consumed) from financing activities .................. (164.1) (52.0) (300.8)

Increase (decrease) of resources ................................................ 38.4 98.7 (262.9)

In 2015 the Company changed the accounting for acquisition of property, plant and equipment from lease

to cash flow, from investment activities to operating activities. The cash flow figures for 2016, 2015 and

2014 already reflect this change. The main reason is that the Company considers the sale of property,

plant and equipment as operating activities and, therefore, the DFC should reflect this reality.

Cash Flow from Operational Activities

In 2015, 2016 and 2017, the Company had operational result of R$200.3 million, R$133.1 million and

R$24.5 million, respectively.

As the Company's EBITDA is currently very far from operational cash generation, we present EBITDA

reconciliation with the adjusted operational cash flow by the net monetary and asset variations,

investments in leased assets and interest paid. Considering that EBITDA is a good Proxy of the Company's

operational cash flow, we need to exclude certain provisions and assets write-off, which are relevant

amounts. The bars indicated in gray indicate the variations between years.

Cash Flow of Investment Activities

Gross investments in property, plant and equipment for the fiscal years ended on December 31, 2015,

2016 and 2017 totaled R$21.3 million, R$3.3 million and R$29.6 million, respectively.

Given the low utilization, leasing investments are necessary only in function of the composition of the

mix, linked to the income from indemnification and recovery of expenses and exchange of mix

64,0

(43,2) (0,6) 2,0 4,0

10,6 (2,5)

29,3 1,4 (40,5)

24,5

(42,8) 14,5

40,5 36,7

Eb

itda C

VM

P

rovis

ion for

tax, civ

il and lab

or

risks

A

ccru

ed e

xpenses o

n s

tock o

ptio

ns

P

rovis

ion for

impairm

ent o

f in

vento

ries h

eld

for

sale

, pro

vis

ion (

revers

al) for

impairm

ent a

nd

pro

vis

ion (

revers

al) for

slo

w-m

ovin

g in

vento

rie

s

R

esid

ual valu

e o

f pro

pert

y, pla

nt and e

quip

men

tand in

tangib

le a

ssets

sold

and w

ritten-o

ff

A

llow

an

ce for

doubtful debts

Oth

er

non c

ash

ite

ms

In

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st and m

on

eta

ry a

nd e

xchange g

ain

s a

nd

losses, net

Oth

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cash ite

ms

Inte

rest P

aid

Opera

tin

g C

ash F

low

as a

ccountin

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tandard

s

Inte

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one

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and

exchange g

ain

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nd

losses, net

Acquis

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Inte

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The investments in property, plant and equipment made in 2015, 2016 and 2017 are presented below:

Year ended on December 31:

2015 2016 2017

(in R$ million)

Gross investment, before PIS and COFINS credits ........................................ (21.3) (3.3) (29.6)

Total Gross investment ............................................................................... (21.3) (3.3) (29.6)

PIS and COFINS credits .............................................................................. 1.0 0.3 1.6

Net investment........................................................................................... (20.3) (3.0) (28.0)

Gross investments in intangible assets for the fiscal years ended on December 31, 2015, 2016 and 2017

totaled R$6.9 million, R$2.2 million and R$3.4 million, respectively.

Cash Flow of Financing Activities

Year ended on December 31:

2015 2016 2017

(in R$ million)

Capital Increase ........................................................................................ - 125.0 -

Restricted Bank Deposits........................................................................... - - (150.5)

Cost with shares emission.......................................................................... - (3.4) -

Acquisition of treasury shares ..................................................................... (8.7) - -

Dividends and interests on own capital paid ................................................. (21.8) -

Loans amortization ..................................................................................... (133.5) (173.6) (150.3)

Are included in this caption, the new loans, as well as repayments of principal and interest payments on

existing loans, as well as capital contributions and dividend payments.

In 2014, the Company raised R$200.0 million through its third issuance of simple, non-convertible, non-

convertible debentures in a single series of unsecured debentures with a face value of R $ 10.00. The

debentures mature in May 2019 and bear interest of 108.75% of the CDI, with semiannual payments of

interest and amortization in three successive annual installments and the first maturity on May 30, 2017.

The net proceeds obtained by the Company with the Third issuance of debentures were fully used for the

full discharge of the fourth issue commercial promissory notes in the amount of R $ 200 million, issued

on April 11, 2014.

On February 5, 2016, the Board of Directors approved the realization of a capital increase of the Company,

with the possibility of partial homologation through the issuance, for private subscription of at least

40,089,472 and a maximum of 47,528,517 new common shares at the issue price of R$2.63 per share,

totaling at least R$105.4 million and a maximum of R$125 million. The fixed price considered the average

of daily closing prices weighted by the volume of trading in trading sessions held on BM&FBOVESPA

between November 27, 2015 (inclusive) and February 4, 2016 (inclusive). The right of preference to

subscribe for these new shares was assured to the shareholders of the Company with a closing position

on February 11, 2016, in proportion to the number of shares they hold on that day.

Due to the fact that the maximum amount of subscriptions to the capital increase, was held, on April 19,

2016, the Company's Board of Directors Meeting to approve its approval, with the issue of 47,528,517

new common total amount of R$125 million. With the approval, the Company's capital stock increased to

R$688 million, divided into 175,586,442 common shares.

On April 7, 2016, the Company's controlling shareholders, the Nacht family, entered into a Shareholders

Agreement with the Axxon Brazil Private Equity Fund II (Axxon). The agreement provides, among other

provisions, clauses relating to (i) the exercise of voting and power of control; (ii) appointment of directors

and members of committees; (iii) the transfer of shares and preference to acquire them; And (iv) the

restriction or binding of voting rights of members of the board of directors.

On July 20, 2016, Axxon became the holder of 7% of the Company's capital stock, acquiring as a

consequence the political rights set forth in the shareholders' agreement. On January 16, 2017, Axxon

did not become the holder of shares representing 13% of the Company's capital stock, therefore, not

assisting the conditions set forth in the Clause 3.2.2 of the shareholders' agreement executed on April 7,

2016 between Axxon and the controlling shareholders of the Company within the period set forth in the

clause previously mentioned, which expired on that date. Consequently, Axxon is no longer entitled to

the political rights set forth in Clauses 4.4, 4.5, 11.3.2 and 11.5 of the shareholders' agreement.

On May 19, 2017, as resolved in the Minutes of the General Meeting of Debenture Holders of March 22,

2017, due to the renegotiation of the terms of the deeds of the debentures, related to the covenants, the

real guarantee of fiduciary assignment was constituted through the opening of linked accounts, held by

the Company in favor of the debenture holders, in an amount equivalent to 50% of the debit balance,

measured monthly.

10.2 The directors should comment about

a. Company’s Operations results, in particular:

(i) Description of any revenue components

Net Revenue of Sales and Services

The management believe that the Company is one of the largest providers of specialized engineering

services, the leader in the supply of concrete forms and tubular structures and in rental of motorized

access equipment in the Brazilian market.

We have more than 65 years of history in Brazil and we are currently the largest infrastructure engineering

solutions company in Brazil and the largest leasing company in Latin America. In 2017, we are recognized

internationally for our commitment to offer the best quality in training for aerial platform operators in

Brazil.

We are present throughout the national territory, providing a closer relationship with the customer and

faster service to provide the most appropriate solution for each type of challenge. The differentiated

quality of the training of our team, combined with the diversified experience and international partnerships

with leading companies in the market, allows us to deliver customized solutions and with the most

advanced technology adapted to each need.

All of these sectors are directly affected by changes in macroeconomic conditions in Brazil, especially

gross domestic product growth - GDP, interest rates, inflation, credit availability, unemployment,

exchange rates and commodity prices; the latter for affecting the costs of equipment that the Company

uses in its activities. Consequently, these factors indirectly affect their operations and results.

The Company's net sales and services revenue is fully denominated in reais and comes from equipment

rental, equipment sales, technical assistance services and indemnities, which include collection for

equipment not returned or damaged by its customers. The following table shows the share of each of

these categories in the total net revenue of goods and services in the indicated periods:

Net revenue per type: in R$ million 2017 Part % 2016 Part % 2015 Part %


Rental 230.2 79.0% 312.3 78.7% 484.4 84.1%

Sales of new equipment 6.1 2.1% 8.0 2.0% 24.8 4.3%

Sales of semi new equipment 36.9 12.7% 41.8 10.5% 29.1 5.0%

Technical Assistance 5.6 1.9% 8.2 2.1% 7.9 1.4%

Indemnification and Recovery of Expenses 12.5 4.3% 26.3 6.6% 29.9 5.2%

(ii) Factors that materially affect the operational results

Costs of Goods and Services Rendered and Operational, General and Administrative

Expenses

Costs of products sold and services rendered (CPV) refer mainly to expenses with (i) personnel for

supervision of works, technical assistance, assembly, handling, maintenance of equipment and designers;

(ii) freight transportation of equipment, when responsibility of the Company and transfer of equipment;

(iii) rental of third-party equipment; (iv) expenses related directly to the administration of the warehouse,

storage, handling and maintenance of the leasing and resale assets, contemplating expenses with EPIs

used in the operational activities (handling, storage and maintenance), inputs (forklift gas, and

maintenance of machinery and equipment (forklifts, welding machines, hydrojadoras, hoists and tools in

general); (v) provisions for slow-moving inventories and for impairment.

In the fiscal years ended on December 31, 2015, 2016 and 2017, construction costs represented,

respectively, 45.1%, 46.0% and 50.1% of total costs of products sold and services rendered by the

Company, excluding depreciation.

Selling, general and administrative expenses refer to current expenses, such as salaries, benefits, travel,

representations of various departments, including Commercial, Marketing, Engineering and administrative

backoffice departments such as HR and Financial and Investor Relations, in addition to of the capital

expenses of the parent company and several subsidiaries (rents, fees, security and conservation and

cleaning, mainly), provisions for stock options programs, provisions for contingencies and some non-

permanent disbursements.

The amount of ADD represented 3.6% of net revenue in 2017, compared to 5.3% in 2016, and 6.6% in

2015.

Financial Result

The financial result comprises the Company's total financial expenses, net of the Company's total financial

income. The main financial expenses are interest on debentures, loans, leases and the counterpart of

adjustments to present value of short and long-term accounts receivable from the sale of the equipment

of the former Events Division. The main financial income corresponds to income from financial

investments, dividends and interest on securities eventually paid in arrears by the Company's clients.

The net financial result was negative in R$13.6 million, R$26.3 million and R$63.1 million in 2017, 2016

and 2015, respectively.

b. Changes in revenues attributable to changes in prices, exchange rates, inflation,

changes in volumes and introduction of new products and services

The Company's revenues are directly correlated with price variations and volumes of leased equipment

to its clients. The introduction of new products and services also directly impacts revenue. As for inflation,

its correlation with the Company's revenue is indirect, since the adjustments only occur in the renewal or

closure of new contracts, reflecting past inflation. Regarding the fluctuation of exchange rates, currently

the Company's revenue has no correlation with it, except that the equipments of the Rental business unit

are imported and, consequently, have their acquisition cost in foreign currency. Therefore, in the future,

the lease revenue of this business unit may be influenced by any exchange rate variation.

Below is the evolution of the physical utilization rate of the Construction and Rental units:

47,2%44,1% 42,7% 40,7% 38,5% 36,8% 36,6% 38,8% 38,0%

64,2%59,2% 57,0%

52,7% 52,5% 52,9% 53,3%57,5% 59,5%

4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17

Construction Rental

c. Impact of inflation, price variation of the main inputs and products, exchange rate

and interest rate on the Company's operational result and financial result, when relevant

The Company's operations and results are directly impacted by variations in (i) inflation rates, the rates

of which are used to readjust the Company's long-term contracts; (ii) interest rates, which affect the

indebtedness subject to floating interest of the Company; and (iii) prices of materials consumed in the

works or maintenance of the Company's equipment.

The Company's expenses are subject to inflationary impacts through the salary adjustments of its

personnel, the increase in the value of the services it contracts, such as freight, inputs used in rendering

services and financial expenses related to debentures with interest linked to the Accumulated variation of

the IPCA. In addition, the equipment in which the Company invests to use in its services is also subject

to increases due to inflation and changes in the price of commodities, mainly steel and aluminum. In the

case of the Rental business unit, the equipment used increases in price due to the oscillation of the

exchange, since they are imported.

The Company's indebtedness is subject to fluctuating interest rates, especially the CDI, IPCA and TJLP

rates. There is a risk that the Company will incur losses due to fluctuations in interest rates, which will

increase the financial expenses related to loans, financing and debentures raised in the market.

10.3 Directors should comment on the material effects that the events below have caused

or are expected to cause in the Company's financial statements and results

a. Introduction or disposal of operational segment

The Company did not make any introduction or any other disposal of operating segment in the fiscal

years of 2015, 2016 and 2017.

b. Constitution, acquisition or disposal of corporate interest

Sale of Industrial Services business unit

On July 10, 2013, the Company entered into an agreement for the sale of its Industrial Services business

unit to FIP Leblon Equities Partners V, fund managed by Leblon Equities Gestão de Recursos Ltda, through

its subsidiary Albuquerque Participações Ltda.. The sale price was defined on May 31, 2013 at R$102

million

This sale was made in line with the Company's strategy of focusing on business where its competencies

are capable of generating greater value for its shareholders and customers. As a result, the Company

ceased to operate in the Industrial Services sector, which offered access services, industrial painting,

surface treatment and thermal insulation, both in the construction phase and in the maintenance phase

of large industrial plants.

The operation was closed on November 30, 2013, had net income of R$8.3 million. Of the agreed sale

value of R$102 million, (i) R$25 million was paid on the contract signing date, in July 2013; (ii) R$17

million was paid in April 2014, discounting R$6.8 million of this amount, due to certain adjustments agreed

between the buyer and the Company; and (iii) the balance, in the amount of R$60 million, will be paid in

annual installments adjusted by CDI, from July 2014 to July 2017. This divestment is in line with Mills'

strategy of focusing on businesses in which their skills are capable of generating greater value for their

shareholders and clients.

c. Events or unusual operations

The Company did not realize unusual operations in the fiscal years of 2015, 2016 and 2017, except as

described above.

In 2015 the Company recognized impairment on Construction business unit and in the Rohr investment,

of R$57.1 million.

Applying the assumptions of Technical Pronouncement CPC-01 - Reduction to the Recoverable Value of

Assets, the Company performed impairment tests on its assets. After these tests, it was verified the need

to establish a provision for impairment in the amount of R$26.2 million for the investment made in Rohr

and R$30.9 million for the Construction Cash Generator. For the assets of the Rental business unit and

other assets of the Company, the need to perform recoverability tests was not identified.

The recoverable amount of these assets was determined based on economic projections to determine the

market value of the investee, through the income approach, through discounted cash flow projection,

within a period of 10 years for the purposes of the statement of the amount paid, the long maturity of

investments in infrastructure and civil construction. The main assumptions were: (i) revenues were

projected based on historical data, as well as growth prospects for the Brazilian segment and the Brazilian

economy; (ii) negative operational result in 2015, due to the reduction of activity in the sector; (iii) the

execution of a continuous program of improvement of productivity and reduction of costs and expenses

will cause its evolution to be lower than the percentage of growth of revenue; (iv) the respective flows

are discounted by the average discount rate, obtained through a methodology usually applied by the

market, taking into account the weighted average cost of capital (WACC); and (v) a policy of strict control

over the evolution of working capital, in the projection years.

In 2016, the Company now classifies the investment in Rohr as a financial asset available for sale,

therefore, subject to the fair value valuation. The adjustment to fair value is recognized as equity valuation

adjustment within shareholders' equity and the net effect shown in the Statement of Comprehensive

Income in the financial statements.


in Rohr through an internal study. The fair value of this asset was determined based on economic


ten years for the purpose of rationalizing the book value, due to the long maturity of investments in

infrastructure and civil construction. The respective flows are discounted by the average discount rate,


cost of capital (WACC). Based on this study, the Management estimates that the fair value of the

investment in Rohr as of December 31, 2016 is R$75.1 million (R$61.2 million as of December 31, 2015).

The fair value variation of R$13.9 million, less deferred income tax and social contribution of R$4.8 million,

was recorded in the Company's Shareholders' Equity as an asset valuation adjustment (R$ 9.1 million).


31, 2016 is R$75.1 million (R$61.2 million as of December 31, 2015). The fair value variation was recorded

in the Company's Shareholders' Equity as an asset valuation adjustment, net of deferred income tax and

social contribution, as of December 31, 2016.

Additionally, in 4Q16, a provision for impairment of R$3.9 million in third-party improvements was

recorded as a consequence of the demobilization project of Osasco, Campinas and Ribeirão Preto

branches of the Construction business unit, since such improvements in these subsidiaries will not take

place within the contractual term initially expected.

In 2017, the Company performed all necessary tests, but it was not necessary to establish impairment in

any of the cash generating units.


in Rohr through an internal study. The fair value of this asset was determined based on economic market

projections to determine its fair value through the income approach, through the projection of discounted

cash flow for a period of ten years plus perpertuity, for purposes of rationalization of the amount recorded

in view of the long maturity of investments in infrastructure and civil construction. Revenue was projected

on the basis of gross domestic product (GDP) plus broad consumer price index (IPCA), considering

multipliers. For costs and expenses, the indicator considered was the National Broad Consumer Price

Index (IPCA). Also considered was the need for working capital and investments to maintain the asset

tested. The respective flows were discounted at an average discount rate of 14.4%, including premium

per size of 1%, obtained through a methodology usually applied by the market, taking into account the

weighted average cost of capital (WACC). Growth rate in real terms in perpetuity was not considered.


31, 2017 is R$55.2 million (R$75.1 million as of December 31, 2016). The fair value variation of R$19.8

million was recorded in the statement of income as a result of the reclassification of R$13.8 million in the

statement of income of other comprehensive income as of December 31, 2016, R$6.0 million. The net

change was R$4.0 million considering the effect of deferred income and social contribution taxes as of

December 31, 2017.

10.4 The directors should comment about

a. Significant changes on accounting practices

New norms and interpretations

A number of new standards or changes in standards and interpretations will be effective for years beginning after January 1, 2018. The Company did not adopt these changes in the preparation of these

financial statements. The Company did not adopt these standards in advance. CPC 48 / IFRS 9 Financial Instruments

IFRS 9, published in July 2014, replaces the guidance in IAS 39 Financial Instruments: Recognition and

Measurement. IFRS 9 includes revised guidance on the classification and measurement of financial instruments, a new expected credit loss model for the calculation of the impairment of financial assets

and new requirements on hedge accounting. The standard maintains the existing guidance on the recognition and derecognition of financial instruments in IAS 39. IFRS 9 is effective for years beginning

on or after January 1, 2018. The Company has defined a methodology to monitor the movement history of the various agencies of the accounts receivable (initial adoption adjustment in the amount of

R$5,856), cash and cash equivalents (initial adoption adjustment in the amount of R$22), and linked

bank deposits (initial adoption adjustment in the amount of R$87) which will be the inductors for the calculation of impairment of these financial assets, the reflection of which will be recognized in the

opening balance sheet of 2018, for purposes of compliance with IFRS 9 - Financial Instruments. These preliminary reflections that will be recorded in the opening balance sheet of 2018 are shown in the table

below:

Balance on

December

31, 2017

Preliminary

adjustments on o

CPC48 /IFRS 9

Adjusted opening

balance on

January 1, 2018 Equity Balance

Cash and cash equivalents 67.826 (22) 67.804 Restricted bank deposits 150.519 (87) 150.432

Allowance for Doubtful Debts (ADD) (133.801) 5.856 (127.945)

IRPJ and CSLL deferred 159.973 (1.954) 158.019

Adjustment of equity valuation 5.875 (3.793) 2.082

According to the Company's management model, in its preliminary assessment, it is understood that the

classification and measurement of financial assets to be adopted for most financial investments will be

made at fair value through other comprehensive income and bank deposits linked to debentures will be classified as amortized cost.

The Company considers that its cash and cash equivalents and tied bank deposits have a low credit risk based on the external credit assessments of the counterparties. CPC 47 / IFRS 15 - Revenue from Contracts with Customers IFRS 15 requires an entity to recognize the amount of revenue reflecting the consideration it expects to

receive in return for control of those goods or services. The new standard will replace most of the detailed guidance on revenue recognition that currently exists in IFRS. The new standard is applicable

as of or after January 1, 2018. The standard may be adopted retrospectively using a cumulative effects approach. The Company contracted specialized consulting services to diagnose the requirements to

comply with IFRS 15 - Revenues from Contracts with Customers. The diagnosis was concluded and the

results of the analyzes were considered of low impact for the Company.

IFRS 16 - Leases

IFRS 16 introduces a single model for lesses to account for leases in the balance sheet. A lessee recognizes

a right-of-use asset that represents its right to use the leased asset and a lease liability that represents

its obligation to make lease payments. Optional exceptions are available for short-term leases and leases

of low value assets. The lessor accounting remains similar to the current standard, that is, the lessors

continue to classify the leases into finance leases and operating leases. The new standard will supersede

the new lease standards, including CPC 06 (IAS 17) Leases and ICPC 03 (IFRIC 4, SIC 15 and SIC 27)

Supplementary Aspects of Lease. The new standard is effective for annual periods beginning or after

January 1, 2019. Early application is permitted only for financial statements in accordance with IFRSs and

only for entities that apply IFRS 15 Revenue from Contracts with Customers beginning on or after the

date of initial application of IFRS 16. The Company will start the studies related to the implementation of

IFRS 16, as from the fourth quarter of 2017. It is expected to completed by the second quarter of 2018,

so as to be totally prepared for the definitive implementation of the new standard on January 1, 2019.

The Accounting Pronouncements Committee (CPC) has not yet issued an accounting standard or

amendment to the standard in effect related to IFRS 16. Therefore, the early adoption of this IFRS is not

permitted for entities that disclose their financial statements in accordance with accounting practices

adopted in Brazil.

Other amendments

The amended standards are not expected to have a significant impact on the Company’s financial

statements.

• Amendments to CPC 10 (IFRS 2) Share-Based Payment regarding the classification and

measurement of certain share-based payment transactions.

• Amendments to CPC 36 Consolidated Financial Statements (IFRS 10) and CPC 18 Investments in

Associates and Joint Ventures (IAS 28) regarding sales or contributions of assets between an investor

and its associate or joint venture.

b. Significant effects of alterations in accounting practices

There were no significant changes in accounting practices, methods of calculation, judgments, estimates

and assumptions in the Company's financial statements for the fiscal years ended on December 31, 2015,

2016 and 2017.

c. Qualifications and emphasis in the auditor's report

There were no qualifications or emphases in the auditors' report.

10.5 Directors should indicate and comment on the Company's critical accounting policies,

in particular the accounting estimates made by management on uncertain and relevant

matters for the description of the financial situation and results that require subjective or

complex judgments such as provisions, Contingencies, revenue recognition, tax credits,

long-lived assets, useful lives of non-current assets, pension plans, foreign currency

translation adjustments, environmental recovery costs, asset recovery test criteria and

financial instruments

The preparation of the Company's financial statements requires management to make judgments and estimates and adopt assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, as well as the disclosures of contingent liabilities, at the reporting date. However, the uncertainty regarding these assumptions and estimates could lead to results that require a significant adjustment to the book value of the affected asset or liability in future periods. The main assumptions regarding sources of uncertainties in future estimates and other significant sources of uncertainty in estimates at the balance sheet date involving significant risk of causing a significant adjustment in the book value of the assets and liabilities in the next financial year are:

Impairment of non-financial assets and investment recognized at fair value;

Transactions with payments based on shares;

Taxes;

Fair value of financial instruments;

Allowance for doubtful debts;

Provisions for tax risks, civil and labor charges;

Useful life of fixed assets;

Revenue Recognition.

The Company's management presents a discussion of what it considers as relevant accounting practices

to the presentation of the Company's financial information.

(i) Financial Instruments Financial assets and liabilities are recognized when the Company is part of the contractual provisions of the instrument. Financial assets and liabilities are initially measured at fair value. Transaction costs directly attributable to the acquisition or issuance of financial assets and liabilities (except for financial assets and liabilities recognized at fair value through profit or loss) are accrued or deducted from the fair value of financial assets or liabilities, if applicable, after initial recognition. Transaction costs directly attributable to the acquisition of financial assets and liabilities at fair value through profit or loss are recognized immediately in profit or loss. (ii) Income tax and social contribution currents and deferred Income tax and social contribution expenses for the period comprise current and deferred taxes. Income taxes are recognized in the statement of income, except in so far as they relate to items recognized directly in equity or in comprehensive income. In this case, the tax is also recognized in shareholders'

equity or comprehensive income. The current income tax and social contribution expense is calculated according to the tax bases in force in Brazil, at the date of presentation of the financial statements, which are 15%, plus an additional 10% of taxable income exceeding R$240 for the income tax and 9% on the taxable income for the social contribution on net income. The management periodically evaluates positions taken in relation to tax matters that are subject to interpretation and recognizes a provision when there is an expectation of payment of income tax and social contribution according to the tax bases. Deferred income and social contribution taxes are calculated on the temporary differences between the tax bases of assets and liabilities and the carrying amounts of the financial statements and on tax losses and negative bases. The tax rates currently set to determine these deferred credits are 25% for income tax and 9% for social contribution. Deferred tax assets are recognized to the extent that future taxable income is likely to be sufficient to be used to offset temporary differences, based on projections of future results prepared based on internal assumptions and future economic scenarios that may, therefore, changes. The recovery of the deferred tax asset balance is reviewed at the end of each reporting period and, when future taxable profits are not likely to be sufficient to enable the recovery of all or part of the asset, the asset balance is adjusted by the amount that is expected to be recovered. (iii) Fixed Assets: private use and leasing and operational use Leased assets and operational use is originate from most of the Company's revenues, either via rent only, or rent combined with assembly and disassembly. Property, plant and equipment for their own use mainly consists of the facilities for guarding the equipment, office, improvements, furniture and equipment necessary for the operation of these facilities. Property, plant and equipment are measured at historical cost, less accumulated depreciation. Historical cost includes expenses directly attributable to the acquisition of the items and may also include transfers of equity from any qualifying cash flow hedge gains/losses related to the purchase of property, plant and equipment in foreign currency. Subsequent costs are incorporated into the residual value of the asset or recognized as a specific item, as appropriate, only if the economic benefits associated with such items are probable and the amounts measured reliably. The residual balance of the replaced item is written off. Other repairs and maintenance are recognized directly in the income statement when incurred. Depreciation is calculated by the straight-line method, at the rates shown in Note 13, which take into account the estimated useful lives of the assets. Land is not depreciated. Gains and losses on disposals are determined by comparing the disposal values with the book value and are included in the operating result. The residual value and the estimated useful lives of the assets are reviewed each year and the effect of any changes in the estimates is accounted for prospectively. (iv) Goodwill Goodwill arising on a business combination is stated at cost on the date of the business combination, net of any accumulated impairment loss, if any. Goodwill is allocated to Cash Generating Units (CGUs) for the purpose of impairment testing. The allocation is made to the Cash Generating Units or Cash Generating Units groups that are expected to benefit from the business combination from which the goodwill originated and are identified according to the operating segment. (v) Reduction to recoverable value of assets At the end of each year, the Company reviews the book value of its tangible and intangible assets to determine if there is any indication that the assets have suffered any impairment. If there is an indication,

the recoverable amount of the asset is estimated for the purpose of measuring the amount of this loss, if any. When it is not possible to estimate the recoverable amount of an individual asset, the Company calculates the recoverable amount of the cash generating unit to which the asset belongs, for which purpose the Company considers its divisions as cash generating units. When a reasonable and consistent allocation base can be identified, the corporate assets are also allocated to the individual cash-generating units or to the smallest group of cash-generating units for which a reasonable and consistent allocation base can be identified. Intangible assets with indefinite useful life or not available for use yet are subject to the impairment test at least once a year and whenever there is any indication that the asset may present a loss due to impairment. The recoverable amount is the higher value between fair value less costs to sell or value in use, the latter being the method used by the Company in its recognizable goodwill test at the "Construction" cash generating unit. In the valuation of value in use, estimated future cash flows are discounted to the present value by the pre-tax discount rate, which reflects a current market valuation of the currency's value over time and the specific risks of the asset to which the estimate of future cash flows has not been adjusted. If the recoverable amount of a calculated asset (or cash-generating unit) is less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. Impairment losses are recognized immediately in the result. When the impairment loss is subsequently reversed, the carrying amount of the asset (or cash generating unit) increases to the revised estimate of its recoverable value, provided that it does not exceed the book value that would have been determined, if none impairment loss had been recognized for the asset (or cash-generating unit) in prior years. The reversal of the impairment loss is recognized immediately in the result. (vi) Provisions Provisions are recognized when the Company has a present, legal or non-formalized obligation, as a result of past events and it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate of the amount may be made. Provisions for tax, civil and labor risks are recorded at the amount of probable losses, considering the nature of each provision (Note 23). Management, based on the opinion of its legal advisors, understands that the provisions set up are sufficient to cover possible losses with lawsuits in progress. Provisions are measured at the estimated amount of expenses that must be required to settle the obligation, using a pre-tax rate that reflects the current market valuations for the time value of money and the specific risks of the obligation. The increase in the obligation as a result of the passage of time is recognized as an expense in the statement of income. (vii) Stock Option Plan The Company offers to certain employees and executives stock option plans. The fair value of the options granted is recognized as an expense during the period in which the right is acquired; period during which the specific conditions for the acquisition of rights should be met. At the balance sheet date, the Company reviews its estimates of the number of options whose rights are to be acquired based on the conditions. It recognizes the impact of the revision of the initial estimates, if any, in the income statement, as a counterpart to the capital reserve in shareholders' equity. The amounts received, net of any directly attributable transaction costs, are credited to equity, when the options are exercised. (viii) Post-employment benefits The post-employment benefits granted and to be granted to former employees are accrued based on an

actuarial calculation prepared by an independent actuary, through future projections related to various parameters of the benefits evaluated, such as inflation and interest, among other aspects. The actuarial

assumptions adopted for the actuarial calculation were formulated considering the long-term projections for which they are intended (see note 21.b). Actuarial gains and losses are recognized in other

comprehensive income in the account "Equity valuation adjustments and presented in shareholders'

equity. (ix) Loans and financing

Loans are initially recognized at fair value and are subsequently stated at amortized cost. The calculation

methodology for each loan follows the particular conditions of each agreement, using the effective interest

rate method.

The rates and taxes paid for contracting the loan are recognized as costs of the loan transaction, and are also recorded under the heading of financial expenses at the effective interest rate.

Management monthly controls the balances of each debt through management controls, in which it updates the financial indicators (interest rates) as agreed in each contract.

Loans and financing are classified in current liabilities, except for installments that can be unconditionally

settled after 12 months of the financial statement closing date. (x) Revenue Recognition Revenue from services rendered is recognized based on the measurement of the stages of execution of services performed up to the balance sheet date. Revenue from sale of goods is recognized when significant risks and property benefits of the goods are transferred to the buyer. The Company adopts as revenue recognition policy, therefore, the date on which the product is delivered to the buyer. Lease revenue is recognized pro-rata temporis in the income on a monthly basis on a straight-line basis in accordance with equipment lease contracts, classified as operating leases, and there are no contingent or non-cancelable receipts recognized as revenue during the term of the agreement. The Company separates the identifiable components of a single contract or a group of contracts to reflect the substance of a contract or group of contracts, recognizing the revenue of each of the elements in proportion to its fair value. In this way, the Company's revenue is divided into leasing, technical assistance, sales and compensation/recovery of expenses. Interest income is recognized on a pro rata basis, taking into account the outstanding principal and the effective rate over the period to maturity, when it is determined that such revenue will be appropriated to the Company. Investment dividend income is recognized when the shareholder's right to receive such dividends is established (provided it is probable that future economic benefits will flow to the Company and the amount of revenue can be reliably measured). Revenues, expenses and assets are recognized as net of taxes on sales.

10.6 The directors must describe the relevant items not evidenced in the financial

statements of the issuer, indicating:

a. The assets and liabilities held by the Company, directly or indirectly, that do not

appear on its off-balance sheet items, such as: (i) operating leases, assets and

liabilities, (ii) portfolios of written-off receivables over which the entity maintains

risks and liabilities, indicating the respective liabilities, (iii) ) Contracts for future

purchase and sale of products or services, (iv) construction contracts not completed,

(v) contracts for future receipts of financing

The Company does not stablish relevant assets and liabilities not evidenced in the financial statements

of the fiscal years of 2015, 2016 and 2017.

a. Other items not evidenced in the financial statements

In the directors evaluation, does not have relevant items not evidenced in the financial statements of the

Company in the fiscal years of 2015, 2016 and 2017.

10.7 Related to each item not evidenced in the financial statements indicated on item 10.6,

the directors should comment:

a. As such items change or may change the revenues, expenses, operational results,

financial expenses or other items of the Company's financial statements



b. Nature and purpose of the operation



c. Nature and amount of the obligations assumed and of the rights generated in favor

of the Company as a result of the operation



10.8 The directors must indicate and comment on the main elements of the Company's

business plan, specifically exploring the following topics:

a. Investments, including: (i) quantitative and qualitative description of the

investments in progress and the investments planned; (ii) sources of investment financing;

And (iii) relevant ongoing divestitures and planned divestitures.

The Company targets its investment policy in accordance with demand prospects in its operating markets,

its cash generation and the availability of credit in the market. In order to guarantee the necessary

resources for the implementation of its investment plan, the Company has established a statutory reserve

for expansion, to which shareholders may allocate up to 75% of adjusted net income, provided that said

reserve does not exceed the limit of 80% of the Company's subscribed capital stock. Cash generation

from the Company's normal operations from retained earnings was used to partially finance the

investments made in 2014 and 2015.

In the years 2017, 2016 and 2015, as the Company presented a net loss, no reserve was established.

The following table is a comparative of investments made in 2017, 2016 and 2015:

2017 2016 2015

(B)/(A) (C)/(B) (A) (B) (C)

Total Capex 29.5 5.5 28.2

-

81.2% 410.0%

Assets for leasing 17.5 1.9 11.7

-

88.9% 507.2%

Contruction 10.6 1.8 11.6 -82.8% 536.4%

Rental 9.5 0.1 0.0 -98.8% -87.4%

Corporative and use goods 12.0 3.6 16.4

-

70.0% 357.6%

Mills invested R$29.5 million in 2017, of which R$17.5 million in rental equipment, 804.3% higher than

the amount invested in 2016. Due to the characteristics of its equipment, the Company may maintain a

low level of investment by some years, if necessary, without reducing its operational capacity.

The Company intends to finance its investments with (i) cash generated from its own activities, and (ii)

indebtedness. For strategic operations, when necessary, the Company may use the capital of its

shareholders or third parties, through the issuance of shares.

Investments planned for 2018

For the year 2018, given the high idle rate of the Construction unit equipment and the relatively low

average age of our equipment in both business units, total investment will be low, at a lower level than

in 2017 .

b. Provided it has already been disclosed, indicate the acquisition of plants, equipment,

patents or other assets that should materially influence the Company's productive capacity

The Company does not intend to invest to increase its asset base in 2018.

c. New products and services, indicating: (i) description of ongoing research already

disclosed; (ii) total amounts spent by the Company on research to develop new products or

services; (iii) projects already under development; and (iv) total amounts spent by the

Company in the development of new products or services

The Company's management believes that providing innovative solutions is a constant mark of its

activities and an essential aspect to customer loyalty. In this sense, although the Company does not carry

out research and development activities internally, it annually visits the main national and international

industrial and construction equipment fairs to meet the main technological innovations available to the

industry in which the Company operates. In addition, representatives of the Company visit the factories

of the main national and international manufacturers of equipment as well as construction sites worldwide

to evaluate the operation and operation of the latest equipment available for purchase.

The Company does not develop new products and services, therefore, it does not incur expenses related

to the research and development area. Much of the technology and innovation present in the equipment

and offered to the Company's customers comes from its suppliers. The Company often perfects

technology and adapts Brazilian culture and constructive methodology. For this purpose, the Company

seeks to acquire or license new technologies from third parties under acceptable conditions in the

domestic and international market, preferably with usual suppliers with which the Company seeks to

establish long-term partnerships. As an example of such partnerships, in 1996 the Company formed an

association with the German company NOE Schaltechnik, which granted it a license to manufacture and

distribute NOE forms, which were made up of modular steel and aluminum panels (instead of wood), an

innovation in the Brazilian market.

With its team of designers and engineers, the Company has already developed special systems internally

without incurring significant investments, for example, the SM Mills.

10.9 Comments on other factors that have materially influenced the operational

performance and that have not been identified or commented on in the other items of this

section

There are no other factors that significantly influenced the operational performance in the fiscal years of

2015, 2016 and 2017 and that have not been identified or commented on in the other items of this

section.

As a well-targeted primary target audience, advertising investments focus on targeted actions, be they

direct marketing, email marketing, relationship actions, or online advertising. In addition, since the

services rendered by the Company consist mainly of activities related to construction, the Company

prioritizes the sponsorship of projects focused on the reconstruction and enhancement of urban space or

using the Company's equipment. Following this line, since 2013, the Company has been supporting actions

related to urban art, such as graffiti projects and street dances, in Rio de Janeiro, São Paulo, Fortaleza,

Belo Horizonte, Brasilia, Goiânia and Salvador. In 2015, he also sponsored the show "Ópera do Malandro",

which used the Company's equipment as a backdrop and was presented in nine of the squares where the

Company operates, providing a relationship with clients who were invited to attend the show. In 2016,

we supported Rio H2K, an international festival of urban dances in Rio de Janeiro, where Mills' equipment

was used on the stage, in the signage of spaces and also as support for artists in dance performances.

In the same year we were present at Art Rua, an event we have supported since 2013, providing

equipment for the painting of large panels, creating a new space for urban culture in the capital of Rio.

11.1 Identification of projections

Not applicable, as the Company does not disclose guidance.

11.2 Projection monitoring

Not applicable, as the Company does not disclose guidance

11.2 – Monitoring and alterations of released projections

11.2 Projection monitoring

Not applicable, as the company does not disclose guidance

12.1 Administrative Structure

a. Responsibilities of each body and committee

BOARD OF DIRECTORS

The Board of Directors is the collective decision-making body of the Company, responsible for establishment of its general business policies, including its long-term strategy. It is also responsible, among other duties, for overseeing the management of our Board of Executive Officers. In accordance with the Company’s by-laws, the Board of Directors shall be comprised of a minimum of five and a maximum of 11 members, shareholders or not, in accordance with the Novo Mercado Listing Rules. Members of the Board of Directors are to be elected for a continuous two-year term at the General Shareholders’ meeting. Further, such members may be reelected and removed from office at any time by a decision of the Company´s shareholders, at the General shareholders’ meeting. The Brazilian Corporation Law, in conjunction with CVM Instruction No. 282 of June 26, 1998, allows the the adoption of the multiple vote process, upon request by shareholders representing, at least, 5% of the voting capital of the Company. Not being asked to adopt multiple voting, the directors are elected by the majority vote of shareholders holding the shares issued by the Company, present or represented by prosecutor. In addition, the holders of common shares issued by a Company representing 10% of the capital stock may aggregate their shares in order to elect and dismiss a member of the board of directors and his/her alternate, by a separate vote without the participation of Controlling shareholders. Currently, the Company’s Board of Directors is comprised of five members (without substitutes), of which were elected at Ordinary and Extraordinary Shareholders’ Meeting held on April 26, 2018. The termo f these directors is unified for two years, ending on the date of the Ordinary General Meeting in 2020.

The table below presents the information related to the members of the Board of Directors.

Name Profession CPF Title

Date of Last Election

Date of office

Termo f office

Other titles in

the Company

Elected by the controling shareholders

If independent member, criterion used to

determine the

independence

Number of consecutive terms

Elio Demier

Bachelor of Social Communication

260.066.507-20

Co-Chairman

4.26.2018

4.26.2018

2 years No Yes Not applicable.

3

Roberto Pedote

Lawyer and Public Administration

115.324.298-27

Co-Chairman

4.26.2018

4.26.2018

2 years

Yes, is a member of the Finance and Risk and Human Resources Comittee

Yes

Is an independent member. The criteria used by the Company to determine its Independence was established by the Listing Regulation of the Novo Mercado of BM&FBOVESPA.

1

Fabio Bruggioni

Business Administrator

266.193.038-89

Independent Director

4.26.2018

04.26.2018

2 years No Yes


1

Eduardo Wurzmann

Economist

085.702.5 98- 83

Independent Director

4.26.2018

4.26.2018

2 years

Yes, is a member of the Finance and Risk committee.

No.


-

According to the Novo Mercado Listing Rules and the Company’s bylaws, the company’s board of directors must have at least 20% independent members. Whenever the percentage of 20% mentioned above results in fractional number of members, the number shall be rounded to reach a whole number: (i) immediately above, if fractional number is equal to or higher than 0.5; or (ii) immediately below, if fractional number is lower than 0.5. Since the Company’s Board of Directors is composed of six members, it should have at least one independent director. The Independent director should be identified as such in the minutes of the General Shareholders meeting that elects him. Currently Mr. Nicolas Arthur Jacques Wollak and Mr. Jorge Camargo are the Company’s Independent Directors. The decisions of the Company’s Board of Directors are taken by a majority vote of the members that are present. Under Brazilian corporate law, members of the board of directors are prohibited to vote in any meeting ou General Meeting, on any matter or intervene in any transaction that would create a conflict of interest between the Company and that board member.

Francisca Kjellerup Nacht Business

Administrator

124.175.657-06

Advisor Tutelary

4.26.2018

4.26.2018

2 years

Yes, is a member of the Human Resources Committee.

Yes Not applicable.

2

EXECUTIVE BOARD The Company’s Executive Officers are responsible for the management of daily operations of the business and for implementing the general policies and guidelines established by the Board of Directors. The Brazilian corporate law provides that executive officers must reside in Brazil and that they may or may not be shareholders of the company in which they serve. In addition, up to one-third of the members of a company’s Board of Executive Officers may also serve as members of the Board of Directors. The Company’s board of directors elects the members of the board of executive officers for one-year term and they may be reelected. Any executive officer may be removed by the board of directors before the expiration of his or her term. According to the Company’s bylaws, the board of executive officers must be comprised of four to eleven officers, including one chief executive officer, one chief financial officer and the remaining without specific designation. The table below indicates the name, age and title of the board of executive officers.

FISCAL COUNCIL

Under the Brazilian Corporate Law, the Fiscal Council is responsible for: (i) reviewing, by any of its members, the actions of management and verify compliance with its legal and statutory duties; (ii) opine on management's annual report, including in its opinion the additional information it deems necessary or useful to the General Meeting decision; (iii) give their opinion on the administrations’ proposals, to be submitted to the General Meeting, relating to changes in capital, issuance of debentures or warrants, capex plans or capital budget, capital distribution, dividend distribution, transformations, incorporations, merger or split up; (iv) report, by any of its members, to the administrators or, if they do not take the necessary action to protect the interests of the company, to the general meeting, the mistakes, fraud or crimes they find out, and suggest necessary measures to the company; (v) convene the ordinary shareholder meeting, if the administrative bodies delay for more than one month calling, and extraordinary, whenever there are serious or urgent matters, including in the agenda the subjects they deem relevant; (vi) analyze, at least quarterly, the balance sheet and other financial statements periodically prepared by the company; (vii) review and give an opinion on the financial statements of the fiscal year; and (viii) exercise those powers during the settlement, in view of the special rules that govern it. According to the Company's Bylaws, the Fiscal Council works on a permanent basis, and consists of three members and an equal number of alternates, shareholders or not, resident in Brazil and elected at the General Meeting, when

Name

Date of

Birth Professi

on CPF Title

Date of Last

Election Date of office

Term of Office

Other titles

Elected by the

Controlling

Shareholder

Sérgio Kariya

3/2/1974

Engineer 197.064.3

78-19

Chief Executive

Officer 3.8.2018 3.8.2018

Until OGM 2019

No Yes

James Oliver Guerreiro Carneiro

10/7/1978

Accountant

074.984.447-71

Chief Financial

Officer and Investor

Relations Officer

7/2/2018 7/2/2018 Until OGM

2019

Ricardo de Araujo Gusmão

9/6/1968

Engineer 987.271.9

27-68

Officer without specific

designation

3.23.2018

3.23.2018 Until OGM

2019 No Yes

Daniel Fabricio Fernandes Brugioni

01/29/1974

Engineer 159.072.3

78-30

Officer without specific

designation 3.23.201

8 3.23.2018

Until OGM 2019

No Yes

will determine their remuneration. The Chairman of the Fiscal Council is elected at the General Meeting. At the Ordinary and Extraordinary General Meeting held on April 26, 2018, the Company's shareholders elected three members and three alternates. The table below presents name, age and title of the Fiscal Council members:

Name Date of Birth

Profession

CPF Title

Date of Last

Election

Date of Office

Termo f

Office

Other titles in

the Compan

y

Elected by the

Controlling

Shareholder

If independent member,criterion used

to determine the

independence

Number of

consecutive terms

Eduardo Botelho Kiralyhegy

03/13/1979

Lawyer 082.613.217-03

President

04/26/2018

04/26/2018

1 year No Yes Not applicable

7

Leonardo Roslindo Pimenta

05/25/1976

Lawyer 016.749.907-66

Alternate

04/26/2018

04/26/2018


2

Rodrigo Fagundes Rangel

07/25/1977

Accountant

073.533.3 57-26

Member

04/26/2018

04/26/2018


-

Henry Stanle y de Oliveir a Carpen ter

06/27/1964

Accountant

759.571.4 07/91

Alternate

04/26/2018

04/26/2018


-

Peter Edwar d Cortes Marsden

02/05/1972


168.126.6 48-20

Member

04/26/2018

04/26/2018

1 year No No Not applicable

-

Marcio Villas Boas Passos

02/12/1971

Economist

911.779.7 97-72

Alternate

04/26/2018

04/26/2018

1 year

No No Not applicable

-

ADVISORY COMMITTEES

In November 2016, the Board of Directors approved the establishment of two committees of (i) Finance and Risks and (ii) People and Management, with the purpose of making the performance of the Board of Directors more efficient, enhancing the relevant discussions with substantiated recommendations, assisting in the performance of their legal and statutory functions. The two committees have non-permanent character, and may be freely created or terminated by the Board of Directors. The creation of these new advisory committees is aligned with the Company's objective of always improve its decision-making process and adopt the best corporate governance practices. The current members of the People and Management Committee are: Francisca Nacht (Member of the Board of Directors), Roberto Pedote (Co-Chairman of the Board of Directors) and Marcelo Luis Oticelli. The current members of the Finance and Risk Committee are: Roberto Pedote (Co-Chairman of the Board of Directors)

and Eduardo Luiz Wurzmann (Member of the Board of Directors). The committees are non-permanent, and may be freely created or terminated by the Board of Directors.

12.2 Rules, policies and practices related to general meetings

a. Call times

Law Corporation requires that all general meetings are convened by three publications in the Official Gazette or The State in which is situated the Company’s headquarters, and another major newspaper. Publications of Mills Estruturas e Serviços de Engenharia SA (“Mills” or “Company”) are currently made in the Official Gazette of the state of Rio de Janeiro, official vehicle government of the state of Rio de Janeiro and in Valor Econômico in the state of Rio de Janeiro, the first convocation at least 15 days before the date of the meeting and the second convocation held eight days in advance, as provided for in the Law of Corporations. The CVM may, however, in certain circumstances, determine that the first call for general meetings of shareholder’s is made up to 30 days pior to the date on which the documents relating to matters to be resolved are made available to shareholder’s. The Company, when possible, seeking to anticipate the deadline for the first call of the General Assembly, so that the shareholder’s have access to information of the General Assembly with higher advance that required by law. Under the heading and the sole paragraph of Article 8 of CVM Instruction 559/15, the issuing of shares to serve as ballast to sponsored DR program must call a general meeting with the deadline minimum 30 days in advance, except in cases where the type of class of shares that cartificates is not entitled to vote at any of the matters of the respective meeting.

b. Skills

Not with standing the other matters provided for by law, be responsible exclusively to the General Assembly:

Take the management accounts, examine, discuss and vote the management report and the Company's financial statements, accompanied by the independent auditors and the opinion of the Fiscal Council;

To rule on the proposed capital budget of the Company;

To rule on the Executive Board's proposal for allocation of income social;

Reforming By-laws;

Establish the compensation of the Company's management;

Assign stock dividends and decide on any grouping and splitting of actions;

Elect and dismiss the members of the Board of Directors;

Elect and dismiss the members of the Fiscal Council, if installed;

Establish option granting plan or subscription for shares to directors and employees of the Company and its subsidiaries;

Resolve the cancellation of the registration as a publicly-held by CVM, pursuant to Chapter VII of the By-laws;

To decide, in accordance with Chapter VII of the By-laws, on the delisting from the New Market; and

Choose the specialized company responsible for preparing the appraisal report of the shares the Company, in case of public company deregistration with the CVM and exit New Market, among the companies indicated in a triple list by the Board of Directors.

c. Addresses (physical or electronic) where the documents relating to the General Assembly will be available to shareholders for analysis

Documents relating to matters to be decided by the General Assembly are available to shareholders at the Company's headquarters located at Road Guerenguê, 1381, Taquara, Jacarepaguá, ZIP code 22713-002, in the City and State of Rio de Janeiro.

Moreover, these documents are available to shareholders in the electronic addresses of the Company

(www.mills.com.br/ri), CVM (www.cvm.gov.br) and BM & FBOVESPA (www.bmfbovespa.com.br).

d. Identification and management of conflicts of interest

The Company’s Code of Conduct, approved on May 21, 2015 for the Board of Directors, contains elements for identification and managent of conflicts of interest, applying even Company meetings to. Among others, the Code of Conduct provides that Mills’ employees can not be members or owners, or have a spouse or children, as owners of companies that provide materials and services for the Company. Employees may not also favor relatives or friends in any form, including recruitment and service contracting process. The employee who has kin ship with people linked to suppliers or potential suppliers of Mills, including kin ship 2nd degree, brother and father in law, should report indeed formally to his immediate superior, so that there is transparency and impartiality in the acquisition. In that case, it is up to the Board to authorize the participation of competition and the employee must have a degree of kin ship should automatically get out of the decision of the hiring process. Additionally, in accordance with the Code of Conduct, transactions with related parties should be avoided and carried out should be clearly beneficial to the Company, or should seed conditions equal or better than the market, adjusted for risk factors involved. For a description of the Company’s mechanisms to prevent and mitigate conflicts of interest in transactions with related parties, see item 16.3.

e. Request proxy by management for the exercise of voting rights

The proxy request follows the legal and regulatory requirements. To date, the Company management has never made a public request for proxy.

f. Necessary for acceptance of proxies granted by shareholders, indicating that the Company requires or waiver notarization, notarization, consularization and certified translation and the Company accepts proxies granted by shareholders by electronic means

Subject to the provisions of article 126 of Law 6,404 / 76, to shareholders who are represented by proxy, are requested to deliver the headquarters of the office of the Company and the documents attesting the powers of the legal representative, preferably with the advance of two (2) business days from the date of the Meeting. Under the Company's Bylaws, shareholders may be represented at Meetings Company general by a proxy appointed less than a year and that is a shareholder or Company manager, attorney or financial institution. In the meetings held in the last fiscal year, the Company adopted the following practices as the procedures for acceptance of proxies granted by shareholders:

were required to, in the case of attorney issued by a legal entity, the power of attorney was accompanied by documentation proving the powers of the representatives who signed it; and

asked if that documents from abroad were notarized in their country of origin, consularized, translated by a public translator and registered in the registry office papers and documents in Brazil.

The Company does not accept proxies granted by electronic means.

g. Necessary for acceptance of ballot distance when sent directly to the Company, indicating that the Company requires or waiver notarization, notarization and consular

The shareholder who opts to exercise his right to vote at distance by sending the distance voting directly to the Company, shall submit the following documents to Estrada do Guerenguê, 1,381, Taquara, Jacarepaguá, Zip-code 22.713-002, in the city and state of Rio de Janeiro, to the attention of the Investor Relations Department and ensure that the Company receive them up to 7 (seven) days before the date of the General Meeting in question: • physical form of the bulletin related to the general meeting duly completed, initialed and

http://www.bmfbovespa.com.br/

signed; • certified copy of the following documents:

(i) for individuals: photo ID (RG, RNE, CNH or Passport) of the shareholder;

(ii) for legal entities: identity document with photo (RG, RNE, CNH or Passport) of the legal representatives and last statute/consolidated social contract in jointly with the corporate documents proving the legal representation of the shareholder; (iii) for investment funds: photo ID (RG, RNE, CNH or Passport) of the legal representative, the last statute/consolidated social contract of its administrator or manager, as the case may be, the voting policy of the fund in conjunction with the corporate documents that prove the powers of representation.

The Company will require the signature of the ballot papers signed in Brazilian territory and the notarization and apostilation of those signed outside the country.

In addition, the Company will notify the shareholder if the documents received are sufficient or that the vote is considered valid, within three (3) business days of receipt of the documents.

h. If the Company provides electronic system for receiving the ballot the distance or distance participation

The shareholder may send the required documentation through the electronic address [email protected], provided that they then, forward, send the originals to the Company's address, as set forth in sub-item (g) above.

i. Instructions for shareholder or group of shareholders including proposed resolutions, plates or candidate members of the Board of Directors and Fiscal Council ballot distance

If the shareholder wants to include proposals for deliberations, slates or candidates for members of the Board of Directors or Fiscal Council on the distance ballot paper, it will be necessary to present such proposals no later than 45 (forty-five) days before the date of the Ordinary General Meeting in question (or 35 days in the event of an Extraordinary General Meeting for the purposes set forth in article 21-L, paragraph 1, II of CVM Instruction 481/09) by means of correspondence sent to the address: Estrada do Guerenguê, 1,381, Taquara, Jacarepaguá, Zip-code 22.713-002, in the City and State of Rio de Janeiro, to the attention of the Investor Relations, A/C: Investor Relations Department, jointly with the documents pertinent to the proposal, or by e-mail at [email protected].

The Company will notify the shareholder within three (3) business days of receipt of the suffice for inclusion in the ballot paper to be disclosed by the Company.

j. If the Company offers forums and pages on the World Wide Web to receive and share shareholders' comments on the agendas of meetings

The Company does not maintain forums or pages on the World Wide Web intended to receive or share feedback from shareholders.

k. Other information needed to participate distance and the right of remote voting

Shareholders holding shares issued by the Company that are deposited in depositary may transmit voting instructions to complete the vote through their respective custodians, if they belong to this kind of service. The shareholders may also make a registration jointly with obtaining a certificate and transmit their voting instructions to the Company’s depositary, Itaú. Registration and step-by-step information for issuing the certificate are described at the following address: Http://www.itau.com.br/securitiesservices/assembleiadigital/.

12.3 Board rules, policies and practices

O Conselho de Administração será composto por um número mínimo de cinco e um número máximo de onze membros efetivos, acionistas ou não, eleitos pela Assembleia Geral, com mandato unificado de dois anos, podendo ser reeleitos. O Conselho de Administração terá um Presidente e um Vice-Presidente ou dois Co-Presidentes (caso a Assembleia Geral opte pelo Regime de Co-Presidência), a serem eleitos dentre seus membros pela Assembleia Geral. Em caso de adoção do regime de Co-Presidência no curso de um mandato, o Presidente e Vice-Presidente serão automaticamente conduzidos à função de Co-Presidentes. Dos membros do Conselho de Administração, no mínimo, dois ou 20%, o que for maior, deverão ser Conselheiros Independentes,

conforme a definição do Regulamento do Novo Mercado, devendo a caracterização dos indicados ao Conselho de Administração como Conselheiros Independentes ser deliberada na Assembleia Geral que os eleger, devendo a qualificação como Conselheiro Independente ser expressamente declarada na ata da referida Assembleia Geral. Quando, em decorrência do cálculo do referido percentual, o resultado gerar um número fracionário de Conselheiros, proceder-se-á ao arredondamento para o número inteiro imediatamente superior. The Board of Directors shall be composed of a minimum number of five and a maximum number of eleven effective members, shareholders or not, elected by the General Meeting, with a unified mandate of two years, and may be re-elected. The Board of Directors will have a Chairman and a Vice-Chairman or two Co-Chairmen (if the General Assembly chooses the Co-Presidency Regime), to be elected from among its members by the General Assembly. In case of adoption of the Co-Presidency regime in the course of a term of office, the Chairman and Vice-Chairman shall be automatically led as Co-Chairmen. Of the members of the Board of Directors, at least two or 20%, whichever is greater, shall be Independent Directors, as defined in the Novo Mercado Regulation, and the characterization of those appointed to the Board of Directors as Independent Directors be deliberated at the Meeting General who elects them, and the qualification as Independent Board Member shall be expressly declared in the minutes of said General Meeting. When, as a result of calculating said percentage, the result generates a fractional number of Directors, the rounding up to the next higher whole number shall be done.

a. a. Number of meetings held during the last fiscal year, broken down number of ordinary and extraordinary meetings

Ordinary Extraordinary

9 8

b. If there are, the provisions of the shareholders' agreement establishing restrictions or linking the exercise of members voting of the Board of Management

None.

c. Rules for identification and management of conflicts of interests

See item 16.3.

d. if the issuer has a policy of appointment and filling positions of the board of directors formally approved, informing, if there is a positive: i. body responsible for approving the policy, date of approval and, if the issuer discloses the policy, locations on the worldwide computer network where the document can be consulted ii. main features of the policy, including rules relating to the procedure for nominating board members, the composition of the board and the selection of its members

None.

12.4 Describe the arbitration clause included in the statute for the resolution of conflicts among shareholders and between these and the issuer through arbitration The Company, its shareholders, administrators and members of the Fiscal Council undertake to resolve, through arbitration, before the Market Arbitration Chamber, any dispute or controversy that may arise among them, related to or resulting from, especially, the validity, effectiveness, interpretation, violation and its effects of the provisions of Law 6.404 / 76, the Bylaws, the rules issued by the National Monetary Council, the Bank Central Brazil and the Securities and Exchange Commission, as well as other rules applicable to operation of capital markets in general, besides those of the New Regulation of constant Market, the Sanctions Regulation, the New Market Participation Agreement and Arbitration Rules of the Market Arbitration Chamber.

12.5/6 - Information about Administration and members of the Fiscal Council

Board of Directors

Name Date of Birth Profession CPF Title Date of

Last Election

Date of Possession

Term of Office

Other titles in the

Company

Elected by the Controlling Shareholder

If independent member, criteria

used to determine the independency

Number of consecutive

terms

Elio Demier 01/28/1951 Bachelor in Social Communication

260.066.507-20 Co-Chairman of the Board of Directors

04/26/2018 04/26/2018 2 years

Yes, he is a member of the Human Resources Committee

Yes Not applicable. 3

Roberto Pedote

02/24/1967 Bachelor in Law and Public Administrator

115.324.298-27 Co-Chairman of the Board of Directors

04/26/2018 04/26/2018 2 years

Yes, he is a member of the Finance and Risk Committee

Yes

Yes, he is an independent member, as defined in the terms of the B3 Novo Mercado Listing Regulation

1

Francisca Kjellerup Nacht

12/28/1970 Business Administrator

124.175.657-06 Holder Advisor 04/26/2018 04/26/2018 2 years

Yes, he is a member of the Human Resources Committee

Yes Not applicable. 2

Fabio Bruggioni

04/25/1974 Business Administrator

115.324.298-27 Independent Advisor

04/26/2018 04/26/2018 2 years No Yes

Yes, he is an independent member, as defined in the terms of the B3 Novo Mercado Listing Regulation

1

Eduardo Wurzmann

12/03/1965 Economist 085.702.598- 83

Independent Advisor

04/26/2018 04/26/2018 2 years

No No Yes, he is an independent member, as

defined in the terms of the B3 Novo Mercado

Listing Regulation

-

Fiscal Council

Name Date of Birth

Profession CPF Title Date of Last

Election Date of

Possession

Term of

Office

Other titles in the

Company


If independent member, criteria used to determine the independency


terms

Eduardo Botelho Kiralyhegy

03/13/1979 Lawyer 082.613.217-03 Chairman of the Fiscal Council

04/26/2018 04/26/2018 1 year No Yes Not applicable. 7

Leonardo Roslindo Pimenta

05/25/1976 Lawyer 016.749.907-66 Alternate 04/26/2018 04/26/2018 1 year No Yes Not applicable. 2

Rodrigo Fagundes Rangel

07/25/1977 Accountant 073.533.357-26 Effective 04/26/2018 04/26/2018 1 year No

Yes Not applicable. -

Henry Stanley de Oliveira Carpenter

06/27/1964 Accountant 759.571.407/91 Alternate 04/26/2018 04/26/2018 1 year No

Yes Not applicable. -

Peter Edward Cortes

Marsden Wilson

02/25/1972 Administrator 168.126.648-20 Effective

04/26/2018 04/26/2018

1 year No No Not applicable. -

Marcio Villas Boas Passos

02/121971 Economist 911.779.797-72 Alternate 04/26/2018 04/26/2018

1 year No No Not applicable. -

Statutory Board

Name Date of

Birth Profession CPF Title

Date of Last Election

Date of Possession

Term of

Office

Other titles in the

Company


If independent member, criteria used to determine the independency


terms


10/7/1978 Accountant 074.984.447-71

Investor Relations Officer

7/2/2018 7/2/2018 1 year He is also

Chief Financial Officer

Yes NA 0

Sérgio Kariya 03/02/1 974

Engineer 197.064.378-19

Chief Executive Officer

03/08/2018 03/08/2018 1 year - Yes NA 3

Daniel Fabricio Fernandes Brugioni

01/29/1974 Engineer 159.072.378-30

Director without specific name

03/23/2018 03/23/2018 1 year - Yes NA 0


09/06/1968 Engineer 987.271.927.68 Director without specific name

03/23/2018 03/23/2018 1 year -

Yes NA 3

Professional Experience and eventual condenations

Board of Directors

Francisca Kjellerup Nacht - 124.175.657-06

Mrs. Francisca Kjellerup Nacht holds a degree in Business Administration and Economy from the Copenhagen

Business School, Denmark, since 1995. The granddaughter of Mr. Jose Nacht, one of the founders of the

Company, and daughter of Andres Cristian Nacht, Chairman of the Board of Directors of the Company, has

built her career in Europe, where she lives since 1990. Francisca worked for Procter & Gamble Nordic between

1997 and 2010, mainly in the fields of leadership and business development. Among other positions,

Francisca was responsible for the commercial integration after Gillette’s acquisition, as well as for the

business with the largest retailer of Denmark. In her last position at P&G, she was responsible for initiating

and leading the pharmaceutical division in the Nordic region. Since 2011, is a member of the Board of

Directors for the foreign social business Bybi. In the last five years, besides her position at P&G, Francisca.

Nos últimos cinco anos, além de sua posição na P&G, Francisca works in the area of social entrepreneurship,

in Denmark, and in Family governance in Brazil.

Mrs. Francisca Kjellerup Nacht has not been involved in any criminal conviction, in any conviction in a CVM

administrative proceeding and in any final unfavorable judicial or administrative decision, which has resulted

in her suspension or impediment to the exercise of any professional or commercial activity, being thus

qualified to practice her professional activities.

Elio Demier - 260.066.507-20

Elio Demier holds a degree in Social Communication from Universidade Federal Fluminense. He also holds

an MBA certificate from the Graduate Institute and Research in Administration (COPPEAD) of the Federal

University of Rio de Janeiro. He has been a full member and Vice-Chairman of the Company's Board of

Directors since 1998, in addition to having held the Company's Chairmanship from 1998 to 1999. In the last

five years, besides being a member of the Company's Board of Directors, Mr. Demier was President of Editora

Bomtexto, a publishing company based in the city of Rio de Janeiro.

Mr. Elio Demier has not been involved in any criminal conviction, in any conviction in a CVM administrative

proceeding and in any final unfavorable judicial or administrative decision, which has resulted in her

suspension or impediment to the exercise of any professional or commercial activity, being thus qualified to

practice her professional activities.


Roberto Pedote - 115.324.298-27

Mr. Roberto Pedote holds a law degree from the University of São Paulo and a Public Administration from

Fundação Getúlio Vargas. He also has a postgraduate degree from the University of Michigan (Ross School

of Business) and a Board of Directors training course by the IBGC 53rd edition in 2015. He is currently a

board member, finance committee, and governance committee leader of WWF Brazil 2015) and member of

the ENOX Board (since 2015). From 2008 to April 2015, he participated as a member of the IIRCC's Global

Reporting Council, the Global Reporting Initiative (GRI) and the WBCSD (World of Business Council for

Sustainability Development) as a member of the externalities valuation team. Since 2015 he is Academic

Director of Executive Education at lnsper, a non-profit institution whose mission is to be a reference center

in education and knowledge generation in the areas of administration, economics, law and engineering. From

2008 until 2015 he was Vice-President (CFO) of Finance, Legal, Investor Relations and Institutional Relations

of Natura.

Mr. Roberto Pedote was not subject to the effects of any criminal conviction, no conviction or imposition of

sentence in administrative proceedings before the CVM, and no final or unappealable conviction, in the

judicial or administrative sphere, that had caused the suspension or disqualification for the practice of any

professional or commercial activity, being thus duly qualified to practice their professional activities.

Fabio Bruggioni - 266.193.038-89

Mr. Fabio Bruggioni is Chief Executive Officer (CEO) of e.Bricks Digital, an investment company in the

digital sector, since April 2011. Graduated in Business Administration, with expertise in Marketing and

stints by program management in Harvard Business School, Insead and IESE Business School. Was also

vice chairman of Telefônica Group, responsible for Telephony, Internet, Broadband and TV subscription

services. He also worked in the business area of Credicard. Among your challenges in front of e.Bricks

Digital are the consolidation and expansion of the internet and mobile current business, in addition to

identifying and development of new opportunities.

Mr. Fabio Bruggioni has not been involved in any criminal conviction, in any conviction in a CVM

administrative proceeding and in any final unfavorable judicial or administrative decision, which has

resulted in his suspension or impediment to the exercise of any professional or commercial activity, being

thus qualified to practice his professional activities.


Eduardo Wurzmann - 085.702.598-83

Mr. Eduardo Luiz Wurzmann holds a bachelor's degree in economics from USP in 1987, completed his MBA

in finance from the University of Illinois in 1991, and is a Fellow of the Henry Crown Program at the Aspen

Institute, in 2005. Between 1991 and 1993, he worked at the French Guarantee Investment Bank in São

Paulo, as an investment analyst. Between 1993 and 2000 he worked at the French Investment bank Credit

Agricole Indosuez Securities in Brazil and Russia, where he was Managing Director. Between 2000 and 2011,

he also served as CEO of Ibmec Educational Group, one of the largest educational groups in Brazil, focusing

on the economy and business area. In 2011, he took over as General Manager of H&R Block Brasil, world

leader in the preparation of personal income tax returns, with more than 26 million customers worldwide.

He is currently a member of the Board of Directors of Tel Aviv University, and an independent member of

the Board of Directors of Locamerica SA, is Secretary General of CONIB - Israelite Confederation of Brazil, is

a member of the Fiscal Council of Unibes Cultural, is a member of the Board of Directors of Tecnisa SA, is a

member of the Board of Directors of HIAE - Hospital Israelita Albert Einstein and member of the Board of

Directors and investor of Descomplica, Alumni Network and other education startups.

Mr. Eduardo Wurzmann has not been involved in any criminal conviction, in any conviction in a CVM


in his suspension or impediment to the exercise of any professional or commercial activity, being thus

qualified to practice his professional activities.


Fiscal Council

Eduardo Botelho Kiralyhegy - 082.613.217-03

Mr. Eduardo Botelho Kiralyhegy graduated in Law from the Candido Mendes University, a member of the

Brazilian Lawyers Association, and founding partner of the Negreiro Office, Medeiros & Kiralyhegy Lawyers,

in Rio de Janeiro, specializing in Tax Law, Administrative and Regulatory. On the date hereof, acts as Tax

Corregidor of external control, integrating the External Control Authority of the State Secretary of Finance of

Rio de Janeiro, acting on inspection of the activities of members of the State Department of Finance. Mr.

Eduardo Botelho Kiralyhegy does not hold any management position in listed companies.

Mr. Eduardo Botelho Kiralyhegy has not been involved in any criminal conviction, in any conviction in a CVM




Leonardo Roslindo Pimenta - 016.749.907-66

Mr. Leonardo Roslindo Pimenta, graduated in Law from PUC/RJ, has more than 20 years of experience in

corporate law, banking, capital markets, general contracts and negotiations, having worked for more than

Professional Experience and eventual condenations 11 years in the Legal Department of some of Brazil's leading asset management institutions, such as

Opportunity and ARX Investimento. During this period, he participated in several operations involving the

structuring of investments in Brazil and abroad, as well as M&A operations. He was a member of the Legal

Committee of ANBID and of some ANBIMA Committees. Since January 2016, Mr. Leonardo Pimenta has been

working as a lawyer responsible for corporate and contract matters at the Negros Office, Medeiros &

Kiralyhegy Advogados, in Rio de Janeiro, specialized in Tax, Administrative and Regulatory Law. From June

2011 to December 2015, he worked for Nova Gestão de Recursos Ltda., A third-party asset management

company, responsible for the management of private equity funds of companies (i) BRAZIL ENERGY S.A .;

(ii) BRAZIL BIOMASS ENERGY S.A .; (iii) BRAZIL HYDROPOWER PARTICIPAÇÕES S.A .; (iv) BRAZIL WIND

S.A .. (v) BW GUIRAPÁ I S.A .; (vi) BRASYMPE ENERGIA S.A .; AND (vii) SANTA FÉ EXTRACTION DE MINEROS

S.A. During this period he worked as a partner and legal and compliance director; was a full member of the

Board of Directors of BW GUIRAPÁ I S.A .; alternate member of the Board of Directors of BRAZIL ENERGY

S.A .; BRAZIL BIOMASS ENERGY S.A .; BRAZIL HYDROPOWER PARTICIPAÇÕES S.A .; AND BRAZIL WIND

S.A.

Mr. Leonardo Roslindo was not subject to the effects of any criminal conviction, no conviction or imposition

of sentence in an administrative proceeding before the CVM, and no final and unappealable condemnation,

in the judicial or administrative sphere, that caused the suspension or disqualification for the practice of any


Rodrigo Fagundes Rangel- 073.533.357-26

Mr. Rodrigo Fagundes Rangel, graduated in Accounting Sciences from Fluminense Federal University, MBA in Controlling also from Fluminense Federal University and MBA in Business Management from BSP - Business

School São Paulo. He worked as Corporate Controller at Invepar - Investments and Participations in Infrastructures S.A from 2012 until 2016 and is currently Financial and Administrative Director of Yahsat

Telecomunicações Ltda., Working in the development of Business as the elaboration of Budget and Business

Plan; in the development of the Suplly Chain area, leading the negotiation with 21 states to obtain Special Regimes, in addition to the Accounting, Treasury, Tax, Human Resources, Billing, Administrative and New

Business areas. He has been a tax advisor since 2016 of Rohr S.A. Tubular Structures. He was Chairman of the Fiscal Council of the companies CLN - Concessionária Litoral Norte S.A. and GruAirport - Concessionaire

of the International Airport of Guarulhos S.A.

Mr. Rodrigo Fagundes Rangel was not subject to the effects of any criminal conviction, no conviction or

imposition of sentence in an administrative proceeding before the CVM, and no final and unappealable

condemnation, in the judicial or administrative sphere, that caused the suspension or disqualification for the

practice of any professional or commercial activity, being thus duly qualified to practice their professional

activities.

Henry Stanley de Oliveira Carpenter - 759.571.407/91

Mr. Henry Stanley de Oliveira Carpenter, graduated in Accounting from Moraes Junior University, with an

MBA from IBMEC, worked from 2013 to 2016 as Controller at Saphyr Manager of Shopping Malls Ltda. and


previously at Telefônica Brasil S/A as Control Manager and Business Commissioning. He is currently a

managing partner at Franco Lebrão Accountant Assessment Ltda. He is responsible for accounting and

financial technical advice, tax advice, management of the accounting and financial team of the firm and

reviewer of services rendered to clients.

Mr. Henry Stanley Carpenter was not subject to the effects of any criminal conviction, no conviction or

imposition of sentence in an administrative proceeding before the CVM, and no final and unappealable

condemnation, in the judicial or administrative sphere, that caused the suspension or disqualification for the

practice of any professional or commercial activity, being thus duly qualified to practice their professional

activities.Vera Lucia de Almeida Pereira Elias - 492.846.497-49

Peter Edward Cortes Marsden Wilson - 168.126.648/20

Mr. Peter Edward Cortes Marsden Wilson, graduated in Public Administration from Getulio Vargas Foundation

of São Paulo, an MBA in Finance and a Master's degree in Economics from Getúlio Vargas Foundation in São

Paulo. For the past five years, Mr. Wilson has been a partner in Corporate Finance and mid-sized business

restructuring at Managrow Strategic Consulting in Finance Ltda. In addition, Mr. Wilson held the following

administrative positions: (i) current member of the fiscal council of Gafisa S.A .; (ii) current member of the

fiscal council of Riachuelo S.A .; (iii) current member of the fiscal council of B2W S.A., a retail company; (iv)

member of the fiscal council of Bradespar S.A., a publicly-held company holding investments in non-financial

institutions; (v) member of the supervisory board of Vivo S.A., an open company in the telecommunications

sector; (vi) member of the fiscal council of Pine Bank S.A .; (vii) member of the board of directors of Confab

Industrial S.A., a metallurgical company; (viii) a member of the board of directors of Minupar Participations

S.A., the holding company of investments in holding companies that operate in the processing of pork and

poultry products; (ix) member of the fiscal council of Heringer S.A., a publicly-held company engaged in the

production, marketing and distribution of fertilizers; and (x) member of the fiscal council of Trisul S.A., a

company engaged in real estate development, operating in the same industry as the Company.

Mr. Peter Edward Cortes Marsden Wilson has not been involved in any criminal conviction, in any conviction

in a CVM administrative proceeding and in any final unfavorable judicial or administrative decision, which

has resulted in his suspension or impediment to the exercise of any professional or commercial activity, being

thus qualified to practice his professional activities.

Marcio Villas Boas Passos - 911.779.797/72

Mr. Marcio Villas Boas Passos, graduated in Economics from (PUC/RJ), with an MBA in Finance from Duke

University in the United States and executive courses at Harvard University and Dom Cabral Foundation. He

currently works in the fund manager Invest Tech Participation and Investments Ltda. as Executive Director.

He is a member of the board of CI&T Software and of Aker Security Solutions. Is representative of the

investor in the boards of Brasil CT, Acessocard and Sky One; member of the financial committees of Aker,

Brasil CT and Acessocard. He is also a member of the HR committee of Brasil CT. Founded Thalassa Capital,


a strategic and financial consulting firm, focused on improving the operational and financial results of

companies, long-term strategic positioning and improvement and/or implementation and corporate

governance structures. He was a partner of Gávea Investments.

Mr. Marcio Villas Boas Passos has not been involved in any criminal conviction, in any conviction in a CVM




Sérgio Kariya

Mr. Sérgio Kariya joined the Company in 2009. He was elected as Director without a Specific Designation on

December 17, 2013. He was elected as Chief Executive Officer on December 12, 2014, with effective term

as of January 1, 2015. Previously, has worked at the Otis Lifts company for more than 10 years. Graduated

in Mechanical Engineering from the Polytechnic School of the University of São Paulo (PoliUSP) and

postgraduate in Marketing from the Superior School of Advertising and Marketing (ESPM), Mr. Kariya also

attended a MBA in Administration at IBMEC / SP, Finance at INSPER / SP, and a strategy course at INSEAD.

Mr. Sergio Kariya was not subject to the effects of any criminal conviction, no conviction or penalty in an

administrative proceeding before the CVM, and no final and unappealable condemnation, in the judicial or

administrative sphere, that caused the suspension or disqualification of the practice of any professional or

commercial activity, being thus duly qualified to practice their professional activities.

Daniel Brugioni

Daniel Brugioni is the Commercial Director since January, 2017. Graduated in Mechanic Production

Engineering from the Industrial Engineering College (FEI), has a MBA in Business Management from FGV-SP

and Executive MBA from Dom Cabral Foundation. Previously, he worked for several companies as Grupo

Libra, Katoen Natie do Brasil and Danzas Logística e Armazéns Gerais (current DHL). He has more than 16

years of experience in Commercial Area.

Mr. Daniel Brugioni was not subject to the effects of any criminal conviction, any conviction or imposition of

sentence in administrative proceedings before the CVM, and no final or unappealable condemnation, in the

judicial or administrative sphere, that caused the suspension or disqualification of the practice Of any



Mr. James Guerreiro holds a bachelor's degree in Accounting Sciences with a MBA in Business Management.

He has more than 20 years of professional experience, having worked at several companies, such as PwC,

Deloitte, Invepar S.A., Metro Rio S.A. and Cart S.A., highlighting his experience as Controller of Invepar and

Administrative Financial and Investor Relations Director of Metro Rio S.A., among others.


Mr. James Guerreiro was not subject to the effects of any criminal conviction, no conviction or penalty in an

administrative proceeding before the CVM, and no final or unappealable condemnation, in the judicial or




Ricardo Gusmão is Director of the Infrastructure business unit since August 1, 2013. He holds a degree in

Civil Engineering from Veiga de Almeida University / RJ and a post-graduate degree in Economic Engineering

at UVA / RJ. He joined Mills in 1993, holding various positions. In the last five years, he has held the positions

of Regional Manager, Superintendent of Contracts and Operations and Commercial Director, having been

elected as statutory director of the Company on September 17, 2015, and was re-elected at the Board of

Directors meeting held on March 8, 2016.

Mr. Ricardo Gusmão was not subject to the effects of any criminal conviction, no conviction or penalty in an

administrative proceeding before the CVM, and no final or unappealable condemnation, in the judicial or



12.6 In relation to each person who acted as member of the board of directors or of the supervisory board in the last fiscal year, inform, in a table

format, the percentage of participation in the meetings held by the respective board in the same period, which occurred after the investiture in

charge

Board of Directors Total meetings held by the

organ since the inauguration

% of member's participation

in meetings held after

tenure

Elio Demier 17 100%

Roberto Pedote 17 100%

Francisca Kjellerup Nacht 17 100%

Fabio Bruggioni 8 90%

Fiscal Council Total meetings held by the

organ since the inauguration

% of member's participation

in meetings held after

tenure

Eduardo Botelho Kiralyhegy 4 70%

Leonardo Rosnildo Pimenta* 4 30%

*Alternate members of the Fiscal Council that were not invited to participate of any meeting during the fiscal year.

12.7/8 - Committees Composition

Name Type of Committee Position held Profession Date of the election Mandate term Percentage of meeting participation

CPF Description of other committees Description other positions held Date of birth

Date of the possession

Number of consecutive mandates

Other titles/functions exercised in the issue

Eduardo Wurzmann Other Committees Economist 04/27/2018 1 year 0.00%

085.702.598-83 Finance and Risk Committee

12/13/1965 04/27/2018 0


124.175.657-06

Other Committees

Human Resources Committee


12/28/1970

0 0.00%

Roberto Pedote Other Committees Member of the Committee (Effective)

Public administrator

04/27/2018 1 year 100.00%

115.324.298-27 Non statutory committee of Finance and Risk and Human Resources

02/24/1967 04/27/2018 0

Chairman of Board of Directors

12.9 - Relationship (as a spouse or significant other) or relationship to the second degree between:

Nome

CPF

Corporate name of the issuer company, controlled or controlling

CNPJ

Type of relationship

Title



124.175.657-06

Mills Estruturas e Serviços de Engenharia S.A.

27.093.558/0001-15 Father/Mother (1st degree by blood)

Member of Board of Directors

Related person

JYTTE KJELLERUP NACHT

Direct Controlling Shareholder of the Company

289.858.347-20


27.093.558/0001-15

Observation




124.175.657-06


27.093.558/0001-15 Brother/Sister (1st degree by blood)

Related person

Tomas Richard Nacht

Direct Controlling

Shareholder of the Company

042.695.577-37


27.093.558/0001-15

Observation




124.175.657-06


27.093.558/0001-15 Brother/Sister (1st degree by blood)

Related person

Antonia Kjellerup Nacht

Direct Controlling Shareholder

of the Company

073.165.257-62


27.093.558/0001-15

Observation

Name

CPF


CNPJ


Title

Related person

Pedro Kjellerup Nacht

127.276.837-66


27.093.558/0001-15

Controlador direto da Companhia

Observation


Andres Cristian Nacht

Chairman of the Board of Directors

098.921.337-49


27.093.558/0001-15 Son/Daughter (1st degree by blood)

Related person

Tomas Richard Nacht

Direct Controlling


042.695.577-37


27.093.558/0001-15

Observation




098.921.337-49



Related person


Direct Controlling Shareholder

of the Company

073.165.257-62


27.093.558/0001-15

Observation




098.921.337-49



Related person


Direct Controlling


127.276.837-66


27.093.558/0001-15

Name

CPF


CNPJ


Title




098.921.337-49



Related person

Francisca Kjellerup Nacht 124.175.657-06


27.093.558/0001-15

Direct Controlling Shareholder of the Company and member of the Board of Directors Observation



098.921.337-49


27.093.558/0001-15 Husband/Wife (1st degree by affinity)


Related person


Direct Controlling Shareholder of the Company

289.858.347-20


27.093.558/0001-15

Observation

12.10 - Subordination, rendering of services or control relationships for the previous three fiscal years between administrators and:

Type of relation of the administrator with the related person

Identification Title/Function

CPF/CNPJ Type of related person

Fiscal Year 12/31/2017

Trustee of the issuer



098.921.337-49 Service Rendering Directly Controlled

Related Person

Negreiros, Medeiros & Kiralyhegy Advogados 05.742.375/0001-40

Mr. Eduardo Kiralyhegy, through the company Negreiro, Medeiros & Kiralyhegy Advogados, has provided legal advisory services to Mr. Andres Cristian Nacht, the controlling shareholder of the Company, directly or through Nacht Participações SA, By Mr Nacht.

12.11 - Directors’ Insurance Since 2009, the Company has maintained civil liability insurance for members of the Board of Directors, Board of Executive Officers, Fiscal Council or any other statutory body or body created by the agreement or bylaws of the policyholder or any of the subsidiaries or subsidiaries or Any natural person who has powers of representation before a third party or whose position or function implies the representation of fact or right in the practice of own administration, with coverage for costs, charges, attorney fees, technical assistants and expert witnesses, All other necessary and reasonable expenses in defending or investigating a claim in judicial, arbitration and administrative proceedings, among others, excluding malicious acts, claims arising from acts already known before the date of the policy, liabilities arising from product failures (already covered by liability insurance of civil), among other events. The contracted policy was renewed for the period from March 1, 2017 to March 1, 2018.

12.12 - Corporate Governance Practices 12.12 Inform if the issuer follows a code of good governance practices corporate giving, if so, the code followed and practices differentiated corporate governance adopted because of it.

The Company maintains the objective of having the highest corporate governance practices to add value to shareholders and the market in general. Since the IPO, the Company adhered to the Novo Mercado, BM&FBOVESPA's highest level of Governance. With another important step in the constant evolution of our corporate governance and in the direction of a more plural and solid Company, we had the renewal of part of the Board of Directors, with the entry of professionals with new experiences and competencies to strengthen the process of making Decision of the Company. The Board of Directors is currently composed of six members, three independent members, with a mandate of two years. The Board of Executive Officers is composed of six members, of which four directors are statutory. The Fiscal Council was established in 2011, becoming a permanent body in 2012, and composed of three effective members, one of which is indicated by minority shareholders. In November 2016, the Board of Directors approved the establishment of two advisory committees: (i) Finance and Risks and (ii) People and Management, with the purpose of making the Board of Directors more efficient, Recommendations, assisting in the performance of its legal and statutory functions. The two committees are non-permanent and may be freely created or terminated by the Board of Directors. The creation of these new advisory committees is aligned with the Company's objective of always improving its decision-making process and adopting the best practices of corporate governance. In the constant search for improvement of initiatives aimed at ensuring the alignment and uniformity of the ethical and moral standards that the Company believes are important for its activities, a new Code of Conduct was approved in 2015, which should guide the attitudes and behaviors of all contributors. In order to strengthen ethics and combat fraud in our activities, we have the “Fale Abertamente” program, which consists of a denunciations channel managed by a specialized company and can be used by all employees to report unethical and/or illegal situations of Confidential and anonymous manner. All reports are ascertained and directed in accordance with internal policies and current legislation. We also have a communication channel available to the external public to clarify doubts, criticisms, suggestions and denunciations. The Company understands the importance of good governance practices and compliance and in 2018 plans to continue the initiatives focused on this theme. The Company follows the rules set forth in the Novo Mercado Listing Rules, and is not based, at that time, by any other code of good governance practices.

12.13 Other information about the Company

General Meetings held by the Company in the last three social

exercises:

Ordinary and Extraordinary General Meeting First Call Realization Date: 4/26/2018 Quorum: Shareholders representing 68.7% of the capital

Ordinary General Meeting First Call Realization Date: 4/27/2017 Quorum: Shareholders representing 57.6% of the capital

Ordinary and Extraordinary General Meeting First Call

Realization Date: 04/28/2016

Quorum: Shareholders representing 58.42% of the capital

Ordinary General Meeting First Call

Realization Date: 04/28/2015

Quorum: Shareholders representing 63.40% of the capital

13.1 Description of the compensation policy or practices for the Executive Board, the Statutory

and Non-Statutory Boards, the Fiscal Committee, the Statutory Committees and the Audit, Risk,

Finance and Compensation Committees, covering the following topics:

a. Objectives of the compensation policy or practices informing if the compensation policy

has been formally approved, body responsible for its approval, date of approval and, if the issuer

discloses the policy, locations on the worldwide computer network where the document can be

consulted

Board of Directors

For the Board of Directors of the Company, the total remuneration is fixed in a discretionary amount

determined by the general meeting, with no relationship with the remuneration policy applicable to officers

and other employees of the Company and, therefore there is no goal of the policy or specific remuneration

practice of this body defined by the human resources department of the Company. The remuneration is

established in order to use it as an effective tool to attract, motivate and retain the Directors and ensure that

it is structured in a fair and compatible manner with the functions and risks inherent to each position, providing

the alignment of their interests with the long-term interests of the Company.

As part of total discretionary remuneration approved by the general meeting, there is a fixed component and

a variable component, according to the results of the Company. The Company believes that the variable

remuneration of the members of the Board of Directors is a way to encourage them to successfully lead the

Company's business by aligning the interests of members of the Board of Directors with those of shareholders.

Statutory Directors and Non-Statutory Directors

For statutory directors and non-statutory directors of the Company, the remuneration policy aims to attract

and guarantee that the qualified professionals required remain in the Company and have a proper

remuneration. The fixed amount of the remuneration of the Directors includes the salary and direct and indirect

benefits tailored for statutory directors and non-statutory directors. In addition to the fixed compensation,

there is a variable component, which includes profit-sharing in the Company’s results and the granting of stock

options or subscribing to shares issued. The Company believes that the profit-sharing and stock option

programs benefiting statutory directors and non-statutory directors is a way to motivate them to carry out the

Company’s business in its best interest, thus stimulating an entrepreneurial and results orientated culture in

line with the interests of both shareholders and management.

Fiscal Council

Members of the Fiscal Council are entitled to remuneration equivalent to 10% of the average remuneration of

the statutory directors, corresponding to the minimum set by law. In this way, their remuneration is not

correlated to the remuneration policy applicable to officers and other employees of the Company and therefore

there is no objective of the policy or practice of remuneration for that body.

Advisory Committee

The members of the existing committees are entitled to remuneration equivalent to 50% of the monthly

remuneration of the members of the Board of Directors. The members of the committees that are directors,

managers or employees of the Company will not be entitled to compensation. The remuneration of the

members of the committees may be changed at any time by the Board of Directors. The purpose of this

compensation policy is to adequately compensate the members of the committees for the time spent in their

functions, except for those who are already remunerated by the Company as its directors or employees.

b. Composition of compensation packages: (i) description of the different elements of the

compensation packages and the objectives of each of them; (ii) proportion of each element to

make up the total compensation package; (iii) the method for calculating and adjusting each of

the elements in the compensation packages; (iv) reasons for the composition of remuneration;

and (v) the existence of unremunerated members by the issuer and its reason

(i) Description of the different elements of the compensation packages:

Salary and pro-labore

The fixed remuneration of statutory and non-statutory executive officers is intended to recognize and reflect

the value of the position internally and externally, considering the Company's competitors and companies of

a size similar to yours in terms of gross revenues. The comparison with market remuneration is performed by

market research conducted by contracted consulting or through a database purchased from a consultancy.

The Company conducted market research with Towers Watson in 2014. In 2015 and 2016, the Company used

the market-based database of Towers Watson consulting. In 2017, due to the execution of the resizing project

of the Construction business unit, the Company did not perform any compensation action.

In the case of the Company's Board of Directors (and, consequently, of the Advisory Committees),

remuneration, fixed and/or variable (the latter in the form of bonds), is determined at the discretion of the

general meeting, without being related to the remuneration applicable to the officers and other employees of

the Company and, therefore, there is no objective of the remuneration policy or practice for said organ. The

members of the Fiscal Council, in turn, are entitled to remuneration equivalent to 10% of the average

remuneration of the statutory executive board, corresponding to the minimum fixed by law. Thus, its

remuneration is also not related to the remuneration policy applicable to the Company's officers and other

employees, and therefore, there is no objective of the remuneration policy or practice for said company.

The members of the Board of Directors who participate in Advisory Committees are entitled to monthly

individual compensation equivalent to 50% of the individual monthly compensation of the members of the

Company's Board of Directors. Statutory board members who participate in Advisory Committees are not

entitled to any compensation.

Direct and indirect benefits

Granted exclusively to statutory and non-statutory directors, the direct and indirect benefits include medical

care, life insurance, car lending and food allowance. They aim to ensure competitiveness in the market. The

comparison with market benefits is performed by market research conducted by contracted consulting or

through database purchased from a consulting firm. The Company conducted market research with Towers

Watson in 2014. In 2015 and 2016, the Company used the market-based database of Towers Watson

consulting. In 2017, due to the execution of the resizing project of the Construction business unit, the Company

did not perform any compensation action. The members of the Board of Directors, the Fiscal Council and the

Advisory Committees are not entitled to any direct and indirect benefits.

Profit-sharing and bonus

Granted to statutory directors and non-statutory directors, the profit-sharing program and/or bonus aims to

motivate management to carry out the Company’s business in its best interest, thus stimulating an

entrepreneurial and results orientated culture in line with the interests of both shareholders and management.

Eventual bonuses paid to members of the Board of Directors, discretionary determined by the general meeting

with no relation with the remuneration policy applicable to officers and other employees of the Company, have

the same goal. The members of the Fiscal Council and Advisory Committee are not entitled to the profit-

sharing program.

Stock options or subscription to shares

Granted to statutory directors and non-statutory directors, the stock option or subscription to shares aim to

motivate management to carry out the Company’s business in its best interest, thus stimulating an

entrepreneurial and results orientated culture in line with the interests of both shareholders and management.

Members of the Board of Directors, Fiscal Council and Advisory Committees are not entitled to stock option or

profit sharing of the Company.

(ii) Proportion of each element to make up the total remuneration package:

According to the table below the ratio for the years 2015, 2016 and 2017 were:

2015 - % Compared to the total compensation amount paid to

Salary and

Pro-

labore¹

Commi

tees

Direct and

indirect benefits Bonus¹

Profit

sharing

Grant of

options Total

Board of Directors 89.12% 10.88% 0.00% 0.00% 0.00% 0.00% 100.00%

Executive Officers 59.66% 0.00% 4.64% 0.00% 0.00% 35.70% 100.00%

Fiscal Council 100.00% 0.00% 0.00% 0.00% 0.00% 0.00% 100.00%

¹ Including taxes.


Salary

and Pro-

labore¹

Commit

ees

Direct and

indirect

benefits Bonus¹

Profit

sharing

Grant of

options Total


Executive Officers 54.17% 0.00% 3.81% 12.62

% 0.00% 29.41% 100.00%

Fiscal Council 100.00% 0.00% 0.00% 0.00% 0.00% 0.00% 100.00%

¹ Including taxes.


Salary

and Pro-

labore¹

Commit

ees

Direct and

indirect

benefits Bonus¹

Profit

sharing

Grant of

options Total


Executive Officers 71.46% 0.00% 3.85% 13.63% 0.00% 11.06% 100.00%

Fiscal Council 100.00% 0.00% 0.00% 0.00% 0.00% 0.00% 100.00%

¹ Including taxes.

(iii) Method for calculating and adjusting each of the elements in the compensation packages:

The fixed portion of compensation paid to statutory directors and non-statutory directors is determined based

on market standards, and readjusted annually at regular levels to account for the loss in currency value or for

merit by performance.

In terms of the profit-sharing program granted to statutory directors and non-statutory directors, and to bonus

paid to the members of the Board of Directors, this plan is based on two financial indicators, EBITDA and cash

flow. If the financial targets are accomplished of each of these indicators, will be distributed to Management

and employees, and whose portion will be defined in an increasing manner in accordance with their hierarchical

level in the Company and results obtained by their respective business segments. i.e. in a proportion of 70%

from financial indicators results and 30% from the achievement of defined targets. In 2017 there was no

distribution of any amount related to the result of 2016, as well as, in 2018 there will be no distribution of any

amount referring to the result of 2017.

Regarding the profit sharing program previously adopted by the Company until 2015, in 2014 distributed R$

18.7 million for the results of 2013. In 2015, the Company did not distribute any amount related to the results

of 2014.

Regarding the to the stock option plan to purchase or subscribe shares, granted to the statutory directors and

non-statutory directors, the number of options granted is defined by the Board of Directors, based on

performance and results.

For the Board of Directors of the Company (and the Advisory Committees), the remuneration is discretionary

determined by the general meeting with no relation with the remuneration policy applicable to officers and

other employees of the Company and therefore there is no goal at the policy or remuneration practice of this

body. Members of the Fiscal Council are entitled to remuneration equivalent to 10% of the average

remuneration of the statutory board, corresponding to the minimum set by law. In this way, their remuneration

is not correlated to the remuneration policy applicable to officers and other employees of the Company and

therefore there is no aim of policy or practice of remuneration for that body. So, there is no method of

calculation and adjustment of each element of remuneration.

(iv) Reasons for the composition of remuneration:

For the statutory directors and non-statutory directors, the policy aims in the remuneration of professionals

based on the responsibilities inherent in their job positions, market practices and the Company’s level of

competiveness.

For the Board of Directors, the Advisory Committee and the Fiscal Council, the remuneration paid by the

Company is fixed, in a discretionary amount determined by the general meeting, in case of Board of Directors

(and consequently the Advisory Committees), and according to the law, in case of Fiscal Council. The

remuneration of the members of these bodies has no relation with the remuneration policy applicable to

officers and other employees of the Company and therefore there is no goal at the policy or remuneration

practice of this body.

For the statutory directors and non-statutory directors and the members of the Board of Directors, the variable

portion is justified by the Company’s focus on results and the target of aligning management interests with

those of the shareholders of Company.

(v) Existence of unremunerated members by the issuer and its reason

Not applicable, since all the members are remunerated.

c. Main performance indicators that are taken into consideration when determining each

element of the compensation package

The main financial indicators to determine the variable portion of the remuneration are the EBITDA and the

cash flow. The variable portion of the remunerations of the managers is determined from the achievement of

financial indicators and the results obtained by their respective business segments.

d. How the compensation package is structured to reflect the development of the

performance indicators

The remuneration consists of a significant variable portion, represented by profit-sharing of the Company’s

results, and the values to be distributed are directly proportionate to the Company’s financial indicators and

targets of the area, calculated annually in accordance with the formula described in item (c) above.

e. How the compensation policy is aligned with the Company’s short-, medium- and long-

term interests

The remuneration monthly paid to statutory directors and non-statutory directors is in line with the short-term

interests of the Company to attract and retain qualified professionals. The profit-sharing and stock options

plan are aligned with the medium-to-long-term interests of the Company to motivate management to carry

out the Company’s business, stimulating an entrepreneurial and results-orientated culture, to the extent that

both shareholders and directors benefit from improvements in the results and increases in the price of the

shares.

For the Board of Directors of the Company (and consequently the Advisory Committees), the remuneration is

fixed in discretionary amount determined by the general meeting with no relation with the remuneration policy

applicable to officers and other employees of the Company, and therefore there is no goal at the policy or

remuneration practice of this body.

For the Board of Directors, the bonus, which is based on profit-sharing, being also directly proportional to the

financial indicators (EBITDA and cash flow), is in line with the Company’s mid and long term best interest of

stimulating an entrepreneurial and results orientated culture.

f. Existence of compensation supported by subsidiaries, and direct or indirect affiliates or

holding companies

Not applicable. There is not any remuneration supported by subsidiaries, and direct or indirect affiliates or

holding companies.

g. Existence of any compensation or benefits connected to the occurrence of a given

corporate event, such as the sale of the Company’s controlling interest

Not applicable. There is no remuneration or benefits connected to the occurrence of a given corporate event,

such as the sale of the Company’s controlling interest.

h. practices and procedures adopted by the board of directors to define the compensation

i. the issuer's bodies and committees that participate in the decision-making process, identifying

how they participate

ii. Criteria and methodology used to determine the individual remuneration, indicating whether

studies are used to verify market practices and, if so, the criteria for comparison and the scope

of these studies

iii. How often and how the board of directors assesses the adequacy of the issuer's remuneration

policy "(NR)

The People and Management Committee is an advisory body directly linked to the Board of Directors, subject

to applicable legislation and regulations, to the provisions of the Bylaws of Mills Estruturas e Serviços de

Engenharia S/A and to this Internal Regulation, which regulates its operation.

The purpose of the Committee, as an advisory body, is to: (i) prepare, regularly review and improve human

resources and personnel management policies, (ii) recommend the general remuneration criteria and the

benefit policies of employees and managers. Company and of controlled companies, directly or indirectly (if

applicable); and (iii) assist the Board of Directors in the exercise of its duties.

The Company, whenever required, engages in market research with companies in the segment, benchmarking

or analyzing its market as a whole, in order to obtain studies, practices, forecast trends, in order to maintain

the remuneration and policies of benefits equaled to the market, thus, from these guidelines, all proposals for

compensation and benefit policies of the company's executives, are subject to a final evaluation of the Board

of Directors before any change.

13.2 Remuneration recognized of the last 3 fiscal years and the estimated compensation for

the current accounting reference period for the Executive Board, the Statutory Board and the

Fiscal Council:

Estimated for the Fiscal Year (2018)

Board of Directors Statutory

Management

Fiscal

Council Total

http://www.linguee.com.br/ingles-portugues/traducao/statutory+management.html


Number of members 5,33 4,00 3,00 12,33

Number of remunerated members

0 0 0 0

Annual fixed

compensation 2.746.800 6.485.802 407.175 9.639.776

Salaries or pro-labore

fees 1.932.000 4.524.161 339.312 6.795.474

Direct and indirect benefits

0 242.459 0 242.459

Compensation for

participation in Committees

420.000 0 0 420.000

Others 394.800 1.719.181 67.862 2.181.844

Description of others fixed compensation

The Others value refers to the

wages charges

The Others value refers to

the

wages charges

The Others value

refers to the

wages charges

Variable Compensation

Bonus 756.000 2.091.921 0 2.847.921

Profit sharing 0 0 0 0

Compensation for

participation in meetings 0 0 0 0

Comissions 0 0 0 0

Others 151.200 794.930 0 946.130

Post-employment

benefits 0 0 0 0

Employment

cessation benefits 0 0 0 0

Stock-based

compensation¹ 0 450.770 0 450.770

Observations

The total number of members

of each

been established in the manner

specified in Circular Letter CVM

SEP n.2 / 2018

The total number of

members of each

been established in the

manner

specified in Circular Letter

CVM

SEP n.2 / 2018

The total number

of members of

each

been established

in the manner

specified in

Circular Letter

CVM

SEP n.2 / 2018

Total Compensation 3.654.000 9.823.423 407.175 13.884.597

Fiscal Year ended on December 31, 2017


Management

Fiscal

Council Total




Number of remunerated

members 5,17 4,00 3,00 12,17

Annual fixed

compensation

Salaries or pro-labore fees

1.366.950 4.010.810 309.365 5.687.125

Direct and indirect

benefits 0 297.431 0 297.431

Compensation for

participation in

Committees

99.000 0 0 99.000

Others 198.305 1.515.055 61.873 1.775.233

Description of others fixed compensation

The Others value refers to the

wages charges

The Others value refers

to the

wages charges

The Others value

refers to the

wages charges

Variable

Compensation

Bonus 0 763.741 0 763.741


Compensation for

participation in

meetings 0 0 0 0

Comissions 0 0 0 0

Others 0 290.222 0 290.222

Post-employment

benefits 0 0 0 0

Employment


Stock-based

compensation¹ 0 855.552 0 855.552

Observations

The total number of members of

each

been established in the manner

specified in Circular Letter CVM

SEP n.2 / 2018

The total number of

members of each

been established in the

manner

specified in Circular

Letter CVM

SEP n.2 / 2018

The total number

of members of

each

been established

in the manner

specified in

Circular Letter

CVM

SEP n.2 / 2018


Fiscal Year ended in 2016

Board of

Directors

Statutory

Management

Fiscal

Council Total

Number of

members 6,00 3,75 3,00 12,75

Number of

remunerated

members

6,00 3,75 3,00 12,75

Annual fixed

compensation

Salaries or pro-

labore fees 996.333 3.091.914 238.064 4.326.312

Direct and

indirect benefits 0 297.431 0 297.431

Compensation

for participation

in Committees

96.000 0 0 96.000

Others 152.267 1.133.861 47.613 1.333.471

Description of

others fixed

compensation

Variable

Compensation 0 984.152 0 984.152

Bonus 0 713.154 0 713.154


Compensation

for participation

in meetings

0 0 0 0

Comissions 0 0 0 0

Others 0 270.998 0 270.998

Description of

others variable

compensation

Post-

employment

benefits

0 0 0

Employment

cessation

benefits

0 0 0



Stock-based

compensation¹ 0 2.294.000 2.294.000

Observations

The total number of

members of each

been established in

the manner


Letter CVM

SEP n.2 / 2018

Total

Compensation 1.244.600 7.801.359 285.677 9.331.636

Social Year ended on December 31, 2015

Board of

Directors

Statutory

Management

Fiscal Council Total


Number of

remunerated

members

6,50 3,92 3,00 13,42

Annual fixed

compensation

Salaries or pro-

labore fees 874.584 4.457.665 238.946 5.571.195

Direct and indirect

benefits 0 439.394 0 439.394

Compensation for

participation in

Committees

132.573 0 0 132.573

Others 211.894 1.194.877 47.789 1.454.561

Description of others

fixed compensation

The Others value

refers to the

wages charges

The Others value

refers to the

wages charges

The Others value

refers to the

wages charges

Variable

Compensation 0 0 0 0

Bonus 0 0 0 0


Compensation for

participation in

meetings

0 0 0 0

Comissions 0 0 0 0



Others 0 0 0 0

Description of others

variable

compensation

The Others value

refers to the

wages charges

The Others value

refers to the

wages charges

The Others value

refers to the

wages charges

Post-employment

benefits 0 0 0 0

Employment


Stock-based

compensation¹ 0 3.382.000 0 3.382.000

Observations

The total number of

members of each

been established in

the manner


Letter CVM

SEP n.2 / 2018

Amount of

remuneration based

actions is based on

the

annual amortization

of all

current plans, at

fair value.

The total number of

members of

each body has been

specified in the

Circular Letter

CVM SEP n.2 / 2018

The total number of

members of each

been established in

the manner


Letter CVM

SEP n.2 / 2018


13.3 Related to variable remuneration of the 3 last fiscal years and for the current fiscal year for

the Executive Board, the Statutory Board and the Fiscal Council

Estimated for the Fiscal year (2018)


Management

Fiscal

Council Total

(in R$ thousand, except number of members)


Number of remunerated members 4,67 4,00 3,00 11,67

Bonus 907.200 2.886.851 0 3.794.051

Minimum amount estimated by

compensation plan - - - 0

Maximum amount estimated by

compensation plan - - - -

Amount estimated by the compensation

plan if pre-established goals are met 907.200 2.886.851 - 3.794.051









plan if pre-established goals are met - 0 - 0

Variable Remuneration – fiscal year ended on 12/31/2017


Management

Fiscal

Council Total


Number of members 6,00 4,00 3,00 13

Number of remunerated members 5,17 4,00 3,00 12,17

Bonus 1.053.962 1.053.962




compensation plan - 1.053.962 - 1.053.962


plan if pre-established goals are met - 1.053.962 - 1.053.962

Profit sharing 0 0






plan if pre-established goals are met - 0 - 0


Board of

Directors

Statutory

Management Fiscal Council Total



Number of

remunerated

members

6,00 3,75 3,00 12,75





Bonus

Minimum amount

estimated by

compensation plan

- - - -

Maximum amount

estimated by

compensation plan

- - - -

Amount estimated by

the compensation plan

if pre-established goals

are met

- 984.152 - 984.152

Value effectively

recognized in results of

the fiscal year

- 984.152 - 984.152

Profit sharing

Minimum amount

estimated by

compensation plan

- - - -

Maximum amount

estimated by

compensation plan

- - - -

Amount estimated by



are met

- - - -

Value effectively


the fiscal year

- - - -


Board of

Directors

Statutory

Management Fiscal Council Total



Number of

remunerated

members

6,50 3,92 3,00 13,42

Bonus

Minimum amount

estimated by

compensation plan

- - - -



Maximum amount

estimated by

compensation plan

- - - -

Amount estimated by



are met

- - - -

Value effectively


the fiscal year

- - - -

Profit sharing

Minimum amount

estimated by

compensation plan

- - - -

Maximum amount

estimated by

compensation plan

- - - -

Amount estimated by



are met

- - - -

Value effectively


the fiscal year

- - - -

13.4 In relation to the stock-based compensation plan of the Board of Directors and Statutory

Board of Executive Officers, in force in the last fiscal year and forecast for the current fiscal year:

STOCK OPTION PLAN

On December 31, 2017, the Company had two stock option plans for the benefit of its managers, of which: (i)

("Plan 2010") was approved at the Extraordinary Shareholders' Meeting held on February 8, 2010, and

amended Extraordinary General Meeting of April 20, 2012 e; ("Plano 2016") approved at the Annual and

Extraordinary Shareholders' Meeting held on April 28, 2016. Up to December 31, 2016, 857,966 options had

been exercised under the 2010 Plan, leaving 315,681 options to purchase shares already granted , But not yet

exercised. There were no options exercised under the 2016 Plan, leaving 1,080,000 options to purchase shares

already granted, but not yet exercised.

All stock option plans created prior to the Company's IPO, held on April 15, 2010, had all their options granted

exercised.

In the items below, the Company's Plans are described.

a. Termos e condições gerais:

Under Stock Option Plan - 2010, The Board of Directors approved (i) on March 11th, 2010, the Company’s

Program 1/2010 Stock Options Plan (“1/2010 Program”); (ii) on March 25th, 2011, the Program 1/2011 Stock

Options Plan (“1/2011 Program”); (iii) on May 30th, 2012, the Program 1/2012 Stock Options Plan (“1/2012

Program”); (iv) on March 25th, 2013, the Program 1/2013 Stock Options Plan (“1/2013 Program”), and (v) on

March 31th, 2014, the Program 1/2014 Stock Options Plan (“1/2014 Program”).

Under the 2016 Plan, the Board of Directors approved (i) on May 31, 2016, the 1/2016 Program for the

Granting of Stock Options of the Company ("Program 1/2016");

The Stock Options Plan is managed by our Board of Directors, which considers the contribution of each

beneficiary to achieving the targets designed to create added value, the development potential of each, and

the essential nature of their jobs among other characteristics considered strategically relevant.

The Board of Directors elected as beneficiaries of the 2010 Stock Options Plan (i) for the 1/2010 Program, all

the directors (or executives with similar roles) of the Company, and Company managers who have held their

positions in 2009 for more than 6 (six) months; (ii) for the 1/2011 Program, all the directors (or executives with similar roles) of the Company, and Company managers who have held their positions in 2010 for more

than 6 (six) months; (iii) for the 1/2012 Program, all the directors (or executives with similar roles) of the Company, and Company managers who have held their positions in 2011 for more than 6 (six) months; (iv)

for the 1/2013 Program, all the directors (or executives with similar roles) of the Company, and Company

managers who have held their positions in 2012 for more than 6 (six) months; and (v) for the 1/2014 Program, all the directors (or executives with similar roles) of the Company, and Company managers who

have held their positions in 2013 for more than 6 (six) months. There were no stock options granted in 2015.

Under the Plan 2016, the Board of Directors elected the beneficiaries according to the following criteria:

contribution to the achievement of value creation targets, the potential of each development, the essentiality

of the duties performed and any other characteristics considered strategically relevant;

b. Major Plan Objectives

The Plan has as objective, allow the Company’s managers or employees or those in any of its subsidiaries,

subject to determined conditions, to acquire shares in the Company, for the purpose of: (i) align the interests

of the Company’s shareholders with those of its managers and employees or other entities it controls; (ii)

mitigate agency conflicts; (iii) increase the generation of sustainable results; and (iv) reinforce the orientation

of long-term in taking decisions by managers and employees of the Company.

c. How the plans contribute for the achievement of these objectives

As most of the options are available over the long term, the beneficiaries tend to stay with the Company until

at least the time they can contribute to its long-term results.

d. How the plan is included in the Company’s compensation policy

As mentioned in item 13.1, the granting of options under the Company's Plans amounts to the fixed

remuneration of the Company's officers, as a way of generating incentives to successfully conduct the

Company's business, stimulating the entrepreneurial and Results, aligning the interests of the beneficiaries

with those of the shareholders.

e. How the plans promote the alignment between management and the Company interests at short,

mid and long term

The stock option plan, in general, aligns the medium and long term interests to encourage the Administration

to conduct the company's business success, stimulating entrepreneurial and results-oriented culture, to the

extent that both the shareholders and the directors benefit from improvements in income and increases in

stock market quotation. The establishment of a waiting period before which the options cannot be exercised

(vesting period), ensures that this alignment is found in the short, medium and long term.

f. Maximum number of shares considered

The stock options granted within the scope of this plan confer the rights to acquire up to 5% of shares of the

Company’s capital stock, throughout the period of validity of the plan, considering all the options already

granted under the Plan, exercised or not, except those which have been extinct and not exercised as long as

the total number of shares issued or can be issued under the Plan is always within the boundary the authorized

capital of the company. In addition, the aim of the Plan is to grant share purchase options in an amount that

does not exceed 1% of shares of the Company’s total capital each year, as verified on the date the plan was

approved.

As part of the 1/2010 Program, 479,473 options have been granted that will be converted into ordinary shares

in the Company. Up to December 31st, 2017, 468,845 options have been exercised.








in the Company. Up to December 31st, 2017, no options have been exercised.

The plan 2016 disposes the granted stock options according to the Plan may confer rights of purchase on a

number of shares that do not exceed 1,700,000 of shares from the Company’s capital stock throughout the

whole term of the Plan, computing in this calculation all options already granted under the Plan, exercised or

not, except those that have been extinct and not exercised, provided that the total number of issued shares

or expected to be issued under the Plan is always within the limit of the Company's authorized capital.

g. Maximum number of shares to be granted

Each option granted under the Company's plans entitles its beneficiary the right to acquire or subscribe one

(1) common share, nominative, book entry and with no par value representing the Company's share capital.

Thus, the maximum number of options to be granted by the Company's plans is the maximum number of

shares covered by the Company's plans, as described in the previous section.

h. Conditions for acquiring the shares

To receive the stock options in the 1/2010 Program, each beneficiary had to use at least 33% of the variable

component of their compensation associated with the Company’s Profit-Sharing Program, net of taxes, which

were received related to the 2009 financial year, to acquire shares issued by the Company.

To receive the stock options in the 1/2011 Program, each beneficiary had to use at least 33% of the variable

component of their compensation associated with the Company’s Profit-Sharing Program, net of taxes, which

were received related to the 2010 financial year, to acquire shares issued by the Company.

To receive the stock options in the 1/2012 Program, each beneficiary will have to use at least 33% of the

variable component of their compensation associated with the Company’s Profit-Sharing Program, net of taxes,

which were received related to the 2011 financial year, to acquire shares issued by the Company.







Additionally, the Board of Directors approved grants within the 1/2011, 1/2012, 1/2013 and 1/2014 Programs,

independent of the investment in the Company's shares to certain employees of the Company, due to its

performance in the exercise of their jobs.


contribution to the attainment of the goals of value creation, the development potential of each one, the

essential functions performed and any other characteristics considered strategically relevant information.

i. Criteria for determining the acquisition or exercise price

Under the Plan 2010, until April 20, 2012, the price of the ordinary shares to be acquired by the beneficiaries,

by exercising their option rights were determined by the Company’s Board of Directors or committee created

for this purpose based exclusively on the average share price on the BM&FBOVESPA, weighted by the trading

volume in the month or the two months prior to the granting of the stock option, monetarily adjusted by the

inflation index IPCA, and deducting the value of dividends and interest on equity per share paid by the

Company as from the stock option date. On April 20, 2012, according to the resolution of the General Meeting

held on that date, the criterion for fixing the exercise price of the options that have as a counterpart the

acquisition of shares by its beneficiary was changed and was defined as the equity value of the shares on the

last day of the subsequent fiscal year. This change does not affect the options granted prior to that General

Meeting and the new criterion does not apply to options granted that have no counterpart of the acquisition

of shares by the beneficiary, which continues to be applied the criterion of market price, described above.

For the 1/2010 Program, the exercise price of the options will be based on the value of the shares issued at

the Company’s Initial Public Offering (R$11.50), monetarily adjusted by the inflation according to the IPCA,

which is disclosed by the Brazilian Institute of Geography and Statistics (IBGE), deducting the value of

dividends and interest on equity per share paid by the Company as from the stock option date.

Regarding the 1/2011 Program, the exercise price of the options will be the average share price acquired

according to brokerage invoice sent by the beneficiary to the Board of Directors or Human Resources

Committee of the Company (R$ 19.28), monetarily adjusted by the inflation according to the IPCA or by

another index determined by the Board of Directors or committee, according to the case, from the date of

conclusion of the stock option agreement until the date the option is exercised, deducting the value of

dividends and interest on equity per share paid by the Company as from the stock option date.

Regarding the 1/2012 Basic Program, the exercise price of the options will be the average share price acquired


Committee of the Company (R$ 5.86), monetarily adjusted by the inflation according to the IPCA or by another

index determined by the Board of Directors or committee, according to the case, from the date of conclusion

of the stock option agreement until the date the option is exercised, deducting the value of dividends and

interest on equity per share paid by the Company as from the stock option date.

Regarding the 1/2012 Discricionary Program, the exercise price of the options will be the average share price

on the BM&FBOVESPA in the year of 2011 (R$19.22), weighted by the trading volume, monetarily adjusted

by the inflation according to the IPCA or by another index determined by the Board of Directors or committee,

according to the case, from the date of conclusion of the stock option agreement until the date the option is

exercised, deducting the value of dividends and interest on equity per share paid by the Company as from the

stock option date.

Regarding the 1/2013 Basic Program, the exercise price of the options will be equal to the book value of shares

on December 31st of the fiscal year of the Company immediately preceding the stock option date (R$ 6.80),

monetarily adjusted by the inflation according to the IPCA or by another index determined by the Board of

Directors or committee created for this purpose, according to the case, from the date of conclusion of the

stock option agreement until the date the option is exercised, deducting the value of dividends and interest

on equity per share paid by the Company as from the stock option date.



by the inflation according to the IPCA or by another index determined by the Board of Directors or committee

created for this purpose, according to the case, from the date of conclusion of the stock option agreement

until the date the option is exercised, deducting the value of dividends and interest on equity per share paid

by the Company as from the stock option date.

Regarding the 1/2014 Basic Program, the exercise price of the options will be equal to the book value of shares

on December 31st of the fiscal year of the Company immediately preceding the stock option date (R$ 7.98),

monetarily adjusted by the inflation according to the IPCA or by another index determined by the Board of

Directors or committee created for this purpose, according to the case, from the date of conclusion of the

stock option agreement until the date the option is exercised, deducting the value of dividends and interest

on equity per share paid by the Company as from the stock option date.



by the inflation according to the IPCA or by another index determined by the Board of Directors or committee

created for this purpose, according to the case, from the date of conclusion of the stock option agreement

until the date the option is exercised, deducting the value of dividends and interest on equity per share paid

by the Company as from the stock option date.

Regarding the 2016 Plan, the exercise price of options granted under the Plan is R$ 2.63 (two reais and sixty

three cents), based on value of the Company's stock issuance approved by the Board of Directors in February

5, 2016. The exercise price of the options will be restated according to the IPCA (Broad consumer price index),

disclosed by the Brazilian Institute of Geography and Statistics (IBGE), or by another index determined by the

Board of Directors or Committee (according to the case), deducting the value of dividends and interest on

equity per share paid by the Company from the stock option date. The Investor Relations area of the Company

will calculate the updated exercise price of the options.

j. Criteria used to determine the exercise term

The options granted under the terms of this plan will be subject to grace periods of up to 72 (seventy two)

months for the conversion of options into shares.

For the 2016 Plan, the Board of Directors shall decide in its sole discretion, to each program of granting of

stock options, the dates on which the options may be exercised, the deadline for the exercise of stock options

and the other terms and conditions of granting, exercise and stock options contracts to beneficiaries. The

options granted under the 2016 Plan may be exercised, in full or in part, provided that they observe the time

limits, not under 12 (twelve) months, determined by the Board of Directors, and the other terms and conditions

contained in the respective Option Contracts.

k. Form of liquidation/settlement

The options granted under the Company's Plans give their holders the right to subscribe and/or purchase

shares representing the Company’s capital, against the payment of the respective issue or acquisition price or,

as the case may be, in an amount corresponding to the exercise price of each option. With the purpose to

satisfy the exercise of stock options granted under the Company’s Plans, the Company may, at the discretion

of the Board of Directors: (i) issue new shares within the limits of the authorized capital; and/or (ii) divest

and/or use shares held in Treasury.

The shares resulting from the exercising of purchase options will be integrated and/or acquired by their

respective beneficiaries in cash, in current national currency.

l. Restrictions on the transfer of shares

The Plans of the Company provide that, as long as the exercise price is not paid in full, shares acquired with

the exercise of the option under the Company's Plans may not be sold to third parties, unless prior authorization

is granted by the Board of Directors, The proceeds from the sale will be destined primarily for discharge of the

debit of the beneficiary to the Company.

Under the respective option agreement entered into under the 2010 Plan, each beneficiary will be barred from

trading its shares for a period of five years, subject to the following rules:

(i) after one year following the signature of the respective option contract, each beneficiary will be released

to trade up to 25% of its acquired shares;

(ii) after one year after the deadline defined in item (i) above, each beneficiary will be released to negotiate

another 25% of its acquired shares (plus any unsubscribed shares not exercised within the preceding grace

period);

(iii) after one year after the deadline defined in item (ii) above, the beneficiary will be released to negotiate

another 25% of its acquired shares (plus any unsubscribed shares not exercised within the previous grace

period); and

(iv) after one year after the deadline defined in item (iii) above, each beneficiary will be released to negotiate

the balance of his / her acquired shares (plus any unsubscribed shares not exercised within the preceding

grace period).

Under the terms of the respective option agreement entered into under the 2016 Plan, the Purchase Options

may be exercised in accordance with the following schedule:

(a) as of May 1, 2019 ("First Grace Period"), the Beneficiary may exercise Purchase Options corresponding to

up to 25% (twenty five percent) of the shares that may be acquired through the exercise of options He

granted;

(b) as of May 1, 2020 ("Second Grace Period"), the Beneficiary may exercise Purchase Options corresponding

to up to 25% (twenty-five percent) of the shares that may be acquired through the exercise of options Granted

in addition to the options that became exercisable after the First Grace Period and which have not yet been

exercised;

(c) as from May 1, 2021 ("Third Grace Period"), the Beneficiary may exercise Purchase Options corresponding

to up to 25% (twenty five percent) of the shares that may be acquired through the exercise of options Granted

in addition to the options that became exercisable after the First Grace Period and the Second Grace Period

and which have not yet been exercised; and

(d) as from May 1, 2022 (the "Fourth Grace Period"), the Beneficiary may exercise Purchase Options

corresponding to up to 25% (twenty five percent) of the shares that may be acquired through the exercise of

options Granted in addition to the options that became exercisable after the First Grace Period, the Second

Grace Period and the Third Grace Period and which have not yet been exercised; and

(e) any Purchase Options, if any, not exercised within the Maximum Exercise Period (as defined in Clause 4.1

below) will be considered automatically extinguished, regardless of any notification and without

indemnification.

m. criteria and events that, when verified, will lead to the suspension, alteration or extinction of the

plan

The stock option rights granted under the terms of the Plan will automatically all be cancelled in the following

cases: (i) on the complete and full exercising of the same; (ii) after the option term has expired; (iii) through

the mutual rescission of the stock option; (iv) if the Company is dissolved, liquidated or files for bankruptcy;

(v) if the beneficiary fails to observe the trading restriction rules described in item “l” above; or (vi) trading

restriction rules described in item “n” below.

The options granted under the 2016 Plan extinguish automatically, ceasing all its full effects in the following

cases: (i) through its full exercise; (ii) after the expiry of the period of validity of the option; (iii) by means of

the end of the stock option agreement; (iv) if the Company is dissolved, liquidated or is bankrupt; (v) in the

cases of the item "n" below; or (vi) in other events contemplated in stock option agreement.

n. effects generated by the Company`s Board and Committee Manager`s departure upon his/her

rights as provided by the stock-based compensation plan

If at any time during the validity of the Stock Options 2010 Plan , the beneficiary resigns voluntarily from the

Company or leave their management role: (a) the rights not exercised in accordance with the respective Option

Contract on the date they leave the Company will automatically all be cancelled, with no need for any prior

warning or notification, and with no right to any indemnity; and (b) the rights already exercised in accordance

with the respective Option Contract on the date they leave the Company may be exercised within a period of

30 days from the same date, after which all rights will automatically all be cancelled, with no need for any

prior warning or notification, and with no right to any indemnity;

If at any time during the validity of the Stock Options 2016 Plan , the beneficiary resigns voluntarily from the

Company or leave their management role: (i) the rights not exercised in accordance with the respective Option


warning or notification, and with no right to any indemnity, (a) the still not exercisable rights, (b) 50% (fifty

per cent) of the already exercisable rights, in both cases, in accordance with the respective contract, on the

day they leave the Company; and (ii) On the date they leave the Company may be exercised within a period

of 30 days from the same date, the balance of 50% (fifty per cent) of the exercisable rights in accordance

with respective Option contract, on the date they leave the company. After this period, all rights will

automatically all be cancelled, with no need for any prior warning or notification, and with no right to any

indemnity;

In other cases of dismissal, if, at any time during the term of the Company's Plans, the beneficiary:

(i) leaves the Company as a result of being fired for just cause, or failure to fulfill their duties adequately

as a manager, all the right (exercised and not exercised) in accordance with the respective Option Contract

on the date they leave the Company will automatically all be cancelled, with no need for any prior warning or

notification, and with no right to any indemnity;

(ii) leaves the Company as a result of being fired with no just cause, or failure to fulfill their duties

adequately as a manager: (i) the rights not exercised in accordance with the respective Option Contract on

the date they leave the Company will automatically all be cancelled, with no need for any prior warning or

notification, and with no right to any indemnity; except if the Board decides to anticipate the grace period

term for some or all of these rights, and the beneficiary leaves the Company within a period of up to 12

(twelve) months after the change in share control in the Company all the unexercised rights in accordance

with the respective Option Contract on the date they leave the Company may be exercised within a period of

30 days from the same date, after which all rights will automatically all be cancelled, with no need for any

prior warning or notification, and with no right to any indemnity, will have their grace period anticipated; and

(ii) the rights already exercised in accordance with the respective Option Contract on the date they leave the

Company may be exercised within a period of 30 days from the same date, after which all rights will

automatically all be cancelled, with no need for any prior warning or notification, and with no right to any

indemnity;

(iii) on retiring from the Company: (i) the rights not exercised in accordance with the respective Option


warning or notification, and with no right to any indemnity, except if the Board decides to anticipate the grace

period term for some or all of these rights; and (ii) the rights already exercised in accordance with the Options

Contract on the date of leaving the Company will have their grace period anticipated, allowing the Beneficiary

to exercise the respective stock option, as long as this is within a period of 12 (twelve) months from the date

of retirement, after which all the remaining rights will automatically all be cancelled, with no need for any prior

warning or notification, and with no right to any indemnity;

(iv) leaving the Company due to death or permanent disability: (i) the rights not exercised in accordance

with the respective Option Contract on the date they leave the Company will automatically all be cancelled,

with no need for any prior warning or notification, and with no right to any indemnity, except if the Board

decides to anticipate the grace period term for some or all of these rights; and (ii) the rights already exercised

in accordance with the Options Contract, on the date of passing away, can be exercised by the Beneficiary’s

legal successors, as long as this is done within a period of 12 (twelve) months from the aforementioned date,

after which all the remaining rights will automatically all be cancelled, with no need for any prior warning or

notification, and with no right to any indemnity.

Despite the disposed above, the Board or Committee (according to the case) can, at their exclusive criteria,

whenever they deem that social interests are better met by this approach, chose not to abide by the rules

stipulated above, and treat a determined Beneficiary in a differentiated and individual manner.

13.5 Information on the remuneration of the board of directors and of the statutory board of

directors based on shares, recognized in the results of the last 3 fiscal years, and that forecast

for the current fiscal year

The tables below show the impact of those stock option plans on the compensation of our statutory directors

in the years 2015, 2016 and 2017 and the estimated impact for 2018. The Company’s Board of Directors does

not have stock based compensation.

Stock Option Plan

Program 1/2010 2014¹ 2015 2016

Number of Members of the Board of

Executive Officers 6.00 3.92 3.75

Number of remunerated Members of the

Board of Executive Officers 6.00 3.92 3.75

Grant Date 05/31/2010 05/31/2010 05/31/2010

Number of granted options - - -

Number of non-redeemable options - - -

Number of redeemable options¹ 10,628 - -

Deadline for options to become redeemable

25% of the

options become

exercisable per

year, from the

year following

the grant date.

25% of the

options become

exercisable per

year, from the

year following

the grant date.

25% of the

options become

exercisable per

year, from the

year following

the grant date.

Deadline for redeeming options 05/31/2016 05/31/2016 05/31/2016

Grace period for stock transfer

Quantity of options exercised 534,574 534,574 534,574

Pondered average price within accounting

reference period for each of the following

option groups

Outstanding at the beginning of the

accounting reference period R$ 13.01 - -

Not redeemed throughout accounting

reference period

Redeemed within accounting reference

period R$ 13.44 - -

Expired within accounting reference

period

Fair option price on grant date -

Potential dilution in the event of exercise of

all options granted3 0.43% 0.00% 0.00%

1. 2014 and 2015 considers the balance of options granted to the new directors elected , minus the balance

of the options of the Directors who resigned , as stated on the resigning terms available on the Company

headquarters and on the minutes of the Board of Directors meeting.

2. Dilution of outstanding options based on the total shares of the Company's capital at the end of fiscal year,

except for the current year that considers the total shares of the Company's capital at beginning of year. At

the end of the fiscal year of 2014 and 2015, the amount of shares were 128.057.925. At the end of the fiscal

year of 2017, the total number of shares was equal to 175.586.447.

3. Fair value of R$ 3.87 per option. Assumptions available in item 13.9(b).

Program 1/2011 2014² 2015 2016 2017

Number of Members of the

Board of Executive Officers 6.00

4.08 3.83

3.00


Members of the Board of

Executive Officers

6.00

4.08 3.83

3.00

Grant Date 04/16/2011 04/16/2011 04/16/2011


Number of non-redeemable

options 143,442 - -

Number of redeemable

options¹ 170,385 86,888 86,888 86,888

Deadline for options to

become redeemable

25% of the

options

become

exercisable

per year,

from the year

following the

grant date.

25% of the

options

become

exercisable per

year, from the

year following

the grant date.

25% of the

options

become

exercisable per

year, from the

year following

the grant date.

25% of the

options

become

exercisable

per year, from

the year

following the

grant date.

Deadline for redeeming

options 04/16/2017 04/16/2017 04/16/2017 04/16/2017


Quantity of options exercised 169,080 169,080 169,080 169,080

Pondered average price within

accounting reference period

for each of the following

option groups

Outstanding at the

beginning of the accounting

reference period

R$ 21.50 R$ 23.02 R$ 25.27 R$ 27.04

Not redeemed throughout


Redeemed within

accounting reference period R$ 22.20 -

Expired within accounting

reference period

Fair option price on grant date - -

Potential dilution in the event

of exercise of all options

granted3

0.38% 0.07% 0.07%

0.07%

1. Total amount of redeemable options less the total amount of redeemable options exercised at the end of the period for

the fiscal years ended and total amount of redeemable options at end of period less the total amount of redeemable

options exercised in years previous to the current year.

2. 2014 and 2015 considers the balance of options granted to the new directors elected , minus the balance of the options of the Directors who resigned , as stated on the resigning terms available on the Company headquarters and on the minutes of the Board of Directors meeting. 3. Dilution of outstanding options based on the total shares of the Company's capital at the end of fiscal year, except for the current year that considers the total shares of the Company's capital at beginning of year. At the end of the fiscal year of 2014 and 2015, the amount of shares were 128.057.925. At the end of the fiscal year of 2017, the total number of shares was equal to 175.586.447.

4. Fair value of R$ 5,58 per option. Assumptions available in item 13.9(b).

Program 1/2012 - Basic 2014² 2015 2016 2017

Number of Members of the Board of

Executive Officers 6.00

4.08 3.75

3.00

Number of remunerated Members of

the Board of Executive Officers 6.00

4.08 3.75

3.00

Grant Date 06/30/2012 06/30/2012 06/30/2012 06/30/2012

Number of granted options - -

Number of non-redeemable options 25,190 3,927 - -

Number of redeemable options¹ - 3,927 7,854 7,854

Deadline for options to become

redeemable

25% of the

options

become

exercisable per

year, from the

year following

the grant date.

25% of the

options

become

exercisable

per year,

from the year

following the

grant date.

25% of the

options

become

exercisable

per year,

from the year

following the

grant date.

25% of the

options

become

exercisable

per year,

from the

year

following the

grant date.

Deadline for redeeming options 06/30/2018 06/30/2018 06/30/2018 06/30/2018


Quantity of options exercised 22,210 22,210 22,210 22,210


accounting reference period for each of

the following option groups


accounting reference period R$ 5.75 R$ 6.03 R$ 6.67 R$ 7.15



Redeemed within accounting

reference period R$ 5.93

- - -


period

Fair option price on grant date4 -

Potential dilution in the event of

exercise of all options granted3 0.04%

0.01% 0.01% 0.01%




2. 2014 and 2015 considers the balance of options granted to the new directors elected, minus the balance of the options of the Directors who resigned, as stated on the resigning terms available on the Company headquarters and on the minutes of the Board of Directors meeting. 3. Dilution of outstanding options based on the total shares of the Company's capital at the end of fiscal year, except for the current year that considers the total shares of the Company's capital at beginning of year. At the end of the fiscal year of 2014 and 2015, the amount of shares were 128.057.925. At the end of the fiscal year of 2017, the total number of shares was equal to 175.586.447.


Program 1/2012 -

Discretionary 2014² 2015 2016

2017

Number of Members of the

Board of Executive Officers 6.00

4.08 3.75

3.00



Executive Officers

6.00

4.08

3.75

3.00

Grant Date 06/30/2012 06/30/2012 06/30/2012 06/30/2012


Number of non-redeemable

options 164,000 31,000 - -


options¹ 91,500 55,750 86,750 86,750


become redeemable

25% of the

options become

exercisable per

year, from the

year following the

grant date.

25% of the

options become

exercisable per

year, from the

year following

the grant date.

25% of the

options become

exercisable per

year, from the

year following

the grant date.

25% of the

options

become

exercisable

per year,

from the

year

following

the grant

date.


options 06/30/2018

06/30/2018 06/30/2018 06/30/2018

Grace period for stock

transfer

Quantity of options

exercised 39,000 39,000 39,000 39,000

Pondered average price

within accounting reference

period for each of the

following option groups

Outstanding at the

beginning of the

accounting reference

period

R$ 20.37 R$ 21.79 R$ 23.90 R$ 25.47

Not redeemed

throughout accounting

reference period

Redeemed within


period

R$ 21.03

- -

Expired within accounting

reference period

Fair option price on grant

date4 -

Potential dilution in the

event of exercise of all

options granted3

0.23% 0.05% 0.05% 0.05%






Program 1/2013 -

Basic 2014²

2015

2016

2017

Number of Members

of the Board of

Executive Officers

6.00 4.08 3.75

3.00

Number of

remunerated

Members of the

Board of Executive

Officers

6.00 4.08 3.75

3.00

Grant Date 04/30/2013 04/30/2013 04/30/2013 04/30/2013

Number of granted

options - - -

Number of non-

redeemable options 104,153 16,660 8,331 0

Number of

redeemable options¹ - 8,329 16,658 24,989

Deadline for options

to become

redeemable

25% of the options

become exercisable

per year, from the

year following the

grant date.

25% of the

options become

exercisable per

year, from the

year following the

grant date.

25% of the

options become

exercisable per

year, from the

year following the

grant date.

25% of the

options become

exercisable per

year, from the

year following

the grant date.

Deadline for

redeeming options 04/30/2019 04/30/2019 04/30/2019 04/30/2019

Grace period for

stock transfer

Quantity of options

exercised 34,717 34,717 34,717 34,717

Pondered average

price within

accounting

reference period for

each of the

following option

groups

Outstanding at

the beginning of

the accounting

reference period

R$ 6.72 R$ 7.04 R$ 7.75 R$ 8.18

Not redeemed

throughout

accounting

reference period

Redeemed within

accounting

reference period

R$ 6.95 - - -

Expired within

accounting

reference period

Fair option price on

grant date4

Potential dilution in

the event of 0.11% 0.01% 0.01% 0.01%

exercise of all

options granted3






Program 1/2014 - Basic 20142 2015 2016 2017 2018

Number of Members of

the Board of Executive

Officers

6,00 4,08 3,75

3,00 3,00



Executive Officers

6,00 4,08 3,75

3,00 3,00

Grant Date 30/04/2014 30/04/2014 30/04/2014 30/04/2014 30/04/2014

Number of granted

options 101.852 - - -

-

Number of non-

redeemable options 101.852 25.650 17.100 8.550


options¹ 8.550 17.100 25.650 34.200


become redeemable

25% das opções

tornam-se

exercíveis por

ano, a partir do

ano seguinte da

data da outorga.

25% das opções

tornam-se

exercíveis por

ano, a partir do

ano seguinte da

data da outorga.

25% das opções

tornam-se

exercíveis por

ano, a partir do

ano seguinte da

data da outorga.

25% das opções

tornam-se

exercíveis por

ano, a partir do

ano seguinte da

data da outorga.

25% das

opções

tornam-se

exercíveis por

ano, a partir

do ano

seguinte da

data da

outorga.


options 30/04/2020 30/04/2020 30/04/2020 30/04/2020

30/04/2020

Grace period for stock

transfer

Quantity of options

exercised - - - -

-

Pondered average price

within accounting

reference period for each




2. 2014 and 2015 considers the balance of options granted to the new directors elected , minus the balance of the options of the Directors who resigned , as stated on the resigning terms available on the Company headquarters and on the minutes of the Board of Directors meeting.

3. Dilution of outstanding options based on the total shares of the Company's capital at the end of fiscal year, except for the current year that considers the total shares of the Company's capital at beginning of year. At the end of the fiscal year of 2014 and 2015, the amount of shares were 128.057.925. At the end of the fiscal year of 2017, the total number of shares was equal to 175.586.447.


of the following option

groups

Outstanding at the

beginning of the


period

- R$ 8,17 R$ 8,95 R$ 9,51

R$ 9,80

Not redeemed

throughout accounting

reference period

Redeemed within


period

- -

Expired within


period

Fair option price on grant

date4 R$ 2.299.818

Potential dilution in the

event of exercise of all

options granted3

0,08% 0,03% 0,03% 0,03%

0,02%

Program 1/2016 2016 2017 2018

Number of Members of the Board of Executive Officers

3,75 4,00 4,00

Grant Date 30/05/2016 30/05/2016 30/05/2016

Number of granted options 1.080.000

Number of non-redeemable options 1.080.000 1.080.000 780.000

Number of redeemable options¹ 0 0 0

Deadline for options to become

redeemable

25% das opções

tornam-se exercíveis por ano,

a partir do terceiro ano da data da

outorga.

25% das opções tornam-se exercíveis por

ano, a partir do terceiro ano da data da outorga.

25% das opções

tornam-se exercíveis

por ano, a partir do

terceiro ano da data

da outorga.

Deadline for redeeming options 30/05/2024 30/05/2024 30/05/2024

13.6 With respect to outstanding options for the Board of Directors and the Board of Executive

Officers at the closing of the last accounting reference period

Board of Executive Officers

Program 1/2011

Program 1/2012

Program 1/2012

Program 1/2013

Program 1/2013

Program 1/2014 Program

1/2016 Total

Basic Discretionary Basic Discretionary Basic

Number of members

3 3 2 2 2 2 4,00 2,6

Non-

Outstanding

options

Number of

shares 0 0 0 0 0 8.550 1.080.000 1.088.550

Deadline for

options to

become

redeemable

-

3.927 opções se tornam

exercíveis a cada ano até 2016


exercíveis a cada ano até

2016




exercíveis a cada ano até

2017

8550 opções se tornam



exercíveis, a partir de 2019, a

cada ano até 2022

Deadline for

redeeming

options

16.4.2016 31.5.2017 31.5.2017 30.4.2018 30.4.2018 30.4.2019 30.4.2024

Deadline

to transfer

shares

- - -


Quantity of options exercised


accounting reference period for each of

the following option groups


accounting reference period R$2,69 R$2,77



Redeemed within accounting

reference period


period

Fair option price on grant date4

Potential dilution in the event of

exercise of all options granted3 0,62% 0,62% 0,44%

Balanced

average price

of the fiscal

year

R$25,27 R$6,67 R$23,90 R$7,75 R$31,39 R$9,80 R$2,77

Fair value of

options on

the last day

of the fiscal

year

R$0 R$0 R$0 R$0 R$0 R$9.149 R$2.916.000 R$2.925.149

Exercisable

Options

Number of

shares 86.888 3.927 86.750 16.658 18.750 34.200 0 247.173

Deadline for

redeeming

options

16.4.2016 31.5.2017 31.5.2017 30.4.2018 30.4.2018 30.4.2019 30.4.2024

Deadline to

transfer

shares

Balanced

average price

of the fiscal

year

R$25,27 R$6,67 R$23,90 R$7,75 R$31,39 R$9,80 R$2,77 R$1,88

Fair value of

options on

the last day

of the fiscal

year

R$32.149 R$5.576 R$32.965 R$20.156 R$4.313 R$36.594 R$0 R$131.753


Progra

m

1/2010

Program

1/2011

Program

1/2012

Basic

Program

1/2012

Discretion

ary

Program

1/2013

Basic

Program

1/2013

Discretio

nary

Program

1/2014

Basic

Progra

m

1/2016 Total

Number

of

members

3 3 3 2 2 2 2 4 2.6

Number

of

members

remunere

d

3 3 3 2 2 2 2 4 2.6

Non-

Outstandi

ng options

Number of

shares

- - - - 8,331 4,689 17,100 1,080,00

0

1,110,120

Deadline for

options to

become

redeemable

- - 3.927

options

become

exercisabl

e every

year until

2016

31.000

options

become

exercisable

every year

until 2016

8.331

options

become

exercisable

every year

until 2017

4.689

options

become

exercisabl

e every

year until

2017

8.550

options

become

exercisabl

e every

year until

2018

270.000

options

become

exercisab

le, from

2019,

every

year until

2022

Deadline for

redeeming

options

05.31.201

5 4.16.2016 5.31.2017 5.31.2017 4.30.2018 4.30.2018

4.30.201

9

Deadline to

transfer

shares

- -

-

Balanced

average

price of the

fiscal year

R$25.27 R$6.67 R$23.90 R$7.75 R$31.39 R$8.95 R$2.69

Fair value

of options

on the last

day of the

fiscal year

-

R$0 R$0 R$0 R$11,330 R$1,360 R$19,323 R$2,797,

200

R$2,829,2

13

Exercisabl

e Options

Number

of shares

- 86,888 3,927 86,750 16,658 14,061 25,650 0 233,934

Deadline for

redeeming

options

5.31.20

15 4.16.2016 5.31.2017 5.31.2017 4.30.2018 4.30.2018 4.30.2019

4.30.202

4

Deadline to

transfer

shares

Balanced

average

- R$25.27 R$6.67 R$23.90 R$7.75 R$31.39 R$8.95 R$2.69 R$1.85

price of the

fiscal year

Fair value of

options on

the last day

of the fiscal

year

R$0 R$32,149 R$5,576 R$32,965 R$22,655 R$4,078 R$28,985 R$0 R$126,407

Total fair

value of

options on

the last day

of the fiscal

year

R$0 R$32,14

9 R$5,576 R$32,965 R$33,985 R$5,438

R$48,30

8

R$2,797

,200

R$2,955,

620


Program

1/2010

Program

1/2011

Program1

/2012

Basic

Program

1/2012

Discretio

nary

Program

1/2013

Basic

Program

1/2013

Discreti

onary

Program

1/2014

Basic Total

Number of

members 3 3 3 2 2 2 2 2.5

Number of

members

remunered

3 3 3 2 2 2 2 2.5

Non-

Outstanding

options

Number of

shares

- - 3,927 31,000 16,660 9,376 25,650 86,613

Deadline for

options to

become

redeemable

- - 3.927

options

become

exercisable

every year

until 2016

31.000

options

become

exercisable

every year

until 2016

8.329

options

become

exercisable

every year

until 2017

4.687

options

become

exercisabl

e every

year until

2017

8.550

options

become

exercisabl

e every

year until

2018

Deadline for

redeeming

options

5.31.2016 4.16.2017 5.31.2018 5.31.2018 4.30.2019 4.30.201

9

4.30.202

0

Deadline to

transfer shares

- - - - - - -

Balanced

average price

of the fiscal

year

Fair value of

options on the

last day of the

fiscal year

- R$ 0 R$ 3,088 R$ 4,625 R$ 11,289 R$ 855 R$

14,876

R$ 37,734

Exercisable

Options

Number of

shares

- 86,888 3,927 55,750 8,329 9,374 8,550 172,818

Deadline for

redeeming

options

5.31.2016 4.16.2017 5.31.2018 5.31.2018 4.30.2019 4.30.201

9

4.30.202

0

Deadline to

transfer shares

Balanced

average price

of the fiscal

year

- R$ 23.02 R$ 6.03 R$ 21.79 R$ 7.04 R$ 28.67 R$ 8.17 R$ 4.99

Fair value of

options on the

last day of the

fiscal year

- R$ 11,796 R$ 3,088 R$ 8,317 R$ 5,644 R$ 855 R$ 4,959 R$ 34,659

Total fair value

of options on

the last day of

the fiscal year

R$ 0 R$

11,796

R$ 6,177 R$

12,942

R$

16,932

R$

1,711

R$

19,835

R$

69,393

Board of Directors

Board of Directors has no stock-based compensation.

13.7 With respect to exercised options for the Board of Directors and the Board of Executive Officers at the

closing of the last accounting reference period

Board of Executive Officers

Exercised Options – fiscal year ended in 12/31/2017

No options were exercised in 2017





Program

1/2010

Program

1/2011

Program

1/2012 -

Basic

Program

1/2012 -

Discretionary

Program

1/2013 -

Basic

Program

1/2013 -

Discretionary

Total

Number of

members 5 5 5 5 5.17 5.17 5.06

Number of

members

remunered

5 5 5 5 5.17 5.17 5.06

Exercised

options

Number of

shares 134,307 38,799 12,595 22,000 34,717 - 242,418

Weighted

average

exercise price

R$ 13.44 R$ 22.20 R$ 5.93 R$ 21.03 R$ 6.95 R$ 26.78 R$ 5.96

Total value

of the

difference

between the

exercise value

and market

value of shares

related to

options

exercised 1

R$ 903,886 -R$ 78,762 R$ 179,353 -R$ 18,920 R$

458,959 -

R$

1,444,516

Shares

Granted

Number of

granted shares 134,307 38,799 12,595 22,000 34,717 - 242,418

Pondered

average price

of acquisition

R$ 13.44 R$ 22.20 R$ 5.93 R$ 21.03 R$ 6.95 R$ 26.78 R$ 5.96

Total value

of the

difference

between the

exercise value

and market

value of shares

R$ 903,886 -R$ 78,762 R$ 179,353 -R$ 18,920 R$

458,959 -

R$

1,444,516

related to

options

exercised 1

¹ Average market price, pondered by volume, in the last trading day of the fiscal year, equals R$20.17 at the

end of 2014.

Board of Directors

Board of Directors has no stock-based compensation.

13.8 Summary of relevant information aiming at a broader understanding of data presented under items

13.5 through 13.7 above, as well as an explanation of the pricing method used for stock and option values

a. Pricing model

The programs granted from 2010 onwards were classified as equity instruments, which the weighted average fair value of

options is determined using the Black-Scholes valuation model using as premises: (a) weighted average share price, (b)

exercise price, (c) expected volatility, (d) dividend yield, (e) expected option life and (f) annual risk-free interest rate. The

equity portion is priced only at the grant date and the fair value is not measured again on every reporting date. The

portions of equity and debt are appropriated plan by plan, taking into consideration the respective lock up periods (period

in which shares are blocked for trading), based on management's best estimate as to their end dates.

b. Data and assumptions used in the pricing model

The table below shows the data and assumptions of our pricing model:

Plans granted in 2012

Calculation of fair value 1/2012

Basic (30/06/2012)

1/2012

Discretionary (30/06/2012)

Grant Date

Exercise price R$5,86 R$19,22

Weighted average share price R$27,10 R$27,10

Expected volatility1 37,41% 37,41%

Expected option life (days) 1.461 1.461

Dividend yield 0,87% 0,87%

Risk-free interest rate 3,92% 3,92%

Fair value per share R$21,20 R$12,18

At the end of 2011








At the end of 2012




Expected option life (days) 882 882




At the end of 2013








At the end of 2014








At the end of 2015








At the end of 2016



Expected volatility 48,10% 48,10%

Expected option life (days)² 152 152




1 Measured by the history of the behavior of the Company's share value

2 Considering exercise term limit 05/31/2018


Calculation of fair value 1/2013

Basic (30/04/2013)

1/2013


Grant Date








At the end of 2011








At the end of 2012








At the end of 2013








At the end of 2014








At the end of 2015








1 Measured by the history of the behavior of the Company's share value


Calculation of fair value

1/2014

Basic (04/30/2014)

1/2014


Grant Date

Exercise price R$7.98 R$30.94

Weighted average share price R$28.12 R$28.12

Expected volatility1 33.45% 35.34%

Expected option life (days) 1,461 1,461

Dividend yield 0.75% 0.75%

Risk-free interest rate 12.47% 12.47%

Fair value per share R$22.58 R$11.16

At the end of 2014



Expected volatility 36.00% 36.00%

Expected option life (days) 1,216 1,216




At the end of 2015








At the end of 2016









Calculation of fair value

1/2016


Grant Date

Exercise price R$2.63

Weighted average share price R$4.31

Expected volatility1 71.45%

Expected option life (days) 2,556

Dividend yield 1.51%

Risk-free interest rate 14.25%

Fair value per share R$3.40

At the end of 2016

Exercise price R$2.69

Weighted average share price R$3.91

Expected volatility1 47.03%

Expected option life (days) 2,309

Dividend yield 0.00%

Risk-free interest rate 5.40%

Fair value per share R$2.57

c. Method used and assumed premises to incorporate the effects from expected early

exercise

There was no early exercise.

d. Way of determining the expected volatility

Expected volatility is determined by the volatility of the share price between April 15, 2010, date of

initial public offering of the Company, and the reference date for calculating the fair value.

e. Other characteristics incorporated in the fair value measurement option

There are none.

13.9 Number of stocks or direct or indirect stock holdings, either in Brazil or overseas,

and other securities that might be converted into stock or quotas, issued by the

Company, direct or indirect affiliates, subsidiaries or companies under common control,

by members of the Executive Board, of the Board of Executive Officers or the Fiscal

Board, grouped per board or committee, on the closing date of the last accounting

reference period:

The table below indicates the number of our shares held directly by our administrators and the

percentage that their direct individual contributions represent of the total number of shares issued

by our Company, in the last fiscal year, December 31st, 2017.

On December 31st, 2017 Number of shares (%)

Board of Directors 14,530,499 8.3%

Board of Executive Officers 68,899 0.04%

Fiscal Council 9,500 0%

The administrators and members of the Company's fiscal council do not hold, directly or indirectly, shares,

shares or other securities convertible into shares or quotas, issued by direct or indirect controlling

shareholders of the Company, subsidiaries or under common control.

In the reported amount of the Board of Directors, the controlling shareholding position of the controlling

shareholders that were part of the Board of Directors in the period, as detailed below, is considered.

On December 31st, 2017 Number of

shares (%)

Controlling Group that is part of the

Board of Directors 13,818,105 7.9%

13.10 Em relação aos planos de previdência em vigor conferidos aos membros do conselho de

administração e aos diretores estatutários, fornecer as seguintes informações: (i) órgão, (ii)

número de membros, (iii) número de membros remunerados, (iv) nome do plano, (v) quantidade

de administradores que reúnem as condições para se aposentar, (vi) condições para se aposentar

antecipadamente, (vii) valor atualizado das contribuições acumuladas no plano de previdência

até o encerramento do último exercício social, descontada a parcela relativa a contribuições

feitas diretamente pelos administradores, (viii) valor total acumulado das contribuições

realizadas durante o último exercício social, descontada a parcela relativa a contribuições feitas

diretamente pelos administradores, e (ix) se há possibilidade de resgate antecipado e quais as

condições

A Companhia não patrocina ou custeia planos de previdência para seus administradores e membros do

Conselho Fiscal.

13.11 Maximum, minimum and average individual remuneration of the board of directors,

statutory board of executive officers and fiscal council

Compensation Exercício social encerrado em 31 de dezembro de

2015 2016 2017

(in R$, except when number of members)

Statutory Board of Directors

Number of members 3,92 3,75 4,00

Number of members remunerated 3,92 3,75 4,00

Highest individual compensation value 2.438.413 2.745.718 3.324.412

Lowest individual compensation value 2.438.413 923.808 1.111.686

Average individual compensation value 2.416.820 2.080.362 1.933.205

Board of Directors



Highest individual compensation value 350.098 262.200 481.500

Lowest individual compensation value 257.612 206.400 104.940

Average individual compensation value 187.546 207.433 321.906

Board of Fiscal Council



Highest individual compensation value 95.578 95.226 123.746

Lowest individual compensation value 95.578 95.226 123.746

Average individual compensation value 95.578 95.226 123.746

13.12 Contract agreements, insurance policies or other instruments that might underlie

the compensation or indemnity mechanisms applicable to managers in the occurrence

of dismissal or retirement

Not applicable. The Company has no contract agreements, insurance policies or other instruments

that might underlie the compensation or indemnity mechanisms applicable to managers in the

occurrence of dismissal or retirement.

13.13 In relation to the last 3 fiscal years, indicate the percentage of the total remuneration of

each body recognized in the Company's results referring to members of the board of directors,

statutory board or fiscal council that are related to the direct or indirect controllers, as defined

By the accounting rules that deal with this subject

Fiscal year ended on December 31,

Body 2015 2016 2017

Board of Directors 31% 33% 39%

Board of Executive Officers 0% 0% 0%

Fiscal Council 0% 0% 0%

13.14 In relation to the last 3 fiscal years, indicate the amounts recognized in the issuer's

income as compensation of members of the board of directors, statutory board or fiscal council,

grouped by body, for any reason other than the position they occupy, such as , Commissions and

consulting or advisory services rendered

Not applicable. In the years ended December 31, 2015, 2016 and 2017, there were no amounts recognized in

the Company's income as compensation of members of the board of directors, statutory executive board or

fiscal council for any reason other than the position they hold, Such as commissions and consulting or advisory

services provided.

13.15 In relation to the last 3 fiscal years, indicate the amounts recognized in the results of

direct or indirect controllers of companies under common control and of the issuer's subsidiaries,

such as remuneration of members of the board of directors, statutory board or fiscal council of

the Company , Grouped by body, specifying to what title such values were attributed to such

individuals.

Not applicable. In the years ended December 31, 2015, 2016 and 2017, there was no remuneration of directors

and members of the fiscal council recognized in the results of direct or indirect controllers of companies under

common control and controlled by the Company.

13.16 Other relevant information

The number of members of the Management Board, Fiscal Council and Board of Executive Officers of the

Company specified in this Section 13 have been calculated in line with the requirements of Ofício-

Circular/CVM/SEP / No. 002/2016, as detailed in the following spreadsheet for each fiscal year:

Fiscal Year of 2018 (Estimated): Number of members of

Board of Directors*

Board of Directors*

Board of Directors*

January 6 4 3

February 6 4 3

March 6 4 3

April 6 4 3

May 5 4 3

June 5 4 3

July 5 4 3

August 5 4 3

September 5 4 3

October 5 4 3

November 5 4 3

December 5 4 3

Total 64 48 36

Number of Members (“Total” divided by the number of months)

5,33 4,00 3,00

Fiscal year of 2017: Number of members of

Board of Directors*

Board of Directors*

Board of Directors*

January 6 4 3

February 6 4 3

March 6 4 3

April 6 4 3

May 6 4 3

June 6 4 3

July 6 4 3

August 6 4 3

September 6 4 3

October 6 4 3

November 6 4 3

December 6 4 3

Total 72 48 36


6,00 4,00 3,00


Board of Directors*

Board of Directors*

Board of Directors*

January 6 3 3

February 6 3 3

March 6 3 3

April 6 4 3

May 6 4 3

June 6 4 3

July 6 4 3

August 6 4 3

September 6 4 3

October 6 4 3

November 6 4 3

December 6 4 3

Total 72 45 36


6,00 3,75 3,00


Board of Directors*

Board of Directors*

Board of Directors*

January 7 5 3

February 7 4 3

March 7 4 3

April 7 5 3

May 7 4 3

June 7 4 3

July 6 4 3

August 6 4 3

September 6 4 3

October 6 3 3

November 6 3 3

December 6 3 3

Total 78 47 36 Number of Members (“Total” divided by the number of months)

6,5 3,92 3

(i) Compensation of the Company’s managers (item 13.2 Reference Form)

The compensation of the Company's managers for the years 2018, 2017, 2016 and 2015 were approved

at a meeting of the Board of Directors on 03/23/2018, 03/08/2017, 03/28/2016 and 03/09/2015 respectively

and also by the shareholders at the General Meetings of the respective years.

In light of the Company's negative financial results in the last three fiscal years, the Company's market

value and the value of its shares are significantly depreciated. Considering that, as disclosed in item 13 of

the Reference Form, part of the management compensation is variable, based on the shares issued by the

Company, the depreciation of its market value had a direct proportional impact on the total remuneration of

the officers, especially the chief executive officer. In addition, the Company's financial performance over

the last three fiscal years did not allow the achievement of the targets and the consequent payment of short-

term variable compensation, with only the payment of discretionary bonuses in 2016 and 2017, as a

retention strategy.

In this scenario, the Company's management decided to increase the fixed portion of the compensation of

the directors considered important for the Company's recovery, in order to maintain the attractiveness of

the positions in the board of directors and increase the retention component, so as to ensure the

maintenance of talents when they are needed most. It is understood that the Company's results reflected

the difficult conditions of the Brazilian economy, especially in the construction sector, which is notorious

and public knowledge, and not the performance of its directors. Failure to pay them properly could lead to

the undesirable consequence of loss of senior management, which would make it more difficult to recover

the results.

The matter was widely discussed by the board of directors and the decision was taken in a weighted way

by this body, in the exercise of its attributions under the corporate law. No director of the Company is a

member of the Board of Directors and therefore has not participated in the discussions.

In addition, during the fiscal year ended December 31, 2016, the Board of Directors was granted the option

under the 1/2016 Program, including the Chief Executive Officer, who became part of the basis for

calculating his compensation, according to CVM, also contributing to an increase in the value of

remuneration in this period. Such a grant, however, would not by itself have the desired retention effect, as

discussed above.

Finally, it should be noted that in the fiscal years ended December 31, 2015, 2016 and 2017, IPCA inflation

was 10.67%, 6.29% and 2.95%, and the IGP-M of 10 , 54%, 7.17% and -0.52%. Although this was not the

main reason for the increase in remuneration, it was necessary to adjust the values also in order to

neutralize the effects of inflation.

14.1 Description of the Company’s Human Resources, providing the following information a. the number of employees (total, by groups based on activity and by geographic location)

The chart below shows the number of our employees in the financial years ended December 2015, 2016 and 2017:

Number of employees 2015 2016 2017

Heavy Construction and Real Estate - Shared

Heavy Construction

Real Estate

Construction 357 309 277

Rental 371 348 394

Operations 622 435 388

Corporate 217 203 201

Total 1,567 1,295 1,260

In December 31, 2015, 2016 and 2017, all employees were allocated in Brazil. The table below indicates the location of the employees of the Company, considering the business units and departments to which they belong, as indicated below: Number of employees on December 31, 2017

States Construction Operations Rental Corporate Total

Amazonas 1 0 3 1 5

Bahia 17 36 24 8 85

Distrito Federal 24 54 5 9 92

Espírito Santo 1 0 11 1 13

Fortaleza 3 1 17 2 23

Goiás 0 0 6 1 7

Maranhão 7 22 9 2 40

Mato Grosso 0 0 10 2 12

Mato Grosso do Sul

0 0 8 1 9

Minas Gerais 12 5 44 7 68

Pará 2 0 14 2 18

Paraná 1 0 14 1 16

Pernambuco 16 24 26 5 71

Rio de Janeiro 48 49 56 125 278

Rio Grande do Norte

0 0 4 1 5

Rio Grande do Sul 16 23 12 4 55

Santa Catarina 0 0 4 1 5

São Paulo 129 174 122 27 452

Sergipe 0 0 5 1 6

Total 277 388 394 201 1260

Number of employees on December 31, 2015


Alagoas 2 1 3

Amazonas 2 7 3 1 13

Bahia 18 50 17 7 92


Espirito Santo 6 12 9 2 29

Fortaleza 16 48 14 5 83

Goiás 2 6 6 1 15

Maranhão 12 19 12 2 45

Mato Grosso 5 1 6

Mato Grosso do Sul 2 6 6 1 15


Para 4 12 12 3 31

Paraná 7 19 14 2 42


Rio de Janeiro 68 122 62 124 376

Rio Grande do Norte 4 1 5


Santa Catarina 4 1 5

São Paulo 144 175 113 31 463

Sergipe 4 1 5

Total 357 622 371 217 1567

Number of employees on December 31, 2016


Alagoas 1 1

Amazonas 1 3 1 5

Bahia 17 40 17 6 80


Espirito Santo 2 1 10 1 14

Fortaleza 10 3 12 4 29

Goiás 6 1 7

Maranhão 12 29 12 2 55

Mato Grosso 5 1 6

Mato Grosso do Sul 1 7 1 9


Para 1 14 2 17

Paraná 2 3 14 2 21


Rio de Janeiro 55 59 55 126 295




São Paulo 136 178 111 30 455

Sergipe 1 3 1 5

Total 309 435 348 203 1295

b. the number of outsourced employees (total, by groups based on activity and by geographic location)

The Company has outsourced certain activities which are not directly related to its core business, such as janitorial

services, security, transport, meal preparation, and IT support, among others. In addition, the Company signs short-term

employment contracts in accordance with the fluctuation in demand for their services. In December 31, 2015, 2016 and

2017, the Company had outsourced workers, as detailed below:

Number of outsourced employees on December 31, 2017

Estates Janitorial Services

Security Transport Catering IT Support Total

Amazonas 2 4 6

Bahia 2 4 2 8

Distrito Federal 3 5 8

Espírito Santo 1 1 2

Fortaleza 2 8 10

Goiás 1 4 5

Maranhão 2 2 4

Mato Grosso 1 3 4

Mato Grosso do Sul 1 2 1 4

Minas Gerais 5 12 17

Pará 2 7 9

Paraná 1 2 3

Pernambuco 3 5 1 9

Rio de Janeiro 12 6 2 3 21


Rio Grande do Sul 5 6 1 12


São Paulo 12 13 11 1 37

Sergipe 1 2 3

Total 58 90 16 3 1 168




Alagoas 1 2 3

Amazonas 1 4 5

Bahia 2 2 2 6

Distrito Federal 3 5 8

Espirito Santo 2 3 5

Fortaleza 3 6 9

Goiás 2 2 4

Maranhão 2 4 6

Mato Grosso 1 1 2

Mato Grosso do Sul 1 4 5

Minas Gerais 5 10 15

Para 2 8 10

Paraná 2 4 6

Pernambuco 3 3 6

Rio de Janeiro 12 9 2 3 2 28


Rio Grande do Sul 4 11 15

Santa Catarina 1 1

São Paulo 17 24 41

Sergipe 1 2 3

Total 66 105 4 3 2 180




Alagoas 1 4 0 0 0 5

Amazonas 1 4 0 0 0 5

Bahia 3 2 0 0 0 5

Distrito Federal 2 4 0 1 0 7

Espirito Santo 2 2 0 0 0 4

Fortaleza 3 6 0 0 0 9

Goias 2 4 0 0 0 6

Maranhão 2 4 0 0 0 6

Mato Grosso 1 0 0 0 0 1

Mato Grosso do Sul 1 4 0 0 0 5

Minas Gerais 6 11 1 0 0 18

Para 3 9 0 0 0 12

Paraná 2 2 0 0 0 4

Pernambuco 4 7 0 0 0 11

Rio de Janeiro 15 7 3 4 0 29

Rio Grande do Norte 1 1 0 0 0 2

Rio Grande do Sul 5 12 0 0 0 17

Santa Catarina 1 0 0 0 0 1

São Paulo 14 32 1 2 0 49

Sergipe 1 2 0 0 0 3

Total Geral 70 117 5 7 0 199

c. employee turnover índex

The index of employee turnover (churn) in financial years ending in 2017, 2016 and 2015 was 1.2%,

6.6% and 6.7%.

14.2 Comments about any relevant change that occurred with regard to the figures in the item “14.1" above

In 2015, the decrease of the Company's workforce is mainly related to centralization of Real Estate and Heavy Construction maintenance operations, as well as the flattening of the organizational structure and the elimination of administrative and managerial positions for greater synergy between these two units business. In 2016 and 2017, a reduction on the employees chart is mainly due to the closing branches and implementation of the MAPA Project in Construction business unit.

14.3 Description of Company employee remuneration policies

a. Salary and variable remuneration policy

The Company believes one of its key competitive advantages is the quality of its skilled labor. The

Company has developed, over the years, a human resources development culture based on

achievement, employee participation and transparency. The Company also has profit sharing

programs and offer opportunities for professional development. The Company believes this culture

promotes the loyalty, engagement and enthusiasm of the employees, which leads to a historically low

rate of substitution of skilled labor (turnover) and increases our ability to provide quality services to our

customers.

The Company’s compensation policy includes the payment of salaries consistent with those in the

market. Additionally, the Company offers the Profit Sharing Program to all its employees.

b. Benefits Policy

As a standard policy, the Company offers its employees the following benefits and facilities, which may

change due to contracts executed with its clients:

health insurance with coverage for hospital stays: employees contribute part of the cost of this benefit (15% to 35%, according to their salary);

group life insurance fully funded by the Company; dental care fully funded by the employees opting in for this benefit; essential food baskets partially funded by the Company (50%) for employees who receive up to six

times the minimum wage, and that have not missed a workday or arrived late in the month. Each of

these employees receives one food basket per month. In 2017 the Company distributed 12,483 food

baskets to our employees, of which 1,040 were in December. meal allowance: 10% to 20% of the cost of the benefit is discounted from the employee's paycheck;

loans to employees under the "Desafogo" Project: the funds should be allocated to specific purposes and cannot exceed one nominal salary of the employee, limited to the amount of 6 minimum wages;

pharmacy benefit agreement; lending of a car to the executives, who must bear all maintenance costs of the vehicle (except for

insurance and IPVA property tax); and

stock option plan (only for our directors and executives).

c. Characteristics of compensation plans based on stock options of non-administrator employees

STOCK OPTION PLAN

On December 31, 2016, the Company had two stock option plans in a benefit for your eligible employees,

being: (i) (“Plan 2010”) approved in Extraordinary General Meeting on February 8, 2010, and changed in

Extraordinary General Meeting on April 20, 2012 and; (ii) (“2016 Plan”) approved in Extraordinary General

Meeting on April 28, 2016. Until December 31, 2016, has been exercised 857,966 options in 2010 Plan,

leaving 315,681 stock options plans already awarded, but not exercised yet. There was no stock option plan

in 2016 Plan, leaving 1,080,000 stock options plan already awarded, but not exercised yet.

All the stock options plans created before the Company’s public listing, occurred on April 15, 2010, had all

your granted options exercised.

In the items below, are described the Company’s Plans.

a. Terms and general conditions:

Under the 2010 Plan, the Board of Directors approved (i) on March 11, 2010, the Company's 1/2010 Stock

Option Plan ("Programa 1/2010"); (Ii) on March 25, 2011, the Company's Stock Option Plan 1/2011

("Program 1/2011"); (iii) on May 30, 2012, the Stock Option Plan 1/2012 of the Company ("Program 1/2012");

(iv) on March 25, 2013, the Company's 1/2013 Stock Option Plan ("Programa 1/2013"); and (v) on March

31, 2014, the Company's 1/2014 Stock Option Plan ("Programa 1/2014").

Under the 2016 Plan, the Board of Directors approved (i) on May 31, 2016, the 1/2016 Program for the

Granting of Stock Options of the Company ("Program 1/2016");

The Company's Plans are managed by the Company's Board of Directors, which, in order to elect its

beneficiaries, among others, will consider factors such as the contribution of each beneficiary to achieving

the creation of value targets, the development potential of each, their functions and other characteristics

considered strategically relevant.

Under the 2010 Plan, the Board of Directors elected as beneficiaries: (i) for Program 1/2010, all directors (or

executives with similar attributions) of the Company, and managers of the Company; (ii) for Program 1/2011,

all directors (or executives with similar duties) of the Company, and Company managers who exercised their

positions in 2010 for more than six months; (iii) for Program 1/2012, all directors (or executives with similar

duties) of the Company, and Company managers who exercised their positions in 2011 for more than six

months; (iv) for Program 1/2013, all directors (or executives with similar duties) of the Company, and

Company managers who exercised their positions in 2012 for more than six months; and (v) for Program

1/2014, all directors (or executives with similar attributions) of the Company, and managers of the Company

who exercised their positions in 2013 for more than six months. No options were granted in 2015.

Under the 2016 Plan, the Board of Directors elected the beneficiaries according to the following criteria:

contribution to the attainment of value creation goals, the development potential of each one, the essential

functions performed and any other characteristics considered strategically relevant;

b. Main objectives of the plans

The Company's Plans aim, among others, to allow managers and employees of the Company or companies

under its control to receive options whose exercise entitles them to subscribe or acquire shares of the

Company in the future, with a view to: (i) create an alignment of interests between the Company, its

shareholders, and managers and employees of the Company and of companies under its control; (ii) mitigate

agency conflicts; (iii) to increase the generation of sustainable results; and (iv) strengthen the long-term

orientation in decision-making by the Company's executives and employees.

c. How the plans contributes for these objectives

Since most of the options granted through the Company's Plans are available in the long term, the

beneficiaries tend to remain in the Company at least until this moment and are able to seek long term results.

d. How the plans are inserted in the remuneration policy of the issuer

As mentioned in item 13.1, the granting of options under the Company's Plans amounts to the fixed

remuneration of the Company's officers, as a way of generating incentives to successfully conduct the

Company's business, stimulating the entrepreneurial and results, aligning the interests of the beneficiaries

with those of the shareholders.

e. How the plans aligns the administrators and issuers interests in a short, medium and long term

The granting of stock options broadly aligns the Company's medium- and long-term interests to encourage

management to conduct the Company's business successfully, stimulating the entrepreneurial and results-

oriented culture, as both shareholders as directors benefit from improvements in results and increases in

stock market prices. The establishment of a grace period, before which the options can not be exercised

(vesting period), ensures that this alignment occurs in the short, medium and long term.

f. Maximum number of covered shares

The 2010 Plan provides that the stock options granted may grant rights to acquire up to 5% of the shares of

the Company's capital during the entire term of the 2010 Plan, computing in this calculation all the options

already granted in the scope of the Plan 2010, exercised or not, except those that have been extinguished

and not exercised, provided that the total number of shares issued or may be issued under the 2010 Plan is

always within the limit of the Company's authorized capital. In addition, Plan 2010 has the objective of

granting stock options in number that does not exceed 1% of the Company's capital stock verified each year

on the granting date of the call options.

Under Program 1/2010, 479,473 options were granted, which, when exercised, should be converted into

common shares issued by the Company. As of December 31, 2016, 468.845 options had been exercised

under this program.


common shares issued by the Company. As of December 31, 2016, 254,109 options had been exercised

under this program.



under this program.



under this program.


common shares issued by the Company. As of December 31, 2016, had not been exercised any options

under this program.

The 2016 Plan provides that the stock options granted may confer vesting rights on a number of shares not

exceeding 1,700,000 (one million, seven hundred thousand) shares issued by the Company, during the entire

term of the 2016 Plan, computing in this calculation all the options already granted under Plan 2016,

exercised or not, except those that have been extinguished and not exercised, provided that the total number

of shares issued or to be issued under the Plan 2016 is always within the limit of the authorized capital of the

Company.

g. Maximum number of shares to be granted

Each option granted under the Company's Plans confers on the respective Beneficiary the right to acquire

or subscribe one (1) common, nominative, book-entry share with no par value representing the Company's

capital stock. Accordingly, the maximum number of options to be granted through the Company's Plans

corresponds to the maximum number of shares covered by the Company's Plans, as described in the

previous item.

h. Conditions of shares acquisition

To receive the stock options in the 1/2010 Program, each beneficiary must use at least of 33% of the variable

portion of their compensation under the Company's Profit Sharing Program, net of taxes, which were received

related to the 2009 financial year, to acquire shares issued by the Company.


portion of their compensation under the Company's Profit Sharing Program, which were received related to

the 2010 financial year, to acquire shares issued by the Company.










Additionally, the Board of directors approved grants within the 1/2010, 1/2011, 1/2012, 1/2013 and 1/2014

Programs, independent of the investment in the Company’s shares to certain employees of the Company,

due to its performance in the exercise of their jobs.


contribution to the attainment of the goals of value creation, the development potential of each one, the

essential functions performed and any other characteristics considered strategically relevant information;

i. Criteria for fixation of the acquisition price or exercise

Under the 2010 Plan, until April 20, 2012, the price of the ordinary shares to be acquired by the beneficiaries, by exercising their option rights were determined by the Company’s Board of Directors or committee based exclusively on the average share price on the BM&FBOVESPA, weighted by the trading volume in the month or the two months prior to the granting of the stock option, monetarily adjusted by the inflation index IPCA (“Índice de Preços ao Consumidor Amplo”), and deducting the value of dividends and interest on equity per share paid by the Company as from the stock option date. On April 20, 2012, according to the resolution of the General Meeting held on that date, the criterion for fixing the exercise price of the options that have as a counterpart the acquisition of shares by its beneficiary was changed and was defined as the equity value of the 171 shares on the last day of the subsequent fiscal year. This change does not affect the options granted prior to that General Meeting and the new criterion does not apply to options granted that have no counterpart of the acquisition of shares by the beneficiary, which continues to be applied the criterion of market price, described above.

For the 1/2010 Program, the exercise price of the options will be based on the value of the shares issued at the Company’s Initial Public Offering (R$11.50), monetarily adjusted by the inflation according to the IPCA, deducting the value of dividends and interest on equity per share paid by the Company as from the stock option date.

For the 1/2011 Program, the exercise price of the options will be (i) the average share price acquired


Committee of the Company (R$ 19.28), (ii) monetarily adjusted by the inflation according to the IPCA,

disclosed by the Brazilian Institute of Geography and Statistics (IBGE), or by another index determined by

the Board of Directors or committee, according to the case, from the date of conclusion of the stock option

agreement until the date the option is exercised, (iii) deducting the value of dividends and interest on equity

per share paid by the Company as from the stock option date.

For the 1/2012 Program, regarding the Basic Grant, the exercise price of the options will be the amount of the shares’ net worth in December 31 of the fiscal year immediately after the stock option date of the Company (R$5.86), monetarily adjusted by the inflation according to the IPCA, or by another index determined by the Board of Directors or committee, according to the case, from the date of conclusion of the stock option agreement until the date the option is exercised, deducting the value of dividends and interest on equity per share paid by the Company as from the stock option date.

For the 1/2012 Program, regarding the Discretionary Grant, the exercise price of the options will be

the average, weighed by the trading volume, of the ordinary shares of the Company in BM&FBOVESPA, during

the fiscal year of 2011 (R$19.22), monetarily adjusted by the inflation according to the IPCA, or by another




For the 1/2013 Program, regarding the Basic Grant, the exercise price of the options will be the amount

of the shares’ net worth in December 31 of the fiscal year immediately after the stock option date of the

Company (R$6.80), monetarily adjusted by the inflation according to the IPCA, or by another index determined

by the Board of Directors or committee, according to the case, from the date of conclusion of the stock option

agreement until the date the option is exercised, deducting the value of dividends and interest on equity per

share paid by the Company as from the stock option date.

For the 1/2013 Program, regarding the Discretionary Grant, the exercise price of the options will be the

average, weighed by the trading volume, of the ordinary shares of the Company in BM&FBOVESPA, during

the fiscal year of 2011 (R$26.16), monetarily adjusted by the inflation according to the IPCA, or by another




For the 1/2014 Program, regarding the Basic Grant, the exercise price of the options will be the amount of the shares’ net worth in December 31 of the fiscal year immediately after the stock option date of the Company (R$7.98), monetarily adjusted by the inflation according to the IPCA, or by another index determined by the Board of Directors or committee, according to the case, from the date of conclusion of the stock option agreement until the date the option is exercised, 172 deducting the value of dividends and interest on equity per share paid by the Company as from the stock option date.

For the 1/2014 Program, regarding the Discretionary Grant, the exercise price of the options will be the average, weighed by the trading volume, of the ordinary shares of the Company in BM&FBOVESPA, during the fiscal year of 2013 (R$30.94), monetarily adjusted by the inflation according to the IPCA, or by another index determined by the Board of Directors or committee, according to the case, from the date of conclusion of the stock option agreement until the date the option is exercised, deducting the value of dividends and interest on equity per share paid by the Company as from the stock option date.

Under Plan 2016, the exercise price of the options granted will be equal to R$2.63 (two reais and sixty-

three cents), defined based on the issue price of the Company's shares, within the scope of the capital increase

approved by the Board of Directors on February 5, 2016. This exercise price will be monetarily restated in

accordance with the IPCA, or such other index as may be determined by the Board of Directors or by a

committee created by the Board of Directors, as the case may be, and deducted from the amount of dividends

and interest on shareholders' equity per share declared by the Company as of the grant date. The Company's

Investor Relations Area will calculate the updated exercise price of the options.

j. Criteria for fixation of the exercise term

The options granted under the 2010 Plan will be subject to vesting periods of up to 72 (seventy-two) months

for the conversion of options into shares.

Under the 2016 Plan, the Purchase Options will be in force for a period of 8 (eight) full years, as of the date of

conclusion of the Grant Agreement ("Maximum Exercise Period"). The options granted under the terms of Plan

2016 may be exercised in full or in part, provided that the respective vesting periods, not less than 12 (twelve)

months, determined by the Board of Directors, and the other terms and conditions set forth in the respective

contracts of granting.

k. Form of liquidation

The options granted under the Company's Plans grant the respective holders the right to subscribe and/or

acquire shares representing the capital of the Company, against payment of the respective issue or acquisition

price, as the case may be, in an amount corresponding to the price of exercise of each option. For the purpose

of satisfying the exercise of stock options granted under the Company's Plans, the Company may, at the

discretion of the Board of Directors: (i) issue new shares within the authorized capital limit; and/or (ii) dispose

of and / or use shares held in treasury.

The shares resulting from the exercise of call options will be paid up and/or acquired by their respective

beneficiaries in cash, in national currency.

l. Restrictions to transference of shares

The Plans of the Company provide that, as long as the exercise price is not paid in full, shares acquired with

the exercise of the option under the Company's Plans may not be sold to third parties, unless prior authorization

is granted by the Board of Directors, The proceeds from the sale will be destined primarily for discharge of the

debit of the beneficiary to the Company.

Under the respective option agreement entered into under the 2010 Plan, each beneficiary will be barred from

trading its shares for a period of five years, subject to the following rules:

(i) After one year as of the execution of the respective Option Agreement, beneficiaries are free to trade up to 25% of their acquired shares;

(ii) After one year as of the term defined in item “i”, beneficiaries are free to trade another 25% of their acquired shares;

(iii) After one year as of the term defined in item “ii”, the beneficiary is free to trade another 25% of the acquired shares; and

(iv) After one year as of the term defined in item “iii”, each beneficiary is free to trade the remainder of

their acquired shares;

Under the terms of the respective option agreement entered into under the 2016 Plan, the Purchase Options may be exercised in accordance with the following schedule:

(a) as of May 1, 2019 ("First Grace Period"), the Beneficiary may exercise Purchase Options corresponding to up to 25% (twenty five percent) of the shares that may be acquired through the exercise of options he granted;

(b) as of May 1, 2020 ("Second Grace Period"), the Beneficiary may exercise Purchase Options corresponding to up to 25% (twenty-five percent) of the shares that may be acquired through the exercise of options Granted in addition to the options that became exercisable after the First Grace Period and which have not yet been exercised;

(c) as from May 1, 2021 ("Third Grace Period"), the Beneficiary may exercise Purchase Options corresponding to up to 25% (twenty five percent) of the shares that may be acquired through the exercise of options Granted in addition to the options that became exercisable after the First Grace Period and the

Second Grace Period and which have not yet been exercised; and

(d) as from May 1, 2022 (the "Fourth Grace Period"), the Beneficiary may exercise Purchase Options corresponding to up to 25% (twenty five percent) of the shares that may be acquired through the exercise of options Granted in addition to the options that became exercisable after the First Grace Period, the Second Grace Period and the Third Grace Period and which have not yet been exercised; and

(e) any Purchase Options, if any, not exercised within the Maximum Exercise Period (as defined in Clause 4.1 below) will be considered automatically extinguished, regardless of any notification and without indemnification.

m. Criteria and events that, when verified, will cause the suspension, alteration or extinction of

the plans

The options granted pursuant to the 2010 Plan will automatically terminate, ceasing all of their effects in full in

the following cases: (i) through its full exercise; (ii) after the expiration of the term of the option; (iii) by virtue of

the concession of the option grant agreement; (iv) if the Company is dissolved, liquidated or has its bankruptcy

decreed; (v) if the beneficiary does not observe the rules of restriction on trading described in item "l" above;

or (vi) in the assumptions of item "n" below.

The options granted pursuant to Plan 2016 will automatically terminate, ceasing all of their effects by right, in

the following cases: (i) by their full exercise; (ii) after the expiration of the term of the option; (iii) by virtue of

the concession of the option grant agreement; (iv) if the Company is dissolved, liquidated or has its bankruptcy

decreed; (v) in the assumptions of item "n" below; or (vi) in the other hypotheses provided for in an option grant

agreement.

n. Effects of the departure of the administrator of the issuer's bodies from their rights under the stock-

based compensation plans

If, at any time during the term of the 2010 Plan, the beneficiary leaves the Company voluntarily, resigning from

his or her employment, or resigning from his position as administrator: (i) rights not yet exercisable in

accordance with the respective Option, on the date of their termination, shall be automatically extinguished, in

full, regardless of prior notice or notification, and without the right to any indemnification; and (ii) rights already

exercisable in accordance with the respective option contract, on the date of their termination, may be

exercised, within a period of 30 days counted from the date of termination, after which such rights will

automatically be extinguished, in full, regardless of prior notice or notification, and without the right to any

indemnification.

If, at any time during the term of the 2016 Plan, the beneficiary leaves the Company voluntarily, resigning from

his or her employment, or resigning from his/her position as administrator: (i) shall automatically be

extinguished, (a) rights not yet exercisable, as well as (b) 50% (fifty percent) of the rights already exercisable,

in both cases, in accordance with the respective option, on the date of its termination; and (ii) the balance of

fifty percent (50%) of the rights already exercisable in accordance with the respective Option Agreement, on

the date of termination, may be exercised within thirty (30) days counted from the date of termination, being

certain that after such term these rights will be automatically extinguished, by right, regardless of prior notice

or notification, and without the right to any indemnity;

In the other cases of termination, if, at any time during the term of the Company's Plans, the beneficiary:

(i) the Company is removed from the Company, by reason of its will, for cause, or dismissal of its position for

violating the duties and duties of the administrator, all rights already exercisable or not yet exercisable under

the respective option contract, their termination, shall be automatically extinguished, in full, regardless of prior

notice or notification, and without the right to any indemnity;

(ii) is removed from the Company at will, without just cause, or dismissal from its position without breach of

duties and duties of administrator: (a) rights not yet exercisable under the respective option contract, on the

date of its termination, will automatically be extinguished, in full, regardless of prior notice or indemnification,

unless the Board of Directors decides to delay the grace period for part or all of such rights, and if the dismissal

occurs within a period of up to 12 (twelve) months after a change in the Company's shareholding control, all

rights not yet exercisable under the respective option contract, on the date of their termination, will have their

early grace period; and (b) rights already exercisable under the respective option agreement, on the date of

their termination, may be exercised within a period of 30 (thirty) days counting from the date of termination,

after which such rights will automatically be terminated, regardless of prior notice or notification, and without

the right to any indemnity;

(iii) withdraw from the Company through retirement: (a) rights not yet exercisable in accordance with the

respective option agreement, on the date of their termination, shall be automatically extinguished, in full,

regardless of prior notice or notification, and without the right to any indemnity, unless the Board of Directors

deliberates for the anticipation of the grace period for part or all of such rights; and (b) rights already exercisable

under the option contract on the date of their termination will have their early grace period, and the beneficiary

may exercise the respective stock option, provided that it does so within a period of 12 months, counting from

the date of retirement, after which said rights will automatically be extinguished, in full, regardless of prior

notice or notification, and without the right to any indemnity;

(iv) withdraw from the Company due to death or permanent disability: (a) rights not yet exercisable in

accordance with the respective option contract, on the date of their termination, shall be automatically

extinguished, in full, regardless of prior notice or indemnity, unless the Board of Directors decides to advance

the grace period for part or all of such rights; and (b) rights already exercisable under the respective option

contract, on the date of death, may be exercised by the beneficiary's heirs and legal successors, provided that

they do so within a period of 12 months from the date of death, after which said rights will automatically be

extinguished, in full, regardless of prior notice or notification, and without the right to any indemnity.

Notwithstanding the foregoing, the Board of Directors or the committee created by the Board of Directors (as

the case may be) may, at its sole discretion, whenever it deems that the corporate interests are best served

by such a measure, fail to observe the stipulated rules above, granting differential treatment to a particular

beneficiary.

14.4 Description of the relationships between the Company and trade unions

At December 31, 2017, approximately 0.5% of the Company´s employees were represented by a trade

union, especially the Civil Construction Trade Union and the Commerce Union. The Company has agreements

with each trade union, and renegotiates them every year. The Company maintains a good relationship with

the main trade unions its employees are represented by.

14.5 Provide other information that the Company deems relevant In April 2018, the Company began the process of closing four warehouses of the Construction business unit, but maintaining its commercial presence at a national level and focusing on complex and long-term works. As a result, there will be a reduction in the Company's staff, mainly in the Construction unit.

15.1 / 15.2 – Shareholder position

SNOW PETREL S.L.

14.740.333/0001-61 Spanish Yes Yes 04/19/2016

No

23,676,659 13.480000% 0 0.000000% 23,676,659 13.480000%


127.276.837-66 Brazilian Yes Yes 12/19/2017

No

5.356.093 3.050000% 0 0.000000% 5.356.093 3.050000%


124.175.657-06 Brazilian-RJ Yes Yes 04/19/2016

No

1,337 0.001000% 0 0.000000% 1,337 0.001000%

Brandes Investment Partners

No No 11/09/2017

No

17,609,172 10.030000% 0 0.000000% 17,609,172 10.030000%

FAMA Investimentos Ltda

00.156.956/0001-87 Brazilian No No 11/09/2017

No

8.788.543 5.010000% 0 0.000000% 8.788.543 5.010000%

Fundo de Investimento em Participações Axxon Brazil Private Equity Fund II

13.958.904/0001-76 Brazilian Yes No 07/20/2016

No

Shareholder

CPF/CNPJ shareholder Nacionality-UF Participate of the shareholders’ agreement

Controlling shareholder Last change

Shareholder resident foreign Name of the legal representative or mandatory Person type CPF/CNPJ

Number of common shares (Units) Common shares % Number of preferred shares (Units) Preferred shares % Amount of shares (units) Total shares %

Breakdown by shares classes (Units)

Class share Quantity of shares (units) Shares %

12,294,063 7.000000% 0 0.000000% 12,294,063 7.000000%

Shareholder

CPF/CNPJ shareholder CPF/CNPJ shareholder CPF/CNPJ shareholder CPF/CNPJ shareholder CPF/CNPJ shareholder




Class share Quantity of shares (units) Shares %


289.858.347-20 Danish Yes Yes 04/19/2016 No

7,151,672 4.070000% 0 0.000000% 7,151,672 4.070000%


098.921.337-49 Argentinian Yes Yes 04/19/2016 No

13,816,768 7.870000% 0 0.000000% 13,816,768 7.870000%

Tomas Richard Nacht

042.695.577-37 Brazilian Sim Sim 12/19/2017 No

5.267.593 3.000000% 0 0,000000% 5.267.593 3.000000%


073.165.257-62 Brazilian Yes Yes 12/19/2017 No

5.297.563 3.000000% 0 0.000000% 5.297.563 3.000000%

Shareholder






Class share Quantity of shares (units) Shares % OTHERS

74,078,526 42.189000% 0 0.000000% 74,078,526 42.189000%

Controlling/Investor

Shareholder






Controlling/Investor CPF/CNPJ shareholder Social Capital Composition

SNOW PETREL S.L. 14.740.333/0001-61

Malachite Limited

No

Malta Yes Yes 02/28/2014

1 100.000000 0 0.000000 1 100.000000

Class share Amount of shares (units) Shares %

OTHERS

0 0,000000 0 0,000000 0 0,000000

TOTAL

1 100.000000 0 0,000000 1 100,000000

TREASURY SHARES – Date of the last change

2,278,422 1.300000% 0 0.000000% 2,278,422 1.300000%

TOTAL

175,586,442 100.000000%

0 0.000000% 175,586,442 100.000000%

TOTAL 0.000000

CONTROLLING/INVESTOR

SHAREHOLDER

CPF/CNPJ shareholder Nationality-UF Participate of the shareholders’ agreement





Controlling/Investor CPF/CNPJ shareholder Social Capital Composition

Malachite Limited

Emma Keila Nacht

Yes Yes

No

5,000 100.000000 0 0.000000 5,000 100.000000

Class share Amount of shares (units) Shares %

OTHERS

0 0,000000 0 0,000000 0 0,000000

TOTAL

5,000 100.000000 0 0.000000 5,000 100.000000

TOTAL 0.000000

15.3 – Capital Distribution

Date of the last meeting / Date of the last change

04/26/2018

Amount of private individual’s shareholders (Units)

3.409

Amount of legal entities shareholders (Units)

65

Amount of institutional investor shareholders (units)

143

Shares in Circulation Shares in circulation corresponding to all shares of the issuer with the exception of the controlling ownership, people linked to it, the issuer's management and treasury shares.

Ordinary Amount (Units) 111,965,011 63.7700000%

Preferred amount (Units) 0 0.000000%

Total 111,965,011 63.7700000%

15.4 - Organization chart of shareholders

MILLS ESTRUTURAS E SERVIÇOS DE ENGENHARIA S.A.

Controlling Shareholders

34.5%

FAMA

5.01%

Others

43.55%

Axxon

7.0%

Brandes

9.94%

15.5 - Shareholders Agreement

15.5 Shareholders Agreement

I. 2014 Agreement

On February 28, 2014, a Shareholders’ Agreement was signed concerning the Company, without changing its control group, to regulate the relationship between the Company’s controlling shareholders, as indicated in item 8.1(a) of this Reference Form ("2014 Agreement"). The 2014 Agreement provides for, among other provisions and as detailed below, clauses related to (i) exercise of voting rights and control; (ii) appointment of directors; and (iii) transfer of shares and preferential rights for acquiring them. The 2014 Agreement was amended on May 5, 2014 due to Francisca Kjellerup Nacht’s adhesion to said instrument. The main characteristics of the 2014 Agreement are described below.

a. Parties

Andres Cristian Nacht, Jytte Kjellerup Nacht, Tomas Richard Nacht, Antonia Kjellerup Nacht, Pedro Kaj Kjellerup Nacht e Francisca Kjellerup Nacht (em conjunto, "Família Nacht");

Snow Petrel S.L. (collectively with the Nacht Family, "Parties"); e

Mills Estruturas e Serviços de Engenharia S.A. ("Company")

b. Execution Date: 2.28.2014

c. Term: 3 years, being automatically renewed for successive periods of 3 years in the absence of any statement to the contrary, in writing and at least 6 months in advance, of any of the shareholders.

d. Description of the clauses related to exercise of voting rights and control

The vote of the parties in general meetings will be made by shareholder Andres Cristian Nacht, except in case any other signatory of the 2014 Agreement requests the adoption of the preliminary meeting procedure, in which case the decision will be made by majority vote within the control block, subject to veto rights in specific matters:

mergers, spin-offs, acquisitions, and any other corporate reorganization transaction involving the Company;

reduction of the Company’s mandatory dividends, in order to make it less than 25% of the net profit calculated in accordance with Act 6.404/76;

increase or decrease of the Company’s capital stock, except for capital increases under the Board of Directors’ authority;

cancelation of registration as a publicly held company and discontinuation of Novo Mercado’s differentiated practices of corporate governance;

application for bankruptcy or court-supervised or out-of-court reorganization of the Company;

approval of valuation reports submitted for the approval of the Company’s general meeting;

amendment of the Company’s corporate purpose;

amendment of the minimum or maximum number of members of the Board of Directors, as provided for in the Company’s Bylaws, or amendment of the matters under the Board of Directors’ authority;

amendment of the provisions in the Company’s Bylaws relating to the distribution of income, establishment of reserves and retention of earnings;

amendments to Chapter VII of the Company’s Bylaws; and

liquidation and dissolution of the Company, cessation of its condition of liquidation, and approval of the accounts of liquidators.

The 2014 Agreement does not bind the vote of members of the Board of Directors or other Company bodies.

e. Description of clauses related to appointment of directors or members of committees

established in the Company’s Bylaws

In the absence of a motion for holding a preliminary meeting, Andres Cristian Nacht shall appoint all members of the Company’s Board of Directors that the control block has the right to elect.


Should a preliminary meeting be requested in order to appoint the members of the Company’s Board of Directors:

of the total number of members of the Board of Directors that the Parties, together, have the right to elect at the Company’s general meeting, each Party may elect a number of members proportional to their interest in the Company’s capital stock (disregarding shares held by shareholders who are not parties to the 2014 Agreement);

in the event a fractional number is found when determining the number of directors to be appointed by each Party pursuant to the item above, fractions equal to or higher than 0.5 will be rounded up to 1.0;

regardless of the rounding provided for in the item above, the member of the control block with the highest interest will have the right to appoint the majority of the members of the Board of Directors that the control block are allowed elect.

Whenever the Parties, or the members of the Board of Directors appointed by them, are allowed to appoint

the Chairperson of the Company’s Board of Directors, such appointment will be carried out by Andres Cristian Nacht.

The rules described above apply, mutatis mutandis, to the appointment of members of the Audit Committee.

The 2014 Agreement does not contain provisions relating to the appointment of members of the executive board.

f. Description of the clauses related to transfer of shares and preferential rights for acquiring

them

The 2014 Agreement establishes, as a general rule, that the Parties’ shares may not be disposed of (lock-up) during its term. As an exception to the general rule of lock-up, each party may release from the 2014 Agreement, during its term, up to 10% of their shares for purposes of disposition ("Released Shares"). In case of disposition of Released Shares, non-selling shareholder shall have right of first offer, which will allow them to acquire the Released Shares at the price offered by the selling shareholder. 177 If non-selling shareholders do not acquire the Released Shares through the exercise of the preferential rights, the selling shareholder may sell them on the stock market at a price not lower than that offered to the non-selling shareholders.

g. Description of the clauses that restrict or bind the voting rights of members of the Board of Directors

There are no provisions relating to the restriction or binding of the vote of directors.

II. 2016 Agreement

On April 7, 2016, a new shareholder’s agreement was signed concerning the Company, to regulate the relationship between the Company’s controlling shareholders and the shareholder Fundo de Investimento em Participações Axxon Brazil Private Equity Fund II ("2016 Agreement"). The 2016 Agreement provides for, among other provisions and as detailed below, clauses relating to (i) exercise of voting rights and control; (ii) appointment of directors and committee members; (iii) transfer of shares and preferential rights for acquiring them; and (iv) restriction or binding of voting rights of members of the Board of Directors. The main characteristics of the 2016 Agreement are described below.

a. Parties

Andres Cristian Nacht, Jytte Kjellerup Nacht, Tomas Richard Nacht, Antonia Kjellerup Nacht, Pedro Kaj Kjellerup Nacht, Snow Petrel S.L. e Francisca Kjellerup Nacht (collectively, "Controlling Shareholders");

Fundo de Investimento em Participações Axxon Brazil Private Equity Fund II ("Axxon" and, collectively with the Controlling Shareholders, "Shareholders" or "Parties"); and

Mills Estruturas e Serviços de Engenharia S.A. ("Company")

b. Execution Date: 4.7.2016


c. Term: From the execution date of the 2016 Agreement until the Date of Acquisition of Political Rights (defined in item "d" below) and, after this period, for 8 years. Note that the 2016 Agreement shall automatically terminate if Axxon does not become the holder of shares representing at least 7% of the Company’s capital stock by the 5th August, 2016 (120 days from the execution of the 2016 Agreement).

d. Description of the clauses related to exercise of voting rights and control

Acquisition of Political Rights

If Axxon, within 120 days from the execution date of the 2016 Agreement, becomes the holder of shares representing at least 7% of the Company’s capital stock, Axxon will acquire rights relating to (i) Qualified Matters Under the Meeting’s Authority and Qualified Matters Under the Board’s Authority (defined below), and (ii) appointment of members of the Board of Directors and advisory committees to the Board of Directors (as detailed in item "e" below) ("Date of Acquisition of Political Rights").

In the event that Axxon, within 120 days of signing the 2016 Agreement, becomes the holder of shares representing at least 7% of the Company's capital stock, Axxon will acquire the rights related to (i) the Qualified Materials of (as defined below), and (ii) the appointment of members of the Board of Directors and of the advisory committees to the Board of Directors (as detailed in item "e" below) ("Date of Acquisition of Rights Politicians"). Axxon will automatically and definitively lose the political rights set forth in Clauses 4.4, 4.5, 11.3.2 and 11.5 of this Agreement if, after the expiration of the 180 (one hundred and eighty) day period as of the Political Rights Acquisition Date ) Axxon's participation in the Company's capital stock is not increased to at least 13% (thirteen percent) of the Company's capital stock; And (b) the share of Axxon proportionally held in the block of Shares formed by this Agreement (ie Shares jointly held by Axxon and Controlling Shareholders) is less than 26% (twenty six percent) of said block "A" and "b" referred to collectively, "Relevant Participation"), in accordance with Clause 3.2.4 below, in the case of dilution. On January 16, 2017 Axxon did not become the holder of shares representing 13% (thirteen percent) of the Company's capital stock, thus not meeting the conditions set forth in Clause 3.2.2 of the shareholders' agreement executed on December 7, April 2016 between Axxon and the Company's controlling shareholders within the period set forth in the aforementioned clause, which expired on that date. Consequently, Axxon ceased to definitively enjoy the political rights set forth in Clauses 4.4, 4.5, 11.3.2 and 11.5 of the Shareholders' Agreement.

Preliminary Meeting

The Shareholders or members of the Board of Directors appointed by the Shareholders shall vote together in general meetings and in meetings of the Board of Directors. For this purpose, the Shareholders shall meet prior to: (i) each general meeting of the Company; (ii) each meeting of the Board of Directors voting on Qualified Matters Under the Board’s Authority (defined below); (iii) any meeting of the Board of Directors, regardless of the matter to be voted, if requested by any of the Shareholders; and (iv) each general meeting, meeting of the Board of Directors,meeting of executive board, or meeting of shareholders of Company’s subsidiaries that have Qualified Matters Under the Meeting’s Authority or Qualified Matters Under the Board’s Authority (defined below) among the matters to be decided ("Preliminary Meeting").

The resolutions of the Preliminary Meetings shall be made by majority vote, except in cases of Qualified Matters Under the Board’s Authority and Qualified Matters Under the Board’s Authority (defined below), whose approval requires the favorable vote of the representative of Axxon and of the Controlling Shareholders. Even if Axxon holds, directly or indirectly, interest higher than 15% of the Company’s capital stock, Axxon’s votes in the Preliminary Meetings shall be limited to those to which it would be entitled with 15% of the capital stock.

The resolutions passed at Preliminary Meetings shall bind the Parties and the members of the Board of

Directors appointed by them, who shall follow the voting instructions received, pursuant to Article 118 of Act

6.404/76 ("Stock Corporations Act"), even if the Shareholders (or the shareholders who appointed them, in

the case of members of the Board of Directors) (i) dissented from the resolution passed at the Preliminary

Meeting; (ii) abstained in relation to the resolution passed; or (iii) did not attend the Preliminary Meeting.

Qualified Matters Under the Meeting’s Authority

The favorable vote of the Shareholders in the Company’s general meetings regarding the matters listed below shall require the prior approval of Controlling Shareholders and Axxon in a Preliminary Meeting ("Qualified Matters Under the Meeting’s Authority"):

amendments to the Company’s bylaws and/or bylaws or articles of incorporation of any subsidiary of the Company on the following matters: (i) corporate purpose; (ii) list of matters under the Board of Directors’ authority; and (iii) list of matters under the general meeting’s or shareholders meeting’s authority, to the extent that they affect the Qualified Matters Under the Meeting’s Authority or the Qualified Matters


Under the Board’s Authority (as defined below);

any corporate reorganization, including mergers, acquisitions, spin-offs, or transformation involving the Company or its subsidiaries, except for transactions made exclusively between the Company and its wholly owned subsidiaries (or companies that have 99% of their capital held by the Company);

reduction of the capital stock of the Company or of a subsidiary of the Company, except if carried out exclusively for the absorption of losses;

creation of new classes of shares or modification of the current rights and preferential rights of shares issued by the Company or a subsidiary of the Company;

issuance of any security that grants its holder the right to subscribe or acquire new shares or securities (i) convertible into shares with or without voting rights in the Company or a subsidiary of the Company; or (ii) exchangeable for shares of the Company or its subsidiaries, except for public offerings for the issuance of shares of the Company or a subsidiary of the Company and in the scope of any plans involving options to purchase shares issued by the Company or a subsidiary of the Company;

approval of plans involving options to purchase shares issued by the Company or a subsidiary of the Company;

amendments to the dividend policy of the Company or of a subsidiary of the Company;

conversion of the Company into a closely held corporation or its exit from the Novo Mercado segment of BM&FBOVESPA;

participation of the Company in groups of companies, in accordance with Article 265 of the Stock Corporations Act; and

application for bankruptcy, court-supervised or out-of-court reorganization of the Company or of a Subsidiary, as well as liquidation and dissolution, or cessation of its condition of liquidation.

Qualified Matters Under the Board’s Authority

The favorable vote of representatives appointed by the Shareholders in meetings of the Board of Directors regarding the matters listed below require the prior approval of Controlling Shareholders and Axxon in a Preliminary Meeting ("Qualified Matters Under the Board’s Authority"):

granting any type of encumbrance on any asset (including rights) of the Company or of of its subsidiaries as guarantee of any indebtedness, provided that (i) it is not provided for in the Company’s annual budgets; and (ii) in an amount exceeding 3 times the adjusted EBITDA of the Company for the current budgeted year, in any case, except for the creation of encumbrances to finance the acquisition of any asset, provided that the encumbrance is created solely over the asset acquired;

execution, by the Company or any of its subsidiaries, of contracts with (i) any party related to the Shareholders; (ii) members of the Board of Directors; or (iii) officers of the Company, except, with respect to the Company’s directors, through contracts exclusively related to stock-based compensation plans or employment contracts for directors under usual market conditions and consistent with the past practices of the Company;

contracting of any new indebtedness or changes in conditions, restructuring, agreements or advance payments of any indebtedness of the Company and/or its subsidiaries (i) not provided for in the annual budget; and (ii) in an amount exceeding 3 times the Company’s Adjusted EBITDA for the current budgeted year;eleição ou destituição do Diretor Administrativo Financeiro e de Relações com Investidores;

approval of the Company’s annual budget if (i) the disposition of lease equipment is provided for, outside the normal course of business, whose net value exceeds 10% of the Company’s fixed assets; or (ii) the sale of assets represents a net loss, in the aggregate, exceeding 10% of the Company’s Adjusted EBITDA of the immediately preceding year;

sale, exchange, or any other form of disposition to third parties of any relevant assets owned by the Company or its subsidiaries (i) if total sales or net loss have reached the ceiling approved in the annual budget; and (ii) whose total aggregate value (a) is equal to or greater than BRL 5,000,000.00; or (b) represents a net loss of BRL 1,000,000.00;

during the lock-up period (as described in item "f" below), any investment in any company (i) that conducts, at the time of investment, the same activity conducted by any investee of funds managed by The Axxon Group Private Equity Assessoria Ltda., or its controlling members, direct or indirect, or companies under common control; and (ii) (a) whose activities are not included in items (a) to (g) of Article 2 of the Company’s bylaws; or (b) that do not operate the business practiced by the Company; or

approval or modification of the Company’s annual budget, if, in the 12 months preceding the annual budget being prepared, a negative difference of more than 20% has been verified between the projected Adjusted EBITDA and the actual Adjusted EBITDA.


e. Description of clauses related to appointment of directors or members of committees

established in the Company’s Bylaws

The Controlling Shareholders and Axxon may appoint a number of members of the Board of Directors proportional to their percentage in the total number of shares bound by the 2016 Agreement, provided that: (i) while Axxon is the holder of shares representing at least 13% of the Company’s capital stock, Axxon shall have the right to appoint and elect at least one member of the Board of Directors; and (ii) to the extent that the Controlling Shareholders are holder of shares of the Company’s capital stock representing at least 50% of the shares plus one share (i.e. the majority of shares that make up the block bound by the 2016 Agreement), the Controlling Shareholders shall have the right to appoint and elect at least the same number of members of the Board of Directors that Axxon elects, plus one member.

The chairperson of the Board of Directors shall be appointed by the Controlling Shareholders.

The Controlling Shareholders and Axxon undertake to conduct a Preliminary Meeting to determine the names to be appointed at the Company’s general meeting to elect the members of the Board of Directors.

The Company’s executive board will be composed of qualified and experienced professionals, who have all the necessary qualifications for the positions held by them. The members of the executive board shall be appointed by the Board of Directors, by majority vote, and the CEO will be heard before the choice of the other officers.

While Axxon is the holder of shares representing at least 13% of the Company’s capital stock, Axxon will have the right to appoint and elect one representative for any existing committee or any committee that may be created to advise the Board of Directors.

f. Description of the clauses related to transfer of shares and preferential rights for acquiring them

The 2016 Agreement has clauses on the transfer of shares and preferential rights for acquiring them, such as lock-up, right of first offer, right of first refusal, tag along rights and drag along rights, as described below.

Lock-up

As a general rule, the shares of the Parties may not be sold (lock-up) during (i) the period between the execution date of the 2016 Agreement and the Date of Acquisition of Political Rights, and, after this period, (ii) for a period of 30 months.

If Axxon, after 6 months from the Date of Acquisition of Political Rights, has not become the holder of at least 13% of the Company’s capital stock, the percentage of shares subject to lock-up will be reduced to up to: (i) 10% of the Company’s capital stock between the 7th month and the 12th month from the Date of Acquisition of Political Rights; and (ii) 5% of the capital stock between the 13th month and the 24th month from the Date of Acquisition of Political Rights. After the 24th month from the Date of Acquisition of Political Rights, Axxon may sell its shares without complying with the lock-up.

After the end of the lock-up, Axxon will be entitled to sell at BM&FBOVESPA, every 12 months from the Date of Acquisition of Political Rights, 2% of the shares owned by Axxon, without the restrictions of right of first offer and right of first refusal, detailed below.

As an exception to the general rule of lock-up, the following are considered permissible:

the sale, at BM&FBOVESPA, of up to 10% of the shares of the Controlling Shareholders existing at the execution date of the 2016 Agreement;

the sale of Axxon shares exceeding 15% of the Company’s capital stock, without the need to observe the right of first offer and the right of first refusal, described below;

the sale of shares (i) between the Controlling Shareholders and their controlling members/shareholders and/or affiliates, or, in the case of individuals, their heirs and successors, provided that the acquirer executes the 2016 Agreement, through an instrument of adhesion, without any restrictions; or (ii) between the Shareholders without the need to observe the tag along rights, described below; and

the sale of shares between Axxon and other investment vehicles managed by The Axxon Group Private Equity Assessoria Ltda., its direct or indirect controlling members/shareholders or companies under common control, provided that the acquirer executes the 2016 Agreement, through an instrument of adhesion, without any restrictions.

Right of First Offer

If Axxon intends to dispose of all or part of its shares it must always grant the Controlling Shareholders the right of first offer for the acquisition of such shares, in accordance with the terms and procedures provided for in the 2016 Agreement.

Right of First Refusal

If Axxon intends to sell all or part of its shares to one or more third parties (i) that are competitors of the Company or an investment fund holding interest equal to or higher than 10% of the capital of and/or controls or has the right to appoint directors in a competitor of the Company ("Competitor"); or (ii) in the scope of a Public Offer for Acquisition of Shares, Axxon shall grant the Controlling Shareholders the right of first refusal for acquisition of all the shares to be sold by Axxon (i) at the same price and conditions offered by the Competitor, or (ii) in the case of a Public Offer for Acquisition of Shares, offering the shares at the same price offered in the Public Offer with a 5% discount, adjusted by the variation of the DI Rate, in accordance with the terms and procedures provided for in the 2016 Agreement.

Tag Along Rights

If the Controlling Shareholders receive an offer from one or more third parties for the sale of at least 41% of the shares held by them on the execution date of the 2016 Agreement in a transaction outside the stock exchange environment, Axxon will have the right to sell, to the third party, the same proportion of the shares held by Axxon, at the same price and under the same terms and conditions provided for in the offer made by the third party, in accordance with the terms and procedures provided for in the 2016 Agreement.

Drag Along Rights

If the Controlling Shareholders make or receive an offer from one or more third parties for the acquisition of at least 50% of their shares, the Controlling Shareholders shall have the right to demand that Axxon sell to the third party, together with the Controlling Shareholders, all shares held by Axxon, limited to the percentage of 15% of the Company’s capital stock, under the same pricing terms and conditions they were offered, provided that the transaction results in the receipt, by Axxon, of an amount of their updated investment equivalent to at least 2.5x the amount invested by Axxon until reaching an interest of 15% (or, if such interest has not been reached, the interest effectively reached), and limited, in any case, to 15% of the Company’s capital stock, for which the conditions, terms, and procedures provided for in the 2016 Agreement shall be observed.

g. Description of the clauses that restrict or bind the voting rights of members if the Board

of Directors

As described in item "d" above, the favorable vote of representatives appointed by the Shareholders in the decisions of the meetings of the Company’s Board of Directors regarding Qualified Matters Under the Board’s Authority require the prior approval of the Controlling Shareholders and Axxon in a Preliminary Meeting.

The resolutions passed in Preliminary Meetings shall bind the members of the Board of Directors appointed by the Parties, who shall follow the voting instruction received regarding the matter in question, pursuant to Article 118 of the Stock Corporations Act, even if the Shareholders who appointed them (i) dissented from the resolution passed at the Preliminary Meeting; (ii) abstained in relation to the resolution passed; or (iii) did not attend the Preliminary Meeting.

15.6 Relevant Changes in the Participation of Members of the Company's Control Group and Directors

Transfer of Ownership Interest and Change in Control Composition On December 19, 2017, the Company informed its shareholders and the market in general that it received,

on this date, information provided by Mr. Andres Cristian Nacht, a member of the Company's control group, that the said shareholder performed, within the scope of his family succession planning, the

donation of the total of 6,887,208 (six million, eight hundred and eighty-seven thousand, two hundred and eight) common shares issued by Mills, which is equivalent to approximately 3.9% of the Company’s

total share capital, to heirs Antonia Kjellerup Nacht, Tomas Richard Nacht and Pedro Kaj Kjellerup Nacht,

each with 2,295,736 (two million two hundred and ninety-five thousand seven hundred and thirty-six shares).

The donation was made with a reserve for life usufruct, so that the political and economic rights related

to the donated shares will continue to be exercised and enjoyed by Mr. Andres Cristian Nacht.

With the donation, Mr. Andres Cristian Nacht now owns 7.9% of the Company's capital and Antonia

Kjellerup Nacht, Tomas Richard Nacht and Pedro Kaj Kjellerup Nacht, respectively, own 3.0%, 3.0% and 3.1% of the Company's capital stock.

The transfer of ownership of the shares resulting from the donation now informed was strictly carried out

for succession planning purposes, and was not intended to change the ownership control or administrative

structure of the Company.

15.7 Describe the main corporate transactions in the group which have had a material effect to the issuer, such as takeovers, mergers, stock acquisitions, disposals and corporate takeovers, acquisitions and disposals of important assets, indicating when to involve the issuer or any of its subsidiaries and affiliates

Venda da unidade de negócio Serviços Industriais

On July 10, 2013, the Company entered into an agreement for the sale of assets and liabilities of its

Industrial Services business unit to FIP Leblon Equities Partners V, a fund managed by Leblon Equities Gestão de Recursos Ltda, through its subsidiary Albuquerque Participações Ltda. The sale price, defined

on May 31, 2013, the date of the negotiation, was R$ 102.0 million. During the 3-year period beginning on the closing date, the parties entered into a mutual non-compete agreement.

This sale was made in line with the Company's strategy of focusing on business where its competencies

are capable of generating greater value for its shareholders and customers. As a result, the Company ceased to operate in the Industrial Services sector, which offered access services, industrial painting,

surface treatment and thermal insulation, both in the construction phase and in the maintenance phase of large industrial plants.

The transaction was closed on November 30, 2013, had net income of R$ 8.3 million. Of the agreed sale value of R$ 102 million, (i) R$ 25 million was paid on the contract signing date, in July 2013; (ii) R$ 17

million was paid in April 2014, discounting R$ 6.8 million of this amount, due to certain adjustments agreed between the buyer and the Company; and (iii) the balance, in the amount of R$ 60 million, was

paid in annual installments adjusted by CDI, from July 2014 to July 2017. This divestment is in line with

Mills' strategy of focusing on businesses in which their skills are capable of generating greater value for their shareholders and customers.

Capital increases

The Company carried out capital increases within the limit of authorized capital through the issuance of

common, registered shares with no par value, due to the exercise by beneficiaries of purchase options granted pursuant to the Stock Option Program Options 01/2010 , 01/2011, 01/2012, 01/2013 and

01/2014. The dates of approvals, programs, number of shares, the share price and the amounts of these

exercises are detailed in item 17.

In compliance with the provisions of Instruction of the Securities and Exchange Commission No. 358, of January 3, 2002, as amended, that its Board of Directors approved, in a meeting held on February 5,

2016, the completion of an increase in Company's capital stock, within the authorized capital limit, with

the possibility of partial approval, through the issuance, for private subscription of at least 40,089,472 (forty million, eighty-nine thousand, four hundred and seventy-two) and a maximum of 47,528,517 (forty-

seven million, five hundred and twenty-eight thousand, five hundred and seventeen) new common shares, at an issue price of R $ 2.63 (two reais and sixty-three cents) per share, amounting to at least R

$ 105,435,311.36 (one hundred and five million, four hundred thirty-five thousand, three hundred and

eleven reais and thirty-six cents) and a maximum of R $ 124,999,999.71 (one hundred twenty-four million, nine hundred ninety-nine thousand, nine hundred and ninety-nine reais and seventy one cents)

( "Increase Capital"). The issue price was fixed without undue dilution for the existing shareholders of the Company, pursuant to Article 170, paragraph 1, item III, of Law No. 6404 of December 15, 1976, as

amended ( "the Companies Act by shares "), taking into account the average price (average of the weighted daily closing prices by trading volume) of the Company's shares on the BM & FBOVESPA SA -

Securities, Commodities and Futures Exchange in trading sessions between November 27, 2015 (

inclusive) and February 4, 2016 (inclusive). The price of such shares on the stock exchange is, in the opinion of the Board, the most appropriate criteria in the current reality of the Company. The raising of

funds through the capital increase aimed to (i) strengthen the Company's capital structure, strengthening its cash to meet the medium and long-term capital needs for the development of its activities; (Ii)

strengthen its liquidity levels, reducing the Company's debt margins; and (iii) take advantage of market

consolidation opportunities that may arise in the medium term. Because it was reached the maximum subscription of the Capital Increase, it was held on April 19, 2016, the Board of Directors meeting which

approved the ratification of the capital increase with the issuance of 47,528,517 ( forty-seven million, five hundred and twenty-eight thousand, five hundred and seventeen) new common shares, totaling R $

124,999,999.71 (one hundred twenty-four million, nine hundred ninety nine thousand, nine hundred ninety-nine reais and seventy one cents). Due to the approval of the Capital Increase, the Company's

share capital shall be R $ 688,318,462.91 (six hundred eighty-eight million, three hundred and eighteen

thousand four hundred and sixty-two reais and ninety-one cents), divided in 175,586,442 (one hundred seventy-five million, five hundred and eighty-six thousand, four hundred and forty two) common shares.

15.8 Other information that the Company assume relevant

There are no other relevant information.

16.1 - Describe the issuer's rules, policies and practices regarding the performance of transactions

with related parties, as defined by the accounting rules that deal with this matter, indicating, when

there is a formal policy adopted by the issuer, the body responsible for its approval, date of approval

and, if the issuer discloses the policy, locations on the worldwide computer network where the

document can be consulted

The Company's financial statements have been prepared and are being presented in accordance with the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB) and the accounting practices adopted in Brazil. The accounting practices adopted in Brazil include those included in Brazilian corporate law, the rules of the Brazilian Securities and Exchange Commission (CVM) and the pronouncements, interpretations and guidelines of the Accounting Pronouncements Committee (CPC). On May 21, 2015, the Board of Directors approved the Company's Code of Conduct, which should guide the attitudes and behavior of all employees. Under the Code, transactions with related parties should be avoided and, if performed, should be unequivocally beneficial to the Company, that is, they should seek conditions that are equal to or better than those of the market, adjusted by the risk factors involved. Pursuant to the Company's Bylaws, the Board of Directors must approve any operation of the Company with any of its shareholders. The operations and transactions with parties related to the Company are always carried out observing the usual market prices and conditions and, therefore, do not generate any benefit or prejudice to the Company or any other parties.

As of December 31, 2017, the Company did not have consulting services contracts with members of the Board of Directors. There were no loans between the Company and its management during the fiscal year of 2017, 2016 and 2015.

16.2 - Information about transactions with related parties

Justification for failure to complete the table:

There were no transactions with related parties during the 2015, 2016 and 2017 fiscal years.

16.3 In relation to each of the transactions or set of transactions mentioned in item 16.2 above occurred in the last fiscal year: (a) identify the measures taken to address conflicts of interest; and (b) demonstrate the strictly commutative nature of the conditions agreed upon or the appropriate compensatory payment

The Company adopts corporate governance practices and those recommended and / or required by applicable regulation, including those set forth in the Novo Mercado Regulation. The Board of Directors is responsible for approving policies and adopting the necessary measures so that directors and shareholders can not be involved in situations of conflict of interest. Additionally, pursuant to the Company's Bylaws, the Board of Directors must approve any operation of the Company with any of its shareholders.

Pursuant to Article 41 of the Company's Bylaws, the Company, its Shareholders, Administrators and members of the Fiscal Council are obligated to resolve, through arbitration, before the Market Arbitration Chamber, any and all disputes or controversies may arise among them, related to or arising from the application, validity, effectiveness, interpretation, violation and its effects, of the provisions contained in Law 6404/76, the Company's Bylaws, the rules issued by the National Monetary Council, the Bank Central Bank of Brazil and the Securities and Exchange Commission, as well as in the other rules applicable to the operation of the capital market in general, in addition to those contained in the Novo Mercado Regulation, the Arbitration Rules, the Sanctions Regulation and the Novo Mercado Participation Agreement Marketplace.

In addition, the Company has a section in its Code of Conduct that deals exclusively with conflicts of interest. All employees of the Company have a copy of this code and the hiring of new employees is conditioned to the signature of the "Term of Commitment" in which the new employee expressly undertakes to comply with all the provisions contained therein.

As described in the Company's Code of Conduct, Mills suggests that employees avoid all situations in which their personal or financial interests may conflict with the interests of the company or interfere with the effective performance of their duties. Mills employees may not be a partner or owner or have a spouse, children as business owners who provide materials and services to Mills, and may not favor relatives or friends in any form, including in the recruitment and hiring process.

The employee who has a degree of kinship with persons related to companies that are suppliers or potential suppliers of Mills, including 2º kinship. Grade, brother-in-law and father-in-law, you should report the fact formally to your immediate leadership, so that there is transparency and exemption in the acquisition. In this case, it is the responsibility of the Board to authorize the participation of the competition and obligatorily the employee of Mills who has a degree of kinship should automatically stay out of the decision making process.

Mills employees are allowed to have extra activities to occupy in Mills provided that:

Do not conflict with schedules and do not interfere with your performance in Mills activities;

Do not use any kind of resources from Mills to meet your personal interests, even if emergency;

Do not use your position in Mills to gain access to market data, confidential or privileged information, to favor your personal business or gain in the financial market.

16.4 - Other relevant information

No other relevant information.

17.1 – Information about share capital

Date of approval Capital (Reais)

Payment term

Quantity of common shares (Units)

Quantity of preferred shares (Units)

Total quantity of shares (Units)

Type of Capital Subscribed Capital

4/19/2016 688,318,462.91 175,586,442 0 175,586,442

Type of Capital Paid-up Capital

4/19/2016 688,318,462.91 175,586,442 0 175,586,442

Type of Capital Authorized Capital

2/5/2016 688,318,462.91 175,586,442 0 175,586,442

17.2 – Increase of share capital

Decision Date

Body that decided the increase

Date of issue

Total Value of the issue

(Reais)

Type of

increase

Common (Units)

Preferred

(Units)

Total shares (units)

Subscription / previous capital

Price Issue

Factor Price

02/05/2016 Board of

Directors

04/19/2016 124,999,999.71 Private

Subscription

47,528,571 0 47,528,571 37.10000000 2.63 R$ per unit

Criteria for determining the issue price

The Company considered the weighted average of the daily closing prices by the trading volume in the trading sessions between November 27, 2015 (inclusive) and February 4, 2016 (inclusive).

Manner of Payment Cash

17.3 - Stock splits, reverse splits and bonuses.

Justification for the non-fulfillment of the board:

Not applicable, as there wasn’t any operations of this nature in the Company in the last three fiscal years.

17.4 - Regarding reductions in the Company’s share capital

Justification for the non-fulfillment of the board:

Not applicable, as there wasn’t any reductions in the Company’s capital in the last three fiscal years.

17.5 Other information that the Company considers relevant

At the Extraordinary General Meeting held on April, 27, 2017 was approved the alteration amendment

of the caput of Article 5 of the Company’s Bylaws, to adjust it to the deliberations of the Board of Directors taken on April, 19, 2016, which approved the approval of the capital increase of the Company,

by private subscription of new shares, approved at the Meeting of the Company's Board of Directors held on February 5, 2016, within the limit of the authorized capital. The aforementioned increase will

come into effect with the following wording:

"5th Article - O The capital, fully subscribed and paid, is R$ R$688,318,462.91 (six hundred and eighty-eight million, three hundred and eighteen thousand, four hundred and sixty-two reais and ninety-one centavos), represented by 175.586.442 (one hundred seventy-five million, Five hundred eighty-six thousand, four hundred, forty-two) common, nominative, inscribed and without par value shares.”

[PENDENTE TEXTO AGE ]

18.1 - Description of the rights of each class and type of share issued

Type of shares Common

Tag along 100.000000

Dividend rights At each Ordinary Shareholder Meeting, the Board of Directors should make a recommendation on the allocation of net income for the preceding fiscal year, which will be subject to approval by the shareholders. The Company's Bylaws provides that an amount equivalent to 25% of the adjusted net income for the year should be available for the payment of dividends or interest on equity in any fiscal year. This amount represents the compulsory dividends. If the mandatory dividend exceeds the realized portion of net income, the excess may be allocated to an unrealized profit reserve. The calculation of net income and allocations to reserves and the amounts available for distribution are made based on financial statements prepared pursuant to the Brazilian Corporate Law.

Voting rights Full

Convertibility No

Right to reimbursement of capital Yes

Description of the reimbursement of capital

The Company's statutory provisions follow, in this subject, the rules established in the Corporate Law Act and applicable legislation.

Restrictions regarding

outstanding shares No

Circumstances where guaranteed rights of said securities may be altered

Under the Brazilian Corporate Law, the Bylaws, or resolutions adopted by shareholders in General Meetings can restrict the shareholders from the following rights: Right to profit sharing; Right to participate in the distribution of any remaining assets in case of Company liquidation, proportionately to their interest in the capital stock; Preemptive rights in the subscription of shares, convertible debentures or subscription rights, except in certain circumstances provided in the Brazilian Corporate Law; The right to supervise the management of corporate businesses, as provided by the Brazilian Corporate Law; The right to vote in Shareholders’ General Meeting; The right to leave the Company, in the cases provided in the Brazilian Corporate Law. Changes in rights assured by shares other than those listed above; Change in the minimum compulsory dividend, change in the reimbursement amount, limitations to the exercise of voting rights, etc. may be modified by decisions made in general shareholders’ meetings, by simple or qualified majority of the Company's shareholders, depending on the nature of the matter to be resolved.

Other Relevant Characteristics

No further relevant information pertaining to this item 18.

18.2 Statutory regulations which limit the right to vote of relevant shareholders or which cause them to hold a public offering.

According to Article 32, Chapter 7 of the Company’s bylaws, the transfer of shareholding Control of the Company, directly or indirectly, whether through a single transaction, or through successive transactions, shall be contracted under a condition precedent or subsequent that the acquiring party shall obligate itself to make a Public Tender Offer for the remaining shares of the other shareholders of the Company, subject to the conditions and periods provided for in applicable legislation and the Novo Mercado Rules, such that they are assured treatment equal to that given to the Selling Controlling Shareholder. The public offering referred to in the Article 32 shall also be required: (a) when there is encumbered assignment of subscription rights or an option to acquire shares or other securities or rights relating to securities convertible into shares, or that give the right to their subscription or acquisition, as applicable, which comes to result in the sale of Control of the Company, and (b) in the case of a transfer of control of company(ies) holding the Power of Control of the Company, in which case, the Selling Controlling Shareholder shall be obliged to declare to the BM&FBOVESPA the value assigned to the Company in such transaction and provide supporting documentation.

[atentar AGOE 26/4]

18.3 Description of exceptions and suspension clauses relative to ownership or

political rights set forth in the bylaws

Not applicable, as there are no exceptions or suspension clauses relative to ownership or political rights set forth in the Company’s bylaws.

18.4 - Information on the volume of trading as well as minimum and maximum values for securities traded on the stock exchange or the over-the-counter market, in each of the quarters in the last 3 fiscal years.

Date ending quarter Securities Type Class

Marketplace Administrative Body

Total financial volume funded

Highest Price

Lower price

Factor Price

(R$) (R$) (R$) (R$)

3/31/2015 Shares Common - Stock

Exchange

BM&FBOVESPA - Bolsa de Valores,

Mercadorias e Futuros

385.275.761 9.41 5.26 R$ per

unit


Exchange



308.420.721 9.45 6.54 R$ per

unit


Exchange



180.452.920 7.36 4.5 R$ per

unit


Exchange



163.451.037 5.95 2.2 R$ per

unit


Exchange



161.866.011 3.54 2.25 R$ per

unit


Exchange



268.298.311 4.90 3.05 R$ per

unit


Exchange



346.717.596 6.35 4.10 R$ per

unit


Exchange



167.918.465 5.08 3.45 R$ per

unit


Exchange



251.438.392 5.09 3.43 R$ per

unit


Exchange



227.944.541 4.07 3.27 R$ per

unit


Exchange



195.194.967 5.24 3.62 R$ per

unit


Exchange



106.461.887 4.96 3.95 R$ per

unit

18.5 Description of other securities which are not shares

Transferable Security Debentures

Identification of the Transferable Security

Debentures Non Convertible into Shares of the First Issue – single series

Issue date 04/11/2011

Maturity Date 04/11/2016

Quantity (units)

Total amount (reais)

27,000

270,000,000.00

Debit Balance 0.00

Restrictions on Tradings Yes

Description of restrictions The commercial notes were the subject of public distribution with restricted placement efforts, pursuant to CVM Instruction 476, under the firm commitment and, consequently, can only be traded between qualified investors. The trading restriction period laid down in article 13 of that 90 days after the statement expired date of issue.

Convertibility No

Possibility of Redemption No

Characteristics of the Debt Transferable Security

Conditions for alteration of the rights conferred by such transferable securities

Other relevant characteristics

The nominal value of the promissory note will not be updated monetarily.

The remuneration provided above shall be paid every six months from the date of issue, being the first payment on October 18, 2011, and the last payment of the maturity date, or on the date of any settlement.

In case of payment after the deadline of any amount due in respect of any obligation under the Commercial Papers, on any and all amounts in arrears would address, without notice, notification or judicial or extrajudicial, and subject to the Remuneration, calculated pro rata from the date of default to the date of actual payment, (i) fines of 2% (two percent), and (ii) interest of 1% (one percent) per month or fraction of a month, calculated pro rata from the date of default until the date of actual payment. For more information about Debentures maturity, see item 18.10 below.

More information in item 18.12

More information in item 18.12



Debentures Non Convertible into Shares of the Second Issue – second series

Issue Date 08/15/2012


Quantity (units)


10,906

109,100,000.00

Debit Balance R$156.811 thousand


Description of Restrictions The debentures were subject of public distribution with restricted placement efforts, pursuant to CVM Instruction 476, under the firm commitment to the placement of 20,000 debentures, and under the best-efforts placement in relation to the remaining debentures. The debentures can only be traded between qualified investors and after a 90 days period from the date of subscription or purchase according to the articles 13 and 15 of CVM Instruction 476, and compliance by the Company of its obligations under Article 17 of CVM Instruction 476.

Convertibility No



Payment of the Nominal Value of each of the Second Series Debentures will be amortized in three successive annual installments, in the following order: (a) 2 installments, each corresponding to 33.33% of the Face Value of each of the Debentures of the Second Series Second Series, updated by the Monetary Update of the Second Series, due on August 15, 2018 and August 15, 2019; And (b) 1 installment, in the amount corresponding to the outstanding balance of the Nominal Value of each of the Second Series Debentures updated by the Second Series Monetary Update, due on the Maturity Date of the Second Series. The obligations of the Company may be declared in arrears, subject to the terms and conditions established in the Deed of Issue. The remuneration of each of the Debentures of the Second Series shall be as follows: I. Monetary Update: The Nominal Value of each of the Debentures of the Second Series will be updated by the variation of the National Extended Consumer Price Index, published by the Brazilian Institute of Geography and Statistics ("IPCA"), from the Issue Date to the date of its actual payment, being the product of the update incorporated at the Nominal Value Of each of the Second Series Debentures automatically ("Second Series Monetary Update"). Without prejudice to the payments due to early redemption of the Debentures and / or early maturity of the obligations arising from the Debentures, under the terms set forth in the Deed of Issue, the Second Series Monetary Adjustment shall be paid on the same dates and in the same proportion of the amortizations of the Value Nominal of each of the Debentures of the Second Series, as provided in the Deed of Issue. I Interest Remuneration: The remuneration interest corresponding to 5.50% per annum will be charged on the outstanding balance of the Nominal Value of each of the Second Series Debentures, updated by the Monetary Update of the Second Series, based on 252 business days

Without prejudice to payments due to early redemption of the Debentures and / or early maturity of the obligations arising from the Debentures, in accordance with the terms of the Deed of Issuance, Interest on the Second Series shall be paid annually from the Issue Date, On August 15, 2013 and the last, on the Maturity Date of the Second Series. The second issue debentures do not have collateral or trust. The Debentures shall be of the unsecured type, pursuant to article 58, caput, of the Brazilian Corporation Law. Identification: Pentagon S.A. Distributor of Securities.



During deliberations of the General Meetings of first series debenture holders and General Meetings of second series debenture holders, for each outstanding Debenture one vote will be granted, permitting the establishment of proxy, whether Debenture holder or not. Except for the provisions below, (i) all deliberations to be taken in the General Meeting of debenture holders will depend on approval of debenture holders of the first series representing at least 75% of outstanding First Series Debentures; and (ii) all deliberations to be taken in the General Meeting of debenture holders will depend on approval of debenture holders of the second series representing at least 75% of outstanding Second Series Debentures.

Not included in the quorum above are: (i) quorums expressly provided for in other clauses of the deed of issue; and (ii) changes, which should be approved by debenture holders of the first series representing at least 90% of outstanding first series debentures and by debenture holders of the second series representing at least 90% of outstanding second series debentures, (a) of the provisions of this clause; (b) of the quorums for approval provided for in the Deed of issue; (c) the remuneration, except for changes resulting from extinction, limitation and / or non-disclosure of the DI rate or IPCA, as provided in Clause of the Deed of issuance; (d) any dates for payment of any amounts provided for in the Deed of issuance; (e) of the term of the Debentures; (f) of the type of Debentures; (g) creation of a repricing event; (h) the provisions relating to optional early redemption; (i) the provisions relating to early amortization (j) of any Event of Default.

See item 18.12 of this Reference Form.



Debentures Non Convertible into Shares of the Second Issue – first series

Issue Date 08/15/2012


Quantity (units)


16,094

160,900,000.00

Debit balance R$0



Convertibility No





Payment of the Nominal Value of each of the First Series Debentures shall be amortized in two successive annual installments, each corresponding to 50% of the Nominal Value of each of the First Series Debentures due on August 15, 2016 and Maturity Date of the First Series. Second-issue debentures do not have a real or trust guarantee. They shall be of the unsecured type, pursuant to article 58, caput, of the Brazilian Corporation Law. The remuneration of each of the First Series Debentures shall be as follows:

I. Monetary Update: The nominal value of each of the Debentures of the First Series will not be monetarily restated.

II. Remuneration Interest: The nominal value of each of the Debentures of the First Series will bear interest corresponding to 100% of the accumulated variation of the DI Rate plus a surcharge of 0.88% per year. Without prejudice to the payments due to early redemption of the Debentures and / or early maturity of the obligations arising from the Debentures, under the terms set forth in the Deed of Issue, the First Series Remuneration will be paid semi-annually from the Issue Date, On February 15, 2013 and the last, on the Maturity Date of the First Series.

The Company's obligations may be declared in default, subject to the terms and conditions established in the Deed of Issue.

Fiduciary Agent: Pentagon S.A. Distributor of Securities.During deliberations of the General Meetings of first series debenture holders, for each outstanding Debenture one vote will be granted, permitting the establishment of proxy, whether Debenture holder or not. Except for the provisions below, (i) all deliberations to be taken in the General Meeting of debenture holders will depend on approval of debenture holders of the first series representing at least 75% of outstanding First Series Debentures; and (ii) all deliberations to be taken in the General Meeting of debenture holders will depend on approval of debenture holders of the second series representing at least 75% of outstanding Second Series Debentures.


See item 18.12 of this Reference Form.



Debentures Non Convertible into Shares of the Third Issue – single series

Date of Issue 05/30/2014


Quantity (units)


20,000

200,000,000.00

Debit Balance R$134.175 thousand



Convertibility No

Possibility of Redemption Yes

Hypotheses and calculation of surrender value


The Company may, at its sole discretion, make, at any time, optional early redemption offer, total or partial, of the outstanding Debentures, with the consequent cancellation of such Debentures, which will be sent to all Bondholders, without distinction, assured equal conditions to all Bondholders to accept the early redemption of the Debentures held by them, through an Optional Early Redemption Offer. The amount to be paid in respect of each Debenture indicated by their respective holders into joining the Optional Early Redemption Offer will be equal to the outstanding balance of the Par Value, plus (a) Remuneration, calculated pro rata from the date issuance or payment date immediately preceding Compensation, as appropriate, until the date of actual payment; and (b) if applicable, the redemption premium to be offered to the Bondholders, at the sole discretion of the Company, which cannot be negative redemption.

i. Maturity, including the conditions for early maturity: For more information about the maturity of the Debentures, please check item 18.10. ii. Interest: I. Monetary adjustment: the Nominal Unit Value of the Debentures will not be monetarily restated; and II. Remuneratory Interest: on the debit balance of the Unit Par Value of the outstanding Debentures, interest will be paid corresponding to 116.00% (one hundred and eight seventy five percent) of the cumulative variation of the daily average rates of DI - Interbank Deposits Day, calculated and published daily by CETIP, in the daily information available on its website (http://www.cetip.com.br), calculated exponentially and cumulatively pro rata temporis for business days elapsed since the date of the Issue or the payment date of immediately previous Remuneration, as the case may be, until the effective payment date. Without prejudice to the payments due to early redemption of the Debentures and / or early maturity of the obligations arising from the Debentures, under the terms set forth in the Deed of Issue, the Remuneration will be paid semi-annually from the Issue Date on May 30th And November of each year, with the first payment occurring on November 30, 2014 and the last, on the Maturity Date. iii. Guarantee and, if real, description of the object The Second Issue Debentures do not have real or personal guarantee. iv. In the absence of a guarantee, if the credit is unsecured or subordinated: The Debentures shall be of the unsecured type, pursuant to article 58, caput, of the Brazilian Corporation Law. v. Any restrictions imposed on the issuer in relation to the distribution of dividends, sale of certain assets, contracting of new debts, issuance of new securities: See conditions of early maturity in item 18.10. vi. The fiduciary agent, indicating the main terms of the contract: For more information on hiring the fiduciary agent, please check item 18.10.



During deliberations of the General Meetings of debenture holders, for each outstanding Debenture one vote will be granted, permitting the establishment of proxy, whether Debenture holder or not. Except for the provisions below, (i) all deliberations to be taken in the General Meeting of debenture holders will depend on approval of debenture holders of the first series representing at least 75% of outstanding First Series Debentures; and (ii) all deliberations to be taken in the General Meeting of debenture holders will depend on approval of debenture holders of the second series representing at least 75% of outstanding Second Series Debentures.

Not included in the quorum above are: (i) quorums expressly provided for in other clauses of the deed of issue; and (ii) changes, which should be approved by debenture holders representing at least 90% of outstanding debentures, (a) of the provisions of this clause; (b) of the quorums for approval provided for in the Deed of issue; (c) the remuneration, except for changes resulting from extinction, limitation and / or non-disclosure of the DI rate or IPCA, as provided in Clause of the Deed of issuance; (d) any dates for payment of any amounts provided for in the Deed of issuance; (e) of the term of the Debentures; (f) of the type of Debentures; (g) creation of a repricing event; (h) the provisions relating to optional early redemption; (i) the provisions relating to early amortization (j) of any Event of Default.

None.

18.6 Description of the Brazilian markets where the company's securities are admitted for trading

Shares

The Company’s common shares are traded at the BM&FBOVESPA.

Debentures

The debentures issued by the Company, first, second and third issuance, described at table 18.5 of this Reference Form, were registered for trading in the secondary market and electronic custody SND – Módulo Nacional de Debêntures, managed and operated by CETIP.

18.7 Description of the securities admitted to trading in foreign markets

a. Country

United States of America

a. Market

The ADRs of Mills are traded in the over-the-counter market (OTC) under CUSIP 60114T103, ISIN BRMILSACNOR2 and ticker MILTY.

b. Administrative entity for the market in which securities are listed for trading

OTC (Over-The-Counter)

c. Date of listing for trading

Trading on OTC started on December 18, 2013.

d. Trading segment, if any

The ADR’s of Mills are traded in the over-the-counter (OTC) market in the OTC Pink Current Information segment.

e. Date of first listing on trading segment On October 29, 2013, the Board of Directors approved the decision to establish the Sponsored Level 1 American Depositary Receipt Program (Level I ADR Program), having Mills shares as underlying assets.

The Level I ADR Program was approved by the Brazilian Securities and Exchange Commission (CVM) on December 9, 2013 and by the U.S. Securities and Exchange Commission (SEC) on December 11, 2013, with start of trading on December 18, 2013.

f. Percentage of trading volume overseas when compared to the total trading volume for each class and type of security last year

During 2015, 1,536,869 Mills ADRs were issued and 129,630 Mills ADRs were cancelled, according to total volume of trades of 1,074,638 ADRs.

During 2016, 157,390 Mills ADRs were issued and 735,253 Mills ADRs were cancelled, according to total volume of trades of 1,059,491 ADRs.

During 2017, none Mills ADRs were issued and 400 Mills ADRs were cancelled, according to total volume of trades of 6,851 ADRs.

On December 31, 2017, the company had 828,976 ADRs.

The Company currently has 828,976 ADRs. (On April 19, 2018) – none ADRs were issued or canceled in 2018.

g. Proportion of certificates of deposit overseas, if any, when compared to each class and type of shares

1:1 (one ADR for each common share).

h. Depositary bank, if any

JPMorgan Chase Bank

i. Trust agent, if any

Itaú Unibanco S.A.

18.8 - Securities issued abroad

Justification for failure to complete the table:

The Company did not issue bonds abroad.

18.9 Description of the public offerings made by the Company or by third parties, including controlling companies and subsidiaries, relating to the Company’s securities

Public offerings of distribution of commercial promissory notes and debentures, with restricted placement efforts

Promissory notes of fourth issue and the debentures of the first, second and third issue were subject of public offerings, with restricted efforts of placement, in accordance with CVM Instruction No. 476, of January 16, 2009, intended exclusively for qualified investors. The fourth issue of commercial papers were already fully redeemed on April 28, 2011. The second issue of commercial papers were already fully redeemed on June 20, 2014. All relevant characteristics of these securities are described in section 18.5 and 18.10 of this Reference Form.

18.10 Allocation of resources from public distribution offers and possible deviations

a. how the resources resulting from the supply were used We inform that the resources resulting from the offers were used as defined in the respective deeds of issue, that is, for (i) the financing of investments to be carried out by the Company; (ii) payment of debts of the Company; and (iii) uses and general expenses of the Company. b. Whether there were any material deviations between the effective application of the funds and the application proposals disclosed in the prospectus of the respective distribution We inform that there were no deviations in the effective application of the resources, except those informed in the deeds of emissions, as informed in the previous item. c. In case of deviations, the reasons for such deviations

As informed in the previous items there were no deviations in the application of the resources resulting from the public offerings.

18.11 Description of the takeover bids made by the Company related to shares issued by third parties

Not applicable, as the Company did not make a public tender offer related to shares issued by third parties.

18.12 - Other information which the Company deems relevant

The main resolutions of the Debenture Holders General Meetings on March 22, 2017 were:

• Replacement of EBITDA by Operating Cash Flow - FCO (i), for the calculation of covenants for early maturity purposes;

• Creation of a guarantee of fiduciary assignment by means of the opening of a linked account, within 60 days from March 22,

2017, held by the Company in favor of the debenture holders, in an amount equivalent to 50% of the debtor balance, measured

monthly ;

• Maintenance of EBITDA in covenants for the purpose of releasing the related account and restrictions on the distribution of

dividends and of loans between related parties;

• Interest rate repricing as described above;

• Limitation of dividends above the legal minimum limit of 25%;

• Restriction of related party loans.

Covenants

The deeds of issuance of the debentures foresee the maintenance of indebtedness indices and interest coverage with pre-

established parameters, which were changed by the Debenture Holders General Meetings held on March 22, 2017, as follows:

(1) Financial ratio resulting from the quotient of the Net Debt division (ii) by the FCO must be equal to or less than 3; and

(2) Financial ratio resulting from the quotient of the FCO division by Net Financial Expenses (iii) shall be equal to or greater

than 2.

(i) "FCO" means, based on the four previous consolidated financial statements of the Company, net cash provided by operating

activities, excluding interest and monetary changes in net assets and liabilities, acquisitions of property, plant and equipment

and interest paid; and

(ii) "Net Debt" means, based on the Company's previous consolidated financial statements, (a) the sum of the Company's

onerous debts, on a consolidated basis, to legal entities, including loans and financing with third parties and / or related parties

and issuance of fixed income securities, convertible or not, in the local and / or international capital market, in addition to

guarantees provided by the Company, but excluding debts arising from tax installments; (b) less the sum of cash and cash

equivalents financial statements) on a consolidated basis;

(iii) "Net Financial Expenses" means, based on the four previous consolidated financial statements of the Company, the

difference between the consolidated gross financial income and the consolidated gross financial expense.

Considering the resolutions regarding covenants approved by the Debenture Holders General Meetings held on March 22,

2017, at the end of the period ended December 31, 2017, all covenants are being complied with.

Non-convertible Unsecured Debentures of First issuance of the Company

a Identification of securities

Non-convertible Unsecured Debentures of First issuance – single tranche

b Quantity 27,000

c Total amount Total amount of R$270.000.000,00

d (i) Issue date April 18, 2011

(ii) Maturity date April 18, 2016

e

Restrictions on trading

Yes. The debentures were the subject of public distribution with restricted placement efforts, pursuant to CVM Instruction 476, under the firm commitment and, consequently, can only be traded between qualified investors. The trading restriction period laid down in article 13 of that 90 days after the statement expired date of issue

f Convertibility

Not applicable.

g

Possibility of redemption Not applicable.

(i) Assumptions and method of calculating the redemption value

Not applicable.

h If debt securities, indicate where applicable:

(i) Conditions for acceleration

Maturity date on April 18, 2016.

Payment of the nominal value of each debenture in 3 (three) successive yearly instalments, in the following order: (i) 2 (two) instalments, each corresponding to matured 33.3333% of nominal value (without considering any amortization) of each of the debentures, being the first installment of this sub-item due in April 18, 2014 and the second installment of this sub-item due in April 18, 2015; and (ii) 1 (one) installment, in the amount of the outstanding amount, due on the maturity date.

The obligations may be declared mature in advance, if the terms and conditions set forth in the

Deed of Issue are maintained, in the occurrence of any of the events summarized below: I. Default by non-payment of the Nominal Value, of Remuneration, premium, or any other amounts owed to the debenture holders; V. assignment or pledge any form of transfer or promise of transfer to third parties in whole or in part by the Company, any of its obligations under the Deed, without the prior consent in writing of Debenture Holders representing at least 75% of the outstanding; VI. invalidity, unenforceability or invalidity of the deed and / or the Distribution Agreement, is not remedied within 10 days from the date of the respective event; VII. (a) bankruptcy of the Company, and /or any of its subsidiary or controlling Company; (b) voluntary bankruptcy application made by the Company and/or any of its subsidiary or controlling Company; (c) bankruptcy filing by the Company, and/or any of its subsidiary or controlling Company, formulated by others, not elided within legal; (d) petition for judicial or extrajudicial recovery of the Company and /or any of its subsidiary or controlling Company, regardless of approval of the request; or (e) liquidation, dissolution or extinction of the Company, and /or any of its subsidiary or controlling Company, unless the liquidation, dissolution and/or extinction during the course of a corporate transaction which does not constitute an Event of Default; VIII. changing the company into a limited liability company, pursuant to articles 220 to 222 of Law No. 6,404/76;IX. approval of incorporation, merger or split of the company or sale, by the company, of all or substantially all of its assets or its mining properties, with some exceptions: (a) if the transaction has been approved in advance by the Debenture Holders representing at least 75% of the outstanding Debentures; or (b) if the Debenture Holders that wish to do so, be assured that, during the minimum period of six months from the date of publication of the minutes of corporate acts in the transaction, the redemption of the Debentures held by them, by paying the outstanding balance of the Nominal Value, plus Remuneration, calculated pro rata from the Issue Date or the date of payment of compensation immediately preceding, whichever is applicable until the date of actual payments; or (c) by the incorporation of the Company (so that the Company is the remaining entity), of any Subsidiary; or (d) if the operation is carried out solely between Subsidiaries; X. capital reduction, except if previously approved by Debenture Holders representing at least 75% of the outstanding Debentures, pursuant to Article 174, paragraph 3, of Law No. 6,404/76; XI. change or transfer of control (as defined under Article 116 of Law No. 6,404/76), direct or indirect, of the Company, from any Controlling Company and / or any Subsidiary, except if previously approved by Debenture Holders representing at least 75% of the outstanding Debentures; XV. early maturity of any financial obligation of the Company and / or any Subsidiary, which amount, individual or aggregate, is equal to or greater than R$ 5,000,000.00 or its equivalent in other currencies, and/or occurrence of any event or default of any obligation which, after the expiration of any period provided in their document, or in other cases, within 10 days from the date of their default, give rise to the declaration of acceleration any financial obligation of the Company and / or any Subsidiary, which amount, individual or aggregate, is equal to or greater than R$ 5,000,000.00 or its equivalent in other currencies.

(ii) interest

The face value of the debentures of the first issue will not be monetarily updated.

Interest paid semi-annually will account for 112.5% of the accumulated variation of the interest rate of CDI.

The remuneration provided above shall be paid every six months from the date of issue, being the first payment on October 18, 2011, and the last payment of the maturity date, or on the date of any settlement.

In case of payment after the deadline of any amount due in respect of any obligation under the Commercial Papers, on any and all amounts in arrears would address, without notice, notification or judicial or extrajudicial, and subject to the Remuneration, calculated pro rata from the date of default to the date of actual payment, (i) fines of 2% (two percent), and (ii) interest of 1% (one percent) per month or fraction of a month, calculated pro rata from the date of default until the date of actual payment

(iii) guarantee and, if in the form of collateral, description of the goods used as collateral

Not applicable. The first issue of debentures does not have collateral or surety.

(iv) in the absence of a guarantee, if the credit is secured or subordinate

The Debentures will be unsecured, in accordance with Article 58, caput of the Law No. 6,404/76.

(v) possible restrictions imposed on the issuer

See terms of acceleration above.

The dividend distribution

The sale of certain assets

The possibility of new debt

The issue of new securities

(vi) the fiduciary agent, indicating the key terms of the contract

Name: Pentágono S.A. Distribuidora de Títulos e Valores Mobiliários.

Remuneration: The performance of duties and tasks assigned to compete in accordance with the law and its deed of issue, the fiduciary agent, or the institution which will replace him in that capacity, he shall receive a remuneration: (i) R$13,000.00 per year, due from the company, being the first instalment of remuneration payable within 30 days from the date of conclusion of the deed of issue, and the other, on the same day of subsequent years; (ii) Additionally, in the event of a close-out netting of obligations of the company under the debentures of the first emission, equivalent to R$500.00 per hour-working man devoted to activities related to the issue and the debentures, to be paid within 5 days from the date of attestation of delivery by the trustee and approval by the company, of the report, concerning hours of activities (a) advice to debenture holders in the process of renegotiation required by the company; (b) attendance at formal meetings with the company and/or debenture holders and/or general meetings of debenture holders; and (c) implementation of the decisions taken by the debenture holders (iii) brought out yearly since the date of payment of the first annual instalment by the change in the general price index-market, published by Fundação Getúlio Vargas, or by any other that eventually is replaced, calculated pro rata temporis, if necessary; (iv) plus the sales tax of any kind – TAXES, contributing to the Social Integration Program – PIS, Social contribution on net income – CSLL, contributing to the financing of Social Security – COFINS and any other taxes that may relate to the remuneration payable to the trustee, except for tax on income and proceeds of Any Nature – GOunder existing rates for the dates of each payment; (v) due to maturity, redemption or cancellation of debentures of the first issue, and even after its maturity, redemption or cancellation in the event of actions of the trustee in charge of any defaults on bonds not remedied by the company, in cases where the remuneration payable to the trustee shall be calculated in proportion to the months of operation of the fiduciary agent, based on the value specified in item i, readjusted as the paragraph iii; and (vi) plus, where lives in your payment, regardless of notice, judicial or extrajudicial notification or notification, on the values arrears, (a) fine 2 moratorium; and (b) interest on arrears of 1 month, calculated pro rata temporis since the date of default until the payment date.

Reimbursement of expenses: the Trustee shall be repaid by the company for all reasonable costs

incurred that have proven to protect the rights and interests of the debenture holders or to perform their claims within 30 (thirty) days from the delivery of the evidentiary documents accordingly, provided that, where possible, the costs have been approved in advance by the company, which shall be deemed to be approved if the company does not appear within 2 (two) working days from the date of receipt of their request by fiduciary agent.

Obligations: The fiduciary agent, as provided for in the deed of issue, will have the functions laid down in the law and in accordance with the rules and regulations of the Securities and Exchange Commission, and use of any action to protect rights or defend interests of the debenture holders.

Replacement: In case of absence, temporary impediments, renunciation, intervention, judicial or extrajudicial settlement, bankruptcy, or any other case of vacancy in the fiduciary agent, the following rules shall apply: (i) is provided to debenture holders, after the closing of the offer of the debentures of the first issue, proceed with the replacement of the trustee and the indication of his replacement, general meeting of debenture holders especially convened for this purpose; (ii) if the Trustee is unable to continue to perform their duties by supervening circumstances to the deed of issue, shall immediately communicate the fact to debenture holders, requesting his replacement and convene a general meeting of debenture holders for this purpose; (iii) if the fiduciary agent, renounces functions, should remain in the exercise of their duties until a replacement is indicated by the institution and approved by general meeting of debenture holders, and assume their functions effectively; (iv) shall be performed, within the maximum period of 30 (thirty) days from the date of the event that determine, general meeting of debenture holders, for choosing the new fiduciary agent; (v) replacement, on a permanent basis, the fiduciary agent (a) shall be subject to prior notification to the CVM and its manifestation on the attendance to the requirements provided for in article 9 of CVM Instruction No. 28, November 23, 1983, as amended, and (b) shall be subject to the addition to the deed of issue; payments to the trustee replaced shall be effected in accordance with the proportionality to the period of effective service delivery; (vi) the trustee will be entitled to the same salary replacement perceived by the previous, if (a) the company has not agreed with the new value of the remuneration of the trustee proposed by general meeting of debenture holders, or (b) the general meeting of debenture holders does not act on the matter; (vii) the fiduciary agent should substitute, immediately after his appointment, communicate it to the company and to debenture holders; and (viii) shall apply to cases of substitution of Trustee the norms and precepts from the Securities and Exchange Commission.

i

Conditions for amendment of the rights conferred by such securities

During deliberations of the General Meetings of debenture holders for each of the series, for each outstanding Debenture one vote will be granted, permitting the establishment of proxy, whether Debenture holder or not. Except for the provisions below, all deliberations to be taken in the General Meeting of debenture holders will depend on approval of debenture holders representing at least 75% of outstanding Debentures.

Not included in the quorum above are: I. quorums expressly provided for in other clauses of the deed of issue; and II. changes, which should be approved by debenture holders representing at least 90% of outstanding Debentures: (a) of the provisions of this clause; (b) of the quorums for approval provided for in the Deed of issue; (c) the remuneration, except as provided in Clause of the Deed of issuance; (d) any dates for payment of any amounts provided for in the Deed of issuance; (e) of the term of the Debentures; (f) of the type of Debentures; (g) creation of a repricing event; (j) of any Event of Default.

j


None.

Non-convertible Unsecured Debentures of Second issuance of the Company

a Identification of securities

Non-convertible Unsecured Debentures of second issuance – double series

b Quantity 27,000

c Total amount Total amount of R$270,000,000.00

d (i) Issue date August 15, 2012

(ii) Maturity Date

1st series: August 15, 2017.

2nd series: August 15, 2020.

e Restrictions on trading Yes. The debentures were subject of public distribution with restricted placement efforts, pursuant

to CVM Instruction 476, under the firm commitment to the placement of 20,000 debentures, and under the best-efforts placement in relation to the remaining debentures. The debentures can only be traded between qualified investors and after a 90 days period from the date of subscription or purchase according to the articles 13 and 15 of CVM Instruction 476, and compliance by the Company of its obligations under Article 17 of CVM Instruction 476.

f Convertibility

Not applicable.

g Possibility of redemption

Not applicable.

(i) Assumptions and method of calculating the redemption value

Not applicable.

h If debt securities, indicate where applicable:


Maturity date of the first series on August 15, 2017.

Payment of the nominal value of each first series debenture in 2 (two) successive yearly installments, each one corresponding to matured 50% (fifty percent) of nominal value of each of the debentures of the first series, being the first installment due in August 15, 2016 and the second installment on the maturity date of the first series.

The obligations may be declared mature in advance, if the terms and conditions set forth in the Deed of Issue.

Maturity date of the second series on August 15, 2020.

Payment of the nominal value of each second series debenture in 3 successive yearly installments, in the following order: (a) 2 installments, each corresponding to matured 33.33% of nominal value of each of the debentures of the second series monetarily adjusted, due to August 15, 2018 and August 15, 2019; and (b) 1 installment, in the amount of the outstanding amount of nominal value of each of the debentures of the second series monetarily adjusted, due to the maturity date of second series debenture.

The obligations may be declared mature in advance, on the terms and conditions set forth in the Deed of Issue, in the occurrence of any of the events summarized below: I. Default by the Company of any financial obligation on the Debentures, due under the Deed of Issue, at the date of payment provided for in the Deed of Issue; II. Default by the Company of any non-financial obligation on the Debentures foreseen in the Deed of Issue (a) that is not properly solved within specific remedy; or (b) not having specific term remediation, if it is not properly solved within 15 days from the date of such default, being the period provided in this subsection does not apply to obligations to which it has a deadline stipulated or specific cure for which the period of cure has been expressly excluded; III. judicial questioning by the Company for any controlling company, directly or indirectly (controlling as defined in article 116 of the Corporate Law) of the Company (“Controlling”), and / or controlled company (controlled as defined in article 116 of the Corporate Law) by the Company (“Controlled”), of the Issue of Deed; IV. judicial questioning by any person not mentioned in section III above, the Issue of Deed, suspended or not remedied within 15 days from the date on which the Company becomes aware of the judging of such legal challenge; V. assignment or pledge any form of transfer or promise of transfer to third parties in whole or in part by the Company, any of its obligations under the Deed, without the prior consent in writing of Debenture Holders representing at least 75% of the outstanding; VI. invalidity, unenforceability or invalidity of the Deed and/or the Distribution Agreement, is not remedied within 15 days from the date of the respective event; VII. (a) bankruptcy of the Company, and/or any of its subsidiary or controlling Company; (b) voluntary bankruptcy application made by the Company and / or any of its subsidiary or controlling Company; (c) bankruptcy filing by the Company, and/or any of its subsidiary or controlling Company, formulated by others, not suppressed within the legal deadline; (d) petition for judicial or extrajudicial recovery of the Company and /or any of its subsidiary or controlling Company, regardless of approval of the request; or (e) liquidation, dissolution or extinction of the Company, and/or any of its subsidiary or controlling Company, unless the liquidation, dissolution and/or extinction during the course of a corporate transaction which does not constitute an Event of Default, pursuant to section IX below; VIII. changing the company into a limited liability company, pursuant to articles 220 to 222 of Law No. 6,404/76; IX. approval of incorporation, merger or split of the company or sale, by the company, of all or substantially all of its assets or its mining properties, with some exceptions: (a) if the transaction has been approved in advance by the Debenture Holders representing at least 75% of the outstanding Debentures; or

(b) if the Debenture Holders that wish to do so, be assured that, during the minimum period of 6 months from the date of publication of the minutes of corporate acts in the transaction, the redemption of the Debentures held by them, by paying the outstanding balance of the Nominal Value, plus Remuneration, calculated pro rata from the Issue Date or the date of payment of compensation immediately preceding, whichever is applicable until the date of actual payments; or (c) by the incorporation of the Company (so that the Company is the remaining entity), of any Subsidiary; or (d) if the operation is carried out solely between Subsidiaries; X. capital reduction, except if previously approved by Debenture Holders representing at least 75% of the outstanding Debentures, pursuant to Article 174, paragraph 3, of Law No. 6,404/76; XI. change or transfer of control (as defined under Article 116 of Law No. 6,404/76), direct or indirect, of the Company, from any Controlling Company and / or any Subsidiary, except if previously approved by Debenture Holders representing at least 75% of the outstanding Debentures; XII. amendment of the Company's purposes and / or any Subsidiary, as provided in its bylaws or social contract as applicable, in effect on the Issue Date, unless such amendment(a) if the transaction has been approved in advance by the Debenture Holders representing at least 75% of the outstanding Debentures; (b) does not lead to a change in the principal activity of the Company or its Subsidiary; XIII. non-renewal, cancellation, revocation or suspension of licenses and permits, including environmental, required by the competent bodies to carry out regular activities of the Company, since its effects have not solved or suspended within 15 days from the date of its non-renewal, cancellation, revocation or suspension respective (s) permit (s) or license (s); XIV. occurrence of any event that causes (a) in relation to the Company, (i) any material adverse effect on the condition (financial or of any nature), business, property, results of operations and/or prospects; (ii) any adverse effect on the powers or legal capacity and/or economic-financial to fulfill any of the obligations under the Deed of Issue, and/or (iii) any event or condition that, after the deadline, formal notice, or both, may result in a Default event, or (b) with respect to Deed of Issue, any adverse effect on (i) the proper execution, legality, validity and / or enforceability of the obligations documents, and / or (ii) the rights contained in the Debenture Deed of Issue, since it has not solved its effects or suspended within 15 days from the date of knowledge of event the Company ("Material Adverse Effect"); XV. non maintenance by the Company and/or any Subsidiary, insurance, as the current best practices in the market segment of the Company with respect to its material operating assets, not solved within 15 days from whatever happens first:

(a) the date on which the Company becomes aware of the event, and promptly notifies the Fiduciary Agent or (b) the date on which the Company receives written notice from the Fiduciary Agent; XVI. early maturity of any financial obligation of the Company and/or any Subsidiary, which amount, individual or aggregate, is equal to or greater than R$ 10,000,000.00, annually updated, from the Issue Date, by the positive variation of the IPCA, or its equivalent in other currencies, and / or the occurrence of any event or default of any obligation which, after the expiration of any cure period provided for in the respective document, may give rise, immediately the declaration of acceleration of any financial obligation of the Company and/or any Subsidiary, which amount, individual or aggregate, is equal to or greater than R$ 10,000,000.00, annually updated, from the Issue Date, by the positive variation of the IPCA, or its equivalent in other currencies XVII. securities protest against the Company and / or any Subsidiary, which amount, individual or aggregate, is equal to or greater than R$ 10,000,000.00(ten million reais), annually updated, from the Issue Date, by the positive variation of the IPCA, or its equivalent in other currencies, unless, within 10 (ten) days from the date of their protest has been proven that (a) the protest has been made in error or bad faith of the third and was taken to the appropriate judicial order restraining or cancellation of their effects; b) the protest was canceled, or (c) the value (s) of title (s) protested

(s) was deposited in court; XVIII. default by the Company and / or any subsidiary of any decision or final court judgment or any judgment or arbitral award not subject to appeal against the Company and / or any Subsidiary, which amount, individual or aggregate, is equal to or greater than R$ 10,000,000.00, annually updated, from the Issue Date, by the positive variation of the IPCA, or its equivalent in other currencies, not paid within the stipulated payment for their decision or judgment XIX. attachment or sequestration of assets of the Company and / or any Subsidiary, which amount, individual or aggregate, is equal to or greater than R$ 10,000,000.00, annually updated, from the Issue Date, by the positive variation of the IPCA, or its equivalent in other currencies, unless, within ten days from the date of their arrest or abduction, has been proven that

the arrest or abduction was challenged or replaced by other security; XX. expropriation, confiscation or any other measure of any governmental entity in any jurisdiction that results in loss by the Company and / or any Subsidiary of the property and / or the direct or indirect ownership of a substantial portion of its assets;

(b) XXI. sale, assignment, or alienation in any form or constitution of mortgage, pledge, lien, Fiduciary assignment agreement, usufruct, trust, promise to sell, purchase option, right of first refusal, charge, encumbrance or onus, judicial or extrajudicial, voluntary or involuntary, or any other action which has the practical effect similar to any of the above expressions ("Onus"), whether in a single transaction or a series of transactions, related or not, on assets of the Company and/or any subsidiary amounting more than 15% of the total assets of the Company, based on the latest Company's Consolidated Financial Statements (as defined in Section 7.1 of Deed of Issue), unless (a) if the transaction has been approved in advance by the Debenture Holders representing at least 75% of the outstanding Debentures; or (b) the establishment of liens on any asset acquired by the Company or any Subsidiary, provided that the lien consists exclusively on assets acquired and to finance the acquisition of such asset; XXII. verifying that any of the statements made by the Company in the Issue Deed and / or the Underwriting Agreement is false, inconsistent, inaccurate, incomplete, insufficient or incorrect in any material respect, not cured within ten (10) days from the earlier of (a) the date upon which the Company is aware of the incorrectness or (b) the date upon which the Company receives written notice from the Fiduciary Agent;

XXIII. non-use by the Company, the net resources obtained of the Issue strictly in terms the Deed of Issue; XXIV. distribution and/or payment by the Company of dividends, interest on capital or other distributions of profits to shareholders, if the Company is in default of any of its obligations under the Issuance Deed, except for the payment of dividend must not exceed 25% of net income under Article 202 of the Corporations Act, except for the payment of the mandatory dividend of no more than 25% of net income under Article 202 of the Law No. 6,404/76, and XXV. non-compliance by the Company of any financial ratios below ("Índices Financeiros"), to be determined by the Company under the Deed of Issue and verified by the Fiduciary agent within 10 days from the date of receipt by the Fiduciary agent, the information referred to the Deed of Issue based on the Consolidated Financial Statements of the Company for each quarter of the calendar year, from and including the Consolidated Financial Statements of the Company on December 31, 2012: (a) the financial index due to the quotient of dividing Net Debt (as defined in the Issue Deed) to EBITDA (as defined in the Issue Deed), which must be less than or equal to 3 and (b) the financial index due to the quotient of dividing EBITDA by Net Financial Expenses (as defined in the Issue Deed), which should be equal or higher than 2. After the General Meeting of Debenture Holders held on March 22, 2017 ("AGD220317"), it was resolved to conclude the addition to the Issue Deed in order to change the Financial Ratios, as defined in item "XXV" of Clause 6.26 and item IV of Clause 6.26.5. of the Deed of Issue, under the terms below: (...) XXV. Failure to comply with any of the financial indices below (collectively, "Financial Ratios"), to be determined by the Company, pursuant to Clause 7.1 below, item II, item (a), and verified by the Trustee within the term up to ten (10) days as from the date of receipt by the Trustee of the information referred to in Clause 7.1 below, item II, item (a), based on the Company's Consolidated Financial Statements for each quarter of the calendar year from and including the Company's Consolidated Financial Statements related to: 1) March 31, 2012, inclusive, until December 31, 2016, inclusive of(a) the financial ratio resulting from the quotient of the Net Debt division (as defined in Clause 6.26.5 below, item II) by EBITDA (as defined in Clause 6.26.5 below, item III), which shall be equal to or less than three (3); And (b) the financial index resulting from the quotient of the division of EBITDA by the Net Financial Expenses (as defined in Clause 6.26.5 below, item I), which shall be equal to or greater than two (2). 2) from March 31, 2017 up to and including the Maturity Date: (a) of the financial index resulting from the quotient of the Net Debt division (as defined in Clause 6.26.5 below, item II) by the FCO (defined in Clause 6.26.5 below, item IV), which shall be equal to or less than 3.0 (three); And (b) the financial index resulting from the quotient of the FCO division by Net Financial Expenses (as defined in Clause 6.26.5 below, item I), which shall be equal to or greater than 2.0 (two). (...) 6.26.2. In the event of any of the other Default Events (other than those provided for in Clause 6.26.1 above), the Trustee shall, for the purposes of Clause 8.6 and 8.6.1 below, summon, within a maximum term of five (5) Business Days counted from the date on which it occurs, the General Meeting of Debenture Holders of the First Series and the General Meeting of Debenture Holders of the Second Series, to be held within the minimum term established by law. If, at said general meetings of Debenture Holders, Debenture Holders of the First Series representing at least 75% (seventy-five percent) of the First Series Debentures in circulation, and Debenture Holders of the Second Series representing at least 75% (seventy five percent) of the Second Series Debentures in circulation, decide not to consider the early maturity of the obligations arising from the Debentures, or, in case of suspension of the work for deliberation at a later date, the Fiduciary Agent shall not declare the early maturity Of the obligations arising from the Debentures; Otherwise, or in case of failure to install, at second call, the general meeting of Debenture Holders, the Trustee shall immediately declare the early maturity of the obligations arising from the Debentures. (...)

6.26.5. For the purposes of this Deed of Issuance: (...)IV. "FCO" means, based on the immediately preceding four (4) Consolidated Financial Statements, net cash provided by operating activities, excluding interest and monetary changes in net assets and liabilities, acquisitions of property, plant and equipment and interest paid. (ii) in view of the fact that item (i) of the Agenda was approved, the Debenture Holders confirm that item (ii) of the Agenda is impaired in view of the above approval; (iii) upon the approval of item (i) above, the Debenture Holders approved the amendment of clause XXIV of Clause 6.26 as a new hypothesis of early maturity, in the terms indicated below: (...) XXIV. (1) if the Company is in default with any of its obligations established in this Deed of Issue and distributes and / or dividends, interest on own capital or any other distributions of profits to shareholders of the Company, except for the payment of mandatory dividend Not more than twenty-five percent (25%) of the adjusted net income provided for in article 202 of the Brazilian Corporation Law; (a) Net Debt / EBITDA ≤ 3 and (b) EBITDA / Net Financial Expenses> 2 and (2i) if the Company does not observe the following financial ratios for two consecutive quarters and (2.ii) the Company (a) distributes and / or payment by the Company of dividends, interest on own capital or any other distributions of profits to the shareholders of the Company, except for the payment of the mandatory dividend not exceeding 25 % (Twenty five percent) of the adjusted net income provided for in article 202 of the Brazilian Corporation Law; (B) in the event that the Company carries out any transaction, financial or otherwise, with any controller of the Company or companies under common control that are not Controlled by the Company, except for payment of compensation by the Company as a result of the exercise of management functions in the

Company in the course Normal business; and ((b.ii.) in the event that the Company carries out any financial transaction, either as a creditor or a debtor, with any of its subsidiaries or affiliated companies, although it is not included in this hypothesis the contracts and other instruments related to commercial

relations maintained between (iv) to approve the constitution, in guarantee of the faithful and full compliance with all pecuniary obligations, principal or accessory, assumed by the Company, its subsidiaries or affiliated companies in accordance with its corporate purpose and under market conditions and their respective effects; By the Issuer in accordance with the Debentures and the Deed of Issue, in favor of the Debenture Holders represented by the Fiduciary Agent, of the real guarantee of fiduciary assignment of a linked account held by the Issuer and of the receivables to be held in said related account ("Fiduciary Assignment "), With the inclusion of clause 6.10.1 and following as below, as well as Ust all the necessary references in the Deed of Issuance so that the forecast of the constitution

of the Fiduciary Assignment is inserted. “6.10.1. . In order to guarantee the faithful and complete fulfillment of all pecuniary obligations, principal or accessory, assumed by the Issuer under the Debentures and the Indenture, including any and all amounts, without limitation, as the Nominal Value of the Debentures, plus the Remuneration of the Debentures. Debentures, as defined in Clause 6.15, item (ii), the Moratory Charges, indemnification funds, the remuneration of the Fiduciary Agent and other expenses incurred by him in performing his function, as well as any and all costs or expenses, including Which are evidently incurred by the Fiduciary Agent or the Debenture Holders as a result of procedures, other judicial and/or

extrajudicial measures necessary to safeguard their rights and prerogatives arising from the Debentures and / or the Issuance Deed ("Guaranteed Obligations"), In favor of the Debenture Holders, represented by Agent Fiduciary Shall be constituted the real guarantee of fiduciary assignment of a linked account owned by the Issuer, to be detailed in the Fiduciary Assignment Agreement (as defined below) ("Linked Account"), in which the Issuer shall make a contribution of resources in amount Equivalent to fifty percent (50%) of the debit balance of the Debentures' Nominal Value plus Accrued and Unpaid Remuneration ("Guaranteed Percentage"), as described in this Indenture, as described and disciplined in a private instrument Referred to as the fiduciary assignment ("Fiduciary Assignment Agreement" and "Fiduciary Assignment", respectively). 6.10.2 The Issuer undertakes to maintain in the Linked Account the Guaranteed Percentage, except for the periods indicated in Clause 6.10.4 below. As of May 31, 2017, the Trustee will check monthly (always on the 16th (sixteen)) of each month or on the first (1) following business day, as the case may be), if the Guaranteed Percentage has been observed, according to With the determination of the outstanding balance of the Nominal Value of the Debentures plus the Compensation calculated and not paid on each date of verification. If it is verified that the amount pledged as collateral exceeds the Guaranteed Percentage, the Trustee will authorize the release and transfer of its value that exceeds the Guaranteed Percentage to a free movement account of the Issuer, to be timely indicated by the Trustee in the Second Business Day after the date of verification and immediately subsequent to each amortization date and payment date of the Remuneration. If it is verified that the value held in the Binding Account is less than the Guaranteed Percentage, the Issuer shall be notified by the Fiduciary Agent within two (2) business days counted from the verification of the Guaranteed Percentage and shall recompose the Guaranteed Percentage by up to seven (7) Days from the date you receive the notification. 6.10.3 The amounts deposited in the Binding Account equivalent to the Guaranteed Percentage may be invested in Bank Certificate of Deposit issued by the depositary bank and / or repo operations with the custodian bank ("Permitted Investments") as counterparty. 6.10.4 If the Issuer observes for the following two consecutive quarters the following financial ratios (a) Net Debt / EBITDA ≤ 3 and (b) EBITDA / Net Financial Expenses> 2, the amounts held in the Binding Account and Permitted Investment Shall be fully released to the Issuer's free movement account on the Business Day after the date of verification of the financial ratios, being certain that during this period it will be exempt from observing the Guaranteed Percentage, but shall keep in force the Fiduciary Assignment, Balance of the Linked Account is zero. Should the Issuer fail to observe any of the indices indicated herein, it shall be notified by the Trustee to recompose the Guaranteed Percentage within a period of up to 7 (seven) days from the date of receipt of said notification. 6.10.5 The other terms and conditions of the Fiduciary Assignment shall be detailed in the Fiduciary Assignment Agreement. "(Iv.1) approve that the Fiduciary Assignment be constituted within a period of up to sixty (60) days from the date of this meeting. For the purpose of calculating the Guaranteed Percentage on the date of establishment of the Fiduciary Assignment, the debit balance of the Nominal Value of the Debentures plus the Remuneration calculated and not paid on the date of this meeting shall be considered; (Iv.2) upon approval of the constitution of the Fiduciary Assignment, the Fiduciary Agent shall execute the Fiduciary Assignment Agreement that will observe the terms and mechanisms indicated above; (Iv.3) approve the hiring of a financial institution to act as depositary bank, before which the Linked Account will be opened and which will provide information on the amounts held in said account, among others: Itaú Unibanco SA, Banco Bradesco SA, Banco Santander (Brasil) SA, Caixa Econômica Federal and Banco do Brasil SA; And (iv.4) upon approval of the constitution of the Fiduciary Assignment, the Debenture holders hereby express their knowledge and agreement with the constitution of the guarantee of fiduciary assignment to the debentures of the Issuer's third issue, under the same terms and conditions described herein, mutatis mutandis; (V) in view of the approval of the aforementioned Fiduciary Assignment, approve the increase in the remuneration due by the Issuer to the Fiduciary Agent with the respective amendment to Clause 8.4 of the Indenture, as follows: "8.4 For the performance of the duties and duties that The Fiduciary Agent, or the institution that replaces it as such, shall be entitled to the following: I. will receive a remuneration: (a) until March 22, 2017, exclusive of R $ 3,500.00 (three thousand and five hundred reais) per year and as from March 22, 2017, inclusive, of R $ 7,000.00 (seven thousand reais) per year, payable by the Company, and the first installment of the remuneration due On the 5th (fifth) Business Day counted from the date of conclusion of the second amendment to the Deed of Issue, and the others, on the same day of the subsequent years, until the issue date, or while the Fiduciary Agent represents the interests of the Debenture Holders ; (...) "(vi) approve that the Trustee, in conjunction with the Issuer, practice all acts and measures necessary for full compliance with the above resolutions, including the execution of a Fiduciary Assignment Agreement and the second addition to the Deed of Emission; (Vii) in view of the above approvals, approve the increase in the Remuneration of the Debentures, so that clause II of Clause 6.14 of the Deed of Issuance, which shall become effective with the following wording: "II. Remuneration interest: on the debit balance of the Unit Par Value of the First Series Debentures, interest will be paid corresponding to 100% (one hundred percent) of the cumulative variation of the average daily rates of DI-Interbank Deposits of one day, "over extra-group" , Expressed in percentage form per year, basis 252 (two hundred and fifty-two) business days, calculated and published daily by CETIP, in the daily information available on its website (http://www.cetip.com.br) ( "DI Rate") ("Remuneration"), plus a surcharge of 0.88% (eighty-eight hundredths per cent) per year, up to the date of 03/22/2017, exclusive, and a surcharge of 1.20% (One hundred and twenty hundredths per cent) per annum as of 03/22/2017 up to and including the Maturity Date, basis 252 (two hundred and fifty-two) business days ("First Series Surtax"), and , Together with the DI Rate ("First Series Remuneration"), calculated in an exponential And cumulative pro rata temporis for business days elapsed from the Issue Date or the payment date of the Remuneration of the First Series immediately preceding, as the case may be, until the effective payment date. Without prejudice to the payments due to early redemption of the Debentures and / or early maturity of the obligations arising from the Debentures, in accordance with the terms of this Indenture, the First Series Remuneration shall be paid semi-annually as from the Issue Date, On February 15, 2013 and the last, on the Maturity Date of the First Series. The Remuneration of the First Series will be calculated according to the following formula: (...) Being that: Spread = 0.8800 until 03/22/2017, exclusive, and 1.2000 as of 03/22 / 2017, up to and including the Maturity Date "

(ii) interest

The remuneration of each of the First Series Debentures will be as follows:

I. Monetary Adjustment: The nominal value of the debentures of the first issue will not be monetarily updated.

II. Compensatory Interests: After realization of AGD220317, it was determined that over face value of each of the Debentures of the First Series shall bear interest equivalent to 100% of the accumulated variation of the DI Rate plus a surcharge of 0.88% (eighty-eight cents per cent) per annum until March 22, 2017, exclusive, and a surcharge of 1.20% (one whole and twenty hundredths per cent) per annum as of 03/22/2017 inclusive.

Not with standing the payments due to early redemption of the First Series Debentures and/or acceleration of the obligations under the Debentures, pursuant to the Deed of Issue, the First Series Compensation will be paid semiannually from the Issue Date, with the first payment on February 15, 2013 and the last, on the maturity date of the First Series.

The remuneration of each of the Second Series Debentures will be as follows:

I. Monetary Adjustment: The nominal of each Second Series Debentures will be adjusted by the National Index of Consumer Prices Broad, released by the Brazilian Institute of Geography and Statistics ("IPCA"), since the Issue Date until the date of actual payment, being the update incorporated into the Nominal value of each Second Series Debentures automatically ("Second Series Monetary Adjustment"). Notwithstanding the payments due to early redemption of the Debentures and/or acceleration of the obligations under the Debentures, pursuant to the Deed of Issue, the Second Series Monetary Adjustment will be paid on the same dates and the same amount of amortization of nominal value of each Second Series Debentures, as provided in the Deed of Issue.

II. Interest Remuneration: After AGD220317, it was determined that the interest payable corresponding to 5.50% (five and fifty-five per cent) will be paid on the outstanding balance of the Nominal Value of each of the Second Series Debentures, updated by the Second Series Monetary Update. Hundredths percent) per year, basis 252 (two hundred and fifty-two) business days, up to the date of 03/22/2017, exclusive and corresponding to 7.00% (seven percent) 2017, inclusive.

Without prejudice to the payments due to early redemption of the Debentures and/or early maturity of the obligations arising from the Debentures, in accordance with the terms of the Deed of Issuance, Interest on the Second Series shall be paid annually from the Issue Date, On August 15, 2013 and the last, on the Maturity Date of the Second Series.

(iii) guarantee and, if in the

form of collateral, description of the goods used as collateral

After AGD220317, it was approved the inclusion of the real guarantee of fiduciary assignment of a linked account owned by the Issuer, and of receivables to be held in said related account, in which the Issuer must make an amount equal to 50 % (fifty percent) of the outstanding balance of the Nominal Value of the Debentures plus the Remuneration calculated and not paid.

Such linked account shall comply with the procedure set forth in Clauses 6.10.1. To 6.10.5. Of the Issue Deed, provided that the amounts held in the linked account and in Permitted Investments will be fully released to the Issuer's free movement account if the Issuer observes for the following two consecutive quarters the following financial ratios (a) Debt Net / EBITDA ≤ 3 and (b) EBITDA/Net Financial Expenses> 2.

(iv) in the absence of a guarantee, if the credit is secured or subordinate

The Debentures will be unsecured, in accordance with Article 58, caput of the Law No. 6,404/76.


See terms of acceleration above.

The dividend distribution

The sale of certain assets

The possibility of new debt

The issue of new securities


Name: Pentágono S.A. Distribuidora de Títulos e Valores Mobiliários.

Compensation: The performance of duties and tasks assigned to compete in accordance with the law and its deed of issue, the fiduciary agent, or the institution which will replace him in that capacity, shall receive a remuneration: (i) R$3,500.00 per year, due from the company, being the first installment of remuneration payable on the fifth business day following the date of celebration of the deed of issue, and the remaining, on the same day of subsequent years, until the maturity of the issue, or as long as the fiduciary agent is representing the debentures holders’ interests;(ii) monetary adjustment yearly from the date of payment of the first annual instalment by the change in the general price index-market, published by Fundação Getúlio Vargas, or by any other that eventually is replaced, calculated pro rata temporis, if necessary; (iii) plus the sales tax of any kind – TAXES, contributing to the Social Integration Program – PIS, Social contribution on net income – CSLL, contributing to the financing of Social Security – COFINS and any other taxes that may relate to the remuneration payable to the trustee, except for tax on income and proceeds of Any Nature – go under existing rates for the dates of each payment; (iv) due to maturity, redemption or cancellation of debentures, and even after its maturity, redemption or cancellation in the event of actions of the trustee in charge of any defaults on debentures not remedied by the Company, in cases where the remuneration payable to the fiduciary agent shall be calculated in proportion to the months of operation of the fiduciary agent, based on the value specified in item i, readjusted as the paragraph ii above; (v) plus, in cases of delay in payment, regardless of notice, judicial or extrajudicial notification, on the delinquent amounts, without prejudice to monetary restatement, (a) interest for late payment of 1% per month, calculated pro rata temporis since the date of default until the date of actual payment; (b) moratorium fine of 2%, non-compensatory and rigid; (c) restatement by IGPM variation, calculated pro rata from the date of default until the date of actual payment; and (vi) realized upon deposit held in the current account to be specified in writing by the Fiduciary Agent to the Company, serving the receipt as settlement of payment.

Reimbursement of expenses: the Fiduciary Agent shall be refunded by the company for all reasonable costs incurred that have proven to protect the rights and interests of the debenture holders or to perform their claims within 30 days from the delivery of the evidentiary documents accordingly, provided that, where possible, the costs have been approved in advance by the company, which shall be considered approved if the company does not appear within 2 working days from the date of receipt of their request by the Fiduciary Agent.

Obligations: The Fiduciary Agent, as provided for in the deed of issue, will have its duties established in the law and in accordance with the rules and regulations of the Securities and Exchange Commission of Brazil (CVM), and use of any action to protect rights or defend interests of the debenture holders.

Replacement: In case of absence, temporary impediments, renunciation, intervention, judicial or extrajudicial settlement, bankruptcy, or any other case of vacancy in the fiduciary agent, the following rules shall apply: (i) is provided to debenture holders, after the closing of the offer, to proceed with the replacement of the fiduciary agent and the indication of its replacement at general meeting of debenture holders especially convened for this purpose; (ii) if the fiduciary agent is unable to continue to perform its duties by supervening circumstances to the deed of issue, shall immediately communicate the fact to debenture holders, requesting its replacement and convene a general meeting of debenture holders for this purpose; (iii) if the fiduciary agent, renounces its functions, should remain in the exercise of its duties until another institution is indicated by the Company for its replacement and approved by general meeting of debenture holders, and assume their functions effectively; (iv) shall be performed, within the maximum period of 30 days from the date of the event that determine, general meeting of debenture holders, for choosing the new fiduciary agent, that may be called by the fiduciary agent to be replaced, by the Company, by debenture holders of the first series representing at least 10% of the debentures of the first series in circulation, or for debenture holders of the second series representing at least 10% of the second series ' debentures in circulation, or by CVM; in the event of convocation notice do not occur within 15 days before the expiration of the time limit here predicted, it will be up to the Company making it, being sure that the CVM may appoint interim replacement pending consummating the process of choosing the new trustee; (v) replacement, on a permanent basis, of the fiduciary agent (a) shall be subject to prior notice to the CVM and its manifestation on the attendance to the requirements provided for in article 9 of CVM Instruction No. 28, November 23, 1983, as amended, and (b) shall be subject to the addition to the deed of issue; (vi) payments to the fiduciary agent replaced shall be effected in accordance with the proportionality to the period of effective service delivery; (vii) the fiduciary agent will be entitled to the same compensation of the perceived by the previous, if (a) the company has not agreed with the new value of the remuneration of the fiduciary agent proposed by general meeting of the debenture holders, referred to in item “iv” above, or (b) the general meeting of debenture holders referred to in item “iv” above does not act on the matter; (vii) the fiduciary agent should replace, immediately after his appointment, communicate it to the company and to debenture holders; and (viii) shall apply to cases of substitution of fiduciary agent the norms and precepts from the Brazilian Securities and Exchange Commission (CVM).

i


During deliberations of the General Meetings of first series debenture holders and General Meetings of second series debenture holders, for each outstanding Debenture one vote will be granted, permitting the establishment of proxy, whether Debenture holder or not. Except for the provisions below, (i) all deliberations to be taken in the General Meeting of debenture holders will depend on approval of debenture holders of the first series representing at least 75% of outstanding First Series Debentures; and (ii) all deliberations to be taken in the General Meeting of debenture holders will depend on approval of debenture holders of the second series representing at least 75% of outstanding Second Series Debentures.


j


None.

Non-convertible Unsecured Debentures of Third issuance of the Company

a

Identification of securities

Non-convertible Unsecured Debentures of third issuance – single series

b

Quantity

20,000

c

Total amount

Total amount of R$ 200,000,000.00

d

Issue date May 30, 2014

Maturity date May 30, 2019

e

Restrictions on trading

Yes. The debentures were subject of public distribution with restricted placement efforts, pursuant to CVM Instruction 476, under the firm commitment to the placement of 20,000 debentures, and under the best-efforts placement in relation to the remaining debentures. The debentures can only be traded between qualified investors and after a 90 days period from the date of subscription or purchase according to the articles 13 and 15 of CVM Instruction 476, and compliance by the Company of its obligations under Article 17 of CVM Instruction 476.

f Convertibility Not applicable.

g Possibility of redemption As described on item 18.5.

Assumptions and method of calculating the redemption value

As described on item 18.5.

h

If debt securities, indicate where applicable:


The term of the Debentures will be 5 (five) years, counted from the Date of Issuance, thus maturing on May 30, 2019.

Payment of the Nominal Value of the Debentures and will be amortized in three (3) consecutive annual installments, each in the amount corresponding to 33.33% (thirty-three whole and thirty-three hundredths percent) of the Par Value, due on May 2017, May 30, 2018 and May 30, 2019. The Company's obligations, subject to the terms and conditions established in the Deed of Issue, may be declared in arrears in the event of any of the following events summarized below:

I. Default by the Company of any pecuniary obligation related to the Debentures and/or provided for in this Deed of Issue, on the respective payment date provided in this Deed of Issue, not remedied within one (1) Business Day as of the date of the respective Defaults; II. Default by the Company of any non-pecuniary obligation set forth in this Deed of Issuance, (a) not remedied within the specific remediation period; or (b) in the absence of a specific remedy, not remedied within a period of 15 (fifteen) days as of the date of the respective default, and the period provided for in this subsection does not apply to obligations for (a) which have been stipulated Specific healing period; or (b) where the cure period has been expressly excluded; III. (As defined in Article 116 of the Brazilian Corporate Law) ("Company"), and/or by any controlled company (as defined by the Company), by any Company, directly or indirectly Provided for in Article 116 of the Brazilian Corporation Law) ("Subsidiary") by the Company, of this Issue Deed; IV. (iii) above, of this Deed of Issue, not remedied or suspended within a period of up to fifteen (15) days as of the date on which the Company becomes aware of the filing of such judicial questioning; V. assignment, promise of assignment or any form of transfer or promise of transfer to a third party, in whole or in part, by the Company of any of its obligations under this Indenture, except: (a) if previously authorized by Debenture Holders Representing at least 75% (seventy-five percent) of the outstanding Debentures; or (b) if as a result of a corporate transaction that does not constitute an Event of Default, in the terms permitted in subsection (x) below; VI. Invalidity, invalidity or unenforceability of this Deed of Issue and/or the Distribution Agreement, not remedied within 15 (fifteen) days as of the date of the respective event; VII. Liquidation, dissolution or termination of the Company, of any Controlling Company and/or any subsidiary, except if the liquidation, dissolution and/or extinction arises from a corporate transaction that does not constitute an Event of Default, pursuant to item (x) below; VIII. (a) decree of bankruptcy of the Company, of any Parent Company and/or of any subsidiary; (b) an application for self-assessment formulated by the Company, by any Parent Company and/or by any subsidiary; (c) filing for bankruptcy of the Company, any Controlling Company and/or any subsidiary, formulated by third parties, not elided within the legal term; or (d) request for judicial recovery or extrajudicial recovery of the Company, from any Parent Company and/or any subsidiary, regardless of the granting of the respective request; X. spin-off, merger, incorporation, incorporation of shares or any form of corporate reorganization involving the Company and/or any subsidiary, except: (a) if previously approved by Debenture Holders representing at least 75% (seventy five percent) of the outstanding

Debentures; or (b) (b) exclusively in the event of a spin-off, merger or merger of the Company, if it has been ensured to the Debenture Holders who so wish, for a minimum period of six (6) months from the date of publication of the minutes of the corporate acts related to the transaction, the redemption of the Debentures held by them, upon payment of the outstanding balance of the Nominal Unit Value, plus the Remuneration, calculated pro rata temporis from the Issue Date or the immediately preceding Remuneration payment date, as the case may be, up to the date of the effective payment; or (c) the incorporation, by the Company (so that the Company is the merging company), of any subsidiary, or by the incorporation, by the Company (so that the Company is the merging company), of shares issued by any subsidiary; or (d) if carried out exclusively among subsidiaries; XI. Reduction of the Company's capital stock, except: (a) if previously approved by Debenture holders representing at least 75% (seventy-five percent) of the outstanding Debentures, as set forth in article 174, paragraph 3, of the Companies Law by Actions; or (b) if carried out exclusively for the absorption of losses; XII. (as defined in Article 116 of the Brazilian Corporation Law) ("Control"), direct or indirect, of the Company, of any Parent Company and/or any Subsidiary, except Previously approved by Debenture holders representing at least 75% (seventy-five percent) of the outstanding Debentures; or (b) for changes to the Direct Control, provided that the Indirect Control remains unchanged; XIII. (a) previously approved by Debenture Holders representing at least 75% (seventy-five percent) of the Company's and/or any subsidiary's corporate purpose, in accordance with its by-laws or bylaws, as the case may be, in force on the Issue Date of the outstanding Debentures; or

(b) does not result in a change in the principal activity of the Company or its subsidiary; XIV. Non-renewal, cancellation, revocation or suspension of authorizations and licenses, including environmental ones, required by the competent bodies for the regular exercise of the Company's activities, provided that they are not remedied or suspended within a period of fifteen (15) Non-renewal, cancellation, revocation or suspension of the respective authorization(s) or license(s); XV. Occurrence of any event that causes (a) in relation to the Company, (i) any material adverse effect on the situation (financial or otherwise), business, assets, results of operations and/or prospects; (ii) any adverse effect on the powers or legal and/or economic-financial capacity to fulfill any of the obligations under this Indenture; and/or (iii) any event or condition that, after the expiration of time or notification, or both, may result in an Event of Default; or (b) in relation to this Deed of Issue, any adverse effect (i) on the correct formalization, legality, validity and/or enforceability of the Bond Documents; and/or (ii) the rights of the Debenture Holders contained in this Deed of Issue, provided that it has not been remedied or suspended within a period of 15 (fifteen) days as of the Company's knowledge of the event ("Adverse Relevant Effect"); XVI. No maintenance, by the Company and/or any subsidiary, of insurance, in accordance with current best practices in the Company's market, in relation to its relevant operating assets, not remedied within a period of up to fifteen (15) first between (a) the date on which the Company becomes aware of the event, and timely notifies the Trustee; or (b) the date on which the Company receives written notice to this effect from the Fiduciary Agent; XVII. The anticipated maturity of any financial obligation of the Company and/or any subsidiary, whose individual or aggregate value is equal to or greater than R$10,000,000.00 (ten million reais), updated annually, as of the Issue Date, by the positive variation of the IPCA, or its equivalent in other currencies; XVIII. Occurrence of any event or default of any obligation that, after the expiration of any curing period provided for in the respective document, may promptly give rise to a declaration of early maturity of any financial obligation of the Company and/or any subsidiary, individual or aggregate, is equal to or greater than ten million reais (R$10,000,000.00), updated annually, as of the Issue Date, by

the positive variation of the IPCA, or its equivalent in other currencies; XIX. Against any of the Company and/or any subsidiary, in an amount, individual or aggregate, equal to or greater than R$10,000,000.00 (ten million reais), updated annually, as of the Issue Date, by the positive IPCA, or its equivalent in other currencies, unless, within 10 (ten) days from the date of the respective protest, it has been validly proven to the Fiduciary Agent that (a) the protest was made in error or bad faith of third party and an appropriate judicial action has been taken for the annulment or suspension of its effects; (b) the protest was canceled; or (c) the amount of the title(s) protested was deposited in court; XX. Default by the Company and/or any subsidiary of any final decision or judicial decision and/or any arbitral decision or award not subject to appeal, against the Company and/or any subsidiary, in an individual or aggregate amount, equal to or greater than R$10,000,000.00 (ten million reais), updated annually, as of the Issue Date, by the positive variation of the IPCA, or its equivalent in other currencies, not remedied within the payment period stipulated in the respective decision or sentence; XXI. Arrest or seizure of assets of the Company and/or any subsidiary, whose value, individually or jointly, is equal to or greater than R$10,000,000.00 (ten million reais), updated annually, as of the Issue Date, by the positive variation of the IPCA, or its equivalent in other currencies, unless, within 10 (ten) days after the date of the respective arrest or seizure, it has been proven that the arrest or abduction has been contested or replaced by another guarantee; XXII. Expropriation, confiscation or any other measure of any governmental entity of any jurisdiction resulting in the loss, by the Company and/or any subsidiary, of the ownership and/or direct or indirect possession of a substantial part of

its assets; XXIII. XXIII. Sale, assignment, or alienation, in any way, or constitution of mortgage, pledge, fiduciary alienation, fiduciary assignment, usufruct, trust, promise of sale, purchase option, preemptive right, charge, lien or liens, judicial or extrajudicial, Voluntary or involuntary, or other act that has the practical effect similar to any of the above expressions ("Encumbrance"), whether in a single operation or in a series of operations, related or not, on assets of the Company and/or any subsidiary whose value represents more than 15% (fifteen percent) of the total value of the Company's assets, based on the Company's Consolidated Financial Statements (as defined in Clause 7.1 below, subsection (i), item (b)), Unless (a) the transaction has been previously approved by Debenture holders representing at least 75% (seventy-five percent) of the outstanding Debentures; or (b) for the constitution of charge on any asset acquired by the Company or by any Subsidiary, provided that the charge is exclusively constituted on the acquired asset and to finance the acquisition of such asset; XXIV. Evidence that any of the statements made by the Company in this Indenture and/or in the Distribution Agreement is false, inconsistent, inaccurate, incomplete, incorrect or insufficient in any material respect, not remedied within a period of up to ten (10) days Which occurs first between (a) the date on which the Company becomes aware of the error; or (b) the date on which the Company receives written notice to this effect from the Fiduciary Agent; XXV. Non use by the Company of the net proceeds obtained with the Issue strictly in accordance with Clause 4.1 above; XXVI. (1) if the Company is in default with any of its obligations set forth in this Indenture and distributes and/or dividends, interest on own capital or any other distributions of profits to shareholders of the Company, except for the payment of mandatory dividend not more than twenty-five percent (25%) of the adjusted net income provided for in article 202 of the Brazilian Corporation Law; (a) Net Debt / EBITDA ≤ 3 and (b) EBITDA / Net Financial Expenses> 2 and

(2.ii) if the Company does not observe the following financial indices for two consecutive quarters:

Company to distribute and/or pay, by the Company, dividends, interest on own capital or any other distributions of profits to shareholders of the Company, except for the payment of a mandatory dividend not exceeding 25% (twenty-five per cent) of the adjusted net income provided for in article 202 of the Brazilian Corporate Law; (b) in the event that the Company carries out any transaction, financial or otherwise, with any controller of the Company or companies under common control that are not Controlled by the Company, except for payment of compensation by the Company as a result of the exercise of management functions in the Company in the course normal business; and (b.ii.) in the event that the Company carries out any financial transaction, either as a creditor or a debtor, with any of its subsidiaries or affiliated companies, although it is not included in this hypothesis the contracts and other instruments related to commercial relations maintained between Company, its subsidiaries and/or affiliated companies in accordance with its corporate purpose and under market conditions and their respective effects; and XXVII. Failure to comply with any of the financial indices below (collectively, "Financial Ratios"), to be determined by the Company, pursuant to Clause 7.1 below, item II, item (a), and verified by the Trustee within the term up to ten (10) days as from the date of receipt by the Trustee of the information referred to in Clause 7.1 below, item II, item (a), based on the Company's Consolidated Financial Statements for each quarter of the Calendar year from and including the Company's Consolidated Financial Statements related to: (a) March 31, 2014, inclusive, until December 31, 2016, inclusive: (i) of the financial index resulting from the debt division quotient net (as defined in Clause 6.26.5 below, item II) by EBITDA (as defined in Clause 6.26.5 below, item III), which shall be equal to or less than three (3); and (ii) the financial index resulting from the quotient of the division of EBITDA by the Net Financial Expenses (as defined in Clause 6.26.5 below, item I), which shall be equal to or greater than two (b) as of 31 From March 2017 up to and including the Maturity Date: (I) of the financial index resulting from the quotient of the Net Debt division (as defined in Clause 6.26.5 below, item II) by the FCO (as defined in Clause 6.26.5 Below, item IV), which shall be equal to or less than 3.0 (three); and (ii) of the financial index resulting from the quotient of the FCO division by Net Financial Expenses (as defined in Clause 6.26.5 below, item I), which shall be equal to or greater than 2.0 (two).

At the General Meeting of the Debenture Holders on March 22, 2017 ("AGD220317"), the wording of sections XXVI and XXVII was adjusted, so that the wording above transcribed reflects the text duly approved by AGD220317.

(ii) interest

I. Monetary Adjustment: The nominal value of the debentures of the third issue will not be monetarily updated.

II. Compensatory Interest: on the outstanding balance of the Nominal Value of the Debentures outstanding focus interest corresponding to 108.75% (one hundred and seventy-eight point five percent) of the accumulated variation of average daily DI - Interbank Deposits one day, calculated and published daily by CETIP in the daily bulletin on its website (http:// www.cetip.com.br) calculated exponentially and cumulatively pro rata by days elapsed from the Issue Date or payment date immediately preceding Compensation form as the case until the date of actual payment. Without prejudice to the payments related to early redemption of the Debentures and/or early maturity of obligations on the Debentures, the remuneration will be payable semiannually from the Issue Date, on the 30th of May and November of each year, with the first payment on November 30, 2014 and the last on the Maturity Date.

(iii) guarantee and, if in the form of collateral, description of the goods used as collateral

Not applicable. Third-party Debentures do not have a real or personal guarantee.

(iv in the absence of a guarantee, if the credit is secured or subordinate

The Debentures shall be of the unsecured type, pursuant to article 58, caput, of the Brazilian Corporate Law.


See early maturity conditions described above.

the dividend distribution

the sale of certain assets

the possibility of new debt

the issue of new securities


Identification: Pentágono S.A Distribuidora de Títulos e Valores Mobiliários

Remuneration: For the performance of the duties and duties attributed to it, in accordance with the law and the Deed of Issue, the Trustee, or the institution that replaces it in that capacity, will receive remuneration: (i) after AGD220317, the remuneration was approved until March 22, 2017, exclusive of R$3,000.00 (three thousand reais) per year and as from March 22, 2017, inclusive, of R$6,500.00 (six thousand and five hundred Real) per year, payable by the Company, and the first installment of the remuneration due on the 5th (5th) Business Day counted from the date of execution of the second amendment to the Deed of Issue, and the other, on the same day of the subsequent years until maturity Of the Issue, or while the Fiduciary Agent represents the interests of the Debenture Holders; (ii) restated annually from the date of payment of the first installment, by the variation of the General Market Price Index, published by the Getúlio Vargas Foundation ("IGPM"), or any index that may replace it, calculated pro rata temporis, if required; (iii) plus the Tax on Services of any Nature - ISSQN, the Contribution to the Social Integration Program - PIS, Social Contribution on Net Income - CSLL, Contribution to Social Security Financing - COFINS and any other taxes that may come To be levied on the remuneration due to the Fiduciary Agent, except for Income Tax and Proceeds of All Kinds - IR; (iv) due until maturity, redemption or cancellation of the Debentures and even after its expiration, redemption or cancellation in the event of the Fiduciary Agent acting in the collection of eventual defaults related to the Debentures not sanated by the Company, in which case the remuneration due to the Fiduciary Agent will be calculated proportionally to the Fiduciary Agent's months of performance, based on the amount indicated in item "i" above, readjusted according to item "ii" above; (V) plus, in the event of default in payment, regardless of notice, notification or judicial or extrajudicial injunction, overdue amounts, without prejudice to monetary restatement, (a) default interest of 1% per month, calculated pro Rata temporis from the date of default up to the effective payment date; (b) an irredeemable and non-compensatory fine of 2%;

(b) monetary restatement based on the IGPM variation, calculated pro rata temporis from the date of default until the effective payment date; and (vi) made through deposit in the current account to be indicated in writing by the Fiduciary Agent to the Company, serving the proof of deposit as proof of payment discharge.

Reimbursement of expenses: the Fiduciary Agent will be reimbursed by the Company for all expenses that it demonstrates to protect the rights and interests of the Debenture Holders or to realize their credits, within a period of up to thirty (30) days from the delivery of the supporting documents to this effect, Provided that the expenses were, whenever possible, previously approved by the Company, which will be considered approved if the Company does not manifest itself within two (2) Business Days as of the date of receipt of the respective request by the Fiduciary Agent.

Obligations: The Trustee, as provided in the Deed of Issue, shall have the functions established by law and by the regulations of the Securities and Exchange Commission, and shall use any and all actions to protect the rights or defend interests of the Debenture Holders.

Substitution: In the event of absence, temporary impediments, resignation, intervention, judicial or extrajudicial liquidation, bankruptcy, or any other case of vacancy of the Fiduciary Agent, the following rules apply: (i) Offer, to replace the Fiduciary Agent and to appoint his substitute, at a general meeting of Debenture Holders specially convened for this purpose; (ii) in the event that the Trustee can not continue to perform its functions due to circumstances in excess of the Deed of Issuance, it shall immediately notify the Debenture holders thereof, requesting its replacement and calling a general meeting of Debenture Holders for that purpose; (iii) in the event that the Fiduciary Agent relinquishes its functions, it shall remain in the exercise of its functions until a substitute institution is appointed by the Company and approved by the general meeting of Debenture Holders and effectively assumes its functions; (iv) within a maximum period of thirty (30) days, counted from the event to be determined, the General Meeting of Debenture Holders of the First Series and the general meeting of Debenture Holders of the Second Series, for the selection of the new fiduciary agent, who may be called by the Fiduciary Agent to be replaced, by the Company, by Debenture Holders of the First Series representing at least 10% (ten percent) of the outstanding Debentures, in the event that the call is not made within fifteen (15) days before the end of the term hereof, it will be up to the Company to do so, being certain that the CVM may appoint a provisional substitute until the new fiduciary agent is completed;

(v) the replacement, on a permanent basis, of the Fiduciary Agent (a) is subject to prior notice to the CVM and its manifestation regarding compliance with the requirements set forth in article 9 of CVM Instruction 28, dated November 23, 1983, as amended, and (b) shall be subject to an addition to the Indenture; (vi) payments to the replaced Trustee will be made observing the proportionality to the period of effective rendering of the services; (vii) the substitute fiduciary agent will be entitled to the same remuneration as the former, if (a) the Company did not agree to the new value of the fiduciary agent's remuneration proposed by the general meetings of Debenture holders referred to in item "iv" above , or (b) the general meetings of Debenture Holders referred to in item "iv" above do not deliberate on the matter; (viii) the substitute fiduciary agent shall, immediately after his/her appointment, communicate it to the Company and to the Debenture Holders pursuant to the Deed of Issue; and (ix) the rules and regulations emanating from the Securities and Exchange Commission shall apply to the hypotheses of substitution of the Trustee.

i


In the deliberations of the general assemblies of Debenture Holders each Debenture in circulation shall be entitled to a vote, admitting the constitution of a representative, Debenture holder or not. Except as provided below, all resolutions to be taken (i) at the general meeting of Debenture Holders will depend on the approval of Debenture Holders representing at least 75% of the First Series Debentures outstanding.

The following are not included in the quorum above: (i) quorums expressly provided for in the

clauses of the Indenture; and (ii) the amendments, which may only be approved by Debenture

holders representing at least 90% of the Debentures, (a) of the provisions of the Deed of Issue; (b)

of any quorum provided for in the Deed of Issue; (c) Remuneration, except in case of alteration

resulting from the extinction, limitation and/or non-disclosure of the DI Rate or the IPCA, as

provided in the Issue Deed; (d) any payment dates of any amounts set forth in the Deed of Issue;

(e) the term of validity of the Debentures; (f) of the debentures; (g) the creation of a renegotiation

event; (h) provisions for voluntary early redemption; (i) provisions relating to voluntary early

repayments; or (j) of the writing of any Default Event.

j


None.

19.1 Provide the following information about issuer’s stock buyback plans

Meeting date Buy-back

Available reserves and profits (Reais) Type Class

Quantity envisaged (units)

Percentage in relation to outstanding

Approved amount purchased (units)

Weighted Average Price

Quote factor

% purchased

Outras caracter.

11/10/2014 11/10/2014 to 11/09/2014

Common 4.000.000 5.069199% 2,285,300 8.65 R$ per unit

57%

For the purposes of article 8 of CVM Instruction 10/80 the Directors determined and clarify that: (a) the Company’s objective in the Repurchase Program is to acquire shares of the Company's issuance, for treasury and subsequent cancellation or alienation, including in the context of any exercise of options under the Company's stock option plan; (b) up to 4,000,000 common shares of the Company’s issuance, all book-entry and without par value, may be acquired under the Repurchase Program, subject to maintaining the minimum float of 25% of the shares (as required by the BM&FBovespa Novo Mercado Listing Regulations) and to the requirement under article 3 of CVM Instruction 10/80 that the number of shares held in treasury shall not exceed 10% of the shares in circulation in the market; (c) the deadline for effecting transactions in the context of the Program is 365 days as of the date hereof; (d) the number of common shares of the Company’s issuance that are in circulation in the market, as defined by CVM Instruction 10/80, is 82,907,932 (eighty-two million, nine hundred seven thousand, nine hundred thirty-two), according to the registry for the share deposit account on November 3, 2014, as reported by the depositary institution; and (e) the purchases in the context of the Repurchase Program will be effected over the exchange at market prices, with the intermediation of any of the following brokers: (i) Votorantim Corretora de Títulos e Valores Mobiliários Ltda., headquartered in the City and State of São Paulo at Avenida das Nações Unidas 14171, Torre A, 14º andar, CEP 04794-000, registered with the CNPJ/MF under n.º 01.170.892/0001-31; (ii) J.P. Morgan Corretora de Câmbio e Valores Mobiliários S.A., headquartered in the City and State of São Paulo at Avenida Brigadeiro Faria Lima 3.729, 13º andar, CEP 04538-905, registered with the CNPJ/MF under n.º 32.588.139/0001-94; (iii) Bradesco S.A. Corretora de Títulos e Valores Mobiliários, headquartered in the City and State of São Paulo at Avenida Paulista 1.450, 7º andar, CEP 01310-100, registered with the CNPJ/MF under n.º 061.855.045/0001-32; (iv) BTG Pactual Corretora de Títulos e Valores Mobiliários S.A., headquartered in the City and State of São Paulo at Avenida Brigadeiro Faria Lima 3.477, 14º andar, CEP 04538-133, registered with the CNPJ/MF under n.º 43.815.158/0001-22; (v) Itaú Corretora de Valores S.A., headquartered in the City and State of São Paulo at Avenida Brigadeiro Faria Lima 3.500, 3º andar, parte, CEP 04538-132, registered with the CNPJ/MF under n.º 61.194.353/0001-64; (vi) Credit Suisse (Brasil) S.A. CTVM, headquartered in the City and State of São Paulo at Rua Leopoldo Couto de Magalhães Jr. 700, 12º andar, CEP 04542-000, registered with the CNPJ/MF under n.º 42.584.318/0001-07; and (vii) J. Safra Corretora de Valores e Câmbio Ltda., headquartered in the City and State of São Paulo at Avenida Paulista 2.100, 19º andar, CEP 01310-930, registered with the CNPJ/MF under n.º 60.783.503/0001-02.

19.2 In relation to securities held in treasury, in tabular form, segregating by type and class, indicate: (a) the initial amount; (b) quantity purchased; (b) the weighted average purchase price; (d) amount sold; (e) weighted average price of alienation:

Fiscal year ended on December 31, 2015

Class of stock: Common

Movement Quantity (Units)

Total amount (R$ thousand)

Weighted average price (R$)

Beginning balance 1,276,300 - - Acquisitions 1,009,000 7,910 7.84 Disposal - - - Cancellations (6,878) - - Ending balance 2,278,422 - - Relationship outstanding securities 4.73





Beginning balance - - - Acquisitions 1,276,300 11,856 9.29 Disposal - - - Cancellations - - - Ending balance 1,276,300 11,856 9.29 Relationship outstanding securities 1.61%

19.3. Other information that the Company considers relevant


Class of Stock: Common




Beginning balance - - - Acquisitions 1,009,000 7,910 7.84 Disposal - - - Cancellations (6,878) - - Ending balance - - -





Beginning balance - - - Acquisitions 1.276.300 11.856 9,29 Disposal - - - Cancellations - - - Ending balance 1.276.300 11.856 9,29

On November 10, 2014, the Board of Directors approved the establishment of a buyback program of common shares issued by the Company and authorized the directors to determine the opportunity and the number of shares to be effectively acquired under the Repurchase Program.

The Company's objective with the buyback program was to acquire up to 4,000,000 shares issued within a maximum of 365 (three hundred and sixty five) days to the date of approval by the Board of Directors, to be held in treasury and subsequent disposal or cancellation, including under the Company's stock option program, in case of exercise of such options. Until March 31, 2015, 2,285,300 shares were purchased in the amount of R$19,777, recorded in the capital reserve. The minimum cost, weighted average and maximum of these shares acquired by the first quarter of 2015 were, respectively, R$5.32, R$ 8.65 and R$11.30. On May 21, 2015, the Board of Directors approved the sale of 5,434 Company's treasury shares to meet the exercise of stock option beneficiaries under the Plan Granting of Share Purchase Options (for more information on the plan, see item 13 of this Form). On June 17, 2015 the Board of Directors approved the sale of 1,444 Company's treasury shares to meet the exercise of stock option beneficiaries under the Stock Option Plan of the Company's Stock Options (for more information on the plan, see item 13 of this Form).

Acquisition date Approved purchased (units)

Approved purchased (R$ thousands)

Weighted Average Price (R$/share)

4th quarter 2014 1,276,300 11,856 9.29

1st quarter 2015 1,009,000 7,910 7.84

Total amount 2,285,300 19,777 8.65

20.1 – Informations about Securities Trading Policy

Date of Approval 02/08/2010 Related parties The Company, the Controlling Shareholder, the Administrators, members of the Fiscal Council,

employees (when they have insider information regarding the Company) and any person who adopted this trading policy (“Securities Trading Policy”) due to their title, job or position in companies that control or are controlled by the Company (“Persons Bound to the Trading Policy”).

Main characteristics and consulting areas

The main characteristics of the Trading Policy are:

prohibiting the trading of securities issued by the Company by Bound Persons who have material information about the Company;

prohibiting the trading of securities issued by the Company by Bound Persons who leave board positions, for the period of six months after they leave the position or until the material information is disclosed;

prohibiting the trading of securities issued by the Company by Related Parties whenever a purchase or sale of shares issued by the Company is in progress, or execution of any agreement or contract for the transfer of Company’s share control, existence of intention of promoting amalgamation, total or partial spin-off, transformation or corporate restructuring involving the Company. This restriction only applies to controlling shareholders, direct or indirect, and administrators when the ongoing purchase or sale of shares of the Company by the Company; and

prohibiting on trading in securities issued by the Company by persons linked to negotiating policy within fifteen days prior to the release of quarterly and annual required by the CVM.

Sealing period and description of verification procedure

When Material Fact not yet disclosed is pending; after the disclosure of material fact, provided that negotiations could adversely affect business conditions described in the act or fact in question; Related Parties may not trade securities over a 15-day period prior to the disclosure, as applicable, of Company's quarterly information (ITR) or standard financial statements (DFP); by former Administrators, for the period of six months after they leave the position or until the material information is disclosed;.

All trading activities with securities issued by the Company carried out by Bound Persons shall only be performed through one of the accredited brokers included in the list sent by the Company to CVM, updated on a regular basis.

http://www.linguee.com.br/ingles-portugues/traducao/verification+procedure.html

20.2 Other information that the Company considers relevant – Trading Policy

The full version of Mills’ “Securities Trading Policy” can be obtained in the following address: http://ri.mills.com.br/static/ptb/arquivos/Politica_de_negociacao_MILLS_RCA_2010_02_08.pdf

http://ri.mills.com.br/static/ptb/arquivos/Politica_de_negociacao_MILLS_RCA_2010_02_08.pdf

21.1 Rules, bylaws or procedures adopted to ensure that information to be disclosed publicly is collected, processed and reported accurately and in a timely manner It is incumbent on the Investor Relations Officer to report and communicate the Material Information to CVM and Market Entities, through the institutional media, as well as adopting the procedures described under this policy.

Material Information will be disclosed to the public, as permitted by CVM Instruction 358/02, in the news portal of the newspaper Valor Econômico (www.valor.com.br/valor-ri) and at the Company’s Investor Relations website (www.mills.com.br/ri), both on the world wide web (Internet), without prejudice to its communication to the CVM and BM&FBOVESPA, in the form required by current regulations.

At the discretion of the Investor Relations Officer, the announcement referred to at paragraph above can be made in addition, upon publication in newspapers of wide circulation normally used by the company, provided, in this case, the adoption of a summary indicating that the full report can be accessed at the electronic address www.mills.com.br/ri.

At the discretion of the Investor Relations Officer, the announcement referred to at paragraph above can be made in addition, upon publication in newspapers of wide circulation normally used by the company, provided, in this case, the adoption of a summary indicating that the full report can be accessed at the electronic address www.mills.com.br/ri

The information should be presented in a clear and precise manner, in language accessible to the investing public. Whenever a technical concept that used at the discretion of the Investor Relations Officer, is considered more complex, an explanation of its meaning must be on the information disclosed.

Whenever Material Information is released by any means of communication, including information to the press or in meetings with professional associations, investors, analysts or selected public, in the Country or abroad, that Investor Relations Officer shall release the Material information simultaneously to the market.

The controlling shareholders, the members of the Board of Directors and Fiscal Council, and any employee, who have knowledge of the information related to the Material Information, and signed the adherence instrument containing the policy on disclosure of Material Information, shall immediately notify the Investor Relations Officer about such Material information, in case the Officer is not yet aware of the information, as well as verify that the Investor Relations Officer have taken the measures described in this document.

The communication to the Investor Relations Officer mentioned in the item above, must be carried out by email, to the email address [email protected].

In case the persons mentioned in the previous item verify the omission of the Officer Responsible in the fulfillment of their duty of communication and disclosure, and has not been deliberated the maintenance of

the secrecy on the Relevant Act or Fact, in the terms contained in the Policy of Disclosure of the Act and Fact Relevant, such persons shall immediately communicate the Relevant Act or Fact directly to the CVM to

exempt themselves from liability imposed by applicable regulations in case of non-disclosure.

Whenever the CVM or Market Entities require from the Investor Relations Officer additional clarifications to the

communication and disclosure of Material Act or Fact, or in the event of an atypical oscillation in the quoted price or negotiated quantity of securities issued by the Company or to which they refer, the Investor Relations

Officer shall inquire of persons with access to Relevant Acts or Facts, with the purpose of ascertaining whether they are aware of information that must be disclosed to the market. The managers and employees of the

Company interviewed in the form of the item above, shall respond to the request of the Investor Relations

Officer immediately. If they are not able to meet in person or speak to the Investor Relations Officer by telephone on the same day that they have become aware of their CVM or Market Entities requirement, the

administrators and employees in question should send electronic mail with the pertinent information to the address [email protected].

The disclosure of a Relevant Act or Fact shall be made, as a rule, simultaneously with the CVM and the

Market Entities, before the beginning or after the closing of the business in the Market Entities. When the

securities issued by the Company are being traded simultaneously in Brazilian and foreign Market Entities, disclosure should be made, as a rule, before the beginning or after the closing of the business in all countries,

prevailing, in case of incompatibility, the opening hours of the Brazilian market.

If, exceptionally, it is imperative that the communication of Material information occurs during trading hours, the Investor Relations Officer when disclosing the Material information, may simultaneously request the Market entities in Brazil and abroad, the suspension of trading of securities issued by the Company or related thereto, the time necessary to properly disclose their information. The Investor Relations Officer must prove to Brazilian Market entities that the requested suspension of trading also was accomplished in foreign Market

http://www.mills.com.br/ri



entities.

The Investor Relations Officer must prove to the Brazilian Market Entities that the requested trading

suspension has also taken place in the foreign Market Entities. The Company may adopt the practice of disclosing to the market its expectations of future performance (guidance), both short and long term, mainly

regarding the financial and operational aspects of its business, by decision of the board of directors, noting that the disclosure of such expectations provokes the restriction of trading set forth in paragraph 4 of article

13 of CVM Instruction 358/02.

In the event that disclosure of such expectations, should be subject to the following assumptions:

(i) The anticipated dissemination of results may be accepted in the case of preliminary information, not yet

audited, clearly presented for each of the items and timeframes, memories of the assumptions and calculations used;

(ii) The results or information prepared in accordance with foreign accounting standards should provide a reconciliation to the Brazilian accounting practices, as well as reconciliation with the accounting items expressed directly in the financial statements of the Company and, therefore, obtained by the accounting principles adopted in Brazil;

(iii) If disclosures involves the preparation of projections, a comparison with the actual results must be submitted, on the occasion of the release of Form ITR of the Company; and

(iv) If the projections are discontinued, it should be informed, together with the reasons that led to its loss of validity in the form of Material Information.

21.2 Description of the policy of disclosure of a material act or fact adopted by the Company,

indicating the procedures related to the maintenance of confidentiality regarding material

information not disclosed

The Company's Material Disclosure Policy is based on the following principles and objectives:

(i) provide full information to shareholders and investors;

(ii) guarantee a broad and immediate disclosure of Material Act or Fact;

(iii) provide equal access to public information about the Company to all shareholders and investors;

(iv) ensure the confidentiality of an undisclosed Material Act or Fact;

(v) collaborate for the stability and development of the Brazilian capital market; and

(vi) consolidate practices of good corporate governance in the Company.

The controlling shareholder, directors, members of the board of directors and the fiscal council, as well as other employees and agents of the Company, shall preserve the confidentiality of the information pertaining ,

Until their current release to the market and ensure that they are subordinates and third parties they trust

the same, being jointly responsible with them in case of noncompliance.

For the purpose of maintaining confidentiality referred to in the above item, the individuals mentioned therein

shall observe and ensure observance of the following, without prejudice to the adoption of other measures that are appropriate in front of each situation:

(i) disclose the confidential information strictly to those persons who need to know it;

(ii) not discuss the confidential information in the presence of third parties who are not aware of it, although it may be expected that said third party can not intuit the meaning of the conversation;

(iii) not discuss confidential information in telephone conferences in which it is not possible to be sure of who effectively the persons who may participate;

(iv) keep documents of any kind related to confidential information, including handwritten personal notes, in a safe, closet or closed file, to which only persons authorized to know the information have access;

(v) generate documents and electronic files related to confidential information always protected by password systems;

(vi) internally circulate documents containing confidential information in sealed envelopes, which must always be delivered directly to the person of the recipient;

(vii) do not send documents with confidential information by facsimile, unless it is certain that only the person authorized to take notice of the information will have access to the receiving device; and

(viii) without prejudice to the responsibility of the one who is transmitting the confidential information, require from outside third party to the Company that it must have access to the information the signature of a confidentiality agreement, in which the nature of the information must be specified and a statement of The

third party acknowledges its confidential nature, undertaking not to disclose it to any other person and not to deal with securities issued by the Company prior to the disclosure of the information to the market.

When confidential information needs to be disclosed to any employee of the Company or other person holding title, function or position in the Company, its controlling shareholders, subsidiaries or affiliates, other than a director, member of the Board of directors or the Fiscal Council of the Company, the individual responsible for the transmission of information should make sure that the person receiving it is aware of the Policy Disclosure of Material Information of the Company, requiring even to sign the Policy Disclosure of Material Information before providing access to information.

21. 3 Administrators responsible for implementation, maintenance, evaluation and supervision

of the information disclosure policy Investor Relations Officer.


The full version of Mills’ “Policy on Disclosure of Material Information” can be obtained in the following address:

http://ri.mills.com.br/fck_temp/12_7/file/Politica%20de%20Divulga%C3%A7%C3%A3o_2016_03_28_p.pdf

http://ri.mills.com.br/fck_temp/12_7/file/Politica%20de%20Divulga%C3%A7%C3%A3o_2016_03_28_p.pdf

Reference Form 2018 - ir.mills.com.brir.mills.com.br/enu/2802/Formulrio de Referncia 2018_i.pdf ·...

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Transcript of Reference Form 2018 - ir.mills.com.brir.mills.com.br/enu/2802/Formulrio de Referncia 2018_i.pdf ·...