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Company's Extraordinary and Annual
Shareholders Meeting of 2012
MANUAL INTENDED TO PROVIDE INFORMATION
FOR PURPOSES OF PARTICIPATION IN THE
April 13, 2012
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Message from the Chairman of the Board ­
MANAGEMENT REPORT/AGEA MANUAL
Dear Shareholder,
In 2011, we see con rmation that our world is unsustainable, if current
trends of production, global consumption and socio-environmental
imbalances continue. The wave of events over recent years says much:
in 2006, there arose an awareness of the risks of global warming caused
by man; two years later, we lived through the hardships of an economic
crisis, now deepening in the European
Union. Lastly, since 2010, we have watched
with bewilderment the social convulsions
of the Arab Spring in its many forms, but
which has one thing in common: the quest
for a more just and equalitarian society. We
believe that only a deep transformation
based on ethics of life, in which new
development logics and revigorated global
governance prevail over and above the
interests of religions, countries, economic
groups, will be the source of hope for
future generations and for man to continue existing on Earth.
If on the one hand this scenario is troubling to us, on the other
hand it reasserts our determination to make our best emotional
and intellectual efforts for Natura to act increasingly as agent of
necessary social change. Always managed in accordance with the
principles of sustainability, in the search for the best results ­ in an
integrated manner ­ in the economic, social and environmental
dimensions. This corporate behavior, in harmony with society's
aspirations, means we simply must take Natura and its proposed
values to new heights and frontiers.
Today, Brazil and Latina America,
our main operating markets, are in a
privileged position. Though not immune
to the effects of a tougher international
environment, they are less likely to be
adversely affected by global upheavals.
The economic rise of an important
sector of the population ­ with women
playing a particularly prominent role
­ seems to have a wingspan that
will be able to promote a long and
promising cycle of development, albeit
far from a sustainable development project, fostering full social
inclusion, broadening of distribution of wealth and mitigation
of environmental impacts. The signi cant investments of large
companies in the eld of personal grooming, perfumery and
cosmetics in Latin America are evidence of this much more
favorable scenario. In the near future, Brazil will be the world's
second largest market in our sector.
"Natura is likely the most
evolved example that we have
seen up to now of a company
that manages its world in all
its colors and maximizes the
added value of its ecology."
Christopher Meyer, Standing on the Sun:
How explosion of capitalism abroad will change
business everywhere
Ethically-challenging times
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We began our message with an excerpt from the recently-published work by Christopher
Meyer, a Harvard University professor, who inspiringly describes the way in which we
seek to carry on our business. We are very grateful for his generous interpretation, which
simultaneously highlights our distinctive traits and encourages us to take part in a new and
more community-oriented, fair and inclusive capitalist project. We believe that our path
to success lies in the fact of historically seeking continuous improvement and innovative
solutions for the dilemmas of the present and the future, learning the "spirit of the moment"
and projecting it into the future. In this new context, our greatest challenged will be to unite
the new technologies with hearts attuned to the same cause. Therefore, we envisage the
possibility of expanding the power to transform our network of relationships.
The ever greater exercise of our raison d'être, which is to promote well-being, will lead us
to improve and deepen the ties which unite us to our consultants, collaborators, business
partners and consumers. Energized by dreams and the quest for professional and personal
realization, we are convinced that this community is determined to promote values such as
solidarity, creativity and altruism, with respect and reverence to life. We therefore reaf rm
our historical commitment to stand by the side of all those who want to participate in this
urgent collective construction of humanity.
Friendly greetings from
Antonio Luiz da Cunha Seabra, Guilherme Peirão Leal and Pedro Luiz Barreiros
Passos, Co-Chairmen of the Board of Directors
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1
Invitation
2
Proposed Agenda
2.1.
Itapecerica da Serra
2.2.
Natura Cajamar Space
2.2.1.
Get-Together and Broadcasting of Meetings - Cajamar
3
Extraordinary and Annual Shareholders Meeting
4
Proceedings and Deadlines
4.1.
Attendance In Person
4.1.1
. Shareholder Natural Person
4.1.2
. Shareholder Legal Entity
4.1.3.
Investment Funds
4.1.4.
Foreign Shareholders
4.2.
Representation by Power of Attorney
4.2.1.
Shareholders Represented by Electronic Power of Attorney
4.2.2.
Shareholders Represented by Hard Copy Power of Attorney
4.2.2.1.
Delivery of Documents
4.3.
Public request for Power of Attorney
5.
Call Notice
6.
Information of the Matters Submitted for Resolution Purposes
6.1.
Extraordinary Shareholders Meeting
6.1.1.
Documents pertaining to the Matters Submitted for Resolution Purposes
at the Extraordinary Shareholders Meeting
6.2.
Annual Shareholders Meeting
7.
Relevant Links
8.
Exhibits
Exhibit I ­ Comparison Table of Proposed Amendments to the By-Laws
Exhibit II - Proposed Amendments to the By-Laws - Consolidated
Exhibit III ­ Management Comments - Item 10 of the Reference Form
Exhibit IV ­ Information on the Proposed Allocation of Income Required by CVM Instruction 481
Exhibit V ­ Managers of the Company
Exhibit IV ­ Managers' Compensation - Item 13 of the Reference Form
table of contents
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Natura Cosméticos S.A. ("Company") hereby
invites its Shareholders to participate in the
Extraordinary and Annual Shareholders Meetings, to
be cumulatively held on April 13, 2012, at 10:20 a.m.,
("AGE/O"), for purposes of resolving on the matters
set forth in the Call Notice, as per item 5 of the
Present Manual Intended to Provide Information for
Purposes of Participation in the AGE/O ("Manual).
With the purpose to stimulate and facilitate the
attendance of the Meetings, the Company will
make available through the Worldwide Web the
information and documents provided for in Law No.
6,404, of December 15, 1976, as amended ("Brazilian
Corporations Law"), and in CVM Instruction 481, of
December 17, 2009 ("CVM Instruction 481"), and
shall give to all Shareholders the possibility to grant
powers of attorney through an electronic system of
the worldwide web.
Access to the powers of attorney to be granted
through the electronic system will be made available
in Natura's Investors Relations webpage (www.natura.
net/investidor). In this connection, Shareholders are
required to make a prior registration and obtain a
digital certi cation, according to the procedures set
forth in the present Manual. Please check the Manual
and the Power of Attorney Form presented in item
4.2 herein below to grant a power of attorney through
the electronic system.
Please consider yourselves invited to examine the
Management Proposal and other documents relating
to the AGE/O, also in Natura's Investors Relations
webpage (www.natura.net/investidor), in CVM's
webpage (www.cvm.gov.br), in BM&FBovespa's
webpage (www.bmfbovespa.com.br) and at the
registered offices of the Company.
Itapecerica da Serra, March 8, 2012
ROBERTO PEDOTE
Investors Relations Officer
MANUAL INTENDED TO PROVIDE INFORMATION FOR PURPOSES OF
PARTICIPATION IN THE EXTRAORDINARY AND ANNUAL SHAREHOLDERS
MEETINGS OF NATURA COSMÉTICOS S.A.
1. Invitation
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2.1. Itapecerica da Serra
10:00 a.m.
Welcome and opening of the event with a breakfast
10:20
a.m.
Beginning of the Shareholders Meetings in the
city of Itapecerica and simultaneous broadcasting to Cajamar
10:50
a.m.
Closing of the Shareholders Meetings and
commuting of the Shareholders from Itapecerica to the Natura
Cajamar Space (optional)
11:20
a.m.
Arrival at the Natura Cajamar Space and
presentation of results and plans, chat with Co-chairmen and
with the CEO Alessandro Carlucci
12:45
a.m.
Brunch
13:30
a.m.
Return to São Paulo or visit to the Natura
Cajamar Space (optional)
14:30
a.m.
Return to São Paulo
2. PROPOSED AGENDA
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2.2. Natura Cajamar Space
09:00 a.m.
Gathering of the Shareholders at the parking lot of
the Eldorado Shopping Mall, to be commuted to the premises of
Natura in Cajamar
10:00 a.m.
Welcome and opening of the event with a breakfast
10:20
a.m.
Beginning of the Shareholders Meetings in the city of
Itapecerica and simultaneous broadcasting to Cajamar
10:50
a.m.
Natura Products: an experience
11:20 a.m.
Presentation of results and plans, chat with Co-
chairmen and with the CEO Alessandro Carlucci
12:45 a.m.
Brunch
13:30
a.m.
Return to São Paulo or visit to the Natura Cajamar
Space (optional)
14:30
a.m.
Return to São Paulo
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2.2.1. Get-Together and
Broadcasting of the Meetings -
Natura Cajamar Space
Date
April 13, 2012
Time
10:00 a.m.
Place
Natura Cosméticos S.A. - Rodovia Anhanguera,
s/n, km 30,5 Cajamar-SP
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During the get-together at the Natura Cajamar Space, we will live
broadcast the entirety of the presentation of all subjects to be
resolved at the Extraordinary and Annual Shareholders Meetings,
to be held in Itapecerica da Serra.
To those attending the poll at the registered offices in Itapecerica
da Serra, we will offer a commuting service from that location to
the Natura Cajamar Space, so that they may join the event after
the closing of the Meetings. As such, we will give our Shareholders
the opportunity to vote in person at our registered offices of
Itapecerica da Serra and to subsequently join the Cajamar event.
In case you prefer to participate right from the beginning of the
schedule at the Natura Cajamar Space and still exercise your
voting rights by means of a power of attorney granted through the
electronic system in the worldwide web, the Shareholders will be
able to cast their vote by electronic power of attorney until 11:00
p.m. of April 10, 2012, for which purpose you must effect your
registration and obtain the digital certification.
We stress that the exercise of the vote in person may only be
done at the Company's registered offices in Itapecerica da Serra.
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3. Extraordinary and Annual
Shareholders Meetings
Date
April 13, 2012
Time
10:20 a.m.
Place
Registered of ces of Natura Cosméticos S.A.
Rodovia Régis Bittencourt, s/nº, Km. 293
Bairro Potuverá ­ CEP 06882-700
Itapecerica da Serra-SP, Brasil
Matérias
As described in the relevant Call Notice
appearing in item 5 of the present Manual.
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Participation of Shareholders in the Company's Meetings is of
paramount importance.
The convening on rst call of the Extraordinary Shareholders
Meeting, of which the subject matter is the amendment to
the By-Laws, requires the presence of Shareholders holding
at least two thirds (2/3) of the shares representing the capital
stock of the Company. The convening on rst call of the
Annual Shareholders Meeting requires the presence of the
Shareholders holding at least one fourth (1/4) of the shares
representing the capital stock of the Company. In the event that
such quorum is not present, the Company shall announce a
new date to conduct the respective Meeting that has not been
convened, which may on second call be held with any number
of attending Shareholders.
A Shareholder may attend the Meetings in person or be
represented by a duly appointed attorney in fact.
4.1 ATTENDANCE IN PERSON
The Company requests to any Shareholder willing to attend the
Meetings in person to be present at 9:30 a.m. at our registered
offices in Itapecerica da Serra, with the following documents:
4.1.1 SHAREHOLDERS NATURAL PERSONS
>
Identi cation Card with photograph (Identity Card (RG),
Foreign Persons Registry ("RNE") or Driver's License ("CNH")
or, of cially recognized professional identity cards); and
>
Evidence of ownership of Natura's shares issued by the
bookkeeping financial institution and/or custodian agent during
the preceding three (3) days.
4.1.2. SHAREHOLDERS LEGAL ENTITIES
>
Certi ed copy of the latest version of the consolidated Articles of
Incorporation or by-laws and corporate documentation grating the
powers to represent the entity (minutes of the meeting in which
the current of cers were appointed and/or power of attorney);
>
Identification Card with photograph of the legal
representative(s); and
>
Evidence of ownership of Natura's shares issued by the
bookkeeping financial institution and/or custodian agent during
the preceding three (3) days.
4.1.3. INVESTMENT FUNDS
>
Certified copy of the latest version of the consolidated fund
rules and of the articles of incorporation or by-laws of its
manager, in addition to the corporate documentation grating the
powers to represent the entity (minutes of the meeting in which
the current officers were appointed and/or Power of attorney);
>
Identification Card with photograph of the legal
representative(s); and
>
Evidence of ownership of Natura's shares issued by the
bookkeeping financial institution and/or custodian agent during
the preceding three (3) days.
4. Procedures and Deadlines
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4.1.4. FOREIGN SHAREHOLDERS
Foreign Shareholders shall present the same documentation
applicable to Brazilian Shareholders, which shall be duly
notarized and legalized by a Brazilian Consulate, translated
into Portuguese by a public sworn translator and registered
at the competent Registry of Deeds and Documents.
4.2. REPRESENTATION BY POWER OF ATTORNEY
4.2.1. SHAREHOLDERS REPRESENTED BY
ELECTRONIC POWER OF ATTORNEY
In order to stimulate the participation of the Shareholders
in the Meetings, Natura will once more make available to
its Shareholders the electronic platform "Assembleia na
Web", by means of which a Power of attorney for purposes
of representation at any Meetings may be granted. In this
connection, the following steps shall be followed:
Registration: please go to the webpage www.natura.net/
investidor or www.assembleianaweb.com.br/ass/natura.
aspx and fill out the registration form. A user name
(login) and a password will be forwarded to the e-mail
mentioned in the registration to enable the access to the
digital environment of the Meetings.
During the process of registration of the Shareholders legal
entities, documents shall be requested to evidence the
relevant powers of the legal representative. Delivery of the
requested documents must occur no later than April 10,
2012. The address whereto the documents are to be sent
will be indicated after the registration of the Shareholder in
the electronic voting platform
Validation of the Registration and Receipt of the
Digital Certification: if you do not yet have a valid
digital certification, please go to the webpage www.
natura.net/investidor or www.assembleianaweb.com.
br/ass/natura.aspx, insert your CPF number and the
previously received password. Afterwards, please
follow the instructions on the site: fill out the form,
print it, sign and send the requested documents to the
designated address. Within a couple of days you will
receive your digital certification and directions on how
to use it to cast a vote.
The costs of the digital certifications issued by
Comprova/SERASA, pursuant to the present Manual, for
the Meetings to be held on April 13, 2012 shall be borne
by the Company.
Granting Powers of Attorney by electronic means: after
completing the foregoing steps, to exercise your voting
rights by means of a Power of Attorney, you should access
the webpage hwww.natura.net/investidor or
www.assembleianaweb.com.br/ass/natura.aspx, insert
your CPF number and the previously furnished password.
Upon accessing the digital environment of Natura's
Meetings, cast your vote and digitally sign the Power
of Attorney. You will receive evidence of the Power of
Attorney granted with your voting directions by e-mail.
A Shareholder may grant a Power of attorney through the
webpage www.natura.net/investidor, between March 14,
2012 and 11:00 p.m. of April 10, 2012.
TAMIRES ROMEIRO E ANNA TURELLI,
NATURA´S CONSUMERS
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4.2.2. SHAREHOLDERS REPRESENTED BY
HARD COPY POWER OF ATTORNEY
In addition to the possibility of granting a Power of
Attorney by electronic means, the Shareholders unable
to attend the Meetings in person may be represented
by an attorney in fact appointed less than one (1) year
before, as provided for in paragraph 1st of article 126
of the Brazilian Corporations Law, who may be another
Shareholder of the Company, a lawyer, a financial
institution or a manager of the Company.
In such case, the attorney in fact shall hold the power
of attorney with special powers of representation in
the Meetings and such power of attorney shall have the
Shareholder's signature certified by a notary public.
In the event that the Shareholder is unable to be present
at the Meetings or can not be represented by an attorney
in fact of his/her choice, the Company makes available
representatives to vote in lieu of the Shareholder in
accordance with his/her voting directions, as per the form
of Power of Attorney below:
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[SHAREHOLDER], [nationality], [marital status], [occupation], holder of the Identity Card No. [insert number and type
of identity], enrolled at the Individuals Taxpayers' Registry under CPF/MF nº [insert number of the CPF/MF], resident
and domiciled at [insert address], a shareholder of Natura Cosméticos S.A. ("Natura" or "Company") hereinafter, the
"Grantor", hereby appoint and constitute as attorneys-in-fact:
> Renata Benacchio Regino, a Brazilian citizen, single, lawyer, enrolled at the Brazilian Bar Association - São Paulo
Section under OAB/SP n.º 224.309 and at the CPF/MF under n.º 263.580.198-30 and Renato Chiodaro, a Brazilian
citizen, married, lawyer, enrolled at the Brazilian Bar Association - São Paulo Section under OAB/SP n.º 184.199 and at
the CPF/MF under nº 256.611.098-06, both having professional offices in the City and State of Paulo, at Rua Renato
Paes de Barros, 1.017, 7th floor, to vote IN FAVOR of the matters set forth in the agenda, in accordance with the
express directions given herein below by the Grantor;
> Gustavo Fiuza Quedevez, a Brazilian citizen, married, lawyer, enrolled at the Brazilian Bar Association - São Paulo
Section under OAB/SP n.º 304.708 and at the CPF/MF under n.º 052.567.817-40 and Milena Tavares Feneberg, a
Brazilian citizen, married, lawyer, enrolled at the Brazilian Bar - São Paulo Section under OAB/SP n.º 254.666 and at
the CPF/MF under nº 805.137.435-53, both having professional offices in the City and State of Paulo, at Rua Renato
Paes de Barros, 1.017, 7th floor, to vote AGAINST the matters set forth in the agenda, in accordance with the
express directions given herein below by the Grantor; and

> Felipe Augusto Gabrili Figueiredo, a Brazilian citizen, single, lawyer, enrolled at the Brazilian Bar Association - São
Paulo Section under OAB/SP n.º 242.069 and at the CPF/MF under n.º 308.184.888-16 and Priscila Palazzo, a Brazilian
citizen, single, lawyer, enrolled at the Brazilian Bar Association - São Paulo Section under OAB/SP n.º 196.534 and at
the CPF/MF. under nº 285.967.788-70, both having professional offices in the City and State of Paulo, at Rua Renato
Paes de Barros, 1.017, 7th floor, to ABSTAIN FROM VOTING the matters set forth in the agenda, in accordance with
the express directions given herein below by the Grantor.
The aforementioned attorneys-in-fact are hereinafter collectively called "Grantees" or individually, "Grantee" and
are hereby granted the necessary powers, acting either jointly or severally, (i) sign the Company's Shareholders'
Attendance Book or List and the minutes of the Extraordinary and Annual Shareholders Meeting of the Company,
which shall take place on April 13, 2012, at 10:20 a.m. ("Meetings"); (ii) to delegate, in whole or in part, the
powers granted hereby; (iii) to attend the Meetings, being authorized to review, discuss and vote on behalf of the
Grantor(s) the matters set forth in the Agenda, strictly in accordance with the directions set forth herein below:
Power of Attorney
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IN FAVOR
AGAINST
ABSTAIN
PLEASE CHECK THE SELECTED OPTION:
In Extraordinary Shareholders' Meeting:
(1) change article 5 of the Company's By-Laws, to re ect the capital increases approved by the Board
of Directors, within the limits of the authorized share capital, up to the date of the General Meeting;
(2) approve a comprehensive reform and consolidation of the Company's By-Laws, for purposes
of the following amendments and inclusions (references to the provisions of the By-Laws already
consider the numeration adopted in the proposal for the reform of the By-Laws, as made available
to the Shareholders in the website of the Brazilian Securities Commission ­ CVM, www.cvm.gov.br):
(a) conform the Company's By-Laws to the minimum mandatory clauses set forth in the Novo
Mercado Listing Segment Regulation, by means of the amendment and/or inclusion of the following
provisions in the By-Laws: inclusion of the sole paragraph to article 1, inclusion of the sole paragraph
to article 5, amendment to paragraph 2 of article 13, amendment to the head clause and paragraph
1 of article 16, inclusion of paragraph 6 to article 16, amendment to item XXIII of article 20, inclusion
of item XXVI to article 20, amendment to paragraph 3 of article 26, amendment to article 30,
amendment to article 31, amendment to article 32, inclusion of article 33, amendment to article
34, amendment to article 35, amendment to article 36, inclusion of paragraphs 1 and 2 to article
36, amendment to article 37, inclusion of article 38, amendment to article 40, inclusion of article 41,
inclusion of article 42, inclusion of article 43 and amendment to article 45;
(b) improve the wording of article 6;
(c) exclude the former paragraph 1 from article 6, as its provisions are already addressed under
item XV of article 20 of the By-Laws;
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IN FAVOR
AGAINST
ABSTAIN
(d) improve the wording of items I and V of article 12;
(e) amend the head clause of article 16, to increase the maximum number of Directors, from 7 to 9;
(f) exclude paragraph 2 from article 16, as its provisions are already addressed under article 17 of
the By-Laws;
(g) exclude paragraph 3 from article 16, as its provisions are already addressed under paragraphs
1 and 3 of article 13 of the By-Laws;
(h) amend the wording of article 18, so that the number of Co-Chairmen of the Board of
Directors is limited to a maximum of 3;
(i) exclude paragraph 2 from article 18, as its provisions are in con ict with the provisions in
paragraph 1 of article 15 of the By-Laws, so that, as a result, the Co-Chairman presiding a meeting
of the Board of Directors shall have a casting vote, in case of a deadlock;
(j) amend the wording of former paragraph 3 of article 18, to clarify that, in case of permanent
absence of a Director, a General Meeting of Shareholders shall be convened to elect its replacement;
(k) amend the head clause and paragraph 3, and include paragraph 4 to article 19, to enable
greater exibility and to further detail the non-physical participation in the meetings of the Board
of Directors and the applicable procedure in case of temporary absence;
PLEASE CHECK THE SELECTED OPTION:
In Extraordinary Shareholders' Meeting:
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IN FAVOR
AGAINST
ABSTAIN
(l) amend items X, XII, XV, XVIII, XX and XXII of article 20 and therein include an item XXVII, to
improve their wording and conform it to the provisions of the Brazilian Corporations Law;
(m) exclude part of paragraph 1 of article 21, as its provisions are already addressed under paragraph 3 of
article 13 of the By-Laws;
(n) amend the wording of article 22, to include references to the form of representation of
the Company and to comply with the applicable amounts to which action by the Company's
Of cers is limited;
(o) amend paragraph 3 of article 25, to improve its wording;
(p) amend paragraph 5 of article 28 to improve its wording and conform it to the Brazilian
Corporations Law.
PLEASE CHECK THE SELECTED OPTION:
In Extraordinary Shareholders' Meeting:
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IN FAVOR
AGAINST
ABSTAIN
PLEASE CHECK THE SELECTED OPTION:
In the Annual General Meeting:
(1) analyze the accounts of the Company's management, as well as discuss and vote the Financial
Statement in respect of the scal year ended on December 31, 2011;
(2) approve the proposals for the 2012 annual capital budget and for the allocation of the net
pro ts accrued in the scal year ended on December 31, 2011, as well as deliberate upon the
distribution of dividends and the payment of interest on net equity;
(3) elect the Board of Directors of the Company;
(4) set the global compensation of the Company's Directors and Of cers, to be paid within the
period ending on the Annual General Meeting that will deliberate upon the nancial statement of
the scal year ended on December 31, 2012.
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The powers granted hereby are limited to attending
the Company's Meetings and to casting a vote
in accordance with the aforementioned voting
directions; the Grantees have neither the power nor
the obligation to take any other action that are not
required for the purpose of complying the present
Power of attorney. The Proxy holders are authorized
to refrain from voting any resolution or action for
which they have not received, at their sole discretion,
suf ciently speci c voting directions. The Grantor shall
indemnify and hold the aforementioned Proxy holders
appointed hereby harmless and released from any
and all claims, disputes, demands, loss or damage of
whatsoever nature, arising out of the compliance with
the present Power of attorney, except in respect of
any act performed with abuse or excess of this Power
of attorney, as per the applicable legislation in force.
The present Power of attorney as granted shall
be deemed automatically revoked, and the terms
contemplated herein shall become null and void, in
the event of the grant of a Power of attorney by
means of the electronic platform "WebMeeting" on
a subsequent date, such latest Power of attorney
becoming effective for all legal purposes and effects.
The present instrument is valid solely for the Meetings
of the Company as aforesaid, whether on rst or on
second call.
[Place], [date]
[Name of the Shareholder]
CPF: [CPF]
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4.2.2.1. DELIVERY OF DOCUMENTS
In case Powers of Attorney are granted in hard copies, we request that the
respective originals or certi ed copies of the documents listed in items 4.1.1.,
4.1.2. or 4.1.3., as applicable, be delivered as soon as possible from March 12
up to and including April 10, 2012 at the Company's branch of ce located at
Avenida Juruá, n.º 253, 3rd oor, in the city of Barueri, State of São Paulo, ZIP
Code 06455-010, to the attention of the Investors Relations Manager.
In case of doubt, please contact the Investors Relations Manager of Natura via
e-mail (relacoescominvestidores@natura.net) or by phone +55 (11) 4196-1421.
4.3. PUBLIC REQUEST OF POWER OF ATTORNEY
Shareholders holding half per cent (0,5%) or more of the capital stock
may include requests for a Power of Attorney in the electronic platform
"Assembleia na Web", pursuant to the provisions of the Brazilian
Corporations Law and of CVM Instruction 481.
Public requests for a Power of attorney shall be accompanied with a form
of the Power of Attorney, as well as with the information and further
documents required by CVM Instruction 481, particularly in its Exhibit 23,
and delivered at the Company's branch of ce located at Avenida Juruá, n.º
253, 3rd oor, in the city of Barueri, State of São Paulo, ZIP Code 06455-
010, to the attention of the Investors Relations Manager.
The Company and its manager are not liable for the information contained
in public requests for a Power of Attorney made by the Shareholders.
The Company shall comply with the request within up to two (2) business
days following the date of receipt of the public request of a Power of
Attorney formulated by the Shareholders, with the same emphasis in the
electronic platform "Assembleia na Web" given to any other document
made available by the Company.
NELSON FERREIRA E CRISTIANE UEDA,
NATURA´S EMPLOYEES
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5. Call Notice
EXTRAORDINARY AND ANNUAL GENERAL MEETINGS
OF SHAREHOLDERS
NATURA COSMÉTICOS S.A.
CNPJ/MF No. 71.673.990/0001-77
NIRE 35.300.143.183
Publicly-Held Company
The Board of Directors of NATURA COSMÉTICOS S.A. ("Company"), by
its Co-Chairman, Mr. Pedro Luiz Barreiros Passos, is honored to invite the
Shareholders of the Company for the Extraordinary and Annual General
Meetings, to be held, cumulatively, at 10:20 a.m., on April 13, 2012, at the
Company's headquarters, located in the city of Itapecerica da Serra, State of São
Paulo, at Rodovia Régis Bittencourt, w/o no., Km 293, Building I, with the purpose
of deliberating upon the following agenda:
IN THE EXTRAORDINARY GENERAL MEETING:
(1) change article 5 of the Company's By-Laws, to re ect the capital increases
approved by the Board of Directors, within the limits of the authorized share
capital, up to the date of the General Meeting; and (2) approve a comprehensive
reform and consolidation of the Company's By-Laws, for purposes of the
following amendments and inclusions (references to the provisions of the
By-Laws already consider the numeration adopted in the proposal for the
reform of the By-Laws, as made available to the Shareholders in the website
of the Brazilian Securities Commission ­ CVM, www.cvm.gov.br): (a) conform
the Company's By-Laws to the minimum mandatory clauses set forth in the
Novo Mercado Listing Segment Regulation, by means of the amendment and/
or inclusion of the following provisions in the By-Laws: inclusion of the sole
paragraph to article 1, inclusion of the sole paragraph to article 5, amendment
to paragraph 2 of article 13, amendment to the head clause and paragraph 1
of article 16, inclusion of paragraph 6 to article 16, amendment to item XXIII
of article 20, inclusion of item XXVI to article 20, amendment to paragraph 3
of article 26, amendment to article 30, amendment to article 31, amendment
to article 32, inclusion of article 33, amendment to article 34, amendment
to article 35, amendment to article 36, inclusion of paragraphs 1 and 2 to
article 36, amendment to article 37, inclusion of article 38, amendment to
article 40, inclusion of article 41, inclusion of article 42, inclusion of article
43 and amendment to article 45; (b) improve the wording of article 6; (c)
exclude the former paragraph 1 from article 6, as its provisions are already
addressed under item XV of article 20 of the By-Laws; (d) improve the
wording of items I and V of article 12; (e) amend the head clause of article
16, to increase the maximum number of Directors, from 7 to 9; (f) exclude
paragraph 2 from article 16, as its provisions are already addressed under
article 17 of the By-Laws; (g) exclude paragraph 3 from article 16, as its
provisions are already addressed under paragraphs 1 and 3 of article 13 of
the By-Laws; (h) amend the wording of article 18, so that the number of
Co-Chairmen of the Board of Directors is limited to a maximum of 3; (i)
exclude paragraph 2 from article 18, as its provisions are in con ict with
the provisions in paragraph 1 of article 15 of the By-Laws, so that, as a
result, the Co-Chairman presiding a meeting of the Board of Directors shall
have a casting vote, in case of a deadlock; (j) amend the wording of former
paragraph 3 of article 18, to clarify that, in case of permanent absence of
a Director, a General Meeting of Shareholders shall be convened to elect
its replacement; (k) amend the head clause and paragraph 3, and include
paragraph 4 to article 19, to enable greater exibility and to further detail
the non-physical participation in the meetings of the Board of Directors
and the applicable procedure in case of temporary absence; (l) amend
items X, XII, XV, XVIII, XX and XXII of article 20 and therein include an
item XXVII, to improve their wording and conform it to the provisions of
the Brazilian Corporations Law; (m) exclude part of paragraph 1 of article
21, as its provisions are already addressed under paragraph 3 of article 13
of the By-Laws; (n) amend the wording of article 22, to include references
to the form of representation of the Company and to compliance with the
applicable amounts to which action by the Company's Of cers is limited;
(o) amend paragraph 3 of article 25, to improve its wording; (p) amend
paragraph 5 of article 28 to improve its wording and conform it to the
Brazilian Corporations Law.
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22
IN THE ANNUAL GENERAL MEETING:
(1) analyze the accounts of the Company's management, as well as discuss
and vote the Financial Statement in respect of the scal year ended on
December 31, 2011; (2) approve the proposals for the 2012 annual capital
budget and for the allocation of the net pro ts accrued in the scal year
ended on December 31, 2011, as well as deliberating upon the distribution
of dividends and the payment of interest on net equity; (3) elect the Board
of Directors of the Company; (4) set the global compensation of the
Company's Directors and Of cers, to be paid within the period ending on
the Annual General Meeting that will deliberate upon the nancial statement
of the scal year ended on December 31, 2012.
General Information
- The legal holders of shares issued by the Company may participate in the
General Meetings by themselves, their legal representatives or attorneys-
in-fact, provided that such shares are recorded in their name before the
depositary nancial institution responsible for the service of entries for the
Company's shares, Banco Itaú S.A., in accordance with article 126 of the
Brazilian Corporations Law.
- The shareholders must be present in advance of the scheduled time, as set
forth in this Call Notice, with an updated receipt of the shares held by them,
such receipt being issued by the depositary nancial institution and/or by the
custodian agent, in the period of 48 hours preceding the General Meetings,
together with the following documents: (i) Individuals: identi cation document
with a photograph; (ii) Legal Entities: certi ed copies of their current consolidated
by-laws or articles of association and the appropriate corporate documentation
proving the powers of their representatives (corporate resolutions electing the
of cers and/or power of attorney); as well as identi cation document with
a photograph of the legal representative(s); (iii) Investment Funds: certi ed
copies of their current consolidated regulations and of their manager's by-laws
or articles of association, as well as the appropriate corporate documentation
proving the powers of their representatives (corporate resolutions electing the
of cers and/or power of attorney); as well as identi cation document with a
photograph of the legal representative(s).
- We kindly request that the shareholders le the instruments of power of attorney,
granting special powers for representation in the General Meetings, at the Company's
branch located in the city of Barueri, State of São Paulo, at Avenida Juruá, No. 253,
3rd oor, CEP 06455-010, with the Investors Relations Management.
- All the documentation in respect of the matters to be deliberated in the
Extraordinary and Annual General Meetings are available to the shareholders, at
the Company's headquarters, on its Investors Relations website (www.natura.net/
investidor), on the Brazilian Securities Commission ­ CVM website (www.cvm.gov.
br) and on the BM&FBovespa website (www.bmfbovespa.com.br), in accordance
with article 133 and paragraph 3 of article 135 of the Brazilian Corporations Law,
and with article 6 of the CVM Instruction No. 481/09.
- To better organize the agenda of the General Meeting, the voting process in respect
of the proposed amendments and inclusions to the By-Laws, as described above in
item 2 of the Extraordinary General Meeting's agenda, will be conducted separately
for each of the subject matters listed in the above-mentioned item. In addition,
any shareholder may request that any speci c provision subject to a proposed
amendment or inclusion is voted separately.
- The minimum percentage for requesting the adoption of the multiple voting process
for the election of the Board of Directors is of 5% ( ve per cent), pursuant to article
3 of CVM Instruction No. 165/91, as amended.
- The shareholders may nd all the information required for better understanding
the matters above, as well as the instructions for granting power of attorney, in
the Manual Intended to Provide Information for Purposes of Participation in the
Extraordinary and Annual Shareholders Meetings, available on the Company's
Investors Relations website (www.natura.net/investidor), on the Brazilian Securities
Commission ­ CVM website (www.cvm.gov.br) and on the BM&FBovespa website
(www.bmfbovespa.com.br).
Itapecerica da Serra, March 8, 2012
PEDRO LUIZ BARREIROS PASSOS
Co-Chairman of the Board of Directors
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23

6. Information on the Matters Submitted for Resolution Purposes
6.1. EXTRAORDINARY SHAREHOLDERS MEETING
An Extraordinary Shareholders Meeting of Natura was called to resolve on the
following matters:
(1) change article 5 of the Company's By-Laws, to reflect the capital increases approved
by the Board of Directors, within the limits of the authorized share capital, up to the
date of the General Meeting;
In meetings held on July 20, 2011 and August 31, 2011, the Board of Directors approved
capital increases, within the limits of the authorized capital, to meet the exercise of the
stock options granted to managers and employees of the Company and of the entities
directly or indirectly controlled by it, within the scope of the Purchase or Subscription
Option Plans of Common Stocks of the Company's Issuance.
As such, the capital stock of the Company increased from R$418,061,071.80 (four
hundred and eighteen million, sixty-one thousand, seventy-one Reais and eighty cents),
to R$427,072,707.32 (four hundred and twenty-seven million, seventy-two thousand,
seven hundred and seven Reais and thirty-two cents), as of December 31, 2011.
The number of registered common shares, with no par value, subscribed for and
paid-in went up from 430,881,416 (four hundred and thirty million, eight hundred
and eighty-one thousand, four hundred and sixteen) registered common shares, with
no par value, to 431,239,264 (four hundred and thirty one million, two hundred and
thirty-nine thousand, two hundred and sixty-four) registered common shares, with no
par value, as of December 31, 2011.
Likewise, the balance of the authorized capital went from 10,428,709 (ten million, four
hundred and twenty-eight thousand, seven hundred and nine) registered common
shares, with no par value, to 10,070,861 (ten million, seventy thousand, eight
hundred and sixty-one) registered common shares, with no par value, as of
December 31, 2011.
As a result of the foregoing, the proposed wording for the heading of article 5th
and the heading of article 6th of the Articles of Incorporation of the Company
is the following:
"Article 5 - The capital stock of the Company, fully subscribed to and paid in, is
four hundred twenty-seven million, seventy-two thousand, seven hundred and
seven Brazilian Reais and thirty-two centavos (R$ 427,072,707.32), divided into
four hundred thirty-one million, two hundred thirty-nine thousand, two hundred
sixty-four (431,239,264 ) registered common shares, with no par value.
Article 6 - The Company is hereby authorized to increase its capital stock,
irrespective of an amendment to these By-laws, up to four hundred forty-one
million, three hundred ten thousand, one hundred twenty-five (441,310,125)
common shares, with no par value, upon a resolution of the Board of Directors,
which will establish the terms of issuance, including as to price and payment."
(2) approve a comprehensive reform and consolidation of the Company's By-
Laws, for purposes of the following amendments and inclusions (references to
the provisions of the By-Laws already consider the numeration adopted in the
proposal for the reform of the By-Laws, as made available to the Shareholders
in the website of the Brazilian Securities Commission ­ CVM, www.cvm.gov.
br): (a) conform the Company's By-Laws to the minimum mandatory clauses
set forth in the Novo Mercado Listing Segment Regulation, by means of the
amendment and/or inclusion of the following provisions in the By-Laws: inclusion
of the sole paragraph to article 1, inclusion of the sole paragraph to article 5,
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24
amendment to paragraph 2 of article 13, amendment to the head clause and
paragraph 1 of article 16, inclusion of paragraph 6 to article 16, amendment
to item XXIII of article 20, inclusion of item XXVI to article 20, amendment
to paragraph 3 of article 26, amendment to article 30, amendment to article
31, amendment to article 32, inclusion of article 33, amendment to article 34,
amendment to article 35, amendment to article 36, inclusion of paragraphs 1
and 2 to article 36, amendment to article 37, inclusion of article 38, amendment
to article 40, inclusion of article 41, inclusion of article 42, inclusion of article 43
and amendment to article 45; (b) improve the wording of article 6; (c) exclude
the former paragraph 1 from article 6, as its provisions are already addressed
under item XV of article 20 of the By-Laws; ; (d) improve the wording of items
I and V of article 12; (e) amend the head clause of article 16, to increase the
maximum number of Directors, from 7 to 9; (f) exclude paragraph 2 from
article 16, as its provisions are already addressed under article 17 of the By-
Laws; (g) exclude paragraph 3 from article 16, as its provisions are already
addressed under paragraphs 1 and 3 of article 13 of the By-Laws; (h) amend
the wording of article 18, so that the number of Co-Chairmen of the Board of
Directors is limited to a maximum of 3; (i) exclude paragraph 2 from article 18,
as its provisions are in conflict with the provisions in paragraph 1 of article 15
of the By-Laws, so that, as a result, the Co-Chairman presiding a meeting of the
Board of Directors shall have a casting vote, in case of a deadlock; (j) amend the
wording of former paragraph 3 of article 18, to clarify that, in case of permanent
absence of a Director, a General Meeting of Shareholders shall be convened to
elect its replacement; (k) amend the head clause and paragraph 3, and include
paragraph 4 to article 19, to enable greater flexibility and to further detail the
non-physical participation in the meetings of the Board of Directors and the
applicable procedure in case of temporary absence; (l) amend items X, XII, XV,
XVIII, XX and XXII of article 20 and therein include an item XXVII, to improve
their wording and conform it to the provisions of the Brazilian Corporations
Law; (m) exclude part of paragraph 1 of article 21, as its provisions are already
addressed under paragraph 3 of article 13 of the By-Laws; (n) amend the
wording of article 22, to include references to the form of representation
of the Company and to compliance with the applicable amounts to which
action by the Company's Officers is limited; (o) amend paragraph 3 of article
25, to improve its wording; (p) amend paragraph 5 of article 28 to improve
its wording and conform it to the Brazilian Corporations Law.
For purposes of elucidating and affording a better clarification on the
aforementioned matter, we prepared a comparative table containing each
one of the proposed amendments to the By-Laws and their respective
justifications, as well as the proposed restated version. Such comparative
table and the restated version constitute Exhibits to the present Manual in
the form of Exhibit I and Exhibit II, respectively.
6.1.1. DOCUMENTS RELATED MATTERS TO BE
RESOLVED UPON AT THE EXTRAORDINARY
SHAREHOLDERS MEETING:
Documents pertaining to the abovementioned matters are available to
the Shareholders at the following electronic addresses: www.natura.net/
investidor, www.cvm.gov.br and www.bmfbovespa.com.br, as well as at the
registered offices of the Company.
> Comparative table of the proposed amendments to the By-Laws and
their respective justifications.
> Proposed restated version of the By-Laws
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25

R$ 744.049.778,89
R$ 5.973.172,00
R$ 659.569.934,64
R$ 59.883.006,26
R$ 18.623.665,99
LUCRO LÍQUIDO DO EXERCÍCIO
Reserva para Incentivos Fiscais
(Subvenção para Investimentos)
DESTINAÇÕES:
Dividendos
Juros Sobre Capital Próprio (valor bruto)
Reserva de Retenção de Lucros
6.2. ANNUAL SHAREHOLDERS MEETING
(1) analyze the accounts of the Company's management, as well as discuss and
vote the Financial Statement in respect of the fiscal year ended on December
31, 2011;
The Managements' Report and the Financial Statements of the Company, duly
accompanied with pertinent explanatory notes and independent auditor's
report, referring to the fiscal year ended December 31, 2011, published on
February 16, 2012 on the "Valor Econômico" newspaper and on the "Diário
Oficial do Estado de São Paulo", were approved by the Board of Directors in a
meeting held on February 15, 2012.
Documents of the Management, listed herein below, are available for consultation
purposes at Natura's Investors Relations webpage (www.natura.net/investidor),
at CVM's webpage (www.cvm.gov.br) and at BM&FBovespa's webpage (www.
bmfbovespa.com.br).
> Managements' Report;
> Financial Statements;
> Managements' Comments on the financial condition of the Company, pursuant
to item 10 of the Reference Form and to the provisions of CVM Instruction
481, that are also included in Exhibit III of this Manual; and
> Independents Auditors' Opinion.
(2) approve the proposals for the 2012 annual capital budget and for the
allocation of the net profits accrued in the fiscal year ended on December
31, 2011, as well as deliberating upon the distribution of dividends and the
payment of interest on net equity;
We propose to allocate the amount of R$250,630,238.54 (two hundred and
fifty million six hundred and thirty thousand, two hundred and thirty-eight
Reais and fifty-four cents) to the capital budget of the current year, including
property, plant & equipment and working capital, of which: (a) R$3,530,238.54
(three million, five hundred and thirty thousand, two hundred and thirty-
eight Reais and fifty-four cents) from the Retained Earnings Reserve, and
(b) R$247,100,000.00 (two hundred forty-seven million and one hundred
thousand Reais) from third parties' funds.
The net income earned by the Company, corresponding to the income of
the fiscal year after deduction of the provision for Income Tax and statutory
equity interests, was of R$830,900,897.69 (eight hundred and thirty million,
nine hundred thousand, eight hundred and ninety-seven Reais and sixty-nine
cents) in the fiscal year ended December 31, 2011. The Management proposes
the following allocation:
NET INCOME OF THE FISCAL YEAR
R$830,900,897.69
Tax Incentives Reserve (Investment Subsidy)
R$ 3,677,005.24
Allocations:
Dividends
R$ 762,626,269.97
Interest on Own Equity (gross value)
R$ 61,133,398.49
Retained Earnings Reserve
R$ 3,464,223.99
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26

R$ 744.049.778,89
R$ 5.973.172,00
R$ 659.569.934,64
R$ 59.883.006,26
R$ 18.623.665,99
LUCRO LÍQUIDO DO EXERCÍCIO
Reserva para Incentivos Fiscais
(Subvenção para Investimentos)
DESTINAÇÕES:
Dividendos
Juros Sobre Capital Próprio (valor bruto)
Reserva de Retenção de Lucros
The foregoing amounts take into account the changes occurred since the
Meeting of the Board of Directors held on February 15, 2012 until the base-
date for the payment of dividends and Interest on Own Equity, on February
24, 2012, maintaining the amount to be paid per share.
For further information on this matter, please refer to the document appearing
in Exhibit IV of this Manual (Information on Income Allocation Proposal
required by CVM Instruction 481).
(3) elect the Board of Directors of the Company;
The current Board of Directors was elected by the Annual Shareholders
Meeting held on April 8, 2011, with a term of tenure until the 2012 General
Meeting. The current Management designates the names listed herein below
to compose the Board of Directors, with a term of tenure until the Annual
Shareholders Meeting to be held in 2013.
Reinstatement: Antônio Luiz da Cunha Seabra, Pedro Luiz Barreiros Passos,
Guilherme Peirão Leal, Júlio Moura Neto, Luiz Ernesto Gemignani and
Marcos de Barros Lisboa.
New Appointment: Raul Gabriel Beer Roth, Plínio Villares Musetti and Roberto
de Oliveira Lima.
The following are nominees to the office of independent directors: Messrs. Luiz
Ernesto Gemignani, Marcos de Barros Lisboa and Roberto de Oliveira Lima.
For further information on the nominees to the office of Director, please
see the document included in Exhibit V of this Manual (Information on
the Managers).
The Shareholders of the Company, representing at least five per cent (5%) of
the capital stock, may request, in writing, to the Company, the adoption of a
multiple vote procedure, pursuant to the provisions of CVM Instruction
165 (as amended by CVM Instruction 282).
Any Shareholder willing to request the adoption of a multiple vote
procedure shall send a written notice to the Company, until 10:20
a.m. on April 11, 2012 to be delivered at the branch office of the
Company, located at Avenida Juruá, n.º 253, 3rd floor, city of Barueri,
State of São Paulo, ZIP Code 06455-010, to the attention of the
Investors Relations Management.
Furthermore, the Shareholders holding, either severally or as a block,
subject to the provisions of article 141 of the Brazilian Corporations
Law, fifteen per cent (15%) or more of the Company's shares shall
be entitled to elect, by means of a separate vote, one member of the
Board of Directors.
(4) set the global compensation of the Company's Directors and
Officers, to be paid until the Annual General Meeting that will
deliberate upon the financial statement of the fiscal year ended on
December 31, 2012.
The Company's Management proposes the setting of the global
compensation of the Managers, to be paid as of the date of its approval
by the Shareholders in the Annual Shareholders Meeting to be held on
April 13, 2012, until the conduction of the Annual Shareholders Meeting
in which the Shareholders of the Company shall vote the Financial
Statements of the fiscal year to end on December 31, 2012, in the
aggregate amount of R$22,124,765.90 (twenty-two million, one hundred
twenty-four thousand, seven hundred sixty-five Reais and ninety cents).
For further information on the remuneration of the Managers of the
Company, please see the document included in Exhibit VI of this Manual
(Remuneration of the Managers).
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27
relevant links
www.natura.net: Natura's website
www.natura.net/investidor: Natura's Investors Relations
www.cvm.gov.br: Legislation applicable to Joint Stock Companies and Corporations and
Information on the Company
www.bmfbovespa.com.br: Novo Mercado Segment Listing Rules
www.assembleianaweb.com.br/ass/natura.aspx: Registration for purposes of granting electronic
powers of attorney
www.ibgc.org.br: Brazilian Corporate Governance Institute
www.abihpec.org.br: Associação Brasileira da Indústria de Higiene Pessoal, Perfumaria and
Cosméticos
- the Brazilian Association of the Personal care, Perfumery and Cosmetics Industry
www.abevd.org.br: Associação Brasileira de Empresas de Vendas Diretas - the Brazilian
Association of Direct Sales Companies.
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exhibits
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EXHIBIT I ­ COMPARATIVE TABLE OF THE PROPOSED AMENDMENTS TO THE BY-LAWS AND THEIR RESPECTIVE
JUSTIFICATIONS
Revised Wording of By-laws ­ Natura Cosméticos S.A.
CURRENT WORDING OF BY-LAWS
PROPOSED NEW WORDING OF BY-LAWS
JUSTIFICATION
Article 1
(...)
Article 1
(...)
Sole Paragraph ­ Given that the Company has joined
the special listing segment known as New Market,
maintained by BM&FBOVESPA S.A. ­ Bolsa de
Valores, Mercadorias e Futuros ("BM&FBOVESPA"),
the Company, its shareholders, Managers and Audit
Committee members, if any, are also subject to the
provisions of the New Market Listing Regulations of
BM&FBOVESPA ("New Market Regulations").
Adjusted to the minimum requirements of the
New Market Regulations.
1
Article 5 Article 5 The capital stock of the
Company, fully subscribed to and paid in, is four
hundred eighteen million, sixty one thousand,
seventy one Brazilian Reais and eighty centavos
(R$ 418.061.071,80), divided into four hundred
thirty million, eight hundred eighty one
thousand, four hundred sixteen (430.881.416 )
registered common shares, with no par value.
[Note: most recent amount of capital stock
confirmed at the meeting of the Board of
Article 5 The capital stock of the Company, fully
subscribed to and paid in, is four hundred
twentyseven million, seventy-two thousand, seven
hundred and seven Brazilian Reals and thirty-two
centavos (R$ 427,072,707.32), divided into four
hundred thirty-one million, two hundred thirty-nine
thousand, two hundred sixty-four (431,239,264 )
registered common shares, with no par value.
Language updated to reflect the capital increases
approved by the Board of Directors within the
limit of the authorized capital up to the date of the
Shareholders' Meeting.
1
The management of the Company is proposing, as part of the amendment to the By-laws, an adjustment of its provisions to the minimum requirements of the
New Market Listing Regulations.
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2
Directors dated 08/31/11: R$ 427,072,707.32,
divided into 431,239,264 shares]

[No counterpart provision.]
Sole Paragraph - The Company may not issue
preferred shares.
Adjusted to the minimum requirements of the
New Market Regulations.
Article 6 The Company is hereby authorized to
increase its capital stock up to eleven million, two
hundred eighty-one thousand, four hundred
twenty-six (11,281,426) common shares, with no
par value.
[Note: balance of authorized capital after
confirmation of capital stock at the meeting of
the Board of Directors dated 08/31/11:
10,070,861 shares]
Article 6 The Company is hereby authorized to
increase its capital stock, irrespective of an
amendment to these By-laws, up to four hundred
forty-one million, three hundred ten thousand, one
hundred twenty-five (441,310,125) common shares,
with no par value, upon a resolution of the Board of
Directors, which will establish the terms of issuance,
including as to price and payment.
Improved wording of the Article dealing with the
limit of authorized capital, which is now stated as a
maximum number of shares that can be issued by a
decision of the Board of Directors, up to such
limit. The limit now in place, however, remains
unchanged.
Paragraph 1 Within the limit authorized in this
Article, the Company may upon a resolution of
the Board of Directors increase its capital stock
irrespective of an amendment to these By-laws.
The Board of Directors will establish the terms
for issuance of shares, including as to price and
payment.
Paragraph 2 - Within the limit of the authorized
capital, the Board of Directors may take action
on the issuance of warrants.
Paragraph 1 Within the limits of the authorized
capital, the Board of Directors may approve the
issuance of warrants and convertible debentures.
Improved wording to eliminate Paragraph 1 as a
redundancy in view of the provision in Article 20,
item XV.
As contemplated in the Corporations Law, as
amended by Law 12,431/11, it is now proposed
that the Board of Directors have authority to take
action on the issuance of convertible debentures,
within the limit of the authorized capital.
Paragraph 3 The Board of Directors of the
Company may grant stock purchase or
subscription options, under the Stock Purchase
or Subscription Option Plans approved by the
Shareholders' Meeting, to the directors,
executive officers and employees of the
Paragraph 2 The Board of Directors may grant stock
purchase or subscription options, under the Stock
Purchase or Subscription Option Plans approved by
the Shareholders' Meeting, to the Managers and
employees of the Company, as well as to the
Managers and employees of other companies directly
Improved wording to provide that an award of
stock purchase options must also conform, as the
case may be, to the balance of treasury shares so
as to satisfy exercise of options, as required by law
and applicable regulations.
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3
Company, as well as to the directors, executive
officers and employees of other companies
directly or indirectly controlled by the Company,
without preemptive rights to the shareholders at
the time of either issue or exercise of such
options, with due regard for the balance of the
authorized capital at the time of award of such
stock purchase or subscription options.
or indirectly controlled by the Company, without
preemptive rights to the shareholders at the time of
either issue or exercise of such options, with due
regard for the balance of the authorized capital at the
time of exercise of subscription options, and the
balance of treasury shares at the time of exercise of
purchase options.
Article 12
(...)
I. to elect and remove from office the members
of the Board of Directors;
Article 12
(...)
I. to elect and remove from office the members of the
Board of Directors and the members of the Audit
Committee, as the case may be;
Adjustment to the Corporations Law to mention
the authority of the Shareholders' Meeting to elect
the members of the Audit Committee, should the
Committee be convened.
V. to take action, based on a proposal submitted
by the management, on the allocation of the
income for the year and the distribution of
dividends;
V. to take action on the allocation of the net income
for the year and the distribution of dividends;
Improved wording.
Article 13
(...)
Paragraph 2° Investiture of the members of the
Board of Directors and the Board of Executive
Officers is contingent on execution of a Consent
of Manager, as provided in the New Market
Listing Regulations.
Article 13
(...)
Paragraph 2 Investiture of the members of the Board
of Directors and the Board of Executive Officers is
contingent on execution of a Consent of Manager, in
accordance with the terms of the New Market Listing
Regulations and applicable legal requirements.
Adjusted to the minimum requirements of the
New Market Regulations.
Article 16 The Board of Directors will be
composed of at least five (5) and no more than
seven (7) members, who will all be shareholders
elected by the Shareholders' Meeting, with a term
of office of up to two (2) years, reelection being
permitted.
Article 16 The Board of Directors will be composed
of at least five (5) and no more than nine (9)
members, who will be elected and removed by the
Shareholders' Meeting, with a unified term of office of
up to two (2) years, reelection being permitted.
Maximum number of directors increased from 7 to
9.
Wording also adjusted to minimum requirements
of the New Market Regulations.
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4
Paragraph 1° At least twenty percent (20%) of
the members of the Board of Directors will be
Independent Directors, as defined in the New
Market Listing Regulations.
Paragraph 1 Out of the members of the Board of
Directors, at least twenty percent (20%) will be
Independent Directors, as defined in the New Market
Regulations and as expressly stated in the minutes of
the Shareholders' Meeting that elects such
Independent Directors, provided further that a
director elected as permitted under Article 141,
Paragraphs 4 and 5 of Law 6,404/76 will also be
deemed an Independent Director. Should compliance
with the foregoing percentage requirement lead to a
fractional number of directors, the rounding
procedure described in the New Market Regulations
will be followed.
Adjusted to the minimum requirements of the
New Market Regulations.
Paragraph 2 At the Annual Shareholders' Meeting,
the shareholders will determine the number of
directors.
[Provision deleted.]
Proposed elimination of this provision as a
redundancy in view of the provision in Article 17.
Paragraph 3 The directors will take office by
executing a statement of acceptance of office
recorded in the appropriate book. The directors
will remain in office and in the discharge of their
duties until their replacements are elected, unless
otherwise decided by the Shareholders' Meeting.
[Provision deleted.]
Proposed elimination of this provision as a
redundancy in view of the provisions in Article 13,
Paragraphs 1 and 3.
[No counterpart provision.]
Paragraph 6 A single person may not concurrently
hold the offices of chairman of the Board of Directors
and President or Chief Executive Officer of the
Company.
Adjusted to the minimum requirements of the
New Market Regulations.
Article 18 The Board of Directors will have
three (3) co-chairmen, who will be elected by a
majority vote of the directors at the first meeting
of the Board held after investiture of the
Article 18 The Board of Directors will have up to
three (3) co-chairmen, who will be elected by a
majority vote of the directors at the first meeting of
the Board held after investiture of the directors, or
Language added to say that rather than necessarily
having 3 co-chairmen, the Board of Directors will
have "up to" 3 co-chairmen.
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5
directors, or whenever a resignation or vacancy
occurs.
whenever a resignation or vacancy occurs.
Paragraph 2 With respect to the resolutions of
the Board of Directors, no co-chairman will cast
a deciding vote, in the event of a tie vote.
[Provision deleted.]
Proposed elimination of this provision as it
conflicts with Article 15, Paragraph 1, which gives a
deciding vote to the co-chairman presiding over
the meeting.
Paragraph 3 In the event of impediment or
vacancy on the Board of Directors, the Board will
call a Shareholders' Meeting to fill the open
position.
Paragraph 2 In the event of a permanent impediment
or vacancy on the Board of Directors, the Board will
call a Shareholders' Meeting to fill the open position.
Improved wording to introduce a clear distinction
between temporary vacancy and permanent
vacancy.
Article 19 The Board of Directors will hold
regular meetings four (4) times a year, and may
hold special meetings whenever called by the co-
chairman selected as described in Paragraph 1 of
Article 18 hereof, or by a majority of directors.
The Board meetings, as an exception, may be
held by telephone conference, video conference,
e-mail or any other means of communication.
Article 19 The Board of Directors will hold regular
meetings four (4) times a year, and may hold special
meetings whenever called by the co-chairman selected
as described in Paragraph 1 of Article 18 hereof, or by
a majority of directors. The Board meetings, as an
exception, may be held by telephone conference,
video conference, e-mail or any other means of
communication that allows identification of each
director and simultaneous communication with all
other persons attending the meeting.
Intended to provide flexibility and better describe
remote participation in the meetings of the Board
of Directors.
Paragraph 3 At the meetings of the Board of
Directors, there shall be allowed an early vote
cast in writing as well as a vote cast by fax, e-mail
or any other means of communication, and any
director so voting will be deemed as present.
Paragraph 3 A director attending a meeting of the
Board of Directors by telephone conference, video
conference or other means of communication, as
aforesaid, will confirm its vote in a statement to be
sent to the chairman of the meeting by letter, fax, e-
mail or other means of communication that allows
identification of each director, promptly after the
closing of the meeting. Upon receipt of such
statement, the chairman will have full authority to
Intended to provide flexibility and better describe
remote participation in the meetings of the Board
of Directors.
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6
execute the minutes of the meeting on behalf of the
director in question.
[No counterpart provision.]
Paragraph 4 In the event of temporary absence of any
director, he or she may be substituted at Board
meetings by another director that he or she may have
expressly appointed under a specific power of
attorney, stating, among other things, the votes to be
cast on the items of the agenda for each meeting. In
such case, the substitute, in addition to his or her own
vote, will cast the vote previously indicated by the
absent director. Only an Independent Director may
substitute for an absent Independent Director.
Introduction of a specific provision to deal with
temporary vacancy.
Article 20
(...)
X. to consider the Management Report and the
accounts of the Board of Executive Officers, and
to take action on the submission thereof to the
Shareholders' Meeting;
Article 20
(...)
X. to issue an opinion on the Management Report and
the accounts of the Board of Executive Officers, and
to take action on the submission thereof to the
Shareholders' Meeting;
Improved wording.
XII. to approve the creation and termination of
subsidiaries and the taking of ownership interests
in other companies, in Brazil or abroad, as well as
the establishment of branch offices, warehouses,
offices and any other premises abroad;
XII. to approve the creation and dissolution of
subsidiaries and the taking of ownership interests in
other companies, in Brazil or abroad, as well as the
establishment of branch offices, warehouses, offices
and any other premises abroad;
Improved wording.
XV. to authorize the issuance of shares in the
Company within the limits authorized in Article 6
hereof, and to set the terms for any such
issuance of shares, including as to price and
payment, provided, further, that the Board may
exclude or reduce preemptive rights in the case
XV. to authorize the issuance of shares in the
Company within the limits authorized in Article 6
hereof, and to set the terms for any such issuance of
shares, including as to price and payment, provided,
further, that the Board may exclude preemptive rights
or reduce the time period for exercise thereof in the
Improved wording.
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7
of shares, convertible debentures and warrants to
be placed by way of sale on a stock exchange,
public subscription or tender offer, in keeping
with the provisions of law;
case of shares, convertible debentures and warrants
to be placed by way of sale on a stock exchange,
public subscription or tender offer, in keeping with the
provisions of law;
XVIII. to grant stock purchase or subscription
options, under Stock Purchase or Subscription
Option Plans adopted by the Shareholders'
Meeting, to the directors, executive officers and
employees of the Company, as well as to the
directors, executive officers and employees of
other companies directly or indirectly controlled
by the Company, without preemptive rights to
the shareholders at the time of either award or
exercise of such options, with due regard for the
balance of the authorized capital at the time of
award of such stock purchase or subscription
options;
XVIII. to grant stock purchase or subscription options,
under Stock Purchase or Subscription Option Plans
adopted by the Shareholders' Meeting, to the
Managers and employees of the Company, as well as
to the Managers and employees of other companies
directly or indirectly controlled by the Company,
without preemptive rights to the shareholders at the
time of either award or exercise of such options, with
due regard for the balance of the authorized capital at
the time of exercise of stock subscription options, and
the balance of treasury shares at the time of exercise
of the stock purchase options;
Improved wording to provide that an award of
stock purchase options must also conform, as the
case may be, to the balance of treasury shares so
as to satisfy exercise of options, as required by law
and applicable regulations.
XX. to take action on the issuance of ordinary,
unsecured non-convertible debentures;
XX. to take action on the issuance of debentures;
As contemplated in the Corporations Law, as
amended by Law 12,431/11, it is now proposed
that the Board of Directors have authority to take
action on the issuance of convertible debentures,
within the limit of the authorized capital.
XXII. to approve the levels of authority of the
executive officers as regards disposal or
encumbrance of fixed assets, and to require the
prior consent of the Board of Directors as a
condition for the validity of any such act, in those
cases that the Board may specify;
XXIII. to approve the levels of authority of the
executive officers as regards purchase of fixed
XXII. to approve the levels of authority and the
policies of the Board of Executive Officers, as well as
any modifications thereof, including rules governing (a)
acquisition of fixed assets and incurrence of financial
obligations; (b) encumbrance of fixed assets; (c) raising
of money and issuance of debt securities for the
raising of money, such as bonds, notes, commercial
papers, promissory notes and others generally used in
Consolidation of items XXII, XXIII and XXIV in a
single item, with no substantive change.
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8
assets and incurrence of other financial
obligations related to the investment projects of
the Company, and to require the prior consent
of the Board of Directors as a condition for the
validity of any such act, in those cases that the
Board may specify;
XXIV. to approve the levels of authority of the
executive officers for the raising of money and
issuance of debt securities for the raising of
money, such as bonds, notes, commercial papers
and others generally used in the marketplace, and
to approve the terms of issuance and redemption
thereof, and to require the prior consent of the
Board of Directors as a condition for the validity
of any such act, in those cases that the Board may
specify;
the marketplace, and to approve the terms of issuance
and redemption thereof, among other rules as to
levels of authority; and to oversee compliance with
such policies by the executive officers;
XXV. to define the list of three entities or firms
specialized in economic appraisal in charge of
preparing an appraisal report for the shares of
the Company in the case of cancellation of
registration as a publicly-held company or
delisting from the New Market;
XXIII. to define the list of three firms specialized in
economic appraisal in charge of preparing an appraisal
report for the shares of the Company in the case of a
Tender Offer for cancellation of registration as a
publicly-held company or delisting from the New
Market;
Adjusted to the minimum requirements of the
New Market Regulations.
[No counterpart provision.]
XXVI. to issue a favorable or unfavorable opinion on
any tender offer to purchase shares of the capital
stock of the Company, such opinion to be well-
reasoned and to be issued no later than fifteen (15)
days after publication of the notice for the tender
offer, covering at least (i) the convenience and
timeliness of the tender offer, in view of the interests
of the shareholders as a whole and the liquidity of
Adjusted to the minimum requirements of the
New Market Regulations.
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9
their securities; (ii) the repercussions of the tender
offer on the interests of the Company; (iii) the
strategic plans communicated by the offer or with
regard to the Company; and (iv) other points that the
Board of Directors may deem relevant, as well as any
information required by the applicable rules issued by
CVM;
[No counterpart provision.]
XXVII. to make decisions on (i) payment of interim
dividends, pursuant to Article 28, Paragraph 3; and (ii)
payment or credit to the shareholders of interest on
shareholders' equity during the fiscal year, in
accordance with applicable legislation.
Express mention in the list of Article 20 to
authority to distribute interim dividends and pay or
credit interest on shareholders' equity, as already
contemplated in the existing Article 28, Paragraph
3.
Article 21
(...)
Paragraph 1 The Board of Executive Officers will
be elected preferably on the date the Annual
Shareholders' Meeting is held, and investiture of
the newly-elected officers may coincide with
expiration of the term of office of their
predecessors.
Article 21
(...)
Paragraph 1 The Board of Executive Officers will be
elected preferably on the date the Annual
Shareholders' Meeting is held.
Proposed elimination of final portion of this
provision, given that the general rule in Article 13,
Paragraph 3 that the executive officers will retain
their positions until their successors take office
already addresses the point of the eliminated
language.
Article 22 The Board of Executive Officers will
have full authority to take all action required for
achievement of the corporate purposes, no
matter how special such action may be, including
authority to dispose of and encumber fixed
assets, waive rights and to settle and
compromise, subject to the applicable provisions
of law and these By-laws and the resolutions
adopted by the Shareholders' Meeting and the
Board of Directors. It is incumbent on the Board
Article 22 The Board of Executive Officers will have
full authority to take all action required for
representation of the Company and achievement of its
purposes, no matter how special such action may be,
including authority to waive rights and to settle and
compromise, subject to the applicable provisions of
law and these By-laws, the resolutions adopted by the
Shareholders' Meeting and the Board of Directors,
and the provisions and levels of authority specified by
the Board of Directors. In particular, it is incumbent
Improved wording particularly to mention
representation of the Company by its executive
officers as well as existence of levels of authority
set by the Board of Directors.
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10
of Executive Officers to manage and administer
the business of the Company, particularly:
on the Board of Executive Officers:
Article 25
(...)
Paragraph 3 The Board of Directors may
authorize a single executive officer or attorney in
fact to perform other acts that bind the
Company. The Board may also adopt criteria for
limitation of authorities and may define certain
cases where the Company will be represented by
a single executive officer or attorney in fact.
Article 25
(...)
Paragraph 3 The Board of Directors may authorize a
single executive officer or attorney in fact acting alone
to perform other acts that bind the Company. The
Board may also adopt criteria for limitation of
authorities and may define certain cases where the
Company will be represented by a single executive
officer or attorney in fact.
Improved wording.
Article 26
(...)
Paragraph 3° Investiture of the members of the
Audit Committee is contingent on execution of a
Consent of Audit Committee Member, as
provided in the New Market Listing Regulations.
Article 26
(...)
Paragraph 3° Investiture of the members of the Audit
Committee is contingent on execution of a Consent
of Audit Committee Member, in accordance with the
terms of the New Market Listing Regulations and with
applicable legal requirements.
Adjusted to the minimum requirements of the
New Market Regulations.
Article 28
(...)
Paragraph 5 The Board of Directors may pay or
credit interest on shareholders' equity, subject to
subsequent confirmation by the Annual
Shareholders' Meeting that reviews the financial
statements for the fiscal year in which such
interest was paid or credited.
Article 28
(...)
Paragraph 5 The Board of Directors may pay or credit
interest on shareholders' equity in accordance with
the provisions of prevailing regulations.
Improved wording and adjustment to the
Corporations Law.
Article 30 The sale of a controlling interest in
the Company in a single transaction or series of
successive transactions must be agreed upon
under a condition precedent or subsequent that
Article 30 The sale of a Controlling Interest in the
Company in a single transaction or series of
successive transactions must be agreed upon under a
condition precedent or subsequent that the Purchaser
Adjusted to the minimum requirements of the
New Market Regulations.
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11
the purchaser of controlling interest will make a
tender offer to purchase the shares of the
remaining shareholders, subject to the terms of,
and within the time limits prescribed by,
prevailing legislation and the New Market Listing
Regulations, so that such remaining shareholders
may receive the same treatment as accorded to
the Selling Controlling Shareholder.
will make a tender offer to purchase the remaining
shares of the Company, subject to the terms of, and
within the time limits prescribed by, prevailing
legislation and the New Market Listing Regulations, so
that the holders of such remaining shares may receive
the same treatment as accorded to the Selling
Controlling Shareholder.
Article 31 A tender offer as mentioned in the
preceding article will also be made:
Article 31 A tender offer as referred to in the
preceding article must also be made:
Adjusted to the minimum requirements of the
New Market Regulations.
I. upon assignment for financial consideration of
interests exercisable for newly-issued shares and
other securities or interests to convertible
securities that may result in the sale of a
controlling interest in the Company; and
I. upon assignment for financial consideration of
interests exercisable for newly-issued shares and
other securities or interests to convertible securities
that may result in the Sale of a Controlling Interest in
the Company; or
Adjusted to the minimum requirements of the
New Market Regulations.
II. in the event of sale of a controlling interest in a
company that holds controlling power over the
Company, in which case the selling controlling
shareholder will be required to disclose to
BOVESPA the value assigned to the Company in
such sale as well as the relevant supporting
documentation.
II. in the event of sale of a controlling interest in a
company that holds Controlling Power over the
Company, in which case the Selling Controlling
Shareholder will be required to disclose to
BM&FBOVESPA the value assigned to the Company in
such sale as well as the relevant supporting
documentation.
Adjusted to the minimum requirements of the
New Market Regulations.
Article 32 Any person that already owns shares
in the Company and acquires controlling power
over the Company as a result of a share purchase
agreement entered into with the controlling
shareholder for any number of shares will be
required:
Article 32 Any person that acquires Controlling
Power over the Company as a result of a share
purchase agreement entered into with the Controlling
Shareholder for any number of shares will be
required:
Adjusted to the minimum requirements of the
New Market Regulations.
II. to compensate those shareholders from whom
the person in question purchased shares of the
II. to pay, as stated below, a sum equivalent to the
difference between the tender offer price and the
Adjusted to the minimum requirements of the
New Market Regulations.
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12
Company on a stock exchange in the period of
six (6) months next preceding transfer of the
shares corresponding to a controlling interest in
the Company, and to pay to such shareholders
the difference, if any, between the price paid to
the Selling Controlling Shareholder and the
amount paid on the stock exchange for the
shares of the Company during the same period,
as duly adjusted for inflation from the date of
purchase of shares on the stock exchange up to
date of payment for the shares, according to the
IPCA index, as determined and published by the
Brazilian Institute of Geography and Statistics.
value per share paid for shares purchased on a stock
exchange within a period of six (6) months next
preceding the date of acquisition of Controlling
Power, duly adjusted for inflation up to the date of
payment. Said sum will be distributed among all
persons that sold shares of the Company on the
trading sessions where the Purchaser made
purchases, pro rata to the net daily selling balance
thereof, BM&FBOVESPA to arrange for such
distribution in accordance with its regulations.
[No counterpart provision.]
Article 33 For the purposes of these By-laws, the
following capitalized terms will have the following
meanings:
Adjusted to the minimum requirements of the
New Market Regulations.
[No counterpart provision.]
"Controlling Shareholder" and "Selling Controlling
Shareholder" have the meanings assigned to such
terms in the New Market Regulations.
[No counterpart provision.]
"Relevant Shareholder" means any person (including,
without limitation, any natural person or legal entity,
investment fund, joint ownership arrangement,
securities portfolio, pooling of interests or other
organization residing, domiciled or headquartered in
Brazil or abroad) or group of persons bound to a
Relevant Shareholder under a voting agreement
and/or representing the same interests as a Relevant
Shareholder, that subscribes to and/or purchases
shares of the Company. Examples of a person
representing the same interests as a Relevant
It is proposed that the definition of "Purchasing
Shareholder" no longer be used at its conflicts with
the new definitions in the New Market Regulations,
and that the definition of "Relevant Shareholder"
be used instead with respect to the procedures set
forth in Articles 34 and 35 of the By-laws.
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13
Shareholder include any person (i) that is directly or
indirectly controlled or managed by such Relevant
Shareholder, (ii) that controls or manages in any
manner such Relevant Shareholder, (iii) that is directly
or indirectly controlled or managed by any person
that directly or indirectly controls or manages such
Relevant Shareholder, (iv) in which the controlling
person of such Relevant Shareholder directly or
indirectly has an ownership interest equal to or
greater than thirty percent (30%), (v) in which such
Relevant Shareholder directly or indirectly holds an
ownership interest equal to or greater than thirty
percent (30%), or (v) that directly or indirectly holds
an ownership interest in such Relevant Shareholder
equal to or greater than thirty percent (30%).
"Managers" when used in the singular mean an
executive officer or director of the Company, and
when used in the plural mean the executive officers
and the directors of the Company collectively.
[No counterpart provision.]
"Purchaser" means a person to whom a Selling
Controlling Shareholder transfers Controlling Shares
in a Sale of a Controlling Interest in the Company.
[No counterpart provision.]
"Sale of a Controlling Interest in the Company" has
the meaning assigned to such term in the New Market
Regulations.
[No counterpart provision.]
"Independent Director" has the meaning assigned to
such term in the New Market Regulations.
[No counterpart provision.]
"Group of Shareholders" means a group of two or
more persons (a) bound by voting agreements or
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14
arrangements of any kind whatsoever, including a
shareholders' agreement, whether written or oral, and
whether directly or through a Controlled company, a
Controlling Person or a company under common
Control; or (b) having a relationship of Control among
themselves, whether directly or indirectly; or (c)
under Common Control
[No counterpart provision.]
"Controlling Power" (and the correlative terms
"Controlling",
"Controlled",
"under
Common
Control" or "Control") means the power actually
exercised to direct the corporate activities and guide
the operation of the bodies of the Company, whether
directly or indirectly, and whether de facto or de jure,
irrespective of ownership interest held. There will be
a relative presumption of control with respect to a
person or Group of Shareholders that owns shares
corresponding to an absolute majority of the votes
cast by the shareholders attending the three most
recent Shareholders' Meetings of the Company, even
though such person or Group of Shareholders may
not own shares representing an absolute majority of
the voting capital stock.
[No counterpart provision.]
"Economic Value" has the meaning assigned to such
term in the New Market Regulations.
Article 33 Any Purchasing Shareholder (as
defined in Paragraph 10 below) that acquires or
becomes the owner of shares of the capital stock
of the Company corresponding to twenty-five
percent (25%) or more of the total shares of the
capital stock of the Company must, within no
Article 34 Any Relevant Shareholder that acquires or
becomes the owner of shares of the capital stock of
the Company corresponding to twenty-five percent
(25%) or more of the total shares of the capital stock
of the Company must, within no more than sixty (60)
days after the date of acquisition or the event giving
Adjusted to the minimum requirements of the
New Market Regulations, particularly to change the
defined term "Purchasing Shareholder" to
"Relevant Shareholder", so as to avoid any conflict
with the new definitions adopted by the New
Market Regulations.
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15
more than sixty (60) days after the date of
acquisition or the event giving rise to ownership
of shares corresponding to twenty-five percent
(25%) of more of the total shares of the capital
stock of the Company, make or apply for
registration of, as the case may be, a tender offer
to purchase all shares of the capital stock of the
Company ("Tender Offer"), subject to the
provisions of the applicable regulations issued by
the Brazilian Securities Commission - CVM, the
regulations issued by BOVESPA, and the terms of
this article.
rise to ownership of shares corresponding to twenty-
five percent (25%) of more of the total shares of the
capital stock of the Company, make or apply for
registration of, as the case may be, a tender offer to
purchase all shares of the capital stock of the
Company ("Tender Offer"), subject to the provisions
of the applicable regulations issued by the Brazilian
Securities Commission - CVM, the regulations issued
by BM&FBOVESPA, and the terms of this article.
"Purchasing Shareholder" means any person
(including, without limitation, any natural person
or legal entity, investment fund, joint ownership
arrangement, securities portfolio, pooling of
interests or other organization residing,
domiciled or headquartered in Brazil or abroad)
or group of persons bound to a Purchasing
Shareholder under a voting agreement and/or
representing the same interests as a Purchasing
Shareholder, that subscribes to and/or purchases
shares of the Company. Examples of a person
representing the same interests as a Purchasing
Shareholder include any person (i) that is directly
or indirectly controlled or managed by such
Purchasing Shareholder, (ii) that controls or
manages in any manner such Purchasing
Shareholder, (iii) that is directly or indirectly
controlled or managed by any person that
[Provision deleted.]
Adjusted to the minimum requirements of the
New Market Regulations so as to avoid any conflict
between the defined term and the new definitions
adopted by the New Market Regulations.
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16
directly or indirectly controls or manages such
Purchasing Shareholder, (iv) in which the
controlling
person
of
such
Purchasing
Shareholder directly or indirectly has an
ownership interest equal to or greater than thirty
percent (30%), (v) in which such Purchasing
Shareholder directly or indirectly holds an
ownership interest equal to or greater than thirty
percent (30%), or (vi) that directly or indirectly
holds an ownership interest in such Purchasing
Shareholder equal to or greater than thirty
percent (30%).
Article 34 Any Purchasing Shareholder that
subscribes to and/or purchases shares of the
capital stock of the Company in an amount equal
to or greater than thirty percent (30%) of the
total Outstanding Shares (as defined in Paragraph
2 below) of the Company, and subsequently
wishes to purchase additional shares of the
Company on a stock exchange, will be required,
prior to any such additional purchase, to advise in
writing the Company and the trading director of
Bolsa de Valores de São Paulo - BOVESPA,
through the brokerage house serving as
intermediary in the transaction, of the intention
of such Purchasing Shareholder to purchase
additional shares of the capital stock of the
Company, at least three (3) business days prior
to the intended date of the additional purchase of
shares, so that such director may arrange for an
Article 35 Any Relevant Shareholder that subscribes
to and/or purchases shares of the capital stock of the
Company in an amount equal to or greater than thirty
percent (30%) of the total Outstanding Shares (as
defined in the New Market Regulations) of the
Company, and subsequently wishes to purchase
additional shares of the Company on a stock
exchange, will be required, prior to any such
additional purchase, to advise in writing the Company
of the intention of such Relevant Shareholder to
purchase additional shares of the capital stock of the
Company, at least three (3) business days prior to the
intended date of the additional purchase of shares, and
take all necessary measures so that the additional
purchase be made through an auction to be
conducted on the trading floor of BM&FBOVESPA, in
which intervening third parties and/or the Company
may participate, in compliance at all times with
Adjusted to the minimum requirements of the
New Market Regulations and due to formal
request of BM&FBOVESPA (exclusion of
liabilities for BM&FBOVESPA's operational
officer).
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17
auction for the purchase of shares to be
conducted on the trading floor of BOVESPA, in
which intervening third parties and/or the
Company may participate, in compliance at all
times with applicable legislation, the regulations
of the Brazilian Securities Commission ­ CVM,
and the regulations of BOVESPA.
applicable legislation, the regulations of the Brazilian
Securities Commission ­ CVM, and the regulations of
BM&FBOVESPA.
Paragraph 2 - For the purposes of this article, the
following capitalized terms will have the following
meanings:
[Provision deleted.]
Elimination proposed to move the definition of
"Controlling Shareholder" to the list of definitions
in Article 33, according to the defined term used in
the New Market Regulations, and to delete the
definition of "Outstanding Shares," which term will
now have the same meaning as in the New Market
Regulations.
"Outstanding Shares" means all shares of the
capital stock of the Company, except for shares
(i) owned directly or indirectly by the Controlling
Shareholder and/or by persons related to the
Controlling Shareholder; (ii) kept as treasury
shares; (iii) owned by a controlled company of
the Company; and (iv) owned directly or
indirectly by the directors and executive officers
of the Company.
[Provision deleted.]
"Controlling Shareholder" has the meaning
assigned to such term in Article 116 of Law No.
6,404, dated December 15, 1976.
[Provision deleted.]
Article 35 In the tender offer for purchase of
shares to be made by the controlling shareholder
or the Company, in the case of cancellation of
registration of the Company as a publicly-held
company, the minimum offered price will
correspond to the economic value thereof, as
determined pursuant to an appraisal report.
Article 36 In the tender offer for purchase of shares
to be made by the Controlling Shareholder or the
Company, in the case of cancellation of registration as
a publicly-held company, the minimum offered price
will correspond to Economic Value, as determined by
an appraisal report prepared pursuant to Paragraphs 1
and 2 of this article, subject to applicable rules and
regulations.
Adjusted to the minimum requirements of the
New Market Regulations.
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18
[No counterpart provision.]
Paragraph 1 Such appraisal report will be prepared by
a specialized entity or firm of recognized expertise
and independent from the decision-making power of
the Company, its Managers and/or the Controlling
Shareholder(s). The appraisal report will also meet
the requirements of Paragraph 1 of Article 8 of Law
No. 6,404/76, and will provide for the liability
mentioned in Paragraph 6 of said Article 8.
Adjusted to the minimum requirements of the
New Market Regulations.
[No counterpart provision.]
Paragraph 2 Selection of the specialized entity or firm
charged with determination of the Economic Value of
the Company falls within the exclusive authority of the
Shareholders' Meeting, and will be made from a list of
three names submitted by the Board of Directors.
The relevant decision will disregard any blank votes
and will be made by a majority vote of the
shareholders
owning
Outstanding
Shares
in
attendance at the meeting, which will transact
business, on first call, upon attendance by
shareholders representing at least twenty percent
(20%) of the total Outstanding Shares and, on second
call, upon attendance by any number of shareholders
owning Outstanding Shares.
Adjusted to the minimum requirements of the
New Market Regulations.
Article 36 In the event the shareholders pass a
resolution at a Special Shareholders' Meeting to
delist the Company from the New Market in
order to register the Company shares for trading
outside the New Market, or a resolution to delist
as a result of a corporate reorganization in which
the surviving company does not have its shares
traded in the New Market, the shareholder or
Article 37 In the case of a resolution to delist the
Company from the New Market in order to register
Company securities for trading outside the New
Market, or a resolution to delist as a result of a
corporate reorganization in which the surviving
company does not have its securities traded in the
New Market, the Controlling Shareholder must make,
within one hundred and twenty (120) days after the
Adjusted to the minimum requirements of the
New Market Regulations.
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19
group of shareholder holding controlling power
over the Company will be required to make a
tender offer to purchase shares at a minimum
offered price corresponding to the economic
value thereof as determined pursuant to an
appraisal report.
Shareholders' Meeting that approves the transaction
in question, a tender offer to purchase the shares of
the remaining shareholders of the Company for at
least the Economic Value thereof, as determined by an
appraisal report prepared pursuant to Paragraphs 1
and 2 of Article 36 hereof, subject to applicable rules
and regulations.
[No counterpart provision.]
Article 38 If no Controlling Shareholder exists and a
resolution is made to delist the Company from the
New Market in order to register securities for trading
outside the New Market, or such a resolution is made
as a result of a corporate reorganization in which the
surviving company does not have its securities traded
in the New Market, delisting will be contingent on a
tender offer being made for the purchase of shares on
the terms described in the preceding article, within
one hundred and twenty (120) days after the
Shareholders' Meeting that approves the transaction
in question.
Adjusted to the minimum requirements of the
New Market Regulations.
[No counterpart provision.]
Paragraph 1 Such Shareholders' Meeting will define
the person(s) responsible for making the tender offer
to purchase shares, which person(s) will be present at
the Shareholders' Meeting and will expressly
undertake the obligation to carry out the offer.
Adjusted to the minimum requirements of the
New Market Regulations.
[No counterpart provision.]
Paragraph 2 In the absence of definition of the persons
responsible for making the tender offer to purchase
shares, in the case of a corporate reorganization in
which the surviving company does not have its
securities traded in the New Market, those
shareholders voting in favor of the corporate
Adjusted to the minimum requirements of the
New Market Regulations.
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20
reorganization will be responsible for making such
tender offer.
Article 38 The Company will only register the
transfer of shares to the Purchaser of Controlling
Power or the person(s) that come of hold
Controlling Power after they have executed a
Consent of Controlling Person, as mentioned in
the New Market Listing Regulations. No
shareholders' agreement providing for exercise of
Controlling Power may be filed with the
Company before its signatories have signed a
Consent of Controlling Person.
Article 40 The Company will only register the
transfer of shares to the Purchaser or the person(s)
that come of hold Controlling Power after they have
executed a Consent of Controlling Person, as
mentioned in the New Market Regulations.
Adjusted to the minimum requirements of the
New Market Regulations
Article 41 No shareholders' agreement providing for
exercise of Controlling Power may be filed with the
registered office of the Company before its signatories
have signed a Consent of Controlling Person, as
mentioned in the New Market Regulations.
Adjusted to the minimum requirements of the
New Market Regulations.
[No counterpart provision.]
Article 42 Delisting of the Company from the New
Market for failure to comply with the obligations
under the New Market Regulations is contingent on
the making of a tender offer for purchase of shares for
at least the Economic Value thereof, based on an
appraisal report prepared according to Article 36 of
these By-laws, subject to applicable rules and
regulations.
Adjusted to the minimum requirements of the
New Market Regulations.
[No counterpart provision.]
Paragraph 1 The Controlling Shareholder will be
required to make such tender offer for purchase of
shares.
Adjusted to the minimum requirements of the
New Market Regulations.
[No counterpart provision.]
Paragraph 2 If no Controlling Shareholder exists and
delisting from the New Market as aforesaid results
Adjusted to the minimum requirements of the
New Market Regulations.
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21
from a resolution passed by the Shareholders'
Meeting, those shareholders voting in favor of the
resolution leading to noncompliance will be required
to make the tender offer to purchase shares.
[No counterpart provision.]
Paragraph 3 If there is no Controlling Shareholder and
delisting from the New Market as aforesaid results
from action or failure to act on the part of the
management, the Managers of the Company will call a
Shareholders' Meeting to pass a resolution to cure
noncompliance with the obligations under the New
Market Regulations or, as the case may be, a
resolution to delist the Company from the New
Market.
Adjusted to the minimum requirements of the
New Market Regulations.
[No counterpart provision.]
Paragraph 4 If the Shareholders' Meeting mentioned in
Paragraph 3 above passes a resolution to delist the
Company from the New Market, such Shareholders'
Meeting will define the person(s) responsible for
making the tender offer to purchase shares, which
person(s) will be present at the meeting and will
expressly undertake the obligation to carry out the
offer.
Adjusted to the minimum requirements of the
New Market Regulations.
[No counterpart provision.]
Article 43 The provisions of the New Market
Regulations will prevail over the provisions of these
By-laws where the rights of the offerees in the tender
offer contemplated herein are adversely affected.
Adjusted to the minimum requirements of the
New Market Regulations.
Article 40 The Company, its shareholders,
directors,
executive
officers
and
Audit
Committee members agree to settle by
arbitration any and all disputes and controversies
between them arising from or in connection with
Article 45 The Company, its shareholders, Managers
and Audit Committee members agree to settle by
arbitration conducted before the Market Arbitration
Chamber any and all disputes and controversies
between them arising from or in connection with the
Adjusted to the minimum requirements of the
New Market Regulations.
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22
the
application,
validity,
effectiveness,
construction, breach and the effects of breach of
the provisions of Law No. 6,404/76, the By-laws
of the Company, the rules issued by the National
Monetary Council, the Central Bank of Brazil and
the Brazilian Securities Commission, as well as
other regulations applicable to the operation of
the capital markets in general, the New Market
Listing Regulations, the New Market Agreement
and the Arbitration Rules of the Market
Arbitration Chamber.
application, validity, effectiveness, construction, breach
and the effects of breach of the provisions of Law No.
6,404/76, the By-laws of the Company, the rules
issued by the National Monetary Council, the Central
Bank of Brazil and the Brazilian Securities
Commission, as well as other regulations applicable to
the operation of the capital markets in general, the
New Market Regulations, the Arbitration Rules, the
Rules on Sanctions, and the New Market Agreement.
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BY-LAWS OF NATURA COSMÉTICOS S.A.

ARTICLE I
NAME, REGISTERED OFFICE, PURPOSES AND DURATION

Article 1 - NATURA COSMÉTICOS S.A. is a publicly-held corporation, which is
governed by these By-laws, applicable legislation and the New Market Listing Regulations
(Regulamento de Listagem no Novo Mercado).
Sole Paragraph ­ Given that the Company has joined the special listing
segment known as New Market, maintained by BM&FBOVESPA S.A. ­ Bolsa
de Valores, Mercadorias e Futuros ("BM&FBOVESPA"), the Company, its
shareholders, Managers and Audit Committee members, if any, are also
subject to the provisions of the New Market Listing Regulations of
BM&FBOVESPA ("New Market Regulations").

Article 2 - The registered office of the Company is located in the City of Itapecerica
da Serra, State of São Paulo, at Rodovia Régis Bittencourt, w/o no., km 293, Bairro
Potuverá, Edifício I, CEP 06882-700.
Paragraph 1 ­ The Company may establish branches, warehouses, offices
and other premises of any kind anywhere in Brazil, according to a
resolution made by the Board of Executive Officers.

Article 3 -
The purposes of the Company are as follows:

I.
trading, export and import of beauty and personal care products, toiletry,
cosmetics, apparel, jewelry, costume jewelry, home articles, foods, nutritional
supplements, software, books, publishing material, entertainment products,
phonographic products, medication, including phytotherapeutic and homeopathic
medicines, drugs, pharmaceutical raw materials, and home cleaning products, the
Company being permitted to carry on any and all activities and transactions
related to such purposes;

II.
the provision of services of any kind, such as services related to beauty
treatment, marketing consulting, credit information, planning, and risk analysis;
and
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2
III.
the formation and management of, and the holding of interests in, companies and
businesses of any kind and in any manner whatsoever, as a shareholder or
quotaholder.

Article 4 - The duration of the Company is for an indefinite period of time.


ARTICLE II
CAPITAL STOCK, SHARES AND SHAREHOLDERS


Article 5
-
The capital stock of the Company, fully subscribed to and paid in, is four
hundred
eighteen
twenty-seven
million,
seventy-
two
sixty one
thousand, seven hundred
seventy-one
and seven
Brazilian Reals and
eighty
thirty
-two centavos (R$
418.061.071,80
427,072,707.32
), divided into four hundred thirty
-one
million,
eight
two
hundred
eighty-one
thirty-nine
thousand,
four
two
hundred
sixteen
sixty-
four
(
430.881.416
431,239,264
) registered common shares, with no par value.
Sole Paragraph ­ The Company may not issue preferred shares.

Article 6
-
The Company is hereby authorized to increase its capital stock
up to eleven
,
irrespective of an amendment to these By-laws
, up to four hundred forty-one
million,
two
three
hundred
eighty-one
ten
thousand,
four
one
hundred twenty-
six (11,281,426
five
(441,310,125
) common shares, with no par value
.
Paragraph 1 - Within the limit authorized in this Article, the Company may
,
upon a
resolution of the Board of Directors
increase its capital stock
irrespective of an
amendment to these By-laws
. The Board of Directors
, which
will establish the terms
for
of
issuance
of shares
, including as to price and payment.
Paragraph
2 -
1 ­
Within the
limit
limits
of the authorized capital, the
Board of Directors may
take action on
approve
the issuance of warrants
and
convertible debentures
.

Paragraph
3 -
2 ­
The Board of Directors
of the Company
may grant
stock purchase or subscription options, under the Stock Purchase or
Subscription Option Plans approved by the Shareholders' Meeting, to the
directors, executive officers
Managers
and employees of the Company, as
well as to the
directors, executive officers
Managers
and employees of other
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3
companies directly or indirectly controlled by the Company, without
preemptive rights to the shareholders at the time of either issue or
exercise of such options, with due regard for the balance of the authorized
capital at the time of
award of such stock purchase or
exercise of
subscription options
, and the balance of treasury shares at the time of
exercise of purchase options
.

Paragraph
4
3
­
Is it void to the
The
Company
may not
issue
Beneficiary
Parties
founder's shares
.

Article 7 -
The capital stock of the Company will be represented solely by common
shares, and each common share will be entitled to one vote on the resolutions adopted by
the shareholders.

Article 8 - All shares of the Company will be in book-entry form and will be kept, in
the name of the holders thereof, in a custody account maintained by a financial institution
authorized to do business by the Brazilian Securities Commission.
Sole Paragraph ­ The costs of any transfers or registrations as well as
the costs of services related to the shares under custody may be charged
directly to the shareholders by the institution serving as transfer agent, as
defined in the relevant custody agreement.

Article 9 - The Board of Directors may, in its discretion, exclude or restrict
preemptive rights when issuing shares, convertible debentures and warrants to be placed
by way of sale on a stock exchange, public subscription or exchange of shares in a tender
offer, according to the provisions of law and within the limits of the authorized capital.

ARTICLE III
MANAGEMENT OF COMPANY
PART I
SHAREHOLDERS' MEETING

Article 10 - The Annual Shareholders' Meeting will be held once a year, and Special
Shareholders' Meetings may be held whenever called in accordance with the terms of the
law and these By-laws.
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4
Paragraph 1 ­ The resolutions at the Shareholders' Meeting will be passed
by a plurality of votes.

Paragraph 2 ­
The Shareholders' Meeting may only take action on the
matters listed in the agenda for the meeting, as set forth in the relevant
notice.
Article 11 - The Shareholders' Meeting will be called to order and presided over by a
shareholder selected by the attendees, such shareholder being permitted to designate up
to two (2) secretaries.

Article 12 -
In addition to the powers and duties provided for by law, it is incumbent on
the Shareholders' Meeting:

I.
to elect and remove from office the members of the Board of Directors
and the
members of the Audit Committee, as the case may be
;

II.
to fix the aggregate fees of the members of the Board of Directors and the
Board of Executive Officers, as well as the compensation of the members of the
Audit Committee, when in operation;

III.
to pay stock dividends and approve any stock split or reverse stock split;

IV.
to approve stock purchase or subscription option plans for the Managers and
employees of the Company, as well as for the Managers and employees of other
companies directly or indirectly controlled by the Company;

V.
to take action
, based on a proposal submitted by the management,
on the
allocation of the
net
income for the year and the distribution of dividends;

VI.
to appoint a liquidator and the Audit Committee that will serve during the
period of liquidation;

VII.
to take action on the delisting of the Company from New Market ("New
Market") of Bolsa de Valores de São Paulo ­ BOVESPA ("BOVESPA"); and

VIII.
to select the specialized firm or entity charged with preparation of an appraisal
report for the shares of the Company, in the case of cancelation of registration
as publicly-held company or delisting from the New Market, as provided in
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5
Article V hereof, from a list of specialized firms or entities produced by the
Board of Directors.

Sole Paragraph
- The chairman of the Shareholders' Meeting will comply
with and enforce the provisions of the shareholders' agreements filed with
the registered office of the Company, and will disregard any votes cast in
violation thereof.

PART II
MANAGEMENT BODIES
Subpart I
General

Article 13 - The Company will be managed by the Board of Directors and the Board of
Executive Officers.

Paragraph 1 ­
The Managers will take office by executing a statement of
acceptance of office recorded in the appropriate book, the posting of a
fidelity bond not being required.

Paragraph 2
-
­
Investiture of the members of the Board of Directors and
the Board of Executive Officers is contingent on execution of a Consent of
Manager,
as provided
in
accordance with the terms of
the New Market
Listing Regulations
and applicable legal requirements
.

Paragraph 3 ­ The Managers will hold their positions until such time as
their replacements will have taken office.

Article 14 - The Shareholders' Meeting will fix the aggregate annual fees to be
apportioned among the Managers of the Company, and the Board of Directors will
apportion such fees to each director and executive officer, subject to the provisions of
these By-laws.

Article 15 -
A majority of members will constitute a quorum for the meetings of all
management bodies of the Company, which meetings will pass their resolutions by a
majority vote of the attendees.
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6
Paragraph 1 ­ In the case of a tie vote at a meeting of the Board of
Directors, the co-chairman of the Board of Directors presiding over the
meeting will cast a deciding vote.

Paragraph 2
­ The requirement of notice for meetings may only be
waived where all members are in attendance, provided further that votes
cast in writing may be computed in this regard.
Subpart II
Board of Directors

Article 16
-
The Board of Directors will be composed of at least five (5) and no more
than
seven
nine
(
7
9
) members, who will
all
be
shareholders
elected
and removed
by the
Shareholders' Meeting, with a
unified
term of office of up to two (2) years, reelection
being permitted.
Paragraph 1
- At
least twenty percent (20%)
° - Out
of the members of
the Board of Directors
, at
least twenty percent (20%)
will be Independent
Directors, as defined in the New Market
Listing
Regulations
.Paragraph 2 -
At the Annual Shareholders' Meeting, the shareholders will determine the
number of directors
and as expressly stated in the minutes of the
Shareholders' Meeting that elects such Independent Directors, provided
further that a director elected as permitted under Article 141, Paragraphs 4
and 5 of Law 6,404/76 will also be deemed an Independent Director.
Should compliance with the foregoing percentage requirement lead to a
fractional number of directors, the rounding procedure described in the
New Market Regulations will be followed
.

Paragraph
3 -
2 ­
The directors will
take office by executing a statement
of acceptance of office recorded in the appropriate book. The directors
will remain in office and in the discharge of their duties until their
replacements are elected,
be persons of excellent reputation and
unless
otherwise
decided
permitted
by the Shareholders' Meeting
.
, a person may
not be elected as director that (i) holds a position in a company that could
be regarded as a competitor of the Company; or (ii) has or poses a conflict
of interest with the Company. A director may not cast a vote in the case
of a supervening impediment as aforesaid.
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7
Paragraph 4 ­ The Board of Directors members shall have a solid
reputation, and may not be elected, except for release from the General
Meeting, who (i) occupies positions in companies which may be deemed as
company's competitors; or (ii) who has or represents conflicting interests
with the company; voting shares may not be exercised by the Board of
Directors member if same impediment factors are characterized thereafter.

Paragraph
5 ­ It is void, under the form of
3 ­ Pursuant to
Article 115,
paragraph
Paragraph
1 of Law
no. 6.404-76m the exercise of voting shares,
in
No. 6,404/76, no voting rights may be exercised for
the election of
Boards of Directors members, under circumstances characterizing
directors
where a
conflict of
interests
interest
with
the
Company
exists
.
Paragraph 6 ­
Paragraph 4 ­
A director may not have access to
information or take part in meetings of the Board of Directors that involve
matters as to which such director has a conflict of interest with the
Company or matters that could pose such a conflict of interest.

Paragraph
7
5
­ In furtherance of its duties, the Board of Directors may
establish committees or work groups having defined objectives and
comprised of persons designated by the Board from among the
management of the Company and/or persons directly or indirectly affiliated
with the Company.
Paragraph 6 ­ A single person may not concurrently hold the offices of
chairman of the Board of Directors and President or Chief Executive
Officer of the Company.

Article 17 ­ At the time of election of directors, the Shareholders' Meeting will first
determine by a majority vote the number of directors to be elected. If the cumulative
voting system has not been requested pursuant to law, the Shareholders' Meeting will
vote on slates of directors filed in advance with the chair, which will ensure that
shareholders owning, individually or as a block, fifteen percent (15%) or more of the
common shares of the Company will be entitled to nominate one director, subject to the
limitation in the leading paragraph of Article 16. The chair may not accept for filing a slate
in violation of the provision of this article.
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8
Article 18
-
The Board of Directors will have
up to
three (3) co-chairmen, who will be
elected by a majority vote of the directors at the first meeting of the Board held after
investiture of the directors, or whenever a resignation or vacancy occurs.
Paragraph 1 ­ Additionally, at such first meeting of the Board of
Directors, the directors will designate one among the co-chairmen to
preside over the meetings of the Board of Directors during the entire term
of office of the directors.

Paragraph 2
- With respect to the resolutions of the Board of Directors,
no co-chairman will cast a deciding vote, in the event of a tie
vote.Paragraph 3 -
­
In the event of
a permanent
impediment or vacancy
on the Board of Directors, the Board will call a Shareholders' Meeting to fill
the open position.

Article 19
-
The Board of Directors will hold regular meetings four (4) times a year, and
may hold special meetings whenever called by the co-chairman selected as described in
Paragraph 1 of Article 18 hereof, or by a majority of directors. The Board meetings, as an
exception, may be held by telephone conference, video conference, e-mail or any other
means of communication
that allows identification of each director and simultaneous
communication with all other persons attending the meeting
.
Paragraph 1 ­ Notice to all meetings will be given at least seventy-two
(72) hours in advance.

Paragraph 2 ­ All resolutions passed by the Board of Directors will be
recorded in minutes transcribed on the appropriate book of the Board of
Directors and executed by all directors in attendance.

Paragraph 3
- At the meetings
­ A director attending a meeting
of the
Board of Directors
, there shall be allowed an early vote cast in writing as
well as a vote cast by fax, e-mail or any
by telephone conference, video
conference or other means of communication, as aforesaid, will confirm its
vote in a statement to be sent to the chairman of the meeting by letter, fax,
e-mail or
other means of communication
, and any director so voting will be
deemed as present
that allows identification of each director, promptly
after the closing of the meeting. Upon receipt of such statement, the
chairman will have full authority to execute the minutes of the meeting on
behalf of the director in question
.
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9
Paragraph 4 ­ In the event of temporary absence of any director, he or
she may be substituted at Board meetings by another director that he or
she may have expressly appointed under a specific power of attorney,
stating, among other things, the votes to be cast on the items of the agenda
for each meeting. In such case, the substitute, in addition to his or her own
vote, will cast the vote previously indicated by the absent director. Only an
Independent Director may substitute for an absent Independent Director.

Article 20 - In addition to other powers and duties assigned by law or these By-laws, it
is incumbent on the Board of Directors:

I.
to regulate the affairs of the Company, and to take charge of, examine and
deliberate on, any matters that do not fall within the exclusive authority of the
Shareholders' Meeting or the Board of Executive Officers;

II.
to set the general guidelines for the business of the Company;

III.
to elect and remove from office the executive officers of the Company;

IV.
to assign the duties of each executive officer, and to designate the Investor
Relations Officer, in compliance with the provisions hereof;

V.
to take action to call the Shareholders' Meeting, at such times as the Board
deems fit, or in the case of Article 132 of the Corporation Law (Law No.
6,404/76);

VI.
to oversee the performance of the executive officers; to examine at any time
the books and records of the Company; and to request information on any
contracts made or about to be made and any other acts;

VII.
to review the quarterly results of operations of the Company;

VIII.
to select and replace the independent auditors;

IX.
to call for the presence of the independent auditors to provide clarification as
required;
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10
X.
to
consider
issue an opinion on
the Management Report and the accounts of the
Board of Executive Officers, and to take action on the submission thereof to the
Shareholders' Meeting;

XI.
to approve annual and multi-annual budgets, strategic plans, expansion projects
and investment programs, and to follow up on the implementation thereof;
XII. to approve the creation and termination of subsidiaries and the
taking of ownership interests in other companies, in Brazil or abroad, as
well as the establishment of branch offices, warehouses, offices and any
other premises abroad;

XII.
to approve the creation and dissolution of subsidiaries and the taking of
ownership interests in other companies, in Brazil or abroad, as well as the
establishment of branch offices, warehouses, offices and any other premises
abroad;

XIII.
to order any inspection, audit or taking of accounts with respect to subsidiaries,
Controlled companies or affiliates of the Company, or any foundations
maintained by the Company;

XIV.
to pass on any matters to be submitted to the Shareholders' Meeting;

XV.
to authorize the issuance of shares in the Company within the limits authorized
in Article 6 hereof, and to set the terms for any such issuance of shares,
including as to price and payment, provided, further, that the Board may exclude
or reduce
preemptive rights
or reduce the time period for exercise thereof
in
the case of shares, convertible debentures and warrants to be placed by way of
sale on a stock exchange, public subscription or tender offer, in keeping with the
provisions of law;

XVI.
to take action on the purchase by the Company of the shares of its own capital
stock to be kept as treasury shares and/or for subsequent retirement or
disposal;

XVII.
to take action on the issuance of warrants, as provided in Paragraph 2 of Article
6 hereof;
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XVIII.
to grant stock purchase or subscription options, under Stock Purchase or
Subscription Option Plans adopted by the Shareholders' Meeting, to the
directors, executive officers
Managers
and employees of the Company, as well as
to the
directors, executive officers
Managers
and employees of other companies
directly or indirectly controlled by the Company, without preemptive rights to
the shareholders at the time of either award or exercise of such options, with
due regard for the balance of the authorized capital at the time of
award of
such
exercise of stock subscription options, and the balance of treasury shares at
the time of exercise of the
stock purchase
or subscription
options;

XIX.
to set the amount of any profit-sharing to the executive officers, managers and
employees of the Company;

XX.
to take action on the issuance of
ordinary, unsecured non-convertible
debentures
debentures;

XXI.
to authorize the Company to give a guaranty or security for the obligations of
third parties;
XXII.
to approve the levels of authority
of the executive officers as regards disposal or
encumbrance of fixed assets
, and to require the prior consent of the Board of
Directors as a condition for the validity of any such act, in those cases that the
Board may specify;
XXIII. to approve the levels of authority of the executive officers as regards
purchase
of fixed assets and incurrence of
other financial obligations related
to the investment projects of the Company, and to require the prior
consent of the Board of Directors as a condition for the validity of any such
act, in those cases that the Board may specify;
XXIV. to approve the levels of authority of the executive officers for the
and the
policies of the Board of Executive Officers, as well as any modifications
thereof, including rules governing (a) acquisition
of fixed assets and
incurrence of
financial obligations; (b)
encumbrance of fixed assets
; (c)
raising of money and issuance of debt securities for the raising of money,
such as bonds, notes, commercial papers
, promissory notes
and others
generally used in the marketplace, and to approve the terms of issuance and
redemption thereof,
and to require the prior consent of the Board of
Directors as a condition for the validity of any such act, in those cases that
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12
the Board may specify
among other rules as to levels of authority; and to
oversee compliance with such policies by the executive officers
;
XXIII.
XXV.
to define the list of three
entities or
firms specialized in economic
appraisal in charge of preparing an appraisal report for the shares of the
Company in the case of
a Tender Offer for
cancellation of registration as a
publicly-held company or delisting from the New Market;
XXIV.
XXVI.
to approve engagement of the institution that will serve as transfer agent
for the book-entry shares of the Company;
t
XXV.
XXVII.
with due regard for the provisions of these By-laws and prevailing
legislation, to regulate the proceedings of the Board and to issue or adopt
internal regulations for its operation;
XXVI.
to issue a favorable or unfavorable opinion on any tender offer to purchase
shares of the capital stock of the Company, such opinion to be well-reasoned
and to be issued no later than fifteen (15) days after publication of the notice
for the tender offer, covering at least (i) the convenience and timeliness of the
tender offer, in view of the interests of the shareholders as a whole and the
liquidity of their securities; (ii) the repercussions of the tender offer on the
interests of the Company; (iii) the strategic plans communicated by the offeror
with regard to the Company; and (iv) other points that the Board of Directors
may deem relevant, as well as any information required by the applicable rules
issued by CVM; and
XXVII. to make decisions on (i) payment of interim dividends, pursuant to Article 28,
Paragraph 3; and (ii) payment or credit to the shareholders of interest on
shareholders' equity during the fiscal year, in accordance with applicable
legislation.
Subpart III
Board of Executive Officers

Article 21 - The Board of Executive Officers, whose members will be elected and
removed by the Board of Directors at any time, will be composed of a Chief Executive
Officer, a Chief Marketing Officer, a Chief Legal Officer and a Chief Financial Officer, who
will each serve for a term of three (3) years, reelection being permitted.
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Paragraph 1
-
­
The Board of Executive Officers will be elected preferably
on the date the Annual Shareholders' Meeting is held
, and investiture of the
newly-elected officers may coincide with expiration of the term of office of
their predecessors
.

Paragraph 2 ­ The Chief Financial Officer will substitute for the Chief
Executive Officer in the temporary impediments and absences of the latter,
provided, further, that in the event the position of Chief Executive Officer
becomes vacant, the Chief Financial Officer will occupy such position until
the next meeting of the Board of Directors, which will appoint a
replacement to serve for the unexpired portion of the term.

Paragraph 3 ­ The remaining executive officers will be replaced, in the
case of temporary absence or impediment, by another executive officer
selected by the Board of Executive Officers. In the case of a vacancy, the
Board will appoint an interim replacement who will serve until the Board of
Directors elects a permanent replacement for the unexpired portion of the
term.

Article 22
-
The Board of Executive Officers will have full authority to take all action
required for
representation of the Company and
achievement of
the corporate
its
purposes, no matter how special such action may be, including authority to
dispose of and
encumber fixed assets,
waive rights and to settle and compromise, subject to the
applicable provisions of law and these By-laws
and
,
the resolutions adopted by the
Shareholders' Meeting and the Board of Directors
. It
, and the provisions and levels of
authority specified by the Board of Directors. In particular, it
is incumbent on the Board
of Executive Officers
to manage and administer the business of the Company, particularly
:
I.
to comply with and enforce these By-laws and the resolutions passed by the
Board of Directors and the Shareholders' Meeting;

II.
to prepare and submit each year to the Board of Directors a strategic plan, the
annual revisions thereof, and the general budget of the Company, and to see to
their implementation;

III.
to take action on the opening, relocation and closing of branch offices,
warehouses, offices and any other premises of the Company in Brazil;
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14
IV.
within the limits of authority set by the Board of Directors, to make decisions
concerning the acquisition, disposal and/or encumbrance of fixed assets, as well
as incurrence of financial obligations related to the investment projects of the
Company;

V.
to submit each year for review to the Board of Directors a Management Report
and the accounts of the Board of Executive Officers, together with the report of
the independent auditors and the proposed application of the income for the
preceding year; and

VI.
to submit every quarter to the Board of Directors a detailed trial balance sheet
of the Company and its Controlled Companies.

Article 23 - It is incumbent on the Chief Executive Officer, in addition to coordinating
the action of the executive officers and guiding the general planning activities of the
Company:

I.
to call and preside over the meetings of the Board of Executive Officers;

II.
to keep the members of the Board of Directors abreast of the affairs of the
Company and the progress of its operations;

III.
to propose to the Board of Directors, on its own non-exclusive initiative, the
duties to be assigned to the executive officers; and

IV.
to carry out such other duties as are assigned by the Board of Directors.

Article 24 ­ It is incumbent on the executive officers, in addition to carrying out the
activities assigned to them by the Board of Directors, to discharge the following duties:
Paragraph 1 ­ It is incumbent on the Chief Financial Officer:

(a) to plan, implement and coordinate the financial policies of the Company,
and to organize, prepare and monitor its budget;

(b) to prepare financial statements, and to manage the accounting activities
and the treasury of the Company, in keeping with applicable legal
requirements;
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15
(c) to provide guidance to the Company on any decision-making that
involves financial risks;

(d) to prepare financial reports and to provide information on his or her
areas of responsibility to the bodies of the Company; and

(e) to plan and carry out management policies for his or her areas of
responsibility.

Paragraph 2 ­ It is incumbent on the Chief Marketing Officer:

(a) to plan, define and manage marketing strategies;

(b) to set up and manage the sales structure and the policies on business
relations;

(c) to provide guidance to the Company on any decision-making that
involves commercial risks;

(d) to prepare commercial reports and to provide information on his or
her areas of responsibility to the bodies of the Company; and

(e) to plan and carry out management policies for his or her areas of
responsibility.

Paragraph 3 ­ It is incumbent on the Chief Legal Officer:

(a)
to organize, control, coordinate and oversee the legal matters and
activities of the Company, in all technical, operational and strategic
respects;
(b)
to counsel the Company on any decision-making that involves legal
risks and on the implementation of such decisions, in compliance
with applicable legal requirements;
(c)
to retain and oversee legal services to be provided by outside
professionals;
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16
(d)
to prepare legal reports and to provide information on his or her
areas of responsibility to the bodies of the Company; and
(e)
to plan and carry out management policies for his or her areas of
responsibility.
Article 25 - As a general rule, and except for the cases mentioned in the following
paragraphs, the Company will be bound by two (2) executive officers, or one executive
officer acting together with one attorney in fact, or two (2) attorneys in fact, acting within
the limits of their powers of attorney.

Paragraph 1
­ The acts for which these By-laws require the prior
consent of the Board of Directors may only be performed after this
condition has been met.

Paragraph 2 ­ The Company may be represented by a single executive
officer or a single attorney in fact in the following cases:
(a)
where the act to be performed requires a single representative, the
Company will be represented by any executive officer or any
attorney in fact holding special powers; and

(b)
in the case of release and discharge of amounts payable to the
Company, issuance and trading, including endorsement and discount,
of trade papers for sales made, as well as in the case of
correspondence not involving an obligation to the Company and
performance of routine acts of management, including those before
governmental agencies, mixed-capital companies, the Federal
Revenue Service, State and Local Treasury Departments, the Boards
of Trade, the National Health Surveillance Agency, Labor Courts,
INSS, FGTS and related collecting banks, and other similar acts.
Paragraph 3
-
­
The Board of Directors may authorize a single executive
officer or attorney in fact
acting alone
to perform other acts that bind the
Company. The Board may also adopt criteria for limitation of authorities
and may define certain cases where the Company will be represented by a
single executive officer or attorney in fact.
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Paragraph 4 ­ The following rules will apply to the appointment of
attorneys in fact:
(a)
all powers of attorney will be issued jointly by any two (2) executive
officers;

(b)
where a power of attorney involves performance of acts that
require a prior consent from the Board of Directors, execution will
be expressly contingent on the securing of such consent, which will
be mentioned in the text of the power.
Paragraph 5 ­ Any acts performed at variance with the provisions of this
article will be devoid of validity and will not be binding on the Company.

PART III
AUDIT COMMITTEE

Article 26 - The Audit Committee of the Company, having such powers and duties as
are established by law, will be composed of three (3) acting members and three (3)
alternates.
Paragraph 1 ­ The Audit Committee will not operate on a permanent
basis and will only operate when called by the shareholders, in accordance
with the provisions of law.

Paragraph 2 ­
The internal regulations applicable to the Audit Committee
will be approved by the Shareholders' Meeting that convenes the Audit
Committee.

Paragraph 3° - Investiture of the members of the Audit Committee is
contingent on execution of a Consent of Audit Committee Member,
as
provided
in
accordance with the terms of
the New Market Listing
Regulations
and with applicable legal requirements
.

ARTICLE IV
DISTRIBUTION OF INCOME
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Article 27 - The fiscal year of the Company will start on January 1 and will end on
December 31 of each year.
Paragraph 1 ­ At the end of each fiscal year, the Board of Executive
Officers will cause the following financial statements to be prepared, in
compliance with applicable legal requirements:

(a) balance sheet;
(b) income statement;
(c) statement of changes in shareholders' equity;
(d) statement of cash flows;
(e) statement of added value; and
(f) notes to the financial statements.
Paragraph 2 ­ Together with the financial statements for the fiscal year
the Board of Directors will submit to the Annual Shareholders' Meeting the
proposed allocation of the net income, in compliance with the provisions of
law and these By-laws.

Article 28 - The shareholders will be entitled to receive as dividends each year a
mandatory minimum percentage of thirty percent (30%) of the net income, as adjusted by:

I.
adding the amounts resulting from reversal during the year of contingency
reserves previously established;

II.
deducting the amounts set aside during the year for establishment of the
statutory reserve and contingency reserves; and

III.
where the mandatory minimum dividend exceeds the realized portion of the net
income for the year, the management may propose, and the Shareholders'
Meeting may approve, allocation of the excess to an unrealized profits reserve
(Article 197 of Law 6,404/76, as amended by Law 10,303/01).

Paragraph 1 ­
The Shareholders' Meeting may approve profit sharing for
the Managers, subject to applicable legal limitations. Payment of any profit
sharing will be contingent on distribution of the mandatory dividend to the
shareholders, as aforesaid. Whenever a semi-annual balance sheet is
prepared and interim dividends are paid based on such balance sheet
equivalent to at least thirty percent (30%) of the net income for the period,
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19
as determined according to the terms of this article, profit sharing may be
paid to the Managers with respect to such semi-annual income, upon a
resolution of the Board of Directors and subject to subsequent
confirmation by the Shareholders' Meeting.

Paragraph 2 ­ The Shareholders' Meeting may approve at any time a
payment of dividends out of existing profits reserves or earnings from prior
years retained pursuant to a resolution of the Shareholders' Meeting, after
distribution of the aforesaid mandatory dividend to the shareholders during
each year.

Paragraph 3 ­
The Company may prepare semi-annual or other interim
balance sheets, and the Board of Directors may approve a distribution of
dividends out of income determined as per such balance sheets. The Board
of Directors may also declare an interim dividend out of retained earnings
or existing profits reserves, as shown on such balance sheets or the most
recent annual balance sheet.

Paragraph 4 ­
Any dividends that fail to be claimed within a period of
three (3) years will revert to the Company.

Paragraph 5
° -
-
The Board of Directors may pay or credit interest on
shareholders' equity
, subject to subsequent confirmation by the Annual
Shareholders' Meeting that reviews the financial statements for the fiscal
year in which such interest was paid or credited
in accordance with the
provisions of prevailing regulations
.

Article 29 - The Shareholders' Meeting may approve the capitalization of any reserves
established in a semi-annual or other interim balance sheet.

ARTICLE V
SALE OF CONTROLLING INTEREST, CANCELLATION OF
REGISTRATION AS A PUBLICLY-HELD COMPANY,
AND DELISTING FROM THE NEW MARKET

Article 30
-
The sale of a
controlling interest
Controlling Interest
in the Company in a
single transaction or series of successive transactions must be agreed upon under a
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20
condition precedent or subsequent that the
purchaser of controlling interest
Purchaser
will make a tender offer to purchase the
remaining
shares of the
remaining
shareholders
Company
, subject to the terms of, and within the time limits prescribed by,
prevailing legislation and the New Market Listing Regulations, so that
the holders of
such
remaining
shareholders
shares
may receive the same treatment as accorded to the Selling
Controlling Shareholder.

Article 31
-
A tender offer as
mentioned
referred to
in the preceding article
will
must
also
be made:

I.
upon assignment for financial consideration of interests exercisable for newly-
issued shares and other securities or interests to convertible securities that may
result in the
sale
Sale
of a
controlling interest
Controlling Interest
in the Company;
and
or

II.
II.
in the event of sale of a controlling interest in a company that holds
controlling
power
Controlling Power
over the Company, in which case the
selling controlling
shareholder
Selling Controlling Shareholder
will be required to disclose to
BOVESPA
BM&FBOVESPA
the value assigned to the Company in such sale as well
as the relevant supporting documentation.

Article 32
-
Any person that
already owns shares in the Company and
acquires
controlling power
Controlling Power
over the Company as a result of a share purchase
agreement entered into with the
controlling shareholder
Controlling Shareholder
for any
number of shares will be required:

I.
to make a tender offer as provided in Article 30 of these Bylaws; and

II.
to compensate those shareholders from whom the person in question purchased
shares of the Company
to pay, as stated below, a sum equivalent to the
difference between the tender offer price and the value per share paid for shares
purchased
on a stock exchange
in the
within a
period of six (6) months next
preceding
transfer of the shares corresponding to a controlling interest in the
Company, and to pay to such shareholders the difference, if any, between the price
paid to the Selling Controlling Shareholder and the amount paid on the stock
exchange for the shares of the Company during the same period, as
the date of
acquisition of Controlling Power,
duly adjusted for inflation
from the date of
purchase of shares on the stock exchange
up to
the
date of payment
for the
shares, according to the IPCA index, as determined and published by the Brazilian
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21
Institute of Geography and Statistics
. Said sum will be distributed among all
persons that sold shares of the Company on the trading sessions where the
Purchaser made purchases, pro rata to the net daily selling balance thereof,
BM&FBOVESPA to arrange for such distribution in accordance with its regulations
.

Article 33 -
For the purposes of these By-laws
, the following capitalized terms will have
the following meanings:
"Controlling Shareholder" and "Selling Controlling Shareholder" have the
meanings assigned to such terms in the New Market Regulations.
"Relevant
Shareholder" means any person (including, without limitation, any
natural person or legal entity, investment fund, joint ownership
arrangement, securities portfolio, pooling of interests or other organization
residing, domiciled or headquartered in Brazil or abroad) or group of
persons bound to a
Relevant Shareholder under a voting agreement and/or
representing the same interests as a Relevant
Shareholder, that subscribes
to and/or purchases shares of the Company. Examples of a person
representing the same interests as a
Relevant
Shareholder include any
person (i) that is directly or indirectly controlled or managed by such
Relevant
Shareholder, (ii) that controls or manages in any manner such
Relevant
Shareholder, (iii) that is directly or indirectly controlled or
managed by any person that directly or indirectly controls or manages such
Relevant
Shareholder, (iv) in which the controlling person of such
Relevant
Shareholder directly or indirectly has an ownership interest equal to or
greater than thirty percent (30%), (v) in which such
Relevant
Shareholder
directly or indirectly holds an ownership interest equal to or greater than
thirty percent (30%), or (vi) that directly or indirectly holds an ownership
interest in such
Relevant
Shareholder equal to or greater than thirty
percent (30%).
"Managers" when used in the singular mean an executive officer or director
of the Company, and when used in the plural mean the executive officers
and the directors of the Company collectively.
"Purchaser" means a person to whom a Selling Controlling Shareholder
transfers Controlling Shares in a Sale of a Controlling Interest in the
Company.
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"Sale of a Controlling Interest in the Company" has the meaning assigned to
such term in the New Market Regulations.
"Independent Director" has the meaning assigned to such term in the New
Market Regulations.
"Group of Shareholders" means a group of two or more persons (a) bound
by voting agreements or arrangements of any kind whatsoever, including a
shareholders' agreement, whether written or oral, and whether directly or
through a Controlled company, a Controlling Person or a company under
common Control; or (b) having a relationship of Control among
themselves, whether directly or indirectly; or (c) under Common Control.
"Controlling Power" (and the correlative terms "Controlling",
"Controlled", "under Common Control" or "Control") means the power
actually exercised to direct the corporate activities and guide the operation
of the bodies of the Company, whether directly or indirectly, and whether
de facto or de jure, irrespective of ownership interest held. There will be a
relative presumption of control with respect to a person or Group of
Shareholders that owns shares corresponding to an absolute majority of
the votes cast by the shareholders attending the three most recent
Shareholders' Meetings of the Company, even though such person of
Group of Shareholders may not own shares representing an absolute
majority of the voting capital stock.
"Economic Value" has the meaning assigned to such term in the New
Market Regulations.
Article 34 -
Any
Purchasing
Relevant
Shareholder
(as defined in Paragraph 10 below)
that acquires or becomes the owner of shares of the capital stock of the Company
corresponding to twenty-five percent (25%) or more of the total shares of the capital
stock of the Company must, within no more than sixty (60) days after the date of
acquisition or the event giving rise to ownership of shares corresponding to twenty-five
percent (25%) of more of the total shares of the capital stock of the Company, make or
apply for registration of, as the case may be, a tender offer to purchase all shares of the
capital stock of the Company ("Tender Offer"), subject to the provisions of the applicable
regulations issued by the Brazilian Securities Commission - CVM, the regulations issued
by
BOVESPA
BM&FBOVESPA
, and the terms of this article.
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23
Paragraph 1 ­ The Tender Offer must be (i) addressed generally to all
shareholders of the Company, (ii) take the form of an auction conducted on
BOVESPA, (iii) launched at a price determined according to the terms of
Paragraph 2 below, and (iv) call for payment in cash and in local currency, as
consideration for the shares of the capital stock of the Company to be
purchased in the Tender Offer.

Paragraph 2 ­ The purchase price per share of the capital stock of the
Company in the Tender Offer may not be less that the result of the
following formula:
Tender Offer Price = Share Value
Where:

"Tender Offer Price" corresponds to the purchase price of each share of
the capital stock of the Company in the Tender Offer mentioned in this
article.

"Share Value" corresponds to the greater of (i) the highest quoted price
per share of the capital stock of the Company during the period of twelve
(12) months next preceding the Tender Offer on any stock exchange
trading shares of the Company, (ii) the highest price per share paid by the
Relevant Shareholder at any time for a share or block of shares of the
capital stock of the Company; and (iii) an amount corresponding to twelve
(12) times the Average Consolidated EBITDA of the Company (as defined
in Paragraph 11 below) minus the net consolidated indebtedness of the
Company, divided by the total number of shares of the capital stock of the
Company.

Paragraph 3 ­ A Tender Offer made as aforesaid in this article will not
exclude the possibility of another shareholder of the Company or, as the
case may be, the Company itself making a competing Tender Offer,
pursuant to applicable regulations.

Paragraph 4 ­ A Tender Offer as aforesaid in this article may be waived
by the affirmative vote of shareholders representing a majority of the capital
stock at a special shareholders' meeting of the Company called especially to
consider such Tender Offer.
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24

Paragraph 5 ­ The Relevant Shareholder will be under an obligation to
comply with any requests or requirements that may be made by the
Brazilian Securities Commission ­ CVM concerning the Tender Offer,
within the maximum time limits prescribed by applicable regulations.

Paragraph 6 ­ In the event the Relevant Shareholder fails to meet the
obligations imposed by this article, including as regards compliance with
maximum time limits (i) to make or apply for registration of a Tender
Offer, or (ii) to comply with any requests or requirements made by the
Brazilian Securities Commission ­ CVM, the Board of Directors of the
Company will call a Special Shareholders' Meeting, at which the Relevant
Shareholder will be barred from voting, to consider suspension of the rights
of the Relevant Shareholder defaulting under any obligation imposed by this
article, in accordance with the terms of Article 120 of Law No. 6,404, dated
December 15, 1976.

Paragraph 7 ­ Any Relevant Shareholder that purchases or becomes the
holder of other rights, including rights of usufruct or fidei-commissum, to
shares of the capital stock of the Company in an amount of twenty-five
percent (25%) or more of the total shares of the capital stock of the
Company will also be required, within no more than sixty (60) days after
such purchase or event giving rise to the holding of rights to shares in an
amount of twenty-five percent (25%) or more of the total shares of the
capital stock of the Company, to make or apply for registration of, as the
case may be, a Tender Offer as described in Article 33 hereof.

Paragraph 8 ­ The obligations under Article 254-A of Law No. 6,404/76,
and Articles 30, 31 and 32 of these By-laws will not circumvent compliance
by the Relevant Shareholder with the obligations under this article.

Paragraph 9 ­ The provisions of this Article 33 will not apply to a person
that comes to hold shares of the capital stock of the Company in an
amount in excess of twenty-five percent (25%) of the total shares of the
capital stock of the Company as a result of (i) merger of another company
into the Company, (ii) a stock-for-stock transaction (incorporação de ações)
with another company, or (iii) subscription for shares of the Company in a
single primary issue approved at a Shareholders' Meeting of the Company
called by the Board of Directors, where the proposed capital increase
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25
includes an issue price based on economic value as determined by an
appraisal report for the Company prepared by a specialized entity or firm
having recognized expertise in the valuation of publicly-held companies.

Paragraph 10 ­ In the calculation of the percentage of twenty-five percent
(25%) of the total shares of the capital stock of the Company referred to in
the leading sentence of this article, there shall not be computed an
involuntary increase of equity interest resulting from a retirement of
treasury shares or from a reduction of the capital stock of the Company by
way of a retirement of shares.

Paragraph 11 ­ For the purposes of these By-laws, the capitalized terms
below will have the following meanings:
"Purchasing
Shareholder" means any person (including, without limitation,
any natural person or legal entity, investment fund, joint ownership
arrangement, securities portfolio, pooling of interests or other organization
residing, domiciled or headquartered in Brazil or abroad) or group of
persons bound to a
Purchasing Shareholder under a voting agreement
and/or representing the same interests as a Purchasing
Shareholder, that
subscribes to and/or purchases shares of the Company. Examples of a
person representing the same interests as a
Purchasing
Shareholder include
any person (i) that is directly or indirectly controlled or managed by such
Purchasing
Shareholder, (ii) that controls or manages in any manner such
Purchasing
Shareholder, (iii) that is directly or indirectly controlled or
managed by any person that directly or indirectly controls or manages such
Purchasing
Shareholder, (iv) in which the controlling person of such
Purchasing
Shareholder directly or indirectly has an ownership interest
equal to or greater than thirty percent (30%), (v) in which such
Purchasing
Shareholder directly or indirectly holds an ownership interest equal to or
greater than thirty percent (30%), or (vi) that directly or indirectly holds an
ownership interest in such
Purchasing
Shareholder equal to or greater than
thirty percent (30%).

"Average Consolidated EBITDA of the Company" is the arithmetic mean of
the Consolidated EBITDA's of the Company for the two (2) most recent
full fiscal years.
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"Consolidated EBITDA of the Company" means the consolidated earnings
of the Company before net financial expenses, income tax and social
contribution, depreciation, depletion and amortization, as determined based
on the most recent audited consolidated year-end financial statements
made available to the market by the Company.

Paragraph 12 ­ Should the regulations issued by the Brazilian Securities
Commission ­ CVM applicable to the Tender Offer under this article
require adoption of a method of calculation of the purchase price for each
share of the Company in the Tender Offer that arrives at a purchase price
greater than that calculated according to the terms of Paragraph 2 above,
the purchase price to prevail in the Tender Offer made under this article
will be the purchase price determined according to the regulations issued
by the Brazilian Securities Commission ­ CVM.

Article
34
35 -
Any
Purchasing
Relevant
Shareholder that subscribes to and/or purchases
shares of the capital stock of the Company in an amount equal to or greater than thirty
percent (30%) of the total Outstanding Shares (as defined in
Paragraph 2 below
the New
Market Regulations
) of the Company, and subsequently wishes to purchase additional
shares of the Company on a stock exchange, will be required, prior to any such additional
purchase, to advise in writing the Company of the intention of such
Purchasing
Relevant
Shareholder to purchase additional shares of the capital stock of the Company, at least
three (3) business days prior to the intended date of the additional purchase of shares,
BOVESPA
and take all necessary measures so that the additional purchase be made
through
an auction to be conducted on the trading floor of
BOVESPA
BM&FBOVESPA
, in
which intervening third parties and/or the Company may participate, in compliance at all
times with applicable legislation, the regulations of the Brazilian Securities Commission ­
CVM, and the regulations of
BOVESPA
BM&FBOVESPA
.
Paragraph 1 ­ The Tender Offer must be (i) addressed generally to all
shareholders of the Company, (ii) take the form of an auction conducted on
BOVESPA, (iii) launched at a price determined according to the terms of
Paragraph 2 below, and (iv) call for payment in cash and in local currency, as
consideration for the shares of the capital stock of the Company to be
purchased in the Tender Offer.
Sole Paragraph ­ In the event the
Relevant Shareholder fails to meet the obligations imposed by this article,
the Board of Directors of the Company will call
a Special Shareholders'
Meeting
, at which the Relevant Shareholder will be barred from voting, to
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27
consider suspension of the rights of the Relevant Shareholder that failed to
comply with the obligation imposed by this article, as provided in Article
120 of Law No. 6,404, dated December 15, 1976.
Paragraph 2 - For the purposes of this article
, the following capitalized
terms will have the following meanings:
"Outstanding Shares" means all shares of the capital stock of the Company,
except for shares (i) owned directly or indirectly by the Controlling
Shareholder and/or by persons related to the Controlling Shareholder; (ii)
kept as treasury shares; (iii) owned by a controlled company of the
Company; and (iv) owned directly or indirectly by the directors and
executive officers of the Company.
"Controlling Shareholder" has the meaning assigned to such term in Article
116 of Law No. 6,404, dated December 15, 1976.
Article
35
36 -
In the tender offer for purchase of shares to be made by the
controlling
shareholder
Controlling Shareholder
or the Company, in the case of cancellation of
registration
of the Company
as a publicly-held company, the minimum offered price will
correspond to
the economic value thereof
Economic Value
, as determined
pursuant to
by
an appraisal report
prepared pursuant to Paragraphs 1 and 2 of this article, subject to
applicable rules and regulations
.
Paragraph 1 ­ Such appraisal report will be prepared by a specialized
entity or firm of recognized expertise and independent from the decision-
making power of the Company, its Managers and/or the Controlling
Shareholder(s). The appraisal report will also meet the requirements of
Paragraph 1 of Article 8 of Law No. 6,404/76, and will provide for the
liability mentioned in Paragraph 6 of said Article 8.
Paragraph 2 ­ Selection of the specialized entity or firm charged with
determination of the Economic Value of the Company falls within the
exclusive authority of the Shareholders' Meeting, and will be made from a
list of three names submitted by the Board of Directors. The relevant
decision will disregard any blank votes and will be made by a majority vote
of the shareholders owning Outstanding Shares in attendance at the
meeting, which will transact business, on first call, upon attendance by
shareholders representing at least twenty percent (20%) of the total
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Outstanding Shares and, on second call, upon attendance by any number of
shareholders owning Outstanding Shares.
Article 37 - In the case of a resolution to delist the Company from the New Market in
order to register Company securities for trading outside the New Market, or a resolution
to delist as a result of a corporate reorganization in which the surviving company does not
have its securities traded in the New Market, the Controlling Shareholder must make,
within one hundred and twenty (120) days after the Shareholders' Meeting that approves
the transaction in question, a tender offer to purchase the shares of the remaining
shareholders of the Company for at least the Economic Value thereof, as determined by
an appraisal report prepared pursuant to Paragraphs 1 and 2 of Article 36 hereof, subject
to applicable rules and regulations.
Article 38 ­ If no Controlling Shareholder exists and a resolution is made to delist the
Company from the New Market in order to register securities for trading outside the
New Market, or such a resolution is made as a result of a corporate reorganization in
which the surviving company does not have its securities traded in the New Market,
delisting will be contingent on a tender offer being made for the purchase of shares on the
terms described in the preceding article, within one hundred and twenty (120) days after
the Shareholders' Meeting that approves the transaction in question.
Paragraph 1 ­ Such Shareholders' Meeting will define the person(s)
responsible for making the tender offer to purchase shares, which person(s)
will be present at the Shareholders' Meeting and will expressly undertake
the obligation to carry out the offer.
Article 36 In the event the shareholders pass a resolution at
a Special Shareholders'
Meeting
to delist the Company from the New Market in order to register the Company
shares for trading outside the New Market, or a resolution to delist as a result
Paragraph 2 ­ In the absence of definition of the persons responsible for
making the
tender offer to purchase shares
, in the case
of a corporate
reorganization in which the surviving company does not have its
shares
securities
traded in the New Market,
the shareholder or group of
shareholder holding controlling power over the Company will be required
to make a
tender offer to purchase shares
at a minimum offered price
corresponding to the economic value thereof as determined pursuant to an
appraisal report
those shareholders voting in favor of the corporate
reorganization will be responsible for making such tender offer
.
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29
Article
37
39
-
The appraisal report referred to in Articles 35 and 36 hereof will be
prepared by a specialized entity or firm of recognized expertise and independent from the
decision-making power of the Company, its Managers and controlling persons, provided,
further, that such appraisal report will meet the requirements in Paragraph 1 of Article 8
of Law No. 6,404/76, and will provide for the liability mentioned in Paragraph 6 of said
Article 8.
Paragraph 1 - Selection of the specialized entity or firm charged with
determination of the economic value of the Company falls within the
exclusive authority of the Shareholders' Meeting and will be made from a
list of three names submitted by the Board of Directors. The relevant
decision will disregard any blank votes and will be made by a majority vote
of the shareholders owning Outstanding Shares in attendance at the
meeting, which will transact business, on first call, upon attendance by
shareholders representing at least twenty percent (20%) of the total
Outstanding Shares and, on second call, upon attendance by any number of
shareholders owning Outstanding Shares.
Paragraph 2 ­ The costs related to preparation of the appraisal report
will be fully borne by the offeror.

Article
38
40 -
The Company will only register the transfer of shares to the Purchaser
of Controlling Power
or the person(s) that come of hold Controlling Power after they
have executed a Consent of Controlling Person, as mentioned in the New Market
Listing
Regulations.
Article 41 ­
No shareholders' agreement providing for exercise of Controlling Power
may be filed with the
registered office of the
Company before its signatories have signed
a Consent of Controlling Person
, as mentioned in the New Market Regulations
.

Article
39 -
The cases as to which these By-laws are silent will be disposed of by the
Shareholders' Meeting, in accordance with the precepts of Law No. 6,404, dated
December 15,
1976
42 -
Delisting of the Company from the New Market for failure
to comply with the obligations under the New Market Regulations is contingent on the
making of a tender offer for purchase of shares for at least the Economic Value thereof,
based on an appraisal report prepared according to Article 36 of these By-laws, subject to
applicable rules and regulations.
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30
Paragraph 1 ­ The Controlling Shareholder will be required to make such
tender offer for purchase of shares.
Paragraph 2 ­ If no Controlling Shareholder exists and delisting from the
New Market as aforesaid results from a resolution passed by the
Shareholders' Meeting, those shareholders voting in favor of the resolution
leading to noncompliance will be required to make the tender offer to
purchase shares.
Paragraph 3 ­ If there is no Controlling Shareholder and delisting from
the New Market as aforesaid results from action or failure to act on the
part of the management, the Managers of the Company will call a
Shareholders' Meeting to pass a resolution to cure noncompliance with the
obligations under the New Market Regulations or, as the case may be, a
resolution to delist the Company from the New Market.
Paragraph 4 ­ If the Shareholders' Meeting mentioned in Paragraph 3
above passes a resolution to delist the Company from the New Market,
such Shareholders' Meeting will define the person(s) responsible for making
the tender offer to purchase shares, which person(s) will be present at the
meeting and will expressly undertake the obligation to carry out the offer.
Article 43 ­ The provisions of the New Market Regulations will prevail over the
provisions of these By-laws where the rights of the offerees in the tender offer
contemplated herein are adversely affected.
Article 44 -
The cases as to which these By-laws are silent will be disposed of by the
Shareholders' Meeting, in accordance with the precepts of Law No. 6,404, dated
December 15,
1976.
ARTICLE VI
ARBITRATION

Article
40
45 ­
The Company, its shareholders,
directors, executive officers
Managers
and Audit Committee members agree to settle by arbitration
conducted before
the
Market Arbitration Chamber
any and all disputes and controversies between them arising
from or in connection with the application, validity, effectiveness, construction, breach and
the effects of breach of the provisions of Law No. 6,404/76, the By-laws of the Company,
the rules issued by the National Monetary Council, the Central Bank of Brazil and the
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Brazilian Securities Commission, as well as other regulations applicable to the operation of
the capital markets in general, the New Market
Listing
Regulations, the
Arbitration Rules,
the Rules on Sanctions, and the
New Market Agreement
and the Arbitration Rules of
the
Market Arbitration Chamber
.
ARTICLE VII
LIQUIDATION OF COMPANY

Article
41
46
-
The Company will be liquidated in the cases provided for by law, it
being incumbent on the Shareholders' Meeting to elect the liquidator or liquidators and
the Audit Committee that will serve during the period of liquidation, in compliance with
applicable legal requirements.
ARTICLE VIII
FINAL AND TEMPORARY PROVISIONS

Article
42
47
- The Company will comply with the shareholders' agreements filed with its
registered office. The officers presiding over the proceedings of a Shareholders' Meeting and the
members of the Board of Directors may not accept a vote that is cast by a shareholder signatory
to a shareholders' agreement duly filed with the registered office, at variance with the provisions
of such shareholders' agreement, and the Company is expressly barred from accepting and
recording any transfer of shares and/or encumbrance and/or assignment of preemptive rights
and/or other securities made in breach of the provisions and precepts of such shareholders'
agreement.

Article
43
48
- The Company may not provide financing or offer a guarantee or security of any
kind whatsoever to third parties in connection with business foreign to the corporate purposes.
Sole Paragraph ­ The Company may not provide financing or offer a guarantee
or security of any kind whatsoever to its controlling shareholders.

Article
44
49
- The provisions of Article 33 hereof will not apply to the current shareholders of
the Company that already own fifteen percent (15%) of more of the total shares of the capital
stock of the Company or to the successors of such shareholders, including in particular the
controlling shareholders of the Company signatories to the Shareholders' Agreement dated April
26, 2004 and filed with the registered office of the Company, in accordance with the terms of
Article 118 of Law No. 6,404, dated December 15, 1976, but will apply only to those investors
that purchase shares and become shareholders of the Company after registration of the Company
as a publicly-held company with the Brazilian Securities Commission ­ CVM and after its shares
have commenced trading on BOVESPA.
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EXHIBIT III ­ MD&A
ITEM 10 OF THE REFERENCE FORM
10.1
The Officers must comment on:

(a) general financial and equity conditions

According to the latest data from the Brazilian Cosmetic, Fragrance and Toiletry Industry Association
(Abihpec/Sipatesp), the target market of cosmetics, fragrances and toiletries in Brazil grew by 7.7% in
nominal terms in the first ten months of 2011, below the level projected by specialists. In this context,
Natura maintained its leadership in the sector, with market share of 23.2%, contracting 0.4 percentage point
from the year-ago period.

In our opinion, we present sufficient financial and equity conditions to implement our business plan and fulfill
our short and medium term obligations. This vision is based on the following main aspects:

- Strong and consistent cash generation
- Low level of financial leverage

(b) capital structure and possibility of share redemption
The objectives of the Corporation in managing its capital are to safeguard its continued capacity to offer
returns for its shareholders and benefits to other stakeholders, while maintaining an optimal capital
structure for reducing these costs.

In line with other companies in the sector, the Corporation monitors its capital based on the use of financial
leverage ratios. This ratio corresponds to net debt divided by the shareholders' equity. Meanwhile, net debt
corresponds to total borrowings and financing (including short- and long-term borrowings and financing, as
shown in the consolidated balance sheet) subtracted from the amount of cash and cash equivalents.

Our current capital structure, which is measured primarily by the ratio of the net debt of the Corporation
to the shareholders' equity of the Corporation, presents conservative levels of leverage: 54.18% on
December 31, 2011.
(R$ million)
Fiscal year ended

Indebtedness
December
31, 2011
December
31, 2010
December
31, 2009
Total borrowings and financing ..............................................................
(1,186.7)
(691.6)
(704.4)
(-) Cash and cash equivalents .................................................................
515.6
560.2
500.3
(Net Debt) ............................................................................
(671.1)
(131.4)
(204.1)
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33

Our net debt was R$131.4 million in 2010, increasing to R$671.1 million in 2011, with this variation basically
explained by the lower working capital requirements resulting from the growth in the Corporation's
operations. Meanwhile, our shareholders' equity decreased from R$1,257.5 million in 2010 to R$1,250.2
million in 2011, mainly impacted by the earnings in fiscal year 2011, the distribution of dividends in the
period and the acquisition of treasury stock.

With regard to the possibility of share redemptions, we do not have any plans for the short term involving
such an initiative.

(c) ability to meet financial obligations

Consolidated net revenue in 2011 was R$5,591.4 million, growing 8.9% on 2010. EBITDA was R$1,425.0
million, an increase of 13.4%, with EBITDA margin of 25.5% (24.5% in 2010). Net income in 2011 was
R$830.9 million, up 11.7%, with net margin of 14.9% (14.5% in 2010).

At the end of the fiscal year, the total cash balance was R$515.6 million and total debt was R$1,130.0
million, with the level of net debt corresponding to 0.4x EBITDA. Free cash flow in the year was R$410.6
million, down 42.7% from 2010. This reduction was due to the higher investments in infrastructure projects
(Property, plant and equipment) and the higher consumption of working capital, especially due to the higher
coverage of inventories and the increase in recoverable taxes.

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

(d) sources of financing for working capital and for investments in non-current assets used by the Corporation

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

Additionally, in May 2010, we tapped the capital markets with a public distribution of Debentures in the
amount of R$350 million.

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

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

(f) debt levels and the characteristics of such debts
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Our main source of debt is raising funds used to finance our investments in property, plant and equipment
and working capital.

In 2011, total borrowings and financing plus the provisions for gains on derivative operations exceeded cash
and cash equivalents by R$642.5 million. In 2010, total borrowings and financing exceeded cash and cash
equivalents plus unrealized gains on derivative operations by R$135.5 million.

The increase in net debt in 2011 was due to the higher investments in infrastructure projects (property,
plant and equipment) and the higher consumption of working capital, especially due to the higher coverage
of inventories and the increase in recoverable taxes.

In 2011, we had R$1,017.7 million in long term borrowings and financing and R$169.0 million in short term
borrowings and financing, and in 2010 these values were R$465.0 million and R$226.6 million, respectively.
These borrowings and financing consist primarily of obligations with the Brazilian Development Bank
(BNDES), FINEP (the research and project finance mechanism of the Ministry of Science and Technology)
and financial institutions and the Debentures.

The following table presents the variation in our net borrowings and financing, considering the unrealized
gains or losses on derivative operations, for the periods indicated:

(R$ million)
Fiscal year ended

Indebtedness
December
31, 2011
December
31, 2010
December
31, 2009
Total borrowings and financing ..............................................................
(1,186.7)
(691.6)
(704.4)
(+) Unrealized gains (losses) with derivative operations .................
28.6
(4.1)
(8.7)
(-) Cash and cash equivalents .................................................................
515.6
560.2
500.3
Net borrowings and financing
(1)
........................................
(642.5)
(135.5)
(212.8)
(1) Net borrowings and financing correspond to total borrowings and financing plus the unrealized gains or
losses on derivative operations less cash and cash equivalents.

The following table presents the maturity schedule of our long term consolidated debt in 2011:
Maturity of long-term borrowings and financing
Amount
(R$ million)
2013........................................................................
840.5
2014........................................................................
48.1
2015........................................................................
38.4
2016 onwards .................................................................................................................................
90.7
1,017.7
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Our borrowings and financing include the instruments described below. Despite the existence of the
borrowings and financing described below, we believe we are not dependent on third-party funds for the
performance of our business, given our consistent cash generation and our financial solidity. Intermittent
funding operations, especially short-term funding operations, are a typical process in our business.

Material borrowing and financing contracts

- BNDES-Exim Pre-Shipment Programs

We and our subsidiaries are beneficiaries of the BNDES Exim Pre-Shipment Program, which is financing
program for the pre-shipment phase of exports of goods and services. As a rule, the requirements for
participating in this program are: (i) having credit approved at the financial institution that will execute the
financing contract; and (ii) manufacturing products with at least 60% local content.

The Financing Contract upon Credit Approval of the BNDES Exim Pre-Shipment was executed by the
Indústria e Comércio de Cosméticos Natura Ltda. ("Natura Indústria") with Banco do Brasil S.A. for the
financing of exports of cosmetic and personal care products in general. The export financing contract of the
BNDES Exim Pre-Shipment Program is listed below:

On March 30, 2011, in accordance with the terms of BNDES-Exim Pre-Shipment Program, Natura Indústria,
acting as beneficiary and exporter, executed a Financing Contract upon Credit Approval with Banco do
Brasil S.A. for the extension of R$66.8 million in credit. The credit will be amortized in monthly installments
coming due as of March 15, 2012. To ensure the execution of any pecuniary obligation arising from this
contract, the Corporation is constituted as guarantor and principal payer.

- Financing Contracts with the BNDES

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

On February 26, 2009, Natura Product Inovação e Tecnologia Ltda. ("Natura Inovação") and the BNDES
executed a Financing Contract upon Credit Approval in the amount of R$63.8 million, which was used for
generating competencies, gathering knowledge and qualifying the research and development area of Natura
Inovação. The credit will be amortized in seventy-two consecutive monthly installments, with the first due
on April 15, 2010 and the last due on March 15, 2016. The contract is secured by a Bank Guaranty issued by
Banco do Brasil S.A., which establishes joint and several liability for the pecuniary obligations of Natura
Inovação in the event of the non-performance of said contract, which in addition to the principal of the debt,
also includes the interest, commissions, conventional penalties and other charges, until September 15, 2016.
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On January 21, 2008, the Corporation, Natura Indústria, Natura Logística e Serviços Ltda. ("Natura
Logística") and the BNDES executed a Financing Contract upon Credit Approval for a R$224.0 million
revolving credit line, which will be used to finance investments. The credit will be amortized in consecutive
monthly installments within a period to be established in the documents concerning use of the credit limit,
observing the maximum term of ninety months from the date of the execution of this contract. The
contracts signed to date total R$58.0 million, of which R$ 46.1 million was received, increasing the level of
debt of the Corporation and its subsidiaries. The contracts are secured by five bank guaranties issued by
Banco do Brasil S.A., which establish joint and several liability for the pecuniary obligations of Natura
Indústria and Natura Logística in the event of the non-performance of said contract, which in addition to the
principal of the debt, also includes the interest, commissions, conventional penalties and other charges, until
October 15, 2016.

On June 22, 2007, Natura Logística and the BNDES executed a Financing Contract upon Credit Approval in
the amount of R$3.8 million, which will be used to optimize the product picking lines at the Cajamar
industrial facility, hiring consultants for the new Distribution Centers and acquiring the equipment required
for this purpose. The credit will be amortized in seventy-two consecutive monthly installments, with the first
due on August 15, 2008 and the last due on July 15, 2014. The contract is secured by a Bank Guaranty
issued by Banco do Brasil S.A., which establishes joint and several liability for the pecuniary obligations of
Natura Logística in the event of the non-performance of said contract, which in addition to the principal of
the debt, also includes the interest, commissions, conventional penalties and other charges, until January 15,
2015.

On June 22, 2007, Natura Indústria and the BNDES executed a Financing Contract upon Credit Approval in
the amount of R$2.7 million, which will be used to optimize administrative activities at the Cajamar unit and
acquire the equipment required for this purpose. The credit will be amortized in seventy-two consecutive
monthly installments, with the first due on August 15, 2008 and the last due on July 15, 2014. The contract
is secured by a Bank Guaranty issued by Banco do Brasil S.A., which establishes joint and several liability for
the pecuniary obligations of Natura Indústria in the event of the non-performance of said contract, which in
addition to the principal of the debt, also includes the interest, commissions, conventional penalties and
other charges, until January 15, 2015.

Also on June 22, 2007, the Corporation and the BNDES executed a Financing Contract upon Credit
Approval in the amount of R$30.4 million, which will be used to install two new distribution centers in the
cities of Matias Barbosa and Jaboatão dos Guararapes and to optimize administrative activities at the
Itapecerica da Serra unit and acquire the equipment required for this purpose. The credit will be amortized
in seventy-two consecutive monthly installments, with the first due on August 15, 2008 and the last due on
July 15, 2014. The contract is secured by a Bank Guaranty issued by Banco do Brasil S.A., which establishes
joint and several liability for the pecuniary obligations of the Corporation in the event of the non-
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performance of said contract, which in addition to the principal of the debt, also includes the interest,
commissions, conventional penalties and other charges, until January 15, 2015.

On July 13, 2011, Natura Cosméticos and the BNDES executed a Financing Contract upon Credit Approval
in the amount of R$11.0 million, which will be used for two new Distribution Centers located in
Uberlândia/MG and Castanhal/PA and the revitalization of the Distribution Centers located in Matias
Barbosa/MG, Jaboatão dos Guararapes/PE, Simões Filho/BA and Canoas/RS, financing of working capital and
the acquisition of machinery and equipment required for these purposes. For R$9.3 million the credit will be
amortized in sixty consecutive monthly installments, with the first due on February 15, 2013 and the last due
on January 15, 2018, and for R$1.7 million the credit will be amortized in thirty-six consecutive monthly
installments, with the first due on February 15, 2013 and the last due on January 15, 2016. The contract has
financial covenant clauses that establish the following financial indicators: EBITDA margin equal to or greater
than 15%, Net Debt/EBITDA ratio equal to or less than two point five (2.5).

On July 13, 2011, Natura Indústria and the BNDES executed a Financing Contract upon Credit Approval in
the amount of R$10.4 million, which will be used to implement infrastructure improvements at the Cajamar
unit, finance working capital and acquire the machinery and equipment required for this purpose. For R$7.7
million the credit will be amortized in sixty consecutive monthly installments, with the first due on August
15, 2012 and the last due on July 15, 2017, and for R$2.7 million the credit will be amortized in thirty-six
consecutive monthly installments, with the first due on August 15, 2012 and the last due on July 15, 2015.
The contract has financial covenant clauses that establish the following financial indicators: EBITDA margin
equal to or greater than 15%, Net Debt/EBITDA ratio equal to or less than two point five (2.5).

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

- Financing Contract with Financiamento de Máquina e Equipamentos (FINEP)

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

On March 14, 2006, Natura Inovação and FINEP executed a Financing Contract in the amount of R$49.6
million, which will be used to partially cover the expenses incurred in preparing the project "Technology
Platforms for New Cosmetic and Nutritional Supplement Products". The credit will be amortized in forty-
nine consecutive monthly installments, with the first due on March 15, 2009 and the last due on March 15,
2013. The contract is secured by a ten Bank Guaranties issued by Banco ABN AMRO Real S.A., which
establishes joint and several liability for the pecuniary obligations of Natura Inovação in the event of the non-
performance of said contract, until March 15, 2013.

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

- FINAME - Financiamento de Máquina e Equipamentos

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

From 2007 to 2011, Natura Indústria executed 24 fixed loan contracts with the banks cited above to finance
machinery and equipment in the total amount of R$7.3 million, which had similar terms and conditions.
These contracts are secured by transferring the fiduciary ownership of the assets described in the respective
contracts. Natura Indústria is the trustee of these assets, with the Corporation as surety. Additionally, the
Corporation and its subsidiaries must comply with the Applicable Provisions of the BNDES Contracts and
the General Regulatory Conditions of Operations for FINAME operations.

On December 31, 2011, the fixed credit contracts (FatFomentar) involving Banco do Brasil S.A. amounted
to a combined R$2.7 million, due by February 2014.

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

Letter of Credit (CCB) ­ Onlending of Funds Raised Offshore via Resolution 4,131/62 contracted from
Banco Bradesco on June 6, 2011 with maturity on June 3, 2013 and principal of US$ 60.0 million. The
interest is amortized semiannually and the amount will be settled in a Treasury account at the end of the
contract.

Letter of Credit (CCB) ­ Onlending of Funds Raised Offshore via Resolution 4,131/62 contracted from
Banco do Brasil on June 10, 2011 with maturity on May 31, 2013 and principal of US$30.0 million. The
amortization of interest and the amount will be settled in a Treasury account at the end of the contract.

Letter of Credit (CCB) ­ Onlending of Funds Raised Offshore via Resolution 4,131/62 contracted from Bank
of America on October 11, 2011 with maturity on October 11, 2013 and principal of US$82,827,167.31
million. The interest is amortized quarterly and the amount will be settled in a Treasury account at the end
of the contract.

Letter of Credit (CCB) ­ Onlending of Funds Raised Offshore via Resolution 4,131/62 contracted from Bank
of America on October 31, 2011 with maturity on October 31, 2013 and principal of US$41,672,832.69
million. The interest is amortized quarterly and the amount will be settled in a Treasury account at the end
of the contract.

- Operations with derivatives

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

On April 13, 2010, the Corporation and HSBC Bank Brasil S.A executed a Cash Flow Swap and Forward
Cash Flow Swap Contract in the amount of R$2.8 million, with the specified settlement date of February 15,
2017.

On April 13, 2010, Natura Indústria and HSBC Bank Brasil S.A executed a Cash Flow Swap and Forward
Cash Flow Swap Contract in the amount of R$1.7 million, with the specified settlement date of April 15,
2016.

On April 7, 2010, the Corporation and HSBC Bank Brasil S.A executed a Cash Flow Swap and Forward
Cash Flow Swap Contract in the amount of R$1.8 million, with the specified settlement date of July 15,
2014.
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On January 29, 2009, the Corporation and Banco do Brasil S.A executed a Cash Flow Swap and Forward
Cash Flow Swap Contract in the amount of R$716,700, with the specified settlement date of January 15,
2013.

On December 7, 2011, the Corporation and Bank of America executed a Cash Flow Swap and Forward
Cash Flow Swap Contract in the amount of R$21.9 million, with the specified settlement date of December
15, 2016.

On June 6, 2011, the Corporation and Banco Bradesco executed a Swap Contract to hedge against currency
translation impacts for the loans contracted under the scope of Resolution 4,131/62 in the amount of
R$100.0 million, with the specified settlement date of June 3, 2013.

On June 10, 2011, the Corporation and Banco do Brasil executed a Swap Contract to hedge against
currency translation impacts for the loans contracted under the scope of Resolution 4,131/62 in the amount
of R$50.0 million, with the specified settlement date of May 31, 2013.

On October 11, 2011, the Corporation and Bank of America executed a Swap Contract to hedge against
currency translation impacts for the loans contracted under the scope of Resolution 4,131/62 in the amount
of R$150.0 million, with the specified settlement date of October 11, 2013.

On October 31, 2011, the Corporation and Bank of America executed a Swap Contract to hedge against
currency translation impacts for the loans contracted under the scope of Resolution 4,131/62 in the amount
of R$73.7 million, with the specified settlement date of October 31, 2013.

Other long term relations with financial institutions

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

Degree of subordination of debt

There is no subordination of our debts.

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

In 2011 and 2010, most of the borrowing and financing contracts maintained by the Corporation and its
subsidiaries do not contain financial covenants obligating the Corporation and its subsidiaries to maintain
certain financial ratios.
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41
The contract signed with the BNDES in July 2011 contained financial covenant clauses that required the
following financial ratios:

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

In 2011, the Corporation fully complied with all financial covenant clauses.

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

In accordance with the documents related to our fourth issue of Debentures, our Corporation is subject to
the following restrictions: (i) payment of dividends, of interest on equity or of any other interest in the
profits provided for by the Bylaws of the Issuer if our Corporation has defaulted on its pecuniary obligations
described in the Debenture Indenture, except, however, the payment of the minimum mandatory dividend
set forth in Article 202 of Federal Law 6,404 of 1976, as amended (Brazilian Law of Corporations); and (ii)
change in the direct or indirect control of our Corporation that results in the substitution of two-thirds of
the members of our Executive Board and/or Board of Directors must be approved by a Meeting of the
Debenture Holders.

(g) Limits on the use of financing already contracted

On December 31, 2011, the Corporation had an unused overdraft limit of R$235,500 and a total line of
contracted credit of R$1,186.7 million.
(h) Significant changes in each item of the financial statements
SUMMARY OF THE FINANCIAL STATEMENTS

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


PRESENTATION OF FINANCIAL STATEMENTS

The following aspects regarding the preparation and presentation of the financial statements should be
considered for a better understanding and analysis of the financial statements and any other related
accounting information included in this Document:
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42

Fiscal years ended in 2011, 2010 and 2009
·
The balance sheets (parent company and consolidated) prepared in 2011, 2010 and 2009 and
respective statements of income (parent company and consolidated), of comprehensive income
(parent company and consolidated), of changes in shareholders' equity (parent company and
consolidated), of cash flow (parent company and consolidated) and of value added (parent company
and consolidated) for the fiscal years ending in 2011, 2010 and 2009 were prepared in accordance
with Generally Accepted Accounting Principles in Brazil (BR GAAP) and the regulations of the
Securities and Exchange Commission of Brazil (CVM), including CVM Resolution 603/09, in which
the Management of the Corporation opted to move forward the adoption of the new technical
Pronouncements, Interpretations and Guidelines issued by the Accounting Pronouncements
Committee (CPC) in 2009 and in 2010, with mandatory application in the 2010 financial statements.

The auditor's opinion of the financial statements (parent company and consolidated) for the fiscal year
ending in 2011, 2010 and 2009 includes an emphasis of matter paragraph about the fact that the individual
financial statements were prepared in accordance with Generally Accepted Accounting Principles in Brazil
(BR GAAP), with the investments in subsidiaries, affiliates and shared-control companies valued using the
equity method, and that these practices differ from International Financial Reporting Standards (IFRS), under
which these investments are stated at historical cost or fair value.

The abovementioned financial statements were audited by Touche Tohmatsu Independent Auditors in
accordance with the applicable audit standards in Brazil.

(h) Summary of accounting practices


The accounting practices adopted in Brazil consist of those included in Brazilian corporation law and the
pronouncements, guidelines and interpretations issued by the Accounting Pronouncements Committee
(CPC) and approved by the Securities and Exchange Commission of Brazil (CVM).
The individual financial statements present the valuation of investments in subsidiaries, shared-control
companies and affiliates by the equity method in accordance with the Brazilian laws in force. Therefore,
these individual financial statements are not considered in compliance with IFRS, which requires that these
investments be valued in the separate statements for the parent company at their fair value or acquisition
cost.
Since there is no difference between the consolidated shareholders' equity and the consolidated net income
attributable to the shareholders of the parent company stated in the consolidated financial statements
prepared in accordance with IFRS and BRGAAP and the shareholders' equity and net income of the parent
company stated in the individual financial statements prepared in accordance with BRGAAP, the
Corporation opted to present these individual and consolidated financial statements in a single set, side by
side.
The financial statements were prepared based on historical cost, except for certain financial instruments
measured at fair value, as described in the following accounting practices. Historical cost is generally based
on the fair value of the considerations paid in exchange for assets.
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43

Adoption of accounting pronouncements issued in 2011

The interpretations and amendments to the existing rules below were issued and in force in 2011. However,
they did have any material impacts on the Corporation's financial statement:
Rule
Main requirements
Date it took effect
Improvements to IFRSs -
2010
Amendment of various accounting
standards
Effective for fiscal years beginning on
or after January 1, 2011
Amendments to IFRS 1
Limited exemption from comparative IFRS
7 disclosures for first-time adopters
Effective for fiscal years beginning on
or after July 1, 2010
Amendments to IAS 24
Related-party disclosures
Effective for fiscal years beginning on
or after January 1, 2011
Amendments to IFRIC 14
Prepayments
of
minimum
funding
requirements
Effective for fiscal years beginning on
or after January 1, 2011
Amendments to IAS 32
Classification of issue rights
Effective for fiscal years beginning on
or after February 1, 2010
IFRIC 19
Extinguishing liabilities by issues of equity
instruments
Effective for fiscal years beginning on
or after July 1, 2010
The following rules and amendments to existing rules were published and are mandatory for periods starting
after 2011. However, the Corporation did not opt for the early adoption of these rules and amendments.
Rule
Main requirements
Date it took effect
IFRS 9 (as amended in 2010) Financial instruments
Effective for fiscal years beginning on
or after January 1, 2013
Amendments to IFRS 1
Release from fixed dates for first-time
adopters
Effective for fiscal years beginning on
or after July 1, 2011
Amendments to IFRS 7
Disclosures - transfers of financial assets Effective for fiscal years beginning on
or after July 1, 2011
Amendments to IAS 12
Deferred taxes - recovery of the
underlying assets when an asset is
measured using the fair value model
under IAS 40
Effective for fiscal years beginning on
or after January 1, 2012
IAS 28 (revised in 2011)
Investments in Associated
Companies and Companies
under joint control
Amendment to IAS 28 to include the
changes introduced by IFRSs 10, 11 and
12
Effective for fiscal years beginning on
or after January 1, 2013
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44
Rule
Main requirements
Date it took effect
IAS 27 (revised in 2011)
Separate Financial
Statements
The IAS 27 requirements relating to the
consolidated financial statements were
replaced by IFRS 10. The requirements
applicable
to
separate
financial
statements remained unchanged.
Effective for fiscal years beginning on
or after January 1, 2013
IFRS 10 - Consolidated
Financial Statements
Replaced the IAS 27 requirements
applicable to consolidated financial
statements and SIC 12. IFRS 10 provides
a single consolidation model that
identifies control as the basis for
consolidation for all types of entities.
Effective for fiscal years beginning on
or after January 1, 2013
IFRS 11 ­ Joint Arrangements Eliminates the option of proportionate
consolidation model. Joint ventures
should be accounted for under the
equity method. IFRS 11 also eliminates
the existing concept of "jointly
controlled assets" and classifies joint
arrangements
as
either
"joint
operations" or "joint ventures".
Effective for fiscal years beginning on
or after January 1, 2013
IFRS 12 - Disclosure of
Interests in Other Entities
Requires enhanced disclosures on
investments in entities in which the
Corporation has significant influence.
Effective for fiscal years beginning on
or after January 1, 2013
IFRS 13 - Fair Value
Measurement
Replaces and consolidated all guidelines
and requirements related to the fair
value measurement guidance currently
dispersed across different IFRS standards
with a single pronouncement. IFRS 13
defines fair value and provides guidance
on how to measure fair value and
requirements for disclosure relating to
fair value measurement. However, it
does not introduce new or revised
requirements for when fair value
measurement is required, since these
requirements remain unchanged.
Effective for fiscal years beginning on
or after January 1, 2013
Amendments to IAS 19 -
Employee Benefits
Eliminates the corridor approach. All
actuarial gains and losses should be
recognized
through
other
comprehensive income (OCI) for
pension plan and through profit or loss
for other long-term benefits, when
incurred, and introduces other changes.
Effective for fiscal years beginning on
or after January 1, 2013
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45
Rule
Main requirements
Date it took effect
Amendments to IAS 1 -
Presentation of Financial
Statements
Requires that group items presented in
other comprehensive income (OCI) are
segregated between items that might be
subsequently reclassified to profit or loss
and those that will not be reclassified to
profit or loss.
Effective for fiscal years beginning on
or after January 1, 2013
In view of the current operations of the Corporation and its subsidiaries, Management does not expect
these new rules, interpretations and amendments to have a material effect on the financial statements as of
their adoption.

The CPC has not yet issued the respective pronouncements and modifications related to the new and
revised IFRS presented earlier. Due to the commitment of the CPC and the CVM to update the set of rules
issued based on the updates made by the International Accounting Standards Board (IASB), these
pronouncements and modifications are expected to be issued by the CPC and approved by the CMV by the
date of their mandatory application.

Income Statements, Balance Sheets and Additional Financial Information

The following income statements, balance sheets and additional consolidated financial information for the
periods indicated were prepared in accordance with BR GAAP:
Fiscal year ended
2011
VA
(1)
2010
VA
(1)
2009
VA
(1)
Change
11/10
Change
10/09
(R$ million, earnings per share for the year)

Net Revenue ........................................................................................................
5,591.4
100%
5,136.7
100%
4,242.1
100%
8.9%
21.1%
Cost of products sold ........................................................................................
(1,666.3)
29.8%
(1,556.8)
30.3%
(1,294.6)
30.5%
7.0%
20.3%
Gross Profit ...................................................................................
3,925.1
70.2%
3,579.9
69.7%
2,947.5
69.5%
9.6%
21.5%
Operating (expenses) income
Selling ................................................................................................................
(1,952.7)
34.9%
(1,704.3)
33.2%
(1,496.1)
35.3%
14.6%
13.9%
General and administrative .........................................................................
(680.7)
12.2%
(605.4)
11.8%
(450.9)
10.6%
12.4%
34.3%
Employee profit sharing ...............................................................................
(30.2)
0.5%
(70.4)
1.4%
(55.8)
1.3%
(57.1%)
26.1%
Management compensation .........................................................................
(9.4)
0.2%
(14.4)
0.3%
(14.1)
0.3%
(34.4%)
2.3%
Other operating (expenses) income, net .................................................
63.1
1.1%
(17.5)
0.3%
(14.6)
0.3%
(460.4%)
19.7%
Operating profit before financial result .....................................
1,315.1
23.5%
1,167.9
22.7%
916.0
21.6%
12.6%
27.5%
Financial income .............................................................................................
122.7
2.2%
53.6
1.0%
84.2
2.0%
128.9%
(36.3%)
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46
Financial expenses .........................................................................................
(200.0)
3.6%
(103.4)
2.0%
(126.0)
3.0%
93.5%
(17.9%)
Net Income before income tax and social
contribution ..............................................................................
1,237.7
22.1%
1,118.2
21.8%
874.2
20.6%
10.7%
27.9%
Income tax and social contribution ...........................................................
(406.8)
7.3%
(374.1)
7.3%
(190.3)
4.5%
8.7%
96.6%
Net income for the year ..............................................................
830.9
14.9%
744.1
14.5%
683.9
16.1%
11.7%
8.8%
Attributable to: ....................................................................................................
Shareholders of the Company ....................................................................
830.9
14.9%
744.1
14.5%
683.9
16.1%
11.7%
8,80%
Noncontrolling shareholders ...................................................................... -
-
-
-
-
-
-
-
Earnings per share for the year ­ R$ ..............................................................
1,9320
1,7281
1,5926
11.8%
8,51%
_______________________
(1)
Vertical analysis

Balance sheets prepared in 2011, 2010 and 2009

The following tables present a summary of the consolidated Balance Sheets prepared in 2011, 2010 and
2009, as well as the variations occurring between the periods presented:
Fiscal year ended
Balance Sheet
2011
VA
(1)
2010
VA
(1)
2009
VA
(1)
Change
11/10
Change
10/09
(R$ million)
Assets
Current assets
Cash and cash equivalents
515.6
13.6%
560.2
17.4%
500.3
18.3%
-8.0%
12.0%
Trade accounts receivable
641.9
16.9%
570.3
17.7%
452.9
16.5%
12.6%
25.9%
Inventories
688.7
18.2%
571.5
17.7%
509.6
18.6%
20.5%
12.2%
Recoverable taxes
201.6
5.3%
101.5
3.1%
191.2
7.0%
98.7%
-46.9%
Unrealized gains with derivative operations
28.6
0.8%
-
0.0%
-
0.0%
n/d
n/d
Other receivables
126.8
3.3%
66.4
2.1%
62.4
2.3%
90.9%
6.4%
Total current assets
2,203.3
58.1% 1,869.9
58.0% 1,716.4
62.6%
17.8%
8.9%
Noncurrent assets
Long-term assets:
Recoverable taxes
111.2
2.9%
109.3
3.4%
63.9
2.3%
1.8%
71.0%
Deferred Income and Social Contribution
taxes
189.6
5.0%
180.3
5.6%
146.1
5.3%
5.2%
23.4%
Escrow deposits
295.8
7.8%
337.0
10.5%
232.4
8.5%
(12.2%)
45.0%
Other noncurrent assets
29.9
0.8%
44.9
1.4%
7.4
0.3%
(33.3%)
506.9%
Property, plant and equipment
800.4
21.1%
560.5
17.4%
492.3
18.0%
42.8%
13.8%
Intangible assets
162.8
4.3%
120.1
3.7%
82.7
3.0%
35.5%
45.2%
Total noncurrent assets
1,589.8
41.9%
1,352.0
42.0%
1,024.8
37.4%
17.6%
31.9%
Total assets
3,793.0
100.0%
3,221.9
100.0%
2,741.2
100.0%
17.7%
17.5%
Liabilities
Current liabilities
Borrowings and financing
169.0
4.5% 226.6
7.0% 569.4
20.8%
(25.4%)
(60.2%)
Trade and other payables
489.0
12.9% 366.5
11.4% 255.4
9.3%
33.4%
43.5%
Payroll, profit sharing and related taxes
132.0
3.5% 162.8
5.1% 130.8
4.8%
(18.9%)
24.4%
Taxes payable
446.8
11.8% 366.0
11.4%
239.6
8.7%
22.1%
52.8%
Provision for tax, civil and labor risks
-
0.0%
-
0.0%
1.5
0.1%
n/d
(100.0%)
Derivatives
-
0.0%
4.1
0.1%
8.7
0.3%
(100.0%)
(53.3%)
Other payables
37.9
1.0%
52.1
1.6%
30.0
1.1%
(27.1%)
73.4%
Total current liabilities
1,274.7
33.6%
1,178.0
36.6%
1,235.4
45.1%
8.2%
(4.6%)
Noncurrent liabilities
Borrowings and financing
1,017.7
26.8%
465.1
14.4%
135.0
4.9%
118.8%
244.5%
Provision for tax, civil and labor risks
65.0
1.7%
73.8
2.3%
71.4
2.6%
(12.0%)
3.3%
Taxes payable
140.5
3.7%
215.1
6.7%
150.3
5.5%
(34.7%)
43.1%
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47
Fiscal year ended
Balance Sheet
2011
VA
(1)
2010
VA
(1)
2009
VA
(1)
Change
11/10
Change
10/09
Other payables
44.8
1.2%
32.4
1.0%
9.3
0.3%
38.2%
247.2%
Total noncurrent liabilities
1,268.0
33.4%
786.4
24.4%
366.0
13.4%
61.2%
114.8%
Shareholders' Equity
Capital
427.1
11.3%
418.1
13.0%
404.2
14.7%
2.2%
3.4%
Capital reserves
160.3
4.2%
149.6
4.6%
143.0
5.2%
7.1%
4.6%
Earnings reserves
292.5
7.7%
282.9
8.8%
253.7
9.3%
3.4%
11.5%
Treasury shares
(102.8)
(2.7%)
-
0.0%
-
0.0%
n/d
n/d
Proposed additional dividend
490.9
12.9%
430.1
13.3%
357.6
13.0%
14.1%
20.3%
Other comprehensive income
(17.6)
(0.5%)
(23.2)
(0.7%)
(18.7)
(0.7%)
(24.0%)
24.1%
Total shareholders' equity
1,250.2
33.0%
1,257.5
39.0%
1,139.8
41.6%
-0.6%
10.3%
Total liabilities and shareholders'
equity
3,793.0
100.0%
3,221.9
100.0%
2,741.2
100.0%
17.7%
17.5%
_______________________
(1)
Vertical analysis.

Comparison of the operating results in the fiscal years ended in 2011 and 2010

Gross revenue

Our gross revenue was R$7,535.8 million in 2011, an increase of 8.3% from the gross revenue of R$6,959.8
million in 2010, mainly due to the increases in the quantity of products sold and the average price of
products sold in the period.

Domestic sales

The 6.3% increase in sales in the domestic market can be broken down into the 9.7% increase in the
quantity of units sold (which reached 410.5 million units sold in 2011, compared to R$378.7 million in 2010)
and the 8.4% increase in the average price of products sold.

The following table presents a breakdown of our gross revenue by segment:
Opening gross revenue balance (R$ million)
Fiscal year ended
Change
2011/2010 (%)
December
31, 2011
December
31, 2010
Domestic market .........................................................................................................
6,896.7
6,487.1
6.3%
Foreign market ­international operations
(1)

..........................................................
633.0
463.6
36.5%
Other sales domestic market
(2)

...............................................................................
1.4
1.5
(6.7%)
Other sales foreign market
(3)
..................................................................................
4.7
7.6
(38.2%)
Gross revenue ..............................................................................................................
7,535.8
6,959.8
8.3%
(1)
Sales made by the subsidiaries in Argentina, Chile, Colombia, France, Mexico and Peru.
(2)
Sales of scrap.
(3)
Sales made by our distributor in Bolivia and Duty Free.

The increase in the quantity of items sold is largely due to (i) the 18.0% increase in the average number of
Natura Consultants; (ii) the better results achieved by our marketing efforts (promotions and media); and
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48
(iii) the launch of new products.

Export sales

The revenue from sales at our international operations was R$637.7 million in 2011, up 35.3% from the
export sales in 2011 of R$471.2 million. In weighted local currency, in 2011 compared to 2010, export sales
grew by 31.5% in the operations in consolidation (Argentina, Chile and Peru) and by 51.7% in the operations
in implementation (Colombia and Mexico). This performance was directly related to the consistent growth
in the number of Natura Consultants (average increase of 27.4% in the number of Natura Consultants in
these countries) and the results from the higher investments in marketing.

Sales tax, returns and cancellations

Sales tax, returns and deductions increased 6.7% to R$1,944.4 million in 2011, compared to R$1,823.1
million in 2010, mainly due to the higher sales described above.

Net revenue

In view of the above, the Corporation's net revenue was R$5,591.4 million in 2011, up 8.9% from the net
revenue of R$5,136.7 million in 2010.

Cost of goods sold

Cost of goods sold was R$1,666.3 million in 2011, increasing 7.0% from the cost of goods sold of R$1,556.8
million in 2010.

The following table presents the components of cost of goods sold for the periods indicated and the
percentage variation in each component:
(R$ million)
Fiscal year ended
Change
2011/2010
(%)
2011
2010
Raw material for products and packaging
(1)
and products for resale
(2)
...........
1,385.6
1,276.6
8.5%
Labor ..............................................................................................................................
156.7
118.3
32.5%
Depreciation .................................................................................................................
38.6
46.7
(17.3%)
Other costs
(3)
...............................................................................................................
85.4
115.2
(25.9%)
Cost of products sold ................................................................................................
1,666.3
1,556.8
7.0%
(1)
Mainly plastics, glass, printing and fragrances.
(2)
Products made by third parties, soaps, hair care products, etc.
(3)
"Other costs" includes electricity, water, gas, consulting services, IT services and other items.

As a ratio of net revenue, our cost of goods sold decreased to 29.8% in 2011, compared to 30.3% in 2010.
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49
This decrease was mainly due to the control of cost pressures, the appreciation in the Brazilian real against
the U.S. dollar (around 15% of our total costs is pegged to the dollar) and the efficient pricing strategy,
which was partially offset by the increase in the value of losses in Brazil.

Additionally, there were cost reductions in the production process and scale gains: we produced 330.7
million units in 2011, compared to 291.2 million units produced in 2010, representing growth of 30.8% from
2010.

Gross profit

In view of the above, gross profit increased 9.6% to R$3,925.1 million in 2011, compared to gross profit of
R$ 3,579.9 million in 2010. Our gross margin increased to 70.2% in 2011, from 69.7% in 2010. The gross
margin expansion in the period was basically due to the better ratio of cost of goods sold to net revenue
explained above.

Operating revenue (expenses)

Operating expenses were R$2,609.9 million in 2011, representing an increase of 8.2% from the operating
expenses of R$2,412.0 million in 2010.

This following table presents the composition of our operating revenue (expenses) for the periods indicated
and the percentage variation in each component:
(R$ million)
Fiscal year ended
Change
2011/2010 (%)
2011
2010
Selling expenses ...........................................................................................................
1,952.7
1,704.3
14.6%
General and administrative expenses .....................................................................
680.7
605.4
12.4%
Employee profit sharing .............................................................................................
30.2
70.4
(57.2%)
Management compensation ......................................................................................
9.4
14.4
(34.4%)
Other operating (expenses) income, net ..............................................................
63.1
17.6
(460.4%)
Net operating expenses .............................................................................................
2,609.9
2,412.0
8.2%

Selling expenses

Selling expenses increased from R$1,704.3 million in the fiscal year ending in 2010 to R$1,952.7 million in
the fiscal year ending in 2011. As a ratio of net revenue, selling expenses increased to 34.9% in 2011,
compared to 33.2% in 2010. Selling expenses remained aligned with the Corporation's strategy and
consistent with the competitive environment. In 2011, we increased our marketing investments in both
support for product launches and training and events for the sales team. This increase was mitigated by the
higher efficiency in logistics operations and the dilution of costs with our sales team. The number of orders
made over the Internet in Brazil reached 92.0% in the year (86.0% in 2010).
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General and administrative expenses

General and administrative expenses increased from R$605.4 million in the fiscal year ending in 2010 to
R$680.7 million in 2011. As a ratio of net revenue, general and administrative expenses increased to 12.2%
in 2011, compared to 11.8% in 2010. The increase in administrative expenses in relation to the prior year is
in line with our plans, due to: (i) the increase in expenses with research and development, from 2.8% to
2.9% of net revenue; (ii) the higher investments in projects that will support the Corporation's growth,
especially in the areas of information technology, logistics and leadership development; (iii) the increase in
the number of employees to support the evolution in the processes management model to support the
Business Unit and Regional Units; (iv) the costs with the continued investments in information technology.

Employee profit sharing

The expense with the employee profit sharing plan decreased from R$70.4 million in 2010 to R$30.2 million
in 2011. This reduction is explained by not meeting the targets and the employee profit sharing policy for
the year.

Management compensation

Management compensation decreased from R$14.1 million in 2010 to R$9.4 million in 2011.

Other net operating revenue (expenses)

Other net operating revenue (expenses) decreased from an expense of R$17.5 million in the fiscal year
ending in 2010 to revenue of R$63.1 million in 2011. This variation was largely driven by the non-recurring
impact from the recognition of PIS and Cofins tax credits on services relative to other periods, the
negotiations to reduce the value added margin (MVA) used to calculate ICMS state VAT tax on direct sales
in the state of Paraná and in the Federal District and the recognition of a contingent PIS and Cofins asset
associated with credits from taxes on both financial income and storage operations.

Net financial income (expenses)

The Corporation recorded a net financial expense of R$77.3 million in 2011, compared to the net financial
expense of R$49.8 million in 2010.

Financial expense increased to R$200.0 million in 2011, compared to R$103.4 million in 2010. This variation
was largely due to the higher interest on the Corporation's loans.

Financial income increased to R$122.7 million in 2011, from R$53.6 million in 2010. The highlight was the
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51
gains from derivative operations contracted to provide a currency hedge for the Corporation's positions
with exposure.

Most of the debts contracted in foreign currency have derivative operations contracted to eliminate from
the financial result the effects of currency translation that offset any decreases in financial income and any
increases in financial expenses. In practice, the variation in the CDI interbank overnight rate serves as the
reference for our debt profile.

Income tax and social contribution tax (CSLL)

Income tax and social contribution tax (CSLL) increased to R$406.8 million in 2011, from R$374.1 million in
2010. The variation in expenses with income tax and CSLL was driven by the higher operating income in the
period.

Net income

For the abovementioned reasons, our net income increased to R$830.9 million in 2011 (14.9% of net
revenue), compared to R$744.1 million in 2010 (14.5% of net revenue).

Other information and non-accounting measures

EBITDA

Our EBITDA reached R$1,425.0 million in 2011, increasing 13.4% from the EBITDA of R$1,256.8 million in
2010. Our EBTIDA margin was 25.5% in 2011, increasing from 24.5% in 2010.

The following table presents a conciliation of net income with EBITDA for the periods indicated.
Fiscal year ended
2011
2010
Change
2011/2010 (%)
Net income ......................................................................................................
830.9
744.1
11.7
(+) Depreciation and amortization ...........................................................
109.9
88.8
23.6
(+) Net financial income (expenses) .........................................................
77.3
49.8
55.4
(+) Income and Social Contribution taxes ..............................................
406.8
374.1
8.7
EBITDA .............................................................................................................
1,425.0
1,256.8
13.4


Comparison of Main Equity Accounts in 2011 and 2010
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ASSETS

Current assets

In 2011, Current assets were R$2,203.3 million, up 17.8% from 2010. The increase was mainly due to the
higher balance of Inventories, Recoverable taxes and Other receivables, as explained below:

Cash and cash equivalents

In 2011, the balance of Cash and cash equivalents was R$515.6 million, down 8.0% from 2010. This variation
is explained by higher use of the Corporation's cash for the increase in inventory coverage and the lower
offsetting of recoverable taxes. Cash and cash equivalents corresponded to 13.6% of our assets in 2011,
compared to 17.4% in 2010.

Trade accounts receivable

In 2011, Trade accounts receivable was R$641.9 million, up 12.6% from 2010. The increase was due to the
gross revenue growth in the period and the expansion of the international operations.

Trade accounts receivable corresponded to 16.9% of our assets in 2011, compared to 17.7% in 2010.

Inventories

In 2011, the balance of Inventories was R$688.7 million, up 20.5% from 2010. This variation was largely due
to the growth in the Corporation's sales, the higher coverage in our international operations, the opening of
new Distribution Centers and the build in Inventories to meet the growing demand.

The account Inventories corresponded to 18.2% of our assets in 2011, compared to 17.7% in 2010.

Recoverable taxes

In 2011, the balance of Recoverable taxes in the short term was R$201.6 million, increasing 98.7% from the
balance in 2010 of R$101.5 million. Additionally, Recoverable taxes corresponded 5.3% of our total assets in
2011, compared to 3.2% in 2010. This variation was largely driven by the non-recurring impact from the
recognition of PIS and Cofins tax credits on services relative to other periods, the negotiations to reduce
the value added margin (MVA) used to calculate ICMS state VAT tax on direct sales in the state of Paraná
and in the Federal District and the recognition of a contingent PIS and Cofins asset associated with credits
from taxes on both financial income and storage operations.

Non-current assets
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In 2011, Non-current assets were R$1,589.8 million, up 17.6% from 2010. This increase is attributable
mainly to an increase in the balance of Recoverable taxes, Escrow deposits, Deferred income tax and CSLL,
Property, plant and equipment and Intangible assets, as explained below.

Recoverable taxes

In 2011, the balance of Recoverable taxes in the long term was R$111.2 million, increasing 1.8% from the
balance in 2010 of R$109.3 million. Additionally, Recoverable taxes in the long term corresponded to 2.9%
of our total assets in 2011, compared to 3.4% in 2010. This change is largely due to the reclassification of
ICMS credits on exports for the period prior to 2009. These recoverable taxes will be reimbursed over the
next few years as they are released by the São Paulo State Treasury (Sefaz).

Deferred income tax and social contribution tax

In 2011, the balance of the Deferred Income Tax and CSLL accounts was R$189.6 million, up 5.2% from
2010. This variation was largely due to the deferred amounts arising from various tax liabilities, the creation
of actuarial provisions and other temporary provisions. Deferred Income Tax and CSLL corresponded to
5.0% of our assets in 2011, compared to 5.5% in 2010.

Escrow Deposits

In 2011, the balance of Escrow deposits was R$295.8 million, down 12.2% from the balance in 2010. This
variation was basically due to the negotiations of the Value Added Margin (MVA) in the state of Paraná, with
a new agreement signed in November 2011. Escrow deposits account for 7.8% of our assets in 2011,
compared to 10.5% in 2010.

Property, plant and equipment

In 2011, Property, plant and equipment accounts was R$800.4 million, up 42.8% from 2010. This variation
was due to the highest investment ever in our history, with R$346.4 million in capital expenditure allocated
to production, logistics and technology projects, which are indispensable for sustaining our growth, which
was partially offset by the depreciation in the period. The Property, plant and equipment account
represented 21.1% of our total assets in 2011, compared to 17.4% in 2010.

Intangible assets

In 2011, Intangible assets came to R$162.8 million, up 35.5% from 2010. The main driver of this increase was
the acquisition of new software. The Intangible Assets account represented 4.3% of our total assets in 2011,
compared to 3.7% in 2010.
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LIABILITIES

Current liabilities

In 2011, Current liabilities were R$1,274.7 million, up 8.2% from 2010. This decrease was largely due to the
higher balance of Domestic suppliers and Taxes payable, as explained below.

Borrowings and financing

In 2011, the balance of Borrowings and financing was R$169.0 million, which was R$57.6 million higher than
in 2010. This variation was mainly due to the new short-term loans contracted for working capital needs.
Borrowings and financings corresponded to 4.5% of our total liabilities and shareholders' equity in 2011,
compared to 7.0% in 2010.

Trade and other payables

In 2011, the balance of Trade and other payables was R$489.0 million, increasing 33.4% from 2010, driven by
the growth in the Corporation's sales, which led to higher purchases of raw materials and packaging to form
inventories, given the higher sales and the strategies of the new Distribution Centers. The balance of Trade
and other payables corresponded to 12.9% of our total liabilities and shareholders' equity in 2011, compared
to 11.4% in 2010.

Payroll, profit sharing and related taxes

In 2011, the account Payroll, profit sharing and related taxes was R$132.0 million, down 18.9% from
R$162.8 million in 2010, due to not meeting the internal profit sharing targets for the period. This account
Payroll, profit sharing and related taxes represented 3.5% of our total liabilities and shareholders' equity in
2011, compared to 5.1% in 2010.

Taxes payable

In 2011, Taxes payable were R$446.8 million, increasing 22.1% from R$366.0 million in 2010, largely due to
the higher sales in the period and to the questioning of the ICMS tax balances included in the calculation of
the PIS and COFINS tax base. The account Taxes payable represented 11.8% of our total liabilities and
shareholders' equity in 2011, compared to 11.4% in 2010.

Unrealized Gains/Provision for losses in derivatives trading

In 2011, the account Provision for gains in derivatives trading was a debit balance of R$28.6 million, which
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represented 0.8% of our total assets, versus the credit balance in the Provision for losses in derivatives
trading of R$ 4.1 million in 2010. The market value of these instruments was R$406.9 million and R$90.3
million in 2011 and 2010, respectively.

Other payables

In 2011, the balance of the account Other payables was R$37.9 million, decreasing 27.1% from R$52.1
million in 2010. The account Other payables represented 1.0% of our total liabilities and shareholders'
equity in 2011, compared to 1.6% in 2010.

Non-current liabilities

In 2011, Non-current liabilities were R$1,268.0 million, up 61.2% from 2010. This increase was largely due
to the proceeds from new Borrowings and financing in the period.

Borrowings and financing

In 2011, Borrowings and financing amounted to R$1,017.7 million, growing 118.8% from 2010. Borrowings
and financings corresponded to 26.8% of our total liabilities and shareholders' equity in 2011, compared to
14.4% in 2010.

Provision for tax, civil and labor contingencies

In 2011, the provision for contingent liabilities was R$65.0 million, decreasing 12.0% from 2010. Provisions
for tax, civil and labor contingencies represented in the long term 1.7% of total liabilities in 2011 and 2.3% in
2010.

Taxes payable

In 2011, the account Taxes payable in the long term was R$140.5 million, decreasing 34.7% from R$215.1
million in 2010, mainly due to the agreement in the state of Paraná for the tax issues regarding the level of
the value added margin (MVA). The account Taxes payable in the long term represented 3.7% of our total
liabilities and shareholders' equity in 2011, compared to 6.5% in 2010.

Shareholders' equity

Shareholders' equity decreased from R$1,257.5 million in 2010 to R$1,250.2 million in 2011, basically due to
(i) the net income in 2011, net of dividends distributed and proposed and of interest on equity; (ii) the
cumulative adjustment in the translation of the financial statements of the Corporation's overseas
subsidiaries; and (iii) the acquisition of treasury stock.
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Other equity accounts

Any equity accounts not mentioned above did not show any significant variations between the balances in
2011 and 2010.

Comparison of Main Equity Accounts on December 31, 2010 and December 31, 2009

ASSETS

Current assets

In 2010, Current assets were R$1,869.9 million, up 8.9% from 2009. This increase was mainly due to the
higher balance of Cash and cash equivalents, Inventories and Accounts receivable, as explained below:

Cash and cash equivalents

In 2010, the balance of Cash and cash equivalents was R$560.2 million, up 12% from 2009. This variation is
explained by the better management of the Corporation's working capital, with a reduction in the average
coverage of inventories and the offsetting of taxes recoverable. Cash and cash equivalents corresponded to
17.4% of our assets in 2010, compared to 18.3% in 2009.

Trade accounts receivable

In 2010, Trade accounts receivable was R$570.3 million, up 25.9% from 2009. The increase was due to the
gross revenue growth in the period and the expansion of the international operations.

Trade accounts receivable corresponded to 17.7% of our assets in 2010, compared to 16.5% in 2009.

Inventories

In 2010, the balance of Inventories was R$571.5 million, up 12.2% from 2009. This variation was largely due
to the growth in the Corporation's sales, the higher coverage in our international operations, the opening of
new Distribution Centers and the build in Inventories to meet the growing demand.

The account Inventories corresponded to 17.7% of our assets in 2010, compared to 18.6% in 2009.

Recoverable taxes

In 2010, the balance of Recoverable taxes was R$101.5 million, decreasing 46.9% from the balance in 2009
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of R$191.2 million. Additionally, Recoverable taxes corresponded 3.2% of our total assets in 2010,
compared to 7.0% in 2009. This change was largely due to offsetting under the special regime mechanism for
accrued ICMS substitute credits paid in advance by Natura Indústria, due to the new system for calculating
ICMS in force since February 2008 in the state of São Paulo.

Non-current assets

In 2010, Non-current assets were R$1,352.0 million, up 31.9% from 2009. This increase is attributable
mainly to an increase in the balance of Recoverable taxes, Escrow deposits, Deferred income tax and CSLL,
Property, plant and equipment and Intangible assets, as explained below.

Recoverable taxes

In 2010, the balance of Recoverable taxes in the long term was R$109.3 million, increasing 71.0% from the
balance in 2009 of R$63.9 million. Additionally, Recoverable taxes in the long term corresponded to 3.4% of
our total assets in 2010, compared to 2.3% in 2009. This change is largely due to the reclassification of ICMS
credits on exports for periods prior to 2009. These recoverable taxes will be reimbursed over the next few
years as they are released by the São Paulo State Treasury (Sefaz).

Deferred income tax and social contribution tax

In 2010, the balance of Deferred income tax and social contribution tax (CSLL) was R$180.3 million, up
23.4% from 2009. This variation was largely due to the deferred amounts arising from various taxes payable,
the creation of actuarial provisions and other temporary provisions. Deferred Income Tax and CSLL
corresponded to 5.5% of our assets in 2010, compared to 5.3% in 2009.

Escrow deposits

In 2010, the balance of Escrow deposits was R$337.0 million, increasing 45.0% from the balance in 2009.
This change was mainly due to the increase in tax deposits related to the questioning of the valued added
margin (MVA) in the states of Paraná, Federal District and Mato Grosso do Sul, which were duly provisioned
for in the account taxes payable. The Escrow deposits account represented 10.5% of our assets in 2010,
compared to 8.5% in 2009.

Property, plant and equipment

In 2010, Property, plant and equipment was R$560.5 million, up 13.8% from 2009. The change is due to the
acquisitions made in the period of R$175.2 million, which was partially offset by the depreciation in the
period. The Property, plant and equipment account represented 17.4% of our total assets in 2010, compared
to 18% in 2009.
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Intangible assets

In 2010, Intangible assets came to R$120.1 million, up 45.2% from 2009. The main driver of this increase was
the acquisition of new software. The Intangible Assets account represented 3.7% of our total assets in 2010,
compared to 3.1% in 2009.

LIABILITIES

Current liabilities

In 2010, Current assets were R$1,178.0 million, down 4.6% from 2009. This decrease was mainly due to the
lower balance in Current liabilities of Borrowings and financing due to the Debentures issue, which was
partially offset by the higher balances of Domestic suppliers and Taxes payable, as explained below.

Borrowings and financing

In 2010, the balance of Borrowings and financing was R$226.6 million, down 60.2% from 2009. This variation
was basically due to the reclassification of a portion of borrowings to long term borrowings, due to the
R$350-million debentures issue. Borrowings and financings corresponded to 7.0% of our total liabilities and
shareholders' equity in 2010, compared to 20.8% in 2009.

Trade and other payables

In 2010, the balance of Trade and other payables was R$366.5 million, increasing 43.5% from 2009, driven by
the growth in the Corporation's sales, which led to higher purchases of raw materials and packaging to form
inventories, given the higher sales and the strategies of the new Distribution Centers. The balance of Trade
and other payables corresponded to 11.4% of our total liabilities and shareholders' equity in 2010, compared
to 9.3% in 2009.

Payroll, profit sharing and related taxes

In 2011, the account Payroll, profit sharing and related taxes was R$162.8 million, increasing 24.4% from
R$130.8 million in 2009, driven by the higher number of employees. This account Payroll, profit sharing and
related taxes represented 5.1% of our total liabilities and shareholders' equity in 2010, compared to 4.8% in
2009.

Taxes payable

In 2010, the account Taxes payable was R$366.0 million, increasing 52.8% from R$239.6 million in 2009,
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largely due to the higher sales in the period and to the questioning of the valued added margin (MVA) in the
states of Paraná, Federal District and Mato Grosso do Sul. The account Taxes payable represented 11.4% of
our total liabilities and shareholders' equity in 2010, compared to 8.7% in 2009.

Unrealized Gains/Provision for losses in derivatives trading

In 2010, the balance of the account Provisions for losses in derivatives trading was R$4.1 million (0.1% of
our total liabilities and shareholders' equity), compared to R$8.7 million in 2009. The market value of these
instruments was R$90.3 million and R$193.6 million in 2010 and 2009, respectively.

Other payables

In 2010, the balance of the account Other payables was R$52.1 million, increasing 73.4% from R$30.0 million
in 2009. The account Other payables represented 1.6% of our total liabilities and shareholders' equity in
2010, compared to 1.1% in 2009.

Non-current liabilities

In 2010, Non-current liabilities were R$786.4 million, up 114.8% from 2009. This increase was largely due to
the issue of R$350 million in Debentures in the period.

Borrowings and financing

In 2010, Borrowings and financing amounted to R$465.1 million, growing 244.5% from 2010, mainly due to
the Debentures issue in the period. Borrowings and financings corresponded to 14.4% of our total liabilities
and shareholders' equity in 2010, compared to 4.9% in 2009.

Provision for tax, civil and labor contingencies

In 2010, the provision for contingent liabilities was R$73.8 million, increasing 3.3% from 2009. Provisions for
tax, civil and labor contingencies represented in the long term 2.3% of total liabilities in 2010 and 2.6% in
2009.

Taxes payable

In 2010, the account Taxes payable in the long term was R$215.1 million, increasing 39.3% from R$150.3
million in 2009, mainly due to the higher sales in the period and the questioning of the level of value added
margin (MVA) in the states of Paraná, Federal District and Mato Grosso do Sul. The account Taxes payable
in the long term represented 6.5% of our total liabilities and shareholders' equity in 2010, compared to 5.5%
in 2009.
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Shareholders' equity

Shareholders' equity increased from R$1,139.8 million in 2009 to R$1,257.5 million in 2010, basically due to
(i) the net income in 2010, net of dividends distributed and proposed and of interest on equity; and (ii) the
cumulative adjustment in the translation of the financial statements of the Corporation's overseas
subsidiaries.

Other equity accounts

Any equity accounts not mentioned above did not show any significant variations between the balances in
2010 and 2009.

Uses and sources of funds

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

Operations by overseas subsidiaries

The profit margin on exports from Brazil to international operations was subtracted from the COGS of the
respective operations in order to show the actual impact of these subsidiaries on the Corporation's
consolidated result. Accordingly, the pro-forma income statement for the Brazilian operations considers
only the sales made in the domestic market.
The international operations made an important contribution and already account for 9.0% of consolidated
net revenue. The operations in consolidation (Argentina, Chile and Peru) registered net revenue growth in
weighted local currency of 36.1% in 2011. EBITDA was a gain of R$43.0 million, with EBITDA margin of
12.8% (R$ 13.1 million in 2010 with margin of 5.1%). In the operations in implementation (Mexico and
Colombia), net revenue in weighted local currency grew by 55.6% in the year.
Our overseas subsidiaries registered a loss before financial impacts of R$82.7 million (corresponding to
28.3% of net revenue) in 2009, compared to R$84.4 million (corresponding to 22.7% of net revenue) in
2010. The operations in consolidation (Argentina, Chile and Peru) are already registering positive cash flow.

Cash Flow
Fiscal year ended
(R$ million)
2011
2010
2009
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Net cash provided by operating activities ...............................................
663.8
973.8
592.7
Net cash used in investing activities .........................................................
(250.3)
(313.5)
(190.4)
Net cash used in financing activities .........................................................
(460.1)
(595.8)
(256.6)
Increase (decrease) in cash and cash equivalents ..................................
(44.6)
59.9
149.8

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

Internal cash flow in the year was R$940.8 million, an increase of 13.0%, which is line with the 11.7% growth
in net income in the period. Of this sum, R$207.2 million was invested in working capital and R$346.4
million in Property, plant and equipment. As a result, free cash flow was R$410.6 million, down 42.7% from
2010.

We continue to observe an increase in inventory coverage, driven primarily by the lower-than-expected
sales. We also observed an increase in recoverable taxes due to the review of PIS and Cofins taxes on
services, financial income and freight, which will be converted into cash in the first half of 2012.
In 2011, our current capital (current assets less current liabilities) was approximately R$928.6 million,
compared to R$673.4 million in 2010 and R$481.0 million in 2009. We believe our current capital is
sufficient to meet our current needs.

Uses of funds

Our funds are used mainly to pay our borrowings, make investments and pay dividends and interest on
equity. In 2011, we had R$1,186.7 million in short and long term Borrowings and financing. In 2010, these
amounts were R$691.7 million.

We paid dividends and/or interest on equity (net) of R$814.5 million in 2011, R$710.5 million in 2010 and
R$539.5 million in 2009.

Our investments totaled R$346.4 million in 2011, R$236.9 million in 2010 and R$140.6 million in 2009. See
details of our investments below in the section "Investments".

Investments

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

The following table shows the investments made in the periods indicated:
Fiscal year ended
2011
2010
2009
(R$ million)
Software and information technology equipment
66.4
61.6
6.6
Machinery, tools and accessories ................................................
45.0
29.7
32.8
Vehicles ..............................................................................................
21.0
24.2
18.1
Buildings and facilities .....................................................................
6.1
7.2
15.1
Molds
(1)
.............................................................................................
15.3
17.0
8.8
IT machinery and equipment ........................................................
11.4
7.3
5.8
Furniture and fixtures .....................................................................
5.7
1.6
2.8
Leasehold improvements ...............................................................
-
-
11.8
PPE in progress/ advances to suppliers ......................................
165.7
84.6
15.9
Intangible assets under development ..........................................
-
-
22.9
Other investments ..........................................................................
9.8
3.7
-
Total investments ............................................................................
346.4
236.9
140.6
_____________________
(1)
These are steel molds made especially for use by our suppliers to produce plastic bottles and packaging for our
products. We hold ownership of these molds.

Our investments were in general guided by the need to better meet the need for improvements in logistics
and in our information technology structures.

In the fiscal years from 2009 to 2011, there were no relevant capital divestments. In the same period, there
were also no investments made related to interests held in companies outside of the Natura Group.

For its investments in expanding its manufacturing and inventory capacities, the Corporation is seeking
credit lines. Financing lines are important for supporting our expansion. However, we believe that we will
be able to implement our current expansion projects using own resources, in a scenario marked by a
shortage of liquidity in the financial market.

10.2 The Officers must comment on:

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

Our Corporation operates on an integrated basis in Brazil's cosmetic, fragrance and toiletry industry,
engaged in the development, manufacture, distribution and marketing of products. We also are present in
seven other countries in Latin American and Europe: Argentina, Bolivia, Chile, Colombia, Mexico, Peru and
France. The operations in Venezuela were discontinued in 2009.
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Nearly all (91.0% in 2011) of our gross revenue is denominated in Brazilian real and derives from the sale of
our products to our Natura Consultants. The number of Natura Consultants and their productivity are
among the main drivers of growth in our gross operating revenue. Our revenue denominated in foreign
currency derives from our sales in other countries where we have operations and from the exports made
to our distributor in Bolivia and to Duty Free.

In addition to the activities directly undertaken by the Corporation, our organizational structure also
includes the subsidiaries, whose activities are described below:
·
Indústria e Comércios de Cosméticos Natura Ltda.: is engaged primarily in the manufacture and
marketing of Natura brand products for the Corporation and for our subsidiaries abroad;
·
Natura Logística e Serviços Ltda.: is engaged primarily in providing administrative and logistics services
to the companies of our conglomerate based in Brazil;
·
Natura Inovação e Tecnologia de Produtos Ltda.: is engaged primarily in developing products and
technologies and conducting market research. It is a wholly owned subsidiary of Natura Innovation
et Technologies de Produits SAS - France, which is the research satellite inaugurated in Paris in
2007;
·
Ybios: the activities of Ybios consist of research, management, project development, products and
services in the field of biotechnology, including through partnerships and agreements with
universities, foundations, companies, cooperatives and associations, as well as other government
and private entities;
·
Natura Cosméticos S.A. ­ Chile, Natura Cosméticos S.A. ­ Peru, Natura Cosméticos S.A. ­ Argentina,
Natura Cosméticos C.A. ­ Venezuela, Natura Cosméticos Ltda. ­ Colombia, and Natura Distribuidora de
Mexico, S.A. de C.V.:
these companies engage in activities similar to those of the Corporation in
Brazil; and
·
Natura Europa SAS and Natura Brasil SAS: are engaged primarily in the buying, selling, importing,
exporting and distribution of cosmetic, fragrance and toiletry products.

Our revenue is almost entirely generated by our operations. The following table shows the contribution
from our subsidiaries, which together accounted for 9.0% of our gross revenue in the fiscal year ended
December 31, 2011:
Fiscal year ended on
December 31,
2011
2010
2009
Subsidiaries
(% contribution)
Operations in Consolidation
6.0%
4.8%
4.9%
Operations in Implementation
2.7%
1.6%
1.3%
Other (Bolivia and Duty Free)
0.3%
0.4%
0.3%
Total Subsidiaries
9.0%
6.8%
6.5%
Total Natura Cosméticos
91.0%
93.2%
93.5%
Total
100.0%
100.0%
100.0%
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Our financial situation and the results from our operations are influenced by factors such as Brazil's
macroeconomic development, the unemployment rate, the availability of credit and average wage levels.

Brazil's macroeconomic scenario is characterized by significant variations in economic growth and inflation
and exchange rates.

Between December 31, 2004 and 2005, the Brazilian real appreciated against the U.S. dollar by 13.4%.
Despite this appreciation, Brazil registered a current account surplus of US$13.6 billion, according to the
Central Bank of Brazil, which was highest largest surplus ever recorded by the country. The average annual
unemployment rate in Brazil's major metropolitan areas decreased from 11.5% on December 31, 2004 to
9.8% on December 31, 2005, according to estimates from the Brazilian Geography and Statistics Institute
(IBGE). In 2005, the inflation rate, as measured by the IPCA index, was 5.7%, while the average Long-Term
Interest Rate (TJLP) was 9.8% in the year. GDP growth was 3.2% in the year.

In 2006, the real maintained its trend and appreciated against the dollar by 9.5% between December 31,
2005 and 2006. Despite this appreciation, Brazil registered a current account surplus of US$13.2 billion,
according to the Central Bank of Brazil. The average annual unemployment rate in Brazil's major
metropolitan areas increased from 9.8% on December 31, 2005 to 10.0% on December 31, 2006, according
to IBGE estimates. In 2006, the inflation rate, as measured by the IPCA index, was 3.1%, while the average
Long-Term Interest Rate (TJLP) was 6.9% in the year. GDP growth was 3.8% in the year.

The Brazilian real maintained its trend and appreciated against the dollar by 20.7% in December 2007. The
average annual unemployment rate in Brazil's major metropolitan areas decreased from 10.0% on December
31, 2006 to 9.3% on December 2007, based on estimates from the Development Research Institute (IED).
On December 31, 2007, the inflation rate, as measured by the IPCA, was 4.5%, while the average Long-
Term Interest Rate (TJLP) was 6.3% in the year. GDP growth was 5.4% in the year.

In 2008, the average inflation rate measured by the IPCA index was 5.9%. This percentage was within the
target set by the Central Bank of between 2.5% and 6.5%. Inflation remaining stable at this level can be
attributed to monetary policy, with cumulative hikes in the Selic basic interest rate in the year, from 11.25%
on December 31, 2007 to 13.75% on December 31, 2008. The year was also marked by deterioration in the
international financial crisis that originated in the U.S. financial system. This change in expectations caused,
especially as of October, increases in the cost of third-party capital, local-currency depreciation, declines in
stock prices on the BM&FBOVESPA and a contraction in industrial production. Due to the economic crisis
and the contraction in foreign investment, the Brazilian real devalued sharply against the U.S. dollar, with the
exchange rate ending the year at R$2.34/US$.

The Corporation was not severely affected by the international crisis in 2008. Although the higher
availability of household income and the growth in formal employment are factors that contribute to the
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65
effective growth of our business, recent data indicates the resilience of our business during times of
economic crisis, which is mainly due to the fact that the direct sales market serves as a second source of
household income.

The year 2009 was marked by the onset of economic recovery and the appreciation of the Brazilian real
against the U.S. dollar, especially during the second half of the year. The lower investment in production in
the first half of the year as a result of the crisis contributed to a contraction in economic growth and
consequently to an inflation rate of 4.31%, as measured by the IPCA index. The federal government, seeking
to spur economic growth in the country, implemented a cumulative cut in the Selic basic interest rate from
13.75% on December 31, 2008 to 8.75% as of December 31, 2009. With the recovery in economic growth
in the second half of the year, the Brazilian real appreciated against the U.S. dollar, going from R$2.34/US$
on December 31, 2008 to R$1.75/US$ on December 31, 2009.

During 2010, impacts from the country's higher household income were observed, especially in the "C" and
"D" income classes, which were due to the stable inflation and resulting increase in purchasing power, with
these impacts contributing significantly to the strong growth in domestic consumption. The economic
recovery spurred demand in the manufacturing industry, which contributed to Brazil registering a trade
surplus in the period, despite the appreciation in the Brazilian real against the U.S. dollar from R$1.75/US$
at the end of 2009 to R$1.69/US$ on December 31, 2010. GDP growth in 2010 was 7.5%, according to the
Market Readout published by the Central Bank of Brazil.
Brazil's economic growth slowed in 2011, following the robust expansion in the previous year that followed
the weak economic growth in 2009. The unemployment rate remained stable at record lows during the
year, although new job growth slowed in relation to 2010. The average real monthly wage continued to
increase significantly, contributing to growth in the real wage bill. The acceleration in inflation in 2011
compared to the prior year was partially due to the atypically high concentration of increases in
administered prices in the first quarter of the year, and to the continued inflationary inertia caused by the
supply shocks in the domestic and external markets observed in the last quarter of 2010. IPCA inflation
accelerated from 5.91% in 2010 to 6.50% in 2011.
The following table shows the variations in GDP, inflation, interest rates and USD exchange rate for the
periods indicated:
Fiscal year ended December 31,
2011
2010
2009
2008
2007
2006
2005
GDP growth
(1)
2.7%
7.5%
-0.2%
5.1%
5.4%
3.8%
3.2%
Inflation (IGP-M)
(2)
5.10%
11.32%
1.71%
9.8%
7.7%
3.8%
1.2%
Inflation (IPCA)
(3)
6.50%
5.91%
4.31%
5.9%
4.5%
3.1%
5.7%
CDI overnight rate
(4)
11.6%
9.7%
9.8%
12.3%
11.8%
15.0%
19.0%
TJLP rate
(5)
6.0%
6.0%
6.0%
6.3%
6.3%
6.9%
9.8%
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Appreciation (depreciation) in
BRL versus USD
8.9%
-3.3%
25.5%
(24.2%)
20.7%
9.5%
13.4%
Exchange rate (end of period)
R$ per US$1.00
R$1.84
R$1.69
R$1.75
R$2.337
R$1.771
R$2.138
R$2.341
Exchange rate (average)
R$ per US$1.00
(6)
R$1.68
R$1.76
R$2.00
R$1.838
R$1.786
R$2.152
R$2.252
_____________________________
(1)
The GDP figures for these periods already adopt the new methodology of the IBGE.
(2)
Annual IGP-M inflation measured by the Getúlio Vargas Foundation (FGV).
(3)
Annual IPCA inflation measured by the Brazilian Geography and Statistics Institute (IBGE).
(4)
The DI rate is the average of interbank deposit rates practiced during the day in Brazil (in the last 12 months).
(5)
The annual interest rate used by the Brazilian Development Bank (BNDES) for long-term financing (end of period).
(6)
Average of the daily exchange rates in the period.
Source:
C
ENTRAL
B
ANK
,
FGV,
IBGE,
CETIP.
In addition to the factors described above, our operational revenue is also directly impacted by the growth
in both the average real wage and the level of formal employment. These variations can have two effects: (i)
higher consumption, which tends to benefit the Corporation; and (ii) higher expenses with the
compensation of our employees, which tends to adversely affect our results.

(b) revenue variations attributed to changes in prices, exchange rates, inflation, volumes and the launch of new
products and services

Our operating revenue is directly impacted by changes in the quantity of products sold by our Natura
Consultants and the prices of such products.
In fiscal year 2011, consolidated gross revenue was R$7,535.8, increasing by 8.3%. Our total consultant base
reached 1,421 thousand, growing 16.4% compared to 2010. In Brazil, we ended 2011 with 1,175 thousand
consultants, which represents growth of 14.3%, and with 13,250 Super Consultants (CNOs). In the
international operations, we ended the year with 246,000 consultants, for growth of 27.1%.
In fiscal year 2010, consolidated gross revenue was R$6,959.8, increasing 20.2%. This growth reflects the
18% expansion in the number of consultants on a consolidated basis, as well as the good execution and
successful product launches in the period.

As mentioned above, in 2009, our gross revenue reached R$ 5,789.3, representing an increase of 19.3% in
relation to the gross revenue of R$ 4,852.9 in 2008, mainly due to the higher quantity of products sold and
the higher average price of the products sold in the period. The increase in the quantity of products sold in
large part was related to (i) the 19.9% growth in the average number of Natura Consultants in 2009; (ii) the
better results of our marketing efforts (promotions and media); and (iii) the new product launches.

Note that the prices practiced in the Corporation's industry are characterized by gradual increases over
time, basically due to (i) the higher production costs; and (ii) the higher demand for higher-value products.
Consistent gains in productivity in the industry have allowed manufacturers to avoid fully passing through
their cost increases to consumers. Furthermore, the low concentration of suppliers and the high level of
competition among them minimize the increases in raw material costs.
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We expect consumer prices to continue growing gradually and that companies will continue to achieve
productivity gains to avoid fully passing through their cost increases to consumers.

For information on the impacts of inflation, exchange and interest rates on the performance of the
Corporation, see item (c) of this item 10.2. below.

(c) impact of inflation, variations in the prices of main inputs and products, the exchange rate and interest rates on our
operating and financial results
Inflation

The Corporation's results have been affected by inflation. Most of our costs and expenses are incurred in
Brazilian real and are increased when our suppliers or service providers raise their prices. Our service
providers in general use the IPCA price index to adjust their prices, while our suppliers in general use the
INPC consumer price index published by the Brazilian Geography and Statistics Institute (IBGE) and the IGP-
M general price index published by the Getúlio Vargas Foundation (FGV) or a variation in the prices of
certain commodities to adjust their prices for inflation. Our gross revenue is also indirectly affected by
inflation, since in general we pass through part of our cost increases to consumers through price increases.

Foreign exchange

Due to the accounts receivable and financial obligations of various natures undertaken by the Corporation in
foreign currencies, a Currency Hedge Policy was implemented that establishes the levels of exposure
connected with these risks.

Our operating and financial results are affected by fluctuations in the exchange rate between the Brazilian
real and the U.S. dollar and between the Brazilian real and the euro, mainly regarding: (i) changes in the
costs of raw materials and packaging that are imported or pegged to the dollar; (ii) our financing pegged to
foreign currencies; and (iii) the costs of products sold in Brazilian real to our subsidiaries that conduct
operations in Argentina, Chile, Peru, Mexico, Colombia and France.

For their currency exposure, the Corporation and its subsidiaries contract operations with derivative
instruments such as swaps and forward currency purchases known as Non Deliverable Forwards (NDF).
The currency hedge policy determines that the hedge instruments contracted by the Corporation must limit
the losses from currency devaluation in relation to the net income projected for the current fiscal year,
based on a certain estimate of currency devaluation in relation to the U.S. dollar. This limit sets the ceiling
or the maximum currency exposure allowed by the Corporation.

Interest Rates
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Since the Corporation does not have significant interest-bearing assets, the results and operating cash flow
of the Corporation are substantially independent of changes in market interest rates.

The Corporation's interest rate risk derives from short- and long-term financial investments and loans and
financing facilities. The Corporation's management has a policy of maintaining the indexers of its exposures
to the interest rates of its funding and lending operations linked to floating rates. The financial investments
and loans and financing facilities, except those contracted based on the Long-Term Interest Rate (TJLP), are
restated by a floating rate (CDI rate), in accordance with the contracts signed with financial institutions and
the securities traded with investors in this market.

The Corporation contracts swap derivative instruments with the goal of mitigating the risks of its loan and
financing operations contracted with indexers other than the CDI rate.

The Corporation's business is affected by interest rates to the extent that higher interest rates could lead to
lower household consumption. However, recent history has shown that our business model, which is very
dependent on credit, has not suffered significant impacts from interest rate fluctuations.

The Corporation has not experienced difficulties or suffered financial losses arising from interest rate
volatility in the fiscal years ended December 31, 2009, 2010 and 2011.

10.3
The Officers must comment on any relevant effects that the following
events have caused or are expected to cause on its financial statements and results:

(a) the introduction or divestment of operating segments

There were no introductions or divestments of operating segments in our activities during the fiscal years
ended December 31, 2009, 2010 or 2011 that caused or are expected to cause relevant effects on the
financial statements or results of our Corporation.

(b) the constitution, acquisition or divestment of ownership interests

We did not constitute, acquire or divest any relevant ownership interests during the fiscal years ended
December 31, 2009, 2010 or 2011 that caused or are expected to cause relevant effects on the financial
statements or results of our Corporation.

(c) atypical events or operations

No atypical events or operations occurred during the fiscal years ended December 31, 2009, 2010 or 2011
that caused or are expected to cause relevant effects on the financial statements or results of our
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Corporation.

10.4.
The Officers must comment on:

(a)
any significant changes in accounting practices

None

(b)
any significant effects of the changes in accounting practices

None

(c)
any qualifications or emphasis of matter paragraphs in the auditor's report

None

The Officers must indicate and comment on critical accounting policies adopted by the
Corporation, exploring in particular any accounting estimates made by management about
uncertain and relevant matters for describing the financial situation and results, which require
subjective or complex judgments, such as: provisions, contingencies, revenue recognition, tax
credits, long-term assets, useful life of non-current assets, pension plans, adjustments of
foreign currency conversion, environmental recovery costs, criteria for impairment testing
assets and financial instruments

The main accounting practices are those that are relevant to portraying our financial condition and our
results, and whose determination is more difficult, subjective and complex, frequently requiring estimates
about inherently uncertain issues. To the extent that the number of variables and assumptions related to
such uncertain and future matters increase, these determinations become even more subjective and
complex. To describe the manner in which our management makes these determinations concerning future
events, including the variables and assumptions underlying such estimates and the sensitivity of such
judgments under different circumstances, we highlight the following accounting practices:

Property, plant and equipment

These are recorded at the acquisition and/or construction cost, with monetary restatement to December
31, 1997, and augmented by capitalized interest during the construction period for the cases of qualifying
assets. In general, we use the depreciation levels authorized by tax legislation (straight line method), which
we believe approximate the useful economic life of our assets. There is a difference concerning the
recognition of our vehicles: in this case, the tax legislation determines that depreciation be effected within
five years. Nevertheless, for accounting purposes, the depreciation of our vehicles is made based on a useful
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economic life of three years, since most of our vehicles are used by our sales promoters as an incentive for
reaching their targets, with these vehicles replaced in general every three years. This method of recognition
complies with the Accounting Practices adopted in Brazil and Brazilian Corporation Law, as well as, for the
fiscal years ended after January 1, 2008, the changes introduced by Federal Laws 11.638/07 and 11.941/09, by
the regulations issued by the Securities and Exchange Commission of Brazil (CVM) and by the accounting
pronouncements issued by the Accounting Pronouncements Committee (CPC). For the purposes of tax
legislation, we annually adjust the appropriate difference in the calculation of income tax and social
contribution tax (CSLL).

The Corporation and its subsidiaries did not opt to adopt the practice of revising the historical costs of
fixed assets and the practice of "attributed costs", as under ICPC 10.

Furthermore, fixed assets, intangible assets and other non-current assets are assessed annually to identify
signs of unrecoverable losses, and also whenever there are significant events or changes in the circumstances
which indicate that the book value may not be recoverable. When applicable, when there is a loss arising
from situations in which the book value of the asset exceeds its recoverable value, which is defined by the
greater of the value in use of the asset and the net sale value of the asset, it is recognized in the profit and
loss. We concluded the physical inventory of all fixed assets for the first quarter of 2010, and no material
differences arising from this procedure were verified.

Intangible assets

Carbon credits ­ Carbon Neutral Program

In 2007, the Corporation undertook, with its employees, clients, suppliers and shareholders, the
commitment to be a carbon-neutral company, which consists of neutralizing its greenhouse gas emissions in
its entire production chain, from the extraction of raw materials to post consumption. Although not a legal
obligation, since Brazil has not adopted the requirements of the Kyoto Protocol, the commitment is
considered a constructive obligation, in accordance with CPC 25 ­ Provisions, Contingent Liabilities and
Contingent Assets, which calls for recognizing a provision on the accounting statements if it requires a
disbursement and is measurable.

The liability is estimated based on the audited inventory of carbon emissions conducted annually and with
the value based on the average acquisition price per ton specified in contracts in force and the estimated
prices of future acquisitions. On December 31, 2011, the balance registered in liabilities under the line
"Other provisions" (see Note 18 to the Financial Statements) refers to the total carbon emissions in the
period from 2007 to 2011 still not neutralized by corresponding projects; which means the carbon
certificate is not effected.

In line with its beliefs and principles, the Corporation has opted not to directly acquire carbon credits, but
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rather to invest in social and environmental projects in the communities. Therefore, the costs incurred will
generate carbon credits after the conclusion or maturation of these projects. During the period, the costs
were registered at cost similar to intangible assets (see Note 13 to the Financial Statements), which
represent a future use right. On December 31, 2011, the balance registered under intangible assets referred
to the costs incurred with social and environmental projects, which will generate carbon certificates for the
Corporation in the future.

When these carbon certificates are effectively delivered to the Corporation, the obligation of becoming
Carbon Neutral will have been effectively met; as such, the asset balances are offset by liability balances.

The difference between the asset and liability balances on December 31, 2011 refers to the cash amount
that the Corporation will still disburse for other social and environmental projects for the future generation
of certificates.

This accounting method was developed in accordance with IAS 8 - "Accounting Policies, Changes in
Accounting Estimates and Errors", which determines that without any pronouncements, interpretations or
guidelines that apply specifically to a transaction, Management must exercise its judgment in developing and
applying an accounting policy that results in relevant and reliable information for users for basing their
decisions, so that the financial statements adequately represent the equity and financial position, financial
performance and the cash flows of the entity.

Operations with derivatives

Initially, swap and forward operations are recognized on our balance sheet at their fair market value, with
variations in the fair value recorded under the financial result and determined based on the contracts signed
with financial institutions.

Provisions

- Contingent liabilities

Contingent liabilities arise from the administrative proceedings and/or lawsuits inherent to the normal
functioning of our activities. The contingencies are assessed by the in-house lawyers, external lawyers and
experts contracted by the Corporation and are quantified using criteria that allow them to be measured
adequately, with the values updated until the dates of the balance sheet. For the purpose of financial
statements, for the contingencies classified with a risk of probable loss, provisions are constituted; for
contingencies for which the risk of loss is considered possible, only the processes and amounts involved are
disclosed without a provision constituted; for contingencies for which the risk of loss is classified as remote,
there is no disclosure of the risks or constitution of provisions, as required by the accounting practices
adopted in Brazil, except for the processes evaluated as strategic by the Corporation. Our provisioning
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policy is based on constituting provisions in the financial statements at the amount of estimated loss for tax,
labor and civil contingencies. The amounts of provisions are updated monthly. Although the risk assessment
of administrative proceedings and lawsuits involves a degree of subjectivity and unpredictability regarding the
positions taken by the government bodies regarding the merits, we believe that at this point in time this
assessment is reasonable. However, if this assessment proves incorrect, the contingencies classified as
possible and remote risk that are altered to probable risk could adversely affect our financial statements.

- Provision for credits of doubtful settlement

Natura Consultants have direct contact with their customers and make fundamental use of our sales catalog
Revista Natura, which is printed every Sales Cycle. Natura Consultants acquire our products and pay for
their orders in installments, with payment in twenty-one days or in forty-two days on certain special dates
of the year, for resale to their customers, at prices, terms and conditions freely agreed between them. We
may cancel the contracts with Natura Consultants that fail to pay for our products, who are prevented from
placing new orders if the previous order has not been paid. Due to the default of certain Natura
Consultants, we constitute in our financial statements provisions for the credits of doubtful settlement
based on our estimates of the probable losses in realizing receivables, taking into account the historical data
for defaults. We analyze our accounts receivable and the probability of collections on a monthly basis and
note that historically out default levels have been considerably low, given the high dispersion of our portfolio
of Natura Consultants. We do not have detailed information or any communication with final consumers
other than the Natura Consultants. We do not have any legal recourse against the final consumers of our
products for receiving the payments owed by the Natura Consultants. If the financial situation of Natura
Consultants deteriorates and prevents them from making payments, additional amounts may be provisioned.

- Provision for losses in realizing inventories

We also recognize provisions for probable losses of (i) product inventories that have been discontinued or
that we plan to discontinue; (ii) excessive inventories of raw materials in relation to the projected sales of
the product in which they are used for the next twenty-four months; and (iii) inventories of finished
products for which the expiration date will occur before the product can be sold. We update these
provisions on each closing date of the balance sheet.

Stock option plans

The Corporation offers its employees and executives the opportunity to acquire options for the purchase of
the Corporation's stock. The fair value of the options granted is calculated based on the binomial pricing
method and recognized as an expense in the results of the fiscal year during the period of acquisition, after
complying with certain conditions. On the dates of the balance sheets, the Corporation's management
reviews the estimates for the quantity of options and recognizes them, when applicable, in the results of the
fiscal year/quarter offsetting shareholders' equity, reflecting the effect arising from the review of these initial
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estimates.

Consolidation of the financial statements of the subsidiaries

The consolidated financial statements are prepared in compliance with the consolidation criteria in the
accounting practices adopted in Brazil, which encompasses the financial statements of the Corporation and
of its direct and indirect subsidiaries.
10.6 Regarding the internal controls adopted to ensure the preparation of reliable financial
statements, the Officers must comment on:

(a)
the degree of efficiency of such controls, indicating any defects and measures adopted to correct them

We believe in the efficiency of the internal controls and procedures which we adopt to ensure the quality,
precision and reliability of our financial statements. That is why, in the opinion of our management, our
financial statements adequately present the profit and loss of our operations and our financial and equity
positions on the respective dates.

We emphasize that the financial results in the financial statements do not necessarily indicate the results that
can be expected in any other period or fiscal year.

We have sought to achieve the highest levels of governance, enhancing and reinforcing the set of controls
and internal procedures. As a result we received the SOx certification, which is based on the criteria of the
U.S. Sarbanes-Oxley Act for companies listed on the New York Stock Exchange.

Natura was one of the first Brazilian companies to receive SOx certification without being legally required
to meet these standards. In our view, the principal benefit of employing a more efficient set of controls is in
providing transparency and security to our stakeholders regarding the execution of our operations, ensuring
that our financial statements accurately portray our business processes.

In February 2011 and 2012, we received the final reports from the independent auditor for fiscal years 2010
and 2011, which did not include any qualifications; in other words, we continue to comply with all SOx
requirements.


(b)
deficiencies and recommendations concerning the internal controls made in the report of the independent
auditor

The reports of our independent auditors regarding our financial statements for the fiscal years ended
December 31, 2009, 2010 and 2011 did not indicate any deficiencies or recommendations about the internal
controls and procedures we use to prepare our financial statements.
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10.7 If the Corporation has carried out any public securities distributions, the Officers must
comment on:

(a) how the proceeds from the offer were used

Not applicable.

(b) if there were any relevant deviations between the effective use of the proceeds and the proposed uses disclosed
in the prospectus of the distribution

There were no deviations between the effective use of the proceeds and the proposed uses disclosed in the
documents related to the Restricted Offer.

(c) if there were any deviations, the reasons for such deviations

Not applicable.
10.8 The Officers must describe the relevant items not shown in the financial statements of
the Corporation, indicating:

(a) the assets and liabilities held directly or indirectly by the Corporation that do not appear on its balance sheet (off
balance sheet items), such as (i) operating leases, assets and liabilities; (i) portfolios of written off receivables
for which the entity continues to carry risks and responsibilities, indicating the respective liabilities; (ii)
contracts for the future purchase and sale of products or services; (iv) contracts for unfinished construction
projects; and (v) contracts for the receipt of financing in the future

The Corporation does not maintain any operations, contracts, obligations or other types of commitment
with unconsolidated subsidiaries or other liability operations that could generate relevant effects, in the
present or future, on its financial situation and/or changes in its financial situation, revenues or expenses,
operating income, liquidity, capital costs or capital resources that are not recorded on its balance sheet.

(b) Other items not shown on the financial statements

There are no other relevant items that do not appear in our financial statements.

10.9 For each item not shown on the financial statements indicated in item 10.8, the Officers
must comment on:
(a) how such items change or could come to change the revenues, expenses, operating income, financial
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expenses or other items on the financial statements of the Corporation

Not applicable.
(b) the nature and purpose of the operation
Not applicable.
(c) the nature and amount of liabilities undertaking and the rights generated on behalf of the Corporation as
a result of the operation
Not applicable.
10.10 The Officers must indicate and comment on the main elements of the Corporation's
business plan, exploring the following topics in particular:

(a) Investments, including: (i) quantitative and qualitative description of the ongoing investments and projected
investments; (ii) funding sources of the investments; and (iii) the relevant ongoing divestments and projected
divestments

Investments

Our operating activities require regular investments, particularly those related to the development of our
infrastructure and the acquisition of items used in our business, such as machinery, tools, vehicles and
industrial molds. Such investments are in general guided by the need to meet the growing demand for our
products.

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

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

Fiscal year ended on December 31,
2011
2010
2009
(in R$ million)
Information technology software and equipment
66.4
61.6
6.6
Machinery, tools and accessories ................................................
45.0
29.7
32.8
Vehicles ..............................................................................................
21.0
24.2
18.1
Buildings and facilities .....................................................................
6.1
7.2
15.1
Molds
(1)
.............................................................................................
15.3
17.0
8.8
Computer machinery and equipment .........................................
11.4
7.3
5.8
Furniture and fixtures .....................................................................
5.7
1.6
2.8
Improvements on third-party properties ..................................
-
-
11.8
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Fixed asset in progress/ advances to suppliers .........................
165.7
84.6
15.9
Intangible asset under development ............................................
-
-
22.9
Other investments ..........................................................................
9.7
3.7
-
Total investments ............................................................................ 346.4
236.9
140.6
_____________________
(2)
These are steel molds made especially for use by our suppliers to produce plastic bottles and packaging for our
products. We hold ownership of these molds.
We plan to continue the efforts to obtain gains in operating efficiency and productivity based on the
infrastructure platform already installed and an increase in scale. Since 2008, we have obtained productivity
gains due to the improvements implemented in our manufacturing process, the reduction in our SKUs and
the better management of inventory. We will also continue our efforts to decentralize distribution and
improve the logistics structure (with the implementation of new distribution centers). We also expect to
continue adopting other actions related to our operational efficiency, such as: improving the efficiency of our
loss-prevention process and redesigning our sales catalog.

The investments in infrastructure will provide the foundation for a new cycle of growth at Natura. Since
2009, our logistics structure has undergone significant transformations. We aim to ensure that our products
reach the hands of our consultants even faster, with a reduction in cost per order and in greenhouse gas
emissions.
In 2011, we inaugurated a Distribution Center (DC) and three more DCs underwent capacity expansion,
with the lines substituted. Equipped with high technology picking lines, high levels of automation and low
energy consumption, we are prepared to meet a higher number of orders, including those with fewer items,
allowing for deliveries to be divided into smaller batches. This allows for productivity gains and a reduction
in order costs.
In 2012, we will continue this expansion by inaugurating a Distribution Center and a hub in São Paulo. With
the investments made, we accelerated by almost two years the planning schedule for revamping the logistics
network. Our objective is to significantly reduce the service response time for our consultants.
In our international operations, we also obtained efficiency gains in the logistics operations, with new
planning for the distribution operations in Latin America, which centralized services in Colombia and
Mexico. We consolidated the perfume bottling operations in Argentina, which was begun in 2010, and we
began to produce soaps in Colombia. With these initiatives, we expect to significantly increase the
percentage of products manufactured locally.

Financing Sources

To undertake the investments described above, the Corporation uses its own resources, seek lines of credit
from financial institutions and/or seeks funding in Brazil's capital markets through the issue and public
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distribution of equity and securities.

Accordingly, the Corporation was able to carry out the first issue of non-convertible unsecured debentures,
with unit face value of R$1,000 in a single series, in the total amount of R$350 million and without financial
covenants, in accordance with CVM Instruction 476/09 of May 26, 2010, which were issued on May 26, 2010
and subscribed and fully paid up on May 28, 2010, with semiannual interest payments in May and November
and repayment of the principal on May 26, 2013.

Divestitures

There are no relevant ongoing capital divestitures or projected for the coming years.

(b) if already disclosed, indicate the acquisition of plants, equipment, patents or other assets that should materially
influence production capacity

We have not disclosed any plans and/or projects for the acquisition of plants, equipment, patents or other
assets that could materially influence our production capacity.

(c) new products and services, indicating: (i) a description of the ongoing research already disclosed; (ii) the total
amounts spent on research for the development of new products or services; (iii) the projects under
development already disclosed; and (iv) the total amounts spent on the development of new products or
services

We offer a large variety of cosmetics, fragrances and toiletry products and we continue to develop new
products. We believe that we cannot innovate by considering only the consumer and the competition, but
rather must take into consideration the fact that society now faces an unprecedented challenge of finding
paths to increase its own sustainability. In this sense, we seek to develop products that reflect our
positioning.

One of the main directions of innovation is the sustainable use of biodiversity. We translate this concept by
creating and developing new products using native and exotic species and adopting ecological models for
plant production and an input certification program in partnership with rural suppliers, such as traditional
communities and family farmers that can contribute to conserving biodiversity.

Creating new concepts and innovations, valuing traditional knowledge and preserving the environment are
the principles that form our set of efforts in product innovation and development. In this sense, we always
seek to innovate by promoting social inclusion and environmental conservation, while establishing goals
compatible with sustainable development.

Innovation is an essential aspect for ensuring Natura's sustainability. Accordingly, in 2011, our innovation
index (the percentage of gross revenue generated by new products) reached 64.8%.
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78
Fiscal year ended on
December 31,
2011
2010
2009
Number of products launched
168
191
113
Investments in innovation (R$ million)
148,1
140,9
111,8
Percentage of net revenue invested in
innovation
2,6%
2,8%
2,6%
Innovation index (1)
64,8%
65,7%
67,6%
(1)
Gross revenue from products launched or enhanced in the last
24
as a ratio of total gross revenue in the year.
In this scenario, Natura's open innovation program plays a fundamental role, which seeks to foster the
development and acquisition of new technologies through partnerships with universities and research
centers in Brazil and abroad. In 2006, the initiatives were reviewed and expanded with the launch of the
Natura Technological Innovation Campus Program, and in 2007 with the launch of the Natura Campus
Portal (www.natura.net/campus). The website promotes our relationships with science and technology
institutions in Brazil and allows research groups to register and submit proposals for projects. Currently
around 50% of our portfolio of technological projects comes from the open innovation model, which
underscores the importance of these initiatives for Natura's innovative processes.

The Natura Campus Program is supported by the programs to foster research and development of the
National Council for Scientific and Technological Development (CNPq), the São Paulo State Research
Support Foundation (FAPESP) and the Financing and for Research and Projects (FINEP), which facilitates
and/or co-finances equipment, scientific scholarships and research material for the participating universities.

The Program also includes the Natura Technological Innovation Award. The award recognizes the best
research project conducted in partnership with Natura.

The first edition of the award took place in December 2008, with the award ceremony held at Casa Natura
in Campinas, São Paulo. The second edition of the award took place in December 2010, with the ceremony
held at the Natura site in Cajamar, São Paulo. Both ceremonies brought together representatives of
universities from all over Brazil, research institutions and the country's main entities involved in promoting
research.

At Natura, innovation is also expressed in the packaging of our products. In addition to the description of all
the ingredients used, which is a mandatory legal requirement, since 2007 we have included environmental
information in our launches that includes the origin and destination of the materials which is used as a way
to build consumer awareness on the environmental impacts.

Finally, the safety of our consumers guides all our product development processes. With the supervision of
the Product Safety Committee, which is formed by professionals from various areas, we take special care
with all new ingredients and formulas, which are rigorously tested by dermatologists or multidisciplinary
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79
teams and analyzed by specialists in product safety. We also maintain the Cosmetic Surveillance System,
which monitors any potential adverse effects of the products to feed the innovation process.
10.11. Comments by the Officers of the Corporation on other factors that materially
influenced operating performance and were not identified or commented on in the other
items of this Section


The Officers are of the opinion that no other factors exist that materially influenced operational
performance that were not identified or commented on in the other items of this Section 10.
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80
EXHIBIT IV ­ INFORMATION ON INCOME ALLOCATION PROPOSAL REQUIRED BY CVM
INSTRUCTION 481
1. Information on the net income of the fiscal year:
R$830,900,897.69
2. Information on the aggregate amount and the value per share of the dividends, including anticipated dividends
and Interest on Own Equity ("IOE") already declared:
R$814,589,658.92 (Dividends + IOE Net re. 2011) Per share: 1,89678240

3. Information of the distributed percentage of the net income of the fiscal year:
98.04% (corresponding to Dividends + IOE Net / Calculation Base of the Dividends)
4. Information on the aggregate amount and the value per share of the distributed dividends on the basis of
income of the previous fiscal years:
R$710,470,492.34 (Dividends + IOE Net ref. 2010) Per share: R$1.64937600
R$591,303,058.36 (Dividends + IOE Net ref. 2009) Per share: R$1.37448000
R$491,060,407.31 (Dividends + IOE Net ref. 2008) Per share: R$1.14540000
R$409,249,699.46 (Dividends + IOE Net ref. 2007) Per share: R$0.95450001

5.
Information, if deducted, on dividends anticipated and Interest on Own Equity already declared:
a. Gross amount of dividends and Interest on Own Equity, in segregated form, per share of each
type and series:

Dividends: R$ 467,323,863.72 = R$ 1.09117684
IOE Gross: R$ 23,626,977.60 = R$ 0.05516776
IOE Net: R$ 20,082,932.67 = R$ 0.04689260


Note: Aggregate amounts take into account the changes with treasury shares occurred since
the Meeting of the Board of Directors held on February 15, 2012 until the base date for the
payment of dividends and IOE on February 24, 2012, maintaining the amount to be paid per
share.
b. Manner and term for payment of dividends and Interest on Own Equity:
Dividends are paid annually. However, payments have been anticipated to the
month of August and the balance is paid in April of the following year.
c. Eventual incidence of monetary updating and interests on dividends and Interest on Own
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81
Equity:

Not applicable.
d. Date of declaration of payment of dividends and Interest on Own Equity considered for
purposes of identification of the shareholders entitled to receive the same
Cash proceeds in the allocation of income related to the fiscal year ended 12.31.2011
Proceeds
Event-Date
Amount (R$)
Value in R$/share
Date of
payment
ON
Interest on Own
Equity *
Meeting of the
Board of Directors
("RCA") of
07.20.2011
R$
37,506,420.89
R$0.08697463
(R$0.07392843, after
15% withholding for
Income Tax purposes)
08.12.2011
Dividends *
RCA of 07.20.2011
R$
295.302.406,25
R$
0.68478453
08.12.2011
Interest on Own
Equity**
RCA of
02.15.2012***
R$
23.626.977,60
R$
0.05516776
(R$0.04689260, after 15%
withholding for Income
Tax purposes)
04.18.2012
Dividends**
RCA of
02.15.2012***
R$
467.323.863,72
R$
1.09117684
04.18.2012
* Such Interest on Own Equity and dividends were calculated based upon the shareholdings as of 07.26.2011, and as from 07.27.2011, the Company's
shares were traded ex-Interest on Own Equity and dividends;

** Such Interest on Own Equity and dividends were calculated based upon the shareholdings as of 02.24.2012, and as from 02.27.2012, the Company's
shares were traded ex-Interest on Own Equity and dividends

*** In the 02.15.2012 RCA, there was resolved the recommendation of approval, by the shareholders of the Company gathered in the AGO called for
04.13.2012, of the payment of dividends and IOE. The amounts set forth in the column already take into account the changes with treasury shares
occurred since the date of such RCA until the base date for the payment of dividends and IOE on 02.24.2012, maintaining the amount to be paid per share.
6. In the event that there has been declaration of dividends or Interest on Own Equity based upon income
earned in half-year balance sheets or shorter periods:
1. Information on the amount of dividends or Interest on Own Equity already declared:
1st Semester/2011
IOE Net: R$31,880,456.28
IOE Gross: R$37,506,420.89
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82
Dividends: R$295,302,406.25
2. Information on the date of the respective payments

August 12, 2011

7. Presentation of comparative table indicating the following values per share of each type and class:
1. Net income of the fiscal year and of the three (3) previous fiscal years
b.
Dividend and Interest on Own Equity distributed during the three (3) previous fiscal years
Fiscal Years Ended December 31,
2011
2010
2009
2008
2007
Net income
830,900,897.69
744,049.778.89
683,923,098.58
525,780,821.00
456,913,816.89
Dividends and IOE
Distributed
814,589,658.92
710,470,492.34
591,303,058.36
491,060,407.31
409,249,699.46
Value per share
1.89678240
1.64937600
1.37448000
1.14540000
0.95450001

(1)
Interest on Own Equity - net of Income Tax

8.
In case of allocation of profits to the legal reserve
a.
Identification of the amount allocated to the legal reserve

b. Details on the manner of calculation of the legal reserve
There was no such allocation.
9.
In case the Company has preferred shares entitled to fixed or minimum dividends
a.
Description of the manner of calculation of the fixed or minimum dividends

b.
Information as to whether the income of the fiscal year is sufficient to cover the full
payment of the fixed or minimum dividends

c.
Identification of whether a certain unpaid portion is cumulative

d.
Identification of the aggregate amount of the fixed or minimum dividends to be paid to
each class of preferred shares
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83
e.
Identification of the fixed or minimum dividends to be paid per preferred share of each
class
Not applicable
10.
In respect of the mandatory dividend
a.
Description of the manner of calculation provided for in the Articles of Incorporation

According to the provisions of article 28 of the Articles of Incorporation, in its Chapter IV:

"Shareholders shall be entitled to receive, in each fiscal year, as dividends, a minimum
mandatory percentage of thirty per cent (30%) of the net income, with the following
adjustments:

I. The addition of amounts resulting from the reversal, during the fiscal year, of previously
constituted contingency reserves;

II. The deduction of sums intended, during the fiscal year, to the constitution of the legal
reserve and of contingency reserves; and

III. Whenever the amount of the mandatory minimum dividend shall exceed the realized
portion of the net income of the fiscal year, the Senior Management may propose, and the
General Meeting may approve, the allocation of the surplus to the constitution of
unrealized profits reserve (article 197 of Law 6,404/76, with the wording given by Law
10,303/01)."
a.
Information on whether it is being paid in full.

Yes
b.
Information on the amount eventually withheld.
Not applicable
11.
If there has been any withholding of the mandatory dividend on account of the financial condition of
the Company: a. Information on the amount withheld; b. Detailed description of the financial condition of
the Company, also addressing aspects related to the analysis of liquidity, working capital and positive cash
flows; and c. Justification of the withholding of dividends.

Not applicable
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84
12.
If there has been allocation of income to contingency reserves: a. Identification of the amount
allocated to the reserve; b. Identification of any loss deemed probable and its motive; c. Explanation on why
was the loss deemed probable; and d. Justification of the constitution of the reserve.
Not applicable
13.
If there has been allocation of income to unrealized profit reserve: a. Identification of the amount
allocated to the unrealized profit reserve; and b. Information on the nature of the unrealized profits that
gave rise to the reserve.
Not applicable
14.
If there has been allocation of income to statutory reserve: a. Description of the by-laws clauses
providing for the reserves; b. Identification of the amount allocated to the reserve; and c. Description on
how was such amount calculated.
Not applicable

15.
Withholding of profits provided for in the capital budget:
The proposed amount of withholding of profits submitted to resolution by the
shareholders is of R$3,464,223.99 (three million, four hundred and sixty-four thousand,
two hundred and twenty-three Reais and ninety-nine cents), which will form part of
the capital budget, as described in the table herein below:

Capex and Working Capital Budget
R$
Third Parties' Funds
247,100,000.00
Own Funds - Retained Earnings Reserve - fiscal year 2011
3,464,223.99
Total Source of Funds
250,630,238.54

16
If there has been allocation of income to the tax incentive reserve:
a. Information on the amount allocated to the reserve; and
b. Explanation on the nature of the allocation.
The sum allocated to the tax incentive reserve amounts to R$3,677,005.24, related to
Investment Subsidies of the Itapecerica facilities.
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85
The subvention for controlled investment and registered in Natura regards to tax
incentive related to the ICMS transfer that Natura Cosméticos S.A. (Itapecerica da Serra)
generates to the Municipality of Itapecerica da Serra due to commercial transactions it
develops in the city. Such tax incentive is connected to the investments Natura made in
order to install its facilities and operate in the city of Itapecerica da Serra during 2002.

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EXHIBIT V ­ MANAGERS OF THE COMPANY
Information on candidates for Member of the Board of Directors
Name
Age
Profession
Taxpayers'
Registration Number
(CPF)
Position Held
Date of
Appointment
Date of
Investiture
Term of
Tenure
Other Positions
Held
Appointed by
the
Controlling
Shareholder
Antonio Luiz da Cunha Seabra
69
Economist
332.927.288-00
Co-chairman
04.13.2012
Up to 30 days after
the date of
appointment
1 year
Member of
Committee
Yes
Pedro Luiz Barreiros Passos
60
Engineer
672.924.618-91
Co-chairman
04.13.2012
Up to 30 days after
the date of
appointment
1 year
Member of
Committee
Yes
Guilherme Peirão Leal
62
Business
Administrator
383.599.108-63
Co-chairman
04.13.2012
Up to 30 days after
the date of
appointment
1 year
Member of
Committee
Yes
Julio Moura Neto
59
Business
Administrator and
Engineer
468.948.027-34
Director
04.13.2012
Up to 30 days after
the date of
appointment
1 year
Member of
Committee
Yes
Luiz Ernesto Gemignani
65
Engineer
345.209.708-06
Independent
Director
04.13.2012
Up to 30 days after
the date of
appointment
1 year
Member of
Committee
Yes
Marcos de Barros Lisboa
47
Economist
806.030.257-49
Independent
Director
04.13.2012
Up to 30 days after
the date of
appointment
1 year
Member of
Committee
Yes
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Name
Age
Profession
Taxpayers'
Registration Number
(CPF)
Position Held
Date of
Appointment
Date of
Investiture
Term of
Tenure
Other Positions
Held
Appointed by
the
Controlling
Shareholder
Raul Gabriel Beer Roth
59
Engineer
761.608.078-20
Director
04.13.2012
Up to 30 days after
the date of
appointment
1 year
Yes
Plínio Villares Musetti
58
Engineer
954.833.578-68
Director
04.13.2012
Up to 30 days after
the date of
appointment
1 year
Member of
Committee
Yes
Roberto de Oliveira Lima
60
Business
Administrator
860.196.518-00
Independent
Director
04.13.2012
Up to 30 days after
the date of
appointment
1 year
Yes
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Information on the Members of the Board of Directors

(a)
Description of the main duties and résumé of our Directors and indication of the management positions
currently or previously held in publicly-held corporations:
Antônio Luiz da Cunha Seabra, 69 years old, is a graduate in Economy by the Universidade São Judas.
He is one of the founders and Co-chairman of the Company's Board of Directors. He was a Superintendent
of Remington Rand do Brasil and manager of Laboratórios Bionat. Founded Natura in 1969. He is a Co-
chairman of the Company's Board of Directors.


Pedro Luiz Barreiros Passos
, 60 years old, is a graduate in Production Engineering by the Escola
Politécnica of the Universidade de São Paulo and in Business Administration by the Fundação Getúlio Vargas.
He is a Co-chairman of the Board of Directors of the Company, which he joined in 1983. Currently, in
addition to being a Member of the Board of Directors of the Company, he is the Chairman of the Instituto
de Estudos para o Desenvolvimento Industrial (IEDI), Vice-President of the Curator Council of the Fundação
Nacional da Qualidade (FNQ), and a member of the Board of Directors of the Instituto de Pesquisas
Tecnológicas (IPT), of Fundação SOS Mata Atlântica, of Instituto Empreender Endeavor, of Fundação Dom
Cabral and of Totvs S.A. He is also a Member of the Science, Technology and Innovation Council of the
Brazilian Ministry of Science and Technology.


Guilherme Peirão Leal, 62 years old, is a graduate in Business Administration by the Universidade de São
Paulo. He is one of the founders and Co-chairman of the Company's Board of Directors. Over the last 20
years, he has participated in the constitution and corporate governance of several social and business
organizations. Mr. Leal was one of the creators of Natura's "Crer para Ver" Program, which for 15 years is
dedicated to supporting a high-quality public education. He is a founder, former chairman and current
member of the Deliberative Council of the Instituto Ethos ­ Empresas and Responsabilidade Social, former
chairman of the Deliberative Council and current member of the Advisory Council of FUNBIO (Fundo
Brasileiro para Biodiversidade) and Member of the Advisory Council of WWF-Brasil. For 8 years, Mr. Leal
was the chairman of the Associação Brasileira de Venda Direta. He was a founder and a coordinator of the
PNBE ­ Pensamento Nacional das Bases Empresariais; chairman of the Deliberative Council of the Fundação
Abrinq pelos Direitos das Crianças; Curator Director of the Fundação Dom Cabral and Chairman of the
Assembly of Chairmen of the CTE ­ Centro de Tecnologia Empresarial. Mr. Leal was a Director and one of
the founders of the Instituto Akatu pelo Consumo Consciente, Member of the G-50 group of business
leaders of Latin America and of the CEAL ­ Conselho de Empresários da América Latina. He was an Officer
at EDI ­ Instituto de Estudos para o Desenvolvimento Industrial and Member of the CONSEA ­ Conselho
da Presidência da República para a Segurança Alimentar. Mr. Leal participated in the boards of the holding
company of Nueva Group and of the O Estado de São Paulo Group. He is currently dedicated to structuring
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89
his legacy through the Instituto Arapyaú ­ IA ­ Para A Educação and o Desenvolvimento Sustentável, which
in Indian language ("Guarani") means the new space-time, within the meaning of constant renovation.


Júlio Moura Neto
, 59 years old, is a graduate in Mechanical Engineer by the Federal Technology Institute
(ETH) of Zurich, Switzerland. Mr. Moura is a Post-Graduate of the Sloan School of Management (MIT),
Cambridge, USA. Currently, in addition to being a Member of the Board of Directors of Natura, he is also a
Member of the Board of Directors of Adecoagro S.A., the Company listed in the New York Stock Exchange,
Member of the Board of Directors da Cencosud S.A. as well as of Brinox Metalurgica S.A.. Mr. Moura held,
among others, the positions of Chairman of the Board of Directors and Executive President of the Grupo
Nueva, Chairman of the Board of Directors of MASISA S.A., President and CEO of Grupo AMANCO;
Executive Vice President and Member of the Executive Committee of Elevadores Schindler, in Lucerne,
Switzerland; Corporate Vice President and Chairman of the Latin America Division of SIKA, in Baar,
Switzerland; Member of the Board of Directors of Messerli AG, Switzerland.


Luiz Ernesto Gemignani
, 65 years old, is a graduate in Mechanical Engineering by the Escola Politécnica
of the Universidade de São Paulo and has attended several specializing courses in the fields of management
and finances, such as the Advanced Management Program of Harvard Business School. He is currently a
Member of the Board of Directors of the Company, Vice President of the Curators Committee of the
Fundação Nacional da Qualidade, Chairman of the Deliberative Council of the Instituto Akatu. Since April,
2007 he holds the position of Chairman of the Board of Directors of Promon S.A. which he joined in 1978
Chief Financial Planning Officer, lately becoming the Chief Financial Officer, Executive Officer and Chief
Executive Officer in 2001, a position he held until April, 2011. He is also the Chairman of the Deliberative
Council of Fundação Promon de Previdência Social. Mr. Gemignani is a Member of the Board and of the
Investment Committee de Investimento of P2 Brasil Infrastructure Fund.


Marcos de Barros Lisboa
, 47 years old, Economist, PhD in Economy by the University of Pennsylvania.
He was as assistant professor with the Department of Economy of the Standford University from 1996 to
1998 and of EPGE/Fundação Getúlio Vargas from 1998 to 2002. From 2003 to 2005, Mr. Lisboa was the
Secretary for Economic Politics of the Brazilian Ministry of Finance and President of Instituto de Resseguros
do Brasil from 2005 to 2006. Between 2006 and 2009, Mr. Lisboa was an Executive Officer of Itaú Unibanco
and since 2009 he is a Vice-President of the bank. He is also a Member of the Board of Directors of Porto
Seguro.


Raul Gabriel Beer Roth, 59 years old, is a graduate in Production Engineering by the Escola Politécnica of
the Universidade de São Paulo. For 25 years He worked at PwC (PricewaterhouseCoopers)as the leading
partner in the practice of Corporate Finance in Brazil, In such area, he carried out negotiations and
appraisals of numerous companies of various segments, in addition to a number of strategic and financial
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90
analysis . Mr. Roth also coordinated the areas of Due Diligence, Negotiation and Restructuring of Debts,
Project Finance, Public-Private Partnerships (PPPs) and indirectly participated in the Tax M&A team. Mr. Roth
is a managing partner of R.Beer Consultores, acting as Business Adviser in the areas of Finance, Strategy,
Negotiation and Appraisal of Companies.

Plínio Villares Musetti, 58 years old, is a graduate in Engineering by the Escola de Engenharia Mackenzie.
He was the Executive Chairman of Elevadores Atlas S.A. from 1992 through 1999 and of Elevadores Atlas
Schindler S.A. until 2002. From 2002 to 2007 he was a partner of JP Morgan Partners, the Private Equity
entity of the JP Morgan Chase bank, having leaded the process of investments in Private Equity in Brazil and
in Latin America. Mr. Musetti held executive offices an had seats in the Boards of Directors of companies in
which JP Morgan Partners invested, such as Vitopel, Diagnósticos da América S.A. and Latasa. From the
beginning of 2008 until September, 2009, Mr. Musetti was Executive Chairman of Satipel Industrial S.A. Since
May, 2010 he is the managing partner of Pragma Patrimônio. Mr. Musetti is currently a member of the
Boards of Directors Raia Drogasil S.A., of Adecoagro (a company listed in the NYSE) and of Portobello S.A.

Roberto de Oliveira Lima
, 60 years old, is a graduate in Business Administration by the Fundação
Getúlio Vargas, is a post-graduate in Finances by the Fundação Getúlio Vargas and in Strategic Planning by
the Institut Supérieur des Affaires, in France. He was the Chairman of Telemig Celular and of Telemig
Celular Participações from 2008 to 2009. Mr. Lima was also the Chairman of Credicard from 1999 to 2005,
of Vivo S.A. and of Vivo Participações S.A. from 2005 to 2011. Mr. Lima is, since 2005, the Chairman of
Portelcom Participações S.A., of Ptelecom Participações S.A. and of TBS Celular Participações Ltda. He is a
member of the Board of Directors of Telefônica Brasil S.A.

(b)
Description of any of the following events, occurring during the past 5 years:
i.
Any criminal conviction;
ii.
Any adverse decision rendered in an administrative proceeding conducted by the Brazilian SEC
("CVM") and the penalties applied in this connection; and
iii.
Any final and unappealable conviction in a court or administrative proceeding that had the effect
of suspending or disqualifying for the practice of a professional or business activity of whatever
nature

All Managers of the Company represent, for all legal purposes and effects, that during the past five (5) years
they have not been subject to the consequences of any criminal conviction, adverse decision or application
of penalty in any administrative proceeding instituted by the CVM or any final and unappealable conviction,
whether in judicial or administrative instance, the effect of which would be the suspension from or
disqualification for the practice of a professional or business activity of whatever nature.

(c)
Marital relationship, steady union or kinship
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91

Other than as described herein below, there is no kinship between (i)

Mr. Antonio Luiz da Cunha Seabra is a controlling shareholder of Lisis Participações S.A., which has other
members of his family as Shareholders. Lisis Participações S.A. is a signatory of the Shareholders Agreement
executed by the controlling block of the Company.

Mr. Guilherme Peirão Leal is a controlling shareholder of Utopia Participações S.A., which has other
members of his family as Shareholders. Utopia Participações S.A. is a signatory of the Shareholders
Agreement executed by the controlling block of the Company.
Mr. Pedro Luiz Barreiros Passos is a controlling shareholder of Passos Participações S.A., which has other
members of his family as Shareholders. Passos Participações S.A. is a signatory of the Shareholders
Agreement executed by the controlling block of the Company.

(d)
Subordination relationships, service providing or controlling relations, maintained during the past three (3) Fiscal Years
between the managers of the Company and: (i) any entity directly or indirectly controlled by the Company; (ii) any entity
that directly or indirectly controls the Company; and/or (iii) if applicable, a supplier, client, debtor or creditor of the
Company, of controlling or controlled entities of the Company and of any of such persons
Certain Officers of the Company are also managers of entities controlled by the Company.

Certain Members of the Board of Directors are also Shareholders of the signatory companies of the
Shareholders Agreement executed by the controlling block of the Company.

Mr. Antonio Luiz da Cunha Seabra is a direct and indirect controlling shareholder, through Lisis
Participações S.A., a joint-stock company that, together with Mr. Seabra, form the controlling block and
appear as signatories of the Shareholders Agreement executed by the controlling block of the Company.

Mr. Guilherme Peirão Leal is a direct and indirect controlling shareholder, through Utopia Participações
S.A., a joint-stock company that, together with Mr. Leal, form the controlling block and appear as signatories
of the Shareholders Agreement executed by the controlling block of the Company.

Mr. Pedro Luiz Barreiros Passos is a direct and indirect controlling shareholder, through Passos
Participações S.A., a joint-stock company that, together with Mr. Passos, form the controlling block and
appear as signatories of the Shareholders Agreement executed by the controlling block of the Company.

In addition, there is a sublease agreement in place, executed by and between the Company and Janos
Comércio Administração Participações Ltda., in which Messrs. Antonio Luiz da Cunha Seabra, Guilherme
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92
Peirão Leal and Pedro Luiz Barreiros Passos appear as partners, the subject matter of which is the subleasing
of business offices used by members of Natura's board.
(e)
Description of the provisions of any agreements, including insurance policies, providing for the payment or
reimbursement of expenses incurred in by the managers, arising out of compensation of damages caused to third
parties or to the Company, of penalties charged by government officials, or agreements aiming at the settlement of any
administrative or court proceedings, by virtue of the exercise of their duties

The Company has a Civil Liability Insurance for Directors and Officers purchased from Ace Seguros, valid
for the period comprised between 12.31.2011 to 12.31.2012, to cover loss and damages caused to third
parties by acts pertaining to the exercise of the duties and attributions of the Company's Directors and/or
Officers, up to an amount of ten million Brazilian Reais (R$10,000,000.00).

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EXHIBIT VI ­ MANAGEMENT COMPENSATION
ITEM 13 OF THE REFERENCE FORM
Management Compensation
1. Policy or practice for compensating the Board of Directors, Board of Executive Officers, Audit Committee and Committees

(a) Objectives of the compensation policy or practice

The compensation of our Company is partially linked to its results and increase in value. We believe that
the variable portion of the compensation that we offer allows us to attract and ensure we maintain
highly qualified professionals in the management of our Company.

We are permanently attentive to the variations in the external environment and on an annual basis we
compare our salary levels with reference markets, such as competitors in the consumer goods sector,
Brazilian multinationals, exchange-listed companies or companies with similar compensation strategies to
that of Natura. For some years, we have maintained a policy that positions the total compensation of
the various groups of employees on a level above the market average, in order to share the generation
of wealth with all those who participate independently or entrepreneurially to transform our value
proposition into reality.

Our greatest difference in relation to the market is our model of variable compensation and gains, which
is adapted to the characteristics of each public of employees and executives as a form of payment, values
and goals adapted to the reality of each activity.

We also offer a pension plan for our officers and employees, which is a savings plan with incentives in
which the employee invests on a monthly basis up to 5% of their salary and Natura contributes with
60% of this amount.

Combined with this effort, concerning the base compensation, we opt to pay 14 monthly salaries per
year in Brazil, whereas the legal requirement is 13 salaries, which especially benefits lower-income
professional, promoting a culture of savings. Meanwhile, our sales team receives a premium for each
cycle (period of 21 days), proportional to the results obtained. For this public, the 14
th
salary is replaced
by the sales premium, which is a specific model of variable compensation.

Developing leaders is fundamental for maintaining our growth trajectory and is a concept that is aligned
with our Values and Beliefs. Therefore, related initiatives were increased in 2009 to include new
professionals who have joined us in recent years.

For the group of senior executives responsible for Natura's long-term strategy, we link compensation
not only to short-term results, but also to their commitment to our long-term project, for which we
provide them with the opportunity to participate in the Stock Option Plan. We understand that this plan
does not represent the executive's compensation, but can represent a gain depending on the variation in
the stock price on the date these shares are sold. For more information on the Stock Option Plan,
please see item 16 below "Other Material Information".

The changes proposed by the People & Organizational Development Committee and approved by the
Board of Directors sought to ensure a sense of ownership and involvement, strengthening the relation
between compensation and gains and creating value at the Company and ensuring its healthy growth
with a balanced distribution of income when business profitability allows.
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94
According to the new dynamics of the Program, as of 2009, the options to buy or subscribe to the
shares is associated with the decision of the executive to invest at least 50% of the amount received via
profit sharing towards the acquisition of shares in Natura. The options granted may be exercised after a
vesting period of four years (grace period to attain maturity), with a validity of eight years. During this
time, these shares acquired are unavailable for sale and associated with the options, i.e. the sale leads to
the loss of the options. Until the previous year, the vesting was established at three years and the Plan
expired in six years and did not require the purchase and maintenance of shares. With the new terms,
the executive gains longer to choose the best moment to exercise his/her options, at the same time that
Natura reinforces the long-term commitment with senior executives.
The Board of Directors also established that the total annual sum of the profit sharing, based on the
long-term incentive program, cannot exceed 10% of the net profit. With these limits, Natura has a
coherent and well-controlled system that avoids the recent distortions occurring in executive
compensation in other countries.

(b) Breakdown of the compensation, indicating:

i. description of the elements of compensation and the objectives of each;


Our management members have a base compensation and a variable compensation, as well as indirect
benefits.

- Base Compensation: the base compensation is the monthly sum paid to recognize and reflect the value
of the experience and responsibility of the position of each manager.

- Variable Compensation: the variable portion of the compensation of a member of the Company's
management is a way to reward achieving and exceeding goals based on economic, social and
environmental factors that can help the Company obtain its goals based upon these factors.

The variable component, whether short-term compensation or long-term gains, represents a greater
portion for senior executives in relation to the other employees, since we believe in building value
together. Besides the well-defined limits, all variable compensation is linked to effectively attaining the
goals, i.e. exceeding the minimum expectations of growth established annually by management. The
system of performance indicators that measures this performance encompasses the three dimensions of
sustainability.

For example, in 2011, the following indicators were considered: · Economic - consolidated EBITDA and
the financial results of the international operations; · Social - organizational climate survey and the
satisfaction survey of the consultants; · Environmental ­ water consumption and carbon emissions.

ii. what the proportion of each element is in the total compensation;

According to the following table, the proportions for the fiscal year ended December 31, 2011 were:

% related to the total compensation of the amount paid as
Base
compensation
Variable
Compensation
Benefits
Total
Board of Directors
100.0%
0.00%
0.00%
100.00%
Board of Executive Officers
99.75%
0.00%
0.25%
100.00%

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95
iii. method for calculating and adjusting each compensation element; and
The adjustment of the compensation of the members of our management is defined annually in the Annual
Shareholder's Meeting.

iv. reasons justifying the composition of the compensation.
With the compensation policy indicated above, we have the objective of compensating our professionals in
accordance with the responsibilities of their position, market practices and the level of competitiveness of the
Company.
c) main performance indicators taken into consideration in determining each compensation element
The performance indicators used to determine the elements of variable compensation take into
consideration financial, social and environmental aspects.
d) structure of compensation to reflect the evolution in performance indicators
The performance indicators are monitored on a quarterly basis and the final calculation of the financial
results is performed in the subsequent year and is approved by the Board of Directors. The
performance indicator arising from the financial results directly determines the total variable
compensation.

e) relationship between the compensation policy or practice and the interests of the
Company
Since the Company essentially considers the financial results when determining the variable
compensation detailed below, the Company ensures a sustainable compensation without committing any
other investments.

f) existence of compensation borne by direct or indirect subsidiaries or controlling
shareholders
The compensation of all executives is performed solely and directly by the Company, including in the
case of subsidiaries in other countries, with no members of the Board of Directors or of the Board of
Executive Officers receiving any compensation borne by direct or indirect subsidiaries or controlling
shareholders.

g) compensation or benefits related to the occurrence of corporate events
There are no benefits or compensation linked to the occurrence of corporate events.
2. Compensation of the Board of Directors, Audit Committee and Board of Executive Officers of the Company and the
compensation projected for fiscal year 2012
Amounts estimated for 2012
Board of Directors
Board of Executive Officers
Total
Number of Members ..................................................................
9
4
13
Fixed Annual Compensation ...................................
5,654.6
6,931.4
12,586.0
Base Compensation .................................................
5,049.8
6,878.2
11,928.0
Benefits .......................................................................
28.8
53.2
82.0
Participation in Committees ..................................
576.0
-
576.0
Other ..........................................................................
-
-
-
Variable Compensation ............................................
2,349.8
7,189.4
9,539.2
Bonus ..........................................................................
-
-
-
Profit Sharing .............................................................
2,349.8
7,189.4
9,539.2
Participation in Meetings ........................................
-
-
-
Commissions .............................................................
-
-
-
Other ..........................................................................
-
-
-
Post-Employment Benefits ......................................
-
-
-
Benefits from removal from the position ...............
-
-
-
Share-based compensation ......................................
-
2,733.9*
2.733,9-
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96
Monthly compensation .............................................
667.0
1.176.7
1,843.7
Total compensation ..................................................
8,004.4
16,854.7
24.853,1

*
These expenses, to be incurred in by the Company during this fiscal year of 2012 due to the possible exercise of the stock options granted by the
Purchase or Subscription Option Programs of Common Stocks of the Company approved by the shareholders meetings held on 03.29.2005 and
03.23.2009 ("Programs"), indicated in the Explanatory Notes No. 23.2 of the Financial Statements, are not include in the global annual compensation
proposal to be submitted to the general shareholders' meeting to be held on 04.13.2012. Such expenses will result in the fulfillment, by the Company,
of the contractual obligations provided for in the agreements entered into by and between the Company and the beneficiaries of the Program. In this
sense, this matter is not subject to submission of a new deliberation, but only accounting recognition of expenses regarding the obligation in the
execution of the Programs, pursuant to shareholders' meeting deliberation.

Amounts paid in 2011
:
Board of Directors
Board of Executive Officers
Total
Number of Members ..................................................................
6,83
4
10,83
Fixed Annual Compensation ...................................
3.786,6
5.671,0
9.457,6
Base Compensation .................................................
3.786,6
5.656,8
9.443,4
Benefits .......................................................................
-
14,2
14,2
Participation in Committees ..................................
-
-
-
Other ..........................................................................
-
-
-
Variable Compensation ............................................
-
-
-
Bonus ..........................................................................
-
-
-
Profit Sharing .............................................................
-
-
-
Participation in Meetings ........................................
-
-
-
Commissions .............................................................
-
-
-
Other ..........................................................................
-
-
-
Post-Employment Benefits ......................................
-
-
-
Benefits from removal from the position ...............
-
-
-
Share-based compensation ......................................
-
3.714,3
3.714,3
Monthly compensation .............................................
315,6
782,1
1.097,6
Total compensation ..................................................
3.786,6
9.385,3
13.171,9
The Audit Committee was not installed in 2011.
Amounts paid in 2010
:
Board of Directors
Board of Executive Officers
Total
Number of Members ..................................................................
6,42
4
10,42
Fixed Annual Compensation ...................................
3.347,5
4.354,3
8.397,8
Base Compensation .................................................
3.123,5
4.877,2
8.000,7
Benefits .......................................................................
224,0
173,1
397,0
Participation in Committees ..................................
-
-
-
Other ..........................................................................
-
-
-
Variable Compensation ............................................
1.985,4
4.034,4
6.019,8
Bonus ..........................................................................
-
-
-
Profit Sharing .............................................................
1.985,4
4.034,4
6.019,8
Participation in Meetings ........................................
-
-
-
Commissions .............................................................
-
-
-
Other ..........................................................................
-
-
-
Post-Employment Benefits ......................................
-
-
-
Benefits from removal from the position ...............
-
-
-
Share-based compensation ......................................
-
3.038,1
3.038,1
Monthly compensation .............................................
444,4
757,0
1.201,5
Total compensation ..................................................
5.332,9
12.122,7
17.455,6
The Audit Committee was not installed in 2010.
Amounts paid in 2009
:
Board of Directors
Board of Executive Officers
Total
Number of Members ..................................................................
7
4
11
Fixed Annual Compensation ...................................
3.785,4
4.354,3
8.139,7
Base Compensation .................................................
3.561,9
4.230,1
7.792,0
Benefits .......................................................................
223,5
124,2
347,7
Participation in Committees ..................................
-
-
-
Other ..........................................................................
-
-
-
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97
Variable Compensation ............................................
1.712,5
3.634,4
5.346,9
Bonus ..........................................................................
-
-
-
Profit Sharing .............................................................
1.712,5
3.634,4
5.346,9
Participation in Meetings ........................................
-
-
-
Commissions .............................................................
-
-
-
Other ..........................................................................
-
-
-
Post-Employment Benefits ......................................
-
-
-
Benefits from removal from the position ...............
-
-
-
Share-based compensation ......................................
-
1.644,8
1.644,8
Monthly compensation .............................................
458,2
802,8
1.261,0
Total compensation ..................................................
5.497,9
9.633,5
15.131,4
The Audit Committee was not installed in 2010.
3. Variable compensation of the Board of Directors, Board of Executive Officers and Audit
Committee in the last three fiscal years of the Company and the compensation projected for fiscal
year 2012
Amounts estimated for 2012, according to our compensation plan:
Board of Directors
Board of Executive Officers
Total
Number of Members ..................................................................
9
4
13
Salary / Pro-labore ....................................................
5,625.8
6,878.2
12,586.0
Estimated minimum amount ..................................
443.5
905.4
1,348.9
Estimated maximum amount .................................
867.9
2,433.4
3,301.3
Estimated average amount .......................................
625.0
1,719.5
968.2
Profit sharing .............................................................
2,349.8
7,189.4
9,539.2
Estimated minimum amount ..................................
169.8
573.3
743.1
Estimated maximum amount .................................
361.6
2,971.7
3,333.3
Estimated average amount .......................................
261.1
1,797.4
733.8
Benefits .......................................................................
28.8
53.2
82.0
Estimated minimum amount ..................................
28.8
53.2
82.0
Estimated maximum amount .................................
28.8
53.2
82.0
Estimated average amount .......................................
28.8
53.2
82.0
Total ...........................................................................
8,004.4
14,106.0
22,125.2


Amounts paid in 2011, according to our compensation plan:
Board of Directors
Board of Executive Officers
Total
Number of Members ..................................................................
6.83
4
10.83
Salary / Pro-labore ....................................................
3,786.6
5,656.8
9,443.4
Minimum amount ....................................................
318.9
675.9
994.8
Maximum amount ...................................................
814.9
2,111.2
2,926.1
Average amount ........................................................
554.4
1,414.2
871.9
Profit sharing .............................................................
0.0
0.0
0.0
Minimum amount ....................................................
0.0
0.0
0.0
Maximum amount ...................................................
0.0
0.0
0.0
Average amount ........................................................
0.0
0.0
0.0
Amount­ goals reached ..........................................
0.0
0.0
0.0
Amount effectively recognized .............................
0.0
0.0
0.0
Benefits .......................................................................
0.0
14.2
14.2
Minimum amount ....................................................
0.0
14.2
14.2
Maximum amount ...................................................
0.0
14.2
14.2
Average amount ........................................................
0.0
14.2
14.2
Total ...........................................................................
3,786.6
5,671.0
9,457.6
(1)
The Audit Committee was not installed in 2011.

Amounts paid in 2010, according to our compensation plan
(1)
:
Board of Directors
Board of Executive Officers
Total
Number of Members ..................................................................
6
4
10
Salary / Pro-labore ....................................................
3,123.5
4,877.2
8,000.7
Minimum amount ....................................................
270.5
549.0
819.5
Maximum amount ...................................................
791.0
1,925.1
2,716.1
Average amount ........................................................
446.2
1,219.3
1,665.5
Profit sharing .............................................................
1,985.4
4,034.4
6,019.8
Minimum amount ....................................................
108.5
300.0
408.5
Maximum amount ...................................................
840.0
1,984.4
2,824.4
Average amount ........................................................
283.6
1,008.6
1,292.2
Amount­ goals reached ..........................................
1,985.4
4,034.4
6,019.8
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98
Amount effectively recognized .............................
1,985.4
4,034.4
6,019.8
Benefits .......................................................................
224.0
173.0
397.0
Minimum amount ....................................................
0.0
27.7
27.7
Maximum amount ...................................................
58.8
53.0
111.8
Average amount ........................................................
32.0
43.2
75.2
Total ...........................................................................
5,332.9
9,084.6
14,417.5
(1)
The Audit Committee was not installed in 2010.
Amounts paid in 2009, according to our compensation plan
(1)
:
Board of Directors
Board of Executive Officers
Total
Number of Members ..................................................................
7
4
11
Salary / Pro-labore ....................................................
3,561.9
4,230.1
7,792.0
Minimum amount ....................................................
167,7
486,6
654,3
Maximum amount ...................................................
1.065,5
1.579,0
2.644,5
Average amount ........................................................
508,8
1057,5
1.566,4
Profit sharing .............................................................
1.712,6
3.634,4
5.347,0
Minimum amount ....................................................
83,9
276,2
360,1
Maximum amount ...................................................
464,4
1.428,0
1.892,4
Average amount ........................................................
244,7
908,6
1.253,2
Amount­ goals reached ..........................................
1.712,6
3.634,4
5.347,0
Amount effectively recognized .............................
1.712,6
3.634,4
5.347,0
Benefits .......................................................................
223,5
124,2
347,7
Minimum amount ....................................................
51,9
26,7
78,6
Maximum amount ...................................................
65,4
49,8
115,2
Average amount ........................................................
31,9
31,1
62,9
Total ...........................................................................
5,498.0
7,988.7
13,486.7
(1)
The Audit Committee was not installed in 2009.

4. Stock Option Plan

See item 16 ­ Other Material Information.

5. Shares held by members of the Company's Management

The following table indicates the number of shares held directly by our Directors and Officers, as well as
the percentage that their direct individual interests represent in the total number of shares issued at
December 31, 2011, in other words, in relation to our total capital stock:
Board Members/Executive Officers
Position
Number of Shares
Percentage (%)
Antonio Luiz da Cunha Seabra
Co-Chairman
3,628,920
0.8415%
Guilherme Peirão Leal
Pedro Luiz Barreiros Passos ................................................
Co-Chairman
Co-Chairman
3,462,917
855,038
0.8030%
0.1983%
Marcos Lisboa .........................................................................
Board Member
1
0.0000%
Luiz Ernesto Gemignani ........................................................
Board Member
32,200
0.0075%
Julio Moura Neto ....................................................................
Board Member
2,200
0.0005%
Alessandro Giuseppe Carlucci ............................................ Chief Executive Officer
2,220,330
0.5152%
Roberto Pedote ......................................................................
Chief Financial and Investor
Relations Officer
30,804
0.0071%
Lucilene Silva Prado ............................................................... Chief Legal Officer
23,490
0.0054%
José Vicente Marino ...............................................................
Chief Commercial Officer
76,607
0.0178%

Some of our Directors also hold stock indirectly. For more information on the stock held indirectly by
our Directors, see Item "15.1. - Control Group" of the Reference Form.

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99
6. Stock Option Plan recognized in the last three fiscal years

Amounts estimated for the fiscal year 2012
Board of Executive Officers
Number of Members ..................................................................
4
In relation to each Grant ..........................................
Granting date ........................................................................
March 21,
2011
March 19,
2010
April 22,
2009
April 22,
2008
April 24,
2007
March 29,
2006
Number of shares granted ................................................
188.199
601.822
510.048
193.821
120.000
86.265
Vesting period ......................................................................
21.03.2015
19.03.2014
22.04.2013
22.04.2012
24.04.2011
29.03.2010
Deadline to exercise the options ....................................
21.03.2019
19.03.2018
22.04.2017
22.04.2014
24.04.2013
29.03.2012
Period with restriction to share
transfer ...................................................................................
N/A
N/A
N/A
N/A
N/A
N/A
Average weighted exercise price
of each of the following groups of
shares:
46,04
39,46
26,89
24,65
31,75
33,57
Outstanding at the start of
the fiscal year ................................................................................
-
511.112
510.048
193.821
120.000
86.265
Ratified during fiscal year .......................................
-
-
-
-
-
-
Exercised during fiscal year ...................................
-
-
-
38.764
24.000
86.265
Expired during fiscal year .......................................
-
-
-
-
-
-
Fair value of the options at
granting date .............................................................
16,45
10,82
7,83
6,57
9,73
10,73
Potential dilution in the event of
exercise of the options .............................................
0,05%
0,14%
0,13%
0,06%
0,02%
0,02%
Amounts related to fiscal year 2011
(1)
Board of Executive Officers
Number of Members ..................................................................
4
In relation to each Grant ..........................................
Granting date ........................................................................
March 29,
2006
April 24,
2007
April 22,
2008
April 22,
2009
March 19,
2010
March 21,
2011
Number of shares granted ................................................
86,265
120,000
193,821
510,048
601,822
188,199
Vesting period ......................................................................
03.29.2010
04.24.2011
04.22.2012
04.22.2013
03.19.2014
03.21.2015
Deadline to exercise the options ....................................
03.29.2012
04.24.2013
04.22.2014
04.22.2017
03.19.2018
03.21.2019
Period with restriction to share
transfer ...................................................................................
N/A
N/A
N/A
N/A
N/A
N/A
Average weighted exercise price
of each of the following groups of
shares:
31.97
30.24
23.48
25.61
37.58
43.85
Outstanding at the start of
the fiscal year ................................................................................
86,265
124,446
235,343
510,048
556,467
-
Ratified during fiscal year .......................................
-
-
-
-
45,355
-
Exercised during fiscal year ...................................
-
4,446
41,522
-
-
-
Expired during fiscal year .......................................
-
-
-
-
-
-
Fair value of the options at
granting date .............................................................
10.73
9.73
6.57
7.83
10.82
16.45
Potential dilution in the event of
exercise of the options .............................................
0.02%
0.03%
0.05%
0.12%
0.13%
0.05%
a.
The Audit Committee was not installed in 2011.

Amounts related to fiscal year 2010
(1)
Board of Executive Officers
Number of Members ..................................................................
4
In relation to each Grant ..........................................
Granting date ........................................................................
April 10,
2004
March 16,
2005
March 29,
2006
April 24,
2007
April 22,
2008
April 22,
2009
March 19,
2010
Number of shares granted ................................................
-
-
86,265
124,446
235,343
510,048
556,467
Vesting period ......................................................................
04.10.2008
03.162009
03.29.2010
04.24.2011
04.22.2012
04.22.2013
03.19.2014
Deadline to exercise the options ....................................
04.10.2010
03.16.2011
03.29.2012
04.29.2013
04.22.2014
04.22.2017
03.19.2018
Period with restriction to share
transfer ...................................................................................
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Average weighted exercise price
of each of the following groups of
shares:
9.45
20.25
30.17
28.53
22.16
24.17
35.46
Outstanding at the start of
the fiscal year ................................................................................
9,793
9,970
93,085
128,892
235,343
510,048
-
Lost during the fiscal year ......................................
-
-
-
-
-
-
-
Exercised during the fiscal
year
9,793
9,970
6,820
-
-
-
-
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100
Expired during the fiscal
year
-
-
-
-
-
-
-
Fair value of the options at
granting date .............................................................
2.53
5.85
10.73
9.73
6.57
7.83
10.82
Potential dilution in the event of
exercise of the options .............................................
0.00%
0.00%
0.02%
0.03%
0.05%
0.12%
0.13%
(1)
The Audit Committee was not installed in 2010.

Amounts related to fiscal year 2009
(1)
Board of Executive Officers
Number of Members ..................................................................
4
In relation to each Grant ..........................................
Granting date ........................................................................
April 10, 2004
March 16,
2005
March 29,
2006
April 24, 2007
April 22, 2008
April 22, 2009
Number of shares granted ................................................
9,793
9,970
93,085
128,892
235,343
510,048
Vesting period ......................................................................
04.10.2008
03.16.2009
03.29.2010
04.24.2011
04.22.2012
04.22.2013
Deadline to exercise the options ....................................
04.10.2010
03.16.2011
03.29.2012
04.24.2013
04.22.2014
04.22.2017
Period with restriction to share
transfer ...................................................................................
N/A
N/A
N/A
N/A
N/A
N/A
Average weighted exercise price
of each of the following groups of
shares:
8.92
19.12
28.49
26.94
20.92
22.82
Outstanding at the start of
the fiscal year ................................................................................
9,793
9,970
93,085
128,892
235,343
-
Lost during the fiscal year ......................................
-
-
-
-
-
-
Exercised during the fiscal
year
-
-
-
-
-
-
Expired during the fiscal
year
-
-
-
-
-
-
Fair value of the options at
granting date .............................................................
2.53
5.85
10.73
9.73
6.57
7.83
Potential dilution in the event of
exercise of the options .............................................
0.00%
0.00%
0.02%
0.03%
0.05%
0.12%
(1)
The Audit Committee was not installed in 2010.
7. Outstanding Stock Options
Amounts related to fiscal year 2011
(1)
Board of Executive Officers
Number of Members ..................................................................
4
Regarding outstanding options ................................
2006 Plan
2007 Plan
2008 Plan
2009 Plan
2010 Plan
2011 Plan
Number ..................................................................................
86,265
120,000
193,821
510,048
601,822
188,199
Vesting date ..........................................................................
03.29.2010
04.24.2011
04.22.2012
04.22.2013
03.19.2014
03.19.2014
Deadline to exercise the options ....................................
03.29.2012
04.24.2013
04.22.2014
04.22.2017
03.19.2018
03.19.2018
Period with restriction to share
transfer ...................................................................................
N/A
N/A
N/A
N/A
N/A
N/A
Average weighted exercise price .....................................
31.97
30.24
23.48
25.61
37.58
43.85
Fair value of the options at
granting date
.....................................................................
10.73
9.73
6.57
7.83
10.82
16.45
Fair value of all Options at the
last day of the fiscal year ....................................................
2,757,892
3,628,800 4,550,917
13,062,329
22,616,471
8,252,526
(1)
The Audit Committee was not installed in 2011.
8. Exercised Options

Amounts related to fiscal year 2011
(1)
:
Board of Executive Officers
Number of Members ..................................................................
4
Regarding outstanding options ................................
2004 Plan
2005
Plan
2006
Plan
2007
Plan
2008
Plan
2009
Plan
2010
Plan
Number ..................................................................................
-
-
-
4,446
41,522
-
-
Average weighted exercise price .....................................
-
-
-
R$29.23
R$22.97
-
-
Difference between the exercise price and the market
price of shares in relation to exercised Options .........
-
-
-
4,446
41,522
-
-
In relation to the shares from the exercise ............
-
-
-
-
-
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101
Number of shares ................................................................
-
-
-
4,446
41,522
-
-
Average weighted acquisition price .................................
-
-
-
R$29.23
R$22.97
-
-
Total difference between the acquisition price and the
market price of acquired shares ......................................
-
-
-
4,446
41,522
-
-
(1)
The Audit Committee was not installed in 2010.
(2)
Average share price in the market during 2009: R$38.77
9. Material information regarding the Stock Option Plan

Amounts related to fiscal year 2011
(6)
Board of Directors
Board of Executive Officers
a) pricing model ........................................................................
N/A
Binomial
b) data and assumptions used in the pricing
model, including average weighted price of
shares, exercise price, expected volatility,
option duration, expected dividends and risk-
free interest rate ..................................................................
N/A
Volatility of 36%; Dividend yield
of 5.3%; Risk-free rate of 10.9%.
c) method and assumptions used to incorporate
the expected effects of early exercise ............................
N/A
N/A
d) how expected volatility is determined ...........................
N/A
Standard deviation 740 days.
e) whether any other characteristic of the option
was incorporated in the calculation of its fair
value ........................................................................................
N/A
N/A
(6)
The Audit Committee was not installed in 2011.

10. Pension plan for members of the Board of Directors and Board of Executive Officers


Amounts related to fiscal year 2011
(1)
a)
Board of Directors
Board of Executive Officers
Total
b) Number of members ..........................................................
6.83
4
10.83
c) Name of the plan .................................................................
Not applicable
Incentive savings
Incentive savings
d) number of managers in conditions to retire .................
Not applicable
According to 60 years
Contract (end of relationship
with the Company )
-
e) conditions for early retirement ........................................
Not applicable
Minimum age 50 years (end of
relationship with the Company)
-
f) updated amount of contributions accumulated
in the pension plan up to the closing of the
last fiscal year, discounting the portion related
to contributions made directly by the
managers ................................................................................
Not applicable
19.0
(2)
19.0
g) total amount accumulated of the
contributions made during the last fiscal year,
discounting the portion related to
contributions made directly by the managers ...............
Not applicable
15.3
(3)
15.3
h) whether there is the possibility of early
redemption and under which conditions .......................
Not applicable
Yes, early redemption of
Company portion, only upon
termination of the employee
and after 5 years of
contributions to the plan
-
(1)
The Audit Committee was not installed in 2010.
(2)
Amounts corresponding to three officers than joined the plan
(3)
Amounts corresponding to the portion the Company contributed in 2010 for three officers than joined the plan



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102
11. Average compensation of the Board of Directors, Board of Executive Officers and Audit Committee for the last three fiscal
years

Board of Directors
Year
Number of Members
Highest Individual
Compensation
Average Individual
Compensation
Lowest Individual
Compensation
2009
7
1,595.3
785.4
303.5
2010
6.42
1,689.8
761.8
379
2011
6.83
849.3
588.8
353.3

Board of Executive Officers

Year
Number of Members
Highest Individual
Compensation
Average Individual
Compensation
Lowest Individual
Compensation
2009
4
3,056.9
1,997.2
789.6
2010
4
3,962.50
2,271.10
876.7
2011
4
2,111.22
1,417.75
680.66


Audit Committee

The Audit Committee was not installed in 2011.

12. Description of the contractual arrangements, insurance policies or other instruments that structure
compensation or indemnification mechanisms for executives in the event of termination or retirement,
indicating the financial consequences for the Company

On December 31, 2011, we did not hold any contractual arrangements, insurance policies or other
instruments that structure compensation or indemnification mechanisms for executives in the event of
termination or retirement.
13. For the last three fiscal years, indicate the percentage of total compensation of each organ recognized in the profit or loss
of the Company for members of the Board of Directors, Board of Executive Officers or the Audit Committee that are parties
related to the direct or indirect controlling shareholders, as defined by the accounting rules dealing with this matter

Amounts related to fiscal year 2009
(1)
Board of Directors
Board of Executive Officers
Total
55%
0%
21%
(1)
The Audit Committee was not installed in 2009.


Amounts related to fiscal year 2010
(1)
Board of Directors
Board of Executive Officers
Total
56%
0%
21%
(1)
The Audit Committee was not installed in 2010.
Amounts related to fiscal year 2011
(1)
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103
Board of Directors
Board of Executive Officers
Total
55%
0%
21%
(1)
The Audit Committee was not installed in 2011.
14. For the last three fiscal years, indicate the amounts recognized in the profit or loss of the Company as compensation of
the members of the board of directors, statutory officers or audit committee grouped by body, for any reason other than the
position they hold, such as consulting or advisory commissions and services
Amounts related to fiscal year 2011
(1)
Board of Directors
Board of Executive Officers
Total
0
0
0
(1)
The Audit Committee was not installed in 2010.

Amounts related to fiscal year 2010
(1)
Board of Directors
Board of Executive Officers
Total
0
0
0
(1)
The Audit Committee was not installed in 2010.

Amounts related to fiscal year 2009
(1)
Board of Directors
Board of Executive Officers
Total
0
0
0
(1)
The Audit Committee was not installed in 2009.
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104
15. For the last three fiscal years, indicate the values recognized in the profit or loss of the direct or indirect controlling
shareholders, of companies under shared control and of subsidiaries of the Company as compensation of the members of the
Board of Directors, Board of Executive Officers or Audit Committee, grouped by body, specifying the reason for such values
being attributed to these individuals

We do not have any values recognized in the profit or loss of the direct or indirect controlling
shareholders, of companies under shared control or of subsidiaries of the Company as compensation of
the members of the Board of Directors or Board of Executive Officers. In addition, during fiscal year
2010, the Audit Committee was not installed.
16. Other Material Information

The Stock Option Plan of the Company is a program in which participants must disburse an amount to
exercise the option, which is called fair value. The fair value of options granted is calculated based on
the binomial pricing method and is recognized as an expense in the profit or loss of the period during
which it was acquired, after meeting certain conditions. On the balance sheet dates, the management of
the Company reviews its estimates for the number of options and when applicable recognizes them in
the profit or loss of the fiscal year/quarter against shareholders' equity, reflecting the effects arising from
the revision of these initial estimates.

The exercise of each Option by executives is made after fulfilling certain requirements of each plan, such
as the vesting period, and against payment of the fair value adjusted monthly by the participant of the
plan. The rate of monetary adjustment of the fair value is defined in each option plan approved annually
by the Board of Directors, in accordance with the rules for Stock Option Plans in force.

The difference between the amount paid to exercise the option and the price at the time of sale of the
stock in the Company resulting from this exercise may represent a gain for the participants of each plan.
Board of Directors
Board of Executive Officers
Total
Number of Members ..................................................................
6.83
4
10.83
Options granted on the basis of Plan 2011,
reference year 2010 ....................................................................
0
202,057
202,057
Average Price of Options Granted on the basis of
Fair Value of R$42.39 in the plan of 2011 .............................
0
R$8,565,196.00
R$8,565,196.00

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