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Grendene S.A. Reference Form 2018 Version: 7 (A free translation of the original in Portuguese) Contents 1. Persons responsible for the form 1.1 Statement and identification of persons responsible 1 1.1 Statement by the CEO 2 1.2 Statement by the Investor Relations Officer 3 2. External auditors 2.1/2.2 Identification and remuneration of the auditors 4 2.3 Other material information 6 3. Selected financial information 3.1 Financial information 7 3.2 Non-accounting measures 8 3.3 Events subsequent to the last financial statements 9 3.4 Policy for allocation of profits 10 3.5 Distribution of dividends and retention of net profit 12 3.6 Declaration of dividends to the account of Retained earnings or Reserves 13 3.7 Level of debt 14 3.8 Obligations 15 3.9 Other material information 16 4. Risk factors 4.1 Description of the risk factors 17 4.2 Description of the principal market risks 24 4.3 Material non-confidential legal, administrative or other proceedings 27 4.4 Non-confidential court, administrative or arbitration proceedings in which the adversary parties are managers, former managers, controlling shareholders, former controlling shareholders or investors 33 4.5 Material confidential proceedings 34 4.6 Non-confidential court, administrative or arbitration proceedings that are repetitive or connected, and significant in aggregate 35 4.7 Other material contingencies 36 4.8 Rules of the origin country and of the country in which the securities are maintained in custody 37
Transcript

Grendene S.A. – Reference Form – 2018 Version: 7 (A free translation of the original in Portuguese)

Contents

1. Persons responsible for the form

1.1 – Statement and identification of persons responsible 1

1.1 – Statement by the CEO 2

1.2 – Statement by the Investor Relations Officer 3

2. External auditors

2.1/2.2 – Identification and remuneration of the auditors 4

2.3 – Other material information 6

3. Selected financial information

3.1 – Financial information 7

3.2 – Non-accounting measures 8

3.3 – Events subsequent to the last financial statements 9

3.4 – Policy for allocation of profits 10

3.5 – Distribution of dividends and retention of net profit 12

3.6 – Declaration of dividends to the account of Retained earnings or Reserves 13

3.7 – Level of debt 14

3.8 – Obligations 15

3.9 – Other material information 16

4. Risk factors

4.1 – Description of the risk factors 17

4.2 – Description of the principal market risks 24

4.3 – Material non-confidential legal, administrative or other proceedings 27

4.4 – Non-confidential court, administrative or arbitration proceedings in which the adversary parties are managers, former managers, controlling shareholders, former controlling shareholders or investors

33

4.5 – Material confidential proceedings 34

4.6 – Non-confidential court, administrative or arbitration proceedings that are repetitive or connected, and significant in aggregate

35

4.7 – Other material contingencies 36

4.8 – Rules of the origin country and of the country in which the securities are maintained in custody 37

Grendene S.A. – Reference Form – 2018 Version: 7 (A free translation of the original in Portuguese)

Contents

5. Risk management and internal controls

5.1 – Risk management policy 38

5.2 – Description of the market risks management policy 39

5.3 – Description of the internal controls 42

5.4 – Compliance Program 44

5.5 – Significant alterations 46

5.6 – Other relevant information – risk management and internal controls 47

6. Issuer's history

6.1 / 6.2 / 6.4 – Details of constitution of the Issuer, period of duration and date of CVM registry 48

6.3 – Brief history 49

6.5 – Information of any petition for bankruptcy founded on a significant amount, or for judicial recovery or out-of-

court reorganization. 50

6.6 – Other material information 51

7. Issuer's activities

7.1 – Description of the activities of the Issuer and its subsidiaries 52

7.1.a – Specific information of mixed capital companies 53

7.2 – Information on operational segments 54

7.3 – Information on products and services related to the operational segments 55

7.4 - Clients responsible for more than 10% of total net revenue 59

7.5 - Material effects of state regulation on the activities 60

7.6 – Significant revenues coming from outside Brazil 63

7.7 – Effects of foreign regulation on the Company's activities 64

7.8 – Social and environmental policies 65

7.9 – Other material information 66

8. Extraordinary transactions and business

8.1 – Extraordinary transactions 67

8.2 – Significant alterations in the Issuer’s manner of conducting its business 68

8.3 – Significant contracts entered into by Issuer and its subsidiaries not directly related to its operational activities 69

Grendene S.A. – Reference Form – 2018 Version: 7 (A free translation of the original in Portuguese)

Contents

8.4 – Other material information – extraordinary transactions 70

9. Material announcements

9.1 – Material non-current assets - Others 71

9.1 – Material non-current assets / 9.1.a – Fixed assets 72

9.1 – Material non-current assets / 9.1.b – Intangible assets 73

9.1 – Material non-current assets / 9.1.c – Interests in companies 75

9.2 – Other material information 82

10. Comments by the chief officers

10.1 – General conditions of finances, assets and liabilities 83

10.2 - Operational profit and Financial revenue (expenses) 89

10.3 – Events with material on the financial statements – past or expected 93

10.4 – Significant changes in accounting practices – Qualifications or emphases in Auditors' Opinion 94

10.5 – Critical accounting policies 95

10.6 – Material items not evidenced in the financial statements 96

10.7 – Comments on the items not evidenced in the financial statements 97

10.8 – Business plan 98

10.9 – Other factors with material influence 100

11. Forecasts

11.1 – Guidance forecasts and assumptions 101

11.2 - Monitoring of and changes to the forecasts published 103

12. Meetings and management

12.1 – Description of the management structure 106

12.2 – Rules, policies and practices in relation to the General Meetings of Stockholders 109

12.3 – Rules, policies and practices relating to the Board of Directors 111

12.4 – Description of the commitment clause for resolution of disputes through arbitration 112

12.5/6 – Composition and professional experience of the management and the Audit Board 113

12.7/8 – Composition of the committees 119

Grendene S.A. – Reference Form – 2018 Version: 7 (A free translation of the original in Portuguese)

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12.9 – Existence of any conjugal relationship, stable union or family relationship up to second degree in relation to managers of the Issuer, subsidiaries and parent companies.

121

12.10 – Relationships of subordination, provision of service or control between managers and subsidiaries, parent companies or others

124

12.11 – Agreements, including insurance policies, for payment or reimbursement of expenses borne by the managers.

132

12.12 – Other material information 133

13. Management compensation

13.1 – Description of the remuneration policy or practice, including that of non-statutory directors 135

13.2 – Total of the remuneration of the Board of Directors, the Executive Board and the Audit Board 138

13.3 – Variable remuneration of the Board of Directors, the Executive Board and the Audit Board 142

13.4 – Share-based remuneration plan for the Board of Directors and the Executive Board 143

13.5 – Share-based remuneration of the Board of Directors and the statutory directors 148

13.6 – Information on the open options held by the Board of Directors and the statutory directors 154

13.7 – Options exercised and shares delivered in relation to the share-based remuneration of the Board of Directors and the statutory directors

155

13.8 – Information necessary for understanding of the data disclosed in items 13.5 to 13.7 – Method of pricing of the value of the shares and the options

156

13.9 – Holdings in shares, unit shares and other securities that are convertible, held by managers and members of the Audit Board – listed by body

157

13.10 – Information on the pension plans granted to the members of the Board of Directors and statutory directors 158

13.11 - Maximum, minimum and average individual remuneration of the Board of Directors, the statutory directors and the Audit Board

159

13.12 – Mechanisms of remuneration or indemnity for managers in the event of being removed from office, or retirement

160

13.13 – Remuneration of managers and members of the Audit Board who are related parties of the controlling stockholders, as a percentage of total remuneration of all managers and members of the Audit Board

161

13.14 – Remuneration of managers and members of the Audit Board, grouped by body, received for any reason other than the function they hold

162

13.15 - Remuneration of management or the Audit Board recognized in the Profit and loss account of companies that are direct or indirect controlling stockholders, or companies under common control, or subsidiaries of, the Issuer

163

13.16 - Other material information 164

14. Human resources

14.1 - Description of human resources 167

14.2 – Material changes - Human resources 168

Grendene S.A. – Reference Form – 2018 Version: 7 (A free translation of the original in Portuguese)

Contents

14.3 – Description of the policy for employees' remuneration 169

14.4 – Description of relations between the Issuer and the union 171

14.5 – Other material information 172

15. Control and economic group

15.1 / 15.2 – Stockholding position 173

15.3 – Distribution of capital 175

15.4 – Organization diagram of the Stockholding and of the economic group 176

15.5 – Stockholders' Agreement filed at the Issuer's head office, or in which the controlling stockholder is a party 178

15.6 – Significant changes in the interests of the members of the controlling group and managers of the Issuer 179

15.7 – Main stockholding transactions 184

15.8 – Other material information 185

16. Transactions with related parties

16.1 – Description of the rules, policies and practices of the Issuer in relation to transactions with related parties 186

16.2 – Information on transactions with related parties 187

16.3 – Identification of the measures taken to deal with conflicts of interest - proof of the strictly commutative nature of terms agreed, and/or that compensatory payment is appropriate

205

16.4 – Other material information 206

17. Share capital

17.1 – Information on the share capital 207

17.2 – Increases in the share capital 208

17.3 – Information on share splits, reverse splits or stock bonuses 209

17.4 – Information on reduction of the share capital 210

17.5 – Other material information 211

18. Securities

18.1 – Rights of the shares 212

18.2 – Description of any rules in the By-laws that limit the right to vote held by significant stockholders or which oblige them to make a public offering

213

Grendene S.A. – Reference Form – 2018 Version: 7 (A free translation of the original in Portuguese)

Contents

18.3 – Description of the exceptions and suspensive clauses relating to property or political rights specified in the By-laws

214

18.4 – Trading volume and highest and lowest share prices of the securities traded 215

18.5 – Description of other securities issued 216

18.6 – Brazilian markets in which the securities are admitted for trading 217

18.7 – Information on the class and type of security admitted for trading on foreign markets 218

18.8 – Securities issued abroad 219

18.9 – Public offerings for distribution made by the Issuer or third parties, including controlling stockholders and affiliated and subsidiary companies, in relation to the securities of the Issuer

220

18.10 – Allocation of the proceeds of public offerings for distribution, and any divergences 221

18.11 – Description of the public offerings for acquisition made by the Issuer in relation to the shares issued by third parties

222

18.12 – Other material information 223

19. Buyback plans / Treasury shares

19.1 – Information on buyback plans for shares of the Issuer 224

19.2 – Movement in treasury shares 226

19.3 – Other material information – Buyback plans / Treasury shares 228

20. Trading policy

20.1 – Information on the securities trading policy 229

20.2 – Other material information 230

21. Disclosure policy

21.1 – Description of the internal rules, regulations or procedures relating to disclosure of information 233

21.2 – Description of the policy for disclosure of a material act or fact and of the procedures relating to maintaining secrecy on material information not disclosed

234

21. 3 – Members of management who are responsible for implementation, maintenance, evaluation, monitoring and inspection of the information disclosure policy

236

21.4 – Other material information 237

Grendene S.A. – Reference Form – 2018 Version: 7 (A free translation of the original in Portuguese)

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1.1 – Statement and identification of persons responsible

Name of person responsible for content of the Form Rudimar Dall Onder

Position of the person responsible Chief Executive Officer

Name of person responsible for content of the Form Francisco Olinto Velo Schmitt

Position of the person responsible Chief Investor Relations Officer

Grendene S.A. – Reference Form – 2018 Version: 7 (A free translation of the original in Portuguese)

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1.1 –Statement of the Chief Executive Officer

Name of person responsible Rudimar Dall Onder

Position of the person responsible Chief Executive Officer

The above statutory officer warrants that: a. He has reviewed the Reference Form. b. All the information contained in the Form complies with CVM Instruction 480, in particular with Articles 14 to 19. c. The information contained in it, as a whole, gives a true, exact and complete picture of the economic and financial situation of the Issuer and the risks inherent to its activities and the securities issued by it.

_________________________________________

Rudimar Dall’Onder

Grendene S.A. – Reference Form – 2018 Version: 7 (A free translation of the original in Portuguese)

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1.2 – Statement of the Chief Investor Relations Officer

Name of person responsible Francisco Olinto Velo Schmitt

Position of the person responsible Chief Investor Relations Officer

The above statutory officer warrant that: a. They have reviewed the Reference Form. b. All the information contained in the Form complies with CVM Instruction 480, in particular with Articles 14 to 19. c. The information contained in it, as a whole, gives a true, exact and complete picture of the economic and financial situation of the Issuer and the risks inherent to its activities and the securities issued by it.

_________________________________________

Francisco Olinto Velo Schmitt

Grendene S.A. – Reference Form – 2018 Version: 7 (A free translation of the original in Portuguese)

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2.1 / 2.2 – Identification and remuneration of the Auditors

Does the company have an auditor? Yes

CVM Code 287-9

Type of auditor Brazilian

Name / formal name Pricewaterhousecoopers Auditores Independentes

Tax number (CPF / CNPJ) 61.562.112/0006-35

Period of provision of service Jan. 1, 2012 to Dec. 31, 2016

Description of the service contracted Review of the ITRs (Holding company and Consolidated) and audit of the financial statements (Holding company and Consolidated)

Total amount of the remuneration of the external auditors, separated by type of service

For the business year ended December 31, 2016: R$ 444,800.00 for auditing services provided, and R$ 193,100.00 for other services related to Bloco K, e-social and SPED, corresponding to 43.4% of the total of the external auditing services.

Justification for the change in auditors Substitution to comply with CVM Instruction 308/99 (Article 31), which makes change in the auditors on a rotation basis obligatory.

Reason presented by the auditor, in the event of disagreement with the justification given by the Issuer

There was no disagreement

Name of the personal with technical responsibility Period of provision of service

Personal tax number (CPF)

Address

Emerson Lima de Macedo Jan. 1, 2012 to Oct. 23, 2014 497.470.295-53 Avenida Mostardeiro, 800, 8º e 9º andar, Independência, Porto Alegre, RS, Brasil, CEP 90430-000, Tel. (51) 33781700, Fax (51) 33281609, e-mail: [email protected]

Fábio Abreu de Paula Oct. 24, 2014 to Dec. 31, 2016 935.194.436-00 Avenida Mostardeiro, 800, 8º e 9º andar, Independência, Porto Alegre, RS, Brasil, CEP 90430-000, Tel. (51) 33781700, Fax (51) 33281609, e-mail: [email protected]

Grendene S.A. – Reference Form – 2018 Version: 7 (A free translation of the original in Portuguese)

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Does the company have an auditor? Yes

CVM Code 471-5

Type of auditor Brazilian

Name / formal name Ernst & Young Auditores Independentes S.S.

Tax number (CPF / CNPJ) 61.366.936/0002-06

Period of provision of service Jan. 1, 2017

Description of the service contracted Review of the ITRs (Holding company and Consolidated) and audit of the financial statements (Holding company and Consolidated)

Total amount of the remuneration of the external auditors, separated by type of service

For the business year ended December 31, 2017: R$ 409,2 mil for auditing services provided, and R$ 131,1 mil for other services related to tax advisory, corresponding to 32% of the total of the external auditing services.

Justification for the change in auditors

Reason presented by the auditor, in the event of disagreement with the justification given by the Issuer

Name of the personal with technical responsibility Period of provision of service

Personal tax number (CPF)

Address

Américo Franklin Ferreira Neto Jan. 1, 2017 to Jul. 12, 2018 045.379.898-58 Avenida Mostardeiro, 322, 10º andar, Independência, Porto Alegre, RS, Brasil, CEP 90430-000, Tel. (51) 32045500, e-mail: [email protected]

Guilherme Ghidini Neto Jul. 13, 2018 727.640.400-59 Avenida Mostardeiro, 322, 10º andar, Independência, Porto Alegre, RS, Brasil, CEP 90430-000, Tel. (51) 32045500, e-mail: [email protected]

Grendene S.A. – Reference Form – 2018 Version: 7 (A free translation of the original in Portuguese)

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2.3 - Other material information There is no other material information

Grendene S.A. – Reference Form – 2018 Version: 7 (A free translation of the original in Portuguese)

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3.1 – Financial information – Consolidated

(R$ ) Business year to Dec. 31, 2017 Business year to Dec. 31, 2016 Business year to Dec. 31, 2015

Stockholders’ equity 3,217,609,507.80 2,922,069,716.39 2,616,759.684.80

Total assets 3,576,007,831.91 3,253,820,167.71 3,045,641,601.24

Net revenue / Rev. from Financial Intermediation / Revenue from insurance premiums

2,251,971,864.18 2,045,114,859.07 2,202,795,788.22

Gross profit 1,100,755,721.40 996,527,133.79 1,067,883,222.74

Net profit 660,901,853.,91 633,954,298.03 539,310,834.60

No of shares, excluding Treasury shares 300,712,457 300,649,700 300,654,974

Book value per share (R$ ) 10.699954 9.719184 8.703530

Net profit per share 2.198500 2.110100 1.834200

Diluted earnings per share 2.19 2.11 1.83

Grendene S.A. – Reference Form – 2018 Version: 7 (A free translation of the original in Portuguese)

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3.2 – Non-accounting measures

Reconciliation of Ebit and Ebitda * (R$ '000) 2015 2016 2017

Net profit for the year 551,223 634,492 660,929

Minority interests (11,912) (537) (26)

Taxes on profit 43,768 34,157 43,189

Net financial revenue (expenses) (182,347) (268,518) (238,502)

EBIT 400,732 399,594 465,590

Non-recurring effect 53,977 8,786 7,781

Adjusted EBIT 454,709 408,380 473,371

Depreciation and amortization 53,652 57,878 60,639

EBITDA 454,384 457,472 526,229

Non-recurring effect 52,580 8,786 7,781

Adjusted EBITDA 506,964 466,258 534,010

EBIT Margin 18,2% 19.5% 20.7%

Adjusted EBIT margin 20,7% 20.0% 21.0%

EBITDA Margin 20.6% 22.4% 23.4%

Adjusted EBITDA margin 23.0% 22.8% 23.7%

* Presented in accordance with CVM Instruction 527 of Oct. 4, 2012. Since its listing, Grendene has published its Ebitda. Ebitda is not a measure under Brazilian accounting practices (‘BR GAAP’); it does not represent cash flow for the periods presented; and it should not be considered as a substitute for net profit, nor as an indicator of operational performance of the company, nor as a substitute for cash flow as an indicator of liquidity. Because Grendene has low capital-intensiveness, the difference between operational profit before financial effects - also known as Ebit - and Ebitda, is very small, corresponding to the value of depreciation. For this reason Grendene believes that Ebit better reflects the Company’s operational performance, and it is Ebit that management uses internally as its measure of performance. We also call attention to the fact that, with the adoption of the new accounting practice, both Ebitda and Ebit are considered at present value, since revenues have been adjusted to present value, and we now publish the statement in accordance with CVM instruction 527, of October 4, 2012.

Grendene S.A. – Reference Form – 2018 Version: 7 (A free translation of the original in Portuguese)

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3.3 – Events subsequent to the last financial statements

There have been no subsequent events that might substantially change the accounting statements for December 31, 2017.

Grendene S.A. – Reference Form – 2018 Version: 7 (A free translation of the original in Portuguese)

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3.4 – Policy for allocation of profits

a. Rule on retention of profits

In the business years ended December 31, 2015, 2016 and 2017:

In accordance with Clause 32 of Grendene’s by-laws: Stockholders have the right to the annual mandatory dividend, which is equivalent to a minimum of 25% (twenty five per cent) of the net profit for the period, with the following amount deducted or added (as appropriate):

a. 5% (five percent) for constitution of the legal reserve, until that reserve reaches the limits set by law; and

b. an amount for formation of reserves for contingencies, and reversion of such reserves as have been formed in prior business years in accordance with Article 195 of the Corporate Law.

§1. Payment of the dividend referred to in this article is limited to the amount of the net profit made in the business year, and the difference is recorded as Retained earnings in accordance with Article 197 of the Corporate Law. Profit recorded in retained earnings, when realized, if they have not been absorbed by losses in subsequent business years, must be added to the first dividend declared after realization.

§2. The General Meeting of Stockholders may, by a proposal from the bodies of management, allocate a portion of the net profit to constitution and/or maintenance of the statutory profit reserve named ‘Reserve for Acquisition of Shares’ the purpose of which is to redeem, repurchase or acquire shares issued by the Company itself, for purposes which may include compliance with its obligations to deliver shares to participants in the Stock Options Plan approved by the Company who exercise their options. The Share Acquisition Reserve may be formed from up to 100% of the net profit that remains after the deductions required by law and by the by-laws, and the balance of which will have a maximum limit of 20% of the share capital. At the end of the business year, any remaining balance not used of this reserve may be used, for the same purpose, for the subsequent business year if management deems this to be necessary, upon approval by the General Meeting of Stockholders and, if not totally or partially used, the said balance will be reverted to payment of dividends. As specified in Article 198 of the Corporate Law, allocation of profits to constitution of the Share Acquisition Reserve may not be approved if it operates to the detriment of distribution of the obligatory dividend.

§3. The remaining profits shall be allocated in whatever way is approved by the General Meeting of Stockholders, in accordance with the proposal made by the Executive Board, subject to the applicable provisions of law, notably Article 202, §6, of Law 6404/76.

Further according to Article 35: The General Meeting of Stockholders may, upon proposal by the bodies of management, allocate to the reserve for tax incentive balances, in accordance with Article 195-A of Law 6404/76, as amended by Law 11638/07, the portion of net profit arising from governmental donations or subsidies granted in relation to investments, which may be excluded from the basis of calculation of the mandatory dividend.

In the years 2015, 2016 and 2017 the Company allocated the whole of the amount received as subsidy for investments to the Tax Incentives Reserve, as allowed by law and by the by-laws.

Amounts of retained earnings

Allocation of the Net profit for the year 2015 2016 2017

Net profit for the year (a) 551,223,335.75 634,491,601.48 660,928,515.86

Allocation:

Reserve for tax incentives received for investments (b) (271,634,996.27) (264,614,866.54) (253,689,966.35)

Legal reserve (c) (13,979,416.99) (18,493,836.74) (20,361,927.47)

Basis of calculation of the mandatory dividend (a + b + c = d) 265,608,922.49 351,382,898.20 386,876,622.04

Share acquisition reserve (Stock Options) (e) 0.00 0.00 (9,103,478.70)

Reversal of balance of profit reserves retained for additional dividend (f) 0.00 0.00 0.00

Mirror reversal of reserve (equal to reserve made in subsidiary) (g) 10,316,725.47 0.00 0.00

Dividends proposed by management (d + e + f + g = h) 275,925,647.96 351,382,898.20 377,773,143.34

Distribution of the dividends proposed by management:

Mandatory dividend – 25% (i) 66,402,230.62 87,845,724.55 96,719,155.51

Dividend in excess of the mandatory minimum for the business year (j) 109,523,417.34 103,537,173.65 121,053,987.83

Interest on Equity (‘IOE’) (k) 100,000,000.00 160,000,000.00 160,000,000.00

Total of dividends distributed to stockholders (i + j + k = l) 275,925,647.96 351,382,898.20 377,773,143.34

Grendene S.A. – Reference Form – 2018 Version: 7 (A free translation of the original in Portuguese)

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3.4 – Policy for allocation of profits

b. Rules on distribution of dividends

Under Clause 33 of the by-laws the Company may, by decision of the Board of Directors, pay its stockholders an amount referred to as Interest on Equity, able to be calculated as part of the mandatory dividend governed by Clause 32, and for all purposes this amount shall be calculated as part of the dividends distributed by the Company.

Also, under the sole sub-paragraph of the same clause of the by-laws, by a decision of the Board of Directors the Company may pay its stockholders dividends on account of retained earnings of prior business years.

§1: Dividends do not attract interest, and if not claimed by any stockholder within 3 (three) years of the date of the decision to distribute them revert in favor of the Company.

c. Frequency of distribution of dividends

Under Clause 34 of its by-laws the Company may raise interim balance sheets at intervals of six months, three months or less and, by decision of the Board of Directors, declare dividends arising from the profit found in the financial statements, on account of the total to be distributed at the end of the respective business year, subject to the limits specified by law. Dividends thus declared constitute advances against the mandatory dividend referred to in Article 32.

In the years 2015, 2016 and 2017 the Company declared and paid dividends quarterly.

d. Restrictions on distribution of dividends

Under Clause 32, §1, the payment of the dividend referred to in Clause 32 is limited to the amount of the net profit of the business year that has been realized. Any difference is recorded as retained earnings in accordance with Article 197 of the Corporate Law.

Grendene S.A. – Reference Form – 2018 Version: 7 (A free translation of the original in Portuguese)

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3.5 – Distribution of dividends and retention of net profit

(R$ ) Business year to Dec. 31, 2017 Business year to Dec. 31, 2016 Business year to Dec. 31, 2015

Adjusted net profit 660,928,515.86 634,491,501.48 551,223,335.75

Dividend distributed as a % of adjusted net profit

57.200000 55.400000 48.200000

Return on Issuer's Stockholders’ equity, %

22.600000 24.200000 23,700000

Total dividend distributed 377,773,143.34 351,382,898.20 265,608,922.49

Net profit retained 274,051,893.82 283,108,703.28 285,614,413.26

Date of approval of the retention 04/23/2018 04/10/2017 04/11/2016

Net profit retained Amount Date of payment Amount Date of payment Amount Date of payment

Gross Interest on Equity

Common 130,000,000.00 05/16/2018 30,000,000.00 05/18/2016 100,000,000.00 04/27/2016

Common 30,000,000.00 05/17/2017

Common 130,000,000.00 04/26/2017

Obligatory dividend

Common 19,630,000.00 05/16/2018 51,190,824.65 05/18/2016 67,384,476.90 05/13/2015

Common 69,078,060.63 05/17/2017

Common 55,584,193.70 08/16/2017

Common 73,480,889.01 11/22/2017

Common 45,505,162.63 08/17/2016

Common 76,093,053.01 11/16/2016

Common 18,593,857.91 04/26/2017

Common 43,889,275.91 08/12/2015

Common 53,757,753.05 11/11/2015

Common 577,416.63 04/27/2016

Grendene S.A. – Reference Form – 2018 Version: 7 (A free translation of the original in Portuguese)

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3.6 – Declaration of dividends to the account of Retained earnings or Reserves

R$ ’000 Dec. 31, 2015 Dec. 31, 2016 Dec. 31, 2017

a. Retained earnings - - -

b. Reserves constituted - - 9,103,478.70

c. Mirror reversal of reserve (precisely equal to reserve made in subsidiary – approved at AGM of April 11, 2016.

10,316,725.47 - -

Grendene S.A. – Reference Form – 2018 Version: 7 (A free translation of the original in Portuguese)

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3.7 – Level of debt

Business year Total amount of all debt, of any type

Type of index Indebtedness index

Description and reason for use of different index

Dec. 31, 2017 358,398,324.11 Indebtedness index 0.11138652

Grendene S.A. – Reference Form – 2018 Version: 7 (A free translation of the original in Portuguese)

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3.8 – Obligations

Business year to Dec. 31, 2017

Type of Obligation Type of guarantee Other guarantees

or privileges Less than one year One to three years Three to five years Over five years Total

Loans With collateral 10,833,835.19 31,389,446.79 0.00 0.00 42,223,281.98

Financings Unsecured 311,239,915.95 2,412,999.28 2,522,126.90 0.00 316,175,042.13

Total 322,073,751.14 33,802,446.07 2,522,126.90 0.00 358,398,324.11

Remarks

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3.9 – Other material information To assist in optimum understanding of Item 3.5 – Distribution of dividends and retention of net profit As from its initial public offering in 2004, the Company adopted as a Dividend Policy distribution of 100% of the accounting profit. Until 2007, the amounts of the tax incentive benefits that the Company receives were not included as part of this net profit: until that time they were reported directly in the Company’s Shareholders’ equity, until the advent of Law 11638/2007. From then on, as was made optional by Provisional Measure 449/08, which became Law 11941/09, the Company then began to exclude these amounts, which refer to the tax incentives, from the base amount for calculation of dividends, and also adopted their exclusion from the Real Profit Calculation Account Book (Livro de Apuração do Lucro Real, or Lalur), in full compliance at all times with those provisions of law.

On May 14, 2009 Grendene disclosed, through a Material Announcement, the decision adopted by the Company’s Board of Directors in a meeting held on that date, that as from that date the advances against dividends would be distributed and paid to stockholders quarterly.

From the profits ascertained in the year 2010, the Company deducted, from the amount adopted as the basis of dividends, the amount of the tax incentives as specified by Law 11638/2007, Article 195-A of Law 6404/76*, and Article 18 of Law 11941 of May 27, 2009, as informed in Item 3.5 (Net profit retained), and accounted in Reserves for tax incentives; and, based on Sub-item II (exclusion from the Real Profit Calculation Account Book) of the amount arising from government donations or subventions for investments, recognized in the business year, for the purposes of calculation of the Real profit), did not offer them to taxation.

*Law 11638/2007, which amends Article 195-A of Law 6404/76, states: Reserve for tax incentives - Article 195-A - the General Meeting of Shareholders may, upon a proposal by the management bodies, allocate to the Tax incentives reserve the portion of the net profit arising from governmental donations or subventions for investments, which may be excluded from the basis of calculation of the obligatory dividend (Sub-item I of the head paragraph of Article 202 of this Law).

At the meeting of the Board of Directors of February 24, 2011, a change in the policy for distribution of dividends was approved, applicable to the results of the business year 2011 and subsequent years.

After very detailed analysis of the legal issues arising from the changes in the legislation, the Company decided that, starting in 2011, while continuing to comply completely with all the commitments relating to the concession of tax benefits, and after analyzing its investment needs, it will increase the distribution of dividends, even if this results in part of the funds allocated to this payment becoming subject to taxation, as specified by the Law. With the start of the New Dividend Policy, the percentage level of dividends will be analyzed and decided by management annually, in accordance with the need for funds for capital expenditure, or business opportunities, or to fund other commitments of the Company, and it may be changed in any year if the Company’s management believes this to be appropriate.

In 2011 the intended percentage of total distribution of dividends – the dividend payout – will be approximately 75% of the Net profit for the year, after the allocations to reserves, etc., required by law.

The New Dividend Policy was widely disclosed in a Material Announcement published on February 24, 2011. The Company has maintained the policy of distributing dividends quarterly.

In 2012 the percentage decided of total distribution of dividends – the dividend payout – was approximately 75% of the Net profit for the year, after the allocations to reserves required by law, in the same way as adopted in 2011.

For the 2013 business year, due to investment additional to the habitual level (capex), the Company decided the percentage of distribution of dividends - the payout - at approximately 65% of the Net profit for the year after constitution of the legal reserves, as published in a Material Announcement of February 28, 2013.

For the business years 2014, 2015, 2016, 2017 and 2018, as stated in the Material Announcement published on February 13, 2014, in view of the enactment of Provisional Measure 627 of November 11, 2013, converted into Law 12973 on May 13, 2014, the Company decided to alter its Dividend Policy, in that it no longer made a separate allocation of amounts arising from tax incentives for the purposes of inclusion in the basis for calculation of dividends – as it had previously being doing – and adopted the policy of distributing as dividends the totality of the amounts of Profit that do not originate from tax incentive arrangements (after constitution of the Legal Reserve and the Reserve under the By-laws). (There is no longer a pre-determined value for payout.). Grendene maintains the policy of quarterly distribution of dividends.

Additionally, the Company has a Stock Purchase Options Grant Plan (‘the Stock Options Plan’). This was instituted, and its Regulations were approved, by the Extraordinary General Meeting of Shareholders on April 14, 2008. To enable the participants of the plan to exercise their options, the Company acquires its own shares in the market and subsequently delivers them to the participants at the exercise price. For this specific purpose, the Company has constituted a Profit reserve comprising amounts approved based on the capital budget by the Board of Directors and by the Annual (Ordinary) General Meeting of Shareholders.

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4.1 – Description of the risk factors Grendene is a company of large scale in its market – development, manufacture and sale of footwear – and is among the largest footwear companies in the world, manufacturing approximately 1% of world footwear consumption, and 19% of Brazilian footwear consumption. It operates in all the states of Brazil, where it is present in approximately 65,000 points of sale, and it exports to more than 100 countries. In 2017 Grendene’s products were sold to 126 million consumers in Brazil and 45 million consumers in the various countries to which we export. Thus, the majority of the risks that we face are of a macroeconomic nature, linked to the general level of economic activity, and particularly the performance of the consumer goods sector; and we have limited capacity for protection in relation to these risks. Our business, our financial situation and the results of our operation might be adversely and significantly affected by any of the risks set out here, and also as a result of other risks that we are not at present able to foresee. The market price of the shares of Grendene might fall due to any one of these risks, and there is the possibility of loss of part or all of the capital invested in it. Additional risks, which are at present unknown or insignificant, might also have an adverse effect on our business and on investment in our shares. a) Factors relating to the Issuer: We may be unsuccessful in implementing our growth strategy. In the domestic market, our principal area of activity, we already have a significant market share, while at the same time we face strong competitors who make it difficult to win an even larger share of the total of footwear consumed in the country. Further, the growth of the population is small (below 1% p.a.), and growth of consumption in the future is in our view likely to be associated with higher average disposable income of the consumer. In the international market, we face intense competition, various effects on the exchange rate between the currencies of the countries where competing manufacturers are located and the currencies where the largest markets are located, and customs or non-tariff barriers imposed by countries to protect their local consumer markets against suppliers located in other countries. As part of our growth strategy, we seek to position our own brands, expand our sales in the local and international markets and increase our operational performance, including by means of obtaining further, new, tax-incentive advantages. We intend to maintain our strategy of growth, with the use of marketing actions and promotion efforts, continuous launches of new products, growth of our sales in the domestic market, and expansion of our production and exports. There is the possibility that we might not be capable of satisfactorily implementing our growth strategies, including as a result of tariff and/or non-tariff barriers in the countries to which we export our products. If we fail to implement them, our rate of growth might diminish, or our operational result might be reduced, which could have an adverse effect for Grendene. We may be unsuccessful in managing our growth. Our future performance will depend on our capacity to manage the growth of our domestic and international operations, through identification of fashion trends and launch of desirable products at accessible cost, jointly with the improvement in our systems of financial and operational controls, our infrastructure and our information system, and also the contracting of qualified marketing, design and production personnel, and increase of our productive capacity. We cannot guarantee that our capacity to manage our growth will be successful or that it will not adversely interfere in the existing structure. If we are not able to manage our growth in a satisfactory manner, there is a possibility that we could lose market share, which could have an adverse effect for Grendene. Our sales and profitability might be adversely affected if our investments in advertising and marketing, including our licensings, do not produce the intended effects for acceptance and consumption of our products. Considering that our consumers' demand for footwear is highly influenced by the image of our brands, our businesses need substantial investments in advertising and marketing, including the licensing of brands and names of Brazilian and international celebrities and children’s media personalities known domestically and internationally. If such investments do not achieve the effects that we intend for them in terms of increasing the acceptance and consumption of our products, or, further, if we are not capable of maintaining and contracting our licensings, there is the possibility of our sales and profitability being adversely affected. If strategic people leave the company or we lose their services this could adversely affect our business. Our performance depends, to a great extent, on efforts and the skills of the principle executives, who occupy strategic position in our structure and orient various aspects of the conduct of our business. The loss of their services, or the death of any one of these executives, could have an adverse effect for Grendene. Our success in future growth depend, also, on our skill in identifying, attracting and maintaining on our staff other qualified employees and managers. The market in which we work is competitive, and we cannot guarantee that we will be successful in attracting and maintaining such employees and managers. If our brands are used by our competitors without authorization, or if we are prevented from using our brands, there would be a possibility of our profits being adversely affected. Our brands and the design of our products are constantly subject to undue use and violation of our intellectual property rights by third parties. There are falsified products, and products that infringe our intellectual property rights, in the markets in which we operate and in other markets. We are not always successful, especially in other countries, at combating falsification of our products and the infringement of our intellectual property rights. Falsification of our products, and the undue use of our brands, not only can

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4.1 – Description of the risk factors cause adverse effects for our sales, but can also affect the integrity of our own brands as a result of their association with products of lower quality. Also, although we have registry for the great majority of our brands and patents, we cannot guarantee that in the future our competitors may not allege that we are violating their intellectual property rights. In this were to happen, and if as a result we are prevented from manufacturing a given product or using a given brand, this could have an adverse effect for Grendene. Disconnection or loss of services of systems may adversely affect our business. To operate efficiently the Company depends on its information technology and telecommunication systems, and any malfunctioning or loss of full operation of these systems, even temporarily, could negatively affect our business. The systems of the Company and its subsidiary companies are all digital. To prevent problems we maintain a contingency plan which provides for recovery of the whole of the database and resumption of normal operation within a period of less than 48 hours (disaster recovery). The basis of the operation of the Company is grounded on continuity of computing processes, and this is achieved using services that work in parallel, with auto-restart capacity, making it possible to avoid critical stoppages with recovery times that could impact the business. The database is replicated in real time, updated in two separate installations, located in separate physical environments, using communication in fiber networks independent from the conventional network of departments and users. All environments have been put in place and operate with ‘active-active’ resilience (two active environments in parallel), with the concepts of high availability and virtualization. The whole of the data communication network between the units is redundant. It is served by two operators, who are required to prove that the physical communication pathways do not cross or interlink. The communication networks also function on the ‘active-active’ principle, having traffic priority in the event of a stoppage occurring. The internal network in each locality is also redundant, with ring fiber links, guaranteeing high availability and performance, with automatic selection of the best route. The principal computing assets – software, hardware or telecoms – are monitored in real time, ensuring anticipation of problems, and independence from any requirement for us to be advised about problems. Preventive and pre-emptive maintenance is carried out in accordance with a pre-established calendar and monitored, separately from the normal flow of IT maintenance activities. In spite of these precautions, there may in rare and exceptional cases occur situations in which we are unable to restore services at the speed and with the quality established for an efficient operation of our activities. Our operations might be adversely affected by problems in our manufacturing plants, facilities or means of transport. Grendene develops a large quantity of new products basically through its own design team located in the municipality of Farroupilha in Rio Grande do Sul, and for this it uses advanced computerized systems and collaboration tools. The molds for the injection of the footwear are manufactured in the municipality of Carlos Barbosa in Rio Grande do Sul and from there are sent to our various manufacturing plants located in the municipalities of Fortaleza, Sobral and Crato in the state of Ceará and Teixeira de Freitas in Bahia. The raw materials are acquired by a team also located in the municipality of Farroupilha in Rio Grande do Sul, and delivered directly at our manufacturing plants by independent transport companies. Once the products have been manufactured they are dispatched to consumption centers all over Brazil, but with a significant volume concentrated in the Brazilian Southeast. Inside Brazil, products ready for use, and raw materials, are transported by highway. Exports and imports of raw materials are transported by sea freight, principally through the port of Pecém in the state of Ceará. Adverse events such as fires or other accidents could cause damages to facilities and inventories, interrupting production and distribution of products. Shortages of energy, water or fuel in the public service concession holders and the distributors, and also strikes, pickets and logistics blockages, could also adversely affect the manufacture of products. For all the possible types of adverse event, the Company has insurances contracted and/or contingency plans that minimize the risks referred to. Even so, we cannot be sure that in the future there will be no adverse that might cause stoppage of a manufacturing plant or a means of transport, preventing receipt of raw material and/or dispatch of products to our clients. We have entitlements to federal and state tax benefits, and any cancellation or non-renewal of such benefits could adversely affect our profits. The footwear industry worldwide enjoys various tax incentives and government stimuli which are important for companies’ capacity to compete efficaciously and for their decisions of location of manufacturing plants. These incentives also exist in Brazil, especially for plants located in the Northeastern Region, where the majority of Brazilian manufacturers are located. According to our strategy, we manufacture 100% of our products in Brazil in states of the Northeastern Region, and since the end of the 1990s the company has been the recipient of tax incentives from individual states. Today eleven (11) of its manufacturing units benefit from tax incentive arrangements granted by the states of Ceará (10 plants) and Bahia (one plant). We are holders of federal and state-level tax benefits that give us exemption from or reduction of income tax, and also restitution of part of the amount that we have paid to the State of Ceará as ICMS tax; and we also have presumed credits of ICMS in the state of Bahia and also credits on the export value of our products. All these plants are in the Northeast of Brazil, benefiting from incentives given by the Northeastern Region Development Authority (Sudene). These incentives are given by the federal government and the state governments, and consist of the transfer of funds as matching contributions for the Company’s investments in construction, installation and modernization of new industrial units in

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4.1 – Description of the risk factors the state or region concerned. These incentives are granted only after the Company has proven realization of the investments specified in projects approved by the respective governments, in accordance with the laws that authorize the respective governments to give subsidies for realization of such investments. Even though these are tax incentives given as a result of complying with certain conditions and certain time periods - which, under Brazilian legislation, may not be unilaterally suppressed by the granting governments before completion of the period of the concession – there is the possibility that the Company might suffer the suspension, or even cancellation, of a right or of receipt of a benefit, if the company becomes non-compliant with certain requirements that must be obeyed during their period of fruition, such as: (i) use of the incentive funds in the implementation or modernization that is the subject of the investment; (ii) keeping its operations compliant with all fiscal requirements, especially paying the taxes without arrears; and (iii) annual presentation of certain documents and reports to the competent authorities. Non-compliance with such obligations could result in suspension or cancellation of such tax incentives, and could even oblige the Company and its subsidiaries to pay back the amounts of the incentives received, plus charges, which could have a material adverse effect for the Company. The Tax benefits at the state level, from the state of Ceará, also offer a financing mechanism. Granting of these financings depends on there being a balance in the Industrial Development Fund (FDI) of Ceará. We cannot guarantee that the FDI will have funds available to be passed through to us. In the event of there being no balance of funds in the FDI, this could have an adverse effect for Grendene. Additionally, we cannot guarantee that the procedure at present adopted by the Company in working with Bradesco S.A. in relation to the payment of the ICMS tax will be maintained in the future, nor that, in the event that it is altered, a procedure will be adopted that includes conditions that are favorable to the Company. On September 1, 2016, Ceará State Decree 32,013 of August 16, 2016 came into force, instituting the Ceará State Fiscal Balance Fund (FEEF), to be in effect for 2 years. This fund will comprise deposits paid by companies that benefit under tax breaks in ICMS tax granted by the State of Ceará in the past or in the future. In counterpart, the tax incentives will be extended for twice the length of time for which this contribution continues to be given. Companies holding these grants have to deposit, in the FEEF, 10% of the amount of the benefit used in each ICMS tax period. There is an exception: if in any month the amount of ICMS tax due has increased by 10% year-on-year, the taxpayer is exempt from making the FEEF deposit. Specifically, this contribution means a reduction of incentives affecting negatively the Company's results Further, we cannot guarantee that the state-level tax benefits will be maintained in practice up to the end of their periods, nor, in the case of state and federal tax benefits, that we will be able to renew them, on favorable terms, after expiry of their present period, nor to obtain new tax benefits when the periods of present benefits come to an end. If the state tax benefits that we hold are challenged in the courts by third parties, for example the Public Attorneys’ Office, or other States, or future governors or other empowered officials of the State of Ceará, and the decision in the courts is unfavorable to us, there is the possibility that we might have the tax benefits cancelled and/or we might even be charged the amount that is the subject of the exemption, reduction and/or financing granted up to the date of such decision (subject to the periods of expiry by limitation of time, etc.), depending on the individual case, which could have an adverse effect for Grendene. There are draft laws before the Brazilian Congress which seek to carry out a wide-ranging reform of the tax system in Brazil. In these draft laws there are proposals for total abolition of tax incentives given by individual states, even if they preserve the incentives currently given up to the end of their period of validity. If such projects are transformed into a change in the Brazilian Constitution or the tax laws, the opportunities for obtaining new state-level tax incentive benefits will disappear, at least in the form of those currently enjoyed by the Company. In this eventuality, there is the possibility of our cash flow suffering a material adverse effect. Further, we cannot guarantee that the tax changes that are approved in such a reform will not be unfavorable to the Company’s business, nor that the proposals for maintaining the tax incentives currently granted up to the end of the period of their current grant will be incorporated into the legislation, nor that the proposals for reduction of the inter-state tax rates will be adopted in accordance with the proposals that are being debated. There is the possibility that all or any of these proposals and draft laws that are currently in discussion in Congress may be altered before they are transformed into Law and may become unfavorable to Grendene’s business. The prices of our raw materials are volatile and an unexpected sharp change in the prices of our raw materials could have an adverse effect. Our principal raw materials are PVC resin and plastifying oils. These raw materials are regarded as commodities, and their prices when sold in Brazil are fixed on the basis of international market prices and in accordance with variations in supply and demand. Historically, the international markets for petrochemical products have alternately undergone periods of limited supply, causing increase in prices, and expansion in production capacity, resulting in excess of supply and reduction of prices. We do not have and will not have control over the factors that affect the variations in the prices of the commodities referred to, and sharp and unexpected variations in the prices of the commodities and in the price of pulp, and also variations in supply and demand in those products, may have a direct impact on the prices of our raw materials and inputs, and could have an adverse effect for Grendene. b) Factors relating to the direct or indirect controlling stockholder or controlling group:

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4.1 – Description of the risk factors We continue to be controlled by the controlling stockholder, and there is always the possibility that his interests might differ from those of the other stockholders. The controlling stockholders hold, directly or indirectly, shares representing an aggregate of approximately 72% of the Company’s voting stock. The other shares directly or indirectly held by the stockholders Alexandre G. Bartelle Participações S.A. subject to a stockholders’ agreement dated October 6, 2004, and amendments. For as long as our stockholder Alexandre Grendene Bartelle controls the company, directly or indirectly, he will have the right, without the consent of the other stockholders being necessary, to:

elect the majority of our Board of Directors and dismiss members of the Board;

control our management and our policies;

determine the outcome of the major part of our corporate operations and transactions, and other matters submitted to the stockholders' consideration, including mergers, consolidations and the sale of all or a substantial part of our assets; and/or

decide policies for distribution of dividends, subject to the minimum obligatory dividend specified by law. The interests of the stockholder Alexandre Grendene Bartelle could differ from the interests of the other stockholders of the Company. c) Factors relating to the stockholders: We cannot guarantee the existence of an active and liquid market for our Shares, and there may be limitations on the possibility of sale and purchase of our Shares. Our free float is 28%, and we are classified as a mid-cap company, with market value of approximately R$ 8.6 billion in 2017. We cannot predict to what extent an adverse situation in the Brazilian and international markets, with possible capital flight from the Brazilian equities market, might affect the liquidity of our shares in the future, nor to what extent such a factor might cause a fall in the value of our shares. To minimize this risk, Grendene maintains a very active program of Investor Relations which, among other actions, includes holding 'non-deal roadshows' with local and international investors for the purpose of keeping them well informed about the sector in which the Company operates and, in the case of international investors, about the Brazilian economic context. Also to mitigate this risk, Grendene contracted BTG Corretora to act as market maker for its shares.

R$ 2015 2016 2017

Average daily total volume (ADTV) 5,355,928 4,879,099 8,952,660

The sale of a significant number of our shares by the controlling stockholders would have the possibility of adversely affecting their price. If there were a sale by our stockholders of a significant quantity of shares, or the perception that this might be about to happen, the market price of our shares could be adversely affected. d) Factors relating to the Company’s subsidiaries and affiliated companies: The subsidiaries and affiliated companies operate in the same sector (Consumption: Footwear), and are thus subject to the same risks as Grendene. Note, however, that their operations are very small in relation to the size of Grendene. e) Factors relating to the Company’s suppliers: Our supply chain is made up of various Brazilian and international suppliers of raw materials and other merchandise, importantly including machines and equipment used in our production lines. In general we concentrate our supply in few suppliers for each type of raw material, (i) aiming to increase our significance as a proportion of the supplier's total revenue, thus achieving competitive prices, and (ii) to obtain products and materials developed tailor-made with specific characteristics. In view of the fact that our principal raw materials are considered to be commodities produced in various regions of the world, we believe that although our supply would be adversely affected in the event of an interruption in one of our local suppliers we would be able to mitigate these effects by having recourse to international supply. Grendene has sufficient scale and experience to adopt this solution. f) Factors in relation to the Company’s clients: Default by clients, or non-receipt by the Company, could have a negative effect on the Company’s revenues. This risk arises from the possibility of the Company not receiving amounts arising from sales operations. To attenuate this risk the Company adopts the practice of detailed analysis of the equity and financial situation of its clients, establishment of a credit limit and permanent monitoring debtor balances. There are no clients which individually represent more than 5% of the total of accounts receivable from clients, or of the Company’s revenues. Deficient performance by commercial representatives could have a negative effect on our sales All the sales made in Brazil are made through commercial representatives, including the sales made to large retail chains and specialized stores. We maintain strictly commercial relations with our representatives, who are legal entities whose sales people

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4.1 – Description of the risk factors are not our employees. They operate in specific areas, set by contract, and for the provision of such services they receive commissions based on the total of sales made in their area of operation. Our commercial representatives are not subject to control of time of work during the day, and pay all the costs inherent to their activities. These representatives play a fundamental role in our process of sales, and deficient operation by them could adversely affect our revenues. When there is a need to replace them due to unsatisfactory performance, there is the possibility of litigation taking place that could generate costs for Grendene. In the external market, the sales of our products are made through subsidiaries in the United States, the United Kingdom and Italy, which act as agents or as distributors of our products, depending on the case. In the other countries, usually the sale of our products is made through distributors. In this case, also, when there is a need to replace them due to unsatisfactory performance, litigation and demands for indemnity could occur, that might generate costs for Grendene. The Company is subject to complaints from consumers and to recall of products, which could negatively affect its image, and also could have a material impact on its costs, business, and profits, resulting in an adverse effect for the Company. The Company and its Subsidiaries produce and sell consumer goods, and this makes them subject to the Brazilian Consumer Law. If the Company or its Subsidiaries is held liable in any litigation for civil liability related to its products, or if it should in the future make any recall of its products, this could have a negative impact on the profitability for a period, depending on: (i) the volume of the product in the market; (ii) the reaction of competitors; and (iii) the reaction of its consumers, and there could be significant resulting costs of recall, explanations in the media and with lawyers, and possible payments of indemnities. Even if they are not made liable in a court action, the negative publicity that could take place and be generated in relation to their products and their quality could adversely affect their reputation with present and future consumers, and also their corporate image and that of their brands, which could lead to an adverse effect for the Company, its business, and profitability. g) Risk factors relating to the sectors of the economy in which the issue operates: The footwear industry is sensitive to fall in purchasing power of consumers, and adverse economic cycles. If economic conditions in Brazil and in the other countries that import our products deteriorate, there is the possibility that many of our clients might significantly reduce their purchases and not be able to pay in a timely manner for the products that they acquire. Historically, the footwear market has been subject to cyclical variations and fall in performance when there is a reduction in consumers’ spending. Many factors affect the level of our consumers’ spending in the footwear market, including:

General business conditions;

Interest rates;

Consumer's income, and to a lesser extent the availability of consumer credit;

Taxes; and

consumers’ confidence in future economic conditions. There is the possibility that the purchase of our products might suffer a reduction during periods of recession, and in other circumstances in which the consumer’s income is for any reason lower. Adverse economic conditions in the markets in which we operate could reduce our sales and have an adverse effect for Grendene. (See item 4.2 of this form – Variations in our activities and results vs. indicators of inflation, exchange rate variation and economic growth.) The footwear industry is highly competitive, and there is the possibility that we might lose our position in the market in certain circumstances. The footwear industry is highly competitive and has low entry barriers for new competitors. The principal factors that influence competition in this industry include price, the quality of the product, the design of the product, the image and the prestige of the brand, and the capacity to serve clients in good time. We compete with various Brazilian and international competitors, some of them having access to significant financial resources, and whose brands are recognized by consumers. If one of our competitors achieves a great success in marketing, or a major promotional campaign or a major technological innovation, this could negatively affect our market position. We are unable to guarantee that in such a circumstance we will be capable of reacting in time, and satisfactorily, or that the pressures generated by the competition will not have an adverse effect for Grendene. Unforeseen alterations in consumers’ preferences, which are customary in the footwear industry, might have an adverse effect for Grendene. The footwear industry is subject to rapid alterations in the preferences of our consumers. Consumers’ demand for our products is significantly influenced by the image of the brands, consumers’ receptivity, and, on occasion, by climatic conditions. Our initiatives to strengthen our brands, which include carrying out of market research, launches of new and innovative products, our partners for licensings, use of accessories and active planning of marketing might be unsuccessful. Also we cannot guarantee that consumers will continue to have good receptivity towards our products or that we will respond rapidly enough to the changes in consumer

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4.1 – Description of the risk factors preferences. If we are unsuccessful in introducing products into the market that have good acceptance among consumers, our sales could diminish, which would have an adverse effect for Grendene. Grendene has operated for more than 40 years in the footwear sector and has demonstrated wide experience in the successive launch of successful products and brands. However, occasionally one or other collection of products is not successful, because we have no way of precisely foreseeing consumers' taste, whether the fashion trends that we incorporate into our products will be winners with clients, the economic conditions that will prevail when the new products arrive on the market, and what products the competitors will launch to dispute the same clients that our products seek to serve. When our collections of a given season of the year do not perform well in relation to the competitors Grendene's results are negatively affected. Inflation and the actions of the government to combat it may also contribute significantly to economic uncertainty in Brazil and negatively affect the Company's business. Brazil has in the past gone through periods of high inflation. Since the Real Plan was put in place in 1994, annual inflation, as measured by the Amplified National Consumer Price Index (Índice Nacional de Preços ao Consumidor Amplo, or IPCA), has fallen significantly. If Brazil were to suffer high levels of inflation again, the country's rate of economic growth could fall, which would lead to lower demand for the Company's products in Brazil. Probably, inflation would also increase some of the Company's costs and expenses, especially those of labor, linked to the adjustment in the minimum wage, and there is the possibility that it might not be possible to pass these through to consumers, resulting in reduction of our profit margins and net revenue. Further, high inflation reduces consumer's available income for discretionary consumption, negatively affecting the demand for footwear, and usually leads to higher domestic interest rates, which could further reduce that revenue of the consumer in the present context of higher total indebtedness of the Brazilian population. Inflation can also reduce investors' interest in the capital markets, which could reduce the price of shares in general, including those of Grendene. Inflationary pressures can also lead to the adoption of government policies to combat inflation, with possible adverse effects for the Company's business. (Quantitative aspects of these risks are described in item 4.2 of this form.) Variations in the exchange rate between the US dollar and the Brazilian currency could reduce Grendene's export capacity. Grendene's operational results are impacted by variations between the Real and the US dollar: They are benefited when the Real depreciates against the US dollar and are harmed when the Real appreciates against the dollar. Basically appreciation of the Real against the dollar reduces the competitiveness of our products in international markets and reduces our margins on exports. In recent years, approximately 24% of our revenues have come from exports. h) Factors relating to regulation of the sectors in which the Issuer operates: Changes in environmental laws and regulations could have an adverse effect on the business of the footwear industry. The companies of the footwear industry, including Grendene, are subject to a rigorous environmental legislation in the federal, state and municipal spheres in relation, among other factors, to the elimination of solid wastes and disposal of liquid, industrial and sanitary effluents. Companies in these industries need authorizations from government agencies for some of their activities. In the event of violation of or non-compliance with such laws, regulations, licenses or authorizations, industrial companies can be subject to administrative sanctions, such as penalties or repeal of authorizations, or they (including their senior managers) may be subject to criminal sanctions. They may, also, be obliged to pay substantial costs of environmental correction. The governmental agencies or other authorities may also issue new more rigorous rules or seek more restrictive interpretations of the existing laws and regulations, and such developments could oblige industrial companies in the footwear sector, including the Company, to make additional expenditure on environmental adaptation. Any action of this type by the governmental agencies could negatively affect the business of the footwear industry, and have an adverse effect for Grendene. We could be adversely affected: (i) if any applications for renewal of environmental licenses are made out of time; or (ii) by absence of insurance for coverage of environmental damage. All our operations are characterized as having average pollution potential, under Conama Resolution 237/1997 and Law 10,165 of December 27, 2000. However, our industrial plants are required to obtain and maintain environmental licenses, to operate. Failure to obtain these licenses or to keep them updated could subject us to administrative penalties and in extreme cases could even result in our activities being stopped if we do not cure any deficiencies indicated by the regulatory bodies. Since, in management’s assessment, the industrial processes of Grendene’s units have environmental aspects of low risk – the most significant aspects have the necessary operational controls, and the raw material is 100% recyclable (PVC offcuts are re-used in their entirety in the productive process) – and since all the manufacturing units have processes for control of emission of effluents and emissions into the atmosphere and reduction of solid wastes, we do not contract insurance for coverage of environmental damages that might be caused by the operation of each one of our industrial plants. In the event of claim events involving environmental damage, there is the possibility we might be obliged to make substantial expenditure to apply corrective

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4.1 – Description of the risk factors environmental measures, and also suffer penalties in the administrative and judicial sphere, which could have an adverse effect for Grendene. List of licenses maintained:

Unit Number of license or certificate Issuing body Type of license or certificate Valid until

Fortaleza, CE Operational License (LO) Nº 183/2018 Semace, CE Environmental Operational License Apr. 19, 2022

Fortaleza, CE Federal Technical Certificate – Registry Nº 339782 Ibama Ibama Compliance Certificate Jul. 27, 2018

Sobral, CE Operational License (LO) Nº 295/2016 Semace, CE Environmental Operational License May 11, 2018*

Sobral, CE Federal Technical Certificate – Registry Nº 69684 Ibama Ibama Compliance Certificate Jul. 24 2018

Crato, CE Operational License (LO) Nº 024/2017 Semadt, CE Environmental Operational License Dec. 28, 2018

Crato, CE Federal Technical Certificate – Registry Nº 339795 Ibama Ibama Compliance Certificate Jun. 06, 2018

Farroupilha, RS Operational License (LO) Nº 08139 / 2016-DL Fepam, RS Environmental Operational License Nov. 22, 2020

Farroupilha, RS Federal Technical Certificate – Registry Nº 71447 Ibama Ibama Compliance Certificate Jul. 31, 2018

Teixeira de Freitas, BA Operational License (LO) Nº 5992/2013 Inema, BA Environmental Operational License Sep. 26, 2018

Teixeira de Freitas, BA Federal Technical Certificate – Registry Nº 2455989 Ibama Ibama Compliance Certificate Jun. 12, 2018

* The process of renewal of the Sobral Operating License was initiated on Jan. 10, 2018, 121 days before the expiration of LO nº 295/2016, in accordance with Article 8 of COEMA Resolution n°4 of April 12, 2012. The aforementioned Resolution extends the validity period of LO nº 295/2016 until a new operating license is issued by SEMACE.

Changes in the tax laws could adversely affect the business of the footwear industry. All our products are manufactured in Brazil in our plants located in the Northeast, mainly in the state of Ceará. In Brazil we maintain approximately 20,000 employees, and we are thus subject to Brazilian employment legislation, which is complex. This region has serious climatic problems that make primary activity difficult, which has, historically, caused major social problems. To reduce these problems the federal government and the governments of the states have tax incentive policies to encourage industrialization of the region and Grendene fulfills the requirements for receiving these incentives, which are important for its profit. A large portion of our revenue (approximately 76%) is from the Brazilian market, and is thus subject to the Brazilian tax legislation, which is no less complex; and finally, the greater part of the consumption of footwear in Brazil takes place in the Southeast region (broadly centered on Rio de Janeiro, São Paulo and Minas Gerais), and the products shipped to other states (different states from those where the products are manufactured) are subject to legislations that regulate inter-state taxation. Changes in the rules and legislation governing tax, employment relationships, social security and tax incentives could negatively affect demand, and the costs in the footwear sector, and those of Grendene's business. i) Factors relating to the foreign countries where the Issuer operates: Restrictive measures imposed by importer countries to reduce trade in footwear could affect the Company's business, increasing the cost of its products or reducing its capacity for exportation. The Company is a producer of footwear that supplies the Brazilian domestic market and various foreign markets. The Company's exports face the competition of other footwear producers and the restrictions imposed by importing countries in the form of quotas, taxes on merchandise, tariffs or increases in import taxes. Any one of these factors could increase the costs of the products and make them less competitive or prevent the Company from selling them in those markets. There is no guarantee that the importer countries will not impose quotas, taxes on merchandise, or tariffs, not that they will not increase import taxes. Grendene maintains the leading position in the exports of Brazilian footwear for the 15th year running – 35.4% of Brazilian footwear exports (in terms of number of pairs) in 2017 (31.8% in 2016 and 37.0% in 2015), and its products are sold in more than 100 countries in the five continents. Any material change in the political/economic environment of one of those countries, or of the region where they are located, could affect sales in those locations.

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4.2 – Description of the principal market risks In the normal course of our business, we are exposed to various general risks that inherent to our activities, which can influence our operational results, our financial situation or our future outlook, since changes in the economic situation of Brazil, such as fiscal, exchange rate, monetary or other policies, adopted by the present or future federal government administrations, could adversely affect our activities through, for example, economic slowdown, increase in interest rates, increase of inflation and increase of risk perception in other countries. The business model adopted by Grendene envisages operation in markets affected by fashion where the Company, as a competitive differential, regularly presents a large quantity of new models for each period. Each model offered by the Company is part of a collection the average life of which is approximately 90 to 180 days. Thus, each quarter, Grendene presents new collections, proposing to the market a new basis for prices (for each new collection), which mitigates the effect of inflation. In this business model, any alterations of costs are passed through to the final prices whenever the demand for these products and consumers’ purchasing power permits. Thus, inflation affects our result, affecting the income that the consumer has available for consumption of our products. Our principal inputs are commodities the prices of which are expressed in United States dollars in the international market. The exchange rate influences our costs to the extent that it affects the prices of these commodities in Reais, when their prices are converted into Reais. However, this is not a linear relationship, since the price of commodities in dollars itself varies in accordance with supply and demand in the international market (when the Real appreciates, the price of commodities in Reais is cheaper, but in these cases there is also usually a variation in the prices of commodities in dollars compensating a part of this effect). At the same time, the exchange rate affects our exports, since the great majority of our costs are in Reais. Interest rates do not directly affect the Company’s operational result, only the final value of Financial Revenue (expenses). The Company maintains a significant balance in cash and cash equivalents and cash investments (short-term and long-term), which on December 31, 2017 was R$ 1.780,6 billion. These funds are basically invested in the financial market, yielding interest at close to the Selic rate. Any variations in interest rate practiced in the market will affect the remuneration of these funds. This table gives the variations for a list of items:

Year-on-year change 2015 2016 2017

Change in Net sales revenue, % (1.4%) (7.1%) 10.1%

Change in operational profit (Ebit), % 13.7% (12.1%) 16.5%

Change in Net profit, % 22.1% 5.2% 4.2%

Change in average price per pair in the domestic market 3.8% 7.2% 4.8%

Change in average price (in Reais) per pair in export market 29.5% (3.6%) 5.5%

Change in average price (in USD) per pair in export market (8.4%) (8.2%) (4.3%)

Change in average price per pair (in Reais) – all sales 9.9% 4.1% 4.9%

Change in average COGS (in Reais) – all sales 6.8% 1.9% 4.7%

Exchange variation (end-of-period rates – December 31) 47.0% (16.5%) 1.5%

Exchange variation (average rate for the year) 41.5% 4.8% (8.5%)

IGP-M inflation index 10.5% 7.2% 0.5%

IPCA inflation index 10.7% 6.3% 2.9%

Real GDP growth (Brazil) (3.5%) (3.5%) 1.0%

Non GDP growth (Brazil) 3.8% 4.4% 4.8%

Total number of pairs sold (thousands) 180,400 163,557 171,346

Change in total number of pairs sold (12.0%) (9.3%) 4.8%

Number of pairs sold in domestic market 134,474 123,595 126,375

Change of number of pairs sold in domestic market (12.0%) (8.1%) 2.2%

Number of pairs exported 45,926 39,962 44,971

Change in number of pairs exported (12.0%) (13.0%) 12,5%

Sources: Brazilian Central Bank, FGV, IBGE, Grendene.

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4.2 – Description of the principal market risks Financial instruments The principal financial instruments are: Cash and cash equivalents: These are classified in the category ‘Loans and receivables’ and are presented at their market value, which is equivalent to their book value on the reporting date. Cash investments: These include the categories: ‘Investments held to maturity’ - which are measured at amortized cost by the effective interest method; and ‘Financial assets at fair value through profit or loss’ - which are measured at their fair value. Loans and financings: These are classified in the category ‘Financial liabilities measured at amortized cost’ by the effective interest method, and accounted for at their contractual values. The market values of these loans and financings are close to their book value on the reporting date. On December 31, 2015, 2016, and 2017, the values of the principal financial instruments of the Company and its subsidiaries were as follows:

R$ '000 Valuation (Book value, Fair value)

2015 2016 2017

Financial assets

Cash and cash equivalents 21,285 20,663 30,119

Cash investments (*) 1,260,595 1,568,715 1,750,526

Derivatives - 2,586 407

Financial liabilities

Loans and financings 212,825 125,372 123,627

Derivatives 4,142 -

(*) The Company measures its financial instruments at fair value through profit or loss, as required by Technical Pronouncement CPC 40–R1 (IFRS 7) – Financial instruments: Disclosures, as items of Level 1 in the Fair Value Hierarchy (Quoted prices – Unadjusted – In active markets for identical assets or liabilities).

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4.2 – Description of the principal market risks

Derivative financial instruments

The Company and its subsidiaries maintain transactions in the following derivative instruments: Transactions with derivative foreign exchange instruments Sell or buy positions of USD contracts on the BM&F. This table shows the positions at December 31, 2015, 2016 and 2017, with the nominal and market values.

Item Reference value (notional) – US$ Reference value – R$ Balance receivable (payable)

2015 2016 2017 2015 2016 2017 2015 2016 2017

Futures contracts:

Sell commitment 54,000 73,500 64,500 216,128 240,947 213,864 (4,142) 2,586 407

The objective of the strategy of contracting these transactions is protection of the Company’s sales revenue and financial assets, and those of its subsidiaries that are subject to exchange rate exposure. These instruments are used for the specific purposes of protection, and their portfolio consists of future sales of US Dollars, through financial instrument for the purpose, such as: sale contracts on the BM&F and ACEs (Advances on Delivered Shipping Documents). In the sales transactions on the BM&F the impact on the cash flow of the Company and its subsidiaries occurs through the adjustments for the value of the US dollar exchange rate up to the date of settlement of the contracts. Sensitivity analysis for variations in interest rates To ascertain the sensitivity of the indexors of the cash investments and loans to which the Company had exposure on base-date December 31, 2017, three different scenarios were defined, and a sensitivity analysis to variations in the indicators of these instruments was prepared. Based on the projection of the indexor of each contract for the year 2017 (‘probable’ scenario), the results of decreasing variations of 25% and 50% were calculated for financial investments – and of increasing variations of 25% and 50%, respectively, for loans. The scenarios were prepared leaving out of account the probable flow of cash in payments of loans and redemption of investments. The yields arising from the financial investments, and the financial expenses arising from the loans and financings of the Company, are affected by variations in interest rates, such as the TJLP, and indexors such as the IPCA, IGP-M and the CDI. The table below shows the open positions on December 31, 2017, with nominal values and interest of each instrument contracted: DETERMINATION OF FINANCE INCOME INCREASE IN FINANCIAL EXPENSES

References for financial revenues Interest on financial

investments

References for financial liabilities

Rates charged on Proapi and Provin financings

CDI rate IPCA index TJLP rate

Probable scenario (Book value) 6.99% 2.80% 60,979 7.00% 180 Possible scenario – 25% 5.24% 2.10% 49,820 8.75% 225 Remote scenario – 50% 3.49% 1.40% 38,591 10.50% 270

This table shows the impact on each projected scenario, for a position with maturity on January 31, 2018.

Reference values Sell position in US$ FX rate – R$ Value – R$ Impact – R$

Probable scenario (Book value) 64,500 3.3157 213,864 407 Possible scenario – 25% 64,500 4.1447 267,333 (53,469) Remote scenario – 50% 64,500 4.9736 320,797 (106,933)

We observe that the objective of these transactions is to hedge assets, and that this sensitivity analysis has the objective of showing only the effect on the variations of the exchange rate on the derivatives transactions, and the variations of these transactions shown here are compensated in whole or in part by equivalent variations in the assets that the hedge seeks to protect and the final net effect will be very small.

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4.3 - Material non-confidential legal, administrative or other proceedings

The Company is party to non-secret court, administrative or arbitration proceedings of labor, civil, environmental and tax, arising from the normal course of its activities wich are considered relevant for the businesses of the Company.The contingencies liabilities of a civil, fiscal, environmental and labor nature are subject to provision whenever the loss is assessed as probable. The relevant criteria adopted by Grendene, for disclosure of the processes detailed herein take into account: (i) the opinion of internal and external legal advisors, by analyzing the probability of success or loss in this case, its complexity and positioning of courts (where the loss is assessed as probable or the gain is assessed as practically certain); (ii) the potential impacts of a favorable or unfavorable decision on its equity; (iii) its financial capacity and its businesses, or its subsidiaries; and (iv) the potential risks to the Company and its subsidiaries. The Company has legal actions of an employment-law, tax or civil nature, involving a risk of loss classified by management as 'possible', based on the assessment of its legal advisors, for which no provision has been made. This table shows a breakdown of them with estimated figures:

R$ ’000 Dec. 31, 2015 Dec. 31, 2016 Dec. 31, 2017

Employment-law cases 7,057 7,499 10,120

Tax

PIS and Cofins taxes 672 672 1,050

Social security (INSS) 383 383 891

ICMS tax - -

Civil cases 11,362 9,157 33,280

Environmental cases 500 500 500

Total 19,974 18,211 45,841

(*) The variation comprises two components: (i) R$18,000 for a legal action in progress brought by a commercial representative - the chance of financial loss in which has been reclassified from 'remote' to 'possible'; and (ii) R$6,000, for inclusion of a legal action brought by a commercial distributor.

On December 31, 2017, the Company was a party in the following actions relating to tax:

Case No 0312770-12.2015.8.05.0001

a) Court 27th Civil and Commercial Court of Salvador

b) Instance 3rd instance

c) Date of filing January 01st , 2009

d) Parties in the case Plaintiff: José dos Santos Gomes Barros, JS Comércio e Representações Ltda. and Sun Flower Comércio e Representações Ltda. Defendant: Grendene S.A.

e) Amounts, goods or rights involved

R$ 18,000,000.00 (estimated at December 30, 2016)

f) Principal facts

This is an employment-law complaint which was subsequently re-distributed to the Common Courts on May 7, 2015. The plaintive applies for payment of indemnity for Pain and suffering, Balance of commissions, Restitution of amounts discounted, and Loss of profits. In a first instance decision the judge of the 16th Consumer Relations Court of Salvador rejected the plaintiff's case. On appeal by both parties, the Appeal court of Bahia, in February 2017, partially overturned the judgment, ruling for the plaintiff in part. In May 2017 the Company filed a Special Appeal to the Higher Appeal Court, which accepted Grendene's arguments and ruled partially in favor of the appeal, ordering the case to be returned to the first instance court, for both sides to have a new opportunity for proofs. The plaintiff filed an Internal Appeal against that decision.

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4.3 - Material non-confidential legal, administrative or other proceedings

g) Chances of loss, assessed

Chances of loss assessed as “possible”.

h) Analysis of the effect in the event of losing the case

In the event of the Company losing the action, the impact will be limited to the amount of the action in settlement of the judgement and losers’ fees.

i) Amount provisioned No provision made.

Case No 0038522-27.2014.8.16.0021

a) Court 4th Civil Court of Cascavel, Parana.

b) Instance 1st instance

c) Date of filing December 12, 2014

d) Parties in the case Plaintiff: N.G. Dalzochio & Cia. Ltda. Defendant: Grendene S.A.

e) Amounts, goods or rights involved

R$ 5,241,946.67 on December 12, 2014

f) Principal facts

This is an ordinary action by an autonomous commercial representative, claiming fees for exclusion from a sales territory, and indemnity. Plaintiff seeks rescission with grounds, of the representation contract, by reduction of the area of activity, collection of fees of the area that was withdrawn, and payment of indemnity for the rescission of the contract with grounds. The case is still in the first stage, at the probationary stage.

g) Chances of loss, assessed

Chances of loss assessed as “possible”.

h) Analysis of the effect in the event of losing the case

In the event of the Company losing, the impact will be limited to the amount claimed in the demand and losers’ fees.

i) Amount provisioned No provision has been made.

Case No 2016.14731.9

a) Court ADMINISTRATIVE – Administrative tax litigation with SEFAZ / CE

b) Instance 1st instance

c) Date of filing August 16, 2016

d) Parties in the case Plaintiff: SEFAZ / CE. Defendant: Grendene S/A

e) Amounts, goods or rights involved

R$ 3,510,426.34

f) Principal facts

This is an Administrative Impugnment of the tax infringement notice issued for alleged lack of payment of the ICMS tax. The state entity alleges that the Company used an inappropriate formula for calculating amounts related to the Industrial Development Fund (FDI), reducing the tax payable.The company filed its objection that has not yet been analyzed

g) Chances of loss, assessed

Chances of loss assessed as ‘remote’.

h) Analysis of the effect in the event of losing the case

In the event of the Company losing, the impact would be significant: As well as paying the amounts indicated in the infringement notice, with the additional amounts to be added in accordance with law, the Company would have to change the manner of calculating amounts related to the FDI for the subsequent periods.

i) Amount provisioned No provision has been made.

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4.3 - Material non-confidential legal, administrative or other proceedings

Case No 08700.003818/2015-93

a) Court ADMINISTRATIVE – Economic Defense Council (‘CADE’) (Antitrust Authority)

b) Instance 1st instance

c) Date of filing February 18, 2016

d) Parties in the case Plaintiff: Conselho Administrativo de Defesa Econômica. Defendants: Grendene S/A; Vulcabrás|Azaléia S.A. and Calçados Beira Rio S.A.

e) Amounts, goods or rights involved

R$ - n.a.

f) Principal facts Case considering an act of concentration, referring exclusively to assessment of whether or not there is a need in terms of Law and/or case law in effect at the time, and whether the Brand Licensing Contract signed in October 2014 should be submitted to the antitrust authorities.

g) Chances of loss, assessed

Chance of loss assessed as ‘possible’.

h) Analysis of the effect in the event of losing the case

In the event of the Company losing, there is the possibility of opening an administrative case against the parties, a possibility of declaring the transaction null, and/or a fine of between R$ 60,000 and R$ 60 million, depending on the economic conditions of the persons involved, bad faith, intention to harm and/or antitrust potential of the transaction.

i) Amount provisioned No provision has been made.

Case No 1031445-64.2017.8.26.0053

a) Court 1st Court of Public Finances of the Legal district of São Paulo, São Paulo State

b) Instance 1st instance

c) Date of filing Julho 13, 2017

d) Parties in the case Plaintiff: Grendene S/A. Defendants: PROCON – Fundação de Proteção e Defesa do Consumidor

e) Amounts, goods or rights involved

R$ 8,199,660.00

f) Principal facts This is an action to annul a notice of infringement based on allegation of misleading advertising. An interim judgment was given suspending collection of the amount charged, upon deposit of guarantee insurance by the Company. The case awaits judgment at first instance.

g) Chances of loss, assessed

Chance of loss assessed as ‘possible’.

h) Analysis of the effect in the event of losing the case

If the Company loses the case, the impact will be the updated amount of the Infringement Notice, loser’s fees, and also any negative repercussion of the decision in the media or with consumer protection bodies.

i) Amount provisioned No provision has been made.

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4.3 - Material non-confidential legal, administrative or other proceedings

The Company has also brought the cases set out below, which its legal advisors consider to be significant for the business, and is plaintiff in them:

Case No 0000457-50.2007.4.05.8103

a) Court 18th Federal Court of Sobral, CE

b) Instance 2nd instance

c) Date of filing April 30, 2017

d) Parties in the case Plaintiff: Grendene S.A. / Defendants: Delegate of the Federal Revenue Service in Sobral – CE

e) Amounts, goods or rights involved

R$ 272,000,000.00 (estimated on December 30, 2017)

f) Principal facts

This is an application for mandamus to cancel the demand for payment of contributions of the PIS and Cofins taxes on amounts of the ICMS tax already charged and paid. In March 2017 the Federal Supreme Court gave a decision in Special Appeal 574.706, with the status of General Precedent, declaring inclusion of the amount of ICMS tax within the amount on which the PIS and Cofins taxes are calculated to be unconstitutional. This judgment was published in October 2017, but there is still argument before the Supreme Court on the possibility of a modification of this decision.

The Company is applying to the court for recovery of taxes paid over the period from April 2002 through March 2018, in the approximate amount of R$ 272,000 (the amount may undergo alteration as a result of a motion for clarification by the Procurator of the national tax authority), and, in the assessment of the Company's legal advisers, the chance of winning this action has been assessed as 'probable'.

In the action brought by the Company, there was a judgment in December 2017 under the previous binding precedent of the higher court, partially granting the Company's appeal to remove application of ICMS tax from the amount used for calculation of PIS and Cofins taxes. In February 2018 the federal government filed a motion for clarification, which was rejected in a judgment of April 2018.

No asset will be posted until there is a final judgment on the action brought by the Company against which no further appeal lies, and also a decision by the Supreme Court on any modifications as referred to above.

g) Chances of loss, assessed

Chances of success assessed as ‘possible’.

h) Analysis of the effect in the event of losing the case

Although the Company has been disputing the merit of the case, it has not taken measures to suspend enforceability of the tax, nor has it made any type of provision, and it is continuing to pay the taxes in accordance with the instructions of the Federal Revenue Service currently in force. Thus, loss of this action will have no effect on the Company’s profit.

i) Amount provisioned No provision has been made.

Case No 0001339-70.2011.4.05.8103

a) Court 18th Federal Court of Sobral, CE

b) Instance 3rd instance

c) Date of filing April 28, 2011

d) Parties in the case Plaintiff: Grendene S.A. / Defendant: Delegate of the Federal Revenue Service in Sobral, CE

e) Amounts, goods or rights involved

R$ 15,778,000.00 (estimated when bringing the case)

f) Principal facts

This is an action for mandamus to remove the demandability of payment of the Social Security Contribution on overtime. Judgment was given against Grendene in the first and second instance, and there was a Special, and an Extraordinary Appeal, both admitted. The appeals are currently awaiting a judgment on general precedent.

g) Chances of loss, assessed

Chance of success assessed as ‘possible’.

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4.3 - Material non-confidential legal, administrative or other proceedings

h) Analysis of the effect in the event of losing the case

In the event of the Company losing there will be no effect on its profit, since there has been no interruption of payment of the tax.

i) Amount provisioned No provision has been made.

Case No 0800130-57.2016.4.05.8103

a) Court 18th Federal Court of Sobral, CE

b) Instance 2nd instance

c) Date of filing March 23, 2016

d) Parties in the case Plaintiff: Grendene S.A. / Defendant: Delegate of the Federal Revenue Service in Sobral, CE

e) Amounts, goods or rights involved

R$ 15,264,044.00 (estimated when bringing the case)

f) Principal facts

This is an application for mandamus to recognize the unconstitutionality of the requirement for the PIS

and Cofins taxes on imports being applied to payments of royalties to non-Brazilian entities for licenses to use a brand. In June 2017 judgment was given in Grendene's favor in first instance; no appeal was filed by the federal government; and the case was sent to the Regional Appeal Court of the 5th Region for re-examination. In March 2018 that court confirmed the judgment. The Company will wait until there is no further appeal before calculating the amount involved and starting the claim for qualification for the administrative compensation/offsetting.

g) Chances of loss, assessed

Chance of success assessed as ‘possible’.

h) Analysis of the effect in the event of losing the case

In the event of loss, the Company will have no impact on its profit, since there has not been any interruption in payment of the tax.

i) Amount provisioned No provision has been made.

Case No 0801051-16.2016.4.05.8103

a) Court 18th Federal Court of Sobral, CE

b) Instance 2nd instance

c) Date of filing November 7, 2016

d) Parties in the case Plaintiff: Grendene S.A. / Defendant: Delegate of the Federal Revenue Service in Sobral, CE

e) Amounts, goods or rights involved

R$ 6,743,637.00 (estimated when bringing the case )

f) Principal facts

This is an action for mandamus for non-enforceability of payment of Income tax on remittances outside

Brazil for payment of services where there is an international double taxation treaty. In August 2017, Grendene was awarded judgment in its favor in the first instance, and the federal government filed an appeal. The case awaits judgment by the 5th Region Federal Appeal Court.

g) Chances of loss, assessed

Chance of success assessed as ‘possible’.

h) Analysis of the effect in the event of losing the case

In the event of loss the Company will have no impact on its profit, since there has been no interruption in the payment of the tax.

i) Amount provisioned No provision has been made.

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4.3 - Material non-confidential legal, administrative or other proceedings

Processo nº 0800254-11.2014.4.05.8103

a) Court 18th Federal Court of Sobral, CE

b) Instance 3rd instance

c) Date of filing June 6, 2014

d) Parties in the case Plaintiff: Grendene S.A. / Defandant: Delegado da Secretaria da Receita Federal em Sobral – CE

e) Amounts, goods or rights involved

R$5.515.631,00 (estimated when bringing the case)

f) Principais facts This is an action for mandamus for exclusion of all amounts of ICMS tax from the basis on which the Social Security contribution is calculated – this, by legal definition, is the Company’s ‘gross revenue’. In 2014 judgment was given against Grendene at first instance, and appeal was made to the 5th Region Appeal Court, which overturned the judgment in its entirety. The federal government presented an Extraordinary Appeal, which was not admitted for hearing. In March 2018 a further appeal by the federal government was rejected. It is important to note that in March 2018 the Higher Appeal Court, in judgment on a similar matter in Special Appeal 1568493/RS, recognized taxpayers’ right to exclude amounts of ICMS tax from all calculation of Social Security contributions payable on gross revenue.

g) Chances of loss, assessed

Chance of success assessed as ‘possible’.

h) Analysis of the effect in the event of losing the case

In the event of the Company losing, there will be no effect on its profit, since there has been no change in payment of the Contribution.

i) Amount provisioned No provision has been made.

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4.4 – Non-confidential court, administrative or arbitration proceedings in which the adversary parties are managers, former managers, controlling shareholders, former controlling shareholders or investors There are no court, administrative or arbitration proceedings in which the adversary parties are present or former members of the Board of Directors or of the Executive Board, present or former controlling stockholders, or investors of the Company or of its subsidiaries.

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4.5 – Material confidential proceedings There are no material proceedings being held in secret in which the Company, or any of its subsidiaries, is a party.

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4.6 – Non-confidential court, administrative or arbitration proceedings that are repetitive or connected, and significant in aggregate There are no non-secret court, administrative or arbitration proceedings that are repetitive or connected and material in aggregate, either of the Company or of its subsidiaries.

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4.7 – Other material contingencies There are no other material contingencies, neither of the Company, nor of its subsidiaries.

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4.8 – Rules of the origin country and of the country in which the securities are maintained in custody Grendene is a Brazilian company with shares traded only in the Novo Mercado of the B3, formerly known as BM&FBOVESPA.

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5.1 – Risk management policy a. If the issuer has a formalized risk management policy, state the body which approved it and the date of its approval, and, if not, the reasons why the issuer did not adopt a policy Management considers the risks described in items 4.1 largely to be risks inherent to its business model, for which it does not have a formal management policy. The management of these risks probably would result in very high costs in the form of restrictions on being able to take opportunities of investment in the sector and in the country. However, for some of these risks mitigation measures are adopted already described in item 4.1, when applicable. b. State the risk management policy objectives and strategies, if any, including: i. The risks against which protection is sought Not applicable to the risks described in 4.1. ii. The instruments used for protection Not applicable to the risks described in 4.1. iii. The organizational structure of management of risks Not applicable to the risks described in 4.1. c. Appropriateness of the operational structure and the structure of internal controls for verifying the effectiveness of the policy adopted. Not applicable to the risks described in 4.1. We additionally state that the Company does not have a specific organizational structure for management of risks. It does not have committees of any type (neither an audit committee, nor a risk committee, nor a remuneration committee, nor does it have the post of Compliance Director nor an independent internal auditing body). It also does not formally adopt the principles recommended by the COSO, and because it is listed only in Brazil, on the Novo Mercado of the B3, it is not subject to the rules of the Sarbanes-Oxley Law. Notwithstanding the non-existence of a formal policy of management of these risks, they were initially amply identified in 2004 when the Company was listed in the Novo Mercado segment of the Bovespa, and published in the listing prospectus. As from 2008 when it adopted IFRS rules, and when CVM Instruction 480 of December 7, 2009 instituted the Reference Form, this identification of risks and management procedures began to be used manually in the Reference Form itself, which is reviewed by the Executive Board and submitted for consideration by the Board of Directors and the Audit Board. Further, the Company presents jointly with its financial statements its Explanatory Note 19 as determined by CVM Normative Instruction 475/08, which is reviewed by the independent auditors and the Executive Board and approved by the Board of Directors, jointly with the financial statements, and is then submitted for approval to the AGM.

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5.2 – Description of the market risks management policy

a. If the Issuer has a formalized market risks management policy, state the body that approved it and the date of its approval, and, if it does not, the reasons why the Issuer has not adopted a policy. The Company does not have a formalized market risks management policy because it believes that the identification of the risks to which its businesses are exposed, the reflection on them by the management bodies (including the Executive Board, the Board of Directors and the Audit Board) and the description of these risks, and also the practices adopted in their management in the Reference Form and in an Explanatory Note (Note 19) which is an integral part of the financial statements (and thus is evaluated by the external auditors), are together sufficient and meet the same requirements as a formal policy. As stated in item 5.1 c, the Prospectus for the listing of the Company, published in 2004, was the first map of risks systematically identified by the Company, and this has since then updated as its business evolved.

b. Objectives and strategies of the market risks management policy: The Company is very conservative with risks not inherent to its principal business, for which reason market risks are identified and eliminated or significantly reduced. i. Risks from which protection is sought The Company is exposed to credit risk and market risk relating to adverse changes in interest rates, foreign exchange rates and commodities price risk. We seek protection against such risks, as described in item ‘ii’. ii. Hedging strategy The Company maintains transactions in financial instruments, the risks of which are managed through strategies of financial positions and systems to limit their exposure. Credit risk: Among the procedures adopted to minimize potential financial and commercial risks, we highlight: Selectiveness in choosing financial institutions; analysis of the credits granted to clients; and establishment of limits on sales. On December 31, 2015, 2016 and 2017 no client individually represented more than 5% of the total of the Company’s receivables. The risk management criteria of the Company and its subsidiaries, for the financial investments, establish that the financial resources available must be kept, substantially, in first-tier banks (considered in this case to be the 10 largest banks in Brazil by assets), in a manner that is diversified in financial instruments linked to a basket of indicators comprising the CDI, fixed rates or inflation-adjusted. Cash and cash equivalents, and cash investments – The Company’s exposure to counterparty risk in financial institutions is as follows:

R$ '000 Consolidated

2015 2016 2017

Cash and cash equivalents

Cash balances 6,777 6,485 5,085

Cash investments 14,508 14,178 25,034

Cash and cash equivalents 21,285 20,663 30,119

Cash investments

Securities at fair value through profit or loss 390,004 483,659 836,254

Securities held to maturity 870,591 1,085,056 914,272

Total, cash investments 1,260,595 1,568,715 1,750,526

Total 1,281,880 1,589,378 1,780,645

Cash and banks are represented by non-interest-bearing bank deposits. Financial investments classified as cash equivalents refer to short-term investments redeemable no later than three months from the acquisition date. Financial investments comprise: Bank Certificates of Deposit (CDBs), Debentures, Real-denominated Bank Debt Notes (LFINs) and Government Debt Securities (NTNs), and are classified as "Securities at fair value through profit or loss", and "Held-to-maturity investments", according to the Company's investment strategy.

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5.2 – Description of the market risks management policy

Accounts receivable: These arise directly from the Company’s trading operations. They are recorded at their original values, subject to foreign exchange and monetary updating, estimated losses for doubtful settlement, discount for punctual payment, and adjustment to present value. The exposure to credit risk with clients is as follows:

R$ '000 Book value / Fair value

2015 2016 2017

Accounts receivable from clients 854,991 760,953 850,345

R$ '000 Consolidated

2015 2016 2017

Receivables not yet due 853,508 768,691 860,988

Receivables more than 30 days past due 18,963 11,394 13,999

Receivables from 31 to 60 days past due 3,475 3,193 3,719

Receivables from 61 to 90 days past due 4,085 1,661 822

Receivables more than 91 days past due 19,848 24,310 22,106

Sum 899,879 809,249 901,634

Provision for doubtful receivables (6,444) (7,934) (10,549)

Provision for discounts for punctual payment (24,373) (25,110) (27,943)

Adjustments to present value (14,071) (15,252) (12,797)

Total 854,991 760,953 850,345

For more details see notes to the financial statements – Accounts receivable from clients.

Interest rate risk: This risk arises from the possibility that the Company may incur losses due to fluctuations in interest rates that lead to an increase in its finance costs related to borrowings, or a decrease in its earnings on financial investments. The Company continuously monitors the volatility of market interest rates. In order to mitigate possible impacts from fluctuations in interest rates the Company and its subsidiaries adopt the policy of maintaining their funds invested in instruments linked to a basket of indicators such as CDI, fixed rates, or adjusted for inflation. Exchange rate risk: This risk arises from the possibility of fluctuations in foreign exchange rates, which may affect the finance cost (or income) and the liability (or asset) balance of contracts denominated in foreign currency. In addition to trade receivables originating from exports from Brazil, financial investments and foreign investments are utilized as a natural hedge against fluctuations in foreign exchange rates. For the balances of assets and liabilities subject to foreign exchange rate risk, the Company and its subsidiaries assess foreign exchange exposure and contract additional derivative financial instruments as a hedge, if necessary. On December 31, 2017, the Company has advances on export contracts in the amount of US$23,835 thousand (US$15,427 thousand in 2016, which is consistent with the sales scheduled for the foreign market up to the maturity of the contracts. There were no other borrowings denominated in, or indexed to, foreign currencies. Commodity price risk: This risk refers to the possibility of fluctuations in the price of raw materials and other inputs used in the production process. As the Company uses commodities as raw materials, its cost of sales can be affected by fluctuations in the international prices of these materials. In order to minimize this risk, the Company maintains ongoing monitoring of price fluctuations in the domestic and foreign markets and, if necessary, maintains strategic inventories to support its commercial activities. To reduce the net effects of exposure of its business the managers may negotiate future contracts for sale of USD on the BM&F up to the maximum limit defined by the sum of the following items: (i) bank balances in foreign currency held outside Brazil; (ii) financial investments held outside Brazil; (iii) balances of accounts receivable (denominated in USD) of exchange transactions to be contracted; (iv) up to 25% of the forecasts of annual exports equivalent to approximately 90 days of forecast exports (normally corresponding to orders in the order book and negotiations for sales in progress), less: (i) balances of suppliers held in foreign currency; (ii) imports in progress; and (iii) ACCs (Advances against exchange contract). These risks are monitored daily and administered through internal controls that aim to demonstrate the limits of exposure and adapt them to the Company’s risk management policy.

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5.2 – Description of the market risks management policy

Other forms of foreign exchange hedges without the express authorization of the Company's officers are not permitted. Up to date, the Company has not authorized the use of foreign exchange hedges other than those disclosed in the previous paragraph. Foreign exchange hedging transactions are usually made with the BM&F through specialized brokers, without the need to deposit margin. The guarantee amounted to R$52,236 on December 31, 2017 (R$51,362 in 2016 and R$64,982 in 2015) and usually comprises the Company's investments in government securities, considering the limits and exposures to foreign exchange risk, as defined in the policy for management of counterparty risk. It should be noted that these transactions are linked to sales and financial assets in foreign currency, which are also subject to foreign exchange rate changes, offsetting any gains or losses. The balance receivable on December 31, 2017 in the amount of R$407 is classified in securities receivable, the amount payable on December 31, 2016, in the amount of R$2,586 is classified in other payables and the amount receivable of R$ 4,142 on December 31, 2015 is classified in Securities Receivable. iii. Instruments used for protection of value (hedge instruments) The instruments used for hedging of value consist of sales of future United States dollars, through financial instruments made for the purpose, such as: Short contracts on the BM&FBovespa, ACC (Advances against exchange contracts) and ACEs (Advances on delivered shipping documents). The foreign exchange hedge transactions are usually made on the BM&FBovespa through specialized brokers, without the use of margins. The guarantee usually consists of cash investments belonging to the Company, in public securities, subject to limits and exposures to exchange rate risk, as defined in its counterparties' risk management policies.

iv. Parameters used for management of these risks To reduce the net effects of exposure of its business the managers may negotiate future contracts for sale of USD on the BM&F up to the maximum limit defined by the sum of the following items: (i) bank balances in foreign currency held outside Brazil; (ii) financial investments held outside Brazil; (iii) balances of accounts receivable (denominated in USD) of exchange transactions to be contracted; (iv) up to 25% of the forecasts of annual exports equivalent to approximately 90 days of forecast exports (normally corresponding to orders in the order book and negotiations for sales in progress), less: (i) balances of suppliers held in foreign currency; (ii) imports in progress; and (iii) ACCs (Advances against exchange contract). These risks are monitored daily and administered through internal controls that aim to demonstrate the limits of exposure and adapt them to the Company’s risk management policy. v. Does the Issuer operate financial instruments with objectives other than hedging, and if so what are those objectives We do not use financial instruments for any other purpose than hedging (protection of value). vi. Organizational structure of control of risk management The activities of management of risks constitute a continuous activity that follow the Company’s management practices, under the administration of its Chief Officers. The administration of these risks is carried out based on the reports of internal controls prepared by the financial management. The financial investments and transactions in sales of future USD contracts on the BM&F are approved by the CEO of the Company. A report of financial investments by type of instrument, of FX exposure and of contracts on the BM&F is submitted quarterly to the Board of Directors and the Audit Board. c. Appropriateness of the operational structure and internal controls for verifying the effectiveness of the policy adopted

Management believes that the environment of internal controls that the Company maintains has a high degree of confidence for its type of activity and volume of operations, and is properly prepared to prevent frauds and errors. The level of automation and integration of the systems ensures efficiency and safety of the processes. However, efforts are constantly being made to improve the processes and controls, always with a view to security and mitigation of risks in the execution of the routines and gains in competitiveness.

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5.3 – Description of the internal controls In relation to the controls adopted by the issuer to ensure preparation of reliable financial statements, indicate: a. Principal internal control practices and degree of efficiency of those controls, indicating any imperfections and the measures taken to correct them. The Company has integrated management systems (management software) which since they are parameterized ensure a reasonable standardization in its transactions and in the records of them. To ensure integrity for its systems the Company maintains a rigid control of accesses to them and of traceability of transactions. The control of access passwords and of user profiles is systematically evaluated by the managers and submitted to tests by the external audit. The internal management reports and the systematic accompaniment of indicators and results by the managers responsible, accompanied by the chief officers, provide a reasonably secure controlled environment. Management is responsible for establishing and maintaining internal controls that are adequate in relation to the Company’s financial reports. In management’s assessment the Company maintains adequate and appropriate internal controls on the financial reports and seeks their continuous improvement. b. The organizational structures involved. The Company’s Executive Board, composed of the CEO, the deputy CEO and the Chief Finance and Investor Relations Officer jointly with the non-statutory directors, jointly with the managers subordinated to them, are the persons responsible for accompaniment of the indicators and results of the Company’s principal business processes. The Financial Directorate – the principal area responsible for the financial statements – comprises: the Controller’s Office for the South; credit and legal management; treasury management; and the Controller’s Office for the Northeast, and comprise the principal officers responsible for preparing the financial statements, and for adoption of good internal control practices and obedience to the applicable accounting rules. The Statutory Directors, coordinated by the chair, are responsible for the establishment, review and maintenance of the Company’s internal control policies, and also for the management of material risks and execution of the annual auditing plan, including any aspects related to appropriation and review of the financial statements, reporting to the Board of Directors. c. Is the efficiency of the internal controls supervised by Issuer’s management, and how? Please indicate the job positions of the persons responsible for said accompaniment. The systematic accompaniment of the business indicators and financial reports is carried out by the Executive Board. The chief officers take part in the meetings of the Board of Directors and are questioned by them about the results. The Chief Finance and Investor Relations Officer takes part in the meetings of the Audit Board answering their questions and following up with the suggestions and recommendations received. He also takes part regularly in meetings with the external auditors for evaluation of their work. Managers receive regular reports (daily, weekly, monthly and quarterly) on the indicators and business results. Monthly, the results are analyzed for comparison with expectations and the results obtained in the same period of the previous year and presented in meetings between managers and directors for discussion. The result of all the works planned for the business year is reported through reports to the Board of Directors, Chief Officers and the Managers involved and is accompanied on a monthly basis. d. Deficiencies and recommendations on the internal controls presented in the detailed report prepared and submitted to the issuer by the external auditor, in accordance with the regulations issued by the CVM dealing with reporting of an exercise of the external auditing activity. The external auditors have carried out the work of audit and evaluated the accounting system and the internal controls of the Company in connection with the audit of the financial statements for the business years ended December 31, 2017, 2016 and 2015 for the purpose of determining the nature, appropriateness and extension of the application of the procedures of auditing, but not for the purpose of expressing a specific opinion on those internal controls..

In their report, with grounds, relating to this work for December 31, 2017 the auditors identified one matter which in their opinion characterizes a significant deficiency of internal controls, related to recognition of sales revenue not in accordance with CPC 30 (R1) – Revenues. This situation arises from sales carried out at the end of the business year on the CIF basis (i.e. with cost insurance and freight paid by the Company), the invoicing and shipments of which took place in 2017, but for which the effective physical delivery of the product at the point of sale of the client took place at the beginning of 2018. The external auditors suggest that management should adopt controls that make it possible to identify the date on which the transfer of the risk of sale to the client takes place and make recognition in accordance with Brazilian accounting practices.

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5.3 – Description of the internal controls e. Comments by the directors on the deficiencies indicated in the detailed report prepared by the external auditor and on the corrective measures adopted.

In the meeting for assessment of the report management made the following comments:

1) The whole of the Company’s production takes place after receipt of orders for products, that is to say, the Company adopts the system of production in accordance with purchase order.

2) The Company produces, and ships, every day, a large quantity of products already ordered by its clients, and the dispatching in a single day can exceed one million pairs of shoes.

3) These products are grouped in accordance with the orders and transported by hundreds of trucks owned by independent transport companies that must deliver them to all the regions of the country, to approximately 15,000 different clients and approximately 65,000 points of sale.

4) There is no concentration of orders in clients, and as has already been stated, no client represents more than 5% of the Company’s revenue, and individual orders represent even less.

5) Individually, each order or indeed each cargo transported by a truck represents an insignificant amount in relation to the total of the Company’s revenues, and thus the risk of any claim event or other factor that prevents the delivery of the products affecting this revenue is also insignificant. In the management’s view the probability of any significant part of revenue recognized not becoming concrete is immaterial. Further, all the cargos are insured.

6) As demonstrated to the auditors, all the orders were in existence on the date of the shipment, the products were shipped and there were no significant returns or refusals by clients to receive them.

7) The invoices corresponding to these orders were settled by the clients within their due dates without the occurrence of default or abnormal delays.

8) All the taxes on these revenues were recognized and paid.

In view of these characteristics and the fact that the effects that these amounts would have on the Company’s profits are very small, management evaluated that the costs in terms of internal controls necessary to control these effects would not be advantageous and would not add anything to the quality of the information.

However, the Company has introduced several modifications in its process to reduce the possibility of situations occurring like that identified by the auditors, such as renegotiation with various clients on the terms of freight charges, especially international clients, prioritization of shipments to clients with larger transport time, and enhancements of the shipping process. Even so, it will continue enhancing its system of controls to provide better evidence of all the points highlighted. In management’s assessment, the other deficiencies reported by the auditors do not present a probability or magnitude in relation to distortions that could arise in the financial statements.

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5.4 – Significant alterations – Compliance program

a) Does the issuer have rules, policies, procedures or practices for prevention, detection and remediation of fraud or unlawful activities practiced against the public administration, and if so, please identify:

The Company has a Code of Conduct, approved on December 1, 2008, which emphasizes compliance with the applicable laws and regulations, and transparency in dealing with representatives of the public administration; but this code does not meet the requirement set by the New Regulations of the Novo Mercado which came into effect on January 2, 2018, and sets a period for companies to adapt to it, by April 2021. The code currently in effect sets out concepts, but without establishing mechanisms and procedures, organizational structures, training, punishments and processes of review. The Grendene Code of Conduct is currently undergoing revision to take account of these requirements and comply with the period of adaptation to the New Regulations of the Novo Mercado.

I. State the principal mechanisms and procedures for compliance adopted; their adaptation to the profile and risks identified by the issuer; and how frequently the risks are reassessed and the policies, procedures and practices adapted.

See response above (5.4, Clause ‘a’).

II. State the organizational structures involved in the monitoring of the functioning and efficiency of the internal mechanisms and procedures for compliance, indicating the duties created, whether their creation was formally approved, the bodies of the issuer to which they report, and the mechanisms, if any, for guarantee of independence of those directing them.

See reply above (5.4, Clause 'a').

III. Does the Issuer have a Code of Ethics or of Conduct formally approved? Indicate:

Whether it applies to all the chief officers, members of the Audit Board, members of the Board of Directors, and employees, and whether it also covers third parties such as suppliers, service providers, intermediary agents and associates.

Yes, but with the limitations referred to above.

How frequently are the chief officers, members of the Audit Board, members of the Board of Directors and employees trained in relation to the Code of Ethics or of conduct and in relation to the other rules related to the subject?

There are no provisions for periodic training.

What sanctions are applicable in the event of violation of the code or other rules related to the subject? Identify the document where these sanctions are specified.

There are no provisions for sanctions.

State which body approved the Code; what was the date of approval; and, if the Issuer publishes the Code of Conduct, a web address where it can be read.

The Code of Conduct came into effect on December 1, 2008, and was posted on the Periodic Information (IPE) system of the CVM (now the B3) on January 24, 2012. It can be consulted on the Company's site (http://ri.grendene.com.br/PT/Governanca-Corporativa/Codigo-de-Conduta) and on the site of the CVM/B3.

b) Whether the issuer has a channel for reporting irregularities, and if so:

Grendene does not have a channel for reporting irregularities.

Whether the reporting channel is internal or is under the responsibility of third parties.

Whether the channel is open for receipt of accusations from third parties or whether accusations are received only from employees.

Whether there are mechanisms for anonymity and protection for those making accusations in good faith.

The body of the issuer that is responsible for investigating accusations.

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5.4 – Significant alterations – Compliance program

c) Whether the issuer adopts procedures in processes of merger, acquisition and corporate restructuring with a view to identifying vulnerability and risk of irregular practices in the legal entities involved.

Grendene does not adopt procedures of identification of vulnerabilities and risk of irregular practices in the legal entities involved..

d) In the event that the issuer does not have rules, policies, procedures or practices for prevention, detection and remediation of frauds or unlawful practices against the public administration, give the reasons why the issuer has not adopted controls to this effect.

At the time when we established the Grendene Code of Conduct we assessed that the Company had taken an important step in the improvement of its control environment, and since then we have not seen any need for its updating. The Company’s culture has always been one of maintaining strong internal controls, but this has not always been done with the formalization that the present Codes of Governance call for. This low degree of formalization has functioned in an environment of very low turnover among management posts, as is the case of Grendene, which can be seen by the very low level of problems (misappropriations, frauds, problems of compliance, etc.) that the Company has suffered in its 47 years of operation.

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5.5 – Significant alterations In recent years the Company has been through a large-scale recession and suffered very hard market conditions, with real interest rates very high and great volatility in exchange rate – which has undoubtedly represented a situation of stress to all the Company systems of management and controls. Even so the results have been satisfactory, and have not shown any problems of any serious degree. Clearly past results do not constitute a guarantee of future results and we will continue enhancing our systems of management and control.

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5.6 – Other relevant information - Risk management and internal controls

a) Capital management The principal objective of capital management is to ensure continuity of the Company’s business, maintaining a policy of low level of leverage, thus protecting its capital from oscillations in the economic policy of the government, maximizing value for the shareholder. In its capital management, the Company both manages its capital structure and adjusts it in response to changes in the economic conditions of the country. To maintain or adjust the capital structure, the Company may adapt the policy of payment of dividends to the shareholders. The Company's dividend policy may include state tax incentives in the basis for calculation of dividends, provided that there is no impact on the objectives, policies or processes of the Company’s capital management. For 2018 the dividends policy is referred to in item 3.9. There were no events causing change to it in the business years ended December 31, 2015, 2016, and 2017.

R$ '000 Consolidated

2015 2016 2017

Cash and cash equivalents 21,285 20,663 30,119

Cash investments 1,260,585 1,568,715 1,750,526

(–) Loans and financings, short and long term (212,825) (125,372) (123,627)

Net financial position 1,069,045 1,464,006 1,657,018

We now present the Company’s exposure to credit risk and liquidity risk: b) Liquidity risk: The Company maintains balances in cash investments that can be redeemed at any moment to cover any mismatches between its cash flow and the maturity date of its contractual obligations. In management's opinion, this makes the risks of liquidity insignificant. This table will help the reader assess the risk of shortage of funds for payment of debts (substantially, loans and financings):

Consolidated

R$ ’000 2015 2016 2017

Up to 1 year

1 to 9 years

Total Up to 1

year 1 to 9 years

Total Up to 1

year 1 to 9 years

Total

Financing of fixed assets 10,479 51,172 61,651 10,841 42,198 53,039 10,834 31,390 42,224

Working capital 126,580 - 126,580 58,084 - 58,084 78,832 - 78,832

Financings – Proapi and Provin 4,593 20,001 24,594 1,809 12,440 14,249 - 2,571 2,571

141,652 71,173 212,825 70,734 54,638 125,372 89,666 33,961 123,627

Parent Company

R$ ’000

2015 2016 2017

Projection including future interest

Projection including future interest

Projection including future interest

Up to 1 year

1 to 9 years

Up to 1 year

Up to 1 year

Up to 1 year

Total Up to 1

year Up to 1

year Total

Financing of fixed assets 12,822 56,612 69,434 12,815 45,697 58,512 12,363 33,577 45,940

Working capital 128,172 - 128,172 50,865 - 50,865 79,531 - 79,531

Financings – Proapi and Provin 4,824 23,752 28,576 1,871 15,433 17,304 - 3,241 3,241

145,818 80,364 226,182 65,551 61,130 126,681 91,894 36,818 128,712

Accounts payable: These arise directly from the Company’s trading. They are recorded at their original values, subject to foreign exchange and monetary updating, when applicable.

R$ '000 Book value

2015 2016 2017

Suppliers 44,903 41,369 36,705

Commissions payable 37,616 39,831 41,622

The position of net assets and amounts receivable from clients has been set out in the item ‘Credit risk’, above.

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6.1 / 6.2 / 6.4 – Details of incorporation of the Issuer, period of duration and date of CVM registry

Date of constitution of the Issuer February 25, 1971

Form of constitution of the Issuer Constituted as a limited business company; transformed into a corporation with shares on November 26, 1979

Country of constitution Brazil

Period of duration Indeterminate

Date of CVM registry October 26, 2004

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6.3 – Brief history Plásticos Grendene Ltda was constituted on February 25, 1971, originally as a private limited company with shares, to operate as an industrial company dealing with plastics in general. At the time of its constitution, its activities centered on manufacture of plastic packagings for wine flasks, an innovation in the market which until then produced those packagings only made out of wicker.

In 1976 the Company expanded its activities, beginning to manufacture plastic parts for agricultural machinery and equipment, and soon afterward became a supplier of components for footwear, such as soles and heels. It had a pioneering position in the use of polyamide (nylon) as a raw material for manufacture of such components. In 1979, now called Grendene S.A., it launched the first sandals with the Nuar brand, and in the same year, sandals with the Melissa brand.

Seeking more competitive conditions in terms of cost of labor and the advantages arising from tax incentives, Grendene migrated production from the mountain region (Serra Gaúcha) of Rio Grande do Sul, initially to the capital of Ceará, Fortaleza (1990). Then, gradually, plants were built in the more wild, harsh regions of the interior of the State (the ‘Agreste’), at Sobral (1993), which became the head office, and at Crato (1997). These were locations with very different conditions in terms of culture; adverse in terms of climate; with minimal infrastructure at the time; and with local labor not specialized in the footwear industry and even less specialized in the specific manufacture of injected footwear, which uses sophisticated, automated equipment. In 2007 one more new plant began production, in the south of Bahia, at Teixeira de Freitas: MHL Calçados Ltda.

Over the years the Company developed its own successful brands, such as: Melissa, Rider, Grendha, Ipanema, Ilhabela, Zaxy, Cartago, Pega Forte and Grendene Kids. Also, it uses the brands of third parties and licenses from celebrities, and characters from the universe of infant and child entertainment: characters such as Gisele Bündchen, Shakira, Ivete Sangalo, Paula Fernandes, Xuxa, Guga Kuerten, Mormaii, Senninha, Hot Wheels, Barbie, Hello Kitty, Spiderman and the leading licenses of Disney contributed to Grendene’s good results.

Grendene is totally integrated, with installed production capacity for 250 million pairs per year in its six industrial plants, comprising 11 footwear plants, a mold manufacturing, one CD (Distribution Center) and a plant producing PVC for its own consumption.

In line with the Company’s strategy of expanding and strengthening the relationship of the brand with its clients and consumers, the Melissa brand has three ‘Galeria Melissa’ concept stores, one in São Paulo, one in New York and one in London; a showroom, in Milan, which has taken over management and distribution of the products of the brand in Italy; and a network of more than 240 Clube Melissa franchised stores in Brazil in December 31, 2017. In Rio de Janeiro, Casa Ipanema was established in February 2014 as a specific space for the Ipanema brand and its clients and in March 2017, a Ipanema store in São Paulo.

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6.5– Information of any petition for bankruptcy founded on a significant amount, or for judicial recovery or out-of-court reorganization. There has been no petition for bankruptcy founded on a significant amount, nor any application for judicial recovery or out-of-court reorganization of the Company.

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6.6 – Other material information

Stock split

On September 21, 2009, the Extraordinary General Meeting approved a split of the Company’s common shares, in which each common share became three shares – the total number of the Company’s shares (all nominal, common) thus increasing from 100,000,000 to 300,000,000 – all shares being without prior value.

On April,2018, the Extraordinary General Meeting approved a split of the Company’s common shares, in which each common share became three shares – the total number of the Company’s shares (all nominal, common) thus increasing from 300,720,000 to 902,160,000 – all shares being without prior value.

Issuance of shares

In the Ordinary and Extraordinary General Meetings held on April 19, 2010, new drafting was approved for the head paragraph of Clause 5 of the by-laws, relating to the amount of the share capital and quantity of nominal common shares, without par value, subscribed and fully paid up, arising from the private issuance of 720,000 (seventy hundred twenty thousand) new common shares without par value, to serve the Company’s stock options plan, due to exercise of the said option by the eligible executives of the Company.

Corporate stockholding events

The principal corporate events involving Grendene S.A. in the period 2013 to 2018 are as follows:

Grendene UK Limited

This company was formed on April 16, 2013, in the United Kingdom, its principal activity being retail and wholesale sales of products of Grendene and other companies. Grendene owns 100% of the share capital.

Grendene Italy S.R.L.

Constituted on September 13, 2013, in Italy. The principal activity is distribution of Melissa products in that country. Grendene UK Limited owns 100% of the share capital.

Grendene Argentina S.A.

Company headquartered in Argentina. This company was sold as per a purchase and sale agreement entered into on June 9, 2017.

A3NP Indústria e Comércio de Móveis S.A. (A3NP)

This company was constituted in Brazil on May 15, 2013. Its principal objects are industrial production, sale, import and export of furniture, parts and assemblies in acrylic, polypropylene, polycarbonate, polyethylene thermoplastic copolymer, aluminum alloys, solid wood and other materials, for domestic, industrial and commercial use, and also decorative items, utensils in general and clothing. Grendene owns 100% of the total capital. This company was sold as per a purchase and sale agreement entered into on February 21, 2018.

There is no other information that is considered to be material.

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7.1 – Description of the activities of the Issuer and its subsidiaries

Grendene is one of the world’s largest producers of footwear. It has proprietary and exclusive technology in the production of footwear for the feminine, masculine and children's publics. It is totally integrated, with installed capacity for 250 million pairs/year (800,000 pairs/day) in its industrial units at six locations. These comprise: 11 footwear factories; CD (Distribution Center); a mold-producing facility; a factory making PVC for its own consumption in production of footwear. Its logistics distribution includes traditional and non-traditional distributors and retailers throughout Brazil and in the rest of the world.

The Company sells its products through commercial representatives, distributors, direct exports and through subsidiaries outside Brazil - Grendene USA Inc. (USA), Grendene UK Limited (United Kingdom) and Grendene Italy S.R.L. (Italy) - reaching a total of 20,000 points of sale outside Brazil and 65,000 in the Brazilian market, as well as a separate sales area and selective distribution for the Melissa brand. Revenues are obtained principally from sale of products in the domestic market (approximately 76% of gross revenue). The remaining approximately 24% of gross revenue is from exports, to more than 100 countries.

In line with the Company's strategy of expanding and strengthening the relationship of the brand with its clients and consumers, the Melissa brand has three Galeria Melissa concept stores, one in São Paulo, one in New York and one in London, a showroom in Milan, which has assumed the management and distribution of the products of the brand in Italy, and a franchising network of more than 263 Clube Melissa stores in Brazil in December 31, 2017. In February 2014, the Ipanema brand opened the doors of its space for relationship with clients in Rio de Janeiro and in March 2017, a Ipanema store in São Paulo.

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7.1.a – Specific information of mixed capital companies Justification for not filling in the table: The company is a limited liability corporation.

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7.2 – Information on operational segments a. Products and services sold: Footwear b. Revenue from the segment and its share in the net revenue of the Issuer

R$ '000 2015 % of Net revenue

2016 % of Net revenue

2017 % of Net revenue

Domestic market 1,479,455 67,2% 1,442,885 70.6% 1,636,976 72.7%

Export market 723,341 32,8% 602,230 29.4% 614,996 27.3%

Net sales revenue 2,202,796 100.0% 2,045,115 100.0% 2,251,972 100.0%

c. Profit or loss resulting from the segments and its share of the Company's net profit

R$ '000 2015 % of Net

profit 2016

% of Net profit

2017 % of Net

profit

Domestic market 309,691 57,4% 423,629 66.8% 441,814 66.9%

Export market 229,620 42,6% 210,326 33.2% 219,089 33.1%

Net profit for the year 539,311 100.0% 633,955 100.0% 660,903 100.0%

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7.3 – Information on products and services related to the operational segments

a. Characteristics of the production process

The production process is very specific, with an up-to-date group of factories, and large-scale verticalized production. This provides a competitive differential in the market. The Company has always made its footwear by the process of injection of thermoplastics. It is a proprietary technology, developed over more than 40 years of experience, which includes the development of its own molds, manufacture of PVC in its own factory, and automated production, with the upper and lower parts of the shoe being melted together during the process of injection. The Company's production in its own factory of all of the PVC, its principal raw material, that it uses, enables specific formulations to be made for each type of component and each type of footwear item, with more flexibility, and without depending on outside parties. It also makes it possible to correct any problems that are found in relation to the raw material rapidly during the production process. The machines and equipment, acquired from suppliers, are adapted and assembled by Grendene's team to its own specifications, which are kept as an industrial secret.

These factors make production more economical, faster, distinctive and of better quality, producing a high volume in a short space of time, while the majority of the competitors use manufactured production (assembly) - the traditional way of producing footwear. Thus, in Grendene's case, it is possible to create new, differentiated models rapidly or to take models out of the market, responding to fashion trends and to the acceptance of the products by consumers.

The result of this production structure is footwear of high quality that is highly cost-competitive, generating attractive return for the Company and its partners.

Possible problems of energy supply are avoided by the maintenance of own generators.

Annual production and installed capacity Grendene (millions of pairs) 2015 2016 2017

Annual production 180 164 171

Installed capacity 250 250 250

b. Characteristics of the distribution process

Grendene has a logistics system that enables national and international distribution through a range of different sales channels. It serves the Brazilian market through commercial representatives, and the external market both through subsidies outside Brazil - Grendene USA, Inc. (United States), Grendene UK Limited (United Kingdom) and Grendene Italy S.R.L. (Italy) - and also through distributors and direct exports to large clients. Distribution of the products is carried out by outsourced transportation companies.

Grendene operates in more than 100 countries, with a base of more than 65,000 points of sale in Brazil and 20,000 outside Brazil.

c. Characteristics of the markets of operation

Brazil was once the world's largest manufacturer of footwear, in the 1970s - it has been operating in the sector for over 150 years - based on small companies (an estimated 8,000 manufacturers) that were labor-intensive. Today Brazil is third-placed in the world ranking of producers, with a significant market share in the footwear segment that allies quality and design with competitive prices.

General data on the industry

More than 8,000 footwear producing companies

Direct generation of more than 340,000 jobs

Brazil is the world's 3rd largest producer

Exports: 127 million pairs, to more than 140 countries, in 2017 (1.2% higher than in 2016 – 126 million pairs and 2,5% higher than

in 2015 – 124 million pairs ).

Sources: IEMI, RAIS, Abicalçados, Secex. (*) Figures estimated by Grendene.

After four years of falling consumption and contraction in Brazil’s economy, with record levels of unemployment, inflation and high interest rates, 2017 was finally a year of recovery – in all senses. Inflation was below the target, interest rates are now at their lowest since the introduction of the Real as a currency, unemployment has declined, and there has been a slight recovery in consumption. Without a doubt, all this is encouraging news – even though footwear consumption in the country has once again declined. However, Brazil’s serious fiscal situation has not been resolved – and we believe this should keep us on the alert for a possible interruption in the current recovery if the problem is not properly solved.

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7.3 – Information on products and services related to the operational segments

Even so, we are looking forward to the first half of 2018 as potentially having good numbers boosted by such factors as: the World Cup in Russia, the Brazilian election year, and the continuing strong moment in the world economy.

After our several years increasing profit even with lower volumes – whether caused by the domestic market recession or problems in the world market – we are encouraged and motivated by the outlook for a recovery in volumes as a whole.

Falling unemployment and low inflation increase consumers’ purchasing power. Also, low interest rates facilitate deleverage of the economy. We see these as signals that footwear consumption could again grow in 2018, recovering part of the levels it has lost in recent years.

We reiterate that we are ready to take advantage of the opportunities.

Considering all these aspects, we see it as probable that the worst economic moment of this devastating episode is now past, and those companies that knew how to strengthen themselves during this period – such as Grendene – are preparing to reap the results of a healthier economy. This is our expectation, and we are confident.

Brazilian production of footwear, and apparent consumption (millions of pairs)

Brazil 2015 2016 2017

Production 944 868* 845*

Imports 33 23 24

Exports 124 126 127

Apparent consumption 853 765* 742*

Consumption per capita (pairs) 4.2 3.7* 3.6*

Sources: IEMI, Secex, Abicalçados. *Numbers estimated by Grendene.

We have re-presented the figures for production, apparent consumption and consumption per capita for the years 2014 and 2015, due to updatings and revisions of the sources of information.

Country 2014 production

(millions of pairs)

The five leading countries produced 16,378 million pairs, equivalent to 81.4% of world production.

China 11,353

India 2,579

Brazil 877

Vietnam 854

Indonesia 715

Others 3,740 Total 20,118

i. Share in each of the markets

82,2%

6,2%

4,6%3,9% 1,8%1,3%

0,00%

Footwear sales by continent, 2014

Asia South America Europe Africa North & Central America Middle East Oceania

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7.3 – Information on products and services related to the operational segments

The Company and its subsidiaries have a single market business segment: production and sale of footwear for the domestic and export markets.

Since it produces only footwear, for purposes of both accounting and internal control the Company is organized into one single business unit. The Company's products, although they serve different publics (men, women, children, and mass) are not managed as independent segments; the Company's results are assessed, monitored and evaluated as an integrated whole.

Consolidated sales in the domestic and external markets can be summarized as follows:

Gross sales (thousands of Reais) 2015 2016 2017

Domestic market 1,899,834 1,870,373 2,106,549

Exports 732,016 612,665 621,126

Sum 2,631,850 2,483,038 2,727,675

The information on gross sales in the external market, by geographical segment, had been prepared on the basis of the country that is the origin of the revenue, that is to say, based on the sales made by the holding company in Brazil and by the subsidies outside Brazil (Grendene USA, Inc., Grendene Argentina S.A., Grendene Italy S.R.L., Grendene UK, Limited in the USA, Argentina, Italy and United Kingdom respectively, and can be presented as follows: Gross sales in the export market from: (thousands of Reais) 2015 2016 2017

Brazil 638,462 558,829 562,902

United States 34,663 40,757 41,696

Argentina 48,314 121 -

Italy 8,268 9,372 13,302

United Kingdom 2,309 3,586 3,226

Sum 732,016 612,665 621,126

Grendene Argentina was sold as per a purchase and sale agreement entered into on June 9, 2017.

Sales are very widely spread out and distributed in a balanced fashion between our markets: Brazilian and international. The Brazilian market represents between 70% and 80% of revenues. No client individually represents more than 5% of sales.

Millions of pairs 2015 2016 2017

Total world apparent consumption of footwear (pairs) n/a n/a n/a

Grendene’s total sales (pairs) 180 164 171

Grendene’s share (%) in global consumption n/a n/a n/a

Apparent consumption of footwear in Brazil (pairs) 853 765* 742*

Domestic market sales (pairs) 134 124 126

Grendene share (%) in domestic market 19.1% 18.8%* 20.3%

World apparent consumption of footwear (excluding Brazil) n/a n/a n/a

Sales in the external market (pairs) 46 40 45

Grendene’s share (%) in the export market n/a n/a n/a

Exports of footwear from Brazil (pairs) 124 126 127

Grendene’s share (%) in Brazilian footwear exports 37.0% 31.8% 35.4%

Source: World Shoe Review 2015, MDIC (Trade Ministry), Grendene. * Number estimated by Grendene. n/a – information not available.

ii. Conditions of competition in the markets

The majority of the competitors in the international market are in Asia, especially China, the world’s largest producer of footwear and the world’s largest exporter.

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7.3 – Information on products and services related to the operational segments

Brazil is the third largest producer of footwear, imports a relatively small proportion of its consumption and has been losing ranking in exports – it is currently in fifth place by the latest estimates. The largest competitors in the domestic market are local – some half a dozen large and medium sized companies (referring to the footwear sector), and many small competitors.

Brazil is the principal market of Grendene’s products, providing 77% of its gross revenue and 74% of the footwear sold in 2017. Grendene is in all the States of Brazil and is correctly positioned in the markets which it operates.

The competitive differences of Grendene are in the strength of its brands (Melissa, Rider, Grendha, Ipanema, Zaxy, Cartago, Pega Forte and Grendene Kids), licensings, its capacity for innovation and marketing, a differentiated productive process, a solid capital structure and strong cash generation.

d. Seasonal factors if any

The Company has greater demand in September through December, coinciding with sales related to the end-of-year holiday period. In the period May through July we have lower demand for our products since it is winter in the South and Southeast regions of Brazil.

e. Principal inputs and raw materials

Our principal raw materials and inputs are PVC resin and plastifying oils.

I. Describe relationships maintained with suppliers including whether subject to governmental control or regulation.

At Grendene we obey rigorous specifications for the choice of our suppliers, based not only on quality and price but also on reputation and financial situation. The thermoplastics and plastifying oils, our principal raw materials, are regulated by various legislations and/or technical rules.

The Brazilian, North-American and European markets require compliance with their respective legislations on restricted chemical substances. The bodies and legislations in these markets are:

Brazil: IPT

United States: CPSIA – Consumer Product Safety Improvement Act

European community: REACH – Registration, Evaluation, Authorization and Restriction of Chemicals Acquisition of other inputs and raw materials is not subject to governmental control or regulation.

II. Possible dependence on few suppliers.

Although Grendene acquires a large proportion of its thermoplastic resin needs from Braskem S.A., in our analysis we do not have a relationship of dependence with this or any other supplier. Grendene’s scale of production makes it possible for us to research raw materials worldwide, buy them in large quantities and negotiate a competitive price. (See: Item 4 – Risk Factors).

However, Braskem is the only Brazilian company capable of meeting Grendene’s needs for resins; if there were simultaneous difficulties at that company and also difficulties in importation of raw material, this could affect our productive capacity.

III. Any volatility in their prices.

The basic raw material acquired in the market is PVC resin, the price of which arises in the international market as a result of the balance between supply and demand. (See Item 4 of Risk Factors).

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7.4 - Clients responsible for more than 10% of total net revenue We do not have concentration of sales, and no client in isolation is responsible for more than 5% of net revenue.

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7.5 - Material effects of state regulation on the activities

a. Need for governmental authorizations to carry out the activities, and history of relationship with the public administration for obtaining such authorizations

Manufacture of footwear does not require any specific governmental authorization, except the licenses related to environmental factors and location (municipal zoning laws, operating licenses, etc.).

The Company has licenses for the functioning of all its units.

b. Environmental policy and costs incurred for compliance with the environmental regulation

Grendene does not have an Environmental Policy, but adopts, as principles: compliance in full with the laws and all the regulations to which it is subject; and parsimonious use of all resources and inputs.

It has valid environmental licenses for all its units, has the certificates of compliance from Ibama for all its operations, and rigorously complies with the conditions of the granting bodies. (See item 4 – Risk Factors).

We meet all the conditions referring to the monitoring of environmental controls, such as: self-monitoring of the parameters of sanitary and industrial effluents; self-monitoring on generation and final disposal of waste; and self-monitoring of the parameters of atmospheric emissions; and we periodically carry out audits on the receptors of industrial wastes.

Grendene has Suppliers’ Certification from ABVTEX (Brazilian Textile Retail Association – Associação Brasileira do Varejo Têxtil), and became the first footwear company to receive this certificate. The aim of the certificate is to enable the retail sector to certify and monitor its suppliers in terms of practices of Environmental, Social and Employee Relations responsibility.

Grendene’s products are constantly submitted to laboratory tests for control of formulation, the results of which can be shared when requested by its clients.

Grendene products are conceived, in their essence and design, with a concern for minimization of wastes, and manufacturability at lowest cost. Another point to be highlighted is that the PVC produced by Grendene complies with the most rigorous worldwide legislations on chemical substances used in footwear manufacture.

We continue to direct special attention to water consumption, energy consumption, and generation of wastes, in general. The actions that we take have not only reduced costs and operational risks but also lowered environmental impacts, however there were discovery factors and other effects that nullified some of our actions.

Here are some of our results, comparing with the year 2017:

water consumed per pair produced: 11.6%;

consumption of electricity per pair produced: 4%;

generation of wastes per pair produced: 4%.

Our principal actions with this focus in 2017 were:

Water consumption – our industrial operations are in an arid region of the country: we act to increase the availability of water, and constantly reduce the impact of our water consumption footprint.

a. After treatment of effluents, in 2017 we re-used 53,289m3 of water, or 73% of the total flow in the year. b. We currently have one of the lowest water-consumption footprints in footwear production. c. Our water consumption is approximately 75% for human use. d. We have a target of re-using 100% of treated effluents by 2020 – in other words, zero effluent disposal.

This shows the result for our drinking water consumption indicator:

2015 2016 2017 Change %, 2017/2016

Water consumption (liters/pair) 1.57 1.55 1.37 (11.6%)

Water consumption (thousand m³) 259.4 252.9 231.3 (8.5%)

Energy efficiency: we are aiming for the lowest energy consumption per pair produced, and the lowest carbon emissions per pair produced.

a. Since 2012 we have invested in energy efficiency, with a range of actions from change of motors to change from traditional illumination to LEDs. With these energy efficiency actions, we have so far reduced electricity consumption per pair produced by 7.7%.

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7.5 - Material effects of state regulation on the activities

b. 85% of the electricity supplied to the manufacturing units is of renewable origin and has low or zero carbon emission equivalent.

With our actions to increase awareness; our daily indicator of energy efficiency, with targets for managers; our automation projects; and improvements in equipment, in 2017 we avoided a total volume of consumption equivalent to 3.7 million kWh, and with the fall in production, 6.7 million kWh, in the year.

Million / kWh 2015 2016 Reduction

by efficiency Increase in

consumption 2017

Change %, 2017/2016

Consumption of electricity 106.8 99.0 (3.7) (6.7) 106.6 (7.7%)

Our wastes are 100% recyclable: the materials that comprise our footwear are 100% recyclable, each one having its own characteristic recycling features.

a. As well as our products being recyclable, they also have non-toxic characteristics and do not contain any dangerous or allergenic substances.

b. The advantage for our materials in terms of recycling is that they do not need addition of any chemical products.

In management of wastes, we recycle 92% of the material generated. Of this total, 97% is recycled as produced, and 3% undergoes some process before being re-used.

This year, we learned and understood that the increased complexity of the product also generates a negative impact on waste generation. Similarly, increased setup between machines and tooling also negatively impacts the waste indicator per pair.

On the other hand we took some important measures to reduce waste: increased recycling of EVA (a plastic material); increased recycling of dye sludge; and inclusion of new technologies avoiding generating waste at source – these were responsible for reduction of waste by approximately 76,356kg.

The figures for the indicator of wastes generated per pair, and total reductions, are as follows:

2015 2016 2017 Change %, 2017/2016

Wastes (grams / pair) 10.67 8.92 9.28 4%

Reduction of wastes (thousand tons) 1.8 1.5 1.6 6.7%

In 2017 we had 24 social-environmental audits in our manufacturing plants – carried out by clients, both international and Brazilian. We were approved and certified in all of them.

In 2017, as a result of all the actions and the care that we take with the environment, Grendene obtained Re-certification from ABVTEX (the Brazilian Textile Retail Association) – it is the first footwear company to receive this certificate.

The certificate is to enable the retail sector to certify and monitor its suppliers in relation to practices of environmental and social responsibility, and employment relations.

The expenditure (investments and expenses) on environmental management was as follows:

R$ mn 2015 2016 2017

Environmental management: investments and expenses 1.8 3.9 2.3

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7.5 - Material effects of state regulation on the activities

c. Patents, brands, licenses, concessions, franchises, and significant royalties contracts for the Company's activities

At the end of 2017, the Company had the definitive registry of 473 brand names in Brazil (and a further 201 applications for registry), and 945 registrations of brand names outside Brazil, in 123 countries (328 applications in progress).

Brands Total Brazil Outside Brazil Number of

countries outside Brazil*

Application for registry 529 201 328 118

Registered 1,418 473 945 121

Patents – total Total Brazil Outside Brazil Countries*

Applications for registry 454 317 137 39

Registry 1,555 1,401 154 43

Industrial designs Total Brazil Outside Brazil Countries*

Application for registry 430 293 137 39

Registry 1,526 1,372 154 43

Utility models Total Brazil Outside Brazil Countries*

Application for registry 10 10 0 0

Registry 19 19 0 0

Industrial patents Total Brazil Outside Brazil Countries*

Application for registry 14 14 0 0

Registry 10 10 0 0

* Excluding Brazil

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7.6 – Significant revenues coming from outside Brazil a. Revenue from clients attributed to the home country of the Issuer and its share in the Issuer's total net revenue Grendene manufactures 100% of its products in Brazil, and thus all the revenues obtained from other countries are via exports. There are no revenues from exportation attributed to clients with head office in Brazil. Our clients in these various countries are distributors who resell the products to the retail sector in the local markets. These distributors are independent companies that usually have their head office in the countries in which they operate. Sales in the domestic market are made through commercial representatives, with a base of more than 65,000 points of sale. No client individually represents more than 5% of sales.

R$ '000 2015 % of Net revenue

2016 % of Net revenue

2017 % of Net revenue

Domestic market 1,479,455 67,2% 1,442,885 70.6% 1,636,976 72.7%

Net sales revenue 2,202,796 100.0% 2,045,115 100.0% 2,251,972 100,0%

b. Revenue from clients attributed to each foreign country and their share in the total net revenue of the Issuer

Products are exported to more than 100 countries and are very highly spread out, with a base of more than 20,000 points of sale, and there is no dependence on any client, country or currency. No client individually represents more than 5% of sales. c. Total revenue from foreign countries and its share in the total net revenue of the Issuer

R$ '000 2015 % of Net revenue

2016 % of Net revenue

2017 % of Net revenue

Exports 723,341 32.8% 602,230 29.4% 614,996 27.3%

Net sales revenue 2,202,796 100.0% 2,045,115 100.0% 2,251,972 100.0%

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7.7 – Effects of foreign regulation on the Company's activities Grendene is subject to the customs rules and laws of approximately 100 countries to which it exports. The imposition of quotas or tariffs on imports by those countries could affect our exports to those markets.

Since our products use mainly resins as principal raw materials - PVC resins and plastifying oils - we are also subject to the local rules for importation of products that use chemical compounds as inputs.

The international rules with the widest reach are:

United States: CPSIA – Consumer Product Safety Improvement Act.

European Community: REACH – Registration, Evaluation, Authorization and Restriction of Chemicals.

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7.8 – Social-environmental policies a. Issuer discloses social and environmental information

Grendene does not have a social-environmental policy, but publishes such social and environmental information as it deems to be material on its Investor Relations site, in the Financial Statements, in the Report of Management and in the Reference Form (item 7.5 – b)

b. Methodology followed in preparation of the information

Grendene does not use any methodology for preparation of the information.

c. Information is audited or reviewed by an independent entity

The social and environmental information that the company deems relevant to disclose is not audited by an independent entity.

d. Webpage where the information can be found

The information can be found on the Company’s Investor Relations site http://ri.grendene.com.br: in the Report of Management and the Financial Statements, at http://ri.grendene.com.br/PT/Informacoes-Financeiras/Relatorio-da-Administracao; and in the Reference Form, at http://ri.grendene.com.br/PT/Informacoes-Financeiras/Arquivos-CVM.

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7.9 – Other material information Tax incentives Grendene enjoys fiscal and state tax incentives relating to its activities located in the state of Ceará (see Item 4.1 – a). The maturities and amounts of the financings connected to the Provin and Proapi programs can be seen in Item 10.1. a) PROVIN

Period this benefit

Industrial units Incentive % Period % Period

Sobral – CE PROVIN - ICMS 81% Up until February 2019 75% March 2019 until April 2025

Crato – CE PROVIN - ICMS 81% Up until September 2022 75% October 2022 until April 2025

Fortaleza – CE PROVIN - ICMS 81% Up until April 2025

b) PROAPI

Period this benefit

Industrial units Incentive Period this benefit

Sobral – CE PROAPI – EXPORT Up until March 2017

c) Income Tax

Period this benefit

Industrial units % Tax reduction Period this benefit

Sobral – CE 75% Up until December 2023

Fortaleza – CE 75% Up until December 2020

Crato – CE 75% Up until December 2026

Teixeira de Freitas – BA 75% Up until December 2017

All the other information that is material and pertinent to this subject has been disclosed in the previous items.

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8.1 – Extraordinary transactions

There was no acquisition or disposal of any material asset that is not part of the normal business operation of the Company and which has not been mentioned in item 15.7 of this Form.

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8.2 – Significant alterations in the issuer’s manner of conducting its business There have been no significant alterations in the Company’s manner of conducting its business.

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8.3 – Material contracts entered into by the issuer and its subsidiaries not directly related to its operational activities

Since the constitution of the Company no material contract has been entered into with its subsidiaries that was not directly related to its operational activities.

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8.4 - Other material information All material information relevant to this topic has been disclosed in the items above.

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9.1 - Significant non-current assets - others Grendene has 11 footwear plants, in the States of Ceará – in the cities of Sobral (6), Fortaleza (2), Crato (1); in the State of Rio Grande do Sul, in the city of Farroupilha (1); and in the State of Bahia, in the city of Teixeira de Freitas (1); a PVC manufacturing plant and a Distribution Center in Sobral (Ceará); and a mold-making plant in Farroupilha, Rio Grande do Sul.

As well as the industrial plants, we have three flagship Galeria Melissa concept stores of the Melissa brand in São Paulo, New York and London (the London store was opened on October 9, 2014). Their aim is to further strengthen the brand. We also have a Melissa showroom in Milan, which handles the management and distribution of products of the brand in Italy through the subsidiary Grendene Italy S.R.L., and a franchise network of more than 263 Clube Melissa stores in Brazil in December 31,2017.

In the city of Rio de Janeiro, in February 2014, we inaugurated a space called Casa Ipanema, which aims to approximate the brand of that name to its clients. In São Paulo, an Ipanema store since March 2017.This strategy is the fruit of the growth in its principal markets, and also the importance of the brand in the Company’s business.

It is important to point out that the Company’s most significant investments are in working capital and that the totality of its non-current assets corresponds to a relatively small proportion of the total assets. Further, individually, the largest non-current asset consists of long-term financial investments (securities held to maturity).

R$ ´000 2015 2016 2017

Total Assets 3,045,642 3,253,820 3,576,008

Non-current assets 1,136,981 760,841 729,011

Financial investments – Long term 663,723 280,645 213,049

Property, plant and equipment, intangible and other assets 473,258 480,196 515,962

% Property, plant and equipment, intangible and other assets / Total Assets 15.5% 14.8% 14.4%

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9.1 - Material non-current assets / 9.1.a - Fixed assets

Description of the fixed asset Location: Country Location: State Location: Municipality Type of property

Buildings and facilities Brazil Rio Grande do Sul Farroupilha Owned

Buildings and facilities Brazil BA Teixeira de Freitas Owned

Machinery and equipment Brazil Ceará Sobral Owned

Machinery and equipment Brazil Ceará Fortaleza Owned

Machinery and equipment Brazil Ceará Crato Owned

Machinery and equipment Brazil Rio Grande do Sul Farroupilha Owned

Machinery and equipment Brazil BA Teixeira de Freitas Owned

IT equipment Brazil Ceará Sobral Owned

IT equipment Brazil Ceará Fortaleza Owned

IT equipment Brazil Ceará Crato Owned

IT equipment Brazil Rio Grande do Sul Farroupilha Owned

IT equipment Brazil BA Teixeira de Freitas Owned

Buildings and facilities - Galeria Melissa Brazil São Paulo State Sao Paulo Rented

Buildings and facilities - Casa Ipanema Brazil Rio de Janeiro State Rio de Janeiro, RJ Rented

Buildings and facilities - Galeria Melissa United States NY New York Rented

Buildings and facilities - Galeria Melissa United Kingdom London Rented

Buildings and facilities - Showroom Melissa Italy Milan Rented

Buildings and facilities – Loja Ipanema Brazil SP São Paulo Rented

Buildings and facilities Brazil Ceará Sobral Owned

Buildings and facilities Brazil Ceará Fortaleza Owned

Buildings and facilities Brazil Ceará Crato Owned

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9.1 – Material non-current assets / 9.1.b - Patents, brands, licenses, concessions, franchises and technology transfer agreements

Type of asset Description of the asset Duration Events that could cause loss of the rights Consequence of loss of the rights

Brands Grendene Until 2029 The principal events that can lead to loss of rights to use a brand name: (a) non-renewal of the rights every ten years; (b) opposition from outside parties; (c) not using the brand name.

A loss of the rights would result in economic losses due to: (a) loss of the investment made by the Company to consolidate the brand name; (b) loss of the right to use of the brand name; (c) loss of the relationship and of the link established between the brand, the company and products.

Brands Zaxy Until 2027 The principal events that can lead to loss of rights to use a brand name: (a) non-renewal of the rights every ten years; (b) opposition from outside parties; (c) not using the brand name

A loss of the rights would result in economic losses due to: (a) loss of the investment made by the Company to consolidate the brand name; (b) loss of the right to use of the brand name; (c) loss of the relationship and of the link established between the brand, the company and products.

Brands Mel Until 2020 The principal events that can lead to loss of rights to use a brand name: (a) non-renewal of the rights every ten years; (b) opposition from outside parties; (c) not using the brand name.

A loss of the rights would result in economic losses due to: (a) loss of the investment made by the Company to consolidate the brand name; (b) loss of the right to use of the brand name; (c) loss of the relationship and of the link established between the brand, the company and products.

Brands Nuar Until 2020 The principal events that can lead to loss of rights to use a brand name: (a) non-renewal of the rights every ten years; (b) opposition from outside parties; (c) not using the brand name.

A loss of the rights would result in economic losses due to: (a) loss of the investment made by the Company to consolidate the brand name; (b) loss of the right to use of the brand name; (c) loss of the relationship and of the link established between the brand, the company and products.

Brands Pega Forte Until 2020 The principal events that can lead to loss of rights to use a brand name: (a) non-renewal of the rights every ten years; (b) opposition from outside parties; (c) not using the brand name.

A loss of the rights would result in economic losses due to: (a) loss of the investment made by the Company to consolidate the brand name; (b) loss of the right to use of the brand name; (c) loss of the relationship and of the link established between the brand, the company and products.

Brands Galeria Melissa Until 2018 The principal events that can lead to loss of rights to use a brand name: (a) non-renewal of the rights every ten years; (b) opposition from outside parties; (c) not using the brand name.

A loss of the rights would result in economic losses due to: (a) loss of the investment made by the Company to consolidate the brand name; (b) loss of the right to use of the brand name; (c) loss of the relationship and of the link established between the brand, the company and products.

Brands Grendene Kids Until 2026 The principal events that can lead to loss of rights to use a brand name: (a) non-renewal of the rights every ten years; (b) opposition from outside parties; (c) not using the brand name.

A loss of the rights would result in economic losses due to: (a) loss of the investment made by the Company to consolidate the brand name; (b) loss of the right to use of the brand name; (c) loss of the relationship and of the link established between the brand, the company and products.

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9.1 – Material non-current assets / 9.1.b - Patents, brands, licenses, concessions, franchises and technology transfer agreements

Type of asset Description of the asset Duration Events that could cause loss of the rights Consequence of loss of the rights

Brands Grendha Until 2026 The principal events that can lead to loss of rights to use a brand name: (a) non-renewal of the rights every ten years; (b) opposition from outside parties; (c) not using the brand name.

A loss of the rights would result in economic losses due to: (a) loss of the investment made by the Company to consolidate the brand name; (b) loss of the right to use of the brand name; (c) loss of the relationship and of the link established between the brand, the company and products.

Brands Ipanema Until 2026 The principal events that can lead to loss of rights to use a brand name: (a) non-renewal of the rights every ten years; (b) opposition from outside parties; (c) not using the brand name.

A loss of the rights would result in economic losses due to: (a) loss of the investment made by the Company to consolidate the brand name; (b) loss of the right to use of the brand name; (c) loss of the relationship and of the link established between the brand, the company and products.

Brands Melissa Until 2026 The principal events that can lead to loss of rights to use a brand name: (a) non-renewal of the rights every ten years; (b) opposition from outside parties; (c) not using the brand name

A loss of the rights would result in economic losses due to: (a) loss of the investment made by the Company to consolidate the brand name; (b) loss of the right to use of the brand name; (c) loss of the relationship and of the link established between the brand, the company and products.

Brands Cartago Until 2025 The principal events that can lead to loss of rights to use a brand name: (a) non-renewal of the rights every ten years; (b) opposition from outside parties; (c) not using the brand name.

A loss of the rights would result in economic losses due to: (a) loss of the investment made by the Company to consolidate the brand name; (b) loss of the right to use of the brand name; (c) loss of the relationship and of the link established between the brand, the company and products.

Brands Rider Until 2026 The principal events that can lead to loss of rights to use a brand name: (a) non-renewal of the rights every ten years; (b) opposition from outside parties; (c) not using the brand name

A loss of the rights would result in economic losses due to: (a) loss of the investment made by the Company to consolidate the brand name; (b) loss of the right to use of the brand name; (c) loss of the relationship and of the link established between the brand, the company and products.

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9.1 - Material non-current assets / 9.1.c - Interests in companies

Full company name CNPJ (Corporate Tax Nº) CVM Code Type of company Country of head office

State of head office Municipality of head office

Description of activities Issuer's interest, %

Business year Book value - change, % Market value –

change, %

Amount of dividends received (Reais)

Date Amount (Reais)

A3NP Indústria e Comércio de Móveis S.A.

15.761.916/0001-31 - Subsidiary Brazil São Paulo State Sao Paulo Manufacture, sale, import and export of furniture and complementary items based on plastic.

42.500000

Market value

Dec. 31, 2017 0.000000 0.000000 0.00 Book value Dec. 31, 2015 49,000.00

Dec. 31, 2016 0.000000 0.000000 0.00

Dec. 31, 2015 0.000000 0.000000 0.00

Reasons for acquisition and continued holding of this interest

To produce items made in plastic with sophisticated design and accessible cost for the middle income groups on an industrial scale.

A3NP Indústria e Comércio de Móveis S.A.

15.761.916/0001-31 - Subsidiary Brazil São Paulo State Sao Paulo Manufacture, sale, import and export of furniture and complementary items based on plastic

42.500000

Market value

Dec. 31, 2017 0.000000 0.000000 0.00 Book value Dec. 31, 2017 0.00

Dec. 31, 2016 0.000000 0.000000 0.00

Dec. 31, 2015 0.000000 0.000000 0.00

Reasons for acquisition and continued holding of this interest

To produce items made in plastic with sophisticated design and accessible cost for the middle income groups on an industrial scale.

A3NP Indústria e Comércio de Móveis S.A.

15.761.916/0001-31 - Subsidiary Brazil São Paulo State Sao Paulo Manufacture, sale, import and export of furniture and complementary items based on plastic

100.000000

Market value

Dec. 31, 2017 0.000000 0.000000 0.00 Book value Dec. 31, 2016 0.00

Dec. 31, 2016 0.000000 0.000000 0.00

Dec. 31, 2015 0.000000 0.000000 0.00

Reasons for acquisition and continued holding of this interest

To produce items made in plastic with sophisticated design and accessible cost for the middle income groups on an industrial scale.

Grendene Argentina S.A.

00.000.000/0000-00 - Subsidiary Argentina Buenos Aires Manufacture, sale, export and import of footwear and clothing items in general.

95.000000

Market value

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9.1 - Material non-current assets / 9.1.c - Interests in companies

Full company name CNPJ (Corporate Tax Nº) CVM Code Type of company Country of head office

State of head office Municipality of head office

Description of activities Issuer's interest, %

Business year Book value - change, % Market value –

change, %

Amount of dividends received (Reais)

Date Amount (Reais)

Dec. 31, 2017 0.000000 0.000000 0.00 Book value Dec. 31, 2016 1,362,000.00

Dec. 31, 2016 0.000000 0.000000 0.00

Dec. 31, 2015 0.000000 0.000000 0.00

Reasons for acquisition and continued holding of this interest

Grendene Argentina S.A. (Formerly Saddle Corp.) is a company constituted and organized under the laws of Argentina and functions as distributor of our products in the Argentinean market.

Grendene Argentina S.A.

00.000.000/0000-00 - Subsidiary Argentina Buenos Aires Manufacture, sale, export and import of footwear and clothing items in general.

95.000000

Market value

Dec. 31, 2017 0.000000 0.000000 0.00 Book value Dec. 31, 2017 0,.00

Dec. 31, 2016 0.000000 0.000000 0.00

Dec. 31, 2015 0.000000 0.000000 0.00

Reasons for acquisition and continued holding of this interest

Grendene Argentina S.A (Formerly Saddle Corp.) is a company constituted and organized under the laws of Argentina and functions as distributor of our products in the Argentinean market.

Grendene Argentina S.A.

00.000.000/0000-00 - Subsidiary Argentina Buenos Aires Manufacture, sale, export and import of footwear and clothing items in general.

95.000000

Market value

Dec. 31, 2017 0.000000 0.000000 0.00 Book value Dec. 31, 2015 3,871,000.00

Dec. 31, 2016 0.000000 0.000000 0.00

Dec. 31, 2015 0.000000 0.000000 0.00

Reasons for acquisition and continued holding of this interest

Grendene Argentina S.A (Formerly Saddle Corp.) is a company constituted and organized under the laws of Argentina and functions as distributor of our products in the Argentinean market.

Grendene UK Limited 00.000.000/0000-00 - Subsidiary England London Export, import and retail and wholesale sales in England of Grendene and other companies' products.

100.000000

Market value

Dec. 31, 2017 0.000000 0.000000 0.00 Book value Dec. 31, 2016 10,745,000.00

Dec. 31, 2016 0.000000 0.000000 0.00

Dec. 31, 2015 0.000000 0.000000 0.00

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9.1 - Material non-current assets / 9.1.c - Interests in companies

Full company name CNPJ (Corporate Tax Nº) CVM Code Type of company Country of head office

State of head office Municipality of head office

Description of activities Issuer's interest, %

Business year Book value - change, % Market value –

change, %

Amount of dividends received (Reais)

Date Amount (Reais)

Reasons for acquisition and continued holding of this interest

Grendene UK Limited is a company constituted and organized under the laws of the United Kingdom and functions as sales agent and distributor of our products.

Grendene UK Limited 00.000.000/0000-00 - Subsidiary England London Export, import and retail and wholesale sales in England of Grendene and other companies' products.

100.000000

Market value

Dec. 31, 2017 0.000000 0.000000 0.00 Book value Dec. 31, 2017 11,765,000.00

Dec. 31, 2016 0.000000 0.000000 0.00

Dec. 31, 2015 0.000000 0.000000 0.00

Reasons for acquisition and continued holding of this interest

Grendene UK Limited is a company constituted and organized under the laws of the United Kingdom and functions as sales agent and distributor of our products.

00.000.000/0000-00 - Subsidiary England London Export, import and retail and wholesale sales in England of Grendene and other companies' products.

100.000000

Grendene UK Limited 00.000.000/0000-00 - Subsidiary England London Export, import and retail and wholesale sales in England of Grendene and other companies' products.

100.000000

Market value

Dec. 31, 2017 0.000000 0.000000 0.00 Book value Dec. 31, 2015 19,012,000.00

Dec. 31, 2016 0.000000 0.000000 0.00

Dec. 31, 2015 0.000000 0.000000 0.00

Reasons for acquisition and continued holding of this interest

Grendene UK Limited is a company constituted and organized under the laws of the United Kingdom and functions as sales agent and distributor of our products.

Market value

Grendene USA, Inc. 00.000.000/0000-00 - Subsidiary United States Orlando Distribution of footwear to the largest retail chains and other retail operators in the USA; sales representative in the USA for manufacturers of footwear.

100.000000

Market value

Dec. 31, 2017 0.000000 0.000000 0.00 Book value Dec. 31, 2015 36,047,000.00

Dec. 31, 2016 0.000000 0.000000 0.00

Dec. 31, 2015 0.000000 0.000000 0.00

Reasons for acquisition and continued holding of this interest

Grendene USA, Inc. (Formerly Grendha Shoes Corp) is a company constituted and organized under the laws of the State of Delaware, United States, and functions as sales agent and distributor of our products in the US market.

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9.1 - Material non-current assets / 9.1.c - Interests in companies

Full company name CNPJ (Corporate Tax Nº) CVM Code Type of company Country of head office

State of head office Municipality of head office

Description of activities Issuer's interest, %

Business year Book value - change, % Market value –

change, %

Amount of dividends received (Reais)

Date Amount (Reais)

Grendene USA, Inc. 00.000.000/0000-00 - Subsidiary United States Orlando Distribution of footwear to the largest retail chains and other retail operators in the USA,

sales representative in the USA for manufacturers of footwear.

100.000000

Market value

Dec. 31, 2017 0.000000 0.000000 0.00 Book value Dec. 31, 2016 23,616,000.00

Dec. 31, 2016 0.000000 0.000000 0.00

Dec. 31, 2015 0.000000 0.000000 0.00

Reasons for acquisition and continued holding of this interest

Grendene USA, Inc. (Formerly Grendha Shoes Corp) is a company constituted and organized under the laws of the State of Delaware, United States, and functions as sales agent and distributor of our products in the US market.

Grendene USA, Inc. 00.000.000/0000-00 - Subsidiary United States Orlando Distribution of footwear to the largest retail chains and other retail operators in the USA, sales representative in the USA for manufacturers of footwear.

100.000000

Market value

Dec. 31, 2017 0.000000 0.000000 0.00 Book value Dec. 31, 2017 24,945,000.00

Dec. 31, 2016 0.000000 0.000000 0.00

Dec. 31, 2015 0.000000 0.000000 0.00

Reasons for acquisition and continued holding of this interest

Grendene USA, Inc. (Formerly Grendha Shoes Corp) is a company constituted and organized under the laws of the State of Delaware, United States, and functions as sales agent and distributor of our products in the US market.

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9.1 - Material non-current assets / 9.1.c - Interests in companies

Full company name CNPJ (Corporate Tax Nº) CVM Code Type of company Country of head office

State of head office Municipality of head office

Description of activities Issuer's interest, %

Business year Book value - change, % Market value –

change, %

Amount of dividends received (Reais)

Date Amount (Reais)

MHL Calçados Ltda 07.512.861/0001-06 - Subsidiary Brazil BA Teixeira de Freitas Manufacture, sale, exportation and importation of:

(i) (a) footwear and apparel items in general;

(b) components and parts for footwear, and apparel items in general;

(c) matrices and molds for the footwear industry, apparel items and plastic items of any type; PVC, resins, plastifying oils, EVA and other raw materials and inputs used for the manufacture of footwear and apparel items in general; accessories, gifts, and promotional materials associated with the products produced by the company.

(ii) Provision of services in areas including information technology, for data processing, including for third parties.

(iii) Importation of industrial machines and their accessories, equipment, special tools and devices related to the company's objects.

(iv) Holdings of equity interests in shares or share units in other companies in Brazil or elsewhere, including by means of investment of own funds or of proceeds of tax incentives.

99.990000

Market value

Dec. 31, 2017 0.000000 0.000000 0.00 Book value Dec. 31, 2015 13,369,000.00

Dec. 31, 2016 0.000000 0.000000 0.00

Dec. 31, 2015 0.000000 0.000000 0.00

Reasons for acquisition and continued holding of this interest

This company was formed with the same objects as the parent company Grendene S.A. The aim of the investment in this company is to increase the competitiveness of products, especially those for which the freight has a significant effect on cost. For reasons of logistics, it is producing footwear in a region that is much closer to the major centers of consumption.

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9.1 - Material non-current assets / 9.1.c - Interests in companies

Full company name CNPJ (Corporate Tax Nº) CVM Code Type of company Country of head office

State of head office Municipality of head office

Description of activities Issuer's interest, %

Business year Book value - change, % Market value –

change, %

Amount of dividends received (Reais)

Date Amount (Reais)

MHL Calçados Ltda 07.512.861/0001-06 - Subsidiary Brazil BA Teixeira de Freitas Manufacture, sale, export and import of:

(i) (a) footwear and apparel items in general;

(b)Components and parts for footwear, and apparel items in general.

(c) Matrices and molds for the footwear industry, apparel items and plastic items of any type; PVC, resins, plastifying oils, EVA and other raw materials and inputs used for the manufacture of footwear and apparel items in general; accessories, gifts, and promotional materials associated with the products produced by the company.

(ii) Provision of services in areas including information technology, for data processing, including for third parties.

(iii) Importation of industrial machines and their accessories, equipment, special tools and devices related to the company's objects.

(iv) Holdings of equity interests in shares or share units in other companies in Brazil or elsewhere, including by means of investment of own funds or of proceeds of tax incentives.

99.990000

Market value

Dec. 31, 2017 0.000000 0.000000 0.00 Book value Dec. 31, 2017 13,997,000.00

Dec. 31, 2016 0.000000 0.000000 0.00

Dec. 31, 2015 0.000000 0.000000 0.00

Reasons for acquisition and continued holding of this interest

This company was formed with the same objects as the parent company Grendene S.A. The aim of the investment in this company is to increase the competitiveness of products, especially those for which the freight has a significant effect on cost. For reasons of logistics, it is producing footwear in a region that is much closer to the major centers of consumption.

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9.1 - Material non-current assets / 9.1.c - Interests in companies

Full company name CNPJ (Corporate Tax Nº) CVM Code Type of company Country of head office

State of head office Municipality of head office

Description of activities Issuer's interest, %

Business year Book value - change, % Market value –

change, %

Amount of dividends received (Reais)

Date Amount (Reais)

MHL Calçados Ltda 07.512.861/0001-06 - Subsidiary Brazil BA Teixeira de Freitas Manufacture, sale, export and import of:

(i) (a) footwear and apparel items in general;

(b) Components and parts for footwear, and apparel items in general.

(c) Matrices and molds for the footwear industry, apparel items and plastic items of any type; PVC, resins, plastifying oils, EVA and other raw materials and inputs used for the manufacture of footwear and apparel items in general; accessories, gifts, and promotional materials associated with the products produced by the company.

(ii) Provision of services in areas including information technology, for data processing, including for third parties.

(iii) Importation of industrial machines and their accessories, equipment, special tools and devices related to the company's objects.

(iv) Holdings of equity interests in shares or share units in other companies in Brazil or elsewhere, including by means of investment of own funds or of proceeds of tax incentives.

99.990000

Market value

Dec. 31, 2017 0.000000 0.000000 0.00 Book value Dec. 31, 2016 13,701,000.00

Dec. 31, 2016 0.000000 0.000000 0.00

Dec. 31, 2015 0.000000 0.000000 0.00

Reasons for acquisition and continued holding of this interest

This company was formed with the same objects as the parent company Grendene S.A. The aim of the investment in this company is to increase the competitiveness of products, especially those for which the freight has a significant effect on cost. For reasons of logistics, it is producing footwear in a region that is much closer to the major centers of consumption.

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9.2 - Other material information Our principal intellectual property consists of our brand names. These include: Melissa, Rider, Grendha, Ipanema, Zaxy, Cartago, Pega Forte and Grendene Kids.

As well as our own brands, we have licenses for use of names and brands of Brazilian and international celebrities, and children's-market characters that are known in Brazil and internationally.

The Company owns the definitive registry of the patents that are more important for our production process, and we still have some patents, models of use and industrial designs at the registration stage. We also had registries outside Brazil relating to industrial patents and industrial designs (see Item 7.5.c).

We are also owners of domain names in Brazil and in the United States in relation to a great part of our principal products.

The subsidiary companies mentioned in Item 9.1.c. are unlisted and are valued by the equity method.

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10.1 - General conditions of finances, assets and liabilities

a. General conditions of finances, assets and liabilities

In management’s opinion the Company is in a solid economic and financial situation. The balances held in cash, cash equivalents and/or cash investments provide confidence that the Company has full conditions to honor all its financial commitments in the short and long term.

In the economic aspect the Company has shown capacity to earn profits even in adverse scenarios, remunerating capital invested in a way that we consider to be appropriate and distributing dividends that exceed the minimum mandatory dividends for more than 10 years.

The figures that evidence Grendene’s general financial and equity conditions for the business years 2015, 2016 and 2017 are given in the tables below, and complimented by items 10.1.b, 10.1.c, 10.1.d, 10.1.e, 10.1.f, 10.1.g, 10.1.h and 10.2 of this proposal.

Year (R$ ‘000)

Initial Stockholders1

equity Net profit Dividends Reinvestiment

Return on Stockholders’

equity

Final Stockholders1

equity 2015 2,232,649 551,223 275,925 275,298 24.7% 2,520,866

2016 2,520,866 634,492 351,383 283,109 25.2% 2,792,976

2017 2,792,976 660,929 377,773 283,156 23.7% 3,087,479

1) Stockholders’ equity adjusted by exclusion of the balance of dividends payable.

Liquidity 2015 2016 2017

General liquidity ratio 6.0 8.4 8.6

Current liquidity ratio 5.4 9.1 8.8

Quick ratio 4.6 8.1 8.0

Profitability 2015 2016 2017

Net margin 25.0% 31.0% 29.3%

Gross margin 48.5% 48.7% 48.9%

EBIT margin 18.2% 19.5% 20.7%

* Figures adjusted to exclude non-recurring effect in A3NP.

R$’000 2015 2016 2017

Borrowings (short-term and long-term – ST and LT) 212,825 125,372 123,627

Cash and cash equivalents and financial investments (ST and LT) 1,281,880 1,589,378 1,780,645

Assets

December 31, 2015

December 31, 2016

December 31, 2017

Cash and cash equivalents and financial investments (short-term and long-term)

Working capital (excluding Cash and cash equivalents and financial investments (ST and LT)

Non-current assets

47,6%

34,8%

17,6%

53,4%

30,5%

16,1%

54,7%

29,4%

15,9%

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10.1 - General conditions of finances, assets and liabilities

b. Capital structure and possibility of redemption of shares or share units, indicating:

Grendene’s capital structure does not depend on outside financing for conduct of the business. It finances its own capital expenditure and working capital from its own funds.

Liabilities: Current and non-current

December 31, 2015

December 31, 2016

December 31, 2017

Liabilities – Financial

Liabilities – Operational

Consolidated Stockholders’ equity

All Grendene’s shares are common shares. They are nominal, book-entry shares without par value and with no expected redemption.

i. Situations of redemption

Not applicable, because Grendene does not have any redeemable shares issued.

ii. Formula for calculation of the redemption value

Not applicable, because Grendene does not have any redeemable shares issued.

c. Payment capacity in relation to financial commitments assumed

Grendene has a comfortable and solid financial situation, and thus has full conditions to honor all its commitments.

7,0%7,1%

85,9%

3,9%6,3%

89,8%

3,5% 6,5

90,0%

1.282 1.5891.781

(213) (125) (124)

1.0691.464

1.657

(500)

0

500

1.000

1.500

2.000

December 31, 2015 December 31, 2016 December 31, 2017

R$ m

illi

on

Borrowings (ST and LT)

Cash and cash equivalents and financial investments (ST and LT)

Net cash

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10.1 - General conditions of finances, assets and liabilities

R$’000 2015 2016 2017 2014 2015 2016

Current assets 1,908,661 2,492,979 2,846,997 1,906,527 1,908,661 2,492,979

Non-current assets 1,136,981 760,841 729,011 775,486 1,136,981 760,841

Current liabilities 354,500 275,383 322,074 282,003 354,500 275,383

Non-current liabilities 74,382 56,367 36,325 72,076 74,382 56,367

Consolidated Stockholders’ equity 2,616,760 2,922,070 3,217,609 2,327,934 2,616,760 2,922,070

As can be seen in the Company’s Statement of Financial Position, and shown in the table above, the Company’s cash position (cash, cash equivalents and cash investments) is higher than the total of short- and long-term liabilities, which makes it improbable that any external economic or financial situation should affect its capacity to pay its commitments.

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

Grendene has a significant net cash position (balance of cash, cash equivalents and financial investments less short and long-term loans) and has the capacity to finance its present operations and investments with its own funds. However, the Company may have recourse to financing sources whenever the costs of those funds are sufficiently low in the management’s opinion, to generate value for its stockholders.

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

Grendene does not have deficiencies in liquidity, has not had such deficiencies in the past and does not expect that this situation could occur. Its working capital investments are financed with its own funds.

f. Level of indebtedness, and characteristics of such debt

i. Contracts for significant borrowings

Borrowings are stated at contractual amounts, plus agreed-upon charges including interest and monetary restatement or foreign exchange variations. After initial recognition they are measured at amortized cost, using the effective interest rate method.

The table below presents the composition of our bank debt (fixed assets plus working capital) on December 31, 2015, 2016 and 2017.

Consolidated Index Interest rate (p.a.) 2015 2016 2017

In local currency

Property, plant and equipment Fixed 4.50%, 4.31% and 4.31% 61,651 53,039 42,224

Proapi – Provin TJLP - 24,594 14,249 2,571

86,245 67,288 44,795

In foreign currency

Working capital Argentinean pesos 26.88% and 27.75% 35,414 7,814 -

Working capital – ACE US Dollar + 2.24%, 3.87% and 2.30% 91,166 50,270 78,832

126,580 58,084 78,832

Total borrowings 212,825 125,372 123,627

(-) Total current liabities (141,652) (70,734) (89,666)

Total non-current liabilities 71,173 54,638 33,961

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10.1 - General conditions of finances, assets and liabilities

This table shows the timetable of maturities of long-term loans and financings on December 31, 2017:

Portions of long-term indebtedness

Maturities 2019 2020 2021 2022 Total

Bank financing 10,708 10,341 10,341 - 31,390

Proapi - - 2.389 2,389

Provin 49 133 182

Total 10,708 10,390 10,341 5,522 33,961

Financing – Fixed assets

In 2014 the Company contracted a financing with Banco do Nordeste do Brasil S.A. through FNE – The Constitutional Fund of the Northeast, for acquisition of goods and services for construction of industrial plant. The disbursement of funds occurred in installments by the bank during the year 2014 and 2015 (Balance R$ 41.4 million in 2017, R$ 51.7 million in 2016 and R$ 59.9 million in 2015). Final maturity of the transaction is December 26, 2021.

The other financings for fixed assets were contracted for acquisition of industrial equipment (R$ 0.8 million in 2017, R$ 1.3 million in 2016 and R$ 1.8 million in 2015).

Financing – Working capital – ACE

The Company has contracted loans for its export operations in the ACE modality (Advances on Delivered Shipping Documents). These transactions consist of an advance of the corresponding amount in Reais of shipped exports.

Financing – Proapi and Provin

The Company enjoys tax incentive benefits in relation to its activities located in the State of Ceará, through obtaining of financing from the FDI - Industrial Development Fund of Ceará, through a financial agent as intermediary, established by that fund. These financings are based on the ICMS tax payable (Provin) and products exported (Proapi), measured monthly. The financings are to be settled within 36 to 60 months after their disbursement.

It is the Company’s Management’s understanding that recording of the benefit of the reduction of amounts payable takes place at the moment of obtaining of the financings, so as to be able to reflect most appropriately the accrual method of reporting, since the costs of the ICMS tax and of the exports, relating to the transactions that enjoy the incentives, are also registered at the same time as the benefits.

At December 31, 2017, portions of this financing that are not subject to tax incentives amounting to R$ 2,571 (R$ 14,249 in 2016 and R$ 24,594 in 2015) are recorded as current and non-current liabilities.

Under the Proapi program, financings are given in the amount of 11% of the FOB value exported, payable in 60 months, attracting interest at the TJLP (long-term interest rate). At maturity the Company pays 10% of the amount of the debtor balance of the financing, and the remaining 90% is exempted from payment, representing a net incentive of 9.9% of the FOB value exported.

Guarantees

The guarantees linked to the loans and financings are: a) chattel mortgage on machines and equipment acquired; b) land sites and buildings; and c) surety guarantee given by the managers of the Company. The existing guarantees are for the amounts financed.

ii. Other long-term relationships with financial institutions

The Company does not have long-term relationships with financial institutions other than the obligations related to the transactions reported above.

iii. Degree of subordination between the debts

There is no degree of subordination between the debts.

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iv. Any restrictions imposed on the issuer, especially in relation to limits of indebtedness and contracting of new debt, distribution of dividends, disposal of assets, issuance of new securities and/or disposal of stockholding control

There are no restrictions imposed on the Company in relation to the limits of indebtedness and contracting of new debts, distribution of dividends, disposal of assets, issuance of new securities or disposal of stockholding control.

g. Limits of use of the financings already contracted

There are no financings that have been contracted and not been used.

h. Significant alterations in each item of the financial statements

The Company’s individual and consolidated financial statements for the business years ended December 31, 2015, 2016 and 2017 have been prepared based on accounting practices adopted in Brazil and the rules of the Brazilian Securities Commission (CVM), obeying the accounting directives arising from the Corporate Law (Law 6404/76), and also in accordance with International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB).

In Management’s opinion there are no significant changes in the consolidated financial statements of the Company in relation to the business years 2015, 2016 and 2017.

Description of the principal accounts of the consolidated Balance Sheet

Remarks on the main accounts of Assets

Cash, cash equivalents and cash investments

Short and long-term cash, cash equivalents and cash investments totaled R$ 1,281.9 million on December 31, 2015, R$ 1,589.4 million on December 31, 2016 and R$ 1,780.6 million on December 31, 2017. Cash and banks are represented by non-interest-bearing bank deposits. Financial investments classified as cash equivalents refer to short-term investments redeemable no later than three months from the acquisition date.

Financial investments comprise: Bank Certificates of Deposit (CDBs), Debentures, Real-denominated Bank Debt Notes (LFINs) and Government Debt Securities (NTNs), and are classified as ‘Securities at fair value through profit or loss’, and ‘Held-to-maturity investments’, according to the Company’s investment strategy.

This table shows the Company’s cash situation on the following dates:

R$’000 12/31/15 12/31/16 12/31/17

Net cash from operations (a) 442,718 566,471 525,726

Net cash from investment activities (b) (198,585) (174,737) (125,464)

Net cash generated (invested) in redemption (making) of financial investments (125,360) (103,269) (17,935)

Funds allocated to Investments in fixed assets (73,225) (71,468) (107,529)

Net cash used in financing activities (c) (249,172) (392,356) (390,806)

Reduction / increase in cash and cash equivalents (a + b + c) (5,039) (622) 9,456

On December 31, 2017, Cash and cash equivalents and cash investments (short and long-term) were 49.8% of Total assets (compared to 48.8% at the end of 2016 and 42.1% at the end of 2015).

Accounts receivable from customers and Inventories

The lines Accounts receivable from clients and Inventories totaled in aggregate R$ 1,116.5 million on December 31, 2015, R$ 1,021.6 million on December 31, 2016 and R$ 1,129.6 million on December 31, 2017.

On December 31, 2015, 2016 and 2017 the average periods for receivables in the domestic market were – respectively – 91, 90 and 89 days, and in the export market 85, 81 and 75 days, respectively.

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10.1 - General conditions of finances, assets and liabilities

Stockholders’ equity

Stockholders’ equity totaled R$ 3,217.6 million on December 31,2017, R$ 2,922.1 million on December 31, 2016 and R$ 2,616.8 million on December 31, 2015. The table below shows the evolution of the Company’s consolidated Stockholders’ equity.

R$’000 Change in Stockholders’ Equity

Balances at December 31, 2014 2,327,934

Net profit for the year 539,311

Exchange differences on subsidiaries outside Brazil 16,479

Acquisition of treasury shares (3,034)

Sale of treasury shares for exercise of stock purchase option 8,016

Expenses on stock options purchase and subscription plan 3,543

Dividends distributed (260,489)

Interest on Equity (counted as part of total dividends) (15,000)

Balances at December 31, 2015 2,616,760

Net profit for the year 633,955

Exchange differences on subsidiaries outside Brazil (11,016)

Losses in interests of non-controlling Stockholders (125)

Acquisition of treasury shares (11,020)

Sale of treasury shares for exercise of stock purchase option 6,416

Expenses on stock options purchase and subscription plan 5,283

Dividends distributed (183,683)

Interest on Equity distributed (115,000)

Interest on Equity (counted as part of total dividends) (19,500)

Balance at December 31, 2016 2,922,070

Net profit for the year 660,903

Exchange differences on subsidiaries outside Brazil 1,642

Exchange losses on investments 7,774

Losses in interests of non-controlling stockholders (46)

Acquisition of treasury shares (9,837)

Sale of treasury shares for exercise of stock purchase option 5,472

Expenses on stock options purchase and subscription plan 6,368

Dividends distributed (216,737)

Interest on Equity distributed (140,500)

Interest on Equity (counted as parto f total dividends) (19,500)

Balance at December 31, 2017 3,217,609

Working capital

The table below shows working capital:

R$’000 12/31/15 12/31/16 12/31/17

Working capital (Current assets – Current liabilities) 1,554,161 2.217.596 2,524,923

Working capital / Total capital 51.0% 68,2% 70.6%

Working capital / Net sales revenue 70.6% 108,4% 112.1%

Description of the principal accounts of the consolidated income Profit and loss account

See item 10.2, Sub-clause 'a'.

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10.2 - Operational profit and Financial revenue (expenses)

a. Results of operations of the issuer, especially:

i. Description of any important components of revenue

Gross Sales revenue

Grendene’s revenue from the domestic market was 12.6% higher in 2017 than 2016, sustained by a small recovery in the economy, and gains in market share.

The robust 12.5% growth in volume of pairs exported also does not completely translate into higher revenue, due to the less favorable exchange rate, and the ending of the Proapi export incentive support system.

R$ mn 2015 2016 2017 Change 16/17

Consolidated gross revenue 2,631.8 2,483.0 2,727.7 9.9%

Domestic market 1,899.8 1,870.3 2,106.6 12.6%

Exports 732.0 612.7 621.1 1.4%

Exports, US$ 219.3 175.5 194.6 10.9%

Million of pairs 2015 2016 2017 Change 16/17

Volumes 180.4 163.6 171.4 4.8%

Domestic market 134.5 123.6 126.4 2.2%

Exports 45.9 40.0 45.0 12.5%

R$ 2015 2016 2017 Change 16/17

Average price 14.58 15.18 15.92 4.9%

Domestic market 14.12 15.13 16.67 10.2%

Exports 15.91 15.33 13.81 (9.9%)

Exports, US$ 4.78 4.39 4.33 (1.4%)

Net sales revenue

R$ million 2015 2016 2017 Change 16/17

Gross Sales revenue 2,631.8 2,483.0 2,727.7 9.9%

Domestic market 1,899.8 1,870.3 2,106.6 12.6%

Exports 732.0 612.7 621.1 1.4%

Sales deductions (429.0) (437.9) (475.7) 8.6%

Returns and taxes on Sales (336.4) (346.7) (372.6) 7.5%

Discounts granted to customers (92.6) (91.2) (103.1) 13.0%

Net Sales revenue 2,202.8 2,045.1 2,252.0 10.1%

Cost of goods sold (COGS)

In recent years, with all the FX volatility, increase in the minimum wage and inflationary pressures in Brazil, our unit cost has grown at the rate of 3.3% p.a. (CAGR from 2015 through 2017), much lower than the inflation rates in the period and lower than the 4.5% p.a. growth in gross revenue per pair. Over the period 2015-2017, COGS grew at 0.7% p.a., less than the growth of 1.1% p.a. in net revenue

Cost discipline has played a fundamental role in our results.

R$ million 2015 2016 2017 Change 16/17

Cost of goods sold 1,134.9 1,048.6 1,151.2 9.8%

R$ per pair 2015 2016 2017 Change16/17

Cost of goods sold per pair 6.29 6.41 6.71 4.7%

Gross profit

Gross profit accompanied the recovery in revenue – growing 10.5% YoY in 2017, with gross margin up 0.2 p.p. in the year. It has been a significant achievement that we have kept our gross margin above 48% – and broken one more record for gross margin this year, in a context of depressed consumption and increased taxes. This has been made possible by our considerable efforts in productivity, which has made our operation more robust and resilient.

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10.2 - Operational profit and Financial revenue (expenses) In our opinion, the major highlight of Grendene in recent years has been its industrial performance. In spite of the pressures of adverse macroeconomic situations, inflation, wage policy, higher taxes and the exchange rate, we have successively increased our gross margins and ensured good results.

R$ million 2015 2016 2017 Change 16/17

Gross profit 1,067.9 996.5 1.100.8 10.5%

Gross margin 48.5% 48.7% 48.9% 0.2 p.p.

Operational expenses (SG&A)

Selling expenses

Selling expenses were slightly lower than in the previous year. Over the period, Grendene’s selling expenses have remained around 24% of net revenue, and are predominantly variable such as freight, licensings, commissions, advertising and marketing.

R$ million 2015 2016 2017 Change 16/17

Selling expenses 523.7 490.6 525.8 7.2%

% of net sales revenue 23.8% 24.0% 23.3% (0.7 p.p.)

Advertising expenses

Expenses on advertising and marketing as a percentage of net revenue were slightly lower:

R$ million 2015 2016 2017 Change 16/17

Advertising expenses (a) 148.9 125.2 125.6 0,3%

% of net sales revenue 6.8% 6.1% 5.6% (0.5 p.p.)

Strategic brand projects (b) 6.7 7.3 7.6 4.0%

Total (a + b) 155.6 132.5 133.2 0.5%

% of net sales revenue 7.1% 6.5% 5.9% (0.6 p.p)

General and administrative expenses (G&A)

General and administrative expenses were 6.3% lower in 2017 than 2016, and were 4.1% of net revenue – still higher than the ratio that we had aimed for.

R$ million 2015 2016 2017 Change 16/17

G&A expenses 101.7 97.5 91.3 (6.3%)

% of net sales revenue 4.6% 4.8% 4.1% (0.7p.p.)

Net financial revenue (expenses)

Grendene has a solid cash position, and financial revenues are an important part of its net profit. The aim of its foreign exchange transactions is hedging, mainly of receivables from exports. In these transactions Grendene is vendor of dollars, and the aim is that their net result in the long term should be very close to zero. Thus the result of Financial revenue (expenses) is basically influenced by the interest rate (Selic), and the average level of cash held by the Company.

In 2017 we report net financial revenues of R$ 238.5 mn. This is 11.2% less than in 2016, as a result of the major fall in interest rates in the Brazilian economy in the year, as shown:

R$ million 2015 2016 2017 Change 16/17

Financial revenues 421.3 396.7 312.5 (21.2%)

Interest received from clientes 2.9 2.2 2.2 2.9%

Revenue from FX derivatives – BM&FBOVESPA 66.3 49.1 30.0 (38.9%)

Revenue from cash investments 168.2 207.7 169.8 (18.3%)

Gains on FX variation 118.8 69.7 34.5 (50.5%)

Adjustments to present value (AVP) 61.0 64.7 73.0 12.8%

Other financial revenues 4.1 3.3 3.0 (8.0%)

Financial expenses (239.0) (128.2) (74.0) (42.2%)

Operational expenses on FX derivatives – BM&FBOVESPA (123.6) (11.6) (19.8) 71.3%

Cost of financings (20.5) (18.3) (10.9) (40.8%)

Expenses of FX variation (80.3) (82.4) (31.2) (62.1%)

Cofins and Pis taxes on Financial revenues (5.0) (11.0) (8.3) (23.9%)

Other financial expenses (9.6) (4.9) (3.8) (23.2%)

Net financial revenue (expenses) 182.3 268.5 238.5 (11.2%)

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10.2 - Operational profit and Financial revenue (expenses)

In the consolidated financial statements discounts given to clients are classified as deductions from sales.

Net profit

In the last three years net profit has grown at a CAGR of 9.5% p.a., with increase in all the Company’s margins: gross margin (0.4 p.p.), operational margin (2.5 p.p.) and net margin (4.3 p.p.). In 2017, with the lower Financial revenue (expenses), even with the 16.5% increase in Ebit, net margin fell by 1.7 p.p., to 29.3%.

R$ mn 2015 2016 2017 Change 17/16

Net profit for the year, formal accounting 551.2 634.5 660.9 4.2%

Net margin 25.0% 31.0% 29.3% (1.7 p.p.)

b. Changes in revenues attributable to changes in prices, exchange rates, inflation, changes in volumes and introduction of new products and services

Our operational revenues are affected by changes in volumes of pairs sold, gross revenue per pair, and, for exports, the exchange rate. The impacts of these items are shown in these tables:

Gross revenue (R$’000) 2015 R$

2016 R$

Change 15/16 2017 R$

Change 16/17

R$ % R$ %

Domestic Market (DM) R$ 1,899,226 1,870,373 (28,853) (1.5%) 2,106,549 236,176 12.6%

Exports (EXP) R$ 730,761 612,665 (118,096) (16.2%) 621,126 8,461 4.1%

Exports US$ 219,349 175,498 (43,851) (20.0%) 194,588 19,090 10.9%

Total 2,629,987 2,483,038 (146,949) (5.6%) 2,727,675 244,637 9.9%

Sales volume (thousand of pairs)

2015 2016 Change 15/16

2017 Change 16/17

Pairs % Pairs %

Domestic Market (DM) 134,474 123,595 (10,879) (8.1%) 126,375 2,780 2.2%

Exports (EXP) 45,926 39,962 (5,964) (13.0%) 44,971 5,009 12.5%

Total 180,400 163,557 (16,843) (9.3%) 171,346 7,789 4.8%

Average price (in R$) 2015 R$

2016 R$

Change 15/16 2017 R$

Change 16/17

R$ % R$ %

Domestic Market (DM) R$ 14.12 15.13 1.01 7.2% 16.67 1.54 10.2%

Exports (EXP) R$ 15.91 15.33 (0.58) (3.6%) 13.81 (1.52) (9.9%)

Exports US$ 4.78 4.39 (0.39) (8.2%) 4.33 (0.06) (1.4%)

Total 14.58 15.18 0.60 4.1% 15.92 0.74 4.9%

Changes, in Reais, in total gross revenue from sales in the domestic and export markets, resulting from changes in volumes and average prices

2015 – 2016 2016 – 2017

DM volume – (10,879 x R$ 14.12) (R$ 153,648) DM volume – (2,780 x R$ 15.13) R$ 42,066

EXP volume – (5,964 x R$ 15.91) (R$ 94,897) EXP volume – (5,009 x 15.33) R$ 76,774

Change in revenue at 2016 prices (R$248,545) Change in revenue at 2017 prices R$ 118,840

Change gross rev. per pair – DM – (R$ 1.01 x 123,595)

R$ 124,795 Change gross rev. per pair – DM – (R$ 1.54 x 126,375)

R$ 194,110

Change gross rev. per pair – EXP – (R$ 0.58 x 39,962)

(R$ 23,199) Change gross rev. per pair – EXP – (R$ 1.52 x 44,971)

(R$ 68,313)

Change in revenue at 2016 volumes R$ 101,596 Change in revenue at 2017 volumes R$ 125,797

Total (R$ 146,949) Total R$ 244,637

Changes, in US$, in total gross revenue from sales in the domestic and export markets, resulting from changes in volumes and average prices

2015 – 2016 2016 – 2017

EXP volume – (5,964 x US$ 4.78) (US$ 28,485) EXP volume – (5,009 x US$ 4.39) US$ 21,998

Change in revenue at 2015 prices (US$ 28,485) Change in revenue at 2016 prices US$ 21,998

Change gross rev. per pair – EXP – (R$ 0.39 x 39,962)

(US$ 15,366) Change gross rev. per pair – EXP – (US$ 0.06 x 44,971)

(US$ 2,908)

Change in revenue at 2016 volumes (US$ 15,366) Change in revenue at 2017 volumes (US$ 2,908)

Total (US$ 43,851) Total US$ 19,090

The business model adopted by Grendene covers operation in markets affected by fashion, where the company, as a competitive differential, regularly presents a large quantity of new models in each period. Each model offered by the company is part of a

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10.2 - Operational profit and Financial revenue (expenses) collection the average life of which is between approximately 90 and 180 days. Thus, in a typical year between 95% and 98% of revenue comes from new products. The products are essentially manufactured under request from customers.

c. Impact of inflation, of the variation in prices of principal inputs and products, of the exchange rate and of interest rates, on the issuer’s operational result and financial result

Hence, each quarter, Grendene presents new collections, proposing to the market a new basis of prices (for each new collection). In this business model, any changes in costs are passed through to final prices whenever demand for these products, and consumers’ purchasing power, so permits. This being so, inflation affects our result, because it affects the income that the consumer has available for consumption of our products. Our principal inputs are commodity products that are usually priced in dollars in the international market.

The exchange rate influences our costs because it affects the prices in Reais of these commodity products when their prices are translated into Reais. However this is not a linear relationship, since the price of commodity products in dollars fluctuates in accordance with supply and demand in the international market; and also when the Brazilian Real appreciates, the price of commodity products in Reais becomes cheaper – although in these cases there is usually also a change in the price of the commodity products in dollars compensating a part of this effect. At the same time, the exchange rate affects our exports, since the great majority of our costs are in Reais.

Interest rates do not affect the Company’s operational result: they only affect the line Financial revenue (expenses). The Company keeps a significant balance in cash and cash equivalents and financial investments (short- and long term) – that on December 31, 2017 was R$ 1,780.6 million (R$ 1,589.4 on December 31, 2016 and R$ 1,281.9 million on December 31, 2015). These funds, basically, are invested in the financial markets, yielding interest at rates close to the Selic rate. Any changes in interest rates in the market will affect the remuneration of these funds.

Indirectly raising the interest rate may affect the purchasing power of our customers.

The table below shows the changes for the items listed:

2015 2016 Change 15/16 2017 Change 16/17

Gross revenue per pair – DM – R$ R$ 14.12 R$ 15.13 7.2% R$ 16.67 10.2%

Gross revenue per pair – EXP – R$ R$ 15.91 R$ 15.33 (3.6%) R$ 13.81 (9.9%)

Gross revenue per pair – EXP – US$ US$4.78 US$4.39 (8.2%) US$4.33 (1.4%)

Gross revenue total – R$ R$ 14.58 R$ 15.18 4.1% R$ 15.92 4.9%

COGS per pair – R$ R$ 6.29 R$ 6.41 1.9% R$ 6.71 4.7%

FX rate – R$ / US$, end of the year R$ 3.9048 R$ 3.2591 (16.5%) R$ 3.3080 1.5%

FX rate – R$ / US$, average of the year R$ 3.3315 R$ 3.4901 4.8% R$ 3.1920 (8.5%)

IGP-M inflation index 7.1907% 0.5326%

IPCA inflation index 6.2881% 2.9473%

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10.3 – Events with material effects on the financial statements – past, or expected

a. Introduction or disposal of an operational segment

In 2015, 2016 and 2017 there was no introduction or disposal of any operational segment in our activities that caused, or is expected to cause in the future, any significant effect on the Company’s financial statements or results.

b. Constitution, acquisition or disposal of a stockholding interest

In 2015 and 2017 we did not constitute, acquire or dispose of any materially significant stockholding interest that has caused a material effect on the Company’s financial statements or results.

In 2016 Grendene acquired the shares in the subsidiary A3NP Indústria e Comércio de Móveis S.A. from its other partners, by immaterial value, thus becoming holder of 100% of the share capital of that company. In 2017, Grendene dispose the company Grendene Argentina S.A., pursuant to the purchase agreement on 9 th June 2017. In 2018, Grendene dispose the company A3NP Indústria e Comércio de Móveis S.A., pursuant to the purchase agreement on 21st February, 2018. c. Non-usual events or operations

We provisioned as a loss the total of our investments in in the subsidiary A3NP, resulting in an accounting effect of R$ 52 million in 2015 business year, since we cannot guarantee that there will be investors interested in our equity holding in that company. This loss has no effect on cash in the year, nor in the future, and is non-recurring.

In 2016 and 2017, there were no non-usual events or operations in relation to the Company and/or its activities.

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10.4 - Significant changes in accounting practices – Qualifications or emphases in Auditors' Opinion

a. Significant changes in accounting practices

There were no changes, from the financial statements of December 31, 2015, 2016, and 2017, in the accounting policies and method of measurement adopted in the preparation of the individual and consolidated financial statements.

The Company’s individual and financial statements were prepared based on accounting practices adopted in Brazil and rules of the Brazilian Securities Commission (CVM), obeying the accounting guidelines arising from the Corporate Law (Law 6404/76) and also in accordance with the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB).

The Company has adopted all the rules, revisions of rules and interpretations issued by IASB which are in effect for the financial statements at December 31, 2015, 2016 and 2017.

Standards and interpretations of standards not yet in effect

The standards that will be in effect for the year beginning January 1st , 2018 are as follows:

IFRS 9 – Financial Instruments: In July 2014, the IASB issued the final version of IFRS 9 – Financial instruments (CPC 48 – Instrumentos Financeiros), which replaces IAS 39 – Financial Instruments: Recognition and Measurement and all prior versions of IFRS 9. IFRS 9, which is effective for accounting periods beginning on or after January 1st , 2018, brings together three aspects of accounting for financial instruments: classification and measurement, impairment, and hedge accounting.

IFRS 15 – Revenue from contracts with customers: IFRS 15 (CPC 47 – Revenue from contracts with customers), issued in May 2014 and altered in April 2016, establishes a five step model for accounting for revenues arising from contracts with clients. Under IFRS 15, revenue is recognized at an amount which reflects the consideration to which an entity expects to be entitled in exchange for transfer of goods or services to a client.

IFRS 2 – Share-based payment – Alteration to IFRS 2: The IASB issued alterations to IFRS 2 – Share-based payment – relating

to 3 main areas: the effects of vesting conditions on the measurement of a cash-settled share-based payment transaction; the classification of share-based payment transactions with net settlement features for withholding tax obligations; and the accounting where a modification to the terms and conditions of a share-based payment transaction changes its classification from cash-settled to equity-settled.

The amendments are effective for accounting periods beginning on or after January 1st, 2018. The Company plans to adopt the new form on the effective date, and does not foresee any significant impact on its financial statements arising from these changes.

Some accounting pronouncements (new, or revisions of pronouncements currently in force) have been revised by the IASB, and have not yet come into effect for the business year ended December 31, 2017:

IFRS Corresponding CPC Effective

IFRS 16 – Leases CPC 06 (R2) 2019

IFRIC Interpretation 23 – Uncertainty over Income Tax Treatments In preparation 2019

IFRS 17 – Insurance Contracts In preparation 2021

The rules, amendments to rules and interpretations of IFRS standards are effective for accounting periods indicated in the above table. The Company’s prior assessment is that they will not result in any impact on the financial statements.

There are no other rules and interpretations issued and not yet adopted which, in the opinion of Management, could have a material effect on the profit or net equity reported by the Company.

b. Significant effects of the changes in accounting practices

In the opinion of Management, there are no other rules or interpretations issued and not yet adopted that might have a significant impact on the Company’s published net profit or equity position.

c. Qualifications or emphases in the Auditor’s Opinion

There are no qualifications or emphases in the Auditor’s Opinion.

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10.5 - Critical accounting policies

The main assumptions related to sources of uncertainty in future estimates and other important sources of uncertainty in estimates at the end of the reporting period, involving a significant risk of causing an adjustment to the carrying amounts of assets and liabilities within the next financial year, are presented below.

Impairment of non-financial assets: An impairment loss is recognized when the carrying amount of an asset or cash-generating unit exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell and its value in use. The calculation of fair value less costs to sell is based on available information on sales of similar assets or market prices, reduced of costs incurred to carry out the sale. The value-in-use calculation is based on the discounted cash flow model. Cash flows derive from estimates of results for the following five years and do not include restructuring activities to which the Company is not yet committed or significant future investments that will improve the asset base of the cash generating unit subject to test. The recoverable amount is influenced by the discount rate used under the discounted cash flow method, as well as by the expected future cash receipts and the growth rate used for extrapolation purposes.

Taxes: Tax regulations in Brazil are complex, which raises uncertainties as to their interpretation and to the amount and timing of future taxable profits. Accordingly, any differences between actual results and assumptions adopted, or future changes in these assumptions, could require future adjustments to the tax credits and expenses already recognized. The Company did not recognize a provision in this respect based on several factors, such as experience of past tax audits, diverging interpretations of tax regulations, and systematic assessments carried out jointly by the Company's management and its tax advisors.

Fair value of financial instruments: When the fair value of financial assets and liabilities stated in the balance sheet cannot be obtained from active markets, it is determined using valuation techniques, including the discounted cash flow method. The data for these methods is based on those practiced in the market, whenever possible. However, when this is not possible, a certain level of judgment is required to establish the fair value. Judgment includes considerations on data utilized, such as liquidity risk, credit risk and volatility. Changes in assumptions concerning these factors could affect the reported fair value of the financial instruments.

Provisions for labor, tax and civil risks: The assessment of the likelihood of loss includes the evaluation of available evidence, the hierarchy of laws, available case law, recent court decisions and their importance in the legal system, as well as the opinion of outside legal advisors. Provisions are reviewed and adjusted to take into consideration changes in circumstances, such as applicable statute of limitation periods, conclusions arising from tax audits or additional exposures identified based on new issues or court decisions.

Other significant items subject to estimates include: the selection of useful lives of property, plant and equipment and intangible assets; estimated losses on doubtful receivables; punctuality discounts estimated; estimated losses for obsolete inventory; deferred income tax and social contribution tax; rates and periods used to determine the present value adjustment of certain assets and liabilities; fair value of share-based payment; and financial instrument sensitivity analyses.

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10.6 – Material items not evidenced in the financial statements a. Assets and liabilities held by the Issuer, directly or indirectly, that do not appear in its balance sheet (off-

balance sheet items), such as:

i) Operational leasing transactions, as lessor or lessee

Not applicable

ii) Portfolios of receivables written off on which the entity maintains risks and responsibilities, including respective liabilities

Not applicable

iii) Contracts for future purchase and sale of products or services

Not applicable

iv) Construction contracts that have not been terminated

Not applicable

v) Contracts for future receipts of financings

Not applicable

b. Other items not evidenced in the financial statements

The Company does not maintain any operations, transactions, contracts, obligations or other types of commitments with subsidiaries that are not consolidated or other transactions capable of generating a significant effect, in the present or the future, on its financial situation, and/or changes in its financial situation, revenues or expenses, operational results, liquidity, capital expenditure or capital resources that are not recorded in its Statement of financial position (Balance sheet).

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10.7 - Comments on the items not evidenced in the financial statements There are no other material items that are not evidenced in our financial statements.

a. How such items changed or could change the revenue, expenses, operational result, financial expenses or other items of the financial statements of the Issuer

Not applicable

b. The nature and purpose of the transaction

Not applicable

c. The nature and amount of the obligations assumed and of the rights generated in favor of the Issuer as a result of the transaction

Not applicable

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10.8 - Business plan

a. Capital expenditure, including:

i) Quantitative and qualitative description of the investments in progress, and of the investments foreseen

On December 31, 2015, 2016 and 2017 the largest investments were in maintenance of industrial buildings, replacement of fixed assets, and acquisition of new equipment for modernization of the manufacturing plant and better efficiency of production.

This table shows the investments in the respective years:

R$ ’000 2015 2016 2017 Change, %, 2016 to 2017

Investments 73.2 71.5 107.5 50.4%

In 2018 our forecast is investment of R$ 110 and R$ 120 million in maintenance of our production capacity.

The quantitative and qualitative descriptions of the investments in progress and of the investments planned are given in items 10.8.b and 10.8.c.

ii. Sources of financing of the investments

The Company is in a position to finance all the investments with its own funds.

iii. Significant disinvestments in progress, and disinvestments planned

In 2017, we closed down our own distribution operation in Argentina, and now distribute through third parties, as in other countries. Also in 2017, our subsidiary operating in the furniture business sold all its assets, paid its liabilities and closed its operations in Italy. In a subsequent event, at the beginning of 2018 the company A3NP, a wholly-owned subsidiary of Grendene S.A. which had been formed to operate in the furniture sector, was sold (pursuant to a decision by the Executive Board taken at a meeting held on February 21, 2018 and authorization for sale given by the Board of Directors at its meeting of February 25, 2016, when the total loss of this investment was recognized by the company, as previously reported) for an insignificant amount, and without any impact on the Company’s consolidated results.

b. Provided they have been published, indicate the acquisition of plants, equipment, patents or other assets that are expected to materially influence the issuer’s productive capacity

We do not have any plans for acquisition of industrial plant, equipment, patents or other assets that are likely materially to influence our productive capacity.

c. New products and services, indicating:

Grendene operates in the sector of footwear, with strong components of fashion, and its business model is similar to that which is known in the market as ‘fast fashion’, which consists of launch of many products in a year, comprising various collections. Thus, Grendene’s portfolio of products is entirely renewed with each successive period of 90 to 180 days.

To guarantee the success and acceptance of these collections Grendene continually accompanies the market, keeping close communication with the points of sale, and carries out market research with the target consumers on its proposals for launches. Participation in many Brazilian and international fairs, where the reactions of purchasers in relation to the products can be observed and tested, is also a part of this effort.

i. Description of research in progress already published

Grendene does not disclose work in progress, due to the characteristics of its business, but shows the result in the form of products in its launches, which usually take place during participations in fairs and events.

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10.8 - Business plan

ii. Total amounts spent by the issuer in research for development of new products or services

R$ mn 2015 2016 2017 Change, 2016 to 2017

Investment in research & development of new products 49.5 52.1 54.6 4.7%

iii. Projects in development already disclosed

See items 10.8.b and 10.8.c.

iv. Total amounts spent by the issuer in development of new products or services

We do not distinguish these expenses from those presented in item 10.8.c.ii.

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10.9 – Other factors with material influence

There are no other factors that significantly influenced the operational performance and which have not been identified or commented on in the other items of this section.

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11.1 – Guidance forecasts and assumptions

For the full year, both gross revenue and net profit were slightly below the band indicated by our long-term expectations (for a nine-year period), as follows:

Performance: CAGR (compound average growth rate), 2008 – 2017

R$ mn 2008 2009 2010 2011 2012 2013 2014* 2015* 2016 2017 CAGR

Gross revenue 1,576.0 1,819.4 1,998.6 1,831.6 2,324.5 2,711.4 2,719.4 2,630.0 2,483.0 2,727.7 6.3%

Y-o-Y change 15.4% 9.9% (8.4%) 26.9% 16.6% 0.3% (3.3%) (5.6%) 9.9%

Net profit 239.4 272.2 312.4 305.4 429.0 433.5 493.7 603.0 634.5 660,9 11.9%

Y-o-Y change 13.7% 14.8% (2.2%) 40.5% 1.1% 13.9% 22.1% 5.2% 4.2%

* Figures adjusted to exclude non-recurring effect in A3NP.

R$ million 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 CAGR

Advertising exp. 107.6 116.1 127.1 138.7 147.0 163.7 169.2 148.9 125.2 125.6 1.7%

% of Net revenue 8.6% 8.0% 7.9% 9.4% 7.8% 7.5% 7.6% 6.8% 6.1% 5.6%

In 2008 we published the following parameters as our targets for a period spanning ten years – 2008 to 2018:

Gross revenue: Compound average growth rate (CAGR) between 8% and 12%.

Net profit: CAGR between 12% and 15%.

Advertising expenses: Average of 8% to 10% of net revenue over this period.

In the ninth of these 10 years, we see CAGR for gross revenue of 6.3% p.a., and CAGR for net profit of 11.9% p.a. The CAGR of Ebit from 2008 through 2017 was 12.2% p.a.; and CAGR of dividends was 14.8% p.a. In this period, the return on stockholders’ equity averaged 23.2% p.a.

In our opinion our operational execution to achieve these expected levels has been very good, and although the growth has been slightly lower than expected we consider the results to be successful, in view of the long period we gave for our target (10 years); and the considerable economic turbulence Brazil has suffered in the period. In spite of those difficulties, taking into account the transparency that we always seek to uphold in our communications with the market, starting in 2015 we already stated that there was a risk of not meeting the targets, due to the economic outlook that we could see at the time.

To meet our targets for the end of the 10-year period – to achieve the minimum levels of the bands indicated for these variables – gross revenue in 2018 would have to be between R$ 3.4 billion and R$ 4.9 billion, and net profit would have to be between R$ 743mn and R$ 968mn – representing YoY growth of 24.7% and 12.4% respectively – which we now believe will probably not happen. This is indicated in the charts below.

For revenue growth at this percentage the market conditions must be much better than those we expect to face in 2018. We expect some recovery in the market, but we do not expect to see a recovery to 2013 levels before the end of this current year – and this makes it unlikely, in our view, that we will succeed in generating gross revenue in 2018 within the band of figures that we stated in 2008 for the 10-year target.

At the same time, continuing low interest rates means lower net financial revenues – which are thus less likely to help us achieve growth in net profit on the scale necessary to achieve that target. We do expect improvement in operational results; but not enough to make up for the low growth in net financial revenue – and provide the 12.4% YoY growth in net profit that would be necessary to bring us within the target for the last year of the period. These numbers, in our assessment, could be within the range of the possible – but we would not say they are probable.

For the whole of this period we have had some years with low interest rates – but strong growth of consumption in Brazil; and some years with recession, but very high interest rates 2017 was not a case of the latter, and we do not expect 2018 to be. For this year, we expect modest recovery in consumption; and very low interest rates. In that scenario, we would expect to have very low growth, or even reduction, in our net financial revenue, and higher growth in the operational result, but we would expect it to be unlikely that YoY net profit growth would reach two digits.

Also, we are expecting an increase in operational expenses, possibly of as much as 1% (beyond normal growth), to adapt to the new rules of the Novo Mercado, and the Brazilian Corporate Governance Code. On the other hand, possibly not all of this increase will happen in 2018.

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11.1 – Guidance forecasts and assumptions

The charts below show our guidance targets for gross revenue and net profit for 2008-2018 – and performance up to and including 2017.

* 2014 e 2015 - Figures adjusted to exclude non-recurring effect in A3NP.

* 2014 e 2015 - Figures adjusted to exclude non-recurring effect in A3NP.

1.702 1.838 1.985

2.144 2.316

2.501

2.701 2.917

3.150 3.402

1.765 1.977

2.214

2.480 2.777

3.111 3.484

3.902

4.370

4.895

1.374 1.515 1.576

1.819 1.999 1.847

2.324

2.711 2.719

2.630 2.483 2.728

1.000

2.000

3.000

4.000

5.000

2006 2007 2008 2009 2010 2011 2012 2013 2014 * 2015 * 2016 2017 2018

R$ m

illio

n

Target - Gross sales revenue

Guidance 8% a.a. Guidance 12% a.a. Fulfilled

268 300

336

377 422

472 529

593

664 743

275 317

364 419

481 554

637 732

842

968

257 261 239 272

312

305

429 434 494

603

634 661

200

400

600

800

1.000

2006 2007 2008 2009 2010 2011 2012 2013 2014 * 2015 * 2016 2017 2018

R$ m

illio

n

Target - Net profit

Guidance 12% a.a. Guidance 15% a.a. Fulfilled

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11.2 - Monitoring of and changes to the forecasts published

Updated on July 26, 2018

Comparison of performance with targets

Note that the guidance that we publish is for complete years, not individual quarters – but for optimum transparency and analysis we include comparisons of quarters in this chart:

Performance: CAGR, in the third quarters of the years 2008–2018:

R$ mn 3Q08 3Q09 3Q10 3Q11 3Q12 3Q13 3Q14 3Q15 3Q16 3Q17 3Q18 CAGR

Gross revenue 457.9 475.5 546.4 511.3 613.0 739.0 730.1 734.5 654.0 723.9 732.8 4.8%

YoY change 3.9% 14.9% (6.4%) 19.9% 20.6% (1.2%) 0.6% (11.0%) 10.7% 1.2%

Net profit 73.3 65.6 104.8 83.5 119.4 122.1 126.0 133.5 150.9 146.7 112.4 4.4%

YoY change (10.5%) 59.7% (20.3%) 43.0% 2.2% 3.2% 5.9% 13.1% (2.8%) (23.4%)

R$ mn 3Q08 3Q09 3Q10 3Q11 3Q12 3Q13 3Q14 3Q15 3Q16 3Q17 3Q18 CAGR

Advert. expenses 32.3 33.9 44.4 46.3 42.9 45.7 53.4 54.9 36.1 37.7 40.6 2.3%

% of NOR 9.0% 9.0% 10.2% 11.2% 8.6% 7.6% 8.9% 8.9% 6.7% 6.3% 6.8%

Performance: CAGR, in first nine months of year, 2008–2018:

R$ mn 9M08 9M09 9M10 9M11 9M12 9M13 9M14 9M15 9M16 9M17 9M18 CAGR

Gross revenue 1,076.1 1,218.7 1,394.0 1,210.6 1,521.1 1,847.3 1,834.2 1,835.1 1,719.8 1,880.8 1,940.9 6.1%

YoY change 13.2% 14.4% (13.2%) 25.6% 21.4% (0.7%) (0.05%) (6.3%) 9.4% 3.2%

Net profit 156.7 187.2 189.7 183.9 261.0 290.6 294.9 357.1 387.5 410.5 334.2 7.9%

YoY change 19.5% 1.4% (3.1%) 41.9% 11.4% 1.5% 21.1% 8.5% 5.9% (18.6%)

R$ mn 9M08 9M09 9M10 9M11 9M12 9M13 9M14 9M15 9M16 9M17 9M18 CAGR

Advert. expenses 69.5 72.3 82.6 85.0 101.3 105.2 105.9 100.1 83.6 84.8 85.9 2.1%

% of NOR 8.2% 7.4% 7.4% 8.7% 8.3% 7.1% 7.1% 6.6% 5.9% 5.5% 5.4%

In 2008 we published the following parameters as our targets for the 10 years from 2008 through 2018:

Compound average growth rate (CAGR) of gross revenue: between 8% and 12%.

CAGR of net profit: between 12% and 15%.

Objective for average advertising expenses in the period 8% to 10% of net revenue.

What has happened so far this year has been less positive than our initial expectations for the year, and contrary to our forecast, consumption did not recover during the year even though interest rates were kept very low.

The lower interest rates resulted in our financial revenue being lower, and we did not achieve the growth in the operational result that would have offset this effect.

This resulted in net profit being lower year-on-year, rather than slightly higher as we initially expected.

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11.2 - Monitoring of and changes to the forecasts published

Updated on July 26, 2018

Comparison of performance with targets

Note that the guidance that we publish is for complete years, not individual quarters – but for optimum transparency and analysis we are showing comparisons of quarters in this chart:

2Q performance – CAGR (Compound average growth rate) in second quarter of year, 2008– 2018:

R$ million 2Q08 2Q09 2Q10 2Q11 2Q12 2Q13 2Q14 2Q15 2Q16 2Q17 2Q18 CAGR

Gross revenue 286.9 371.7 391.0 307.2 412.6 504.7 488.7 462.1 499.2 536.0 544.4 6.6%

YoY change 29.6% 5.2% (21.4%) 34.3% 22.3% (3.2%) (5.4%) 8.0% 7.4% 1.6%

Net profit 42.4 57.3 38.0 36.9 59.5 66.2 72.4 86.8 93.0 92.0 65.8 4.5%

YoY change 35.2% (33.7%) (3.1%) 61.4% 11.2% 9.4% 19.8% 7.2% (1.1%) (28.4%)

R$ million 2Q08 2Q09 2Q10 2Q11 2Q12 2Q13 2Q14 2Q15 2Q16 2Q17 2Q18 CAGR

Advertising expenses 19.8 19.8 19.9 20.0 28.5 26.7 26.2 21.3 25.1 25.9 23.8 1.8%

% of net revenue 9.1% 6.7% 6.5% 8.2% 8.6% 6.6% 6.6% 5.6% 6.2% 5.9% 5.3%

1H performance – CAGR (compound average growth rate) in first half of year, 2008 – 2018:

R$ million 1H08 1H09 1H10 1H11 1H12 1H13 1H14 1H15 1H16 1H17 1H18 CAGR

Gross revenue 618.2 743.2 847.6 699.3 908.1 1,108.3 1,104.2 1,100.6 1,065.8 1,156.9 1,208.1 6.9%

YoY change 20.2% 14.1% (17.5%) 29.8% 22.0% (0.4%) (0.3%) (3.2%) 8.5% 4.4%

Net profit 83.4 121.6 84.9 100.4 141.5 168.5 168.9 223.7 236.6 263.7 221.9 10.3%

YoY change 45.8% (30.1%) 18.2% 41.0% 19.1% 0.2% 32.4% 5.8% 11.5% (15.9%)

R$ million 1H08 1H09 1H10 1H11 1H12 1H13 1H14 1H15 1H16 1H17 1H18 CAGR

Advertising expenses 37.2 38.5 38.3 38.7 58.4 59.5 52.5 45.2 47.5 47.0 45.3 2.0%

% of net revenue 7.7% 6.4% 5.6% 6.9% 8.0% 6.7% 5.9% 5.0% 5.4% 4.9% 4.6%

In 2008 we published the following parameters as our targets for the 10 years from 2008 through 2018:

Compound average growth rate (CAGR) of gross revenue between 8% and 12%.

CAGR of net profit between 12% and 15%.

Objective of maintaining advertising expenses at an average of 8% to 10% of net revenue over this period.

Events to date have not changed our initial expectations for the year, and we restate that we expect modest recovery in consumption and very low interest rates. This scenario should result in our having lower financial revenue, and higher growth in the operational result, but we believe it is unlikely that the growth in net profit will be sufficient to meet the 10-year target.

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11.2 - Monitoring of and changes to the forecasts published

Updated on April 26, 2018

Comparison of performance with targets

Performance – CAGR (compound average growth rate)

R$ million 1Q08 1Q09 1Q10 1Q11 1Q12 1Q13 1Q14 1Q15 1Q16 1Q17 1Q18 CAGR

Gross revenue 331.4 371.5 456.6 392.1 495.4 603.6 615.4 638.4 566.6 621.0 663.7 7.2%

Y-o-Y change 12.1% 22.9% (14.1%) 26.3% 21.8% 2.0% 3.7% (11.3%) 9.6% 6.9%

Net profit 41.0 64.3 46.9 63.5 82.1 102.3 96.5 136.9 143.6 171.8 156.1 14.3%

Y-o-Y change 56.8% (27.0%) 35.5% 29.1% 24.7% (5.7%) 41.8% 4.9% 19.6% (9.2%)

R$ million 1Q08 1Q09 1Q10 1Q11 1Q12 1Q13 1Q14 1Q15 1Q16 1Q17 1Q18 CAGR

Advertising expenses 17.4 18.7 18.4 18.7 30.0 32.9 26.4 23.9 22.5 21.1 21.5 2.1%

% of Net revenue 6.6% 6.1% 4.9% 5.9% 7.6% 6.8% 5.3% 4.5% 4.7% 4.1% 3.9%

In 2008 we published the following parameters as our targets for the 10 years – 2008 to 2018:

Compound average growth rate (CAGR) of gross revenue between 8% and 12%.

CAGR of net profit between 12% and 15%.

Objective of maintaining advertising expenses at an average of 8% to 10% of net revenue over this period.

We say again that for this year we expect modest recovery in consumption, and very low interest rates. In this context, we expect lower financial revenue, and a higher growth in operational result, but hardly the growth of the net profit will be enough to reach the goal of 10 years.

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12.1 - Description of the administrative structure

a. Attributions of each body

The Company is managed by the Board of Directors and by the Executive Board in accordance with the law and the By-laws. The members of the Board of Directors are elected by the General Meeting of Stockholders, and the members of the Executive Board are elected by the Board of Directors.

The Board of Directors has the following attributions under Clause 21 of the By-laws:

a. To elect, and to dismiss, the members of the Executive Board and to set their attributions, including the Chief Investor Relations Officer.

b. To approve the internal regulations of the Company, if any.

c. To set the general orientation of the business of the Company and of any company controlled by the Company (“Subsidiary”);

d. To approve a Business Plan for the Company and its Subsidiaries and any capital investment and any investment or capital expenditure that is not included in such Plan.

e. To monitor and inspect the management by the Chief Officers, examining, at any time, the minutes, books and papers of the Company and of its Subsidiaries, requesting information on contracts entered into, or in the process of being entered into, and any other acts.

f. To call the General Meeting of Stockholders, in accordance with Clause 9 above, whenever necessary, or whenever required by law, and in accordance with these By-laws.

g. To make statement of opinion on the report of management and the accounts presented by the Executive Board and the annual and/or interim financial statements and to propose application of the net profit for each year.

h. To decide on the issuance of shares or warrants within the limit of the authorized capital.

i. To authorize acquisition by the Company of shares issued by the Company to be held in treasury and/or for subsequent disposal.

j. To decide on issuance of debentures not convertible into shares and without real guarantee, and of promissory notes for public distribution in the terms of CVM Instruction 134.

k. To appoint and dismiss the Company’s external auditors.

l. To authorize the raising of any loans or financings, by the Company or by any Subsidiary, the amounts of which, when considered jointly with all such amounts over the period of 3 (three) months prior to the transaction, result in an aggregate amount greater than R$ 300,000,000.00 (three hundred million Reais).

m. To authorize disposal of, or placement of a lien or charge upon, any of the permanent assets of the Company or of any Subsidiary, the amount of which, when considered jointly with all such amounts over the period of 3 (three) months prior to the transaction, results in an aggregate amount greater than R$ 360,000,000.00 (three hundred sixty million Reais).

n. To authorize the provision of real or personal guarantees of any nature by the Company or by any Subsidiary the amounts of which, when considered jointly with all such amounts over the period of 3 (three) months prior to the transaction, result in an aggregate amount greater than R$ 360,000,000.00 (three hundred sixty million Reais).

o. To authorize carrying out of acts that result in waiver of rights by the Company or by any subsidiary the amounts of which, when considered jointly with all such amounts over the period of 3 (three) months prior to the transaction, result in an aggregate amount greater than R$ 45,000,000.00 (forty five million Reais).

p. To set the general conditions of, and to authorize the Company to enter into, contracts of any nature between the Company and any Subsidiary or Affiliated company or any of their managers or controlling stockholders, or between the Company and any company controlled by or affiliated with the managers or the controlling stockholders, and also with any other companies which are, by law or de facto, part of a single group with any such parties, when the individual values of any such contracts amount, individually or jointly, over a period of one year, to 1% or more of the Company’s stockholders’ equity.

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12.1 - Description of the administrative structure

q. To make statement of position on such subjects as the Executive Board presents to it for its consideration or to be submitted to the General Meeting of Stockholders.

r. To decide on the suspension of the activities of the Company or of any subsidiary.

s. To take upon itself, at any time, examination of any subject relating to the business of the Company and its Subsidiaries that is not in the private sphere of competence of the General Meeting of Stockholders.

t. To decide the list of three companies specialized in economic valuation of companies, for the preparation of the Valuation Opinion on the Company’s shares, in the event of cancellation of the Company’s registry with the CVM, or its leaving the Novo Mercado.

u. To approve the contracting of the depositary institution to provide the book-entry share services.

v. To state a position in favor of or contrary to any public offer for acquisition of shares in the Company, through a prior Opinion Statement, expressed with grounds, which must be published no later than 15 (fifteen) days after publication of the announcement of the public offer for acquisition of shares, and such Opinion Statement must deal with at least the following subjects:

(i) whether the public offer for acquisition of shares is convenient and opportune in relation to the interests of the stockholders as a group, and in relation to the liquidity of the securities they hold;

(ii) the repercussions of the public offer for acquisition of shares on the interests of the Company;

(iii) the strategic plans published by the offering party in relation to the Company;

(iv) any other points that the Board of Directors considers to be relevant, and the information required by the applicable rules established by the CVM.

§1 The amounts mentioned in items 'l', 'm', 'n' and 'o' above shall be adjusted annually as from April 7, 2014, by the IGP-M index of the Getúlio Vargas Foundation or such index as may in the future substitute it.

The Executive Board has the function of representing the Company in court or otherwise in the plaintiff or defendant role.

Under Clause 26 of the By-laws, except as provided in Clause 27, active and passive representation of the Company, in Court or otherwise, shall be exercised individually by the Chief Executive Officer or by the Deputy Chief Executive Officer, or: (a) by 2 (two) members of the Executive Board jointly, (b) by one member of the Executive Board jointly with a person holding a power of attorney with special and specific powers, or (c) by two persons holding powers of attorney with such powers. Powers of attorney granted by the Company shall be signed individually by the Chief Executive Officer or by the Deputy Chief Executive Officer, or by 2 (two) members of the Executive Board jointly, or by one member of the Executive Board jointly with a person holding power of attorney, and must contain specific powers and period of validity not greater than 2 (two) years (except in the case of a grant of such powers ad judicia et extra as the Executive Board may from time to time authorize).

Also, under Clause 27 of the By-laws, without prejudice to the provisions of Clause 26, the Company may be represented by 1 (one) member of the Executive Board or, further, by 1 (one) person holding a power of attorney with specific and special powers, including for grant of power of attorney, in the terms of Clause 26 above, acting in isolation, in the following circumstances:

a. In routine matters before federal, state and municipal public bodies, independent authorities and mixed public-private sector companies, including but not limited to the following: the National Social Security Institute (INSS), the Workers’ Time of Service Guarantee Fund (FGTS) administered by the Federal Savings Bank (CEF), the Federal Tax Revenue Department, including Inspectors’ Offices, Federal Revenue Department Delegations and Agencies, State and/or Municipal Tax Authorities, State Commercial Boards, the National Industrial Property Institute, the Brazilian Central Bank, Secex, Banco do Brasil S.A., the Securities Commission (CVM), Ibama or other environmental bodies, the Civil Aviation Department (DAC) and Infraero, securities and commodities exchanges, Sudene/Adene, Sudam/Adam, state banks, development banks, and lending and investment financial institutions.

b. In collection and receipt of credits in favor of the Company.

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12.1 - Description of the administrative structure

c. In signature of correspondence on routine matters.

d. In representation of the Company in General Meetings of Stockholders of its Subsidiaries.

Audit Board

The Company’s Audit Board, with the attributions and powers that the law confers upon it, comprises 3 (three) sitting members and an equal number of substitute members, who may be stockholders, elected by the General Meeting of Stockholders, from among persons resident in Brazil, provided that they meet the legal requirements for the position.

§1 The Audit Board functions in a non-permanent manner, being brought into being only when the General Meeting of Stockholders so decides, in obedience at all times to the provisions of Law and these By-laws.

§2 The Audit Board elects its Chairman in the first Meeting and functions in accordance with the internal regulations approved by the General Meeting of Stockholders that decides on its installation, if any.

§3 The decisions of the Audit Board shall be taken at all times by absolute majority of votes and shall be written, in the form of Minutes, in the specific book for the purpose, and signed by all those present.

§4 The General Meeting of Stockholders shall set the fees of the Audit Board, when functioning, subject always to the provisions of Law.

§5 Members of the Audit Board may take office only after signing the 'Term of Consent by Members of the Audit Board' referred to in the Novo Mercado Listing Regulations.

b. Date of the Audit Board being installed, and if it is not permanent, the date of creation of the committees.

The Audit Board was installed on April 23, 2018.

The Company has had the Audit Board in place in the last three business years (2015, 2016 and 2017).

c. Mechanisms for assessment of the performance of each body or committee

Except for the non-statutory committee for management of the stock options program, which has no type of evaluation, the Company does not have management committees.

We believe that the evaluation of the Board of Directors and the Audit Board should be made by the stockholders who elected them. We are not aware of whether this evaluation is made, and if it is made, which criteria or mechanisms are adopted.

d. In relation to the members of the Executive Board, their individual attributions and powers:

See item 'a' - The Executive Board.

e. Mechanisms for assessment of the performance of the members of the Board of Directors, the committees and the Executive Board.

- Board of Directors

See item 10 c.

- Executive Board

The evaluation of the performance of Executive Officers is carried out by the Board of Directors of the Company, based on the overall result and profit of the Company and on its monitoring of the activities of the executive officers over the year. This evaluation is not formal (written), but consists of commentaries on the results, targets achieved and recommendations of the members of the Boards to each executive officer.

- Audit Board

See item 10 c.

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12.2 – Rules, policies and practices in relation to the General Meetings of Stockholders.

a. Convocation period

The first convocation must be made at least 15 (fifteen) days in advance of the date set for the General Meeting of Stockholders, counted from the publication of the first convocation announcement, which must contain the location, date and time of the meeting, and the agenda. If the General Meeting of Stockholders does not take place after first convocation, a further advertisement shall be published, of second convocation, with minimum prior notice of 8 (eight) days. b. Competencies

A General Meeting of Stockholders that is called and opened in accordance with the applicable legislation and the provisions of the By-laws has powers to decide all the matters relating to the objects of the Company and to take all such resolutions as it sees fit for the Company's defense and development. c. Addresses (physical or web) at which the documents relating to the General Meeting will be at the disposal of the Stockholders

- Physical address: Avenida Pimentel Gomes, 214, CEP 62040-125, Sobral, Ceará, Brazil. - Web address: http://ri.grendene.com.br d. Identification and management of conflict of interests

In the event of an interest conflicting with the matter on the agenda, under Brazilian legislation the stockholder is prohibited from giving his or her vote. The Company applies this as an overall rule: No stockholder with a conflict of interest may vote on a matter on the agenda. e. Request for powers of attorney to exercise the right to vote.

The request for powers of attorney follows the legal and regulatory requirements. f. Formalities necessary for acceptance of powers of attorney granted by stockholders, indicating whether the issuer requires or dispenses the need for recognition of signature, notarization, consularization and sworn translation and whether the issuer allows powers of attorney granted by stockholders by electronic means

The Company does not allow powers of attorney by electronic means. The Company dispense with the authentication and recognition of signatures of the documents referred to in item 12.2.G.II.

Pursuant to article 126, paragraph 1, of the Brazilian Corporate Law, individual shareholders can be represented by proxies who have been appointed in the past twelve (12) months, and who are shareholders, attorneys, financial institutions or managers at the Company.

Pursuant to article 126, paragraph 1, of the Brazilian Corporate Law, and in accordance with Circular Letter CVM/SEP 01/2017, shareholders who are legal entities can be represented by their legal proxies or proxies duly appointed as such, as per the Company’s articles of incorporation or the rules provided for in the Civil Code. Thus, in the case of legal entities, their proxies do not need to be shareholders, attorneys, or managers at the Company.

g. Formalities necessary for remote acceptance of a voting form when sent directly to the Company, indicating whether the issuer requires or dispenses with requirement of recognition of signature, notarization and consularization

Shareholders who decide to exercise remote voting rights with direct submission to the Company must send the following documents to Avenida Pimentel Gomes, 214, CEP 62040-125, Sobral, Ceará, Brazil, A/C Diretoria de Relações com Investidores:

(i) physical original of the voting form regarding the general shareholders’ meeting duly completed, initialed and signed; and (ii) copy of the following documents:

for individuals: identity document with a photo of the shareholder;

for legal entities: most recent consolidated bylaws or articles of association, and corporate documents that may evidence the sharehoder’s legal representation; and identity document with a photo of the legal representative.

for investment funds: most recent consolidated regulations of the fund; bylaws or articles of incorporation of the administrator or manager, as the case may be, according to the fund’s voting policy, and corporate documents that may evidence representation powers; and identity document with a photo of the legal representative.

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12.2 – Rules, policies and practices in relation to the General Meetings of Stockholders.

The Company will not require a certified translation of documents whose originals have been drawn up in Portuguese or English, nor of documents attached with their respective translations into these languages. The following identity documents will be accepted, as long as they include a photo of the bearer: Identity Card (RG), Identity Card for Foreigners (RNE), Driver’s License (CNH) or officially recognized professional cards.

According to Article 21-B of CVM Instruction 481/2009, the voting form will be received up to 7 (seven) days before the general shareholders’ meeting. Voting form received after the established date will be disregarded by the Company.

h. Whether the Company makes an electronic system available for receipt of a remote voting notice or remote participation

The Company has not implemented the electronic system for receipt of a remote voting or participation notice. i. Instructions for the stockholder or group of stockholders to include in a remote voting notice any proposals for decision, groups of candidates, or candidates to membership of the Board of Directors and/or the Audit Board

Shareholders who intend to include proposed resolutions, slates or candidates to the Board of Directors or the Audit Board in the remote voting form must submit their proposals by mail to Avenida Pimentel Gomes, 214, CEP 62040-125, Sobral, Ceará, Brazil, A/C Diretoria de Relações com Investidores, together with the documents pertaining to the proposal, or by electronic mail to [email protected], as provided for in applicable regulations. j. Whether the Company makes web forums or web pages available to receive and share stockholders’ comments on the agendas of general meetings

The Company has not implemented the electronic system for receipt of a remote voting or participation notice. k. Other information necessary for remote participation and exercise of remote voting

Holders of shares in the Company that are deposited in a central depositary institution may transmit voting instructions for filling in the Remote Voting Form through their custody agents, if those agents provide this type of service.

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12.3 – Rules, policies and practices relating to the Board of Directors

The Board of Directors shall consist of at least five and a maximum of seven sitting members, all stockholders, of which at least 20% (twenty per cent) must be Independent Members as defined in the Listing Regulations of the Novo Mercado. The periods of office of the members of the Board of Directors shall run concurrently, being a maximum of 2 (two) years, re-election being permitted. The following are the present members of the Board of Directors:

Member Position Date of election:

Alexandre Grendene Bartelle Chair April 23, 2018

Pedro Grendene Bartelle Vice-Chair April 23, 2018

Maílson Ferreira da Nóbrega Board Member April 23, 2018

Oswaldo de Assis Filho Board Member April 23, 2018

Renato Ochman Board Member April 23, 2018

Walter Jansen Neto Independent board member April 23, 2018

a. Frequency of meetings

The Board of Directors shall meet, ordinarily, 4 (four) times a year, and, extraordinarily, whenever called by the Chair or by the Vice-Chair or by decision of the majority of the members, or by request of the Executive Board.

In 2017, the meetings of the Board of Directors of the Company were held on the dates shown below:

2017

02/16/2017

04/27/2017

06/20/2017

07/27/2017

10/26/2017

b. Please state, if any, the provisions of the Stockholders' Agreement that restrict or bind Board Members' right to vote

There is no restraint on the exercise of the right to vote nor is it bound in any way.

c. Rules for identification and management of conflicts of interest

In accordance with the Corporate Law, any member of the Board of Directors of the Company is prohibited from voting in any Meeting or meeting of the Board, or to have any activity in any operation, transaction or business in which he/she has interests conflicting with those of the Company. Identification and administration of conflicts of interests are the responsibility of the members of the Board of Directors.

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12.4 – Description of the commitment clause for resolution of disputes through arbitration.

The Company, its stockholders, its managers and the members of its Audit Board undertake to resolve by means of arbitration, before the Market Arbitration Chamber, all and any dispute or controversy that may arise between them, relating to or arising from, in particular, the application, validity, efficacy, interpretation, violation, or their effects, of the provisions contained in the Corporate Law, the Company’s by-laws, the rules issued by the National Monetary Council, by the Brazilian Central Bank or by the Brazilian Securities Commission, or in the other rules applicable to the functioning of the capital market in general, as well as those contained in the Listing Regulations of the Novo Mercado, the Arbitration Regulations, the Sanctions Regulations and the Novo Mercado participation agreement.

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12.5 / 6 - Composition and professional experience of the management. Name Birth date Management body Date of election Period of office Number of

Consecutive Mandates

Personal tax number (CPF) Profession Elected position held Date of swearing-in

Was elected by the controlling stockholder

Percentage of participation in meetings

Other positions and functions held in the Issuer

Francisco Olinto Velo Schmitt 10/16/1955 Is a member only of the Executive Board 02/25/2016 3 years 4

263.637.980-00 Electrical engineer 12 - Investor Relations Director 02/25/2016 Yes 0.00%

Chief Administrative and Financial Officer

Rudimar Dall Onder 08/14/1956 Is a member only of the Executive Board 02/25/2016 3 years 5

254.626.870-87 Mechanical Engineer 10 - CEO / General Manager 02/25/2016 Yes 0.00%

Does not hold other positions in the Issuer

Gelson Luis Rostirolla 02/14/1953 Is a member only of the Executive Board 02/25/2016 3 years 5

148.411.429-91 Company manager 11 - Deputy CEO / General Manager 02/25/2016 Yes 0.00%

Does not hold other positions in the Issuer

Maílson Ferreira da Nóbrega 05/14/1942 Is a member only of the Board of Directors 04/23/2018 2 years 8

043.025.837-20 Economist 22 - Board of Directors (Sitting member) 04/23/2018 Yes 100.00%

Does not hold other positions in the Issuer

Oswaldo de Assis Filho 02/11/1950 Is a member only of the Board of Directors 04/23/2018 2 years 8

761.798.778-15 Business manager and Economist

22 - Board of Directors (Sitting member) 04/23/2018 Yes 100.00%

Does not hold other positions in the Issuer

Pedro Grendene Bartelle 01/23/1950 Is a member only of the Board of Directors 04/23/2018 2 years 8

098.647.840-72 Industrial 21 - Vice-Chair of the Board of Directors 04/23/2018 Yes 100.00%

Member of the Stock options management committee.

Renato Ochman 02/21/1960 Is a member only of the Board of Directors 04/23/2018 2 years 8

375.739.690-15 Lawyer 22 - Board of Directors (Sitting member) 04/23/2018 Yes 100.00%

Member of the Stock options management committee.

Walter Janssen Neto 04/04/1956 Is a member only of the Board of Directors 04/23/2018 2 years 7

248.808.509-00 Board Member 27 - Independent sitting members of the Board of Directors

04/23/2018 Yes 100.00%

Does not hold other positions in the Issuer

Alexandre Grendene Bartelle 01/23/1950 Is a member only of the Board of Directors 04/23/2018 2 years 8

098.675.970-87 Industrial 20 - Chair of the Board of Directors 04/23/2018 Yes 100.00%

Chair of the Stock options program management committee.

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12.5 / 6 - Composition and professional experience of the management. Name Birth date Management body Date of election Period of office Number of

Consecutive Mandates

Personal tax number (CPF) Profession Elected position held Date of swearing-in

Was elected by the controlling stockholder

Percentage of participation in meetings

Other positions and functions held in the Issuer

Valter Bianchi 10/23/1945 Audit Board 04/23/2018 1 year 8

006.571.230-72 Lawyer 46 - Substitute Member of Audit Board elected by controlling stockholder

04/23/2018 Yes 0.00%

Does not hold other positions in the Issuer

João Carlos Sfreddo 09/23/1946 Audit Board 04/23/2018 1 year 6

008.936.920-34 Accountant 43 - Sitting Member of the Audit Board elected by the controlling stockholder

04/23/2018 Yes 100.00%

Does not hold other positions in the Issuer

Eduardo Cozza Magrisso 09/14/1965 Audit Board 04/23/2018 1 year 5

456.261.620-20 Lawyer 43 - Sitting Member of the Audit Board elected by the controlling stockholder

04/23/2018 Yes 100.00%

Does not hold other positions in the Issuer

Carlos Osvaldo Pereira Hoff 04/27/1947 Audit Board 04/23/2018 1 year 2

055.286.900-72 Accountant 46 - Substitute Member of Audit Board elected by controlling stockholder

04/23/2018 Yes 100.00%

Does not hold other positions in the Issuer

Herculano Aníbal Alves 02/27/1953 Audit Board 04/23/2018 1 year 4

463.163.178-49 Economist 45 - Sitting member of the Audit Board elected by minority holders of common shares

04/23/2018 No 100.00%

Does not hold other positions in the Issuer

Marcello Joaquim Pacheco 01/15/1968 Audit Board 04/23/2018 1 year 4

112.459.108-76 Lawyer 48 - Substitute Member of Audit Board elected by minority holders of common shares

04/23/2018 No 0.00%

Does not hold other positions in the Issuer

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Professional experience / Statement of any convictions / Criteria for independence

Gelson Luis Rostirolla - 148.411.429-91

Academic qualifications: University qualification in Business Administration completed in 1977, and in Accounting, completed in 1979 from the University of Western Santa Catarina (Unoesc), Chapecó, Santa Catarina State. Joined Grendene S.A. in 1980 and in recent years has held several positions on the Company's Executive Board: Chief Financial and Administrative Officer and Investor Relations Director, from August 18, 2004 to April 28, 2005; Chief Officer for Administration and the Controller’s Department from April 29, 2005 to April 25, 2013, and Chief Financial Officer from May 10, 2007 to April 25, 2013. On April 25, 2013 Mr. Gelson Luis Rostirolla was elected Deputy Chief Executive Officer. Mr. Gelson Luis Rostirolla warrants that he has not been guilty of any offense which would prevent him from carrying out the activities of the position for which he has been designated, and that he does not occupy positions in companies that could be considered the Company's competitors in the market, and that he has no conflict of interest with the Company.

Francisco Olinto Velo Schmitt - 263.637.980-00

Academic qualifications: Degree in electrical engineering from the Federal University of Rio Grande do Sul in 1978; specialization and Master's degree in management with emphasis on finances from the Federal University of Rio Grande do Sul, with specialization in Controller's Operations from the Getúlio Vargas Foundation; doctorate in Management from São Paulo University (USP), 2004. Joined the Company in 2007 as Chief Investor Relations Officer. On April 25, 2013 was re-elected Chief Investor Relations Officer and elected Chief Financial Officer, and Chief Officer for Administration and Controller's Department. He carried out these functions until the changes to the Company's By-laws on April 7, 2014, which united the positions of Chief Administrative Officer and Chief Financial Officer and abolished the position of Chief Officer for the Controller's Department. Mr. Francisco Olinto Velo Schmitt warrants that he is not guilty of any offense that could prevent him from exercising the activities of the position for which he has been designated, and that he does not occupy any positions in companies that could be considered to be the Company's competitors in the market, and that he has no interest conflicting with those of the Company.

Rudimar Dall Onder - 254.626.870-87

Academic qualifications: Degree in mechanical engineering from the University of Caxias do Sul (UCS), 1981. Joined the Company in 1979, holding several positions until becoming Chief Industrial and Trading Officer in 1987. On August 18, 2004 he was elected a Statutory Director, as Chief Industrial and Trading Officer, and on April 25, 2013 was elected Chief Executive Officer. He also held the post of Chief Industrial and Trading Officer until April 7, 2014, when the By-laws were changed and the statutory position of Chief Industrial and Trading Officer ceased to exist. Mr. Rudimar Dall Onder warrants that he is not guilty of any offense that could prevent him from exercising the activities of the position for which he has been designated, and that he does not occupy any positions in companies that could be considered to be the Company's competitors in the market, and that he has no interest conflicting with those of the Company.

Maílson Ferreira da Nóbrega - 043.025.837-20

Member of the Board of Directors – since August 18, 2004. Academic qualifications: Degree in economics from the Centro Universitário de Brasília (CEUB). He began his career in Banco do Brasil S.A., where he headed the rural and industrial lending sector of the branches in Paraíba State. After 14 years with Banco do Brasil, he was appointed Coordinator of Economic Affairs of the Trade and Industry Ministry (1977) and subsequently of the Coordination Department for Economic Affairs of the Finance Ministry (1979). He was twice Secretary-General of the Finance Ministry and, from 1988 to 1990 was Finance Minister, in which status he chaired various bodies, including the National Monetary Council (CMN), the National Private Insurance Council (CNSP) and the Tax Policy Council (Confaz). He participates in various social and business organizations. He is also a member of the Board of Directors of several companies in and outside Brazil. He has further acted as representative of the Brazilian government in various international events and bodies. He is the author of several books and of articles about the Brazilian economy published in Brazil and the rest of the world. Currently he writes a column in Veja magazine. Mr. Maílson Ferreira da Nóbrega declares that he has not been accused of any crime that would prevent him from exercising the activities of the position for which he is being designated and that he does not occupy any post in companies that might be considered competitors in the market with the Company, and that he has no conflict of interest with the Company.

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Oswaldo de Assis Filho - 761.798.778-15

Member of the Board of Directors – since August 18, 2004. Academic qualifications: Degree in electronic engineering from the Aeronautical Technological Institute (ITA), 1973 and a Master’s degree in Economics from the Economics and Management Faculty of São Paulo University. From 1978 to 1983 he was a Director of Banco Mercantil de São Paulo. From 1984 to 1991 he was a partner of the brokerage Planibanc Corretora de Valores and from 1992 to 1994 was a partner of Convenção Corretora de Valores. In 1994 he became Deputy CEO of Banco Itamarati, and served in that post until 1996. In 1996 and 1997 he was Vice-President of Banco de Crédito Nacional (BCN), and in 1998 became a partner of Banco Pactual S.A., until 2006. He was Vice-Chairman of UBS Pactual from 2006 to 2009, and is currently a partner and Director of Banco BTGPactual. Mr. Oswaldo de Assis Filho declares that he has not been accused of any crime that would prevent him from exercising the activities of the position for which he is being designated and that he does not occupy any post in companies that might be considered competitors in the market with the Company, and that he has no conflict of interest with the Company.

Pedro Grendene Bartelle - 098.647.840-72

Founder of the Company. Vice-Chair of the Board of Directors since August 18, 2004. Academic qualifications: Degree in law from the University of Caxias do Sul, Rio Grande do Sul. Served as Deputy CEO until April 25, 2013, when he left the post to dedicate himself exclusively to the function of Vice-Chair of the Board of Directors, which post he has occupied since August 18, 2004. He was one of the people responsible for the growth of the Company, with the development of innovative concepts, technology, products and design. Mr. Pedro Grendene Bartelle declares that he has not been accused of any crime that would prevent him from exercising the activities of the position for which he is being designated and that he does not occupy any post in companies that might be considered competitors in the market with the Company, and that he has no conflict of interest with the Company.

Renato Ochman - 375.739.690-15

Member of the Board of Directors since August 18, 2004. Academic qualifications: Law degree from PUC University of Rio Grande do Sul. Master's degree, and Post-graduate degree in Commercial Law from PUC University of Sao Paulo. Mr. Renato Ochman is a partner in the law firm Ochman, Real Amadeo Advogados Associados with offices in São Paulo, São Paulo State and Porto Alegre, Rio Grande do Sul, an office specialized in corporate and stockholding law and the law of the capital markets, in consultancy, stockholding and civil litigation; in initial public offerings of companies; and in issuance of securities, and structuring of family succession, among other subjects. He is a visiting professor of courses at the GVLaw School of the Getúlio Vargas Foundation in São Paulo; member of the Council of the Graded School of São Paulo, and a member of the Brazilian Bar Association – in both the São Paulo and the Rio Grande do Sul Chapters. Mr. Renato Ochman declares that he has not been accused of any crime that would prevent him from exercising the activities of the position for which he is being designated and that he does not occupy any post in companies that might be considered competitors in the market with the Company, and that he has no conflict of interest with the Company.

Walter Janssen Neto - 248.808.509-00

Member of the Board of Directors – since December 18, 2006. Academic qualifications: Economics and accounting; Post-Graduation in Industrial Economics from the Federal University of Santa Catarina, and an Executive MBA from the Wharton School of Pennsylvania University. He has certification as a Professional Board Member from NACD (National Association of Corporate Directors) of the USA; specialization in Corporate Governance from Stanford University Law School, Chicago Business School and the Wharton School; he is a member of the Brazilian Corporate Governance Institute (IBGC). He was an executive of the WEG Group of Santa Catarina for 31 years, where he had the opportunity to serve in various executive positions in the areas of supplies, finance and sales. He was General Manager of the Business Unit, Chief Human Relations and Corporate Marketing Officer, and most recently Chairman of operations of the WEG Group in the USA, as well as being a member of the Board of Directors of various Brazilian companies. Mr. Walter Janssen Neto declares that he has not been accused of any crime that would prevent him from exercising the activities of the position for which he is being designated and that he does not occupy any post in companies that might be considered competitors in the market with the Company, and that he has no conflict of interest with the Company.

Alexandre Grendene Bartelle - 098.675.970-87

Founder of the Company, and Chair of the Board of Directors since August 18, 2004. Academic qualifications: Degree in law from the University of Caxias do Sul, Rio Grande do Sul. Served as Chief Executive Officer until April 25, 2013, when he left the post to dedicate himself exclusively to the function of Chairman of the Board of Directors, which post he occupied from August

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18, 2004. He was one of the people responsible for the growth of the Company, with the development of innovative concepts, technology, products and design. Mr. Alexandre Grendene Bartelle declares that he has not been accused of any crime that would prevent him from exercising the activities of the position for which he is being designated and that he does not occupy any post in companies that might be considered competitors in the market with the Company, and that he has no conflict of interest with the Company.

Valter Bianchi - 006.571.230-72

Substitute Member of the Audit Board. Academic qualifications: Law degree from the University of Caxias do Sul (UCS), 1971. Technical course in accounting - Nossa Senhora Aparecida Technical School (1965), Bento Gonçalves, Rio Grande do Sul. Has practiced law and corporate consultancy since 1972. He is a director of the law firm Bianchi Advocacia S/S. Since 1994 he has held the position of accountant at the accountancy company Agescon Contabilidade e Assessoria Empresarial Ltda. From 1966 to 1994 he was an accountant with the accounting company Contasa Contabilidade e Assessoria Empresarial Ltda. Mr. Valter Bianchi warrants that he is not guilty of any offense that could prevent him from exercising the activities of the position for which he has been designated, and that he does not occupy any positions in companies that could be considered to be the Company's competitors in the market, and that he has no interest conflicting with those of the Company.

João Carlos Sfreddo - 008.936.920-34

Sitting Member of the Audit Board. Academic qualifications: Mr. Sfreddo has a degree in accounting from PUC University of Rio Grande do Sul, with Post-graduate courses in external auditing from the Federal University of Rio Grande do Sul, given in collaboration with IAIB and Ibmec. He has more than 30 years' experience in tax and auditing, at clients in a range of sectors including retailing, chemicals and petrochemicals, electricity, financial institutions and manufacturing. From 1982 to 2009 he was a tax consulting partner at Ernst & Young. He is a member of Junior Chamber International, a founding member of IBEF - the Institute of Brazilian Financial Executives (Instituto Brasileiro de Executivos de Finanças). He was Vice-President of ADVB - the Brazilian Sales Managers' Association (Associação de Dirigentes de Vendas do Brasil) for two periods of office. Mr. João Carlos Sfreddo warrants that he is not guilty of any offense that could prevent him from exercising the activities of the position for which he has been designated, and that he does not occupy any positions in companies that could be considered to be the Company's competitors in the market, and that he has no interest conflicting with those of the Company.

Eduardo Cozza Magrisso - 456.261.620-20

Sitting Member of the Audit Board. Academic qualifications: Mr. Magrisso has a law degree from the Federal University of Rio Grande do Sul, and a Post-graduate degree in Tax Law from the University of Vale do Rio dos Sinos (Unisinos - RS). He has also completed the Certificate Course for Members of Boards of Directors, from IBGC. He works in Corporate Law, with a focus on tax, stockholding and commercial law. Since 1990 he has been the partner responsible for tax and stockholding consulting at Renck & Magrisso Advogados Associados. Since 2010 he has been a member of the Board of Sersat do Brasil Ltda. He has served on the Board of Directors of Meta Agrícola (since 2008), and in 2014 he joined the Board of Districomp Distribuidora de Produtos de Informática. He is a working member of FESDT (Fundação Escola Superior de Direito Tributário - Higher Tax Law College Foundation). Mr. Eduardo Cozza Magrisso warrants that he is not guilty of any offense that could prevent him from exercising the activities of the position for which he has been designated, and that he does not occupy any positions in companies that could be considered to be the Company's competitors in the market, and that he has no interest conflicting with those of the Company.

Carlos Osvaldo Pereira Hoff – 055.286.900-72

Substitute Member of the Audit Board. Academic qualifications: Mr. Hoff has a degree in accounting from PUC (Pontifícia Universidade Católica) of Rio Grande do Sul, with a course in external auditing from the Brazilian Capital Markets Institute (Ibmec). He has served as (i) Manager and Partner at Steinstrasser, Bianchessi & Cia. – Auditores; (ii) Partner at Jairo Coelho & Cia – Auditores; (iii) Manager at Coopers & Lybrand (now PricewaterhouseCoopers); (iv) Senior Manager and Director at Ernst & Young Auditores Independentes; (v) Partner, and Auditing Director, at Exacto Auditoria S/S; (vi) Member of the Audit Board of Randon S.A. Implementos e Participações; (vii) Member of Board of the Regional Accounting Council of Rio Grande do Sul; and (viii) Administrative and Financial Director of the 6th Regional Section of the Institute of Independent Auditors of Brazil. He currently serves as: (i) Partner at Müller, Prei & Hoff Auditores Independentes S/S; and (ii) Member of the Audit Boards of Fras-le S.A. and Unicasa Indústria de Móveis S.A. Mr. Carlos Osvaldo warrants that he is not guilty of any offense that could prevent him from exercising the activities of the position for which he has been designated, and that he does not occupy any positions in companies that could be considered to be the Company's competitors in the market, and that he has no interest conflicting with those of the Company.

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Herculano Aníbal Alves - 463.463.178-49

Member of the Audit Board (sitting member, elected by the minority stockholders). Academic qualifications: Degree in economics from the PUC University of São Paulo; postgraduate studies in financial administration from the São Paulo Business Management School of the Getúlio Vargas Foundation (EAESP/FGV); Master’s degree in finance and investment from EAESP/FGV. He is a Chartered Financial Analyst (CFA); holder of the Anbima Management Certificate (CGA); and a Portfolio Manager accredited by the CVM.He has been equities consultant to BRAM – Bradesco Asset Management S.A. DTVM – since May 2014, and was director of BRAM US from September 2011. He was also Equities Director of BRAM – Bradesco Asset Management S.A. DTVM from July 2001 to April 2014, Equities Administrator of Bradesco Templeton Ltda. from June 1998 to June 2001, Equities Director of Banco ABN Amro S.A. from February to June 1998, and Portfolio Manager for Banco Unibanco S.A. from October 1992 to January 1995. Mr. Herculano Aníbal Alves warrants that he is not guilty of any offense that could prevent him from exercising the activities of the position for which he has been designated, and that he does not occupy any positions in companies that could be considered to be the Company's competitors in the market, and that he has no interest conflicting with those of the Company.

Marcello Joaquim Pacheco – 112.459.108-76

Member of the Audit Board (Substitute member). Academic qualifications: Degree in law from São Francisco University. Specialization in Controllership, Financial Administration and Stockholding Law at the Getúlio Vargas Foundation. He has been Executive Director of Marpache Serviços Especializados em Administração since 2009, and also practices law, specializing in stockholding law. He has experience in all aspects of accounting, auditing and financial administration. In recent years he has been a member of the Audit Board of several companies. Mr. Marcello Joaquim Pacheco warrants that he is not guilty of any offense that could prevent him from exercising the activities of the position for which he has been designated, and that he does not occupy any positions in companies that could be considered to be the Company's competitors in the market, and that he has no interest conflicting with those of the Company.

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12.7/8 - Composition of the committees Name Type of committee Position occupied Profession Date of election Period of office Percentage

participation in meetings

CPF (Federal tax number) Description of other committees

Description of other posts held Date of birth Date elected Number of consecutive periods of office

Other positions and functions held in the Issuer

Alexandre Grendene Bartelle Other committees Chair of the committee Industrial 02/12/2015 Indeterminate 100.00%

098.675.970-87 Stock Options Management Committeee 01/23/1950 02/12/2015 1

Chair of the Board of Directors

Pedro Grendene Bartelle Other committees Sitting member of the committee Industrial 02/12/2015 Indeterminate 100.00%

098.647.840-72 Stock Options Management Committeee 01/23/1950 02/12/2015 1

Vice-Chair of the Board of Directors

Renato Ochman Other committees Sitting member of the committee Lawyer 02/12/2015 Indeterminate 100.00%

375.739.690-15 Stock Options Management Committeee 02/21/1960 02/12/2015 1

Member of the Board of Directors

Professional experience / Statement of any convictions / Criteria for independence

Alexandre Grendene Bartelle - 098.675.970-87

Academic qualifications: Degree in law from the University of Caxias do Sul, Rio Grande do Sul. Served as Chief Executive Officer until April 25, 2013, when he left the post to dedicate himself exclusively to the function of Chairman of the Board of Directors, which post he occupied from August 18, 2004. He was one of the people responsible for the growth of the Company, with the development of innovative concepts, technology, products and design. Mr. Alexandre Grendene Bartelle declares that he has not been accused of any crime that would prevent him from exercising the activities of the position for which he is being designated and that he does not occupy any post in companies that might be considered competitors in the market with the Company, and that he has no conflict of interest with the Company.

Pedro Grendene Bartelle - 098.647.840-72

Academic qualifications: Degree in law from the University of Caxias do Sul, Rio Grande do Sul. Served as Deputy CEO until April 25, 2013, when he left the post to dedicate himself exclusively to the function of Vice-Chair of the Board of Directors, which post he has occupied since August 18, 2004. He was one of the people responsible for the growth of the Company, with the development of innovative concepts, technology, products and design. Mr. Pedro Grendene Bartelle declares that he has not been accused of any crime that would prevent him from exercising the activities of the position for which he is being designated and that he does not occupy any post in companies that might be considered competitors in the market with the Company, and that he has no conflict of interest with the Company.

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Renato Ochman - 375.739.690-15

Academic qualifications: Law degree from PUC University of Rio Grande do Sul. Master's degree, and Post-graduate degree in Commercial Law from PUC University of Sao Paulo. Mr. Renato Ochman is a partner in the law firm Ochman, Real Amadeo Advogados Associados with offices in São Paulo, São Paulo State and Porto Alegre, Rio Grande do Sul, an office specialized in corporate and stockholding law and the law of the capital markets, in consultancy, stockholding and civil litigation; in initial public offerings of companies; and in issuance of securities, and structuring of family succession, among other subjects. He is a visiting professor of courses at the GVLaw School of the Getúlio Vargas Foundation in São Paulo; member of the Council of the Graded School of São Paulo, and a member of the Brazilian Bar Association – in both the São Paulo and the Rio Grande do Sul Chapters. Mr. Renato Ochman declares that he has not been accused of any crime that would prevent him from exercising the activities of the position for which he is being designated and that he does not occupy any post in companies that might be considered competitors in the market with the Company, and that he has no conflict of interest with the Company.

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12.9 - Existence of any conjugal relationship, stable union or family relationship up to second degree in relation to managers of the Issuer, subsidiaries and parent companies.

Name Personal tax

number (CPF) Formal name of the Issuer, subsidiary or parent company.

CNPJ (Corporate Tax Nº)

Type of family relationship with manager of the Issuer or subsidiary

Position

Manager of the Issuer or subsidiary

Alexandre Grendene Bartelle 098.675.970-87 Grendene S.A. 89.850.341/0001-60 Brother or sister (first degree family relationship)

Chair of the Board of Directors

Related party

Pedro Grendene Bartelle 098.647.840-72 Grendene S.A. 89.850.341/0001-60

Vice-Chair of the Board of Directors

Remarks

Manager of the Issuer or subsidiary

Alexandre Grendene Bartelle 098.675.970-87 MHL Calçados Ltda 07.512.861/0001-06 Brother or sister (first degree family relationship)

Chief Executive Officer

Related party

Pedro Grendene Bartelle 098.647.840-72 MHL Calçados Ltda 07.512.861/0001-06

Deputy CEO

Remarks

Manager of the Issuer or subsidiary

Pedro Grendene Bartelle 098.647.840-72 Grendene S.A. 89.850.341/0001-60 Brother or sister (first degree family relationship)

Vice-Chair of the Board of Directors

Related party

Alexandre Grendene Bartelle 098.675.970-87 Grendene S.A. 89.850.341/0001-60

Chair of the Board of Directors

Remarks

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12.9 - Existence of any conjugal relationship, stable union or family relationship up to second degree in relation to managers of the Issuer, subsidiaries and parent companies.

Name Personal tax

number (CPF) Formal name of the Issuer, subsidiary or parent company.

CNPJ (Corporate Tax Nº)

Type of family relationship with manager of the Issuer or subsidiary

Position

Manager of the Issuer or subsidiary

Pedro Grendene Bartelle 098.647.840-72 MHL Calçados Ltda 07.512.861/0001-06 Brother or sister (first degree family relationship)

Deputy CEO

Related party

Alexandre Grendene Bartelle 098.675.970-87 MHL Calçados Ltda 07.512.861/0001-06

Chief Executive Officer

Remarks

Manager of the Issuer or subsidiary

Pedro Grendene Bartelle 098.647.840-72 Grendene S.A. 89.850.341/0001-60 Son or daughter (first degree family relationship)

Vice-Chair of the Board of Directors

Related party

Pedro Bartelle 685.957.430-53 Grendene S.A. 89.850.341/0001-60

Stockholder

Remarks

Manager of the Issuer or subsidiary

Pedro Grendene Bartelle 098.647.840-72 Grendene S.A. 89.850.341/0001-60 Son or daughter (first degree family relationship)

Vice-Chair of the Board of Directors

Related party

Giovana Bartelle Velloso 685.957.780-00 Grendene S.A. 89.850.341/0001-60

Stockholder

Remarks

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12.9 - Existence of any conjugal relationship, stable union or family relationship up to second degree in relation to managers of the Issuer, subsidiaries and parent companies.

Name Personal tax

number (CPF) Formal name of the Issuer, subsidiary or parent company.

CNPJ (Corporate Tax Nº)

Type of family relationship with manager of the Issuer or subsidiary

Position

Pedro Grendene Bartelle 098.647.840-72 Grendene S.A. 89.850.341/0001-60 Son or daughter (first degree family relationship)

Vice-Chair of the Board of Directors

Related party

André de Camargo Bartelle 354.047.748-94 Grendene S.A. 89.850.341/0001-60

Stockholder

Remarks

Pedro Grendene Bartelle 098.647.840-72 Grendene S.A. 89.850.341/0001-60 Son or daughter (first degree family relationship)

Vice-Chair of the Board of Directors

Related party

Gabriella de Camargo Bartelle 370.718.138-33 Grendene S.A. 89.850.341/0001-60

Stockholder

Remarks

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12.10 - Relationships of subordination, provision of service or control between managers and subsidiaries, parent companies or others

Identification Tax number (CPF / CNPJ)

Type of relationship between the Manager and the related party

Type of related person

Position / Function

Business year ending Dec. 31, 2017

Manager of the Issuer

Pedro Grendene Bartelle 098.647.840-72 Control Client

Vice-Chair of the Board of Directors

Related party

Vulcabras|Azaleia – CE, Calçados e Artigos Esportivos S.A. 00.954.394/0001-17

Controller Stockholder

Remarks

The transactions refer to sales of input and moulds used in the production of footwear. - The average period of receipt is approximately 32 days.

Manager of the Issuer

Pedro Grendene Bartelle 098.647.840-72 Control Supplier

Vice-Chair of the Board of Directors

Related party

Vulcabras|Azaleia – CE, Calçados e Artigos Esportivos S.A. 00.954.394/0001-17

Controller Stockholder

Remarks

Purchase of services referred to commissions. - The average period of payment is approximately 11 days.

Manager of the Issuer

Pedro Grendene Bartelle 098.647.840-72 Control Client

Vice-Chair of the Board of Directors

Related party

Vulcabras|Azaleia - BA Calçados e Artigos Esportivos S.A. 00.733.658/0001-02

Controller Stockholder

Remarks

The transactions refer to sales of moulds used in the production of footwear. - The average period of receipt is approximately 33 days.

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12.10 - Relationships of subordination, provision of service or control between managers and subsidiaries, parent companies or others

Identification Tax number (CPF / CNPJ)

Type of relationship between the Manager and the related party

Type of related person

Position / Function

Business year ending Dec. 31, 2017

Manager of the Issuer

Maílson Ferreira da Nóbrega 043.025.837-20 Control Supplier

Member of the Board of Directors

Related party

Mailson da Nóbrega Consultoria S/C Ltda 01.579.701/0001-90

Owner partner

Remarks

Assessment

Manager of the Issuer

Renato Ochman 375.739.690-15 Control Supplier

Member of the Board of Directors

Related party

Ochman, Real Amadeo Advogados Associados 62.447.131/0001-79

Owner partner

Remarks

Assessment

Business year ending Dec. 31, 2016 Manager of the Issuer

Pedro Grendene Bartelle 098.647.840-72 Control Supplier

Vice-Chair of the Board of Directors

Related party

Vulcabras|Azaleia – CE, Calçados e Artigos Esportivos Ltda 00.954.394/0001-17

Controller Stockholder

Remarks

Purchase of services referred to commissions. - The average period of payment is approximately 11 days. Trademark use license. - The average period of payment is approximately 83 days

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12.10 - Relationships of subordination, provision of service or control between managers and subsidiaries, parent companies or others

Identification Tax number (CPF / CNPJ)

Type of relationship between the Manager and the related party

Type of related person

Position / Function

Manager of the Issuer

Pedro Grendene Bartelle 098.647.840-72 Control Supplier

Vice-Chair of the Board of Directors

Related party

Vulcabras|Azaleia Argentina S.A.

Controller Stockholder

Remarks

Purchase of products and services. - The average period of payment is approximately 1 day.

Manager of the Issuer

Pedro Grendene Bartelle 098.647.840-72 Control Client

Vice-Chair of the Board of Directors

Related party

Vulcabras Distribuidora de Artigos Esportivos Ltda 08.193.994/0001-11

Controller Stockholder

Remarks

The transactions refer to sales of shoes – average period of receipt 85 days.

Manager of the Issuer

Alexandre Grendene Bartelle 098.675.970-87 Control Client

Chair of the Board of Directors

Related party

Lagoa Clara Agrícola S.A. 12.599.553/0001-91

Chair of the Board of Directors

Remarks

Recovery of expenses. - The average period of receipt is approximately 31 days/ Purchase of fixed assets. The average period of payment is approximately 1 day.

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12.10 - Relationships of subordination, provision of service or control between managers and subsidiaries, parent companies or others

Identification Tax number (CPF / CNPJ)

Type of relationship between the Manager and the related party

Type of related person

Position / Function

Manager of the Issuer

Maílson Ferreira da Nóbrega 043.025.837-20 Control Supplier

Member of the Board of Directors

Related party

Mailson da Nóbrega Consultoria S/C Ltda 01.579.701/0001-90

Owner partner

Remarks

Assessment

Manager of the Issuer

Renato Ochman 375.739.690-15 Control Supplier

Member of the Board of Directors

Related party

Ochman, Real Amadeo Advogados Associados 62.447.131/0001-79

Owner partner

Remarks

Assessment

Business year ending Dec. 31, 2015 Manager of the Issuer

Pedro Grendene Bartelle 098.647.840-72 Control Client

Vice-Chair of the Board of Directors

Related party

Vulcabras|Azaléia – CE, Calçados e Artigos Esportivos S.A. 00.954.394/0001-17

Controller Stockholder

Remarks

The transactions refer to sales of input materials used in the production of footwear. - The average period of receipt is approximately 85 days.

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12.10 - Relationships of subordination, provision of service or control between managers and subsidiaries, parent companies or others

Identification Tax number (CPF / CNPJ)

Type of relationship between the Manager and the related party

Type of related person

Position / Function

Manager of the Issuer

Pedro Grendene Bartelle 098.647.840-72 Control Supplier

Vice-Chair of the Board of Directors

Related party

Vulcabras|Azaleia – CE, Calçados e Artigos Esportivos S.A.

Controller Stockholder

Remarks

Purchases of input materials used in the production of footwear. – The average period of payment is approximately 31 days. Trademark use license, 75 days. Purchases of services and referred to commissions, 15 days.

Manager of the Issuer

Pedro Grendene Bartelle 098.647.840-72 Control Client

Vice-Chair of the Board of Directors

Related party

Vulcabras|Azaléia – BA, Calçados e Artigos Esportivos S.A. 00.733.658/0001-02

Controller Stockholder

Remarks

The transactions refer to sales of input materials used in the production of footwear. - The average period of receipt is approximately 63 days.

Manager of the Issuer

Pedro Grendene Bartelle 098.647.840-72 Control Client

Vice-Chair of the Board of Directors

Related party

Vulcabras|Azaleia – RS, Calçados e Artigos Esportivos S.A. 98.408.073/0001-11

Controller Stockholder

Remarks

The transactions refer to sales of input materials used in the production of footwear. - The average period of receipt is approximately 81 days.

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12.10 - Relationships of subordination, provision of service or control between managers and subsidiaries, parent companies or others

Identification Tax number (CPF / CNPJ)

Type of relationship between the Manager and the related party

Type of related person

Position / Function

Manager of the Issuer

Pedro Grendene Bartelle 098.647.840-72 Control Client

Vice-Chair of the Board of Directors

Related party

Vulcabras|Azaleia Argentina S.A.

Controller Stockholder

Remarks

The transactions refer to sales of input materials used in the production of footwear. - The average period of receipt is approximately 114 days.

Manager of the Issuer

Pedro Grendene Bartelle 098.647.840-72 Control Supplier

Vice-Chair of the Board of Directors

Related party

Vulcabras|Azaleia Argentina S.A.

Controller Stockholder

Remarks

Purchases of input materials used in the production of footwear - The average period of payment is approximately 1 day.

Manager of the Issuer

Pedro Grendene Bartelle 098.647.840-72 Control Client

Vice-Chair of the Board of Directors

Related party

Vulcabras Distribuidora de Artigos Esportivos Ltda 08.193.994/0001-11

Controller Stockholder

Remarks

The transactions refer to sales of shoes. - The average period of receipt is approximately 70 days.

Manager of the Issuer

Pedro Grendene Bartelle 098.647.840-72 Control Client

Vice- Chair of the Board of Directors

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12.10 - Relationships of subordination, provision of service or control between managers and subsidiaries, parent companies or others

Identification Tax number (CPF / CNPJ)

Type of relationship between the Manager and the related party

Type of related person

Position / Function

Related party

Distribuidora de Calçados e Artigos Esportivos Cruzeiro do Sul Ltda 12.760.928/0001-53

Controller Stockholder

Remarks

The transactions refer to sales of shoes. – The average period of receipt 66 days.

Manager of the Issuer

Pedro Grendene Bartelle 098.647.840-72 Control Client

Vice-Chair of the Board of Directors

Related party

Calçados Azaleia Colômbia Ltda

Controller Stockholder

Remarks

The transactions refer to sales of shoes. - The average period of receip is approximately 19 day.

Manager of the Issuer

Pedro Grendene Bartelle 098.647.840-72 Control Client

Vice-Chair of the Board of Directors

Related party

Calçados Azaleia Peru S.A.

Controller Stockholder

Remarks

The transactions refer to sales of shoes. - The average period of receipt is approximately 18 days.

Manager of the Issuer

Pedro Grendene Bartelle 098.647.840-72 Control Client

Chair of the Board of Directors

Related party

Lagoa Clara Agrícola S.A. 12.599.553/0001-91

Controller Stockholder

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12.10 - Relationships of subordination, provision of service or control between managers and subsidiaries, parent companies or others

Identification Tax number (CPF / CNPJ)

Type of relationship between the Manager and the related party

Type of related person

Position / Function

Remarks

Recovery of expenses. – The average period of receipt 31 days.

Manager of the Issuer

Maílson Ferreira da Nóbrega 043.025.837-20 Control Supplier

Member of the Board of Directors

Related party

Mailson da Nóbrega Consultoria S/C Ltda 01.579.701/0001-90

Owner partner

Remarks

Assessment

Manager of the Issuer

Renato Ochman 375.739.690-15 Control Supplier

Member of the Board of Directors

Related party

Ochman, Real Amadeo Advogados Associados 62.447.131/0001-79

Owner partner

Remarks

Assessment

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12.11 - Agreements, including insurance policies, for payment or reimbursement of expenses borne by the

managers.

There are no agreements, including insurance policies, that provide for the payment or reimbursement of expenses borne by the managers, arising from reparation of damages caused to third parties or to the Company, from penalties imposed by agents of the state, or arising from agreements for the purpose of terminating administrative or court proceedings, in the exercise of their functions.

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12.12 – Other material information

Information relating to the General Meetings held in 2015, 2016, 2017 and 2018:

Date held Type Manner of installation Quorum

Apr 06, 2015

Ordinary and Extraordinary

General Meetings of Stockholders

1st convocation Stockholders representing more than the 81.5% quorum legally necessary for the Meeting to be in session.

Apr 11, 2016 Ordinary General

Meetings of Stockholders

1st convocation Stockholders representing more than the required legal quorum of 84.2% for installation of the General Meeting

Apr 10, 2017

Extraordinary and Ordinary

General Meetings of Stockholders

1st convocation Stockholders representing more than the quorum of 85.4% legally required for installation of the Meeting.

Apr 23, 2018

Extraordinary and Ordinary

General Meetings of Stockholders

1st convocation Stockholders representing more than the quorum of 86.1% legally required for installation of the Meeting.

Positions held by the members of the Board of Directors of Grendene S.A. in other companies or entities, in compliance with GAE 1186/11. Alexandre Grendene Bartelle AGB Montebeluna Agrícola Ltda – CEO AGB San Marino Agropecuária Ltda – Managing Partner AGP Negócios e Participações S.A. – CEO Alexandre G. Bartelle Participações S.A. – CEO Jazz Participações Imobiliárias Ltda – Manager Karina Empreendimentos Imobiliários Ltda – Manager Lagoa Clara Agrícola S.A. – Chief Administrative Officer and Chair of the Board of Directors MHL Calçados Ltda. – CEO Monza Negócios e Participações Ltda - CEO Nova Milano Investimentos Ltda – CEO Nova Trento Negócios e Participações Ltda – Manager Nova Vicenza Negócios e Participações S.A. – CEO Unicasa Indústria de Móveis S.A. – Deputy Chairman of the Board of Directors Veneza Negócios e Participações S.A. – CEO Vulcabrás|Azaléia S.A. – Deputy Chairman of the Board of Directors Da Mata S.A. – Açúcar e Álcool - Deputy Chairman of the Board of Directors Pedro Grendene Bartelle AGP Negócios e Participações S.A. – Deputy CEO Agropecuária Grendene Ltda – CEO Alexandre G. Bartelle Participações S.A. – Deputy CEO Gianpega Negócios e Participações S.A. – CEO Gold Negócios e Participações S.A. – CEO Grendene Negócios Ltda – CEO Manacá Negócios e Participações Ltda – Manager MHL Calçados Ltda. – CEO Nova Milano Investimentos Ltda – Deputy CEO Nova Trento Negócios e Participações Ltda – Manager Nova Vicenza Negócios e Participações S.A. – Deputy CEO Veneza Negócios e Participações S.A. – Deputy CEO Verona Negócios e Participações S.A. – Deputy CEO

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12.12 – Other material information

Maílson Ferreira da Nóbrega Cosan S.A. – Member of the Board of Directors Rodobens Negócios Imobiliários S.A. – Member of the Board of Directors Banco Pine S.A. – Member of the Board of Directors Fertilizantes Heringer S.A. – Member of the Board of Directors Rumo S.A. – Member of the Board of Directors Renato Ochman SuperBac Proteção Ambiental S.A. - Member of the Board of Directors Oswaldo de Assis Filho Banco BTG Pactual S.A. – Executive Director Febraban – Brazilian Banks' Federation (Federação Brasileira de Bancos) – Director Pan Seguros – Member of the Board of Directors Walter Janssen Neto Intelbrás S.A. – Member of the Board of Directors Jornal O Correio do Povo de Jaraguá do Sul, SC – Partner

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13.1 - Description of the remuneration policy or practice, including that of non-statutory directors

a. Objectives of the remuneration policy or practice

The objective of each element of the managers’ remuneration is to encourage alignment of the interests of the managers with the targets of the Company, so as to stimulate their commitment and also to attract and maintain highly qualified professionals.

The Company has no statutory committee. On 12 February 2015 the Board of Directors in its minute of meeting nº 59, established a committee composed of three members, all belonging to the Board of Directors to meet the provisions of items 2.1 and 2.2 of the Regulation of the Stock Option Plan Purchase or the Company's Share Subscription which provides that the plan administration can be delegated to a committee specially created for both.

The members of this committee do not receive any remuneration due to this activity. The only compensation received is as Board member as is shown in items 13.1.b.ii, 13.2 and 13.11 of this form.

b. Composition of the remuneration, indicating:

i. Description of the elements of the remuneration and the objectives of each one of them

The members of the Board of Directors receive only a fixed monthly remuneration for performance of their functions, thus, other than the fixed monthly remuneration referred to, there are no other elements in the remuneration of the members of the Board of Directors.

The members of the Audit Board receive only a fixed monthly remuneration for performance of their functions, thus, other than the fixed monthly remuneration referred to, there are no other elements in the remuneration of the members of the Audit Board.

As to the remuneration of the statutory and non statutory officers, the elements of their remuneration are: the fixed monthly salary; and remuneration based on shares in the Company.

There is no other direct and indirect benefits to the members of the Board of Directors, Audit Board and Executive Board.

The fixed remuneration seeks to remunerate the executives on attractive terms in comparison to the market with a view to attracting and retaining good professionals.

The share-based remuneration seeks an alignment with the stockholders, including the performance of the shares in the market among the factors that affect the executive's income. This remuneration takes the form of grant of options to purchase shares in the Company, with a period of acquisition of right (vesting) divided into three years (1/3 may be exercised in one year, 2/3 in two years and 3/3 in three years) so as to discourage excessive focus on the short term.

ii. What is the proportion of each element in the total remuneration?

2017

Board of Directors Committee Audit Board Executive Board

Fixed remuneration 100% - 100% 68%

Remuneration based on shares - - - 32%

2016

Board of Directors Committee Audit Board Executive Board

Fixed remuneration 100% - 100% 70%

Remuneration based on shares - - - 30%

2015

Board of Directors Committee Audit Board Executive Board

Fixed remuneration 100% - 100% 75%

Remuneration based on shares - - - 25%

iii. Methodology of calculation and adjustment of each one of the elements of the remuneration

The amount of fixed remuneration of the members of the Board of Directors is set annually by the Annual General Meeting based on market values and the economic/financial situation of the Company. The fixed remuneration of the Audit Board is

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13.1 - Description of the remuneration policy or practice, including that of non-statutory directors

approved by the Annual General Meeting and obeys the limits defined in Law 6404 – Article 162, §3. The members of the Board of Directors and of the Audit Board do not receive any other type of remuneration.

The fixed remuneration of the statutory and non-statutory directors takes into account experience for exercise of the post, references values in the market, which are obtained through research, information in business newspapers and magazines specialized in remuneration of executives, and the Company’s economic/financial situation. The remuneration of the statutory Directors is set annually by the Board of Directors.

The number of Options granted to the executives is decided annually by the Committee specified in Item 2.2 of the Regulations of the Stock Option Purchase and Subscription Plan, taking as a basis the performance of the Company in the previous year and accordance with the said Regulations (approved by the Ordinary and Extraordinary General Meeting of Stockholders of April 14, 2008 as amended by the meetings of the Board of Directors of March 1, 2012 and February 12, 2015).

iv. Reasons for the composition of the remuneration The main reasons that justify the composition of the remuneration are:

To help attract and retain professionals.

To ensure remuneration appropriate to the market.

The Company’s economic and financial situation.

Long-term incentive; and

Alignment of interests with those of the stockholders. c. Principal indicators of performance that are taken into consideration in the determination of each element of

the remuneration The principal indicators are the change in the Company's Ebit in comparison with the evolution of the market as a whole; Grendene's share of the total of Brazilian footwear exports; Grendene's share in Brazilian apparent footwear consumption; and a qualitative evaluation of the products launched and the satisfaction of the 'trade'. The fixed remuneration takes market parameters into account comparing the Company's practices with those of companies of an equal size for functions of the same complexity and responsibility, and also inflation in the previous year. The share-based remuneration is in accordance with the Regulations of the Stock Options Purchase and Subscription Plan approved by the Annual General Meeting held on April 14, 2008, and amendments approved by the meeting of the Board of Directors of March 1, 2012 and February 12, 2015. The quantity of options granted is decided in a Meeting of the Board of Directors, which takes into account basically the profit obtained by the Company in the previous business year, and the indicators described above. The options are granted with an exercise price based on the price of the share in the market, and this remuneration only becomes effective if during the period of the Plan the market value of the shares grows faster than monetary adjustment by the IPCA inflation index, which is applied to the exercise price of the grant up to the date of exercise of the option. According to the plan, annually, during the period of the Plan, the Company’s Board of Directors, taking into account the premises for grant, will decide the Beneficiaries, in the form specified in Clause I of the Plan, and also the number of shares that may be acquired with the exercise of each option, the price of exercise of each option and the conditions of its payment, the periods and conditions of exercise of each option and any other conditions relating to them. The Options, as specified in the said Plan, shall have a total vesting period of 3 years, being able to be exercised as follows: (i) Up to 1/3 after one (1) year from the date of grant; (ii) a further 1/3 after 2 years from the date of the grant, making a total limit of 2/3; and (iii) the remaining 1/3 after 3 years from the date of the grant. The options shall have a period of validity of six (6) years, from the date of grant. The grant of options for purchase of shares under the said Regulations is made through signing of Subscription Contracts between the Company and the Beneficiaries. These contracts must specify, without prejudice to other conditions determined by the Board of Directors or Committee (as the case may be): (a) the quantity of shares subject of the grant; (b) the conditions for acquisition of the right to exercise of the option; (c) the final period for exercise of the share purchase option; and (d) the period of exercise and conditions of payment. The Board of Directors or Committee (as the case may be) may impose terms and/or prior conditions for the exercise of the option and impose restrictions on the transfer of the shares acquired with the exercise of the Option, and may also reserve to the Company options of repurchase or rights of preference in the case of sale by the Beneficiary of the same shares, up to the termination of the period and/or compliance with the conditions set. The Subscription Contracts shall be prepared individually for each

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13.1 - Description of the remuneration policy or practice, including that of non-statutory directors

Beneficiary, and the Board of Directors or the Committee (as the case may be) may establish differentiated terms and conditions for each Subscription Contract, without the need for application of any rule of equality of rights or of analogy between the Beneficiaries, even if they are in similar or identical situations. The purchase options granted under the said Regulations, and also their exercise by the Beneficiaries, have no relationship with, nor are they linked to, their fixed remuneration, or any shares in the profits. Without prejudice to any provision to the contrary specified in the said Regulations or in the Subscription Contract, the options granted shall be extinguished automatically, all their effects ceasing for all purposes of law, in the following events: (a) their full exercise; (b) expiry of the period of validity of the option; (c) agreement to dissolve the Subscription Contract; or (d) if the Company is dissolved, liquidated or declared bankrupt. Signing of the Subscription Contract will mean acceptance, by the Beneficiary, of all the conditions established in the Plan and the said Regulations. d. How the remuneration is structured to reflect changes in the performance indicators The fixed remuneration is compared with the amounts practiced in other companies of equal scale. The share-based remuneration reflects the value of the Company, which is the result of the valuation by the market of the Company's performance; and an evaluation by the Committee, submitted to the Board of Directors, of the change in the indicators. e. How the remuneration policy or practice aligns with the short-, medium- and long-term interests of the Issuer See Share-based remuneration, in items 13.4 – sub-items 'c', 'd' and 'e'. f. Existence of remuneration paid by subsidiaries or controlling stockholders, whether direct or indirect There is no form of remuneration of Chief Officers or members of the Board of Directors paid by any direct or indirect subsidiary, jointly-controlled subsidiary or parent company. g. Existence of any remuneration or benefit linked to the occurrence of any corporate event, such as disposal of

stockholding control of the Issuer There is no remuneration or benefit linked to the occurrence of corporate events, however, in the event of dissolution, merger, absorption, split or liquidation of the Company, the Beneficiaries of the Stock Options Purchase and Subscription Plan may exercise such options as they have that may already be exercised (that is to say, for which the vesting period has been completed) in the period between the date of convocation of the General Meeting of Stockholders whose object is to decide on the dissolution, merger, absorption, split or liquidation of the Company and the date of its being held. To the contrary, the Options will be extinguished, as will also the Regulations of the Plan of Grant and the respective Subscription Contracts.

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13.2. - Total of the remuneration of the Board of Directors, the Executive Board and the Audit Board

Total remuneration for the current business year to December 31, 2018 – Annual amounts

Board of Directors Executive Board Audit Board Total

No. of members 6.00 3.00 3.00 12.00

No. of remunerated members 6.00 3.00 3.00 12.00

Annual fixed remuneration

Salary or 'pro-labore' payment 1,300,000.00 5,000,000.00 500,000.00 6,800,000.00

Direct and indirect benefits 0.00 0.00 0.00 0.00

Attendance at committees 0.00 0.00 0.00 0.00

Others 0.00 0.00 0.00 0.00

Description of other fixed

remunerations

Variable remuneration

Bonus 0.00 0.00 0.00 0.00

Profit shares 0.00 0.00 0.00 0.00

Attendance at meetings 0.00 0.00 0.00 0.00

Commissions 0.00 0.00 0.00 0.00

Others 0.00 0.00 0.00 0.00

Description of other variable

remunerations

Post-employment 0.00 0.00 0.00 0.00

Leaving of post 0.00 0.00 0.00 0.00

Share-based 0.00 2,500,000.00 0.00 2,500,000.00

Remarks

There is no other direct

and indirect benefits.

There is no other direct

and indirect benefits.

There is no other direct

and indirect benefits.

Total of the remuneration 1,300,000.00 7,500,000.00 500,000.00 9,300,000.00

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13.2. - Total of the remuneration of the Board of Directors, the Executive Board and the Audit Board Total remuneration for the current business year to December 31, 2017 – Annual amounts

Board of Directors Executive Board Audit Board Total

No. of members 6.00 3.00 3.00 12.00

No. of remunerated members 6.00 3.00 3.00 12.00

Annual fixed remuneration

Salary or 'pro-labore' payment 1,116,000.00 4,159,000.00 427,500.00 5,702,500.00

Direct and indirect benefits 0.00 0.00 0.00 0.00

Attendance at committees 0.00 0.00 0.00 0.00

Others 0.00 0.00 0.00 0.00

Description of other fixed

remunerations

Variable remuneration

Bonus 0.00 0.00 0.00 0.00

Profit shares 0.00 0.00 0.00 0.00

Attendance at meetings 0.00 0.00 0.00 0.00

Commissions 0.00 0.00 0.00 0.00

Others 0.00 0.00 0.00 0.00

Description of other variable

remunerations

Post-employment 0.00 0.00 0.00 0.00

Leaving of post 0.00 0.00 0.00 0.00

Share-based 0.00 1,992,445.00 0.00 1,992,445.00

Remarks

Total of the remuneration 1,116,000.00 6,151,445.00 427,500.00 7,694,945.00

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13.2. - Total of the remuneration of the Board of Directors, the Executive Board and the Audit Board Total remuneration for the business year to Dec. 31, 2016 – Annual amounts

Board of Directors Executive Board Audit Board Total

No. of members 6.00 3.00 3.00 12.00

No. of remunerated members 6.00 3.00 3.00 12.00

Annual fixed remuneration

Salary or 'pro-labore' payment 1,056,000.00 3,914,640.00 401,400.00 5,372,040.00

Direct and indirect benefits 0.00 0.00 0.00 0.00

Attendance at committees 0.00 0.00 0.00 0.00

Others 0.00 0.00 0.00 0.00

Description of other fixed

remunerations

Variable remuneration

Bonus 0.00 0.00 0.00 0.00

Profit shares 0.00 0.00 0.00 0.00

Attendance at meetings 0.00 0.00 0.00 0.00

Commissions 0.00 0.00 0.00 0.00

Others 0.00 0.00 0.00 0.00

Description of other variable

remunerations

Post-employment 0.00 0.00 0.00 0.00

Leaving of post 0.00 0.00 0.00 0.00

Share-based 0.00 1,675,974.30 0.00 1,675,974.30

Remarks

There is no other direct

and indirect benefits.

There is no other direct

and indirect benefits.

There is no other direct

and indirect benefits.

Total of the remuneration 1.056,000.00 5,590,614.30 401,400.00 7,048,014.30

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13.2. - Total of the remuneration of the Board of Directors, the Executive Board and the Audit Board Total remuneration for the business year to Dec. 31, 2015 – Annual amounts

Board of Directors Executive Board Audit Board Total

No. of members 6.00 3.00 3.00 12.00

No. of remunerated members 6.00 3.00 3.00 12.00

Annual fixed remuneration

Salary or 'pro-labore' payment 984,000.00 3,576,000.00 356,400.00 4,916,400.00

Direct and indirect benefits 0.00 0.00 0.00 0.00

Attendance at committees 0.00 0.00 0.00 0.00

Others 0.00 0.00 0.00 0.00

Description of other fixed

remunerations

Variable remuneration

Bonus 0.00 0.00 0.00 0.00

Profit shares 0.00 0.00 0.00 0.00

Attendance at meetings 0.00 0.00 0.00 0.00

Commissions 0.00 0.00 0.00 0.00

Others 0.00 0.00 0.00 0.00

Description of other variable

remunerations

Post-employment 0.00 0.00 0.00 0.00

Leaving of post 0.00 0.00 0.00 0.00

Share-based 0.00 1,185,070.38 0.00 1,185,070.38

Remarks

There is no other direct

and indirect benefits.

There is no other direct

and indirect benefits.

There is no other direct

and indirect benefits.

Total of the remuneration 984,000.00 4,761,070.38 356,400.00 6,101,470.38

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13.3 - Variable remuneration of the Board of Directors, Executive Board and the Audit Board The remuneration policy of Grendene S.A. does not include programs of remuneration in the form of cash payments during or in respect of the business year for the members of the Board of Directors, Audit Board and Executive Board.

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13.4 - Share-based remuneration plan for the Board of Directors and the Executive Board a. General terms and conditions The Regulations of the Program establish the rules relating to the Program of Options for Purchase or Subscription of Shares of Grendene S.A. and its subsidiaries ('the Company'), instituted under the Stock Options Purchase and Subscription Plan ('the Plan'), submitted to decision of the Extraordinary General Meeting of stockholders of the Company on April 14, 2008. The Plan and Regulations currently in force were recommended by the Board of Directors in a meeting held on March 13, 2008, and alterations were approved in the meeting of the Board of Directors of March 1, 2012 and February 12, 2015. Definitions established in the Plan: For the purposes of the Regulations governing Grant of Options for Purchase or Subscription of Shares currently in effect, the terms employed below have the following definitions: i) Stockholder: Individual or legal entity owning a share in the Company.

ii) Shares: Nominal common shares that will be or have been issued by the Company.

iii) Beneficiary: The Eligible Employee to whom the Option is in fact granted.

iv) Eligible Employees: Executives at the levels of Members of the Board of Directors, Executive Board and Management, except those who are part of the Controlling Stockholding Group, who are able to take part in the Stock Options Purchase and Subscription Plan, in the form of the indications specified in the said Regulations.

v) Company: The company Grendene S.A. and its subsidiary companies.

vi) Subscription Contract: The Private Instrument of Grant of Option to Purchase or Subscribe Shares, entered into between the Company and the Eligible Employee, through which the latter becomes a participant in the Stock Options Purchase and Subscription Plan.

vii) Date of Grant: The date of signature of the Subscription Contract, which will formalize the grant of the Options to the Beneficiaries.

viii) Separation: This means any act or event which, whether or not with just cause, puts an end to the legal relationship between the Beneficiary and the Company, except in cases of retirement, permanent invalidity or death. Separation also covers the cases of dismissal, replacement or non-reelection of a Beneficiary from a position as member of the Board of Directors or of the Executive Board, and rescission of the employment contract.

ix) Exercise of the Options: Actual purchase or subscription, by the Beneficiary, of shares relating to the Options granted to him by the Subscription Contract.

x) Option or Options: Possession by a Beneficiary of the right to acquire or subscribe shares in the Company for a previously fixed price, during a specified period of time, when the conditions established in the Regulations have been met.

xi) Exercisable Option(s): Such option(s) as have met the conditions specified for the exercise of the right of purchase or subscription of the Shares (vesting), and hence are able to be exercised.

xii) Non-exercisable Option(s): Such option(s) as has (have) not met the conditions specified for the exercise of the right of purchase or subscription of the Shares.

xiii) Option Exercise Period: Period between the date on which it is possible to buy or subscribe the shares and the limit date for the purchase or subscription.

xiv) Regulations: The Regulations of the Plan duly approved by the Board of Directors and the General Meeting of Stockholders of the Company.

xv) Option Exercise Price: Amount determined to be paid by the Beneficiary for the purchase or subscription of the shares that are subject of the option granted to him.

xvi) Vesting Period: The period established by the Company before the period for exercise of the option for purchase or subscription of shares by the Beneficiary.

b. Principal objectives of the plan The objective of the Stock Options Purchase and Subscription Plan, governed by the Regulations, is to establish rules for certain executives of the Company to be able to acquire shares issued by the company, aiming to strengthen the levels of attraction, retention and motivation of talents, and also to align the interests of executives with those of stockholders in the generation of profits and sustainable creation of value. The aim is to create a long-term incentive, based on the concept of stock options, which consists of concession of a right – and not an obligation – to buy shares in the Company for predetermined prices and in

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13.4 - Share-based remuneration plan for the Board of Directors and the Executive Board predetermined periods. The Beneficiary’s potential gain will be the result of the Purchase and Sale of the shares, that is to say, any increase in the value of the share over the exercise price. c. How the plan contributes to these objectives As a result of the plan, part of the remuneration of the executives (the part that is based on shares) depends on the value of the shares in the market, which in turn reflects the value of the stockholders' investment. The fact that the options have a period for vesting (1/3 of the total, each year, as from the date of grant) and a period of 6 years for exercise, creates an incentive for pursuing the long-term targets and penalizes the taking of actions whose aim is only short-term benefit. d. How the plan fits into the Issuer’s remuneration policy The Share-based remuneration is the Company’s only form of variable remuneration, and is the element that links the remuneration of the executives to the remuneration of the stockholders in the form of increase in value of their shares. e. How the plan aligns the interests of the managers and of the Company in the short, medium and long term

When the vesting period specified in the regulations has ended, the Beneficiary may exercise his or her option to purchase shares. The exercise of the option consists of purchase of the shares for the exercise price established, after the vesting period has expired. For this purpose, the Beneficiary must formally state the exercise of the option to the company, through an Exercise Notice, within fifteen (15) days following the meeting of the Board of Directors which approved the financial statements of the previous business year, subject to the limits specified by the vesting period. Further, at its exclusive option the Board of Directors may authorize the exercise of any options to which right has been acquired, within up to fifteen (15) days following the publication of the quarterly results, subject to the limits specified by the vesting period. The options may be exercised in their totality or in part, subject to the periods and conditions established by the Board of Directors, by the Committee (as the case may be), by these regulations (especially, but not limited to the limits specified by the vesting period), and/or by the Adhesion Contracts. The portion of the Option that has not been exercised by the date specified in the regulation shall be considered automatically to have been extinguished, without any right to indemnity. The exercise of the Option may only take place provided there has been continuity of the Beneficiary’s employment relationship with the Company or with its subsidiaries, up to the actual date of exercise of the option. The Exercise Notice may only be issued by the Beneficiary, after publication of the annual and/or quarterly results as per decision of the Board of Directors. In the Exercise Notice, the Beneficiary must indicate the quantity of shares that he/she wishes to acquire, in the form of notice to be published by the Board of Directors or by the Committee, as the case may be. With the continuity of the plan and if the executive remains in the company he/she will be the holder of options which may be exercised in the short, medium or long term, and the value of which depends on the difference between the exercise price of the options and the price of the shares traded in the market – the greater the difference, the greater the value. Thus, it is in the interest of the executives that the price of the shares of the Company should increase in a continuous and sustainable manner, and this is also in the interests of the Company’s stockholders. f. Maximum number of shares covered The share purchase options granted under the Stock Options Purchase and Subscription Plan and the Regulations in effect shall be limited to a total of 5% (five per cent) of the Company’s registered capital. The shares resulting from the exercise of the option will be issued as a result of a decision by the Board of Directors to increase the capital, within the authorized limit of the Company’s capital, or with use of shares in treasury, within the legal limits. The present shareholders will not have preference in the grant or in the exercise of the share purchase options specified in the said Regulations, as per the provisions of Article 171, § 3 of Law 6404/76. In the event that the number, type and/or class of the shares issued by the Company is changed as a result of share splits, bonuses, reverse splits or conversions, the Board of Directors shall make the corresponding adjustment in the number, type and/or class of the shares that are the subject of each Option in effect and their respective price of acquisition or subscription, as the case may be, informing the Beneficiaries in writing. g. Maximum number of options to be granted The criteria are the same as for the previous item. The company expects always to make any grant of an option to purchase a share in accordance with criteria defined in the Plan. h. Conditions for acquisition of shares When the vesting period specified in the regulations has ended, the Beneficiary may exercise his or her option to purchase shares. The exercise of the option consists of purchase of the shares for the exercise price established, after the vesting period has expired. For this purpose, the Beneficiary must formally state the exercise of the option to the Company, through an Exercise Notice, within fifteen (15) days following the meeting of the Board of Directors which approved the financial statements of the previous business year, subject to the limits specified by the vesting period. Further, at its exclusive option the Board of Directors may authorize the exercise of any options to which right has been acquired, within up to fifteen (15) days following the publication

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13.4 - Share-based remuneration plan for the Board of Directors and the Executive Board of the quarterly results, subject to the limits specified by the vesting period. The options may be exercised in their totality or in part, subject to the periods and conditions established by the Board of Directors, by the Committee (as the case may be), by these regulations (especially, but not limited to the limits specified by the vesting period), and/or by the Adhesion Contracts. The portion of the Option that has not been exercised by the date specified in the regulation shall be considered automatically to have been extinguished, without any right to indemnity. The exercise of the Option may only take place provided there has been continuity of the Beneficiary’s employment relationship with the Company or with its subsidiaries, up to the actual date of exercise of the option. The Exercise Notice may only be issued by the Beneficiary, after publication of the annual and/or quarterly results as per decision of the Board of Directors. In the Exercise Notice, the Beneficiary must indicate the quantity of shares that he/she wishes to acquire, in the form of notice to be published by the Board of Directors or by the Committee, as the case may be. When the issuance of the shares or transfer of the shares in treasury has been approved, according to the case and the decision of the Board of Directors, the shares resulting from the Exercises of Option will be transferred to or posted in the name of the respective Beneficiary, who must pay the Issue Price to the Company within five (5) days after the registry or transfer. i. Criteria for setting the price of acquisition or exercise

The Exercise Price of the option will be based on the volume-weighted average of the market price of the share in the month prior to the grant and adjusted by inflation (IPCA) up to the Exercise of Option, thus establishing Article 170, § 1, III, of Law 6404/76 as the criterion for setting the issue price. The Board of Directors, at its exclusive option, but without disobeying the legal limits referred to above, may apply a discount of up to 50% on the result of the average referred to in this item. Application of the said discount will not create an acquired right, in favor of the same or of other Beneficiaries, to similar discounts in other issues of shares. j. Criteria for setting of the exercise price As specified in the Plan: The Options shall have a total vesting period of three years, being able to be exercised as follows: up to 1/3 after one year from the date of the grant; a further 1/3 after two years from the date of the grant, making up a total limit of 2/3; and the remaining 1/3 after three years from the date of the grant. The options shall have a period of validity of six (6) years, from the date of grant. The periods have been established to generate long-term incentives. k. Form of settlement The exercise price of the option shall be paid on the date determined by the Company, in Brazilian currency, by: (i) nominal check to the Company; (ii) bank transfer to an account indicated by the Company; or (iii) any other form of payment expressly permitted by the Company and previously advised to the Beneficiary in writing. l. Restrictions on transfer of shares The shares acquired by the Beneficiaries under this plan do not have any restrictions on transfer, however, as is specified in the Regulations, the Board of Directors or the Committee (as the case may be), may impose terms and/or prior conditions for the exercise of the option, and impose restrictions on the transfer of shares acquired with the exercise of the Option, and may also reserve for the Company options to repurchase, or rights of first refusal, in the event of sale by the Beneficiary of those shares, up to the termination of the period and/or compliance with the conditions set. The Subscription Contracts will be prepared individually for each Beneficiary, and the Board of Directors or the Committee (as the case may be) may establish differentiated terms and conditions for each Subscription Contract, without the need for application of any rule of equality of rights or of analogy between the Beneficiaries, even if they are in similar or identical situations. m. Criteria and events which, when present, will result in suspension, alteration or extinction of the plan The 'Plan' and the Regulations come into effect on the date of their approval by the General Meeting of Stockholders of the Company and may be extinguished at any time by decision of the General Meeting of Stockholders. The termination of the period of validity shall not affect acquired rights - thus not affecting the efficacy of the Options that are still in effect, and granted under it. Without prejudice to any provision to the contrary specified in the Regulations or in the Subscription Contract, the options granted shall be automatically extinguished, all their effects ceasing for all purposes of law, in the following events: (a) their full exercise; (b) expiry of the period of validity of the option; (c) agreement to dissolve the Subscription Contract; or (d) if the Company is dissolved, liquidated or declared bankrupt. However, in the event of dissolution, merger, absorption, split or liquidation of the Company, the Beneficiaries of the Stock Options Purchase and Subscription Plan may exercise such of their Options as are already able to be exercised (that is to say, for which the vesting period has elapsed) in the period between the date of convocation of the general meeting of stockholders for the purpose of deciding on the dissolution, merger, incorporation, split or liquidation of the Company and the date of it being held. To the contrary, the Options will be extinguished, as will also the Regulations of the Plan of Grant and the respective Subscription Contracts.

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13.4 - Share-based remuneration plan for the Board of Directors and the Executive Board The Regulations will not prevent the realization of any operations of stockholding reorganization, such as transformation, absorption, merger or split. The Board of Directors of the Company and the Companies involved in such transactions may, at their option, decide, without prejudice to other measures which they decide for the purposes of being equitable: (a) to substitute for the shares that are subject of the Options shares in the company that is successor to the Company; (b) to bring forward the acquisition of the right to exercise the option for acquisition of shares, so as to ensure inclusion of the corresponding shares in the transaction in question; and/or (c) to pay in money the amount to which the Beneficiary would be entitled under the Plan. n. Effects on a Manager’s rights under the share-based remuneration plan caused by his leaving the corporate bodies

of the Company In the event of the Beneficiary separating from the Company by dismissal or rescission of the respective contract, if any, with or without just cause, or by resignation or by destitution from the position, or by retirement, or due to permanent disablement, or death, the rights conferred on him under these Regulations may be extinguished or modified, as specified in item 6.2 of the Regulations, transcribed below. 6.2. If, at any time during the period of the Plan being in effect, the Beneficiary: a) separates from the Company of his/her own volition, resigning from the employment, rescinding the respective contract, if any, or resigns his/her position as member of the Board of Directors or Executive Board.

(i) the Non-exercisable options on the date of his/her separation will be automatically extinguished, for the full purposes of law, independently of prior notice or indemnity; and

(ii) the Exercisable Options may be exercised within up to thirty (30) days, after which they will be automatically extinguished, independent of advice or service of notice;

b) is separated from the company at the initiative of the Company, by dismissal or rescission of the respective contract, if any, for just cause, or by destitution from his/her position due to violating the rights and attributions of a member of the Board of Directors or Executive Board, all the rights already exercisable or not yet exercisable in accordance with the respective Subscription Contract, on the date of his/her separation from the Company, will automatically be extinguished, for full purposes of law, independently of prior notice or indemnity;

c) is separated from the Company at the Company’s initiative, through dismissal or rescission of the respective contract, if any, without just cause, or by destitution from his/her position without violation of the duties and attributions of members of the Board of Directors or Executive Board:

(i) the Non-exercisable Options under the respective Subscription Contract, on the date of separation, will be automatically cancelled, independently of prior advice, notice or indemnity;

(ii) the Exercisable Options will be extended by up to thirty (30) calendar days from the announcement of the separation – no further extension being possible – after which they will automatically be cancelled, independently of prior advice, notice or indemnity;

d) separates himself from the Company by retirement or permanent disablement:

(i) the Non-exercisable Options under the Subscription Contract, on the date of his separation, will become automatically exercisable, the ending of the vesting period being brought forward; and

(ii) the Exercisable Options under the Subscription Contract on the date of his separation will remain unchanged, being able to be exercised normally under the Contract;

e) is separated from the Company by death:

(i) the Non-exercisable Options in accordance with the Subscription Contract, on the date of his death, will automatically be exercisable, the ending of the vesting period being brought forward, and the Beneficiary’s heirs and legal successors may exercise the respective option within up to twelve (12) months from the date of death, after which such rights shall be automatically extinguished, for full purposes of law, independently of prior advice or indemnity; and

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13.4 - Share-based remuneration plan for the Board of Directors and the Executive Board (ii) the Exercisable Options under the respective Subscription Contract, on the day of his death may be exercised by the heirs and legal successors of the Beneficiary, provided that they do so within up to twelve (12) months from the date of death, after which the rights shall be automatically extinguished, for full purposes of law, independently of prior advice, notice or indemnity.

Items 6.3 and 6.4 of the Regulations state: 6.3. In the case of dismissals without just cause that take place in the period of 12 months after a change of control, in accordance with the law, all the options become exercisable. 6.4. The Board of Directors shall have freedom and autonomy to decide on exceptional cases and/or change the rules specified above, without prejudice to rights already exercised and/or acquired prior to their decision.

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13.5 - Share-based remuneration of the Board of Directors and the statutory directors

Up to February 22, 2018 the Company has made several grants of shares: in 2008 (Plan I), 2009 (Plan II), 2010 (Plan III), 2011 (Plan IV), 2012 (Plan V), 2013 (Plan VI), 2014 (Plan VII), 2015 (Plan VIII), 2016 (Plan IX), 2017 (Plan X) and in 2018 (Plan XI).The Beneficiaries of the plans are Chief Officers and Managers of the Company (excluding any that are also Controlling Stockholders), as specified by the Board of Directors. The members of the Board of Directors and Audit Board are not part of the program. Share-based remuneration – Forecast for the current business year (2018)

Board of Directors Executive Board

(Statutory)

Number of members 6 3

Number of remunerated members 0 3

Weighted average price of exercise:

(a) Options – open at the beginning of the business year - 9.25

(b) Options – lost during the business year - -

(c) Options – Exercised during the business year - 9.04

(d) Options – Expired during the business year - -

Potential dilution in the event of exercise of all options granted - 0.08%

Share-based remuneration – Business year ended on December 31, 2017

Board of Directors Executive Board

(Statutory)

Number of members 6 3

Number of remunerated members 0 3

Weighted average price of exercise:

(a) Options – open at the beginning of the business year - 8.83

(b) Options – lost during the business year - -

(c) Options – Exercised during the business year - 8.92

(d) Options – Expired during the business year - -

Potential dilution in the event of exercise of all options granted - 0.16%

Share-based remuneration – Business year ended on December 31, 2016

Board of Directors Executive Board

(Statutory)

Number of members 6 3

Number of remunerated members 0 3

Weighted average price of exercise:

(a) Options – open at the beginning of the business year - 9.00

(b) Options – lost during the business year - -

(c) Options – Exercised during the business year - 9.23

(d) Options – Expired during the business year - -

Potential dilution in the event of exercise of all options granted - 0.15%

Share-based remuneration – Business year ended on December 31, 2015

Board of Directors Executive Board

(Statutory)

Number of members 6 3

Number of remunerated members 0 3

Weighted average price of exercise:

(a) Options – open at the beginning of the business year - 9.00

(b) Options – lost during the business year - -

(c) Options – Exercised during the business year - 9.23

(d) Options – Expired during the business year - -

Potential dilution in the event of exercise of all options granted - 0.12%

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13.5 - Share-based remuneration of the Board of Directors and the statutory directors Grants recognized in the business year ended on December 31, 2018

Board of Directors Executive Board (Statutory)

Grant of stock options No Plan 8 Plan 9 Plan 10 Plan 11

Date of grant - 02/12/15 02/25/16 02/16/17 02/22/18

Quantity of options granted - 195,234 278,802 217,905 164,343

Period for the options to become exercisable

-

As specified in the Plan: The Options shall have a total vesting period of three years, being able to be exercised as follows: up to 1/3 after one year from the date of the grant; a further 1/3 after two years from the date of the grant, making up a

total limit of 2/3; and the remaining 1/3 after three years from the date of the grant.

Maximum period for exercise of the options - 02/11/21 02/24/22 02/15/23 02/21/24

Period ot restriction on transfer of the shares - There is no restriction

Fair value of the options on the date of grant - R$6.07 R$7.73 R$9.49 R$13.29

Grants recognized in the business year ended on December 31, 2017

Board of Directors Executive Board (Statutory)

Grant of stock options No Plan 7 Plan 8 Plan 9 Plan 10

Date of grant - 02/13/14 02/12/15 02/25/16 02/16/17

Quantity of options granted - 119,010 195,234 278,802 217,905

Period for the options to become exercisable

-

As specified in the Plan: The Options shall have a total vesting period of three years, being able to be exercised as follows: up to 1/3 after one year from the date of the grant; a further 1/3 after two years from the date of the grant, making up a

total limit of 2/3; and the remaining 1/3 after three years from the date of the grant.

Maximum period for exercise of the options - 02/12/20 02/11/21 02/24/22 02/15/23

Period ot restriction on transfer of the shares - There is no restriction

Fair value of the options on the date of grant - R$5.96 R$6.07 R$7.73 R$ 9.49

Grants recognized in the business year ended on December 31, 2016

Board of Directors Executive Board (Statutory)

Grant of stock options No Plan 6 Plan 7 Plan 8 Plan 9

Date of grant - 02/28/13 02/13/14 02/12/15 02/25/16

Quantity of options granted - 261,870 119,010 195,234 278,802

Period for the options to become exercisable

-

As specified in the Plan: The Options shall have a total vesting period of three years, being able to be exercised as follows: up

to 1/3 after one year from the date of the grant; a further 1/3 after two years from the date of the grant, making up a total limit of 2/3; and the remaining 1/3 after three years from the

date of the grant.

Maximum period for exercise of the options - 02/27/19 02/12/20 02/11/21 02/24/22

Period ot restriction on transfer of the shares - There is no restriction

Fair value of the options on the date of grant - R$8.38 R$5.96 R$6.07 R$ 7,73

Grants recognized in the business year ended on December 31, 2015

Board of Directors Executive Board (Statutory)

Grant of stock options No Plan 5 Plan 6 Plan 7 Plan 8

Date of grant - 03/01/12 02/28/13 02/13/14 02/12/15

Quantity of options granted - 90,708 261,870 119,010 195,234

Period for the options to become exercisable

-

As specified in the Plan: The Options shall have a total vesting period of three years, being able to be exercised as follows: up

to 1/3 after one year from the date of the grant; a further 1/3 after two years from the date of the grant, making up a total limit of 2/3; and the remaining 1/3 after three years from the

date of the grant.

Maximum period for exercise of the options - 02/28/18 02/27/19 02/12/20 02/11/21

Period ot restriction on transfer of the shares - There is no restriction

Fair value of the options on the date of grant - R$4.21 R$8.38 R$5.96 R$ 6.07

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13.5 - Share-based remuneration of the Board of Directors and the statutory directors

The information below refers only to the Statutory Board, the members of the Board of Directors and Audit Board are not part of the program. Share-based remuneration forecast for the current business year (2018)

a) Body Executive Board (Statutory)

b) Nr. of members 3 (three)

c) Nr. of remunerated members 3 (three)

d) In relation to each grant of options to purchase shares

Plan 8 (2015) Plan 9 (2016) Plan 10 (2017) Plan 11 (2018)

i. Date of grant 02/12/15 02/25/16 02/16/17 02/22/18

ii. Quantity of options granted 195,234 278,802 217,905 164,343

iii. Period for the options to become exercisable

As specified in the Plan: The Options shall have a total vesting period of three years, being able to be exercised as follows: up to 1/3 after one year from the date of the grant; a further

1/3 after two years from the date of the grant, making up a total limit of 2/3; and the remaining 1/3 after three years from the date of the grant.

iv. Maximum period for exercise of the options

02/11/21 02/24/22 02/15/23 02/21/24

v. Period of restriction on transfer of the shares

There is no restriction

vi. Weighted average price of exercise

(a) Options – open at the beginning of the business year

R$8.42 R$8.88 R$9.81 R$ 15.48

(b) Options – lost during the business year

- - - -

(c) Options – Exercised during the business year

R$8.42 R$8.88 R$9.81 R$ 15.48

(d) Options – Expired during the business year

- - - -

e) Fair value of the options on the date of grant

R$6.07 R$7.73 R$9.49 R$ 13.29

f) Potential dilution in the event of exercise of all options granted

0.06% 0.09% 0.07% 0.05%

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13.5 - Share-based remuneration of the Board of Directors and the statutory directors

Share-based remuneration for the business year ended on December 31, 2017

a) Body Executive Board (Statutory)

b) Nr. of members 3 (three)

c) Nr. of remunerated members 3 (three)

d) In relation to each grant of options to purchase shares

Plan 7 (2014) Plan 8 (2015) Plan 9 (2016) Plan 10 (2017)

i. Date of grant 02/13/14 02/12/15 02/25/16 02/16/17

ii. Quantity of options granted 119,010 195,234 278,802 217,905

iii. Period for the options to become exercisable

As specified in the Plan: The Options shall have a total vesting period of three years, being able to be exercised as follows: up to 1/3 after one year from the date of the grant; a further

1/3 after two years from the date of the grant, making up a total limit of 2/3; and the remaining 1/3 after three years from the date of the grant.

iv. Maximum period for exercise of the options

02/12/20 02/11/21 02/24/22 02/15/23

v. Period of restriction on transfer of the shares

There is no restriction

vi. Weighted average price of exercise

(a) Options – open at the beginning of the business year

R$9.84 R$8.42 R$8.88 R$9.81

(b) Options – lost during the business year

- - - -

(c) Options – Exercised during the business year

R$9.84 R$8.42 R$8.88 R$9.81

(d) Options – Expired during the business year

- - - -

e) Fair value of the options on the date of grant

R$5.96 R$6.07 R$7.73 R$9.49

f) Potential dilution in the event of exercise of all options granted

0.04% 0.06% 0.09% 0.07%

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13.5 - Share-based remuneration of the Board of Directors and the statutory directors

Share-based remuneration for the business year ended on December 31, 2016

a) Body Executive Board (Statutory)

b) Nr. of members 3 (three)

c) Nr. of remunerated members 3 (three)

d) In relation to each grant of options to purchase shares

Plan 6 (2013) Plan 7 (2014) Plan 8 (2015) Plan 9 (2016)

i. Date of grant 02/28/13 02/13/14 02/12/15 02/25/16

ii. Quantity of options granted 261,870 119,010 195,234 278,802

iii. Period for the options to become exercisable

As specified in the Plan: The Options shall have a total vesting period of three years, being able to be exercised as follows: up to 1/3 after one year from the date of the grant; a further

1/3 after two years from the date of the grant, making up a total limit of 2/3; and the remaining 1/3 after three years from the date of the grant.

iv. Maximum period for exercise of the options

02/27/19 02/12/20 02/11/21 02/24/22

v. Period of restriction on transfer of the shares

There is no restriction

vi. Weighted average price of exercise

(a) Options – open at the beginning of the business year

R$9.55 R$9.84 R$8.42 R$ 8.88

(b) Options – lost during the business year

- - - -

(c) Options – Exercised during the business year

R$9.55 R$9.84 R$8.42 R$ 8.88

(d) Options – Expired during the business year

- - - -

e) Fair value of the options on the date of grant

R$8.38 R$5.96 R$6.07 R$ 7.73

f) Potential dilution in the event of exercise of all options granted

0.09% 0.04% 0.06% 0.09%

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13.5 - Share-based remuneration of the Board of Directors and the statutory directors

Share-based remuneration for the business year ended on December 31, 2015

a) Body Executive Board (Statutory)

b) Nr. of members 3 (three)

c) Nr. of remunerated members 3 (three)

d) In relation to each grant of options to purchase shares

Plan 5 (2012) Plan 6 (2013) Plan 7 (2014) Plan 8 (2015)

i. Date of grant 03/01/12 02/28/13 02/13/14 02/12/15

ii. Quantity of options granted 90,708 261,870 119,010 195,234

iii. Period for the options to become exercisable

As specified in the Plan: The Options shall have a total vesting period of three years, being able to be exercised as follows: up to 1/3 after one year from the date of the grant; a further

1/3 after two years from the date of the grant, making up a total limit of 2/3; and the remaining 1/3 after three years from the date of the grant.

iv. Maximum period for exercise of the options

02/28/18 02/27/19 02/12/20 02/11/21

v. Period of restriction on transfer of the shares

There is no restriction

vi. Weighted average price of exercise

(a) Options – open at the beginning of the business year

R$4.33 R$9.55 R$9.84 R$8.42

(b) Options – lost during the business year

- - - -

(c) Options – Exercised during the business year

R$4.33 R$9.55 R$9.84 R$8.42

(d) Options – Expired during the business year

- - - -

e) Fair value of the options on the date of grant

R$4.21 R$8.38 R$5.96 R$6.07

f) Potential dilution in the event of exercise of all options granted

0.03% 0.09% 0.04% 0.06%

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13.6 – Information on the open options held by the Board of Directors and the statutory directors Amounts relating to the 2017 business year

Body Executive Board (Statutory)

Number of members 3 (three)

Number of remunerated members 3 (three)

In relation to options not yet exercised

Plan 8 (2015) Plan 9 (2016) Plan 10 (2017)

I. Quantity 448,628

II. Date when they will become exercisable

02/11/18 – 65,078 02/24/18 – 92,934 02/24/19 – 92,934

02/15/18 – 72,635 02/15/19 – 72,635 02/15/20 – 72,635

III. Maximum period for exercise of the options

02/11/21 02/24/22 02/15/23

IV. Period of restriction on transfer of the shares

There is no restriction

V. Weighted average price of exercise

R$9.25

VI. Fair value of the options on the last day of the business year

R$8.32

In relation to the exercisable options

There is no exercisable options on December 31, 2017

I. Quantity -

II. Date when they will become exercisable

-

III. Maximum period for exercise of the options

-

IV. Period of restriction on transfer of the shares

-

V. Weighted average price of exercise

-

VI. Fair value of the options on the last day of the business year

-

The members of the Board of Directors and the Audit Board are not part of the program.

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13.7 - Options exercised and shares delivered in relation to the share-based remuneration of the Board of Directors and the statutory directors

a. Body Executive Board

b. Number of members

3 (three)

c. Number of remunerated members

3 (three)

d. In relation to options not yet exercised

Plan IV (2011) Plan V (2012) Plan VI (2013) Plan VII (2014) Plan VIII (2015) Plan IX (2016) Plan X (2017)

i. Number of shares

2013 – 334,832 2014 – 46,907 2015 - 120,509

2013 – 30,236 2014 – 30,236 2015 - 30,236

2014 – 87,290 2015 – 87,290 2016 – 87,290

2015 –39,670 2016 - 39,670 2017 – 36,670

2016 - 65,078 2017 – 65,078

2017 – 92,934 -

ii. Weighted average price in the business year

2013 – R$10.15 2014 – R$8.87

2015 – R$10.34

2013 – R$10.15 2014 – R$8.87 2015 – R$10.34

2014 – R$8.87 2015 – R$10.34 2016 – R$10.76

2015 – R$10.34 2016 – R$10.76 2017 – R$8.92

2017 – R$8.92 2017 – R$8.92 -

iii. Total value of the difference between the exercise value and the market value of the shares for the options exercised

R$4,806,829.93 R$797,020.96 R$1,924,744.50 R$862,822.50 R$1,179,213.36 R$840,123.36 -

e. In relation to the shares delivered, state:

i. Number of shares

502,248 90,708 261,870 119,010 130,156 92,934 -

ii. Weighted average acquisition price

2013 – R$21.06 2014 – R$18.49 2015 – R$16.17

2013 – R$21.06 2014 – R$18.49 2015 – R$16.17

2014 – R$18.49 2015 – R$16.17 2016 –R$17.36

2015 – R$16.17 2016 – R$17.36 2017 – R$17.96

2016 – R$17.36 2017 – R$17.96

2017 – R$17.96 -

iii. Total value of the difference between the acquisition value and the market value of the shares acquired

R$4,806,829.93 R$797,020.96 R$1,924,744.50 R$892,822.50 R$1,179,213.36 R$840,123.36 -

The members of the Board of Directors and the Audit Board are not part of the program.

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13.8 - Information necessary for understanding of the data disclosed in items 13.5 to 13.7 - Method of pricing of the value of the shares and the options

a. The pricing model

Plan IV (2011)

Plan V (2012)

Plan VI (2013)

Plan VII (2014)

Plan VIII (2015)

Plan IX (2016)

Plan X (2017)

Pricing model Black and Scholles b. Data and assumptions used in the pricing model, including the weighted average price of the shares, exercise price, expected volatility, period of life of the option, expected dividends and risk-free interest rate

Plan IV (2011)

Plan V (2012)

Plan VI (2013)

Plan VII (2014)

Plan VIII (2015)

Plan IX (2016)

Plan X (2017)

Grant date 02/24/2011 03/01/2012 02/28/2013 02/13/2014 02/12/2015 02/25/2016 02/16/17

Total purchase options granted 502,248 90,708 261,870 119,010 195,234 278,802 217,905

Exercise price 10.80 4.33 9.55 9.84 8.42 8.88 9.81

Estimated volatility 27.60% 14.07% 25.51% 26.35% 26.51% 29.89% 20.16%

Expected dividends 4% 7% 5% 6% 5% 6% 6%

Weighted average risk-free interest rate 12.50% 9.50% 7.25% 11.25% 12.75% 14.25% 9.50%

Maximum maturity 6 years 6 years 6 years 6 years 6 years 6 years 6 years

Average maturity 2.5 years 2.5 years 2.5 years 2.5 years 2.5 years 2.5 years 2.5 years

Option premium 1.20 4.21 8.38 5.96 6.07 7.73 9.49

* The expected dividends were based on the average dividend payment per share in relation to the market value of the share over the last 12 months. ** The Company utilizes as the risk-free interest rate the average projected Special System for Settlement and Custody (SELIC) rate published by the Central Bank of Brazil (BACEN). c. Method and assumptions used to incorporate the expected effects of the expected exercise

Plan IV (2011)

Plan V (2012)

Plan VI (2013)

Plan VII (2014)

Plan VIII (2015)

Plan IX (2016)

Plan X (2017)

Method and assumptions In the calculation of the fair value of the options, we use the value for the expected life of the options. We did not take into consideration the turnover, because it is expected to be insignificant at the level of the Executive Board of Grendene S.A.

d. Manner of determining expected volatility

Plan IV (2011)

Plan V (2012)

Plan VI (2013)

Plan VII (2014)

Plan VIII (2015)

Plan IX (2016)

Plan X (2017)

Expected volatility Volatility was determined based on the average historical fluctuation of the share price over the 18 months prior to the grant date.

e. Was any other characteristic of the option incorporated into the measurement of its fair value?

Plan IV (2011)

Plan V (2012)

Plan VI (2013)

Plan VII (2014)

Plan VIII (2015)

Plan IX (2016)

Plan X (2017)

Other characteristic of the option No

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13.9 - Holdings in shares, unit shares and other securities that are convertible, held by managers and members of the Audit Board – by body Number of shares or share units issued by the Company or its direct or indirect controlling stockholders, or its subsidiaries or jointly-controlled subsidiaries, and any other securities convertible into such shares or share units, that were directly or indirectly held, in Brazil or outside Brazil, by members of the Board of Directors, by the statutory directors, or by members of the Audit Board, grouped by body, on the closing date of the last business year. Notes: (*) This includes shares owned by the controlling stockholders Alexandre Grendene Bartelle and Pedro Grendene Bartelle and by the other stockholders bound by the Company's stockholders' agreement.

Stockholders Dec. 31, 2017

Number of shares % holding in the total share capital

Members of the Board of Directors (*) 216,145,693 71.876062%

Members of the Executive Board 729,209 0.242488%

Members of the Audit Board - -

Total number of shares 216,874,902 72.118549%

Stockholders Dec. 31, 2016

Number of shares % holding in the total share capital

Members of the Board of Directors (*) 217,464,784 72.314705%

Members of the Executive Board 728,058 0.242105%

Members of the Audit Board - -

Total number of shares 218,192,842 72.556810%

Stockholders Dec. 31, 2015

Number of shares % holding in the total share capital

Members of the Board of Directors (*) 217,479,784 72.319694%

Members of the Executive Board 659,268 0.219230%

Members of the Audit Board - -

Total number of shares 218,139,052 72.538924%

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13.10 – Information on the pension plans granted to the members of the Board of Directors and statutory directors The company does not maintain Private Pension Plans for the members of its Board of Directors, Executive Board and managers.

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13.11 - Maximum, minimum and average individual remuneration of the Board of Directors, the statutory directors and the Audit Board Annual amounts

Executive Board Board of Directors Audit Board

Dec. 31, 2017 Dec. 31, 2016 Dec. 31, 2015 Dec. 31, 2017 Dec. 31, 2016 Dec. 31, 2015 Dec. 31, 2017 Dec. 31, 2016 Dec. 31, 2015

No. of members 3.00 3.00 3.00 6.00 6.00 6.00 3.00 3.00 3.00

No. of remunerated members

3.00 3.00 3.00 6.00 6.00 6.00 3.00 3.00 3.00

Amount of the largest individual remuneration (Reais)

2,748,408.00 2,475,008.30 2,051,021.46 186,000.00 176,000,00 164,000,00 142,500.00 133,800.00 118,800.00

Amount of the lowest individual remuneration (Reais)

1,423,997.00 1,308,828.31 1,164,538.19 186,000.00 176,000,00 164,000,00 142,500.00 133,800.00 118,800.00

Average remuneration (Reais)

2,050,481.67 1,863,538.10 1,587,023.46 186,000.00 176,000,00 164,000,00 142,500.00 133,800.00 118,800.00

Remarks

Executive Board

Board of Directors

Audit Board

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13.12 – Mechanisms of remuneration or indemnity for managers in the event of being removed from office or retirement There are no mechanisms of remuneration or indemnity for members of its Board of Directors, Executive Board and managers in the event of dismissal from their position, or retirement.

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13.13 – Remuneration of managers and members of the Audit Board who are related parties of the controlling stockholders, as a percentage of total remuneration of all managers and members of the Audit Board Grendene does not make payments to members of the Board of Directors, the Statutory Directors or the Audit Board who are related parties of the Controlling stockholders, whether direct or indirect. The only payment made is to the controlling stockholders themselves (Mr. Alexandre Grendene Bartelle, who serves as Chairman of the Board of Directors, and Mr. Pedro Grendene Bartelle), who serves as Vice-Chairman of the Board of Directors 2015, 2016 e 2017.

Business year ended on Board of Directors Audit Board Executive Board (Statutory Board)

December 31, 2017 33% 0% 0%

December 31, 2016 33% 0% 0%

December 31, 2015 33% 0% 0%

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13.14 – Remuneration of managers and members of the Audit Board, grouped by body, received for any reason other than the function they hold Amounts recognized for any reason other than the post they hold.

R$ 2015 2016 2017

Board of Directors R$ 72,000.00 R$ 120,000.00 R$ 170,000.00

Audit Board - - -

Executive Board (Statutory Board) R$ 364,000.00 R$ 413,000.00 R$ 479,000.00

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13.15 - Remuneration of management or the Audit Board recognized in the Profit and loss account of companies that are direct or indirect controlling stockholders, or companies under common control, or subsidiaries, the Issuer The Company has no amounts recognized in the Profit and loss of any company that is a direct or indirect controlling stockholder, nor any company under common control or subsidiary of the Issuer, as remuneration of members of the Board of Directors or the statutory directors.

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13.16 - Other material information

The full Regulations of the Stock Options Purchase and Subscription Plan, approved by the Extraordinary General Meeting of April 14, 2008, and the alterations approved by the Meeting of the Board of Directors of March 1, 2012 and February 12, 2015, is available for consultation on the sites of the CVM and of the BM&FBovespa, and on the Company’s Investor Relations site. Comissão de Valores Mobiliários – http://www.cvm.gov.br BM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias e Futuros – http://www.bmfbovespa.com.br Grendene – Investor Relations – http://ri.grendene.com.br/PT/Governanca-Corporativa/Stock-Options Stock Options Plan Information contained in the previous items refers only to the members of the Executive Board. However, it is necessary to make clear that the stock options plan, administered by the Board of Directors, envisages as Beneficiaries the management level executives of the Company: as well as the Chief Officers referred to above, it also includes the principal managers. For greater transparency, we transcribe below Explanatory Note 21 to the financial statements. 21. Stock option or subscription plan At the Extraordinary General Meeting held on April 14, 2008, the Company's stockholders approved the "Stock Option or Share Subscription Plan", to be effective as from April 14, 2008, for the Company's directors and managers, except for directors nominated by the controlling stockholders. The plan is administered by the Company's Board of Directors, which may delegate this function, within the restrictions established by law to the committee created on February 12, 2015, by the 59th meeting of the Board of Directors. The share purchase options granted under the Stock Option Plan are limited to 5% of the Company's capital. The shares to be delivered as a result from the exercise of options will be issued through a resolution to increase capital, by the Board of Directors, within the Company's authorized capital, or using treasury shares, within legal limits. The Stock Option or Share Subscription Plan beneficiaries may exercise their options within 6 years from the grant date. The vesting period will be of up to 3 years, with releases of 33% after one year, 66% after two years and 100% after three years. On December 31, 2017 the company recognized an expense of R$6,368 (R$5,283 in 2016) in Personnel expenses, for stock options, based on the fair value of the transactions on the date of their being granted. a) Summary of grants of share purchase options or subscriptions The options granted and the related changes were as follows:

2017

Grant date Option exercise

price

Vesting period as from grant date

Maximum number of

shares Opening balance Granted Exercised Canceled

Closing balance

2/24/2011 10.80 2/24/2014 1,741,632 8,049 - (8,049) - - 2/13/2014 9.84 2/13/2017 370,158 112,904 - (112,904) - - 2/12/2015 8.42 2/12/2017 431,036 202,828 - (199,792) (3,036) - 2/12/2015 8.42 2/12/2018 646,554 202,828 - - (10,833) 191,995 2/25/2016 7.80 2/25/2017 297,282 294,360 - (289,853) (4,507) - 2/25/2016 7.80 2/25/2018 594,564 294,360 - - (15,735) 278,625 2/25/2016 7.80 2/25/2019 891,846 294,360 - - (15,735) 278,625 2/16/2017 8.99 2/16/2018 242,384 - 242,384 - (10,008) 232,376 2/16/2017 8.99 2/16/2019 484,768 - 242,384 - (10,008) 232,376 2/16/2017 8.99 2/16/2020 727,152 - 242,384 - (10,008) 232,376

1,409,689 727,152 (610,598) (79,870) 1,446,373

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13.16 - Other material information

2016

Grant date Option

exercise price

Vesting period as from grant

date

Maximum number of

shares

Opening balance

Granted Exercised Canceled Anticipation of the Grace

period

Closing balance

2/24/2011 10.80 2/24/2012 580,544 5,956 - (5,956) - - - 2/24/2011 10.80 2/24/2013 1,161,088 5,956 - (5,956) - - - 2/24/2011 10.80 2/24/2014 1,741,632 53,114 - (45,065) - - 8,049 2/28/2013 9.55 2/28/2016 795,549 240,561 - (240,561) - - - 2/13/2014 9.84 2/13/2016 246,772 117,371 - (119,080) - 1,709 - 2/13/2014 9.84 2/13/2017 370,158 117,371 - - (2,758) (1,709) 112,904 2/12/2015 8.42 2/12/2016 215,518 210,298 - (215,948) - 5,650 - 2/12/2015 8.42 2/12/2017 431,036 210,298 - - (4.645) (2,825) 202,828 2/12/2015 8.42 2/12/2018 646,554 210,298 - - (4.645) (2,825) 202,828 2/25/2016 7.80 2/25/2017 297,282 - 297,282 - (2,922) - 294,360 2/25/2016 7.80 2/25/2018 594,564 - 297,282 - (2,922) - 294,360 2/25/2016 7.80 2/25/2019 891,846 - 297,282 - (2,922) - 294,360

1,171,223 891,846 (632,566) (20,814) - 1,409,689

The fair value of options is calculated at the grant date of the plans, and is not subsequently remeasured since the settlement of the plan is made through equity instruments, as described in technical pronouncement CPC10 - R1 (IFRS 2) - Share-based Payment. Therefore, the Company is subject to variation of the share price in the market when the option is exercised by the Beneficiaries of the plans. In 2017, the Company acquired, for the fulfillment of the plans for exercise of options of share purchase, 547,841 shares, at an average cost of R$17.96, totaling R$9,837. In the first quarter of 2017, 610,598 shares were exercised at an average cost of R$17.80, totaling R$10,872. In 2017, the Company recognized the difference between the average exercise price of the options and the average cost the shares acquired for the fulfillment of these exercises, in the amount of R$937, directly in equity, since the settlement of options plans occurs through equity instruments, as described in technical pronouncement CPC 10 – R1 (IFRS 2) – Share-based payment. b) Changes of the operations with stock option Changes involving issuance, exercise and cancellation of share purchase options in the year were as follows:

Plan Changes Grace

period – from grant

Number of

shares Movement in shares Premium

Expense of exercise or cancellation

Fourth

Balance at the beginning of the year - 8,049 - - - (-) Exercise of share purchase option 2/24/2014 - (8,049) 1.74 (14)

Balance at the end of the year - - - - -

Seventh Balance at the beginning of the year - 112,904 - - - (-) Exercise of share purchase option 2/13/2017 - (112,904) 6.07 (685)

Balance at the end of the year - - - - -

Eighth

Balance at the beginning of the year - 405,656 - - -

(-) Canceled 2/12/2018 - (4,426) 6.29 (19) (-) Exercise of share purchase option 2/12/2017 - (199,792) 6.10 (1,219) (-) Canceled 2/12/2017 - (3,036) 6.10 (18) (-) Canceled 2/12/2018 - (1,795) 6.29 (8) (-) Canceled 2/12/2018 - (2,531) 6.29 (14)

(-) Canceled 2/12/2018 - (2,081) 6.29 (12)

Balance at the end of the year - 191,995 - - -

Ninth

Balance at the beginning of the year - 883,080 - - - (-) Canceled 2/25/2018 - (6,824) 7.76 (26) (-) Canceled 2/25/2019 - (6,824) 7.83 (18) (-) Exercise of share purchase option 2/25/2017 - (289,853) 7.59 (2,200) (-) Canceled 2/25/2017 - (4,507) 7.59 (34) (-) Canceled 2/25/2018 - (2,643) 7.76 (12)

(-) Canceled 2/25/2019 - (2,643) 7.83 (8)

(-) Canceled 2/25/2018 - (3,484) 7.76 (22)

(-) Canceled 2/25/2019 - (3,484) 7.83 (14)

(-) Canceled 2/25/2018 - (2,784) 7.76 (20)

(-) Canceled 2/25/2019 - (2,784) 7.83 (13)

Balance at the end of the year - 557,250 - - -

Tenth

Balance at the beginning of the year - - - - -

Share purchase options issued - 727,152 - - -

(-) Canceled 2/16/2018 - (2,282) 9.77 (4)

(-) Canceled 2/16/2019 - (2,282) 9.49 (2)

(-) Canceled 2/16/2020 - (2,282) 9.21 (1)

(-) Canceled 2/16/2018 - (2,987) 9.77 (17)

(-) Canceled 2/16/2019 - (2,987) 9.49 (8)

(-) Canceled 2/16/2020 - (2,987) 9.21 (6)

(-) Canceled 2/16/2018 - (4,739) 9.77 (38)

(-) Canceled 2/16/2019 - (4,739) 9.49 (19)

(-) Canceled 2/16/2020 - (4,739) 9.21 (12)

Balance at the end of the year - 697,128 - - -

Movement in Stockholders’ equity (4,463)

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13.16 - Other material information c) Economic assumptions adopted for recognition of employee remuneration expenses The Company recognizes expenses for the variable remuneration of employees based on the fair value of the options granted, which was estimated using the Black-Scholes option pricing model. The Company utilized the following economic assumptions to determine this weighted average fair value: 4th Plan 7th Plan 8th Plan 9th Plan 10th Plan

Grant date 2/24/2011 2/13/2014 2/12/2015 2/25/2016 2/16/2017 Total purchase options granted 1,741,632 370,158 646,554 891,846 727,152 Exercise price 10.80 9.84 8.42 8.88 9.81 Estimated volatility 27.60% 26.35% 26.51% 29.89% 20.16 Expected dividends 4% 6% 5% 6% 6% Weighted average risk-free interest rate 12.50% 11.25% 12.75% 14.25% 9.50% Maximum maturity 6 years 6 years 6 years 6 years 6 years Average maturity 2.5 years 2.5 years 2.5 years 2.5 years 2.5 years Option premium 1.20 5.96 6.07 7.73 9.49

Volatility was determined based on the average historical fluctuation of the share price over the 18 months prior to the grant date. The expected dividends were based on the average dividend payment per share in relation to the market value of the share over the last 12 months. The Company utilizes as the risk-free interest rate the average projected Special System for Settlement and Custody (SELIC) rate published by the Central Bank of Brazil (BACEN). The fair value of options is calculated at the grant date and recorded as an expense, on a straight-line basis, during the vesting period. The Company is not committed to repurchase shares that were purchased by the beneficiaries.

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14.1 - Description of human resources

a. Number of employees (total, by groups based on activity carried out, and by geographic location)

Northeastern Region Workforce*

Year Direct Indirect Total Turnover, %

2015 14,591 7,442 22,033 1.71%

2016 11,942 6,400 18,342 1.77%

2017 11,645 6,415 18,060 1.41%

Southern Region Workforce*

Year Direct Indirect Total Turnover, %

2015 12 2,131 2,143 1.81%

2016 50 2,009 2,059 1.59%

2017 3 2,017 2,020 1.62%

Total Workforce*

Year Direct Indirect Total Turnover, %

2015 14,603 9,573 24,176 1.71%

2016 11,992 8,409 20,401 1.75%

2017 11,648 8,342 20,080 1.43%

* Annual average number of employees.

b. Number of outsourced workers (total, by group based on activity carried out, and by geographic location)

Northeastern Region Workforce

Direct Indirect Total

2015 - 337 337

2016 - 268 268

2017 - 269 269

Southern Region Workforce

Direct Indirect Total

2015 - 34 34

2016 - 26 26

2017 - 27 27

Total Workforce

Direct Indirect Total

2015 - 371 371

2016 - 294 294

2017 - 296 296

c. Turnover, % See tables in item 'a'” above.

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14.2 - Material changes - Human resources There have been no material changes in relation to item 14.1

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14.3 – Description of the policy for employees' remuneration

Grendene has career development and remuneration policies aligned with recognized market practices. The People Management model is based on the principles of Management by Results, sustained by a Competencies model. As well as career and remuneration, this model also connects to actions of recruiting, selection and corporate education. a. Salaries and variable remuneration policy Salaries policy The Company’s remuneration policy aims to recognize the value of human capital, based on the needs of the business, the results delivered by individuals, and their impact on the collective result, and the organizational and market economic context, in accordance with the current employment-law legislation. The remuneration policy covers all the areas and units of Grendene, and is applied on the following basic assumptions: Development and career The career of each employee is a personal attribution – it is up to the Company to show the opportunities for growth and indicate the paths for development and self-development. Professional growth can take place in two ways: *Vertical growth – transition of the employee to another position with greater responsibilities and a higher salary level. *Horizontal growth – increase of the employee’s remuneration, in the same job, according to the level of maturity of the performance and results delivered. Evaluation of people In Grendene, Performance Management is based on three management tools: the Experience Assessment, the Performance Conversation, and the Leadership Evaluation. 1- The Experience Assessment This assessment evaluates the degree to which the employee is aligned with the culture of the company, and provides an opportunity for a moment of feedback between the assessor and the assessed, for the purpose of identifying possible actions that can be taken for development. The Experience Assessment is based on the three characteristics which Grendene regards as components of its DNA: COMMITMENT, TEAM WORK and ACTION FOR RESULTS. 2 - The Performance Conversation The purpose of the Grendene carries out its Performance Conversation is to support the development of its employees’ careers; to stimulate continuous feedback; and to contribute to the development of people in the organization. This encounter takes place formally once a year, between the leader and the leader's team member. 3 – The Leadership Assessment / Contract for Results The Leadership Assessment is for those holding the position of Department Manager, and covers an evaluation based on two characteristics: Behavior and Results. The Leadership Assessment maps performance, and identifies points of development, for the purpose of planning actions that add potential to the personal and professional results of the manager being evaluated. Salaries Grendene’s salary policy is in line with market practices. For this, every two years it carries out a research survey aiming to compare its salary base with significant and large scale companies of the region. The salary base of the Company comprises six levels (A to F), where the average market remuneration is at the intermediary levels between levels C and D of Grendene’s table. Salaries are adjusted annually, on the base dates of the collective agreements of each locality. The adjustment percentage is up to 100% of the INPC inflation index. The same index is used for updating the salary reference tables, maintaining competiveness, vis-à-vis the market. General or collective salary increases

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14.3 – Description of the policy for employees' remuneration

These adjustments apply to the amounts of the salaries of all the employees. Annual Collective Negotiated Agreements: On the base-dates of collective employment agreements, salaries are adjusted in accordance with the negotiations at each location, and the tables are adjusted. Compulsory Advance Payments: These are made in accordance with the legislation, and with negotiated annual or other collective agreements, and offset on the base-date of the employee category and/or as the legislation determines. Individual salary adjustments These are specific adjustments for specific employees, on the occasion of promotion to a position with a higher salary (vertical growth), or for merit (horizontal growth) or for adaptation of the position to market values. For individual adjustments, the dates established in the policy, and the limits of the salary bands in the salary table are taken into account. Remuneration based on shares policy On April 14, 2008 the Board approved the Company's Stock Options and Subscription Plan, which benefits eligible executives based on the recommendations by the Committee to the Board of Directors for approval. (See item 13.16 - Regulations of the Stock Options Plan). b. Benefits policy The objective of the Benefits Policy is to offer Grendene employees a package of benefits designed to meet their basic needs and their physical and social wellbeing, helping them to continue to be healthy and productive professionals. Among these points we highlight:

Subsidies for food.

Agreements with pharmacies and eyewear providers.

Medical, dental and social assistance in the factory itself.

Distribution of food 'baskets'.

Life insurance.

Basket of chocolates at Easter and poultry at Christmas.

Christmas Party and delivery of toys for children of age up to 11 years and 11 months. In addition, Grendene takes part in various social projects, such as assistance programs, participation in blood donor campaigns, programs combating drugs and violence, and programs supporting sporting associations. c. Characteristics of the share-based remuneration of the non-management-level employees: See item 13.16 – Other material information. The full text of the stock options and subscriptions plan is available for consultation on the sites of the CVM, and of the BM&FBovespa, and on the Company’s Investor Relations site. CVM – Comissão de Valores Mobiliários – http://www.cvm.gov.br BM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias e Futuros – http://www.bmfbovespa.com.br Grendene – Investor Relations – http://ri.grendene.com.br/PT/Governanca-Corporativa/Stock-Options

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14.4 - Description of relations between the Issuer and the union Grendene respects and allows free union association, strengthening legitimate representation of the employees through their unions, and has among its staff a very significant number of employees associated with these entities. The Company participates actively in the federations of business owners in the regions where it operates, encouraging responsibly-conducted collective negotiations, complying in full in all the clauses established in an Agreement, and retaining a friendly and respectful relationship with the members of the executive committees of the unions. In all units, wall space is made available for the workers’ union to post information about its activities, and the main items of the Collective Agreement are published through internal communication channels (‘murals’ and emails), aiming to reach every one of the employees. In the last 3 years there has been no work stoppage or strike.

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14.5 – Other material information All the other information that is material and pertinent to this subject has been disclosed in the previous items.

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15.1 / 15.2 – Stockholding position Stockholder

Stockholder's Tax number (CPF or CNPJ) Nationality and State Signatory of Stockholders' Agreement Controlling stockholder Most recent alteration

Stockholder resident outside Brazil Name of legal representative or holder of Power of Attorney

Type of person CPF/CNPJ

No of common shares Common shares, % Number of preferred shares Preferred shares, % Total number of shares Total shares, %

Listed by type of share

Share type Number of shares Shares, %

Giovana Bartelle Veloso

685.957.780-00 Brazilian - Rio Grande do Sul Yes Yes November 12, 2018

No

37,132,797 4.116000% 0 0.000000% 37,132,797 4.116000%

Pedro Bartelle

685.947.430-53 Brazilian - Rio Grande do Sul Yes Yes November 12, 2018

No

36,465,597 4.042000% 0 0.000000% 36,465,597 4.042000%

Gabriella de Camargo Bartelle

370.718.138-33 Brazilian – São Paulo Yes Yes November 12, 2018

No

28,912,677 3.205000% 0 0.000000% 28,912,677 3.205000%

André de Camargo Bartelle

354.047.748-94 Brazilian – São Paulo Yes Yes November 12, 2018

No

29,201,277 3.237000% 0 0.000000% 29,201,277 3.237000%

Alexandre Grendene Bartelle

098.675.970-87 Brazilian - Rio Grande do Sul Yes Yes November 12, 2018

No

371,691,807 41.200000% 0 0.000000% 371,691,807 41.2000000%

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15.1 / 15.2 – Stockholding position Stockholder

Stockholder's Tax number (CPF or CNPJ) Nationality and State Signatory of Stockholders' Agreement Controlling stockholder Most recent alteration

Stockholder resident outside Brazil Name of legal representative or holder of Power of Attorney

Type of person CPF/CNPJ

No of common shares Common shares, % Number of preferred shares Preferred shares, % Total number of shares Total shares, %

Listed by type of share

Share type Number of shares Shares, %

Pedro Grendene Bartelle

098.647.840-72 Brazilian - Rio Grande do Sul Yes Yes November 12, 2018

No

125,312,376 13.890000% 0 0.000000% 125,312,376 13.890000%

Other

271,538,469 30.099000% 0 0.000000% 271,538,469 30.099000%

SHARES IN TREASURY – Date of most recent change: November 12, 2018

1,905,000 0.211000% 0 0.000000% 1,905,000 0.211000%

TOTAL

902,160,000 100.000000% 0 0.000000% 902,160,000 100.000000

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15.3 – Distribution of capital

Date of the last general meeting / date of last change April 23, 2018

Number of individual stockholders 14,944

Number of corporate stockholders 135

Number of institutional investors 380

Free float (shares in circulation) We define the free float as all the Issuer's shares except those owned by the controlling stockholder, parties related to the controlling stockholder, the managers of the Issuer, and the shares held in treasury.

Number of common shares 268,667,367 29.780456%

Number of preferred shares 0 0.000000%

Total 268,667,367 29.780456%

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15.4 – Stockholding ownership diagram

Organization chart of shareholders

Position on November 12, 2018

Alexandre Grendene Bartelle

41.200%

Pedro Grendene Bartelle

13.890%

Giovana Bartelle Veloso

4.116%

Grendene S.A.

100.0%

Pedro Bartelle

4.042%

André de Camargo Bartelle

3.237%

Gabriella de Camargo Bartelle

3.205%

Others

30.099%

Shares in Treasury

0.211%

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15.4 – Organization diagram of the economic group

Organization Chart of the Economic Group

Position on November 12, 2018

Controlling shareholders

Free Float

69.7% 30.3%

Grendene S.A.

(Brazil)

99.998% 100.0% 100.0%

MHL Calçados Ltda (Brazil)

Grendene USA Corp.

(United States)

Grendene UK Limited (United Kingdom)

100.0% 100.0%

Grendene New York LLC

(United States)

Grendene Italy S.R.L. (Italy)

Grendene Argentina S.A. was sold as per a Purchase and sale agreement entered into on June 9, 2017.

A3NP Indústria e Comércio de Móveis S.A. was sold as per a Purchase and sale agreement entered into on February 21, 2018.

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15.5 – Stockholders' Agreement filed at the Issuer's head office, or in which the controlling stockholder is a party

a. Parties Alexandre Grendene Bartelle (Alexandre), Pedro Grendene Bartelle (Pedro), Pedro Bartelle (Pedro Filho), Giovana Bartelle Velloso (Giovana), André de Camargo Bartelle (André) and Gabriella de Camargo Bartelle (Gabriella). b. Date of signature October 6, 2004 and amendments on June 15, 2011, July 30, 2013, July 29, 2016 and December 18,2017. c. Period of validity November 12, 2043 d. Exercise of the right to vote and of the power of control The Stockholder Alexandre or, in the event of his being deceased or incapable, his successors such as acquire shares in the Company (‘Block A Stockholders’) shall meet prior to each Prior Meeting to decide the person who will represent them in the Prior Meeting, and the orientation of vote to be given in that meeting. The quorum for decision to define the representative and orientation of the vote to be given in the Prior Meeting by the Block A Stockholders, shall be a majority of the Bound Shares held by the Stockholder members of Block A. In the event that Alexandre loses his legal capacity or dies, and provided that Pedro is fully capable and holds the power of control of Block B, for the first 5 (five) years following Alexandre’s death or lack of legal capacity, the Block A Stockholders shall exercise their right to vote in accordance with the decisions on voting to be given by the representative of the Block B Stockholders in the General Meetings of Stockholders and in the Prior Meetings of the Company.” Similarly, the Stockholders, Pedro, Pedro Filho, Giovana, André and Gabriella, or in the event of decease or incapacity, their successors such as acquire shares in the Company (‘Block B Stockholders’) shall meet prior to each Prior Meeting to define the person who will represent them in the Prior Meeting, and also the orientation of vote to be given in that meeting. The quorum for decision on the definition of the representative and orientation of vote to be given in the Prior Meeting by the Block B Stockholders specified in this clause shall be 50.01% (fifty point zero one percent) of the Bound Shares held by the Stockholders who are members of Block B. e. Description of the clauses relating to appointment of managers Appointment of members of the Board of Directors shall be the attribution of the Prior Meeting of the stockholders. f. Description of the clauses relating to transfer of shares and preference for acquiring them All and any transactions involving direct or indirect Transfer of Bound Shares in the Company and preference for acquiring them must obey the provisions of the Clause 5 of Stockholders’ Agreement of Grendene S.A. g. Description of the clauses that restrain or bind the right of vote of members of the Board of Directors There is no restraint on the exercise of the right to vote nor is it bound in any way.

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15.6 - Significant changes in the interests of the members of the controlling group and managers of the Issuer

Compliance with Free Float requirement On November 27, 2007 the stockholders Alexandre Grendene Bartelle and Pedro Grendene Bartelle, controlling stockholders of Grendene S.A., sold 15,600,000 common shares (1) in the company, representing 5.2% of the voting and total capital, in a transaction on the São Paulo Stock Exchange (Bovespa). Following that transaction the vendors then held, directly and indirectly, an aggregate 224,699,964 common shares (1), representing 74.9% of the Company's voting stock and total stock. The purpose of the transaction was to comply with the commitment assumed with the BM&FBovespa, for the percentage of the Company's total shares in circulation in the market, to meet the percentage level required by the Listing Regulations of the Novo Mercado. The transaction did not result in any change in the composition of the control of the Company, nor in its administrative structure. (1) Number of shares, after the split carried out on September 23, 2009.

Restructuring of the controlling group (Year: 2013) On July 30, 2013 there was a stockholding restructuring of the controlling group of the Company: Due to the transfers of shares in the Company owned by Alexandre G. Bartelle Participações S.A. ('AGBPar') to Alexandre Grendene Bartelle ('Alexandre'), and from Verona Negócios Participações S.A. ('Verona') to Pedro Grendene Bartelle ('Pedro'), Maria Cristina Nunes de Camargo ('Maria Cristina'), Pedro Bartelle ('Pedro Filho') and Giovana Bartelle Velloso ('Giovana'), through reduction of capital of AGBPar and of Verona, as set out in detail in the Market Announcement published on July 30, 2013, a private instrument of amendment to the Company's Stockholders' Agreement, entered into on October 6, 2004 was signed and filed at the head office of the Company, with the consent of the Company, and of Alexandre, Pedro, Maria Cristina, Pedro Filho and Giovana, its purpose being only to effect the said transfers of shares, including the individual persons as full parties to the Stockholders' Agreement, in spite of the fact that they already were previously consenting parties to that agreement, and all the terms and conditions originally established were ratified and maintained, the controlling group remaining unaltered, and the same administrative structure of the Company being maintained. Below is the table of the Company's stockholders, before and after the stockholding restructuring carried out by the controlling stockholders. Stockholdings - Before the stockholding restructuring of the control group on June 6, 2013

Stockholders 06/30/2013

Number of ON shares % interest

Alexandre G. Bartelle Participações S.A. (*) 90,000,000 29.928172%

Verona Negócios e Participações S.A. (*) 72,000,000 23.942538%

Grendene Negócios e Participações S.A. (*) 60,300,000 20.051875%

Pedro Grendene Bartelle (*) (**) 222,300 0.073923%

Alexandre Grendene Bartelle (*) (**) 149,457 0.049700%

Giovana Bartelle Veloso (*) 22,400 0.007449%

Management (other than controlling stockholders) 797,246 0.265112%

Free float (shares in circulation) 77,228,597 25.681231%

Total shares issued 300,720,000 100.000000%

The Company has only common shares. (*) A party to the Stockholders’ Agreement. (**) Members of the Board of Directors.

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15.6 - Significant changes in the interests of the members of the controlling group and managers of the Issuer

Stockholdings - After the stockholding restructuring of the control group on July 7, 2013.

Stockholders 07/30/2013

Number of ON shares % interest

Grendene Negócios e Participações S.A. (*) 60,300,000 20.051875%

Alexandre G. Bartelle Participações S.A. (*) 60,000,000 19.952115%

Verona Negócios e Participações S.A. (*) 50,200,000 16.693269%

Alexandre Grendene Bartelle (*) (**) 30,149,457 10.025757%

Pedro Grendene Bartelle (*) (**) 11,139,740 3.704356%

Maria Cristina Nunes de Camargo (*) 5,441,280 1.809417%

Giovana Bartelle Veloso (*) 2,743,040 0.912157%

Pedro Bartelle (*) 2.720,640 0.904709%

Management (other than controlling stockholders) 797,246 0.265112%

Free float (shares in circulation) 77,228,597 25.681231%

Total shares issued 300,720,000 100.000000%

The Company has only common shares. (*) A party to the Stockholders’ Agreement. (**) Members of the Board of Directors.

Restructuring of the controlling group (Year: July/2016) On 29 July 2016, the Company was informed about the restructuring of the controlling group as a result of transfers of shares of Grendene Negócios S.A. ("Grendene Negócios") to Alexandre G. Bartelle Participações S.A. ("AGBPar") and to Verona Negócios e Participações S.A. ( "Verona"), through the split-off of capital of the Grendene Negócios, as detailed in the Notice to the Market, and Material Fact on the same date. Below is the table of the Company's stockholders, before and after the stockholding restructuring carried out by the controlling stockholders. Stockholdings - Before the stockholding restructuring of the control group.

Stockholders Number of ON shares % interest

Grendene Negócios e Participações S.A. (*) 60,300,000 20.051875%

Alexandre G. Bartelle Participações S.A. (*) 60,000,000 19.952115%

Verona Negócios e Participações S.A. (*) 50,200,000 16.693269%

Alexandre Grendene Bartelle (*) (**) 30,149,457 10.025757%

Pedro Grendene Bartelle (*) (**) 5,507,340 1.831385%

Maria Cristina Nunes de Camargo (*) 5,856,280 1.947420%

Giovana Bartelle Veloso (*) 2,743,040 0.912157%

Pedro Bartelle (*) 2,720,640 0.904709%

Management (other than controlling stockholders) 738,085 0.245439%

Free float (shares in circulation) 82,505,158 27.435874%

Total shares issued 300,720,000 100.000000%

The Company has only common shares. (*) A party to the Stockholders’ Agreement. (**) Members of the Board of Directors.

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15.6 - Significant changes in the interests of the members of the controlling group and managers of the Issuer

Stockholdings - After the stockholding restructuring of the control group.

Stockholders Number of ON shares % interest

Alexandre G. Bartelle Participações S.A. (*) 93,300,012 31.025542%

Verona Negócios e Participações S.A. (*) 77.199.988 25.671717%

Alexandre Grendene Bartelle (*) (**) 30,149,457 10.025757%

Pedro Grendene Bartelle (*) (**) 5,507,340 1.831385%

Maria Cristina Nunes de Camargo (*) 5,856,280 1.947420%

Giovana Bartelle Veloso (*) 2,743,040 0.912157%

Pedro Bartelle (*) 2,720,640 0.904709%

Management (other than controlling stockholders) 738,085 0.245439%

Free float (shares in circulation) 82,505,158 27.435874%

Total shares issued 300,720,000 100.000000%

The Company has only common shares. (*) A party to the Stockholders’ Agreement. (**) Members of the Board of Directors.

Restructuring of the controlling group (Year: August/2016) On August 16, 2016 Grendene S.A. has received from it stockholder Maria Cristina Nunes de Camargo (“Maria Cristina”), statements of acquisition/disposal of stockholding interest, through which the stockholder has advised the Company of the transfer its indirect interests, by through donation of all shares held issued by Verona Negócios e Participações S.A., which owns 25.6717% of the Grendene's capital, for her sons, André de Camargo Bartelle and Gabriella de Camargo Bartelle at the rate of 50% (fifty percent) for André and 50% (fifty percent) for Gabriella. Thus, as a consequence of the donation and the above-mentioned transfers:

Maria Cristina, indirect owner of 6.4077% of the Company's capital stock through Verona, no longer has an indirect interest in the Company, but remaining direct holder of the same 5,856,280 (five million, eight hundred and fifty-six thousand two hundred and eighty) common shares issued by the Company, representing 1.9474% of the Company's capital stock;

André, previously direct holder of 99,200 (ninety-nine thousand, two hundred) common shares issued by the Company representing 0.0330% of the share capital, now indirectly owns 3.2038% of the share capital through Verona; and

Gabriella, previously direct holder of 3,000 (three thousand) common shares issued by the Company representing 0.0010% of the share capital, now indirectly owns 3.2038% of the share capital through Verona.

Stockholdings on Dec. 31, 2016

Stockholders 12/31/2016

Number of ON shares % interest

Alexandre G.Bartelle Participações S.A. (*) 93,300,012 31.025543%

Verona Negócios e Participações S.A. (*) 77,199,988 25.671717%

Alexandre Grendene Bartelle (*) (**) 31,349,457 10.424799%

Pedro Grendene Bartelle (*) (**) 4,307,340 1.432342%

Maria Cristina Nunes de Camargo (*) 5,841,280 1.942431%

Giovana Bartelle Veloso (*) 2,743,040 0.912157%

Pedro Bartelle (*) 2,720,640 0.904709%

Management (other than controlling stockholders) 731,085 0.243112%

Shares in treasury 70,300 0.023377%

Free float (shares in circulation) 82,456,858 27.419813%

Total shares issued 300,720,000 100.000000%

The Company has only common shares. (*) A party to the Stockholders’ Agreement. (**) Members of the Board of Directors.

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15.6 - Significant changes in the interests of the members of the controlling group and managers of the Issuer

Restructuring of the controlling group (December 2017) On December 18, 2017 there was a stockholding restructuring of the controlling group of the Company: Due to the transfers of shares in the Company owned by Verona Negócios Participações S.A. ('Verona') to Pedro Grendene Bartelle ('Pedro'), André de Camargo Bartelle (“André”), Pedro Bartelle (“Pedro Filho”), Giovana Bartelle Velloso ('Giovana') and Gabriella de Camargo Bartelle (“Gabriella”), through reduction of capital of Verona, as set out in detail in the Market Announcement published on December 18, 2017, a private instrument of amendment to the Company's Stockholders' Agreement, entered into on October 6, 2004 was signed and filed at the head office of the Company, with the consent of the Company, and of AGBPar, Alexandre, Pedro, Maria Cristina, André, Pedro Filho, Giovana and Gabriella, its purpose being only to effect the said transfers of shares, all the terms and conditions originally established were ratified and maintained, the controlling group remaining unaltered, and the same administrative structure of the Company being maintained. Below is the table of the Company's stockholders, before and after the stockholding restructuring carried out by the controlling stockholders. Stockholdings - Before the stockholding restructuring of the control group on Dec. 17, 2017.

Stockholders Number of ON shares % interest

Alexandre G.Bartelle Participações S.A. (*) 93,300,012 31.025542%

Verona Negócios e Participações S.A. (*) 77,199,988 25.671717%

Alexandre Grendene Bartelle (*) (**) 30,597,257 10.174666%

Pedro Grendene Bartelle (*) (**) 3,109,040 1.033865%

Giovana Bartelle Veloso (*) 2,743,040 0.912157%

Pedro Bartelle (*) 2,520,640 0.838202%

André de Camargo Bartelle (*) 99,200 0.032987%

Gabriella de Camargo Bartelle (*) 3,000 0.000998%

Maria Cristina Nunes de Camargo (*) 5,841,280 1.942431%

Management (other than controlling stockholders) 732,836 0.243695%

Treasury stocks 7,543 0.002508%

Free float 84,566,164 28.121232%

Total shares issued 300,720,000 100.000000%

The Company has only common shares. (*) A party to the Stockholders’ Agreement. (**) Members of the Board of Directors.

Stockholdings - After the stockholding restructuring of the control group on Dec. 18, 2017.

Stockholders Number of ON shares % interest

Alexandre G.Bartelle Participações S.A. (*) 93,300,012 31.025542%

Alexandre Grendene Bartelle (*) (**) 30,597,257 10.174666%

Pedro Grendene Bartelle (*) (**) 41,770,792 13.890261%

Giovana Bartelle Veloso (*) 12,377,599 4.115988%

Pedro Bartelle (*) 12,155,199 4.042032%

André de Camargo Bartelle (*) 9,733,759 3.236818%

Gabriella de Camargo Bartelle (*) 9,637,559 3.204828%

Maria Cristina Nunes de Camargo (*) 5,841,280 1.942431%

Management (other than controlling stockholders) 732,836 0.243695%

Treasury stocks 7,543 0.002508%

Free float 84,566,164 28.121231%

Total shares issued 300,720,000 100.000000%

The Company has only common shares. (*) A party to the Stockholders’ Agreement. (**) Members of the Board of Directors.

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15.6 - Significant changes in the interests of the members of the controlling group and managers of the Issuer

Restructuring of the controlling group (November 2018) On November 12, 2018, the Company was notified of the stockholding restructuring of the controlling group as a result of the transfer of shares of Alexandre G. Bartelle Participações SA ("AGBPar") to Alexandre Grendene Bartelle ("Alexandre"), through of AGBPar's capital reduction, as detailed in the Market Announcement and Material Announcement. On the same date a Fifth Amendment to and Consolidation of the Company’s Stockholders’ Agreement (‘the Stockholders’ Agreement’) was signed and filed at Grendene’s head office, by the following signatories: Alexandre Grendene Bartelle, Pedro Grendene Bartelle, Pedro Bartelle, Giovana Bartelle Velloso, André de Camargo Bartelle and Gabriella de Camargo Bartelle, with the Company as consenting party. Ms. Maria Cristina Nunes de Camargo ceases to be a party of the Stockholders’ Agreement on this date. Below is the table of the Company's stockholders, before and after the stockholding restructuring carried out by the controlling stockholders. Stockholdings - Before the stockholding restructuring of the control group on Nov. 12, 2018.

Stockholders Number of ON shares % interest

Alexandre G.Bartelle Participações S.A. (*) 279,900,036 31.025542%

Alexandre Grendene Bartelle (*) (**) 91,791,771 10.174666%

Pedro Grendene Bartelle (*) (**) 125,312,376 13.890261%

Giovana Bartelle Veloso (*) 37,132,797 4.115988%

Pedro Bartelle (*) 36,465,597 4.042032%

André de Camargo Bartelle (*) 29,201,277 3.236818%

Gabriella de Camargo Bartelle (*) 28,912,677 3.204828%

Maria Cristina Nunes de Camargo (*) 17,523,840 1.942431%

Management (other than controlling stockholders) 2,876.302 0.318824%

Treasury stocks 1,905,000 0.211160%

Free float 251,138,327 27.837449%

Total shares issued 902,160,000 100.000000%

The Company has only common shares. (*) A party to the Stockholders’ Agreement. (**) Members of the Board of Directors.

Stockholdings - After the stockholding restructuring of the control group on Nov. 12, 2018.

Stockholders Number of ON shares % interest

Alexandre Grendene Bartelle (*) (**) 371,691,807 41.200209%

Pedro Grendene Bartelle (*) (**) 125,312,376 13.890261%

Giovana Bartelle Veloso (*) 37,132,797 4.115988%

Pedro Bartelle (*) 36,465,597 4.042032%

André de Camargo Bartelle (*) 29,201,277 3.236818%

Gabriella de Camargo Bartelle (*) 28,912,677 3.204828%

Management (other than controlling stockholders) 2,876.302 0.318824%

Treasury stocks 1,905,000 0.211160%

Free float 268,662,167 29.779880%

Total shares issued 902,160,000 100.000000%

The Company has only common shares. (*) A party to the Stockholders’ Agreement. (**) Members of the Board of Directors.

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15.7 – Main stockholding transactions The Extraordinary General Meeting of Stockholders held on April 23, 2018 approved a split in the Company shares, bringing into existence 2 (two) new common shares for each share, which resulted in the number of shares (the Company has only common shares) being increased from 300,720,000 to 902,160,000. Stockholders of record on May 30, 2018 will receive 2 (two) additional new shares for each common share held, to be credited to them on June 06, 2018 (D+3). The shares will trade post-split on June 01, 2018. Stockholdings - Before the share split of the control group on May 30, 2018.

Stockholders Number of ON shares % interest

Alexandre G.Bartelle Participações S.A. (*) 93.300.012 31,025543%

Alexandre Grendene Bartelle (*) (**) 30.597.257 10,174666%

Pedro Grendene Bartelle (*) (**) 41.770.792 13,890261%

Giovana Bartelle Veloso (*) 12.377.599 4,115988%

Pedro Bartelle (*) 12.155.199 4,042032%

André de Camargo Bartelle (*) 9.733.759 3,236818%

Gabriella de Camargo Bartelle (*) 9.637.559 3,204828%

Maria Cristina Nunes de Camargo (*) 5.841.280 1,942431%

Management (other than controlling stockholders) 960.619 0,319440%

Treasury stocks 635.000 0,211160%

Free float 83.710.924 27,836833%

Total shares issued 300.720.000 100,000000%

The Company has only common shares. (*) A party to the Stockholders’ Agreement. (**) Members of the Board of Directors.

Stockholdings - After the share split of the control group on June 01, 2018.

Stockholders Number of ON shares % interest

Alexandre G.Bartelle Participações S.A. (*) 279.900.036 31,025543%

Alexandre Grendene Bartelle (*) (**) 91.791.771 10,174666%

Pedro Grendene Bartelle (*) (**) 125.312.376 13,890261%

Giovana Bartelle Veloso (*) 37.132.797 4,115988%

Pedro Bartelle (*) 36.465.597 4,042032%

André de Camargo Bartelle (*) 29.201.277 3,236818%

Gabriella de Camargo Bartelle (*) 28.912.677 3,204828%

Maria Cristina Nunes de Camargo (*) 17.523.840 1,942431%

Management (other than controlling stockholders) 2.881.857 0,319440%

Treasury stocks 1.905.000 0,211160%

Free float 251.132.772 27,836833%

Total shares issued 902.160.000 100,000000%

The Company has only common shares. (*) A party to the Stockholders’ Agreement. (**) Members of the Board of Directors.

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15.8 – Other material information All material information relevant to this topic has been disclosed in the items above.

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16.1 – Description of the rules, policies and practices of the Issuer in relation to transactions with related parties The Company does not have a formal policy for transactions with related parties, since the transactions carried out are usually sporadic transactions of low value (except those carried out with 100% - controlled subsidiaries).

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16.2 – Information on transactions with related parties

Related party Transaction date

Amount involved (Reais) Present balance Amount (Reais) Duration

Loan or other type of debt

Interest rate charged

Maílson Ferreira da Nóbrega 12/31/2016 72,000.00 R$ 0.00 R$ 0.00 Indeterminate period No 0.000000

Relationship with the Issuer Company controlled by a member of the Board of Directors

Subject of the contract Assessment

Guarantee and insurance Not applicable

Rescission or cancellation If activities are closed down

Nature of and reason for the transaction

Contractual position of the Issuer Debtor

Specify

Vulcabrás|Azaléia – Argentina S.A. 12/31/2015 306,000.00 R$ 0.00 R$ 0.00 Indeterminate period No 0.000000

Relationship with the Issuer Company controlled by a stockholder of Grendene S.A

Subject of the contract Client - sale of input materials

Guarantee and insurance Not applicable

Rescission or cancellation If activities are closed down

Nature of and reason for the transaction

Contractual position of the Issuer Creditor

Specify

Mailson da Nóbrega Consultoria S/C Ltda 12/31/2015 72,000.00 R$ 0.00 R$ 0.00 Indeterminate period No 0.000000

Relationship with the Issuer Company controlled by a member of the Board of Directors

Subject of the contract Assessment

Guarantee and insurance Not applicable

Rescission or cancellation If activities are closed down

Nature of and reason for the transaction

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16.2 – Information on transactions with related parties

Related party Transaction date

Amount involved (Reais) Present balance Amount (Reais) Duration

Loan or other type of debt

Interest rate charged

Contractual position of the Issuer Debtor

Specify

Grendene USA, Inc 12/31/2016 14,641,000.00 R$9,311,000.00 R$9,311,000.00 Indeterminate period No 0.000000

Relationship with the Issuer Subdisiary

Subject of the contract Client – sale of footwear for suplly to the market where it is located

Guarantee and insurance Not applicable

Rescission or cancellation If activities are closed down

Nature of and reason for the transaction

Contractual position of the Issuer Creditor

Specify

Vulcabras|Azaleia – CE, Calçados e Artigos

Esportivos S.A. 12/31/2015 10,000.00 R$ 0.00 R$ 0.00 Indeterminate period No 0.000000

Relationship with the Issuer Company controlled by a stockholder of Grendene S.A

Subject of the contract Client – sale of input materials

Guarantee and insurance Not applicable

Rescission or cancellation If activities are closed down

Nature of and reason for the transaction

Contractual position of the Issuer Creditor

Specify

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16.2 – Information on transactions with related parties

Related party Transaction date

Amount involved (Reais) Present balance Amount (Reais) Duration

Loan or other type of debt

Interest rate charged

Grendene UK Limited 12/31/2016 953,000.00 R$ 395,000.00 R$395,000.00 Indeterminate period No 0.000000

Relationship with the Issuer Subsidiary

Subject of the contract Client - sale of footwear for supply to the market where it is located

Guarantee and insurance Not applicable

Rescission or cancellation If activities are closed down

Nature of and reason for the transaction

Contractual position of the Issuer Creditor

Specify

Calçados Azaleia Colômbia Ltda 12/31/2015 187,000.00 R$ 0.00 R$ 0.00 Indeterminate period No 0.000000

Relationship with the Issuer Company controlled by a stockholder of Grendene S.A

Subject of the contract Client - sale of footwear

Guarantee and insurance Not applicable

Rescission or cancellation If activities are closed down

Nature of and reason for the transaction

Contractual position of the Issuer Creditor

Specify

Calçados Azaleia Peru S.A. 12/31/2015 622,000.00 R$ 0.00 R$ 0.00 Indeterminate period No 0.000000

Relationship with the Issuer Company controlled by a stockholder of Grendene S.A

Subject of the contract Client - sale of footwear

Guarantee and insurance Not applicable

Rescission or cancellation If activities are closed down

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16.2 – Information on transactions with related parties

Related party Transaction date

Amount involved (Reais) Present balance Amount (Reais) Duration

Loan or other type of debt

Interest rate charged

Nature of and reason for the transaction

Contractual position of the Issuer Creditor

Specify

Grendene USA, Inc 12/31/2015 1,433,000.00 R$ 573,000.00 R$ 573,000.00 Indeterminate period No 0.000000

Relationship with the Issuer Subsidiary

Subject of the contract Supplier – services of commercial representation for clients with head office in the USA

Guarantee and insurance Not applicable

Rescission or cancellation If activities are closed down

Nature of and reason for the transaction

Contractual position of the Issuer Debtor

Specify

Grendene Italy SRL 12/31/2016 2,697,000.00 R$ 2,969,000.00 R$ 2,969,000.00 Indeterminate period No 0.000000

Relationship with the Issuer Indirectly controlled subsidiary

Subject of the contract Client - sale of footwear for supply to the market where it is located

Guarantee and insurance Not applicable

Rescission or cancellation If activities are closed down

Nature of and reason for the transaction

Contractual position of the Issuer Creditor

Specify

MHL Calçados Ltda 12/31/2015 98,000.00 R$ 4,000.00 R$ 4,000.00 Indeterminate period No 0.000000

Relationship with the Issuer Subsidiary

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16.2 – Information on transactions with related parties

Related party Transaction date

Amount involved (Reais) Present balance Amount (Reais) Duration

Loan or other type of debt

Interest rate charged

Subject of the contract Supplier – purchase of input materials

Guarantee and insurance Not applicable

Rescission or cancellation If activities are closed down

Nature of and reason for the transaction

Contractual position of the Issuer Debtor

Specify

Vulcabrás|Azaleia – RS, Calçados e Artigos

Esportivos S.A. 12/31/2015 25,000.00 R$ 3,000.00 R$ 3,000.00 Indeterminate period No 0.000000

Relationship with the Issuer Company controlled by a stockholder of Grendene S.A

Subject of the contract Client – sale of input materials

Guarantee and insurance Not applicable

Rescission or cancellation If activities are closed down

Nature of and reason for the transaction

Contractual position of the Issuer Creditor

Specify

Distribuidora de Calçados e Artigos Esportivos

Cruzeiro do Sul Ltda 12/31/2015 5,000.00 R$ 0.00

R$ 0.00

Indeterminate period No 0.000000

Relationship with the Issuer Company controlled by a stockholder of Grendene S.A

Subject of the contract Client - sale of footwear

Guarantee and insurance Not applicable

Rescission or cancellation If activities are closed down

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16.2 – Information on transactions with related parties

Related party Transaction date

Amount involved (Reais) Present balance Amount (Reais) Duration

Loan or other type of debt

Interest rate charged

Nature of and reason for the transaction

Contractual position of the Issuer Creditor

Specify

Grendene Argentina S.A. 12/31/2015 23,848,000.00 R$ 7,426,000.00 R$ 7,426,000.00 Indeterminate period No 0.000000

Relationship with the Issuer Subsidiary

Subject of the contract Client - sale of footwear for supply to the market where it is located

Guarantee and insurance Not applicable

Rescission or cancellation If activities are closed down

Nature of and reason for the transaction

Contractual position of the Issuer Creditor

Specify

MHL Calçados Ltda 12/31/2015 1,675,000.00 R$ 16,000.00 R$ 16,000.00 Indeterminate period No 0.000000

Relationship with the Issuer Subsidiary

Subject of the contract Client - sale of input materials

Guarantee and insurance Not applicable

Rescission or cancellation If activities are closed down

Nature of and reason for the transaction

Contractual position of the Issuer Creditor

Specify

Grendene UK Limited 12/31/2015 625,000,00 R$ 648,000.00 R$ 648,000.00 Indeterminate period No 0.000000

Relationship with the Issuer Subsidiary

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16.2 – Information on transactions with related parties

Related party Transaction date

Amount involved (Reais) Present balance Amount (Reais) Duration

Loan or other type of debt

Interest rate charged

Subject of the contract Client - sale of footwear for supply to the market where it is located

Guarantee and insurance Not applicable

Rescission or cancellation If activities are closed down

Nature of and reason for the transaction

Contractual position of the Issuer Creditor

Specify

Grendene Italy SRL 12/31/2015 3,337,000.00 R$ 4,178,000.00 R$ 4,178,000.00 Indeterminate period No 0.000000

Relationship with the Issuer Indirectly controlled subsidiary

Subject of the contract Client - sale of footwear for supply to the market where it is located

Guarantee and insurance Not applicable

Rescission or cancellation If activities are closed down

Nature of and reason for the transaction

Contractual position of the Issuer Creditor

Specify

Grendene USA, Inc. 12/31/2015 22,358,000.00 R$ 18,103,000.00 R$ 18,103,000.00 Indeterminate period No 0.000000

Relationship with the Issuer Subsidiary

Subject of the contract Client - sale of footwear for supply to the market where it is located

Guarantee and insurance Not applicable

Rescission or cancellation If activities are closed down

Nature of and reason for the transaction

Contractual position of the Issuer Creditor

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16.2 – Information on transactions with related parties

Related party Transaction date

Amount involved (Reais) Present balance Amount (Reais) Duration

Loan or other type of debt

Interest rate charged

Specify

Dall´Onder Viagens & Turismo 12/31/2015 364,000.00 R$ 0.00 R$0.00 Indeterminate period No 0.000000

Relationship with the Issuer Company owned by the family of a Member of the Executive Board

Subject of the contract Supplier - air travel support and agency sales

Guarantee and insurance Not applicable

Rescission or cancellation If activities are closed down

Nature of and reason for the transaction

Contractual position of the Issuer Debtor

Specify

Vulcabras|Azaleia – CE, Calçados e Artigos

Esportivos S.A. 12/31/2015 490,000.00 R$46,000.00 R$ 46,000.00 Indeterminate period No 0.000000

Relationship with the Issuer Company controlled by a stockholder of Grendene S.A

Subject of the contract Supplier – purchase of input materials

Guarantee and insurance Not applicable

Rescission or cancellation If activities are closed down

Nature of and reason for the transaction

Contractual position of the Issuer Debtor

Specify

Vulcabras|Azaleia – CE, Calçados e Artigos

Esportivos S.A. 12/31/2016 3,000.00 R$ 0.00 R$ 0.00 Indeterminate period No 0.000000

Relationship with the Issuer Company controlled by a stockholder of Grendene S.A

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16.2 – Information on transactions with related parties

Related party Transaction date

Amount involved (Reais) Present balance Amount (Reais) Duration

Loan or other type of debt

Interest rate charged

Subject of the contract Supplier – purchase of input materials

Guarantee and insurance Not applicable

Rescission or cancellation If activities are closed down

Nature of and reason for the transaction

Contractual position of the Issuer Debtor

Specify

Vulcabras Distribuidora de Artigos Esportivos Ltda 12/31/2016 5,000.00 R$ 0.00 R$ 0.00 Indeterminate period No 0.000000

Relationship with the Issuer Company controlled by a stockholder of Grendene S.A

Subject of the contract Client - sale of footwear

Guarantee and insurance Not applicable

Rescission or cancellation If activities are closed down

Nature of and reason for the transaction

Contractual position of the Issuer Creditor

Specify

Vulcabrás|Azaléia Argentina S.A. 12/31/2015 6,637,000.00 R$ 200,000.00 R$ 200,000.00 Indeterminate period No 0.000000

Relationship with the Issuer Company controlled by a stockholder of Grendene S.A.

Subject of the contract Supplier - purchase of products and services by the subsidiary Grendene Argentina S.A.

Guarantee and insurance Not applicable

Rescission or cancellation If activities are closed down

Nature of and reason for the transaction

Contractual position of the Issuer Debtor

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16.2 – Information on transactions with related parties

Related party Transaction date

Amount involved (Reais) Present balance Amount (Reais) Duration

Loan or other type of debt

Interest rate charged

Specify

Vulcabrás|Azaléia Argentina S.A. 12/31/2016 592,000.00 R$ 0.00 R$ 0.00 Indeterminate period No 0.000000

Relationship with the Issuer Company controlled by a stockholder of Grendene S.A.

Subject of the contract Supplier - purchase of products and services by the subsidiary Grendene Argentina S.A.

Guarantee and insurance Not applicable

Rescission or cancellation If activities are closed down

Nature of and reason for the transaction

Contractual position of the Issuer Debtor

Specify

MHL Calçados Ltda 12/31/2016 8,000.00 R$ 3,000.00 R$ 3,000.00 Indeterminate period No 0.000000

Relationship with the Issuer Subsidiary

Subject of the contract Supplier - purchase of input materials

Guarantee and insurance Not applicable

Rescission or cancellation If activities are closed down

Nature of and reason for the transaction

Contractual position of the Issuer Debtor

Specify

Lagoa Clara Agrícola S.A. 12/31/2015 294,000.00 R$ 0.00 R$ 0.00 Indeterminate period No 0.000000

Relationship with the Issuer Company controlled by a stockholder of Grendene S.A.

Subject of the contract Reimbursement for recovery of expenses

Guarantee and insurance Not applicable

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16.2 – Information on transactions with related parties

Related party Transaction date

Amount involved (Reais) Present balance Amount (Reais) Duration

Loan or other type of debt

Interest rate charged

Rescission or cancellation If activities are closed down

Nature of and reason for the transaction

Contractual position of the Issuer Creditor

Specify

Lagoa Clara Agrícola S.A. 12/31/2016 8,000.00 R$ 0.00 R$ 0.00 Indeterminate period No 0.000000

Relationship with the Issuer Company controlled by a stockholder of Grendene S.A.

Subject of the contract Purchase of fixed assets

Guarantee and insurance Not applicable

Rescission or cancellation If activities are closed down

Nature of and reason for the transaction

Contractual position of the Issuer Debtor

Specify

A3NP Indústria e Comércio de Móveis S.A. 12/31/2015 54,000.00 R$ 6,000.00 R$ 6,000.00 Indeterminate period No 0.000000

Relationship with the Issuer Subsidiary

Subject of the contract Reimbursement for recovery of expenses

Guarantee and insurance Not applicable

Rescission or cancellation If activities are closed down

Nature of and reason for the transaction

Contractual position of the Issuer Creditor

Specify

MHL Calçados Ltda 12/31/2016 865,000.00 R$ 62,000.00 R$ 62,000.00 Indeterminate period No 0.000000

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16.2 – Information on transactions with related parties

Related party Transaction date

Amount involved (Reais) Present balance Amount (Reais) Duration

Loan or other type of debt

Interest rate charged

Relationship with the Issuer Subsidiary

Subject of the contract Client – sale of input materials

Guarantee and insurance Not applicable

Rescission or cancellation If activities are closed down

Nature of and reason for the transaction

Contractual position of the Issuer Creditor

Specify

Vulcabras|Azaleia – BA, Calçaos e Artigos

Esportivos S.A. 12/31/2015 10,000.00 R$ 0.00 R$ 0.00 Indeterminate period No 0.000000

Relationship with the Issuer Company controlled by a stockholder of Grendene S.A.

Subject of the contract Client - sale of input materials

Guarantee and insurance Not applicable

Rescission or cancellation If activities are closed down

Nature of and reason for the transaction

Contractual position of the Issuer Creditor

Specify

Grendene USA, Inc 12/31/2016 1,025,000.00 R$ 333,000.00 R$ 333,000.00 Indeterminate period No 0.000000

Relationship with the Issuer Subsidiary

Subject of the contract Supplier - services of commercial representation for clients with head office in the USA

Guarantee and insurance Not applicable

Rescission or cancellation If activities are closed down

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16.2 – Information on transactions with related parties

Related party Transaction date

Amount involved (Reais) Present balance Amount (Reais) Duration

Loan or other type of debt

Interest rate charged

Nature of and reason for the transaction

Contractual position of the Issuer Debtor

Specify

Dall´Onder Viagens & Turismo Ltda 12/31/2016 461,000.00 R$0.00 R$0.00 Indeterminate period No 0.000000

Relationship with the Issuer Company owned by the family of a Member of the Executive Board

Subject of the contract Supplier - air travel support and agency sales

Guarantee and insurance Not applicable

Rescission or cancellation If activities are closed down

Nature of and reason for the transaction

Contractual position of the Issuer Debtor

Specify

Vulcabrás Distribuidora de Artigos Esportivos Ltda 12/31/2015 1,000.00 R$ 1,000.00 R$ 1,000.00 Indeterminate No 0.000000

Relationship with the Issuer Company controlled by a stockholder of Grendene S.A.

Subject of the contract Client - sale of footwear

Guarantee and insurance Not applicable

Rescission or cancellation If activities are closed down

Nature of and reason for the transaction

Contractual position of the Issuer Creditor

Specify

Mailson da Nóbrega Consultoria S/C Ltda 12/31/2015 72,000.00 R$ 0.00 R$ 0.00 Indeterminate period No 0.000000

Relationship with the Issuer Member of the Board of Directors

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16.2 – Information on transactions with related parties

Related party Transaction date

Amount involved (Reais) Present balance Amount (Reais) Duration

Loan or other type of debt

Interest rate charged

Subject of the contract Assessment

Guarantee and insurance Not applicable

Rescission or cancellation If activities are closed down

Nature of and reason for the transaction

Contractual position of the Issuer Debtor

Specify

Vulcabrás|Azaléia – CE, Calçados e Artigos Esportivos S.A. 12/31/2017 69,000.00 R$ 0.00 R$ 0.00 Indeterminate No 0.000000

Relationship with the Issuer Company controlled by a stockholder of Grendene S.A.

Subject of the contract Client - sale of input and moulds used in the production of footwear

Guarantee and insurance Not applicable

Rescission or cancellation If activities are closed down

Nature of and reason for the transaction

Contractual position of the Issuer Creditor

Specify

MHL Calçados Ltda 12/31/2017 1,024,000.00 R$ 30,000.00 R$ 30,000.00 Indeterminate period No 0.000000

Relationship with the Issuer Subsidiary

Subject of the contract Client - sale of input used in the production of footwear

Guarantee and insurance Not applicable

Rescission or cancellation If activities are closed down

Nature of and reason for the transaction

Contractual position of the Issuer Creditor

Specify

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16.2 – Information on transactions with related parties

Related party Transaction date

Amount involved (Reais) Present balance Amount (Reais) Duration

Loan or other type of debt

Interest rate charged

MHL Calçados Ltda S.A. 12/31/2017 35,000.00 R$ 9,000.00 R$ 9,000.00 Indeterminate No 0.000000

Relationship with the Issuer Subsidiary

Subject of the contract Client - purchase of input used in the production of footwear

Guarantee and insurance Not applicable

Rescission or cancellation If activities are closed down

Nature of and reason for the transaction

Contractual position of the Issuer Debtor

Specify

Grendene USA, Inc. 12/31/2017 17,983,000.00 R$ 12,621,000.00 R$ 12,621,000.00 Indeterminate No 0.000000

Relationship with the Issuer Subsidiary

Subject of the contract Client - sale of footwear for supply to the market where it is located

Guarantee and insurance Not applicable

Rescission or cancellation If activities are closed down

Nature of and reason for the transaction

Contractual position of the Issuer Creditor

Specify

Grendene USA, Inc 12/31/2017 1,082,000.00 R$ 537,000.00 R$ 537,000.00 Indeterminate period No 0.000000

Relationship with the Issuer Subsidiary

Subject of the contract Supplier - services of commercial representation for clients with head office in the USA

Guarantee and insurance Not applicable

Rescission or cancellation If activities are closed down

Nature of and reason for the transaction

Contractual position of the Issuer Debtor

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16.2 – Information on transactions with related parties

Related party Transaction date

Amount involved (Reais) Present balance Amount (Reais) Duration

Loan or other type of debt

Interest rate charged

Specify

Grendene UK Limited 12/31/2017 1,195,000.00 R$ 849,000.00 R$ 849,000.00 Indeterminate No 0.000000

Relationship with the Issuer Subsidiary

Subject of the contract Client - sale of footwear for supply to the market where it is located

Guarantee and insurance Not applicable

Rescission or cancellation If activities are closed down

Nature of and reason for the transaction

Contractual position of the Issuer Creditor

Specify

Grendene Italy SRL 12/31/2017 3,664,000.00 R$3,287,000.00 R$ 3,287,000.00 Indeterminate No 0.000000

Relationship with the Issuer Indirectly controlled subsidiary

Subject of the contract Client - sale of footwear for supply to the market where it is located

Guarantee and insurance Not applicable

Rescission or cancellation If activities are closed down

Nature of and reason for the transaction

Contractual position of the Issuer Creditor

Specify

Ochman, Real Amadeo Advogados Associados 12/31/2016 54,000.00 R$0.00 R$0.00 Indeterminate No 0.000000

Relationship with the Issuer Company controlled by a member of the Board of Directors

Subject of the contract Assessment

Guarantee and insurance Not applicable

Rescission or cancellation If activities are closed down

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16.2 – Information on transactions with related parties

Related party Transaction date

Amount involved (Reais) Present balance Amount (Reais) Duration

Loan or other type of debt

Interest rate charged

Nature of and reason for the transaction

Contractual position of the Issuer Debtor

Specify

Mailson da Nóbrega Consultoria S/C Ltda 12/31/2017 72,000.00 R$ 0.00 R$ 0.00 Indeterminate No 0.000000

Relationship with the Issuer Company controlled by a member of the Board of Directors

Subject of the contract Assessment

Guarantee and insurance Not applicable

Rescission or cancellation If activities are closed down

Nature of and reason for the transaction

Contractual position of the Issuer Debtor

Specify

Vulcabrás|Azaléia – BA, Calçados e Artigos Esportivos S.A. 12/31/2017 1,291,000.00 R$ 0.00 R$ 0.00 Indeterminate No 0.000000

Relationship with the Issuer Company controlled by a stockholder of Grendene S.A.

Subject of the contract Client - sale of moulds used in the production of footwear

Guarantee and insurance Not applicable

Rescission or cancellation If activities are closed down

Nature of and reason for the transaction

Contractual position of the Issuer Creditor

Specify

Ochman, Real Amadeo Advogados Associados 12/31/2017 98,000.00 R$0.00 R$0.00 Indeterminate No 0.000000

Relationship with the Issuer Company controlled by a member of the Board of Directors

Subject of the contract Assessment

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16.2 – Information on transactions with related parties

Related party Transaction date

Amount involved (Reais) Present balance Amount (Reais) Duration

Loan or other type of debt

Interest rate charged

Guarantee and insurance Not applicable

Rescission or cancellation If activities are closed down

Nature of and reason for the transaction

Contractual position of the Issuer Debtor

Specify

Vulcabrás|Azaleia – CE, Calçados e Artigos

Esportivos S.A. 12/31/2017 2,000.00 R$0.00 R$0.00 Indeterminate No 0.000000

Relationship with the Issuer Company controlled by a stockholder of Grendene S.A.

Subject of the contract Supplier – Purchase of services referred to commissions / Trademark use license and indemnity for commercial representantive

Guarantee and insurance Not applicable

Rescission or cancellation If activities are closed down

Nature of and reason for the transaction

Contractual position of the Issuer Debtor

Specify

Dall´Onder Viagens & Turismo Ltda 12/31/2017 479,000.00 R$0.00 R$0.00 Indeterminate period No 0.000000

Relationship with the Issuer Company owned by the family of a Member of the Executive Board

Subject of the contract Supplier - air travel support and agency sales

Guarantee and insurance Not applicable

Rescission or cancellation If activities are closed down

Nature of and reason for the transaction

Contractual position of the Issuer Debtor

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16.3 - Identification of the measures taken to deal with conflicts of interest - proof of the strictly commutative nature of terms agreed, and/or that compensatory payment is appropriate The Company adopts best corporate governance practices and those recommended and required by rules and legislation, including the rules of the Novo Mercado Regulations. Decision on all the Company's operations is submitted to the Board of Directors and the Executive Board, in accordance with the competencies described in the By-laws. Thus, all the Company's transactions, especially those with related parties, have been duly submitted to those decision bodies of the Company to which they were subordinated, in accordance with rules in force. Also, in accordance with the Corporate Law, any member of the Board of Directors of the Company is prohibited from voting in any General Meeting or meeting of the Board, or to take part in any transaction or business, in which he has interests conflicting with those of the Company. Our transactions and business with related parties follow the market standards and are supported by the appropriate prior evaluations of their terms and the strict interest of the Company in carrying them out.

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16.4 – Other material information There is no other information that is considered to be material.

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17.1 – Information on the share capital

Date of authorization or approval

Amount of the share capital (Reais)

Period for paying-up

Number of common shares

Number of preferred shares

Total number of shares

Type of capital Paid-up capital

April 23, 2018 1,231,301,604.46 902,160,000 0 902,160,000

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17.2 – Increases in the share capital Justification for not filling in the table: The Company has not carried out any increase in the share capital in the last 3 (three) business years.

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17.3 – Information on share splits, reverse splits or stock bonuses

Date of approval

Number of share before approval (Unit) Number of share after approval (Unit)

Number of common shares

Number of preferred shares

Total Number of common

shares Number of

preferred shares Total

Split

April 23,2018 300,720,000 0 300,720,000 902,160,000 0 902,160,000

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17.4 – Information on reduction of the share capital Justification for not filling in the table: The Company has not carried out any reduction of the share capital in the last 3 (three) business years.

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17.5 – Other material information

Table showing the share capital and the number of common shares issued by Grendene S.A.

Date of decision / issue

Body which decided the

increase

Amount of the increase

Number of shares issued and paid up in

funds / split

Total number of shares

Average issue price

Percentage increase in

share capital Final share capital

4/16/2007 (1) AGM/EGM R$ 121,137,297.32 - 100,000,000 - 14.4% R$ 964,584,197.90

4/14/2008 (1) AGM/EGM R$ 132,615,023.39 - 100,000,000 - 13.7% R$ 1,097,199,221.29

4/6/2009 (1) AGM/EGM R$ 129,560,889.42 - 100,000,000 - 11.8% R$ 1,226,760,110.71

9/21/2009 (2) EGM - 200,000,000 300,000,000 - - R$ 1,226,760,110.71

4/19/2010 (3) AGM/EGM R$ 4,541,493.75 720,000 300,720,000 R$ 6.31 0.4% R$ 1,231,301,604.46

4/23/2018 (4) AGM/EGM - 601,440,000 902,160,000 - - R$ 1,231,301,604.46

(1) Increase in the share capital arising from incorporation of the Tax Incentive Reserves. (2) Share split: Two new shares issued for each share held on September 22, 2009 (3 for 1). (3) The Ordinary and Extraordinary General Meetings of Stockholders held on April 19, 2010 ratified the increase in the share

capital approved on March 22, 2010 in a meeting of the Board of Directors. This increase arose from the exercise of the option to subscribe 720,000 shares by the participants in the Stock Options and Subscription Plan.

(4) Share split: Two new shares issued for each share held on April 23, 2018 (3 for 1). The Ordinary and Extraordinary General Meeting of Stockholders of April 16, 2007 approved incorporation into the Company's share capital of the following items and amounts: The Tax Incentives Reserve relating to income tax for the business year ended December 31, 2006, in the amount of R$ 32,533,108.79; the subsidy for investments relating to the benefits (Proapi and Provin) granted by the State of Ceará, in the amount of R$ 88,604,188.53, thus making a total of R$ 121,137,297.32; and the consequent change in the drafting of Clause 5 of the By-laws relating to the amount of the share capital which was R$ 843,446,900.58 and was increased to R$ 964,584,197.90, without change in the number of shares, as permitted by Article 169, §1 of the Corporate Law.

The Ordinary and Extraordinary General Meeting of Stockholders of April 14, 2008 approved incorporation into the share capital of the following: The Tax Incentives Reserve relating to income tax for the business year ended December 31, 2007, in the amount of R$ 30,843,234.88; and the subsidy for investments relating to the benefits (Proapi and Provin) granted by the State of Ceará, in the amount of R$ 101,771,788.51, thus making a total of R$ 132,615,023.39, and consequent change in Clause 5 of the By-laws, relating to the amount of the share capital, which was R$ 964,584,197.90 and was increased to R$ 1,097,199,221.29 without change in the number of shares, as allowed by Article 169, §1 of the Corporate Law.

The Ordinary and Extraordinary General Meeting of Stockholders of April 6, 2009 approved incorporation into the share capital of the Tax Incentives Reserve relating to income tax for the business year ended December 31, 2008, in the amount of R$ 24,151,215.37; and the subsidy for investment relating to the benefits (Proapi and Provin) granted by the State of Ceará, in the amount of R$ 105,409,674.05, thus making a total of R$ 129,560,889.42, and the consequent change in Clause 5 of the By-laws, relating to the amount of the share capital, which was R$ 1,097,199,221.29 and became R$ 1,226,760,110.71 without change in the number of shares, as allowed by Article 169, §1 of the Corporate Law.

The Extraordinary General Meeting of Stockholders held on September 21, 2009 approved a split in the Company shares, bringing into existence 2 (two) new common shares for each share, which resulted in the number of shares (the Company has only common shares) being increased from 100,000,000 to 300,000,000.

The Ordinary and Extraordinary General Meetings of Stockholders held on April 19, 2010 approved new drafting of the head paragraph of Clause 5 of the By-laws, relating to the share capital and the quantity of nominal common shares, without par value, subscribed and paid up, arising from a private issue of 720,000 (seven hundred and twenty thousand) new common shares, without par value, to meet the requirements of the Company's Stock Options Plan, to provide for exercise of such options by eligible executives of the Company, comprising 496,875 (four hundred ninety six thousand eight hundred seventy five) nominal common shares without par value at the issue price of R$ 7.29 (seven Reais and twenty nine centavos), totaling R$ 3,622,218.75 (three million six hundred twenty two thousand two hundred and eighteen Reais and seventy five centavos), authorized in the first program, and 223,125 (two hundred twenty three thousand one hundred twenty five) nominal common shares, without par value, at the price of R$ 4.12 (four Reais and twelve centavos), totaling R$ 919,275.00 (nine hundred nineteen two hundred seventy five Reais), authorized in the second program, as specified by the terms of the Stock Options Plan.

The Extraordinary General Meeting of Stockholders held on April 23, 2018 approved a split in the Company shares, bringing into existence 2 (two) new common shares for each share, which resulted in the number of shares (the Company has only common shares) being increased from 300,720,000 to 902,160,000. Stockholders of record on May 30, 2018 will receive 2 (two) additional new shares for each common share held, to be credited to them on June 06, 2018 (D+3). The shares will trade post-split on June 01, 2018.

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18.1 – Rights of the shares

Type of share or Depositary receipts Common shares

Tag-along 100.000000 %

Right to dividends Under Clause 32 of the Company’s by-laws, stockholders have the right to an annual obligatory dividend equivalent to, at least, 25% (twenty five per cent) of the net profit for the business year, with the following deductions or additions as appropriate: a) 5% (five per cent) for constitution of the Legal Reserve, until that reserve reaches the limits set by law; and b) an amount allocated to formation of contingency reserves, and reversal of those reserves that have been formed in previous years, as specified in Article 195 of the Corporate Law.

Right to vote Full

Convertibility No

Right to reimbursement of capital Yes

Description of the characteristics of the reimbursement of capital

In the event of liquidation of the Company, under Article 48 of its By-laws, the Company cannot be dissolved or go into liquidation except in the circumstances prescribed by law, and it is for the General Meeting of Stockholders to establish the manner of liquidation and to elect, as well as the liquidator(s), the members of the Audit Board, which shall function in the period of liquidation, and to set their powers and remuneration.

Restriction on circulation Redeemable Conditions for redemption, and formula for calculation of the amount of the redemption

No

Conditions required for changes to the rights carried by the securities

Under the Corporate Law, neither the By-laws of the Company nor any decision adopted by the stockholders in General Meetings can deprive the stockholders of the following rights: (i) the right to distribution of the profits; (ii) the right to participate, in proportion to their interest, in the distribution of any assets remaining in the event of liquidation of the Company; (iii) the right to monitor and inspect the management of the Company, in the terms provided for in the Corporate Law; (iv) preference in subscription of future capital increases, except in certain circumstances specified in the Corporate Law; and (v) the right to withdraw from the Company in the circumstances specified in the Corporate Law.

Other material characteristics There are no additional material characteristics.

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18.2 – Description of any rules in the By-laws that limit the right to vote held by significant stockholders or which oblige them to make a public offering Below we set out Clauses 36 to 40 of the Company's By-laws, which provide for the limit circumstances for voting, and circumstances in which a public offering for acquisition of shares is obligatory: Clause 36. Any disposal of shares that give one stockholder, or a group of stockholders which are linked by any type of voting agreement, whether directly or through subsidiaries, holding companies or companies under joint control, or between which there is a relationship of control or which are under joint control, the effective power to direct the company’s activities and orient the functioning of the Company’s bodies, directly or indirectly, in fact or in law, independently of the actual stockholding interest owned ('Power of Control'), either by means of a single transaction or by means of successive transactions, shall be contracted on the suspensive or canceling condition that the acquiring party undertakes to make a public offer to acquire the shares of the other stockholders of the Company, complying with the conditions and period specified in the legislation from time to time in force and in the Novo Mercado Listing Regulations, in such a way as to ensure that they receive equal treatment to that given to the disposing party.

§1 There is a relative presumption of ownership of the Power of Control in relation to the person or group of stockholders that

holds shares which have secured for it the absolute majority of the votes of stockholders present in the three most recent prior General Meetings of Stockholders of the Company, even if it is not holder of shares representing the absolute majority of the Company’s voting stock

Clause 37. The public offering for acquisition of shares referred to by the head paragraph of Clause 36 shall also be required when there is assignment, for consideration, of rights to subscribe shares or other securities or rights relating to securities convertible into shares, such as may result in disposal of shares that ensure the Power of Control of the Company. Clause 38. The public offer for acquisition of shares referred to in Clause 36 will also be required in the event of disposal of the Power of Control over a company or companies that hold/s the Power of Control over the Company. In this case, the stockholder disposing of the Power of Control of the company or companies shall be obliged to declare to the BM&FBovespa the value attributed to the Company in this disposal, and attach documentation that proves this amount. Clause 39. Any party that acquires the Power of Control of the Company by reason of a private contract to purchase shares entered into with the stockholder or group of stockholders that represents the Power of Control of the Company, shall be obliged to:

a. Make the public offer referred to in the head paragraph of Clause 36; and

b. Pay, in the terms set out below, an amount equivalent to the difference between the price of the public offer and the amount paid per share for any acquisition of shares on a securities exchange in the six months prior to the date of acquisition of such shares as ensure for it the Power of Control over the Company, duly updated until the date of payment. This amount shall be distributed between all the parties that sold shares in the Company in the trading sessions in which the Acquiring Party made the acquisitions, in proportion to the net daily vendor balance of each one, it being for the BM&FBovespa to effect the operation of this distribution, in accordance with its regulations.

Clause 40. Without prejudice to the provisions of law and regulations, cancellation of the Company’s registry for listing shall be preceded by a public offer to acquire shares, to be made by the stockholder holding the Power of Control or by the Company (in either case, 'the Offering Party'), having as obligatory minimum price the economic value ascertained in a Valuation Opinion.

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18.3 – Description of exceptions or suspensive clauses relating to property or political rights specified in the By-laws There are no exceptions or suspensive clauses provided for in the Company's By-laws.

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18.4 – Trading volume and highest and lowest share prices of the securities traded Business year

12/31/2017

Quarter Security Type Class Market Administrative entity Financial volume

traded (Reais) Highest market price

(Reais) Lowest market price

(Reais) Factor price

Medium market price (Reais)

03/31/2017 Shares Common Exchange BM&FBovespa S.A. – Securities, Commodities and Futures Exchange

389,507,136 22.72 17.20 R$ per share 19.64

06/30/2017 Shares Common Exchange BM&FBovespa S.A. – Securities, Commodities and Futures Exchange

521,570,131 28.79 22.20 R$ per share 25.02

09/30/2017 Shares Common Exchange BM&FBovespa S.A. – Securities, Commodities and Futures Exchange

677,701,635 31.49 25.54 R$ per share 27.74

12/31/2017 Shares Common Exchange BM&FBovespa S.A. – Securities, Commodities and Futures Exchange

613,575,541 28.80 25.32 R$ per share 26.72

Business year

12/31/2016

Quarter Security Type Class Market Administrative entity Financial volume

traded (Reais) Highest market price

(Reais) Lowest market price

(Reais) Price Unit

Medium market price (Reais)

03/31/2016 Shares Common Exchange BM&FBovespa S.A. – Securities, Commodities and Futures Exchange

236,614,299 18.03 14.60 R$ per share 16.31

06/30/2016 Shares Common Exchange BM&FBovespa S.A. – Securities, Commodities and Futures Exchange

246,653,636 17.70 15.25 R$ per share 16.36

09/30/2016 Shares Common Exchange BM&FBovespa S.A. – Securities, Commodities and Futures Exchange

374,674,163 18.75 15.92 R$ per share 17.50

12/31/2016 Shares Common Exchange BM&FBovespa S.A. – Securities, Commodities and Futures Exchange

356,953,475 20.54 16.01 R$ per share 18.01

Business year

12/31/2015

Quarter Security Type Class Market Administrative entity Financial volume

traded (Reais) Highest market price

(Reais) Lowest market price

(Reais) Factor price

Medium market price (Reais)

03/31/2015 Shares Common Exchange BM&FBovespa S.A. – Securities, Commodities and Futures Exchange

393,844,737 18.01 13.66 R$ per share 15.32

06/30/2015 Shares Common Exchange BM&FBovespa S.A. – Securities, Commodities and Futures Exchange

361,393,185 18.78 16.25 R$ per share 17.53

09/30/2015 Shares Common Exchange BM&FBovespa S.A. – Securities, Commodities and Futures Exchange

297,633,969 18.41 14.93 R$ per share 17.27

12/31/2015 Shares Common Exchange BM&FBovespa S.A. – Securities, Commodities and Futures Exchange

264,686,509 18.91 16.10 R$ per share 17.49

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18.5 – Description of other securities issued Justification for not filling in the table: The Company does not have other securities issued.

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18.6 – Brazilian markets in which the securities are admitted for trading The Company's shares are traded on the BM&FBovespa – Bolsa de Valores Mercadorias e Futuros (Securities, Commodities and Futures Exchange) under the ticker GRND3.

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18.7 – Information on the class and type of security admitted for trading on foreign markets There are no securities traded on foreign markets.

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18.8 – Justification for not filling in the table: The Company has no securities issues outside Brazil.

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18.9 – Public offerings for distribution made by the issuer or by third parties, including controlling stockholders and affiliated or subsidiary companies, in relation to securities of the Issuer The Company has not made any public offering for distribution in the last three business years.

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18.10 – Allocation of the proceeds of public offerings for distribution, and any divergences The Company has not made any public offering for distribution in the last three business years.

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18.11 – Description of the public offers for acquisition made by the issuer in relation to shares issued by third parties The Company has not made any public offering for acquisition of shares issued by third parties in the last three business years.

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18.12 – Other material information There is no other information that is considered to be material.

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19.1 – Information on buyback plans for shares of the Issuer

Date decided

Buyback period

Reserves and profits available (R$ )

Type Class Amount expected (Units)

% of free float.

Of no. approved, how many acquired

Weighted average acquisition price

Price unit % acquired

Other characteristics.

Jul. 27, 2017 Aug. 25, 2017 to Feb. 21, 2019

14,563,535.58 Common 2,000,000 2.380000 1,312,343 26.78 R$ per share 65,600000

A meeting of the Board of Directors held on July 27, 2017 approved a new share buyback program for the Company's nominal shares without par value, to be held in treasury and subsequently sold, without reduction of the share capital, to comply with the exercise of future options granted and exercisable to its executives of the Stock Options Plans, subject to the conditions established in the Regulations of the Stock Options and Subscription Program. The Board believes that acquisition of common shares in the market is the best way to fulfill this requirement. On this date the Company has 7,543 nominal common shares in treasury, permitted in the Minutes of the Meeting of the Board of Directors of February 25, 2016 for subsequent sale. The new program will have the following characteristics: a) limit of acquisition, subject to Articles 8 and 5 of CVM Instruction 567/2016, and the stockholding structure at July 27, 2017: up to 2,000,000 nominal common shares without par value corresponding to 2.38% of the total shares in circulation. The total number of common shares, comprising the share capital of the Company, is 300,720,000, as follows: 83,872,464 shares in circulation; 7,543 shares in treasury; and 216,839,993 common shares owned by the controlling stockholders and managers of the Company. b) Period of acquisition: 545 days. Start August 25, 2017. Termination: February 21, 2019. c) Acquisition price: market price.

Feb. 25, 2016 Feb. 26, 2016 to Aug.24, 2017

16,117,226.79 Common 1,500,000 1.820000 547,841 17.96 R$ per share 36.500000

Common 1,500,000 1.820000 637,840 17.28 R$ per share 42.500000

A meeting of the Board of Directors held on February 25, 2016 approved a new share buyback program for the Company's nominal shares without par value, to be held in treasury and subsequently sold, without reduction of the share capital, to comply with the exercise of future options granted and exercisable to its executives of the 4th, 5th, 6th, 7th, 8th and 9th Stock Options Plans, subject to the conditions established in the Regulations of the Stock Options and Subscription Program. The Board believes that acquisition of common shares in the market is the best way to fulfill this requirement. On this date the Company has 65,026 nominal common shares in treasury, permitted in the Minutes of the Meeting of the Board of Directors of February 12, 2015 for subsequent sale, in compliance with the exercise of options exercisable up to and including 2015. The new program will have the following characteristics: a) limit of acquisition, subject to Articles 8 and 5 of CVM Instruction 567/2016, and the stockholding structure at February 25, 2016: up to 1,500,000 (one million five hundred thousand) nominal common shares without par value corresponding to 1.82% of the total shares in circulation. The total number of common shares, comprising the share capital of the Company, is 300,720,000 (three hundred million seven hundred twenty thousand), as follows: 82,515,922 shares in circulation; 65.026 shares in treasury; and 218,139,052 common shares owned by the controlling stockholders and managers of the Company. b) Period of acquisition: 545 days. Start February 26, 2016. Termination: August 24, 2017. c) Acquisition price: market price.

Feb. 12, 2015 Feb. 13, 2015 to Feb. 12, 2016

17,000,000.00 Common 1,500,000 1.910000 0 0.00 R$ per share 0.000000

A meeting of the Board of Directors held on February 12, 2015 approved a new share buyback program for the Company's nominal shares without par value, to be held in treasury and subsequently sold, without reduction of the share capital, to comply with the exercise of future options granted and exercisable to its executives of the 4th, 5th, 6th, 7th and 8th Stock Options Plans, subject to the conditions established in the Regulations of the Stock Options and Subscription Program. The Board believes that acquisition of common shares in the market is the best way to fulfill this requirement. On this date the Company has 660,000 nominal common shares in treasury, permitted in the Minutes of the Meeting of the Board of Directors of February 13, 2014 for subsequent sale, in compliance with the exercise of options exercisable up to and including 2015. The new program will have the following characteristics: a) limit of acquisition, subject to Articles 3 and 5 of CVM Instruction 10/80, the provisions of CVM Instruction 268/97 and the stockholding structure at February 12, 2015: up to 1,500,000 (one million five hundred thousand) nominal common shares without par value corresponding to 1.91% of the total shares in circulation. The total number of common shares, comprising the share capital of the Company, is 300,720,000 (three hundred million seven hundred twenty thousand), as follows: 78,492,166 shares in circulation; 660,000 shares in treasury; and 221,567,834 common shares owned by the controlling stockholders and managers of the Company. b) Period of acquisition: 365 days. Start February 13, 2015. Termination: February 12, 2016. c) Acquisition price: market price.

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19.1 – Information on buyback plans for shares of the Issuer

Date decided

Buyback period

Reserves and profits available (R$ )

Type Class Amount expected (Units)

% of free float.

Of no. approved, how many acquired

Weighted average acquisition price

Price unit % acquired

Other characteristics.

Feb. 13, 2014 Feb. 14, 2014 to Feb. 13, 2015

19,072,706.38 Common 1,500,000 1.950000 487,096 14.38 R$ per share 32.473067

A meeting of the Board of Directors held on February 13, 2014 approved a new share buyback program for the Company's nominal shares without par value, to be held in treasury and subsequently sold, without reduction of the share capital, to comply with the exercise of future options granted and exercisable to its executives of the 4th, 5th, 6th and 7th Stock Options Plans, subject to the conditions established in the Regulations of the Stock Options and Subscription Program. The Board believes that acquisition of common shares in the market is the best way to fulfill this requirement. On this date the Company has 863,782 nominal common shares in treasury, permitted in the Minutes of the Meeting of the Board of Directors of February 28, 2013 for subsequent sale, in compliance with the exercise of options exercisable up to and including 2014. The new program will have the following characteristics: a) limit of acquisition, subject to Articles 3 and 5 of CVM Instruction 10/80, the provisions of CVM Instruction 268/97 and the stockholding structure at February 13, 2014: up to 1,500,000 (one million five hundred thousand) nominal common shares without par value corresponding to 1.95% of the total shares in circulation. The total number of common shares, comprising the share capital of the Company, is 300,720,000 (three hundred million seven hundred twenty thousand), as follows: 76,675,080 shares in circulation; 863,782 shares in treasury; and 223,181,138 common shares owned by the controlling stockholders and managers of the Company. b) Period of acquisition: 365 days. Start February 14, 2014. Termination: February 13, 2015. c) Acquisition price: market price.

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19.2 – Information on plans to repurchase shares of the Issuer

Business year ending Dec. 31, 2017

Shares

Type of share Class of share if preferred Description of the securities Market price factor

Common R$ per unit

Movement Quantity (unit)

Weighted average price of

acquisition / disposal (Reais)

Initial balance 70,300

Acquisition 547,841 17.96

Disposal 610,598 17.80

Canceled 0

Final balance 7,543

Ratio – Securities in circulation 0.008920%

Business year ending Dec. 31, 2016

Shares

Type of share Class of share if preferred Description of the securities Market price factor

Common R$ per unit

Movement Quantity (unit)

Weighted average price of

acquisition / disposal (Reais)

Initial balance 65,026

Acquisition 637,840 17.28

Disposal 632,566 17.24

Canceled 0

Final balance 70,300

Ratio – Securities in circulation 0.085257%

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19.2 – Information on plans to repurchase shares of the Issuer

Business year ending Dec. 31, 2015

Shares

Type of share Class of share if preferred Description of the securities Market price factor

Common R$ per unit

Movement Quantity (unit)

Weighted average price of

acquisition / disposal (Reais)

Initial balance 660,000

Acquisition 198,096 15.31

Disposal 793,070 16.17

Canceled 0

Final balance 65,026

Ratio – Securities in circulation 0.078804%

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19.3 – Other material information – Buyback plans / Treasury shares

Business year ending Dec. 31, 2015

Securities in circulation / common share Quantity (Unit) Weighted average price / R$ per unit

Initial balance 660,000 R$16.43

Acquisition 198,096 R$15.31

Disposal 793,070 R$16.17

Final balance 65,026 R$16.17

Business year ending Dec. 31, 2016

Securities in circulation / common share Quantity (Unit) Weighted average price / R$ per unit

Initial balance 65,026 R$16.17

Acquisition 637,840 R$17.28

Disposal 632,566 R$17.24

Final balance 70,300 R$16.63

Business year ending Dec. 31, 2017

Securities in circulation / common share Quantity (Unit) Weighted average price / R$ per unit

Initial balance 70,300 R$16.63

Acquisition 547,841 R$17.96

Disposal 610,598 R$17.80

Final balance 7,543 R$17.80

Business year ending Dec. 31, 2018

Securities in circulation / common share Quantity (Unit) Weighted average price / R$ per unit

Initial balance 7,543 R$17.80

Acquisition 1.312,343 R$26.78

Disposal 684,886 R$28.79

Final balance 635,000 R$24.51

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20.1 – Information on the securities trading policy

Date approved January 28, 2005

Position and/or function Members of the Audit Board Persons with post, function or position in the Company giving them knowledge of material information The complete list of persons blocked from trading is available in item 20.2 Direct and indirect controlling stockholders Executive Board and senior management

Members of the Board of Directors

Main features

The securities trading policy of Grendene S.A. aims to establish guidelines and procedures to be obeyed by the Company and parties linked to it, for trading of securities issued by the Company, or referenced to it, and based on the provisions of CVM Instruction 358, of January 3, 2002, ensuring, for all interested parties, without any being privileged to the detriment of any other, the adoption of mechanisms that ensure control and transparency of trading in the securities issued by Grendene S.A.

Prohibited trading periods and description of inspection procedures

In the 15 (fifteen) days prior to the disclosure or publication of: a) any material event or fact; b) the Company's Quarterly Information; c) the Company's annual information; and d) the Company's financial statements. The prohibited parties must sign adherence to the Trading Policy, by signing the Term of Commitment. Monitoring inspection of compliance with the Policy for Trading in Securities of Grendene S.A. is carried out by the Chief Investor Relations Officer by monitoring the movement of shares of related parties.

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20.2 – Other material information

The Policy for Trading in Securities issued by Grendene S.A. is reproduced in full below.

POLICY FOR TRADING IN SECURITIES OF GRENDENE S.A.

I – INTRODUCTION

GRENDENE S.A. became a listed company with shares traded on the Novo Mercado of the São Paulo Stock Exchange (Bovespa) under the ticker GRND3, on October 29, 2004. Participation in this listing segment shows a degree of commitment to the highest standards of corporate governance. For this reason the Company has decided to establish and publish its Policy for Trading in Securities issued by the Company.

The objective of policy for trading in the securities of Grendene S.A. is to establish guidelines and procedures to be obeyed by the Company and people connected to it, for the trading of securities issued by the Company, or referenced to the Company, based on the provisions of CVM Instruction 358 of January 3, 2002, designed to guarantee adoption of mechanisms that ensure control and transparency of trading in securities issued by Grendene S.A., for all interested parties, without privileging any one over others. In view of the registry with the Novo Mercado of the Bovespa, we are also adapting the present policy to the regulations of that Exchange.

The Board of Directors of Grendene S.A., using their powers, decided, as reported in the minutes of January 28, 2005, to approve the Policy for Trading in Securities issued by Grendene, assigning to the Investor Relations Director the responsibility for general implementation of the procedures necessary for obedience to the rules and for the general administration of the Trading Policy.

II – ACCEPTANCE AND COMMITMENT

Persons prohibited from trading must sign acceptance of and commitment to this Trading Policy by signature of the Term of Commitment, as per Appendix A, including related parties, and at the Company's option, such others as it considers to be necessary or convenient, who shall sign in the status of Related Parties. The Term of Commitment must also be signed, at the moment of contracting, election, promotion or transfer, by which the party concerned recognizes the terms of the policy and undertakes to obey them.

III – PERSONS PROHIBITED FROM TRADING

The following persons are prohibited from trading, as from the moment that they become aware of any material event or fact that has not yet been published:

a) Direct and indirect controlling stockholders;

b) Members of the Executive Board and senior management;

c) Members of the Board of Directors;

d) Members of the Audit Board or of any consultative or technical councils or bodies;

e) Any person who by reason of job, function or position in the Company, its parent company, or any of its subsidiaries or affiliated companies, becomes aware of material information;

f) Related parties: Spouse, domestic partner, sons or daughters of the persons indicated in sub-items 'a', 'b', 'c', 'd' and 'e' above.

The following have the same status as people prevented from trading:

a) Their portfolio managers and the investment funds, companies or other institutions or entities in which the persons prohibited from trading are the sole unit holders or stockholders or in which they can influence trading decisions;

b) Any legal entity directly or indirectly controlled by the persons prohibited from trading;

c) Any person who has had access to information relating to a material event or fact through any of the persons prohibited from trading as intermediary.

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20.2 – Other material information

IV – PROHIBITION ON TRADING

The Company, Members of its Board of Directors and Executive Board, Controlling Stockholders (direct and indirect), members of its Audit Board, its Employees and Executives that have access to Material Information, and members of the other bodies with technical or consultative functions of the Company, and, further, any person who by reason of his or her job, function or position in the holding company or any subsidiary or affiliated company, becomes aware of information relating to a Material Event or Fact about the Company, and who has signed the Term of Commitment, may not trade Securities of the Company in the period of 15 (fifteen) days prior to the disclosure or publication, as the case may be, of:

(i) the Company's quarterly information (ITR);

(ii) the Company's annual information (DFP, and IAN); or

(iii) the Company's financial statements;

In the period between the decision of the competent corporate bodies and the notifications given to the market, in relation to any increase or reduction of capital, distribution of dividends, stock bonus, reverse split, issuance of securities and related Notices and Advertisements.

Individual Investment Programs must strictly obey this restriction.

The Authorized Brokers will be instructed by the Company, and shall issue acceptance of such instruction in writing, that they may not carry out transactions of the persons mentioned above in the 15 (fifteen) days prior to the disclosure or publication of the said periodic information or financial statements of the Company.

Prohibition on decision in relation to acquisition or disposal of the Company's own shares

(CVM Instruction 358/02, Article 14)

The Company's Board of Directors may not make any decide to acquire shares in the Company itself as long as information relating to any of the following has not been made public through publication of a Material Announcement:

(i) signature of any agreement or contract for transfer of the stockholding control of the company; or

(ii) grant of an option or mandate for the purpose of transfer of stockholding control of the Company; or

(iii) existence of an intention to carry out an absorption, partial or total split, merger, transformation or stockholding reorganization.

If, after approval of a buyback program, any event takes place within the three descriptions above, the Company shall immediately suspend all transactions in its own shares until the publication of the related Material Announcement.

Concluding rules on indirect and direct trading

The prohibitions and the trading governed by this Manual apply to trading carried out, directly or indirectly, by:

(i) Members of the Board of Directors, Members of the Executive Board, Controlling Stockholders, Members of the Audit Board, Employees and Executives with access to material information and members of the other bodies of the Company that have technical or consultative functions, and also:

(ii) any person who, by reason of their job, function or position in the holding company or any subsidiary or affiliated company, becomes aware of information relating to a material event or fact about the Company, and who has signed the Term of Commitment - even in cases in which the trading carried out by such persons takes place through any of the following as intermediary:

(i) a company under said person's control; or

(ii) third parties with whom such person has maintained a fiduciary contract or contract for administration of a portfolio or shares.

Transactions carried out by investment funds in which the above persons are unit holders shall not be considered to be indirect trading if:

(i) the investment funds are not exclusive; and

(ii) the trading decisions of the manager of the investment fund cannot be influenced by the unit holders.

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20.2 – Other material information

V. OBLIGATION TO INDEMNIFY

The Prohibited Persons and the Related Parties responsible for non-compliance with any provision of this Trading Policy undertake to reimburse the Company and/or other Related Parties in full and without limitation for any losses that the Company and/or other Related Parties may suffer arising directly or indirectly from such non-compliance.

GRENDENE S.A.

POLICY ON TRADING OF THE COMPANY'S SECURITIES

TERM OF ACCEPTANCE AND COMMITMENT

I, [name and description], [function or job], declare that I have become aware of the terms and conditions of the Policy on Trading in Securities issued by Grendene S.A., arising from obedience to CVM Instruction 358/2002, and approved by its Board of Directors on January 28, 2005. I hereby formalize my adherence to the said Policy, and I undertake to comply with all its terms and conditions.

I further declare that I am aware that non-compliance with the provisions of the Trading Policy on Securities issued by the Company is a Serious Violation, for the purposes specified in § 3 of Article 11 of Law 6385/76.

[Place of signature, date]

___________________________

[Name]

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21.1 – Description of the internal rules, regulations or procedures relating to disclosure of information In accordance with CVM Instruction 358/02, we have a policy for disclosure of material events or facts, which was approved by the Company's stockholders in a General Meeting of Stockholders held on August 18, 2004, described in Item 21.2. It governs disclosure of material information and also the exceptions to immediate disclosure of information and the procedures relating to maintenance of secrecy about material information not disclosed to the market.

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21.2 – Describe the policy for publication of a material event or fact, indicating the channel or channels of communication used for its dissemination and the procedures in relation to maintaining secrecy about undisclosed material information The Policy for Disclosure of Material Events or Facts of Grendene S.A. was approved by its stockholders at an Extraordinary General Meeting held on August 18, 2004. Its aim is to establish the rules and procedures to be obeyed in disclosure, by the Company, of material events or facts, as per definition contained in Article 2 of CVM Instruction 358, of January 3, 2002 ('CVM Instruction 358/02'); the exceptions to immediate disclosure of information; and the procedures relating to maintenance of secrecy about material information not disclosed to the market.

Persons subject to the Disclosure Policy

The following persons are subject to the rules and procedures of this Manual: Direct or indirect controlling stockholders, members of the Board of Directors, members of the Executive Board, members of the Audit Board and any bodies with technical or consultative functions, created by the By-laws, or any party who by reason of his or her job, function or position in the Company, or its parent company, or subsidiaries or affiliates, becomes aware of information relating to the material event or fact.

These persons must formally adhere to the Policy on Disclosure of Information, signing a Term of Commitment.

As well as these persons, any person who comes to have information about material events or facts not yet disclosed by the Company (in aggregate, 'Bound Persons') becomes subject to the rules and procedures of this Manual.

Whenever such a person becomes aware of an event or fact that could be considered material for the Company, such person must formally communicate it to the Chief Investor Relations Officer.

Whenever a material event or fact of the type mentioned in the sole sub-paragraph of Article 2 of CVM Instruction 358 occurs that relates to the Company, or its occurrence is imminent, any Bound Person who is aware of it must formally communicate to the Chief Investor Relations Officer so that the said Officer may decide, in accordance with Section 3, on its characterization as a material event or fact and, consequently, on the need for publication of a Material Announcement.

Any Bound Person who holds a position in a statutory body of the Company (Board of Directors, Executive Board, Audit Board, technical or consultative bodies), and also the controlling stockholder, if personally aware of a material event or fact, and if finding omission by the Chief Investor Relations Officer in compliance with his duty of communication and publication, shall only exempt himself from responsibilities if he or she immediately advises the CVM of the material event or fact. For these purposes, before communicating to the CVM, the Bound Person should check with the Chief Investor Relations Officer to see that there has not been a decision by the Board of Directors of the Company not to disclose the material event or fact. If such decision has occurred, the obligation to disclose to the CVM shall exist only if there is an atypical oscillation in the price, quotation or volume of trading of the securities issued by the Company.

Duties and responsibilities in disclosure of a material event or fact

It is the function of the Chief Investor Relations Officer to disclose to and advise the CVM and the stock exchange on which the securities issued by the Company are traded of any material event or fact that occurs or is related to its business, and to make best efforts for its wide and immediate dissemination to the market.

In the event of doubt, it shall be for the Chief Investor Relations Officer to decide on characterization of any given event or fact as material and, for such a purpose, he/she should consult the members of the Board of Directors.

It is a function of the Chief Investor Relations Officer, without prejudice to the other attributions specified in CVM Instruction 358, to arrange for correction, amendment or republication of a material announcement whenever requested to do so by the CVM.

The controlling stockholders, members of the Board of Directors, members of the Executive Board, members of the Audit Board and of any bodies with technical or consultative functions, created by the By-laws, or any person who by virtue of his job, function or position in the Company, or its parent company or any subsidiary or affiliated company, becomes aware of information relating to the material event or fact must immediately advise the CVM of such event or fact, if there is omission by the Chief Investor Relations Officer in compliance with his/her duty of communication and disclosure.

Form of disclosure of a material event or fact

The communication of Relevant Act or Fact to the CVM and to the Stock Exchange where the securities of the Company are traded, it should happen immediately after the deliberation, occurrence or knowledge of it, as the case may be, in a clear, precise and summarize form, showing at least, the information demanded by the Regulation.

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21.2 – Describe the policy for publication of a material event or fact, indicating the channel or channels of communication used for its dissemination and the procedures in relation to maintaining secrecy about undisclosed material information The disclosure of a Relevant Act or Fact shall be disclosed through a public announcement or advertisement published in at least one of the following channels of communication: a) newspapers with large circulation habitually used by the Company; or b) at least 1 (one) news portal with a page on the Internet that makes the information available in its entirety, in a section with public access free of charge, and content identical to that sent by the CVM to the securities exchange on which the securities issued by the Company are admitted for trading.

The disclosure of a Relevant Act or Fact shall be made, whenever it is possible, prior to the beginning or after the closing hours of trading in the Stock Exchange where the securities of the Company are negotiated.

Exception to immediate disclosure of a material event or fact

Material events or facts may, exceptionally, not be disclosed if it is the view of the controlling stockholders or the members of the Board of Directors or of the Executive Board that their disclosure would put legitimate interests of the company at risk. This option may only be exercised by the Company upon decision by the Board of Directors and advice of such decision to the Chief Investor Relations Officer.

In this event, it shall be for the Chief Investor Relations Officer to monitor the quoted price, and prices and volumes of trading in the securities issued by the Company and, if an atypical variation is found in those elements, he/she must immediately disclose the material event or fact that the Company decided previously not to disclose.

Duty to maintain secrecy

It is the duty of the controlling stockholders, members of the Board of Directors, members of the Executive Board, members of the Audit Board and of any bodies with technical or consultative functions created by the By-laws, and of the employees of the Company, to maintain secrecy on information relating to a material event or fact to which they have privileged access by reason of the job or position that they occupy, until its disclosure to the market, and also to make best efforts to arrange for the same to be done by subordinates and third parties with whom they rely on a relationship of trust, and shall be jointly responsible with the latter in the event of non-compliance.

In the case of any contacts with third parties in relation to subjects that might be considered material, the Company shall require that such parties sign a Confidentiality Undertaking.

Grendene S.A. – Reference Form – 2018 Version: 7 (A free translation of the original in Portuguese)

Page 236 of 237

21.3 – Members of management who are responsible for implementation, maintenance, evaluation, monitoring and inspection of the policy on disclosure of information The person responsible for the implementation, maintenance, evaluation and inspection of the Policy on Disclosure of Information is the Chief Executive Officer, Mr. Rudimar Dall’Onder; the Deputy Chief Executive Officer, Mr. Gelson Luis Rostirolla, and; the Chief Investor Relations Officer - Mr. Francisco Olinto Velo Schmitt.

Grendene S.A. – Reference Form – 2018 Version: 7 (A free translation of the original in Portuguese)

Page 237 of 237

21.4 – Other material information There is no other information that is considered to be material.


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