Novo Mercado

Since its IPO, in 2005, Cosan S/A is listed in the differentiated corporate governance segment of the BM&FBOVESPA, known as the Novo Mercado.

Novo Mercado (link) is a listing segment designed for shares issued by companies that voluntarily undertake to abide by corporate governance practices and transparency requirements in additional to those already requested by the Brazilian Law and CVM (Brazilian Securities and Exchange Commission).

In addition to the obligations imposed by current Brazilian law, to be listed on the Novo Mercado segment an issuer must meet all of the following requirements:

  • issue only common shares;
  • grant tag-along rights to all shareholders in the event of a change in shareholder control. The shareholder acquiring control must hold a public tender offer for the shares of other shareholders, offering the same price per share paid to the controllers;
  • maintain free float of at least 25% of the company's total capital stock;
  • adopt offering procedures that favor a broad shareholder base;
  • comply with minimum quarterly disclosure standards;
  • follow stricter disclosure policies with respect to securities transactions made by the issuer's controlling shareholders, board members and officers;
  • submit any existing shareholders' agreements and stock option plans to BM&FBOVESPA;
  • disclose a schedule of corporate events to shareholders;
  • prepare annual financial statements including cash flow statements in English and in accordance with international accounting standards, such as U.S. GAAP or the International Financing Report Accounting Standards (IFRS);
  • adopt exclusively the arbitration rules of BM&FBOVESPA, in which BM&FBOVESPA, the Company, the controlling shareholder, administrators and members of the Fiscal Council, if instated, commit to resolve any dispute or controversy related the listing rules through arbitration;
  • hold public meetings with financial analysts and any other interested parties at least once a year to present information regarding its financial and economic position, projects and prospects; and
  • if a decision to delist from the Novo Mercado is made, the issuer's controlling shareholder must hold a public tender offer for the acquisition of all outstanding shares at a minimum price to be established based on an independent appraisal.

 CORPORATE GOVERNANCE PRACTICES

Cosan S/A is managed by the Board of Directors and the Executive Board. According to the Bylaws of the Company, the members of the Board of Directors are elected by the General Meeting, and Board members are elected by the Board of Directors. Directors are elected for a term of two years and may be reelected. The Board of Directors must be comprised 7-20 effective members. The Board of Cosan S/A should consist of at least three and at most eight members, appointed for a term of two years, reelection being permitted its members must be residents of Brazil. The Company's Directors are responsible for the ordinary administration of the Rumo operations. The commitment to best governance practices is ratified by-laws of the Company.

Investor Relations

Cosan's Investor Relations department is composed of qualified professionals that offer tailored services to investors and analysts, providing transparent, reliable and comprehensive information, considering the importance of maintaining a good relationship with the market. The Company constantly updates its Investor Relations website and invests in other channels for communicating with the market, such as meetings through recognized market organizations like conference calls on quarterly results in two languages, national and international roadshows, one-on-one meetings and participation in events with key financial institutions to meet investors.

DICLOUSURE AND USE OF INFORMATION

CVM Instruction 358 addresses the disclosure and use of information related to material acts and facts of publicly held companies by:

  • establishing the concept of a material fact, including decisions made by the controlling shareholders, resolutions of the general meeting or the company's management, or any other political, administrative, technical, business, economic or financial acts or facts related to the company's business that may influence (i) the price of its publicly traded securities, (ii) the decision of investors to buy, sell or maintain these securities, and (iii) the exercise any of rights associated with these securities;
  • giving examples of acts or facts that are considered material, including, among others, the execution of shareholders' agreements providing for the transfer of control, the entry or withdrawal of partners who maintain any managing, financial, technological or administrative contract or collaboration with the company, mergers or spin-offs involving the company or related companies;
  • requiring the investor relations officer, controlling shareholders, other executive officers and members of the company's Board of Directors, audit committee and other advisory boards to disclose material facts to CVM;
  • requiring simultaneous disclosure of material facts to all markets on which the company's securities are traded;
  • requiring the acquirer of a controlling stake in the company to publish material facts, including its intentions as to whether or not to de-list the company's shares within one year after the acquisition;
  • establishing rules regarding disclosure requirements in the acquisition and sale of a material stake in other companies; and
  • restricting the use of insider information.
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