Risk Factors

As a company listed on the Novo Mercado of the Stock Exchange, Camil has high levels of Corporate Governance and values ​​ethics and transparency in the conduct of its business, as well as full compliance with applicable laws and regulations.
In order to ensure the maintenance of the Company’s ethical principles in line with current legislation, Camil has a Board of Directors (composed of independent members), a Fiscal Council and advisory and supervision committees in the areas of Internal Audit, Ethics, Finance and People and Management, in addition to having an external and independent evaluation of its financial statements by the External Audit, which complements the portfolio of structures that maintain good corporate governance practices.
On January 10, 2019, the Board of Directors approved the Company’s Risk Management Policy, which was updated on May 26, 2020. Its formalization aims to establish and ratify the principles, concepts and guidelines, as well as the roles and responsibilities to be observed in the Risk Management process of Camil Alimentos S / A and its subsidiaries. In addition, this normative instrument is a demonstration of the importance given to Risk Management by the Company, which has been evaluating and managing its risks, so that they are within the limits of appetite and risk tolerance defined by it, minimizing its threats and enhancing its opportunities, applying an integrated risk management approach and aligned with the business strategies and objectives.
The assumptions adopted by the Company for managing its risks are based on the combined application of the principles and guidelines of “COSO ERM 2017 – Integrating with Strategy and Performance Executive Summary” and “ISO 31000: 2018 – Risk Management” as a reference for Risk Management, in order to constitute a conceptual and practical model for corporate risk management.
The commitment to integrity, ethical values, as well as the dissemination of the risk management culture in the Company is the responsibility of all employees, who are also responsible for managing their risks and, based on this premise, the Management structure The company’s Risk Management Committee considers the joint performance of the management and corporate governance bodies, in accordance with the concept of the 3 lines of defense of the “Institute of Internal Auditors – IIA”.
In accordance with our “Reference Form”, we address the main risk groups, which are strategic, financial, operational / systemic and compliance / regulatory, which encompass, in their entirety, the risks observed by Camil.

Investment in securities issued by the Company involves exposure to certain risks and, before making any investment decision in any security of the Company, potential investors should carefully analyze all the information contained in our Reference Form, the Financial Statements of the Company and respective explanatory notes, and the risk factors mentioned below. The Company’s business, financial condition, results of operations, cash flow, liquidity and/or future business may be adversely affected by any of the risk factors described below. It should be noted that the risks exposed here are not exhaustive; for more information, access our Reference Form.

• The Company may not be able to successfully implement its business strategy, which may adversely affect its results and the value of its shares;
• The Company may not be able to maintain the reputation and recognition of its brands or successfully develop new brands;
• The Company may not be able to integrate and capture synergies from acquisitions and partnerships, adversely affecting its growth strategy;
• The Company’s inability to honor its financial obligations, comply with contractual restrictions and obtain additional capital necessary for its future growth may adversely affect its business;
• Public health emergencies, such as outbreaks or pandemics of contagious and infectious diseases, such as the coronavirus (COVID-19), may cause changes in trade and consumption patterns;
• The Company is subject to risks of non-compliance, unethical conduct, illicit activities, fraud and corruption;
• Interruptions in information technology infrastructure and cyberattacks may adversely affect the Company’s operational continuity; • The Company is exposed to risks of interruption or loss of production, storage and/or distribution infrastructure, which may adversely affect it;
• The Company may suffer losses that are not covered or that exceed the compensation limits provided for in the insurance policies contracted;
• The Company may have unfavorable decisions in legal and arbitration proceedings, investigations and administrative procedures. The Company depends on third parties to execute its value chain, and the failure to supply critical materials and services, including transportation, may adversely affect its results and its operational continuity;
• Possible changes in data privacy legislation and regulations, as well as their interpretation, may generate significant costs for the Company and force it to change its business practices;
• Part of the Company’s results depend on the financial situation of its affiliates, controlled companies and subsidiaries, which, if deteriorated, may adversely affect the Company.

The risks described above are those that the Company is aware of and understands that may adversely affect it. In addition, additional risks not currently known, or considered non-material by the Company at this time, may also adversely affect the Company if they materialize. The market price of the securities issued by the Company may decrease due to any of these and / or other risk factors, in which case potential investors may lose a substantial part or even all of their investment in the securities issued of the Company.

Market risks are related to the potential negative impact on the value of the Company’s assets and liabilities, due to adverse changes in market parameters, such as fluctuations in commodity values traded by the Company, as well as in credit, liquidity and interest rates and exchange. In the normal course of its business, the Company is exposed to market risks that are inherent in the activities it performs, as described below:

• Commodity risk;
• Credit risk;
• Liquidity risk;
• Interest Rate risk;
• Exchange risk and;
• Climatic risk.

These risks are described quantitatively and qualitatively in our Reference Form.

The influence exerted by the Federal Government on the economy and the occurrence of political, economic and social events, may adversely affect the Brazilian economy, its business and the market value of Brazilian securities, including its shares. The Company defines the factors below as the main macroeconomic risks to which it is exposed and which may adversely and materially affect it.

• Political and economic instability may adversely affect the Company’s business, operating results and share price;
• Possible interventions by the Brazilian government in the economy, through changes in economic, fiscal, monetary and tax policies and regulations, may adversely affect the Company’s business;
• Changes in Brazilian tax legislation or conflicts in its interpretation may adversely impact the Company, increasing its tax burden;
• Lack of or delays in obtaining and/or renewing licenses, permits and other legal operating authorizations may impair the Company’s regular operation;
• Possible changes in data privacy legislation and regulations, as well as their interpretation, may generate significant costs for the Company and force it to change its business practices;
• Environmental, food and health standards, and may adversely affect them in the event of non-compliance; • The Company is subject to macroeconomic and political risks related to the countries where it operates and/or to which it exports, such as:
• Increases in trade barriers for the import and export of food products, such as increased taxes and import tariffs on its products, government subsidies and prohibitions or imposition of restrictions on the export of its products to certain markets;
• Changes in the understanding or text of the legislation and regulations applicable to the markets in which it operates, including those of a tax, labor, environmental and health surveillance nature, or inconsistencies between the legislation and regulations of the different markets in which it operates;
• Interference by local governments in economic policies, especially in fiscal and tax regimes;
• Political, economic and exchange rate instability and devaluation of local currencies;
• Liquidity in the capital, financial and loan markets;
• Strikes at ports, customs, revenue and federal police and other interruptions in the transportation of its products;
• Natural disasters, wars/armed conflicts, embargoes and/or acts of terrorism.

The macroeconomic risk factors listed above are not exhaustive, for more information access our Reference Form.