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Information Disclosure Policy
Stock Trading Policy
Related-Party Transactions Policy

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1. Objective

1.1. To determine the procedures to be followed by the companies METALURGICA GERDAU S.A. and GERDAU S.A. ("Companies") when executing contracts with Related Parties.

2. Scope

2.1. This Normative Document applies to all Gerdau Macroprocesses, Business Operations and Companies.

3. Definitions

3.1. Related Parties: (i) the direct or indirect subsidiaries, parent companies or associated companies of the Companies; (ii) the managers and direct and indirect controlling shareholders of the Companies, as well as their relatives to the third degree; and (iii) the companies that are controlled, associated and/or are administrated by the managers and/or the controlling shareholders of the Companies.

3.2. The terms "transaction", "transactions", "contract", "execution of contracts" and "contracts" are understood as operations through which the Companies, for example, buy, sell, finance, extend loans and take out loans, render and receive services, or any in any other way enter into an obligation with a Related Party.

4. Guidelines

4.1. All transactions with Related Parties must be documented and reported to the Accounting Information Management Department, with a description of the following information: (i) subject matter of the transaction; (ii) term; (iii) value; (iv) conditions for rescission and termination; (v) any influence the contract has on the management or execution of business at the Companies; and (vi) information on similar operations in the market in order to identify if the operation is being executed at conditions equal to those of third parties in terms of price, terms and guarantees.

4.2. All transactions with Related Parties must be reported by the Companies on their financial statements.

4.3. All transactions with Related Parties that constitute a material fact or event must be disclosed to the market in accordance with CVM Instruction 358 of January 3, 2002.

5. Responsibilities

5.1. Board of Directors and Gerdau Executive Committee - CEG

5.1.1. The board of directors and GEC must strive to ensure that any transactions with Related Parties are contracted at conditions that are strictly commutative or for adequate compensatory payment.

5.2. Investor Relations Officer

5.2.1. Must promote the broad disclosure to the market of contracts between the Company and its Related Parties whenever the execution of the contract constitutes a material fact or event, in accordance with the applicable regulations, or when disclosing the financial statements.

5.3. Accounting Information Management Department

5.3.1. Include in the notes to the Quarterly Information (ITR) a note on the transactions with related parties containing the information provided for in the accounting standards applicable to the Annual Information (DFP).

6. Miscellaneous

6.1.1. Any cases of omissions in and exceptions and adjustments to this Policy must be submitted for approval by the Process Owner of the Legal Macroprocess and validated by the GEC.

6.1.2. This Policy was approved in a meeting of the Board of Directors of the Companies held on May, 02, 2012 and shall come into force immediately.

Risk Management Policy
1. Objective

1.1. To establish the risk management guidelines and responsibilities of Gerdau S.A., especially with regard to identifying and analyzing any risks that could affect the company, as well as establishing controls and procedures for monitoring risks in order to prevent or minimize their impacts.

2. Scope

2.1. This Normative Document applies to all Gerdau Macroprocesses, Business Operations and Companies.

3. Definitions

3.1. Risks are uncertain factors or events with the potential to cause negative impacts that make fulfilling the objectives of the Company difficult or impossible.

3.2. Business risks are those associated with the company's strategy (political and social environment, market, competitors, mergers and acquisitions, availability of raw materials), its finances (economic environment, cash generation, debt, use and raising of financial resources, capital markets, currency variation), its compliance (observance of laws and regulations), its image and reputation and its operations (technology, management model, corporate culture, training and succession of human resources).

3.3. Operational risks are those arising from the inadequacy of or fault in internal processes, people or technological environments that make it difficult or impossible to fulfill the company's objectives. These risks are associated with both the industrial processes and the management of administrative areas, such as marketing and sales, raw materials, logistics, workplace health and safety, environment, information technology, people management and trade union relations.

3.4. Risk Committee - Committee whose composition is determined by the Board of Directors hereinafter the Committe.

3.5. Gerdau Business System - hereinafter GBS

3.6. Ethics Helpline - instrument for reporting ethical misconduct and clarifying doubts related to the issue. All persons reporting misconduct are guaranteed anonymity, confidential treatment of the incident and protection from reprisals.

4. Guidelines

4.1. The company identifies and manages business and operational risks to ensure that all targets established in its strategic planning are met.

4.2. The risks are identified and assessed based on the probability of their occurrence and their potential impact on the business, including on the company's image. Each decision takes into account the associated benefits, negative aspects and risks by measuring the relationship between impact and mitigation.

4.3. By delegation of the GEC, the Committee accompanies the relevant issues listed below:

4.3.1. Status of the evaluations of the controls arising from the Sarbanes-Oxley Act;

4.3.2. Main audit works concerning the operational risks;

4.3.3. Statistics concerning ethics and relevant Compliance issues;

4.3.4. Main incidents registered by the Ethics Channel, respecting anonymity and confidentiality;2

4.3.5. Environmental risks, such as the destination of waste products and any potentially impacted areas;

4.3.6. Risks to corporate safety, such as the risk of asset losses to the company and the physical safety of its Employees at Gerdau's various operating sites;

4.3.7. Security information risks;

4.3.8. Legal contingencies.

4.4. The Committee evaluates the adequacy of the risk controls associated with each macroprocess and/or operation by evaluating the indicators generated by the GBS. In addition, every two years or when requested, each macroprocess and/or operation must present to the Committee the respective risk management practices and a report of its activities in this area during the last year.

4.5. The Committee must provide an account of its activities to the Board of Directors on a annual basis.

4.6. The annual audit plan is prepared based on, among other things, the results of the previous audit works, the results of the Sarbanes-Oxley Act compliance tests, the compilation of interviews with Senior Management conducted very three years, and the information received by the managers of the processes. The plan must also include the degree of risk exposure of all the company's processes/units, which is used to determine the audit works for the next year.

4.7. In addition to the annual plan, the Auditor also conducts works on request by the Senior Management and those prompted by the Ethics Helpline.

4.8. The Committee's analyses should serve as the basis for preparing the information to be provided in compliance with the legal and/or regulatory requirements.

4.9. The external disclosure of information involves the risks listed below:

4.9.1. Business Risks - General

4.9.1.1. Crisis/ economic recession

4.9.1.2. Cyclical demands

4.9.2. Political Risks

4.9.2.1. Government policies

4.9.3. Financial Risks

4.9.3.1. Inflation

4.9.3.2. Reduction in credit to clients

4.9.3.3. Interest rates

4.9.3.4. Credit risk

4.9.3.5. Currency variation

4.9.3.6. Capital management (ratio between financial debt and own capital)

4.9.3.7. Liquidity risk

4.9.3.8. Capital markets could be affected by political, economic and social events

4.9.3.9. Cost of capital

4.9.4. Strategy Risks

4.9.4.1. Raw materials - scrap, iron ore and coal

4.9.4.2. Mergers and acquisitions - integration of new companies

4.9.4.3. Energy

4.9.4.4. Market and competitors

4.9.5. Compliance Risks

4.9.6. Reputational risks

4.9.7. Operational risks

4.9.7.1. Equipment faults

4.9.8. Human Resources Risks

4.9.8.1. Termination costs

4.9.8.2. Preparation of people and succession

4.9.8.3. Organizational culture and communication

2Reports of misconduct must be made through the Ethics Channel or, at the discretion of the person reporting, directly to the Audit Board.

5. Responsibilities

5.1. Board of Directors

5.1.1. Determine the company's risk profile through strategic guidelines and general orientation to the CEG, and ensure the effectiveness of the risk control system.

5.2. Gerdau Executive Committee (CEG).

5.2.1. Ensure the existence of an adequate structure and supervise the management of risks; identify, evaluate and mitigate business risks when executing the strategic planning.

5.3. Risk Committee

5.3.1. By delegation of the GEC, monitor the risks and contingencies listed in item 4.3 above and the risks managed at the level of each macroprocess and/or operation in order to verify the effectiveness of the existing controls, and approve the annual audit plan.

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5.4. Internal Auditor

5.4.1. Identify the operational risks and respective internal controls of the processes. On an annual basis, conduct the risk assessment for the purpose of preparing the Audit Plan for the subsequent fiscal year.

6. Miscellaneous

6.1. Any cases of omissions, exceptions and adjustments in the Risk Management Policy must be submitted for approval by the Process Owner of the Ethics and Compliance Macroprocess and validated by the Board of Directors.

6.2. This Policy was approved in a meeting of the Board of Directors and shall come into force immediately.

Compliance Policy

 

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