Natura 2016 AR Engl PDF

Financial Statements
Natura Cosméticos S.A.

For the year ended December 31, 2016
Individual and Consolidated Financial statements
December 31, 2016
Contents
Independent auditor´s report on Individual and Consolidated Financial statements ............................. 1
Reviewed Individual and Consolidated Financial statements
Balance sheet.......................................................................................................................................... 7
Statements of income ............................................................................................................................. 8
Statements of comprehensive income .................................................................................................... 9
Statements of changes in shareholders' equity ....................................................................................... 10
Statements of cash flows ........................................................................................................................ 11
Statements of value added...................................................................................................................... 12
Notes to financial statements ................................................................................................................. 13
A free translation from Portuguese into English of Independent Auditor’s Report on Individual and Consolidated Financial
Statements prepared in Brazilian currency in accordance with accounting practices adopted in Brazil and International
Financial Reporting Standards (IFRS), issued by International Accounting Standards Board – IASB
Independent auditor’s report on individual and consolidated financial statements
To the
Shareholders, Board of Directors and Officers
São Paulo – SP
Opinion
We have audited the individual and consolidated financial statements of Natura

Cosméticos S.A. (“Company”), identified as Company and Consolidated, respectively,
which comprise the balance sheet as at December 31, 2016 and the related statements of
income, of comprehensive income, of changes in equity, and cash flows for the year then
ended, and notes to the financial statements, including a summary of significant
accounting practices.
In our opinion, the accompanying financial statements referred to above present fairly, in
all material respects, the individual and consolidated financial position of the Company
as at December 31, 2016, its individual and consolidated financial performance and its
individual and consolidated cash flows for the year then ended, in accordance with
accounting practices adopted in Brazil and international financial reporting standards
(IFRS) issued by the International Accounting Standards Board (IASB).
Basis for opinion
We conducted our audit in accordance with Brazilian and International Standards on

Auditing. Our responsibilities, under those standards, are further described in the
“Auditor’s responsibilities for the audit of individual and consolidated financial
statements" section of our report. We are independent of the Company and its subsidiaries
and comply with the relevant ethical principles set forth in the Code of Professional Ethics
for Accountants, the professional standards issued by the Brazil’s National Association
of State Boards of Accountancy (CFC) and we have fulfilled our other ethical
responsibilities in accordance with these requirements. We believe that the audit evidence
we have obtained is sufficient and appropriate to support our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most
significance in our audit of the financial statements of the current period These matters
were selected in the context of our audit of the individual and consolidated financial
statement as a whole, and in forming our opinion thereon and, accordingly, we do not
express a separate opinion on these matters.
1
Impairment of intangible assets – Goodwill
In accordance with accounting practices adopted in Brazil and International Financial

Reporting Standards, the Company is required to annually test for impairment the
amounts recorded as indefinite-lived intangible assets, such as goodwill. As at December
31, 2016, the consolidated balance referring to goodwill amounted to R$ 177,666
thousand and is disclosed in Notes 2 and 14 of the individual and consolidated financial
statements.
This was considered a key audit matter since the process for measuring the recoverability
of these intangible assets is complex, involves a high degree of subjectivity and is based
on various assumptions, such as: determining the cash generation unit, discount rate used
for cash flow purposes, growth percentages in the markets and profitability of its business
for various future years. These assumptions may be significantly affected by future
market conditions or economic scenarios, which may not yet be precisely estimated.
Our audit procedures included, among others, the involvement of valuation experts to
assist us with assessing the assumptions and methodologies used by the Company,
particularly those with respect to forecasted future sales, growth rate, discount rate used
for cash flows purposes and profit margin for the cash generation unit. We also focused
on the adequacy of the Company’s disclosures about the assumptions used for calculating
the recoverability of referred to intangible asset.
Revenue recognition
The Company’s revenue recognition process involves a high number of controls in order
to ensure that all products billed have been delivered to their respective buyers in the
appropriate accounting period and that, as such, revenue was recognized on the accrual
basis, as established by accounting practices. Taking into consideration sales volume and
dispersion, and the regionalization of the Company’s business, the revenue recognition
process involves a high degree of dependence upon the proper operation of internal
controls.
This item was considered a key audit matter since the control that ensures correct revenue
calculation and recognition involves estimates relating to determination of average sales
delivery deadlines in the domestic market for each region of the country. Additionally,
this process is complex and requires the attention of management to the specific
characteristics of each geographic region in which the Company operates. Any
deficiencies in the control that involves determining the average delivery deadline could
have an impact on appropriate revenue recognition and, as such, on the individual and
consolidated financial statements.
2
Our audit procedures aimed at mitigating the risk of material errors in revenue recognition
included, among others:
 Obtaining an understanding on and testing internal controls over estimated

average delivery deadlines per geographic region, as well as identification of sales
that were not delivered and, as such, do not meet the recognition criteria;
 Recalculating amounts referring to adjustments made by the Company to reverse
sales revenue billed and not delivered in the appropriate accounting period;
 Documentary tests on a sample of invoices and proofs of delivery in order to
corroborate the appropriateness of the report on invoices that were issued and
not delivered in the period. This report serves as a basis for calculating the
reversal of revenue from sales billed and not delivered.
Additionally, we reviewed the adequacy of the Company’s disclosures on this matter,

included in Notes 2 and 22 of the individual and consolidated financial statements.
Legal discussions and agreements executed involving tax obligations
In accordance with legal provisions, the Company must pay State VAT (ICMS) on
products sold so as to offset taxes that will not be paid in the other phases of the sale
chain. This taxation method is called Substitute Taxpayer Regime (Substituição
Tributária) and establishes the utilization of the Value Added Margin ("MVA”) to
determine the basis of calculation of ICMS. As not all Brazilian states regulate this rule
in their legislation, the Company for various Brazilian states have entered into special tax
regimes to determine specific accessory obligations and the calculation basis of the ICMS
under the Substitute Taxpayer Regime to be used in each sales transaction performed by
the Company.
This item was considered a key audit matter due to the volume of the amounts involved
and the diversity of these arrangements.
Our audit procedures aimed at mitigating the risk of material errors in payment of tax
obligations included, among others:
 Involvement of tax professionals to assist us with reviewing a sample of the

special tax regimes entered into by the Company and various Brazilian states, as
well as respective impacts on the individual and consolidated financial statements;
 Obtaining an understanding on and testing internal controls over review and
amendments of a sample of the special tax regimes entered into with the Brazilian
states involving the review of a sample of calculation basis of calculation basis of
ICMS under the Substitute Taxpayer Regime and applicable rates to the
operations;
 Physical inspection of supporting documentation for a sample of transactions that
generate ICMS under the Substitute Taxpayer Regime, in addition to recalculating
the MVA rates applied for payment of the tax under analysis.
Additionally, we reviewed the adequacy of the Company’s disclosures on this matter,

included in Note 17 of the individual and consolidated financial statements.
3
Other matters
Statements of value added
The individual and consolidated statements of value added for the year ended December
31, 2016, prepared under Company management responsibility, which presentation is
required as supplementary information under IFRS, have been subject to audit procedures
in conjunction with the audit of the Company’s financial statements. In order to form our
opinion, we analyzed whether these statements are reconciled to the financial statements
and accounting records, as applicable, and whether their form and content meet the
criteria defined in Accounting Pronouncement CPC 09 – Statements of Value Added. In
our opinion, these statements of value added were fairly prepared, in all material respects,
in accordance with the criteria defined in referred to Accounting Pronouncement and are
consistent with the overall individual and consolidated financial statements.
Other information accompanying the individual and consolidated financial

statements and independent auditor’s report
Company management is responsible for other information included in the Management

Report.
Our opinion on the individual and consolidated financial statements does not encompass
the Management Report; accordingly, we do not express any form of audit conclusion
thereon.
In connection with the individual and consolidated financial statements, we are

responsible for reading the Management Report and, in so doing, considering whether
such report presents significant inconsistency with the financial statements or with our
knowledge obtained in the audit, or otherwise seems to present material misstatements.
If, based on the work performed, we conclude that the Management Report presents
material misstatements, we are required to communicate such fact. We have nothing to
report in this regard.
Responsibilities of management and of those charged with governance for the

individual and consolidated financial statements
Management is responsible for the preparation and fair presentation of these individual
and consolidated financial statements in accordance with accounting practices adopted in
Brazil and international financial reporting standards issued by the International
Accounting Standards Board (IASB), and for such internal control as Management
determines is necessary to enable the preparation of financial statements that are free from
material misstatement, whether due to fraud or error.
4
In preparing the individual and consolidated financial statements, management is
responsible for assessing the Company's ability to continue as a going concern, disclosing,
as applicable, matters related to going concern and using the going concern basis of
accounting unless management either intends to liquidate the Company and its
subsidiaries or to cease operations, or has no other realistic alternative but to do so.
Those charged with governance of Company and subsidiaries are responsible for
overseeing the financial reporting process.
Auditor’s responsibilities for the audit of individual and consolidated financial

statements
Our objectives are to obtain reasonable assurance about whether the individual and
consolidated financial statements as a whole are free from material misstatement, whether
due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with Brazilian and International standards on auditing will always detect
material misstatements when they exist. Misstatements can arise from fraud or error and
are considered material if they could, individually or as a whole, reasonably be expected
to influence the economic decisions of users made on the basis of these financial
statements.
As part of the audit conducted in accordance with Brazilian and International standards
on auditing, we exercise professional judgment and maintain professional skepticism
throughout the audit. We also:
 Identify and assess risks of material misstatements of the individual and

consolidated financial statements, whether due to fraud or error, design and
perform audit procedures responsive to those risks, and obtain audit evidence that
is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than one resulting
from error, as fraud may involve override of internal controls, collusion, forgery,
intentional omissions or misrepresentations.
 Obtain an understanding of internal control relevant to the audit in order to design

audit procedures that are appropriate in the circumstances, but not for the purpose
of expressing an opinion on the effectiveness of internal control of the Company
and its subsidiaries.
 Evaluate the appropriateness of accounting policies used and the reasonableness

of accounting estimates and related disclosures made by management.
 Conclude on the appropriateness of management's use of the going concern basis

of accounting and, based on the audit evidence obtained, whether a material
uncertainty exists related to events or conditions that may cast substantial doubt
as to the ability of the Company and its subsidiaries to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to draw
attention in our auditor’s report to the related disclosures in the individual and
5
consolidated financial statements or, if such disclosures are inadequate, to modify
our opinion. Our conclusions are based on the audit evidence obtained up to the
date of our auditor’s report. However, future events or conditions may cause the
Company and its subsidiaries to cease to continue as a going concern.
 Evaluate the overall presentation, structure and content of the financial statements,
including the disclosures, and whether the individual and consolidated financial
statements represent the corresponding transactions and events in a manner that
achieves fair presentation.
 Obtain sufficient appropriate audit evidence regarding the financial information

of the entities or business activities within the group to express an opinion on the
consolidated financial statements. We are responsible for the direction,
supervision and performance of the group audit. We remain solely responsible for
our audit opinion.
We communicate with those charged with governance regarding, among other matters,
the planned scope and timing of the audit and significant audit findings, including any
significant deficiencies in internal control that we identify during our audit.
We also provided those charged with governance with a statement that we have complied
with relevant ethical requirements, including those regarding independence, and
communicated with them all relationships and other matters that may reasonably be
thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we are required to
determine those matters that were of most significance in the audit of the financial
statements of the current period and are therefore the key audit matters. We are required
to describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that
a matter should not be communicated in our report because the adverse consequences of
doing so would reasonably be expected to outweigh the public interest benefits of such
communication.
São Paulo, February 22, 2017.
ERNST & YOUNG

Auditores Independentes S.S.
CRC-2SP015199/O-6
Drayton Teixeira de Melo

Accountant CRC-1SP236947/O-3
6
NATURA COSMÉTICOS S.A.
'BALANCE SHEETS AS OF DECEMBER 31, 2016 AND DECEMBER 31, 2015

(In thousands of Brazilian reais - R$)
Company Consolidated Company Consolidated

ASSETS Note 2016 2015 2016 2015 LIABILITIES AND SHAREHOLDERS' EQUITY Note 2016 2015 2016 2015
CURRENT ASSETS CURRENT LIABILITIES

Cash and cash equivalents 5 61,431 53,127 1,091,470 1,591,843 Borrowings and financing 15 1,437,203 1,624,686 1,764,488 2,161,383
Short-term investments 6 1,169,909 1,808,328 1,207,459 1,191,836 Trade and other payables 16 268,080 230,100 814,939 802,887
Trade receivables 7 828,221 677,117 1,051,901 909,013 Suppliers - related parties 28.1. 242,083 149,393 - -
Inventories 8 203,358 208,113 835,922 963,675 Payroll, profit sharing and related taxes 103,250 95,580 208,114 201,200
Recoverable taxes 9 71,845 124,953 329,409 320,392 Taxes payable 17 687,223 629,374 1,075,431 1,047,961
Related parties 28.1. 7,972 9,026 - - Dividends and interest on capital payables 20.b) 79,739 - 79,739 -
Derivatives 4.2. - 697,761 - 734,497 Provision for acquisition of non-controlling interest 19.a) - 190,658 - 190,658
Other receivables 12 228,629 202,780 286,739 307,450 Derivatives 4.2. 69,864 - 73,502 -
Total current assets 2,571,365 3,781,205 4,802,900 6,018,706 Other payables 94,298 94,230 161,686 168,831
Total current liabilities 2,981,740 3,014,021 4,177,899 4,572,920
NON CURRENT ASSETS NON CURRENT LIABILITIES

Recoverable taxes 9 32,252 31,055 280,634 289,437 Borrowings and financing 15 2,025,484 2,922,983 2,625,683 3,374,497
Deferred income tax and social contribution 10.a) 278,300 48,525 492,996 212,608 Taxes payable 17 180,490 78,501 237,513 87,744
Escrow deposits 11 249,889 238,498 303,074 287,795 Deferred income tax and social contribution 10.a) - - 23,775 34,073
Other noncurrent assets 12 15,760 7,500 23,033 17,604 Provision for loss on investments in subsidiaries 13 - 21,519 - -
Investments 13 2,104,217 2,001,232 - - Provision for tax, civil and labor risks 18 64,561 51,035 93,624 77,858
Property, plant and equipment 14 576,494 558,105 1,734,688 1,752,350 Other non current liabilities 19.b) 88,166 50,366 266,700 170,122
Intangible assets 14 508,549 500,491 784,254 816,481 Total non current liabilities 2,358,701 3,124,404 3,247,295 3,744,294
Total noncurrent assets 3,765,461 3,385,406 3,618,679 3,376,275
SHAREHOLDERS' EQUITY
Capital 20.a) 427,073 427,073 427,073 427,073
Treasury shares 20.c) (37,149) (37,851) (37,149) (37,851)
Capital reserves 142,786 134,706 142,786 134,706
Earnings reserves 666,815 488,796 666,815 488,796
Proposed additional dividend 20.b) 29,670 123,133 29,670 123,133
Reserve for acquisition of non-controlling interest 20.b) - (79,324) - (79,324)
Goodwill/ Bargain Purchase on capital transactions 20.b) (92,066) (65,159) (92,066) (65,159)
Adjustment of equity evaluation (140,744) 36,812 (140,744) 36,812
Total equity attributable to owners of the Company 996,385 1,028,186 996,385 1,028,186
Non controlling interests - - - 49,581

Total shareholders' equity 996,385 1,028,186 996,385 1,077,767
TOTAL ASSETS 6,336,826 7,166,611 8,421,579 9,394,981 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 6,336,826 7,166,611 8,421,579 9,394,981
7
STATEMENTS OF INCOME
AS OF DECEMBER 31,2016 AND DECEMBER 31, 2015
(In thousands of Brazilian reais - R$, except earnings per share)
Note Company Consolidated

2016 2015 2016 2015
NET REVENUE 22 5,616,985 5,929,000 7,912,664 7,899,002

Cost of sales 23 (2,188,578) (2,294,896) (2,446,959) (2,415,990)
GROSS PROFIT 3,428,407 3,634,104 5,465,705 5,483,012
OPERATING (EXPENSES) INCOME

Selling, Marketing and Logistics expenses 23 (2,143,235) (2,081,047) (3,110,169) (3,020,500)
Administrative, P&D, IT and Project Expenses 23 (673,343) (732,241) (1,327,093) (1,271,533)
Equity in subsidiaries 13 216,182 235,603 - -
Other operating (expenses) income, net 26 (9,285) 6,594 54,425 65,790
INCOME FROM OPERATIONS BEFORE FINANCIAL INCOME (EXPENSES) 818,726 1,063,013 1,082,868 1,256,769
Financial income 25 952,447 1,692,298 1,073,288 1,927,228

Financial expenses 25 (1,458,877) (2,065,692) (1,729,297) (2,308,627)
INCOME BEFORE INCOME TAX AND

SOCIAL CONTRIBUTION 312,296 689,619 426,859 875,370
Income tax and social contribution 10.b) (15,597) (176,106) (118,621) (352,638)
NET INCOME 296,699 513,513 308,238 522,732
ATTRIBUTABLE TO
Owners of the Company 296,699 513,513 296,699 513,513
Non controlling - - 11,539 9,219
296,699 513,513 308,238 522,732
EARNINGS PER SHARE - R$

Basic 27.1. 0.6895 1.1934 0.6895 1.1934
Diluted 27.2. 0.6875 1.1928 0.6875 1.1928
8
STATEMENTS OF COMPREHENSIVE INCOME

Note Company Consolidated

2016 2015 2016 2015
NET INCOME 296,699 513,513 308,238 522,732

Other comprehensive income to be reclassified to profit or loss in subsequent periods:
Gain (losses) from translation of financial statements of foreign subsidiaries 13 (160,720) 56,433 (146,342) 45,178
Ganho (perda) em operações de hedge de fluxo de caixa 4.2 (2,123) 1,383 (2,346) 3,390
Effect of tax in gain (losses) of cash flow hedge 10 722 (470) 798 (1,153)
Equity in investees of gain (losses) of cash flow hedge 4.2 (223) 2,007 - -
Effect of tax in equity in investees of gain (losses) of cash flow hedge 10 76 (682) - -
Other comprehensive income not reclassified to profit or loss in subsequent periods:

Gain (losses) Acturial 19 (23,863) 2,352 (15,288) (446)
Equity in investees of gain (losses) Acturial 19 8,575 (2,798) - -
Other comprehensive losses (Not tax) 119,143 571,738 145,060 569,701
ATTRIBUTABLE TO
Owners of the Company 119,143 571,738 119,143 571,738
Non controlling - - 25,917 (2,037)
119,143 571,738 145,060 569,701
9
(A free translation from Portuguese into English of Individual Financial Information prepared in Brazilian currency in accordance with accounting
practices adopted in Brazil, and of Consolidated Financial Information prepared in Brazilian currency in accordance with International Financial
Reporting Standards (IFRS), issued by International Accounting Standards Board – IASB and accounting practices adopted in Brazil)
STATEMENTS OF CHANGES IN SHAREHOLDERS` EQUITY

Goodwill/ Bargain
Adjustment of equity
Capital reserves Purchase on capital
evaluation
transactions
Tax Earning reserves Equity

incentive reserve Additional Proposed Reserve for Income from Other attributable to Non-controlling Total
acquisition of non-
Treasury Share Investments paid -in Tax Earnings Retained additional controlling operations of comprehensive owners of the interest in subsidiaries Shareholders
Note Capital shares premium grants Capital Legal Incentives retention earnings dividend interest non - controlling income company equity equity
BALANCES AS OF DECEMBER 31, 2014 427,073 (37,851) 78,231 17,378 41,669 18,650 20,957 295,135 - 449,273 (145,465) (19,937) (21,413) 1,123,700 24,979 1,148,679
- - - - - - - - - - - 0 - - - -
Net income - - - - - - - - 513,513 - - - - 513,513 9,219 522,732
Other comprehensive income - - - - - - - - - - - - 58,225 58,225 (11,256) 46,969
Total comprehensive income - - - - - - - - 513,513 - - - 58,225 571,738 (2,037) 569,701
Changes in stock option plans of actions:
(Reversal) grant of stock options plans of actions and restricted stock 24.1 - - - - (2,572) - - - - - - - - (2,572) - (2,572)
Effects of changes from the the company on the fair value of net assets acquired by Emeis Holding Pty Ltd. 13 - - - - - - - - - - - 8,651 - 8,651 (8,651) -
Effects of changes from participation on subsidiaries - - - - - - - - - - - (53,873) - (53,873) - (53,873)
Realization of reserve for acquisition of non controlling interest for purchase shares of subsidiaries abroad - - - - - - - - - - 66,141 - - 66,141 - 66,141
Effects from the participation on non-controlling on the shareholders`equity subsidiaries - - - - - - - - - - - - - - 35,290 35,290
Dividends and interest on shareholders' equity for the period 2014 approved at the AGM of April 14, 2015 20.b) - - - - - - - - - (449,273) - - - (449,273) - (449,273)
Dividends declared and not distributed 20.b) - - - - - - - - (105,733) 105,733 - - - - - -
Interest on equity declared and not distributed 20.b) - - - - - - - - (17,400) 17,400 - - - - - -
Reserve for earnings retention 20.b) - - - - - - - 154,054 (154,054) - - - - - - -
Antecipation of dividends and interest on interest capital 20.b) - - - - - - - - (236,326) - - - - (236,326) - (236,326)
BALANCES AS OF DECEMBER 31, 2015 427,073 (37,851) 78,231 17,378 39,097 18,650 20,957 449,189 - 123,133 (79,324) (65,159) 36,812 1,028,186 49,581 1,077,767
- - - - - - - - - - - 0 - - - -
BALANCES AS OF DECEMBER 31, 2015 427,073 (37,851) 78,231 17,378 39,097 18,650 20,957 449,189 - 123,133 (79,324) (65,159) 36,812 1,028,186 49,581 1,077,767
- - - - - - - - - - - 0 - - - -
Net income - - - - - - - - 296,699 - - - - 296,699 11,539 308,238
Other comprehensive income - - - - - - - - - - - - (177,556) (177,556) 14,378 (163,178)
Total comprehensive income - - - - - - - - 296,699 - - - (177,556) 119,143 25,917 145,060
Changes in stock option plans of actions and restricted stock:
Grant of stock options and restricted stock 24.1. - - - - 8,782 - - - - - - - - 8,782 - 8,782
Exercise of restricted stock - 702 (308) - (394) - - - - - - - - - - -
Effects of changes from the the company on the fair value of net assets acquired by Emeis Holding Pty Ltd. 13 - - - - - - - - - - - 11,672 - 11,672 (11,672) -
Effects of changes from participation on subsidiaries - - - - - - - - - - - (207,983) - (207,983) - (207,983)
Realization of reserve for acquisition of non controlling interest for purchase shares of subsidiaries abroad 19.a) - - - - - - - - - - 79,324 169,404 - 248,728 - 248,728
Effects from the participation on non-controlling on the shareholders`equity subsidiaries - - - - - - - - - - - - - - (63,826) (63,826)
Dividends and interest on shareholders' equity for the period 2015 approved at the AGM of April 15, 2016 20.b) - - - - - - - - - (123,133) - - - (123,133) - (123,133)
Dividends declared and not distributed (exceeding the minimum required) 20.b) - - - - - - - - (24,070) 24,070 - - - - - -
Interest on equity declared and not distributed (exceeding the minimum required) 20.b) - - - - - - - - (5,600) 5,600 - - - - - -
Dividends declared and not distributed (minimum required) 20.b) - - - - - - - - (27,206) - - - - (27,206) - (27,206)
Interest on equity declared and not distributed (minimum required) 20.b) - - - - - - - - (61,804) - - - - (61,804) - (61,804)
Reserve for earnings retention 20.b) - - - - - - - 178,019 (178,019) - - - - - - -
BALANCES AS OF DECEMBER 31, 2016 427,073 (37,149) 77,923 17,378 47,485 18,650 20,957 627,208 - 29,670 - (92,066) (140,744) 996,385 - 996,385
- -
10
STATEMENTS OF CASH FLOWS

AS OF DECEMBER 31,2016 AND DECEMBER 31,2015
Company Consolidated
Note 2016 2015 2016 2015
CASH FLOW FROM OPERATING ACTIVITIES

Net income 296,699 513,513 308,238 522,732
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 14 100,896 86,392 260,771 239,197
Reversal for losses on transactions with derivative contracts " swap " and "forward " 637,960 (685,877) 681,949 (737,956)
Provision for tax, civil and labor contingencies 18 15,687 5,574 16,964 15,020
Monetary restatement of escrow deposits (14,344) (16,516) (16,799) (21,194)
Income tax and social contribution 10.b) 15,597 176,106 118,621 352,638
Loss on sale and disposal of fixed and intangible assets 851 (17,959) (3,418) (18,538)
Equity income 13 (216,182) (235,603) - -
Interest and exchange variation on loans and financing (170,831) 1,095,978 (172,312) 1,199,217
Exchange variation on other assets and liabilities 661 (5,034) (59,892) (14,096)
Provison (reversal) for losses on property 316 (217) 316 6,323
Provision (reversal) related to the grant of options to purchase shares 8,203 (4,325) 8,782 (2,572)
Net provision for doubtful accounts of reversal 7 18,972 8,262 19,259 6,416
Net Provision (reversal ) for losses on inventories 8 (4,925) (2,452) 31,378 14,269
Provision of health care plan and carbon credit 19.b) 4,558 5,403 4,558 6,846
Net income attributable to non-controlling - - (11,539) (9,219)
Provision for acquisition of non-controlling 19.a) 58,071 111,334 58,071 111,334
752,189 1,034,579 1,244,947 1,670,417
(INCREASE) DECREASE IN ASSETS

Trade receivables (170,076) 5,178 (180,846) (67,942)
Inventories 9,680 (3,516) 96,375 (87,967)
Recoverable taxes 51,911 (62,391) (214) (186,794)
Other receivables (33,056) 21,346 15,285 (13,082)
Subtotal (141,541) (39,383) (69,400) (355,785)
INCREASE (DECREASE) IN LIABILITIES

Domestic and foreign suppliers 39,016 (5,019) 12,052 207,918
Payroll, profit sharing and related taxes, net 7,670 (6,048) 6,914 (9,315)
Taxes payable 15,282 44,600 (100,896) (5,064)
Participation of non controlling shareholders - (113,302) - 89,332
Other payables 103,780 (8,957) 5,556 (12,925)
Subtotal 165,748 (88,726) (76,374) 269,946
CASH GENERATED BY OPERATING ACTIVITIES 776,396 906,470 1,099,173 1,584,578
OUTHERS CASH FLOWS BY OPERATING ACTIVITIES

Payments of income tax and social contribution (105,364) (10,324) (131,173) (70,251)
Withdrawal (payment) of escrow deposits 7,083 (3,851) 7,702 (3,277)
Payment of tax, civil and labor 18 (10,217) - (11,306) -
Receivables (Payments) of derivatives 127,319 305,876 123,704 323,872
Payment of interest on borrowings and financing (258,054) (209,216) (309,466) (256,897)
NET CASH GENERATED BY OPERATING ACTIVITIES 537,163 988,955 778,634 1,578,025
CASH FLOW FROM INVESTING ACTIVITIES

Acquisition of property, plant and equipment and intangible assets 14 (146,141) (139,630) (305,815) (382,894)
Receivable from sale of fixed and intangible assets 15,933 37,880 43,362 77,940
Short-term investments (4,295,494) (4,369,795) (6,030,398) (5,868,563)
Redemption of short-term investments 4,933,913 3,819,663 6,014,775 5,208,540
Capital increase in subsidiaries 13 (335,939) (100,737) - -
Dividends received from subsidiaries 13 79,739 - - -
NET CASH GENERATED (USED) IN INVESTING ACTIVITIES 252,011 (752,619) (278,076) (964,977)

Repayments of borrowings and financing - principal (1,277,488) (1,539,523) (1,869,562) (1,709,474)
Proceeds from borrowings and financing 619,751 1,988,265 1,265,114 2,258,925
Acquisition of additional shares of Emeis 19.a) - - (248,728) (66,141)
Payment of dividends and interest on capital of the prior year 20.b) (123,133) (685,599) (123,133) (685,599)
NET CASH GENERATED (USED) IN FINANCING ACTIVITIES (780,870) (236,857) (976,309) (202,289)
Gain arising on translation foreign currency cash and cash equivalents - - (24,622) 16,910
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 8,304 (521) (500,373) 427,669
Cash and cash equivalents at the beginning of the year/period 53,127 53,648 1,591,843 1,164,174
Cash and cash equivalents at the end of the year/period 61,431 53,127 1,091,470 1,591,843
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 8,304 (521) (500,373) 427,669
Non cash itens:

Capitalization of financial leasing 40,677 80,856 40,677 80,856
Hedge accounting 1,401 8,552 1,548 8,552
Effects of changes from participation of subsidiaries abroad 52,417 20,919 - -
Dividends and interest on interest capital declared and not distributed 118,680 123,133 118,680 123,133
11
STATEMENTS OF VALUE ADDED

Note 2016 2015 2016 2015
REVENUES 7,821,737 7,974,443 11,119,433 10,958,857

Sales of products and services 7,849,994 7,976,111 11,084,280 10,899,483
Allowance for doubtful accounts 7 (18,972) (8,262) (19,272) (6,416)
Other operating (expenses) income, net 26 (9,285) 6,594 54,425 65,790
INPUTS PURCHASED FROM THIRD PARTIES (4,860,548) (4,950,232) (6,512,297) (6,374,417)

Cost of sales and services (2,644,610) (2,682,515) (3,739,751) (3,220,425)
Materials, electricity, services and others (2,215,938) (2,267,717) (2,772,546) (3,153,992)
GROSS VALUE ADDED 2,961,189 3,024,211 4,607,136 4,584,440
RETENTIONS (100,897) (86,392) (260,771) (239,197)

Depreciation and amortization 14 (100,897) (86,392) (260,771) (239,197)
VALUE ADDED GENERATED BY THE COMPANY 2,860,292 2,937,819 4,346,365 4,345,243
TRANSFERRED VALUE ADDED 1,168,629 1,927,901 1,073,288 1,927,228

Equity in subsidiaries 13 216,182 235,603 - -
Financial income - includes inflation and exchange rate variations 25 952,447 1,692,298 1,073,288 1,927,228
TOTAL VALUE ADDED TO BE DISTRIBUTED 4,028,921 4,865,720 5,419,653 6,272,471
DISTRIBUTION OF VALUE ADDED: (4,028,921) 100% (4,865,720) 100% (5,419,653) 100% (6,272,471) 100%
Employees and social charges 24 (498,798) 12% (452,205) 9% (1,327,437) 24% (1,244,978) 20%
Taxes and contributions (1,744,048) 43% (1,806,871) 37% (2,009,371) 37% (2,148,891) 34%
Financial expenses and rentals (1,489,376) 37% (2,093,131) 43% (1,774,607) 33% (2,355,870) 38%
Dividends 20.b) (27,206) 1% (207,290) 4% (27,206) 1% (207,290) 3%
Interest on capital 20.b) (61,804) 2% (29,036) 1% (61,804) 1% (29,036) 0%
Dividends and interest on capital declared and not yet distributed 20.b) (29,670) 1% (123,133) 3% (29,670) 1% (123,133) 2%
Net income atrtributable to Non controlling - 0% - 0% (11,539) 0% (9,219) 0%
Retained earnings (178,019) 4% (154,054) 3% (178,019) 3% (154,054) 2%
Additional information on the Statement of Value Added:

- - - -
The amounts recorded under "Taxes and contributions" in december 2016 and 2015, the amounts of R$881,860 e R$788,743, respectively, refer to the Tax on Circulation of Goods and Services -
Replacement Tax - ICMS - ST levied on the presumed profit margin defined by the State Finance Secretariats obtained from sales made by (the) Consultants (the) Natura for the end consumer.
For the analysis of this tax impact on value added statements, such amounts shall be deducted from those recorded under "Sales of goods, products and services" and the heading itself "Taxes and
contributions", since the revenue figures of sales do not include the estimated profit of (the) Consultants (the) Natura sale of the products in the amounts of R$4,429,629 e R$4,421,486, in december 2016 and
2015, respectively, considering the estimated profit margin 30%.
12
(A free translation from Portuguese into English of Individual and Consolidated Financial Information
prepared in Brazilian currency in accordance with accounting practices adopted in Brazil and in
accordance with International Financial Reporting Standards (IFRS), issued by International
Accounting Standards Board – IASB)
NOTES TO THE INDIVIDUAL AND CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2016
(Amounts in thousands of Brazilian reais - R$, unless otherwise stated)
1. GENERATION INFORMATION
Natura Cosméticos S.A. (“Company”) is a publicly-traded company, registered in the special trading
segment called “Novo Mercado” in the São Paulo Stock Exchange (BM&FBOVESPA), under the
ticker “NATU3”, and headquartered in São Paulo, Alexandre Colares Avenue, 1188, Vila Jaguara,
Postal Code 05106-000, State of São Paulo.
The Company’s and its subsidiaries’ activities (“Natura Group” or “Group”) include the
development, production, distribution and sale of cosmetics, fragrances, and hygiene products,
substantially through direct sales by Natura Beauty Consultants. The Company also holds equity
interests in other companies in Brazil and abroad.
Corporate changes in 2016:
In December 20, 2016, Natura Cosméticos SA, through Natura Australia Pty Ltd. ("Natura
Australia"), acquired 525,384 common shares based on the options established in the purchase and
sale agreement of non-controlling shareholders of Emeis Holding Pty Ltd ("Emeis"), which
represented 21.26% of the capital stock of Emeis. Therefore, the indirect participation of Natura
Cosméticos S.A. in Emeis, through its subsidiary Natura Australia, changed from 78.74% to 100%.
The purchase price of the shares was AU$ 102,387 million or equivalent to R$ 248,728, with an
increase in the investment of AU$ 16,773 million and a reduction in its equity in AU$ 85.614 million
Australian dollars. As a reflex effect, the Company recognized in its shareholders' equity, under the
caption "Effect of changes in participation in subsidiaries abroad", a reduction in the amount of AU$
85,614 million, equivalent to or R$ 207,983.
The realization of the provision for acquisition of non-controlling shareholders recorded in the
liabilities of the Company in the amount of R$ 248,728, represented by the simultaneous purchase
and sale of shares in 21.26% of the capital stock of Emeis, Had a counterpart to an increase in
shareholders 'equity under "Realization of the reserve for acquisition of non-controlling interest by
the purchase of shares of subsidiary abroad", shown in two columns of the statement of changes in
shareholders' equity, the first in the "Reserve For acquisition of non-controlling interest in R$ 79,324
million and in the group "Goodwill / negative goodwill on capital transactions - Results of operations
with non-controlling shareholders" in R$ 169,404.
13
2. SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES
2.1. Statement of compliance and basis of preparation

Management is responsible for the preparation and fair presentation of the individual and
consolidated financial statements in accordance with accounting practices adopted in Brazil,
and in accordance with International Financial Reporting Standards (IFRS) issued by the
International Accounting Standards Board – IASB
The accounting practices adopted in Brazil include those established in the Brazilian Corporate
Law as well as the Pronouncements, Instructions and Interpretations issued by the Accounting
Pronouncements Committee (CPC) and approved by the Brazilian Securities and Exchange
Commission (CVM).
a) Individual and consolidated financial statements
 The Company’s consolidated financial statements were prepared in accordance with
International Financial Reporting Standards (“IFRS”) issued by the International
Accounting Standards Board (“IASB”) and interpretations issued by the International
Financial Reporting Interpretations Committee (“IFRIC”), implemented in Brazil through
the Brazilian FASB (“CPC”) and its technical interpretations (“ICPC”) and guidelines
(“OCPC”), approved by the Brazilian Securities and Exchange Commission (“CVM”).
The Individual and Consolidated financial statements have been prepared based on the
historical cost basis except for certain financial instruments that are measured at their fair
values, as described in the accounting policies below. The historical cost is generally based on
the fair value of the consideration paid in exchange for an asset.
The CVM issued, on January 12, 2017, Circular Letter 01/2017 with the purpose of guiding
the relevant aspects to be observed in the preparation of the financial statements for the fiscal
year ended December 31, 2016. Accordingly, The Company, in interpreting the effects of the
business combination with Emeis, which had simultaneous issuance of call options and stock
options with non-controlling shareholders, is making the following change in its presentation
of the statement of changes in shareholders' equity:
i) The column "Reserve for acquisition of non-controlling interest", which was previously
presented in the "Profit reserve" group, was reclassified to a specific group.
ii) The column "Income from non-controlling interests", which was previously presented
in the "Equity valuation adjustments" group, was reclassified to the "Goodwill / discount on
capital transactions" group.
The aforementioned reclassifications were also performed as at December 31, 2015 in order
to keep the comparability of information. These changes do not affect the total net equity as
previously stated, nor does it impact any interest on equity and dividends previously
distributed.
Certain amounts included in the notes to the individual and consolidated financial statements
for the year ended December 31, 2015, presented herein for comparison purposes, were
reclassified for better comparability.
14
Except for the reclassifications mentioned in the previous paragraph, the main accounting
practices applied in the preparation of the individual and consolidated financial statements are
defined below. These practices have been consistently applied in the previous year presented,
unless otherwise stated.
b) Operational continuity
Management has assessed the Company's ability to continue operating normally and is
satisfied that it has the resources to continue its business in the future. In addition, management
is not aware of any material uncertainties that could generate significant doubts about its
ability to continue operating. Therefore, these financial statements were prepared based on the
assumption of continuity.
2.2. Consolidation
a) Subsidiaries
Subsidiaries are all entities in which the Company is exposed, or has rights, to variable
returns from its involvement with the investee and has the ability to affect those returns
through its power over the investee, where the Company normally owns a greater than
50% interest. In the applicable cases, the existence and the effect of potential voting rights,
currently exercisable or convertible, are taken into consideration to determine if the
company control another entity. Subsidiaries are fully consolidated from the date in which
control is transferred to the Company and cease to be consolidated, when applicable, from
the date that control ceases.
b) Companies include in the consolidated financial statements
Equity interest- %
2016 2015
Direct interest:
Indústria e Comércio de Cosméticos Natura Ltda. 99.99 99.99
Natura Comercial Ltda. 99.99 -
Natura Biosphera Franqueadora Ltda. 99.99 99.99
Natura Cosméticos S.A. – Chile 99.99 99.99
Natura Cosméticos C.A. - Venezuela 99.99 99.99
Natura Cosméticos S.A. – Peru 99.99 99.99
Natura Cosméticos S.A. – Argentina 99.99 99.99
Natura Inovação e Tecnologia de Produtos Ltda. 99.99 99.99
Natura Cosméticos y Servicios de México, S.A. de C.V. 99.99 99.99
Natura Cosméticos de México, S.A. de C.V. 99.99 99.99
Natura Distribuidora de México, S.A. de C.V. 99.99 99.99
Natura Cosméticos Ltda. – Colômbia 99.99 99.99
Natura Cosméticos España S.L. – Espanha 100.00 100.00
Natura (Brasil) International B.V. – Holanda 100.00 100.00
Natura Brazil Pty Ltd – Austrália 100.00 100.00
Fundo de Investimento Essencial 100.00 100.00
Indirect interest:
Via Indústria e Comércio de Cosméticos Natura Ltda.:
Natura Logística e Serviços Ltda. - Brasil 99.99 99.99
Via Natura Inovação e Tecnologia de Produtos Ltda.:
15
Equity interest- %
2016 2015
Natura Innovation et Technologie de Produits SAS –
França - 100.00
Via Natura (Brasil) International B.V. - Holanda:
Natura Europa SAS - França 100.00 100.00
Natura Brasil Inc. - EUA – Delaware 100.00 100.00
Via Brasil Inc. – EUA - Delaware

Natura International Inc. - EUA - Nova York 100.00 100.00
Via Natura Brazil Pty Ltda:

Natura Cosmetics Australia Pty Ltd. - Austrália 100.00 100.00
Via Natura Cosmetics Australia Pty Ltd. – Austrália:

Emeis Holdings Pty Ltd - Austrália 100.00 78.74
The consolidated financial statements have been prepared based on the financial statements
as of the same date and consistent with the Company’s accounting policies. Investments
in subsidiaries have been eliminated proportionately to the investor’s interests in the
subsidiaries’ shareholders’ equity and net income or loss, intergroup balances and
transactions and unrealized profits, net of taxes. Third party participation in shareholders'
equity and net income of subsidiaries is reported as a component of consolidated equity
and consolidated statement of income, respectively, under the caption "Noncontrolling
interest".
The operations of the direct and indirect subsidiaries are as follows:

 Indústria e Comércio de Cosméticos Natura Ltda.: engaged principally in the
production and sale of Natura products to Natura Cosméticos S.A. - Brazil, Natura
Cosméticos S.A. - Chile, Natura Cosméticos S.A. - Peru, Natura Cosméticos S.A. -
Argentina, Natura Cosméticos Ltda. - Colombia, Natura Europa SAS - France, and
Natura Cosméticos de Mexico S.A. de C.V and Natura International Inc. - EUA.
 Natura Comercial Ltda.: engaged in the retail sale of cosmetics, fragrances in general
and toiletries, through sales in the retail market. Incorporated on October 30, 2015 and
incorporated by agreement into the Commercial Registry of the State of São Paulo -
JUCESP on 26 February 2016.
 Natura Biosphera Franqueadora Ltda. (previously Natura Cosmetics and Services
Ltda.): engaged in trading, including by electronic means, of products from Natura
brand.
 Natura Cosméticos S.A. - Chile, Natura Cosméticos S.A. - Peru, Natura Cosméticos
S.A. - Argentina, Natura Cosméticos Ltda. - Colombia and Natura Distribuidora de
Mexico, S.A. de C.V.: their activities are an extension of the activities conducted by
the parent company Natura Cosméticos S.A. - Brazil.
 Natura Cosméticos CA. - Venezuela: The company is in the process of closing and
there are no material investments or balances in its accounting records.
16
 Natura Inovação e Tecnologia de Produtos Ltda.: it is engaged in product and

technology development and market research. It is the only owner of Natura Innovation
et Technologie de Products SAS - France, a research and technology satellite center
opened in 2007 in Paris, whose closing process was concluded on December 27, 2016.
 Natura Cosméticos y Servicios de Mexico, S.A. de C.V.: engaged in the provision of
administrative and logistics services to companies Natura Cosméticos de Mexico, S.A.
de C.V. e Natura Distribuidora de Mexico, S.A. de C.V..
 Natura Cosméticos de Mexico, S.A. de C.V.: engaged in the import and sale of
cosmetics, fragrances in general, and hygiene products to Natura Distribuidora de
Mexico, S.A. de C.V..
 Natura Cosméticos España S.L.: company in start-up stage and its activities will be an
extension of the activities carried out by its parent company Natura Cosméticos S.A. -
Brazil.
 Natura (Brazil) International B.V - Netherlands.: holding controller of the Natura
Europe SAS – France, Natura Brazil Inc. and Natura International Inc.
 Natura Logística e Serviços Ltda.: engaged of separate services, packing and mailing
goods, logistic consulting, manager human resources and training in human resources
 Natura Innovation et Technologie de Produits SAS - France: engaged mainly in
research activities developed for in vitro testing as an alternative to animals testing, for
to the safety and efficiency of test active compounds, skincare products and new
packaging materials, whose closing process started in July 15, 2016.
 Natura Brazil Inc.: Holding controller of Natura International Inc.
 Natura International Inc: trends capture office in design, fashion and technology,
transforming them into ideas, concepts and prototypes.
 Natura Europa SAS - France: activities are concentrated in the purchase, sale, import,
export and distribution of cosmetics, fragrances, and toiletries
 Natura Brazil Pty Ltd – Holding controller of Natura Cosmetics Australia Pty Ltd
operations.
 Natura Cosmetics Australia Pty Ltd – Holding controller of Emeis Holdings Pty Ltd.
 Emeis Holdings Pty Ltda: Activities focused on developing manufacturing and
marketing of premium cosmetics, which operates under the brand of “Aesop”, with its
products sold in retail stores and own stores.
 Fundo de Investimento Essencial: refers to fixed income funds of private credit.
2.3. Segment reporting
Information per operating segments is consistent with the internal report provided to the chief
operating decision maker. The chief operating decision maker, responsible for allocating
resources to the operating segments and assessing their performance, is the Company’s
Executive Committee.
17
2.4. Translation of foreign currency
a) Functional currency
Items included in the financial statements of the Company and each one of the subsidiaries
included in the consolidated financial statements is measured using the currency of the
main economic environment in which the companies operate (“functional currency”).
In the preparation of the consolidated financial statements, the statements of income and
of cash flows and all other movements of assets and liabilities of subsidiaries abroad,
whose functional currency is the local currency of the respective countries where they
operate, are translated into reais at the rate of Monthly exchange rate, which is close to
the exchange rate prevailing on the date of the corresponding transactions. The balance
sheet is translated into Brazilian reais at the year-end exchange rates.
The effects of exchange rate changes resulting from these conversions are shown under
the caption "Other comprehensive income" in the statements of comprehensive income
and shareholders' equity.
b) Foreign currency transactions and balances
Foreign currency-denominated transactions are translated into the Company’s functional

currency – Brazilian reais (R$) - at the exchange rates prevailing on the dates of the
transactions. Balance sheet accounts are translated at the exchange rates prevailing at the
end of the reporting period. Foreign exchange gains and losses arising on the settlement of
such transactions and the translation of monetary assets and monetary liabilities
denominated in foreign currency are recognized in profit or loss, in line items “Financial
income” and “Financial expenses”.
c) Presentation currency and translation of financial statements
The financial statements are presented in Brazilian reais (R$), which corresponds to the
Group’s presentation currency.
2.5. Cash and cash equivalents
Cash equivalents are held for the purpose of meeting short term commitments box, rather
than for investment or other purposes. Include cash, demand deposits and short-term
investments redeemable within up to 90 days from the investment date, highly liquid or
convertible to a known cash amount and subject to immaterial change in value, which are
recorded at cost plus income earned through the end of the reporting period and do not
exceed their fair or realizable values.
18
2.6. Financial instruments
2.6.1. Categories
The category depends on the purpose for which financial assets and financial liabilities
were acquired or contracted and is determined on the initial recognition of the financial
instruments.
Financial assets held by the Company are classified into the following categories:
Financial assets measured at fair value through profit or loss
Consist of financial assets held for trading, when acquired for such purpose, principally
in the short term. These assets are measured at fair value at the end of the reporting
period and any differences are recognized in profit or loss. Derivative financial
instruments are also classified in this category. Assets in this category are classified in
current assets.
In the case of the Company, this category includes derivative financial instruments,
quotas of investment funds and securities.
The balances of outstanding derivatives are measured at their fair values at the end of
the reporting period and classified in current assets or current liabilities, and changes
in fair value are recorded in “Financial income” or “Financial expenses”, respectively.
Loans and receivables

Include non-derivative financial assets with fixed or determinable payments that are
not quoted in an active market. They are recorded in current assets, except for
maturities greater than 12 months after the end of the reporting period, when applicable,
which are classified as noncurrent assets. After initial measurement, these financial
assets are accounted for at amortized cost, using the effective interest method (effective
interest rate), less loss by decrease in recoverable value. Amortized cost is calculated
taking into account any discount or premium on acquisition and fees or costs incurred.
In December 31, 2016 and 2015 include trade accounts receivable (note 7).
Financial liabilities held by the Company are classified into the following categories:
Financial liabilities at fair value through profit or loss
They are classified as fair value through profit or loss when the financial liability is
either held for trading or it is designated as fair value through profit or loss.
Other financial liabilities
They are measured at the amortized cost using the effective interest method. As of
December 31, 2016 and 2015, in the case of the Company, comprise borrowings and
financing (note 15) and domestic and foreign trade payables.
19
2.6.2. Measurement
Regular purchases and sales of financial assets are recognized on the transaction date,
i.e., on the date the Company agrees to buy or sell the asset. Loans and receivables and
held-to-maturity financial assets are measured at amortized cost.
Financial assets at fair value through profit or loss are initially recognized at their fair
value and transaction costs are recognized in the income statement. Gains or losses
resulting from changes in the fair value of financial assets at fair value through profit
or loss are recognized in the income statement, in “Finance income” or “Finance costs”,
respectively, for the period in which they occur.
Loans and receivables and financial assets held to maturity are measured at amortized
cost. The methodology used to calculate the amortized cost of a debt instrument and
allocate its interest income over the corresponding period is used. Revenue is
recognized based on effective interest for debt instruments not characterized as
financial assets at fair value through profit or loss. The effective interest rate
accurately discounts estimated future cash receipts (including all fees and points paid
or received that are an integral part of the effective interest rate, transaction costs and
other premiums or deductions) over the estimated life of the instrument. Debt or,
where appropriate, for a shorter period, to the net carrying amount on the date of
initial recognition. Revenue is recognized based on effective interest for debt
instruments not characterized as financial assets at fair value through profit or loss.
Changes in financial assets classified as “Available for sale”, when applicable, are
recorded in “Other comprehensive income” and shareholders’ equity until the financial
assets are settled, when they are ultimately reclassified to profit or loss for the year.
2.6.3. Offsetting financial instruments
Financial assets and financial liabilities are offset and the net amount is presented in
the balance sheet when there is a legally enforceable right to set off recognized amounts
and the intent to either settle them on a net basis, or to recognize the asset and settle the
liability simultaneously
2.6.4. Derecognition of financial instruments
A financial asset (or, where applicable, a part of a financial asset or part of a group of
similar financial assets) is downloaded when the rights to receive cash flows from the
asset have expired; the company transferred its rights or risk receiving the cash flows
of the asset or has assumed an obligation to pay the received cash flows in full .
20
2.6.5. Derivative instruments
Derivative transactions contracted by the Group consist of swaps and non-deliverable

forwards (NDFs) intended exclusively to hedge against the foreign exchange risks
related to the positions in balance sheets and projected cash outflows in foreign
currency for capital increases in foreign subsidiaries.
They are measured at fair value, and changes in fair value are recognized through profit
or loss, except when they are designated as cash flow hedges, to which changes in fair
value are recorded in “Other comprehensive income” within shareholders equity.
The fair value of derivatives is measured by the Company’s treasury department based
on information on each contracted transaction and related market inputs at the end of
the reporting period, such as interest rates and exchange coupon. When applicable,
these inputs are compared with the positions reported by the trading desks of each
involved financial institution.
Hedge accounting:
Natura’s Board of Directors approved the hedge accounting practice for derivative
financial instruments taken out for hedge purposes: (i) of loans taken out in foreign
currency, subject to variable interest rate, or (ii) of loans taken out in the functional
currency (Brazilian Real), subject to fixed interest rate. Hedged risks are, respectively:
(i) risk of variation in future cash flows resulting from changes in exchange rates, to
which “cash flow hedge” accounting is applicable and (ii) interest rate risk, to which
“fair value hedge” accounting is applicable.
Cash flow hedge
This consists in providing hedge against variation in cash flows attributable to a

specific risk related to a known asset or liability or a highly probable forecast
transaction and that may affect P&L.
The effective portion of changes in fair value of derivatives that is designated and
qualified as cash flow hedge is recognized in other comprehensive income and
accumulated in “Gain (loss) from cash flow hedge operations” and “tax effect on gain
(loss) from cash flow hedge operations.
In a “cash flow hedge”, the effective portion of gain or loss from the hedge instrument
is recognized directly in equity in other comprehensive income, while the ineffective
portion of hedge is immediately recognized in financial income (expenses).
For the year ended December 31,2016 the Company used derivative financial
instruments, applying “cash flow hedge accounting” and, as disclosed in Note 4, for
hedge against the risk of change in exchange rates related to loans in foreign currency
and that: (i) are highly related to the changes in the market value of the hedged item,
both at the beginning as well as during contract term (effectiveness between 80% and
125%); (ii) have documentation of the operation, hedged risk, risk management process
and methodology used in assessing effectiveness; and (iii) are considered effective to
21
reduce the risk related to the exposure to be hedged. They are accounted for according
to CPC 38 – Financial Instruments: Recognizing and Measurement, which allows
application of the hedge accounting methodology, with effect from measurement of
their fair value on equity and from their realization on P&L in the heading related to
the hedged item.
Hedge accounting is discontinued when the Company cancels the hedge relationship,
the hedge instrument matures or is sold, revoked or executed, or no longer qualifies to
hedge accounting. Any gains or losses recognized in other comprehensive income and
accumulated in equity as of a certain date remain in equity and are recognized when
the forecast transaction is eventually recognized in P&L. When the forecast transaction
is no longer expected, cumulative gains or losses deferred in equity are immediately
recognized in P&L for the year.
For the year ended December 31,2016, there were no losses related to the ineffective
portion recognized in P&L for the year.
The fair values of derivative financial instruments are disclosed in note 4.
The Company checks, along the hedge term, the effectiveness of its derivative financial
instruments, as well as changes in their fair value.
In addition, it should be mentioned that, during the year ended December 31, 2016, the
Company did not enter into transactions related to hedge of fair value or hedge of net
investment.
2.6. Trade receivables and allowance for doubtful debts
Trade receivables are stated at their nominal amount, less the allowance for doubtful
debts, which is recognized based on the history of losses using an aging list, in an
amount considered sufficient by management to cover possible losses, as described in
note 7.
2.7. Inventories
Carried at the lower of average cost of purchase or production and net realizable value.
Details are disclosed in note 8.
The Company considers the following when determining its provision for inventory
losses: discontinued products, products with slow turnover, products with expired
validity and products that do not meet quality standards.
22
2.8. Carbon Credits – Carbon Neutral Program
In 2007, the Company assumed with its employees, customers, suppliers and
shareholders committed to be a Carbon Neutral company, which is to neutralize their
emissions of Greenhouse Gas - GHG, in its complete production chain, from extraction
of raw materials to post- consumption. This commitment, though not a legal obligation,
since Brazil despite being a signatory to the Kyoto Protocol has no reduction target, is
considered a constructive obligation under IAS 37 - Provisions, Contingent Liabilities
and Contingent Assets, which requires the recognition of a provision in the financial
statements if it is subject to disbursement and measurable
The liability is estimated audited through the inventories of carbon held annually and
valued based on the market price for the acquisition of licenses for neutralization. On
December 31, 2016, the balance recorded in the caption " Other provisions " (see note
19), refers to the total carbon emissions in the period 2007 to 2015 that have not yet
been offset by corresponding projects therefore no execution of the certificate of
carbon.
In line with their beliefs and principles, the Company elected to make some purchases
carbon credits by investing in projects with environmental benefits arising from the
voluntary market. Thus, the costs will generate carbon credits after completion or
maturation of these projects.
During these exercises, these expenses were recorded at fair value as other assets (see
note 12).
Upon effective delivery of the related carbon certificates to the Company, the
obligation of being Carbon Neutral is effectively fulfilled; therefore the balances of
assets are offset against those of liabilities.
The difference between the carrying amounts of assets and liabilities at December 31,
2016 refers to the amount of cash that the Company also will pay for future
generation or acquisition of certificates.
2.9. Investments in subsidiaries and controlled entities
The Company holds interest only in subsidiaries.
Subsidiaries are entities in which the Company, directly or through other subsidiaries,
has ownership rights that provide it with the ability to direct the subsidiaries’ activities
and to elect the majority of the subsidiaries’ management members on a permanent
basis. Subsidiaries are the companies over which the Company has control. Control is
the power to govern the financial and operating policies of an entity so as to obtain
benefits from its activities, which in general consists of the ability to exercise the
majority of the voting rights. Potential voting rights considered when assessing the
control exercised by the Company over the other entity, when they can be exercised at
the time of the assessment.
23
Investments in subsidiaries are accounted for by the equity method of accounting. The
financial statements of subsidiaries are prepared for the same reporting date of the
Company. Adjustments are made, if necessary, to conform their accounting policies to
those adopted by the Company.
Under the equity method of accounting, the share attributable to the Company of the
profit or loss for the period of such investments is accounted for in the income
statement, in line item “Equity in investees”. Unrealized gains and losses arising on
transactions between the Company and the investees are eliminated based in the
percentage interest held in such investees. The other comprehensive income of
subsidiaries, associates and jointly controlled entities is recorded directly in the
Company’s shareholders’ equity, in line item “Other comprehensive income”.
2.10. Property,plant and equipment
Stated at cost of purchase or construction, plus interest capitalized during construction

period, when applicable, for the case of eligible assets, and reduced by accumulated
depreciation and impairment losses, if applicable. Additionally, the useful lives of the assets
are reviewed annually.
Rights in tangible assets intended for the maintenance of Company’s and its subsidiaries’
activities, arising out of finance leases, are recorded as if they were a financed purchase, with
a PPE asset and a financing liability being recognized at the inception of each transaction,
the assets also being subject to depreciation calculated over the estimated useful lives of the
respective assets or over the life of the contract, when the financial lease has no purchase
option.
Land is not depreciated. Depreciation of the other assets is calculated under the straight-line
method to distribute their cost over their useful lives.
Gains and losses on disposals are calculated by comparing the proceeds from the sale with
the carrying amount, and are recognized in the income statement.
2.11. Intangible assets
2.11.1. Software
Software systems licenses purchased are also capitalized and amortized at the rates also
described in note 14, and expenses on the software maintenance are recognized as
expenses when incurred.
The system purchase and implementation costs are capitalized as intangible assets when
there is evidence that future economic benefits will flow into the Company, taking into
consideration its economic and technologic viability. Expenses on software development
recognized as assets are amortized under the straight-line method over its estimated
useful life. The expenses related to software maintenance are expensed when incurred.
24
2.11.2. Trademarks and patents

Separately purchased trademarks and patents are stated at their historic cost. Trademarks
and patents acquired in a business combination are recognized at fair value on the
acquisition date. Amortization is calculated on a straight-line basis at the annual rates
described in note 14.
2.11.3. Intangible assets with indefinite useful lives

Are not amortized but are tested annually for losses due to impairment either individually
or at the level of the cash generating unit. The assessment of indefinite life is reviewed
annually to determine whether this assessment continues to be supportable. Otherwise, the
change in useful life from indefinite to finite is made on a prospective basis.
Gains and losses arising from derecognition of an intangible asset are measured as the
difference between the net from the sale and the carrying amount of the asset and are
recognized in the income statement upon disposal of the asset.
2.13. Research and product development expenses
In view of the high level of innovation and the turnover rate of the products in the Company’s
sales portfolio, the Company adopts the accounting policy of recognizing product research
and development expenditure as expenses for the year, when incurred.
2.14. Leases
Lease classification is made at the inception of the lease. Leases where the lessor does not
retain substantially all the risks and rewards incidental to ownership are classified as
operating leases. Lease payments under an operating lease are recognized as an expense on a
straight-line basis over the lease term.
Leases where the Group retains substantially all the risks and rewards incidental to ownership
are classified as finance leases. These leases are capitalized in balance sheet at the
commencement of the lease term at the lower fair value of the leased asset and the present
value of minimum lease payments.
Each lease payment is apportioned between liabilities and the finance charges so as to permit
obtaining a constant effective interest rate on the outstanding liability. The corresponding
obligations, less the finance charge, are classified in current liabilities and noncurrent
liabilities, according to the lease term. Property, plant and equipment items purchased
through finance leases are depreciated over their useful lives, as described in note 2.11, or
over the lease term, when it is shorter.
2.15. Capitalization of Interest
Borrowing costs directly attributable to the acquisition, construction or production of an asset

that necessarily requires a significant effort to be ready for its intended use or sale are
capitalized as part of the cost of the corresponding asset. All other borrowing costs are
expensed in the period they are incurred. Borrowing costs consist of interest and other costs
incurred by an entity related to the loan.
25
2.16.Impairment assessment
The assets net account value are annually tested to identify evidences of impairment, or also
significant events or changes in circumstances that indicate the carrying value of an asset may
not be recoverable. Where applicable, when there is a loss, arising from situations where the
carrying amount of an asset exceeds its recoverable amount.
For impairment assessment purposes, assets are grouped at the lowest levels for which there
are separately identifiable cash flows (cash-generating units, or CGUs).
The recoverable amount of an asset or cash-generating unit is determined defined as being the
larger of the value in use and the net selling value. In the estimation of the value in use of the
asset, the estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects the weighted average cost of capital for the industry in which it
operates the cash-generating unit. The net selling value is determined, whenever possible, on
the basis of the contract of sale firm in a transaction in commutative bases, between
knowledgeable and interested parties, adjusted for expenses attributable to the sale of the asset,
or, where there is no contract of sale firm, based on the market price of an active market, or in
the price of the most recent transaction with similar assets.
2.17. Trade payables
These are initially recognized at their nominal amounts, plus interest, inflation adjustments
and exchange differences through the end of the reporting period, when applicable.
2.18. Borrowings and financing
Initially recognized at fair value of proceeds received less transaction costs, plus charges,
interest, adjustments and exchange differences incurred through the end of the reporting
period, as shown in note 15.
2.19. Provision for acquisition of non-controlling interest
The CPC (Brazilian FASB) and the IASB (International Accounting Standards Board) do not
have any specific regulation on business combination involving remaining non-controlling
interest with put and call options.
In view of the foregoing, to disclose the accounting effects of a transaction with such
characteristics, Company management designed an accounting policy based on and consistent
with put and call options set out by CPC 36 – Consolidated Financial Statements (IFRS 10 –
Consolidated Financial Statements) and by CPC 38 – Financial Instruments: Recognition and
Measurement (IAS 32 - Financial Instruments: Presentation).
26
On the date of a business combination, the Company assesses a number of elements, mainly
the voting rights proportional to its equity interest, right to elect members of the Board of
Directors, and right to dividends proportional to equity interest in order to assess whether non-
controlling interest owners maintain the benefits concerning the ownership of their shares. In
case a positive conclusion is reached, the Company initially recognizes an obligation which
reflects the fair value of the consideration arising from acquisition of remaining shares from a
subsidiary with a contra-entry to a specific reserve in net equity, as this is deemed to be
transactions among partners.
The later review of the obligation value (put) is restated in each reporting period to reflect
estimated cash flows based on contractual variables which set the estimated amount of the
consideration. The record of such obligation is matched against financial results, pursuant to
CPC 38 – Financial Instruments – Recognition and Measurement IAS 32 - Financial
Instruments: Presentation), since management understands that re-measuring such obligation
does not change the rights of each shareholder in relation to equity interest, thus not translating
into capital transactions.
2.20. Provision for tax, civil, and labor contingencies

The provisions for contingent liabilities are recognized when the Group has a legal or
constructive obligation as a result of past events, and it is probable that disbursements will be
required to settle the obligation, and its value can be reliably estimated. Provisions are
quantified at the present value of the expected disbursement to settle the obligation using the
appropriate discount rate, according to related risks.
Adjusted for inflation through the end of the reporting period to cover probable losses, based
on the nature of contingencies and the opinion of the Company’s legal counsel. The bases for
and nature of the provisions for tax, civil, and labor contingencies are described in note 18.
2.21. Current and deferred income tax and social contribution

Recognized in the income statement, except, when applicable, in the proportion related to
items recognized directly in shareholders’ equity. In this case, taxes are recognized directly in
shareholders’ equity, in line item “Other comprehensive income”.
Except for the foreign subsidiaries, which apply the tax rates prevailing in each one of the
countries where they are located, income tax and social contribution on the Company’s and its
Brazilian subsidiaries’ profits are calculated at the tax rates of 25% and 9%, respectively.
Current income tax and social contribution expenses are calculated using the laws and
regulations enacted by the end of the reporting period, pursuant to Brazilian tax regulations.
Management periodically measures the positions assumed in the income tax return regarding
the situations where applicable tax law is subject to possibly different interpretations and, when
appropriate, recognizes provisions based on the amounts it expects to pay tax authorities.
27
Deferred income tax and social contribution are calculated on temporary differences between
the tax base of assets and liabilities and their carrying amounts. Deferred income tax and social
contribution are calculated using the tax rates enacted on the end of the reporting period and
that must be applied when the corresponding deferred income tax and social contribution assets
are realized or deferred income tax and social contribution liabilities are settled.
Deferred income tax and social contribution assets are recognized only to the extent that there
is a reasonable certainty that future taxable income will be available and against which
temporary differences can be offset.
The amounts of deferred income tax and social contribution assets and liabilities are only
utilized when there is a legally enforceable right to offset current tax assets against tax
liabilities and/or when current deferred income tax and social contribution assets and liabilities
are related to the income tax and social contribution levied by the same tax authorities on the
taxable entity or different taxable entities, where there is intention to settle the net balances.
Details are disclosed in note 10.
2.22. Stock option plan, restricted stock option plan and strategy acceleration program
The Company's executives are granted stock option plans, settled exclusively with its shares.
The stock option plan, the restricted stock option plan and the strategy acceleration program
are measured at fair value at the grant date. In determining the fair value, the Company uses
an adequate valuation method, details of which are disclosed in Note 24.1.
The cost of transactions settled with equity securities is recognized, together with a
corresponding increase in equity under the heading "additional paid-in Capital", throughout
the period in which the performance and/or service conditions are fulfilled, ending on the date
on which the employee acquires the full right to prize (date of acquisition). The cumulative
expense recognized for equity instruments transactions settled on each base date up to the date
of acquisition reflects the extent to which the vesting period has expired and the best estimate
of the number of equity securities Company to be acquired. The expense or credit in the
statement of income of the period is recorded under the heading "administrative expenses".
When an award of equity instruments settlement is cancelled, it is treated as if it had been

acquired on the date of cancellation, and any expense not recognized award is registered
immediately. This includes any award where non-vesting conditions within the control of the
company or the counterparty were not met. All cancellations of transactions settled with equity
securities are treated in the same way.
The dilution effect of options open is reflected as additional share dilution in the calculation
of diluted earnings per share (Note 27.2)
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2.23. Profit sharing and long term incentive program
The Company recognizes a liability and a profit sharing based on criteria that it considers the
profit attributable to the shareholders of the Company after certain adjustments and which is
tied to the achievement of specific operational goals and objectives established and approved
in the Beginning of each Financial year.
The Company makes available to eligible executives of its subsidiary Emeis Holdings Pty Ltd.
a long-term incentive program, based on criteria linked to specific operational goals and
objectives established at the beginning of the relationship between the parties, being such
obligation recorded in Liabilities and their remeasurement with effect in result.
2.24. Dividends and interest on capital
The proposed distribution of dividends and interest on capital made by the Company’s
management included in the portion equivalent to the mandatory minimum dividends is
recognized in line item “Other payables” in current liabilities, as it is considered as a legal
obligation provided for by the Company’s bylaws; however, the portion of dividends
exceeding minimum dividends declared by management after the reporting period but before
the authorization date for issuance of these financial statements is recognized in line item
“Proposed additional dividends” and their effects are disclosed in note 20.(b).
For corporate and accounting purposes, interest on capital is stated as allocation of income
directly in shareholders’ equity.
2.25. Treasury shares
Own equity instruments which are reacquired (Treasury shares) and recognized at acquisition
cost and deducted from shareholders ' equity. No gain or loss is recognized in the income
statement on the purchase, sale, issue or cancellation of the company's own equity instruments.
Any difference between the book value and the consideration is recognized in other capital
reserves.
2.26. Actuarial gains and losses of healthcare plan
The Company offers certain extended health care benefits to retired employees who had
acquired the benefit up to April 2010. The costs associated with the extension of this benefit
to retirees of the Company and its subsidiaries are recognized on an accrual basis as a post-
employment benefit plan as a defined benefit, using the projected unit credit method. The
actuarial gains and losses are recognized in other comprehensive income.
2.27. Revenue and expense recognition
Sales revenue is recognized when all risks and rewards of ownership of the product are
transferred to the customers and there are recognized on an accrual basis.
29
Revenues are recognized to the extent in which it is probable that the economic benefits
associated with the transaction will accrue to the Company, and when such benefits can be
reliably measured. Sales revenues are primarily generated through sales made by the Natura
Beauty Consultants (our clients), measured based on the fair value of the consideration
received (or to be received), excluding any discounts, rebates and taxes or charges with respect
to such sales. Sales revenue is recognized when the significant risks and rewards of title to
products have been transferred to the client, which generally occurs upon delivery thereof to
the Natura Beauty Consultants.
Sales revenue is generated and accumulates initially in the subsidiary sales ledger of the
Company, as of the moment in which the proof of shipping is issued in the name of our clients.
However, as our revenues are recorded for accounting purposes only when the final delivery
of products has occurred, the Company makes a provision to eliminate the amount of revenues
with respect to products shipped but not yet received by the Natura Beauty Consultants as of
the closing date of the financial statements for each period.
Regarding controlled Emeis Holdings Pty Ltd, which operates in the retail market, the
revenues from sales are recognized when there is significant transfer of risks and benefits of
the products, that is, at the time of delivery of goods.
Revenue from the sale of uncollected and nonrefundable receivables is recognized when there
is a significant transfer of risks and economic benefits from the Company to the transferee.
The consideration arising from the exclusivity granted by the Company in relation to the
provision of bank settlement services related to employees' payroll, when there is a right of
contractual cancellation with burdens on the Company, is initially recognized in liabilities,
and is allocated to income (Revenue recognition) linearly over the contractual term established
between the parties.
2.28. Statement of value added
The purpose of this statement is to disclose the wealth created by the Company and its
distribution during a certain reporting period, and is presented by the Company, as required by
the Brazilian Corporate Law, as an integral part of its individual financial statements, and as
additional disclosure of the consolidated financial statements, since this statement is not
required by IFRSs.
The statement of value added was prepared using information obtained in the same accounting
records used to prepare the financial statements and pursuant to the provisions of CPC 09 -
Statement of Value Added. The first part of this statement includes the wealth created by the
Company, represented by revenue (gross sales revenue, including taxes levied thereon, other
income, and the effects of the allowance for doubtful accounts), inputs acquired from third
parties (cost of sales and purchase of materials, electricity, and services from third parties,
including taxes levied at the time of the acquisition, the effects of impairment losses, and
depreciation and amortization), and the value added received from third parties (equity in
investees, financial income, and other income). The second part of the statement of value added
presents the distribution of wealth among personnel, taxes, fees and contributions, lenders and
lessors, and shareholders.
30
2.29. New standards and interpretations and amendments to standards
The standards and interpretations issued, but not yet adopted, up to the date of issuance of the
Company’s financial statements are presented below. The Company intends to adopt these
standards when they become effective.
The project for the implementation of the new IFRS 9 pronouncements - Financial
Instruments, IFRS 15 - Revenue from contracts with clients and IFRS 16 - Leasing Companies,
in addition to the preliminary analysis carried out by the Management in 2016, will include
the hiring of external experts to assist the Company in identifying And measurement of the
final effects on the date of initial adoption, identification of the needs for modification of the
computerized systems used, design and implementation of internal controls, adequate policies
and procedures to collect and disclose the information requested in these
IFRS 9 Financial Instruments
In July 2014, IASB issued the final version of IFRS 9 – Financial Instruments, which reflects
all the phases of the financial instruments project and replaces IAS 39 – Financial Instruments:
Recognition and Measurement and all the former versions of IFRS 9. IFRS 9 brings together
all three aspects of the accounting for financial instruments project: classification and
measurement, impairment and hedge accounting. IFRS 9 is effective for annual periods
beginning on or after January 1, 2018, with early adoption permitted. Except for hedge
accounting, retrospective application is required, but providing comparative information is not
compulsory.
For hedge accounting, the requirements are generally applied prospectively, with some limited
exceptions.
The Company plans to adopt the new standard on the effective date of entry into force. During
the course of 2016, the Company conducted a preliminary assessment of the impact of all three
aspects of IFRS 9. This evaluation preliminaries which is based on the information currently
available. According to the analyzes carried out by Management do not expect a significant
impact on its balance sheet and shareholders' equity, the following considerations have been
identified:
(a) Classification and measurement
The Company does not expect a significant impact on its balance sheet or equity on applying
the classification and measurement requirements of IFRS 9. It expects to continue measuring
at fair value all financial assets and liabilities currently held at fair value.
Loans as well as trade receivables are held so that contractual cash flows can be received and
they must generate cash flows exclusively represented by payments of principal and interest
thereon. Thus, the Company expects they will continue to be measured at amortized cost under
IFRS 9. However, the Company will further analyze the characteristics of the contractual cash
flows of these instruments before concluding on whether all these instruments meet the
amortized cost measurement requirements of IFRS 9.
31
(b) Impairment
The methodology for calculating the expected loss provision for the aging list model, which is
based on the history of losses for all the aging list, including the amounts classified as "due",
is already considered By the Company. Management understands that, given the information
it has available, it is the model that best reflects the loss estimate. The management of the
impacts of IFRS 9 and the applicability of the probabilistic model or the maintenance of the
aging list model are being analyzed by the Administration. For this purpose, Management is
required to present all the necessary information, To obtain data to build a probabilistic model.
If management considers that the probabilistic model better reflects the provision for expected
losses, it will be necessary to change the calculation methodology and the adequacy of its
internal policies and procedures.
With regard to the recording of expected credit losses on all debt securities and loans, for 12
months or on a life-time basis, the Company does not expect a significant impact on its balance
sheet and shareholders' equity.
(c) Hedge accounting
The Company believes that all existing hedging relationships currently designated as effective
hedging relationships will still qualify for hedge accounting under IFRS 9. Since IFRS 9 does
not change the overall principles for effective hedge accounting, the Company does not expect
a significant impact on applying IFRS 9. The Company will perform a more detailed analysis
of possible changes relating to accounting for the time value of options, forward elements or
foreign currency basis spread in the future.
Until the financial statement closing date, Management had not completed the measurement
of the effects of this new pronouncement, thus being unable to disclose such effects.
IFRS 15 - Revenue from contracts with customers:
It establishes a template of five stages applicable to revenue from a contract with a customer,
irrespective of the type of revenue transaction or industry. It applies to all revenue contracts
and provides a template for the recognition and measurement of gains or losses on the disposal
of certain non-financial assets that are not related to the entity’s ordinary activities (for
instance, disposals of properties, premises and equipment or intangible asset items). Extensive
disclosures are also required by this new standard. This pronouncement shall be applied to
annual periods beginning on or after January 1, 2018. The early adoption, although provided
by IFRSs, was prohibited by brazilian capital market regulators.
The Company engages in the development, production, distribution, sale and exploitation of
business models for cosmetics, fragrances, and hygiene products, substantially through direct
sales by Natura Beauty Consultants. The goods are sold individually under separate contracts,
identified with customers, or grouped as a bundle of goods.
Until the financial statement closing date, Management had not completed the measurement
of the effects of this new pronouncement, thus being unable to disclose such effects
32
IFRS 16 - Leases
The new standard sets out the principles for both the customer (the lessee) and the supplier
(lessor) on the provision of relevant information about the leases in a manner that clearly
shows the leasing operations in the financial statements. To achieve this objective, the lessee
is obliged to recognize the assets and liabilities resulting from a lease. The standard includes
two exemptions from recognition for tenants - leases of low-value assets and short-term leases
(ie lease terms of 12 months or less). The Company and its subsidiaries have already started
the project that will establish the guidelines for the application of IFRS 16. This project
includes the contracting of third-party specialists to assist the Company in identifying the most
relevant effects of the standard and the relative impacts to the Company, establishing internal
controls. Appropriate policies and procedures necessary to collect and disclose the information
required in this new policy. This pronouncement should be applied for annual periods
beginning on or after January 1, 2019.
Due to the amounts payable relating to operating lease agreements disclosed in Note 29, the
Company expects material impacts. However, the first-time adoption effects related to this
pronouncement have not yet been measured, thus being unable to disclose such effects.
In addition, the following new standards, amendments and interpretations were issued by
IASB, however, management does not expect impacts on the Company’s consolidated
financial statements:
 Amendment to IAS 7 - These amendments are part of the initiative to improve IASB
disclosures and are effective for annual periods beginning on January 1, 2017.
 Amendments to IAS 12 - These amendments clarify the accounting for deferred tax assets
on unrealized losses on debt instruments measured at fair and are effective for annual periods
beginning on January 1, 2017.
 Amendments to IFRS 2 - Changes addressing areas involving measurement, classification
and modification of terms and / or conditions of such transactions and will be effective from
annual periods beginning on 1 January 2018.
 Amendments to IFRS 4 - Changes addressing concerns about the adoption of IFRS 9 and
will be effective from annual periods beginning on January 1, 2018.
The Company intends to adopt those standards when they come into force by disseminating and
recognizing the impact on the Financial information that may occur when the application of such
adoptions.
Considering the current operations of the Company and its subsidiaries, management does not
expect that these amendments will generate relevant effects on the financial statements after
adoption thereof.
There are no other standards and interpretations issued but not yet adopted that, in management's
opinion, have a significant impact on the income or equity issued by the Company.
The listed standards issued and which came into effect during the 2016 financial year have not had
no impact on these financial statements
33
3 CRITICAL ACCOUNTING ESTIMATES AND ASSUMPTIONS
The preparation of financial information requires the use of certain critical accounting estimates and
the exercise of judgment by the Company’s management in the process of application of accounting
policies.
The accounting estimates and underlying assumptions are reviewed on an ongoing basis and are
based on historical experience and other factors that are considered to be relevant in the
circumstances. Actual results may differ from those estimates. The effects resulting from the
revision of accounting estimates are recognized in the revision period.
These significant assumptions and accounting estimates are follows:
a) Income tax and social contribution
The Company recognizes deferred tax assets and liabilities based on differences between the
carrying amount stated in the financial information and the tax base assets and liabilities using
statutory tax rates. The Company reviews regularly deferred tax assets in terms of possible
recovery, considering the history of earnings generated and projected future taxable income,
based on a technical feasibility study.
b) Provision for tax, civil, and labor contingencies
The Company is a party to several lawsuits and administrative proceedings, as described in

note 18. Provisions are recognized for all contingent liabilities arising from lawsuits that
represent probable losses and can be reliably estimated. The probability assessment includes
assessing available evidences, the hierarchy of laws, available previous decisions, most recent
court decisions and their relevance within the legal system, and the assessment of the outside
legal counsel. Management believes that these provisions for tax, civil and labor contingencies
are fairly presented in the financial statements.
c) Retirees healthcare plan
The current amount of the retirees’ healthcare plan is contingent to a series of factors determined
based on actuarial calculations that update a series of assumptions, for example, the discount and
other rates, which are disclosed in note 19.b).
d) Stock option plan, restricted stock option plan and strategy acceleration program
The stock option plan, restricted stock option plan and strategy acceleration program are
measured at fair value at the grant date and the expense is recognized in P&L during the vesting
period, matched against “Additional paid-in capital” in equity. At the balance sheet dates,
Company management reviews the estimates as to the number of restricted options/shares and,
where applicable, recognizes the effect arising from this review in P&L for period, matched
against equity. The assumptions and models used to estimate the fair value of the stock option
plan, restricted stock option plan and strategy acceleration program are disclosed in Note 24.1.
34
e) Provision for acquisition of non-controlling interest
It reflects the commitment of acquiring non-controlling interests resulting from business

combination, measured at fair value at acquisition date, also subsequent changes for
remeasurement of the obligation must be recognized in P&L for the period. On December 31,
2016, this provision was made due to the settlement of non-controlling options (see note 19.a).
f) Provision for impairment
An impairment loss exists when the book value of an asset or cash-generating unit exceeds its
recoverable amount, which is the higher of fair value less cost to sell and value in use. Fair value
less costs to sell is calculated based on information available about similar assets sold or market
prices less additional costs to dispose of the asset.
Value in use is calculated based on the discounted cash flow model. Cash flows derive from a
budget prepared for the following five years and do not include reorganization activities not yet
engaged by the Company and its subsidiaries or significant future investments that will improve
the base of assets of the cash generating unit subject to testing. The recoverable amount is
sensitive to the discount rate used under the discounted cash flow method, as well as expected
future cash receipts, and to the growth rate used for extrapolation purposes.
g) Provision for expected losses on trade accounts receivable
The provision for expected losses on trade accounts receivable is estimated using an "aging list"
methodology, including expected losses, even for the amounts classified as "due." The different
risks under the collection operation are considered for the calculation of the provision for
expected losses. Management considers this method sufficient to cover possible losses,
according to the amounts shown in note 7.
4 FINANCIAL RISK MANAGEMENT
4.1 General considerations and policies
Risks and the financial instruments are managed through the definition of policies and
strategies and implementation of control systems, defined by the Company’s Treasury
Committee and approved by the Board of Directors. The compliance of the treasury area’s
positions in financial instruments, including derivatives, in relation to these policies, is
presented and assessed on a monthly basis by the Treasury Committee and subsequently
submitted to the analysis of the Audit Committee, the Executive Committee and the Board of
Directors.
Risk management is performed by the Company’s general treasury function, which is also
responsible for approving the short-term investments and loan transactions conducted by the
Group’s subsidiaries.
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4.2 Financial risk factors

The Group’s activities expose them to several financial risks: market risk (including currency
and interest risks), credit risk and liquidity risk. The Company’s overall risk management
program is focused on the unpredictability of financial markets and seeks to minimize potential
adverse effects on the financial performance, using derivatives to protect certain risk
exposures.
a) Market risk
The Group is exposed to Market risks arising from their business activities. These risks mainly
comprise possible changes in exchange and interest rates.
The following derivative financial instruments are used by Company as protection to market
risks:
Fair Value Fair Value
Description 2016 2015 2016 2015
Derivatives (financial) (69,864) 692,643 (73,360) 733,228

Derivatives “swap” interest rate - - (142) (3,849)
Others derivative financial instruments - 5,118 - 5,118
Total (69,864) 697,761 (73,502) 734,497
The characteristics of these instruments and the risks which they are linked are described
below:
i) Foreign exchange risk
The Group is exposed to the foreign exchange risk arising from financial instruments
denominated in currencies different from their functional currencies. To reduce this exposure,
the Group implanted a policy to hedge against the foreign exchange risk that establishes
exposure limits linked to this risk (Foreign Exchange Hedging Policy).
The treasury area’s procedures defined based on the current policy include monthly projection
and assessment of the Company’s and its subsidiaries’ foreign exchange exposure, on which
management’s decision-making is based.
Exchange rate Protection Policy considers the values of foreign currency receivables and
Payables balances of commitments already made and recorded in the financial statements from
the operations of the Company and its subsidiaries, as well as future cash flows, with an
average of six months, still not recorded in the balance sheet.
36
As of December 31, 2016 and December 31, 2015 the Group is basically exposed to risks of
fluctuations in the U.S. dollar, in addition, the non-controlling in Argentina is exposed to Real
currency. To reduce the currency exposure in Argentina, from May 2016, the Company began
to export to that subsidiary in US dollars. To hedge against foreign exchange exposures, the
Group and the subsidiaries contracts derivative (swaps) and non-deliverable forward (NDF)
transactions. The Foreign Exchange Hedging Policy establishes that the derivatives contracted
by the Group should limit loss due to exchange rate depreciation related to the net income
estimated for the current year considering the expected depreciation against the U.S. dollar.
This limit sets the cap on the maximum foreign exchange exposure that the Group can
undertake in relation to the U.S. dollar.
As of December 31, 2016, the Company’s and the consolidated balance sheets include
accounts denominated in foreign currency which, in the aggregate, represent net liabilities of
R$ 1,596,651 e R$ 1,658,689, respectively (in December, 31, 2015, R$ 2,666,160 and R$
2,782,054, respectively).These accounts are substantially represented by borrowings and
financing which, as of December 31, 2016 and December 31, 2015, are hedged by swap
arrangements.
Derivatives to hedge foreign exchange risk
The Company classifies derivatives into “financial”, “operating” and “others derivatives
financial instruments”. “Financial” derivatives include swaps or forwards contracted to hedge
against the foreign exchange risk associated with foreign-currency-denominated borrowings
and financing. “Operating” derivatives (usually forwards) include derivatives contracted to
hedge against the foreign exchange risk on the business’s operating cash flows. The
instruments classified under "other derivative financial instruments" are derivative of the
forwards type contracted to hedge the exchange rate risk related to the Company's cash in
relation to the firm commitment of additional acquisition of interest in a subsidiary abroad
(Emeis Holdings Pty Ltd). This transaction was settled on December 9, 2016, in connection
with the final exercise of stock options. And the flow of future investment commitments
(payment of capital) in subsidiaries abroad.
As of December 31, 2016, the Company had no "other derivative" or "operational" open-ended
operations.
As of December 31, 2016 outstanding swap and forward contracts, with maturities between
February 2017 and July 2021 were entered into the counterparties represented by the banks
Bank of America (41%), HSBC (22%), Scotiabank (24%) and Bank of Tokyo (13%) as
described below:
37
Financial derivatives – Company
Gain (Loss)
Notional Accrual Fair Value
(adjustment MTM)
Type of transaction 2016 2015 2016 2015 2016 2015 2016 2015
Swap contracts (1)

Asset position:
Long position-U.S. dollar 1,614,877 1,917,821 1,596,181 2,664,811 1,591,783 2,677,972 (4,398) 13,161
Liability position:
CDI floating rate:
Short position in CDI 1,614,877 1,917,821 1,655,051 1,973,902 1,661,647 1,985,329 6,596 11,427
Total net financial

derivatives: - - (58,870) 690,909 (69,864) 692,643 (10,994) 1,734
Financial derivatives - Consolidated
Gain (Loss)
(adjustment MTM)
Swap contracts (1)

Asset position:
Long position-U.S. dollar 1,679,243 1,993,560 1,658,714 2,781,786 1,652,797 2,792,986 (5,917) 11,200
Liability position:
CDI floating rate:
Short position in CDI 1,679,243 1,993,560 1,719,899 2,048,895 1,726,156 2,059,758 6,257 10,863
Total net financial

derivatives: - - (61,185) 732,891 (73,359) 733,228 (12,174) 337
(1) Swap transactions consist of swapping the exchange rate fluctuation for a percentage of the floating rate Interbank Deposit
Rate (CDI).
The notional amount represents the amounts of the contracted derivatives. Fair value refers to
the value of outstanding contracted derivatives recognized in balance sheets.
For derivatives maintained by the Group as of Dezember 31, 2016 and 2015, due to the fact
contracts are directly entered into with the financial institutions and not through São Paulo
Stock Exchange (BM&FBOVESPA), there are no margin calls deposited as guarantee of the
related transactions.
38
“Others derivative financial instruments” – company and consolidated:
In December 2016 the Company settled the derivative instruments denominated Non-
Deliverable Forward (NDF) with Bank of America in the amount of AU $ 155.2 million (AU
$ 102.4 million Australian net of the tax rate Of 34% of income tax and social contribution on
profit). The weighted average exchange rate contracted for these derivatives was R$ 2.9111 x
AU$ 1,0.
The Company entered into these transactions to hedge against foreign exchange risk on the
Company’s cash in connection with the firm commitment to purchase additional ownership
interest in a foreign subsidiary (Emeis Holdings Pty Ltd) and against P&L fluctuations - see
Note 19 (a). These transactions were not designated as hedge accounting, as defined in IAS
39/CPC 38 - Financial Instruments: Recognition and Measurement, since the hedged item
valuation methodology considers three elements: discount rate, foreign exchange rate and
EBITDA multiple. These derivatives are measured at fair value, gains and losses thereon are
recognized in the financial income (expenses) group (note 25).
Sensitivity analysis
For the sensitivity analysis of derivatives, the Company’s management understands it is

necessary to take into consideration corresponding assets and liabilities with exposure to
exchange rates recorded in the balance sheet, as presented in the table below:
Loans and financing registered in Brazil in foreign currency (note 15) (1,596,651) (1,658,689)
Receivables registered in Brazil in foreign currency - 9,380
Accounts payable registered in Brazil in foreign currencies (2,128) (4,429)
Value of the "financial" derivatives 1,596,181 1,658,714
Net exposure (2,598) 4,976
The tables below show the gain (loss) that would have been recognized in the subsequent
period, assuming that the current net foreign exchange exposure remains static, based on the
following scenarios:
Company
Company´s risk Probable scenario Scenario II Scenario III
Description
Us dollar
(55) (718) (1.381)
Net liability exposure appreciation
Consolidated
Company´s risk Probable scenario Scenario II Scenario III
Description
Us dollar
105 1,375 2,645
Net liability exposure appreciation
39
The probable scenario considers future U.S. dollar rates obtained at BM&FBOVESPA for the
maturity dates of the financial instruments exposed to foreign exchange risks that ranging from
(R$3.33/ US$1.00) to (R$4.99/US$1.00). Scenarios II and III consider a 25%
(R$4.16/US$1,00) and 50% (R$4.99/US$1.00), appreciation of U.S. dollar, respectively.
Probable scenarios II and III are presented as required by CVM Instruction 475/08. In
assessing possible changes in exchange rates, management uses the probable scenario, which
is being presented for compliance with IFRS 7 – Financial Instruments: Disclosures.
The Company and its subsidiaries do not use derivative financial instruments for speculative
purposes.
ii) Interest rate risk
The interest rate risk arises from investments and loans. Financial instruments issued at floating
rates expose the Group to cash flow risks associated with the interest rate. Financial instruments
issued at fixed rates expose the Group to fair value risks associated with the interest rate.
The Company’s cash flow risk associated with the interest rate arises from investments and
short- and long-term loans and financing issued at floating rates. The Company’s management
adopts the policy of maintaining its rates of exposure to asset and liability interest rates pegged
to floating rates. Short-term investments are adjusted by the Interbank Deposit Rate (CDI)
whereas borrowings and financing are adjusted based on the Long-term Interest Rate (TJLP),
CDI and fixed rates, according to the contracts made with the related financial institutions, and
trading securities with investors in this market.
Company management believes that there is low risk of significant changes in CDI and TJLP,
taking into consideration the prevailing monetary policy followed by the federal government.
Thus, it did not take out derivatives to hedge against this risk.
The Group contracts swap transactions to mitigate risks on borrowing and financing transactions
subject to an index other than CDI, TJLP or fixed rates, except for loans and financing contracted
at fixed rates at levels below the current TJLP.
On December 31, 2016, consolidated balance sheet includes loans issued at higher fixed rates
level TJLP represent a liability of R$5,046 (R$ 185,450 in December 31, 2015). Such funding
submitted in December 31, 2016 is protected derivative of the "swap".
Derivative instruments to hedge the risk of interest rate
On December 31, 2016 there is open a contract of "swap" maturing in August 2017 and was
concluded with the counterparty represented by Banco Santander (100%) and is composed.
40
Derivatives “swap” - consolidated
Gain (Loss) (adjustment

MTM)
swap” contracts (3):

Asset position:
Long position fixed rate 5,000 182,500 5,045 185,540 4,935 183,676 (110) (1,864)
Liabilities position:
CDI rate post fixed:
Short position in CDI 5,000 182,500 5,077 187,586 5,077 187,525 - (61)
Total net financial swaps:

- - (32) (2,046) (142) (3,849) (110) (1,803)
(2) The operations of financial "swap" involving the exchange of an interest rate pre-set by a related to a percentage of
the variation of the Interbank Deposit Correction - postfix CDI.
41
Sensitivity analysis
On December 31, 2016, there are loans and financing denominated in foreign currency and
issued at fixed rates under contract "swap ", changing the indexation of the liability to CDI
fluctuation. The Company is, therefore, exposed to CDI fluctuation. The table below presents
the exposure to interest rate risks of transactions pegged to CDI, including derivative
transactions:
Total borrowings and financing - in local currency(note 15) (1,866,036) (2,731,482)
Operating in foreign currency with derivatives pegged to CDI (*) (1,596,651) (1,658,689)
Short-term investments (notes 5 e 6) 1,171,111 2,095,919
Net exposure (2,291,576) (2,294,252)
(*) This refers to transactions involving CDI-backed derivatives to hedge the loans and financing arrangements raised in foreign currency
in Brazil.
The sensitivity analysis considers the exposure of borrowings and financing pegged to CDI
and TJLP rates, net of short-term investments, also pegged to the CDI rate (notes 5 and 6).
The tables below set out projected incremental gain (loss) that will be recognized in P&L for
the subsequent year, assuming that the current net liability exposure will remain unaltered and
the following scenarios:
Company
Company´s Probable
Scenario II Scenario III
Description risk scenario
Net liabilities Interest rate increase 15,809 (58,309) (132,426)
Consolidated
Company´s Probable Scenario
Scenario II
Description risk scenario III
Net liabilities Interest rate increase 15.820 (58.352) (132.525)
The probable scenario considers future interest rates obtained at BM&FBOVESPA for the
maturity dates of the financial instruments exposed to interest rate risks. Scenarios II and III
consider an increase in the interest rate of 25% (16.2% per year) and 50% (19.4% per year),
respectively, on the CDI rate of 12.9% per year.
Derivative instruments designated for hedge accounting
The Company performed formal designation of its operations subject to hedge accounting for
derivative financial instruments for hedging loans denominated in foreign currency,
documenting:
 The hedge relationship;

 The Company’s objective and risk management strategy in taking out the hedge
transaction;
42
 Identification of the financial instrument;

 The hedged item or hedge transaction;
 The nature of the risk to be hedged;
 Description of the hedge relationship;
 The statement of correlation between hedge and hedged item, where applicable; and
 The prospective statement of hedge effectiveness.
The positions of derivative financial instruments designated as outstanding cash flow hedge
on December 31, 2016 as set out below:
Instrument Designated as Cash Flow Hedge – Company
Others Comprehensive
income
Hedged Notional Notional Accrual Fair Total Total Loss
item currency value value Value (1) Loss (Gain) (Gain)
Currency swap -
Currency BRL 1,604,279 (62,984) (73,532) (10,548) (2,123)
US$/R$
Instrument Designated as Cash Flow Hedge – Consolidated
Others Comprehensive
income
Hedged Notional Notional Accrual Fair Total Loss in the
item currency value value Value (1) Loss (Gain) period
Currency swap -
Currency BRL 1,654,303 (70,739) (81,637) (10,898) (2,346)
US$/R$
(1) The method used by the Company to determine market value consists in calculating the future
value based on the contracted conditions and determines present value based on market curves
extracted from BM&FBOVESPA.
The Company designates as cash flow hedge derivative financial instruments used to offset
variations from exposure to exchange rate, in the market value of contracted debts not in the
functional currency.
The Company designates as cash flow hedge derivative financial instruments used to offset
variations arising from exchange exposure, in the market value of contracted debts, different
from the functional currency. On December 31, 2016, the instruments designated as cash flow
hedge totaled US$ 495,083 (four hundred and ninety-five million, eighty-three thousand) of
notional amount R$ 1,654,303. In addition, in the year ended December 31, 2016, we did not
record any losses related to the ineffective portion recognized in the income for the year.
b) Credit risk
Credit risk refers to risk of a counterparty not complying with its contract obligations, which
would result in financial losses for the Company. Sales of the Group are made to a great
number of sales representatives (Natura Beauty Consultants) and this risk is managed through
a strict credit granting process. The result of this management is reflected in the ‘Allowance
for doubtful accounts’, as explained in note 7.
43
The Group is also subject to credit risks related to financial instruments contracted for the
management of its business, primarily represented by cash and cash equivalents, short-term
investments and derivative instruments.
The Company believes that the credit risk of transactions with financial institutions is low, as
these are considered by the market as prime banks.
The Policy for Short-term Investments adopted by the Company’s management establishes
the financial institutions with which the Group can do business and defines fund allocation
limits and the amounts that may be invested in each of these financial institutions.
c) Liquidity risk
Effectively managing liquidity risk implies to maintain enough cash and marketable securities,
funds available through credit facilities used and the ability to settle market positions.
Management monitors the Company’s consolidated liquidity level considering the expected
cash flows against unused credit facilities the carrying amounts of financial liabilities are
measured at amortized cost, and their corresponding maturities are as follows:
Less than One to Two to More than Discount Carrying
Company as of December one year two years five years five years Total effect/MTM amount
31, 2016
Current:
Borrowings and financing 1,469,333 - - - 1,469,333 (32,130) 1,437,203
Trade payables 510.163 - - - 510,163 - 510,163
Financial instruments (58.870) (58,870) (10,994) (69,864)
Noncurrent: -
Borrowings and financing - 745,249 1,200,944 402,992 2,349,185 (323,700) 2,025,484
Less than One to Two to More than Discount Carrying

Consolidated as of December one year two years five years five years Total effect/MTM amount
31, 2016
Current:
Borrowings and financing 1,840,920 - - - 1,840,920 (76,432) 1,764,488
Trade payables - - - 814,939 - 814,939
Financial instruments (61,328) (61,328) (12,174) (73,502)
Noncurrent: -
Borrowings and financing - 1,169,717 1,370,238 567,744 3,107,699 (482,016) 2,625,683
4.3. Capital management
The Company’s objectives in managing its capital are to ensure that the Company is
continuously capable of offering return to its shareholders and benefits to other stakeholders,
and maintain an optimal capital structure to reduce this cost.
44
The Company monitors capital based on the financial leverage ratios. This ratio corresponds
to the net debt divided by the total capital. The net debt corresponds to total borrowings and
financings (including short- and long-term borrowings, as shown in the consolidated balance
sheet), deducted from cash and cash equivalents. Net debt as shown below includes
adjustments of derivative contracts to mitigate the foreign exchange risk.
The consolidated financial leverage ratios as of December 31, 2016 and December 31, 2015
are as follows:
2016 2015 2016 2015
Short- and long-term borrowings and

financing (note 15) 3,462,687 4,547,669 4,390,171 5,535,880
Derivatives “financial” and “swap” of
interest rate 69,864 (692,643) 73,502 (729,379)
Cash and cash equivalents and Short-term
investments (note 5 and 6, Except Bank
Deposit Certificates – Crer pra Ver) (1,210,999) (1,840,039) (2,278,588) (2,762,263)
Net debt 2,321,552 2,014,987 2,185,085 2,044,238
Shareholders’ equity 996,385 1,028,186 996,385 1,077,767

Financial leverage ratio 233,00% 195,97% 219,30% 189,67%
4.4. Fair Value Estimate

Financial instruments are measured at fair value at the end of the reporting period as prescribed
by CPC 40 – Financial Instruments: Disclosures and according to the following hierarchy:
 Level 1: Prices quoted (unadjusted) in active markets for identical assets or liabilities. A
market is considered active if quoted prices are readily and regularly available from an
exchange, dealer, broker, industry group, pricing service or regulatory agency, and those
prices represent actual and regularly occurring market transactions on an arm’s-length
basis.
 Level 2: Used for financial instruments that are not traded in active markets (for example,
over-the-counter derivatives) and whose fair value is determined using valuation
techniques that, in addition to the quoted prices, included in Level 1, use other inputs
adopted by the market for assets or liabilities, whether directly (i.e., prices) or indirectly
(i.e., derived from prices).
 Level 3: Inputs for assets or liabilities that are not based on the data adopted by the market
(i.e., unobservable inputs).
As of December 31, 2016 and December 31, 2015, the measurement of all the Company’s and
its subsidiaries’ derivatives falls under the Level 2 characteristics. The fair value of exchange
rate derivatives (swap and forwards) is determined based on the exchange rate at the end of
the reporting period, with the resulting amount being discounted to present value.
45
Fair values of financial instruments measured at amortized cost
Short-term investments
The carrying amounts of the short-term investments approximate their fair values as
transactions are conducted at floating interest rates and can be immediately redeemable.
Borrowings, financing and debentures
The carrying amounts of borrowings and financing, except those pegged to a fixed rate,
approximate their fair values as they are pegged to a floating rate, the CDI fluctuation. The
carrying amounts of financing pegged to TJLP approximate their fair values as the TJLP is
also pegged to CDI and is a floating rate.
The fair value of borrowings and financing contracted at fixed interest rates does not have
significant variation related to the book value disclosed in note 15.
Trade and other payables
It is estimated that the carrying amounts of trade receivables and trade payables approximate
their fair values in view of the short term of the transactions conducted.
The subsidiaries do not have any guarantee for overdue bonds.
Provision for acquisition of non-controlling interests
The amount of the estimated commitment of acquiring non-controlling interests, measured at

fair value at the acquisition date, is remeasured and its subsequent changes are recognized in
the income statement for the year.
5. CASH AND CASH EQUIVALENTS

2016 2015 2016 2015
Cash and banks 60,229 52,068 203,010 212,014

Bank certificates of deposit -CDB (a) 1,202 1,059 119,274 207,051
Repurchase agreements (b) - - 769,186 1,172,778
61,431 53,127 1,091,470 1,591,843
(a) At December 31, 2016, Investments in Bank Deposit Certificates are restated with average rate
of 101.2% of CDI (101% of CDI at December 31,2015) with daily maturity, redeemable by the
issuer, and with no significant impairment.
46
(b) Repurchase agreements are securities issued by banks with a commitment by the bank to
repurchase the security, and by the client to resell the security, at a fixed price (rate of interest)
and within a predetermined term, which are backed by public or private securities (depending on
the bank) and are registered with the CETIP.
6. SHORT TERM INVESTMENTS
2016 2015 2016 2015
Investments funds exclusive 1,149,568 1,786,912 - -

Investments funds - - 151,363 219,845
Certificates of deposits CDB (a) 20,341 21,416 20,341 21,416
Financial letters - - 743,047 728,656
Government security (LFT) - - 292,708 221,919
1,169,909 1,808,328 1,207,459 1,191,836
(a) Investment in Bank Deposit Certificates are restated with yield interest of 94.2% of CDI and are referring to the
amounts that will be given to Instituto Natura due to the sales of the Crer para ver products.
The Company concentrates most of investments in an exclusive fund investment. On December 31,
2016 and December 31, 2015 the companies Natura Cosméticos S.A , Natura Inovação e Tecnologia
de Produtos Ltda, Natura Logística e Serviços Ltda, and Indústria e Comércio de Cosméticos Natura
Ltda have interest in shares of the Fund Essential Investment and the value recorded is valued at fair
value through profit or loss.
The amount of shares held by the Company are disclosed under "Investment Fund Exclusive". The
investments in Investment Fund which the group has an exclusive interest (100 % of the shares)
were consolidated and the values of their portfolio were segregated by type of investment and
classified as cash equivalents or short term investments, according to the accounting practices
adopted by the Company.
The exclusive fund are as follow:
The Essential Investment Fund is a fund fixed income credit private management, administration
and custody of Itaú Unibanco. Eligible assets in the portfolio are: government securities, time
deposits, financial letters and repurchase agreements. There is no grace period for redemption of
shares that may be redeemed at any time yield.
Breakdown of the exclusive fund portfolio at December 31, 2016 is as follows:
Essencial
Floating rate bank certificates of deposits (CDBs) 118,127
Repurchase agreements 769,186
Financial letters 743,047
Government security (LFT) 292,708
1,923,068
47
7. TRADE RECEIVABLES
2016 2015 2016 2015
Trade receivables 943,839 773,763 1,194,846 1,032,699

Allowance for doubtful accounts (115,618) (96,646) (142,945) (123,686)
828,221 677,117 1,051,901 909,013
The aging list of trade receivables is as follows:
2016 2015 2016 2015
Current 777,278 625,896 962,643 799,950

Past due:
Up to 30 days 60,704 50,981 97,867 103,650
31 to 60 days 24,529 28,529 34,263 39,939
61 to 90 days 17,198 18,045 22,550 24,757
91 to 180 days 64,130 50,312 77,523 64,403
Allowance for doubtful accounts (115,618) (96,646) (142,945) (123,686)
828,221 677,117 1,051,901 909,013
The balance of trade receivables in Consolidated is basically denominated in Brazilian reais, and
approximately 81% of the outstanding balance as of December 31, 2016 (78% as of December 31,
2015), refers to real-denominated transactions. The remaining balance is denominated in several
currencies and refers to sales of foreign subsidiaries.
The changes in the allowance for doubtful accounts for the period ended December 31, 2016 and
2015 are as follows:
Balance at Write- Balance at Balance at Write- Balance at
2015 Additions (a) offs (b) 2016 2015 Additions (a) offs (b) 2016
(96,646) (230,749) 211,777 (115,618) (123,686) (287,279) 268,020 (142,945)
Balance at Write- Balance at Balance at Write- Balance at
2014 Additions (a) offs (b) 2015 2014 Additions (a) offs (b) 2015
(88,384) (143,090) 134,828 (96,646) (117,270) (163,403) 156,987 (123,686)
(a) Allowance recognized according to note 2.7
(b) Refers to accounts that are over 180 days past due that were written off due to uncollectible amounts.
48
The expense on the recognition of the allowance for doubtful accounts was recorded in ‘Selling
expenses’ in the income statement. When recovery of additional cash is less than probable, the
amounts credited to line item ‘Allowance for doubtful accounts’ are in general reversed against the
definite write-off of the receivable and is recorded in net income or loss.
Maximum exposure to credit risk at the reporting date is the carrying amount of each aging range,
net of the allowance for doubtful accounts, as shown in the aging list above. The Group does not
have any guarantee for past-due receivables.
8. INVENTORIES
2016 2015 2016 2015
Finished products 195,653 200,953 676,835 750,151

Raw materials and packaging - - 182,778 202,124
Promotional material 18,200 22,580 94,630 87,201
Work in progress - - 13,293 24,435
Allowance for losses (10,495) (15,420) (131,614) (100,236)
203,358 208,113 835,922 963,675
The changes in the allowance for inventory losses for the period ended December 31, 2016 and
2015 are as follows:
Reversals Write- Balance at Balance at Reversals Write- Balance at
Balance at 2015 (Additions)(a) off (b) 2016 2015 (Additions)(a) off (b) 2016
(15,420) 1,916 3,009 (10,495) (100,236) (119,103) 87,725 (131,614)
Reversals Write- Balance at Balance at Reversals Write- Balance at
Balance at 2014 (Additions)(a) off (b) 2015) 2014 (Additions)(a) off (b) 2015
(17.872) (5.936) 8.388 (15.420) (85.966) (89.382) 75.112 (100.236)
(a) Refer basically to the recognition of the allowance for losses due to discontinuation, expiration
and quality, to cover expected losses on the realization of inventories, pursuant to the Group’s
policy.
(b) Consist of write-offs of products discarded by the Company.
49
9. RECOVABLE TAXES
2016 2015 2016 2015
ICMS on purchases of goods 2,411 6,968 409,710 350,468

IVA to be offset on the acquisition of inputs - controlled
- - 26,548 30,213
abroad in the year
ICMS recoverable on tax incentives - Sponsorship 96 223 96 223
Taxes - foreign subsidiaries - - 1,906 2,022
ICMS on purchases of fixed assets 3,001 2,542 19,188 28,321
PIS and COFINS on purchases of fixed assets 31,055 31,633 37,046 38,123
PIS and COFINS on purchase of goods 21,586 21,684 21,590 21,684
PIS and COFINS resulting from win on a lawsuit (a) - - 7,670 7,670
IRPJ and CSLL 43,791 91,256 55,316 102,680
PIS, COFINS and CSLL - withheld at source 42 56 2,682 2,519
IPI recover 2,115 1,642 28,291 22,957
Others - 4 - 2,949
104,097 156,008 610,043 609,829
Current
Noncurrent 71,845 124,953 329,409 320,392
Taxes - foreign subsidiaries 32,252 31,055 280,634 289,437
(a) The amount shown relates to the recognition of tax credits of Social Integration Program - PIS
and Contribution to Social Security Financing - COFINS the lawsuit challenging the
constitutionality and legality of the tax base for calculating contributions cited, established by
Law No. 9.718/98. As the Company obtained authorization from the Federal Revenue of Brazil
to offset credits of the parent after the transit and trial of the case in 2012. The amounts referring
to the subsidiary will be maintained until authorization of the same nature be obtained.
10. INCOME TAX AND SOCIAL CONTRIBUTION
a) Deferred
Deferred Corporate Income Tax (IRPJ) and Social Contribution on Net Income (CSLL) result from
temporary differences in the Company and in its subsidiaries. For certain subsidiaries was also
recognized balance of deferred taxes on tax loss carryforwards. These credits are kept recorded in
noncurrent assets, the amounts are as follows:
50
Breakdown of deferred income tax and social contribution – Assets:

2016 2015 2016 2015
Tax loss carryforwards and CSLL tax loss 43,161 142,118 57,627 165,910
Allowance for doubtful accounts (note 7) 39,310 32,860 48,601 42,053
Allowance for losses on inventories realization (note 8) 3,568 5,243 44,749 34,080
Reserve for tax, civil and labor contingencies (note 18) 21,951 17,352 31,832 26,472
Non-inclusion of ICMS in the PIS and COFINS basis
(note 17.a) 845 789 101,053 85,727
Gains from changes in fair value of derivative instruments

23,754 (237,239) 24,991 (249,729)
(note 4.2 )
Provision for ICMS – ST (note 17.b) 56,608 27,692 56,608 27,692
Allowances for losses on advances to suppliers 1,875 2,405 1,875 2,405
Accrued benefits sharing and partnerships 14,057 10,578 14,057 10,578
Temporary differences of foreign subsidiaries - - 36,784 14,785
Provision for profit sharing 13,156 10,814 22,058 16,327
Depreciation rate adjustments to useful lives (59,335) (35,587) (104,140) (60,629)
Provision for interest – injunction (Interest - CNs) 28,643 18,347 28,643 18,347
Provision carbon credits 1,422 3,224 1,422 3,224
Profit on effects not eliminated in inventories - - 18,929 15,523
Provision for losses – property and intangible (note 14)
828 4,183 3,968 8,488
INSS with Suspended Liability (note 17) 2,854 1,578 8,560 5,940
IPI – Decree n° 8393/2015 48,364 18,287 50,169 19,805
Others expenses provision (a) 20,604 18,628 26,399 24,235
Other temporary differences 16,635 7,253 18,811 1,375
278,300 48,525 492,996 212,608
(a) This refers to recognition of a provision in line with the accrual basis of accounting to reflect
actual expenses incurred over the year, but still unbilled by suppliers.
Breakdown of deferred income tax and social contribution– Liabilities:
Consolidated
2016 2015
Fair value of identifiable assets – Emeis Holding Pty Ltd. 23,775 30,205
Other temporary differences - 3,868
Total 23,775 34,073
51
Management, based on projections of future taxable income, estimates that the recorded tax credits
will be fully realized within five years.
The management expectative is that tax credits will be realized as follows:

2016 196,055 343,201

2017 39,966 71,929
2018 7,231 13,343
2019 and thereafter 35,048 64,523
278,300 492,996
With respect to the Company’s foreign subsidiaries, listed below do not record tax credits on tax
loss carry forwards and temporary differences in their financial statements due to the absence of a
history of taxable income and taxable income projections for the coming fiscal years.
As of December 31, 2016, tax credits calculated at the prevailing tax rates in the countries where
the subsidiaries are located, are as follows:
Tax loss carry forwards: R$
Mexico 189,766
Australia (Substantially by operations in the US and Brazil) 12,590
France 257,442
Tax credits on tax loss carry forwards generated by the subsidiaries can be carried forward
indefinitely, except for the subsidiary in Mexico, which expire the tax loss carry forwards as follows:
Mexico – R$
2017 -
2018 26,930
2019 to 2022 162,836
189,766
52
b) Reconciliation of income tax and social contribution
2016 2015 2016 2015
Income before income tax and social
312,296 689,619 426,859 875,370
contribution
Income tax and social contribution at the
(106,181) (234,470) (145,132) (297,626)
rate of 34%
Technological research and innovation
18,222 14,104 18,222 14,104
benefit - Law 11196/05 (a)
Tax benefits 3,990 4,341 5,840 6,315
Equity in investees (note 13) 73,502 80,105 - -
Tax impact from subsidiary abroad - - 678 (19,863)
Tax Benefits of interest on equity (IOE) 26,929 16,780 26,929 16,780
Fair value of restatement of the firm
commitment to purchase additional
(19,744) (39,154) (19,744) (39,154)
ownership interest in Emeis Holding Pty
Ltd.(b)
Other permanent differences (12,315) (17,812) (5,414) (33,194)
Income tax and social contribution
(15,597) (176,106) (118,621) (352,638)
expenses
Income tax and social contribution -

(244,650) (218,879) (404,039) (384,563)
current
Income tax and social contribution -
229,053 42,773 285,418 31,925
deferred
Effective rate - % 5,0 25,5 27,8 40,3
(a) Refers to the tax benefit established by Law 11.196/05, which allows for the direct deduction from
the calculation of taxable income and the social contribution tax basis of the amount corresponding
to 60% of the total expenses on technological research and innovation, observing the rules
established in said Law.
(b) Refers to the permanent tax effect on the restatement of the firm commitment of additional
acquisition of shares of Emeis Holding Pty Ltd.
The changes in income tax and social contribution for the period ended in December 31, 2016 and 2015
were as follows:
Charged/ Transfer between

Charged/ (Charged)/ (Charged)/Cre income tax and
(Credit)
(Credit) to Credit Other dit Other social contribution
2015 2016 2015 to profit or 2016
profit or loss comprehensive comprehensiv deferred tax
loss liabilities and
income e income
assets
48,525 229,053 722 278,300 212,608 284,137 798 (4,547) 492,996
53
Charged/ (Charged)/ Charged/ (Charged)/ Credit

(Credit) to Credit Other (Credit) Other
2014 2015 2014 2015
profit or comprehensive to profit or comprehensive
loss income loss income
6,222 42,773 (470) 48,525 147,763 65,998 (1,153) 212,608
The changes in deferred liabilities income tax and social contribution for the period ended in
December 31, 2016 in consolidated were as follows:
Consolidated
Transfer between
(Charged)/Credit
income tax and social
Charged/(Credit) Other comprehensive
2015 contribution deferred 2016
to profit or loss income including
tax liabilities and
exchange rate
assets
(34.073) 1,281 4,547 4,470 (23,775)
11. ESCROW DEPOSITS
Represent Group’s restricted assets related to amounts deposited and held by the courts until the
litigation to which they are linked is resolved.
The Group’s escrow deposits as of December 31, 2016 and December 31, 2015 are as follows:
2016 2015 2016 2015
Unaccrued tax lawsuits(i) 155,575 141,457 161,833 147,287

Accrued tax lawsuits (ii) 84,620 88,292 128,727 128,439
Unaccrued civil lawsuits 1,287 1,337 1,591 1,575
Accrued civil lawsuits (note 18) 757 777 882 1,067
Unaccrued labor lawsuits 3,663 3,140 5,035 4,602
Accrued labor lawsuits (note 18) 3,987 3,495 5,006 4,825

Total escrow deposits 249,889 238,498 303,074 287,795
(i) The proceedings related to these judicial deposits basically refer to the sum of amounts
disclosed in ICMS – ST, note 18.b)- (loss reasonably and remote).
(ii) The proceedings related to these judicial deposits basically refer to the sum of amounts
disclosed in note 17, item (a), (b) “INSS – Suspended Enforceability” and the amount
accrued in the note 18.
54
12. OTHER CURRENT AND NON CURRENT ASSETS
2016 2015 2016 2015
Marketing and advertising advances 84,480 94,610 99,977 102,753
Supplier advances 141,546 101,776 144,377 122,072
Employee advances 2,698 3,207 5,602 11,731
Rent advances - - 19,205 19,132
Insurance 4,241 2,968 7,240 6,866
Import taxes - 325 8,523 18,973
Assets held for sale (a) 160 - 160 7,000
Carbon credits (b) 8,998 7,078 8,998 7,078
Other 2,266 316 15,690 29,449
244,389 210,280 309,772 325,054
Current 228,629 202,780 286,739 307,450

Non-current 15,760 7,500 23,033 17,604
(a) This balance refers to assets which the company intends to sell one of the next 12 months as CPC
31-non-current assets held for sale (IFRS 5). These assets are measured at the lower value between
the carrying amount and fair value less costs to sell. The company classifies these assets under
this heading by considering selling highly probable and the assets are available for immediate sale
in its present condition. Once classified as intended for sale, the assets are not depreciated or
amortized.
(b) Refers to Carbon Neutral program, disclosed in note 2.9.
13. INVESTIMENTS
Company
2016 2015
Investments 2,104,217 2,001,232

Provision for losses on investments in subsidiaries - (21,519)
Investments in subsidiaries 2,104,217 1,979,713
55
Information and changes in the balances for the period ended in December 31,2016
Natura Natura
Indústria e Natura Natura Inovação e Natura Natura (Brasil) Natura
Comércio de Natura Natura Cosméticos Cosméticos Tecnologia Cosméticos de Cosméticos International Natura Biosphera Natura Natura
Cosméticos Cosméticos Cosméticos S.A. - C.A. - de Produtos México S.A. Ltda. - B.V. - Cosméticos Franqueadora Comercia Brazil Pty
Natura Ltda. (*) S.A. - Chile S.A. - Peru Argentina Venezuela Ltda. (*) (*) Colômbia Holanda (*) España S.L. Ltda. l Ltda. Ltd (*) Total
Equity interest 99,99% 99,99% 99,99% 99,99% 99,99% 99,99% 99,99% 99,99% 100,00% 100,00% 99,99% 99,99% 100,00%
Subsidiaries' shareholders’ equity 1,357,055 124,497 14,929 192,701 229 37,930 10,605 41,190 8,639 603 4,766 16,044 325,258 2,134,446
Interest in shareholders’ equity 1,326,869 124,485 14,928 192,682 229 37,926 10,604 41,186 8,639 603 4,766 16,042 325,258 2,104,217
Subsidiaries' net income (loss) for the period 65,066 35,371 9,182 45,008 - 35,632 5,203 18,789 (36,380) - (5,833) (58) 44,225 216,205
Carrying amount of investments

Balance as of December 31, 2014 1,159,394 76,653 14,030 135,115 297 38,686 1,788 11,900 14,209 603 (585) - 179,792 1,631,882
Equity in investees 92,899 14,854 (9,958) 111,678 - 36,025 (23,108) 12,168 (27,617) - (3,420) - 32,082 235,603
Exchange rate change and other adjustments on
the translation of investments in foreign
subsidiaries 2 19,946 3,898 (27,520) 139 1,588 (199) 2,102 3,510 - 3 - 52,964 56,433
Company’s contribution to the stock options
plan of subsidiaries’ executives and other
reserves 1,018 - - - - 735 - - - - - - - 1,753
Gain/Losses actuarial (3,413) - - - - 615 - - - - - - - (2,798)
Effects of hedge accounting (net tax) 1,325 - - - - - - - - - - - - 1,325
Effects of changes from participation on indirect
subsidiary - - - - - - - - - - - - (53,873) (53,873)
Effects of changes from the the company on the
fair value of net assets acquired by Emeis
Holding Pty Ltd. - - - - - - - - - - - - 8,651 8,651
Capital increases - - - - - - - - 24,196 - 10,400 - 66,141 100,737
Balance as of December 31, 2015 1,251,225 111,453 7,970 219,273 436 77,649 (21,519) 26,170 14,298 603 6,398 - 285,757 1,979,713
Equity in investees 65,059 35,367 9,181 45,003 - 35,628 5,202 18,787 (36,380) - (5,832) (58) 44,225 216,182
Exchange rate change and other adjustments on
the translation of investments in foreign
subsidiaries 8 (15,272) (2,223) (71,594) (207) (1,251) 2,840 (3,771) (1,588) - - - (67,662) (160,720)
Company’s contribution to the stock options
plan of subsidiaries’ executives and other
reserves 1,207 - - - - (482) - - - - - - - 725
Gain/Losses actuarial 9,517 - - - - (942) - - - - - - - 8,575
Effects of hedge accounting (net tax) (147) - - - - - - - - - - - - (147)
Effect of change of interest in indirect subsidiary
- - - - - - - - - - - - (207,983) (207,983)
Effect of change in the Company's interest in the
fair value of the net assets acquired of Emeis
Holding Pty Ltd.
- - - - - - - - - - - - 11,672 11,672
Dividends distribution - (7,063) - - - (72,676) - - - - - - - (79,739)
Capital increases - - - - - - 24,081 - 32,309 - 4,200 16,100 259,249 335,939
Balance as of December 3, 2016 1,326,869 124,485 14,928 192,682 229 37,926 10,604 41,186 8,639 603 4,766 16,042 325,258 2,104,217
(*) Consolidated information of the following companies:

Indústria e Comércio de Cosméticos Natura Ltda. - Indústria e Comércio de Cosméticos Natura Ltda. e Natura Logística e Serviços Ltda.
Natura Cosméticos de México S.A: Natura Cosméticos y Servicios de México, S.A. de C.V., Natura Cosméticos de Mexico, S.A. de C.V. e Natura Distribuidora de Mexico, S.A. de C.V.
Natura (Brasil) International B.V. - Holanda: Natura (Brasil) International B.V. (Holanda), Natura Brasil Inc. (EUA - Delaware), Natura International Inc. (EUA - Nova York), Natura Europa SAS (França)
Natura Brazil Pty. Ltd.: Natura Brazil Pty. Ltd., Natura Cosmetics Australia Pty. Ltd. e Emeis Holdings Pty. Ltd.
Natura Inovação e Tecnologia de Produtos Ltda.: Natura Inovação e Tecnologia de Produtos Ltda. e Natura Innovation et Technologie de Produits SAS. - França
56
14. PROPERTY, PLANT AND EQUIPAMENT AND INTANGIBLE ASSETS
Property, plant and equipament
Company
Weighted Transfers
average annual (fixed and
depreciation rate intangible Others
-% 2015 Additions Write-offs assets) changes 2016
Cost Value:
Vehicles 33 43,855 10,344 (14,062) - (177) 39,960
Machinery and
equipment 7 178,816 2,446 (2,314) 1,837 - 180,785
Improvements in third
party properties (a) 12 69,686 411 (11,421) 8,689 - 67,365
Buildings 3 331,823 - - - - 331,823
Furniture and fixtures 7 14,030 186 (1,735) 774 (102) 13,153
Properties - 4,413 - - - - 4,413
IT equipment 20 95,341 7,173 (3,269) 25,984 (1,251) 123,978
Projects in progress - 8,071 45,376 (763) (24,143) (6,778) 21,763
Provision for losses - (12,303) (316) - - 10,183 (2,436)
Total cost value 733,732 65,620 (33,564) 13,141 1,875 780,804
Depreciation Value:
Vehicles 33 (18,808) (8,693) 7,664 - 1,822 (18,015)

Machinery and 7
equipment (44,432) (11,918) 470 - - (55,880)
Improvements in third 12
party properties (a) (22,754) (4,432) 5,144 - - (22,042)
Buildings 3 (18,873) (6,005) - - - (24,878)
Furniture and fixtures 7 (3,731) (826) 654 - 38 (3,865)
IT Equipment 20 (67,029) (16,389) 3,082 684 22 (79,630)
Total depreciation (175,627) (48,263) 17,014 684 1,882 (204,310)
Total 558,105 17,357 (16,550) 13,825 3,757 576,494
57
Consolidated
Weighted Transfers
average annual (fixed and
depreciation intangible
rate - % 2015 Additions Write-offs assets) Others changes 2016
Cost Value:
Vehicles 33 75,079 24,265 (21,384) 4,845 (6,591) 76,214
Templates 33 228,576 1,538 (14,237) 3,817 (18) 219,676
Tools and accessories 8 45,642 38 (1,235) (41,237) (233) 2,975
Facilities 6 256,580 2,538 (145) 27,713 (1,603) 285,083
Machinery and 7
equipment 767,012 13,165 (36,467) 58,310 (480) 801,540
party properties (a) 158,058 21,743 (24,167) 73,105 (18,329) 210,410
Buildings 3 758,645 247 - - - 758,892
Furniture and fixtures 7 60,350 7,284 (4,235) 10,215 (6,889) 66,725
Properties - 30,525 - - - - 30,525
IT equipment 20 138,525 15,936 (7,909) 35,784 (7,098) 175,238
Projects in progress - 142,936 121,422 (809) (167,113) (16,867) 79,569
Provision for losses - (24,965) (316) - - 13,609 (11,672)
Total cost value 2,636,963 207,860 (110,588) 5,439 (44,499) 2,695,175
Depreciation value:
Vehicles 33 (29,282) (15,652) 12,050 (2,971) 4,409 (31,446)

Templates 33 (170,542) (27,373) 13,872 26 17 (184,000)
Tools and accessories 8 (25,696) (448) 1,235 22,135 789 (1,985)
Facilities 6 (94,884) (13,204) 106 (7,040) 1,128 (113,894)
Machinery and 7
equipment (275,723) (49,265) 28,080 5,593 1,840 (289,475)
party properties (a) (68,872) (30,198) 15,804 (11,827) 10,957 (84,136)
Buildings 3 (107,698) (16,203) - (1) 7 (123,895)
Furniture and fixtures 7 (18,539) (8,505) 3,016 (3,727) 3,065 (24,690)
IT equiment 20 (93,377) (23,652) 7,373 (2,044) 4,734 (106,966)
Total depreciation (884,613) (184,500) 81,536 144 26,946 (960,487)
Total 1,752,350 23,360 (29,052) 5,583 (17,553) 1,734,688
Intangible
Company
Weighted
average
annual Transfers (fixed
depreciation and intangible
rate - % 2015 Additions Write-offs assets) Others changes 2016
Cost Value:
Software and others 10 665,215 80,205 (234) (13,141) 284 732,329
Total cost value 665,215 80,205 (234) (13,141) 284 732,329
Amortization Value:
Software and others 10 (164,724) (52,633) - (684) (5,739) (223,780)
Total amortization value (164,724) (52,633) - (684) (5,739) (223,780)
Total 500,491 27,572 (234) (13,825) (5,455) 508,549
58
Consolidated
Weighted Transfers
average annual (fixed and Others changes
2015 Additions Write-offs 2016
amortization intangible including
rate - % assets) exchange rate
Cost Value:
Software and others 10 821,976 93,648 (150) (15,778) (12,587) 887,109

Trademarks and 4
patents (d) 112,440 632 - 8,314 (21,916) 99,470
Goodwill Emeis
-
(Brazil PTY) (b) 101,003 - - (1) (17,601) 83,401
Relationship with clients (d) 11 1,814 - - - (316) 1,498
Fundo de Comércio
5,596 3,359 - 2,026 (3,409) 7,572
Total cost value 1,042,829 97,639 (150) (5,439) (55,829) 1,079,050
Amortization Value:
Software and others 10 (213,034) (72,088) 7 2,897 5,394 (276,824)
Trademarks and
patents (d) 4 (12,743) (3,395) - (3,016) 1,831 (17,323)
Relationship with clients (d) 11 (571) (788) - (25) 735 (649)
Total amortization (226,348) (76,271) 7 (144) 7,960 (294,796)
Total 816,481 21,368 (143) (5,583) (47,869) 784,254
(a) The amortization rates take into consideration the lease terms of leased properties, which range
from three to fifteen years.
(b) Goodwill on the acquisition of Emeis Holdings Pty Ltd. Management reviewed the potential
impairment of the goodwill recorded using the discounted cash flow methodology, and no
impairment loss was identified. The value in use determination process involves assumptions,
judgments and estimates on cash flows, such as revenue growth rates, costs and expenses,
estimates of future investments, working capital, perpetuity and discount rates. This is in line with
paragraph 35 of CPC 01 R1 - Impairment of Assets. All the assumptions used are described below:
(i) Discount rate of future cash flows - 14.6% p.a. According to Management's assessment, this
is a conservative percentage that reflects the weighted cost of capital;
(ii) 5-year cash flow projection with a 2.0% perpetuity rate;
(iii) Revenue growth: based on the projection of new stores opening in already established
markets and also in new geographies within Asia, America and Europe;
(iv) Change in operating income: considers the company's historical margin, estimated inflation
in key global markets, and incremental expenses due to the opening of new stores.
(v) Investments: projects already in progress and new investments were considered, in line with
the strategy of growth and expansion in the global market;
(c) The amount of the purchase of a commercial location where Natura Comercial and Natura Europa
SAS - France operates is supported by an appraisal report issued by independent appraisers,
attributable to the fact that it is an intangible, marketable asset, the value of which does not decrease
over time.
59
(d) The balances of intangible assets and liabilities identified in the business combinations related to
entities located abroad must be expressed in the functional currency of the entity abroad and,
consequently, must be translated, at every closing date, at the closing exchange rate of functional
currency the company.
Additional information on property, plant and equipment:
a) Assets pledged as collateral
As of December 31, 2016, the Company and its subsidiaries had property, plant and equipment as
an attachment in defense of legal proceedings in the amount of R $ 2,416, consisting substantially
of molds and land.
b) Leases
As of December 31, 2016, the amount recorder under “Buildings” arising from lease transactions
totaling R$ 371,828 (Consolidated) (R$382,397 as of December 31, 2015 – Consolidated) and the
balance of lease payables, classified in line item “Borrowings and financing” (note 15) totals
R$437,274 (Consolidated) (R$435,313 as of December 31, 2015 – Consolidated).
There was no capitalization of charges arising from the leasing transactions in the period ended
December 31, 2016.
15. BORROWINGS AND FINANCING
2016 2015 2016 2015 Reference
Local Currency
FINEP (Financing Agency for Studies and projects) - - 149.916 160.752 A
Debentures 1.461.237 1.461.395 1.461.237 1.461.395 B
BNDES 37.944 57.925 118.497 170.300 C
BNDES EXIM - - 298.011 - D
Working capital / NCE - - 40.502 256.125 E
BNDES – FINAME 1.126 1.754 8.313 13.592 F
Financial lease (Note 14.b) 365.729 360.435 437.274 435.313 G
FINEP (Grants and Government Assistance) - - - 11
International operation – Peru - - 48.392 66.879 H
International operation – Mexico - - 64.661 96.007 I
International operation – Australia - - 67.123 62.085 J
International operation - Colombia - - 37.556 31.367 K
Total in local currency 1.866.036 1.881.509 2.731.482 2.753.826
1.866.036 1.881.509 2.731.482 2.753.826
Foreign Currency
BNDES 12.629 21.845 31.985 51.628 L
Resolution 4131/62 1.584.022 2.644.315 1.626.704 2.730.426 M
Total in foreign currency 1.596.651 2.666.160 1.658.689 2.782.054
Grand total 3.462.687 4.547.669 4.390.171 5.535.880
Current 1.437.203 1.624.686 1.764.488 2.161.383

Non Current 2.025.484 2.922.983 2.625.683 3.374.497
60
Reference Currency Maturuty Charges Guarantees

A Real May ,2019 and Interest of 5% p.y for the installment maturing in Guarantee of Natura Cosméticos S.A.
June, 2023 2019 and 3.5% p.y for the installment
maturing in june,2023;
B Real February, 2019 Interest o107% to 108% % of CDI maturing in None
February,2017, February,2018 and February,
2019;
C Real Through TJLP + interest of 0,5% p.y. to 3.96% p.y. and Bank guarantee and financial covenants to
December, contractos of 3.5% p.y. a 5% p.y.(d) contracts maturity in 2020
2021
D Real June, 2018 For 30% of the credit facility, SELIC rate + 0.4% Guarantee of Natura Cosméticos S.A.
p.a.; for 70% of the facility, Long-Term
Interest Rate (TJLP). Both facilities further
include the BNDES basic remuneration (2%
p.a.) and the Intermediary Bank remuneration.
E Real Through Interest of 8% p.y. (c) and Interest of 107% of Guarantee of Natura Cosméticos S.A.
August,2017 CDI (c)
F Real Through Interest of 4.5% p.y. + TJLP for contracts up to Alienation chattel, promissory notes and
June,2019 2012 and for contracts from 2013 to 3% p.y. Guarantee of Natura Cosméticos S.A.
(PSI) (d); Contracts August,2014 to 6% p.y
G Real Through Interest of 9%py + IPCA (b) Alienation chattel of leases contracts.
August,2026
H Novo sol Through Interest of 6.3% p.y. Guarantee of Natura Cosméticos S.A.
March,2016
I Peso Mexicano Through June, Interest of 0,98% a.a. to 1,2% p.y. + TIIE (e) Guarantee of Natura Cosméticos S.A.
2016
J Australian December, 2017 BBSY + interest 1% and Libor + interest 1%. (f) Bank guarantee
dollar
K Peso Through Interest of 8.3%py Guarantee of Natura Cosméticos S.A.
Colombiano March,2016
L Dollar October, 2020 Exchange fluctuation + interest of 1.8% p.y. to Guarantee of Natura Cosméticos S.A. and bank
2,3% p.y + Resolution 635 (a) guarantee
M Dollar Through Exchange fluctuation + Libor + Over Libor of Guarantee of Indústria e Comércio de
may,2018 1.32% p.y. to 2,90% p.y. (a) Cosméticos Natura Ltda.
(a) Loans and financing for which swap contracts (CDI) were entered into.
(b) IPCA – Consumer price index expanded
(c) Loans for which the financial instruments of the type "swap" with the exchange of fixed rate for CDI were hired.
(d) PSI-Investment Support Program.
(e) TIIE-interest rate of interbank equilibrium Mexico
(f) BBSY - Bank Bill Swap Bid Rate
Maturities of non-current liabilities are as follows:
2016 2015 2016 2015
2018 719,139 1,348,209 1,109,594 1,512,462

2019 1,039,265 329,512 1,071,855 381,556
2020 43,459 1,041,225 101,995 1,110,143
2021 em diante 223,621 204,037 342,239 370,336
2,025,484 2,922,983 2,625,683 3,374,497
61
A description of the outstanding bank loan agreements is as follows:

a) Description on bank loans
1. Financing agreement with the BNDES (National Bank for Economic and Social
Development)
The Company and its subsidiaries Indústria e Comércio de Cosméticos Natura Ltda. and
Natura Inovação e Tecnologia de Produtos Ltda. have credit facility agreements with the
BNDES to facilitate direct investments in the Company and its subsidiaries in order to
improve certain product lines, train research and development employees, optimize in the
Cajamar, SP industrial facilities, build new distribution centers an recently the deployment
of an industrial plant in Benevides, Pará and investments at a distribution center in Parque
Anhanguera in São Paulo, and projects related to digital accessibility.
2. Export Financing - BNDES Exim
The Company benefits from a credit facility taken out from BNDES known as BNDES
Exim, a loan to finance production of goods and services for export under pre-shipment
mode. The loaned amount is transferred through credit granting to subsidiary Indústria e
Comércio de Cosméticos Natura Ltda., generating receiving rights to the financial
institution accredited as financial agent, in this case, Banco Alfa de Investimentos S.A. and
Banco Santander S.A. . These financing transactions engaged referred to banks and
subsidiary Indústria e Comércio de Cosméticos Natura Ltda. The contracts executed are
secured by the Company collateral signatures. In addition, the Company and its subsidiaries
undertook to comply with the provisions applicable to BNDES contracts.
3. Financing agreement with the FINEP
The subsidiary Natura Inovação e Tecnologia de Produtos Ltda. has innovation programs
aimed at the development and acquisition of new technologies by means of partnerships
with universities and research centers in Brazil and abroad. These innovation programs have
the support of FINEP’s research and technological development incentive programs, which
facilitates and/or co-finances equipment, scientific grants and research material for the
participating universities.
4. Machinery and Equipment Financing - FINAME

The Company benefits from a credit facility with the BNDES, related to FINAME
onlendings, intended to finance the purchase of new machinery and equipment
manufactured in Brazil. Said onlending is carried out by granting credit to subsidiary
Indústria e Comércio de Cosméticos Natura Ltda., granting rights to receivables to the
financial institution accredited as a financing agent, usually Banco Itaú Unibanco S.A. and
Banco do Brasil S.A., which enters into such said financing with Indústria e Comércio de
Cosméticos Natura Ltda.
These agreements are collateralized by assigning the fiduciary ownership of the assets
described in the related agreements. The subsidiary Indústria e Comércio de Cosméticos
Natura Ltda. is the trustee and the Company is the guarantor of these assets. In addition, the
Group is required to meet the Provisions Applicable to BNDES Agreements and the General
Regulatory Terms and Conditions of FINAME-related Transactions.
62
5. Resolution nº 4,131/62
Bank Credit Note - Onlending of funds raised abroad under law nº 4,131/62, through
financial institutions due to rates which under favorable under the circumstances. Funds
raised in this operation aim at increasing Company working capital.
6. NCE
Export Note (“Nota de Crédito à Exportação”) – Funds for use as working capital for
export purposes.
7. Debentures
On February 25, 2014, the CIA conducted the 5th issue of simple debentures, not
convertible into shares, nominative and, unsecured, Natura Cosmetics SA, amounting to R$
600 million. 60,000 debentures were issued, of which 20,000 debentures allotted in 1st
grade, due on February 25, 2017, 20,000 Debentures allocated in the 2nd series, due on
February 25, 2018, and 20,000 allocated debentures in 3rd grade, due on February 25, 2019,
and remuneration corresponding to 107.00%, 107.5% and 108% of the accumulated
variation of the average daily Interbank Deposits - DI, respectively.
On March 16, 2015, the Company issued the 6th series of junior unsecured, registered
debentures, not convertible into shares of Natura Cosméticos S.A., amounting to R$ 800
million. The Company issued 80,000 debentures, 40,000 (forty thousand) of which were
allocated in the 1st series, maturing on March 16, 2018, 25,000 (twenty-five thousand) of
which were allocated in the 2nd series, maturing on March 16, 2019, and 15,000 (fifteen
thousand) of which were allocated in the 3rd series, maturing on March 16, 2020,
remunerated at 107%, 108.25% and 109% respectively, of the accumulated variation of the
average daily rate of Interbank Deposits (DI).
b) Finance lease obligations

Financial obligations are broken down as follows:
2016 2015 2016 2015
Gross finance lease obligations - minimum lease payments:
Less than one year 52,820 49,496 65,090 60,962
More than one year and less than five years 237,897 226,618 292,663 279,939
More than five years 402,991 465,651 522,959 603,024
693,708 741,765 880,712 943,925
Future financing charges on finance leases (327,979) (381,330) (443,438) (508,612)
Financial lease obligations - accounting balance 365,729 360,435 437,274 435,313

Accounting balance of property, plant and equipment 312,632 318,304 371,828 382,397
63
c) Contract Covenants
On December 31, 2016 and December 31, 2015, the majority of loans and financing held by the
Company and its subsidiaries contract does not contain restrictive covenants that establish
obligations regarding the maintenance of financial ratios by the Company and its subsidiaries.
Contracts with BNDES from July 2011 have restrictive covenants establishing the following
financial indicators:
- EBITDA margin exceeding 15%; and
- Net debt / EBITDA less than or equal to 2.5 (two point five decimal).
On December 31, 2016, the Company had fully complied with all such covenants.
With respect to non-financial covenants (when applicable), they are reflected in contracts in
market standards and do not represent a risk to the Company
16. TRADE AND OTHER PAYABLES
2016 2015 2016 2015
Domestic trade payables 249,087 215,981 703,473 669,228

Foreign trade payables (a) 2,128 9,703 4,429 30,077
“Drawn risk” operation (b) 16,865 4,416 107,037 103,582
268,080 230,100 814,939 802,887
(a) Refer mostly to US dollar-denominated amounts.
(b) The Company and its subsidiaries have entered into contracts with Banco Itaú Unibanco S.A.
for structuring, together with its major suppliers, the so-called “drawn risk” operation, wherein
suppliers transfer the right to receive their trade notes to the Bank, which, in its turn, will become
the creditor of the operation. This operation did not significantly change the previously agreed-
upon terms, prices and conditions on performing a thorough analysis of suppliers by category.
As such, the Company and its subsidiaries disclose this operation under the heading Trade and
other payables.
64
17. TAX PAYBLES
2016 2015 2016 2015
Taxes on revenue (PIS/COFINS) (judicial remedy) (a) 2,484 2,321 297,216 252,138
Ordinary ICMS 129,504 158,437 129,975 158,464
ICMS ST to payable (b) 175,086 81,445 175,086 81,445
IRPJ and CSLL to payable 50,998 117,280 103,322 189,363
IRPJ and CSLL (injunction) (c) 342,288 268,712 342,289 268,712
Taxas on revenue - foreign subsidiaries - - 31,150 38,351
IPI (preliminary injuction) 142,246 53,785 147,556 58,249
INSS – suspension of the enforceability 8,393 4,461 25,178 17,469
UFIR adjustment to federal taxes - 2,102 - 2,144
Action for annulment of INSS debt - 3,810 - 3,810
Withholding PIS/COFINS/CSLL 16,316 14,997 36,250 24,579
TAX- subsidiaries abroad - - 21,563 38,226
Service tax (ISS and INSS) 398 525 3,359 2,755
867,713 707,875 1,312,944 1,135,705
Escrow deposits (note 11) (71,209) (78,501) (114,559) (117,949)
Current 687,223 629,374 1,075,431 1,047,961

Non current 180,490 78,501 237,513 87,744
(a) The Company and its subsidiary Indústria e Comércio de Cosméticos Natura Ltda. are
challenging in court the inclusion of ICMS in the tax basis of Integration Program Tax on
Revenue (PIS) and Social Security Funding Tax on Revenue (COFINS). On June 2007, the
Company and its subsidiary were authorized by the court to pay PIS and COFINS without the
inclusion of ICMS in their tax basis, starting April 2007. The balances recognized as of
December 31, 2016 refer to the unpaid amounts of PIS and COFINS, from April 2007 to
December 31, 2016, the collection of which is on hold. Part of the balance, in the adjusted
amount of R$ 38,690 is deposited in escrow related to the consolidated.
(b) It refers to the sum of ICMS – ST amounts, which are deposited with the courts. The amount of
unpaid ICMS-ST is being discussed in court by the Company and, in certain cases, is monthly
deposited with the courts, as mentioned in Note 18.(b) (contingent liabilities - risk of loss
assessed as possible).
(c) On February 4, 2009, the Company filed for a preliminary injunction, later on confirmed by a
decision that suspended enforceability of income and social contribution taxes levied on any
amounts received as arrears interest on late payment of contractual liabilities in connection with
sales operations to Natura Consultants. The appeal lodged by Federal Government is pending
judgment.
(d) The Company and its subsidiary, Indústria e Comércio de Cosméticos Natura Ltda., In the
operations in which it acts exclusively as distributor, judicially discuss the condition brought by
Decree No. 8,393 / 2015, which equated the industrial one, for purposes of tax incidence On
Industrialized Products - IPI, interdependent wholesale establishments that market products
provided for in said legal provision. The balances recorded as of December 31, 2016 refer to
amounts not colected under IPI, as a result of express judicial authorization.
65
18. PROVISION FOR TAX, CIVIL AND LABOR RISKS
Company and its subsidiaries are parties to tax, labor, civil and environmental. Management
believes, based on the opinion and estimates of its legal counsel, that the provision for tax, civil,
labor and environmental contingencies are sufficient to cover potential losses. This provision is
broken down as follows:
2016 2015 2016 2015
Tax 34,542 29,920 47,044 40,622

Civil 11,457 10,839 14,321 17,923
Labor 18,562 10,276 32,259 19,313
Total 64,561 51,035 93,624 77,858
Tax contingencies
The provision for tax risks is broken down as follows:

Company
Additio Reversals Transfer of Inflation
2015 2016
ns tax liabilities adjustment
Legal fees (a) 17,199 6,214 (5,071) - 1,438 19,780
CSLL deductibility (Law 9316/96) (b) 9,015 - (4,853) - 282 4,444
Others 3,706 4,158 (1,955) 3,925 484 10,318
Total provision for tax contingencies 29,920 10,372 (11,879) 3,925 2,204 34,542
Escrow Deposits (note 11) (9,792) (2,100) 2,968 (3,825) (662) (13,411)
Consolidated
Additions Reversals Transfer of Inflation
2015 adjustment 2016
tax liabilities
Legal fees (a) 27.120 8.687 (6.733) - 2.372 31.446
CSLL deductibility (Law 9316/96) (b) 9.015 - (4.853) - 282 4.444
Others 4.487 4.158 (1.955) 3.925 539 11.154
Total provision for tax contingencies 40.622 12.845 (13.541) 3.925 3.193 47.044
Escrow Deposits (note 11) (10.491) (2.100) 2.968 (3.825) (720) (14.168)
(a) refer to lawyer fees in connection with tax proceedings, among which we highlight the following:
(i) Tax infraction notices issued against the Company in August 2003, December 2006 and
December 2007, by Brazilian IRS, claiming IRPJ and CSLL debts related to deductibility of
yield of debentures issued by the Company, in 1999, 2001 and 2002, respectively. The infraction
notices related to 2001 and 2002 are pending a decision by the Administrative Board of Tax
Appeals (ABTA). The legal advisors have assessed that the case involves remote loss.
66
The tax infraction notice issued against the Company in August 2003, related to deductibility in
1999, was handed down in January 2010, partially maintaining IRPJ collection, and fully
maintaining CSLL collection. After this decision, on April 7, 2010, the Company filed a legal
proceeding attempting to cancel the remaining IRPJ and CSLL portion. The trial court decision
was in favor of the Company. The appeal lodged by the Company is currently pending judgment.
The legal advisors have assessed that the case involves remote loss.
(ii) Tax infraction notices in connection with IRPJ and CSLL, issued on June 30, 2009 and
August 30, 2013, questioning deductibility for tax purposes of goodwill amortization,
resulting from incorporation of shares of Natura Empreendimentos by Natura Participações
S.A. and subsequent merger of both companies with Natura Cosméticos S.A. In December
2012, a decision was handed down by ABTA on the proceeding referring to tax infraction
notice of 2009, which was partially in favor of the Company to reduce the uprated fine. In
terms of merit, the decision was unfavorable, reason why the Company is awaiting
formalization of the decision in order to file an appeal with the Higher Board of Tax Appeals
(ABTA). In relation to the tax infraction notice of 2013, in June 2014, the Company was
informed of the unfavorable decision related to its opposition. The Company filed an appeal
with ABTA, which is currently pending judgment. It should be noted that CARF handed
down favorable decisions on similar cases, which represent important case law for the
Company. In the opinion of the Company’s lawyers, the operation, as structured, and its tax
effects are defensible, reason why the risk of loss is assessed as remote.
(iii) IPI, PIS and COFINS tax infraction notices issued against the subsidiary, in December
2012, referring to taxable events occurred in 2008, alleging that the subsidiary would have
adopted incorrect prices in sales to the parent company. In May and June 2013, the
proceedings were judged by Brazilian IRS Appellate Division in Ribeirão Preto/SP, which
decided (a) in favor of the subsidiary, cancelling the tax debt claimed in the PIS/COFINS
tax infraction notice and (b) against the subsidiary maintaining the tax debt claimed in the
IPI tax infraction notice.
On auto respect of PIS offense / COFINS on December 29, 2016, the 2nd administrative
level (CARF) sustained the ruling of the Bureau of Judgment Brazil Federal Revenue Service
in Ribeirão Preto / SP cancel the assessment. Pending publication of the judgment. In
relation to the IPI tax assessment notice, pending judgment of the appeal filed by the
Company.
In the opinion of the Company’s lawyers, the operation, as structured, and its tax effects are
defensible, reason why the risk of loss is assessed as remote.
(b) This refers to the writ of mandamus questioning constitutionality of Law No. 9316/96, which
prohibited deductibility of CSLL from its own calculation base and IRPJ calculation base On
August 25, 2014, in order to use the benefits from the installment payment program of the
Federal Government, the Company filed a petition waving the related proceeding. Formalization
of adhesion to the program and conversion of the judicial deposit into Federal Government
proceeds are currently pending. The amount deposited with the court amounts to R$ 7,533 (R$
7,118 at December 31, 2015), which includes risk assessment as probable and possible.
67
Civil risk
Company
Inflation
2015 Additions Reversals Payments adjustment 2016
Several civil lawsuits (a) 6,267 8,680 (526) (7,605) 95 6,911

Lawyer fees - environmental civil
lawsuit (b) 2,696 173 (150) - 165 2,884
Civil lawsuits and lawyer fees -Nova
Flora Participações Ltda (d). 1,876 412 - (760) 134 1,662
Total provision for civil risks 10,839 9,265 (676) (8,365) 394 11,457
Escrow deposits (note 11) (777) (215) 328 - (93) (757)
Consolidated
Inflation
Several civil lawsuits (a) 12,354 8,859 (5,361) (7,746) 574 8,680
Lawyer fees - environmental civil
lawsuit (b) 2,696 173 (150) - 166 2,885
Lawyer fees - IBAMA (c) 997 - - - 98 1,095
Civil lawsuits and lawyer fees -Nova
Flora Participações Ltda (d). 1,876 412 - (760) 133 1,661
Total provision for civil risks 17,923 9,444 (5,511) (8,506) 971 14,321
Escrow deposits (note 11) (1,067) (305) 577 - (87) (882)
(a) As of December 31, 2016, the Company and its subsidiaries are parties in approximately 2,800
civil lawsuits and administrative proceedings (approximately 2,000 as of December 31, 2015), of
which approximately 2,000 were filed with civil courts, special civil courts and the consumer
protection agency (PROCON) by Natura Beauty Consultants, consumers, suppliers and former
employees, most of which claiming compensation for damages. The balance deposited with the
courts for the tax infraction notices above amounts to R$ 1,260 (R$ 548 December 31, 2015),
including claims with chances of loss assessed as possible and remote.
(b) The provision includes R$ 2,073 with respect to legal fees, ad exitum, for the defense of the
Company’s interests in the public lawsuit filed by the Federal Public Prosecution Office of Acre
against the Company and other institutions for alleged access to the traditional knowledge
associated to the asset (“Murumuru”). Award was made in the records of that action, deciding to
exclude Natura demand. However, as the prosecution filed an appeal, the case is awaiting final
decision. Our legal counsel’s opinion is that the risk of losses is remote.
68
(c) These refer to lawyer fees for the adoption of the judicial measures considered applicable by the
Company’s legal advisors, which aim at the revoking of the assessment notices issued by the
Brazilian Institute of Environment and Renewable Natural Resources (IBAMA) against the
Company in 2010 and 2011 for supposed irregular access to the Brazilian genetic patrimony or
related traditional knowledge, as well as it supposed failure in sharing the benefits under the
effective term of Provisional Executive Order (MP) 2.186/2001, superseded by Law No.
13.123/2015, regulation still pending. The Company received until December 2016, 70 fines from
IBAMA, totaling R$ 13,768 and filed reply and administrative appeal for all of them, and four
assessments notices have already been revoked. A definitive decision on merit has not yet been
handed down on the other cases, reason why such fines do not represent enforceable liabilities.
In view of the Company’s decision that it will question in court any unfavorable decisions on the
administrative proceedings with IBAMA, Company management and its legal advisors assess as
remote the chances of loss on the assessment.
(d) The accrued amount comprises 5 proceedings involving Nova Flora Participações Ltda. on
corporate matters referring to the withdrawal of an former partner of the Company. The balance
deposited with the courts for the tax infraction notices above amounts to R$ 0,6 million (R$ 0,6
million December 31, 2015).
Labor risks
As of December 31, 2016, the Company and its subsidiaries are parties in approximately 1,600 labor
lawsuits filed by former employees and third parties (approximately 1,200 as of December 31, 2015),
claiming the payment of severance amounts, salary premiums, overtime and other amounts due, as
a result of joint liability. The provision is periodically reviewed based on the progress of lawsuits
and history of losses on labor claims to reflect the best current estimate.
Company
Inflation
Total provision for labor contingencies 10,276 9,873 (1,268) (1,852) 1,533 18,562
Escrow deposits (note 11) (3,495) (892) 699 - (299) (3,987)
Consolidated
Inflation
Total provision for labor contingencies 19,313 16,690 (2,962) (2,800) 2018 32,259
Escrow deposits (note 11) (4,825) (819) 882 - (244) (5,006)
Contingent liabilities - possible risk

The Company and its subsidiaries are parties to tax, civil and labor proceedings for which no
provision has been set up because they involve possible risk of loss as assessed by management and
its legal advisors.
69
At December 31, 2016, contingent liabilities comprise 748 cases (654 at December 31, 2015), as
under:
2016 2015 2016 2015
Tax 618,680 636,777 1,489,961 771,225

Civil 14,571 6,330 23,579 12,456
Labor 62,258 38,623 138,702 85,382
Total contingent liabilities (Unaccrued) 695,509 681,730 1,652,242 869,063
The tax cases comprise the following main proceedings:

(a) Dismissal of applications for offset filed in order to use PIS and COFINS credits, computed on
expenses incurred with freight on sales of products subject to one-time levy taxation. The
Company awaits judgment of the case at the administrative level. The total amount being
disputed is R$ 23,551 (R$ 62,869 at December 31, 2015).
(b) The Company and its subsidiary are parties to administrative and judicial proceedings
questioning lawfulness of amendments to state legislation related to ICMS-ST collection. The
amount being disputed totals R$ 527,473 (R$ 432,307 at December 31, 2015) and R$ 106,534
(R$ 95,223 at December 31, 2015) being deposited with the courts.
(c) Notices served by the Brazilian IRS claiming IPI debts arising from the tariff classification
adopted by the subsidiary Indústria e Comércio de Cosméticos Natura Ltda. for certain products.
A decision is expected at the administrative level. The total amount under dispute at December
31, 2016 is R$ 119,997.
(d) Tax Deficiency Notice drawn by the São Paulo State Financie Department against the business
unit branch of subsidiary Indústria e Comércio de Cosméticos Natura Ltda., seeking collection
of State VAT (ICMS) under the tax substitution (ST) regime on the amount of products shipped
off to the Parent Company’s business unit. The total amount in dispute as of December 31, 2016
is R$ 446,999.
The Company has other amounts deposited with the courts in connection with proceedings assessed
as involving remote chances of loss, which aggregate R$ 24,970 (R$ 23,368 at December 31, 2015)
Company and R$ 28,746 (R$ 26,955 at December 31, 2015) Consolidated, as explained in note 11
– Judicial deposits.
19. OTHER LIABILITIES
(a) Provision for acquisition of non-controlling interest
Liabilities recorded in accordance with the obligation entered into in the sale and purchase agreement
of Emeis Holdings Pty Ltd., and its updating reflected the company's performance (a multiple of 12
times EBITDA, plus the cash balance and net of financial obligations). In the year ended December
31, 2016, the restatement of this liability impacted the financial expense in the caption "Provision
for acquisition of non-controlling interests" (see Note 25) in the amount of R$ 58,071 (R$ 111,334
on December 2015).
70
As described in Note 1, on December 20, 2016, the Company, through Natura Australia Pty Ltd.
acquired 21.26% of the capital stock of Emeis Holdings Pty Ltd., participation. , Consequently, the
provision was fully liquidated.
(b) Other current liabilities

2016 2015 2016 2015
Government subvention (*) 12,203 13.843 160.060 100.576

Retirees’ healthcare plan (**) 51,993 24.155 65.190 43.549
Carbon credit 6,070 11.042 6.070 11.042
Exclusivity contract 12,000 - 12.000 -
Other provisions 5,900 1.326 23.380 14.955
Total 88,166 50.366 266.700 170.122
(*) Refers to loans and short- and long-term that reflect the government grant, for the period ended
December 31, 2016 and the year ended December 31, 2015 were reclassified for better compliance
with the requirements of CPC 07 Government Grants and Assistance and of IAS 20.
(**)The actuarial liability for the healthcare plan of the Company and its subsidiaries refers to their
current and former employees who made fixed contributions for funding the healthcare plan up to
April 30, 2010, when the healthcare plan design was changed and fixed contributions were
eliminated. Those who contributed to the plan for ten years or more are ensured the right to remain
as a beneficiary for an indefinite term (lifetime), and those who contributed for a period of less than
ten years are ensured the right to remain as a beneficiary at the rate of one year for each year in
which fixed contributions were made.
This group of current employees, in the event of retirement, may opt to remain in the plan in
accordance with applicable legislation. In this case, the retiree will be responsible for making full
payment of the monthly plan fee charged by the healthcare plan operators. However, this monthly
plan fee does not necessarily represent the total cost of the user. The actuarial liability of the
Company and its subsidiaries will be determined as the difference between cost and contributions
of their current and future retirees. Actuarial gains and losses are recognized in Other
Comprehensive Income (OCI) as mentioned in Note 2.25, disclosure in note n° 2 the annually
financial statements of the Company related to the year ended in December 31,2015, disclosure in
February 17 ,2016. As of December 31, 2015, weighted average time of the obligation was 16 years
The population of active employees eligible to the healthcare plan upon their retirement is closed
for new inclusions. For the calculation as of December 31, 2016, the following numbers were
considered:
 1,398 active employees of Natura Group, 931 of which are parent Company’s employees;
 89 retirees and dependents of Natura Group, 67 of which are from the parent company.
71
Actuarial liabilities were calculated at December 31, 2016 by an independent actuary, considering
the main assumptions below:
2016 2015
Financial discount rate 10.80% 12.25%
Increase in medical expenses 11.67% 11.50%
Long-term inflation rate 4.85% 5.00%
Final rate of medical inflation – after 10 years 5.90% 6.00%
Rate of growth of medical costs for aging costs 3.50% 3.50%
Rate of growth of medical costs for aging contributions 0.00% 0.00%
Invalidity table 72.00% 72.00%
General mortality table Wyatt 85 Class 1 Wyatt 85 Class 1
Turnover table RP2000 RP2000
T-9 service table T-9 service table
In relation to the previous year, changes were observed in the discount rate, which increased from
6.90% pa. To 5.68% a.a. In real terms (net of estimated long-term inflation) - equivalent 12.25%
pa To 10.80% a.a. In nominal terms. The change in the discount rate represented an increase of R$
11,797 (Consolidated) over the defined benefit liability. This effect was included in amounts
recognized in Other Comprehensive Income.
Below we present the changes in actuarial liabilities for the years ended December 31, 2016 and
2015:
December 31, 2016: Company Consolidated
Balance at beginning of year (24,155) (43,549)

Cost of the company's current service - recognized in
income (1,167) (1,699)
Interest cost - recognized in income (2,927) (5,263)
Benefits paid directly by the company 119 609
Actuarial gains / (losses) in Other comprehensive income (23,863) (15,288)
Balance at end of year (51,993) (65,190)
December 31, 2015: Company Consolidated
Balance at beginning of year (23,068) (37,697)

Cost of the company's current service - recognized in
income (1,340) (1,972)
Interest cost - recognized in income (2,316) (4,385)
Benefits paid directly by the company 217 951
Actuarial gains / (losses) in Other comprehensive income 2,352 (446)
Balance at end of year (24,155) (43,549)
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20. SHAREHOLDER’S EQUITY
a) Issued Capital
As of December 31, 2016, the Company’s capital was R$427,073.

For the period ended in December 31, 2016 there was no change in capital, which is made up of
431,239,264 subscribed and paid-up common registered shares. The Company is authorized to
increase its capital, irrespective of an amendment to the articles of incorporation, up to the limit
of 441,310,125 (for hundred and forty-one million, three hundred and ten thousand, one hundred
and twenty-five) common shares with no par value by resolution by the Board of Directors,
which will lay down the issuance conditions, including price and deadline for payment.
b) Dividend and interest on capital payment policy
The shareholders are entitled to receive every year a mandatory minimum dividend of 30% of
net income, considering principally the following adjustments:
 Increase in the amounts resulting from the reversal, in the period, of previously
recognized reserves for contingencies.
 Decrease in the amounts intended for the recognition, in the period, of the legal reserve
and reserve for contingencies.
The bylaws allow the Company to prepare half-year or interim balance sheets based on which
the Board of Directors may authorize the payment of interim dividends.
On April 20, 2016 payment of dividends totaling R$105,733 and of interest on equity in the gross
amount of R$17,400 (R$14,790 net of IRRF) were made, as recommended by the Board of
Directors on February 17, 2016 and approved at the Annual General Meeting held on April 15,
2016, referring to net income recorded in 2015. Such amounts, plus dividends of R$207,290 and
interest on equity of R$29,036, paid in August 2015, correspond to payment of approximately
70% of net income recorded in 2015.
On December 14, 2016, the Board resolved to distribute interest on capital in the total gross
amount of R$ 61,804 (R$ 52,533, net of IRRF) for the period from January 1, 2016 to November
30 2016, which was paid on February 10, 2017.
Additionally, on February 22, 2017, the Board approved an "ad referendum" of the Annual and
Extraordinary Shareholders 'Meeting, which will be held on April 11, 2017, the proposal for
payment of dividends and interest on shareholders' equity for the month Of December 2016, in
the amounts of R$ 51,276 and R$ 5,600 (R$ 4,760 net of IRRF), respectively, related to the
results obtained in 2016, which added up to R$ 61,804 (R $ 52,533, net of IRRF) Paid on
February 10, 2017 correspond to a distribution of approximately 40% of the net income earned
in 2016.
73
Dividends were calculated as follows:
Controladora
2016 2015
Net income for the year 296.699 513.513

Mandatory minimum dividend 30% 30%
Annual minimum dividend 89.010 154.054
Proposed dividends 51.276 313.023

Interest on equity 67.404 46.436
Withholding income tax (IRRF) on interest on equity (10.111) (7.487)
Total dividends and interest on equity, net of IRRF 108.569 351.972
Amount in excess of mandatory minimum dividend, net of IRRF 19.559 197.918
Dividends per share - R$ 0,1192 0,7275

Interest on equity per share, net - R$ 0,1331 0,0905
Total compensation per share, net - R$ 0,2523 0,8180
As mentioned in Note 2.21, the amount in excess of mandatory minimum dividend, declared by
management after the accounting period to which the financial statements refer, but before the
date on which their issuance was approved, shall not be recognized as a liability in the respective
financial statements, and the effects of the amount of supplemental dividends will be disclosed
in an explanatory note. Therefore, at December 31, 2016 and 2015, the following installments
referring to amount in excess of mandatory minimum dividend were recorded in equity as
“Proposed additional dividend”:
Company
2016 2015
Dividends 24,070 105,733

Interest on equity 5,600 17,400
29,670 123,133
The amount related to the mandatory minimum dividend declared and not paid on December 31,
2016 is R$ 79,739
74
c) Treasury shares
As of December 31, 2016 and December 31, 2015, line item ‘Treasury shares’ is broken down
as follows:
2016
Average price
Number of R$ per share
Share (thounsands) R$
Balance at December 31, 2015 954.584 37,851 39.65
Utilized (17.700) (702) 39.65
Balance at December 31, 2016 936.884 37,149 39.65
The minimum and maximum cost of the balance of treasury shares in the period ended December
31, 2016 is R$ 31.49 and 45.13, respectively.
d) Share Premium
Refers to the premium generated on the issuance of 3,299 common shares resulting from the
capitalization of debentures totaling R$ 100,000, occurred on March 2, 2004.
e) Legal reserve
Since the balance of legal reserve plus capital reserves, addressed by article 182, paragraph 1, of
Law 6404/76, exceeded 30% of the capital, the Company decided, in accordance with article 193
of the same Law, decided not to constitute the legal reserve on the net income onwards from the
year in which this limit was reached.
f) Retained earnings reserve
At a meeting held on February 22, 2017 by the Board of Directors, the financial statements
and the proposal for the retention of profits for the fiscal year ended December 31, 2016 were
submitted, which will be submitted for approval at the Ordinary and Extraordinary General
Meeting of Shareholders To be held on April 11, 20176. The constitution of the profit reserve
comprised the equivalent of 60% of the total income earned in the year 2016 in the amount of
R$ 178,019.
The Ordinary and Extraordinary General Meeting that will appreciate these financial statements
will also make the necessary decisions in order to comply with the legal provisions on the limit
of the balance of the profit reserve.
g) Provision for acquisition of non-controlling interests
This refers to the matching entry of the remainder of non-controlling interests in the capital of
Emeis Holdings Pty Ltd., which was initially recorded in the Company’s liabilities for the
obligation under a purchase and sale agreement, and simultaneous issuance of put options and
stock options. The realization of this provision occurs upon the exercise of options, limited to
the amount initially recorded. This provision was fully realized on December 20, 2016, when
the options for the purchase of non-controlling interest were exercised, as described in note 1.
75
h) Goodwill/negative goodwill on capital transactions - Result from operations with non-

controlling shareholders
This refers to the effect of changes in ownership interest upon the acquisition of the remaining
part of non-controlling interests when the Company already has control.
i) Other comprehensive income
The Company records in this account the effect of exchange variation on investments in foreign
subsidiaries, actuarial gains and losses from the retirees’ healthcare plan result from cash flow
hedge. For exchange variation, the accumulated effect will be reversed in P&L for the year as
gain or loss only in the case of investment disposal or write-off. For actuarial gains and losses,
the amounts will be recognized upon actuarial liability revaluation. The cash flow hedge
transactions will be transferred to P&L for the year when an ineffective portion is identified
and/or upon termination of the relationship.
21. SEGMENT INFORMATION
Segment reporting is consistent with managerial reports submitted to the chief operating decision
maker for assessing the financial performance of each operating segment and for allocating
resources. Based on the reports reviewed by management for making decisions, although the chief
decision maker reviews the information on revenue at various levels, the Company’s primary
business segment is represented by the sale of cosmetics by geographical region.
In addition to the direct sales operation, the Company has operations in the retail, e-commerce and
franchise markets. Segregation by this type of operation is still not considered significant for
disclosure by the decision maker.
The disclosure below has the following segregation: Brazil ("Operation Brazil"), Latin America
("LATAM Transaction", including LATAM Corporate), Emeis Holdings Pty Ltd. ("Aesop")
(includes the results of Holdings Natura Brazil Pty Ltd And Natura Cosmetics Australia Pty Ltd.)
and Others ("includes the results of France, Natura (Brazil) International BV - Netherlands, Natura
Brazil Inc. - USA").
Net revenue by geography is as follows in the period ended in December, 31 2016:
 Brazil: 67.7 %
 LATAM: 24.8 %
 Emeis Holdings Pty Ltd. (“Aesop”): 7.3 %
 Outros: 0.2 %
The accounting practices for each segment are described in Note 2. The Company segments’
performance was measured based on its net operating income, net income for the year and
noncurrent assets. This measurement basis excludes the effects of interest, income tax and social
contribution, depreciation and amortization.
76
The tables below present summarized financial information for the segments as of December 31,
2016 and 2015 (income statements) and December 31, 2015 (balance sheet). The figures provided
to the Executive Committee with respect to income and total assets are consistent with the balances
recorded in the financial information, as well as the accounting policies adopted.
2016
Depreciation
Net profit Financial
Net revenue and Tax
(loss) income
Amortization
Brazil 5,356,845 196,801 (203,129) (614,335) (51,117)
LATAM 1,961,376 91,973 (18,528) (40,595) (47,772)
Emeis Holding Pty Ltd. (38,381) (1,079) (19,732)
(“Aesop”) 579,727 44,225
Others 14,716 (36,300) (733) - -
Consolidated (attributable to
controlling shareholders of the
Company) 7,912,664 296,699 (260,771) (656,009) (118,621)
2015
Depreciation
Net profit Financial
Net revenue and Tax
(loss) income
Amortization
Brazil 5,610,222 407,937 (193,206) (395,668) (261,109)
LATAM 1,842,359 105,645 (16,712) 18,271 (69,117)
Emeis Holding Pty Ltd.
(“Aesop”) 431,533 27,624 (26,909) (4,002) (22,412)
Others 14,888 (27,693) (2,370) - -
Consolidated (attributable to
controlling shareholders of the
Company) 7,899,002 513,513 (239,197) (381,399) (352,638)
2016 2015
Non
Non current Current Total current Current Total
Assets Liabilities Assets Assets Liabilities Assets
Brazil 3,133,219 3,543,273 6,988,043 2,873,979 3,782,501 7,823,633
LATAM 165,693 516,310 901,414 168,483 676,744 1,028,410
Emeis Holding Pty Ltd.
(“Aesop”) 313,380 103,822 508,367 325,861 113,675 513,031
Others 6,387 14,494 23,755 7,952 - 29,907
Consolidated 3,618,679 4,177,899 8,421,579 3,376,275 4,572,920 9,394,981
The Company has predominantly a class of products sold by Natura Beauty Consultants,
denominated as “Cosmetics”. In the case of Emeis Holding Pty Ltd. (“Aesop”), cosmetics are sold
through a wholesale structure, both in own stores as in department stores.
The Company has a diversified customer portfolio, with no concentration of revenue.
77
22. NET REVENUE
2016 2015 2016 2015
Gross revenue:
Domestic market 7,735,563 7,874,186 7,754,729 7,884,951
Foreign market - - 3,236,722 2,917,439
Other sales 4 83 1,691 4,083
7,735,567 7,874,269 10,993,142 10,806,473
Returns and cancellations (24,397) (17,847) (47,686) (40,655)
Taxes on sales (2,094,185) (1,927,422) (3,032,792) (2,866,816)
Net revenue 5,616,985 5,929,000 7,912,664 7,899,002
23. OPERATING EXPENSES AND COST OF SALES
(a) Breakdown of operating expenses and cost of sales by function:
2016 2015 2016 2015
Cost of sales 2,188,578 2,294,896 2,446,959 2,415,990

Selling, Marketing and Logistics expenses 2,143,235 2,081,047 3,110,169 3,020,500
Administrative, P&D, IT and Project Expenses 673,343 732,241 1,327,093 1,271,533
Total 5,005,156 5,108,184 6,884,221 6,708,023
(b) Breakdown of operating expenses and cost of sales by nature:

2016 2015 2016 2015
Cost of sales 2,188,578 2,294,896 2,446,959 2,415,990
Raw material/packaging Material 2,188,578 2,294,896 1,962,313 1,936,541
Workforce - - 247,476 212,956
Depreciation and amortization - - 77,298 79,085
Others - - 159,872 187,408
Marketing and selling expenses 2,143,235 2,081,047 3,110,169 3,020,500

Freight 280,814 302,691 284,669 309,613
Marketing, sales force and other sales expenses 1,836,279 1,752,307 2,790,077 2,676,741
Depreciation and amortization 26,142 26,049 35,423 34,146
Administrative expenses, P&D, IT and Projects 673,343 732,241 1,327,093 1,271,533

Development in Innovation - - 184,491 208,807
Other administrative expenditure 598,589 671,898 994,552 936,760
Depreciation and amortization 74,754 60,343 148,050 125,966
Total 5,005,156 5,108,184 6,884,221 6,708,023
78
24. EMPLOYEE BENEFITS
2016 2015 2016 2015
Payroll , profit sharing and bonuses 369,007 359,506 1,033,513 969,525

Pension Plan (note 24.2) 2,692 3,022 3,753 4,642
Gain based on stocks (note 24.1) 7,688 (4,326) 8,782 (2,572)
Charges on restricted stock (note 24.1) 1,880 581 2,585 827
Taxes payable 25,354 25,445 83,322 87,946
Health medical care, food, transportation and others
benefits 92,177 67,977 195,738 184,610
498,798 452,205 1,327,693 1,244,978
24.1. Gain based on stocks
The Board of Directors, upon granting of options, meets annually in order to establish the
option granting plan for the current year, on the basis approved by the Management and
employees, indicating the directors and managers who will receive the options and the total
number to be distributed.
From 2009 to 2014, the plans vested for exercise of 100% of options at the end of the fourth
year after grant date, with the possibility of early maturity after the third year, conditioned to
cancellation of 50% of the options granted in the plans. The Company established a maximum
term of four years for option exercise as from the end of the fourth year after vesting.
At the Special Shareholders' Meeting held on February 06, 2015, Company shareholders
approved a new Stock Option Plan and a Restricted Stock Option. On March 16, 2015, the
Company Board of Directors approved these plans (“Plans of 2015”). The Board Meeting
held on April 10, 2015, grant to the eligible employees and managing directors who joined
the 2015 Plans was ratified. As such, the provision will begin to be recorded as from April
2015.
At the Special General Meeting (SGM) held on July 27, 2015, the Company’s shareholders
approved a Stock Option or Subscription of Shares Program for Strategy Acceleration, and
adjustments to the Restricted Stock Option Program, approved at the SGM held on February
6, 2015. On July 28, 2015, the Company’s Board of Directors approved the Stock Option or
Subscription of Shares Program denominated “Strategy Acceleration Plan” for 2015, and on
August 14, 2015, the Company’s Board of Directors ratified the list of employees eligible to
the Restricted Stock Option Plan.
On March 16, 2016, the Company´s Board of Directors approved the Stock Option or Share
Subscription Plan and the restricted stock option plan for 2016 (“2016 Plans”). Stock options
granted to eligible managing officers and employees who joined the 2016 Plans were approved
at the Board Meeting held on April 14, 2016 and, as such, provision will begin to be recorded
as from April 2016. Additionally, on July 4, 2016, the Company's Board of Directors approved
the inclusion / exclusion of beneficiaries and also revisited the amount of Restricted Stock
Option Plan of actions for the year 2016.
79
On July 11, 2016, the Company's Board of Directors approved the Stock Option Plan Option
or Share Subscription Strategy for Acceleration for the year 2016,. This month began the
necessary provisions.
The Stock Option Plan effective for 2016 and 2015 sets out that options may be exercised over
three years, one third each year, as from the second year.
The Stock Option Plan Option or Share Subscription termed as "Strategy Acceleration Plan"
valid for 2015 and 2016 provides that 50% of the options may be exercised in the fourth year
anniversary and the rest in the fifth year.
The Restricted Stock Option Plan implemented in 2015 consists in the grant of Company
common shares to a group of managing officers and employees. The rights of the participants
referring to restricted shares will only be fully vested to the extent that the participant remains
linked to the Company as a managing officer or employee, in the period between grant date
and the following dates, in these proportions:
(a) 1/3 (one third) as from the 2nd anniversary of the grant date;
(b) 2/3 (two thirds) as from the 3rd anniversary of the grant date; and
(c) 100% as from the 4th anniversary of the grant date;
In the Restricted Stock Option Plan, there will be no financial disbursement by Company
employee or managing officer upon end of the vesting period.
The changes in the number of outstanding stock options and their related weighted-average
prices, as well as variations in the amount of restricted stock are as follows:
Stock Option Plan and Strategy Acceleration Plan

2016 2015
Average Average
exercise price Options exercise price Options
per share - R$ (thousands) per share - R$ (thousands)
Balance at beginning of
Year/period 37.91 6,234 47.30 5,296
Granted 24.43 2,566 27.81 2,944
Cancelled 47.32 (2,419) 51.23 (2,006)
Exercised - - - -
Balance at period/year end 36.17 6,381 37.91 6,234
80
Stock Stock
Restricted Restricted
(thousands) (thousands)
2016 2015
Balance at beginning of
Year/period 510 -
Granted 512 556
Cancelled (129) (46)
Exercised (18) -
Balance at period/year end 875 510
Out of the 6,381 outstanding options as of December 31, 2016 (6,234 outstanding options as
of December 31, 2015), 1,692 outstanding options are vested (1,548 outstanding options as of
December 31, 2015).
The expense relating to the fair value of stock options and restricted stock, including charges
on restricted stock, recognized in the period ended December 31, 2016, according to the period
elapsed for entitlement to exercise the options and restricted shares, was of R$ 9,568 e R$
11,367 Company and consolidated, respectively. At December 31, 2015, reversal of expenses
totaled (R$ 3,745) and (R$ 1,745) Company and consolidated, respectively.
The stock options outstanding and the restricted stock at the end of the period have the
following vesting dates and exercise prices:
As of December 31, 2016 –Stock option plan
Remaining
Exercise Existing contractual Vested
Grant date price - R$ Fair value options life (years) options
April 22, 2009 36.07 7.83 291,689 0.57 291,689

March 19, 2010 52.93 10.82 414,432 1.49 414,432
March 23, 2011 61.77 16.45 504,121 2.49 504,121
March 18, 2013 67.50 12.10 481,332 4.53 481,332
March 17, 2014 45.12 8.54 682,814 5.54 -
March 16, 2015 (24 months - vested) 28.22 9.70 265,401 6.29 -
July 28, 2015 (Strategy Acceleration
Plan-48 months - vested) 26.81 12.46 632,500 6.67 -
July 11, 2016 (48 months – vesting) 23.84 26.96 770,000 7.64 -
July 11, 2016 (60 months – vesting) 23.84 26.96 770,000 7.64 -
6,381,107 1,691,574
81
As of December 31, 2016 – restricted stock

Remaining
Existing contractual life Vested
Grant date stock Fair value (years) stock
March 16, 2015 (24 months - vested) 145,444 22.27 6.29 -

875,262
As of December 31, 2015 – Stock option plan
Remaining
Exercise Existing contractual life Vested
Grant date price - R$ Fair value options (years) options
April 22, 2009 33.94 7.83 293,783 1.33 293.783

March 19, 2010 49.80 10.82 588,894 2.25 588.894
March 23, 2011 58.12 16.45 665,534 3.25 665.534
March 18, 2013 63.51 12.10 904,805 5.30 -
March 17, 2014 42.50 8.54 966,967 6.30 -
July 28, 2015 (Strategy Acceleration Plan-
60 months - vested) 26.97 12.40 935,000 7.70 -
8,124,419 1.548.211
As of December 31, 2015 – restricted stock
Remaining
Existing contractual life Vested
Grant date stock Fair value (years) stock

509,832
On December 31, 2016, the market price was R$ 23.02 (R $ 23.49 on December 31, 2015) per
share.
82
The pricing of stock options and restricted stock was based on the binomial model and
significant data included in the fair value pricing model of the stock options and restricted
stock granted in 2016 were:
Grant in
Stock option plan Restricted stock
July 11, July 11,
2015 2015
(Strategy (Strategy
March 15, March 15, March 15, March 16, March 16, March 16,
Acceleratio Acceleratio
2016 (24 2016 (36 2016 (48 2015 (24 2015 (36 2015 (48
n Plan n Plan
months - months - months - months - months - months -
months – months –
vested) vested vested) vested) vested vested)
vested -48 vested -60
months months
vested) vested)
Volatility 37.2% 37.2% 37.2% 39.4% 39.4% 37.2% 37.2% 37.2%

Dividend yield 3.4% 3.4% 3.4% 4.6% 4.6% 3.4% 3.4% 3.4%
Expected option 2 anos 3 anos 4 anos 4 anos 5 anos 2 anos 3 anos 4 anos
life of the year
Risk-free annual 12.9% 13.2% 13.2% 11.5% 11.5% 12.9% 13.2% 13.2%
interest rate
The pricing of stock options and restricted stock was based on the binomial model and
significant data included in the fair value pricing model of the stock options and restricted
stock granted in 2015 were:
Grant in
Stock option plan Restricted stock
July 28, 2015
July 28, 2015
(Strategy
March 16, March 16, March 16, (Strategy March 16, March 16, March 16,
Acceleration
2015 (24 2015 (36 2015 (48 Acceleration 2015 (24 2015 (36 2015 (48
Plan months –
months - months - months - Plan months – months - months - months -
vested -48
vested) vested vested) vested -60 vested) vested vested)
months
months vested)
vested)
Volatility 30.4% 30.4% 30.4% 32.0% 32.0% 30.4% 30.4% 30.4%

Dividend yield 4.3% 4.3% 4.3% 4.3% 4.3% 4.3% 4.3% 4.3%
Expected option 2 anos 3 anos 4 anos 4 anos 5 anos 2 anos 3 anos 4 anos
life of the year
Risk-free annual 12.6% 12.6% 12.6% 12.2% 12.2% 12.6% 12.6% 12.6%
interest rate
24.2. Pension plan

The Company and its subsidiaries sponsor two employees’ benefit plans: a pension plan,
through a private pension fund managed by Brasilprev Seguros e Previdência S.A., and an
extension of healthcare plans to retired employees.
The defined contribution pension plan was created on August 1, 2004 and all employees hired
from that date are eligible to it. Under this plan, the cost is shared between the employer and
the employees so that the Company’s share is equivalent to 60% of the employee’s contribution
according to a contribution scale based on salary ranges from 1% to 5% of the employee’s
monthly compensation
83
As of December 31, 2016 and December 31,2015, did not have actuarial liabilities there were
no actuarial liabilities on behalf of the Company and its subsidiaries arising from the
supplementary pension plan.
The contributions made by the Company and its subsidiaries totaled R$2,692 (Company) and
R$ 3,753 in the period ended December 31, 2016 (R$ 3,022 Company and R$4,642
Consolidated in the period ended December 31, 2015), and were recorded as expenses in the
period.
25. NET OTHER INCOME (EXPENSES)
2016 2015 2016 2015
Financial income:
Interest on short-term investments 188,326 194,616 255,437 267,773
Inflation adjustment and foreign exchange gains (a) 700,729 559,293 745,365 630,517
Gains on swap and forward transactions (c) 42,960 881,008 45,467 962,611
Gains on the adjustment to market value of swap and
forward derivatives - 34,469 - 38,240
Other financial income 20,432 22,912 27,019 28,087
Total 952,447 1,692,298 1,073,288 1,927,228
952.447 1.692.298 1.073.288 1.927.228
Financial expenses:
Interest on financing (267,248) (260,575) (317,589) (317,761)
Inflation adjustment and foreign exchange losses (b) (275,593) (1,410,528) (359,742) (1,496,749)
Losses on swap and forward transactions (d) (653,848) (234,716) (698,774) (268,011)
Losses on the adjustment of fair value of “financial”
and “operational” derivatives (14,423) - (12,292) -
Inflation Provision for acquisition of non-controlling
interest (note 19.a) (58,071) (111,334) (58,071) (111,334)
(“Forward”) derivative instruments engaged to
hedge the provision for acquisition of non-
controlling interests, including mark-to-market
(MTM) adjustment. (65,136) - (65,136) -
Update of provision for tax, civil and labor risks (79.093) (32.795) (108.923) (59.263)
Effect of reclassification of government subsidy
(CPC07) (10.198) (8.655) (65.768) (45.174)
Other financial expenses (35.267) (7.089) (43.002) (10.335)
Total (1.458.877) (2.065.692) (1.729.297) (2.308.627)
Financial expenses, net (506.430) (373.394) (656.009) (381.399)
84
The objective of the breakdowns below is to explain more clearly the foreign exchange hedging
transactions contracted by the Company and the related balancing items in the income statement
shown in the previous table:
2016 2015 2016 2015

Gains on monetary and exchange variations
Exchange rate on loans 699,399 559,293 744,743 589,821
Exchange variation of import 1,330 - 622 -
Exchange variation of receivables export - - - 26,427
Exchange rate changes in accounts payable in foreign
subsidiaries - - - 14,269
(a) 700,729 559,293 745,365 630,517
Losses on monetary and exchange variations:

Exchange rate on loans (275,271) (1,408,031) (290,712) (1,493,751)
Exchange variation of import - (2,380) - (1,527)
Exchange variation of export receivables - - (17,364) -
Exchange rate changes in accounts payable in foreign
subsidiaries - - (41,674) -
Exchange variation of financing (322) (117) (9,992) (1,471)
(b) (275,593) (1,410,528) (359,742) (1,496,749)
(275,271) (1,408,031) (290,712) (1,493,751)
Gains on forward and swap and fowards
transactions:
Exchange variation of swap instruments - 825,965 - 883,666
Gain on exchange coupon “swap” 42,960 55,043 45,467 56,792
Exchange variation of “forward” instruments - - - 10,259
Revenue from Pre swap rate
(c) - - - 11,894
42,960 881,008 45,467 962,611
Losses on swap and forward transactions

Financial costs swap instruments (422,573) - (449,764) -
Financial costs – swap (231,275) (234,716) (247,515) (268,011)
Loss on interest rate swap - - (1,495) -
(d) (653,848) (234,716) (698,774) (268,011)
85
26. NET OTHER INCOME (EXPENSES)
2016 2015 2016 2015
Gain (loss) on sale of property, plant and

equipment (851) 17,314 3,418 41,251
Crédit ICMS (a) 4,725 - 4,725 -
Subsidy BNDES, FINAME and FINEP (b) 10,198 8,655 65,769 45,174
Crer para ver (c) (32,305) (19,390) (32,305) (19,390)
ICMS-ST (d) (18,580) - (18,580) -
Sale of customer portfolio 27,000 - 27,000 -
Other net operating income (expenses) 528 15 4,398 (1,245)
Net Other income (expenses) (9,285) 6,594 54,425 65,790
(a) The balance above includes ICMS tax credits recognized from refund as a result of tax
substitution.
(b) Refers to the reclassification of the subsidized loans interest expense as a result of the financial
accounting pronouncement CPC07.
(c) Allocation of income obtained in the operation of the project “Crer para ver” the Natura Institute.
(d) Refers to the requirement of ICMS tax substitution by the different states.
(e) This refers to revenue from the sale of the customer portfolio with past due accounts over 180
days, which were no longer included in the balance of the Company’s trade accounts receivable on
the date the risks and benefits are transferred. The Company's policy is to write off trade notes
overdue for more than 180 days. It should be noted that this sale was made without right of return
and with transfer of credit risk to the buyer.
27. EARNING (LOSSES) PER SHARE
27.1. Basic
Basic earnings per share are calculated by dividing the net income attributable to the owners of
the Company by the weighted average of common in outstanding shares, less common shares
bought back by the Company and held as treasury shares.
2016 2015
Net income attributable to owners of the Company 296,699 513,513

Weighted average of common outstanding shares 431,239,264 431,239,264
Weighted average of treasury shares (949,409) (954,584)
Weighted average of outstanding common shares 430,289,855 430,284,680
Basic earnings per share - R$ 0.6895 1.1934
86
27.2. Diluted
Diluted earnings per share is calculated by adjusting the weighted average outstanding common
shares supposing that all potential common shares that would cause dilution are converted. The
Company has only one category of common shares that would potentially cause dilution: the
stock options.
2016 2015
Net income attributable to owners of the Company 296,699 513,513

Adjustment for stock options 1,275,824 211,897
Diluted earnings per share - R$ 0,6875 1,1928
At December 31, 2016, a total of 6,035,573 outstanding options (6,245,169 at December 31,
2015), were not considered in the calculation of diluted earnings per share due to the fact that
the exercise price is higher than average market price of the common shares during the period
ended on those dates, therefore there was no dilution effect.
28. RELATED-PARTY TRANSACTIONS
28.1. Receivables from and payables to related parties are as follows:

Company
2016 2015
Current assets:
Natura Inovação e Tecnologia de Produtos Ltda. (a) 1,527 1,986
Natura Logística e Serviços Ltda. (b) 438 1,641
Indústria e Comércio de Cosméticos Natura Ltda. (c) 4,126 5,263
Natura Biosphera Franqueadora Ltda. 185 136
Aesop Brasil Comercio de Cosméticos Ltda. (subsidiária da Emeis Holdings 922 -
Pty Ltd.)
Natura Comercial Ldta. 774 -
7,972 9,026
Current liabilities:
Trade payables:
Indústria e Comércio de Cosméticos Natura Ltda. (c) 217,980 122,309
Natura Logística e Serviços Ltda. (d) 741 6,468
Natura Inovação e Tecnologia de Produtos Ltda. (e) 23,362 20,616
242,083 149,393
87
Related-party transactions are as follows:

Company
Sale of products Purchase of products
2016 2015 2016 2015
Natura Cosméticos S.A. – Brasil 5,937 432 - -

Aesop Brasil Comércio de Cosméticos Ltda - - 2,606 432
Natura Comercial Ldta. - - 3,331 -
5,937 432 5,937 432
Consolidate
Sale of products Sale of products
2016 2015 2016 2015
Indústria e Comércio de Cosméticos Natura Ltda. 3,204,664 3,177,924 - -

Natura Cosméticos S.A. – Brasil - - 2,729,261 2,835,854
Natura Cosméticos S.A. – Peru - - 60,629 53,628
Natura Cosméticos S.A. – Argentina - - 157,285 89,258
Natura Cosméticos S.A. – Chile - - 75,253 70,386
Natura Cosméticos S.A. – México - - 104,998 75,420
Natura Cosméticos Ltda. – Colômbia - - 71,817 49,793
Natura Europa SAS – França - - 2,929 2,784
Natura International Inc.-EUA - - 459 -
Natura Inovação e Tecnologia de Produtos Ltda. - - 2,033 801
3,204,664 3,177,924 3,204,664 3,177,924
Service provided Services received

2016 2015 2016 2015
Administrative structure: (f)

Natura Logística e Serviços Ltda. 16,170 146,451 - -
Natura Cosméticos S.A. – Brasil - - 9,436 98,083
Indústria e Comércio de Cosméticos Natura Ltda. - - 4,787 33,099
Natura Inovação e Tecnologia de Produtos Ltda. - - 1,865 14,638
Natura Biosphera Franqueadora Ltda. - - 82 631
16,170 146,451 16,170 146,451
Products and technology research and development: (g)

Natura Inovação e Tecnologia de Produtos Ltda. 230,707 237,803 - -
Natura Cosméticos S.A. - Brasil - - 230,707 237,803
230,707 237,803 230,707 237,803
Research and testing “in vitro”: (h)

Natura Innovation et Technologie de Produits SAS - 133 46 -
-
França
Natura Inovação e Tecnologia de Produtos Ltda. - - 133 46
133 46 133 46
Lease of properties and shared charges: (i)
Indústria e Comércio de Cosméticos Natura Ltda. 8,074 7,324 - -
Natura Logística e Serviços Ltda. - - 5,759 5,225
Natura Inovação e Tecnologia de Produtos Ltda. - - 2,315 2,099
8,074 7,324 8,074 7,324
88
(a) Advanced granted for provision of product and technology development and market
research services.
(b) Advances granted for provision of product separation, packaging and mailing services,
logistics advisory, human resources management and human resources training.
(c) Payables for the purchase of products.
(d) Payables for services described in item (f).
(e) Payables for services described in item (g).
(f) Services of separate, packing and mailing goods, logistic consulting, manager human
resources and training in human resources
(g) Product and technology development and market research services.
(h) Provision of “in vitro” research and testing services.
(i) Lease of part of the industrial complex located in Cajamar, SP.
The main intercompany balances as of December 31, 2016 and December 31, 2015, as well
as the intercompany transactions that affected the period then ended in December 31, 2016
and 2015, refer to operations conducted between the Company and its subsidiaries.
The prices, terms and other conditions of transactions between the Company, subsidiaries and
other related parties were agreed in contracts between the parties.
Due to the Company’s and subsidiaries’ operational model, as well as the channel chosen to
distribute products, direct sales via Natura Beauty Consultants, a substantial portion of sales
is made by the subsidiary Indústria e Comércio de Cosméticos Natura Ltda. to the parent
company Natura Cosméticos S.A. in Brazil and to its foreign subsidiaries.
There is no allowance for doubtful accounts recognized for intercompany receivables on

December 31, 2016 and December 31, 2015 since there are no past-due receivables with risk
of default.
According to note 15, the Group companies usually grant each other pledges and collaterals
to guarantee bank loans and financing.
On June 5, 2012, an agreement was entered,still present,into between Indústria e Comércio de

Cosméticos Natura Ltda. and Bres Itupeva Empreendimentos Imobiliários Ltda., (“Bres
Itupeva”), for the construction and lease of a distribution center (HUB), in the city of
Itupeva/SP. Messrs. Antonio Luiz da Cunha Seabra, Guilherme Peirão Leal and Pedro Luiz
Barreiros Passos, members of the group of controlling shareholders of Natura Cosméticos
S.A., indirectly hold controlling interests in Bres Itupeva..
89
In September 2014, Natura Cosméticos S.A. entered into with Dédalus Administração e
Participações Ltda.(“Dédalus”) and Homagus Administração and Participações
Ltda.(“Homagus”) an aircraft assignment agreement, still present for use thereof. Under the
agreement, upon aircraft use by Natura Cosméticos S.A., the amount charged will be that
established in the Brazilian Code of Aeronautics. Dédalus and Homagus are the property of
Messrs. Guilherme Peirão Leal and Antonio Luiz Seabra, both belonging to the group of
controlling shareholders of Natura Cosméticos S.A.
On December 1, 2015, Natura Cosméticos S.A. and Raia Drogasil S.A. entered into a purchase
and sale agreement and other covenants for sale of “SOU” line products in 29 Raia and
Drogasil chain stores in Campinas and surrounding region. Mr. Antonio Luiz da Cunha
Seabra, Mr. Guilherme Peirão Leal and Mr. Pedro Luiz Barreiros Passos, members of the
Natura Cosméticos S.A. control block, indirectly hold shareholding interest in Raia Drogasil
S.A.
Given that the Company will pay Raia Drogasil five percent (5%) on total products sold,
considering the amount indicated in the sales invoice of the Company to Raia Drogasil, it is
not possible to define the total agreement amount. Nevertheless, management understands that
the operation is significant to the Company.
28.2. Key management personnel compensation
The total compensation of the Company’s and its subsidiaries’ Management is as follows:
2016 2015
Compensation Compensation
Fixed Variable Variable
(a) (b) Total Fixed (b) Total
Board of Directors 5,147 2,305 7,452 5,745 - 5,745

Officers (statutory) 18,836 11,433 30,269 11,478 4,563 16,041
23,983 13,738 37,721 17,223 4,563 21,786
Executives (not statutory) 42,137 12,941 55,078 32,627 7,467 40,094
(a) In the item Officers (statutory) it is included the amount of R$ 4.385 referred to the
amortization of the Confidentiality and Non-Compete Agreement, during the period ended
on December 31, 2016.
(b) Refers to profit sharing, on an accrual basis, net of reversals, regarding the Restricted
Share Program and Strategy Acceleration Program, including charges, as applicable, to be
determined in the year. The amounts include additions to and/or reversals of provisions
made in the previous year, due to final assessment of the targets established for board
members and officers, statutory and non-statutory, in relation to profit sharing.
90
As a result of an agreement Management entered into with a Company's former director,

at the Annual and Special Shareholders' Meeting to be held on April 11, 2017, a matter
will be put to vote regarding the transfer of shares restricted to members of the
Restricted Stock Option Plans granted in years 2015 and 2016 that were not vested on
the date of their termination. For this reason, the "Corporate Directors" account includes
the cost of the restricted shares granted to such former director, with all other terms and
conditions of the Restricted Stock Option Plans granted in 2015 and 2016 applicable to
such restricted shares remaining unchanged, including vesting schedules
28.3. Share-based payments
Breakdown of Company officers and executives’ compensation:
2016 2015
Stock options grant Stock options grant
Avarege Average Avarege Average
Stock option Exercise Stock option Exercise
balance fair value price - balance fair value price -
(number) (a) stock option R$ (b) (number) (a) stock option R$ (b)
Officers 2,529,024 12,52 36,17 2,088,457 14,74 37,88

Executives 3,160,255 12,65 36,17 2,967,455 12,56 37,88
2016 2015
Restricted Stock Restricted Stock
Stock balance Avarage fair value Stock balance Avarage fair value
(number) (a) of shares (number) (a) of shares
Officers 231,262 22,50 102,331 21,34

Executives 365,500 23,23 221,500 21,34
(a) Refers to the balance of unexercised vested and unvested options at the end of the reporting
period.
(b) Refers to the weighted-average exercise price of the option at the time of the stock option
plans, adjusted for inflation based on the Extended Consumer Price Index (IPCA) through
the end of the reporting period. The new Stock Option Plan and Restricted Stock Option
Plan, both implemented in 2015, include no restatement.
29. COMMITMENTS ASSUMED
29.1. Inputs supply contracts

The subsidiary Indústria e Comércio de Cosméticos Natura Ltda. entered into a contract for
the supply of electric power to its manufacturing activities, as follows:
(a) agreement effective until 2017, whereby a minimum monthly volume of 3.6 Megawatts
shall be purchased, equivalent to R$ 373;
91
(b) agreement effective until 2018, whereby a minimum monthly volume of 0.8 Megawatts
shall be purchased, equivalent to R$ 110.
As of December 31, 2016, the subsidiary was in compliance with this agreement’s
commitments.
The amounts are carried based on electric power consumption estimates in accordance with
the contract period, whose prices are based on volumes, also estimated, resulting from the
subsidiary’s continuous operations.
Total minimum supply payments, measured at nominal value, according to the contract, are:
2016 2015
Less than one year 1,253 4,062

More than one year and less than five years 5,781 3,537
Total 7,034 7,599
29.2. Operating lease transactions

The Company and its subsidiaries have commitments arising from real estate operating leases
where the following are located: some of its foreign subsidiaries, administrative offices,
distribution centers in Brazil and properties, where there are shops abroad and in Brazil, of
subsidiary Emeis Holdings Pty Ltd., as well as properties where shops in Brazil of its subsdiary
Natura Comercial Ltda. are located.
Contracts have lease terms of one to ten years and no purchase option clause when terminated;
however, renewal is permitted under the market conditions where they are entered into.
As of December 31, 2016, and December 31, 2015, the commitment made for future payments
of these operating leases had the following maturities:
Company Consolidate
2016 2015 2016 2015
Less than one year 13,883 17,808 71,265 48,184

More than one year and less than five years 29,795 43,156 200,549 130,125
More than five years - 702 71,847 39,184
Total 43,678 61,666 343,661 217,493
92
30. INSURANCE
The Group has an insurance policy that considers principally risk concentration and materiality, and
insurance is obtained at amounts considered by management to be sufficient, taking into
consideration the nature of its activities and the opinion of its insurance advisors. As of December
31, 2016, insurance coverage is as follows:
Insured
Item Type of coverage amount
Industrial Any damages to buildings, facilities, and machinery and
complex/inventories equipment 990,000
55,732
Vehicles Fire, theft and collision for 1,036 vehicles
No loss of profits due to material damages to facilities buildings
Loss of profits and production machinery and equipment -
Industrial Any damages to buildings, facilities, and machinery and
complex/inventories equipment 1,207,000
31. APPROVAL OF FINANCIAL STATEMENTS
The individual and Consolidated financial information statements were approved by the Board of
Directors and authorized for issue at the meeting held on February 22, 2016,
93
Natura
Management Report 2016
Message from the founders

POSSIBILITIES IN LIQUID TIMES
Antonio Luiz da Cunha Seabra, Guilherme Peirão Leal and Pedro Luiz Barreiros
Passos
Uncertainty, and the insecurities it generates, are predominant features of the world in
our times. Liquid times – as the recently deceased Polish sociologist Zygmunt Bauman
called them – are characterized by a process of fragmentation of civilization and human
life, which distances people and countries. Universal fraternal feelings are weakened as
distrust, individualism and egocentrism gain weight.
The overriding sensation is one of profound doubt about our individual and collective
destinations, which provokes anxiety and anguish, a sense of frustration with politics
and grave tensions between nations. Bleak scenarios evoke the reawakening of
nationalism, protectionist impulses, intolerance towards diversity and anything
different, in addition to the risk of serious setbacks in terms of the environment and
healthy, inclusive development. One of the issues that generates uncertainty on a global
level is extreme social inequality, within countries and between them, an alarming
situation for us all.
Given this panorama, it is necessary for us to seek the lights of our fundamental
principles and our origins in humanism and in respect for others. Basic truths, such as
awareness that we are all part of the chain of life on the planet should fuel our thoughts
and our resolve, and guide our actions in the struggle for further advances for mankind.
We remain convinced that is only by feeling and thinking systemically that we will be
able to commit to all the dimensions of life because of our love and respect for it. And it
is this commitment that enables us to see the beauty in uncertainty. It offers us
opportunities for all kinds of innovation, encompassing especially the social realm.
Uncertainty also exercises a particular power: it demands that each and every one of us
– individuals and political, social, business, academic and cultural leaders – do their
part. That we participate in public life and in the discussion about the future we want to
build. Or that we be the change we want to see happen, as Mahatma Gandhi or, more
recently, Barack Obama put it.
Companies, in turn, in defense of their own interests, are able to and are responsible for
assuming the role of agents of social and environmental transformation. They should
understand these two commitments as opportunities for disruptive innovation.
As discussed in the latest World Economic Forum in Davos, it is necessary to concretize
the contribution capitalism can make to reducing the pains caused by social inequality.
We are part of this movement which, based on new paradigms, seeks to generate
development and prosperity for all, especially those who have been left behind.
NATURA
Nourished by our experiences, beliefs and knowledge, we are aware of the scale of the
challenges we are facing. But we also know our vocation, competencies and qualities,
which have enabled us to build a company that has played a key social role in
transforming the lives of hundreds of thousands of people over time. Mainly by means
of our Relationship Selling network.
We experienced many transformations during the course of 2016. Regarding our main
operation in Brazil, the planning which will enable us to improve our results from now
on is clearly defined. In parallel, we intend to maintain the accelerated pace of growth
in our International Operations, identifying the best means of taking our value
proposition to other geographies. Here, particularly worthy of note is the performance
of Aesop, the brand of Australian origin which is now an integral part of Natura and is
expanding globally.
It is important to remember that 2016 was a year of transition also for Natura's senior
management: Roberto Oliveira de Lima, whom we thank and wish all the best,
concluded his term as CEO. The executive leadership of the company has now passed to
João Paulo Ferreira, who initiates a new phase of his highly successful seven years with
Natura. We are excited to have an experienced, cohesive group of high-performing
leaders aligned with a future vision that has been established jointly. For our part, we
continue to engage in driving ever stronger governance for the company.
Permanently aligned with our origins, at Natura we prioritize reverence for relations
and systemic thinking, the foundations of our commitment to sustainability. It is this
fundamental belief in the power of relations and empathy, and the wealth of diversity,
that guides us, strengthens us and illuminates our journey into the future.
And what is the future, if not the fruit of our actions today, in the present?
Message from the Executive Committee
PROSPERITY, BELONGING AND PURPOSE
João Paulo Ferreira, Chief Executive Officer, Agenor Leão, Andrea Alvares, Erasmo
Toledo, Flavio Pesiguelo, José Roberto Lettiere, Josie Romero and Robert Chatwin
We are confident about the construction of the strategic foundations of our new cycle of
prosperity. A series of advances in 2016 sustain our confidence that we will be
successful in turning our operation in Brazil around. This will be done primarily
through the strategy of revitalizing direct selling, our focus for 2017. We are launching a
new value proposition for our consultants which will enable their professional
development, modernize their way of working and boost their earnings. If, on the one
hand, our consumers receive more personalized service that reinforces their experience
with our products, on the other, consultants will perceive in Natura a growing
environment based on new forms of relationship with the company.
We want provide our 1.8 million consultants with more and more opportunities for
prosperity, sustained by the feeling of belonging to a community united around the
purpose of individual and collective enhancement and the ideal of generating positive
impacts in our society.
In 2016, the performance of our operation in Brazil and the exchange fluctuations
throughout Latin America ended up affecting Natura's results. Our consolidated net
revenues totaled R$ 7.9 billion, with Ebitda of R$ 1.3 billion and net income of R$ 297
million. The political and economic crisis in the country led to a reduction in spending
on various categories of cosmetics, fragrances and personal care products and the
impoverishment of the Brazilian consumers' shopping basket.
Our International Operations also faced a more complex business environment.
Changes in government and transitions in economic policy posed new challenges for
Natura's vigorous expansion in Latin America. Even so, we maintained our pace of
growth in local currency, we are the preferred brand in three of the five countries in
which we operate and we passed the mark of 500,000 consultants in the region. In
parallel, we have increasingly strengthened our capabilities for operating in mature
markets. Since joining Natura, the Australian brand Aesop has expanded in size by
four-fold. Our experience in the international retail trade is complemented by the
Natura stores in New York and Paris, spaces that are helping us garner the knowledge
which will enable us to adjust our portfolio and design a scalable model for future
expansion.
Financially speaking, we were more efficient in allocating resources. Similarly, we
drove productivity gains in our production and logistics operations, without
compromising service quality for our consultants and consumers – we deliver more
than 50% of all orders in Brazil and Latin America in up to 48 hours. Our structure is
prepared to support Natura's growth and this enables us to keep our investments
focused on digital technology and marketing, generating impact and faster returns. And
our teams are more engaged than ever, as shown by the increased ratings in the survey
conducted in all areas of the company and the geographies in which it operates, a factor
which bolsters our confidence.
It is our understanding that technology is a powerful enabler, driving the businesses of
our consultants by providing the means and information that permit even closer
relations with our consumers. The Natura Network doubled in size during the year,
became established in Chile and has now arrived in Argentina. The transfer of these
advances to the other operations is happening at a faster and faster rate. We have
already passed the stage of using technology merely to facilitate transactions and are on
course to becoming a data-oriented company, which positively impacts decision
making, productivity and the quality of relations between Natura, consultants and
consumers.
We also progressed in our entry into the retail trade with the inauguration of five
company-owned stores in São Paulo. The return from consumers exceeded our
expectations, as did the way our consultants interacted with these product trial outlets.
This gain in competencies encourages us to extend this channel to other states in Brazil
in 2017. Moreover, we expanded the reach of our operations in drugstore chains. Our
learning from the use of these different channels enables us to visualize an immense
opportunity for driving synergies. Most importantly, we identified that, rather than
sowing conflict, we will be developing a space for cooperation and complementary
activities, in which the consumer will benefit from the multiple manifestations of
Natura with a higher quality buying experience.
In 2016, we also successfully relaunched two of our icons, the Chronos and Ekos lines,
which have always translated our spirit of innovation, capable of generating a
technological response to the demands of our times in a way that only Natura can.
Thus, we are pursuing further disruptive innovations that ally the best of global
cosmetics science with the wealth of our biodiversity assets.
We are engaged in driving a new cycle of prosperity for our entire relationship network.
Our products and our brand are the vehicles through which we intend to generate the
positive impact we are aiming for in society. We continue to be guided by our Reason
for Being, a genuine quest for each individual: well being well, manifest in a
harmonious relationship with oneself, with others and with the whole.
NET REVENUE CONSOLIDATED
(R$ billion)
2012: 6.3
2016: 7.9
6% - compound annual growth rate
NET REVENUE INTERNATIONAL OPERATIONS

(R$ billion)
2012: 0.7
2016: 2.6
NUMBER OF NATURA CONSULTANTS

(million)
2012: 1.6
2016: 1.8
RELATIVE CO2 EMISSIONS

(kg of CO2e / kg of product)
2012: 3.21
2016: 3.17
1.3% - cumulative reduction
FUNDING BY CRER PARA VER PROGRAM*

(R$ million)
2012: 17.3
2016: 38.2
*Refers to the pre-tax profit from sales of products in the Natura Crer para Ver line
(Brazil and International Operations).
Introduction
This is the Natura Management Report 2016, which is the first publication of our
integrated process for reporting results. It brings key information on the company’s
performance, which will be discussed in greater detail in our Annual Report, to be
published on April 11. As in previous years, the report voluntarily adopts the guidelines
of the International Integrated Reporting Council (IIRC), which is a reference in
financial and non-financial integrated reporting.
NATURA AND ITS BUSINESS MODEL

Founded in 1969, Natura is a multinational Brazilian company operating in the
cosmetics, personal care and beauty industries. Under the Natura brand, we are present
in Brazil, as well as in Argentina, Chile, Colombia, United States, France, Mexico and
Peru (we also operate in Bolivia through a local distributor). In the Brazilian market, we
are the leading direct selling player and currently are expanding our footprint in the
retail sector through own stores and partnerships with drugstore chains. We also are
investing in an expanding digital platform.
We have approximately 7,000 employees and our products are sold by 1.8 million
consultants. We have own plants located in Cajamar, São Paulo and Benevides, Pará,
and outsource production in Argentina, Colombia and Mexico. The logistics structure
includes a hub in Itupeva, São Paulo and nine distribution centers, with our most
recent center inaugurated in Argentina, in 2016. Our international footprint also
includes our Australian brand Aesop, in which Natura increased its interest to 100%, in
late 2016.
Our operations are guided by the motto well being well, which represents the
harmonious relationship of the individual with themselves, with others and with the
whole. Over the course of our history, we have strengthened our commitment to
sustainable development. As a company, we created the challenge of generating a
positive financial, social, cultural and environmental impact, which is consolidated in
our Sustainability Vision 2050, launched in 2014. In the same year, we also became the
first listed corporation to be certified by B Corp. We are concluding the process to
renew this certification, which identifies a global movement of companies that attribute
equal value to their economic, social and environmental results.
We combine sustainable design and traditional and scientific knowledge to develop
products under an open innovation model, which involves a network of Brazilian and
global partners. We work jointly with suppliers to reduce the impacts of our products
by developing the chain for using recycled materials, such as PET and glass. More than
80% of our formulas are plant-based, i.e. renewable, and we maintain relations with
2,000 families in the Amazon region to source active ingredients from Brazil’s
biodiversity, thereby encouraging production techniques that contribute to the
conservation of 256,000 hectares of standing forest.
Strategy
After two years strengthening the foundations for a new cycle of prosperity, in 2017,
Natura’s focus will be on accelerating the implementation of its strategy. We are guided
by six drivers, with four of them dedicated to recapturing our market share in Brazil.
1 Revitalizing direct selling – Relationship Sales, which always have been a Natura
hallmark and the main strength of our company, also will be maximized to enhance
consumers’ experience with our brand. Over the course of 2016, we built a new value
proposition for consultants. This included valuing their development (generating
returns in income, benefits, recognition and personal development) and segmenting
them into various profiles.
2 Repositioning the Natura brand – The launch of the campaign Viva Sua Beleza
Viva, in 2016, was the first major step in raising awareness of the Natura as an expert in
beauty and working to rebuild relations with consumers. We will continue to move in
this direction to build the perception of a vibrant brand that is open to dialogue.
3 Strategic review of the brand architecture – We want Natura to continue

launching important innovations in the market, such as the re-launch of the Ekos and
Chronos lines in 2016. To achieve this, we integrated the marketing, sustainability and
innovation areas under the same executive department. We want to create products
that combine high technology, the sustainable use of biodiversity and disruptive
concepts.
4 Multi-channel shopping experience – In 2016, we began to understand the

synergies and complementarity between Relationship Sales and our digital channels
and retail. This process is helping us to revise our portfolio and commercial strategies.
As a result, we will be present in consumers’ shopping experience, offering the
adequate level of assistance, convenience and experimentation.
Two drivers concern our international operations:

5 Strengthening our position in Latin America – By sustaining strong annual
growth, we hope to figure, by 2021, among the top four producers of cosmetics,
fragrancies and toiletries in all markets in which we operate. To achieve this, we are
accelerating the adaptation of the evolutions developed in Brazil to our other
operations, such as digitalization and segmenting Relationship Sales.
6 Expanding in developed and developing markets – We aspire to take our

brand and value proposition to mature markets in Europe, Asia and North America. We
transformed our operations in France and the United States, and have successfully
identified which lines are more attractive for countries with this profile, such as Ekos,
Chronos and Mamãe e Bebê. We also learned many important lessons from our
experience with the expansion of Aesop.
Our strategies are also supported by facilitating processes that ensure the foundations
for the evolution of business. In 2016, we captured efficiency gains in the allocation of
our financial resources as well as in operations and logistics. We continued the digital
transformation by modernizing our Relationship Sales and launching e-commerce
operations.
Our actions converge to attain the Sustainability Vision 2050, which expresses Natura’s
commitment to generating positive impacts in four dimensions: economic, social,
environmental and cultural.
Evolutions and challenges

Evolutions Challenges
We maintained consistent growth in the Work to strengthen direct selling with the
International Operations, which account for implementation of a new value proposition for
32.3% of consolidated net revenue in 2016. our consultants.
We launched EP&L, or “environmental Strengthen the operation in Brazil in an
accounting.” Natura is the first company in the unfavorable economic environment.
world to conduct such a study for its entire
portfolio and include the product-use phase.
The Natura Network platform doubled in size Support the growth pace of the International
within two years and already is a leading Operations.
beauty products digital channel in Brazil.
In 2016, we commemorated ten years without Enhance the multichannel shopping
animal testing experience through the synergies between
relationship sales and expanding the digital
and retail channels.
Natura is one of world’s 20 most sustainable Have an increasingly agile and innovative
companies, according to Corporate Knights’ company that responds to the rapid changes of
Global 100 ranking. our times.
The Crer para Ver line set a new record for Make progress on achieving our 2020
funding, which surpassed R$38 million in ambitions that are part of our Sustainability
Brazil and in the International Operations. Vision 2050.
Performance in 2016
Despite the economic scenario marked by lower household income and consumers
seeking lower-price alternatives, we posted revenue growth in the fourth quarter,
driven by our Christmas strategy. Natura’s performance in 2016 was affected by lower
revenue in Brazil, mainly in the third quarter, and exchange rate fluctuations in Latin
America, which reduced the growth in International Operations. In 2016, consolidated
net revenue was R$7.9 billion, stable in relation to 2015. Consolidated EBITDA
contracted 10% to R$1.3 billion, despite the 46% growth in Latin America and 28%
growth at Aesop. These circumstances demanded highly disciplined management of
expenses and working capital. We ended the year with capex of R$306 million, in line
with our estimates, due to the more rigorous criteria adopted for managing our
investments.
Despite this scenario of restraint, Natura continued to create value for its entire
relationship network. Sales of the Crer para Ver product line, which contributes funds
to improve education through the Natura Institute, grew from R$30 million in 2015 to
R$38.2 million in 2016, considering Brazil and Latin America. Similarly, we allocated
R$220 million to the Pan Amazon region, mainly for the acquisition of biodiversity
inputs (64%), and we are close to meeting the target of R$1 billion in business
transactions in the region between 2011 and 2020, having reached R$973 million by
end-2016. These resources generate a social and environmental impact by valuing the
generation of wealth from the standing forest. In exchange, our local partners supply
some of the main active ingredients of our technological base.
Still from the environmental standpoint, the lower production volume did not affect the
performance of relative CO2 emissions, which remained stable at 3.17 kgCO2e per
kilogram of product invoiced. This result was achieved mainly through improvements
in logistics, such as expanding the use of cabotage to transport products in the North
and Northeast regions. The same cannot be said of our relative water consumption per
unit produced, which increased by 8% (however, considering absolute water
consumption, water withdrawals declined by 5% compared to 2015).
DISTRIBUTION OF DIVIDENDS
On February 10, 2017, Natura paid interest on equity, for the period from January 1 to
November 30, 2016, in the amount of R$61.8 million, which correspond to
R$0.143628930 per share. This amount represents R$52.5 million in interest on
equity, net of withholding of income tax at source, which corresponds to
R$0.122084591 per share.
On February 22, 2017, the Board of Directors approved the proposal to be submitted to
the Annual and Extraordinary Shareholders Meeting to be held on April 11, 2017 for the
payment, on April 20, 2017, of dividends for fiscal year 2016 and interest on equity for
December 2o16 in the amounts of R$51.3 million and R$4.8 million net of income tax
at source, respectively.
The aggregate amount of dividends and interest on equity represents a net payout of
R$0.252308702 per share and corresponds to approximately 40% of net income for
2016.
Value added
2014 2015 2016
Economic (R$ million)
Consolidated net revenue 7,408.4 7,899.0 7,912.7
Consolidated EBITDA 1,554.5 1,495.9 1,343.6
Consolidated net income 732.8 513.5 296.7
Free cash flow 208.6 818.1 469.9
Average daily trading volume in the stock1 47.9 30.2 39.1
% revenue contribution from Intl. Ops.² 19.2 29.0 32.3
Distribution of wealth (R$ million)
Shareholders3 709 360 119
Retained earnings 24 154 178
Consultants 4,122 4,421 4,430
Employees 1,075 1,245 1,327
Suppliers 5,925 6,374 6,512
Government 1,724 2,149 2,009
Environmental
Relative GHG emissions (kg of CO2e/kg of 3.00 3.17 3.17
product manufactured)4 5
GHG emissions in the value chain (‘000 332,326 321,267 303,424
tons)5
Water consumption in Brazil (liters/unit 0.45 0.49 0.53
manufactured)
% of post-consumer recycled materials in 1.2 2.9 4.3
Brazil
% eco-efficient packaging in Brazil6 29 26 20
Quality of relationships (%)
Employee engagement survey (Brazil and 3.80 N/A 3.95
Intl. Ops.)7
Loyalty of suppliers in Brazil8 24 18 21
Loyalty of NCs in Brazil8 28 30 31
Loyalty of NCAs in Brazil8 30 29.5 32
Loyalty of Consumers in Brazil8 64 60 56
Loyalty of NCs International Operations 39 37 37
Loyalty of NCAs International Operations 45 52 53
Social
Overall rating in brand image survey in 74 73 72.5
Brazil (%)9
Earnings Crer para Ver (R$ million)10 25.5 30.0 38.2
Cumulative business volume in the 582 752 973
Amazon region since 2011 (R$ million)
Families benefited in Supplier 3,121 2,251
2,358
Communities
Caption:
NCs: Natura Consultants;
NCAs: Natura Consultant Advisors
1. Source: Bloomberg.
2. Excludes local distribution in Bolivia.
3. Amounts refer to interest on capital and dividends for the fiscal years.
4. CO2e (or CO2 equivalent): measure used to express greenhouse gas emissions based on the global
warming potential of each gas.
5. Includes scopes 1, 2 and 3 of the GHG Protocol. 2016 inventory audited by KPMG.
6. Packaging at least 50% lighter than regular/similar packaging; or composed of 50% potentially post-
consumer and/or renewable non-cellulosic materials that do not increase mass.
7. As part of the realignment of the people management strategy, we began disclosing the Natura
Engagement Survey, which more clearly portrays the organization’s health (was not conducted in 2015).
In 2016, we ceased to conduct the workplace climate survey. Source: Gallup.
8. Loyalty survey - Ipsos Institute.
9. Brand Essence Survey - Ipsos Institute.
10. Includes the funds raised in Brazil and in the International Operations.
Management
GOVERNANCE
After two years as Chief Executive Officer at Natura, Roberto Lima resigned in October
2016. During this period, he was responsible for consolidating our current strategy and
implemented significant changes, such as the creation of a solid Executive Committee,
the implementation of the digitalization and multi-channel programs and the
repositioning of the Natura brand. To succeed him in our executive leadership, João
Paulo Ferreira was selected to serve as the new CEO. Aligned with our beliefs and with
seven years of experience leading key processes at the company (such as logistics,
sustainability and sales), he holds the competencies required to accelerate the
implementation of our strategy over the coming years. His efforts will complement
those of our talented and young Executive Committee, which balances Natura's
expertise with fresh leadership that brings new visions and ideas.
To strengthen the connection between the Board of Directors and the Executive
Committee, the Governance Department will actively participate in the two bodies. In
addition to strengthening their interaction, the goal is to improve monitoring of the
strategy and to streamline procedures.
The Board of Directors was renewed with two new members: Carla Schmitzberger and
Roberto Marques. They bring expertise in international expansion, marketing,
consumer goods, sales strategy, retailing and much more. In the same period, Luiz
Ernesto Gemignani left the Board, after nine years of valuable contributions to Natura.
Under this new configuration, we now have nine directors, 55% of whom are
independent, as defined by the Novo Mercado Listing Regulations.
RISKS
Natura classifies its risks into four main groups: “Strategic,” which are related to the
company’s business model, governance and the environment in which it operates;
“Operational,” which are related to internal processes and business continuity;
“Financial,” which involve market, credit and liquidity risks; and “Regulatory,” which
involve the industry’s regulatory environment.
Every year, we conduct an analysis of Natura’s Strategic Plan, its guidelines (for Brazil
and the International Operations) and its facilitators. As a result, we created a map
containing the main risks with impacts on the execution of the company’s strategy. It
includes, among others, the risks related to brand management, commercial model,
strategy execution, innovation capacity, business continuity, financial risks, external
environment (political and economic scenario in the countries where Natura operates),
social and environmental issues and compliance. We also have been giving special
attention to the tax scenario in Brazil and are constantly monitoring this situation at
both the state and federal levels.
In 2016, we expanded our internal controls matrix to our operations in Latin America,
which involved aligning processes with those existing in Brazil. At Aesop, this internal
controls integration will begin in 2017.
Note that all work involving the management of risks and controls is monitored by the
Executive Committee and, through the support committees of the Board of Directors,
also by the directors.
COMPLIANCE
Our Compliance Department completed one year in 2016, and the channel for
reporting incidents of corruption, which has existed for ten years, was strengthened.
The reports received are evaluated and discussed by the Ethics Committee, which
provides support to the Executive Committee. Suppliers, partners, clients and
consumers can report incidents via the e-mail ouvidoria@natura.net. In 2016, we
received the seal Pro-Ethics Company seal from the joint initiatives of the Office of the
Federal Controller General (CGU) and the Ethos Institute, which recognizes
organizations engaged in creating a reputable and transparent business environment.
Natura’s Code of Conduct was drafted in 2006 and has been subjected to regular
reviews, with the most recent one conducted last year.
Operations
BRAZIL
RELATIONSHIP SALES
In 2016, we worked intensively to build the foundations of our project to revitalize
direct selling, which seeks to help consultants attain higher levels of productivity,
personal development and quality of life. The improvements we made to our CRM tools
in recent years, combined with the advances in digital means, provide the knowledge
we need on our consultants' profile and our consumers’ practices.
With this information, and the support of the HDI-CN project (inspired by the UN
Human Development Index), we were able to map our consultants' living conditions
and needs. We outlined a strategy for segmenting the network into three groups:
professionals connected with the beauty universe (Natura Beauty Experts), small
entrepreneurs with physical points of sales (Natura Beauty Entrepreneurs) and other
consultants with low, medium or high sales volumes (Natura Beauty Consultants). For
each group, the strategy adopted offers distinct models for furthering development and
boosting incomes.
Last year’s challenging market scenario also adversely affected the number of active
consultants in Brazil, due to lower productivity and higher delinquency. We believe that
this new value proposition for consultants is the right answer for reversing this
scenario. The plan has not had sufficient time to influence these indicators, given that it
will be launched gradually between end-2016 and mid-2017. This includes new
practices for managing the sales team, with closer monitoring capable of continually
identifying improvement gaps.
DIGITAL CHANNELS
In 2016, the Natura Network doubled in size and today is one of the largest beauty
products digital platforms in Brazil. The number of Natura Digital Consultants who
work on the platform as direct selling digital franchisees already has reached 93,000,
who serve more than 1.5 million registered consumers. In April, the same month in
which Natura opened its first brick-and-mortar store, we also started offering e-
commerce to our consumers. With this option, the website strengthens relations with a
public that is normally more distant from Relationship Sales and seeks greater
convenience. This new development accelerated sales, with the Natura Network already
reaching breakeven. The management of promotions and marketing investments also
contributed to this performance.
The Natura Network generates knowledge that adds value to our channels. Digital tools
are major allies for identifying consumer trends and the categories best suited to each
channel, and generate data for adjusting the market strategy and promotions
management for our different sale formats. The buying frequency of Natural Digital
Consultants is also higher with digital tools. During 2017, the idea is for all new
consultants to have their own digital selling space.
In addition to the Natura Network, the consultants have other important digital tools.
Launched in 2016, the Natura Consultant app for smartphones and tablets enables
consultants to place orders, consult promotions, organize deliveries and obtain
support. It incorporates other apps with different functionalities, such as Natura
Network Chat (through which consumers on our sales platform can get answer to their
questions in real time). Today, more than 250,000 Natura Consultants use these apps.
RETAIL
We began our experience in Brazil’s retail industry in 2016, with the opening of five
stores in São Paulo as of April. The initial results, which surpassed our expectations,
encouraged us to accelerate this channel’s rollout during 2017, including to other cities
in Brazil. The strategy of opening stores in shopping malls, which target the A and B
income classes, demonstrated the pent-up demand among these customers. All stores
adopt the concept of encouraging experimentation. This trait also has been explored by
our consultants and their clients, which can take advantage of the stores to learn more
about the products before ordering.
Another front of our retail operations is offering daily-use products through drugstore
chains. After beginning to sell the SOU product line in this channel, we doubled the
number of points of sale in the Raia/Drogasil Chain, which has reached all regions of
Brazil. Since December, we introduced the sub-brand in the chain Drogaria São Paulo
and now are reaching as well the chains Pacheco in Rio de Janeiro and Panvel in Rio
Grande do Sul. In 2017, we will include in this initiative the Tez lines of face care and
make-up products.
INTERNATIONAL OPERATIONS
LATIN AMERICA
We continued to invest in strengthening relations with consultants in our operations in
Latin America. Once again, the loyalty/engagement results reflected this effort. The
consolidated consultant base expanded 7.5% in 2016 to 543,000, with the highlights
the growth of 15% in Argentina and 22% in Colombia. The slight reduction in Mexico
(4%) was due to internal management adjustments, which already have been
concluded. In the countries where Natura’s operations are more consolidated
(Argentina, Chile and Peru), the focus is on boosting productivity accompanied by
moderate channel growth. In the operations under development (Colombia and
Mexico), the focus is on expanding the number of consultants and increasing the level
of productivity.
In 2016, the Natura Network completed its first year of implementation in Chile, which
was very well received, and is already expanding to Argentina. Given the growing
demand observed, we are accelerating the rollout to the other operations. The lessons
that Natura has amassed through its retail operations are already beginning to be
considered for its Latin American operations.
AESOP
In 2016, Natura opened 41 new exclusive stores in the world, bringing the total to 176 in
20 countries in America, Asia, Europe and Oceania. Its products also are sold in 85
department stores. Since the beginning of the integration with Natura, Aesop has
expanded in size by four-fold. In 2016, Aesop’s net revenue and EBITDA in Brazilian
real grew by 34% and 27.5%, respectively (33.5% and 33.2% in local currency). In
February 2017, the brand commemorates its 30th anniversary with the prospect of
continuing to open stores at an accelerated pace, supported by a strong growth strategy.
Aesop’s portfolio has 110 products, with 80 different formulations, and on average ten
new items are launched each year.
EBITDA LATIN AMERICA (R$ million)
2015 2016 growth rate
169.7 247.6 46%
Consultants Latin America (in thousands)

2015 2016 Change
2015 x 2016
Argentina 139.6 161.2 15%
Chile 72.7 74.3 2%
Mexico 130.4 125.8 -4%
Peru 90.5 94.0 4%
Colombia 71,9 87,8 22%
Total 505,1 543,0 7,5%
AESOP IN NUMBERS
176 STORES
(DECEMBER 2016)
41 NEW STORES IN 2016
20 COUNTRIES, ON 4 CONTINENTS
Products and innovation
Natura is dedicated to accelerating the pace with which its recognized capacity for
innovating sustainably creates value for the brand and develops new products and
services. To achieve this, the Marketing, Innovation and Sustainability departments
now report to the same executive officer. This reorganization aims to strengthen
Natura’s way of fostering innovation: identifying consumers’ needs and society’s
emerging issues, developing solutions that meet these needs and respond in the form of
a product or service, and strengthening the relationship between sub-brands and social
and environmental causes.
The year 2016 marked the renewal of important brands in our portfolio. The Ekos line
was re-launched with new formulas that demonstrate even more the benefits of each
active ingredient from Brazil’s social biodiversity. The use of recycled PET in the line’s
plastic packaging increased from 50% to 100%, helping to increase the use of post-
consumer recycled material. In addition, the packaging for refills of Ekos products is
made from 100% green polyethylene.
One of Ekos’ new developments was the launch of the fragrance Flor do Luar, which is
inspired by a flower with the same name that is found on the banks of the Negro River.
Alongside Natura Humor, it was one of the best performers in women’s fragrances in
the second half of 2016.
A pioneer in challenging beauty and behavioral paradigms, the Chronos line
commemorated its 30th anniversary and also gained new formulas and packaging, with
its combination of natural ingredients and science. In make-up, the brand Una renewed
its language and launched more than 100 products in 2016, with competitive prices
compared to its international competitors.
The investment in innovation was lower than in previous years, corresponding to 2.4%
of net revenue. The innovation index, which is measured by the sales performance of
products launched in the last two years, stood at 54.3%, proving once more the value of
innovation to our revenue. Despite the lower percentage compared to 2015, the index
remained high for the levels of the cosmetics industry.
Innovation Indicators 2014 2015 2016

Investment in innovation (R$ million) 216 221 187
Percentage of net revenue invested in innovation (%) 3.0 2.8 2.4
Number of products launched 1 239 220 255
Innovation Index (%) 2 67.9 58.9 54.3
1. The number of products launched includes only products that represent a new value
proposition for consumers, such as new packaging and formulations.
2. The innovation index corresponds to the sales of products launched in the last 24 months
divided by total gross sales in the year (Brazil only).
Social and Environmental Impact
SDGs
As a member of the United Nations Global Compact, we are committed to the 2030
Agenda for Sustainable Development. We believe that the Sustainable Development
Goals (SDG) are a call for companies to rethink their businesses toward a new form of
capitalism. As such, in 2016 we analyzed impacts to assess the transformational
potential of Natura’s operations with regard to the 17 goals to be reached by 2030. The
analysis indicated that, through initiatives related to carbon, solid waste, empowering
women, education, water, job creation and the Amazonia Program, we already
contribute to progress on 15 of the 17 SDGs.
We believe that, to attain the scale required by our transformational activities, our main
sub-brands must become platforms that encourage new production models and new
consumption standards. In 2016, we were the first company in Latin America to report
the results of its Environmental Profit and Loss (EP&L) statement. The study performs
an “environmental accounting” of the company by calculating the positive and negative
impacts of all phases of production, sale and final disposal of solid waste. In 2013 (the
period selected for the first statement), Natura’s activities resulted in an environmental
impact of R$132 million. Excluding the initiatives to promote efficiency and reduce
greenhouse gas emissions, such as replacing regular packaging with refills and
expanding the use of maritime and inland waterway transportation to ship products,
the result would have been R$29 million higher. The data for 2014, 2015 and 2016 are
in the final phase of analysis for reporting.
In 2016, we also made important advances in the Amazonia Program, reaching the
mark of R$972.6 million business transactions in the region, which helped to preserve
256,000 hectares of standing forest.
Crer para Ver Line

The funds raised through Crer para Ver, a line of non-cosmetics products whose profits
are used to support actions to improve education, continues to grow in Brazil and in the
International Operations, to surpass R$38 million in 2016. The engagement by
consultants and consumers in the program’s value proposition is demonstrated by its
continued growth, despite the year marked by lower consumer spending.
The funds generated by Crer para Ver are managed by the Natura Institute and
invested in programs such as the Learning Community, which works to foster social
transformation at school by engaging families and the local community. It was
developed in partnership with 24 education departments in Brazil, which combined
oversee 120 schools. The institute also conducted an important study on full-time
education, which fostered debate on the topic and had a positive influence on public
policy in the field.
In 2016, a portion of the funds raised by Crer para Ver began to be used to finance
educational opportunities for our consultants. Based on the results of the HDI-CN, we
launched a program that offers the possibility of pursuing on-campus and e-learning
programs with discounts or full scholarships. The offering includes undergraduate
studies at Estácio University, preparatory programs for university admissions exams
(Enem) through the online platform Geekie Games and vocational programs in
partnership with Prepara Cursos. Little more than four months since the program’s
launch, around 10,000 consultants have resumed their studies through one of these
options.
In the International Operations, funds from Crer para Ver were used to expand the
number of schools participating in Argentina, Chile, Colombia, Mexico and Peru.
Today, 160 institutions participate in the project, which works to transform them into
Learning Communities. In Argentina, the departments of education in two provinces
adopted the model in their official programs. In Peru, the concept was incorporated
into the country’s most important government program for preparing teachers.
SUBMISSION TO THE MARKET ARBITRATION CHAMBER
The Company, its shareholders, officers, directors and members of the Audit Board
agree to settle exclusively through binding arbitration, which shall be conducted in the
Market Arbitration Chamber, any and all disputes or controversies that may arise
between them that are related to or arise from, in particular, the application, validity,
effectiveness, interpretation, violation and related effects of the provisions in Federal
Law 6.404/76, the Company's bylaws, the rules published by the National Monetary
Council (CMN), by the Central Bank of Brazil and by the Securities and Exchange
Commission of Brazil (CVM), as well as those in the Novo Mercado Listing Regulations,
the Regulations of the Market Arbitration Chamber, the Regulations for Application of
Pecuniary Sanctions in the Novo Mercado and the Novo Mercado Participation
Agreement.
RELATIONSHIP WITH INDEPENDENT AUDITORS

In compliance with Instruction 381/03 issued by the Securities and Exchange
Commission of Brazil (CVM), we inform that the Company and its subsidiaries adopt as
formal procedure consulting the independent auditors Ernst & Young Auditores
Independentes S.S. to ensure than the rendering of services other than auditing do not
impair the independence and objectivity required to perform the independent audit
services, as well as obtaining due approval from its Audit Committee. The Company's
policy on hiring the services of independent auditors ensures that there are no conflicts
of interest or loss of independence or objectivity.
The Company and its subsidiaries declare that the independent auditors have provided
services that are not related to the external audit for the 2016 fiscal year, which
consisted of adapting the SAP APO (tool used by Natura for planning its production,
procurement and transfers) to meet the needs of the new business scenarios. The
contracts amounted to approximately R$ 187.0 thousand, which represents
approximately 5% of total global audit fees for the 2016 financial statements, and the
services were all executed during fiscal year 2016.
***
Board of Directors
Antonio Luiz da Cunha Seabra

Guilherme Peirão Leal
Pedro Luiz Barreiros Passos
Co-chairs
Carla Schmitzberger
Giovanni Giovannelli
Marcos de Barros Lisboa
Plínio Villares Musetti
Roberto de Oliveira Marques
Silvia Freire Dente da Silva Dias Lagnado
Directors
Executive Committee
João Paulo Brotto Gonçalves Ferreira

Chief Executive Officer
Agenor Leão de Almeida Junior

Chief Digital Technology Officer
Andrea Alvares
Chief Marketing, Innovation and Sustainability Officer
Erasmo Toledo
Chief Latin America Business Officer
Flavio Pesiguelo
Chief Human Resources Officer
Josie Peressinoto Romero

Chief Operations and Logistics Officer
José Roberto Lettiere

Chief Financial and Investor Relations Officer
Robert Claus Chatwin

Chief International Expansion Officer
Statutory Board of Executive Officers
João Paulo Brotto Gonçalves Ferreira

Chief Executive Officer
Andrea Alvares
Chief Marketing, Innovation and Sustainability Officer
Agenor Leão de Almeida Junior

Chief Digital Technology Officer
José Roberto Lettiere

Chief Financial and Investor Relations Officer
Robert Claus Chatwin

Chief International Expansion Officer
Document owner
Enzo Raphael Russo
Accounting Manager
CRC: 1SP275298/O-4
Earnings Release 4Q16
EARNINGS
RESULTADOS
RELEASE
4T16
4Q16
4T16
São Paulo, 22 de fevereiro de 2017 A Natura

São Paulo,S.A.
Cosméticos February 22, 2017 NATU3)
(BM&FBOVESPA: Natura
Cosméticos S.A. (BM&FBOVESPA:
anuncia hoje os resultados do quarto NATU3)
announces
trimestre de today
2016 its results
(4T16). As for the fourth
informações
quarter ofe 2016
financeiras (4Q16) and
operacionais the year
a seguir, 2016.
exceto
Except where stated otherwise, the
onde indicado o contrário, são apresentadas financial
eminformation in this release
base consolidada, is presented
de acordo com onas a
consolidated basis, in accordance
normas internacionais de relatório financeiro with
International
IFRS. Financing Reporting Standards
(IFRS).
Contents
Introduction ......................................................................................................................................................................................................................1
1. social and environmental highlights .................................................................................................................................................... 5
2. economic performance ................................................................................................................................................................................. 8
2.1. revenue ........................................................................................................................................................................................................... 9
2.2. innovation & products ........................................................................................................................................................................ 10
2.3. gross margin ............................................................................................................................................................................................ 10
2.4. operating expenses ............................................................................................................................................................................... 11
2.5. other operating income and expenses ..................................................................................................................................... 11
2.6. EBITDA ........................................................................................................................................................................................................... 12
2.7. net income (loss) ...................................................................................................................................................................................... 12
2.8. cash flow ...................................................................................................................................................................................................... 14
2.9. indebtedness ............................................................................................................................................................................................ 14
3. dividends ................................................................................................................................................................................................................15
4. NATU3 performance ..................................................................................................................................................................................... 16
5. conference call & webcast ...................................................................................................................................................................... 17
6. investor relations .......................................................................................................................................................................................... 17
7. balance sheet .................................................................................................................................................................................................... 18
8. statement of income ..................................................................................................................................................................................... 19
9. statement of cash flows ............................................................................................................................................................................. 20
10. glossary ................................................................................................................................................................................................................. 22
Introduction
In the fourth quarter of 2016, consolidated gross revenue stood at R$ 3,198.7 million (stable vs. 2015). In
Brazil, gross revenue advanced 1.6% over 4Q15, showing a reversal of the results reported in 3Q16.
Consolidated EBITDA was R$ 462.1 million (+2% vs. 4Q15), net income was R$ 201.8 million (+38.8% vs. 4Q15)
and free cash flow came to R$ 402.9 million.
In the year, consolidated gross revenue was R$ 10,993.1 million (+1.7% vs. 2015), while net revenue stood at
R$ 7,912.7 million (+0.2% vs. 2015). EBITDA was R$ 1,343.6 million (-10% vs. 2015), net profit was R$ 296.7
million (-42.2 vs. 2015) and free cash generation was R$ 469.9 million.
The series of advances made in 2016 support our belief that we will successfully recover the performance
of our operation in Brazil. This will be achieved primarily through the strategy to revitalize direct selling,
which is our focus for 2017. We are launching a new value proposition for our consultants that will further
their professional development, modernize the way they work and consistently increase their income. Our
consumers will receive better service that will strengthen their experience with our products, while our
consultants will perceive Natura as an opportunity for growth and prosperity through new ways of
relating with the company.
Technology is a powerful enabler for driving by providing the means and
information required for intensifying the relationship with consumers. We are already past the stage of
using technological resources only as transactional facilitators and are looking to become a data-
oriented company, which supports the decision-making process, productivity and the quality of the
relations between Natura, consultants and end consumers.
The Rede Natura (Natura Network, our online business unit) doubled its sales compared to 2015, ending
the year with R$ 106.7 million (R$ 50.1 million in 2015), registering 93,000 Digital Natura Consultants and
1.5 million consumers.
We progressed with our retail strategy by launching five exclusive brick-and-mortar stores in shopping
centers in the city of São Paulo, all of which have performed better than expected. We also started
distributing the Sou line in major drugstore chains in Brazil.
We had important relaunches during the year, such as the brands Ekos, Tododia, Chronos, Una and
Humor, as well as the launch of the Ekos Flor do Luar fragrance for women.
In Latin America, gross revenue advanced 30.9% in local currency during the year, driven by productivity
gains and expansion of our network of consultants. we are the preferred brand of consumers in Argentina,
Chile and Peru. Aesop, in which we already hold a 100% interest, grew 33.5% in local currency during the
year, with the opening of 41 signature stores, bringing the total to 176 units across 20 countries.
1
RESULTS
Consolidated 4Q16
R$ million 4Q16 4Q15 Change (%) 2016 2015 Change (%)
Brazil Gross Revenue 2.293,1 2.256,3 1,6 7.760,5 7.892,1 (1,7)

International Gross Revenue 905,6 943,9 (4,1) 3.232,6 2.914,3 10,9
Consolidated Gross Revenue 3.198,7 3.200,2 0,0 10.993,1 10.806,4 1,7
Brazil Net Revenue 1.571,7 1.579,8 (0,5) 5.335,1 5.593,7 (4,6)
International Net Revenue 723,0 752,6 (3,9) 2.577,6 2.305,2 11,8
Consolidated Net Revenue 2.294,7 2.332,4 -1,6 7.912,7 7.899,0 0,2
% Share International Net Revenue 31,5% 32,3% (0,8) pp 32,6% 29,2% 3,4 pp
Brazil pro-forma EBITDA 358,5 345,4 3,8 1.004,1 1.251,3 (19,8)
% Brazil pro-forma EBITDA Margin 22,8% 21,9% 0,9 pp 18,8% 22,4% (3,5) pp
International pro-forma EBITDA 103,6 107,7 (3,8) 339,6 244,6 38,8
% International pro-forma EBITDA Margin 14,3% 14,3% 0,0 pp 13,2% 10,6% 2,6 pp
Consolidated EBITDA 462,1 453,2 2,0 1.343,6 1.495,9 (10,2)
% Consolidated EBITDA Margin 20,1% 19,4% 0,7 pp 17,0% 18,9% (2,0) pp
Consolidated Net Income* 201,8 145,4 38,8 296,7 513,5 (42,2)
% Consolidated Net Margin 8,8% 6,2% 2,6 pp 3,7% 6,5% (2,8) pp
Internal cash generation 248,9 257,7 (3,4) 631,4 887,5 (28,9)
Free cash flow 402,9 169,4 137,8 469,9 818,2 n/a
Net Debt / EBITDA n/a n/a n/a 1,40 1,13 23,79
*Net (Loss) income attributable to owners of the Copany
Note: Growth in Local Currency ex Aesop: 26,4% in 4Q16 vs. 4Q15 and 29,3% in 2016 vs. 2015
Consolidated EBITDA grew in the quarter due to the following factors:

_Expenses in Brazil: rigorous management Consolidated EBITDA Change 4Q16
(R$ million)
of expenses which resulted in greater 637
-34
savings and efficiency; 131 24,7% -141
453 243 462
44 9
19,4% -1 20,1%
_New Business units: improvements from 108
25,0%
104
14,3% 14,3%
new initiatives implemented in 2016 Rede
Natura (online channel), retail and 345 394 358
21,9% 24,5% 22,8%
drugstores;
_International Operations: positive results
coming from Latin America and Aesop,
disregarding the FX impact; Brazil International Operations
_Tax burden: 1.5pp. increase given higher ICMS excise value value margin);
_FX: Brazilian real appreciation over the basket of currencies in Latin America, which impacted both costs
and .
Brazil in 4Q16
Despite the still-challenging macro-economic scenario, with falling household income and consumers
seeking lower-priced alternatives, we posted gross revenue growth of 2% on 4Q15, driven by our Christmas
strategy. On the other hand, net revenue fell 0.5% compared to 4Q15, pressured by the 1.5 p.p. increase in
the effective tax rate due to the higher rates of ICMS tax and higher value added margin (MVA).
2
EBITDA improved by 4% on 4Q15, with EBITDA margin expanding 0.9 p.p. Our selling, general and
administrative expenses remained stable in relation to 4Q15, despite the higher inflation rate in the year,
which is explained by the ongoing efforts to make our operations more efficient.
International Operations in 4Q16
In Latam, we maintained accelerated gross revenue growth of 29% in local currency, with operating
leverage gains, which were negatively impacted at consolidation level by the appreciation in the Brazilian
real against a basket of ies. Our network (average number of consultants in the period)
expanded 8% compared to 4Q15.
Aesop also maintained accelerated revenue growth in local currency of 29% compared to 4Q15. We
opened 41 new signature stores, and posted same-store sales growth of 12% in the year; the department
stores reached 85 units, up from 73 in December 2015, and posted same-store sales growth in the year of
16%.
EBITDA from the International Operations, including Latam, Aesop and France, stood at R$ 103.6 million
and was 4% lower than in 4Q15 (R$107.7 million). The main impact was from the stronger Brazilian real in
relation to the other currencies, and the fact that in France we had a non-recurring expense of circa R$ 6
million from the termination of the direct selling channel.
Consolidated annual result
Gross revenue advanced 2% from 2015, with a 0.3 p.p. drop in gross margin, mainly reflecting a higher
effective tax rate in Brazil and currency headwinds in Latam. In Brazil, the effective tax rate increased by
2.1 p.p. compared to 2015 and by 4.4 p.p. compared to 2014, which impacted the P&L by R$343.4 million. In
the year, the basket of Latam currencies weakened by 24% against the Brazilian real.
EBITDA fell 10% in 2016 as a result of similar factors that impacted the results in the quarter:
_Expenses in Brazil: improvement due to a
Consolidated EBITDA Change 2016
(R$ million) more rigorous budget management which
264
1.800
21,2% -186 resulted in greater savings and efficiency;
1.496
18,9% -34 59 14 -270
509 1.344
245 17,0% 17,0% _New Business Units: positive results from
10,6%
340
13,2% the initiatives implemented in 2016, such as
1.251 1.291 our Rede Natura (Natura Network),
22,4% 23,4% 1.004
18,8% entrance in the retail segment and
distribution drugstore chains;
_International Operations: growth in Latin
Brazil International Operations
America and Aesop, not accounting for the
FX effects;
_Effective tax rate: 2.1p.p. increase over 2015;
_ FX: Brazilian real appreciation over the basket of currencies in Latin America, which impacted the COGS
Net income decreased 42%, reflecting the performance in Brazil, the unfavorable foreign exchange
variation and non-cash effects (revaluation of the acquisition of the remaining interest in Aesop and the
mark-to-market adjustment of hedge instruments).
We maintained our efforts to efficiently and rigorously manage CAPEX (R$ 306 million in 2016 vs. R$ 383
million in 2015) and expenses. We optimized working capital investment in our operations, with lower
3
inventory coverage and improvement in cash conversion cycle. As a result, our free cash generation in the
year was R$ 470 million.
4
1. social and environmental highlights

Partnerships that generate positive impacts
Natura partners with Google Brasil and with the NGOs Ecam, Kaninde and Imaflora in the New
Technologies and Traditional Communities Project, which seeks to improve the protection and sustainable
use of territories covering more over 20% of the Brazilian Amazon. The goal is to reach, by 2020, 615 people
from 25 communities, cooperatives and associations be trained in improving the management of natural
resources on 1.7 million hectares of the Amazon. The project will last four years and received funding of
around US$3.8 million in November from the U.S. Agency for International Development (USAID), while the
other organizations will make an additional contribution of US$1.2 million.
December marked the launch of the pre-acceleration phase of the Natura Amazon Challenge: Businesses
for the Standing Forest, in partnership with Artemisia. The entrepreneurs of the four winning solutions and
another 13 projects stood out among the 140 initiatives submitted and presented business solutions to
local challenges that are aligned with the UN Sustainable Development Goals (e.g., education, solid waste
treatment, entrepreneurship and production chains in social and biodiversity, etc.). Participants
underwent a high-impact, five-day immersion in the Amazon, with group experiences, training and a visit
to an agro-extractivist community. The event featured the participation of representatives from Pará
state and Guilherme Leal (Co-Chairman of Board of Directors), as well as of important agents in
impact entrepreneurship, such as MOV Investimentos, Impactix, Telefônica and Imazon.
The CN Education program reinforces the investment in our direct selling network in Brazil and was
created based on the results of the HDI-CN index, which measures the human development of Natura
Consultants. It ended the year with strong results: in July to December 2016, 12,000 people already were
studying with the program . In CN Education, the consultants and their family members can
further their studies through on-site and e-learning programs nationwide, receiving discounts or full
scholarships. The incentive is made possible by partnerships between Natura and Universidade Estácio
de Sá (higher education), Prepara Cursos (vocational courses), Wizard by Pearson (language courses) and
the online platforms Khan Academy (various programs) and Geekie Games (preparatory programs for
university admissions exams).
Natura recognized in Brazil and around the world
In the last quarter of 2016 we received national and international accolades that consolidate our strategic
activities in sustainability: Época Empresas Verdes award for the case study Ekos Ucuuba; Exame
Sustainability Guide, in which we once again placed first in the consumer goods category; Thomson
nclusion Index (D&I), in which Natura was the only Brazilian company; Global
Recognition of Good Practices for Employees with Disabilities, an initiative by the São Paulo State
Department for the Rights of Persons with Disabilities. In addition, Natura stock was included once again
in the Corporate Sustainability Index (ISE) of the BM&FBovespa.
5
Indicator Unit 2020 ambition 2016 2015
Relative carbon emmissions (escopes 1, 2 e 3) kg CO2/kg prod billed 2,15 3,17 3,17
% post cosumption recycled materials1 % (g recycled mat/g packaging) 10,0 4,3 2,9
% product recyclability2 % (g recycled mat/g packaging) 74,0 51,2 50,0
% (eco-efficient packaging units

Eco-efficient packaging3 40,0 20,3 26,0
billed/ total units billed)
% (R$ Amazon inputs/R$ total

Amazon inputs consumed in relation to total inputs 30,0 19,1 12,2
inputs)
Cumulative business volume in the Pan-Amazon region 4 R$ millions 1000,0 972,6 751,9
Water consumption Liters / units manufactured 0,32 0,53 0,49
Funding for "Crer Para Ver" program - Brazil 5 R$ millions 23,6 23,7 19,5
1 The indicator considers the % of packaging materials sourced from post-consumer recycling in relation to total mass of packaging billed.
2 The indicator considers the % of packaging that can be recycled in relation to the total mass of packaging billed.
3 Eco-efficient packaging is 50% lighter in relation to regular/similar packaging or which has at least 50% in potentially marketable recyclable materials and/or renewable materials, as long as there is no mass increase.
4 Cumulative amounts since 2011.
5 Refers to the profit before income tax attributed to the Crer Para Ver product line.
Relative carbon emissions (scopes 1, 2 and 3): For 2016, a decline in carbon emissions efficiency was
expected in view of the business projections. However, we remained at the same level of 2015, a highlight
was the efficiency gains captured in key processes, such as air freight for exports to Latam, higher use of
cabotage for destinations in the North and Northeast, improvements in product delivery to CNs in Brazil
(transfer and last mile), lower electricity consumption at Natura sites, optimization of magazine printing in
Latam and higher use of materials with low environmental impacts for making our products.
Percentage of post-consumer recycled materials: The strong sales performance of fragrances with
post-consumer recycled glass leveraged the result for the year. Another highlight was the use of post-
consumer recycled material in the body category for the relaunch of Ekos.
Percentage of product recyclability: The result was stable in relation to the previous year. The challenge
proposed for 2020 will depend on redesigning certain products in the portfolio that allow for separating
components and on using materials with higher recycling rates.
Eco-efficient packaging: The result was lower than in the previous year, due to the lower share of sales
from items with eco-efficient packaging. In addition to making available refill options and packaging with
a lower environmental impact, such as for the SOU line, we must resume our efforts to encourage
consumers to use refills and expand our use of post-consumer recycled materials to include more items in
our portfolio.
The higher share of
Amazonian inputs in the total volume of inputs was mainly due to the increase in palm oil purchases to
make soap and to the decrease in total spending on raw materials in 2016. The increased use of
6
ingredients obtained under a more sustainable production model in our formulations is our challenge for
reaching the 2020 goal, helping to conserve forest regions.
Cumulative business volume in the Pan-Amazon region: The accumulated result of R$972.6 million in
business conducted in the Pan-Amazon region since 2010 already points to meeting the 2020 ambition.
Acquiring inputs for soap production has contributed more significantly to the business conducted in the
Pan-Amazon region (which comprises the Amazon Forest in Brazil and neighboring countries). The
investments in Ecoparque, the technology park built in the state of Pará, make an important contribution.
Water consumption: the increase in the relative consumption of water in production processes reflects
the lower production volume, which results in fewer lots and consequently more frequent equipment
cleaning. We have ongoing projects to optimize the washing and sanitization processes by reducing water
consumption and to increase the use of recycled water in our facilities to reverse this situation. A
showed that the use of products represents a much bigger impact than the industrial stage. We will direct
our efforts to shared management with the consumer to reduce this impact.
Funding for Crer para Ver (Education) program: The 22% increase in results compared to last year is
mainly due to the new launches in the portfolio, accompanied by an increase in the average price of items
and the mobilization of the sales team. The performance of our product sales was excellent in terms of
profitability, which was allocated to investments in education through the Natura Institute. A portion of
the funds will be allocated to education for Natura Consultants that includes high school, vocational and
undergraduate programs. Around 160,000 consultants engage in this cause in each cycle (every 21 days).
7
2. economic performance12
As from the second quarter of 2015, the following business segmentation was adopted:
(operations in Latin America, including Latam
companies Natura Brasil Pty Ltd. and Natura Cosmetics Australia Pty Ltd. domiciled in Australia).
The historical data series since 2011 is available in the new format at the following link:
http://natu.infoinvest.com.br/static/ptb/balancos-interativos. asp?idioma=ptb
Quarter Pro-Forma
(R$ million) Consolidated1 Brazil Latam Aesop
4Q16 4Q15 Change (%) 4Q16 4Q15 Change (%) 4Q16 4Q15 Change (%) 4Q16 4Q15 Change (%)
Total Consultants - end of period ('000) 2 1.800,1 1.883,0 (4,4) 1.256,0 1.376,9 (8,8) 543,0 505,1 7,5 - - -
Total Consultants - average of period ('000) 1.812,5 1.871,4 (3,1) 1.265,5 1.366,0 (7,4) 546,0 505,4 8,0 - - -
128,5 139,6 (8,0) 93,1 109,7 (15,1) 32,9 27,9 17,7 2,3 1,8 28,4
Gross Revenue 3.198,7 3.200,2 (0,0) 2.293,1 2.256,3 1,6 687,7 750,5 (8,4) 212,3 187,5 13,2
Net Revenue 2.294,7 2.332,4 (1,6) 1.571,7 1.579,8 (0,5) 526,0 576,3 (8,7) 192,3 171,4 12,2
COGS (720,8) (712,9) 1,1 (512,4) (507,7) 0,9 (186,0) (183,3) 1,5 (21,2) (20,7) 2,1
Gross Profit 1.573,9 1.619,5 (2,8) 1.059,3 1.072,2 (1,2) 340,0 392,9 (13,5) 171,2 150,7 13,6
Selling, Marketing and Logistics Expenses (863,5) (850,4) 1,5 (599,5) (559,1) 7,2 (233,3) (266,4) (12,4) (19,8) (16,9) 17,0
Administrative, R&D, IT and Projects Expenses (356,8) (393,4) (9,3) (190,7) (232,5) (18,0) (57,9) (77,5) (25,2) (105,0) (86,5) 21,5
Other Operating Income / (Expenses), net 43,6 10,8 301,7 39,2 11,6 238,5 4,2 (1,0) (524,7) 0,1 0,3 (49,4)
Financial Income / (Expenses), net (130,9) (66,2) 97,9 (119,5) (52,8) n/d (8,8) (11,5) n/d (2,7) (1,9) 41,1
Earnings Before Taxes 266,2 320,3 (16,9) 188,8 239,3 (21,1) 44,1 36,6 20,4 43,8 45,7 n/d
Income Tax and Social Contribution (57,4) (165,6) (65,3) (43,0) (144,5) (70,3) (4,2) (8,3) (49,7) (10,3) (12,8) (19,4)
Noncontrolling shareholders (7,0) (9,4) (24,9) - - - - - - (7,0) (9,4) (24,9)
Net Income** 201,8 145,4 38,8 145,9 94,8 53,9 40,0 28,4 40,9 26,5 23,5 12,7
EBITDA* 462,1 453,2 2,0 358,5 345,4 3,8 58,3 52,6 10,8 55,8 55,4 0,7
Gross Margin 68,6% 69,4% (0,8) pp 67,4% 67,9% (0,5) pp 64,6% 68,2% (3,6) pp 89,0% 87,9% 1,1 pp
Selling, Marketing and Logistics Expenses/Net Revenue 37,6% 36,5% 1,2 pp 38,1% 35,4% 2,8 pp 44,4% 46,2% (1,9) pp 10,3% 9,9% 0,4 pp
Administrative, R&D, IT and Projects Expenses/Net Revenue 15,5% 16,9% (1,3) pp 12,1% 14,7% (2,6) pp 11,0% 13,4% (2,4) pp 54,6% 50,5% 4,2 pp
Net Margin 8,8% 6,2% 2,6 pp 9,3% 6,0% 3,3 pp 7,6% 4,9% 2,7 pp 13,8% 13,7% 0,1 pp
EBITDA Margin 20,1% 19,4% 0,7 pp 22,8% 21,9% 0,9 pp 11,1% 9,1% 2,0 pp 29,0% 32,3% (3,3) pp
(*) EBITDA = Income from operations before financial effects + depreciation & amortization.
(**) Net / (Loss) income attributable to owners of the Company
Year Pro-Forma
(R$ million) Consolidated1 Brazil Latam Aesop
2016 2015 Change (%) 2016 2015 Change (%) 2016 2015 Change (%) 2016 2015 Change (%)
Total Consultants - end of period ('000) 2 1.800,1 1.883,0 (4,4) 1.256,0 1.376,9 (8,8) 543,0 505,1 7,5 - - 0,0
Total Consultants - average of period ('000) 1.834,5 1.801,4 1,8 1.303,1 1.330,8 (2,1) 530,3 470,6 12,7 - - 0,0
467,4 499,7 (6,5) 339,8 399,3 (14,9) 120,4 99,8 20,7 6,6 4,8 37,8
Gross Revenue 10.993,1 10.806,4 1,7 7.760,5 7.892,1 (1,7) 2.575,3 2.424,7 6,2 639,9 472,1 35,5
Net Revenue 7.912,7 7.899,0 0,2 5.335,1 5.593,7 (4,6) 1.983,3 1.859,1 6,7 579,7 431,5 34,3
COGS (2.447,0) (2.416,0) 1,3 (1.725,9) (1.778,4) (3,0) (664,4) (584,5) 13,7 (53,5) (49,7) 7,6
Gross Profit 5.465,7 5.483,0 (0,3) 3.609,2 3.815,3 (5,4) 1.318,9 1.274,5 3,5 526,2 381,8 37,8
Selling, Marketing and Logistics Expenses (3.110,2) (3.020,5) 3,0 (2.144,0) (2.081,0) 3,0 (873,8) (866,0) 0,9 (68,1) (50,3) 35,2
Administrative, R&D, IT and Projects Expenses (1.327,1) (1.271,5) 4,4 (709,9) (742,9) (4,4) (224,5) (255,2) (12,0) (381,9) (267,6) 42,7
Other Operating Income / (Expenses), net 54,4 65,8 (17,3) 49,0 66,7 (26,5) 5,1 (0,3) (1.729,9) 0,3 (0,6) (154,6)
Financial Income / (Expenses), net (656,0) (381,4) 72,0 (614,3) (395,7) 55,3 (40,6) 18,3 (322,2) (1,1) (4,0) (73,0)
Earnings Before Taxes 426,9 875,4 (51,2) 190,0 662,4 (71,3) 185,1 171,3 8,1 75,5 59,3 27,4
Income Tax and Social Contribution (118,6) (352,6) (66,4) (51,1) (261,1) (80,4) (47,8) (69,1) (30,9) (19,7) (22,4) (12,0)
Noncontrolling shareholders (11,5) (9,2) 25,2 - - - - - - (11,5) (9,2) 25,16
Net Income** 296,7 513,5 (42,2) 138,9 401,3 (65,4) 137,3 102,2 34,4 44,2 27,6 60,1
EBITDA* 1.343,6 1.495,9 (10,2) 1.004,1 1.251,3 (19,8) 247,6 169,7 45,9 115,0 90,2 27,5
Gross Margin 69,1% 69,4% (0,3) pp 67,7% 68,2% (0,6) pp 66,5% 68,6% (2,1) pp 90,8% 88,5% 2,3 pp
Selling, Marketing and Logistics Expenses/Net Revenue 39,3% 38,2% 1,1 pp 40,2% 37,2% 3,0 pp 44,1% 46,6% (2,5) pp 11,7% 11,7% 0,1 pp
Administrative, R&D, IT and Projects Expenses/Net Revenue 16,8% 16,1% 0,7 pp 13,3% 13,3% 0,0 pp 11,3% 13,7% (2,4) pp 65,9% 62,0% 3,9 pp
Net Margin 3,7% 6,5% (2,8) pp 2,6% 7,2% (4,6) pp 6,9% 5,5% 1,4 pp 7,6% 6,4% 1,2 pp
EBITDA Margin 17,0% 18,9% (2,0) pp 18,8% 22,4% (3,5) pp 12,5% 9,1% 3,4 pp 19,8% 20,9% (1,1) pp
(*) EBITDA = Income from operations before financial effects + depreciation & amortization.
(**) Net / (Loss) income attributable to owners of the Company
Employer profit sharing plan: 77.5 million in 2016 and 54.6 million in 2015.
Management compensation: 37.4 million in 2016 and 21.8 million in 2015.
1
Consolidated figures include Brazil, Latam, Aesop and France.
2
Position at the end of Cycle 18 in Brazil, 12 in France and Aesop and 17 in Latam countries.
8
2.1. revenue3
Brazil
Gross revenue advanced 1.6% in 4Q16 compared to Brazil Net Revenue
(% year over year)
4Q15. Net revenue contracted 0.5% in the period,
reflecting the higher effective tax rate, which was 9,1%
mainly due to the higher tax rates for ICMS and higher -0,5%
1,8% 2,7%
MVA in various states.
-3,5% -2,2% -2,3%
-7,1%
In the quarter, the number of consultants decreased -4,6%
-9,6% -8,9% -9,8%
8.8% compared to last year. On the other hand, we
1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16
implemented actions to improve consultant
productivity, which increased 9.7% in the period.
Our volumes contracted 15.1% in the quarter due to a few factors: trading-down effect in personal care and
sales concentrated in Christmas gifts kits and facial care, with higher value and lower volume.
Consultants - end of period

6,0% 7,9% 7,8% 5,2% 3,9% 6,6% 6,1% 8,1% 6,4% 2,9% -0,8% -4,4%
0,0% Productivity (% year over year) (3)
1.811 1.835 1.883 1.824 1.864 1.821 1.800 -200,0%
1.729 1.743 1.715
1.651 1.699 9,7%
505 536 -400,0%
413 422 465 497 509 544 543 8,2%
373 397 434
-600,0%
-1,9% 1,2%
-800,0% -1,1%
-3,6% -3,6%
-1000,0% -6,2%
-7,6% -7,9% -2,0%
1.276 1.301 1.314 1.319 1.280 1.344 1.337 1.377 1.314 1.327 1.276 1.256 -1200,0% -9,5%
-1400,0%
-1600,0%
1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16
-1800,0%
Brazil
Brazil Latam YoY Growth - Cosolidated
Latam
Net revenue advanced 26.4% (gross revenue:
Latam Net Revenue
+28.9%) in local currency in 4Q16, driven by (% year over year)
channel expansion and higher consultant 73,4%
productivity, but contracted 8.7% in Brazilian 53,0%
59,6%
62,1%
39,6%
real due to depreciation 29,3% 31,8% 33,3%
25,7% 22,3% 30,0% 26,4%
currencies. In 4Q16, Latam accounted for 22.9% 37,4% 20,4%
27,7% 29,4% 30,8% 26,9% 29,3%
22,9%16,2% 21,6%
of consolidated net revenue (24.7% in 4Q15), with -3,5%
-8,7%
growth of 7.5% in the number of consultants
compared to 4Q15 (8.0% based on average in 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16
period) and growth of 17.7% in units sold.
Local Currency R$
3
Productivity at retail prices = (gross revenue in the period/average number of consultants in the period)/(1 % consultants' profit)
9
Aesop
Aesop Net Revenue
Aesop continued to post strong growth of 12.2% in (% year over year)
Brazilian real (28.5% in Australian dollar) in 4Q16, to
account for 8.4% of consolidated net revenue (7.3% in 91,3% 95,6% 96,5%
4Q15), with same-store sales growth of 11% in the 64,7%

period (12% in the year). Aesop has 261 stores, of 49,4%
43,0% 67,1%
28,5%
which 176 are signature stores (135 in 4Q15) and 85 38,0%47,8% 46,2% 45,1% 19,9%
38,0%
are department stores (73 in 4Q15), in 20 countries 18,5% 12,2%
(18 in 4Q15), including now in Denmark and New
1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16
Zealand. A directory with all Aesop stores can be Local Currency R$
found on the website www.aesop.com.
Innovation (%NR)
2.2. innovation & products
65,9% 67,9% 64,6% 65,5%
62,4% 61,0% 63,0%
In the 12 months to December 2016, the innovation 58,9%
53,9% 54,3%
index4 stood at 54.3%, which marked the highest 51,0% 51,0%
level of 2016.
1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16
2.3. gross margin

Gross Margin (%NR)
Consolidated gross margin in 4Q16 decreased 0.8 70,4% 70,9% 69,8% 69,4%
69,6% 70,8% 70,2%
69,8% 69,4% 69,7%
p.p. from the year-ago period. 68,9%
68,8%
69,0%
68,3% 68,5% 68,7% 68,6%
69,7%
68,3% 68,0%68,2%
Brazil 68,8%
68,2% 67,8%
68,9% 69,2% 67,0%
68,4% 67,8% 67,8% 67,4%
67,9%
67,2% 66,7%
Decrease of 0.5 p.p., caused by the 1.5 p.p. increase in 65,3% 64,6%
the effective tax rate in the period, due to the higher

ICMS raters and higher MVA. 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16
Latam Consolidated Brazil Latam
Contraction of 3.6 p.p., which is mainly explained by the stronger Brazilian real on the cost of products
exported from Brazil to the region.
The table to the right presents the main 4Q16 4Q15 2016 2015
components of consolidated costs: RM / PM / FP* 84,3% 82,8% 80,2% 80,2%
Labor 8,4% 7,8% 10,1% 8,8%
Depreciation 2,6% 2,8% 3,2% 3,3%
Other 4,7% 6,6% 6,5% 7,8%
Total 100,0% 100,0% 100,0% 100,0%
*Raw Material, Packaging Materiall and Finished Products
4
Innovation Index: share in the last 12 months of the sale of products launched in the last 24 months.
10
2.4. operating expenses
In Brazil, selling, marketing and logistics expenses Selling, Marketing and Logistics Expenses (%NR)
increased 7.2% in nominal terms compared to 4Q15,
44,4% 46,2% 44,1% 46,6%
due to higher selling expenses from higher 38,1% 35,4%
40,2% 37,2%
compensation, incentives and training provided to
the sales force.
In Latam, in local currency, such expenses lagged 4th Quarter Year 4th Quarter Year
revenue growth in the period, despite the Brazil Latam

maintenance of significant marketing investments,
2016 2015
thus increasing operational margin.
Administrative, R&D IT and Project Expenses (%NR) Administrative and R&D, IT and project expenses
in Brazil declined 18.0% in nominal terms compared
14,7% 13,7%
13,3% 13,3% 13,4% to 4Q15, accounting for 12.1% of net revenue (14.7% in
12,1% 11,3%
11,0%
4Q15). This decrease offset the increase in selling
expenses and was due to the ongoing efforts to
control expenses and capture productivity gains. In
4th Quarter Year 4th Quarter Year
the year, these expenses also decreased in relation
Brazil Latam
to 2015, by 4.4%.
2016 2015
In Latam, administrative expenses fell 25.2% in
Brazilian real while in local currency they increased
.
At Aesop, in local currency, this group of expenses expanded in line with revenue growth. Further, in 4Q16
we granted incentive plan for the second half of 2016.
2.5. other operating income and expenses
In 4Q16, consolidated income amounted to R$43.6 million, compared to R$10.8 million in 4Q15. In 2016, we
recorded revenue from a BNDES subsidy (CPC 07) due to new funding transactions and the sale of the
receivables portfolio in Brazil.
11
2.6. EBITDA
CONSOLIDATED EBITDA (R$ million)
4Q16 4Q15 Change (%) 2016 2015 Change (%)
Net Revenue 2.294,7 2.332,4 (1,6) 7.912,7 7.899,0 0,2
(-) Income and Expenses 1.897,5 1.945,9 (2,5) 6.829,8 6.642,2 2,8
EBIT 397,2 386,5 2,8 1.082,9 1.256,7 (13,8)
(+) Depreciation / Amortization 64,9 66,7 (2,6) 260,8 239,2 9,0
EBITDA 462,1 453,2 2,0 1.343,6 1.495,9 (10,2)
In 4Q16, consolidated EBITDA advanced 2.0% from 4Q15. In Brazil, the 3.8% increase is explained by the
rigorous control of expenses and improvements in other income, as described above, which offset the 0.5
p.p. drop in gross margin.
In Latam, EBITDA growth was 10.8% in Brazilian real compared to 4Q15, despite the Brazilian real
appreciation EBITDA margin expanded 2.0 p.p., attesting to the
EBITDA at Aesop grew 0.7% in Brazilian real (15.7% in local currency) compared to 4Q15, which was affected
by the Brazilian real strengthening against the Australian dollar. In local currency, the increase was
driven by higher same-store sales and operating leverage, but was partially offset by the incentive plan
mentioned in item 2.4.
2.7. net income (loss)
In 4Q16, we posted consolidated net income of R$201.8 million (against R$145.4 million in 4Q15), due to the
slight increase in EBITDA explained above and the lower effective income tax rate, the latter caused by the
lower profit before tax, the approval for payment of interest on equity, non-recurring effects of deferred
offset the
increase of R$64.7 million in financial expenses from 4Q15.
12
The composition of net income based on EBITDA follows:

(R$ million) 4Q16 4Q15 Change R$ Change (%) 2016 2015 Change R$ Change (%)
EBITDA - Consolidated 462,1 453,2 8,9 2,0% 1.343,6 1.495,9 (152,3) (10,2%)
Depreciation and Amortization (64,9) (66,7) 1,8 (2,6%) (260,8) (239,2) (21,6) 9,0%
Financial Result (130,9) (66,2) (64,8) 97,9% (656,0) (381,4) (274,6) 72,0%
Income Tax and Social Contrib. (57,4) (165,6) 108,2 (65,3%) (118,6) (352,6) 234,0 (66,4%)
Noncontrolling shareholders (7,0) (9,4) 2,3 (24,9%) (11,5) (9,2) (2,3) 25,2%
Net income - Consolidated 201,8 145,4 56,4 38,8% 296,7 513,5 (216,8) (42,2%)
The following table presents the main changes in the financial result:
(R$ million) 4Q16 4Q15 Change R$ Change (%) 2016 2015 Change R$ Change (%)
Financial Result (130,9) (66,2) (64,7) 98% (656,0) (381,4) (274,6) 72%
1. Borrowings/Financing (B/F) and Short-Term Investments (STI) - Brazil (60,2) (62,3) 2,1 (3%) (248,8) (229,8) (19,0) 8%
Average Balance of STI 1.821,4 2.420,7 (599,3) (25%) 1.979,6 2.119,7 (140,1) (7%)
Financial Income from STI 56,8 80,6 (23,8) (30%) 255,4 267,8 (12,3) (5%)
Average Interest Rate Earned on STI as % of CDI 101,5% 100,7% n/a 0,8pp 102,0% 100,7% n/a 1,3%
Average Balance of Treasury Debt (3.756,2) (4.612,2) 856,0 (19%) (3.963,0) (4.198,9) 236,0 (6%)
Financial Expenses on B/F and Derivatives (117,0) (142,9) 25,9 (18%) (504,2) (497,5) (6,7) 1%
Weighted Average Cost of B/F as a % of CDI 93,4% 98,6% n/a (5,2pp) 96,0% 98,7% n/a (2,7%)
Cumulative CDI 3,24% 3,36% n/a (0,1pp) 14,00% 13,24% n/a 5,7%
2. Operational FX gains/(losses) - Brazil 1,9 0,3 1,6 539% (16,7) 35,2 (51,9) (148%)
3. Restatement of Aesop's Put Option (5,0) (5,9) 0,8 (14%) (123,2) (106,2) (17,0) 16%
(1,8) (5,9) 4,1 (70%) (123,5) (106,2) (17,3) 16%
FX Aesop Derivatives 0,7 0,0 0,7 n/a 0,6 0,0 0,6 n/a
Mark-to-market of Aesop Derivatives (4,0) 0,0 (4,0) n/a (0,2) 0,0 (0,2) n/a
4. International Operations - LATAM (8,8) (11,5) 2,6 (23%) (40,6) 18,3 (58,9) (322%)
5. Other financial expense / income (58,8) 13,2 (71,9) (546,7%) (226,7) (98,8) (127,9) 129,4%
Mark-to-market of financial derivatives (2,0) 48,1 (50,1) (104%) (12,3) 38,2 (50,5) (132%)
Reclassification BNDES - CPC 07 (21,9) (12,6) (9,3) 74% (65,8) (45,2) (20,6) 46%
Other (34,9) (22,3) (12,6) 56% (148,6) (91,9) (56,7) 62%
The negative variation of R$64.7 million compared to 4Q15 was due to the combination of the following
factors:
 Borrowings/Financing and short-term financial investments in Brazil: lower financial revenue
due to the decrease in the average balance invested and lower financial expense, given the
reduction in average debt in the period.
 Operating FX gains/(losses) in Brazil: reflects the effect of the BRL/USD exchange rate on export
receivables (favorable variation of R$1.6 million due to the BRL depreciation in the period).
 : reflects the restatement of liabilities related
to the acquisition of the remaining interest in Aesop, which was settled at end-December. The
amount recorded in the period reflects the effect from exchange variation on liabilities (BRL/AUD),
 International Operations: this variation is mainly due to the effects from the Brazilian real and
Argentine peso exchange rate on imports payable from Argentina.
 Other revenue and financial expenses: includes the remaining effects from the mark-to-market
adjustment of hedge instruments on foreign-denominated debt that was settled in the period, as
well as the reclassification of BNDES subsidy CPC 07, with an increase due to new funding
transactions. Other factors include mainly the adjustment of tax claims.
13
2.8. cash flow
Free cash flow in the period was R$402.9 million, compared to R$169.4 million in 4Q15, due to the higher
net income and sharp drop in working capital, mainly reflecting the lower inventory coverage in Brazil and
Latam.
In 2016, the weaker cash generation compared to 2015 is explained by the lower net income, by the effects
identified in the first three quarters of the year and by the lower reduction in working capital.
R$ million 4Q16 4Q15 Change R$ Change % 2016 2015 Change R$ Change %
Net Income* 201,8 145,4 56,4 38,8 296,7 513,5 (216,8) (42,2)
Depreciation and Amortization 64,9 66,7 (1,8) (2,6) 260,8 239,2 21,6 9,0
Non-cash/Others (19,5) 34,7 (54,2) n/a 15,8 23,5 (7,6) n/a
Provision for acquiring Aesop's remaining interest 1,8 11,0 (9,2) (84,0) 58,1 111,3 (53,3) (47,8)
Internal Cash Generation 248,9 257,7 (8,8) (3,4) 631,4 887,5 (256,1) (28,9)
Working Capital (Increase)/Decrease 284,4 55,9 228,5 408,6 144,5 313,6 (169,1) (53,9)
Operating Cash Generation 533,4 313,7 219,7 70,0 775,9 1.201,1 (425,2) (35,4)
CAPEX (130,4) (144,2) 13,8 (9,6) (306,0) (383,0) 77,0 (20,1)
Free Cash Flow** 402,9 169,4 233,5 137,8 469,9 818,2 (348,3) (42,6)
(*) Net income attributable to owners of the Company
We ended the year with capex of R$306 million, in line with our estimates, which resulted from more
rigorous criteria adopted for selecting and approving investments. The following table shows the
geographic distribution of our capital investments:
(R$ million) 2014 VA% 2015 VA% 2016 VA%

Brazil 398 79% 239 62% 190 62%
Latam + others 84 17% 83 22% 38 13%
Aesop 24 5% 61 16% 77 25%
Total 506 383 306
2.9. indebtedness
We ended the year with a net debt/EBITDA ratio of 1.40, compared to 1.13 in 2015, reflecting the reductions
in EBITDA and weaker cash generation.
R$ million Dec16 Part (%) Dec15 Part (%) Change (%)

Short-Term 1.764,5 42,3 2.161,4 48,3 (18,4)
Long-Term 2.625,7 62,9 3.374,5 75,5 (22,2)
Derivatives* 61,2 1,5 (730,8) (16,3) (108,4)
Finance Leases / Others** (277,2) (6,6) (334,7) (7,5) (17,2)
Total Debt 4.174,2 4.470,3 (6,6)
(-) Cash, cash equivalents and short-term investment 2.298,9 2.783,7 (17,4)
(=) Net Debt 1.875,2 1.686,6 11,2
Net Debt / Ebitda 1,40 1,13
Total Debt / Ebitda 3,11 2,99
*Excluding the temporary, non-cash effects of mark-to-market adjustments of derivatives pegged to foreign currency debt
**Other: reclassification of expenses with interest on subsidized loans from financial result in accordance with
14
3. dividends
On February 10, 2017, interest on equity was paid for the period from January 1 to November 30, 2016, in
the aggregate amount of R$61.8 million, which corresponds to R$0.143628930 per share (excluding
treasury shares), with withholding of income tax at source of 15%, for total net interest on equity of R$52.5
million, corresponding to R$0.122084591 per share.
On February 22, 2017, the Board of Directors approved the proposal to be submitted to the Annual
Ordinary and Extraordinary Shareholders Meeting to be held on April 11, 2017 for the payment, on April 20,
2017, of dividends for fiscal year 2016 and interest on equity for December 2016, in the amounts of R$51.3
million and R$5.6 million (R$4.8 million net of withholding tax at source of 15%), respectively.
The aggregate amount of dividends and interest on equity for fiscal year 2016 represents a net payout of
R$0.252308702 per share (excluding treasury shares), and corresponds to 40% of net income for 2016.
15
4. NATU3 performance
In 2016, the price of Natura stock declined by 1.2%, while the Bovespa Index increased by 42.9%.
Average daily trading volume in the year was R$39.1 million, compared to R$30.2 million in the prior-year
period.
In the year, our ranking in the Bovespa Liquidity Index was 49th (46th in December 2015).
The following chart shows the performance of Natura stock since its IPO:
1.000 NATU3 + 366% NATU3

NATU3 31/12/2016
IBOVESPA + 216% R$ 23,02
31/07/2009
800 R$ 19,83
600 NATU3
26/05/2004
R$ 4,95
400
200
0
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
16
5. conference call
& webcast
The Conference Call and Webcast will be held on Feb. 23, 2017 (Thursday) at the following time:
Portuguese / English
10:00 a.m. (Brasília time)
8:00 a.m. (New York time) (simultaneous translation)
From Brazil: +55 11 3193 1001 /+55 11 2820 4001

From USA: Toll Free: +1 888 700 0802
From other countries: +1 786 924 6977
Pass Code: Natura
Live webcast:
www.natura.net/investidor
6. investor
relations
Telephone: +55 (11) 4571-7786
Marcel Goya, marcelgoya@natura.net

Luiz Palhares, luizpalhares@natura.net
Deborah Bülow Fernandes, deborahfernandes@natura.net
Camila Soares Cabrera, camilacabrera@natura.net
17
7. balance sheet
at December 2016 and December 2015
(in millions of Brazilian real - R$)
ASSETS 2016 2015 LIABILITIES AND SHAREHOLDERS' EQUITY 2016 2015
CURRENT ASSETS CURRENT LIABILITIES

Cash and cash equivalents 1.091,5 1.591,8 Borrowings and financing 1.764,5 2.161,4
Short-term investments 1.207,5 1.191,8 Trade and other payables 814,9 802,9
Trade receivables 1.051,9 909,0 Payroll, profit sharing and related taxes 208,1 201,2
Inventories 835,9 963,7 Taxes payable 1.075,4 1.048,0
Recoverable taxes 329,4 320,4 Dividends and interest on capital payables 79,7 0,0
Derivatives 0,0 734,5 Provision for acquisition of non-controlling interest 0,0 190,7
Other receivables 286,7 307,5 Derivatives 73,5 0,0
Total current assets 4.802,9 6.018,7 Other payables 161,7 168,8
Total current liabilities 4.177,9 4.572,9
NON CURRENT ASSETS
Recoverable taxes 280,6 289,4 NON CURRENT LIABILITIES
Deferred income tax and social contribution 493,0 212,6 Borrowings and financing 2.625,7 3.374,5
Escrow deposits 303,1 287,8 Taxes payable 237,5 87,7
Other noncurrent assets 23,0 17,6 Deferred income tax and social contribution 23,8 34,1
Property, plant and equipment 1.734,7 1.752,4 Provision for tax, civil and labor risks 93,6 77,9
Intangible assets 784,3 816,5 Other non current liabilities 266,7 170,1
Total noncurrent assets 3.618,7 3.376,3 Total non current liabilities 3.247,3 3.744,3
SHAREHOLDERS' EQUITY
Capital 427,1 427,1
Capital reserves 142,8 134,7
Earnings reserves 666,8 488,8
Treasury shares (37,1) (37,9)
Proposed additional dividend 29,7 123,1
Reserve for acquisition of non-controlling interest 0,0 (79,3)
Goodwill/ Bargain Purchase on capital transactions (92,1) (65,2)
Adjustment of equity evaluation (140,7) 36,8
Total equity attributable to owners of the Company 996,4 1.028,2

Non controlling interests 0,0 49,6
Total shareholders' equity
Total do patrimônio líquido 996,4 1.077,8
TOTAL ASSETS 8.421,6 9.395,0 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 8.421,6 9.395,0
18
8. statement of income
for the years ended December 31, 2016 and 2015
R$ million 2016 2015
NET REVENUE 7.912,7 7.899,0
Cost of sales (2.447,0) (2.416,0)
GROSS PROFIT 5.465,7 5.483,0
OPERATING (EXPENSES) INCOME
Selling, Marketing and Logistics expenses (3.110,2) (3.020,5)
Administrative, P&D, IT and Project Expenses (1.327,1) (1.271,5)
Other operating (expenses) income, net 54,4 65,8
INCOME FROM OPERATIONS BEFORE FINANCIAL INCOME (EXPENSES) 1.082,9 1.256,8
Financial income 1.073,3 1.927,2

Financial expenses (1.729,3) (2.308,6)
INCOME BEFORE INCOME TAX AND SOCIAL CONTRIBUTION 426,9 875,4
Income tax and social contribution (118,6) (352,6)
NET INCOME BEFORE NONCONTROLLING 308,2 522,7
Noncontrolling 11,5 9,2
NET INCOME 296,7 513,5
ATTRIBUTABLE TO
Owners of the Company 296,7 513,5
Noncontrolling 11,5 9,2
308,2 522,7
19
9. statement of cash flows

for the years ended December 31, 2016 and 2015
R$ million 2016 2015

CASH FLOW FROM OPERATING ACTIVITIES
Net income 308,2 522,7
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 260,8 239,2
Provision (reversal ) for losses on transactions with derivative contracts " swap " and "forward " 681,9 (738,0)
Provision (reversal ) for tax, civil and labor contingencies 17,0 15,0
Monetary restatement of escrow deposits (16,8) (21,2)
Income tax and social contribution 118,6 352,6
Loss on sale and disposal of fixed and intangible assets (3,4) (18,5)
Interest and exchange variation on loans and financing (172,3) 1199,2
Exchange variation on other assets and liabilities (59,9) (14,1)
Provision (reversal) for losses on property 0,3 6,3
Provision (reversal) related to the grant of options to purchase shares 8,8 (2,6)
Provision (reversal) for doubtful accounts 19,3 6,4
Provision (reversal ) for losses on inventories 31,4 14,3
Provision of health care plan and carbon credits 4,6 6,8
Net income attributable to non-controlling (11,5) (9,2)
Provision for acquisition of non-controlling 58,1 111,3
1244,9 1670,4
(INCREASE) DECREASE IN ASSETS
Trade receivables (180,8) (67,9)
Inventories 96,4 (88,0)
Recoverable taxes (0,2) (186,8)
Other receivables 15,3 (13,1)
Subtotal (69,4) (355,8)
INCREASE (DECREASE) IN LIABILITIES
Domestic and foreign suppliers 12,1 207,9
Payroll, profit sharing and related taxes, net 6,9 (9,3)
Taxes payable (100,9) (5,1)
Participation of non controlling shareholders 0,0 89,3
Other payables 5,6 (12,9)
Subtotal (76,4) 269,9
20
CASH GENERATED BY OPERATING ACTIVITIES 1099,2 1584,6

OTHERS CASH FLOWS BY OPERATING ACTIVITIES
Payments of income tax and social contribution (131,2) (70,3)
Withdrawal (payment) of escrow deposits 7,7 (3,3)
Payment of tax, civil and labor contingencies (11,3) 0,0
Receivables of derivatives 123,7 323,9
Payment of interest on borrowings and financing (309,5) (256,9)
NET CASH GENERATED (USED IN) BY OPERATING ACTIVITIES 778,6 1578,0

Acquisition of property, plant and equipment and intangible assets (305,8) (382,9)
Receivable from sale of fixed and intangible assets 43,4 77,9
Short-term investments (6030,4) (5868,6)
Redemption of short-term investments 6014,8 5208,5
NET CASH GENERATED (USED) IN INVESTING ACTIVITIES (278,1) (965,0)
Repayments of borrowings and financing - principal (1869,6) (1709,5)
Proceeds from borrowings and financing 1265,1 2258,9
Acquisition of additional shares of Emeis (248,7) (66,1)
Payment of dividends and interest on capital of the prior year (123,1) (685,6)
NET CASH GENERATED (USED) IN FINANCING ACTIVITIES (976,3) (202,3)
Gain arising on translation foreign currency cash and cash equivalents (24,6) 16,9
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (500,4) 427,7
Cash and cash equivalents at the beginning of the year/period 1591,8 1164,2
Cash and cash equivalents at the end of the year/period 1091,5 1591,8
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (500,4) 427,7
ADDITIONAL STATEMENTS OF CASH FLOWS INFORMATION:
Non cash itens:

Capitalization of financial leasing 40,7 80,9
Hedge accounting 1,5 8,6
Effects of changes from participation of subsidiaries abroad - -
Dividends and interest on interest capital declared and not distributed 118,7 123,1
* The notes are an integral part of these interim financial information. - -
21
10.glossary
_CDI: the overnight rate for interbank deposits.
_Natura Consultant (CN): self-employed resellers who do not have a formal labor relationship with Natura.
_Natura Super Consultant (CNO): self-employed resellers who do not have a formal labor relationship with Natura and support the
Relationship Managers in their activities. They are also called Natura Consultant Advisors.
_Supplier Communities: the communities of people involved in small scale farming and extraction activities in a variety of locations in Brazil,
especially in the Amazon Region, who extract the inputs used in our products from the social and biodiversity. We form production chains with
these communities that are based on fair prices, the sharing of benefits gained from access to the genetic heritage and associated traditional
knowledge and support for local sustainable development projects. This business model has proven effective in generating social, economic
and environmental value for Natura and for the communities.
_GHG: Greenhouse gases.
_Innovation Index: share in the last 12 months of the sale of products launched in the last 24 months.
_Natura Institute: is a nonprofit organization created in 2010 to strengthen and expand our Private Social Investment initiatives. The institute
has enabled us to leverage our efforts and investments in actions that contribute to the quality of public education.
_Target Market: refers to the market share data published by SIPATESP/ABIHPEC. Considers only the segments in which Natura operates.
Excludes diapers, oral hygiene products, hair dyes, nail polish, feminine hygiene products as well as other products.
_Profit Sharing: the share of profit allocated to employees under the profit-sharing program.
_Natura Crer Para Ver Program: special line of non-cosmetic products whose profits are transferred to the Natura Institute, in Brazil, and
invested by Natura in social initiatives in the other countries where we operate. Our consultants promote these sales to benefit society and
do not obtain any gains.
_Sustainable Relations Network: sales model adopted in Natura
Consultant, Entrepreneurial Natura Consultant, Natura Developer 1 and 2, Natura Transformer 1 and 2, Natura Inspirer and Natura Associate.
To rise up through the various stages, consultants must fulfill certain based on sales volume, attracting new consultants and (unlike the models
adopted in other countries) personal development and social and environmental relationships in the community.
_Benefit Sharing: Policy for the Sustainable Use of Biodiversity and Associated Traditional Knowledge, benefits
are shared whenever we perceive various forms of value in the access gained. Therefore, one of the practices that defines the way in which
these resources are divided is to associate payments with the number of raw materials produced from each plant as well as the commercial
success of the products in which these raw materials are used.
_Sipatesp/Abihpec: São Paulo State Perfumery and Toiletries Association / Brazilian Cosmetics, Fragrances and Toiletries Industry
Association.
22
EBITDA is not a measure under BR GAAP and does not represent cash flow for the periods presented. EBITDA
should not be considered an alternative to net income as an indicator of operating performance or an alternative
to cash flow as an indicator of liquidity. EBITDA does not have a standardized meaning and the definition of
EBITDA used by Natura may not be comparable with that used by other companies. Although EBITDA does not
provide under
operating performance. Natura also believes that certain investors and financial analysts use EBITDA as an
indicator of performance of its operations and/or its cash flow.
This report contains forward-looking statements. These forward-looking statements are not historical fact, but
Words such as "anticipate", "wish", "expect",
"foresee", "intend", "plan", "predict", "project", "desire" and similar terms identify statements that necessarily involve
known and unknown risks. Known risks include uncertainties that are not limited to the impact of price and
product competitiveness, the acceptance of products b
and those of its competitors, regulatory approval, currency fluctuations, supply and production difficulties and
changes in product sales, among other risks. This report also contains certain pro forma data, which are prepared
by the Company exclusively for informational and reference purposes and as such are unaudited. This report is
updated up to the present date and Natura does not undertake to update it in the event of new information
and/or future events.
23

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Financial Statements

Natura Cosméticos S.A.

Natura Cosméticos S.A.

Individual and Consolidated Financial statements

December 31, 2016

Independent auditor´s report on Individual and Consolidated Financial statements ............................. 1

Reviewed Individual and Consolidated Financial statements

Independent auditor’s report on individual and consolidated financial statements

We have audited the individual and consolidated financial statements of Natura

Basis for opinion

We conducted our audit in accordance with Brazilian and International Standards on

Key audit matters

In accordance with accounting practices adopted in Brazil and International Financial

 Obtaining an understanding on and testing internal controls over estimated

Additionally, we reviewed the adequacy of the Company’s disclosures on this matter,

Legal discussions and agreements executed involving tax obligations

 Involvement of tax professionals to assist us with reviewing a sample of the

Additionally, we reviewed the adequacy of the Company’s disclosures on this matter,

Statements of value added

Other information accompanying the individual and consolidated financial

Company management is responsible for other information included in the Management

In connection with the individual and consolidated financial statements, we are

Responsibilities of management and of those charged with governance for the

Auditor’s responsibilities for the audit of individual and consolidated financial

 Identify and assess risks of material misstatements of the individual and

 Obtain an understanding of internal control relevant to the audit in order to design

 Evaluate the appropriateness of accounting policies used and the reasonableness

 Conclude on the appropriateness of management's use of the going concern basis

 Obtain sufficient appropriate audit evidence regarding the financial information

São Paulo, February 22, 2017.

ERNST & YOUNG

Drayton Teixeira de Melo

'BALANCE SHEETS AS OF DECEMBER 31, 2016 AND DECEMBER 31, 2015

Company Consolidated Company Consolidated

CURRENT ASSETS CURRENT LIABILITIES

NON CURRENT ASSETS NON CURRENT LIABILITIES

Non controlling interests - - - 49,581

Note Company Consolidated

NET REVENUE 22 5,616,985 5,929,000 7,912,664 7,899,002

GROSS PROFIT 3,428,407 3,634,104 5,465,705 5,483,012

OPERATING (EXPENSES) INCOME

Financial income 25 952,447 1,692,298 1,073,288 1,927,228

INCOME BEFORE INCOME TAX AND

NET INCOME 296,699 513,513 308,238 522,732

EARNINGS PER SHARE - R$

STATEMENTS OF COMPREHENSIVE INCOME

Note Company Consolidated

NET INCOME 296,699 513,513 308,238 522,732

Other comprehensive income not reclassified to profit or loss in subsequent periods:

Other comprehensive losses (Not tax) 119,143 571,738 145,060 569,701

NATURA COSMÉTICOS S.A.

STATEMENTS OF CHANGES IN SHAREHOLDERS` EQUITY

Tax Earning reserves Equity

STATEMENTS OF CASH FLOWS

CASH FLOW FROM OPERATING ACTIVITIES

752,189 1,034,579 1,244,947 1,670,417

(INCREASE) DECREASE IN ASSETS

INCREASE (DECREASE) IN LIABILITIES

CASH GENERATED BY OPERATING ACTIVITIES 776,396 906,470 1,099,173 1,584,578

OUTHERS CASH FLOWS BY OPERATING ACTIVITIES

NET CASH GENERATED BY OPERATING ACTIVITIES 537,163 988,955 778,634 1,578,025

CASH FLOW FROM INVESTING ACTIVITIES

CASH FLOW FROM INVESTING ACTIVITIES