This Competition Policy (“Policy”) aims to establish the rules and guidelines that must be followed in order to comply with the antitrust law and free competition in relation to commercial practices and corporate relations in which ROMI S.A. (“Company” or “ROMI”) will participate.
This Policy is an integral part of the ROMI Compliance Program and aims to fully comply with antitrust laws.
This Policy is applicable to the following people (“Employees”), and must be faithfully complied with by them:
(i) Company’s Employees;
(ii) Interns and Underage Apprentices;
(iii) Members of Administration and Audit Committee;
(v) Service providers;
(vi) Sales agents;
(vii) Any third party acting on behalf of the Company.
1.2. Main Definitions
Below are the main definitions necessary for correctly understanding this Policy.
- Economic Concentration Acts
Concentration Acts are those that require prior approval by the Brazilian Competition Authority (“CADE”), such as: mergers and acquisitions, incorporations or the execution of an associative agreement, consortium or joint venture, under the terms of the applicable legislation.
- Sensitive Information
Information that, if shared with competitors, may have negative impacts on free competition, including the disclosure or sharing of the following information, provided that it has not yet been disclosed to the Market:
(i) Prices, sales conditions and discounts, especially if segmented by customers and suppliers;
(ii) Price increase or reduction plans;
(iii) Price margin of products or services;
(iv) Sales volumes of products or services;
(v) Market breakdown (by manufacturer);
(vi) Matters related to the composition of prices and commercial conditions of specific suppliers or customers;
(vii) Amounts paid as commissions;
(viii) Product manufacturing methods;
(ix) Product development (including Intellectual Property);
(x) Trade secrets;
(xi) Strategic and expansion plans;
• Relevant Market
Comprises the products or services offered that customers consider interchangeable due to their characteristics, prices and intended use, without geographic limitation or additional distinctions.
The relevant markets for ROMI are those related to the use of machine tools, machines for plastics and cast and machined parts, such as the agro, automotive, machinery and equipment and mining markets.
• Dominant Position
There is a Dominant Position whenever a company or group of companies is able to alter market conditions, unilaterally or coordinately, or control 20% or more of the relevant market.
• Corporate transactions
Refer to corporate transactions provided for in Law 6,404/76, such as incorporation, spin-off, merger and acquisition. In corporate transactions, it is prohibited to provide, receive or exchange Sensitive Information with people who act on behalf of the company involved, before final approval by CADE, or to perform other acts that configure consummation of the transaction.
- Sensitive Information
2. GENERAL GUIDELINES
2.1. Free Competition
Competition protection and antitrust laws are intended to ensure that there are fair conditions for Competitors to carry out their activities, ensuring that customers have access to quality goods and services at competitive prices.
The Company forbids Employees from practicing acts harmful to third parties that have the purpose or may produce:
(i) limitation, distortion or any damage to free competition or free enterprise;
(ii) domain of Relevant Market for goods or services; and
(iii) abusive exercise of a dominant position.
2.2. Relationship with Competitors
Practices that affect the exercise of free competition and are prohibited by law are not allowed in the Company’s relationship with its competitors, even within the scope of class associations, such as:
(i) explicit or implicit agreements between competitors to adjust prices, production, market division, conditions, advantages or abstention, including in government bidding (cartels); and
(ii) to limit or prevent access of new companies to the market.
2.3. Relationship with class associations
Interaction between Competitors within the scope of class associations must not generate the exchange of Sensitive Information that affects free competition.
As a rule, class association meetings are authorized to discuss issues that affect the entire sector, such as bills and regulations that affect the industry, and may seek, from public sources, information on the activities of the sector, provided that they do not deal with Sensitive Information.
2.4. Government Bidding Processes
The Company prohibits agreements between market agents to determine or influence the outcome of a government bidding process. Employees must not, under any circumstances:
(i) enter into any agreements with competitors to adjust proposal amounts, such as, but not limited to, bids, or fixing prices, minimums or maximums; splitting a set of bids or splitting bid lots; agreeing not to attend the bidding process or to withdraw the proposal; and
(ii) participation in the preparation of Invitations to Bid in which the Company can benefit.
Additionally, the involvement in government biddings by Employees must comply with the guidelines of the Ethics Executive Committee, the Code of Ethics and the Company’s policies.
2.5. Relationship with suppliers
Practices that affect the exercise of free competition and are prohibited by law are not allowed in the commercial activity of the Company and its suppliers, such as:
(i) the abuse of market power or economic power;
(ii) the practice of dumping or predatory prices (below the average variable cost, aiming to eliminate competitors); and
(iii) blocking input sources or distribution channels.
2.6. Relationship with companies for Corporate Transactions
The Company will carry out a due diligence process in a company subject matter of Corporate Transactions, aiming to map the main characteristics, including financial, legal and operational issues.
Among its purposes, due diligence must identify possible involvement of the company subject matter of Corporate Transactions with illegal or unethical conduct and verify the existence of internal controls and integrity measures in the company. In this case, once involvement is identified, if not remediable, the Company must interrupt the negotiations.
The opening of the Company’s strategic information to any third party is not permitted. In any exchange of confidential information that is necessary, provided that it is in accordance with the legislation in force and without violating this Policy, it is mandatory to enter into a confidentiality clause.
(i) Ensure that the Company, as an economic agent, respects the principles and legislation pertaining to competition law in the jurisdictions in which it operates;
(ii) Avoid situations that expose the Company and Employees to sanctions arising from violations of the competition law;
(iii) Inform the Ethics Executive Committee immediately about situations that denote conflict or raise doubts regarding compliance with this Policy;
(iv) Close discussions and/or withdraw from the meeting, in case of negotiations that imply noncompliance with this Policy, and must also immediately inform the Ethics Executive Committee.
3.2. Ethics Executive Committee
It is up to the Committee, impartially, to establish criteria for dealing with situations not provided for in this Policy, resolve controversial situations, equate ethical dilemmas and ensure uniformity of the criteria used in the resolution of similar cases.
Noncompliance with this Policy must be reported to the Ethical Reporting Channel available on the Company’s website.
Committing infractions that violate the right to free competition may expose the Company, the people who act on its behalf or the class association eventually involved to administrative, civil and criminal penalties, without prejudice to other corporate disciplinary measures, which may result in dismissal for just cause or contractual termination, in addition to compensation for any losses caused to the Company.
4. APPROVAL, EFFECTIVENESS AND AMENDMENTS
This Policy was approved by the Company’s Board of Directors, at the meeting held on September 20, 2022, effective from September 21, 2022, for an indefinite period, until there is a resolution to the contrary, and can be consulted on the company’s website: https://www.romi.com.
If in doubt about the application or interpretation of the policy, the Legal and Compliance Department should be consulted.
This Policy will be evaluated periodically by the Audit Committee and any amendments will be submitted to the Board of Directors for resolution.