Gerdau S A : Related Party Transactions Policy

Related Party Transactions Policy

1. Objective

1.1. This Related Party Transactions Policy aims to establish the procedures to be followed in Related Party Transactions to ensure that they are carried out in the best interest of the Company and its Affiliates.

2. Scope

2.1. This Related Party Transactions Policy applies to any and all Transaction carried out with Related Parties in Brazil or abroad.

3. Definitions:

3.1. For the purposes of this Policy on Related-Party Transactions, the following terms, when their initial letter is capitalized, will have the following meanings, and may be in singular or plural form:

"Managers":means the statutory Officers and members of the Board of Directors of the Company.

"Affiliate(s)":means the Subsidiaries, Associated Companies and/or Parent Company.

"Material Fact or Event":means any decision of the Controlling Shareholders, resolution of the Shareholders Meeting or the management bodies of the Company or any other fact or event of a political-administrative, technical, business or economic-financial nature related to the Company's business that could considerably influence (i) the price of the Securities; (ii) the decision of investors to buy, sell or hold the Securities; or (iii) the decision of investors to exercise any rights inherent to the holders of the Securities.

"Stock Exchange":means any stock exchange or organized over-the-counter trading market in which the Company's Securities are admitted for trade, in Brazil or abroad.

"Company":means Gerdau S.A.

"Corporate Accounting":the accounting and controllership area of the Company.

"Control":means (i) the power held by a natural person, Entity or group of persons or Entities, bound by a voting agreement, or under shared control, that hold partner rights that assures them, on a permanent basis, the majority of votes in resolutions of the Shareholders Meetings and the power to elect the majority of managers in an Entity; and (ii) the effective use of their power to manage the corporate activities and orient the functioning of the bodies of the Entity. The meaning of the terms "Subsidiary," "Parent Company" and "Controlling Shareholder" is related to the definition of Control.

"CVM":means the Securities and Exchange Commission of Brazil.

"Investor Relations Officer":means the Officer of the Company responsible for providing information to investors, to the CVM and to the Stock Exchange, among other duties set forth in regulations of the CVM.

"Entity":means any legal or unincorporated entity, including, but not limited to, companies of any type, in fact or under the law, associations, consortia, investment funds, joint ventures or partnerships.

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Related Party Transactions Policy

"CVM Instruction 480":means as amended, enacted by CVM, which provides for the registration of issuers whose securities are traded in regulated security markets.

"Brazilian Corporation Law":means Federal Law 6,404, of December 15, 1976, as amended.

"Close Family Members":means the family members of the Managers or Controlling Shareholders who may be expected to exert any influence on the Managers or the Controlling Shareholders or who are influenced by them, including (a) the children, dependents, spouses or partners of the Managers or Controlling Shareholders; and (b) the children or dependents of the spouses or partners of the Managers or Controlling Shareholders.

"Related Parties":means the: (i) Affiliates; (ii) Managers and Controlling Shareholders of the Company; (iii) Close Family Members; (iv) Key Management Person; (v) any Entities over which the Managers or Controlling Shareholders of the Company exercise Control, whether Subsidiaries, Associated Companies or companies under shared Control; and (vi) Private Pension Fund sponsored by Gerdau companies.

"Key Management Person": for the purposes of this Policy, refers to the members of the Board of Directors, Statutory Board of Executive Officers and senior executives of each business operation.

"Related Party Transactions Policy":means this Related Party Transactions Policy.

"Associated Companies":means the Entities in which the Company has significant influence, under Brazilian Corporation Law and the applicable legislation.

"Subsidiaries":means the Entities in which the Company, directly or through other Subsidiaries, holds any partner rights that ensure Control power.

"Parent Company":means the Entity that holds Control power over the Company.

"Transaction": means any legal transaction conducted between two or more natural persons or Entities, of any kind, regardless of whether a financial reference value is attributed to the transaction, including, but not limited to, the acquisition, sale (including fiduciary sale), encumbrance, lease or loan or any assets (including real estate properties), rendering of services, granting of loans or financing or transfer of funds of any kind, sponsorship, donations, as well as the pledging of security interests or personal guarantees.

"Securities":means any shares, bonds, warrants, receipts (including those issued outside Brazil with shares underlying) and subscription rights, American Depositary Receipts ("ADR"), promissory notes, call or put options, indexes and derivatives of any kind, or any other securities or contracts of collective investments issued by the Company, or referenced thereto, which by legal determination are considered securities.

4. Guidelines for Related Party Transactions

4.1. Related Party Transactions must mandatorily:

1. be analyzed with regard to their convenience and opportunity for the Company or its Affiliates by the Statutory Executive Board or by the Board of Directors, as applicable, in accordance with items 4.2 and 4.3.

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Related Party Transactions Policy

1. 1. be carried out on an arm's length basis, i.e., within market parameters and subject to the same principles, rules and conditions applied to other transactions carried out by the Company with independent parties.
   2. be supported by documentation that attests to their compliance with control procedures, in accordance with items 4.4, and
   3. be disclosed to the market, in accordance with item 4.5.
2. All Related Party Transactions shall be submitted for discussion and vote by the Board of Directors, in accordance with the authority levels stipulated by the Management, observing that:
3. 1. 1. Related Party Transactions between the Company and its Subsidiaries whose amounts exceed fifty million reais (R$50,000,000.00) must be approved by the Board of Directors; and
   2. Related Party Transactions whose amounts exceed two hundred fifty thousand reais (R$250,000.00) must be approved by the Board of Directors (except if carried out between the Company and its Subsidiaries).
4. The Managers who have any conflict of interests with any resolution connected with a Related Party Transaction must report such fact, refrain from participating in the discussions and abstain from the decision. Moreover, the Statutory Executive Board or the Board of Directors, as applicable, may resolve on a potential conflict of interest between a Manager and a Related Party Transaction, and such Manager should refrain from participating in the discussions and abstain from voting in the resolution.
5. Irrespective of their value, Related Party Transactions must be informed in writing to the Corporate Accounting area, which a description of the following information pertaining to the Transaction: (a) purpose; (b) duration; (c) type of relationship between the Related Parties and the Company; (d) amount involved; (e) amount corresponding to the interest of said Related Party in the Transaction, if measurable; (f) conditions for rescission and termination; (g) any influence the contract has on the Management or course of business of the Company; and (h) information on similar market transactions.
6. The Company must disclose information on Related Party Transactions in its financial statements and through other means established in the applicable legislation and regulation. In addition to the disclosure set forth the Related Party Transactions that constitute a Material Fact or Event must be disclosed to the market in accordance with the Company's Information Disclosure Policy.

5. Responsibilities

1. The Related Party Transactions Policy must be observed by all shareholders, Managers and employees of the Company and its Affiliates.
2. The Managers are responsible for, in connection with this Related Party Transactions
   Policy:
3. 1. disseminating the Related Party Transactions Policy,
   2. ensuring that Related Party Transactions are carried out in compliance with this Related Party Transactions Policy, and
   3. approving the Related Party Transactions indicated in item 4.2.

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Related Party Transactions Policy

1. The Investor Relations Officer is responsible for, in connection with this Related Party Transactions Policy, ensuring the disclosure of Related Party Transactions under item 4.5.
2. The Corporate Accounting area is responsible for, in connection with this Related Party Transactions Policy:

1. maintaining adequate systems, mechanisms and processes for capture information on and assessing Related Party Transactions;
2. ensuring that the Related Party Transactions are disclosed in the financial statements, in accordance with the applicable accounting standards; and
3. reporting Related Party Transactions to the Managers, on a quarterly basis.

6. Miscellaneous

1. Any questions and clarifications concerning the interpretation or applicability of this Related Party Transactions Policy should be submitted to the Investor Relations Officer, who must respond to them within fifteen (15) days as from their receipt.
2. Any violations of this Related Party Transactions Policy must be immediately informed to the Investor Relations Officer. Any violations of this Related Party Transactions Policy related specifically to the Investor Relations Officer must be informed to the Board of Directors.
3. This Related Party Transactions Policy was approved in a meeting of the Company's Board of Directors held on February 22, 2022, with immediate effect for an indefinite term. Any amendment to this Related Party Transactions Policy must be approved by the Board of Directors.

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