TOTVS S A : 2022 Corporate Governance Report - Complete Version

REPORT ON THE BRAZILIAN CODE OF CORPORATE GOVERNANCE

PUBLICLY-HELD COMPANIES

TOTVS S.A.

Filed on July 30, 2022.

The documents mentioned herein are available on the Company's website (http://ri.totvs.com) and/or that of the CVM - Securities Commission (www.cvm.gov.br).

1. 1. As regards principle 1.1: "Each share must be entitled to one vote":

1. please state whether the issuer abides by the following recommended practice: "The company's capital stock must be composed up only of common shares";
2. in case such recommended practice has not been adopted, the reasons that led the issuer to adopt other shareholding structures shall be provided, in line with the guidelines of the Code.

Practice adopted.

In addition to being part of the Novo Mercado segment of B3 SA - Brasil, Bolsa, Balcão ("B3"), which requires that the capital stock of the companies in this segment be divided exclusively into common shares, the Bylawsof TOTVS SA ("TOTVS" or the "Company") forbids that preferred shares are issued (sole paragraph, Article 5). For further information on share capital, please refer to section 17 of the Reference Form.

2. As regards principle 1.2: "Shareholders' agreements shall not transfer to the signatory shareholders the decisions on matters within the competence of the board of directors, theexecutive board of officers, or the fiscal council (aka 'supervisory board')".:

1. please state whether the shareholders' agreements filed at the issuer's principal place of business or of which the controlling shareholder is a party, regulating the exercise of voting rights or the transfer of shares issued by the issuer, abide by the following recommended practice: "shareholders' agreements shall not bind the exercise of voting rights of any manager or member of the supervisory and control bodies";
2. in case such recommended practice is whether not adopted or is partially adopted, please provide, in line with the guidelines of the Code, the justification by the signatory shareholders of such agreements on the subject.

Practice adopted.

According to section 15.5 of the Reference Form, currently, there is no shareholders' agreement filed at the Company's headquarters, and there is no controlling shareholder either. Thus,

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directors are fully free to act autonomously in the Company's interests and according to their convictions.

Moreover, the Charter of the Board of Directorsapproved on August 29, 2017, as amended on October 6, 2020, in its article 9, paragraph (i), reiterates that every director shall "perform his/her functions in Board seeking to create value for the Company and in defense of the long-terminterests of shareholders".

3. As regards principle 1.3: "The Management must seek shareholder engagement, encourage attendance of shareholders' meetings and correct understanding of the matters to be resolved, as well as facilitate nomination and election of candidates to the board ofdirectors and fiscal council (aka supervisory board)":

1. please state whether the issuer abides by the following practices:
2. 1. "The board of executive officers should use the meeting to communicate the conduct of the company's business, so the Management must publish a manual to facilitate and encourage participation in meetings";
   2. "Minutes must enable a full understanding of the discussions at the meeting, even if drawn up as a summary of events, and identify the votes cast by the shareholders";
3. in case such recommended practices are whether not adopted or partially adopted, please provide the issuer's justification on the matter.

Practices adopted.

Item (a) (i) - The Company's Board of Executive Officers uses the general meeting to keep shareholders aware of how the Company's business is being conducted, remaining at the disposal of the shareholders during the general meetings to provide any information and clarifications. Usually, the Chairman of the Board of Directors, the Coordinator of the Audit Committee, the representative of the Company's independent auditors, and other members of the Board of Executive Officers and the Board of Directors are present at the annual general meetings.

The Company discloses information about the holding of meetings generally speaking, under the terms required by law, and regularly makes available to its shareholders at the annual general meeting, and also whenever required at extraordinary general meetings, a guide to attend general meetings that provide all the information necessary for shareholders to effectively take part in the corresponding meetings.

In addition, the following documents are disclosed at least 30 (thirty) days in advance on the website of the Brazilian Securities Commission ("CVM") and on the Company's Investor Relations page: (i) notice to shareholders, informing beforehand the dates on which the ordinary general meeting will be held; (ii) minutes of the Board of Directors' meeting resolving to call the general meeting; (iii) call notice for the general meeting; (iv) remote voting ballots; (v) guide to attend shareholders' general meetings; (vi) management's proposal on the matters to be resolved at the general meeting, accompanied with all documents and information necessary to

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support the shareholder's decision regarding the exercise of voting rights; and (vii) summarized maps, and a consolidated map/list of distance votes cast by remote ballots.

On December 16, 2016, the Governance and Nomination Committee was created - as an advisory body to the Board of Directors, which was turned into a statutory committee on April 5, 2018. Among other duties, such Committee's role is to set up the channels and processes for interaction between the Company's long-term shareholders and the Board of Directors, especially regarding issues of strategy, governance, compensation, succession, and composition of the Board of Directors, as provided for in item (ii) of article 25 of the Bylawsand item (ii) of article 45 of the Charter of the Company's Board of Directors.

Item (a) (ii) - Notwithstanding the fact Article 10, paragraph 6, of the Bylawssets forth that the meeting minutes shall be drawn up in a summary form, with a summarized report of the vote cast by the attending shareholders, blank votes, and abstentions, the Company seeks to ensure full understanding of the discussions held at the meeting, with any shareholder being entitled, pursuant to article 130, paragraph 1 of Law 6.404/76, to submit to the chair and secretary explanations of votes or dissenting votes, which are subsequently disclosed together with the minutes of the corresponding meeting, as required by article 21, item X of CVM Instruction 480/09. The Company believes that such practices ensure full understanding of the discussions held at meetings.

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4. As regards principle 1.4: "Defensive measures, if adopted by the company, should aim at preventing opportunistic acquisitions of significant shares of the company's capital stock at unfavorable moments in the market, preserving liquidity or maximizing the valueof shares, to the benefit of all shareholders":

1. please state whether there are mechanisms to protect against stock dispersion provided for in the issuer's articles of incorporation:
2. 1. if the issuer observed the following recommended practice: "the board of directors shall perform a critical review of the advantages and disadvantages of the defense measure and its characteristics, and above all of the triggers and price parameters that explain them, if applicable";
   2. whether such mechanisms comply with the following recommended best practices:
   3. • "Clauses that prevent the removal of any provision from the bylaws, the so-called 'entrenchment provisions', shall not be used"
      • "if the Bylaws sets forth that a public offering of shares (OPA) is performed whenever a shareholder or group of shareholders reaches, whether directly or indirectly, a significant share in the voting capital, the rule of determining the price of the offer shall not impose premium increases substantially above the economic or market value of the shares";
3. in case such recommended practices are whether not adopted or adopted in part, please provide the issuer's justification on the matter, in line with the guidelines of the Code;
4. in case such practice was reported as having been adopted, please inform, in line with the guidelines of the Code:
5. 1. websites where the board of directors' critical review by the board of directors can be consulted as regards the advantages and disadvantages of said defense measure and its characteristics, and above all the triggers and price parameters thereof;
   2. the reasons why the issuer understands that premium increases above economic or market value are not substantial.

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Item (a) (i) - Practice adopted:The Board of Directors, through its Governance and Nomination Committee, analyzed the advantages and disadvantages of the defense measure provided for in the Bylaws, and its maintenance was recommended to the Board of Directors, that approved the recommendation, at the meeting held on July 04th, 2022.

Item (a) (ii) (part 1) - Practice not adopted:The mechanism to protect against stock dispersion was added as a provision to the Company's Bylaws(article 43) on March 7th, 2006, when the initial offering of shares for listing on B3's Novo Mercado was carried out, aimed at protecting the Company and its shareholders, seeking to avoid the concentration of the Company shares in a small group of investors, and, consequently, to promote their dispersion. It is worth emphasizing that the percentage adopted as a trigger to activate such protection mechanism of stock dispersion in the Company's Bylawsexceeds the current interest of the largest shareholder.

Item (a) (ii) (part 2) - Practice adopted:The Bylawsestablish in Article 43, § 2, that: "The purchase price in the Public Tender Officer for each share issued by the Company may not be lower than the highest amount between (i) one hundred and twenty-five percent (125%) of the highest unit quotation reached for the shares issued by the Company during the twelve (12) month period prior to the Public Tender Offer in any stock exchange in which the Company's shares are traded; (ii) one hundred and twenty-five percent (125%) of the highest unit price paid by the Buying Shareholder, at any time, for a share or a share lot issued by the Company; (iii) the Economic Value determined in the appraisal report." Thus, the Management considers that the rule of termination of the offer price does not impose substantial premium increases, also considering the practices of the Stock Market. In addition, the Company Management understands that the shareholders have repeatedly considered that the OPA price parameters are adequate to protect the Company, without generating undue enrichment of the management.

5. Regarding principle 1.5: "Regardless of the legal form and the terms and conditions negotiated for the transaction that gives rise to the change of control, all shareholders of thecompany subject to the transaction must be treated fairly and equitably":

1. please inform if the issuer observes the following recommended practice: "the company's bylaws must set forth that: (i) transactions involving the direct or indirect sale of share control must be accompanied of a public offering of shares (OPA) to be forwarded to all shareholders, at the same price and conditions got by the selling shareholder; (ii) Management members must express their opinion on the terms and conditions of corporate restructuring processes, capital stock increases and other transactions that give rise to change of control, and state whether they ensure a fair and equitable treatment to the company's shareholders";
2. in case such recommended practices are whether not adopted or partially adopted, please provide the issuer's justification on the matter.

Practices adopted.

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