Cogna Educacional : 2019 Sustainability Report

April 30, 2020 at 04:49 pm

A NEW AGE

Summary

School - Recife/PE

Message from Management | P.03

1. A new age | P.05

Cogna | P. 05

2019 Highlights | P.09 Awards & recognitions | P.11

2. Corporate Governance | P.12

Governance Structure | P. 13

Ethical conduct of business | P. 14

Risk management | P. 16

3. Strategic management | P.18

Business model | P. 19

Digital transformation | P. 20

Sustainability | P. 21

4. Business

Performance | P.22

Macroeconomic and sector scenario | P. 22 Economic and financial performance | P. 23 Operating performance | P. 25

5. Transformational

Knowledge | P.28

Primary and secondary school | P. 29

Postsecondary education | P. 39

6. Value

Relationships | P.57

Employees | P. 57

Society | P. 60

7. Environmental Impact

Management | P.69 8. About the report | P.72

Materiality matrix | P. 73

Exhibits | P.74

GRI content index | P.80

Corporate Information | P.91

View videos about the initiatives covered in this report by downloading the QR Code Reader onto your phone and scanning the codes that appear throughout the report.

COGNA Sustainability Report 2019

Message

From Management GRI 102-14

Since the '60s, Cogna has adapted swiftly to an evolving market, improving students' lives through our commitment to accessible, quality education. It is in this spirit that, in 2019, we took another step in building our history, in line with our cutting-edge DNA, which led to the birth of Cogna Educação, a holding company covering all our businesses in the education sector (B2C and B2B of primary, secondary, and postsecondary education), thereby allowing the entry of new models supported by technology and our digital culture.

Our new structure was organized into four segments: Kroton, Platos, Saber, and Somos-and designed with the autonomy and flexibility necessary for business evolution and value creation for our stakehold- ers. Cogna Educação harnesses the

strength of a group that drives the primary and secondary education of children and adolescents who go on to become university students, then young adults competing in the job market, even that student who wants to follow the continuing and graduate studies. This is the spirit and model propelling us towards our main purpose: to transform the lives of Brazil's future generations by offering quality education that is accessible to all.

In 2019, we also promoted relevant changes in our governance structure. We believe that diverse and transparent management is essential for business continui- ty. Therefore, we diversified our Board of Directors with the addition of a woman member and by increasing the number of independent board members.

This transformation would not have been possible without the support of our 30,690 employees in 2019, 50% of whom are the teachers who play an invaluable role in enabling us to effectively pursue our core objectives. In line with our digital transformation, we strengthened our employee training program and expanded our partnerships with startups. In ad- dition, we ended 2019 with 100% of IT teams working under agile models, under the pace of SAFe, a methodology adopted by the Company in a transformational and agile process that took place over the course of 18 months. This process has supported our digital transformation objective, and informed the recent evolution of our business culture.

The new structure was organized into four segments: Kroton, Platos,

Saber, and Somos- and designed with the autonomy and flexibility necessary for business evolution and value creation for our stakeholders.

COGNA Sustainability Report 2019

This culture is reflected in our students' experience and the quality education we offer across all segments, with solutions involving qualifications in line with market demands in postsec- ondary education and graduate courses online programs man- agement, even an integrated services platform in primary and secondary Education.

Our cycle of impacting our stu- dents' lives also includes promoting access to education and employability by evolving our products and systematically monitoring our students' jour- neys. Under this viewpoint, we advanced our employability-centric platform, the "Canal Conec- ta," which, in 2019, relied on over 29,000 partners, 200,000 job vacancies, and 646,000 active students. In 2019, we also hosted two virtual fairs that were free of charge and open to the public, wherein over 30,000 job vacancies were presented. The fair included the participation of large corporations that conducted selection processes, employability forums, and offered labor market tips.

When we look at the scope of our company's operations, we are aware of our ability to impact society. Within such context, our units continue promoting social initiatives through the voluntary participation of students and employees and contributing to the development of communities in which we operate. In 2019, we provided 2.65 million specialized services (legal, psychological, and health, among others), assisting more than 2.06 million people, an impact corresponding to R$523.10 million. Concerning our business performance, even in the face of modest economic growth, we reached R$7,027.2 million net rev- enue, 15.9% higher than in 2018, and an EBITDA of R$2,422.1 mil- lion, 3.5% higher than in 2018.

Therefore, we ended 2019 initiating a new journey. Our long-term vision is supported by a solid business model focused on creating value for our students and stake- holders. Thus, we move forward, endeavoring our efforts to the knowledge that transforms.

Rodrigo Galindo

CEO of Cogna

COGNA Sustainability Report 2019

1. A new age

Center - Rondonópolis/MT

COGNA

In 2019, Cogna ushered in a new era-weset up a new business structure, we launched new brands, and we created a new management concept. In addi- tion, Cogna Educação S.A. was born, a holding company operating in four verticals of Brazil's educational sector.GRI 102-1,102-4,102-5,102-10

The new brand prompted us to change our ticker on the Stock Exchange of São Paulo (B3) from KROT3 to COGN3. On the over- the-counter market (OTCQX), in New York, our stocks are now traded under the ticker COGNY. In 2019, we also started relocating our administrative unit in the city of São Paulo to an environmentally sustainable new building. GRI

THE YEAR OF 2019 SET THE BEGINNING OF A NEW AGE

We set up a new business structure, we launched new brands, and we created a new management concept.

Our new positioning aims at sus-	102-3,102-10
taining a new phase of growth by
combining different	strategies.
Under Cogna's management um-
brella, the four companies have
the autonomy and flexibility to
conduct their own	businesses-

within the framework of our digital transformation.

Access the QR Code and check the video

COGNA Sustainability Report 2019

At the end of 2019, Cogna recorded a total of 822,000 students in the postsecondary education, through its 176 own units and 1,410 distance learning centers, as well as preparatory courses via the LFG brand. In primary and secondary Education, we recorded 36,000 students distributed among 54 own schools, 26,000 students distributed among 125 Red Balloon units, as well as 1.3 million students assisted by approximately 4.0 thousand partner schools adopting core content solutions, complementary contents, and digital services. GRI 102-6, 102-7

Cogna Companies GRI 102-2,102-6,102-7,102-10

Cogna Ventures: venture capital arm of the Company which should explore new fronts of growth and innovation.

Kroton: B2C vertical business to consumer, operating in postsecondary education through 176 own units and 1,410 distance learning (DL) centers.

Platos: B2B2C vertical business to business to consumer, it observes the EdServ Platform concept (educational services platform) and offers various services and solutions for postsecondary institutions throughout the country. In 2019, it served Kroton units as well as nearly 40 contracts with third party units through the Saraiva Educação solution.

Saber: B2C vertical, it combines renowned primary and secondary education institutions in the country, with 54 own units in 13 Brazilian states, services relating to the National Textbook Program (PNLD) and the Red Balloon.

Somos: in B2B vertical of primary and secondary education, Somos' umbrella includes the brand Somos Educação and is positioned as an integrated services platform, aiming to be the one-stop provider of primary and secondary private schools, supported by K12 Platform, developed under the concept of platform-as-a-service.

COGNA Sustainability Report 2019

Timeline

In 1966, five young friends set up the pre-college

preparatory course Pitágoras in the city of Belo Horizonte (MG). In two years,

the course recorded 600 young students,

distributed in
13 classes and
three shifts.	The

	60s

Inauguration of
the first school - Colégio Pitágoras;
Startup of the largest unit of Grupo Pitágoras in the Primary and
Secondary Education, the Colégio Pitágoras Cidade Jardim.

			• The first Pitágoras

				college is created;
			• Pitágoras' IPO on
				BM&FBovespa,
	The			named Kroton
			Educacional (KROT11);
	80s		• New financial

				contribution from one
				of the world's largest
	In partnership with a			private equity funds,
	construction company			Advent International,
	that would build two			which now shares the
	infrastructure works in Iraq		Company's control with
	and Mauritania, Pitágoras			founding partners.
			The
	managed schools with over
	1,000 Brazilian students in			2000s
	these countries.


The			Acquisition of IUNI
70s
		Educacional, institution
				which offers undergraduate
				and graduate programs
• Pitágoras network			under the brands UNIC,
	is created;	The	UNIME, and FAMA.
• Pitágoras Foundation
90s
	is set up to make

feasible educational projects in public and

private institutions.

2011

Acquisition of Faculdade

Atenas Maranhense (São

Luís e Imperatriz - MA), Faculdade União (Ponta Grossa - PR), Faculdade do Sorriso (FAIS) and UNOPAR, making Kroton

the leader in Brazil's distance learning sector.

2010

Acquisition of Centro

Universitário Cândido 2012

Rondon (Unirondon)

and Uniasselvi.

...continued

COGNA Sustainability Report 2019

Timeline

Opening of 40 new Distance Learning
undergraduate centers of Unopar;
Announcement of a merger between Kroton
and Anhanguera.

2013

Approval of merger with Anhanguera;
Development of a
new academic model, Kroton Learning System 2.0;
Launch of our employability
pilot channel, the "Canal Conecta".

	• Launch of five new
	greenfields;
	• Inauguration of 200
	new centers, raising
2015	the total to 1,110.

	• Launch of own installment	2017
	payment product, the
	Private Student Installment
	Payment (PEP);
	• Acquisition of Studiare,
	essential for the Company's	• Partnership with Cubo Itaú;
	adaptive learning concept.
	• Creation of Saber, the Primary

		and Secondary Education holding;
		• Acquisition of Colégios Lato
		Sensu (Manaus/AM) and
2014	2016	Leonardo da Vinci (Vitória/ES)
• Acquisition of Somos, Brazil's

		largest Primary and Secondary
	Sale of Uniasselvi to	Education platform.

	Treviso Empreendimentos	2018
	e Participações S.A. as part

of the Brazilian Antitrust Authority's requirements (CADE) to authorize the merger with Anhanguera.

2019

The inception of Cogna Educação, a

holding operating in four verticals of Brazil's educational sector.

COGNA Sustainability Report 2019

2019

HIGHLIGHTS

GRI 102-7

ECONOMIC AND

FINANCIAL PERFORMANCE


R$ 7,027.2	R$	772.0
million Net Revenue	million Net Income


R$ 2,422.1	R$	36.7
million EBITDA	billion of traded volume in
		100% of trading sessions

POSTSECONDARY EDUCATION


822,000	176
undergraduate students		own units


41,200	1,410

graduate students

DL accredited centers

COGNA Sustainability Report 2019	10

PUBLISHING COMPANIES	PRIMARY AND SECONDARY EDUCATION

2.3	50,000	36,000	26,000	1.3 MILLION
million	prints	students in	students in 125 units	students assisted by
books sold	in PNLD	54 own schools	of Red Balloon	4.0 thousand partner schools

EFFICIENT MANAGEMENT

2.9%

13%

30,690

730,477.99

consumption due

with energy

higher total energy

reduced energy

own employees

hours of training

to our expansion

efficiency projects

VALUE FOR SOCIETY

3,794

2.06

2.65

R$ 12.5

social projects executed by units, postsecondary million people benefited by

million students' services billion in social and

education centers, and own schools

projects and services

to community

economic assets

R$523.10

R$ 6

R$ 10.3

million financial relief	return to the benefit of	billion of annual economic
from public authorities	society to every R$1 invested	impact on society

COGNA Sustainability Report 2019

Awards and			Executive Award
recognition			Valuable
		Category -
					Valuable Executive
					in the Education
					Rodrigo Galindo
Empresa Mais -		Top Education

	Award
O Estado de S. Paulo
	Textbook Publishing
Ranked 1st \| Education			Época 360 -
	Company \| Saraiva
Sector Category			Época Negócios

3rd in the ranking \|					Ranked 1st \|
Publicly-held Companies					Education Sector
Innovation Category			1		Category

	Companies
	with Great
	Organizational
	Communication			The Brand
		Award
Getúlio Vargas		Who Decides Survey
Education \| Kroton
Foundation	Outstanding position

Tribute			among company managers
				and senior business

Performance	executives of Rio Grande do
in college prepara-
Sul market in the Distance
tory course -
Learning category \|
Law \| Anglo
Anhanguera

21st EY Award

Entrepreneur of

the Year in the

Master Category -

Rodrigo Galindo Innovation

Value

Ranked 1st |

Services Sector

Top Brands - CRCOM

Business Communication

Institutional Investor Association - Latin America Executive Team 2019

Best Investor Relations Program

Best CEO | Rodrigo Calvo Galindo

Best CFO | Jamil Saud Marques

Best Investor Relations

Professional | Carlos Alberto Bolina Lazar

Best IR team

Best Analyst Day | Overall

Best ESG Metrics | Overall

Best Website | Overall

COGNA Sustainability Report 2019

2.Corporate governance

The conduct of our businesses is guided by corporate governance-related principles and best market practices to ensure transparency with our stakeholders and a long-lasting company.

Since 2012, we have been a part of the B3's Novo Mercado, which lists companies with the best corporate governance practices. We also observe the recommendations of the Brazilian Institute of Corporate Governance (IBGC). In addition, we are a full corporation, i.e., we do not have a set of controlling shareholders in the company's helm.

WE OBSERVE THE BEST

MARKET PRACTICES

Our governance is guided by reliability, transparency, and the capacity to create value and return. Check our charters and policies at http://ri.cogna.com.br/en/governaca/politicas- corporativas-e-estatuto-social/.

COGNA Sustainability Report 2019

Board Restructuring

GRI 102-22,102-24,405-1

Governance structure

GRI 102-18,102-19,102-22,102-24

Our governance restructuring was one of 2019's highlights. To bring greater diversity to our Board of Directors, we transitioned from a structure solely made up by male members and two independent board members to a structure composed of 14% women and

57% independent board members. Check full structure in the Exhibits.

Our governance structure is composed of the Board of Directors, five Advisory Committees, a Statutory Board of Executive Officers, and a Fiscal Council, as described below.

Board of Directors (BD): it de- liberates, formulates, and imple- ments the business policies and general guidelines, including long- term strategies, and it elects the Company's independent auditors and officers and oversees their management. It is composed of seven sitting members, four of them independent, elected at the shareholders' general meeting for a combined two-year term of of- fice, and reelection is authorized.
Advisory Committees: we rely on five Advisory Committees that aim at providing the Board of Directors with the subsidies required for the decision-mak- ing process and support the Board of Executive Officers in the policies approved by the Board of Directors. Each com- mittee is composed of three to five members elected by the Board of Directors:
- Finance and M&A (Mergers and Acquisitions)

- People & Governance
- Strategy & Innovation
- Audit & Risk
- Founders Committee
Statutory Board of Executive Of- ficers: it is in charge of the Com- pany's daily management and the implementation of general policies and guidelines laid out by the Board of Directors. Our legal representatives are elected by the Board of Directors for a two-year term of office, and re- election is authorized. At the end of 2019, we had five Statutory Of- ficers and five Executive Officers, among them, two were women.

It is worth noting that under the Vice President of Product, Management and Expansion, who directly reports to the Chief Executive Officer, we have a department dedicated exclusively to corporate governance.

Fiscal Council: an independent, non-permanent body that aims at monitoring the practices by Management and renders an opinion on our accounts and fi- nancial transactions. This body relied on four members and four deputy members at the end of 2019.

Corporate employees

COGNA Sustainability Report 2019

Compensation Policy

GRI 102-35,102-36,102-37

The compensation of members of the Board of Directors and Board of Executive Officers is based on the best corporate governance practices and is revised yearly through market benchmarks. Although it does not involve the participation of stakeholders, total compensation defined by the Board of Directors is approved at the General Shareholders' Meeting.

Members of the Board of Directors receive a monthly fixed compensation and independent members are eligible for long-term (share- based) variable compensation. In addition, Board members participating in the Advisory Committees receive an additional monthly amount for their contribution.

The statutory officers receive a fixed compensation and are eligible for short-term variable compensation (bonus) and long-term(share-based) variable compensa- tion. Check additional information in the GRI Summary.

Ethical

business conduct

GRI 102-16;102-17;102-25;103-2;

103-3: Anticorruption; 205-2;205-3;

103-2;103-3: Unfair Competition

Ethics, integrity, and transparency are principles built into Cogna and in the way we relate with our stakeholders. To guide the conduct of our businesses, our principles and guidelines are registered in Kroton's Code of Conduct and Somos' Code of Conduct. These documents out-

line the behavior expected of all employees, suppliers, and other business partners.

These codes also discuss issues concerned with conflicts of interest, guidelines on how to inform and receive approval for any external work, acquisition of financial interests, performance of personal activities, and development of relationships which may create, or apparently create, such conflict. Therefore, issues may be raised for our Advisory Committees' awareness and deliberation, conditional to the hierarchical level involved and conflict's seriousness. Additional information at: http://ri.cogna.com.br/en/governaca/politicas-corporativas-e-estatuto-social/ GRI 102-25

Unique Code of Conduct GRI 102-10, 102-16

In 2019, codes were revised and are in final phase of being consolidated into a single document, the Cogna Group's Code of Conduct, which will comprise the conduct expected

from all employees, partners, and suppliers relating to all the Group's brands.

In addition, we have an Anticorruption Manual containing guidelines on the Anticorruption Law No. 12.846/2013 to be observed by all employees, including members of the Board of Directors and Board of Executive Of- ficers, suppliers, and partners. The Manual is available at http://ri.cogna.com.br/en/governaca/politicas-corporativas-e-estatuto-social/.

When joining the Company, all employees receive mandatory online training about the Code of Conduct and the Anticorruption Manual at Kroton University. In 2019, we had 6,824 certifications, 3,449 of which were on the Code of Conduct and 3,375 of which were on the Anticorruption Manual. We also published via e-mailperiodic newsletters on ethics, compliance, and anti-corruption.In 2019, these communications reached 100% of our employees. GRI 103-1,103-2,103-3: Anticorruption, 205-2;205-3

Anhanguera Joinville - Joinville/SC

COGNA Sustainability Report 2019

Yearly, we conduct a General Risk Analysis, which involves, besides a historical analysis of strategic planning, processes, and internal audits, key executives' perception of risks. After senior manage- ment's survey and validation, the

This channel assures the confidentiality of information. All situations reported are treated seriously, confidentially, impartially, and in- dependently, ensuring the identity of the whistleblower is concealed throughout the entire process.

What happens to complaints?

GRI 102-17

As described below, the whistleblower may follow-up on the progression of his/her case at each stage throughout the process by entering the date and the report protocol number in the Confidential Channel.

highest risks are monitored and mitigation action plans are de- fined. In 2019, 100% of the Company was evaluated and no perceptions or relevant indication of risks were identified in terms of corruption. Additional information on Risk Management. GRI 103-1,103-2,103-3: Anticorruption, 205-1

Confidential Channel

In 2019, 386 complaints were received via Confidential Channel. We verified that 100% of these complaints were within the scope of action. In addition, 22 detailed investigations were conducted and submitted for senior man- agement's evaluation. Out of the total of complaints, 48% referred to non-conformities with policies and procedures, 17% to conflict of interests, 17% to misbehavior, and

The cases reported

are analyzed by Internal Controls

area. A screening is carried out to ensure that these refer to conduct- related issues.

If situations are confirmed, corrective actions are defined by a group of executives of related areas, ensuring that

all viewpoints are considered on a neutral basis.

Kroton Confidential Channel receives complaints about breaches of our Code of Conduct through a website that can be accessed both via "Portal Informa," available to employees and via the Company's institutional website (www.cognaedu.com.br), which can be used by employees at any level as well as by suppliers and business partners.

3% to labor infringements.

In 2019, we did not receive any complaint on corruption prac- tice, as provided for by Law No. 12.846/2013 or related laws. Due to confidentiality, we do not report information about the disciplinary measures adopted after complaints. GRI 205-3

02		04

Action plans are		By means of a
elaborated for		quarterly report
screened cases,		of the executive
with involvement		board of Internal
of appropriate		Controls, Audit and
areas. The senior		Compliance to the
management is		Audit Committee,
informed of these		all complaints
cases during		are shared.
investigation process.

COGNA	Sustainability Report 2019				16
Risk management	GRI 102-11;102-15;102-29;102-30;102-31	Governance and
Impacts, risks,	and opportunities
				risk structure	are analyzed by board members

At Cogna, we continuously moni-	dits, and the track record of works		on a quarterly basis at the Board
tor risks that may impact business	performed by DCAC. The analysis		of Directors and Advisory Com-
continuity in the short-, medium-	results in detailing all the risks, as	It shall be incumbent upon the	mittees meetings. In addition, stra-
and long-terms. To support the	well as a criticality mapping of	Board of Directors to approve	tegic issues or issues that rely on
management of the Internal Con-	business-intrinsic risks.	the Company's short-, medium-	the Board's approval may be raised
trols, Audit and Compliance Execu-			and long-term strategy and ob-	through conference call, mail, vid-
tive Board (DCAC), we have a Risk	Then, we plan structuring actions	jectives, the Risk Management	eo conference, e-mail, or any other
Management Policy, which sets out	to	mitigate any risks, appoint	Policy, as well as the holding's	electronic means, including oth-
the concepts, approaches, princi-	those responsible for each act,	risk map. The Board of Directors	er highly secure communication
ples, guidelines, and responsibilities	conduct monitoring, and report	is also liable for evaluating, at	apps. GRI 102-29;102-30;102-31
in the risk management process of	the risk evolution quarterly to the	least, annually, the adequacy of
Cogna and its subsidiaries.	Audit Committee. Key issues iden-	the governance structure, meth-	The Audit and Risk Committee
		tified in the last General Risk Anal-	odology, and other aspects relat-	continuously	oversees	the risk
The methodology laid out by the	ysis, in 2019, are described below.	ing to Cogna's risk management,	management	process,	reporting
Risk Management Policy is guid-	Overall, we grouped over 200 risk	and for approving eventual ex-	material facts to the Board, if nec-
ed by the best market practices,	factors in 30 strategic risks, and all	ceptions to the Risk Management	essary. It is also in charge of meth-
such as the COSO-ERM (Com-	of them are based on the assess-	Policy by means of the Audit	odology approval, the corporate
mittee of Sponsoring Organiza-	ment of severity, speed, and com-	Committee's recommendations.	approach to	risk management,
tion of the Treadway Commission	plexity of recovery.		and submitting the evaluation of
- Enterprise Risk Management				the risk management process to
Framework) and ISO31000/2018,	Risk Factors		the Board of Directors.
in addition to the guidelines of the
Brazilian	Institute of Corporate
Governance (IBGC).	• Data confidentiality and protection
		•	Credit and default
Yearly, we carry out a General Risk	•	Tax incentives
Analysis (AGR), based on stra-	• Revenue, rebates, and collec-
tegic planning, executive assess-		tion management.
ments, fund reports, external au-

ECSA - Chave do Saber School - Cuiabá/MT

COGNA Sustainability Report 2019

The risk management observes the Three Lines of Defense model, as follows:

Board of Directors

Audit and Risk Committee

CEO

			AuditIndependent	BodiesRegular
1st	2nd	3rd
Line of Defense	Line of Defense	Line of Defense
	Financial controls
	Information Security
Management	Risk management	Internal
Controls	Quality	Audit
	Internal controls
	Compliance

Information Security and Data Protection

At Cogna, we endeavor financial and operational efforts to manage risks relating to Information Security and Data Privacy aiming at ensuring business continuity, protecting the Company's strategic information as well as information about its clients and business partners, and complying with prevailing Brazilian laws.

We are aware of the relevance of this issue for our businesses. Therefore, the Company's senior management is directly involved in defining performance strategies to monitor and mitigate these risks. We also rely on an area dedicated to Information Security, with Executive Management focused on managing and implementing system and procedural improvements to enhance Cogna's information security maturity. We also work in an integrated manner with Risk Management, Controls, and Internal Audit areas to identify opportunities that improve and correct eventual gaps.

Since 2018, we have been assisted by advisors and renowned firms in the planning and execution of an Information Security Directive Plan covering Governance, Aware- ness, Privacy and Data Classifica- tion, Identities Management, Detection and Reply, and Business Continuity. Based on these disci- plines, we manage risks and devise mitigation action plans.

We understand the relevance of risk in our business. Thus, senior management

is directly involved in defining performance strategies to monitor and mitigate these risks.

We laid out a pluri-annualroad- map to execute all the actions envisaged by the Information Security Directive Plan and we prior- itized actions in order to firstly ensure compliance with the General Law of Data Protection - LGPD. The results monitored by the Plan are appropriately reported to the Company's Audit Committee and the Board of Directors. GRI 103- 2, 103-3: Customer privacy

COGNA Sustainability Report 2019

3.Strategic management

In line with market demands and our commitment to quality education, in 2019, we changed our structure, governance, and strategy under the Cogna umbrella, our new brand. Supported by digital transformation and expansion carried out over the past years, we created a holding structure with four companies under our management: Kroton, Platos, Saber, and Somos, which operate throughout Brazil's entire private education chain.

GRI 102-10

With this change, we seek to ensure our business continuity and the continued value creation for our stakeholders. Check below key advances and foundation to support us over the upcoming years.

Saber School - Cuiabá/MT

COGNA EDUCAÇÃO,

A HOLDING COMPANY

Not only our brand, but our structure and strategy also changed. Check our business model on the next page.

COGNA Sustainability Report 2019

Business Model

Our Business Model is our operational structure for sustainable growth.

COGNA

Primary and

Secondary Education

EDUCAÇÃO

Postsecondary Education

Saber - it combines renowned

Holding

institutions as well as services in line with

Kroton - on-campus and

the National Textbook Program and Red

Cogna Venture

distance learning segments - B2C

Balloon operations- B2C/B2C

Venture

Platos - Services Platform -

Vasta/Somos - platform-as-a-service

Capital Fund

B2B2C

with content solutions and IT services

for partner schools - B2B

Manufactured	Intellectual	Financial	Human	Natural Capital
Capital	Capital	Capital	Capital	• 84 units covered
Postsecondary Education:	We understand that	• R$7,027.2 million	• 30,690 employees	by simple automation
176 own units	our segments and	net revenue	• 57.7% of staff	projects, with an investment
of R$2.1 million
and 1,410 DL	respective brands	• R$2,422.1 million	composed of women
• 8 units covered
accredited centers;	as well as our initiatives	EBITDA	• 730,477.99 hours
Primary and	to promote quality	• R$772.0 million	of training	by advanced automation
education compose	projects, with an investment
Secondary Education:	net income
our intellectual capital.		of R$2.85 million
54 own units in
Additional information			• Leadership in Energy
14 Brazilian States
	in Knowledge			and Environmental Design
	that Transforms.			(LEED) certification in the
				new business office

COGNA Sustainability Report 2019						20
Digital Transformation					Training courses given

				2018	2019
In our diligent pursuit of becom-	Thus,	since 2018, we have	been	(number of certificates)
Digital Mindset	3,957	7,278
ing an innovative, global digital	adopting the	agile methodology
The Skills of the Future	2,002	6,380
education company, we have in-	SAFe (Scaled Agile Framework) in
Introduction to Agile	1,716	6,593
vested heavily in our digital trans-	100% of our IT area, which reduces

formation over the last few years.	time-to-market, increases customer	Big Data and Internet of Things	1,479	6,008
This transformation has touched	satisfaction, and improves the per-	Agile Concepts: SCRUM	1,501	5,533
every aspect of our business-	ception of return on investment.	Design Thinker	926	5,454
from employee training to the de-
					Innovation for Results	-	6,329
velopment of tools and platforms	In 2019, over 600 employees,
Digital Transformation	-	6,172
dedicated to enhancing our stu-	split into 70 agile teams and 10
dents' experience (information in	trains, applied the SAFe. Through	Networking Culture in Business	806	5,360
Knowledge that Transforms).	the Corporate University, in 2018,	Learning to Learn	-	5,078
	we	initiated	training	on	this	Digital: New Ways of Work	-	4,943
The announcement of Cogna Ven-	methodology. All in all, 260 em-
Overall Total	12,390	65,125
tures was among the key highlights	ployees received on-site training
of 2019. As our venture capital arm,	on agile models, over 300 lead-
Cogna Ventures was designed to	ers received training on the new
explore new fronts of growth and	digital mindset expected by the	Another highlight was the leadership qualification in the skills necessary
innovation. Investment in open in-	Company, and over 12,000 em-	to become a digital leader.
novation and IT companies will ac-	ployees took DL courses, totaling
celerate the Company's transition	more than 125,000 certificates in	We also reinforced our base of partner startups. In this regard, one of the
into a digital education company.	digital training.			highlights is the Innovation Day, through this event we seek to relate with
						startups which may contribute to our business. Such dynamics occurs by
We also understand that digital	We also intensified our employee	means of business challenges, conveyed by our Innovation team to the
transformation is much more than	training actions regarding vari-	startups. The best solutions are raised to solve these challenges perme-
investing in technological tools. It	ous innovation-related issues (see	ating several areas of the company.
is a cultural model, a change in the	table below). In 2019, we issued
way we work and how we relate	65,125 certificates, 425.6% higher
with others and the environment.	than	the total	recorded	in	2018.	Culture of innovation

Leaders trained

Unit directors	145 (96% of IES directors)
Corporate managers	125 (42% of total)
Corporate officers	11 (15% of corporate officers)

In 2019, we announced the integration of our innovation efforts under the People, Culture, and Corporate Operations VP. This strategy was designed to promote a cultural and mindset change relating to our digital transformation. As a result, our IT

and Business areas will work together within the same structure to ensure the agile method is adopted across the entire company, thereby enabling us to achieve our objectives more quickly.

COGNA Sustainability Report 2019								21
Sustainability	GRI 102-12
In addition, we are signatories of	As a result, we included a few im-
			the Global Compact, an initiative	provements in	this Sustainability
Our sustainability strategy is guided by the Sustainable Development	of the UN which encourages com-	Report. Among them, we seek to
Goals (SDG), defined by the United Nations (UN) which aims at guiding	panies to observe corporate social	expand the scope of several indi-
national policies and engaging companies and organizations around the	responsibility	and	sustainability	cators, such as:
globe to achieve goals, such as the eradication of poverty, actions to	policies by adopting the 10 princi-
fight climate change, and preservation of natural resources.	ples relating to human rights, labor,	• Gender diversity: in 2019, we
			environment, and anti-corruption.	reported gender diversity in all
To maximize the efficacy of our actions, we focus on three SDGs: Good	Transparency	instances of our leadership (in-
Health and Well-Being (SDG 3); Quality Education (SDG 4); and Re-	dicator 405-1, in Exhibits).
duced Inequalities (SDG 10). See in sub-chapterCompany, our initia-	and evolution	• Corporate	Governance:

tives in line with SDG.			of ESG indicators	we
			seek to bring greater empha-
			GRI 102-43;102-46	sis to this topic, both in content
							structure and the magnitude of
			In line with our commitment to	GRI indicators (see in Corporate
			transparency	and	value creation	Governanceand in the GRI Con-
			for our stakeholders, in 2019, we	tent Index).
			conducted a perception study of
			ESG aspects.				• Information on business: we
							enhanced available information
			An external advisory firm con-	directly related to our business
			ducted this study, which involved	continuity-among	them,	how
			interviews with 10 institutional do-	we ensure	quality	education
			mestic and international investors	and our performance indica-
			who shared their views on Cogna,	tors, both in postsecondary ed-
			the sector, and the best practices	ucation and in primary and sec-
			concerned with transparency and	ondary Education, such as each
			management of ESG indicators.	company's NPS (see in Knowl-
							edge that Transforms);
							• Employability: we report new
							indicators on this topic, such
							as the percentage of students
							working in their areas after con-
							cluding postsecondary educa-
		Student solidarity act in long-stay institution	tion (see in Employability).
			the elderly - Pitágoras Betim - Betim/MG

COGNA Sustainability Report 2019

4.Business Performance

Macroeconomic and Sector Scenario

EFFICIENT MANAGEMENT

AND RESULTS

Even amid mild economic growth, we remain focused on the efficiency of our businesses and, accordingly, our economic and financial performance.

The year 2019 was marked by a mild improvement in Brazil's macroeconomic scenario. The Gross Domestic Product (GDP) advanced 1.0% in the first nine months of 2019, highlighting the agribusiness (+1.4%) and services (+1.1%) sectors. Concerning de- mand, the Fixed Gross Capital Formation (FGCF) and Household Consumption Expenditure were the highlights, increasing by 3.1% and 1.8%, respectively.

The Extended Consumer Price Index (IPCA), considered Brazil's official inflation, ended 2019 at 4.31%, above

the target for the year of 4.25% and the 3.75% recorded in 2018.

At the year-end, the benchmark interest rate (Selic) stood at 4.5%, lower than the 6.50% p.a. recorded in 2018.

According to the National Registry of Employed and Unemployed Workers (CAGED), the balance of formal job positions advanced 2.47% (+948,300) in the 11 first months of the year. The services sector gave its highest positive contribution, by creating 495,577 formal job positions.

COGNA Sustainability Report 2019

Current Scenario of the Education Sector

In the education sector, one of 2019's milestones was decree No. 9.765, which enacted the National Literacy Program (PNA in the Por-

In 2020, as part of PNA, the Ministry of Education (MEC) foresees the launch of the School Literacy Program, focused on teacher qualification, educational sup- port, and valuing education pro- fessionals. Another initiative is the "Conta pra Mim" program,

Within such context, for 2020, MEC announced procedures and criteria for qualification of postsecondary education Private Institutions (Ipes) interested in offering vocational programs in secondary education.

Economic and Financial Performance

GRI 103-2;103-3: Economic performance

tuguese acronym). One of PNA's principles is an emphasis on teaching six basic literacy components: phonemic awareness, systematic phonics instruction, fluency in oral reading, vocabulary development, reading comprehension, and written production.

Within such context, the PNA foresees the deployment of programs and actions to promote literacy based on the evidence of cognitive science and, thus, improved literacy throughout Brazil.

which encourages children to read at home.

In 2019, another announcement involved the launch of MEC's program "Novos Caminhos," which generates new opportunities and new courses designed around market demand and the professions of the future. This program intends to potentialize professional and technological education with an 80% increase in enroll- ments, from 1.9 million to 3.4 mil- lion, by 2023.

Net Revenue

In 2019, net revenue totaled R$7,027.2 million, 15.9% higher than in 2018. This was mainly due to (i) the Somos merger in Octo- ber 2018; (ii) excellent results from K12 Platform (Vasta) relating to business activity for 2020; (iii) a good performance of Continuing Education, which observed the reformulation of this segment under the EdServ Platform concept; and (iv) solid student-recruiting and re-enrolment processes in the postsecondary education seg- ment. These effects were partially absorbed by a reduction in the base of postsecondary education students verified in 2019, especially at Own Units, due to a higher volume of dropouts registered in 2019, besides the impact of a higher number of graduations in the period due to the robust new enrollments in 2013 and 2014.

Net Income

In 2019, the adjusted net income (by amortization of intangible assets and inventory surplus) totaled R$772.0 million, resulting in an adjusted net margin of 11.0%, 34.4% and 4.8 p.p. lower than in 2018, mainly reflecting highest in- debtedness, the highest volume of depreciation and amortization deriving from the introduction of IFRS16 and investments in content production and technology, which have shorter depreciable useful lives, besides pressures verified in the postsecondary education.

EBITDA

EBITDA came to R$2,422.1 million in 2019, 3.5% higher than in 2018, and an EBITDA margin of 34.5%, a

3.0 p.p. increase, in line with new business models and evidencing a high level of efficiency in different verticals of the Company.

Motivo School - Recife/PE

COGNA Sustainability Report 2019					24
Investments			Value-Added

of courses implemented over the	2017	2018	2019
Statement (VAS) GRI 201-1

	last years. In 2019, the Company
	Revenue	5,025,459	5,404,199	6,340,576
Cogna's Capex totaled R$482.5	also recorded R$195.1 million in ex-

million in 2019, accounting for	pansion investments, 2.8% of net	Sales of goods, products and services	5,557,748	6,060,708	7,027,194
6.9% of net revenue for the period,	revenue and 1.6 p.p. lower than in	Other revenues	50,891	15,982	224,175
0.4 p.p. lower than in 2018. Most of	2018, which was already expect-	Provision for/reversal	(583,180)	(672,491)	(910,793)
Capex was earmarked to develop-	ed, since most investments in the
of doubtful accounts
ment projects of content, systems,	organic growth project in post-
Inputs Acquired from Third Parties	(768,009)	(1,236,759)	(1,128,149)
and software licenses, in line with	secondary education had already
Costs, products, goods, and services sold	(14,843)	(183,934)	(515,201)
the portfolio expansion and mat-	been made.
uration of postsecondary educa-	Net Indebtedness	Materials, energy,	(743,893)	(1,052,825)	(612,948)
tion units we have been conduct-	outsourced services, and other

ing over the past years, especially			Others	(9,273)	0	0
the maturation of Engineering and	At the end of 2019, total between	Gross Added-Value	4,257,450	4,167,440	5,212,427
Health courses and new Premium	cash and financial investments
Withholdings	(416,714)	(476,778)	(1,161,710)
Distance Learning courses, be-	amounted to R$843.1 million,
Net Value-Added Produced	3,840,736	3,690,662	4,050,717
sides entire content renovation in	67.5% lower than in 2018, a result
primary and secondary education.	of disbursements	made during	Value-Added Received in Transfer	321,026	428,897	346,360
In this regard, it is worth noting	2019 referring to	the operation's	Equity Income	0	(2,027)	(157)
that, after the merger of Somos,	cash consumption, payment of
Financial Income	321,026	430,924	346,517
Cogna made editorial investments	debentures interest rates, invest-
Total Value-Added to Distribute	4,161,762	4,119,559	4,397,077
to produce school materials, al-	ments in expansion, and payment
ready included in the Capex fig-	of dividends. After the proceeds	Personnel	1,697,409	1,920,430	2,303,631
ure. Another relevant expenditure	raised with the Somos acquisi-	Direct Compensation	1,189,793	1,366,892	1,598,379
was directed towards the expan-	tion and the incorporation of its
Benefits	98,073	104,753	149,402
sion and improvement of current	debts into Saber's balance sheet
F.G.T.S.	409,543	448,785	555,850
units in preparation for the 2020	(Cogna's wholly-owned subsid-

academic year in order to meet	iary), total net indebtedness in	Taxes, Duties and Contributions	79,288	30,157	(14,975)
student expectations, besides fit-	2019 came to R$7.2 billion, 42.3%	Federal	46,917	(13,091)	(26,538)
ting them to portfolio maturation	higher than in the previous year.	State	480	11,534	685

			Municipal	31,891	31,714	10,878
			Debt Capital	502,749	776,116	1,865,833
			Interest rates	94,938	296,433	1,179,670
			Rentals	400,600	455,226	572,669
			Other	7,211	24,457	113,494
			Equity Capital	1,882,316	1,392,856	242,588

COGNA Sustainability Report 2019

Capital Market

Cogna's shares (COGN3) adhere to several indexes, including Ibovespa, Special Corporate Governance Index (IGC), Special Tag Along Stock Index (ITAG), Consumption Index (ICON), and MSCI Brazil.

In 2019, the Company's shares were traded at 100% of trading sessions, totaling a traded volume of R$36.7 billion in 6.4 million trades, resulting in an average daily trading volume of R$147.8 million. Currently, Cogna's shares are monitored by

11 different domestic and interna- tional research companies.

On December 31, 2019, Cogna's market cap totaled R$18.8 billion. In 2019, Cogna's shares appreciated 28.9%, while Ibovespa surged 31.6%. In the same period, IGC, ITAG, and ICON appreciated 38.5%, 35.9%, and 55.2%, respectively.

Additional information on our economic and financial perfor-

mance and the performance of our companies are available in the Financial Statements.

Operational

Performance

Below are the key operational performance highlights of Cogna's segments. Additional information is available in the Financial Statements.

Postsecondary education

At the end of 2019, we recorded 822,000 students in postsecond- ary education (undergraduate and graduate), including on-campus and distance learning (DL) seg- ments, which account for a 4.0% decrease compared to the same period last year. This base variation reflects a higher number of graduations in the period due to the robust new enrollments in 2013 and 2014, besides a change in base profile, with a reduction in

the number of FIES students (who, traditionally, record lower drop- outs) and an increase in the number of students 100% enrolled in online DL (who are dropout-prone students). Therefore, we verified higher dropout pressure registered in the period, especially in the on-campus segment. On the other hand, Kroton (vertical of Cogna's postsecondary educa- tion) has been highly investing in upgrading the portfolio of courses offered and its employability channel as a way of mitigating these effects and ensuring solid

results from the student-recruiting process, as attested in the last processes carried out during 2019, which recorded higher volume in the on-campus and DL segments, with more robust revenue from the student-recruiting process.

Analyzing the breakdown between these formats, the on-campus postsecondary education accounted for 40.1% of total post- secondary education students, while the DL segment concentrated the remaining 59.9% of the same base of students.

Cogna

COGNA Sustainability Report 2019

On-Campus Undergraduate - Kroton

The highlight in this latest cycle was the evolution of the out-of- pocket students (ex-FIES and ex-PEP), which grew for the third straight year and added approximately 150,000 new students in the period (+22.2% vs. 2018), which reinforces the success of our sales strategy and the alignment of the sales team's compensation, which prioritized this student profile.

All in all, in 2019.2, over 64,000 new students were admitted at On-Campus Undergraduate pro- grams, including out-of-pocket,

FIES, and PEP students, up 0.6% from the same period in 2018, but with a 19% increase in revenue from new on-campus enrollments.

DL Undergraduate - Kroton

In the Distance Learning segment, we continue evidencing our resilience and competitive advantage to again deliver a positive result, especially when considering the competitive scenario since the introduction of the new regulatory framework for this segment in 2017. In 2019, over 116,000 new out-of-pocket students were added to this segment, 1% higher than in 2018, even considering

reduced new enrollments from ProUni students. Thus, we ended 2019, with 459,000 DL students, practically in line with 2018.

Continuing Education

Graduate Programs - Platos

Only considering the graduate courses, we saw a 1% increase in the number of students compared to 2018 due to new stu- dents, mainly deriving from the DL segment. Such growth is a result of a restructuring executed in graduate programs over the last years, which enabled, through a new platform, a more solid offer and focused on our own units and partners. Thus, we ended 2019 with 41,200 students enrolled in the graduate courses-33,100 students in the DL segment and 8,100 in the on-campus segment.

Preparatory Courses (LFG), Unregulated Program, Language Courses, and SETS

In 2019, in the preparatory courses for the examination of the Brazilian Bar Association (OAB) and examinations for civil servant positions, we recorded an average base of 26,919 students, a performance in line with 2018. In the short-duration unregulated program that allows students to further their knowledge in various fields, we added 121,300 enrollments, 58.1% higher than in 2018.

The business segment of Educational Solutions for Vocational and Postsecondary education (SETS), including the acquisition of Somos inside Platos, is liable for the sale of books under the Saraiva brand to postsecondary education, learning systems for vocational programs under the brand Érica, and preparatory courses for civil servant exams. In 2019, more than

2.3 million books were sold, 6.4% higher than in 2018.

Anhanguera Sorocaba - Sorocaba/SP

COGNA Sustainability Report 2019

Primary and	and we have been working on the
Secondary Education	business strategy for the next year

	to strengthen the group's brands
K12 Platform - Vasta/Somos	and offer more robust comple-
mentary solutions, besides several
	investments in technology to en-
We announced in 2019 a growth	sure a better experience for stu-
of 25% in the amounts already	dents and their parents. As a re-
contracted in the ACV (Annual	sult, we expect optimized results
Contract Value) for 2020 in the	of own schools for 2020.
K12 Integrated Services Platform.	PNLD/Official Contracts
This increase reflects the new
positioning of Somos, which no
longer is a provider of isolated	In 2019, we announced the sales
products/services, but rather a	result of the National Textbook
Service Platform for K-12 schools,	Program (PNLD) for 2020. Total
positioning this business vertical	sales volume of the publishers
to a new level of growth.	Ática, Scipione, and Saraiva Edu-
	cação in the PNLD 2020 was 52.0
This approach allows a single po-	million books, of which 20.8 mil-
sitioning in the market, capable	lion refer to the adoption of new
of serving all Brazilian schools,	books for Elementary School II
comprising an addressable mar-	and 31.2 million to replacement
ket of 6.2 million students, 63%	of previous years (for Elementary
higher than the 3.8 million stu-	School I and High School).
dents enrolled at the Educational
System schools.	The revenue generated by these
School Management - Saber	sales will amount R$408.0 mil-
lion, with R$175.6 million referring
	to the adoption of new books for
Concerning Own Schools, we ad-	Elementary School II and R$232.4
vanced all units integration, aim-	million referring to replacements
ing at bringing gains of efficiency,	of previous years.

Maxi School - Cuiabá/MT

COGNA Sustainability Report 2019

5.Knowledge that transforms

We are present in all phases of education, with efficient and customized solutions for primary and secondary education, undergraduate, graduate and preparatory courses, unregulated program, and languages, directly impacting over 1.2 million people.

Our various initiatives aim at achieving our main objective: to promote a quality education that is supported by digital transformation, thereby preparing our students for the future (read more in Digital Transformation).

WE OPERATE THROUGHOUT

THE ENTIRE CHAIN OF

EDUCATION SECTOR

The following pages present our strategy, initiatives, and commitments adopted with our students and other stakeholders that foment the knowledge that transforms.

COGNA Sustainability Report 2019		29
Primary and Secondary Education
Our approach is to combine aca-	Our schools are connected with
Quality Education	demic quality and brand reputa-	each other and with the world by
tion with strong commercial exe-	means of the best global educa-
SABER GRI 102-2;102-4;102-6;102-7			cution and operational excellence	tion practices.

		based on our execution capacity.	Access the

			With Saber, we own 18 brands
			that are benchmarks of quality,	QR Code and
			check the video
Operating in the Primary and Secondary Education segment, with 54 units,	including schools, such as Leon-

in 14 Brazilian states and in the Federal District, Saber offers high-quality	ardo Da Vinci, Colégio pH, and
education to over 36,000 students, potentializing the group's capacity	Colégio Sigma, besides language
to prepare future generations for the demands of future society.	schools, such as Red Balloon.
			Our Brands

2019 Highlights

GRI 102-7

54 units

of own schools

36,000 students

ECSA - Chave do Saber School - Cuiabá/MT

COGNA Sustainability Report 2019

For our students

Within this context, it is worth men-

Additional information about our

tioning the Red Balloon, which be-

solutions can be found in this

One of our initiatives to attract and retain students is our investment in

sides teaching the English language,

chapter, in New tools.

our technological platform, which includes improvements in online en-

offers art, cooking, theater, and mu-

rollments, integration, and upgrades in CRM, and analytics to define ac-

sic activities. Its methodology and

tions as well as provide real-time information.

materials are exclusive

and

were

Access the

created in accordance

with

each

QR Code and

check the video

We are also developing several actions to support our students' learn-

developmental stage of children

ing (see chart below), and we reinforced our offer of complementary

and adolescents between 3 and 17

solutions. Besides traditional activities (English/high school, sports, arts,

years of age. Besides the units dis-

dance, martial arts, academic, and preparatory activities), we offer our

tributed throughout the country, we

students innovative products, such as robotics, programs related to so-

provide this service at our schools.

cial and emotional competencies, programming, financial education, en-

trepreneurship, and meditation/mindfulness.

Quality Education

Olympics/

Teachers

International

continuing

Admission

education

• Several gold, silver,

program

and bronze medals

• + 400 meetings

across Brazil's main

Quality

• + 2,300 hours

Olympics

of training

• + 50 admissions

Education

• + 2,000

at international

professionals qualified

universities in 2019

Ethical Interaction

Program

- Cognitive, emotional, and moral development of students
Projects relating to social and economic skills, such as assessment of conflict,

leadership, and anti-bullying

Enem

- Brands consistently included in the top 3 ENEM
Adhesion to PISA for school for results comparison
- Performance monitoring from primary school

Motivo School - Recife/PE

COGNA Sustainability Report 2019	31

New tools	SOMOS GRI 102-2;102-6;102-7

For us, supporting students' cognitive abilities is another essential issue. Through the Lab Makers, we can look at various subjects in a transversal

manner and improve our students' ability to acquire and maintain knowledge, i.e., to enhance their cognitive learning.

We also have internationalization. We created interchange models which prepare students for studying abroad. The models help familiarize them with other cultures by exposing them to diversity. We already have partnerships with the Measurement University (MISU) in the United States and the Catholic University of Chile, among others in Canada, New Zealand, and Europe.

In 2020, we will develop a student diary app that incorporates these activities/ complementary tools. We will build upon our relationship with students and parents using a digital transformation model.

Textbooks

Somos is an integrated services platform that seeks to become the one-stop provider for private Primary and Secondary Educa- tion, grounding its digital transformation process in its educational and administrative activities, besides producing school materials for students. Somos Educação is a combination of the most traditional educational brands present in Brazil since 1913.

Our K12 Platform delivers to our schools the most cutting-edge and innovative educational tech- nologies. It was developed with the platform-as-a-service con-

cept, characterized by a model of long-term subscription which creates revenue recurrence and foreseeability, based on technol- ogy, scalability, and high growth. Successful implementation of the platform at the primary and secondary schools can be verified by the 25% growth announced in Somos' Annual Contract Value (ACV) of 2020.

Access the QR Code and check the video

Within the scope of the National Textbook Program (PNLD), Cogna offers textbooks to over 86,000 public schools throughout the country. We also became a relevant community for teachers who use our products and services, reaching more than 22 million students and 2 million primary and secondary education professionals in Brazil.

Now, we are ready for a major transformation of PNLD as from 2021, when the adhesion to the Common Curricular National Base (BNCC) shall become mandatory. Our challenge is not only to produce this material but also give support to public school teachers to help them follow up with this transformation.

What does Annual Contract Value (ACV) mean?

The ACV consists of an operational metrics broadly applied in the sector, which estimates the total revenue contracted from partner schools to be

recognized, especially between October 1 of a fiscal year and September 30 of the following fiscal year. In this regard, the ACV is defined as revenue from subscription of traditional educational systems, educational systems

based on textbooks (PAR) and complementary educational products (such as social and emotional and English) to be recognized by the school, assuming a fixed number of students who will access our platform.

COGNA Sustainability Report 2019

Our mission is to revolutionize the ecosystem of private primary and secondary education, offering educational	Our mission is
content and IT services, allowing companies to deliver high-quality education to its students, besides digital	to revolutionize
services to sustain growth and efficiency, supporting digital transformation at schools.
			the ecosystem of
K12 Platform			private primary and
		secondary education,

We created the most complete and integrated platform of products and services based on three channels:	offering educational
1. Core Content Solutions: we provide content for private schools of primary and secondary education in Brazil	content and IT
through a multi-brandedtechnology-enabled platform with the flexibility and quality necessary to meet customer	services, allowing
needs through various educational approaches. Our solutions portfolio includes traditional learning systems (whose
that was designed as a textbook-based learning system. We also have digital learning solutions and continuous teacher	schools to deliver
key brands include Anglo, pH, Maxi, Pitágoras, Ético, and Rede Cristã de Educação) and PAR, our proprietary product	high-quality educa-
training.

2. Complementary Content Solutions: we offer diversified solutions, which include the English Stars, an English	tion to its students.
learning system that develops fluency, and the Bilingual Experience, an English learning system that develops oral
proficiency and XXI century skills, such as critical thinking, responsibility, and oral and written expression skills, both
in Portuguese and English. It also comprises the "O Líder em Mim" (The Leader in Me), a program with a content
program, methodology, school materials, and training to develop leadership, values, and essential skills that promote
student success at school and in life.
3. Digital Services: to meet the additional needs of schools, we offer the "Livro Fácil," an e-commerce channel that
sells educational content to schools and serves as a distribution center for other suppliers' materials selected by our
partner schools. We plan to increase our portfolio of solutions offered whether developing additional solutions in-
house, through partnerships, or through M&A opportunities, including solutions such as the academic and financial
ERP (Enterprise Resource Planning), a business management system that automates processes and integrates the
company's data, digital marketing, scholarship marketplace, and online enrollment services.

Livro Fácil

4,000	1.4 million	432	160,000
schools served	students assisted	partner schools	students served

Access the QR Code and check the video

COGNA Sustainability Report 2019

Our brands

Continuous	Languages
teacher	Socio-
training
emotional

Digital

Learning

Core

Content

E-commerce

B2B

rs & pr

AL SER

STEAM

Academic

ERP

Solutions offered	Online		Financial
enrollment
by Vasta		ERP

Bundle of core		Scholarship	Digital
	Marketing/
education		Marketplace
	CRM

COGNA Sustainability Report 2019

For students

Our students benefit from an integrated platform through which they can access all content and available tools. We also offer several solutions to support and stimulate their development, among them:

Somos Science Learning: it aims at improving education through partnerships with great scientists, including neu- roscience, neuropedagogy, and biology experts, for instance, to bring evidence to our peda- gogical methodology.
English Stars: covering primary and secondary education, this program proposes bilingual

qualification.  In addition, this proposal can be implemented according to each school's unique structure.

Plurall: this is a platform of studies and online education for students, teachers, and co- ordinators. Accessible, practi- cal, and organized, this solution monitors students 24 hours/ day. It can be accessed via mo- bile phone, tablet, or desktop, and it makes available a list of exercises so that students may practice what they have learned in the classroom and in videos to support homework. It also has tutors ready to answer doubts that may arise during activities and about the con- tent of school material.

Livro Fácil: This solution seeks to combine convenience, com- fort, and efficiency in a sin- gle service, facilitating sales of school material and offering the complete range of school mate- rials in a single place.

For more information on these and other solutions, please visit: https:// www.somoseducacao.com.br/en/pagina-inicial/

For parents

Parents are the greatest influencers of their children's academic de- velopment. With Somos' solution, parents can be involved in and monitor their children's performance in real-time as well as have a direct communication channel with educators. Another front is time optimization-schools may use the channel to offer core educational content and complementary activities, such as language studies and social and emotional programs, in the same place.

For educators

Finding the most appropriate pedagogical approach for each student can be a challenge for educators.

For this reason, one of Somos' focuses is to understand how to direct learning, including how to help students overcome individual deficien- cies, and how to efficiently engage each student through cognitive de- velopment. In addition, educators receive students' performance data, allowing them to customize each student's educational program.

For supporters and private school managers

Somos understands that schools' needs go beyond educational resources and include also school management solutions, such as customer relationship management systems, marketplaces that sell educational content, student digital acquisition processes, and financial and educational management tools.

In this context, we have Livro Fácil, an e-commerce channel that sells educational content and we aim to expand our offers in this segment, helping to optimize private school managers' time by allowing them to smartly access a wide range of information and to devise new action plans and promote team leadership and motivation.

Motivo School - Recife/PE

COGNA Sustainability Report 2019

For society

As part of the social responsibility initiative, Somos seeks to share the best educational practices through its experience in the private segment with public schools and teachers, free of charge. Additional information in Society.

Access to education

Primary and Secondary Education

Through SOMOS Futuro, a key In- stituto Somos program, we grant full scholarships during three years of high school for public and private school students from low so- cio-economic backgrounds who show academic excellence. In partnership with Saber's own schools and Somos' partner schools, this program offers tuition, textbooks and related materials free of charge to outstanding students, and men- torships with Cogna's voluntary workers. Since 2017, this project has already benefited 388 promising students with an economic impact of R$14,162,303.75.

This program aims at transforming the lives of these promising students by enabling them to complete their studies and by offering additional academic opportunities. In 2019, in its third cycle, SOMOS Futuro approved 216 promising young students in 17 Brazilian states, 69 cities, and 88 schools; 816 hours of corporate volunteering were recorded in the program in 2019.

We also give support to college preparatory courses throughout the country. In 2019, we invested R$3,843,411.12 in partner preparatory courses and others supported by our own schools of primary and secondary education. Among the partners, we have Resgate Project (Joinville/SC), Cursinho Bakaru (Cuiabá/MT), Cursinho Protagoniz- es (São Paulo/SP), Cursinho FEA, and EACH USP (São Paulo/SP).

Access the QR Code and check the video

Below are other access initiatives offered by our K-12 brands:

Saber:

"Gota Social": since 2015, pH School and Prep Course has been help- ing socially and economically vulnerable people receive a postsec- ondary education, thanks to "Gota Social," a community college pre- paratory course, offered free of charge by teachers and volunteers, observing the same quality standard of pH. In its journey, Gota has already benefited over 300 people and continues recording great achievements with its students.

Gota Social - Prep Course -

COGNA Sustainability Report 2019	36

• "Fera": Fera is an initiative of Curso Anglo that offers free college	Performance Indicators
preparatory courses for young students from low social and eco-	Primary and Secondary Education
nomic backgrounds in the region of São Paulo. Since 2016, Fera has
transformed the lives of more than 530 people by helping them gain
admission to university.	In primary and secondary Education, we apply the scores of the Brazilian
	National High School Exam (Enem) and the Unified Selection System (Sisu)
Somos:	of the Ministry of Education (MEC) to assess the quality of our own schools.

Partnerships: We maintain partnerships with organizations that share

in our goals and values, such as providing college prep courses and	Quality Education
conducting social projects focused on social inclusion through educa-


Saber

tion. In 2019, our partners were Cursinho Bakaru (Cuiabá-MT), Cursin-

ho INY (Cuiabá-MT), Protagonizes (São Paulo-SP), Cursinho FEA-USP	• 17 out of 36 among TOP 5 schools in its municipality at ENEM*;

(São Paulo-SP), Cursinho Mafalda (São Paulo-SP), Cursinho EACH-	• Over 40%** approval by ENEM in the Unified Selection
USP (São Paulo-SP), and Projeto Resgate (Joinville-SC).	System (SISU);
	• 109 classifications in 1st, 2nd, or 3rd positions in courses approved
	at SISU, including the most popular courses, such as Engineering,
	Medicine and Law.
	*Ranking conducted in 36 schools of the group which offered high school in 2018 compared to
	all private schools in Brazil, according to a methodology of specialized advisory firm Meritt.
	**Method that evaluates students who had, at least, an approval via SISU relating to total
	students enrolled at SISU.
	Somos
	• 263 schools ranked TOP 1 at Enem.
	• 504 schools ranked TOP 3 at Enem.
	Check below our performance through Saber compared to the na-
	tional average:
	Enem
	Comparing private schools in Brazil and Saber's own schools, our aver-
	age in all indicators surveyed in 2018, the latest year of evaluation, came
	in above the national average, as shown below. It is worth noting the av-
	erage of 759,40 of own schools in writing, 17.49% above the average of
	private schools in Brazil.

Fera Social - Anglo Course - São Paulo/SP

COGNA Sustainability Report 2019

Comparison of Average Results by Objective Questions: Brazil Private Schools x Own Schools

Comparison of Average Results by Human Sciences: Brazil Private Schools x Own Schools

660	645.4	636.76								636.71	680		659.75					656.22
640		623.91	624.69	627	627.14		625.49		660	647.54			642.1	644.28	648.84
		622.87	623.23				633.38	634.57

620											640						623.49
																	615.53
											620		601.45				603.77
600	574.13	579.51								585.25		587.66			595.56	587.38
							570.04		600
580		563.26	563.42	560.32	563.69	561.98	565.85		576.87		576.97	575.03			573.64
				580
560
										560
540													534.17
										540
520
										520
500
2009	2010	2011	2012	2013	2014	2015	2016	2017	2018	500
	2009	2010	2011	2012	2013	2014	2015	2016	2017	2018


				Average Brazil	Average CPs								Average Brazil	Average CPs

Source: Microdata INEP/Meritt, 2019.							Source: Microdata INEP/Meritt, 2019.

Comparison of Average Results by Languages and Codes: Brazil Private Schools x Own Schools

640 629.72

620		612.15	615.17					605.02		609.23

					597.36	595.09
600				584.64	591.85		587.75


580	569.83	569.4	572					565.27		572.63
			556.36
560					541.83	553.74		551.07
			538.92


540
520
500	2009	2010	2011	2012	2013	2014	2015	2016	2017	2018

				Average Brazil	Average CPs

Source: Microdata INEP/Meritt, 2019.

Comparison of Average Results by Nature Sciences: Brazil Private Schools x Own Schools

651.39

620		599.47	594.96	595.8	598.4	606.59	596.78	602.62	607.5	597.18
600
579.8

580									560.82

560		547.79	531.92	533.1	531.92	543.66	535.9	542.16		546.62
540

520
500	2009	2010	2011	2012	2013	2014	2015	2016	2017	2018

				Average Brazil	Average CPs

Source: Microdata INEP/Meritt, 2019.

COGNA Sustainability Report 2019	38
Comparison of Results by Mathematics:
Sisu
Brazil Private Schools x Own Schools

750
700			697.84	684.94						684.2
	675.69		675.64				674.16
652.96			660.35		659.75
					650.75

650			614.95							606.2
		599.41	604.68					594.62
			592.51
600
570.03					559.16		568.57
					554.52

550
500	2009	2010	2011	2012	2013	2014	2015	2016	2017	2018

				Average Brazil	Average CPs

Source: Microdata INEP/Meritt, 2019.

Comparison of Average Results by Essay:

Brazil Private Schools x Own Schools

800										759.4
								736.53	737.63
750							726.61
				697.12	700.34
700		678	675.43
	670.23				647	645.18	646.37
650	642.49	640.25	619.01				635.29
			608.74
			602.77
	631.93			590.82
600


550
500	2009	2010	2011	2012	2013	2014	2015	2016	2017	2018

				Average Brazil	Average CPs

Source: Microdata INEP/Meritt, 2019.

The objective of Sisu is to select candidates qualified to fill the vacancies in public universities that use Enem's scores as a measure for admissions. Within this context, based on Sisu 2020 (2019 data), Saber school students were admitted in 346 courses across 86 postsecondary educational institutions.

Ranking of Saber's students at public universities

students in 1st place

	12 in Engineering
33	3 in Computer Science	38
1 in Medicine
students in 2nd place		students in 3rd place
9 in Engineering		17 in Engineering
1 in Medicine

COGNA Sustainability Report 2019

Other indicators	Postsecondary education
Quality Education
To improve the services rendered to parents and students, we
planned several initiatives to enhance satisfaction levels, such	KROTON GRI 102-2;102-6;102-7

as more frequent measurements, refinement and innovation of
research methods, and in-depth student surveys.

In addition, Saber is investing in creating quantitative and qualitative

indicators across all educational segments (from kindergarten	We are Brazil's leading private education company, with 2.4 million stu-
to secondary education) in line with the National Common Core	dents at the end of 2019, supported by a wide and differentiated distribu-
Curriculum (BNCC) metrics and other relevant academic performance	tion network and excellent management and efficiency levels. Our own
indicators. Among them, approval at the most competitive college	units total 176, distributed in 132 municipalities, besides 1,410 DL centers,
preparation courses, medals in national academic Olympics, and
accredited by MEC. Through Kroton, we seek to democratize access to
admission to foreign universities.
postsecondary education at an accessible cost.

It is worth noting that, from these indicators, we rely on substantial results,
such as 10 approvals at ITA (Aeronautics Institute of Technology) and IME
(Military Institute of Engineering) from students at our schools in the cities
of Rio de Janeiro (RJ), Natal (RN), and Recife (PE). These investments are
aimed towards continuing to improve the rendering of services and the	2019
academic excellence of our schools.
		Highlights	GRI 102-7
Satisfaction Survey	321,000		459,000

To consult our students on the quality of our courses, we use the NPS		on-campus		DL
	students		students
(Net Promoter Score) monthly to measure students' and parents' opin-

ions on all brands and modes. Through this tool, it is possible to analyze
176		1,410
whether students recommend the brand where they study and to iden-
tify the most positive points and those with the greatest opportunity for		own		DL
improvement. Scores may vary from -100 to 100. Check below the results		units		centers
obtained in 2019:

Saber
Overall NPS of 43.0, vs. 35.6 in 2018
Somos
NPS of 93 in Anglo and pH learning systems

Postsecondary education students

COGNA Sustainability Report 2019

Our brands

For our students

We offer our students a complete portfolio of courses and products, in line with labor market needs, built into a quality academic mod- el, as attested by the latest results of the Enade exam (National Exam of Students Performance), wherein Kroton recorded growth.

We have one of Brazil's largest employability portals, the "Canal Conecta," besides an infrastructure with renovated units, unified systems, and virtual environments providing a continually improving experience to our students, increasing their satisfaction with our institutions.

Academic journey

To improve the academic journey of our students and successfully prepare them to enter the labor market, in 2019, we set out five strategic, transversal pillars to be implemented in 2020, namely:

1. Attractiveness - we created, in 2019, an academic product area to consistently and system- atically identify labor market needs and trends. We revised our academic products to take into account these aspects, be- sides training, academic, and professional background. We also created tuition-free cours- es with eventual micro-certi- fications, mostly at distance

learning, enabling	students
to customize their	courses.

To promote digital immersion, we developed agile methods applied in four half-yearly modules in which students have access to culture and digital marketing.

2. Engagement - we implement- ed several initiatives to keep our students engaged and motivated throughout their courses, such as content that increases engage- ment and improvement in the on- line experience (Student Virtual Environment - AVA). Through in-

dicators verified in each unit, we can identify signs of student dis- engagement. Such monitoring is connected with a continued evaluation process that incorporates elements of recognition for the student's efforts and enables us to measure the student's score in his/her activities.

Employability - we are deliv- ering a larger selection of tools for our students to use during their daily professional activi- ties. In this regard, we rely on Career Paths with certifications during the academic journey and provide greater adhesion to the labor market, as well as employability competencies in core academic curricula. At "Canal Conecta," we created a job vacancy crowdsourcing model wherein any person can add a job vacancy in the plat- form, whether an educator, a former student, or a current student. (Additional informa- tion in Employability)
Quality - our database includes a variety of information on the Company, including student ac- ademic performance. Based on this large database, we created a set of elements and indicators,

besides continued evaluation data, allowing us to increase our management efficiency. Therefore, we integrated efficient content production with our teachers' qualifications. And in 2019, we carried out improvements in students' virtual environment, offering tutoring solutions, summer school, and more integrated content for an even better student experience. With these changes, we revised course matrixes, seeking a competitive advantage by focusing on the labor market.

5. Efficiency- In 2019, we set up a team of teachers with mas- ter's degrees and PhDs in sev- eral areas, and through tech- nology and changes in internal processes, we improved effi- ciency in the production of ac- ademic content and audiovisual resources, which are relevant tools in our educational model.

COGNA Sustainability Report 2019	41

Scientific production	Platos GRI 102-2;102-6;102-7

We have an Institutional Repository, a space for digital publication and consultation of educators' and students' intellectual production, such as undergraduate theses, specialized graduate papers, and dissertations of Postsecondary education Stricto Sensu Graduate Programs. In 2019, teachers developed 525 research projects involving 956 on-campus and DL undergraduate students through the Scientific Initiation Program (https://pgsskroton.com.br/iniciacao-cientifica.php).

Over the last years, over 4,300 national and international scientific articles were, 1,800 theses and dissertations, 490 books and chapters, and 31 patents were produced. These productions have significantly contributed to Science, Technology, and Innovation in the country. In addition, Kroton publishes eight scientific newsletters via Kroton Newsletter Portal with open access, free of charge. Kroton published more than 5,000 scientific articles written by researchers from different postsecondary education Institutions in the country. Access at: https://revista.pgsskroton.com/

Another contribution is the Scientific Activities Meeting (EAC), an annual event, open and free of charge for all educational and research institutions in the country. This meeting is fully online and enables students and educators to disseminate the results of their works and participate in lectures and mini courses. The attendance is certified and all works approved are published in conference proceedings. In 2019, the 22nd event was held and nearly 21,000 works were presented, which can be viewed at https://pgsskroton.com/eac/

Physiotherapy students of Anhanguera Sorocaba - Sorocaba/SP

Platos, Cogna's most recent company, was conceived with the goal of becoming a complete content and solutions platform for any postsec- ondary education institution in Brazil, whether offering undergraduate or graduate services.

We initiated our operations with Kroton as our client, in graduate cours- es, which will contribute to our growth in the future. We manage online programs of graduate courses for Kroton, and we provide services to 200 universities in the Online Program Management (OPM) format. With such experience, we are poised to enter into partnerships with other uni- versities, offering vast support in their operations with DL.

Impact on all the stages of student's academic cycle

OUR PLATFORM IMPACTS ALL THE PHASES OF THE ACADEMIC CYCLE OF A STUDENT, WHO IS QUALIFIED BOTH FOR UNDERGRADUATE AND GRADUATE EDUCATION

IT PLATFORMS

			SERVICES TO INSTITUTIONS
	STUDENT		AND STUDENTS

	EMPLOYABILITY
		A	CONTENT
		PRODUCTION
		E
ACCREDITATION/

	REGULATORY
	D		B	QUALITY
				CONTROL AND
				CERTIFICATION
	RETENTION/
	CRM
		C		EDUCATORS
			& MENTORSHIP

	STUDENT-
	RECRUITING		MARKET INTELLIGENCE
A	IT PLATFORMS	E-COMMERCE	C	STUDENT-RECRUITING

		D	ACCREDITATION
	CONTENT AND
B
	ACADEMIC SERVICES		E	EMPLOYABILITY

COGNA Sustainability Report 2019

It is worth mentioning that the digital transformation implemented by Cogna inspired the Discovery Project, created in 2017 when we identified the need to give more autonomy to graduate businesses. Currently, our B2B operation mainly assists our own B2C postsecondary education in- stitutions. It also maintains agreements with third party institutions through Saraiva Educação solu- tion, recording solid growth levels, from 20% in 2018 and 34% in 2019. From 2020, we plan to bolster our growth with an emphasis on external clients, which will contribute to even more accelerated revenue growth. (see the chart alongside).

After the acquisition of Somos, the business segment of Educational Solutions was consolidated into Vocational and postsecond- ary education (SETS), in charge of selling books with the Saraiva brand to the postsecondary edu- cation, learning systems for vocational programs under the brand Érica and preparatory courses for civil servant exams. Our sales included Scientific, Technical and Professional (CTP) books, especially in the fields of Law, Business Administration, Economics and Accounting, Technical and Non-Fiction.

Digital transformation at Platos

Discovery	Results	DL
Project	Trends

Teams	40% increase	Mode gaining
division and	in newly	representativeness
autonomy	enrolled	in Brazil
New	students	DL undergraduate

positioning	30% growth in	courses will
of Kroton	revenue and	represent the
Lato Sensu	Ebitda	largest percentage
New product-	Best users'	of admittances

dedicated	evaluation	Increase in
platform	(NPS)	students base
		(undergraduate
		and graduate)

B2B

Potential

market

New sources of revenue for IES clients

Addressable

market of

R$34 billion

Potential GMV of

R$330 billion

68 million students with High School
23 million students with Postsecondary education
- 2,000 non-DL accredited institutions

2019 Highlights GRI 102-7
41,200 students	+ 400
graduate students, 33,100	courses
of which are in DL and 8,100	(DL, intensive,
in the on-campus segment	and on-campus)
Development of skills and	Portfolio
competencies increasingly	diversification in
focused on market needs	areas of knowledge
R$ 34 billion	+ 2.3 million
addressable market	books sold

Operation as internal platform

For our students

We want to develop a closer relationship with our students. The best way to achieve this is to reinforce dialogue and make it more customized for students.

Besides postsecondary educa- tion, we also offer short-duration unregulated courses, which allow our students to improve their knowledge in different disciplines, such as Management, Education, Mathematics, and Languages. Our efforts also include initiatives,

such as an increased number of courses. Today, we have over 300 course options and offer greater flexibility by allowing each student to complete his or her workload on campus or via DL on a schedule that suits the student.

In this regard, only in 2019, we launched 20 courses, 20 graduate programs, and one mode in DL, which we refer go as post-in-tensive-which involves the same workload-but may be completed within six months. We have four programs in this format, with 100

COGNA Sustainability Report 2019

options of specialization courses in the fields of Education, Business, and Health. In 2020, we will launch Engineering and Legal courses.

To improve our Law students' experience, it is worth noting the Saraiva JUR, which offers books from renowned authors and teachers, with themes, such

as, jurisprudence, legislation, and examination for civil servant position to Law students and professionals looking for the best technical support to perform their work with grounds and upgrade. It also offers a complete line of solutions for applicants in the examination for civil servant positions in several areas.

Access to education

Postsecondary education

Besides quality education, our mission is to offer access to postsecond- ary education. We rely on units distributed widely across Brazil's regions with DL and Premium DL, which allow access to education in municipalities far away from large urban centers. GRI 102-4

National footprint GRI 203-1

27.52%

of municipalities in which we operate have Human Development Index (HDI) below the Brazilian average

2019

Highlights GRI 102-7

121,300

students enrolled in unregulated courses

58.1%

higher than in 2018

41.67%

of municipalities have low or medium HDI

75.28%

of municipalities in

which we operate are small, with less than 100,000 inhabitants

In 74

municipalities, we are the only postsecondary education Institution (IES)

In 71

municipalities, we are

the sole IES offering a Nursing course

courses launched

Support to admittance at the Postsecondary education

To democratize student access to postsecondary education, we have Stoodi, an edtech composed of young, innovative, and collaborative en- vironment, split into two business units:

Postsecondary education students

COGNA Sustainability Report 2019

Qualification: Our Enem Busi- ness Unit develops the product Stoodi-Enem, an online college preparatory course with live and recorded classes, exercis- es, and pre-admission tests as well as a customized study timetable for students prepar- ing to take Enem and pre-col- lege exams. Classes are orga- nized by subject and studies are structured around the stu- dent's time availability.
Guidance: The Escolhas Busi- ness Unit comprises the Orien- tu, a vocational test app that helps students choose a col- lege major, profession, and uni- versity. The platform compris- es a series of career quizzes and tests to verify the area of expertise that best suits each user's profile.

The online study platform has more than 100,000 exercises and 50,000 videos/day for students throughout the country as well as a catalog with over 5,000 video classes, 30,000 exercises, pre-admission tests, among other educational solutions. In 2019 alone, over 2 million students enrolled in the Stoodi

platform, 70% higher than in 2018. The number of exercises done by students also grew by 10%.

We also have a dedicated area especially to serve the target public of Special Education, the Inclusive Special Education Center (NUEEI). In 2019, 565 people with disabilities were looking for the learning resources offered to improve their experience and learning process. Out of these, 267 are on-campus students and 298 are DL students. All of them received the specialized educational services plan, with educational guidance and counseling and 138 of them had access to broadened source tests and materi- als. GRI 413-1

Teachers Training

Our Teachers Training Program is another way we contribute. Through this program, we offer job vacancies and subsidies to our undergraduate teachers so that they may earn master's degrees and PhDs in our Education Institu- tions. The objective is to upgrade their qualifications to enhance the quality of the education they provide to our students.

Finance Vehicles

We understand that the difficult access to education also involves financial issues, preventing a large amount of the population to have access to postsecondary education.

In this regard, the Ministry of Education has two vehicles to facilitate access to private postsecondary education. Created in 2004, the University for All Program (ProUni) grants scholarships in postsecond- ary education private institutions to Brazilian students. In 2019, we recorded 67,176 scholar students, 0.7% lower than in 2018.

The Student Financing Fund (FIES) offers lines of credit for private postsecondary education students. However, with changes in the rules of access in 2015, which reduced the number of new students fi- nanced, thus, decreasing the number of students using this program, we could see a migration from FIES students to students paying out of pocket over the last years.

At year-end, we recorded 48,450 students enrolled with FIES con- tracts, down 45.0% from 2018, and an increase in the level of graduations for this profile. In 2019, FIES accounted for only 1% of on-campus segment new entrants.

Maxi School - Cuiabá/MT

COGNA Sustainability Report 2019

Our student profile

*	The presence of



INFORMATION	15% of our students	44% of our students support
women is 6% higher in

	support their family, versus	their family's income, versus
	undergraduate courses
	9% in other institutions.	29% in other institutions.
	than at other institutions.


OVERALL	Over 9.3% of our	In a dark-skinned population,	90% of our students are
students are over 45	70% of our students	the first generation of

	years of age, 34% more	receive up to three minimum	family to have access to
	students than at other	wages, versus 55% from	education versus 78% from
	institutions.	other institutions.	other institutions.

Our graduated student should earn 71% more than a high school student, significantly increasing household financial condition.

North Region: approximately 65% of students with income up to three minimum wages, versus 50% in other institutions and 77% are dark-skinned and light-skinned dark people, 27% more than in other institutions.

Northeast: 3.51% of our students are over 50 years of age and dark- skinned or dark light-skinned, 11% higher than at other institutions.

South Region: we concentrate 45% of dark-skinned and light-skinned dark people, nearly 26% more than in other institutions.

Southeast Region: women comprise 80% of our IT courses, 70% more than in other institutions.

Mid-West Region: 70% of women students are dark-skinnedand dark light-skinned,14% more than in other institutions.

*Source: ENADE Micro data 2018

Profile of Once a Week DL student	Profile of 100% Online DL student	Profile of On-Campus	Student
• 93% of Semi On-Campus DL students studied in	• 89% of 100% Online DL students studied in public	• 85% of On-Campus students	studied in public
public high schools;	high schools;	high schools;
• Only 23% of students do not work and 71% of them	• Only 19% of students do not work and 79% of them	• Only 33% of students do not work and 55% of them
bear the costs of monthly tuitions; and	bear the costs of monthly tuitions; and	bear the costs of monthly tuitions; and
• The personal income of 64% of students is up to two	• Personal income of 56% of students is up to two min-	• The personal income of 55% of students is up to two
minimum wages and the household income of 84%	imum wages and household income of 75% of them	minimum wages and household income of 60% of
of them is up to four minimum wages.	is up to four minimum wages.	them is up to four minimum wages.

COGNA Sustainability Report 2019

Private Special Installment Plan

GRI 413-1

In response to the drops in government financing, we devised the Private Special Installment Plan (PEP). With this solution, we offer previously approved installment plan to our students, without interest rates, with payment after the conclusion of the undergraduate course. We have two modes: PEP 30, the student starts paying 30% of monthly tuition; and PEP 50, the student pays 50% of monthly tuition. In 2019, 21,463 students used this tool.

We ended 2019 with a total of 48,700 students enrolled in PEP programs, of which 21,300 refer to PEP30 and 27,400 refer to PEP50. In 2019, 9,200 PEP students were admitted between the two modes available (PEP30 and PEP50), accounting for nearly 14% On-Campus new enrollments.

It is worth noting that we maintain our viewpoint concerning eventual losses with delinquent students of 50% over the installment amount of all PEP students, as seen over the last years.

Late Enrollment Installment Plan (PMT)

We also have the Late Enrollment Installment Plan (PMT), which offers to students accepted at the university when classes start the option of paying monthly tuition by installments for the period in which they have not yet enrolled.

Performance

Indicators

Our performance monitoring enables us to actualize our mission of providing quality education to our students. In this regard, we have several own and governmental indicators that are applied to evaluate our courses, institutions, infrastructure, management, ser- vices, and our postsecondary education model. See below:

Ministry of Education (MEC) Indicators

MEC conducts several evaluations, combined in the National System of Postsecondary education Evaluation (Sinaes), to analyze institutions, courses, and student performance. The evaluations an-

alyze indicators such as teaching, research, extension, social respon- sibility, institution management, and teaching staff. Knowing the importance of these indicators, we monitor MEC's evaluation processes to ensure we meet regulatory requirements and uphold the quality of our indicators.

Brazilian National Student Performance Exam (Enade)

Applied by the Instituto Nacional de Estudos e Pesquisas Educacionais Anísio Teixeira (Inep) since 2004, Enade comprises the National System of Postsecondary Education Evaluation (Sinaes), and includes the evaluation of undergraduate courses and institutions to provide information on the quality of Bra- zilian courses and postsecondary

education institutions. In 2018, the date of the last result announced, 46% of our courses scored 3 or more on a scale from 1 to 5.

Enade by cycle (% of courses with satisfactory level)

Social Sciences,

Applied and Human Sciences*

201868%

201546%

*According to MEC Normative Ordinance No.840/2018, the evaluation areas were reorganized in triennium evaluation cycles, which are now referred to as Year I, Year II, and Year III. In 2018, the courses evaluated referred to Year III. Before the reorganiza- tion, the Social Service course pertained to the Health cycle (green).

Anhanguera Taubaté - Taubaté/SP

COGNA Sustainability Report 2019

Exact Sciences, Engineering

and BSc

2017	44%

2014	29%

Health and Agricultural Sciences

201672%

201349%

Difference Indicator between Observed and Expected Performances (IDD)

We consider the IDD to be the best indicator of the degree to which our performance created value for our students because it shows the difference between the scores of the Brazilian National High School Exam (Enem) and Enade exam. In 2018, the date of

Kroton IDD - 2018 vs. 2017

(% of courses with satisfactory level)

201878.40%

201781.20%

IDD by cycle (% of courses with satisfactory level)

Social Sciences,

Applied and Human Sciences*

201878%

201581%

Exact Science,

Engineering and BSc

201770%

201473%

Courses General Index (IGC)

The IGC assigns a score to the educational institution as a whole based on the quality of its undergraduate and graduate courses. In 2018, the last result announced, 89% of the group's institutions earned a satisfactory score.

Kroton IGC - (% of courses with satisfactory level)

201396.80%

201498.00%

201595.10%

201696.00%

201796.00%

201889.40%

structure on a scale from 1 to 5. In 2019, 99.2% of Kroton's courses were rated satisfactory, earning scores from 3 to 5. The Institutional Concept evaluates educational institutions according to their institutional planning, development, academic and managerial policies. In 2019, all of Kroton's institutions were deemed satisfactory.

Course Concept (CC) -

Satisfactory Concepts - 3, 4, and 5

201999.20%

201899.20%

201799.20%

Institutional Concept (IC) -

Satisfactory Concepts - 3, 4, and 5

2019	100%



2018	100%

the last result announced by MEC, 78% of our courses recorded satisfactory performance.

Health and Agricultural Sciences

201684%

2013 58%

Course Concept (CC) and Institutional Concept (IC)

The Course Concept evaluates a course based upon its educational plan, teaching Staff, and infra-

201798.30%

COGNA

Sustainability Report 2019

Avaliar GRI 102-43;102-44;413-1

Course Preliminary Concept (CPC)

CPC by cycle (% of courses at

Through research,

satisfactory level)

which is voluntary,

Calculated based on Enade, IDD,

Social Sciences,

Besides own indicators, one of Sin-

and inputs such as teaching staff,

aes' requirements by MEC includes

we seek to engage

Applied and Human Sciences*

infrastructure, and student percep-

self-evaluation. In this regard, we

70% of our student

tion, the Course Preliminary Con-

2018

81.50%

rely on an institutional evaluation

cept is the key indicator applied

based on an indicator system re-

base and ensure

by MEC to monitor undergradu-

ferred to as "Avaliar," which goes

2015

ate courses. In 2018, when the last

87.30%

beyond MEC's legal requirements.

the participation of

result was published, 82% of our

Through this system, it is possible

100% of course coor-

courses earned Satisfactory CPC.

Exact Science,

Kroton CPC* - 2018 X 2015 (% of

to ascertain the perception of our

dinators and at least

courses with satisfactory level)

Engineering and BSc

students, educators, course co-

90% of other groups

ordinators, and technical and ad-

2018

81.50%

2017

77.70%

ministrative employees about our

of respondents.

performance in several areas. We

then use this information to im-

87.30%

91.50%

2015

2014

prove our courses.

Health and Agricultural Sciences

201691.00%

201384.70%

Thus, every year we present the academic community with an online questionnaire. We then use a solid methodology to analyze the data from multiple angles, employing substantiated measurement tools and expert evaluations.

Through this survey, which is vol- untary, we seek to engage 70% of our student base and ensure the participation of 100% of course coordinators and at least 90% of other groups of respondents. In 2019, questionnaires were answered by 81% of on-campus stu- dents, with all IES reaching at least 70% participation. With regards to centers, 694 reached the minimum percentage of participation.

COGNA

Sustainability Report 2019

Avaliar Indicators

Kroton Average

Another Avaliar indicator is the Stu-

and local reality, as well as value

at Avaliar in 2019

dents' Future Transformation, which

people, their differences and reach

Avaliar indicators are calculated

IQI

measures student and employee

their professional objectives.

on a scale from 0 to 5, with four

perceptions of practices inside ed-

indicators monitored in 2019:

3.7

ucational institutions. Among the

Scores for this indicator are cal-

aspects evaluated are actions and

culated on a scale from 0 to 5.

• Infrastructure

Quality

Index

3.8

innovations that broaden the worl-

In 2019, this indicator evidenced

(IQF): it

evaluates

the

virtual

IQA

dview of students, to stimulate the

levels of quality and excellence in

environment,

the

library and

elaboration of projects and partici-

relation to our positive impact on

4.0

IT lab,

and

the

classrooms

pation in activities to transform life

people's lives.

and common areas. At DL, it

3.7

Average at Avaliar according to each public

also considers accessibility re-

3.4

sources.

Courses Quality Index (IQC): it considers the teaching and pedagogical organization as well as the on-campus teacher and course coordinator. In DL, the tutor's performance is also evaluated.
Services Quality Index (IQA): it evaluates self-service at the Student Portal, services via on- line chat, and on-site services.
Institution Quality Index (IQI): it considers the unit's average IQC, IQF, IQA, and the students' Future Transformation index.

IQC

4.0

3.8

4.2

IQF

3.8

3.9

DL 100% online

DL Once a Week model

On-campus

Source: Avaliar Report 2019.

	Students: 3.6
	Teachers: 4.5
	Course Coordinators: 4.7
On-Campus	Technical and Administrative Employees: 4.4
Education

		Students (Semi distance): 3.5
		Students (100% online): 3.7

		Teachers: 3.6
Distance	Course Coordinators: 3.7
Distance Tutors: 4.0
Learning

COGNA Sustainability Report 2019

Average at Avaliar according to each public - Accessibility Resources	CPA'	representativeness	corre-	opportunities	are identified to
		sponds to each community aca-	promote an	efficient budgetary
With the support of NUEEI (Inclusive Special Education Center), we up-	demic segment: students, tech-	destination for IES' needs.
dated several indicators to ascertain our students' perception of resourc-	nical	and administrative	staff,
es available at units in order to better prioritize quality education that is	teaching staff, course coordina-	Satisfaction Survey
accessible to everyone. Thus, indicators measuring local infrastructure,	tion staff with a member of the or-
services, common areas, and resources available were prioritized.	ganized civil society, the commu-	Likewise, in primary and sec-
		nity where the IES is located.	ondary Education, we apply the
					NPS (Net Promoter Score) tool in
		In 2019, including all IES, approxi-	the Postsecondary education to
	Students: 4.0	mately 800 people composed the	measure students' and parents'
	CPAs and analyzed the data of	opinions monthly on all brands
	Teachers: 4.6	Avaliar, PDI, Canal Conecta, exter-	and modes.
	Coordinators: 4.8	nal evaluations, and Ombudsman,
	among others, issuing 174 Institu-	Kroton
On-Campus	Employees: 4.6
tional	Evaluation Reports	(RAI),	• +14 pp in NPS in line with
Education
		submitted to MEC via e-MEC sys-	Avaliar's results.
		tem and in loco evaluations re-
		ceived by units. Through reports,	Platos
		positive issues and improvement	• NPS 30.0, vs. 16.0 in 2018.

Students (DL Once a Week model): 3.8

Course Coordinators: 4.6

Distance

Learning

Own Evaluation Commission GRI 102-43

Each Postsecondary Education Institution (IES) of Kroton has its own Evaluation Commission (CPA), liable for managing the self-evaluation process, which comprises the in-house actions to raise the academic community's awareness of Avaliar. In addition, the CPA monitors the achievement of objectives and targets of the Institutional Development Plan (PDI) and sends information requested by the National Institute of Studies and Educational Researches Anísio Teixeira (INEP), pursuant to prevailing laws.

Anhanguera Taubaté - Taubaté/SP

COGNA Sustainability Report 2019

Employability

GRI 103-2;103-3: Indirect economic impacts; 203-2

At Cogna, we are committed to the employability of our students and alumni. Our academic model prioritizes skills required by the labor market, which we map through continuous market research and the relationships we cultivate with employers across several industries.

This commitment is formalized in our Employability and Graduate Student Monitoring Policy, whose objective is to include students and alumni in the labor market and monitor their professional evolution.

In 2019, Kroton took another step in its employability strategy. Besides maintaining the Canal Conecta (additional information in this chapter), which offers job opportunities to students and

graduates, the Academic Product Planning and Development Executive Board has begun a labor market intelligence initiative. This new area continuously analyzes the future of labor market trends and market dynamics in Brazil to ensure our institutions effectively prepare students for the ever -changing global labor market.

In line with this initiative, we monitor students and graduates in the labor market to ensure we understand how postsecondary education influences the future professional lives and income of students. In addition, the labor market team's role is to engage a group of labor market players, especially employers, in initiatives executed jointly with Kro- ton's academic department. This approach is designed to actualize our company's new vision: to become a benchmark of integration between academics and the labor market to deliver practical results to our students and graduates.

How our student is introduced to the labor market

In 2019, we conducted an annual survey of all graduates of our educational institutions to identify their professional situations and to learn about their job searches; 11,346 graduates and 16,515 students were analyzed.

The survey indicated that over 95% of our graduates are economically active, and most work more than 40 hours per week in formal segments of the market as intern, employees in the private and public sectors, and registered entrepreneurs, for instance. Such number is maintained after graduation since a decrease in the number of trainees is leveled with a higher formalization of self-employed workers and the entry of a greater percentage of students in the public sector.

COGNA Sustainability Report 2019

Job distribution by category							In 2019, we conducted
Private sector employee with employment booklet	Self-employed worker without CNPJ/MEI	an annual survey of
													all graduates of our
	56.8%							3.9%


													educational institutions
			55.8%						2.5%

Public sector or military employee	Businessperson with CNPJ	to identify their
professional status

					25.7%						3.6%	and learn about

				17.5%						2.2%	their job searches.
Intern
Domestic worker	11,346 graduates
													and 16,515 students
		0.6%						0.4%
										were analyzed.
			12.0%			1.3%

Private sector employee without employment booklet	Family business employee
4.4%	0.5%
4.2%	1.3%

Self-employed worker with CNPJ/MEI	Businessperson without CNPJ

	3.5%		0.5%

		2.9%		0.2%

Graduates

Students

Nursing students -

Pitágoras Betim - Betim/MG

COGNA Sustainability Report 2019

The evolution of student employ-

Hierarchical level

Remuneration of current job

The evolution

ment is composed of three crite-

of current job

I do not receive regular monthly remuneration

of student

ria: income, area of expertise, and

Assistant

hierarchical level. These indicators

employment is

1.8%

advance significantly after gradu-

26%

composed of

ation, when our graduates transi-

2.0%

tion from working at assistant or

36%

> R$5,988.00

three criteria:

operational levels to working at

higher earning expert levels.

Operational/services

area of activity, and

8.3%

hierarchical level-

17%

Area of activity

3.6%

indicators that

30%

R$4,990.00 to R$5,988.00

of current job

Analyst

advance significantly

I work in the same area as I did at graduation

4.1%

after graduation.

46%

2.0%

R$3,992.00 to R$ 4,990.00

32%

I work in a different area

Supervisor/coordinator/expert

7.7%

3.4%

14%

30%

		R$2,994.00 to R$3,992.00
	11%
44%

I work in a similar area, but not exactly the same

24%

Specific	professional		12.9%

(nurse, engineer, accountant, etc.)
	6.1%


			25%	R$1,996.00 to R$2,994.00


11%
					22.8%
Manager/officer

		14.3%

9%				R$998.00 to R$1,996.00


	8%					37.8%

48.3%

< R$ 998.00 4.7%

Graduates

Students

20.3%

COGNA Sustainability Report 2019

The advancement of graduates in the professional world differs

Job distribution by category

We also observed that, although employed, some students are

This analysis confirms the importance of education, reinforced by

in each area of expertise. While Exact and Applied Sciences students have greater job opportunity in the private sector (as permanent workers), Human Sciences students are more present in the public sector or in internship va- cancies. The Human Sciences group also has a greater number of workers in informal job posi- tions, an effect of specific characteristics of this segment in the

Total

56%

Applied Sciences

60%

Health

55%

Human

39%

4% 3% 3%

17% 12%

3% 3% 2%

16% 10%

5% 4% 4%

18% 9%

6% 3% 3%

27% 19%

seeking another job- which is largely motivated by field of activity (41%), hierarchical level (29%), and income (18%). Of the half not seeking additional employment, 69% are happy with their current jobs. Most students plan to become entrepreneurs.

What is your dream job?

Open my own business

post-crisisupswing scenario in Brazil. Our students see their lives change as we guide them through their educational and profession- al journeys. Our program produc- es highly qualified graduates who go on to work in highly skilled fields in higher ranking positions that offer benefits.

Canal Conecta GRI 103-2;

103-3: Indirect economic impacts;

market and economy.

Exact Sciences	3% 4% 2%


73%	6%	8%

29%

Work in the government/on government issues

26%

203-2;413-1

Canal Conecta, our main employability initiative, is a portal that uses proprietary algorithms to indicate the best available job opportuni-

Private sector employee with employment booklet

Public or military sector employee

Trainee

Private sector employee without employment booklet

Self-employed worker bearing CNPJ/MEI

Self-employed worker not bearing CNPJ/MEI

Businessperson bearing CNPJ

Domestic worker

Family business employee Businessperson not bearing CNPJ

Work in a private company

18%

Become self-employed

13%

I don't have a dream job

Work in third sector

ties for our students and alumni.

Access the QR Code and check the video

COGNA Sustainability Report 2019

Students enter their curricula information into Canal Conecta using a quick, intuitive process designed for phased completion that allows them to enter updates as their academic programs progress and to smartly identify areas in which they can improve.

In addition, information on students' skills is included in their curricula on an automated basis. Thus, when a student passes a subject, the corresponding skill is added to his/her curriculum and, at the same time, submitted to companies, so the latter define those they consider more relevant for their vacant positions.

Canal Conecta

R$ 277.6 thousand

invested

29,800

partner companies

645,000

students impacted

For companies, Canal Conecta uses an API that allows companies to more efficiently send their job vacancies to Canal Conecta, thus, facilitating HR managers' work.

In 2019, 29,800 partner companies published on Canal Conec- ta job vacancies available to our students and alumni throughout several locations in which we operate around the country. With investments of R$ 277.6 thousand in the period, 645,000 students and alumni were able to access these job vacancy listings through the portal. Approximately 15,000 students and alumni have been already hired via this portal since 2015, with 6,800 hires in 2019 alone.

Active curricula at

Canal Conecta (thousands)

2017 304

2018	490
2019	645

Job vacancies published

in Canal Conecta (thousands)

2017 89

2018	130
2019	200

Partner companies

in Canal Conecta (thousands)

2017 11

2018 20

201929

COGNA Sustainability Report 2019

Example of partner companies

Employability in communities

It is worth noting that we also

GRI 103-2;103-3: Indirect economic

promote other initiatives, such as

impacts; 203-2;413-1

employment fairs, lectures, career

counseling. In 2019, Canal Conec-

By providing professional quali-

ta sponsored two virtual employ-

fication opportunities to our stu-

ment fairs, free of charge and

dents, our Postsecondary Edu-

open to the public, at which over

cation

Institutions

(IES) better

30,000 job vacancies were pre-

the economic situations of our

sented. Twelve large companies

students and the communities in

participating in the fairs conduct-

which we operate.

ed selection processes, employ-

ment forums, and offered labor

Our career advisors are trained to

market tips.

understand and analyze the job

climate and communities in which

According to a study measuring

Working in field of study

they work in order

to effective-

the social and economic impact

ly identify and connect with new

of these initiatives, as a result of

Periodically, we monitor whether our students and alumni are

partners for Canal Conecta.

these and other initiatives intrin-

working in their fields of study. In 2018, the last result available

sic to our value proposal, Kroton's

since the publication of this report, 77% of students were working

Companies prospected are rele-

Postsecondary Education gradu-

in their field of study.

vant for local units and centers,

ates recorded an income increase

After graduation, students find jobs in their

fields of study, advance their

besides allowing students to com-

of R$6.8 billion. The study consid-

careers, and increase their income.

bine study and employment. We

ered students who have graduat-

also pursue partnerships with busi-

ed since 2013 and current Post-

Fields of activity

Students

Graduates

nesses and public interest organi-

secondary

Education

students.

zations, such as unions, trade and

Additional

information

on this

At own field of activity or similar

56%

70%

industry

associations, profession-

study is described in Society.

In other field

44%

30%

al associations, groups of human

resources professionals, develop-

Career levels

Students

Graduates

ment forums, local governments,

Professional or managerial positions

34%

57%

and other branches of government.

Assistant or operational positions

66%

43%

Salaries

Students

Graduates

Above two minimum wages	29%	56%
Up to 2 minimum wages	71%	44%

COGNA Sustainability Report 2019

6.Value Relationships

Employees GRI 102-8;103-2;103-3: Employment; 401-1

It is only thanks to our employees' dedication and commitment that we can maintain our excellence. Accordingly, we offer our employees support through training courses, quality-of-life support, and by promoting diversity.

At the end of 2019, Cogna had a total of 30,690 employees, 27.6% more than in 2018, a result of our expansion process between 2018 and 2019. Check the tables for our

CREATING VALUE

FOR ALL STAKEHOLDERS

employee turnover information in the Exhibits. GRI 102-8;401-1

Total employees

201722,049

201824,056

201930,690

Considering our structure and footprint in the country, we are aware of our potential to positively impact not only on our students and employees, but society as a whole.

COGNA Sustainability Report 2019

To further our growth and strategy as a holding company, we announced the relocation of our business office to a cutting-edge and environmentally sustainable facility certified by LEED (Lead- ership in Energy and Environmental Design).

This site was chosen as a result of an in-housesurvey of employees, which took into account mobility aspects to ensure their well-beingduring commuting hours. This new structure includes a bike rack, locker room, library, and multi-usearea. GRI 102-43;102-44

Valuing diversity GRI

102-8;103-1;103-2;103-3: Diversity and equal opportunities; 405-1

more informal dress code to ensure they feel comfortable being themselves at work. At the Workplace, our corporate social network, we have a LGBTQI+group.

Access the QR Code and check the video

In 2019, we increased the percentage of women represented in our workforce to 57% from 55% in 2018. We also added a woman to our Board of Directors (addi- tional information in the Exhibits). We also built gender-neutral bathrooms to ensure all employees

Employee Development GRI 404-

1; 404-2;404-3;103-1;103-2;103-3: Training & Education

We are committed to delivering quality education to our stu- dents. To facilitate social mobility through education, we have invested in various training programs designed to stimulate team development. In 2019, 730,477.99 hours of training were given, an average of 19.31 hours/ employee, versus an average of 34.84 hours in 2018, thanks to a significant increase in the number of employees in 2019.

Check in Exhibitsthe average by gender and employee category.

GRI 401-1

In 2019, we increased our investment in digital training to ensure employees are qualified and up-to- date on the technologies Cogna incorporates throughout its ongoing digitalization process. We focused on digital mindset training, skills of the future, big data, and IOT. Additional information in Innovation.

We also offered academic training courses for teachers and coordi- nators. The training courses were organized by paths of development for each career phase.

At Cogna, we believe that a diverse and inclusive environment is valuable and contributes to innovation. In this regard, we seek to value diversity in our staff through initiatives during daily activities. Our Be Yourself Program, for instance, encourages employees to adopt a

have access to an environment in which they are comfortable.

We know we have a long path ahead, but every year, our objective is to advance with initiatives that promote employee inclusion and equity.

Paths of knowledge

Paths of development topics included public presentations, basic business education, and strategies for academic course coordinators, teaching staff, directors, and leaders. In 2019, training courses were divided into 22 paths.

COGNA Sustainability Report 2019

Corporate University

Through the Corporate Universi- ty, we promote the development of our employees' competencies. Online training courses are offered via the Kroton University portal as well as in our on-campus struc- ture, located in the city of Valinhos (SP). In 2019, we offered on-campus courses in other regions: Belo Horizonte (MG), Londrina (PR), and São Paulo (SP).

Based on results of individual performance evaluations and as part of our career development plan, we indicate the best courses in line with the competencies to be developed, and then contribute to business continuity. In 2019, the average number of employees who received performance evalu- ation, considering all the Compa- ny's levels, stood at 64%. Check the profile of employees who received performance analyses in the Exhibits. GRI 404-3

In 2019, 522 new courses were offered by Kroton University. In ad- dition, we offer trainees, leaders, and directors development pro- grams, focused on improving par- ticipants' knowledge and career development. It is worth noting that we enhanced our scholarship policy for Somos' employees, adding over 7,000 people to the base.

GRI 404-2

Life Quality Program

Aiming at raising employees' awareness on the relevance of healthy habits, disease prevention, and emotional balance, we run the Life Quality Program, which is divided into four pillars:

Health: disseminating informa- tion on disease prevention and maintaining good health; running program for pregnant women and chronically ill patients; main- taining partnership with the aca- demic department.

In this pillar, it is worth noting Juntos pela Saúde - Gestantes a program which follows up the pre-natal period, childbirth, and postnatal period, and Juntos pela Saúde - Gerenciamento de Doenças Crôni- cas, a program that follows up with chronically ill patients. We also have partnerships, namely, the Pro- grama Cuidar, a program designed for oncologic patients.

Social Life: promoting psycho- logical health through the en- couragement of social and family relationships, stress prevention, leisure time, and culture. We pursue this angle by nurturing partnerships, promoting on-site action, organizing activities on commemorative dates, and or- ganizing joint actions with SESC (Commerce Social Service).

In 2019, a challenge was launched under this pillar for employees to change their daily routines by adding four well-being actions, four social life actions, and four healthy food actions. Employees in 23 Brazilian states participated.

Well-being:promoting good practices for maintaining a healthy body (such as physical exercise and healthy eating), implement- ing on-site actions that promote well-being, and maintaining part- nership with Gympass.
Partnerships: maintaining own partnerships and those with third parties to provide prod- ucts and services with cost ben- efits to employees, including scholarships, travel agencies, and drug stores.

Employees participating in course of Corporate University

COGNA Sustainability Report 2019	60

Society GRI 103-2;103-3: Indirect economic impacts; 203-1;103-2;	Social Responsibility Governance
103-3: Local Communities, 413-1

With operations throughout the Brazilian territory, we are aware of our potential to generate a positive impact for Brazilian society. Within this context, our units promote social impact actions, through the voluntary participation of students and employees, thus, contributing to the development of communities where we operate.

Quarterly strategic meetings are held through the Social Responsibility Committee, which relies

on the participation of members and representatives of Pitágoras Foundation, which guide our social responsibility actions. In 2019, four meetings were held and the agenda of discussions involved, among other priorities, how to contribute to a positive impact on education throughout the country. For the next years, our new social investment strategy shall guide our performance to create a positive impact for society. Additional information in Sustainability.

Besides the Committee concerned with this issue, the Social Responsibility area is below the academic vice president and reports to the Founders Council and People and Culture Council.

Rodrigo Galindo | CEO

Julia Barroso Gonçalves | Product, Management and Expansion VP Marcos Lemos | Academic VP

Camilla Veiga | Production and Social Responsibility Officer Marina Pequeneza de Moraes | Social Responsibility Coordinator

Its performance takes place on three fronts:

Corporate Social Responsibility: go beyond legal obligation, adding value for our stakeholders (shareholders, employees, clients, partners, and society).
Academic Social Responsibility / Service-Learning / Civic Engagement: offer experiential education where students are involved in activities to meet human and community needs, along with structured opportunities to develop thoughts aiming at achieving the desired learning results.
Value added to stakeholders: develop proposals that promote solutions to relevant social issues in the country in a systematic and structured manner, with targets and indicators to evidence the social benefits in the long term, proving the Company's sustainable purpose.

Measurement of social impact

In 2019, we assessed the impacts of social and economic activities developed by Cogna Educação with an external advisor's support. This study applied the Social Return on Investment (SROI), a methodology that helps measure social impact through a broad value concept, besides the financial aspect. See below for the assessment's key highlights:

Maxi School - Cuiabá/MT

COGNA Sustainability Report 2019				61
Quantification of Cogna's

intangible social assets
Key fronts of Cogna's social contribution were classified into five groups:	˜ 3.7 MILLION PEOPLE BENEFITED
•	Access to education: social activities aimed at promoting/facilitating	1.2
	community access to education.
•	Public education management: social activities aimed at improving	million		1.5
Community
	Brazilian public education.
•	Community: social activities aimed at promoting the social transfor-			million	Public education

Professional			management
	mation of units' surroundings.
	services \| 1.2 million

•	Professional Inclusion: activities aimed at benefiting society by pro-	Remarkable	3.7	SGI and director forums \| 1.5 million
	moting access to the labor market.	projects \| 40,000
	MILLION	E-teaching staff \| 750 works

Curriculum: activities and projects aimed at promoting social transfor-

mation by disseminating information.							26.6
		878
According to study, through these activities, nearly 3.7 million people benefited:		thousand
thousand Access to
		Curriculum
	Each R$1 invested by Cogna					education





	corresponds to a return of R$ 6 in			Materials donated \| 1,609	Activities of integration
	terms of benefit for society.	College preparatory courses \| 245	and innovative disciplines
		in the social area

3.7 million	Cogna's social and economic	Cost-free courses \| ABE - 3,953
				Scholarships \| 872,167	15
of people	assets were estimated at						2 million accesses
benefited	R$ 12.5 billion.					Enem	thousand Professional
						60,000 pre-admission tests
							inclusion
	R$ 10.3 billion is the
	annual economic impact							Canal Conecta \| 15,000 hires
	of activities analyzed.							Employability Fair \|

								30,000 opportunities

COGNA Sustainability Report 2019

Remarkable Projects

Testimonies

In 2019, 3,794 social action projects were executed in our on-campus postsecondary education units and distance learning centers, impacting over 824,000 people. These initiatives are in line with the UN Sustainable Development Goals (SDG), among 17, we prioritized three:

SDG related projects

42.60% 10 - Reduction of inequalities

31.50% 03 - Health & well-being

10.80% 04 - Quality education

15.10% - Other SDGs

In 2019, we included a practical volunteering experience in students' curriculum that was in line with SDG 10 (Reduction of Inequalities). At the year-end, in on-campus education, over 20,000 students throughout the country completed the experience, volunteering a total of 85,000 hours to their communities in only 60 days, equivalent to 9 years and 9 months.

I chose working with the elderly-some are people who have family or have never had a family; some were married and today are lonely, forgotten. Spending the afternoon with them was rewarding-I could feel their happiness. We can learn that no matter the situation we're going through now, empathy, helping others, creating happy moments, and having an open smile make us complete human beings.

Luanna Gomes Pauferro, Physiotherapy - 4th semester

Social actions are very important for personal and professional growth-it means being a member of society. Through these actions, we can learn other people's reality and have another vision of life. It was the first time I participated in a social action, I felt fulfilled and, whenever possible, I want to participate.

William Vigioli Massing, Production Engineering - 8th semester

I experienced 5 days and 20 hours of volunteer work and learning. I became a better person every day I was there. I love helping others, and participating in these children's lives made me understand we don't need much to help others. If everyone does a little, it means a lot- and if we are aware of it, people will get closer, we will have more respect, unity, we will be prepared to face the impacts of globalization, positively contributing to mankind, culture, and society. Being able to develop the interpersonal contact helped me to overcome shyness. This voluntary work helped me value team work.

Francisco Carlos Jorge Junior, CST Managerial Processes - 3rd semester

COGNA Sustainability Report 2019			63

Corporate Volunteering Program	Impact of services in 2019 GRI 203-1; 203-2 413-1

In 2019, we also launched the Corporate Volunteering
Program, thus, involving our employees in Somos Futuro		2,659,602	1,250,558
through two modes:
	services rendered	persons benefited
• Volunteer Interviewer: employees interview scholarship applicants

during selection process; 234 volunteers participated from 118 different
locations, 200 Psychology students and teachers of Anhanguera -		8,188	R$523,486,327.10
Taboão da Serra and Anhanguera- Osasco.
	teaching staff	financial relief
• Volunteer Mentor: volunteers monitor entrant scholars during school
	and 131,715 students	from public
year, with 204 participants from 73 different locations.		from 136 units	authorities

Specialized services to communities	Brand	Amount invested (R$ million)	Services rendered

GRI 203-1;413-1

We promoted specialized services in communities where we operate. These services, delivered by our students, relate to their academic backgrounds and align with their future professions. Thus, while the program affords students the benefit of practical experience, the students also contribute to improving the lives of others by providing them with legal, psychological, and health services, for instance.

Since 2017, we have been measuring the direct impact of services rendered to Brazilian society through our on-campuspostsecondary education institutions. In 2019, our institutions delivered 2,659,602 specialized services to over 1.2 million people. This impact corresponds to R$523,486,327.10 financial relief from public authorities, considering the fees and procedures of each professional category. GRI 203-1;413-1

As a governance tool and in service of local transparency, we annually release the social balance sheet of each on-campus postsecondary education unit and, for the first time, we will make available a social balance sheet to our partners who engaged in social initiatives. This document contains records of social projects executed locally, as well as individual data on the social impact and information on services to communities (school clinics, hospitals, universities, and model offices, amongst others).

Anhanguera	R$261,513,005.75	1,051,807
Fama	R$31,268,337.44	160,368
Pitágoras	R$76,594,243.11	317,350
Unic	R$55,339,686.79	467,817
Uniderp	R$16,483,729.13	71,156
Unime	R$65,019,821.90	531,705
Unopar	R$17,267,502.97	59,399

Nursing students -

Anhanguera de

Taubaté - Taubaté/SP

COGNA Sustainability Report 2019

Impact by region

North Region

84 social projects

167,184 specialized services

120,371 people benefited

22,614 students and teaching staff involved

R$32,251,788.25 million financial relief from public authorities

Mid-West Region

902 social projects

644,026 specialized services

433,992 people benefited

82,014 students and teaching staff involved

R$98,962,815.93 million financial relief from public authorities

Total

3,794 social projects

2,659,602 specialized services

2,066,205 persons benefited

496,019 students and teaching staff involved

R$523,486,327.10 million financial relief from public authorities

Northeast Region

588 social projects

641,787 specialized services

336,260 people benefited

83,416 students and teaching staff involved

R$81,640,538.94 million financial relief from public authorities

Southeast Region

1,800 social projects

1,075,847 specialized services

873,307 people benefited

262,378 students and

teaching staff involved

R$265,638,506.52 million financial relief from public authorities

South Region

420 social projects

130,758 specialized services 302,275 people benefited

45,597 students and teaching staff involved

R$44,992,677.46 million financial relief from public authorities

COGNA Sustainability Report 2019

Support to public

education GRI 103-2;103-3: Indirect economic impacts; 203-1; 103- 2; 103-3: Communities Places, 413-1

To broaden the value we create for society, the Pitágoras Founda- tion, our social responsibility arm, has solid experience in high social impact programs, focused on improving education in Brazil.

Through an advanced management methodology SGI (Integrat- ed Management System) applied

to public schools, the foundation supports public school leaders, promoting significant advances in student learning, especially in reading, writing, math, oral expres- sion, and problem-solving skills.

The foundation has been operating over the last 20 years benefiting 1,200 schools, nearly one million students, and 35,000 educators. All in all, 116 municipalities in 12 Brazil- ian States have benefited from this methodology and recorded advances in student learning as well as management processes and practices.

In 2019, we engaged a third-party company to create a dashboard to monitor SGI results in relation to the Primary Education Development Index (IDEB). We also created an SGI index to make analysis of program results more comprehensive.

Besides SGI, the Pitágoras Foundation understands that other social issues are inextricably linked. In this regard, all projects complement each other, pursuing a common objective: reduce social inequalities through education. Check below, other initiatives.

Aliança Brasileira

public school leaders through systematic meetings called Educators and Students Forums. These events promote the exchange of experiences and best practices within five topics defined by public school leaders as essential for a quality school: Peacemaking; Students Motivation; Teacher Mo- tivation; Family/School Integra- tion; and Improvement of Official Learning Indicators.

In 2019, the difference was including students in the audience to follow discussions. We also expanded the Southeast region and extended meetings to other states,

Actions in Brumadinho (MG)

In light of the urgency that followed the dam disaster in the

city of Brumadinho (MG), in 2019, the Pitágoras Foundation offered SGI to all 23 public schools in the region to do its part

to overcome this tragedy and improve learning indexes in the municipality; 984 educators and 7,961 students participated in this action.

In addition to SGI, in 2020, we will deliver a social and environmental competency program developed by SOMOS called The Leader in Me, to 1,500 public schools students in Brumadinho. Besides training all public school teachers, comprehensive learning material concerned with leadership, determination, resilience, and triumph will be distributed.

pela Educação (Brazilian Alliance for Education)

Led by the Pitágoras Foundation, this alliance aims at strengthening

such as Maranhão and Mato Gros- so do Sul. In 2019, three meetings were held and more than 31,000 people participated in the forums on-site and remotely.

Brazilian Alliance for Education Forum - Campo Grande/MS

COGNA Sustainability Report 2019

First childhood

An extension of the federal program Criança Feliz, the First Childhood covers the entire country. Its main challenge is stimulating cognitive and emotional development during the first three years of life. The Pitágoras foundation, in partnership with Cogna units, is liable for classroom infrastructure, food and multimedia resources so that the Ministry of Citizenship can promote the qualification of visitors. Since 2018, this program has trained 1,241 professionals, impacting 68,000 socially vulnerable children and pregnant women in more than 300 municipalities of Minas Gerais.

Also, in 2019, we initiated a study to include a subject on first childhood development in undergraduate courses, especially for those involved in this segment, such as Health, Licentiate, and Pedagogy.

tending to help students complete their studies in classrooms. In addi- tion, it promotes the awareness of public schools and company heads on the relevance of training and employability programs targeting socially vulnerable young students, thus, mitigating delinquency risks.

In the corporate arena, we promote meetings with trade associ- ations, which rely on a large base of companies, to raise awareness on the importance of including vulnerable young students in the labor market. In addition, we offer 50 DL cost-free courses through the portal of Brazilian Alliance for Education, which composes the Foundation's projects.

In 2019, the MRV Institute launched the Educar para Transformar award to recognize schools with good practices relating to the lasting recovery of dropout students. With the foundation's support, 10 schools received the award. Even

Prison system

The foundation provides access to quality education in the prison system through rehabilitation initiatives to weaken the cycle of violence and social exclusion. Among these initiatives, it provides qualification programs at prison units, such as sentence reduction through reading, with support and supervision of Cogna's students and teaching staff and training paths for those deprived of liberty, graduates and system's collaborators.

Through the Citizenship Center, the law courses of our Postsecond- ary Education Institutions provide legal assistance to prisoners who lack access to legal services and provide support to their families. In addition, in 2019, we promoted meetings to train prison directors and agents, and we granted

DL undergraduate scholarships in four courses: Managerial Process- es, Logistics, Legal Services, and Entrepreneurship for nearly 50 prisoners of units of the Association of Prisoners Protection and Assistance (APAC) in Brazil. This pilot action has been executed to build improvements and promote a gradual expansion. By offering scholarships to the prison popu- lation, we are indirectly benefiting the entire society-because without study and job opportunities, these people will resort to increasingly violent crimes.

In pursuit of this mission and of creating value for Cogna's beneficiaries and students, relevant partnerships have been executed with the highest bodies of the Judiciary and Executive branch- es, such as the National Council of Justice (CNJ) and the National Prison Department (Depen).

Dropout recovery

The Pitágoras Foundation also recovers dropouts in public schools through actions that identify and disseminate good practices in-

more relevant than recognizing these schools, the objective is to join forces with other organizations to call attention to this is- sue, and identify, disseminate, and multiply successful initiatives.

Brazilian Alliance Portal for Education

The Brazilian Alliance Portal for Education offers approximately 50 free DL courses for public school students, educators, and persons linked to the prison system (managers, civil servants, graduates). Currently, we have 7,821 active users, issued 1,755 certificates, and conducted 91,250 hours of training.

This course repertoire is renewed and systematically, and relies on Cogna's academic production structure.

COGNA Sustainability Report 2019

Social projects in 2019

GRI 413-1

Colégio pH

Gota Social Project

Since 2015, pH has run Gota So- cial, a cost-free community college preparatory course for underprivileged young students conducted by pH's volunteer teachers and counselors.

Santi

Sarau Project

Since 2015, Santi has run the Sarau Project, which aims at improving students' reading fluency by having them read poetry to others out loud. After a soiree with relatives,

second-grade students record their favorite poetry and send the recordings to institutions assisting the visually impaired, such as the Dorina Nowill Foundation.

SIGMA

Anjos do Sigma Project

For the last 10 years, the Anjos do Sigma Project encourages high school students to volunteer, raising their awareness of humanitarian work in service of socially vulnerable people. Weekly, students and coordinators hold meetings to determine a course of action for the upcoming month that focuses on students and beneficiaries sharing meaningful moments.

Unime Itabuna

Escuta na Praça Project

The Escuta na Praça project of- fers, free of cost, psychological consultation at Praça Camacan in the city of Itabuna. This program aims to help people learn skills and techniques to better cope with difficult circumstances they may be facing. This project both helps meet the mental health needs of community members and teaches students through real -world experience.

Anhanguera São José do Rio Preto Brasil para Estrangeiros Project

This project is designed to reintegrate refugees. Students and teachers of Anhanguera of São José do Rio Preto offer classes in Portuguese, Brazilian culture, and financial skills, and helps the city-dwellers of Venezuela and Haiti prepare their curricula free of charge.

Pitágoras Timbiras e Guajajaras Metamorfose Mulher Project

The units' courses promote the Metamorfose Mulher Project, a citizenship taskforce with women prison guards and women incarcerated in prisons of Minas Gerais under penalty involving deprivation of

For the last 10 years, Anjos do Sigma has encouraged high school students

to volunteer, raising their awareness of humanitarian work in service of socially vulnerable people.

liberty at the Center of Reference of Women Deprived of Liberty, in Vespasiano/MG. Education was provided on prevention of breast and cervical cancer, sexually-transmitted diseases, and unplanned pregnancy as well as guidance on urinary incontinence. Nutritional consultations and dental health services were also provided alongside anti-tobacco and anti-drug programs as well as informational sessions on hygiene, massage, and exercise, aligning social impact with professional development.

Anjos do Sigma - Sigma School - Brasília/DF

COGNA Sustainability Report 2019

Sponsorships and culture promotion

We also operate in favor of social development through the Private Social Investment. We sponsor via Sports Incentive Law the Teachers Training and Centers Network

Embu of Esporte e Educação In- stitute. Projects train teachers and managers to improve education and reinforce sports education and the qualification of teachers and

trainees for the Social and Educational Sports Centers (NESEs), implemented in areas with a high index of social vulnerability and risk.

Via Rouanet Law, the Caravana das Artes of Mpumalanga Insti- tute, is a traveling project that runs municipalities with low Human Development Index (HDI), promotes artistic activities among children and adolescents, and trains public school teachers.

We support the Associação Vag- alume, an institution concerned with empowering rural Amazon children, encouraging reading, and promoting community libraries as a space to share knowledge. We also support Fazendo Minha História of Fazendo História Institute in Brasília, which helps children and adolescents reach their first potential through mediation, reading, and registry of life histories in individual albums.

Through the Elderly Law, we support the CEMAIS3i of Centro Minei- ro de Alianças Intersetoriais - CE- MAIS. Through the Municipal Fund for Children and Adolescent (Fum- cad), we support the Verde Esco- la Institute, which promotes social and educational actions for chil- dren, adolescents, and young people in socially vulnerable regions to build their qualifications and independence; and we support the Capacitar para Incluir Project of the Dorina Nowill Foundation, a course designed to train teachers to support visually impaired students in regular classrooms.

Together, these projects sponsored by Cogna benefited over 25,000 people-among them,

We also operate in favor of social development through the Private

Social Investment. In this regard, we sponsored, via Sports Incentive Law, the Teachers Training and Centers Network - Embu of Esporte e Educação Institute.

children, adolescents, and elderly, socially vulnerable people- provided more than 1,000 hours of training for public school teachers and volunteers and built 10 libraries with the donation of over 8,500 children and youth books.

Also, via Rouanet Law, we sponsored the Reabilitando pela Arte project to be executed in 2020.

das Artes - Mpumalanga Institute

COGNA Sustainability Report 2019

Environmental

8.impacts management

Energy Consumption GRI 103-2;103-3: Energy; 302-1;302-2;302-3;302-4;302-5

Due to the nature of our businesses, we do not create very meaningful environmental impacts, especially compared to other sectors of the economy. In this regard, our main point of attention is electricity consumption and, accordingly, the issue of GHG gases in the atmosphere.

EDUCATION AND EFFICIENT

USE OF RESOURCES

Besides seeking to mitigate environmental impacts through the efficient use of resources, we provide education on environmental sustainability and good practices for our students and society.

COGNA Sustainability Report 2019

Energy efficiency initiatives

To minimize these impacts, besides prioritizing the purchase of energy deriving from renewable sources, we promote initiatives that reduce energy consumption at our units and business offices.

In 2019, we intensified measures to reduce energy consumption. It is worth noting the conclusion of the second phase of replacing inefficient lamps with LEDs at units and a solution to monitor consumption and waste. We also strengthened our environmental sustainability education program, which promotes the responsible use of energy through workshops and educational campaigns.

Another remarkable project was the implementation of an automated air conditioning system in São Luiz (MA), Lauro de Freitas (BA), Teixeira de Freitas (BA), Guarapa- ri (ES), Rondonópolis (MT), and

Contagem (MG) units. As a result, these units recorded a 13% drop, or a reduction in energy consumption of 3,984 GJ. GRI 302-4;302-5

In 2019, 84 units received simple automated projects, with an investment of R$2.1 million, and eight units received advanced automated projects, with a contribution of R$2.85 million. All in all, we invested R$4.95 million in energy efficiency projects.

Energy consumption in 2019

In 2019, we consumed 238,755 GJ (66.320 million KWh) of energy, 2.9% higher than in 2018, on account of the acquisition of new educational units and the construction of new dental clinics and laboratories. A single dental clinic represents an addition of 522 GJ in annual energy consumption. Area expansions and adjustments had an impact of 2,306 GJ (total area of 47,448 m2). GRI 302-1

Also, in line with the acquisition of new units, we acquired 1,446 new air conditioners, which consumed 8,518 GJ in 2019. Thus, despite savings of 3,984 GJ with air conditioning automated projects in several units, we saw an increase of 10,824 GJ relating to expansions and new equipment compared to 2018.

It is worth noting that, despite increases due to our expansion, energy efficiency actions plummeted nearly 40% in relation to growth projections.

GRI 302-4;302-5

Sustainable Building

The selection of a new business office in Sâo Paulo was one of 2019's key highlights. This building was selected because it met several of Cogna's criteria, amongst them, the Leadership in Energy and Environmental Design (LEED) certification, Silver level, which observes the sustainable precepts we deem relevant.

New business office in São Paulo/SP

COGNA Sustainability Report 2019

Environmental Education		Santi		Among outstanding
						Sustainable Santi Program	initiatives in 2019,
Besides directly	reducing	our	Among our outstanding initia-	Santi promotes several actions and
environmental impact, we	are	tives in 2019, we have community	projects under the Sustainable San-	we have community
committed	to	disseminating	gardens, a solid waste collection	ti Program designed to build stu-
gardens, solid
awareness	on issues concerned	campaigns,	revitalization and	dents' social and environmental
with mitigating	environmental	afforestation	of public spaces,	awareness and promote responsi-	waste collection
damage, through	environmen-	beach clean-ups, and the plant-	ble consumption. Recycling proj-
tal education and social projects	ing and donation of seedlings.	ects are carried out in partnership	campaigns,
implemented in the communities	See below for information about	with cooperatives, scrap education-	revitalization and
where we operate.			the projects we have developed:	al projects,	exchange fairs, reuse
						workshops,	community gardens,	afforestation of

						and composting, amongst others.	public spaces,
						Unic Rondonópolis
						beach clean-ups,
						Consciência se Planta Project
						Unic Rondonópolis promoted an en-	and planting and

						vironmental	awareness campaign,	seedlings donations.
						distributing Tabebuia seedlings kits
						to the population, an incentive to
						cultivate nature and plant one of the
						native species to decorate the city
						during winter. This project promotes
						citizenship and preservation of the	50 large bags of trash were collect-
						environment in Rondonópolis.	ed from the streets.
						Anhanguera Piracicaba	Pitágoras Divinópolis
						Corrida Sustentável Project	Horta Sustentável Project
						Anhanguera University in the city of	The environmental engineering
						Piracicaba promoted a sustainable	course planted several automated
						running event, Plogging, a type of	vegetable gardens inside public
						running in which people collect	schools and promoted lectures on
						garbage on the streets while they	healthy eating. Besides teaching
						exercise. With the participation	healthy habits, this project builds
						of students from all courses, their	children's environmental and com-
						families, and IES employees, over	munity awareness.

Santi - Santi School - São Paulo/SP

COGNA Sustainability Report 2019

9.About the report

For the sixth consecutive year, we present Cogna's Sustainability Report for the period between Janu- ary 1 and December 31, 2019. The report presents our performance and management in governance, economic-financial,social, and environmental dimensions as well as our initiatives to create value for our students, employees, in- vestors, and the communities in which we operate. GRI 102-50

In observance of the best prac- tices, we developed our content in line with the Global Reporting Initiative (GRI) Standards, Core option, as well as the assumptions of the International Integrated Reporting Council (IIRC). The report comprises Cogna's consolidated information, and highlights of each segment, in line with brand

changes in 2019. GRI 102-45;

102-48;102-49;102-54

BEST REPORTING PRACTICES

Our Sustainability Report observes the guidelines of the Global Reporting Initiative (GRI) and the International Integrated Reporting Council (IIRC). In 2019, besides materiality, we included new indicators identified in a consultation with institutional investors.

COGNA Sustainability Report 2019					73
Materiality Matrix	List of key topics
GRI 102-44;102-46;102-47;103-1
To provide relevant content for our stakeholders, in line with our man-
agement, our challenges and opportunities, the content was developed	Relevant Aspect	Relevant Topic	Impact Inside	Impact
from the Materiality Matrix process, whose last review took place in	Cogna	Outside Cogna

2019. On that occasion, we prepared a benchmark study with sector
1. Broaden access	Broaden access	All	Students and
pairs, we listed key topics for the Company, which were prioritized
to education		to education	companies	society
through consultation with our key stakeholders in an online survey, and	2. Promote quality			All	Students and
6,147 students, 1,637 employees, and 141 suppliers were interviewed.
education in Brazil			companies	society
GRI 102-40;102-42;102-43;102-46
				Students,
	3. Training of
			All	teachers,
Our report also factored in the ESG perception study results conducted	educational institutions
Promote quality	companies	employees
with institutional investors. Additional information in Sustainability.	professionals
	education		and society

	6. Adoption of
	good management			All	All
	practices of an			companies

	educational institution
	4. Transparency in	Transparency	All	All
	educational services		and ethics	companies

	5. Promotion of	Innovation and
	technology in	All
	innovation and use	All
	processes and	companies
	of technology
		services

	7. Student		Economic	Kroton and Platos	Students and
	employability		society
	empowerment
	8. Communities
		and	All
	social and economic		Society
	employability	companies
	development

Doubts, suggestions, or additional information may be requested and sent to responsabilidadesocial@kroton.com.br GRI 102-53

COGNA Sustainability Report 2019

Exhibits

Information on employees and other workers	GRI 102-8
Employees per employment contract by gender		2018			2019
Female	Male	Total	Female	Male	Total


Monthly-paid employee	8,190	5,195	13,385	11,315	6,838	18,153
Hourly-paid employee	5,302	5,369	10,671	6,518	6,019	12,537
Total	13,492	10,564	24,056	17,833	12,857	30,690

Employees per employment contract, by region		2018			2019
Monthly-Paid		Hourly-Paid	Monthly-Paid		Hourly-Paid

South Region	2,467		1,612	2,321		1,544
Southeast Region	6,936		4,810	9,875		5,506
Mid-West Region	2,206		2,310	2,469		2,642
Northeast Region	1,344		1,678	2,422		2,186
North Region	432		261	1,079		646
Total	13,385		10,671	18,166		12,524

COGNA Sustainability Report 2019

Employees per employee category, by gender		2018			2019
Female	Male	Total	Female	Male	Total


Vice President	1	7	8	1	8	9
Board of Executive Officers	49	62	111	44	58	102
Senior Management	27	52	79	28	53	81
Management	155	183	338	152	185	337
Coordination	617	416	1,033	971	623	1,594
Administrative	6,449	4,360	10,809	9,025	5,436	14,461
Units
Regional Officer	8	16	24	8	16	24
Unit Officer	72	79	151	70	81	151
Academic Coordinator	60	32	92	78	29	107
Course Coordinator	222	160	382	276	199	475
Teacher	4,708	4,172	8,880	6,106	5,287	11,393
Tutor	1,432	717	2,149	1,289	667	1,956
Total	13,800	10,256	24,056	18,048	12,642	30,690

COGNA Sustainability Report 2019

Composition of the highest governance body and committees GRI 102-22

Board of Directors

Advisory Committees

Name	Position	Date of	End of Term	No. of
Election	of Office	tenures

Committee Members

Walfrido Silvino dos Mares Guia Neto - Coordinator

Evando

José Neiva

Juliana

Rozenbaum

Munemori

Luiz Antonio de Moraes Carvalho

Nicolau Ferreira Chacur

Rodrigo Calvo Galindo

Thiago dos Santos Piau

Walfrido Silvino dos Mares Guia Neto

Chairman

Independent

Board Member

Independent

Board Member

Independent

Board Member

Vice

Chairman

Independent

Board Member

Board

Member

12/09/2019

AGM	7
of 2022

AGM	0
of 2022

AGM	6
of 2022

AGM	4
of 2022

AGM	0
of 2022

AGM	0
of 2022

AGM	6
of 2022

Finance & M&A

People & Governance

Strategy & Innovation

Audit & Risk

Founders

Nicolau Ferreira Chacur

Rodrigo Calvo Galindo

Luiz Antonio de Moraes Carvalho - Coordinator Juliana Rozenbaum Munemori

Rodrigo Calvo Galindo

Juliana Rozenbaum Munemori - Coordinator

Thiago dos Santos Piau

Rodrigo Calvo Galindo

Walfrido Silvino dos Mares Guia Neto Nicolau Ferreira Chacur - Coordinator Luiz Antonio de Moraes Carvalho Francisco Henrique Passos Fernandes Gabriel Mário Rodrigues - Coordinator Altamiro Belo Galindo

Evando José Neiva

Júlio Fernando Cabizuca

Walfrido Silvino dos Mares Guia Neto

COGNA Sustainability Report 2019						77
New hires of employees and employee turnover	GRI 401-1

Employee			2018				2019
Turnover	Hires	Hire Rate	Dismissals	Turnover Rate	Hires	Hire Rate	Dismissals	Turnover Rate

By gender
Female	4,844	34.10%	4,893	33.70%	5,546	32.48%	8,166	36.61%
Male	3,576	31.40%	4,279	33.90%	3,985	31.02%	6,137	35.75%
By region
North	322	48.20%	267	44.60%	322	48.18%	267	44.59%
Northeast	1,185	40.00%	1,244	41.10%	1,185	39.97%	1,244	41.10%
Mid-West	1,434	29.40%	1,818	33.60%	1,434	29.36%	1,818	33.60%
Southeast	4,150	32.80%	4,276	33.80%	4,150	32.80%	4,276	33.84%
South	1,329	30.20%	1,567	33.10%	1,329	30.22%	1,567	33.06%
By age group
Under 30 years	3,482	50.20%	2,251	42.20%	3,678	53.80%	5,126	53.80%
Between 30	4,498	29.30%	5,634	33.30%	4,927	49.04%	12,361	49.04%
and 50 years

Over 50 years	440	13.60%	1,287	26.40%	468	53.93%	2,708	53.93%

COGNA Sustainability Report 2019

Average hours of training per year, per employee GRI 404-1

Average hours of	2018	2019
training of employees

By gender
Female	35.61	19.31
Male	33.90	18.38
By employee category
Teacher	31.67	17.17
Tutor	39.46	21.40
Other	36.98	20.05
Management	22.34	12.11
Coordination	36.04	19.54
Course Coordination	43.91	23.81
Board of Executive Officers	43.83	23.77
Academic Coordination	38.44	20.84
Senior Management	6.51	3.53
Vice President	3.6	1.95
Total	34.84	19.31

Percentage of employees regularly receiving career development performance evaluations GRI 404-3

Employees who received	2018	2019
performance evaluation

By gender
Female	79%	62%
Male	81%	66%
By employee category

Teacher	94%	80%
Tutor	90%	96%
Other	66%	47%
Management	22%	15%
Coordination	60%	54%
Course Coordination	91%	98%
Board of Executive Officers	65%	53%
Academic Coordination	78%	63%
Senior Management	2%	3%
Vice President	0%	0%
Total	80%	64%

COGNA Sustainability Report 2019

Diversity of groups in charge of governance and among employees GRI 405-1

Position		2018			2019
Female	Male	Total	Female	Male	Total


Vice President	1	7	8	1	8	9
Board of Executive Officers	49	62	111	44	58	102
Senior Management	27	52	79	28	53	81
Management	155	183	338	152	185	337
Coordination	617	416	1,033	971	623	1,594
Administrative	6,449	4,360	10,809	9,025	5,436	14,461
Units
Regional Officer	8	16	24	8	16	24
Unit Officer	72	79	151	70	81	151
Academic Coordinator	60	32	92	78	29	107
Course Coordinator	222	160	382	276	199	475
Teacher	4,708	4,172	8,880	6,106	5,287	11,393
Tutor	1,432	717	2,149	1,289	667	1,956
Total	13,800	10,256	24,056	18,048	12,642	30,690

COGNA Sustainability Report 2019

Summary of

GRI Standards GRI 102-55

GRI 101: Foundation 2016

GRI 102: General	Standards	Page	Omission	Global	SDG
Disclosure 2016	Compact

Organization Profile

102-1: Name of the organization

102-2: Activities, brands, products and services

102-3: Location of headquarters

6, 29, 31, 39, 41

Our headquarters are located in the city of Belo Horizonte (MG) and the administrative center is located in the city of São Paulo (SP).

102-4: Location of operations	5, 29, 43
102-5: Ownership and legal form	5
102-6: Markets served	6, 29, 31, 39, 41
102-7: Scale of the organization	6, 9, 29, 31, 39, 41, 42, 43
102-8: Information on employees and workers	57, 58, 74	6	8

At the end of 2019, we had a total of 7,912 active suppliers. Main expenditures relating to

102-9: Supply chainsuppliers involved rental (22%); graphic and paper printing (16%); media and advertising (14%); works (7%) and IT services (6.6%).

COGNA Sustainability Report 2019

GRI 101: Foundation 2016

GRI 102: General	Standards	Page	Omission	Global	SDG
Disclosure 2016	Compact

102-10: Significant changes to the organization and its supply chain

102-11: Precautionary principles or approach

102-12: External initiatives

102-13: Membership of associations

Strategy

5, 6, 14, 18

We attempt to participate in voluntary initiatives recognized in Brazil and abroad to promote sustainability in our sector. Thus, we participate in Abraes (Brazilian Association for Development of Postsecondary Education), Funadesp (National Foundation of Development of Private Postsecondary Education) and Anup (National Association of Private Universities).

102-14: Statement from senior decision-maker 3

Ethics and integrity

102-16: Values, principles, standards and norms of behavior

102-17: Mechanisms for advice and concerns about ethics and in compliance with laws, such as relationship channels (ex.: ombudsman

Governance

102-18: Governance structure

102-19: Delegating authority under economic, social and environmental topics from highest governance body to executives and employees

14, 15

COGNA Sustainability Report 2019

GRI 101: Foundation 2016

GRI 102: General	Standards	Page	Omission	Global	SDG
Disclosure 2016	Compact

102-20:Executive-level responsibility for economic, environmental and social topics, whether they directly report to the highest governance body.

102-21: : Consulting stakeholders on economic, environmental and social topics. If consultation is delegated to other structures. Bodies or persons, indicate current feedback process to the highest governance body

The executive responsible for economic topic is our Chief Financial Officer (CFO), who directly reports to the Company's Chief Executive Officer and to the Financial and M&A Committee, which reports critical issues to the Board of Directors. The executive responsible for social topics is the Production and Social Responsibility Officer, who reports to the Product, Management and Management VP and to the Strategy and Innovation Committees and Founders Committee.

All issues reported by stakeholders to the Company and considered relevant are reported to the Board of Directors directly by Chief Executive Officer. Issues may also be reported by CEO or another officer to one of the Statutory Committees whose members compose the Board of Directors.

102-22: Composition of the highest governance body and its committees

102-23: Chair of the highest governance body also an executive officer

102-24: Nominating and selecting the highest governance body and its committees, including if factors are considered, such

as diversity, independence, knowledge, experience and involvement of stakeholders (including shareholders)

13, 76

The Chairman of the Board of Directors, Mr. Evando José Neiva, does not have executive duty at the Company.

102-25: Conflicts of interest	14

COGNA Sustainability Report 2019

GRI 101: Foundation 2016

GRI 102: General	Standards	Page	Omission	Global	SDG
Disclosure 2016	Compact

102-26: Role of highest governance body and executives in the development, approval and update of purpose, mission statement, vision and values, and strategies, policies and targets relating to economic, environmental and social topics of the organization

102-27: Collective knowledge of highest governance body on economic, environmental and social topics

102-28: Evaluating the highest governance body's performance

102-29: Identifying and managing economic, environmental and social impacts

Board members actively participate in the process which creates the concepts of Mission, Vision and Values through a dynamics applied by external advisors, who advised the Company in this process. As to strategies and policies, it shall be incumbent upon the Board of Directors to approve, as laid out in the Company's bylaws.

The areas in charge of economic, social and environmental topics give quarterly presentations to corresponding Committee. In all committees, rely on the attendance of members of the Board of Directors, one of them is nominated the Committee's coordinator, liable for updating other members the board's quarterly meetings. In addition, board members are continuously invited to participate in the Company's plans and projects.

The Company's Board of Directors is composed of renowned educators and professionals, with long experience in the market. Therefore, the Company does not submit them to performance evaluation processes.

We rely on an area dedicated to the risk management process, which reports its activities to the senior management and the Audit Committee, and it is liable for identifying and mitigating risks, improving controls and carrying out independent internal audits.

102-30: Effectiveness of risk	16
management process

COGNA Sustainability Report 2019

GRI 101: Foundation 2016

GRI 102: General	Standards	Page	Omission	Global	SDG
Disclosure 2016	Compact

102-31: Review of economic, environmental and social topics

102-32: Highest governance body's role in sustainability reporting, which ensures that all relevant topics are discussed

102-33: Communicating critical concerns.

Chief Executive Officer.

Board members are notified via e-mail, phone call, conference and on-site meeting. They may also deliberate through electronic means in a critical situation.

102-35: Remuneration policies applied to the highest governance body and executives

102-36: Process for determining remuneration

102-37: Stakeholders' involvement in remuneration, including results of votes on remuneration policies and proposals, where applicable.

Stakeholder engagement

102-40: List of stakeholder groups

102-41: Collective bargaining agreements

102-42: Identifying and selecting stakeholders

102-43: Approach to stakeholder engagement

102-44: Key topics and concerns raised

73
100% of employees are covered by collective	3	8
bargaining agreement.

73

21, 48, 50, 58, 73 48, 58, 73

COGNA Sustainability Report 2019

GRI 101: Foundation 2016

GRI 102: General	Standards	Page	Omission	Global	SDG
Disclosure 2016	Compact

Reporting practice

102-45: Entities included in the consolidated financial statements

102-46: Defining report content and topic boundaries

102-47: List of material topics

102-48: Restatements of information

102-49: Changes in reporting

102-50: Reporting period

102-51: Date of most recent report

102-52: Reporting cycle

102-53: Contact point for questions regarding the report

102-54: Claims of reporting in accordance with GRI standards

102-55: GRI content index

102-56: External assurance

A complete list is available in the financial statements at: http://ir.cogna.com.br/

21, 73

2018

Annual

The financial statements were audited by Deloitte.

Specific	Ditto	Page	Omission	Global	SDG
contents	Compact

Economic standards

GRI 201: Economic performance 2016

GRI 103 Management approach 2016

103-1: Explanation of the material topic and its boundary

103-2: The management approach and its components

103-3: Evaluation of the management approach

1 | 8

1, 5, 8, 16

COGNA Sustainability Report 2019

Specific	Ditto	Page	Omission	Global	SDG
contents	Compact

Economic standards

201-1: Direct economic value generated and distributed

201-4: Financial assistance received from government

GRI 203: Indirect economic impacts 2016

ProUni sets forth, by means of Law No.

11.096 of January 13, 2005, exemption of certain federal taxes to postsecondary education institutions granting full and partial scholarships to low income students, enrolled in traditional undergraduate courses and technological graduation. The Company's postsecondary education subsidiaries are included in this program.

The amount of tax credits not recorded due to ProUni, in the period ended September 30, 2019, including PIS and COFINS, totaled R$332,715 million. On September 30, 2018, the amount was R$ 508,095 million.

GRI 103 Management approach 2016

103-1: Explanation of the material topic and its boundary

103-2: The management approach and its components

103-3: Evaluation of the management approach

203-1: Infrastructure investments and services supported

203-2: Significant indirect economic impacts

51, 54, 56, 60, 65

43, 60, 63, 65

51, 54, 56, 63

1 | 8

1, 5, 8, 16

2, 5, 7, 9, 11

1, 2, 3, 8,

10, 17

GRI 205: Anticorruption 2016

GRI 103 Management approach 2016

103-1: Explanation of the material topic and its boundary

103-2: The management approach and its components

103-3: Evaluation of the management approach

14, 15

1 | 8

1, 5, 8, 16

14, 15

COGNA Sustainability Report 2019

Specific	Ditto	Page	Omission	Global	SDG
contents	Compact

Economic standards

205-1: Operations assessed for risks related to corruption

205-2: Communication and training about anti-corruption policies and procedures

205-3: Confirmed incidents of corruption and actions taken

GRI 206: Anti-competitive behavior 2016

14, 15

10 16

GRI 103 Management approach 2016

103-1: Explanation of the material topic and its boundary

103-2: The management approach and its components

103-3: Evaluation of the management approach

206-1:Legal actions for anti-competitive behavior, antitrust and monopoly practices

In 2019, Cogna did not receive any legal proceeding for anti-competitive behavior, antitrust and monopoly practices.

1 | 8

1, 5, 8, 16

Specific	Ditto	Page	Omission	Global	SDG
contents	Compact

Environmental Standards

GRI 302: Energy 2016

GRI 103 Management approach 2016

103-1: Explanation of the material topic and its boundary

103-2: The management approach and its components

103-3: Evaluation of the management approach

302-1:Energy consumption within the organization

302-2: Energy consumption outside the organization

302-3: Energy intensity

302-4: Reduction of energy consumption

302-5: Reductions in energy requirements of products and services

69, 70

No energy is consumed outside the organization.

Although not available in 2019, Cogna shall map reporting information in 2020.

69, 70

1 \| 8	1, 5, 8, 16
7 \| 8	7, 8 , 12 ,13
8	7, 8 , 12 ,13
8	7, 8 , 12 ,13
8 \| 9	7, 8 , 12 ,13
8 \| 9	7, 8 , 12 ,13

COGNA Sustainability Report 2019

Specific	Ditto	Page	Omission	Global	SDG
contents	Compact

Social standards

GRI 401: Employment 2016

GRI 103 Management approach 2016

103-1: Explanation of the material topic and its boundary

103-2: The management approach and its components

103-3: Evaluation of the management approach

401-1: New employee hires and employee turnover

57, 58, 77

1 \| 8	1, 5, 8, 16
6	5, 8

GRI 404: Training and education 2016

GRI 103 Management approach 2016

103-1: Explanation of the material topic and its boundary

103-2: The management approach and its components

103-3: Evaluation of the management approach

404-1: Average hours of training per year per employee

58, 78

The Company relies on competence management programs, but it does not have a specific program to support the transition relating to employability of employees who are about to retire.

1 | 8

1, 5, 8, 16

4, 5, 8

404-2: Programs for upgrading employee skills and transition assistance programs

404-3: Percentage of employees receiving regular performance and career development reviews

In 2019, we stimulated employees to participate in digital culture courses, which were disseminated to all the Company's stakeholders and businesses. All in all, 522 courses were given in the period.

In addition, we provided career advice and coaching to positions above the Executive Board.

58, 59, 78

5, 8

COGNA Sustainability Report 2019

Specific	Ditto	Page	Omission	Global	SDG
contents	Compact

Social standards

GRI 405: Diversity and equal opportunities 2016

GRI 103 Management approach 2016

103-1: Explanation of the material topic and its boundary

103-2: The management approach and its components

103-3: Evaluation of the management approach

405-1: Diversity of governance bodies and employees

13, 58, 79

1 \| 8	1, 5, 8, 16
6	5, 8

GRI 413: Local communities 2016

GRI 103 Management approach 2016

103-1: Explanation of the material topic and its boundary

103-2: The management approach and its components

103-3: Evaluation of the management approach

413-1: Operations with local communities engagement, impact assessments

and local development

54, 56, 60, 65

44, 46, 48, 54, 56, 60, 63, 65, 67

1 | 8

1, 5, 8, 16

GRI 418: Customer privacy 2016

GRI 103 Management approach 2016

103-1: Explanation of the material topic and its boundary

103-2: The management approach and its components

103-3: Evaluation of the management approach

418-1:Substantiated complaints concerning breaches of customer privacy and losses of customer data

No complaints concerning breaches of customer privacy and losses of customer data.

1 | 8

1, 5, 8, 16

COGNA Sustainability Report 2019

Specific	Ditto	Page	Omission	Global	SDG
contents	Compact

Social standards

GRI 419: Socioeconomic compliance

103-1: Explanation of the material topic and its boundary

103-2: The management approach and its components

103-3: Evaluation of the management approach

1 | 8

1, 5, 8, 16

419-1:Non-compliance with laws and regulations in the social and economic areas

In 2019, we did not record any non-monetary
penalty or sanction considered relevant in the
social and economic areas. The Company's
relevance criterion considers amounts
exceeding R$1 million.
In 2019, 36,749 legal proceedings were shelved,
whose amounts were:	16

• R$32.9 million labor lawsuits, referring to
1,855 proceedings.
• R$87.9 million referring to 34,894
civil proceedings, of which 21,337
were legal proceedings and 13,557
were out-of-court proceedings.

COGNA Sustainability Report 2019

Corporate

Information

COGNA

Investor Relations Department

Avenida Paulista, 901, 2° andar - São Paulo - SP CEP: 01310-100 http://ri.cogna.com.br/en/

E-mail: dri@kroton.com.br

Press Relations Institutional Communication comunicacaoinstitucional@kroton.com.br

Report General Coordination

Camilla Schahin Saad Uchôa Veiga - Production and Social Responsibility Officer Marina Pequeneza de Moraes - Social Responsibility Coordinator

Gabriela Salles - Social Responsibility Analyst

Karina Lakerbai - Social Responsibility Analyst

Eduardo Lili Rabelo - Social Responsibility Junior Analyst Mariana Gonçalves Rolim - Social Responsibility Assistant

Content, GRI Consulting, Graphic Design, and Layout

InspIR Group Brasil

Photos and Videos Acervo Cogna www.pexels.com

Doubts and suggestions on the report: responsabilidadesocial@kroton.com.br

Leisure area new business in São Paulo/SP

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Cogna Educacional SA published this content on 30 April 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 April 2020 20:48:04 UTC

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