Randon S A Implementos e Participações : Material Fact - Tax Credits

RANDON S.A. Implementos e Participações

Listed Company

MATERIAL FACT

Randon S.A. Implementos e Participações [B3: RAPT3 and RAPT4] ("Company"), pursuant to Article 157, §4, of Law No. 6.404/1976 and Article 3 of the Securities and Exchange Commission Instruction No. 358/2002, in addition to the Material Fact disclosed on October 29, 2020, concerning the exclusion of the amount of ICMS (Tax on Distribution of Goods and Services) shown in the invoices of PIS and COFINS Taxes calculation base ("ICMS Exclusion"), informs its shareholders and the market in general that:

The Company has decided to recognize in 2020 fiscal year, as revenue, the credits related to the Exclusion of ICMS ("Credits"), as well as to allow the Credits before the Federal Revenue of Brazil. Such a decision followed an analysis made with the advice of lawyers and specialized consulting firms, with the agreement of the members of the Board of Directors and without any divergent note from the members of the Audit Board.

The Company's Credits amount to R$ 860.813.925,15, of which R$ 82.525.497,49 was recognized in the course of 2020 and the remaining balance of R$ 778.288.457,66 will comprise the result to be calculated on December 31, 2020, the adjusted net income of which will be the basis for the calculation of dividends. Credit compensation is expected to be around five (5) years, depending on the Company's future results.

The amount informed above includes credits from the subsidiaries Jost Brasil Sistemas Automotivos Ltda., Master Sistemas Automotivos Ltda., and Fras-le S.A, the credit compensation is expected to be in the period of 3 (three) to 5 (five) years, depending on the future results of each of these subsidiaries.

The above-mentioned recent judicial decisions that have become final, of the Company and its subsidiaries, are clear and specific as to the Exclusion of ICMS procedure by the method of showing taxes in the invoices. However, it should be noted that the decision to recognize the amounts in 2020 does not eliminate an eventual risk, that of pending judgment by the Supreme Court ("STF") of the declaration embargoes to case RE 574.706-PR, regarding indirect tax incidence, which may define a calculation methodology different from those contained in the judicial decisions of the Company and its subsidiaries, in order to materially affect the amounts calculated, reducing the amount of credits already recognized.

Caxias do Sul, December 29, 2020.

Paulo Prignolato

Investor Relations Officer