|Version:||Date of Review:||History:|
|2||12/01/2017||Change of title from “Dividends” to “Proceeds”; Inclusion of items I. Purpose, II. Scope, VI. Additional Documentation, VII. Concepts and Acronyms, V. Responsibilities, subitems 2.4 and 3.2 to 3.2.2 of III. Guidelines, IV. Outcome Management. Update of the following subitems of III. Guidelines: 2.2.1 and 3.1.|
|3||07/26/2018||Amendment to subitem 3.1 of III. Guidelines.|
To set out the rules for distribution of Dividends and Interest on Equity to the company’s shareholders.
Shareholders holding CIEL3 shares, under the custody of B3 S.A.- Brazil, Stock Exchange, OTC and/or holding American Depositary Receipts (“ADRs”) of Cielo S.A. (“Company”).
III. Guidelines1. Rules for Profit Retention
1. Rules for Profit Retention
1.1. In addition to the applicable rules in the Brazilian Corporation Law and pursuant to its Bylaws, the Company may keep a statutory profit reserve called “Expansion Reserve”, the purpose of which will be to finance the expansion of its activities and/or the activities of its subsidiaries and associated companies, inclusive by means of capital increases subscription.
1.2. Such reserve will be composed of up to fifty percent (50%) of the net income for the year, adjusted as set forth in Article 202 of the Brazilian Corporation Law, the balance of which, added to the balances of other reserves, except for the unrealized profit reserve and contingencies reserves, cannot exceed one hundred percent (100%) of the Company’s subscribed capital stock.
2. Rules for distribution of Dividends and Interest on Equity
2.1. The annual declaration of Dividends exceeding the minimum mandatory dividend, requires approval at the Annual General Meeting by majority of votes and it will rely on several factors, such as, but no limited to the Company’s operating results, its financial condition, cash needs, prospects, as well as other items that the board of directors and the shareholders may deem relevant.
2.2. The Bylaws set forth the payment of the minimum mandatory dividend of, at least, thirty percent (30.0%) of the net income verified in the financial statements, adjusted according to the Brazilian Corporation Law.
2.2.1. The dividend mentioned above shall not be mandatory for the fiscal year in which the Company’s Management informs to the Annual General Meeting that it is not compatible with its financial position.
2.3. The Board of Directors may, pursuant to the Brazilian Corporation Law and in observance to operating results, financial condition, cash needs, prospects and other factors, resolve on the payment of interim dividends and interest on equity.
2.4. As proposed by Management, subject to the approval of the Annual General Meeting, the Company may pay or credit Interest on Equity, pursuant to applicable laws. Any amounts so disbursed may be attributable to the amount of mandatory dividend provided for in the Bylaws.
3. Payment Schedule:
3.1. Payment of dividends and interest on equity shall take place on a quarterly basis, considering results verified every quarter, and referred payment shall be made in the quarter following that one where results were verified.
3.2. Pursuant to article 204 of the Brazilian Corporation Law:
3.2.1. The Company may draw up biannually balance sheets or for shorter periods and, upon approval by the board of directors and pursuant to the limits set forth by law, declare dividends to the profit account verified in these balance sheets, which may be offset with minimum mandatory dividend; and
3.2.2. The Board of Directors may declare interim dividends to the retained earnings account or profit reserves, based on the last balance sheet approved by the shareholders.
IV. Outcome Management
Employees, suppliers, and other stakeholders who notice any deviation to this Policy’s guidelines may report the fact to the Ethics Channel (www.canaldeetica.com.br/cielo or 0800 775 0808), anonymously or not.
Internally, the failure to comply with this Policy’s guidelines implies the application of measures for agents’ liability who fail to comply therewith, according to the respective seriousness of such non-compliance.
- Management (Board of Directors and Statutory Executive Board): To comply with legal provisions, Bylaws provision, the guidelines set forth in this Policy, as well as to keep it updated so as to ensure that any changes in the Company’s direction be incorporated into it and to clarify doubts related to its content and application.
VI. Additional Documentation
- Cielo’s Code of Ethical Conduct
- Law No. 6404, of December 15, 1976, as amended (“Brazilian Corporation Law”)
- Law No. 9249/95, of December 26, 1995 (“Law No. 9249/95”)
- CVM Resolutions
- Company’s Bylaws
VII. Concepts and Acronyms
For the purposes of this Policy, it is hereby set out that:
- Shareholders: Holders of shares and ADRs (American Depositary Receipts) of the Company on the base date for payment of Dividends and Interest on Equity until the cut-off date informed to the market (ex-dividends date).
- Dividends: These correspond to the profit share distributed to the Company’s shareholders, proportionately to the number of shares held thereby, ascertained at the end of each fiscal year.
- Interest on Equity (JCP) It corresponds to the profit share distributed to the Company’s shareholders, proportionately to the number of shares held thereby, ascertained at the end of each fiscal year, deductible for the purposes of income tax calculation basis.
It shall be incumbent upon the Company’s Board of Directors to alter this Policy, whenever necessary.
This Policy comes into force as of its approval date by the Board of Directors and revokes any contrary rules and procedures.