The Brazilian Corporation Law and the Company’s By-laws require the shareholders’ ordinary general meeting to be held up to April 30 of each year where the shareholders must, among other things, decide about the distribution of the annual dividends. All shareholders are entitled to receive the dividends on the date when the dividends were declared.
The Company’s shareholders will decide about the Board of Directors proposal to allocate the net income for the prior year. The Brazilian Corporation Law defines “net profits” for any fiscal year as net income for that fiscal year, net of any accumulated losses from prior fiscal years, income tax and social contribution taxes and any amounts allocated to the participation of its employees and management in M. Dias Branco’s net profits in such fiscal year.
The M. Dias Branco mandatory dividend is of at least 25% of the adjusted net income, under the terms of the Brazilian Corporate Law and the Company’s By-laws, determined in the unconsolidated financial statements. The yearly distribution of dividends, including dividends in excess of the minimum mandatory dividend, requires approval by a majority vote of the holders of M. Dias Branco’s common shares and will depend on many factors. These factors include the Company’s results of operations, financial condition, cash requirements, future prospects and other factors deemed relevant by M. Dias Branco’s board of directors and shareholders.
The Company’s By-laws allows the payment of interest on capital as dividend payment alternative way. Interest on capital is limited to the daily pro rata variation of the Long-Term Interest Rate, or TJLP. The amount paid as interest on capital, net of income tax, may be included as part of the minimum mandatory dividend. According to applicable law, the Bank is required to pay to shareholders an amount sufficient to ensure that the net amount they receive as interest on equity, after payment of withholding tax, plus the amount of dividends declared, is at least equivalent to the amount of the minimum mandatory dividend.
Any payment of interest on equity to shareholders, whether resident or not in Brazil, is subject to 15% income tax, and this percentage is 25% if the person receiving the interest is resident in a tax haven (ie, a country where there is no income tax or has your rate is lower than 20% or where the local legislation imposes restrictions on disclosing the shareholding composition or the ownership of the investment).
The updated Policy of Shareholder Remuneration can be accessed here.
The table below shows the dividend and interest on shareholders’ equity distributed to M. Dias Branco shareholders for the periods indicated.
|(in millions of reais)
|Dividends and Interest on Shareholders’ Equity||44.0||30.5||31.7||76.3||87.5||87.5||114.5||117.3||137.6||137.9||175.1||190.0||139.0|