Under the Corporate Law and under its by-laws, Renova Energia may declare and pay dividends and/or Interest on Equity. The Executive Board may raise quarterly financial statements, on which interim dividends may be declared and paid, subject to the terms of the by-laws and the legal formalities, and may also declare interim dividends in accordance with Paragraph 2 of Article 204 of the Corporate Law. The amount of any distribution will depend on various factors, such as Renova Energia’s operational profit, financial situation, funding requirements, business outlook and such other factors as the Board of Directors may consider to be significant.
It is the Company’s intention to distribute to its stockholders the minimum obligatory dividends specified in the by-laws and in the Corporate Law, and also to give priority to reinvestment of the funds in the development of its portfolio of projects, as permitted under the by-laws. Thus it intends to allocate to its Investments Reserve all the net profit that it neither allocated to the legally-required minimum reserve (‘the Legal Reserve’), nor to the Contingencies Reserve, nor to the Future Earnings Reserve, nor to payment of the minimum obligatory dividend, nor retained on the basis of a capital budget.
Since Renova Energia is a holding company, its revenue consists almost entirely of dividends from its subsidiaries, Interest on Equity, and loans or other advances and payments, the occurrence or non-occurrence of any of which may at any time not be in accordance with expectations. The Company’s net profit may also capitalized, or used to offset loss, or held as Retained Earnings (as specified in the Corporate Law); and may also not be made available for the payment of dividends or Interest on Equity.
Further, under the Corporate Law a listed company, such as Renova Energia, may suspend the obligatory distribution of dividends in a given business year, if the Board of Directors informs the annual General Meeting of Stockholders that distribution is incompatible with the Company’s financial situation. Hence, in such circumstances, there is a possibility that holders of shares or Units in Renova Energia may not receive dividends or Interest on Equity.
Our activities are developed with the aim of ensuring long-term sustainability since we believe that this is one of the central pillars for a solid business going forward. As such we seek to improve the awareness of our employees, suppliers and surrounding communities on the need to preserve the environment and the rational use of natural resources. Energy generation from wind farms and SHPs is clean generation. It reduces the dependence on fossil fuel consumption as well as allowing the issue of carbon credits which are certificates issued by an accredited international entity based on the verification of the effective contribution of a given project to reducing greenhouse gas emissions in line with the new National Policy on Climate Change and United Nations Organization edicts.
Thus, our sustainability policy seeks to: (i) focus wherever possible, on the use and professional training of labor from the areas where our business is being conducted with the consequent creation of jobs and income; (ii) seek a continuous reduction in the environmental impact of our activities; (iii) prevent accidents; and (iv) improve our relations with regulatory agencies, communities involved and other interested parties. Our policy also allows for the use of resources from the trading of CERs (Certified Emission Reductions) issued by our businesses in support of activities of a social, environmental and cultural nature in the communities in which these CERs are generated.
The socio-environmental approach is intrinsic to our business be it in the nature and choice of the business associated with renewable energy generation, innovation and market differentiation aspects, the composition of the team of professionals with specific training and experience in the socio-environmental area or the existence of environmental programs in regions where our operations are sited.
A large part of our projects under study or in development are located in regions with a low Human Development Index – HDI. This maximizes the positive impacts of our activity through the creation of jobs and income as well as permitting investments in infrastructure and the professional training of the local labor force. This in turn creates a favorable atmosphere for receiving our activities on the part of the local communities and government in the areas of operation. Furthermore it is our intention to continuously develop our environmental management model which seeks to reduce the environmental impact of our activities, including the prevention of accidents and the improvement in relations with the regulators, adjacent communities and other interested parties.
We understand that the definition of a corporate strategy for sustainability and for its integration in the organization’s processes is of extreme importance for the success of our businesses. This strategy of sustainability allows us to attract new investors whose portfolios focus on companies which seek to make sustainability and socio-environmental responsibility a critical part of the new businesses in which they are investing, in turn reducing the risks of incurring unforeseen costs and/or costs involved in delays in the execution of the Business Plan, maintaining good relationships with government bodies and civil society entities.
This posture also permits our consolidation as a benchmark in sustainability, guaranteeing that the organization’s senior management and the team are fully aligned and motivated with respect to the theme.