Glossary

CAGR (Compounded Annual Growth Rate): compounded annual growth rate.

CRM (Customer Relationship Manager): software that compiles and stores customer data through studies and assists in marketing and relationship strategies.

ERP (Enterprise Resource Planning): information system which integrates all data and processes of an organization into one single system.

IFRS (International Financial Reporting Standards): international standards for financial statements issued by the International Accounting Standards Board – IASB.

Lei do Bem (Good Law): The Company benefits from tax incentives for technological research and development of technological innovations, provided by Law 11,196 of 2005, known as the Lei do Bem. Among the benefits that the Company enjoys is accelerated depreciation, by deduction as a cost or an operating expense in the computation period in which they are made, the expenditures related exclusively to technological research and technological innovation development, which explains a large part of the expenditures in depreciation and amortization of the Company. The Company also benefits from the deduction, for purposes of calculating net income, of the sum of expenditures made during the period in technological research and technological innovation development, classified as operating expenses by legislation on Corporate Income Tax.

POS (Point of Sale): business automation software, installed in shops, used to record sales, consumers and generates information for the ERP.

Recurring revenue: stems from monthly fees for use of software and other offerings from Linx and is based on contracts, in view of the frequency of their occurrence, automatic annual adjustment for inflation and the high renewal rates of such contracts.

Services revenue: stems from implementation services of the Company’s systems, including customization, training and other services related to our products and payment of the license to use software (setup fee). They are recognized by the delivery of the services.

TEF: electronic transfer of funds.

TJLP: long term interest rate.