Companhia de Saneamento Basico Sabesp : Notice to Shareholders

We hereby inform the Company's Shareholders that the payment of Dividends in the form of Interest on Own Capital, referring to the year 2015, will be settled on June 28, 2016. Such payment was approved by the Board of Directors in meeting held on March 24, 2016.

1. Dividends in the form of Interest on Own Capital for the year 2015, will be paid at the ratio of R$ 0,2193 per share held on the reference date as of April 5, 2016.

2. Instructions for credit:

2.1. Shareholders will have their credits available to their banking instructions provided to Itaú Unibanco S/A.

2.2. Shareholders whose Registry Information are not updated - Shareholders whose registry information does not include either their Individual/Corporate Taxpayer's Identification Number (CPF/CNPJ) or complete banking instructions (bank, branch and account number) will have their interest credited on the third business day after they have updated their registry in the electronic files of Itaú Unibanco S/A.

2.3. Those shareholders whose shares are under fiduciary custody will have their Dividends in the form of Interest on Own Capital credited in accordance with the procedures adopted by Stock Exchanges.

3. Assistance to Shareholders:

Shareholders may be assisted at any Itaú Unibanco S/A's branch, as well as at any branch allowed to assist shareholders, during bank working hours.

4. Payment in connection with the American Depositary Receipts (ADRs) traded on the New York Stock Exchange - NYSE will be made through The Bank of New York Mellon, depositary bank for the ADRs. Information concerning date of payment and any other additional information may be obtained atwww.adrbnymellon.com.

São Paulo, June 22, 2016.

Rui de Britto Álvares Affonso
Chief Financial Officer and Investor Relations Officer