Centrais Elétricas de Santa Catarina S.A. Quarterly information (ITR) at June 30, 2013 and report on review of quarterly information

Transcription

1 (A free translation of the original in Portuguese) Centrais Elétricas de Santa Catarina S.A. Quarterly information (ITR) at June 30, 2013 and report on review of quarterly information CELESC613BBMEL.DOCX

2 (A free translation of the original in Portuguese) Report on review of quarterly information To the Board of Directors, Officers and Stockholders Centrais Elétricas de Santa Catarina S.A. Florianópolis - SC Introduction We have reviewed the accompanying parent company and consolidated interim accounting information of Centrais Elétricas de Santa Catarina S.A. ( Company ), included in the Quarterly Information Form (ITR) for the quarter ended June 30, 2013, comprising the balance sheet as at that date and the statements of operations and comprehensive income for the quarter and six-month period then ended, and the statements of changes in equity and cash flows for the six-month period then ended, and a summary of significant accounting policies and other explanatory information. Management is responsible for the preparation of the parent company interim accounting information in accordance with the accounting standard CPC 21(R1), Interim Financial Reporting, of the Brazilian Accounting Pronouncements Committee (CPC), and of the consolidated interim accounting information in accordance with CPC 21(R1) and International Accounting Standard (IAS) 34 - Interim Financial Reporting issued by the International Accounting Standards Board (IASB), as well as the presentation of this information in accordance with the standards issued by the Brazilian Securities Commission (CVM), applicable to the preparation of the Quarterly Information (ITR). Our responsibility is to express a conclusion on this interim accounting information based on our review. Scope of review We conducted our review in accordance with Brazilian and International Standards on Reviews of Interim Financial Information (NBC TR Review of Interim Financial Information Performed by the Independent Auditor of the Entity and ISRE Review of Interim Financial Information Performed by the Independent Auditor of the Entity, respectively). A review of interim information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Brazilian and International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. 2

3 Centrais Elétricas de Santa Catarina S.A. Conclusion on the parent company interim information Based on our review, nothing has come to our attention that causes us to believe that the accompanying parent company interim accounting information included in the quarterly information referred to above has not been prepared, in all material respects, in accordance with CPC 21(R1) applicable to the preparation of the Quarterly Information, and presented in accordance with the standards issued by the CVM. Conclusion on the consolidated interim information Based on our review, nothing has come to our attention that causes us to believe that the accompanying consolidated interim accounting information included in the quarterly information referred to above has not been prepared, in all material respects, in accordance with CPC 21(R1) and IAS 34 applicable to the preparation of the Quarterly Information, and presented in accordance with the standards issued by the CVM. Emphasis of matter Restatement of amounts As mentioned in Note 2.4, because of a change in the accounting policy resulting from the approval of the Technical Pronouncement CPC 33(R1) Employee Benefits, CPC 18 (R2) Investments in Associated and Subsidiary Companies and Jointly-controlled Entities and CPC 19 (R2) Joint Ventures, the parent company and consolidated amounts of the balance sheet for the year ended December 31, 2012 and the interim accounting information related to the statement of operations, changes in equity, cash flows and value added (supplementary information) for the six-month period ended June 30, 2012, presented for comparison purposes, were adjusted and are being restated as provided for by CPC 23 - Accounting Policies, Changes in Accounting Estimates and Correction of Errors and CPC 26(R1) - Presentation of Financial Statements. Our opinion is not qualified in respect of this matter. 3 CELESC613BBMEL.DOCX

4 Centrais Elétricas de Santa Catarina S.A. Other matters Statement of value added We have also reviewed the parent company and consolidated statements of value added for the six-month period ended June 30, These statements are the responsibility of the Company s management, and are required to be presented in accordance with standards issued by the CVM applicable to the preparation of Quarterly Information (ITR) and are considered supplementary information under IFRS, which do not require the presentation of the statement of value added. These statements have been submitted to the same review procedures described above and, based on our review, nothing has come to our attention that causes us to believe that they have not been prepared, in all material respects, in a manner consistent with the parent company and consolidated interim accounting information taken as a whole. Florianópolis, August 13, 2013 KPMG Auditores Independentes CRC SC /F-8 Claudio Henrique Damasceno Reis Accountant CRC SC /O-1 4 CELESC613BBMEL.DOCX

5 (A free translation of the original in Portuguese) Contents Information General Information 1 Address 2 Auditor 3 Share Registrar 4 Investor Relations Officer or Equivalent 5 Stockholders' Department 6 CELESC613BBMEL.DOCX

6 (A free translation of the original in Portuguese) Registration Form Version: 1 1. General Information Corporate name Date of adoption of the corporate name Type Publicly-held corporation Previous corporate name Date of constitution 12/9/1955 National Corporate Taxpayers' Registry (CNPJ) Brazilian Securities Commission (CVM) code / CVM registration date 3/26/1973 CVM registration status Active Date of effectiveness of status 3/26/1973 Home country Country in which the securities are held in custody Brazil Brazil Other countries in which the securities can be traded Country Date of constitution United States 9/21/1994 Activity sector Description of activities Issuer category Date of registration in the current category Issuer status Electric Energy Sector Holding Company in the Electric Energy Sector Category A 1/1/2010 Operating Date of effectiveness of status 3/26/1973 Type of ownership control State-owned Holding Company Date of last change in ownership control Date of last change in the fiscal year Month/day of the end of 12/31 the fiscal year Issuer's website on the Internet Newspapers in which the issuer Name of newspapers in which the issuer discloses its information State discloses its information Valor Econômico SP Diário Catarinense State Official Gazette SC SC CELESC613BBMEL.DOCX 1 of 6

7 (A free translation of the original in Portuguese) Registration Form Version: 1 2. Address Mail address Avenida Itamarati, 160, Itacorubi, Itacorubi, Florianópolis, SC, Brasil, CEP , Telephone: (5548) , Fax: (5548) , ri@celesc.com.br Headquarters' address Avenida Itamarati, 160, Itacorubi, Itacorubi, Florianópolis, SC, Brasil, CEP , Telephone: (5548) , Fax: (5548) , ri@celesc.com.br CELESC613BBMEL.DOCX 2 of 6

8 (A free translation of the original in Portuguese) Registration Form Version: 1 4. Auditor Does the Issuer have an auditor? YES CVM code Type of auditor Brazilian firm Name/Corporate name KPMG Auditores Independentes Individual Taxpayers' Registration Number (CPF)/ National Corporate Taxpayers' Registry (CNPJ) / Period of services 4/4/2011 Partner responsible Period of services CPF Claudio Henrique Damasceno Reis 4/4/ CELESC613BBMEL.DOCX 3 of 6

9 (A free translation of the original in Portuguese) Registration Form Version: 1 5. Share Registrar Does the Company have a service provider? Corporate name YES Itaú Corretora de Valores S.A. CNPJ / Period of services 12/5/2005 Service address Avenida Eng o Armando de Arruda Pereira, 707, Jabaquara, São Paulo, SP, Brasil, CEP , Telephone:(5548) , Fax:(5548) , marcio.conde-souza@itau.com.br CELESC613BBMEL.DOCX 4 of 6

10 (A free translation of the original in Portuguese) Registration Form Version: 1 6. Investor Relations Officer or Equivalent Name José Carlos Oneda Investor Relations Officer CPF/CNPJ Mail address Date when the person assumed the position Rua Emiliano Ramos nº 576, Apto 403, Centro, Lages, SC, Brasil, CEP , Telephone (48) , Fax (48) , ri@celesc.com.br 7/1/2013 Date when the person left the position Name André Luiz de Rezende Investor Relations Officer CPF/CNPJ Mail address Date when the person assumed the position Date when the person left the position Avenida Itamarati, 160, Itacorubi, Florianópolis, SC, Brasil, CEP , Telephone: (5548) , Fax: (5548) , arezende@celesc.com.br 1/10/2011 6/30/2013 CELESC613BBMEL.DOCX 5 of 6

11 (A free translation of the original in Portuguese) Registration Form Version: 1 7. Stockholders' Department CONTACT Date when the person assumed the position Gilberto Onezino de Farias 3/1/1993 Date when the person left the position Mail address Avenida Itamarati, 160, Itacorubi, Florianópolis, SC, Brasil, CEP , Telephone:(5548) , Fax:(5548) , ri@celesc.com.br CELESC613BBMEL.DOCX 6 of 6

12 (A free translation of the original in Portuguese) Contents Company information Capital composition 1 Parent company financial statements Balance sheet - assets 2 Balance sheet - liabilities and equity 3 Statement of operations 4 Statement of comprehensive income (loss) 5 Statement of cash flows - indirect method 6 Statement of changes in equity 1/1/2013 to 6/30/ /1/2012 to 6/30/ Statement of value added 9 Consolidated financial statements Balance sheet - assets 10 Balance sheet - liabilities and equity 11 Statement of operations 12 Statement of comprehensive income (loss) 13 Statement of cash flows - indirect method 14 Statement of changes in equity 1/1/2013 to 6/30/ /1/2012 to 6/30/ Statement of value added 17 Comments on company performance 18 Notes to the quarterly information 24 Other information considered relevant by the Company 80 Reports Report on review of quarterly information - without exceptions 85 Officers' statement on the financial statements 88 Officers' statement on the independent auditor's report 89 CELESC613BBMEL.DOCX

13 (A free translation of the original in Portuguese) Company information / Capital composition Number of shares Current quarter (In thousands) 6/30/2013 Paid-up capital Common shares 15,527 Preferred shares 23,044 Total 38,571 Treasury shares Common shares 0 Preferred shares 0 Total 0 Page 1 of 89

14 (A free translation of the original in Portuguese) Parent company financial statements/balance sheet - assets (R$ thousand) 1 - Code 2 - Description Current quarter 6/30/2013 Prior year 12/31/ Total assets 1,725,312 1,789, Current assets 37,816 41, Cash and cash equivalents 23,543 37, Taxes recoverable 2,649 2, Current taxes recoverable 2,649 2, Other current assets 11,624 1, Other 11,624 1, Dividends receivable 1,037 1, Other receivables 10, Non-current assets 1,687,496 1,748, Long-term receivables 114, , Financial investments measured at fair value 55,198 55, Trading securities 54,981 54, Available-for-sale securities Deferred taxes 23,864 23, Deferred income tax and social contribution 23,864 23, Receivables from related parties 26,149 36, Receivables from controlling stockholders 4,262 4, Receivables from other related parties 21,887 32, Other non-current assets 8,899 8, Judicial deposits 8,899 8, Investments 1,564,831 1,615, Equity investments 1,564,831 1,615, Investments in associates 27,209 32, Investments in subsidiaries 1,419,090 1,467, Investments in jointly-controlled subsidiaries 118, , Property, plant and equipment Property, plant and equipment in use Intangible assets 8,493 8, Intangible assets 8,493 8, Concession agreement 8,493 8,523 Page 2 of 89

15 (A free translation of the original in Portuguese) Parent company financial statements/balance sheet - liabilities and equity (R$ thousand) 1 - Code 2 - Description Current quarter 6/30/2013 Prior year 12/31/ Total liabilities 1,725,312 1,789, Current liabilities 2,941 4, Social and labor obligations Social obligations Social charges Trade payables 400 1, Domestic trade payables 400 1, Tax obligations 1,020 1, Federal tax obligations 1,019 1, Other federal tax obligations 1,019 1, Local tax obligations Other obligations Other Dividends and interest on capital payable Other current liabilities Employee benefit obligations Non-current liabilities 7,890 7, Other obligations Other Federal tax obligations Provisions 7,890 7, Tax, social security, labor and civil provisions 1,263 1, Tax provisions 1,263 1, Other provisions 6,627 6, Regulatory provisions 6,627 6, Equity 1,714,481 1,777, Paid-up share capital 1,017,700 1,017, Capital reserves Advance for future capital increase Revenue reserves 740, , Legal reserve 102, , Profit retention reserve 637, , Accumulated deficit -46, Carrying value adjustments 3,148 19,114 Page 3 of 89

16 (A free translation of the original in Portuguese) Parent company financial statements/statement of operations (R$ thousand) Current quarter 4/1/2013 to 6/30/2013 Accumulated - current year 1/1/2013 to 6/30/2013 Same quarter of prior year 4/1/2012 to 6/30/2012 Accumulated - prior year 1/1/2012 to 6/30/ Code 2 - Description 3.04 Operating income/expenses 117,186-64,548-67,527 8, General and administrative expenses -8,933-17,697-5,187-9, Equity in the results of investees 126,119-46,851-62,340 18, Profit (loss) before finance result and taxes 117,186-64,548-67,527 8, Finance result 689 1,696 2,320 4, Finance income 1,072 2,462 2,702 5, Finance costs Profit (loss) before taxation 117,875-62,852-65,207 13, Net profit (loss) from continuing operations 117,875-62,852-65,207 13, Profit (loss) for the period 117,875-62,852-65,207 13, Earnings (loss) per share (Reais/share) Basic earnings (loss) per share Registered common shares Registered preferred shares Diluted earnings (loss) per share Registered common shares Registered preferred shares Page 4 of 89

17 (A free translation of the original in Portuguese) Parent company financial statements/statement of comprehensive income (loss) (R$ thousand) Current quarter 4/1/2013 to 6/30/2013 Accumulated - current year 1/1/2013 to 6/30/2013 Same quarter of prior year 4/1/2012 to 6/30/2012 Accumulated - prior year 1/1/2012 to 6/30/ Code 2 - Description 4.01 Profit for the period 117,875-62,852-65,207 13, Comprehensive income (loss) for the period 117,875-62,852-65,207 13,540 Page 5 of 89

18 (A free translation of the original in Portuguese) Parent company financial statements/statement of cash flows - indirect method (R$ thousand) Accumulated - current year 1/1/2013 to 6/30/2013 Accumulated - prior year 1/1/2012 to 6/30/ Code 2 - Description 6.01 Net cash used in operating activities -13,943-7, Cash from operations -16,916-6, Profit (loss) before taxation -62,852 13, Depreciation and amortization Equity in the results of investees 46,851-18, Interest and indexation expenses -1,678-2, Changes in assets and liabilities 2, Trade receivables Other assets Trade payables 3,673 1, Salaries and payroll charges Taxes payable , Judicial deposits Other liabilities Net cash provided by (used in) investing activities -12,381 73, Capital increase in subsidiaries -11,000-6, Related parties -15, Dividends received 13,919 79, Net cash provided by (used in) financing activities 11,998-65, Related parties 12,000 12, Dividends paid -2-77, Increase (decrease) in cash and cash equivalents -14, Opening balance of cash and cash equivalents 37,869 37, Closing balance of cash and cash equivalents 23,543 38,361 Page 6 of 89

19 (A free translation of the original in Portuguese) Parent company financial statements/statement of changes in equity - 1/1/2013 to 6/30/2013 (R$ thousand) Capital reserves, stock options and treasury stock Retained earnings (Accumulated deficit) Other comprehensive income (loss) 1 - Code 2 - Description Paid-up share capital Revenue reserves Equity 5.01 Opening balances 1,017, , ,114 1,777, Adjusted opening balances 1,017, , ,114 1,777, Total comprehensive income (loss) ,886-15,966-62, Loss for the period , , Reclassifications to the result ,966-15, Realization of deemed cost ,966-15, Closing balances 1,017, ,203-46,886 3,148 1,714,481 Page 7 of 89

20 (A free translation of the original in Portuguese) Parent company financial statements/statement of changes in equity - 1/1/2012 to 6/30/2012 (R$ thousand) Capital reserves, stock options and treasury stock Other comprehensive income (loss) 1 - Code 2 - Description Paid-up share capital Revenue reserves Retained earnings Equity 5.01 Opening balances 1,017, ,016, ,295 2,284, Adjusted opening balances 1,017, ,016, ,295 2,284, Equity transactions with partners , , Dividends , , Total comprehensive income (loss) ,751-2,211 13, Profit for the period , , Reclassifications to the result ,211-2, Realization of deemed cost ,211-2, Closing balances 1,017, ,001,394 15, ,084 2,282,245 Page 8 of 89

21 (A free translation of the original in Portuguese) Parent company financial statements/statement of value added (R$ thousand) Accumulated - current year 1/1/2013 to 6/30/2013 Accumulated - prior year 1/1/2012 to 6/30/ Code 2 - Description 7.02 Inputs acquired from third parties -4, Materials, electricity, outsourced services and other -4, Gross value added -4, Retentions Depreciation, amortization and depletion Net value added generated -5, Value added received through transfer -44,389 23, Equity in the results of investees -46,851 18, Finance income 2,462 5, Total value added for distribution -49,563 23, Distribution of value added -49,563 23, Personnel 13,091 9, Direct remuneration 13,091 9, Taxes and contributions Federal taxes Remuneration of third-party capital Interest Remuneration of own capital -62,852 13, Retained earnings (loss) for the period -62,852 13,540 Page 9 of 89

22 (A free translation of the original in Portuguese) Consolidated financial statements/balance sheet - assets (R$ thousand) 1 - Code 2 - Description Current quarter 6/30/2013 Prior year 12/31/ Total assets 5,675,766 5,343, Current assets 1,873,243 1,312, Cash and cash equivalents 473, , Financial investments 0 16, Financial investments measured at fair value 0 16, Trading securities 0 16, Receivables 737, , Trade receivables 597, , Trade receivables 948,467 1,219, Provision for impairment of trade receivables -350, , Other receivables 140, , Inventories 12,376 14, Taxes recoverable 39,484 92, Current taxes recoverable 39,484 92, Other current assets 610,116 25, Other 610,116 25, Dividends receivable 1,037 1, Other receivables 39,572 24, Transfer from CDE to cover the CVA account 569, Non-current assets 3,802,523 4,031, Long-term receivables 3,062,313 3,232, Financial investments measured at fair value 55,198 55, Trading securities 54,981 54, Available-for-sale securities Receivables 50, , Trade receivables 47, , Other receivables 3,182 2, Deferred taxes 279, , Deferred income tax and social contribution 279, , Receivables from related parties 26,149 36, Receivables from controlling stockholders 4,262 4, Receivables from other related parties 21,887 32, Other non-current assets 2,651,302 2,544, Taxes recoverable 20,275 14, Judicial deposits 135, , Indemnifiable assets concession 2,495,836 2,390, Investments 175, , Equity investments 175, , Investments in associates 56,843 52, Other investments 118, , Property, plant and equipment 253, , Intangible assets 311, , Intangible assets 311, , Concession agreement 299, , Other intangible assets 12,046 11,244 Page 10 of 89

23 (A free translation of the original in Portuguese) Consolidated financial statements/balance sheet - liabilities and equity (R$ thousand) 1 - Code 2 - Description Current quarter 6/30/2013 Prior year 12/31/ Total liabilities 5,675,766 5,343, Current liabilities 1,316,107 1,305, Social and labor obligations 107, , Trade payables 546, , Domestic trade payables 546, , Tax obligations 101,511 89, Federal tax obligations 46,203 44, Income tax and social contribution payable 5,190 10, PIS/COFINS 32,588 22, Other 8,425 11, State tax obligations 54,911 45, Local tax obligations Borrowings 178,685 81, Borrowings 176,072 81, In local currency 176,072 81, Debentures 2, Other obligations 281, , Liabilities - related parties 9,812 14, Debts with other related parties 9,812 14, Other 271, , Dividends and interest on capital payable Regulatory charges 80, , Other current liabilities 190,233 47, Provisions 100, , Tax, social security, labor and civil provisions 100, , Provisions for employee benefits 100, , Non-current liabilities 2,645,178 2,260, Borrowings 559, , Borrowings 260, , In local currency 260, , Debentures 298, Other obligations 212, , Other 212, , Federal tax obligations Regulatory charges 210, , Other non-current liabilities 2,475 2, Deferred taxes 24,968 28, Deferred income tax and social contribution 24,968 28, Provisions 1,848,183 1,783, Tax, social security, labor and civil provisions 1,803,370 1,747, Tax provisions 29,522 29, Social security and labor provisions 76,324 44, Provisions for employee benefits 1,361,117 1,356, Civil provisions 336, , Other provisions 44,813 35, Regulatory provisions 44,813 35, Consolidated equity 1,714,481 1,777, Paid-up share capital 1,017,700 1,017, Capital reserves Advance for future capital increase Revenue reserves 740, , Legal reserve 102, , Profit retention reserves 637, , Accumulated deficit -46, Carrying value adjustments 3,148 19,114 Page 11 of 89

24 (A free translation of the original in Portuguese) Consolidated financial statements/statement of operations (R$ thousand, unless otherwise stated) Current quarter 4/1/2013 to 6/30/2013 Accumulated - current year 1/1/2013 to 6/30/2013 Same quarter of prior year 4/1/2012 to 6/30/2012 Accumulated - prior year 1/1/2012 to 6/30/ Code 2 - Description 3.01 Revenue from sales and/or services 1,087,962 2,366, ,887 2,110, Cost of goods and/or services -579,847-1,870, ,799-1,846, Gross profit 508, ,216 18, , Operating income/expenses -179, , , , Selling expenses -69, ,342-34,076-85, General and administrative expenses -98, ,966-75, , Other operating expenses -16,720-83,226-18,720-37, Equity in the results of investees 5,471 12,306 3,420 9, Profit (loss) before finance result and taxes 329, , ,243-3, Finance result 19,720 29,262 8,593 24, Finance income 44,422 72,735 30,707 66, Finance costs -24,702-43,473-22,114-42, Profit (loss) before taxation 348, ,250-98,650 20, Income tax and social contribution -230, ,102 33,443-6, Current ,425 34,815-7, Deferred -230, ,677-1, Net profit (loss) from continuing operations 117,875-62,852-65,207 13, Consolidated profit (loss) for the period 117,875-62,852-65,207 13, Attributable to the owners of the parent 117,875-62,852-65,207 13, Earnings (loss) per share (Reais/Share) Basic earnings (loss) per share Registered common shares Registered preferred shares Diluted earnings (loss) per share Registered common shares Registered preferred shares Page 12 of 89

25 (A free translation of the original in Portuguese) Consolidated financial statements/statement of comprehensive income (loss) (R$ thousand, unless otherwise stated) Current quarter 4/1/2013 to 6/30/2013 Accumulated - current year 1/1/2013 to 6/30/2013 Same quarter of prior year 4/1/2012 to 6/30/2012 Accumulated - prior year 1/1/2012 to 6/30/ Code 2 - Description 4.01 Consolidated profit for the period 117,875-62,852-65,207 13, Consolidated comprehensive income (loss) for the period 117,875-62,852-65,207 13, Attributable to the owners of the parent 117,875-62,852-65,207 13,540 Page 13 of 89

26 (A free translation of the original in Portuguese) Consolidated financial statements/statement of cash flows - indirect method (R$ thousand) Accumulated - current year 1/1/2013 to 6/30/2013 Accumulated - prior year 1/1/2012 to 6/30/ Code 2 - Description 6.01 Net cash provided by operating activities 4, , Cash from operations 363, , Profit before taxation 152,250 20, Depreciation and amortization 102,928 81, Gain on disposals of property, plant and equipment and intangible assets 17,405 29, Equity in the results of investees -12,306-9, Unrealized income from investments and interest receivable Interest and indexation expenses 16,453 11, Income tax (IRPJ) and social contribution (CSLL) paid -9,156-15, Provision for impairment of trade receivables 11,421 27, Interest paid -14,696-11, Contingencies 60,421 15, Update of financial assets (VNR) -11, Realization of provision for losses -14, Actuarial expenses 64,190 27, Changes in assets and liabilities -358,198-16, Trade receivables 294,066-2, Other assets -585,537-7, Judicial deposits 4,432-7, Trade payables -156,644 53, Salaries and payroll charges -7,801 8, Taxes payable 17,476-43, Regulatory charges -20,943 18, Taxes recoverable 46,394 8, Other changes in assets and liabilities 138,041 11, Inventories 2,383 2, Employee benefit obligations -90,065-58, Net cash used in investing activities -126, , Purchases of property, plant and equipment and intangible assets -133, , Dividends received 13,919 5, Payment of capital by related parties -6,605-2, Net cash provided by (used in) financing activities 421, , Related parties 12,000 12, Repayment of borrowings -234, , New borrowings 330,367 47, Dividends paid -2-77, Investment fund redemption 16, Debentures 300, Fund raising cost of debentures -2, Increase (decrease) in cash and cash equivalents 300, , Opening balance of cash and cash equivalents 172, , Closing balance of cash and cash equivalents 473, ,921 Page 14 of 89

27 (A free translation of the original in Portuguese) Consolidated financial statements/statement of changes in equity - 1/1/2013 to 6/30/2013 (R$ thousand) Paid-up share capital Capital reserves, stock options and treasury stock Other comprehensive income (loss) Noncontrolling interests Revenue Accumulated Consolidated 1 - Code 2 - Description reserves deficit Equity equity 5.01 Opening balances 1,017, , ,114 1,777, ,777, Adjusted opening balances 1,017, , ,114 1,777, ,777, Total comprehensive income (loss) ,886-15,966-62, , Loss for the period , , , Reclassification to the result ,966-15, Realization of deemed cost ,966-15, Closing balances 1,017, ,203-46,886 3,148 1,714, ,714,481 Page 15 of 89

28 (A free translation of the original in Portuguese) Consolidated financial statements/statement of changes in equity - 1/1/2012 to 6/30/2012 (R$ thousand) Paid-up share capital Capital reserves, stock options and treasury stock Other comprehensive income (loss) Noncontrolling interests Revenue Retained Consolidated 1 - Code 2 - Description reserves earnings Equity equity 5.01 Opening balances 1,017, ,016, ,295 2,284, ,284, Adjusted opening balances 1,017, ,016, ,295 2,284, ,284, Equity transactions with partners , , , Dividends , , , Total comprehensive income (loss) ,751-2,211 13, , Profit for the period , , , Reclassification to the result ,211-2, Realization of deemed cost ,211-2, Closing balances 1,017, ,001,394 15, ,084 2,282, ,282,245 Page 16 of 89

29 (A free translation of the original in Portuguese) Consolidated financial statements/statement of value added (R$ thousand) Accumulated - current year 1/1/2013 to 6/30/2013 Accumulated - prior year 1/1/2012 to 6/30/ Code 2 - Description 7.01 Revenue 3,278,425 3,366, Sales of goods, products and services 3,166,849 3,249, Revenues related to the construction of own assets 122, , Constitution/reversal of provision for impairment of trade receivables -11,421-27, Inputs acquired from third parties -1,843,855-1,742, Costs of goods, products and services sold -1,513,276-1,478, Materials, electricity, outsourced services and other -207, , Other -122, , Costs related to the construction of fixed assets -122, , Gross value added 1,434,570 1,624, Retentions -88,847-81, Depreciation, amortization and depletion -102,928-81, Other 14, Net value added generated by the entity 1,345,723 1,543, Value added received through transfer 85,041 75, Equity in the results of investees 12,306 9, Finance income 72,735 66, Total value added to distribute 1,430,764 1,618, Distribution of value added 1,430,764 1,618, Personnel 312, , Taxes and contributions 1,138,267 1,290, Remuneration of third-party capital 42,740 41, Interest 42,740 41, Remuneration of own capital -62,852 13, Retained earnings (loss) for the period -62,852 13,540 Page 17 of 89

30 (A free translation of the original in Portuguese) Centrais Elétricas de Santa Catarina S.A. Comments on company performance 1. Investments The investments made by the Centrais Elétricas de Santa Catarina (Celesc) Group in property, plant and equipment, intangible assets and interests in Small Hydroelectric Plants (SHPs) in the first sixmonth period of 2013 amounted to R$ million, which was 5.32% lower than the level of investment in the same period of the prior year (R$161.9 million), as presented in the table below: 6/30/2013 6/30/2012 Horizontal Investment R$ % R$ % Analysis Distribution of electric energy 135, , Generation of electric energy 17, , Total 153, , At the close of the second quarter of 2013, the Company's preferred shares (CLSC4) presented a decrease of 12.18%, whereas its common shares (CLSC3) presented an increase of 5.41% in the same period. The São Paulo Stock Exchange (Bovespa) Index (IBOVESPA) decreased by 15.78% and the Electric Energy Industry Index (IEE) decreased by 11.76%. The table below presents the final quoted share prices as at June 30, 2013 and the respective variations, in percentage terms, of Celesc's shares, as well as of the main market indicators: Performance * Variation % As at 6/30/2013 2Q13 1H13 Celesc PN R$ % % Celesc ON R$ % 5.41% IBOVESPA 47, % % IEE 25, % % Source: DEF/DPRI *quotations without adjustment to yield 3. Market value of the share The market values of Celesc's shares as at June 30, 2013, according to the table above, were as follows: R$39.00 for each registered common share (ON) and R$20.99 for each registered preferred share (PN). Its majority stockholder is the state of Santa Catarina, which owns 50.2% of the common shares of the Company, corresponding to 20.2% of total capital. The shareholding and ownership structure of Celesc at June 30, 2013 is presented below: Page 18 of 89

31 (A free translation of the original in Portuguese) Centrais Elétricas de Santa Catarina S.A. Comments on company performance 4. Human resources At the end of the first six-month period of 2013, the Celesc Group had 3,130 employees. The total number of employees decreased by 13.96% in relation to the same period of the prior year (3,638 employees), as a result of the termination of employees under the Voluntary Termination Program (PDV) (see Note 24d). 5. Energy consumption In the second quarter of 2013, the electric energy supplied by Celesc D to the captive market grew 0.5% in comparison with the same period of the prior year, reaching 4,017 GWh. In relation to the total market (including free consumers), there was a growth of 4.0%, attaining 5,435 GWh. Source: DCL/DPCM/DVME Note: Other Classes¹ = Government + Public lighting + Utilities + Resale. Page 19 of 89

32 (A free translation of the original in Portuguese) Centrais Elétricas de Santa Catarina S.A. Comments on company performance Own consumption is not considered. 6. Electric energy market Vertical Variation Horizontal Variation 2nd quarter nd quarter nd quarter nd quarter Description quarter quarter quarter quarter quarter Sales revenue by consumer class in thousands of reais (net of ICMS) Residential 292, , % 34.0% -18.7% Industrial 255, , % 29.9% -19.2% Commercial 193, , % 21.9% -16.6% Rural 43,935 51, % 4.9% -15.4% Government 26,291 32, % 3.0% -18.2% Public lighting 18,146 21, % 2.1% -16.6% Utilities 15,101 17, % 1.6% -12.2% Subtotal 845,163 1,031, % 97.4% -18.1% Supply 25,492 26, % 2.6% -5.5% TOTAL 870,655 1,058, % 100% -17.7% Consumption by consumer class in MWh Residential 1,148,378 1,113, % 27.6% 3.2% Industrial 1,148,402 1,199, % 29.7% -4.2% Commercial 807, , % 19.8% 1.3% Rural 287, , % 7.0% 1.7% Government 96,399 95, % 2.4% 1.0% Public lighting 134, , % 3.3% 2.1% Utilities 77,499 73, % 1.8% 4.8% Subtotal 3,699,298 3,692, % 91.6% 0.2% Supply 317, , % 8.4% -6.0% TOTAL 4,016,875 4,030, % 100% -0.3% Average unit price per MWh (in Reais) Residential % 126.3% -21.2% Industrial % 103.2% -15.7% Commercial % 113.7% -17.7% Rural % 71.8% -16.7% Government % 131.6% -19.0% Public lighting % 64.8% -18.4% Utilities % 90.9% -16.3% Subtotal % 109.2% -18.2% Supply % 31.2% 0.6% TOTAL % 100% -17.8% 7. Economic and Financial Performance At June 30, 2013, the Company's loss for the first six-month period of 2013 was R$ 62.9 million, which represents a severe reduction of % in relation to the same period of 2012 (profit of R$ 13.5 million). The table below presents, through the main economic indicators, the Company's consolidated performance for the period ended June 30, 2013, compared to the same period of the prior year: Page 20 of 89

33 (A free translation of the original in Portuguese) Centrais Elétricas de Santa Catarina S.A. Comments on company performance Economic and Financial Data June 30, June 30, HA Gross Operating Revenue 3,289,846 3,394, % Net Operating Revenue (NOR) 2,366,681 2,110, % Result from Activities 122,988 (3,877) % EBITDA 225,096 76, % EBITDA Margin (EBITDA/NOR) 9.51% 3.64% 5.87 p.p. Net Margin (Profit/NOR) -2.66% 0.64% p.p. Finance result 29,262 24, % Total assets 5,675,766 5,137, % Property, plant and equipment 253, , % Equity 1,714,481 2,172, % Profit/Loss (62,852) 13, % p.p. Percentage Points At the end of the second quarter of 2013, the Celesc Group's Gross Operating Revenue was R$3,289.8 million, which represents a decrease of 3.08% in relation to 2012 (R$3,394.4 million), and the Net Operating Revenue was R$2,366.7 million, which represents an increase of 12.12% in relation to the same period of 2012 (R$2,110.9 million). In the second quarter of 2013, EBITDA reached R$225.1 million and the EBITDA Margin increased from 3.64% in the second quarter of 2012 to 9.51% in Changes in Earnings/Losses before Interest, Taxes and Depreciation/Amortization (EBITDA) are as follows: 8. Ownership Control EBITDA Reconciliation - R$ THOUSAND June 30, June 30, Profit/Loss (62,852) 13,540 Current and deferred IRPJ and CSLL 215,102 6,815 Finance result (29,262) (24,232) Depreciation/Amortization 102,108 80,639 EBITDA 225,096 76,762 The Company's subscribed and paid-up share capital is R$ 1,017.7 million, represented by 38,571,591 shares with no par value, divided into 15,527,137 registered common shares (40.26%) with voting rights and 23,044,454 registered preferred shares (59.74%). Preferred shares have priority to the payment of non-cumulative dividends of 25%. The Company's shareholding structure, in terms of the number of shares held by the stockholders with more than 5% of any share type or class, is as follows: Page 21 of 89

34 (A free translation of the original in Portuguese) Centrais Elétricas de Santa Catarina S.A. Comments on company performance Shareholding base as at 6/30/2013 Stockholder Common shares Preferred shares Total Number % Number % Number % Government of the State of Santa Catarina 7,791, ,791, PREVI 5,140, , ,578, Celos 1,092, , ,323, Geração Futuro investment fund 498, ,512, ,010, Centrais Elétricas Brasileiras - Eletrobras* 4, ,142, ,147, Tarpon investment fund - - 5,177, ,177, MCAP Poland FIA - - 2,817, ,817, Other 999, ,725, ,724, Total 15,527, ,044, ,571, Share capital: R$1,017,700, Authorized capital: R$1,340,000, Listed Company Source: DEF/DPRI 9. Foreign Shareholdings As at the end of the second quarter of 2013, foreign investors held 20.59% of the Company's total share capital, represented by 7,943,329 shares, the majority of which were preferred shares. Source: DEF/DPRI Shareholdings by domicile Number of shares % Foreign investors 7,943, Local investors 30,628, Shares held by the controlling stockholder, management and members of the Statutory Audit Committee The Company is subject to the arbitration of the Market Arbitration Chamber pursuant to an arbitration clause in its bylaws. Stockholder Common shares Preferred shares Total Number % Number % Number % Controlling stockholder 8,982, , ,216, Board of Directors Executive Board Statutory Audit Committee Treasury shares Other stockholders 6,544, ,810, ,355, Total 15,527, ,044, ,571, Source: DEF/DPRI 11. Outstanding shares Registered common shares - Registered preferred shares - Total Description CLSC3 CLSC4 Number % Number % Number % Total capital 15,527, ,044, ,571, Outstanding shares 6,544, ,810, ,355, Source: DEF/DPRI Page 22 of 89

35 (A free translation of the original in Portuguese) Centrais Elétricas de Santa Catarina S.A. Comments on company performance 12. Arbitration clause The Company declares that it is subject to the arbitration of the Market Arbitration Chamber, pursuant to an Arbitration Clause in Article 67 of its bylaws, which reads: "The Company, its stockholders, managers and members of the Statutory Audit Committee agree to resolve, through arbitration before the Market Arbitration Chamber, any and all disputes or controversies that could arise between them relating to, or resulting from, the application, validity, effectiveness, interpretation, breach and its effects, of the provisions of Brazilian Corporation Law, the Company's bylaws, the standards issued by the National Monetary Council (CMN), the Brazilian Central Bank (BACEN) and the Brazilian Securities Commission (CVM), as well as of the other rules applicable to the operation of the capital markets in general, besides those contained in the Regulations of Corporate Governance Level 2, the Agreement for Participation in Corporate Governance Level 2, and the Penalty and Arbitration Regulations of the Market Arbitration Chamber". 13. Independent Auditors In accordance with the provisions of CVM Instruction 381, of January 14, 2003, ratified by Official Letter/CVM/SEP/SNC 02, of March 20, 2003, the Company informs that its independent auditors did not provide any type of service other than those strictly related to external audit activities. Florianópolis, August 14, 2013 The Management Page 23 of 89

36 (A free translation of the original in Portuguese) 1. General information Centrais Elétricas de Santa Catarina S.A. ("Celesc" or the "Company") is a public corporation headquartered at Av. Itamarati, Itacorubi, in the city of Florianópolis, State of Santa Catarina, Brazil. The Company is controlled by the Government of the State of Santa Catarina. Celesc was first listed on a stock exchange on March 26, 1973, and its shares are currently traded at Corporate Governance Level 2 of the São Paulo Securities, Commodities and Futures Exchange (BM&FBOVESPA S.A.). The main activity of the Company and of its direct and indirect subsidiaries ( Group ) is the distribution, transmission and generation of electric energy. It also operates in the piped natural gas distribution segment. This Quarterly Information was approved by the Company's Board of Directors on August 13, At June 30, 2013, the main consolidated wholly-owned subsidiaries, jointly-controlled subsidiaries and associates are: Ownership percentage - % June December Description 30, 31, Direct Indirect Direct Indirect Subsidiaries Celesc Distribuição S.A. (Celesc D) Celesc Geração S.A. (Celesc G) Ownership percentage - % June December Description 30, 31, Direct Indirect Direct Indirect Jointly-controlled subsidiaries: Companhia de Gás de Santa Catarina SCGÁS Empresa Catarinense de Transmissão de Energia ECTE Campo Belo Energética S.A. (Campo Belo) Painel Energética S.A. (Painel) Rondinha Energética S.A. (Rondinha) Companhia Energética Rio das Flores (Rio das Flores) Xavantina Energética (Xavantina) Bandeirante Energética (Bandeirante) Associated companies Dona Francisca Energética S.A. DFESA Usina Hidrelétrica de Cubatão S.A. (Cubatão) Page 24 of 89

37 1.1. Concessions a) Provisional Measure MP 579/2012 (Law 12,783/2013) On September 11, 2012, with the objective of reducing electric energy costs to consumers, the Federal Government published the Provisional Measure (MP) 579/2012. The Presidential Decree 7,805, issued on September 14, 2012, defined some of the operational procedures for implementing the provisions established by MP 579/2012. The Provisional Measure permits that concessionaires with generation, transmission and distribution agreements maturing between 2015 and 2017 accelerate the renewals of these agreements, provided that specific conditions are met. On January 11, 2013, MP 579/2012 was converted into Law 12,783/2013. As informed by the Federal Government, the objective of the measure is to reduce the energy tariffs by an average of 20.2% (16.2% for residential consumers and between 19.7% and 28% for industrial consumers) and is based on two main points: (i) Elimination/reduction of some sector charges, which will contribute to reduce the final tariffs by 7%; and (ii) Definition of new conditions to extend generation, transmission and distribution concession agreements with maturity dates between 2015 and 2017, which will have an average impact of 13.2% on the final tariffs. For the distribution concessionaires, MP 579/2012 defined the reduction of the tariffs with the elimination/reduction of some charges of the sector as from January 1, It also defined the decrease in tariffs due to an extraordinary tariff revision that occurred from February 2013, with the purpose of reflecting the tariff reduction of generation and transmission tariffs, and also the possible effects of the reallocation of energy quotas of generators that will have their concessions extended. For the generation concessionaires, according to MP 579/2012, the renewal of the concessions is subject to acceptance of the following criteria: changes from the price system to the permitted revenue system, with periodical reviews; full allocation of the physical guarantees of energy and power of power plants addressed by MP 579, on a quota regime basis, to the Distributors Regulated Contract Environment (ACR). Furthermore, MP 579/2012 establishes that upon renewal of the distribution, generation and transmission concessions, residual assets will be indemnified by the New Value of Replacement VNR. Future investments should be previously subjected to the regulator agent's approval. b) Decree 7,945/13 CDE Increase Because of the unfavorable hydro power conditions at the end of 2012 and beginning of 2013, among them the low levels of reservoirs in the hydroelectric power plant, the dispatch from thermal power plants was directed to the maximum level. Based on the above and considering the exposure of the concessionaires in the short-term market, mainly arising from the allocation of quotas of physical Page 25 of 89

38 guarantee of energy and power and the revocation of the authorization of the power plants by ANEEL, the cost of energy of the distributors had a significant increase in 2012 and beginning of Due to this scenario and considering that the distribution concessionaires do not administer such costs, the Brazilian government issued, on March 7, 2013, Decree 7,945, which made some alterations related to the contracting of energy and the objectives of the sector-related charge called Energy Development Account (CDE). As regards the contracting of energy, Decree 7,945 (i) reduced the minimum term from three to one year, as from the beginning of the supply of energy, of electric energy sales agreements from existing ventures and (ii) increased the transfer of the costs of acquisition of electric energy by the distributors to the end consumers from one hundred and three per cent to one hundred and five per cent of the total amount of electric energy contracted in relation to the annual charge of supply of the distributor. As regards the objectives of CDE, the Decree altered them and established the transfer of funds from CDE to the distribution concessionaires of the costs listed below: i. The short-term market exposure of the hydroelectric power plants contracted under the physical guarantee of energy and power quota regime basis, due to insufficient generation allocated within the Energy Reallocation Mechanism MRE (Hydrologic Risk). ii. The exposure of the distributors in the short-term market, due to insufficient support by the agreements with regard to the load delivered, related to the amount of replacement not contracted back due to the nonadhesion to an extension of the concessions of electric energy generation (involuntary exposure). iii. The additional cost related to the entry into operation of the thermal power plants off the merit order due to a decision of the Electric Sector Monitoring Committee CMSE (ESS Energetic Security). iv. The full or partial value of the positive balance accumulated by the Account of Variation of Items from Portion A CVA, related to the system service charges and the energy purchased for resale (CVA ESS and Energy). For items (i), (ii) and (iii), the Company recorded, in accordance with CPC 07/IAS 20 Government Grants and Assistance, the amount of R$127,513 thousand. For item (iv), in the process of Tariff Revision of Celesc D, through the Ratifying Resolution 1,574, of July 30, 2013, Aneel granted coverage of the positive result of the Memorandum Accounts of Variation of Items from Portion A CVA estimated on the energy purchased and the ESS charge in the amount of R$569,507 thousand. Both amounts were recorded as a credit of Cost with Electric Energy in the account Recovery of Expenses. Page 26 of 89

39 c) Celesc Distribuição S.A. On July 22, 1999, Celesc D entered into the Contract of Electric Energy Distribution concession 56, which regulates the exploration of electric energy distribution utilities. That concession is effective until July 7, The concession of Celesc D is not onerous; therefore, there are no fixed commitments and payments to be made. According to the concession agreement, at the end of the term of validity, the assets and facilities linked to the distribution of electric energy will become part of the Federal Government's assets, through indemnity of the investments made but not yet amortized, provided that authorized by ANEEL and determined by the regulator. Considering that the conditions established by the Technical Interpretation ICPC 01 - Concession Agreements were fully met, Management of Celesc D concluded that its concession agreement is within the scope of ICPC01 and, therefore, the assets linked to the concession are divided into indemnifying asset and intangible asset. The tariff adjustment is on August 7 of each year and the periodical tariff revision is every four years. Celesc D, in compliance with the provisions of the legislation, stated on September 18, 2012 its request for extension of its concession for 30 years, as from July The conditions of extension will be known only when the grantor of the concession discloses the draft of the addendum to the concession agreement. It is not expected that the tariff reduction introduced by MP 579/2012 will cause relevant impacts to the distribution segment, considering that the changes will only affect the cost of energy purchase and transportation and sector-related charges, which will be fully included in the tariff to the final consumer. d) Celesc Geração S.A. As defined in section two of ANEEL concession agreement 55, of July 22, 1999, the subsidiary Celesc G holds the following concessions for electric energy generation: Generating plant Location Installed capacity (MW) Concession expiration date Palmeiras Rio dos Cedros Rio dos Cedros/SC /7/2016 Bracinho Rio Bracinho Schroeder/SC 15 11/7/2016 Garcia Rio Garcia Angelina/SC /7/2015 Cedros Rio dos Cedros Rio dos Cedros/SC /7/2016 Salto Rio Itajaí-Açu Blumenau/SC /7/2016 Celso Ramos Rio Chapecozinho Faxinal do Guedes/SC /22/2021 Pery Rio Canoas Curitibanos/SC 4.4 7/9/2017 Caveiras Rio Caveiras Lages/SC /10/2018 Ivo Silveira Rio Santa Cruz Campos Novos/SC 2.6 7/7/2015 Pirai Rio Pirai Joinville/SC 0.78 (i) São Lourenço Rio São Lourenço Mafra/SC 0.42 (i) Rio do Peixe Rio do Peixe Videira/SC 0.52 (i) Total installed capacity (i) The companies have no defined concession terms. Page 27 of 89

40 As required by MP 579/2012, the Group registered its request for the extension of concessions for Small Hydroelectric Plants (SHPs) affected by MP 579/2012 on October 15, 2012: Generating plant Location Installed capacity (MW) Concession expiration date Palmeiras Rio dos Cedros Rio dos Cedros/SC /7/2016 Bracinho Rio Bracinho Schroeder/SC 15 11/7/2016 Garcia Rio Garcia Angelina/SC /7/2015 Cedros Rio dos Cedros Rio dos Cedros/SC /7/2016 Salto Rio Itajaí-Açu Blumenau/SC /7/2016 Pery Rio Canoas Curitibanos/SC 4.4 7/9/2017 Ivo Silveira Rio Santa Cruz Campos Novos/SC 2.6 7/7/2015 Total installed capacity 70.2 According to DP 7,805/2012, the Ministry of Mines and Energy (MME) disclosed, on November 1, 2012, through Ordinance 578, of October 31, 2012, the energy generation tariffs applicable to the agreements mentioned above and the Joint Ministerial Ordinance (MME/MF) 580, of November 2012, disclosed the indemnity amounts and made available to Celesc G the new amendments to the concession agreements. It was only on November 6, 2012, through the disclosure of the Technical Notes, that the Group became aware of the methodology utilized to define the initial generation tariffs and indemnity amounts to be paid to the generation concessionaires, respectively addressed by MME Ordinance 578, of October 31, 2012, and Joint Ministerial Ordinance (MME-MF) 580, of November 1, The tariff proposed for the SHPs takes into consideration the regulatory operation, maintenance and administration costs, among others. The table below presents the tariffs disclosed by the grantor of the concession for ventures of Celesc G: Generating plant Location Power for definition of GAG (MW) Tariff (R$/kW.year) Palmeiras Rio dos Cedros Rio dos Cedros/SC Bracinho Rio Bracinho Schroeder/SC Garcia Rio Garcia Angelina/SC Cedros Rio dos Cedros Rio dos Cedros/SC Salto Rio Itajaí-Açu Blumenau/SC Pery Rio Canoas Curitibanos/SC Ivo Silveira Rio Santa Cruz Campos Novos/SC For the power plants listed above, the grantor of the concession did not consider the right to indemnity, except for SHP Pery, for which an indemnity of R$ 98.5 million was defined. These power plants represent 86.51% of the installed power of Celesc G and a portion of their energy is being contracted under the Free Contracting Environment (ACL) as from Management analyzed the conditions established for extending the concession term, as well as the potential economic and financial effects and the tax effects on indemnity and tariff amounts, and is also conducting various internal studies in order to conclude about the non-extension of the concession period. Page 28 of 89

41 In a special meeting held on November 22, 2012 the Board of Directors accompanied the understanding of the Executive Board and decided to not accept the terms of the anticipated renewal of the concessions for the plants of Celesc G based on MP 579/2012, which was later converted into Law 12,783/2013. The decision did not include SHP Pery, which was questioned with a request for an injunction to the Federal Court, to discuss the relative merit of the right to extend the concession for 20 years, as prescribed by Article 26, 7 of Law 9,427, of December 26, After the interposition of this suit on November 30, 2012, the injunction requested was granted by the Honorable Justice suspending the signature of the Addendum to Concession agreement 055/1999. The Defendant filed the Bill of Review in the Federal Regional Court of the 4th Region on 12/20/2012, requesting suspensive effect for the decision that granted the injunction. In 2012 a new public bid was published to select partners and projects in the field of energy generation contemplating other sources, such as: wind, biomass and thermal, in order to sign partnerships in 2013, seeking to comply with the guidelines of the master plan for the Group, whose goal is to reach 1,000 MW in generating projects by e) Companhia de Gás de Santa Catarina S.A. SCGÁS The jointly-controlled subsidiary SCGÁS has a concession agreement to render piped gas distribution services throughout the State of Santa Catarina, which was signed on March 28, 1994, and is effective for 50 years. f) Empresa Catarinense de Transmissão de Energia ECTE The jointly-controlled subsidiary ECTE has a concession agreement for electric energy transmission dated November 1, 2000 and effective for 30 years. 2. Basis of preparation 2.1. Statement of compliance Consolidated quarterly information The consolidated quarterly information was prepared and is being presented in accordance with the Technical Pronouncement CPC 21, Interim Financial Reporting, of the Brazilian Accounting Pronouncements Committee (CPC), and International Accounting Standard (IAS) 34 - Interim Financial Reporting, issued by the International Accounting Standards Board (IASB), and presented in accordance with the standards issued by the Brazilian Securities Commission (CVM), applicable to the preparation of Quarterly Information (ITR). Page 29 of 89

42 Parent company quarterly information The parent company quarterly information was prepared and is being presented in accordance with the Technical Pronouncement CPC 21, Interim Financial Reporting, of the Brazilian Accounting Pronouncements Committee (CPC), and presented in accordance with the standards issued by the Brazilian Securities Commission (CVM), applicable to the preparation of Quarterly Information (ITR). These practices differ from IFRS only with respect to the measurement of investments in subsidiaries based on the equity accounting method, instead of cost or fair value in accordance with IFRS. However, there is no difference between equity and the result of the Parent Company in its parent company financial statements. Thus, the Group's consolidated financial statements and the Parent Company's financial statements are being presented side by side in a single set of financial statements Functional and presentation currency The consolidated quarterly information and the quarterly information of each Group company are presented in Reais, which is the functional currency of the Company and also the presentation currency of the Group. All amounts are rounded to thousands of Reais, unless otherwise stated Critical accounting estimates and judgments Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Based on assumptions, the Group makes estimates concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are addressed below. a) Fair value of other financial instruments The fair value of other financial instruments that are not traded in an active market is determined using valuation techniques. The Group uses judgment to select, among a variety of methods, the most appropriate, according to which assumptions are defined, which are mainly based on market conditions existing at the end of each reporting period. b) Pension benefits The present value of the pension obligations depends on a number of factors that are determined on an actuarial basis utilizing a number of assumptions. The assumptions utilized in determining the net cost (income) for pensions include the discount rate. Any changes in these assumptions will impact the carrying amount of pension obligations. Page 30 of 89

43 The Group determines the appropriate discount rate at the end of each year. This is the interest rate that should be used to determine the present value of estimated future cash outflows expected to be required to settle the pension obligations. In determining the appropriate discount rate, the Group considers the interest rates of high-quality government or corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating the terms of the related pension obligation. Other key assumptions for pension obligations are based in part on current market conditions. c) Income tax and social contribution The Group recognizes provisions for situations in which additional taxes will probably be due. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the current and deferred tax assets and liabilities in the period in which such determination is made. d) Contingencies The Group is currently involved in various tax, labor, civil and regulatory lawsuits, as described in Note 23. Provisions are recognized for probable losses (when the Group has a present legal or constructive obligation as a result of past events; it is probable that an outflow of resources will be required to settle the obligation; and the amount can be reliably estimated). The probability of loss is assessed based on available evidence, including the assessment of external legal counsel. e) Impairment of non-financial assets The impairment of the assets utilized in the Group's activities is assessed whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable based on future cash flows. An asset's carrying amount is written down immediately to its recoverable amount and its useful life is reviewed and adjusted if the asset's carrying amount is greater than its estimated recoverable amount Pronouncements applicable to the Group as from January 1, 2013 IFRS New Standards, Amendments and Interpretations, adopted in the parent company and consolidated quarterly information In 2012 the Brazilian Accounting Pronouncements Committee (CPC) issued, among others, the following pronouncements that affect the Company's activities: CPC 33 (R1) - Employee Benefits. CPC 18 (R2) Investments in Associated and Subsidiary Companies and Jointly-controlled Entities. Page 31 of 89

44 CPC 19 (R2) Joint Arrangements. These accounting pronouncements, approved by the Brazilian Securities Commission (CVM) in 2012, became mandatory for the years beginning as from January 1, 2013 and determine that the jointlycontrolled entities be recorded in the Company s financial statements through the equity accounting method (MEP). The characteristics and the economic reason of the Company's interest classify the jointly-controlled ventures of the investees listed in the table below. With the adoption of these new accounting pronouncements in the first quarter of 2013 the Company no longer consolidates on a pro rata basis these investments. Jointly-controlled subsidiaries: Companhia de Gás de Santa Catarina SCGÁS Empresa Catarinense de Transmissão de Energia ECTE Campo Belo Energética S.A. (Campo Belo) Painel Energética S.A. (Painel) Rondinha Energética S.A. (Rondinha) Companhia Energética Rio das Flores (Rio das Flores) Xavantina Energética (Xavantina) Bandeirante Energética (Bandeirante) The Company's financial information as from the first quarter of 2013 presents the financial position, recognizing the results of these investments through equity in the results of investees. In addition, for comparison purposes, the financial information of the Company for 2012 also recognizes the result of these investments through equity in the results of investees. Another new standard applied as from January 1, 2013 was CPC 33 (R1) and IAS 19 - Employee Benefits. The main impacts of these changes are: (i) elimination of the corridor approach; (ii) recognition of actuarial gains and losses in other comprehensive income (loss), on occurring; (iii) immediate recognition, in the results, of past service costs; and (iv) replacement of the interest cost and expected return on the plan's assets by an amount of net interest, calculated through the application of the discount rate on assets (liabilities) of the net defined benefit. The standard is applicable as from January 1, The application of these new requirements changed the balances of the Company s consolidated balance sheet used as a basis for the analysis of equity variations between December 31, 2012 and June 30, 2013, the statements of operations, cash flows, and added value for the periods ended June 30, 2012 were used as a basis for comparison with the same statements that are being presented at June 30, Page 32 of 89

45 FINANCIAL STATEMENTS CNPJ N o / / NIRE BALANCE SHEET At January 1, 2012 (Amounts in thousands of reais) Assets 1/1/2012 CPC 33 Adjustments CPC 18 and CPC 19 adjustments Consolidated 1/1/2012 Adjusted Current assets Cash and cash equivalents 442,495 - (13,741) 428,754 Marketable securities 15, ,062 Trade receivables 858,809 - (8,509) 850,300 Inventories 20,510 - (1,203) 19,307 Taxes recoverable or for offset 73,337 - (899) 72,438 Dividends receivable 2,215-1,864 4,079 Indemnifiable assets (concessions) 20,303 - (20,303) - Other receivables 39,460 - (1,938) 37,522 1,472,191 - (44,729) 1,427,462 Non-current assets Marketable securities 133, ,013 Trade receivables 121,430 - (54) 121,376 Other receivables from related parties 64, ,888 Deferred taxes 342,560 (56,439) (463) 285,658 Taxes recoverable or for offset 13, ,697 Judicial deposits 147,178 - (222) 146,956 Indemnifiable assets (concessions) 1,987,103 - (43,163) 1,943,940 Other receivables 4,838 - (3,408) 1,430 Investments in subsidiaries and associates 25, , ,994 Intangible assets 616,381 - (81,494) 534,887 Property, plant and equipment 370,105 - (18,277) 351,828 3,827,037 (56,439) (17,931) 3,752,667 Total assets 5,299,228 (56,439) (62,660) 5,180,129 Page 33 of 89

46 FINANCIAL STATEMENTS CNPJ N o / / NIRE BALANCE SHEET At January 1, 2012 (Amounts in thousands of reais) Liabilities and equity 1/1/2012 CPC 33 Adjustments CPC 18 and CPC 19 Adjustments Consolidated 1/1/2012 Adjusted Current liabilities Trade payables 433,503 - (18,980) 414,523 Borrowing and debentures 241,298 - (6,136) 235,162 Salaries and social charges 120,632 - (1,257) 119,375 Taxes and social contributions 129,800 - (6,585) 123,215 Proposed dividends 72, ,048 Regulatory charges 174,941 - (684) 174,257 Other payables to related parties 18, ,113 Actuarial liability 115, ,908 Other liabilities 19,177 - (239) 18,938 1,325,420 - (33,881) 1,291,539 Non-current liabilities Borrowing and debentures 129,800 - (21,871) 107,929 Taxes and social contributions 1, ,207 Deferred taxes 78,140 - (5,751) 72,389 Regulatory charges 147, ,841 Provision for contingencies 489,207 - (345) 488,862 Actuarial liability 949,795 (165,998) - 783,797 Other liabilities 3,287 - (812) 2,475 1,799,277 (165,998) (28,779) 1,604,500 Equity Share capital 1,017, ,017,700 Capital reserves Revenue reserves 1,001, ,001,394 Carrying value adjustments 139, , ,295 Additional dividends to distribute 15, ,385 2,174, ,559-2,284,090 Total liabilities and equity 5,299,228 (56,439) (62,660) 5,180,129 Page 34 of 89

47 FINANCIAL STATEMENTS CNPJ N o / / NIRE BALANCE SHEET At December 31, 2012 (Amounts in thousands of reais) Assets 12/31/2012 CPC 33 Adjustments CPC 18 and CPC 19 Adjustments Consolidated 12/31/2012 Adjusted Current assets Cash and cash equivalents 199,865 - (27,125) 172,740 Marketable securities 16, ,343 Trade receivables 999,436 - (9,072) 990,364 Inventories 15,993 - (1,234) 14,759 Taxes recoverable or for offset 92,432 - (339) 92,093 Dividends receivable ,037 Indemnifiable assets (concessions) 22,147 - (22,147) - Other receivables 28,180 - (3,479) 24,701 1,374,473 - (62,436) 1,312,037 Non-current assets Marketable securities 55, ,198 Trade receivables 102,764 - (2,322) 100,442 Other receivables from related parties 36, ,472 Deferred taxes 431,130 63,526 (481) 494,175 Taxes recoverable or for offset 14, ,060 Judicial deposits 139,910 - (287) 139,623 Indemnifiable assets (concessions) 2,435,306 - (44,632) 2,390,674 Other receivables 7,114 - (5,091) 2,023 Investments in subsidiaries and associates 32, , ,062 Intangible assets 467,092 - (91,895) 375,197 Property, plant and equipment 273,194 - (17,901) 255,293 3,994,775 63,526 (27,082) 4,031,219 Total assets 5,369,248 63,526 (89,518) 5,343,256 Page 35 of 89

48 FINANCIAL STATEMENTS CNPJ N o / / NIRE BALANCE SHEET At December 31, 2012 (Amounts in thousands of reais) Liabilities and equity 12/31/2012 CPC 33 Adjustments CPC 18 and CPC 19 Adjustments Consolidated 12/31/2012 Adjusted Current liabilities Trade payables 721,331 - (18,050) 703,281 Borrowing and debentures 88,165 - (7,101) 81,064 Salaries and social charges 116,471 - (1,044) 115,427 Taxes and social contributions 95,441 - (5,716) 89,725 Proposed dividends (154) 426 Regulatory charges 123,700 - (809) 122,891 Other payables to related parties 14, ,538 Actuarial liability 130, ,960 Other liabilities 48,823 - (1,437) 47,386 1,340,009 - (34,311) 1,305,698 Non-current liabilities Borrowings and debentures 300,654 - (43,608) 257,046 Salaries and social charges Deferred taxes 38,239 - (9,835) 28,404 Regulatory charges 189, ,184 Provision for contingencies 426, ,645 Actuarial liability 1,169, ,973-1,356,430 Other liabilities 4,239 - (1,764) 2,475 2,128, ,973 (55,207) 2,260,225 Equity Share capital 1,017, ,017,700 Capital reserves Revenue reserves 745,892 (5,689) - 740,203 Carrying value adjustments 136,872 (117,758) - 19,114 1,900,780 (123,447) - 1,777,333 Total liabilities and equity 5,369,248 63,526 (89,518) 5,343,256 Page 36 of 89

49 FINANCIAL STATEMENTS CNPJ N o / / NIRE BALANCE SHEET At January 1, 2012 (Amounts in thousands of reais) Assets 1/1/2012 Non-current assets CPC 33 Adjustments CPC 18 and CPC 19 Adjustments Parent company 1/1/2012 Adjusted Investments 1,932, ,559-2,041,832 BALANCE SHEET At January 1, 2012 (Amounts in thousands of reais) Liabilities and equity 1/1/2012 Equity CPC 33 Adjustments CPC 18 and CPC 19 Adjustments Parent company 1/1/2012 Adjusted Share capital 1,017, ,017,700 Capital reserves Revenue reserves 1,001, ,001,394 Carrying value adjustments 139, , ,295 Additional dividends to distribute 15, ,385 2,174, ,559-2,284,090 Page 37 of 89

50 FINANCIAL STATEMENTS CNPJ N o / / NIRE BALANCE SHEET At December 31, 2012 (Amounts in thousands of reais) Assets 12/31/2012 Non-current assets CPC 33 Adjustments CPC 18 and CPC 19 Adjustments Parent company 12/31/2012 Adjusted Investments 1,738,781 (123,447) - 1,615,334 BALANCE SHEET At December 31, 2012 (Amounts in thousands of reais) Liabilities and equity 12/31/2012 CPC 33 Adjustments Equity CPC 18 and CPC 19 Adjustments Parent company 12/31/2012 Adjusted Share capital 1,017, ,017,700 Capital reserves Revenue reserves 745,892 (5,689) - 740,203 Carrying value adjustments 136,872 (117,758) - 19,114 1,900,780 (123,447) - 1,777,333 Page 38 of 89

51 FINANCIAL STATEMENTS CNPJ N o / / NIRE STATEMENT OF OPERATIONS At June 30, 2012 (Amounts in thousands of reais) 6/30/2012 CPC 33 Adjustments CPC 18 and CPC 19 Adjustments Consolidated 6/30/2012 Adjusted Revenue 2,166,457 - (55,581) 2,110,876 Revenue from sales and services 2,021,995 - (55,581) 1,966,414 Construction revenue 144, ,462 Costs (1,889,365) - 43,341 (1,846,024) Cost of sales and services (1,744,903) - 43,341 (1,701,562) Construction cost (144,462) - - (144,462) Gross profit 277,092 - (12,240) 264,852 Selling expenses (86,364) (85,821) General and administrative expenses (155,078) (1,399) 1,872 (154,605) Other operating expenses (37,712) (37,591) Equity in the results of investees 3,732-5,556 9,288 Operating income (expenses) 1,670 (1,399) (4,148) (3,877) Finance income 66,751 - (275) 66,476 Finance costs (44,073) - 1,829 (42,244) Finance result 22,678-1,554 24,232 Profit (loss) before taxation 24,348 - (2,594) 20,355 Current (9,277) - 2,245 (7,032) Deferred (608) Profit/loss for the year 14,463 (923) - 13,540 Page 39 of 89

52 FINANCIAL STATEMENTS CNPJ N o / / NIRE STATEMENT OF CASH FLOWS INDIRECT METHOD At June 30, 2012 (Amounts in thousands of reais) Description 6/30/2012 CPC 18, CPC 19 and CPC 33 Adjustments Consolidated 6/30/2012 Adjusted Net cash provided by operating activities 110,134 48, ,829 Net cash used in investing activities (93,956) (50,996) (144,952) Net cash used in financing activities (124,523) 6,813 (117,710) Net increase (decrease) in cash and cash equivalents (108,345) 4,512 (103,833) Cash and cash equivalents at the beginning of the year 443,356 (14,602) 428,754 Cash and cash equivalents at the end of the year 335,011 (10,090) 324,921 Net increase (decrease) in cash and cash equivalents (108,345) 4,512 (103,833) Page 40 of 89

53 CNPJ N o / / NIRE STATEMENT OF VALUE ADDED At June 30, 2012 (Amounts in thousands of reais) Consolidated 6/30/2012 CPC 18 CPC 19 and CPC 33 6/30/2012 Adjusted Adjustments Revenues Gross sales and services 3,318,588 (68,659) 3,249,929 Construction revenue 144, ,462 Recoverable losses from customers - (Reversal/Constitution) (27,574) 31 (27,543) Inputs acquired from third parties Cost of services (1,340,391) (138,157) (1,478,548) Construction cost (258,259) 138,579 (119,680) Materials, energy, third party and other operating services (144,462) - (144,462) Other (38,299) 38,299 - Gross value added 1,654,065 (29,907) 1,624,158 Depreciation, amortization and depletion (83,038) 1,976 (81,062) Net value added generated by the entity 1,571,027 (27,931) 1,543,096 Value added received through transfer Equity in the results of investees 3,732 5,556 9,288 Finance income 66,751 (275) 66,476 Total value added to distribute 1,641,510 (22,650) 1,618,860 Distribution of value added Personnel and payroll charges (271,826) (1,653) (273,479) Taxes and contributions (1,306,479) 16,149 (1,290,330) Interest and exchange variations (48,741) 7,230 (41,511) Retained earnings/loss for the period (14,464) 924 (13,540) (1,641,510) 22,650 (1,618,860) Page 41 of 89

54 3. Summary of significant accounting policies The main accounting practices adopted by the Group in the preparation of its quarterly information for the quarter ended June 30, 2013 were applied in a manner consistent with those disclosed in the financial statements for the year ended December 31, 2012, and, therefore, should be read in conjunction with those financial statements, except for the presentation in Note Financial risk management 4.1. Financial risk factors The Group's activities expose it to a variety of financial risks: market risk (including currency risk, fair value interest rate risk, cash flow interest rate risk and price risk), credit risk and liquidity risk. The Group's overall risk management program focuses on the unpredictability of financial markets and seeks to mitigate any potential adverse impact on its financial performance Market risk Exchange rate risk This risk arises from the possibility that its subsidiaries may incur losses and cash restrictions due to fluctuations in the exchange rates, increasing the liability balances denominated in foreign currency. The subsidiary Celesc D is exposed in its operating activities to the exchange variation in the purchase of electric energy from Itaipu. The compensation mechanism (CVA) protects the companies from possible losses. However, this compensation will take place only with the consumption and resulting billing of energy that occurred after the subsequent tariff adjustment, in which such losses have occurred. Decree 7,945, of March 7, 2013, established that the full or partial amount of the positive balances accumulated by CVA, related to the System Service Charges and the energy purchased for resale (CVA ESS and Energy), would be transferred with funds from the CDE, upon tariff adjustment or review Cash flow and fair value interest rate risk This risk arises from the possibility of the Group incurring losses due to interest rate or other debt indexing unit fluctuations that could increase its interest expense on borrowings and financing obtained in the market or that could reduce interest income on the Group s financial investments. The Group has no derivative agreements to cover this risk Credit risk This risk arises from the possibility that the Group may incur losses as a result of difficulties in collecting amounts billed to its consumers, concessionaires and licensees. To reduce this type of risk and assist in its management, the Company monitors consumer receivables by carrying out several collection actions, including the interruption of supply if the consumer fails to make payment. In the case of consumers, the credit risk is low in view of the large dispersion of the portfolio. Page 42 of 89

55 4.4. Liquidity risk Cash flow forecasting is performed in the operating areas of the Group and aggregated by the Finance Department. Group Finance monitors rolling forecasts of the Group's liquidity requirements to ensure it has sufficient cash to meet operational needs Surplus cash held by the operating entities in excess of the balance required for working capital management is transferred to the Group Treasury, which invests this surplus cash in interest-earning current accounts, time deposits, money market deposits and marketable securities, choosing instruments with appropriate maturities or sufficient liquidity to provide sufficient margins as determined by the above-mentioned forecasts. The table below analyzes the Group's non-derivative financial liabilities into relevant maturity groupings, based on the remaining period from the balance sheet date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows Operational risks Consolidated Description Less than one Between one and five year years Over five years CDI (%) At December 31, 2012 Borrowings - per balance sheet 81, ,639 36,407 Borrowings - undiscounted 84, ,645 53,173 Trade payables 703, CDI 1 (%) At June 30, 2013 Borrowings - per balance sheet 176, ,121 36,875 Borrowings - undiscounted 183, ,015 55,524 Debentures - per balance sheet 2, , ,015 Debentures - undiscounted 3, , ,597 Trade payables 546, Electric energy shortages The Brazilian Electric Energy System is predominantly supplied by hydroelectric generation plants. A prolonged period of insufficient rain during the wet season reduces the water volume in the reservoirs of these plants, consequently causing an increase in the cost of electric energy purchases in the short-term market, as well as an increase in the amounts of System Charges as a result of the dispatch from thermal power plants. In an extreme situation, an energy rationing program could be adopted, which would imply revenue reduction. However, considering the current levels of the reservoirs and the latest simulations made, the Brazilian Electric Energy System Operator (ONS) does not foresee a new rationing program within the next years. 1 Future yield curve BM&F DI 1 FUT V13 (closing on 7/22/2013) Page 43 of 89

56 Non-renewal of concession risk The Group has concessions for the exploration of the generation, transmission and distribution of electric energy and gas distribution services. The Company filed the request for extension on September 18, 2012 for the concession of contract 56/1999, of Celesc D, as permitted by MP 579/2012, converted into Law 12,783/2013 and started to be regulated by Federal Decree 7,891, of January 23, The Company s management considers that the risk of non-extension of the concession of the Electric Energy Distribution is remote. For contract 55/1999 of generation of energy, the Company opted for the non-renewal Additional sensitivity analysis required by the Brazilian Securities Commission (CVM) The sensitivity analysis table of the financial instruments shown below discloses the risks that could generate material variations to the Company's results, with the most probable scenario (Scenario I) evaluated by management, considering a three-month horizon when the next financial information containing such analysis will be disclosed. In addition, two other scenarios (Scenarios II and III) are presented, as required by CVM Instruction 475, of December 17, 2008, based on a 25% and 50% deterioration in the risk variables, respectively. The sensitivity analysis presented relating to the balances at June 30, 2013 considers changes in relation to a determined risk, with all other variables associated with other risks being maintained constant, in the balances as at September 30, Assumptions Effects on profit and loss accounts Balance Probable scenario (Scenario I) (Scenario II) Consolidated (Scenario III) CDI (%) Financial investments 403,591 34,426 43,033 51,639 Non-current receivables 47,355 4,039 5,049 6,059 Debentures (-) (300,833) (25,661) (32,076) (38,492) IGP-M 2 (%) Indemnifiable assets (concession) 2,198, , , , Capital management The Group's objectives when managing its capital are to safeguard its ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. 2 IGPM General Market Price Index Page 44 of 89

57 In order to maintain or adjust its capital structure, the Group could, for example, revise the dividend payment policy, return capital to shareholders, issue new shares, or sell assets to reduce debt. Consistent with others in the industry, the Group monitors capital on the basis of the gearing ratio. This ratio is calculated as net debt divided by total capital. Net debt is calculated as total borrowings (including current and non-current borrowings) less cash and cash equivalents. Total capital is calculated as equity plus net debt. Consolidated June December Description 30, 31, Total borrowings 437, ,110 Debentures 300,833 - Less: Cash and cash equivalents (473,303) (172,740) Net debt 264, ,370 Total equity 1,714,481 1,777,333 Total capital 1,979,078 1,942,703 Gearing ratio - % 13.37% 8.51% 4.7. Fair value estimation The carrying values of trade receivables, less the impairment provision, and payables are assumed to approximate their fair values. The fair values of financial liabilities for disclosure purposes are estimated by discounting the future contractual cash flows at the current market interest rate that is available to the Group for similar financial instruments. The Group adopted CPC 46 for financial instruments that are measured in the balance sheet at their fair value. This requires the disclosure of fair value measurements, by level, of the following fair value measurement hierarchy: Quoted prices (unadjusted) in active markets for identical assets or liabilities to which the company may have access on the measurement date (Level 1). Page 45 of 89

58 Inputs other than quoted prices included within Level 1 that are observed, either directly or indirectly (Level 2). Unobservable data for assets or liabilities (Level 3). The following table presents the Group's assets that were measured at fair value as at June 30, The Group did not have liabilities measured at fair value at this reporting date. Consolidated Description Level 3 Total balance Assets Financial assets at fair value through profit or loss Shares 54,981 54,981 Available-for-sale financial assets Indemnifiable assets (concession) 2,495,836 2,495,836 Other Total assets 2,551,034 2,551,034 The following table presents the Group's assets measured at their fair value as at December 31, Consolidated Description Level 1 Level 3 Total balance Assets Financial assets at fair value through profit or loss Government securities 16,343-16,343 Shares - 54,981 54,981 Available-for-sale financial assets Indemnifiable assets (concession) - 2,390,674 2,390,674 Other Total assets 16,343 2,445,872 2,462,215 The fair value of financial instruments traded in active markets (such as securities held for trading and available for sale) is based on quoted market prices at the balance sheet date. A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm's length basis. The quoted price used for the financial assets held by the Group is the current bid price. These instruments are included in Level 1. The fair values of financial instruments that are not traded in an active market are determined by using valuation techniques. These valuation techniques maximize the use of observable market data, where available, and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in Level 2. If one or more of the significant inputs is not based on observable market data, the instrument is included in Level 3. Page 46 of 89

59 Specific valuation techniques used to value financial instruments include: Quoted market prices or quotes from financial institutions or brokers for similar instruments Other techniques, such as discounted cash flow analysis, are used to determine fair value for the remaining financial instruments. 5. Financial instruments by category The table below presents Financial Instruments by Category as at June 30, 2013: Description Assets at fair value through profit or loss Loans and receivables Financial liabilities at amortized cost Consolidated Assets Cash and cash equivalents - 473, ,303 Shares 54, ,981 Indemnifiable assets (concession) - - 2,495,836-2,495,836 Trade receivables - 1,270, ,270,992 Other ,981 1,744,295 2,496,053-4,295,329 Liabilities Trade payables , ,637 Borrowings , ,067 Debentures 300, , ,284,537 1,284,537 Total The table below presents Financial Instruments by Category as at December 31, 2012: Description Assets at fair value through profit or loss Loans and receivables Availablefor-sale Availablefor-sale Financial liabilities at amortized cost Consolidated Assets Cash and cash equivalents - 172, ,740 Government securities 16, ,343 Shares 54, ,981 Indemnifiable assets (concession) - - 2,390,674-2,390,674 Trade receivables - 1,565, ,565,058 Other ,324 1,737,798 2,390,891-4,200,013 Liabilities Trade payables , ,281 Borrowings , , ,041,391 1,041,391 Total Page 47 of 89

60 6. Credit quality of financial assets The credit quality of financial assets is assessed by reference to internal credit ratings: Consolidated Description June 30,2013 December 31, 2012 Trade receivables Group 1 - Customers with no payment delays 585, ,371 Group 2 - Customers with average delays from 01 to 90 days 107, ,932 Group 3 - Customers with average delays of over 91 days 577, ,755 1,270,992 1,565,058 All other financial assets held by the Group, especially current accounts and financial investments, are considered high quality and presenting no indications of impairment. 7. Cash and cash equivalents Cash equivalents are maintained to meet the short-term cash commitments and not to other purposes. The Group considers cash equivalents a financial investments with immediate convertibility at a known cash amount. Description June 30, 2013 Parent company Consolidated December June December 31, 30, 31, Cash at banks and on hand 2,148 1,216 69,712 47,852 Short-term marketable securities 3 21,395 36, , ,888 23,543 37, , ,740 The Group's balance of short-term marketable securities increased at June 30, 2013 because of the issue of Debentures (see Note 20). 8. Marketable securities Non-current assets held for sale are measured based on the lower of carrying amount and fair value and are not depreciated or amortized. 3 Short-term marketable securities are readily convertible into a known amount of cash, and are therefore subject to an immaterial risk of change in value. These securities comprise Bank Deposit Certificates (CDBs), with an average yield equivalent to 100% of the Interbank Deposit Certificate (CDI) rate. Page 48 of 89

61 Description June 30, 2013 Parent company Consolidated December 31, June 30, December , 2012 Held-for-trading Government securities ,343 Casan shares 4 54,981 54,981 54,981 54,981 Available-for-sale Other investments ,198 55,198 55,198 71,541 Current ,343 Non-current 55,198 55,198 55,198 55, Companhia Catarinense de Águas e Saneamento - Casan The Company owns 55,364,810 Common Shares (ON) and 55,363,250 Preferred Shares (PN), representing 15.48% of Casan's share capital. As it does not have significant influence over Casan, the Company measured its equity interest at fair value. Since Casan s shares traded in the stock exchanges have no liquidity, the Company decided to establish through consistent bases accepted by the market a new criterion of valuation of this investment, adopting the discounted cash flow method. Accordingly, the Company determined Casan s fair value based on the economic and financial information of Casan. The historical cost of acquisition of Casan's shares is R$ 110,716. In 2012, based on the discounted cash flows, in the Company's finance result it was recognized the provision for fair value losses, in the amount of R$55,735, resulting in the fair value of R$54,981 at December 31, Trade receivables a) Consumers, concessionaires and licensees Consolidated Description Overdue Overdue June December Balances not up to for more 30, 31, yet due 90 days than 90 days Consumers Residential 143,469 50,786 56, , ,499 Industrial 150,949 27, , , ,486 Commerce, services and other 90,561 17,927 59, , ,233 Rural 21,004 3,662 8,065 32,731 44,039 Government 17,331 1,537 32,382 51,250 62,919 Public lighting 11, ,088 27,147 29,818 Utilities 9, ,204 12, , , ,796 1,108,790 1,343,609 Supply to other concessionaires Concessionaries and permittees 34,945 1,426 1,998 38,369 55,495 Transactions through CCEE (i) 115, , ,653 Other receivables (8,724) 4,636 12,748 8,660 15, ,394 6,062 14, , ,449 4 Companhia Catarinense de Águas e Saneamento - Casan Page 49 of 89

62 Description Balances not yet due Consolidated Overdue Overdue June December up to for more 30, 31, 90 days than 90 days , , ,542 1,270,992 1,565,058 Recoverable losses from customers (ii) (485,673) (474,252) 785,319 1,090,806 Current 737, ,364 Non-current 47, ,442 i) Transactions through CCEE The amount refers to the sale of energy in the free market, through the Electric Energy Trade Chamber (CCEE), and through Decree 7,945/13 an increase of R$32,354 thousand. ii) Unrecoverable losses with customers The breakdown, by consumer class, is as follows: Consolidated Description June 30, 2013 December 31, 2012 Consumers Residential 56,911 71,900 Industrial 181, ,293 Textile (b.1) 134,686 96,131 Commerce, services and other 56,061 60,154 Rural 5,151 5,682 Government 31,789 32,417 Public lighting 14,079 13,779 Utilities Concessionaires and licensees 1, Other 3,474 3, , ,252 Current 350, ,252 Non-current 134,686 - b) Changes Consolidated Description Amount At December 31, ,252 Provision recorded in the period 43,948 Trade receivables written-off (32,527) At June 30, ,673 b.1) Unrecoverable losses from the textile sector In 2009, Celesc Distribuição S.A. implemented a debt recovery action plan for certain companies in the textile sector, among which were Buettner S.A., Companhia Industrial Schlösser S.A., Fábrica de Tecidos Carlos Renaux S.A. and TEKA - Tecelagem Kuehnrich. Page 50 of 89

63 In 2011, Buettner S.A. and Companhia Industrial Schlösser S.A. filed for reorganization, and based on the probability that the recovery of these amounts is remote Celesc D provisioned a total of R$18,231 in 2011 and R$16,888 in 2012, which represents the total of the credit that Celesc has with those companies. In 2012, Fábrica de Tecidos Carlos Renaux S.A. also filed a receivership; however it presented a courtsupervised reorganization plan, demonstrating that it can pay its debt with Celesc D. On July 15, 2013, the Judicial Power of the State of Santa Catarina, Jurisdiction of Brusque, Commercial Court, adjudicated Fábrica de Tecidos Carlos Renaux S.A. bankrupt. Therefore, at June 30, 2013, the Company set up a provision of R$42,992, which represents the total of this installment. Also in 2012, the industrial consumer Tecelagem Kuehnrich - TEKA filed for reorganization with the District of Blumenau, Santa Catarina. Considering that the reorganization plan has not yet been approved and the probability of receiving this value is remote in the Management's opinion, Celesc D set up a provision of R$ 57,020, related to the total amount of the installments due to it by TEKA. In June 2013, the amounts referring to the provision set up with the textile companies were reclassified into non-current assets. 10. Indemnity assets - concession Consolidated Description June 30, 2013 December 31, 2012 In service 2,198,273 2,088,265 Concession assets - electric energy distribution (a) 2,198,273 2,088,265 Under construction 297, ,409 Concession assets - electric energy distribution (a) 297, ,409 Total 2,495,836 2,390,674 Non-current 2,495,836 2,390,674 The electric energy distribution and transmission concession agreements of the Group comply with the criteria for the application of Technical Interpretation ICPC 01 (IFRIC12), which addresses the treatment to be applied to concessions. Concession assets refer to receivables from the grantor of the concession (Federal Government), when the Company has an unconditional right, established by contract, to receive cash at the end of a concession as an indemnity arising from contracts for concessions of public services for electric energy transmission and distribution, in respect of investments in infrastructure not recovered through tariffs. These financial assets are classified as "securities held for sale". Page 51 of 89

64 a) Indemnity assets (Concession) - Electric energy distribution Indemnity assets At December 31, ,390,674 Additions 107,531 Write-offs (14,044) Restatement (i) 11,675 At June 30, ,495,836 (i) The Company recognized in result for the six-month period ended June 30, 2013 the amount of R$11,675 thousand, referring to the valuation of the financial asset of concession of electric energy distribution at the New Value of Replacement VNR. 11. Taxes recoverable or for offset Parent company Consolidated Description June 30, 2013 December 31, 2012 June 30, 2013 December 31, 2012 ICMS ,189 47,753 PIS and COFINS ,154 IRPJ and CSLL 7 2,564 2,573 15,619 53,730 Other ,645 2,516 2,649 2,835 59, ,153 Current 2,649 2,835 39,484 92,093 Non-current ,275 14, Other receivables The amount to be transferred by Eletrobrás to Celesc D, in one sole installment in September 2013, for the coverage of the positive result of the Memorandum Accounts of Variation of Items from Portion A CVA estimated on the energy purchase and ESS charge, is R$569.5 million. Funds from CDE for the coverage of CVA CVA Power purchased 513,707 CVA ESS 55,800 Total 569,507 5 Valued-added Tax on Sales and Services (ICMS) 6 Social Integration Program (PIS) and Social Contribution on Revenues (COFINS) 7 Corporate Income Tax (IRPJ) and Social Contribution on Net Income (CSLL) Page 52 of 89

65 13. Related-party transactions a) Transactions and balances Parent company Other Description receivables from related parties At December 31, 2012 Government of the State of Santa Catarina Underground network (i) 4,262 SC Parcerias S.A.(ii) 32,210 36,472 At June 30, 2013 Government of the State of Santa Catarina Underground network (i) 4,262 SC Parcerias S.A.(ii) 21,887 26,149 Parent company Finance Description income At June 30, 2012 Government of the State of Santa Catarina Loan to the State Treasury 324 SC Parcerias S.A.(ii) 2,839 3,163 At June 30, 2013 Government of the State of Santa Catarina - SC Parcerias S.A.(ii) 1,703 1,703 Consolidated Description Taxes payable Taxes for offset Sales receivable Other receivables from related parties Other payables to related parties At December 31, 2012 Government of the State of Santa Catarina 45,005 47,753 8, Underground network (i) ,262 - SC Parcerias S.A.(ii) ,210 - Celos ,538 45,005 47,753 8,710 36,472 14,538 At June 30, 2013 Government of the State of Santa Catarina 54,911 41,189 3, Underground network (i) ,262 - SC Parcerias S.A.(ii) ,887 - Celos ,812 54,911 41,189 3,680 26,149 9,812 Page 53 of 89

66 Consolidated Description Taxes - revenue deductions 8 Sales revenue 9 Finance income At June 30, 2012 Government of the State of Santa Catarina 682,120 25,043 - Loan to the State Treasury SC Parcerias S.A.(ii) - - 2, ,120 25,043 3,163 At June 30, 2013 Government of the State of Santa Catarina 570,288 20,424 - SC Parcerias S.A.(ii) - - 1, ,288 20,424 1,703 (i) Underground network In 1995, the Company signed an agreement for technical cooperation with the Government of the State of Santa Catarina and the Municipal Government of Florianópolis to implement an underground electric energy network in downtown Florianópolis. The outstanding amount reflects the amount to be transferred by the State of Santa Catarina to Celesc and is currently being renegotiated. The Company is seeking alternatives together with the Government of the State of Santa Catarina (State Finance Secretariat), to settle this debt. (ii) SC Parcerias S.A. This receivable arose from a Debt Acknowledgment, Assumption and Installment Payment Document signed on April 30, 2008, and was payable in 24 monthly installments, as from October 31, On the signature of the 1st Amendment to the Debt Acknowledgment, Assumption and Installment Payment Document in January 2011, the remaining amount of the debt was renegotiated for settlement in 42 monthly installments, with the first payment due on January 31, The debt balance is subject to interest at the rate of 1% per month. The installments referring to the 1st Amendment are being paid promptly by SC Parcerias. 8 Transactions involving taxes refer to ICMS on electric energy sales and were carried out pursuant to specific legislation. 9 Sales revenue refers to the sale of electric energy to the State Government effected under conditions similar to those utilized in transactions with unrelated parties, considering that the price of the electric energy is defined by ANEEL through a resolution referring to the annual tariff adjustment of the Company. Page 54 of 89

67 b) Remuneration of the key management personnel The management remuneration (Board of Directors, Statutory Audit Committee and Executive Board) is presented below: Parent Consolidated company June June June June Description 30, 30, 30, 30, Management Fees 3,250 3,107 3,251 3,549 Profit sharing Social charges Other ,379 3,921 4,389 4, Investments in subsidiaries and associates Description June 30, 2013 Parent company December 31, 2012 June 30, 2013 Consolidated December 31, 2012 Subsidiaries Celesc D 1,134,895 1,219, Celesc G 284, , ,419,090 1,467, Jointly-controlled subsidiaries SCGÁS 81,646 78,876 81,646 78,876 ECTE 36,886 36,448 36,886 36, , , , ,324 Associated companies DFESA 27,209 32,535 27,209 32,535 SPEs ,634 20,203 Cubatão 3,353 3,353 3,353 3,353 (-) Provision for loss on investment (3,353) (3,353) (3,353) (3,353) 27,209 32,535 56,843 52,738 1,564,831 1,615, , , Special Purpose Entity Page 55 of 89

68 a) Information on investments Description Thousands of shares held by the Company s interest Company Common Share capital Voting capital Adjusted equity Total assets Parent company Adjusted net profit/loss At June 30, 2013 Celesc D 630, % 100% 1,134,895 5,063,107 (84,614) Celesc G 43, % 100% 284, ,545 25,229 ECTE 13, % 30.88% 119, ,795 16,668 SCGÁS 45,476 17% 51% 214, ,129 20,585 Dfesa 153, % 23.03% 118, ,785 16,878 Cubatão 1,600 40% 40% 1,649 5,620 (7) At December 31, 2012 Celesc D 630, % 100% 1,219,509 4,665,693 (135,659) Celesc G 43, % 100% 247, ,821 (70,380) ECTE 13, % 30.88% 118, ,362 40,574 SCGÁS 45, % 51.00% 199, ,539 23,609 Dfesa 153, % 23.03% 141, ,994 35,385 Cubatão 1, % 40.00% 1,649 5,620 (7) Consolidated Description Thousands of shares held by the Company s interest Company Common Share capital Voting capital Adjusted equity Total assets Adjusted net profit/loss At June 30, 2013 ECTE 13, % 30.88% 119, ,795 16,668 SCGÁS 45,476 17% 51.00% 214, ,129 20,585 Dfesa 153, % 23.03% 118, ,785 16,878 Cubatão 1,600 40% 40% 1,649 5,620 (7) Rondinha Energética S.A. 15, % 32.50% 55,288 70,531 (138) Painel Energética S.A. 4, % 32.50% 5,464 5,463 (14) Campo Belo Energética S.A. 1,350 30% 30% 4,021 6,654 (28) Cia Energética Rio das Flores 7,205 25% 25% 26,587 49,033 (687) Xavantina Energética S.A % 40% 2,489 2,551 - At December 31, 2012 ECTE 13, % 30.88% 118, ,362 40,574 SCGÁS 45, % 51.00% 199, ,539 23,609 Dfesa 153, % 23.03% 141, ,994 35,385 Cubatão 1, % 40.00% 1,649 5,620 (7) Rondinha Energética S.A. 9, % 32.50% 27,783 28,630 (314) Painel Energética S.A. 4, % 32.50% 5,408 5,457 (34) Campo Belo Energética S.A. 1, % 30.00% 4,015 6,648 (29) Cia Energética Rio das Flores 5, % 25.00% 24,712 52, Xavantina Energética S.A % 40.00% 2,490 2,517 - Page 56 of 89

69 b) Changes in investments Parent company Description Celesc D Celesc G ECTE SCGÁS DFESA Total At December 31, ,219, ,966 36,448 78,876 32,535 1,615,334 Capital increases - 11, ,000 Dividends credited - - (4,707) - (9,212) (13,919) Amortization of goodwill (733) - (733) Equity in the results of investees (84,614) 25,229 5,145 3,503 3,886 (46,851) At June 30, ,134, ,195 36,886 81,646 27,209 1,564, Property, plant and equipment a) Analysis of the balance Description Land Reservoirs, dams and water mains Buildings and construction Machinery and equipment Other Construction in progress Consolidated Total At December 31, ,202 76,655 2,942 18, , ,293 Cost 20, ,021 10,132 65, , ,091 Provision for losses (10,834) (89,069) - (20,926) - - (120,829) Accumulated depreciation - (19,297) (7,190) 25,819 (663) - (52,969) At December 31, ,202 76,655 2,942 18, , ,293 Additions ,754 9,754 Write-offs (622) (622) Depreciation - (19,292) (732) (4,798) (83) - (24,905) Realization of provision for losses - 11, , ,081 Transfers - (4) (4) - At June 30, ,202 68,461 2,618 16, , ,601 Cost 9, ,017 10,132 65, , ,392 Provision for losses - (77,967) 408 (18,376) 21 (95,914) Accumulated depreciation - (38,589) (7,922) (30,617) (748) - (77,877) At June 30, ,202 68,461 2,618 16, , , Intangible assets Parent company December June Description 31, Amortization 30, ECTE Concession Agreement 8,523 (30) 8,493 Page 57 of 89

70 Consolidated Concession agreements (a) Description Celesc D Software acquired Goodwill Total At December 31, ,953 2,721 8, ,197 Total cost 933,846 2,721 14, ,815 Accumulated amortization (569,893) - (5,725) (575,618) At December 31, ,953 2,721 8, ,197 Additions 14,960 1,104-16,064 Write-offs (2,737) - - (2,737) Amortization (76,988) (272) (30) (77,290) At June 30, ,188 3,553 8, ,234 Total cost 946,069 3,825 14, ,142 Accumulated amortization (646,881) (272) (5,755) (652,908) At June 30, ,188 3,553 8, ,234 The goodwill arising from the acquisition of SCGÁS and ECTE is being amortized over the term of the public utility concessions of these companies. a) Concession agreements In conformity with Technical Interpretation ICPC 01, Accounting for Concessions, the portion of infrastructure that will be utilized during the concession, comprised of electric energy distribution assets, net of consumer shares (special obligations), where applicable, was recorded in intangible assets. ANEEL, in conformity with Brazilian regulations, is responsible for establishing the economic useful lives of the concession assets in the electric energy sector, and for determining a procedure for the periodic review of these rates. The rates established by the regulator are utilized in the tariff revision processes and in the calculation of the indemnity at the end of the concession period. Therefore, the rate used as a basis for the estimate and amortization of the intangible asset was 3.75% in the last tariff review (August 2012). 17. Income Tax (IRPJ) and Social Contribution on Net Income (CSLL) a) Analysis of deferred income tax and social contribution, net Description Consolidated Deferred tax assets Deferred tax liabilities Net June 30, 2013 December 31, 2012 June 30, 2013 December 31, 2012 June 30, 2013 December 31, 2012 Temporary differences Provision for contingencies 115,262 95, ,262 95,119 Provision for losses on assets 72,843 93, ,843 93,627 Post-employment benefits 325, , , ,979 Deemed cost ,285 70,510 (62,285) (70,510) Deferred income tax and social contribution on tax loss 33,745 33, ,745 33,745 CDE Transfer ,633 - (193,633) - Other provisions 94,959 92, , ,483 (37,128) (21,189) 642, , , , , ,771 Page 58 of 89

71 June 30, 2013 Consolidated December 31, 2012 Assets 279, ,175 Liabilities (24,968) (28,404) Deferred tax assets, net 254, ,771 b) Reconciliation of the deferred and current income tax and social contribution The reconciliation between income tax and social contribution expense at the nominal and effective rates is shown below: Description June 30, 2013 Parent company June 30, 2012 June 30, 2013 Consolidated June 30, 2012 Profit before IRPJ and CSLL (62,852) 13, ,250 13,540 Combined IRPJ and CSLL standard rate 34% 34% 34% 34% IRPJ and CSLL (21,370) 4,604 51,765 4,604 Permanent additions and deductions Equity in the results of investees 15,929 (6,256) 4,262 (3,276) Tax benefit - - 2,563 1,070 Tax incentive Interest on capital Non-deductible provisions - - (1,199) - Non-deductible fines - - 6, Management remuneration CDE Transfer - - (193,633) - Other additions/deductions 5,289 1,483 (85,203) (11,504) - - (215,102) (6,815) Current - - 3,425 7,032 Deferred ,677 (217) - - (215,102) 6,815 Effective rate 0% 0% % 50.33% 18. Trade payables Description June 30, 2013 Consolidated December 31, 2012 Electric energy 482, ,165 Charges for the use of the electric energy network 25,718 55,048 Material and services 38,684 75, , ,281 Page 59 of 89

72 19. Borrowings The borrowing agreements are mainly collateralized by the receivables of the Companies. Description Annual interest rate and commissions % June 30, 2013 Consolidated December 31, 2012 Bank loans (a) 7.55 p.a. 200, ,682 Eletrobrás (b) 5.00 p.a. 198, ,260 Finame (c) 2.5 to 8.7 p.a. 38,530 38, , ,110 a) Bank loans Current 176,072 81,064 Non-current 260, ,046 For the purpose of meeting Celesc D's requirements, the Board of Directors authorized, at the meeting held on October 17, 2012, the raising of funds for working capital in the amount of R$ 110 million. The loan is subject to an interest rate of 7.55% p.a., and is repayable in 18 months, with a grace period of 12 months. This agreement is collateralized by receivables and has been approved by ANEEL. On January 17, 2013, the Board of Directors authorized the raising of funds for the working capital of Celesc D in the amount of R$ 89 million. The loan is subject to an interest rate of 7.55% p.a., and is repayable in 24 months, with a grace period of 15 months. b) Eletrobrás The amounts contracted from the Brazilian Electricity Company (Eletrobras) are destined, among other utilizations, to the rural electrification and other programs, using funds from the Global Reversion Reserve (RGR) and the Eletrobras Financing Fund. In general, these agreements have a grace period of 24 months, are repayable in periods of 60 months, with some period exceeding 96 months, are subject to an interest rate of 5% p.a. plus an administration fee of 2% p.a., and are collateralized by receivables. The contracts have been approved by ANEEL. c) Finame The loan contracted was destined to the purchase of machinery and equipment of Celesc D and has interest rates from 2.5% p.a. to 8.7% p.a. As approved by ANEEL, the receivables of Celesc D are pledged as collateral in the event of default Composition of long-term maturities The maturities of non-current amounts are as follows: Page 60 of 89

73 Consolidated June December Description 30, 31, From one to five years 242, ,963 Over five years 18,061 19, , , Debentures The issue of 30 thousand debentures non-convertible into shares at the unit nominal value of R$10 thousand, for legal purposes and effects, was on May 15, It matures over 72 months as from the issue date, therefore its maturity will be on May 15, The amortization will be in three annual and consecutive installments, the first of which payable as from the 48 th month after the issue date, that is, on May 15, 2017, and the remuneration will be paid in semi-annual and consecutive installments, with no grace period, as from the issue date. The funds from this issue are destined exclusively for reinforcement of the working capital and realization of investments. Debentures will be entitled to the payment of interest corresponding to 100% of the accumulated variation of the daily average rates of Interbank Deposits (DI), over extra-group, expressed in percentage per annum, on the basis of 252 business days, calculated and disclosed on a daily basis by the Clearing House for the Custody and Financial Settlement of Securities (CETIP), plus a surtax or spread of 1.30%. Debentures have a covenant that defines the presentation of a ratio between Net Debt/EBITDA above 2, as from Description Current Consolidated Local currency Non-current At December 31, New borrowings - 300,000 Monetary restatement 2,978 - Transfers (46) 46 Costs on the issue of debentures (319) (1,826) At June 30, , ,220 Page 61 of 89

74 21. Taxes and contributions a) Composition Description June 30, 2013 Parent company Consolidated December June December 31, 30, 31, ICMS ,911 45,005 PIS and COFINS ,588 22,747 Tax Recovery Program (REFIS) 908 1, ,786 IRPJ and CSLL - - 5,190 10,921 INSS payable in installments - - 2,819 3,150 Other ,095 6,157 1,020 2, ,511 89,766 Current 1,020 1, ,511 89,725 Non-current Regulatory charges Description June 30, 2013 Consolidated December 31, 2012 Energy Efficiency Program (PEE) 165, ,818 Emergency Capacity Charge (ECE) 50,348 53,329 Fuel Consumption Account (CCC) - 12,609 Research and Development (R&D) 68,522 68,104 Energy Development Account (CDE) 4,838 17,323 Consumer charges payable - 2,336 Global Reversion Reserve (RGR) Other 1,484 1, , ,075 Current 80, ,891 Non-current 210, , Provision for contingencies and judicial deposits On the financial statement dates, the Company had the following liabilities and corresponding judicial deposits related to contingencies: Page 62 of 89

75 Parent company Description Judicial deposits Provision for contingencies June December June December 30, 31, 30, 31, Contingencies: Tax 2,154 2,182 1,263 1,263 Regulatory 6,627 6,627 6,627 6,627 Judicially frozen assets ,899 8,809 7,890 7,890 Consolidated Description Judicial deposits Provision for contingencies June December June December 30, 31, 30, 31, Contingencies: Tax 3,782 3,722 29,522 29,525 Labor 55,474 61,118 76,324 44,822 Civil 29,412 28, , ,734 Regulatory 46,405 46,405 44,813 35,564 Judicially frozen assets , , , ,645 The changes in the provision for contingencies and judicial deposits were as follows: Description Judicial deposits Parent company Consolidated Provision for Provision for Judicial deposits contingencies contingencies At December 31, ,809 7, , ,645 Additions 118-6,096 77,609 Write-offs (28) - (10,528) (17,188) At June 30, ,899 7, , ,066 The Company is a party to labor, civil, tax and regulatory lawsuits in progress, and is discussing such matters at the administrative and judicial levels, which, when applicable, are supported by judicial deposits. The provisions for probable losses arising from these lawsuits are estimated and periodically adjusted by management, supported by the opinion of its internal and external legal advisors. The nature of the contingencies can be summarized as follows: a) Tax contingencies These contingencies relate to federal, state and municipal taxes. b) Labor contingencies These contingencies refer to claims filed by current and former employees of the Group and service providers related to termination amounts, salaries, classification of functions and other matters. The main increase in the labor provisions during the year refers to the lawsuit filed by the Public Prosecution Office against Celesc D in respect to outsourcings. The lawsuit is in the fact-finding phase and amounts to R$30 million. The internal legal advisors of Celesc D understand that it is probable that the lawsuit will have an unfavorable outcome. Page 63 of 89

76 c) Civil contingencies These contingencies relate to lawsuits filed by consumers (industrial class action), demanding the reimbursement of amounts paid on account of the increase in electric energy tariffs, based on Ordinances 38, of February 27, 1986, and 45, of March 4, 1986, of the National Department of Water and Electricity (DNAEE), during the government's "Cruzado" economic plan. Celesc D recorded a provision which was considered to be sufficient to cover the expected losses from lawsuits of this nature. As regards the effect on subsequent years, referred to as a "Cascading Effect", it is not currently possible to evaluate the possible decisions of the Judiciary Branch or to estimate their effects. Provisions for several civil lawsuits filed by individuals and legal entities were also set up. Celesc D is a defendant in them with regard to indemnity resulting from failure in the electric energy network (pecuniary damages, pain and suffering and loss of profits), expropriation, power cut (pain and suffering and pecuniary damages), accident (pain and suffering, pecuniary damage and pension), improper register in SERASA/ Credit Protection Service (SPC) (pain and suffering), among others. d) Regulatory contingencies Celesc D was fined by ANEEL in certain administrative proceedings due to the alleged non-compliance with quality standards in relation to the services rendered to consumers and other issues. Celesc D lodged an appeal at the administrative level against the penalties imposed. e) Possible losses not provided for In addition, the Company is a party to tax, labor and civil lawsuits, presented below, for which an unfavorable outcome is regarded as possible by management, based on the opinion of its legal advisors, and for which no provision has been recorded: Description June 30, 2013 Consolidated December 31, 2012 Contingencies: Tax 2,954 2,173 Labor 1,710 3,213 Civil 19,274 15,870 Regulatory 18,877 15,710 42,815 36, Actuarial liability Consolidated June December Obligations recorded 30, 31, Pension plans 1,021,853 1,008,435 Mixed/Transitory plan (a) 1,021,853 1,008,435 Other employee benefits 439, ,955 Page 64 of 89

77 Consolidated June December Obligations recorded 30, 31, Celos Health Plan (b) 117, ,293 Voluntary Termination Plan With Incentives - (PDVI) (c) 24,551 34,882 Voluntary Termination Plan (PDV) (d) 265, ,814 Other benefits (e) 31,773 30,966 1,461,515 1,487,390 Current 100, ,960 Non-current 1,361,117 1,356,430 Celesc D sponsors Fundação Celesc de Seguridade Social ("Celos"), a non-profit pension entity, whose main objective is to grant benefits in addition to those provided by the National Institute of Social Security to the plan participants, mainly its own employees. Because of the current Brazilian economic scenario, of increase in the interest rates, the Company understands that the increase in the discount rate, which could be considered in the calculation of the restatement of the present value of the actuarial liability and the variation in the market value of the related assets would not result in significant effects in the balance of Actuarial liability or in the Company's results for a) Pension plans In January 1997, a new supplementary pension plan was implemented, of a variable contribution type, referred to as the "Mixed Plan", with a view to providing programmed retirement income for new employees. The employees enrolled in the Transitory Plan were offered the opportunity to migrate to the Mixed Plan. This migration occurred in two periods: from May to August 1999 and in February More than 98% of active employees opted for migration. The Mixed Plan has the characteristics of a defined benefit plan for the portion of the mathematical reserve existing on the migration date, and of a defined contribution plan for the contributions made after the migration. The previous defined benefit plan, called the "Transitory Plan", still exists, covering almost exclusively retired participants and their beneficiaries. Celesc D signed an agreement on November 30, 2001 for the payment of 277 additional monthly contributions, bearing interest of 6% per year and restatement based on the General Market Price Index (IGP-M), to cover the actuarial liability of the Mixed and Transitory Plans. In October 2010, an amendment altered the inflation index from the General Market Price Index (IGP-M) to the Amplified Consumer Price Index (IPCA). b) Celos Health Plan ("Plano Celos Saúde") Celesc offers to its current and retired employees a health care plan (medical, hospital and dental care). Page 65 of 89

78 c) Voluntary Termination Plan with Incentives (PDVI) Through Resolution 243, of December 9, 2002, Celesc D approved the Voluntary Termination Plan with Incentives (PDVI), ratified by the Government of the State of Santa Catarina, the purpose of which was to reduce operating costs. This program was implemented in January 2003, with the enrollment of 1,089 employees. By June 30, 2013, Celesc D had settled its obligations to 907 beneficiaries (870 at December 31, 2012). d) Voluntary Termination Plan (PDV) Through Resolution 168, of May 15, 2012, Celesc D approved the Workforce Adequacy Plan (PAQ). of which the Voluntary Termination Plan (PDV) is part. This program was implemented in November 2012, with the enrollment, at first, of 734 employees. Up to June 2013, 19 more employees had been included in it, totaling 753. By June 30, 2013, 753 beneficiaries had been terminated from Celesc D (432 at December 31, 2012). By June 30, 2013, Celesc D had settled its obligations to 36 beneficiaries. e) Other benefits These are amounts referring to the disability allowance, funeral grant, natural or accidental death benefit and retirement minimum benefit. 25. Equity a) Share capital The Company's subscribed and paid-up share capital is R$ 1,017,700, represented by 38,571,591 shares with no par value, divided into 15,527,137 registered common shares (40.26%) with voting rights and 23,044,454 registered preferred shares (59.74%). Preferred shares have priority in the payment of noncumulative dividends of 25%. The Company's shareholding structure, in terms of the number of shares held by the shareholders with more than 5% of any share type or class, is as follows: Shareholder Common shares Preferred shares Total Number % Number % Number % Government of the State of Santa Catarina 7,791, ,791, PREVI 5,140, , ,578, Celos 1,092, , ,322, Geração Futuro investment fund 498, ,512, ,011, Centrais Elétricas Brasileiras - Eletrobras* 4, ,142, ,147, Tarpon investment fund - - 5,177, ,177, MCAP Poland FIA - - 2,817, ,817, Other 999, ,725, ,725, Total 15,527, ,044, ,571, Page 66 of 89

79 b) Carrying value adjustments The table below demonstrates the net effect of R$ 3,148 thousand in Net Equity: Carrying value adjustments 3,148 Deemed Cost - Celesc G 120,906 Actuarial liability adjustment - Celesc D (CPC 33) (117,758) c) Diluted earnings or losses per share The calculation of the basic and diluted earnings per share at June 30, 2013 and 2012 was based on the net profit for the period and the weighted average number of outstanding common and preferred shares during the periods presented. At June 30, 2013 and June 30, 2012, the number of shares of the Company did not change. There were no transactions involving common shares or potential common shares between the balance sheet date and the date of completion of this quarterly information. In the quarters ended June 30, 2013 and 2012, the Company did not have instruments convertible into shares that would generate an impact of dilution in earnings per share. 26. Insurance The insurance policies contracted at June 30, 2013 indicate the following levels of coverage: Consolidated Company Line Insured assets Term Insured amount Celesc D Surety Insurance Concessionaire assets and rights to ,000 Celesc D Nominated risks Head Office building to ,360 Celesc D Domestic Transportation Transportation of goods to ,500 Celesc D Nominated risks Substations to ,000 Celesc G Fire/lightning/explosion Plants and substations to ,768 Celesc G Aircraft Crash Plants and substations to ,384 Celesc G Windstorm Plants and substations to ,384 Celesc G Electrical damage Plants and substations to ,768 The risk assumptions adopted, in view of their nature, are not part of the scope of this review of the Quarterly Information, and, consequently, were not reviewed by our independent accountants. 27. Segment information Management has determined the Group's operating segments based on the reports reviewed by the Executive Board to make strategic decisions. Page 67 of 89

80 The presentation of the segments is consistent with the internal reports submitted to the Company's Executive Board, which is responsible for allocating funds to, and evaluating the performance of, the segments. The segment information reviewed by the Executive Board for the quarters ended June 30, 2013 and 2012 was as follows: June 30, 2013 Description Parent company Celesc D Celesc G Consolidation adjustments Total Revenue - 2,321,868 45,683 (870) 2,366,681 Cost of sales - (1,854,636) (16,699) 870 (1,870,465) Gross profit - 467,232 28, ,216 Selling expenses - (107,342) - - (107,342) General and administrative expenses (17,697) (172,346) (4,923) - (194,966) Other income (expenses), net - (80,855) (2,371) - (83,226) Equity in the results of investees (46,851) - (228) 59,385 12,306 Operating profit (64,548) 106,689 21,462 59, ,988 Finance income 2,462 66,052 4,221-72,735 Finance costs (766) (42,242) (465) - (43,473) Net finance result 1,696 23,810 3,756 29,262 Profit (loss) before IRPJ and CSLL (62,852) 130,499 25,218 59, ,250 IRPJ and CSLL - (215,113) 11 - (215,102) Profit (loss) for the quarter (62,852) (84,614) 25,229 59,385 (62,852) Supplementary information Total assets 1,725,312 5,063, ,545 Total liabilities 10,831 3,928,213 35,352 Description Parent company Celesc Distribuição Celesc Geração Adjustments for consolidation At June 30, 2012 Total Revenue - 2,077,252 34,962 (1,338) 2,110,876 Cost of sales - (1,839,282) (8,022) 1,280 (1,846,024) Gross profit - 237,970 26,940 (58) 264,852 Selling expenses - (84,655) (1,166) - (85,821) General and administrative expenses (9,459) (138,970) (6,234) 58 (154,605) Other income (expenses), net - (36,887) (704) - (37,591) Equity in the results of investees 18,401 - (347) (8,766) 9,288 Operating profit 8,942 (22,542) 18,489 (8,766) (3,877) Finance income 5,363 60, ,476 Finance costs (765) (41,325) (154) - (42,244) Net finance result 4,598 19, ,232 Profit (loss) before IRPJ and CSLL 13,540 (3,504) 19,085 (8,766) 20,355 IRPJ and CSLL - (1,139) (5,676) - (6,815) Profit (loss) for the quarter 13,540 (4,643) 13,409 (8,766) 13,540 Supplementary information Total assets 2,184,786 4,355, ,279 Total liabilities 12,100 2,881,467 83,525 Page 68 of 89

81 27.1. Consolidated operating revenue June 30, 2013 Consolidated June 30, 2012 Gross operating revenue Electric energy supply (a) 2,430,807 2,966,652 Electrical energy supply (a) 72,209 77,093 Availability of the electric power grid 111, ,007 Short-term electric power 390,260 - Leases and rentals 22,181 20,861 Service income 1,732 3,208 Other operating revenue 5,101 6,108 Donations and subsidies (i) 133,121 - Construction revenue 122, ,462 3,289,846 3,394,391 Deductions from gross operating revenue Value-Added Tax on Sales and Services (ICMS) (570,288) (684,953) Social Integration Program (PIS) (51,155) (56,419) Social Contribution on Revenues (COFINS) (235,620) (246,308) Services Tax (ISS) (97) (148) Global Reversion Reserve (RGR) (3,498) (24,731) Energy Development Account (CDE) (29,029) (103,939) Fuel Consumption Account (CCC) (12,610) (141,537) Research and Development (R&D) (10,819) (9,800) Energy Efficiency Program (PEE) (10,049) (9,800) Other charges - (5,880) (923,165) (1,283,515) Net Operating Revenue (NOR) 2,366,681 2,110,876 (i) Amount transferred to Eletrobrás, referring to the reimbursement of the discounts on tariffs applicable to the users of the electric energy distribution utilities, according to art. 13, item VII, of Law 10,438, of April 26, 2002, as established by Provisional Measure 605, of January 23, 2013, and in compliance with the provision in art. 3 of Decree 7,891, of January 23, Aneel paid in advance the installments referring to the periods from May to November 2013, in the amount of R$186,369 thousand, which are being recorded in "Other current liabilities" and are allocated to income or loss, as appropriate. Page 69 of 89

82 a) Electric energy supply The analysis of gross revenue from electric energy supply, by consumer class, is as follows: Number of consumers (i) MWh (i) Gross revenue Description 6/30/2013 6/30/2012 6/30/2013 6/30/2012 6/30/2013 6/30/2012 Residential 1,972,755 1,900,579 2,475,423 2,390, ,404 1,013,049 Industrial 94,718 88,311 2,278,208 2,460, , ,514 Commercial 226, ,472 1,758,270 1,718, , ,761 Rural 230, , , , , ,074 Government 20,406 19, , ,985 67,062 82,485 Public lighting , ,956 50,272 59,632 Utilities 2,546 2, , ,335 42,686 48,137 Total supply 2,547,771 2,458,238 7,751,795 7,784,232 2,430,807 2,966,652 Electric energy supply , ,629 72,209 77,093 Total 2,547,833 2,458,291 8,490,816 8,617,861 2,503,016 3,043,745 (i) Information not reviewed Consolidated operating costs and expenses Consolidated operating costs and expenses are comprised as follows: Description Costs of assets and/or services General and administrative expenses Selling expenses Consolidated as at June 30, 2013 Other expenses/ income, net Electric energy purchased for resale (a) 1,476, ,476,310 Personnel (b) 147,563 58,938 18,628 7, ,307 Management - 4, ,389 Actuarial expenses - 64, ,190 Private pension entity (b) 8,317 2,406 1,000-11,723 Material 5,917 2, ,450 Construction cost 122, ,997 Third-party costs and services 30,170 38,285 33, ,658 Depreciation and amortization 86,476 15, ,108 Provisions, net (14,083) - 11,421 60,421 57,759 ANEEL inspection fees ,669 5,669 Financial compensation for use of water resources Other costs and expenses 6,798 8,594 42,353 9,214 66,959 1,870, , ,342 83,226 2,255,999 Total Page 70 of 89

83 Description Costs of assets and/or services General and administrative expenses Selling expenses Consolidated as at June 30, 2012 Other expenses/ income, net Electric energy purchased for resale (a) 1,445, ,445,651 Personnel (b) 147,484 60,833 19,216 1, ,521 Management - 4, ,698 Actuarial expenses - 27, ,369 Private pension entity (b) 8,236 2,617 1,038-11,891 Material 8,579 3, ,853 Construction cost 144, ,462 Third-party costs and services 26,202 31,287 26, ,306 Depreciation and amortization 58,715 21, ,639 Provisions, net ,543 15,271 43,401 ANEEL inspection fees ,476 5,476 Financial compensation for use of water resources Other costs and expenses 6,695 2,022 11,515 13,980 34,212 1,846, ,605 85,821 37,591 2,124,041 Total a) Electric energy purchased for resale Description GWh (i) June 30, GWh (i) June 30, Centrais Elétricas Brasileiras S.A. Eletrobrás 235,627 2, ,292 2,337 Tractebel Energia S.A. 198, ,615 1,418 Centrais Elétricas de Pernambuco S.A. 137, , Termoelétricas Petrobrás S.A. 123, , Companhia Energética de Petrolina CEP 105, , Energética Camacari Muricy S.A. ECM 95, , Furnas Centrais Elétricas S.A. 94, , Arembepe Energia S.A 94, , Cemig Geração e Transmissão S.A. 74, , Companhia Energética Potiguar 70, , Companhia Energética de São Paulo CESP 58, , Copel Geração e Transmissão S.A. 57, , Energética Suape II S.A. 44, , Eletrobrás Termonuclear S.A. 38, Enguia Gen Ba Ltda - Jaguarari 32, , Porto do Pecem Geração de Energia 32, Usina Xavantes S.A - Aruanã 22, , Lages Bioenergética Ltda 20, , Foz do Chapecó Energia AS 16, , Brentech Energia S.A. 16, , Companhia Energética Estreito 15, , Usina Termelétrica de Anápolis Ltda. 15, , UTE Porto do Itaqui Geração de Energia 14, Cia de Ger. Term. de E.E. Eletrobrás CGTEE 11, , Other 134,765 2, ,661 1,000 1,760,298 9,378 1,000,917 9,284 Charges for the use of the electric energy network 273, ,586 - Electric Energy Trade Chamber (CCEE) 82, , Proinfa 56, , Recovery of expenses (697,020) (283,988) , ,476,310 9,566 1,445,651 9,574 (i) Information not reviewed Page 71 of 89

84 b) Personnel and private pension entity Description June 30, 2013 Parent company June 30, 2012 June 30, 2013 Consolidated June 30, 2012 Personnel Remuneration 8,540 5, , ,251 Social charges ,355 50,769 Profit sharing - - 7,205 4,158 Fringe benefits ,347 13,849 Provisions and indemnities ,738 33,394 Other Private pension entity ,723 11,891 8,712 5, , , Finance result Description June 30, 2013 Parent company Consolidated Finance income Income from investments 759 1,575 5,866 13,792 Interest on receivables ,086 Interest on electric energy bills paid in arrears ,409 - Monetary variations ,256 5,576 Financial incentive social fund - - 8,700 8,100 Discounts - suppliers Foreign exchange gain on electric energy sold - 3,353 4,561 Dividends Finance income from VNR ,604 - Other finance income 1,703 2,944 9,510 5,664 2,462 5,363 72,735 66,476 Finance costs Debt charges - - (15,098) (13,549) Monetary variation and increase for payment in arrears of electric energy - - (5,604) - Monetary variations - - (64) (9,537) Amortization of goodwill (763) (763) (763) (763) Research and development and energy efficiency restatement - - (7,748) (10,220) Finance cost from VNR - - (3,929) - Interest and costs with debentures - - (2,978) - Other finance costs (3) (2) (7,289) (8,175) (766) (765) (43,473) (42,244) June 30, 2012 June 30, 2013 June 30, 2012 Finance result 1,696 4,598 29,262 24,232 Page 72 of 89

85 28. Supplementary information on Celesc D Balance sheet Assets June 30, 2013 December 31, 2012 Current assets 1,815,864 1,257,087 Cash and cash equivalents 428, ,357 Marketable securities - 16,343 Trade receivables 730, ,036 Inventories 12,365 14,748 Taxes recoverable 34,742 88,841 Other receivables 610,181 25,762 Non-current assets 3,247,243 3,472,200 Indemnifiable assets (concession) 2,495,836 2,390,674 Trade receivables 47, ,442 Deferred taxes 255, ,379 Taxes recoverable 20,210 13,995 Judicial deposits 126, ,734 Other receivables 3,182 2,023 Intangible assets 299, ,953 Total assets 5,063,107 4,729,287 December 31, June 30, Liabilities Current liabilities 1,317,711 1,286,463 Trade payables 543, ,676 Borrowings 176,072 81,064 Debentures 2,613 - Salaries, labor provisions and payroll charges 106, ,777 Taxes and contributions 94,938 77,640 Regulatory charges 80, ,685 Pension plan 9,812 14,538 Actuarial liability 100, ,960 Other liabilities 202,798 47,123 Non-current liabilities 2,610,501 2,223,247 Borrowings 260, ,046 Debentures 298,220 - Deferred taxes - - Regulatory charges 210, ,184 Actuarial liability 1,361,117 1,356,430 Provision for contingencies 477, ,112 Other liabilities 2,475 2,475 Equity 1,134,895 1,219,577 Paid-up share capital 1,053,590 1,053,590 Carrying value adjustments (117,758) (117,758) Adjustments for adoption of IFRS - 147,308 Retained earnings (accumulated deficit) (84,614) - Revenue reserves 283, ,437 Total liabilities and equity 5,063,107 4,729,287 Page 73 of 89

86 28.2. Statement of operations for the year June 30, 2013 June 30, 2012 Net Operating Revenue (NOR) 2,321,868 2,077,252 Revenue from electric energy services 2,198,871 1,932,790 Construction revenue 122, ,462 Operating costs (1,854,636) (1,839,282) Cost of electric energy services (1,731,639) (1,694,820) Construction cost (122,997) (144,462) Gross operating profit 467, ,970 Operating expenses (360,543) (260,512) Selling expenses (107,342) (84,655) General and administrative expenses (172,346) (138,970) Other operating expenses (80,855) (36,887) Service result 106,689 (22,542) Finance result 23,810 19,038 Finance income 66,052 60,363 Finance costs (42,242) (41,325) Profit before IRPJ and CSLL 130,499 (3,504) IRPJ and CSLL (21,481) (1,139) Current - (417) Deferred (215,113) (722) Profit (loss) for the quarter (84,614) (4,643) Operating revenue June 30, 2013 June 30, 2012 Gross operating revenue Electric energy supply (a) 2,406,772 2,883,109 Provision of electric energy (a) 52,548 56,035 Availability of the electric power grid 112, ,287 Short-term electric power 379,723 - Leases and rentals 22,181 20,919 Service income 1,732 3,208 Taxed service 4,919 5,420 Other operating revenue Donations and subsidies 133,121 - Finance income from indemnity assets - 64,761 Construction revenue 122, ,462 3,236,483 3,355,889 Deductions from gross operating revenue ICMS (566,165) (682,120) PIS (50,365) (56,082) COFINS (231,983) (244,753) ISS (97) (148) Global Reversion Reserve (RGR) (3,498) (24,578) Energy Development Account (CDE) (29,029) (103,939) Fuel Consumption Account (CCC) (12,610) (141,537) Research and Development (R&D) (10,819) (9,800) Energy Efficiency Program (PEE) (10,049) (9,800) Other charges - (5,880) (914,615) (1,278,637) Net Operating Revenue (NOR) 2,321,868 2,077,252 Page 74 of 89

87 a) Electric energy supply The analysis of gross revenue from electric energy supply, by consumer class, is as follows: Number of consumers (i) MWh (i) Gross revenue Description 6/30/2013 6/30/2012 6/30/2013 6/30/2012 6/30/2013 6/30/2012 Residential 1,972,755 1,900,579 2,475,423 2,390, , ,935 Industrial 94,705 88,299 2,183,910 2,335, , ,979 Commercial 226, ,471 1,732,979 1,712, , ,232 Rural 230, , , , , ,863 Government 20,406 19, , ,985 67,062 80,684 Public lighting , ,956 50,272 58,330 Utilities 2,546 2, , ,335 42,686 47,086 Total supply 2,547,757 2,458,225 7,632,206 7,653,279 2,406,772 2,883,109 Provision of electric energy , ,529 52,548 56,035 Total 2,547,804 2,458,271 8,273,948 8,316,808 2,459,320 2,939,144 (i) Information not reviewed Operating costs and expenses Description Costs of assets and/or services General and administrative expenses Selling expenses Other expenses/ income, net June 30, 2013 Electric energy purchased for resale 2,171, ,171,790 Personnel 144,809 46,673 18,628 7, ,288 Management Actuarial expenses - 64, ,190 Private pension entity 8,317 2,406 1,000-11,723 Material 5,888 2, ,401 Construction cost 122, ,997 Third-party costs and services 29,336 33,297 33, ,836 Depreciation and amortization 61,725 15, ,987 Provisions, net ,421 59,244 70,665 ANEEL inspection fees ,578 5,578 Other costs and expenses (690,226) 7,996 42,353 8,591 (631,286) 1,854, , ,342 80,855 2,215,179 Total Description Costs of assets and/or services General and administrative expenses Selling expenses Other expenses/ income, net June 30, 2012 Electric energy purchased for resale 1,445, ,445,395 Personnel 145,843 50,707 19,216 1, ,754 Management Actuarial expenses - 27, ,369 Private pension entity 8,236 2,617 1,038 11,891 Material 8,493 3, ,662 Construction cost 144, ,462 Third-party costs and services 24,956 29,080 26, ,853 Depreciation and amortization 55,286 21, ,210 Provisions, net ,377 15,271 41,648 ANEEL inspection fees ,334 5,334 Other costs and expenses 6,611 3,674 11,515 13,980 35,780 1,839, ,970 84,655 36,887 2,099,794 Total Page 75 of 89

88 29. Supplementary information on Celesc G Balance sheet Assets June 30, 2013 December 31, 2012 Current assets 32,673 14,522 Cash and cash equivalents 21,290 7,514 Trade receivables 8,014 6,500 Inventories Taxes recoverable 2, Other receivables 1, Non-current assets 286, ,299 Taxes recoverable Judicial deposits Deferred taxes - - Investments 29,631 20,203 Property, plant and equipment 253, ,231 Intangible assets 3,553 2,720 Total assets 319, ,821 June December 30, 31, Liabilities and equity Current liabilities 8,563 15,809 Trade payables 2,657 4,196 Taxes and contributions 5,553 10,097 Regulatory charges Related parties 156 1,304 Other liabilities 25 6 Non-current liabilities 26,787 29,047 Deferred taxes 24,968 28,404 Provision for contingencies 1, Equity 284, ,965 Paid-up share capital 123, ,000 Revenue reserves 40, Carrying value adjustments 120, ,872 Retained earnings (accumulated deficit) - - Total liabilities and equity 319, ,821 Page 76 of 89

89 29.2. Statement of income for the year June 30, 2013 June 30, 2012 Net Operating Revenue (NOR) 45,683 34,962 Revenue 45,683 34,962 Operating costs (16,699) (8,022) Cost of electric energy services (16,699) (8,022) Gross operating profit 28,984 26,940 Operating expenses (7,522) (8,451) Selling expenses - (1,166) General and administrative expenses (4,923) (6,234) Other operating expenses (2,371) (704) Equity in the results of investees (228) (347) Service result 21,462 18,489 Finance result 3, Finance income 4, Finance costs (465) (154) Profit before IRPJ and CSLL 25,218 19,085 IRPJ and CSLL 11 (5,676) Current (3,425) (6,615) Deferred 3, Profit (loss) for the quarter 25,229 13, Operating revenue June 30, 2013 June 30, 2012 Gross operating revenue Electric energy supply (a) - Industrial 18,735 17,812 Electric energy supply (a) - Commercial 5, Provision of electric energy (a) 19,661 15,082 Short-term electric energy (a) 10,537 5,976 54,233 39,840 Deductions from operating revenue ICMS (4,123) (2,833) PIS (790) (337) COFINS (3,637) (1,555) Global Reversion Reserve (RGR) - (153) (8,550) (4,878) Net Operating Revenue (NOR) 45,683 34,962 Page 77 of 89

90 a) Electric energy supply Number of consumers (i) MWh (i) Gross revenue Description 6/30/2013 6/30/2012 6/30/2013 6/30/2012 6/30/2013 6/30/2012 Electric energy supply Industrial , ,045 18,735 17,812 Commercial, services and other ,291 5,908 5, Electric energy supply and short-term energy , ,130 19,661 15,082 Short-term electric energy (CCEE) ,898 42,970 10,537 5,976 Total , ,053 54,233 39,840 (i) Information not reviewed Operating costs and expenses Description Costs of assets and/or services General and administrative expenses Selling expenses Other expenses June 30, 2013 Electric energy purchased for resale 2, ,410 Personnel 2,754 3, ,307 Management Material Third-party costs and services ,578 Depreciation and amortization 24, ,121 Financial compensation for use of water resources Provisions, net (14,083) - - 1,177 (12,906) ANEEL inspection fees Other costs and expenses ,699 4,923-2,371 23,993 Total Description Costs of assets and/or services General and administrative expenses Selling expenses Other expenses June 30, 2012 Electric energy purchased for resale 1, ,536 Personnel 1,641 4, ,932 Management Material Third-party costs and services 1, ,025 Depreciation and amortization 3, ,429 Financial compensation for use of water resources ,149 Provisions, net - - 1,166-1,166 ANEEL inspection fees Other costs and expenses ,022 6,234 1, ,126 Total 30. Events after the reporting period 30.1 Grant and transfer of CDE Ratifying Resolution 1,574, of July 30, 2013 ANEEL, through Ratifying Resolution 1,574, of July 30, 2013, ratified the transfer from Eletrobrás to Celesc D, in the accrual period from December 2013 to July 2014, up to the 10th business day of the subsequent month, referring to the discounts on the tariffs applicable to the users of the electric energy distribution utilities, in the monthly amount of R$31.8 million. Page 78 of 89

91 30.2 Celesc D tariff adjustment Monthly amount of the grant of CDE to fund tariff discounts Load - Source with incentives 4,911 Generation - Source with incentives 850 Distribution 15,210 Water, Sewage and Sanitation 963 Rural 9,675 Irrigator/Fish Farmer 192 Total 31,801 ANEEL, through Ratifying Resolution 1,574, of July 30, 2013, ratified the Electric Energy Tariffs (TEs) and the Tariffs for the Use of the Distribution Systems (TUSDs) of the consumers serviced by the area of concession of Celesc D. The tariff adjustment of Celesc D is on average 15.37%, of which 14.50% refer to annual economic tariff adjustment and 0.87% relates to the relevant financial components. The average effect perceived by the consumers of Groups A and B is 13.73%. The tariffs to be adopted by Celesc D from August 7, 2013 to August 6, 2014 are as follows: Subgroup/class Adjustment A1 (230 kv or more) 19.15% A2 (88 to 138 kv) 10.85% A3 (69 kv) 16.62% A3a (30 to 44 kv) 19.80% A4 (2.3 to 25 kv) 14.10% B1 (low tension - Residential and Low-income population) 12.90% B2 (low tension - Rural) 17.98% B3 (low tension - Other classes) 13.00% B4 (low tension - Public lighting) 18.00% Source: ANEEL Page 79 of 89

92 (A free translation of the original in Portuguese) Other information considered relevant by the Company 1. Regulatory assets and liabilities (unaudited) These accounts comprise non-manageable costs, defined as such by ANEEL, included in the account Compensation of the Variation of Costs in "Portion A" (CVA), and not yet transferred to the electric energy supply tariffs. The aforementioned costs integrate the basis for the adjustment of tariffs and are allocated to the statement of operations as the corresponding revenue is billed to the consumers, according to Ordinances 25 and 116, of January 24, 2002 and April 4, 2003, respectively, and supplementary provisions of ANEEL. The accounts are restated based on the interest rate used by the Special System for Settlement and Custody (SELIC). a) Compensation of the variation of costs in "Portion A" (CVA) Consolidated Description December 31, 2012 June 30, 2013 CVA period from 8/8/2011 to 8/7/ ,906 4,001 CVA period from 8/8/2011 to 8/7/ , ,087 Total CVA 164, ,088 Regulatory assets and liabilities Consolidated Description December Additions Write-offs Restatement Amortization June 30, 31, ASSETS Fuel Consumption Account (CCC) 9,051 3, ,722 Energy Development Account (CDE) 12,645 - (4,267) 218 (6,907) 1,689 Electric energy purchased for resale 132, ,814 (513,707) 20,709 (12,821) 180,223 System Service Charges (ESS) 4,766 61,988 (68,000) 1, Use of the basic network 8,023 1,388 (7,742) 10-1,679 Transmission of electric energy from Itaipu (149) 367 Proinfa 10,237 8, (6,895) 12,611 Total 177, ,285 (593,716) 23,043 (26,772) 209,291 Amounts classified in current assets 177, ,873 (593,716) 23,043 (26,772) 97,879 Amounts classified in non-current assets - 111, ,412 LIABILITIES Fuel Consumption Account (CCC) (1,507) - - (34) 1,238 (303) Electric energy purchased for resale (165) - - (4) 136 (33) System Service Charges (ESS) (9,919) (6,387) - (227) 8,152 (8,381) Transmission of electric energy from Itaipu (1,077) - - (25) 886 (216) Total (12,668) (38,799) 27,460 (608) 10,412 (14,203) Amounts classified in current liabilities (12,668) (38,799) 27,460 (608) 10,412 (14,203) Balance of CVA 164, ,486 (566,256) 22,435 (16,360) 195,088 Page 80 of 89

93 (A free translation of the original in Portuguese) Other information considered relevant by the Company b) Other regulatory assets Regulatory assets - Other financed items December 31, 2012 Additions Write-offs Restatements Amortization Consolidated June 30, , (38,516) 18,636 Total 57, (38,516) 18,636 Current 57, (38,516) 18,636 c) Other regulatory liabilities Consolidated Description December June Additions Write-offs Restatements Amortization 31, , 2013 Regulatory liabilities Neutrality - industry charges (28,911) ,781 (4,130) Total (28,911) ,781 (4,130) Current (28,911) ,781 (4,130) 2. Financial indicators 2.1. Equity 2.2. Liquidity Page 81 of 89

94 (A free translation of the original in Portuguese) Other information considered relevant by the Company 2.3. Indebtedness 2.4. Profitability Page 82 of 89

95 (A free translation of the original in Portuguese) Other information considered relevant by the Company 2.5. EBITDA 2.6. Efficiency Page 83 of 89

96 (A free translation of the original in Portuguese) Other information considered relevant by the Company Page 84 of 89