Corporate Governance

Copel has been seeking to improve the implementation of good corporate governance practices. Hence, the Company attempts to follow the model proposed by the Brazilian Institute of Corporate Governance - IBGC.

Concept

Corporate Governance is the management system whereby a company is managed and monitored.

Good governance practices are based on disclosure, fairness, accountability, and compliance towards all stakeholders, which aim at increasing the company’s value and contributing to its perpetuity.

Goals

• To contribute to the Company’s perpetuity, with a long-term view, in pursuit of economic, social and environmental sustainability;

• To improve the relationship and communication with all stakeholders;

• To minimize strategic, operational, and financial risks;

• To increase the Company’s value, making the fund raising strategy feasible.

Principles

Disclosure/Transparency

- More than the "duty to inform", the Management should develop the "wish to inform", and encourage good (spontaneous, honest and fast) internal and external communication;

- Communication should not be restricted to economical-financial performance, but should also contemplate other factors (including intangible factors) which guide the Company’s actions and lead to value creation.

Fairness

- It is characterized by the fair and equitable treatment for all minority groups, both in relation to capital and to other stakeholders, including shareholders, employees, clients, suppliers, society, environment, and government.

- Discriminatory policies or attitudes are completely unacceptable under any circumstances.

Accountability

Corporate governance agents (shareholders, Board of Directors, executive officers, independent audit, and fiscal council) should account for their performance to those who elected them and are fully liable for all the acts they perform during their term of office.

Compliance

- Compliance with the law, long-term vision, sustainability;

- It is a broader view of corporate strategy, contemplating all the relationships with the community (job opportunities, labor force capacity building and diversity, scientific development, improvement of quality of life).

- This principle comprises giving preference to resources (labor and inputs) offered by the local community.

- Officers and members of Board of Directors must work towards the organization’s perpetuity. Consider social and environmental issues when defining the business and operations.

The adoption of these principles and good governance practices result in improved relations with investors, and, at the same time, represent an incentive for managers to make decisions aiming at the society and shareholders’ best interest, causing the market to have a positive perception of the Company, which leads to its perpetuity and value creation for shareholders and investors in general.

Copel has always tried to take part in the actions that aim at strengthening the capital market. It opened its capital in 1994, when it started negotiating its shares on Stock Exchanges. In 1996, it was registered at the Securities and Exchange Commission - SEC- as Level 1ADR - Common Shares. It was listed in the New York Stock Exchange (NYSE) in July, 1997, for the negotiation of Level 3ADR - Preferred Shares, making its successful IPO (“Initial Public Offering”) on that occasion and raising about US$ 570 million.

It started negotiating shares on the Madrid Stock Exchange (Latibex) in June, 2002. Latibex’s goal is to negotiate shares of Latin American companies in Europe, in accordance to Spain’s market rules.

In international terms, Copel assumed its commitment to the other stakeholders by creating its Sustainability Policy, being one of the first Brazilian companies to adopt the principles of the UN Global Agreement, in 2000.

The Sarbanes-Oxley Act

On July 30, 2002, the President of the United States passed the Sarbanes-Oxley Act, in order to react to the scandals in the American corporate atmosphere which had happened in the previous year. This Act reinforces corporative governance rules related to disclosure and financial reports. One of the most important aspects is that Sarbanes-Oxley Act does not exempt non-American companies, but demands that all publicly-held companies with shares listed in the New York Stock Exchange adapt to it.

Requirements for Copel to comply with the Sarbanes-Oxley Act

- Establishment of a code of ethical behavior which reflects the Company’s good-faith, transparency and moral guidelines while carrying out its businesses.

- Creation of the Audit Committee, or adaptation of its Fiscal Council, which is permanent;

- Evidence of the Company’s internal control effectiveness.

Measures Taken

1. The ethical behavior code was duly approved by the Company’s Board of Directors. The Ethical Guidance Council was also installed.

2. The Audit Committee was installed and its internal regulations, which describe this body’s competences in compliance with SEC demands, were approved. Five Audit Committee’s meetings have been held and a Confidential Communication Channel has been created with the objective of receiving information and/or accusation. A Financial Expert was also appointed in the Audit Committee.

3. A Disclosure Committee, was also installed, it is responsible for the approval of all the Company’s information to be disclosed to the capital market (rule 302) and our Relevant Act and Fact Disclosure Policy was established.

4. The major processes which affect our financial statements were mapped and the related risks and internal controls were evaluated and documented. The internal audit, which is subordinate to the Board of Directors, is testing the effectiveness of these internal controls and verifying the existence of action plans for corrections/adjustments, in pertinent cases.

5. The Company’s Share Trading Policy was installed establishing rules for the employees and/or managers who have access to relevant information.

Summary Chart

Sox Requirements	Measures Adopted by Copel	Adoption Date	Further Information
Installment of the Relevant Acts and Facts Disclosure Committee	Installment of the Disclosure committee composed by members of the Executive offices, financial and legal executive officers, etc	June/2002	Relevant Act and Fact Disclosure Policy and Share Trading Policy
Adoption of the Ethical Behavior Code	Adoption of the Ethical Behavior Code, disseminated to all employees and available at Copel’s website	November/2003	Code of Conduct (PDF)
Installment of the Ethical Orientation Committee	Installment of the Board composed by members of several areas and managed by an independent member of the Civil Society	November/2003	The Ethical Guidance Council
Installment of the Audit Committee or Adaptation of the Fiscal Council	Installment of the Audit Committee composed of 3 independent members of the Board of Directors	June/2005	The Audit Committee internal regulations (PDF)
Appointment of a Financial Expert in the Audit Committee	Election of the Financial Expert among members of the Audit Committee	June/2005	Some information on the Financial Expert
Creation of a Communication Channel (with protection for complainants)	Creation and dissemination of a Channel to receive complaints among Copel’s employees.	July/2005	The attributions of the Confidential Communication Channel
		December/ 2005
Establishment of Committee of Integrated Management on Corporate Risk	assess the results of risks and controls, exceptional situations and recommendations for action if the need is identified	December/ 2009
Risk Committee	Assigned to the Corporate Governance Secretary the responsibility for secretary and organize meetings of the Risk Committee	August/ 2010
Ethical Guidance Council	Assigned to the Corporate Governance Secretary the responsibility for secretary and organize meetings of the Ethical Guidance Council	February /2011