6-K 1 elpitr3q15_6k.htm QUARTERLY FINANCIAL INFORMATION elpitr3q15_6k.htm - Generated by SEC Publisher for SEC Filing
 
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 

 
FORM 6-K
 
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of the
Securities Exchange Act of 1934
 
For the month of December, 2015
Commission File Number 1-14668
 

 
COMPANHIA PARANAENSE DE ENERGIA
(Exact name of registrant as specified in its charter)
 
Energy Company of Paraná
(Translation of Registrant's name into English)
 
Rua Coronel Dulcídio, 800
80420-170 Curitiba, Paraná
Federative Republic of Brazil
(5541) 3222-2027
(Address of principal executive offices)
 
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.  Form 20-F ___X___ Form 40-F _______

 Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.  

Yes _______ No ___X____

 
 

 

 

Companhia Paranaense de Energia

Corporate Taxpayer's ID (CNPJ/MF) 76.483.817/0001-20

State Registration 10146326-50

Publicly-Held Company - CVM 1431-1

www.copel.com       copel@copel.com

Rua Coronel Dulcídio, 800, Batel - Curitiba - PR

CEP 80420-170

 

 

 

Quarterly Financial Information

 

 

 

 

 

September / 2015

 

 


 
 

 

SUMMARY

   
QUARTERLY FINANCIAL INFORMATION  3 
Balance Sheets  3 
Statements of Income  5 
Statements of Income  6 
Statements of Comprehensive Income  7 
Statements of Comprehensive Income  8 
Statements of Changes in Equity  9 
Statements of Cash Flows  10 
Statements of Cash Flows  11 
Statements of Added Value  12 
Statements of Added Value  13 
NOTES TO THE QUARTELY FINANCIAL INFORMATION  14 
1  Operations  14 
2  Preparation basis  14 
3  Significant accounting policies  15 
4  Cash and Cash Equivalents  16 
5  Bonds and Securities  16 
6  Collaterals and Escrow Accounts  17 
7  Trade Accounts Receivable  18 
8  CRC Transferred to the State Government of Paraná  19 
9  Net Sectorial financial assets  21 
10  Accounts receivable related to the concession  22 
11  Accounts receivable related to the concession extension  23 
12  Other Receivables  24 
13  Inventories  25 
14  Income Tax, Social Contribution and Other Taxes  25 
15  Judicial Deposits  29 
16  Related parties  30 
17  Investments  32 
18  Property, Plant and Equipment  37 
19  Intangible Assets  40 
20  Payroll, Social Charges and Accruals  40 
21  Suppliers  40 
22  Loans and Financing  43 
23  Debentures  47 
24  Post-Employment Benefits  48 
25  Customer Charges Due  50 
26  Research and Development and Energy Efficiency  50 
27  Accounts Payable related to concession - Use of Public Property  51 
28  Other Accounts Payable  52 
29  Provision for litigation and contingent liabilities  52 
30  Equity  60 
31  Operating Revenues  62 
32  Operating Costs and Expenses  67 
33  Financial Results  73 
34  Operating segments  74 
35  Financial Instruments  79 
36  Related Party Transactions  93 
37  Insurance  96 
38  Subsequent Event  97 
INDEPENDENT AUDITORS’ REVIEW REPORT  98 

 


 
 

 

QUARTERLY FINANCIAL INFORMATION

 

Balance Sheets

as of September 30, 2015 and December 31, 2014

All amounts expressed in thousands of Brazilian reais, unless otherwise stated

           
ASSETS  Note  Parent Company  Consolidated 
    09.30.2015  12.31.2014  09.30.2015  12.31.2014 
CURRENT ASSETS           
Cash and cash equivalents  4  14,809  34,862  831,568  740,131 
Bonds and securities  5  164  152  384,549  459,115 
Collaterals and escrow accounts  6  -  -  1,809  13,497 
Trade accounts receivable  7  -  -  2,980,017  2,178,816 
Dividends receivable  16.1  181,516  383,866  24,687  26,332 
CRC transferred to the State Government of Paraná  8  104,534  94,579  104,534  94,579 
Net sectorial financial assets  9  -  -  1,236,253  609,298 
Accounts receivable related to the concession  10  -  -  8,351  7,430 
Accounts receivable related to the concession compensation  11  -  -  130,243  301,046 
Other current receivables  12  13,600  12,695  627,949  415,818 
Inventories  13  -  -  135,951  150,622 
Income Tax and Social Contribution  14.1  122,490  78,912  168,976  105,074 
Other current recoverable taxes  14.3  -  -  62,955  96,285 
Prepaid expenses  -  -  34  22,384  20,133 
Receivable from related parties  16  447  1,925  -  - 
    437,560  607,025  6,720,226  5,218,176 
NONCURRENT ASSETS           
Long Term Assets           
Bonds and securities  5  -  -  100,435  132,210 
Collaterals and escrow accounts  6  -  -  84,024  56,956 
Trade accounts receivable  7  -  -  85,159  75,696 
CRC transferred to the State Government of Paraná  8  1,257,061  1,249,529  1,257,061  1,249,529 
Judicial deposits  15  272,095  273,936  714,812  736,253 
Net sectoral financial assets  9  -  -  217,408  431,846 
Accounts receivable related to the concession  10  -  -  5,687,594  4,417,987 
Accounts receivable related to the concession compensation  11  -  -  218,871  160,217 
Other noncurrent receivables  12  -  303  35,353  85,324 
Income Tax and Social Contribution  14.1  76,929  114,195  92,074  128,615 
Deferred Income Tax and Social Contribution  14.2  143,492  98,226  667,853  526,046 
Other noncurrent recoverable taxes  14.3  14  -  121,788  123,481 
Prepaid expenses  -  -  -  175  175 
Receivable from related parties  16  287,731  208,334  177,529  137,137 
    2,037,322  1,944,523  9,460,136  8,261,472 
Investments  17  13,828,972  13,079,795  2,050,406  1,660,150 
Property, Plant and Equipment, net  18  395  323  8,699,629  8,304,188 
Intangible Assets  19  3,221  3,062  1,483,927  2,174,156 
    15,869,910  15,027,703  21,694,098  20,399,966 
TOTAL ASSETS    16,307,470  15,634,728  28,414,324  25,618,142 

Notes are an integral part of this quarterly information

3


 
 

 

Statements of Financial Position

as of September 30, 2015 and December 31, 2014

All amounts expressed in thousands of Brazilian reais, unless otherwise stated

 

           
LIABILITIES  Note  Parent Company  Consolidated 
    09.30.2015  12.31.2014  09.30.2015  12.31.2014 
CURRENT LIABILITIES           
Payroll, social charges and accruals  20  14,344  12,793  227,844  252,618 
Suppliers  21  5,719  2,087  1,811,769  1,587,205 
Income Tax and Social Contribution Payable  14.1  -  2,442  326,468  309,881 
Other taxes due  14.3  1,371  5,597  244,124  137,329 
Loans and financing  22  29,695  349,753  274,064  867,626 
Debentures  23  57,536  15,447  355,457  431,491 
Dividend payable  -  4,136  3,824  18,495  19,691 
Post employment benefits  24  3  -  36,814  37,404 
Customer charges due  25  -  -  394,930  23,233 
Research and Development and Energy Efficiency  26  -  -  158,050  175,972 
Accounts payable related to concession - Use of Public Property  27  -  -  55,196  54,955 
Other accounts payable  28  246  2,060  143,158  157,988 
    113,050  394,003  4,046,369  4,055,393 
NONCURRENT LIABILITIES           
Suppliers  21  -  -  14,249  17,625 
Deferred Income Tax and Social Contribution  14.2  -  -  -  15,218 
Other taxes due  14.3  1,300  820  256,226  87,129 
Loans and financing  22  969,011  608,663  3,124,986  2,601,324 
Debentures  23  996,198  995,038  3,335,324  2,153,957 
Post employment benefits  24  9,432  8,196  940,866  861,214 
Research and Development and Energy Efficiency  26  -  -  240,085  159,792 
Accounts payable related to concession - Use of Public Property  27  -  -  463,339  436,772 
Other accounts payable  28  3,959  -  12,105  306 
Provisions for legal claims  29  313,491  297,319  1,718,466  1,546,632 
    2,293,391  1,910,036  10,105,646  7,879,969 
EQUITY           
Attributable to controlling shareholder's  30.1         
Capital    6,910,000  6,910,000  6,910,000  6,910,000 
Equity valuation adjustments    920,829  976,964  920,829  976,964 
Legal reserve    685,147  685,147  685,147  685,147 
Profit retention reserve    4,516,825  4,516,825  4,516,825  4,516,825 
Additional proposed dividends    -  241,753  -  241,753 
Accumulated Profit    868,228  -  868,228  - 
    13,901,029  13,330,689  13,901,029  13,330,689 
Attributable to non-controlling interest  30.2  -  -  361,280  352,091 
    13,901,029  13,330,689  14,262,309  13,682,780 
TOTAL LIABILITIES & EQUITY    16,307,470  15,634,728  28,414,324  25,618,142 

 

Notes are an integral part of this quarterly information

4


 
 

 

 

Statements of Income

for the nine-month periods ended September 30, 2015 and 2014

All amounts expressed in thousands of Brazilian reais, unless otherwise stated

 

CONTINUING OPERATIONS  Note  Parent Company  Consolidated 
    09.30.2015 09.30.2014 09.30.2015 09.30.2014
           
OPERATING REVENUES  31  - - 11,391,128 9,456,130
           
COST OF SALES AND SERVICES PROVIDED  32  - - (9,230,240) (7,365,660)
           
GROSS PROFIT    - - 2,160,888 2,090,470
           
Operational expenses / income           
Selling expenses  32  - - (228,075) (107,153)
General and administrative expenses  32  (83,322) (92,350) (445,518) (386,180)
Other operational income (expenses)  32  (25,973) (1,763) (514,274) (358,489)
Equity in earnings of investees  17  892,479 1,032,500 150,901 120,051
    783,184 938,387 (1,036,966) (731,771)
           
PROFIT BEFORE FINANCIAL RESULTS AND TAXES    783,184 938,387 1,123,922 1,358,699
           
Financial results           
Financial income  33  171,828 142,975 748,726 499,052
Financial expenses  33  (203,023) (146,450) (594,473) (362,161)
    (31,195) (3,475) 154,253 136,891
           
PROFIT BEFORE INCOME TAX AND SOCIAL CONTRIBUTION    751,989 934,912 1,278,175 1,495,590
           
INCOME TAX AND SOCIAL CONTRIBUTION ON PROFIT           
Current  14.4  (217) - (571,855) (674,926)
Deferred  14.4  45,144 33,780 157,119 244,088
    44,927 33,780 (414,736) (430,838)
           
NET INCOME    796,916 968,692 863,439 1,064,752
Attributed to controlling shareholders    - - 796,916 968,692
Attributed to non-controlling interest  30.2  - - 66,523 96,060
           
BASIC AND DILUTED NET EARNING PER SHARE ATTRIBUTED           
TO PARENT COMPANY SHAREHOLDERS - IN REAIS           
Ordinary shares  30.1  2.78138 3.38091 2.78138 3.38091
Class "A" Preferred shares  30.1  3.06081 3.71917 3.06081 3.71917
Class "B" Preferred shares  30.1  3.05952 3.71901 3.05952 3.71901

 

Notes are an integral part of this quarterly information

5


 
 

 

Statements of Income

for the three-month periods ended September 30, 2015 and 2014

All amounts expressed in thousands of Brazilian reais, unless otherwise stated

 

CONTINUING OPERATIONS    Parent Company  Consolidated 
  07.01.2015 07.01.2014 07.01.2015 07.01.2014
  to 09.30.2015  to 09.30.2014  to 09.30.2015  to 09.30.2014 
         
OPERATING REVENUES  - - 3,245,188 3,286,884
COST OF SALES AND SERVICES PROVIDED  - - (2,836,156) (2,670,941)
GROSS PROFIT  - - 409,032 615,943
         
Operational expenses / income         
Selling expenses  - - (42,070) (40,176)
General and administrative expenses  (34,265) (32,490) (161,831) (123,017)
Other operational income (expenses)  (3,504) 218 (143,306) (146,700)
Equity in earnings of investees  124,533 260,031 59,092 35,469
  86,764 227,759 (288,115) (274,424)
         
PROFIT BEFORE FINANCIAL RESULTS AND TAXES  86,764 227,759 120,917 341,519
         
Financial results         
Financial income  60,820 38,029 220,215 115,596
Financial expenses  (79,031) (67,224) (227,476) (131,735)
  (18,211) (29,195) (7,261) (16,139)
         
PROFIT BEFORE INCOME TAX AND SOCIAL CONTRIBUTION  68,553 198,564 113,656 325,380
         
INCOME TAX AND SOCIAL CONTRIBUTION ON PROFIT         
Current  - - (101,481) (126,155)
Deferred  19,056 21,073 79,258 34,221
  19,056 21,073 (22,223) (91,934)
         
NET INCOME  87,609 219,637 91,433 233,446
Attributed to controlling shareholders  - - 87,609 219,637
Attributed to non-controlling interest  - - 3,824 13,809
         
BASIC AND DILUTED NET EARNING PER SHARE ATTRIBUTED         
TO PARENT COMPANY SHAREHOLDERS - IN REAIS         
Ordinary shares  0.30578 0.76657 0.30578 0.76657
Class "A" Preferred shares  0.33658 0.84395 0.33658 0.84395
Class "B" Preferred shares  0.33634 0.84323 0.33634 0.84323

 

6


 
 

 

 

Statements of Comprehensive Income

for the nine-month periods ended September 30, 2015 and 2014

All amounts expressed in thousands of Brazilian reais, unless otherwise stated

 

  Note  Parent Company  Consolidated 
    09.30.2015 09.30.2014 09.30.2015 09.30.2014
NET INCOME    796,916 968,692 863,439 1,064,752
Other comprehensive income           
Items that will never be reclassified to profit or loss           
Gain (losses) on actuarial liabilities  30.1.2         
Post employment benefits    - (14,429) - -
Post employment benefits - equity    14,999 7,814 14,999 (1,709)
Taxes on other comprehensive income  30.1.2  - 4,906 - -
Items that are or maybe reclassified to profit or loss           
Adjustments related to financial assets classified as available for sale:  30.1.2         
Financial investments    416 788 632 1,194
Investments    (360) (216) (360) (216)
Other adjustments - subsidiary    - (1,282) - (2,777)
Taxes on other comprehensive income  30.1.2  122 73 (94) 612
Total comprehensive income for the period, net of taxes    15,177 (2,346) 15,177 (2,896)
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD    812,093 966,346 878,616 1,061,856
Attributed to controlling shareholders        812,093 966,346
Attributed to non-controlling interest        66,523 95,510

 

Notes are an integral part of this quarterly information

7


 
 

 

 

Statements of Comprehensive Income

for the three-month periods ended September 30, 2015 and 2014

All amounts expressed in thousands of Brazilian reais, unless otherwise stated

 

  Parent Company 

Consolidated 

  07.01.2015 07.01.2014 07.01.2015 07.01.2014
  to 09.30.2015  to 09.30.2014  to 09.30.2015  to 09.30.2014 
NET INCOME  87,609 219,637 91,433 233,446
Other comprehensive income  14,733 (191) 14,733 (191)
Items that will never be reclassified to profit or loss         
Gain on actuarial liabilities         
Post employment benefits  - - - -
Post employment benefits - equity  14,999 - 14,999 -
Taxes on other comprehensive income  - - - -
Items that are or maybe reclassified to profit or loss         
Adjustments related to financial assets classified as available for sale:         
Financial investments  - (111) - (168)
Investments  (403) (121) (403) (121)
Other adjustments - subsidiary  - - - -
Taxes on other comprehensive income  137 41 137 98
Total comprehensive income for the period, net of taxes         
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD  102,342 219,446 106,166 233,255
Attributed to controlling shareholders  - - 102,342 219,446
Attributed to non-controlling interest  - - 3,824 13,809

 

8


 
 

 

 

Statements of Changes in Equity

for the nine-month periods ended September 30, 2015 and 2014

All amounts expressed in thousands of Brazilian reais, unless otherwise stated

 

                       
    Attributable to Parent Company Shareholders’
equity
Attributable
to
non
controlling
interests
(Note 29.2)  
Equity
Consolidated
      Equity valuation
adjustments
Profit reserves
   Note Capital   Cost
assigned
Other
comprehensive
income
Legal
r
eserve
Profit
retention
reserve
Additional
proposed
dividends
Accumulated
profit
Balance as of January 1, 2015    6,910,000  1,137,104 (160,140) 685,147   4,516,825  241,753 -  13,330,689 352,091 13,682,780
Net Income for the period    -  - -  -  -  - 796,916  796,916 66,523 863,439
Other comprehensive income                       
Gain on financial assets, net of taxes  30.1.2  -  - 178  -  -  - -  178 - 178
Actuarial gain, net of taxes  30.1.2  -  - 14,999  -  -  - -  14,999 - 14,999
Total comprehensive income for the period    -  - 15,177  -  -  - 796,916  812,093 66,523 878,616
Realization of equity valuation adjustments  30.1.2  -  (71,312) -  -  -  - 71,312  - - -
Deliberation of additional dividends proposed    -  - -  -  -  (241,753) -  (241,753) (57,334) (299,087)
Balance as of September 30, 2015    6,910,000  1,065,792 (144,963)  685,147 4,516,825  - 868,228  13,901,029 361,280 14,262,309
Notes are an integral part of this quarterly information

 

 

                     
  Attributable to Parent Company   Attributable
to
non
controlling
interests
(Note 29.2)  
Equity
Consolidated 
    Equity valuation 
adjustments
Profit reserves  
  Capital   Cost
assigned
Other
 comprehensive
income
Legal
reserve
Profit
 
retention
reserve
Additional
proposed
dividends
  Accumulated
profit
Shareholders’ 
equity
Balance as of January 1, 2014  6,910,000  1,238,955 (255,796) 624,849 3,897,833  235,498 -  12,651,339 277,413 12,928,752
Net Income for the period  -  - - -  -  - 968,692  968,692 96,060 1,064,752
Other comprehensive income                     
Losses on financial assets, net of taxes  -  - (637) -  -  - -  (637) (550) (1,187)
Losses on actuarial liabilities, net of taxes  -  - (1,709) -  -  - -  (1,709) - (1,709)
Total comprehensive income for the period  -  - (2,346) -  -  - 968,692  966,346 95,510 1,061,856
Realization of equity valuation adjustments  -  (76,341) - -  -  - 74,734  (1,607) - (1,607)
Deliberation of additional dividends proposed  -  - - -  -  (235,498) -  (235,498) - (235,498)
Allocation proposed to GSM:                     
Dividends  -  - - -  -  - -  - (155) (155)
Balance as of September 30, 2014  6,910,000  1,162,614 (258,142) 624,849 3,897,833  - 1,043,426  13,380,580 372,768 13,753,348
Notes are an integral part of this quarterly information

 

9


 
 

 

 

Statements of Cash Flows

for the nine-month periods ended September 30, 2015 and 2014

All amounts expressed in thousands of Brazilian reais, unless otherwise stated

 

  Note  Parent Company  Consolidated 
    09.30.2015 09.30.2014 09.30.2015 09.30.2014
           
CASH FLOWS FROM OPERATING ACTIVITIES           
Net income for the period    796,916 968,692 863,439 1,064,752
           
Adjustments to reconcile net income for the period with cash generated from           
operating activities           
Depreciation and amortization  32  - - 503,355 462,465
Unrealized monetary and exchange variations - net    49,029 34,506 238,699 238,927
Remuneration of accounts receivable related to concession  10.1  - - (66,340) (45,210)
Sectorial financial assets and liabilities result  9.2  - - (322,708) -
Equity in earnings of subsidiaries  17.1  (892,479) (1,032,500) (150,901) (120,051)
Income tax and social contribution  14.4  217 - 571,855 674,926
Deferred income tax and social contribution  14.4  (45,144) (33,780) (157,119) (244,088)
Provisions (reversals) for losses with depreciation of investments    - (2,168) - (2,168)
Net operating provisions and reversals  32.4  20,283 1,860 497,139 275,913
Appropriation of acturial calculation of post-employment benefits  24.4  1,174 1,735 106,758 76,606
Appropriation of pension and healthcare contributions  24.4  4,928 7,006 95,299 81,116
Creation for research and development programs and energy efficiency  26.2  - - 94,901 84,022
Write off of accounts receivable related to concession  10.1  - - 38,664 20,660
Write off of property, plant and equipment  18.2  - - 17,614 2,460
Write off of intangible assets  19.1  - - 17,707 3,908
    (65,076) (54,649) 2,348,362 2,574,238
           
Decrease (increase) in assets           
Trade accounts receivable    - - (952,839) (546,234)
Dividends and interest on own capital received    1,568,129 600,577 50,315 32,273
CRC transferred to the Government of the State of Paraná  8.1  133,941 129,058 133,941 129,058
Accounts receivable related to the concession extension  11.1  - - 267,703 306,814
Judicial deposits    1,841 (1,574) 21,441 (51,029)
Other receivables    (602) (15,260) (174,849) (53,408)
Inventories    - - 14,671 (2,783)
Income tax and social contribution    (6,312) 8,043 (27,361) 99,883
Other current taxes recoverable    (14) - 44,398 (70,704)
Related Parties    (14,623) (128,867) (16,163) (128,867)
Prepaid expenses    34 - (2,251) (1,280)
           
Increase (decrease) in liabilities           
Payroll, social charges and accruals    1,551 7,943 (24,774) (25,699)
Suppliers    3,632 (588) 34,949 57,574
Income tax and social contribution paid    (2,659) - (555,268) (604,024)
Other taxes    (3,746) (24,817) 275,892 (23,844)
Loans and financing - interest due and paid  22.3  (121,188) (94,068) (382,597) (217,300)
Debentures - interest due and paid  23.1  (63,541) (6,028) (188,717) (76,260)
Post employment benefits  24.4  (4,925) (6,996) (122,995) (104,173)
Customer charges due    - - 371,697 (14,008)
Research and development and energy efficiency  26.2  - - (57,177) (40,653)
Payable related to the concession - use of public property  27.1  - - (41,199) (38,657)
Other accounts payable    (1,814) 8,960 (3,031) 25,761
Provisions for legal claims  29.1.1  (152) (1,104) (143,039) (37,944)
NET CASH GENERATED (USED) IN OPERATING ACTIVITIES    1,424,476 420,630 871,109 1,188,734
 
(continued)           

  

10


 
 

 

Statements of Cash Flows

for the nine-month periods ended September 30, 2015 and 2014 (continued)

All amounts expressed in thousands of Brazilian reais, unless otherwise stated

 

  Note  Parent Company  Consolidated 
    09.30.2015 09.30.2014 09.30.2015 09.30.2014
           
CASH FLOWS FROM INVESTING ACTIVITIES           
Financial investments    (12) 35 91,593 (192,292)
Loans and financing granted to third parties    (36,800) - (29,400) -
Receipt of loans and financing granted to third parties    11,735 - 7,894 -
Additions related parties - Net effect of acquired cash    - - - (284)
Additions in investments  17.1  (1,211,785) (465,402) (273,480) (395,242)
Additions to property, plant and equipment    (72) (20) (707,302) (609,528)
Additions to intangible assets  19.1  (159) (14,832) (735,923) (882,036)
Customers contributions  19.1  - - 184,239 127,673
NET CASH USED IN INVESTING ACTIVITIES    (1,237,093) (480,219) (1,462,379) (1,951,709)
           
CASH FLOWS FROM FINANCING ACTIVITIES           
Loans and financing obtained from third parties  22.3  640,005 - 1,149,956 121,556
Issue of Debentures  23.1  - 1,000,000 1,008,633 1,372,753
Amortization of principal - loans and financing  22.3  (606,000) (80,600) (1,143,591) (402,602)
Amortization of principal - debentures  23.1  - - (32,008) (30,456)
Amortization of principal - liabilities with related parties    - (468,317) - -
Dividends and interest on own capital paid    (241,441) (235,173) (300,283) (249,786)
NET CASH GENERATED FROM (USED IN) FINANCING ACTIVITIES    (207,436) 215,910 682,707 811,465
           
TOTAL EFFECTS ON CASH AND CASH EQUIVALENTS    (20,053) 156,321 91,437 48,490
           
Cash and cash equivalents at the beginning of the period   4  34,862 10,410 740,131 1,741,632
Cash and cash equivalents at the end of the period   4  14,809 166,731 831,568 1,790,122
CHANGE IN CASH AND CASH EQUIVALENTS    (20,053) 156,321 91,437 48,490
 
Notes are an integral part of this quarterly information
 
 
Additional information on cash flows           
 
Transactions not involving cash           
Acquisition of property with an increase in the balance of suppliers    - - 54,544 -

11


 
 

 

Statements of Added Value

for the nine-month periods ended September 30, 2015 and 2014

All amounts expressed in thousands of Brazilian reais, unless otherwise stated

 

VALUE ADDED TO DISTRIBUTE  Parent Company  Consolidated 
  09.30.2015 09.30.2014 09.30.2015 09.30.2014
Income         
Sale of energy, services and other income  - - 16,562,800 11,523,566
Construction income  - - 1,244,634 1,463,691
Sectorial financial assets and liabilities result  - - 979,343 -
Other income  - - 8,166 417
Allowance for doubtful debts  - - (188,110) (67,680)
  - - 18,606,833 12,919,994
( - ) Supplies acquired from third parties         
Energy purchased for resale  - - 5,429,790 3,803,156
Charges for use of the main transmission grid ( - ) ESS and ERR  - - 521,028 413,594
Materials, supplies and third parties services  9,451 4,482 608,718 457,064
Natural gas and supplies for gas operations  - - 769,683 1,346,696
Construction costs  - - 1,084,387 1,256,035
Loss / Recovery of assets  253 - 85,748 27,028
Other supplies  39,778 13,966 380,149 255,035
  49,482 18,448 8,879,503 7,558,608
         
( = ) GROSS ADDED VALUE  (49,482) (18,448) 9,727,330 5,361,386
         
( - ) Depreciation and amortization  4,364 565 503,355 462,465
         
( = ) NET ADDED VALUE  (53,846) (19,013) 9,223,975 4,898,921
         
( + ) Transferred added value         
Financial income  171,828 142,975 748,726 499,052
Results from investment interests  893,882 1,033,162 152,305 120,712
Other Income  - - 64,761 70,832
  1,065,710 1,176,137 965,792 690,596
         
  1,011,864 1,157,124 10,189,767 5,589,517
(continued)         

 

12


 
 

 

Statements of Added Value

for the nine-month periods ended September 30, 2015 and 2014 (continued)

All amounts expressed in thousands of Brazilian reais, unless otherwise stated

 

DISTRIBUTION OF ADDED VALUE  Parent Company  Consolidated 
  09.30.2015 % 09.30.2014 % 09.30.2015 %  09.30.2014 % 
Personnel                 
Remuneration and fees  33,836   46,829   560,293   508,721  
Private pension and health plans  6,102   8,741   202,057   157,722  
Meal and education assistance  2,676   4,452   76,167   68,144  
Social security charges - FGTS  2,648   3,774   44,113   40,787  
Labor indemnities (reversals)  21   197   5,074   2,770  
Profit sharing  985   1,734   28,549   31,174  
Transfers to property, plant and equipment in progres  (38)   (2,998)   (44,934)   (18,032)  
  46,230 4.6 62,729 5.4 871,319 8.6  791,286 14.2 
Government                 
Federal  (31,857   (18,684)   4,382,525   1,533,843  
State  -   -   3,329,285   1,713,139  
Municipal  42   -   7,391   2,953  
  (31,815) (3.1) (18,684) (1.6) 7,719,201 75.8  3,249,935 58.1 
Third Parties                 
Interest and fines  199,224   144,250   703,126   451,525  
Leasing and rent  1,309   137   25,474   22,899  
Donations, subsidies and contributions  -   -   7,208   9,120  
  200,533 19.8 144,387 12.5 735,808 7.2  483,544 8.7 
Shareholders                 
Non controlling interests  -   -   66,523   96,060  
Retained profits  796,916   968,692   796,916   968,692  
  796,916 78.7 968,692 83.7 863,439 8.4  1,064,752 19.0 
                 
  1,011,864 100.0 1,157,124 100.0 10,189,767 100.0  5,589,517 100.0 
Notes are an integral part of this quarterly information

 

13


 
 

 

 

NOTES TO THE QUARTELY FINANCIAL INFORMATION

for the nine-month period ended September 30, 2015

All amounts expressed in thousands of Brazilian reais, unless otherwise state

1         Operations

Companhia Paranaense de Energia - Copel (Copel, the Company or the Parent Company), with headquarters at Rua Coronel Dulcídio, 800, Batel, Curitiba, State of Paraná, is a public company with shares traded on Corporate Governance Level 1 of BM&FBOVESPA’s Special Listings and on stock exchanges in the United States of America (NYSE EURONEXT) and Latibex - the Latin American arm of the Madrid Stock Exchange. Copel is a mixed capital company, controlled by the Government of the State of Paraná

Copel is engaged, through its subsidiaries, in researching, studying, planning, building, and exploiting the production, transformation, transportation, distribution, and sale of energy, in any form, but mainly electric energy. These activities are regulated by the National Electric Energy Agency (Agência Nacional de Energia Elétrica or Aneel), which reports to the Ministry of Mines and Energy (Ministério de Minas e Energia or MME). Additionally, Copel takes part in consortiums, private enterprises, or mixed capital companies in order to operate mostly in the areas of energy, telecommunications, natural gas and water utility.

2         Preparation basis

2.1        Statement of conformity

The Company’s quarterly financial information includes the individual quarterly financial information of the parent company prepared in accordance with accounting practices adopted in Brazil and the consolidated quarterly financial information prepared in accordance with International Financial Reporting Standards - IFRS issued by the International Accounting Standards Board - IASB and in accordance with accounting practices adopted in Brazil.

This quarterly information is presented considering the rulings included in CPC 21 (R1) and IAS 34 - Interim Information. Consequently, certain information disclosed in the notes to the financial statements for the year ended December 31, 2014, which did not alter during the period has not been presented. Therefore, this quarterly information should be read together with the financial statements as of and for the year ended December 31, 2014, available on the websites of the Brazilian Securities and Exchange Commission - CVM and Copel.

Authorization for the publication of this quarterly financial information was granted the Chief of Finance and Investor Relations on November 10, 2015.

 

14


 
 

 

2.2        Functional currency and presentation currency

The quarterly financial information is presented in Brazilian Reais, which is the functional currency of the Company. All financial information present in Brazilian Reais was rounded to the nearest thousand, except when otherwise indicated.

2.3        Measuring basis

The quarterly financial information was prepared based on historic cost, except for the following financial instruments:

·         The financial instruments which were stated at fair values through profit or loss, are measured at fair value;

·         The financial assets available for sale measured at their fair values;

·         The interests in subsidiaries and jointly-controlled entities are recognized in accordance with the equity accounting method; and

·         The value of the net assistance liability is recognized by deducting the fair value of the plan's assets from the present value of the actuarial obligation calculated by a contracted actuary.

2.4        Use of estimates and judgment

The preparation of quarterly financial information requires that the Company’s senior management make judgments, estimates and assumptions which affect the application of accounting policies and assets, liabilities, income and expenses reported values. The actual results may divert from these estimates.

Estimates and assumptions are reviewed in a continuous way. Reviews of accounting estimates are recognized in the year that those estimates are reviewed and in any future fiscal years affected.

Information about critical judgment related to accounting policies adopted that present a significant effect over the values recognized in the quarterly information, is the same as the one disclosed in Note 2.4 to the financial statements as of December 31, 2014.

3         Significant accounting policies

Significant accounting policies used in preparing this quarterly information are consistent with those presented in Note 3 of the financial statements at December 31, 2014.

15


 
 

 

4         Cash and Cash Equivalents

    Parent Company    Consolidated 
  09.30.2015  12.31.2014  09.30.2015  12.31.2014 
Cash and bank accounts  809  1,485  176,067  152,373 
Financial investments w ith immediate liquidity  14,000  33,377  655,501  587,758 
  14,809  34,862  831,568  740,131 

 

The investments comprise Bank Certificates of Deposit (CDBs) issued by official banks and also financial investments in Government Bonds with repurchase agreements with the issuer banks, in which the Bank has the obligation to repurchase these bonds from Copel on request. These investments have yielded on average of the variation of the Interbank Deposit.

5         Bonds and Securities

  Level    Parent Company  Consolidated 
Category  Note 35.1  Index  09.30.2015 12.31.2014   09.30.2015  12.31.2014 
Securities available for sale             
Committed Operation  2  Fixed rate  -  -  64,250  93,558 
CDB  2  CDI  61  56  44,500  36,718 
LFT  1  Selic  -  -  4,168  87,979 
Quotas in Funds  1  CDI  103  96  103  99 
LTN  1  Fixed rate  -  -  -  17,153 
LF Caixa  2  CDI  -  -  -  12,450 
NTN-F  1  CDI  -  -  -  2,001 
      164  152  113,021  249,958 
Securities held for trading             
Quotas in Funds  2  CDI  -  -  134,568  164,281 
Committed Operation  2  Selic  -  -  33,512  10,320 
Multimarket Fund  2  CDI  -  -  114,156  43,021 
LF  2  CDI  -  -  59,037  32,041 
LTN  1  CDI  -  -  15,573  52,798 
CDB  2  IGPDI  -  -  119  1,128 
DPGE  2  Fixed rate  -  -  9,949  14,224 
Debentures  2  IPCA  -  -  2,718  2,961 
Housing credit  2  CDI  -  -  2,327  - 
CRI  2  CDI  -  -  -  12,230 
Loan - Credit Operation ( Mutual )  2  CDI  -  -  -  8,357 
Treasury  2  -  -  -  4  6 
      -  -  371,963  341,367 
      164  152  484,984  591,325 
    Current  164  152  384,549  459,115 
    Noncurrent  -  -  100,435  132,210 

 

Copel and its subsidiaries hold bonds and securities with variable interest rates. The maturity of these securities varies between 1 to 60 months, as from the reporting date. None of these assets was overdue or presented recovery problems or impairment losses at the end of the period.

16


 
 

 

The main amounts invested include exclusive funds and guarantees deposits/investments:

Consolidated  09.30.2015  12.31.2014 
Exclusive funds     
Exclusive funds of UEG Araucária at BTG Geiser  136,258  - 
Exclusive funds of UEG Araucária at Banco do Brasil  104,465  90,521 
Exclusive funds of UEG Araucária at Bradesco  114,276  61,370 
Exclusive funds of UEG Araucária at Caixa Econômica Federal  10,524  21,704 
Exclusive funds of UEG Araucária at BNY Mellon Serviços Financeiros DTVM S.A.  -  167,629 
Exclusive funds of Copel Geração e Trasmissão at Banco do Brasil  -  65,391 
Exclusive funds of Copel Distribuição at Banco do Brasil  -  3 
  365,523  406,618 
Guarantee     
Guarantee for the Agreements for the Sale of Energy - CCEE  1,289  81,926 
Guarantee for the Agreements for the Sale of Energy in the Regulated Environment - CCEARS  160  - 
Collaterals for financing facilities to build hydroelectric pow er plants HPPs and transmission lines - TLs  68,367  62,049 
Guarantee for the compliance w ith article 17 of law 11,428/2006 and possible authorization by Environmental     
Institute of Paraná (Instituto Ambiental do Paraná or IAP), by the Consórcio Energético Cruzeiro do Sul  40,162  36,662 
Guarantee for debentures of Compagas  6,317  - 
Guarantee for the ANEEL auction  2,879  3,753 
  119,174  184,390 

 

6         Collaterals and Escrow Accounts

Consolidated    09.30.2015  12.31.2014 
Collaterals and escrow accounts - STN (6.1)    84,024  56,956 
Other    1,809  13,497 
    85,833  70,453 
  Current  1,809  13,497 
  Noncurrent  84,024  56,956 

 

6.1        Collateral - National Treasury Department (Secretaria do Tesouro Nacional or STN)

Surety bonds and restricted deposits are offered to secure the repayment of the principal consisting of discount bonds and par bounds when these payments are required on April 11, 2024 (Note 22). The amounts are adjusted by applying the weighted average of the percentage variations of the prices of zero-coupon bonds issued by the U.S. Treasury, according to the participation of each series of the instrument in the composition of the collateral portfolio made up to secure the payment of the principal under the Brazilian Financing Plan – 1992.

17


 
 

 

7         Trade Accounts Receivable

 

Consolidated  Balances  Overdue  Overdue for  Total  Total 
  falling due  up to 90 days  more than 90 days  09.30.2015 12.31.2014
Customers           
Residential  298,242  196,665 69,511 564,418 343,911
Industrial  280,087  50,508 35,767 366,362 220,569
Commercial  237,289  58,608 32,386 328,283 202,640
Rural  48,753  18,413 3,498 70,664 39,982
Public Entities  39,262  13,360 11,103 63,725 56,507
Public lighting  37,447  365 92 37,904 20,820
Public service  38,410  1,444 763 40,617 21,947
Unbilled  556,738  - - 556,738 402,465
Energy installments plan  79,881  8,470 28,137 116,488 147,865
Low income subsidy - Eletrobras  11,648  - - 11,648 13,368
State Government "Luz Fraterna" Program (Note 16.1)  2,930  5,871 - 8,801 2,680
Other receivables  57,669  28,738 33,995 120,402 103,095
  1,688,356  382,442 215,252 2,286,050 1,575,849
Concessionaires and Permission holder           
Energy supplies           
CCEE (7.1)  263,818  160,115 205,942 629,875 494,900
CCEAR - auction  76,336  12,631 6,896 95,863 95,274
Bilateral contracts  97,146  739 25 97,910 98,449
Unbilled  29,125  - - 29,125 12,309
Quota system  2,275  3,381 2 5,658 4
Reimbursement to generators  -  - 1,256 1,256 1,256
  468,700  176,866 214,121 859,687 702,192
Charges from using transmission grid           
Transmission grid  31,970  864 2,357 35,191 4,276
Unbilled  34,615  - - 34,615 14,109
Basic netw ork and conection grid  7,768  8,585 5,275 21,628 17,288
  74,353  9,449 7,632 91,434 35,673
Telecommunications  8,487  10,510 55,947 74,944 51,934
Gas distribution  61,232  3,280 1,391 65,903 48,385
Allowance for doubtful accounts (7.2)  -  (72,211) (240,631) (312,842) (159,521)
  2,301,128  510,336 253,712 3,065,176 2,254,512
Current  2,215,969  510,336 253,712 2,980,017 2,178,816
Noncurrent  85,159  - - 85,159 75,696

 

7.1        Electricity Trade Chamber – CCEE

Out of the balance presented earlier herein, the amount of R$428,720 is related to UEG Araucária and the amount of R$181,560 is related to Copel Geração e Transmissão. The financial settlements related to the months of July and August were partially received by UEG Araucária in the amounts R$129,113 on October 15, 2015. The remaining balance payment, related to UEG Araucária's financial settlements for the months of August and September, is forecast for November 2015. 

 

 

 

18


 
 

 

7.2        Allowance for doubtful account

Consolidated  Balance as of  Additions /  Reversal  Balance as of 
  January 1, 2015  (reversals)  of write offs September 30, 2015 
Customers         
Residential  59,518  41,356  (13,757) 87,117 
Industrial  35,957  6,765  (3,954) 38,768 
Commercial  39,835  4,465  (3,806) 40,494 
Rural  1,273  860  (535) 1,598 
Public Entities  9,155  113  - 9,268 
Public lighting  81  -  - 81 
Public service  260  148  - 408 
  146,079  53,707  (22,052) 177,734 
Concessionaries and permission holder         
CCEE (7.2.1)  -  119,665  - 119,665 
Concessionaries and permission holder  9,089  1,052  - 10,141 
  9,089  120,717  - 129,806 
Telecommunications  3,043  715  - 3,758 
Gas distribution  1,310  282  (48) 1,544 
  159,521  175,421  (22,100) 312,842 

 

7.2.1       CCEE

An allowance for impairment loss on trade receivables was recognized on 2015, in the amount of R$119,655 in respect of to the differences between the sales price of the energy traded under the Contracts for Purchasing and Selling Electricity in the Regulated Environment (CCEARs) of the Hydroelectric Power Plant Colíder and the difference settlement price. The Company is waiting for Aneel to make a decision about the request for a revision of the schedule for starting the power plant’s operations to reverse that allowance.

8         CRC Transferred to the State Government of Paraná

8.1        Changes in CRC

Parent Company and Consolidated  Current Assets  Noncurrent Assets  Total 
Balance as of January 1, 2015  94,579 1,249,529 1,344,108
Interest  63,581 - 63,581
Monetary variations  2,451 85,396 87,847
Transfers  77,864 (77,864) -
Amortizations  (133,941) - (133,941)
Balance as of September 30, 2015  104,534 1,257,061 1,361,595

 

19


 
 

 

8.2        Maturity of noncurrent installments

Parent Company and Consolidated  09.30.2015 
2016  27,645 
2017  115,140 
2018  122,798 
2019  130,964 
2020  139,674 
After 2021  720,840 
  1,257,061 

 

20


 
 

9         Net Sectorial financial assets

9.1        Composition of net sectorial financial assets balances per tariff cycle

Consolidated  Current assets  Noncurrent assets 
  09.30.2015 12.31.2014 09.30.2015 12.31.2014
Sectoral financial assets - Electricity rate adjustment recoverable 2014         
Fuel Consumption Account - CCC  - 4,254 - -
Charges for using the transmission system - basic grid  - 14,304 - -
Electricity purchased for resale - Itaipu  - 2,469 - -
Charges for system services - ESS  - (81,703) - -
Energy Development Account - CDE  - 1,160 - -
Incentive Program to Alternative Electricity Sources - Proinfa  - 4,604 - -
Electricity purchased for resale - CVA Energ  - 162,114 - -
Transport of energy purchased from Itaipu  - 165 - -
Other financial components         
Overcontracting  - 79,201 - -
Eletronuclear  - 1,554 - -
Neutrality  - (10,670) - -
  - 177,452 - -
Sectoral financial assets - Electricity rate adjustment recoverable 2015         
Charges for using the transmission system - basic grid  104,672 41,274 - 41,274
Electricity purchased for resale - Itaipu  - (55,585) - (55,585)
ESS  (300,966) (144,531) - (144,531)
CDE  256,512 7,866 - 7,866
Proinfa  (1,777) - - -
CVA Energ  547,914 220,680 - 220,680
Transport of energy purchased from Itaipu  4,288 946 - 946
Other financial components         
Deferral IRT 2013  215,437 140,337 - 140,337
Deferral IRT 2014 (constitution)  486,005 159,364 - 159,364
Extraordinary Tariff Review  (269,645) - - -
Overcontracting  118,167 66,668 - -
Neutrality  (11,832) (5,173) - -
Financial exposure  14,883 - - -
Other financial components  126 - - 61,495
  1,163,784 431,846 - 431,846
Sectoral financial assets - Electricity rate adjustment recoverable 2016         
Charges for using the transmission system - basic grid  3,034 - 9,103 -
Electricity purchased for resale - Itaipu  124,058 - 372,174 -
ESS  (20,063) - (60,190) -
CDE  95,664 - 286,994 -
Proinfa  (4) - (11) -
CVA Energ  (19,605) - (58,816) -
Transport of energy purchased from Itaipu  704 - 2,111 -
Other financial components         
Overcontracting  2,582 - 7,745 -
Extraordinary Tariff Review  (127,909) - (383,726) -
Neutrality  11,845 - 35,535 -
Financial exposure  2,163 - 6,489 -
  72,469 - 217,408 -
  1,236,253 609,298 217,408 431,846

 

21


 
 

 

9.2        Net changes in sectorial financial assets

  Balance as of        Balance as of 
  January 1, 2015  Constitution   Amortization  Updating September 30, 2015 
Fuel Consumption Account - CCC  4,254 - (4,254) - -
Charges for using the transmission system - basic grid  96,852 63,001 (52,402) 9,358 116,809
Electricity purchased for resale - Itaipu  (108,701) 601,030 (2,610) 6,513 496,232
ESS  (370,765) (169,209) 193,512 (34,757) (381,219)
CDE (a)  16,892 690,424 (92,828) 24,682 639,170
Proinfa  4,604 (2,284) (4,240) 128 (1,792)
CVA Energ  603,474 176,245 (366,399) 56,173 469,493
Transport of energy purchased f rom Itaipu  2,057 6,445 (1,702) 303 7,103
Other financial components           
Overcontracting  212,537 5,733 (118,590) 28,814 128,494
Deferral IRT  599,402 311,213 (233,814) 24,641 701,442
Extraordinary Tariff Review  - (842,087) 89,881 (29,074) (781,280)
Neutrality  (21,016) 42,099 14,615 (150) 35,548
Financial exposure  - 25,326 (4,961) 3,170 23,535
Eletronuclear  1,554 - (1,554) - -
Guarantees  - 160 (42) 8 126
  1,041,144 908,096 (585,388) 89,809 1,453,661
Current  609,298       1,236,253
Noncurrent  431,846       217,408
(a) Aneel published Resolutions nºs 1740/2014, 1856/2015, 1857/2015, 1863/2015 and 1897/2015.     

 

10      Accounts receivable related to the concession

10.1      Changes in accounts receivable related to the concession

    Noncurrent assets   
  Current    Special   
  assets  Assets  liabilities (a)   Consolidated 
Balance as of January 1, 2015  7,430 6,762,702 (2,344,715) 4,425,417
Capitalization of intangible assets in progress  - 576,439 (95,689) 480,750
Transfers of intagible - Renew al of Copel Distribuição’s Concession  - 583,165 (62,324) 520,841
Transfers from current to noncurrent  34,167 (34,167) - -
Transfers to electricity grid use charges - customers  (33,246) - - (33,246)
Transfer from property, plant and equipment  - 1,768 - 1,768
Monetary variations  - 263,305 (127,349) 135,956
Remuneration  - 66,340 - 66,340
Construction income  - 136,783 - 136,783
Write off  - (24,851) (13,813) (38,664)
Balance as of September 30, 2015  8,351 8,331,484 (2,643,890) 5,695,945

 

10.1.1     Distribution concession contract

The Company has issued a favorable opinion on the extension of Concession Agreement number 046/1999, pursuant to Law 12,783/2013, which maturity occurred on July 7, 2015. Extension of the contractual concessions will take place by means of lawful regulatory conditions to be defined.

 

22


 
 

 

The Company expects that the renewal will take place, as long as profitability levels are guaranteed. Considering the provisions of article 42, paragraph two of Law 8,987 that took effect on February 13, 1995, “concessions shall remain valid for the time necessary to initiate procurement proceedings that shall precede the grant of the concessions to replace the current ones, and that period shall not be lower than twenty-four months (24)” and the ordinance 3,592 issued by ANEEL (National Electric Energy Agency) on October 28, 2015, R$569,314, corresponding to 24 repayment installments, was reclassified from Accounts receivable related to the concession to Intangible assets, until proceedings are completed.

10.2      Commitments regarding transmission

Refers to commitments with suppliers of equipment and services related to the following projects:

Transmission Lines and Substations  Balance 
Contract 010/10 - Transmission Line Araraquara 2 - Taubaté  143,055 
Contract 022/12 - TL 230 kV - Foz do Chopim - Salto Osorio C2 and Londrina Figueira  39,517 
Contract 002/13 - TL 230 kV Assis - Paraguaçu Paulista  50,624 
Contract 005/14 - TL 230 kV Bateias-Curitiba Norte and SE 230 kV Curitiba Norte  16,100 
Contract 021/14 - TL 230 kV Foz do Chopim Realeza Sul and SE 230 kV Realeza Sul  16,100 
Contract 022/14 - TL 500kV Londrina - Assis  16,100 

 

11      Accounts receivable related to the concession extension

On August 18, September 15 and October 15 of 2015, the Company received the portion for February to April of 2015, respectively R$42,171, R$38,454 and R$35,799, and Management expects to receive the other overdue portions on November, 2015, in the amount of R$94,443, as soon as the CDE funds are restored by Concession Authority.

On March 31, 2015, the Company submitted to Aneel the appraisal of the electricity transmission assets comprising the Existing National Grid - RBSE and Other Transmission Facilities - RPC, relating to concession agreement 060/2001, renewed by Law 12783/13.

In June 2015, Aneel (the Brazilian Electricity Regulatory Agency) inspected the Company in order to validate information including the consequent determination of the amount indemnifiable.  Aneel has 30 days counting from the filing to express the acceptance of the evaluation report and further 120 days, as from the acceptance, to validate the information including the consequent determination of the indemnifiable amount, and adjustments may incur in the indemnification basis.

The Company's report was prepared in accordance with the Aneel Normative Resolution 589/2013 which amounts to R$882,300, equal to the investments at the VNR – New replacement value adjusted by the depreciation accumulated through December 31, 2012. The Company is awaiting the conclusion of the proceedings of Aneel.

Due to the expiration of the HPP Rio dos Patos, HPP GPS and HPP Mourão I concessions, Copel Geração e Transmissão depreciated the power plants until the expiration date of concessions and reclassified their residual value of R$58,654, recognized as fixed assets, to "Accounts receivable from the indemnity for the concession”, which will be checked against the indemnity to be set by the Concession Authority.

23


 
 

 

The Company's management valued these assets by applying the new replacement value methodology established by ANEEL's Resolution 596/2013. Although the Concession Authority has not yet disclosed the way the ROA will be paid and the approval of the investments made by the Company remains uncertain, management expects that the Company will be reimbursed for these assets, which shows the recoverability of the balances recognized on September 30, 2015.

11.1      Changes in the accounts receivable related to the concession extension

  Current   Noncurrent   
  Assets  Assets   Consolidated 
Balance as of January 1, 2015  301,046 160,217  461,263
Transfer of property, plant and equipment - generation concessions compensation  - 58,654  58,654
Amortizations  96,900 -  96,900
Remuneration  (267,703) -  (267,703)
Balance as of September 30, 2015  130,243 218,871  349,114

 

12      Other Receivables

.  Parent Company  Consolidated 
  09.30.2015  12.31.2014  09.30.2015  12.31.2014 
Transfer CDE (12.1)  -  -  297,780  210,808 
Services in progress (a)  10,955  10,795  129,024  96,107 
Advance payments to suppliers (b)  5  -  87,725  95,311 
Advance for severance estate  -  -  32,787  16,159 
Advance payments to employees  2,371  1,537  30,965  24,452 
Decommissioning in progress  -  -  27,626  11,211 
Other receivables  269  666  57,395  47,094 
  13,600  12,998  663,302  501,142 
Current  13,600  12,695  627,949  415,818 
Noncurrent  -  303  35,353  85,324 
(a) This item refers to services currently in progress w ithin the Company, most of w hich are related to the Research and Development and Energy Efficiency programs, w hich upon conclusion are offset against the respective liability recorded for this purpose, in compliance w ith the applicable regulations.
(b) Refers to advances to suppliers provided on contractual clauses.

 

12.1      CDE Transfer

The balance due on September 30, 2015 refers to CDE funds to cover tariffs discounts for users of public distribution service since 2013, according to Decree No. 7.891 of January 23, 2013.

ANEEL approved the monthly amount of R$28,697 (Resolution No. 1.763/14) to be transferred to Copel Distribuição, in CDE funds, from June 2014 to May 2015, R$26,712 to cover tariffs discounts and R$1,985 regarding the difference between the estimated and actual sums during the period from February 2013 to May 2014.

Following the publication of Ratification Resolution 1858 on February 27, 2015, which ratifies the results of the extraordinary rate review of the electricity distribution concession operators, the monthly pass-through of Copel Distribuição was changed to R$36,475, for the period March to May 2015.

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As a result of Copel Distribuição's 2015 Tariff Adjustment, approved by Resolution 1897, of 06.16.2015, the monthly installment amount was established at R$37,713 for the period from June 2015 to May 2016, and R$8,805 related to the financial settlement for the difference between the  forecast and actual amounts for the period from June 2014 to May 2015.  

The Company received in 2014 installments up to the May 2014. Until September 2015, the Company received installments from June to December 2014 and January 2015. In October 2015, received the amount of R$138,122 for the period from February to May 2015. The Company expects to receive the remainder as soon as the CDE has its funds restored with the 2015 quotas.

13      Inventories

Consolidated     
Operation / Maintenance  09.30.2015  12.31.2014 
Copel Distribuição  93,324  101,399 
Copel Geração e Transmissão  29,130  29,389 
Copel Telecomunicações  11,358  17,684 
Compagás  2,139  2,150 
  135,951  150,622 

 

14      Income Tax, Social Contribution and Other Taxes

14.1      Income Tax (IR) and Social Contribution (CSLL)

.  Parent Company  Consolidated 
  09.30.2015  12.31.2014 09.30.2015 12.31.2014
Current assets         
IR and CSLL paid in advance  122,490  114,730 352,911 448,599
IR and CSLL to be offset against liability  -  (35,818) (183,935) (343,525)
  122,490  78,912 168,976 105,074
Noncurrent assets         
IR and CSLL paid in advance  76,929  114,195 92,074 128,615
  76,929  114,195 92,074 128,615
Current liabilities         
IR and CSLL due  -  38,260 510,403 653,406
IR and CSLL to be offset against asset  -  (35,818) (183,935) (343,525)
  -  2,442 326,468 309,881

 

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14.2      Deferred Income Tax and Social Contribution

14.2.1     Changes in Deferred Income Tax and Social Contribution

Parent Company      Recognized in other   
  Balance as of  Recognized  comprehensive  Balance as of 
  January 1, 2015  in income  income  September 30, 2015 
Noncurrent assets         
Provisions for legal claims  101,090  5,498  - 106,588 
Amortization - concession  18,598  1,483  - 20,081 
Tax losses and negative tax basis  -  38,217  - 38,217 
Provision for financing  3,457  -  - 3,457 
CPC 33 effects - employee benef its  2,000  -  - 2,000 
Allow ance for doubtful debts  1,478  -  - 1,478 
Provision for negative equity in subsidiaries  -  1,346  - 1,346 
Others  2,751  2,683  - 5,434 
  129,374  49,227  - 178,601 
(-) Noncurrent liabilities    163  -  
Provisions for negative goodw ill  25,297  -  - 25,297 
CPC 38 effects - financial instruments  5,851  -  (122) 5,729 
CPC 08 effects - transaction costs  -  4,083  - 4,083 
  31,148  4,083  (122) 35,109 
Net  98,226  45,144  122 143,492 

 

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Consolidated      Recognized in other   
  Balance as of  Recognized  comprehensive  Balance as of 
  January 1, 2015  in income  income  March 31, 2015 
Noncurrent assets         
Provisions for legal claims  467,565 55,979 - 523,544 
CPC 01 effects - impairment of assets  274,476 - - 274,476 
Private pension and health plans  220,371 26,890 - 247,261 
Provision for energy purchases  155,614 35,831 - 191,445 
Tax losses and negative tax basis  14,574 78,674 - 93,248 
Allow ance for doubtful debts  61,174 56,344 - 117,518 
Provision of Research and Development  93,581 22,337 - 115,918 
CPC 33 ef fects - employee benef its  83,939 - - 83,939 
ICPC 01 effects - concession contracts  46,259 1,191 - 47,450 
Amortization - concession  36,942 1,483 - 38,425 
Social security contributions - injunction on judicial deposit  29,607 4,844 - 34,451 
Rate flag  - 17,346 - 17,346 
Provision for tax losses  17,114 595 - 17,709 
Provision for profit sharing  30,438 (21,300) - 9,138 
Others  32,292 8,432 (216) 40,508 
  1,563,946 288,646 (216) 1,852,376 
(-) Noncurrent liabilities         
Sectoral f inancial assets  353,989 140,256 - 494,245 
CPC 27 effects - deemed cost  585,781 (36,737) - 549,044 
ICPC 01 effects - concession contracts  19,113 43,823 - 62,936 
Deferment of capital gains  39,618 (16,979) - 22,639 
Provisions for negative goodw ill  25,297 - - 25,297 
CPC 38 effects - financial instruments  5,946 (96) (122 5,728 
Capitalization of financial charges  5,357 - - 5,357 
Others  18,017 1,260 - 19,277 
  1,053,118 131,527 (122) 1,184,523 
Net  510,828 157,119 (94) 667,853 
Assets presented in the Statement of Financial Position  526,046     667,853 
(-) Liabilities presented in the Statement of Financial Position  (15,218)     - 
Net  510,828     667,853 

 

27


 
 

 

14.3      Other recoverable taxes and other taxes due

.  Parent Company  Consolidated 
  09.30.2015  12.31.2014  09.30.2015 12.31.2014
Current assets         
Recoverable ICMS (VAT)  -  -  57,042 92,247
Recoverable PIS/Pasep and Cofins taxes  -  -  74,295 69,771
PIS/Pasep and Cofins to be offset against liabilities  -  -  (68,964) (66,263)
Other recoverable taxes  -  -  582 530
  -  -  62,955 96,285
Noncurrent assets         
Recoverable ICMS (VAT)  -  -  33,755 34,977
PIS/Pasep and Cofins taxes  -  -  54,725 55,206
Other recoverable taxes  14  -  33,308 33,298
  14  -  121,788 123,481
Current liabilities         
ICMS (VAT) payable  -  -  146,530 85,674
PIS/Pasep and Cofins payable  1,304  5,568  112,109 97,758
PIS/Pasep and Cofins to be offset against assets  -  -  (68,964) (66,263)
IRRF on JSCP  -  -  - 2,222
Ordinary financing of taxes w ith the federal tax authorities  -  -  44,106 -
Other taxes  67  29  10,343 17,938
  1,371  5,597  244,124 137,329
Noncurrent liabilities         
Social security contributions - injunction on judicial deposit  1,300  820  101,466 87,129
Ordinary financing of taxes w ith the federal tax authorities  -  -  154,369 -
Other taxes  -  -  391 -
  1,300  820  256,226 87,129

 

14.4      Reconciliation of the provision for Income Tax (IRPJ) and Social Contribution (CSLL)

.  Parent Company  Consolidated 
  09.30.2015 09.30.2014 09.30.2015 09.30.2014
Income before IRPJ and CSLL  751,989 934,912 1,278,175 1,495,590
IRPJ and CSLL (34%)  (255,676) (317,870) (434,580) (508,501)
Tax effects on:  - - - -
Equity in income  300,395 351,050 46,555 40,817
Dividends  238 201 238 201
Finam  - 432 - 432
Non deductible expenses  (30) (13) (3,080) (4,866)
Tax incentives  - (20) 2,131 5,446
Income and social contribution tax loss carry-forw ards  - - 369 36,303
Difference betw een the calculation bases of deemed profit and taxable profit  - - (32,812) (749)
Others  - - 6,443 79
Current IRPJ and CSLL  (217) - (571,855) (674,926)
Deferred IRPJ and CSLL  45,144 33,780 157,119 244,088
Effective rate - %  -6.0% -3.6% 32.4% 28.8%

 

In relation to the provisions introduced by Law 12973/2014 and Normative Instruction 1515/2014, which made changes to the IRPJ, CSLL, PIS and Cofins taxes effective from January 1, 2015, from this date, the Company and its wholly owned subsidiaries have been ascertaining their taxes by applying the provisions of those laws.

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15      Judicial Deposits

.    Parent Company    Consolidated 
  09.30.2015  12.31.2014  09.30.2015  12.31.2014 
Taxes claims  270,680  272,462  455,309  437,100 
Labor claims  1,026  1,085  159,503  144,251 
Civil         
Suppliers  -  -  2,828  95,558 
Civil  389  389  82,567  43,412 
Easements  -  -  7,761  8,036 
Customers  -  -  3,519  3,391 
  389  389  96,675  150,397 
Others  -  -  3,325  4,505 
  272,095  273,936  714,812  736,253 

 

29


 
 

 

16      Related parties

.  Parent Company  Consolidated 
  09.30.2015  12.31.2014  09.30.2015  12.31.2014 
Controlling shareholders         
State of Paraná (16.1)  153,300  137,137  153,300  137,137 
  153,300  137,137  153,300  137,137 
Subsidiaries         
Dividends and/or interests on own capital         
Copel Geração e Transmissão  24,000  202,617  -  - 
Copel Distribuição  89,491  124,791  -  - 
Copel Telecomunicações  31,300  31,300  -  - 
Compagás  3,656  7,312  -  - 
Elejor  25,310  3,189  -  - 
UEG Araucária  -  6,267  -  - 
Others  1,031  968  -  - 
  174,788  376,444  -  - 
Structure Sharing         
Copel Renováveis  312  1,137  -  - 
Copel Participações  135  788  -  - 
  447  1,925  -  - 
Financing tranferred - STN         
Copel Distribuição (16.2)  106,491  71,197  -  - 
  106,491  71,197  -  - 
Mutual         
Copel Telecomunicações (16.3)  3,711  -  -  - 
  3,711  -  -  - 
Associate and Jointly-controlled companies         
Dividends and/or interests on own capital         
Sanepar  6,590  6,211  6,590  6,211 
Dominó Holdings  -  1,211  4,257  4,072 
Integração Maranhense  -  -  1,069  227 
Matrinchã  -  -  8,116  8,116 
Guaraciaba  -  -  3,930  3,930 
Others  127  -  714  3,776 
.  6,717  7,422  24,676  26,332 
Mutual         
Voltalia São Miguel do Gostoso  24,229  -  24,229  - 
.  24,229  -  24,229  - 
Other investments  11  -  11  - 
  469,694  594,125  202,216  163,469 
Current assets - Dividends receivable  181,516  383,866  24,687  26,332 
Current assets - related parties  447  1,925  -  - 
Noncurrent assets  287,731  208,334  177,529  137,137 

 

16.1      Credit related to “Luz Fraterna”

During the 2065th Board Meeting held on September 9, 2013, Copel’s board approved the transfer of the debt owed by the Parana State Government for the Luz Fraterna Program from Copel Distribuição S.A. to Copel. They also approved a change in procedures so that future debts originating from that government program are assumed by Copel

30


 
 

On May 13, 2014, Aneel approved the transaction by issuing decision number 1,560. On May 31, 2014 a Credit Assignment Agreement was entered into, whereby the receivables held by Copel Distribuição from the Luz Fraterna account for the period from September 2010 to February 2014 were transferred to Copel. Late payment charges (fine of 2%, inflation adjustment using the IGP-M and monthly interest of 1%) were also transferred, and the total amount reached R$115,696, with maturity on May 31, 2014. Copel in turn passed the same amount on to Copel Distribuição to settle overdue bills.

Under that agreement, Copel Distribuição will transfer receivables to Copel every six months, consisting of subsequent revenues earned and related late payment charges (fine of 2%, inflation adjustment using the IGP-M and monthly interest of 1%) referring to the Luz Fraterna Program which were not settled as from March 1, 2014. In this context, in 2014, was transferred the amount of R$21,441 and in 2015, the amount of R$16,163. Copel in turn is due to pass the same amount on to Copel Distribuição to settle overdue bills.

If Copel defaults on its obligation to pass the funds on to Copel Distribuição, the amounts will be adjusted for inflation using the IGP-M applicable until the actual transfer.

Under the Credit Assignment Agreement Copel will issue a debt note against Parana State Government. An adjustment for inflation using the IGP-M and monthly interest of 1% will be applied to the amount due from the date the debt note is issued until its actual payment by the Parana State Government.

16.2      Financing transferred - STN

The Company transferred loans and financing to its wholly owned subsidiaries at the time of constitution in 2001. However, since the contracts for the transfers to the respective subsidiaries were not formalized with the financial institutions, they remain recognized in the parent company.

This financing was transferred bearing the same charges assumed by the Company and is reported separately, as a receivable from the wholly owned subsidiaries, and as liabilities for loans and financing in the subsidiaries (Note 22).

16.3      Loan - Copel Telecomunicações S.A.

On June 12, 2015, Copel Telecomunicações S.A. (Borrower) entered into a loan agreement with Copel (Lender) in the amount of R$20,000 to fund the borrower's investments. The agreement will be effective through December 31, 2016 and bears interest at the rate of 111.5% of the CDI (interbank deposit certificate). The amounts of R$3,800, released on June 15, 2015, and of R$3,600, released on August 3,2015, have already been settled, generating finance income of R$113.

16.4      Loan - Voltalia São Miguel do Gostoso Participações S.A.

On 02.03.2015, a loan agreement was signed between Copel (Lender) and Voltalia São Miguel do Gostoso Participações S.A. (Borrower), in the amount of R$29,400, with a two year term and a remuneration of 111.5% of the Interbank Deposit Certificate (CDI), aiming at providing working capital for financing the Borrower's activities and business.  In 2015, a financial income of R$2,349 was recorded.

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17      Investments

17.1      Changes in investments

Parent Company Balance as of
January 1, 2015
Equity Equity
valuation
adjustments
Investiment/
Advance for future
capital increase
Amortization Proposed
dividends
and JCP
Balance as of
September 30, 2015
Subsidiaries (17.2)               
Copel Geração e Transmissão  6,484,578 704,463 330 -  - (1,253,544) 5,935,827 
Copel Distribuição  4,329,575 98,199 86 939,000  - - 5,366,860 
Copel Telecomunicações  417,157 43,428 - 39,600  - - 500,185 
Copel Renováveis  (2,145) (7,104) - 9,249  - - - 
Copel Participações  228,382 12,394 6,580 1,500  - - 248,856 
UEG Araucária  190,415 55,672 - -  - (44,266) 201,821 
Compagás  141,793 9,403 - -  - - 151,196 
Elejor  59,370 4,232 - -  - (30,490) 33,112 
Elejor - concession rights  16,024 - - -  (565) - 15,459 
São Bento  129,021 (30,967) - 62,975  - - 161,029 
São Bento - concession rights  88,837 - - -  (2,123) - 86,714 
Cutia  56,278 (1,171) - 16,525  - - 71,632 
Cutia - direito de autorização  8,712 - - -  - - 8,712 
Nova Asa Branca I  12,337 (6,961) - 24,400  - (2) 29,774 
Nova Asa Branca I - concession rights  54,979 - - -  (279) - 54,700 
Nova Asa Branca II  15,362 (6,138) - 7,000  - (2) 16,222 
Nova Asa Branca II - concession rights  55,087 - - -  - - 55,087 
Nova Asa Branca III  15,764 (8,435) - 53,300  - (2) 60,627 
Nova Asa Branca III - direito de autorização  53,342 - - -  (126) - 53,216 
Nova Eurus IV  11,693 (7,652) - 36,550  - (2) 40,589 
Nova Eurus IV - concession rights  56,583 - - -  (210) - 56,373 
Santa Maria  62,024 975 - -  - (16) 62,983 
Santa Maria - concession rights  29,421 - - -  (402) - 29,019 
Santa Helena  68,189 132 - -  - (39) 68,282 
Santa Helena - concession rights  31,674 - - -  (397) - 31,277 
Ventos de Santo Uriel  15,034 (334) - 13,600  - - 28,300 
Ventos de S. Uriel - concession rights  14,871 - - -  (167) - 14,704 
  12,644,357 860,136 6,996 1,203,699  (4,269) (1,328,363) 13,382,556 
Joint Ventures (17.3)          -    
Voltalia São Miguel do Gostoso I  52,421 (3,988) - 7,805  - (127) 56,111 
Voltalia São Miguel do Gostoso - concession rights  11,693 - - -  (94) - 11,599 
Paraná Gás (17.3.1)  - - - 114  - - 114 
  64,114 (3,988) - 7,919  (94) (127) 67,824 
Associates (17.4)               
Sanepar  282,311 23,591 8,419 -  - (15,492) 298,829 
Dona Francisca Energética  53,908 5,740 - -  - (13,687) 45,961 
Foz do Chopim Energética  14,907 7,636 - -  - (8,110) 14,433 
Carbocampel  1,521 (2) - 19  - - 1,538 
Dois Saltos  720 (599) - -  - - 121 
Copel Amec  192 6 - -  - - 198 
Escoelectric  134 (41) - 148  - - 241 
  353,693 36,331 8,419 167  - (37,289) 361,321 
Other investments               
Finam  1,322 - - -  - - 1,322 
Finor  223 - (44) -  - - 179 
Investco S.A.  9,394 - 60 -  - - 9,454 
Other investments  6,692 - (376) -  - - 6,316 
  17,631 - (360) -  - - 17,271 
  13,079,795 892,479 15,055 1,211,785  (4,363) (1,365,779) 13,828,972 

 

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Consolidated Balance as of
January 1, 2015
Equity Equity
valuation
adjustments
Investiment/
Advance for future
capital increase
Proposed
dividends
and JCP
Amortization Balance as of
September 30, 2015
Joint Ventures (17.3)               
Dominó Holdings  225,334  17,220 6,580 -  (10,413) - 238,721 
Voltalia  52,421  (3,988) - 7,805  (127) - 56,111 
Voltalia - direito de autorização  11,693  - - -  - (94) 11,599 
Paraná Gás (17.3.1)  -  - - 114  - - 114 
Costa Oeste  23,924  4,861 - 2,984  - - 31,769 
Marumbi  63,747  10,141 - 2,211  - - 76,099 
Transmissora Sul Brasileira  73,291  1,421 - 664  - - 75,376 
Caiuá  44,761  7,330 - -  - - 52,091 
Integração Maranhense  91,835  12,128 - 2,352  (841) - 105,474 
Matrinchã  443,262  38,752 - 132,177  - - 614,191 
Guaraciaba  145,979  16,917 - 76,848  - - 239,744 
Paranaíba  68,308  8,670 - 22,050  - - 99,028 
Mata de Santa Genebra  26,151  740 - 2,756  - - 29,647 
Cantareira  15,273  378 - 23,352  - - 39,003 
  1,285,979  114,570 6,580 273,313  (11,381) (94) 1,668,967 
Associates (17.4)               
Sanepar  282,311  23,591 8,419 -  (15,492) - 298,829 
Dona Francisca  53,908  5,740 - -  (13,687) - 45,961 
Foz do Chopim  14,907  7,636 - -  (8,110) - 14,433 
Carbocampel  1,521  (2) - 19  - - 1,538 
Dois Saltos  720  (599) - -  - - 121 
Copel Amec  192  6 - -  - - 198 
Escoelectric  134  (41) - 148  - - 241 
  353,693  36,331 8,419 167  (37,289) - 361,321 
Other investments               
Finam  1,322  - - -  - - 1,322 
Finor  223  - (44) -  - - 179 
Investco S.A.  9,394  - 60 -  - - 9,454 
Assets for future use  1,652  - - -  - - 1,652 
Other investments  7,887  - (376) -  - - 7,511 
  20,478  - (360) -  - - 20,118 
  1,660,150  150,901 14,639 273,480  (48,670) (94) 2,050,406 

 

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17.2      Subsidiaries

   Headquarters  Main activity  Interest %
09.30.2015      Copel Copel 
GeT
Copel
Ren
São
Bento
Cutia Noncontrolling
shareholders
Copel Geração e Transmissão S.A. (Copel GeT)  Curitiba/PR  Production and transmission of electricity  100  -  -  -  -  - 
Copel Distribuição S.A.  Curitiba/PR  Distribution and marketing of electricity  100  -  -  -  -  - 
Copel Telecomunicações S.A.  Curitiba/PR  Telecommunication and communication  100  -  -  -  -  - 
Copel Renováveis S.A.  Curitiba/PR  Production of electricity from w ind sources  100  -  -  -  -  - 
Copel Participações S.A.(Copel PAR)  Curitiba/PR  Control and management of interests  100  -  -  -  -  - 
Copel Brisa Potiguar S.A. (17.2.1)  Curitiba/PR  Control and management of interests  -  -  100  -  -  - 
Nova Asa Branca I Energias Renováveis S.A. (a)  S. Miguel do Gostoso/RN Production of electricity from w ind sources  100  -  -  -  -  - 
Nova Asa Branca II Energias Renováveis S.A. (a)  Parazinho/RN  Production of electricity from w ind sources  100  -  -  -  -  - 
Nova Asa Branca III Energias Renováveis S.A. (a)  Parazinho/RN  Production of electricity from w ind sources  100  -  -  -  -  - 
Nova Eurus IV Energias Renováveis S.A. (a)  Touros/RN  Production of electricity from w ind sources  100  -  -  -  -  - 
Santa Maria Energias Renováveis S.A.  Maracanaú/CE  Production of electricity from w ind sources  100  -  -  -  -  - 
Santa Helena Energias Renováveis S.A.  Maracanaú/CE  Production of electricity from w ind sources  100  -  -  -  -  - 
Ventos de Santo Uriel S.A.  João Câmara/RN  Production of electricity from w ind sources  100  -  -  -  -  - 
Cutia Empreendimentos Eólicos SPC S.A.  São Paulo/SP  Control and management of interests  100  -  -  -  -  - 
Companhia Paranaense de Gás - Compagás  Curitiba/PR  Distribution of pipeline gas  51  -  -  -  -  49 
Elejor - Centrais Elétricas do Rio Jordão S.A.  Curitiba/PR  Production of electricity  70  -  -  -  -  30 
UEG Araucária Ltda.  Curitiba/PR  Production of electricity from natural gas  20  60  -  -  -  20 
São Bento Energia, Investimentos e Participações S.A. São Paulo/SP  Control and management of interests  100  -  -  -  -  - 
GE Olho D’Água S.A.  São Bento do Norte/RN  Production of electricity from w ind sources  -  -  -  100  -  - 
GE Boa Vista S.A.  São Bento do Norte/RN  Production of electricity from w ind sources  -  -  -  100  -  - 
GE Farol S.A.  São Bento do Norte/RN  Production of electricity from w ind sources  -  -  -  100  -  - 
GE São Bento do Norte S.A.  São Bento do Norte/RN  Production of electricity from w ind sources  -  -  -  100  -  - 
Central Geradora Eólica São Bento do Norte I S.A. (a)  São Bento do Norte/RN  Production of electricity from w ind sources  -  -  -  -  100  - 
Central Geradora Eólica São Bento do Norte II S.A. (a)  São Bento do Norte/RN  Production of electricity from w ind sources  -  -  -  -  100  - 
Central Geradora Eólica São Bento do Norte III S.A. (a)  São Bento do Norte/RN  Production of electricity from w ind sources  -  -  -  -  100  - 
Central Geradora Eólica São Miguel I S.A. (a)  São Bento do Norte/RN  Production of electricity from w ind sources  -  -  -  -  100  - 
Central Geradora Eólica São Miguel II S.A. (a)  São Bento do Norte/RN  Production of electricity from w ind sources  -  -  -  -  100  - 
Central Geradora Eólica São Miguel III S.A. (a)  São Bento do Norte/RN  Production of electricity from w ind sources  -  -  -  -  100  - 
Usina de Energia Eólica Guajiru S.A. (a)  Curitiba/PR  Production of electricity from w ind sources  -  -  -  -  100  - 
Usina de Energia Eólica Jangada S.A. (a)  Curitiba/PR  Production of electricity from w ind sources  -  -  -  -  100  - 
Usina de Energia Eólica Potiguar S.A. (a)  Curitiba/PR  Production of electricity from w ind sources  -  -  -  -  100  - 
Usina de Energia Eólica Cutia S.A. (a)  Curitiba/PR  Production of electricity from w ind sources  -  -  -  -  100  - 
Usina de Energia Eólica Maria Helena S.A. (a)  Curitiba/PR  Production of electricity from w ind sources  -  -  -  -  100  - 
Usina de Energia Eólica Esperança do Nordeste S.A.(a) Curitiba/PR  Production of electricity from w ind sources  -  -  -  -  100  - 
Usina de Energia Eólica Paraíso dos Ventos do                 
Nordeste S.A. (a)  Curitiba/PR  Production of electricity from w ind sources  -  -  -  -  100  - 
 
(a) Pre-operating stage.                 

 

17.2.1     Copel Brisa Potiguar S.A.

On 01.21.2015, the joint stock company Copel Brisa Potiguar S.A., wholly owned subsidiary of Copel Renováveis S.A., was incorporated with the purpose of performing the management of the windfarm enterprises related to the following Special Purpose Companies - SPCs:  Nova Asa Branca I Energias Renováveis S.A., Nova Asa Branca II Energias Renováveis S.A., Nova Asa Branca III Energias Renováveis S.A., Nova Eurus IV Energias Renováveis S.A., Santa Maria Energias Renováveis S.A., Santa Helena Energias Renováveis S.A. and Ventos de Santo Uriel S.A..

34


 
 

 

17.2.2     Summarized financial statements of subsidiaries with non-controlling interest

 
09.30.2015  Compagás  Elejor  UEG Araucária 
ASSETS  582,017 703,772 1,214,215
Current assets  218,112 55,772 818,856
Noncurrent assets  363,905 648,000 395,359
LIABILITIES  582,017 703,772 1,214,215
Current liabilities  235,700 153,371 189,250
Noncurrent liabilities  49,852 503,096 15,860
Equity  296,465 47,305 1,009,105
STATEMENT OF INCOME       
Operating revenues  1,228,211 175,343 1,406,826
Operating costs and expenses  (1,200,175) (90,474) (1,029,227)
Financial results  1,026 (74,968) 41,737
Income tax and social contribution  (10,623) (3,855) (140,970)
Net income for the period  18,439 6,046 278,366
Total comprehensive income  18,439 6,046 278,366
STATEMENTS OF CASH FLOWS       
Cash flow s from operational activities  1,062 46,810 284,304
Cash flow s from investiment activities  (62,636) (932) (27,339)
Cash flow s from financing activities  (1,296) (42,412) (252,670)
TOTAL EFFECTS ON CASH AND CASH EQUIVALENTS  (62,870) 3,466 4,295
Cash and cash equivalents at the beginning of the period  99,424 28,732 2,962
Cash and cash equivalents at the end of the period  36,554 32,198 7,257
CHANGE IN CASH AND CASH EQUIVALENTS  (62,870) 3,466 4,295

17.3      Joint ventures

        Interest %  
09.30.2015 

 Headquarters

 Main activity

Equity + Advance

for future capital

increase

 Copel

Copel

PAR 

Copel GeT 

Book value  

of share

capital

               
Dominó Holdings S.A.  Curitiba/PR Interest in sew age treatment company  487,185  -  49.00  -  238,721 
Costa Oeste Transmissora de Energia S.A.  Curitiba/PR  Transmission of electricity  62,293  -  -  51.00  31,769 
Marumbi Transmissora de Energia S.A.  Curitiba/PR  Transmission of electricity  95,124  -  -  80.00  76,099 
Transmissora Sul Brasileira de Energia S.A.  Curitiba/PR  Transmission of electricity  376,881  -  -  20.00  75,376 
Caiuá Transmissora de Energia S.A.  Curitiba/PR  Transmission of electricity  106,308  -  -  49.00  52,091 
Integração Maranhense Transmissora de Energia S.A. Rio de Janeiro/RJ Transmission of electricity 215,253 - - 49.00 105,474
Matrinchã Transmissora de Energia (TP NORTE) S.A. (a)  Curitiba/PR  Transmission of electricity 1,253,452  -  -  49.00  614,191 
Guaraciaba Transmissora de Energia (TP SUL) S.A. (a)  Curitiba/PR  Transmission of electricity  489,274  -  -  49.00  239,744 
Paranaíba Transmissora de Energia S.A. (a) Rio de Janeiro/RJ Transmission of electricity 404,197 - - 24.50 99,028
Mata de Santa Genebra Transmissão S.A. (a) Rio de Janeiro/RJ Transmission of electricity 59,176 - - 50.10 29,647
Cantareira Transmissora de Energia S.A. (a) Rio de Janeiro/RJ Transmission of electricity 79,598 - - 49.00 39,003
Voltalia São Miguel do Gostoso I Participações S.A.  São Paulo/SP  Interests in companies  114,512  49.00  -  -  56,111 
Paraná Gás Exploração e Produção S.A. (a) (17.3.1)  Curitiba/PR  Exploration of natural gas  381  30.00  -  -  114 
 
(a) Pre-operating stage

17.3.1     Paraná Gás Exploração e Produção S.A.

In February 2015, a deposit was made in a Banco do Brasil account to realize registration at the board of trade of R$114 referring to part of the capital subscribed in the company Paraná Gás Exploração e Produção S.A. which is in the process of being incorporated and in which Copel will hold an interest of 30%.

 

35


 
 

 

17.3.2     Main groups of assets, liabilities and results of joint ventures

09.30.2015 

 Dominó (a)

 Costa Oeste

 Marumbi

Transmis-  

sora Sul 

Brasileira 

 Caiuá

Integração 

Maranhense

 Matrinchã

 Guaraciaba

  Paranaíba

Mata de Santa Genebra 

 Cantareira

 Voltalia

ASSETS  495,890 101,670 158,433

742,993

237,080 468,884 2,061,673 962,072 825,407 534,996 89,233 123,910
Current assets  19,024 6,021 8,089

49,625

24,065 33,076 22,465 19,031 21,406 385,643 9,464 754
Cash and cash equivalents  3,027 3,837 6,418

23,571

3,033 160 3,954 15,786 17,211 384,815 7,927 51
Other current assets  15,997 2,184 1,671

26,054

21,032 32,916 18,511 3,245 4,195 828 1,537 703
Noncurrent assets  476,866 95,649 150,344

693,368

213,015 435,808 2,039,208 943,041 804,001 149,353 79,769 123,156
                         
LIABILITIES  495,890 101,670 158,433

742,993

237,080 468,884 2,061,673 962,072 825,407 534,996 89,233 123,910
Current liabilities  8,705 5,429 9,884

43,487

27,620 72,574 85,869 428,928 395,021 472,835 1,304 299
Financial liabilities  - 3,077 5,129

20,943

7,304 13,049 47,533 414,845 393,074 471,726 - -
Other current liabilities  8,705 2,352 4,755

22,544

20,316 59,525 38,336 14,083 1,947 1,109 1,304 299
Noncurrent liabilities  - 33,948 53,425

322,625

103,152 185,857 992,103 200,702 26,189 2,985 55,987 9,099
Financial liabilities  - 30,628 48,621

317,309

78,454 129,424 622,592 - - - - -
Advance for future capital increas  - - -

-

- 4,800 269,751 156,832 - - 47,656 -
Other noncurrent liabilities  - 3,320 4,804

5,316

24,698 51,633 99,760 43,870 26,189 2,985 8,331 9,099
Equity  487,185 62,293 95,124

376,881

106,308 210,453 983,701 332,442 404,197 59,176 31,942 114,512
                         
STATEMENT OF INCOME                         
Net operating income  - 14,120 35,056

61,471

29,427 99,983 568,316 230,444 445,005 87,802 42,704 -
Operating costs and expenses (711) (2,337) (19,139)

(29,089)

(1,212) (53,408) (444,998) (173,715) (390,301) (82,632)  (40,669) (38)
Financial results  (10,508) (1,444) (1,729)

(22,718)

(4,240) (7,440) (772) (1,848) 99 (709) 321 -
Equity in income of subsidiaries  46,368 - -

-

- - - - - - - (8,101)
Income tax and social contribution  (6) (807) (1,512

(2,562)

(9,017) (14,385) (43,460) (20,358) (19,413) (2,984) (1,585) -
Profit (loss) for the period  35,143 9,532 12,676

7,102

14,958 24,750 79,086 34,523 35,390 1,477 771 (8,139)
Other comprehensive income  13,429 - -

-

- - - - - - - -
Total comprehensive income  48,572 9,532 12,676

7,102

14,958 24,750 79,086 34,523 35,390 1,477 771 (8,139)
(a) Balances adjusted to accounting practices

17.4      Associates

09.30.2015 

 Headquarters

 Main activity

Equity + Advance

 for future capital

 increase

Interest %

Book value

of share

capital

Cia. de Saneamento do Paraná - Sanepar  Curitiba/PR  Basic sanitation  3,918,970  7.6252  298,829 
Dona Francisca Energética S.A.  Agudo/RS  Electric Pow er  199,566  23.0303  45,961 
Foz do Chopim Energética Ltda.  Curitiba/PR  Electric Pow er  40,349  35.77  14,433 
Carbocampel S.A.  Figueira/PR  Coal exploration  3,139  49.00  1,538 
Dois Saltos Empreendimentos de Geração de Energia Elétrica Ltda. (a) Curitiba/PR Electric Pow er 402 30.00 121 
Copel Amec S/C Ltda.- em liquidação  Curitiba/PR  Services  413  48.00  198 
Escoelectric Ltda.  Curitiba/PR  Services  602  40.00  241 
Sercomtel S.A. Telecomunicações (b)  Londrina/PR  Telecommunications  -  45.00  - 
(a) Pre-operating stage
(b) Investment reduced to zero in 2013 due to the impairment tests
 

36


 
 

 

17.4.1     Main groups of assets, liabilities and results of associates

09.30.2015  Sanepar (a)  Dona Francisca (a)  Foz do Chopim 
ASSETS  8,072,290 217,425 45,821
Current assets  776,979 42,574 7,607
Noncurrent assets  7,295,311 174,851 38,214
LIABILITIES  8,072,290 217,425 45,821
Current liabilities  830,174 16,735 1,602
Noncurrent liabilities  3,323,146 1,124 3,870
Equity  3,918,970 199,566 40,349
STATEMENT OF INCOME       
Net operating income  2,134,203 51,838 35,761
Operating costs and expenses  (1,617,379) (21,090) (13,376)
Financial income (expense)  (113,540) 3,994 137
Income tax and social contribution  (99,897) (9,818) (1,173)
Profit (loss) for the period  303,387 24,924 21,349
Other comprehensive income  110,412 - -
Total comprehensive income for the period  413,799 24,924 21,349
(a) Balances adjusted to accounting practices

18      Property, Plant and Equipment

18.1      Asset by type of account – in service and in progress

Consolidated Cost

Accumulated

 depreciation

09.30.2015 Cost Accumulated depreciation 12.31.2014
In service             
Reservoirs, dams and aqueducts  7,620,521 (4,751,788) 2,868,733 7,619,405 (4,642,025) 2,977,380
Machinery and equipment  5,689,071 (2,748,105) 2,940,966 5,256,847 (2,720,761) 2,536,086
Buildings  1,651,859 (1,059,354) 592,505 1,520,232 (1,029,827) 490,405
Land  277,620 (7,258) 270,362 277,620 (5,214) 272,406
Vehicles  48,513 (35,869) 12,644 44,388 (33,183) 11,205
Aircraft  17,067 (8,330) 8,737 17,067 (5,770) 11,297
Furniture and tools  16,713 (10,415) 6,298 16,774 (9,935) 6,839
(-) Concession extension reclassification (Note 11)  (1,440,015) 1,382,920 (57,095) - - -
(-) Provision for impairment (a)  (46,571) - (46,571) (46,571) - (46,571)
(-) Special Obligations  (13) - (13) (14) - (14)
  13,834,765 (7,238,199) 6,596,566 14,705,748 (8,446,715) 6,259,033
In progress             
Cost  2,863,773 - 2,863,773 2,805,865 - 2,805,865
(-) Provision for impairment (a)  (760,710) - (760,710 (760,710) - (760,710)
  2,103,063 - 2,103,063 2,045,155 - 2,045,155
  15,937,828 (7,238,199) 8,699,629 16,750,903 (8,446,715) 8,304,188
(a) Refers to concession assets for electricity generation.
 

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18.2      Changes in Property, Plant and Equipment

Consolidated 

Balance as of 

January 1, 2015

 Additions

  Depreciation

 Write-offs

 Transfers

Balance as of

September 30, 2015

In service             
Reservoirs, dams and aqueducts  2,977,380 - (109,791) - 1,116 2,868,705
Machinery and equipment  2,536,087 - (146,612) (16,629) 576,520 2,949,366
Buildings  490,403 - (24,940) (50) 118,865 584,278
Land  272,407 - (2,044) - - 270,363
Vehicles  11,204 - (2,757) (78) 4,238 12,607
Aircraft  11,297 - (2,560) - 1 8,738
Furniture and tools  6,839 - (642) (289) 280 6,188
(-) Concession extension reclassification  - (58,654) 1,559 - - (57,095)
(-) Provision for impairment  (46,571) - - - - (46,571)
(-) Special Obligations  (14) - 1 - - (13)
  6,259,032 (58,654) (287,786) (17,046) 701,020 6,596,566
In progress             
Cost  2,805,866 763,849 - (568) (705,374) 2,863,773
(-) Provision for impairment  (760,710) - - - - (760,710)
  2,045,156 763,849 - (568) (705,374) 2,103,063
  8,304,188 705,195 (287,786) (17,614) (4,354) 8,699,629

18.3      Colíder Hydroelectric Power Plant (HPP)

On July 30, 2010, at the Aneel Auction of Power from New Projects 003/10, Copel Geração e Transmissão won the rights to the concession of the Colíder Hydroelectric Power Plant, which will feature 300 MW of installed capacity; the concession is valid for 35 years from the date of signature of Concession Contract no. 001/11-MME-HPP Colíder, which took place on January 17, 2011.

This project is included in the Federal Government’s Growth Acceleration Program (PAC) and will comprise a main powerhouse rated 300 MW, which is enough to supply approximately one million people. The facility will take advantage of the hydroelectric potential discovered on the Teles Pires River, between the towns of Nova Canaã do Norte and Itaúba, in the northern region of the State of Mato Grosso

The National Bank for Economic and Social Development (BNDES) approved the classification of the HPP Colíder project for financial support feasibility analysis and the signed financing agreement, amounted to R$1,041,155, in December 2013 was released the amount of R$840,106 as note 22.

The schedule for the beginning of operations went through a few adjustments.  Unit 1's date for the beginning of commercial operations, initially forecast for 04.30.2016, was transferred to the second semester of 2016.  Due to a delay in the construction work's schedule, a provision was recorded for impairment loss for the assets in December 2014, in the amount of R$678,529, as per Note 18.11 of the financial statements for the year ended 12.31.2014. 

The Colíder Hydroelectric Power Plant’s power output was sold at an Aneel auction at a final price of R$103.40/MWh, as of July 1, 2010, adjusted according to the variation of the IPCA inflation index to R$145.26/MWh as of September 30, 2015. A total of 125 averages MW were sold, for supply starting in January 2015 for 30 years. Copel Geração e Transmissão submitted an application to Aneel to exclude its responsibility, so that the obligation to supply energy could be extended. The application is being analyzed by Aneel.

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The assured power of the project, established in its concession agreement, was 179.6 averages MW, after full motorization.

The expenditures in this venture on September 30, 2015 totaled R$1,889,436.

Total commitments already assumed with suppliers of equipment and services in connection with the Colíder Hydroelectric Power Plant amounted to R$160,897 as of September 30, 2015.

18.4      Consórcio Tapajós

Copel Geração e Transmissão has signed a Technical Cooperation Agreement with eight other companies of the sector to conduct studies on the Tapajós and Jamanxim Rivers, in the North Region of Brazil, comprising an integrated environmental assessment of the Tapajós River Basin and viability and environmental studies of five hydroelectric projects, totaling 10,682 MW of installed capacity.

The expenditures on this project on September 30, 2015 totaled R$14,359.

18.5      Consórcio Empreendedor Baixo Iguaçu

Copel Geração e Transmissão participates with 30% in the consortium to build and operate the Baixo Iguaçu Hydroelectric Power Plant, with a minimum installed capacity of 350.20 MW, located in Rio Iguaçu, between the municipalities of Capanema and Capitão Leônidas Marques, and between HPP Governador José Richa and the Iguaçu National Park, in Paraná State.

The start of commercial operation of Unit 1 is scheduled for December 31, 2017 and Units 2 and 3 for January and February 2018, respectively, and should be changed due to the suspension of the Installation License, as per the decision of the Federal Court of the 4th Region (TRF-RS), held on June 16, 2014, and that paralyzed the works as of its receipt on July 7, 2014.

In March 2015, a decision authorizing the Company to resume construction work was published. However, ICMBio imposed additional conditions for granting an environmental license to the Company, which prevented it from resuming construction work immediately. Cebi sent IAP – Environmental Institute of Paraná the information necessary for those conditions to be met and in August 2015 the license was issued. Having obtained the IAP license, the consortium is taking action to allow construction work to be resumed as soon as possible.

As of September 30, 2015 the expenses incurred on this venture amounted to R$246,622.

18.6      Commitments with wind farms

Total commitments assumed with suppliers of equipment and services related to wind farms amounted to R$252,320 on September 30, 2015.

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19      Intangible Assets

19.1      Changes in intangible assets

      Concession contract

Concession and

authorization

 rights

Other  
in in Special liabilities  
  service progress in service  progress

in service

in progress

Consolidated
Balance as of January 1, 2015  497,289 1,435,463 (24,337) (199,650) 423,722 24,753 16,916 2,174,156
Acquisitions  - 728,301 - - - - 7,622 735,923
Customers contributions  - - - (184,239) - - - (184,239)
ANEEL grant - use of public property  - 896 - - - - - 896
Transfers to accounts receivable related to concession -                 
Renew al of Copel Distribuição’s Concession  527,834 (1,110,999) (168,180) 230,504 - - - (520,841)
Transfers from property, plant and equipment  - - - - - - 2,587 2,587
Capitalizations for accounts receivable related                 
to concession (Note 10.1)  - (576,439) - 95,689 - - - (480,750)
Capitalizations for intangible in service  336,159 (336,159) (57,696) 57,696 - 4,901 (4,901) -
Amortization of quotas - concession and authorization  (257,692) - 51,491 - (4,269) (6,749) - (217,219)
Amortization of quotas - Pasep/Cofins credits  (10,921) - 2,028 - - 14 - (8,879)
Write-offs  471 (17,824) (287) - - (3) (64) (17,707)
Balance as of September 30, 2015  1,093,140 123,239 (196,981) - 419,453 22,916 22,160 1,483,927

20      Payroll, Social Charges and Accruals

  Parent Company    Consolidated 
Consolidated  09.30.2015  12.31.2014  09.30.2015  12.31.2014 
Social security liabilities         
Taxes and social contribution  1,914  2,680  27,642  35,975 
Social security charges on paid vacation and 13th  2,799  2,006  41,311  32,306 
  4,713  4,686  68,953  68,281 
Labor liabilities         
Payroll, net  -  23  1,248  1,252 
Vacation and 13th salary  8,463  5,441  127,776  89,830 
Profit sharing  1,168  2,643  29,858  93,153 
Others  -  -  9  102 
  9,631  8,107  158,891  184,337 
  14,344  12,793  227,844  252,618 

21      Suppliers

Consolidated    09.30.2015  12.31.2014 
Energy supplies (21.1)    1,018,301  757,174 
Materials and supplies    522,647  509,674 
Natural gas for resale    174,054  252,103 
Charges for use of grid system    111,016  85,879 
    1,826,018  1,604,830 
  Current  1,811,769  1,587,205 
  Noncurrent  14,249  17,625 
 

 

40


 
 

 

21.1      CCEE

On July 1, 2015, Copel Geração e Transmissão, as a co-plaintiff in a lawsuit filed by the Brazilian Association of Independent Electricity Producers - Apine, obtained a prohibitory injunction granted by the 20th Federal Court of Brasilia prohibiting ANEEL from adjusting the Energy Reallocation Mechanism - MRE for the group of companies associated with Apine if the total amount of MRE is lower than the percentage of the maximum megawatts of energy that may be used to prove that demand is met or may be marketed under purchase and sale agreements, until there is a hearing to finally determine the matter in dispute. This injunction was granted by a lower court judge and both ANEEL and the federal government may appeal. Given that the Company's legal counsel considers that a favorable ruling on the merits of the case is possible, R$125,258 was recognized in profit or loss as energy cost and the R$57,046 received upon the settlement made at the Electricity Trade Chamber (CCEE) in August was recognized as a liability. On September 30, 2015 the liability payable to CCEE and calculated by applying the Energy Adjustment Factor - GSF is R$182,304.

 

 

41


 
 

 

21.2      Main Power purchase agreements

The power purchase agreements signed in the regulated power-trading environment, shown at original value and adjusted annually according to the IPCA inflation index:

 

Supply

 period 

Energy purchased

(annual average MW) 

Auction

date 

Average purchase

 price (R$/MWh) 

Auction of power from existing facilities       
2nd Auction - Product 2008  2008 to 2015  52.05  04.02.2005  83.13 
4th Auction - Product 2009  2009 to 2016  45.01  10.11.2005  94.91 
12th Auction-Product 2014 18M  01/01/2014 to 06/30/2015  9.67  12.17.2013  165.20 
12th Auction-Product 2014 36M  01/01/2014 to 12/31/2016  162.86  12.17.2013  149.99 
13th Auction-Product 2014 - DIS  05/01/2014 to 12/31/2019  109.05  04.30.2014  262.00 
13th Auction-Product 2014 - QTD  05/01/2014 to 12/31/2019  278.97  04.30.2014  271.00 
14th Auction-Product 2015 - 03 DIS  05/01/2014 to 12/31/2017  13.28  12.05.2014  191.99 
14th Auction-Product 2015 - 03 QTD  05/01/2014 to 12/31/2017  17.32  12.05.2014  201.00 
18th Auction-Product 2015 06M  01/01/2015 to 06/30/2015  148.76  01.15.2015  385.87 
    836.97     
Auction of power from new facilities       
1st Auction- Product 2008 Hidro  2008 to 2037  3.61  12.16.2005  106.95 
1st Auction- Product 2008 Termo  2008 to 2022  24.75  12.16.2005  132.26 
1st Auction- Product 2009 Hidro  2009 to 2038  3.54  12.16.2005  114.28 
1st Auction- Product 2009 Termo  2009 to 2023  40.44  12.16.2005  129.26 
1st Auction- Product 2010 Hidro  2010 to 2039  69.87  12.16.2005  115.04 
1st Auction- Product 2010 Termo  2010 to 2024  65.01  12.16.2005  121.81 
3rd Auction- Product 2011 Hidro  2011 to 2040  57.66  10.10.2006  120.86 
3rd Auction- Product 2011 Termo  2011 to 2025  54.22  10.10.2006  137.44 
4th Auction- Product 2010 Termo  2010 to 2024  15.44  07.26.2007  134.67 
5th Auction- Product 2012 Hidro  2012 to 2041  53.24  10.16.2007  129.14 
5th Auction- Product 2012 Termo  2012 to 2026  115.38  10.16.2007  128.37 
6th Auction- Product 2011 Termo  2011 to 2025  9.89  09.17.2008  128.42 
7th Auction- Product 2013 Hidro  2013 to 2042  -  09.30.2008  98.98 
7th Auction- Product 2013 Termo  2013 to 2027  110.96  09.30.2008  145.23 
8th Auction- Product 2012 Hidro  2012 to 2041  0.01  08.27.2009  144.00 
8th Auction- Product 2012 Termo  2012 to 2026  0.15  08.27.2009  144.60 
    624.17     
Structuring projects auction         
Santo Antonio  2012 to 2041  126.38  12.10.2007  78.87 
Jirau  2013 to 2042  247.00  05.19.2008  71.37 
    373.38     

42


 
 

 

22      Loans and Financing

                Consolidated 
Contracts Company Issue Date Number of
installment
Final
maturity
Annual rate p.y.
(interest + commission)
Principal 09.30.2015 12.31.2014
Foreign currency                 
  STN                 
(1) Par Bond  Copel  05.20.1998  1  01.11.2024  6,0% + 0,20% 17,315  63,280  42,107 
(1) Discount Bond  Copel  05.20.1998  1  01.11.2024  1,1875%+0,20% 12,082  43,211  29,090 
Total foreign currency              106,491  71,197 
                 
Local currency                 
  Banco do Brasil                 
(2) 21/02155-4 Copel DIS  09.10.2010  3  08.15.2015  98,5% of DI 350,000  118,112  173,240 
(3) 21/02248-8 Copel DIS  06.22.2011  1  05.16.2018  109,0% of DI 150,000  156,343  205,642 
(4) CCB 21/11062X  Copel DIS  08.26.2013  3  07.27.2018  106,0% of DI 151,000  189,726  171,209 
(5) CCB 330600773  Copel DIS  07.11.2014  3  07.11.2019  111,8% of DI 116,667  118,771  121,175 
(5) NCI 330600132  Copel  02.28.2007  3  02.28.2019  107,8% of DI 231,000  232,469  239,075 
(5) NCI 330600151  Copel  07.31.2007  3  07.31.2017  111,0% of DI 18,000  12,254  18,878 
(5) NCI 330600609  Copel  08.19.2011  2  07.21.2016  109,41% of DI 600,000  -  629,266 
(5) CCB 306.401.381  Copel  07.21.2015  2  07.21.2018  109,40% of DI 640,005  647,492  - 
                1,475,167  1,558,485 
  Eletrobras                 
(6) 1293/94 Copel GeT  09.23.1994  180  06.30.2016  5,5% à 6,5% + 2,0% 307,713  25,143  50,237 
(7) 980/95 Copel DIS  12.22.1994  80  11.15.2018  8.0% 11  9  11 
(7) 981/95 Copel DIS  12.22.1994  80  08.15.2019  8.0% 1,169  262  311 
(7) 982/95 Copel DIS  12.22.1994  80  02.15.2020  8.0% 1,283  101  119 
(7) 983/95 Copel DIS  12.22.1994  80  11.15.2020  8.0% 11  135  154 
(7) 984/95 Copel DIS  12.22.1994  80  11.15.2020  8.0% 14  58  72 
(7) 985/95 Copel DIS  12.22.1994  80  08.15.2021  8.0% 61  37  99 
(8) 002/04 Copel DIS  06.07.2004  120  07.30.2016  8.0% 30,240  918  1,737 
(8) 142/06 Copel DIS  05.11.2006  120  09.30.2018  5,0% + 1,0% 74,340  10,918  13,588 
(8) 206/07 Copel DIS  03.03.2008  120  08.30.2020  5,0% + 1,0% 109,642  43,780  50,455 
(8) 273/09 Copel DIS  02.18.2010  120  12.30.2022  5,0% + 1,0% 63,944  11,921  13,154 
(8) 2540/06 Copel DIS  05.12.2009  60  10.30.2016  5,0% + 1,5% 5,095  487  824 
(8) 415.855-22/14 Copel DIS  03.31.2015  120  12.08.2026  6.0% 2,844  5,230  - 
                98,999  130,761 
  Finep                 
(9) 21120105-00 Copel Tel  05.17.2012  81  10.15.2020  4% 35,095  15,815  18,344 
(9) 21120105-00 Copel Tel  05.17.2012  81  10.15.2020  3,5% + TR 17,103  13,065  14,824 
                28,880  33,168 
  BNDES                 
(10) 820989.1 Copel GeT  03.17.2009  179  01.15.2028  1,63% above TJLP  169,500  140,842  149,196 
(11) 1120952.1-A Copel GeT  12.16.2011  168  04.15.2026  1,82% above TJLP  42,433  32,223  34,451 
(12) 1120952.1-B Copel GeT  12.16.2011  168  04.15.2026  1,42% above TJLP  2,290  1,739  1,859 
(13) 1220768.1 Copel GeT  09.28.2012  192  07.15.2029  1,36% above TJLP  73,122  64,309  67,700 
(14) 13211061 Copel GeT  12.04.2013  192  10.15.2031  1,49% above TJLP  1,041,155  897,781  850,782 
(15) 13210331 Copel GeT  12.03.2013  168  08.15.2028  1,49% and 1,89% above TJLP  17,644  16,342  17,273 
(16) 14205611-A Copel DIS  12.15.2014  72  01.15.2021  2,09% p.y. above TJLP  41,583  35,854  30,008 
(16) 14205611-B Copel DIS  12.15.2014  6  02.15.2021  2,09 p.y. above TR BNDES  17,821  20,400  17,874 
(17) 14205611-C Copel DIS  12.15.2014  113  06.15.2024  6% p.y. 78,921  48,601  52,170 
(18) 11211521 GE Farol  03.19.2012  192  06.15.2030  2,34% p.y. above TJLP  54,100  55,891  58,635 
(18) 11211531 GE Boa Vista  03.19.2012  192  06.15.2030  2,34% p.y. above TJLP  40,050  41,320  43,349 
(18) 11211541 GE S.B. Norte  03.19.2012  192  06.15.2030  2,34% p.y. above TJLP  90,900  93,710  98,311 
(18) 11211551 GE Olho D'Água  03.19.2012  192  06.15.2030  2,34% p.y. above TJLP  97,000  99,661  104,533 
                1,548,673  1,526,141 
  Banco do Brasil                 
  Repasse BNDES                 
(19) 21/02000-0 Copel GeT  04.16.2009  179  01.15.2028  2,13% above TJLP  169,500  140,840  149,198 
                140,840  149,198 
Total local currency              3,292,559  3,397,753 
                3,399,050  3,468,950 
              Current  274,064  867,626 
            Noncurrent  3,124,986  2,601,324 
 

 

43


 
 

 

 

    Issue  Number of Final  Annual rate p.y.    Parent Company
Contracts Date installment maturity (interest + commission) Principal 09.30.2015 12.31.2014
Moeda estrangeira               
  STN               
(1) Par Bond  05.20.1998  1  01.11.2024  6,0% + 0,20%  17,315  63,280  42,107 
(1) Discount Bond  05.20.1998  1  01.11.2024  1,1875%+0,20%  12,082  43,211  29,090 
              106,491  71,197 
Moeda nacional               
  Banco do Brasil               
(5) NCI 330600132  02.28.2007  3  02.28.2019  107,8% of DI  231,000  232,469  239,075 
(5) NCI 330600151  07.31.2007  3  07.31.2017  111,0% of DI  18,000  12,254  18,878 
(5) NCI 330600609  08.19.2011  2  07.21.2016  109,41% of DI  600,000  -  629,266 
(5) CCB 306.401.381  07.21.2015  2  07.21.2018  109,40% of DI  640,005  647,492  - 
              892,215  887,219 
              998,706  958,416 
            Circulante  29,695  349,753 
          Não circulante  969,011  608,663 

Banco do Brasil: annual installments

(2) Installments in the amount of R$ 58,334, falling due on February 2, 2017, and February 2, 2018. The proportional interest is paid half-yearly.

(3) Installments in the amount of R$ 75,000, falling due on May 16, 2017, and May 16, 2018. The proportional interest is paid half-yearly.

(4) Together w ith the data is the interest accrued on the installments, in the amount of R$ 50,333, falling due on July 27, 2016, July 27, 2017 and July 27, 2018.

(5) Contract CCB 330600773: Installments in the amount of R$ 38,889, falling due on July 11, 2017, July 11, 2018 and July 11, 2019. The interest is paid half-yearly.

     Contract NCI 330600132: Installments in the amount of R$ 77,000, falling due on February 28, 2017, February 28, 2018 and February 28, 2019. The interest is paid half-yearly.

     Contract NCI 330600151: Installments in the amount of R$ 6,000, falling due on July 31, 2015, July 31, 2016 and July 31, 2017. The interest is paid half-yearly.

Contract NCI 330600609: paid in July 21, 2015 w ith the contract CCB 306401381 resources.

     Contract CCB 306401381: Installments in the amount of R$ 320,003, falling due on July 21, 2017, and July 21, 2018. The interest is paid half-yearly.

Allocation:

(1) The restructuring of medium and long-term debt in connection w ith the financing received under Law nº 4,131/62. (2) (3) (4) Working capital.

(5) Paying the debts.

(6) Financial cover up to 29.14% of the total project of HPP Governador José Richa Implementation and transmission system. (7) National Program for Watering - Proni.

(8) Rural Electricity Program - Luz para Todos .

(9) BEL project - ultra w ide band intranet service (Ultra Wide Band - UWB).

(10) (19) Construction of the Mauá Hydroelectric Pow er Plant and its transmission system, in consortium w ith Eletrosul. (11) Implementation of transmission line betw een substations Foz do Iguaçu and Cascavel Oeste.

(12) Purchase of machinery and equipment for implementation of the transmission line described above. (13) Implementation of Cavernoso II SHP.

(14) Implementation of HPP Colíder and associated transmission system. (15) Implementation of the 230/138kV Cerquilho III Substation.

(16) Investment in preservation of businesses, improvements, operational support and general investments in expansion. (17) National machinery and equipment accredited by BNDES.

(18) Construction and implementation of w ind generating plant.

 

 

44


 
 

 

Guarantees :

(1) Company’s centralized revenues account. Deposited Collateral (Note 6.1): Par Bond in the amount of R$ 49,406 (R$ 33,525 on 12.31.2014), and Discount Bond in the amount of R$ 34,618 (R$ 23,431 on 12.31.2014).

(2) (3) Pledge until 360 days.

(2) (3) (4) (5) Credit assignment.

(6) (7) (8) Ow n revenue, supported by pow er of attorney granted by a public instrument, and the issue of promissory notes and commercial duplicates equal to the number of installments falling due.

(9) Withhold the amounts from the checking account in w hich revenues are deposited.

(10) (13) (19) Total revenue from the sale and/or transaction of CCEAR energy, related to the project, through Concession Agreement of Attachment of Revenues, Account Management and Other Covenants.

(11) (12) Fiduciary assignment of rights under the Concession Agreement no. 027/2009-ANEEL, Transmission Service Provision Contract no. 09/2010-ONS and contracts for use of Transmission System, signed by the ONS, the Dealerships and the Transmission System users, including the total income from the provision of transmission services.

(14) Fiduciary assignment of rights under the Concession Agreement no. 01/2011MME-HPP Colíder and fiduciary assignment due to the Purchase and Sale of Energy Eétrica (CCVEE) betw een Copel and Sadia S.A.

(15) Fiduciary assignment of rights under the Public Service Concession Agreement for Electric Pow er Transmission no. 015/2010-ANEEL, signed betw een Copel and the Federal Government.

(16) (17) Surety of Companhia Paranaense de Energia; fiduciary assignment of income and indemnity rights of the concession.

(18) Pledge of shares of subsidiaries belonging to the Company; fiduciary assignment of receivables from electricity sales revenue; fiduciary assignment of machinery and equipment assembled or built w ith the proceeds from this contract.

22.1      Breakdown of loans and financing by currency and index

Index and change in foreign currencies      Consolidated 
accumulated in the period (%)  09.30.2015  %  12.31.2014  % 
Foreign currency           
U.S. Dolar  49.57  106,491  3.13  71,197  2.05 
    106,491  3.13  71,197  2.05 
Local currency           
TJLP  30.00  1,620,512  47.68  1,605,429  46.28 
Ufir  0.00  73,856  2.17  80,524  2.32 
Finel  1.24  25,143  0.74  50,236  1.45 
CDI  22.13  1,475,166  43.40  1,558,486  44.93 
TR  1.25  13,065  0.38  14,824  0.43 
IPCA  7.64  20,400  0.60  17,821  0.51 
Without indexer  -  64,417  1.90  70,433  2.03 
    3,292,559  96.87  3,397,753  97.95 
    3,399,050  100.00  3,468,950  100.00 
  Current  274,064    867,626   
  Noncurrent  3,124,986    2,601,324   

22.2      Maturity of noncurrent installments

    Parent Company      Consolidated 
  Foreign  Local    Foreign  Local   
09.30.2015  currency  currency  Total  currency  currency  Total 
2016  -  2,995  2,995  -  56,875  56,875 
2017  -  393,997  393,997  -  774,869  774,869 
2018  -  391,002  391,002  -  771,035  771,035 
2019  -  76,525  76,525  -  251,708  251,708 
2020  -  -  -  -  133,074  133,074 
After 2021  104,492  -  104,492  104,492  1,032,933  1,137,425 
  104,492  864,519  969,011  104,492  3,020,494  3,124,986 
 

 

45


 
 

 

22.3      Changes in loans and financing

  Foreign currency    Local currency   
Consolidated  Current  Noncurrent  Current  Noncurrent  Total 
Balance as of January 1, 2015  596 70,601  867,030 2,530,723 3,468,950
Funding  - -  450,000 699,956 1,149,956
Charges  3,144 -  241,686 24,151 268,981
Monetary and exchange variations  - 33,891  437 3,023 37,351
Transfers  - -  237,359 (237,359) -
Amortization - principal  - -  (1,143,591) - (1,143,591)
Payment - charges  (1,741) -  (380,856) - (382,597)
Balance as of September 30, 2015  1,999 104,492  272,065 3,020,494 3,399,050

22.4      Contracts with clauses for anticipated maturity

The Company and its subsidiaries contracted loans which include clauses requiring that they maintain certain economic-financial indices within previously established parameters, as well as other conditions that have to be observed, such as: no alterations to the investment interest of the Company in the capital of subsidiaries that represents a change in control, without prior notice. Non compliance with these terms could result in the anticipated maturity of the debts and/or fines.

At September 30, 2015, all contractual covenants had been complied.

46


 
 

 

23      Debentures

 

                     
     Company Issue  Number of 

Maturity 

Annual rate p.y.    Consolidated 
Issue   Date  installment  initial  final  (interest)  Principal  09.30.2015  12.31.2014 
(1) 5th  Copel  05.13.2014  3  05.13.2017  05.13.2019  111.5% above DI  1,000,000  1,053,734  1,010,485 
(2) 1st  Copel GeT  05.20.2015  3  05.20.2018  05.20.2020  113.0% above DI  1,000,000  1,050,207  - 
(3) 1st  Copel DIS  10.30.2012  2  10.30.2016  10.30.2017  DI + Spread 0.99% p.y.  1,000,000  1,059,255  1,019,037 
(4) 2nd  Elejor  09.26.2013  60  10.26.2013  09.26.2018  DI + Spread 1.00% p.y.  203,000  121,587  152,040 
(5) 1st  Compagás  06.15.2013  40  09.15.2015  12.15.2018  TJLP+1.7% p.y.+1.0% p.y.  62,626  60,744  53,554 
(6) 1st (a) 06.10.2014 1 - 06.10.2015 100% CDI + Spread 1,45% p.y. 222,000 232,298 235,747
(7) 1st (b) 06.10.2014 1 - 06.10.2015 100% CDI + Spread 1,30% p.y. 108,000 112,956 114,585
                  3,690,781  2,585,448 
                Current  355,457  431,491 
              Noncurrent  3,335,324  2,153,957 
(a) Nova Asa Branca I, Nova Asa Branca II, Nova Asa Branca III, Nova Eurus IV e Ventos de Santo Uriel.
(b) Santa Maria e Santa Helena.

Characteristics:

The unit value of debentures w ill not be adjusted for inflation.

(1) (2) (3) (4) (6) (7) Simple debentures, single series, not convertible into shares, unsecured, for public distribution w ith restricted placement efforts, according to CVM no. 476. It w ere issued securities w ith unit value of R$ 10.

(5) Simple floating debentures, issued privately in a single series and not convertible into shares. It w ere issued securities w ith unit value of R$ 1.

Finance charges:

(1) Interest paid half-yearly in May and November. (2) Interest paid yearly in May.

(3) Interest paid half-yearly in April and October. (4) Interest paid monthly.

(5) Interest paid quarterly in March, June, September and December. (6) Interest paid half-yearly in June and December.

(7) Interest paid in a lump sum on maturity date.

Allocation:

(1) (2) (3) Working capital or used to make investments in the issuer. (4) Full settlement of the loan agreement w ith Copel.

(5) Fund investment plan of the issuer.

(6) (7) Redemption of promissory notes and investment in w ind farms.

Collaterals:

(1) (2) (3) (4) (6) (7) Personal guarantee (5) Floating

Guarantor:

(2) (3) (6) (7) Copel.

(4) Copel, at the ratio of 70% and Paineira Participações S.A., at the ratio of 30%. (5) Compagás.

Trustee:

(1) (2) (3) (4) (6) (7) Pentágono S.A. DTVM.

(5) BNDES Participações S.A. - BNDESPAR.

23.1      Changes in debentures

      Consolidated 
  Current  Noncurrent  Total 
Balance as of January 1, 2015  431,491 2,153,957  2,585,448
Funding  - 1,008,633  1,008,633
Charges  317,300 125  317,425
Transfers  (172,609) 172,609  -
Amortization - principal  (32,008) -  (32,008)
Payment - charges  (188,717) -  (188,717)
Balance as of September 30, 2015  355,457 3,335,324  3,690,781
 

 

47


 
 

 

23.2      Contracts with clauses for anticipated maturity

Copel and your subsidiaries issued debentures that contain covenants that require the maintenance of certain economic and financial indices within previously established parameters with enforceability of compliance with annual and other conditions to be observed, such as changing the shareholding of the Company in the share capital representing a change of control without the prior consent of the Debenture Holders; not making without prior written consent of the Debenture holders, payments of dividends or payments of interest on equity, if they are in arrears regarding compliance with any of their financial obligations or they do not meet the established financial indices. Failure to comply with these conditions may allow early call of the debentures.

At September 30, 2015, all contractual covenants had been complied.

24      Post-Employment Benefits

The Company and its subsidiaries sponsor retirement and pension plans (Unified Plan and Plan III) and a medical and dental care plan (Healthcare Plan) to both current and retired employees and their dependents.

24.1      Benefit Pension Plan

The unified pension plan is a Defined Benefit Plan - BD in which the income is predetermined, according to each individual's salary, and pension plan III is a Defined Contribution Plan - CD.

The costs assumed by the sponsors for these plans are recognized according to the actuarial evaluation prepared annually by independent actuaries in accordance with Technical Pronouncement CPC 33 (R1)/IAS 19 and IFRC 14, issued by the Accounting Pronouncements Committee – CPC compulsory for public stock corporations as of January 1, 2013, and refer to employee benefits, and correlated to IAS 19 (R1) and IFRIC 14. The economic and financial assumptions for purposes of the actuarial evaluation are discussed with the independent actuaries and approved by the sponsors’ management.

24.2      Healthcare Plan

The Company and its subsidiaries allocate resources for the coverage of health-care expenses incurred by their employees and their dependents, within rules, limits, and conditions set in specific regulations. Coverage includes periodic medical exams and is extended to all retirees and pensioners for life.

48


 
 

 

24.3      Statement of financial position and statement of income

Amounts recognized in the statement of financial position, under Post-Employment Benefits, are summarized below:

      Parent Company    Consolidated 
    09.30.2015  12.31.2014  09.30.2015  12.31.2014 
Pension plan    3  -  616  1,030 
Healthcare plan    9,432  8,196  977,064  897,588 
    9,435  8,196  977,680  898,618 
  Current  3  -  36,814  37,404 
  Noncurrent  9,432  8,196  940,866  861,214 

The amounts recognized in the statement of income are shown below:

    Parent Company    Consolidated 
  09.30.2015  09.30.2014  09.30.2015  09.30.2014 
Pension plan (CD)  2,984  4,083  40,613  35,802 
Pension plan (CD) - management  357  375  720  843 
Healthcare plan - post employment  1,174  1,735  106,758  76,626 
Healthcare plan - active employees  1,525  2,192  40,413  30,997 
Healthcare plan - management  59  60  105  105 
  6,099  8,445  188,609  144,373 
 
    Parent Company    Consolidated 
  07.01.2015  07.01.2014  07.01.2015  07.01.2014 
  to 09.30.2015  to 09.30.2014  to 09.30.2015  to 09.30.2014 
Pension plan (CD)  1,031  1,246  13,620  11,552 
Pension plan (CD) - management  130  126  250  281 
Healthcare plan - post employment  402  578  35,574  25,562 
Healthcare plan - active employees  528  644  13,230  10,322 
Healthcare plan - management  20  21  37  37 
  2,111  2,615  62,711  47,754 

24.4      Changes in the post-employment benefits

 Consolidated Current  Noncurrent  Total 
Balance as of January 1, 2015  37,404 861,214 898,618
Appropriation of actuarial calculation  - 106,758 106,758
Pension and healthcare contributions  95,299 - 95,299
Transfers  27,106 (27,106) -
Amortizations  (122,995) - (122,995)
Balance as of September 30, 2015  36,814 940,866 977,680

24.5      Actuarial valuation pursuant to CPC 33 (R1)

The Company, in compliance with the CPC 33 (R1), opts to prepare the actuarial report annually.

The information prepared in compliance with the Actuarial Assessment Report is included in Note 24 to the financial statements as of December 31, 2014

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25      Customer Charges Due

Consolidated  09.30.2015  12.31.2014 
Energy Development Account (CDE) (a)  211,044  11,709 
Tariff flags  148,718  - 
Global Reversal Reserve (RGR)  35,168  11,524 
  394,930  23,233 

26      Research and Development and Energy Efficiency

26.1      Balance recognized to invest in R&D (Research and Development) and EEP (Energy Efficiency Program)

 Consolidated

Applied and

 unfinished 

Balance

 to collect 

Balance

to apply 

Balance as of

09.30.2015 

Balance as of

12.31.2014 

Research and Development - R&D           
FNDCT (a)  -  4,873  -  4,873  5,742 
MME  -  2,436  -  2,436  2,872 
R&D  46,756  -  195,422  242,178  211,984 
  46,756  7,309  195,422  249,487  220,598 
Energy efficiency program - EEP  46,835  -  101,813  148,648  115,166 
  93,591  7,309  297,235  398,135  335,764 
      Current  158,050  175,972 
      Noncurrent  240,085  159,792 
(a) National Fund for Scientific and Technological Development

26.2      Changes in balances for R&D and EEP

Consolidated  FNDCT  MME    R&D    EEP   
  current  current  current  noncurrent  current  noncurrent  Total 
Balance as of January 1, 2015  5,742 2,872 81,127 130,857  86,231 28,935  335,764
Additions  25,590 12,796 701 24,890  - 29,307  93,284
Performance agreement  - - - -  - 1,617  1,617
Selic interest rate  - - 168 16,353  - 8,126  24,647
Payments  (26,459) (13,232) - -  - -  (39,691)
Concluded projects  - - (11,918) -  (5,568) -  (17,486)
Balance as of September 30, 20  4,873 2,436 70,078 172,100  80,663 67,985  398,135

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27      Accounts Payable related to concession - Use of Public Property

Consolidated         Discount Annual    
   Company  Grant  Signature  Closing Rate   Adjustment  09.30.2015  12.31.2014
(1) HPP Mauá  Copel GeT  06.29.2007  07.03.2007  07.2042  5.65% p.y.  IPCA  15,140  14,200 
(2) HPP Colider  Copel GeT  12.29.2010  01.17.2011  01.2046  7.74% p.y.  IPCA  21,037  19,621 
(3) HPP Baixo Iguaçu  Copel GeT  07.19.2012  08.20.2012  01.2047  7.74% p.y.  IPCA  6,119  5,363 
(4) SHP Cavernoso  Copel GeT  07.11.2013  07.11.2013  07.2018  7.74% p.y.  IPCA  103  117 
(5) SHP Apucaraninha  Copel GeT  07.11.2013  07.11.2013  07.2018  7.74% p.y.  IPCA  718  819 
(6) SHP Chopim I  Copel GeT  07.11.2013  07.11.2013  07.2015  7.74% p.y.  IPCA  -  33 
(7) SHP Chaminé  Copel GeT  07.11.2013  07.11.2013  07.2018  7.74% p.y.  IPCA  1,241  1,417 
(8) SHP Derivação Rio Jordão  Copel GeT  07.11.2013  02.24.2014  02.2019  7.74% p.y.  IPCA  733  806 
(9) HPP Fundão e HPP Santa Clara Elejor 10.23.2001 10.25.2001 10.2036 11.00% p.y.

IGPM

473,444 449,351
              518,535  491,727 
            Current  55,196  54,955 
            Noncurrent  463,339  436,772 

Discount rate applied to calculate present value:

Actual net discount rate, in line w ith the estimated long-term rate. It bears no relationship w ith the expected project return.

Payment to the federal government:

(1) Monthly installments equivalent to 1/12 of the proposed annual payment of R$ 643 (51% of R$ 1,262), according to clause six of Concession Agreement no 001/07.

(2) Monthly installments of 1/12 of the proposed annual payment of R$ 1,256, from the start of commercial operation of HPP, as clause 6 of the Concession Agreement no 001/11.

(3) (4) (5) (6) (7) (8) Monthly installments equivalent to 1/12 of the proposed annual payment, according to clause 5a of Concession Agreement no 007/2013 for 5 years.

(9) Monthly installments equivalent to 1/12 from the proposed annual payment of R$ 19,000, from the 6th to 35th year of grant or w hile in the exploitation of hydropow er facilities, as Terms of Ratification of Bidding and clause six of the Concession Contract no 125/01.

27.1      Change in Accounts Payable related to concession - Use of Public Property

Consolidated       
  Current  Noncurrent  Total 
Balance as of January 1, 2015  54,955 436,772 491,727
ANEEL grant - use of public property  - 896 896
Transfers  41,440 (41,440) -
Payments  (41,199) - (41,199)
Adjust to present value  - (1,637) (1,637)
Monetary variations  - 68,748 68,748
Balance as of September 30, 2015  55,196 463,339 518,535

 

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28      Other Accounts Payable

Consolidated       
    09.30.2015  12.31.2014 
Financial offset for the use of w ater resources    26,643  22,259 
Pledges in guarantee    19,250  17,721 
Customers    18,877  15,954 
Reimbursements to customer contributions    13,863  27,817 
Investment acquisition    9,571  18,228 
Public lighting rate collected    5,657  21,267 
Other liabilities    61,402  35,048 
    155,263  158,294 
  Current  143,158  157,988 
  Noncurrent  12,105  306 

29      Provision for litigation and contingent liabilities

The Company and its subsidiaries are party to several claims filed before different courts. Copel’s management, based on the opinion of its legal counsel, maintains a provision for contingencies in connection with lawsuits with probable chance of an unfavorable outcome, and for the lawsuits whose unfavorable outcome is considered to be possible no provision has been accrued.

The Company's management believes that it is not feasible to provide information about the moment of possible cash outflows in connection with the lawsuits to which the Company and its subsidiaries are parties on the reporting date, considering how unpredictable and subject to changes are Brazil's judicial, tax and regulatory systems. For that reason, that information is not provided.

29.1      Provision for litigation

29.1.1     Change in provision for contingencies with probable chance of an unfavorable outcome

Consolidated        Additions to     
Balances as of      fixed assets    Balances as of 
January 1, 2015 Additions Reversals in progress Discharges  September 30, 2015
Fiscais             
Cofins (a)  254,386    (12,186)     242,200 
Others (b)  37,458  49,721  (1,930)   (155) 85,094 
  291,844  49,721  (14,116)   (155) 327,294 
Labors (c)  326,246  100,462  (13,856)   (19,257) 393,595 
Employee benefits (d)  114,543  26,973  (14,9230   (21,922) 104,671 
Civil             
Suppliers (e)  60,680  5,242  (8,110)   (57,812) - 
Civil and administrative claims (f)  256,169  131,965  (10,110)   (41,520) 336,504 
Easements (g)  25,407  18,746  (102)   (260) 43,791 
Expropriations and property (h)  402,219  41,458  (4,936) 2,002  (927) 444,904 
Customers (i)  10,602  5,613  (366)     15,849 
  755,077  203,024  (23,624) 2,002  (100,519) 841,048 
Environmental (j)  479  84  - -  - 563 
Regulatory (k)  58,443  1,412  (7,374) -  (1,186) 51,295 
  1,546,632  381,676  (73,893) 2,002  (143,039) 1,718,466 
 

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Parent company  Balance as of        Balance as of 
  January 1, 2015 Additions Reversals  Discharges September 30, 2015
Tax           
Cofins (a)  254,386  -  (12,186) - 242,200 
Others (b)  29,338  3,343  (487) (152) 32,042 
  283,724  3,343  (12,673) (152) 274,242 
Labor (c)  159  157  (287) - 29 
Civil (f)  672  26,296  (512) - 26,456 
Regulatory (k)  12,764  -  - - 12,764 
  297,319  29,796  (13,472) (152) 313,491 

29.1.2     Information on main lawsuits

a)    Contribution for Social Security Funding - COFINS

Author: Federal Taxing Department

Cofins collection for the periods from August 1995 to December 1996 and from October 1998 to June 2001, because of deconstitution of the sentence, which had recognized the Company's exemption as to payment of COFINS tax.

Current situation: awaiting judgment.

b)    Other tax provisions

Lawsuits filed by the Company to discuss the levy of federal, state and municipal taxes and fees, their bases and amounts payable.

c)    Labor

Labor claims comprise claims filed by former employees in connection with the payment of overtime, hazardous working conditions, transfer bonuses, salary equality/reclassification, and other matters, and also claims by former employees of contractors and third-parties (secondary responsibility) involving indemnity and other matters.

c)    Employee benefits

Labor claims comprise claims filed by retired former employees of the Company and its subsidiaries against the Copel Foundation, which will have consequential impact on the Company and its wholly owned subsidiaries, since additional contributions will be required.

d)    Suppliers

Authors: Rio Pedrinho Energética S.A. and Consórcio Salto Natal Energética S.A.

In 2006 Energética Rio Pedrinho S.A. and Consórcio Salto Natal Energética S.A. enforced awards at the FGV arbitration chamber, with a joint value of R$54,895, which ordered Copel Distribuição S.A. to pay obligations and charges deriving from the electricity sale and purchase agreements, plus monetary restatement and arrears interest, which were signed during the term of the Distributed Generation Program in Paraná state - Progedis.

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In progress before the 3rd Public Finance Court of Curitiba, Probable losses were provision for classified, namely in the judicial proceeding involving deposits of R$22,822 (October 2009), R$11,832 (February 2010) and R$35,912 (June 2010), redeemed from the judicial account subsequently by the creditors in October 2010 and January 2011, in the amounts of R$36,515 and R$37,498 respectively, against a bank guarantee. In 2011 they requested enforcement of the remaining balances as arrears interest, in the amounts of R$12,790 and R$9,371, which after they had been deposited were also redeemed against the bank guarantee in April 2012.

Current situation: Court decisions, published in January and April 2015 accepted applications to release the deposits to the suppliers, and there are now no remaining amounts being disputed in these enforcements, except for Consórcio Salto Natal which is still claiming the difference with the residual balance of the arrears interest of approximately R$3,853, then claimed by Consórcio Salto Natal, was not recognized as due by the state of Paraná's Appeal Court, and the creditor did not file any appeal at higher courts. Copel filed a petition for writ of certiorari with the Superior Court of Justice requesting it to review a decision made on a lawsuit seeking the annulment of the arbitration decisions that are currently being enforced. The Superior Court of Justice has not yet passed a judgment on the matter.

e)    Civil and administrative claims

Lawsuits that discuss billings, irregular procedures, administrative contracts and contract fines, damages to compensate for electrical grid and car accidents. The main lawsuits are as follows:

Author: Tradener Ltda.                                                                               Amount estimated: R$126,916

Class actions and civil public actions were filed in which illegalities and annulments relating to the execution of the electric power purchase agreement entered into between the Company and Tradener are pointed out. Class action No. 588/2006 has already been rendered final and unappeasable, and the ruling recognized as valid commissions payable by the Company to Tradener. In the civil public action No. 0000219-78.2003.8.16.0004, filed by the Prosecution Office, a decision has also been rendered ruling on the absence of irregularities in the electric power purchase agreement. Therefore, the Tradener brought recovery lawsuits, seeking to receive its commissions. In addition to the accrued amount of R$126,916, R$10,739, recognized in the "Trade payables" account, makes up the total debt.

Current situation: - case record 0005550-26.2012.8.16.0004 - in the judgment rendered on 09/29/2014, the Company was ordered to pay the commissions due to Tradener in the amount of R$17,765 on 09/30/2012, which accrues default interest of 1% per month from the date of notification (10/25/2012), plus attorneys' fees set at 9% of the value of the sentence and court costs, totaling R$51,655 on 09/30/2015. The Company filed an appeal against that decision, and obtained a judgment that was not in its favor. Copel filed a petition for writ of certiorari that has not yet been heard.

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- case record 00059-90.22.2012.8.16.0004 - in the judgment rendered on 01/27/2014 the Company was ordered to pay the amount of R$86,000, which is the value updated by the INPC/IBGE from the maturity of the commissions payable to Tradener under the purchase agreement entered into with Celesc, plus default interest of 1% per month, as of the date of notification (10/31/2012), as well as attorneys' fees in the amount of R$55, which should be adjusted for inflation from the date of judgment by the INPC/IBGE, from 01/27/2014. The Company appealed the decision. The appeal was dismissed by the appeals court, which upheld the lower court sentence and published its decision on June 24, 2015. Copel is filing a petition for writ of certiorari with the Superior Court of Justice.

Author: Consórcio Carioca-Passarelli

Lawsuit on the financial balance of construction contracts. Compagás and Consórcio Carioca-Passarelli reached a judicial settlement on September 1, 2015, whereby Compagás commits itself to paying the total amount of R$31,500, of which R$20,000 was paid on September 11, 2015, and the remaining amount will be repaid in 12 monthly installments through September 11, 2016.

f)     Easements

Lawsuits are filed when there is a difference between the amount determined by Copel for payment and the amount claimed by the owner and/or when the owner's paper title may not be registered (probate proceedings are underway, properties have no registry number, etc.).

Impleaders are also filed by the Company against third parties seeking to defend their acquisitive prescription rights to adjoining properties or to properties where there are right of way areas in order to set the limits of and to establish the adjoining land to the strip of land that is subject to right of way servitude.

g)    Expropriations and property

Lawsuits are filed challenging expropriation when there is a difference between the amount determined by Copel for payment and the amount claimed by the owner and/or when the owner's paper title may not be registered (probate proceedings are underway, properties have no registry number, etc.).

Asset-related lawsuits include petitions to regain possession of properties owned by the concessionaire. Lawsuits are filed to regain possession of properties owned by the Company and invaded by third parties. Impleaders are also filed by the Company against third parties seeking to defend their acquisitive prescription rights to adjoining properties in order to set the limits of and to establish the adjoining land to the land that has been expropriated. The main lawsuits are as follows:

Author: Ivaí Engenharia de Obras S.A.                                                        Amount estimated: R$390,048

Collection proceeding filed by plaintiff based on the previous declaratory action, which aimed to establish the plaintiff's credit receivable due to the changing economic and financial conditions of the contract with Copel Geração e Transmissão.

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Current situation: On October 1, 2015, the Superior Court of Justice passed a judgment on the second motion for clarification of judgment filed by Copel (motion for clarification of judgment passed on petition for writ of certiorari No. 1.096.906 - state of Paraná). The second panel of the Superior Court of Justice's justices were in favor of the motion by majority voting (three votes for it and two votes against it), and their approval of the motion will have an effect on the decision made on the petition for writ of certiorari. However, the full contents of the justices' judgment have not yet been published. A provisional enforcement is in progress, but it has been suspended by an injunction submitted by Copel and accepted by the Paraná state Court of Appeal in December 2014.

h)    Consumers

Lawsuits seeking compensation for damages caused by household appliances, lawsuits claiming damages for pain and suffering caused by service interruption and lawsuits filed by industrial consumers challenging the lawfulness of the increase in electricity prices while Plano Cruzado (anti-inflation plan) was in effect and claiming reimbursement for the amounts paid by the Company.

i)     Environmental

Class actions whose purpose is to obstruct the progress of environmental licensing for new projects or to recover permanent preservation areas located around the hydroelectric power plant dams unlawfully used by private individuals. If the outcome of the lawsuits is unfavorable to the Company, management estimates only the cost to prepare new environmental studies and to recover the areas owned by Copel Geração e Transmissão.

j)     Regulatory

The Company is challenging, both at the administrative and judicial levels, notifications issued by the Regulatory Agency of alleged violations against regulations. The main lawsuit are as follows:

Authors: Companhia Estadual de Energia Elétrica - CEEE and Dona Francisca Energética S.A.

Amount estimated: R$41,915

Copel, Copel Geração e Transmissão and Copel Distribuição are challenging lawsuits filed against ANEEL's decision No. 288/2002 involving the companies that have been mentioned.

Current situation: awaiting judgment.

29.2      Contingent liabilities

29.2.1     An unfavorable outcome of those lawsuits is considered to be possible.

  Parent company    Consolidated 
  09.30.2015  12.31.2014  09.30.2015  12.31.2014 
Tax (a)  1,177,414  1,177,495  1,384,249  1,356,224 
Labor (b)  248  964  660,858  558,873 
Employee benefits (c)  -  -  84,518  107,118 
Civil (d)  8,287  32,257  841,832  698,084 
Regulatory (e)  1,897  606  732,668  18,464 
  1,187,846  1,211,322  3,704,125  2,738,763 
 

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29.2.2     Information on main lawsuits

a)    Tax

Lawsuits filed by the Company to discuss the levy of federal, state and municipal taxes and fees, their bases and amounts payable. The main lawsuits are as follows:

Author: Federal Taxing Department                                                            Amount estimated: R$747,529

Interest and fines relating to the COFINS charges. Due to the strong arguments for the defense of such charges, it is classified as possible. The principal amount of this debit, however, is classified as probable and is currently being discussed in the tax foreclosure filed by the Federal Government, which is pending before the 2nd Federal Court, as disclosed in Note 29.1-a.  

Current situation: awaiting judgment.

Author: Social Security National Institute - INSS                                          Amount estimated: R$181,014

Tax demands against Copel concerning tax enforcement, in order to recover the social security on the sale of hand labor (NFLD No. 35.273.870-7).

Current situation: awaiting judgment.

Author: Social Security National Institute - INSS                                            Amount estimated: R$25,734

Tax demands against Copel concerning tax enforcement, in order to recover the social security on the sale of hand labor (NFLD No. 35.273.876-6).

Current situation: awaiting judgment.

b)    Labor

Labor claims comprise claims filed by former employees in connection with the payment of overtime, hazardous working conditions, transfer bonuses, salary equality/reclassification, and other matters, and also claims by former employees of contractors and third-parties (secondary responsibility) involving indemnity and other matters.

c)    Employee benefits

Labor claims comprise claims filed by retired former employees of the Company and its subsidiaries against the Copel Foundation, which will have consequential impact on the Company and its wholly owned subsidiaries, since additional contributions will be required.

d)    Cíveis

Lawsuits that discuss billings, irregular procedures, administrative contracts and contract fines, damages to compensate for electrical grid and car accidents. The main lawsuits are as follows:

Author: Mineradora Tibagiana Ltda.                                                            Amount estimated: R$118,918

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Legal action seeking compensation for alleged losses in mining activities for the construction work of the HPP Mauá, by the Energy Consortium Cruzeiro do Sul, in which Copel Geração e Transmissão participates with the percentage of 51%.

Current situation: awaiting judgment.

Author: Ivaí Engenharia de Obras S.A.                                                        Amount estimated: R$323,576

Recovery action filed by the plaintiff grounded on previous declaratory action seeking recognition of the plaintiff’s credit claim due to the economic and financial imbalance of contract signed with Copel Geração e Transmissão. The principal amount of this debt is classified as a probable loss.

Current situation: On October 1, 2015, the Superior Court of Justice passed a judgment on the second motion for clarification of judgment filed by Copel (motion for clarification of judgment passed on petition for writ of certiorari No. 1.096.906 - state of Paraná). The second panel of the Superior Court of Justice's justices were in favor of the motion by majority voting (three votes for it and two votes against it), and their approval of the motion will have an effect on the decision made on the petition for writ of certiorari. However, the full contents of the justices' judgment have not yet been published. There is already provisional execution in progress, however, is suspended for injunctive Copel presented and accepted in Paraná Court of Justice in December 2014.

Authors: franchisees of the Agency / Copel store                                        Amount estimated: R$39,760

Filing of two individual claims against Copel Distribuição of the franchise contracts for Copel branches/stores, with the main petition claiming an extension of the term of the contract and secondary petition to recognize the existence of a sub concession, with transfer of the services provided and full pass-through of the fees, amongst other amounts, currently have appeals awaiting trial.

Current situation: awaiting judgment.

e)    Regulatory

The Company is challenging, both at the administrative and judicial levels, notifications issued by the Regulatory Agency of alleged violations against regulations.

The main lawsuit consists of the petition for writ of mandamus No. 1001675-88.2015.4.01.0000 filed with the Federal Regional Court of the First Region by the Brazilian Association of Electricity Distributors - Abradee of which Copel Distribuição is a member. The plaintiff's main claim is the annulment of the lawsuit filed by Energia Sustentável do Brasil S.A. - ESBR against ANEEL right from the moment when the summons was delivered.

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In order to be held harmless against any liability for losses caused by delays to the construction work scheduled for building HPP Jirau, ESBR filed with the federal lower court of Rondônia lawsuit No. 10426-71.2013.4.01.4100 against ANEEL. That court passed judgment (i) recognizing the plaintiff's right to be harmless against liability for the delay of 535 days to the construction work scheduled for building HPP Jirau; (ii) stating that ESBR is not liable for any obligations, penalties and costs arising from the delay and finally (iii) annulling ANEEL's decision No. 1.732/2013, which had recognized a delay of only 52 days in the construction work. ANEEL appealed the decision.

The effect of the decision has been that at the same time that it exempted ESBR from any liability, it exposed the distribution companies, including Copel Distribuição, with whom ESBR entered into agreements for marketing electricity in the regulated environment (CCEARs), to the short-term market and to the high difference settlement price (PLD) charged in the period. This is because under electricity marketing rules all energy consumed must be covered by an agreement.

The federal court issued an injunction ordering ANEEL and CCEE to refrain from a) requiring Abradee's members to abide by any judicial decisions made on the lawsuits to which ESBR (HPP Jirau) and ANEEL are parties; b) imposing any sanctions against any of Abradee's members for default on the amounts listed in item a) upon the settlement scheduled for August 2015 and afterwards.

That decision has released Copel Distribuição from the obligation to pay R$710,548 to CCEE upon the settlement scheduled for August 2015. The risk of unfavorable outcome is classified as possible (intermediate). If a decision unfavorable to the Company is rendered, the amount will be considered as an industry financial asset to be recovered by charging fees.

Current situation: awaiting judgment.

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30      Equity

30.1      Equity attributable to controlling shareholders

30.1.1     Capital

Copel’s paid-in share capital was R$6,910,000. The different classes of shares (with no par value) and main shareholders are detailed below:

  Number of shares in units 
Shareholders  Common  Class "A” Preferred  Class “B” preferred  Total   
  in share  %  in share  %  in share  %  in share  % 
State of Paraná  85,028,598  58.63  -  -  -  -  85,028,598  31.07 
BNDES  38,298,775  26.41  -  -  27,282,006  21.27  65,580,781  23.96 
Eletrobrás  1,530,774  1.06  -  -  -  -  1,530,774  0.56 
Free float:  -  -  -  -  -  -    - 
BM&FBOVESPA (a)  18,748,762  12.93  128,427  33.77  62,873,638  49.03  81,750,827  29.87 

NYSE (b) 

1,126,325  0.78  -  -  37,971,698  29.62  39,098,023  14.29 
Latibex (c)  -  -  -  -  69,349  0.05  69,349  0.03 
Municipalities  178,393  0.12  9,326  2.45  3,471  -  191,190  0.07 
Other shareholders  119,453  0.07  242,538  63.78  43,842  0.03  405,833  0.15 
  145,031,080  100.00  380,291  100.00  128,244,004  100.00  273,655,375  100.00 
(a) São Paulo Stock, Commodities and Future Exchange
(b) New York Stock Exchange New York
(c) Latin American Exchange in Euros, related to the Madrid Exchange

The market value of Company stock as of September 30, 2015, is shown below:

  Number of shares in units  Market value 
Ordinary shares  145,031,080  3,123,745 
Class “A” preferred shares  380,291  13,310 
Class “B” preferred shares  128,244,004  4,185,055 
  273,655,375  7,322,110 
 

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30.1.2     Equity Valuation Adjustments

Changes in the equity valuation adjustments

  Parent company  Consolidated 
Balance as of January 1, 2015  976,964 976,964
Adjustments to financial assets available for sale:     
Financial investments (a)  416 632
Taxes on adjustments  - (216)
Equity interest investments  (360) (360)
Taxes on adjustments  122 122
Adjusts to actuarial liabilities:     
Post employment benefits - equity (a)  14,999 14,999
Realization of equity evaluation adjustment:     
Deemed cost of f ixed assets  - (108,050)
Taxes on adjustments  - 36,738
Deemed cost of f ixed assets - equity (a)  (71,312) -
Balance as of September 30, 2015  920,829 920,829
(a) Equity in the parent company, net of taxes.

 

30.1.3     Basic and diluted earnings per share

 Parent company 09.30.2015  09.30.2014 
Basic and diluted numerator     
Basic and diluted earnings allocated by classes of shares, allocated to shareholders     
controlling shareholders:     
Ordinary shares  403,387  490,337 
Class “A” preferred shares  1,164  1,419 
Class “B” preferred shares  392,365  476,936 
  796,916  968,692 
Basic and diluted denominator     
Weighted average of shares (in thousands):     
Ordinary shares  145,031,080  145,031,080 
Class “A” preferred shares  380,291  381,537 
Class “B” preferred shares  128,244,004  128,242,758 
  273,655,375  273,655,375 
Basic and diluted earnings per share attributable to shareholders of     
parent company:     
Ordinary shares  2.78138  3.38091 
Class “A” preferred shares  3.06081  3.71917 
Class “B” preferred shares  3.05952  3.71901 

 

30.2      Change in equity attributable to non-controlling interest

Participation in capital stock  Compagás: 49%  Elejor: 30%  UEG Araucária: 20%  Consolidated 
Balance as of January 1, 2015  136,233  25,445 190,413 352,091
Dividends  -  (13,067) (44,267) (57,334)
Income for the period  9,036  1,814 55,673 66,523
Balance as of September 30, 2015  145,269  14,192 201,819 361,280

 

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31      Operating Revenues

Consolidated  Gross  PIS/Pasep    Regulatory    Service tax  Net revenues 
  revenues  and Cofins  ICMS (VAT)  charges (31.5)  (ISSQN )  09.30.2015
Electricity sales to final customers (31.1)  8,152,489 (755,017) (2,013,356) (1,225,372) - 4,158,744
Electricity sales to distribuitors (31.2)  3,443,255 (294,349) - (63,090) - 3,085,816
Use of the main distribution and transmission grid (31.3)  4,212,679 (392,872) (1,025,540) (1,076,916) - 1,717,351
Construction income  823,678 - - - - 823,678
Telecommunications  201,916 (9,481) (37,128) - (1,624) 153,683
Distribution of piped gas  531,204 (48,812) (80,872) - - 401,520
Sectoral financial assets and             
liabilities result  979,343 - - - - 979,343
Other operating revenue (31.4)  86,016 (13,255) - - (1,768) 70,993
  18,430,580 (1,513,786) (3,156,896) (2,365,378) (3,392) 11,391,128
  
Consolidated            Net revenues 
  Gross  PIS/Pasep    Regulatory   Service tax  07.01.2015
  revenues  and Cofins  ICMS (VAT)  charges (31.5)  (ISSQN )  to 09.30.2015 
Electricity sales to final customers (31.1)  3,051,640 (282,599) (766,050) (593,405) - 1,409,586
Electricity sales to distribuitors (31.2)  854,784 (77,323) - (26,271) - 751,190
Use of the main distribution and transmission grid (31.3)  1,547,215 (145,316) (383,984) (376,301) - 641,614
Construction income  282,484 - - - - 282,484
Telecommunications  71,494 (2,756 (13,440) - (520) 54,778
Distribution of piped gas  190,235 (17,472) (31,920) - - 140,843
Sectoral financial assets and             
liabilities result  (59,678) - - - - (59,678)
Other operating revenue (31.4)  29,214 (4,254) - - (589) 24,371
  5,967,388 (529,720) (1,195,394) (995,977) (1,109) 3,245,188
 
  
Consolidated  Gross  PIS/Pasep    Regulatory    Service tax  Net revenues 
  revenues  and Cofins  ICMS (VAT)  charges (31.5)  (ISSQN )  09.30.2014
Electricity sales to final customers (31.1)  4,620,373 (400,778) (1,109,734 (37,490 - 3,072,371
Electricity sales to distribuitors (31.2)  3,615,110 (314,300) - (61,875 - 3,238,935
Use of the main distribution and transmission grid (31.3)  2,681,902 (251,754) (661,755 (119,669 - 1,648,724
Construction income  971,996 - - - - 971,996
Telecommunications  158,174 (7,627) (28,040 - (324 122,183
Distribution of piped gas  344,317 (31,628) (40,302 - - 272,387
Other operating revenue (31.4)  174,523 (43,938) - - (1,051 129,534
  12,566,395 (1,050,025) (1,839,831 (219,034 (1,375 9,456,130
 
  
Consolidated             Net revenues 
  Gross  PIS/Pasep    Regulatory   Service tax  07.01.2014
  revenues  and Cofins  ICMS (VAT)  charges (31.5)  (ISSQN )  to 09.30.2014 
Electricity sales to final customers (31.1)  1,834,724 (160,454) (428,148) (16,892) - 1,229,230
Electricity sales to distribuitors (31.2)  1,074,523 (98,093) - (18,317) - 958,113
Use of the main distribution and transmission grid (31.3)  947,478 (88,409) (227,765) (43,888) - 587,416
Construction income  345,437 - - - - 345,437
Telecommunications  55,386 (2,703) (9,667) - (125) 42,891
Distribution of piped gas  122,463 (49,866) 14,325 - - 86,922
Other operating revenue (31.4)  51,387 (13,946) - - (566) 36,875
  4,431,398 (413,471) (651,255) (79,097) (691) 3,286,884

 

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31.1      Electricity sales to final customers by category

       
Consolidated  Gross revenue  Net income 
  09.30.2015  09.30.2014  09.30.2015  09.30.2014 
Residential  2,564,851  1,508,088  1,304,507  1,025,356 
Industrial  2,789,444  1,687,611  1,489,916  1,113,797 
Trade, services and other activities  1,804,103  942,667  830,411  583,150 
Rural  395,261  181,277  252,239  154,683 
Public entities  188,972  104,119  103,210  74,062 
Public lighting  192,403  90,619  88,211  55,688 
Public service  217,455  105,992  90,250  65,635 
  8,152,489  4,620,373  4,158,744  3,072,371 
 
Consolidated  Gross revenue  Net income 
07.01.2015
to 09.30.2015
07.01.2014
to 09.30.2014
07.01.2015
to 09.30.2015
07.01.2014
to 09.30.2014
Residential  944,686  584,449  433,054  397,257 
Industrial  1,052,832  688,192  516,301  461,205 
Trade, services and other activities  669,295  373,366  276,438  234,124 
Rural  148,653  67,682  83,030  57,660 
Public entities  73,832  41,752  37,653  29,919 
Public lighting  76,342  36,940  31,815  22,620 
Public service  86,000  42,343  31,295  26,445 
  3,051,640  1,834,724  1,409,586  1,229,230 

 

31.2      Electricity sales to Distribuitors

     
Consolidated  Gross revenue 
    09.30.2015  09.30.2015 
Electric Energy Trade Chamber - CCEE  2,029,716  2,230,729 
Bilateral contracts  877,526  860,389 
Agreements for Pow er Trade on the Regulated Market - CCEAR (auction)  528,329  523,749 
Quota system  7,684  243 
  3,443,255  3,615,110 
 
Consolidated  Gross revenue 
  07.01.2015
to 09.30.2015
07.01.2014
to 09.30.2014
Electric Energy Trade Chamber - CCEE  351,952  615,429 
Bilateral contracts  300,564  285,643 
Agreements for Pow er Trade on the Regulated Market - CCEAR (auction)  194,626  173,316 
Quota system  7,642  135 
  854,784  1,074,523 

 

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31.3      Use of the main distribution and transmission grid by customer class

         
Consolidated  Gross revenue  Net income 
  09.30.2015  09.30.2014  09.30.2015  09.30.2014 
Residential  1,412,881  993,972  510,239  577,619 
Industrial  920,707  507,799  338,165  287,863 
Trade, services and other activities  995,780  620,661  362,835  360,767 
Rural  213,384  137,978  124,399  111,552 
Public entities  112,388  76,767  49,581  51,211 
Public lighting  109,586  71,147  38,569  41,072 
Public service  79,604  46,702  28,586  26,973 
Free consumers  210,301  107,041  134,291  92,055 
Basic Netw ork, BN connections, and connection gri  951  769  608  662 
Operating and maintenance income (loss) - O&M  75,487  77,748  59,140  62,685 
Interest income (loss)  81,610  41,318  70,938  36,265 
  4,212,679  2,681,902  1,717,351  1,648,724 
 
Consolidated  Gross revenue  Net income 
  07.01.2015  07.01.2014  07.01.2015  07.01.2014 
  to 09.30.2015  to 09.30.2014  to 09.30.2015  to 09.30.2014 
Residential  505,684  344,380  190,935  200,962 
Industrial  346,167  185,561  123,976  106,128 
Trade, services and other activities  366,984  215,162  142,119  126,155 
Rural  76,125  44,964  43,948  36,207 
Public entities  43,087  26,996  20,065  18,090 
Public lighting  42,358  25,756  15,622  14,604 
Public service  30,233  16,229  11,292  9,398 
Free consumers  87,934  38,516  57,494  33,023 
Basic Netw ork, BN connections, and connection  401  275  263  237 
Operating and maintenance income (loss) - O&M  22,021  31,070  14,520  26,129 
Interest income (loss)  26,221  18,569  21,380  16,483 
  1,547,215  947,478  641,614  587,416 

 

31.4      Other operating revenues

Consolidated    Gross revenue 
  09.30.2015  09.30.2014 
Leasing and rent (31.4.1)  64,759  70,833 
Income from rendering of services  11,926  16,266 
Charged service  6,624  5,949 
Reimbursement for unavailability of energy  -  79,353 
Other income  2,707  2,122 
  86,016  174,523 
 
Consolidated    Gross revenue 
  07.01.2015  07.01.2014 
  to 09.30.2015  to 09.30.2014 
Leasing and rent (31.4.1)  22,032  21,833 
Income from rendering of services  3,836  5,412 
Charged service  2,345  2,080 
Reimbursement for unavailability of energy  -  21,272 
Other income  1,001  790 
  29,214  51,387 

 

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31.4.1     Revenue from leases and rentals

Consolidated  09.30.2015  09.30.2014 
Equipment and framework  64,112  64,216 
Facilities sharing  547  967 
Real estate  100  143 
Thermal Pow er Plant of Araucária  -  5,507 
  64,759  70,833 
 
Consolidated  07.01.2015  07.01.2014 
  to 09.30.2015  to 09.30.2014 
Equipment and framework  21,939  21,563 
Facilities sharing  52  242 
Real estate  41  28 
  22,032  21,833 

 

The Company has not identified any operating lease receivables, which are non-cancellable.

31.5      Regulatory charges

Consolidated  09.30.2015  09.30.2014 
Energy Development Account - CDE  1,055,366  96,789 
Other charges - rate flags  854,486  - 
Research and development and energy efficiency - R&D and PEE  93,284  83,229 
Energy Development Account - ACR Account  306,392  - 
Global Reversion Reserve - RGR quota  51,797  39,016 
Inspection fee  4,053  - 
  2,365,378  219,034 
 
Consolidated  07.01.2015  07.01.2014 
  to 09.30.2015  to 09.30.2014 
Energy Development Account - CDE  367,944  35,884 
Other charges - rate flags  311,990  - 
Research and development and energy efficiency - R&D and PEE  24,955  28,887 
Energy Development Account - ACR Account  259,754  - 
Global Reversion Reserve - RGR quota  29,173  14,326 
Inspection fee  2,161  - 
  995,977  79,097 

 

31.6      Copel Distribuição Tariff Adjustment

The Brazilian Electricity Regulatory Agency (Aneel) approved Copel Distribuição's Annual Adjustment by Resolution 1897 of 06.16.2015, which authorized the enforcement of a 15.32% increase in the average tariff adjustment as from 06.24.2015. The installment corresponding to the partial deferments regarding the financial components related to the 2013 and 2014 Tariff Adjustments, requested by Copel Distribuição at the time, has been considered in this adjustment.

 

65


 
 

 

The 15.32% adjustment is composed of: (i) 20.58% related to the incorporation of financial components, which will be recovered over the 12 month period subsequent to the adjustment (including the amount of R$935,256 corresponding to the deferments performed in 2013 and 2014); (ii) 0.34% deriving from the correction of Installment B; (iii) -3.25% related to the adjustment of Installment A; and (iv) -2.35% which reflect the withdrawal of financial components from the previous process. The adjustment was fully applied to Copel Distribuição's tariffs as from 06.24.2015, starting in July 2015 the amortization of Sectorial financial assets.

As of 09.30.2015, the corrected amount regarding the 2013 deferral is R$215,437, and the 2014 deferral, R$486,005, thus totaling R$701,442 (Note 9), to be amortized over the tariff cycle of 2015 and 2016.

2015 Extraordinary Rate Review

On February 27, 2015 Aneel approved the Extraordinary Rate Review in 36.79%, starting from March 02, 2015, which aimed to restore the rate coverage of the electricity distribution companies due to the increase in the Energy Development Account – CDE (22.14% of adjustment), and to relocation of energy costs (14.65% of adjustment) due to the rate adjustment of Itaipu, impacted by exchange variance and the hydrological situation, and the high prices at the 14th Existing Electricity Auction (A-1 2014) and the 18th Adjustment Auction held on January 15, 2015

The partial amount of the extraordinary electricity price adjustment was considered for 2015's annual adjustment. The balance as of September 30, 2015 is R$269,645 and the remaining amount to be considered for the next electricity price adjustment is R$511,635, adjusted for inflation using the Selic - Central Bank overnight rate (Note 9).

Tariff Flags

As of January 1, 2015, pursuant to ANEEL's Regulatory Resolution No. 547 issued on April 16, 2013, the Company started to charge for electricity according to the electricity price ranges set on electricity bills. ANEEL approves electricity price ranges according to estimated fluctuations in supply due mainly to the generation of energy by thermoelectric power plants, the ESS (System Service Charges) generated for energy security purposes, involuntary exposure to the short-term market due to insufficient contractual coverage and the water risk posed by Itaipu's power generation.

On August 28, 2015 ANEEL issued Resolution No. 1.945, setting the new amounts to be added to the electricity price when the yellow and red electricity price ranges come into effect as from September 1, 2015. The price remained at R$25.00 per MWh under the yellow electricity price range but increased from R$55.00 to R$45.00 per MWh under the red electricity price range.

Decree 8401 published February 4, 2015 created the centralizing account of tariff flag funds – CCRBT, intended to manage funds deriving from the application of the tariff flags introduced by Aneel, with the funds available passed through to the distribution agents, at the amounts effectively realized as forecast in the variations in generation costs from thermal sources and exposure to spot prices which affect the electricity distribution agents connected to the National Interconnected System - SIN and the existing rate coverage.

 

66


 
 

 

The 2015 Annual Adjustment, the revenue derive from the enforcement of an additional red tariff charge, and the repasses from Flags Account for the accrual periods from January 2015 to March 2015 were considered in the determination of CVA Energia and CVA ESS/EER, as per Approval Resolution 1897 of 06.16.2015. The costs not covered by electricity price ranges at the current cycle will be considered in the following electricity price adjustment.                                                                                                                                                                                                                                            

Copel Distribuição recognized the amount of R$854,486 for the electricity price range, of which R$205,130 was allocated to the account in which the funds obtained from charging for electricity according to the electricity price ranges (CCRBT) are accrued and R$598,341 was appropriated to cover costs. For the accrual period of September 2015 amounts were estimated by Copel Distribuição and are pending approval by ANEEL.

32      Operating Costs and Expenses

Consolidated     General and Other income   
  Operational Selling administrative (expenses),  
  costs expenses expenses net 09.30.2015
Electricity purchased for resale (32.1)  (5,015,259) - - - (5,015,259)
Charge of the main distribution and transmission grid  (623,467) - - - (623,467)
Personnel and management (32.2)  (550,061) (10,557) (187,042) - (747,660)
Pension and healthcare plans (Note 24)  (146,528) (1,748) (40,333) - (188,609)
Materials and supplies  (50,534) (543) (6,722) - (57,799)
Materials and supplies for pow er electricity  (188,020) - - - (188,020)
Natural gas and supplies for gas business  (1,054,077) - - - (1,054,077)
Third-party services (32.3)  (250,221) (30,122) (77,621) - (357,964)
Depreciation and amortization  (456,993) (25) (41,974) (4,363) (503,355)
Provisions and reversals (32.4)  - (188,110) - (309,029) (497,139)
Construction cost (32.5)  (864,340) - - - (864,340)
Other operating costs and expenses (32.6)  (30,740) 3,030 (91,826) (200,882) (320,418)
  (9,230,240) (228,075) (445,518) (514,274) (10,418,107)
 
Consolidated      General and Other income  
  Operational Selling administrative (expenses), 07.01.2015
  costs expenses expenses net to 09.30.2015
Electricity purchased for resale (32.1)  (1,447,889 - - - (1,447,889
Charge of the main distribution and transmission grid  (216,759 - - - (216,759
Personnel and management (32.2)  (187,073 (3,773 (63,044 - (253,890
Pension and healthcare plans (Note 24)  (49,246 (605 (12,860 - (62,711
Materials and supplies  (16,758 (196 (2,619 - (19,573
Materials and supplies for pow er electricity  (54,966 - - - (54,966
Natural gas and supplies for gas business  (298,099 - - - (298,099
Third-party services (32.3)  (87,207 (8,993 (28,173 - (124,373
Depreciation and amortization  (160,665 (8 (15,373 (2,199 (178,245
Provisions and reversals (32.4)  - (29,545 - (63,902 (93,447
Construction cost (32.5)  (302,261 - - - (302,261
Other operating costs and expenses (32.6)  (15,233 1,050 (39,762 (77,205 (131,150
  (2,836,156 (42,070 (161,831 (143,306 (3,183,363

 

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Consolidated      General and  Other income   
  Operational   Selling  administrative  (expenses),   
  costs   expenses  expenses  net  09.30.2014
Electricity purchased for resale (32.1)  (3,485,490) - - - (3,485,490)
Charge of the main distribution and transmission grid  (425,861) - - - (425,861)
Personnel and management (32.2)  (494,970) (8,516) (168,138) - (671,624)
Pension and healthcare plans (Note 24)  (113,110) (1,072) (30,191) - (144,373)
Materials and supplies  (48,683) (295) (6,995) - (55,973)
Materials and supplies for pow er electricity  (92,426) - - - (92,426)
Natural gas and supplies for gas business  (1,060,586) - - - (1,060,586)
Third-party services (32.3)  (213,669) (32,774) (58,817) - (305,260)
Depreciation and amortization  (431,534) (20) (30,346) (565) (462,465)
Provisions and reversals (32.4)  - (67,680) - (208,233) (275,913)
Construction cost (32.5)  (971,733) - - - (971,733)
Other operating costs and expenses (32.6)  (27,598) 3,204 (91,693) (149,691) (265,778)
  (7,365,660) (107,153) (386,180) (358,489) (8,217,482)
 
Consolidated      General and  Other income   
  Operational   Selling  administrative  (expenses),   07.01.2014
  costs   expenses  expenses  net  to 09.30.2014 
Electricity purchased for resale (32.1)  (1,310,933) - - - (1,310,933)
Charge of the main distribution and transmission grid  (167,888) - - - (167,888)
Personnel and management (32.2)  (162,913) (3,048) (57,225) - (223,186)
Pension and healthcare plans (Note 24)  (36,982) (381) (10,391) - (47,754)
Materials and supplies  (17,619) (89) (1,881) - (19,589)
Materials and supplies for pow er electricity  (42,316) - - - (42,316)
Natural gas and supplies for gas business  (359,280) - - - (359,280)
Third-party services (32.3)  (76,390) (9,944) (18,422) - (104,756)
Depreciation and amortization  (146,019) (6) (8,090) (188) (154,303)
Provisions and reversals (32.4)  - (27,774) - (99,137) (126,911)
Construction cost (32.5)  (345,170) - - - (345,170)
Other operating costs and expenses (32.6)  (5,431) 1,066 (27,008) (47,375) (78,748)
  (2,670,941) (40,176) (123,017) (146,700) (2,980,834)

 

Parent company  General and  Other income   
  administrative  (expenses),   
  expenses  net  09.30.2015
Personnel and management (32.2)  (49,349) - (49,349)
Pension and healthcare plans (Note 24)  (6,099) - (6,099)
Materials and supplies  (416) - (416)
Third party services  (9,035) - (9,035)
Depreciation and amortization  (1) (4,363) (4,364)
Provisions and reversals (32.4)  - (20,283) (20,283)
Other operating revenue/expenses  (18,422) (1,327) (19,749)
  (83,322) (25,973) (109,295)

 

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Parent company  General and  Other income   
  administrative  (expenses),  07.01.2015
  expenses  net  to 09.30.2015 
Personnel and management (32.2)  (16,770) - (16,770)
Pension and healthcare plans (Note 24)  (2,111) - (2,111))
Materials and supplies  (147) - (147)
Third party services  (3,806) - (3,806)
Depreciation and amortization  (1) (2,199) (2,200)
Provisions and reversals (32.4)  - (1,334) (1,334)
Other operating revenue/expenses  (11,430) 29 (11,401)
  (34,265) (3,504) (37,769)
 
 
 
Parent company  General and  Other income   
  administrative  (expenses),   
  expenses  net  09.30.2014
Personnel and management (32.2)  (67,050) - (67,050)
Pension and healthcare plans (Note 24)  (8,445) - (8,445)
Materials and supplies  (353) - (353)
Third party services  (4,129) - (4,129)
Depreciation and amortization  - (565) (565)
Provisions and reversals (32.4)  - (1,860) (1,860)
Other operating revenue/expenses  (12,373) 662 (11,711)
  (92,350) (1,763) (94,113)
 
 
 
Parent company  General and  Other income   
  administrative  (expenses),  07.01.2014
  expenses  net  to 09.30.2014 
Personnel and management (32.2)  (20,309) - (20,309)
Pension and healthcare plans (Note 24)  (2,615) - (2,615)
Materials and supplies  (189) - (189)
Third party services  (1,653) - (1,653)
Depreciation and amortization  - (188) (188)
Provisions and reversals (32.4)  - (144) (144)
Other operating revenue/expenses  (7,724) 550 (7,174)
  (32,490) 218 (32,272)

 

32.1      Electricity purchased for resale

Consolidated  09.30.2015 09.30.2014
Purchase of Energy in the Regulated Environment - CCEAR  2,990,471 2,439,244
Itaipu Binacional  1,218,837 546,591
Electric Energy Trade Chamber - CCEE  1,060,134 1,676,997
Program for incentive to alternative energy sources - Proinfa  133,660 137,785
Bilateral contracts  26,688 160,156
(-) Transfer CDE and ACR Account - Decrees 8,221/2014 and 7,891/2013 (32.1.1)  - (1,157,617)
(-) PIS/Pasep/Cofins taxes on electricity purchased for resale  (414,531) (317,666)
  5,015,259 3,485,490

 

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Consolidated  07.01.2015 07.01.2014
  to 09.30.2015  to 09.30.2014 
Purchase of Energy in the Regulated Environment - CCEAR  821,588 940,863
Itaipu Binacional  491,764 191,846
Electric Energy Trade Chamber - CCEE  213,530 298,610
Program for incentive to alternative energy sources - Proinfa  44,410 46,356
Bilateral contracts  3,786 43,897
(-) Transfer CDE and ACR Account - Decrees 8,221/2014 and 7,891/2013 (32.1.1)  - (95,616)
(-) PIS/Pasep/Cofins taxes on electricity purchased for resale  (127,189) (115,023)
  1,447,889 1,310,933

 

32.1.1      (-) CDE Transfer and ACR Account - Decrees nos. 8221/2014 and 7891/2013

The balance as of September 30, 2014 refers to CDE Transfer ACR Account recorded by Copel Distribuição until August 2014.

By means of Decree no. 7,891/2013 subsequently amended by Decrees nos. 7,945/2013 and 8,203/2014, the Federal Government consented to cover costs by means of CDE financial transfers, in order to neutralize exposure to the short-term market by distribution concessionaires, to cover any additional costs by distribution concessionaires resulting from activating thermoelectric plants owing to energy security (ESS) and neutralizing involuntary contractual exposure by distribution concessionaires in the short-term market resulting from unsuccessful acquisitions in energy auctions.

In the light of the unfavorable hydrological scenario, Decree no. 8,221/2014 was published and created the ACR Account with a view to covering in completely or in part any additional costs through involuntary exposure to the short-term market and thermoelectric activation, in connection with the CCEAR’s – Electricity Sales Contracts in the Regulated Environment in the availability mode.

32.2      Personnel and Management Expenses

.  Parent company  Consolidated 
  09.30.2015  09.30.2014  09.30.2015  09.30.2014 
Pessoal         
Wages and salaries  29,443  40,557  469,497  416,937 
Social charges on payroll  10,745  14,788  162,643  148,759 
Meal assistance and education allow ance  2,674  4,268  66,673  58,327 
Provisons for profit sharing (a)  985  1,734  28,437  30,977 
Compensation - Voluntary termination Program/retirement  -  197  3,945  2,770 
  43,847  61,544  731,195  657,770 
Management         
Wages and salaries  4,369  4,166  13,138  10,707 
Social charges on payroll  1,112  1,091  3,203  2,760 
Other expenses  21  249  124  387 
  5,502  5,506  16,465  13,854 
  49,349  67,050  747,660  671,624 
(a) According to Federal Law no 10,101/2000, State Decree no 1978/2007 and State Law no 16,560/2010. 

 

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.  Parent company  Consolidated 
  07.01.2015 07.01.2014  07.01.2015 07.01.2014 
to 09.30.2015 to 09.30.2014 to 09.30.2015  to 09.30.2014
Pessoal         
Wages and salaries  10,335 12,559  160,289 141,027 
Social charges on payroll  3,822 4,503  56,076 49,571 
Meal assistance and education allow ance  945 1,285  22,437 19,410 
Provisons for profit sharing  (269) 207  8,473 8,101 
Compensation - Voluntary termination Program/retirement  - -  904 585 
  14,833 18,554  248,179 218,694 
Management         
Wages and salaries  1,622 1,380  4,637 3,533 
Social charges on payroll  394 362  1,126 919 
Other expenses  (79) 13  (52) 40 
  1,937 1,755  5,711 4,492 
  16,770 20,309  253,890 223,186 

 

32.3      Third-party services

Consolidated  09.30.2015  09.30.2014 
Maintenance of electrical system  97,602  70,681 
Maintenance of facilities  65,503  69,260 
Communication, processing and transmission of data  49,873  38,065 
Meter reading and bill delivery  33,119  27,787 
Authorized and registered agents  24,828  26,058 
Consumer service  15,299  13,249 
Other services  71,740  60,160 
  357,964  305,260 
 
Consolidated  07.01.2015  07.01.2014 
  to 09.30.2015  to 09.30.2014 
Maintenance of electrical system  35,213  26,833 
Maintenance of facilities  22,707  23,857 
Communication, processing and transmission of data  26,342  10,779 
Meter reading and bill delivery  11,738  10,250 
Authorized and registered agents  7,562  7,779 
Consumer service  5,902  4,093 
Other services  14,909  21,165 
  124,373  104,756 

 

32.4      Accruals and provisions

.  Parent company  Consolidated 
  09.30.2015  09.30.2014  09.30.2015  09.30.2014 
Provision for litigations (Note 29)  16,324  1,860  307,783  206,576 
PCLD (Client and Other credits)  -  -  188,110  67,680 
Provision for negative equity in subsidiaries  3,959  -  -  - 
Provision for losses on tax credits  -  -  1,246  1,657 
  20,283  1,860  497,139  275,913 

 

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.  Parent company  Consolidated 
  07.01.2015 07.01.2014  07.01.2015  07.01.2014 
  to 09.30.2015  to 09.30.2014   to 09.30.2015   to 09.30.2014  
Provision for litigations  1,543 144  61,398  98,298 
PCLD (Client and Other credits)  - -  29,545  27,773 
Reversal of provision for negative equity in subsidiaries  (209) -  -  - 
Provision for losses on tax credits  - -  2,504  840 
  1,334 144  93,447  126,911 

 

32.5      Construction cost

Consolidated  09.30.2015  09.30.2014 
Materials and supplies  402,418  517,154 
Third party services  360,028  313,494 
Personnel  67,337  94,208 
Others  34,557  46,877 
  864,340  971,733 
 
Consolidated  07.01.2015  07.01.2014 
  to 09.30.2015  to 09.30.2014 
Materials and supplies  146,770  171,271 
Third party services  124,239  122,768 
Personnel  23,461  31,770 
Others  7,791  19,361 
  302,261  345,170 

 

32.6      Other costs and expenses

Consolidated  09.30.2015  09.30.2014 
Financial offset for the use of w ater resources  110,953  105,906 
Losses in the decommissioning and disposal of assets  55,407  22,977 
Compensation  32,958  17,773 
Leasing and rent (32.6.1)  24,533  21,825 
Taxes  22,985  43,613 
Advertising and publicity  17,795  13,471 
Other net costs and expenses  55,787  40,213 
  320,418  265,778 
 
Consolidated  07.01.2015  07.01.2014 
  to 09.30.2015  to 09.30.2014 
Financial offset for the use of w ater resources  39,758  38,192 
Losses in the decommissioning and disposal of assets  29,321  4,432 
Compensation  10,630  11,913 
Leasing and rent (32.6.1)  9,610  6,708 
Taxes  6,273  4,865 
Advertising and publicity  9,337  5,588 
Other net costs and expenses  26,221  7,050 
  131,150  78,748 

 

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32.6.1     Costs and expenses of leases and rents

Consolidated  09.30.2015 09.30.2014
Real estate  19,472 18,600
Others  6,002 4,299
(-) PIS and Cofins credits  (941) (1,074)
  24,533 21,825
 
Consolidated  07.01.2015 07.01.2014
  to 09.30.2015  to 09.30.2014 
Real estate  7,007 6,035
Others  2,988 1,034
(-) PIS and Cofins credits  (385) (361)
  9,610 6,708

 

Company has not identified any operating lease commitments, which are non-cancellable.

33      Financial Results

.  Parent company  Consolidated 
  09.30.2015 09.30.2014 09.30.2015  09.30.2014 
Financial income         
Interest and monetary variation of CRC transfer (Note 8.1)  151,428 108,237 151,428  108,237 
Monetary variation of accounts receivable         
related to the concession (Note 10.1)  - - 135,956  36,961 
Arrears charges on energy bills  - - 117,636  116,844 
Return on financial investments held for trading  954 18,169 101,903  138,912 
Monetary variation and interest of accounts receivable         
related to the concession compensation (Note 11.1)  - - 96,900  42,693 
Remuneration of net sectoral assets (Note 9.2)  - - 89,809  - 
Return on financial investments held for sale  13 10 12,657  18,848 
Adjust to present value of accounts payable related to         
the concession - Use of Public Property (Note 27.1)  - - 1,637  - 
Other financial income  19,433 16,559 40,800  36,557 
  171,828 142,975 748,726  499,052 
( - ) Financial expenses         
Debt charges  198,969 122,418 447,644  256,163 
Monetary variation of accounts payable related to         
the concession - Use of Public Property (Note 27.1)  - - 68,748  42,862 
Interest on R&D and EEP (Note 26.2)  - - 24,647  16,626 
Other monetary and exchange variations  156 1,475 16,259  4,819 
Interest and monetary variation of CRC transfer  - 21,790 -  21,790 
Other financial expenses  3,898 767 37,175  19,901 
  203,023 146,450 594,473  362,161 
Net  (31,195) (3,475) 154,253  136,891 

 

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.  Parent company  Consolidated 
  07.01.2015 07.01.2014 07.01.2015 07.01.2014
  to 09.30.2015  to 09.30.2014  to 09.30.2015  to 09.30.2014 
Financial income         
Interest and monetary variation of CRC transfer (Note 8.1)  52,462 22,558 52,462 22,558
Monetary variation of accounts receivable         
related to the concession (Note 10.1)  - - 42,868 (14,389
Arrears charges on energy bills  - - 44,318 21,871
Return on financial investments held for trading  318 10,403 44,878 59,579
Monetary variation and interest of accounts receivable         
related to the concession compensation (Note 11.1)  - - 6,988 8,858
Remuneration of net sectoral assets (Note 9.2)  - - 11,667 -
Return on financial investments held for sale  5 3 3,938 7,544
Adjust to present value of accounts payable related to         
the concession - Use of Public Property (Note 27.1)  - - 250 -
Other financial income  8,035 5,065 12,846 9,575
  60,820 38,029 220,215 115,596
( - ) Financial expenses         
Debt charges  76,028 59,939 185,334 104,351
Monetary variation of accounts payable related to  - - - -
the concession - Use of Public Property  - - 21,806 8,517
Interest on R&D and EEP  - - 9,477 6,331
Other monetary and exchange variations  150 1 7,860 1,743
Interest and monetary variation of CRC transfer  - 7,277 - 7,277
Other financial expenses  2,853 7 2,999 3,516
  79,031 67,224 227,476 131,735
Net  (18,211) (29,195) (7,261) (16,139)

 

The costs of loans and financing capitalized during the nine-months period ended on September 30, 2015 amounted to R$116,250, at an average rate of 6.87% p.y.

34      Operating segments

The main makers of the strategic decisions of the Company and its subsidiaries, in charge of allocating funds and assessing the performance of operational segments, are the C-level executives of the Parent Company and of each subsidiary.

34.1      Products and services which generate revenues for the reportable segments

The Company operates in five reportable segments identified by management, through the Chief Executive Office and the chief offices of each business area, taking into consideration the regulatory environments, the strategic business units, and the different products and services. These segments are managed separately, since each business and each company requires different technologies and strategies.

In the nine-month period ended on September 30, 2015, all sales were made within Brazilian territory.

We have not identified any customer who individually accounts for more than 10% of total net revenues in the first semester of 2015.

 

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The Company evaluates the performance of each segment based on information derived from accounting records.

 

The accounting policies of the operating segments are the same as those described in the summary of significant accounting policies and record transactions between segments as transactions with third parties, i.e., at current market prices.

34.2      The Company’s reporting segments

Power generation and transmission (GET) - this segment comprises the generation of electric energy from hydraulic, wind, and thermal projects, the transport and transformation of the power generated by the Company, and the construction, operation, and maintenance of all power transmission substations and lines.

Power distribution and sales (DIS) - this segment comprises the distribution and sale of electric energy, the operation and maintenance of the distribution infrastructure, and related services.

Telecommunications (TEL) - this segment comprises telecommunications and general communications services.

Gas - this segment comprises the public service of piped natural gas distribution; and

Holding Company (HOL) - this segment comprises participation in other companies.

 

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34.3      Assets per reporting segment

ASSETS  GET  DIS  TEL  GAS  HOL  Eliminations   Consolidated 
09.30.2015               
TOTAL ASSETS  13,808,888  10,793,964  670,826  582,017 16,829,474  (14,270,845) 28,414,324 
CURRENT ASSETS  1,911,839  4,356,204  71,903  218,112 485,993  (323,825) 6,720,226 
Cash and cash equivalents  396,933  331,824  12,606  36,554 53,651  - 831,568 
Bonds and securities  377,909  159  -  6,317 164  - 384,549 
Collaterals and escrow accounts  -  1,696  -  113 -  - 1,809 
Trade accounts receivable  787,361  2,135,949  38,454  159,843 -  (141,590) 2,980,017 
Dividends receivable  13,702  -  -  - 188,785  (177,800) 24,687 
CRC transferred to the State Government of Paraná  -  -  -  - 104,534  - 104,534 
Net sectoral financial assets  -  1,236,253  -  - -  - 1,236,253 
Accounts receivable related to the concession  8,351  -  -  - -  - 8,351 
Accounts receivable related to the concession compensation  130,243  -  -  - -  - 130,243 
Other receivables  152,546  459,479  4,513  713 13,997  (3,299) 627,949 
Inventories  29,130  93,324  11,358  2,139 -  - 135,951 
Income Tax and Social Contribution  3,767  30,687  821  9,984 123,717  - 168,976 
Other noncurrent recoverable taxes  7,102  49,623  4,078  2,152 -  - 62,955 
Prepaid expenses  4,794  17,210  73  297 10  - 22,384 
Related parties  1  -  -  - 1,135  (1,136) - 
NON-CURRENT ASSETS  11,897,049  6,437,760  598,923  363,905 16,343,481  (13,947,020) 21,694,098 
Long Term Assets  1,526,506  5,937,547  84,153  60,548 2,037,449  (186,067) 9,460,136 
Bonds and securities  97,555  2,880  -  - -  - 100,435 
Collaterals and escrow accounts  -  84,024  -  - -  - 84,024 
Trade accounts receivable  2,372  37,805  44,982  - -  - 85,159 
CRC transferred to the State Government of Paraná  -  -  -  - 1,257,061  - 1,257,061 
Judicial deposits  62,413  333,025  7,368  39,784 272,222  - 714,812 
Net sectoral financial assets  -  217,408  -  - -  - 217,408 
Accounts receivable related to the concession  794,315  4,882,437  -  10,842 -  - 5,687,594 
Accounts receivable related to the concession compensation  218,871  -  -  - -  - 218,871 
Other receivables  29,256  11,685  -  (5,588) -  - 35,353 
Income Tax and Social Contribution  565  14,580  -  - 76,929  - 92,074 
Other noncurrent recoverable taxes  65,120  51,080  5,574  - 14  - 121,788 
Deferred income tax and social contribution  180,174  302,623  26,229  15,335 143,492  - 667,853 
Prepaid expenses  -  -  -  175 -  - 175 
Related parties  75,865  -  -  - 287,731  (186,067) 177,529 
Investments  1,969,360  1,374  -  - 14,260,078  (14,180,406) 2,050,406 
Property, plant and equipment  8,162,038  -  495,289  - 42,302  - 8,699,629 
Intangible Assets  239,145  498,839  19,481  303,357 3,652  419,453 1,483,927 

 

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34.4      Liabilities per reporting segment

LIABILITIES  GET  DIS  TEL  GAS  HOL  Eliminations   Consolidated 
09.30.2015               
TOTAL LIABILITIES  13,808,888  10,793,964 670,826 582,017 16,829,474  (14,270,845) 28,414,324 
CURRENT LIABILITIES  1,721,077  2,222,946 78,781 235,700 145,095  (357,230) 4,046,369 
Payroll, social charges and accruals  49,746  136,344 17,834 7,149 16,771  - 227,844 
Related parties  153  - 3,710 - 28,672  (32,535) - 
Suppliers  675,878  1,086,640 11,310 176,363 6,474  (144,896 1,811,769 
Income Tax and Social Contribution  323,699  - 2,769 - -  - 326,468 
Other taxes due  69,320  155,584 3,515 14,283 1,422  - 244,124 
Loans and financing  142,615  97,852 5,901 - 29,695  (1,999) 274,064 
Debentures  219,151  59,961 - 18,809 57,536  - 355,457 
Mandatory minimum dividend payable  64,200  89,491 31,300 7,168 4,136  (177,800) 18,495 
Dividends payable  9,332  26,199 1,266 - 17  - 36,814 
Customer charges due  33,490  361,440 - - -  - 394,930 
Research and Development and Energy Efficiency  41,725  116,325 - - -  - 158,050 
Accounts Payable related to concession - Use of Public Property  55,196  - - - -  - 55,196 
Other accounts payable  36,572  93,110 1,176 11,928 372  - 143,158 
NON-CURRENT LIABILITIES  4,694,881  3,204,158 103,760 49,852 2,421,536  (368,541) 10,105,646 
Related parties  132,447  - 11,900 - 115,743  (260,090) - 
Suppliers  14,249  - - - -  - 14,249 
Tax liabilities  176,148  74,199 4,442 - 1,437  - 256,226 
Deferred income tax and social contribution  -  - - - -  - - 
Loans and financing  1,467,186  770,302 22,979 - 969,011  (104,492) 3,124,986 
Debentures  1,297,897  999,294 - 41,935 996,198  - 3,335,324 
Post employment benefits  236,747  630,776 56,248 4,844 12,251  - 940,866 
Research and Development and Energy Efficiency  78,717  161,368 - - -  - 240,085 
Accounts Payable related to concession - Use of Public Property  463,339  - - - -  - 463,339 
Other accounts payable  285  - - 2,374 13,405  (3,959) 12,105 
Provisions for legal claims  827,866  568,219 8,191 699 313,491  - 1,718,466 
EQUITY  7,392,930  5,366,860 488,285 296,465 14,262,843  (13,545,074) 14,262,309 
Attributable to controlling shareholders  7,392,930  5,366,860 488,285 296,465 14,262,843  (13,906,354) 13,901,029 
Capital  4,493,362  3,342,841 304,198 220,966 7,309,606  (8,760,973) 6,910,000 
Afac  209,662  824,000 - - -  (1,033,662) - 
Equity valuation adjustments  1,033,601  (108,193) (16,876) (1,548) 925,393  (911,548) 920,829 
Legal reserve  361,072  157,187 12,022 21,238 685,349  (551,721) 685,147 
Profit retention reserve  303,935  1,052,826 145,513 37,370 4,520,666  (1,543,485) 4,516,825 
Dividends  -  - - - -  - - 
Accumulated income (loss)  991,298  98,199 43,428 18,439 821,829  (1,104,965) 868,228 
Attributed to non-controlling interest            361,280 361,280 

 

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34.5      Statement of income per reporting segment

STATEMENT OF INCOME  GET  DIS  TEL  GAS  HOL  Eliminations   Consolidated 
09.30.2015               
NET OPERATING REVENUES  3,867,124 7,217,318 204,141 1,228,211 - (1,125,666) 11,391,128
Supply of electric pow er for third-parties  424,333 3,734,411 - - - - 4,158,744
Supply of electric pow er among segments  - 3,203 - - - (3,203) -
Supply of electric pow er for third-parties  2,881,191 204,625 - - - - 3,085,816
Electricity sales to final customers - betw een segments  212,324 - - - - (212,324) -
Use of the main distribution and transmission grid - third-parties  130,078 1,587,273 - - - - 1,717,351
Use of the main distribution and transmission grid - betw een segment  49,527 11,540 - - - (61,067) -
Construction income  136,782 626,758 - 60,138 - - 823,678
Telecommunications services to third-parties  - - 153,683 - - - 153,683
Telecommunications services betw een segments  - - 21,106 - - (21,106) -
Distribution of piped gas  - - - 401,520 - - 401,520
Distribution of piped gas - third-parties  - - - 766,553 - (766,553) -
Sectoral financial assets and liabilities result  - 979,343 - - - - 979,343
Other operating revenues from third-parties  4,401 64,964 1,628 - - - 70,993
Other operating revenues betw een segments  28,488 5,201 27,724 - - (61,413) -
OPERATING COSTS AND EXPENSES  (2,839,573) (7,241,236)  (139,733) (1,200,175) (127,188) 1,129,798 (10,418,107)
Energy purchased for resale  (449,360) (4,777,595) - - - 211,696 (5,015,259)
Charges for use of the main transmission grid  (216,397) (464,947) - - - 57,877 (623,467)
Personnel and management  (166,724) (439,131) (56,386) (23,088) (62,331) - (747,660)
Pension and healthcare plans  (42,887) (123,506) (12,968) (1,684) (7,564) - (188,609)
Materials and supplies  (11,969) (42,385) (1,609) (1,328) (508) - (57,799)
Raw materials and supplies for generation  (955,567) - - - - 767,547 (188,020)
Natural gas and supplies for gas business  - - - (1,054,077) - - (1,054,077)
Third party services  (130,112) (262,462) (24,447) (12,750) (11,155) 82,962 (357,964)
Depreciation and amortization  (277,422) (182,968) (23,088) (15,513) (4,364) - (503,355)
Provisions and reversals  (250,807) (210,338) (3,843) (15,827) (20,283) 3,959 (497,139)
Construction cost  (177,444) (626,758) - (60,138) - - (864,340)
Other operating costs and expenses  (160,884) (111,146) (17,392) (15,770) (20,983) 5,757 (320,418)
EQUITY IN EARNINGS OF INVESTEES  268,356 - - - 879,513 (996,968) 150,901
PROFIT BEFORE FINANCIAL INCOME (LOSS) AND TAX  1,295,907 (23,918) 64,408 28,036 752,325 (992,836) 1,123,922
Financial result  3,923 179,500 995 1,026 (31,019) (172) 154,253
OPERATING PROFIT  1,299,830 155,582 65,403 29,062 721,306 (993,008) 1,278,175
Income Tax and Social Contribution  (536,446) - (24,319) (10,747) (343) - (571,855)
Deferred income tax and social contribution  166,890 (57,383) 2,344 124 45,144 - 157,119
INCOME (LOSS) FOR THE PERIOD  930,274 98,199 43,428 18,439 766,107 (993,008) 863,439

 

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35      Financial Instruments

35.1      Category and value of financial instruments

Consolidated      09.30.2015  12.31.2014 
  Note  Level  Book value   Fair value  Book value   Fair value 
Financial assets             
Fair value through profit or loss - held for trading             
Trading securities             
Cash and cash equivalents (a)  4  1  831,568  831,568  740,131  740,131 
Derivative financial instruments (b)  5  1  15,577  15,577  52,804  52,804 
Derivative financial instruments (b)  5  2  356,386  356,386  288,563  288,563 
      1,203,531  1,203,531  1,081,498  1,081,498 
Loans and receivables             
Collaterals and escrow accounts STN (c)  6    84,024  52,494  56,956  39,252 
Pledges and restricted deposits linked (a)  6    1,809  1,809  13,497  13,497 
Trade accounts receivable (a)  7    3,065,176  3,065,176  2,254,512  2,254,512 
CRC Transferred to the State Government of Paraná (d)  8    1,361,595  1,320,952  1,344,108  1,376,932 
Net sectoral financial assets (a)  9    1,453,661  1,453,661  1,041,144  1,041,144 
Accounts receivable related to the concession (e)  10    813,508  813,508  632,941  632,941 
Accounts receivable related to the concession compensation (f)  11    130,243  130,077  301,046  302,689 
      6,910,016  6,837,677  5,644,204  5,660,967 
Available for sale             
Accounts receivable related to the concession (g)  10  3  4,882,437  4,882,437  3,792,476  3,792,476 
Accounts receivable related to the concession compensation (h)  11  3  218,871  218,871  160,217  160,217 
Derivative financial instruments (b)  5  1  4,271  4,271  107,232  107,232 
Derivative financial instruments (b)  5  2  108,750  108,750  142,726  142,726 
Other investments (i)  17  1  17,271  17,271  17,631  17,631 
      5,231,600  5,231,600  4,220,282  4,220,282 
Total financial assets      13,345,147  13,272,808  10,945,984  10,962,747 
Financial liabilities             
Fair value through profit or loss - held for trading             
Trading securities             
Other liabilities – derivatives (b)    1  123  123  157  157 
      123  123  157  157 
Other financial liabilities             
Suppliers (a):  21    1,826,018  1,826,018  1,604,830  1,604,830 
Loans and financing (c)  22    3,399,050  2,826,340  3,468,950  3,229,136 
Debentures (j)  23    3,690,781  3,690,781  2,585,448  2,585,448 
Payable related to concession - use of public property (k)  27    518,535  627,717  491,727  598,493 
      9,434,384  8,970,856  8,150,955  8,017,907 
Total financial liabilities      9,434,507  8,970,979  8,151,112  8,018,064 
Different levels are defined as follows:
Level 1: Obtained from quoted prices (not adjusted) in active markets for identical assets and liabilities;
Level 2: obtained through other variables in addition to quoted prices included in Level 1, which are observable for the assets or liabilities;
Level 3: obtained through assessment techniques w hich include variables for the assets or liabilities, which how ever are not based on observable market data.

 

Determining fair values

a)     Equivalent to their respective carrying values due to their nature and terms of realization.

b)     Calculated according to information made available by the financial agents and to the market values of the bonds issued by the Brazilian government.

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c)     Calculated based on the cost of the last issue by the Company, 113.25% of the CDI for discount of the expected payment flow.

d)     The Company based its calculation on the comparison with a noncurrent, variable interest rate National Treasury bond (NTN-B) maturing on August 15, 2024, which yields approximately 7.40 % p.y. plus the IPCA inflation index.

e)     Criteria and assumptions disclosed on note 3.7.2 of December 31, 2014.

f)      The accounts receivable related to concession extension, related to the assets, which started operations after May 2000, the expected flow of cash entries was discounted at the Selic rate, the best short-term rate available for comparison for determination of its market value.

g)     Criteria and assumptions disclosed on note 3.7.1 of December 31, 20134. The changes held in the nine-month period ended on September 30, 2015 are as follows:

  Consolidated 
Balance as of January 1, 2015  3,792,476
Transfer of intagible - Renew al of Copel Distribuição’s Concession  520,841
Capitalization of intangible assets in progress  471,828
Monetary variations  135,956
Write-offs  (38,664)
Balance as of September 30, 2015  4,882,437

 

h)     These accounts receivable are related to assets existing as of May 31, 2000, equivalent to their book values, because the expert report to be analyzed by Aneel has not yet been completed.

i)      Calculated according to price quotes published in an active market or by applying the interest percentage over shareholders' equity for assets with no active market.

j)      Calculated according to the Unit Price Quotation (PU) as of September 30, 2015, obtained from the National Association of Financial Market Institutions (Anbima), net of the financial cost of R$4,055.

k)     Used the rate of 7.74% p.y. as a market reference.

35.2      Financial risk management

The Company has a Corporate Risk Management Committee in charge of formulating and tracking risk management policies and assisting the Audit Committee to ensure a good management of resources and the protection and appreciation of its assets.

The Company's business activities are exposed to the following risks arising from financial instruments:

35.2.1     Credit Risk

Credit risk is defined as the possibility of the occurrence of losses related to non-compliance by a client or counterpart to a financial instrument with their respective obligations under the terms agreed on.

 

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Consolidated     
Exposure to credit risk  09.30.2015  12.31.2014 
Cash and cash equivalents (a)  831,568  740,131 
Derivative financial instruments (a)  484,984  591,325 
Pledges and restricted deposits linked (a)  85,833  70,453 
Trade accounts receivable (b)  3,065,176  2,254,512 
CRC Transferred to the State Government of Paraná (c)  1,361,595  1,344,108 
Net sectoral financial assets (d)  1,453,661  1,041,144 
Accounts receivable related to the concession (e)  5,695,945  4,425,417 
Accounts receivable related to the concession compensation (f)  130,243  301,046 
Accounts receivable related to the concession compensation (g)  218,871  160,217 
  13,327,876  10,928,353 

 

a)     Company management manages the credit risk of its assets in accordance with the Group's policy of investing virtually all of its funds in federal banking institutions. As a result of legal and/or regulatory requirements, in exceptional circumstances the Company may invest funds in prime private banks.

b)     The risk arises from the possibility of the Company incurring losses resulting from problems in receiving amounts invoiced to its clients, customers, concession operators and licensees. This risk is closely related to internal and external factors of Copel. To mitigate this type of risk the Company manages its accounts receivable, detecting customer groups that pose the greatest risk of default, cutting off energy supplies and implementing specific collection policies, supported by real or personal guarantees for senior debt to R$200.

Doubtful accounts are adequately covered by an allowance to cover any realization losses.

c)     Company management believes the CRC poses a minimal credit risk, as the amortizations are guaranteed by dividends, and the State Government is paying the renegotiated amounts in accordance with the fourth amendment.

d)     The Management believes to be greatly reduced the risk of this credit, since the contracts that have been executed ensure the unconditional right to receive cash at the end of the concession to be paid by the Granting Authority, relating to costs not recovered through tariff.

e)     Based on the Company's understanding that the signed agreements establish the unconditional right to receive cash at the end of the concession, from the concession authority, for the investments made in assets that have not been recovered through rates by the end of the concession and specifically regarding energy transmission, as RAP is guaranteed revenue, and therefore not subject to the risk of demand.

f)      Management considers the credit risk on the indemnity approved for the assets, which started operations after May 2000 to be reduced, given that the realization and compensation rules have already been established by the Granting Authority. The Company received the installments overdue until April 2015 (installments 8/31) and the Management’s expectation is to receive the remaining installments.

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g)     For value of existing assets on May 31, 2000, Aneel published Resolution no. 589/2013, which addresses the definition criteria for calculating the New Replacement Value (VNR) for the indemnification purpose. For these assets, Management considers the credit risk as reduced since the rules for compensation are set and there is a going survey of information required by the granting authority.

ANEEL published Regulatory Resolution 596/2013 that sets criteria to calculate the New Replacement Value (VNR) of the concession generation assets for indemnification purposes. Although the Concession Authority has not yet disclosed the way the ROA will be paid and the approval of the investments made by the Company remains uncertain, management expects that the Company will be reimbursed for these assets, which shows the recoverability of the balances recognized on September 30, 2015.

35.2.2     Liquidity risk

The Company's liquidity risk consists of the possibility of insufficient funds, cash or other financial asset to settle obligations on scheduled dates.

The Company manages liquidity risk relying on a set of methodologies, procedures and instruments applied for a permanent control over financial processes to ensure a proper management of risks.

Investments are financed by incurring medium and long-term debt with financial institutions and capital markets.

Short-term, medium-term and long-term business projections are made and submitted to management bodies for evaluation. The budget for the next fiscal year is annually approved.

Medium and long-term business projections cover monthly periods over the next five years. Short-term projections consider daily periods covering only the next 90 days.

The Company permanently monitors the volume of funds to be settled by controlling cash flows to reduce funding costs, the risk involved in the renewal of loan agreements and compliance with the financial investment policy, while at the same time keeping minimum cash levels.

The table below shows the expected settlement amounts within each time range. Projections were based on financial indicators linked to the related financial instruments and forecast according to average market expectations as disclosed on the Central Bank of Brazil's Focus Report, which provides the average expectations of market analysts for these indicators for the current year and the following year. As from 2017, 2016 indicators are repeated through the forecast period, except for the US dollar, which follows the US inflation rate.

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Consolidated  Interest (a)  Less than   1 to 3  3 months    Over  Total 
    1 month  months  to 1 year 1 to 5 years  5 years  liabilities 
09.30.2015               
Loans and financing  Note 22  40,889  57,451 519,937 2,614,614  1,247,319  4,480,210 
Debentures  Note 23  74,616  93,643 365,782 4,405,964  -  4,940,005 
Derivatives  Future inter-bank rate  123  - - -  -  123 
Payable related to concession  Rate of return +             
  use of public property  IGP-M and IPCA  4,956  9,920 45,090 281,998  2,152,704  2,494,668 
Eletrobrás - Itaipu  Dollar  -  280,011 908,688 5,546,768  5,328,715  12,064,182 
Other suppliers  - 1,328,940  219,959 246,268 30,851  -  1,826,018 
Purchase obligations  IGP-M and IPCA  -  1,133,358 3,479,656 20,167,524  101,349,673  126,130,211 
Post-employment benefits  8.53% 38,322  76,645 344,902 1,797,468  5,690,070  7,947,407 
    1,487,846  1,870,987 5,910,323 34,845,187  115,768,481  159,882,824 
12.31.2014               
Loans and financing  Note 22  75,379  45,403 971,506 2,185,629  2,051,937  5,329,854 
Debentures  Note 23  4,939  10,966 692,433 2,680,345  -  3,388,683 
Derivatives  Future inter-bank rate  157  - - -  -  157 
Payable related to concession  Rate of return +             
  use of public property  IGP-M and IPCA  4,590  9,181 42,144 257,665  2,006,107  2,319,687 
Eletrobrás - Itaipu  Dollar  -  205,030 958,725 4,152,843  5,010,440  10,327,038 
Other suppliers  - 1,111,742  269,075 94,811 32,114  -  1,507,742 
Purchase obligations  IGP-M and IPCA  -  899,187 3,666,194 19,924,273  93,096,613  117,586,267 
Post-employment benefits  8.53% 38,322  76,645 344,902 1,797,468  5,690,070  7,947,407 
    1,235,129  1,515,487 6,770,715 31,030,337  107,855,167  148,406,835 
(a) Effective interest rate - w eighted average.             

 

As disclosed in notes 22.4 and 23.2, the Company and its subsidiaries have loan and financing agreements and debentures with covenants that if breached may require have its payment accelerated.

The main guarantees put up for maintaining business and investing activities are invested in securities (note 5) and cash (note 6).

35.2.3     Market Risk

Market risk is the risk that the fair value or future cash flows of the financial instrument fluctuate due to changes in market prices, such as exchange rates, interest rates and share prices. The purpose of risk management is to control exposures within acceptable limits, while optimizing return.

a)    Foreign currency risk (US Dollar)

This risk comprises the possibility of losses due to fluctuations in exchange rates, which may reduce assets or increase liabilities denominated in foreign currencies.

The Company’s foreign currency indebtedness is not significant and it is not exposed to foreign exchange derivatives. The Company monitors all relevant exchange rates.

The effect of the exchange rate variation resulting from the power purchase agreement with Eletrobras (Itaipu) is passed on to customers in Copel Distribuição's next rate review.

The exchange rate risk posed by the purchase of gas arises from the possibility of Compagás reporting losses on the fluctuations in gas prices resulting from a fluctuation in the value of the "basket of oils" and exchange rates, increasing the balances of accounts payable related to the acquired gas.

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Compagás monitors these fluctuations on a permanent basis.

Sensitivity analysis of foreign currency risk

The Company has developed a sensitivity analysis in order to measure the impact of the devaluation of the U.S. dollar on its loans and financing subject to exchange risk.

The baseline takes into account the existing balances in each account as of September 30, 2015 and the likely scenario takes into account the balances subject to the exchange rate variations – end of period (R$/US$ 4.08) estimated as market average projections for 2015 according to the Focus Report issued by the Brazilian Central Bank as of October 23, 2015. For the adverse and remote scenarios, deteriorations of 25% and 50%, respectively, were considered for the main risk factor for financial instruments compared to the rate used for the likely scenario.

      Baseline  Projected scenarios - Dec.2015 
Foreign exchange risk  Risk  09.30.2015 Probable  Adverse  Remote 
            
Financial assets           
Collaterals and escrow accounts - STN  USD depreciation  84,024 2,265 (19,307) (40,879)
      84,024 2,265 (19,307) (40,879)
Financial liabilities           
Loans and financing           
STN  USD appreciation  (106,491) (2,871) (30,211) (57,552)
Suppliers           
Eletrobrás (Itaipu)  USD appreciation  (141,714) (3,820) (40,204) (76,587)
Petrobras (acquisition of gas by Compagás)  USD appreciation  (174,054) (4,692) (49,379) (94,065)
    (422,259) (11,383) (119,794) (228,204)

 

In addition to the sensitivity analysis required by CVM Resolution no. 475/08, the Company evaluates its financial instruments considering the possible effects on profit and loss and equity of the risks evaluated by Company management on the reporting date for the financial instruments, as recommended by CPC 40 and IFRS 7. Based on the equity position and the notional value of the financial instruments held as of September 30, 2015, it is estimated that these effects will approximate the amounts stated in the above table in the column for the forecast probable scenario, since the assumptions used by the Company are similar to those previously described.

b)    Interest rate and monetary variation risk

This risk comprises the possibility of losses due to fluctuations in interest rates or other indicators, which may reduce financial revenues or increase financial expenses in connection with assets and liabilities on the market.

The Company has not engaged in transactions with derivatives to cover this risk, except for the exclusive investment funds (35.2.3-c), but it has continually monitored interest rates and market indicators, in order to assess the potential need for such transactions for protection for interest rate risks.

Sensitivity analysis of interest rate and monetary variation risk

The Company has developed a sensitivity analysis in order to measure the impact of variable interest rates and monetary variations on its financial assets and liabilities subject to these risks.

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The baseline takes into account the existing balances in each account as of September 31, 2015 and the likely scenario takes into account the indicators:

·         Cash and cash equivalents, bonds and securities, collaterals and escrow accounts: projected CDI/Selic rate of 14.42% based on the LTN reference rate, maturing on January 4, 2016 as disclosed by Bovespa on September 30, 2015;

·         CRC transferred to the State Government of Paraná, net sectorial financial assets, accounts receivable related to the concession, accounts receivable related to the concession extension and financial liabilities: CDI/Selic of 14.25%, IPCA of 9.82%, IGP-DI of 9.62%, IGP-M of 9.21% and TJLP of 7.00%, estimated as market average projections for 2015 according to the Focus Report issued by the Central Bank of Brazil as of October 23, 2015.

For the adverse and remote scenarios, deteriorations of 25% and 50%, respectively, were considered for the main risk factor for the financial instrument compared to the rate used in the likely scenario.

        Baseline  Projected scenarios - Dec.2015 
Interest rate risk and monetary variation  Risk  09.30.2015 Probable  Adverse  Remote 
             
Financial assets           
Financial investments - cash equivalents  Low CDI/SELIC  655,501 22,813 17,329 11,693
Bonds and securities  Low CDI/SELIC  484,984 16,880 12,820 8,652
Collaterals and escrow accounts  Low CDI/SELIC  1,809 63 48 32
CRC transferred to the State Government of Paraná  Low IGP-DI  1,361,595 31,627 23,922 16,086
Net sectoral financial assets  Low Selic  1,453,661 49,229 37,374 25,229
Accounts receivable related to the concession  Low IGP-M  5,695,945 126,849 95,912 64,472
Accounts receivable related to the concession compensation - RBNI  Low IPCA  130,243 3,086 2,335 1,570
Accounts receivable related to the concession compensation  Undefined (a)  218,871 - - -
    10,002,609 250,547 189,740 127,734
Financial liabilities           
Loans and financing           
Banco do Brasil  High CDI  (1,475,167) (49,957) (61,710) (73,199)
Eletrobrás - Finel  High IGP-M  (25,143) (115) (143) (172)
Eletrobrás - RGR  No risk (b)  (73,856) - - -
Finep  High TJLP  (28,880) (493) (612) (730)
BNDES  High TJLP  (1,548,673) (26,418) (32,819) (39,143)
Banco do Brasil - Distribution of Funds from BNDES  High TJLP  (140,840) (2,403) (2,985) (3,560)
Debentures  High CDI  (3,630,037) (122,933) (151,853) (180,124)
Debentures - Compagás  High TJLP  (60,744) (1,036) (1,287) (1,535)
Installment payment of tax debts to the Brazilian Federal Revenue Service  High Selic  (198,475) (6,721) (8,303) (9,848)
       (7,181,815) (210,076) (259,712) (308,311)
(a) Risk assessment still requires ruling by the Granting Authority.           
(b) Loan indexed to UFIR.           

 

In addition to the sensitivity analysis required by CVM Resolution no. 475/08, the Company evaluates its financial instruments considering the possible effects on profit and loss and equity of the risks evaluated by Company management on the reporting date for the financial instruments, as recommended by CPC 40 and IFRS 7. Based on the equity position and the notional value of the financial instruments held as of September 30, 2015, it is estimated that these effects will approximate the amounts stated in the above table in the column for the forecast probable scenario, since the assumptions used by the Company are similar to those previously described.

 

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c)    Risk of derivatives

The Company employs derivative financial instruments with the sole purpose of protecting itself against variable interest rate volatility.

In order to protect against the effects of volatility on long exposures (DI interest rates) of bonds and securities, the Company hired future DI rate operations, negotiated at BM&FBOVESPA and registered at CETIP, whose nominal balances and conditions are as follows:

i)      For the nine-month period ended September 30, 2015, the result of operations with derivative financial instruments on the futures market was a gain of R$337 (a loss of R$67 on September 2014);

ii)    Contracts are adjusted daily in accordance with the future DI rates published by BM&FBOVESPA. The reference (notional) values of these outstanding contracts as of September 30, 2015 corresponded to R$13,374 (R$64,880 as of December 31, 2014);

iii)   On September 30, 2015, a share of the Company’s federal bonds in the amount of R$2,149 (R$6,487 as of December 31, 2014), was deposited as collateral for transactions at BM&FBOVESPA S.A.

Sensitivity analysis of derivative financial instruments risk

In order to measure the effects of the variations in the indices and rates tied to the derivative operations, the following sensitivity analysis table was prepared in accordance with the terms provided by CVM Resolution no. 475/08, which includes a scenario considered probable by Company management, a situation considered adverse of at least a 25% deterioration in the variables used and a situation considered remote, with a deterioration of at least 50% in the risk variables. The base scenario took into account the existing balances and the probable scenario for balances with changes in the BM&FBOVESPA preferential rate for LTN (National Treasury Bills) maturing on January 04, 2016.

       Baseline  Projected scenarios - Dec.2015 
Risk of derivatives  Risk  09.30.2015 Probable  Adverse  Remote 
              
Financial assets (liabilities)           
Derivative liabilities  Decrease in DI rate  (123) (45) (157) (272)
   

(123)

(45) (157) (272)
           
Expected effect in the result      78 (34) (149)

 

35.2.4     Power shortage risk

This risk results from the possibility of periods with low levels of rainfall, since Brazil relies heavily on hydroelectric sources, which depend on the water levels in their reservoirs to operate.

A long period of drought may reduce the water levels in power plant reservoirs and result in losses due to reduced revenues if a new rationing program is implemented.

In recent years, the gradual loss of the dams' capacity to get back to normal levels, due to the increase in electricity demand, has caused the National Electric System Operator to recommend that all resources be employed to operate the electric system and ensure that demand is fully met.

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However, regarding short-term risk, the Electric Power Industry Monitoring Committee - CMSE has been reporting a balance between energy supply and demand, and indices have been kept within safety margins. The same position is adopted by ONS regarding the risk of deficit in the medium term, as stated in the 2015-2019 Energy Operation Plan.

Although dam storage levels are not ideal, from the standpoint of regulatory agencies, when combined with other variables they are sufficient to keep the risk of deficit within the safety margin established by the National Energy Policy Council - CNPE (maximum risk of 5%) for the 2015-2019 time frame in all subsystems.

35.2.5     Risk of non-renewal of concessions

Law 12,783/2013 published on January 14, 2013 ruled the extension of energy generation, transmission and distribution concessions covered by articles 17, 19 and 22 of Law 9,074/2015.  However, extension depends on full acceptance of the conditions set by that law.

In the generation segment, four power plants have been affected by Law 12,783/2013: Rio dos Patos with 1.8 MW, Mourão with 8.2 MW, Chopim with 1.8 MW and HPP Governador Pedro Viriato Parigot de Souza with 260 MW of installed capacity.

In order to maintain the Company's current profitability levels, the concessions for these plants have not been extended, given that studies have shown that the conditions imposed by the Concession Authority make the plants not economically feasible.

The power plants of Mourão and Governador Pedro Viriato Parigot de Souza will be put up for auction by ANEEL on November 25, 2015, and there is no guarantee that the Company will succeed in its bid. After the end of the concession, pursuant to Law 12.783/2013, Chopim I power plant became part of the inventory of Copel Geração e Transmissão. Rio dos Patos, in turn, is subject to the provisions, introduced by the same law applicable to the quotas, i.e. the percentage of the maximum megawatts of energy that may be used to prove that demand is met or may be marketed under purchase and sale agreements and of a power plant's potential that is allocated to a certain distributor.

In the transmission segment, facilities of Concession Agreement number 060/2001, has been extended for 30 more years, according to the conditions established by Law 12,783/2013.  In this case the conditions for making investments arising from contingencies, modernization, renovation and refurbishment of structures and equipment have been kept. These investments will actually be made upon Aneel's recognition and authorization. The guarantee that the regulatory body will reimburse the Company for the works rules out the possibility of financial losses and keeps the Company's current profitability levels.

In the distribution segment, the Company has issued a favorable opinion on the extension of Concession Agreement number 046/1999, pursuant to Law 12,783/2013.

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On 06.03.2015, there was the publication of Decree 8461, which established the conditions for the renewal of 42 concessions expiring between 2015 and 2017, including the one granted to Copel Distribuição.  According to this decree, those concessions must meet the following criteria: i) effectiveness with respect to the quality of the services rendered; ii) effectiveness with respect to the economic and financial management; iii) operating and economic rationality; and iv) tariff reasonableness.

On October 21, 2015, ANEEL disclosed the results of Public Hearing 038, which had the purpose of improving the template for amendments to the concession agreements entered into to extend the terms of distribution concessions. ANEEL recommended that the Ministry of Mining and Energy extend 40 electricity distribution concessions, among which that of Copel Distribuição. The new concession agreements set efficiency goals to be met by distribution companies. Efficiency will be addressed from the standpoint of service quality and sustainable economic and financial management. Failure to fall within regulatory limits may cause the concession to be terminated or the imposition of restrictions on the distribution of financial results to the companies' shareholders.

The Company believes on the possibility of the concession extension, since guaranteed the profitability levels of the company. Extension of the contractual concessions will take place by means of lawful regulatory conditions to be defined and likely to affect the rating, realizing of certain assets or settlement of certain liabilities.

The main items exposed to this event are as listed below:

i)      Sectorial financial assets: the portion stated as current may be realized in a term in excess of 12 months, should the concession not be renewed;

ii)    The concession’s financial assets: will depend on Aneel’s appraisal to confirm any sums subject to indemnity or likely to be attributed to a new concession period; and

iii)   Deferred income tax and social contribution: may be realized/settled over a term different from that provided by the Company.

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Concession agreements and authorization

Copel Geração e Transmissão  Interest %  Maturity 
Generation concession 045/1999     
HPP Gov. Pedro Viriato Parigot de Souza (GPS) (a) (b)  100  07.07.2015 
HPP Mourão I (a) (b)  100  07.07.2015 
TTP Figueira  100  03.26.2019 
HPP Gov. Bento Munhoz da Rocha Netto (Foz do Areia)  100  05.23.2023 
HPP São Jorge  100  12.03.2024 
HPP Guaricana  100  08.16.2026 
HPP Derivação do Rio Jordão (d)  100  11.15.2029 
HPP Gov. Ney Aminthas de Barros Braga (Segredo)  100  11.15.2029 
HPP Gov. José Richa (Salto Caxias)  100  05.04.2030 
SHP Melissa (f)  100  - 
SHP Pitangui (f)  100  - 
SHP Salto do Vau (f)  100  - 
 
Generation concession 001/2011     
HPP Colíder (e)  100  01.16.2046 
 
Generation Concession - Use of Public Property - 007/2013     
HPP Apucaraninha (d)  100  10.12.2025 
HPP Chaminé (d)  100  08.16.2026 
HPP Cavernoso (d)  100  01.07.2031 
 
Use of Public Property Concession - 002/2012     
HPP Baixo Iguaçu (g)  30  08.19.2047 
 
Authorizations     
Resolution nº. 278/1999 - UEE Palmas  100  09.28.2029 
Resolution nº. 351/1999 - TTP Araucária (20% - Copel)  60  12.22.2029 
Ordinance nº. 133/2011 - SHP Cavernoso II  100  02.27.2046 
 
Generation Concession - 001/2007     
HPP Mauá  51  07.02.2042 
 
In progress for homologation from ANEEL     
HPP Marumbi  100  - 
 
(a) Plant not renew ed pursuant to Executive Act no 579/2012 - Concessionaire's prerogative.
(b) By the end of the concession the project w ill be offered for competitive bidding. Auction Aneel 012/2015 as of 11.25.2015. 
(c) The Company w ill remain responsible for providing the pow er plant services until the concessionaire that has w on the bidding assumes the enterprise, still no date set to happen.
(d) Pow er plants that underw ent change in the exploration system from a Public Service regime to an Independent Producer Regime. 
(e) Building under construction.
(f) Only register w ith ANEEL.
(g) As of 10.10.2014 the 1st amendment to the MME Concession Agreement no 002/2012 w as signed formalizing the transfer of part 
of the HPP Baixo Iguaçu Concession to Copel Geração e Transmissão.

 

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Copel Geração e Transmissão  Interest %  Maturity 
Transmission lines and substations concession agreements     
Contract 060/01 - transmission facilities (a)  100  12.05.2042 
Contract 075/01 - Transmission line Bateias - Jaguariaíva  100  08.16.2031 
Contract 006/08 - Transmission line Bateias - Pilarzinho  100  03.16.2038 
Contract 027/09 - Transmission line Foz do Iguaçu - Cascavel Oeste  100  11.18.2039 
Contract 010/10 - Transmission line Araraquara 2 - Taubaté (b)  100  10.05.2040 
Contract 015/10 - Substation Cerquilho III (b)  100  10.05.2040 
Contract 001/12 - Transmission line Cascavel Oeste - Umuarama (b)  51  01.11.2042 
Contract 004/12 - Transmission line Nova Santa Rita - Camaquã 3 (b)  20  05.09.2042 
Contract 007/12 - Transmission line Umuarama - Guaira (b)  49  05.09.2042 
Contract 008/12 - Transmission line Curitiba - Curitiba Leste (b)  80  05.09.2042 
Contract 011/12 - Transmission line Açailândia - Miranda II  49  05.09.2042 
Contract 012/12 - Transmission line Paranaíta - Ribeirãozinho (b)  49  05.09.2042 
Contract 013/12 - Transmission line Ribeirãozinho - Marimbondo II (b)  49  05.09.2042 
Contract 022/12 - Transmission line - Foz do Chopim - Salto Osorio  100  08.26.2042 
Contract 002/13 - Transmission line - Assis - Paraguaçu Paulista II (b)  100  02.24.2043 
Contract 007/13 - Transmission line - Barreiras II - Pirapora 2 (b)  24,5  05.01.2043 
Contract 001/14 - Transmission line - Itatiba - Bateias (b)  50,1  05.13.2044 
Contract 005/14 - Transmission line - Bateias - Curitiba Norte (b)  100  01.28.2044 
Contract 019/14 - Transmission line - Estreito - Fernão Dias (b)  49  09.04.2044 
Contract 021/14 - Transmission line - Foz do Chopim - Realeza (b)  100  09.04.2044 
Contract 022/14 - Transmission line - Assis - Londrina (b)  100  09.04.2044 
 
(a) Concession renew ed pursuant to Executive Act no 579/2012.     
(b) Buildings under construction.     

 

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Copel    Interest %  Maturity 
Concessions contracts / Authorization of the equity interest     
Copel Distribuição - Contract 046/99 - Distribution Facilities (a)  100  07.07.2015 
Elejor - Contract 125/2001 - HPP Fundão and Santa Clara  70  10.24.2036 
Authorization contract - SHP Fundão I and SHP Santa Clara I - 753/2002 and 757/2002  70  12.18.2032 
Dona Francisca Energética - Contract 188/1998 - HPP Dona Francisca  23  08.27.2033 
Foz do Chopim - authorization contract - SHP Foz do Chopim - 114/2000  36  04.23.2030 
UEG Araucária - authorization 351/1999 - TTP Araucária (60% Copel GET)  20  12.22.2029 
Compagás - concession gas distribution contract  51  07.06.2024 
Nova Asa Branca I - MME Ordinance 267/2011 - WPP Asa Branca I (b)  100  04.24.2046 
Nova Asa Branca II - MME Ordinance 333/2011 - WPP Asa Branca II (b)  100  05.30.2046 
Nova Asa Branca III - MME Ordinance 334/2011 - WPP Asa Branca III (b)  100  05.30.2046 
Nova Eurus IV - MME Ordinance 273/2011 -WPP Eurus IV (b)  100  04.26.2046 
Santa Maria - MME Ordinance 274/2012 - WPP SM  100  05.07.2047 
Santa Helena - MME Ordinance 207/2012 - WPP Santa Helena  100  04.08.2047 
Ventos de Santo Uriel - MME Ordinance 201/2012 - WPPSanto Uriel  100  04.08.2047 
São Bento   - MME Ordinance 276 /2011 - WPP Dreen Boa Vista 100  04.27.2046 
  - MME Ordinance 263 /2011 - WPP Farol  100  04.19.2046 
  - MME Ordinance 343 /2011 - WPP Dreen Olho D'Água  100  05.31.2046 
  - MME Ordinance 310 /2011 - WPP Dreen São Bento do Norte  100  05.18.2046 
Voltalia  - MME Ordinance 173 /2012 - WPP São João (b)  49  03.25.2047 
  - MME Ordinance 204 /2012 - WPP Carnaúbas (b)  49  04.08.2047 
  - MME Ordinance 230 /2012 - WPP Reduto (b)  49  04.15.2047 
  - MME Ordinance 233/2012 - WPP Santo Cristo (b)  49  04.17.2047 
Cutia  - MME Ordinance 183/2015 - WPP Esperança do Nordeste (b)  100  05.10.2050 
- MME Ordinance 182/2015 - WPP Paraiso dos Ventos do Nordeste (b)  100  05.10.2050 
- Resolution 3.257/2011 - WPP GE Jangada (b)  100  01.04.2042 
- Resolution 3.259/2011 - WPP GE Maria Helena (b)  100  01.04.2042 
- MME Ordinance 179/2015 - WPP Potiguar (b)  100  05.10.2050 
- Resolution 3.256/2011 - WPP Dreen Guajiru (b)  100  01.04.2042 
  - Resolution 3.258/2011 - WPP Dreen Cutia (b)  100  01.04.2042 
 
(a) Sent on May 31, 2012 requesting extension of concession and sent on October 11, 2012 ratification of the requesting extension of concession (Executive Act no 579/2012).
(b) Buildings under construction.

 

35.2.6     Gas shortage risk

This risk involves potential periods of shortage of natural gas supply to meet the Company’s gas distribution and thermal generation business requirements.

Long periods of gas shortage could result in losses due to lower revenues by subsidiaries Compagás and UEG Araucária.

35.3      Capital management

The Company always seeks to maintain a strong capital base to maintain the trust of investors, creditors and market and ensure the future development of the business. It seeks to maintain a balance between the highest possible returns with more adequate levels of loans and the advantages and security provided by a healthy capital position. Thus, it maximizes the return for all interested parties in its operations, optimizing the balance of debts and equity.

 

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The capital structure is composed of:

a)     net indebtedness, defined as total loans, financing and debentures, net of cash and cash equivalents and short term bonds and securities; and

b)     own capital, defined as total equity.

  Parent company  Consolidated 
Indebtedness  09.30.2015  12.31.2014  09.30.2015  12.31.2014 
Loans and financing  998,706  958,416  3,399,050  3,468,950 
Debentures  1,053,734  1,010,485  3,690,781  2,585,448 
(-) Cash and cash equivalents  14,809  34,862  831,568  740,131 
(-) Derivative financial instruments  164  152  384,549  459,115 
Net debt  2,037,467  1,933,887  5,873,714  4,855,152 
Equity  13,901,029  13,330,689  14,262,309  13,682,780 
Equity indebtedness  0.15  0.15  0.41  0.35 

 

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36      Related Party Transactions

36.1      Main transactions between related parties

Consolidated  Assets  Liabilities  Income (loss) 
Related parties / Nature of operation  09.30.2015  12.31.2014  09.30.2015  12.31.2014  09.30.2015 09.30.2014
Controlling shareholder             
State of Paraná             
"Luz Fraterna" Program (a)  162,101  139,817  -  -  - -
Remuneration and employ social security charges assigned (b)  477  908  -  -  - -
Telecommunication services (c)  57,698  39,489  -  -  22,571 20,931
Entities with significant influence             
BNDES and BNDESPAR (d)             
Financing (Note 22)  -  -  1,548,673  1,526,141  (83,985) (53,813)
Debentures - Compagás (Note 23)  -  -  60,744  53,554  (2,259) (321)
Joint ventures             
Costa Oeste Transmissora de Energia             
Operating and maintenance services (e)  -  48  -  -  532 103
Basic and connecting netw ork (f)  -  -  -  -  (1,829) -
Caiuá Transmissora de Energia (g)  -  -  154  354  (10,754) 4,202
Integração Maranhense Transmissora (h)  -  -  -  -  (774) -
Transmissora Sul Brasileria de Energia (h)  -  -  -  -  (1,196) -
Associates             
Dona Francisca Energética S.A. (i)  -  -  1,262  6,538  (26,688) (55,867)
Foz do Chopim Energética Ltda. (j)  139  155  -  -  1,430 1,362
Sercomtel S.A. Telecomunicações (k)  248  -  -  -  708 735
Companhia de Saneamento do Paraná             
Treated w ater, sew age collection and treatment  -  -  4  4  (950) (969)
Use of w ater from Represa do Alagado  -  72  -  -  159 141
Telecommunications services (l)  245  246  -  -  2,151 1,844
Key management staff             
Fees and social security charges (Note 32.3)  -  -  -  -  (16,465) (13,854)
Pension and healthcare plans (Note 24)  -  -  -  -  (825) (948)
Other related parties             
Fundação Copel             
Administrative property rental  -  -  687  -  (9,887) (8,996)
Pension and healthcare plans (Note 24)  -  -  977,680  898,618  - -
Leasing and telecomunications services (m)  -  -  -  -  220 218
Lactec (n)  37,090  28,693  1,935  1,168  (8,660) (7,283)

 

a)     The Luz Fraterna Program, created under Law no. 491/ 2013 and no. 17,639, dated July 31, 2013, allows the State Government to pay for the electricity bills of low income families in Paraná – which have duly applied for the program – provided their consumption does not exceed 120 kWh a month. This benefit is available to residential customers with single-phase connections, rural customers with single-phase connections or two-phase connections with circuit breakers of up to 50 amperes. Applicants must not have more than one electricity bill under their names and must not have any pending debts to Copel Distribuição. On September 30, 2015, R$153,000 of the total is accounted for in the related parties account in the parent company's books of account, according to note 16.1.

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b)     Reimbursement of wages and social charges for employees transferred to the Paraná State Government. The balances shown are net of allowance for loan losses (PCLD) in the amount of R$1,188 on September 30, 2015 (R$1,195 on December 31, 2014).

c)     Telecommunications services rendered in accordance with the agreement entered into by Copel Telecomunicações with the State of Paraná.

d)     BNDES is the parent company of BNDES Participações SA (BNDESPAR) that holds 23.96% of the share capital of the Company (26.41% of the common shares and 21.27% of class B preferred shares).

e)     Operation and maintenance agreement due on December 26, 2018, signed by Caiuá Transmissora de Energia and Copel Geração e Transmissão.

f)      Use agreement of the transmission system, permanent, and connection agreement to the transmission system, due to the termination of the concession of the distributor or transmitter, whichever comes first, carried out between Costa Oeste Transmissora and Copel Distribuição.

g)     Use of Agreement of the transmission system, permanent, for hiring the Amount of Use of Transmission System - Must, with amounts set for the subsequent four years, with annual reviews, and connection agreement to the transmission system, due by the end of concession of distribution or transmission company, whichever occurs first, conducted between Caiuá Transmissora and Copel Distribuição. The balance as of September 30, 2014 refers to revenue environmental management services and operation and maintenance provided by Copel Geração e Transmissão.

h)     Use of agreement of the transmission system, permanent, for hiring the Must, with amounts set for the subsequent four years, with annual reviews, conducted between Integração Maranhense and Transmissora Sul Brasileira with Copel Distribuição.

i)      Power purchase and sale agreement signed by Dona Francisca Energética and Copel Geração e Transmissão, expiring on March 31, 2025.

j)      Agreements entered into between Foz do Chopim Energética Ltda. and Copel Geração e Transmissão, one for rendering operation and maintenance services, which matures on May 23, 2019, and the other for establishing a connection with the transmission system, which matures on January 1, 2043.

k)     Light pole sharing agreement, signed between Sercomtel S.A Telecomunicações and Copel Distribuição, expiring on December 28, 2018.

l)      Telecommunications services provided in accordance with the contract between Copel Telecomunicações and Sanepar.

m)    Telecommunications services provided and rental and leasing of equipment and infrastructure, in accordance with the contracts between Copel Telecomunicações and Fundação Copel.

n)     The Institute of Technology for Development (Lactec) is a Public Interest Civil Society Organization (OSCIP), in which Copel is an associated. Lactec has service and R&D contracts with Copel Geração e Transmissão and Copel Distribuição, which are subject to prior or later control and approval by Aneel.

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The asset balances refer to Energy Efficiency and R&D programs, recorded under current assets, in service in progress, until the respective projects are concluded, pursuant to Aneel.

Other transactions between the parent company and its related parties are shown in notes 8 - On lending of the balance of the account that records results to be offset (CRC) to the State Government of Parana, 16 - Related Parties and 17 - Investments.

The amounts resulting from the operating activities of Copel Distribuição with related parties are invoiced according to electricity rates approved by Aneel.

36.2      Guarantees and endorsements awarded to related parties

The Parent Company and São Bento granted the guarantee given for the issue of loans and debentures by subsidiaries, according to notes 22, 23 and 27.

Copel and Copel Geração e Transmissão grant guarantees in the issue of financing, debentures and insurance contracts of jointly controlled entities as shown below:

                Amount
      Date Final Amount Balance Interest endorsement/
  Empresa Operation issued maturity approved 09.30.2015 % security
(1) Caiuá Transmissora  Financing  12.23.2013  02.15.2029  84,600  85,758  49.0  42,021 
(2) Costa Oeste Transmissora  Financing  12.30.2013  11.15.2028  36,720  33,705  51.0  17,190 
(3) Guaraciaba Transmissora  Debentures  06.20.2013  12.20.2015  400,000  414,845  49.0  203,274 
(4) Integração Maranhense  Financing  12.30.2013  02.15.2029  142,150  142,473  49.0  69,812 
(5) Mata de Santa Genebra  Debentures  09.10.2014  03.12.2016  469,000  471,726  50.1  236,335 
(6) Matrinchã Transmissora  Financing  12.27.2013  05.15.2029  691,440  670,125  49.0  328,361 
(7) Transmissora Sul Brasileira  Financing  12.12.2013  07.15.2028  266,572  247,022  20.0  49,404 
(8) Transmissora Sul Brasileira  Debentures  09.15.2014  09.15.2028  77,550  91,230  20.0  18,246 
(9) Paranaíba Transmissora  Debentures  11.24.2014  11.24.2015  350,000  393,074  24.5  96,303 
(10) Marumbi Transmissora  Financing  10.06.2014  07.15.2029  55,037  53,750  80.0  43,000 
 

Financial institution (fund provider):
BNDES: (1) (2) (4) (6) (7) (10)

Allocation:
Investment Program and/or Working capital.

Endorsement/Security:
Provided by Copel Geração e Transmissão: (1) (4)
Provided by Copel: (2) (3) (5) (6) (7) (8) (9) (10)

Securities offered for the transaction:
Lien on shares given by Copel Geração e Transmissão, corresponding to: 49% (1) (4) (6); 51% (2); 20% (7) (8); 80% (10) 

 

Performance bond  Final  Amount % endorsement  Amount 
Company  maturity  Insured  Copel GeT  endorsement 
Matrinchã Transmissora  02.28.2016  90,000  49.0  44,100 
Guaraciaba Transmissora  02.28.2016  47,000  49.0  23,030 
Paranaíba Transmissora  06.29.2016  48,000  24.5  11,760 
Mata de Santa Genebra  05.26.2018  78,300  50.1  39,228 
Cantareira Transmissora  11.30.2018  31,200  49.0  15,288 

 

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37      Insurance

Details by risk type and effectiveness date of the main policies can be seen below:

Consolidated  Final  Amount 
Policy  maturity  Insured 
Nominated Risks  08.24.2016  2,067,793 
Fire - Company-ow ned and rented facilities  08.24.2016  535,667 
Civil liability - Compagás  10.30.2015  4,200 
Domestic and international transport - export and import  08.24.2016  policy for registration 
Multi-risk - Compagás  12.18.2015  14,750 
Multi-risk - Compagás  04.26.2016  470 
Life insurance - Compagás  08.01.2016  36 x employee salary 
Multi-risk - Elejor  04.11.2016  197,800 
Vehicles - Compagás  10.16.2015  market value 
Miscellaneous risks  08.24.2016  1,079 
Financial Guarantee - Elejor  01.01.2016  3,664 
Nominated risks - Elejor  05.14.2016  813 
Operational risks - UEG Araucária (a)  11.30.2016  1,433,051 
Court bond - Compagás  02.03.2016  56,938 
Performance bond - Aneel  05.01.2017  44,319 
Performance bond - Aneel  12.27.2015  1,850 
Operational risks - HPP Mauá - Consórcio Energético Cruzeiro do Sul  11.23.2015  342,139 
Performance bond - Nova Asa Branca I  10.12.2015  3,330 
Performance bond - Nova Asa Branca III  12.30.2015  4,995 
Performance bond - Nova Asa Branca III  12.30.2015  3,330 
Performance bond - Nova Eurus IV  11.20.2015  3,330 
Performance bond - Brazil's National Oil Agency - ANP  11.11.2018  59,440 
Performance bond - Aneel  11.30.2017  2,450 
Performance bond - Aneel  06.02.2018  6,750 
Participation guarantee - Brazil's National Oil Agency - ANP  03.02.2016  862 
Performance bond - Aneel  04.01.2016  2,890 
Performance bond - Aneel  07.31.2017  12,500 
Performance bond - CREA - PARANA  12.31.2016  24 
Participation guarantee - Aneel  02.04.2016  646 
Financial guarantee - Cosern  11.01.2015  21 
Operational risks - São Bento  12.28.2015  390,935 
Civil liability - São Bento  01.01.2016  20,000 
Performance bond - Aneel  10.31.2018  37,751 
Performance bond - Aneel  01.31.2020  26,609 
Performance bond - Ministry of Justice - Superintendence for highw ay police  08.31.2016  14 
Airplane insurance  01.30.2016  111,261 
Performance bond - National Department of Infrastructure and Transport - DNIT  18.15.2016  2 
(a) The values of the insured of operating risks - UEG Araucária and civil liability insurance for directors and officers have been translated from USD into BRL, w ith the current rate R$ 3.9729, as of 09.30.2015.
(b) The guarantee insurance listed above have Copel as a guarantor, w ithin the limits of their participation in each project. 

 

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38      Subsequent Event

On August 21, 2015, Santa Maria Energias Renováveis S.A. and Santa Helena Energias Renováveis S.A. entered into finance agreements with BNDES (National Bank for Economic and Social Development) in the respective amounts of R$71,676 and R$82,973 that bear long-term interest rate + 1.66% p.a. and are to be repaid in 16 years. The agreements were secured by Copel and Copel Brisa Potiguar. In October 2015, R$59,462 was released for Santa Maria and R$64,520 was released for Santa Helena.

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INDEPENDENT AUDITORS’ REVIEW REPORT

 

 

To the Shareholders and Management

Companhia Paranaense de Energia - COPEL

Curitiba – PR

 

Introduction

We have reviewed the individual and consolidated interim financial information of Companhia Paranaense de Energia - COPEL included in the Quarterly Information Forms, for the quarter ended September 30, 2015, which include the statement of financial position at September 30, 2015 and the related statements of income and comprehensive income for the three and nine-month periods then ended, and the statements of changes in equity and cash flows for the nine-month period then ended, including a summary of the significant accounting practices and other notes to the financial statements.

Management is responsible for preparing and presenting these interim financial information in accordance with Technical Pronouncement CPC 21 (R1) – Interim Statements and with the international standard IAS 34 – Interim Financial Reporting, issued by the International Accounting Standards Board – IASB, and for presenting this information in a manner consistent with the norms issued by the Brazilian Securities and Exchange Commission (CVM), applicable for preparing Quarterly Information - ITR. Our responsibility is to express a conclusion on this interim financial information based on our review.

Extent of our review

We performed our review in accordance with Brazilian and international standards for reviewing interim information (NBC TR 2410 – Review of Interim Information Performed by the Entity’s Auditors and ISRE 2410 - Review of Interim Financial Information Performed by the Independent Auditor of the Entity, respectively). A review of interim information consists of making enquiries, mainly of persons responsible for financial and accounting issues and applying analytical procedures and other review procedures. The extent of our review is significantly less than that for an audit undertaken in accordance with auditing standards and consequently, did not enable us to obtain assurance that we were informed of all of the significant issues that could be identified during an audit. Therefore, we do not express an audit opinion.

 

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Unqualified conclusion on the individual and consolidated interim financial information

Based on our review, we are not aware of any fact that would lead us to believe that the individual and consolidated interim financial information included in the quarterly information referred to above, have not been prepared, in all material respects, according to CPC Pronouncement 21(R1) and IAS 34 applicable to the preparation of quarterly information and have not been disclosed in accordance with the standards issued by the Brazilian Securities and Exchange Commission.

 

Other issues

Statements of added value

We also reviewed the individual and consolidated interim statements of added value, for the nine-month period ended September 30, 2015, which are management’s responsibility and presentation of which in the interim statements is required according to the norms issued by the Brazilian Securities and Exchange Commission, applicable for preparing Quarterly Information - ITR and considered supplementary information by the IFRS, which do not require a statement of added value to be reported. These statements were subject to the same review procedures described previously, and based on our review, we are not aware of any fact that would leads us to believe that they were not prepared, in all material respects, in accordance with the interim individual and consolidated financial information taken as a whole.

 

Curitiba, November 10, 2015

 

KPMG Auditores Independentes

CRC SP-014428/O-6 F-PR

A free translation of the original report signed in Portuguese

 

 

João Alberto Dias Panceri

Accountant CRC PR-048555/O-2

 

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SIGNATURE
 
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: December 21, 2015
 
COMPANHIA PARANAENSE DE ENERGIA – COPEL
By:
/S/  Luiz Fernando Leone Vianna
 
Luiz Fernando Leone Vianna
Chief Executive Officer
 
 
FORWARD-LOOKING STATEMENTS

This press release may contain forward-looking statements. These statements are statements that are not historical facts, and are based on management's current view and estimates of future economic circumstances, industry conditions, company performance and financial results. The words "anticipates", "believes", "estimates", "expects", "plans" and similar expressions, as they relate to the company, are intended to identify forward-looking statements. Statements regarding the declaration or payment of dividends, the implementation of principal operating and financing strategies and capital expenditure plans, the direction of future operations and the factors or trends affecting financial condition, liquidity or results of operations are examples of forward-looking statements. Such statements reflect the current views of management and are subject to a number of risks and uncertainties. There is no guarantee that the expected events, trends or results will actually occur. The statements are based on many assumptions and factors, including general economic and market conditions, industry conditions, and operating factors. Any changes in such assumptions or factors could cause actual results to differ materially from current expectations.