Pursuant to Rule 13a-16 or 15d-16 of the
80420-170 Curitiba, Paraná
Federative Republic of Brazil
(5541) 3222-2027
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
CNPJ/MF 76.483.817/0001-20
Inscrição Estadual 10146326-50
Companhia de Capital Aberto - CVM 1431-1
www.copel.com copel@copel.com
Rua Coronel Dulcídio, 800, Batel - Curitiba - PR
CEP 80420-170
Quarterly Financial Information
March / 2014
SUMMARY
QUARTERLY FINANCIAL INFORMATION | 3 | ||
Statements of Financial Position | 3 | ||
Statements of Income | 5 | ||
Statements of Comprehensive Income | 6 | ||
Statements of Changes in Equity | 7 | ||
Statements of Cash Flows | 8 | ||
Statements of Added Value | 10 | ||
NOTES TO THE QUARTELY FINANCIAL INFORMATION | 12 | ||
1 | General Information | 12 | |
2 | Basis of Preparation | 12 | |
3 | Significant Accounting Policies | 13 | |
4 | Cash and Cash Equivalents | 13 | |
5 | Bonds and Securities | 14 | |
6 | Collaterals and Escrow Accounts | 15 | |
7 | Trade Accounts Receivable | 16 | |
8 | CRC Transferred to the State Government of Paraná | 17 | |
9 | Accounts receivable related to the concession | 18 | |
10 | Accounts receivable related to the concession extension | 18 | |
11 | Other Receivables | 19 | |
12 | Inventories | 20 | |
13 | Income Tax, Social Contribution and Other Taxes | 20 | |
14 | Judicial Deposits | 24 | |
15 | Related parties | 24 | |
16 | Investments | 25 | |
17 | Property, Plant and Equipment | 32 | |
18 | Intangible Asset | 35 | |
19 | Payroll, Social Charges and Accruals | 37 | |
20 | Suppliers | 37 | |
21 | Loans and Financing | 39 | |
22 | Debentures | 46 | |
23 | Post-Employment Benefits | 47 | |
24 | Customer Charges Due | 48 | |
25 | Research and Development and Energy Efficiency | 49 | |
26 | Accounts Payable related to concession - Use of Public Property | 50 | |
27 | Other Accounts Payable | 51 | |
28 | Provision for Contingencies | 51 | |
29 | Equity | 58 | |
30 | Operating Revenues | 60 | |
31 | Operating Costs and Expenses | 62 | |
32 | Financial Results | 65 | |
33 | Operating Segment | 66 | |
34 | Financial Instruments | 70 | |
35 | Related Party Transactions | 81 | |
36 | Insurance | 85 | |
37 | Regulatory Assets and Liabilities | 85 | |
38 | Provisional Measure no. 627/13 | 87 | |
39 | Subsequent Events | 87 | |
COMMENTS ON PERFORMANCE FOR THE PERIOD | 89 | ||
GROUPS IN CHARGE OF GOVERNANCE | 97 | ||
INDEPENDENT AUDITORS’ REVIEW REPORT | 98 |
QUARTERLY FINANCIAL INFORMATION
Statements of Financial Position
as of March 31, 2014 and December 31, 2013
All amounts expressed in thousands of Brazilian reais, unless otherwise stated
ASSETS | Note | Parent Company | Consolidated | ||
03.31.2014 | 12.31.2013 | 03.31.2014 | 12.31.2013 | ||
CURRENT ASSETS | |||||
Cash and cash equivalents | 4 | 25,835 | 10,410 | 1,384,692 | 1,741,632 |
Bonds and securities | 5 | 145 | 186 | 219,467 | 389,222 |
Collaterals and escrow accounts | 6 | - | - | 567 | 1,976 |
Trade accounts receivable | 7 | - | - | 2,007,121 | 1,337,628 |
Dividends receivable | 15.1 | 80,361 | 381,371 | 15,028 | 9,500 |
CRC transferred to the State Government of Paraná | 8 | 87,447 | 85,448 | 87,447 | 85,448 |
Accounts receivable related to the concession | 9 | - | - | 4,726 | 4,396 |
Accounts receivable related to the concession extension | 10 | - | - | 352,161 | 352,161 |
Other current receivables | 11 | 9,532 | 3,869 | 1,154,082 | 395,890 |
Inventories | 12 | - | - | 132,997 | 139,278 |
Income Tax and Social Contribution | 13.1 | 17,418 | 42,494 | 76,836 | 133,158 |
Other current recoverable taxes | 13.3 | - | - | 137,756 | 70,013 |
Prepaid expenses | - | - | - | 18,865 | 19,982 |
220,738 | 523,778 | 5,591,745 | 4,680,284 | ||
NONCURRENT ASSETS | |||||
Long Term Assets | |||||
Bonds and securities | 5 | - | - | 112,486 | 120,536 |
Collaterals and escrow accounts | 6 | - | - | 43,829 | 45,371 |
Trade accounts receivable | 7 | - | - | 145,356 | 132,686 |
CRC transferred to the State Government of Paraná | 8 | 1,307,932 | 1,295,106 | 1,307,932 | 1,295,106 |
Judicial deposits | 14 | 273,221 | 272,115 | 688,654 | 675,225 |
Accounts receivable related to the concession | 9 | - | - | 3,698,291 | 3,484,268 |
Accounts receivable related to the concession extension | 10 | - | - | 277,605 | 365,645 |
Other noncurrent receivables | 11 | 37 | - | 29,769 | 29,435 |
Income Tax and Social Contribution | 13.1 | 171,178 | 169,717 | 184,887 | 197,659 |
Other noncurrent recoverable taxes | 13.3 | - | - | 125,259 | 124,498 |
Deferred Income Tax and Social Contribution | 13.2 | 95,054 | 91,205 | 766,016 | 753,413 |
Prepaid expenses | - | - | - | 399 | 399 |
Receivable from related parties | 15.1 | 63,306 | 64,815 | - | - |
1,910,728 | 1,892,958 | 7,380,483 | 7,224,241 | ||
Investments | 16 | 12,567,017 | 12,055,619 | 1,242,897 | 1,187,927 |
Property, Plant and Equipment, net | 17 | 33 | 29 | 8,089,560 | 7,983,632 |
Intangible Assets | 18 | 30,723 | - | 2,129,519 | 2,035,361 |
14,508,501 | 13,948,606 | 18,842,459 | 18,431,161 | ||
TOTAL ASSETS | 14,729,239 | 14,472,384 | 24,434,204 | 23,111,445 | |
Notes are an integral part of these quarterly information |
3
Statements of Financial Position
as of March 31, 2014 and December 31, 2013 (continued)
All amounts expressed in thousands of Brazilian reais, unless otherwise stated
LIABILITIES | Note | Parent Company | Consolidated | ||
03.31.2014 | 12.31.2013 | 03.31.2014 | 12.31.2013 | ||
CURRENT LIABILITIES | |||||
Payroll, social charges and accruals | 19 | 22,190 | 4,946 | 233,739 | 239,685 |
Payable to subsidiary | 15.2 | 235,427 | 468,317 | - | - |
Suppliers | 20 | 1,208 | 3,211 | 1,916,136 | 1,092,239 |
Income Tax and Social Contribution Payable | 13.1 | 1,999 | - | 200,688 | 297,620 |
Other taxes due | 13.3 | 1 | 25,481 | 237,037 | 300,731 |
Loans and financing | 21 | 280,592 | 562,801 | 693,618 | 957,106 |
Debentures | 22 | - | - | 84,341 | 57,462 |
Dividend payable | - | 3,005 | 3,047 | 15,522 | 18,713 |
Post employment benefits | 23 | 2 | 2 | 31,682 | 29,983 |
Customer charges due | 24 | - | - | 34,129 | 37,994 |
Research and Development and Energy Efficiency | 25 | - | - | 130,725 | 127,860 |
Accounts payable related to concession - Use of Public Property | 26 | - | - | 52,099 | 51,481 |
Other accounts payable | 27 | 25,812 | 16,432 | 174,099 | 137,011 |
570,236 | 1,084,237 | 3,803,815 | 3,347,885 | ||
NONCURRENT LIABILITIES | |||||
Suppliers | 20 | - | - | 44,904 | 50,121 |
Other taxes due | 13.3 | 314 | 40 | 73,615 | 68,402 |
Deferred Income Tax and Social Contribution | 13.2 | - | - | 381,889 | 420,501 |
Loans and financing | 21 | 684,283 | 456,752 | 2,585,337 | 2,366,678 |
Debentures | 22 | - | - | 1,170,121 | 1,150,483 |
Post employment benefits | 23 | 16,671 | 2,169 | 953,328 | 937,249 |
Research and Development and Energy Efficiency | 25 | - | - | 172,767 | 154,721 |
Accounts payable related to concession - Use of Public Property | 26 | - | - | 431,403 | 420,293 |
Other accounts payable | 27 | - | - | 230 | 233 |
Provision for contingencies | 28 | 278,219 | 277,847 | 1,313,933 | 1,266,127 |
979,487 | 736,808 | 7,127,527 | 6,834,808 | ||
EQUITY | 29 | ||||
Attributable to controlling shareholder's | |||||
Capital | 6,910,000 | 6,910,000 | 6,910,000 | 6,910,000 | |
Equity valuation adjustments | 949,261 | 983,159 | 949,261 | 983,159 | |
Legal reserve | 624,849 | 624,849 | 624,849 | 624,849 | |
Profit retention reserve | 3,897,833 | 3,897,833 | 3,897,833 | 3,897,833 | |
Additional proposed dividends | 235,498 | 235,498 | 235,498 | 235,498 | |
Accumulated Profit | 562,075 | - | 562,075 | - | |
13,179,516 | 12,651,339 | 13,179,516 | 12,651,339 | ||
Attributable to non-controlling interest | 29.2 | - | - | 323,346 | 277,413 |
13,179,516 | 12,651,339 | 13,502,862 | 12,928,752 | ||
TOTAL LIABILITIES & EQUITY | 14,729,239 | 14,472,384 | 24,434,204 | 23,111,445 | |
Notes are an integral part of these quarterly information |
4
Statements of Income
for the three-month periods ended March 31, 2014 and 2013
All amounts expressed in thousands of Brazilian reais, unless otherwise stated
CONTINUING OPERATIONS | Note | Parent Company | Consolidated | ||
03.31.2014 | 03.31.2013 | 03.31.2014 | 03.31.2013 | ||
OPERATING REVENUES | 30 | - | - | 3,051,072 | 2,380,410 |
COST OF SALES AND SERVICES PROVIDED | 31 | - | - | (2,159,972) | (1,706,581) |
GROSS PROFIT | - | - | 891,100 | 673,829 | |
Operational expenses / income | |||||
Selling expenses | 31 | - | - | (27,298) | (24,068) |
General and administrative expenses | 31 | (26,932) | (5,322) | (112,888) | (103,357) |
Other operational income (expenses) | 31 | (487) | 22,967 | (101,594) | (47,945) |
Equity in earnings of investees | 529,186 | 377,161 | 55,269 | 19,608 | |
501,767 | 394,806 | (186,511) | (155,762) | ||
PROFIT BEFORE FINANCIAL RESULTS AND TAXES | 501,767 | 394,806 | 704,589 | 518,067 | |
Financial results | |||||
Financial income | 32 | 63,741 | 21,982 | 225,011 | 146,033 |
Financial expenses | 32 | (25,852) | (17,417) | (114,044) | (72,134) |
37,889 | 4,565 | 110,967 | 73,899 | ||
Profit Before Income Tax and Social Contribution | 539,656 | 399,371 | 815,556 | 591,966 | |
INCOME TAX AND SOCIAL CONTRIBUTION ON PROFIT | |||||
Current | 13.4 | (2,023) | - | (283,071) | (262,667) |
Deferred | 13.4 | (1,066) | (7,499) | 50,565 | 69,357 |
(3,089) | (7,499) | (232,506) | (193,310) | ||
NET INCOME | 536,567 | 391,872 | 583,050 | 398,656 | |
Attributed to controlling shareholders | - | - | 536,567 | 391,872 | |
Attributed to non-controlling interest | 29.2 | - | - | 46,483 | 6,784 |
Basic and diluted net earning per share attributed | |||||
To parent company shareholders - in reais | |||||
Ordinary shares | 29.1 | 1.87272 | 1.36771 | 1.87272 | 1.36771 |
Class "A" Preferred shares | 29.1 | 2.06002 | 1.50349 | 2.06002 | 1.50349 |
Class "B" Preferred shares | 29.1 | 2.05999 | 1.50448 | 2.05999 | 1.50448 |
Notes are an integral part of these quarterly information |
5
Statements of Comprehensive Income
for the three-month periods ended March 31, 2014 and 2013
All amounts expressed in thousands of Brazilian reais, unless otherwise stated
Note | Parent Company | Consolidated | |||
03.31.2014 | 03.31.2013 | 03.31.2014 | 03.31.2013 | ||
NET INCOME FOR THE PERIOD | 536,567 | 391,872 | 583,050 | 398,656 | |
Other comprehensive income | |||||
Items that will never be reclassified for profit or loss | |||||
Losses on actuarial liabilities | 29.1.2 | ||||
Post employment benefits | (14,429) | - | - | - | |
Post employment benefits - equity | 2,210 | - | (7,313) | - | |
Taxes on other comprehensive income | 29.1.2 | 4,906 | - | - | - |
Items that are or be or maybe reclassified for profit or loss | |||||
Adjustments related to Financial Assets classified as available for sale: | 29.1.2 | ||||
Financial investments | 589 | (2,699) | 893 | (4,090) | |
Investments | (28) | (746) | (28) | (746) | |
Other gains - subsidiary credits | (1,282) | - | (2,777) | - | |
Taxes on other comprehensive income | 29.1.2 | 9 | 253 | 650 | 1,644 |
Total comprehensive income for the period, before taxes | (8,025) | (3,192) | (8,575) | (3,192) | |
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD | 528,542 | 388,680 | 574,475 | 395,464 | |
Attributed to Parent Company | 528,542 | 388,680 | |||
Attributed to controlling shareholders | 45,933 | 6,784 | |||
Notes are an integral part of these quarterly information |
6
Statements of Changes in Equity
for the three-month periods ended March 31, 2014 and 2013
All amounts expressed in thousands of Brazilian reais, unless otherwise stated
Note | Attributable to Parent Company | Shareholders equity | Attributable to non controlling interests (Note 29.2) | Equity Consolidated | |||||||
Capital | Equity valuation adjustments | Profit reserves | Accumulated profit | ||||||||
Cost assigned | Other comprehensive income | Legal reserve | Profit retention reserve | Additional proposed dividends | |||||||
Balances 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 | - | - | - | - | - | - | 536,567 | 536,567 | 46,483 | 583,050 | |
Other comprehensive income | |||||||||||
Losses on financial assets, net of taxes | 29.1.2 | - | - | (712) | - | - | - | - | (712) | (550) | (1,262) |
Losses on actuarial liabilities, net of taxes | 29.1.2 | - | - | (7,313) | - | - | - | - | (7,313) | - | (7,313) |
Total comprehensive income for the period | - | - | (8,025) | - | - | - | 536,567 | 528,542 | 45,933 | 574,475 | |
Realization of equity valuation adjustments | 29.1.2 | - | (25,873) | - | - | - | - | 25,508 | (365) | - | (365) |
Balances as of March 31, 2014 | 6,910,000 | 1,213,082 | (263,821) | 624,849 | 3,897,833 | 235,498 | 562,075 | 13,179,516 | 323,346 | 13,502,862 | |
Notes are an integral part of these quarterly information |
Note | Attributable to Parent Company | Shareholders equity | Attributable to non controlling interests (Note 29.2) | Equity Consolidated | |||||||
Capital | Equity valuation adjustments | Profit reserves | Accumulated profit | ||||||||
Cost assigned | Other comprehensive income | Legal reserve | Profit retention reserve | Additional proposed dividends | |||||||
Balances as of January 1, 2013 - Stated | 6,910,000 | 1,341,098 | 8,904 | 571,221 | 3,337,295 | 64,474 | - | 12,232,992 | 264,506 | 12,497,498 | |
Actuarial adjustments - CPC 33 (R1)/ IAS 19 | - | - | (114,053) | - | - | - | - | (114,053) | - | (114,053) | |
Balances as of January 1, 2013 - Restated | 6,910,000 | 1,341,098 | (105,149) | 571,221 | 3,337,295 | 64,474 | - | 12,118,939 | 264,506 | 12,383,445 | |
Net Income for the period | - | - | - | - | - | - | 391,872 | 391,872 | 6,784 | 398,656 | |
Other comprehensive income | |||||||||||
Losses on financial assets, net of taxes | - | - | (3,192) | - | - | - | - | (3,192) | - | (3,192) | |
Losses on actuarial liabilities, net of taxes | - | - | (21,555) | - | - | - | - | (21,555) | - | (21,555) | |
Total comprehensive income for the period | - | - | (24,747) | - | - | - | 391,872 | 367,125 | 6,784 | 373,909 | |
Realization of equity valuation adjustments | - | (23,818) | - | - | - | - | 23,818 | - | - | - | |
Balances as of March 31, 2013 | 6,910,000 | 1,317,280 | (129,896) | 571,221 | 3,337,295 | 64,474 | 415,690 | 12,486,064 | 271,290 | 12,757,354 | |
Notes are an integral part of these quarterly information |
7
Statements of Cash Flows
for the three-month periods ended March 31, 2014 and 2013
All amounts expressed in thousands of Brazilian reais, unless otherwise stated
Note | Parent Company | Consolidated | |||
03.31.2014 | 03.31.2013 | 03.31.2014 | 03.31.2013 | ||
CASH FLOWS FROM OPERATIONAL ACTIVITIES | |||||
Net income for the period | 536,567 | 391,872 | 583,050 | 398,656 | |
Adjustments to reconcile net income for the period with cash | |||||
generated from operating activities | |||||
Depreciation | 17.3 | - | - | 91,252 | 88,989 |
Amortization of intangible assets - concessions | 18.2 | - | - | 60,771 | 55,786 |
Amortization of investments - concession right and authorization | 18.2 | - | - | 188 | 188 |
Amortization of intangible assets - others | 18.2 | - | - | 1,761 | 1,877 |
Unrealized monetary and exchange variations - net | (32,042) | 1,311 | (5,705) | (4,209) | |
Remuneration of accounts receivable related to concession | 9.1 | - | - | (14,844) | (5,163) |
Equity in earnings of subsidiaries | (529,186) | (377,161) | (55,269) | (19,608) | |
Income tax and social contribution | 13.4 | 2,023 | - | 283,071 | 262,667 |
Deferred income tax and social contribution | 13.2.1 | 1,066 | 7,499 | (50,565) | (69,357) |
Provision for losses from accounts receivable | 31.5 | - | - | 14,617 | 13,100 |
Provisions (reversals) for losses on taxes recoverable | 31.5 | - | - | 220 | (533) |
Provision (reversal) for legal claims | 31.5 | 372 | (22,988) | 46,197 | 6,969 |
Provisions (reversals) for losses with depreciation of investments | 16.2 | (1,774) | - | (1,774) | - |
Provision for post employment benefits | 23.4 | 2,589 | 115 | 53,839 | 45,354 |
Provision for research and development and energy efficiency | 25.2 | - | - | 27,416 | 21,933 |
Write off of accounts receivable related to concession | 9.1 | - | - | 9,252 | 14,847 |
Write off of property, plant and equipment | 17.3 | - | - | 103 | 578 |
Write off of intangible assets | 18.2 | - | - | 1,773 | 3,074 |
Decrease (increase) in assets | |||||
Trade accounts receivable | - | - | (688,842) | (217,413) | |
Dividends and interest on own capital received | 309,220 | 119,967 | 2,682 | 1,967 | |
CRC transferred to the Government of the State of Paraná | 8.2 | 43,019 | - | 43,019 | 40,770 |
Accounts receivable related to the concession extension | 10.1 | - | - | 106,717 | 124,013 |
Judicial deposits | (1,106) | 353 | (13,429) | (8,432) | |
Other receivables | (5,700) | (90) | (758,939) | (304,312) | |
Inventories | - | - | 6,281 | (10,416) | |
Income tax and social contribution | 23,615 | 33,181 | 69,101 | 19,895 | |
Other current taxes recoverable | - | - | (65,606) | (15,304) | |
Prepaid expenses | - | - | 1,117 | (10,022) | |
Increase (decrease) in liabilities | |||||
Payroll, social charges and accruals | 17,244 | (355) | (5,947) | (55,283) | |
Suppliers | (2,003) | 1,725 | 768,124 | 65,897 | |
Income tax and social contribution paid | (24) | (3,251) | (380,003) | (233,441) | |
Other taxes | (25,206) | (22,068) | (58,481) | (102,667) | |
Loans and financing - interest due and paid | 21.10 | (49,783) | (34,717) | (65,263) | (51,439) |
Debentures - interest due and paid | 22.1 | - | - | (5,016) | (55) |
Post employment benefits | 23.4 | (2,516) | (119) | (36,061) | (34,380) |
Customer charges due | - | - | (3,865) | (16,115) | |
Research and development and energy efficiency | 25.2 | - | - | (11,376) | (14,334) |
Payable related to the concession - use of public property | 26.1 | - | - | (12,859) | (12,118) |
Other accounts payable | 5,985 | (81) | 36,252 | 15,890 | |
Provisions for legal claims | 28.1 | - | - | (9,243) | (6,455) |
NET CASH GENERATED FROM (USED IN) OPERATING ACTIVITIES | 292,360 | 95,193 | (36,284) | (8,606) | |
(continued) |
8
Statements of Cash Flows
for the three-month periods ended March 31, 2014 and 2013 (continued)
All amounts expressed in thousands of Brazilian reais, unless otherwise stated
(continued) | |||||
Note | Parent Company | Consolidated | |||
03.31.2014 | 03.31.2013 | 03.31.2014 | 03.31.2013 | ||
CASH FLOWS FROM INVESTMENT ACTIVITIES | |||||
Financial investments | 41 | (2) | 181,649 | 112,396 | |
Additions Cutia - Net effect of acquired cash | - | - | (284) | - | |
Additions in investments | 16.2 | (2,527) | (18,300) | (43,174) | (89,789) |
Additions to property, plant and equipment | 17.3 | (4) | - | (182,806) | (10,201) |
Additions to intangible assets related to the concession | 18.2 | - | - | (255,271) | (194,542) |
Additions to intangible - concession and autorization rights | 18.2 | - | - | (2,903) | - |
Customers contributions | 18.2 | - | - | 24,886 | 32,196 |
Additions to other intangible assets | 18.2 | (12,513) | - | (12,369) | 656 |
NET CASH USED IN INVESTING ACTIVITIES | (15,003) | (18,302) | (290,272) | (149,284) | |
CASH FLOWS FROM FINANCING ACTIVITIES | |||||
Loans and financing obtained from third parties | - | - | - | 12,665 | |
Issue of Debentures | 22.1 | - | - | 29,374 | - |
Amortization of principal - loans and financing | 21.10 | (29,000) | - | (46,415) | (13,789) |
Amortization of principal - debentures | 22.1 | - | - | (10,152) | - |
Amortization of principal - liabilities with related parties | (232,890) | - | - | - | |
Dividends and interest on own capital paid | (42) | (94,107) | (3,191) | (94,107) | |
NET CASH USED IN FINANCING ACTIVITIES | (261,932) | (94,107) | (30,384) | (95,231) | |
TOTAL EFFECTS ON CASH AND CASH EQUIVALENTS | 15,425 | (17,216) | (356,940) | (253,121) | |
Cash and cash equivalents at the beginning of the period | 4 | 10,410 | 29,464 | 1,741,632 | 1,459,217 |
Cash and cash equivalents at the end of the period | 4 | 25,835 | 12,248 | 1,384,692 | 1,206,096 |
CHANGE IN CASH AND CASH EQUIVALENTS | 15,425 | (17,216) | (356,940) | (253,121) | |
Notes are an integral part of these quarterly information |
Additional information on cash flows | ||||
Transactions not involving cash | ||||
Acquisition of property with an increase in the balance of suppliers | - | - | - | 10,601 |
Acquisition of investments with an increase in the balance of other payable | 3,395 | - | - | - |
9
Statements of Added Value
for the three-month periods ended March 31, 2014 and 2013
All amounts expressed in thousands of Brazilian reais, unless otherwise stated
VALUE ADDED TO DISTRIBUTE | Parent Company | Consolidated | ||
03.31.2014 | 03.31.2013 | 03.31.2014 | 03.31.2013 | |
Income | ||||
Sale of energy, services and other income | - | - | 3,729,200 | 3,057,825 |
Construction income | - | - | 386,964 | 309,903 |
Other income | - | - | 102 | 1,970 |
Allowance for doubtful debts | - | - | (14,617) | (13,100) |
- | - | 4,101,649 | 3,356,598 | |
( - ) Supplies acquired from third parties | ||||
Energy purchased for resale | - | - | 1,072,802 | 918,783 |
Charges for use of the main transmission grid ( - ) ESS and ERR | - | - | 124,168 | 109,172 |
Materials, supplies and third parties services | 758 | 586 | 115,904 | 114,948 |
Natural gas and supplies for gas operations | - | - | 399,686 | 79,101 |
Construction costs | - | - | 333,670 | 284,161 |
Loss / Recovery of assets | - | - | 14,362 | 6,900 |
Other supplies | 1,579 | (20,514) | 52,474 | 20,357 |
2,337 | (19,928) | 2,113,066 | 1,533,422 | |
( = ) GROSS ADDED VALUE | (2,337) | 19,928 | 1,988,583 | 1,823,176 |
( - ) Depreciation and amortization | 188 | 189 | 153,972 | 146,841 |
( = ) NET ADDED VALUE | (2,525) | 19,739 | 1,834,611 | 1,676,335 |
( + ) Transferred added value | ||||
Financial income | 63,741 | 21,982 | 225,011 | 146,033 |
Results from investment interests | 529,258 | 377,330 | 55,340 | 19,777 |
Other Income | - | - | 30,484 | 55,330 |
592,999 | 399,312 | 310,835 | 221,140 | |
590,474 | 419,051 | 2,145,446 | 1,897,475 | |
(continued) |
10
Statements of Added Value
for the three-month periods ended March 31, 2014 and 2013 (continued)
All amounts expressed in thousands of Brazilian reais, unless otherwise stated
DISTRIBUTION OF ADDED VALUE | Parent Company | Consolidated | ||||||
03.31.2014 | % | 03.31.2013 | % | 03.31.2014 | % | 03.31.2013 | % | |
Personnel | ||||||||
Remuneration and fees | 15,337 | 1,529 | 162,838 | 183,135 | ||||
Private pension and health plans | 2,589 | 115 | 53,839 | 45,353 | ||||
Meal and education assistance | 1,554 | - | 22,815 | 23,349 | ||||
Social security charges - FGTS | 1,283 | 289 | 13,540 | 15,227 | ||||
Labor indemnities (reversals) | - | - | 727 | (1,706) | ||||
Profit sharing | 938 | - | 13,660 | 8,011 | ||||
Transfers to property, plant and equipment in progress | (1,039) | - | (6,333) | (10,184) | ||||
20,662 | 3.5 | 1,933 | 0.5 | 261,086 | 12.2 | 263,185 | 13.9 | |
Government | ||||||||
Federal | 7,921 | 8,222 | 599,142 | 584,966 | ||||
State | - | 1 | 552,500 | 559,460 | ||||
Municipal | - | - | 1,676 | 1,501 | ||||
7,921 | 1.3 | 8,223 | 2.0 | 1,153,318 | 53.8 | 1,145,927 | 60.4 | |
Third Parties | ||||||||
Interest and fines | 25,324 | 17,023 | 139,263 | 80,101 | ||||
Leasing and rent | - | - | 7,991 | 8,200 | ||||
Donations, subsidies and contributions | - | - | 738 | 1,406 | ||||
25,324 | 4.3 | 17,023 | 4.1 | 147,992 | 6.9 | 89,707 | 4.7 | |
Shareholders | ||||||||
Non controlling interests | - | - | 46,483 | 6,784 | ||||
Retained profits | 536,567 | 391,872 | 536,567 | 391,872 | ||||
536,567 | 90.9 | 391,872 | 93.4 | 583,050 | 27.1 | 398,656 | 21.0 | |
590,474 | 100.0 | 419,051 | 100.0 | 2,145,446 | 100.0 | 1,897,475 | 100.0 | |
Notes are an integral part of these quarterly information |
11
NOTES TO THE QUARTELY FINANCIAL INFORMATION
for the three-month periods ended March 31, 2014
All amounts expressed in thousands of Brazilian reais, unless otherwise stated
1 General Information
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 and Spain. Copel is a mixed capital company, controlled by the Government of the State of Paraná, 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 Basis of Preparation
2.1 Statement of compliance
The Company’s quarterly financial information includes:
i) The individual quarterly financial information of the parent company prepared in accordance with accounting practices adopted in Brazil; and
ii) The consolidated quarterly financial information prepared in accordance with International Financial Reporting Standards - IFRS issued by the International Accounting Standards Board - IASB and also 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, 2013 which did not alter during the quarter has not been presented. Therefore, this quarterly information should be read together with the financial statements at December 31, 2013, available on the websites of the Brazilian Securities and Exchange Commission - CVM and Copel.
12
Authorization for the publication of this quarterly financial information was granted at the Meeting of the Board of Directors held on May 13, 2014.
2.2 Basis of measurement
The quarterly financial information were prepared based on historic cost, except for certain financial instruments which were stated at fair values through profit or loss, financial assets available for sale measured at their fair values, and the interests in subsidiaries and jointly-controlled entities recognized in accordance with the equity accounting method.
2.3 Functional currency and presentation currency
The quarterly financial information are 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.
2.4 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 an 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, 2013.
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, 2013, available on the websites of CVM and Copel.
4 Cash and Cash Equivalents
Parent Company | Consolidated | |||
03.31.2014 | 12.31.2013 | 03.31.2014 | 12.31.2013 | |
Cash and bank accounts | 1,623 | 1,787 | 69,484 | 130,311 |
Financial investments w ith immediate liquidity | 24,212 | 8,623 | 1,315,208 | 1,611,321 |
25,835 | 10,410 | 1,384,692 | 1,741,632 |
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, inwhich 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.
13
5 Bonds and Securities
Level | Parent Com pany | Consolidated | ||||
Category | Note 34.1 | Index | 03.31.2014 | 12.31.2013 | 03.31.2014 | 12.31.2013 |
Securities available for sale | ||||||
LFT | 1 | Selic | - | - | 125,898 | 130,369 |
Committed Operation | 2 | Fixed rate | - | - | 41,544 | 26,995 |
CDB | 2 | CDI | 53 | 96 | 35,109 | 36,983 |
LTN | 1 | Fixed rate | - | - | 21,686 | 63,663 |
NTN - F | 1 | CDI | - | - | 1,942 | 1,990 |
Quotas in Funds | 1 | CDI | 92 | 90 | 92 | 90 |
145 | 186 | 226,271 | 260,090 | |||
Securities held for trading | ||||||
Quotas in FI | 1 | CDI | - | - | 57,981 | 93,529 |
LF | 2 | CDI | - | - | 13,727 | 13,375 |
LTN | 1 | Selic | - | - | 12,748 | 60,800 |
DPGE | 2 | CDI | - | - | 7,105 | 38,433 |
Debentures | 2 | CDI | - | - | 2,545 | 3,215 |
Committed Operation | 2 | Fixed rate | - | - | 132 | 24,164 |
LFT | 1 | Selic | - | - | - | 5,011 |
Derivatives | 1 | Future DI BMF | - | - | 18 | - |
- | - | 94,256 | 238,527 | |||
Securities held to m aturity | ||||||
LF Caixa - maturing in 11.12.2015 | CDI | - | - | 11,426 | 11,141 | |
- | - | 11,426 | 11,141 | |||
145 | 186 | 331,953 | 509,758 | |||
Current | 145 | 186 | 219,467 | 389,222 | ||
Noncurrent | - | - | 112,486 | 120,536 |
Copel and its subsidiaries hold bonds and securities with variable interest rates. The maturity of these securities varies between 1 and 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.
14
The main amounts invested include exclusive funds and guarantees deposits/investments:
Consolidated | 03.31.2014 | 12.31.2013 |
Exclusive funds | ||
Exclusive funds of Copel Geração e Trasmissão at Banco do Brasil | 61,321 | 99,843 |
Exclusive funds of Copel Distribuição at Banco do Brasil | 3 | 3 |
Exclusive funds of UEG Araucária at Banco do Brasil | 36,360 | 113,546 |
Exclusive funds of UEG Araucária at BNY Mellon Serviços Financeiros DTVM S.A. | 57,848 | 124,946 |
155,532 | 338,338 | |
Guarantee | ||
Guarantee for the ANEEL auction | - | 374 |
Guarantee for the Contracts for the Sale of Energy in the Regulated Environment CCEARS | 65,931 | 118,647 |
Collaterals for financing facilities to build hydroelectric pow er plantsHPPs and transmission lines - TLs | 25,874 | 16,452 |
Guarantee for the compliance w ith article 17 of law 11,428/2006 and possible authorization by Environmental Instituteof Paraná (Instituto Ambiental do Paraná or IAP), by the Consórcio Energético Cruzeiro do Sul | 34,673 | 33,849 |
126,478 | 169,322 |
6 Collaterals and Escrow Accounts
Consolidated | 03.31.2014 | 12.31.2013 | |
Collaterals and escrowaccounts - STN (6.1) | 43,829 | 45,371 | |
Collaterals and escrowaccounts - CCEAR | - | 1,068 | |
Other | 567 | 908 | |
44,396 | 47,347 | ||
Current | 567 | 1,976 | |
Noncurrent | 43,829 | 45,371 |
6.1 Collateral - National Treasury Department - 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 21.1). 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.
15
7 Trade Accounts Receivable
Consolidated | Balances | Overdue | Overdue for | Total | Total |
falling due | up to 90 days | more than 90 days | 03.31.2014 | 12.31.2013 | |
Customers | |||||
Residential | 154,663 | 99,837 | 35,432 | 289,932 | 262,180 |
Industrial | 127,663 | 24,601 | 17,819 | 170,083 | 170,320 |
Commercial | 113,391 | 43,425 | 16,006 | 172,822 | 152,308 |
Rural | 24,086 | 10,374 | 1,733 | 36,193 | 35,054 |
Public Entities | 19,939 | 18,226 | 40,391 | 78,556 | 68,962 |
Public lighting | 16,384 | 2,072 | 98 | 18,554 | 16,379 |
Public service | 15,202 | 16,384 | 282 | 31,868 | 29,528 |
Unbilled | 269,471 | - | - | 269,471 | 274,059 |
Energy installments plan | 69,473 | 6,391 | 32,201 | 108,065 | 99,655 |
Low income subsidy - Eletrobras | 10,735 | - | - | 10,735 | 25,415 |
State Government "Luz Fraterna" program | 81,863 | - | - | 81,863 | 78,987 |
Other receivables | 41,130 | 25,675 | 40,211 | 107,016 | 58,379 |
944,000 | 246,985 | 184,173 | 1,375,158 | 1,271,226 | |
Concessionaires and Perm ission holder | |||||
Energy supplies | |||||
CCEAR - auction | 78,761 | 411 | 5,474 | 84,646 | 106,060 |
Bilateral contracts | 97,241 | - | 25 | 97,266 | 79,031 |
CCEE (7.1) | 637,733 | - | 14 | 637,747 | 45,642 |
Reimbursement to generators | 104 | - | 1,256 | 1,360 | 1,256 |
813,839 | 411 | 6,769 | 821,019 | 231,989 | |
Charges from using transm ission grid | |||||
Transmission grid | 13,961 | 1,461 | 2,371 | 17,793 | 17,110 |
Basic netw ork and conection grid | 12,695 | 72 | 1,413 | 14,180 | 14,668 |
26,656 | 1,533 | 3,784 | 31,973 | 31,778 | |
Telecom munications | 7,162 | 7,390 | 27,438 | 41,990 | 40,279 |
Gas distribution | 27,242 | 2,917 | 222 | 30,381 | 32,496 |
Allow ance for doubtful accounts (7.2) | - | - | (148,044) | (148,044) | (137,454) |
1,818,899 | 259,236 | 74,342 | 2,152,477 | 1,470,314 | |
Current | 1,673,543 | 259,236 | 74,342 | 2,007,121 | 1,337,628 |
Noncurrent | 145,356 | - | - | 145,356 | 132,686 |
7.1 Electricity Trade Chamber – CCEE
R$ 119,067 of the February and March 2014 installment balance refers to Copel Geração e Transmissão and R$ 518,666 refers to UEG Araucária.
The financial settlement for February was suspended until CCEE's completion of the lending transactions on April 25, 2014. These installments were received on April 29, 2014, R$ 81,583 of which by Copel Geração e Transmissão and R$ 243,704 by UEG Araucária.
The remaining balance of the financial settlement for March was received on May 13, 2014.
16
7.2 Allowance for doubtful accounts
Consolidated | Balance as of | Additions / | Reversal | Balance as of |
January 1, 2014 | (reversals) | of write offs | March 31, 2014 | |
Customers, concessionariesand permission holder | ||||
Residential | 46,177 | 6,403 | (3,359) | 49,221 |
Industrial | 35,031 | 4,963 | 1,308 | 41,302 |
Commercial | 26,765 | 3,012 | (1,361) | 28,416 |
Rural | 6,407 | (5,284) | (91) | 1,032 |
Public Entities | 13,043 | 3,881 | (1) | 16,923 |
Public lighting | 81 | 1 | - | 82 |
Public service | 183 | 8 | 6 | 197 |
Concessionaries and permission hold | 6,513 | 445 | (105) | 6,853 |
Telecommunications | 3,254 | 764 | - | 4,018 |
137,454 | 14,193 | (3,603) | 148,044 |
8 CRC Transferred to the State Government of Paraná
8.1 Maturity of noncurrent installments
Consolidated | 03.31.2014 |
2015 | 70,793 |
2016 | 99,869 |
2017 | 106,510 |
2018 | 113,594 |
2019 | 121,148 |
After 2020 | 796,018 |
1,307,932 |
8.2 Changes in CRC
Parent Company and Consolidated | Current Assets | Noncurrent Assets | Total |
Balance as of January 1, 2014 | 85,448 | 1,295,106 | 1,380,554 |
Interest | 22,170 | - | 22,170 |
Monetary variations | 285 | 35,389 | 35,674 |
Transfers | 22,563 | (22,563) | - |
Amortizations | (43,019) | - | (43,019) |
Balance as of March 31, 2014 | 87,447 | 1,307,932 | 1,395,379 |
17
9 Accounts receivable related to the concession
9.1 Changes in accounts receivable related to the concession
Consolidated | Noncurrent assets | |||
Current | Special | |||
assets | Assets | liabilities(a) | Total | |
Balance as of January 1, 2014 | 4,396 | 5,577,735 | (2,093,467) | 3,488,664 |
Capitalization of intangible assets in progress | - | 137,896 | (24,548) | 113,348 |
Transfers from noncurrent to current | 7,844 | (7,844) | - | - |
Transfers to charges for use of main distributions and transmission grid - customers | (7,514) | - | - | (7,514) |
Transfer to property, plant and equipment | - | 31 | - | 31 |
Monetary variations | - | 103,125 | (49,755) | 53,370 |
Remuneration | - | 14,844 | - | 14,844 |
Construction income | - | 49,526 | - | 49,526 |
Write off | - | (9,252) | - | (9,252) |
Balance as of March 31, 2014 | 4,726 | 5,866,061 | (2,167,770) | 3,703,017 |
9.2 Commitments regarding transmission
Refers to commitments with suppliers of equipment and services related to the following projects:
Transmission Lines and Substations | Value |
Contract 010/10 - Transmission Line Araraquara 2 - Taubaté | 143,055 |
Contract 015/10 - Substation Cerquilho III | 43,182 |
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 |
10 Accounts receivable related to the concession extension
10.1 Changes in the accounts receivable related to the concession extension
Current | Noncurrent | ||
Consolidated | Assets | Assets | Total |
Balance as of January 1, 2014 | 352,161 | 365,645 | 717,806 |
Transfers from noncurrent to current | 88,040 | (88,040) | - |
Amortization | (106,717) | - | (106,717) |
Monetary variations | 11,477 | - | 11,477 |
Charges | 7,200 | - | 7,200 |
Balance as of March 31, 2014 | 352,161 | 277,605 | 629,766 |
18
11 Other Receivables
Consolidated | 03.31.2014 | 12.31.2013 | |
Transfer CDE and ACR Account (11.1) | 799,975 | 51,067 | |
Advance payments to suppliers (11.2) | 118,154 | 122,311 | |
Services in progress (11.3) | 102,240 | 94,000 | |
Advance for severance estate | 35,640 | 40,403 | |
Advance payments to employees | 33,523 | 27,831 | |
Partnership in consortiums | 25,642 | 25,540 | |
Decommissioning in progress | 10,926 | 10,980 | |
Other receivables | 57,751 | 53,193 | |
1,183,851 | 425,325 | ||
Current assets | 1,154,082 | 395,890 | |
Noncurrent assets | 29,769 | 29,435 |
11.1 Transfer CDE and ACR Account
The balance presented on March 31, 2014 consists of: i) funds from the Energy Development Account - CDE to be transferred to Eletrobrás to cover the discounts on the electricity rates charged from the users of public distribution services, in the amount of R$ 84,169, according to Authorizing Resolution 1.586 of August 13, 2013; and ii) funds from the regulated procurement environment account (ACR Account), ruled by Decree 8.221 of April 1, 2014, in the amount of R$ 715,806, of which R$ 682,687 is allocated to offset the costs incurred with involuntary exposure to the short-term market, and R$ 33,119 is related to the decision about the thermoelectric power plants linked to the electricity sales agreements entered into in the regulated environment - CCEAR-D.
Of the amounts accrued in ACR Account, which totaled R$ 715,806 as of March 31, 2014, R$ 447,306 was transferred on April 28, 2014, according to decision 1.256 of April 22, 2014, and the remaining balance was transferred on May 12, 2014, according to Decision 1.443, of May 9, 2014.
The balance as of December 31, 2013 consists of funds from the Energy Development Account - CDE to cover the discounts granted on electricity rates charged for public distribution services in the amount of R$ 21,042, according to Resolution 1.586 passed on August 13, 2013 and R$ 30,025 to offset costs resulting from exposure to the short-term market and the water risk. The balance was received on February 6, 2014 and regulated by Decree 7.945 of March 7, 2013.
11.2 Advance payments to suppliers
Refers to advances to suppliers provided on contractual clauses.
11.3 Service in progress
This item refers to services currently in progress within the Company, most of which are related to the Research and Development and Energy Efficiency programs, which upon conclusion are offset against the respective liability recorded for this purpose, in compliance with the applicable regulations.
19
12 Inventories
Consolidated | ||
Operation/Maintenance | 03.31.2014 | 12.31.2013 |
Copel Distribuição | 94,777 | 96,866 |
Copel Geração e Transmissão | 29,295 | 31,298 |
Copel Telecomunicações | 7,775 | 10,046 |
Compagás | 1,150 | 1,068 |
132,997 | 139,278 |
13 Income Tax, Social Contribution and Other Taxes
13.1 Income Tax (IR) and Social Contribution (CSLL)
. | Parent Company | Consolidated | ||
03.31.2014 | 12.31.2013 | 03.31.2014 | 12.31.2013 | |
Current assets | ||||
IR and CSLL paid in advance | 17,442 | 42,494 | 141,270 | 375,722 |
IR and CSLL to be offset against liability | (24) | - | (64,434) | (242,564) |
17,418 | 42,494 | 76,836 | 133,158 | |
Noncurrent assets | ||||
IR and CSLL paid in advance (a) | 171,178 | 169,717 | 184,887 | 197,659 |
171,178 | 169,717 | 184,887 | 197,659 | |
Current liabilities | ||||
IR and CSLL due | 2,023 | - | 265,122 | 540,184 |
IR and CSLL to be offset against asset | (24) | - | (64,434) | (242,564) |
1,999 | - | 200,688 | 297,620 |
a) This amount is related to withholding income tax asset on loans between related parties that were liquidated, which are classified as noncurrent assets considering it long-term nature.
20
13.2 Deferred Income Tax and Social Contribution
13.2.1 Changes in Deferred Income Tax and Social Contribution
Parent Company | Recognized | |||
in other | ||||
Balance as of | Recognized | comprehensive | Balance as of | |
January 1, 2014 | in income | income | March 31, 2014 | |
Noncurrent assets | ||||
Tax losses and negative tax basis | 913 | (883) | - | 30 |
Private pension and health plans | - | 25 | - | 25 |
Effects of applying CPC 33 - R1 | 738 | - | 4,906 | 5,644 |
Other temporary additions | - | |||
Provisions for legal claims | 94,467 | 126 | - | 94,593 |
Provision for profit sharing | 250 | 319 | - | 569 |
Allow ance for doubtful debts | 1,478 | - | - | 1,478 |
Amortization - concession | 18,342 | 64 | - | 18,406 |
Provision for financing | 4,085 | (160) | - | 3,925 |
Social security contributions | ||||
- injunction on judicial deposit | 14 | 93 | - | 107 |
Others | 595 | (381) | - | 214 |
120,882 | (797) | 4,906 | 124,991 | |
(-)Noncurrent liabilities | ||||
Effects from applying CPC 38 | ||||
- financial instruments | 4,380 | 269 | (9) | 4,640 |
Temporary exclusions | - | - | ||
Provisions for negative goodw ill | 25,297 | - | - | 25,297 |
29,677 | 269 | (9) | 29,937 | |
Net | 91,205 | (1,066) | 4,915 | 95,054 |
21
Consolidated | Recognized | |||
in other | ||||
Balance as of | Recognized | comprehensive | Balance as of | |
January 1, 2014 | in income | income | March 31, 2014 | |
Noncurrent assets | ||||
Tax losses and negative tax basis | 9,713 | (2,059) | - | 7,654 |
Private pension and health plans | 195,484 | 6,036 | - | 201,520 |
Effects from applying ICPC 01 | 69,582 | (4,792) | - | 64,790 |
Effects from applying CPC 33 - R1 | 132,523 | - | - | 132,523 |
Effects from applying CPC 38 | 579 | - | (304) | 275 |
Other temporary additions | ||||
Provisions for legal claims | 375,336 | 12,602 | - | 387,938 |
Voluntary termination Program/retirement | 1,316 | (1,054) | - | 262 |
Provision of Research and Development | 66,766 | 6,037 | - | 72,803 |
Allow ance for doubtful debts | 49,682 | 3,685 | - | 53,367 |
Amortization - concession | 36,686 | 64 | - | 36,750 |
Provision for investment losses | 355 | - | - | 355 |
Provision for tax losses | 14,940 | 75 | - | 15,015 |
Provision for impact of grid charges | 6,922 | - | - | 6,922 |
Provision for financing | 4,085 | (160) | - | 3,925 |
Provision for energy purchases | 105,107 | 3,634 | - | 108,741 |
Provision for profit sharing | 26,553 | 4,441 | - | 30,994 |
Social security contributions - injunction on judicial deposit | 23,256 | 1,770 | - | 25,026 |
Others | 6,053 | (2,348) | - | 3,705 |
1,124,938 | 27,931 | (304) | 1,152,565 | |
(-) Noncurrent liabilities | ||||
Effects from applying CPC 27 | 636,541 | (12,697) | - | 623,844 |
Effects from applying ICPC 01 | 115 | 7,362 | - | 7,477 |
Effects from applying CPC 38 | 7,276 | (71) | (9) | 7,196 |
Other temporary exclusions | ||||
Capitalization of financial charges | 5,357 | - | - | 5,357 |
Deferment of capital gains | 107,534 | (16,979) | - | 90,555 |
Provisions for negative goodw ill | 25,297 | - | - | 25,297 |
Gas supply | 1,790 | (448) | - | 1,342 |
Others | 8,116 | 199 | (945) | 7,370 |
792,026 | (22,634) | (954) | 768,438 | |
Net | 332,912 | 50,565 | 650 | 384,127 |
Assets presented in the Statement of Financial Position | 753,413 | 766,016 | ||
(-) Liabilities presented in the Statement of Financial Position | (420,501) | (381,889) | ||
Net | 332,912 | 384,127 |
13.2.2 Realization of deferred tax credits
Tax credits related to the pension and healthcare plans are realized according the movement of the related accrual based on the actuarial valuation conducted annually by an independent actuary. Deferred taxes on all other contingence provisions will be realized as judicial rulings are issued.
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13.3 Other recoverable taxes and other taxes due
. | Parent Company | Consolidated | ||
03.31.2014 | 12.31.2013 | 03.31.2014 | 12.31.2013 | |
Current assets | ||||
Recoverable ICMS (VAT) | - | - | 86,835 | 43,092 |
Recoverable PIS/Pasep and Cofins taxes | - | - | 82,231 | 61,093 |
PIS/Pasep and Cofins to be offset against liabilities | - | - | (32,121) | (35,596) |
Other recoverable taxes | - | - | 811 | 1,424 |
- | - | 137,756 | 70,013 | |
Noncurrent assets | ||||
Recoverable ICMS (VAT) | - | - | 73,010 | 72,347 |
PIS/Pasep and Cofins taxes | - | - | 51,750 | 51,653 |
Other recoverable taxes | - | 499 | 498 | |
- | - | 125,259 | 124,498 | |
Current liabilities | ||||
ICMS (VAT) payable | - | - | 186,544 | 184,369 |
PIS/Pasep and Cofins payable | - | 25,400 | 74,660 | 79,291 |
PIS/Pasep and Cofins to be offset against assets | - | - | (32,121) | (35,596) |
IRRF on JSCP | - | - | - | 39,440 |
Other taxes | 1 | 81 | 7,954 | 33,227 |
1 | 25,481 | 237,037 | 300,731 | |
Noncurrent liabilities | ||||
Social security contributions - injunction on judicial deposit | 314 | 40 | 73,615 | 68,402 |
314 | 40 | 73,615 | 68,402 |
13.4 Reconciliation of the provision for Income Tax (IRPJ) and Social Contribution (CSLL)
. | Parent Company | Consolidated | ||
03.31.2014 | 03.31.2013 | 03.31.2014 | 03.31.2013 | |
Incom e before IRPJ and CSLL | 539,656 | 399,371 | 815,556 | 591,966 |
IRPJ and CSLL (34%) | (183,483) | (135,786) | (277,289) | (201,268) |
Tax effects on: | ||||
Equity in income | 179,923 | 128,235 | 18,791 | 6,667 |
Dividends | 2 | 57 | 2 | 57 |
Finam | 443 | - | 443 | - |
Non deductible expenses | (4) | (5) | (2,033) | (1,320) |
Tax incentives | 14 | - | 17,027 | 2,919 |
Others | 16 | - | 10,553 | (365) |
Current IRPJ and CSLL | (2,023) | - | (283,071) | (262,667) |
Deferred IRPJ and CSLL | (1,066) | (7,499) | 50,565 | 69,357 |
Effective rate - % | 0.6% | 1.9% | 28.5% | 32.7% |
23
14 Judicial Deposits
. | Parent Company | Consolidated | ||
03.31.2014 | 12.31.2013 | 03.31.2014 | 12.31.2013 | |
Taxes claims | 272,933 | 271,827 | 424,574 | 417,570 |
Labor claims | - | - | 124,669 | 118,240 |
Civil | ||||
Suppliers | - | - | 95,558 | 95,558 |
Civil | 288 | 288 | 28,923 | 28,849 |
Easements | - | - | 7,925 | 8,106 |
Customers | - | - | 2,500 | 2,397 |
288 | 288 | 134,906 | 134,910 | |
Others | - | - | 4,505 | 4,505 |
273,221 | 272,115 | 688,654 | 675,225 |
15 Related parties
15.1 Receivable from related parties
. | Parent Company | Consolidated | ||
03.31.2014 | 12.31.2013 | 03.31.2014 | 12.31.2013 | |
Associate and Jointly-controlled com panies | ||||
Dividends and/or interests on ow n capital | ||||
Dona Francisca Energética | 85 | 85 | 85 | 85 |
Dominó Holdings | 11,839 | 6,311 | 11,839 | 6,311 |
Costa Oeste | - | - | 478 | 478 |
Marumbi | - | - | 403 | 403 |
Transmissora Sul Brasileira | - | - | 360 | 360 |
Caiuá | - | - | 88 | 88 |
Integração Maranhense | - | - | 227 | 227 |
Matrinchã | - | - | 840 | 840 |
Guaraciaba | - | - | 182 | 182 |
. | 11,924 | 6,396 | 14,502 | 8,974 |
Subsidiaries | ||||
Dividends and/or interests on ow n capital | ||||
Copel Geração e Transmissão | 29,697 | 321,902 | - | - |
Copel Telecomunicações | 14,604 | 21,585 | - | - |
Compagás | 2,239 | 2,239 | - | - |
Elejor | 21,366 | 28,718 | - | - |
Ventos de Santo Uriel | 5 | 5 | ||
67,911 | 374,449 | - | - | |
Financing tranferred - STN | ||||
Copel Distribuição (15.1.1) | 63,306 | 64,815 | - | - |
63,306 | 64,815 | - | - | |
Other investm ents | ||||
Dividends and/or interests on ow n capital | ||||
Other investments | 526 | 526 | 526 | 526 |
526 | 526 | 526 | 526 | |
143,667 | 446,186 | 15,028 | 9,500 | |
Current assets - Dividends receivable | 80,361 | 381,371 | 15,028 | 9,500 |
Noncurrent assets | 63,306 | 64,815 | - | - |
24
15.1.1 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 21.1).
15.2 Payable to related parties
On December 31, 2013 the CRC payable balance, R$ 1,380,554, was transferred from Copel Distribuição (consolidated entity) to Copel (parent Company), as approved by ANEEL, Order 4,222 dated December 12, 2013, as settlement of the loan of R$ 912,237 and transfer of the remaining financial balance payable of R$ 468,317.
The transfer financial balance was paid in three installments which have been paid on 05.12.2014.
16 Investments
16.1 Business Combinations
On March 11, 2014 the Company acquired from Galvão Participações S.A. 50.1% interest in Cutia Empreendimentos Eólicos SPE S.A., in which the Company used to have a 49.9% stake.
The acquisition of these wind farming companies fulfills Copel's strategic purpose of increasing its participation in the energy generation industry by adding renewable sources to its energy mix.
The wind farm projects were evaluated according to the market multiples method for investment purposes.
The following data shows the breakdown of the consideration paid in exchange for a controlling stake in Cutia:
Compensation | |
Advance for future investment (16.6.2) | 5,327 |
Accounts payable | 3,395 |
8,722 |
25
The amount classified as an authorization right was allocated to the group of Investments in the individual balance of the parent company and to the group of intangibles in the consolidated balance sheet. The authorization right will be amortized from the date the enterprise starts operations until its maturity, on January 5, 2032.
Percentage of | Percentage of | ||
share capital % | share capital % | ||
prior | acquired | ||
03.11.2014 | 49.9% | 50.1% | 100.0% |
Equity | 5,258 | 5,280 | 10,538 |
Investments/Afac | 536 | 539 | 1,075 |
Concession rights | 5,809 | 2,903 | 8,712 |
11,603 | 8,722 | 20,325 |
The initial interest held immediately before the acquisition date and the breakdown of the acquired assets and assumed liabilities, which correspond to their fair values, are shown below:
Percentage of | Percentage of | Percentage of | |
share capital % | share capital % | share capital % | |
prior | acquired | actual | |
03.11.2014 | 49.90% | 50.10% | 100% |
ASSETS | 5,794 | 5,820 | 11,614 |
Current assets | 113 | 113 | 226 |
Noncurrent assets | 5,681 | 5,707 | 11,388 |
LIABILITIES | 5,794 | 5,820 | 11,614 |
Current liabilities | - | 1 | 1 |
Noncurrent liabilities | 536 | 539 | 1,075 |
Investments/Afac | 536 | 539 | 1,075 |
Equity | 5,258 | 5,280 | 10,538 |
The operating expenses incurred by the acquired company as from the acquisition date, in the amount of R$ 208, were included in the consolidated statement of profit or loss of March 2014.
26
16.2 Changes in investments
Parent Company | Equity | Proposed | |||||||
Balance as of | valuation | Investiment / | Business | dividends | Balance as of | ||||
January 1, 2014 | Equity | adjustments | Afac | combinations | Amortization | and JCP | Other | March 31, 2014 | |
Subsidiaries (16.3) | |||||||||
Copel Geração e Transmissão | 6,796,817 | 431,555 | 4,310 | - | - | - | - | - | 7,232,682 |
Copel Distribuição | 3,366,685 | (14,575) | 4,947 | - | - | - | - | - | 3,357,057 |
Copel Telecomunicações | 352,939 | 14,306 | 855 | - | - | - | - | - | 368,100 |
Copel Renováveis | 407 | (974) | - | 567 | - | - | - | - | - |
Copel Participações | 407 | (771) | - | 774 | - | - | - | - | 410 |
UEG Araucária | 140,352 | 26,694 | - | - | - | - | - | - | 167,046 |
Compagás | 120,168 | 16,443 | - | - | - | - | - | - | 136,611 |
Elejor | 50,412 | 9,305 | (1,282) | - | - | - | - | - | 58,435 |
Elejor - concession rights | 16,779 | - | - | - | - | (188) | - | - | 16,591 |
Cutia | - | (208) | - | 68 | 11,613 | - | - | - | 11,473 |
Cutia - concession rights | - | - | - | - | 8,712 | - | - | - | 8,712 |
Nova Asa Branca I | 10,864 | 322 | - | - | - | - | - | - | 11,186 |
Nova Asa Branca I - concession rights | 51,659 | - | - | - | - | - | - | - | 51,659 |
Nova Asa Branca II | 13,505 | 403 | - | - | - | - | - | - | 13,908 |
Nova Asa Branca II - concession rights | 51,745 | - | - | - | - | - | - | - | 51,745 |
Nova Asa Branca III | 14,678 | (176) | - | - | - | - | - | - | 14,502 |
Nova Asa Branca III - concession rights | 49,948 | - | - | - | - | - | - | - | 49,948 |
Nova Eurus IV | 10,857 | 367 | - | - | - | - | - | - | 11,224 |
Nova Eurus IV - concession rights | 53,154 | - | - | - | - | - | - | - | 53,154 |
Santa Maria | 31,029 | 395 | - | - | - | - | - | - | 31,424 |
Santa Maria - concession rights | 26,813 | - | - | - | - | - | - | - | 26,813 |
Santa Helena | 36,126 | 397 | - | - | - | - | - | - | 36,523 |
Santa Helena - concession rights | 28,955 | - | - | - | - | - | - | - | 28,955 |
Ventos de Santo Uriel | 14,288 | 61 | - | - | - | - | - | - | 14,349 |
Ventos de S. Uriel - concession rights | 13,445 | - | - | - | - | - | - | - | 13,445 |
11,252,032 | 483,544 | 8,830 | 1,409 | 20,325 | (188) | - | - | 11,765,952 | |
Joint ventures (16.4) | |||||||||
Dominó Holdings | 456,703 | 33,195 | (365) | - | - | - | (5,528) | - | 484,005 |
Cutia | 5,625 | 24 | - | 145 | (5,794) | - | - | - | - |
Cutia - concession rights | 5,809 | - | - | - | (5,809) | - | - | - | - |
468,137 | 33,219 | (365) | 145 | (11,603) | - | (5,528) | - | 484,005 | |
Associates (16.5) | |||||||||
Dona Francisca Energética | 58,176 | 2,265 | - | - | - | - | - | - | 60,441 |
Foz do Chopim Energética | 15,788 | 2,801 | - | - | - | - | (2,682) | - | 15,907 |
Carbocampel | 1,407 | - | - | - | - | - | - | - | 1,407 |
Dois Saltos | 720 | - | - | - | - | - | - | - | 720 |
Copel Amec | 182 | 3 | - | - | - | - | - | - | 185 |
Escoelectric | - | 41 | - | 174 | - | - | - | - | 215 |
76,273 | 5,110 | - | 174 | - | - | (2,682) | - | 78,875 | |
Other investments | |||||||||
Finam | 1,323 | - | 189 | - | - | - | - | - | 1,512 |
Finor | 212 | - | 11 | - | - | - | - | - | 223 |
Investco S.A. | 9,210 | - | (89) | - | - | - | - | - | 9,121 |
Nova Holanda Agropecuária S.A. | 14,868 | - | - | - | - | - | - | - | 14,868 |
(-) provision for loss - Nova Holanda | (6,981) | - | - | - | - | - | - | 1,774(a) | (5,207) |
Advance w ith the purpose of futureinvestment (16.6) | 233,469 | - | - | 799 | (5,327) | - | - | (18,210)(b) | 210,731 |
Other investments | 7,076 | - | (139) | - | - | - | - | - | 6,937 |
259,177 | - | (28) | 799 | (5,327) | - | - | (16,436) | 238,185 | |
12,055,619 | 521,873 | 8,437 | 2,527 | 3,395 | (188) | (8,210) | (16,436) | 12,567,017 | |
(a) Reversal of provision for loss | |||||||||
(b) Transfers of intangible (18.2) |
27
Consolidated | Equity | Proposed | ||||||
Balance as of | valuation | Investiment / | Business | dividends | Balance as of | |||
January 1, 2014 | Equity | adjustments | Afac | combinations | and JCP | Other | March 31, 2014 | |
Joint ventures (16.4) | ||||||||
Dominó Holdings | 456,703 | 33,195 | (365) | - | - | (5,528) | - | 484,005 |
Cutia | 5,625 | 24 | - | 145 | (5,794) | - | - | - |
Costa Oeste | 18,700 | 1,691 | - | 2,550 | - | - | - | 22,941 |
Marumbi | 21,797 | 2,772 | - | 20,692 | - | - | - | 45,261 |
Transmissora Sul Brasileira | 63,797 | 788 | - | - | - | - | - | 64,585 |
Caiuá | 40,318 | 347 | - | 2,910 | - | - | - | 43,575 |
Integração Maranhense | 85,378 | 507 | - | 2,916 | - | - | - | 88,801 |
Matrinchã | 97,999 | 1,752 | - | - | - | - | - | 99,751 |
Guaraciaba | 38,828 | 1,167 | - | - | - | - | - | 39,995 |
Paranaíba | 17,850 | 603 | - | 12,985 | - | - | - | 31,438 |
846,995 | 42,846 | (365) | 42,198 | (5,794) | (5,528) | - | 920,352 | |
Associates (16.5) | ||||||||
Dona Francisca | 58,176 | 2,265 | - | - | - | - | - | 60,441 |
Foz do Chopim | 15,788 | 2,801 | - | - | - | (2,682) | - | 15,907 |
Carbocampel | 1,407 | - | - | - | - | - | - | 1,407 |
Dois Saltos | 720 | - | - | - | - | - | - | 720 |
Copel Amec | 182 | 3 | - | - | - | - | - | 185 |
Escoelectric | - | 41 | - | 174 | - | - | - | 215 |
76,273 | 5,110 | - | 174 | - | (2,682) | - | 78,875 | |
Other investments | ||||||||
Finam | 1,323 | - | 189 | - | - | - | - | 1,512 |
Finor | 212 | - | 11 | - | - | - | - | 223 |
Investco S.A. | 9,210 | - | (89) | - | - | - | - | 9,121 |
Nova Holanda Agropecuária S.A. | 14,868 | - | - | - | - | - | - | 14,868 |
(-) provision for loss - Nova Holand | (6,981) | - | - | - | - | - | 1,774(a) | (5,207) |
Assets for future use | 4,290 | - | - | - | - | - | - | 4,290 |
Advance w ith the purpose of futureinvestment (16.6) | 233,469 | - | - | 799 | (5,327) | - | (18,210)(b) | 210,731 |
Other investments | 8,268 | - | (139) | 3 | - | - | - | 8,132 |
264,659 | - | (28) | 802 | (5,327) | - | (16,436) | 243,670 | |
1,187,927 | 47,956 | (393) | 43,174 | (11,121) | (8,210) | (16,436) | 1,242,897 | |
(a) Reversal of provision for loss | ||||||||
(b) Transfers of intangible (18.2) |
16.3 Parent Company
Percentage of share capital | |||||
Subsidiaries | Headquarters | Main Activity | Copel | Noncontrolling | |
Copel | GeT | shareholders | |||
Copel Geração e Transmissão S.A. (Copel GeT) | Curitiba/PR | Production and transmission of electricity | 100.00 | - | - |
Copel Distribuição S.A. | Curitiba/PR | Distribution and marketing of electricity | 100.00 | - | - |
Copel Telecomunicações S.A. | Curitiba/PR | Telecommunication and communication services | 100.00 | - | - |
Copel Renováveis S.A. | Curitiba/PR | Production of electricity from w ind sources | 100.00 | - | - |
Copel Participações S.A. | Curitiba/PR | Holdings of non-financial institutions | 100.00 | - | - |
Nova Asa Branca I Energias Renováveis S.A. (a) | S. Miguel do Gostoso/RN | Productiona of electricity from w ind sources | 100.00 | - | - |
Nova Asa Branca II Energias Renováveis S.A. (a) | Parazinho/RN | Production of electricity from w ind sources | 100.00 | - | - |
Nova Asa Branca III Energias Renováveis S.A. (a) | Parazinho/RN | Production of electricity from w ind sources | 100.00 | - | - |
Nova Eurus IV Energias Renováveis S.A. (a) | Touros/RN | Production of electricity from w ind sources | 100.00 | - | - |
Santa Maria Energias Renováveis S.A. (a) | Maracanaú/CE | Production of electricity from w ind sources | 100.00 | - | - |
Santa Helena Energias Renováveis S.A. (a) | Maracanaú/CE | Production of electricity from w ind sources | 100.00 | - | - |
Ventos de Santo Uriel S.A. (a) | João Câmara/RN | Production of electricity from w ind sources | 100.00 | - | - |
Cutia Empreendimentos Eólicos SPE S.A. (a) (b) | São Paulo/SP | Production of electricity from w ind sources | 100.00 | - | - |
Companhia Paranaense de Gás - Compagás | Curitiba/PR | Distribution of pipeline gas | 51.00 | - | 49.00 |
Elejor - Centrais Elétricas do Rio Jordão S.A. | Curitiba/PR | Production of electricity | 70.00 | - | 30.00 |
UEG Araucária Ltda. | Curitiba/PR | Production of electricity from natural gas | 20.00 | 60.00 | 20.00 |
(a) Pre-operating stage | |||||
(b) from March 11, 2014 |
28
16.3.1 Summarized financial statements of subsidiaries with non-controlling interest
03.31.2014 | Compagás | Elejor | UEG Araucária |
ASSETS | 547,211 | 761,175 | 1,053,675 |
Current assets | 299,488 | 69,110 | 639,032 |
Noncurrent assets | 247,723 | 692,065 | 414,643 |
LIABILITIES | 547,211 | 761,175 | 1,053,675 |
Current liabilities | 244,711 | 136,932 | 218,446 |
Noncurrent liabilities | 34,632 | 540,761 | - |
Equity | 267,868 | 83,482 | 835,229 |
STATEMENT OF INCOME | |||
Operating revenues | 389,142 | 60,103 | 474,393 |
Operating costs and expenses | (340,718) | (13,771) | (316,356) |
Financial results | 637 | (26,198) | 2,588 |
Income tax and social contribution | (16,819) | (6,839) | (27,150) |
Net income for the period | 32,242 | 13,295 | 133,475 |
Total comprehensive income | 32,242 | 13,295 | 133,475 |
STATEMENTS OF CASH FLOWS | |||
Cash flow s from operational activities | 7,226 | 20,834 | (156,553) |
Cash flow s from investiment activities | (26,326) | 420 | 144,123 |
Cash flow s from financing activities | 29,374 | (20,652) | - |
TOTAL EFFECTS ON CASH AND CASH EQUIVALENTS | 10,274 | 602 | (12,430) |
Cash and cash equivalents at the beginning of the period | 34,427 | 47,584 | 21,843 |
Cash and cash equivalents at the end of the period | 44,701 | 48,186 | 9,413 |
CHANGE IN CASH AND CASH EQUIVALENTS | 10,274 | 602 | (12,430) |
16.4 Joint ventures
Jointly controlled | Headquarters | Main activity | Equity + Afac | Percentage of share capital % | Book value of share capital | |
Copel | Copel | |||||
Dominó Holdings S.A. | Curitiba/PR | Interest in sew age treatment company | 1,075,567 | 45.00 | - | 484,005 |
Costa Oeste Transmissora de Energia S.A. (a) | Curitiba/PR | Transmission of electricity | 44,982 | - | 51.00 | 22,941 |
Marumbi Transmissora de Energia S.A. (a) | Curitiba/PR | Transmission of electricity | 56,576 | - | 80.00 | 45,261 |
Transmissora Sul Brasileira de Energia S.A. (a) | Curitiba/PR | Transmission of electricity | 322,927 | - | 20.00 | 64,585 |
Caiuá Transmissora de Energia S.A. (a) | Curitiba/PR | Transmission of electricity | 88,929 | - | 49.00 | 43,575 |
Integração Maranhense Transmissora de Energia S.A. (a) | Rio de Janeiro/RJ | Transmission of electricity | 181,227 | - | 49.00 | 88,801 |
Matrinchã Transmissora de Energia (TP NORTE) S.A. (a) | Curitiba/PR | Transmission of electricity | 203,573 | - | 49.00 | 99,751 |
Guaraciaba Transmissora de Energia (TP SUL) S.A. (a) | Curitiba/PR | Transmission of electricity | 81,623 | - | 49.00 | 39,995 |
Paranaíba Transmissora de Energia S.A. (a) | Rio de Janeiro/RJ | Transmission of electricity | 128,320 | - | 24.50 | 31,438 |
Mata de Santa Genebra Transmissão S.A. (a) - 16.4.1 | Rio de Janeiro/RJ | Transmission of electricity | 1 | - | 50.10 | 1 |
(a) Pre-operating stage |
16.4.1 Mata de Santa Genebra Transmissão S.A.
The Company was set up on December 11, 2013. Furnas Centrais Elétricas S.A. has a 49.9% stake and Copel Geração e Transmissão S.A. has a 50.1% stake in it.
The purpose of the company is to implement and explore the enterprise consisting of electricity transmission facilities and other additional construction work, according to the Invitation to Bid at Auction 07/2013 held by Aneel (Brazilian Electricity Regulatory Agency), in the states of São Paulo and Paraná.
29
16.4.2 Main groups of assets, liabilities and results of joint ventures
03.31.2014 | Dominó (a) | Costa Oeste | Marumbi | Transmissora Sul Brasileira | Caiuá | Integração Maranhense | Matrinchã | Guaraciaba | Paranaíba | Mata de Santa Genebra |
ASSETS | 1,101,884 | 75,732 | 60,601 | 559,580 | 199,810 | 348,544 | 812,369 | 489,704 | 130,288 | 1 |
Current assets | 28,943 | 10,509 | 13,033 | 36,765 | 34,017 | 55,212 | 48,029 | 177,583 | 28,625 | 1 |
Cash and cash equivalents | 7,996 | 10,379 | 13,009 | 20,945 | 22,529 | 37,934 | 43,662 | 175,759 | 27,919 | 1 |
Other current assets | 20,947 | 130 | 24 | 15,820 | 11,488 | 17,278 | 4,367 | 1,824 | 706 | - |
Noncurrent assets | 1,072,941 | 65,223 | 47,568 | 522,815 | 165,793 | 293,332 | 764,340 | 312,121 | 101,663 | - |
. | ||||||||||
LIABILITIES | 1,101,884 | 75,732 | 60,601 | 559,580 | 199,810 | 348,544 | 812,369 | 489,704 | 130,288 | 1 |
Current liabilities | 26,317 | 10,066 | 2,550 | 38,398 | 21,793 | 18,949 | 594,029 | 403,088 | 1,790 | - |
Financial liabilities | - | - | - | 8,703 | 6,556 | 11,794 | 581,570 | 398,483 | - | - |
Other current liabilities | 26,317 | 10,066 | 2,550 | 29,695 | 15,237 | 7,155 | 12,459 | 4,605 | 1,790 | - |
Noncurrent liabilities | - | 56,508 | 49,862 | 306,255 | 95,028 | 202,072 | 14,767 | 4,993 | 178 | - |
Financial liabilities | - | - | - | 192,938 | 73,209 | 119,865 | - | - | - | - |
Advance for future capital increase | - | 35,824 | 48,387 | 108,000 | 5,940 | 53,704 | - | - | - | - |
Other noncurrent liabilities | - | 20,684 | 1,475 | 5,317 | 15,879 | 28,503 | 14,767 | 4,993 | 178 | - |
Equity | 1,075,567 | 9,158 | 8,189 | 214,927 | 82,989 | 127,523 | 203,573 | 81,623 | 128,320 | 1 |
. | ||||||||||
STATEMENT OF INCOME | ||||||||||
Net operating income | - | 18,654 | 16,327 | 42,576 | 38,018 | 32,832 | 203,394 | 106,834 | 45,718 | - |
Operating costs and expenses | (395) | (14,897) | (12,497) | (34,424) | (35,825) | (29,282) | (217,143) | (112,178) | (46,292) | - |
Financial results | 292 | 102 | 162 | (3,900) | (1,090) | (1,830) | 17,324 | 7,725 | 3,036 | - |
Equity in income of subsidiaries | 36,451 | - | - | - | - | - | - | - | - | - |
Income tax and social contribution | - | (545) | (527) | (304) | (394) | (685) | - | - | - | - |
Profit (loss) for the year | 36,348 | 3,314 | 3,465 | 3,948 | 709 | 1,035 | 3,575 | 2,381 | 2,462 | - |
Other comprehensive income | - | - | - | - | - | - | - | - | - | - |
Total comprehensive income for the period | 36,348 | 3,314 | 3,465 | 3,948 | 709 | 1,035 | 3,575 | 2,381 | 2,462 | - |
(a) Balances adjusted to accounting practices |
16.5 Associates
03.31.2014 | Headquarters | Main activity | Equity + Afac | Percentage of share capital | Book value of share capital |
Dona Francisca Energética S.A. | Agudo/RS | Electric Power | 262,443 | 23.03 | 60,441 |
Foz do Chopim Energética Ltda. | Curitiba/PR | Electric Power | 44,469 | 35.77 | 15,907 |
Carbocampel S.A. | Figueira/PR | Coal exploration | 2,871 | 49.00 | 1,407 |
Dois Saltos Empreendimentos deGeração de Energia Elétrica Ltda. (a) | Curitiba/PR | Electric Power | 2,400 | 30.00 | 720 |
Copel Amec S/C Ltda.- em liquidação | Curitiba/PR | Services | 385 | 48.00 | 185 |
Escoelectric Ltda. | Curitiba/PR | Services | 538 | 40.00 | 215 |
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 |
30
16.5.1 Main groups of assets, liabilities and results of associates
03.31.2014 | Foz do Chopim | Dona Francisca (a) |
ASSETS | 46,519 | 286,465 |
Current assets | 6,715 | 102,251 |
Noncurrent assets | 39,804 | 184,214 |
LIABILITIES | 46,519 | 286,465 |
Current liabilities | 2,050 | 20,854 |
Noncurrent liabilities | - | 3,168 |
Equity | 44,469 | 262,443 |
STATEMENT OF INCOME | ||
Net operating income | 10,214 | 26,808 |
Operating costs and expenses | (2,100) | (14,001) |
Financial income (expense) | 57 | 2,085 |
Income tax and social contribution | (340) | (5,057) |
Profit (loss) for the perios | 7,831 | 9,835 |
Other comprehensive income | - | - |
Total comprehensive income for the period | 7,831 | 9,835 |
(a) Balances adjusted to accounting practices |
16.6 Advance for future investment
16.6.1 São Bento Energia, Investimentos e Participações S.A
In November 2011, the contract for purchase and sale of 49.9% of the representative shares of São Bento Energia, Investimentos e Participações S.A, which controls GE Olho D’Água S.A, GE Boa Vista S.A, GE Farol S.A and GE São Bento do Norte S.A, which holds the concession rights of Centrais Geradoras Eólicas Olho D’Água, Boa Vista, Farol and São Bento do Norte, respectively, was signed. The contract will only be effective after approvals by ANEEL, by the Economic Defense Administrative Council – CADE and by the National Socio-Economic Development Bank – BNDES, which is the bank financing the funds necessary for the investment, construction and operation of the abovementioned wind power generation enterprises held by the subsidiaries.
If the purchase is not completed, the seller is obliged to return the funds provided, which amount to R$ 77,886, adjusted by the variation of the National Prices Index – IGPM. The approvals by ANEEL and Cade were obtained, awaiting the completion of the procedure with BNDES.
In December 2013, the agreement of sale and purchase of 50.1% of the remaining shares of São Bento Energia, in the amount of R$ 109,500, was signed. Until March 31, 2014, R$ 112,056 had been paid referring to the adjusted value of the price negotiated and R$ 20,789 referring to reimbursement of the balance of cash acquired, as stipulated in the contract.
The contract can be terminated if the approvals from ANEEL, CADE and BNDES are not obtained, where seller is obliged to return the amounts contributed, adjusted by the variance of the Broad Consumer Prices Index - IPCA. Approvals by ANEEL and CADE have been obtained, pending the consent from BNDES.
31
16.6.2 Cutia Empreendimentos Eólicos SPE S.A. and other projects
Copel and Galvão Participações S.A. signed the purchase and sale agreement in December 2013 for 50.1% of the shares in the joint venture Cutia Empreendimentos Eólicos SPE S.A., and all of the 8 wind farms and complexes, all exclusively owned by the seller, for the amount of R$ 38,000.
On March 11, 2014 Cutia was bought, and the amount contributed to this enterprise until that date, of R$ 5,327, was paid as consideration for the business combination (NE 16.1).
On March 11, 2014 the sale of the other projects that were accounted for in the group of the Company's intangible assets in progress was also made. The amount contributed until that date, of R$ 18,210, was paid as consideration for the transaction.
17 Property, Plant and Equipment
17.1 PP&E by company
Consolidated | Accumulated | Accumulated | ||||
Cost | depreciation | 03.31.2014 | Cost | depreciation | 12.31.2013 | |
In service | ||||||
Copel | 6 | - | 6 | 5 | - | 5 |
Copel Geração e Transmissão | 12,485,580 | (7,442,415) | 5,043,165 | 12,483,418 | (7,370,317) | 5,113,101 |
Copel Telecomunicações | 507,710 | (317,797) | 189,913 | 504,115 | (312,251) | 191,864 |
Elejor | 594,969 | (145,167) | 449,802 | 594,856 | (140,657) | 454,199 |
UEG Araucária | 686,029 | (272,178) | 413,851 | 685,801 | (263,587) | 422,214 |
Cutia | 19 | (16) | 3 | - | - | - |
14,274,313 | (8,177,573) | 6,096,740 | 14,268,195 | (8,086,812) | 6,181,383 | |
In progress | ||||||
Copel | 27 | - | 27 | 24 | - | 24 |
Copel Geração e Transmissão | 1,572,232 | - | 1,572,232 | 1,475,079 | - | 1,475,079 |
Copel Telecomunicações | 189,395 | - | 189,395 | 174,113 | - | 174,113 |
Elejor | 13,411 | - | 13,411 | 13,292 | - | 13,292 |
UEG Araucária | 404 | - | 404 | 478 | - | 478 |
Nova Asa Branca I | 23,224 | - | 23,224 | 14,184 | - | 14,184 |
Nova Asa Branca II | 21,442 | - | 21,442 | 12,135 | - | 12,135 |
Nova Asa Branca III | 53,600 | - | 53,600 | 13,124 | - | 13,124 |
Nova Eurus IV | 18,848 | - | 18,848 | 12,496 | - | 12,496 |
Santa Maria | 36,303 | - | 36,303 | 36,013 | - | 36,013 |
Santa Helena | 47,511 | - | 47,511 | 39,432 | - | 39,432 |
Ventos de Santo Uriel | 16,438 | - | 16,438 | 11,894 | - | 11,894 |
1,992,835 | - | 1,992,835 | 1,802,264 | - | 1,802,264 | |
Special liabilities | ||||||
Copel Geração e Transmissão | (15) | - | (15) | (15) | - | (15) |
(15) | - | (15) | (15) | - | (15) | |
16,267,133 | (8,177,573) | 8,089,560 | 16,070,444 | (8,086,812) | 7,983,632 |
32
17.2 Asset by type of account – in service and in progress
Consolidated | Accumulated | Accumulated | ||||
Cost | depreciation | 03.31.2014 | Cost | depreciation | 12.31.2013 | |
In service | ||||||
Reservoirs, dams and aqueducts | 7,618,902 | (4,530,618) | 3,088,284 | 7,618,902 | (4,493,402) | 3,125,500 |
Machinery and equipment | 4,798,898 | (2,594,345) | 2,204,553 | 4,793,335 | (2,551,632) | 2,241,703 |
Buildings | 1,519,715 | (1,005,606) | 514,109 | 1,519,516 | (997,021) | 522,495 |
Land | 263,620 | (3,164) | 260,456 | 263,620 | (2,481) | 261,139 |
Vehicles | 61,060 | (35,354) | 25,706 | 60,833 | (33,884) | 26,949 |
Furniture and tools | 12,118 | (8,486) | 3,632 | 11,989 | (8,392) | 3,597 |
14,274,313 | (8,177,573) | 6,096,740 | 14,268,195 | (8,086,812) | 6,181,383 | |
In progress | 1,992,835 | - | 1,992,835 | 1,802,264 | - | 1,802,264 |
Special liabilities | (15) | - | (15) | (15) | - | (15) |
16,267,133 | (8,177,573) | 8,089,560 | 16,070,444 | (8,086,812) | 7,983,632 |
17.3 Changes in Property, Plant and Equipment
Consolidated | In service | In progress | Total |
Balance as of January 1, 2014 | 6,181,383 | 1,802,249 | 7,983,632 |
1st consolidation effect - subsidiaries (Note 16.1) | 3 | - | 3 |
Investment program paid | - | 182,806 | 182,806 |
Provision for contingences | - | 10,596 | 10,596 |
Financial charges transferred to w orks cost | - | 4,118 | 4,118 |
Fixed assets for projects | 6,940 | (6,940) | - |
Transfers of accounts receivable related to the concession | (31) | - | (31) |
Depreciation quotas to profit and loss | (91,252) | - | (91,252) |
Depreciation quotas - Pasep/Cofins credits | (209) | - | (209) |
Write off | (94) | (9) | (103) |
Balance as of March 31, 2014 | 6,096,740 | 1,992,820 | 8,089,560 |
17.4 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 21.5.
33
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$ 129.58/MWh as of December 31, 2013. A total of 125 averages MW were sold, for supply starting in January 2015 for 30 years. 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 March 31, 2014 totaled R$1,441,973.
Total commitments already assumed with suppliers of equipment and services in connection with the ColíderHydroelectric Power Plant amounted to R$211,378as of March 31, 2014.
17.5 Consórcio Tapajós
Copel Geração e Transmissão has signed a Technical Cooperation Agreement with eight other companies of the sector to conduct studies on the Tapajós and Jamanxim Rivers, in the North Region of Brazil, comprising an integrated environmental assessment of the Tapajós River Basin and viability and environmental studies of five hydroelectric projects, totaling 10,682 MW of installed capacity.
The power stations that are currently under study are Jatobá, with 2,338 MW, and São Luiz do Tapajós, the larger station, with 6,133 MW, both on the Tapajós River. In the future the Cachoeira do Caí (802 MW), Cachoeira dos Patos (528 MW) and Jamanxim (881 MW) power stations on the Jamanxim River will be studied.
The expenditures on this project on March 31, 2014 totaled R$ 11,276.
17.6 Consórcio Empreendedor Baixo Iguaçu
On August 27, 2013 Copel Geração e Transmissão entered into a consortium with Geração Céu Azul S.A., withownership percentage of 30% and 70%, respectively, 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 UPP Governador José Richa and the Iguaçu National Park, in Paraná State, which runs on 3 Kaplan turbines. This consortium was named "Consórcio Empreendedor Baixo Iguaçu" - CEBI.
The Consortium Member Agreement stipulated that Copel Geração e Transmissão will carry out the Proprietary Engineering services for CEBI, the value of this activity was set at R$ 15,392, which will be considered as a contribution from Copel Geração e Transmissão to the consortium.
As of March 31, 2014 the expenses incurred on this venture amounted to R$ 651.
34
18 Intangible Asset
Consolidated | Concession | Concession | Right to use | |||||
and autorization rights | contracts | software | ||||||
accumulated | accumulated | accumulated | ||||||
cost | amortization(a) | cost | amortization(a) | cost | amortization(b) | Other | 03.31.2014 | |
In service | ||||||||
Assets with finite useful life | ||||||||
Copel Geração e Transmissão | - | - | 16,779 | (1,012) | 17,734 | (6,761) | 43 | 26,783 |
Copel Distribuição | - | - | 3,642,089 | (3,310,355) | - | - | - | 331,734 |
Copel Distribuição-obrig. especiais | - | - | (327,359) | 268,379 | - | - | - | (58,980) |
Copel Telecomunicações | - | - | - | - | 22,650 | (10,242) | - | 12,408 |
Compagás | - | - | 245,322 | (105,835) | 5,221 | (3,426) | - | 141,282 |
Elejor | - | - | 263,920 | (71,336) | - | - | 3,509 | 196,093 |
UEG Araucária | - | - | - | - | 380 | (221) | - | 159 |
Concession Right - Elejor | 22,626 | (6,035) | - | - | - | - | - | 16,591 |
Autorization Right - Cutia (18.1) | 8,712 | - | - | - | - | - | - | 8,712 |
Autorization Right - Nova Asa I | 51,659 | - | - | - | - | - | - | 51,659 |
Autorization Right - Nova Asa II | 51,745 | - | - | - | - | - | - | 51,745 |
Autorization Right - Nova Asa III | 49,948 | - | - | - | - | - | - | 49,948 |
Autorization Right - Nova Eurus IV | 53,154 | - | - | - | - | - | - | 53,154 |
Autorization Right - S. Maria | 26,813 | - | - | - | - | - | - | 26,813 |
Autorization Right - S. Helena | 28,955 | - | - | - | - | - | - | 28,955 |
Autorization Right - Ventos S. Uriel | 13,445 | - | - | - | - | - | - | 13,445 |
307,057 | (6,035) | 3,840,751 | (3,220,159) | 45,985 | (20,650) | 3,552 | 950,501 | |
Assets with indefinite useful life | ||||||||
Compagás | - | - | - | - | - | - | 21 | 21 |
- | - | - | - | - | - | 21 | 21 | |
307,057 | (6,035) | 3,840,751 | (3,220,159) | 45,985 | (20,650) | 3,573 | 950,522 | |
In progress | ||||||||
Copel | - | - | - | - | - | - | 908 | 908 |
Copel (c) | - | - | - | - | - | - | 29,815 | 29,815 |
Copel Geração e Transmissão | - | - | 17,914 | - | 2,202 | - | 2,708 | 22,824 |
Copel Distribuição | - | - | 1,173,759 | - | - | - | - | 1,173,759 |
Copel Distribuição-obrig. especiais | - | (153,951) | - | - | - | - | (153,951) | |
Copel Telecomunicações | - | - | - | - | 1,959 | - | 85 | 2,044 |
Compagás | - | - | 91,301 | - | - | - | - | 91,301 |
Cutia (c) | - | - | - | - | - | - | 11,417 | 11,417 |
Nova Asa Branca I | - | - | - | - | - | - | 44 | 44 |
Nova Asa Branca II | - | - | - | - | - | - | 46 | 46 |
Nova Asa Branca III | - | - | - | - | - | - | 211 | 211 |
Nova Eurus IV | - | - | - | - | - | - | 42 | 42 |
Santa Maria | - | - | - | - | - | - | 443 | 443 |
Santa Helena | - | - | - | - | - | - | 42 | 42 |
Ventos de Santo Uriel | - | - | - | - | - | - | 52 | 52 |
- | - | 1,129,023 | - | 4,161 | - | 45,813 | 1,178,997 | |
2,129,519 | ||||||||
(a) Amortization over the concession period (b) Annual amortization rate: 20% (c) Refers to projects of w ind sources | ||||||||
35
Consolidated | Concession | Concession | Right to use | |||||
and autorization rights | contracts | software | ||||||
accumulated | accumulated | accumulated | ||||||
cost | amortization(a) | cost | amortization(a) | cost | amortization(a) | Other | 12.31.2013 | |
In service | ||||||||
Assets with finite useful life | ||||||||
Copel Geração e Transmissão | - | - | 15,884 | (732) | 17,734 | (6,108) | 43 | 26,821 |
Copel Distribuição | - | - | 3,664,119 | (3,269,508) | - | - | - | 394,611 |
Copel Distribuição-obrig. especiais | - | - | (326,007) | 256,417 | - | - | - | (69,590) |
Copel Telecomunicações | - | - | - | - | 22,386 | (9,280) | - | 13,106 |
Compagás | - | - | 239,239 | (101,937) | 5,221 | (3,296) | - | 139,227 |
Elejor | - | - | 263,920 | (69,141) | - | - | 6,286 | 201,065 |
UEG Araucária | - | - | - | - | 373 | (206) | - | 167 |
Concession Right - Elejor | 22,626 | (5,847) | - | - | - | - | - | 16,779 |
Autorization Right - Cutia (18.1) | 5,809 | - | - | - | - | - | - | 5,809 |
Autorization Right - Nova Asa I | 51,659 | - | - | - | - | - | - | 51,659 |
Autorization Right - Nova Asa II | 51,745 | - | - | - | - | - | - | 51,745 |
Autorization Right - Nova Asa III | 49,948 | - | - | - | - | - | - | 49,948 |
Autorization Right - Nova Eurus IV | 53,154 | - | - | - | - | - | - | 53,154 |
Autorization Right - S. Maria | 26,813 | - | - | - | - | - | - | 26,813 |
Autorization Right - S. Helena | 28,955 | - | - | - | - | - | - | 28,955 |
Autorization Right - Ventos S. Uriel | 13,445 | - | - | - | - | - | - | 13,445 |
304,154 | (5,847) | 3,857,155 | (3,184,901) | 45,714 | (18,890) | 6,329 | 1,003,714 | |
Assets with indefinite useful life | ||||||||
Compagás | - | - | - | - | - | - | 21 | 21 |
- | - | - | - | - | - | 21 | 21 | |
304,154 | (5,847) | 3,857,155 | (3,184,901) | 45,714 | (18,890) | 6,350 | 1,003,735 | |
In progress | ||||||||
Copel Geração e Transmissão | - | - | 17,209 | - | 1,940 | - | 2,531 | 21,680 |
Copel Distribuição | - | - | 1,091,217 | - | - | - | - | 1,091,217 |
Copel Distribuição-obrig. especiais | - | (154,965) | - | - | - | - | (154,965) | |
Copel Telecomunicações | - | - | - | - | 2,032 | - | 85 | 2,117 |
Compagás | - | - | 70,716 | - | - | - | - | 70,716 |
Nova Asa Branca I | - | - | - | - | - | - | 44 | 44 |
Nova Asa Branca II | - | - | - | - | - | - | 44 | 44 |
Nova Asa Branca III | - | - | - | - | - | - | 190 | 190 |
Nova Eurus IV | - | - | - | - | - | - | 42 | 42 |
Santa Maria | - | - | - | - | - | - | 447 | 447 |
Santa Helena | - | - | - | - | - | - | 42 | 42 |
Ventos de Santo Uriel | - | - | - | - | - | - | 52 | 52 |
- | - | 1,024,177 | - | 3,972 | - | 3,477 | 1,031,626 | |
2,035,361 |
18.1 Changes in intangible assets
The acquisition in 2011 of 49.9% of Cutia's shares generated an authorization right of R$ 5,809 and the acquisition of 50.1% of the shares (in 2014, note 16.1) generated an authorization right of R$ 2,903, totaling R$ 8,712, which will be amortized during the authorization period from the date the enterprise starts its business operations, which is expected for January 1, 2015, according to Aneel's authorizing resolutions. The wind farms are authorized for 30 years, as from the date that the authorizing resolutions were published on the Federal Register, on January 5, 2012.
36
18.2 Changes in intangible assets
Concession contracts | Concession | Other | ||||||
In | In | Special Liabilities | and autorization | In | In | |||
service | progress | In service | progress | rights | service | progress | Consolidated | |
Balance as of January 1, 2014 | 741,844 | 1,179,142 | (69,590) | (154,965) | 298,307 | 33,174 | 7,449 | 2,035,361 |
1st consolidation effect - subsidiaries (Note 16.1) | - | - | - | - | - | - | 11,385 | 11,385 |
Investment program | - | 255,271 | - | - | 2,903 | - | 12,369 | 270,543 |
Customers' financial participation | - | - | - | (24,886) | - | - | - | (24,886) |
Aneel concession - use of public assets | - | 1,600 | - | - | - | - | - | 1,600 |
Transfer to investments (16.2) | - | - | - | - | - | - | 18,210 | 18,210 |
Transfers to accounts receivable related tothe concession (9.1) | - | (137,896) | - | 24,548 | - | - | - | (113,348) |
Transfers to intangible assets in service | 14,922 | (14,922) | (1,352) | 1,352 | - | (561) | 561 | - |
Amortization of quotas - concession and autorization | (72,126) | - | 11,355 | - | (188) | (1,761) | - | (62,720) |
Amortization of quotas - Pasep/Cofins credits | (3,516) | - | 607 | - | - | - | - | (2,909) |
Write off | (1,552) | (221) | - | - | - | - | - | (1,773) |
Adjustments to financial assets classified as available for sale | - | - | - | - | - | (1,944) | - | (1,944) |
Balance as of March 31, 2014 | 679,572 | 1,282,974 | (58,980) | (153,951) | 301,022 | 28,908 | 49,974 | 2,129,519 |
19 Payroll, Social Charges and Accruals
Consolidated | 03.31.2014 | 12.31.2013 |
Social security liabilities | ||
Taxes and social contribution | 26,000 | 39,115 |
Social security charges on paid vacation and 13th salary | 27,659 | 30,008 |
53,659 | 69,123 | |
Labor liabilities | ||
Payroll, net | 2,292 | 2,524 |
Vacation | 80,945 | 84,071 |
Profit sharing | 80,048 | 80,048 |
Profit sharing for the period | 13,659 | - |
Voluntary redundancy | 3,079 | 3,871 |
Assignments to third parties | 57 | 48 |
180,080 | 170,562 | |
233,739 | 239,685 |
20 Suppliers
Consolidated | 03.31.2014 | 12.31.2013 | |
Energy supplies (20.1) | 1,219,876 | 581,968 | |
Materials and supplies | 421,681 | 373,195 | |
Charges for use of grid system | 56,500 | 72,151 | |
Natural gas for resale | 214,170 | 51,502 | |
Natural gas and supplies for the gas business - renegotiation Petrobras | 48,813 | 63,544 | |
1,961,040 | 1,142,360 | ||
Current | 1,916,136 | 1,092,239 | |
Noncurrent | 44,904 | 50,121 |
20.1 Energy supplies
From balance presented on Marc 31, 2014, the amount of R$ 781,965 refers to the provision of power purchase in. Of this amount, R$ 502,065 was paid on April 28,2014.
37
20.2 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 | Energy purchased | Auction | Average purchase |
period | (annual average MW) | date | price (R$/MWh) | |
Auction of power from existing facilities | ||||
1st Auction - Product 2007 | 2007 to 2014 | 37.49 | 12.07.2004 | 75.46 |
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 |
5th Auction - Product 2007 | 2007 to 2014 | 53.96 | 12.14.2006 | 104.74 |
8th Auction- Product 2010 Q5 | 2010 to 2014 | 0.01 | 11.30.2009 | 99.14 |
8th Auction- Product 2010 D5 | 2010 to 2014 | 0.012 | 11.30.2009 | 80.00 |
10th Auction- Product 2012 Q3 | 2012 to 2014 | 15.598 | 11.30.2011 | 79.99 |
12th Auction-Product 2014 12M | 2014 to 2014 | 328.906 | 12.17.2013 | 191.41 |
12th Auction-Product 2014 18M | 01/2014 to 06/2015 | 19.488 | 12.17.2013 | 165.20 |
12th Auction-Product 2014 36M | 2014 to 2016 | 162.862 | 12.17.2013 | 149.99 |
715.39 | ||||
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 | 25.10 | 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 | 40.88 | 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 |
3th Auction- Product 2011 Hidro | 2011 to 2040 | 57.66 | 10.10.2006 | 120.86 |
3th 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 |
624.96 | ||||
Structuring projects auction | ||||
Santo Antonio | 2012 to 2041 | 97.10 | 12.10.2007 | 78.87 |
Jirau | 2013 to 2042 | 210.42 | 05.19.2008 | 71.37 |
307.52 |
38
21 Loans and Financing
Consolidated | Current liabilities | Noncurrent liabilities | ||||
Principal | Charges | 03.31.2014 | 12.31.2013 | 03.31.2014 | 12.31.2013 | |
Foreign currency | ||||||
STN (21.1) | 1,516 | 1,258 | 2,774 | 2,154 | 60,532 | 62,661 |
Eletrobrás | 7 | - | 7 | 7 | - | - |
1,523 | 1,258 | 2,781 | 2,161 | 60,532 | 62,661 | |
Local currency | ||||||
Banco do Brasil (21.2) | 384,534 | 52,181 | 436,715 | 716,067 | 1,129,680 | 886,893 |
Eletrobrás (21.3) | 49,474 | 6 | 49,480 | 49,329 | 118,311 | 130,427 |
Finep (21.4) | 6,929 | 67 | 6,996 | 6,935 | 31,604 | 33,622 |
BNDES (21.5) | 19,604 | 12,103 | 31,707 | 20,776 | 1,099,310 | 1,104,333 |
Banco do Brasil | ||||||
Transfer BNDES (21.6) | 11,369 | 452 | 11,821 | 11,838 | 145,900 | 148,742 |
Banco do Brasil (21.7) | 150,000 | 4,118 | 154,118 | 150,000 | - | - |
621,910 | 68,927 | 690,837 | 954,945 | 2,524,805 | 2,304,017 | |
623,433 | 70,185 | 693,618 | 957,106 | 2,585,337 | 2,366,678 | |
Parent Company | Current liabilities | Noncurrent liabilities | ||||
Principal | Charges | 03.31.2014 | 12.31.2013 | 03.31.2014 | 12.31.2013 | |
Foreign currency | ||||||
STN (21.1) | 1,516 | 1,258 | 2,774 | 2,154 | 60,532 | 62,661 |
Local currency | ||||||
Banco do Brasil (21.2) | 268,919 | 8,899 | 277,818 | 560,647 | 623,751 | 394,091 |
270,435 | 10,157 | 280,592 | 562,801 | 684,283 | 456,752 |
21.1 Department of the National Treasury - STN
Number of | Final | Annual rate p.y. | Consolidated | ||||
Typeof bonus | installment | maturity | Amortization | (interest + com mission) | Principal | 03.31.2014 | 12.31.2013 |
Capitalization Bond | 21 | 04.10.2014 | Semi Annual | 8.0% + 0.20% | 12,225 | 1,572 | 1,595 |
Par Bond | 1 | 04.11.2024 | Single installment | 8.0% + 0.20% | 17,315 | 25,067 | 37,385 |
Discount Bond | 1 | 04.11.2024 | Single installment | Libor Semi Annual+0.8125%+0.20% | 12,082 | 36,667 | 25,835 |
63,306 | 64,815 | ||||||
Current | 2,774 | 2,154 | |||||
Noncurrent | 60,532 | 62,661 | |||||
Company:Copel | |||||||
Issue Date:05.20.1998 |
Collateral:
Company s centralized revenues account. For the Discount and Par Bonds, there are collateral deposits of R$ 18,765 and R$ 25,764 as of March 31, 2014 (R$ 18,700 and R$ 26,671 as of December 31, 2013), respectively (Note 6.1).
Note:
The restructuring of medium and long-term debt in connection w ith the financing received under Law nº 4,131/62.
39
21.2 Banco do Brasil S.A.
Issue | Number of | Final | Annual rate p.y. | Consolidated | |||
Contracts | Date | installment | maturity | (interest + commission) | Principal | 03.31.2014 | 12.31.2013 |
Law 8.727/93 (a) | 03.30.1994 | 240 | 03.01.2014 | TJLP and IGP-M + 5.098% | 28,178 | - | 66 |
21/02155-4 (b) | 09.10.2010 | 3 | 08.15.2015 | 98.5% of average rate of CDI | 350,000 | 319,042 | 311,286 |
21/02248-8 (c) | 06.22.2011 | 1 | 06.01.2015 | 99.5% of average rate of CDI | 150,000 | 189,398 | 184,735 |
CCB 21/11062X (d) | 08.26.2013 | 3 | 07.27.2018 | 106.0% of average rate of CDI | 151,000 | 156,386 | 152,135 |
NC 330600129 (e) | 01.31.2007 | 1 | 01.31.2014 | 106.5% of average rate of CDI | 29,000 | - | 30,156 |
NC 330600132 (f) | 02.28.2007 | 1 | 02.28.2014 | 107.8% of average rate of CDI | 231,000 | 230,849 | 238,591 |
NC 330600151 (g) | 07.31.2007 | 1 | 07.31.2014 | 106.5% of average rate of CDI | 18,000 | 18,293 | 18,718 |
NC 330600156 (h) | 08.28.2007 | 1 | 08.28.2014 | 106.5% of average rate of CDI | 14,348 | 14,464 | 14,821 |
NC 330600157 (i) | 08.31.2007 | 1 | 08.31.2014 | 106.5% of average rate of CDI | 37,252 | 37,538 | 38,439 |
NC 330600609 (j) | 08.19.2011 | 3 | 07.21.2016 | 109.41% of average rate of CDI | 600,000 | 600,425 | 614,013 |
1,566,395 | 1,602,960 | ||||||
Current | 436,715 | 716,067 | |||||
Noncurrent | 1,129,680 | 886,893 | |||||
Company: | |||||||
Copel Distribuição: (a) (b) (c) (d) | |||||||
Copel: (e) (f) (g) (h) (i) (j) | |||||||
Annual installm ent | |||||||
Along w ith the interest in proportion to the installments, the first amount of R$ 116,666, maturing on 08.25.2013 andothers of R$ 116,667, maturing on 07.11.2014 and 08.15.2015: (b) | |||||||
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: (d) | |||||||
The first amount of R$ 200,000, maturing on 07.21.2014 and other on 07.21.2015 and 07.21.2016: (j) | |||||||
Destination: | |||||||
Private Credit Assignment Agreement w ith the Federal Government: (a) | |||||||
Working capital: (b) (c) (d) | |||||||
Only purpose of paying the debts: (e) (f) (g) (h) (i) (j) | |||||||
Collateral: | |||||||
Copel s accounts receivable: (a) | |||||||
Pledge until 360 days: (b) (c) | |||||||
Assignment of receivables: (d) | |||||||
Note: | |||||||
On 02.28.2014, the additive correction and ratification of the NC 330600132 extended the maturity and changed the form ofpayment and financial charges. (f) | |||||||
40
21.3 Eletrobras - Centrais Elétricas Brasileiras S.A.
Issue | Number of | Final | Annual rate p.y. | Consolidated | |||
Contracts | Date | installment | maturity | (interest + commission) | Principal | 03.31.2014 | 12.31.2013 |
1293/94 (a) | 09.23.1994 | 180 | 06.30.2016 | 5.5% to 6.5% + 2.0% | 307,713 | 75,366 | 83,362 |
980/95 (b) | 12.22.1994 | 80 | 11.15.2018 | 8.0% | 11 | 13 | 12 |
981/95 (c) | 12.22.1994 | 80 | 08.15.2019 | 8.0% | 1,169 | 359 | 376 |
982/95 (d) | 12.22.1994 | 80 | 02.15.2020 | 8.0% | 1,283 | 137 | 142 |
983/95 (e) | 12.22.1994 | 80 | 11.15.2020 | 8.0% | 11 | 173 | 179 |
984/95 (f) | 12.22.1994 | 80 | 11.15.2020 | 8.0% | 14 | 74 | 77 |
985/95 (g) | 12.22.1994 | 80 | 08.15.2021 | 8.0% | 61 | 46 | 47 |
002/04 (h) | 06.07.2004 | 120 | 07.30.2016 | 8.0% | 30,240 | 2,570 | 2,846 |
142/06 (i) | 05.11.2006 | 120 | 09.30.2018 | 5.0% + 1.0% | 74,340 | 16,375 | 17,286 |
206/07 (j) | 03.03.2008 | 120 | 08.30.2020 | 5.0% + 1.0% | 109,642 | 57,130 | 59,357 |
273/09 (k) | 02.18.2010 | 120 | 12.30.2022 | 5.0% + 1.0% | 63,944 | 14,387 | 14,798 |
2540/06 (l) | 05.12.2009 | 60 | 10.30.2016 | 5.0% + 1.5% | 2,844 | 1,161 | 1,274 |
167,791 | 179,756 | ||||||
Current | 49,480 | 49,329 | |||||
Noncurrent | 118,311 | 130,427 | |||||
Company: | |||||||
Copel Geração e Transmissão: (a) | |||||||
Copel Distribuição: (b) (c) (d) (e) (f) (g) (h) (i) (j) (k) (l) | |||||||
Destination: | |||||||
Financial cover up to 29.14% of the total project of HPP Governador José Richa Implementation and transmission system: (a) | |||||||
National Program for Watering - Proni: (b) (c) (d) (e) (f) (g) | |||||||
Rural Electricity Program - Luz para Todos:(h) (i) (j) (k) | |||||||
National Program for Efficient Public Lighting - ReLuz: cover 75% of the total cost of the Project for the City of Ponta Grossa:(l) | |||||||
Collateral: | |||||||
The guarantee is represented by the income, supported by pow er of attorney granted by a public instrument,and the issue of promissory notes equal to the number of installments falling due. | |||||||
Note: | |||||||
Final Grace Period: 12.30.2012 (k) |
41
21.4 Finep
Issue | Number of | Final | Annual rate p.y. | Consolidated | |||
Contracts | Date | installment | maturity | (interest + commission) | Principal | 03.31.2014 | 12.31.2013 |
2070791-00 (a) | 11.28.2007 | 49 | 12.15.2014 | 0.37% above TJLP | 5,078 | 860 | 1,147 |
2070790-00 (b) | 11.28.2007 | 49 | 12.15.2014 | 0.13% above TJLP | 3,535 | 410 | 547 |
21120105-00 (c) | 05.17.2012 | 81 | 10.15.2020 | 4.0% | 35,095 | 20,700 | 21,223 |
21120105-00 (c) | 05.17.2012 | 81 | 10.15.2020 | 3.5% + TR | 17,103 | 16,630 | 17,640 |
38,600 | 40,557 | ||||||
Current | 6,996 | 6,935 | |||||
Noncurrent | 31,604 | 33,622 | |||||
Company: | |||||||
Copel Geração e Transmissão: (a) (b) | |||||||
Copel Telecomunicações: (c) | |||||||
Destination: | |||||||
Research and Development ProjectGER 2007:(a) | |||||||
Research and Development ProjectTRA 2007:(b) | |||||||
BEL project - ultra w ide band intranet service (Ultra Wide Band- UWB): (c) | |||||||
Collateral: | |||||||
Withhold the amounts from the checking account in w hich revenues are deposited:(a) (b) (c) | |||||||
Note: | |||||||
In replacement to the contract 2100567-00, signed on November 29, 2010. Credit of R$ 52,198 to be offered in six parcels. | |||||||
In contrast, the financed commits to participate in the costs of preparation w ith the minimum value of R$ 8,324. | |||||||
Were released three parcels, totaling R$ 38,471 of this amount, R$ 12,664 w as released in 2013. | |||||||
The maturity of the 1stinstallment w as February 15, 2014. (c) |
42
21.5 BNDES
Issue | Number of | Maturity | Annual rate p.y. | Consolidated | ||||
Contracts | Date | installm ent | initial | final | (interest + com mission) | Principal | 03.31.2014 | 12.31.2013 |
820989.1 (a) | 03.17.2009 | 179 | 03.15.2013 | 01.15.2028 | 1.63% above TJLP | 169,500 | 157,693 | 160,572 |
1120952.1-A (b) | 12.16.2011 | 168 | 05.15.2012 | 04.15.2026 | 1.82% above TJLP | 42,433 | 36,731 | 37,484 |
1120952.1-B (c) | 12.16.2011 | 168 | 05.15.2012 | 04.15.2026 | 1.42% above TJLP | 2,290 | 1,982 | 2,022 |
1220768.1 (d) | 09.28.2012 | 192 | 08.15.2013 | 07.15.2029 | 1.36% above TJLP | 73,122 | 66,178 | 67,259 |
13211061 (e) | 12.04.2013 | 192 | 11.15.2015 | 10.15.2031 | 1.49% above TJLP | 1,041,155 | 850,691 | 840,106 |
13210331 (f) | 12.03.2013 | 168 | 09.15.2014 | 08.15.2028 | 1.49% and 1.89% above TJLP | 17,644 | 17,742 | 17,666 |
1,131,017 | 1,125,109 | |||||||
Current | 31,707 | 20,776 | ||||||
Noncurrent | 1,099,310 | 1,104,333 | ||||||
Company: | ||||||||
Copel Geração e Transmissão | ||||||||
Financial charges: | ||||||||
It w ill be paid monthly after the first payment of the principal amount. | ||||||||
Destination: | ||||||||
Construction of the Mauá Hydroelectric Pow er Plant and its transmission system: (a) | ||||||||
Implementation of transmission line betw een substations Foz do Iguaçu and Cascavel Oeste: (b) | ||||||||
Purchase of machinery and equipment: (c) | ||||||||
Implementation of Cavernoso II SHP: (d) | ||||||||
Implementation of HPP Colíder and associated transmission system: (e) | ||||||||
Implementation of the 230/138kV Cerquilho III Substation: (f) | ||||||||
Collateral: | ||||||||
All the revenues from the sale of energy under Agreements for Energy Trade on the Regulated Pow er Market ( Contracts for theSale of Energy in the Regulated Environment or CCEARs) in connection w ith this project (a) and (d) | ||||||||
Copel Geração e Transmissão has undertaken to assign to the BNDES the rights it holds under Concession Arrangement027/2009-ANEEL, and to submit as a guarantee to the BNDES the credit rights deriving from the provision of energy transmissionservices stipulated in the Concession Arrangement (Transmission Services Agreement 09/2010), by Copel Geração e Transmissãoand the National Electric System Operator (Operador Nacional do Sistema Elétrico or ONS), the transmission concession operatorsand the users of the transmission system, including the entire revenue deriving from the transmission services provided: (b) and (c) | ||||||||
Statutory assignment of the rights under Concession Agreement 01/2011MME-UHE Colíder andstatutory assignment under the electricity purchase and sale agreement (CCVEE) betw een Copel and Sadia S.A.: (e) | ||||||||
Statutory assignment of the rights under Public Electricity Transmission Service Concession Agreement015/2010-ANEEL, betw een Copel and the federal government: (f) | ||||||||
21.6 Banco do Brasil - Distribution of Funds from BNDES
Issue | Number of | Maturity | Annual rate p.y. | Consolidated | ||||
Contracts | Date | installment | initial | final | (interest + commission) | Principal | 03.31.2014 | 12.31.2013 |
21/02000-0 | 04.16.2009 | 179 | 02.15.2012 01.15.2028 | 2.13% above TJLP | 169,500 | 157,721 | 160,580 | |
157,721 | 160,580 | |||||||
Current | 11,821 | 11,838 | ||||||
Noncurrent | 145,900 | 148,742 | ||||||
Company: | ||||||||
Copel Geração e Transmissão | ||||||||
Financial charges: | ||||||||
It w ill be paid quarterly during the grace period and monthly after the first payment of the principal amount | ||||||||
Destination: | ||||||||
Construction of the Mauá Hydroelectric Pow er Plant and its transmission system, in consortium w ith Eletrosul | ||||||||
Collateral: | ||||||||
All the revenues from the sale of energy under Agreements for Energy Trade on the Regulated Pow er Market ( Contractsfor the Sale of Energy in the Regulated Environment or CCEARs) in connection w ith this project | ||||||||
43
21.7 Promissory notes – Wind Power
Issue | Single | Annual rate p.y. | Consolidated | |||
Company | Date | Maturity | (interest + commission) | Principal | 03.31.2014 | 12.31.2013 |
Nova Asa Branca I (a) | 12.26.2013 | 06.24.2014 | 100% of average rate of CDI + 0.90% | 22,000 | 22,604 | 22,000 |
Nova Asa Branca II (a) | 12.26.2013 | 06.24.2014 | 100% of average rate of CDI + 0.90% | 22,000 | 22,604 | 22,000 |
Nova Asa Branca III (a) | 12.26.2013 | 06.24.2014 | 100% of average rate of CDI + 0.90% | 22,000 | 22,604 | 22,000 |
Nova Eurus IV (a) | 12.26.2013 | 06.24.2014 | 100% of average rate of CDI + 0.90% | 22,000 | 22,604 | 22,000 |
Santa Maria (b) | 12.26.2013 | 06.24.2014 | 100% of average rate of CDI + 0.90% | 25,000 | 25,686 | 25,000 |
Santa Helena (c) | 12.26.2013 | 06.24.2014 | 100% of average rate of CDI + 0.90% | 24,000 | 24,659 | 24,000 |
Ventos de Santo Uriel (d) | 12.26.2013 | 06.24.2014 | 100% of average rate of CDI + 0.90% | 13,000 | 13,357 | 13,000 |
154,118 | 150,000 | |||||
Characteristics: | ||||||
Promissory notes issued in the follow ing manner: Four notes issued w ith unit values of R$5,500 (a); | ||||||
five notes issued w ith unit values of R$5,000 (b); six notes issued w ith unit values of R$4,000 (c); | ||||||
and thirteen notes issued w ith unit values of R$1,000 (d) | ||||||
Financial charges: | ||||||
Interest paid entirely upon maturity. | ||||||
Destination: | ||||||
Guarantee funds for the investment program w ith the construction of w ind pow er plants. | ||||||
Collaterals: | ||||||
Personal guarante | ||||||
Guarantor: | ||||||
Copel | ||||||
Trustee: | ||||||
C&D Distribuidora de Títulos e Valores Mobilíarios S.A. |
21.8 Breakdown of loans and financing by currency and index
Index and change in foreign currencies | Consolidated | ||||
accum ulated in the period (%) | 03.31.2014 | % | 12.31.2013 | % | |
Foreign currency | |||||
U.S. Dolar | (3.40) | 63,313 | 1.93 | 64,822 | 1.95 |
63,313 | 1.93 | 64,822 | 1.95 | ||
Local currency | |||||
TJLP | 5.00 | 1,290,008 | 39.34 | 1,308,607 | 39.37 |
IGP-M | 2.55 | - | - | 65 | - |
Ufir | 0.00 | 92,425 | 2.82 | 96,394 | 2.90 |
Finel | 0.17 | 75,366 | 2.30 | 83,361 | 2.51 |
CDI | 1.70 | 1,720,513 | 52.47 | 1,752,895 | 52.74 |
TR | 0.19 | 16,630 | 0.51 | - | - |
Without indexer | - | 20,700 | 0.63 | 17,640 | 0.53 |
3,215,642 | 98.07 | 3,258,962 | 98.05 | ||
3,278,955 | 100.00 | 3,323,784 | 100.00 | ||
Current | 693,618 | 957,106 | |||
Noncurrent | 2,585,337 | 2,366,678 |
44
21.9 Maturity of noncurrent installments
Parent Company | Consolidated | |||||
Foreign | Local | Foreign | Local | |||
03.31.2014 | currency | currency | Total | currency | currency | Total |
2015 | - | 197,397 | 197,397 | - | 447,381 | 447,381 |
2016 | - | 197,397 | 197,397 | - | 482,903 | 482,903 |
2017 | - | 76,319 | 76,319 | - | 227,425 | 227,425 |
2018 | - | 76,319 | 76,319 | - | 226,829 | 226,829 |
2019 | - | 76,319 | 76,319 | - | 172,780 | 172,780 |
After 2020 | 60,532 | - | 60,532 | 60,532 | 967,487 | 1,028,019 |
60,532 | 623,751 | 684,283 | 60,532 | 2,524,805 | 2,585,337 |
21.10 Changes in loans and financing
Foreign currency | Local currency | ||||
Consolidated | Current | Noncurrent | Current | Noncurrent | Total |
Balance as of January 1, 2014 | 2,161 | 62,661 | 954,945 | 2,304,017 | 3,323,784 |
Charges | 716 | - | 57,209 | 11,402 | 69,327 |
Monetary and exchange variations | (96) | (2,129) | 141 | (394) | (2,478) |
Transfers | - | - | (209,780) | 209,780 | - |
Amortization - principal | - | - | (46,415) | - | (46,415) |
Amortization - interest | - | - | (65,263) | - | (65,263) |
Balance as of March 31, 2014 | 2,781 | 60,532 | 690,837 | 2,524,805 | 3,278,955 |
21.11 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; specifically for Copel Geração e Transmissão, no dividend distributions or payments for interest on own capital to be made, for which the amount, individually or together, exceeds the minimum compulsory amount, without prior and express authorization. Non compliance with these terms could result in the anticipated maturity of the debts and/or fines.
At March 31, 2014 all contractual covenants had been complied with.
45
22 Debentures
Issue | Number of | Maturity | Annual rate p.y. | Consolidated | ||||
Debentures | Date | installm ent | initial | final | (interest) | Principal | 03.31.2014 | 12.31.2013 |
1st issue (a) | 10.30.2012 | 2 | 10.30.2016 | 10.30.2017 | DI + Spread 0.99% p.y. | 1,000,000 | 1,042,382 | 1,015,389 |
2nd issue (b) | 09.26.2013 | 60 | 10.26.2013 | 09.26.2018 | DI + Spread 1.00% p.y. | 203,000 | 182,436 | 192,556 |
1st issue (c) | 06.15.2013 | 40 | 09.15.2015 | 12.15.2018 | TJLP+1.7% p.y.+1.0% p.y. | 62,626 | 29,644 | - |
1,254,462 | 1,207,945 | |||||||
Current | 84,341 | 57,462 | ||||||
Noncurrent | 1,170,121 | 1,150,483 | ||||||
Company: | ||||||||
Copel Distribuição: (a) | ||||||||
Elejor: (b) | ||||||||
Compagas: (c) | ||||||||
Characteristics: | ||||||||
Simple debentures, single series, unconvertible, unsecured debenture, w as approved for public offering under restrictedplacement efforts, pursuant to CVM Instruction number 476, in the minimum amount of R$ 1,000,000 (a) and R$ 203,000 (b)100,000 (a) and 20.300 (b) notes w ere issued w ith a unit value of R$ 10. | ||||||||
Simple floating debentures, issued privately in a single series and not convertible into shares, in the amount of R$62,626 (c) | ||||||||
Securities w orth R$1 per unit w ere issued in the quantity of: 62,626 (c) | ||||||||
The debentures' unit values w ill not be adjusted for inflation: (a) (b) e (c) | ||||||||
Finance charges: | ||||||||
Interest paid half-yearly in April and October: (a) | ||||||||
Interest paid monthly: (b) | ||||||||
Interest paid quarterly in March, June, September and December: (c) | ||||||||
Allocation: | ||||||||
Working capital or used to make investments in the issuer: (a) | ||||||||
Full settlement of the loan agreement w ith Copel: (b) | ||||||||
Fund investment plan of the issuer: (c) | ||||||||
Collaterals: | ||||||||
Personal guarantee (a) and (b) | ||||||||
Floating: (c) | ||||||||
Guarantor: | ||||||||
Copel: (a) | ||||||||
Copel, na proporção de 70% e Paineira Participações S.A., na proporção de 30%: (b) | ||||||||
Compagas: (c) | ||||||||
Trustee: | ||||||||
C&D Distribuidora de Títulos e Valores Mobilíarios S.A.: (a) e (b) | ||||||||
BNDES Participações S.A. - BNDESPAR: (c) |
22.1 Changes in debentures
Consolidated | Current | Noncurrent | Total |
Balance as of January 1, 2014 | 57,462 | 1,150,483 | 1,207,945 |
Funding | - | 29,374 | 29,374 |
Charges | 31,571 | 740 | 32,311 |
Transfers | 10,476 | (10,476) | - |
Amortization - principal | (10,152) | - | (10,152) |
Amortization - interest and variation | (5,016) | - | (5,016) |
Balance as of March 31, 2014 | 84,341 | 1,170,121 | 1,254,462 |
46
22.2 Contracts with clauses for anticipated maturity
Copel Distribuição and Elejor 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 March 31, 2014 all contractual covenants had been complied with.
23 Post-Employment Benefits
The Company and its subsidiaries sponsor retirement and pension plans (Pension Plans I, II, and III) and a medical and dental care plan (Healthcare Plan) to both current and retired employees and their dependents.
23.1 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.
23.2 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.
47
23.3 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 | ||||
03.31.2014 | 12.31.2013 | 03.31.2014 | 12.31.2013 | ||
Pension plan | 2 | 2 | 28 | 5 | |
Healthcare plan | 16,671 | 2,169 | 984,982 | 967,227 | |
16,673 | 2,171 | 985,010 | 967,232 | ||
Current | 2 | 2 | 31,682 | 29,983 | |
Noncurrent | 16,671 | 2,169 | 953,328 | 937,249 |
The amounts recognized in the statement of income are shown below:
. | Parent Company | Consolidated | ||
03.31.2014 | 03.31.2013 | 03.31.2014 | 03.31.2013 | |
Pension plan (CD) | 1,511 | - | 13,201 | 14,513 |
Pension plan (CD) - management | 97 | 92 | 215 | 111 |
Healthcare plan - post employment | 73 | - | 25,526 | 17,780 |
Healthcare plan | 780 | - | 10,442 | 9,704 |
Healthcare plan - management | 19 | 23 | 33 | 26 |
2,480 | 115 | 49,417 | 42,134 |
23.4 Changes in the post-employment benefits
Current | Noncurrent | ||
Consolidated | liabilities | liabilities | Total |
Balance as of January 1, 2014 | 29,983 | 937,249 | 967,232 |
Appropriation of actuarial calculation | - | 25,527 | 25,527 |
Pension and healthcare contributions | 28,312 | - | 28,312 |
Transfers | 9,448 | (9,448) | - |
Amortizations | (36,061) | - | (36,061) |
Balance as of March 31, 2014 | 31,682 | 953,328 | 985,010 |
23.5 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 23 to the financial statements as of December 31, 2013.
24 Customer Charges Due
Consolidated | 03.31.2014 | 12.31.2013 |
Global Reversal Reserve (RGR) | 22,420 | 31,652 |
Energy Development Account (CDE) | 11,709 | 6,342 |
34,129 | 37,994 |
48
25 Research and Development and Energy Efficiency
25.1 Balance recognized to invest in R&D (Research and Development) and EEP (Energy efficiency program)
Applied and | Balance | Balance | Balance as of | Balance as of | |
unfinished | to collect | to apply | 03.31.2014 | 12.31.2013 | |
Research and Developm ent - R&D | |||||
FNDCT (a) | - | 5,914 | - | 5,914 | 3,771 |
MME | - | 2,957 | - | 2,957 | 1,887 |
R&D | 31,860 | - | 150,937 | 182,797 | 171,928 |
31,860 | 8,871 | 150,937 | 191,668 | 177,586 | |
Energy efficiency program - EEP | 45,061 | - | 66,763 | 111,824 | 104,995 |
76,921 | 8,871 | 217,700 | 303,492 | 282,581 | |
Current | 130,725 | 127,860 | |||
Noncurrent | 172,767 | 154,721 | |||
(a) National Fund for Scientific and Technological Development |
25.2 Changes in balances for R&D and EEP
FNDCT | MME | R&D | EEP | ||||
current | current | current | noncurrent | current | noncurrent | Consolidated | |
Balance as of January 1, 2014 | 3,771 | 1,887 | 46,956 | 124,972 | 75,246 | 29,749 | 282,581 |
Additions | 8,065 | 4,032 | 2,104 | 5,961 | - | 7,032 | 27,194 |
Performance agreement | - | - | - | - | - | 222 | 222 |
Selic interest rate | - | - | 40 | 3,368 | - | 1,463 | 4,871 |
Payments | (5,922) | (2,962) | - | - | - | - | (8,884) |
Concluded projects | - | - | (604) | - | (1,888) | - | (2,492) |
Balance as of March 31, 2014 | 5,914 | 2,957 | 48,496 | 134,301 | 73,358 | 38,466 | 303,492 |
49
26 Accounts Payable related to concession - Use of Public Property
These refer to concession charges for use of public property (UPP).
Consolidated | Current | Noncurrent | |||||
Grants | Signature | Final | 03.31.2014 | 12.31.2013 | 03.31.2014 | 12.31.2013 | |
HHP Mauá (a) | 06.29.2007 | 07.03.2007 | 07.2042 | 934 | 913 | 12,837 | 12,612 |
HHP Colider (b) | 12.29.2010 | 01.17.2011 | 01.2046 | 484 | 118 | 17,430 | 17,091 |
SHP Cavernoso (c) | 07.11.2013 | 07.11.2013 | 07.2018 | 36 | 35 | 96 | 101 |
SHP Apucaraninha (d) | 07.11.2013 | 07.11.2013 | 07.2018 | 252 | 247 | 674 | 702 |
SHP Chopim I (e) | 07.11.2013 | 07.11.2013 | 07.2015 | 56 | 55 | 15 | 26 |
SHP Chaminé (f) | 07.11.2013 | 07.11.2013 | 07.2018 | 435 | 427 | 1,164 | 1,214 |
SHP Drifting Rio Jordão (g) | 07.11.2013 | 02.24.2014 | 02.2019 | 216 | - | 672 | |
Fundão Santa Clara Hydroelectric | |||||||
Energy Complex (g) | 10.23.2001 | 10.25.2001 | 10.2036 | 49,686 | 49,686 | 398,515 | 388,547 |
52,099 | 51,481 | 431,403 | 420,293 | ||||
Company: | |||||||
Copel Geração e Transmissão: (a) (b) (c) (d) (e) (f) (g) | |||||||
Elejor: (h) | |||||||
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: | |||||||
5,65% p.y. (a) | |||||||
7,74% p.y. (b) (c) (d) (e) (f) (g) | |||||||
11,00% p.y. (h) | |||||||
Payment to the federal governm ent: | |||||||
Monthly installments equivalent to 1/12 of the proposed annual payment of R$643 (51% of R$1,262), according to clause six ofConcession Agreement number 001/07: (a) | |||||||
Monthly installments equivalent to 1/12 of the proposed annual payment of R$1,256, as from the date the hydroelectric powerplant starts operations, according to clause six of Concession Agreement number 001/11: (b) | |||||||
Monthly installments equivalent to 1/12 of the proposed annual payment, according to clause fifth of Concession Agreementnumber 001/07,for a period of five years: (c) (d) (e) (f) (g) | |||||||
Monthly installments equivalent to 1/12 of the proposed annual payment ofR$19,000, from the sixth to the thirty-fifth year ofconcession or w hile the hydroelectric resources are being explored, according to the bid approval document and clausesix of Concession Agreement number 125/01: (h) | |||||||
Annual adjustment of installm ents for inflation: | |||||||
Variation IPCA: (a) (b) (c) (d) (e) (f) (g) | |||||||
Variation IGP-M: (h) |
26.1 Change in Accounts Payable related to concession - Use of Public Property
Current | Noncurrent | ||
Consolidated | liabilities | liabilities | Total |
Balance as of January 1, 2014 | 51,481 | 420,293 | 471,774 |
Aneel concession - use of public assets | 215 | 1,385 | 1,600 |
Transfers from non-current to current liabilities | 13,262 | (13,262) | - |
Payments | (12,859) | - | (12,859) |
Monetary variation | - | 22,987 | 22,987 |
Balance as of March 31, 2014 | 52,099 | 431,403 | 483,502 |
50
27 Other Accounts Payable
Consolidated | 03.31.2014 | 12.31.2013 | |
Reimbursements to customer contributions | 27,421 | 19,428 | |
Public lighting fee collected | 25,108 | 21,489 | |
Financial compensation for use of w ater resources | 22,768 | 22,952 | |
Customers | 17,413 | 18,745 | |
Pledges in guarantee | 16,164 | 14,286 | |
Consortium partners | 3,003 | 3,003 | |
Other liabilities | 62,452 | 37,341 | |
174,329 | 137,244 | ||
Current | 174,099 | 137,011 | |
Noncurrent | 230 | 233 |
28 Provision for Contingencies
28.1 Lawsuits with Likelihood of Losses deemed as probable
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.
Change in provision for contingencies
Additions to Property, | |||||||
Consolidated | Balance as of | Construction | Plant and Equipment | Balance as of | |||
January 1, 2014 | Additions | (-) Reversals | cost | in progress | Discharges | March 31, 2014 | |
Tax (28.1.1) | |||||||
Cofins (a) | 243,131 | - | - | - | - | - | 243,131 |
Others taxes | 44,108 | 603 | - | - | - | - | 44,711 |
287,239 | 603 | - | - | - | - | 287,842 | |
Labor | 196,054 | 8,658 | (394) | - | - | (748) | 203,570 |
Employee benefits | 94,809 | 8,404 | - | - | - | (7,034) | 96,179 |
Civil (28.1.2) | |||||||
Suppliers (a) | 64,775 | - | (1,360) | - | - | - | 63,415 |
Civil and administrative law (b) | 197,838 | 12,375 | - | - | - | (1,176) | 209,037 |
Easements | 10,639 | 3,122 | - | - | - | (5) | 13,756 |
Condemnation and real estate (c) | 353,461 | 13,712 | - | 256 | 10,596 | (280) | 377,745 |
Customers | 9,633 | 303 | - | - | - | - | 9,936 |
636,346 | 29,512 | (1,360) | 256 | 10,596 | (1,461) | 673,889 | |
Environmental claims | 211 | 9 | - | - | - | - | 220 |
Regulatory (28.1.3) | 51,468 | 765 | - | - | - | - | 52,233 |
1,266,127 | 47,951 | (1,754) | 256 | 10,596 | (9,243) | 1,313,933 |
Balance as of | Balance as of | ||
Parent Company | January 1, 2014 | Additions | March 31, 2014 |
Tax (28.1.1) | |||
Cofins (a) | 243,131 | - | 243,131 |
Outras | 22,016 | 76 | 22,092 |
265,147 | 76 | 265,223 | |
Civil | 390 | 296 | 686 |
Regulatory | 12,310 | - | 12,310 |
277,847 | 372 | 278,219 |
51
28.1.1 Tax claims
a) Contribution for the Financing of Social Security - COFINS
Lawsuit no. 10980.004398/2010-09 – Curitiba Federal Revenue Service Office
This is a tax administrative proceeding (assessment of deficiency) whereby the Brazilian Federal Revenue Service intends to collect COFINS (Tax for Social Security Financing) for the period from August 1995 to December 1996, as a result of the final and non-appealable decision rendered on lawsuit 2000.04.01.100266-9 filed by the federal government, overturning the ruling in lawsuit no. 95.0011037-7 which had recognized the Company’s immunity from payment of COFINS tax.
Given the opinion of the federal tax authorities, the lack of case law precedent, the complexity and specifics of both facts and legal matter involved, the principal of R$ 48,814 was rated as a probable loss and the interest and fine are subject to another proceeding (11453.720001/20011-23) and at March 31, 2014 amount to R$ 125,544, was classified as a possible risk of defeat, as the cases of defense are different for the principal and the charges.
Lawsuit no. 10980.720458/2011-15 – Curitiba Federal Revenue Service Office
This is a tax administrative proceeding (assessment of deficiency) whereby the Brazilian Federal Revenue Service intends to collect COFINS (Tax for Social Security Financing) for the period from October 1998 to June 2001, as a result of the final and non-appealable decision rendered on lawsuit 2000.04.01.100266-9 filed by the federal government, overturning the ruling in lawsuit no. 95.0011037-7 which had recognized the Company’s immunity from payment of COFINS tax.
The Federal Revenue Services understands that the sentence for the Rescission Claim had suspended the liability period for constituting the aforementioned tax credit.
Given the lack of law precedent, the complexity and specifics of both facts and legal matter involved, the principal of R$ 194,317 was rated as a probable loss and the interest and fine on said tax liability at March 31, 2014 amount to R$ 643,716, was classified as a possible risk of defeat, as the cases of defense are different for the principal and the charges.
28.1.2 Civil claims
a) Suppliers
Rio Pedrinho Energética S.A. and Consórcio Salto Natal Energética S.A.
The companies Rio Pedrinho Energética S.A. and Consórcio Salto Natal Energética S.A. required the filing of an arbitration proceeding with the Chamber of Arbitrage of the Fundação Getúlio Vargas, through which they plead the payment of the overdue instalment values, as well as cancellation fines, related to the electric energy purchase and sale agreements signed with Copel Distribuição. The arbitrage proceedings were judged to be valid and, consequently, Copel Distribuição was sentenced to pay the claimed amounts plus the attorney’s fees. The Company has filed for a court order at the Superior Court of Justice making the arbitration ruling void.
52
Given that both companies have identified the pledged amounts (R$ 35,913 on June 17, 2010, R$ 22,823 on October 1, 2009 and R$ 11,833 on February 03, 2010), the legal directors have continued to classify the action as representing a probable loss, highlighting that the same bank bond letters were presented as guarantee for the amounts identified. In addition to the legal discussion, at the end of 2011 the remaining balance of R$ 27,438 was executed and as a result a bank account was blocked. This execution was challenged by Copel Distribuição, which is the reason why management decided to record a financial provision for the legal claims, for the original value of the debts monetary adjusted to March 31, 2014, which amounts to R$ 89,025. Of this amount, R$ 25,610 has been recorded to suppliers.
The judge of the 3rd Public Finance Court ruled the amount of R$ 22,162 is outstanding, and released the amounts of R$ 12,790 and R$ 9,372 to the enforcement creditors on 04.12.2012, via a bank guarantee. The matter is still under consideration since it is appealed by Copel and by the Consórcio Salto Natal.
b) Civil and administrative claims
Tradener Ltda.
Lawsuits involving Tradener Ltda, where it is reported that it signed a contract for sale of power, with Copel on December 1, 1998 in which the plaintiff undertook to “sell” under the best conditions to Copel, all the surplus of purchase and all the surplus of assured power with the effective prices, quantities and conditions to be stipulated in the agreements for purchase and sale of electric power.
Aiming at a declaration of nullity of this contract the following lawsuits were filed:
- Popular Action (case record 37879/0000 of the 1stCourt of the Public Treasury of Curitiba)
- Popular Action (case record 720/2001 of the 1st Court of the Public Treasury of Curitiba)
- Popular Civil Action (case record 421/2003 of the 2nd Court of the Public Treasury of Curitiba)
- Nullifying Declaratory Action (case record 1583/2005 of the 1st Court of the Public Treasury of Curitiba)
- Nullifying Declaratory and Condemnatory Action (case record 0000659-69.2006.8.16.0004 of the 2nd Court of the Public Treasury of Curitiba)
In the above lawsuits values were not discussed, only the validity or otherwise of the contract of sale entered into between Tradener and Copel and of the contracts for sale of electricity in which Tradener figured as broker. The possibility of annulment of the contracts is remote considering decisions already handed down in some of the processes above.
53
In light of an injunction issued in case record 421/2003 of the Public Civil Action, the execution of the contract was suspended, however, recently there was the revocation of the injunction. Accordingly, Tradener filed the following lawsuits for collection, aiming at receiving its commissions:
- case record 0005990-22.2012.8.16.0004 - 1st Court of the Treasury of Curitiba - In this lawsuit, the principal amount of R$ 45,145 was considered likely as the charging of monetary restatement in the amount of R$ 20,847 is being challenged, considering that the execution of the contract was suspended by an injunction and therefore this adjustment would not be charged, and it is classified as possible.
- case record 05550-26.2012.8.16.0004 - 4th Court of the Treasury of Curitiba - In this lawsuit, the principal amount of R$ 22,697 was considered likely as the charging of monetary restatement in the amount of R$ 17,277 is being challenged, considering that the execution of the contract was suspended by an injunction and therefore this adjustment would not be charged, and it is classified as possible.
c) Easements, condemnation and real estate
Ivaí Engenharia de Obras S.A.
In a lawsuit filed before the 1st Fiscal Court of Curitiba, Ivaí Engenharia de Obras S.A. won the right to receive credits from Copel Geração e Transmissão in connection with the execution of contract D-01, which comprised the Jordão River diversion works. These credits were a compensation for a supposed economic and financial imbalance in the contract. Based on this ruling, Ivaí filed a separate collection lawsuit before the 4th Fiscal Court of Curitiba and obtained a ruling ordering Copel to pay the amount of R$ 180,917, as of October 31, 2005, plus restatement by the average between the INPC and IGP-DI inflation indicators, delinquent interest of 1% a month, and 3.2% as legal fees.
The appeal claim, currently in progress in the Superior Court of Justice (Superior Tribunal de Justiça or STJ), covers the absence of economic and financial imbalance in the contract, as well as the nullity of the calculation performed by the judicial expert, who used wrong parameters to obtain the value of condemnation, causing interest rates to be applied in duplicity (Selic rate + interest rate). Although the Justice Court has dismissed the duplicity in the incidence of interest from the elaboration of the expert report, it did not examine the appeal reasoning that showed that the calculation contained within the expert report was wrong.
In June 2013 the writ of certiorari number 1.096.906 was granted and the decision was unfavorable to Copel
54
Until the conclusion of judgment and in view of the unfavourable vote and of the analysis of previous decisions ruled by the other Ministers that participated in the trial, the Company’s senior management, proceeded to a detailed review of the process course over the last months of 2011 and decided to remeasure the value to be provisioned, from R$ 125,000, which represented the original value of the debt in question, adjusted with legal interest and restated by inflation indexes, to R$ 312,816.
The accumulation of interest, in this case, Selic interest rate plus interest on arrears is a situation rejected by the Judiciary Power, and it was already denied by the Supreme Justice Court (STJ) in numerous precedents. For this reason, it is also an appropriate approach to consider as a possible risk the loss of the difference in the value deemed as probable and the eventual total value of the condemnation, which is R$ 268,677, as of March 31, 2014.
Provisional enforcement was filed by Ivaí, so Copel filed a preliminary injunction before the STJ which was awarded by Judge Castro Meira, thereby staying said enforcement. After the Special Appeal had been heard for the collection proceedings, Ivaí requested the injunction be overturned, which was contested by Copel, meaning the stay would remain until final judgment of the subsequent appeals. The STJ ruled the case had lost its grounds, meaning Copel filed a special appeal, which was rejected. Copel's motion for clarification is now pending judgment. vaí has resumed the demand for temporary court enforcement of the debt, Copel challenged Ivaí's claims and according to a decision published on February 28, 2014, the judge found the challenge to have no grounds and established a period of 30 days for the defendant to deposit the full execution amount of R$ 538,209, in other words, by March 28, 2014.
Considering this decision made on the temporary execution proceedings, Copel did not make a court deposit, but on March 10, 2014 filed interlocutory appeal 1199139-2 with the state of Paraná's Court of Appeals (TJ-PR). On March 21, 2014, the reporting judge's preliminary decision on the appeal was published ordering a suspension of the enforcement of the lower court judgment and of execution proceedings until the interlocutory appeal filed by Copel is judged on its merits by the state of Paraná's Court of Appeals.
Copel is currently waiting for a decision on the motion filed with the Superior Court of Justice for clarification of the judgment with respect to the difference of amounts arising from the application of the SELIC (Central Bank overnight rate) for inflation adjustment purposes plus the late payment interest applied under the expert report. The temporary execution is suspended for the time being on account of the decision favorable to Copel obtained as a preliminary decision on the interlocutory appeal filed with the state of Paraná's Court of Appeals before a judgment on the merits of the appeal is passed.
55
28.1.3 Regulatory claims
The Company is disputing, both administratively and judicially, notifications issued by the regulatory agency in connection with supposed regulatory violations, including the charge of R$ 40,425 in lawsuits involving Companhia Estadual de Energia Elétrica - CEEE and Dona Francisca Energética S.A., in which ANEEL Ruling no. 288/2002 is being disputed. The probable success in these lawsuits will result in changes in CCEE (Spot Market) accounting, which would require the recording of a provision for these amounts, since Copel would be required to pay off the amounts due.
28.2 Main lawsuits with losses deemed as possible
Consolidated | 03.31.2014 | 12.31.2013 |
Tax (28.2.1) | 1,432,066 | 1,384,115 |
Labor | 437,591 | 342,887 |
Employee benefits | 105,496 | 97,979 |
Civil (28.2.2) | 719,830 | 1,006,786 |
Regulatory | 58,436 | 56,193 |
2,753,419 | 2,887,960 |
Detailing the main claims
28.2.1 Tax claims
a) Administrative Proceeding 11453.720001/2011-23
Deriving from the Tax for Social Security Financing (Cofins) Cancelation Action 2000.04.01.100266.9, refers to Cofins interest and fine for the period 95/96, and, owing to strong arguments presented for the defense of these charges, its classification has been assessed as possible. This debt's principal, however, was assessed as probable and is the subject matter of discussion in the Tax Foreclosure 5015930-53.2010.404.7000 filed by the Union, in progress at the 2nd. Federal Circuit Court, appealed by Copel (case records of appeal lodged against Foreclosure 5022933-59.2012.404.7000). Administrative Proceeding 10980720458/2011-15 also arising from 2000.04.01.100266.9 regarding Cofins, in the total amount of R$ 769,260, as of March 31, 2014. Additional information on this action has been described in Item 28.1.1.
b) Fiscal Notification of Debt Record – NFLD no. 35.273.870-7
Fiscal requirements according with approximate value of R$ 181,014 on March 31, 2014, authored by the National Institute of Social Security – INSS, against Copel, and related to the fiscal execution of social contribution; and
56
c) NFLD no. 35.273.876-6
Fiscal requirements with approximate value of R$79,251 on March 31, 2014, authored by the INSS, against Copel, and related to the fiscal execution of social contribution levied upon labor transfer.
28.2.2 Civil claim
a) Mineradora Tibagiana Ltda.
Indemnification lawsuit no. 166-53.2011.8.16.0122, whose defendant is the Consórcio Energético Cruzeiro do Sul – CECS, which Copel Geração e Transmissão detains 51%. The author claims being the owner of a mining decree issued by the National Department of Mineral Production – DNPM, and defends that with the mining decree, it is the legitimate holder of ownership and control of the area around Tibagi River. The indemnification claimed refers to alleged losses in the Company’s mining operations due to the construction work of the Mauá Hydroelectric Power Plant. In the course of the proceeding Mineradora Tibagiana partially withdrew its initial petition, which led to a new initial indemnification amount of R$ 92,924, restated on March 31, 2014 and classified as possible.
b) Ivaí Engenharia de Obras S.A.
Lawsuit which consists on the claim for compensation for an alleged imbalance in the financial economical equation in the contract signed with Copel. The Company’s senior management classified as a risk of possible loss for this lawsuit the value of R$ 268,677 on March 31, 2014. Additional information of this process is described in Note no. 28.1.2-c.
c) Contratos de franquia de Agência/loja Copel
Filing of 5 individual claims as a result of the 5 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 subconcession, with transfer of the services provided and full pass-through of the fees, amongst other amounts.
In the case filed regarding the franchise of the Faxinal branch, the judge of the 4th Federal Court of Curitiba deemed the secondary petition to have grounds. Copel appealed against the award of the Federal Regional Court of Region 4 - TRF4, which was ruled in favor of the Company in full on July 25, 2012. The plaintiff filed a special and extraordinary appeal, which was entertained by TRF4.
Company Management rated the amount of R$ 8,229 as a possible risk (corresponding to O&M and restated commercial charges). This plaintiff also filed a complaint before the STF, the entertainment of which was denied by Judge Marco Aurélio de Mello. The plaintiff filed a special appeal against the decision, which was denied, and then filed a motion for clarification, which is pending judgment.
57
In the case filed regarding the franchise of the São José dos Pinhais, branch, the judge of the 4th Federal Court of Curitiba deemed the secondary petition to have grounds. Copel filed a motion for clarification, which is pending judgment. Company management rated the case as a possible risk of defeat, amounting to R$ 21,810 (corresponding to O&M and restated commercial charges).
29 Equity
29.1 Equity attributable to Parent Company
29.1.1 Capital
As of March 31, 2014 (and December 31, 2013), 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 | Classe A Preferred | Classe B Preferred | Total | ||||
in share | % | in share | % | in share | % | in share | % | |
State of Paraná | 85,028,598 | 58.63 | - | - | 13,639 | 0.01 | 85,042,237 | 31.08 |
BNDESPAR | 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) | 19,785,122 | 13.64 | 129,427 | 33.93 | 66,509,615 | 51.86 | 86,424,164 | 31.58 |
NYSE (b) | 92,021 | 0.06 | - | - | 34,333,706 | 26.77 | 34,425,727 | 12.58 |
Latibex (c) | - | - | - | - | 61,149 | 0.05 | 61,149 | 0.02 |
Municipalities | 178,393 | 0.12 | 9,326 | 2.44 | 3,471 | - | 191,190 | 0.07 |
Other shareholders | 117,397 | 0.08 | 242,756 | 63.63 | 39,200 | 0.04 | 399,353 | 0.15 |
145,031,080 | 100.00 | 381,509 | 100.00 | 128,242,786 | 100.00 | 273,655,375 | 100.00 | |
(a) São Paulo Stock, Commodities, and Futures Exchange | ||||||||
(b) New York Stock Exchange | ||||||||
(c) Latin American Exchange in Euros, related to the Madrid Exchange |
The market value of Company stock as of March 31, 2014, is shown below:
Number of shares in units | Market Value | |
Common shares | 145,031,080 | 3,160,171 |
Class "A" preferred shares | 381,509 | 11,445 |
Class "B" preferred shares | 128,242,786 | 3,818,039 |
273,655,375 | 6,989,655 |
58
29.1.2 Equity Valuation Adjustments
Changes in the equity valuation adjustments
Parent Company | Consolidated | |
Balance as of January 1, 2014 | 983,159 | 983,159 |
Adjustm ent rel. to financial assets classified as available for sale: | ||
Financial Investments (a) | 589 | 893 |
Taxes on the adjustments | - | (304) |
Equity investments | (28) | (28) |
Taxes on the adjustments | 9 | 9 |
Adjustm ents for actuarial liabilities | ||
Post employment benefits | (14,429) | - |
Taxes on the adjustments | 4,906 | - |
Post-Employment Benefits - equity in subsidiaries (a) | 9,523 | - |
Post-Employment Benefits - equity in jointly controlled (a) | (7,313) | (7,313) |
Realization of equity evaluation adjustm ents: | ||
Cost assigned | - | (38,570) |
Taxes on making adjustments | - | 12,697 |
Deemed cost of property - equity in subsidiary (a) | (24,647) | - |
Deemed cost of property - equity in jointly controlled (a) | (1,226) | - |
Other adjustm ents: | ||
Other adjustments - subsidiaries (a) | (1,282) | (2,777) |
Taxes on other adjustments | - | 945 |
Attributable to non-controlling interest | - | 550 |
Balance as of March 31, 2014 | 949,261 | 949,261 |
(*) Equity in the parent company, net of taxes |
29.1.3 Basic and diluted earnings per share
Parent Company | 03.31.2014 | 03.31.2013 |
Basic and diluted numerator | ||
Basic and diluted net income per share category, attributableto parent company | ||
Common shares | 271,602 | 198,360 |
Class "A" preferred shares | 786 | 574 |
Class "B" preferred shares | 264,179 | 192,938 |
536,567 | 391,872 | |
Basic and diluted denominator | ||
Weighted average number of shares (in thousands) | ||
Common shares | 145,031,080 | 145,031,080 |
Class "A" preferred shares | 381,550 | 381,778 |
Class "B" preferred shares | 128,242,745 | 128,242,517 |
273,655,375 | 273,655,375 | |
Basic and diluted earning per share attributable to Parent Company | ||
Common shares | 1.87272 | 1.36771 |
Class "A" preferred shares | 2.06002 | 1.50349 |
Class "B" preferred shares | 2.05999 | 1.50448 |
59
29.2 Change in equity attributable to non-controlling interest
Percentage of share capital | Compagás: 49% | Elejor: 30% | UEG Araucária: 20% | Consolidated |
Balance as of January 1, 2014 | 115,457 | 21,606 | 140,350 | 277,413 |
Equity valuation adjustment | - | (550) | - | (550) |
Results for the period | 15,799 | 3,989 | 26,695 | 46,483 |
Balance as of March 31, 2014 | 131,256 | 25,045 | 167,045 | 323,346 |
30 Operating Revenues
Consolidated | Gross | PIS/Pasep | Regulatory | Service tax | Net revenues | |
revenues | & Cofins taxes | ICMS (VAT) | charges (30.5) | (ISSQN ) | 03.31.2014 | |
Electricity sales to final customers (30.1) | 1,406,712 | (122,981) | (350,752) | (10,269) | - | 922,710 |
Electricity sales to distributors (30.2) | 1,233,559 | (104,104) | - | (21,529) | - | 1,107,926 |
Charges for the use of the main transmission grid (30.3) | 899,221 | (84,604) | (223,854) | (32,839) | - | 557,924 |
Construction revenues | 289,848 | - | - | - | - | 289,848 |
Revenues from telecommunications | 50,887 | (2,427) | (9,113) | - | (95) | 39,252 |
Distribution of piped gas | 102,712 | (9,431) | (12,420) | - | - | 80,861 |
Other operating revenues (30.4) | 66,593 | (13,684) | - | - | (358) | 52,551 |
4,049,532 | (337,231) | (596,139) | (64,637) | (453) | 3,051,072 | |
Consolidated | Gross | PIS/Pasep | Regulatory | Service tax | Net revenues | |
revenues | & Cofins taxes | ICMS (VAT) | charges (30.5) | (ISSQN ) | 03.31.2013 | |
Electricity sales to final customers (30.1) | 1,196,350 | (105,641) | (309,659) | (9,855) | - | 771,195 |
Electricity sales to distributors (30.2) | 804,457 | (57,254) | - | (22,436) | - | 724,767 |
Charges for the use of the main transmission grid (30.3) | 875,913 | (83,498) | (232,891) | (46,524) | - | 513,000 |
Construction revenues | 181,191 | - | - | - | - | 181,191 |
Revenues from telecommunications | 43,257 | (2,303) | (8,072) | - | (180) | 32,702 |
Distribution of piped gas | 100,691 | (9,252) | (12,218) | - | - | 79,221 |
Other operating revenues (30.4) | 92,487 | (13,807) | - | - | (346) | 78,334 |
3,294,346 | (271,755) | (562,840) | (78,815) | (526) | 2,380,410 |
30.1 Electric sales to final customers by category
Consolidated | Gross income | Net income | ||
03.31.2014 | 03.31.2013 | 03.31.2014 | 03.31.2013 | |
Residential | 463,397 | 373,496 | 309,491 | 243,479 |
Industrial | 485,801 | 437,195 | 314,187 | 278,477 |
Commercial, services and other activities | 304,054 | 257,019 | 186,849 | 155,779 |
Rural | 62,877 | 51,833 | 53,829 | 44,083 |
Public agencies | 31,286 | 26,313 | 22,075 | 18,390 |
Public lighting | 26,606 | 22,050 | 16,140 | 13,654 |
Public services | 32,691 | 28,444 | 20,139 | 17,333 |
1,406,712 | 1,196,350 | 922,710 | 771,195 |
30.2 Eletric Sales to distributors
Consolidated | Gross income | |
03.31.2014 | 03.31.2013 | |
Electric Energy Trading Chamber - CCEE | 750,928 | 403,766 |
Bilateral contracts | 302,143 | 204,174 |
Agreements for Pow er Trade on the Regulated Market - CCEAR (auction) | 180,488 | 196,517 |
1,233,559 | 804,457 |
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30.3 Use of the main transmission grid
Consolidated | Gross income | Net income | ||
03.31.2014 | 03.31.2013 | 03.31.2014 | 03.31.2013 | |
Residential | 338,736 | 326,386 | 198,048 | 182,700 |
Industrial | 160,201 | 158,828 | 92,409 | 80,788 |
Commercial, services and other activities | 215,853 | 206,906 | 127,015 | 116,576 |
Rural | 51,423 | 48,935 | 42,199 | 39,361 |
Public agencies | 24,749 | 23,991 | 16,609 | 15,530 |
Public lighting | 22,004 | 21,873 | 13,067 | 12,458 |
Public services | 15,935 | 16,263 | 9,329 | 9,021 |
Free consumers | 33,666 | 41,820 | 29,244 | 35,828 |
Basic Netw ork, BN connections, and connection grid | 255 | 369 | 222 | 317 |
Operation and maintenance (O&M) revenues | 24,054 | 22,665 | 18,999 | 14,292 |
Effective interest revenues | 12,345 | 7,877 | 10,783 | 6,129 |
899,221 | 875,913 | 557,924 | 513,000 |
30.4 Other operating revenues
Consolidated | Gross income | |
03.31.2014 | 03.31.2013 | |
Leases and rents (Note 30.4.1) | 30,484 | 55,330 |
Reimbursement for unavailability of energy | 24,856 | 21,115 |
Revenues from services | 8,615 | 13,451 |
Charged service | 1,818 | 2,216 |
Other revenues | 820 | 375 |
66,593 | 92,487 | |
30.4.1Revenue from leases and rentals | ||
Consolidated | 03.31.2014 | 03.31.2013 |
Equipment and facilities | 20,996 | 18,072 |
Araucária Thermal Pow er Plant (a) | 8,898 | 36,896 |
Facilities sharing | 483 | 217 |
Real estate | 107 | 145 |
30,484 | 55,330 |
The Company has not identified any operating lease receivables which are non cancellable.
a) TPP Araucária
In December 2006, UEG Araucária entered into an agreement for the lease of a power plant with Petróleo Brasileiro S.A. - Petrobras, which in turn entered into an operations and maintenance agreement with our subsidiary, Copel Geração e Transmissão, whereby the latter operated and maintained the power plant. Both agreements expired on January 31, 2014. Therefore, as from February 1, 2014, UEG Araucária is responsible for selling the electricity produced by TPP Araucária. This electricity is not sold under long-term agreements, but distributed in the spot market, as established by the National Electric System Operator (ONS).
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30.5 Regulatory Charges
Consolidated | 03.31.2014 | 03.31.2013 |
Research and Development and Energy Efficiency Programs - R&D and EEP | 27,194 | 21,798 |
Energy Development Account (CDE) | 25,098 | 20,984 |
Global Reversal Reserve (RGR) | 12,345 | 18,225 |
Fuel Consumptuon Account (CCC) | - | 17,808 |
64,637 | 78,815 |
31 Operating Costs and Expenses
Costs of | General and | Other | |||
goods and/or | Sales | administrative | rev. (exp.), | Consolidated | |
services | expenses | expenses | net | 03.31.2014 | |
Electricity purchased for resale (31.1) | (982,310) | - | - | - | (982,310) |
Use of main distribution and transmission grid (31.2) | (130,577) | - | - | - | (130,577) |
Personnel and management (31.3) | (164,521) | (2,496) | (51,807) | - | (218,824) |
Pension and healthcare plans (23) | (39,550) | (347) | (9,520) | - | (49,417) |
Materials and supplies | (16,453) | (88) | (1,645) | - | (18,186) |
Materials and supplies for pow er | (4,928) | - | - | - | (4,928) |
Natural gas and supplies for the gas business | (314,758) | - | - | - | (314,758) |
Third-party services (31.4) | (64,156) | (10,983) | (16,646) | - | (91,785) |
Depreciation and amortization | (141,074) | (7) | (12,703) | (188) | (153,972) |
Accruals and provisions (31.5) | - | (14,617) | - | (46,417) | (61,034) |
Construction cost (31.6) | (298,281) | - | - | - | (298,281) |
Other costs and expenses (31.7) | (3,364) | 1,240 | (20,567) | (54,989) | (77,680) |
(2,159,972) | (27,298) | (112,888) | (101,594) | (2,401,752) | |
Costs of | General and | Other | |||
goods and/or | Sales | administrative | rev. (exp.), | Consolidated | |
services | expenses | expenses | net | 03.31.2013 | |
Electricity purchased for resale (31.1) | (841,702) | - | - | - | (841,702) |
Use of main distribution and transmission grid (31.2) | (152,077) | - | - | - | (152,077) |
Personnel and management (31.3) | (189,226) | (2,233) | (50,040) | - | (241,499) |
Pension and healthcare plans (23) | (32,508) | (268) | (9,358) | - | (42,134) |
Materials and supplies | (15,969) | (119) | (1,792) | - | (17,880) |
Materials and supplies for pow er | (4,261) | - | - | - | (4,261) |
Natural gas and supplies for the gas business | (62,311) | - | - | - | (62,311) |
Third-party services (31.4) | (72,900) | (9,883) | (8,604) | - | (91,387) |
Depreciation and amortization | (133,586) | (12) | (13,053) | (190) | (146,841) |
Accruals and provisions (31.5) | - | (13,099) | - | (6,437) | (19,536) |
Construction cost (31.6) | (194,798) | - | - | - | (194,798) |
Other costs and expenses (31.7) | (7,243) | 1,546 | (20,510) | (41,318) | (67,525) |
(1,706,581) | (24,068) | (103,357) | (47,945) | (1,881,951) |
General and | Other | ||
Nature of costs and expenses | administrative | rev. (exp.), | Parent Company |
expenses | net | 03.31.2014 | |
Personnel and management (31.3) | (22,368) | - | (22,368) |
Pension and healthcare plans (23) | (2,480) | - | (2,480) |
Materials and supplies | (41) | - | (41) |
Third-party services | (717) | - | (717) |
Depreciation and amortization | - | (188) | (188) |
Accruals and provisions (31.5) | - | (372) | (372) |
Other operating expenses | (1,326) | 73 | (1,253) |
(26,932) | (487) | (27,419) |
62
General and | Other | ||
Nature of costs and expenses | administrative | rev. (exp.), | Parent Company |
expenses | net | 03.31.2013 | |
Personnel and management (31.3) | (2,136) | - | (2,136) |
Pension and healthcare plans (23) | (115) | - | (115) |
Third-party services | (586) | - | (586) |
Depreciation and amortization | - | (190) | (190) |
Accruals and provisions (31.5) | - | 22,988 | 22,988 |
Other operating expenses | (2,485) | 169 | (2,316) |
(5,322) | 22,967 | 17,645 |
31.1 Electricity purchased for resale
Consolidated | 03.31.2014 | 03.31.2013 |
Electric Energy Trading Chamber - CCEE | 995,843 | 249,418 |
(-) Transfer CDE and ACR Account - Decrees 8,221/2014 and 7,945/2013 | (831,771) | (93,605) |
Contracts for the Sale of Energy in the Regulated Environment - CCEAR | 620,303 | 532,505 |
Itaipu Binational | 182,265 | 131,734 |
Bilateral contracts | 60,162 | 57,058 |
Program for incentive to alternative energy sources - Proinfa | 46,000 | 41,673 |
(-) PIS/Pasep/Cofins taxes on electricity purchased for resale | (90,492) | (77,081) |
982,310 | 841,702 | |
31.2 Charges for use of transmission grid | ||
Consolidated | 03.31.2014 | 03.31.2013 |
System Service Charges - ESS | 20,135 | 174,248 |
(-) Transfer CDE - ESS - Decree 7,945 / 2013 | - | (118,958) |
System usage charges distribution | 65,137 | 54,960 |
System usage charges basic netw ork and connection | 44,111 | 41,810 |
Itaipu transportation charges | 14,920 | 12,402 |
Charge reserve energy - EER | - | 3,159 |
(-) PIS/Pasep/Cofins taxes on charges for use of pow er grid | (13,726) | (15,544) |
130,577 | 152,077 |
31.3 Personnel and Management Expenses
. | Parent Company | Consolidated | ||
03.31.2014 | 03.31.2013 | 03.31.2014 | 03.31.2013 | |
Personnel | ||||
Wages and salaries | 13,378 | - | 134,115 | 157,791 |
Social charges on payroll | 4,952 | - | 46,896 | 53,376 |
Provisions for profit sharing (31.3.1) | 938 | - | 13,605 | 7,971 |
Meal assistance and education allow ance | 1,486 | - | 19,563 | 20,915 |
Compensation - Voluntary termination Program/retirement | - | - | 727 | (1,706) |
20,754 | - | 214,906 | 238,347 | |
Managem ent | ||||
Wages and salaries | 1,142 | 1,502 | 2,981 | 2,318 |
Social charges on payroll | 293 | 607 | 734 | 796 |
Other expenses | 179 | 27 | 203 | 38 |
1,614 | 2,136 | 3,918 | 3,152 | |
22,368 | 2,136 | 218,824 | 241,499 |
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31.4 Third-party services
Consolidated | 03.31.2014 | 03.31.2013 |
Maintenance of facilities | 22,431 | 17,358 |
Maintenance of electrical system | 15,635 | 22,058 |
Communication, processing and transmission of data | 13,288 | 12,448 |
Authorized and registered agents | 9,139 | 8,365 |
Meter reading and bill delivery | 8,688 | 9,668 |
Consulting and audit | 3,942 | 4,740 |
(-) PIS/Pasep/Cofins taxes on services from third-parties | (902) | (1,310) |
Other services | 19,564 | 18,060 |
91,785 | 91,387 |
31.5 Accruals and provisions
Parent Company | Consolidated | |||
03.31.2014 | 03.31.2013 | 03.31.2014 | 03.31.2013 | |
Provisions for doubtful accounts | - | - | 14,617 | 13,100 |
Provisions (reversals) for losses on taxes recoverable | - | - | 220 | (533) |
Reserve (reversals) for risks | ||||
Tax | 76 | (6,661) | 603 | (6,287) |
Labor | - | - | 8,264 | 10,295 |
Employee benefits | - | - | 8,404 | - |
Civil | 296 | (16,327) | 28,152 | 2,934 |
Environmental | - | - | 9 | 11 |
Regulatory | - | - | 765 | 16 |
372 | (22,988) | 46,197 | 6,969 | |
372 | (22,988) | 61,034 | 19,536 |
31.6 Construction cost
Consolidated | 03.31.2014 | 03.31.2013 |
Materials and supplies | 166,040 | 92,946 |
Third-party services | 91,885 | 74,206 |
Personnel and management | 29,590 | 18,716 |
Other | 10,766 | 8,930 |
298,281 | 194,798 |
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31.7 Other costs and expenses
Consolidated | 03.31.2014 | 03.31.2013 |
Financial compensation for use of w ater resources | 35,001 | 26,867 |
Losses in the decommissioning and disposal of assets | 12,433 | 3,761 |
Taxes | 8,894 | 7,283 |
Leases and rents (31.7.1) | 7,632 | 7,745 |
ANEEL inspection fee | 5,169 | 5,721 |
Indemnities | 2,729 | 6,800 |
Advertising | 2,696 | 3,635 |
Sports incentives, Rouanet Law and fund for the rights of children and teenagers - FIA | 61 | 1,096 |
Recovery of costs and expenses | (8,078) | (8,589) |
Other costs and expenses, net | 11,143 | 13,206 |
77,680 | 67,525 | |
31.7.1Costs and expenses of leases and rents | ||
Consolidated | 03.31.2014 | 03.31.2013 |
Real estate | 6,309 | 6,805 |
Photocopiers | 166 | 174 |
Others | 1,516 | 1,221 |
(-) Pis and Cofins tax credits | (359) | (455) |
7,632 | 7,745 |
The Company has not identified any operating lease commitments which are non cancellable.
32 Financial Results
Parent Company | Consolidated | |||
03.31.2014 | 03.31.2013 | 03.31.2014 | 03.31.2013 | |
Financial income | ||||
Monetary variation of CRC transfer (Note 8) | 57,844 | - | 57,844 | 32,881 |
Monetary variation of accounts receivable related to the concession | - | - | 53,370 | 16,843 |
Penalties on overdue bills | - | - | 40,413 | 26,433 |
Return on financial investments held for trading | 96 | 228 | 37,001 | 20,550 |
Monetary variation of accounts receivable related to the concession extension (Note 10) | - | - | 18,677 | 32,049 |
Return on financial investments held for sale | 4 | 2 | 5,119 | 11,921 |
Return on financial investments held until maturity | - | - | - | 207 |
Interest and commissions on loan agreements | - | 20,753 | - | - |
Other financial income | 5,797 | 999 | 12,587 | 5,149 |
63,741 | 21,982 | 225,011 | 146,033 | |
(-) Financial expenses | ||||
Debt charges | 25,616 | 17,404 | 71,794 | 48,118 |
Monetary variation of accounts payable related to the concession - use of public property (26.1) | - | - | 22,987 | 14,877 |
Interest on R&D and EEP (Note 25) | - | - | 4,871 | 3,068 |
Monetary and exchange variations | 219 | 3 | 4,887 | 1,922 |
PIS/Pasep/Cofins taxes on interest on capital | 6 | - | 6 | - |
Other financial expenses | 11 | 10 | 9,499 | 4,149 |
25,852 | 17,417 | 114,044 | 72,134 | |
Net | 37,889 | 4,565 | 110,967 | 73,899 |
65
The costs of loans and financing capitalized during the year of 2014 amounted to R$ 54,936, at an average rate of 3.27% p.y.
33 Operating Segment
33.1 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 first ended March 31, 2014 all sales were made within Brazilian territory.
We have not identified any customer who individually accounts for more than 10% of total net revenues during the three-month period ended March 31, 2014.
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.
33.2 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. This segment operates through Copel Geração e Transmissão, Elejor, UEG Araucária, Nova Asa Branca I, Nova Asa Branca II, Nova Asa Branca III, Nova Eurus IV, Santa Maria, Santa Helena, Ventos de Santo Uriel and Cutia Empreendimentos Eólicos;
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. It operates through Copel Distribuição;
Telecommunications (TEL) - this segment comprises telecommunications and general communications services. It operates through Copel Telecomunicações;
Gas - this segment comprises the public service of piped natural gas distribution. It operates through Compagás; and
Holding Company- this segment comprises participation in other companies. It operates through Copel, Copel Participações and Copel Renováveis.
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33.3 Assets per reporting segment
ASSETS | |||||||
03.31.2014 | GET | DIS | TEL | GÁS | HOL | Eliminations | Consolidated |
ASSETS | 12,775,816 | 8,442,282 | 490,377 | 547,211 | 14,731,460 | (12,552,942) | 24,434,204 |
CURRENT ASSETS | 2,910,076 | 2,624,747 | 55,553 | 299,488 | 222,952 | (521,071) | 5,591,745 |
Cash and cash equivalents | 1,188,373 | 116,155 | 7,646 | 44,701 | 27,817 | - | 1,384,692 |
Bonds and securities | 211,859 | 7,463 | - | - | 145 | - | 219,467 |
Collaterals and escrow accounts | - | 5 | - | 562 | - | - | 567 |
Trade accounts receivable | 893,465 | 1,095,456 | 25,686 | 209,653 | - | (217,139) | 2,007,121 |
Dividends receivable | 2,578 | - | - | - | 80,361 | (67,911) | 15,028 |
CRC tranferred to State Government of Paraná | - | - | - | - | 87,447 | - | 87,447 |
Accounts receivable related to the concession | 4,726 | - | - | - | - | - | 4,726 |
Accounts receivable related to the concession extension | 352,161 | - | - | - | - | - | 352,161 |
Other receivables | 185,951 | 953,972 | 3,804 | 1,184 | 9,764 | (593) | 1,154,082 |
Inventories | 29,295 | 94,777 | 7,775 | 1,150 | - | - | 132,997 |
Income tax and social contribution | 5,545 | 47,802 | 6,071 | - | 17,418 | - | 76,836 |
Other current recoverable taxes | 33,603 | 57,961 | 4,366 | 41,826 | - | - | 137,756 |
Prepaid expenses | 2,519 | 15,729 | 205 | 412 | - | - | 18,865 |
Receivable from other related parties | 1 | 235,427 | - | - | - | (235,428) | - |
NONCURRENT ASSETS | 9,865,740 | 5,817,535 | 434,824 | 247,723 | 14,508,508 | (12,031,871) | 18,842,459 |
Long term assets | 958,407 | 4,520,961 | 41,064 | 15,119 | 1,910,735 | (65,803) | 7,380,483 |
Bonds and securities | 70,183 | 42,303 | - | - | - | - | 112,486 |
Collaterals and escrow accounts | - | 43,829 | - | - | - | - | 43,829 |
Trade accounts receivable | 5,218 | 124,957 | 15,181 | - | - | - | 145,356 |
CRC tranferred to State Government of Paraná | - | - | - | - | 1,307,932 | - | 1,307,932 |
Judicial deposits | 44,292 | 366,275 | 4,614 | 245 | 273,228 | - | 688,654 |
Accounts receivable related to the concession | 465,030 | 3,233,261 | - | - | - | - | 3,698,291 |
Accounts receivable related to the concession extension | 277,605 | - | - | - | - | - | 277,605 |
Advances to suppliers | - | - | - | 14,051 | - | - | 14,051 |
Other noncurrent receivables | 5,935 | 9,120 | - | 626 | 37 | - | 15,718 |
Income tax and social contribution | 526 | 13,183 | - | - | 171,178 | - | 184,887 |
Other noncurrent recoverable taxes | 54,202 | 66,059 | 4,998 | - | - | - | 125,259 |
Deferred Income tax and social contribution | 32,717 | 621,974 | 16,271 | - | 95,054 | - | 766,016 |
Prepaid expenses | 202 | - | - | 197 | - | - | 399 |
Receivable from other related parties | 2,497 | - | - | - | 63,306 | (65,803) | - |
Investm ents | 938,958 | 4,012 | - | - | 12,567,017 | (12,267,090) | 1,242,897 |
Property, plant and equipm ent, net | 7,710,219 | - | 379,308 | - | 33 | - | 8,089,560 |
Intangible assets | 258,156 | 1,292,562 | 14,452 | 232,604 | 30,723 | 301,022 | 2,129,519 |
67
33.4 Liabilities per reporting segment
LIABILITIES | |||||||
03.31.2014 | GET | DIS | TEL | GÁS | HOL | Eliminations | Consolidated |
TOTAL LIABILITIES | 12,775,816 | 8,442,282 | 490,377 | 547,211 | 14,731,460 | (12,552,942) | 24,434,204 |
CURRENT LIABILITIES | 1,259,802 | 2,198,307 | 52,799 | 244,711 | 572,037 | (523,841) | 3,803,815 |
Payroll, social charges and accruals | 43,291 | 149,006 | 11,608 | 5,946 | 23,888 | - | 233,739 |
Payable from other related parties | 1 | - | - | - | 235,427 | (235,428) | - |
Suppliers | 504,984 | 1,397,876 | 9,198 | 220,486 | 1,211 | (217,619) | 1,916,136 |
Income tax and social contribution | 185,773 | 609 | 2,866 | 9,441 | 1,999 | - | 200,688 |
Other taxes | 52,300 | 179,883 | 3,741 | 1,221 | 1 | (109) | 237,037 |
Loans and financing | 232,496 | 177,578 | 5,726 | - | 280,592 | (2,774) | 693,618 |
Debentures | 40,490 | 43,851 | - | - | - | - | 84,341 |
Dividends payable | 60,226 | - | 14,604 | 5,598 | 3,005 | (67,911) | 15,522 |
Post-employment benefits | 8,263 | 22,311 | 1,106 | - | 2 | - | 31,682 |
Regulatory charges | 17,687 | 16,442 | - | - | - | - | 34,129 |
Research and Development and Energy Efficiency | 25,508 | 105,217 | - | - | - | - | 130,725 |
Accounts payable related to concession - use of public property | 52,099 | - | - | - | - | - | 52,099 |
Other accounts payable | 36,684 | 105,534 | 3,950 | 2,019 | 25,912 | - | 174,099 |
NON CURRENT LIABILITIES | 3,286,170 | 2,886,918 | 69,478 | 34,632 | 979,497 | (129,168) | 7,127,527 |
Associated and subsidiary companies | 68,636 | - | - | - | - | (68,636) | - |
Suppliers | 22,188 | 22,716 | - | - | - | - | 44,904 |
Other taxes | 16,116 | 54,096 | 3,079 | - | 324 | - | 73,615 |
Deferred income tax and social contribution | 380,177 | - | - | 1,712 | - | - | 381,889 |
Loans and financing | 1,286,996 | 642,986 | 31,604 | - | 684,283 | (60,532) | 2,585,337 |
Debentures | 141,946 | 998,531 | - | 29,644 | - | - | 1,170,121 |
Post-employment benefits | 292,673 | 610,950 | 30,535 | 2,499 | 16,671 | - | 953,328 |
Research and Development and Energy Efficiency | 60,205 | 112,562 | - | - | - | - | 172,767 |
Accounts payable related to concession - use of public property | 431,403 | - | - | - | - | - | 431,403 |
Other accounts payable | 230 | - | - | - | - | - | 230 |
Provisions for contingences | 585,600 | 445,077 | 4,260 | 777 | 278,219 | - | 1,313,933 |
EQUITY | 8,229,844 | 3,357,057 | 368,100 | 267,868 | 13,179,926 | (11,899,933) | 13,502,862 |
Attributable to controlling interest | 8,229,844 | 3,357,057 | 368,100 | 267,868 | 13,179,926 | (12,223,279) | 13,179,516 |
Capital | 4,330,945 | 2,624,841 | 240,398 | 135,943 | 6,913,019 | (7,335,146) | 6,910,000 |
Equity valuation adjustments | 1,119,503 | (150,149) | (4,940) | - | 949,261 | (964,414) | 949,261 |
Legal reserve | 301,729 | 135,294 | 9,093 | 18,220 | 624,849 | (464,336) | 624,849 |
Profit retention reserve | 1,728,483 | 761,646 | 109,243 | 77,987 | 3,897,833 | (2,680,835) | 3,894,357 |
Unrealized income reserve | - | - | - | 3,476 | - | - | 3,476 |
Proposed additional dividend | 153,180 | - | - | - | 235,498 | (153,180) | 235,498 |
Accumulated income (losses) | 596,004 | (14,575) | 14,306 | 32,242 | 559,466 | (625,368) | 562,075 |
Attributable to non controlling interest | 323,346 | 323,346 |
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33.5 Statement of income per reporting segment
STATEMENT OF INCOME | |||||||
03.31.2014 | GET | DIS | TEL | GÁS | HOL | Eliminations | Consolidated |
Gross profit | 1,377,645 | 1,639,732 | 48,363 | 389,142 | - | (403,810) | 3,051,072 |
Electricity sales to final customers - third-parties | 109,407 | 813,303 | - | - | - | - | 922,710 |
Electricity sales to final customers - betw een segments | - | 539 | - | - | - | (539) | - |
Electricity sales to distributors - third-parties | 1,081,707 | 26,219 | - | - | - | - | 1,107,926 |
Electricity sales to distributors - between segments | 71,911 | - | - | - | - | (71,911) | - |
Use of the power grid - third-parties | 29,783 | 528,141 | - | - | - | - | 557,924 |
Use of the power grid - between segments | 15,878 | 3,181 | - | - | - | (19,059) | - |
Construction revenues | 49,527 | 230,916 | - | 9,405 | - | - | 289,848 |
Telecommunications services to third-parties | - | - | 39,252 | - | - | - | 39,252 |
Telecommunications services between segments | - | - | 7,538 | - | - | (7,538) | - |
Distribution of piped gas - third-parties | - | - | - | 80,861 | - | - | 80,861 |
Distribution of piped gas - between segments | - | - | - | 296,966 | - | (296,966) | - |
Other operating revenues from third-parties | 12,784 | 37,321 | 536 | 1,910 | - | - | 52,551 |
Other operating revenues between segments | 6,648 | 112 | 1,037 | - | - | (7,797) | - |
Operational expenses | (692,878) | (1,714,849) | (27,949) | (340,718) | (29,166) | 403,808 | (2,401,752) |
Electricity purchased for resale | (19,071) | (1,035,148) | - | - | - | 71,909 | (982,310) |
Charges for the use of the powergrid | (58,281) | (90,924) | - | - | - | 18,628 | (130,577) |
Personnel and management | (47,654) | (130,850) | (10,324) | (6,070) | (23,926) | - | (218,824) |
Pension and healthcare plans | (12,942) | (31,285) | (2,066) | (480) | (2,644) | - | (49,417) |
Materials and supplies | (4,887) | (12,742) | (287) | (228) | (42) | - | (18,186) |
Raw materials and supplies for generation | (301,894) | - | - | - | - | 296,966 | (4,928) |
Natural gas and supplies for gas business | - | - | - | (314,758) | - | - | (314,758) |
Third party services | (36,237) | (62,592) | (4,287) | (4,266) | (733) | 16,330 | (91,785) |
Depreciation and amortization | (88,564) | (54,399) | (6,793) | (4,028) | (188) | - | (153,972) |
Provisions and reversals | (21,705) | (37,917) | (1,151) | 111 | (372) | - | (61,034) |
Construction cost | (57,960) | (230,916) | - | (9,405) | - | - | (298,281) |
Other operating costs and expenses | (43,683) | (28,076) | (3,041) | (1,594) | (1,261) | (25) | (77,680) |
EQUITY IN RESULTS SUBSIDIARIES | 89,712 | - | - | - | 529,186 | (563,629) | 55,269 |
PROFIT BEFORE INCOME TAX AND SOCIAL CONTRIBUTION | 774,479 | (75,117) | 20,414 | 48,424 | 500,020 | (563,631) | 704,589 |
Financial income (expenses) | 15,373 | 55,825 | 1,241 | 637 | 37,891 | - | 110,967 |
OPERATING INCOME (LOSSES) | 789,852 | (19,292) | 21,655 | 49,061 | 537,911 | (563,631) | 815,556 |
Income tax and social contribution | (253,180) | (2,549) | (8,137) | (17,182) | (2,023) | - | (283,071) |
Deferred income tax and social contribution | 43,214 | 7,266 | 788 | 363 | (1,066) | - | 50,565 |
NET INCOME (LOSSES) FOR THE PERIOD | 579,886 | (14,575) | 14,306 | 32,242 | 534,822 | (563,631) | 583,050 |
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34 Financial Instruments
34.1 Category and value of financial instruments
Consolidated | 03.31.2014 | 12.31.2013 | ||||
Note | Level | Book value | Fair value | Book value | Fair value | |
Financial assets | ||||||
Held for trading | ||||||
Cash and cash equivalent (a) | 4 | 1 | 1,384,692 | 1,384,692 | 1,741,632 | 1,741,632 |
Bonds and securities (b) | 5 | 1 | 70,729 | 70,729 | 159,340 | 159,340 |
Bonds and securities (b) | 5 | 2 | 23,509 | 23,509 | 79,187 | 79,187 |
Bonds and securities - derivatives (b) | 5 | 1 | 18 | 18 | - | - |
1,478,948 | 1,478,948 | 1,980,159 | 1,980,159 | |||
Loans and receivables | ||||||
Collaterals and escrow accounts STN (c) | 6 | 43,829 | 31,927 | 45,371 | 32,415 | |
Collaterals and escrow accounts (a) | 6 | 567 | 567 | 1,976 | 1,976 | |
Trade accounts receivable (a) | 7 | 2,152,477 | 2,152,477 | 1,470,314 | 1,470,314 | |
CRC transferred to state of Paraná (d) | 8 | 1,395,379 | 1,415,027 | 1,380,554 | 1,369,599 | |
Receivables related to concession (e) | 9 | 469,756 | 469,756 | 412,869 | 412,869 | |
Receivables related to the concession extension (f) | 10 | 469,549 | 475,773 | 557,589 | 563,052 | |
4,531,557 | 4,545,527 | 3,868,673 | 3,850,225 | |||
Available for sale | ||||||
Receivables related to concession (g) | 9 | 3 | 3,233,261 | 3,233,261 | 3,075,795 | 3,075,795 |
Receivables related to the concession extension (h) | 10 | 3 | 160,217 | 160,217 | 160,217 | 160,217 |
Bonds and securities (b) | 5 | 1 | 149,618 | 149,618 | 196,112 | 196,112 |
Bonds and securities (b) | 5 | 2 | 76,653 | 76,653 | 63,978 | 63,978 |
Other investments (i) | 16.2 | 1 | 27,454 | 27,454 | 25,708 | 25,708 |
3,647,203 | 3,647,203 | 3,521,810 | 3,521,810 | |||
Held to maturity | ||||||
Bonds and securities (b) | 5 | 11,426 | 11,426 | 11,141 | 11,141 | |
11,426 | 11,426 | 11,141 | 11,141 | |||
Financial assets total | 9,669,134 | 9,683,104 | 9,381,783 | 9,363,335 | ||
Financial liabilities | ||||||
Fair value through profit or loss | ||||||
Other liabilities - derivatives (b) | 1 | - | - | 85 | 85 | |
- | - | 85 | 85 | |||
Other financial liabilities | ||||||
Suppliers (a) | 20 | 1,961,040 | 1,961,040 | 1,142,360 | 1,142,360 | |
Loans and financing (c) | 21 | 3,278,955 | 2,869,713 | 3,323,784 | 2,922,867 | |
Debentures (j) | 22 | 1,254,462 | 1,254,462 | 1,207,945 | 1,207,945 | |
Payable related to concession - use of public property (k) | 26 | 483,502 | 584,185 | 471,774 | 578,409 | |
6,977,959 | 6,669,400 | 6,145,863 | 5,851,581 | |||
Financial liabilities total | 6,977,959 | 6,669,400 | 6,145,948 | 5,851,666 | ||
The different levels have been defined as follow s: | ||||||
Level1: obtained from prices quoted (not adjusted) on active markets for identical assets or liabilities | ||||||
Level2: obtained from other variables other than prices quoted included in level 1, w hich can be observed for assets or liabilities | ||||||
Level3: obtained through evaluation techniques that include variables for the asset or liability, but 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.
c) Calculated based on the cost of the last issue by the Company, of the CDI variation plus 107.8% p.y.
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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 6.35% p.y. plus the IPCA inflation index.
e) Criteria and assumptions disclosed on note 3.7.2 of December 31, 2013.
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 3.7.2 of December 31, 2013. The changes held in the first quarter of 2014 are as follows:
Consolidated | |
Balance as of January 1, 2014 | 3.075.795 |
Transfers from intangible assets in progress | 113.348 |
Monetary variation | 53.371 |
Write off | (9.253) |
Balance as of March 31, 2014 | 3.233.261 |
h) These accounts receivable are related to assets existing as of May 31, 2000, equivalent to their book values, due to the fact that 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 March 31, 2014, obtained from the National Association of Financial Market Institutions (Anbima), net of the financial cost of R$ 1,042.
k) Used the rate of 7.74% p.y. as a market reference.
34.2 Risk Factors
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:
34.2.1 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 | 03.31.2014 | 12.31.2013 |
Cash and cash equivalents (a) | 1,384,692 | 1,741,632 |
Bonds and securities (a) | 331,953 | 509,758 |
Collaterals and escrow accounts (a) | 44,396 | 47,347 |
Trade accounts receivable (b) | 2,152,477 | 1,470,314 |
CRC transferred to the State Government of Paraná (c) | 1,395,379 | 1,380,554 |
Accounts receivable related to the concession (d) | 3,703,017 | 3,488,664 |
Accounts receivable related to the concession extension (e) | 469,549 | 557,589 |
Accounts receivable related to the concession extension (f) | 160,217 | 160,217 |
9,641,680 | 9,356,075 |
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 guarantees whenever possible.
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) 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.
e) 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 and has been received on schedule.
f) 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 an going survey of information required by the granting authority.
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34.2.2 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 to 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 2014, 2013 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 m onth | 1 to 5 | More than | |
Liabilities | 1 m onth | m onth | to 1 year | years | 5 years | Total | |
03.31.2014 | |||||||
Loans and financing | Note 21 | 30,791 | 179,506 | 656,099 | 2,033,167 | 1,569,074 | 4,468,637 |
Debentures | Note 22 | 52,782 | 10,233 | 104,482 | 1,490,216 | - | 1,657,713 |
Payables related to concession - | Rate of return + | ||||||
use of public asset | IGP-M and IPCA | 4,282 | 8,565 | 40,975 | 252,692 | 2,121,731 | 2,428,245 |
Eletrobrás - Itaipu | Dolar | - | 128,959 | 586,403 | 3,403,643 | 5,517,175 | 9,636,180 |
Petrobras - Compagás | 100% of CDI | 5,424 | 10,948 | 34,417 | - | - | 50,789 |
Other suppliers | - | 1,493,501 | 267,662 | 97,699 | 62,802 | - | 1,921,664 |
Post employment benefits | 8.05% | 43,145 | 86,289 | 388,302 | 2,785,404 | 12,492,581 | 15,795,721 |
Purchase liabilities | IGP-M and IPCA | - | 602,551 | 2,702,921 | 11,531,215 | 80,155,836 | 94,992,523 |
1,629,925 | 1,294,713 | 4,611,298 | 21,559,139 | 101,856,397 | 130,951,472 | ||
12.31.2013 | |||||||
Loans and financing | Note 21 | 44,546 | 312,844 | 773,467 | 1,853,937 | 1,488,871 | 4,473,665 |
Debentures | NE nº 22 | 5,182 | 10,324 | 160,669 | 1,499,400 | - | 1,675,575 |
Derivative | DI Futuro | 85 | - | - | - | - | 85 |
Payables related to concession - | Tx. Retorno + | ||||||
use of public asset | IGP-M e IPCA | 4,282 | 8,564 | 39,272 | 246,196 | 2,103,155 | 2,401,469 |
Eletrobrás - Itaipu | Dólar | - | 124,286 | 575,224 | 3,606,457 | 5,517,175 | 9,823,142 |
Petrobras - Compagas | 100% do CDI | 5,295 | 10,738 | 51,243 | - | - | 67,276 |
Other suppliers | - | 645,392 | 144,718 | 196,518 | 92,271 | - | 1,078,899 |
Post employment benefits | 8.05% | 43,145 | 86,289 | 388,302 | 2,785,404 | 12,492,581 | 15,795,721 |
Purchase liabilities | IGP-M e IPCA | - | 605,310 | 2,818,490 | 12,216,247 | 80,198,892 | 95,838,939 |
747,927 | 1,303,073 | 5,003,185 | 22,299,912 | 101,800,674 | 131,154,771 | ||
(a) Effective interest rate - w eighted average |
As disclosed in notes 21.11 and 22.2, 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 5.2) and cash (note 6).
34.2.3 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.
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 variation resulting from the purchase of gas from Petrobras by Compagas has a direct impact on the Company's results; Compagas continually negotiates with its customers, trying whenever possible to pass these costs on to them.
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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 March 31, 2014 and the likely scenario takes into account the balances subject to the exchange rate variations – end of period (R$/US$ 2.45) estimated as market average projections for 2014 according to the Focus Report issued by the Brazilian Central Bank as of April 25, 2014. 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.2014 | ||||
Foreign currency risks | Risk | 03.31.2014 | Probable | Adverse | Rem ote |
Financial assets | |||||
Collaterals and escrow accounts - STN | USD depreciation | 43,829 | 3,622 | (8,241) | (20,104) |
43,829 | 3,622 | (8,241) | (20,104) | ||
Financial liabilities | |||||
Loans and financing | |||||
STN | USD appreciation | (63,306) | (5,231) | (22,366) | (39,500) |
Eletrobrás | USD appreciation | (7) | (1) | (2) | (4) |
(63,313) | (5,232) | (22,368) | (39,504) | ||
Suppliers | |||||
Eletrobrás (Itaipu) | USD appreciation | (120,992) | (9,998) | (42,746) | (75,493) |
Petrobras (acquisiton of gas by Compagás) | USD appreciation | (214,170) | (17,698) | (75,665) | (133,631) |
(335,162) | (27,696) | (118,411) | (209,124) |
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 March 31, 2014, 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.
a) 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 (34.2.3-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.
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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.
The baseline takes into account the existing balances in each account as of March 31, 2014 and the likely scenario takes into account the indicators (CDI/Selic of 11.25%, IPCA of 6.50%, IGP-DI of 7.34%, IGP-M of 7.20% and TJLP of 5.00%) estimated as market average projections for 2014 according to the Focus Report issued by the Brazilian Central Bank as of April 25, 2014. 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.2014 | ||||
Interest rate and monetary variation risk | Risk | 03.31.2014 | Probable | Adverse | Remote |
Financial assets | |||||
Financial investments - cash equivalents | Low CDI/SELIC | 1,315,208 | 111,203 | 83,710 | 55,947 |
Bonds and securities | Low CDI/SELIC | 331,953 | 28,067 | 21,127 | 14,121 |
Collaterals and escrow accounts | Low CDI/SELIC | 567 | 48 | 36 | 24 |
CRC transferred to the State Government of Paraná | Low IGP-DI | 1,395,379 | 62,306 | 37,387 | 12,467 |
Accounts receivable related to the concession | Low IGP-M | 3,703,017 | 168,051 | 103,052 | 38,053 |
Accounts receivable related to the concession extension - RBNI | Low IPCA | 469,549 | 19,875 | 12,407 | 4,939 |
Accounts receivable related to the concession extension | Undefined (a) | 160,217 | - | - | - |
7,375,890 | 389,550 | 257,719 | 125,551 | ||
Financial liabilities | |||||
Loans and financing | |||||
Banco do Brasil | High CDI | (1,566,395) | (130,388) | (162,460) | (194,334) |
Eletrobrás - Finel | High IGP-M | (75,366) | (698) | (968) | (1,238) |
Eletrobrás - RGR | No Risk (b) | (92,425) | - | - | - |
Finep | High TJLP | (38,600) | (1,439) | (1,796) | (2,152) |
BNDES - Copel Geração e Transmissão | High TJLP | (1,131,017) | (42,153) | (52,613) | (63,041) |
Banco do Brasil Transfer BNDES funds | High TJLP | (157,721) | (5,878) | (7,337) | (8,791) |
Banco do Brasil | High CDI | (154,118) | (12,829) | (15,984) | (19,121) |
Debentures | High CDI | (1,254,462) | (104,422) | (130,107) | (155,634) |
(4,470,104) | (297,807) | (371,265) | (444,311) | ||
(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 March 31, 2014, 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) Derivative financial instruments risk
The Company employs derivative financial instruments with the sole purpose of protecting itself against variable interest rate volatility.
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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 period ended March 31, 2014, the result of operations with derivative financial instruments on the futures market was a gain of R$ 210 (R$ 1,987 on March 2013);
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 March 31, 2014 corresponded to R$ 33,989 (R$ 109,792 as of December 31, 2013);
iii) On March 31, 2014, a share of the Company’s federal bonds in the amount of R$ 4,810 (R$ 6,712 as of December 31, 2013), 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 02, 2015.
Baseline | Projected scenarios - Dec.2014 | ||||
Risk of derivative | Risk | 03.31.2014 | Probable | Adverse | Remote |
Financial assets (liabilities) | |||||
Derivative assets | Decrease in DI rate | 18 | (245) | (957) | (1,673) |
18 | (245) | (957) | (1,673) | ||
Expected effect in the result | (263) | (975) | (1,691) |
34.2.4 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.
According to the Annual Plan for Electricity Operation - PEN 2013, published annually on the website:www.ons.org.br, probability assessments of energy service conditions, based on energy deficit risks for the Benchmarking Scenario show the appropriateness of the supply criteria set by the National Energy Policy Council - CNPE (deficit risk not higher than 5%) for all subsystems within the period from 2013 to 2017. Deficit risks reach maximum levels 3.0% in the Southern subsystem and 2.5% in the Southeastern/Center Western system and lower than 1.0% in theNorthern and Northeastern subsystems within the whole assessment period.
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Although the 2013 Energy Plan does not show deficit risks above 5% and federal government's official sources state that there is no risk of rationing, low reservoir levels have kept the difference settlement price - PLD in the maximum amount allowed in the Southern and Southeastern regions since the beginning of February 2014. This may indicate that the system is operating very close to the risk of 5% of deficit or that this level has already been reached or exceeded.
34.2.5 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.
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 Usina 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. By the end of the concession agreement, these power plants will be put up for auction, and the Company has no guarantee that it will be the winning bidder.
Rio dos Patos in turn finished the agreement in February 2014. However, the Company will remain responsible for providing the power plant services until the concessionaire that has won the bidding assumes the enterprise. No date has yet been set for this takeover to happen. In this period, the Company will receive a pre-set fee to render this service, pursuant to Ordinance 578/2012 issued by the Ministry of Mines and Energy.
Concession Agreement number 060/2001, which sets rules about transmission facilities, 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.
For the distribution services, the Company has issued a favorable opinion on the extension of Concession Agreement number 046/1999, pursuant to Law 12,783/2013 The Company is waiting for the decision by the Concession Authority on the extension. If the conditions set by the Concession Authority ensure the Company's expected profitability levels, the Company will sign the concession agreement or amendment for an additional period of 30 years. Even considering that the regulatory overall scene is uncertain, the Company believes on the possibility of the concession amendment, although it does not have sufficient information to guarantee that the contract for thedistribution services will be renewed on favorable terms.
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Copel Geração e Transm issão | |
Concessions/authorizations contracts | Maturity date |
Hydroelectric Power Plants | |
Generation Concession - 045/1999 | |
Governador Bento Munhoz da Rocha Netto (Foz do Areia) | 05.23.2023 |
Governador Ney Aminthas de Barros Braga (Segredo) | 11.15.2029 |
Governador José Richa (Caxias) | 05.04.2030 |
Governador Pedro Viriato Parigot de Souza (a) (b) | 07.07.2015 |
Guaricana | 08.16.2026 |
Mourão (a) (b) | 07.07.2015 |
Marumbi (c) | - |
São Jorge | 12.03.2024 |
Rio dos Patos (a) (b) (g) | 02.14.2014 |
Melissa (d) | - |
Salto do Vau (d) | - |
Pitangui (d) | - |
Generation Concession - Use of Public Property - 007/2013 | |
Chaminé (e) | 08.16.2026 |
Apucaraninha (e) | 10.12.2025 |
Derivação do Rio Jordão (e) | 11.15.2029 |
Chopim I (a) (b) (e) | 07.07.2015 |
Cavernoso (e) | 01.07.2031 |
Generation Concession - 001/2007 - Mauá - 51% of Copel | 07.02.2042 |
Generation Concession - 001/2011 - Colíder (f) | 01.16.2046 |
Authorization - Cavernoso II (f) | 02.27.2046 |
Therm al Pow er Plant | |
Generation Concession - 045/1999 - Figueira | 03.26.2019 |
Authorizathion - 351/1999 - TTP Araucária (60% da Copel GeT e 20% da Copel) | 12.22.2029 |
Wind Pow er Plant | |
Authorization - Palmas | 09.28.2029 |
(a) Plant not renew ed pursuant to Executive Act 579/2012 - Concessionaire's prerogative | |
(b) By the end of the concession the project w ill be offered for competitive bidding | |
(c) In progress for homologation from ANEEL | |
(d) At plants w ith capacity of less than 1 MW, only register w ith ANEEL | |
(e) Pow er plants that underw ent change in the exploration system from a Public Service regime to anIndependent Producer Regime | |
(f) Enterprise under construction | |
(g) The Company w ill remain responsible for providing the pow er plant services until the concessionaire that has w onthe bidding assumes the enterprise. No date has yet been set for this takeover to happen. | |
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Copel Geração e Transmissão | ||
Concessions Contracts | Maturity date | |
Transm ission Lines and Substations | ||
Contract 060/01 - Transmission facilities (a) | 12.05.2042 | |
Contract 075/01 - Transmission line Bateias - Jaguariaíva | 08.16.2031 | |
Contract 006/08 - Transmission line Bateias - Pilarzinho | 03.16.2038 | |
Contract 027/09 - Transmission line Foz do Iguaçu - Cascavel Oeste | 11.18.2039 | |
Contract 010/10 - Transmission line Araraquara 2 - Taubaté (b) | 10.05.2040 | |
Contract 015/10 - Substation Cerquilho III (b) | 10.05.2040 | |
Contract 001/12 - Transmission line Cascavel Oeste - Umuarama - 51% Copel GeT (b) | 01.11.2042 | |
Contract 004/12 - Transmission line Nova Santa Rita - Camaquã 3 - 20% Copel GeT (b) | 05.09.2042 | |
Contract 007/12 - Transmission line Umuarama - Guaira - 49% Copel GeT (b) | 05.09.2042 | |
Contract 008/12 - Transmission line Curitiba - Curitiba Leste - 80% Copel GeT (b) | 05.09.2042 | |
Contract 011/12 - Transmission line Açailândia - Miranda II - 49% Copel GeT (b) | 05.09.2042 | |
Contract 012/12 - Transmission line Paranaíta - Ribeirãozinho - 49% Copel GeT (b) | 05.09.2042 | |
Contract 013/12 - Transmission line Ribeirãozinho - Marimbondo II - 49% Copel GeT (b) | 05.09.2042 | |
Contract 022/12 - Transmission line - Foz do Chopim - Salto Osorio C2 (b) | 08.26.2042 | |
Contract 002/13 - Transmission line - Assis - Paraguaçu Paulista II (b) | 02.24.2043 | |
Contract 007/13 - Transmission line - Barreiras II - Pirapora 2 - 24.5% Copel GeT (b) | 05.01.2043 | |
Contract 005/14 - Transmission line - Bateias - Curitiba Norte (b) | 01.28.2044 | |
(a) | Concession renew ed pursuant to Executive Act 579/2012 | |
(b) | Enterprise under construction |
Copel | |
Concessions/authorizations Contracts | Maturity date |
Copel Distribuição -Contract 046/99 - Distribution Facilities (a) | 07.07.2015 |
Elejor- Contract 125/2001 - HPP Fundão e Santa Clara | 24.10.2036 |
Elejor- Authorization contract - SHP Fundão I and SHP Santa Clara I - 753/2002 and 757/2002 | 18.12.2032 |
Dona Francisca Energética- Contract 188/1998 - HPP Dona Francisca | 27.08.2033 |
Foz do Chopim- authorization contract - SHP Foz do Chopim - 114/2000 | 23.04.2030 |
Com pagás- concession gas distribution contract | 06.07.2024 |
Wind Pow er Plant | |
Authorization - Asa Branca I (b) | 25.04.2046 |
Authorization - Asa Branca II (b) | 31.05.2046 |
Authorization - Asa Branca III (b) | 31.05.2046 |
Authorization - Eurus IV (b) | 27.04.2046 |
Authorization - Santa Maria (b) | 08.05.2047 |
Authorization - Santa Helena (b) | 09.04.2047 |
Authorization - Ventos de Santo Uriel (b) | 09.04.2047 |
(a) Sent on May 31, 2012 requesting extension of concession and sent on October 11, 2012 ratification of the requestingextension of concession (PM 579/2012) | |
(b) Enterprise under construction | |
(c) Enterprise w ithout authorization | |
(d) Member of Cutia Wind Complex acquired on March 11, 2014 |
34.2.6 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 Compagas and UEG Araucária.
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34.3 Management of capital
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.
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 | |||
Debt | 03.31.2014 | 12.31.2013 | 03.31.2014 | 12.31.2013 |
Loans and financing | 964,875 | 1,019,553 | 3,278,955 | 3,323,784 |
Debentures | - | - | 1,254,462 | 1,207,945 |
(-) Cash and cash equivalents | 25,835 | 10,410 | 1,384,692 | 1,741,632 |
(-) Bonds and securities | 145 | 186 | 219,467 | 389,222 |
Net indebtedness | 938,895 | 1,008,957 | 2,929,258 | 2,400,875 |
Shareholder's | 13,179,516 | 12,651,339 | 13,502,862 | 12,928,752 |
Net indebtedness ratio | 0.07 | 0.08 | 0.22 | 0.19 |
35 Related Party Transactions
The balances of transactions between the Company and its associates and subsidiaries are shown in Note 8, Note 15 and Note 16.
The amounts resulting from the operating activities of Copel Distribuição involving related parties are billed at the rates approved by ANEEL.
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Consolidated | Assets | Liabilities | Results | |||
Related parties / Nature of operation | 03.31.2014 | 12.31.2013 | 03.31.2014 | 12.31.2013 | 03.31.2014 | 03.31.2013 |
Controlling shareholders | ||||||
State of Paraná | ||||||
"Luz Fraterna" program (a) | 81,863 | 78,987 | - | - | - | - |
CRC (Note 8) | 1,395,379 | 1,380,554 | - | - | 57,844 | 32,881 |
ICMS (Note 13.3) | 159,845 | 115,439 | 186,544 | 184,369 | - | - |
Remuneration and employ social security charges assigned (b) | 338 | 266 | - | - | - | - |
Entities w ith significant influence | ||||||
BNDES e BNDESPAR (c) | ||||||
Financing (Note 21.5) | - | - | 1,131,017 | 1,125,109 | (17,999) | (3,295) |
Petrobras (d) | ||||||
Rental plant TTP Araucária (30.4.1 - a) | - | 6,499 | - | - | 8,898 | 36,896 |
Supply and transport of gas (e) | 434 | 374 | - | - | 4,480 | 7,632 |
Acquisition of gas for resale (e) | - | - | 214,170 | 51,502 | (314,731) | (62,221) |
Advances to suppliers of Compagás (f) | 14,051 | 13,504 | - | - | - | - |
Dividends payable by Compagás | - | - | 1,076 | 1,076 | - | - |
Mitsui Gás e Energia do Brasil Ltda. (g) | - | - | 2,283 | 2,283 | - | - |
Paineira Participações S.A. (h) | - | - | 9,158 | 11,985 | - | - |
Jointly-controlled | ||||||
Marum bi Transm issora de Energia (i) | 184 | 184 | - | - | 551 | 521 |
Caiuá Transm issora de Energia (j) | 295 | 221 | - | - | 74 | 269 |
Associates | ||||||
Dona Francisca Energética S.A. (k) | - | - | 6,320 | 6,320 | (18,356) | (16,442) |
Foz do Chopim Energética Ltda. (l) | 144 | 201 | - | - | 431 | 405 |
Sercom tel S.A. Telecom unicações (m ) | 203 | 192 | - | - | 597 | 562 |
Key m anagement personnel | ||||||
Fees and related charges (Note 31.3) | - | - | - | - | (3,918) | (3,152) |
Pension plans and health care (Note 23) | - | - | - | - | (248) | (137) |
Other related parties | ||||||
Fundação Copel | ||||||
Rental of administrative real estate | - | - | - | - | (2,939) | (2,761) |
Private pension and health plans (Note 23) | - | - | 985,010 | 967,232 | - | - |
Lactec (n) | 26,780 | 27,229 | 716 | 587 | (414) | (2,538) |
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.
b) Reimbursement of wages and social charges for employees transferred to the Paraná State Government. The Company recognized an impairment allowance in the amount of R$ 1,286 as of March 31, 2014 and R$ 1,614 as of December 31, 2013.
c) 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).
d) Petrobras holds 20% of the share capital of UEG Araucária and 24.5% of the share capital of Compagás.
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e) The supply and transport of piped gas and the purchase of gas for resale by Compagás
f) Advance payments to suppliers of Compagás refer to the gas purchase contract covering guaranteed volumes and transport capacity, higher than those actually consumed and used, which contains a future compensation clause. Compagás has the right to receive unused gas in subsequent months, and it may offset amounts under contract but not consumed over a period of up to 10 years. In light of the prospects of increased consumption by the market, Compagás management believes it will consume the accumulated gas volumes as of March 31, 2014 in the next fiscal years.
g) Mitsui Gás e Energia do Brasil Ltda. holds 24.5% of Compagás’ share capital. The balances refer to dividends payable by Compagás.
h) Paineira Participações S.A. holds 30% of Elejor share capital. The balances refer to dividends payable by Elejor.
i) Engineeringservices agreement, signed with Copel Geração e Transmissão, expiring on September 30, 2015.
j) Specific environmental management services agreement, signed with Copel Geração e Transmissão, expiring on March 14, 2015.
k) Power purchase and sale agreement signed by Dona Francisca Energética and Copel Geração e Transmissão, expiring on March 31, 2015.
l) Operation and maintenance services agreement, signed between Foz do Chopim Energética Ltda. and Copel Geração e Transmissão, expiring on May 24, 2015.
m) Light pole sharing agreement, signed between Sercomtel S.A Telecomunicações and Copel Distribuição, expiring on December 28, 2018.
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
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.
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35.1 Guarantees and endorsements awarded to related parties
35.1.1 Granted by Parent Company
The Parent Company granted the following guarantees and endorsements:
a) endorsements for loans secured by its subsidiaries Nova Asa Branca I, Nova Asa Branca II, Nova Asa Branca III, Nova Eurus, Santa Maria, Santa Helena and Ventos de Santo Uriel, pursuant to Note 21.7.
b) bank guarantee for the equity interest of 70% in the debentures issued by the subsidiary Elejor on September 26, 2013, pursuant to Note 22.
c) endorsements for its equity interest of 23.03% to its associated company Dona Francisca Energética S.A., in 2002, in financing secured from the BNDES (joint endorsement) and Bradesco (joint endorsement), for settlement by 2015. As of March 31, 2014 the restated outstanding balances amounted to R$ 7,793 with BNDES and R$ 4,502 with Bradesco.
35.1.2 Granted to jointly controlled entities
Ventures | Date | Final | Amount | Total | Balance as of | |
joint subsidiaries | Financing | issued | Maturity | approved | issued | March 31, 2014 |
Transmissora Sul Brasileira (a) | Promissory notes | 20.12.2013 | 15.07.2028 | 266,572 | 260,145 | 201,642 |
Caiuá Transmissora (b) | Promissory notes | 19.03.2014 | 15.02.2029 | 84,600 | 79,600 | 79,765 |
Integração Maranhense (c) | Promissory notes | 19.03.2014 | 15.02.2029 | 142,150 | 131,400 | 131,659 |
Matrinchã Transmissora (d) | Debentures | 20.06.2013 | 20.12.2014 | 800,000 | 540,000 | 581,570 |
Guaraciaba Transmissora (e) | Debentures | 20.06.2013 | 20.12.2014 | 400,000 | 370,000 | 398,483 |
Costa Oeste (f) | Promissory notes | 15.01.2014 | 15.11.2028 | 36,720 | 20,000 | 20,207 |
Financier: | ||||||
BNDES: (a) (b) (c) (f) | ||||||
HSBC Corretora de Títulos e Valores Mobiliários S.A. e Banco Santander (Brasil) S.A.: (d) (e) | ||||||
Allocation: | ||||||
Bridge loan" for financing operation to be secured from BNDES (a) | ||||||
Working capital: (b) (c) (d) (e) | ||||||
Endorsement/Security: | ||||||
20% of the debt limit given by Copel: (a) | ||||||
49% of the debt limit given by Copel Geração e Transmissão: (d) (e) | ||||||
51% of the debt limit given by Copel Geração e Transmissão: (f) | ||||||
49% of the letter of guarantee amount, as jointly- liable endorser, Copel Geração e Transmissão: (b) (c) | ||||||
Securities offered for the transaction: | ||||||
Lien on shares given by Copel Geração e Transmissão, corresponding to 20%: (a) | ||||||
Lien on shares of Copel Geração e Transmissão, corresponding to 49%: (b) |
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36 Insurance
Details by risk type and effectiveness date of the main policies can be seen below.
Consolidated | Consolidated | |
Policy | Policy | Insured |
Specified risks | 08.24.2014 | 1,727,388 |
Fire - Company-ow ned and rented facilities | 08.24.2014 | 521,633 |
Civil liability - Copel | 08.24.2014 | 12,000 |
Civil liability - Compagas | 10.29.2014 | 3,600 |
Engineering risks - Copel | 08.24.2014 | dependant on each event |
Domestic and international transport - export and import | 08.24.2014 | dependant on each event |
Multi-risk - Compagas | 12.18.2014 | 13,300 |
Multi-risk - Elejor | 04.11.2015 | 395,099 |
Vehicles | 08.20.2014 | market value |
Miscellaneous risks | 08.24.2014 | 810 |
Operational risks - Elejor | 06.06.2014 | 500 |
Operational risks - UEG Araucária (a) | 05.31.2015 | 816,279 |
Court guarantee - Compagás | 02.03.2015 | 56,938 |
Performance bond - Copel | 07.14.2014 | 12,500 |
Performance bond - Copel | 07.30.2015 | 44,319 |
Performance bond - Copel | 12.27.2014 | 1,850 |
Operational risks - HPP Mauá - Consórcio Energético Cruzeiro do Sul | 11.23.2014 | 342,139 |
Liability for directors and administrators - D&O | 06.30.2014 | 56,575 |
Performance bond - w ind farm | 05.02.2014 | 22,200 |
Performance bond - w ind farm | 10.02.2014 | 11,100 |
Performance bond - w ind farm | 06.30.2015 | 3,047 |
Performance bond - w ind farm | 03.31.2015 | 6,000 |
(a) The values of the sums insured Operational Risk - UEG Araucaria and liability for directors and officershave been converted to real U.S. dollars w ith the rate of the day 03.31.2014, R$ 2.2630. | ||
37 Regulatory Assets and Liabilities
As a result of adopting IFRS, the Company no longer recognizes regulatory assets and liabilities, and unrecognized the existing balances.
These assets and liabilities continue to be recognized in the regulatory records, introduced by ANEEL Normative Resolution 396.
The Compensation Account for Variations in Items from “Part A” - CVA accompanies the variations reported between the amounts homologated for tariff adjustments, and the amounts actually incurred during the tariff period, from the following cost components of “Part A”: Purchase of electric power (Bilateral, Itaipu and Auctions), Energy Transmission Cost (Transmission from Itaipu and the Basic Grid) and Sector Charges (Energy Development Account - CDE; System Service Charges - ESS and Incentive Program for Alternative Energy Sources – Proinfa, Research and Development and Energy Efficiency, and others).
ANEEL authorized Copel Distribuição, through Homologatory Resolution1,541, of June 20, 2013, to adjust its supply tariffs as from June 24, 2013, by an average rate of13.08%, with11.40% that refers to the tariff adjustment index and1.68% for the pertinent financial components, of which,CVA, represents a total of R$21,967, consisting of 2 parts: CVA being processed, for the tariff year 2012-2013, for the amount of R$15,780, and the balance to compensate for CVA from prior years for the amount of R$6,187.After the withdrawal of regulatory assets (CVA) granted in the previous year and deferring partial adjustment, the effect of this adjustment was an average decrease of 9.55% in customer tariffs, asHomologatory Resolution1,565, of July 09, 2013.
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If the regulatory assets and liabilities had been recognized, the Company would have reported the following balances in its financial statements:
37.1 Composition of balances for regulatory assets and liabilities
Consolidated | Current Assets | Noncurrent Assets | ||
03.31.2014 | 12.31.2013 | 03.31.2014 | 12.31.2013 | |
CVA recoverable tariff adjustment 2013 | ||||
CCC | 1,889 | 3,779 | - | - |
Charges for use of transmission system (basic grid) | 459 | 917 | - | - |
Electricity purchased for resale (Itaipu) | 3 | 5 | - | - |
Proinfa | 2,767 | 5,534 | - | - |
Electricity purchased for resale (CVA Energ) | 2,307 | 4,614 | - | - |
Other financial components | 22,573 | 45,146 | - | - |
29,998 | 59,995 | - | - | |
CVA recoverable tariff adjustment 2014 | ||||
Charges for use of transmission system (basic grid) | 47,736 | 18,587 | 15,912 | 18,587 |
CDE | 3,865 | - | 1,288 | - |
Proinfa | 288 | 154 | 96 | 154 |
Electricity purchased for resale (CVA Energ) | 289,178 | 71,335 | 96,393 | 71,335 |
Other financial components | 269,134 | 137,728 | 89,712 | 137,728 |
610,201 | 227,804 | 203,401 | 227,804 | |
640,199 | 287,799 | 203,401 | 227,804 | |
Consolidated | Current Liabilities | Noncurrent Liabilities | ||
03.31.2014 | 12.31.2013 | 03.31.2014 | 12.31.2013 | |
CVA com pensable tariff adjustm ent 2013 | ||||
ESS | 342 | 684 | - | - |
CDE | 1,426 | 2,851 | - | - |
Transport of energy purchased (Itaipu) | 331 | 661 | - | - |
Other financial components | 1,307 | 2,616 | - | - |
3,406 | 6,812 | - | - | |
CVA com pensable tariff adjustm ent 2014 | ||||
Energy purchased for resale (Itaipu) | 2,896 | 3,753 | 965 | 3,753 |
ESS | 98,459 | 39,610 | 32,820 | 39,610 |
CDE | - | 87 | - | 87 |
Transport of energy purchased (Itaipu) | 38 | 20 | 13 | 20 |
Other financial components | 8,992 | 1,804 | 2,997 | 1,804 |
110,385 | 45,274 | 36,795 | 45,274 | |
CVA com pensable tariff adjustm ent 2015 | ||||
Other financial components | - | - | 9,487 | - |
- | - | 9,487 | - | |
113,791 | 52,086 | 46,282 | 45,274 |
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37.2 Changes in assets and liabilities
Balance as of | Balance as of | |||||
January 01, 2014 | Differ. | Amortiz. | Correction | Transf. | March 31, 2014 | |
Assets | ||||||
CCC | 3,779 | - | (1,974) | 84 | - | 1,889 |
Charges for use of transmission system (basic grid) | 38,091 | 23,509 | (502) | 3,009 | - | 64,107 |
Energy purchased for resale (Itaipu) | 5 | - | (2) | - | - | 3 |
CDE | - | 5,153 | - | - | - | 5,153 |
Proinfa | 5,842 | 75 | (2,886) | 120 | - | 3,151 |
Energy purchased for resale (CVA Energ) | 147,284 | 230,195 | (2,307) | 12,706 | - | 387,878 |
Other financial components | 320,602 | 74,940 | (22,573) | 8,450 | - | 381,419 |
515,603 | 333,872 | (30,244) | 24,369 | - | 843,600 | |
Current | 287,799 | 228,767 | (30,244) | 16,514 | 137,363 | 640,199 |
Noncurrent | 227,804 | 105,105 | - | 7,855 | (137,363) | 203,401 |
Liabilities | ||||||
Energy purchased for resale (Itaipu) | 7,506 | (3,472) | - | (173) | - | 3,861 |
ESS | 79,904 | 46,983 | (342) | 5,076 | - | 131,621 |
CDE | 3,025 | (173) | (1,492) | 66 | - | 1,426 |
Transport of energy purchased (Itaipu) | 701 | 11 | (345) | 15 | - | 382 |
Other financial components | 6,224 | 17,623 | (1,308) | 244 | - | 22,783 |
97,360 | 60,972 | (3,487) | 5,228 | - | 160,073 | |
Current | 52,086 | 38,898 | (3,487) | 4,066 | 22,228 | 113,791 |
Noncurrent | 45,274 | 22,074 | - | 1,162 | (22,228) | 46,282 |
38 Provisional Measure no. 627/13
There was no change in information disclosed in the financial statements of December 31, 2013.
39 Subsequent Events
39.1 Purchase of energy - 13th auction of existing energy (Auction "A")
At the 13th auction of existing energy held on April 30, 2014, Copel Distribuição purchased an average of 388.2 MW under the CCEARs, at an average price of R$ 268.33/MWh. The supply agreements start in May 2014 and mature in December 2019. They will be adjusted for inflation using the IPCA (Extended Consumer Price Index).
39.2 Transmission Auction in January 2014
On May 9, 2014, Copel Geração e Transmissão (49%), in a partnership with Elecnor (51%), acquired the right to build and operate 328 km of transmission lines (500 kV) between the states of Minas Gerais and São Paulo, consisting of Estreito – Fernão Dias Transmission Line, double circuit, starting in Estreito Substation and ending in Fernão Dias Substation. The enterprise's allowed annual revenue will total R$ 76,935. The lines will start their business operations in 42 months after the agreement is signed.The concessionagreementis valid for 30 years from the date of signature.
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Moreover, Copel Geração e Transmissão (100%) acquired batch M, consisting of 120 km of transmission lines (500 kV) to be built between the states of Paraná and São Paulo, consisting of Assis – Londrina Transmission Line, simple circuit, second circuit, starting in Assis Substation and ending in Londrina substation. The enterprise's allowed annual revenue will total R$ 14,987. The lines will start their business operations in 36 months after the agreement is signed. The concession agreement is valid for 30 years from the date of signature.
At the same auction, Copel Geração e Transmissão (100%) also acquired the right to build and operate 53 km of transmission lines (230 kV) and one substation in Paraná, consisting of Foz do Chopim – Realeza Transmission Line, of 230 kV, simple circuit, starting in Foz do Chopim and ending in Realeza substation; of Realeza substation, of 230/138 kV, 1 x 150 MVA, transformation connections, line inlets, lathe beds, related installations and other installations necessary for measurement, supervision, protection, command, control, telecommunications, management and support. The enterprise's allowed annual revenue will be R$ 5,745, and operations are to start within 30 months from the date the agreement is signed. The concession agreement is valid for 30 years from the date of signature.
39.3 Change in the interest held by Dominó Holdings and acquisition of Sanepar's shares
On March 28, 2014, according to the event approved by the Extraordinary Shareholders' Meeting held by Dominó Holdings, Copel became the owner of 36,343,267 preferred shares in Companhia de Saneamento do Paraná - Sanepar, which is equivalent to 14.86% of preferred shares and 7.63% of total capital.
Moreover, Dominó Holdings underwent a corporate restructuring, leading to the increase in Copel's stake to 49%.
Considering Copel's shareholding interest through Dominó Holdings, Copel remained with the same 13.58% interest in Sanepar's total capital, because the increase in the number of preferred shares was offset by a reduction in the number of common shares held through Dominó Holdings, which decreased its number of common shares held in Sanepar by converting part of these shares into preferred shares.
The transaction was completed in April 2014.
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COMMENTS ON PERFORMANCE FOR THE PERIOD
for the three-month periods ended March 31, 2014
(Amounts expressed in thousands of reais, except when stated otherwise)
1 Distribution Lines
Compact Grids -Copel has implemented compact networks in urban areas with significant urban forestry close to the distribution grids. This technology avoids having to prune and cut trees and improves the quality of the supply, since it reduces the number of disconnections. At the end of March 2014, the extension of the compact grids installed was 5,467 km (4,335 km at March 2013), the extension of the compact grids installed was 1,132 km in 12 months, a variation of 26.1%.
Isolated Secondary Grid -Copel is also investing in secondary isolated grids for low voltage (127/220 V), which provide significant advantages compared to the conventional aerial grid, such as: improvement in the DEC and FEC indices, increased difficulty for electric energy stealing, improvement in the environmental conditions and reduction to the pruned area, increased safety, reduction to the drops in voltage throughout the network, and increased useful life of the transformers from the decrease in the number of short circuits in the network, amongst others. By the end of March 2014, the extent of the installed secondary isolated distribution grids was 10,946 km (9,335 km in March 2013), representing an increase of 1,611 km in the previous 12 months, variation of 17.3%.
2 Energy Market
Market behavior - The energy generated by Copel during the first three months of 2014 was 6,139 GWh (4,898 GWh in the same period for 2013). The energy purchased from CCEAR (auctions) was 3,361 GWh (4,381 GWh in the same period for 2013) and from Itaipu it was 1,447 GWh (1,257 GWh in the same period for 2013), as demonstrated in the following flow chart:
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CCEAR= Contracts for sale of Energy on Regulated Environment
CCEE(MCP)= Electric Pow er Trade Chamber (Short term market)
MRE= Mechanism for rellocation of energy
CG = Center of gravity of submarket (difference betw een energy contracted and received in CG -established in the contract).
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Sale of energy (MWh) - The following table presents total energy sales by Copel between Copel Distribuição and Copel Geração e Transmissão:
Class | In MWh | ||
January to | January to | Variation | |
March 2014 | March 2013 | ||
Copel Distribuição | |||
Captive market | 6,184 | 5,776 | 7.1% |
Residential | 1,923 | 1,726 | 11.4% |
Industrial | 1,585 | 1,602 | -1.1% |
Commercial | 1,447 | 1,324 | 9.3% |
Rural | 639 | 572 | 11.7% |
Others | 590 | 552 | 6.9% |
Concessionaries and permission holder (a) | 168 | 157 | 7.0% |
CCEE (MCP) (b) | - | - | - |
Total da Copel Distribuição | 6,352 | 5,933 | 7.1% |
Copel Geração e Transmissão | |||
CCEAR (Copel Distribuição) (c) | 103 | 231 | -55.4% |
CCEAR (other concessionaries)(c) | 1,240 | 1,684 | -26.4% |
Free customers | 1,047 | 1,009 | 3.8% |
Bi-lateral contracts | 1,993 | 1,400 | 42.4% |
CCEE(MCP) | 494 | 1,789 | - |
Total of Copel Geração e Transmissão | 4,877 | 6,113 | -20.2% |
Total | 11,229 | 12,046 | -6.8% |
P.S. Does not include energy available througt MRE (Mechanism for reallocation of energy) | |||
(a) Include the 46 GWh Dealer CFLO consumed in the months of February and March | |||
(b) CCEE(MCP): Electric Pow er Trade Chamber (Short term market) | |||
(c) CCEAR: Contracts for sale of Energy on Regulated Environment |
Captive market of Copel Distribuição – The captive market increased 7.1% and was responsible for the consumption of 6,184 GWh between January and March.
The residential segment consumed 1,923 GWh, up 11.5%, due mainly to the 4.1% increase in the number of consumers and increase in the average consumption in the period as a result of an increase in average temperature and favorable income and employment level. At the end of March 2014, this segment accounted for 31.1% of Copel’s captive market, totaling 3,354,777 residential customers.
Consumption in the industrial segment dropped 1.0%, totaling 1,585 GWh in 1Q14. This result was mainly brought by the migration of large industrial customers to the free marketand the lower number of working days over the same period last year. At the close of the period, the industrial segment represented 25.6% of Copel’s captive market, with a total of 92,978 industrial customers.
The commercial class consumed 1,447 GWh which represents an increase of 9.2% over the same period last year, mainly impacted by high level temperatures recorded in the period and expansion of the segment. At the end of March 2014, this segment represented 23.4% of Copel’s captive market, with a total of 342,723 customers.
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The rural segment consumed 639 GWh and grew 11.8%, due to the strong performance of the agribusiness sector in Paraná and the increase in average temperature at the period. At the end of March 2014, this segment represented 10.3% of Copel’s captive market, with a total of 373,136 rural customers.
The other segments (public agencies, public lighting, public services and own consumption) consumed 590 GWh, up 6.8% for the period. Taken together, these segments represented 9.5% of Copel’s captive market, totaling 56,297 customers at the end of the period.
Number of consumers - The number of end customers (captive from Copel Distribuição plus free customers from Copel Geração e Transmissão) billed in March 2014 was 4,219,939, representing an increase of 3.7% compared to the same month in 2013.
Class | March 2014 | March 2013 | Variation |
Residential | 3,354,777 | 3,223,968 | 4.1% |
Industrial | 92,978 | 88,533 | 5.0% |
Commercial | 342,723 | 330,281 | 3.8% |
Rural | 373,136 | 372,888 | 0.1% |
Others | 56,297 | 54,569 | 3.2% |
Total Captive | 4,219,911 | 4,070,239 | 3.7% |
Free customers - Copel Geração e Transmissão | 28 | 29 | -3.4% |
Total | 4,219,939 | 4,070,268 | 3.7% |
3 Administration
Number of employees
Employees | March 2014 | March 2013 |
Owned subsidiaries | ||
Copel (Holding) | 611 | - |
Copel Geração e Transmissão | 1,512 | 1,818 |
Copel Distribuição | 6,087 | 7,163 |
Copel Telecomunicações | 389 | 455 |
Copel Participações | 10 | - |
Copel Renováveis | 9 | - |
8,618 | 9,436 | |
Subsidiaries | ||
Compagás | 154 | 138 |
Elejor | 7 | 8 |
UEG Araucária | 12 | 10 |
173 | 156 |
4 Market relations
From January to March 2014, the nominative ordinary shares (ON - code CPLE3) and the nominative preference shares class B (PNB - code CPLE6) of Copel were present on 100% of the floors of the Stock, Futures and Commodities Exchange, (BM&FBOVESPA).
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The shares for trading amounted 45% of the Company’s capital. At the end of March 2014, the market value of Copel, considering quotations from all of the markets, was R$ 6,989,655.
Of the 73 securities that comprise the theoretical portfolio of Ibovespa, the PNB shares in Copel participated with 0.37% and with a Beta index of 0.67.
In the IEE portfolio (Index for the Energy Sector), Copel participated with 6.89%.
Copel’s participation in the Business Sustainability Index BM&FBOVESPA (ISE) was 0.90%.
On the BM&FBOVESPA, the ordinary shares closed the quarter quoted at R$ 21.79 and the preference shares at R$ 29.81, recording negative variations de 2.3% and 2.4%, respectively. During the same period the IBOVESPA reported a negative variation of 2.1%.
On the New York Stock Exchange (NYSE), the preference shares are traded at “Level 3” in the form of ADS’s, under the code ELP, which were present on 100% of the floors, closing the period quoted at US$ 13.11 with a negative variation of 0.2% compared to December 31, 2013. During the same period the DOW JONES index reported a negative variation of 0,7%.
On the LATIBEX (Latin American Exchange Market in Euros) tied to the Madrid Stock Exchange, the Company’s PNB shares are traded under the code XCOP, and were present on 97% of the floors, closing the quarter quoted at € 9.56 representing a variation of 0.6% compared to December 31, 2013. During the same period the LATIBEX All Shares reported a negative variation of 5.6%.
The following table summarizes the behavior of Copel's shares in the first three-month in 2014:
ON | PNB | |||
Share performance - January to March 2014 | Total | Daily average | Total | Daily average |
Bovespa | ||||
Traded | 14,533 | 238 | 203,569 | 3,337 |
Quantity | 6,103,800 | 100,062 | 39,899,500 | 654,090 |
Volume (R$ thousand) | 116,813 | 1,915 | 1,072,265 | 17,578 |
Presence on ex changes | 61 | 100% | 61 | 100% |
Nyse | ||||
Quantity | 31,249 | 1,420 | 37,682,759 | 617,750 |
Volume (US$ thousand) | 260 | 12 | 431,869 | 7,080 |
Presence on ex changes | 22 | 36% | 61 | 100% |
Latibex | ||||
Quantity | - | - | 111,899 | 1,834 |
Volume (€ thousand) | - | - | 968 | 16 |
Presence on ex changes | - | - | 61 | 97% |
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5 Tariffs
Energy Supplies
Average supply tariffs(a)- R$/MWh | March 2014 | March 2013 | Variation |
Residential | 210.69 | 191.08 | 10.3% |
Industrial (b) | 263.50 | 242.54 | 8.6% |
Commercial | 241.66 | 217.61 | 11.1% |
Rural | 160.63 | 146.89 | 9.4% |
Others | 188.03 | 169.45 | 11.0% |
226.12 | 205.68 | 9.9% | |
(a) Without ICM S | |||
(b) Does not inclued free customers |
Purchasing Energy
Tariffs for purchase of energy - R$/MWh | March 2014 | March 2013 | Variation |
Itaipu (a) | 125.30 | 109.51 | 14.4% |
Auction CCEAR 2007 - 2014 | 147.81 | 138.79 | 6.5% |
Auction CCEAR 2008 - 2015 | 124.82 | 117.19 | 6.5% |
Auction CCEAR 2010 - H30 | 168.17 | 157.90 | 6.5% |
Auction CCEAR 2010 - T15 (b) | 178.06 | 167.19 | 6.5% |
Auction CCEAR 2011 - H30 | 172.65 | 162.11 | 6.5% |
Auction CCEAR 2011 - T15 (b) | 196.33 | 184.34 | 6.5% |
Auction CCEAR 2012 - T15 (b) | 176.13 | 165.37 | 6.5% |
Bilaterals | 180.03 | 169.01 | 6.5% |
ANGRA | 145.96 | 133.11 | 9.7% |
CCGF(c) | 30.48 | 30.07 | 1.4% |
Santo Antonio | 107.01 | 100.48 | 6.5% |
Jirau | 94.12 | 71.37 | 31.9% |
Others Auctions (d) | 173.52 | 160.01 | 8.4% |
Average (e) | 144.37 | 121.99 | 18.3% |
(a) Furnas transport charge not included. | |||
(b) Average auction price restated according to the IPCA inflation index. The price comprises in fact three components: | |||
a fixed component, a variable component, and expenses at the Electric Energy Trading Chamber (CCEE). The cost of the latter tw o components is dependent upon the dispatch of facilities according to the schedule set by the National System Operator (ONS). | |||
(c) Contract of quotas of assured pow er of those HPPs w hich concessions w ere extended pursuant the new rules of Law 12,783/13. | |||
(d) Products average price. | |||
(e) Takes the amount of 812 average MW related to auction 2006-2013 to calculate March 2013 (R$ 99.16). |
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Supply of power
Sales to Distributors Average Tariff - R$/MWh | March 2014 | March 2013 | Variation |
Auction - CCEAR 2006-2013 | - | 98.42 | -100.0% |
Auction - CCEAR 2007-2014 | 116.81 | 109.93 | 6.3% |
Auction - CCEAR 2008-2015 | 123.91 | 116.50 | 6.4% |
Auction - CCEAR 2009-2016 | 141.48 | 133.03 | 6.4% |
Auction - CCEAR 2011-2040 | 161.55 | 151.81 | 6.4% |
Auction - CCEAR 2013-2042 | 176.13 | - | - |
Auction - CCEAR 2014 | 191.80 | - | - |
Concession holders in the State of Paraná | 155.73 | 135.25 | 15.1% |
6 Economic Financial Results
Income (Note 30)
At March 2014, the net income from sales and services reached R$ 3,051,072, an increase of 28.2% compared to the amount of R$ 2,380,410 registered to March 2013.
This variation was due mainly to the following factors:
a) 19.8% increase in the revenue from electric power supply mainly due to the tariff adjustment in June 2013 and the increase in the market;
b) 52.9% increase in revenue from “electricity sales to distributors” due to variation of the Price for Settlement of Difference (PLD) and income from the sale of energy produced by UEG Araucária;
c) 60.0% increase in the Revenue from Construction. The Company records revenues related to construction services or infrastructure improvement used in the rendering of distribution and electricity transmission services, which total R$ 289,848 in March 2014 and R$ 181,191 million for the same period in 2013. Corresponding expenditures are recognized in the statement of income for the period, such as construction cost, as incurred; and
d) 32.9% decrease in “other operating revenues”, mainly caused by the termination of the lease of the Araucária thermal plant with Petrobras.
Operational costs and expenses (Note 31)
At the end of March 2014, total operational costs and expenses amounted to R$ 2,401,752, which represented an increase of 27.6% compared to the R$ 1,881,951 registered in the same period for 2013. The main highlights are as follows:
a) 16.7% increase in the account Electricity acquired for resale especially due to greater amount of electricity acquired at the Electric Power Trading Chamber – CCEE and at CCEAR; offset by the receipt of funds from the CDE to reimburse energy costs the amount of R$ 831,771;
b) 14.1% decrease in Charges for the use of the electrical network mainly due to the lower value of the System Service Charges – ESS;
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c) 9.4% decrease in relation to the same period in 2013 in the Personnel and Management account balance, due to the lower expenses on remuneration and charges due to the reduction in the number of employees in the period;
d) 17.3% increase in the Pension Fund and Welfare Plans mainly due to the effects arising from the actuarial assessment, which was performed by an actuary engaged to perform such calculations;
e) 405.1% increase in Natural Gas and supplies for the gas business resulting from the purchase of gas for UEG Araucária.
Financial results (Note 32)
Increase of 50.2% in financial results was mainly due to:
a) increase in monetary variation on the CRC, which is corrected by the IGP-DI indicator that, from January to March 2014, had an increase of 2.7% while in the same period of 2013 the variation was 0.8%; and
b) increase in monetary variation on accounts receivable related to the concession, which is corrected by the IGP-M, an indicator that, from January to March 2014, had an increase of 2.5% while in the same period of 2013 the variation was 0.8%.
Lajida
Adjusted Ebitda (earnings before interest, taxes, depreciation and amortization) reached
R$ 858,561 in March 2014, 29.12% greater than that reported for the same period of the previous year, as demonstrated below:
Consolidado | 03.31.2014 | 03.31.2013 |
Net income for the period | 583,050 | 398,656 |
Deferred IRPJ and CSLL | (50,565) | (69,357) |
Provision for IRPJ and CSLL | 283,071 | 262,667 |
Financial expenses (income), net | (110,967) | (73,899) |
Lajir/Ebit | 704,589 | 518,067 |
Depreciation and amortization | 153,972 | 146,841 |
Lajida/Ebitda | 858,561 | 664,908 |
Net operational results - ROL | 3,051,072 | 2,380,410 |
Ebitda% (Ebitda ÷ ROL) | 28.1% | 27.9% |
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GROUPS IN CHARGE OF GOVERNANCE
|
|
BOARD OF DIRECTORS | |
Chairman: | Mauricio Schulman |
Executive Secretary: | Lindolfo Zimmer |
Members: | CARLOS HOMERO GIACOMINI MAURICIO BORGES LEMOS José Richa Filho LUIZ EDUARDO DA VEIGA SEBASTIANI MARCO AURÉLIO ROGERI ARMELIN NATALINO DAS NEVES NEY AMILTON CALDAS FERREIRA |
AUDIT COMMITTEE |
|
Chairman: | CARLOS HOMERO GIACOMINI
|
Members: | JOSÉ RICHA FILHO |
| VAGA EM ABERTO |
FISCAL COUNCIL |
|
Chairman: | Joaquim Antonio Guimarães de Oliveira Portes |
Full Members: | NELSON LEAL JUNIOR JOSÉ TAVARES DA SILVA NETO VAGA EM ABERTO CARLOS EDUARDO PARENTE DE OLIVEIRA ALVES |
Alternate Members: | OSNI RISTOW ROBERTO BRUNNER GILMAR MENDES LOURENÇO VAGA EM ABERTO FLAVIO JARCZUN KAC |
BOARD OF DIRECTORS |
|
Chief Executive Officer: | Lindolfo Zimmer |
Chief Corporate Management Officer:
| MARCOS DOMAKOSKI |
Chief Financial and Investor Relations Officer: Chief Institutional Relations Officer: | ANTONIO SERGIO DE SOUZA GUETTER DENISE CAMPANHOLO BUSETTI SABBAG |
Chief Business Development Officer:
| jonel nazareno iurk
|
Deputy Director: | PAULO CESAR KRAUSS |
ACCOUNTANT |
|
Accountant - CRC-PR-045809/0-2: | ADRIANO FEDALTO
|
|
|
INFORMATION ON THIS REPORT |
|
rsustentabilidade@copel.com | Phone: +55 (41) 3331-4051 |
Others Informations:
| Phone: +55 (41) 3222-2027 / 3331-4359 Fax: +55 (41) 3331-2849 |
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INDEPENDENT AUDITORS’ REVIEW REPORT
To the Shareholders and Management
Companhia Paranaense de Energia - COPEL
Curitiba – PR
We have revised the individual and consolidated interim financial information of Companhia Paranaense de Energia - COPEL included in the Quarterly Information Forms, for the quarter ended March 31, 2014, which include the statement of financial position at March 31, 2014 and the related statements of income, comprehensive income, changes in equity and cash flows for the three-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 the individual and consolidated interim financial information in accordance with Technical Pronouncement CPC 21 (R1) – Interim Statements and consolidated interim financial 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 these 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.
Unqualified conclusion on the individual interim financial information
Based on our review, we are not aware of any fact that would lead us to believe that the individual 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) applicable to the preparation of quarterly information or have not been disclosed in accordance with the standards issued by the Brazilian Securities and Exchange Commission.
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Unqualified conclusion on the consolidated interim financial information
Based on our review, we are not aware of any fact that would lead us to believe that the 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 three-month period ended March 31, 2014, 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, May 13, 2014
KPMG Auditores Independentes
CRC 2SP014428/O-6-F-PR
A free translation of the original signed in Portuguese
João Alberto Dias Panceri
Accountant - CRC PR048555/O-2
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COMPANHIA PARANAENSE DE ENERGIA – COPEL | ||
By: | /S/ Lindolfo Zimmer | |
Lindolfo Zimmer CEO |
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.