Compliance

(GRI SO8; PR9)

CTEEP respects and applies all regulatory frameworks, as well as all international agreements and treaties relevant to its business.

In 2013, the administrative appeal filed by the Company on 02.27.2013 in response to a Tax Delinquency Notice issued by the Federal Revenue Department in connection with tax-like social contributions by reason of the non-cumulative system of PIS [Social Integration Program] and COFINS [Tax for Social Security Financing] in 2009 and 2010 was granted at the Administrative Council of Tax Appeals.

Additionally, the Company challenged the Tax Deficiency Notice issued by the Federal Revenue Department on 05.09.13 (in connection with Tax Procedure Order 0818500-2012-00052-2) to collect alleged tax debts from civil year 2008 related to the amortization of goodwill booked in connection with the merger of ISA Participações Ltda. This report does not include administrative proceedings related to labor, social security and land issues, as well as preparatory procedures or public civil inquiries.

In 2013, the Company also filed two legal actions - against ANEEL - in connection with its services.

One is related to the outage of about 870 MW of the Eletropaulo Metropolitana Eletricidade de São Paulo S.A. load, resulting from an incident at Milton Fornasaro Substation in 2011. The infringement notice imposes a fine of R$ 1,250,336 thousand. In June 2013, CTEEP filed a legal action so that the enforcement of that fine is suspended.

The legal action is concerned with a fine related to service quality and failure to provide transmission services, in accordance with Articles 32 and 33 of Normative Resolution 270 between June 2010 and May 2011. The infringement notice imposes a fine of R$ 416,167 thousand. In April 2013, CTEEP filed a legal action so that the enforcement of that fine is suspended.