Índice 2 - Celeo Redes...

Índice 2

Celeo Redes Brasil em Números 3

Mensagem da Alta Administração 6

Sobre o Relatório 8

Perfil da Companhia 12

Negócio e História 16

Governança Corporativa 17

Responsabilidade Corporativa 24

Desempenho 38Econômico-financeiro 38Operacional 43Social 52MeioAmbiente 64

Índice Remissivo GRI 69

Balanço Social – IBASE 80

Informações Corporativas 81

2 3Celeo Redes Brasil Celeo Redes Brasil Sustainability Report • 2017Sustainability Report • 2017

ContentsCeleo Redes Brasil in Numbers

Message from the Management

About the Report

Company Profile

The Business and its History

Corporate Governance

Corporate Responsibility

Economic-financial

Social

Operational

GRI Content Index

The Environment

Social Balance Sheet – IBASE

Corporate Information

External Assurance Letter

4

6

10

16

24

38

28

58

80

66

108

98

124

130

128

Celeo Redes Brasil in NumbersCELEO contributes ethically and responsibly to the operational efficiency of the Brazilian electricity transmission system, as demonstrated by the results achieved for its indicators.

Confirmed Casesof Corruption

0

Incidents ofDiscrimination

0

Level ofCompliance MaturityFunction Monitoring

scale 3/5

Nº Actions for theCIP Audit (CorporateIntegrity Program)

20 recommendations:- 4 mandatory- 16 at priority levels

Nº Reports received viathe Transparency Channel32

Nº Employees takingpart in ComplianceTraining

204

Nº Concessions12

Transmission lines3,953 km

Substations42, of which12 are its own

4,875 MVA in transformer capacity

Presence10 States

Facilities(commercial andoperational)

1 office(with 1 operating center)

1 Maintenance Base (with Backup operating center)

2 Regionais

TL Availability99.88%

Incidents withEnvironmental Impact

0

Environmental Fines

1 (BRL 35,800)

Renewal of Licenses10

Cumulative ForestReplacement161 hectares

EnvironmentalInvestments

BRL 3.9 million

Electricity Consumption

1,175 MWh/year

Employees230

Hours of Training

22,073h

Turnover Rate23.7

Fatal Accidents0

Occupational AccidentFrequency RateOwn employees: 3.60subcontracted workers: 7

Occupational AccidentSeverity Rate Own employees: 0.04Subcontractedworkers: 0.16

Amount of Investments (ANEEL Investment)

BRL 3,652 billion

TL Failure Rate4.37

PV/RAP0.58%

Water Consumption3,105.49 m³

CO2 Emissions

4,081.93

Waste GenerationPerigosos: 2.009 kg2.827 litros1.132 unidades

Hazardous:2,021 kg2,850 liters1,400 units

Non-hazardous:5,228 kg

R & D Investments 3 projects(BRL 3.7 million)

Nº OccupationalIllnesses

0

SSO IntegrationThird Parties47

Nº Active Suppliers1,927

Amount of purchasing(O & M Supplies)

BRL 10.8 million

Nº of "Critical"Suppliers Qualified38

Nº of Rural Properties (Stakeholder Engagement)

1,085 registrations

Social Investment4 Projects(BRL 1.5 million)

Nº Social Complaints(Affected Communities)

3

Total Assets(consolidated shareholding)BRL 2.326 billion

Net worth(consolidated shareholding)BRL 1.517 billion

Net debt(consolidated shareholding)BRL 328 million

Net operating revenue(consolidated shareholding) BRL 195 million

EBITDA(consolidated shareholding)BRL 123 million

Net profit(consolidated shareholding)BRL 86 million

Governance Operational Environmental Social Economic

Celeo Redes Brasil 5Sustainability Report • 2017Celeo Redes Brasil4 Sustainability Report • 2017

Brazil)and4,875MVAoftransformer

capacity,providinggreatersecurity

andcoveragefortheenergy

transportationsystems.Fromthis

solidbasewehavesettargetsfor

growth,especiallyinlong-term

assetssuchastransmissionlines.As

aGroupweareoptimisticaboutthe

futureofourpresenceinthemarket.

In2018,wesignedtheLetterof

CommitmenttojointheUnited

NationsGlobalCompact.Asaresult,

weexpecttoactivelyparticipate

asaSignatoryatthenationallevel

througheachofoursubsidiaries

andarecommittedtocontinuing

toimplementcorporatesocial

responsibilitybasedonthePrinciples

oftheGlobalCompact.

Inthefollowingpagesyouwillfind

detailsaboutthemajoractivitiesthat

tookplaceintheyear2017.Iinvite

youtoreadthisdocument,whichisa

testimonytothecommitmentmade

byallofCeleoRedes’employeesto

contributetotheenergysectorwith

quality,efficiencyandsafety.

Regards,

D.JoaquínGómezdeOlea

ChairmanoftheBoardofDirectors

OnbehalfoftheBoardofCeleo

RedesS.L.wepresentoursecond

SustainabilityReport,inwhichwe

reportontheactivitiescarriedout

in2017,sharingourbeliefinour

sustainablecontributiontothe

energysectorandtothecountry.

AtCeleoRedesweknowthatforthe

electricitytransmissionbusinessto

beviableitrequiresplanningwith

along-termvision.Dialoguewith

stakeholdersisfundamentalforthe

companytoadaptandrespond

immediatelytotheenergyneeds

ofthecountrieswhereweoperate.

Theseconsiderationsareespecially

importantgiventheroleofthe

energysectorinthesocialand

economicprogressofthenation.

Thisiswhyweactivelyparticipate-

togetherwithothermembersofthe

industry-inregulatorydscussions

andinthefuturedevelopmentof

thismarket,contributingthroughthe

soundmanagementofourassets

andournationalandinternational

experience.

Weareconvincedthatourgrowth

isalsothegrowthofthecountries

whereweoperate,sincesafeand

continuouselectricaloperations

facilitatethedevelopmentof

investmentprojects,resultingina

betterqualityoflifeforall.Thisiswhy

wemanageourassetsandliabilities

withaviewtotheidentification,

preventionandmitigationof

environmental,social,economic,

reputationalandhealthandsafety

risksinouroperations.

Today,CeleoRedesfacilitatesthe

developmentofnewinvestment

projectsinLatinAmericathrough

theoperationof4,407kmof

transmissionlines(3,953kmin

D. Joaquín Gómez de Olea

Chairmanofthe

BoardofDirectors

Message from the ManagementGRI 102-14

Message from the CEO of Celeo Redes

Celeo Redes Brasil6 Celeo Redes Brasil 7Sustainability Report • 2017Sustainability Report • 2017

Itiswithgreatsatisfactionthat

wepublishCeleoRedesBrasil’s

secondsustainabilityreport.This

documentistheresultofalengthy

processinvolvingthededication

andcommitmentoftheCELEO

team.Thisprocesshasbeen

strengthenedinrecentyearswith

theformulationofstrategiesforthe

businessandtheadoptionofgood

practicesindaytodayoperations.

Wecanthinkoftheyears2016and

2017asrepresentingmilestones

inourhistoryfortheadvanceswe

havemadeinstrengtheningour

organizationalstructureoverthis

period.Whilemanycompanies

wentthroughadifficultperiodas

aresultoftheeconomiccrisis,we

tooktheopportunitytoconsolidate

processesandlayafoundationfor

sustainablegrowth,reinforcingthe

trustofourstakeholders.

Theresultscanbeseeninaseries

ofactionsandprojectsdeveloped

intheseyears.TheCorporate

IntegrityProgramwasimplemented

in2016andbroughttransparency

toourinternalandexternal

activitiesandrelationships,with

100%adherencebyemployees.

Theauditconductedin2017to

assesstheincorporationofthe

ProgramintotheCompany‘s

managementgavearatingoflevel

3onascaleof1-5.

WealsoimplementedanIntegrated

ManagementSystem(IMS)toraise

thequalityandreliabilityofour

services.In2017,webeganthe

processofimplementationforthe

ISO9001,ISO14001andOHSAS

18001standards,withthetargetof

achievingcertificationfortheIMS

bytheendof2018.

Asforoperatingperformance,we

achievedexcellentratingswith

oneofthebestresultsforthe

availabilityrateinrecentyears.

Externalrecognitioncameinthe

formofachievingfirstplacefortwo

consecutiveyearsintheBrazilian

Solidity and continuity mark our path towards excellence

Francisco Chica

ExecutiveDirectorof

CeleoRedesBrasil

ElectricityRegulatoryAgency’s

(ANEEL)rankingsforoperational

efficiencyamongtransmission

companies.Theeconomic-financial

performancewassatisfactory,

despitebeing16%lowerthan

lastyearduetotheunfavorable

macroeconomicenvironmentthat

thecountryhasbeenexperiencing

since2015,withBRL195millionof

netrevenuegenerated.

Finally,wecanhighlighttheearly

completionofthe500kVEstreito

-FernãoDiasTransmissionLine,

whichrunsfor342kmbetween

thestatesofMinasGeraisand

SãoPaulo.Thisisanimportant

achievementfortheBrazilian

ElectricSystemasitispartof

theTransmissionSystemthatwill

enabletheoutflowofenergyfrom

theBeloMonteHydroelectric

Plant(11,233MW).Theproject

wasscheduledforcompletionin

May2018andwascompletedin

December2017,withoperations

beginninginFebruary2018.

Toconclude,itisimportantto

emphasizethatwehavethe

premisethatmanagement-as

wellasmanaginginvestments-is

ourobligation.Whatsetsusapart

isthatweseeksolidgrowthfrom

abasethatiswellstructuredto

facethechallengesofglobaland

localchangeandtocontribute

tosocioeconomicdevelopment

withrespectforpeopleand

theenvironment.Allthiswhile

demonstratingtoourshareholders

thatCELEOhastheabilityto

maintainthebalancebetween

short-termprofitsandlong-term

cost-effectiveness.Inthisway,we

canbesurethatweareworking

everydaytostrengthentheassets

wehaveinourhands.

FranciscoChica

ExecutiveDirectorofCeleoRedesBrasil


About the Report

This publication reflects the effort and commitment that CELEO puts into the improvement of its management and its sustainability strategies. The challenge for the coming years is to continue to advance in our use of this instrument for communication with stakeholders.

Celeo Redes Brasil10 Sustainability Report • 2017 Celeo Redes Brasil 11Sustainability Report • 2017

ThisisCeleoRedesBrasil’ssecond

SustainabilityReport.Thisprocess

beganlastyearwiththepreparation

ofaninternalreportthatfollowedthe

guidelinesoftheGlobalReporting

Initiative’s(GRI)G4version,withthe

objectiveofportrayingthedegree

ofcompliancewiththesustainability

guidelinesandpossibilitiesfor

improvementsinfutureprocesses.

Theresultofthismaturityprocess

isthissecondreport,whichisnow

auditedandpubliclyavailable,inline

withourcommitmenttocontinuous

improvement.

Thispublicationisalsoastrategic

commitmentonthepartofthe

Company,consideringtheimportance

oftransparencyandopendialogue

withallofitsstakeholders.Thereport

providesinformationcoveringtheperiod

betweenJanuary1andDecember31,

2017.Thereportincludesinformation

onmanagementandperformance

overthelasttwoyears,withstrategic

objectives,operationalresultsandsocial,

environmentalandeconomicaspectsof

theholdingcompanyandits12energy

transmissionconcessionslocatedin10

statesinBrazil.

Themethodologyadoptedforthe

preparationofthereportwastheGRI

Standards,„core“option,andincludes

thesetofdisclosurescontainedinthe

electricutilitiessectorsupplementthat

applytothetransmissionactivity.This

documentalsoaimstoalignitselfwith

thequestionsassessedbytheGlobal

RealEstateSustainabilityBenchmark

(GRESB)-aglobalplatformforassessing

theinfrastructuresectorforsustainability

performance.

Duringthecontentdefinitionprocess,

91indicatorswereselected:52general

disclosures,28performancedisclosures

(3economic,11environmentaland

14social)and11disclosuresfromthe

sectorsupplement.TheContentIndex

islocatedattheendofthereport

andprovidesdetailsoftheindicators

reported,includingthepagesofthe

reportwheretheycanbefound,withan

indicationofexternalassurancebythe

independentauditorKPMG.

TofindoutmoreabouttheGRI

Standardsforsustainabilityreporting,go

towww.globalreporting.org.

Celeo Redes Brasil’s Concessions

The Reporting Process Process for defining the contentof the Sustainability Report

• BrilhanteTransmissoradeEnergiaS.A.(BTE)

• BrilhanteIITransmissoradeEnergiaS.A.(BTEII)

• CaiuáTransmissoradeEnergiaS.A.(CAIUÁ)

• CantareiraTransmissoradeEnergiaS.A.(CANTAREIRA)

• CoqueirosTransmissoradeEnergiaS.A.(CTE)

• EncruzoNovoTransmissoradeEnergiaS.A.(ENTE)

• IntegraçãoMaranhenseTransmissoradeEnergiaS.A.(IMTE)

• JauruTransmissoradeEnergiaS.A.(JTE)

• LinhadeTransmissãodeCorumbáS.A.(LTC)

• LinhadeTransmissãoTriânguloS.A.(LTT)

• PedrasTransmissoradeEnergiaS.A.(PTE)

• ViladoCondeTransmissoradeEnergiaS.A.(VCTE)

Theprocessofdefiningthe

contentofCeleoRedesBrasil’s

SustainabilityReportbeganin2016

withtheformationofagroupcalled

„SustainabilityFocalPoints“that

includes24leadersoftheCompany.

Thegroupwascreatedinorderto

identifyandevaluate,inprinciple,

theaspectsandimpactsthatare

relevanttotheenergytransmission

businessandtheirrelevancein

relationtotheCompanyandto

thestakeholders.Studieswere

conductedofbenchmarksonthe

national,internationalandsectoral

level,aswellasthosewiththe

specificcharecteristicsofpublic

energytransmissionutilities,in

additiontoconsideringthestrategic

guidelinesoftheshareholdersfor

CeleoRedesBrasil.

Asaresultofthisprocessalist

oftopicswasdrawnupand

prioritized,initiallybythepriority

stakeholders,whichinclude:

Shareholders(ElecnorandAPG),

RegulatoryAgents(ANEELand

ONS),FundingAgent(BNDES)and

Partner(COPEL).Subsequently,the

topicswereprioritizedbytheSenior

Managementtogetherwiththe

SustainabilityManagementarea.

ThetopicsdefinedbySenior

Managementwereprioritizedbased

on:

• Overallriskstothebusiness

andtoprocesses,accordingto

CELEO’sRiskMap;

• Reputationalrisksintheelectric

sectorhighlightedbythe

RepRisktool;

• Relevanttopicshighlightedin

theSustainabilityReportsof

companiesintheelectricsector

andspecificallybyoneofthe

Company‘spartners;

• SASB(whichdefines

sustainabilityreporting

standardsforpublicly-traded

companiesontheAmerican

stockexchange);and

• Requirementsofthe„GRESB

InfrastructureAssessment“

questionnaire.

GRI 102-21, 102,43, 102,44, 102-46, 102-47

GRI 102-50, 102-51, 102-52, 102-54


Definition of stakeholders

Toidentifyandprioritizethematerial

topics,theintrinsiccharacteristics

ofapublicelectricitytransmission

utilitywereconsidered.TheSenior

ManagementandSustainability

Managementareadecidedthat

theprocessofengagementand

surveyingthemostrelevantopinions

wouldinitiallyincludethefollowing

prioritygroups:

• Shareholders(ElecnorandAPG)

• BrazilianElectricityRegulatory

Agency(ANEEL)

• NationalElectricSystem

Operator(ONS)

• BrazilianDevelopmentBank

(BNDES)

• CompanhiaParanaensede

Energia(COPEL)

Thisdecisionwasmadeconsidering

thattheenergytransmission

concessionandservice-provision

agreementsaresignedthroughthe

regulators(ANEELandONS)and

arestrategicfortheCompany’s

corebusiness.Themainfinancing

agent(BNDES)alsocurrentlyhas

afundamentalroleintheviability

oftheprojectsbyproviding

financialresourcesintheformof

loans.Thepartners-represented

byCOPEL-andtheshareholders

(ElecnorandAPG)arealsoequally

relevantindefiningthestrategic

guidelines,levelsofGovernance

andperformancewithregards

totheEnvironmental,Socialand

Governance(ESG)aspects.

GRI 102-42

Engagement with communities

Eco-efficiency

Solid Waste Management

Access to financial capital

Relevance

Highly relevant

Operational Health and Safety

Topics

Corruption, ethics management and Compliance

Operational Efficiency and Availability

Biodiversity

Economic-financial results

Management System (quality, environmental, health and safety)

Relevant

People management

Risks and Opportunities management

Supply chain management

Strategic expansion of transmission (new projects, reinforcement,improvements)


Research, development and innovation

Less relevant

Limits of the Impacts

Within the Organization Outside of the Organization

Followingtheprioritizationofthe

relevanttopics-whichattempted

toreconciletheevaluationsof

stakeholdersandoftheCompany-

theSeniorManagementconducted

amaterialityapprovalprocessin

ordertoensurethatnoneofthe

relevantimpactsfortheCompany

hadbeenmissed.Onthisoccasion,

thedirectorsevaluatedanddefined

theboundariesoftheimpactsofthe

materialtopics.

Thematerialityanalysisresultedin

16materialtopicsconsideredas

relevantbyCeleoRedesBrazil,as

brokendownbylevelofrelevance

below:



Company Profile

CELEO’s presence in Brazil demonstrates the importance of attracting foreign investment for the growth of the energy sector and for the socioeconomic development of the country.

Principal Shareholders Elecnorisoneoftheleadingglobal

companiesinthedevelopment,

constructionandoperationofprojects

initstwomajorareasofbusinesses

(InfrastructureandUtilities),which

complementandenricheachother.

Withalmost60yearsofcontinuous

growthandpresentinmorethan50

countries,Elecnorhasbecomeone

ofSpain‘smostprominentbusiness

groupsandabenchmarkinthe

infrastructure,renewableenergyand

newtechnologysectors.

Thediversificationofitsactivitieshas

beenoneofthecompany’sstrategic

pillarsthroughoutitshistory,allowingit

tooperateindifferentsectorsincluding

electricity,gas,industrialfacilities,

railways,telecommunications,water,

controlsystems,construction,the

environment,maintenanceoffacilities

andevenaerospaceengineering.

Itsstronginternationalvocationled

toacontinuousprocessofexpansion,

whichopenedthedoortonewmarkets

throughouttheworld,especiallyin

CentralAmerica,SouthAmerica,Africa

andtheMiddleEast.

UndoubtedlythisisaGroupwhose

technicalandfinancialsolvency

permitsittopromote,developand

buildalltypesofinfrastructureonfive

continents.

APGisthelargestpensiondistribution

organizationintheNetherlands.Ithas

approximately3,000employeeswho

provideexecutiveconsulting,asset

management,pensionadministration

andreporting,aswellasemployee

services.APGperformstheseservices

onbehalfofpensionfundsand

employersinthesectorsofeducation,

government,construction,window

cleaningandgeneralcleaning,housing

associations,energyandutilities

companies,protectedemployment

organizationsandmedicalspecialists.

APGmanages€475billion(January

2018)inpensionassetsforfunds

inthesesectors.APGworksfor

approximately40,000employers,

providingpensionsforoneinfive

familiesintheNetherlands(about

4.5millionparticipants).Itsoffices

arelocatedinHeerlen,Amsterdam,

Brussels,NewYorkandHongKong.

ELECNOR, S.A.

APG INFRASTRUCTUREPOOL 2012

CELEO CONCESIONES EINVERSIONES, S.L.U.

APG

49%

100% 100%

51%

CELEO REDES, S.L.100%

CELEO REDES BRASIL, S.A.100%

JAURU TRANSMISSORADE ENERGIA S.A.

BRILHANTE TRANSMISSORADE ENERGIA S.A.

BRILHANTE II TRANSMISSORADE ENERGIA S.A.

CAIUÁ TRANSMISSORADE ENERGIA S.A.

INTEGRAÇÃO MARANHENSETRANSMISSORA DE ENERGIA S.A.

CANTAREIRA TRANSMISSORADE ENERGIA S.A.

VILA DO CONDE TRANSMISSORADE ENERGIA, S.A.

LINHA DE TRANSMISSÃOTRIANGULO, S.A.

COQUEIROS TRANSMISSORADE ENERGIA S.A.

PEDRAS TRANSMISSORADE ENERGIA S.A.

ENCRUZO NOVOTRANSMISSORA DE ENERGIA S.A.

LINHA DE TRANSMISSÃOCORUMBÁ S.A.

33%100%

50%100%

50%100%

51%100%

51%100%

51%100%

DEZ/2017


CeleoRedesBrasilS.A.(CELEO)

isaholdingcompanythatcontrols

12SpecialPurposeEntities(SPEs)

operatingintheBrazilianenergy

sectoraselectricitytransmission

utilities(concessions),includingin

theconstruction,operationand

maintenanceofthetransmission

facilitiesoftheNationalInterconnected

System(SIN).Itisaprivately-held

corporationcomposedoftwo

shareholders:theSpanishgroup

Elecnor(51%)andtheDutchpension

fundAPGGroup(49%).

CeleoRedesBrasilhasits

headquartersinRiodeJaneiroand

threeotherbases–inMinasGerais

(MaintenanceBase:Uberlândia),

MatoGrossodoSul(Maintenance

Base:CampoGrande)andPará

(MaintenanceBase:ViladoConde)

–withoperationsin10statesinthe

country.CELEO’sbusinessportfolio

involvestheparticipationofpartnersin

someofitsventuresintheformofthe

companiesCobra,IsoluxandCopel.

Currently,theCompanyhas230

employeesandin2017generateda

totalofBRL195millioninnetrevenue.

Celeo Redes BrasilGRI 102-1; 102-2; 102-4; 102-5; 102-7

Values

“Toimplementinfrastructure

investmentprojectsandprovide

aconstantandefficientservice

intheelectricitytransmission

business,contributingtoeconomic

andtechnologicalprogressandto

sustainabledevelopment.“

„Tobeacompanythatsetsthe

benchmarkinthetransmission

market,recognizedforthe

performanceofitsservices,creating

valueforitsstakeholdersand

contributingtothedevelopmentof

societyandtheprotectionofthe

environment.“

01

04

02

05

03

06

Valuelife Encouragedevelopmentandrecognizeeffort

Respectfortheenvironment

Focusonthecustomer

Financialsolvency Actwithintegrity,transparencyandcommitment

Mission Vision

Initiatives:

Recognition and initiatives Duringtheyear,CELEOreceivedtwoimportantawardsandparticipatedinvarious

nationalandinternationalinitiatives:

RecognizedasaBenchmarkbytheBrazilianElectricityRegulatoryAgency(ANEEL)RankingofOperationalEfficiency,ranking1stintheyears2015and2016.TechnicalNotenº164/2017-SRM/ANEEL(dated:10/04/2017).

TheNationalSystemOperator(ONS)affirmedthe„GoodPerformanceofTransmissionFacilities“andthattherearenorecordsthatdisprovethequalityofitsoperationinONSletter0372/100/2017(dated:02/22/2017).

In2017,CELEOassumedvarious

commitmentsandtargetsandsubmittied

itssustainabilityperformanceindicators

(Environmental,SocialandGovernance

-ESG)totheGlobalRealEstate

SustainabilityBenchmark(GRESB)for

thefirsttime,inordertoevaluateits

managementinrelationtotheseissues

andcompareitwithothercompaniesin

thesector;

AdhesionoftheElecnorGroupcompanies

andAPGtotheGlobalCompactandthe

SustainableDevelopmentGoals(SDG).

GRI 102-16

Corporate Principles

CeleoRedesBrasilisrecognized

asaCompanythatdemonstrates

ahighdegreeofqualityinwhatit

does,settingabenchmarkforits

integrity.Itsprinciplesarebased

onprofessionalrelationships,

promotionofafairandmotivating

workingenvironment,involvement

insocialprojectsintheareas

whereitoperatesandadesireto

constantlyupdateandimproveits

processes.Thesebusinessprinciples

arereflectedintheCorporate

IntegrityProgramandtheCodeof

Ethics


VCTE

LTT

CTE

PTE

ENTE

LTC

IMTE

CAIUÁ

BTE

BTE II

JTE

CANTAREIRA

LT(km)

Transformers(MVA)Substations

BeganOperationConcession Share (%)

324

695

65

-

220

279

365

142

581

-

940

342

2

6 (1)

3 (2)

(1)

2 (1)

2 (1)

2

5 (2)

10 (4)

1

6

2

-

1800

675

800

200

200

-

700

300

200

-

-

May/06

Nov/08

Jan/10

Dec/10

Jul/12 - Sep/15

Sep/13

Dec/14

May/14 - Jun/14

Nov/10 - Jan/11

Aug/12

Aug/14

Oct/09 - Dec/12

Jan/13 - Feb/13

Feb/18

100

100

100

100

100

100

51

51

50

50

33

51

KeySubstationMaintenance BaseCenter of OperationsOperational LineLine Being Built

Presence in Brazil

CELEOoperatesin10Brazilian

states,with12energytransmission

developmentstotaling3,953kmof

transmissionlinesand4,875MVA

oftransformationcapacityin42

substationsofthebasicnetwork-of

which12areitsownsubstations.

Sixoftheseenterprisesare100%

ownedbytheCompanywiththe

remainderrepresentingdifferent

shareholdinginterests.

Themostrecentcompany

constitutedwith100%ofcapitalis

theSerradeIbiapabaTransmissora

deEnergiaS.A.(SITE),afterCELEO

wontheEnergyTransmission

Auction02/2017conductedbyBM

&FBOVESPA(B3)inDecember

2017.

DEZ/2017

GRI 102-2, 102-6, 102-7, EU4



The Business and its History

Celeo Redes Brasil marks its 17 years of operations in the Brazilian market with recognition in the energy transmission sector. Over the years it has won important battles in the process of creating its business portfolio, which now consists of 12 concessions in several states in the country.

2017

TheTransmissionBusinessisseparate

fromtheGeneration,Distributionand

TradingofEnergy.

Tobecomeatransmissionconcessionaire

acompanyneedstodevoteitselfto

winninganauctionbyofferingthe

highestPermittedAnnualRevenue(RAP)

discounttoANEEL.

TheobjectoftheConcessionAgreementincludes

theConstruction,OperationandMaintenanceofthe

TransmissionFacilitiesdescribedintheTenderNotice.

ThetermoftheConcessionis30years,extendableforthe

sameperiodatthesolediscretionoftheGrantingAuthority.

TheAgreementdefinestheprincipalcontractualfeatures,

includingthedateofentryintoCommercialOperationand

theendoftheConcession.

Auction002/2000:

ElecnorS/Aparticipates

inthesecondANEEL

transmissionauctionand

winsthebiddingforlotB

Transmissioncompaniesenterintoagreements

withANEELandONS,whichareresponsible

formanagingtransmissionservicesinBrazilThis

includesremuneratingtheTransmissioncompanies

throughPermittedAnnualRevenue(RAP).

Theseagreementsregulatetherightsand

obligationsoftheconcessionairesandtheusers,

ANEELandONS.

Transmissioncompaniesareremuneratedforthefull

availabilityoftheirfacilities,regardlessofthevolumeof

energytransmittedthroughtheirassets,followingthe

recommendationsoftheefficiencyincentivemodel.

TheresourcesforthepaymentoftheTransmission

companiescomefromthechargesappliedforuseof

thetransmissionsystem(CUST)andpaidbytheusers,

calculatedandregulatedbytheONS.

GENERATION TRANSMISSION

Publicgenerators

Independentproducers

Self-producers

TRADING

Paymentforuseofthe

transmissionsystem

Free,specialand

captiveconsumers

GRI 102-6

The energy sector

The Business Timeline

2000

ConstitutionofElecnor

TransmissãodeEnergia

S/A(ETESA)

12concessionswonby

thePlenaTransmissoras

Consortium(Elecnor,

Cobra,Abengoaand

Isolux)

2001 2001 a 2007

ETESAthebiddingfor

5concessions:Pedras,

Coqueiros,Brilhante,

EncruzoandCorumbá

2008 a 2010

Saleofsevenconcessions

(PlenaTransmissoras)to

theChinesecompany

StateGridBrazilHoldings

2010

Auction006/2011:Wins

thebiddingforlotsEandI

inpartnershipwithCOPEL

(IMTEandCAIUÁ)

2011

Auction005/2012:wins

thebiddingforlotBin

partnershipwithCobra

(BTE2)

APGacquiresa49%share

inCeleoRedesSLU

20122014

Auction001/2014:wins

thebiddingforlotFin

partnershipwithCOPEL

(CANTAREIRA)

2014

Companynamechanged

toCeleoRedesBrasilS.A.

2015

Adherence to the Corporate Integrity

Program - Compliance

Beginningof

implementationofthe

IntegratedManagement

System:ISO9001,ISO

14001andOSHAS18001

2016 2016

Auction002/2017:winsthebiddingforlot2,located

inthestatesofPiauiandCeara(SITE)

DISTRIBUTION

Paymentforuseofthe

distributionsystem




Celeo Redes Brasil values transparent and strightforward relationships with its stakeholders. Therefore, it pursues best Governance practices to guide its actions.

Sinceitisaprivately-held

corporationitisnotmandatory

forthecompanytohaveaBoard

ofDirectorsunderBrazilianlaw.

However,withregardstoCorporate

Governance,therespective

managementbodyisinstalledin

CeleoRedesSL,headquarteredin

Spain.

ThemanagementofCeleoRedes

BrasilconsistsofaBoardof

ExecutiveOfficerscomposedof

threedirectors(General,Operations

andExecutive),withatermof

threeyearsandwithre-election

permitted.Thepowersofthe

executiveofficersaredefinedin

CELEO’sBylaws,whichestablishthe

boundariesoftheresponsibilitiesof

eachofthem.

CommitteeResponsiblefortheCIP:

Responsibleforoverseeingand

monitoringtheCorporateIntegrity

Program(CIP),thecommittee

iscomposedofthreesenior

executivesandactsindependently.

Establishedin2016,thecommittee

wasappointedatanExtraordinary

Shareholders‘Meeting,witha

regularagendaofmeetingstobe

held.In2017anordinarymeeting

washeldduringwhichthefollowing

resolutionswereconsidered:

presentationoftheresultsofthe

previousyear;reviewoftheCIP;

analysisofoccurrencesrelating

totheTransparencyChannel;and

progressoftheCIPaudit.

IMSCommittee:

Responsibleforoverseeing

andmonitoringtheIntegrated

ManagementSystem(IMS),

proposingimprovementsto

processes,toriskmanagementand

tothemanagementofinformation

andknowledge.Thecommittee

iscomposedof10members

electedbytheCompany‘sBoard

ofExecutiveOfficers,includingthe

appointmentofarepresentativeof

eachareainvolvedintheIntegrated

ManagementSystem.Themeetings

takeplacemonthlyandin2017

therewere12meetingstodiscuss

thefollowingresolutions:analysis

andapprovalofmanagement

procedures;monitoringof

implementationoftheIMS;release

ofresourceswhenappropriate;

monitoringofnonconformities;

monitoringthemanagementof

legalrequirements;monitoringof

indicators;andotherspecificissues

relatedtotheIMS.

Board of Directors and Boardof Executive Officers

Committees GRI 102-18; 102-24

Governance Structure


TheCorporateGovernanceofCeleo

RedesBrasilislinkedtoCeleoRedes

SL,inSpain.Thestructureconsists

ofaBoardofDirectorswithfour

directors-tworepresentingAPG

andtworepresentingtheElecnor

Group.Atthelocallevel,theBoard

ofExecutiveOfficersisthehighest

governancebodyofCeleoNetworks

Brazilandrespondsdirectlytoits

shareholders.Thefunctionsand

powersofthehighest-levelexecutive-

theGeneralManager-aredefinedin

theBylaws,anditistheirresponsibility

torepresentthecompanyindividually

intheexerciseoftheirduties.

TheCompanyalsohasanIMS

(IntegratedManagementSystem)

CommitteeandaCommittee

ResponsiblefortheCIP(Corporate

IntegrityProgram).Throughthe

committees,theSeniorManagement

andthecorporatemanagementteam,

togetherwiththeothermanagersof

theCompany,analyzethedecisions

anddirectthemtotheother

employeesofthegroup.

Thedecision-makingprocess

considerseconomic,socialand

environmentalopportunities,

impactsandriskssoastoadopt

goodpracticesintheCompany‘s

day-to-dayoperations.TheIMS

Committeealsodeliberatesonthese

aspects,especiallythoserelated

tocertification,Quality,Health

andSafetyandtheEnvironment.

Inaddition,theBoardofExecutive

Officersisresponsiblefordefining,

approvingandupdatingthemission,

visionandvalues,aswellasdefining

strategies,policiesandtargets.

TheSeniorManagementassesses

performancewithregardstothe

sustainabilityaspects-Environmental,

SocialandGovernance(ESG)-within

thebusiness,withtheManagement

Teamand/ortheGroup‘sBoardof

Directors.Thisassessmentiscarried

outthroughreportsandregular

meetingsoftheBoardofDirectors.

GRI 102-19, 102-20, 102-22, 102-23, 102-26, 102-28, 102-30

Organizational Governance Chart Corporate Management ChartIn2017,theCompany‘sorganizationalchartwasredefinedasaresultofareorganizationof

CorporateGovernancetoachievegreatersolidityinmanagement,valorizationsofassetsand

theincorporationofsustainabilityintobusinessstrategies.

Intheyear2016,CeleoRedesBrasil

initiatedtheCorporateIntegrity

Program(CIP),withtheadhesionof

allemployees.Theobjectiveofthe

programistoguidetheemployees

ofCELEOanditssubsidiaries

regardinginternalcontrolsand

controlconceptsandmethodsthat

shouldbeadoptedtoimprovethe

parametersandethicalstandards

ofcontrols,transparencyand

efficiency,inadditiontocomplying

withlegalrequirements.

Aswellaspromotingasetof

internalmechanismsandprocedures

forintegrity,auditing,andeffective

applicationoftheCodeofEthics

andtheStandardsofConduct,the

programactsasatransparency

channelforemployees.The

managementoftheCIPisthe

responsibilityoftheCorporate

andLegalDepartment,which

isresponsiblefordirectingthe

committee‘sactivities,aswellas

internallyinvestigatinganyreports

and/orsuspicioussituations.

In2017,theCompanyhiredan

externalauditortoassessthe

incorporationoftheCorporate

IntegrityProgramintomanagement,

conferringalevelof3onascaleof

1to5.Twentyrecommendations

wereflaggedup,fourofwhichare

mandatoryandtheother16areat

prioritylevel.

Ethical Management

CELEO Redes Boards of DirectorsCELEO Concesiones 51% | APG Infrastructure 49%

Members of the Board:Joaquín Gómez de OleaJose Angel Lostao

Dirk HoversRobert Jan Bakker

Corporate ServiceAgreement

ManagementTeam

Jaime SáenzSantiago OraáÁngel OrtegaFrancisco ChicaManuel Sanz

ESG & QualityComitee

ESG & Quality ResponsibleMarcelo Vinicius

MembersFrancisco ChicaAlan HeinenMauricio ScovinoAugustinho SimoesMarcus BalataJosé Renato

Environment ResponsibleCristopher Cesar

H&S ResponsibleAlexandre Brito

Quality ResponsibleGisélia Ribeiro

CELEO Redes Brasil

ComplianceComitee

PIC ResponsibleAlan Heinen

PresidentAlberto Ferrández

MembersJaime SáenzFrancisco ChicaJosé Renato

GeneralManager

Francisco Chica

Operations, Legaland Economic Depts.

Development of New Business

Board ofExecutive Officers

Occupational Healthand Safety

Financial and AdministrativeDepartment

LegalCorporate

Human ResourcesPersonnel Department

Tax and accountingAdministrative

SuppliesFinancial

SustainabilityIMS

Operation and RegulationEnginnering and Maintenance

ITThe Environment

Projects

Legal and CorporateDepartment

OperationsDepartment

DEZ/2017

FEV/2018


Combating Corruption ACeleoRedesBrasiladvocates

transparentandefficientwork

practices,withinstruments

andguidelinestoprovide

guidanceonethicalconduct,

basedontheAnti-Corruption

Law12,846/2013andDecree

8,420/2015.In2017,100%

ofCELEO‘soperationswere

submittedtoriskassessments

relatedtocorruption.

Duringtheprocessof

preparationandimplementation

oftheCIP,theCompany

developedamaturitydiagnosis

anddefinedamatrixof27

compliancerisksbasedon

interviewswiththemain

membersoftheseniorand

middlemanagement.Action

plansandmitigatorymeasures

werethendrawnupforthese

risks.Inordertodealwiththe

risksidentifiedasbeingrelevant

forcompliancewiththeCIP,

aprocedurewasadoptedfor

theProcurementofGoods

andServiceswithassessment

ofsuppliersandthirdparties

(backgroundcheck),among

othercorporatepoliciesand

procedures.Inaddition,the

CIPreferencesspecificpoints

relatingtotheidentification

ofPoliticallyExposedPersons

ingoodsandservices

procurementprocess.

Thisworkalsoresultedinthe

creationofthe„Transparency

Channel“,ane-mailserviceset

uptoreceivedenunciations

andreportsofwrongdoing,

suggestionsordoubtsabout

theProgram.In2016,thefirst

yearoftheCIP,ananonymous

complaintaboutpossible

irregularitiesintheSuppliesarea

wasreceivedandsubsequently

monitoredandinvestigatedby

theCIPmanagerandreported

totheCommittee.Meetings

wereheldwiththeentireSupply

teamandafterconfirmationof

theincidencetheemployee

wasdismissed,followedby

restructuringofthepersonnelin

thearea.

In2017,theCompanycontinued

withtheCorporateIntegrity

Program,aswellasmaintaining

theTransparencyChannelas

amanagementtool.There

werenoreportsofcorruption

receivedviathecommunication

channelsormadeknown

directlytothecorporate

management.However,32

occurrenceswerereportedthat

contributedtotheimprovement

ofinternalprocesses.

TheCompanyalsoextended

theTransparencyChannel

toanexternalserversoas

toguaranteetheanonymity

ofthosereportingthe

occurrences,emphasizingthe

integrityandefficiencyofthe

CIP.

GRI 102-17, 205-1, 205-3

EMAIL: [email protected]

EXTERNAL CHANNEL: www.canaldetransparencia.celeoredes.com.br

Training for the Corporate Integrity Program (CIP)

GRI 205-2

OverthelasttwoyearsCeleoRedesBrasil

organizedtrainingontheCIPforitsemployees

andSeniorManagement.Duringthisperiod

therewerefourclasseswithathree-hour

workloadinvolvingtheparticipationof

approximately150professionals,representing

76%ofthetotalworkforceandincluding

25fromtheSeniorManagementandthe

ComplianceCommittee.204employees

receivedtrainingin2017.

Doubts / Others (4)

66 %

13 %

6 %

6 %

3 %

3 %

3 %

Direct Contracting (20)

Conflicts of Interests – General (3)

Not applicable to the CIP (2)

Report of possible Fraud (1)

Request for Sponsorship – outside of the CIP (1)

Gifts (1)

Occurrences of CIP - 2017


CIP Highlights in 2017

25DisseminationoftheCIPinaTechnicalWorkshopwith

25participants

Disseminationofthethemeviathe

internalcommunicationchannelsandtheIntranet

56Inductionwith

56newemployees

101Trainingon„ProfessionalEthicsandtheCorporateIntegrityProgram“attheIIISIPAT,attendedby101employees

2Twogroupsretraining

attheUberlândiatrainingcenter,with38employees

inattendance.

CELEOworksinaccordancewiththe

currentlegislation,consideringthe

particularitiesoftheelectricsector

inallregionswhereitoperates.The

Legalareaisresponsibleforcontrol

ofcompliancewithlegislation

andlegalrequirements,seeking

toimproveinternalprocedures

inordertostrengthenCorporate

GovernanceandtheIntegrated

ManagementSystem.

Duringtheyear,twocasesof

arbitrationwererecordedfor

contractual/commercialmatters,

butnonerelatedtonon-compliance

withthelaw.CeleoRedesBrasil

declaresthatithasnotidentified

anynon-compliancewithlawsand/

orregulationsinthesocialand

economicareasin2017.

Regardingenvironmentalissues,

theCompanystrictlymonitorsthe

constraintsofitsenvironmental

licensesandcertificatesandhas

operationalproceduresinplace

tomeetenvironmentalstandards

thatareincompliancewithatleast

theminimumrequirementsof

environmentallegislation.Inorder

toensurethatallapplicablelegal

requirementsareidentifiedand

managedtheEnvironmentarea

hasstandardizeditsoperationsin

relationtofederallaws,makingan

exceptiononlywhentherearemore

stringentlocal(stateormunicipal)

parametersorwhendeterminedina

licensingprocess.In2017thetarget

ofzeropenaltieswasestablished.

However,onefinewasreceived

attheendoftheyear,referringto

non-compliancewithenvironmental

conditionsin2010-2011,atthetime

managedbyPlena,resultinginafine

ofBRL35,800.

GRI 419-1, 307-1

Compliance



CorporateResponsibility

Sustainability is a value for the Company. When defining its strategies, CELEO evaluates the opportunities, risks and impacts of its business to society and to the environment.

CELEOdefineditsstrategicgoalsfor

theshortandmediumterm.Thegoals

arereviewedannuallybytheBoard

ofExecutiveOfficersandmanagers

duringthestrategicplanningprocess,

whichincludesanalysisofchanges

ininternalandexternalscenariosin

ordertosidestepadversitiesthat

couldaffectitsabilitytoachievethese

results.

TheStrategicPlanningprepared

fortheperiod2017-2021includes

strategiesforgrowthandleverage

ofthebusiness.ItalsodefinesAnnex

I,aspecificdocumentdealingwith

sustainabilityaspectsinthebusiness,

knownas„Environmental,Social

andGovernance“(ESG),which

presentsthesustainabilitygovernance

structure,aswellasitsactionsand

goalsforthecomingyears.

TheESGindicatorsareperiodically

assessedbytheSeniorManagement

atmeetingsandthroughmonthly

reports.Toincentivisetheteams,the

CompanydefinedESGtargetslinked

tothevariableremuneration(bonuses)

ofallemployees,atalllevels.

CELEOalsoestablishedthe„IMS

Policy“,withthepurposeofdirecting

itsactivitieswithregardtointegrity,

quality,theenvironment,healthand

safetyandsustainability.

Onthegloballevel,theESG

performanceindicatorsarebeing

submittedtoGRESBforthefirst

timeinordertocompareCELEO

withothercompaniesinthesector

andthusproposeimprovementsto

management.

ESG

CIP

RiskManagementEngagement

IMS

Transparency andaccountability Integrity

Quality, healthand safety andthe environment

Risks andopportunitiesmanagement

Strategic GoalsGRI 102-28

Sustainability Strategy

Sustainability Strategy


CeleoRedesBrasil’s

sustainabilitystrategyisguided

bythedirectivesoftheElecnor

Group,whichconsidersthe

issueinitscorebusinessand

thereforeseekstodisseminateit

toallcompaniesinwhichitholds

acorporateinterest.

Havingestablishedthisstance,

CELEOisclearaboutthe

impactsofitsactivitieson

people‘slives,societyandthe

environment.Therefore,itseeks

toincorporategoodpractices

intoitsbusinessstrategies,not

onlygeneratingvalueforthe

Companybutalsocontributing

tosustainabledevelopment.Its

infrastructureprojects(energy

transmission)arealigned

withglobalchallenges,which

seektoguaranteeaccessto

energy,contributetosocial

andeconomicdevelopment,

generatejobsandincome,etc.

Inpractice,thesustainability

guidelinesarealignedwiththe

managementoftheCompany,

whichcombinesIntegrityin

relationswithqualityofservices,

ensuringhealthandsafetyin

operationsandcompliancewith

environmentalrequirements.To

completethiscycle,CELEOhas

beenestablishingengagement

actionstoprovidetransparency

andaccountabilitywithits

stakeholders.

CeleoRedesBrasilfollowsthe

guidelinesofitsshareholders

regardingparticipationinglobal

commitments.TheElecnorGroup

andAPGaresignatoriestothe

PrinciplesoftheUnitedNations

GlobalCompactandtheSustainable

DevelopmentGoals(SDGs).

AlthoughtheCompanyisnotyet

aformalsignatorytotheGlobal

CompactandtheSDGs,the

NewBusinessDevelopmentand

Sustainabilityareahasmapped

whichSDGsarealignedwiththe

Company‘sbusiness.Inaddition,

CELEOcomplieswiththeprovisions

oftheAnti-CorruptionLawandits

regulations(Lawno.12.846/2013)and

DecreeNo.8,420/2015,whichapply

toPrinciple10oftheGlobalCompact.

InMay2018,CELEOsigneda„Letter

ofCommitment“aspartofthe

processofjoiningtheUnitedNations

GlobalCompact.

• Electricityisabasicgoodandcontributes

toimprovingthequalityoflifeof

entirepopulationsandtheeconomic

developmentofcountriesandtheworldas

awhole(Goals1,2,3and10).

• Themainimpactoftheprojectsisto

improveandensurethereliabilityofthe

NationalInterconnectedSystem(SIN).

Indirectly,itdiffuselybenefitssocietyasa

whole,reducingpovertyrates(Goal1)and

increasingaccesstoasecureenergysource

(Goal7).

• Theprojectsalsogeneratehundreds

ofdirectandindirectjobsduringthe

constructionphase,atwhichtimedecent

workingconditionsareprovidedforall

employees(Goal8).

• Theprojectshelpincreasethesupplyof

renewableenergy(Goals11and13).

CELEO’s business activities and the SDGs

Voluntary CommitmentsGRI 102-12


Thecommitmenttomanagement

focusedonresultswithregards

tothesustainabilityaspects

arelaidoutinthetablebelow,

demonstratingthecommitmentof

theCELEOteamtofindingsuitable

andachievablesolutionsforthe

business:

Commitments Assumed

Performance

Governance

Corruption, Ethics Management and Compliance - Evolution ofMonitoring and Maturity

Commitments Undertaken 2018

Integrated Management System (quality, environment, health and safety)

1st Sustainability Report (GRI Standards)

Updating of Socio-Environmental Reports ANEEL (10 concessionaires)

Participation on the GRESB Platform

Thorough Corporate and Contractual Review (Internal Due Diligence)

Operacional

Control of the Company's Archive

Availability of Facilities (Transmission Line, Transformer, Static Compensators)

Target / Action

ESG Performance Indicators - Sustainability - IMS - CIP

Reduction of Judicial Liability (landholding, regulatory, number of cases,contingencies, impacts of convictions, ...)

Failure Rate (Transmission Lines: General, 500kV and 230kV)

Failure Rate (Equipment: Transformers, Reactors and Static Compensators)

Variable Portion/Gross RAP

0 serious incidents

Frequency Rate (Own Employees/Subcontracted

Environment

Avoidance of Environmental Penalties (compliance with the conditionsof Licenses: LP, LI, LO and/or Grants)

First Greenhouse Gas Inventory (GHG Protocol)

Standardization of structures for storing waste from substations

Disposal of demobilized batteries via Reverse Logistics

Standardization of effluent treatment systems (septic tanks)

Standardization of water consumption units (SEs and Maintenance Bases)with hour meters and water meters

Reduction in Water Consumption (Volume consumed m³)

Forest Replanting

Social

Engagement with Communities (improvement of communication channelsand profile mapping)

Training Plan (technical, behavioral, development)

Jobs Plan (responsibilities, qualification, experience, ...)

Implementation of Social Project:a) Atibaia (CRAS reform and technical staff training)b) Monte Santo de Minas (environmental education, construction of a sortingand composting plant, selective rubbish collection)

Basic Quilombola Environmental Project

Basic Indigenous Environmental Project

Economic

Refinancing Structuring

Financing of Reinforcements

BNB Consultation Letter, Structure of Guarantees and Issuance of REIDI

Deployment of Tax Robot and Registration of Materials

Return of Equity and Substitution of BNDES Bonds

Approval of SUDAM Incentive

Implementation of the KPMG ActionPlan - 2018 (2nd CIP audit – Planned for1st semester/2019)

ISOs and OHSAS Certification4th Quarter/2018

Audited and Published - April/2018

Send to Aneel - April/2018

UpLoad: Apr - Jun/2018

4th Quarter/2018: Update of theCompany's Securities

4th Quarter/2018: Completion ofthe GEDOC Project

15 to 20% reduction in the number oflawsuits (Base: Dec 2017 -> 89 cases)

99.7%

Monitoring

Monitoring

0.5% and provisions

0

Fr <7 / Fr <9

Sr <0.15 / Sr <0.3

0 Penalties


5 facilities

100%

3 systems

2 substations

Reduce water consumption by 3% inat least 2 facilities

10 hectares - CAIUA20 hectares - JTE

Completion of the Integra Project

> = 75% compliance with plans

100% of jobs described

CANTE

Completion - IMTE

Execution - CAIUA

LTT and VCTE

2nd Quarter/2018 - PTE and LTC

2nd Quarter/2018 - JTE - Tramo Sul

CANTE

SITE

CELEO

Severity Rate (Own Employees / Subcontracted)

Performance

Governance

Corruption, Ethics Management and Compliance - Evolution ofMonitoring and Maturity

Commitments Undertaken 2018

Integrated Management System (quality, environment, health and safety)

1st Sustainability Report (GRI Standards)

Updating of Socio-Environmental Reports ANEEL (10 concessionaires)

Participation on the GRESB Platform

Thorough Corporate and Contractual Review (Internal Due Diligence)

Operacional

Control of the Company's Archive

Availability of Facilities (Transmission Line, Transformer, Static Compensators)

Target / Action

ESG Performance Indicators - Sustainability - IMS - CIP

Reduction of Judicial Liability (landholding, regulatory, number of cases,contingencies, impacts of convictions, ...)

Failure Rate (Transmission Lines: General, 500kV and 230kV)

Failure Rate (Equipment: Transformers, Reactors and Static Compensators)

Variable Portion/Gross RAP

0 serious incidents

Frequency Rate (Own Employees/Subcontracted

Environment

Avoidance of Environmental Penalties (compliance with the conditionsof Licenses: LP, LI, LO and/or Grants)

First Greenhouse Gas Inventory (GHG Protocol)

Standardization of structures for storing waste from substations

Disposal of demobilized batteries via Reverse Logistics

Standardization of effluent treatment systems (septic tanks)

Standardization of water consumption units (SEs and Maintenance Bases)with hour meters and water meters

Reduction in Water Consumption (Volume consumed m³)

Forest Replanting

Social

Engagement with Communities (improvement of communication channelsand profile mapping)

Training Plan (technical, behavioral, development)

Jobs Plan (responsibilities, qualification, experience, ...)

Implementation of Social Project:a) Atibaia (CRAS reform and technical staff training)b) Monte Santo de Minas (environmental education, construction of a sortingand composting plant, selective rubbish collection)

Basic Quilombola Environmental Project

Basic Indigenous Environmental Project

Economic

Refinancing Structuring

Financing of Reinforcements

BNB Consultation Letter, Structure of Guarantees and Issuance of REIDI

Deployment of Tax Robot and Registration of Materials

Return of Equity and Substitution of BNDES Bonds

Approval of SUDAM Incentive

Implementation of the KPMG ActionPlan - 2018 (2nd CIP audit – Planned for1st semester/2019)

ISOs and OHSAS Certification4th Quarter/2018


Send to Aneel - April/2018

UpLoad: Apr - Jun/2018

4th Quarter/2018: Update of theCompany's Securities

4th Quarter/2018: Completion ofthe GEDOC Project

15 to 20% reduction in the number oflawsuits (Base: Dec 2017 -> 89 cases)

99.7%

Monitoring

Monitoring

0.5% and provisions

0

Fr <7 / Fr <9

Sr <0.15 / Sr <0.3

0 Penalties


5 facilities

100%

3 systems

2 substations

Reduce water consumption by 3% inat least 2 facilities

10 hectares - CAIUA20 hectares - JTE

Completion of the Integra Project

> = 75% compliance with plans

100% of jobs described

CANTE

Completion - IMTE

Execution - CAIUA

LTT and VCTE

2nd Quarter/2018 - PTE and LTC

2nd Quarter/2018 - JTE - Tramo Sul

CANTE

SITE

CELEO

Severity Rate (Own Employees / Subcontracted) ESG Performance Indicators - Sustainability - IMS - CIP


CeleoRedesBrasilunderstands

thatengagingwithstakeholdersis

aprocessofparamountimportance

forthesustainabilityofitsbusiness.

ThisprocessrequirestheCompany

tohaveatransparenttwo-way

relationshipthroughwhichthe

expectationsofstakeholdersare

consideredindecision-making.

Awarethatmuchremainstobedone

toclosethecycleofengagement,

theCompanydedicateseffortsto

establishingeffectivestrategiesin

thisarea.

In2017,thestakeholder

engagementprocesswasreviewed,

beginningwiththemappingof

stakeholders.The„Stakeholder

CommunicationProcedure“wasalso

updatedtoensureasystematicflow

ofinformation,whetherinternally

foremployeesandshareholdersor

externallyforregulators,customers,

suppliers,communities,etc.

Inthecaseofshareholders,for

example,theBoardofDirectors

ofCeleoRedesSLtransmits

itsassessmentsofpotential

vulnerabilitiesandprojectsunder

development,aswellasmonitoring

bestgovernancepractices.The

Board’sdecisionsaremanaged

bytheManagementTeam,which

directsthemtothelocalgovernance

managementteam,throughthe

BoardofExecutiveOfficers.With

regardstocommunityengagement,

CELEOcreatedtheIntegraProgram,

whichservesruralcommunitiesin

theareaofinfluenceoftheLinha

deTransmissãoTriângulo(LTT),as

wellasotherconcessions(CTE,LTC,

VCTE,ENTE,IMTEandBTE).The

programalsocoverstherelationship

withtraditionalandindigenous

communities.

Inaddition,CeleoRedesBrasil

offersacentralizedchannelfor

receivingcomplaintsand/or

suggestions,doubtsandqueries

throughtheOmbudsman‘sOffice

(0800941-2667).Threecomplaints

werereceivedthroughthischannel

in2017fromthepopulation

surroundingtheLTTandVCTElines,

withquestionsandconcernsabout

theimpactsoftheprojects,one

ofwhichreferredtoenvironmental

impacts.Todealwiththeseissues

teamsfromtheconcessionswere

senttoprovideclarificationand

reinforcetheAwarenessCampaign

withthelocalresidents.

Stakeholder Engagement

GRI 102-40, 102-43, 103-2

Stakeholder

Shareholders, Investorsand Partners

Sustainableprofitability

Need

Integrated Management System (IMS),according to the requirements of ISO 9001,ISO 14001 and OHSAS 18001

Sustainability Action Plans (SAP)

Report to GRESB

Reports and periodic meetings

FrequencyForm ofEngagement Means of Attending to this Group

Empowerment Ongoing

Financial Institutions Paying back of loans Transparently sharing reliable informationwith the financial agent Transaction Within the term of use

of the financed resource

Customers Provision of publictransmission service

Monitoring of the ESG PerformanceIndicatorsTransaction Throughout the

concession period

Public Administrationand Regulatory Agencies

Compliance withcurrent legislation

Implementation of the legislation controlsoftware applicable to the scope of CELEOactivities, favoring the management andenforcement of applicable laws

Involvement Ongoing

External Providers Execution of the required service or delivery

Elaboration of contractual criteria forintegrity, quality, the environment, andhealth and safety

Integration of external suppliers beforeservice execution (or goods supply),informing them of the dangers, risks andenvironmental impacts and aspects towhich they will be subjected.

Conduct due diligence (qualification andperformance evaluation)

Transaction

Before, during, andafter providing the

service or supplyinggoods

Employees Employment and income

Implementation of the necessary resources (adequate furnishings, training, cleaning andmaintenance of the work environment, worktools, educational development)

Participation and consultation of employeesand communication channels (internalnewspaper, ombudsman, Intranet, dialogues,meetings, feedback)

Involvement Ongoing

Industry Associationsand Employers

Be the institutional"Spokesperson"

for the common interestsof its associates/members

Participation in the WGs of the associations,public hearings and consultations, industryforums/meetings/events, compliance withthe collective agreement

Involvement Ongoing

CommunitiesDefend the areas occupiedand natural resources used,related to their sustainability

IImplementation of environmental programs,Integra Project and anti-wildfire campaignsand hosting of public hearings, whennecessary

Involvement

During the stage ofpreliminary licensing

and installation ofnew developments,

as well as duringthe operation

Scientific and AcademicInstitutions

Produce and disseminatescientific and technological

knowledge

Compliance with the requirements establishedin the ANEEL R&D ManualInvolvement Ongoing

MediaReceive correct information

in response to questionsasked

Through the "Spokesperson" of CELEO,using the requested means of communication(TV, radio, newspaper, e-mail), being properlyprepared

Inform When requested


Integra ProgramFollowingitsstakeholderengagement

strategies,CELEOcreatedtheIntegraProgram

toengagewithruralcommunitiesintheareas

arounditsconcessions.Intheyear2017alone,

1,085propertieswereregistered.Inadditionto

thefamiliesowningtheseruralproperties,the

targetpublicforrelationshipsisthemunicipal

government,federalandstateagencies,public

servicesandlocalleadership.

Theprogramwasdesignedbasedon

internationalstandardssuchasAA1000andthe

GRIindicators,torunforaperiodoffouryears.

In2017,registrationof80%oftheproperties

andfamilieswascompletedandaction

planshavebeendrawnupforsomeofthe

concessions.Otherstrategicactionsincluded

thecreationoftoolstoguagetheperceptions

ofthepopulationforsubsequentincorporation

intoCELEOactivities,aswellasthetraining

ofO&Mteamsinassertivecommunication

andcrisismanagementsoastoavoidconflict

withlocalleadersintheareaofinfluenceof

TransmissionLines.

Cycle of the Integra Program Campaigns

EnvironmentalVulnebability

SensitivityDiagnosis

SocioeconomicDiagnosis

Social Registerof Rural

Properties

PreliminarySurvey

InternalTraining(O&M)

ReviewPrintingSending

Educational Materialfor Distribution at

the TLs

Licenses

Mapping ofLandowners

Status of PEAs and PCSs

Status of WildfirePrevention andCombat Plans

Status of AgreementContracts PREVFOGO/IBAMA

O & M Teams Data

TL Route Data

DisconnectionHistory Data

Environmental Studies

Year I Educationalmaterial

Socialregistration

LTT and BTW lines

MapSensitivityWildfires

Training(O&M)

Year II RegistrationIMTE, ENTEand VCTE

lines

Educationalmaterial

Report

Year III RegistrationLTC and CTE

lines

Educationalmaterial

Report

Year IV Educationalmaterial Report

GRI 413-1


Interaction with the Brazilian Energy Sector

GRI 102-13

Participationinindustryassociations

allowsCELEOtoremainuptodate

andreceivefirsthandknowledgeof

allofthetechnological,economic

andregulatoryinnovationsinthe

electricsector.Italsoallowsthe

Companytoactivelyparticipate

inthecreationandpromotionof

policiesandinnovations,which

simultaneouslyplacesitinthe

positionofaninstigatoranda

beneficiary.

During2017,CELEOparticipated

inforums,meetingsandworking

groupsofbusinessorganizations

andindustryassociations,asshown

inthetablebelow:

ABDIB-BrazilianAssociation

ofInfrastructureandBase

Industries

Involvement: ParticipatesintheTransmissionCommittee;

Issues discussed: Reviewandimprovement

ofNormativeResolutions;

meetingswithindustry

regulators(ANEEL,MMEand

EPE);updatingofANEEL‘s

ReferencePricesDatabase.

ABRATE–BrazilianAssociation

ofElectricityTransmission

Companies

Involvement:Member;Functions: CELEOjoinedtheassociationattheendof2017.

ABSOLAR–Brazilian

PhotovoltaicSolarEnergy

Association

Involvement: AmemberandparticipatesintheCentralized

GenerationWorkingGroup;

Issues discussed:SolarEnergyAuctions;

FlowMargin;

ThirdPartyStudies;Reversal

ofReserveEnergyContracts;

NetworkProcedures;etc.

ABRAPCH–SolarEnergy

Auctions;FlowMargin;Third

PartyStudies;Reversalof

ReserveEnergyContracts;

NetworkProcedures;etc.

Involvement: Member;Issues discussed: Participationofthisenergy

sourceinenergyauctions.

OfficialSpanishChamberof

CommerceinBrazil

Involvement:Member;Issues discussed:Institutionalmeetings,meetings

withstrategicplayersintheenergy

sectorandthefinancialmarket.

ComplianceInstituteRio Involvement: Member;Functions: Tocontributeinanorganizedandsustained

waytotheimprovementof

businesspractices,thebusiness

environmentandethicalstandards

inpublic-privaterelationships.

NationalElectricSystem

Operator(ONS)

Involvement: TheExecutiveDirectorparticipatesasa

memberoftheBoard;

Functions: ApprovetheannualbudgetpresentedbytheBoard

ofExecutiveOfficersofthe

ONS;approveandmonitorthe

investmentplan;monitorand

analyzethemanagementofthe

BoardofExecutiveOfficers.


Risks and Opportunities Management

SWOT Matrix

RiskmanagementisoneofCELEO‘s

prioritiesasitseekstoprevent,

reduceandcontroltherisksinherent

toitsactivities.TheCompany

createdaRiskManagement

Program–whichisaccessible

toitssubsidiaries–definingits

methodologyandproceduresfor

managingtherisksassociatedwith

thebusiness,whichareclassified

intothreecategories:Financial,

StrategicandOperational.Therisks

werestratifiedwithineachofthe

categoriesoftheprimaryprocesses

(Promotion,Financing,Construction

andO&M).

Responsibilityforriskmanagement

isalreadypartofthedailyroutine

ofemployees.Therefore,thereisa

dedicatedstructurewithintheIMS

forriskmanagementbasedonISO

31000(RiskManagement-Principles

andGuidelines)andisalsoISO

9001(QualitymanagementSystem).

Riskmanagementisaddressedby

theCommittee,withthefollowing

objectives:

• Analysethecontextofthe

organization;

• Identify,analyse,assessand

dealwithGlobalBusinessrisks;

• Guidetheorganizationin

theprocessofidentification,

analysis,assesmentand

treatmentofProcessrisks;

• Monitorcompliancewith

establishedresponsestorisks;

• Approveriskmanagement

reportsforprocessesrelatedto

Quality,theEnvironmentand

HealthandSafety;

• ApprovetheannualQuality,

EnvironmentalandHealthand

Safetyplans.

TheSeniorManagementis

responsibleformanagingthegloball

businessrisks,whichareassessed

withinthecontextofthescenarios

thatcouldaffecttheachievement

ofCELEO‘smission.TheCompany

assessrisksduringdifferent

stages:promotion(participationin

auctions);financing;construction

management-includingthehiring

ofanEngineering,Procurement,

andConstruction(EPC)firm;and

theoperationandmaintenance

phaseoftheprojects.With

regardstoopportunities,the

SeniorManagementalsoassesses

theeconomicandregulatory

scenario,aswellasthecompetitive

environmentinthecountry.

Businessrisksandopportunitiesare

formallyreviewedonanannualbasis

bytheGovernance,considering

economic,environmentalandsocial

aspects.

GRI 102-15; 102-31

1Contractedcompanyresponsiblefortheengineering,procurementandconstructionoftheelectricitySubstationsandTransmissionLines.

SWOT

Strengths Weakness

ThreatsOpportunities

• Stable regulation;• Predictable revenue;• No volume risk;• Minimal credit risk;• Lower risks of the energy sector;• Experienced management team;• High level of commitment among all hierarchical levels; • Strong culture of resource management;

• Incorporation of CIP into the IMS;• Strong shareholders and excellent local partnership with Copel;• Existing project portfolio is suitable for synergies;• Access to and familiarity with BNDES financing;• Infrastructure available;• Financial Solvency;

• International capital costs; • Investments via financial meritocracy limited business to business;• Weak economies of scale due to the smaller portfolio of projects;• Absence of a personnel retention program;

• Need to optimize some control tools;• Limited spread of strategic vision across all levels of the organization;

• Favorable conditions for investments in the country;• Expectation for strong expansion of new projects;• New Reinforcements;• M & A - third party projects;• New funding alternatives;• Possibility of refinancing of operational projects;

• Tax breaks;• Diversification in New Businesses;• Strengthening engagement with stakeholders;• Development of R&D Projects;

• Fraud and Corruption;• Increase in the Competitiveness of Auctions;• Stricter legal requirements;• Political instability;• Extreme weather events;

Risk Management

Global Business Risks Process RisksClassed as Oriented by Risks

with impacts on

Financial

Strategic

Operational

Based on achievingthe mission

SustainabilityReport

Health and Safety

The Environment

Quality AnnualManagement Plans

Managed by those responsible for the

environmental, health and safety and quality

areas


Business Risks

Process Risks

Integrated Management CELEO’sinternalmanagement

combinestheguidelinesofthe

IntegratedQuality,Environmental

andOccupationalHealthand

SafetyManagementPolicywiththe

CorporateIntegrityProgram.

Thelasttwoyearsrepresent

amilestoneforthecompany

withtherestructuringprocess

ofthemanagementmodel,

whichestablishesthereviewand

reformulationofprocedures;the

creationandrevisionofpolicies;

thecreationofnewareas;hiring

ofnewprofessionals;andinternal

promotions.

Managementstandardswerealso

definedforthisareaandcover

ethicalandsocio-environmental

aspectstoguidethequalification

ofsuppliersandtheprocurement

ofequipmentandmaterials,as

wellasthecontractingofservice

providers.Thesechangesapply

totheheadquartersofficeinRio

deJaneiro,theoperationand

maintenanceservicebasesin

Uberlândia(MG),ViladoConde

(PA)andImbirussu(MS)andits

substationsandtransmissionlines

geographicallyspreadthroughout

thecountry.

CELEOalsoimplementedthe

IntegratedManagementSystem-

basedontheISO9001,ISO14001

andOHSAS18001standards-which

wassubjectedtointernalaudit

withtheobjectiveofcontinuous

improvementofitsactivities.IMS

planningandimplementation

activitiestookplacethroughout

2016and2017.In2018the

processesandproceduresare

duetobereviewedandimproved

sothatIMScertificationcanbe

achievedbytheendoftheyear.

21 professionals trained in the IMS:• 12employeesreceived

IMSAudidorTraining

(ISO9001,ISO14001

andOSHAS18001)

• 9employeestrained

inApproachtothe

Standards(auditing

oftheSenior

Management)

Financial RisksRisks and impacts of fluctuationsin the financial market

CreditLiquidityVariations ininterest rates

Strategic RisksChanges in the energy secto(regulatory and strategic agreements)

Regulatory ChangesCompliance, Corruption, FraudContractual Disputes

Operational RisksProvision of services and legalobligations

Unavailability of FacilitiesSocial ImpactQualityEnvironmental ImpactSafety, Health and Well-Being og Workers

Variations in the IPCAExchange Rates

Environmental Risks Classifiied by Severity, Influence and FrequencyEnvironmental Aspects and Impacts Methodology - LAIA

Occupational Healthand Safety Risks

Classified by Frequency and SeverityDangers and Risks Methodology

Quality Integrated Management System – IMS IMS Committee


General Principals of the IMS

Footnote

CeleoRedesBrasilhasestablished

principlesthatshouldguidethe

Company‘sperformanceintheareas

ofQuality,theEnvironmentand

OccupationalHealthandSafety.

Thiscommitmentshouldprovide

areferenceforthedefinitionand

revisionofthegoalsthatseek

thecontinuousimprovementand

effectivenessoftheIntegrated

ManagementSystem.

TheIMSprinciplesare:

• Preventdamagetothehealth

andsafetyofemployees;

• Considerenvironmentaland

socialaspects,mitigating

andoffsettingimpactsonthe

surroundings;

• Guidetheorganizationinthe

analysisofprocessesandrisks,

promotingimprovements

thatfavorthesustainabilityof

investments;

• ImplementaGoodCorporate

Governancepolicy,fostering

transparencyandStakeholder

satisfactioninitsrelationships;

• Complywithapplicable

currentlegislationandother

requirementssubscribedby

CeleoNetworksBrazilinallthe

marketsinwhichitparticipates;

and

• Providetheresourcesnecessary

fortheimplementationofthis

IntegratedManagementPolicy.

Increase customer satisfaction by promoting quality and continuous improvement of processes.

Put in place a Corporate integrity Policy to foster transparency of information and good conduct practices.

Mitigate and control our risks, especially the risk of electric shock and working at height. Promote injury and illness prevention and improve the operational health and safety condiditons for our employees and partners.

Conduct our activities with consideration for the environment, mitigating our impacts, especially with regards to oils leaks and waste management.

Consider economic, social and environmental factors in our business management, in order to grow sustainably.

In pursuit of excellence in the services of operations and maintenance of transmission lines and electricity substations, Celeo Redes Brasil is commited to the constant improvement of its integrated management system and meeting legal and other requirements, as well as;


Professional HiringIMS Authorized

SpecializedConsultancy BVIMS Processes

and Procedures

Specialized Consultancy HGBImplementation

of IMS

1st Audit Internal

Training - Focal Points ISSO Standards

Training of InternalAuditors IMS

Review andImplementation

of IMS Documents

Handling ofNon-compliance

Action Plan(total: 55)

Identification andAnalysis ~ 540 Legal

requirements (standards)

Review and Approval215 IMS documents

Critical AnalysisSenior Management

2nd AuditInterna

Pre-AuditAENOR

Certification Audit AENOR

Possible Adjustments(deadline)

AENOR Certification

1º quar/2016 2016 May - Dec/2016

2017 until Apr/2018 Aug-Sep/2017 Sep - Dec/2017

Feb/18 Apr/18 Jul/2018 Sep/2018 Dec/2018


Economic-financial

The economic-financial performance demonstrates the solidity of CELEO’s business, which has attracted new investments for its projects and developments. The Company seeks to invest in projects and initiatives that add value to its assets.

FinancialPerformanceCELEOisunwaveringinits

commitmenttolong-term

investmentinthecountry.In2017,

totalinvestmentsinthecountry

(ex-equivalents)reachedBRL3.7

billion,anincreaseofBRL795

millioncomparedto2015.The

investmentsmadewerefinanced

withthedividendsreceivedthrough

itsconcessionairesandshort-

termloans,tocomplementthe

contributionofcapitalcommittedin

theinvestmentplans.

TheConsumerPriceIndex(IPCA)

andtheLong-TermInterest

Rate(TJLP)indexesarethemain

economicindicatorsthathave

animpactontheeconomic

andfinancialperformanceof

CeleoRedesBrasilS/A(CELEO).

Contractually,inthetransmission

segmentthePermittedAnnual

Revenue(RAP)isadjustedbythe

IPCA,andtheservicingoflong-

termdebt(indexedtotheTJLP)

isadjustedbytheinterestratefor

long-terminvestments.Thepolicyof

controllinginflationbymaintaining

realinterestratesatahighlevelhas

hadapositiveeffectoncontrolling

inflation-reducingIPCAtosingle

figures-buthasreversedtheTJLP

bias,whichremainedbelowthe

IPCAvariation.Inthelasttwoyears,

theTJLPhadrecordedrealvariation

abovetheIPCA,withadirectimpact

ontheincreasingcostofservicing

debtforCELEO’sconcessionaires.

Economic Scenario

Summary Table - Celeo Redes Brasil S/AShareholding CriteriaBy Equity Equivalence

BRL Thousands

2,857

2,170

1,377

376

217

170

172

Amount of Investments

Total Assets

Net Equity

Net Debt

Net Operating Revenue

EBITDA

Net Profit

2015 20172016 Comments

3,196

2,294

1,452

377

232

167

99

3,652

2,326

1,517

328

195

123

86

ANEEL Investment

Consolidated shareholding






78.7%% Margem EBITDA 72.2% 63.1%

Net operating revenuein millions (BRL)

EBITDA

Investment in Brazilin billions (BRL)

2016

2016

2016

2015

276

2,9

283

3,2

3,7

2017

2017

inmillions(BRL)

2017

167123

211 211

IPCA & TJLP ( ex-IPCA) % year

2016

6.29%

2017

IPCA

TJLP2.95%

2015

10.67%

3.94%1.14%

-3.32%

Source:AuditedFinancialStatements-CeleoRedesBrasilS/A

Source:BancoCentraldoBrasil

232

195

NetRevenue

AdjustedNetRevenue

EBTIDA

EBTIDAadjusted

NetRevenue

AdjustedNetRevenue

GRI 201-1


In2017,CELEO‘sconsolidatednet

revenuewasBRL195million,afallof

16%onthepreviousyear.Thisresult

wasdrivenbytheeffectofafallin

theconsumerpriceindex(IPCA)on

incomefromtheconcession‘sfinancial

assets,anintegralpartofnetincome.

ExcludingtheeffectoftheIPCAon

incomefromtheremunerationof

financialassets,netrevenuereached

BRL283million,reflectinga2.5%

increaseontheadjustedbaseof2016.

EBITDAreachedBRL123million,down

26%onthepreviousyear.Excluding

theeffectofinflationonincome

fromfinancialremuneration,EBITDA

increasedtoBRL211million,remaining

atthesameadjustedlevelasin2016.

Value-AddedDistribution(VAD)

totaledBRL131million,distributed

asfollows:12%government;45%

employees;33%shareholders;and

10%thirdparties.

Financial and Economic Results

TheCompany‘sdebtcapacityis

limitedasaresultofthelong-term

agreementsenteredintobythe

concessionaireswiththeBrazilian

DevelopmentBank(BNDES),which

establishesrestrictiverulesonthe

sharingofguaranteeswithother

sourcesoffinance.Fundraising

bytheholdingcompanyismainly

determinedbytheexpectationof

thereceiptofdividendsfromits

concessionaires,whichconstitute

themainguaranteesfornew

financing,especiallyinthemedium

andshort-term.

CELEOmanagesitsassetsthrough

contractsforoperationsand

maintenancemanagement,aswell

asadministrativeserviceswith

itsrespectiveconcessionaires.

TheholdingcompanyusesERP

(EnterpriseResourcePlanning)

software,whichenablesthe

integrationofsupplymanagement

withtheAccounting,Financialand

Taxareas.

TheCompanyhasconsolidatedits

positionasamajorplayerinthe

electricitytransmissionmarket.In

2017,itdisbursedmorethan90%of

theloansreceivedfromBNDESfor

theCANTAREIRAproject,whichisin

theconstructionphase,representing

asuccessfulcaseintermsofthe

speedinthedisbursementprocess.

CELEOhasalsoaddednew

sourcesofcomplementaryfunding

fortransmissioninvestments.In

2017,thebookkeepingforthe

infrastructuredebenturesof

theCANTAREIRAprojectwas

completed,whichtriggeredstrong

demandfrominstitutionalinvestors

foracquisitionofthebonds

offeredbytheconcessionaireon

theSãoPauloStockExchange

(BM&FBOVESPA-B3).Itisalso

worthmentioningthatthisproject

obtainedAA+certificationfromthe

InternationalCreditRatingAgency

FitchRatings.

Indebtedness Asset Management

Diversification of access to financial capital

Theincreasedparticipation

ofLong-TermInterestRates

(TJLP)infinancing-bynine

percentagepoints-isrelatedto

thedisbursementoffinancingfor

theCANTAREIRAproject,fully

indexedtotheTJLP.Theincreasein

participationinforeigncurrencyis

relatedtothecontractingofaloan

witharelatedpartyabroadforthe

dischargeoffinancingcontractedin

2016,whichguaranteedthefunds

neededtocompletethecapital

contributioncommittedtothe

CANTAREIRAproject.

Thegraphbelowshowsthe

evolutionofCeleoRedesBrasil’s

netdebtinaccordancewiththe

auditedconsolidatedcriteriaofthe

companiesinwhichitholds100%

equityinterest.Attheendof2017,

theCompany‘sdebt(netofcashand

cashequivalents)totaledBRL328

million,representingareduction

ofBRL49millionasaresultofthe

constantamortizationsystem,which

presentsareductionofthedebt,

accordingtothedegreeofmaturity

oftheconcessionaires.

Net Debt in millions (BRL)

2016 377

3282017

2016 2017

TJLP82,4%

TJLP73%

PSI 7%

USD 5%

CDI 12%

IPCA 3%

PSI 5%

USD 10%

CDI 0%IPCA 3%

Source:AuditedFinancialStatements-CeleoRedesBrasilS/A


Thetransmissionsegmentwasoneof

themajorhighlightsoftheelectricity

sectorin2017,demonstratingdynamic

tendenciesdespitethetroubled

scenariointhesectorsincetheedition

ofProvisionalMeasure579in2012.

Aftergoingthroughaperiodofscarce

resources,thesegmentattractednew

investors,includinginvestmentfund

managers,energygenerationand

distributioncompanies,andmedium-

andsmall-scaleconstructioncompanies.

Inaddition,privatecompaniestookon

theroleofprotagonistsintransmission

auctions,previouslydominatedbystate-

ownedcompanies.

Theinvestmentsplannedforthecoming

yearsfortheexpansionoftheBrazilian

electricitytransmissionnetworkhave

awakenedtheinterestofthelargest

globalagentsinthesector.Thisappetite

isexplainedbythreemainfactors:

• Improvedremunerationfromthe

projects;

• Flexibilityoffinancingconditions;

and

• Longertermsfortheconstruction

oftransmissionfacilities,which

reducesrisks.

The2017auctionsheldinApriland

Decemberweremarkedbyintense

competitionbetweenprivateinvestors

(traditionalandnewentrants),the

absenceofstate-ownedcompaniesand

theentryofsmallandmedium-sized

constructioncompanies.Somelarge

playerswithregulatoryproblemsare

seekingalternativesthroughtheMarket

inMergersandAcquisitions(M&A).

Itisworthmentioningthatinrecent

yearsanumberofimportantprojectsdid

nottakeoff,whichispartlyexplainedby

verylargediscountsandmaybecome

acauseforconcern,requiringextra

attentiononthepartoftheregulator

withrelationtothemonitoringof

constructionworks.

Inthiscontext,CELEOhasstoodoutfor

makingsolidandstructuredinvestments

toachievechallengingtargets.This

year,theCompanycompletedprojects

beforetheregulatorydeadline,

increaseditsmanagementcapacity,

establishednewpartnershipsand

openedupnewsourcesofinvestment

foritsprojects.

Investments and New Business Participation

in Auctions• CeleoRedesBrasilwonthebidding

forlot2ofAuctionn.02/2017,held

bytheBrazilianElectricityRegulatory

Agency(ANEEL)attheheadquarters

oftheSãoPauloStockExchange.The

projectforeseestheconstructionof

transmissionlinesandsubstations

inthestatesofPiauíandCeará.

AccordingtoANEEL,investmentsof

theorderofBRL1.042billionwillbe

requiredandoperationsshouldbegin

in2023.

• CELEOparticipatedintheA-4/2017

Auction,whichrepresentedan

importantstepinthediversificationof

itsactivitiesinBrazil.Theshareholders

authorized-forthefirsttimeinthe

historyoftheCompany-participation

inamajorchallengeintheformof

contractingphotovoltaicsolarenergy.

Theprojectiscalled„SãoJoãodo

Piauí“andconsistsofsixphotovoltaic

plantslocatedinthestateofPiauí,

providingacombined209MWpunder

thegreenfieldmodality.



Operational Results have been appearing in increasingly significant numbers for the transmission sector. CELEO once again ranked as one of the best in the year.

2016

99.99%

2017

99.99%

2015

92.77%

2016

99.87%

2017

99.88%

2015

99.80%

2016

99.94%

2017

99.95%

2015

99.90%

2016

100%

2017

99.99%

2015

99.99%100%

99%

98%

97%

96%

95%

94%

93%

92%

91%

90%

Availability (%)

TransmissionLine Transformer Reactor StaticCompensators


CeleoRedesBrasiliscommitted

totheoperationalefficiencyofits

transmissionfacilities,ensuring

highlevelsofavailability,excellence

inoperationalcapacityand

competitiveregulatoryoperating

costs.AccordingtoTechnical

NoteNo.164/2017-SRM/ANEEL

of04/10/2017,theCompany

isrecognizedbytheBrazilian

ElectricityRegulatoryAgency

(ANEEL)asaBenchmarkinthe

OperationalEfficiencyRankings,

positionedin:

•1stplace:2015and2016

•3rdplace:2014

•8thplace:2013

Inordertoachievethese

parameters,thecompanymustcarry

outthemaintenancerequiredby

ANEEL’sNormativeResolutionNo.

669/2015-whichestablishesthe

minimummaintenancerequirements

fortheBasicNetwork(CELEOhas

setatargettocomply100%)–and

alsoperformsotherpreventive

andpredictivemaintenancethatit

considersessentialfortheuseful

lifetimeofitsequipment.

Thesubsidiariesproduce

operationalreportsonaday-

to-daybasis(whichresultin

safetyinspections)anddraw

upinterventionplans,with

investmentsinreinforcementand/

orimprovementprojectsand

operationalprojects.Maintenance

Plansaremanagedthroughspecific

indicators,whichcomplywith

theregulationsoftheregulator.

Anylong-termmaintenanceis

coordinatedwiththeexternal

agents(NationalSystemOperator,

generators,distributorsandother

transmissioncompanies).

Oneexampleofimprovementsto

thesystemisthe500kVAçailândia/

Miranda2TransmissionLine,where

thereweresuccessiveshutdowns

in2015causedbypollutionin

theinsulatorchains.From2016,a

methodwasdevelopedtoclean

theinsulatorswiththeTransmission

Linestillactive,inordertoavoiding

causingunavailabilityofthis

transmissionfunction.Withthe

monitoring,inspectionandcleaning

oftheinsulatorstherewerenonew

shutdownsinthelasttwoyears.

Inaddition,maintenancetothe

CoqueirosTransmissoradeEnergia

Concession(CTE)scheduledfor

2017wasextendedto2018,atthe

requestofthegeneratorsofthe

region.

Main Operational IndicatorsAvailability of the facilities TocalculateAvailability,thenumber

ofhoursthattheequipmentin

questionortheTransmissionLine

circuitisavailableisconsidered.

InthecaseofTransmissionLines,

availabilityiscalculatedforeach

100kmofline.Ingeneral,the

AvailabilityofCELEO’sTransmission

Functions(TF)areatexcellentlevels

ofabove99.80%.

GR4-EU28, G4-EU29

TheFailureRate(FR)iscalculated

fromthenumberoffailuresin

equipmentortheTransmissionLine

circuit.Inthecaseofequipment,

theindicatorrepresentsthe

forcedshutdownsthatoccurred

intheTransmissionFunctions.

ForTransmissionLines,theFRis

calculatedforeach100kmofline.

Therefore,theindicatorforFR

representsthenumberoffailures

occurringin100kmduringtheyear.

CELEOisremuneratedthroughthe

PermittedAnnualRevenue(RAP).

Thepaymentof100%ofRAPis

linkedtothefullavailabilityof

transmissionfacilities.TheVariable

Portion(PV)istheportiontobe

deductedfromtheBasePayment-a

figurerepresenting1/12oftheRAP

-forscheduledshutdownsorother

shutdownsthatresultfromevents

involvingthemainequipmentand/

orcomplementaryequipmentof

theTransmissionFunctionunderthe

responsibilityofthetransmission

concessionaire.

TheCompanycouldseeits

RAPreducedbyoneVariable

Portion(PV)duetotheeffective

availabilityofitsfacilities.Thisis

aresultofNormativeResolution

No.729/2016-ANEELofJuly1,

2016,whichestablishesprovisions

regardingthequalityofthepublic

electricitytransmissionservice

andincludesnewrulesforthe

applicationofthePV.Theseapply

totheavailabilityandoperational

capacityofthefacilitiesunderthe

responsibilityoftheconcessionaires

ofthetransmissionnetworksofthe

BasicNetwork.Severalcriteriafor

determiningPVwerechangedin

relationtothepreviousresolution-

RNNo.270/2007-impactingonthe

revenueofTransmissioncompanies.

The2016PV/RAPRatio(2.26%)was

directlyimpactedbytwoexplosions

thatoccurredincurrenttransformers

atSETucuruí.Consideringthat

thesecurrenttransformerfailures

havealsooccurredwithother

transmissionagents,theElectricity

SectorMonitoringCommittee

(CMSE)decidededatits178th

meetingon03/08/17thatthe

NationalSystemOperator(ONS)

wouldcoordinateanalysisofthe

explosionsofCurrentTransformers

(CTs)intheNationalInterconnected

System(SIN).Theaimistotryto

identifyspecificproblemsoccurring

incertaingroupsofequipment

andassesshowtoreplacethem

soastopreservethesecurity

oftheoperationoftheBrazilian

ElectricSystem.Aftertheprocess

ofinvestigationofthecauses,

CELEOunderstandsthatthereis

apossibilityofreversionofthe

lossofearningsasaresultofthe

applicationofthePV.

Asapreventivemeasure,the

replacementofthetransformers

wasincludedintheFacilities

ImprovementProgram.In2017,the

resultreturnedtonormalat0.58%.

Failure Rate Variable Portion

2016

2.40%

2017

3.67%

2015

4.88%

2016

3.31%

2017

4.37%

2015

5.55%

2016

4.30%

2017

5.13%

2015

6.27%

10

9

8

7

6

5

4

3

2

1

0

Failure Rate - TL

2016

0.00%

2017

0.00%

2015

0.00%

2016

0.08%

2017

0.27%

2015

0.50%

2016

1.50%

2017

1.51%

2015

0.50%

5,0

4,5

4,0

3,5

3,0

2,5

2,0

1,5

1,0

0,5

0,0

Failure Rate - Equipment

PV/RAP Ratio (%)

20162015 2017

2,5%

2,0%

1,5%

1,0%

0,5%

0,0%

0.58% 0.58%

2.26%

TLOverall TL-500kV TL-230kV

Transformers Reactors StaticCompensators


Since2012CELEOhasinternalized

operationsandmaintenanceactivities,

whichwerepreviouslyperformedby

contractors.Theinternalizationof

theseactivitieshasensuredgreater

reliability,optimizationofresources

andretentionoftechnicalknowledge,

withtheaimofprovidingoperational

efficiency.

CeleoRedesBrasilhasdedicated

itseffortstoimprovingitsprocesses

throughtheimplementationofIT

systems,includingtheuseofmobile

devicestocarryoutmaintenance

activities,asystemfordocument

managementandtheIntranet,which

allowsrapidanalysisofindicators

andreports,aswellasconcentrating

additionalmaintenanceandoperation

toolsinAdvancedAssetManagement

(AAM).Someexamplesofthe

toolsusedare:ControlofIncidents

andDefects;DailyOperational

Reports;requestsforinterventions;

serviceorders;maintenanceplans;

abnormalitiesandunresolvedissuesin

theassets;amongothers.

Tocontinuewiththisprocessthe

Companyhasmadecommitments

for2018relatedtothecreationof

newsolutions,withthepurposeof

providingspeedandefficiencyin

theexecutionandmanagement

ofprocesses.Thesesolutionswill

focusonriskmanagementandthe

performanceofsustainabilityaspects

usingdataanalysisandthegeneration

ofreportsandindicators.

Operational Efficiency GRI EU6

Responding to Emergencies

Inemergencysituationssuchas

failuresatitsfacilities,CELEOhas

ContingencyPlansinplaceforits

mainactivities.ThePlanscontain

theactionsnecessarytorestore

theaffectedfacilitiestonormal

operations,therebycontributing

todecreasingtheunavailabilityof

thefacilitiesaswellastosystemic

reliability.

Periodictrainingsessionsand

simulationofemergencysituations

arecarriedout,inaccordance

withthecontentoftheinternal

procedures.Theseprocedures

describetheprocessesand

responsibilitiesofeachareaof

CELEOtoassistintherecovery/

restoralprocess,aswellasdetailed

informationonthecharacteristics

oftheareaorsystemsinvolved.

Theaimistotrain,organize,

guide,facilitate,streamlineand

standardizeactions.

GRI EU21


Uberlândia Maintenance BaseTheUberlândia(MG)Maintenance

Baseprovidesspecializedsupport

forthemaintenanceandtraining

oftheotherregionaloffices,due

toitsstrategiclocation,which

facilitatestheaccessofemployees

totransportlinksandfacilitates

logistics.Thefollowingactivitiesare

locatedatthebase:

• SupportforProtectionand

Control;

• SupportforEquipment;

• Supportfor

Telecommunications;

• Trainingcenter;

• BackupOperatingCenter/

COS-Backup,usedincases

ofcontingencytoavoid

discontinuityofoperations.

ThemainfeaturesinplaceatCELEOinclude:

Operations and Maintenance (O&M) Strategy

• Centralizedoperations-Center

ofOperationsfortheCeleo

RedesSystem(COS–CELEO);

• Networks(remote-controlled

installations);

• Tele-assistedinstallations-the

substationshavetwocertified

operators,duringbusiness

hoursandoncall;

• Connectivity-corporate

communicationchannels

forsharingtechnical/

documentationresources,

remoteaccesstodigital

equipmentandvoice

communication;

• Continuousimprovement-

investmentsinsupportsystems

foroperationsandmaintenance

toprovidegreateroperational

safetyatthefacilities.The

investmentispaidforbythe

companyitselfandbythe

ConcessionsResearchand

DevelopmentProgram;

• Concentrationoftheteams-

MaintenanceBaseinUberlândia

andregionalmaintenance

offices.


• InitialInvestmentProjects:

arecontractedthrough

TransmissionAuctionsandare

necessaryfortheexpansion

ofthenationalenergy

transmissionsystem;

• ReinforcementProjects:

areauthorizedbyANEEL

throughAuthorizing

Resolutionswiththeaim

ofincreasingtransmission

capacity,thereliabilityof

theNationalInterconnected

Systemandtheusefullife

ofequipmentthroughthe

installation/replacement

ofassets,refurbishments

andadjustmentstoexisting

facilities;

• Improvementprojects:are

indicatedannuallybyCELEO

totheNationalSystem

Operator,toimprovethe

facilitiesoftheconcessionsin

operation;

• OperationalProjects:are

identifiedanddevelopedby

CELEOtomakeoperational

improvementstoprocesses

notconsideredinthe

regulatedprojects;

• ResearchandDevelopment

(R&D)projects:thesefollow

regulatoryobligationsfor

investmentinresearchand

developmenttopromote

acultureofinnovationand

stimulateresearchand

developmentintheBrazilian

electricsector.

Construction of the 500 kVEstreito - Fernão Dias Transmission Line InDecember2017,CELEO

completedconstructionofthe

500kVEstreito-FernãoDias

TransmissionLine,extending

for342kmbetweenthestates

ofMinasGeraisandSãoPaulo.

Thisisanimportantachievement

fortheCompanygiventhat

theenterprisebelongingto

CantareiraTransmissorade

EnergiaS.A.(CANTAREIRA)is

expectedtobeginoperations

wellinadvanceofthedeadline

setintheConcessionAgreement.

Theprojectisconsideredto

bestrategicfortheBrazilian

ElectricSectorasitispart

oftheTransmissionSystem

thatwillenabletheoutflowof

energyfromtheBeloMonte

HydroelectricPlant(11,233MW),

thethirdlargesthydroelectric

plantintheworld(capacityto

serve60millionpeople)after

theThreeGorgesDaminChina

(20,300MW)andtheBrazilian/

ParaguayanItaipu(14,000MW).

Developmentsand ProjectsBasedontheannualstrategic

planning,CeleoRedesBrasil

definestheinvestmentsandgoals

forgrowthandimprovementof

theconcessionsthatitcontrols.In

2017,theseinvestmentsrepresented

approximatelyBRL433million

among27projects.

Ofthetotalamountinvested,86%

wasearmarkedforinitialinvestment,

12%forReinforcementprojects,

1%forR&Dprojects,0.5%for

Improvementprojectsand0.5%for

OperationalEfficiency.Itshouldbe

notedthattheReinforcementand

Improvementprojectsareregulated

byANEELNormativeResolution

643/14.


Reinforcement Projects

Someofthereinforcementprojects

thatwereimplementedduringthe

yeardeserveaspecialmention.In

January2017,theReinforcementof

theLinhadeTransmissãoCorumbá

(LTC)becamecommercially

operational,withtheinstallation

ofa230kVbarreactorand

associatedmodulesattheCorumbá

2Substation.Thefunctionofthis

Reinforcementistoassistinvoltage

controlforthesystemintheregion.

Inthefollowingmonth,the

Reinforcementimplementedby

BrilhanteTransmissoradeEnergiaSA

(BTE)alsobecameoperational,with

therelocationofa230kVreactor

fromtheImbirussúsubstationto

theCampoGrande2substation.

Theprojecttoadaptthe230kV

Chapadão-Imbirussútransmission

linewascompletedonschedule.

ThereinforcementworkatJauru

TransmissoradeEnergia(JTE)was

alsocompleted,withtheinstallation

oftwo230kV110MVArseries

capacitorbanksatthe230kV

Vilhena/JauruTransmissionLine

terminalsC1andC2attheSEVilhena

substation.Commercialoperations

beganinNovember,alsoinadvance

ofthedeadlineestablishedinthe

AuthorizingResolution.

Alsoin2017,reinforcementwork

beganatPedrasTransmissorade

Energia(PTE),withtheinstallation

ofathirdbankof345-138kV3x133

MVAautotransformersintheVenda

dasPedrasSubstation.

Research, Development and Innovation (P&D+I)Withaviewtopromotingacultureof

innovationinthesectorandstimulated

bytheNationalElectricityRegularory

Agency(ANEEL),CELEOinvestsin

researchanddevelopmentprojects

withincentivesforthecreationofnew

equipment,refinementofservices

toimprovethesafetyofitsproduct,

tariffreduction,reductionofthe

environmentalimpactofthesectorand

thetechnologicaldependenceofthe

country.In2017,investmentinR&D

projectstotaledBRL3.7million.

Thesearesomeoftheprojectsthatare

currentlyongoing:

Project:“InnovativeSolutionfor

SupervisionofTransmissionLines

IncludingNon-Conventional

MonitoringDevicesandAutomated

ResultsAnalysis“utilizestechnology

formonitoringandanalysisofresults

ontheTransmissionLines.

Duration:01/04/2016to31/08/2018Total Investment:BRL2.7millionAmount invested in 2017: BRL1.7million

Participation: VCTE,CTE,PTE,LTC,ENTEandLTT

Project:“DevicetoAdaptRelay

TestingEquipmenttoSampledValues

Technology“permitstheadaptation

oftestboxesthatgenerateanalog

signalssothattheycancreatedigital

signals(sampledvalues),accordingto

normIEC61850.

Duration: 01/04/2016to31/06/2018Total Investment: BRL2.7millionAmount invested in 2017: BRL1.4million

Participation:VCTE,CTE,PTE,LTC,ENTE,LTT,IMTEandCAIUÁ

Project:“ApplicationandAssessment

ofNewTechnologiestoImprovethe

PerformanceofTransmissionLines

InstalledinExtremelyInhospitable

ConditionsAgainstLightningStrikes“,

withtheobjectiveofimprovingthe

performanceofthelinesofthe230kV

Vilhena-JauruTransmissionLine,which

crossesaregionofintenseelectric

activitywithhighresistivitysoil.

Duration: 29/12/2016to29/12/2019Total Investment:BRL3.2millionAmount invested in 2017: BRL575,228.20

Participation: JTE

GRI EU8


Social Celeo Redes Brasil has adopted a strategy of looking within, valuing its employees during times of change. From now on, results are a consequence of teamwork and efficient management.


CELEOrecognizestheimportanceof

peopleforitsbusinessandseeksona

dailybasistobuildenvironmentsthat

areconducivetothedevelopment,

safetyandwell-beingofits

employees,contractorsandservice

providers,aswellasthepopulation

closetoitsenterprises.

InthelasttwoyearsCeleo

NetworksBrazilhasimplemented

ashakeupofthemanagementof

socialaspects,mainlyinrelationto

employees.TheHumanResources

areamadesignificantchanges

withthesystematizationofinternal

processesforpeoplemanagement,

re-adaptationoffunctionalcategories

andconsequentlychangestothe

employeeframework.Theseinitiatives

haveimpactedontheoutcomesofthe

indicators,whichwillbemonitoredin

thecomingyearsinsearchofongoing

improvement.

TheHealthandSafetyareaalsosaw

changestoitsmanagementand

fromnextyearwillbedirectlylinked

totheExecutiveDirector,whowill

followtheevolutionoftheindicators

closely.Withregardtocontractors,the

Companyintensifiedtheassessment

andqualificationprocessforsuppliers,

withthemonitoringofcontracts

andtheactivitiescarriedoutinits

operations.

Inthecommunities,inadditionto

socialprojectsalreadydeveloped

withtheparticipationofthe

residents,CELEOhasintensifiedthe

engagementprogramtosurveythe

needsandopinionsofthepopulation

withregardstotheimpactsofthe

business.Thiswillbeusedtoestablish

actionplanstomitigatethenegative

impactsandenhancethepositives.

Profile of the EmployeesGRI 102-8, 102-36, 401-1, 404-3

CELEO’steamsaremadeupof

professionalsofdifferentagesand

occupationalexperience.Inthe

selectionprocessandincareer

developmentCELEOappliesthe

criteriaofnon-discriminationand

equalopportunities,inaccordance

withtheCodeofEthicsandConduct.

Withtherestructuringprocessat

CeleoRedesBrasil,theCompany

recognizestheopportunitytoimprove

onimportanthumanresources

issues.Inthelastyearthefunctional

categorieswereredesigned,

resultinginsignificantchangestothe

frameworkandaffectedthepeople

managementindicators.Today,

thereare230employees,including

19%women,themajorityworkingin

administrativeactivities.Theturnover

ratereached23.70%,with56hirings

and53redundancies,including

fiveinternalmovementsinwhich

employeesweremaderedundantand

rehiredbyotherCELEOconcessions.

AttheendoftheyeartheCompany

had17vacanciesstilltobefilled.

AspartoftheprocesstheCompany

isalsostudyingtheimplementation

ofremunerationpoliciesforalllevels,

sincesalariesarecurrentlydefinedby

theHumanResourcesDepartment

accordingtoprofessionalexperience,

technicalknowledgeandbehavioral

profile.In2017,theprocessofcreating

jobdescriptionsbeganwiththe

considerationoftheskillsandabilities

requiredforeachfunction,witha

reshuffleofemployeestooccupythe

newly-designedprofiles.Thecompany

alsobegantheprocessofcreating

atoolforperformanceassessment,

whichwillbeimplementedin2018.

Personnelmanagementisconducted

usingthetheRMLaboresystemto

controlemployees‘informationand

thepayroll.Inaddition,theHuman

Resourcesdepartmentreports

monthlyresultsregardingnewhiresto

theheadquartersinSpain

Employee hiring rate (%)

Employee turnover rate (%)

414

Age Group

Under 30 years30 to 50 yearsOver 50 years

2015 20172016

771

8.413.69

1.52

110

Gender

womenmen

510

6.716.9

Number of new employee hires

1813

5

Age Group


2015 20172016

1620

3

2134

1

1026

Gender

womenmen

1028

1442

1811

7

Employees by Region

Southeast MG, RJ, SP (LTT, CELEO, CANTE, PTE)Center-West MT, MS (BTE, JTE, LTC)North (CTE, ENTE, IMTE, VCTE)

2189

4088

503614

2015 20172016

4253

5

3860

2

2872

2674

2575

503119

552124

711414

Age Group


Gender

womenmen

Employees by Region


Number of employees leaving the organization

714

1

Age Group


2015 20172016

1514

3

2030

3

319

Gender

womenmen

1220

1142

1057

Employees by Region


2174

357

11

Employee hiring rate (%)

Employee turnover rate (%)

414

Age Group


2015 20172016

771

8.413.691.52

110

Gender

womenmen

510

6.716.9

Number of new employee hires

18135

Age Group


2015 20172016

16203

21341

1026

Gender

womenmen

1028

1442

18117

Employees by Region


2189

4088

503614

2015 20172016

42535

38602

2872

2674

2575

503119

552124

711414

Age Group


Gender

womenmen

Employees by Region


Number of employees leaving the organization

7141

Age Group


2015 20172016

15143

20303

319

Gender

womenmen

1220

1142

1057

Employees by Region


2174

357

11


Training and Development

Awareoftheneedtodevelopits

professionals,CeleoRedesBrasil

hascreatednewstrategiesinthe

HumanResourcesareatoprovide

moreopportunitiesfortheteams.

TheCompanyseekstoofferequal

opportunitiesforqualifications

andtrainingwhilespecifically

meetingtheneedsofeach

employeeandtherebycontribute

toformingateamthatexcelsin

themarketinwhichitoperates.

In2015theEducationalSupport

Programwascreated,permitting

CELEOtomakefinancial

investmentsinundergraduate,

postgraduate,MBAand/or

languagecoursesforalldirect

employees(excepttraineesand

apprentices).In2017,theprogram

included14employeestaking

languagecourses(Englishand

Spanish);fiveonundergraduate

courses;fourtakinggraduateor

MBAcourses;andtwocompleting

highschooleducation.

Otherspecifictrainingand

qualificationmodulesincludedre-

trainingmaterialforallemployees,

theCorporateIntegrityProgram

andthereadingandinterpretation

oftheStandardsoftheIntegrated

ManagementSystemfor35

professionals.TheCompanyalso

hasspecificqualificationtraining

fortheoperatorsoftheCenterof

Operations(COS),managedfor

theOperationarea.Employees

aretrainedinpolicies,processes

andstandards,butonlybecome

eligibleandqualifiedafterpassing

theCOSexam.

Anotherimportantinvestmentwas

theconstructionoftheTraining

Tower,locatedattheUberlândia

(MG)base.Intotal,BRL257,000

wasspentontheprojectwhich

improvedthequalityofthe

trainingsessions,whichnoware

centralizedinasinglespace.

+ 95 HorasTheaveragenumberoftraining

hoursperemployeewas95.97.

+ R$767 MilIn2017,BRL767,511wasinvestedin

developmentandtrainingprograms,

totaling22,073hours.

GRI 404-1, 404-2, EU14

Program/ Training

Educational Support 84,043

Cost BRL

Health and Safety (SIPAT) 198,560

Technical training (SICAT) 85,443

Congresses, seminars and lectures 23,615

Technical Workshop (Jornada Técnica) 95,340

Internal, behavioural and regulatorytechnical training 280,510

Average number of hours of training

Employee category

ManagersAdministrativeProduction

3,6651,1957,537

2017

Gender

MenWomen

7,6284,769

2017

Obs: Does not include data for SIPAT and SICAT.


Technical Visits between Braziland Chile

Internal Technical Training Week

Thiseventpermitsanexchangeprogram

betweenemployeesoftheBrazilianOperational

DepartmentandemployeesfromChile,withthe

aimofexchangingtechnicalexperiencebetween

theengineering,operationsandmaintenance

teams.Thisyear,theeventtookplaceinRio

deJaneiro(RJ)andUberlândia(MG),withthe

participationof54employees,11fromCeleo

RedesChileandoneemployeefromSpain.

TheCompanyholdsanInternalTechnicalTraining

Week(SICAT)everyyeartargetingtheMaintenance

andOperationsareas.Duringtheevent,training

sessionsareconductedoninternalprocedures

andgoodmanagementandoperationalsafety

procedures.In2017,inadditiontotheCELEO

employees,suppliersandrepresentativesofthe

regulator(ONS)wereinvited,bringingtogethera

totalof98employeesandsixguestsin42activities.

Benefits, Health and Well-being

CeleoRedeshasasetofbenefits

andactionsforhealthandwell-being

thataimtoimprovethequalityof

lifeofemployees.Itisimportantto

notethatallconcessionsreceivethe

samebenefits,whichareextendedto

temporaryemployees.TheCompany

providesthefollowingbenefits:

• Foodandmealvouchers;

• Transportvouchersandextra

subsidy;

• Medicalanddentalplan;

• EducationalSupport.

Toencouragehealthandwellness

activitiestheHumanResourcesarea

developedtheHealthManagement

Programinconjunctionwiththe

OccupationalHealthandSafetyarea,

lookingtoexpandpreventiveactions

amongitsemployees.

In2017thetheCompanysentout

questionnairestoitsemployees

usingacomputerizedplatformin

ordertogatherinformationabout

theirmentalandphysicalhealth,

aswellassocialinformation.The

purposeofthequestionnairewas

tohelpunderstandtheprofileof

theemployeesandproposeactions

forimprovementandsupport.This

year,58employeesparticipatedin

theinitiative.TheHumanResources

areahasbeenstrengtheningthe

campaigntoincreaseparticipation

in2018.

Monthlyreportsaresenttomonitor

theuseofthehealthcareplan.If

thefrequentuseoftheplanbyan

employeeisidentifiedahealthcare

professionalmakescontactwiththe

individualtounderstandwhatfurther

assistancecouldbeprovided.

GRI 401-2


CeleoRedesBrasilseekstoprovide

asafeenvironmentatallofits

facilitiesandalongthetransmission

lines.Inordertoguideitsstrategies

inthisareatheCompanyhas

establishedtheIntegratedQuality,

Environment,andOccupational

HealthandSafetyManagement

Policy,whichexpresslystatesthe

assumptionsthataimtostrengthen

ahealthandsafetycultureamong

employees.Healthandsafetytopics

(training,useofPPE,dangerous

work,periodicexaminations,etc.)

arealsocoveredintheCollective

Agreementthatcoversall

employees.

CELEOhasamultidisciplinaryteam

inplaceforOccupationalHealth

andSafetymanagementthatis

dedicatedtoplanningpreventive

actionstoavoidaccidentsand

damagetopeople‘shealth.Work

procedureswereestablishedinthe

IMSforbothinternalapplicationand

workinthefield(TransmissionLines

andSubstations).Theseprocedures

guidetheperformanceofdaily

activitiesandforeseetheactions

oftheFireBrigadeandtheInternal

AccidentPreventionCommission

(CIPA).

Health and Safety

Health and Safety Indicators

GRI 403-1, 403,1, 403-4, EU16 GRI 401-2

ThecompositionoftheCIPAis

definedbyelection,withmembers

fromallhierarchicallevels-including

theSeniorManagement-to

represent100%ofemployees.In

additiontotheelectedmembers

oftheCIPA,ordinarymeetings

areattendedbyalternates,who

canactaspreventionagentsin

theareasofthecompanyand

alsostrengthentheCommission‘s

activities.Inallofthesubsidiaries

thedesignatednumberofmembers

oftheCIPAisgreaterthanrequired

inthelegislation,ensuringbroader

communicationbetweenemployees

andtheCommissionandenabling

asafetyculturetobeincreasingly

absorbedintodailyactivities.

Contractedcompaniesmustfollow

theProcurementprocedure,which

requiresandverifiescompliance

withtheOHSstandardsdefinedby

theCompany.Allcontractorsand/

orsubcontractorsparticipatein

thetrainingscheduledescribedin

theGeneralOccupationalHealth

andSafetyProcedureforVisitors

andContractors(PG-025).The

proceduredescribestheoperational

systemforcontractorsand

visitors,verifyingtheircapabilities

andcompetenciesinmeeting

occupationalhealthandsafety

andenvironmentalrequirements,

aswellastheircompliancewith

legalaspectsapplicabletothe

goodsorservicesprovided.These

trainingsessionscanoccurduring

theinductionprocessforaccessto

facilitiesorduringtheprocesses

ofselectionandassessmentof

workers.

Occupationalhealthandsafety

indicatorsaremonitoredona

monthlybasisinordertoachievethe

Company‘sgoalsandtargets.The

accidentstatisticsfollowSpanish

Standards,followingtheformulas

presentedintheindicatorsbelow.In

ordertoassessworkingconditions,

aprocedurewasestablishedfor

ManagementofNon-Conformityand

PreventiveandCorrectiveActions(PG-

007),whichdoesnotincluderesults

fromunhealthyenvironmentsorthose

predisposedtooccupationaldiseases.

Allenvironmentsaremonitored

throughtheEnvironmentalRisk

PreventionProgram,asestablished

bytheRegulatoryStandard(NR9).

Regardingthetreatmentofaccidents

atCELEO‘spremises,aGeneral

IncidentProcedure(PG-023)was

definedwithguidelinesonhow

toinvestigate,report,andhandle

incidents.Anyincidentisfollowedup

onbytheSeniorManagement,which

authorizesactionstoavoidfuture

occurrencesandtoincorporatethe

lessonslearnedintofuturetrainingand

riskanalyses.

GRI 403-2


Alloftheactionsimplemented

havecontributedtothefallinthe

OccupationalAccidentFrequency

Rateinthelasttwoyears.However,

afatalaccidentwasrecordedat

EncruzoNovoTransmissoradeEnergia

(ENTE)for2016.Theoccurrencewas

handledbytheSeniorManagement,

whichparticipatedinallstagesofthe

investigationandmeasurestoavoid

futureoccurrences.Thesemeasures

includinginstigatingachangeinthe

organizationalstructurewithwhichthe

HealthandSafetyCoordinationwill

nowresponddirectlytotheBoardof

ExecutiveOfficersfrom2018.

Lastyearonelow-severityaccident

occurredattheCoqueiros

TransmissoradeEnergia(CTE)

operationinvolvinganemployee

cuttingthemselfafteraslightfall.

AnotheraccidentoccurredatEncruzo

NovoTransmissoradeEnergia

(ENTE),whereacollaboratorsuffered

afirst-degreeburnonthefoot.

Theoccurrenceswereinvestigated

andactionsweredefinedtoavoid

recurrence.

Induction Training

DuringtheinductionprocessallCELEOemployeesreceivethenecessaryinformationtoensuretheiroccupationalhealthandsafetyintheworkingenvironment.InUberlândia(MG),trainingisfocusedonemployeeswhoworkinOperationsandMaintenance(O&M).In2017,47peopleparticipatedintheOHSInductionontheCompany‘spremises.

TheOccupationalHealthandSafetyareaisconcernedwith:

• CorrectuseofPPE;• Integrationoftheemployeeinto

theOccupationalHealthandSafetysystem;

• Preventionofaccidentsandoccupationalillnesses;

• DisseminateoftheSafety,HealthandEnvironmentPolicy;

• Providingguidancetotheemployeewithregardstopossiblerisksintheiractivities;

• Compliancewithestablishedrules.

Health and Safety SummitEveryyear,theCIPApromotesthe

InternalOccupationalAccident

PreventionWeek(SIPAT),togetherwith

theOccupationalHealthandSafety

area.DuringSIPAT,awareness-raising

activitiesareheldwithemployees,

includinglectures,training,medical

assessments,games,etc.

TheIIISIPATofCeleoRedesBrasilwas

heldattheUberlândia(MG)base,with

theparticipationof117employees.

Inadditiontolecturesonhealthand

safety,advicewasgivenaboutthethe

healthcareanddentalplan,actionsto

promotehealthandwell-being,leisure

activitiesandraffles.

Celeo Redes Brasil

Hw

Nº ac

L.D

Nº.w.y (av.)

Ir

2016 2017

Fr

Sr

506,334

2.00

6,117

223

9

3.95

12.08

554,937

2.00

23.00

228.56

9

3.60

0.04

Elecnor do Brasil

Hw

Nº ac

L.D

Nº.w.y (av.)

Ir

2016 2017

Fr

Sr

864,171

3

23

395

8

3

0.03

3,569,504

25

582

1,332

19

7

0.16

Key:

HwNº ac

L.D

Nº.w.y (av.)

Fr

lrSr

- hours worked- number of accidents

- Lost Days

- number of workers in year (av.)

- Frequency rate

- Incidence rate- Severity rate

FrequencyRate

Nº accidents recorded *10^6Nº Hours Worked

IncidenceRate

Nº accidents recorded *10^3Nº workers in year (av.)

Nº Lost days *10^3Nº Hours Worked

SeverityRate

=

=

=

Celeo Redes Brasil

Hw

Nº ac

L.D

Nº.w.y (av.)

Ir

2016 2017

Fr

Sr

506,334

2.00

6,117

223

9

3.95

12.08

554,937

2.00

23.00

228.56

9

3.60

0.04

Elecnor do Brasil

Hw

Nº ac

L.D

Nº.w.y (av.)

Ir

2016 2017

Fr

Sr

864,171

3

23

395

8

3

0.03

3,569,504

25

582

1,332

19

7

0.16

Key:

HwNº ac

L.D

Nº.w.y (av.)

Fr

lrSr


- Lost Days


- Frequency rate


FrequencyRate


IncidenceRate



SeverityRate

=

=

=

20

15

10

5

0

87

3

190.16

0.03 20172016

10

5

0

9

3.60

9

3.95

12.08

0.0420172016

Celeo Redes Brasil

Hw

Nº ac

L.D

Nº.w.y (av.)

Ir

2016 2017

Fr

Sr

506,334

2.00

6,117

223

9

3.95

12.08

554,937

2.00

23.00

228.56

9

3.60

0.04

Elecnor do Brasil

Hw

Nº ac

L.D

Nº.w.y (av.)

Ir

2016 2017

Fr

Sr

864,171

3

23

395

8

3

0.03

3,569,504

25

582

1,332

19

7

0.16

Key:

HwNº ac

L.D

Nº.w.y (av.)

Fr

lrSr


- Lost Days


- Frequency rate


FrequencyRate


IncidenceRate



SeverityRate

=

=

=

15.00

10.00

5.00

0.00

li - lf lg

li - lf

0.20

0.15

0.10

0.05

0.00

lg

Subcontractors(CELEO)

CeleoRedesBrasil

Celeo Redes Brasil

Hw

Nº ac

L.D

Nº.w.y (av.)

Ir

2016 2017

Fr

Sr

506,334

2.00

6,117

223

9

3.95

12.08

554,937

2.00

23.00

228.56

9

3.60

0.04

Elecnor do Brasil

Hw

Nº ac

L.D

Nº.w.y (av.)

Ir

2016 2017

Fr

Sr

864,171

3

23

395

8

3

0.03

3,569,504

25

582

1,332

19

7

0.16

Key:

HwNº ac

L.D

Nº.w.y (av.)

Fr

lrSr


- Lost Days


- Frequency rate


FrequencyRate


IncidenceRate



SeverityRate

=

=

=

Note:ThecalculationmethodologyusedfortheindicatorsfollowsSpanishStandardsasshownintheformulas.

2“AtthetimeofpublicationofCeleoRedesBrasil’s1stSustainabilityReport(baseyear2016)CELEOconsideredthatafatalaccidentinearly2017constituteda„relevantfact“and

insertedthisoccurrenceintotheWorkAccidentsíndices(ownemployees)fortheyear2016“.


Suppliers

Concernedwiththeadoption

ofgoodpracticesandwith

transparencyinitsmanagement

processes,CELEOhascreateda

seriesofstandardsandprocedures

foritsSuppliesarea.The

requirementssetforthaspartof

theIntegratedManagementSystem

(IMS)includecriteriaforassessing

suppliersinrelationtolaborand

socialsecurityissues,slavelabor

andchildlabor.Thissupplier

assessmentisinlinewiththe

CorporateIntegrityProgram(CIP),

whichdeterminesdisqualification

ofthesupplierifanyoftheaboveis

identified.

TheCompanyusestheRMSystem

fortheimplementationandcontrol

ofprocurementandallsupplier

managementinvolvesthefollowing

steps:pre-registration;completion

ofthequalificationform;analysis

ofthedocumentationofthe

registeredcompany;competition

andnegotiation;selectionofthe

supplierwiththebesttechnicaland

commercialproposal;formalization

ofcontracts,monitoringofcontracts

andassessmentofthesupplier’s

performance.Throughthese

measuresCELEOseekstocomply

withtheISO9001,ISO14001and

OHSAS18001standards,aswellas

verifyingthesupplierforcompliance

withtheCorporateIntegrity

Program(PIC).

In2017,theCompanyhad1,927

activesuppliersofgoodsand

services,classifiedasCritical,

Strategic,RegulatoryandCommon.

Thevolumeofpurchases(O&M

supplies)amountedtoBRL10.8

million.

GRI 102-9

Inthelastyear,theSuppliesarea

undertookaninternalanalysisof

38ofthemaincriticalsuppliers-

oftheirsignificantsocialimpacts

(laborandsocialsecurity,

forcedorcompulsorylabor

andchildlabor)-toparticipate

inthefirstqualificationgroup,

wheretheyareassessedfor

socialriskcriteria,aswellasfor

levelsofintegrity.Asaresult

ofthisprocess,in2017CELEO

terminatedcontractswith

twocompaniesthatprovided

contractedworkers-onefor

cleaningandmaintenanceof

itsRiodeJaneiroofficeandthe

otherforpropertysecurityat

theEncruzoNovoTransmissora

deEnergiaSubstation(ENTE)

–becausebothwerefailing

tocomplywiththeirlaborand

socialsecurityobligations.

Environmentalaspectsare

alsoevaluatedincontracts

withsuppliersofmaterialsand

services.TheEnvironmental

areaworksinconjunctionwith

theSuppliesareatoobtain

documentationandevidence

regardinglegalcompliance

andtherequirementsofthe

IntegratedManagementSystem

(IMS).In2017,12suppliers

weremappedasposinga

potentialriskofimpactsonthe

environment(contamination

ofsoilbyoilandwaste,

groundwatercontamination,air

pollution,illegaldeforestation,

etc.)andwillhavetopass

throughthesupplier

qualificationprocess.

Qualification of Suppliers GRI 414-1, 414-2, 308-1, 308-2


Community RelationsOneofthestakeholderengagement

strategiesaddresseshowthe

Companyrelatestothecommunities

closetoitsconcessions.CELEO

developedtheCommunity

RelationsPolicy,whichestablishes

theguidelinesforPrivateSocial

Investment(PSI)insocio-cultural

projects,humanrightsandhealth,

capableofcontributingtolocal

development.

TheCompanyusestaxincentive

laws(FundfortheElderly,FUMCAD,

RouanetLawandSportLaw)and

BNDESSocialSub-Credittoinvest

inprojectsthatgobeyondthe

compulsoryrequirementsorlegal

obligationsimposedduringthe

licensingprocessforitsenterprises.

Themanagementoftheprojects

iscarriedoutbyaspecialized

consultancy,withthesupportand

monitoringoftheEnvironmental

area.

Results in 2017WithregardstotheBNDESSocial

Subcreditfunding,theproject

presentedbyIMTEfinishedin2017.

Theprojecthascontributedtothe

socialdevelopmentofBomJesus

dasSelvas(MA)byimprovingthe

qualityofteaching,infrastructure

andagriculturalproductionand

providinginstitutionalstrengthening

forthePadreJosimoTavaresCFR

AgriculturalTechnicalSchool.The

projectalsocontributedtoincome

generationfortheschool,allowing

ittoreduceitsdependenceon

externalresources.

Twoprojectswereselectedin

themunicipalitiescrossedbythe

500kVEstreito-FernãoDias

TransmissionLine(CANTAREIRA).

Thefirst,the„VamosSalvaro

Planeta“(“LetsSavethePlanet”)

project,aimstocontributetothe

socioeconomicandenvironmental

developmentoftheMunicipality

ofMonteSantodeMinas(MG).

Thisinvolvestheconstructionofa

sortingandcompostingplantand

theimplementationofaselective

rubbishcollectionsystem,whichwill

benefittheurbanareaofthetown

andthreeotherruralcommunities:

Lagoa,CunhasandPitangueira.The

projectwillalsobenefittheMilagres

district.

TheotherCANTAREIRAproject,„

ViverBememCaetetuba”(“Living

WellinCaetetuba“)willtake

placeinaneighborhoodofthe

municipalityofAtibaia(SP).The

CaetetubaRailwayStationwillbe

revitalized,withtheinstallationofa

SocialAssistanceReferenceCenter

(CRAS)andaSocialOrganization

(Curumin)tomeetthedemandsof

approximately20,000peoplein

sociallyvulnerablesituationsandwill

includethepromotionofcoursesto

provideprofessionalqualifications.

Theprojectalsoforeseesthe

revitalizationofPraçaAntônio

Scavone.

+ BRL 1.5 mi Investedinsocialprojects

In2016and2017,BRL1.5million

wasinvestedinsocialprojects,of

whichBRL618,112camethroughthe

incentivelaws.

Project

Bagagem CulturalItaboraí

Encourage reading andpromote local culture

and pottery

Objective

Rouanet Law

Amount investedActions/Public Incentive

Workshops for trainingteachers in storytelling,reading mediation and

art-education forstudents of the

Municipal system.

R$ 404,438

São Jose VincentianCare Home

Contribute to the fundingof this non-governmentalorganization dedicated

to the care of the elderly

São João da Boa Vista (SP)Municipal Senior Citizen's Fund

Elderly residentsof the home R$ 71,225

Humanized healthsupport for childrenand adolescents in

the Pequeno PríncipeHospital

Contribute to thefunding of this

non-governmentalorganization

Municipal Fund for Children and Adolescentsof the municipality of Curitiba (PR)Patients at the hospital R$ 71,225

Olympic Reaction Projectyear VII

Provide funding for12-months for

development ofhigh-performance

athletes to participatein national and

international competitions

Sports Incentive Law

The program offers sportstraining in judo to

about 230 young people(11 years or older) and has

thesupport of amultidisciplinary team

in the areas of psychology,nutrition, physiotherapy

and physical preparation.

R$ 71,225

Projects with Tax Incentives


Linha de Transmissão Corumbá (LTC) Theconcessioncrossesareasclosetothreeindigenous

communitiesoftheTerenaethnicgroup.Consideringthe

impactsofworksonthesecommunities,theCompany

hasdevelopedaseriesofmitigatoryactions,suchas:

SocialCommunicationProgram;EnvironmentalEducation

Program,focusedonindigenousissues;andtheProgram

toSupportIncomeGenerationandValueingoftheTerena

Culture.Thelatterinvolvedthefollowingdevelopments

fortheTerenacommunity:theconstructionofacultural

center;arainwatercollectionsystem;therefurbishment

ofacommunitycenter;theconstructionofasemi-

industrialkitchen;andprofessionalcoursesininformation

technology,traditionalcooking,fertilizerproductionand

administration.

Jauru Transmissora de Energia (JTE)Theroutetakenbytheconcessioncrossestheterritories

oftheindigenouslandsofTubarãoLatundêinRondônia

andPirineusdeSouza,ValedoGuaporé/Taihantesu,

Nambiquara,Uirapuru/CapitãoMarcosandJuininha

inMatoGrosso.Thestudyoftheinfluenceofthe

developmentonindigenouslandswascarriedout

duringtheenvironmentallicensingprocess,whichwas

directedbyIBAMA.Theactionsthatresultedfromthese

studiesbeganin2008andtookplaceinsixindigenous

territoriescontaining42villageswithapproximately

2,000people.TheProgramfortheProtectionand

SurveillanceofIndigenousLandswasalsocompletedwith

theconstructionof13supporthousesandsurveillance

stationsinthevillages.

Results in recent yearsDisplacement andIntervention in Local Communities

Therelationshipwithlocal

communities-includingindigenous

andtraditionalcommunities-isa

realityforCELEOsinceitsbusiness

modelhasdirectimpactsonthe

landinsomelocalities.

Forsomeprojectsitisnecessary

todisplacethelocalpopulation.

Thisprocessismanagedthrough

theProgramforLandOwnership

ManagementandMonitoring

ofAffectedPopulations.The

propertiesthatneedtobe

occupiedfortheinstallationof

thedevelopmentaremapped

andconsequentlythefamilies

areregisteredaspartofthe

compensationprocessandto

providesocialsupportwith

regardstothevulnerabilityand

inconveniencethattheymaysuffer

asaresultofthemove.In2017,

theimplementationofthe500kV

Estreito-FernãoDiasTransmission

Lineprojectwascompleted,

requiringtherelocationofeight

familygroupswhoarebeing

accompaniedwithspecificsocial

supportplansforeachfamily.

Asforindigenousandtraditional

communities,in2017there

werenonewinterferencesin

theseterritories.However,the

actionstargetingtheindigenous

communitiesclosetotheoperations

oftheLinhadeTransmissão

Corumbá(LTC)andJauru

TransmissoradeEnergia(JTE)

werecompleted.Inaddition,the

actionplanforthecommunities

ofCAIUÁwaspresentedtothe

competentbody(theNational

IndianFoundation-FUNAI)and

theCompanyisawaitingapproval

tobeginactivities.Theobjective

istoestablishmitigatingactions

forpossiblenegativeimpacts

fromconstruction.Inall,13

Tekohasvillageswerestudied,with

approximately2,293Indigenous

peoplefromtheAvá(Nhandeva)

andMbyátribesoftheGuarani

people.

GRI 411-1, EU20, EU22


The Environment

Aware of its responsibility with regards to the consumption and use of natural resources, CELEO follows strict management standards in its operations.


Theenvironmentalmanagementof

CeleoRedesBrasil‘sdevelopments

beginsduringtheconceptionof

theprojects,basedonthesocio-

environmentalimpactstudies

undertakeninaccordancewiththe

currentlegislationandtheinternal

sustainabilitystandardsofthe

business.

Theenvironmentalareais

responsibleforthisprocess,which

includesthemanagementof

environmentalrisks,themonitoring

ofthelicensingwiththecompetent

bodiesandthemonitoringofthe

impactsaroundtheprojects.

TheCompanyhascreatedan

EnvironmentalManagement

Program,whichbringstogether

environmentaleducationprojects

inthesurroundingcommunities,

biodiversityimpactmanagement

actions,andwaste,water,energy

andgreenhousegas(GHG)

emissionsmanagement.In2017,the

Companyinvested3.9millioninthe

environmentalmanagementofits

developments.

Environmental investments and expenditure

Reforestation (CAPEX) 607,361.82

Integra Project (OPEX) 380,000.00

Environmental Management (OPEX*) 2,581,815.00

Environmental Management (CAPEX**) 184,023.02

Waste removal 45,000.00

Control of legal requirements 28,216.45

3,875,567.42

Mitigation kit 2,470.00

Total

Environmental EducationTheaimofenvironmental

educationistostrengthenCELEO‘s

relationshipwiththecommunities

locatedintheconcessionareas,in

ordertomitigatetheriskstothe

populationandestablishstrategies

forengagementandcommunication

withresidents.Thisshouldprovide

clarityandnewknowledgeabout

thesharedrolethateverybodyplays

intheconservationandprotection

oftheenvironment.

Aspartoftheenvironmental

licensingprocess,CELEO

developedanEnvironmental

EducationProgramatJauruEnergy

TransmissoradeEnergia(JTE)that

providesdistanceeducationcourses

targetingthepublicschoolsystem.

Therewerethreemoduleswith

themedcourses-totaling60hours

persemester-whereparticipants

learnedaboutPublicEnvironmental

Management,Participationin

PublicEnvironmentalPoliciesand

PedagogicalPracticesinCritical

EnvironmentalEducation.

In2017,therewere231people

enrolledfromatleastnine

municipalitiesoftheregion.Of

thosecompletingthecourse,52%

werestudents,38%wereteachers

and10%werepublicadministrators

(10%).

*Referstoresourcesusedtomeettheconditionsofenvironmentallicencingandstudies.**Referstoresourcesusedfortheenvironmentallicencingforthereinforce-mentoftheSEVilhenaSubstation.


Biodiversity

Thesearchforalternativeswith

lowenvironmentalimpactsbefore

theinstallationofadevelopment

isconstantlyconsideredinthe

differentphasesoftheprojects.One

ofthesephasesistheevaluation

ofconservationunitsandpriority

areasforconservation,whichcanbe

identifiedbyresearchingwiththe

MinistryoftheEnvironment(MMA)

andtheChicoMendesInstitutefor

BiodiversityConservation(ICMBio).

CELEOalsousesitssocio-

environmentalstudies(EIA/

RIMA)andtheriskmatrixofthe

developments-elaboratedduring

thelicensingprocess-todevelop

programsformanagementoflocal

biodiversity.Themainimpacts

causedbytheenergytransmission

businessare:thesuppressionof

nativevegetation(habitatreduction

andfragmentation);socio-

environmentalimpactsonaffected

traditionalcommunities(indigenous

andquilombola);andtheerosive

processestriggeredbytheopening

ofaccessroutes.

ThemostrecentventureofCeleo

RedesBrasil,the500kVEstreito-

FernãoDiasTransmissionLine,is

342kminlengthandcrosses29

municipalitiesinthestatesofSão

PauloandMinasGerais,withmore

than80%ofitsrouteoutsideof

UnitsofConservationand/orPriority

Areas:

• ConservationUnits-500

kVEstreito-FernãoDiasTL

passesthrough29.59kmofthe

CantareiraSystemEnvironmental

ProtectionArea(APA)and37.56

kmofthePiracicabaJuqueri-

MirimIIEnvironmentalProtection

Area(APA).Italsopasseswithin

0.36and2.6kmoftheCaetê

MunicipalEcologicalStation

(ESEC)andtheÁguasdaPrata

StateReserve,respectively.

Theinteractionbetweenthe

conservationunitsmentioned

aboveandtheTLcanbeseenon

themapofConservationUnitsof

thisventure;

• PriorityAreasforBiodiversity

Conservation:threeareasare

interceptedbytheTL:Ma302-

ÁguasdaPrata/SãoJosédoRio

Pardo,Ma269-ÁguasdeLindóia

andCe059Conquista-Canastra.

TheTLtrajectorypassesthrough

theseareasfor59.91,13.64and

3.15km,respectively.

Endangeredspeciesoffauna(96

species)andflora(20species)onthe

IUCNlistand/orfederalandstate

listswereidentifiedintheseregions.

Otherpossibleimpactsmapped

beforethestartoftheworkswere

habitatloss,alterationofthe

qualityofwaterbodiesandnoise

disturbance.

Inall,12environmentalimpactson

biodiversityweremappedinthe

implementationphase.Inorderto

mitigateenvironmentalimpactsfrom

theconstructionoftheTransmission

Line,CELEOhasdeveloped

programsforEnvironmental

Offsetting,VegetationSuppression,

Germplasmconservation(seed-

saving),MonitoringofFaunaand

EnvironmentalConstructionPlans.

Recentlytheforestreplanting

projectwasinitiated,recently

approvedbythelicensingbody,

andforeseesthemonitoringof

therecoveryoftheplantedareas

foraperiodoffiveyearsafterthe

plantingoftheseedlings.Atotalof

45,729treeswillbeplanted,20%

morethanwhatwasnecessaryfor

theimplementationofthetotal

areaof22.86hectares,inorder

toguaranteecompliancewiththe

commitmentassumed.

List of endangered speciesLT 500 kV Estreito - Fernão Dias

13

3

6

Avifauna (birds)

Herpetofauna(amphibians and reptiles)

Mastofauna (mammals)

MMA MGIUCN SP

41

11

9

35

15

8

78

31

15

Espécies Fauna

Throughthisprogram,

CELEO‘sEnvironmental

areapreparesdiagnoses

oftheformationoferosive

processesforallofitsprojects

andplanstheinterventions

tobecarriedout,always

consideringthepreservation

oftheecosystemspresentin

theaffectedregion.In2017,

scheduledmaintenancewas

carriedouttorecuperate

erodedareasalongfive

stretchesoftheLinhade

TransmissãoTriângulo(LTT).

Recovery ofDegraded Areas

GRI 304-1, 304-2, EU13

GRI 304-4


Forestreplantingprograms

occuringreenareasclose

toCELEO’sprojects,asa

wayofcompensatingfor

thesuppressionofnative

vegetationrequiredfor

theconstruction.By2017,

approximately177,000

seedlingsofnativespecies

hadbeenplantedon161

hectares,closetothe

followingconcessions:PTE,

JTE,LTC,LTTandIMTE.

Forest ReplantingGRI 304-3

Development

Linha de Transmissão Triângulo (LTT)

Tree planting location Quantity of tree saplings

Rios Tijuco e da Prata State Wildlife Refuge, Fazenda Beiral da

Prata, in the municipality of Gurinhatã (MG)

Total of 261 trees:75 from endangered species;

186 saplings of native cerrado (savannah) tree species

Piraputangas Municipal Natural Park, in Corumbá (MS)

15,000 saplings of species native to the region, 50% of which are endangered

species

Area of 10 hectares

Linha de Transmissão Corumbá (LTC)

230 kV voltage and aprox. 290 km;Crosses four municipalities in Mato Grosso do Sul and connects to the

Anastácio substation owned by Eletrosul

Privately-owned area located in the municipality of Santa Inês (MA)

Native species from the regions were planted on 7.5 hectares

Integração Maranhense Transmissora de Energia (IMTE)

500 kV voltage and aprox. 365 km in length;

Expansion of two electricity substations - a SE Açailândia and SE Miranda II;

Crosses 11 municipalities in the state of Maranhão.

Permanent Preservation Area (APP) in the municipality of Comodoro (MT)

Foresees the planting of approximately 127.40 hectares of native vegetation by

2018

Jauru Transmissora de Energia (JTE)

230 kV voltage and approximately 345 km in length;

Interconnects the Vilhena Substation in the state of Rondônia (RO) with the

Jauru Substation in the state of Mato Grosso (MT)

Tree planting took place in the municipality of Cachoeiras de Macacu (RJ)

33,000 trees on 13.3 hectares7,000 trees on 2.8 hectaresPedras Transmissora de Energia (PTE)


1

2

3

3

4

4

Eco-efficiency

GRI 303-1

Waterusedcomesfrom

groundwatersources.

18installationsuse

watermetersand

hourmetersto

controlconsumption.

Periodicphysical-chemicaland

bacteriologicalanalyzesareconducted

tomonitorthequalityofthe

waterused.

In2017,thetotalvolumeof

groundwaterconsumedwas

3,105.49m3.

Waste Management

GRI 306-2, 306-4

GRI 302-1, 302-4Wasteismanagedinaccordance

withtheNationalSolidWaste

Policy(LawNo.12,305,ofAugust

2,2010).

TheCompanyencouragesseparationforrecyclingatits

facilities.Thisyear,690kgofscrapmetal,aluminumwires

andcardboardweresenttoametallurgycompany.Also,

approximatelyninetonsofhazardouswastewererecycled

throughreverselogistics.

Volumeofwaste:Hazardous=2,021kg,2,850litres

and1.400units;Non-hazardous=5,228kg.

Monitoring of Energy Consumption

In2017,totalenergy

consumptionwas1,175

MWh/year.

Energyefficiencythroughtheproductionof

photovoltaicsolarenergyattheUberlândia

MaintenanceBase,whichtodayisresponsiblefor

approximately50%oftheenergyconsumedbythe

unit.Themarkof100,000kWhgeneratedsincethe

beginningoftheprojectin2014wasexceeded,

resultinginavoidanceof51,265.29kgCO2,79.20kg

NOxand0.27kgSO2inemissions.

Monitoring of Emissions

Thecompany’sfirstGreenhouse

GasemissionsInventorywas

preparedinaccordancewiththe

BrazilianGHGProtocolProgram.

Monitoring of Water Consumption and Quality

2

2017 Emissions (tCO2e)

Scope 1:

Scope 2:

Scope 3:

3,772.83

4,081.93

200.2

108.9 *

*Inscope2weshouldincludewhatweconsider

tobe“unmanageableemissions“whicharethose

resultingfromTransmissionLosses.

In2017thistotaled39,667.8(tCO2e).

1


GRI Standards 102 – General Disclosures

ORGANIZATIONAL PROFILE

INDICATOR DESCRIPTION COMMENTS PAGE

Disclosure102-1 Nameoftheorganization(G4-3). 18

Disclosure102-2 Activities,brands,products,andservices(G4-4+G4-PR6). 18

Disclosure102-3 Locationofheadquarters(G4-5). 128

Disclosure102-4 Locationofoperations(G4-6). 18

Disclosure102-5 Ownershipandlegalform(G4-7). 18

Disclosure102-6 Marketsserved(G4-8). 22

Disclosure102-7 Scaleoftheorganization(G4-9). 18

Disclosure102-8 Informationonemployeesandotherworkers(G4-10). 82

Disclosure102-9 Supplychain(G4-12). 92

Disclosure102-10 Significantchangestotheorganizationanditssupplychain(G4-13).

Therewerenosignificantchangesofthisnatureduringtheyear2017.

Disclosure102-11 PrecautionaryPrincipleorapproach(G4-14).

TheprecautionaryprincipleisincludedinCELEO‘sriskmanagementprocesses.

Disclosure102-12 Externalinitiatives(G4-15) 42

Disclosure102-13 Membershipofassociations(G4-16). 50

STRATEGY

Disclosure102-14 Statementfromseniordecision-maker(G4-1). 6;8

Disclosure102-15 Keyimpacts,risks,andopportunities(G4-2). 52

ETHICS AND INTEGRITY

Disclosure102-16 Values,principles,standards,andnormsofbehavior(G4-56). 20

Disclosure102-17 Mechanismsforadviceandconcernsaboutethics(G4-57andG4-58). 34

GOVERNANCE

Disclosure102-18 GovernanceStructure(G4-34). 31

Disclosure102-19 Delegatingauthority(G4-35). 30

Disclosure102-20Executive-levelresponsibilityfor

economic,environmental,andsocialtopics(G4-36).

30

Disclosure102-21 Consultingstakeholdersoneconomic,environmental,andsocialtopics(G4-37). 13

Disclosure102-22 Compositionofthehighestgovernancebodyanditscommittees(G4-38). 30

Disclosure102-23 Chairofthehighestgovernancebody(G4-39). 30

Disclosure102-24 Nominatingandselectingthehighestgovernancebody(G4-40). 31

Disclosure102-25 Conflictsofinterest(G4-41).Thereisnoconflictofinterest

sincetheCompanydoesnothaveaBoardofDirectors.

Disclosure102-26 Roleofhighestgovernancebodyinsettingpurpose,values,andstrategy. 30

INDICATOR DESCRIPTION COMMENTS PAGE

GRI Content IndexGRI 102-55


Disclosure102-27 Collectiveknowledgeofhighestgovernancebody(G4-43).

IMSCommitteemeetings;hiringofspecializedsustainabilityconsultancyfirm;goalsandtargetsmeetings

(ESG).

Disclosure102-28 Evaluatingthehighestgovernancebody’sperformance(G4-44). 30

Disclosure102-29Identifyingandmanagingeconomic,environmental,andsocialimpacts

(G4-45).

InallCELEO‘sprojects,environmentalandsocio-environmentalstudiesarecarriedouttoidentifyandevaluateimpactsintheplanning,implementationandoperationstages.Appropriatemeasuresareimplementedtoprevent,mitigateorcompensatenegativeimpactsandtomaximizepositiveimpacts.MonitoringProgramsareimplementedtomanagethesemeasures,whereapplicable.

Disclosure102-30 Effectivenessofriskmanagementprocesses(G4-46). 30

Disclosure102-31 Reviewofeconomic,environmental,andsocialtopics(G4-47). 52

Disclosure102-32Highestgovernancebody’srolein

sustainabilityreporting(G4-48).

TheExecutiveDirectorisresponsibleforanalyzingandformallyapprovingtheCompany‘ssustainabilityreportandensuringthatallmaterialtopics

areaddressed.

Disclosure102-33 Communicatingcriticalconcerns(G4-49).

Thereisnoprocesstocommunicatecriticalconcernstothehighestgovernancebodygiventhe

Company‘sstructure.AtCeleoRedesBrasil,theBoardofExecutiveOfficers

isanexecutivebody.

Discloure102-34 Natureandtotalnumberofcriticalconcerns(G4-50).

Thereisnoprocesstocommunicatecriticalconcernstothehighestgovernancebodygiventhe

Company‘sstructure.AtCeleoRedesBrasil,theBoardofExecutiveOfficers

isanexecutivebody.

Disclosure102-35 Remunerationpolicies(G4-51). Remunerationpoliciesarebeingstudiedforimplementationin2018.

Disclosure102-36 Processfordeterminingremuneration(G4-52). 82

Disclosure102-37Stakeholders’involvementin

remuneration(G4-53).

Theindicatorwasnotprioritizedinthematerialityprocessforthebase

year2017.

Disclosure102-38 Annualtotalcompensationratio(G4-54).Theindicatorwasnotprioritizedinthematerialityprocessforthebase

year2017.

Disclosure102-39Percentageincreaseinannualtotal

compensationratio(G4-55).


year2017.

STAKEHOLDER ENGAGEMENT

Disclosure102-40 Listofstakeholdergroups(G4-24). 46

Disclosure102-41 Collectivebargainingagreements(G4-11).

AtCELEO,100%oftheemployeesarecoveredbyCollectiveAgreement.Thereisacommitteeresponsibleforrepresentingtheguidelines

establishedbytheemployeesandtheBoardofExecutiveOfficers.Aftertheagenda’sapproval,theinformationistakentoallemployeesandvotedonbythem.Therefore,theprocessis

constructiveanddemocratic.

Disclosure102-42 Collectivebargainingagreements(G4-11).Identifyingandselectingstakeholders(G4-25). 15

Disclosure102-43 Approachtostakeholderengagement(G4-26). 13;46

Disclosure102-44 Keytopicsandconcernsraised(G4-27;G4-PR5). 14

REPORTING PRACTICES

Disclosure102-45 Entitiesincludedintheconsolidatedfinancialstatements(G4-17).

CeleoRedesBrasilS.A.(CELEO)LinhasdeTransmissãoCorumbáS.A.(LTC)EncruzoNovoTransmissoradeEnergia

S.A.(ENTE)PedrasTransmissoradeEnergiaS.A.(PTE)LinhasdeTransmissãoTriânguloS.A.(LTT)ViladoCondeTransmissoradeEnergiaS.

A.(VCTE)CoqueirosTransmissoradeEnergiaS.A.

(CTE)Theresultsforpartially-ownedcompanieswererecognizedusingtheEquityMethod.

Theseare:CaiuáTransmissoradeEnergiaS.A.

(CAIUÁ)IntegraçãoMaranhenseTransmissorade

EnergiaS.A.(IMTE)CantareiraTransmissoradeEnergiaS.A.

(CANTAREIRA)JauruTransmissoradeEnergiaS.A.(JTE)BrilhanteTransmissoradeEnergiaS.A.

(BTE)BrilhanteIITransmissoradeEnergiaS.A.

(BTEII)

INDICATOR DESCRIPTION COMMENTS PAGE INDICATOR DESCRIPTION COMMENTS PAGE


Disclosure102-46 DefiningreportcontentandtopicBoundaries(G4-18). 13

Disclosure102-47 Listofmaterialtopics(G4-19). 14

Disclosure102-48 Restatementsofinformation(G4-22).

N/A.ThisisCeleoNetworksBrazil’ssecondreport,thistimepublicand

audited.

Disclosure102-49 Changesinreporting(G4-23).N/A.ThisisCeleoNetworksBrazil’ssecondreport,thistimepublicand

audited.

Disclosure102-50 Reportingperiod(G4-28). 12

Disclosure102-51 Dateofmostrecentreport(G4-29). 12

Disclosure102-52 Reportingcycle(64-30). 12

Disclosure102-53 Contactpointforquestionsregardingthereport(G4-31). 130

Disclosure102-54 ClaimsofreportinginaccordancewiththeGRIStandards(G4-32). 12

Disclosure102-55 GRIcontentindex(G4-32). 108

Disclosure102-56 Externalassurance(G4-33). AssurancewasperformedbyKPMGIndependentAuditors 128

GRIStandards103–ManagementApproach

Disclosure103-1 Explanationofthematerialtopicandits

Boundary(G4-DMA-a+G4-20+G4-21).13;14

Disclosure103-2

Themanagementapproachandits

components(G4-DMA-b+G4-EN34+

G4-LA16+G4-HR12+G4-SO11+G4-

EN31).

Theformofmanagementis

addressedthroughoutthereportin

thechaptersofthetopicsconsidered

relevant.

Disclosure103-3 Evaluationofthemanagementapproach

(G4-DMA-c).

Theformofmanagementis

addressedthroughoutthereportin

thechaptersofthetopicsconsidered

relevant.

GRIStandards200series–EconomicTopics

ECONOMIC PERFORMANCE (GRI 201)

Disclosure201-1 Directeconomicvaluegeneratedanddistributed(G4-EC1). 60

Disclosure201-2Financialimplicationsandotherrisksandopportunitiesduetoclimatechange(G4-EC2).

Theindicatorwasnotprioritizedinthematerialityprocessforthebaseyear2017.

Disclosure201-3 Definedbenefitplanobligationsandotherretirementplans(G4-EC3).

CELEOdoesnothavearetirementplan.

Disclosure201-4 Financialassistancereceivedfromgovernment(G4-EC4).

CELEOdidnotreceivefinancialaidfromtheGovernmentforthebaseyear2017.

MARKET PRESENCE (GRI 202)

Dsiclosure202-1Ratiosofstandardentrylevelwagebygendercomparedtolocalminimumwage(G4-EC5).


Disclosure202-2 Proportionofseniormanagementhiredfromthelocalcommunity(04-EC6).


INDIRECT ECONOMIC IMPACTS (GRI 203)

Disclosure203-1 Infrastructureinvestmentsandservicessupported(G4-EC7).


Disclosure203-2 Significantindirecteconomicimpacts(G4-EC8).


PROCUREMENT PRACTICES (GRI 204)

Disclosure204-1 Proportionofspendingonlocalsuppliers(G4-EC9).


ANTI-CORRUPTION (GRI 205)

Disclosure205-1 Operationsassessedforrisksrelatedtocorruption(G4-303). 34

Disclosure205-2Communicationandtrainingabout

anti-corruptionpoliciesandprocedures(G4-304).

35

Disclosure205-3 Confirmedincidentsofcorruptionandactionstaken(G4-305). 34;35




ANTI-COMPETITIVE BEHAVIOR (GRI 206)

Disclosure206-1Legalactionsforanti-competitivebehavior,anti-trust,andmonopoly

practices(G4-SO7).


year2017.

Disclosure419-1 SocioeconomicCompliance(GRI419).Theindicatorwasnotprioritizedinthematerialityprocessforthebase

year2017.

GRIStandards300series–EnvironmentalTopics

MATERIALS (GRI 301)

Disclosure301-1 Materialsusedbyweightorvolume(G4-EN1).


year2017.

Disclosure301-2 Recycledinputmaterialsused(G4-EN1).

ThistopicisirrelevanttoCELEORedes’activitiesandoperations.

Disclosure301-3 Reclaimedproductsandtheirpackagingmaterials(G4-EN1).


ENERGY (GRI 302)

Disclosure302-1 Energyconsumptionwithintheorganization(G4-EN13). Infographic 107

Disclosure302-2 Energyconsumptionoutsideoftheorganization.

Disclosure302-3 Energyintensity.

Disclosure302-4 Reductionofenergyconsumption(G4-EN6). Infographic 107

Disclosure302-5 Reductionsinenergyrequirementsofproductsandservices(G4-EN7).


WATER (GRI 303)

Disclosure303-1 Waterwithdrawalbysource(G4-EN8). Infographic 106

Disclosure303-2 Watersourcessignificantlyaffectedbywithdrawalofwater(G4-EN9).

IndicatorisirrelevanttoCeleoRedesBrasil’soperationsandactivities.Thereisnosignificantwaterwithdrawalinany

stageoftheproject.

Disclosure303-3 Waterrecycledandreused(G4-EN10).

IndicatorisirrelevanttoCeleoRedesBrasil’soperationsandactivities.WaterconsumptionatCELEO’soperationsis

notsignificant.

BIODIVERSITY (GRI 304)

Disclosure304-1

Operationalsitesowned,leased,managedin,oradjacentto,protectedareasandareasofhighbiodiversityvalueoutsideprotected

areas(G4-EN11).

104

Disclosure304-2 Significantimpactsofactivities,products,andservicesonbiodiversity(G4-EN12). 102

Disclosure304-3 Habitatsprotectedorrestored(G4-EN13). 104

Disclosure304-4IUCNRedListspeciesandnational

conservationlistspecieswithhabitatsinareasaffectedbyoperations(G4-EN14).

103

EMISSIONS (GRI 305)

Disclosure305-1 Direct(Scope1)GHGemissions(G4-EN15).

CeleoRedesBrasiljoinedtheBrazilianGHGProtocolProgram.ThefirstInventory(scope:2017)receivedexternalverification,withLimitedAssurance,carriedoutbyKPMGIndependentAuditors.

Disclosure305-2 Energyindirect(Scope2)GHGemissions(G4-EN16).

CeleoRedesBrasiljoinedtheBrazilianGHGProtocolProgram.

ThefirstInventory(scope:2017)receivedexternalverification,withLimitedAssurance,carriedoutbyKPMGIndependentAuditors.

Disclosure305-3 Otherindirect(Scope3)GHGemissions(G4-EN17)

CeleoRedesBrasiljoinedtheBrazilianGHGProtocolProgram.ThefirstInventory(scope:2017)receivedexternalverification,withLimitedAssurance,carriedoutbyKPMGIndependentAuditors.

Disclosure305-4 GHGemissionsintensity(G4-EN18).

Disclosure305-5 ReductionofGHGemissions(G4-EN19).

Disclosure305-6 Emissionsofozone-depletingsubstances(ODS)(G4-EN20).

Disclosure305-7Nitrogenoxides(NOX),sulfuroxides

(SOX),andothersignificantairemissions(G4-EN21).

EFFLUENTS AND WASTE (GRI 306)

Disclosure306-1 Waterdischargebyqualityanddestination(G4-EN22).

Effluentistreatedinaseptictank.BOD(biochemicaloxygendemand)analysisis

performedperiodically.Theannualvolumeofdiscardedeffluentswas591.00m3,whichcomesfrom23controlroomsandeightsafetycabins.


Disclosure306-2 Wastebytypeanddisposalmethod(G4-EN23).

Approximatelysixtonsofhazardouswastewererecycled.However,thisvolumewasnotentirelygeneratedin2017,sincetherewaswaste

generationinpreviousyearswhichwasstoredinaccordancewithcurrent

legislation.

106

Disclosure306-3 Significantspills(G4-EN241). TherewasnosignificantleakagefromCELEO‘sfacilitiesin2017.

Disclosure306-4 Transportofhazardouswaste(G4-EN25). 106

Disclosure306-5 Waterbodiesaffectedbywaterdischargesand/orrunoff(G4-EN26).

ThereisnosignificantdischargeofeffluentsanddrainagewaterintowaterbodiesfromCeleoRedesBrasil’sactivitiesandoperations.

ENVIRONMENTAL COMPLIANCE (GRI 307)

Disclosure307-1 Non-compliancewithenvironmentallawsandregulations. 36

AVALIAÇÃO AMBIENTAL DE FORNECEDORES (GRI 308)

Disclosure308-1 Newsuppliersthatwerescreenedusingenvironmentalcriteria(G4-EN32). 93

Disclosure308-2 Negativeenvironmentalimpactsinthesupplychainandactionstaken(G4-EN33). 93


GRIStandards400series–Socialtopics

EMPLOYMENT (GRI 401)

Disclosure401-1 Newemployeehiresandemployeeturnover(LA-1). 82

Disclosure401-2Benefitsprovidedtofull-timeemployeesthatarenotprovidedtotemporaryor

part-timeemployees.86

Disclosure401-3 Parentalleave.

In2017,sixmenandsixwomentookparentalleave.Allreturnedtoworkaftertheleaveperiod.Theretentionrate,after12monthsofleave,was93%amongmenand

85%amongwomen.

LABOR/MANAGEMENT RELATIONS (GRI 402)

Disclosure402-1 Minimumnoticeperiodsregardingoperationalchanges.

Thereisnominimumdeadlinefornotificationofoperationalchanges.However,measuresareadoptedto

minimizetheimpactsarisingfromthesechanges,andtoadaptemployeestothenewprocess,withthesupportoftheSeniorManagement,newslettersandinstructions,face-to-facemeetings,

etc.

OCCUPATIONAL HEALTH AND SAFETY (GRI 403)

Disclosure403-1Workersrepresentationinformaljointmanagement–workerhealthandsafety

committees.88

Disclosure403-2

Typesofinjuryandratesofinjury,occupationaldiseases,

lostdays,andabsenteeism,andnumberofwork-relatedfatalities(G4-LA13).

90

Disclosure403-3 Workerswithhighincidenceorhighriskofdiseasesrelatedtotheiroccupation. 88

Disclosure403-4 Healthandsafetytopicscoveredinformalagreementswithtradeunions(G4-LA8).

ClausesoftheCollectiveAgreementthatcoveroccupationalsafetyissues:

ClauseNine–DangerousWorkAdd-onsClauseSixteen-PeriodicHealthExamination

V-WorkingConditionsClauseTwenty-Three-FirstAid

ClauseTwenty-Four-InternalCommissionforAccidentPrevention

ClauseTwenty-Fifth-MinutesoftheInternalCommissionforAccidentPreventionMeetingsClauseTwenty-Six-NoticeofAccidentsatWorkClauseTwenty-Seven-CompliancewithNR-10

ClauseThirty-GroupLifeInsurance

TRAINING AND EDUCATION (GRI 404)

Disclosure404-1 Averagehoursoftrainingperyearperemployee. 84

Disclosure404-2Programsforupgradingemployeeskillsandtransitionassistanceprograms(G4-

LA).84

Disclosure404-3Percentageofemployeesreceivingregularperformanceandcareerdevelopmentreviews

(G44-LA1).82

DIVERSITY AND EQUAL OPPORTUNITY (GRI 405)

Disclosure405-1 Diversityofgovernancebodiesandemployees(LA).


year2017.



Disclosure405-2 Ratioofbasicsalaryandremunerationofwomentomen.


year2017.

NON-DISCRIMINATION (GRI 406)

Disclosure406-1 Incidentsofdiscriminationandcorrectiveactionstaken.


year2017.

FREEDOM OF ASSOCIATION AND COLLECTIVE BARGAINING (GRI 407)

Disclosure407-1Operationsandsuppliersinwhichtherighttofreedomofassociationandcollectivebargainingmaybeatrisk.

ThesupplierassessmentprocesscarriedoutbyCeleoRedesBrasil

didnotincludethisrisk.

CHILD LABOR (GRI 408)

Disclosure408-1 Operationsandsuppliersatsignificantriskforincidentsofchildlabor.



FORCED OR COMPULSORY LABOR (GRI 409)

Disclosure409-1Operationsandsuppliersatsignificantriskforincidentsofforcedorcompulsory

labor(G4-HR6).



SECURITY PRACTICES (GRI 410)

Disclosure410-1 Securitypersonneltrainedinhumanrightspoliciesorprocedures(G4HR7).

CeleoRedesBrasildidnotpromotethistrainingin2017.

RIGHTS OF INDIGENOUS PEOPLES (GRI 411)

Disclosure411-1 Incidentsofviolationsinvolvingrightsofindigenouspeoples.

Therewasnodiscriminationagainstindigenousortraditionalpeoples

in2017.96

AVALIAÇÃO EM DIREITOS HUMANOS (GRI 412)

Disclosure412-1 Operationsthathavebeensubjecttohumanrightsreviewsorimpactassessments.


year2017.

Disclosure412-2 Employeetrainingonhumanrightspoliciesorprocedures.

CeleoRedesBrasildidnotpromotethistrainingin2017.

Disclosure412-3Significantinvestmentagreementsand

contractsthatincludehumanrightsclausesorthatunderwenthumanrightsscreening.

Therewerenoinvestmentagreementsandcontractsin2017.

LOCAL COMMUNITIES (GRI 413)

Disclosure413-1Operationswithlocalcommunity

engagement,impactassessments,anddevelopmentprograms.

48;49

Disclosure413-2Operationswithsignificantactualandpotentialnegativeimpactsonlocal

communities.

Significantnegativeimpactsonlocalcommunities,ifanyexist,wereidentifiedinsocio-environmentalstudies,andrelevantmitigationmeasureswereimplemented.

SUPPLIER SOCIAL ASSESSMENT (GRI 414)

Disclosure414-1 Newsuppliersthatwerescreenedusingsocialcriteria. 93

Disclosure414-2 Negativesocialimpactsinthesupplychainandactionstaken. 93

PUBLIC POLICY (GRI 415)

Disclosure415-1 Politicalcontributions. Therewerenopoliticalcontributionsin2017.

CUSTOMER HEALTH AND SAFETY (GRI 416)

Disclosure416-1Assessmentofthehealthandsafetyimpactsofproductandservice

categories.


year2017.

Disclosure416-2Incidentsofnon-complianceconcerningthehealthandsafetyimpactsofproducts

andservices.


year2017.

MARKETING AND LABELING (GRI 417)

Disclosure417-1 Requirementsforproductandserviceinformationandlabelling.

ThisindicatorisnotapplicableforCeleoRedesBrasil’soperations.

Disclosure417-2Incidentsofnon-complianceconcerningproductandserviceinformationand

labelling.


Disclosure417-3 Incidentsofnon-complianceconcerningmarketingcommunications.


CUSTOMER PRIVACY (GRI 418)

Disclosure418-1Substantiatedcomplaintsconcerningbreachesofcustomerprivacyandlosses

ofcustomerdata.


SOCIOECONOMIC COMPLIANCE (GRI 419)


PLANT DECOMMISSIONING

G4-DMAEUSDEC(formerEU9)

Provisionsfordecommissioningofnuclearpowersites.


SYSTEM EFFICIENCY

G4-EU11Averagegenerationefficiencyofthermalplantsbyenergysourceandbyregulatory

regime.


G4-EU12 Transmissionanddistributionlossesasapercentageoftotalenergy.

CELEOdoesnothavedistributionlines.

Directmeasurementsarestillnotmadeatthetransmissionfacilitiestomeasureactualtransmissionlosses.Intheemissionscalculation(scope2)ofthe2017Inventoryapreliminary

estimatewasmade.

CATEGORY ENVIRONMENTAL

BIODIVERSITY

G4-EU13 Biodiversityofoffsethabitatscomparedtothebiodiversityoftheaffectedareas. 102

CATEGORY SOCIAL – LABOR PRACTICES AND DECENT WORK

EMPLOYMENT

G4-DMAEUSDLA(formerG4-EU14)

Programsandprocessestoensuretheavailabilityofaskilledworkforce(DMA). 84

G4-EU15

Percentageofemployeeseligibletoretireinthenext5and10yearsbrokendownbyjob

categoryandbyregion.


year2017.

G4-DMAEUSDLA

(formerG4-EU16)

Policiesandrequirementsregardinghealthandsafetyofemployeesandemployeesofcontractorsandsubcontractors(DMA). 88

G4-EU17Daysworkedbycontractorandsubcontractor

employeesinvolvedinconstruction,operation&maintenanceactivities.


year2017.

Disclosure419-1 Non-compliancewithlawsandregulationsinthesocialandeconomicarea. 36

GRIStandards–SectorSupplement

ORGANIZATIONAL PROFILE

GRI-EU1Installedcapacity,brokendownby

primaryenergysourceandbyregulatoryregime.


GRI-EU2Netenergyoutputbrokendownby

primaryenergysourceandbyregulatoryregime.


GRI-EU3Numberofresidential,industrial,

institutionalandcommercialcustomeraccounts.


GRI-EU4Lengthofaboveandundergroundtransmissionanddistributionlinesby

regulatoryregime.

In2017,CeleoRedeswonabidwhichincluded111kmof500kVTLand255kmof230kVTL.Thecriterionusedtoinformthe

extensionofTLswastheyearoftheauction.

CELEOdoesnothavedistributionlines.

GRI-EU5AllocationofCO2eemissionsallowancesorequivalent,brokendownbycarbon

tradingframework.


year2017.

CATEGORY ECONOMIC

AVAILABILITY AND RELIABILITY


G4-DMAEUSDEC(formerG4-EU6)

Managementapproachtoensureshortandlong-termelectricityavailabilityand

reliability(DMA).

68

G4-EU10

Plannedcapacityagainstprojectedelectricitydemandoverthelongterm,brokendownbyenergysourceand

regulatoryregime.


DEMAND-SIDE MANAGEMENT

G4-DMAEUSDEC

(formerEU7)

Demand-sidemanagementprogramsincludingresidential,commercial,institutionalandindustrialprograms.


RESEARCH AND DEVELOPMENT

G4-DMAEUSDECformerG4-EU8)

Researchanddevelopmentactivityandexpenditureaimedatprovidingreliableelectricityandpromotingsustainable

development(DMA).

79


G4-EU18 Percentageofcontractorandsubcontractoremployeesthathaveundergonerelevant

healthandsafetytraining.

TheCompanyhasatrainingprogramthatincludesthetrainingrequiredbythelegislationandotherprogramsthatarepertinenttothe

developmentofactivities.Outsourcedworkersand

subcontractorsmeetthetrainingscheduleprovidedinPG-025

(generalprocedureforoccupationalhealthandsafetyforvisitorsandcontractors),butthereisstillno

capacityindicator.

CATEGORY SOCIAL – SOCIETY

LOCAL COMMUNITIES

G4-DMAEUSDSO(formerG4-EU19)

Stakeholderparticipationindecisionmakingprocessesrelatedtoenergyplanningandinfrastructuredevelopment(DMA).

Stakeholderparticipationoccursthroughopinionsandcontributionsmadebyregulatoryagents,aswellasparticipationinclassassociations,suchasABDIBandABRATE,aswellasparticipationinpublic

hearings.Forexample:therewasamodificationintheCantareiraProject’sroutetorespectthe

requirementofnovisualimpactonthelandscape.


Approachtomanagingtheimpactsofdisplacement(DMA). 96

G4-EU22Numberofpeoplephysicallyor

economicallydisplacedandcompensation,brokendownbytypeofproject.

96

DISASTER/ EMERGENCY PLANNING AND RESPONSE


Contingencyplanningmeasures,disaster/emergencymanagementplanandtrainingprograms,andrecovery/restorationplans

(DMA).

73

CATEGORY SOCIAL – PRODUCT RESPONSIBILITY

CUSTOMER HEALTH AND SAFETY

G4-EU25Numberofinjuriesandfatalitiestothe

publicinvolvingcompanyassets,includinglegaljudgments,settlementsandpending

legalcasesofdiseases.


year2017.

ACCESS

G4-DMAEUSDPR(formerG4-EU23)

Programs,includingthoseinpartnershipwithgovernment,toimproveormaintainaccesstoelectricityandcustomersupport

services(DMA).


G4-EU26 Percentageofpopulationunservedinlicenseddistributionorserviceareas.


G4-EU27 Numberofresidentialdisconnectionsfornon-payment,brokendownbydurationofdisconnectionandbyregulatoryregime.


G4-EU28 Poweroutagefrequency. ThisindicatorisnotapplicableforCeleoRedesBrasil’soperations.

G4-EU29 Averagepoweroutageduration. ThisindicatorisnotapplicableforCeleoRedesBrasil’soperations.

G4-EU30 Averageplantavailabilityfactorbyenergysourceandbyregulatoryregime.


PROVISION OF INFORMATION

G4-DMAEUSDPR(formerG4-EU24)

Practicestoaddresslanguage,cultural,lowliteracyanddisabilityrelatedbarrierstoaccessingandsafelyusingelectricityandcustomersupportservices(DMA).




Annual Social Balance Sheet 2017CELEO REDES

1 - CALCULATION BASE 2017 AMOUNT (BRL THOUSANDS)

2016 AMOUNT (BRL THOUSANDS)

NetIncome(NI) 195,183 231,734

Resultbeforetaxonprofits 107,709 158,047

Grosspayroll 18,703.19 17,346.05

2 - INTERNAL SOCIAL INDICATORS Amount (thousand)

% on Gross Payroll % on NI Amount

(thousand)

% on Gross Payroll

% on NI

Food 1,521.01 8.13% 0.78% 1,203.27 6.94% 0.52%

Mandatorysocialcharges 6,595.53 35.26% 3.38% 5,514.69 31.79% 2.38%

Privatepensionfund 0 0% 0.00% 0 0.00% 0.00%

Healthcare 2,410.41 12.89% 1.23% 2,013.80 11.61% 0.87%

OccupationalHealthandSafety 0 0% 0.00% 0 0.00% 0.00%

Education 0 0% 0.00% 6.02 0.03% 0.00%

Culture 0 0% 0.00% 0 0.00% 0.00%

TrainingandProfessionalDevelopment 570.91 3.05% 0.29% 203.71 1.17% 0.09%

Crechesorchildcareassistance 25.04 0% 0.01% 15.86 0.09% 0.01%

Profitsharingplans 0 0% 0.00% 0 0.00% 0.00%

Transport 348.19 2% 0.18% 283.99 1.64% 0.12%

Others 26.96 0% 0.01% 32.00 0.18% 0.01%

Total - Internal Social Indicators 11,498.04 61.48% 5.89% 9,273.33 53.46% 4.00%

3 - EXTERNAL SOCIAL INDICATORS Amount (thousand)


(thousand)

% on Gross Payroll

% on NI

Education 0 0.00% 0.00% 0 0.00% 0.00%

Culture 0 0.00% 0.00% 0 0.00% 0.00%

HealthandSanitation 0 0.00% 0.00% 0 0.00% 0.00%

Sport 0 0.00% 0.00% 0 0.00% 0.00%

Combattinghungerandfoodsecurity 0 0.00% 0.00% 0 0.00% 0.00%

Others(RouanetLawProjects) 207.38 0.19% 0.11% 0 0.00% 0.00%

Totalcontributionstosociety 207.38 0.19% 0.11% 0 0.00% 0.00%

Taxes(excludingsocialsecurity) 20.50% 11.31% 59,388.00 37.58% 25.63%

Total - External Social Indicators 22,288.38 20.69% 11.42% 59,388.00 37.58% 25.63%

4 - ENVIRONMENTAL INDICATORS Amount (thousand)


(thousand)

% on Gross Payroll

% on NI

Investmentsrelatedtothecompany‘sproduction/operations

3,876 3.60% 1.99% ND - -

Investmentsinexternalprojectsand/orprograms 0 0.00% 0.00% ND - -

Total environmental investments


Withregardstosettingannual targetstominimizewaste,generalconsumptionforproduction/operationsansincreasingefficentcyofresourceuse,thecompany:

()doesnothavetargets()achieves51to75%(X)achieves0to50%()achieves76to100%

(X)doesnothavetargets()achieves51to75%()achieves0to50%()achieves76to100%

5 - INDICATORS FOR THE WORKFORCE 2017 2016

Nºofemployeesattheendoftheperiod 230 228

Nºofnewhiringsintheperiod 56 38

Nºofemployeesleaving/maderedundantintheperiod

36 32

Nºofcontractedworkersattheendoftheperiod 35 31

Nºofinternsattheendoftheperiod 2 2

Nºofyoungapprenticesattheendoftheperiod 0 0

Nºofemployeesover41attheendoftheperiod 53 47

Nºofwomenworkinginthecompanyattheendoftheperiod

44 41

%ofmanagementpositionsheldbywomen 6% 6%

NºofAfro-Braziliansworkingatthecompanyattheendoftheperiod

30 30

%ofmanagementpositionsheldbyAfro-Brazilians

0% 0%

Nºofwhitesworkingatthecompanyattheendoftheperiod

200 198

Nºofpeoplewithdisabilitiesorspecialneedsattheendoftheperiod

0 0

6 - QUALIFICATIONS OF THE WORKFORCE 2017 2016

Nºofpostgraduates(specialists,mastersanddoctors)

21 19

Nºofgraduates 64 60

Nºofpeoplewithincompletegraduation 0 0

Nºofpeoplewithhighschooleducation 102 104

Nºofpeoplewithincompletehighschooleducation

0 0

Nºofpeoplewithprimaryeducation 43 45

Nºofpeoplewithincompleteprimaryschooleducation

0 0

Nºofnon-literatepeople 0 0

7 - INFORMATION RELEVANT TO CORPORATE CITIZENSHIP 2017 2016

Ratiobetweenhighestandlowestremunerationinthecompany

30.75 30.75

Totalnumberofaccidentsatwork 2 2

Thesocialandenvironmentalprojectsdevelopedbythecompanyweredefinedby:

(X)SeniorMan.

()SeniorMan.andmanagers

()allemployees(X)

SeniorMan.


()allemployees

Thesafetyandhealthinessofpracticesintheworkplaceweredefinedby:

(X)SeniorMan.

()allemployees

(X)all+Cipa()SeniorMan.andmanagers

()allemployees

(X)all+Cipa

Asregardsfreedomofassociation,therighttocollectivebargainingandtheinternalrepresentationofworkers,thecompany:

()doesnotgetinvolved

(X)followstheOITstandards

()incentivizesandfollowsthe

OIT

()doesnotgetinvolved

(X)followstheOITstandards

()incentivizesandfollowsthe

OIT

Theprivatepensionfundcovers:()

SeniorMan.


()allemployees()

SeniorMan.


()allemployees

Theprofitsharingplancovers:()

SeniorMan.


(X)allemployees()

SeniorMan.


(X)allemployees

Intheselectionofsuppliers,thesameethicalandsocialandenvironmentalresponsibilitystandardsadoptedbythecompany:

()arenotconsidered

()aresuggested

(X)arerequired()arenotconsidered

()aresuggested

(X)arerequired

Asforemployeeparticipationinvoluntaryworkprograms,thecompany:

(x)doesnotgetinvolved

()supports()organizesandencourages

(x)doesnotgetinvolved

()supports()organizesandencourages

Totalnumberofconsumercomplaintsandcriticisms:

tothecompany

0

toProcon0

totheCourts0

tothecompany

0

toProcon0

totheCourts0

%ofcomplaintsandcriticismsansweredorresolved:

tothecompanyNA

toProconNA

totheCourtsNA

tothecompanyNA

toProconNA

totheCourtsNA

Totaladdedvaluetobedistributed(inthousandBRL):

In 2017: BRL 131,020 In 2016: ND

DistributionofValueAdded(DVA):12%government45%employees33%shareholders10%suppliers

-

8 - OTHER INFORMATION

InformationprovidedincludestheparentcompanyCeleoRedeBrasilandthefollowingconcessionaires:CaiuáTransmissoradeEnergia,CantareiraTransmissoradeEnergia,CoqueirosTransmissoradeEnergia,EncruzoNovoTransmissoradeEnergia,IntegraçãoMaranhenseTransmissoradeEnergia,JauruTransmissoradeEnergia,LinhadeTransmissãoCorumbá,LTTriângulo,PedrasTransmissoradeEnergia,VilaCondeTransmissoradeEnergia,BrilhanteTrasmissoradeEnergiaandBrilhanteIITransmissoradeEnergia.


KPMG Financial Risk & Actuarial Services Ltda.Rua Arquiteto Olavo Redig de Campos, 105, 6º andar - Torre A04711-904 - São Paulo/SP - BrasilCaixa Postal 79518 - CEP 04707-970 - São Paulo/SP - BrasilTelefone +55 (11) 3940-1500, Fax +55 (11) 3940-1501www.kpmg.com.br

Limited assurance report issued by independent auditors TotheBoardofDirectors,ShareholdersandStakeholdersCELEO Redes BrasilRio de Janeiro - RJ

Introduction

WehavebeenengagedbyCELEORedesBrasil(“CELEO”or“Company”)toapplylimitedassuranceproceduresonthesustainabilityinformationdisclosedinCELEO´sAnnualReport,relatedtotheyearendedDecember31st,2017.

Responsibilities of CELEO’s Management

TheManagementofCELEOisresponsibleforadequatelypreparingandpresentingthesustainabilityinformationinthe2017AnnualReportinaccordancewiththeGlobalReportingInitiative(GRI)SustainabilityReportingStandards,aswellastheinternalcontrolsdeterminednecessarytoensurethisinformationisfreefrommaterialmisstatement,resultingfromfraudorerror.Independent auditors’ responsibility

Ourresponsibilityistoexpressaconclusionabouttheinformationinthe2017AnnualReportbasedonalimitedassuranceengagementconductedinaccordancewithTechnicalCommunication(TC)07/2012,whichwaspreparedbasedonNBCTO3000(AssuranceEngagementsOtherThanAuditsandReviews),bothissuedbytheBrazilianFederalAccountingCouncil-CFCandequivalenttointernationalstandardISAE3000,issuedbytheInternationalFederationofAccountantsandapplicabletoNon-FinancialHistoricalInformation.Thesestandardsrequirecompliancewithethicalrequirements,includingindependenceones,andtheengagementisalsoconductedtoprovidelimitedassurancethattheinformationdisclosedintheCELEO’s2017AnnualReport,takenasawhole,isfreefrommaterialmisstatement.

AlimitedassuranceengagementconductedinaccordancewithNBCTO3000(ISAE3000)consistsmainlyofquestionsandinterviewswiththeManagementofCELEOandotherprofessionalsoftheCompanyinvolvedinthepreparationoftheinformationdisclosedinthe2017AnnualReportanduseofanalyticalprocedurestoobtainevidencethatenablesustoreachalimitedassuranceconclusionaboutthesustainabilityinformationtakenasawhole.Alimitedassuranceengagementalsorequiresadditionalprocedureswhentheindependentauditoracknowledgesissueswhichmayleadthemtobelievethattheinformationdisclosedinthe2017AnnualReporttakenasawholecouldpresentmaterialmisstatement.

Theselectedprocedureswerebasedonourunderstandingoftheissuesrelatedtothecompilation,materialityandpresentationoftheinformationdisclosedinthe2017AnnualReport,onotherengagementcircumstancesandalsoonourconsiderationsregardingareasandprocessesassociatedwithmaterialsustainabilityinformationdisclosedwhererelevantmisstatementcouldexist.

The procedures consisted of:

a. Engagementplanning:consideringthematerialaspectsforCELEO’sactivities,therelevanceoftheinformationdisclosed,theamountofquantitativeandqualitativeinformationandtheoperationalsystemsandinternalcontrolsthatservedasabasisforpreparationoftheinformationintheCELEO’s2017AnnualReport.Thisanalysisdefinedtheindicatorstobecheckedindetails;

b. Understandingandanalysisofthedisclosedinformationrelatedtomaterialaspectsmanagementapproach;c. Analysisofpreparationprocessesofthe2017AnnualReportanditsstructureandcontent,basedonthe

PrinciplesforDefiningReportContentandQualityoftheGRISustainabilityReportingStandards;d. Evaluationofnonfinancialindicatorsselected:

•Understandingofthecalculationmethodologyandproceduresforthecompilationofindicatorsthroughinterviewswithmanagementresponsiblefordatapreparation;•Applicationofanalyticalproceduresregardingdataandinterviewsforqualitativeinformationandtheircorrelationwithindicatorsdisclosedinthe2017AnnualReport;•Analysisofevidencesupportingthedisclosedinformation;•VisitstoCELEO’sofficesandsitesforapplicationoftheseprocedures,anditems(b)and(c);

e. Analysisofwhethertheperformanceindicatorsomissionandjustificationarereasonabletobeaccepted

associatedtoaspectsandtopicsdefinedasmaterialinthematerialityanalysisoftheCompany;f. Comparisonoffinancialindicatorswiththefinancialstatementsand/oraccountingrecords.

Webelievethattheinformation,evidenceandresultswehaveobtainedaresufficientandappropriatetoprovideabasisforourlimitedassuranceconclusion.

Scope and limitations

Theproceduresappliedtoalimitedassuranceengagementaresubstantiallylessextensivethanthoseappliedtoareasonableassuranceengagement.Therefore,wecannotprovideassurancethatweareawareofalltheissuesthatwouldhavebeenidentifiedinareasonableassuranceengagement,whichaimstoissueanopinion.Ifwehadconductedareasonableassuranceengagement,wemayhaveidentifiedotherissuesandpossiblemisstatementswithintheinformationpresentedinthe2017AnnualReport.Nonfinancialdataissubjecttomoreinherentlimitationsthanfinancialdata,duetothenatureanddiversityofthemethodsusedtodetermine,calculateorestimatethesedata.Qualitativeinterpretationofthedata‘smateriality,relevanceandaccuracyaresubjecttoindividualassumptionsandjudgments.Additionally,wehavenotexamineddatarelatedtopriorperiods,evaluatedtheadequacyofthecompany´spolicies,practicesandsustainabilityperformance,norfutureprojectionsandtargets.

Conclusion Basedontheprocedurescarriedout,describedearlierinthisreport,wehavenotidentifiedanyrelevantinformationthatleadsustobelievethattheinformationinCELEO’s2017AnnualReportisnotfairlystatedinallmaterialaspectsinaccordancewiththeGRISustainabilityReportingStandards,aswellasitssourcerecordsandfiles.

São Paulo, June 11th, 2018

KPMGAssessoresLtda.CRC2SP034262/O-4F-SP

Eduardo V. CipulloAccountant CRC 1SP135597/O-6

KPMGFinancialRisk&ActuarialServicesLtda.

Ricardo Algis ZibasDirector

External

Assurance Letter


Corporate Information

CELEOREDES

Director and Secretary:JoaquínGomezdeOlea

Members of the Board of Diretors:JoaquínGomezdeOlea

JoséÁngelLostao

DirkHovers

RobertJanBakker

CELEOREDESBRASILS/A (GRI 102-3)

CNPJ04.718.109/0001-10

I.E77.565.655

I.M313.171-8

Av.MarechalCâmara,160-sala1433

Centro/RJ-20.020-080

Brazil

Phone:+55(21)3171-7000

Contactfordoubtsand/or

suggestions(102-53)

New Business Developmentand Sustainability Management

MarceloViniciusVieiraLima

[email protected]

CarolinaGonzalezGonzagadeOliveira

[email protected]

Report preparation

CELEOREDESBRASIL

Executive Director: FranciscoAntolinChicaPadilla

Coordination of the GRI Report: MarceloViniciusVieiraLima

GRIConsultingandText:

Keyassociados

LimitedAssurance:

KPMGAuditoresIndependentes

Layout:

KiteEstratégiasDigitais

Translation:

SimonRowe


Celeo Redes Brasil136 Sustainability Report • 2017

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