Related Appendices (Appendices Database)

Related Documents

Registration Details

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Files Attached (Supplementary to the Organizational Instrument)

PI0032-v.1 – Appendix 1 – Definitions

PI0032-v.1 – Appendix 2 – Declaration of Companies Controlled – Individual – item 3.1.1 (a)

Management

Executive Officers and members of the Board of Directors of the Company.

Company or Sabesp

Companhia de Saneamento Básico do Estado de São Paulo – Sabesp.

Affiliate

A company over which Sabesp has significant influence, as defined in paragraphs 1, 4 and 5 of Art. 243 of Federal Law 6,404/1976.

According to the definition of a related party in CPC 05(R1), an affiliate includes its subsidiaries and a joint venture includes its subsidiaries. Therefore, for instance, the subsidiary of an affiliate and an investor who exercises significant influence over the affiliate are related parties.

Market conditions

Pursuant to Article 30 paragraph 4 of the Program Highlights in Governance of Government Controlled  Companies created by B3 (Brasil, Bolsa, Balcão S.A.), transactions with related parties that are to be classified in market conditions  must meet the following requirements:

I – competitiveness: prices and terms of the services must be in line with those practiced in the market;

II -   compliance: the government controlled company must comply with contractual terms and responsibilities;

III - transparency: there must be adequate reporting of the terms agreed, and they must be reflected in the government controlled  company's financial statements;

IV – equity: there must be mechanisms preventing discrimination or privilege, and practices to ensure that privileged information and business opportunities are not used for personal benefit or to the benefit of third parties; and

V – commutativity: proportional benefits for each contractor

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Conflict of Interest

Situations of conflict of interest arise when a member of the management, shareholder or other governance agent is not independent to the matter under discussion and can influence or make decisions motivated by self-interest, or for reasons other than those of the company, even if they converge to the company’s interest. Source: item 5.2 of the Brazilian Governance Code – Publicly-held Companies.

Subsidiary

A company controlled directly or indirectly by Sabesp, as defined in paragraph 2 of Art. 243 of Federal Law 6,404/1976.

Control

The investor controls the investee when the former is subject to, or has rights to, variable returns arising from its involvement with the investee and has the ability to influence these returns through its power over the same investee.

For more information, see CPC 36 (R3).

Joint control

This is the contractually agreed sharing of control of a business, which exists only when decisions on important activities require the unanimous consent of the parties sharing control.

For more information, see CPC 18 (R2) and CPC 19 (R2).

CPC 05 (R1)

Technical Pronouncement CPC 05 (R1) – Related Parties Disclosures, issued by the Accounting Pronouncements Committee on September 3, 2010.

CPC 18 (R2)

Technical Pronouncement CPC 18 (R2) – Investments in Affiliates, Subsidiary or Joint Venture, approved by the Accounting Pronouncements Committee on December 7, 2012.

CPC 19 (R2)

Technical Pronouncement CPC 19 (R2) – Interests in Joint Ventures, approved by the Accounting Pronouncements Committee on November 9, 2012.

CPC 36 (R3)

Technical Pronouncement CPC 36 (R3) – Consolidated Financial Statements, approved by the Accounting Pronouncements Committee on December 7, 2012.

Business Group

According to CPC 36 (R3):

 “Business group” is the parent company and all its subsidiaries.

 “Parent company” is an entity that controls one or more subsidiaries.

 “Subsidiary” is an entity controlled by another entity.

Significant influence

According to CPC 18 (R2), significant influence is the power to participate in decisions on financial and operational policies of a subsidiary, but without having individual or joint control of these policies.

Pursuant to paragraphs 4 and 5 of Article 243 of Federal Law 6,404/1976:

·            “Significant influence” is considered to exist when the investing company has or exercises the power to participate in a subsidiary’s financial or operational policies, without having control.

·           Significant influence is assumed when the investing company holds 20% (twenty percent) or more of the voting capital of a subsidiary, without controlling it.

Members of the Statutory Bodies

Members of the Board of Directors, Officers, Members of the Fiscal Council (members and alternates), members of the Audit Committee, the Eligibility and Advisory Committee and any other bodies with technical or consultative functions, existing or to be created by statutory ordinance of Sabesp.

Close family members of an individual

According to CPC 05 (R1), close family members of an individual are family members who can be expected to wield influence over, or be influenced by, the individual in business matters, and include:

a) the individual’s children, spouse or cohabitant;

b) the children of the individual’s spouse or cohabitant; and

c) dependents of the individual and the individual’s spouse or cohabitant.

The people described above must be declared as being close family members, adding also relatives to the third degree, including relatives by affinity, if they exercise influence or are influenced by the individual in their dealings with Sabesp.

Related party

According to CPC 05 (R1), a related party is a person or entity which is related to the company preparing its financial statements (referred to in the Technical Pronouncements as the “reporting entity”).

 (a)  An individual, or a close relative of the individual, is related to the reporting entity if:

 (i)   they have full or shared control over the reporting entity;

 (ii) they have significant influence over the reporting entity; or

 (iii)        they are part of the key management personnel of the reporting entity or of its parent company.

 (b)  An entity is related to the reporting entity if any of the following is true:

 (i)   the entity and the reporting entity are members of the same business group (this means that the parent company and each subsidiary are inter-related, and the entities under common control are related to each other);

 (ii)  the entity is an affiliate or joint venture of the other entity (or an affiliate or joint venture of a member of a business group of which the other entity is a member);

 (iii) both the entities are joint ventures of a third entity;

 (iv) one entity is a joint venture of a third entity and the other entity is an affiliate of the same third entity;

 (v) the entity is a post-employment benefit plan of which the beneficiaries are the employees of both entities – the one which discloses information and the one related to it. If the reporting entity is itself a post-employment benefit plan, the employees who contribute to the plan will also be considered to be related to that reporting entity;

 (vi) the entity is fully or jointly controlled by a person described in (a);

 (vii)      a person described in (a)(i) has significant influence over the entity, or is one of the key management personnel of the entity (or of the entity’s parent company);

(viii)       the entity, or any member of the group to which it belongs, provides key management personnel services to the reporting entity or to the parent company of the latter.(included under Revision CPC 06).

Key management personnel

According to CPC 05 (R1), key management personnel are people with direct or indirect authority and responsibility for planning, management and control of the entity’s activities, including any of its management members (executive or otherwise).

For the purposes of this Policy, key management personnel of Sabesp are the members of the Company’s management.

Transaction with related parties

According to CPC 05 (R1), a transaction with a related party is the transfer of funds, services or obligations between the reporting entity and a related party, irrespective of whether consideration is paid. For example:

 (a)  purchases and sales of goods (finished or unfinished);

 (b) purchases and sales of properties and other assets;

 (c) the supply or receipt of services;

 (d) leases;

 (e) transfers of research and development;

 (f) transfers under licensing agreements;

 (g) transfers of a financial nature (including loans and capital contributions in cash or the equivalent);

 (h) the provision of guarantees, accommodation of negotiable instrumentor sureties;

 (i)   the assumption of commitments to do something if a particular event occurs, or does not occur, in the future, including contracts to be executed (recognized or otherwise); and

 (j)   the settlement of liabilities on behalf of the entity or by the entity on behalf of a related party.

CPF

Name

Degree of relationship

CNPJ

Company Name

Address

Name of the partners