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ITR - Quarterly Earnings Release - June 30, 2019 - CENTRAIS ELÉTRICAS DE SANTA CATARINA S.A. Version: 1 Contents Company Data Capital Ownership 1 Individual Financial Statements Balance Sheet - Assets 2 Balance Sheet - Liabilities 3 Statement of Income 4 Statement of Comprehensive Income 5 Cash Flow Statement 6 Statement of Changes in Equity DMPL - January 1, 2019 to June 30, 2019 7 DMPL - January 1, 2018 to June 30, 2018 8 Value Added Statement 9 Consolidated Financial Statements Balance Sheet - Assets 10 Balance Sheet - Liabilities 12 Statement of Income 14 Statement of Comprehensive Income 16 Cash Flow Statement 17 Statement of Changes in Equity DMPL - January 1, 2019 to June 30, 2019 18 DMPL - January 1, 2018 to June 30, 2018 19 Value Added Statement 20 Comment on Performance 21 Notes 26 Other information that the Company Considers Relevant 77 Expert Opinions and Statements Special Review Report - Without Qualification 81 Officers’ Statement on the Income Statements 82 Officers’ Statement on the Report of Independent Auditor 83

Contents€¦ · Statement of Income 14 . Statement of Comprehensive Income 16 . Cash Flow Statement 17 . Statement of Changes in Equity . DMPL - January 1, 2019 to June 30, 2019

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Page 1: Contents€¦ · Statement of Income 14 . Statement of Comprehensive Income 16 . Cash Flow Statement 17 . Statement of Changes in Equity . DMPL - January 1, 2019 to June 30, 2019

ITR - Quarterly Earnings Release - June 30, 2019 - CENTRAIS ELÉTRICAS DE SANTA CATARINA S.A. Version: 1

Contents

Company Data

Capital Ownership 1

Individual Financial Statements

Balance Sheet - Assets 2

Balance Sheet - Liabilities 3

Statement of Income 4

Statement of Comprehensive Income 5

Cash Flow Statement 6

Statement of Changes in Equity

DMPL - January 1, 2019 to June 30, 2019 7

DMPL - January 1, 2018 to June 30, 2018 8

Value Added Statement 9

Consolidated Financial Statements

Balance Sheet - Assets 10

Balance Sheet - Liabilities 12

Statement of Income 14

Statement of Comprehensive Income 16

Cash Flow Statement 17

Statement of Changes in Equity

DMPL - January 1, 2019 to June 30, 2019 18

DMPL - January 1, 2018 to June 30, 2018 19

Value Added Statement 20

Comment on Performance 21

Notes 26

Other information that the Company Considers Relevant 77

Expert Opinions and Statements

Special Review Report - Without Qualification 81

Officers’ Statement on the Income Statements 82

Officers’ Statement on the Report of Independent Auditor 83

Page 2: Contents€¦ · Statement of Income 14 . Statement of Comprehensive Income 16 . Cash Flow Statement 17 . Statement of Changes in Equity . DMPL - January 1, 2019 to June 30, 2019

ITR - Quarterly Earnings Release - June 30, 2019 - CENTRAIS ELÉTRICAS DE SANTA CATARINA S.A. Version: 1

PAGE: 1 of 83

Company Data / Capital Ownership

Number of Shares Current Quarter (thousand) June 30, 2019

From the paid-in capital

Common 15,527

Preferred 23,044

Total 38,571

In Treasury

Common 0

Preferred 0

Total 0

Page 3: Contents€¦ · Statement of Income 14 . Statement of Comprehensive Income 16 . Cash Flow Statement 17 . Statement of Changes in Equity . DMPL - January 1, 2019 to June 30, 2019

ITR - Quarterly Earnings Release - June 30, 2019 - CENTRAIS ELÉTRICAS DE SANTA CATARINA S.A. Version: 1

PAGE: 2 of 83

Individual Financial Statements / Statement

of Financial Position- Assets (R$ thousand)

Code of the Code of Account

Description Current Quarter June 30, 2019

Previous Fiscal Year

December 31, 2018

1 Total Assets 1,952,197 1,849,198 1.01 Current Assets 43,078 66,897 1.01.01 Cash and Cash Equivalents 15,884 16,763 1.01.06 Taxes to be Recovered 2,032 1,925 1.01.06.01 Current Taxes to Recover 2,032 1,925 1.01.08 Other Current Assets 25,162 48,209 1.01.08.03 Others 25,162 48,209 1.01.08.03.01 Dividends receivable 25,133 48,006 1.01.08.03.03 Other Credits 29 203 1.02 Non-Current Assets 1,909,119 1,782,301 1.02.01 Long-term receivables 160,227 159,760 1.02.01.02 Financial Investments Measured at Fair Value through

Other Comprehensive Income 137,478 137,478

1.02.01.02.01 Trading Securities 137,261 137,261 1.02.01.02.02 Other Securities 217 217 1.02.01.09 Credits with Related Party 0 2,604 1.02.01.09.03 Credits with Controlling Shareholders 0 2,604 1.02.01.10 Other Non-Current Assets 22,749 19,678 1.02.01.10.03 Judicial Deposits 22,749 19,678 1.02.02 Investments 1,743,174 1,616,555 1.02.02.01 Corporate Share 1,743,174 1,616,555 1.02.02.01.01 Holdings in Associates 104,801 89,884 1.02.02.01.02 Holdings in Subsidiaries 1,548,188 1,443,925 1.02.02.01.04 Other Investments 90,185 82,746 1.02.03 Property, Plant and Equipment 20 37 1.02.03.01 Property, Plant and Equipment in Operation 20 37 1.02.04 Intangible assets 5,698 5,949 1.02.04.01 Intangible Assets 5,698 5,949 1.02.04.01.01 Concession Agreement 5,698 5,949

Page 4: Contents€¦ · Statement of Income 14 . Statement of Comprehensive Income 16 . Cash Flow Statement 17 . Statement of Changes in Equity . DMPL - January 1, 2019 to June 30, 2019

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PAGE: 3 of 83

Individual Financial Statements / Balance

Sheet – Liabilities (R$ thousands) Code of the Description Current Quarter Previous Fiscal Year Code of Account

June 30, 2019 December 31, 2018

2 Total liabilities and stockholders' equity 1,952,197 1,849,198 2.01 Current liabilities 21,441 41,717 2.01.01 Social and Labor Obligations 771 749 2.01.01.01 Social Obligations 771 749 2.01.01.01.01 Social Charges 771 749 2.01.02 Suppliers 440 1,092 2.01.02.01 National Suppliers 440 1,092 2.01.03 Tax compliance 95 86 2.01.03.01 Federal Tax Obligations 90 83 2.01.03.01.02 Other Federal Tax Obligations 87 78 2.01.03.01.03 PIS/COFINS 3 5 2.01.03.03 Municipal Tax Obligations 5 3 2.01.05 Other liabilities 20,135 39,790 2.01.05.02 Others 20,135 39,790 2.01.05.02.01 Dividends and Interest on Equity Payable 19,929 39,524 2.01.05.02.04 Other Current Liabilities 206 266 2.02 Non-current liabilities 4,490 6,625 2.02.04 Provisions 4,490 6,625 2.02.04.01 Labor and Civil Security Tax Provisions 1,507 1,451 2.02.04.01.01 Tax Provisions 1,263 1,263 2.02.04.01.02 Social Security and Labor Provisions 41 41 2.02.04.01.04 Civil Provisions 203 147 2.02.04.02 Other Provisions 2,983 5,174 2.02.04.02.04 Regulatory Provisions 2,983 5,174 2.03 Shareholders’ Equity 1,926,266 1,800,856 2.03.01 Share capital 1,340,000 1,340,000 2.03.02 Capital reserves 316 316 2.03.02.06 Advance for Future Capital Increase 316 316 2.03.04 Profit reserve 1,309,052 1,302,766 2.03.04.01 Legal reserve 156,195 156,195 2.03.04.05 Profit retention 1,152,857 1,146,571 2.03.05 Accumulated Profit / Loss 119,406 0 2.03.06 Equity Assessment Adjustments -842,508 -842,226

Page 5: Contents€¦ · Statement of Income 14 . Statement of Comprehensive Income 16 . Cash Flow Statement 17 . Statement of Changes in Equity . DMPL - January 1, 2019 to June 30, 2019

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PAGE: 4 of 83

Individual Financial Statements / Statement of

Income (R$ thousands) Code of the Description Current Quarter Accumulated in the

Current Equal Quarter of Accumulated in the Fiscal

Year Code of Account

April 1, 2019 to June 30, 2019 Fiscal Year Previous Fiscal Year Previous

January 1, 2019 to June 30, 2019

April 1, 2018 to June 30, 2018

January 1, 2018 to June 30, 2018

3.04 Operating Expenses/Income 46,262 118,651 68,899 139,543

3.04.02 General and Administrative Expenses -7,384 -13,467 -8,288 -13,775

3.04.04 Other Operating Revenues 1,642 1,149 0 0

3.04.05 Other operating expenses 0 0 -562 -1,055

3.04.06 Equity Income 52,004 130,969 77,749 154,373

3.05 Operating Results 46,262 118,651 68,899 139,543

3.06 Financial Income (Loss) 192 473 318 668

3.06.01 Financial Revenues 214 511 333 697

3.06.02 Financial Expenses -22 -38 -15 -29

3.07 Earnings before Tax 46,454 119,124 69,217 140,211

3.09 Net Income from Continuing Operations 46,454 119,124 69,217 140,211

3.11 Net Income (loss) for the period 46,454 119,124 69,217 140,211

3.99 Earnings per Share (BRL/Share)

3.99.01 Basic Earnings per Share

3.99.01.01 Common Shares 1.13650 2.91430 1.69330 3.43020

3.99.01.02 Preferred Shares 1.25010 3.20570 1.86270 3.77320

3.99.02 Diluted Earnings per Share

3.99.02.01 Common Shares 1.13650 2.91430 1.69330 3.43020 3.99.02.02 Preferred Shares 1.25010 3.20570 1.86270 3.77320

Page 6: Contents€¦ · Statement of Income 14 . Statement of Comprehensive Income 16 . Cash Flow Statement 17 . Statement of Changes in Equity . DMPL - January 1, 2019 to June 30, 2019

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PAGE: 5 of 83

Individual Financial Statements / Comprehensive Income Statement

(Reais Thousand) Code of the Account

Account Description Current Quarter April 1, 2019 to June 30, 2019

Accumulated in the Current

Period January 1, 2019 to June 30, 2019

Equal Quarter of the Previous Period

April 1, 2018 to June 30, 2018

Accumulated in the Fiscal Year

Previous January 1, 2018 to June 30, 2018

4.01 Net Income of the Period 46,454 119,124 69,217 140,211

4.03 Comprehensive Income for the Period 46,454 119,124 69,217 140,211

Page 7: Contents€¦ · Statement of Income 14 . Statement of Comprehensive Income 16 . Cash Flow Statement 17 . Statement of Changes in Equity . DMPL - January 1, 2019 to June 30, 2019

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Individual Financial Statements / Statement of Cash Flow - Indirect

Method (R$ thousands)

PAGE: 6 of 83

Code of the Code of Account

Description Accumulated in the Current

Fiscal Year

Accumulated in the Fiscal Year

Previous

January 1, 2019 to June 30, 2019

January 1, 2018 to June 30, 2018

6.01 Net Cash from Operating Activities -16,682 -14,182 6.01.01 Cash from Operations -12,997 -13,062 6.01.01.01 Net Income before Income Tax and Social Contribution 119,124 140,211 6.01.01.02 Depreciation and Amortization 1,002 987 6.01.01.03 Equity Income -130,969 -154,373 6.01.01.04 Interest and Monetary Variation -19 43 6.01.01.07 Incorporation (Reversal) of Provision for Contingent

Liabilities -2,135 70

6.01.02 Changes in Assets and Liabilities -3,685 -1,120 6.01.02.01 Taxes to be Recovered -107 0 6.01.02.02 Other Active Accounts 174 -26 6.01.02.03 Judicial Deposits -3,071 -653 6.01.02.04 Suppliers -652 -8 6.01.02.05 Social Security and Labor Duties 22 -410 6.01.02.06 Taxes to be collected 9 13 6.01.02.07 Other Accounts - Liabilities -60 89 6.01.02.08 Taxes to be Recovered 0 -125 6.02 Net cash from Investing Activities 32,748 13,824 6.02.04 Dividends Received 32,748 13,824 6.03 Financing Activities Net Cash -16,945 -7,740 6.03.02 Dividends Paid -16,945 -7,654 6.03.03 Related parties 0 -86 6.05 Increase (Decrease) in Cash and Cash Equivalents -879 -8,098 6.05.01 Initial Cash and Equivalent Balance 16,763 25,048 6.05.02 Final Cash and Equivalent Balance 15,884 16,950

Page 8: Contents€¦ · Statement of Income 14 . Statement of Comprehensive Income 16 . Cash Flow Statement 17 . Statement of Changes in Equity . DMPL - January 1, 2019 to June 30, 2019

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PAGE: 7 of 83

Individual Financial Statements / Statement of Changes in Shareholders’ Equity / SCE - January 1,

2019 to June 30, 2019 (R$ thousands) Code of the Account

Description Paid-up Share Capital

Capital Reserves, Granted Options and Treasury Shares

Profit Reserve Profit or Loss Accumulated

Other Incomes Comprehensive

Shareholders’ Equity

5.01 Opening Balances 1,340,000 316 1,302,766 0 -842,226 1,800,856

5.03 Adjusted Opening Balances 1,340,000 316 1,302,766 0 -842,226 1,800,856

5.04 Capital Transactions with Shareholders 0 0 27 0 0 27

5.04.05 Treasury Shares Sold 0 0 27 0 0 27

5.05 Total Comprehensive Income 0 0 6,259 119,406 -282 125,383

5.05.01 Net income for the period 0 0 0 119,124 0 119,124

5.05.03 Reclassifications to the Result 0 0 6,259 282 -282 6,259

5.05.03.02 Achieving Assigned Cost 0 0 0 282 -282 0

5.05.03.03 Adjustment of Equity Valuation in Subsidiary 0 0 6,259 0 0 6,259

5.07 Closing Balances 1,340,000 316 1,309,052 119,406 -842,508 1,926,266

Page 9: Contents€¦ · Statement of Income 14 . Statement of Comprehensive Income 16 . Cash Flow Statement 17 . Statement of Changes in Equity . DMPL - January 1, 2019 to June 30, 2019

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Individual Financial Statements / Statement of Changes in Shareholders’ Equity / SCE - January 1,

2018 to June 30, 2018 (R$ thousands) Code of the Account

Description Paid-up Share Capital

Capital Reserves, Granted Options and Treasury Shares

Profit Reserve Profit or Loss Accumulated

Other Incomes Comprehensive

Shareholders’ Equity

5.01 Opening Balances 1,340,000 316 1,189,031 0 -687,109 1,842,238

5.02 Previous Year Adjustments 0 0 0 -11,077 0 -11,077

5.02.01 Initial Adoption CPC 48 0 0 0 -11,077 0 -11,077

5.03 Adjusted Opening Balances 1,340,000 316 1,189,031 -11,077 -687,109 1,831,161

5.04 Capital Transactions with Shareholders 0 0 -3,053 0 0 -3,053

5.04.06 Dividends 0 0 -3,158 0 0 -3,158

5.04.08 Reversal of Prescribed Dividends 0 0 105 0 0 105

5.05 Total Comprehensive Income 0 0 0 141,852 -1,641 140,211

5.05.01 Net income for the period 0 0 0 140,211 0 140,211

5.05.03 Reclassifications to the Result 0 0 0 1,641 -1,641 0

5.05.03.02 Achieving Assigned Cost 0 0 0 1,641 -1,641 0

5.07 Closing Balances 1,340,000 316 1,185,978 130,775 -688,750 1,968,319

Page 10: Contents€¦ · Statement of Income 14 . Statement of Comprehensive Income 16 . Cash Flow Statement 17 . Statement of Changes in Equity . DMPL - January 1, 2019 to June 30, 2019

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PAGE: 9 of 83

Individual Financial Statements / Statement of Value

Added (R$ thousands) Code of the Code of Account

Description Accumulated in the Current Fiscal Year

Accumulated in the Fiscal Year

Previous January 1, 2019 to June 30,

2019 January 1, 2018 to June

30, 2018 7.02 Inputs Acquired from Third Parties -75 -2,194 7.02.02 Materials, Electricity, Outsourced Services and Others -75 -2,194 7.03 Gross Added Value -75 -2,194 7.04 Retentions -1,002 -987 7.04.01 Depreciation, Amortization and Exhaustion -1,002 -987 7.05 Net Added Value Produced -1,077 -3,181 7.06 Added Value Received in Transfer 131,480 155,070 7.06.01 Equity Income 130,969 154,373 7.06.02 Financial Revenues 511 697 7.07 Added Value to be Allocated 130,403 151,889 7.08 Value Added Distribution 130,403 151,889 7.08.01 Personnel 10,678 11,242 7.08.01.01 Direct Compensation 10,297 11,056 7.08.01.02 Benefits 133 41 7.08.01.03 F.G.T.S. 248 145 7.08.02 Taxes, fees and contributions 402 385 7.08.02.01 Federal 257 258 7.08.02.02 State 5 7 7.08.02.03 Municipal 140 120 7.08.03 Compensation of Third-Party Capital 199 51 7.08.03.02 Rents 161 22 7.08.03.03 Others 38 29 7.08.04 Compensation of Own Capital 119,124 140,211 7.08.04.02 Dividends 0 3,158 7.08.04.03 Retained Earnings/Accumulated Losses for the Period 119,124 137,053

Page 11: Contents€¦ · Statement of Income 14 . Statement of Comprehensive Income 16 . Cash Flow Statement 17 . Statement of Changes in Equity . DMPL - January 1, 2019 to June 30, 2019

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PAGE: 10 of 83

Consolidated Financial Statements /

Statement of Financial Position - Assets (R$

thousands) Code of the Code of Account

Description Current Quarter June 30, 2019

Previous Fiscal Year

December 31, 2018

1 Total Assets 10,922,267 9,854,745 1.01 Current Assets 4,218,081 4,353,420 1.01.01 Cash and Cash Equivalents 756,409 698,060 1.01.03 Accounts Receivable 1,510,628 1,592,693 1.01.03.01 Clients 1,339,769 1,431,571 1.01.03.01.01 Accounts Receivable from Customers 1,890,624 1,962,129 1.01.03.01.02 Allowance for doubtful accounts -550,855 -530,558 1.01.03.02 Other receivables 170,859 161,122 1.01.04 Inventories 12,906 8,636 1.01.06 Taxes to be Recovered 112,489 63,264 1.01.06.01 Current Taxes to Recover 112,489 63,264 1.01.08 Other Current Assets 1,825,649 1,990,767 1.01.08.03 Others 1,825,649 1,990,767 1.01.08.03.03 Dividends receivable 3,669 89 1.01.08.03.04 Other Credits 278,620 221,505 1.01.08.03.05 Financial Assets - CVA 0 226,737 1.01.08.03.06 Financial Assets - Concession Bonus 32,357 31,433 1.01.08.03.07 CDE Resources for CVA Coverage 1,511,003 1,511,003 1.02 Non-Current Assets 6,704,186 5,501,325 1.02.01 Long-term receivables 2,923,323 1,816,040 1.02.01.02 Financial Investments Measured at Fair Value through

Other Comprehensive Income 137,478 137,478

1.02.01.02.01 Trading Securities 137,261 137,261 1.02.01.02.02 Available-for-Sale Securities 217 217 1.02.01.04 Accounts Receivable 48,456 54,359 1.02.01.04.01 Clients 159,508 166,248 1.02.01.04.02 Provision for Doubtful Accounts (PCLD) -114,614 -114,614 1.02.01.04.03 Other receivables 3,562 2,725 1.02.01.07 Deferred Taxes 715,182 712,532 1.02.01.07.01 Deferred Income Tax and Social Contribution 715,182 712,532 1.02.01.09 Credits with Related Party 488 3,092 1.02.01.09.03 Credits with Controlling Shareholders 0 2,604 1.02.01.09.04 Credits with Other Related Parties 488 488 1.02.01.10 Other Non-Current Assets 2,021,719 908,579 1.02.01.10.03 Taxes to be Recovered 1,111,010 21,092 1.02.01.10.04 Judicial Deposits 206,163 170,350 1.02.01.10.05 Financial Assets Indemnification - Concession 450,159 441,030 1.02.01.10.06 Financial Assets - CVA 0 26,522 1.02.01.10.07 Financial Assets Concession Bonus 254,387 249,585 1.02.02 Investments 251,502 228,663 1.02.02.01 Corporate Share 251,502 228,663 1.02.02.01.01 Holdings in Associates 161,317 145,917 1.02.02.01.04 Holdings in Jointly Controlled Companies 90,185 82,746 1.02.03 Property, Plant and Equipment 158,291 160,066 1.02.04 Intangible assets 3,371,070 3,296,556 1.02.04.01 Intangible Assets 3,371,070 3,296,556

Page 12: Contents€¦ · Statement of Income 14 . Statement of Comprehensive Income 16 . Cash Flow Statement 17 . Statement of Changes in Equity . DMPL - January 1, 2019 to June 30, 2019

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Consolidated Financial Statements /

Statement of Financial Position - Assets (R$

thousands)

Code of Account Description Current Quarter Previous Fiscal Year Code of Account June 30, 2019 December 31, 2018 1.02.04.01.01 Concession Agreement 3,362,674 3,287,592 1.02.04.01.02 Other Intangible Assets 8,396 8,964

Page 13: Contents€¦ · Statement of Income 14 . Statement of Comprehensive Income 16 . Cash Flow Statement 17 . Statement of Changes in Equity . DMPL - January 1, 2019 to June 30, 2019

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Consolidated Financial Statements / Statement

of Financial Position - Liabilities (R$ thousands) Code of the Description Current Quarter Previous Fiscal Year Code of Account

June 30, 2019 December 31, 2018

2 Total liabilities and stockholders' equity 10,922,267 9,854,745 2.01 Current liabilities 3,968,534 4,438,978 2.01.01 Social and Labor Obligations 188,813 208,503 2.01.01.01 Social Obligations 188,813 208,503 2.01.02 Suppliers 872,884 1,006,854 2.01.02.01 National Suppliers 872,884 1,006,854 2.01.03 Tax compliance 257,399 223,897 2.01.03.01 Federal Tax Obligations 118,373 65,373 2.01.03.01.01 Other taxes 72,474 17,300 2.01.03.01.02 PIS/COFINS 42,398 44,238 2.01.03.01.03 Others 3,501 3,835 2.01.03.02 State Tax Obligations 137,817 156,601 2.01.03.03 Municipal Tax Obligations 1,209 1,923 2.01.04 Loans and Financing 303,999 452,478 2.01.04.01 Loans and Financing 231,392 321,089 2.01.04.01.01 In National Currency 226,398 320,322 2.01.04.01.02 In Foreign Currency 4,994 767 2.01.04.02 Debentures 72,607 131,389 2.01.05 Other liabilities 2,186,148 2,384,470 2.01.05.01 Related Party Liabilities 9,645 15,763 2.01.05.01.04 Debts with Other Related Parties 9,645 15,763 2.01.05.02 Others 2,176,503 2,368,707 2.01.05.02.01 Dividends and Interest on Equity Payable 19,929 39,524 2.01.05.02.04 Regulatory Fees 1,995,825 2,269,327 2.01.05.02.07 Financial Liability - CVA 101,564 0 2.01.05.02.20 Other Current Liabilities 59,185 59,856 2.01.06 Provisions 159,291 162,776 2.01.06.01 Labor and Civil Security Tax Provisions 159,291 162,776 2.01.06.01.03 Provisions for Employee Benefits 159,291 162,776 2.02 Non-current liabilities 5,027,467 3,614,911 2.02.01 Loans and Financing 1,230,932 967,585 2.02.01.01 Loans and Financing 911,699 597,712 2.02.01.01.01 In National Currency 593,787 325,026 2.02.01.01.02 In Foreign Currency 317,912 272,686 2.02.01.02 Debentures 319,233 369,873 2.02.02 Other liabilities 1,312,671 155,412 2.02.02.02 Others 1,312,671 155,412 2.02.02.02.03 Social and Labor Obligations 50,412 46,988 2.02.02.02.04 Regulatory Fees 120,456 105,948 2.02.02.02.05 Other Non-Current Liabilities 2,476 2,476 2.02.02.02.06 Financial Liability - CVA 63,700 0 2.02.02.02.09 PIS/COFINS to be Returned to Consumers 1,075,627 0 2.02.03 Deferred Taxes 14,737 10,144 2.02.03.01 Deferred Income Tax and Social Contribution 14,737 10,144 2.02.04 Provisions 2,469,127 2,481,770 2.02.04.01 Labor and Civil Security Tax Provisions 2,031,537 2,054,032

Page 14: Contents€¦ · Statement of Income 14 . Statement of Comprehensive Income 16 . Cash Flow Statement 17 . Statement of Changes in Equity . DMPL - January 1, 2019 to June 30, 2019

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Consolidated Financial Statements / Statement

of Financial Position - Liabilities (R$ thousands) Code of the Description Current Quarter Previous Fiscal Year Code of Account

June 30, 2019 December 31, 2018

2.02.04.01.01 Tax Provisions 9,657 9,626 2.02.04.01.02 Social Security and Labor Provisions 68,013 65,850 2.02.04.01.03 Provisions for Employee Benefits 1,800,932 1,842,197 2.02.04.01.04 Civil Provisions 152,935 136,359 2.02.04.02 Other Provisions 437,590 427,738 2.02.04.02.04 Regulatory Provisions 435,536 425,687 2.02.04.02.05 Environmental Provisions 2,054 2,051 2.03 Consolidated Equity 1,926,266 1,800,856 2.03.01 Share capital 1,340,000 1,340,000 2.03.02 Capital reserves 316 316 2.03.02.06 Advance for Future Capital Increase 316 316 2.03.04 Profit reserve 1,309,052 1,302,766 2.03.04.01 Legal reserve 156,195 156,195 2.03.04.05 Profit retention 1,152,857 1,146,571 2.03.05 Accumulated Profit / Loss 119,406 0 2.03.06 Equity Assessment Adjustments -842,508 -842,226

Page 15: Contents€¦ · Statement of Income 14 . Statement of Comprehensive Income 16 . Cash Flow Statement 17 . Statement of Changes in Equity . DMPL - January 1, 2019 to June 30, 2019

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Consolidated Financial Statements / Statement

of Income (R$ thousands) Code of the Description Current Quarter Accumulated in the

Current Equal Quarter of Accumulated in the Fiscal

Year Code of Account

April 1, 2019 to June 30, 2019 Fiscal Year Previous Fiscal Year Previous

January 1, 2019 to June 30, 2019

April 1, 2018 to June 30, 2018

January 1, 2018 to June 30, 2018

3.01 Net Revenues 1,782,205 3,914,342 1,981,099 3,751,956

3.01.01 Sales Revenue and Services 1,811,936 4,080,387 1,590,234 3,270,480

3.01.02 Construction Revenue - CPC 17 132,515 248,025 102,251 196,689

3.01.03 Revenue Installment A - CVA -163,540 -416,673 286,882 282,459

3.01.04 Financial Asset Update VNR 1,294 2,603 1,732 2,328

3.02 Cost of Services from Sale of Goods and/or Services -1,565,529 -3,427,706 -1,737,691 -3,271,793

3.02.01 Costs of Sale and Services -1,247,081 -2,827,466 -1,481,523 -2,763,952

3.02.02 Cost of Products Sold -2,415 -5,331 -3,689 -6,904

3.02.03 Cost of Services -183,518 -346,884 -150,228 -304,248

3.02.04 Construction Cost - CPC 17 -132,515 -248,025 -102,251 -196,689

3.03 Gross Profit 216,676 486,636 243,408 480,163

3.04 Operating Expenses/Income -121,762 -239,233 -111,705 -210,233

3.04.01 Expenses with Sales -65,812 -118,264 -55,267 -106,412

3.04.02 General and Administrative Expenses -94,377 -182,204 -73,938 -149,180

3.04.04 Other Operating Revenues 19,777 36,391 15,002 0

3.04.05 Other operating expenses 0 0 0 38,311

3.04.06 Equity Income 18,650 24,844 2,498 7,048

3.05 Operating Results 94,914 247,403 131,703 269,930

3.06 Financial Income (Loss) -29,920 -56,110 -16,515 -35,851

3.06.01 Financial Revenues 55,183 130,051 41,596 80,598

3.06.02 Financial Expenses -85,103 -186,161 -58,111 -116,449

3.07 Earnings before Tax 64,994 191,293 115,188 234,079

3.08 Provision for Income Tax and Social Contribution -18,540 -72,169 -45,971 -93,868

3.08.01 Current -20,942 -70,226 -34,940 -80,694

3.08.02 Deferred 2,402 -1,943 -11,031 -13,174

3.09 Net Income from Continuing Operations 46,454 119,124 69,217 140,211

3.11 Consolidated Income/Loss for the Period 46,454 119,124 69,217 140,211 3.11.01 Assigned to the Shareholders of the Parent Company 46,454 119,124 69,217 140,211

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Consolidated Financial Statements / Statement

of Income (R$ thousands) Code of the Description Current Quarter Accumulated in the

Current Equal Quarter of Accumulated in the Fiscal

Year Code of Account

April 1, 2019 to June 30, 2019 Fiscal Year Previous Fiscal Year Previous

January 1, 2019 to June 30, 2019

April 1, 2018 to June 30, 2018

January 1, 2018 to June 30, 2018

3.99 Earnings per Share (BRL/Share)

3.99.01 Basic Earnings per Share

3.99.01.01 Common Shares 1.12310 2.91430 1.92470 3.43020

3.99.01.02 Preferred Shares 1.23540 3.20570 2.11710 3.77320

3.99.02 Diluted Earnings per Share

3.99.02.01 Common Shares 1.12310 2.91430 1.92470 3.43020 3.99.02.02 Preferred Shares 1.23540 3.20570 2.11710 3.77320

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Consolidated Financial Statements / Statement of Comprehensive Income

(Reais Thousand) Code of the Account

Account Description Current Quarter April 1, 2019 to June 30, 2019

Accumulated in the Current

Period January 1, 2019 to June 30, 2019

Equal Quarter of the Previous Period

April 1, 2018 to June 30, 2018

Accumulated in the Fiscal Year

Previous January 1, 2018 to June 30, 2018

4.01 Consolidated Net Income of the Period 46,454 119,124 69,217 140,211

4.03 Consolidated Comprehensive Income for the Period 46,454 119,124 69,217 140,211

4.03.01 Assigned to the Shareholders of the Parent Company 46,454 119,124 69,217 140,211

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Consolidated Financial Statements / Statement of Cash Flows – Indirect

Method (R$ thousands)

PAGE: 17 of 83

Code of the Code of Account

Description Accumulated in the Current

Fiscal Year

Accumulated in the Fiscal Year

Previous

January 1, 2019 to June 30, 2019

January 1, 2018 to June 30, 2018

6.01 Net Cash from Operating Activities 193,149 -155,203 6.01.01 Cash from Operations 323,840 347,619 6.01.01.01 Income before income tax and social contribution 191,293 234,079 6.01.01.02 Depreciation and Amortization 111,859 106,838 6.01.01.04 Equity Income -24,844 -7,048 6.01.01.05 Update/Return Interest/Concession Bonus -22,331 -22,574 6.01.01.06 Interest and Monetary Variation 100,623 44,061 6.01.01.08 Income Tax and Social Contribution Paid -69,545 -74,364 6.01.01.09 Interest paid -57,711 -22,543 6.01.01.11 Provision for Actuarial Liabilities 23,881 14,807 6.01.01.12 Incorporation (Reversal) of Provision for Contingent

Liabilities 28,622 32,887

6.01.01.14 Write-off of Property, Plant and Equipment / Intangible Assets

24,250 23,592

6.01.01.15 Financial Asset Update - VNR -2,603 -2,328 6.01.01.17 Estimated Losses in Doubtful Credits 20,297 19,952 6.01.01.18 Write-off of Indemnity Financial Assets - Concession 49 260 6.01.02 Changes in Assets and Liabilities -130,691 -502,822 6.01.02.02 Financial Assets - (CVA, Concession Bonus) 370,559 -206,155 6.01.02.03 Accounts Receivable 68,508 -7,234 6.01.02.04 Subsidy Decree Nr. 7.891/2013 0 15,285 6.01.02.05 Taxes to be Recovered -1,139,143 -56,946 6.01.02.06 Judicial Deposits -35,813 -24,165 6.01.02.07 Inventories -4,270 -1,578 6.01.02.10 Other Accounts - Assets -49,101 53,862 6.01.02.11 Suppliers -133,970 55,555 6.01.02.12 Taxes to be collected 32,821 41,680 6.01.02.13 Social Security and Labor Duties -16,266 -38,142 6.01.02.14 Regulatory Fees -279,021 -201,698 6.01.02.15 Financial Liability - CVA 64,569 -42,619 6.01.02.16 PIS/COFINS to be Returned to Consumers 1,075,627 0 6.01.02.19 Actuarial Liabilities -78,402 -86,520 6.01.02.20 Other Accounts - Liabilities -6,789 -4,147 6.02 Net cash from Investing Activities -219,590 -223,358 6.02.01 Additions of Property, Plant and Equipment / Intangible

Assets -223,540 -225,664

6.02.03 Capital Increase (Reduction) Investees -220 -7,558 6.02.05 Dividends Received 4,170 9,864 6.03 Financing Activities Net Cash 84,790 114,199 6.03.03 Amortization of Loans and Financings -160,984 -75,665 6.03.04 Additions of Loans and Financing 371,562 300,000 6.03.05 Payment of Dividends -16,945 -7,654 6.03.06 Admission of Debentures 0 147,509 6.03.07 Payment of Debentures -108,843 -249,991 6.05 Increase (Decrease) in Cash and Cash Equivalents 58,349 -264,362 6.05.01 Initial Cash and Equivalent Balance 698,060 564,594 6.05.02 Final Cash and Equivalent Balance 756,409 300,232

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Consolidated Financial Statements / Statement of Changes in Equity / SCE - January 1, 2019 to June 30,

2019 (R$ thousands) Code of the Account

Description Paid-up Share Capital

Capital Reserves, Granted Options and Treasury Shares

Profit Reserve Profit or Loss Accumulated

Other Incomes Comprehensive

Shareholders’ Equity Participation of Non- Interest

Shareholders’ Equity

Consolidated

5.01 Opening Balances 1,340,000 316 1,302,766 0 -842,226 1,800,856 0 1,800,856

5.03 Adjusted Opening Balances 1,340,000 316 1,302,766 0 -842,226 1,800,856 0 1,800,856

5.04 Capital Transactions with Shareholders 0 0 27 0 0 27 0 27

5.04.08 Reversal of Prescribed Dividends 0 0 27 0 0 27 0 27

5.05 Total Comprehensive Income 0 0 6,259 119,406 -282 125,383 0 125,383

5.05.01 Net income for the period 0 0 0 119,124 0 119,124 0 119,124

5.05.03 Reclassifications to the Result 0 0 6,259 282 -282 6,259 0 6,259

5.05.03.02 Achieving Assigned Cost 0 0 0 282 -282 0 0 0

5.05.03.03 Adjustment of Equity Valuation in Subsidiary

0 0 6,259 0 0 6,259 0 6,259

5.07 Closing Balances 1,340,000 316 1,309,052 119,406 -842,508 1,926,266 0 1,926,266

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Consolidated Financial Statements / Statement of Changes in Equity / SCE - January 1, 2018 to June 30,

2018 (R$ thousands) Code of the Account

Description Paid-up Share Capital

Capital Reserves, Granted Options and Treasury Shares

Profit Reserve Profit or Loss Accumulated

Other Incomes Comprehensive

Shareholders’ Equity Participation of Non- Interest

Shareholders’ Equity

Consolidated

5.01 Opening Balances 1,340,000 316 1,189,031 0 -687,109 1,842,238 0 1,842,238

5.02 Previous Year Adjustments 0 0 0 -11,077 0 -11,077 0 -11,077

5.02.01 Initial Adoption CPC 48 0 0 0 -11,077 0 -11,077 0 -11,077

5.03 Adjusted Opening Balances 1,340,000 316 1,189,031 -11,077 -687,109 1,831,161 0 1,831,161

5.04 Capital Transactions with Shareholders 0 0 -3,053 0 0 -3,053 0 -3,053

5.04.06 Dividends 0 0 -3,158 0 0 -3,158 0 -3,158

5.04.08 Reversal of Prescribed Dividends 0 0 105 0 0 105 0 105

5.05 Total Comprehensive Income 0 0 0 141,852 -1,641 140,211 0 140,211

5.05.01 Net income for the period 0 0 0 140,211 0 140,211 0 140,211

5.05.03 Reclassifications to the Result 0 0 0 1,641 -1,641 0 0 0

5.05.03.02 Achieving Assigned Cost 0 0 0 1,641 -1,641 0 0 0

5.07 Closing Balances 1,340,000 316 1,185,978 130,775 -688,750 1,968,319 0 1,968,319

Page 21: Contents€¦ · Statement of Income 14 . Statement of Comprehensive Income 16 . Cash Flow Statement 17 . Statement of Changes in Equity . DMPL - January 1, 2019 to June 30, 2019

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Consolidated Financial Statements / Value Added

Statement (R$ thousands)

PAGE: 20 of 83

Code of the Code of Account

Description Accumulated in the Current

Fiscal Year

Accumulated in the Fiscal Year

Previous

January 1, 2019 to June 30, 2019

January 1, 2018 to June 30, 2018

7.01 Revenues 6,492,436 6,142,226 7.01.01 Sales of Goods, Products and Services Other 6,200,711 5,906,832 7.01.02 Other Revenues 63,997 58,657 7.01.03 Revenues refs. to the Construction of Own Assets 248,025 196,689 7.01.04 Provision/Reversion of Credits Bad Debts -20,297 -19,952 7.02 Inputs Acquired from Third Parties -3,253,636 -3,108,149 7.02.01 Costs Prods., Mercs. and Servs. Sold -2,888,847 -2,808,709 7.02.02 Materials, Electricity, Outsourced Services and Others -116,764 -102,751 7.02.04 Others -248,025 -196,689 7.02.04.01 Costs related to Construction of Own Assets -248,025 -196,689 7.03 Gross Added Value 3,238,800 3,034,077 7.04 Retentions -111,859 -106,838 7.04.01 Depreciation, Amortization and Exhaustion -111,859 -106,838 7.05 Net Added Value Produced 3,126,941 2,927,239 7.06 Added Value Received in Transfer 154,895 87,646 7.06.01 Equity Income 24,844 7,048 7.06.02 Financial Revenues 130,051 80,598 7.07 Added Value to be Allocated 3,281,836 3,014,885 7.08 Value Added Distribution 3,281,836 3,014,885 7.08.01 Personnel 351,423 296,753 7.08.01.01 Direct Compensation 295,333 273,848 7.08.01.02 Benefits 42,839 16,523 7.08.01.03 F.G.T.S. 13,251 6,382 7.08.02 Taxes, fees and contributions 2,613,604 2,451,719 7.08.02.01 Federal 1,397,761 1,406,620 7.08.02.02 State 1,211,628 1,041,392 7.08.02.03 Municipal 4,215 3,707 7.08.03 Compensation of Third-Party Capital 197,685 126,202 7.08.03.01 Interest 20,189 13,677 7.08.03.02 Rents 11,524 9,753 7.08.03.03 Others 165,972 102,772 7.08.03.03.01 Monetary and Exchange Rate Variations 28,222 16,993 7.08.03.03.03 Other Financing Expenses 137,750 85,779 7.08.04 Compensation of Own Capital 119,124 140,211 7.08.04.02 Dividends 0 3,158 7.08.04.03 Retained Earnings/Accumulated Losses for the Period 119,124 137,053

Page 22: Contents€¦ · Statement of Income 14 . Statement of Comprehensive Income 16 . Cash Flow Statement 17 . Statement of Changes in Equity . DMPL - January 1, 2019 to June 30, 2019

1. INVESTMENTS The funds invested in fixed assets, intangible assets and shares in SHPs by the Company in the second quarter of 2019 reached R$258,978, compared to R$223,154 in 2018, 16.05% higher than the same period of the previous year, as shown in the table below:

Consolidated

Investment

30 June 2019

30 June 2018 Analysis

Horizontal R$ thousand % R$ thousand %

Electricity Distribution 258,090 99.66% 212,183 95.08% 21.64% Own Resources 214,021 - 177,476 - - Consumer’s Financial Share 44,069 - 34,707 - - Electricity Generation 888 0.34% 10,971 4.92% -91.91% Corporate Share 220 - 7,558 - - Own Generating Site 668 - 3,413 - - Total 258,978 100% 223,154 100% 16.05%

Of the total invested, the largest volume of R$258,090 was allocated to the expansion and improvement of the system, operational efficiency and modernization of the management of Celesc D. Of this amount, R$214,021 was related to its own resource, with R$181,835 in materials and services, R$32,186 in own resources and R$44,069 were related to funds from third parties, derived from Consumer Financial Share in works of Celesc D. The rules of Consumer Financial Participation are established in ANEEL Normative Resolution 414 from September 9, 2010. Of the main investments made in the own generating plant, R$207 refers to the replacement of an adductor conduit, containment pallet, batteries and pressure probe of Cedros Plant; R$240 refers to mechanical services at the Salto Weissbach Plant; R$14 was spent renovating the chimney and containment pallet of Caveiras HGP; R$9 was used to purchase air conditioning and containment pallet for the Garcia Plant; R$6 refers to the acquisition of battery bank for Rio do Peixe SHP; R$84 was spent on the executive project and assembly of the Rotor UG2 of CGH São Lorenço; and R$11 was spent on the Pery Plant’s protection, measurement and automation system and pressure sensor. 2. STOCK MARKET The BOVESPA Index closed the second quarter of 2019 with a 5.82% appreciation. The Energy Sector Index (IEE) increased by 11.11% in the same period. During this same period, the Common Shares (ON) of the Company appreciated 5.26%, while the Preferred Shares (PN) devalued by 5.23%. The table below presents the final prices as of June 30, 2019 and the respective percentage changes in the Company's shares and the main market indicators:

End Variation %

Description 30

June 2019

2Q 2019

In 12 months

Celesc PN R$49.50 -5.23% 77.67% Celesc Common Shares R$59.03 5.26% 66.65% IBOVESPA 100,967 5.82% 38.76% IEE 63,831 11.11% 65.53%

*Percentage changes with adjustment to earnings 3. SHARE MARKET VALUE The Company's share market value as of June 30, 2019, as shown in the table above, are: R$59.03 (fifty-nine reais and three cents) for each Common Share - ON (CLSC3) and R$49.50 (forty-nine reais and fifty cents) for each Preferred Share - PN (CLSC4). Its majority shareholder is the State of Santa Catarina, which owns 50.2% of the Company's Ordinary Shares, corresponding to 20.2% of the Total Capital. The shareholding and corporate structure, as of June 30, 2019, is presented in the following chart:

Page 23: Contents€¦ · Statement of Income 14 . Statement of Comprehensive Income 16 . Cash Flow Statement 17 . Statement of Changes in Equity . DMPL - January 1, 2019 to June 30, 2019

4. HUMAN RESOURCES Celesc ended the second quarter of 2019 with a staff of 3,322 employees. The total number of employees represents an increase of 7.93% in relation to the same period of the previous year (3,078 employees). 5. FINANCIAL ECONOMIC PERFORMANCE The Net profit accumulated in the quarter ended on June 30, 2019 presented by the Company was R$119,124, which represents a decrease of 15.04% when compared to the same period of 2018 (Net Profit of R$140,211). The reduction is mainly due to the increase in personnel expenses related to PDVI, while in the first half of 2018 there was a reversal of R$3.2 million. In the same period of 2019, expenses totaled R$22.8 million, in addition to increase in actuarial expenses, from R$14.8 million in the first half of 2018 to R$23.9 million in the first half of 2019. Through the main economic indicators, based on the consolidated information on the Company as of June 30, 2019 in relation to the same period of the previous year, are as follows:

Economic and Financial Data (Amount in Reais Thousand)

30 30 June June AH 2019 2018

(Re-submitted)

Gross Operating Revenue - ROB or GOR 6,451,339 6,105,849 5.66% Net Operating Revenue – ROL or NOR 3,914,342 3,751,956 4.33% Operational Income 247,403 269,930 -8.35% EBITDA 359,262 376,768 -4.65% EBITDA Margin (EBITDA/ROL) 9.18% 10.04% -0.86 p.p. Net Margin (LL/ROL) 3.04% 3.74% -0.69 p.p. Financial Income (Loss) (56,110) (35,851) 56.51% Total Assets 10,922,267 9,145,391 19.43% Property, Plant and Equipment 158,291 152,621 3.72% Shareholders’ Equity 1,926,266 1,968,319 -2.14% Net Income 119,124 140,211 -15.04%

The Company closed June 30, 2019 with a Gross Operating Revenue - accumulated ROB of R$6,451,339, up 5.7% compared to the second quarter of 2018. The increase was mainly due to the average tariff readjustment of 13.86%, applied in August 2018 to Celesc D’s consumers; increase in the energy consumption in the captive market, of around 6.4%; increase in the Revenue generated by the provision of the electric grid, of around 33.27%. The Net Operating Revenue - ROL closed the second quarter of 2019 at R$3,914,342, representing an increase of 4.33%,

Page 24: Contents€¦ · Statement of Income 14 . Statement of Comprehensive Income 16 . Cash Flow Statement 17 . Statement of Changes in Equity . DMPL - January 1, 2019 to June 30, 2019

compared to the same period of 2018, which was R$3,751,956. Changes in Net Income for the Year before Interest, Taxes, Financial Result and Depreciation/Amortization - EBITDA are detailed below:

EBITDA Conciliation (Amount in Reais Thousand)

30 30 June June 2019 2018

(Re-submitted)

Net profit 119,124 140,211 Current and Deferred IRPJ and CSLL 72,169 93,868 Financial Income (Loss) 56,110 35,851 Depreciation and Amortization 111,859 106,838 EBITDA 359,262 376,768

6. SHAREHOLDING COMPOSITION The shareholding composition, in the number of shares of shareholders with more than 5% of any kind or class, is represented according to the table below:

Shareholding Base on June 30, 2019

Shareholder Common Shares Preferred Shares Total Quantity % Quantity % Quantity %

State of Santa Catarina 7,791,010 50.18 191 0.00 7,791,201 20.20 EDP Energias do Brasil S.A. 5,140,868 33.11 3,945,820 17.12 9,086,688 23.56 Fundação Celesc de Seguridade Social - Celos 1,340,474 8.63 230,800 1.00 1,571,274 4.07 Geração LPar Fundo de Investimento 460,000 2.96 3,400,000 14.75 3,860,000 10.01 Centrais Elétricas Brasileiras - Eletrobras* 4,233 0.03 4,142,774 17.98 4,147,007 10.75 Alaska Poland FIA - 0.00 3,285,600 14.26 3,285,600 8.52 Others 790,552 5.09 8,039,269 34.89 8,829,821 22.89

Total 15,527,137 100.00 23,044,454 100.00 38,571,591 100.00 Grand total 15,527,137 40.26 23,044,454 59.74 38,571.591 100.00

Share Capital: R$1,340,000,000.00 and Authorized Capital: R$1,340,000,000.00 *Publicly held Company 7. FOREIGN CAPITAL SHARE Foreign investors closed the second quarter of 2019, representing 6.31% of the Company's total share capital, with a total of 2,435,359 shares, mostly preferred shares.

Investor Share by Residence Number of Shares % Foreign Investors 2,435,359 6.31% National Investors 36,136,232 93.69%

Total 38,571,591 100.00 8. CONTROLLING PARTY, ADMINISTRATORS AND MEMBERS OF THE FISCAL COUNCIL'S SHARES The Company is bound to arbitration in the Market Arbitration Chamber, according to the arbitration clause contained in its Bylaws.

Shareholder Common Shares Preferred Shares Total Quantity % Quantity % Quantity %

Controller 9,229,660 59.44% 234,305 1.02% 9,463,965 24.54% Board of Directors - - - 0.00% - 0.00% Executive Board - - - 0.00% - 0.00% Fiscal Council - - - 0.00% - 0.00% Other Shareholders 6,297,477 40.56% 22,810,149 98.98% 29,107,626 75.46%

Total 15,527,137 100.00% 23,044,454 100.00% 38,571,591 100.00% Outstanding Shares 6,297,477 40.56% 22,810,149 98.98% 29,107,626 75.46%

9. OUTSTANDING SHARES

Description Common Shares - CLSC3 Preferred Shares - CLSC4 Total Quantity % Quantity % Quantity %

Total Share Capital 15,527,137 100.0 23,044,454 100.0 38,571,591 100.00 Outstanding Shares 6,297,477 40.56% 22,810,149 98.98% 29,107,626 75.46%

10. ENERGY BALANCE

Page 25: Contents€¦ · Statement of Income 14 . Statement of Comprehensive Income 16 . Cash Flow Statement 17 . Statement of Changes in Equity . DMPL - January 1, 2019 to June 30, 2019

Celesc D’s Captive Billed Market posted a decrease of 0.1% in the second quarter of 2019 in relation to the same period of the previous year, reaching 3,961 GWh. Regarding the Total Market, including free consumers, the increase in electricity consumption was 2.6%, reaching 6,315 GWh. The chart below shows the consumption values of each class in the Captive Market, as well as the Total Market:

Other Classes¹ = Public Power + Street Lighting + Public Service. Own consumption not considered.

Page 26: Contents€¦ · Statement of Income 14 . Statement of Comprehensive Income 16 . Cash Flow Statement 17 . Statement of Changes in Equity . DMPL - January 1, 2019 to June 30, 2019

11. ELECTRICITY MARKET

ELECTRICITY CAPTIVE MARKET Net 2019 2018 Vertical Variation Horizontal

2Q Accum. 2Q Accum. 2Q Accum.

Description 2Q Accumulated 2Q Accumulated 2019 2019 2018 2018 19-18 19-18 Sales Revenue by Consumption Class in R$ K Residential 916,211 2,167,344 855,150 1,808,197 39.4% 41.9% 38.0% 39.0% 7.1% 19.9% Industrial 421,632 838,197 463,152 900,924 18.1% 16.2% 20.6% 19.4% -9.0% -7.0% Commercial 574,895 1,278,111 544,608 1,133,318 24.7% 24.7% 24.2% 24.4% 5.6% 12.8% Rural 125,554 289,153 135,239 295,137 5.4% 5.6% 6.0% 6.4% -7.2% -2.0% Public Power 77,357 159,443 72,571 141,129 3.3% 3.1% 3.2% 3.0% 6.6% 13.0% Public Lightening 65,480 131,776 60,639 121,193 2.8% 2.5% 2.7% 2.6% 8.0% 8.7% Public Service 50,628 104,065 46,702 93,662 2.2% 2.0% 2.1% 2.0% 8.4% 11.1% Subtotal 2,231,756 4,968,088 2,178,061 4,493,561 96.0% 96.1% 96.7% 96.8% 2.5% 10.6% Supply 92,965 200,309 73,978 148,793 4.0% 3.9% 3.3% 3.2% 25.7% 34.6% TOTAL 2,324,721 5,168,397 2,252,039 4,642,354 100% 100% 100% 100% 3.2% 11.3% Consumption by Class in MWh Residential 1,396,104 3,233,902 1,406,946 2,994,773 35.2% 37.6% 35.5% 36.4% -0.8% 8.0% Industrial 631,885 1,240,982 643,005 1,258,884 16.0% 14.4% 16.2% 15.3% -1.7% -1.4% Commercial 814,543 1,796,015 816,355 1,718,601 20.6% 20.9% 20.6% 20.9% -0.2% 4.5% Rural 269,000 613,110 337,238 734,395 6.8% 7.1% 8.5% 8.9% -20.2% -16.5% Public Power 115,227 237,592 115,716 229,208 2.9% 2.8% 2.9% 2.8% -0.4% 3.7% Public Lightening 163,396 326,929 161,641 325,839 4.1% 3.8% 4.1% 4.0% 1.1% 0.3% Public Service 90,830 185,002 90,272 182,337 2.3% 2.1% 2.3% 2.2% 0.6% 1.5% Subtotal 3,480,985 7,633,532 3,571,174 7,444,036 87.9% 88.7% 90.1% 90.5% -2.5% 2.5% Supply 480,377 973,144 393,216 778,775 12.1% 11.3% 9.9% 9.5% 22.2% 25.0% TOTAL 3,961,362 8,606,676 3,964,390 8,222,811 100% 100% 100% 100% -0.1% 4.7% Unit Average Price for the MWh in R$ Residential 656.26 670.19 607.81 603.78 111.8% 111.6% 107.0% 106.9% 8.0% 11.0% Industrial 667.26 675.43 720.29 715.65 113.7% 112.5% 126.8% 126.8% -7.4% -5.6% Commercial 705.79 711.64 667.12 659.44 120.3% 118.5% 117.4% 116.8% 5.8% 7.9% Rural 466.74 471.62 401.02 401.88 79.5% 78.5% 70.6% 71.2% 16.4% 17.4% Public Power 671.34 671.08 627.15 615.73 114.4% 111.8% 110.4% 109.1% 7.0% 9.0% Public Lightening 400.74 403.07 375.14 371.94 68.3% 67.1% 66.0% 65.9% 6.8% 8.4% Public Service 557.39 562.51 517.34 513.68 95.0% 93.7% 91.1% 91.0% 7.7% 9.5% Subtotal 641.13 650.82 609.90 603.65 109.2% 108.4% 107.4% 106.9% 5.1% 7.8% Supply 193.53 205.84 188.14 191.06 33.0% 34.3% 33.1% 33.8% 2.9% 7.7% TOTAL 586.85 600.51 568.07 564.57 100% 100% 100% 100% 3.3% 6.4%

12. COMMITMENT CLAUSE The Company informs that it is bound to arbitration in the Market Arbitration Chamber, according to the Arbitration Clause contained in its Bylaws, article 64. "The Company, its shareholders, administrators and members of the Fiscal Council undertake to resolve, through arbitration, before the Market Arbitration Chamber, any dispute or controversy that may arise between them, related to or arising in particular from the application, validity, effectiveness, interpretation, violation and its effects, of the provisions contained in the Law of the Company's Bylaws, the rules issued by the National Monetary Council, the Central Bank of Brazil and the Brazilian Securities and Exchange Commission, as well as other rules applicable to the operation of the capital market in general, in addition to those Regulation of Level 2, the Level 2 Participation Contract, the Sanctions Regulation and the Arb Regulation of the Market Arbitration Chamber." 13. INDEPENDENT AUDITORS Pursuant to CVM Instruction 381, of January 14, 2003, and ratified by Circular Order CVM/SNC/SEP No. 01, dated from February 25, 2005, the Company informs that the Independent Auditor did not provide any type of service other than those strictly related to the external audit activity. Florianópolis, August 14, 2019 The Management

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1. OPERATING CONTEXT Centrais Elétricas de Santa Catarina S.A. – Celesc (“Company” and, together with its subsidiaries, “Group”), is a publicly traded joint stock company, founded on December 9, 1955 by State Decree No. 22, headquartered at Itamarati Avenue, 160, Itacorubi neighborhood, CEP: 88.034-900, Florianópolis/SC, Brazil. It obtained its first stock exchange listing on March 26, 1973, and today its shares are traded on the São Paulo stock exchange in Level 2 of Corporate Governance of B3 S.A. - Brasil, Bolsa, Balcão, in São Paulo. The majority shareholder is the State of Santa Catarina, which holds 50.18% of the Company's ordinary shares, corresponding to 20.20% of the Total Capital. The updated, subscribed and paid-up share capital is R$1,340,000,000.00 represented by 38,571,591 nominative shares, with no par value, of which 40.26% are ordinary voting shares and 59.74% are preferred shares, also nominative, without voting rights. The main activities of the Company and its subsidiaries and affiliates are the generation, transmission and distribution of electricity. In addition, its jointly-owned subsidiary Companhia de Gás de Santa Catarina S.A. - SCGÁS, operates in the piped natural gas distribution segment. 2. BUSINESS PROFILE 2.1. Consolidated Comprehensive Subsidiaries 2.1.1. Celesc Distribution S.A. - Celesc D Celesc D, constituted by public deed on September 29, 2006, as authorized by State Law 13.570 of November 23, 2005, is a publicly-held company. On December 9, 2015, Celesc D, in a lawsuit filed by the Ministry of Mines and Energy - MME, signed the 5th Addendum to the Concession Agreement no. 56/99, thus extending the concession for another 30 years. Celesc D operates wholly or partially in the distribution of electricity to 287 municipalities, in addition to part of the municipality of Rio Negro, in Paraná, totaling the provision of services to a portfolio of around 3.0 million consumer units (not reviewed). 2.1.1.1. Regulatory Environment The Brazilian electricity sector is regulated by the Federal Government, acting through the Ministry of Mines and Energy - MME, which has exclusive authority over the electric sector. The regulatory policy for the sector is defined by the National Electric Energy Agency - ANEEL. a) 2018 Annual Tariff Readjustment ANEEL, through Ratifying Resolution No. 2,436 from August 13, 2018, approved the Annual Tariff Adjustment of Celesc D, applied as of August 22, 2018. Said adjustment resulted in a tariff effect average to be perceived by consumers, around 13.86 %, being 15.05% on average for connected consumers in the High Voltage and 3.15% on average for consumers connected in the Low Voltage. The Sector Charges have a 4.77% share, -1.42% Transmission Costs, 5.08% Energy Expenses, 0.06% Unrecoverable Revenues, 0.37% with Distributor Costs, 7, 48% related to the Financial Components of the current process, and -2.48% related to the withdrawal of the Financial Components of the previous ordinary process. When calculating the adjustment, as established in the concession agreement, ANEEL considers the variation of costs associated with the provision of the service, and takes into account the acquisition and transmission of electricity, as well as the sector charges. In the composition of Net Revenue for the 2018-2019 period, Portion A (non-manageable costs with charges, transmission and energy) participates with 81.4%. Portion B (manageable costs) represents 18.6%, defined in the amount of R$ 1.51 billion. b) Tariff Levels The levels of activation and the additional tariff flags in force for 2019 are: i) Green Level: favorable conditions of energy generation. The tariff will not undergo any additional fees; ii) Yellow Level: R$1.00 per 100Kwh (as of June 2019: R$1.50 per 100Kwh);

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iii) Red Level 1: R$3.00 per 100Kwh (as of June 2019: R$4.00 per 100Kwh); iii) Red Level 2: R$5.00 per 100Kwh (as of June 2019: R$6.00 per 100Kwh); The definition of the levels of activation will be carried out according to the Accumulated Distribution Function (FDA) method, defined in the PRORET Manual on Tariff Regulation Procedures, sub-module 6.8, by the following criteria: i) Green Tariff Level: statistical number of FDA associated with the probability of 75%; ii) Yellow Tariff Level: average sample value of FDA comprised between 75% and 85%; iii) Red Tariff Level: FDA range between 85% and 95%; iii-a) Level 1: average sample value of FDA comprised between 85% and 90%; and iii-b) Level 2: average sample value of FDA comprised between 90% and 95%. The activation of the flags and the monthly values of the Centralizing Account of Tariff Levels Resources (CCRBT), transferred to Celesc D, as well as the amounts transferred from Celesc D to CCRBT for the purpose of Settlement of Short-Term Market Operations with the Chamber of Commerce of Electric Energy - CCEE, in 2019 are:

Month Level CCRBT Onlending

to Celesc D (R$ K)

Celesc D Onlending to CCRBT

(R$ K)

Nr. of ANEEL Orders

January Green 7,209 - 280/2019 February Green 2,809 - 629/2019 March Green 4,149 - 979/2019 April Green 2,209 - 1.253/2019 May Yellow 2,753 - 1.525/2019 June Green 4,451 - 1.862/2019

c) 2014 Contractual Exhibit – ANEEL Order No. 2,642/2015 and 2,078/2016 Celesc D filed a lawsuit against ANEEL, seeking to challenge the Order in 2,078/16, in order to obtain the full recognition of contractual exposures as involuntary, at the same time that it requested the grant of an injunction to suspend the application of reducer R$ 256.6 million, expected to be applied together with the homologation of the Periodic Tariff Review process that would occur until August 22, 2016. After the lawsuit was filed, a preliminary injunction was granted to remove the tariff reducer mentioned above, which ANEEL responded to when it approved the RTP, and Celesc D is currently discussing the merits of the lawsuit in the second instance of courts, seeking the full recognition of the contractual exposure as involuntary and, thus, eliminating any tariff reducer in the 2019 lawsuit, as well as the application of penalties by CCEE. 2.1.2. Celesc Generação S.A. - Celesc G Celesc G, constituted by public deed on September 29, 2006, as authorized by State Law 13.570 of November 23, 2005, is a publicly-held company. Celesc G is responsible for the operation, maintenance, expansion and marketing of the Company's generating plant, currently formed by one (1) Small Hydroelectric Plant - SHP, six (6) hydroelectric plants - HPPs and five (5) hydroelectric generating plants - HGPs owned by Celesc G. Moreover, it has investments in partnership with private investors, with six (6) generators developed in the form of one (1) Specific Purpose Company (SPE or SPC) and a transmitter of electric energy.

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2.1.2.1. Generating Site 2.1.2.1.1. Own Generating Site – 100% owned by Celesc G The generation plant owns 106.97MW of installed power, pursuant to the table below:

Description Location Final Concession Term Installed Power (MW) Physical

Warranty (MW)

Physical Guarantee in

Shares Pery HHP Curitibanos/SC July 9, 2047 30.00 14.08 100% Palmeiras HPP Rio dos Cedros/SC November 7, 2046 24.60 16.70 70% Bracinho HPP Schroeder/SC November 7, 2046 15.00 8.80 70% Garcia HPP Angelina/SC July 7, 2045 8.92 7.10 70% Cedros HPP Rio dos Cedros/SC November 7, 2046 8.40 6.75 70% UHE Salto Weissbach Blumenau/SC November 7, 2046 6.28 3.99 70% Celso Ramos SHP Faxinal dos Guedes/SC March 17, 2035 5.62 3.80 N/A Caveiras HGP Lages/SC * 3.83 2.77 N/A Ivo Silveira HGP Campos Novos/SC * 2.60 2.03 N/A Rio do Peixe HGP Videira/SC * 0.52 0.50 N/A Piraí HGP Joinville/SC * 0.78 0.45 N/A São Lourenço HGP Mafra/SC * 0.42 0.22 N/A Total 106.97 67.19 * Plant with installed power of less than 5 MW is exempt from the Concession Act (Law 13.360/16). N/A - Not Applicable. 2.1.2.1.2. Own Generating Site - Expansion Projects Other projects fully owned by Celesc G are under review for the expansion and reactivation, according to the table below:

Description Location Final

Concession Term

Installed Power (MW)

Power Increase

(MW)

Final Power (MW)

Expected Date of

Operational Start-up

Status

Celso Ramos SHP Faxinal dos Guedes/SC March 17, 2035 5.62 8.30 13.92 2021 Start of Construction Works

Power Plant Salto Weissbach Blumenau/SC November 7,

2046 6.28 23.00 29.28 N/D** Environmental Licensing

Plant Cedros Steps 1 and 2 Rio dos Cedros/SC November 7,

2046 8.40 4.50 12.90 N/D** Review of the Basic Project

Palmeiras Plant Rio dos Cedros/SC November 7, 2046 24.60 0.75 25.35 N/D** Review of the Basic Project

Maruim HGP São José/SC * 0.00 1.00 1.00 N/D** Environmental Licensing Caveiras HGP Lages/SC * 3.83 10.00 13.83 N/D** In Inventory Study Total 48.73 47.55 96.28

* Plant with installed power of less than 5 MW is exempt from the Concession Act (Law 13.360/16). ** It depends on regulatory procedures. N/A - Not Available.

2.1.2.1.3. New Generation Ventures in Operation - Minority Interest The generation site, already in operation, in partnership with private investors in the format of SPE, has 31.78MW. The power equivalent to Celesc G's equity interest in these projects is 11.24MW, as shown in the table below:

Description Location Final Concession Term

Installed Power (MW)

Physical Warranty

(MW)

Celesc Geração

Share

Equivalent Installed Power

(MW)

Equivalent Physical Warranty (MW)

Rondinha SHP Passos Maia/SC October 5, 2040 9.60 5.48 32.5% 3.12 1.78 Prata HGP Bandeirante/SC May 5, 2039 3.00 1.68 26.0% 0.78 0.44 Belmonte HGP Belmonte/SC May 5, 2039 3.60 1.84 26.0% 0.94 0.48 Bandeirante HGP Bandeirante/SC May 5, 2039 3.00 1.76 26.0% 0.78 0.46 Xavantina SHP Xanxerê/SC April 7, 2040 6.08 3.54 40.0% 2.43 1.42 Garça Branca SHP Anchieta/SC March 13, 2043 6.50 3.44 49.0% 3.19 1.69 Total 31.78 17.74

11.24 6.26

2.1.2.1.4. Transfer of Minority Shareholding in Generation Ventures under Development Celesc G had an equity interest in another venture, still under development, according to the following table:

Description Location Final Concession Term

Installed Power (MW)

Celesc Geração

Share

Equivalent Installed Power

(MW)

Expected Date of Operational Start-up Status

Campo Belo HGP Campo Belo do Sul/SC May 19, 2044 9.95 20.4% 2.04 N/A * Total 9.95 2.04 * Sale concluded on 07/2019.

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N/A - Not Available. On December 10, 2018, this venture sent submitted to ANEEL a request for prior consent for the operation to change the direct control of the electric power generation agent, which was complied with Order 045 of January 8, 2019. The negotiations for the transfer of this interest to the companies Alfa Gestão de Negócios Ltda. (50%) and Ecco Energy Investimento e Participações Ltda. (50%) were concluded, including the consent of ANEEL. It should also be noted that in the second quarter of 2019, Celesc G concluded the process of transferring its entire stake in Painel SHP to the company Astic EN Participações S.A., which was another venture under development. 2.1.2.2. Transmission Project 2.1.2.2.1. Transmission Project - Celesc G/EDP Energias do Brasil - Minority Interest Celesc G holds a 10% interest (90% under the control of EDP Energias do Brasil) in a transmission project, called EDP Transmissão Aliança SC, whose purpose is to implement lot 21 of the Auction on 05/2016 of ANEEL, the third largest project, with investment forecast at R$1.1 billion. The facilities aim to expand the system of the southern and plateau region of the state of Santa Catarina and will also enable Celesc G to connect its distribution system to the new structure in order to bring direct benefits to critical regions in the state's energy system. The deadline for the works execution is 60 months and the commercial start-up determined is August 2022, with a possibility of anticipation. The SPE was constituted in July 2017 and the Concession Agreement was signed in August of the same year. The project includes 5 sections of transmission lines and a substation, as follows:

Origin Destination Circuito Extension (KM)

Voltage (kV)

TRANSMISSION LINES

Abdon Batista SE Campos Novos SE SC 39.8 525 Siderópolis 2 SE Abdon Batista SE DS 209.0 525

Biguaçu SE Siderópolis 2 SE SC 150.5 525 Siderópolis 2 SE Siderópolis SE DS 6.0 230 Siderópolis 2 SE Forquilhinha SE SC 27.8 230

Total CS/CD 433.1 525/230

SUBSTATION 525/230 SIDERÓPOLIS 2 SE - - 525/230

The installation environmental licenses are being issued by section, and by the end of the second quarter of 2019, licenses were issued for Substation and Section Biguaçu - SE Siderópolis 2, and the construction works started in these sections. The following table summarizes the main venture information:

Project Location Final Concession Term Power Transformation (MWA) Transmission lines (km) Celesc Geração Share

EDP Transmissão Aliança SC SC August 11, 2047 1,344 433 10.0% 2.1.2.3. Regulatory Environment 2.1.2.3.1. Expansion Projects and Extended Concessions a) Projects of the Expansion of Own Plants Expansion of the Celso Ramos SHP Celesc G obtained authorization to enlarge Celso Ramos SHP in the order of 7.2MW (5.62MW to 12.82MW) by means of ANEEL Authorization Resolution No. 5,078/2015, as well as the extension of the concession for 20 years, conditioned to the conclusion of the project by November 2021. In 2018, the Basic Project for the expansion of the Plant was revised and consolidated, and this new configuration foresees the installation of a new adductor circuit, which will have a new water intake channel, forced conduit and a new powerhouse with two UG-3 and UG-4, with 4.15MW each, totaling an increase of 8.3MW in the utilization (going from 7.2MW to 8.3MW and totaling 13.92MW of installed capacity).

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On March 29, 2019, ANEEL issued the Order 939/2019, registering the suitability for the use of the hydraulic potential of the revision of the Basic Project for the Expansion of Celso Ramos SHP and ratifying new parameters required to define the physical guarantee of the project. With the registration at ANEEL’s 29th New Energy Auction, the Energy Research Company (EPE) defined the project’s Physical Guarantee. The construction works started July 2019. It is also noteworthy that Celesc G participated in the aforementioned Auction A-4, successfully selling the energy of this venture, effective in January 2023. Extension of the Salto Weissbach Plant In 2018, the basic expansion project of the Salto Weissbach plant, located in the city of Blumenau, was approved by ANEEL through Order 1.117, of May 21, 2018. The expansion project foresees the construction of a new adductor circuit in parallel to the existing one, with adduction channel, water outlet and each of force with two generating units of 11.5MW each, totaling the addition of 23MW of installed power in the Plant, going to 29.28MW. The project is currently in the process of obtaining an Environmental Installation License from Instituto de Meio Ambiente de SC (IMA/SC) and analyzed by Empresa de Pesquisa Energética (EPE). Upon completion of the above steps, ANEEL will calculate the remuneration of this project, the energy of which will be fully dedicated to the quota system, so that the Company may proceed with the financial feasibility, bidding and construction steps. Expansion of the Cedros and Palmeiras Plants In 2018, ANEEL waived the Rio Hydroelectric Inventory Study for the Expansion projects of the Cedros and Palmeiras Plants, as requested in 2016. Thus, the next step foreseen by the Company is to carry out the consolidation of the basic projects for the expansion of these plants, for subsequent referral to ANEEL. Expansion of Caveiras HGP ANEEL has already filed an application to carry out inventory studies for the section of the river where the Caveiras HGP is installed, with a view to promoting the expansion of its installed capacity. On December 12, 2018, the Superintendency of Concessions and Authorizations of Generation (SCG) issued the Technical Note 565/2018 to grant Celesc G with the registry for reviewing Caveiras River inventory. On December 14, 2018, Order 3005/2018 was issued, providing Celesc G with inventory registration for a period of 630 days as of order’s issuance. The study of river inventory, which is contracting phase, is fundamental for the referral of the basic expansion project for approval by ANEEL. Reactivation of Maruim HGP Maruim HGP, built in 1910, is located in the municipality of São José/SC. Considered one of the oldest hydroelectric plants in the country, it has been decommissioned since 1972 and Celesc has a project for the reactivation. In 2018, Celesc G promoted the revision and consolidation of the Basic Project, and this new configuration foresees an installed capacity of 1 MW, using the existing powerhouse, listed as a historical heritage since 2002. Since 2018, the project has an environmental license issued by IMA/SC, and is awaiting the Environmental Installation License (LAI) to proceed with the next steps and reactivate the plant. b) Extended Concessions Pery Plant Concession Pery Plant was thus extended for 30 years, with a term of over 30 years, effective as of July 10, 2017, with the full allocation of energy in the quota system of the physical energy and power guarantee. The indemnification of the unamortized assets, related to the expansion completed in 2013, will be paid to Celesc G over the new concession period. The rule for this will be defined by ANEEL. 2.1.2.3.2. Physical Warranty Adjustment Factor

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Celesc G, as well as most generators in the country, seeks to suspend the registration of costs incurred by hydroelectric generators, resulting from the application of Generation Scaling Factor - GSF, since the frustration of hydroelectric generation in the current scenario stems both from a structural and cyclical order. The GSF represents an index that expresses the ratio between the sum of all the energy produced by the MRE Plants and the sum of the physical guarantees of the Plants. Since August 2015, Celesc G has an injunction that obligates CCEE to limit the incidence of GSF to the maximum percentage of 5% of the total Physical Warranty, including any collection or apportionment resulting from the GSF Adjustment Factor or from other legal proceedings. In August 2018, the Judge who is competent to try the ordinary action raised the Incidence of Repetitive Claims - IRDR in case record nr. 1015846-64.2017.4.01.3400 before the Federal Regional Court of the 1st Region, suspending the process for 60 days. Currently the IRDR is awaiting admission by the Federal Court of the 1st Region. If the IRDR is still admitted, the Rapporteur shall order the suspension of all cases with the same matter, for a maximum period of one (1) year. If the IRDR is judged, the legal thesis will be applied by the other judges to the identical cases in process. In June 2019, an order was published by the due court, ordering the suspension for another 60 days, considering the non-assessment of IRDR by TRF1. The Federal Government has been looking for alternatives to solve the great standoff of the legal system in force, which has been causing significant financial impacts to agents in the electricity sector. Recently, the government has launched a counterpart proposal for generation agents through Provisional Measure 814/2018, which is currently processed in the National Congress. In this context, the Celesc G is carrying out a strategic analysis regarding the action in the case, maintaining permanent monitoring of the progress of the process, as well as evaluating the market movements, to anticipate measures, if necessary. 2.2. Other Interests 2.2.1. Companhia de Gás de Santa Catarina S.A. – SCGÁS Celesc holds 51% of the ordinary shares and 17% of the total share capital of the jointly controlled company SCGÁS, the company responsible for distributing natural piped gas in Santa Catarina. Founded in 1994, it operates as a mixed-capital company and has as shareholders: Centrais Elétricas de Santa Catarina S.A. – Celesc (17%); Petrobrás Gás S.A. – Gaspetro (41%), Mitsui Gás e Energia do Brasil Ltda. – Mitsui Gás (41%) and Infraestrutura de Gás para a Região Sul S.A. – Infragás (1%). SCGÁS holds a Concession Agreement for the operation of piped gas distribution services executed on March 28, 1994, with a 50-year term. It should be noted that in 2013 the Santa Catarina State Attorney General's Office (PGE), representing the Government of the State of Santa Catarina and Celesc, filed a lawsuit of obligation added to the charged reimbursement under number 0011447-19.2013.8.24.0023, against SCGÁS, Petrobras Gás S.A. – Gaspetro, Mitsui Gás e Energia do Brasil Ltda e Infragás S.A., questioning changes in the Share Capital and the Shareholders Agreement of 1994, obtaining a favorable injunction in a 1st degree judgment. Meanwhile, Mitsui Gás and Gaspetro shareholders have filed an injunction, suspending the effects of said preliminary injunction in appeal, presenting the appropriate judicial remedies. On June 3, 2019, the special appeal of the State of Santa Catarina and the Centrais Elétricas de Santa Catarina S/A – CELESC was admitted, however, the request for suspensive effect/emergency relief was rejected. On this date, the extraordinary appeal was not accepted and the request for suspensive effect/emergency relief was rejected. From this decision, on June 28, 2019, the State of Santa Catarina brought an interlocutory appeal pending court decision. On July 5, 2019, the Prosecutors of the case were summoned to present counterarguments on this Appeal. 2.2.2. Empresa Catarinense de Transmissão de Energia – ECTE Affiliate ECTE has as its social purpose providing services for the planning, implementation, construction, operation and maintenance of electric power transmission facilities, including support and administrative services, programming, measurements and other services necessary for the transmission of electricity, incorporated as a publicly-held company on August 8, 2000. ECTE will hold the Electric Power Transmission Service concession for a period of 30 years, as of November 1, 2000, for the implementation, maintenance and operation of the 525kV Voltage Transmission Line, with a 252.5km extension of lines between the Campos Novos/SC and Blumenau/SC. Celesc holds a 30.88% stake in ECTE’s total share capital, Alupar has 50.02%, and Transmitter, Aliança de Energia Elétrica SA - TAESA, holds 19.10%. The ECTE system integrates the Basic Network of the National Interconnected System, whose coordination and control of the electric power transmission operation, under the supervision and regulation of ANEEL, is the responsibility of the National Electric System Operator – ONS, authorized by the Ministry of Mines and Energy – MME. ECTE has a subsidiary, Empresa de

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Transmissão Serrana S.A. – ETSE, whose Concession Agreement for the transmission of electric energy is dated from May 10, 2012, with a 30-year term, responsible for building Substations Abdon Batista/SC (525kV/230kV) and Gaspar/SC (230kV/138kV). 2.2.3. Dona Francisca Energética S.A. – DFESA The affiliate DFESA is an independent electricity producing concessionaire, with a Concession Agreement from August 28, 1998, started operating on February 5, 2001, with a 35-year term as of 1998, with an installed capacity of 125 MW and guaranteed energy of 80 MW. Celesc holds 23.03% of the company’s total share capital, Gerdau 51.82%, Copel 23.03% and Statkraft Energias Renováveis S.A. with 2.12%. 2.2.4. Usina Hidrelétrica Cubatão S.A. – Cubatão Plant Usina Cubatão is a Special Purpose Company – SPE, established in 1996, for deploying the Cubatão Hydroelectric Power Plant. It is a venture located in Joinville/SC with an Installed Power of 45MW. After facing environmental obstacles, rejection of the postponement of the concession period and the consequent economic impracticability for developing the project, the venture requested the regulatory agency to amicably terminate Concession Agreement No. 04/1996 (ANEEL Case No. 48100.003800/1995-89). By means of Decree 310, dated from July 27, 2018, the Minister of State for Mines and Energy, extinguished the concession for the use of Hydraulic Energy referred to as Cubatão HPP, registered with the Unique Code of the Generation Venture – CEG: UHE.PH.SC.027062-8.01. It further acknowledges that there are no reversible assets linked to the concession, nor any encumbrances of any nature to the Granting Authority or ANEEL. Celesc holds 40% of the company’s share capital, Inepar S.A. 40%, and Statkraft Energias Renováveis S.A. 20%. The investment in the said plant is fully provisioned as a devaluation in equity interest. The company has been dealing with the corporate aspects for its dissolution. 2.2.5. Companhia Catarinense de Água e Saneamento – Casan Casan is a publicly-traded mixed-capital company with the role of planning, executing, operating and exploring potable water supply services in its concession area, in which Celesc owns 15.48% of the total Share Capital of the company. The controlling shareholding is owned by the Government of the State of Santa Catarina, which owns 64.21%; the other investors are: SC Participações e Parcerias S.A. – SC Par 18.03% and Codesc 2.28%. The investment in Casan is classified in the Company's Financial Statements as Fair Value through Other Comprehensive Income - VJORA. 3. BASIS OF PREPARATION The preparation bases applied in this Quarterly, Individual and Consolidated Information are as follows: 3.1. Compliance Statement The Individual and Consolidated Financial Statements have been prepared and are presented in accordance with Technical Pronouncement CPC 21 (R1) - Interim Statements and International Standard IAS 34 - Interim Financial Reporting, issued by the International Accounting Standards Board (IASB) and presented as per the standards issued by the Brazilian Securities and Exchange Commission (CVM), applicable to the preparation of the Quarterly Information (ITR). The issuance of the interim financial information was authorized by the Executive Board on July 31, 2019. 3.2. Functional Currency and Presentation Currency The Interim Financial Statements, Individual and Consolidated, are shown in Brazilian Reais, which is the functional currency and all amounts are rounded to thousands of Reais, except when indicated otherwise. 3.3. Critical Accounting Estimates and Judgments Estimates and accounting judgments are continuously evaluated and are based on historical experience and other factors, including expectations of future events, which are considered reasonable for the circumstances. By definition, the resulting accounting estimates will rarely equal their actual results. Estimates and assumptions may cause significant adjustments in equity and income values for the following periods, impacting on the following measurements: a) Fair value of Financial Instruments; (Note 5.7) b) Estimated Losses on Doubtful Settlement Accounts - PECLD (Note 11)

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c) Concession Bonus (Note 13.2) d) Impairment of Non-Financial Assets; (Notes 17 and 18) e) Realization of Deferred Income Tax and Social Contribution; (Note 20) f) Contingencies; (Note 27) g) Benefits of Pension Plans (Actuarial Liabilities); (Note 28) h) Unbilled revenue - Celesc D (Note 31.1); i) Depreciation - Celesc G (Note 18); j) Amortization of Indemnifying Assets - Celesc D (Note 19). 4. ACCOUNTING POLICIES The preparation basis and the accounting policies are the same used in the preparation of the annual Financial Statements for the year ended on December 31, 2018, contemplating the adoption of accounting pronouncements effective as of January 1, 2019. 4.1. Measurement Basis The Financial Statements have been prepared based on historical cost, with the exception of Financial Assets measured at Fair Value through Other Comprehensive Income - VJORA and at Fair Value through Profit - VJR recognized in the balance sheet. 4.2. Accounting Policies, Change of Estimates and Error Rectification The Company reviewed its accounting policies in order to better present its operating and financial income. For comparability purposes, reclassifications were made to the corresponding amounts related to the Consolidated Income Statement for the Year and the Consolidated Statement of Added Value for the period ended on June 30, 2018, as set forth in CPC 23 – Accounting Policies, Change of Estimates and Error Rectification (IAS 8 – Accounting Policies, Changes in Accounting Estimates and Errors), CPC 26 (R1) – Presentation of Financial Statements (IAS 1 – Presentation of Financial Statements) and CPC 21 (R1) – Interim Financial Reporting (IAS 34 - Interim Financial Reporting). These reclassifications had a qualitative impact on the Company’s results. The effects of these reclassifications are as follows: 4.2.1. Income Statement for the Period

Consolidated

Description 30

June 2018

Reclassification

30 June 2018

(Re-submitted) Net Operating Revenue - NOR (Note 31.1) 3,751,956 - 3,751,956 Revenue from Sales and Services 3,270,480 - 3,270,480 Construction Revenue - CPC 47 196,689 - 196,689 Revenue Installment A - CVA 282,459 - 282,459 Update of Financial Assets - VNR 2,328 - 2,328 Cost of Sales/Services Rendered (Note 31.2) (3,256,821) (14,972) (3,271,793) Cost of Goods Sold (Note 4.3) (2,748,980) (14,972) (2,763,952) Cost of Products Sold (6,904) - (6,904) Cost of Services (304,248) - (304,248) Cost of Construction - CPC 47 (196,689) - (196,689) Gross Income 495,135 (14,972) 480,163 Operational Expenses (210,233) - (210,233) Sales (Note 31.2) (106,412) - (106,412) General and Administrative Matters (Note 31.2) (149,180) - (149,180) Other Income (Expenses), Net (Note 31.2) 38,311 - 38,311 Equity in earnings (Note 17.b) 7,048 - 7,048 Operational Income Prior to Financial Income 284,902 (14,972) 269,930 Financial Income (Note 4.3 and Note 31.3) 82,058 (1,460) 80,598 Financial Expenses (Note 4.3 and Note 31.3) (132,881) 16,432 (116,449) Income Before Income Tax and Social Contribution 234,079 - 234,079 Current Income Tax and Social Contribution (80,694)

(80,694)

Deferred Income Tax and Social Contribution (13,174)

(13,174) Net Profit/(Loss) in the Period 140,211 - 140,211

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4.2.2. Statement of Added Value

Consolidated

Description June 30, 2018 Reclassification

30 June 2018

(Re-submitted) Revenues 6,142,226 - 6,142,226 Sales of Goods, Products and Services Other 5,906,832 - 5,906,832 Construction Revenue - CPC 47 196,689 - 196,689 Estimated Losses for Doubtful Settlement Accounts (19,952) - (19,952) Other Revenues 58,657 - 58,657 Inputs Acquired from Third Parties (3,093,177) (14,972) (3,108,149) Costs of Products, Goods and Services Sold (Note 4.3) (2,793,737) (14,972) (2,808,709) Materials, Energy, Third Party Services (i) (102,751) - (102,751) Cost of Construction - CPC 47 (196,689) - (196,689) Gross Value Added 3,049,049 (14,972) 3,034,077 Depreciation and Amortization (106,838) - (106,838) Net Value Added 2,942,211 (14,972) 2,927,239 Added value received in transfer 89,106 (1,460) 87,646 Equity Income 7,048 - 7,048 Financial Income (Note 4.3) 82,058 (1,460) 80,598 Total Value Added Distributable 3,031,317 (16,432) 3,014,885 Personnel (296,753) - (296,753) Direct Compensation (273,848) - (273,848) Benefits (16,523) - (16,523) FGTS (6,382) - (6,382) Taxes, Fees and Contributions (2,451,719) - (2,451,719) Federal (1,406,620) - (1,406,620) State (1,041,392) - (1,041,392) Municipal (3,707) - (3,707) Return on Third-Party Equity (142,634) 16,432 (126,202) Interest (13,677) - (13,677) Rents (9,753) - (9,753) Monetary and Exchange Rate Variations (16,993) - (16,993) Other Financing Expenses (Note 4.3) (102,211) 16,432 (85,779) Compensation of Own Capital (140,211) - (140,211) Dividends (3,158) (3,158) Withheld Profit of the Period (137,053) - (137,053) Added value allocated (3,031,317) 16,432 (3,014,885)

4.3. Changes in Accounting Policies and Disclosures Since January 2019, the Company started recording foreign exchange variations related to the acquisition of electric energy for resale from Itaipu under “Energy Cost”, as it is understood that these amounts will be recognized by ANEEL on the date of the tariff readjustment of Celesc D. 4.4. New Standards and Interpretations 4.4.1. IFRS 16/CPC 06 - Leasing Operations On January 1, 2019, IFRS 16/CPC 06 - “Leasing Operations” entered into force. With this new standard, leaseholders will have to recognize the liability of future payments and the right to use the leased asset for practically all leases, including operating leases, and certain short-term or small-value contracts may fall outside the scope of this new standard. The criteria to recognize and measure leases in the Financial Statements of the leaseholders are substantially maintained. IFRS 16 enters into force for fiscal years beginning on or after January 1, 2019 and replaces IAS 17 / CPC 06 - "Leasing Operations" and corresponding interpretations. 4.4.2. IFRIC 23 - Uncertainty on the Treatment of Taxes on Profits On January 1, 2019, IFRIC 23 / ICPC 22 - “Uncertainty on the Treatment of Taxes on Profits” entered into force, which clarifies how to apply the recognition and measurement requirements of IAS 12/CPC 32 - “Taxes on Profit” when there is uncertainty about the acceptance of the treatment of the tax on profit by the tax authority. The Company performed an analysis relevant to the subjects and did not identify significant impacts on its Financial Statements as a result of the application of the new standards. There are no other IFRS standards or IFRIC interpretations that have not yet come into effect that could have a material impact on the Company’s Financial Statements.

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5. RISK MANAGEMENT The Company's Internal Planning and Control Board (DPL) develops the strategic management of risks and internal controls, drawing up a map of strategic risks, modeling these risks to mitigate them through action plans, aiming to reach the Company' s strategies. 5.1. Financial Risk 5.1.1. Credit Risk Non-Payment Rate Risk of impairment of financial economic planning due to non-receipt of invoiced revenue due to communication, delivery and collection deficiencies in relation to customers. 5.1.2. Liquidity Risk Third-Parties Capital Risk of the impossibility or unavailability of raising capital from third parties to the market or of impacts due to the early maturity of debt with the financial market or the unplanned and unplanned variation in interest and exchange rates. Cash flow Risk of low financial liquidity is due to the low collection, impossibility of funding, defaults, excess expenses and/or investments, to fulfill financial commitments and the business strategy. The amounts disclosed in the table are the undiscounted contracted cash flows on June 30, 2019.

Consolidated

Description Fees % Less than one month

From one to three

months

From three months

to one year

Between one and

five years

Over five years Total

Accounts Receivable 1,432,633 48,340 29,655 38,722 6,172 1,555,522 Cash and Cash Equivalents 756,409 - - - - 756,409 Judicial Deposits - - - 206,163 - 206,163 CDE Subsidy* 1,511,003 - - - - 1,511,003 Grant Bonus IPCA 2,844 5,615 24,216 106,484 184,556 323,715 Related parties - - 488 - - 488 Total Assets 3,702,889 53,955 54,359 351,369 190,728 4,353,300 Banking Loans DS CDI + 1.25% to 1.30% 3,428 - 61,931 627,245 - 692,604 Bank Loan 7.40% p.a. 150,716 - - - - 150,716 Eletrobras 5% p.a. 1,178 501 1,928 3,942 1,021 8,570 Finame 2.5% to 9.5% p.a. 725 1,333 6,054 16,996 43 25,151

Debentures – Celesc D CDI + 1.3% p.a. to 1.9% p.a. 3,589 - 33,831 237,077 - 274,497

Debentures – Celesc G CDI + 2.5% p.a. - 767 35,485 116,102 - 152,354 Suppliers 466,504 404,920 1,460 - - 872,884 Sectorial Charges – CDE 1,796,980 - - - - 1,796,980 Financial Liabilities - CVA 8,485 17,011 77,883 73,863 - 177,242 Mathematical Reserve to be Amortized IPCA + 6% p.a. 12,198 10,354 48,487 327,342 52,060 450,441 BID CDI + 0.89% p.a. - - 5,126 9,459 439,023 453,608 Total Liabilities 2,443,803 434,886 272,185 1,412,026 492,147 5,055,047 * Decree 7891/13 Actuarial Risk of financial losses as a result of the joint and several liability of the Company, as the sponsor of its employees' pension fund, by definition of a wrong actuarial rate, inadequate management, or in disagreement with market practices, or unexpected fluctuations in market variables. 5.2. Operational Risk Class 5.2.1. Category Management Investments

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Risk of losses due to investment decisions in disagreement with the strategic alignment, failure to comply with timelines, insufficient rates of return and unforeseen disbursements. 5.2.2. Category Process Asset Protection Risk of financial losses due to the lack of protection mechanisms, claims and/or unauthorized access. Losses Risk of revenue reduction due to increased technical and non-technical losses of marketed energy, due to the lack of infrastructure of the distribution systems or inefficiency in controlling fraud and theft. Distributor Energy Contracting Risk of non-full tariff transfer of contracted energy costs and penalties due to contracting outside regulatory limits. 5.2.3. Electric Energy Production Risk Category Average Turnout Plants of Celesc G are water-type or with relatively small reservoirs, depending directly on the rainfall regime. Availability of Generating Units Due to the advanced age of Celesc G Plants (ages 50 to 109), the natural wear of parts and equipment, and the improvement and modernization services, power generation is influenced by the availability of generating units. 5.2.4. Personnel Health and Safety Risk of labor liabilities, interdiction of activities and removal or death of workers caused by non-compliance with legal norms, lack of training and lack of adequate protective equipment. People's Development and Management Risk of loss due to limitations in employee hiring and retention mechanisms or inability to promote the development of group professionals by making the available workforce out of date and unable to develop strategy challenges. 5.2.5. Information and Technology Risk Access to Information and IT Infrastructure Risk of loss or damage arising from unauthorized access to critical data and information due to inappropriate security policies or parameters, or malicious intent of users, as well as the ability to process systems or failures/delays in the operations of the systems available and inadequate protection/physical safeguarding of network assets. 5.3. Compliance Risk Class 5.3.1. Regulatory/Legal Category Social and Environmental Risk of losses arising from environmental and social policies and practices that are not in compliance with the law (deliberate noncompliance, lack of knowledge of laws and operational failures), exposing the Company to inspection by inspection agencies, not obtaining licenses and image wear. Tariff Review Risk of losses in the compensation contained in Installment B, which represents the Company's manageable costs, caused by the non-compliance with the regulatory requirements established by ANEEL or by changes in the methodology of the tariff review

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process, specifically in the valuation of the Regulatory Remuneration Base, resulting in Installment B lower than expected. Extinction of Concession a) Energy Distribution On December 9, 2015, the Company signed the 5th Addendum to the Electricity Distribution Concession Agreement 56/1999, for a period of 30 years, which states that in the first 5 (five) years there will be targets to be indicators for technical quality and economic and financial sustainability, conditions for confirmation of the extension of the concession. The technical quality indicators, namely the reduction in Celesc D's DEC, must reach 9% and in 2020 – the deadline given by ANEEL for full proof of adjustments – the level becomes a 25% reduction. Following the historical pace, the reduction of this indicator should be 5% per year.

YEAR FINANCIAL ECONOMIC MANAGEMENT QUALITY INDICATORS (ESTABLISHED LIMIT) VERIFICATION

DECi ¹ FECi 2

2016 14.77 11.04 SERVED 2017 LAJIDA>0 13.79 10.44 SERVED 2018 {LAJIDA (-) QRR}≥0 12.58 9.84 SERVED 2019 {NET DEBT/[LAJIDA (-)QRR3]}≤1/0.8*SELIC4 11.56 9.25 2020 NET DEBT/{LAJIDA (-)QRR}<1/1.11*SELIC 11.30 8.65

¹ DECi - Equivalent Duration of Interruption of Internal Origin per Consumer Unit; 2 FECi - Equivalent Frequency of Interruption of Internal Origin by Consumer Unit; 3 QRR - Regulatory Reintegration Quota or Regulatory Depreciation Expenses. It will be the value defined in the last Periodic Tariff Review-RTP, plus the IGP-M between the month prior to the RTP and the month prior to the twelve (12) month period of the economic-financial sustainability benchmarking; 4 Selic - limited to 12.87% p.a.

b) Power Generation Risk of extinction of the extension of the Celso Ramos SHP Concession Agreement due to the obligation to start commercial operations by 2021 of two new generating units to be built by Celesc G. Regulation of the Electric Sector Risk of administrative sanctions applied by Regulatory Agency in the face of inadequate internal processes, loss of value due to changes in legislation that are out of alignment with Company's strategic interests, and exposure to defined government policies for the sector, as well as interference from external bodies. Fraud Risk of financial loss, image damage, service quality decrease and legal sanctions due to internal or external fraud caused by employees or third parties due to control or collusion failures. Lawsuits Risk of losses caused by practices in disagreement with Brazilian law and the Terms of Adjustment of Conduct (TAC) or internal deficiencies that hinder or prevent the construction of defense. 5.4. Strategic Risk 5.4.1. Governance Risk Image Risk of falling in the reputation of the Company towards the main stakeholders. 5.4.2. Strategy Risk Innovation Risk of loss of competitive advantage due to the difficulty of developing and/or implementing new technologies, compromising several aspects such as access to new markets, revenue maximization, acquisition of new knowledge, brand valuation and corporate sustainability.

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5.5. Additional Sensitivity Analysis Required by CVM The following table shows the sensitivity analysis of financial instruments, which describes the risks of interest rates that may generate material effects for the Company, with a more probable scenario (scenario I), according to an evaluation made by the Management, considering a three month horizon, when the next financial information containing such analysis should be disclosed. In addition, two other scenarios are demonstrated, in the terms determined by CVM Instruction 475, dated from December 17, 2008, in order to present 25% and 50% of deterioration in the respective risk variable, respectively (scenarios II and III). The sensitivity analysis presented considers changes in relation to a certain risk, keeping all other variables constant, associated to other risks, with balances as of June 30, 2019:

Consolidated Assumptions Effects of Accounts on Income

Balance (Scenario I) (Scenario II) (Scenario III)

CDI(%) 6.07% 7.59% 9.11% Financial Investments (Note 9) 611,344 37,109 46,401 55,693 Loans (Note 23) (i) (961,329) (58,353) (3,542) (215) Debentures (Note 24) (391,840) (23,785) (29,741) (35,697) SELIC 6.10% 7.63% 9.15%

Financial Liabilities - CVA (Note 13.1) (165,264) (10,081) (12,610) (15,122)

CDE Installments (Note 26) (266,066) (16,230) (20,301) (24,345) IPCA (%) 3.37% 4.21% 5.06%

Indemnity Assets (Concession) in Service (Note 14) 201,741 6,799 8,493 10,208 Concession Bonus (Note 13.2) 286,744 9,663 12,072 14,509 Mathematical Reserve to be Amortized (Note 6) (404,457) (13,630) (17,028) (20,466) (i) Only CDI-indexed loans

5.6. Capital Management The objectives of managing its capital are to safeguard the Company's ability to continue to offer shareholder returns and benefits to other stakeholders, as well as to maintain an ideal capital structure to reduce this cost. In order to maintain or adjust the capital structure, the Company may review the dividend payment policy, returning capital to the shareholders, or issue new shares or sell assets to reduce, for example, the level of indebtedness. Consistent with other companies in the sector, the Company monitors the capital based on the financial leverage index. This index corresponds to the net debt divided by total capital. Net Debt, in turn, corresponds to total Loans and Financings (including short- and long-term loans) and Debentures, subtracted from the amount of Cash and Cash Equivalents. The total capital is determined by the sum of Net Worth with the Net Debt.

Consolidated

Description 30 31

June December 2019 2018

Loans and Financing - National Currency (Note 23) 820,185 645,348 Loans and Financing - Foreign Currency (Note 23) 322,906 273,453 Debentures (Note 24) 391,840 501,262 (-) Cash and Cash Equivalents (Note 9) (756,409) (698,060) Net Debt 778,522 722,003 Total Net Worth 1,926,266 1,800,856 Total Capital 2,704,788 2,522,859 Financial Leverage Index (%) 28.78% 28.62%

5.7. Fair Value Estimate It is assumed that the Accounts Receivable from Customers and Accounts Payable balances at the book value, less the impairment loss, are close to their fair values. The fair value of Financial Liabilities, for disclosure purposes, is estimated by discounting the future contractual cash flow at the prevailing market interest rate, which is available to the Company for similar financial instruments. The Company applies CPC 46 - Measurement at Fair Value to financial instruments measured in the Balance Sheet at fair value, which requires disclosure of fair value measurements by the level of the following measurement hierarchy at fair value: Quoted prices (unadjusted) in active markets for assets and liabilities that are identical to those that the entity may have access to at the measurement date (Level 1).

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Information, in addition to the quoted prices, included in Level 1 that are adopted by the market for the Assets or Liabilities, either directly, that is, as prices or indirectly, that is, derived from prices (Level 2). Inserts for assets or liabilities that are not based on the data adopted by the market, that is, unobservable inserts (Level 3). The following table sets forth the Group's assets measured at fair value on June 30, 2019. The book value is close to the fair value of financial assets and liabilities. The Company does not have liabilities measured at fair value at that base date.

Consolidated

Description – Level 3

30 June 2019

31 December

2018 Fair Value through Other Comprehensive Income - VJORA Securities (Note 10) 137,261 137,261 Others 217 217 Fair Value by Income - VJR Indemnity Asset - Concession (Note 14) 450,159 441,030 Total Assets 587,637 578,508

Specific valuation techniques used to value financial instruments include: a) market approach; b) cost approach; c) revenue approach; d) Other techniques, such as the analysis of discounted cash flows, are used to determine the fair value of the remaining financial instruments. 6. FINANCIAL INSTRUMENTS BY CATEGORY The following table sets forth the financial instruments by category as of June 30, 2019.

Consolidated

Description Amortized Cost Fair Value

Through Income

Fair Value through Other Comprehensive Income Total

Assets 4,981,798 450,159 137,478 5,569,435 Cash and Cash Equivalents 756,409 - - 756,409 Accounts Receivable from Customers 2,220,991 - - 2,220,991 Related parties 488 - - 488 Judicial Deposits 206,163 - - 206,163 CDE Subsidy (*) 1,511,003 - - 1,511,003 Securities - - 137,261 137,261 Financial Assets Indemnification - Concession - 450,159 - 450,159 Financial Asset – Grant Bonus 286,744 - - 286,744 Others - - 217 217

Liabilities 4,784,161 - - 4,784,161 Suppliers 872,884 - - 872,884 Eletrobrás 7,857 - - 7,857 National Currency Loans 812,328 - - 812,328 Foreign Currency Loan 322,906 - - 322,906 Debentures 391,840 - - 391,840 Related parties 9,645 - - 9,645 Mathematical Reserve to be Amortized 404,457 - - 404,457 Sectorial Charges – CDE 1,796,980 - - 1,796,980 Financial Liabilities - Installment A – CVA 165,264 - - 165,264

(*) Decree 7891/13

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The following table sets forth the financial instruments by category as of December 31, 2018.

Consolidated

Description Amortized Cost Fair Value

Through Income

Fair Value through Other Comprehensive Income Total

Assets 5,206,281 441,030 137,478 5,784,789 Cash and Cash Equivalents 698,060 - - 698,060 Accounts Receivable from Customers 2,289,499 - - 2,289,499 Related parties 3,092 - - 3,092 Judicial Deposits 170,350 - - 170,350 CDE Subsidy (*) 1,511,003 - - 1,511,003 Securities - - 137,261 137,261 Financial Assets Indemnification - Concession - 441,030 - 441,030 Financial Assets - CVA 253,259 - - 253,259 Financial Asset – Grant Bonus 281,018 - - 281,018 Others - - 217 217

Liabilities 4,937,199 - - 4,937,199 Suppliers 1,006,854 - - 1,006,854 Eletrobrás 14,865 - - 14,865 Loans 630,483 - - 630,483 BID 273,453 - - 273,453 Debentures 501,262 - - 501,262 Related parties 15,763 - - 15,763 Mathematical Reserve to be Amortized 424,593 - - 424,593 Sectorial Charges – CDE 2,069,926 - - 2,069,926

(*) Decree 7891/13 7. QUALITY OF FINANCIAL ASSETS CREDIT The quality of credit of financial assets can be assessed by reference to the internal ratings of assignment of credit limits.

Consolidated

Description 30

June 2019

31 December

2018 Accounts Receivable from Customers Group 1 – Customers with Collection in Due Date 760,305 800,485 Group 2 – Customers with an average delay between 01 and 90 days

770,536 810,699

Group 3 – Customers with an average delay of more than 90 days 690,150 678,315 Total 2,220,991 2,289,499

All other financial assets held by the Company, mainly checking accounts and financial investments, are considered to be of high quality and do not show any signs of losses. 8. INVENTORIES Consolidated

Description 30

June 2019

31 December

2018 Warehouse 12,771 8,494 Others 135 142 Total 12,906 8,636

Inventories consist of materials in the warehouse, mainly intended for the maintenance of energy distribution operations. 9. CASH AND CASH EQUIVALENTS Cash and Cash Equivalents are held for the purpose of meeting short-term commitments and not for other purposes.

Parent company Consolidated

Description 30

June 2019

31

December 2018

30 June 2019

31

December 2018

Resources at the Bank and in Cash 302 308 145,065 120,960 Financial Investments 15,582 16,455 611,344 577,100 Total 15,884 16,763 756,409 698,060

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Financial Investments are highly liquid, readily convertible into a known amount of cash, and are not subject to significant risk of change in value. These securities refer to Repurchase Agreements and Bank Deposit Certificates (CDBs), remunerated on average at the rate of 97% of the variation of the Interbank Deposit Certificate (CDI). 10. SECURITIES Temporary investments classified as noncurrent assets are measured at fair value.

Parent Company Consolidated

Description 30

June 2019

31 Decembe

r 2018

30 June 2019

31 Decembe

r 2018

Fair Value through Other Comprehensive Income (VJORA) Casan Shares 137,261 137,261 137,261 137,261 Other Investments 217 217 217 217 Non-Current 137,478 137,478 137,478 137,478

10.1. Companhia Catarinense de Águas e Saneamento – Casan The Company has 55,358,800 Ordinary Shares - ON, and 55,357,200 Preferred Shares - PN, representing 15.48% of Casan's Share Capital. As it did not have a significant influence on Casan, the Company measured the fair value of its equity interest in the temporary investment, adopting the discounted cash flow method for the annual evaluation of said investment. The historical acquisition cost of Casan’s shares is of R$110,716. For the calculation of valuation, the projection period adopted is 17 years (up to 2035), with a terminal value (flow of the last 12 months of projection). The discount rate used was nominal WACC of 11.99% p.a. with a nominal long-term growth rate (perpetuity) of 3.75% p.a. (central inflation target from 2021). The cost of debt after taxes is 7.13% p.a. and the cost of equity is 16.3% p.a. As there was no participant in the active market and because it is an estimate with several variables, which did not result in material additions, the Company did not change the fair value of this financial instrument on June 30, 2019. Accounting Value Reconciliation: 11. ACCOUNTS RECEIVABLE FROM CUSTOMERS a) Consumers, concessionaires and permissionaires

Consolidated

Description Balances Due Overdue

Overdue

30

31

to none June December 90 days to 90 days 2019 2018

Consumers 1,132,865 243,747 614,002 1,990,614 2,069,889 Residential 222,028 146,679 103,297 472,004 472,562 Industrial 109,266 37,928 358,848 506,042 550,640 Commerce, Services and Others 131,498 45,976 102,470 279,944 297,849 Rural 32,256 10,420 21,722 64,398 84,194 Public Power 46,480 2,698 9,393 58,571 61,504 Public Lightening 19,316 2 16,939 36,257 36,845 Public Service 17,996 44 1,333 19,373 20,520 Unbilled Revenue 554,025 - - 554,025 545,775 Supply to Other Concessionaires 156,087 5,691 68,599 230,377 219,610 Concessionaires and Permissionaires 140,306 5,691 19,205 165,202 121,855 Transactions in the Scope of CCEE 9,656 - 26,186 35,842 62,769 Other Credits - - 23,208 23,208 28,174 Unbilled Revenue 6,125 - - 6,125 6,812 Total 1,288,952 249,438 682,601 2,220,991 2,289,499 (PECLD) with Customers (b) (665,469) (645,172) Total Accounts Receivable from Customers - Net 1,555,522 1,644,327 Current 1,510,628 1,592,693 Non-Current 44,894 51,634

PECLD – Estimated losses in Doubtful Accounts.

Parent Company Consolidated Description Total Total On December 31, 2017 137,261 137,261 Historical Acquisition Cost 110,716 110,716 Fair Value 26,545 26,545 On December 31, 2018 137,261 137,261 Historical Acquisition Cost 110,716 110,716 Fair Value 26,545 26,545 On June 30, 2019 137,261 137,261

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b) Estimated Losses in Doubtful Settlement Accounts - PECLD The estimated losses on the outstanding amounts are constituted by significant increases in credit risk since the initial recognition, assessed individually or collectively, considering all reasonable and sustainable information, including forward- looking information. Celesc G, in addition to the defaults generated by bilateral contracts, is subject to defaults occurring in the Electricity Market of the National Interconnected System, in which these are managed and accounted for by CCEE and are distributed among market agents. The composition, by consumption class is shown below:

Consolidated

Description 30 31

June December 2019 2018

Consumers Residential 103,290 101,233 Industrial 227,490 225,637 Textile (i) 114,614 114,614 Commerce, Services and Others 101,749 92,933 Rural 20,753 18,271 Public Power 11,334 11,287 Public Lightening 16,475 15,862 Public Service 1,333 1,321 Concessionaires and Permissionaires (ii) 27,467 31,469 Free Consumers 16,354 8,829 Others 24,610 23,716

Total 665,469 645,172 Current 550,855 530,558 Non-Current 114,614 114,614

b.1) Changes

Consolidated Description Amount Balance on December 31, 2018 645,172 Provision Constituted in the period 28,138 Settled Accounts Receivable (7,841) Balance on June 30, 2019 665,469

(i) Estimated Losses on Doubtful Settlement Accounts - PECLD with the Textile Sector In 2009, Celesc D carried out a debt recovery action plan for textile companies, among them Buettner S.A., Companhia Industrial Schlösser S.A., Tecelagem Kuehnrich S.A. – TEKA and Têxtil RenauxView S.A. In 2011, Buettner S.A. filed for a judicial recovery and based on the likelihood of recovery of these amounts being remote, Celesc D provided for the amount of R$ 18,231. In 2017, Celesc D, considering the possibility of not receiving the amounts of the company Buettner S.A, reversed the provisioning made in 2011 and launched for losses the amount of R$ 18,231. Also in 2011, Companhia Industrial Schlösser S.A. also entered into a judicial reorganization, with a provision of R$ 16,888 in 2012. Celesc D received a judicial recovery in the amount of R$ 3,283, a reversed amount of the provision. In 2012, TEKA filed an application for judicial recovery before the Blumenau District, Santa Catarina. The recovery plan was approved by most of the creditors, although Celesc D has voted against it and in favor of the company’s bankruptcy. Therefore, the likelihood of receiving this amount is remote in the Management’s assessment, and Celesc D incorporated a provision for the full payment of the installment that TEKA has with the Company, totaling R$55,794. In relation to Companhia Têxtil RenauxView S.A., the Management of Celesc D, considering the default of the debt related to the installment agreement, and due to the remote possibility of receiving it, it constituted a provision of the total amount receivable in the amount of R$ 45,215 in 2013.

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b.2) PECLD Operation – Textile Sector The composition, per company is shown below:

Consolidated Description Amount Têxtil RenauxView S.A. 45,215 Teka Tecelagem Kuehnrich S.A. 55,794 Companhia Industrial Schlösser S.A 13,604 Balance on December 31, 2018 114,613 Provision Constituted in the period - Reversal in the Period - Balance on June 30, 2019 114,613

(ii) Judgment of the Generation Scaling Factor Adjustment - GSF The amounts referring to the adjustments of the preliminary measures regarding the GSF in the reports of the results of the short- term market accounting, issued by CCEE, related to Celesc G are in the amount of R$26,186 as of June 30, 2019. Of the total amount, R$2,908 was reversed (received) in the first quarter of 2019. b.3) GSF PECLD operation

Consolidated Description Amount Balance on December 31, 2018 29,035 Provision Constituted in the period 59 Reversal in the Period (Settled in Accounts Receivable) (2,908) Balance on June 30, 2019 26,186

12. OTHER ASSETS - CURRENT AND NON-CURRENT

Consolidated

Other Credits Receivable 30 31

June December 2019 2018

Current 278,620 221,505 Personnel available 881 2,888 Proinfa Down payment 17,098 17,098 Miscellaneous Down payment 13,498 334 PIS/COFINS/ICMS Tax Replacement 58,328 51,778 Infrastructure Share 28,206 10,441 Bill Level 4,451 13,210 Low Income Program 50,268 50,240 Eletrosul (i) 30,595 34,643 CDE Refund Differences 45,285 - Other Accounts 30,010 40,873 Non-Current 3,562 2,725 Other Accounts 3,562 2,725 Total 282,182 224,230

(i) ANEEL Order Nr. 4,171/2017 referring to amounts receivable from Eletrosul (Note 31.2 – c)

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13. FINANCIAL ASSETS/LIABILITIES 13.1. Installment A – CVA

Consolidated

Financial Assets/Liabilities - CVA

31 December

2018 Addition Amortization Compensation

30 June 2019

Amorti zation

Consti- tution Current Non-Current

CVA Asset 906,684 31,309 (396,896) 11,633 552,730 83,789 468,941 513,652 39,078 Energy 751,541 27,752 (305,114) 10,963 485,142 64,413 420,729 450,081 35,061 Proinfa 5,295 15,473 (3,948) 223 17,043 833 16,210 15,692 1,351 Basic Grid Transport 61,940 14,417 (45,404) 260 31,213 9,585 21,628 29,411 1,802 Energy Transport 16,027 4,245 (8,327) 187 12,132 1,758 10,374 11,268 864 CDE 41,303 - (34,103) - 7,200 7,200 - 7,200 - Neutrality of Installment A 30,578 (30,578) - - - - - - - CVA Liability (653,425) (306,455) 255,368 (13,482) (717,994) (53,669) (664,325) (615,216) (102,778) Energy Overcontracting (68,155) - 36,237 (654) (32,572) (7,651) (24,921) (30,495) (2,077) ESS (*) (345,759) (69,057) 151,958 (5,414) (268,272) (32,079) (236,193) (248,589) (19,683) CDE (88,238) (71,624) - (3,023) (162,885) - (162,885) (149,311) (13,574) Neutrality of Installment A (12,529) (135,208) 10,345 (2,577) (139,969) (2,184) (137,785) (128,488) (11,481) Tariff Returns (99,383) (30,566) 24,328 (1,814) (107,435) (4,894) (102,541) (51,472) (55,963) Others (39,361) - 32,500 - (6,861) (6,861) - (6,861) - Assets/(Liabilities) Balance 253,259 (275,146) (141,528) (1,849) (165,264) 30,120 (195,384) (101,564) (63,700)

(*) Charges on System Services

Consolidated

Description 30

June 2019

31 December

2018 CVA 2018 - Period from August 23, 2017 to August 22, 2018 51,710 296,648 CVA 2019 - Period from August 23, 2018 to August 22, 2019 69,863 145,461 Total - CVA 121,573 442,109 Other Items - Period from August 23, 2017 to August 22, 2018 (21,590) (175,601) Other Items - Period from August 23, 2018 to August 22, 2019 (265,247) (13,249) Total - Other Items - CVA (286,837) (188,850) Total (165,264) 253,259

13.2. Concession Bonus In 2016, Celesc G paid R$ 228.6 million as Concession Bonus - BO referring to the new Garcia, Bracinho, Palmeiras, Cedros and Salto Plant concessions. This amount is included in the tariff of these Plants and will be reimbursed by consumers over 30 years with an annual readjustment by the IPCA, as defined by ANEEL. The balance of the financial asset for each of the Plants is calculated by the amount paid: a) By deducting the monthly amount received from Return on Concession Bonus - RBO, established by ANEEL Resolution 2.421, of July 17, 2018; b) Summing up the monthly interest calculated on the basis of the Effective Interest Rate (TIR); c) Adding the monetary adjustment by the IPCA, established by the Concession Agreement.

Consolidated Description Garcia Plant Bracinho Plant Cedros Plant Salto Plant Palmeiras Plant

Total

On December 31, 2018

40,947 58,666 44,826 26,966 109,613 281,018 Monetary Update

884 1,266 968 580 2,373 6,071

Interest

2,451 3,561 2,631 1,835 5,782 16,260 Amortization/Settled

(2,499) (3,609) (2,678) (1,837) (5,982) (16,605)

On June 30, 2019

41,783 59,884 45,747 27,544 111,786 286,744

Current

32,357

Non-Current

254,387

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14. INDEMNITY ASSETS – CONCESSION

Consolidated

Description 30 31

June December 2019 2018

Concession Asset - Energy Distribution (a) 447,738 438,609 In Service 201,741 183,762 Ongoing 245,997 254,847 Concession Assets – Energy Generation (b) 2,421 2,421 Indemnity Asset 2,421 2,421 Total Non-Current 450,159 441,030

a) Concession Assets - Energy Distribution Due to the extension of the 5th Addendum to Concession Agreement No. 56/1999, Celesc D bifurcated its assets related to the concession in intangible assets and indemnifiable assets.

Based on Technical Interpretation ICPC 01 - Concession Agreements, the portion of the infrastructure that will be used during the concession was recorded in Intangible Assets, consisting of electricity distribution assets, net of special obligations (consumer participations).

Consolidated Description Amount

On December 31, 2018 438,609 (+) New Investments 15,426 (+/-) Change of Fixed Assets in Progress - AIC (8,851) (+) VNR Adjustment (i) 2,603 (-) Redemption (49) On June 30, 2019 447,738

(i) On June 30, 2019, Celesc D recognized the amount of R$2,603 related to the restatement of the financial asset of the electricity distribution concession at the New Replacement Value (VNR). Celesc D updates its Regulatory Remuneration Base - BRR, as of the 4th Cycle of Periodic Tariff Revision, by the IPCA in compliance with the Tariff Regulation Procedure - PRORET, Sub-module 2.3. b) Concession Assets - Power Generation Celesc G requested to the granting power, at the end of the concessions granted by Power Plants Bracinho, Cedros, Salto and Palmeiras, as indemnification, according to criteria and procedures for calculation established by Normative Resolution No. 596 of December 19, 2013, investments made in infrastructure and not depreciated in the concession period, as it has an unconditional right to be indemnified, as provided for in the agreement.

Consolidated 30 31 Investments in Plants June December

2019 2018 Bracinho Plant 85 85 Cedros Plant 195 195 Salto Plant 1,906 1,906 Palmeiras Plant 235 235 Total 2,421 2,421

15. RECOVERABLE TAXES

Parent Company Consolidated

Description 30

31

30

31

June December June December 2019 2018 2019 2018

PIS/COFINS (ICMS Exclusion Base Calculation) - - 1,075,627 - ICMS - - 49,529 44,461 PIS/COFINS - - 21,229 21,234 IRPJ/CSLL 1,607 1,600 74,272 16,195 Others 425 325 2,842 2,466 Total 2,032 1,925 1,223,499 84,356 Current 2,032 1,925 112,489 63,264 Non-Current - - 1,111,010 21,092

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The ICMS credits recoverable recorded in Non-current Assets derive from acquisitions of fixed assets and can be offset in 48 months. The balance of PIS and COFINS is composed mainly of higher payments related to a request for a preliminary injunction granted by the Federal Court regarding the process of recognition of involuntary exposure (Note 27). The IRPJ and CSLL balances are substantially comprised of amounts paid in advance and reductions in Source for income tax on financial investments and will be realized in the normal course of operations. On April 1, 2019, Celesc D obtained the final favorable decision from court, which recognized the right to recover the overpayments as PIS/COFINS due to the inclusion of ICMS in the calculation basis of taxes paid. The amounts paid to be credited to Celesc D correspond to the period from April 2007 to December 2014. Celesc D recognized the amount of R$1.075 billion of taxes to be recovered, restated in accordance with Brazilian Federal Revenue Service (RFB), solution 13/2018, in Other Non-Current Liabilities - Consumers. The Company is awaiting the qualification of credits by IRS to later offset them with taxes due and is still awaiting the definition by the regulatory agency ANEEL on the model of transfer to consumers. In addition, it should be noted that the Company filed another lawsuit claiming the return of the amounts from January 2015 onwards, pending a court decision. At the same time, it should be noted that extraordinary appeal 574706/PR addressing the matter in the scope of general repercussion, whose definition of the modulation of the effects of the decision is awaited by the Company. 16. RELATED-PARTY TRANSACTIONS The Company has a Related Party Transactions Policy, approved by the Board of Directors in 2018. Balances recorded in related parties in current and noncurrent assets and liabilities and changes in results for the period are as follows: a) The table below shows the changes in results for the period.

Parent Company Consolidated

Description Revenues Revenues Financial

Taxes/Deductions from Revenue

of Revenue Revenue from

Sales

Revenues Revenues Financial

Government of the State of SC: ICMS - 1,041,327 42,970 - Underground Network (i) 43 - - 43 On June 30, 2018 43 1,041,327 42,970 43 On June 30, 2019 Government of the State of SC: ICMS - 1,211,608 - - Revenue from Sales - - 48,256 - Underground Network (i) 19 - - 19 On June 30, 2019 19 1,211,608 48,256 19

b) The table below shows the Balances and Transactions in the period. Parent

Company Consolidated

Description

Others

Credits from related parties

Taxes to be collected

Taxes to recover

Accounts to be

Received for Sales

Other Credits

with Related Parties

Other Liabilities

with Related Parties

Government of the State of SC: ICMS - 156,601 44,461 - - - Accounts Receivable - - - 9,601 - - Underground Network (i) 2,604 - - - 2,604 - Rondinha Energética S.A.

Dividends - - - - 488 - Celos Contrib. Monthly, Health Plan, others - - - - - 15,763 On December 31, 2018 2,604 156,601 44,461 9,601 3,092 15,763 Government of the State of SC: ICMS - 137,817 49,529 - - - Accounts Receivable - - - 8,082 - - Underground Network (i) - - - - - - Rondinha Energética S.A. - - - - 488 - Dividends - - - - - - Celos Contrib. Monthly, Health Plan, others - - - - - 9,645

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On June 30, 2019 - 137,817 49,529 8,082 488 9,645 (i) Underground Network In 1995, the Company signed Agreement 007/1995, Technical Cooperation Agreement, with the State Government of Santa Catarina and the Florianópolis City Hall for the implementation of an underground electric energy grid in Florianópolis downtown. The Company received from the Shareholder, State Government of Santa Catarina, GAB/GOV Official Letter 67/2016, of June 23, 2016, authorizing the dividends from 2015, to be received by the shareholder for debt relief and also authorizes deducting the remaining balance in subsequent years until such debt is terminated. On June 25, 2019, Celesc held the right to R$2,623, and this right was settled with the first installment of dividends for 2018. c) Remuneration of Key Management Personnel The remuneration of administrators (Board of Directors - CA, Fiscal Council - CF, Statutory Audit Committee - CAE and Executive Board) is shown below:

Parent Company Consolidated

Description 30 30 30 30

June June June June 2019 2018 2019 2018

Administrators Fees 2,839 3,862 2,839 3,862 Share in Profits and/or Income 1,596 - 1,596 - Actuarial Liabilities - 102 - 102 Social Charges 672 685 672 685 Others 133 11 133 11 Total 5,240 4,660 5,240 4,660

17. INVESTMENTS IN SUBSIDIARIES, JOINTLY CONTROLLED AND ASSOCIATED COMPANIES

Parent Company Consolidated

Description 30 31

30

31

June December June December 2019 2018 2019 2018

Subsidiaries 1,548,188 1,443,925 - - Celesc D 1,053,188 981,299 - - Celesc G 495,000 462,626 - - Jointly controlled entities 90,185 82,746 90,185 82,746 SCGÁS 90,185 82,746 90,185 82,746 Affiliates 104,801 89,884 161,317 145,917 ECTE 74,717 60,739 74,717 60,739 DFESA 30,084 29,145 30,084 29,145 SPEs - - 56,516 56,033 Cubatão 3,353 3,353 3,353 3,353 (-) Provision for Loss in the Cubatão Investment

(3,353) (3,353) (3,353) (3,353)

Total 1,743,174 1,616,555 251,502 228,663 a) Information on Investments

Parent Company

Description

Thousands of Company’s Shares

Interest of Parent Co.

Shareholders’ Equity

Total Assets

Net Profit/(Loss) in

the Period/Fiscal

Year

Common Share Capital Capital

Voting

On December 31, 2018 Celesc D 630,000 100.00% 100.00% 981,299 8,900,025 121,510 Celesc G 43,209 100.00% 100.00% 462,626 665,427 51,242 ECTE 13,001 30.88% 30.88% 196,664 356,520 41,952 SCGÁS 1,827 17.00% 51.00% 268,672 497,765 (21,198) DFESA 153,382 23.03% 23.03% 126,549 134,141 43,369 Cubatão 1,600 40.00% 40.00% 1,566 5,739 (125) On June 30, 2019 Celesc D 630,000 100.00% 100.00% 1,053,188 9,958,773 71,889 Celesc G 43,209 100.00% 100.00% 495,000 679,456 34,808 ECTE 13,001 30.88% 30.88% 241,920 454,829 33,902 SCGÁS 1,827 17.00% 51.00% 316,750 533,072 48,078 DFESA 153,382 23.03% 23.03% 130,628 138,191 21,619 Cubatão 1,600 40.00% 40.00% 1,566 5,739 (125)

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Consolidated

Description

Thousands of Company’s Shares Company’s Share

Net Worth

Total of

Assets

Net Profit/(Loss) in the

Period/Fiscal Year

Common Share Capital Capital

Voting

On December 31, 2018 ECTE 13,001 30.88% 30.88% 196,664 356,520 41,952 SCGÁS 1,827 17.00% 51.00% 268,672 497,765 (21,198) DFESA 153,382 23.03% 23.03% 126,549 134,141 43,369 Cubatão 1,600 40.00% 40.00% 1,566 5,739 (125) Rondinha Energética S.A. 15,113 32.50% 32.50% 41,201 57,762 2,699 Painel Energética S.A. 4,745 32.50% 32.50% 5,660 5,661 (14) Campo Belo Energética S.A. 1,349 20.43% 20.43% 6,137 6,550 (17) Cia Energética Rio das Flores S.A. 8,035 26.07% 26.07% 46,542 61,780 6,472 Xavantina Energética S.A. 266 40.00% 40.00% 24,318 39,802 (1,300) Garça Branca Energética S.A. 22,228 49.00% 49.00% 36,255 65,845 (2,982) EDP Transmissão Aliança SC 1,300 10.00% 10.00% 15,860 1,444,585 3,909 On June 30, 2019 ECTE 13,001 30.88% 30.88% 241,920 454,829 33,902 SCGÁS 1,827 17.00% 51.00% 316,750 533,072 48,078 DFESA 153,382 23.03% 23.03% 130,628 138,191 21,619 Cubatão 1,600 40.00% 40.00% 1,566 5,739 (125) Rondinha Energética S.A. 15,113 32.50% 32.50% 40,238 56,958 (963) Painel Energética S.A. - 0.00% 0.00% 5,660 5,661 - Campo Belo Energética S.A. - 0.00% 0.00% 6,137 6,550 - Cia Energética Rio das Flores S.A. 8,035 26.07% 26.07% 49,861 63,185 3,481 Xavantina Energética S.A. 266 40.00% 40.00% 24,116 38,877 (201) Garça Branca Energética S.A. 22,326 49.00% 49.00% 35,270 63,846 (568) EDP Transmissão Aliança SC 2,650 10.00% 10.00% 34,382 1,390,693 7,740 b) Changes in investments

Parent Company

Description Celesc D Celesc G ECTE SCGÁS DFESA

Total

On December 31, 2018 981,299 462,626 60,739 82,746 29,145 1,616,555 Dividends and Credited JCP - (2,434) (3,401) - (4,040) (9,875) Amortization of the Right to Use Concessions - - - (734) - (734) Equity Income 71,889 34,808 11,120 8,173 4,979 130,969 Adjustment of Equity Valuation in Subsidiary - - - - - - Initial Adoption Adjustment CPC 47 (i) - - 6,259 - - 6,259 On June 30, 2019 1,053,188 495,000 74,717 90,185 30,084 1,743,174

(i)Net Effect of Initial CPC Adoption 47

Consolidated

Description ECTE SCGÁS DFESA SPEs Total

On December 31, 2018 60,739 82,746 29,145 56,033 228,663 Payments - - - 220 220 Dividends and Credited JCP (3,401) - (4,040) (309) (7,750) Amortization of the Right to Use Concessions - (734) - - (734) Equity Income 11,120 8,173 4,979 572 24,844 Adjustment of Equity in Subsidiary 6,259 - - - 6,259 On June 30, 2019 74,717 90,185 30,084 56,516 251,502

c) Acquisition of Concession Use Right The balance of the Concession Use Right generated in the acquisition of SCGÁS on June 30, 2019 is R$36,337 (R$37,072 on December 31, 2018). The Concession Use Right is amortized by the Concession Term of provision of public services by said company.

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18. PROPERTY, PLANT AND EQUIPMENT 18.1. Balance Composition

Consolidated

Description Lands Reservoirs,

Dams and Ducts

Buildings and Constructions

Machinery and Equipment Others

Construction in

progress (i)

Total

On December 31, 2018 3,879 12,519 29,844 83,039 550 30,235 160,066 Fixed Assets Cost 20,202 169,867 49,895 167,109 1,912 30,235 439,220 Provision for Losses (8,995) (25,445) (2,938) (6,589) 81 - (43,886) Accrued Depreciation (7,328) (131,903) (17,113) (77,481) (1,443) - (235,268) On December 31, 2018 3,879 12,519 29,844 83,039 550 30,235 160,066 Additions - - - - - 607 607 Gross Balance Settled - - - (93) - - (93) Depreciation Settled - - - 6 - - 6 Depreciation - (191) (382) (1,667) (55) - (2,295) (+/-) Transfers - - 35 3,565 - (3,600) - Reversal / Impairment Loss of Assets - - - - - - - On June 30, 2019 3,879 12,328 29,497 84,850 495 27,242 158,291 Fixed Assets Cost 20,202 169,867 49,930 170,587 1,798 27,242 439,626 Provision for Losses (8,995) (25,445) (2,938) (6,589) 81 - (43,886) Accrued Depreciation (7,328) (132,094) (17,495) (79,148) (1,384) - (237,449) On June 30, 2019 3,879 12,328 29,497 84,850 495 27,242 158,291 Average Depreciation Rate 0% 6.79% 2.18% 2.86% 12.51% 0.00%

(i) In the first half of 2019 the Company completed R$3,600 of ongoing projects, is scheduled for the third quarter of 2019 the activation of R$4,743. 18.2. Depreciation The average annual depreciation rates estimated for the current year are as follows:

Management Percentage (%) Buildings and Constructions 0.0 Machinery and Equipment 5.3 Vehicles 14.3 Furniture and Utensils 6.3

Generation Percentage (%) Buildings and Constructions 2.2 Machinery and Equipment 2.9 Reservoirs, Dams and Ducts 6.8 Vehicles 2.9 Furniture and Utensils 1.1

The linear depreciation method, shelf lives and residual values are reviewed at each financial year-end and any adjustments are recognized as changes in accounting estimates. The Garcia, Palmeiras, Salto Weissbach, Cedros and Bracinho Plants are depreciated based on the concession term defined in the agreement. The assets of Pery Plant, Celso Ramos SHP and Caveiras, Ivo Silveira, Piraí, São Lourenço and Rio do Peixe HGPs are depreciated at the rates established by ANEEL Resolution 674, of August 11, 2015, since they have a registration agreement. The investments made for expansion in the Celso Ramos, Garcia, Palmeiras, Salto Weissbach, Cedros and Bracinho Plants, which are susceptible to indemnification at the end of the concession, are also depreciated by the same Resolution. The assets of the Central Administration (Buildings and Constructions, Machinery and Equipment, Vehicles, Furniture and Utensils) are also depreciated by the rates established in the said Resolution.

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18.3. Fully Depreciated Property, Plant and Equipment Still in Operation The gross accounting amount of fixed assets that are fully depreciated and which are still in operation on June 30, 2019:

Consolidated

Description

30 31 June December 2019 2018

Reservoirs, Dams and Ducts 133,155 133,155 Buildings, Civil Works and Improvements 11,937 11,935 Machinery and Equipment 48,475 48,457 Others 14,003 14,003 Total 207,570 207,550

19. INTANGIBLE ASSETS Parent Company

Description

31 30

December Amortizations June

2018 2019 Goodwill Acquisition ECTE (i) 5,949 (251) 5,698

(i) The goodwill generated on the acquisition of ECTE is amortized by the Concession Term of provision of public services by said company.

Consolidated

Description

Contracts of

Use of the Good

Public

Concession

Celesc D (a) Software Purchased

Goodwill Celesc G (a) Servitude Range

Items in Progress Total

On December 31, 2018 3,287,592 1,510 5,949 - 70 1,435 3,296,556 Total Cost 4,981,357 6,495 14,248 - 70 1,435 5,003,605 Accrued Amortization (1,693,765) (4,985) (8,299) - - - (1,707,049) On December 31, 2018 3,287,592 1,510 5,949 - 70 1,435 3,296,556 Additions 207,446 - - - - 61 207,507 Settled (24,163) - - - - - (24,163) Amortizations (108,201) (378) (251) - - - (108,830) On June 30, 2019 3,362,674 1,132 5,698 - 70 1,496 3,371,070 Total Cost 5,164,640 6,495 14,248 - 70 1,496 5,186,949 Accrued Amortization (1,801,966) (5,363) (8,550) - - - (1,815,879) On June 30, 2019 3,362,674 1,132 5,698 - 70 1,496 3,371,070 Average Amortization Rate 0% 40% 0.9% 0% 0% 0% a) Concession Agreements The fees established by ANEEL are used in the tariff review processes, indemnification calculation at the end of the concession and are recognized as a reasonable estimate of the shelf life of the concession assets. Therefore, these rates were used as a basis for the evaluation and amortization of the intangible assets. 20. RESULT FROM LEGAL ENTITY INCOME TAX – IRPJ AND THE SOCIAL CONTRIBUTION ON NET PROFIT – CSLL a) Composition of Net Deferred IRPJ and CSLL

Deferred IRPJ and CSLL assets and liabilities were calculated based on: (i) Provision for contingencies of legal proceedings; (ii) ICPC 10 - Interpretation on the Initial Application to the Property, Plant & Equipment; (iii) CPC 01 (R1) - Impairment of Assets on Provision for Losses on Property, Plant & Equipment; (iv) CPC 33 (R1) - Benefits to Employee; (v) Adjustment to the fair value of the Property, Plant & Equipment, arising from the initial adoption of Technical

Pronouncement CPC 27 - Property, Plant & Equipment; (vi) CPC 39 - Financial Instruments in the recognition and measurement of the new remuneration value - VNR. (vii) Deferred taxes calculated on the Rebate Grant were calculated in accordance with RFB Regulatory Instruction 1.700, of March 14, 2017, issued by the Federal Revenue Service.

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The following table shows the balances of deferred IRPJ and CSLL accounts:

Consolidated

Description 30

June 2019

31 December

2018 Assets 715,182 712,532 Liabilities (14,737) (10,144) Net Deferred Tax 700,445 702,388

Consolidated

Deferred Assets Deferred Liabilities Net Deferred

30 31 30 31 30 31 Description June December June December June December

2019 2018 2019 2018 2019 2018 Temporary Differences

Provision for Contingencies 210,494 201,864 - - 210,494

201,864 Provision for Losses in Assets 83,856 84,337 - - 83,856

84,337

Post-Employment Benefit 563,949 573,409 - - 563,949

573,409 Cost Assigned - - 7,946 8,091 (7,946)

(8,091)

Effects of ICPC 01 - Concession Agreements - - 55,098 56,157 (55,098)

(56,157) Effects of CPC 39 - Financial Instruments - - 67,888 69,194 (67,888) (69,194) Concession Bonus - - 26,596 23,490 (26,596)

(23,490)

Other Provisions - - 326 290 (326)

(290) Total 858,299 859,610 157,854 157,222 700,445

702,388

b) Realization of Deferred Assets The IRPJ and CSLL tax base derives not only from the profit generated, but from the existence of non-taxable income, non- deductible expenses, tax incentives and other variables, without an immediate correlation between the Company's net profit and income tax and social contribution. Therefore, the expectation of the use of tax credits should not be taken as the only indicative of the Company's future results. The realization of deferred taxes is based on the budget projections approved by the Company's Board of Directors, with the purpose of defining and presenting actions necessary to meet regulatory demands, also converging to comply with the concession agreement. In compliance with CVM Instruction 371 from June 27, 2002, the Company's Management considers that the deferred assets arising from temporary differences will be realized, in proportion to the final resolution of the contingencies and the events to which they refer when they will be offset against the profits taxable. Deferred taxes on actuarial liabilities of employee benefits are being realized through the payment of contributions. The process of initial recognition of involuntary exposure by the regulatory body in the amount of R$256.6 million and updated to R$327.9 million on June 30, 2019 is in a lawsuit filed with the Federal Court and had their IRPJ and CSLL amounts deferred until a final judgment on the lawsuit is handed down. (Note 27). The realization of estimates for the balance of the total assets of June 30, 2019 are:

Consolidated

Year 30 31

June December 2019 2018

2019 86,087

95,517 2020 79,766

79,785

2021 66,764

66,804 2022 63,887

63,907

Over 2022 561,795

553,597 Total 858,299

859,610

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c) IRPJ and CSLL Reconciliation Recognized in the Net Worth The change in the Assigned Cost and the initial adoption of CPC 48 - Financial Instruments with IRPJ and CSLL amounts, recognized directly in the net worth, is shown below:

Consolidated Description Amount Balances on December 31, 2017 17,628 (-) Settled Assigned Cost (2,913) (+) Initial Adoption CPC 48 16,784 (-) Taxes (IRPJ/CSLL) (4,717) Balance on December 31, 2018 26,782 (-) Settled Assigned Cost (428) (+) Taxes (IRPJ/CSLL) 146 Balance on June 30, 2019 26,500

d) IRPJ and CSLL Reconciliation Recognized in other Comprehensive Results The changes in the Actuarial Liabilities with IRPJ and CSLL amounts, recognized directly in other comprehensive income, are shown below:

Consolidated Description Amount Balances on December 31, 2017 704,738 (+) Addition of Actuarial Liabilities 232,112 (-) Taxes (IRPJ/CSLL) (78,918) Balance on December 31, 2018 857,932 (+) Addition of Actuarial Liabilities - (-) Taxes (IRPJ/CSLL) - Balance on June 30, 2019 857,932

e) IRPJ and CSLL Current and Deferred Reconciliation The reconciliation of income tax and social contribution expenses, at the nominal and effective rates, is shown below:

Parent Company Consolidated

30 30 30 30 Description June June June June

2019 2018 2019 2018 Profit/(Loss) Prior to IRPJ and CSLL 119,124 140,211 191,293 234,079 Combined Nominal Rate of IRPJ and CSLL 34% 34% 34% 34% IRPJ and CSLL (40,502) (47,672) (65,040) (79,587)

Equity 44,530 52,487 8,447 2,396 Fiscal Benefit - - (42) (44) Fiscal Incentive - - 1,152 1,389 Non-deductible provisions 391 (359) 365 (359) Non-deductible Fines - - (4,444) (2,663) Unrecognized IRPJ/CSLL on Fiscal Loss (4,270) (4,445) (4,270) (4,445) Administrators Interest (150)

(11)

(173)

(35)

Non-Technical Losses - - (8,155) (10,586) Other Additions (Exclusions) 1 - (9) 66 Total Current and Deferred IRPJ and CSLL -

-

(72,169)

(93,868)

Current Income Tax and Social Contribution - - (70,226) (80,694) Deferred Income Tax and Social Contribution -

-

(1,943)

(13,174)

Effective Fee 0.00%

0.00%

37.73%

40.10% 21. TAXES AND SOCIAL CONTRIBUTIONS 21.1. Income Tax and Social Contribution Collectable

Parent Company Consolidated

Description 30

31

30

31

June December June December 2019 2018 2019 2018

IRPJ - - 52,596 12,236 Social Contribution - - 19,878 5,064 Total to Collect - - 72,474 17,300 (-) Taxes to be Offset (2,032) (1,925) (75,147) (16,696) Total (2,032) (1,925) (2,673) 604

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21.2. Other Taxes

Parent Company Consolidated

Description 30

31

30

31

June December June December 2019 2018 2019 2018

ICMS - - 137,817 156,601 PIS and COFINS 3 5 42,398 44,238 Others 92 81 4,710 5,758 Current 95 86 184,925 206,597 (-) Taxes to be Offset - - (72,725) (67,660) Total 95 86 112,200 138,937

22. SUPPLIERS

Parent Company

Description 30 31 June December

2019 2018 Employees Available 392 1,025 Materials and Services 48 67 Total 440 1,092

Consolidated

Description 30 31 June December

2019 2018 Electricity 470,284 456,897 Charges for Using the Electric Grid 86,115 82,303 Materials and Services 64,739 96,215 Employees Available 392 1,025 Electricity Trading Chamber – CCEE (i) 251,354 370,414 Total 872,884 1,006,854

(i) The CCEE has as one of its attributions, to determine the value of the accounting of agents. This value, in the case of the distributors, involves in addition to the sale and purchase in the short term, charges, effect of dispatch of thermals and also diverse impacts of hydrological risk. The hydrological risk in the case of the distributors is associated with the energy contracts (CCEAR-QT), contracts of physical guarantee quota and contract with Itaipu. Celesc D, even being a buyer, assumes the hydrological risk. There are also the price differences of LDPs in the submarkets that lead to impact on the TAJ_EF component, and lead to financial surpluses. It should be noted that all these events are offset by the financial asset - CVA and its variations do not impact the Company's results. 23. LOANS AND FINANCING Loans and Financings have four distinct classifications: a) Bank Loans, b) Eletrobras Loans and c) Finame-type loans and iv) Loans - BID, and are guaranteed, almost in their entirety, by receivables from Celesc D.

Consolidated

Description Interest Rate and Commissions (%)

30 June 2019

31 December

2018 Total - Domestic Currency 820,185 645,348 Bank Loans (i) 7.4% p.a. to 7.67% p.a. 150,268 301,122 Bank Loans (i) CDI + 1.25% and CDI + 1.3% 301,832 301,725 Bank Loans (i) CDI + 0.8% p.a. 336,591 - Eletrobras Loans (ii) 5% p.a. + 2% p.a. from manag. fee 7,857 14,865 Finame Loans (iii) 2.5% to 9.5% p.a. 23,637 27,636 Total - Foreign Currency 322,906 273,453 Loan - IDB (iv) CDI + 0.89% p.a. 322,906 273,453 1,143,091 918,801 Current

231,392 321,089

Non-Current

911,699 597,712 i) Bank Loans The Bank Loan balances refer to the contracting, whose resources were used exclusively for the purpose of working capital. In February 2018, Banco do Brasil contracted R$150 million through the Agroindustry Credit Line, with fixed interest of 7.67% p.a. and required monthly. The contract term is 12 months and its settlement is provided in a single installment at the end of its

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term (bullet), was carried out on the set maturity. Through Bank Credit Note, in April 2018, an additional R$150 million was contracted with Banco Safra, with fixed interest at 7.4% p.a. and required monthly. The contract term was of 12 months and its settlement was provided in a single installment at the end of its term (bullet). However, in April 2019, the contract was renegotiated, and the payment term was extended to another 12 months, with the bullet settled at the end of its term. In November 2018, R$100 million was contracted with Banco do Brasil through a Bank Credit Note, with remuneration at the rate equivalent to the CDI + 1.25% p.a. and required quarterly. The 24-month period is expected to be amortized in 4 quarterly installments, beginning in February 2020 and ending in November 2020. Also in November 2018 and through Bank Credit Note, R$200 million was contracted with Banco Safra, with remuneration at the rate equivalent to CDI + 1.3% p.a. and required monthly. The 36-month term has an 18-month grace period to begin amortization of the principal, expected to be settled in 18 monthly installments, beginning June 2020 and ending November 2021. At the end of the contracts classified as Bank Loans, in April 2019, an additional R$335 million was contracted with Banco Safra through a Bank Credit Note, with interest rate equivalent to the CDI + 0.8% p.a. and required monthly. The principal, grace period and settlement terms of the principal are identical to those described in the previous agreement, with the beginning of the amortization scheduled for November 2020 and the end for April 2022. ii) Eletrobras The resources of these contracts were intended, among other applications, to the rural electrification programs and come from the Global Reversal Reserve - RGR and of the Financing Fund of Eletrobras. In general, the contracts have a grace period of 24 months, amortization in 60 monthly installments, interest rate of 5% p.a., management fee of 2% p.a. and commission rate of 0.83%. All contracts have ANEEL's consent. iii) Finame The resources of these contracts were useful to cover some of Celesc D's insufficient resources and were used to purchase machinery and equipment. Each acquisition constitutes a contract, which were traded at interest rates ranging from 2.5% to 9.5% p.a. and with amortizations estimated for 96 monthly installments. All contracts have ANEEL's consent. iv) Inter-American Development Bank (BID) On October 31, 2018, Celesc D and Banco Interamericano de Desenvolvimento (BID) signed an external credit transaction called Loan 4404/OC-BR (BR-L1491), with two installments totaling eighty million, seventy-eight thousand, six hundred and thirty-one US dollars and five cents (US$80,078,631.05). The first release occurred on December 10, 2018 (US$ 70,374,302.95) and the second on January 28, 2019 (US$ 9,704,328.10). The total amount of the transaction is US$ 276,051,000.00 (two hundred and seventy-six million and fifty-one thousand US dollars) and the amortization period is of 234 (two hundred and thirty-four) months with a grace period of up to 66 (sixty-six) months, reaching a total term of 300 (three hundred) months. The amortization is semi-annual through the constant system and the interest rate is the 3-month libor (USD-LIBOR 3m), with monetary restatement calculated by the exchange rate change. In addition, there is a requirement for a commitment fee of up to 0.75% per annum on the undisbursed balance and a supervisory fee of up to 1% of the loan amount, divided by the number of semesters included in the original disbursement term 5 (five) years. The loan is guaranteed by the Federative Republic of Brazil and the State of Santa Catarina, and is intended for the partial financing of the Energy Infrastructure Investment Program within the jurisdiction of the Celesc D. On May 2, 2019, there was an option to convert the outstanding balance released so far, totaling US$80,078,631.05, and the interest rate applied to the agreement, which was now CDI + 0.89% p.a., during the entire term of the contract for this release, and there is therefore no exchange rate change incurrence.

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a) Breakdown of Maturities The amounts classified as non-current liabilities have the following composition, by year of maturity:

Consolidated

National Foreign Total 30 31 30 31 30 31 Description June December June December June December 2019 2018 2019 2018 2019 2018 Year 2020 - Q1 to Q2 - 66,239 - - - 66,239 Year 2020 - Q3 to Q4 158,068 120,846 - - 158,068 120,846 Year 2021 351,849 128,516 - - 351,849 128,516 Year 2022 79,107 4,663 - - 79,107 4,663 Year 2023 3,260 3,260 - - 3,260 3,260 Year 2024 1,139 1,139 15,895 13,634 17,034 14,773 Year 2025 364 363 302,017 259,052 302,381 259,415 Total 593,787 325,026 317,912 272,686 911,699 597,712

b) Movement of Loans and Financing - National Consolidated

Description Current Non-Current Total

Balance on December 31, 2018 320,322 325,026 645,348

Entries - 335,000 335,000

Provisioned Charges 32,850 - 32,850

Transfers 66,239 (66,239) -

Amortizations of Principal (160,984) - (160,984)

Payment of Charges (32,029) - (32,029)

Balance on June 30, 2019 226,398 593,787 820,185 c) Movement of Loans and Financing - Foreign

Consolidated BID Current Non-Current Total Balance on December 31, 2018 767 272,686 273,453

Entries

- 36,562 36,562

Monetary Update - 8,664 8,664

Provisioned Charges 9,141 - 9,141

Payment of Charges (4,914) - (4,914) Balance on June 30, 2019 4,994 317,912 322,906

24. DEBENTURES 24.1. FIRST DEBENTURES - Celesc D Celesc D issued, on May 15, 2013, 30,000 (thirty thousand) simple Debentures, not convertible into shares, in the nominal unit amount of R$ 10K, totaling R$ 300 million, due on May 15, 2019. The proceeds of this issuance were used exclusively, to increase working capital and carry out investments. The remuneration interest corresponds to 100% of the accumulated variation of the average daily rates of Interbank Deposits (DI), over extra-group, expressed as a percentage per year, based on 252 business days, calculated and published daily by CETIP, plus a surcharge or spread of 1.3%. The amortization was estimated in 3 consecutive annual installments as from May 15, 2017, each of R$100 Million, and the remuneration in semiannual and consecutive installments was provided with no grace period, as of November 15, 2013. The three amortization installments were paid in their respective maturities and R$181.7 million was paid as interest. Beginning in 2014, at the end of each fiscal year, the Company has a contractual commitment (covenant) related to the issuance of the Debentures not to present a Net Debt/EBITDA ratio above 2. Failure to comply with this financial indicator may entail the early due date of the total debt. On December 31, 2018, the Company was below this ratio indicator, therefore it complied with the covenant. 24.2. SECOND DEBENTURES - Celesc D On September 10, 2015, Celesc D issued 3,000 (three thousand) simple, non-convertible debentures with a par value of R$ 100

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thousand, totaling R$ 300 million, due on September 10, 2016. The proceeds of this issuance were also used exclusively, to increase working capital and carry out investments. The remuneration interest corresponded to 100% of the accumulated variation of the average daily rates of Interbank Deposits (DI), over extra-group, expressed as a percentage per year, based on 252 business days, calculated and published daily by CETIP, plus a surcharge or spread of 2.5%. The amortization was provided for in a single installment on maturity, and the remuneration in monthly and consecutive installments, without grace period, as of October 10, 2015. The contract was settled on maturity and payments of payment installments in the amount of R$ 47.4 million were made. 24.3. THIRD DEBENTURES - Celesc D Celesc D issued, on July 13, 2018, 250.000 (two hundred and fifty thousand) Simple Debentures, not convertible into shares, in the unit face value of R$ 1 thousand, totaling R$ 250 million, due on July 13, 2023. The proceeds of this issuance were used as an aid for the ordinary management of its business. The actual guarantee is the assignment in trust of existing and/or future receivables arising from the gross electricity supply to Celesc D's customers and Celesc will provide surety in favor of the Debenture holders, being obligated as a guarantor and principal payment of all due amounts under the Deed of Issuance. The Debentures will have a five (5) year term as of the date of issuance, so that they expire on July 13, 2023; with a remuneration of interest corresponding to 100% of the cumulative variation of the daily average rates of DI or ID – Interbank Deposits of one day, plus a surcharge or spread of 1.9% per year. The amortization was scheduled in 15 consecutive quarterly installments, always on the 13th of January, April, July and October, starting on January 13, 2020 and the last one on the due date. The remuneration will occur in quarterly and consecutive installments, without a grace period, as of October 13, 2018. Until June 30, 2019, R$13.7 million in interest payments were paid. As of December 31, 2018, the Company has a contractual commitment (covenant) related to the issuance of the Debentures not to present a Net Debt/EBITDA ratio of more than 2.5. Failure to comply with this financial indicator may entail the early due date of the total debt. On December 31, 2018, the Company was below this ratio indicator, therefore it complied with the covenant. 24.4. FIRST DEBENTURES - Celesc G On March 03, 2016, the first issuance of Debentures of Celesc G took place. The total amount of the issuance was R$ 150 million in a single series, consisting of 15,000 (fifteen thousand) Debentures with a nominal unit value of R$ 10 thousand. The Debentures are simple, not convertible into shares, unsecured and with an additional fiduciary guarantee. Are nominative and book-entry, without the issuance of caution or certificates. At the General Meeting of Debenture Holders, held on March 1, 2018, the change in the due date of these Debentures from March 3, 2018 to June 1, 2018 was approved. The interest rate for the period from the first maturity (inclusive) up to the new due date (exclusive) was 100% of the accumulated variation of the DI Over Rate, plus a spread of 2.5% per year (based on 252 business days). Additionally, the Debenture Holders was paid with a prize in the amount of R$ 6.66 (six reais and sixty-six cents) per debenture. The issuance of these Debentures was fully settled on maturity, and during their term, R$ 44.4 million were paid as charges. 24.5. SECOND DEBENTURES - Celesc G Celesc G had its second issue of Debentures on June 1, 2018, in a single series, simple, not convertible into shares, totaling R$ 150 million. Fifteen thousand (15,000) Debentures were issued with a par value of R$10 thousand and should not be monetarily restated. The actual guarantee was set as an assignment in trust of present and/or future receivables arising from the gross electricity supply to Celesc G's customers and a guarantee was set as the trust in favor of the Debentures owners, undertaking the role of guarantor and principal payment of all amounts due under the deed of issuance. The Debentures have a term of five (5) years from the date of issue, i.e. June 1, 2023. Remuneration interest correspond to 100% of the cumulative variation of the average daily rates of DI or ID – Interbank Deposits of one day, plus a surcharge or spread of 2.5% per annum, until the effective payment date. The amortization occurs as of 12th month (inclusive), counted from the issuance date, in quarterly and consecutive installments, with R$13.1 million were paid as charges up to June 30, 2019

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On a semi-annual basis, Celesc G has a contractual commitment (covenant) related to the issuance of the Debentures not to present a Net Debt/EBITDA ratio of more than 2. Failure to comply with this financial indicator may entail the early due date of the total debt. As of December 31, 2018, there was a ratio below this index, thus fulfilling this obligation. a) Debenture Operation Consolidated

Description Total

On December 31, 2018 501,262 Entries - Monetary Update 19,219 Payments of Charges (20,768) Principal Payment (108,843) Costs to Issue Celesc D Debentures 725 Costs to Issue Celesc G Debentures 245 On June 30, 2019 391,840 Current 72,607 Non-Current 319,233

b) Costs in the Collection of Debentures to be Owned

Consolidated 30 Description June 2019 Year 2019: 1T/2019 - 2T/2019 - 3T/2019 279 4T/2019 279 Year 2020: 1T/2020 278 2T/2020 278 3T/2020 279 4T/2020 279 Year 2021 to 2023: 2,752 Total 4,424

c) Reconciliation of Liabilities Resulting from Financing Activities

Parent Company Description Balance Dividends and JCP (i) as of December 31, 2018 39,524 Payments - Changes in the Financing Flow (16,945) Non-Cash Variations (2,650) Balance Dividends and JCP (i) as of June 30, 2019 19,929

Consolidated

Description December

31, 2018

Admission of

Resources Principal Payment

Total Changes in the Financing Flow

Payment Interest (ii)

Changes not

affecting cash (i)

30 June 2019

Loans and Financing 918,801 371,562 (160,984) 210,578 (36,943) 50,655 1,143,091 Debentures 501,262 - (108,843) (108,843) (20,768) 20,189 391,840 Dividends and ISE 39,524 - (16,945) (16,945) - (2,650) 19,929 Total 1,459,587 371,562 (286,772) 84,790 (57,711) 68,194 1,554,860

(i) Provision for Loans and Financing totaled R$50,655. The Debentures totaled R$20,189, of which R$970 was related to the costs with debentures incurred in first half of 2019. (ii) Interest paid is classified in the Operating Activities flow in the Statement of Cash Flow.

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25. LABOR AND SOCIAL SECURITY DUTIES Parent Company

Consolidated a) Incentivized Dismissal Plan - PDI Through Resolution 15, from February 22, 2016, Celesc D approved the regulation of Incentivized Dismissal Plan (PDI). This program was implemented for the first time in December 2016, with the adherence and dismissal of 62 employees and a cost of approximately R$ 16 million. In the PDI 2017, 122 employees were dismissed until December 2017. This edition of 2017 continued with the disconnections until the month of June 2018, where the total number of dismissals reached 188 (6% of the current effective staff), with a total actual cost of R$69.2 million. The 2018 PDI will carry out dismissals until July 2019, and by June 2019, 256 dismissals were carried out, at a total cost of around R$92 million. Continuing the planning of dismissals, Celesc has already opened applications for the 2019 edition of the dismissal program, which has over 600 employees enrolled. Registrations still need to be approved by the company’s Board of Directors, and the plan budget also needs to be authorized. This program is part of Celesc D's strategy to adjust its operating costs, optimize processes and improve indicators with a view to aggregating value to shareholders. 26. REGULATORY FEES Consolidated (i) ANEEL, through Resolutions No. 2.231 from April 25, 2017, No. 2.510 from December 18, 2018 and No. 2.521 from March 20, 2019, ratified the quotas of CDE Use, CDE Energy and CDE Energy (ACTA-ACR), as shown below: (ii) The other account is composed of the Financial Compensation for the Use of Water Resources – CFURH, the Electric Energy System Inspection Fee – TFSEE.

Description 30

June 2019

31 December

2018 Current 771 749 Provision of Vacations and Social Charges 458 388 Net Payroll 313 361 Total 771 749

Description 30

June 2019

31 December

2018 Current 188,813 208,503

Provision of Vacations and Social Charges 121,535 118,026 PDI (a) 52,548 66,062 Consignments in Favor of Third Parties 4,201 10,126 PLR Provision 10,016 13,847 Net Payroll 513 442

Non-Current 50,412 46,988 PDI (a) 50,412 46,988 Total 239,225 255,491

Description 30

June 2019

31 December

2018 Energy Efficiency Program - PEE or EEP 188,634 177,217 Emergency Capacity Charge - ECE or ECC 19,478 19,478 Charge Bill Level 6,483 7,055 Research and Development – R&D 103,436 100,399 Energy Development Account – CDE (i) 1,796,980 2,069,926 Use of Public Property - - Other (ii) 1,270 1,200 Total 2,116,281 2,375,275 Current 1,995,825 2,269,327 Non-Current 120,456 105,948

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Consolidated

Description CDE Energy (ACR ACCOUNT) CDE USE CDE ENERGY

April 2019 to August 2019 34,561 - - August 2018 to March 2019 - - 23,134 January 2019 to March 2019 - 65,447 - April 2019 to December 2019 - 88,581 -

The Board of Directors authorized the signing of the Debt Settlement Agreement with the Social Fund of the Energy Development Account (CDE) between Celesc D and the Electricity Trading Chamber (CCEE), whose balance due on June 30, 2017, reflecting accounts of amounts owed and credits receivable, was R$ 1,164,387. As of June 30, 2019, this balance was R$266,066. The assets and liabilities related to the installment payment of CDE are shown below: Consolidated

CDE Installments 30

June 2019

31 December

2018 Subsidy Decree 7891/2013 1,457,680 1,457,680 Low Income Program 38,673 38,673 CDE payable (1,762,419) (2,012,487) Total (266,066) (516,134)

The uncontroversial portion of the monetary restatement of the balances receivable and payable defined in the Installment Agreement, generated on June 30, 2017, respectively, a financial income of R$ 9,433 and a financial expense of R$ 179,481, resulting in a negative net amount of R$ 170,048. In the fiscal year 2017, the net financial result was R$213,608 and in 2018, it was R$ 46,331 and, in the first half of 2019 was of R$11,752. The debit balance is being paid in thirty (30) monthly installments, equal and consecutive, in the amount of R$ 38,877, with an interest equivalent to the Selic rate. The first due date was set for July 26, 2017 and the remaining for the 10th of subsequent months. Until June 30, 2019 Celesc D paid R$999,964: R$933,056 in principal and R$66,908 in interest. 27. PROVISION FOR CONTINGENCY AND JUDICIAL DEPOSITS At the dates of the Financial Statements, the Company presented the following liabilities, and corresponding judicial deposits related to contingencies: a) Probable Contingencies

Parent Company Judicial Deposits Provision for Risks 30 31 30 31 Description June December June December 2019 2018 2019 2018 Tax 2,117 2,117 1,263 1,263 Labor 4,112 3,207 41 41 Civil 8,338 6,172 203 147 Regulatory 8,182 8,182 2,983 5,174 Total 22,749 19,678 4,490 6,625

Consolidated Judicial Deposits Provision for Risks 30 31 30 31 Description June December June December 2019 2018 2019 2018 Tax(i) 3,752 3,745 9,657 9,626 Labor (ii) 57,125 53,083 68,013 65,850 Civil (iii) 96,021 64,262 152,935 136,359 Regulatory (iv) 49,265 49,260 435,536 425,687 Environmental (v) - - 2,054 2,051 Total 206,163 170,350 668,195 639,573

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The operations in provisions and deposits are shown below:

Parent Company Consolidated

Description Deposits Provision for Deposits Provision for Judicial Risks Judicial Risks

On December 31, 2018 19,678 6,625 170,350 639,573 Constitution 3,167 56 79,927 51,373 Financial Update - - - 12,040 Settled (96) (2,191) (44,114) (34,791) On June 30, 2019 22,749 4,490 206,163 668,195

The Company is a party involved in labor, civil, tax and regulatory proceedings in progress, and is discussing these issues at both the administrative and judicial levels. These lawsuits, when applicable, are supported by judicial deposits. Provisions for possible losses arising from these processes are estimated and updated by the management, supported by the opinion of its internal and external legal advisors. The nature of the probable contingencies can be summarized as follows: i) Tax Contingencies They are related to tax contingencies in the federal sphere (related to PIS, COFINS, IRPJ, CSLL and social security taxes) and municipal taxes (related to the ISS). ii) Labor Contingencies These are related to complaints filed by employees and former employees of the Group and companies that provide services (outsourced) related to overtime pay issues, mainly those related to breaches of intrajourney and interjourney intervals, as well as to a revision of the calculation basis of salary, additional fees, severance pay, among other labor rights. iii) Civil Contingencies They are related to civil actions in general, with the purpose, in sum, of compensation for damages (material and/or moral) arising from: undue suspension of electricity supply, registration of consumer names with credit protection agencies, electrical damages caused by loss of production (smoking, chickens), accidents involving third parties. There are, in the same way, other types of demands that generate the payment of amounts by the Electric Power Concessionaire: billing review, tariff reclassification, revision of bidding agreements (economic and financial rebalancing), public bidding, among others. iv) Regulatory Contingencies Regulatory contingencies are associated with notifications made by ANEEL, ARESC or CCEE in punitive administrative proceedings arising from events that have already occurred, the settlement of which may result in the delivery of funds for contractual or regulatory violations of the electricity sector. Regulatory contingencies are also legal proceedings in which the Celesc D discusses with other sector agents (concessionaires for generation, trading, transmission or distribution of electric energy, in addition to institutional agents such as ANEEL, CCEE, ONS, EPE and MME) sectorial regulation. The most significant regulatory contingency refers to the subcontracting of energy in 2014, whose financial impacts were not included by ANEEL in the Tariff Review of Celesc D, which occurred in August 2016, before a judicial measure filed by the company. The company, seeking to preserve its rights, filed a lawsuit with the Federal Court of the Federal District, requesting an injunction so that the decision of the regulating body contained in the Order in 2078/16 be reviewed. At the request of Celesc D, the Judge of the 6th Federal Court of Justice, granted the request for urgent relief, in order to determine the suspension, until a further determination of the Court. Accordingly, Celesc D recognized R$ 256,601 in the result of June 2016, of which R$ 225,029 was a reduction of Gross Operating Revenue and R$ 31,572 as Financial Expenses, and the balance of the Financial Liabilities (Current), arising from the difference determined by the regulatory body. In June 2017, Celesc D reclassified the amount of R$ 256,601 of the Current Liabilities to Regulatory Contingency Provision, considering it to be a judicial measure. In December 2018 the amount was restated to R$317,631 and in June 2019 the amount was restated to R$327,880. This issue is still under discussion in the judicial sphere.

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The judge in charge of the case that discusses the 2014 contract exposition, after examining ANEEL's statement regarding the arguments presented by Celesc D, decided to maintain the injunction previously granted. Recently, a judgment of merit was issued, which is still pending publication. Sequentially, Celesc D will bring in the necessary resources to maintain the deferred injunction and meritorious discussion of the action. Another relevant process refers to amounts to be transferred to the Union as an Emergency Capacity Charge (ECE). As of June 30, 2019, the amount provisioned was of R$72,422. v) Environmental Contingencies These are cases related to judicial discussions regarding the payment of material and moral damages, due to an environmental accident that occurred in the concession area of Celesc D. b) Possible Contingencies The Company also has tax, labor, civil, regulatory and environmental lawsuits, involving the risk of loss classified by the management as possible, based on the assessment of its legal advisors, for which there is no provision made, according to the composition and estimate below: The nature of possible contingencies can be summarized as follows:

Consolidated

30 31 Description June December 2019 2018 Tax(i) 311,229 311,229 Labor (ii) 13,120 12,524 Civil (iii) 242,710 199,603 Regulatory (iv) 147,372 144,322 Environmental (v) 47,262 47,247 Total 761,693 714,925

i) Tax Contingencies These are related to tax contingencies at the federal level, related to the collection of PIS, COFINS, Legal Entity Income Tax (IRPJ) and Social Contribution on Net Profit – CSLL. On September 24, 2018, the Special Office of the Brazilian Federal Revenue Service (SERFB) started the Tax Proceeding 0900100-2018-00117-1 of this procedure on January 8, 2019, which resulted in the Notice of Infringement 10980.727742/2018- 81 in the amount of R$306.8 million. Said Notice of Infringement is related to the calculation of the taxable income and the CSLL calculation basis, thus imputing to the concessionaire: a) Undue adjustments attributed to the Variation Compensation Account of Installment A - CVA Items; b) Failure to comply with the remaining term of the concession agreement for the purposes of the determinations provided for in article 69 of Federal Law 12973/2014. After the analysis of the Management of the process that is in the administrative scope was classified as possible, because the elements and data presented were not sufficiently substantiated in doctrine or in judicial decisions favorable to the tax entity. ii) Labor Contingencies Most of these are related to complaints filed by employees and former employees of the Group and companies that provide services (outsourced) related to issues of subsidiary/joint liability, overtime, severance pay, and other labor rights.

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iii) Civil Contingencies They are related to several civil actions filed by individuals and legal entities, related to indemnification issues caused by material damages, moral damages and loss of profits, accident, bidding processes and others. iv) Regulatory Contingencies Regulatory contingencies are associated with notifications made by ANEEL, ARESC or CCEE in punitive administrative proceedings that imply fines for breaching contractual or regulatory estimates of the electric sector, where the Company appealed at the administrative and judicial levels. At the same time, regulatory contingencies are the legal actions in which the Company discusses with sector agents (other concessionaires of generation, trading, transmission or distribution of electric energy, in addition to institutional agents such as ANEEL, CCEE, ONS, EPE and MME) to the application of electricity sector regulation. v) Environmental Contingencies They are related to administrative and judicial environmental contingencies filed by individuals and legal entities, consisting mainly of indemnification for material damages, moral damages and loss of profits. 28. ACTUARIAL LIABILITIES

Consolidated 30 31

Registered Duties June December 2019 2018 Social Security Plans 985,147 1,024,255 Transitory Mixed Plan (a) 985,147 1,024,255 Other Benefits to Employees 975,076 980,718 Celos Saúde Agreement (b) 921,089 926,828 Other Benefits (c) 53,987 53,890 Total 1,960,223 2,004,973 Current 159,291 162,776 Non-Current 1,800,932 1,842,197

Celesc D is a sponsor of the Celosc Social Security Foundation - Celos, a closed non-profit private pension fund entity, whose main objective is the management of social security benefit plans for its participants basically represented by employees of Celesc D. a) Social Security Plans The Mixed Plan has defined benefit characteristics for the mathematical reserve portion already existing at the transition date and for the benefits granted, and defined contribution characteristics for the post-transition contributions related to the scheduled retirement benefits to be granted. The previous defined benefit plan, called the "Transitional Plan", continues to exist, exclusively covering retired participants and their beneficiaries. Of the total amount recognized, R$ 461.0 million refers to the debt agreed with Celos on November 30, 2001, for payment of 277 additional monthly contributions, with an interest rate of 6% per annum and updated by the IPCA to cover actuarial liability of the Mixed and Transitory Plan. Since this debt should be paid even in the event of a Celos surplus, Celesc D recorded as of 2015 the monetary restatement and interest as a financial result, based on the Accounting Manual of the Electric Sector. b) Celos Healthcare Agreement Plan Celesc D offers health insurance (medical, hospital and dental care) to its active employees, retirees and pensioners. c) Other Benefits These are amounts referring to deficient aid, funeral aid, compensation for natural or accidental death and minimum benefit to the retiree.

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28.1. Actuarial Assessment Results a) Actuarial Obligations

Consolidated

Description Mixed Plan Transitory Plan

Celos Saúde Agreement

Savings Plan Other Benefits Total

Balance December 31, 2017 1,870,974 775,955 700,111 8,715 45,869 3,401,624 Cost of Current Net Service

(47,069) (21,957) (23,466) - - (92,492)

Participant Contributions Accomplished in the Period

22,644 17,589 31,291 - - 71,524 Interest on Actuarial Duty

141,930 73,862 59,481 862 4,595 280,730

Benefits Paid in the Fiscal Year

(156,827) (80,178) (81,963) (291) (4,660) (323,919) Gains/(Losses) on Actuarial Obligations

259,183 (70,182) 272,259 (7,265) 8,086 462,081

Balance December 31, 2018 2,090,835 695,089 957,713 2,021 53,890 3,799,548 b) Determination of Net Liabilities (Assets)

Consolidated

Description Mixed Plan Transitory Plan Celos Saúde Agreement Savings Plan Other

Benefits Total

Liabilities (Assets) on December 31, 2017 683,975 495,873 652,231 30 45,869 1,877,978 Fair Value of Assets at the End of the Period (1,440,573) (321,096) (30,885) (9,655) - (1,802,209) Actuarial Obligations at the End of the Period 2,090,835 695,089 957,713 2,021 53,890 3,799,548 Effect of Asset Ceiling and Additional Liabilities End of End of the Period - - - 7,634 -

7,634

Liabilities (Assets) on December 31, 2018 650,262 373,993 926,828 - 53,890 2,004,973 c) Reconciliation of the Assets Fair Value

Consolidated

Description Mixed Plan Transitory Plan Plan Celos Saúde

Plan Savings Plan Total

Balance December 31, 2017 1,186,999 280,082 47,880 8,685 1,523,646 Benefits Paid in the Period Using the Plan Assets

(156,827) (80,178) (81,963) (291) (319,259)

Contributions from Participants Made in the Period

22,644 17,589 31,291 - 71,524 Employer Contributions Accomplished in the Period

66,730 59,736 40,716 - 167,182

Expected Return on Assets

90,044 26,660 - - 116,704 Gain/(Loss) in the Fair Value of Assets of the Plan 230,983 17,207 (7,039) 1,261 242,412 Balance December 31, 2018 1,440,573 321,096 30,885 9,655 1,802,209

d) Costs Recognized in the Statement of Income for the Period

Consolidated

Description 30

June 2019

30 June 2018

Transitory Plan 8,397 12,622 Mixed Plan 17,950 2,408 Medical Care Agreement 16,705 18,007 Others 2,414 2,729 Total 45,466 35,766 Personnel Expenditure 23,881 14,807 Financial Expenditure 21,585 20,959 Total 45,466 35,766

e) Estimated Expenditure for the 2019 Fiscal Year The estimated expenditure for the 2019 financial year is shown below:

Plans

Expenses to be Recognized in 2019

(Re-submitted) Transitory Plan 16,793 Mixed Plan 35,901 Savings Plan 117 Medical Care Agreement 33,410 Others

4,711

Total

90,932

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f) Changes in Actuarial Liabilities

Consolidated Description Transitory/Mixed Plan Celos Saúde

Agreement Other Benefits Total

Balance on December 31, 2018 1,024,255 926,828 53,890 2,004,973 Payment (65,455) (22,444) (2,317) (90,216) Provision 26,347 16,705 2,414 45,466

Balance on June 30, 2019 985,147 921,089 53,987 1,960,223 28.2. Equating a Deficit Related to the Social Security Plan The Board of Directors, at a meeting held on January 26, 2018, approved the Plan for the adjustment of the technical deficit in the Joint Social Security Plan administered by Celos, by collecting extraordinary contributions from the Active and Assisted Participants and from the Celesc D Sponsor, as follows: Joint Plan: of the total amount of R$ 363.0 million, from November 2017, the Sponsor will bear 50%, that is, R$ 181.5 million, amortized on a monthly basis as from March 2018, for the term of 16 (sixteen) years, adjusted by the actuarial target (IPCA + 5.13% p.a.). It should be noted that these deficits are already reflected in the total liabilities recorded as Actuarial Liabilities in the Balance Sheet of Celesc D, as well as in the costs recognized monthly as Actuarial Expenses, according to the Annual Actuarial Assessment of Employee Benefits, drawn up by actuaries in compliance with CVM Deliberation 695/2012 and CPC 33 (R1). It is also worth mentioning that the referred Plan of Equationing, can be annually revised according to the verified results. 29. SHAREHOLDERS’ EQUITY a) Share Capital The Company's paid-in and subscribed share capital is R$ 1,340,000,000.00, represented by 38,571,591 nominative shares, with no par value, of which 15,527,137 are ordinary shares (40.26%), with voting rights and 23,044,454 preferred shares (59.74%), also nominative. Preferred shares have a priority in the receipt of 25% non-cumulative dividends. b) Valuation adjustments to equity The table below shows the net effect in the amount of R$842,508 on June 30, 2019 and R$842,226 on December 31, 2018, in Shareholders' Equity: Consolidated

Adjustment of equity valuation 30

June 2019

31 December

2018 Cost Assigned – Celesc G 15,424 15,706 Actuarial Liabilities Adjustment – Celesc D (CPC 33) (857,932) (857,932)

Total (842,508) (842,226) The Attributed Cost, measured at fair value at the date of the initial adoption of the CPCs in 2009, was recognized in the Equity Assessment Adjustment, in Net Worth, net of Deferred Income Tax and Social Contribution, as a counter-entry to Property, Plant and Equipment. Its realization is recorded as a counter-entry to the Retained Earnings account to the extent that the depreciation of the fair value of fixed assets is recognized in the income statement. c) Basic and diluted earnings per share The calculation of Basic and diluted profit per share as of June 30, 2019 and 2018 was based on the net income for the period and the weighted average number of common and preferred shares outstanding during the periods presented. As of June 30, 2019 and 2018, the Company's shares were unchanged. During this period, there were no transactions involving ordinary shares or potential common shares between the balance sheet date and the date of completion of the Quarterly Information. During the periods of June 30, 2019 and 2018, the Company did not have any convertible instruments in stock that would have a dilutive impact on profit/(loss) per share.

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d) Composition of Basic and Diluted Profit

Parent Company

Description 30

June 2019

30 June 2018

Weighted average number of shares (thousands) Ordinary Nominative Shares - ON 15,527 15,527 Preferred Nominative Shares - PN 23,044 23,044 Basic and Diluted Profit per Share Assigned to Company Shareholders (R$) Ordinary Nominative Shares - ON 2.9143 3.4302 Preferred Nominative Shares - PN 3.2057 3.7732 Basic and Diluted Profit Assigned to the Company's Shareholders Ordinary Nominative Shares - ON 45,250 53,261 Preferred Nominative Shares - PN 73,874 86,950 119,124 140,211

e) Legal Reserve and Profit Retention Reserve The Legal Reserve is constituted annually as a 5% allocation of Net Income for the Year and may not exceed 20% of the Share Capital. The Legal Reserve aims to ensure the integrity of the Share Capital and can only be used to offset losses and increase capital. The Profit Retention Reserve refers to the retention of the remaining balance of Retained Earnings in order to meet the business growth plan established in its investment plan, in accordance with the capital budget approved and proposed by the Company's administrators, to be deliberated at the Shareholders' General Meeting. 30. INSURANCE Insurance coverage on June 30, 2019 was contracted at the amounts shown below, which are in accordance with the insurance policies:

Consolidated Company Field Covered Assets Validity Insured (i)

Celesc D Warranty Insurance Concessionaire Goods and Rights December 29, 2017 to December 31, 2019 300,000 Celesc D Named Risks Substations May 14, 2019 to May 14, 2020 25,000 Celesc G Fire/Lightning/Explosion Plants and Substations August 8, 2018 to August 8, 2019 24,272 Celesc G Aircraft Fall Plants and Substations August 8, 2018 to August 8, 2019 12,136 Celesc G Gale Plants and Substations August 8, 2018 to August 8, 2019 12,136 Celesc G Electrical Damage Plants and Substations August 8, 2018 to August 8, 2019 24,272

(i) The assumptions and risks adopted, given their nature, are not part of the scope of an audit of the Financial Statements, therefore they were not examined by our independent auditors.

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31. INFORMATION BY BUSINESS SEGMENT The management has defined the Company's operating segments, based on the reports used to make strategic decisions, reviewed by the Executive Board. The presentation of the segments is consistent with the internal reports provided to the Company's Executive Board, responsible for allocating resources and evaluating the segments' performance. The information by business segment, as reviewed by the Executive Board for the years ended on June 30, 2019 and 2018, is as follows:

June 30, 2019

Description Parent Company Celesc D Celesc G Consolidation Adjustments Total

Net Operating Revenue – ROL or NOR - 3,842,383 74,586 (2,627) 3,914,342 Sale Cost - (3,414,512) (15,821) 2,627 (3,427,706) Gross Operational Income - 427,871 58,765 - 486,636 Expenses with Sales - (120,217) 1,953 - (118,264) General and Administrative Expenses (13,467) (161,559) (7,178) - (182,204) Other Net Revenues/Expenses 1,149 35,560 (318) - 36,391 Equity Income 130,969 - 572 (106,697) 24,844 Activity Income 118,651 181,655 53,794 (106,697) 247,403 Financial Revenues 511 128,182 5,386 (4,028) 130,051 Financial Expenses (38) (183,437) (6,714) 4,028 (186,161) Net Financial Income 473 (55,255) (1,328) - (56,110) Profit before IRPJ and CSLL 119,124 126,400 52,466 (106,697) 191,293 IRPJ and CSLL - (54,511) (17,658) - (72,169) Net Income for the Period 119,124 71,889 34,808 (106,697) 119,124 Supplementary Information Total Assets 1,952,197 8,883,146 679,456 Total Liabilities 25,931 7,829,958 184,456

June 30, 2018

Description Parent Company Celesc D Celesc G Consolidation

Adjustments Total

(Re-submitted) Net Operating Revenue – ROL or NOR - 3,682,409 71,948 (2,401) 3,751,956 Sale Cost - (3,253,663) (20,531) 2,401 (3,271,793) Gross Operational Income - 428,746 51,417 - 480,163 Expenses with Sales - (105,997) (415) - (106,412) General and Administrative Expenses (13,775) (129,455) (5,950) - (149,180) Other Net Revenues/Expenses (1,055) 39,485 (119) - 38,311 Equity Income 154,373 - 453 (147,778) 7,048 Activity Income 139,543 232,779 45,386 (147,778) 269,930 Financial Revenues 697 78,030 3,977 (2,106) 80,598 Financial Expenses (29) (111,450) (7,076) 2,106 (116,449) Net Financial Income 668 (33,420) (3,099) - (35,851) Profit before IRPJ and CSLL 140,211 199,359 42,287 (147,778) 234,079 IRPJ and CSLL - (79,742) (14,126) (93,868) Net Income for the Period 140,211 119,617 28,161 (147,778) 140,211 Supplementary Information Total Assets 1,987,091 8,251,069 648,091 Total Liabilities 18,772 7,089,610 196,376

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31.1. Consolidated Operational Revenue

30 30 Description June June 2019 2018 Gross Operational Revenue – ROB or GOR 6,451,339 6,105,849 Electricity Supply (a) 3,542,972 3,325,603 Unbilled sales 8,250 (15,306) Electricity Supply (a) 244,994 178,996 Unbilled supply (687) 6,812 Electric Grid Availability (i) 2,095,451 1,572,383 VNR Update 2,603 2,328 Financial Revenue (a) 22,331 22,574 Service Provision Income 1,435 1,243 Short-Term Electricity 299,180 143,112 Revenue from Regulatory Assets and Liabilities (416,673) 282,459 Other Operating Revenues 8,632 6,735 Donations and Subventions (ii) 394,826 382,221 Construction Revenue 248,025 196,689 Gross Operating Revenue Deductions (2,536,997) (2,353,893) ICMS (1,211,608) (1,041,327) PIS (102,087) (97,320) COFINS (470,223) (448,262) Energy Development Account – CDE (EDA) (712,934) (696,215) Research and Development – R&D (18,482) (17,861) Energy Efficiency Program – PEE (EEP) (18,024) (17,456) Surveillance Rate – ANEEL (3,621) (3,450) Comp. Financ. Use of Water Resources – CFURH (590) (516) Other Charges (Tariff Level) 572 (31,486) Net Operating Revenue – ROL or NOR 3,914,342 3,751,956

(i) In compliance with the Accounting Manual for the Electric Sector - MCSE, approved by Normative Resolution No. 605/2014, Celesc D segregated TUSD's revenue from Captive Consumers for Electric Power Supply for Electric Network Availability. (ii) Amount passed on by Eletrobras, referring to the reimbursement of discounts on the tariffs applicable to users of the public electricity distribution service. The amount of revenue accounted for as CDE Subsidy (Decree No. 7,891/13) in the first half of 2019 was R$320,875. The others refer to the Low-Income Program in the amount of R$5,411 and CCRBT Level Supply in R$23,255. a) Electricity Supply and Provision The composition of the Gross Revenue of electricity supply and provision, by class of consumers, is as follows:

Number of Consumers (i) MWh (i) Gross Revenue 30 30 30 30 30 30 Description June June June June June June 2019 2018 2019 2018 2019 2018 Residential 2,367,190 2,305,464 3,233,902 2,994,773 2,167,343 1,808,198 Industrial 108,935 105,588 5,246,014 5,043,229 849,147 915,774 Commercial 275,274 267,480 2,326,733 2,184,259 1,281,905 1,137,259 Rural 234,300 234,610 643,848 764,626 289,153 295,137 Public Power 23,146 22,989 237,592 229,208 159,443 141,129 Public Lightening 815 779 326,929 325,839 131,776 121,193 Public Service 3,479 3,321 185,002 182,337 104,065 93,662 Reclassif. Revenue Disp. Electric Grid - Captive Consumer - - - - (1,431,610) (1,202,055) Total Supply 3,013,139 2,940,231 12,200,020 11,724,271 3,551,222 3,310,297 Energy Supply 98 94 1,406,437 1,191,847 244,307 185,808 Revenues Fin. Concession Bonus - - - - 22,331 22,574 Total 3,013,237 2,940,325 13,606,457 12,916,118 3,817,860 3,518,679

(i) Non-Audited Information

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31.2. Consolidated Operating Costs and Expenses Consolidated operating costs and expenses consist of the following types of expenses:

June 30, 2019 Costs for Expenses Expenses Other Description Goods and/or General and with Expenses/ Total

Services Administrative Sales Net Revenues Electric Energy Purchased for Resale (a) 2,318,163 - - - 2,318,163 Charges for Using the Electric Grid 416,207 - - - 416,207 Proinfa 93,096 - - - 93,096 Personnel (b) 182,667 89,171 31,190 5,363 308,391 Administrators - 5,240 - - 5,240 Actuarial Expenditure - 23,881 - - 23,881 Private Social Security Entity (b) 8,820 3,730 1,361 - 13,911 Material 4,847 3,153 - - 8,000 Construction Cost 248,025 - - - 248,025 Third Party Costs and Services 51,354 37,335 28,653 437 117,779 Depreciation and Amortization 98,395 12,479 - 985 111,859 Net Provisions - - 20,297 14,912 35,209 Donations, Contributions and Subventions - - - - - Leases and Rents 993 10,173 358 (61,394) (49,870) Other Costs and Expenses (c) 5,139 (2,958) 36,405 3,306 41,892 Total 3,427,706 182,204 118,264 (36,391) 3,691,783

June 30, 2018

Costs for Expenses Expenses Other Description Goods and/or General and with Expenses/ Total

Services Administrative Sales Net Revenues (Re-submitted) Electric Energy Purchased for Resale (a) 2,189,627

-

-

-

2,189,627

Charges for Using the Electric Grid 495,272 - - - 495,272 Proinfa 79,053 - - - 79,053 Personnel (b) 162,028

69,366

28,955

2,665

263,014

Administrators -

4,660

-

-

4,660 Actuarial Expenditure -

14,807

-

-

14,807

Private Social Security Entity (b) 9,422

3,437

1,413

-

14,272 Material 4051

2712

-

-

6,763

Construction Cost 196,689

-

-

-

196,689 Third Party Costs and Services 37,576

34,533

25,913

342

98,364

Depreciation and Amortization 93,949

11,904

-

985

106,838 Net Provisions -

-

19,952

25,211

45,163

Donations, Contributions and Subventions - - - 130 130 Leases and Rents 1,017 8,427 309 (56,329) (46,576) Other Costs and Expenses (c) 3,109

(666)

29,870

(11,315)

20,998

Total 3,271,793

149,180

106,412

(38,311)

3,489,074

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a) Electrical Energy Purchased for Resale 30 30 Description June GWh (i) June GWh (i)

2019 2018

(Reclassified) Centrais Eletricas Brasileiras S.A 417,483 1,837 378,996 1868 Tractebel Energia Comercializador 152,217 670 146,603 674 Petrobras S/A - Ute Governador Leon 100,763 903 168,395 903 Santo Antonio Energia SA 89,390 663 45,690 356 Cemig Geração e Transmissão S/A

83,226

357

85,797

523

Eletrobras Termonuclear S.A. 80,558 346 79,629 349 Norte Energia S/A 74,895 642 68,962 642 Furnas Centrais Eletricas S/A 62,267 564 57,965 528 Porto do Pecem Energy Generation 42,721 234 69,211 234 Rio Paraná Energia SA 42,242 280 37,146 250 Chesf - Cia Hidro Elétrica. do Sao Francisco 36,032 779 21,541 696 Cesp - Companhia En. de Sao Paulo 32,350 148 31,157 149 Aliança Geração de Energia S.A. 26,452 143 26,922 143 Foz do Chapecó Energia S.A 23,435 103 22,037 103 Companhia Energética Estreito 21,847 102 21,041 102 São Simão Energia S.A. HPP 21,264 167 20,168 46 Porto do Itaqui Energy Generation TEP 20,766 120 20,115 120 Amazonas Geração e Transmissão de Energia 19,844 88 - - Companhia Energética Petrolina 17,736 99 18,061 99 Energética Suape II S.A. 12,982 101 22,425 101 Centrais Elétricas de Pernambuco

12,713

137

23,467

137 Serra do Facão Energia S/A 10,583 48 10,351 48 Winds of Santo Antônio Generating Plant 9,203 - 1,000 6 Companhia Energetica Potiguar S.A. 9,078 66 9,904 66 Delta Comercializadora de Energia 7,688 38 1,228 6 Companhia Hidreletrica Teles Pires 6,664 78 6,266 78 EMAE - Empresa Metropolitana de Água 6,579 22 2,622 20 Cgtee - Cia de Ger. Term. de E.E. 6,109 69 7,451 48 Rio PCH I S.A. 5,953 27 5,799 27 Empresa Energética Porto das Pedras 5,781 26 5,552 26 Santa Cruz Power Corp. Hydro Plants 5,638 26 5,491 26 Eletrosul Centrais Elétricas SA 5,497 26 5,280 26 ENEL Greem Power Mourão SA 5,478 28 4,339 23 EOL São Clemente 4,897 33 - - Companhia Energetica Jaguara 4,832 36 4,909 33 Empresa de Energia Cachoeira Caldeira 4,772 39 4,677 39 Enguia Gen Ba Ltda 4,509 68 2,385 65 ECE Participacoes SA 4,504 32 4,349 32 Linhares Geração SA 4,416 16 5,892 16 SJC Bionergia Ltda 4,416 18 4,218 18 Santa Fé Energia SA 4,415 20 4,232 20 Energest SA 4,309 20 4,148 21 Açucareira Quata 4,024 33 - - Açucareira Zillo Lorenzetti S/A 4,024 - 6,283 33 Others 133,286 964 98,725 928 1,657,838 10,216 1,570,429 9,628 Electricity Purchased for Resale – CP 660,325 (456) 619,198 (204) Charges Due to Eletric Grid Use 416,207 - 495,272 - Proinfa 93,096 181 79,053 179 Cost Recovery - - - - 1,169,628 (275) 1,193,523 (25) 2,827,466 9,941 2,763,952 9,603 (i) Non-Audited Information b) Personnel and Private Pension Entity

Parent Company Consolidated

Description 30 30 30 30 June June June June

2019 2018 2019 2018 Personnel Remunerations 5,256 6,369 146,954 144,301 Social Charges 133 137 56,958 42,351 Share in Earnings and Income - - 18,216 16,157 Assistance Benefits - - 28,722 18,853 Provisions and Indemnities 12 38 57,468 41,302 Others 37 30 73 50 Private Social Security Entity - 8 13,911 14,272 Total 5,438 6,582 322,302 277,286

Page 73: Contents€¦ · Statement of Income 14 . Statement of Comprehensive Income 16 . Cash Flow Statement 17 . Statement of Changes in Equity . DMPL - January 1, 2019 to June 30, 2019

c) Cost Recovery On December 12, 2017, ANEEL, through Order No. 4,171/2017, determined that Eletrosul Centrais Elétricas S.A. would reimburse Celesc D the amounts related to the remuneration of the investments associated with the transmission facilities required to service the Arcelormittal consumer, received by the Transmitter in duplicity. In a brief context, the connection of the Arcelormittal consumer, at the time of its installation in Santa Catarina, occurred in 230kV, being configured as "Other Transmission Facilities - DIT", a work contracted by Celesc D together with Eletrosul to enable the service in these characteristics. In order to pay for this contract, Celesc D has contractually entered into between the companies the period of 5 years for the payment of the installations by Celesc D, which has a regulatory receivable for 30 years. Eletrosul opted for the early extension of its transmission concession, with an indemnity referring to assets not depreciated or not amortized, in the form of Act 12,783/2013 and its regulations, including the facilities dedicated to the Arcelormittal consumer. Following a regulatory procedure and the terms of the payment agreement entered into with Eletrosul, there remained formalized among the companies a Debt Confession Term, and Eletrosul's payment of R$ 9,573 was defined on July 20, 2018, followed by 11 consecutive monthly installments, equivalent to 2% of the amount due, each ending with a further 12 monthly and successive installments equivalent to 4.83% of the balance due, with possible adjustments in the final installment. The amount established by ANEEL, in the total amount of R$ 46,733, restated by the IPCA accumulated from October 2012 to November 2017, plus interest of 5.59% real per year, as of January 2013, was accounted for as follows form: principal of R$ 25,768 as cost recovery in the energy cost group, considering that Celesc D recorded, at the time, as cost effecting the due payments of the sector charge. The remaining balance was recognized as financial income. Until June 30, 2019, R$17,273 was received, remaining a balance of R$30,595. 31.3. Financial Income (Loss)

Parent company Consolidated

Description 30 30 30 30 June June June June

2019 2018 2019 2018 (Re-submitted)

Financial Revenues 511 697 130,051 80,598 Financial Investment Income 500 681 13,234 9,506 Moratorium Accruals w/o Electric Power Invoices - - 58,023 44,829 Monetary Variations - - 49,864 10,142 Monetary adjustment w/o Regulatory Assets - - 11,884 17,011 Social Fund Financial Incentive - - - - Supplier’s Discount - - 71 77 Exchange Devaluation w/o Purchased Energy - - - - Dividends Income 4 - 4 - Reversal of provision for losses on Financial Assets - - 216 - Other Financial Revenues 26 55 2,464 3,133 (-) PIS/COFINS w/o Financial Revenue (19) (39) (5,709) (4,100)

Financial Expenses (38) (29) (186,161) (116,449) Debt Charges - - (67,563) (16,983) Mathematical Reserve Update to be amortized - - (21,586) (20,959) Tax on Financial Transactions – IOF (3,133) (2,565) Monetary Variations and Accrued Arrears of Purchased Energy - - - - Monetary Variations - (3) (28,222) (561) R&D Update and Energy Efficiency - - (8,354) (7,782) Monet. Financial Assets - - (23,983) (19,723) CDE Update - - (11,752) (26,751) Interest and Expenditure with Debentures - - (20,189) (13,677) Other Financial Expenses (38) (26) (1,379) (7,448)

Financial Income (Loss) 473 668 (56,110) (35,851)

Page 74: Contents€¦ · Statement of Income 14 . Statement of Comprehensive Income 16 . Cash Flow Statement 17 . Statement of Changes in Equity . DMPL - January 1, 2019 to June 30, 2019

32. COMPLEMENTARY INFORMATION OF CELESC D 32.1. Balance Sheet

30 31 Assets June December 2019 2018 Current 4,092,448 4,237,296 Cash and Cash Equivalents 688,185 631,262 Accounts Receivable from Customers 1,494,441 1,575,606 Inventories 12,775 8,488 Taxes to be Recovered 105,883 61,160 Subsidy Decree 7891/2013 1,511,003 1,511,003 Financial Assets - CVA - 226,737 Others 280,161 223,040 Non-Current 5,866,325 4,689,251 Long-Term Receivables 2,503,651 1,401,659 Accounts Receivable from Customers 44,894 51,634 Deferred Taxes 715,182 712,532 Taxes to be Recovered 1,109,220 19,319 Judicial Deposits 183,055 150,318 Financial Assets Indemnification - Concession 447,738 438,609 Financial Assets - CVA - 26,522 Others 3,562 2,725 Intangible Assets 3,362,674 3,287,592 Total Assets 9,958,773 8,926,547

Liabilities 30 31

June December 2019 2018

Current 4,005,816 4,472,487 Suppliers 870,931 1,003,457 National Currency Loans 226,398 320,322 Foreign Currency Loans 4,994 767 Debentures 36,916 104,425 Social Security and Labor Duties 188,093 207,892 Taxes to be collected 242,824 207,393 Proposed Dividends 14,429 28,859 Loans – Affiliates, Subsidiaries or Controllers (i) 96,412 92,385 Regulatory Fees 1,995,469 2,269,081 Related parties 9,645 15,763 Actuarial Liabilities 159,240 162,638 Financial Liabilities - CVA 101,564 - Others 58,901 59,505 Non-Current 4,899,769 3,472,761 National Currency Loans 593,787 325,026 Foreign Currency Loans 317,912 272,686 Debentures 214,780 248,018 Regulatory Fees 117,656 103,411 Social Security and Labor Duties 50,412 46,988 Actuarial Liabilities 1,800,932 1,842,197 Provision for Contingencies 662,487 631,959 Financial Liabilities - CVA 63,700 - PIS/COFINS to be Returned to Consumers 1,075,627 - Others 2,476 2,476 Net Worth 1,053,188 981,299 Share capital 1,053,590 1,053,590 Profit Reserves 785,641 785,641 Equity Assessment Adjustments (857,932) (857,932) Accrued Profit 71,889 - Total Liabilities 9,958,773 8,926,547

(i) Loan between Celesc D and Celesc G In September 2018, Celesc G transferred R$ 90,000 to Celesc D in the form of a Loan Agreement. The principal interest of CDI + 2.5% p.a. will be added to the principal, which will be paid at the end of the contract, valid for 12 months. The funds are intended to mitigate cash dislocations, especially in light of the unfavorable economic situation of the electricity distribution sector, as well as the use as a bridge loan until the release of the IDB's resources in the Energy Infrastructure Program from Celesc D.

Page 75: Contents€¦ · Statement of Income 14 . Statement of Comprehensive Income 16 . Cash Flow Statement 17 . Statement of Changes in Equity . DMPL - January 1, 2019 to June 30, 2019

32.2. Income Statement

Description

30 30 June June

2019 2018 (Re-submitted)

Net Operating Revenue – ROL or NOR 3,842,383 3,682,409 Revenue from Electric Power Service 3,594,358 3,485,720 Construction Revenue 248,025 196,689 Operating Costs (3,414,512) (3,253,663) Cost of Electricity Service (3,166,487) (3,056,974) Construction Cost (248,025) (196,689) Gross Income 427,871 428,746 Operational Expenses (246,216) (195,967) Expenses with Sales (120,217) (105,997) General and Administrative Expenses (161,559) (129,455) Other Net Revenues (Expenses) 35,560 39,485 Operational Income Prior to Financial Income 181,655 232,779 Financial Income (Loss) (55,255) (33,420) Financial Revenues 128,182 78,030 Financial Expenses (183,437) (111,450) Income Before Income Tax and Social Contribution 126,400 199,359 IRPJ and CSLL (54,511) (79,742) Current (57,162) (70,078) Deferred 2,651 (9,664) Net Income for the Period 71,889 119,617

32.2.1. Operational Revenue

30 31 Description June June 2019 2018 Gross Operating Revenue – ROB or GOR 6,371,428 6,028,634

Electricity Supply (a) 3,536,478 3,291,505 Electricity Supply (a) 200,309 148,793 Financial Assets and Liabilities (416,673) 282,459 Electric Grid Availability 2,096,613 1,573,548 Short-Term Energy 299,180 143,112 Donations and Subventions 394,826 382,221 Construction Revenue 248,025 196,689 Financial Assets Update – VNR 2,603 2,328 Other Operating Revenues 10,067 7,979

Gross Operating Revenue Deductions (2,529,045) (2,346,225) ICMS (1,211,608) (1,041,327) PIS (100,880) (96,140) COFINS (464,662) (442,827) Energy Development Account – CDE (EDA) (712,934) (696,215) Research and Development – R&D (18,024) (17,456) Energy Efficiency Program – PEE (EEP) (18,024) (17,456) Surveillance Rate (3,485) (3,318) Other Charges 572 (31,486)

Net Operating Revenue – ROL or NOR 3,842,383 3,682,409

Page 76: Contents€¦ · Statement of Income 14 . Statement of Comprehensive Income 16 . Cash Flow Statement 17 . Statement of Changes in Equity . DMPL - January 1, 2019 to June 30, 2019

a) Electricity Supply and Provision

The composition of the Gross Revenue of electricity supply and provision, by class of consumers, is as follows:

Number of Consumers (i) MWh (i) Gross Revenue 30 30 30 30 30 30 Description June June June June June June 2019 2018 2019 2018 2019 2018 Residential 2,367,190 2,305,464 3,233,902 2,994,773 2,167,343 1,808,197 Industrial 108,927 105,579 5,193,740 4,971,295 838,197 900,924 Commercial 275,273 267,479 2,302,251 2,157,219 1,278,111 1,133,318 Rural 234,300 234,610 643,848 764,626 289,153 295,137 Public Power 23,146 22,989 237,592 229,208 159,443 141,129 Public Lightening 815 779 326,929 325,839 131,776 121,193 Public Service 3,479 3,321 185,002 182,337 104,065 93,662 Reclassif. Revenue Disp. Electric Grid - Captive Consumer - - - - (1,431,610) (1,202,055) Total Supply 3,013,130 2,940,221 12,123,264 11,625,297 3,536,478 3,291,505 Energy Supply 51 49 1,119,126 930,431 200,309 148,793 Total 3,013,181 2,940,270 13,242,390 12,555,728 3,736,787 3,440,298

(i) Non-Audited Information 32.2.2. Operating Costs and Expenses

June 30, 2019 Costs for Expenses Expenses Other Description Goods and/or General and Sales Expenses/ Total Services Administrative Net Revenues Electricity Purchased for Resale 2,819,603 - - - 2,819,603 Personnel 182,140 78,528 30,695 5,363 296,726 Actuarial Expenditure - 23,881 - - 23,881 Private Social Security Entity 8,820 3,730 1,361 - 13,911 Material 4,741 3,040 - - 7,781 Construction Cost 248,025 - - - 248,025 Third Party Costs and Services 48,673 34,142 28,348 437 111,600 Depreciation and Amortization 96,172 12,029 - - 108,201 Net Provisions - - 23,146 18,488 41,634 Other Costs and Expenses 6,338 6,209 36,667 (59,848) (10,634) Total 3,414,512 161,559 120,217 (35,560) 3,660,728

June 30, 2018

(Re-submitted) Costs for Expenses Expenses Other Description Goods and/or General and Sales Expenses/ Total Services Administrative Net Revenues Electricity Purchased for Resale 2,752,726 - - - 2,752,726 Personnel 160,287 58,814 28,680 2,665 250,446 Actuarial Expenditure - 14,807 - - 14,807 Private Social Security Entity 9,422 3,429 1,413 - 14,264 Material 3,817 2,686 - - 6,503 Construction Cost 196,689 - - - 196,689 Third Party Costs and Services 34,845 31,322 25,642 342 92,151 Depreciation and Amortization 91,556 11,440 - - 102,996 Net Provisions - - 20,117 25,141 45,258 Other Costs and Expenses 4,321 6,957 30,145 (67,633) (26,210) Total 3,253,663 129,455 105,997 (39,485) 3,449,630

Page 77: Contents€¦ · Statement of Income 14 . Statement of Comprehensive Income 16 . Cash Flow Statement 17 . Statement of Changes in Equity . DMPL - January 1, 2019 to June 30, 2019

33. CELESC G’S COMPLEMENTARY INFORMATION 33.1. Balance Sheet

Assets

30 31 June December 2019 2018

Current 106,114 99,344 Cash and Cash Equivalents 52,340 50,035 Accounts Receivable from Customers 16,398 17,301 Inventories 131 148 Taxes to be Recovered 4,574 179 Advanced expenses 19 134 Dividends receivable 267 89 Financial Asset – Grant Bonus 32,357 31,433 Others 28 25 Non-Current 573,342 566,083 Long-Term Receivables 355,857 347,006 Taxes to be Recovered 1,790 1,773 Judicial Deposits 359 354 Related parties 96,900 92,873 Financial Asset – Grant Bonus 254,387 249,585 Others 2,421 2,421 Investments 56,516 56,033 Property, Plant and Equipment 158,271 160,029 Intangible Assets 2,698 3,015 Total Assets 679,456 665,427

Liabilities

30 31 June December 2019 2018

Current 61,248 67,276 Suppliers 2,116 3,544 Debentures 35,691 26,964 Taxes to be collected 14,480 16,418 Regulatory Fees 356 246 Related parties 1,225 872 Proposed Dividends 7,302 19,147 Others 78 85 Non-Current 123,208 135,525 Deferred Taxes 14,737 10,144 Debentures 104,453 121,855 Provision for Contingencies 1,218 989 Regulatory Fees 2,800 2,537 Shareholders’ Equity 495,000 462,626 Share capital 250,000 250,000 Profit Reserves 194,486 196,920 Adjustment of equity valuation 15,424 15,706 Accrued Profit 35,090 - Total Liabilities 679,456 665,427

33.2. Income Statement

Description 30 30

June June 2019 2018

Net Operating Revenue – ROL or NOR 74,586 71,948 Sales and Service Revenues 74,586 71,948

Operating Costs (15,821) (20,531) Cost of Electricity Service (15,821) (20,531)

Gross Income 58,765 51,417 Operational Expenses (4,971) (6,031)

Expenses with Sales 1,953 (415) General and Administrative Expenses (7,178) (5,950) Other Net Revenues (Expenses) (318) (119) Equity Income 572 453

Operational Income Prior to Financial Income 53,794 45,386 Financial Income (Loss) (1,328) (3,099)

Financial Revenues 5,386 3,977 Financial Expenses (6,714) (7,076)

Income Before Income Tax and Social Contribution 52,466 42,287 IRPJ and CSLL (17,658) (14,126)

Current (13,064) (10,616) Deferred (4,594) (3,510)

Net Income for the Period 34,808 28,161

Page 78: Contents€¦ · Statement of Income 14 . Statement of Comprehensive Income 16 . Cash Flow Statement 17 . Statement of Changes in Equity . DMPL - January 1, 2019 to June 30, 2019

33.2.1. Operational Revenue

Description 30 30

June June 2019 2018

Gross Operational Revenue – ROB (i) 82,538 79,616 Electricity Supply (a) – Industrial 10,950 14,850 Electricity Supply (a) – Commercial 3,794 3,941 Electricity Supply (a) 36,979 33,766 Short-Term Electricity (a) 8,484 4,485 Update/Interest on Grant Bonus Return 22,331 22,574

Deductions from Operational Revenue (7,952) (7,668) PIS (1,207) (1,180) COFINS (5,561) (5,435) ANEEL - TFSEE Surveillance Tax (136) (132) Research and Development – R&D (458) (405) Financial Compensation for Water Resources (590) (516)

Net Operating Revenue – ROL or NOR 74,586 71,948 (i) By means of an Approval Resolution No. 2,421 from July 17, 2018, ANEEL has approved the readjustment of the Annual Generation Revenue (RAG) for hydroelectric Plants under quotas, under the terms of Act 12,783/2013. The new RAG readjustment is effective from July 1, 2018 to June 30, 2019. The RAGs established for Celesc G's Fixed Assets and which are to be charged on a monthly basis are:

Plant Concessionaire RAG 2018/2019 Cycle

Monthly Revenue July/2018 to June/2019

Pery Celesc G 9,453 788 Garcia Celesc G 9,758 813 Bracinho Celesc G 12,667 1,056 Cedros Celesc G 9,267 772 Palmeiras Celesc G 19,355 1,613 Salto Celesc G 6,585 549

a) Electricity Supply and Provision

Number of Consumers (i) MWh (i) Gross Revenue 30 30 30 30 30 30 Description June June June June June June 2019 2018 2019 2018 2019 2018 Electricity Supply and Provision

Industrial 8 9 52,274 71,934 10,950 14,850 Commercial, Services and Others 1 1 24,482 27,040 3,794 3,941 Energy Supply 47 45 247,610 246,077 36,979 33,766 Short-Term Energy (CCEE) - - 39,701 15,338 8,484 4,485 Update/Interest on Grant Bonus Return - - - - 22,331 22,574

Total 56 55 364,067 360,390 82,538 79,616 (i) Non-Audited Information 33.2.2. Operating Costs and Expenses

June 30, 2019

Description

Costs of Goods and/or

Services

General and Administrative

Expenses Selling

Other Expenses/Revenues

Net Total

Electricity Purchased for Resale 9,328 - - - 9,328 Charges for Using the Electric Grid 1,162 - - - 1,162 Personnel 527 5,205 495 - 6,227 Material 106 113 - - 219 Third Party Costs and Services 2,681 1,054 305 - 4,040 Depreciation and Amortization 2,223 433 - - 2,656 Insurance 115 - - - 115 Net Provisions - - (2,849) (1,442) (4,291) Taxes (170) 49 96 - (25) Rents - 245 - - 245 Donations - - - - - Other Costs and Expenses (151) 79 - 1,760 1,688 Total 15,821 7,178 (1,953) 318 21,364

Page 79: Contents€¦ · Statement of Income 14 . Statement of Comprehensive Income 16 . Cash Flow Statement 17 . Statement of Changes in Equity . DMPL - January 1, 2019 to June 30, 2019

June 30, 2018

Description

Costs for Expenses

Selling

Other

Expenses/ Net Revenues

Total

Goods and/or General and

Services Administrative Electricity Purchased for Resale 12,462 - - - 12,462 Charges for Using the Electric Grid 1,165 - - - 1,165 Personnel 1,741 3,978 275 - 5,994 Material 234 26 - - 260 Third Party Costs and Services 2,731 1,157 271 - 4,159 Depreciation and Amortization 2,393 462 - - 2,855 Insurance 150 - - - 150 Net Provisions - - (165) - (165) Taxes (185) 168 34 - 17 Rents - 148 - - 148 Donations - - - 130 130 Other Costs and Expenses (160) 11 - (11) (160) Total 20,531 5,950 415 119 27,015

34. SUBSEQUENT EVENTS 34.1. Annual Adjustment of Annual Generation Revenue - RAG - Celesc G By means of an Approval Resolution No. 2,587 from July 23, 2019, ANEEL has approved the readjustment of the Annual Generation Revenue (RAG) for hydroelectric Plants under quotas, under the terms of Act 12,783/2013. The new RAG readjustment term is effective from July 1, 2019 to June 30, 2020. The RAG, defined in the periodic tariff review process, includes:

GAG - Cost of Generation Asset Management; AjI - Adjustment of Unavailability Calculated or by Performance Calculated, according to the operation defined by the

National Electric System Operator - ONS; EU - Charges from Use of the Distribution or Transmission System; EC - Connection Charge under the responsibility of the concessionaire for the following year; OE - Other Charges

The Cost of Generation Asset Management (GAG) includes the regulatory costs of operation, maintenance, management, remuneration and amortization. These costs are included in GAG for Operating Costs, GAG for Capital Costs for Improvement Investments, GAG for Generation Asset Management Costs, resulting from expansions made at hydroelectric plants and GAG for Annual Cost of Mobile Installations and Real Estate. The RAGs established for Celesc G's Fixed Assets and which are to be charged on a monthly basis are:

Plant Concessionaire RAG (R$) 2019/2020 Cycle

Monthly Revenue (R$) July 2019 to June 2020

Pery Celesc G 9,813,481.68 817,790.14 Garcia Celesc G 10,122,039.41 843,503.28 Bracinho Celesc G 13,113,790.03 1,092,815.84 Cedros Celesc G 9,595,876.71 799,656.39 Palmeiras Celesc G 20,085,497.84 1,673,791.49 Salto Celesc G 6,818,340.73 568,195.06

34.2. Term of the Installment Agreement - Celesc D Celesc D and the Government, on July 19, 2019, signed an Agreement to comply with Court Decision Nr. 500879251.2011.4.04.7200, in which Celesc D undertakes to settle debt of R$72,403 in 60 installments, with the first installment on July 31, 2019. The remaining installments will have interest added, equivalent to the SELIC Special Settlement and Custody System reference rate for federal securities, accrued monthly, from the month following the consolidation until the month prior to the payment and 1% (one percent) for the month in which the payment is made. This process refers to amounts to be transferred to the Federal Government as Emergency Capacity Charges (ECE) already recognized as Regulatory Contingencies, as per Note 27, item ‘a”, sub-item “iv”.

Page 80: Contents€¦ · Statement of Income 14 . Statement of Comprehensive Income 16 . Cash Flow Statement 17 . Statement of Changes in Equity . DMPL - January 1, 2019 to June 30, 2019

1. QUARTERLY FINANCIAL INDICATORS (Non-Audited Information)

1.1. Equity

1.2. Liquidity

2 tri 2018 3 tri 2018 4 tri 2018 1 tri 2019 2 tri 2019

51,03 52,12

46,69 48,74

49,94

Equity Share Price (R$ per share)

2 tri 2018 3 tri 2018 4 tri 2018 1 tri 2019 2 tri 2019

36,00 29,30

46,00

57,00 59,03

28,50 31,29

49,87 53,43

49,50

Market Share Price (R$ per share)

ON PN

0,86 0,86 0,98 1,01 1,06

2 tri 2018 3 tri 2018 4 tri 2018 1 tri 2019 2 tri 2019

Current Liquidity

0,77

0,78

0,77 0,77

0,79

2 tri 2018 3 tri 2018 4 tri 2018 1 tri 2019 2 tri 2019

General Liquidity

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1.3. Indebtedness

1.4. Profitability

78,48 78,87

81,73 80,87

82,36

2 tri 2018 3 tri 2018 4 tri 2018 1 tri 2019 2 tri 2019

Asset Indebtedness (%)

364,63 373,35

447,23 422,63 467,02

2 tri 2018 3 tri 2018 4 tri 2018 1 tri 2019 2 tri 2019

Equity Indebtedness (%)

3,64

2,14

(0,95)

4,02

2,47

2 tri 2018 3 tri 2018 4 tri 2018 1 tri 2019 2 tri 2019

Rentabiliade do Patrimônio Líquido

45,35

27,41

(10,78)

45,63

29,35

2 tri 2018 3 tri 2018 4 tri 2018 1 tri 2019 2 tri 2019

Rentabilidade do Imobilizado

Page 82: Contents€¦ · Statement of Income 14 . Statement of Comprehensive Income 16 . Cash Flow Statement 17 . Statement of Changes in Equity . DMPL - January 1, 2019 to June 30, 2019

1.5. EBITDA or LAJIDA

0,76%

0,44%

-0,18%

0,74%

0,47%

2 tri 2018 3 tri 2018 4 tri 2018 1 tri 2019 2 tri 2019

Rentabilidade do Ativo

3,49%

1,89%

-1,02%

3,41%

2,61%

2 tri 2018 3 tri 2018 4 tri 2018 1 tri 2019 2 tri 2019

Margem Operacinal Líquida

185,33

133,59 101,05

207,93 151,33

2 tri 2018 3 tri 2018 4 tri 2018 1 tri 2019 2 tri 2019

EBITDA (R$ million)

9,35%

6,02% 5,97%

9,75% 8,49%

2 tri 2018 3 tri 2018 4 tri 2018 1 tri 2019 2 tri 2019

EBITDA ou LAJIDA (% s/ ROL)

Page 83: Contents€¦ · Statement of Income 14 . Statement of Comprehensive Income 16 . Cash Flow Statement 17 . Statement of Changes in Equity . DMPL - January 1, 2019 to June 30, 2019

1.6. Efficiency

2º Trim/18 3º Trim/18 4º Trim/18 1º Trim/19 2º Trim/19

1.912

1.765 1.855

2.078

1.854

MWh / Employee

2º Trim/18 3º Trim/18 4º Trim/18 1º Trim/19 2º Trim/19

919

880

907 893 890

Consumers / Employee

2º Trim/18 3º Trim/18 4º Trim/18 1º Trim/19 2º Trim/19

2,14 2,17

3,23 3,47

2,25

Equivalent Duration of Interruptions per Consumer - DEC (weighted hours)

2º Trim/18 3º Trim/18 4º Trim/18 1º Trim/19 2º Trim/19

1,49 1,52

2,19 2,27

1,53

Equivalent Frequency of Interruptions per Consumer - FEC (Nr.)

2º Trim/18 3º Trim/18 4º Trim/18 1º Trim/19 2º Trim/19

205 182

278 270

195

Average Interruption Service Time (Minutes)

- 100 200 300 400 500 600 700 800

2º Trim/18 3º Trim/18 4º Trim/18 1º Trim/19 2º Trim/19

Average Tariff R$/MWh (Captive Market)

Residencial Industrial Comercial

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Expert Opinions and Statements / Special Review Report - Without Qualification Report on the review of quarterly financial information To the Members of the Management and Shareholders Centrais Elétricas de Santa Catarina S.A. Introduction We have reviewed the individual and consolidated quarterly earnings information of Centrais Elétricas de Santa Catarina S.A. (the “Company”), in the Quarterly Earnings Release (ER) for the quarter ended June 30, 2019, including the balance sheet on June 30, 2019 and the respective income statements and statement of comprehensive income for the three-month and six-month periods ended today, changes in shareholders’ equity and cash flows for the said six-month period ended today, as well as a summary of the main accounting policies and other notes. The Management is responsible for preparing this individual and consolidated interim earnings release in compliance with Technical Pronouncement CPC 21 - Interim Statement and the international accounting standard IAS 34 - Interim Financial Reporting, issued by the International Accounting Standards Board (IASB), as well as for presenting this information in compliance with the standards issued by the Brazilian Securities and Exchange Commission (CVM), applicable to the Quarterly Earnings Release (ER). Our responsibility is to issue a conclusion on this interim accounting information based on our review. Scope of the Review We have carried out our review in accordance with Brazilian and international standards for reviewing interim information (NBC TR 2410 – “Revisão de Informações Intermediárias Executadas pelo Auditor da Entidade” (Review of Interim Information Performed by the Auditor of the Entity) and ISRE 2410 – “Review of quarterly earnings release Performed by the Independent Auditor of the Entity”, respectively). A review of interim information includes making questions, mainly to the people responsible for the financial and accounting matters and applying analytical and other review procedures. The scope of a review is significantly smaller than the scope of an audit carried out in accordance with auditing standards and, therefore, we can’t be sure that we have all information on all material matters that could be identified in an audit. Therefore, we do not issue an audit opinion. Conclusion on the Quarterly Information Based on our review, we are not aware of any fact that would lead us to believe that the individual and consolidated quarterly financial information mentioned above, have not been prepared, in all material respects, in accordance with CPC 21 and IAS 34, applicable to the preparation of Quarterly Reports (ITR), and in compliance with the standards issued by the Brazilian Securities and Exchange Commission. Other Subjects Statement of Added Value We have also reviewed the individual and consolidated statements of value added for the six-month period ended June 30, 2019. These statements are under the responsibility of the Company's Management, and must be presented in accordance with standards issued by the standards issued by the Brazilian Securities and Exchange Commission and applicable to the preparation of Quarterly Earnings Release (ER) and are considered supplementary information under IFRS, which does not require the presentation of the statement of value added. These statements have been subject to the same review procedures described above and, based on our review, we are not aware of any facts that may lead us to believe that they have not been prepared in a consistent manner, in all material respects, concerning the consolidated and individual quarterly financial information, assessed as a whole.

Florianópolis, August 14, 2019 PricewaterhouseCoopers Independent Auditors CRC 2SP000160/O-5 Leandro Sidney Camilo da Costa Accountant CRC 1SP 236051/O-7

Page 85: Contents€¦ · Statement of Income 14 . Statement of Comprehensive Income 16 . Cash Flow Statement 17 . Statement of Changes in Equity . DMPL - January 1, 2019 to June 30, 2019

EXECUTIVE OFFICERS’ STATEMENT ON THE FINANCIAL STATEMENTS The Company’s Directors, responsible for drawing up the financial statements in accordance with the law or bylaws, state that they have reviewed, discussed and agreed with the financial statements related to Celesc's (individual and consolidated) Quarterly Financial Information. ____________________________ Cleicio Poleto Martins Chief Executive Officer ______________________________ Fábio Valentim da Silva Director of Regulatory and Legal Affairs __________________________ Antônio José Linhares Business Director ______________________________ Pablo Cupani Carena Director of Generation, Transmission and New Businesses _____________________________ Sandro Ricardo Levandoski Distribution Director ____________________________ Claudine Furtado Anchite Corporate Management Director _____________________________ André Luiz de Castro Pereira Director of Planning and Internal Control ____________________________ Claudine Furtado Anchite CFO and IRO ________________________________ José Braulino Stähelin Accountant – CRC/SC 18.996/O-8

Page 86: Contents€¦ · Statement of Income 14 . Statement of Comprehensive Income 16 . Cash Flow Statement 17 . Statement of Changes in Equity . DMPL - January 1, 2019 to June 30, 2019

STATEMENT OF THE DIRECTORS ON THE REPORT OF THE INDEPENDENT AUDITORS The Company’s Directors, responsible for preparing the financial statements in accordance with the law or bylaws, state that they have reviewed, discussed and agreed with the opinions in the special review report by PricewaterhouseCoopers Auditores Independentes, on the financial statements related to Celesc’s (individual and consolidated) Quarterly Financial Information. ____________________________ Cleicio Poleto Martins Chief Executive Officer ______________________________ Fábio Valentim da Silva Director of Regulatory and Legal Affairs __________________________ Antônio José Linhares Business Director ______________________________ Pablo Cupani Carena Director of Generation, Transmission and New Businesses _____________________________ Sandro Ricardo Levandoski Distribution Director ____________________________ Claudine Furtado Anchite Corporate Management Director _____________________________ André Luiz de Castro Pereira Director of Planning and Internal Control ____________________________ Claudine Furtado Anchite CFO and IRO ________________________________ José Braulino Stähelin Accountant – CRC/SC 18.996/O-8