Companhia de Saneamento de

COMPANHIA DE SANEAMENTO DE MINAS GERAIS – COPASA MG PUBLICLY-HELD COMPANY CORPORATE REGISTRY ID (NIRE) #313.000.363-75 CORPORATE TAXPAYER’S ID (CNPJ/MF) #17.281.106/0001-03

MINUTES OF THE BOARD OF DIRECTORS MEETING HELD ON JUNE 29, 2006

1. Date, time and place: Meeting held on June 29, 2006, at 9:30 am, at the Company’s headquarters located in city of , state of Minas Gerais, at Rua , 525, Santo Antônio, CEP 30330- 270. 2. Attendance: The following Board of Directors members attended the meeting: Messrs. Euclides Garcia de Lima Filho, Flávio José Barbosa de Alencastro, Hélio César Brasileiro, Márcio Nunes, Maron Alexandre Mattar and Murilo de Campos Valadares. Mrs. Paula Vasques Bittencourt, General Secretary and Mr. Vicente de Paula Lima, Legal Consultant also attended the meeting. 3. Presiding Board: Mr. Márcio Nunes, took over the chair of the meeting and invited Mrs. Paula Vasques Bittencourt to be his secretary. 4. Agenda: To resolve on: (i) initiation of a bidding process, pursuant to the Article 21, item “l” of the Company’s Bylaws, in order to execute works and services necessary to expand sanitary sewer system of Alfenas (Proposal of Resolution of the Board of Directors - PCA 071/06); (ii) write-off of real properties under the scope of Southwest Operations Executive Board - DRSO, pursuant to the Article 21, letter “k”, of the Company’s Bylaws (Proposal of Resolution of the Board of Directors - PCA 072/06); (iii) proposal of subsidy to philanthropic entities to the submitted to the examination of the General Meeting, pursuant to the Article 38 of the Company’s Bylaws (Proposal of Resolution of the Board of Directors PCA 074/06); (iv) enact a procedural rule to participate in corporate education activities under the scope of COPASA MG, pursuant to the Article 21, item “g”, of the Company’s Bylaws (Proposal of Resolution of the Board of Directors PCA 073/06); (v) presentation of a pilot plan to receive recycling materials as water bill credit; (vi) organizational restructuring by creating an organizational unit subordinated to the Superintendence of Planning and Management - SPPG (Proposal of Resolution of the Board of Directors PCA 075/06); (vii) proposal to create a trust position as Coordinator of Strategic Projects for Investor Relations (Proposal of Resolution of the Board of Directors PCA 076/06); (viii) Instrument of Agreement between the local government of Belo Horizonte and COPASA MG, referring to the financing of the Program “Urbanized Towns of Taquaril and São José” (Proposal of Resolution of the Board of Directors PCA 077/06); (ix) Addendum to the Instrument of Agreement between the local government of Belo Horizonte and COPASA MG, related to the Environmental Sanitation Program of Belo Horizonte - DRENURBS (Proposal of Resolution of the Board of Directors PCA 078/06); (x) general issues. 5. Resolutions: The Board of Directors’ members resolved by unanimous vote the following: 5.1. to approve, pursuant to the Article 21, item “l” of the Company’s Bylaws the initiation of a bidding administrative procedure to execute works and services to expand the sanitary sewer system of Alfenas, up to the amount of eighteen million, two hundred, seven thousand reais (R$ 18,207,000.00), including the building of sewage pumps with respective discharge lines, outfalls and sewage treatment station. This demand shall be included in the Investments Program - IP, by setting out own funds derived from Initial Public Offering - IPO, pursuant to recommendation of the joint executive board in meeting held on 6/13/2006; 5.2. to approve, pursuant to the Article 21, item “k”, of the Company’s Bylaws, the written-off of real properties owned by Services District of Médio Paranaíba – DTPB, in , deemed as “uselessness to the service”, as recommended in meeting of the Joint Executive Board held on 6/13/2006, of following assets: 9668000018 – riparian rights area – raw water main; 9668000019 – riparian rights area – raw water main; 9668000027 – riparian rights area – raw water main 9668000030 – land of catchment –Ribeirão Grande; 9668000031 – land of pumps Ribeirão Grande; 9668000036 – catchment alongside Ribeirão Grande; 9668000037 – raw water pumps - Ribeirão Grande and 9668000052 – raw water main; 5.3. to approve the concession of subsidy to the philanthropic entities, as per exhibit I hereof, to be submitted to resolution in General Meeting, pursuant to the Article 38, of the Company’s Bylaws, subject to the presentation of the following certificates: Certificate of Social Work Charitable Entity, issued by the Social Work Brazilian Council - CNAS and Certificate of Registration as Social Work Entity, issued by the State Department of Social Companhia de Saneamento de Minas Gerais

Development and Sports – SEDESE, and each certificate submitted shall be granted a discount corresponding to twenty-five per cent (25%) of the equivalent tariff, granted on a monthly basis until the limit of demand contracted; 5.4. to approve, pursuant to the Article 21, item “g” of the Company’s Bylaws, the establishment of the Procedural rule “Participation in corporate education activities”; 5.5. Mr. Cláudio Gomes dos Santos, Commercial Superintendent, submitted to the Board members a pilot plan to receive recycling materials as water bill credit, with a view to diminishing delinquency and foment environmental preservation practices in communities, and preliminarily the program shall comprise the Conglomerate Papagaio/Sta. Rita and Sta. Lúcia of South District of the metropolitan region of Belo Horizonte; 5.6 to approve, pursuant to item “g” of the Article 21 of the Company’s Bylaws, the creation of an organizational unit named as Division of Processing and Management of Strategic Information - DVIE, subordinated to the Superintendence of Planning and Management - SPPG, with the following attributions: to structure and develop computerized reports containing strategic information to assist the Board of Directors, the Presidency and the Joint Executive Board in decision-making process and in the relationship with investors, the community and media; to structure and develop computerized reports containing strategic and specific information about local governments operated and of COPASA MG’s interest to assist the Presidency and the Board of Executive Officers in negotiations of investments and concessions, prepare reports and comparative graphs about COPASA MG’s performance with other sanitation companies and among operating units; to make operational by means of information technology, the management of Investment Program; and coordinate the activities related to the development of strategic information intelligence. The personnel of such unit, besides the manager position, shall be composed of: two (2) positions with expertise in information technology analysis (bachelor’s degree) and three (3) positions with expertise in computer programming (high school degree); 5.7 to approve, pursuant to item “e”, paragraph 1, Article 29 of the Company’s Bylaws the creation of position as Investor Relations Supervisor, with the following attributions: relationship with Brazilian and foreign investors, personally or by means of various means of communication; relationship with Brazilian and foreign capital markets analysts; preparation of institutional presentations for investors and capital markets; relationship with the Brazilian Securities and Exchange Commission - CVM; relationship with the São Paulo Stock Exchange – Bovespa, Brazilian Clearing and Depositary Corporation - CBLC, share bookkeeping agent bank in Brazil and bank liable for share pledge and issuer of international receipts (GDS), as well as shareholders, take part in public meetings with capital markets analysts. The position shall be filled by broad recruiting process during a period of two (2) years and subject to the Presidency. The applicant, besides being qualified with full understanding of the capital markets, he/she shall write and speak fluent English language; 5.8 in relation to: (a) the Instrument of Agreement between the local government of Belo Horizonte and COPASA MG, referring to the Program “Urbanized Towns of Taquaril and São José”; and (b) the Addendum to the Instrument of Agreement between the local government of Belo Horizonte and COPASA MG, referring to the Environmental Sanitation Program of Belo Horizonte – DRENURBS, internal bureaucratic difficulties and of relationship with the local government were detected and aggravated by the lack of supplementary information thereby, and it was resolved that the Metropolitan Operation Officer shall submit in the next ordinary meeting of the Board of Directors a solution for these two issues and if not possible, to submit a report defining the impediments still existing and a deadline to solve them. In addition to determining that the Executive Board prioritizes these issues under consideration, the Board of Directors recommended, in view of bureaucratic problems identified, that managers under any hierarchical level, whenever another manager of hierarchical level equal or higher than the former enters into his office, this manager is given priority to demands submitted thereto, immediately taking the measures necessary to solve such issues; 5.9. General Issues: (a) in view of the resolutions of Joint Executive Board and Board of Directors meetings, CRD 13306 and CRC 04206, authorizing the initiation of a bidding process related to works to implement the sanitary sewer system of and that legal instrument approved may jeopardize the observance to deadline required in the concession agreement to execute such works, the Board members approved as per recommendation of the Joint Executive Board, which re-examined the issue in meeting held on 6/20/2006 and pursuant to the provisions in the Article 21, item “m” of the Company’s Bylaws, the amendment to the instrument for agreement with the local government of Lavras. The subject-matter of said agreement is the execution of works to enlarge the sanitary sewer system of said local government, at the amount of ten million, two hundred, seventy-one thousand, seven hundred, thirty-three reais and twenty-six centavos (R$ 10,271,733.26) and with execution term estimated in agreement of eighteen (18) months, comprising the following items: building of collecting networks and sewage interceptors, including crossing by non- 2 Companhia de Saneamento de Minas Gerais

destroyable method, pump station and sewage building connections; (b) to approve, as per recommendation of the Joint Executive Board in meeting held on 6/20/2006, the following procedures to be observed in future strike events, during its effectiveness period:1. suspension of flexible working hours; 2. deactivation of current attendance control systems; 3. check the attendance through employee’s signature under the presence of respective managers in proper from, at start and end of each working hour. This form will be retained by the unit manager, who shall forward it to the Human Resources Superintendence, within up to one hour after the end of each working hour; 4. days absent will be allocated in same month, ensuring as determined by laws, the payment until the fifth business day of subsequent month. Employees with regular attendance shall be granted an advance on day thirty (30) and employees with absences at work, the payment shall occur within said legal term; 5. identification by respective managers of exceptional events of external service, indicating them in referred form to check attendance; (c) to approve, pursuant to the provisions in Article 21, item “m” of the Company’s Bylaws, a proposal to formalize an agreement with the local government of Santa Rita do Sapucaí to execute works and services necessary to implement the sanitary sewer system of such city, with supply of materials under the responsibility of COPASA MG, up to the amount of eight million, five hundred and fifteen thousand reais (R$ 8,515,000.00) – works and materials, comprising the following items: building of sewage collecting networks, sewage interceptor networks, sewage pumps, discharge line, sewage treatment station and building connections, with execution term estimated of eighteen (18) months, as per recommendation of the Joint Executive Board in meeting held on 6/27/2006; d) The Board member, Mr. Euclides Garcia de Lima Filho, congratulated the Company’s Executive Board for the initiative of the program “CONFIÁGUA”, launched in the tourism city of São João Del Rei. The Company carries out water quality analyses inside local hotels and lodgings, affixing water reliability seal on said establishments. 6. Closure: Nothing else to be discussed, works were adjourned to draw up these present minutes in the summary format, which after being read, these were approved and signed by the attending board members: Messrs. Euclides Garcia de Lima Filho, Flávio José Barbosa de Alencastro, Hélio César Brasileiro, Márcio Nunes, Maron Alexandre Mattar and Murilo de Campos Valadares. Thereafter, the vote of Mr. Geraldo de Oliveira Faria was attached to these present minutes, who approved the issues resolved in the meeting, and who was previously aware thereof pursuant to the Article 18, paragraph two of the Company’s Bylaws. Belo Horizonte, June 29, 2006.

______Euclides Garcia de Lima Filho Márcio Nunes Board member Chairman of the Board

______Flávio José Barbosa de Alencastro Maron Alexandre Mattar Board member Board member

______Hélio César Brasileiro Murilo de Campos Valadares Board member Board member

______Paula Vasques Bittencourt Secretary

3 EXHIBIT I MINUTES OF THE BOARD OF DIRECTORS MEETING HELD ON JUNE 29, 2006

Clients for concession of subsidy – RCA (BOARD OF DIRECTORS MEETING) held on 6/29/2006 ABRIGO FREDERICO OZANAN ALIANÇA DIVINOPOLITANA ASSISTÊNCIA E PROMOÇÃO ANCIANATO ANTÔNIO FREDERICO OZANAN APAE IPUIUNA APAE TEÓFILO OTONI APAE VISCONDE DO RIO BRANCO APAE APAE APAE BORDA DA MATA APAE CANÁPOLIS APAE APAE CENTRALINA APAE DE APAE ESCOLA INTERMEDIÁRIA CORA FARIA DUARTE APAE APAE GUAXUPÉ APAE APAE LAGOA SANTA APAE APAE PRATA APAE SÃO GOTARDO ASILO DR CARLOS ROMEIRO ASILO SÃO VICENTE DE PAULO CAMPESTRE ASILO SÃO VICENTE DE PAULO SANTO HIPÓLITO ASILO SÃO VICENTE PAULO ARAXÁ ASSISTÊNCIA SOCIAL KENNEDY ASSOCIAÇÃO BENEFICENTE DE ITAPORÉ ASSOCIAÇÃO BENEFICENTE DR PAULO BORGES ASSOCIAÇÃO CIVIL NOSSA SENHORA CARMO ASSOCIAÇÃO COMUNITÁRIA BENEFICENTE DE CLÁUDIO ASSOCIAÇÃO COMUNITÁRIA DO MUNICÍPIO DE MEDINA ASSOCIAÇÃO COMUNITÁRIA DOS MORADORES BAIRRO PALMARES SEGUNDA SEÇÃO ASSOCIAÇÃO DAS OBRAS PAVONIANAS DELFIM MOREIRA ASSOCIAÇÃO DE APOIO E DESENVOLVIMENTO DA CRIANÇA E GESTANTE ASSOCIAÇÃO DE CEGOS SANTA LUZIA ASSOCIAÇÃO FILANTRÓPICA ANFRÍSIO COELHO ASSOCIAÇÃO PAROQUIAL ASSISTÊNCIA A INFÂNCIA DE MAR DE ESPANHA ASSOCIAÇÃO PROJETO DE DEUS CASA APOIO CRIANÇA CARENTE CASA DA ANIMAÇÃO CASA PADRE QUINZINHO CENTRO INFANTIL PEDACINHO DO CÉU CENTRO MARIA IMACULADA DE PROMOÇÃO DA JOVEM COMUNIDADE REVIVER CONGREGAÇÃO IRMÃS DOS SAGRADOS CORAÇÕES DE JESUS E MARIA - CRECHE CONSELHO CENTRAL DE JOÃO PINHEIRO DA SSVP CONSELHO SANTA RITA DE CÁSSIA SSVP CRECHE BERÇÁRIO JARDIM DE LUZ CRECHE CASINHA FELIZ COMUNIDADE VILA SÃO JOSÉ CRECHE CENTRO MATERNO INFANTIL ANA MARIA CASTRO VEADO CRECHE COMUNITÁRIA AURÉLIO PIRES CRECHE COMUNITÁRIA BAIRRO OLARIA CANTINHO AMOR CRECHE COMUNITÁRIA CAIÇARAS CRECHE COMUNITÁRIA PINGO DE GENTE CRECHE COMUNITÁRIA TIA LUCY CRECHE COMUNITÁRIA VILA PIRATININGA CRECHE DE SANTA RITA DO SAPUCAÍ CRECHE DEUS MENINO CRECHE DOM BOSCO CRECHE ESCOLA INFANTIL SÃO VICENTE PAULO CRECHE IMACULADA CONCEIÇÃO 4 EXHIBIT I MINUTES OF THE BOARD OF DIRECTORS MEETING HELD ON JUNE 29, 2006

CRECHE LAR CRIANÇAS SÃO VICENTE PAULO CRECHE LAR ESCOLA DA CARIDADE CRECHE MENINO DE JESUS CRECHE MENINO DEUS SSVP CRECHE NOVO LAR CRECHE VICENTINA SANTÍSSIMO SACRAMENTO CRECHE VIRGÍLIO PEDRO DE ALMEIDA DEPARTAMENTO ASSISTÊNCIA SOCIAL JOÃO DE FREITAS DISPENSÁRIO DOS POBRES DE DORES DO INDAIÁ EDUCANDÁRIO FRANCISCO DE ASSIS ESCOLA DOMÉSTICO PROFISSIONAL LAR DE MARIA FRATERNIDADE FEMININA CRUZEIRO DO SUL FUNDAÇÃO DOM BOSCO FUNDACAO OLHOS D’ALMA FUNDAÇÃO SANTA FILOMENA FUNDAÇÃO SANTARRITENSE DE SAÚDE E ASSISTÊNCIA SOCIAL GRUPO ASSISTENCIAL DE MULHERES MARIA PEREIRA SILVA GRUPO VOLUNTÁRIAS PRÓ-COMUNIDADES PERPÉTUAS HOSPITAL E MATERNIDADE SENHOR BOM JESUS HOSPITAL SÃO VICENTE DE PAULO INSTITUTO IRMÃS FRANCISCANAS NOSSA SENHORA DE FÁTIMA INSTITUTO JOSÉ GERALDO GONÇALVES CRECHE LAR DE MARIA LACTÁRIO E POSTO DE PUERICULTURA MENINO JESUS LAR COMUNITÁRIO FREDERICO OZANAN LAR DE AMPARO E PROMOÇÃO HUMANA COROMANDEL LAR DE AMPARO E PROMOÇÃO HUMANA IBIRITÉ LAR DO IDOSO SÃO BENEDITO LAR DONA MARIA ADELAIDE LAR DOS IDOSOS SANTO ANTÔNIO PÁDUA LAR DOS IDOSOS TEREZA CRISTINA LTDA LAR DOS VELHINHOS DA SSVP LAR IDOSOS SÃO VICENTE PAULO JACUÍ LAR NOSSA SENHORA DO CARMO LAR SÃO VICENTE DE PAULO DE MONTE SANTO MINAS OBRA DO BERÇO SANTA THEREZA ORGANIZAÇÃO EDUCACIONAL JOÃO XXIII - CRECHE CASA MENOR JÚLIO DARIO RECANTO CORAÇÃO EUCARÍSTICO JESUS SANTA CASA MISERICÓRDIA ANDRADAS SANTA CASA MISERICÓRDIA PERDÕES SANTA CASA MISERICÓRDIA DE PEDRALVA SERVIÇO ASSISTENCIAL SALÃO DO ENCONTRO SOCIEDADE ASSISTÊNCIA AOS POBRES SOCIEDADE BENEFICENTE ASILO PADRE VÍTOR SOCIEDADE DE PROMOÇÃO IMACULADA CONCEIÇÃO SOCIEDADE ESPÍRITA MARIA NUNES VILA VICENTINA DA SSVP DE QUARTEL GERAL

5 EXHIBIT II MINUTES OF THE BOARD OF DIRECTORS MEETING HELD ON JUNE 29, 2006

PROCEDURAL RULE (PR) Nº: 2006-007/0 Participation in corporate education Page: 1/6 activities Replacing: 91- 003/1 1 Objective To establish the criteria and the procedures of COPASA MG employees participation in corporate education activities.

2 References In order to apply such rule, you may need to consult: a) the form “in-house activity not estimated in PEC”, available in public (U)\information\dvpo\forms; b) the form “external activity not estimated in PEC”, available in public (U)\information\dvpo\forms; c) PR “travel or transfer of employees at COPASA MG’s service”, available in Intranet\menu\institutional\procedural rule; d) PR “Personnel Attendance”, available in Intranet\menu\institutional\procedure rule.

3 Definitions In order to understand better such rule, the following definitions are applied:

a) corporate education activity – education, training, development and qualification actions, whether directly or indirectly related to the purpose activity of COPASA MG, programmed by initiative of the Corporate Education Unit and partnership units, comprising events, such as: lectures, meetings, courses, task training, upgrade meetings or transfer of know-how, seminars, congress, technical meetings, conventions, symposiums, conferences, forums, workshops. These are categorized as: a.1) estimated – activity identified by means of Survey for the Need of Training - LNT – and listed in the Corporate Education Program - PEC; a.2) not estimated – activity not identified on the occasion of LNT and derived from additional demands of units, approved by the Joint Executive Board and by proposition of the Corporate Education Unit in order to meet the institutional actions; a.3) in-house – activity promoted, coordinated and under the responsibility of instruction by COPASA MG employees; a.4) external – activity promoted, coordinated and under the responsibility of external instruction to the company; a.5) short duration – activity with working hours not exceeding forty (40) hours; a.6) long duration – activity with working hours exceeding forty (40) hours.

b) events list – a list of activities or types of events related to education, training, development and qualification composing PEC; c) events – corporate education activities performed;

6 EXHIBIT II MINUTES OF THE BOARD OF DIRECTORS MEETING HELD ON JUNE 29, 2006

PROCEDURAL RULE (PR) Nº: 2006-007/0 Participation in corporate education Page: 2/6 activities Replacing: 91- 003/1 d) Survey for the Need of Training – LNT – result of a diagnosis conducted annually with the organizational units to identify the need of corporate education, whether directly or indirectly related to purpose activity of COPASA MG; e) Corporate Education Program – PEC – final registration of diagnosis of the needs of education, training, development and qualification identified, which consists of summarizing the planning data of corporate education actions.

4 Attributions 4.1 Human Resources Superintendence: a) to propose the policies for employees’ participation in post-graduate courses and submit to the approval of the Joint Executive Board; b) to coordinate the corporate education and certification processes at COPASA MG; c) to approve the corporate education activities within its limit of competence; d) to submit PEC to the approval of the Joint Executive Board. 4.2 Corporate Education Unit: a) to plan the corporate education activity; b) to conduct the Survey for the Need of Training – LNT – , on an annual basis, together with the company’s units; c) to prepare the proposal to PEC; d) to analyze and authorize the demands for corporate education activities estimated in PEC; e) to analyze and, and where applicable, submit to the approval of the COPASA MG CEO the demands for corporate education not estimated in LNT; f) to prepare, follow-up and control the list of events considered in PEC; g) to disseminate PEC at the company; h) to coordinate, develop and implement corporate education activities, taking into account specific requirements for the in-house and external activities; i) to control the funds destined to the corporate education. 4.3 Organizational units: a) to identify the needs of training, which justify corporate education actions; b) to render all the information necessary to the Corporate Education Unit, upon the performance of LNT and preparation of PEC, as well as information inherent to the corporate education actions;

7 EXHIBIT II MINUTES OF THE BOARD OF DIRECTORS MEETING HELD ON JUNE 29, 2006

PROCEDURAL RULE Nº: 2006-007/0 Participation in corporate education Page: 3/6 activities Replacing: 91- 003/1 c) to behave according to PR “travel or transfer of employees at COPASA MG’s service”, when the event is held out of city, state or country where the employee is located; d) to the ease the performance of corporate education activities. 4.4 Corporate Education Technical Committee To evaluate the technical works to be submitted by employees in external events.

5 General conditions 5.1 The corporate education activity must be planned for Company’s actual employees. 5.2 The organizational units must identify the needs of training justifying corporate education actions. The manager should focus his/her corporate education requests taking into account the specific needs of the department, the activities of employees to be trained, the organizational objectives and the purpose activities of COPASA MG. 5.3 The Corporate Education Unit must plan the corporate education activity, based on identifying/prioritizing the relevant competencies, job position profiles and employee’s development plans. 5.4 The organizational units must render all the information necessary to the Corporate Education Unit, upon execution of LNT. 5.5 The Corporate Education Unit must carry out the Survey for the Need of Training– LNT on an annual basis. 5.5.1 LNT must contain the targeted public (number of participants, breakdown of expertise or duty), situation triggering the need of training, content to be developed, priority and nominal list of activities suggested. 5.6 The Corporate Education Unit must prepare the proposal to PEC until October of each year, containing the information about events (name of activity, number of participants, in-house or external activity, performance date and estimated cost) and submit to the approval of the Joint Executive Board. 5.7 The Corporate Education Unit must analyze and authorize the demands for corporate education activities estimated in PEC. 5.8 The Corporate Education Unit must coordinate, develop and implement the corporate education activities, taking into account: 5.8.1 For the in-house activities: a) materialize the event, build an educational detailed schedule, prepare the educational material and instructional tools, jointly with the training multipliers/instructors; b) plan the execution of the event;

8 EXHIBIT II MINUTES OF THE BOARD OF DIRECTORS MEETING HELD ON JUNE 29, 2006

PROCEDURAL RULE Nº: 2006-007/0 Participation in corporate education Page: 4/6 activities Replacing: 91- 003/1 c) receive from the units, at least, twenty (20) days in advance of the performance of event, the employees’ names to fill in the vacancies; d) provide the logistics and infrastructure to carry out the activity; e) communicate to employees and management of the unit that the participation is confirmed and further information related to the activity; f) issue the certificate of participation or progress, where applicable; g) evaluate the results of activity in four levels: reaction, learning, results and return of investment. 5.8.2 For external activities: a) research in the market the offering of activities meeting the demands for corporate education; b) negotiate, schedule and provide the contracting of external activity; c) provide the registration of employees appointed for the activity, based on names and enrollments informed by the demanding units; d) provide educational, methodological and logistic support to the external activities participants, when transferring know-how acquired. 5.9 When the employee participates in congress, seminar, convention, symposium, conference and forum, he/she must remain, at least, one (1) year in the relevant technical area. 5.9.1 When the employee participates in technical courses, he/she must remain, at least, two (2) years in the relevant technical area. 5.10 The employee’s failure to comply with the call results in the reimbursement to COPASA MG of the amounts paid and his/her suspension in corporate education activities for two (2) years.

6 Specific conditions 6.1 The employees’ participation in post-graduate courses must be of institutional interest, analyzed and approved by the Corporate Education Unit, according to the following criteria: a) the employee must have diploma in bachelor’s degree and pertain to the position as Sanitation Analyst and working, at least, for the past three (3) years at COPASA MG; b) the employees who have three (3) years to comply with the legal requirements to request retirement will be excluded from participating in the post-graduate courses; c) the employee must sign the instruments of commitment for attendance, progress in the course and permanence at COPASA MG after the conclusion of the course, for a minimum period equal to three times the duration of the course; d) in the event of employee’s voluntary dismissal prior to the time period committed, COPASA MG will require the reimbursement of amounts paid to the institution which gave the course, as well as the costs involved during its performance, including salary plus benefits paid to employee in the period, upon the final settlement of accounts with employee;

9 EXHIBIT II MINUTES OF THE BOARD OF DIRECTORS MEETING HELD ON JUNE 29, 2006

PROCEDURAL RULE Nº: 2006-007/0 Participation in corporate education Page: 5/6 activities Replacing: 91- 003/1 e) the non-attendance, the unsatisfactory progress, or employee’s giving up, as well as the non-presentation of monthly attendance certificate, or the non-attendance, will preclude his/her participation in training activities during two (2) years and the employee must reimburse the company for all the amounts paid, under same conditions in which the course was contracted; f) the course failure in any phase will imply the suspension of subsequent phases and the reimbursement to the company of all expenses and amounts paid, under same conditions spent by the company; g) the employee under disciplinary punishment over the past two (2) years may not take part in post-graduate courses; h) the maximum of two (2) employees per executive board every year may take part in same course; i) one employee per course and the maximum of three (3) employees per executive board every year may participate in different courses; j) the employee who already participated in post-graduate course subsidized by the company only may take part in another course, after elapsing the triple of duration of previous course; k) other criteria may be proposed by the Human Resource Superintendence and after its approval, disseminated by means of notice. 6.2 The presentation of technical works by employees in external events of COPASA MG’s interest, must be identified upon the LNT, as well as approved as per criteria established and only may occur by initiative of the company, as follows: a) the works to be submitted must be forwarded together with request or In-House Notice, in digital or printed copy, within forty-five (45) days of enrollment deadline for selection at the promoting entity for evaluation; b) in order to evaluate the technical works to be submitted by employees, the Corporate Education Technical Committee must observe: b.1) the relevance of disseminating the technical content; b.2) the relevance of method or technology to be presented; b.3) the availability of funds for the expenses; b.4) the institutional return enabled by the dissemination of work; b.5) the classification of work in the core theme of the event; b.6) the relevance of event where the work will be presented. 6.3 The transfer of know-how must occur within no later than thirty (30) days, after the performance of the event. Each external activity, implying the acquisition of skills will correspond to an in-house activity addressed to the targeted public and previously identified in LNT. The program content and working hours must correspond to the external activity, using the educational material obtained in the event, or material especially developed for the purpose of transfer of know- how.

10 EXHIBIT II MINUTES OF THE BOARD OF DIRECTORS MEETING HELD ON JUNE 29, 2006

PROCEDURAL RULE Nº: 2006-007/0 Participation in corporate education Page: 6/6 activities Replacing: 91- 003/1 6.3.1 The employee participating in an external event must prepare, as per model defined, and forward to the Corporate Educational Unit, within no later than fifteen (15) days after the performance of the event, a report about the activities he/she took part for disclosure at the Intranet. 6.3.2 The Corporate Education Unit must give support to the transfer of know-how activity, in accordance with the subitem 5.8.1. 6.4 The participation in activities not estimated in PEC, except for congress, seminars, conventions, symposiums, conferences and forums may be requested to the Corporate Education unit by means of forms “in-house or external activity not estimated in PEC”, at least, one hundred and twenty (120) days in advance of the event. 6.5 When the activity approved requires employee to travel, it shall be incumbent upon the employee’s unit to provide the necessary documentation, according to the PR “travel or transfer of employee at COPASA MG’s service”. 6.5.1 The unit must record the necessary expenses in its own cost center, by employing the accounting analysis referred to the expenditures made relative to the professional qualification of employees and inform the Corporate Education Unit, by means of specific procedure. 6.6 The employee’s attendance regularization is under the responsibility of his/her unit. 6.7 The Company’s units acting in partnership with the Corporate Education Unit, upon the performance of decentralized in-house activities must: a) plan the execution of the event; b) provide for the logistics and infrastructure of the activity; c) inform the employee about the confirmation of his/her participation and further information related to the activity; d) forward to the Corporate Education Unit, within no later than five (5) days after the performance of the event, an attendance list and the compilation of evaluation documents for the issuance of certificate, where applicable; e) inform the Corporate Education Unit about the amounts recorded in the accounting analysis, by means of specific procedure.

7 Final provisions 7.1 The terms fixed for this rule may be given more flexibility by the Joint Executive Board, when there is a real interest of the company. 7.2 This procedural rule is applied to all COPASA MG’s organizational units. 7.3 This procedural rule takes effect as from this date, the Superintendence Notice 16/04, as of 10/21/2004, PR “Participation in external events” 91-003/1 being revoked and further provisions otherwise.

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