Companhia De Saneamento De Minas Gerais
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Companhia de Saneamento de Minas Gerais 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 Belo Horizonte, state of Minas Gerais, at Rua Mar de Espanha, 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 Serra do Salitre, 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