UNITED STATES SECURITIES and EXCHANGE COMMISSION Washington, DC 20549
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As filed with the Securities and Exchange Commission on June 30, 2011 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 20-F ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2010 Commission file number: 001-14668 COMPANHIA PARANAENSE DE ENERGIA – COPEL (Exact Name of Registrant as Specified in its Charter) Energy Company of Paraná The Federative Republic of Brazil (Translation of Registrant’s Name into English) (Jurisdiction of Incorporation or Organization) Rua Coronel Dulcídio, 800 80420-170 Curitiba, Paraná, Brazil (Address of Principal Executive Offices) Lindolfo Zimmer +55 41 3222 2027 – [email protected] Rua Coronel Dulcídio, 800, 3rd floor - 80420-170 Curitiba, Paraná, Brazil (Name, telephone, e-mail and/or facsimile number and address of company contact person) Securities registered or to be registered pursuant to Section 12(b) of the Act: Title of Each Class Name of Each Exchange on Which Registered Preferred Class B Shares, without par value* New York Stock Exchange American Depositary Shares (as evidenced by American Depositary Receipts), New York Stock Exchange each representing one Preferred Class B Share * Not for trading, but only in connection with the listing of American Depositary Shares on the New York Stock Exchange. Securities registered or to be registered pursuant to Section 12(g) of the Act: None Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None Indicate the number of outstanding shares of each of the Issuer’s classes of capital or common stock as of December 31, 2010: 145,031,080 Common Shares, without par value 389,931 Class A Preferred Shares, without par value 128,234,364 Class B Preferred Shares, without par value Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. Yes No Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes No Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). N/A Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Securities Exchange Act of 1934. (Check one): Large accelerated filer Accelerated filer Non-accelerated filer Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing: U.S. GAAP IFRS Other If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow. N/A If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act of 1934). Yes No Table of Contents Page Presentation of Financial and Other Information 1 Forward-Looking Statements 3 Item 1. Identity of Directors, Senior Management and Advisers 4 Item 2. Offer Statistics and Expected Timetable 4 Item 3. Key Information 4 Exchange Rates 6 Risk Factors 7 Item 4. Information on the Company 14 The Company 14 The Brazilian Power Industry 33 Item 4A. Unresolved Staff Comments 45 Item 5. Operating and Financial Review and Prospects 45 Item 6. Directors, Senior Management and Employees 59 Item 7. Major Shareholders and Related Party Transactions 65 Related Party Transactions 67 Item 8. Financial Information 68 Legal Proceedings 68 Dividend Payments 69 Item 9. The Offer and Listing 72 Item 10. Additional Information 74 Memorandum and Articles of Association 74 Material Contracts 77 Exchange Controls 77 Taxation 79 Dividends and Paying Agents 84 Documents on Display 84 Item 11. Quantitative and Qualitative Disclosures about Market Risk 84 Item 12. Description of Securities Other than Equity Securities 84 Item 13. Defaults, Dividend Arrearages and Delinquencies 85 Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds 85 Item 15. Controls and Procedures 85 Item 16A. Audit Committee Financial Expert 87 Item 16B. Code of Ethics 87 Item 16C. Principal Accountant Fees and Services 87 Item 16D. Exemption from the Listing Standards for Audit Committees 88 Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers 88 Item 16F. Changes in Registrant’s Certifying Accountant 88 Item 16G. Corporate Governance 89 Item 17. Financial Statements 90 Item 18. Financial Statements 90 Item 19. Exhibits 90 Technical Glossary 91 Signatures 94 PRESENTATION OF FINANCIAL AND OTHER INFORMATION In this annual report, we refer to Companhia Paranaense de Energia — Copel, and, unless the context otherwise requires, its consolidated subsidiaries as “Copel,” the “Company,” “we” or “us.” References to (i) the “real,” “reais” or “R$” are to Brazilian reais (plural) and the Brazilian real (singular) and (ii) “U.S. dollars,” “dollars” or “US$” are to United States dollars. We maintain our books and records in reais. Our consolidated financial statements at December 31, 2010 and 2009 and for the two years ended December 31, 2010 have been audited, as stated in the report appearing herein, and are included in this annual report. We prepared our consolidated financial statements included in this annual report in accordance with International Financial Reporting Standards, or IFRS, as issued by the International Accounting Standards Board, or IASB. These consolidated annual financial statements are our first financial statements prepared in accordance with IFRS. IFRS 1 – “First-time Adoption of International Financial Reporting Standards” has been applied in preparing these financial statements, considering that our previous primary GAAP was Brazilian GAAP and that we have considered January 1, 2009 as the date of transition to IFRS. Reconciliations and descriptions of the effects of the transition from Brazilian GAAP to IFRS are included in note 4 to our consolidated financial statements. Until December 31, 2009, we prepared our consolidated financial statements in accordance with accounting practices adopted in Brazil in effect on and prior to December 31, 2009, or “Previous Brazilian GAAP”, which were based on: Brazilian Law No. 6,404/76, as amended by Brazilian Law No. 9,457/97, Brazilian Law No. 10,303/01, and Brazilian Law No. 11,638/07, which we refer to collectively as the Brazilian Corporation Law; the rules and regulations of the Brazilian Securities Commission (Comissão de Valores Mobiliários), or the CVM, the accounting standards issued by the Brazilian Institute of Independent Accountants (Instituto dos Auditores Independentes do Brasil), or Ibracon, and the Brazilian Federal Accounting Council (Conselho Federal de Contabilidade), or CFC; and the accounting standards issued by the Brazilian Accounting Standards Committee (Comitê de Pronunciamentos Contábeis), or the CPC, and applicable on and prior to December 31, 2009. In preparing our consolidated financial statements as of and for the two years ended December 31, 2010, the comparative figures in respect of 2009 have been restated to reflect the effects of the transition from Prior Brazilian GAAP to IFRS. We also prepare individual financial statements in accordance with accounting practices adopted in Brazil, or Brazilian GAAP, which include the pronouncements issued by the CPC applicable to dates and periods ended after December 31, 2009, for certain purposes, including for the calculation of dividends. We have not been required to prepare financial statements for any period prior to 2009 in accordance with IFRS. Therefore, our financial information derived from our consolidated financial statements as of and for the years ended December 31, 2008, 2007 and 2006 was prepared in accordance with Previous Brazilian GAAP. For periods before 2009, we prepared a reconciliation of our net income and shareholders’ equity from Previous Brazilian GAAP to U.S. GAAP. However, we have not prepared any reconciliation of shareholders' equity or net income from Previous Brazilian GAAP or U.S. GAAP to IFRS for periods before 2009. Accordingly, our financial information as of and for the years ended December 31, 2010 and 2009 is not directly comparable to our financial information as of and for the years ended December 31, 2008, 2007 and 2006. References in this annual report to the “Common Shares,” “Class A Shares” and “Class B Shares” are to our common shares, class A preferred shares and class B preferred shares, respectively. References to “American Depositary Shares” or “ADSs” are to American Depositary Shares, each representing one Class B Share. The ADSs are evidenced by American Depositary Receipts (“ADRs”). 1 Certain terms are defined the first time they are used in this annual report. As used herein, all references to “GW” and “GWh” are to gigawatts and gigawatt hours, respectively, references to “kW” and “kWh” are to kilowatts and kilowatt hours, respectively, references to “MW” and “MWh” are to megawatts and megawatt hours, respectively, and references to “kV” are to kilovolts. These and other technical terms are defined in the “Technical Glossary” that begins on page 91.