ANNUAL AND SUSTAINABILITY REPORT 2011
(GRI 3.3; 4.17)

Since 2005, COPASA publishes its economic, social and environmental results – integrated into a single document, allowing to meet the demands for information of diverse audiences, in a more broadly, objective and responsive way. Thus meeting the expectations of stakeholders, depicting the Company’s performance during the year ended.
The Company is constantly improving the process of drafting their reports. After an interval of two years, in 2010 the Annual and Sustainability Report returned to follow the methodology of the Global Reporting Initiative (GRI). In 2011, for the second consecutive year, the Company applies the B level of GRI guidelines.(GRI 3.1; 3.2; 3.11)

The Annual and Sustainability Report 2011 gathers information and data collected by the Company in all its units in the State of Minas Gerais, and includes the actions taken and the business and social results achieved over the considered period. In some sections of the report, specific cases of separate units were detailed, because of their relevance to the location or the involved audience. (GRI 3.7; 3.8)

In addition, the following principles were considered: (GRI 3.5)

Inclusion of stakeholders: There have been identified as key stakeholders of COPASA the customers; communities and society in general; Company employees; the Government of the State of Minas Gerais; suppliers and service providers; the capital market and investors. (GRI 4.15)

Scope: There were studied and reported the issues, information and indicators considered important for evaluating the performance and strategies of COPASA, as unitary company, in the economic, environmental and social dimensions. Additional information on subsidiaries of COPASA was assimilated in some cases, and was indicated in the text. (GRI 3.6)

Materiality: in 2011, COPASA introduced a formal analysis of materiality in order to identify the most relevant sustainability issues for its business and stakeholders. During the process, issues were raised which could interfere in the decisions of public interest, seeking to understand their perspectives on priority issues for the company.
The materiality analysis script identified the main issues in the internal and external perspectives, as outlined below:

Issues of materiality in the strategic perspective for COPASA

• Financial impact;
• targets disclosed in the Annual and Sustainability Report 2010;
• undertaken formal policies or public commitments (terms of behavior adjustment, mitigation and compensatory measures in licensing procedures, codes and commitments to social responsibility).

Questions of materiality for stakeholders

• Issues that other organizations in the sanitation sector, domestic and foreign, consider as of material nature;
• themes considered as relevant for key stakeholders.

Stakeholders and their information sources used to support the analysis of the substantive issues were:

The analysis results showed the material issues for COPASA:

Annual Social Report/2011

TABLE OF CONTENTS OF GLOBAL REPORTING INITIATIVE
(GRI 3.12)