<SEC-DOCUMENT>0001292814-18-002207.txt : 20180615
<SEC-HEADER>0001292814-18-002207.hdr.sgml : 20180615
<ACCEPTANCE-DATETIME>20180615101047
ACCESSION NUMBER:		0001292814-18-002207
CONFORMED SUBMISSION TYPE:	6-K
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20180630
FILED AS OF DATE:		20180615
DATE AS OF CHANGE:		20180615

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			COMPANHIA DE SANEAMENTO BASICO DO ESTADO DE SAO PAULO-SABESP
		CENTRAL INDEX KEY:			0001170858
		STANDARD INDUSTRIAL CLASSIFICATION:	WATER SUPPLY [4941]
		IRS NUMBER:				000000000
		STATE OF INCORPORATION:			D5
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		6-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-31317
		FILM NUMBER:		18901189

	BUSINESS ADDRESS:	
		STREET 1:		RUA COSTA CARVALHO, 300
		STREET 2:		SAO PAULO
		CITY:			SP
		STATE:			D5
		ZIP:			05429-900
		BUSINESS PHONE:		011-55-11-3388-8000

	MAIL ADDRESS:	
		STREET 1:		RUA COSTA CARVALHO, 300
		STREET 2:		SAO PAULO
		CITY:			SP
		STATE:			D5
		ZIP:			05429-900
</SEC-HEADER>
<DOCUMENT>
<TYPE>6-K
<SEQUENCE>1
<FILENAME>sbs20180528_6k1.htm
<DESCRIPTION>FORM 6-K
<TEXT>

<HTML>
<HEAD>
   <TITLE>sbs20180528_6k1.htm - Generated by SEC Publisher for SEC Filing</TITLE>
</HEAD>

<BODY bgcolor="#ffffff">



<HR align=left color=#000000 SIZE=2 noShade>



<DIV><FONT size=1></FONT>&nbsp;</DIV>

<DIV align=center><FONT color=#000000 size=3 face="Times New Roman"><B>SECURITIES AND EXCHANGE COMMISSION </B></FONT></DIV>

<DIV align=center><FONT color=#000000 size=3 face="Times New Roman"><B>Washington, DC 20549 </B></FONT></DIV>

<DIV><FONT size=1></FONT>&nbsp;</DIV>

<HR align=center color=#000000 SIZE=1 width="25%" noShade>



<DIV><FONT size=1></FONT>&nbsp;</DIV>

<DIV align=center><FONT color=#000000 size=3 face="Times New Roman"><B>FORM 6-K</B></FONT></DIV>

<DIV><FONT size=1></FONT>&nbsp;</DIV>

<DIV align=center><FONT color=#000000 size=3 face="Times New Roman"><B>REPORT OF FOREIGN ISSUER</B><BR><B>PURSUANT TO RULE 13a-16 OR 15d-16 OF THE</B></FONT></DIV>

<DIV align=center><FONT color=#000000 size=3 face="Times New Roman"><B>SECURITIES EXCHANGE ACT OF 1934</B></FONT></DIV>

<DIV><FONT size=1></FONT>&nbsp;</DIV>

<DIV align=center>

<DIV><FONT color=#000000 size=2 face="Times New Roman"><B>For&nbsp;May, 2018</B></FONT></DIV><FONT color=#000000 size=2 face="Times New Roman"><B>(Commission File No. 1-31317) </B></FONT></DIV>

<DIV><FONT size=1></FONT>&nbsp;</DIV>

<HR align=center color=#000000 SIZE=1 width="25%" noShade>



<DIV><FONT size=1></FONT>&nbsp;</DIV>

<DIV align=center><FONT color=#000000 size=3 face="Times New Roman"><B>Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo - SABESP </B></FONT></DIV>

<DIV align=center><FONT color=#000000 size=2 face="Times New Roman"><I>(Exact name of registrant as specified in its charter) </I></FONT></DIV>

<DIV><FONT size=1></FONT>&nbsp;</DIV>

<DIV align=center></DIV>

<DIV align=center><FONT color=#000000 size=3 face="Times New Roman"><B>Basic Sanitation Company of the State of Sao Paulo - SABESP </B></FONT></DIV>

<DIV align=center><FONT color=#000000 size=2 face="Times New Roman"><I>(Translation of Registrant's name into English) </I></FONT></DIV>

<DIV><FONT size=1></FONT>&nbsp;</DIV>

<HR align=center color=#000000 SIZE=1 width="25%" noShade>

<BR>

<DIV align=center><FONT color=#000000 size=2 face="Times New Roman"><B>Rua Costa Carvalho, 300 <BR>S&#227;o Paulo, S.P., 05429-900 <BR>Federative Republic of Brazil </B></FONT></DIV>

<DIV align=center><FONT color=#000000 size=2 face="Times New Roman"><I>(Address of Registrant's principal executive offices) </I></FONT></DIV><BR>

<HR align=center color=#000000 SIZE=1 width="25%" noShade>

<BR>

<DIV align=center><FONT color=#000000 size=2 face="Times New Roman">Indicate by check mark whether the registrant files or will file <BR>annual reports under cover Form 20-F or Form 40-F. <BR><BR>Form 20-F ___X___ Form 40-F ______</FONT></DIV>

<DIV align=center><FONT color=#000000 size=2 face="Times New Roman">Indicate by check mark if the registrant is submitting the Form 6-K <BR>in paper as permitted by Regulation S-T Rule 101(b)(1)__.</FONT></DIV>

<DIV align=center><FONT color=#000000 size=2 face="Times New Roman">Indicate by check mark if the registrant is submitting the Form 6-K <BR>in paper as permitted by Regulation S-T Rule 101(b)(7)__.</FONT></DIV>

<P align=center><FONT size=2 face="'Times New Roman, Times, Serif'">Indicate by check mark whether the registrant by furnishing the <BR>information contained in this Form is also thereby furnishing the <BR>information to the Commission pursuant to Rule 12g3-2(b) under <BR>the Securities Exchange Act of 1934. <BR><BR>Yes ______ No ___X___</FONT></P>

<DIV align=center><FONT color=#000000 size=2 face="Times New Roman">If "Yes" is marked, indicated below the file number assigned to the<BR>registrant in connection with Rule 12g3-2(b):</FONT> </DIV>

<HR align=left color=#000000 SIZE=2 noShade>



<DIV style="PAGE-BREAK-BEFORE: always">&nbsp;</DIV><A name="page_1"></A>

<a name="_bclPageBorder1"></a><DIV style="PADDING-LEFT: 0%; PADDING-RIGHT: 0%">

<DIV align=left>

<TABLE style="BORDER-TOP: medium none; BORDER-RIGHT: medium none; WIDTH: 100%; BORDER-BOTTOM: medium none; BORDER-LEFT: medium none" cellSpacing=0 cellPadding=0 border=0>



<TR style="HEIGHT: 16.4pt">

   <TD style="BORDER-TOP: #999999 1pt solid; HEIGHT: 16.4pt; BORDER-RIGHT: #999999 1pt solid; BORDER-BOTTOM: #999999 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; BORDER-LEFT: #999999 1pt solid; PADDING-RIGHT: 5.4pt" rowSpan=5 width="11%">

   <P style="TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt 0pt; TEXT-INDENT: 5.4pt" align=center><FONT style="FONT-SIZE: 12pt" face=Arial,sans-serif>&nbsp;
   <IMG src="x18052819061800.jpg" width=51 height=67></FONT></P></TD>

   <TD style="BORDER-TOP: #999999 1pt solid; HEIGHT: 16.4pt; BORDER-RIGHT: #999999 1pt solid; BORDER-BOTTOM: #999999 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" width="89%" colSpan=4>

   <P style="TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><B><FONT lang=EN-US style="FONT-SIZE: 11pt" face=verdana,sans-serif>Organizational Instrument</FONT></B></P></TD></TR>

<TR style="HEIGHT: 2.6pt">

   <TD style="HEIGHT: 2.6pt; BORDER-RIGHT: #999999 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" vAlign=top width="70%" colSpan=3>

   <P style="MARGIN: 1pt 0cm 0.3pt"><FONT lang=EN-US style="FONT-SIZE: 4pt" color=gray face=verdana,sans-serif>Type:</FONT></P></TD>

   <TD style="HEIGHT: 2.6pt; BORDER-RIGHT: #999999 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" vAlign=top width="19%">

   <P style="MARGIN: 1pt 0cm 0.3pt"><FONT lang=EN-US style="FONT-SIZE: 4pt" color=gray face=verdana,sans-serif>Phase:</FONT></P></TD></TR>

<TR style="HEIGHT: 8.75pt">

   <TD style="HEIGHT: 8.75pt; BORDER-RIGHT: #999999 1pt solid; BORDER-BOTTOM: #999999 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" width="70%" colSpan=3>

   <P style="MARGIN: 2pt 0cm"><B><FONT lang=EN-US style="FONT-SIZE: 7pt" face=Arial,sans-serif>Institutional Policy</FONT></B></P></TD>

   <TD style="HEIGHT: 8.75pt; BORDER-RIGHT: #999999 1pt solid; BORDER-BOTTOM: #999999 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" width="19%">

   <P style="MARGIN: 2pt 0cm"><B><FONT lang=EN-US style="FONT-SIZE: 7pt" face=Arial,sans-serif>Valid </FONT></B></P></TD></TR>

<TR style="HEIGHT: 2.6pt">

   <TD style="HEIGHT: 2.6pt; BORDER-RIGHT: #999999 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" vAlign=top width="70%" colSpan=3>

   <P style="MARGIN: 1pt 0cm 0.3pt"><FONT lang=EN-US style="FONT-SIZE: 4pt" color=gray face=verdana,sans-serif>Title:</FONT></P></TD>

   <TD style="HEIGHT: 2.6pt; BORDER-RIGHT: #999999 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" vAlign=top width="19%">

   <P style="MARGIN: 1pt 0cm 0.3pt"><FONT lang=EN-US style="FONT-SIZE: 4pt" color=gray face=verdana,sans-serif>Number and Version:</FONT></P></TD></TR>

<TR style="HEIGHT: 8.75pt">

   <TD style="HEIGHT: 8.75pt; BORDER-RIGHT: #999999 1pt solid; BORDER-BOTTOM: #999999 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" vAlign=top width="70%" colSpan=3>

   <P style="MARGIN: 2pt 0cm"><B><FONT lang=EN-US style="FONT-SIZE: 7pt" face=Arial,sans-serif>CORPORATE RISK MANAGEMENT</FONT></B></P></TD>

   <TD style="HEIGHT: 8.75pt; BORDER-RIGHT: #999999 1pt solid; BORDER-BOTTOM: #999999 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" vAlign=top width="19%">

   <P style="MARGIN: 2pt 0cm"><B><FONT lang=EN-US style="FONT-SIZE: 7pt" face=Arial,sans-serif>PI0028 - V.2</FONT></B></P></TD></TR>

<TR style="HEIGHT: 2.6pt">

   <TD style="HEIGHT: 2.6pt; BORDER-RIGHT: #999999 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; BORDER-LEFT: #999999 1pt solid; PADDING-RIGHT: 5.4pt" vAlign=top width="18%" colSpan=2>

   <P style="MARGIN: 1pt 0cm 0.3pt"><FONT lang=EN-US style="FONT-SIZE: 4pt" color=gray face=verdana,sans-serif>Issuing Area:</FONT></P></TD>

   <TD style="HEIGHT: 2.6pt; BORDER-RIGHT: #999999 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" vAlign=top width="43%">

   <P style="MARGIN: 1pt 0cm 0.3pt"><FONT lang=EN-US style="FONT-SIZE: 4pt" color=gray face=verdana,sans-serif>Approver:</FONT></P></TD>

   <TD style="HEIGHT: 2.6pt; BORDER-RIGHT: #999999 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" vAlign=top width="20%">

   <P style="MARGIN: 1pt 0cm 0.3pt"><FONT lang=EN-US style="FONT-SIZE: 4pt" color=gray face=verdana,sans-serif>Validity - 1st version:</FONT></P></TD>

   <TD style="HEIGHT: 2.6pt; BORDER-RIGHT: #999999 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" vAlign=top width="19%">

   <P style="MARGIN: 1pt 0cm 0.3pt"><FONT lang=EN-US style="FONT-SIZE: 4pt" color=gray face=verdana,sans-serif>Validity - this version:</FONT></P></TD></TR>

<TR style="HEIGHT: 8.35pt">

   <TD style="HEIGHT: 8.35pt; BORDER-RIGHT: #999999 1pt solid; BORDER-BOTTOM: #999999 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; BORDER-LEFT: #999999 1pt solid; PADDING-RIGHT: 5.4pt" vAlign=top width="18%" colSpan=2>

   <P style="MARGIN: 2pt 0cm"><FONT lang=EN-US style="FONT-SIZE: 7pt" face=Arial,sans-serif>PK</FONT></P></TD>

   <TD style="HEIGHT: 8.35pt; BORDER-RIGHT: #999999 1pt solid; BORDER-BOTTOM: #999999 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" vAlign=top width="43%">

   <P style="MARGIN: 2pt 0cm"><FONT lang=EN-US style="FONT-SIZE: 7pt" face=Arial,sans-serif>DANTE RAGAZZI PAULI - DRPAULI</FONT></P></TD>

   <TD style="HEIGHT: 8.35pt; BORDER-RIGHT: #999999 1pt solid; BORDER-BOTTOM: #999999 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" vAlign=top width="20%">

   <P style="TEXT-ALIGN: center; MARGIN: 2pt 0cm" align=center><FONT lang=EN-US style="FONT-SIZE: 7pt" face=Arial,sans-serif>June 25, 2010</FONT></P></TD>

   <TD style="HEIGHT: 8.35pt; BORDER-RIGHT: #999999 1pt solid; BORDER-BOTTOM: #999999 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" vAlign=top width="19%">

   <P style="TEXT-ALIGN: center; MARGIN: 2pt 0cm" align=center><FONT lang=EN-US style="FONT-SIZE: 7pt" face=Arial,sans-serif>May 12, 2016</FONT></P></TD></TR>

<TR style="HEIGHT: 3.65pt">

   <TD style="HEIGHT: 3.65pt; BORDER-RIGHT: #999999 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; BORDER-LEFT: #999999 1pt solid; PADDING-RIGHT: 5.4pt" vAlign=top width="61%" colSpan=3>

   <P style="MARGIN: 1pt 0cm 0.3pt"><FONT lang=EN-US style="FONT-SIZE: 4pt" color=gray face=verdana,sans-serif>Related Areas (Scope):</FONT></P></TD>

   <TD style="HEIGHT: 3.65pt; BORDER-RIGHT: #999999 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" vAlign=top width="39%" colSpan=2>

   <P style="MARGIN: 1pt 0cm 0.3pt"><FONT lang=EN-US style="FONT-SIZE: 4pt" color=gray face=verdana,sans-serif>Processes:</FONT></P></TD></TR>

<TR style="HEIGHT: 3.1pt">

   <TD style="HEIGHT: 3.1pt; BORDER-RIGHT: #999999 1pt solid; BORDER-BOTTOM: #999999 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; BORDER-LEFT: #999999 1pt solid; PADDING-RIGHT: 5.4pt" vAlign=top width="61%" colSpan=3>

   <P style="MARGIN: 2pt 0cm"><FONT lang=EN-US style="FONT-SIZE: 7pt" face=Arial,sans-serif>SABESP</FONT></P></TD>

   <TD style="HEIGHT: 3.1pt; BORDER-RIGHT: #999999 1pt solid; BORDER-BOTTOM: #999999 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" vAlign=top width="39%" colSpan=2>

   <P style="MARGIN: 2pt 0cm"><FONT lang=EN-US style="FONT-SIZE: 7pt" face=Arial,sans-serif>---</FONT></P></TD></TR>

<TR>

   <TD width="11%">&nbsp;</TD>

   <TD width="7%">&nbsp;</TD>

   <TD width="43%">&nbsp;</TD>

   <TD width="20%">&nbsp;</TD>

   <TD width="19%">&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 12pt 0cm 0pt"><FONT lang=EN-US style="FONT-SIZE: 12pt" face=Arial,sans-serif></FONT>&nbsp;</P>

<H1 style="PAGE-BREAK-AFTER: avoid; MARGIN: 0cm 0cm 12pt 21.25pt; TEXT-INDENT: -21.25pt"><B><FONT lang=EN-US style="FONT-SIZE: 12pt" face=Arial,sans-serif>1.</FONT></B><B><FONT lang=EN-US style="FONT-SIZE: 7pt" face="times new roman">&nbsp;&nbsp;&nbsp;&nbsp; </FONT></B><B><FONT lang=EN-US style="FONT-SIZE: 12pt" face=Arial,sans-serif>&nbsp;INTRODUCTION</FONT></B></H1>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt 21.3pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>The purpose of this Institutional Policy for Corporate Risk Management is to introduce risk evaluation practices in the corporate environment and help improve corporate governance and business planning while preserving and generating value for the organization.</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt 21.3pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif></FONT>&nbsp;</P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt 21.3pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>The corporate risk management process is based on the Committee of Sponsoring Organizations of the Treadway Commission&#8217;s Enterprise Risk Management Framework 2004, ABNT NBR ISO 31000: 2009, and ABNT ISO GUIA 73: 2009.</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt 21.3pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif></FONT>&nbsp;</P>

<H1 style="PAGE-BREAK-AFTER: avoid; MARGIN: 12pt 0cm 12pt 21.25pt; TEXT-INDENT: -21.25pt"><B><FONT lang=EN-US style="FONT-SIZE: 12pt" face=Arial,sans-serif>2.</FONT></B><B><FONT lang=EN-US style="FONT-SIZE: 7pt" face="times new roman">&nbsp;&nbsp;&nbsp;&nbsp; </FONT></B><B><FONT lang=EN-US style="FONT-SIZE: 12pt" face=Arial,sans-serif>PURPOSE</FONT></B></H1>

<P style="TEXT-ALIGN: justify; MARGIN: 3pt 0cm 6pt 42.55pt; TEXT-INDENT: -21.3pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>2.1.&nbsp; Determine corporate risk management guidelines, concepts and competences.</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 3pt 0cm 6pt 42.55pt; TEXT-INDENT: -21.3pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>2.2. Incorporate risk vision into decision making in line with best practices in the market.</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 3pt 0cm 6pt 42.55pt; TEXT-INDENT: -21.3pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>2.3.&nbsp; Add value to the organization, make information more transparent, improve governance practices and help make the company sustainable.</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 3pt 0cm 6pt 42.55pt; TEXT-INDENT: -21.3pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>2.4. Spread risk management culture and take action on all of the organization's hierarchical levels using plain language.</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 3pt 0cm 6pt 42.55pt; TEXT-INDENT: -21.3pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif></FONT>&nbsp;</P>

<H1 style="PAGE-BREAK-AFTER: avoid; MARGIN: 12pt 0cm 12pt 21.25pt; TEXT-INDENT: -21.25pt"><B><FONT lang=EN-US style="FONT-SIZE: 12pt" face=Arial,sans-serif>3.</FONT></B><B><FONT lang=EN-US style="FONT-SIZE: 7pt" face="times new roman">&nbsp;&nbsp;&nbsp;&nbsp; </FONT></B><B><FONT lang=EN-US style="FONT-SIZE: 12pt" face=Arial,sans-serif>GUIDELINES</FONT></B></H1>

<P style="TEXT-ALIGN: justify; MARGIN: 3pt 0cm 6pt 42.55pt; TEXT-INDENT: -21.3pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>3.1.&nbsp; Business strategy and work processes must address risks and risk management.</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 3pt 0cm 6pt 42.55pt; TEXT-INDENT: -21.3pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>3.2.&nbsp; Risk management culture must involve all of the company's hierarchical levels.</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 3pt 0cm 6pt 42.55pt; TEXT-INDENT: -21.3pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>3.3.&nbsp; Employees involved in risk management activities must be trained in the methodology used.</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 3pt 0cm 6pt 42.55pt; TEXT-INDENT: -21.3pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>3.4.&nbsp; Process risks must be identified, evaluated, communicated, treated and monitored as an opportunity for improvement</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 3pt 0cm 6pt 42.55pt; TEXT-INDENT: -21.3pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>3.5.&nbsp; Risks must be evaluated and monitored by the Board of Directors, Audit Committee, Executive Board, Corporate Risk Management Committee, Departments, Superintendencies and Business Units</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 3pt 0cm 6pt 42.55pt; TEXT-INDENT: -21.3pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>3.6.&nbsp; Corporate risk management must involve all areas of the company, using plain language and established policy and procedural standards.</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 3pt 0cm 6pt 42.55pt; TEXT-INDENT: -21.3pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>3.7.&nbsp; All risk exposures must be evaluated, their treatment decided and, if necessary, action plans devised, while identifying persons responsible and risk monitoring indicators. </FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 3pt 0cm 6pt 21.3pt; TEXT-INDENT: -0.05pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>3.8.&nbsp; Risk management must be periodically improved by frequent evaluation and review cycles or in response to specific events, thus favoring continuous improvement and strengthening strategic business guidelines.</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 3pt 0cm 6pt 42.55pt; TEXT-INDENT: -21.3pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>3.9.&nbsp; The company must use the results of risk evaluations to prepare and / or review contingency plans.</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 3pt 0cm 6pt 49.65pt; TEXT-INDENT: -28.4pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>3.10.&nbsp; Corporate risks </FONT><U><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>must</FONT></U><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif> be reported to stakeholders at the Company's discretion, through the appropriate channels aligned with legislation and good corporate governance practices.</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 3pt 0cm 6pt 49.65pt; TEXT-INDENT: -28.4pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>3.11.&nbsp; Responsibilities for approval and treatment of risk are defined by levels of risk (impact and likelihood of occurrence).</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 3pt 0cm 6pt 49.65pt; TEXT-INDENT: -28.4pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>3.12.&nbsp; Risks must be classified by nature, category and origin of events (internal or external) defined in business procedure</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 3pt 0cm 6pt 49.65pt; TEXT-INDENT: -28.4pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif></FONT>&nbsp;</P>

<P style="TEXT-ALIGN: justify; MARGIN: 3pt 0cm 6pt 49.65pt; TEXT-INDENT: -28.4pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif></FONT>&nbsp;</P></DIV>

<HR align=center SIZE=2 width="100%" noShade>



<DIV style="PAGE-BREAK-BEFORE: always">&nbsp;</DIV>

<A name="page_2"></A>

<a name="_bclPageBorder2"></a><DIV style="PADDING-LEFT: 0%; PADDING-RIGHT: 0%">

<DIV align=left>

<TABLE style="BORDER-TOP: medium none; BORDER-RIGHT: medium none; WIDTH: 100%; BORDER-BOTTOM: medium none; BORDER-LEFT: medium none" cellSpacing=0 cellPadding=0 border=0>



<TR style="HEIGHT: 16.4pt">

   <TD style="BORDER-TOP: #999999 1pt solid; HEIGHT: 16.4pt; BORDER-RIGHT: #999999 1pt solid; BORDER-BOTTOM: #999999 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; BORDER-LEFT: #999999 1pt solid; PADDING-RIGHT: 5.4pt" rowSpan=5 width="11%">

   <P style="TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt 0pt; TEXT-INDENT: 5.4pt" align=center>
   <IMG src="x18052819061800.jpg" width=51 height=67></P></TD>

   <TD style="BORDER-TOP: #999999 1pt solid; HEIGHT: 16.4pt; BORDER-RIGHT: #999999 1pt solid; BORDER-BOTTOM: #999999 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" width="89%" colSpan=4>

   <P style="TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><B><FONT lang=EN-US style="FONT-SIZE: 11pt" face=verdana,sans-serif>Organizational Instrument</FONT></B></P></TD></TR>

<TR style="HEIGHT: 2.6pt">

   <TD style="HEIGHT: 2.6pt; BORDER-RIGHT: #999999 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" vAlign=top width="70%" colSpan=3>

   <P style="MARGIN: 1pt 0cm 0.3pt"><FONT lang=EN-US style="FONT-SIZE: 4pt" color=gray face=verdana,sans-serif>Type:</FONT></P></TD>

   <TD style="HEIGHT: 2.6pt; BORDER-RIGHT: #999999 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" vAlign=top width="19%">

   <P style="MARGIN: 1pt 0cm 0.3pt"><FONT lang=EN-US style="FONT-SIZE: 4pt" color=gray face=verdana,sans-serif>Phase:</FONT></P></TD></TR>

<TR style="HEIGHT: 8.75pt">

   <TD style="HEIGHT: 8.75pt; BORDER-RIGHT: #999999 1pt solid; BORDER-BOTTOM: #999999 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" width="70%" colSpan=3>

   <P style="MARGIN: 2pt 0cm"><B><FONT lang=EN-US style="FONT-SIZE: 7pt" face=Arial,sans-serif>Institutional Policy</FONT></B></P></TD>

   <TD style="HEIGHT: 8.75pt; BORDER-RIGHT: #999999 1pt solid; BORDER-BOTTOM: #999999 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" width="19%">

   <P style="MARGIN: 2pt 0cm"><B><FONT lang=EN-US style="FONT-SIZE: 7pt" face=Arial,sans-serif>Valid</FONT></B></P></TD></TR>

<TR style="HEIGHT: 2.6pt">

   <TD style="HEIGHT: 2.6pt; BORDER-RIGHT: #999999 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" vAlign=top width="70%" colSpan=3>

   <P style="MARGIN: 1pt 0cm 0.3pt"><FONT lang=EN-US style="FONT-SIZE: 4pt" color=gray face=verdana,sans-serif>Title:</FONT></P></TD>

   <TD style="HEIGHT: 2.6pt; BORDER-RIGHT: #999999 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" vAlign=top width="19%">

   <P style="MARGIN: 1pt 0cm 0.3pt"><FONT lang=EN-US style="FONT-SIZE: 4pt" color=gray face=verdana,sans-serif>Number and Version:</FONT></P></TD></TR>

<TR style="HEIGHT: 8.75pt">

   <TD style="HEIGHT: 8.75pt; BORDER-RIGHT: #999999 1pt solid; BORDER-BOTTOM: #999999 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" vAlign=top width="70%" colSpan=3>

   <P style="MARGIN: 2pt 0cm"><B><FONT lang=EN-US style="FONT-SIZE: 7pt" face=Arial,sans-serif>CORPORATE RISK MANAGEMENT</FONT></B></P></TD>

   <TD style="HEIGHT: 8.75pt; BORDER-RIGHT: #999999 1pt solid; BORDER-BOTTOM: #999999 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" vAlign=top width="19%">

   <P style="MARGIN: 2pt 0cm"><B><FONT lang=EN-US style="FONT-SIZE: 7pt" face=Arial,sans-serif>PI0028 - V.2</FONT></B></P></TD></TR>

<TR style="HEIGHT: 2.6pt">

   <TD style="HEIGHT: 2.6pt; BORDER-RIGHT: #999999 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; BORDER-LEFT: #999999 1pt solid; PADDING-RIGHT: 5.4pt" vAlign=top width="18%" colSpan=2>

   <P style="MARGIN: 1pt 0cm 0.3pt"><FONT lang=EN-US style="FONT-SIZE: 4pt" color=gray face=verdana,sans-serif>Issuer Area:</FONT></P></TD>

   <TD style="HEIGHT: 2.6pt; BORDER-RIGHT: #999999 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" vAlign=top width="43%">

   <P style="MARGIN: 1pt 0cm 0.3pt"><FONT lang=EN-US style="FONT-SIZE: 4pt" color=gray face=verdana,sans-serif>Approver:</FONT></P></TD>

   <TD style="HEIGHT: 2.6pt; BORDER-RIGHT: #999999 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" vAlign=top width="20%">

   <P style="MARGIN: 1pt 0cm 0.3pt"><FONT lang=EN-US style="FONT-SIZE: 4pt" color=gray face=verdana,sans-serif>Validity of 1st version:</FONT></P></TD>

   <TD style="HEIGHT: 2.6pt; BORDER-RIGHT: #999999 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" vAlign=top width="19%">

   <P style="MARGIN: 1pt 0cm 0.3pt"><FONT lang=EN-US style="FONT-SIZE: 4pt" color=gray face=verdana,sans-serif>Validity of this version:</FONT></P></TD></TR>

<TR style="HEIGHT: 8.35pt">

   <TD style="HEIGHT: 8.35pt; BORDER-RIGHT: #999999 1pt solid; BORDER-BOTTOM: #999999 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; BORDER-LEFT: #999999 1pt solid; PADDING-RIGHT: 5.4pt" vAlign=top width="18%" colSpan=2>

   <P style="MARGIN: 2pt 0cm"><FONT lang=EN-US style="FONT-SIZE: 7pt" face=Arial,sans-serif>PK</FONT></P></TD>

   <TD style="HEIGHT: 8.35pt; BORDER-RIGHT: #999999 1pt solid; BORDER-BOTTOM: #999999 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" vAlign=top width="43%">

   <P style="MARGIN: 2pt 0cm"><FONT lang=EN-US style="FONT-SIZE: 7pt" face=Arial,sans-serif>DANTE RAGAZZI PAULI - DRPAULI</FONT></P></TD>

   <TD style="HEIGHT: 8.35pt; BORDER-RIGHT: #999999 1pt solid; BORDER-BOTTOM: #999999 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" vAlign=top width="20%">

   <P style="TEXT-ALIGN: center; MARGIN: 2pt 0cm" align=center><FONT lang=EN-US style="FONT-SIZE: 7pt" face=Arial,sans-serif>June 25, 2010</FONT></P></TD>

   <TD style="HEIGHT: 8.35pt; BORDER-RIGHT: #999999 1pt solid; BORDER-BOTTOM: #999999 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" vAlign=top width="19%">

   <P style="TEXT-ALIGN: center; MARGIN: 2pt 0cm" align=center><FONT lang=EN-US style="FONT-SIZE: 7pt" face=Arial,sans-serif>May 12, 2016</FONT></P></TD></TR>

<TR style="HEIGHT: 3.65pt">

   <TD style="HEIGHT: 3.65pt; BORDER-RIGHT: #999999 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; BORDER-LEFT: #999999 1pt solid; PADDING-RIGHT: 5.4pt" vAlign=top width="61%" colSpan=3>

   <P style="MARGIN: 1pt 0cm 0.3pt"><FONT lang=EN-US style="FONT-SIZE: 4pt" color=gray face=verdana,sans-serif>Related Areas (Scope):</FONT></P></TD>

   <TD style="HEIGHT: 3.65pt; BORDER-RIGHT: #999999 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" vAlign=top width="39%" colSpan=2>

   <P style="MARGIN: 1pt 0cm 0.3pt"><FONT lang=EN-US style="FONT-SIZE: 4pt" color=gray face=verdana,sans-serif>Processes:</FONT></P></TD></TR>

<TR style="HEIGHT: 3.1pt">

   <TD style="HEIGHT: 3.1pt; BORDER-RIGHT: #999999 1pt solid; BORDER-BOTTOM: #999999 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; BORDER-LEFT: #999999 1pt solid; PADDING-RIGHT: 5.4pt" vAlign=top width="61%" colSpan=3>

   <P style="MARGIN: 2pt 0cm"><FONT lang=EN-US style="FONT-SIZE: 7pt" face=Arial,sans-serif>SABESP</FONT></P></TD>

   <TD style="HEIGHT: 3.1pt; BORDER-RIGHT: #999999 1pt solid; BORDER-BOTTOM: #999999 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" vAlign=top width="39%" colSpan=2>

   <P style="MARGIN: 2pt 0cm"><FONT lang=EN-US style="FONT-SIZE: 7pt" face=Arial,sans-serif>---</FONT></P></TD></TR>

<TR>

   <TD width="11%">&nbsp;</TD>

   <TD width="7%">&nbsp;</TD>

   <TD width="43%">&nbsp;</TD>

   <TD width="20%">&nbsp;</TD>

   <TD width="19%">&nbsp;</TD></TR></TABLE></DIV>

<P style="TEXT-ALIGN: justify; MARGIN: 3pt 0cm 6pt 49.65pt; TEXT-INDENT: -28.4pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif></FONT>&nbsp;</P>

<P style="TEXT-ALIGN: justify; MARGIN: 3pt 0cm 6pt 49.65pt; TEXT-INDENT: -28.4pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>3.13.&nbsp; The competences of the Board of Directors, Audit Committee, Executive Board, Corporate Risk Management Committee, Departments, Superintendence of Risk and Quality Management, Superintendencies and Business Units are defined in the appendix to this Policy</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 3pt 0cm 6pt 49.65pt; TEXT-INDENT: -28.4pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>3.14.&nbsp; Risk management professionals must have access to all areas of the company, employees, documents, data and information required for their activities.</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 3pt 0cm 6pt 49.65pt; TEXT-INDENT: -28.4pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>3.15.&nbsp; The functional authority for Corporate Risk Management is the Risk Management and Quality Superintendence, subordinated hierarchically to the Presidency and functionally to the Audit Committee.</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 3pt 0cm 6pt 49.65pt; TEXT-INDENT: -28.4pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>3.16.&nbsp; This policy must also be disclosed to the members of the Board of Directors, Audit Committee and Corporate Risk Management Committee.</FONT></P>

<H1 style="PAGE-BREAK-AFTER: avoid; MARGIN: 12pt 0cm 12pt 21.25pt; TEXT-INDENT: -21.25pt"><B><FONT lang=EN-US style="FONT-SIZE: 12pt" face=Arial,sans-serif>4.</FONT></B><B><FONT lang=EN-US style="FONT-SIZE: 7pt" face="times new roman">&nbsp;&nbsp;&nbsp;&nbsp; </FONT></B><B><FONT lang=EN-US style="FONT-SIZE: 12pt" face=Arial,sans-serif>Supplements</FONT></B></H1>

<DIV align=left>

<TABLE style="BORDER-TOP: medium none; BORDER-RIGHT: medium none; WIDTH: 100%; BORDER-BOTTOM: medium none; BORDER-LEFT: medium none" cellSpacing=0 cellPadding=0 border=0>



<TR>

   <TD style="BORDER-TOP: #999999 1pt solid; BORDER-RIGHT: #999999 1pt solid; BACKGROUND: #d9d9d9; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; BORDER-LEFT: #999999 1pt solid; PADDING-RIGHT: 5.4pt" vAlign=top width="33%">

   <P style="PAGE-BREAK-AFTER: avoid; MARGIN: 0.3pt 0cm"><FONT lang=EN-US style="FONT-SIZE: 3pt" color=gray face=verdana,sans-serif>Annexes Referenced (Annex Base)</FONT></P></TD>

   <TD style="BORDER-TOP: #999999 1pt solid; BORDER-RIGHT: #999999 1pt solid; BACKGROUND: #d9d9d9; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" vAlign=top width="33%">

   <P style="PAGE-BREAK-AFTER: avoid; MARGIN: 0.3pt 0cm"><FONT lang=EN-US style="FONT-SIZE: 3pt" color=gray face=verdana,sans-serif>Documents Referenced </FONT></P></TD>

   <TD style="BORDER-TOP: #999999 1pt solid; BORDER-RIGHT: #999999 1pt solid; BACKGROUND: #d9d9d9; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" vAlign=top width="34%">

   <P style="PAGE-BREAK-AFTER: avoid; MARGIN: 0.3pt 0cm"><FONT lang=EN-US style="FONT-SIZE: 3pt" color=gray face=verdana,sans-serif>Register Information</FONT></P></TD></TR>

<TR>

   <TD style="BORDER-RIGHT: #999999 1pt solid; BORDER-BOTTOM: #999999 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; BORDER-LEFT: #999999 1pt solid; PADDING-RIGHT: 5.4pt" vAlign=top width="33%">

   <P style="PAGE-BREAK-AFTER: avoid; MARGIN: 2pt 0cm"><FONT lang=EN-US style="FONT-SIZE: 5pt" color=black face=Arial,sans-serif>---</FONT></P></TD>

   <TD style="BORDER-RIGHT: #999999 1pt solid; BORDER-BOTTOM: #999999 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" vAlign=top width="33%">

   <P style="PAGE-BREAK-AFTER: avoid; MARGIN: 2pt 0cm"><FONT lang=EN-US style="FONT-SIZE: 5pt" color=black face=Arial,sans-serif>---</FONT></P></TD>

   <TD style="BORDER-RIGHT: #999999 1pt solid; BORDER-BOTTOM: #999999 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" vAlign=top width="34%">

   <P style="PAGE-BREAK-AFTER: avoid; MARGIN: 2pt 0cm"><FONT lang=EN-US style="FONT-SIZE: 5pt" color=black face=Arial,sans-serif>---</FONT></P></TD></TR>

<TR>

   <TD style="BORDER-RIGHT: #999999 1pt solid; BACKGROUND: #d9d9d9; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; BORDER-LEFT: #999999 1pt solid; PADDING-RIGHT: 5.4pt" vAlign=top width="100%" colSpan=3>

   <P style="PAGE-BREAK-AFTER: avoid; MARGIN: 0.3pt 0cm"><FONT lang=EN-US style="FONT-SIZE: 3pt" color=gray face=verdana,sans-serif>&nbsp;Files Attached (Organizational Instrument's Supplementary Files)</FONT></P></TD></TR>

<TR>

   <TD style="BORDER-RIGHT: #999999 1pt solid; BORDER-BOTTOM: #999999 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; BORDER-LEFT: #999999 1pt solid; PADDING-RIGHT: 5.4pt" vAlign=top width="100%" colSpan=3>

   <P style="PAGE-BREAK-AFTER: avoid; MARGIN: 2pt 0cm"><FONT lang=EN-US style="FONT-SIZE: 5pt" color=black face=Arial,sans-serif>PI0028v2 - Annex 01 Concepts.pdf</FONT></P>

   <P style="PAGE-BREAK-AFTER: avoid; MARGIN: 2pt 0cm"><FONT lang=EN-US style="FONT-SIZE: 5pt" color=black face=Arial,sans-serif>PI0028v2 &#8211; Annex 02 Competences</FONT></P></TD></TR></TABLE></DIV></DIV>

<HR align=center SIZE=2 width="100%" noShade>



<DIV style="PAGE-BREAK-BEFORE: always">&nbsp;</DIV>

<A name="page_3"></A>

<a name="_bclPageBorder3"></a><DIV style="PADDING-LEFT: 0%; PADDING-RIGHT: 0%">

<P style="PAGE-BREAK-AFTER: avoid; MARGIN: 0cm 0cm 0pt 18pt"><FONT lang=EN-US style="FONT-SIZE: 9pt" face=Arial,sans-serif></FONT>&nbsp;</P>

<DIV align=left>

<TABLE style="BORDER-TOP: medium none; BORDER-RIGHT: medium none; WIDTH: 100%; BORDER-BOTTOM: medium none; BORDER-LEFT: medium none" cellSpacing=0 cellPadding=0 border=0>



<TR>

   <TD style="BORDER-TOP: windowtext 1pt solid; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; BORDER-LEFT: windowtext 1pt solid; PADDING-RIGHT: 5.4pt" vAlign=top rowSpan=4 width="13%">

   <P style="TEXT-ALIGN: center; MARGIN: 3pt 0cm">
   <IMG src="x18052819061800.jpg" width=51 height=67></P></TD>

   <TD style="BORDER-TOP: windowtext 1pt solid; BORDER-RIGHT: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" vAlign=top width="73%">

   <P style="TEXT-ALIGN: left; MARGIN: 0cm 0cm 3pt" align=left><FONT lang=EN-US style="FONT-SIZE: 5pt" face=Verdana,sans-serif>Annex Name:</FONT></P></TD>

   <TD style="BORDER-TOP: windowtext 1pt solid; BORDER-RIGHT: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" vAlign=top width="14%">

   <P style="TEXT-ALIGN: left; MARGIN: 0cm 0cm 3pt" align=left><FONT lang=EN-US style="FONT-SIZE: 5pt" face=Verdana,sans-serif>Annex Number</FONT></P></TD></TR>

<TR style="HEIGHT: 17.85pt">

   <TD style="HEIGHT: 17.85pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" width="73%">

   <P style="TEXT-ALIGN: left; MARGIN: 0cm 0cm 0pt" align=left><SUP><B><FONT lang=EN-US style="FONT-SIZE: 12pt" face=Verdana,sans-serif>Concepts</FONT></B></SUP></P></TD>

   <TD style="HEIGHT: 17.85pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" width="14%">

   <P style="TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt"><SUP><B><FONT lang=EN-US style="FONT-SIZE: 12pt" face=Verdana,sans-serif>0001</FONT></B></SUP></P></TD></TR>

<TR style="HEIGHT: 2.6pt">

   <TD style="HEIGHT: 2.6pt; BORDER-RIGHT: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" vAlign=top width="87%" colSpan=2>

   <P style="TEXT-ALIGN: left; MARGIN: 0cm 0cm 3pt" align=left><FONT lang=EN-US style="FONT-SIZE: 5pt" face=Verdana,sans-serif>Linked to Instrument:</FONT></P></TD></TR>

<TR>

   <TD style="BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" width="87%" colSpan=2>

   <P style="TEXT-ALIGN: left; MARGIN: 0cm 0cm 0pt" align=left><SUP><B><FONT lang=EN-US style="FONT-SIZE: 12pt" face=Verdana,sans-serif>PI0028v02 - Corporate Risk Management</FONT></B></SUP></P></TD></TR>

<TR style="PAGE-BREAK-INSIDE: avoid">

   <TD style="BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" vAlign=top width="100%" colSpan=3>

   <P style="MARGIN: 0cm 0cm 0pt"><FONT lang=EN-US style="FONT-SIZE: 12pt" face=Arial,sans-serif>Description</FONT></P></TD></TR></TABLE></DIV>

<P style="MARGIN: 0cm 0cm 0pt"><FONT lang=EN-US style="FONT-SIZE: 9pt" face=Arial,sans-serif></FONT>&nbsp;</P>

<P style="MARGIN: 0cm 0cm 0pt"><FONT lang=EN-US style="FONT-SIZE: 9pt" face=Arial,sans-serif></FONT>&nbsp;</P>

<P style="MARGIN: 0cm 0cm 0pt"><FONT lang=EN-US style="FONT-SIZE: 9pt" face=Arial,sans-serif></FONT>&nbsp;</P>

<DIV align=left>

<TABLE style="BORDER-TOP: medium none; BORDER-RIGHT: medium none; WIDTH: 100%; BORDER-BOTTOM: medium none; BORDER-LEFT: medium none" cellSpacing=0 cellPadding=0 border=0>



<TR style="HEIGHT: 35.4pt">

   <TD style="BORDER-TOP: windowtext 1pt solid; HEIGHT: 35.4pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; BORDER-LEFT: windowtext 1pt solid; PADDING-RIGHT: 5.4pt" vAlign=top width="28%">

   <P style="MARGIN: 0cm 0cm 0pt"><B><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>Risk level</FONT></B></P></TD>

   <TD style="BORDER-TOP: windowtext 1pt solid; HEIGHT: 35.4pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" vAlign=top width="72%">

   <P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>Financial magnitude representing the exposure of risk impact, in the broadest sense, that allows the organization to make decisions related to risk management activities.</FONT></P></TD></TR>

<TR style="HEIGHT: 35.2pt">

   <TD style="HEIGHT: 35.2pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; BORDER-LEFT: windowtext 1pt solid; PADDING-RIGHT: 5.4pt" vAlign=top width="28%">

   <P style="MARGIN: 0cm 0cm 0pt"><B><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>Periodic improvement</FONT></B></P></TD>

   <TD style="HEIGHT: 35.2pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" vAlign=top width="72%">

   <P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>Associated activities to ensure the efficacy of risk management through frequent evaluation and review cycles, favoring continuous improvement and strengthening strategic objectives.</FONT></P></TD></TR>

<TR style="HEIGHT: 56.3pt">

   <TD style="HEIGHT: 56.3pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; BORDER-LEFT: windowtext 1pt solid; PADDING-RIGHT: 5.4pt" vAlign=top width="28%">

   <P style="MARGIN: 0cm 0cm 0pt"><B><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>Risk evaluation</FONT></B></P></TD>

   <TD style="HEIGHT: 56.3pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" vAlign=top width="72%">

   <P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>Evaluation process that enables an organization to consider the extent to which potential risk factors may impact its attainment of objectives. Management evaluates events based on two perspectives - probability and impact - and generally uses a combination of qualitative and quantitative methods.</FONT></P></TD></TR>

<TR style="HEIGHT: 47.9pt">

   <TD style="HEIGHT: 47.9pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; BORDER-LEFT: windowtext 1pt solid; PADDING-RIGHT: 5.4pt" vAlign=top width="28%">

   <P style="MARGIN: 0cm 0cm 0pt"><B><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>Good Practices for </FONT></B></P>

   <P style="MARGIN: 0cm 0cm 0pt"><B><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>Corporate governance</FONT></B></P></TD>

   <TD style="HEIGHT: 47.9pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" vAlign=top width="72%">

   <P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>Publicly-recognized guidelines to achieve and maintain transparency, equity and quality of information, as well as maintaining a positive reputation in the market and a differential in value preservation and generation.</FONT></P></TD></TR>

<TR style="HEIGHT: 105.25pt">

   <TD style="HEIGHT: 105.25pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; BORDER-LEFT: windowtext 1pt solid; PADDING-RIGHT: 5.4pt" vAlign=top width="28%">

   <P style="MARGIN: 0cm 0cm 0pt"><B><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>Risk classification</FONT></B></P></TD>

   <TD style="HEIGHT: 105.25pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" vAlign=top width="72%">

   <P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>Rates risks by their impact and probability as shown by different colors on a risk map. SABESP's risk rating rules: </FONT></P>

   <P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif></FONT>&nbsp;</P>

   <P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>a)&nbsp;Impact: High (red), Significant (orange), Moderate (yellow), Low (light green) and Minimal (dark green);</FONT></P>

   <P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif></FONT>&nbsp;</P>

   <P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>b)&nbsp;Probability: Almost certain (red), Probable (orange), Possible (yellow), Low (light green) and Improbable (dark green).</FONT></P></TD></TR>

<TR style="HEIGHT: 127.35pt">

   <TD style="HEIGHT: 127.35pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; BORDER-LEFT: windowtext 1pt solid; PADDING-RIGHT: 5.4pt" vAlign=top width="28%">

   <P style="MARGIN: 0cm 0cm 0pt"><B><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>Corporate Risk Management</FONT></B></P>

   <P style="MARGIN: 0cm 0cm 0pt"><B><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif></FONT></B>&nbsp;</P></TD>

   <TD style="HEIGHT: 127.35pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" vAlign=top width="72%">

   <P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>This process is conducted by an organization's board of directors, audit committee, executive board, corporate risk management committee, superintendences, business units and other employees; applied to strategies formulated to identify potential events within the organization that are capable of affecting it, and manage risks in order to keep them compatible with the organization's risk exposure and provide reasonable assurance that it will achieve its objectives. Risk management is directly related to sustainable growth, profitability, and preserving and generating value for the company and its shareholders, since this process allows it to detect not only threats but also opportunities to improve and develop the business.</FONT></P></TD></TR>

<TR style="HEIGHT: 77.45pt">

   <TD style="HEIGHT: 77.45pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; BORDER-LEFT: windowtext 1pt solid; PADDING-RIGHT: 5.4pt" vAlign=top width="28%">

   <P style="MARGIN: 0cm 0cm 0pt"><B><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>Risk identification</FONT></B></P></TD>

   <TD style="HEIGHT: 77.45pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" vAlign=top width="72%">

   <P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>Risk search, recognition and description processes. Identifying risk involves describing factors and potential consequences, thus drawing up a comprehensive list of risks (portfolio) based on events that may create, boost, prevent, reduce, accelerate or delay efforts to reach objectives. Risk identification may involve historical data, theoretical analyses, opinions compiled by informed persons and experts, and stakeholders' needs.</FONT></P></TD></TR>

<TR style="HEIGHT: 31.85pt">

   <TD style="HEIGHT: 31.85pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; BORDER-LEFT: windowtext 1pt solid; PADDING-RIGHT: 5.4pt" vAlign=top width="28%">

   <P style="MARGIN: 0cm 0cm 0pt"><B><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>Impact</FONT></B></P></TD>

   <TD style="HEIGHT: 31.85pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" vAlign=top width="72%">

   <P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>Result or effect of a risk event. There may be a number of possible impacts associated with an event. The impact of an event may be positive or negative in relation to the related objectives of a company.</FONT></P></TD></TR>

<TR style="HEIGHT: 124.9pt">

   <TD style="HEIGHT: 124.9pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; BORDER-LEFT: windowtext 1pt solid; PADDING-RIGHT: 5.4pt" vAlign=top width="28%">

   <P style="MARGIN: 0cm 0cm 0pt"><B><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>Risk map</FONT></B></P></TD>

   <TD style="HEIGHT: 124.9pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" vAlign=top width="72%">

   <P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>Graphical representation of the risk evaluation process in the corporate environment. Risks are shown graphically on a 5 X 5 map layout, by positioning the level of the risk in a quadrant with a corresponding color. Shown on the Cartesian plane by ordered pairs (Probability and Impact): </FONT></P>

   <P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif></FONT>&nbsp;</P>

   <P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>X-axis: Probability: Almost Certain (red), Probable (orange), Possible (yellow), Low (light green) and Improbable (dark green); </FONT></P>

   <P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif></FONT>&nbsp;</P>

   <P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>Y-axis: Impact: High (red), Significant (orange), Moderate (yellow), Low (light green) and Minimum (dark green).</FONT></P></TD></TR>

<TR style="HEIGHT: 42.25pt">

   <TD style="HEIGHT: 42.25pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; BORDER-LEFT: windowtext 1pt solid; PADDING-RIGHT: 5.4pt" vAlign=top width="28%">

   <P style="MARGIN: 0cm 0cm 0pt"><B><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>Risk Management Methodology</FONT></B></P>

   <P style="MARGIN: 0cm 0cm 0pt"><B><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif></FONT></B>&nbsp;</P></TD>

   <TD style="HEIGHT: 42.25pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" vAlign=top width="72%">

   <P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>A set of definitions of standards for risk identification, analysis, evaluation, treatment and monitoring, based on flexibly applying the COSO model ("Enterprise Risk Management - Integrated Framework") to Sabesp&#8217;s characteristics, particularities and business environment.</FONT></P></TD></TR>

<TR style="HEIGHT: 45pt">

   <TD style="HEIGHT: 45pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; BORDER-LEFT: windowtext 1pt solid; PADDING-RIGHT: 5.4pt" vAlign=top width="28%">

   <P style="MARGIN: 0cm 0cm 0pt"><B><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>Monitoring</FONT></B></P></TD>

   <TD style="HEIGHT: 45pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" vAlign=top width="72%">

   <P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>Continuously checking, supervising, critically observing or identifying situations in order to characterize any changes in performance levels that may be required or expected. Monitoring may be applied to risk management structure, the management process, risk as such or risk controls.</FONT></P></TD></TR>

<TR style="HEIGHT: 8.3pt">

   <TD style="HEIGHT: 8.3pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; BORDER-LEFT: windowtext 1pt solid; PADDING-RIGHT: 5.4pt" vAlign=top width="28%">

   <P style="MARGIN: 0cm 0cm 0pt"><B><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>&nbsp;Level of authority</FONT></B></P></TD>

   <TD style="HEIGHT: 8.3pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" vAlign=top width="72%">

   <P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>The organization's management decision-making level related to risk management activities, depending on level of criticality (impact and probability) shown on the risk map.</FONT></P></TD></TR>

<TR style="HEIGHT: 22.95pt">

   <TD style="HEIGHT: 22.95pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; BORDER-LEFT: windowtext 1pt solid; PADDING-RIGHT: 5.4pt" vAlign=top width="28%">

   <P style="MARGIN: 0cm 0cm 0pt"><B><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>Stakeholder</FONT></B></P></TD>

   <TD style="HEIGHT: 22.95pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" vAlign=top width="72%">

   <P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>Includes Board of Directors, Audit Committee, Executive Board, Corporate Risk Management Committee, Department Heads, Superintendents, Executive Assistants, Advisors and other employees that may affect, be affected, or see themselves involved in decisions on risk management activities. </FONT></P></TD></TR></TABLE></DIV></DIV>

<HR align=center SIZE=2 width="100%" noShade>



<DIV style="PAGE-BREAK-BEFORE: always">&nbsp;</DIV>

<A name="page_4"></A>

<a name="_bclPageBorder4"></a><DIV style="PADDING-LEFT: 0%; PADDING-RIGHT: 0%">

<DIV align=left>

<TABLE style="BORDER-TOP: medium none; BORDER-RIGHT: medium none; WIDTH: 100%; BORDER-BOTTOM: medium none; BORDER-LEFT: medium none" cellSpacing=0 cellPadding=0 border=0>



<TR>

   <TD style="BORDER-TOP: windowtext 1pt solid; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; BORDER-LEFT: windowtext 1pt solid; PADDING-RIGHT: 5.4pt" vAlign=top rowSpan=4 width="13%">

   <P style="TEXT-ALIGN: center; MARGIN: 3pt 0cm">
   <IMG src="x18052819061800.jpg" width=51 height=67></P></TD>

   <TD style="BORDER-TOP: windowtext 1pt solid; BORDER-RIGHT: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" vAlign=top width="73%">

   <P style="TEXT-ALIGN: left; MARGIN: 0cm 0cm 3pt" align=left><FONT lang=EN-US style="FONT-SIZE: 5pt" face=Verdana,sans-serif>Annex Name:</FONT></P></TD>

   <TD style="BORDER-TOP: windowtext 1pt solid; BORDER-RIGHT: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" vAlign=top width="14%">

   <P style="TEXT-ALIGN: left; MARGIN: 0cm 0cm 3pt" align=left><FONT lang=EN-US style="FONT-SIZE: 5pt" face=Verdana,sans-serif>Annex Number</FONT></P></TD></TR>

<TR style="HEIGHT: 17.85pt">

   <TD style="HEIGHT: 17.85pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" width="73%">

   <P style="TEXT-ALIGN: left; MARGIN: 0cm 0cm 0pt" align=left><SUP><B><FONT lang=EN-US style="FONT-SIZE: 12pt" face=Verdana,sans-serif>Competences</FONT></B></SUP></P></TD>

   <TD style="HEIGHT: 17.85pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" width="14%">

   <P style="TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt"><SUP><B><FONT lang=EN-US style="FONT-SIZE: 12pt" face=Verdana,sans-serif>0002</FONT></B></SUP></P></TD></TR>

<TR style="HEIGHT: 2.6pt">

   <TD style="HEIGHT: 2.6pt; BORDER-RIGHT: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" vAlign=top width="87%" colSpan=2>

   <P style="TEXT-ALIGN: left; MARGIN: 0cm 0cm 3pt" align=left><FONT lang=EN-US style="FONT-SIZE: 5pt" face=Verdana,sans-serif>Linked to Instrument:</FONT></P></TD></TR>

<TR>

   <TD style="BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" width="87%" colSpan=2>

   <P style="TEXT-ALIGN: left; MARGIN: 0cm 0cm 0pt" align=left><SUP><B><FONT lang=EN-US style="FONT-SIZE: 12pt" face=Verdana,sans-serif>PI0028v02 - Corporate Risk Management</FONT></B></SUP></P></TD></TR>

<TR style="PAGE-BREAK-INSIDE: avoid">

   <TD style="BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" vAlign=top width="100%" colSpan=3>

   <P style="MARGIN: 0cm 0cm 0pt"><FONT lang=EN-US style="FONT-SIZE: 12pt" face=Arial,sans-serif>Description</FONT></P></TD></TR></TABLE></DIV>

<P style="MARGIN: 0cm 0cm 0pt"><FONT lang=EN-US style="FONT-SIZE: 9pt" face=Arial,sans-serif></FONT>&nbsp;</P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt"><B><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>1. Board of Directors</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt 1cm; TEXT-INDENT: -14.15pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>a) &nbsp;evaluate and approve the Institution's Corporate Risk Management Policy;</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt 1cm; TEXT-INDENT: -14.15pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>b) review Corporate Risk Management methodology; </FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt 1cm; TEXT-INDENT: -14.15pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>c) &nbsp;verify the efficacy of corporate risk management and control procedures;</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt 1cm; TEXT-INDENT: -14.15pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>d)&nbsp; evaluate and approve levels of authority for risks that define responsibilities for treating risks and approval; </FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt 1cm; TEXT-INDENT: -14.15pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>e) &nbsp;evaluate and periodically approve corporate risk map and Board of Directors level mitigatory action plans;</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt 1cm; TEXT-INDENT: -14.15pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>f) &nbsp; &nbsp;monitor the evolution of corporate risk mitigation action plans;</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt 1cm; TEXT-INDENT: -14.15pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>g) ensure resources to execute corporate risk action plans, depending on level of authority.</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 12pt 0cm 0pt"><B><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>2. Audit Committee</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt 1cm; TEXT-INDENT: -14.15pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>a)&nbsp; analyze and comment on Institutional Policy for Corporate Risk Management and its methodology;</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt 1cm; TEXT-INDENT: -14.15pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>c) &nbsp;examine and monitor the annual corporate risk management work plan;</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt 1cm; TEXT-INDENT: -14.15pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>d) &nbsp;analyze and comment on levels of authority that define responsibilities for treating risks and approvals;</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt 1cm; TEXT-INDENT: -14.15pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>e) &nbsp;review the corporate risk map;</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt 1cm; TEXT-INDENT: -14.15pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>f) &nbsp; &nbsp;monitor the evolution of corporate risk mitigation action plans;</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 12pt 0cm 0pt"><B><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>3. Executive Board</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt 1cm; TEXT-INDENT: -14.15pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>a) &nbsp;approve Institutional Policy for Corporate Risk Management and submit it to the Board of Directors;</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt 1cm; TEXT-INDENT: -14.15pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>b) &nbsp;approve Corporate Risk Management methodology and submit it to the Board of Directors;</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt 1cm; TEXT-INDENT: -14.15pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>c) &nbsp;approve the Corporate Risk Management Committee's Internal Rules;</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt 1cm; TEXT-INDENT: -14.15pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>d) &nbsp;approve nominations of Corporate Risk Management Committee members;</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt 1cm; TEXT-INDENT: -14.15pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>e) evaluate and approve risk levels that define responsibilities for approval and treatment; </FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt 1cm; TEXT-INDENT: -14.15pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>f) &nbsp; &nbsp;approve Corporate Risk Management annual work plans and support their development;</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt 1cm; TEXT-INDENT: -14.15pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>g) &nbsp;evaluate and approve proposals to spread risk management culture across all levels of the company;</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt 1cm; TEXT-INDENT: -14.15pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>h) &nbsp;periodically evaluate and approve corporate risk map and mitigatory action plans, submitting any risks beyond its level of competence to the Board of Directors;</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt 1cm; TEXT-INDENT: -14.15pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>i) &nbsp; &nbsp;monitor the evolution of corporate risk mitigatory action plans;</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt 1cm; TEXT-INDENT: -14.15pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>j) &nbsp; &nbsp;ensure the resources to execute corporate risk action plans depending on level of authority.</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 12pt 0cm 0pt"><B><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>4. Corporate Risk Management Committee</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt 1cm; TEXT-INDENT: -14.15pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>a) &nbsp;evaluate Institutional Policy for Corporate Risk Management and proposed alterations;</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt 1cm; TEXT-INDENT: -14.15pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>b) review Corporate Risk Management methodology;</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt 1cm; TEXT-INDENT: -14.15pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>c) &nbsp;evaluate the Corporate Risk Management Committee's Internal Regulations and proposed amendments;</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt 1cm; TEXT-INDENT: -14.15pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>d) evaluate levels of authority for risk that define responsibilities for treatment and approval; </FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt 1cm; TEXT-INDENT: -14.15pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>e) &nbsp;monitor Corporate Risk Management annual work plans;</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt 1cm; TEXT-INDENT: -14.15pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>f) &nbsp; &nbsp;evaluate proposals to spread risk management culture across all levels of the company;</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt 1cm; TEXT-INDENT: -14.15pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>g) &nbsp;review and monitor the execution of corporate risk mitigatory action plans;</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt 1cm; TEXT-INDENT: -14.15pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>h) &nbsp;monitor corporate risk indicators;</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt 1cm; TEXT-INDENT: -14.15pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>i) &nbsp; evaluate the corporate risk map;</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt 1cm; TEXT-INDENT: -14.15pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>j) &nbsp; &nbsp;review and monitor the identification, analysis, evaluation, treatment and monitoring of risks under the purview of Departments and Superintendences;</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt 1cm; TEXT-INDENT: -14.15pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>k) advise the Executive Board on Corporate Risk Management related matters;</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt 1cm; TEXT-INDENT: -14.15pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>l) &nbsp; &nbsp;review the resources approved to execute the action plans.</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 12pt 0cm 0pt"><B><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>5. Department Heads</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt 1cm; TEXT-INDENT: -14.15pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>a) &nbsp;Be aware of the Institutional Policy for Corporate Risk Management;</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt 1cm; TEXT-INDENT: -14.15pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>b) &nbsp;Be aware of the Corporate Risk Management methodology;</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt 1cm; TEXT-INDENT: -14.15pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>c) &nbsp;Be aware of the Corporate Risk Management Committee's Internal Rules </FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt 1cm; TEXT-INDENT: -14.15pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>d) &nbsp;Be aware of the and monitor annual work plans for corporate risk management;</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt 1cm; TEXT-INDENT: -14.15pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>e) &nbsp;Be aware of the risk levels that define responsibilities for treatment and approval;</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt 1cm; TEXT-INDENT: -14.15pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>f) &nbsp; &nbsp;approve the Department's corporate risk map;</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt 1cm; TEXT-INDENT: -14.15pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>g) &nbsp;nominate a member to represent the Department on the Corporate Risk Management Committee;</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt 1cm; TEXT-INDENT: -14.15pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>h) &nbsp;support risk identification, analysis, evaluation, treatment and monitoring work;</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt 1cm; TEXT-INDENT: -14.15pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>i) &nbsp; &nbsp;evaluate and approve the measurement and mitigatory action plans of the Department;</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt 1cm; TEXT-INDENT: -14.15pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>k) &nbsp;monitor the evolution of corporate risk mitigation action plans;</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt 1cm; TEXT-INDENT: -14.15pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>l) &nbsp; &nbsp;ensure resources to execute corporate risk action plans, depending on level of authority.</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 12pt 0cm 0pt"><B><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>6. Superintendencies and Business Units</FONT></B></P></DIV>

<HR align=center SIZE=2 width="100%" noShade>



<DIV style="PAGE-BREAK-BEFORE: always">&nbsp;</DIV>

<A name="page_5"></A>

<a name="_bclPageBorder5"></a><DIV style="PADDING-LEFT: 0%; PADDING-RIGHT: 0%">

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt 1cm; TEXT-INDENT: -14.15pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>a) &nbsp;Be aware and application Corporate Risk Management methodology;</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt 1cm; TEXT-INDENT: -14.15pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>b) &nbsp;Be aware of the annual corporate risk management work plan;</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt 1cm; TEXT-INDENT: -14.15pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>c) &nbsp;&nbsp;Be aware of the levels of authority that define responsibilities for risk treatment and approval;</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt 1cm; TEXT-INDENT: -14.15pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>d)&nbsp; identify, analyze, evaluate, treat and monitor corporate risks within their competence;</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt 1cm; TEXT-INDENT: -14.15pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>e) &nbsp;monitor the evolution of corporate risk mitigation action plans, within their competence;</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt 28.45pt; TEXT-INDENT: -14.25pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>f) &nbsp; &nbsp;submit proposals to department heads for corporate risk treatment and mitigatory action plans within their competence </FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt 28.45pt; TEXT-INDENT: -14.25pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>g) ensure resources to execute corporate risk action plans, depending on level of authority. </FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt 28.45pt; TEXT-INDENT: -14.25pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>h) &nbsp;draft and update the risk map for their area of business together with the Risk Management and Quality Superintendence - PK;</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt 1cm; TEXT-INDENT: -14.15pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>i) &nbsp; &nbsp;define and monitor risk indicators;</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 12pt 0cm 0pt"><B><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>7. Risk Management and Quality Superintendence </FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt 1cm; TEXT-INDENT: -14.15pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>a) &nbsp;spread risk management culture across all levels of the company;</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt 28.45pt; TEXT-INDENT: -14.25pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>b) &nbsp;propose and update the Institutional Policy for Corporate Risk Management and the Corporate Risk Management Committee's Internal Rules;</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt 1cm; TEXT-INDENT: -14.15pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>c) &nbsp;draft proposal for risk levels of authority and submit it for approval by the Executive Board </FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt 1cm; TEXT-INDENT: -14.15pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>d) &nbsp;prepare annual work plans and submit them for approval by the Executive Board;</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt 1cm; TEXT-INDENT: -14.15pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>e) execute annual work plans;</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt 1cm; TEXT-INDENT: -14.15pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>f) &nbsp; &nbsp;propose measures to support the development of Corporate Risk Management;</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt 1cm; TEXT-INDENT: -14.15pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>g) &nbsp;propose criteria for risk evaluation, mapping and classification;</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt 1cm; TEXT-INDENT: -14.15pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>h) &nbsp;help develop corporate risk maps;</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt 1cm; TEXT-INDENT: -14.15pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>i) &nbsp; &nbsp;consolidate corporate risk maps and ensure their distribution depending on risk levels defined;</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt 1cm; TEXT-INDENT: -14.15pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>j) &nbsp; &nbsp;manage the computerized risk system in order to consolidate risk evaluation findings;</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt 1cm; TEXT-INDENT: -14.15pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>k) &nbsp;monitor the evolution of action plans underway and corporate risk indicators;</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt 1cm; TEXT-INDENT: -14.15pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>l) &nbsp; &nbsp;advise the Corporate Risk Management Committee on risk related matters;</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt 1cm; TEXT-INDENT: -14.15pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>m) propose and execute corporate risk reporting methodology. </FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 12pt 0cm 0pt"><B><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>8 - Audit Superintendent </FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt 1cm; TEXT-INDENT: -14.15pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>a) &nbsp;Systematically evaluate the risk management process and suggest improvements;</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt 1cm; TEXT-INDENT: -14.15pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>b) &nbsp;Be familiar with the corporate risk map;</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt 1cm; TEXT-INDENT: -14.15pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=Arial,sans-serif>c) &nbsp;Include corporate risk map findings when drafting Sabesp's internal audit work schedule.</FONT></P>

<P style="MARGIN: 0cm 0cm 0pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face=garamond></FONT>&nbsp;</P></DIV>

<DIV style="PAGE-BREAK-BEFORE: always">&nbsp;</DIV>

<HR align=left color=#000000 SIZE=2 noShade>



<DIV align=center><FONT color=#000000 size=3 face="Times New Roman"><B><U>

<DIV align=center><FONT color=#000000 size=3 face="Times New Roman"><B><U>SIGNATURE&nbsp;</U></B></FONT><FONT size=1>&nbsp;</FONT></DIV></U></B></FONT>

<DIV><FONT size=1></FONT>&nbsp;</DIV>

<DIV align=justify><FONT color=#000000 size=3 face="Times New Roman">Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the city S&#227;o Paulo, Brazil. <BR></FONT></DIV>

<DIV align=justify><FONT color=#000000 size=3 face="Times New Roman">Date:&nbsp;May 28, 2018</FONT></DIV>

<DIV><FONT size=1></FONT>&nbsp;</DIV>

<DIV align=center>

<TABLE style="WIDTH: 70%" cellSpacing=0 cellPadding=0>



<TR>

   <TD vAlign=top width="50%" colSpan=3>

   <DIV align=left><FONT color=#000000 size=3 face="Times New Roman"><B>Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo - SABESP </B></FONT></DIV></TD></TR>

<TR>

   <TD height=16></TD>

   <TD height=16></TD>

   <TD height=16></TD></TR>

<TR>

   <TD vAlign=top align=left><FONT color=#000000 size=2 face="Times New Roman">By:</FONT></TD>

   <TD vAlign=bottom align=left>/s/&nbsp;&nbsp;<FONT style="FONT-FAMILY: times new roman" size=3>Rui de Britto &#193;lvares Affonso</FONT>&nbsp;&nbsp;&nbsp;&nbsp;

   <HR align=left color=#000000 SIZE=1 noShade>

</TD>

   <TD></TD></TR>

<TR>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD vAlign=bottom width="53%" align=center>

   <DIV align=left><FONT color=#000000 size=2 face="Times New Roman">Name: Rui de Britto &#193;lvares Affonso </FONT></DIV>

   <DIV align=left><FONT color=#000000 size=2 face="Times New Roman">Title: Chief Financial Officer and Investor Relations Officer </FONT></DIV></TD>

   <TD></TD></TR></TABLE></DIV>

<DIV><FONT size=1></FONT>&nbsp;</DIV>

<P>&nbsp;</P>

<DIV><FONT size=1></FONT>&nbsp;</DIV>

<DIV align=center><FONT color=#000000 size=3 face="Times New Roman"><B>FORWARD-LOOKING STATEMENTS </B></FONT></DIV>

<P align=justify><FONT size=2 face="'Times New Roman, Times, Serif'">This press release may contain forward-looking statements. These statements are statements that are not historical facts, and are based on management's current view and estimates of future economic circumstances, industry conditions, company performance and financial results. The words "anticipates", "believes", "estimates", "expects", "plans" and similar expressions, as they relate to the company, are intended to identify forward-looking statements. Statements regarding the declaration or payment of dividends, the implementation of principal operating and financing strategies and capital expenditure plans, the direction of future operations and the factors or trends affecting financial condition, liquidity or results of operations are examples of forward-looking statements. Such statements reflect the current views of management and are subject to a number of risks and uncertainties. There is no guarantee that the expected events, trends or results will actually occur. The statements are based on many assumptions and factors, including general economic and market conditions, industry conditions, and operating factors. Any changes in such assumptions or factors could cause actual results to differ materially from current expectations. </FONT></P>

<HR align=left color=#000000 SIZE=2 noShade>

</DIV>

</BODY>

</HTML>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>GRAPHIC
<SEQUENCE>2
<FILENAME>x18052819061800.jpg
<DESCRIPTION>GRAPHIC
<TEXT>
begin 644 x18052819061800.jpg
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M174J962_D&8U/^P/XOJ>/K7#>$M$\<_%R[G:\\0WJZ7&VVXGEE8Q@D$[5C!
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M1LTI8X.7!"$@ XR1@8')!K7\'^,O$VJ^%;&]FT1KYY X^U(?*$P5V4/M(XR
M#^->@_9;?[1]H\B+S\8\S8-V/3/6FM9VKR/(UM"SOC<QC!+8Z9/M0UC:-)YC
M6L!DW;]QC&=WKGU]Z=+;6\[QO-!'(\9RC.@)4^WI1-:V]PR-/!%*4.4+H#M/
JJ,]*Y>YTJQN/B;'=S6R23'2#"2^2NSS<XV].OM76 !5"J % P .U?__9

end
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
