Table of Contents

 

 

 

FORM 6-K

 

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.  20549

 

REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF
THE SECURITIES EXCHANGE ACT OF 1934

 

For the month of December 2010

 

Commission File Number 1-15224

 

Energy Company of Minas Gerais

(Translation of Registrant’s Name Into English)

 

Avenida Barbacena, 1200

30190-131 Belo Horizonte, Minas Gerais, Brazil

(Address of Principal Executive Offices)

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

 

Form 20-F  x Form 40-F  o

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): o

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): o

 

Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

 

Yes  o No  x

 

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):  N/A

 

 

 



Table of Contents

 

Index

 

Item

 

Description of Item

 

 

 

1.

 

Summary of Principal Decisions of the 497th Meeting of the Board of Directors, Companhia Energética de Minas Gerais – CEMIG, December 6, 2010

 

 

 

2.

 

Summary of Principal Decisions of the 125th Meeting of the Board of Directors, Cemig Geração e Transmissão S.A., December 6, 2010

 

 

 

3.

 

Summary of Principal Decisions of the 118th Meeting of the Board of Directors, Cemig Distribuição S.A., December 6, 2010

 

 

 

4.

 

Market Announcement – CEMIG included in Brazil’s new Carbon Efficiency Index, Companhia Energética de Minas Gerais – CEMIG, December 3, 2010

 

 

 

5.

 

Notice to Stockholders – Payment of the 2nd installment of dividends – year 2009, Companhia Energética de Minas Gerais – CEMIG, December 1, 2010

 

 

 

6.

 

Market Announcement – CEMIG included in Brazil’s Sustainability Index for 6th year running, Companhia Energética de Minas Gerais – CEMIG, November 25, 2010

 

 

 

7.

 

Summary of Principal Decision of the 126th Meeting of the Board of Directors, Cemig Geração e Transmissão S.A., December 16, 2010

 

 

 

8.

 

Summary of Principal Decisions of the 498th Meeting of the Board of Directors, Companhia Energética de Minas Gerais – CEMIG, December 13, 2010

 

 

 

9.

 

Summary of Minutes of the 498th Meeting of the Board of Directors, Companhia Energética de Minas Gerais – CEMIG, December 13, 2010

 

 

 

10.

 

Notice to Shareholders – Payment of extraordinary dividends, Companhia Energética de Minas Gerais – CEMIG, December 16, 2010

 

 

 

11.

 

Summary of Principal Decisions of the 499th Meeting of the Board of Directors, Companhia Energética de Minas Gerais – CEMIG, December 16, 2010

 

 

 

12.

 

Market Announcement – Declaration of extraordinary dividend, Companhia Energética de Minas Gerais – CEMIG, December 16, 2010

 

 

 

13.

 

Restated Quarterly Results for the Third Quarter Ended September 30, 2010, Cemig Geração e Transmissão S.A., December 14, 2010

 

 

 

14.

 

List of Changes to the Quarterly Results for the Third Quarter Ended September 30, 2010, Cemig Geração e Transmissão, December 14, 2010

 

 

 

15.

 

Restated Quarterly Results for the Third Quarter Ended September 30, 2010, Companhia Energética de Minas Gerais – CEMIG, December 14, 2010

 

 

 

16.

 

List of Changes to the Quarterly Results for the Third Quarter Ended September 30, 2010, Companhia Energética de Minas Gerais – CEMIG, December 14, 2010

 

 

 

17.

 

Market Announcement – Oekom Research again rates Cemig Prime in Sustainability, Companhia Energética de Minas Gerais – CEMIG, December 20, 2010

 

 

 

18.

 

Summary of Principal Decisions of the 500th Meeting of the Board of Directors, Companhia Energética de Minas Gerais – CEMIG, December 20, 2010

 

 

 

19.

 

Summary of Principal Decisions of the 127th Meeting of the Board of Directors, Cemig Geração e Transmissão, December 20, 2010

 

 

 

20.

 

Summary of Principal Decisions of 119th Meeting of the Board of Directors, Cemig Distribuição S.A., December 20, 2010

 

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SIGNATURES

 

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.

 

 

 

COMPANHIA ENERGETICA DE MINAS
GERAIS – CEMIG

 

 

 

 

 

 

 

 

 

By:

/s/ Luiz Fernando Rolla

 

 

Name:

Luiz Fernando Rolla

 

 

Title:

Chief Financial Officer, 

Investor Relations Officer and

Control of Holdings Officer

Date:  December 21, 2010

 

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1.                                                               Summary of Principal Decisions of the 497th Meeting of the Board of Directors Companhia Energética de Minas Gerais — CEMIG, December 6, 2010

 

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COMPANHIA ENERGÉTICA DE MINAS GERAIS — CEMIG

LISTED COMPANY

CNPJ 17.155.730/0001-64 - NIRE 31300040127

 

SUMMARY OF PRINCIPAL DECISIONS

 

At its 497th meeting, held on December 6, 2010, the Board of Directors of Cemig (Companhia Energética de Minas Gerais) decided the following:

 

1-                       Alteration of the Bylaws.

 

2-                       Granting of an option to buy shares.

 

3-                       Partnership for acquisition of a stockholding interest.

 

4-                       Orientation of votes by the representative of Cemig in Extraordinary General Meetings of Stockholders of Cemig D and Cemig GT.

 

5-                       Calling of an Extraordinary General Meeting of Stockholders, to be held on December 22, 2010 at 11 a.m.

 

6-                       Alteration in the composition of the Executive Board, with Mr. Fernando Henrique Schüffner Neto becoming Chief New Business Development Officer, and Mr. José Carlos de Mattos becoming Chief Distribution and Sales Officer, no change being made to any other appointments on the Executive Board.

 

7-                       Signing of an amendment to a contract for provision of legal services, to extend its period of validity.

 

Av. Barbacena 1200   Santo Agostinho   30190-131 Belo Horizonte, MG   Brazil   Tel.: +55 31 3506-5024   Fax +55 31 3506-5025

 

This text is a translation, provided for information only. The original text in Portuguese is the legally valid version.

 

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2.                                                               Summary of Principal Decisions of the 125th Meeting of the Board of Directors Cemig Geração e Transmissão S.A., December 6, 2010

 

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GRAPHIC

 

CEMIG GERAÇÃO E TRANSMISSÃO S.A.

LISTED COMPANY

CNPJ 06.981.176/0001-58 - NIRE 31300020550

 

SUMMARY OF PRINCIPAL DECISIONS

 

At its 125th meeting, held on December 6, 2010, the Board of Directors of Cemig Geração e Transmissão S.A. decided the following:

 

1-              Alteration of the Bylaws.

 

2-              Calling of an Extraordinary General Meeting of Stockholders, to be held on December 22, 2010 at 3 p.m.

 

3-              Alteration in the composition of the Executive Board, with Mr. Fernando Henrique Schüffner Neto becoming Chief New Business Development Officer, and Mr. José Carlos de Mattos becoming Director without specific designation, no change being made to any other appointments on the Executive Board.

 

4-              Signing of an amendment to a contract for provision of legal services, to extend its period of validity.

 

Av. Barbacena 1200   Santo Agostinho   30190-131 Belo Horizonte, MG   Brazil   Tel.: +55 31 3506-5024   Fax +55 31 3506-5025

 

This text is a translation, provided for information only. The original text in Portuguese is the legally valid version.

 

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3.                                                               Summary of Principal Decisions of the 118th Meeting of the Board of Directors Cemig Distribuição S.A., December 6, 2010

 

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GRAPHIC

 

CEMIG DISTRIBUIÇÃO S.A.

LISTED COMPANY

CNPJ 06.981.180/0001-16 – NIRE 31300020568

 

SUMMARY OF PRINCIPAL DECISIONS

 

At its 118th meeting, held on December 6, 2010, the Board of Directors of Cemig Distribuição S.A. decided the following:

 

1-              Alteration of the Bylaws.

 

2-              Calling of an Extraordinary General Meeting of Stockholders, to be held on December 22, 2010 at 5 p.m.

 

3-              Alteration in the composition of the Executive Board, with Mr. Fernando Henrique Schüffner Neto becoming Chief New Business Development Officer, and Mr. José Carlos de Mattos becoming Chief Distribution and Sales Officer, no change being made to any other appointments on the Executive Board.

 

4-              Signing of an amendment to a contract for provision of legal services, to extend its period of validity.

 

Av. Barbacena 1200   Santo Agostinho   30190-131 Belo Horizonte, MG   Brazil   Tel.: +55 31 3506-5024   Fax +55 31 3506-5025

 

This text is a translation, provided for information only. The original text in Portuguese is the legally valid version.

 

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4.                                                               Market Announcement — CEMIG included in Brazil’s new Carbon Efficiency Index, Companhia Energética de Minas Gerais — CEMIG, December 3, 2010

 

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COMPANHIA ENERGÉTICA DE MINAS GERAIS - CEMIG

 

LISTED COMPANY

CNPJ 17.155.730/0001-64

NIRE 33300266003

 

MARKET ANNOUNCEMENT

 

Cemig included in Brazil’s new Carbon Efficiency Index

 

Cemig (Companhia Energética de Minas Gerais), a listed company with securities traded on the stock exchanges of São Paulo, New York and Madrid, as part of its commitment to best corporate governance practices, hereby informs its stockholders and the market in general as follows:

 

Cemig has been included in the Brazilian ICO2 Carbon Efficiency Index.

 

This new stock index, created by the São Paulo stock, Commodities and Futures Exchange (BM&FBovespa), is an indicator to Brazilian and international capital markets of the commitment and alignment that Brazil and its listed companies have in relation to the most up-to-date positions and debate on climate change.

 

The ICO2 index is made up of the shares of those companies that are in the portfolio of the IBrX-50 index and have subscribed to this initiative, weighted by the greenhouse gas emissions of each of the companies.

 

Cemig has increased its participation in the IbrX-50 index from 1.196% to 2.275%; and its participation in the portfolio of the ICO2 index, for this year of 2010-2011, is 53.8% of the total of all electricity sector shares that are included in the ICO2.

 

Cemig’s very significant position in the ICO2 index reflects its commitment to taking action to minimize greenhouse gas emissions — highlighting its generation of electricity from renewable sources.

 

Belo Horizonte, December 3, 2010,

 

Luiz Fernando Rolla

Chief Officer for Finance, Investor Relations and Control of Holdings

 

Av. Barbacena 1200    Santo Agostinho   30190-131 Belo Horizonte, MG   Brazil   Tel.: +55 31 3506-5024   Fax +55 31 3506-5025

 

This text is a translation, provided for information only. The original text in Portuguese is the legally valid version.

 

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5.                                                               Notice to Stockholders — Payment of the 2nd installment of dividends — year 2009,  Companhia Energética de Minas Gerais — CEMIG, December 1, 2010

 

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COMPANHIA ENERGÉTICA DE MINAS GERAIS — CEMIG

 

LISTED COMPANY

CNPJ 17.155.730/0001-64

 

NOTICE TO STOCKHOLDERS

 

We hereby advise stockholders that Cemig will make payment to stockholders of R$ 465,350,000, being the second part of the stockholder remuneration for 2009, on December 21, 2010. This is 50% of the amount decided by the Ordinary and Extraordinary General Meetings of Stockholders held jointly on April 29, 2010.

 

Stockholders whose names were on the Company’s Nominal Share Registry on April 29, 2010 have the right to this payment.

 

Stockholders whose bank details are up-to-date with the Custodian Bank for Cemig’s nominal shares (Banco Bradesco S.A.) will have their credits posted automatically on the day of payment, on which occasion they will receive the advice of the corresponding credit. In the event of not receiving the notice of credit, the stockholder should visit a branch of Banco Bradesco S.A. to update his/her registry details. Proceeds from shares deposited in custody at CBLC (Companhia Brasileira de Liquidação e Custódia — the Brazilian Settlement and Custody Company) will be credited to that entity and the Depository Brokers will be responsible for passing the amounts through to holders.

 

Belo Horizonte, December 1, 2010

 

Luiz Fernando Rolla

Chief Officer for Finance, Investor Relations and Control of Holdings

 

Av. Barbacena 1200   Santo Agostinho   30190-131 Belo Horizonte, MG   Brazil   Tel.: +55 31 3506-5024   Fax +55 31 3506-5025

 

This text is a translation, provided for information only. The original text in Portuguese is the legally valid version.

 

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6.                                                               Market Announcement — CEMIG included in Brazil’s Sustainability Index for 6th year running, Companhia Energética de Minas Gerais — CEMIG, November 25, 2010

 

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COMPANHIA ENERGÉTICA DE MINAS GERAIS - CEMIG

 

LISTED COMPANY

CNPJ 17.155.730/0001-64

NIRE 33300266003

 

MARKET ANNOUNCEMENT

 

Cemig in Brazil Sustainability Index for 6th year running

 

Cemig (Companhia Energética de Minas Gerais), a listed company with securities traded on the stock exchanges of São Paulo, New York and Madrid, in accordance with its commitment to best corporate government practices, hereby publicly informs its stockholders and the market in general as follows:

 

Cemig has been selected for the sixth year running for inclusion in the Corporate Sustainability Index of the São Paulo Stock Exchange (BM&FBovespa).

 

Cemig has been included in this index since it was created in 2005.

 

The new portfolio of the index includes 47 shares of 38 companies, in 18 sectors, with aggregate market capitalization of R$ 1.17 trillion, or 46.1% of the total market capitalization of the companies traded on the BM&FBovespa on November 24, 2010.

 

The companies included in the new portfolio were selected from an initial group of 53, which responded to a questionnaire containing 495 questions to reflect, in addition to the companies’ characteristics and economic aspects, their activity in the areas of the environment and climate change, social activities, corporate governance, and the nature of their products.

 

Belo Horizonte, November 25, 2010

 

Marco Antonio Rodrigues da Cunha

Acting Chief Officer for Finance, Investor Relations and Control of Holdings

 

Av. Barbacena 1200   Santo Agostinho   30190-131 Belo Horizonte, MG   Brazil   Tel.: +55 31 3506-5024   Fax +55 31 3506-5025

 

This text is a translation, provided for information only. The original text in Portuguese is the legally valid version.

 

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7.                                                               Summary of Principal Decision of the 126th Meeting of the Board of Directors Cemig Geração e Transmissão S.A., December 16, 2010

 

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GRAPHIC

 

CEMIG GERAÇÃO E TRANSMISSÃO S.A.

LISTED COMPANY

CNPJ 06.981.176/0001-58 - NIRE 31300020550

 

SUMMARY OF PRINCIPAL DECISIONS

 

At its 126th meeting, held on December 16, 2010, the Board of Directors of Cemig Geração e Transmissão S.A. decided the following:

 

1.             Authorization to take part in Aneel Auction 04/2010, and to present a bid for the Teles Pires Hydroelectric Project.

 

Consequentially, was authorized to sign the following documents, all of them with CPFL, Andrade Gutierrez and Camargo Correa:

 

·              Private Instrument of Constitution of the Centro Norte Energia Consortium;

 

·              Consortium Members’ Agreement;

 

·              Agreement for Participation in Auction and Implementation and Commercial Operation of the Teles Pires Hydroelectric Project.

 

Av. Barbacena 1200   Santo Agostinho   30190-131 Belo Horizonte, MG   Brazil   Tel.: +55 31 3506-5024   Fax +55 31 3506-5025

 

This text is a translation, provided for information only. The original text in Portuguese is the legally valid version.

 

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8.                                                               Summary of Principal Decisions of the 498th Meeting of the Board of Directors Companhia Energética de Minas Gerais — CEMIG, December 13, 2010

 

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COMPANHIA ENERGÉTICA DE MINAS GERAIS - CEMIG

 

LISTED COMPANY

CNPJ 17.155.730/0001-64

NIRE 31300040127

 

BOARD OF DIRECTORS

 

SUMMARY OF PRINCIPAL DECISIONS

 

At its 498th meeting, held on December 13, 2010, the Board of Directors of Cemig (Companhia Energética de Minas Gerais) decided the following:

 

1. Issuance of promissory notes.

 

2. Contracting services for promissory notes issuance.

 

Av. Barbacena 1200   Santo Agostinho   30190-131 Belo Horizonte, MG   Brazil   Tel.: +55 31 3506-5024   Fax +55 31 3506-5025

 

This text is a translation, provided for information only. The original text in Portuguese is the legally valid version.

 

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9.                     Summary of Minutes of the 498th Meeting of the Board of Directors Companhia Energética de Minas Gerais — CEMIG, December 13, 2010

 

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COMPANHIA ENERGÉTICA DE MINAS GERAIS — CEMIG

LISTED COMPANY

CNPJ 17.155.730/0001-64 — NIRE 31300040127

 

BOARD OF DIRECTORS

 

SUMMARY OF MINUTES OF THE 498TH MEETING

 

Date, time and place:

 

December 13, 2010 at 11 a.m. at the company’s head office,

 

 

Av. Barbacena 1200, 21th Floor, Belo Horizonte, Minas Gerais, Brazil.

 

 

 

Meeting Committee:

 

Chairman: Djalma Bastos de Morais;

 

 

Secretary: Anamaria Pugedo Frade Barros

 

Summary of proceedings:

 

I           The Chairman asked the Board Members present whether any of them had conflict of interest in relation to the matters on the agenda of this meeting, and all stated there was no such conflict of interest.

 

II         The Board approved the minutes of this meeting.

 

III        The Board authorized:

 

a)         The third issue of commercial promissory notes by Cemig, for placement and public distribution in the local capital market, under CVM Instruction 476/2009, with the following features:

 

1)         Issuer: Cemig.

 

2)         Manager: BB Banco de Investimento S.A.

 

3)         Value of the Issue: Up to five hundred million Reais.

 

4)         Guarantees: The issue will have no guarantee or surety.

 

5)         Use of proceeds: Replenishment of the Company’s cash position following the investments made in 2010.

 

6)         Number of series: In a single series.

 

7)         Period and maturity: The notes will be issued on the date of their subscription and paying-up, and will have tenor of three hundred and sixty days.

 

8)         Placement procedure and regime: Public distribution, with restricted placement efforts, on an organized over-the-counter market administered and operated by Cetip S.A. — Balcão Organizado de Ativos e Derivativos (“Cetip”) under the regime of firm guarantee of subscription by the Manager.

 

9)         Nominal Unit Value: Ten million Reais on the issue date.

 

10)       Quantity of Promissory Notes:  Up to fifty.

 

Av. Barbacena 1200   Santo Agostinho   30190-131 Belo Horizonte, MG   Brazil   Tel.: +55 31 3506-5024   Fax +55 31 3506-5025

 

This text is a translation, provided for information only. The original text in Portuguese is the legally valid version.

 

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11)       Form: The Notes will be issued in physical form and be held on deposit at the Mandated Bank, a financial institution qualified to provide custody services, and will be transferable by signed endorsement simply transferring ownership. For all legal purposes the ownership of the promissory notes will be proven by the respective physical Note. Additionally, for the promissory notes held in custody electronically in the NOTA (Commercial Note Module) system administered and operated by Cetip, ownership of the promissory notes will be proven by the statement of account position, in the name of the holder, issued by Cetip.

 

12)       Remuneration: Remuneratory interest shall accrue on the nominal unit value of the Promissory Notes corresponding to accumulated variation at 105.5% of the average daily rates on interbank deposits referred to as the DI over extra grupo Rate, expressed in the annual percentage form on the basis of two hundred and fifty business days, calculated and published daily by Cetip in the daily bulletin available on its website (http://www.cetip.com.br), capitalized by a spread of up to 105.5% per cent per year. The Remuneration shall be calculated exponentially and cumulatively pro rata tempore by business days elapsed, applying to the nominal unit value of each Promissory Note, from the date of its actual subscription and paying-up (the Issue Date) to the respective maturity date, calculated in accordance with the procedures defined by Cetip in its Formula Sourcebook (“Caderno de Fórmulas”), available for consultation on the same website.

 

13)       Payment of the remuneration: In a single payment on the date of ordinary or early redemption of the promissory notes.

 

14)       Amortizations of the nominal value: In a single payment on the date of ordinary or early redemption of the promissory notes.

 

15)       Renegotiation: None.

 

16)       Optional early redemption: The Company may effect early redemption of the promissory notes, in accordance with the applicable legislation, giving investors five days’ prior notice. In the event of partial early redemption, this shall be put into effect by a lottery mechanism, in accordance with Paragraph 4 of Article 7 of CVM Instruction 134/1990, as amended. At the time of subscription and paying-up or acquisition of the promissory note, the owner shall grant express irrevocable consent in advance to early unilateral redemption of the promissory note by the Company, in the terms of CVM Instruction 134/1990.

 

17)       Subscription price: The promissory notes shall be subscribed at their respective nominal unit vale.

 

18)       Procedure for subscription and paying-up: Subscription of the promissory notes will take place in accordance with the procedures adopted by Cetip through the NOTA system. The promissory notes will be paid up at sight simultaneously with subscription, in Brazilian currency, in accordance with the rules for settlement applicable to Cetip.

 

19)       Place of payment: Payments relating to the Promissory Notes shall be made in accordance with the procedures adopted by Cetip, for the Promissory Notes registered in the NOTA system, or, for holders of Promissory Notes that are not linked to that system, at the Issuer’s head office.

 

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20)       Extension of periods: If the date of maturity of an obligation coincides with a day that is not a business or banking business day at the location of the head office of the Company, the date of payment shall be deemed automatically postponed to the next business day, without any addition to the amount to be paid, except in cases where the payment is to be made through Cetip, in which case the extension will take place only when the date of the payment coincides with a Saturday, Sunday or national public holiday.

 

21)       Early maturity: Any holder of the promissory notes may declare all the obligations arising from the promissory notes which it holds to be due and payable, and demand immediate payment by the Company of the nominal unit value of the promissory notes, augmented by the remuneration and the charges, pro rata tempore, from the issue date, by letter delivered with advice of receipt or letter posted using advice of receipt service, addressed to the head office of the Company, in any of the following events:

 

i)              Declaration of bankruptcy, dissolution and/or liquidation of the company or application for Judicial Recovery or out-of-court reorganization or application for bankruptcy made by the Company, or any analogous event that characterizes a state of insolvency of the Company, including an agreement with creditors, in accordance with the applicable legislation.

 

ii)             Legitimate and reiterated protest proceedings on securities against the Company, the unpaid value of which is more than fifty million Reais, unless the protest proceedings have been lodged in error or due to bad faith of third parties, provided this is validly proven by the Company, or if cancelled or if validly contested in court, in any event, within a maximum period of 30 (thirty) calendar days from the date of the obligation becoming due.

 

(iii)          Early maturity of any pecuniary obligation of the Company arising from default on an obligation to pay any individual or aggregate amount greater than fifty million Reais or its equivalent in other currencies.

 

(iv)          Change, transfer or assignment, direct or indirect, of the stockholding control of the Company, unless by order of a Court, without the prior consent of holders of promissory notes representing at least seventy five percent of the promissory notes in circulation.

 

(v)           Absorption of the Company by another company, or split or merger of the Company, unless this takes place by order of a court.

 

(vi)          Privatization of the Company.

 

(vii)        Any termination, for any reason, of any of the concession contracts held by the Company, that represents an adverse material impact on the Company’s payment capacity.

 

(viii)       Default unjustified by the Company on, or absence of legal and/or court measures required for non-payment of any debt or any obligation to pay, under any agreement to which it/they are a party as borrower or Guarantor, the value of which, individually or in aggregate, is greater than fifty million Reais or its equivalent in other currencies. Occurrence of any of the events specified in sub-items (i) and (iii) above shall result in immediate early

 

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maturity of the promissory notes, independently of any consultation with their holders. In any of the other events indicated above, a General Meeting of holders of the promissory notes must be held, within 48 (forty-eight) hours from the date on which any of the holders of the promissory notes becomes aware of the event, to decide on non-declaration of early maturity of the promissory notes, which shall be decided by holders of the promissory notes representing at least 2/3 (two-thirds) of the promissory notes of the issue in circulation.

 

22)       Monetary updating: There will be no monetary updating of the nominal value of the promissory notes.

 

b)         Signature of the documents that are indispensable to the issue referred to above, such as:

 

the Mandate Document;

 

the Contract for Management, Placement and Public Distribution, under the regime of Firm Subscription Guarantee, of Commercial Promissory Notes of the 3rd Issue by Companhia Energética de Minas Gerais — Cemig;

 

the physical Promissory Notes;

 

the Contract of the Mandated Bank;

 

and such other documents as are duly approved by the legal department and do not cause cost for the transaction.

 

c)         Opening of Administrative Proceedings for Exemption from Tender, and contracting of BB Banco de Investimento S.A., as manager of the 3rd issue of commercial promissory notes by Cemig.

 

d)         Contracting of Banco Bradesco S.A., as an integral part of the proposal for the 3rd issue of commercial promissory notes by Cemig, for the period of validity of the promissory notes, for provision of the service of mandates bank.

 

e)         Payment of all the costs related to publications of market notices, announcements of start and closing of the distribution, the charge made by the Anbid, the charge for registry of the issue with the CVM, the registry charges for trading of the issue, among others indispensible to realization of the issues.

 

The following were present:

 

Board members:

 

Djalma Bastos de Morais,

Antonio Adriano Silva,

Arcângelo Eustáquio Torres Queiroz,

Eduardo Borges de Andrade,

Francelino Pereira dos Santos,

Guy Maria Villela Paschoal,

João Camilo Penna,

Maria Estela Kubitschek Lopes,

Paulo Roberto Reckziegel Guedes,

 

Saulo Alves Pereira Junior,

Adriano Magalhães Chaves,

Paulo Márcio de Oliveira Monteiro,

Paulo Sérgio Machado Ribeiro,

Renato Torres de Faria,

Cezar Manoel de Medeiros,

Fernando Henrique Schüffner Neto,

Marco Antonio Rodrigues da Cunha.

Secretary:

 

Anamaria Pugedo Frade Barros

 

 

 

Anamaria Pugedo Frade Barros

 

24



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10.                  Notice to Shareholders — Payment of extraordinary dividends Companhia Energética de Minas Gerais — CEMIG, December 16, 2010

 

25



Table of Contents

 

 

COMPANHIA ENERGÉTICA DE MINAS GERAIS — CEMIG

 

LISTED COMPANY

CNPJ 17.155.730/0001-64

NIRE 31300040127

 

NOTICE TO SHAREHOLDERS

 

We hereby advise our shareholders that the Meeting of the Board of Directors held on December 16, 2010 decided to distribute extraordinary dividends in the amount of R$ 900,000,000.00 (nine hundred million Reais), corresponding to R$ 1.319408855 per share, to be paid on December 29, 2010.

 

This benefit will be payable to shareholders whose names are in the Nominal Share Registry on December 16, 2010, for the purposes of Clause 205 of Law 6404/76.

 

The shares will trade ex-dividend on December 17, 2010.

 

We remind shareholders of the importance of updating their registration information. This can be done by visiting any branch of Banco Bradesco S.A. (the institution which administers Cemig’s system of registered nominal shares), taking their personal documents with them.

 

Shareholders whose bank details are up-to-date with the Custodian Bank for Cemig’s nominal shares (Banco Bradesco S.A.) will have their credits posted automatically on the day of payment, on which occasion they will receive the advice of the corresponding credit.

 

Proceeds from shares deposited in custody at CBLC (Companhia Brasileira de Liquidação e Custódia — the Brazilian Settlement and Custody Company) will be credited to that entity and the Depository Brokers will be responsible for passing the amounts through to holders.

 

Belo Horizonte, December 16, 2010.

 

Luiz Fernando Rolla

Chief Officer for Finance, Investor Relations and Control of Holdings

 

Av. Barbacena 1200   Santo Agostinho   30190-131 Belo Horizonte, MG   Brazil   Tel.: +55 31 3506-5024   Fax +55 31 3506-5025

 

This text is a translation, provided for information only. The original text in Portuguese is the legally valid version.

 

26



Table of Contents

 

11.                                                         Summary of Principal Decisions of the 499th Meeting of the Board of Directors Companhia Energética de Minas Gerais — CEMIG, December 16, 2010

 

27



Table of Contents

 

 

COMPANHIA ENERGÉTICA DE MINAS GERAIS — CEMIG

 

LISTED COMPANY

CNPJ 17.155.730/0001-64

NIRE 31300040127

 

MEETING OF THE BOARD OF DIRECTORS

 

SUMMARY OF PRINCIPAL DECISIONS

 

The Board of Directors of CEMIG (Companhia Energética de Minas Gerais), at its 499th meeting, held on December 16, 2010, decided the following:

 

1. Declaration of an extraordinary dividend, of R$ 900 million, equivalent to R$ 1.319408855 per share, using the profit reserve established under the Bylaws for this purpose. Payment of this dividend will take place on December 29, 2010. Stockholders entitled to this dividend will be those whose names are on the Company’s Nominal Share Register on December 16, 2010.

 

2. Authorization for Cemig GT to take part in Aneel Auction 04/2010, and to present a bid for the Teles Pires Hydroelectric Project.

 

Consequentially, Cemig GT was authorized to sign the following documents, all of them with CPFL, Andrade Gutierrez and Camargo Correa:

 

·                  Private Instrument of Constitution of the Centro Norte Energia Consortium;

 

·                  Consortium Members’ Agreement;

 

·                  Agreement for Participation in Auction and Implementation and Commercial Operation of the Teles Pires Hydroelectric Project.

 

Av. Barbacena 1200   Santo Agostinho   30190-131 Belo Horizonte, MG   Brazil   Tel.: +55 31 3506-5024   Fax +55 31 3506-5025

 

This text is a translation, provided for information only. The original text in Portuguese is the legally valid version.

 

28



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12.                                                         Market Announcement — Declaration of extraordinary dividend Companhia Energética de Minas Gerais — CEMIG, December 16, 2010

 

29



Table of Contents

 

 

COMPANHIA ENERGÉTICA DE MINAS GERAIS — CEMIG

 

LISTED COMPANY

 

CNPJ 17.155.730/0001-64

NIRE 31300040127

 

MARKET ANNOUNCEMENT

 

DECLARATION OF EXTRAORDINARY DIVIDEND

 

CEMIG (Companhia Energética de Minas Gerais), a listed company with securities traded on the stock exchanges of São Paulo, New York and Madrid, hereby informs the public as follows:

 

At a meeting held today, December 16, 2010, the Board of Directors decided to declare an extraordinary dividend of R$ 900 million, equivalent to R$ 1.319408855 per share, using the Profit Reserve established under the Bylaws for this purpose.

 

This dividend will be paid on December 29, 2010. Stockholders entitled to this dividend will be those whose names are on the Company’s Nominal Share Register on December 16, 2010.

 

Belo Horizonte, December 16, 2010,

 

Luiz Fernando Rolla

Chief Officer for Finance, Investor Relations and Financial Control of Holdings

 

Av. Barbacena 1200   Santo Agostinho   30190-131 Belo Horizonte, MG   Brazil   Tel.: +55 31 3506-5024   Fax +55 31 3506-5025

 

This text is a translation, provided for information only. The original text in Portuguese is the legally valid version.

 

30



Table of Contents

 

13.                                                         Restated Quarterly Results for the Third Quarter Ended September 30, 2010 Cemig Geração e Transmissão S.A., December 14, 2010

 

31



Table of Contents

 

 

CONTENTS

 

 

 

BALANCE SHEETS

33

INCOME STATEMENTS

35

STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

36

STATEMENTS OF CASH FLOWS

37

EXPLANATORY NOTES TO THE QUARTERLY INFORMATION (ITR)

39

2. PRESENTATION OF THE QUARTERLY INFORMATION

41

3. PRINCIPLES OF CONSOLIDATION

45

4.CASH AND CASH EQUIVALENTS

46

5. CONSUMERS AND TRADERS

46

6. TRADERS — TRANSACTIONS IN “FREE ENERGY”

47

7. REGULATORY ASSETS AND LIABILITIES — THE TARIFF REVIEW

48

8. TAXES OFFSETABLE

49

9. TAX CREDITS

50

10. DEPOSITS LINKED TO LEGAL ACTIONS

52

11. INVESTMENTS

53

12. FIXED ASSETS

55

13. INTANGIBLE

57

14. SUPPLIERS

58

15. TAXES, CHARGES AND CONTRIBUTIONS

59

16. LOANS, FINANCINGS AND DEBENTURES

60

17. REGULATORY CHARGES

64

18. POST-EMPLOYMENT OBLIGATIONS

64

19. CONTINGENCY PROVISIONS

66

20. STOCKHOLDERS’ EQUITY

68

21. REVENUE FROM SUPPLY OF ELECTRICITY

69

22. REVENUE FROM USE OF THE NETWORK

69

23. DEDUCTIONS FROM OPERATIONAL REVENUES

70

24. OPERATIONAL COSTS AND EXPENSES

71

25. NET FINANCIAL EXPENSES

73

26. TRANSACTIONS WITH RELATED PARTIES

73

27. FINANCIAL INSTRUMENTS

75

28. — FINANCIAL STATEMENTS SEPARATED BY COMPANY

81

CONSOLIDATED ECONOMIC AND FINANCIAL PERFORMANCE

83

 

32



Table of Contents

 

BALANCE SHEETS

 

AT SEPTEMBER 30 AND JUNE 30, 2010

 

ASSETS

 

R$ ’000

 

CEMIG Geração e Transmissão S.A

 

 

 

Consolidated

 

Holding company

 

 

 

30/09/2010

 

30/06/2010

 

30/09/2010

 

30/06/2010

 

CURRENT

 

 

 

 

 

 

 

 

 

Cash and cash equivalents (Note 4)

 

2,417,623

 

2,051,502

 

2,110,555

 

1,755,513

 

Consumers and traders (Note 5)

 

366,978

 

330,518

 

361,008

 

326,583

 

Concession holders — transport of energy

 

112,660

 

118,024

 

62,016

 

70,243

 

Taxes subject to offsetting (Note 8)

 

521,098

 

424,165

 

506,164

 

409,853

 

Traders — Transactions in “Free Energy” (Note 6)

 

47,678

 

46,141

 

47,678

 

46,141

 

Tax credits (Note 9)

 

30,930

 

20,519

 

29,558

 

19,508

 

Inventories

 

7,347

 

6,752

 

6,102

 

5,035

 

Regulatory assets — Tariff Review (Note 7)

 

68,468

 

91,954

 

68,468

 

91,954

 

Other credits

 

108,994

 

117,020

 

92,649

 

93,767

 

TOTAL, CURRENT

 

3,681,776

 

3,206,595

 

3,284,198

 

2,818,597

 

 

 

 

 

 

 

 

 

 

 

NON-CURRENT

 

 

 

 

 

 

 

 

 

Long term assets

 

 

 

 

 

 

 

 

 

Tax credits (Note 9)

 

55,547

 

60,133

 

55,547

 

60,133

 

Taxes subject to offsetting (Note 8)

 

11,243

 

13,372

 

7,869

 

10,518

 

Deposits linked to legal actions (Note 10)

 

115,455

 

106,446

 

113,438

 

104,431

 

Receivable from related parties

 

4,353

 

4,067

 

2,905

 

2,905

 

Regulatory assets — Tariff Review (Note 7)

 

4,043

 

1,055

 

4,043

 

1,055

 

Other credits

 

52,241

 

23,124

 

6,950

 

7,010

 

 

 

242,882

 

208,197

 

190,752

 

186,052

 

 

 

 

 

 

 

 

 

 

 

Investments (Note 11)

 

1,573

 

1,737

 

2,590,716

 

2,488,016

 

Fixed assets (Note 12)

 

8,084,072

 

7,956,333

 

5,343,344

 

5,373,177

 

Intangible (Note 13)

 

1,332,835

 

1,345,688

 

25,777

 

25,953

 

TOTAL, NON-CURRENT

 

9,661,362

 

9,511,955

 

8,150,589

 

8,073,198

 

TOTAL ASSETS

 

13,343,138

 

12,718,550

 

11,434,787

 

10,891,795

 

 

The Explanatory Notes are an integral part of the Quarterly Information.

 

This text is a translation, provided for information only. The original text in Portuguese is the legally valid version.

 

33



Table of Contents

 

BALANCE SHEETS

 

AT SEPTEMBER 30 AND JUNE 30, 2010

 

LIABILITIES

 

R$ ’000

 

 

 

Consolidated

 

Holding company

 

 

 

30/09/2010

 

30/06/2010

 

30/09/2010

 

30/06/2010

 

CURRENT

 

 

 

 

 

 

 

 

 

Loans and financings (Note 16)

 

693,000

 

943,528

 

585,353

 

508,221

 

Debentures (Note 16)

 

203,126

 

119,809

 

196,470

 

121,927

 

Suppliers (Note 14)

 

133,485

 

140,420

 

109,538

 

88,195

 

Taxes, charges and contributions (Note 15)

 

433,600

 

317,533

 

426,060

 

308,435

 

Interest on Equity and dividends payable

 

186,234

 

110,347

 

186,234

 

110,347

 

Regulatory liabilities — Tariff Review (Note 7)

 

58,576

 

75,568

 

58,576

 

75,568

 

Salaries and mandatory charges on payroll

 

56,221

 

63,701

 

52,188

 

60,064

 

Regulatory charges (Note 17)

 

49,410

 

47,794

 

42,248

 

40,793

 

Profit shares

 

17,071

 

11,988

 

17,071

 

11,988

 

Debt to related parties

 

188

 

528

 

188

 

16,907

 

Post-employment obligations (Note 18)

 

17,526

 

18,340

 

17,526

 

18,340

 

Other obligations

 

39,002

 

37,385

 

35,827

 

36,399

 

TOTAL, CURRENT

 

1,887,439

 

1,886,941

 

1,727,279

 

1,397,184

 

 

 

 

 

 

 

 

 

 

 

NON-CURRENT

 

 

 

 

 

 

 

 

 

Loans and financings (Note 16)

 

3,135,844

 

3,154,322

 

1,948,104

 

2,005,480

 

Debentures (Note 16)

 

3,527,220

 

3,185,870

 

3,013,074

 

3,013,049

 

Contingency provisions (Note 19)

 

7,122

 

6,125

 

6,089

 

5,253

 

Post-employment obligations (Note 18)

 

233,102

 

236,083

 

233,102

 

236,083

 

Taxes, charges and contributions (Note 15)

 

156,295

 

146,538

 

156,295

 

146,532

 

Regulatory charges (Note 17)

 

71,703

 

65,410

 

71,703

 

65,410

 

Other obligations

 

87,531

 

55,329

 

42,259

 

40,872

 

TOTAL, NON-CURRENT

 

7,218,817

 

6,849,677

 

5,470,626

 

5,512,679

 

 

 

 

 

 

 

 

 

 

 

STOCKHOLDERS’ EQUITY (Note 20)

 

 

 

 

 

 

 

 

 

Registered capital

 

3,296,785

 

3,296,785

 

3,296,785

 

3,296,785

 

Profit reserves

 

266,112

 

266,112

 

266,112

 

266,112

 

Valuation adjustment to Stockholders’ equity

 

1,993

 

451

 

1,993

 

451

 

Retained earnings

 

671,992

 

418,584

 

671,992

 

418,584

 

TOTAL STOCKHOLDERS’ EQUITY

 

4,236,882

 

3,981,932

 

4,236,882

 

3,981,932

 

TOTAL LIABILITIES

 

13,343,138

 

12,718,550

 

11,434,787

 

10,891,795

 

 

The Explanatory Notes are an integral part of the Quarterly Information.

 

34



Table of Contents

 

INCOME STATEMENTS

 

FOR THE NINE-MONTH PERIODS ENDING SEPTEMBER 30, 2010 AND 2009

 

(R$ ’000, except net profit per thousand shares)

 

 

 

Consolidated

 

Holding company

 

 

 

 

 

30/09/2009

 

 

 

30/09/2009

 

 

 

30/09/2010

 

Reclassified

 

30/09/2010

 

Reclassified

 

OPERATIONAL REVENUE

 

 

 

 

 

 

 

 

 

Revenue from supply of electricity (Note 21)

 

2,686,817

 

2,631,903

 

2,665,967

 

2,621,283

 

Revenue from use of the grid (Note 22)

 

707,576

 

636,403

 

437,890

 

636,403

 

Other operational revenues

 

20,501

 

16,951

 

20,381

 

16,951

 

 

 

3,414,894

 

3,285,257

 

3,124,238

 

3,274,637

 

DEDUCTIONS FROM OPERATIONAL REVENUE (Note 23)

 

(729,804

)

(672,951

)

(708,107

)

(671,116

)

NET OPERATIONAL REVENUE

 

2,685,090

 

2,612,306

 

2,416,131

 

2,603,521

 

COST OF ELECTRICITY SERVICE

 

 

 

 

 

 

 

 

 

COST OF ELECTRICITY (Note 24)

 

 

 

 

 

 

 

 

 

Charges for the use of the basic transmission grid

 

(192,809

)

(208,356

)

(199,287

)

(208,356

)

Electricity bought for resale

 

(242,334

)

(116,716

)

(242,270

)

(116,227

)

 

 

(435,143

)

(325,072

)

(441,557

)

(324,583

)

COST OF OPERATION (Note 24)

 

 

 

 

 

 

 

 

 

Personnel and managers

 

(167,778

)

(160,975

)

(154,481

)

(160,942

)

Post-employment obligations

 

(17,797

)

(15,092

)

(17,797

)

(15,092

)

Materials

 

(12,401

)

(9,620

)

(11,348

)

(9,582

)

Raw materials and inputs for generation

 

 

 

(4,070

)

 

 

(4,070

)

Outsourced services

 

(99,459

)

(65,325

)

(75,466

)

(65,003

)

Depreciation and amortization

 

(221,840

)

(169,369

)

(167,793

)

(168,612

)

Operational (provisions /) reversals

 

5,777

 

(860

)

5,542

 

(860

)

Royalties for use of water resources

 

(100,774

)

(105,163

)

(100,713

)

(105,163

)

Other costs of operation

 

(48,606

)

(23,786

)

(43,292

)

(23,506

)

 

 

(662,878

)

(554,260

)

(565,348

)

(552,830

)

 

 

 

 

 

 

 

 

 

TOTAL COST

 

(1,098,021

)

(879,332

)

(1,006,905

)

(877,413

)

 

 

 

 

 

 

 

 

 

GROSS PROFIT

 

1,587,069

 

1,732,974

 

1,409,226

 

1,726,108

 

 

 

 

 

 

 

 

 

 

OPERATIONAL EXPENSES (Note 24)

 

 

 

 

 

 

 

 

 

Selling expenses

 

453

 

(289

)

453

 

(52

)

General and administrative expenses

 

(74,799

)

(114,286

)

(74,799

)

(112,855

)

Other operational expenses

 

(6,946

)

(2,811

)

(5,385

)

(2,707

)

 

 

(81,292

)

(117,386

)

(79,731

)

(115,614

)

PROFIT FROM THE SERVICE (OPERATIONAL PROFIT BEFORE EQUITY GAINS/LOSSES AND FINANCIAL REVENUES/EXPENSES)

 

1,505,777

 

1,615,588

 

1,329,495

 

1,610,494

 

Equity gain (loss) on subsidiaries

 

 

 

79,370

 

(263

)

Net financial expenses (Note 25)

 

(318,090

)

(147,934

)

(252,181

)

(142,979

)

PROFIT BEFORE TAXATION AND PROFIT SHARES

 

1,187,687

 

1,467,654

 

1,156,684

 

1,467,252

 

 

 

 

 

 

 

 

 

 

Income tax and Social Contribution tax (Note 9 b)

 

(350,611

)

(393,773

)

(319,673

)

(393,371

)

Deferred income tax and Social Contribution tax (Note 9 b)

 

21,468

 

(48,085

)

21,533

 

(48,085

)

Employees’ and managers’ profit shares (Note 24)

 

(27,396

)

(21,947

)

(27,396

)

(21,947

)

NET PROFIT FOR THE PERIOD

 

831,148

 

1,003,849

 

831,148

 

1,003,849

 

NET PROFIT PER THOUSAND SHARES, R$ 

 

 

 

 

 

286.92

 

346.54

 

 

The Explanatory Notes are an integral part of the Quarterly Information.

 

35



Table of Contents

 

STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

 

FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2010

 

R$ ’000

 

 

 

Registered

 

Profit

 

Valuation adjustment

 

Retained

 

 

 

 

 

capital

 

reserves

 

to Equity

 

earnings

 

Total

 

BALANCES ON JUNE 30, 2010

 

3,296,785

 

266,112

 

451

 

418,584

 

3,981,932

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital increase

 

 

 

 

 

 

Net profit for the period

 

 

 

 

342,686

 

342,686

 

Allocation of profit

 

 

 

 

 

 

Interest on Equity

 

 

 

 

(89,278

)

(89,278

)

Recording of Revaluation reserve

 

 

 

1,542

 

 

 

1,542

 

BALANCES ON SEPTEMBER 30, 2010

 

3,296,785

 

266,112

 

1,993

 

671,992

 

4,236,882

 

 

 

 

 

 

 

 

 

 

 

 

 

BALANCES AT DECEMBER 31, 2009

 

2,896,785

 

666,112

 

 

 

3,562,897

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital increase

 

400,000

 

(400,000

)

 

 

 

Net profit for the period

 

 

 

 

831,148

 

831,148

 

Interest on Equity

 

 

 

 

(159,156

)

(159,156

)

Recording of Revaluation reserve

 

 

 

1,993

 

 

 

1,993

 

BALANCES ON SEPTEMBER 30, 2010

 

3,296,785

 

266,112

 

1,993

 

671,992

 

4,236,882

 

 

The Explanatory Notes are an integral part of the Quarterly Information.

 

36



Table of Contents

 

STATEMENTS OF CASH FLOWS

 

 FOR THE NINE-MONTH PERIODS ENDING SEPTEMBER 30, 2010 AND 2009

 

R$ ’000

 

 

 

CONSOLIDATED

 

HOLDING COMPANY

 

 

 

30/09/2010

 

30/09/2009

 

30/09/2010

 

30/09/2009

 

CASH FLOW FROM OPERATIONS

 

 

 

 

 

 

 

 

 

Net profit for the period

 

831,148

 

1,003,849

 

831,148

 

1,003,849

 

Expenses (revenues) not affecting Cash and cash equivalents

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

222,150

 

169,904

 

168,104

 

168,838

 

Net write-offs of fixed assets

 

(328

)

2,541

 

(335

)

2,541

 

Amortization of goodwill on acquisition

 

17,389

 

 

(11,186

)

 

 

Equity gains (losses) in subsidiaries

 

 

 

(79,370

)

263

 

Interest and Monetary updating — Non-current

 

40,433

 

10,877

 

40,766

 

4,086

 

Regulatory asset — Transmission tariff review

 

 

 

(136,657

)

 

 

(136,657

)

Deferred federal taxes

 

(21,468

)

48,085

 

(21,533

)

48,085

 

Provisions (reversals) for operational losses

 

(6,230

)

911

 

(5,994

)

911

 

Provisions for losses on “Free Energy” transactions

 

 

 

(7,915

)

 

 

(7,915

)

Provision for losses (gains) on financial instruments

 

(168

)

37,486

 

(168

)

37,486

 

Post-employment obligations

 

23,183

 

21,999

 

23,183

 

21,999

 

Others

 

2

 

(21

)

 

(412

)

 

 

1,106,111

 

1,151,059

 

944,615

 

1,143,074

 

 

 

 

 

 

 

 

 

 

 

(Increase) /reduction of assets

 

 

 

 

 

 

 

 

 

Consumers and traders

 

72,938

 

(33,037

)

49,782

 

(31,530

)

Traders — Transactions in “Free Energy”

 

(1,651

)

3,317

 

(1,546

)

3,317

 

Taxes offsetable

 

(269,136

)

(295,983

)

(290,691

)

(295,089

)

Transport of electricity

 

(23,553

)

(18,836

)

5,711

 

(18,836

)

Tax credits

 

20,903

 

(40,318

)

21,721

 

(40,318

)

Payments into Court

 

(25,344

)

(22,842

)

(25,569

)

(22,842

)

Others

 

31,881

 

(11,460

)

33,487

 

(5,688

)

 

 

(193,962

)

(419,159

)

(207,105

)

(410,986

)

 

 

 

 

 

 

 

 

 

 

Increase (reduction) of liabilities

 

 

 

 

 

 

 

 

 

Suppliers

 

9,971

 

(49,004

)

25,555

 

(42,055

)

Taxes and Social Contribution tax

 

301,881

 

480,107

 

326,960

 

479,222

 

Salaries and mandatory charges on payroll

 

(21,122

)

13,739

 

(21,917

)

13,301

 

Regulatory charges

 

6,966

 

(5,343

)

4,561

 

(5,343

)

Loans and financings

 

231,095

 

85,313

 

182,834

 

70,878

 

Post-employment obligations

 

(33,408

)

(30,374

)

(33,408

)

(30,374

)

Losses on financial instruments

 

(2,981

)

1,884

 

168

 

1,884

 

Others

 

13,570

 

(12,887

)

2,096

 

8,203

 

 

 

505,972

 

483,435

 

486,849

 

495,716

 

 

 

 

 

 

 

 

 

 

 

NET CASH FROM OPERATIONAL ACTIVITIES

 

1,418,121

 

1,215,335

 

1,224,359

 

1,227,804

 

 

 

 

 

 

 

 

 

 

 

CASH FLOW OF FINANCING ACTIVITIES

 

 

 

 

 

 

 

 

 

Financings obtained

 

3,367,826

 

449,105

 

2,755,316

 

127,605

 

Payments of loans and financings

 

(3,268,636

)

(21,500

)

(2,849,945

)

(20,074

)

Interest on Equity, and dividends

 

(889,977

)

(500,775

)

(889,977

)

(500,775

)

NET CASH USED IN FINANCING ACTIVITIES

 

(790,787

)

73,170

 

(984,606

)

(393,244

)

 

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CONSOLIDATED

 

HOLDING COMPANY

 

 

 

30/09/2010

 

30/09/2009

 

30/09/2010

 

30/09/2009

 

CASH FLOWS IN INVESTMENT ACTIVITIES

 

 

 

 

 

 

 

 

 

Investments

 

(355,163

)

(378,412

)

(73,490

)

(91,397

)

Fixed assets

 

(458,505

)

(4,392

)

(521

)

(2,133

)

Intangible

 

(439,758

)

(206,555

)

(889,663

)

(294,038

)

NET CASH USED IN INVESTMENT ACTIVITIES

 

(1,253,426

)

(589,359

)

(963,674

)

(387,568

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET CHANGE IN CASH POSITION

 

(626,092

)

552,806

 

(723,921

)

446,992

 

 

 

 

 

 

 

 

 

 

 

STATEMENT OF CHANGES IN CASH POSITION

 

 

 

 

 

 

 

 

 

At start of period

 

3,043,715

 

862,098

 

2,834,476

 

852,213

 

At end of period

 

2,417,623

 

1,414,904

 

2,110,555

 

1,299,205

 

 

 

(626,092

)

552,806

 

(723,921

)

446,992

 

 

The Explanatory Notes are an integral part of the Quarterly Information.

 

 

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EXPLANATORY NOTES TO THE QUARTERLY INFORMATION (ITR)

FOR SEPTEMBER 30, 2010

 

(In R$ ’000, except where otherwise stated)

 

1. OPERATIONAL CONTEXT

 

Cemig Geração e Transmissão S.A. (“Cemig GT”, or “the Company”) is a Brazilian corporation registered with the Brazilian Securities Commission (CVM) for listing, and a wholly-owned subsidiary of Companhia Energética de Minas Gerais — Cemig (“Cemig”). It was created on September 8, 2004, and started operations on January 1, 2005, as a result of the process of segregation (“unbundling”) of Cemig’s activities. Its shares are not traded on any exchange.

 

Cemig GT’s objects are: to study, plan, project, build and commercially operate systems of generation, transmission and sale of electricity and related services for which concessions are granted, under any form of law, to it or to companies of which it maintains stockholding control; to operate in the various fields of energy, from whatever source, with a view to economic and commercial operation; iii) to provide consultancy services within its field of operation to companies in and outside Brazil; and iv) to carry out activities directly or indirectly related to its objects.

 

Cemig GT has 48 power plants, of which 43 are hydroelectric, 4 are wind power plants and one is a thermal plant, and their transmission lines, most of which are part of the Brazilian national generation and transmission grid system.

 

The company has stockholdings in the following subsidiaries:

 

·      Hidrelétrica Cachoeirão S.A. (jointly controlled, 49.00% stake): Production and sale of electricity as an independent power producer, through the Cachoeirão hydroelectric power plant, at Pocrane, in the State of Minas Gerais, with installed capacity of 27MW (information not reviewed by external auditors). The plant began operating in 2009.

 

·      Central Eólica Praias de Parajuru S.A. (jointly controlled, 49.00% stake): The Praias de Parajuru Wind Farm, in the municipality of Beberibe in the state of Ceará, Northern Brazil, with installed capacity of 28.8MW (information not reviewed by external auditors). The plant began operating in August 2009.

 

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·      Baguari Energia S.A. (jointly controlled, 69.39% stake): Construction, operation, maintenance and commercial operation of the Baguari Hydroelectric Plant, through its participation in the UHE Baguari Consortium (Baguari Energia 49.00%, Neoenergia 51.00%), with installed capacity of 140MW (information not reviewed by external auditors), on the Doce River in Governador Valadares, Minas Gerais State. The plant began operation of its units from September 2009 to May 2010.

 

·      Transmissora Aliança de Energia Elétrica S.A. (“Taesa”), previously named Terna Participações S. A., (jointly controlled, 32.27% stake): Construction and operation of electricity transmission facilities in 11 states of Brazil through the following companies in which it has a controlling or other interest: TSN — Transmissora Sudeste Nordeste S.A.; Novatrans Energia S.A.; ETEO — Empresa de Transmissão de Energia do Oeste S.A.; ETAU — Empresa de Transmissão do Alto Uruguai S.A.; Brasnorte Transmissora de Energia S.A. and Terna Serviços Ltda., which, jointly, control 3,712km of high voltage transmission lines, from 230kV to 500kV (information not reviewed by external auditors), components of the Brazilian National Grid.

 

·      Transmissora Alvorada de Energia S.A. (“Alvorada”) (jointly controlled, 74.50% stake): Holding of 62.80% in Transmissora Alterosa de Energia S.A.

 

·      Transmissora Alterosa de Energia S.A. (“Alterosa”) (jointly controlled, 36.23% stake): Holding of 29.42% in Transmissora Aliança de Energia S.A.

 

·      Central Eólica Praias do Morgado S.A. (jointly controlled, 49% stake): The Praias do Morgado Wind Farm, in the municipality of Aracajú in the state of Ceará, Northern Brazil, with installed capacity of 28.8MW (information not reviewed by external auditors). The plant began operating in April 2010.

 

·      Central Eólica Volta do Rio S.A. (jointly controlled, 49% stake): The Volta do Rio Wind Farm, also in the municipality of Aracajú in the state of Ceará, Northern Brazil, with installed capacity of 42MW (information not reviewed by external auditors). The plant began operating in September 2010.

 

Subsidiaries at pre-operational stage:

 

·      Guanhães Energia S.A. (jointly controlled, 49.00% stake): Production and sale of electricity through building and commercial operation of the following Small Hydro Plants: Dores de Guanhães, Senhora do Porto and Jacaré, in the municipality of Dores de Guanhães; and Fortuna II, in the municipality of Virginópolis. All are in the State of Minas Gerais. The plants are scheduled to start operating in 2011, and will have total installed capacity of 44MW (information not reviewed by external auditors).

 

·      Cemig Baguari Energia S.A. (subsidiary, 100.00% stake): Production and sale of electricity as an independent producer, in future projects.

 

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·      Madeira Energia S.A. (jointly controlled, 10.00% stake): Implementation, construction, operation and commercial operation, through its subsidiary Santo Antônio Energia S. A., of the Santo Antônio Hydroelectric Plant located in the basin of the Madeira River, in the State of Rondônia, with generation capacity of 3,150 MW (information not reviewed by external auditors) and commercial startup scheduled for 2012.

 

·      Hidrelétrica Pipoca S.A. (jointly controlled, 49.00% stake): Independent production of electricity, through construction and commercial operation of the Pipoca Small Hydro Plant, with installed capacity of 20MW (information not reviewed by external auditors), on the Manhuaçu River, in the municipalities of Caratinga and Ipanema, in the State of Minas Gerais. The plant began commercial operation in October 2010.

 

·      Lightger S.A. (jointly controlled, 49% stake): Independent power production through building and commercial operation of the hydroelectric potential referred to as the Paracambi Small Hydro Plant, with installed capacity of 25MW, on the Ribeirão das Lages river in the county of Paracambi, in the State of Rio de Janeiro. The first rotor is scheduled to start operation in October 2011.

 

·      Empresa Brasileira de Transmissão de Energia (“EBTE”) (jointly controlled, 49% stake): Holder of public service electricity transmission concession for transmission lines in the State of Mato Grosso. Operational startup is scheduled for December 2010.

 

2. PRESENTATION OF THE QUARTERLY INFORMATION

 

2.1. PRESENTATION OF THE QUARTERLY INFORMATION

 

The individual and consolidated Quarterly Information (ITR) has been prepared according to Brazilian accounting practices, comprising: the Brazilian Corporate Law; the statements, orientations and interpretations issued by the Brazilian Accounting Statements Committee (“CPC”); rules of the Brazilian Securities Commission (“CVM” — Comissão de Valores Mobiliários); and rules of the specific legislation applicable to holders of Brazilian electricity concessions, issued by the Brazilian National Electricity Agency (“Aneel”).

 

This Quarterly Information has been prepared according to principles, practices and criteria consistent with those adopted in the preparation of the annual accounting statements at December 31, 2009. Hence this Quarterly Information should be read in conjunction with those annual accounting statements.

 

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The reclassifications made to the balances of September 30, 2009 for the purposes of comparability, in compliance with the change in the Electricity Public Service Accounting Manual (MCSPEE) are as follows:  

 

 

 

 

 

Holding

 

 

 

 

 

 

 

 

 

Consolidated

 

company

 

 

 

Consolidated

 

Holding company

 

Original line

 

Amount, R$

 

Amount, R$

 

Reclassified to

 

Amount, R$

 

Amount, R$

 

 

 

 

 

 

 

 

 

 

 

 

 

Other operational expenses

 

 

 

 

 

Deductions from revenue

 

 

 

 

 

Other operational expenses

 

11,866

 

11,866

 

Emergency Acquisition Charge

 

(11,866

)

(11,866

)

 

2.2. APPLICATION OF THE NEW ACCOUNTING RULES, STARTING IN 2010  

 

In continuation of the process, begun in 2008, of harmonizing Brazilian accounting rules with International Financial Reporting Standards — IFRS, issued by the IASB — International Accounting Standards Board, during 2009 the CPC issued, and the CVM approved, several accounting statements, with obligatory application for the business years starting on or after January 1, 2010, backdated to 2009 for the purposes of comparability.   

 

However, as allowed by CVM Decision 603, of November 10, 2009, as amended by CVM Decision 626, of March 31, 2010, the Company opted to present its quarterly information in accordance with the accounting rules adopted in Brazil up to December 31, 2009. 

 

The Company is in the process of assessing the possible effects of application of the technical statements so far issued and has concluded, preliminarily, that the main effects will arise from the application of the following rules:

 

Technical Interpretation ICPC 01 — Concession Contracts, which establishes the general principles for recognition and measurement of obligations and the respective rights of concession contracts. Under ICPC 01, the remuneration received or receivable by the concession holder is to be recorded at its fair value, corresponding to rights held in relation to a financial asset and/or an intangible asset. At present it is not possible to estimate the effects arising from the application of this rule, since the concepts introduced are still being studied for the purposes of application, but adjustments are expected, arising from the reclassification of fixed assets as intangible and/or financial assets, recognition of construction revenue, and treatment of obligations linked to the concession.

 

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CPC Statement 17 — Construction Contracts, which establishes the accounting treatment of revenues and expenses associated with construction contracts. The applicability of this accounting statement is directly related to the resolution of doubts arising from Technical Interpretation ICPC 01, since the recognition of this revenue is not provided for in the regulatory tariff environment. Thus, the company believes that it is not possible, in the present scenario, to securely quantify the impact of adoption of the said statement.

 

Statement CPC 30 — Revenues, which sets out the accounting treatment of revenues that arise from certain types of transaction and event: sale of goods; provision of services; and use, by third parties, of other assets of the entity that generate profits, royalties and dividends. The applicability of this accounting statement is directly related to the resolution of doubts arising from Technical Interpretation ICPC 01, since the recognition of this revenue is not provided for in the regulatory tariff environment. Thus, the company believes that it is not possible, in the present scenario, to securely quantify the impact of adoption of the said statement.

 

Statement CPC 24 — Subsequent event, and ICPC 08 — Accounting of the proposal for payment of dividends: Management has the obligation to propose distribution of the profits at the end of the business year. This distribution can be changed by the stockholders. Hence, according to CPC 24 that part of the proposed dividends that is not declared and is in excess of the obligatory minimum dividend, and the interest on equity, must be maintained within Stockholders’ equity, and not be recognized as a liability at the end of the period. Dividends that are additional to the minimum are to be posted in liabilities as and when they are approved by the competent bodies of the company.

.

 Statement CPC 43: This establishes the criteria for the initial adoption of CPCs 15 to 40, and specifies that the exceptions in relation to the international rules are limited to the maintenance of equity income, in the individual financial statements that have investments valued by the equity method, and maintenance of the deferred asset formed up to December 31, 2008, until its entire amortization. At present there is the practice in Brazil of recording of regulatory assets and liabilities, and when the regulator establishes criteria for allocation of revenue or expense to subsequent periods, a regulatory asset or liability is recognized. At present these regulatory assets and liabilities represent a difference in generally accepted accounting principles between the accounting principles adopted in Brazil, and IFRS. Until this moment there is no definition on the recognition of regulatory assets and liabilities, so, the management is awaiting to assess its possible effects on the financial statements prepared in accordance with accounting practices adopted in Brazil.

 

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The Company is participating in the discussions and debates in the market, especially in the professional organizations of the accounting sector and with the regulators, in relation to the interpretations on the criteria for application of these Statements, among which we highlight Technical Interpretation ICPC 01, and these parties may possibly make a position statement on specific aspects for application in the electricity sector. At this moment, due to the conceptual doubts that have given rise to differing interpretations as to the correct application of these rules in the Brazilian regulatory environment, and until there is a better understanding on the practical application of the Statements, we believe it is not possible yet to assess and quantify the possible effects on the financial statements with a reasonable degree of certainty.

 

2.3. Transmission revenue — Criterion for recognition

 

On October 14, 2009 the CVM, through a decision of its Council, ordered that the electricity transmission service concession holders controlled by Taesa should, as from the first disclosure of ITRs of 2010, change the accounting treatment to be adopted in accounting of the revenue, with effects backdated to 2009, only for the purposes of comparability, Taesa being exempted from having to restate its accounting statements for the previous business years.

 

Considering that Cemig GT and the transmission companies of the TBE Group have electricity transmission concession contracts similar to those of Taesa, they too should adopt the same procedures ordered by the CVM.

 

On May 4, 2010, the CVM, through its Official Letter SEP/GEA 189/10, authorized non-application of this New Practice for the ITRs to be published during the 2010 business year, allowing it to be adopted only as from the business year ending December 31, 2010, jointly with the other Accounting Pronouncements that are in effect in 2010.

 

It has not been possible to assess the impact on the Stockholders’ equity of concession holders arising from the “linearization” of revenue, due to the conceptual doubts that have given rise to differing interpretations as to the correct application of Technical Interpretation ICPC 01 — Concession contracts, and its interaction with CPC 17 — Construction contracts and CPC 30 — Revenues, in the regulatory environment, as described above.

 

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3. PRINCIPLES OF CONSOLIDATION

 

The Financial Information of the Subsidiary and the Jointly-controlled Subsidiaries mentioned in Explanatory Note 1 has been consolidated, and the Jointly-controlled subsidiaries are consolidated based on the method of Proportional Consolidation, applicable to each component of the ITRs of the Subsidiaries. All the subsidiaries, including those that are jointly controlled, follow accounting practices that are consistent with those of the holding company.

 

 

 

Direct stake in total capital, %

 

 

 

30/09/2010

 

30/06/2010

 

Subsidiaries

 

 

 

 

 

Cemig Baguari Energia S.A.

 

100.00

 

100.00

 

 

 

 

 

 

 

Jointly-controlled subsidiaries

 

 

 

 

 

Hidrelétrica Cachoeirão S.A.

 

49.00

 

49.00

 

Guanhães Energia S.A.

 

49.00

 

49.00

 

Hidrelétrica Pipoca S.A.

 

49.00

 

49.00

 

Madeira Energia S.A.

 

10.00

 

10.00

 

Baguari Energia S.A.

 

69.39

 

69.39

 

Empresa Brasileira de Transmissão de Energia S.A.

 

49.00

 

49.00

 

Central Eólica Praias de Parajuru S.A.

 

49.00

 

49.00

 

Central Eólica Volta do Rio S.A.

 

49.00

 

49.00

 

Central Eólica Praias de Morgado S.A.

 

49.00

 

49.00

 

Transmissora Aliança de Energia Elétrica S.A.

 

32.27

 

32.27

 

Transmissora Alterosa de Energia S.A.

 

36.23

 

36.23

 

Transmissora Alvorada de Energia S.A.

 

74.50

 

74.50

 

Lightger S.A.

 

49.00

 

 

 

In the consolidation, the interests of the holding company in the Stockholders’ equity of the controlled companies, and the material balances of assets, liabilities, revenues and expenses arising from transactions effected between the companies, have been eliminated.

 

The references made in this Quarterly Information of the subsidiaries and of the jointly-controlled subsidiaries are made in proportion to the Company’s stake.

 

The dates of the Quarterly Information of the subsidiary companies, used for calculation of equity gains (losses) and consolidation, coincide with those of the holding company.

 

As ordered by CVM Instruction 408, the consolidated Quarterly Information includes the balances and the transactions of the exclusive investment funds, comprising public and private debt securities and debentures of companies with minimum risk rating A+(bra) (Brazilian long-term rating), ensuring high liquidity of the securities.

 

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The exclusive fund, the Quarterly Information of which is regularly reviewed, is subject to obligations, restricted to payment for services provided for administration of the assets, attributed to operation of the investments, such as custody fees, audit fees and other expenses. There are no significant financial obligations, nor assets of the unit holders to guarantee these obligations.

 

4. CASH AND CASH EQUIVALENTS

 

 

 

Consolidated

 

Holding company

 

 

 

30/09/2010

 

30/06/2010

 

30/09/2010

 

30/06/2010

 

 

 

 

 

 

 

 

 

 

 

Bank accounts

 

54,267

 

17,937

 

7,167

 

10,360

 

Cash investments

 

 

 

 

 

 

 

 

 

Bank certificates of deposit

 

2,078,126

 

1,748,075

 

2,018,477

 

1,647,349

 

National Treasury Notes (NTNs)

 

149,090

 

 

 

 

Treasury Financial Notes (LFTs)

 

47,684

 

183,882

 

13,353

 

13,354

 

National Treasury Notes (LTNs)

 

20,287

 

 

20,287

 

 

Others

 

68,169

 

101,608

 

51,271

 

84,450

 

 

 

2,363,356

 

2,033,565

 

2,103,388

 

1,745,153

 

 

 

2,417,623

 

2,051,502

 

2,110,555

 

1,755,513

 

 

Cash investments are transactions contracted with Brazilian institutions, and international financial institutions with branch offices in Brazil, at normal market prices and on normal market conditions. All the transactions are highly liquid, are promptly convertible into a known amount of cash, and are subject to insignificant risk of change in value. Bank Certificates of Deposit (CBDs), with fixed or floating rates, and Time Deposits with Special Guarantee (DPGEs) are remunerated at a percentage (varying from 100% to 110%) of the CDI rate published by Cetip (the Custody and Settlement Chamber).

 

5. CONSUMERS AND TRADERS

 

 

 

 

 

Up to 90

 

Over 90

 

 

 

 

 

 

 

Balances

 

days past

 

days past

 

Total

 

Consumer type

 

not yet due

 

due

 

due

 

30/09/2010

 

30/06/2010

 

 

 

 

 

 

 

 

 

 

 

 

 

Holding company

 

 

 

 

 

 

 

 

 

 

 

Industrial

 

175,723

 

7,918

 

6,099

 

189,740

 

171,994

 

Commercial, services and others

 

785

 

11

 

 

796

 

756

 

Wholesale supply to other concession holders

 

121,425

 

38,638

 

12,329

 

172,392

 

155,753

 

Provision for doubtful receivables

 

 

 

 

 

(1,920

)

(1,920

)

(1,920

)

 

 

297,933

 

46,567

 

16,508

 

361,008

 

326,583

 

Subsidiaries

 

 

 

 

 

 

 

 

 

 

 

Industrial

 

706

 

 

 

706

 

665

 

Commercial, services and others

 

5,264

 

 

 

5,264

 

3,270

 

 

 

 

 

 

 

 

 

5,970

 

3,935

 

Total, consolidated

 

303,903

 

46,567

 

16,508

 

366,978

 

330,518

 

 

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The Company makes the Provisions for Doubtful Receivables through an individual analysis of clients’ outstanding balances, taking into account the history of default, negotiations in progress and the existence of any real guarantees.

 

The Provision for Doubtful Receivables is considered to be sufficient to cover any losses in the realization of these assets.

 

6. TRADERS - TRANSACTIONS IN “FREE ENERGY”

 

Cemig GT’s obligations and rights in relation to the transactions in “free energy” in the Electricity Trading Chamber (“CCEE”) during the Rationing Program are as follows:

 

 

 

Consolidated and

 

 

 

Holding company

 

 

 

30/09/2010

 

30/06/2010

 

CURRENT ASSETS

 

 

 

 

 

Amounts to be received from distributors

 

47,678

 

46,141

 

 

 

47,678

 

46,141

 

 

The Amounts receivable, in the above table, refer to the difference between the prices paid by the Company in the transactions in energy on the CCEE, during the period when the Rationing Program was in force, and the rate of R$ 49.26/MWh. This difference is to be reimbursed through the amounts raised by means of the Extraordinary Tariff Recomposition (RTE), as defined in the General Agreement for the Electricity Sector.

 

In accordance with Aneel Resolution 36 of January 29, 2003, the electricity distributors have since March 2003 raised the amounts obtained monthly by means of the RTE and passed them through to those generators and distributors who have amounts receivable – which include the Company.

 

On January 12, 2010, Aneel published Normative Resolution 387, establishing that the balances of payments due for “Free Energy” and for Loss of Revenue, after completion of the process of collection of the RTE in distributors’ retail supply tariffs, should be recalculated using a new methodology.

 

The final passthrough of “Free Energy” amounts will be the sum of the monthly differences, positive or negative, between the passthroughs for Free Energy made in accordance with certain defined criteria, and the passthroughs already made, plus financial remuneration at the Selic rate, from the date of occurrence of the difference up to the date of completion of the charging of the RTE within retail supply tariffs.

 

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As a result of the recalculation by Aneel of the amounts to be received by the Distributors, the Company recorded an amount of R$ 36,388, corresponding to the amounts to be received by the Distributors, of which, up to September 2010, the company received the amount of R$ 7,388.

 

The amounts to which Cemig GT is entitled are updated by the variation in the Selic rate plus 1.00% interest per year.

 

The conclusion of certain court proceedings in progress, brought by market agents, in relation to interpretation of the rules in force at the time of the transactions on the CCEE, could result in changes in the amounts recorded.

 

7. REGULATORY ASSETS AND LIABILITIES – THE TARIFF REVIEW

 

FIRST TARIFF REVIEW

 

The first Review of the Transmission Tariff, for all of the Company’s base of assets, was approved by the Council of Aneel on June 17, 2009. In it Aneel set the percentage for repositioning of the Company’s Permitted Annual Revenue (RAP) at 5.35%, backdated to 2005.

 

On June 1, 2010, Aneel granted the Administrative Appeal filed by the Company, ordering repositioning of its first periodic Tariff Review from 5.35% to 6.96%, for the following reasons:

 

(i)                                     costs incurred in preparation of the evaluation report, in the amount of R$ 978;

 

(ii)                                  alteration of the Net Remuneration Basis by R$ 1,140;

 

(iii)                               inclusion of the Sector Charges on the difference of amounts in Revenues applied for, of the last four cycles, and Updating of the Financial Amount, due to the alteration of the profile of Remuneration of Authorized Facilities, of R$ 8,424.

 

Aneel additionally established a financial component, of R$ 168,632, to be paid to the Company as the “Adjustment Portion” (“PA”) in 24 months. This amount is the backdated effect of the tariff repositioning over the period from July 1, 2005 through June 30, 2009, increased by the R$ 10,542 arising from the Administrative Appeal. The first part, of R$ 85,732, was incorporated into the adjustment for the 2009–10 cycle, and has been received in full. The second part, of R$ 93,009, will be compensated in the 2010–11 adjustment.

 

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SECOND TARIFF REVIEW

 

On June 8, 2010 Aneel homologated the result of the Company’s Second Tariff Review, which set the repositioning of the Permitted Annual Revenue (RAP) at –15.88%, backdated to June 2009. This resulted in a requirement for reimbursement of R$ 75,568 to the users of the Transmission System during the July 2010 to July 2011 tariff cycle. The Company recorded this amount as a reduction of Revenue in the second quarter of 2010.

 

As and when amounts of the “Adjustment Portion”, relating to the first and second Tariff Reviews, are received/discounted in the tariff, the Company transfers the corresponding amounts recorded in Assets and Liabilities to the Income statement.

 

 

 

30/09/2010

 

30/06/2010

 

Revisão Tarifária da Transmissão — 1a Revisão

 

 

 

 

 

Valores Homologados

 

158,090

 

158,090

 

Atualização Monetária pelo IGPM

 

2,475

 

2,868

 

Valores arrecadados

 

(96,557

)

(78,932

)

Total da 1a Revisão Tarifária da Transmissão

 

64,008

 

82,026

 

 

 

 

 

 

 

Revisão Tarifária da Transmissão — 2a Revisão

 

 

 

 

 

Valores Homologados

 

(64,585

)

(64,585

)

Atualização pelo IGPM

 

(126

)

 

Valores arrecadados

 

14,638

 

 

Total da 2a Revisão Tarifária da Transmissão

 

(50,073

)

(64,585

)

 

 

 

 

 

 

Ativo Circulante

 

68,468

 

91,954

 

Ativo Não Circulante

 

4,043

 

1,055

 

Passivo Circulante

 

(58,576

)

(75,568

)

 

 

13,935

 

17,441

 

 

8. TAXES OFFSETABLE

 

 

 

Consolidated

 

Holding company

 

 

 

30/09/2010

 

30/06/2010

 

30/09/2010

 

30/06/2010

 

Current

 

 

 

 

 

 

 

 

 

ICMS tax recoverable

 

39,050

 

40,397

 

36,865

 

38,677

 

Income tax

 

339,194

 

278,480

 

330,104

 

269,688

 

Social Contribution tax

 

118,866

 

81,689

 

118,137

 

80,866

 

Pasep tax

 

4,149

 

4,175

 

3,667

 

3,664

 

Cofins tax

 

19,046

 

19,072

 

16,815

 

16,800

 

ers

 

793

 

352

 

576

 

158

 

 

 

521,098

 

424,165

 

506,164

 

409,853

 

Non-current

 

 

 

 

 

 

 

 

 

ICMS tax recoverable

 

8,223

 

8,223

 

7,742

 

7,742

 

Income tax

 

2,893

 

2,373

 

 

 

 

Pasep tax

 

23

 

495

 

23

 

495

 

Cofins tax

 

104

 

2,281

 

104

 

2,281

 

 

 

11,243

 

13,372

 

7,869

 

10,518

 

 

 

532,341

 

437,537

 

514,033

 

420,371

 

 

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The balances of income tax and Social Contribution tax refer to tax credits in corporate income tax returns (DIPJs) of previous years, and to advance payments made in 2010, which will be offset against federal taxes payable to be calculated for the year 2010, posted in Taxes and contributions.

 

The credits of ICMS tax and Pasep and Cofins taxes recoverable arise from acquisitions of fixed assets, and can be used for offsetting over 48 months.

 

9.  TAX CREDITS

 

A) DEFERRED INCOME TAX AND SOCIAL CONTRIBUTION TAX:

 

The company has recorded credits of income tax, constituted at the rate of 25.00%, and Social Contribution tax, at the rate of 9.00%, as follows:

 

 

 

Consolidated

 

 

 

30/09/2010

 

30/06/2010

 

Tax credits on temporary differences:

 

 

 

 

 

Post-employment obligations

 

18,074

 

17,751

 

Provision for Pasep and Cofins taxes – Extraordinary Tariff Recomposition

 

2,392

 

1,741

 

Provision for doubtful receivables

 

643

 

643

 

Financial instruments

 

14,316

 

14,316

 

FX variation

 

35,585

 

35,585

 

Contingencies

 

2,070

 

1,786

 

Taxes with demandability suspended

 

6,221

 

3,962

 

Others

 

7,176

 

4,868

 

 

 

86,477

 

80,652

 

 

 

 

 

 

 

Current assets

 

30,930

 

20,519

 

Non-current assets

 

55,547

 

60,133

 

 

At a meeting on March 23, 2010 the Board of Directors approved the technical study prepared by the CFO’s department on forecasts for future profitability adjusted to present value, which show capacity for realization of the deferred tax asset in a maximum period of 10 years, as specified in CVM Instruction 371. This study was also submitted to the Audit Board, on March 4, 2010.

 

According to the Company’s estimates, future taxable profits enable the deferred tax asset existing on June 30, 2010 to be realized as follows:

 

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Consolidated

 

 

 

30/09/2010

 

2010

 

11,483

 

2011

 

25,702

 

2012

 

19,015

 

2013

 

13,084

 

2014 to 2015

 

9,965

 

2015 to 2017

 

3,614

 

2018 to 2020

 

3,614

 

 

 

86,477

 

 

B) RECONCILIATION OF THE EXPENSE ON INCOME TAX AND THE SOCIAL CONTRIBUTION TAX:

 

This table shows the reconciliation of the nominal expense on income tax (rate 25%) and Social Contribution tax (rate 9%) with the actual, expense shown in the Income statement:

 

 

 

Consolidated

 

Holding company

 

 

 

30/09/2010

 

30/09/2009

 

30/09/2010

 

30/09/2009

 

Profit before income tax and Social Contribution tax

 

1,187,687

 

1,467,654

 

1,156,684

 

1,467,252

 

Income tax and Social Contribution – nominal expense

 

(403,814

)

(499,003

)

(393,273

)

(498,866

)

Tax effects applicable to:

 

 

 

 

 

 

 

 

 

Interest on Equity

 

54,113

 

54,329

 

54,113

 

54,329

 

Employees’ profit shares

 

9,315

 

7,462

 

9,315

 

7,462

 

Tax incentive amounts

 

14,305

 

8,903

 

10,395

 

8,903

 

Equity gain (loss) on subsidiaries

 

 

(89

)

27,509

 

(89

)

Non-deductible contributions and donations

 

(2,630

)

(1,796

)

(2,630

)

(1,796

)

Adjustment in income tax and Social Contribution – prior business year

 

 

(11,423

)

 

(11,423

)

Tax credits not recognized

 

690

 

384

 

690

 

384

 

Others

 

(1,122

)

(625

)

(4,259

)

(360

)

Income tax and Social Contribution tax

 

(329,143

)

(441,858

)

(298,140

)

(441,456

)

 

CORPORATE INCOME TAX INCENTIVES ENJOYED BY TRANSMISSORA ALIANÇA DE ENERGIA ELÉTRICA S.A. – TAESA

 

The National Integration Ministry, through Adene, the federal Agency for Development of the Northeast; and Ada, the federal Agency for the Development of the Amazon Region, has issued official position statements granting some of the subsidiaries of Taesa tax benefits of reduction of 75% in income tax payable, for the activity carried out in the region to which the benefits apply.

 

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10. DEPOSITS LINKED TO LEGAL ACTIONS

 

Deposits linked to legal actions are mainly related to contingencies for employment-law litigation and tax obligations.

 

The main payments into court in relation to tax obligations relate to income tax withheld at source on Interest on Equity, and to the ICMS tax – relating to its exclusion from the amount taxable by PIS and Cofins tax.

 

 

 

Consolidated

 

Holding company

 

 

 

30/09/2010

 

30/06/2010

 

30/09/2010

 

30/06/2010

 

 

 

 

 

 

 

 

 

 

 

Employment law cases

 

34,505

 

34,440

 

34,427

 

34,362

 

 

 

 

 

 

 

 

 

 

 

Tax obligations

 

 

 

 

 

 

 

 

 

Income tax on Interest on Equity

 

8,014

 

8,014

 

8,014

 

8,014

 

Pasep and Cofins

 

69,382

 

60,440

 

69,095

 

60,153

 

Others

 

1,835

 

1,835

 

988

 

988

 

 

 

 

 

 

 

 

 

 

 

Others

 

1,719

 

1,717

 

914

 

914

 

 

 

115,455

 

106,446

 

113,438

 

104,431

 

 

The balances of deposits paid into court in relation to the Pasep and Cofins taxes have a corresponding provision recorded in Taxes, charges and contributions. For more details, please see Explanatory Note 15.

 

 

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11.  INVESTMENTS

 

 

 

Consolidated

 

Holding company