6-K

 

 

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 6-K

 

 

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 2016

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  ☒                 Form  40-F   ☐

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):  ☐

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):  ☐

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  ☐                No   ☒

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

 

 

 


Index

 

Item

  

Description of Items

 

1.

  

 

Summary of Minutes of the 198th Meeting of the Board of Directors Held on June 12, 2014

 

2.   

Summary of Minutes of the 223rd Meeting of the Board of Directors Held on July 17, 2014

 

3.   

Summary of Minutes of the 611th Meeting of the Board of Directors Held on October 30, 2014

 

4.   

Summary of Minutes of the 626th Meeting of the Board of Directors Held on February 25, 2015

 

5.   

Summary of Minutes of the 668th Meeting of the Board of Directors Held on June 29, 2016

 

6.   

Summary of Principal Decisions of the 677th Meeting of the Board of Directors Held on October 31, 2016

 

7.   

Market Announcement Dated November  3, 2016: Reply to CVM Inquiry Letter 517/2016-CVM/SEP/GEA-1,
of November 1, 2016

 

8.   

Summary of Minutes of the 678th Meeting of the Board of Directors Held on November 11, 2016

 

9.   

Market Announcement Dated November 12, 2016: Completion of 20-F Form for 2015

 

10.   

Market Announcement Dated November 14, 2016: Filing of 2015 20-F Form with the SEC

 

11.   

Market Announcement Dated November  18, 2016: Reply to CVM Inquiry Letter 3261/2016-SAE/GAE-2,
of November 17, 2016

 

12.   

Material Announcement Dated November 21, 2016: Capital increase in RME and Lepsa

 

13.   

Market Announcement Dated November 21, 2016: News report published in the media

 

14.   

Material Announcement Dated November 30, 2016: Increase in Stockholding Interest

 

15.   

Summary of Principal Decisions of the 679th Meeting of the Board of Directors Held on December 6, 2016

 

16.   

Market Announcement Dated December  7, 2016: Reply to CVM Inquiry Letter 554/2016-CVM/SEP/GEA-1,
of December 6, 2016

 

17.   

Summary of Principal Decisions of the 680th Meeting of the Board of Directors Held on December  15, 2016

 

18.   

Notice to Stockholders Dated December  15, 2016: Payments of dividends and Interest on Equity: December 29

 

19.   

Convocation and Proposal of Extraordinary General Meeting of Stockholders to be Held on December  20, 2016

 

20.   

Earnings Release: 2015 Results

 

21.   

Earnings Release: 1Q 2016 Results

 

22.   

Earnings Release: 2Q 2016 Results

 

23.   

Earnings Release: 3Q 2016 Results

 

24.   

Earnings Release: 3Q 2016 Presentation

 

25.   

Minutes of the Extraordinary General Meeting of Stockholders Held on December 20, 2016

 

26.   

Notice to Stockholders Dated December 21, 2016: Interest on Equity for 2016

 

27.   

Market Announcement Dated December  21, 2016: Reply to CVM Inquiry Letter 567/2016-CVM/SEP/GEA-1,
of December 20, 2016

 

28.   

Summary of Principal Decisions of the 681st Meeting of the Board of Directors Held on December  21, 2016

 

29.   

Summary of Principal Decisions of the 682nd Meeting of the Board of Directors Held on December  21, 2016

 

30.   

Material Announcement Dated December 22, 2016: Interim injunction given for Miranda Plant

 

31.   

Market Announcement Dated December 22, 2016: Changes to the Executive Board

 

32.   

Market Announcement Dated December  23, 2016: Reply to CVM Inquiry Letter 574/2016-CVM/SEP/GEA-1,
of December 22, 2016

 

33.   

Market Announcement Dated December  23, 2016: Reply to CVM Inquiry Letter 575/2016-CVM/SEP/GEA-1,
of December 22, 2016

 

 


FORWARD-LOOKING STATEMENTS

This report contains statements about expected future events and financial results that are forward-looking and subject to risks and uncertainties. Actual results could differ materially from those predicted in such forward-looking statements. Factors which may cause actual results to differ materially from those discussed herein include those risk factors set forth in our most recent Annual Report on Form 20-F filed with the Securities and Exchange Commission. CEMIG undertakes no obligation to revise these forward-looking statements to reflect events or circumstances after the date hereof, and claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.


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 ENERGÉTICA DE MINAS GERAIS – CEMIG
Date: December 29, 2016     By:   /s/    Franklin Moreira Gonçalves
    Name:   Franklin Moreira Gonçalves
    Title:   Acting Chief Finance and Investor Relations Officer


 

1. SUMMARY OF MINUTES OF THE 198TH MEETING OF THE BOARD OF DIRECTORS HELD ON JUNE 12, 2014

 

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CEMIG DISTRIBUIÇÃO S.A.

LISTED COMPANY – CNPJ: 06.981.180/0001-16 – NIRE: 31300020568

BOARD OF DIRECTORS

SUMMARY OF MINUTES

OF THE

198TH MEETING

 

Date, time and place:   June 12, 2014, at 10 a.m., at the head office.

 

Meeting Committee:  

Chair: Djalma Bastos de Morais;

Secretary: Anamaria Pugedo Frade Barros.

Summary of proceedings:

 

I Conflict of interest: The Board Members listed below stated they had no conflict of interest with the matters on the agenda of this meeting.

 

II The Board approved the minutes of this meeting.

 

III The Board authorized:

 

  a) Opening of Administrative Tender Proceedings for, and contracting of, rental of the real estate property owned by Forluz at Av. Barbacena 1200, Belo Horizonte, Minas Gerais, for sixty months, able to be extended for equal successive periods up to a limit of twenty years, by signature of amendments; and ratified all actions taken in this matter since March 1, 2014, i.e. the rental of the said property.

 

  b) Signature of the First Amendment to the Contract with Axxiom Soluções Tecnológicas S.A., to adapt the form of execution of the services of sustaining, updating and developing of the necessary developments in the GDIS System.

 

  c) Opening of Administrative Tender Proceedings for, and contracting of services of, in-person customer care, in approximately one hundred and fifty six Customer Care branches and in approximately one hundred and fifty three municipalities, and service of automated control and management of customer care service including both software and hardware, for approximately one hundred and fifty six branches and approximately six hundred and twenty Cemig Fácil customer service posts, for thirty six months, able to be extended for up to a total of sixty months.

 

  

 

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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IV The Board nominated the employee Mirian Paula Ferreira Rodrigues to be a sitting member of the Board of Directors of Empresa Paraense de Transmissão de Energia S.A., to serve the remainder of the period of office, begun at the Annual General Meeting of April 19, 2013, from the date of the Extraordinary General Meeting of Stockholders that elects her until her duly elected successor is sworn in.

 

V The Board ratified the nomination of the employee Mirian Paula Ferreira Rodrigues, as substitute member of the Board of Directors of STC – Sistema de Transmissão Catarinense S.A., for a period of office of three years, from the Ordinary and Extraordinary General Meetings of Stockholders of April 11, 2014 until her duly elected successor is sworn in.

 

VI Abstention: The Board member

Arcângelo Eustáquio Torres Queiroz

abstained from voting on the matter referred to in subclause ‘c’ of Item III above.

 

VII Unpaid leave: The Chair reported that the Board member

Luiz Augusto de Barros

had delivered correspondence to the Company formalizing his request for unpaid leave from the post of substitute member of this Board, for the period from June 16 to October 31, 2014, for private reasons.

 

VIII Comment: The Chair spoke on a subject of interest to the Company.

The following were present:

 

Board members:   

Djalma Bastos de Morais,

Arcângelo Eustáquio Torres Queiroz,

Fuad Jorge Noman Filho,

Guy Maria Villela Paschoal,

João Camilo Penna,

Joaquim Francisco de Castro Neto,

José Pais Rangel,

Paulo Roberto Reckziegel Guedes,

Saulo Alves Pereira Junior,

Tadeu Barreto Guimarães,

   Wando Pereira Borges,

Bruno Magalhães Menicucci,

Newton Brandão Ferraz Ramos,

Paulo Sérgio Machado Ribeiro,

Tarcísio Augusto Carneiro,

Custódio Antonio de Mattos,

Franklin Moreira Gonçalves,

José Augusto Gomes Campos,

Lauro Sérgio Vasconcelos David,

Luiz Augusto de Barros,

Marina Rosenthal Rocha;

     
Secretary:    Anamaria Pugedo Frade Barros.     

(Signed) Anamaria Pugedo Frade Barros

Registered at:

Commercial Board of the State of Minas Gerais

I certify registry, under Nº: 5877087,

on September 27, 2016.

Receipt No: 16/574.391-3.

Marinely de Paula Bomfim – General Secretary.

 

  

 

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 MINUTES OF THE 223RD MEETING OF THE BOARD OF DIRECTORS HELD ON JULY 17, 2014

 

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CEMIG GERAÇÃO E TRANSMISSÃO S.A.

CNPJ 06.981.176/0001-58—NIRE 31300020550

BOARD OF DIRECTORS

SUMMARY OF MINUTES

OF THE

223RD MEETING

 

Date, time and place:  

July 17, 2014, at 12 noon, at the Company’s head office,

Av. Barbacena 1200 – 12th Floor, B1 Wing, Belo Horizonte, Minas Gerais, Brazil.

 

Meeting Committee:  

Chair: Djalma Bastos de Morais;

Secretary: Anamaria Pugedo Frade Barros.

Summary of proceedings:

 

I Unpaid leave: The General Manager Anamaria Pugedo Frade Barros reported that Mr. Danilo de Castro had delivered correspondence to the Company formalizing his request for unpaid leave from the post of substitute member of this Board, for the period from July 15 to October 6, 2014, for private reasons, and that the Board members present had consented to this request.

 

III Conflict of interest: The Board Members listed below stated they had no conflict of interest with the matter on the agenda of this meeting.

 

III The Board approved:

 

  a) Review of the Project: Hydroelectric Plants of the Tapajós River Basin – Pre-feasibility Studies for the Hydroelectric Plants of the Tapajós River Basin.

 

  b) The minutes of this meeting.

 

IV The Board Authorized:

 

  a) signature, out of time, of the Third Amendment to the Contract with Terceiriza Serviços Ltda., to extend the period of contracting of the provision of services of conservation and cleaning, maintenance of gardens and mowing at the premises of the Company in the Metropolitan Region of Belo Horizonte, for up to thirty five months and five days, and alteration of the global amount contracted, ratifying the provision of the said services.

 

  b) Signature of Terms of Partnership, between Cemig, Cemig D, Cemig GT and the Municipal Councils for the rights of Children and Adolescents participants in the AI6% Program, for passthrough of donations raised from the employees of those companies, with a maximum of one million eight hundred thousand Reais and a 1% portion of the income tax payable by Cemig, Cemig D and Cemig GT, for application in programs and projects in the ambit of the Municipality, in effect until August 31, 2015.

 

  

 

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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  c) Signature of the Third Amendment to the Technical Cooperation Agreement with

 

Centrais Elétricas Brasileiras S.A.,    Centrais Elétricas do Norte do Brasil S.A.,
Construções e Comércio Camargo Corrêa S.A.,    Electricité de France S.A.,
Copel Geração e Transmissão S.A.,    Endesa Brasil S.A.,
GDF Suez Energy Latin America Participações Ltda.    and Neoenergia Investimentos S.A.,

for updating of the estimate of costs specified for the preparation of environmental assessments and feasibility studies for hydroelectric complexes, and extension of the period of validity until December 31, 2015.

 

  b) Opening of administrative tender proceedings for, and acquisition, through the Price Registry System, of

 

  three hundred and sixty seven thousand tons of A1 Fuel Oil,

 

  two hundred and eight eighty thousand liters of Type D diesel oil, and

 

  input materials and chemical products;

and contracting of thermal isolation services, for the Igarapé Thermoelectric Plant, for two years, starting in January 2015.

 

  e) Signature of amendment N° 3 to the Contract for Use of the Transmission System with the National Electricity System Operator and the Transmission Concessions represented by that Operator, to alter the installed potential of the Irapé Hydroelectric Plant and the amount of use to be contracted, and indicate the load level, with effect from April 15, 2014.

 

VI The board delegated to the Executive Board, until March 31, 2015, the competency to authorize entering into:

 

  a) contracts for sale of electricity, after hearing the opinion of the Energy Risks Management Committee, with individual values of sixteen million seven hundred thirty eight thousand one hundred thirty nine Reais and twelve centavos or more, and also terms of assignment, amendments, memoranda of termination of contracts by rescission, resilement or similar methods, including any cases where penalty payments are made by any of the parties, arising from negotiation, service contracts or contracts to constitute guarantees and counter-guarantees associated with them, and the other instruments necessary for their completion in practice;

 

  b) and any such agreements entered into between the Company and any of its stockholders, or companies that are controlling stockholders of the latter, whether controlled by them singly or under joint control, of any value. In both cases, the Board of Directors must be informed of the instruments signed at its first meeting subsequent to the approval.

 

VI The Board ratified the following nominations for appointments, to serve the respective periods of office or until their duly elected successors are sworn in:

 

  1) João Procópio Campos Loures Vale – as:

 

  a) Member of the Board of Directors of Companhia Transudeste de Transmissão, for a period of office of three years, i.e. until the Annual General Meeting of 2017;

 

  a) Member of the Board of Directors of Companhia de Transmissão Centroeste de Minas (Centroeste), for a period of office of three years, i.e. until the AGM of 2017; and

 

  c) Substitute member of the Board of Directors of Ativas Data Center S.A., for a period of office of two years, until the AGM of 2016.

 

  

 

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) Flávio de Almeida Araújo, as Substitute member of the Board of Directors of Companhia de Gás de Minas Gerais (Gasmig), for a period of office of two years, until the Annual General Meeting of 2016.

 

  3) José Cleber Teixeira, as member of the Board of Directors of Centroeste, for a period of office of three years, i.e. until the Annual General Meeting of 2017;

 

  4) Brunno Viana dos Santos Sant’Anna, as member of the Board of Directors of Companhia Transirapé de Transmissão, for a period of office of three years, i.e. until the Annual General Meeting of 2017, nominating the employee Alexandre Vidigal Pereira Pinto as his Substitute member as from the Extraordinary General Meeting of Stockholders that deals with that subject.

 

  5) Eliana Soares da Cunha Castello Branco, as a member of the Board of Directors of Cemig Telecomunicações S.A., for a period of office of three years, i.e. until the Annual General Meeting of 2017.

 

VII The Board re-ratified: Board Spending Decision (CRCA) 034/2014, as to its Subclause C, relating to the signature of the Fourth Amendment to the Stockholders’ Agreement of Retiro Baixo Energética S.A., to alter Clause Five of the Stockholders’ Agreement, the other provisions of that CRCA remaining unchanged.

 

VIII Withdrawn from the agenda: The matter of re-scaling of the value of Personnel, Material, Outsourced services and Other Expenses, and additional budgetary allocation for 2014, was withdrawn from the agenda.

 

IX Unpaid leave: The Chair informed the Board that the Chief Officers

 

Frederico Pacheco de Medeiros

 

and

   José Carlos de Mattos,

have filed correspondence with the Company formalizing requests for unpaid leave from their positions as Chief Officers, for personal reasons, in the periods, respectively, from June 16 to October 31, 2014 and from June 25 to August 31, 2014, respectively.

 

X Comment: The following made comments on subjects of interest to the Company:

 

The Chair;

         

Chief Officer:

   Luiz Fernando Rolla,    Luiz Henrique de Castro Carvalho;

General Managers:

   Leonardo George Magalhães,    Wagner Delgado Costa Reis;

The following were present:

 

Board members:

  

Djalma Bastos de Morais,

Arcângelo Eustáquio Torres Queiroz,

Eduardo Borges de Andrade,

Fuad Jorge Noman Filho,

Guy Maria Villela Paschoal,

João Camilo Penna,

Joaquim Francisco de Castro Neto,

José Pais Rangel,

Saulo Alves Pereira Junior,

Tadeu Barreto Guimarães,

   Bruno Magalhães Menicucci,

Marina Rosenthal Rocha,

Newton Brandão Ferraz Ramos,

Paulo Sérgio Machado Ribeiro,

Custódio Antonio de Mattos,

Flávio Miarelli Piedade,

Franklin Moreira Gonçalves,

José Augusto Gomes Campos,

Lauro Sérgio Vasconcelos David,

Tarcísio Augusto Carneiro;

Chief Officers:

   Luiz Fernando Rolla,    Luiz Henrique de Castro Carvalho;

Secretary:

   Anamaria Pugedo Frade Barros.     

(Signed by:) Anamaria Pugedo Frade Barros.

 

  

 

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 MINUTES OF THE 611TH MEETING OF THE BOARD OF DIRECTORS HELD ON OCTOBER 30, 2014

 

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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

611TH MEETING

 

Date, time and place:  

October 30, 2014 at 8 a.m. at the company’s head office,

Av. Barbacena 1200, 21st floor, Belo Horizonte, Minas Gerais, Brazil.

 

Meeting Committee:  

Chair: Djalma Bastos de Morais;

Secretary: Anamaria Pugedo Frade Barros.

Summary of proceedings:

 

I Conflict of interest: The board members listed below said they had no conflict of interest in the matters on the agenda of this meeting

 

II The Board approved the minutes of this meeting.

 

III In relation to Renova Energia S.A. (‘Renova’):

 

  1) The Board ratified the orientation given to the Board members appointed by the Company to vote in favor of the agenda at the meeting of the Board of Directors of Light S.A. (‘Light’) and the orientation given to the Board members appointed by the Company to vote in favor of the agenda at the meeting of the Board of Directors of Cemig GT, in relation to Renova participating in the 2014 LER (Reserve Energy) Auction held by the Brazilian National Electricity Agency, Aneel, for sale of electricity in the Regulated Market by Renova or by companies constituted by Renova.

 

  2) The Board authorized constitution by Renova of special-purpose companies (‘SPCs’) and sub-holding companies for construction, financing and commercial operation of any wind power projects whose output is sold at the 2014 LER.

 

  3) The Board ratified the orientation given to the Board members appointed by the Company to vote in favor of the agenda at the meeting of the Board of Directors of Light, and the orientation to the Board members appointed by the Company to vote in favor of the agenda at the meeting of the Board of Directors of Cemig GT, for a partnership to be entered into by a Joint Venture Agreement, between Renova and SunEdison Brasil Projetos Montagem e Instalação de Empreendimentos de Energia Solar Ltda. (‘SunEdison’), for construction, financing and commercial operation of up to 16 new solar generation undertakings the output of which may be sold at the 2014 LER, based on the projects registered by Renova and SunEdison, through formation of an unlisted corporation (‘NewCo’), to absorb all the SPCs created for commercial operation of the projects that are successful in the Auction, and also those that are unsuccessful (‘the Joint Venture’)

 

  

 

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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  subject to it being a condition precedent for formation of the Joint Venture that there has been a sale or sales at the Auction by Renova or by SunEdison, or by both, and authorization by Aneel for transfer of the SPCs to ‘NewCo’.

 

  4) Subject to the conditions in Item 3 above being met, the Board authorized Renova to participate in ‘NewCo’, for implementation of the Joint Venture.

 

IV The Board oriented vote in favor of the agenda, by the Board Members appointed by the Company, at the meeting of the Boards of Directors of:

 

  a) Taesa (Transmissora Aliança de Energia Elétrica S.A.), on:

 

  (i) authorization for ERTE (Empresa Regional de Transmissão de Energia S.A.) to increase its share capital by up to thirty eight million Reais, to one hundred nine million nine hundred forty thousand eight hundred Reais, through issuance of twenty one million seven hundred thirty two thousand two hundred and six nominal preferred shares without par value, not convertible into common shares, not carrying the right to vote in General Meetings of Stockholders, and with priority in reimbursement of capital, without premium;

 

  (ii) assignment by Taesa and by EATE (Empresa Amazonense de Transmissão de Energia S.A.), to ENTE (Empresa Norte de Transmissão de Energia S.A.) of the right to subscribe preferred shares to be issued by ERTE, as above;

 

  (iii) authorization for ENTE to subscribe and pay up 100% of the preferred shares to be issued by ERTE; and

 

  (iv) appropriate changes to the by-laws of ERTE to reflect these changes in its share capital.

 

  b) Light and Cemig GT, for participation by Renova in the A–5 LEN (New-build) Auction to be held by Aneel, for sale in the Regulated Market by Renova or by companies constituted by Renova of electricity generated by wind power projects yet to be built; and in the event of success in the Auction, authorizing constitution by Renova of SPCs and sub-holding companies, for construction, financing and commercial operation of the wind power projects of which the output is sold in the Auction.

 

IV Leave of absence: The Chair reported that the Deputy CEO, Mr. Arlindo Porto Neto, had filed correspondence with the Company formalizing his request for unpaid leave from the position of Deputy CEO, for personal reasons, for the period October 22-24, 2014, and that the Chief Corporate Management Officer, Mr. Frederico Pacheco de Medeiros, had filed correspondence with the Company requesting alteration of the period of his unpaid leave, for personal reasons, from the position of Chief Corporate Management Officer, which began on June 17, 2014, bringing forward its termination from October 31 to October 26, 2014.

 

V Comment: The Chair made comments on a subject of interest to the Company.

The following were present:

 

Board members:   

Djalma Bastos de Morais,

Guy Maria Villela Paschoal,

João Camilo Penna,

Joaquim Francisco de Castro Neto,

José Pais Rangel,

Paulo Roberto Reckziegel Guedes,

Wando Pereira Borges,

   Bruno Magalhães Menicucci,

Franklin Moreira Gonçalves,

José Augusto Gomes Campos,

Luiz Augusto de Barros,

Newton Brandão Ferraz Ramos,

Paulo Sérgio Machado Ribeiro,

Tarcísio Augusto Carneiro,

Flávio Miarelli Piedade;

Secretary:    Anamaria Pugedo Frade Barros.     

(Signed) Anamaria Pugedo Frade Barros

 

  

 

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. SUMMARY OF MINUTES OF THE 626TH MEETING OF THE BOARD OF DIRECTORS HELD ON FEBRUARY 25, 2015

 

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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

626TH MEETING

 

Date, time and place:  

Opened 8.30 a.m., Feb. 25, 2015; resumed 8 a.m. and closed, Feb. 27, 2015;

at the head office, Av. Barbacena 1200, 21st floor, Belo Horizonte, MG, Brazil.

 

Meeting Committee:  

Chair:            José Afonso Bicalho Beltrão da Silva;

Secretaries:  Anamaria Pugedo Frade Barros;

                      Alexandre de Queiroz Rodrigues

Summary of proceedings:

 

I Conflict of interest: The board members listed below said they had no conflict of interest in the matters on the agenda of this meeting.

 

II The Board approved the minutes of this meeting.

 

II The Board authorized:

 

  b) Signature of the Term of Closure of the Final Contract for Association, between Vale and Cemig GT, which completes closure of the agreement in the terms of the Final Contract.

 

  a) Signature, as consenting party, of the Fifth Amendment to the Contract for Constitution of the Capim Branco Consortium, to formalize the entry of Aliança Geração de Energia S.A. (‘Aliança Geração’) into the Consortium, taking over the participation of Vale, Epícares and Cemig GT, and substituting them in all their rights and obligations.

 

IV The Board oriented votes in favor of the following agenda items:

 

  a) By the members of the Board of Directors of Cemig GT appointed by the Company, at the meeting of the Board of Directors of Cemig GT, to authorize increase in the share capital of Aliança Geração, by one billion two hundred seventy million eight hundred eight thousand five hundred thirty eight Reais, with issuance of nominal common shares without par value, of which Cemig GT will subscribe five hundred seventy one million eight hundred sixty three thousand eight hundred forty two nominal common shares without par value, at issue price of one Real per share, paying for this subscription with Cemig GT Assets.

 

  b) By the members of the Board of Directors of Cemig GT appointed by the Company: orientation of vote by the representatives of Cemig GT in the Extraordinary General Meeting of Stockholders of Aliança Geração of February 27, 2015, on:

 

  the increase in the share capital of Aliança Geração;

 

  the Valuation Opinion prepared by PricewaterhouseCoopers Auditores Independentes;

 

  and the consequent alteration of By-laws.

 

 

  

 

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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  c) By the members of the Board of Directors of Cemig GT appointed by the Company, on orientation of vote by the representatives of Cemig GT in the Extraordinary General Meeting of Stockholders of Aliança Geração of February 27, 2015, on:

 

  the Protocol of Absorption and Justification, between Aliança Geração and Epícares Empreendimentos e Participações Ltda. (Epícares);

 

  ratification of the appointment of the specialized company Prosper Outsourcing e Assessoria Empresarial Ltda., responsible for the valuation of the net equity of Epícares;

 

  approval of the Valuation Opinion prepared on January 31, 2015; and

 

  absorption of Epícares by Aliança Geração.

 

V Withdrawn from the agenda: The matter of injection of assets by Cemig GT into Aliança Norte Energia Participações S.A. (‘Aliança Norte’), from February 27, 2015 to December 31, 2016, conditional upon acquisition of 49% of that company by Cemig GT, was withdrawn from the agenda.

 

VI Comments: The Chair spoke on matters of interest to the Company.

The following were present:

 

Board members:

  

José Afonso Bicalho Beltrão da Silva,

Mauro Borges Lemos,

Allan Kardec de Melo Ferreira,

Arcângelo Eustáquio Torres Queiroz,

Helvécio Miranda Magalhães Junior,

Marco Antônio de Rezende Teixeira,

Marco Antônio Soares da Cunha Castello Branco,

Guy Maria Villela Paschoal,

Paulo Roberto Reckziegel Guedes,

Saulo Alves Pereira Junior,

José Pais Rangel,

   Bruno Magalhães Menicucci,

Carlos Fernando da Silveira Vianna,

Newton Brandão Ferraz Ramos,

Tarcísio Augusto Carneiro,

Antônio Dirceu Araújo Xavier,

Franklin Moreira Gonçalves,

José Augusto Gomes Campos,

Luiz Guilherme Piva,

Marina Rosenthal Rocha,

Ricardo Wagner Righi de Toledo,

Wieland Silberschneider;

Secretary:

   Alexandre de Queiroz Rodrigues.     

(Signed by:) Alexandre de Queiroz Rodrigues.

Registered at:

Commercial Board of the State of Minas Gerais

I certify registry on: November 11, 2016

Under the number: 6120340

Filing Receipt number: 16/640.268-1

Marinely de Paula Bomfim

General Secretary

 

  

 

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. SUMMARY OF MINUTES OF THE 668TH MEETING OF THE BOARD OF DIRECTORS HELD ON JUNE 29, 2016

 

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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

668TH MEETING

 

Date, time and place:  

June 29, 2016 at 11 a.m. at the company’s head office,

Av. Barbacena 1200, 21st floor, Belo Horizonte, Minas Gerais, Brazil.

 

Meeting Committee:  

Chair: José Afonso Bicalho Beltrão da Silva;

Secretary: Alexandre de Queiroz Rodrigues.

Summary of proceedings:

 

I Conflict of interest: The Board Members listed below stated that they had no conflict of interest with the matters on the agenda of the meeting.

 

II The Board approved:

 

  a) The proposal by the Chair, as follows:

 

  i) Change of post: the Chief Corporate Management Officer,

 

Márcio Lúcio Serrano

   – Brazilian, doctor, married, domiciled in Belo Horizonte, Minas Gerais, at Av. Barbacena 1200, 18th floor, B2 Wing, Santo Agostinho, CEP 30190-131, Bearer of Identity Card M575788 issued by SSP/MG, and CPF 110906186-20,

to be Chief Officer for Human Relations and Resources.

 

  ii) Election of

 

Luís Fernando Paroli Santos

   – Brazilian, married, Systems Analyst, domiciled in Belo Horizonte, Minas Gerais, at Av. Barbacena 1200, 21st floor, A1 Wing, Santo Agostinho, CEP 30190-131, Bearer of Identity Card MG5307664 issued by SSP/MG, and CPF 903562416-53,

as Chief Corporate Management Officer, on an interim basis together with his functions as Chief Institutional Relations and Communication Officer,

both to serve the rest of the present period of office, i.e. until the first meeting of the Board of Directors after the Annual General Meeting of 2018.

 

  

 

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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  b) The minutes of this meeting.

 

III The Board authorized:

 

  a) Injections of cash into Ativas Data Center S.A. (‘Ativas’), by Cemig Telecomunicações S.A. (‘CemigTelecom’), of:

 

  up to forty five million Reais                                                                                           (‘capital increase No. 1’)

 

  and up to thirty nine million two hundred thousand Reais                                              (‘capital increase No. 2’);

waiver, by CemigTelecom, of its right of first refusal for subscription of the rest of the capital to which it would have been entitled in proportion to its equity interest, which will cause dilution of its equity interest in Ativas from 49% to 19.6%;

signature of the Investment Contract, and Stockholders’ Agreement, between CemigTelecom, Ativas Participações S.A. (‘Ativas Participações’) and Sonda do Brasil S.A. (‘Sonda’);

signature of the Stockholders’ Agreement by CemigTelecom and Ativas Participações;

and a temporary waiver enabling Ativas Participações to make payment of its subscription of capital in Ativas.

 

  b) Signature of the Second Amendment to the Stockholders’ Agreement of Transmissora Aliança de Energia Elétrica S.A. (‘Taesa’), with Fundo de Investimentos em Participações Coliseu (‘FIP Coliseu’), to formalize conditions agreed in the Commitment Undertaking signed by the parties on May 31, 2016.

 

VI The Board oriented the members of the Board of Directors of CemigTelecom appointed by the Company to vote in favor of the agenda in the meeting of the Board of Directors of CemigTelecom, on the subjects referred to in subclause ‘a’ of Item I, above.

 

V Vote against: The Board member Arcângelo Eustáquio Torres Queiroz voted against the item referred to in subclause ‘b’ of Item III, above.

 

VI The Chair reported that, as a result of the decision of the Extraordinary General Meeting of Stockholders of Cemig begun on June 14, 2016 and resumed and completed on June 17, 2016, the office of Chief Officer for the Gas Division was abolished, and the post and Office of Chief Officer for Human Relations and Resources was created. Consequently, since June 17, 2016, Mr. Felipe Torres do Amaral, until then Chief Officer for the Gas Division, has not been a member of the Company’s Executive Board.

 

  

 

Av. Barbacena 1200

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

 

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VI The members of the Executive Board are now as follows:

 

Chief Executive Officer:

   Mauro Borges Lemos;

Deputy CEO:

   Mateus de Moura Lima Gomes;

Chief Trading Officer:

   Evandro Leite Vasconcelos;

Chief Business Development Officer:

   César Vaz de Melo Fernandes;

Chief Distribution and Sales Officer:

   Ricardo José Charbel;

Chief Finance and Investor Relations Officer:

   Fabiano Maia Pereira;

Chief Generation and Transmission Officer:

   Franklin Moreira Gonçalves;

Chief Corporate Management Officer:

   Luís Fernando Paroli Santos*;

Chief Counsel:

   Raul Lycurgo Leite;

Chief Officer for Human Relations and Resources:

   Márcio Lúcio Serrano;

Chief Institutional Relations and Communication Officer:

   Luís Fernando Paroli Santos.

 

* On interim basis, while also serving as Chief Institutional Relations and Communication Officer

 

VII Statement by Chief Officers: The Chief Officers taking new posts declared – in advance – that they are not subject to any prohibition on exercise of commercial activity, that they do not occupy any post in a company which could be considered to be a competitor of the Company, and that they do not have nor represent any interest conflicting with that of Cemig; and made a solemn commitment to become aware of, obey and comply with the principles, ethical values and rules established by the Code of Professional Conduct of Cemig and the Code of Ethical Conduct of Government Workers and Senior Administration of the State of Minas Gerais.

 

VIII Unpaid leave: The Chair reported receipt by the Company of correspondence from the Board member Marcelo Gasparino da Silva, requesting unpaid leave from his functions on this Board, for personal reasons, from June 29, 2016 for 300 days, that is to say until April 28, 2017.

 

IX Comments: The Chair, and the Board Member Arcângelo Eustáquio Torres Queiroz, made comments on matters of interest to the Company.

The following were present:

 

Board members:   

José Afonso Bicalho Beltrão da Silva,

Mauro Borges Lemos,

Allan Kardec de Melo Ferreira,

Arcângelo Eustáquio Torres Queiroz,

Helvécio Miranda Magalhães Junior,

José Henrique Maia,

José Pais Rangel,

Marco Antônio de Rezende Teixeira,

Marco Antônio Soares da Cunha Castello Branco,

Nelson José Hubner Moreira,

   Saulo Alves Pereira Junior,

Aloísio Macário Ferreira de Souza,

Bruno Magalhães Menicucci,

José Augusto Gomes Campos,

Bruno Westin Prado Soares Leal,

Daniel Alves Ferreira,

Carlos Fernando da Silveira Vianna,

Luiz Guilherme Piva,

Marina Rosenthal Rocha,

Samy Kopit Moscovitch,

Wieland Silberschneider;

Secretary:    Anamaria Pugedo Frade Barros.     

(Signed) Alexandre de Queiroz Rodrigues

 

  

 

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. SUMMARY OF PRINCIPAL DECISIONS OF THE 677TH MEETING OF THE BOARD OF DIRECTORS HELD ON OCTOBER 31, 2016

 

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COMPANHIA ENERGÉTICA DE MINAS GERAIS – CEMIG

LISTED COMPANY — CNPJ 17.155.730/0001-64 – NIRE 31300040127

BOARD OF DIRECTORS

Meeting of October 31, 2016

SUMMARY OF PRINCIPAL DECISIONS

At its 677th meeting, held on October 31, 2016, the Board of Directors of Cemig (Companhia Energética de Minas Gerais) decided the following:

 

    Change in the composition of the Executive Board: Mr. Evandro Leite Vasconcelos to cease to be Chief Distribution and Sales Officer, and election, to this post, of Mr. Luís Fernando Paroli Santos, who will also temporarily hold the post of Chief institutional Relations and Communication Officer.

 

  

 

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. MARKET ANNOUNCEMENT DATED NOVEMBER 3, 2016: REPLY TO CVM INQUIRY LETTER 517/2016-CVM/SEP/GEA-1, OF NOVEMBER 1, 2016

 

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COMPANHIA ENERGÉTICA DE MINAS GERAIS – CEMIG

LISTED COMPANY – CNPJ 17.155.730/0001-64 – NIRE 31300040127

MARKET ANNOUNCEMENT

Reply to CVM Inquiry Letter 517/2016-CVM/SEP/GEA-1, of November 1, 2016

Question asked by the Brazilian Securities Commission (CVM)

Rio de Janeiro, November 1, 2016

To Mr. Fabiano Maia Pereira

Investor Relations Director

Cia. Companhia Energética de Minas Gerais – CEMIG

Av. Barbacena 1200 – 5th floor, B1 Wing, Santo Agostinho,

Belo Horizonte, Minas Gerais

CEP: 30190-131

Fax: (31) 3506-5026

Tel.: (31) 3506-5024

E-mail: ri@cemig.com.br

Subject: Request for information on decree

Dear Sir,

 

  1. I refer to Minas Gerais State Decree NE 582 of October 26, 2016, published in the Official Gazette of Minas Gerais State, through which there was established a “supplementary credit in favor of the investment budget of the Holding Company Companhia Energética de Minas Gerais – Cemig, in the amount of R$ 650,200,000.00.”

 

  2. I request you to clarify the transaction, and comment on any other information considered to be important relating to the subject.

 

  3. The statement should be given through the Empresas.NET system, in the category: Market Announcement, under the sub-category: Responses to consultations by CVM/Bovespa; subject heading: Minas Gerais State Decree NE 582 of October 26, 2016; and should include a transcription of this letter.

 

  4. We highlight that, under Article 3 of CVM Instruction 358/02 it is the responsibility of the Chief Investor Relations Officer to disclose to and advise the CVM, and as the case may be, the stock exchange and/or any organized over-the-counter market on which securities issued by the company are traded, of any material event or fact which takes place or is related to its business, and to make best efforts for its immediate and wide dissemination, simultaneously to all the markets in which such securities are traded.

 

  5. We notify you that the Company Relations Supervision Management may, under Sub-item II of Article 9 of Law 6385/1976 and CVM Instruction 452/2007, apply a coercive fine of R$ 1,000 (one thousand Reais), without prejudice to other administrative sanctions, in the event of non-compliance with the demand made in this Official Letter within 24 hours from becoming aware of the content of this communication, now sent by fax and by e-mail.

 

  

 

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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Reply by CEMIG

Dear Madam,

In response to Official Letter Nº 517/2016-CVM/SEP/GEA-1, of November 1, 2016, we inform you that the budget supplementation decree published in the newspaper Minas Gerais complies with a legal procedural requirement. The publication obeys the legal requirements included in the following state laws: Law 21736 of August 4, 2015 (the Budget Directives Law, or LDO), Law 21971 of January 18, 2016 (the Annual Budget Law, or 2016 LOA), and Federal Law 4320 of March 17, 1964, in particular its Article 42.

Basically, Cemig is part of the investment budget of the companies controlled by Minas Gerais State, as specified in State Law 21736 of August 4, 2015. Due to this, following the orientations of Law 21971, Cemig prepared the annual budget proposal for the 2016 business year during July and August 2015. Considering that the dividends for the 2015 business year would be approved only after calculation of the net profit for the business year at the Annual General Meeting, which would take place in April 2016, the budget proposal referred to above was prepared with symbolic amounts for the distribution of dividends. Subsequently, to make the adjustments, Cemig asked the Central Corporate Governance Support Directorate of the State Finance Department for a supplementary budget decree, under Article 42 of Law 4320 of March 17, 1964.

We would point out that this budget process is carried out publicly and with transparency – the principles followed by the public sector, as can be seen in the following links:

http://www.planejamento.mg.gov.br/banco-de-noticias-banco/3657-estado-disponibiliza-lei-de-diretrizes-orcamentarias-referente-a-2016

http://www.planejamento.mg.gov.br/banco-de-noticias-banco/3878-governador-sanciona-lei-orcamentaria-com-estimativas-de-receita-e-despesas

http://politicaspublicas.almg.gov.br/

Cemig takes this opportunity of reiterating its commitment to opportune and timely disclosure of all and any facts that are of interest to its stockholders, in accordance with Article 2 of CVM Instruction 358/2002.

Belo Horizonte, November 3, 2016

Fabiano Maia Pereira

Chief Finance and Investor Relations Officer

 

  

 

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 MINUTES OF THE 678TH MEETING OF THE BOARD OF DIRECTORS HELD ON NOVEMBER 11, 2016

 

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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

678TH MEETING

 

Date, time and place:  

November 11, 2016 at 9 a.m. at the Company’s head office,

Av. Barbacena 1200, 21st floor, Belo Horizonte, Minas Gerais, Brazil.

 

Meeting Committee:  

Chair: José Afonso Bicalho Beltrão da Silva;

Secretary: Anamaria Pugedo Frade Barros.

Summary of proceedings:

 

I Conflict of interest: The Board Members listed below stated that they had no conflict of interest with the matters on the agenda of the meeting.

 

II The Board approved:

 

  1) The proposal of the Board member Samy Kopit Moscovitch that the members of the Board of Directors should authorize their Chair to call an Extraordinary General Meeting of Stockholders, to be held on December 20, 2016 at 11 a.m., and that in the absence of a quorum the Chair be authorized to make second convocation, within the legal period, to deal with:

 

    the Report of Management and Adjusted Financial Statements for the year 2015; and

 

    re-ratification of the allocation of the Net profit for 2015.

 

  2) The Compliance Program for the 2016–2018 period;

 

  3) Changes in the composition of the Committees of the Board of Directors.

 

  4) The minutes of this meeting.

 

III The Board approved the Report of Management and the Adjusted Financial Statements for the business year 2015, and the related complementary documents, also adjusted, and submitted them to the Extraordinary General Meeting of Stockholders.

 

  

 

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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IV The Board authorized:

 

  1) Increase in the share capital of RME – Rio Minas Energia Participações S.A. (‘RME’)

            by up to

two hundred thirty five million fifty three thousand four hundred thirty five Reais and nineteen centavos,

            through issuance of up to

six hundred eighty three million three hundred four thousand nine hundred fifty four

nominal shares without par value,

            for issue price of

R$ 0.34399492322 per share,

            of which

one hundred seventy million eight hundred twenty six thousand two hundred thirty nine are common shares

            and

five hundred twelve million four hundred seventy eight thousand seven hundred fifteen are preferred shares,

increasing the total share capital

            from

two hundred eleven million nine hundred ninety eight thousand one hundred eighty four Reais and seventy two centavos

            to a maximum of

four hundred forty seven million fifty one thousand six hundred nineteen Reais and ninety one centavos,

with consequent subscription of the totality of the shares issued, resulting in the Company holding

            an equity interest of up to

61.61% in the total capital of RME,

and the need to alter the head paragraph of Clause 5 of the by-laws of RME to reflect the increase in share capital.

 

  2) Subscription by Cemig, in cash, of nominal shares without par value in RME,

            in the amount of up to

two hundred thirty five million fifty three thousand four hundred thirty five Reais and nineteen centavos,

increasing the Company’s holding in the share capital of RME

  from 25% to a maximum of 61.61%.

 

  3) Increase in the share capital of Luce Empreendimentos e Participações S.A. (‘Lepsa’)

            by up to

two hundred twenty eight million seven hundred thirty eight thousand five hundred forty five Reais and three centavos,

            through issuance of up to

six hundred sixty seven million one hundred forty nine thousand and sixty nominal shares without par value,

            at issue price of

R$ 0.34285972768 per share,

            of which:

one hundred sixty six million seven hundred eighty seven thousand two hundred sixty five will be common shares

            and

five hundred million three hundred sixty one thousand seven hundred ninety five will be preferred shares,

increasing the total share capital

            from

two hundred eleven million six hundred ninety one thousand six hundred ninety two Reais and fifty five centavos

            to a maximum of

four hundred forty million four hundred thirty thousand two hundred thirty seven Reais and fifty eight centavos,

thus, consequently, subscription of the totality of the shares issued,

increasing the Company’s holding in the share capital of Lepsa

            to a maximum of

61.16%,

and requiring alteration of the head paragraph of Clause 5 of the by-laws of Lepsa to reflect the increase in the share capital.

 

  4) Subscription by Cemig in cash, of nominal shares without par value in Lepsa,

            in the amount of up to

two hundred twenty eight million seven hundred thirty eight thousand five hundred forty five Reais and three centavos,

increasing the Company’s holding in the share capital of Lepsa

            from 25% to a maximum of

61.16%.

 

  

 

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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V The Board submitted a proposal to the Extraordinary General Meeting of Stockholders for:

 

  1) Re-ratification of the allocation of the Net profit for the business year 2015, approved in the Ordinary and Extraordinary General Meetings of Stockholders held concurrently on April 29, 2016, the amount being adjusted from R$ 2,491,375,000 to R$ 2,468,500,000, the balance of Retained earnings remaining the same (R$ 59,536,000), as follows;

 

  a) R$ 633,968,000 to be allocated as mandatory minimum dividend, to be paid to the Company’s stockholders, as follows:

 

  R$ 200,000,000 in Interest on Equity, under Board Spending Decision (CRCA) 099/2015 of December 17, 2015, and CRD-432/2015, of January 4, 2016, in two equal installments, by June 30 and December 30, 2016, as part of the minimum mandatory dividend for 2016, the Executive Board to obey these dates and to decide the places and processes of payment,

 

  to stockholders whose names were on the Company’s Nominal Share registry on December 30, 2015 (the shares began to trade ‘ex–’ these rights on January 4, 2016); and

 

  R$ 433,968,000 in the form of dividends for the 2015 business year, to stockholders whose names were on the Company’s nominal share registry on April 29, 2016, the date on which the Ordinary and Extraordinary General Meetings were held this year;

 

  b) R$ 622,529,000 to be held in Stockholders’ equity in the Reserve for mandatory dividends not distributed, to be paid as and when the Company’s financial situation permits;

 

  c) R$ 1,250,843,000 to be held in Stockholders’ equity in the Retained earnings reserve, to provide funding for the Company’s consolidated investments planned for 2016, in accordance with a capital budget; and

 

  d) R$ 20,696,000 to be held in Stockholders’ equity in the Tax incentives reserve, for tax incentives earned in 2015 as a result of investments in the region of Sudene. The other terms related to the payments of dividends decided in the Ordinary and Extraordinary General Meetings of Stockholders held concurrently on April 29, 2016 are unchanged.

 

  2) Vote, by the Company’s representatives at the Extraordinary General Meeting of Stockholders of Cemig Geração e Transmissão S.A. to be held on December 20, 2016, in favor of:

 

  the Report of Management and the Adjusted Financial Statements for the year ended December 31, 2015, and the related complementary documents – also adjusted; and

 

  re-ratification of the allocation of the net profit for 2015, approved in the Annual General Meeting of April 29, 2016, reducing it from R$ 2,337,663,000 to R$ 2,316,273,000, the balance of Retained Earnings, of R$ 47,761,000, being unchanged.

 

  

 

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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VI The Board oriented the representatives appointed by the Company, in the Annual General Meetings of Stockholders of RME and Lepsa, to vote in favor of the matters referred to in Item V, above.

 

VIII Abstention

The Board member Patricia Gracindo Marques de Assis Bentes abstained from voting on the matters referred to in items III, IV, V and VI, above; and

the Board member Arcângelo Eustáquio Torres Queiroz abstained from voting on the matter referred to in Subclause 3 of Item II above.

 

VIII Comments: The following made comments on matters of interest to the Company:

 

The Chair;

    

Board member:

   Fabiano Maia Pereira;

Controller:

   Leonardo George de Magalhães;

Deloitte Touche Tohmatsu Auditores Independentes:

   Marcelo Salvador;

External advisor:

   João Roriz.

The following were present:

 

Board members:

  

José Afonso Bicalho Beltrão da Silva,

Mauro Borges Lemos,

Allan Kardec de Melo Ferreira,

Arcângelo Eustáquio Torres Queiroz,

Daniel Alves Ferreira

Helvécio Miranda Magalhães Junior,

José Pais Rangel,

Marco Antônio de Rezende Teixeira,

Marco Antônio Soares da Cunha Castello Branco,

Nelson José Hubner Moreira,

Ms. Patricia Gracindo Marques de Assis Bentes

   Saulo Alves Pereira Junior,

Aloísio Macário Ferreira de Souza

Bruno Magalhães Menicucci,

Antônio Dirceu Araújo Xavier

Bruno Westin Prado Soares Leal,

Carlos Fernando da Silveira Vianna,

Luiz Guilherme Piva,

Marina Rosenthal Rocha,

Ricardo Wagner Righi de Toledo,

Tarcísio Augusto Carneiro,

Samy Kopit Moscovitch

Wieland Silberschneider;

Audit Board:

  

Rafael Amorim de Amorim,

Manuel Jeremias Leite Caldas,

   Marcos Túlio de Melo;

Chief Officer:

   Fabiano Maia Pereira;     

General Manager:

   Leonardo George de Magalhães;     

Deloitte Touche Tohmatsu:

   Marcelo Salvador:

External Advisor:

   João Roriz;     

Secretary:

   Anamaria Pugedo Frade Barros.     

(Signed) Anamaria Pugedo Frade Barros

 

  

 

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. MARKET ANNOUNCEMENT DATED NOVEMBER 12, 2016: COMPLETION OF 20-F FORM FOR 2015

 

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COMPANHIA ENERGÉTICA DE MINAS GERAIS – CEMIG

LISTED COMPANY — CNPJ 17.155.730/0001-64 — NIRE 31300040127

MARKET ANNOUNCEMENT

Completion of 20-F Form for 2015

As part of its commitment to best corporate governance practices, and in accordance with CVM Instruction 358 of January 3, 2002, Cemig (Companhia Energética de Minas Gerais), a listed company with equity securities traded on the stock exchanges of São Paulo, New York and Madrid, hereby informs the public as follows:

Cemig has now completed preparation of its 20-F Form for the year ended December 31, 2015 – ‘the 2015 20-F Form’.

The Company intends to file the 2015 20-F Form with the U.S. Securities and Exchange Commission (‘SEC’) on Monday, November 14, 2016, in the morning.

Cemig will keep its stockholders and the market duly informed on all new information related to this subject.

Belo Horizonte, November 12, 2016

Fabiano Maia Pereira

Chief Finance and Investor Relations Officer

 

  

 

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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10. MARKET ANNOUNCEMENT DATED NOVEMBER 14, 2016: FILING OF 2015 20-F FORM WITH THE SEC

 

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COMPANHIA ENERGÉTICA DE MINAS GERAIS – CEMIG

LISTED COMPANY — CNPJ 17.155.730/0001-64 — NIRE 31300040127

MARKET ANNOUNCEMENT

Filing of 2015 20-F Form with the SEC

As part of its commitment to best corporate governance practices, and in accordance with CVM Instruction 358 of January 3, 2002, Cemig (Companhia Energética de Minas Gerais), a listed company with equity securities traded on the stock exchanges of São Paulo, New York and Madrid, hereby informs the public as follows:

Today, November 14, 2016, Cemig has filed its 20-F Form for the business year ended December 31, 2015 with the U.S. Securities and Exchange Commission (SEC) and with the Brazilian Securities Commission (CVM), in English. The version of the 2015 20-F Form translated into Portuguese will be filed shortly with the CVM and made available on the Company’s website.

The 2015 20-F Form in English can be accessed on the SEC site (www.sec.gov), or on the Investor Relations site of Cemig (http://ri.cemig.com.br).

Stockholders may receive a printed copy of the report including the financial statements for the business year ended December 31, 2015, free of charge, on request made via our Investor Relations site (http://ri.cemig.com.br), in the section Informações FinanceirasRelatórios SEC.

For any further information on the 2015 20-F Form, please contact the Investor Relations Department, on +55 31 3506-5024 or by email on ri@cemig.com.br.

Belo Horizonte, November 14, 2016

Fabiano Maia Pereira

Chief Finance and Investor Relations Officer

 

  

 

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. MARKET ANNOUNCEMENT DATED NOVEMBER 18, 2016: REPLY TO CVM INQUIRY LETTER 3261/2016-SAE/GAE-2, OF NOVEMBER 17, 2016

 

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COMPANHIA ENERGÉTICA DE MINAS GERAIS – CEMIG

LISTED COMPANY — CNPJ 17.155.730/0001-64 — NIRE 31300040127

MARKET ANNOUNCEMENT

Reply to CVM Inquiry Letter 3261/2016-SAE/GAE-2, of November 17, 2016

Question asked by BM&FBovespa

November 17, 2016

3261/2016-SAE/GAE 2

Companhia Energética de Minas Gerais – CEMIG

At.: Mr. Fabiano Maia Pereira

Investor Relations Director

Subject: Request for information on media news report

Dear Sirs,

A news item published by the newspaper Valor Econômico on November 17, 2016 contains, among other information, the following statement:

 

    Companhia Energética de Minas Gerais (Cemig) is seeking a partner in the private sector in an attempt to keep control of three hydroelectric plants: Jaguara, Miranda and São Simão;

 

    it intends, together with a private-sector partner, to pay the federal government the Concession Grant Fee for the plants – which would total R$ 10 billion.

We have not seen this information in the documents sent by your Company through the Empresas.NET System. If this is not the case, please state the document, the pages on which the information is to be found, and the date and time it was sent.

We would note that your Company should publish periodic or one-off information and other information of interest to the market, through the Empresas.NET System, ensuring it receives wide and immediate dissemination and equitable treatment of investors and other market participants.

Having said this, we request explanation on the items indicated, by November 18, 2016, without prejudice to the provisions of the sole sub-paragraph of Article 6 of CVM Instruction 358/02, with your confirmation or otherwise, and any other information deemed to be important.

Your response should be given through the IPE Module, selecting the category Material Announcement, or the category Market Announcement; the Type: Responses to consultations by CVM/Bovespa; and Subject heading: Media News Reports. This will result in simultaneous transmission of the file to the BM&FBovespa and to the CVM.

 

  

 

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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We note the obligation, stated in the sole sub-paragraph of Article 4 of CVM Instruction 358/02, to question managers and controlling stockholders of the Company to ascertain whether they may have knowledge of information that should be disclosed to the market.

The file to be sent should contain the question that is asked above, preceding your company’s reply.

This request is made under the Cooperation Working Agreement made between the CVM and BM&FBovespa on December 13, 2011. Non-compliance with the request may make your company subject to an incentive fine by the Company Relations Management Unit (SEP) of the CVM, subject to CVM Instruction 452/07.

Reply by CEMIG

In reply to Official Letter Nº 3261/2016-SAE/GAE 2, of November 17, 2016, we inform you that it is the Company’s intention to renew the concessions of the Jaguara, Miranda and São Simão plants, specified in concession contracts 007/1997, as has been widely publicized to the market, since 2013, through various Market Notices and Material Announcements.

In a dispatch of the Federal Supreme Court (STF) published on October 28, 2015 (Action for Provisional Remedy AC 3980), Supreme Court Justice Dias Toffoli made the following recommendation: “In view of the complexity and importance of the debate raised by this case, and the need to encourage self-resolution within the judiciary, the Parties shall state whether they have interest in the holding of a conciliation hearing.” Since then, the Company has been seeking courses of action to resolve the case.

During the conference call for publication of its results for the third quarter 2016, held on November 16, 2016, the Company informed the market that it continues to negotiate with the federal government, believing that it will find a positive solution for both parties.

The news report published in the newspaper Valor Econômico, which is the subject of the question asked in the above-mentioned official letter, reflects one of the alternatives for a solution that might make an agreement possible for maintaining the concessions referred to. It is only a course of action that the Company is considering – an intention. No transaction has been agreed, nor does it constitute a Material Event, in the terms of Article 2 of CVM Instruction 358/2002.

Cemig takes this opportunity of reiterating its commitment to opportune and timely disclosure of all and any facts that are of interest to its stockholders, in the terms of Article 2 of CVM Instruction 358/2002.

Belo Horizonte, November 18, 2016

Fabiano Maia Pereira

Chief Finance and Investor Relations Officer

 

  

 

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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12. MATERIAL ANNOUNCEMENT DATED NOVEMBER 21, 2016: CAPITAL INCREASE IN RME AND LEPSA

 

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COMPANHIA ENERGÉTICA DE MINAS GERAIS – CEMIG

LISTED COMPANY – CNPJ 17.155.730/0001-64 – NIRE 31300040127

MATERIAL ANNOUNCEMENT

Capital increase in RME and Lepsa

Cemig (Companhia Energética de Minas Gerais), a listed company traded on the stock exchanges of São Paulo, New York and Madrid, in accordance with CVM Instruction 358 of January 3, 2002, as amended, hereby informs the Brazilian Securities Commission (CVM), the São Paulo Stock Exchange (BM&F Bovespa S.A.) and the market in general, as follows:

On today’s date, General Meetings of Stockholders held by

 

    RME – Rio Minas Energia Participações S.A. (‘RME’) and

 

    Luce Empreendimentos e Participações S.A. (‘Lepsa’),

approved the following:

 

(i) Conversion, by RME, of 162,241,527 preferred shares, and by Lepsa, of 165,846,151 preferred shares, held by the following stockholders:

 

Banco Santander (Brasil) S.A. (‘Santander’), BB Banco de Investimento S.A. (‘BB BI’)

and BV Financeira S.A. – Crédito, Financiamento e Investimento (‘BV’)

into the same number of common shares.

 

(ii) •   Increase in the share capital of RME, by private subscription,

 

                    by    up to    R$ 221,772,018.14   
      (two hundred twenty one million seven hundred seventy two
      thousand eighteen Reais and fourteen centavos),
                    through issuance of    up to    162,241,527    new common shares
                                               and    up to    486,724,579    new preferred shares,
         all nominal shares without par value,
                    for issue price of       R$ 0.3417312799    per share;         and

 

    increase in the share capital of Lepsa, by private subscription,

 

                    by    up to    R$ 225,946,197.37   
      (two hundred twenty five million nine hundred forty six thousand
      one hundred ninety seven Reais and thirty seven centavos),
                    through issuance of    up to    165.846.151    new common shares
                                               and    up to    497.538.451    new preferred shares,
         all nominal shares without par value,
                    for issue price per share of    R$ 0.3405960838 – this price having been set in accordance with Art. 170, §1º, Sub-item II of Law 6404/76, as amended;

– all the shares issued to be in every way identical to the previously existing shares.

 

  

 

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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(iii) Such alterations to the by-laws of RME and Lepsa as are necessary to reflect the changes in the share capital just approved.

The following stockholders:

 

Santander, BV, BB BI and Banco BTG Pactual S.A.

waived their right of first refusal to subscribe the shares issued, and Cemig opted to subscribe the totality of those shares.

As a result Cemig has increased its holding in the total share capital of RME from 25% to 60.65%, while continuing to hold a 50% equity interest in the voting shares of RME;

and has increased its holding in the total share capital of Lepsa from 25% to 61.06%,

while maintaining its 50% interest in the voting shares of Lepsa.

As a result the indirect interest held by Cemig in the share capital of Light S.A. (‘Light’), through RME and Lepsa, has increased from 6.41% to 15.86%.

Cemig also has a directly-held stockholding interest of 26.06% in the share capital of Light.

Cemig will keep its stockholders and the market duly informed on all new information related to this subject.

Belo Horizonte, November 21, 2016.

Fabiano Maia Pereira

Chief Finance and Investor Relations Officer

 

  

 

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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13. MARKET ANNOUNCEMENT DATED NOVEMBER 21, 2016: NEWS REPORT PUBLISHED IN THE MEDIA

 

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COMPANHIA ENERGÉTICA DE MINAS GERAIS – CEMIG

LISTED COMPANY — CNPJ 17.155.730/0001-64 — NIRE 31300040127

MARKET ANNOUNCEMENT

News report published in the media

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 CVM Instruction 358 of January 3, 2002, as amended, hereby informs the Brazilian Securities Commission (CVM), the São Paulo Stock Exchange (BM&F Bovespa S.A.) and the market in general as follows:

With reference to the news report published by the Estado de São Paulo newspaper on November 20, 2016, to the effect that Cemig is preparing “a further offering, to take place in early 2017”, the Company reports that it is studying various possibilities for improving its debt structure, but that an issue of shares is not one of the options that has so far been studied.

Cemig takes this opportunity of reiterating its commitment to opportune and timely disclosure of all and any facts that are of interest to its stockholders, in the terms of Article 2 of CVM Instruction 358/2002.

Belo Horizonte, November 21, 2016.

Fabiano Maia Pereira

Chief Finance and Investor Relations Officer

 

  

 

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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14. MATERIAL ANNOUNCEMENT DATED NOVEMBER 30, 2016: INCREASE IN STOCKHOLDING INTEREST

 

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COMPANHIA ENERGÉTICA DE MINAS GERAIS – CEMIG

LISTED COMPANY – CNPJ 17.155.730/0001-64 – NIRE 31300040127

MATERIAL ANNOUNCEMENT

INCREASE IN STOCKHOLDING INTEREST

In continuity of its Material Announcement of September 7, 2016, Cemig (Companhia Energética de Minas Gerais), a listed company traded on the stock exchanges of São Paulo, New York and Madrid, in accordance with CVM Instruction 358 of January 3, 2002, as amended, hereby informs the Brazilian Securities Commission (CVM), the São Paulo Stock Exchange (BM&F Bovespa S.A.) and the market in general, as follows:

On today’s date Cemig acquired all the 153,634,195 preferred shares held by

Banco BTG Pactual S.A. (“BTG”) in

 

    RME – Rio Minas Energia Participações S.A. (‘RME’) and

 

    Luce Empreendimentos e Participações S.A. (‘Lepsa’)

 

for consideration of R$ 201,961,743.54

   (two hundred and one million nine hundred sixty one thousand seven hundred forty three Reais and fifty four centavos).

This acquisition:

 

    increases Cemig’s holding in the total capital of RME from 60.65% to 66.27%,

while its holding in the voting stock remains at 50%; and

 

    increases Cemig’s holding in the total capital of Lepsa from 61.06% to 66.62%,

while its holding in the voting stock remains at 50%.

Cemig will keep its stockholders and the market duly informed on all new information related to this subject.

Belo Horizonte, November 30, 2016

Fabiano Maia Pereira

Chief Finance and Investor Relations Officer

 

  

 

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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15. SUMMARY OF PRINCIPAL DECISIONS OF THE 679TH MEETING OF THE BOARD OF DIRECTORS HELD ON DECEMBER 6, 2016

 

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COMPANHIA ENERGÉTICA DE MINAS GERAIS – CEMIG

LISTED COMPANY — CNPJ 17.155.730/0001-64 — NIRE 31300040127

BOARD OF DIRECTORS

Meeting of December 6, 2016

SUMMARY OF PRINCIPAL DECISIONS

At its 679h meeting, held on December 6, 2016, the Board of Directors of Cemig (Companhia Energética de Minas Gerais) decided the following:

 

1. Guarantee for rollover of debt of Cemig GT.

 

  

 

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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16. MARKET ANNOUNCEMENT DATED DECEMBER 7, 2016: REPLY TO CVM INQUIRY LETTER 554/2016-CVM/SEP/GEA-1, OF DECEMBER 6, 2016

 

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COMPANHIA ENERGÉTICA DE MINAS GERAIS – CEMIG

LISTED COMPANY — CNPJ 17.155.730/0001-64 — NIRE 31300040127

MARKET ANNOUNCEMENT

Reply to CVM Inquiry Letter 554/2016-CVM/SEP/GEA-1, of December 6, 2016

Question asked by the Brazilian Securities Commission (CVM)

Rio de Janeiro, December 6, 2016.

To Mr. Fabiano Maia Pereira

Investor Relations Director

Cia. Energética de Minas Gerais – CEMIG

Av. Barbacena, 1200 – 5th floor, B1 Wing

Santo Agostinho

30130-145 Belo Horizonte, Minas Gerais

E-mail: ri@cemig.com.br

Fax: (31) 3506-5026

Tel.: (31) 3506-5024

cc: emissores@bvmf.com.br; ccarajoinas@bvmf.com.br; apereira@bvmf.com.br

Subject: request for information on news report

Dear Sir,

 

  1. We refer to the report published on the G1 Portal on November 9, under the headline:

“TCU sees indications of over-invoicing of R$ 3.4bn in construction of Belo Monte”,

which contains the following statements:

The Federal Audit Court (TCU) has found indications of overinvoicing of R$ 3.384 billion in the works on construction of the Belo Monte hydroelectric plant, in Pará. The Audit Court has given Norte Energia, the consortium responsible for the plant and for the Belo Monte Construction Consortium, which was contracted by Norte Energia to build it, 15 days to make a statement on the irregularities.

According to the Audit Court, of the total overinvoicing found, R$ 2.893 billion is overpricing found in the civil engineering works, and a further R$ 490 million relates to issues in the Second Amendment signed between Norte Energia and the Belo Monte Construction Consortium.

 

  

 

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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At the time of the last update of this report the offices of Norte Energia had not responded to calls from G1.

Belo Monte is the world’s third largest hydroelectric plant, after Three Gorges, in China, and Itaipu, built on the frontier between Brazil and Paraguay.

In view of the above, and the equity interest that Cemig holds in Norte Energia, we require you to make a statement in relation to this report and the possible impact on Cemig’s financial statements, and to comment on any other information considered to be important on the subject.

 

  3. This statement should be given through the Empresas.NET system, in the category: Market Announcement, under the sub-category: Responses to consultations by CVM/Bovespa; subject heading: Media News Reports, and should include a transcription of this letter.

 

  4. We warn you that, by order of our Company Relations Supervision Management, using its legal powers under Sub-item II of Article 9 of Law 6385/1976 and CVM Instruction 452/07, a coercive fine of R$ 1,000 (one thousand Reais) is applicable, without prejudice to other administrative sanctions, for non-compliance with the requirement contained in this Official Letter, within 24 hours from becoming aware of the content of this communication, which is sent exclusively by e-mail, notwithstanding the provisions of §1 of Article 6 of CVM Instruction 358/02.

Reply by CEMIG

Dear Ms. Nilza Maria Silva de Oliveira,

In response to Official Letter 554/2016-CVM/SEP/GEA-1, of December 6, 2016, we inform you that the reports of the Federal Audit Board are public documents, and that we are not aware of any consequences arising from the matters stated in the above report.

Cemig (‘the Company’) has an indirectly-held equity interest of 12.5% in Norte Energia S.A. (‘Norte Energia’), the company that is the holder of the concession for commercial operation of the Belo Monte Hydroelectric Plant.

In relation to this indirect investment that the Company holds in Norte Energia, we inform you that as a result of the conclusions and results found by the independent investigation contracted by Eletrobras in projects and companies in which it has a stockholding interest, it was found to be necessary to adjust the financial statements of Norte Energia at December 31, 2015. The resulting effects for the Company were recognized by the equity method in proportion to the Company’s stockholding interest.

This information is given in detail in the Company’s financial statements for the year ended December 31, 2015, which were re-presented on November 12, 2016.

Belo Horizonte, December 7, 2016

Fabiano Maia Pereira

Chief Finance and Investor Relations Officer

 

  

 

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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17. SUMMARY OF PRINCIPAL DECISIONS OF THE 680TH MEETING OF THE BOARD OF DIRECTORS HELD ON DECEMBER 15, 2016

 

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COMPANHIA ENERGÉTICA DE MINAS GERAIS – CEMIG

LISTED COMPANY CNPJ 17.155.730/0001-64 – NIRE 31300040127

BOARD OF DIRECTORS

Meeting of December 15, 2016

SUMMARY OF PRINCIPAL DECISIONS

At its 680th meeting, held on December 15, 2016, the Board of Directors of Cemig (Companhia Energética de Minas Gerais) decided the following:

 

    Guarantee in rollover of debt of Cemig GT; cancellation of CRCA (Board Spending Decision.

 

  

 

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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18. NOTICE TO STOCKHOLDERS DATED DECEMBER 15, 2016: PAYMENTS OF DIVIDENDS AND INTEREST ON EQUITY: DECEMBER 29

 

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COMPANHIA ENERGÉTICA DE MINAS GERAIS CEMIG

LISTED COMPANY – CNPJ 17.155.730/0001-64 – NIRE 31300040127

NOTICE TO STOCKHOLDERS

Payments of dividends and Interest on Equity: December 29

Cemig advises its stockholders that the payments of Interest on Equity and dividends previously scheduled to take place on December 20, 2016, as stated in the Notice to Stockholders of November 23, 2016, will now be made on December 29, 2016.

The other information in the said Notice to Stockholders of December 23, 2016 is unchanged.

Belo Horizonte, December 15, 2016

Fabiano Maia Pereira

Chief Finance and Investor Relations Officer

 

  

 

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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19. CONVOCATION AND PROPOSAL OF EXTRAORDINARY GENERAL MEETING OF STOCKHOLDERS TO BE HELD ON DECEMBER 20, 2016

 

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COMPANHIA ENERGÉTICA DE MINAS GERAIS – CEMIG

LISTED COMPANY – CNPJ 17.155.730/0001-64 – NIRE 31300040127

EXTRAORDINARY GENERAL MEETING OF STOCKHOLDERS

DECEMBER 20, 2016

CONVOCATION

Stockholders are hereby called to an Extraordinary General Meeting of Stockholders to be held on December 20, 2016 at 11 a.m., at the company’s head office, Av. Barbacena 1200, 21st floor, Belo Horizonte, Minas Gerais, Brazil, to decide on the following matters:

 

  1 Examination, debate and voting on the Report of Management and the Adjusted Financial Statements for the year ended December 31, 2015, and the related complementary documents – also adjusted.

 

  2 Re-ratification of the allocation of the Net profit for the business year 2015, approved in the Ordinary and Extraordinary General Meetings of Stockholders held concurrently on April 29, 2016, the amount being adjusted from R$ 2,491,375,000 to R$ 2,468,500,000, the balance of Retained earnings remaining the same (R$ 59,536,000).

 

  3 Orientation of vote by the representative(s) of the Company in the Extraordinary General Meeting of Stockholders of Cemig Geração e Transmissão S.A., also to be held on December 20, 2016, in favor of the following:

 

  Examination, debate and voting on the Report of Management and the Adjusted Financial Statements for the year ended December 31, 2015, and the related complementary documents – also adjusted; and

 

  Re-ratification of the allocation of the Net profit for 2015, approved in the Ordinary Annual General Meetings of Stockholders held on April 29, 2016, the amount being adjusted from R$ 2,337,663,000 to R$ 2,316,273,000, the balance of Retained earnings remaining the same (at R$ 47,761,000).

Any stockholder who wishes to be represented by proxy at the said General Meeting of Stockholders should obey the precepts of Article 126 of Law 6406 of 1976, and of the sole paragraph of Clause 9 of the Company’s by-laws, by exhibiting at the time, or depositing, preferably by December 16, 2016, proofs of ownership of the shares, issued by a depositary financial institution, and a power of attorney with specific powers, at Cemig’s Corporate Executive Office (Superintendência da Secretaria Geral) at Av. Barbacena 1200 – 19th Floor, B1 Wing, Belo Horizonte, Minas Gerais.

Belo Horizonte, November 11, 2016

José Afonso Bicalho Beltrão da Silva

Chair of the Board of Directors

 

  

 

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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PROPOSAL

BY THE BOARD OF DIRECTORS

TO THE

EXTRAORDINARY GENERAL MEETING OF STOCKHOLDERS

TO BE HELD ON DECEMBER 20, 2016

Dear Stockholders:

The Board of Directors of Companhia Energética de Minas Gerais—Cemig:

Whereas –

 

a) the Company’s financial statements for the business year ended December 31, 2015 were made available to the CVM (Comissão de Valores Mobiliários) on March 30, 2016 and approved by the Ordinary and Extraordinary General Meetings of Stockholders held concurrently on April 29, 2016;

 

b) those financial statements were filed at the CVM with the following qualification by the external auditors:

Absence of sufficient auditing evidence in relation to the investment, and the equity method gain (or loss) arising, in Amazônia Energia S.A., and Aliança Norte Energia Participações S.A., on December 31, 2015 and for the business year end on that date.

As mentioned in Notes 1 and 14 to the financial statements, the Company has an indirect investment in Norte Energia S.A. (‘Norte Energia’), which is the subject of an investigation carried out by the stockholder Centrais Elétricas Brasileiras S.A. (Eletrobras). Due to that investigation not having been finalized, the audit examinations of the financial statements of Amazônia Energia S.A. and Aliança Norte Energia Participações S.A. (which have investments in Norte Energia S.A.), for the business year ended December 31, 2015, have not been concluded at today’s date. Consequently, we have not obtained sufficient auditing evidence in relation to the investment held by the Company in Amazônia Energia S.A. and Aliança Norte Energia Participações S.A., valued by the equity method at R$ 871,442,000 on December 31, 2015, and in relation to the equity loss reported by the equity method corresponding to R$ 10,261,000 for the period ending on that date.”;

 

c) those Meetings of Stockholders approved the following allocation of the Net profit for 2015, of R$ 2,491,375,000, and of the balance of Retained earnings of R$ 59,536,000:

 

  1) R$ 633,968,000 as minimum mandatory dividends, as follows:

 

  R$ 200,000,000 in the form of Interest on Equity, under Board Spending Decisions CRCA 088/2015 of December 17, 2015, and CRD 432/2015, of January 4, 2016, to be paid in two equal installments, by June 30, 2016 and December 30, 2016, to stockholders on the Company’s Nominal Share Registry on December 30, 2015, the Executive Board to obey the periods and to decide the places and processes of payment and to allocate the amount of the Interest on Equity against the minimum mandatory dividend (the shares began to trade ‘ex–’ these rights on January 4, 2016); and

 

  R$ 433,968,000 in the form of dividends for the 2015 business year, to stockholders of record on the date on which the Ordinary General Meeting is held.

 

  

 

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) R$ 633,967,000 to be held in Equity in the Reserve for mandatory dividend not distributed, to be paid as and when the Company’s financial situation permits;

 

  3) R$ 1,262,280,000 to be held in Stockholders’ equity in the Retained earnings reserve, to provide funding for the Company’s planned investments in 2016, in accordance with a capital budget; and

 

  4) R$ 20,696,000 to be held in Stockholders’ equity in the Tax incentives reserve, for tax incentive gains obtained in 2015 as a result of investments in the region of Sudene –

 

  payments of the dividends to be made by December 30, 2016, in accordance with the availability of cash and at the decision of the Executive Board;

 

d) Cemig owns 100% of the share capital of Cemig Geração e Transmissão S.A. (Cemig GT), which in turn holds an equity interest of 74.50% in the total share capital of Amazônia Energia Participações S.A. (‘Amazônia Energia’), which in turn holds 9.77% of the share capital of Norte Energia S.A. (Norte Energia);

 

e) Cemig GT further holds 49.00% of the share capital of Aliança Norte Energia Participações S.A. (‘Aliança Norte’), which in turn holds 9.00% of the share capital of Norte Energia;

 

f) as a result of conclusion of investigations into Norte Energia, Cemig has adjusted the results of the said financial statements by the amount of R$ 22,875,000, so that the Net profit for 2015 is adjusted from R$ 2,491,375,000 to R$ 2,468,500,000;

 

g) due to this adjustment, it is necessary to re-ratify the allocation of the Company’s net profit for 2015 (the impacts of this are restricted to the Retained earnings reserve, and the Reserve for mandatory dividends not distributed);

 

h) Cemig GT is a wholly-owned subsidiary of the Company and will hold an Extraordinary General Meeting of Stockholders by December 20, 2016 to re-ratify the allocation of Net profit for the 2015 business year; and

 

i) Clause 21, Paragraph 4, Subclause ‘g’ of the by-laws of Cemig states:

“Clause 21—.

§4 The following maters shall require a decision by the Executive Board: .

 

  g) approval, upon proposal by the Chief Executive Officer, prepared jointly with the Chief Business Development Officer and the Chief Finance and Investor Relations Officer, of the statements of vote in the General Meetings of the wholly-owned and other subsidiaries, affiliated companies and in the consortia in which the Company participates, except in the case of the wholly-owned subsidiaries Cemig Distribuição S.A. and Cemig Geração e Transmissão S.A., for which the competency to decide on these matters shall be that of the General Meeting of Stockholders, and decisions must obey the provisions of these Bylaws, the decisions of the Board of Directors, the Long-term Strategic Plan and the Multi-year Strategic Implementation Plan.”;

– do now propose to you as follows:

 

  

 

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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Proposal:

 

I) Re-ratification of the allocation of the Net profit for the business year 2015, approved in the Ordinary and Extraordinary General Meetings of Stockholders held concurrently on April 29, 2016, the amount being adjusted from R$ 2,491,375,000 to R$ 2,468,500,000, the balance of Retained earnings remaining the same (R$ 59,536,000), as follows:

 

  a) R$ 633,968,000 to be paid to the stockholders as mandatory minimum dividend, as follows:

 

  R$ 200,000,000 as Interest on Equity, under Board Spending Decisions CRCA 088/2015 of December 17, 2015, and CRD 432/2015, of January 4, 2016, to be paid in two equal installments, by June 30, 2016 and December 30, 2016 to stockholders on the Company’s Nominal Share Registry on December 30, 2015, and allocated as part of the mandatory minimum dividend, the Executive Board to obey the periods and to decide the places and processes of payment (the shares began to trade ‘ex–’ these rights on January 4, 2016); and

 

  R$ 433,968,000 as dividends for the 2015 business year, to stockholders on the Company’s nominal share registry on April 29, 2016, the date on which the Ordinary and Extraordinary General Meetings were held this year;

 

  b) R$ 622,529,000 to be held in Stockholders’ equity in the Reserve for mandatory dividends not distributed, to be paid as and when the Company’s financial situation permits;

 

  c) R$ 1,250,853,000 to be held in Stockholders’ equity in the Retained earnings reserve, to provide funding for the Company’s planned investments for 2016, in accordance with a capital budget; and

 

  d) R$ 20,696,000 to be held in Stockholders’ equity in the Tax incentives reserve, for tax incentives gains obtained in 2015 as a result of investments in the region of Sudene;

 

  the other terms related to the payment of dividends decided in the Ordinary and Extraordinary General meetings of stockholders held, concurrently, on April 29, 2016 being unchanged.

 

II) Orientation of the representative(s) of Cemig at the General Meeting of Stockholders of Cemig Geração e Transmissão S.A. to be held, also, on December 20, 2016, to vote in favor of the Report of Management and the Adjusted Financial Statements for the year ended December 31, 2015, and the related complementary documents – also adjusted;

 

III) Orientation of the representative(s) of Cemig at the General Meeting of Stockholders of Cemig Geração e Transmissão S.A. to be held, also, on December 20, 2016, to vote in favor of re-ratification of the allocation of the Net profit for 2015, approved in the Ordinary Annual General Meetings of Stockholders held on April 29, 2016, the amount being adjusted from R$ 2,337,663,000 to R$ 2,316,273,000, the balance of Retained earnings remaining the same (at R$ 47,761,000).

As can be seen, the objective of this proposal is to meet legitimate interests of the stockholders and of the Company, and as a result Board of Directors hope that it will be approved by the Stockholders.

Belo Horizonte, November 11, 2016

 

Signed:   

José Afonso Bicalho Beltrão da Silva

Mauro Borges Lemos

Allan Kardec de Melo Ferreira

Arcângelo Eustáquio Torres Queiroz

Daniel Alves Ferreira

Helvécio Miranda Magalhães Junior

José Pais Rangel

  

Marco Antônio de Rezende Teixeira

Marco Antônio Soares da Cunha Castello Branco

Nelson José Hubner Moreira

Saulo Alves Pereira Junior

Aloísio Macário Ferreira de Souza

Bruno Magalhães Menicucci

 

  

 

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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APPENDIX 1

OPINION OF THE AUDIT BOARD

The undersigned members of the Audit Board of Companhia Energética de Minas Gerais – Cemig, in performance of their functions under the law and under the by-laws, have examined the Proposal made by the Board of Directors to the Extraordinary General Meeting of Stockholders to be held on December 20, 2016, which is for the following:

Re-ratification of the allocation of the Net profit for the business year 2015, approved in the Ordinary and Extraordinary General Meetings of Stockholders held concurrently on April 29, 2016, the amount being adjusted from R$ 2,491,375,000 to R$ 2,468,500,000, the balance of Retained earnings remaining the same (R$ 59,536,000), as follows;

 

  a) R$ 633,968,000 to be allocated as mandatory minimum dividend, to be paid to the Company’s stockholders, as follows:

 

  R$ 200,000,000 in the form of Interest on Equity, under Board Spending Decisions CRCA 088/2015 of December 17, 2015, and CRD 432/2015, of January 4, 2016, to be paid in two equal installments, by June 30, 2016 and December 30, 2016, to stockholders on the Company’s Nominal Share Registry on December 30, 2015, and allocated as part of the mandatory minimum dividend, the Executive Board to obey the periods and to decide the places and processes of payment (the shares began to trade ‘ex–’ these rights on January 4, 2016); and

 

  R$ 433,968,000 in the form of dividends for the 2015 business year, to stockholders whose names were on the Company’s nominal share registry on April 29, 2016, the date on which the Ordinary and Extraordinary General Meetings were held this year; and

 

  b) R$ 622,529,000 to be held in Stockholders’ equity in the Reserve for mandatory dividend not distributed, to be paid as and when the Company’s financial situation permits;

 

  c) R$ 1,250,853,000 to be held in Stockholders’ equity in the Retained earnings reserve, to provide funding for the Company’s planned investments planned for 2016, in accordance with a capital budget; and

 

  d) R$ 20,696,000 to be held in Stockholders’ equity in the Tax incentives reserve, for tax incentive gains obtained in 2015 as a result of investments in the region of Sudene

 

  the other terms related to the payments of dividends decided in the Ordinary and Extraordinary General Meetings of Stockholders held concurrently on April 29, 2016 being unchanged.

The members of the Audit Board, after carefully analyzing the said proposal and further taking into account that the applicable rules governing the subject have been complied with, are of the opinion that the proposal should be approved by the said General Meeting of Stockholders.

Belo Horizonte, November 11, 2016.

 

Signed:   

Edson Moura Soares

Newton Brandão Ferraz Ramos

Bruno Cirilo Mendonça de Campos

  

Manuel Jeremias Leite Caldas

Rafael Amorim de Amorim

 

  

 

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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20. EARNINGS RELEASE: 2015 RESULTS

 

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2015 RESULTS

CEMIG REPORTS

2015 NET INCOME OF

R$ 2.469 BILLION

Highlights

 

  Cash flow, as measured by Ebitda: R$ 4.9 billion in 2015

 

  2015 Net revenue R$ 21.2 billion

 

  R$ 1.7 billion contribution from CVA/Other financial tariff components in 2015

 

  Gain on Aliança stockholding transaction R$ 729 million in 2015

 

  R$ 1.2 billion provision for loss on investments in the year

 

Indicators (GWh)

   2015      2014      Change %  

Electricity sold, GWh (excluding CCEE)

     56,904         63,470         –10.35   

Indicators – R$ ’000

   2015      2014      Change %  

Sales on the CCEE

     2,425         2,348         3.28   

Net debt

     11,732         11,610         1.05   

Gross revenue

     32,842         25,165         30.51   

Net revenue

     21,292         19,540         8.97   

Ebitda (IFRS)

     4,932         6,381         -22.71   

Net income

     2,469         3,137         -21.29   

Profit per share

     1.96         2.49         -21.29   

Ebitda margin

     22.72%         32.66%         -9.94p.a.   

 

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Conference call

Publication of 2015 results

Video webcast and conference call

March 30, 2016 – Wednesday – at 11 am (Brasília time)

This transmission on Cemig’s results will have simultaneous translation into English and can be seen in real time by Video Webcast, at http://ri.cemig.com.br or heard by conference call on:

+ 55 (11) 2188-0155 (1st option) or

+ 55 (11) 2188-0188 (2nd option)

Password: CEMIG

 

Playback of Video Webcast:

Site:

http://ri.cemig.com.br

Click on the banner and download.

Available for 90 days

  

Conference call – Playback:

Telephone: (+55-11) 2188-0400

Password:

CEMIG Português

Available from March 30 to April 13, 2016

Cemig Investor Relations

http://ri.cemig.com.br/

ri@cemig.com.br

Tel.:(+55-31) 3506-5024

Fax:(+55-31) 3506-5025

Cemig’s Executive Investor Relations Team

 

Chief Finance and Investor Relations Officer

Fabiano Maia Pereira

 

General Manager, Investor Relations

Antônio Carlos Vélez Braga

 

Manager, Investor Market

Robson Laranjo

 

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Contents

 

CONFERENCE CALL

     59   

CEMIG INVESTOR RELATIONS

     59   

CEMIG’S EXECUTIVE INVESTOR RELATIONS TEAM

     59   

CONTENTS

     60   

DISCLAIMER

     61   

CEMIG STOCK PRICE PERFORMANCE

     62   

CEMIG: LONG TERM RATINGS

     63   

ADOPTION OF IFRS

     64   

CEMIG’S CONSOLIDATED ELECTRICITY MARKET

     66   

THE ELECTRICITY MARKET OF CEMIG D

     68   

THE ELECTRICITY MARKET OF CEMIG GT

     70   

PHYSICAL TOTALS OF TRANSPORT AND DISTRIBUTION – MWH

     71   

QUALITY INDICATORS – SAIDI AND SAIFI

     71   

CONSOLIDATED OPERATIONAL REVENUE

     72   

TAXES AND CHARGES APPLIED TO REVENUE

     74   

OPERATIONAL COSTS AND EXPENSES

     75   

FINANCIAL REVENUE (EXPENSES)

     80   

EBITDA

     81   

DEBT

     82   

THE CEMIG GROUP’S PORTFOLIO OF GENERATION ASSETS

     84   

FINANCIAL STATEMENTS SEPARATED BY COMPANY AND BY OPERATIONAL SEGMENT

     85   

GENERATING PLANTS

     87   

GENERATION PLANTS: CONCESSION CONTRACT EXPIRY PERIODS

     88   

EXCHANGE OF SHAREHOLDERS’ DEBENTURES OWNED BY AGC ENERGIA FOR SHARES IN CEMIG

     89   

GENERATION: ANNUAL PERMITTED REVENUE (RAP)

     91   

APPENDICES

     92   

 

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Disclaimer

Certain statements and estimates in this material may represent expectations about future events or results, which are subject to risks and uncertainties that may be known or unknown. There is no guarantee that the events or results will take place as referred to in these expectations.

These expectations are based on the present assumptions and analyses from the point of view of our management, in accordance with their experience and other factors such as the macroeconomic environment, market conditions in the electricity sector, and expected future results, many of which are not under Cemig’s control.

Important factors that could lead to significant differences between actual results and the projections about future events or results include Cemig’s business strategy, Brazilian and international economic conditions, technology, Cemig’s financial strategy, changes in the electricity sector, hydrological conditions, conditions in the financial and energy markets, uncertainty on our results from future operations, plans and objectives, and other factors. Due to these and other factors, Cemig’s results may differ significantly from those indicated in or implied by such statements.

The information and opinions herein should not be understood as a recommendation to potential investors, and no investment decision should be based on the veracity, currentness or completeness of this information or these opinions. None of Cemig’s professionals nor any of their related parties or representatives shall have any liability for any losses that may result from use of the content of this material.

To evaluate the risks and uncertainties as they relate to Cemig, and to obtain additional information about factors that could give rise to different results from those estimated by Cemig, please consult the section on Risk Factors included in the Reference Form filed with the Brazilian Securities Commission – CVM – and in the 20-F form filed with the U.S. Securities and Exchange Commission – SEC.

 

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Cemig stock price performance

 

Security

   Ticker      Currency    Close of
2015
     Close of
2014
     Change in the
period %
 

Cemig PN

     CMIG4       R$      5.97         12.40         -51.86%   

Cemig ON

     CMIG3       R$      6.28         13.04         -51.84%   

ADR PN

     CIG       US$      1.46         4.60         -68.38%   

ADR ON

     CIG.C       US$      1.74         5.11         -65.96%   

Ibovespa

     Ibovespa       —        43,349         50,007         -13.31%   

IEEX

     IEEX       —        24,803         27,161         -8.68%   

 

Source: Economática.

Trading volume in Cemig’s preferred shares (CMIG4) totaled R$ 10.93 billion in full-year 2015, a daily average of R$ 44.46 million. At this level, Cemig continues to be one of the most liquid companies in the Brazilian electricity sector, and one of the most traded in the Brazilian capital markets.

On the New York Stock Exchange, the volume traded in ADRs for Cemig’s preferred shares (CIG) in full-year 2015 was US$ 3.11 billion. We see this as reflecting recognition by the investor market of Cemig as a global investment option.

The São Paulo stock exchange Ibovespa index was down 13.31% in 2015, closing the year at 43,349 points. The negative result directly reflects Brazil’s current adverse economic phase.

Cemig’s shares underperformed the Ibovespa. Over the year the price of Cemig’s common shares (Cemig ON) declined 51.84%, and the preferred stock (Cemig PN) was down 51.86%. A major factor adversely affecting Cemig’s stock price was the conclusion, with a judgment against Cemig, of the legal action on the Jaguara Hydroelectric Plant in the Higher Appeal Court (STJ), even though the case has now been taken to the Federal Supreme Court on an appeal. Other factors affecting the stock price in the year included: designation by the Mining and Energy Ministry (published September 15), of Cemig GT as responsible for operation of the São Simão hydroelectric plant under the quota regime; the fall in electricity consumption; the water supply crisis affecting the country; and the country’s macroeconomic situation.

 

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Cemig: long term ratings

This table shows credit risk ratings and outlook for Cemig’s companies as provided by the principal rating agencies:

Brazilian ratings:

 

Agency

   Cemig    Cemig D    Cemig GT
     Rating   Outlook    Rating   Outlook    Rating   Outlook

Fitch

   AA–(bra)   Negative    AA–(bra)   Negative    AA–(bra)   Negative

S&P

   brA   Negative    brA   Negative    brA   Negative

Moody’s

   A2.br   Negative    A2.br   Negative    A2.br   Negative

Global ratings:

 

Agency

   Cemig    Cemig D    Cemig GT
     Rating    Outlook    Rating    Outlook    Rating    Outlook

S&P

   BB–    Negative    BB–    Negative    BB–    Negative

Moody’s

   Ba3    Negative    Ba3    Negative    Ba3    Negative

 

(Fitch gives only Brazilian – not global – ratings.)

On February 25, 2016, Moody’s downgraded its Brazilian ratings for Cemig, its wholly-owned subsidiaries Cemig D and Cemig GT, and their debenture issues from Aa2.br to A2.br; and their global ratings from Ba1 to Ba3, changing the outlook to negative.

 

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Impact on the financial statements arising from the conclusions of the independent investigation into Belo Monte

Based on the conclusions and results identified by the internal independent investigation, which resulted in an adjustment reported in Nesa of R$ 183 million, on December 31, 2015 Cemig recorded an adjustment of R$ 23 million in the account line Investments, with counterpart in the Profit and loss account in the line Equity gain (loss) from subsidiaries, comprising: R$ 21 million arising from the adjustment made by Cemig GT, and R$ 2 million from the adjustment made by Light S.A. – in accordance with the requirements of IAS-8 –Accounting Policies, Changes in Accounting Estimates and Errors.

Considering that the independent internal investigation was concluded on a date subsequent to the approval of issuance of the financial statements for the year ended December 31, 2015 and the interim accounting information for the periods ended March 31 and June 30, 2016, the Management of Cemig and Cemig GT concluded that it was necessary to re-present the financial statements referred to and the Earnings Release.

Adoption of IFRS

The results presented below are prepared in accordance with the new Brazilian accounting rules, which embody a process of harmonization between Brazilian accounting rules and IFRS (International Financial Reporting Standards).

 

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PROFIT AND LOSS ACCOUNTS

 

Consolidated – R$ ’000

   2015     2014     Change %  

REVENUE

     21,292,211        19,539,578        8.97   

OPERATIONAL COSTS

      

Personnel

     (1,435,001     (1,252,458     14.57   

Employees’ and managers’ profit shares

     (137,364     (249,369     -44.92   

Post-retirement liabilities

     (156,009     (211,916     -26.38   

Materials

     (69,522     (98,660     -29.53   

Raw materials and inputs for production of electricity

     (83,723     (282,447     -70.36   

Outsourced services

     (899,470     (953,033     -5.62   

Electricity purchased for resale

     (9,541,940     (7,428,381     28.45   

Depreciation and amortization

     (834,830     (800,918     4.23   

Operational provisions

     (1,401,455     (580,720     141.33   

Charges for use of national grid

     (998,756     (744,431     34.16   

Gas bought for resale

     (1,050,925     (254,488     312.96   

Infrastructure construction costs

     (1,251,836     (941,795     32.92   

Other operational expenses, net

     (457,159     (651,993     -29.88   
  

 

 

   

 

 

   

 

 

 

TOTAL COST

     (18,317,990     (14,450,609     26.76   

Equity gain (loss) in subsidiaries

     392,990        210,484        86.7   

Fair value gain (loss) on stockholding transaction

     729,442        —          —     

Gain (loss) on combination of businesses

     —          280,945        —     

Operational profit before Financial revenue (expenses) and taxes

     4,096,653        5,580,398        -26.59   

Financial revenues

     1,469,277        592,684        147.90   

Financial expenses

     (2,204,344     (1,693,672     30.15   
  

 

 

   

 

 

   

 

 

 

Pretax profit

     3,361,586        4,479,410        -24.95   

Current and deferred income tax and Social Contribution tax

     (892,583     (1,342,507     -33.51   
  

 

 

   

 

 

   

 

 

 

NET INCOME FOR THE PERIOD

     2,469,003        3,136,903        -21.29   
  

 

 

   

 

 

   

 

 

 

Interest of the controlling stockholders

     2,468,500        3,136,639     

Interest of non-controlling stockholder

     503        264     
  

 

 

   

 

 

   
     2,469,003        3,136,903        -21.29   
  

 

 

   

 

 

   

NET INCOME FOR THE PERIOD

     2,491,878        3,136,903        -20.56   
  

 

 

   

 

 

   

Fair value gain (loss) on stockholding transaction

     (573,182     —       

Transmission indemillionity revenue

     —          (235,421  

Employment-law provision – 2012 annual salary increase

     —          84,091     

Equity method less – Madeira Energia

     —          167,022     

Gain (loss) on combination of businesses – Gasmig

     —          (185,424  
  

 

 

   

 

 

   

ADJUSTED NET INCOME FOR THE PERIOD

     1,895,821        3,125,205        -39.34   

 

* AFAC = Advance against future capital increase.

 

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Cemig’s consolidated electricity market

The Cemig Group sells electricity through its distribution company, Cemig Distribuição (‘Cemig D’), its generation and transmission company Cemig Geração e Transmissão (‘Cemig Generation and Transmission’, or ‘Cemig GT’), and the wholly-owned subsidiaries Horizontes Energia, Termelétrica Ipatinga (up to January 2015), Sá Carvalho, Termelétrica de Barreiro, Cemig PCH, Rosal Energia and Cemig Capim Branco Energia (up to March 2015).

Total sales reported for Cemig’s consolidated electricity market comprises sales to:

 

(I) captive consumers in Cemig’s concession area in the State of Minas Gerais;

 

(II) Free Consumers in both the State of Minas Gerais and other States of Brazil, in the Free Market (Ambiente de Contratação Livre, or ACL);

 

(III) other agents of the electricity sector – traders, generators and independent power producers, also in the ACL;

 

(IV) Distributors, in the Regulated Market (Ambiente de Contratação Regulada, or ACR); and

 

(V) the Wholesale Trading Chamber (Câmara de Comercialização de Energia Elétrica, or CCEE)

( – eliminating transactions between companies of the Cemig Group).

In 2015 this Cemig group sold a total volume of 56,903,594 MWh, which was 10.3% less than in 2014.

Overall, electricity consumption in 2015 was affected by adverse Brazilian political and economic circumstances; and, in the captive market, by the successive increases in electricity rates charged to consumers, associated with application of the ‘Tariff Flag’ system – resulting in significant increases in consumers’ electricity invoices.

Sales to distributors, traders, other generating companies and independent power producers totaled 10,831,194 MWh – or 23.4% less than in 2014.

 

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In December 2015 the Cemig Group invoiced 8,079,771 customers – a growth of 0.9% in the customer base in the year since December 2014. Of these, 8,079,719 were final consumers (including Cemig’s own consumption); and 52 were other agents of the Brazilian electricity sector.

This chart shows the breakdown of sales to final consumers of the Cemig Group in the quarter, by consumer category:

 

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Total consumption of electricity (GWh)

 

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The volume of electricity sold to final consumers of Cemig in 2015 was 10.35% lower than in 2014.

 

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Consolidated

   MWh      Change, %      Average
price

2015 R$
     Average
price

2014 R$
 
   2015      2014           

Residential

     9,829,992         10,013,757         –1.84         742.38         517.60   

Industrial

     22,968,931         26,025,584         –11.74         251.67         184.18   

Commercial, Services and Others

     6,433,728         6,395,473         0.60         614.94         435.57   

Rural

     3,379,734         3,390,096         –0.31         416.18         267.97   

Public authorities

     892,368         891,454         0.10         613.77         427.55   

Public lighting

     1,325,525         1,298,047         2.12         401.81         275.72   

Public service

     1,204,461         1,272,365         –5.34         448.66         289.33   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Subtotal

     46,034,739         49,286,776         –6.60         435.80         299.83   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Own consumption

     37,661         37,590         0.19         —           —     

Wholesale supply to agents in Free and Regulated Markets ( * )

     10,831,194         14,146,109         –23.43         197.90         159.16   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

     56,903,594         63,470,475         –10.35         395.87         271.50   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

(*) Includes Regulated Market Electricity Sale Contracts (CCEARs) and ‘bilateral contracts’ with other agents.

The electricity market of Cemig D

Electricity billed to captive clients and electricity transported for Free Clients and distributors with access to Cemig D’s networks totaled 42,124 GWh in 2015, or 5.3% less than in 2014.

There are two components of this reduction: Consumption by the captive market 2.1% lower in the year; and use of the network by Free Clients 10.2% lower by volume.

Overall, consumption of electricity in 2015 was affected by adverse Brazilian political and economic circumstances; and, in the captive market, by the successive increases in electricity rates charged to consumers, associated with application of the ‘Tariff Flag’ system, resulting in significant increases in consumers’ electricity invoices.

In December 2015 Cemig billed 8,079,645 consumers, or 0.9% more than in December 2014. Of this total, 422 are Free Consumers using Cemig D’s distribution network.

Comments on the various consumer categories:

 

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Residential

Residential consumption was 17.27% of the total volume of electricity transacted by Cemig, and totaled 9,830 GWh, or 1.84% less than in 2014.

Average monthly consumption per consumer in 2015 was 126.5 KWh/month, or 3.6% less than the average in 2014 (131.2 KWh/month) – this is the first year-on-year reduction in this variable since 2008.

Industrial

Electricity used by captive industrial clients was 7.84% lower in total volume than in 2014, and the total of electricity transported for Free Clients was 10.0% lower.

The main Brazilian and international macroeconomic factors that could have influenced consumption by the industrial sector are:

 

In Brazil: Retraction of domestic demand, accumulation of inventories, idle manufacturing capacity, loss of competitiveness, reduction of the number of employees and/or reduction of the use of labor (e.g. forced vacations, shorter work shifts), lack of entrepreneur confidence, low levels of public and private investment, uncertainties in the Brazilian political and economic situation, high cost of corporate credit due to high interest rates, and banks being more selective in granting loans.

 

International: Lower exports due to lower external demand.

In manufacturing there was a reduction in consumption across all sectors – led by: steel (–2.0%), non-metallic minerals (–7.7%), chemicals (–9.6%), ferroalloys (–44.6%), non-ferrous metals (–10.8%), auto industry (–16.1%), and textiles (–11.9%).

The year-on-year comparison is affected by two factors in 2014: (i) a group of Free Clients migrated to the national grid; and (ii) some Free Clients stopped using the Cemig D network.

 

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The electricity market of Cemig GT

One factor in Cemig GT’s total sales volume in 2015 was termination of concession of plants. Following this change, payment for the output from these plants was redirected to the Physical Guarantee Quota regime, and to settlement on the spot market.

Cemig GT’s market comprises sales of power as follows:

 

(I) sales in the Free Market, to Free Clients, in Minas Gerais or other States;

 

(II) sales in the Free Market to other agents in the electricity sector – traders, generators and independent power producers ;

 

(III) sales to electricity distributors (in the Regulated Market); and

 

(IV) sales in the CCEE (Electricity Trading Chamber).

The total supply billed by Cemig GT in 2015 was 29,966 GWh, or 15.6% less than in 2014.

Free Clients consumed 18,832 GWh in 2015, 11.8%% less than in 2014, reflecting:

 

termination of contracts with clients at the end of 2014 that were not renewed with Cemig GT; and

 

reduction of consumption by clients due to weak demand in the Brazilian economy, with lower domestic demand for goods and services, also affected by the speed of recovery of the international market.

Cemig GT added 28 new free market clients in 2015, mainly outside Minas Gerais.

Trading of electricity to other agents in the electricity sector in the Free Market totaled 6,443 GWh in 2015, 24.5% less than in 2014; and the total sold in the Regulated Market was 4,690 GWh, 16.9% less than in 2014.

 

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Physical totals of transport and distribution – MWh

 

Description

   MWh      Change, %  
   2015      2014     

Total energy carried

     48,067,296         49,899,186         –3.67   

Electricity transported for distributors

     361,487         355,204         7.84   

Electricity transported for free clients

     15,315,122         16,736,754         –8.47   

Own load

        

Consumption by captive market

     26,453,478         27,010,669         –2.06   

Losses in distribution network

     5,933,209         5,816,560         2.01   

QUALITY INDICATORS – SAIDI AND SAIFI

Cemig is continuously taking action to improve operational management, organization of the logistics of its emergency services, and its permanent regime of preventive inspection and maintenance of substations, lines and distribution networks. It also invests in training of its staff for improvement of qualifications, state-of-the-art technologies, and standardization of work processes, aiming to uphold the quality of electricity supply, and as a result maintain the satisfaction of clients and consumers.

The charts below show Cemig’s indicators for duration and frequency of outages – SAIDI (System Average Interruption Duration Index, in hours), and SAIFI (System Average Interruption Frequency Index, in number of outages), since January 2014. These results reflect the investments made by the company in preventive maintenance, such as cleaning of power line pathways, tree pruning, replacement of cross-arms, maintenance of structures, replacement of poles, transformers and cables, and other work such as network shielding, and overhaul and interconnection of circuits. Another important initiative is the change of technological level, with systematic investment in automation of the electricity system, which will enable automatic remote re-establishment of supply after outages.

 

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Consolidated operational revenue

Revenue from supply of electricity:

Total revenue from supply of electricity to final consumers in 2015 was R$ 22.526 billion, or 30.72% more than the total revenue of R$ 17.232 billion in 2014.

Final consumers

Total revenue from electricity sold to final consumers, excluding Cemig’s own consumption, was R$ 20.319 billion in 2015 – or 36.17% more than the total of R$ 14.922 billion in 2014.

The main factors affecting revenue were:

 

  The Annual Tariff Adjustment for Cemig D, with average effect of 14.76% on consumer tariffs, effective from April 8, 2014 (full effect in 2015).

 

  The Extraordinary Tariff Adjustment for Cemig D, which resulted in an average impact on consumers’ tariffs of 28.76%, applicable from March 2, 2015.

 

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The Annual Tariff Adjustment effective from April 8, 2015, with average effect on consumer tariffs of 7.07%.

 

Creation, in 2015, of the ‘Tariff Flag’ mechanism – at the following rates per 100 kWh consumed: (i) as from January 2015, R$ 1.50 per 100kWh for the Yellow Flag tariff, and R$ 3.00 for the Red Flag tariff; (ii) as from March 2015, R$ 2.50 per 100kWh for the Yellow Flag tariff and R$ 5.50 for the Red Flag tariff; and finally (iii) from September 2015, R$ 2.50 for the Yellow Flag tariff and R$ 4.50 for the Red Flag tariff. In practice, the Red Flag rates were in effect for the whole of 2015.

 

Total volume of electricity sold in 2015 was 10.35% lower than in 2014.

 

     R$      Change %      Average price
2015 R$
     Average price
2014 R$
     Change %  
   2015     2014              

Residential

     7,297,557        5,183,149         40.79         742.38         517.60         43.43   

Industrial

     5,780,660        4,793,414         20.60         251.67         184.18         36.64   

Commercial, Services and Others

     3,956,344        2,785,659         42.03         614.94         435.57         41.18   

Rural

     1,406,590        908,436         54.84         416.18         267.97         55.31   

Public authorities

     547,707        381,144         43.70         613.77         427.55         43.55   

Public lighting

     532,603        357,892         48.82         401.81         275.72         45.73   

Public service

     540,338        368,136         46.79         448.66         289.33         55.07   
  

 

 

   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Subtotal

     20,061,849        14,777,830         35.76         435.80         299.83         45.35   

Supply not yet invoiced, net

     256,753        144,162         78.10         —           —           —     

Wholesale supply to other concession holders (*)

     2,358,466        2,251,431         4.75         217.75         159.16         24.34   

Wholesale supply not yet invoiced, net

     (150,793     58,682         —           —           —           —     
  

 

 

   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

     22,526,275        17,232,105         30.72         395.87         271.50         45.81   
  

 

 

   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

(*) Includes Regulated Market Electricity Sale Contracts (CCEARs) and ‘bilateral contracts’ with other agents.

Revenue from Use of Distribution Systems (the TUSD charge)

The revenue of Cemig D (Distribution) from the TUSD in 2015 was R$ 1.465 billion, or 71.35% higher than in 2014 (R$ 855 million). This reflects the impact of the tariff adjustments in 2015 – an increase of 96.21% for Free Consumers. The 2015 increases were mainly due to passing through of the CDE (Energy Development Account) amounts to the tariffs paid by consumers. The effect of the increase in tariffs was partially offset by the effect of lower activity in the industrial sector – which consumed 11.74% less electricity, year-on-year, in the period.

 

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Revenue from transactions in the Wholesale Trading Chamber (CCEE)

Revenue from transactions in electricity on the CCEE was R$ 2.425 billion in 2015, compared to R$ 2.348 billion in 2014 – an increase of 3.28%. The components of this figure were: Higher total volume sold, at 7,157,641 MWh in 2015 – compared to 3,354,224 MWh in 2014; and the Spot Price (Preço de Liquidação de Diferenças – PLD) in the wholesale market 58.31% lower (at R$ 287.20/MWh in 2015, vs. R$ 688.89/MWh in 2014).

CVA and Other financial components in the tariff adjustment calculation

Due to the alteration in the concession contracts of the distributors, Cemig started to recognize certain balances of non-controllable costs to be passed through to Cemig D’s next tariff adjustment – these represented an operational revenue of R$ 1.704 billion in 2015, compared to R$ 1.107 billion in 2014.

Revenue from supply of gas

Cemig reports revenue from supply of gas totaling R$ 1.667 billion in 2015, compared to R$ 422 million in 2014 – an increase of 295.02%. The variation basically reflects the fact that figures for Gasmig began to be consolidated into Cemig’s results in October 2014.

Taxes and charges applied to Revenue

The sector charges that are effectively deductions from reported revenue were 105.28% higher in 2015, at R$ 11.549 billion – compared to R$ 5.626 billion in 2014. The increase mainly reflects the higher charges under the Energy Development Account (CDE), and also the Tariff Flag charges.

The Energy Development Account – CDE

Payments to the Energy Development Account (CDE) are decided by an Aneel Resolution. The expenses included are: concession indemillionities, tariff subsidies, the subsidy for balanced tariff reduction, the low-income consumer subsidy, the coal consumption subsidy, and the Fuels Consumption Account (CCC).

 

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Charges for the CDE in 2015 were R$ 2.870 billion, compared to R$ 211 million in 2014. This is the result of the new budget for the CDE in 2015, in which Aneel increased the annual amount to be paid by Cemig D, which is passed through to the consumer in the Sector Charges component of tariffs.

Consumer charges – the ‘Tariff Flag’ system

In 2015, with the Tariff Flag mechanism coming into force, Cemig had an account under Consumer Charges related to the Tariff Flag payments, totaling R$ 1.067 billion.

The ‘Flag Account’ (Conta Bandeira) was created on February 5, 2015, to manage the funds collected from captive customers of utilities holding electricity distribution concessions and permissions – these funds are paid, on account of the CDE, directly to the Flag Account. The Wholesale Trading Chamber (CCEE) passes the proceeds through to distribution agents, based on the difference between the realized amounts of costs of thermal generation and the exposure to spot prices, and the amount covered by the tariff.

The other deductions from revenue are taxes, calculated as a percentage of amounts invoiced. Thus their variations are, substantially, proportional to the changes in revenue.

Operational costs and expenses

Operational costs and expenses, excluding Financial revenue (expenses), totaled R$ 18.318 billion in 2015, compared to R$ 14.451 billion in 2014 – an increase of 26.76%.

 

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The following paragraphs comment on the main variations:

Electricity purchased for resale

The expense on electricity bought for resale in 2015 was R$ 9.542 billion, or 28.46% more than in 2014 (R$ 7.428 billion). Over the course of 2015, this cost has been more than 50% of the Company’s total costs. The main factors in the higher figure are:

Cemig D:

 

  Expense on electricity acquired in auctions 20.74% higher, at R$ 4.098 billion, in 2015, compared to R$ 3.394 billion in 2014 – arising mainly from availability contracts, due to the expenditure on fuel for generation by the thermal plants.

 

  Expense on electricity from Itaipu Binacional was 108.92% higher. This amount is indexed to the US dollar, and was R$ 1.734 billion in 2015, compared to R$ 830 million in 2014. This reflects both an increase in the tariff – which was US$ 26.05/kW-month in 2014, and rose to US$ 38.07/kW-month as from January 2015 – and also the increase in the dollar exchange rate against the Real from 2014 to 2015. The average exchange rate used for the dollar in invoices in 2015 was R$ 3.38, compared to R$ 2.35 in 2014 – an increase of 43.83%.

 

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Purchases of supply in the short-term market were 24.67% lower – at R$ 849 million in 2015, compared to R$ 1.127 billion in 2014, due to the lower cost of electricity in the wholesale market in 2015.

Cemig GT:

The expense on electricity bought for resale in 2015 was R$ 2.601 billion, or 53.72% more than in 2014 (R$ 1.692 billion). The difference mainly reflects electricity bought for resale 48.10% higher in 2015 (at 15,273,685 MWh), than in 2014 (10,313,226 MWh) – reflecting lower generation capacity, with the termination of the concessions of some plants.

Operational provisions

Operational provisions in 2014 totaled R$ 1.401 billion, compared to R$ 581 million in 2014, an increase of 141.14%. This change mainly reflected a provision of R$ 1.079 billion made in 2015 for losses relating to the put options for the equity interests in Parati and a provision of R$ 119 million for SAAG – Santo Antonio Investment.

 

a) Put options for Units in FIP Melbourne

Option contracts for sale of Units (‘put options’) were signed between Cemig GT and the pension plan entities that participate in the investment structure of SAAG, which those entities may exercise in the 84th month from June 2014. The exercise price of the put options will correspond to the amount invested by each pension plan company in the Investment Structure, updated pro rata temporis by the IPCA inflation index (Índice National de Preços ao Consumidor Amplo, published by the Brazilian Geography and Statistics Institute – IBGE), plus 7% per year, less such dividends and Interest on Equity as have been paid by SAAG to the pension plan entities.

To decide the method to be used for measuring the fair value of the put options, since Madeira Energia is an unlisted company, the Company adopted the discounted cash flow method to measure the fair value of those options. The fair value of this option has been calculated on the basis of the estimated exercise price on the day of exercise of the option, less the fair value of the shares that are the subject of the put option, also estimated for the date of exercise, brought to present value at the interim reporting date, at the effective rate of 8% p.a. (discounting inflation effects). Based on the studies made, the amount of R$ 148 million is recorded in Cemig GT as the best estimate of the loss on these options.

 

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b) FIP Redentor

Cemig has granted to Fundo de Participações Redentor, which is a stockholder of Parati, an option to sell the totality of the shares which that fund holds in Parati, exercisable in May 2016. The price of the option is calculated using the sum of the value of the injections of capital by the fund into Parati, plus the running expenses of the fund, less any Interest on Equity, and dividends, distributed by Parati. The exercise price is subject to monetary updating by the CDI (Interbank CD) Rate plus financial remuneration at 0.9% per year.

For the purposes of determining the method to be used to measure the fair value of this option, the Company observed the daily trading volume of the shares of Light, and also the fact that such option, if exercised by the Fund, will require the sale to the Company, in a single transaction, of shares in Light in a quantity higher than the daily exchange trading averages. Thus, the Company has adopted the discounted cash flow method for measurement of the fair values of the option. The fair value of this option has been calculated on the basis of the estimated exercise price on the day of exercise of the option, less the fair value of the underlying shares, also estimated for the date of exercise, brought to present value at the interim reporting date, at the effective rate of 7.5% p.a. (discounting inflation effects).

Based on the studies carried out, a liability in the amount of R$ 1.245 billion has been recorded in the financial statements, for the best estimate of the loss on this option.

 

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Personnel

Personnel expenses were R$ 1.435 billion in 2015, compared to R$ 1.252 billion in 2014, an increase of 14.62%. This arises mainly from the following items:

 

  Salary increases, under the Collective Agreement, of 6.34%, coming into effect in November 2014 (full effect in 2015).

 

  Salary increases of 3% from March 2015, as a result of the collective negotiation decided by the courts on application from organizations representing the employees.

 

  Salary adjustments applied at the 10.33%, from November 2015, under the Collective Agreement.

Cemig: number of employees

 

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Gas bought for resale

The expense that Cemig reports for Gas bought for resale was R$ 1.051 billion in 2015, vs. R$ 254 million in 2014. Cemig started consolidating the results of Gasmig in October 2014, after Cemig acquired the 40% interest in Gasmig held by Petrobras.

 

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Raw materials and inputs for production of electricity

The expense on raw material and inputs for production of electricity in 2015 was R$ 84 million, compared to R$ 282 million in 2014 – a reduction of 70.21%. This reflects the temporary stoppage of the Igarapé thermal plant in 2015, due to the need for maintenance and installation of new equipment, and the federal government’s decision to stop generation by thermal plants that have the highest Variable Unit Cost (CVU).

Financial revenue (expenses)

 

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Cemig reports net financial expenses of R$ 735million in 2015, compared to net financial expenses of R$ 1.101 billion in 2014. The main factors are:

 

  Recognition, as from 2015, of the foreign exchange variation and monetary updating on the balances of the CVA and the Other financial components elements of tariff adjustments, representing and increase in financial revenue of R$ 68 million in 2015.

 

 

A higher gain on updating of financial assets of the Remuneration Base of Assets (Base Regulatória de Remuneração, or BRR): R$ 606 million in 2015, vs. R$ 58 million in 2014. In November 2015 Aneel ordered an alteration of the indexor of the BRR, from the IGP-M inflation index to the IPCA inflation index. This change generated an updating adjustment backdated to January 2013. The effect of this change in financial revenue recorded in December 2015 was R$ 143 million. This difference also arises from the higher variation in the

 

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  present indexor of the BRR – the IPCA index – which was 10.67% in 2015, compared to variation of 3.69% in the IGP-M index in 2014. Additionally, in June 2014 there was a reversal in the monetary updating of the BRR, totaling R$ 110 million, due to the final, definitive, homologation of the value of the BRR of Cemig D.

 

Recognition, starting in 2015, of monetary updating on deposits linked to legal actions, representing a gain in financial revenue of R$ 212 million in 2015.

 

Higher expenses of exchange rate variations on loans and financings, and on Itaipu Binacional, which totaled R$ 172 million in 2015, vs. R$ 26 million in 2014. This mainly reflects the effects on Cemig D of the higher variation of the US dollar in 2015 (47.01% in full-year 2015, compared to 13.39% in 2014);

 

Charges for loans and financings 48.44% higher, at R$ 1.382 billion in 2015, compared to R$ 931 million in 2014. This mainly reflects higher debt indexed to the CDI Rate; and also the higher CDI rate itself, in 2015 – representing 13.23% in the year, compared to 10.81% in 2014.

 

Expense on monetary updating of loans and financings 42.80% higher, at R$ 387 million in 2015, compared to R$ 271 million in 2014. This is mainly the effect of higher variation in the IPCA inflation index in the period (10.67% in 2015, compared to 6.41% in 2014).

Ebitda

Cemig’s consolidated Ebitda in 2015 was 22.36% lower than in 2014. This mainly reflects operational costs and expenses (excluding depreciation and amortization) 28.08% higher in 2015 – an outstanding element of this expense being provisions totaling R$ 1.198 billion for losses on investments.

 

Ebitda – R$mn

   2015      2014      Change, %  

Profit (loss)

     2,469         3,137         -21.29   

+ Income tax and Social Contribution tax

     893         1,343         -33.51   

+ Net financial revenue (expenses)

     735         1,101         -33.24   

+ Depreciation and amortization

     835         801         4.24   
  

 

 

    

 

 

    

 

 

 

= Ebitda

     4,932         6,382         -22.72   
  

 

 

    

 

 

    

 

 

 

 

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DEBT

 

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The Company’s consolidated total debt on December 31, 2015 was R$ 15.167 billion, 12.27% more than at December 31, 2014.

 

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THE CEMIG GROUP’S PORTFOLIO OF GENERATION ASSETS

 

Cemig – generation portfolio, in MW*

 

Stage

   Hydro
plants
     Small
Hydro
Plants
     Wind
power
     Solar      Thermal
plants
     Total  

In operation

     7,195         257         158         31         144         7,785   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Under construction / contracted

     1,699         29         658         45         —           2,431   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

     8,894         286         816         76         144         10,216   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

* The amounts refer only to direct or indirect equity interests held by Cemig on December 31, 2015.

4Q15 HIGHLIGHTS:

Santo Antônio Hydroelectric Plant

Rotor 35 of the Santo Antônio Hydroelectric plant started operation in December. The original physical offtake guarantee level of 2,218 MW average was reached in September 2014.

 

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FINANCIAL STATEMENTS SEPARATED BY COMPANY AND BY OPERATIONAL SEGMENT

 

FINANCIAL STATEMENTS SEPARATED BY COMPANY: DECEMBER 31, 2015

 

R$ ’000

   Holding
Company
    CEMIG
GT
    CEMIG D     GASMIG     CEMIG
TELECOM
   
CARVALHO
    ROSAL     Other
subsidiaries
    Eliminations
/ transfers
    Total,
subsidiaries
    TAESA     LIGHT     MADEIRA     ALIANÇA
GERAÇÃO
    Other
jointly-
controlled
subsidiaries
    Eliminations
/ transfers
    Subsidiaries
and jointly-
controlled
subsidiaries
 

ASSETS

     16,319,138        15,348,364        16,191,234        2,054,460        317,346        152,827        129,487        264,987        (9,920,754     40,857,089        4,728,754        5,050,947        2,496,533        1,044,606        4,553,631        (7,847,490     50,884,070   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cash and cash equivalents

     256,484        283,703        318,834        33,746        5,015        1,254        1,082        24,514        —          924,632        130,575        196,844        29,996        31,394        126,019        —          1,439,460   

Accounts receivable

     —          1,008,021        2,785,980        88,774        16,172        5,774        3,617        5,568        (15,738     3,898,168        100,346        787,420        30,093        70,590        52,748        (14,715     4,924,650   

Securities – cash investments

     129,665        1,916,804        288,759        71,381        17,655        6,126        4,902        75,020        —          2,510,312        1,588        —          —          —          54,446        —          2,566,346   

Taxes

     995,131        142,328        1,227,384        59,741        17,255        136        449        685        —          2,443,109        309,497        410,182        67,323        2,568        13,523        —          3,246,202   

Other assets

     1,521,682        853,410        1,671,470        471,741        4,957        4,905        1,277        30,770        (973,122     3,587,090        154,536        840,753        151,648        27,017        375,566        (204,865     4,931,745   

Investments, PP&E, Intangible and Financial assets of concession

     13,416,176        11,144,098        9,898,807        1,329,077        256,292        134,632        118,160        128,430        (8,931,894     27,493,778        4,032,212        2,815,748        2,217,473        913,037        3,931,329        (7,627,910     33,775,667   

LIABILITIES AND STOCKHOLDERS’ EQUITY

     16,319,138        15,348,364        16,191,234        2,054,460        317,346        152,827        129,487        264,987        (9,920,754     40,857,089        4,728,754        5,050,947        2,496,533        1,044,606        4,553,631        (7,847,490     50,884,070   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Suppliers and supplies

     8,765        331,823        1,307,893        244,551        11,405        7,670        4,210        5,318        (20,482     1,901,153        22,102        472,122        144,636        16,528        171,518        (106,904     2,621,155   

Loans, financings and debentures

     —          7,739,072        7,020,042        368,398        39,023        —          —          2        —          15,166,537        1,860,409        2,468,539        1,451,202        —          1,215,707        —          22,162,394   

Interest on Equity, and dividends

     1,306,584        718,137        185,105        45,667        —          2,464        —          90        (951,232     1,306,815        5,012        43,966        —          —          21,779        (70,757     1,306,815   

Post-retirement liabilities

     303,191        721,470        2,228,710        —          —          —          —          —          —          3,253,371        —          10,436        —          —          —          —          3,263,807   

Taxes

     53,123        759,122        1,742,350        306,265        10,381        38,975        2,782        10,115        —          2,923,113        837,599        486,479        37,982        17,414        73,965        —          4,376,552   

Other liabilities

     1,663,777        394,928        1,011,285        167,028        87,531        792        674        9,580        (17,171     3,318,424        107,285        374,205        137,604        140,148        79,533        8,472        4,165,671   

STOCKHOLDERS’ EQUITY

     12,983,698        4,683,812        2,695,848        922,551        169,006        102,926        121,821        239,883        (8,931,869     12,987,676        1,896,347        1,195,200        725,109        870,516        2,991,129        (7,678,301     12,987,676   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Attributed to controlling stockholders

     12,983,698        4,683,812        2,695,848        918,573        169,006        102,926        121,821        239,883        (8,931,869     12,983,698        1,896,347        1,195,200        725,109        870,516        2,991,129        (7,678,301     12,983,698   

Interest of non-controlling stockholder

     —          —          —          3,978        —          —          —          —          —          3,978        —          —          —          —          —          —          3,978   

PROFIT AND LOSS ACCOUNT

                                

Net operational revenue

     292        7,377,198        12,386,671        1,394,725        122,569        58,197        51,800        169,056        (268,297     21,292,211        855,669        3,459,848        254,173        408,846        697,693        (231,129     26,737,311   

Operational costs and expenses

     (1,157,525     (4,133,629     (11,779,022     (1,235,867     (111,828     (41,877     (28,121     (59,477     229,356        (18,317,990     (121,383     (3,209,417     (216,366     (257,816     (511,512     22,209        (22,612,275
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Electricity purchased for resale

     —          (2,601,484     (6,992,822     —          —          (30,970     (13,551     (23,395     120,282        (9,541,940     —          (2,326,933     (50,617     (158,895     (53,562     148,842        (11,983,105

Charges for use of national grid

     —          (293,484     (813,313     —          —          —          (3,065     (1,179     112,285        (998,756     —          —          (53,100     (15,388     (271,035     59,542        (1,278,737

Gas bought for resale

           (1,050,925     —          —          —          —          —          (1,050,925     —          —          —          —          —          —          (1,050,925

Construction cost

     —          (146,030     (1,043,806     (62,000     —          —          —          —          —          (1,251,836     (17,060     (304,413     —          —          (3,817     —          (1,577,126

Personnel

     (31,895     (334,845     (999,655     (43,092     (15,431     (1,362     (1,221     (7,500     —          (1,435,001     (44,205     (110,654     (7,564     (10,064     (35,057     —          (1,642,545

Employee profit shares

     (4,816     (35,383     (94,815     —          (2,062     (139     (149     —          —          (137,364     (5,888     —          —          (1,467     (97     —          (144,816

Post-retirement liabilities

     (3,867     (30,939     (121,203     —          —          —          —          —          —          (156,009     —          —          —          —          —          —          (156,009

Materials

     (262     (99,312     (50,651     (1,830     (129     (368     (404     (314     25        (153,245     (20,764     (5,904     (1,631     (863     (2,961     —          (185,368

Outsourced services

     (10,991     (159,432     (697,484     (15,035     (25,491     (3,239     (5,112     (13,673     30,987        (899,470     (22,309     (155,676     (10,546     (22,133     (56,794     4,076        (1,162,852

Depreciation and amortization

     (1,601     (252,897     (443,766     (54,177     (48,968     (5,526     (4,391     (10,243     (13,261     (834,830     (1,296     (149,282     (48,076     (51,255     (75,112     (174,073     (1,333,924

Operational provisions

     (1,084,757     (106,443     (209,072     —          (1,181     —          (1     (1     —          (1,401,455     484        (92,148     (36,771     —          (1,124     —          (1,531,014

Other expenses, net

     (19,336     (73,380     (312,434     (8,808     (18,566     (273     (227     (3,173     (20,962     (457,159     (10,345     (64,407     (8,061     2,249        (11,953     (16,178     (565,854
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operational profit before Equity gains (losses) and Financial revenue (expenses)

     (1,157,233     3,243,569        607,649        158,858        10,741        16,320        23,679        109,579        (38,941     2,974,221        734,286        250,431        37,807        151,030        186,181        (208,920     4,125,036   

Equity gain (loss) in subsidiaries

     3,273,869        16,735          —          (27,769     —          —          1,343        (2,871,188     392,990        6,884        (41,183     (79,312     (455     (38,603     (345,732     (105,411

Gain on stockholding reorganization

       729,442          —          —          —          —          —          —          729,442        —          —          —          —          16,375        —          745,817   

Financial revenue

     65,180        204,741        1,148,437        23,082        4,054        2,966        4,545        16,272        —          1,469,277        333,487        446,993        94,983        13,711        26,705        —          2,385,156   

Financial expenses

     (36,024     (990,235     (1,129,969     (41,531     (5,794     (172     (85     (534     —          (2,204,344     (577,332     (612,626     (113,173     (21,877     (107,287     —          (3,636,639
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Profit before income and Social Contribution tax

     2,145,792        3,204,252        626,117        140,409        (18,768     19,114        28,139        126,660        (2,910,129     3,361,586        497,325        43,615        (59,695     142,409        83,371        (554,652     3,513,959   

Income tax and Social Contribution tax

     322,708        (887,979     (255,908     (23,339     (16,096     (5,392     (3,431     (23,146     —          (892,583     (104,542     (29,214     61,498        (13,788     (66,327     —          (1,044,956
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Profit (loss)

     2,468,500        2,316,273        370,209        117,070        (34,864     13,722        24,708        103,514        (2,910,129     2,469,003        392,783        14,401        1,803        128,621        17,044        (554,652     2,469,003   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Interest of the controlling stockholders

     2,468,500        2,316,273        370,209        116,567        (34,864     13,722        24,708        103,514        (2,910,129     2,468,500        392,783        14,401        1,803        128,621        17,044        (554,652     2,468,500   

Interest of non-controlling stockholder

     —          —          —          503        —          —          —          —          —          503        —          —          —          —          —          —          503   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     2,468,500        2,316,273        370,209        117,070        (34,864     13,722        24,708        103,514        (2,910,129     2,469,003        392,783        14,401        1,803        128,621        17,044        (554,652     2,469,003   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

85


LOGO

 

 

INFORMATION BY MARKET SEGMENT AT DECEMBER 31, 2015

 

R$ ’000

   ELECTRICITY     TELECOM     GAS     OTHERS     Eliminations     TOTAL  
   GENERATION     TRANSMISSION     DISTRIBUTION            

ASSETS OF THE SEGMENT

     13.381.523        4.880.161        17.738.194        317.346        2.529.757        2.986.477        (976.369     40.857.089   

ADDITIONS TO THE SEGMENT

     577.330        146.030        1.043.806        42.488        62.000        —          —          1.871.654   

INVESTMENTS IN JOINTLY-CONTROLLED SUBSIDIARIES

     5.750.963        2.423.084        1.546.960        —          —          23.840        —          9.744.847   

NET REVENUE

     7.046.513        518.671        12.386.671        122.569        1.394.725        91.358        (268.296     21.292.211   

COSTS

                

Electricity purchased for resale

     (2.669.371     —          (6.992.822     —          —          (29     120.282        (9.541.940

Charges for use of national grid

     (297.423     (305     (813.313     —          —          —          112.285        (998.756

Gas bought for resale

     —          —          —          —          (1.050.925     —          —          (1.050.925
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total operational costs

     (2.966.794     (305     (7.806.135     —          (1.050.925     (29     232.567        (11.591.621

OPERATIONAL COSTS AND EXPENSES

                

Personnel

     (224.197     (113.230     (999.655     (15.431     (43.092     (39.396     —          (1.435.001

Employees’ and managers’ profit shares

     (23.552     (12.119     (94.815     (2.062     —          (4.816     —          (137.364

Post-retirement liabilities

     (21.274     (9.664     (121.204     —          —          (3.867     —          (156.009

Materials

     (95.381     (4.969     (50.651     (129     (1.830     (310     25        (153.245

Outsourced services

     (142.931     (36.844     (697.484     (25.491     (15.035     (12.672     30.987        (899.470

Depreciation and amortization

     (273.053     —          (443.766     (48.968     (54.177     (14.866     —          (834.830

Operational provisions (reversals)

     (108.728     2.283        (209.072     (1.181     —          (1.084.757     —          (1.401.455

Construction costs

     —          (146.030     (1.043.806     —          (62.000     —          —          (1.251.836

Other operational expenses, net

     (60.692     (15.983     (312.434     (18.566     (8.808     (45.393     4.717        (457.159
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total cost of operation

     (949.808     (336.556     (3.972.887     (111.828     (184.942     (1.206.077     35.729        (6.726.369

OPERATIONAL COSTS AND EXPENSES

     (3.916.602     (336.861     (11.779.022     (111.828     (1.235.867     (1.206.106     268.296        (18.317.990

OPERATIONAL PROFIT BEFORE EQUITY GAIN (LOSS) IN SUBSID. AND FINANCIAL REV (EXP.)

     3.129.911        181.810        607.649        10.741        158.858        (1.114.748     —          2.974.221   

Equity gain (loss) in subsidiaries

     16.593        410.052        (6.408     (27.769     —          522        —          392.990   

Gain on stockholding reorganization

     729.442          —          —          —          —          —          729.442   

Financial revenues

     199.200        21.892        1.148.437        4.054        23.082        72.612        —          1.469.277   

Financial expenses

     (984.018     (6.875     (1.129.969     (5.794     (41.531     (36.157     —          (2.204.344
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

PRETAX PROFIT

     3.091.128        606.879        619.709        (18.768     140.409        (1.077.771     —          3.361.586   

Income tax and Social Contribution tax

     (835.791     (71.104     (255.908     (16.096     (23.339     309.655        —          (892.583
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

PROFIT AND LOSS ACCOUNT

     2.255.337        535.775        363.801        (34.864     117.070        (768.116     —          2.469.003   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Interest of the controlling stockholders

     2.255.337        535.775        363.801        (34.864     116.567        (768.116     —          2.468.500   

Interest of non-controlling stockholder

     —          —          —          —          503        —          —          503   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     2.255.337        535.775        363.801        (34.864     117.070        (768.116     —          2.469.003   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

 

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Generating plants

 

Plant

   Type    Company    Cemig’s
Interest
    Installed
Capacit
(MW)
     Assured
Energy
(average
MW)
     Installed
Capacit
(MW)*
     Assured
Energy
(average
MW)*
     Year
Concession or
Authorization
Expires
 

São Simão

   Hydroelectric    CEMIG GT      100.0     1,710.00         1,281.00         1,710.00         1,281.00         1/11/2015   

Emborcação

   Hydroelectric    CEMIG GT      100.0     1,192.00         497.00         1,192.00         497.00         7/23/2025   

Nova Ponte

   Hydroelectric    CEMIG GT      100.0     510.00         276.00         510.00         276.00         7/23/2025   

Jaguara

   Hydroelectric    CEMIG GT      100.0     424.00         336.00         424.00         336.00         8/28/2013   

Miranda

   Hydroelectric    CEMIG GT      100.0     408.00         202.00         408.00         202.00         12/23/2016   

Irapé

   Hydroelectric    CEMIG GT      100.0     399.00         210.70         399.00         210.70         2/28/2035   

Três Marias

   Hydroelectric    CEMIG GT      100.0     396.00         239.00         396.00         239.00         1/4/2046   

Volta Grande

   Hydroelectric    CEMIG GT      100.0     380.00         229.00         380.00         229.00         2/23/2017   

lgarapé

   Thermal    CEMIG GT      100.0     131.00         71.30         131.00         71.30         8/13/2024   

Salto Grande

   Hydroelectric    CEMIG GT      100.0     102.00         75.00         102.00         75.00         1/4/2046   

ltutinga

   Hydroelectric    CEMIG GT      100.0     52.00         28.00         52.00         28.00         1/4/2046   

Camargos

   Hydroelectric    CEMIG GT      100.0     46.00         21.00         46.00         21.00         1/4/2046   

Piau

   SHP    CEMIG GT      100.0     18.01         13.53         18.01         13.53         1/4/2046   

Gafanhoto

   SHP    CEMIG GT      100.0     14.00         6.68         14.00         6.68         1/4/2046   

Peti

   SHP    CEMIG GT      100.0     9.40         6.18         9.40         6.18         1/4/2046   

Rio de Pedras

   SHP    CEMIG GT      100.0     9.28         2.15         9.28         2.15         9/19/2024   

Poço Fundo

   SHP    CEMIG GT      100.0     9.16         5.79         9.16         5.79         8/19/2025   

Tronqueiras

   SHP    CEMIG GT      100.0     8.50         3.39         8.50         3.39         1/4/2046   

Joasal

   SHP    CEMIG GT      100.0     8.40         5.20         8.40         8.40         1/4/2046   

Martins

   SHP    CEMIG GT      100.0     7.70         1.84         7.70         1.84         1/4/2046   

Cajuru

   SHP    CEMIG GT      100.0     7.20         2.69         7.20         2.69         1/4/2046   

Ervália

   SHP    CEMIG GT      100.0     6.97         3.03         6.97         3.03         1/4/2046   

São Bernado

   SHP    CEMIG GT      100.0     6.82         3.42         6.82         3.42         8/19/2025   

Neblina

   SHP    CEMIG GT      100.0     6.47         4.66         6.47         4.66         1/4/2046   

Cel. Domiciano

   SHP    CEMIG GT      100.0     5.04         3.59         5.04         3.59         1/4/2046   

Paraúna

   SHP    CEMIG GT      100.0     4.28         1.90         4.28         1.90         —     

Pandeiros

   SHP    CEMIG GT      100.0     4.20         0.47         4.20         0.47         9/22/2021   

Paciência

   SHP    CEMIG GT      100.0     4.08         2.36         4.08         2.36         1/4/2046   

Marmelos

   SHP    CEMIG GT      100.0     4.00         2.74         4.00         2.74         1/4/2046   

Dona Rita

   SHP    CEMIG GT      100.0     2.40         1.03         2.40         1.03         1/4/2046   

Salto de Moraes

   SHP    CEMIG GT      100.0     2.39         0.60         2.39         0.60         7/1/2020   

Sumidouro

   SHP    CEMIG GT      100.0     2.12         0.53         2.12         0.53         —     

Anil

   SHP    CEMIG GT      100.0     2.08         1.10         2.08         1.10         —     

Xicão

   SHP    CEMIG GT      100.0     1.81         0.61         1.81         0.61         8/19/2025   

Luiz Dias

   SHP    CEMIG GT      100.0     1.62         0.61         1.62         0.61         8/19/2025   

Sinceridade

   SHP    CEMIG GT      100.0     1.42         0.35         1.42         0.35         1/4/2046   

Central Mineirão

   Solar    CEMIG GT      100.0     1.42         —           1.42         —           —     

Poquim

   SHP    CEMIG GT      100.0     1.41         0.39         1.41         0.39         7/8/2015   

Santa Marta

   SHP    CEMIG GT      100.0     1.00         0.58         1.00         0.58         7/8/2015   

Pissarrão

   SHP    CEMIG GT      100.0     0.80         0.55         0.80         0.55         —     

Jacutinga

   SHP    CEMIG GT      100.0     0.72         0.57         0.72         0.57         —     

Santa Luzia

   SHP    CEMIG GT      100.0     0.70         0.23         0.70         0.23         2/25/2026   

Lages*

   SHP    CEMIG GT      100.0     0.68         —           0.68         —           —     

Bom Jesus do Galho

   SHP    CEMIG GT      100.0     0.36         0.13         0.36         0.13         —     

Pai Joaquim

   SHP    CEMIG PCH      100.0     23.00         4.26         23.00         4.26         4/1/2032   

Salto Voltão

   SHP    Horizontes Energia      100.0     8.20         6.63         8.20         6.63         10/4/2030   

Salto do Paraopeba

   SHP    Horizontes Energia      100.0     2.46         —           2.46         —           10/4/2030   

Salto do Passo Velho

   SHP    Horizontes Energia      100.0     1.80         1.06         1.80         1.06         10/4/2030   

Machado Mineiro

   SHP    Horizontes Energia      100.0     1.72         1.03         1.72         1.03         7/8/2025   

Rosal

   Hydroelectric    Rosal Energia      100.0     55.00         30.00         55.00         30.00         5/8/2032   

Sá Carvalho

   Hydroelectric    Sá Carvalho      100.0     78.00         58.00         78.00         58.00         12/1/2024   

Barreiro

   Thermal    Usina Termelétrica Barreiro      100.0     12.90         11.37         12.90         11.37         4/30/2023   

Queimado

   Hydroelectric    CEMIG GT      82.5     105.00         58.00         86.63         47.85         1/2/2033   

Praias de Parajuru

   Wind Farm    CEMIG GT      49.0     28.80         8.39         14.11         4.11         9/24/2032   

Praia do Morgado

   Wind Farm    CEMIG GT      49.0     28.80         13.20         14.11         6.47         12/26/2031   

Paracambi

   SHP    CEMIG GT      49.0     25.00         19.53         12.25         9.57         2/16/2031   

Volta do Rio

   Wind Farm    CEMIG GT      49.0     42.00         18.41         20.58         9.02         12/26/2031   

Santo Antônio

   Hydroelectric    Santo Antônio Energia      17.7     2,714.72         2,218.00         480.06         392.22         6/12/2046   

Aimorés

   Hydroelectric    ALIANÇA      45.0     330.00         172.00         148.50         77.40         12/20/2035   

Amador Aguiar I (Capim Bra)

   Hydroelectric    ALIANÇA      39.3     240.00         155.00         94.36         60.94         8/29/2036   

Amador Aguiar II (Capim Br)

   Hydroelectric    ALIANÇA      39.3     210.00         131.00         82.56         51.50         8/29/2036   

lgarapava

   Hydroelectric    ALIANÇA      23.7     210.00         136.00         49.75         32.22         12/30/2028   

Funil

   Hydroelectric    ALIANÇA      45.0     180.00         89.00         81.00         40.05         12/20/2035   

Candonga

   Hydroelectric    ALIANÇA      22.5     140.00         64.50         31.50         14.51         5/25/2035   

Porto Estrela

   Hydroelectric    ALIANÇA      30.0     112.00         55.80         33.60         16.74         7/10/2032   

Baguari

   Hydroelectric    BAGUARI ENERGIA      34.0     140.00         80.20         47.60         27.27         8/15/2041   

Cachoeirão

   SHP    Hidrelétrica Cachoeirão      49.0     27.00         16.37         13.23         8.02         7/25/2030   

Pipoca

   SHP    Hidrelétrica Pipoca      49.0     20.00         11.90         9.80         5.83         9/10/2031   

Retiro Baixo

   Hydroelectric    Retiro Baixo Energética      25.0     82.00         38.50         20.46         9.61         8/25/2041   
   Hydroelectric    Lightger      49.0     855.14         637.00         419.02         312.13      
   SHP    Lightger      25.0     25.00         19.53         6.25         4.88      
   SHP    Brasil PCH      31.2     291.00         188.85         90.67         20.31      
   Wind Farm    Renova Energia      35.2     680.50         325.91         239.21         114.56      
   SHP    Renova Energia      35.2     41.80         18.74         14.69         6.59      

 

* The installed capacit and the assured energy are already on cemig’s share

 

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Generation plants: Concession contract expiry periods

In November 2015 Cemig was the winner of Lot D in the first auction of concessions held by Aneel with a new structure: placement of concessions for hydroelectric plants under a regime of allocation of generating capacity and physical offtake guarantees.

 

Number of generation plants: 18 (eighteen).

 

Total installed generation capacity: 699.57 MW.

 

Percentage of the guaranteed physical power offtake allocated to the Regulated Market: 100% (one hundred per cent), from January 1 to December 31, 2016; and 70% (seventy per cent), on and after January 1, 2017.

 

Payment: R$ 2.216 billion in Concession Grant Fee (Bonificação pela Outorga), of which R$ 1.4 billion (65%) was paid on January 5, 2016 and R$ 770 million is to be paid within 180 days.

 

Revenue received by Cemig GT for provision of the service: R$ 498.6 million/year.

Under that contract, as from this termination the assets of each plant that had not been fully depreciated are to be returned to the concession-granting power, and the company is to be indemillionified for them, on terms specified in the contract. The accounting balances corresponding to these assets, including the Deemed Cost, were transferred from Fixed assets to Financial assets on the date of termination of the concession in July 2015, and total R$ 546 million.

As specified in Aneel Normative Resolution 615/2014, the Valuation Opinions proposing the amounts of the indemillionity of the assets were delivered to Aneel on December 31, 2015. The company is in the process of preparation of these Opinions. Based on the discussions and valuations currently in progress, management believes that there is no indication that the amounts to be indemillionified by the Grantor Power will be lower than those recognized in its interim financial statements at December 31, 2015

 

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Power Plant

   Installed Capacit (MW)      Assured Energy
(average MW)
 

Três Marias

     396,0         239,0   

Salto Grande

     102,0         75,0   

Itutinga

     52,0         28,0   

Camargos

     46,0         21,0   

Piau

     18,0         13,5   

Gafanhoto

     14,0         6,7   

Peti

     9,4         6,2   

Tronqueiras

     8,5         3,4   

Joasal

     8,4         5,2   

Martins

     7,7         1,8   

Cajuru

     7,2         3,7   

Ervália

     7,0         3,0   

Neblina

     6,5         4,7   

Coronel Domiciano

     5,0         3,6   

Paciência

     4,1         2,4   

Marmelos

     4,0         2,7   

Dona Rita

     2,4         1,0   

Sinceridade

     1,4         0,4   
  

 

 

    

 

 

 

Total

     699,6         421,3   
  

 

 

    

 

 

 

Exchange of Shareholders’ Debentures owned by AGC Energia for shares in Cemig

On March 3, 2016, BNDES Participações (‘BNDESPar’) exchanged the totality of its holding of debentures issued under the Deed of the First Private Issue by AGC Energia of Non-convertible Permanent Asset-guaranteed Exchangeable Shareholders’ Debentures, in a Single Series, dated February 28, 2011 and amended January 17, 2012, for 54,342,992 common shares and 16,718,797 preferred shares in Cemig, owned by AGC Energia.

After the exchange, the equity interest held by BNDESPAR in Cemig — which on March 2, 2016 totaled 0% of the common shares and 1.13% of the preferred shares — increased to 12.9% and 3.13%, respectively. This characterizes a material transaction in the stock of Cemig in the terms of Article 12, §1º, of CVM Instruction 358/02. On March 2, 2016 BNDESPAR held an equity interest of 0.75% in the total capital of Cemig. This percentage has risen to 6.4%.

http://cemig.infoinvest.com.br/enu/13329/c-13329-enu.html?idioma=enu

 

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After this exchange, the stockholders’ agreement between Cemig and AGC Energia remains unchanged.

http://cemig.infoinvest.com.br/ptb/8867/AcordodeAcionistas_por.pdf

 

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Generation: Annual Permitted Revenue (RAP)

 

Resolução Homologatoria ANEEL—nº 1.313*

 

Receita Anual Permitida—RAP

   RAP      % Cemig      Cemig
Consolidado
     Cemig GT  

Cemig GT

     234,340,198         100.0%         234,340,198         234,340,198   

Cemig Itajuba

     36,345,194         100.0%         36,345,194         36,345,194   

Centroeste

     15,420,427         51.0%         7,864,418      

Transirapé

     26,287,112         24.5%         6,440,342      

Transleste

     36,163,304         25.0%         9,040,826      

Transudeste

     22,414,358         24.0%         5,379,446      

Taesa

        43.36%         

ETEO

     155,851,060         43.4%         67,576,823      

ETAU

     38,433,513         22.8%         8,762,945      

NOVATRANS

     460,994,392         43.4%         199,886,586      

TSN

     449,086,299         43.4%         194,723,252      

GTESA

     8,238,429         43.4%         3,572,172      

PATESA

     18,930,852         43.4%         8,208,394      

Munirah

     32,335,023         43.4%         14,020,425      

Brasnorte

     22,865,011         16.8%         3,833,291      

São Gotardo

     4,594,930         43.4%         1,992,356      

Abengoa

           

NTE

     135,672,013         43.4%         58,827,214      

STE

     72,452,041         43.4%         31,415,113      

ATEI

     132,046,398         43.4%         57,255,152      

ATEII

     204,000,305         43.4%         88,454,275      

ATEIII

     102,659,854         43.4%         44,513,183      

TBE

           

EATE

     381,289,719         21.7%         82,634,235      

STC

     36,934,709         17.3%         6,403,873      

Lumitrans

     23,591,101         17.3%         4,090,187      

ENTE

     199,517,005         21.7%         43,245,595      

ERTE

     44,785,760         21.7%         9,706,942      

ETEP

     86,906,931         21.7%         18,835,509      

ECTE

     84,200,833         8.3%         6,970,657      

EBTE

     40,614,511         32.3%         13,118,164      

ESDE

     11,542,416         21.7%         2,501,610      

ETSE

     19,741,437         8.3%         1,634,316      

Light

     7,924,732         32.6%         2,581,878      

Transchile**

     21,396,000         49.0%         10,484,040      
        

 

 

    

 

 

 

RAP TOTAL CEMIG

           1,284,658,610         270,685,392   
        

 

 

    

 

 

 

 

* Receita s a nua is permititida s com vigência entre 1º de julho de 2015 e 30 de junho de 2016.
** A receita de tra ns mis s ã o da Tra ns chile é da da em Dóla r Norte America no e é corrigida , a nua lmente, de a cordo com o Decreto Nº 163 (http://www.cne.cl/ima ges/stories/norma tiva s /otros %20niveles /electricida d/DOC65_-_decreto163obra surgentes.pdf).

 

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Appendices

Electricity losses – 4Q15

Control of electricity losses is one of Cemig D’s strategic objectives, and the Company has a structure dedicated to this – its Distribution Losses Measurement and Control Management Unit. Compliance with the objective is monitored monthly through the Total Distribution Losses Index (Índice de Perdas Totais da Distribuição, or IPTD): the result at December 31, 2015 was 11.52% – compared to a regulatory target of 10.48% by the end of 2017. In the decision on the regulatory target, taken during the 3rd Tariff Review Cycle, the regulator, Aneel, made significant changes in the method of calculation of technical losses, imposing extremely challenging limits for Cemig D. Total losses are composed of technical losses plus non-technical losses. The indicators for measurement are the PPTD (Distribution Technical Losses Percentage –percentual de perdas técnicas da distribuição), and the PPNT (Distribution Non-technical Losses Percentage – or percentual de perdas não técnicas da distribuição). The projected result for the PPTD on December 31, 2015 was 9.46%, for a regulatory target of 7.84 %, and the projected result for the PPNT was 3.06%, for a regulatory target of 2.64%.

Aneel measures non-technical losses with reference to the low-voltage market. Taking this into account, the result for the PPNT in relation to the low voltage market as invoiced at December 31, 2015 was 7.85%, for a regulatory target of 7.63% (2.88% above the limit set by the Regulator).

 

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Cemig D Tables (R$ million)

 

CEMIG D Market

 
     (GWh)      GW  

Quarter

   Captive Consumers      TUSD ENERGY1      T.E.D2      TUSD PICK3  

3Q13

     6,486         5,017         11,503         29   

4Q13

     6,615         4,975         11,591         29   

1Q14

     6,744         4,464         11,208         29   

2Q14

     6,646         4,485         11,132         29   

3Q14

     6,686         4,298         10,984         27   

4Q14

     6,935         4,201         11,136         29   

1Q15

     6,780         4,034         10,814         30   

2Q15

     6,371         3,896         10,268         28   

3Q15

     6,471         3,803         10,274         29   

4Q15

     6,850         3,937         10,787         28   

 

1. Refers to the quantity of electricity for calculation of the regulatory charges charged to free consumer clients (“Portion A”)
2. Total electricity distributed
3. Sum of the demand on which the TUSD is invoiced, according to demand contracted (“Portion B”).

 

Operating Revenues

   4Q15     4Q14     Change%     2015     2014     Change%  

Sales to end consumers

     4,498        3,050        47        16,515        11,443        44   

TUSD

     296        254        17        1,500        893        68   

Transactions in the CCEE

     —          —          —          50        —          —     

CVA and Other financial components in tariff adjustment

     397        1,107        (64     1,704        1,107        54   

Construction revenue

     353        315        12        1,044        861        21   

Others

     301        256        18        1,194        1,039        15   

Subtotal

     5,846        4,982        17        22,007        15,344        43   

Deductions

     (2,753     (1,168     136        (9,620     (4,103     134   

Net Revenues

     3,093        3,814        (19