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Reference Form - 2013 – ENEVA S.A. Version: 22
Contents
1. Persons responsible for the form
Declaration and identification of the persons responsible for the form
2. Independent Auditors
2.1/2.2 - Identification and remuneration of Auditors
2.3 – Other relevant information
3. Selected financial information
3.1 - Financial information
3.2 – Non-accounting measures
3.3 - Events subsequent to the latest financial statements
3.4 - Income allocation policy
3.5 - Distribution of dividends and retained earnings
3.6 - Declaration of dividends to retained earnings account or reserves
3.7 - Indebtedness level
3.8 - Obligations by nature and maturity term
3.9 - Other relevant information
4. Risk factors
4.1- Description of risk factors
4.2 - Comments on expectations of changes in exposure to risk factors
4.3 – Non-confidential and relevant legal, administrative or arbitration proceedings
4.4 – Non-confidential legal, administrative or arbitration proceedings the opposing parties to which are managers, former managers, controlling shareholders, former controlling shareholders or investors
4.5 - Relevant confidential proceedings
4.6 - Repetitive or related non-confidential legal, administrative or arbitration proceedings that are collectively relevant
4.7 - Other relevant contingencies
4.8 - Regulations in the country of origin and in the country where the securities are held in custody
5. Market risk
5.1 - Description of key market risks
5.2 - Description of the market risk management policy
5.3 - Significant changes in key market risks
Reference Form - 2013 – ENEVA S.A. Version: 22
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Contents
5.4 - Other relevant information
6. Issuer history
6.1 / 6.2 / 6.4 – Incorporation, term of duration and date of registration with the CVM
6.3 - Brief history
6.5 - Major corporate events relating to its issuer, subsidiaries or affiliates
6.6 - Information of filing for bankruptcy on the basis of relevant amount or judicial or extrajudicial reorganization
6.7 - Other relevant information
7. Issuer activities
7.1 - Description of the activities of the issuer and its subsidiaries
7.2 - Information on operating segments
7.3 - Information on products and services related to operating segments
7.4 - Clients accounting for more than 10% of total net revenue
7.5 - Relevant effects of state regulations on activities
7.6 - Relevant foreign revenue
7.7 - Effects of foreign regulations on activities
7.8 - Relevant long-term relationships
7.9 - Other relevant information
8. Economic group
8.1 - Description of economic group
8.2 - Organizational chart of economic group
8.3 - Restructuring transactions
8.4 - Other relevant information
9. Relevant assets
9.1 - Relevant non-current assets - other
9.1 – Relevant non-current assets / 9.1.a - Property, plant and equipment
9.1 - Non-current assets / 9.1.b Patents, trademarks, licenses, concessions, franchises and technology transfer agreements
9.1 - Non-current assets / 9.1.c - Equity interests
9.2 - Other relevant information
10. Management’s comments
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Contents
10.1 - General financial and equity conditions
10.2 - Operating and financial result
10.3 - Events with actual and expected relevant effects on the financial statements
10.4 - Significant changes in accounting practices - Qualifications and emphases in the auditor’s report
10.5 - Critical accounting policies
10.6 - Internal controls related to the preparation of financial statements – Level of efficiency and deficiency and recommendations included in the auditor’s report
10.7 - Use of proceeds from public offerings and deviations, if any
10.8 - Relevant off-balance sheet items
10.9 - Comments on relevant off-balance sheet items
10.10 - Business plan
10.11 - Other factors with significant influence
11. Forecasts
11.1 - Disclosed forecasts and assumptions
11.2 - Monitoring and changes of forecasts disclosed
12. Meeting and management
12.1 - Description of administrative structure
12.2 - Rules, policies and practices relating to general meetings
12.3 - Dates and newspapers for publication of information required by Law No. 6.404/76
12.4 - Rules, policies and practices relating to the board of directors
12.5 - Description of arbitration clause for resolution of conflicts
12.6 / 8 - Composition and professional experience of management and fiscal council
12.7 - Composition of the statutory committees and the audit, finance and compensation committees
12.9 - Existing marital relationship, common-law marriage, or family relationship up to 2nd degree relating to managers of the issuer, subsidiaries and controlling shareholders.
12.10 - Relationships of subordination, rendering of services or control between managers and subsidiaries, controlling shareholders and other:
12.11 - Agreements, including insurance policies, for payment or reimbursement of expenses incurred by management
12.12 - Other relevant information
13. Management compensation
13.1 - Description of compensation policy or practice, including non-statutory board
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Contents
13.2 - Total compensation of the board of directors, statutory board and fiscal council
13.3 - Total variable compensation of the board of directors, statutory board and fiscal council
13.13.3 – Share-based compensation plan for the board of directors and statutory board
13.5 - Interests in shares and other convertible securities, held by management and members of the fiscal council
13.6 - Share-based compensation for the board of directors and statutory board
13.7 - Information on outstanding options held by the board of directors and the statutory board
13.8 - Options exercised and shares delivered in connection to share-based compensation of the board of directors and statutory board
13.9 - Information required to understand figures disclosed in items 13.6 to 13.8 - pricing method for shares and options
13.10 - Information on pension plans provided to members of the board of directors and statutory officers
13.11 – Maximum, minimum and average compensation of the board of directors, statutory board and fiscal council
13.12 - Compensation and indemnification mechanisms for management in the event of removal from office or retirement
13.13 - Percentage of total compensation held by management and members of the fiscal council who are parties related to the controlling shareholders
13.14 - Compensation of management and members of the fiscal council, grouped by body, received for any reason other than the office they hold
13.15 - Compensation of management and members of the fiscal council recognized in income of controlling shareholders, whether direct or indirect, companies under common control and subsidiaries of the issuer
13.16 - Other relevant information
14. Human resources
14.1 - Description of human resources
14.2 - Relevant changes - human resources
14.3 - Description of employee compensation policy
14.4 - Description of relationship between issuer and unions
15. Control
15.1/15.2 - Shareholder structure
15.3 - Capital distribution
15.4 – Shareholders’ organizational chart
15.5 - Shareholders’ agreement filed at issuer’s head office or to which the controlling shareholder is a party
15.6 - Relevant changes in equity interests held by members of the controlling group and by the
Reference Form - 2013 – ENEVA S.A. Version: 22
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Contents
issuer’s management
15.7 - Other relevant information
16. Transactions with related parties
16.1 - Description of issuer’s rules, policies and practices regarding transactions with related parties
16.2 - Information on transactions with related parties
16.3 - Identification of measures taken to address conflicts of interest and statement of the strictly commutative nature of the conditions agreed or proper compensatory payment
17. Capital stock
17.1 - Information on capital stock
17.2 - Capital Increases
17.3 - Information on stock splits, reverse stock splits and stock dividends
17.4 - Information on capital stock decrease
17.5 - Other relevant information
18. Securities
18.1- Rights of shares
18.2 - Description of any statutory rules limiting the voting rights of significant shareholders or requiring them to hold a public offering
18.3 - Description of exceptions and suspensive clauses relating to equity or political rights set forth in the by-laws
18.4 – Trading volume and highest and lowest price quotes for securities traded
18.5 - Description of other securities issued
18.6 - Brazilian markets where securities are admitted for trading
18.7 - Information about class and type of securities admitted for trading on foreign markets
18.8 - Public offerings for distribution held by issuer or third parties, including controlling shareholders and subsidiaries and affiliates, regarding securities of the issuer
18.9 - Description of public offerings for acquisition held by the issuer in respect of shares issued by third parties
18.10 - Other relevant information
19. Repurchase plans/Treasury
19.1 - Information on repurchase of shares of the issuer
19.2 - Variation in treasury shares
19.3 - Information on treasury securities as of the closing date of the past fiscal year
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Contents
19.4 - Other relevant information
20. Trading policy
20.1 - Information on securities trading policy
20.2 - Other relevant information
21. Disclosure policy
21.1 - Description of internal rules, regulations and procedures for disclosing information
21.2 - Description of the policy for disclosing relevant act or fact and of procedures for maintaining secrecy about relevant information not disclosed
21.3 - Managers in charge of implementing, maintaining, assessing and inspecting the information disclosure policy
21.4 - Other relevant information
22. Special events
22.1 - Acquisition or disposal of any relevant asset that does is not included in the issuer’s not fit as normal business operations
22.2 - Significant changes in the issuer’s form of conducting business
22.3 - Relevant agreements entered into by issuer and its subsidiaries, which do not directly relate to their operating activities
22.4 - Other relevant information
Reference Form - 2013 – ENEVA S.A. Version: 22
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1.1 - Declaration and identification of the persons responsible for the form
Name of the person responsible for the content of the form
Eduardo Karrer
Position of the responsible person: Chief Executive Officer/Investor Relations Director
The above qualified officer declares that:
a. He reviewed the reference form;
b. all information provided in the form complies with the provisions of CVM Instruction No. 480,
particularly arts. 14 to 19; and
c. the information provided herein is a true, accurate, and complete overview of the economic and
financial condition of the issuer, the risks inherent to its business and the securities issued by it.
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2.1/2.2 - Identification and remuneration of Auditors
The Company has any Auditor?
YES
CVM Code 418-9
Type of Auditor Domestic
Name/Corporate Name KPMG Auditores Independentes
CPF/CNPJ 57.755.217/0003-90
Period of service From August 15, 2007 to March, 21, 2012
Description of the contracted services (i) independent audit and thorough review of the Company’s financial statements for the financial years ended December 31, 2010 and 2011; (ii) review of the quarterly information (ITR) of the Company in 2010 and 2011; and (iii) issue of the comfort letter in connection with the Company’s IPO in 2013.
Total amount of the independent auditor’s remuneration itemized by service
The amount paid for independent audit services regarding the financial statements for the fiscal years ended December 31, 2010 and 2011 totaled R$1.5 million. The amount to be paid for issue of the comfort letter in connection with the Company’s IPO is R$350,000.00.
Justification for replacement Compliance with the mandatory rotation of independent auditors, pursuant to CVM Instruction 308/99
Justification presented by the auditor, in the event of disagreement with the issuer’s justification
Not applicable, since the independent auditor did not disagree with the justification.
Name of the responsible accountant Period of service CPF Address
Manuel Fernandes Rodrigues de Sousa From August 15, 2007 to October 14, 2011
783.840.017-15 Avenida Almirante Barroso 52, 4 floor, Centro, Rio de Janeiro, RJ, Brazil, Zip Code 20031-000,
Phone (21) 35159400, Fax (21) 35159000, e-mail: [email protected]
Vânia Andrade de Souza From August 15, 2008 to March 21, 2012
671.396.717-53 Avenida Almirante Barroso 52, 4th floor, Centro, Rio de Janeiro, RJ, Brazil, Zip Code 20031-000,
Phone (21) 35159400, Fax (21) 35159000, e-mail: [email protected]
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9
The Company has any Auditor?
YES
CVM Code 471-5
Type of Auditor Domestic
Name/Corporate Name Ernst & Young Terco Auditores Independentes S.S.
CPF/CNPJ 61.366.936/0001-25
Period of service March 22, 2012
Description of the contracted services (i) independent audit and review of the individual and consolidated financial statements of the Company for the financial year ended December 31, 2012; (ii) review of the quarterly financial information for the periods ended March 31, 2012, June 30, 2012, September 30, 2012 and March 31, 2013; (iii) issue of a comfort letter in connection with the Company’s IPO in 2013.
Total amount of the independent auditor’s remuneration itemized by service
The remuneration paid for independent audit services regarding the financial statements for the fiscal years ended December 31, 2012 totaled R$443,023.00. The amount to be paid for issue of the comfort letter in connection with the Company’s IPO is R$480,000.00.
Justification for the replacement Not applicable since the independent auditor was not replaced.
Justification presented by the auditor, in the event of disagreement with the issuer’s justification
Not applicable, since the independent auditor was not replaced.
Name of the responsible accountant Period of service CPF Address
Roberto Cesar Andrade dos Santos March 22, 2012 077.932.347-58 Praia de Botafogo, nº 370, 8º andar, Bairro: Botafogo CEP 22.250-040, Rio de Janeiro/RJ
e-mail: [email protected] Phone: (21) 3263-7233
Fax: (21) 3262-7004J
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2.3 - Other relevant information
All information relevant and appropriate to this issue was disclosed in the above
items.
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12
3.1 - Financial Information - Consolidated
(Real)
Fiscal year (December 31,
2012)
Fiscal year (December 31,
2011)
Fiscal year (December 31,
2010)
Shareholders’ equity 2,704,575,000.00 1,370,075,000.00 1,701,563,000.00
Total assets 9,451,180,000.00 7,953,680,000.00 4,821,986,000.00
Net Revenue/Fin. Interm.
Revenue/Insurance premium
earned 490,940,000.00 168,279,000.00 98,454,000.00
Gross Income -106,614,000.00 4,501,000.00 -18,028,000.00
Net income -434,454,000.00 -401,862,000.00 -255,614,000.00
Number of shares, excl. treasury
shares (Units)
578,241,732 136,720,840 136,692,680
Equity value per share (in Real
per Unit)
4.67723938 10.02096681 12.44809158
Net earnings per share (in Real
per share) -0.75263 -2.939289 1.869990
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3.2 - Non-accounting measurements
a) Non-accounting measurements
EBITDA is a non-accounting measurement prepared by the Company and
reconciled with our financial statements, consisting of net income before net
financial income; income and social contribution taxes on income; and
depreciation and amortization expenses, this being the definition used by the
Company for calculation of its EBITDA. EBITDA is not a measure of financial
performance prepared in accordance with accounting practices adopted in Brazil
or the IFRS, and it should not be considered as an alternative to net income, an
indicator of operating performance, an alternative to cash flows or an indicator of
liquidity.
b) reconciliations between amounts disclosed and amounts included in the
audited financial statements
(R$ thousands) 2012 1Q13
Income before Income and Social Contribution Taxes (549.090) (317.868)
(+) Equity Pickup (34.235) (83.490)
(+) Other Revenues/ Expenses (418) (1.011)
(+) Net Financial Income (127.540) (77.827)
(+) Depreciation and Amortization (Expenses) 3.976 638
(+) Depreciation and Amortization (Costs) 8.945 17.257
EBITDA (373.976) (137.645)
c) reason for choosing such indicator as the most suitable for the correct
understanding of financial condition and results of operations
Our management believes that EBITDA provides a useful measure of the
company's performance, being widely used by investors and analysts to evaluate
performance and compare companies.
Because financial revenues and expenses, IRPJ and CSLL, depreciation and
amortization are not taken into account for calculation of EBITDA, EBITDA works
as an indicator of our overall economic performance, which is not affected by
fluctuations in interest rates, changes in IRPJ and CSLL tax burden or changes in
levels of depreciation and amortization.
As a result, we believe that EBITDA enables a better understanding not only of
our financial performance, but also of our capacity to comply with our liabilities
and to obtain funds for our capital expenditure and working capital.
Reference Form - 2013 – ENEVA S.A. Version: 22
14
3.3 - Subsequent events to the latest financial statements
In April 2013, Parnaíba I Thermal Plant in the State of Maranhão was authorized
by the Brazilian Electricity Regulatory Agency (ANEEL) to start commercial
operation of the third and fourth turbines with installed capacity of 169 MW each.
Parnaíba I therefore reached its total installed capacity of 676 MW and is already
operating.
In the same month, the company completed acquisition of the total capital stock of
UTE MC2 Nova Venécia. The project, which is authorized for construction of a
thermal plant with capacity of 176 MW, will be transferred to the Paranaíba Basin,
in the State of Maranhão.
Also in April 2013, ENEVAannounced that, together with MPX-E ON Participações
S.A. and Petra Energia, it executed an agreement with Kinross Brasil Mineração
S.A. for implementation of a natural gas-fuled thermal project with installed
capacity of 56 MW to be built in the Parnaíba Basin, state of Maranhão, which is
scheduled to go on stream in December 2013. The annual amount of the
agreement totals approximately R$54 million.
In view of the provisions of CVM/SEP Circular Letter No. 01/2013, the Company
reports that it is not possible to estimate the financial effects of the subsequent
events described above.
For more information on the subsequent events described above, see item 6.5 of
this Reference Form.
Reference Form - 2013 – ENEVA S.A. Version: 22
15
3.4 - Income allocation policy
2012 2011 2010
Rules on retained
earnings
The Company’s Bylaws provide that the remaining
balance of the net income for the year shall be
allocated as follows: (i) Five percent (5%) to the
establishment of a legal reserve, up to the limit provided
for by law; (ii) Establishment of a reserve for
contingencies, as proposed by the management
bodies; (iii) Payment of mandatory minimum annual
dividend to shareholders; (iv) Retention based on the
capital budget approved in advance by the
administration bodies, and (v) Establishment of a
statutory reserve for the purpose of funding the
development, growth and expansion of the Company’s
business, which shall not exceed the amount equivalent
to 100% of the share capital of the Company.
The Company’s Bylaws provide that the remaining
balance of the net income for the year shall be
allocated as follows: (i) Five percent (5%) to the
establishment of a legal reserve, up to the limit provided
for by law; (ii) Establishment of a reserve for
contingencies, as proposed by the management
bodies; (iii) Payment of mandatory minimum annual
dividend to shareholders; (iv) Retention based on the
capital budget approved in advance by the
administration bodies, and (v) Establishment of a
statutory reserve for the purpose of funding the
development, growth and expansion of the Company’s
business, which shall not exceed the amount equivalent
to 100% of the share capital of the Company.
The Company’s Bylaws provide that the remaining
balance of the net income for the year shall be
allocated as follows: (i) Five percent (5%) to the
establishment of a legal reserve, up to the limit provided
for by law; (ii) Establishment of a reserve for
contingencies, as proposed by the management
bodies; (iii) Payment of mandatory minimum annual
dividend to shareholders; (iv) Retention based on the
capital budget approved in advance by the
administration bodies, and (v) Establishment of a
statutory reserve for the purpose of funding the
development, growth and expansion of the Company’s
business, which shall not exceed the amount equivalent
to 100% of the share capital of the Company.
Retained earnings
amounts
In the fiscal year ended December 31, 2012 no
retention was made as the Company reported losses.
In the fiscal year ended December 31, 2011 no
retention was made as the Company reported losses.
In the fiscal year ended December 31, 2010 no
retention was made as the Company reported losses.
Rules on dividend
distribution
The Company’s Bylaws ensures to shareholders the
right to receive a mandatory annual dividend of not less
than twenty five percent (25%) of the net income for the
year, minus or plus the following amounts: (i) amount
allocated to the establishment of a legal reserve; and
(ii) amount allocated to the establishment of reserves
for contingencies and reversals of those established in
previous years; (iii) payment of annual minimum
mandatory dividend to shareholders; (iv) amount
intended for creating the unrealized profit reserve,
should the mandatory dividend amount exceed the
realized portion of income for the year. The company
may maintain the statutory profit reserve named
“Investment Reserve”, the purpose of which will be to
finance expansion of activities of the Company and/or
subsidiaries and affiliates. This reserve may be created
out of up to one hundred per cent (100%) of net income
remaining after legal and statutory deductions and its
balance, added to the balance of the other profit
The Company’s Bylaws grant to shareholders the right
to receive a mandatory annual dividend of not less than
twenty five percent (25%) of the net income for the
year, minus or plus the following amounts: (i) amount
allocated to the establishment of a legal reserve; and
(ii) amount allocated to the establishment of reserves
for contingencies and reversals of those established in
previous years; (iii) payment of annual minimum
mandatory dividend to shareholders; (iv) amount
intended for creating the unrealized profit reserve,
should the mandatory dividend amount exceed the
realized portion of income for the year. The company
may maintain the statutory profit reserve named
“Investment Reserve”, the purpose of which will be to
finance expansion of activities of the Company and/or
subsidiaries and affiliates. This reserve may be created
out of up to one hundred per cent (100%) of net income
remaining after legal and statutory deductions and its
balance, added to the balance of the other profit
The Company’s Bylaws grant to shareholders the right
to receive a mandatory annual dividend of not less than
twenty five percent (25%) of the net income for the
year, minus or plus the following amounts: (i) amount
allocated to the establishment of a legal reserve; and
(ii) amount allocated to the establishment of reserves
for contingencies and reversals of those established in
previous years; (iii) payment of annual minimum
mandatory dividend to shareholders; (iv) amount
intended for creating the unrealized profit reserve,
should the mandatory dividend amount exceed the
realized portion of income for the year. The company
may maintain the statutory profit reserve named
“Investment Reserve”, the purpose of which will be to
finance expansion of activities of the Company and/or
subsidiaries and affiliates. This reserve may be created
out of up to one hundred per cent (100%) of net income
remaining after legal and statutory deductions and its
balance, added to the balance of the other profit
Reference Form - 2013 – ENEVA S.A. Version: 22
16
2012 2011 2010
reserves, except for unrealized profit reserve and
reserve for contingencies, may not exceed one hundred
percent (100%) of the Company’s paid in capital stock.
In the fiscal year ended December 31, 2012 no
distribution of dividend was made as the Company
reported losses.
reserves, except for unrealized profit reserve and
reserve for contingencies, may not exceed one hundred
percent (100%) of the Company’s paid in capital stock.
In the fiscal year ended December 31, 2011 no
distribution of dividend was made as the Company
reported losses.
reserves, except for unrealized profit reserve and
reserve for contingencies, may not exceed one hundred
percent (100%) of the Company’s paid in capital stock.
In the fiscal year ended December 31, 2010 no
distribution of dividend was made as the Company
reported losses.
Frequency of
dividend
distributions
The dividend distribution policy is subject to the
provisions of the Brazilian Corporation Law, i.e., annual
distribution, and the Company may, by resolution of the
Board of Directors, draw up a half-yearly balance sheet
and declare dividends to the income account
ascertained thereon. Moreover, the Board of Directors
may declare interim dividends to retained profits or
profit reserves accounts reported in the latest annual or
half-yearly balance sheet.
The dividend distribution policy is subject to the
provisions of the Brazilian Corporation Law, i.e., annual
distribution, and the Company may, by resolution of the
Board of Directors, draw up a half-yearly balance sheet
and declare dividends to the income account
ascertained thereon. Moreover, the Board of Directors
may declare interim dividends to retained profits or
profit reserves accounts reported in the latest annual or
half-yearly balance sheet.
The dividend distribution policy is subject to the
provisions of the Brazilian Corporation Law, i.e., annual
distribution, and the Company may, by resolution of the
Board of Directors, draw up a half-yearly balance sheet
and declare dividends to the income account
ascertained thereon. Moreover, the Board of Directors
may declare interim dividends to retained profits or
profit reserves accounts reported in the latest annual or
half-yearly balance sheet.
Restrictions on
dividends
distribution
The Brazilian Corporation Law allows the Company to suspend distribution of mandatory dividend if the Board of Directors declares to the General Meeting that the distribution is inconsistent with its financial condition. The Fiscal Council, if established, shall issue its opinion on the Board of Directors proposal. In addition, the Board of Directors shall submit within five days of the General Meeting to the Securities and Exchange Commission a justification for suspending the dividend distribution. Profits retained due to a suspension as above mentioned shall be allocated to a special reserve and, if they are not absorbed by subsequent losses, shall be paid as dividends, as soon as the financial condition of the company so allows.
The Brazilian Corporation Law allows the Company to
suspend distribution of mandatory dividend if the Board
of Directors declares to the General Meeting that the
distribution is inconsistent with its financial condition.
The Fiscal Council, if established, shall issue its opinion
on the Board of Directors proposal. In addition, the
Board of Directors shall submit within five days of the
General Meeting to the Securities and Exchange
Commission a justification for suspending the dividend
distribution. Profits retained due to a suspension as
above mentioned shall be allocated to a special reserve
and, if they are not absorbed by subsequent losses,
shall be paid as dividends, as soon as the financial
condition of the company so allows.
The Brazilian Corporation Law allows the Company to
suspend distribution of mandatory dividend if the Board
of Directors declares to the General Meeting that the
distribution is inconsistent with its financial condition.
The Fiscal Council, if established, shall issue its opinion
on the Board of Directors proposal. In addition, the
Board of Directors shall submit within five days of the
General Meeting to the Securities and Exchange
Commission a justification for suspending the dividend
distribution. Profits retained due to a suspension as
above mentioned shall be allocated to a special reserve
and, if they are not absorbed by subsequent losses,
shall be paid as dividends, as soon as the financial
condition of the company so allows.
Reference Form - 2013 – ENEVA S.A. Version: 22
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3.5 - Distribution of dividends and net earnings retained
(in Real) Fiscal year ended December 31, 2012
Fiscal year ended December 31, 2011
Fiscal year ended December 31, 2010
Adjusted net income -435,202,000.00 -401,862,000.00 -255,614,000.00
Dividend distributed in relation to adjusted net income 0,000000 0,000000 0,000000
Rate of return in relation to the shareholder’s equity of issuer 0,000000 0,000000 0,000000
Total distributed dividend 0,00 0,00 0,00
Net earnings retained 0,00 0,00 0,00
Approval date of the retention
Net earnings retained Amount Dividend
payment Amount Dividend
payment Amount Dividend
payment
0,00 0,00
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18
3.6 - Declaration of dividends to retained earnings account or reserves
In the latest three fiscal years, the Company declared no dividends or interest on
equity credited as dividends which have been allocated to retained earnings
account or reserves established in previous fiscal years, as the Company reported
losses in the latest three fiscal years.
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3.7- Level of indebtedness
Fiscal year Total debt amount, of any nature
Ratio type Debt/equity ratio Description and justification for utilization of other ratio
12/31/2012 6,746,605,000.00 Debt/equity ratio 2.49452
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3.8 - Obligations by nature and maturity term
Fiscal year (December 31, 2012)
Type of Debt Less than a year One to three years Three to five years More than five years Total
Collateral 895,622,000 436,028,000 423,728,000 2,142,877,000 3,898,255,000
Floating guarantee - - - - 0
Unsecured 1,511,567,000 718,007,000 618,806,000 - 2,848,350,000
Total 2,407,159,000 1,154,035,000 1,042,534,000 2,142,877,000 6,746,605,000
Note: The information provided in this item refers to the consolidated financial statements of the Company.
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3.9 - Other relevant information
The Company has adopted, as of January 1, 2013, IFRS 10 and IFRS 11 to
prepare its Quarterly Information – ITR as of March 31, 2013, whose accounting
policy is as follows:
IFRS 10 establishes a single control model that applies to all entities, including special
purpose entities. The changes introduced by IFRS 10 require that Management exercises
significant judgment to determine which entities are controlled and are hence required to
be consolidated by a controlling company, comparative to the requirements that were part
of IAS 27.
IFRS 11 eliminates the option of accounting for joint ventures (ECC) based on proportional
consolidation. Instead, the ECCs which fit the definition of joint venture are recorded
based on the equity method.
The adoption of IFRS 10 and IFRS 11 was performed retroactively for the
financial information of the period of three months ended March 31, 2012.
In compliance with IFRS 11, investments in the joint ventures Porto do Pecém
Geração de Energia S.A., Porto do Pecém Transportadora de Minérios S.A.,
OGMP Transporte Aéreo Ltda., Pecém Operação e Manutenção de Unidades de
Geração S.A., MABE Construção e Administração de Projetos Ltda., MPX Chile
Holding Ltda., Seival Participações S.A., UTE MPX Sul Energia Ltda., Parnaíba
Participações S.A., UTE Porto do Açú Energia S.A., Porto do Açú II Energia S.A.
e MPX E.ON Participações S.A. are valued at the equity method in the individual
and consolidated quarterly information for the three month period ended March
31, 2013 and 2012.
The financial information for the fiscal years ended December 31, 2012, 2011,
and 2010 shown in this Reference Form was prepared and is presented in
accordance with the accounting practices in force on December 31, 2012, unless
otherwise indicated. Thus, the financial information for the quarters ended March
31, 2013 and 2012, does not compare with the other financial information
contained in this Reference Form.
As of January 1, 2013, the Company adopted new accounting rules aiming to
comply with international accounting standards. As a result of the change in
accounting practices, the Company no longer consolidates in its financial
information the investees over which the Company individually does not have
controlling power, namely Porto do Pecém Geração de Energia S.A., Porto do
Pecém Transportadora de Minérios S.A., OGMP Transporte Aéreo Ltda., Pecém
Operação e Manutenção de Unidades de Geração S.A., MABE Construção e
Administração de Projetos Ltda., MPX Chile Holding Ltda., Seival Participações
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S.A., UTE MPX Sul Energia Ltda., Parnaíba Participações S.A., UTE Porto do
Açú Energia S.A.,Porto do Açú II Energia S.A. and MPX E.ON Participações S.A.
In addition, the Company now recognizes income for the above-mentioned
companies by the equity method. Thus, the Company’s equity pick-up account
has become more relevant for the Company’s overall income, which would not
occur under the previous accounting practices.
The Company presents below a table showing changes made in comparative
balances represented in quarterly financial information - ITR regarding the
consolidated balance sheet as of December 31, 2012 and the three-month period
ended March 31, 2012:
Consolidated 12/31/2012
(in thousands of R$) Originally disclosed Adjustments Restated
Assets Current assets
Cash and cash equivalents 590,469 (71,192) 519,277 Securities 3,441 - 3,441 Trade accounts receivable 152,114 (130,769) 21,345 Subsidies receivable – Fuel Consumption account 17,561 - 17,561 Inventories 211,718 (69,031) 142,687 Prepaid expenses 40,462 (21,111) 19,351 Taxes recoverable 57,438 (20,028) 37,410 Derivative gains 3,018 - 3,018 Miscellaneous advances 20,267 (18,484) 1,783 Escrow deposits 4,237 (4,202) 35 Other credits 3 (3) -
1,100,728 (334,820) 765,908
Non-current assets
Prepaid expenses 8,705 (211) 8,494 Escrow deposits 137,717 (2,069) 135,648 Subsidies receivable - Fuel Consumption account 24,617 - 24,617 Taxes recoverable 34,709 (10,675) 24,034 Deferred Income and Social Contribution Taxes 456,123 (150,575) 305,548 Loan agreement with affiliates 359 134,567 134,926 Accounts receivable with other connected persons 8,575 (7,441) 1,134 Accounts receivable with affiliates 3,732 3,061 6,793 Advance for future capital increase in affiliates - 12,425 12,425 Embedded derivatives 479 - 479
675,016 (20,918) 654,098
Investments 62,956 770,999 833,955 Property, plant and equipment 7,362,815 (1,792,416) 5,570,399 Intangible assets 249,665 (34,429) 215,236
9,451,180 (1,411,584) 8,039,596
Consolidated 12/31/2012
(in thousands of R$) Originally disclosed Adjustments Restated
Liabilities Current liabilities
Trade accounts payable 228,638 (113,377) 115,261 Loans and financing 1,915,402 (95,428) 1,819,974
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Debts with affiliates - 26,783 26,783 Debts with parent company 3,407 (3,407) - Debts with other related parties 19,057 (15,068) 3,989 Debentures 111 - 111 Taxes and contributions payable 11,375 (4,134) 7,241 Social and labor liabilities 12,980 (3,117) 9,863 Losses in derivative transactions 39,506 (16,555) 22,951 Contractual withholding 133,935 (56,561) 77,374 Profit sharing 23,900 (3,267) 20,633 Dividends payable 1,960 - 1,960 Other liabilities 16,888 (13,563) 3,325
2,407,159 (297,694) 2,109,465
Non-current liabilities
Loans and financing 4,151,947 (1,047,141) 3,104,806 Debts with other related parties 215 215 430 Debentures 4,954 - 4,954 Losses in derivative transactions 166,992 (72,195) 94,797 Provision for unsecured liabilities - 19,840 19,840 Deferred income and social contribution taxes 10,431 (8,383) 2,048 Provision for dismantling 4,197 (2,079) 2,118 Other provisions 710 (710) -
4,339,446 (1,110,453) 3,228,993
Shareholder’s equity
Capital stock 3,731,734 - 3,731,734 Capital reserve 321,904 - 321,904 Equity valuation adjustments (119,067) - (119,067) Accumulated losses (1,384,971) - (1,384,971)
Shareholder’s equity attributable to controlling shareholders 2,549,600 - 2,549,600 Minority interests 154,975 (3,437) 151,538
Total shareholder’s equity 2,704,575 (3,437) 2,701,138
9,451,180 (1,411,584) 8,039,596
Statement of income Consolidated 03/31/2012
(in thousands of R$)
Originally disclosed Adjustments Restated
Revenue from sales of goods and/or services 75,669 - 75,669 Cost of goods and/or services sold (81,809) 12 (81,797)
Gross profit (6,140) 12 (6,128)
Operating expenses/revenues (76,636) (4,583) (81,219)
General and administrative expenses (64,332) 2,459 (61,873) Personnel and managers (27,440) 641 (26,799) Other expenses (5,024) 854 (4,170) Third parties services (26,301) 685 (25,616) Depreciation and amortization (1,304) 210 (1,094) Leases and rentals (4,263) 69 (4,194)
Other operating revenues 575 (29) 546 Other operating expenses (482) 16 (466)
Losses in the disposal of assets (482) 16 (466) Equity pickup (12,397) (7,029) (19,426)
-
Income before financial income and taxes (82,776) (4,571) (87,347) -
Financial income (11,373) 5,171 (6,202)
Financial revenues 180,337 (139,639) 40,698
Exchange variation gain 47,738 (29,052) 18,686 Debentures at fair value 13,000 - 13,000 Financial investment 28,137 (37) 28,100 Derivative financial instruments 89,219 (110,381) (21,162) Other financial revenues 2,243 (169) 2,074
Financial expenses (191,710) 144,810 (46,900)
Exchange variation loss (25,948) 20,587 (5,361) Derivative financial instruments (110,598) 124,005 13,407 Debentures interest/costs (29,035) - (29,035) Other financial expenses (26,129) 218 (25,911)
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Income before taxes on income (94,149) 600 (93,549)
Income and social contribution taxes on income 16,389 (600) 15,789
Current (838) - (838) Deferred 17,227 (600) 16,627
Loss for the period (77,760) - (77,760)
Attributed to shareholders of parent company (77,481) - (77,481)
Attributed to non-controlling shareholders (279) - (279)
Loss per share Basic and diluted loss per share (in R$) (0.56870) - (0.56870)
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4.1 - Description of risk factors
(a) Company related risks
We may be unable to obtain all licenses and permits required to implement and operate our
projects.
We hold or have applied for licenses and permits, or the renovation thereof, as the case may be,
to perform our activities, so that our projects can comply with rules, terms and conditions
established by the regulatory agencies in Brazil. We must obtain various licenses and permits from
different national and international government agencies and bodies, including government
agencies and authorities with jurisdiction over the environment, such as, for example, Brazilian
Environmental Protection Agency (Instituto Brasileiro de Meio Ambiente dos Recursos Naturais
Renováveis, or IBAMA) and other Brazilian and Chilean government agencies. In addition, several
of the contracts we have signed in relation to future operations also require us to obtain such
licenses and permits.
However, we are unable to provide assurance as to whether or when we will be able to obtain all
licenses and permits required to build and operate the plants planned in our project portfolio. Not
obtaining licenses, concessions or permits required for our operations, or their being obtained and
subsequently challenged, could materially and adversely affect our business, financial condition
and results from operations.
We may fail to reach results or projections, or may not fully implement our business
strategy.
Certain information and conclusions included in this Reference Form were based on estimates
prepared our management, as assumptions concerning funds we may have in the future, and in
relation to investment and operating costs. Additionally, we may be unable to fully implement our
business strategy due to inability to conclude our current and future projects without delays or
incurring additional costs; grow while maintaining financial discipline; manage our customer
portfolio efficiently; obtain additional funding as expected; or maintain desired levels of operational
efficiency. Our actual productivity, investments, operating costs and business strategy may turn
out to be substantially less favorable than estimated. Projections stated in this Reference Form
may not, in any circumstances, be regarded as statements, assurances or predictions that we will
or may reach any specific results in the future. We cannot provide assurance that our future results
will not be materially different from those included in this Reference Form. Consequently, current
or potential investors may lose part or all of their investments in our shares in as far as projections
and conclusions stated in this Reference Form fail to materialize.
The construction, expansion and operation of plants, of the blocks in the Paranaíba Basin
and the Seival Mine involve significant risks, including those related to logistic
infrastructure, which may lead to loss of revenues, increased expenses, or any other
adverse effect on our financial condition.
The construction, maintenance, expansion and operation of facilities and equipment used to
generate electricity involve a number of risks, including:
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being unable to obtain governmental permits and licenses;
equipment items not being available;
distribution and / or transmission systems not being available;
fuel supplies being cut off or hydrological and meteorological interference;
stoppage of work, strikes or other labor disputes;
social unrest;
unexpected engineering and environmental problems
delays affecting construction and operation, or costs exceeding those stipulated;
work being halted, including in the port through which we import our coal for certain
projects;
high capital investment requirements;
adequate funding not being available; and
volatile fuel prices.
The construction, maintenance, expansion and operation of natural gas blocks and coalmines
involve a number of risks, including:
geological risks
being unable to obtain governmental permits and licenses;
equipment items not being available;
hydrological and meteorological interference;
stoppage of work, strikes or other labor disputes;
social unrest;
unexpected engineering and environmental problems
delays affecting construction and operation, or costs exceeding those stipulated;
high capital investment requirements;
adequate funding not being available; and
volatile natural gas and coal prices.
Additionally, operation of the plants, natural gas blocks and coal mines depend on infrastructure
and logistics for the conduct of our business during the construction and operation stages of our
projects, which are subject to failures, delays and interruptions that may adversely affect such
operations.
We have not taken out insurance for some of the above risks, and even for risks covered,
insurance may be insufficient. Any of these events or other problems could adversely affect our
ability to generate electricity and / or produce coal and / or natural gas in amounts consistent with
our projections and obligations to our customers, which could have a material adverse effect on
our financial situation and operating results, and on our shares’ market prices.
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Changes in current or future subsidies may have material adverse effects on our results.
Certain tax benefits (deferral, exemption or other) that would benefit ENEVAmay not be applied by
the states in which our projects are located. In the case of these tax benefits not being granted,
our economic-financial estimates may not materialize, and there may be a need for unplanned
expenditures that may adversely affect our business, operating, and financial results.
Construction delays or cost overruns could increase expenses required for to build power
plants, exploit natural gas blocks, or operate our coalmine, as well as result in revenue
losses and imposition of administrative and contractual penalties.
Delays affecting our construction deadlines or cost overruns may lead to increases in spending
projected to build plants, exploit natural gas blocks, and operate our coalmine. Additionally, delays
in completing these projects may lead to initial cash flows being delayed, which could lead to
higher cash requirements. We may also incur project development and construction costs
exceeding original estimates due to interest-rate hikes in the period or higher costs of materials,
labor, or other costs. Additionally, we may be unable to get projects built in time or within budget
due to a range of other factors, including, but not limited to, materials, equipment, technical
capacity or labor being in short supply or not being available; adverse weather conditions; natural
disasters; labor disputes; unforeseen engineering or geological or environmental problems
affecting projects; disputes with contractors and subcontractors; delays in granting licenses,
permits or authorizations from the competent authorities; and other issues and circumstances that
may involve increased costs of developing and operating plants.
Especially for those power plants that entered into electricity purchase and sale agreements on the
regulated market, delays in power plant construction and commercial operation may result in
losses of fixed revenue as established in such agreements and in the penalties set forth therein,
which can vary from a fine and agreement termination to the penalties provided for in regulations
by the National Electricity Agency (“ANEEL”) for non-compliance with the schedule of grants (such
penalties may range from fines - limited to 1% of the estimated amount of energy output during the
12 months before the notice of infraction is issued - to authorization cancellation, in severe cases).
Moreover, in the event of delays leading to non-fulfillment of the relevant energy agreements, we
may have to purchase energy by executing short-term energy agreements with third parties in,
which usually represents greater costs and may compromise our financial profitability and the
quality of the services provided to consumers.
Two of our power plants are currently in commercial operation and have started to meet the supply
conditions included in some late agreements - Pecém II and Parnaíba III. Other power plants
started commercial operation with delay and consequently may suffer revenue losses and
imposition of the penalties described above. Any of these factors could have an adverse effect on
our financial results and business plans.
Delay in the schedule for construction and coming on stream of any of the Plants could also result
in execution of the performance guarantee. In this context, ANEEL Order No. 3.617/2012
determined that the insurance company J. Malucelli Seguradora S.A. should execute the
guarantee, in the amount of R$16,356,500.00, relating to the Parnaíba III undertaking. UTE MC2
Nova Venécia S.A. filed an administrative appeal against this decision, and the execution was
stayed. The stay, however, will only remain in force until the appeal has been judged, and could be
overturned if the appeal is not granted.
Estimates on volume and quality of the natural gas reserves in the blocks in Parnaíba basin
and Seival Mine may be overestimated.
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The natural gas blocks and coal mine reserves described in this Reference Form are estimates
based on evaluation methods used in the corresponding sectors and in assumptions related to the
production and market prices of natural gas and coal. There are many uncertainties inherent to
estimating the quantity of reserves and to forecasting potential future indices for the production of
natural gas and coal, including several factors beyond the Company’s control. Mineral resources
engineering involves estimating mineral deposits that cannot be determined precisely and the
accuracy of any reserves estimates is a function of the quality of data available, as well as of
geological and engineering evaluation and interpretation. Consequently, the Company cannot
guarantee to the investors that the natural gas and coal reserves described in this Reference Form
will be recovered or that they will be recovered at the expected rates. The Company may need to
review the useful life of the coal mine and of the natural gas blocks based on their actual
production and on other factors. For example, fluctuations in the market prices of natural gas and
coal, reduction of the reserves recovery rates, higher income or increase in operating and capital
costs due to inflation, exchange rates, or other factors may make mining or exploring determined
reserves expensive and may result in re-allocating the Company’s reserves. The Company might
be significantly and adversely affected if the number of its reserves referring to the blocks of
natural gas and coal is lower than estimated, especially if it has to purchase natural gas and coal
from third parties or develop mines in farther locations from the plants.
We may not be capable of generating all the energy we agreed to deliver by contract, which
may have an adverse effect on us.
In our electrical energy purchase and sales agreements, we undertake to generate and deliver
certain amounts of electrical energy. If we are not capable of or if we are prevented from
generating electrical energy in a sufficient amount to meet our obligations, we may have a
reduction in our estimated revenue, which may adversely affect our cash flow and results of
operation. Additionally, we may be obliged to acquire energy by entering short-term energy
agreements, which are usually more burdensome, to meet our obligations, which may compromise
our financial profitability and the quality of our services to consumers.
The natural gas blocks in the Parnaíba basin and the Seival mine may not reach projected
production volumes.
Our operations show significant dependence on production of natural gas by our affiliated, OGX
Maranhão, and on mineral coal by our subsidiary, Seiva Sul Mineração. Our estimates involve
future production from natural gas blocks in the Parnaíba basin and the Seival coal mine. No
assurance may be given that we will reach production volumes as expected. These production
volume estimates depend on the following factors:
concluding projects on time;
accurate estimates of gas and coal resources and reserves;
obtaining the equipment required and its performing properly, as well as skilled labor to
operate it;
soil conditions, including hydrologic conditions;
physical characteristics of coal;
chemical characteristics of natural gas;
accurate indices and estimated costs for producing and processing natural gas;
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accurate indices and estimated costs for coal mining, extraction, processing and
production;
obtaining the necessary rights to exploit and produce (gas) and mine (coal), along with
licenses, authorizations and concessions;
actual production may differ from estimates due to several factors, including the following:
lower than initially estimated reserves;
faults relating to gas wells and mineshafts and their inclination, faults in processing and
treatment units or their equipment;
industrial accidents;
natural phenomena such as weather conditions, floods, droughts and landslides;
interest of our partners (including the majority shareholder of OGX Maranhão and partners
in the exploration of each block) regarding operation of the natural gas blocks may go
against our interests;
financial capacity of our Company and its partners to invest in the natural gas blocks and
coal mines, which is necessary to enable fund their operation;
unusual or unexpected geological conditions;
changing costs of electricity and possible power shortages;
shortages of key inputs and supplies necessary for operations, including explosives, fuels,
chemical reagents, water, spare parts and lubricants;
inability to process certain types of gas or mineral ores;
strikes and lack of manpower;
protests or civil unrest; and
government restrictions or regulations or other regulatory framework alterations.
Due to limited historical data and uncertainties affecting the nature, scope and results of our future
activities, we may not benefit from experience for the purpose of testing estimates, which would
raise the chances of these factors leading to actual results differing from estimates. Our not
reaching estimated production volumes of gas or coal may have a material adverse effect on any
and all future cash flows, profitability, results from operations and financial condition, particularly if
obtaining other sources of natural gas or coal is not possible or feasible.
Unfavorable court or administrative decisions may adversely affect our operating results.
We are a party to various cases involving civil law, labor, pensions and social security or tax
cases, initiated from time to time in the normal course of our business, which involve civil or
commercial matters, real estate, environmental, labor, social security or tax issues, among others.
In the event that actions lead to unfavorable verdicts in proceedings where the chance of dismissal
is regarded as possible or remote, or adversely affect our project deadlines, results from
operations may be adversely affected. In the case of administrative proceedings, unfavorable
administrative decisions may also adversely affect the schedule for implementing our
undertakings. In this context, Amapari Energia S.A., which has its industrial operations in the
Municipality of Serra do Navio, in the state of Amapá, with a capacity of 23 MW, has suffered an
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unfavorable administrative decision, with the vacation of a specific area being determined.
Amapari Energia S.A. has submitted an application for the area to be regularized, which is now
being considered by the Federal Properties Management Superintendence in Amapá. If this
application is refused, our operating results may be adversely affected. For more information on
the relevant proceedings involving the Company and its subsidiaries, see item 4.3 in this
Reference Form.
Since a significant portion of our assets will be related to providing public services, these
assets will not be available to creditors even in the event of bankruptcy and may not be
pledged to ensure enforcement of court rulings.
A significant portion of our generating assets is related to providing public utility services. These
assets would not be available to settle claims in the event of bankruptcy nor may they be pledged
to ensure enforcement of judgments against us, since they must be returned to the concession
authority pursuant to our concession agreements and legislation. In addition, if there is early
termination of concession agreements or permits, the amount of compensation the concession
authority will pay us may be below the market value of the assets returned. These limitations may
significantly reduce amounts available to shareholders in the event of liquidation and may
adversely affect our ability to obtain funding.
We have several projects underway or being implemented and their future performance is
uncertain.
Currently we have several projects being implemented, or which have not reached implementation
phase yet, in addition to those that are being built and the prospecting for natural resources.
Therefore, we are subject to risks, expenses and uncertainties relating to implementation of our
business plan. Implementing projects will depend on our strategic planning and on adopting the
right business, financial, environmental, and logistics strategies required for our operations to
perform properly. We may be unable to successfully implement these strategies, or to effectively
manage the risk inherent to projects, which may adversely affect our revenues.
Our performance in the electricity generation industry in Brazil may be negatively affected
by increasing competition.
In the electricity generation segment, we face increasing competition in ANEEL’s auctions and for
that reason, our development and growth may undergo adverse conditions. The competition in our
sector by state and private companies has increased and that may result in pressure from the
competition by offering lower rates, which may result in a lower profitability level, which may affect
adversely our success in the auctions. In addition, regarding electrical energy trade activities, other
electrical energy suppliers may compete with us in offering electrical energy to consumers
qualified as “free” or potentially “free” consumers. If “free” consumers decide to buy electrical
energy from our competitors, we may be adversely affected, and this may have an impact on our
cash flow and results of operation.
We are significantly dependent on the performance of certain members of management and
losing any of them could adversely affect our ability to implement business strategies and
ensure growth.
Investors buying our shares rely on the ability, expertise, judgment, discretion, integrity and good
faith of our officers. Our performance depends significantly on our senior management’s efforts
and abilities. Any unexpected loss or departure of any of the most important officers, employees or
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consultants, especially our CEO, could prejudice our future success and adversely affect our
business.
Our growth depends on our capacity to attract and maintain highly qualified technical and
administrative personnel.
We strongly depend on the services of technical personnel, as well as those services provided by
members of our administration, to perform our development activities and our project
implementation, as well as in the operation of existing assets. If we lose the main members of this
staff, we will have to attract and train additional personnel for our technical area. Such personnel
may not be available at the moment they are needed or, if they are available, this may have a high
cost. Technical personnel have been highly demanded and we compete for this type of workforce
in a global market offering these services. Attractive opportunities in Brazil and in other countries
may affect our capacity to hire or maintain the talents we need. If we cannot attract and maintain
the key staff we need to expand our operations, we may not be capable of managing our business
effectively, and this may have an adverse effect on us.
Our activities will require substantial capital investments and maintenance costs that we
may not be able to afford.
To meet estimates for levels of production, construction of power plants, natural gas blocks and
our coal mines, and subsequent sale of energy and natural resources, more substantial capital
investment will be needed. Among other purposes, we and our partners in the various plants and
in the exploration of the natural gas blocks, will require capital for managing acquired assets,
acquiring new equipment, maintaining existing equipment in operational conditions, funding
operating costs, obtaining property ownership rights, licenses and permits, and to ensure ongoing
compliance with environmental regulations and legislation. To the extent that funds generated
internally and those arising from loans and financing may be insufficient to fund our capex
requirements, we will have to obtain additional funds through debt and / or issuing securities.
However, this funding may not be available or, may not be available on acceptable terms. Future
funding of our debt, if available, may result in higher debt servicing and amortization costs, higher
levels of leverage and diminution of revenues available to fund further acquisitions and growth of
business. Moreover, future debt financing may limit our ability to withstand competitive pressures
and subject us to more vulnerability in periods of economic crisis. If we are unable to generate
cash or obtain sufficient additional capital in the future, we may be forced to reduce or delay
capital expenditures, sell assets or restructure or refinance our debt.
Our growth through bids may be adversely affected by future government or political
actions related to grants for energy generation plants in Brazil.
The Company intends to participate in bids to receive generation grants. In the invitations to bid for
generation grant, the Granting Authority imposes certain demands on all participants, including
minimum requirements indicating financial stability of the participant and/or its shareholders. We
cannot guarantee that we will be capable of meeting all the necessary requirements to obtain new
grants or to participate in new bidding processes. The rules for generation plants bidding
processes are subject to changes. We cannot guarantee how frequently the bidding processes
related to new energy generating plants will actually take place. If such biddings do not occur, or if
they are held on terms that are not economically feasible or sufficiently attractive to us and to our
controlling shareholder, the expansion and diversification of the current generation park may be
adversely affected and consequently, this may lead to a reduction in the market price of the
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Company’s shares.
Our financial agreements have specific obligations, among which the obligation to maintain
financial indices and restrictions to our indebtedness capacity, and any default due to non-
compliance with these obligations may materially adversely affect us.
The Company is a party to several financial agreements, with a significant level of indebtedness
due to the need for a large volume of financial resources to develop our projects and undertakings.
These financial agreements subject us to certain specific conditions and obligations, as a result of
which significant adverse changes in interest rates and the currency rate in the Brazilian policy
affect us, causing an increase in our future expenses, due to debt charges, or leaving us unable to
renegotiate payment terms, which could reduce our net earnings and, consequently, our capacity
to honor our contractual obligations.
In addition, we could incur additional indebtedness in the future to finance acquisitions or
investments, or for other purposes, or for conducting our business transactions, subject to the
restrictions applicable to our existing debt. If we incur additional debt, the risks associated with our
financial leverage may increase, as well as the possibility that we may not manage to maintain
financial ratios or generate sufficient cash to pay the principal, interest and other charges on the
debt.
Default due to non-compliance with those obligations and conditions, which is not remedied or
waived by the creditors, may result in such creditors’ decision to declare acceleration of maturity of
the balance of the corresponding debt, and this may also result in acceleration of debts under
other financial agreements, and future amounts to become due (principal, interest, and fines) and
that are the subject matter of the respective agreements, may become immediately payable. In the
event of regular or accelerated maturity deriving from default of some of our debts, our assets and
cash flow may be insufficient to fully pay the balance in our financial agreements, which may have
a significant negative effect on our financial condition and results of operation.
We cannot guarantee that we shall have the financial resources to carry out our investment plans
in full, and lack of access to such resources on satisfactory terms and in sufficient amounts may
restrict the future growth and development of our activities, which might adversely affect us. For
more information of our indebtedness, see sections 3.7, 3.8 and 10.1 (f) and (g) of this Reference
Form.
We are liable for any damages resulting from our electrical energy activities, and our
insurance policies may be insufficient to cover such damages.
According to the Brazilian legislation, our Company is liable for damages deriving from electrical
energy generation activities. In addition, our Company may be adversely affected by damages
caused by third parties due to shutdowns or disruptions to its activities not attributed to a specific
member of the ONS. We cannot guarantee that our insurance policies will fully, or even partially,
cover potential damages deriving from our activities, which may have an adverse effect on the
Company.
We may not succeed in retaining the buildings and areas in which our plants are located or are under development, which may adversely affect our activities, financial condition, and operating results.
We have a large portfolio of thermal energy projects, three of which are developed in own areas (Itaqui, Seival TEP, and Parnaíba) and the remainder developed in areas occupied under lease, freelease, easement, right of use, usufruct, or surface (such as Energia Pecém, Pecém II, Amapari, Sul TEP, Seival TEP, Tauá, Açu TEP, among others). We have no means of
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guaranteeing that such areas will not be subject to expropriation, or that no early termination of the contracts legitimizing their occupation will take place. If any of these situations should arise, our financial condition may be adversely affected, possibly causing negative effects on our business and operating results.
(b) Risks relating to our controlling shareholder or group
Our controlling shareholders may make certain decisions in relation to the business
without participation of all shareholders and that may conflict with the interests of all
shareholders.
On the date of this Reference Form, the Controlling Shareholders hold voting powers sufficient for
the following purposes:
designating a majority of members of our board of directors;
casting the deciding vote in relation to altered control of our company even if such
alterations do not reflect the best interests of shareholders;
casting the deciding vote in relation to strategic merger with another company that could
bring significant results for companies involved in the merger;
restricting the opportunity for shareholders other than the controlling shareholders to
receive the difference between carrying value and the amount paid for their shares in any
corporate restructuring, including absorption, merger or demerger, and influence our
company’s dividend policy.
(c) Risks related to our shareholders
We cannot guarantee that shareholders will be paid dividends in the future.
Under our bylaws, shareholders are entitled to an annual mandatory dividend of not less than 25%
of net income, to be decreased or increased by the following amounts: (i) the amount allocated to
legal reserve; and (ii) the amount allocated to the contingency reserve and reversal of reserves
made in prior years. Except for the mandatory minimum dividend required under the Law of
Corporations and our bylaws, any future decision regarding payment of dividends will be made on
a discretionary basis. The decision to distribute dividends will depend on profitability, financial
condition, investment plans, contractual limitations and restrictions imposed under applicable law,
including regulations issued by the CVM, among other factors. Additionally, our ability to pay
dividends depends on our ability to generate profits and to absorb accumulated losses. We cannot
guarantee that shareholders will be paid dividends in the future.
Brazilian stock market volatility and illiquidity may substantially limit investors’ ability to
sell our shares at the desired price and time.
Investment in securities traded in emerging markets such as Brazil, often involves higher risk than
other global markets, and such investments are in general seen as more speculative. The
Brazilian securities market is substantially smaller, less liquid, more concentrated and may be
more volatile than other major stock markets worldwide. Any outflow of foreign capital from Brazil
in times of economic crisis may affect share prices of companies listed on the BM&FBOVESPA.
The market price of our shares may also be affected by various factors unrelated to our
performance, such as economic crises, changing interest rates, exchange-rate controls and
restrictions on remittances abroad, exchange-rate variations, inflation, liquidity in the domestic
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financial and capital market, lending, tax policy and tax regime or other political, social and
economic events.
Additional funding through a share offering could dilute the equity interest of investors.
In the future, we may obtain funding through public or private issues of debt securities, whether or
not convertible into shares, or by issuing shares. Under the Law of Corporations, additional
funding from shares or securities convertible into shares may be obtained with the exclusion of
preemptive rights of our shareholders, which may lead to the dilution of such shareholders equity
interests.
The interests of company officers, and employees in some cases, may become excessively
linked to our share prices, since they may be granted options to purchase or subscribe to
our shares.
The purpose of our stock option program is to enable our officers and employees or those of other
companies under our control, subject to certain conditions, to acquire our shares for the following
reasons: (a) encourage better management of the company and undertakings under our direct or
indirect control; (b) attract, motivate and retain highly qualified executives on our staff; and (c)
make our companies and other EBX group companies more attractive.
The possibility of our managers and employees receiving as part of their remuneration, options to
purchase or subscribe to our shares at a strike price below market price, may lead such officers
and employees to have their interests excessively linked to the price of our shares to the detriment
of their long-term goals, which may negatively impact our business.
(d) Risks related to our subsidiaries and affiliates
Risks related to our subsidiaries and affiliates are the same as those related to our company.
(e) Risks related to our suppliers
We signed Engineering, Procurement and Construction (EPC) contracts for the
construction of projects with Power Purchase Agreements (PPAs). If the EPC
counterparty’s services do not conform to a minimum standard of quality, or do not meet
project specifications, our financial condition and results of operations may be adversely
affected.
We signed energy supply agreements for various of our projects before they are completed and
before their energy generation capacity is installed. For construction of these projects, we enter
into EPC contracts, which must follow the specifications of each project. Failure to comply with
such technical specifications, not meeting levels of quality for services provided, or delays
affecting construction schedules provided for in our EPC contracts may adversely affect our
financial condition and results of operations.
We rely on suppliers of domestic and imported equipment and hire outsourced services for
the construction, operation and maintenance of our projects. If equipment purchased or
used by suppliers, or services provided are not delivered in such a way as to meet
specifications and minimum quality levels for each project, our results of operations may
be adversely affected.
Key equipment for construction of our projects, or their operation and maintenance is purchased
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by contracting Brazilian and / or international companies that are recognized in their fields.
Services supplied to us may not meet quality requirements stipulated, which may lead to our failing
to comply with conditions stated in our concession agreement and may cause accelerated wear
and tear of electric generating assets, or other problems resulting in additional costs and affecting
cash flows of projects and our company, which may adversely impact our financial condition and
operating results. The above may take place in case of unforeseen disruption or suspension of
contracts for supply of equipment or services.
In the case of our suppliers of products and services being hit by cyclical, administrative or
financial impacts affecting delivery of products or services as agreed, our financial
condition and results of operations may be adversely affected.
Our company engages and depends on services and products provided by certain companies.
Conjunctural, administrative or financial impacts may involve these companies and definitively or
partly affect delivery of products or services as agreed, which may lead to impact on operating
results from our projects, due to possible suspension or disruption of supplies, or to difficulty in
engaging other suppliers.
We may be unable to ensure we have all fuel required to generate electricity at our
thermoelectric plants, or be unable to ensure viable conditions for operating them, in which
case, our financial condition and results of operations may be adversely affected.
Supplies of fuel may not be satisfactory, or may be technically impracticable due to production
shortfalls and finding another source of fuel may be uneconomical. Several variables may
contribute to this possibility, but mainly factors related to the risk of operating and producing the
coalmine and natural gas exploration blocks, as mentioned in item (a) above, and the logistical
risks of transporting fuel from its production area to the thermoelectric plants. In these cases, our
financial condition and results of operations may be adversely affected.
(f) Risks Related to Our Customers
We may be liable for losses and damages caused to third parties as a result of failures in
electricity generation at our plants, or outages or disruption that cannot be attributed to
any other electric industry agent, and insurance may be insufficient to cover such losses
and damages.
We may be held liable for (i) loss or damage to third parties due to failures in the operation of our
plants causing outages or disturbances for the distribution and / or transmission system or (ii)
outages or disruption that cannot be assigned to any identified electric industry agent, except in
cases of force majeure. In this case, compensation amounts shall be allocated in the following
proportions: 60% distribution agents, 20% generation agents and 20% transmission agents, which
could lead to materially and adversely affect the conduct of our business, operating results and
financial condition.
Our ability to receive payments owed by clients may be adversely affected in case of
deterioration of such clients’ ability to pay
Receivables from our investees in the generation and trading of electrical energy depends on the
continuous creditworthiness of their clients, control of risk and ability to charge amounts due. If
these clients’ ability to pay deteriorates, this may adversely affect our financial condition and
operating results.
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(g) Risks Relating to Sectors of the Economy in which We Operate
Our market risk management strategy may be ineffective.
We are exposed to normal market risks, such as fluctuating interest rates, exchange rates and
commodity prices. Our hedge transactions, which may also limit potential benefits we could
otherwise enjoy if commodity prices were to rise. In addition, we may decide not to hedge market
risks, or we may use other risk management practices, or such types of transaction may not be
available. Accordingly, in the event our hedging strategy fails to successfully minimize cash flow
exposure to said fluctuations, and in the event we fail to identify correlations between various
market risks to which we are subject, our financial condition may adversely be affect.
Demand for electricity in Brazil may not grow, or may grow less than we estimated, or may
be supplied by other electric generating projects.
Our investments in electric generating projects were based on expected growth of demand for
electricity in the coming years in Brazil. However, demand may not grow or may grow less than we
initially estimated. In addition, any growth of demand, whether less than, equal to, or greater than
the increase we estimated, may be met by other electric generating projects that are now
operating or will come on stream in the future. In this case, estimated revenue from our projects
may be reduced, thus adversely affecting our results.
How our electric generating projects yet to be contracted will materialize depends on the
scenario for future electricity prices, which may differ significantly from the current market
consensus.
Our investments in electric generating projects were based on future electric- price scenarios that
may not occur or may be largely unfavorable for new investments providing attractive returns. In
this case, estimated revenue from our projects may be reduced, thus adversely affecting our
results.
(h) Risks Relating to Regulation of Sectors in which we operate
Extensive governmental legislation and regulation and changes in regulations for the
electric sector may affect our business and results of operations.
Our activities and those of our competitors are regulated and supervised by the National Agency of
Electrical Agency - ANEEL, which implements guidelines from the Ministry of Mines and Energy,
the federal government body responsible for Brazil’s energy policies. Brazil’s electric sector
institutions have historically had a substantial degree of influence on their business, including
energy production, for which dispatch is centralized by the National Electric System Operator
(ONS).
The federal government has brought in new policies for the energy sector through Law 10488 of
March 15, 2004, which introduced the New Electric Industry Model and altered guidelines for
industry agents. Any regulatory measure may have significant impact on our activities and
adversely affect our results.
Among the regulatory changes promoted in the industry, we highlight (i) the creation of the
Chamber of Electrical Energy Trade (“CCEE”) and of new sectoral bodies; and (ii) the changes in
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the Ministry of Mines and Energy - MME and the National Electricity Agency - ANEEL
competencies. According to the Brazilian legislation, ANEEL is authorized to regulate several
aspects of the business of electrical energy generation, transmission, and distribution
concessionaires, in the overall electric industry, including investment needs, incurring additional
expenses, and tax and price calculation (except for the prices of electrical energy in the free
market), as well as the limit to passing on the prices of energy purchase to tariffs charged by the
concessionaires.
The constitutionality of the New Industry Model Law was challenged before the Federal Supreme
Court through direct actions for unconstitutionality. On October 11, 2006, the Federal Supreme
Court denied the provisional measures of the direct actions for unconstitutionality, stating that, in
principle, the New Industry Model Law does not violate the Federal Constitution. The merits of the
direct actions for unconstitutionality are pending judgment, and on January 6, 2009, the Office of
the Attorney General of the Republic ruled in favor of dismissing the request. Should the New
Industry Model Law be declared unconstitutional, the electric power sector agents will be
adversely affected. The full effect of the reforms introduced by the New Industry Model Law and its
continuity, as well as the final result of the action before the Federal Supreme Court and future
reforms in the electric power industry regulation are difficult to predict, and they may have an
adverse effect on our business and results of operation.
Our main commercial activities, the implementation of our growth strategy, and the running of our
business may be adversely affected by government actions, among which: (a) changes in the
legislation applicable to our business; (b) disruptions and/or changes in federal concession
programs; and (c) imposition of stricter criteria to qualify for future bids
ANEEL may apply penalties against us or intervene in authorizations that we may be
awarded for breach of obligations stipulated in concession agreements, permits and
industry laws and regulations.
ANEEL may apply penalties for breach of any stipulation in our concession agreements or permits.
Depending on the severity of the breach, pursuant to current legislation such penalties may
include:
cautions;
fines per breach of up to 2% of our revenues for the year immediately preceding the
current period on the date of violation;
embargoes on construction of new facilities or equipment;
restrictions on operating existing facilities and equipment;
temporary suspension from bidding processes for new concessions or permits; or
forfeiting concessions or permits.
Without prejudice to the above-mentioned penalties, ANEEL may also intervene temporarily in
concessions or permits awarded us to ensure proper operation of generating structure and
compliance with applicable laws and regulations.
Any of the above listed penalties, or ANEEL’s intervention in concessions or permits we may be
awarded, could have a materially adverse effect on our business, operating results and financial
condition, and on the market price of our shares.
We cannot guarantee whether our authorizations will be renewed.
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We conduct our electrical energy generation activities based on authorizations granted by ANEEL,
which are valid for 35 years.
The permits may be revoked in the event of material loss in the development of authorized
activities and/or in the event of holder’s non-compliance, especially, in the event of: I – failure to
comply with schedules, obligations and charges arising from the authorization; II – failure to pay
the amount arising from the penalty imposed on the holder; III – failure to comply with the notice of
inspection to regulate the operation of the authorized venture; IV – trading of electrical energy not
in compliance with the provisions of the legislation, specific rules and authorization act; and V –
termination of the agent of the Electrical Energy Trading Chamber – CEEE for non-compliance,
among others.
Additionally, we cannot guarantee whether our authorizations will be renewed or new
authorizations will be granted upon the expiration of current terms. If these authorizations are not
renewed or granted, or renewed or granted under unfavorable conditions for our Company, our
business and operating and financial results may be adversely affected.
Like the electricity sector, the natural gas and mining sectors are also subject to
government regulation and any changes in the latter may affect our business and results of
operations.
Our activities in the mining and natural gas sectors are subject to regulations applied by local
authorities, therefore regulatory changes may materially affect our projected results. Under the
terms of the Brazilian legislation, the Brazilian Government is the owner of all mineral deposits and
natural gas reserves in Brazil, and the concessionaire has the title only to the ore and/or natural
gas it produces. The Company depends on natural gas to generate electrical energy in some of its
ventures, which are supplied by certain concessionaires duly licensed by the Brazilian
Government. In addition, the National Petroleum Agency (ANP) and the National Department of
Mineral Deposits (DNPM) regulate and supervise the natural gas and mining sector, respectively,
granting concessions for the production of natural gas. Such concessions impose several
obligations on the concessionaires, including concessionaires from which the Company obtains
the natural gas and mineral coal for the generation of electrical energy, and in the event any such
obligations are defaulted, the ANP and/or DNPM are entitled to terminate the concession
agreements. Thus, in the event the Brazilian Government limits or prevents such concessionaires
with which the Company has a relationship from exploiting these natural gas or mineral coal
reserves or in the event the ANP and DNPM impose restrictions that interrupt the natural gas
and/or mineral coal supply to the Company and its controlled companies, its capacity to generate
revenue may be adversely affected, causing a significant adverse effect on the result of its
operations and on its financial condition.
Changes in environmental laws and regulations may adversely affect the business of the
companies operating in the electricity industry, including Our Company.
Companies operating in the electricity industry, in particular generation companies, are subject to
strict federal, state and local environmental legislations regarding, among other things, air
emissions and intervention in protected area. Such companies need licenses and permits from
government agencies to conduct their activities. In the event of breach of or non-compliance with
such laws, regulations, licenses and permits, companies may suffer administrative sanctions such
as fines, suspension of activities, cancellation and revocation of licenses or permits, and, in certain
cases, they may be subject to criminal sanctions (including its management). The Office of the
Federal Prosecutor may file a civil investigation and/or a public civil action seeking compensation
for any damage caused to the environment and third parties. Government agencies or other
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authorities may also issue new stricter rules or adopt more restrictive interpretations of existing
laws and regulations, which may require electricity companies to use additional resources in
environmental remediation, including in obtaining environmental permits for facilities and
equipment not previously subject to environmental licensing. Government agencies or other
authorities may also significantly delay the issuance of licenses and permits required for the
development of electricity companies, causing delays in project implementation schedules. Any
action in this direction by government agencies may adversely affect electricity business and
create a negative effect on our business and results.
The occurrence of environmental damages involving our activities may subject us to
paying substantial environmental remediation costs, including indemnification and
penalties, which could adversely affect our business and the market value of our shares.
The activities of the electricity sector may cause significant environmental impacts and damages.
Federal laws impose strict liability to those who directly or indirectly cause environmental
degradation and therefore the duty to remediate or compensate the damage caused to the
environment and to third parties affected, regardless of willful misconduct or fault. Federal laws
also provide for disregard of corporate veil of the polluting company, holding managers personally
liable, to enable compensation of the damages caused to the environment. As a result, the
Company, its controlling shareholders and managers may be required to bear the cost of
environmental remediation. The payment of substantial environmental indemnifications or relevant
expenses incurred to fund environmental remediation may prevent, or lead our Company to
postpone or redirect investment plans in other areas, which may adversely affect our business and
operations.
(i) Risks relating to our foreign operations
We are subject to operational risks relating to international operations.
In addition to Brazil, we are developing a project that is under analysis and review in Chile, which
is being analyzed and reviewed.
Therefore, the risks referred to in item (a) above are also applicable to ENEVA’s foreign
operations, which involve risks relating to construction of thermoelectric plants, risks related to
exploitation of natural resources, logistical risks, risks related to meeting construction deadlines,
licensing risks, and others.
If one or more of the above-mentioned risk factors should materialize, we may not reach our
strategic objectives in these countries or in our international operations as a whole, which may
adversely affect our operating results and financial condition.
We are subject to social, political and economic risks in relation to our international
operations.
Our international operations include those in countries in which there may be political, economic or
social instability. The operating results and financial condition of our subsidiaries in these countries
may be adversely affected by fluctuating economic conditions, political instability and local
government measures, in addition to other risks including:
controls on currency exchange and prices;
restrictions on exports and imports of natural resources;
local currencies fluctuating against the BRL or USD;
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higher rates of export tax, income tax or royalty payments; or
unilateral institutional (government) or contractual alterations, including controls and
limitations on investments in new projects.
If one or more of the above-mentioned risk factors materializes, we may not achieve our strategic
objectives in these countries or our international operations as a whole, which may adversely
affect our operating results and financial condition.
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4.2 - Comments on expected alterations of exposure to risk factors
Our policy is to continuously monitor risks related to our operations, and macroeconomic or
industry-level changes that may affect our activities. We have not presently identified any increase
or decrease of exposure to the risks factors mentioned in item 4.1.
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4.3 – Non-confidential and relevant legal, administrative or arbitration
proceedings
On April 30, 2013, the Company and its parent companies were party to 108 court
proceedings of which 34 are civil proceedings, 69 are labor claims and 5 are tax
claims, all of them involving an approximate amount of R$22 million, assessed by
external attorneys as not bearing a likely risk of loss, and, therefore, no provision
for contingency was created. The Company and its parent companies are also
party to 51 administrative tax proceedings, labor claims and environmental
proceedings that involve an approximate amount of R$28 million.
As of the date of this Reference Form, our subsidiaries were party to 5
administrative proceedings filed by National Electric Power Agency. These
proceedings involve, among other matters, failure to comply with the schedule for
implementation of generation units, failure to meet dispatch requests made by the
Electric System National Operator and non-compliances related with plants (e.g.
no identification and signs and lack of information in monthly reports filed by our
Company at National Electric Power Agency).
In the scope of these administrative proceedings for inspection, National Electric
Power Agency may impose penalties upon issuance of an assessment notice.
When applying the penalty, National Electric Power Agency will observe the
dosimetry criteria, considering the scope and severity of the breach, potential
damages resulting from this breach, the advantage obtained by the breaching
party and the existence or not of recurrence. Additionally, all administrative
proceedings in question must observe the principles of broad defense and
adversary proceeding, so that our Company may have the opportunity to submit
justifications and exclusions of liability.
The Company and its parent companies are parties to lawsuits and/or
administrative proceedings that, in the opinion of the Company, are individually
considered relevant from a financial perspective as they involve amounts above
R$10,000,000.00 or matters that, if decided against the Company, may affect its
operations or image, as we show below:
Tax Proceedings
On April 30, 2013, the Company and its parent companies are party to 5 court tax
proceedings and 9 administrative tax proceedings. The amount involved in court
proceedings totals approximately R$71 thousand. Of the five court proceedings,
the Company and its subsidiaries are plaintiffs in two of them. The administrative
proceedings, in turn, total approximately R$27.4 million. In all of them the chances
of loss range from possible to remote. For this reason, the Company recorded no
provisions for the respective amounts. The subject matters of the most significant
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proceedings in terms of amounts mainly involve the payment of the Goods and
Services Circulation Tax - ICMS.
Administrative Proceeding 28730.024452 - Assessment Notice No. 505/2011
a. Court State Revenue of the State of Amapá
b. Court Lower administrative court
c. Filing Date November 11, 2011
d. Parties to the Proceeding Plaintiff: State Revenue of the State of Amapá
Defendant: Amapari Energia S.A.
e. Amounts, Goods or Rights
in Dispute
R$14,341,575.39
f. Principal Facts Collection of the Goods and Services Circulation Tax - ICMS due to
alleged lack of payment of tax, due to the improper recognition of the
Goods and Services Circulation Tax - ICMS credit accumulated, resulting
in an outstanding tax debt for April 2009. Further, a fine was imposed for
failure to comply with an accessory obligation.
On November 11, 2011, we learnt about the issue of the notice and, on
December 12, 2011, we filed a challenge. The case records have been
waiting for a decision by the judging body since then.
g. Chances of Loss Possible in the administrative sphere and remote in the legal sphere.
h. Analysis of the Impact if
the Case Is Lost
Only the financial impact referred to in item “e”. A loss in this proceeding
may impact our results in the year this amount becomes payable.
i. Provisioned Amount, in the
Case of Provision
Not applicable because the Company does not make provisions when the
chances of loss are possible and remote.
Administrative Proceeding No. 1/000364/2011 - Assessment Notice Nº 1/201022812
a. Court State Revenue of the State of Ceará
b. Court Second administrative court
c. Filing date January 29, 2011
d. Parties to the Proceeding Defendant: MABE Construção e Administração de Projetos Ltda.
Plaintiff: State of Ceará
e. Amounts, Goods or Rights in
Dispute
R$10,593,732.69
f. Principal Facts January 26, 2011: Collection of formal fine for failure to comply with
ancillary obligation consisting of receipt of goods from other states with tax
documentation lacking transit stamp. August 6, 2012: Assessment notice
still with the lower court. On September 20, 2012, we have filed a
voluntary Appeal. The case records have been waiting for a decision by
the judging body since then.
g. Chances of Loss Remote
h. Analysis of the Impact if the
Case is Lost
Only the financial impact referred to in item “e”. A loss in this proceeding
may impact our results in the year this amount becomes payable.
i. Provisioned Amount, in the Not applicable because the Company does not make provisions when the
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Case of Provision chances of loss are possible and remote.
Civil Proceedings
On April 30, 2013, the Company and its subsidiaries were party to 34 civil lawsuits
and 23 administrative civil proceedings. The amount involved in court civil
proceedings totals approximately R$18 million and, out of the 34 civil lawsuits, we
and our subsidiaries are plaintiffs in eight. The amount involved in administrative
civil proceedings totals approximately R$832 thousand. In all proceedings, the
chances of loss range from possible to remote and, therefore, we did not record a
provision for these amounts. Among the civil proceedings to which the Company
is a party, no matter is the most representative.
Ordinary Proceeding No. 2008.34.00.032541-0
a. Court 3rd
Federal Lower Court of the Judicial District of the Federal District
b. Court Lower court
c. Filing Date October 14, 2008
d. Parties to the Proceeding Plaintiff: Amapari Energia S.A.
Defendant: National Electrical Power Agency
e. Amounts, Goods or Rights
in Dispute
Fuel cost recovery mechanism, CCC-ISOL.
f. Principal Facts Amapari Energia filed a lawsuit with a request for provisional protection
against the National Electric Power Agency, because after granting the
authorization as Independent Power Producer, on August 05, 2008, the
National Electric Power Agency handed down a decision denying the
recovery mechanism related to Fossil Fuel Consumption Account of
Isolated Systems, a tax created by Law No. 5899 of July 5, 1973, further
amended by Law No. 12.111 of December 9, 2009 (“CCC-ISOL”) to
Amapari. On October 29, 2008, the request for provisional protection
was granted. On January 29, 2009 Amapari filed a petition requesting
the immediate execution of the granted protection, with the determination
that an official note be issued to Eletrobrás for the inclusion in the CCC-
ISOL. On July 02, 2009, Amapari filed a petition stating (i) loss of a
subsequent interest in the lawsuit due to the acknowledgment on the part
of the National Electric Power Agency that in a recent decision of its
Executive Board authorized the inclusion of the thermoelectric power
plant, or UTE, in the CCC-ISOL; and (ii) the noncompliance with the
provisional decision. On July 15, 2009, a decision was handed down
declaring the default of the National Electric Power Agency. On July 20,
2009, Amapari filed a request to produce accounting evidence, and on
August 19, 2009 the National Electric Power Agency filed a petition
informing that the evidence present is sufficient for the solution of the
demand and requesting the reconsideration of the decision in which its
default was declared. On August 27, 2009, Amapari filed a petition
repeating the request for the release of the collateral corresponding to
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the months that are no longer the subject-matter of the case and
requesting the official issue to Eletrobrás that the inclusion of the
thermoelectric power plant, or UTE, in the CCC-ISOL mechanism
comprises the fuel purchases made since November 11, 2008, and on
October 02 2009, the National Electric Power Agency filed a petition
stating that it did not agree with the request of partial collateral release.
On October 22, 2009 Amapari repeated the request for collateral
release, and on October 26, 2009, the request of Amapari was
dismissed. Amapari then filed a motion for clarification on November 09,
2009. On March 01, 2010, a decision was handed down rejecting the
Motion for Clarification. On May 13, 2010, a decision was handed down
of the bill of review that grants the provisional protection to release
Amapari form the obligation to maintain the collateral offered by it in the
original pledge. On May 28, 2010, a decision was handed down serving
the parties of the decision handed down by the Regional Federal Court
of the 1st Region that released Amapari from maintaining the collateral.
On July 01, 2010, a petition of the Prosecution Office was filed sending
copies of the official communications 392/PJSN/2008 and
144/PJSN/2010 and of the Partnership Instrument executed in 2008 with
Amapari. On July 27, 2010, a complied warrant was entered of record by
means of which the National Electric Power Agency was summoned to
comply with the court decision releasing Amapari from the obligation to
maintain the offered collateral. On September 30, 2010, a petition of the
National Electric Power Agency was entered of record explaining that the
release makes the action of the authority dispensable. On September 30,
2010, a petition of the National Electric Power Agency was entered of
record explaining that the release makes the action of the authority
dispensable. On November 09, 2010, a decision was published
determining that the plaintiff file a statement on the petition of the
National Electric Power Agency. On November 12, 2010, a petition was
filed by Amapari informing that it was aware of the statement of the
National Electric Power Agency, as well as requesting the continuation of
the case with the conduction of an expert analysis. On May 26, 2011, a
decision was published that dismissed the request for an expert analysis
made by Amapari, on grounds that there is no claim for damages in the
complaint. On May 31, 2011, a motion for clarification was filed by
Amapari, indicating an omission in the decision that dismissed the
request for an expert analysis for not having regarded the fact that the
order that the National Electric Power Agency pay damages makes the
request expressed in the complaint dispensable, in view of the fact that it
is a conversion of the affirmative covenant concerning the period in
which the authority did not include the Thermoelectric Power Plant Serra
do Navio in the CCC-ISOL, in spite of a decision in that sense. On
August 08, 2011, the motion for clarification was rejected. On July 25,
2012, a decision was published that the parties should file their final
briefs. On November 09, 2012, the records with the final briefs of
Amapari and the National Electric Power Agency were sent to the judge,
to be taken under advisement.
g. Chances of Loss Possible
h. Analysis of the Impact if the
Case Is Lost
In the event the case is lost, Amapari would have to reduce the
outstanding balance (receivable) in the amount of R$24,6 million, for the
result (loss).
i. Provisioned Amount, in the Not applicable because the Company does not make provisions when
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Case of Provision the chances of loss are possible.
Action of trespass No. 9236-03.2012.8.10.0001
a. Court 2nd Lower Civil Court of the Judicial District of São Luís – MA
b. Court Lower court
c. Filing Date March 4, 2012
d. Parties to the Proceeding Plaintiff: Lurdimar Santos Magalhães
Defendant: ENEVAS.A. (UTE Porto do Itaqui Geração de Energia S.A.)
e. Amounts, Goods or Rights
in Dispute
Area of 2500 square meters located at Estrada de Porto Grande No. 6,
close to Vila Maranhão, where ENEVA was to construct an electricity
transmission tower.
f. Principal facts
The Plaintiff filed an action of trespass against ENEVA S.A. (UTE Porto do
Itaqui), alleging that she had undisturbed and peaceful possession of
Estrada de Porto Grande No. 06, close to Vila Maranhão. She alleges that
ENEVA constructed an electricity transmission tower occupying 40 square
meters, in addition to the transmission network area where nothing may be
planted. She demanded that the defendant be sentenced to pay an
indemnity in the amount of R$50,000,00 (fifty thousand Reais). ENEVA
(UTE Porto do Itaqui) filed its defense on September 4, 2012. The plaintiff
was notified on October 18, 2012, to file a reply, but has not done so. The
case records were sent to the judge on December 6, 2012.
g. Chances of Loss Possible
h. Analysis of the Impact if
the Case is Lost
Only the financial amount in dispute.
i. Provisioned Amount, in the
Case of Provision
Not applicable because the Company does not make provisions when the
chances of loss are possible.
Action for damages No. 36066-74.2010.8.10.0001
a. Court 8th Lower Civil Court of the Judicial District of São Luís – MA
b. Court Lower court
c. Filing Date October 25, 2010
d. Parties to the Proceeding Plaintiff: Maria do Socorro Santos and others
Defendant: UTE Porto do Itaqui Geração de Energia S.A.
e. Amounts, Goods or Rights
in Dispute
Request for interlocutory relief for defendant to suspend construction works
on the Itaqui Thermoelectric Plant while this claim is in progress, on
penalty of a daily fine to be fixed by the Judge. Payment of material
damages amounting to R$1,415,000 (one million four hundred and fifteen
thousand Reais) and moral damages to be fixed by the Judge.
f. Principal facts
The plaintiffs filed an action for damages with a claim for interlocutory relief
owing to the alleged occupation by the defendant of an area belonging to
the plaintiffs. They claim (i) an interlocutory relief ordering the defendant to
suspend work on the Itaqui Thermoelectric Plant while this case is in
progress, on penalty of a daily fine to be fixed by the Judge; (ii) that the
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defendant be sentenced to pay an amount of R$1,415,000 (one million four
hundred and fifteen thousand Reais) for material damages, plus moral
damages to be fixed by the Judge. The defendant filed its defense on
February 4, 2011. The plaintiffs filed a petition on September 1, 2011,
reiterating the request for an injunction to be granted for the removal of the
transmission line from the land supposedly belonging to the plaintiffs. The
case records were sent to the judge on September 5, 2011.
g. Chances of Loss Possible
h. Analysis of the Impact if
the Case is Lost
Only the financial amount in dispute.
i. Provisioned Amount, in the
Case of Provision
Not applicable because the Company does not make provisions when the
chances of loss are possible.
Action for Repossession No. 36.445/2009
a. Court 3rd Lower Civil Court of the Judicial District of São Luís – MA
b. Court Lower court
c. Filing Date September 30, 2009
d. Parties to the Proceeding Plaintiff: Companhia Operadora Portuária do Itaqui - COPI (“COPI”)
Defendant: UTE Porto do Itaqui Geração de Energia S.A.
e. Amounts, Goods or rights
in Dispute
Possession of land in the Industrial District of São Luís – MA and
sentencing of defendant to pay damages due to the time the defendant
occupied the property.
f. Principal facts
The Plaintiff filed an action repossession claiming damages for the purpose
of being granted an injunction for repossession of land measuring
88,124.75 square meters in the Industrial District of São Luís – MA and
sentencing of defendant to pay damages due to the time the defendant
occupied the property. The defendant filed its defense on April 20, 2010.
The injunction requested by COPI was denied in a ruling dated September
1, 2011, since the plaintiff had not proved possession, a legal requirement
of article 927, paragraph I, of the Civil Procedure Code. This decision was
appealed (Case No. 0005318-28.2011.8.10.0000) by COPI, and the
suspensive effect was denied in a ruling rendered on October 21, 2011, by
Judge Jaime Ferreira de Araújo. On January 12, 2012, the Court of Justice
of the State of Maranhão ruled against COPI’s appeal. The plaintiff
submitted a special appeal against this decision, which was not accepted
by the President of the Court of Justice of the State of Maranhão, in a final
and unappeallable decision. The case was sent to the judge on November
1, 2012, and is probably pending trial.
g. Chances of Loss Possible
h. Analysis of the Impact if
the Case is Lost
Only the financial amount in dispute is R$88,124.75.
i. Provisioned Amount, in the
Case of Provision
Not applicable because the Company does not make provisions when the
chances of loss are possible.
Action for Annulment of Public Deeds of establishment of easement No. 37.156/2009
a. Court 4th Lower Court of the Public Treasury of the Judicial District of São Luis -
MA
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b. Court Lower court
c. Filing Date December 1, 2009
d. Parties to the Proceeding Plaintiff: Maria Cristina dos Santos Bittencourt et al
Defendant: UTE Porto do Itaqui Geração de Energia S.A. et al
e. Amounts, Goods or rights
in Dispute
Rights related to the deed of establishment of easement
f. Principal facts
The action was filed on December 1, 2009. On February 11, 2010, an
order was issued granting free legal aid and determining that the defendant
be summoned to file a defense. Case records sent to the judge on July 21,
2010, in view of the plaintiff’s filing for interlocutory relief.
g. Chances of Loss Possible
h. Analysis of the Impact if
the Case is Lost
Only the financial amount in dispute, R$255,000,00.
i. Provisioned Amount, in the
Case of Provision
Not applicable because the Company does not make provisions when the
chances of loss are possible.
Action of trespass No. 5923.34.2012.8.10.0001
a. Court 1st Lower Civil Court of the Judicial District of São Luís – MA
b. Court Lower court
c. Filing Date February 1, 2012
d. Parties to the Proceeding Plaintiffs: José Ribamar Figueiredo and Emília Campos Figueiredo
Defendant: UTE Porto do Itaqui Geração de Energia S.A.
e. Amounts, Goods or rights
in Dispute
Area where the Thermoelectric Plant is to be built, which had supposedly
been occupied by the defendant, and sentencing of the latter to pay
damages.
f. Principal facts
The plaintiffs filed this action claiming to be the owners of an area located
in Vila Maranhã, where they allege that the defendant built 3 electricity
transmission towers without their authorization, violating their rights of
ownership. They thus allege that the defendant trespassed on their
property. They claim that the defendant be sentenced to vacate the land
and to pay damages. The defendant filed its defense on May 25, 2012. The
plaintiffs filed their reply on August 27, 2012. Preliminary hearing to be held
on August 21, 2013, at 10.30 a.m.
g. Chances of Loss Possible
h. Analysis of the Impact if
the Case is Lost
Only the financial amount in dispute is R$1,000.00.
i. Provisioned Amount, in the
Case of Provision
Not applicable because the Company does not make provisions when the
chances of loss are possible.
Action for Repossession No. 15.042/2009
a. Court 5th Lower Civil Court of the Judicial District of São Luís – MA
b. Court Lower court
c. Filing Date May 27, 2009
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d. Parties to the Proceeding Plaintiff: Florindo Mota dos Santos
Defendant: ENEVAS.A.
e. Amounts, Goods or rights
in Dispute
Area used by the UTE Porto do Itaqui in constructing the Thermoelectric
Plant.
f. Principal facts
On April 16, 2012, a ruling was rendered partially granting the Special
Appeal and denying the special appeal filed by Florindo (published on April
18, 2012). The plaintiff filed an appeal in the case records. On May 30,
2012, we filed our appellee’s brief. On June 6, 2012, the case records were
sent to the Superior Court of Justice for the special appeal submitted by
the plaintiff to be examined. In the Court of Appeals, the proceeding was
distributed to Justice Isabel Gallotti of the Fourth Division and is pending
examination since June 18, 2012.
g. Chances of Loss Remote
h. Analysis of the Impact if
the Case is Lost
Only the financial amount in dispute of R$10,000.00.
i. Provisioned Amount, in the
Case of Provision
Not applicable because the Company does not make provisions when the
chances of loss are remote.
Extrajudicial Execution Instrument No. 49046-19.2011.8.10.0001 (49.354/2011)
a. Court 1st Lower Civil Court of the Judicial District of São Luís – MA
b. Court Lower court
c. Filing Date October 20, 2011
d. Parties to the Proceeding Plaintiff: Alberto Mendes de Araújo and others
Defendant: UTE Porto do Itaqui Geração de Energia S.A.
e. Amounts, Goods or rights
in Dispute
Properties assigned by the defendant to the plaintiffs upon expropriation of
land located in the area where the Thermoelectric Plant will be built.
f. Principal facts
The plaintiffs filed this execution alleging that when the expropriation took
place from the former residents of the said village, an agreement was
signed stating that the Thermoelectric Plant Porto de Itaqui would give
each resident a property worth R$48,000,00 (forty-eight thousand Reais)
as an indemnity. They state, however, that the amount shown in the deeds
for these properties is R$28,000,00 (twenty-eight thousand Reais). They
therefore request that the defendant be sentenced to pay the difference,
which comes to a total amount of R$400,161,00 (four hundred thousand
one hundred and sixty-one Reais). A motion to stay execution was filed on
September 21, 2012, and was sent to the judge. The motion to stay
execution defended the thesis of mere material error in registering the
property, and it was stated that the notary office was correcting the deeds
to show the correct value. On November 28, 2012, a petition was filed
requesting the corrected property certificates to be filed and the proceeding
to be cancelled without prejudice since the proceeding was no longer of
interest. Pending examination.
g. Chances of Loss Possible
h. Analysis of the Impact if
the Case is Lost
Since the property certificates have been corrected, the action will lose its
purpose.
i. Provisioned Amount, in the
Case of Provision
Not applicable because the Company does not make provisions when the
chances of loss are possible.
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Environmental
As of April 30, 2013, the Company and its subsidiaries were party to 10 legal proceedings related
to environmental issues. In these cases, it is not possible to measure the real impact on the
Company’s financial and equity condition in the event of loss, since the majority of these
proceedings involve questions about the environmental licenses granted to the Itaqui and Energia
Pecém thermoelectric plants. In all these proceedings, the probability of loss is ranked as possible
or remote, and so no provision is made for the corresponding amounts.
We are also party to civil investigations into supposed irregularities in the licensing process for our
operations. On the basis of information produced during a civil investigation with no assigned
value, if applicable, the Prosecutor’s Office may propose the execution of a Term for Adjustment of
Conduct on environmental obligations, as well as file a Public Civil Action, for example, for
damages or the regularization of the environmental process, which may involve significant
amounts.
Public-interest Civil Action No. 2008001260819
a. Court Single Lower Court of the Judicial District of São Gonçalo do Amarante
– State of Ceará
b. Court Lower court
c. Filing Date April 17, 2008
d. Parties to the Proceeding Plaintiff: Public Prosecution of the State of Ceará
Defendants: ENEVA S.A, Pecém II and State Office for Environment –
SEMACE
e. Amounts, Goods or Rights in
Dispute
Environmental licenses granted for the Energia Pecem Thermoelectric
Power Plant
f. Principal Facts Public-interest civil action in which the annulment of the environmental
licenses granted to the Energia Pecém Thermoelectric Power Plant is
requested. Reply and objection of the amount in dispute entered of
record by ENEVA on June 04, 2008. Decision handed down on March
04, 2009, admitting such objection to change the amount in dispute to
R$2,000,000.00. Against such decision a bill of review was filed by
ENEVA and by the Office of the Public Defender of the State of Ceará
that are still awaiting judgment. In the records of the principal action,
ENEVA filed a petition on June 12, 2009, requesting the sending of the
records to the Federal Justice for processing and deciding on this case,
when also the connection with federal public-interest civil action No.
2008.81.00.012450-9 should be analyzed. Awaiting decision on the
jurisdiction for processing and deciding on the action and on the request
for summary judgment made by the Office of the Public Defender of the
State of Ceará. On May 07, 2012, a decision was handed down
determining the sending of the records to the 4th Lower Federal Court to
represent on the jurisdiction for the decision on the case. On September
09, 2012, the judge of the 4th
Federal Lower Court handed down a
decision in which he judged the request moot and determined that the
case be remanded to the State Justice.
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g. Chances of Loss Possible
h. Analysis of the Impact if the
Case Is Lost
It is not possible to measure the real impact of a loss on our financial
and equity condition, given that the amount in dispute has not been
established.
i. Provisioned Amount, in the
Case of Provision
Not applicable because the Company does not make provisions when
the chances of loss are possible.
Public-interest Civil Action No. 00169183820094058100 (2009.81.00.016918-2)
a. Court 10th
Federal Lower Court of the State of Ceará
b. Court Lower court
c. Filing Date December 11, 2009
d. Parties to the Proceeding Plaintiff: Federal Prosecution Office
Defendants: State of Ceará, the Environment State Superintendence -
SEMACE, Brazilian Institute for Environment and Renewable Natural
Resources – IBAMA, Companhia Siderúrgica do Pecém – CSP, Porto
do Pecém Geração de Energia S.A. and MPX Pecém II Geração de
Energia S.A.
e. Amounts, Goods or Rights in
Dispute
Land where the enterprises Thermoelectric Power Plants Porto do
Pecém I and II are located, as well as their environmental licenses.
f. Principal Facts Public-interest civil action with request for provisional protection in order
to ensure the delimitation of Indigenous Land Anacé in the area of the
Industrial and Port Complex of Pecém – CIPP.
Previous statement filed by Porto do Pecém and MPX Pecém II, on
January 11, 2010. Injunction dismissed on January 25, 2010. Against
such decision, the Federal Prosecution Office filed a bill of review on
February 02, 2010 that was dismissed on December 07, 2010. In the
main case, on February 25, 2010, the objection of the companies Porto
do Pecém and MPX Pecém II was entered of record. On September 02,
2010, a decision was handed down granting the request of the Federal
Prosecution Office for suspension of the case for 180 days. Porto do
Pecém and MPX Pecém II filed an interlocutory appeal to be decided on
appeal from final judgment. On May 20, 2011, the records were attached
to Public-interest Civil Action No. 0002218-23.2010.4.05.8100. On July
20, 2011, a decision was handed down determining the issue of an
official communication to the National Indian Foundation for information
on the existence of the Anacé tribe in the area of the Complex.
According to the information provided by the National Indian Foundation
that it had not yet completed the necessary measures for such
verification, on April 11, 2012, a decision was handed down determining
the suspension of the case for 90 days. On August 31, 2012, a decision
was handed down determining a new official communication to the
National Indian Foundation for information on the existence of the Anacé
tribe in the area of the Complex. On January 09, 2013, the decision
determining the suspension of the case for 90 days was published
again.
g. Chances of Loss Possible.
h. Analysis of the Impact if the It is not possible to measure the real impact of a loss on our financial
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Case Is Lost and equity condition, given that the amount in dispute has not been
established.
i. Provisioned Amount, in the
Case of Provision
Not applicable because the Company does not make provisions when
the chances of loss are possible.
Public-interest Civil Action No. 200881000124509
a. Court 4th
Federal Lower Court of Fortaleza / State of Ceará
b. Court Lower court
c. Filing Date August 19, 2008
d. Parties to the Proceeding Plaintiff: Federal Prosecution Office
Defendant: Porto do Pecém Geração de Energia S.A., Brazilian Institute
for Environment and Renewable Natural Resources (“IBAMA”) and the
Environment State Superintendence - SEMACE
e. Amounts, Goods or Rights in
Dispute
Licensing of the Thermoelectric Power Plant Porto do Pecém.
f. Principal Facts Public-interest civil action arguing with the impossibility of continuation
of the works of the Thermoelectric Power Plant Porto de Pecém while
the Industrial and Port Complex of Pecém is not licensed and
questioning the state jurisdiction for the environmental licensing of the
enterprise.
Injunction partially granted on November 24, 2008, to determine the
standstill of the works until the licensing is made by the Brazilian
Institute for Environment and Renewable Natural Resources (“IBAMA”).
Bill of review filed by Porto do Pecém on November 26, 2008, to which
staying effects were granted on December 05, 2008. On June 08, 2010,
the bill of review was granted. In the principal case, an objection was
filed by Porto do Pecém on January 07, 2009. On April 08, 2011, an
order was handed down abandoning the case without trial on the merits.
The Federal Prosecution Office filed an appeal on April 26, 2011 that
was admitted only with effect of review. On June 08, 2011, we filed our
brief of respondent. On July 29, 2011, the “IBAMA filed its brief of
respondent and on August 31, 2011, SEMACE filed its brief of
respondent. On September 06, 2011, a decision was handed down
determining the return of the case to the Federal Regional Court of the
5th
Region for judgment of the appeal filed by the Federal Prosecution
Office. Case held under advisement at the Federal Regional Court of
the 5th
Region since then. On August 07, 2012, the appeal was
dismissed. On September 16, 2012, the case was received by the
Federal Regional Prosecution Office of the 2nd
Region. On September
27, 2012, the case was definitively remanded. On October 05, 2012, a
decision was handed down determining the definitive shelving of the
case.
g. Chances of Loss Remote
h. Analysis of the Impact if the
Case Is Lost
Not applicable.
i. Provisioned Amount, in the Not applicable because the Company does not make provisions when
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Case of Provision the chances of loss are remote.
Provisional Remedy No. 2009.81.00.006337-9
a. Court 4th
Federal Lower Court of the State of Ceará
b. Court Lower court
c. Filing Date May 16, 2009
d. Parties to the Proceeding Plaintiff: Federal Prosecution Office
Defendant: State of Ceará, Brazilian Institute for Environment and
Renewable Natural Resources - IBAMA, the Environment State
Superintendence - SEMACE and Porto do Pecém Geração de Energia
S.A.
e. Amounts, Goods or Rights in
Dispute
Environmental licenses granted to Porto do Pecém Geração de Energia
S.A. for the installation of a thermoelectric power plant in an area
located in the Industrial and Port Complex of Pecém – CIPP.
f. Principal Facts Provisional Remedy with request for provisional protection (assigned in
connection with Public-interest Civil Action No. 2008.81.00.012450-9) in
which the following is requested: (i) standstill of the installation works of
the Thermoelectric Power Plan; (ii) that the Environment State
Superintendence - SEMACE refrains from issuing any renewal of the
licenses already granted or any new environmental license for the
enterprise in question until the errors and omissions indicated by the
Federal Prosecution Office are corrected.
Previous defense and objection filed by Porto do Pecém, on May 06,
2008 and October 07, 2009, respectively. Provisional injunction
dismissed on March 16, 2010. Against such decision, the Federal
Prosecution Office filed a bill of review on April 13, 2010, with a request
of staying effects, which was dismissed by a decision published on April
30, 2010. On September 29, 2010, the appeal was dismissed. In the
principal case, a reply was filed on April 14, 2011. On May 11, 2011, an
order was handed down dismissing the request. On September 28,
2011, the Federal Prosecution Office filed an appeal against such
decision. The brief of respondent of Porto do Pecém and the
Environment and Renewable Natural Resources - IBAMA and the
Environment State Superintendence -SEMACE was filed. On March 27,
2012, the case returned from the Federal Prosecution office with a
petition. On August 27, 2012, the case was sent back to the Federal
Regional Court of the 5th
Region with the brief or respondent to the
appeal On December 11, 2012, the case was sent to the judge to be
held under advisement with the opinion of the Federal Prosecution
Office.
g. Chances of Loss Possible.
h. Analysis of the Impact if the
Case Is Lost
It is not possible to measure the real impact of a loss on our financial
and equity condition, given that the amount in dispute has not been
established.
i. Provisioned Amount, in the
Case of Provision
Not applicable because the Company does not make provisions when
the chances of loss are possible.
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Public-interest Civil Action No. 15.542/2007
a. Court Lower Court of the Public Treasury of São Luís / State of Maranhão
b. Court Lower court
c. Filing Date July 02, 2007
d. Parties to the Proceeding Plaintiff: State Prosecution Office of Maranhão
Defendant: Thermoelectric Power Plant Porto do Itaqui Geração de
Energia S.A., State of Maranhão and EDP – Energias do Brasil S.A.
e. Amounts, Goods or Rights in
Dispute
Preliminary license of the Thermoelectric Power Plant Porto de Itaqui
granted by the Environment and Natural Resources Office of the State of
Maranhão – SEMA
f. Principal Facts Public-interest civil action that requests the nullity of the preliminary
license for lack of presentation of the Environmental Impact Study and
its respective Environmental Impact Report – EIA-RIMA.
Objections filed by the Thermoelectric Power Plant Porto do Itaqui and
by EDP on February 01, 2008 and May 26, 2009, respectively. On
August 03, 2009, MPE filed its reply. On May 24, 2010, the
Thermoelectric Power Plant Porto do Itaqui filed a petition requesting
that the case be dismissed without prejudice. On April 07, 2011, EDP
filed a petition requesting its exclusion as defendant of the action. On
September 20, 2011, a decision was handed down that determined the
connection of this action with Public-interest Civil Action No.
26.458/2007 and scheduled a date for the initial hearing and judgment.
On January 13, 2012, a motion for clarification was filed for. On February
08, 2012, after the petition requesting postponement, the hearing was
suspended and a term of 10 days was granted to each party to represent
on the preliminary questions. On April 11, 2012, the records with the
motion for clarification were sent to the judge to be held under
advisement. On November 12, 2012, an order was issued for
designation of a hearing, but as the court went into recess this did not
occur. A new date had not been set for the hearing by April 22, 2013.
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g. Chances of Loss Possible
h. Analysis of the Impact if the
Case Is Lost
No impact in view of the fact that the licensing proceeding was
transferred to the Environment and Renewable Natural Resources -
IBAMA and new and installation licenses were issued.
i. Provisioned Amount, in the
Case of Provision
Not applicable because the Company does not make provisions when
the chances of loss are possible.
Public-interest Civil Action No. 26.458/2007
a. Court Lower Court of the Public Treasury of São Luís / State of Maranhão
b. Court Lower court
c. Filing Date November 22, 2007
d. Parties to the Proceeding Plaintiff: State Prosecution Office of Maranhão
Defendants: Thermoelectric Power Plant Porto do Itaqui Geração de
Energia S.A. and Municipality of São Luís
e. Amounts, Goods or Rights in
Dispute
Certificate of use and occupancy of the soil of the Thermoelectric Power
Plant Porto do Itaqui
f. Principal Facts Public-interest civil action in which the suspension of the effects of
Municipal Decree No. 32.439/2007 that admits the possibility of an
installation of the Thermoelectric Power Plant in the Industrial District of
São Luis, as well as the certificate of use and occupancy of the soil.
Objections filed by the Thermoelectric Power Plant Porto do Itaqui and
by the Municipality of São Luís on June 04, 2008 and August 05, 2009
respectively.
On September 20, 2011, a decision was handed down that determined
the connection of this case with Public-interest Civil Action No.
26.458/2007 and scheduled a date for the initial hearing and judgment.
On January 13, 2012, a motion for clarification was filed. On February
08, 2012, after the petition requesting postponement, the hearing was
suspended and a time of 10 days was granted for each party to
represent on the preliminary questions. On April 11, 2012, the records
were sent to the judge for advisement with the motion for clarification.
On April 23, 2012, a decision was handed down that dismissed the
motion for clarification and scheduled the initial hearing and judgment on
June 27, 2012. The hearing was not held because the court went into
recess, and no new date had been set by April 22, 2013. On April 15,
2013, a precatory letter was filed and the case records were sent to the
judge.
g. Chances of Loss Possible
h. Analysis of the Impact if the
Case Is Lost
It is not possible to measure the real impact of a loss on our financial
and equity condition, given that the amount in dispute has not been
established.
i. Provisioned Amount, in the
Case of Provision
Not applicable because the Company does not make provisions when
the chances of loss are possible.
Public-interest Civil Action No. 2008.37.00.003564-6 (0003446-23.2008.4.01.3700)
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a. Court 6th
Federal Lower Court of the State of Maranhão
b. Court Lower court
c. Filing Date May 13, 2008
d. Parties to the Proceeding Plaintiff: Brazilian Institute for Environment and Renewable Natural
Resources - IBAMA, State Prosecution Office of Maranhão and Federal
Prosecution Office
Defendants: State of Maranhão and Thermoelectric Power Plant Porto
do Itaqui Geração de Energia S.A.
e. Amounts, Goods or Rights in
Dispute
Licensing of the Thermoelectric Power Plant Porto do Itaqui
f. Principal Facts Public-interest civil action with provisional injunction in which the nullity
of all administrative acts carried out by the state environmental body with
regard to the environmental licensing process of the Thermoelectric
Power Plant Porto do Itaqui, as well as the transfer of the licensing to the
IBAMA is requested.
The provisional injunction was partially granted on May 26, 2008 to
determine the suspension of the works of the Thermoelectric Power Plan
until the question of the licensing jurisdiction is decided. A bill of review
was filed by the Thermoelectric Power Plant Porto do Itaqui on May 27,
2008. Decision handed down on June 03, 2008 that determined that the
licensing studies and processes of the Thermoelectric Power Plant
pending before the State Environment Office - SEMA be assessed by
the Environment and Renewable Natural Resources - IBAMA for the
analysis of a possible use and continuation of the licensing. On May 06,
2009, a petition was filed by the Thermoelectric Power Plant Porto do
Itaqui requesting that the lawsuit be dismissed. The case was remanded
to the 8th
Federal Lower Court. On April 20, 2012, a decision was
handed down with the examination of the merit granting the request in
which the acts carried out in connection with the environmental licensing
before State Environment Office - SEMA were declared null and the
Thermoelectric Power Plant Porto do Itaqui ordered to an obligation to
do consisting of the submission of the licensing request to the IBAMA
and to pay the attorney’s fees, exclusively determined in favor of the
IBAMA in the amount of R$100,000.00. On May 07, 2012, we filed a
Motion for Clarification. Records held under advisement. On October 11,
2012, the Motion for Clarification filed by the Thermoelectric Power Plant
Porto do Itaqui was rejected. On November 19, 2012 and December 11,
2012, the Thermoelectric Power Plant Porto do Itaqui and the State of
Maranhão filed their respective appeals.
g. Chances of Loss Possible. It should be noted that the purpose of the action is to transfer
authority to issue the license from the state to the federal body. The
company voluntarily restarted the process of obtaining the environmental
license from the federal body and obtained all the licenses necessary
from it (Preliminary License, Installation License and Operation License).
Accordingly, the Company believes that this action has lost its purpose,
and should therefore not be classified as a probable loss.
h. Analysis of the Impact if the
Case Is Lost
Not applicable as the licensing proceeding was transferred to the
Environment and Renewable Natural Resources - IBAMA, which issued
new and installation licenses.
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i. Provisioned Amount, in the
Case of Provision
Not applicable because the Company does not make provisions when
the chances of loss are possible.
Public-interest Civil Action No. 18069-24.2010.4.01.3700
a. Court 8th
Federal Lower Court of the State of Maranhão
b. Court Lower court
c. Filing Date June 11, 2010
d. Parties to the Proceeding Plaintiff: Federal Prosecution Office
Defendants: Thermoelectric Power Plant Porto do Itaqui Geração de
Energia S.A. e the Environment and Renewable Natural Resources -
IBAMA
e. Amounts, Goods or Rights in
Dispute
Environmental licensing of the Thermoelectric Power Plant Porto do
Itaqui
f. Principal Facts Public-interest civil action with request for provisional protection in which
the Federal Prosecution Office requests the declaration of nullity of the
licenses issued by the Environment and Renewable Natural Resources -
IBAMA, which authorize the installation of the Thermoelectric Power
Plant Porto do Itaqui. The Thermoelectric Power Plant Porto do Itaqui
filed its previous statement on July 29, 2010. On November 16, 2010, a
decision was handed down dismissing the request for provisional
protection. The Thermoelectric Power Plant Porto do Itaqui filed its
objection on January 07, 2011. On April 28, 2011, a reply was filed by
the Federal Prosecution Office. On May 26, 2011, the records were
returned by the Office of the General Counsel of the Republic. On
February 23, 2012, a decision was handed down in which it was
determined that a technical expert analysis be conducted, summons of
the Environment and Renewable Natural Resources - IBAMA to provide,
within 10 days, information on the question whether or not the conditions
for the installation licenses were met, summons of the Environment and
Renewable Natural Resources - IBAMA and of the Thermoelectric
Power Plant Porto do Itaqui to provide, within 30 days, information on
the implementation of the monitoring station João Paulo and an
implementation prognosis, after producing expert evidence, determining
the conduction of a public hearing in the hearing room of the Judicial
District for the testimony of persons with experience and authority in the
matter, including technicians of the parties. On May 16, 2012, expert
Andreia Pereira Amorim was served of the decision handed down that
granted the conduction of a technical analysis and the receipt of the
records by the expert. On August 10, 2012, the Thermoelectric Power
Plant Porto do Itaqui filed a Motion for Clarification against such decision
to understand that the new expert analysis was not requested by the
Federal Prosecution Office and that the Judge explains his motivation for
the reversal of the burden of proof. On April 11, 2013, we filed appellee’s
brief against the Motion for Clarification and the notice was returned to
the expert Andreia Pereira Amorim with its purpose fulfilled. On April 19,
2013, the case records were sent to the judge.
g. Chances of Loss Possible
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h. Analysis of the Impact if the
Case Is Lost
Not applicable as the licensing proceeding was transferred to the
Brazilian Institute for Environment and Renewable Natural Resources -
IBAMA, which issued new and installation licenses.
i. Provisioned Amount, in the
Case of Provision
Not applicable because the Company does not make provisions when
the chances of loss are possible.
Class action No. 2009.37.00.006877-1 (6730-05.2009.4.01.3700)
a. Court 8th
Lower Federal Court of the State of Maranhão
b. Court Lower court
c. Filing Date September 28, 2009
d. Parties to the Proceeding Plaintiff: Pedro Leonel Pinto de Carvalho
Defendants: Federal Government, Brazilian Institute for Environment
and Renewable Natural Resources - IBAMA, Municipality of São Luis,
State of Maranhão, Thermoelectric Power Plant Porto do Itaqui Geração
de Energia S.A. and ENEVA S.A.
e. Amounts, Goods or Rights in
Dispute
Environmental licensing of the Thermoelectric Power Plant Porto do
Itaqui
f. Principal Facts Class action with injunction in which the nullity of the environmental
licensing process of the Thermoelectric Power Plant Porto do Itaqui,
transfer of jurisdiction to the Environment and Renewable Natural
Resources - IBAMA and the annulment of the of the authorization for
occupancy of urban soil granted by the Municipal Urbanism and Housing
Office of the Municipality of São Luis is requested. On September 30,
2009, the judged determined that the public authorities involved
represent on the injunction, which was done by the Environment and
Renewable Natural Resources - IBAMA and the Federal Government on
October 13, 2009. On November 26, 2009, the Thermoelectric Power
Plant Porto do Itaqui entered a prior statement on the injunction. The
injunction was partially granted, upon which a bill of review was filed by
the Thermoelectric Power Plant Porto do Itaqui was filed on April 26,
2011. The provisional protection of the decision was granted on April 30,
2010. In the main records, the Thermoelectric Power Plant Porto do
Itaqui and ENEVA filed their reply on June 22, 2010 and the Municipality
of São Luis on June 09, 2010. Records sent for decision from August 04,
2011 to April 22, 2013.
g. Chances of Loss Remote.
h. Analysis of the Impact if the
Case Is Lost
Not applicable as the licensing proceeding was transferred to the
Environment and Renewable Natural Resources - IBAMA, which issued
new and installation licenses.
i. Provisioned Amount, in the
Case of Provision
Not applicable because the Company does not make provisions when
the chances of loss are remote.
Labor Claims
On April 30, 2013, the Company and its subsidiaries were party to 69 court labor
claims and 21 administrative labor proceedings. The amount involved in court
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labor claims totals approximately R$4 million out of the 69 claims, we and our
subsidiaries are plaintiffs in none of them. There is no amount involved in
administrative labor proceedings. In all proceedings, the chances of loss range
from possible to remote and, therefore, we did not record a provision for these
amounts. The subject matters of such proceedings and claims mainly involve
requests for hazard pay, overtime, severance pay and fines according to Article
477 of the Consolidated Labor Laws.
The administrative labor proceedings involve, for the most part, irregular working
conditions on the site, work on public holidays and the accuracy of labor
documents. There are no specific amounts involved in the administrative labor
proceedings. The chances of loss are classified as possible for all the
proceedings, according to the assessment of our legal counsel responsible for
handling them.
Among the labor claims to which the Company and its subsidiaries are parties and
in which the claims are not subject to secrecy, the Company understands that
there is none that is individually relevant.
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4.4 – Non-confidential legal, administrative or arbitration proceedings the
opposing parties to which are managers, former managers, controlling
shareholders, former controlling shareholders or investors
On the presentation date of the Reference Form, there are no non-secret court,
administrative or arbitration proceedings in which the managers, ex-managers,
parent companies, former parent companies or investors of the Companies are
defendants.
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4.5 – Relevant confidential proceedings
On the presentation date of this Reference Form, the Company was not aware of
any action in relevant secret proceedings to which the Company or its subsidiaries
are a party that has not been disclosed in the previous items and that could
impact the business of the Company and/or of its subsidiaries in the event of a
conviction.
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4.6 – Repetitive or related non-confidential legal, administrative or arbitration
proceedings that are collectively relevant
On the presentation date of this Reference Form, the Company was not aware of
any action in non-secret repetitive or related court, administrative or arbitration
proceedings that are jointly relevant.
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4.7 – Other Relevant Contingencies
All relevant contingencies were covered in the items above.
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4.8 – Regulations in the country of origin and in the country where the
securities are held in custody
Not applicable, in view of the fact that the Company has its head office in Brazil
and its securities are being held in custody in Brazil.
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5.1 - Description of the main market risks
The company’s operations and those of its subsidiaries are subject to the
following market risks described below:
Credit risk
Credit risk arises from the possibility of the company and its subsidiaries incurring
losses arising from default by their counterparties or by depository or financial
investment institutions. Failure to perform the obligations undertaken by them may
result in losses to the Company, given a potential "replacement cost" of its cash
flows, adversely affecting its business. Such risk may arise from trading
operations and cash management.
The company’s maximum exposure to credit risk can be demonstrated by the
balance of financial applications.
As of March 31,
2013
As of December 31,
2012
As of December 31,
2011
(in RS thousands)
Credit risk positions
Cash and cash equivalents 359,121 590,469 1,442,415
Securities 5,600 3,441 9,437
Trade accounts receivable 228,964 152,114 21,898
Gains on derivative transactions - 3,018 19,289
Subsidies receivable - CCC 34,668 42,178 29,445
Linked deposits 137,582 141,954 124,315
Consolidated creditor accounts 765,935 933,174 1,646,799
Interest rate risk
Interest rate risk arises from the possibility of the company and its subsidiaries
incurring losses resulting from volatility in interest rate on their financial assets
and liabilities. Additionally, a risk also exists of change in the interest rate
structures associated with flows of payment of principal and of debt interest.
As of the date of this Reference Form, the Company's outstanding loans and
financing were denominated in Reais and subject to floating rates, such as the
Long Term Interest Rate (TJLP), Interbank Deposit Certificate (CDI) rates and the
Consumer Price Index (IPCA). Any increase in interest rates may affect not only
the cost of new loans to the Company, as well as its current indebtedness costs,
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leading to increased financial expenses. As of March 31, 2013, the consolidated
debt of the Company and its subsidiaries totaled R$5,365 billion, and was subject
to interest rate variations that may increase our financing cost. Of this amount,
41.3% are indexed to the TJLP, 39.1% were indexed to the CDI rate and 8.3%
were indexed to fixed rates. Accordingly, any increase in the TJLP or CDI may
increase our debt’s financial charges.
Exchange rate risk
Exchange rate risk arises from the possibility of fluctuations in the foreign
currency exchange rates used by ENEVA and its subsidiaries when purchasing
equipment and entering into financial instruments. Accordingly, any depreciation in
the Real may increase the cost of equipment purchase and of part of our debt,
thus affecting our financial condition.
As of March 31, 2013, 98.2% of the consolidated debt of the Company and its
subsidiaries, or R$5,365 billion, were denominated in Reais and 1.8%, or R$100.7
million, were denominated in foreign currency.
Sensitivity analysis
This involves sensitivity analysis, as of March 31, 2013, for exchange variation (appreciation of US
dollar against the real) in derivative instruments related with the Company’s original transactions.
The probable scenario refers to the fair value on the reference date. Results in the scenarios show
the book market value (with the original transaction and its related hedges) if the risk factor were to
assume the value of the scenario.
Sensitivity analysis for foreign
exchange exposure Risk
Probable scenario
(fair value)
Scenario I USD
25%
Scenario II USD
50%
In R$ thousands
UTE Porto do Itaqui Ger.
Energia
Swap Libor x Prefixed US dollar appreciation (116,811) (145,859) (174,908)
Result of transaction (116,811) (145,859) (174,908)
Liquidity risk
Liquidity risk is the risk that the company and its subsidiaries may find it difficult to
comply with the obligations associated with their financial liabilities that are settled
with cash payments or other financial assets. Therefore, we may not guarantee
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that there will be sufficient funds in cash or new financing to pay the financial
obligations and that funding will be available according to the project needs.
Consolidated – 3/31/2013
(R$ thousands) Up to 6 months
From 6 to 12 months
From 1 to 2 years
From 2 to 5 years
More than 5 years Total
Financial liabilities Suppliers 302,729 - - - - 302,729 Related parties 51,541 - 8,400 - - 59,941 Loans and financing 1,509,182 1,383,096 645,471 1,374,684 3,194,761 8,107,194 Contractual withholding - 31,767 - - - 31,767 Debentures - 163 5,068 - - 5,231 Derivative financial instruments 15,172 15,723 29,263 59,419 26,797 146,374 Total by term 1,878,624 1,430,749 688,202 1,434,103 3,221,558 8,653,236
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5.2 Description of the market risk management policy
(a) risks for which protection is sought
In their business the company and its subsidiaries are subject to credit risk,
interest rate risk, exchange rate risk and liquidity risks. To minimize these risks,
the company has policies and procedures for managing these exposures and may
avail itself of protection instruments, subject to prior approval by the Board of
Directors.
Credit risk
To mitigate credit risk, the company and its subsidiaries adopt the practice of
analyzing the financial and economic situations of their counterparties, as well as
the ongoing monitoring of the open positions.
With respect to financial institutions, ENEVA and its subsidiaries only enter into
operations with financial institutions with recognized reputation in the market and
enjoying good ratings.
Additionally, the company has a Financial Investments Policy setting out the
investment limits per institution and taking into account the rating as a reference
for limiting the amount invested. The benchmark used is the RiskBank Index – a
Brazilian system for assessment and classification of banks and financial
institution risks. The higher the index, the lower the institution risk. The indexes for
the last two quarters are shown in the table below. Average terms are constantly
assessed together with investment indices in order to diversify the portfolio.
Bank Risk Rating As of March 31, 2012
As of December 31,
2012
Bradesco Low long-term risk 11.27 11.23
BTG Pactual Low medium-term risk 11.28 11.27
HSBC Bank Brasil Low long-term risk 9.99 10.49
Itaú Unibanco Low long-term risk 11.31 11.25
Santander Low medium-term risk 9.78 9.81
Citibank Low long-term risk 10.14 10.41
Votorantim Medium long-term risk 9.07 8.90
Interest rate risk
In order to mitigate the interest rate risk to which it is exposed, the company and
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its subsidiaries seek to diversify funding in terms of pre- or post-fixed rates, and in
certain circumstances hedge transactions are entered into in order to lock in the
financial cost of the transactions.
Specifically, the company and its subsidiaries have funds tied to the dollar and
indexed to the LIBOR rate. For this debt structure the company entered into a
debt swap transaction to protect itself against fluctuations in the LIBOR rate,
taking on as a liability a prefixed interest structure.
Exchange rate risk
The company works to manage currency risk management within the
consolidated environment of its companies, so as to identify and resolve the risks
associated with the oscillation of the value of the currencies associated with global
assets and liabilities. The goal is to identify or create natural hedges, taking
advantage of the synergy between the operations of ENEVA subsidiaries The idea
is to minimize the use of hedge derivatives by managing foreign exchange risk on
the net exposure. Derivative instruments are used in cases where it is not
possible to use the natural hedge strategy.
Considering that the revenues of the ENEVA companies will be denominated in
Reais, while a large part of investments in fixed assets (Capex) is denominated in
US dollars and in Euros, a portion of the investments in foreign currency is being
financed in dollars at international interest rates (Libor). In addition, the price of
the raw material for the (coal-fired) thermoelectric plants is established on the
international market, in dollars. Within this context, the level of exposure of the
assets and liabilities is permanently evaluated against the possible needs
protection.
To minimize the impact of currency mismatches the company and its subsidiaries
operate in NDF (Non Deliverable Forward)-type instruments, which consist of
negotiating forwards without physical delivery of the currency. The volume of
protection taken out mirrors the payment flows of the original contract. For this
type of transaction there is no margin requirement.
It is worth noting that the hedge policy of the company and its subsidiaries
prohibits any kind speculative leveraging. The volumes of protection contracted
out also respect their level of exposure, observing at all times best market
governance practices.
As part of the policy adopted by ENEVA and its subsidiaries, daily calculations are
made of the maximum potential loss on their derivative transactions, based on
statistical techniques that enable the assumed exposure to be controlled.
(b) hedge strategy
The company has a formal risk management policy. The company enters into
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financial instruments for hedge purposes by periodically analyzing its exposure to
the risk that management intends to cover, which is approved by the Board of
Directors. The results obtained from these transactions and the implementation of
internal risk management controls are in line with the objectives proposed, namely
liquidity, profitability and security.
Hedge guidelines are applied according to the type of exposure. Foreign
currency-related risk factors are neutralized in the short term (up to one year), and
the hedge may be extended for a longer period. Decision making in the face of
interest rate risk and inflation arising from acquired liabilities is evaluated within
the economic and operational context and occurs when management considers
the risk relevant.
(c) instruments used for hedging
When putting hedges into effect the following instruments can be used individually
or jointly:
(a) Swaps, Currency Forwards, Currency Futures Contracts (Non Deliverable
Forwards - NDF) and Options;
(b) Swaps Floating to Fixed, Interest Futures Contracts and Options;
(c) Futures Contracts and Options.
(d) parameters used for managing these risks
As part of the policy adopted by ENEVA and its subsidiaries, monitoring
mechanisms are adopted, such as statistical evaluation measures, for example:
MtM (Mark to Market), VaR (Value at Risk with a 95% Confidence level and
Holding Period (time interval) of 1 day) and Stress Tools (Monte Carlo) that
provide inputs for daily decisions regarding the management of the company’s
hedge position.
The hedge transaction must protect the net exposure, taking into account the
balance between the company’s incoming and outgoing cash flow and the risk it
wants to mitigate. The hedge strategy must distinguish between situations
involving amounts (revenues/expenses/cash/fixed assets added) effectively
committed and those involving estimated amounts (not actually committed):
(d) for values effectively committed or engaged, a coverage position of up to
100% should be adopted;
(e) for estimated amounts, a position should be adopted with a coverage
maturity date limited to twelve months and a weighted coverage position of
less than 100% based on conservative prospects of realization.
It is the responsibility of the Chief Financial Officer to monitor any changes in the
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market and/or business premises that require adjustments to hedge transactions
already closed. This practice results in permanent commitment by management to
mitigate inherent or occasional exposure risks involving the company’s different
operations.
(e) if the issuer deals in financial instruments for a variety of hedge
objectives and what those objectives are
The hedge strategy and its respective actions must strictly adhere to the objective
of mitigating exposures to identified financial risks. Should the events that gave
rise to the hedge transactions be no longer applicable, the hedge should be
unwound in good time, with the necessary approvals. In this manner all financial
instrument transactions of the company and its subsidiaries are strictly dedicated
to protecting its assets. The company does not speculate with financial
instruments.
(f) organizational structure of risk management control
The company’s risk management control is structured as follows:
Responsibilities
(a) It is the responsibility of the company’s Chief Financial Officer to identify and quantify the
company’s need to engage in hedge transactions;
(b) It is the responsibility of the company’s Chief Executive Officer, or to whom
he delegates, to submit the recommended strategy to the Board of
Directors;
Board of Directors Approve the strategy
CEO Submit the strategy to the Board of Directors
CFO Identify and quantify the requirements
Treasury Suggest financial securities
Execute
Follow-up
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(c) It is the responsibility of the Board of Directors to consider the
recommendation and decide whether to approve it;
(d) It is the responsibility of the Chief Financial Officer, with the support of the
General Management of Corporate Treasury, to implement the strategy
approved by the Board of Directors.
Execution
It is the responsibility of the Chief Financial Officer to select the best instrument
for protection against certain financial risks. The hedge transactions to be entered
into should take into account the following aspects:
(a) Alignment with exposure periods;
(b) Instruments available;
(c) Liquidity;
(d) Margins required;
(e) Cost x benefit ratio; and
(f) Other relevant features.
(g) adaptation of the internal control and operational structure in order to
verify the effectiveness of the policy adopted
The company and its subsidiaries periodically check the effectiveness of the policy
through the Internal Controls and Internal Audit areas, in order to identify
compliance with the same, as well as suggesting opportunities for improvement.
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5.3- Significant changes in key market risks
There were no changes to the market risks identified by the company, nor
changes to the risk management policy.
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5.4 - Other relevant information
There is no other information that the company deems relevant in relation to item
5 which has not been disclosed in the other items of this Reference Form.
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6.1/6.2/6.4- Constitution of the issuer, duration and date of registration with the
CVM
Date of Issuer Constituted 25/04/2001
Issuer’s Form of Constitution Joint-stock corporation.
Country of Constitution Brazil
Duration Period Indeterminate Duration Period
Date of Registration with the
CVM
07/12/2007
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6.3 - Brief history
ENEVA started its activities on April 25, 2001, with the incorporation of MPX Mineração e Energia
S.A., a company intended to operate in the power generation industry. Although it has been
recently incorporated, the Company has relied on the experience of EBX Group to perform and
finance large projects since its beginning.
From 2001 to 2004, the Company’s main investment consisted of a majority interest (51%) in the
capital of Termoceará, which operates thermal plant (“UTE”) Senador Carlos Jereissati, a natural
gas-fired thermal electric power plant located in the Municipality of Caucaia, in the State of Ceará.
The plant construction started in November 2001, and, on July 7, 2002, the partial operation of two
generating units was officially registered with the National System Operator (“ONS”), and an
additional power of 100 MW was provided to the National Interconnected System – SIN (“SIN”).
UTE Senador Carlos Jereissati has fulfilled the dispatch orders completely, whether for electric or
for power purposes, whenever determined by ONS, except for the opportunities when there were
fuel supply failures.
Through 2004 and 2005, the Brazilian market underwent a strong crisis in the natural gas supply,
which seriously limited Termoceará operations, and generated an adverse impact on its
operational revenue. For that reason, and considering the obligation undertaken by Petrobrás to
perform contingency contributions to cover certain fixed and variable costs for the plant, Petrobrás
acquired, in June 2005, the whole of Termoceará’s capital. This operation was preceded by a
corporate restructuring promoted by our controlling shareholder, which started on October 5, 2004,
in which we reduced our social capital by transferring Termoceará’s shares to its controlling
shareholder at that time, MPX Participações Ltda. (“MPX Participações”).
The value of Termoceará’s sale was R$324 million, which generated an approximate gain of
R$192 million for MPX Participações, considering the initial investment, profits ascertained, and
integral debt settlement.
On October 16, 2007, UTE Porto do Pecém (“Energia Pecém”), a 50/50 partnership between
ENEVA and EDP - Energias do Brasil S.A. (“EDP”)with a 720 MW installed capacity, traded 615
MW on average at the A-5 auction that took place in October, 2007, ensuring a fixed revenue for
15 years as of 2012 of approximately R$417.4 million (base: Jan/07), indexed to the IPCA
(National Extended Consumer Price Index - IBGE) inflation index. At the same auction, the then
called UTE Termomaranhão (currently UTE Porto do Itaqui or “Itaqui”) traded 315 MW on
average, ensuring a fixed revenue for 15 years as of January 2012 of approximately R$220.7
million (base: Jan/07), also indexed to the IPCA.
In December, 2007, ENEVA issued 1,903,743 common shares at the price of R$1,006.63 each
share, which started to be traded on the Novo Mercado segment of BM&FBOVESPA S.A. – Bolsa
de Valores, Mercadorias e Futuros (“BM&FBOVESPA”) on December 14, 2007. In January, 2008,
the option for subscription of a supplementary lot of 118,261 common shares was exercised at the
same price. The closing of the public offering took place on January 17th, 2008, and considering
the supplementary shares, a total of 2,022,004 shares were made available in the market, which
resulted in R$2.0 billion raised.
On September 30, 2008, 360 MW UTE Porto do Pecém II (“Pecém II”), a 100% ENEVA project,
sold 276 MW on average at the new energy auction A-5, held by the Electricity Trading Chamber
(“CCEE”) for supply agreements with duration of 15 years. The PPA (Power Purchase Agreement),
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effective as of January 2013, has a 15 year term and ensures an annual fixed revenue of R$207.0
million (base: Jan/08), indexed to the IPCA.
The three above mentioned energy sales agreements provide for an integral transfer of fuel costs,
including the impact of exchange fluctuation, to the energy price.
On May 8, 2009, the Company launched the Level I Global Depositary Receipts Program, under
the “MPXEY” code, with Banco Itaú S.A. as a custodian institution and Bank of New York Mellon
as a depositary institution of said receipts.
On July 17, 2009, the Company communicated that, under the minutes of the Company’s
Extraordinary General Meeting, held on the same date, the shareholders approved, by unanimity
and with no exceptions, the Split of the common shares issued by the Company, through which
each existing common share corresponded to 20 shares of the same class. The shares started to
trade on BM&FBOVESPA, in the “ex-split” form as of July 20, 2009.
On September 24, 2009, ENEVA signed a Memorandum of Understanding with OGX formalizing
the intent to acquire 33.3% of the shares OGX acquired in seven land exploration blocks in the
Parnaíba Basin. As published in ANP’s site on that date, OGX acquired 70% of the Blocks. Said
shares were acquired from Petra, which remains with 30%.
Additionally, ENEVA and Petra signed a Partnership Agreement to develop integrated thermal
electric generation projects using the natural gas produced in the Blocks. The Agreement sets forth
that ENEVA shall have a 70% share in the Projects, and the remaining 30% belong to Petra.
On April 27, 2010, ANP approved the transfer of 70% of the rights and obligations referring to
seven land exploration blocks in the Parnaíba Basin, upstate Maranhão (“Blocks”), held by OGX
Petróleo e Gás S.A. (“OGX”) to OGX Maranhão Petróleo e Gás Ltda. (“OGX Maranhão”), a
specific purpose company in which ENEVA holds 33.3% and OGX, 66.7% of the capital stock, as
already set forth in the Memorandum of Understanding signed between the parties in September,
2009.
On November 22, 2010, ENEVA communicated the acquisition of the Usina Termelétrica de Seival
(“UTE Seival” project), which has an Installation License for 600 MW of mineral coal in the
municipality of Candiota, State of Rio Grande do Sul. ENEVA acquired the project from Tractebel
Energia S.A. for approximately R$37 million, of which R$24 million were paid in advance and
R$13 million were paid after the actual share transfer.
On March 10, 2011, ENEVA disclosed a Relevant Fact to the market, informing that the
Framework and Credit Committee of the National Bank for Economic and Social Development –
BNDES – approved the classification of ENEVA capitalization, upon subscription by BNDES
Participações S.A. – BNDESPAR, of convertible debentures in a total amount of R$600 million.
GIF Gestão de Investimentos e Participações Ltda., through one or more of its managed funds
(“Gávea Investimentos”), and the controlling shareholder of ENEVA, Mr. Eike Batista, participated
in the operation with the same conditions set forth by BNDESPAR, subscribing convertible
debentures in a total amount of R$200 million each. Thus, the amount raised in the operation
totaled approximately R$1 billion. Mr. Eike Batista agreed to transfer his preemptive rights, partially
and proportionally, to BNDESPAR and to Gávea for the subscription of convertible debentures.
On April 15, 2011, ENEVA announced that DeGolyer & MacNaughton estimates indicated that the
total contingent and prospective risked resources from the seven land blocks controlled by OGX
Maranhão in the Parnaíba Basin add up to 11.3 trillion cubic feet (Tcf). In addition, the estimates
shown by DeGolyer & MacNaughton pointed out prospective risked resources of 96 million oil
barrels.
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ENEVA share in the resources is equal to 2.6 Tcf gas, with potential to reach 13.3 Tcf and 0.5
billion oil barrels. Such exceptional results have reinforced the Company’s initial estimates
regarding the great potential for production of gas in the region and also confirm the oil potential.
These estimates were based on three wells drilled until December 31, 2010, all of which were
located in the PNT- 68 block, and in seismic studies carried out across all blocks.
In May, 2011, the commercial viability of two natural gas fields operated by the affiliate OGX
Maranhão in the Parnaíba Basin was declared. Development plans estimate a daily production of
5.7 million m3 in 2013, which corresponds to the total production of 1.1 Tcf of gas.
The capitalization of ENEVA upon subscription of debentures convertible was approved in June,
2011, by the anchor participants in the operation, Gávea Investimentos Ltda. (“Gávea”), through
one of its managed funds, the controlling shareholder of ENEVA, Mr. Eike Batista, and
BNDESPAR. With the issuing of R$1.4 billion in convertible debentures, the Company’s
investment capacity was reinforced.
In June, 2011, a Term of Commitment was signed between ENEVA and Grupo Bertin to acquire
projects with energy contracted at the A-5 auction of 2008, totaling, on average, 450 MW. In
August, 2011, the board of the National Electricity Agency (“ANEEL”) approved the transfer of
authorizations of the thermal electric plants UTE MC2 João Neiva S.A. and UTE MC2 Joinville
S.A. (together, “Parnaíba I”) from Bertin Energia e Participações S.A. (“Bertin”) to ENEVA, in
addition to approving the changes in location and technical characteristics of Parnaíba I, thus
implementing the acquisition of energy agreements of Grupo Bertin by ENEVA to begin the energy
supply in 2013.
In that same month, regarding the Parnaíba Thermal Complex, the thermal electric power plant
UTE Parnaíba II (“UTE Parnaíba II”), with an installed capacity of 517 MW - to be installed in the
Complex - was the winner in the new energy auction A-3, held on August 17, 2011. The power
plant shall start to operate in 2014 and the total term of the energy agreement shall be 20 years.
To implement the above mentioned natural gas thermal plants in MPX Parnaíba Thermal Complex,
ENEVA signed engineering, construction, and assembly agreements with the Spanish companies
Duro Felguera and Initec Energia S.A.
In September, 2011, ENEVA acquired, through its affiliate OGX Maranhão, 50% of the shares in
land exploration block PN-T-102 in the Parnaíba Basin, together with the companies
(“Consortium”) Imetame Energia S.A., DELP Engenharia Mecânica Ltda. e Orteng Equipamentos
and Sistemas Ltda., which remain with a share of 16.67%, 16.665%, and 16.665%, respectively, in
the block. OGX Maranhão has become the operator of this block, together with this Consortium,
which has already been operating with good results for some years in several basins in Brazil.
With this additional concession, OGX Maranhão holds now shares in eight land exploration blocks
in the Parnaíba Basin, with a total area larger than 24,500 km².
Also in September, ENEVA and MMX Mineração e Metálicos S.A. finished negotiations to supply
electric energy, totaling 200 MW on average, and signed a Term of Commitment to adopt a self-
production structure. The agreement ensures energy supply for a period of 15 years, starting May,
2014, at the basic price of R$125/MWh (basic date: May, 2011).
In November, 2011, ENEVA disclosed preliminary conclusions of 3D seismic studies and the
results of the ongoing drill program in the San Juan area, in Colombia.
Still in November, the Office of Environment and Natural Resources of the State of Maranhão
(SEMA) issued an Installation License for the additional capacity of 1,859 MW at Parnaíba
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Thermal Complex, with total capacity of 3,722 MW with LI in the region. In December, OGX
Maranhão obtained a Preliminary License for production of natural gas in the Gavião Real and
Gavião Azul fields, in the Parnaíba Basin.
In January 2012, ENEVA received the Installation License for a project of production and flow of
natural gas in Gavião Real and Gavião Azul fields, in the Parnaíba Basin.
In the same month, the Company announced its intention to form a joint venture with E.ON SE,
one of the largest private power and gas companies in the world, according to Forbes, with the aim
of leveraging significant supplementarities of both companies to accelerate growth and develop a
bigger and more profitable power project. In April 2012, the definitive documents were signed for
this operation, through which ENEVA raised R$1.0 billion through a capital increase subscribed by
DD Brazil Holdings S.A.R.L, an E.ON SE subsidiary. After such increase, E.ON. achieved an
11.7% share in ENEVA. On April 17, 2012, ENEVA signed final agreements for the incorporation of
a joint venture (“JV”) with E.ON, which was completed on May 25, 2012.
The JV structure was designed with the objective of leveraging the supplementarities of ENEVA
and E.ON, which, according to the expectations of both companies, will lead to the development,
implementation and efficient operation of a total capacity of 20 GW, between thermal and
renewable generation. The JV management brings together E.ON international executives with
large experience in engineering, construction and operation of thermal power projects and
renewable energy, according to Forbes, and a group of ENEVA executives with deep knowledge of
the Brazilian electricity sector, including the planning and operation of the National Integrated
System and the processes for the preparation of the energy policy, as can been verified by our
executives’ resumes, provided in item 12 of this Reference Form.
Regarding Chile project, in March 2012, ENEVA released a note on the decision of the Court of
Antofagasta, Chile, as to the environmental classification of Castilla project. In February 2011, a
decision rendered by the Supreme Court of Chile on the administrative proceeding that had been
adopted in the environmental analysis of Castilla resulted in the revision of the emission levels of
the Project and hence its environmental classification. The revised classification was the basis for
the approval of the Castilla environmental license by the Committee for Environmental
Assessment of the Atacama Region.
In April 2012, ANEEL changed the implementation schedule of power plants Itaqui and Energia
Pecém and changed the starting date of the Agreement for Sale of Electricity in the Regulated
Market to June 1, 2012 and July 23, 2012, respectively, or the actual commencement of
commercial operation of the power plants, whichever occurs first.
In April 2012, ENEVA and MMX signed an amendment to the agreement for the supply of
electricity. Under the amendment, from January 2014 to December 2018, ENEVA will supply
electricity to the MMX Serra Azul Unit via MPX Comecializadora de Energia. From January 2019
to May 2029, the terms of the original agreement for power supply remain unchanged. MPX UTE
Parnaíba will supply 200 MW average, at a base price of R$125/MWh (May 2011 base date),
using self-production structure.
Also in May 2012, 99.6% of the debentures were converted into ENEVA shares. Then the mining
assets in Colombia were segregated, and the spun off portion was transferred to a new Company
listed on Novo Mercado of BM&FBOVESPA, CCX, which began trading independently on May 25
2012. On July 8, 2012, ENEVA signed an agreement to take over the management of the works of
Energia Pecém, Itaqui and Pecém II through the acquisition, together with EDP and in equal
proportions, of 100% shares of MABE Brasil Ltda., a consortium formed by Maire Tecnimont Group
and Grupo Efacec, for the value of R$1.00. The acquisition enabled the Company to take over the
management of the works to avoid interruptions to work in progress, ensuring effective
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management of Projects through completion. EDP and ENEVAagreed that Pecém II and Itaqui,
which are projects controlled entirely by ENEVA, will be managed exclusively by ENEVA.
In July 2012, the affiliate OGX Maranhão concluded a drill-stem test in well OGX-88, accumulation
of Bom Jesus, in block PN-T-68, 1.4 km from the wildcat discoverer of this accumulation, OGX-34,
and about 30 km far from Gavião Real field, in the Parnaíba onshore basin. The drill-stem test in
well OGX-88 was performed in 36 meters of gas net pay in the carboniferous section.
In August 2012, ENEVA, through its joint venture with E.ON, signed an Agreement for the
acquisition of Wind Complexes Jandaíra, Pedra Preta I and Pedra Preta II, together, “Projeto
Ventos” with 600 MW total capacity. The agreement also included an option to acquire an
expansion of the Projects, with 600 MW additional capacity, to be exercised by May 31, 2013.
Also in August 2012, ENEVA made a split of common shares issued by the Company, whereby
each existing common share now corresponds to three shares of the same class. In parallel, there
was the unfolding of Global Depositary Receipts (GDRs) of the Company, whereby each GDR now
corresponds to three GDRs, so there is no change in the ratio between the shares and Global
Depositary Receipts.
On August 28, 2012, a decision of the Chilean Supreme Court annulled the environmental license
of Central Castilla thermal plant. The Court further determined that relicensing should consider a
new environmental impact study conducted together by Castilla and Puerto Castilla, which will
receive coal to supply the plant.
In September 2012, OGX Maranhão obtained the Operating License authorizing the start of
production and flow of natural gas in Gavião Real and Gavião Azul fields, in the Parnaíba Basin,
northeastern Brazil. The license was issued by the State Department of Environment and Natural
Resources of Maranhão (SEMA/MA).
In October 2012, ANEEL authorized the Itaqui venture to start operation on a test basis. In
addition, ANEEL Board authorized the change of the start date of the Agreement for Sale of
Electricity in the Regulated Market to December 20, 2012 or the date of actual commencement of
commercial operation of the power plant, whichever occurs first. That same month IBAMA issued
Operating License (LO) for Itaqui.
In the same month, Energia Pecém I TPP held the first synchronization of its first generating unit
with an installed capacity of 360 MW, with NIS.
In November 2012, ENEVA notified Star Energy Participações S.A. and Bertin on the exercise of
an option to acquire the entire capital stock of UTE MC2 Nova Venécia (currently UTE Parnaíba
III, or “Parnaíba III”, owner of authorization for the construction of a thermal power plant with 176.2
MW capacity in the state of Espírito Santo. ENEVA intends to transfer the Project to the Parnaíba
Basin, state of Maranhão.
On November 23, 2012, Itaqui performed the first synchronization with NIS as a test.
On December 1, 2012, Energia Pecém TPP received authorization from ANEEL to start
commercial operation of the first generating unit with an installed capacity of 360 MW.
On January 19, 2013, the first turbine of Parnaíba I TPP (“Paranaíba I”), with an installed capacity
of 169 MW, was first synchronized with NIS.
Also in January 2013, ANEEL approved the postponement of the energy supply from Pecém II
TPP (360 MW) to June 1, 2013 and from Parnaíba I (676 MW) to April 1, 2013.
In the same month, OGX Maranhão presented to ANP the Declaration of Commerciality of
accumulation of Bom Jesus, discovered in Blocks PN-T-67 and PN-T-68, in the Parnaíba Basin.
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The declaration of commerciality presented on the accumulation of Bom Jesus was named Gavião
Branco field and OGX Maranhão estimates a total in situ volume between 0.2 and 0.5 Tcf of gas
for this field.
On February 1, 2013, Parnaíba I received authorization from ANEEL to start commercial operation
of the first turbine with an installed capacity of 169 MW. Parnaíba I has total installed capacity of
676 MW, consisting of four gas turbines of 169 MW each.
In the same month, Itaqui received authorization from ANEEL to start commercial operation with
an installed capacity of 360 MW.
On February 20, 2013, Parnaíba I received authorization from ANEEL to start commercial
operation of the second turbine with an installed capacity of 169 MW and on March 29, 2013, it
received authorization to begin commercial operation of the third turbine with an installed capacity
of 169 MW. On April 12, 2013, Parnaíba I received authorization from ANEEL to start commercial
operation of the fourth turbine, also with installed capacity of 169 MW. Parnaíba I TPP reached
thus its total installed capacity of 676 MW, being paid under the terms of CCEAR assured in the A-
5 energy auction, in 2008.
On March 27, 2013, the Company announced to the market, together with EDP-Energias do Brasil
S.A. and in equal proportions, that they completed the acquisition of 100% shares of MABE Brasil
Ltda., a consortium formed by Maire Tecnimont SpA and Grupo Efacec, relating to the
management of the works of Pecém, Itaqui and Pecém II TPP.
On the same date, Mr. Eike Fuhrken Batista and E.ON SE signed an Investment Agreement. After
verifying all conditions precedent provided for in the Investment Agreement, on May 29, 2013,
E.ON SE, through its subsidiary DD Brazil Holdings S.A.R.L acquired 141,544,637 shares of the
Company owned by Mr. Eike Fuhrken Batista and certain ENEVA shareholders, holders of options
to purchase shares of ENEVA, representing 24.47% of its share capital. Additionally, E.ON SE and
Mr. Eike Fuhrken Batista entered into a shareholders’ agreement that regulates, among other
matters, the exercise of voting rights and restrictions on transfers of shares in our Company. For
additional information on the Shareholders’ Agreement, see item 15 of this Reference Form.
On April 5, 2013, ENEVA informed the market that it had completed the acquisition of the entire
capital stock of UTE MC2 Nova Venécia (currently “Parnaíba III”) by ENEVA, MPX E.ON
Participações S.A. - joint venture between ENEVA and E.ON SE - and Petra Energia S.A. On
March 26, 2013, the authorization of the Ministry of Mines and Energy to change the fuel and
transfer the Project location was published. The project, which has permission for the construction
of a thermal power plant with 176 MW capacity, was transferred to the Parnaíba Basin, where
ENEVA is currently building 1,369 MW, 1,193 MW of which already have long-term agreements
contracts in Regulated Market. The additional capacity, with start-up scheduled for May 2013, will
supply Parnaíba III agreements, which sold energy in the New Energy Auction A-5, 2008, in the
form of CCEARs, totaling 98 MW average, at a price of R$189,9/MWh and annual fixed revenues
of R$93,5 million (both figures at the base date of November 2012). The CCEARs have a term of
15 years from 2013.
On April 26, 2013, ENEVA informed the market that together with MPX-E ON Participações S.A.
and Petra Energia it executed an agreement with Kinross Brasil Mineração S.A. for
implementation of a natural gas-fuled thermal project (“UTE Parnaíba IV”) with installed capacity
of 56 MW to be built in the Parnaíba Basin, state of Maranhão. The annual amount of the
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agreement totals approximately R$54 million.
In May 2013, ENEVA informed the market that it entered into an agreement with OGX Petróleo e
Gás Participações S.A. (“OGX”), for the purpose of assigning to ENEVA an interest of 50% in
onshore exploration blocks PN-T-168, PN-T-153, PN-T-113 and PN-T-114 (“Blocks”), located in
the Parnaíba Basin, acquired by OGX at the 11th Bidding Round held by the Brazilian Oil, Natural
Gas and Biofuel Agency (Agência Nacional de Petróleo, Gás Natural e Biocombustíveis, or
“ANP”), on May 14, 2013. ENEVA will acquire an interest of 50% in the Blocks under the same
conditions offered by OGX at the ANP’s 11th Bidding Round. The acquisition price paid by ENEVA,
thus, will be equivalent to half of the signature bonus and other exploration and development
commitments assumed in the proposals submitted by OGX to ANP. The assignment that is the
subject matter of the Agreement is contingent on approval by the ANP as soon as the Block
concession agreements are signed.
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6.5 – Major corporate events relating to its issuer, subsidiaries or affiliates
OGX Maranhão
a) and b) Event and Main Business Conditions
In April 2010, ANP approved the transfer of 70% of the interest in the rights
and obligations relating to seven land exploration blocks in the Parnaíba
Basin in the State of Maranhão, held by OGX for OGX Maranhão. According
to the Notice to the Market published on September 24, 2009, OGX acquired
the interest in the Blocks from Petra Energia Ltda. (“Petra”) that keeps 30%
of the interest therein. Additionally, ENEVA and Petra executed a Partnership
Agreement for the development of integrated thermoelectric power
generation using the natural gas to be produced in the Blocks, setting forth
an interest of 70% of ENEVA and 30% of Petra in the energy generation
projects that may be developed and implemented in the Parnaíba basin.
c) Companies involved
ENEVAS.A., OGX Petróleo and Gás Participações S.A. and OGX Maranhão
Petróleo e Gás S.A.
d) Relevant Effects of the Operation on the Shareholding Structure,
especially on the share of the Controlling Shareholder, of the Shareholder
with over 5% of the Capital Stock, and of the Issuer’s Managers
Not applicable, since the operation had no effect on the shareholding structure of
the Company.
e) Shareholding Structure Before and after the Operation
There were no changes in the shareholding structure
MPX Solar Empreendimentos Ltda.
a) and b) Event and Main Business Conditions
On May 7, 2010, the Company founded MPX Solar Empreendimentos Ltda.,
a limited-liability company in which ENEVA holds 99.99% of the capital stock,
and the remaining interest of 0.01% in the capital stock is held by Mr.
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Eduardo Karrer, CEO of the Company. The capital stock was paid up by
ENEVA by assigning 350,999 shares to MPX Solar Empreendimentos Ltda.,
representing 99.99% of the capital stock of MPX Tauá Energia Solar Ltda. at
its equity value.
c) Companies involved
MPX Solar Empreendimentos Ltda., ENEVAS.A. and MPX Tauá Energia Solar
Ltda.
d) Relevant Effects of the Operation on the Shareholding Structure,
especially on the share of the Controlling Shareholder, of the Shareholder
with over 5% of the Capital Stock, and of the Issuer’s Managers
No relevant effects were observed on the shareholding structure of the Company, or
on the shares of Controlling Shareholders and shareholders with over 5% of the
capital stock of the Company and of its managers.
e) Shareholding Structure Before and after the Operation
The table below summarizes the equity interest of ENEVA in the transaction:
MPX TAUÁ ENERGIA SOLAR LTDA.
Before ENEVA Eduardo Karrer
99.99% 0.01%
Afterwards ENEVA Eduardo Karrer MPX Solar
Empreendimentos Ltda.
0% 0.01% 99.99%
The transaction did not result in any change to the shareholding structure of
the Company.
EDP – Energias do Brasil S.A.
a) and b) Events and Main Business Conditions
On October 14, 2011, the Company and EDP entered into the Share
Purchase Agreement by means of which the Company sold EDP 50% of the
shares representing the voting capital and 100% of the shares of Porto do
Pecém Transportadora de Minérios S.A. for the total amount of R$500.00,
paid via electronic cash transfer – TED.
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c) Companies involved
ENEVAS.A., EDP – Energias do Brasil S.A. and Porto do Pecém
Transportadora de Minérios S.A.
d) Relevant Effects of the Operation on the Shareholding Structure,
especially on the share of the Controlling Shareholder, of the
Shareholder with over 5% of the Capital Stock, and of the Issuer’s
Managers
No relevant effects were observed on the shareholding structure of the
Company, or on the shares of Controlling Shareholders and shareholders
with over 5% of the capital stock of the Company and of its managers.
e) Shareholding Structure Before and after the Operation
The transaction is reflected in the table below:
Porto do Pecém Transportadora de Minérios S.A.
Before ENEVA EDP
100% 0%
Afterwards ENEVA EDP
50% 50%
The transaction did not result in any change to the shareholding structure of
the Company.
MPX E.ON Participações S.A.
a) and b) Events and Main Business Conditions
On April 17, 2012, the Company entered into definitive agreements with
E.ON SE, relating to the setting up of a 50:50 joint venture under the name
MPX E.ON Participações S.A. (“MPX E.ON”), which was completed on May
25, 2012, as well to the raising of R$1,000,000,063.00 subscribed almost in
its entirety by E.ON to obtain interest in the amount of 11.7% in ENEVA. The
purpose of the joint venture is the exclusive development of new power
generation projects in Brazil and Chile, as well as the development of certain
thermal and renewable power projects of the enterprise portfolio already held
by ENEVA in those countries that were transferred to the joint venture at
book value. In that line, on May 24, 2012, DD Brazil Holdings S.A.R.L, a
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subsidiary of E.ON SE, joined MPX E.ON, and the Company transferred the
corporate interest in its subsidiaries as covenanted in the definitive
agreements.
Also on May 24, 2012, the partial spin-off of the Company, followed by the
merger of the spun-off portion of its net equity into CCX Carvão da Colômbia
S.A. was approved in a Special Shareholders Meeting. On the same
occasion, the amendment to the Bylaws of the Company due to the capital
reduction resulting from the partial spin-off, without the cancellation of
shares, was also approved.
c) Companies involved
ENEVAS.A., E.ON SE, DD Brazil Holdings S.A.R.L. and MPX E.ON
Participações S.A.
d) Relevant Effects of the Operation on the Shareholding structure,
especially on the share of the Controlling Shareholder, of the
Shareholder with over 5% of the Capital Stock, and of the Issuer’s
Managers
Because of the operation mentioned, Mr. Eike Fuhrken Batista’s
shareholding decreased to 53.9% and simultaneously, E.ON became the
holder of 11.7% of the Company’s capital stock.
e) Shareholding Structure Before and after the Operation
Below, the shareholding structure of the Company before and after the spin-
off of ENEVA, creation of the joint venture and capital increase:
Before:
~72% ~28%
EIKE BATISTA
Free Float
Mina de CarvãoSeival
OGX Maranhão*
50% 100% 100% 51%
70% 100% 100% 100%
UTEs Sul & Seival
UTE Castilla
Supply & Trading
100%
70%
33%
Tauá Solar
100%
UTEs Parnaíba
UTEs Açu
AmapariEnergia
UTE ItaquiUTE
Pecém IIUTE
Pecém I
*70% - Blocos Exploratórios de Gás Natural na Bacia do Parnaíba
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[UTE: Thermoelectric Power Plant
Mina de Carvão: Coal Mine
*70% - Natural Gas Exploration Blocks in the Parnaíba Basin]
Afterwards:
[UTE: Thermoelectric Power Plants
Mina de carvão: coal mine
Expansão: expansion
Suprimento & Trading: Supply and Trading
Ventos Eólicos: Wind Farms
Blocos Exploratórios de Gás Natural na Bacia do Parnaíba: Exploration Blocks of Natural Gas in Parnaíba Basin]
Acquisition of Wind Farm
a) and b) Event and Main Business Conditions
In July of 2012, MPX E.ON Participações S.A. acquired CSRX Energias
Renováveis Ltda., 100% of the total capital stock of each one of the 23 SPEs
founded for the development of the wind farms Jandaíra, Pedra Preta I and
Pedra Preta II, with a total capacity of 600 MW (“Wind Farms”). The
agreement also includes an option to acquire a project expansion, with an
additional capacity of 600 MW, to be exercised by May 31, 2013. The
purchase price was R$37,000.00 per installed MW, corresponding to a total
amount of R$22.2 million for the initial 600 MW. Additionally, the agreement
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sets forth the payment of royalties in the amount of R$1.30 per
commercialized MWh for the power supply period, up to the maximum limit of
20 years. The same terms will apply for the project expansions, in the event
the Company opts to exercise the option.
c) Companies involved
MPX E.ON Participações S.A. and CSRX Energias Renováveis Ltda.
d) Relevant Effects of the Operation on the Shareholding Structure,
especially on the share of the Controlling Shareholder, of the
Shareholder with over 5% of the Capital Stock, and of the Issuer’s
Managers
No relevant effects were observed on the shareholding structure of the
Company, or on the shares of Controlling Shareholders and shareholders
with over 5% of the capital stock of the Company and of its managers.
e) Shareholding Structure Before and after the Operation
23 Wind Energy SPEs – Wind Farm Project
Before MPX E.ON Participações CSRX
0% 100%
Afterwards MPX E.ON Participações CSRX
100% 0%
Below the organization chart of the project:
DD Brazil
Holdings S.à.r.l.
50%
MPX Energia S.A.
100%
SPEs Wind Farms*
* Central Eólica Algaroba Ltda. Central Eólica Asa Branca Ltda. Central Eólica Boa Vista I Ltda. Central Eólica Boa Vista II Ltda. Central Eólica Boa Vista III Ltda. Central Eólica Bonsucesso Ltda. Central Eólica Bonsucesso II Ltda. Central Eólica Milagres Ltda. Central Eólica Morada Nova Ltda. Central Eólica Ouro Negro Ltda. Central Eólica Pau Branco Ltda. Central Eólica Pau D´Arco
Central Eólica Pedra Branca Ltda. Central Eólica Pedra Rosada Ltda. Central Eólica Pedra Vermelha I Ltda. Central Eólica Pedra Vermelha II Ltda. Central Eólica Santa Benvinda I Ltda. Central Eólica Santa Benvinda II Ltda. Central Eólica Santa Luzia Ltda. Central Eólica Santo Expedito Ltda. Central Eólica São Francisco Ltda. Central Eólica Ubaeira I Ltda. Central Eólica Ubaeira II Ltda.
50%
MPX E.ON
Participações
S.A.
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Investment Agreement between Eike Fuhrken Batista and E.ON SE
a) and b) Event and Main Business Conditions
On March 27, 2013, Mr. Eike Fuhrken Batista and E.ON SE entered into an Investment Agreement. After verifying all conditions precedent provided for in the Shareholders’ Agreement, on May 29, 2013, E.ON SE, through its subsidiary DD Brazil Holdings S.A.R.L, acquired 141,544,637 shares issued by the Company and held by Mr. Eike Fuhrken Batista and by certain shareholders of ENEVA, holding purchase options for shares issued by ENEVA representing 24.47% of its share capital. Additionally, E.ON and Mr. Eike Fuhrken Batista entered into a shareholders’ agreement that governs, among others, the exercise of the voting rights and transfer restrictions to shares in our Company.
c) Companies involved
Eike Fuhrken Batista, E.ON SE and DD Brazil Holdings S.A.R.L.
d) Relevant Effects of the Operation on the Shareholding structure,
especially on the share of the Controlling Shareholder, of the
Shareholder with over 5% of the Capital Stock, and of the Issuer’s
Managers and Shareholding Structure Before and after the Operation
The transaction will result in the following change to the shareholding
structure of the Company:
Shareholding structure before the transaction:
50% 50%
34.8%
MPX-E.ON
Other EIKE BATISTA
53.5% 11.7%
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Shareholding structure projected after the transaction:
Acquisition - Mabe Brasil Ltda.
a) and b) Event and Main Business Conditions
On March 27, 2013, the Company informed the market that, together with
EDP and in equal proportions, it had completed the acquisition of 100% of
the shares of MABE Brasil Ltda., a consortium made up of the companies
Maire Tecnimont SpA and Grupo Efacec, with regard to the management of
the works of Pecém, Itaqui and Pecém II, for the symbolic amount of R$1.00.
c) Companies involved
ENEVAS.A., EDP – Energias do Brasil S.A. and MABE Brasil Ltda.
d) Relevant Effects of the Operation on the Shareholding structure,
especially on the share of the Controlling Shareholder, of the
Shareholder with over 5% of the Capital Stock, and of the Issuer’s
Managers
No relevant effects were observed on the shareholding structure of the
Company, or on the shares of Controlling Shareholders and shareholders
with over 5% of the capital stock of the Company and of its managers.
e) Shareholding Structure Before and after the Operation
34,8%
Other EIKE BATISTA
29.0% 36.2%
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MABE Brasil Ltda.
Before ENEVA EDP Consortium Maire and
Efacec
0% 0% 100%
Afterwards ENEVA EDP Consortium Maire and
Efacec
50% 50% 0%
Acquisition of Parnaíba III
a) and b) Event and Main Business Conditions
On April 5, 2013, ENEVA informed the market that it had completed the
acquisition of the entire capital stock of Parnaíba III by ENEVA, MPX E.ON
and Petra Energia S.A. On March 26, 2013, the authorization of the Mining
and Energy Ministry for change of fuel and transfer of the Enterprise to a new
location was published. The project with an authorization for the construction
of a thermoelectric power plant with a capacity of 176 MW was transferred to
the Parnaíba Basin where ENEVA is currently building 1,369 MW of which
1,193 MW are already included in long-term agreements within the
Regulated Market. The additional capacity, with its operation start scheduled
for May 2013, will supply the contracts of Parnaíba III that contracted the
sale of energy in the New Power Auction A-5 of 2008, in the form of
Agreements for Electric Power Commercialization on Regulated Markets
(“CCEARs”), with an average of 98 MW, at a price of R$189.9/MWh and may
receive an annual fix income of R$93.5 million (both amounts on the base
date of November 2012), provided that the applicable agreement provisions
are complied with by the parties. The CCEARs have a validity of 15 years,
starting in 2013.
c) Companies involved
MOX Energia S.A., MPX E.ON Participações S.A. and Petra Energia S.A.
d) Relevant Effects of the Operation on the Shareholding Structure,
especially on the share of the Controlling Shareholder, of the
Shareholder with over 5% of the Capital Stock, and of the Issuer’s
Managers
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No relevant effects were observed on the shareholding structure of the
Company, or on the shares of Controlling Shareholders and shareholders
with over 5% of the capital stock of the Company and of its managers.
e) Shareholding Structure Before and after the Operation
The shareholding structure of the Company was not changed due to this
operation. The only change was an increase in the indirect interest of the
Company in Parnaíba III.
The structure below illustrates the current shareholding structure of Parnaíba
III:
Assignment of Onshore Exploration Blocks by OGX Petróleo e Gás Participações S.A.
a) and b) Event and Main Business Conditions
In May 2013, ENEVA informed the market that it had signed an agreement with OGX Petróleo e Gás Participações S.A. (“OGX”), the subject matter of which is the assignment to ENEVA of a 50% interest in the PN-T-168, PN-T-153, PN-T-113, and PN-T-114 onshore exploration blocks (“Blocks”), located in the Parnaíba Basin, acquired by OGX at the 11th Bidding Round held by the Brazilian Petroleum, Natural Gas and Biofuels Regulatory Agency (“ANP”), on May 14, 2013. ENEVA will acquire a 50% interest in the Blocks under the same terms offered by OGX at the ANP’s 11th Bidding Round. The purchase price paid by ENEVA, therefore, will be equivalent to half of the signing bonus and other exploration and development commitments made in
MPX E.ON
Participações 50%
50%
Parnaíba III (Nova
Venécia)
Parnaíba Participações
70%
50% 50%
30%
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the proposals submitted by OGX to ANP. The assignment, which is the subject matter of the Agreement, shall be submitted to ANP’s approval as soon as the Block concession contracts are signed.
c) Companies involved
ENEVAS.A. and OGX Petróleo e Gás Participações S.A.
d) Relevant Effects of the Operation on the Shareholding structure,
especially on the share of the Controlling Shareholder, of the
Shareholder with over 5% of the Capital Stock, and of the Issuer’s
Managers
No relevant effects were observed on the shareholding structure of the
Company, or on the shares of Controlling Shareholders and shareholders
with over 5% of the capital stock of the Company and of its managers.
e) Shareholding structure Before and after the Operation
The transaction did not result in any change to the shareholding structure of the Company.
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6.6 – Information of filing for bankruptcy on the basis of relevant amount
or judicial or extrajudicial reorganization
Until the date of this Reference Form, no bankruptcy or judicial or
extrajudicial reorganization has been filed for against the Company.
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6.7 – Other Relevant Information
There is no information that the Company deems relevant with regard to Item 6 other than the information disclosed in the other items of this Form.
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7.1 - Description of the activities of the issuer and its subsidiaries
We are a diversified energy company with supplementary business in electrical energy
generation and natural gas exploration and production in South America. Our current energy
generation basis is focused on thermal sources (mineral coal, natural gas and diesel) and
we have also been developing supplementary sources, such as solar energy and wind
generation projects. This diversification is particularly strategic for the Brazilian energy
matrix, which is strongly dependent on hydroelectric energy.
We currently hold an interest in five power plants, fully owned by us or through partnerships,
already in operation, located in the states of Amapá, Ceará and Maranhão, totaling an
installed capacity of 1,780 MW:
Energia Pecém: located in the municipality of São Gonçalo do Amarante, state of Ceará,
Energia Pecém is a 50/50 partnership between ENEVA and EDP. Energia Pecém
uses mineral coal brought from the Port of Pecém and has two generation units with
installed capacity of 360 MW each. The first unit started operating commercially in
December 2012 and the second one in May 2013. At the A-5 new energy auction,
held in October 2007, the plant contracted 615 MW on average, for a period of 15
years, which will enable receipt of annual fixed revenue of up to R$567,2 million
(effective date: November 2012), indexed to the IPCA (provided that the applicable
agreement provisions are complied with by Energia Pecém and by energy
purchasers), and a variable revenue to cover (fuel, operating and maintenance)
costs incurred upon dispatching of the plant by the National System Operator (ONS).
Itaqui: located in the Industrial District of São Luís, state of Maranhão, Itaqui is a mineral
coal-fuel thermal plant wholly owned by our Company, with installed capacity of 360
MW. Itaqui contracted the sale of 315 MW on average, for a period of 15 years, at
the A-5 new energy auction held in October 2007, which will enable receipt of annual
fixed revenue of R$299.8 million (effective date: November 2012), indexed to the
IPCA (provided that the applicable agreement provisions are complied with by Itaqui
and by energy purchasers. The energy supply agreement additionally sets forth a
variable revenue to cover (fuel, operating and maintenance) costs incurred upon
dispatching of the plant by the National System Operator (ONS). Itaqui started
operating commercially in February 2013.
Parnaíba I: located, in the Parnaíba Basin, in the city of Santo Antônio dos Lopes, state of
Maranhão, Parnaíba I is a natural gas-fueled thermal plant, in which we hold an
interest of 70%, comprised of four natural gas turbines of 169 MW of capacity each,
totaling an installed capacity of 676 MW. The plant contracted the sale of 450 MW on
average, for a period of 15 years, at the A-5 new energy auction held in September
2008, which will enable receipt of annual fixed revenue of R$421.2 million (effective
date: November 2012), indexed to the IPCA (provided that the applicable agreement
provisions are complied with by Parnaíba I and energy purchasers). The natural gas
will be produced in blocks explored by OGX Maranhão, at the Parnaíba Basin, state
of Maranhão. The energy supply agreements additionally set forth a variable
revenue to cover (fuel, operating and maintenance) costs incurred upon dispatching
of the plant by the National System Operator (ONS). The plant’s fourth and last
turbine received authorization to start operating commercially on April 12, 2013; thus,
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Parnaíba I now generates 676 MW, with all its turbines in commercial operation.
Amapari: located in the municipality of Serra do Navio, state of Amapá, Amapari is a diesel-
fueled thermal plant in which we hold a majority interest (51%). The remaining
interest is held by Eletronorte. Amapari has been operating commercially since
November 2008, with installed capacity of 21.6 MW. Additionally, we estimate
variable revenues from amounts arising from the “Supplied Energy” agreement,
divided into variable supplied energy regarding O&M and variable supplied energy
regarding fuel acquisition cost. The revenues are adjusted annually on the basis of
the variation of IPCA. On the other hand, amounts referring to “Supplied Energy
regarding Fuel Acquisition Cost” will be adjusted according to the cost determined by
ANEEL.
Tauá: located in the municipality of Tauá, state of Ceará, Tauá is a business venture that
generates energy from the sun and that is wholly owned by our subsidiary MPX
E.ON. In operation since July 2011, Tauá has installed capacity of 1 MW, and holds
an authorization issued by ANEEL and SEMACE to gradually increase its installed
capacity to up to 5 MW.
We also have four power plants in construction phase, which are wholly owned or owned
through partnerships (including through MPX E.ON., in which we hold an interest of 50%):
Pecém II: located in the municipality of São Gonçalo do Amarante, state of Ceará, Pecém II
is a mineral coal-fueled thermal plant of which we hold 99.7%, with installed capacity
of 360 MW. At the A-5 new energy auction held in September 2008, Pecém II
contracted the sale of 276 MW on average, for a period of 15 years, which will
enable receipt of annual fixed revenue of nearly 269.2 million (effective date:
November 2012), indexed to the IPCA (provided that the applicable agreement
provisions are complied with by Pecém II and energy purchasers). The energy
supply agreement additionally sets forth a variable revenue to cover (fuel, operating
and maintenance) costs incurred upon dispatching of the plant by the National
System Operator (ONS). The power plant is expected to start operating in the
second quarter of 2013. In January 2013, ANEEL approved the postponement of the
agreement date of the beginning of energy supply of UTE Pecém II until June 1,
2013, or the effective date of beginning of commercial operation of the plants,
whichever occurs first.
Parnaíba II: In August 2011, we won the A-3 new energy auction, which ensured contracting
of electrical energy from UTE Parnaíba II, in which we hold an interest of 100% of
the capital stock and whose installed capacity will be 517 MW. According to the
supply agreement secured at the auction, Parnaíba II, located in the Parnaíba Basin,
will start operating in February 2014, on an open cycle basis and, subsequently in
June 2014, it will start operating on a combined cycle basis, supplying a total of 400
MW on average in 2014 and a total of 450 MW on average as of 2015. The energy
agreement obtained at the auction is valid for 20 years and ensures receipt of annual
fixed revenue of R$353.1 million (effective date: November 2012), annually adjusted
by the IPCA (provided that the applicable agreement provisions are complied with by
Parnaíba II thermoelectric power plant and energy purchasers). The natural gas will
be produced in blocks explored by OGX Maranhão, at the Parnaíba Basin, state of
Maranhão. The energy supply agreement additionally sets forth a variable revenue
to cover (fuel, operating and maintenance) costs incurred upon dispatching of the
plant by the National System Operator (ONS). Lastly, Petra has the option to
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participate in up to 30% of the project, upon equivalent capital contribution.
Parnaíba III: In April 2013, we acquired the total capital stock of UTE MC2 Nova Venécia,
which is currently owned in the following proportion: our Company (35%), MPX E.ON
(35%) and Petra (30%). Parnaíba III, under construction in the Parnaíba Basin,
which is expected to start operating in the second quarter of 2013, will be a
thermoelectric power plant with installed capacity of 176 MW and will supply Nova
Venécia agreements, which contracted the sale of 98 MW on average, for a period of
15 years at the A-5 new energy auction held in September 2008 (effective date:
November 2012). The energy supply agreement ensures receipt of an annual fixed
revenue of R$93.5 million (effective date: November 2012), annually adjusted by the
IPCA (provided that the applicable agreement provisions are complied with Parnaíba
III thermoelectric power plant and by energy purchasers), and a variable revenue to
cover (fuel, operating and maintenance) costs incurred upon dispatching of the plant
by the National System Operator (ONS).
Parnaíba IV: In April 2013, our Company entered into an agreement with Kinkross Brasil
Mineração S.A. to implement a natural gas-fueled thermal plant with installed
capacity of 56 MW, to be constructed in the Parnaíba Basin, state of Maranhão. The
annual value of the agreement is approximately R$54 million. Parnaíba IV is owned
in the following proportion: our Company (35%), MPX E.ON (35%) and Petra (30%),
and the beginning of its commercial operations is scheduled for December 2013.
The table below summarizes the energy supply agreements entered into by
our Company and the flow of revenues estimated for the next years
(provided that the applicable agreement provisions are complied with by the
respective parties):
Total ENEVA
direct
interest
MPX E.ON
direct interest
Annual
fixed
revenue (in
millions of
R$)(1)
Fuel PPA period Start-up
date(COD)
Energia
Pecém
720 MW 50% - 283.5 Coal 2012-2026 12/2012
Itaqui 360 MW 100% - 299.8 Coal 2012-2026 02/2013
Pecém II 360 MW 100% - 269.2 Coal 2013-2027 06/2013(2)
Parnaíba I 676 MW 70% - 294.8 Natural
gas
2013-2027 04/2013
Parnaíba II 517 MW 100% (*)
- 247.2 Natural
gas
2014-2033 02/2014(2)
Parnaíba III 176 MW 35% 35% 49.1 Natural
gas
2013-2027 06/2013(2)
Parnaíba IV 56 MW 35% 35% 28.4 Natural
gas
2013-2018 11/2013(2)
Amapari 21.6 MW 51% - - Diesel - 11/2008
Tauá 1 MW - 100% - - - 07/2011
Total 2,887.6
MW
1.472.1 - -
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Note 1. Adjusted Capacity / Energy Sold / Annual Fixed Revenue: data adjusted considers our interest in each project
Note 2. Fixed Revenue is annually adjusted by the IPCA and represents ENEVAs interest in the ventures (amounts represented as
of the effective date of November 2012).
(*) Petra has the option to participate in up to 30% of the project, upon equivalent capital contribution. (1)
Annual pro rata fixed rate (2)
Dates estimated.
We have projects under study and development, whose construction has not started yet,
distributed across the regions of Brazil and Chile, which will use diversified energy sources,
such as mineral coal, natural gas and wind energy. These projects do not yet have energy
supply contracts and, regarding the projects in Brazil, still depend on the ANEEL’s granting.
• UTE Açu: UTE Açu, 50/50 owned by our Company and MPX E.ON, will be
strategically located in the industrial complex of Açu superport, in São João da
Barra, state of Rio de Janeiro. With a total licensed capacity of up to 5,400 MW, the
power plant is authorized to install 2,100 MW using mineral coal will be used as
input. Additionally, UTE Açu has a preliminary license to construct a natural gas-
fueled thermal plant, with capacity of up to 3,330 MW.
• UTE Sul and UTE Seival: located in the municipality of Candiota, state of Rio
Grande do Sul, the plants having our Company (50%) and MPX E.ON (50%) as
partners integrate generation of energy into exploration of natural resources and will
be supplied with Seival Mine’s mineral coal. This is our venture in partnership with
Copelmi, in the proportion of 70% and 30%. When its full commercial operation
starts, UTE Sul and UTE Seival will add 1,327 MW of installed capacity to the SIN, (i)
727 MW of installed capacity originated from UTE Sul and (ii) 600 MW of installed
capacity originated from UTE Seival.
UTE Castilla: the UTE Castilla project, proportionally held by us and MPX E.ON,
consists of a thermal power plant fueled by mineral coal. Its installed capacity is still
being analyzed. Located 80 km from the city of Copiapó, in Atacama, Chile, a region
with a significant repressed demand for energy and water, this project is expected to
be in connection to the Central Interconnected System.
“Ventos” Wind Complex: this project is entirely controlled by MPX E.ON. It is
located in the State of Rio Grande do Norte and comprises the cities of Jandaíra,
Lajes and Pedra Preta. With total installed capacity estimated of 600 MW and
planned expansion of up to 600 MW, we believe that this project is an asset with
industrial scale, being also highly competitive due to its proximity to the basic
network (30 km) and high factor of average liquid capacity (P50) estimated at 48%,
according to our analysis.
Parnaíba (expansion): We are developing a thermal complex for generation of
energy with natural gas as a result of a partnership between ENEVA, MPX E.ON and
Petra. These companies hold interests of 35%, 35% and 30%, respectively. We hold
an installation license for generation of additional 2.3GW in the Parnaíba Basin. This
additional energy may be contracted as OGX Maranhão goes ahead with its
exploration activities in the blocks of the Parnaíba Basin and identifies new wells that
may be commercially feasible for production of natural gas.
In addition to our developments and projects for energy generation, the management of
natural resources required to such generation – such as mineral coal and natural gas
(through our one third interest in OGX Maranhão, which holds an interest in eight
exploratory blocks with high potential for natural gas in the Parnaíba Basin, as described
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below, as well as our 70% interest in Seival Mine) – is one of our greatest competitive
advantages. We invest in mineral assets with strategic locations and with capacity to supply
our plants.
Our interest in natural resource assets is described below:
• Blocks in the Parnaíba Basin: OGX Maranhão, a partnership between us (one
third of capital stock) and OGX (two thirds of capital stock), is the controlling
shareholder in the concession of eight onshore exploratory blocks located at the
Parnaíba Basin, in an area of approximately 24,500 km², distributed in the states of
Maranhão, Piauí, Tocantins and a small portion of the states of Pará, Ceará and
Bahia, of which one block in partnership with the consortium formed by Imetame
Energia, DELP Engenharia Mecanica, Orteng Equipamentos (50%/ 50%), and 7
blocks in partnership with Petra, where OGX Maranhão holds a 70% interest.
According to estimates by DeGolyer & MacNaughton dated April 2011, total
contingent and prospective resources estimated in these blocks surpass 11 Tcf. In
addition, in May 2013, the Company signed an agreement with OGX, the subject
matter of which is the assignment to the Company of a 50% interest in the PN-T-168,
PN-T-153, PN-T-113, and PN-T-114 onshore exploration blocks, located in the
Parnaíba Basin, acquired by OGX at the 11th Bidding Round held by ANP on May
14, 2013. The Company will acquire a 50% interest in such blocks under the same
terms offered by OGX at the ANP’s 11th Bidding Round. The purchase price paid by
the Company, therefore, will be equivalent to half of the signing bonus and other
exploration and development commitments made in the proposals submitted by
OGX to ANP. The assignment, which is the subject matter of the Agreement, shall be
submitted to ANP’s approval as soon as the final concession contracts are signed.
• Seival Mine: located in the municipality of Candiota, in the State of Rio Grande do
Sul, 375 km from Porto Alegre, the Seival Mine, in which we hold a 70% interest, is
installed next to the UTE Sul and UTE Seival plants, which will be supplied with
mineral coal from this mine. As result of our partnership with Copelmi in the
proportion of 70% and 30%, respectively, Seival Mine may also have its production
traded in the local market. Its proven fuel reserves total 152 million tons, exceeding
the amount needed to operate UTE Sul, whose licensed installed capacity is 727
MW, or UTE Seival, whose licensed installed capacity is 600 MW. The mine’s
certified resources total 611 million tons of coal, an amount that exceeds the quantity
needed to operate the two plants together. These figures resulted from a
comprehensive drilling and research program carried out in the area, and they were
certified by John T. Boyd Company in July 1999.
In an innovative manner, we also trade energy on the free market through MPX
Comercializadora. This positioning is only possible due to the full integration of our energy
chain, which includes from the production or purchase of fuel and transportation logistics, to
the generation of energy in our plants. Currently, MPX Comercializadora is among the 10
largest companies in Brazil as to the volume of energy traded, according to the Chamber of
Electrical Energy Trade.
Business Purpose
The purpose of the Company is the generation, distribution and sale of
electricity and interest as partner or shareholder in the capital stock of other
civil or commercial companies, in Brazil or abroad, whatever the business
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purpose may be.
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7.2 - Information on operating segments
(a) Products and services sold
The revenues from ENEVA’s activities come from the three activities
performed by its direct and indirect subsidiaries.
Power Generation
Electricity, which is provided to free and special consumers, other generators
and traders in bilateral agreements, and to distributors through Electric
Power Sales Agreements on the Regulated Market;
ENEVA is a company in the Brazilian private sector with a full strategy of
integration of the energy chain, the production of electricity being its main
business. ENEVA currently operates in the North and Northeast submarkets
and it has projects under study and development, whose construction has
not started yet, in the South and Southeast submarkets. It is also present in
all submarkets of the country. Today, there are 12 generation business under
development, most with sites already identified and part of them with their
energy traded.
Its generation comes primarily from thermal sources (mineral coal, natural
gas, and diesel oil), but also has additional sources, such as solar and wind
energies. This diversification is strategic for the Brazilian energy matrix,
which today depends heavily on the hydroelectric power plants.
Electricity Sales
Revenue arising from sale of energy results from the sale of electricity
purchased for resale by the invitee MPX Comercializadora de Energia Ltda.
(“MPX Comercializadora”). Due to the adoption by the Company, as from
January 1, 2013, of new accounting standards (IFRS 11), MPX
Comercializadora has, since then, been registered by the equity method, as
a result of which the Company no longer records revenues from by MPX
Comercializadora in its consolidated financial statements.
Other services
Together with OGX, ENEVA holds an interest in eight exploration blocks with
high potential of natural gas in the Parnaíba Basin, State of Maranhão,
Brazil, through OGX Maranhão, of which 1 block in partnership with a
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consortium formed by Imetame Energia, DELP Engenharia Mecânica,
Orteng Equipamentos (50%/50%), and another 7 blocks in partnership with
Petra, where OGX Maranhão holds a 70% interest. ENEVA’s generation
plants will also be the main consumers of natural gas produced in blocks of
OGX Maranhão.
In addition, the Company invests in coal assets in southern Brazil. Seival Sul
Mineração Ltda., located in the municipality of Candiota, State of Rio Grande
do Sul, with operating license already issued, has 152 million tons of proven
reserves and 459 million tons of total resources, according to John T. Bovd
report.
(b) Revenues from the sector and their share in the Company’s net
revenues
The Company’s operating revenues from business sectors, as well as their
share in total revenue of the Company, are shown in the tables below:
3/31/2013 12/31/2012 12/31/211 12/31/2010
(in R$ million)
Net
Revenues
% of total Net
Revenues
% of total Net
Revenues
% of total Net
Revenues
% of total
Electricity generation 196.1 100.0% 215.3 43.9% 33.3. 19.8%. 35.6 36.13%.
Electricity trader - 0.0% - 0.00% 135.0 80.2%. 62.9 63.9%.
Supplies - 0.0% 0.8 0%. 0.4. 0.2%. - 0.0%.
Other - 0.0% 186.8 38.1% - 0.0% - 0.0%
Spin-off/transfers - 0.0% 88.0 38.1% - 0.0% - 0.0%
Eliminations and transfers - 0.0% - 38.1% -0,5 0.0% - 0.0%
Total Net Revenues 196.1 100.0% 490.9 100.00%. 168.3. 100.0%. 98.5. 100.00%.
(c) Profit or loss resulting from the sector and its share in the
issuer’s net income.
The revenues from the sectors of Company business, as well as their share in the net loss of the Company, are shown in the tables below: 3/31/2013 12/31/2012 12/31/211 12/31/2010
(in R$ million)
Net
income
% of total Net
income
% of total Net
income
% of total Net
income
% of total
Electricity generation -112.1. 44.7%. -182.6. 42.0%. 168.2. 41.2%. -125.7. 49.2%.
Electricity trader - 0.0% - 0.0% 2.4 -0.6% 0.2 -0.1%
Supplies -0.1 0.0% -0.7 0.2% 49.1 12.0% -21.6 8.4%
Corporate -250.9 100.0% -435,2 100.0% -408.6 100.0% -256.3 100.0%
Other - 0.0% -17.9 4.1% -2.0 0.0% - 0.0%
Spin-off/transfers - 0.0% -11.4 2.6% - 0.0% - 0.0%
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3/31/2013 12/31/2012 12/31/211 12/31/2010
Eliminations and transfers -112.1. 44.7%. 212.6 -48.9 220.3 -53.9% 147.1 -57,4%
Total Net Income (Loss) -250.9 100.0% 434.2 100.0% -408.6 100.0% -256.3 100.0%
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7.3 Information on products and services related to operating
segments
(a) Characteristics of the production process
Electricity production is nothing but a process of energy conversion. For
example, at mineral coal plants, the chemical energy of fuels (primary energy)
enables conversion into thermal energy (heat) of hot gases inside equipment
known as “steam boilers”. Then, the electricity is converted into potential energy
(overheated steam), and the energy resulting thereof is converted into
mechanical energy for rotating the steam turbine. Finally, the electrical generator
converts the mechanical energy into electromagnetic energy, that is, electricity,
which is the final form of the use of energy. This process is also in place for
natural gas fueled plants, and the thermal energy source derives from the
burning of natural gas.
Regarding diesel-fueled power generation plants (as in the case of Amapari),
energy conversion takes place through the internal combustion of diesel,
which is turned into mechanical energy for engines and electromagnetic
energy for generators.
It is also possible to generate electricity using other forms of conversion, like,
for example, taking advantage of sunlight energy by converting it into
electrical energy through appropriate photovoltaic panels, as in the Tauá
plant, as described below.
Energy generation scheme for mineral coal fueled plants:
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Steam Boiler
Superheated steam
Fuel
Fuel Burning
Air
Hot Gases
Water
Fuel (Chemical Energy)
Hot Gases (Thermal Energy)
Overheated steam (Potential Energy)
Turbogenerator
Inbound overheated steam
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Steam turbine
Electrical Generator
Outbound steam
Turbine rotation (Mechanical Energy)
Electricity
(Electromagnetic Energy)
The existing technologies for generation of electrical energy are in general very
strong, and been used for a long time now with a high level of confidence.
In general, the risks attributed to the continuity of the plants’ operations are
connected to failures in the systems or equipment, and they are mitigated
through predictive and preventive maintenance activities, as well as through
the action of operation and maintenance professionals, who are
systematically trained. As a rule, such events are minimal, and can be easily
fixed.
In any case, the Company has contracted insurance coverage for operational
and engineering risks, which also cover equipment and machines used in
the production of electrical energy, as well as the works and installations
performed.
Risks inherent to the production process
Technologies used by the company in the electricity generation processes are
widely used worldwide and enjoy high levels of reliability. Risks inherent to the
production process, which may result in interruption of activities, are mainly
related to:
(i) mechanical problems and failures in the turbines and other plant equipment,
such as valves, fans, or engines/motors
(ii) unavailability of equipment and spare parts
(iii) interruption in fuel or water supply or meteorological interferences; and
(iv) work disruption, strikes, social unrest, and other labor disputes
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ELECTRIC ENERGY GENERATION
(A) Thermoelectric Plants (UTE)
Amapari Amapari is a diesel-fired power generation plant, consisting of twelve 1,800 kW diesel engines, with a total installed capacity of 21.6 MW. The plant is located in the Municipality of Serra do Navio, about 200 km from Macapá, the capital of the State of Amapá. The plant diesel fuel is supplied by Petrobras Distribuidora S.A., located in the port of Santana. The figures below describe the diesel-fired power generation process in Serra do Navio:
Key: Chimney Exhaustion Diesel Oil Generator Set Air Radiator
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Key - Base for receipt and storage of fuel oil - Engine Room - Step-up Substation - Transformer - M - Combustion Engines - Diesel - G - Electric Generators - Electromechanical Auxiliary Services - Administrative Support and Maintenance Buildings The diesel-fired generators are supplied by tank trucks that use the road connecting the Municipality of Serra do Navio to Macapá, the capital of the State of Amapá.
The undertaking holds the Operating License, No. 172/2013, issued by the Secretary of State of the Environment of Amapá on March 25, 2013 and with expiration date on March 25, 2016.
Energia Pecém
A coal-fired thermoelectric plant located in the Municipality of São Gonçalo do Amarante, State of Ceará, with a 720 MW installed capacity, consisting of two power generating units with 360 MW installed capacity each. Energia Pecém (on which ENEVA and EDP currently hold a 50% interest each) sold 615 average MW in the New Energy Auction A-5/2007. The project was granted Operating License No. 496/2001, issued by the State Superintendence of the Environment of Ceará – SEMACE, on December 12, 2001, subsequently renewed on December 28, 2012, with the issuance of Operating License No. 1062/12 (valid until December 28,2015), as well as Operating License No. 889/12 for the transmission line (valid until September 26, 2015). Its first unit has started commercial operation on December 1, 2012.
Pecém II
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A coal-fired thermoelectric plant with expected 360 MW power generation capacity still under construction. Located in the Municipality of São Gonçalo do Amarante, State of Ceará, the plant uses the clean coal burning technology.
Pecém II (with a 100% ENEVA ownership) sold 276 average MW in the New Energy Auction A-5/2008, enabling receipt of an Broad Consumer Price Index (“IPCA”) indexed fixed income for 15 years, from 2013 (as long as the parties comply with the applicable contractual provisions).
With an Operating License issued by the Environmental Agency of the State of Ceará (Semace) on February 8, 2013, under No. 09/2013 (valid until February 8, 2016), and Installation License No. 9/2013 (valid until February 15, 2015) for the transmission line, the plant has the whole key equipment secured.
Itaqui
Porto do Itaqui, a coal-fired thermoelectric plant, has a 360 MW power generation capacity. Itaqui traded 315 MW on average, ensuring fixed revenue during 15 years as from January 2013 of approximately R$220.7 (base: Jan/07), indexed to the IPCA. The Operating License was issued by IBAMA on October 26, 2012, under No. 1101/2012 (valid until October 26, 2017). Itaqui also holds Operating License No. 1061/2011 for the transmission line (valid until December 16, 2017). The plant’s commercial operation started in February 2013.
In November 2012, Itaqui performed the first synchronization with the National Interconnected System (“SIN”) and, on February 5, 2013, it started commercially supplying energy to SIN.
The plant investment amounts to R$2.2 billion, to be used in environmental control technologies. This makes it possible to significantly reduce gas emissions.
Parnaíba Complex
ENEVA is deploying a natural gas thermoelectric power generation complex which currently has the following projects: Parnaíba I, in operation, Parnaíba II, Parnaíba III and Parnaíba IV, under construction. Natural gas is produced in OGX Maranhão exploration blocks, in a partnership between ENEVA (one third of capital stock) and OGX (two thirds of capital stock), in the Parnaíba River Basin (Maranhão).
This thermoelectric power generation complex, called Parnaíba, is strategically located: in the Municipality of Santo Antônio dos Lopes, on the gas field, and near the 500 kV President Dutra - Miranda II line, which was been sectioned for inserting the complex connecting substation.
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The volume of potentially exploitable resources in these reservoirs indicates the possibility of deploying an up to 3,722 MW power generation complex. This plant will consist of combined and open cycle modules, allowing greater flexibility for natural gas use and for power trading.
Parnaíba I
Parnaíba is comprised of four natural gas-fired 169 MW turbines, with total installed capacity of about 676 MW. The power plant contracted the sales of 450 MW on average for a period of 15 years at the A-5 auction in September, 2008, which will enable receipt of annual fixed revenue of up to R$421.2 million (base date: November 2012), indexed to the IPCA. The project’s Operating License was issued by the State Office of Environment and Natural Resources of Maranhão – SEMA/MA on December 21, 2012 (LO No. 559/2012), valid until December 21, 2016.
Parnaíba II
Also in August 2011, ENEVA won the A-3 energy auction with the Parnaíba II project (beginning of the 2nd stage of the Parnaíba Complex). More than R$6.5 billion were contracted, over a 20-year period, from a combined cycle natural gas power plant being installed in the Municipality of Santo Antônio dos Lopes, in the State of Maranhão, and which will have about 500 MW of installed capacity. The project’s installation license was issued by SEMA/MA (LI No. 274/11) valid until December 27, 2013.
Parnaíba III
In April 2013, the Company completed, in a partnership with Petra Energia S.A. and MPX E.ON Participações S.A., the acquisition of the entire capital stock of the UTE MC2 Nova Venécia (currently, UTE Parnaíba III Geração de Energia S.A.). The project was granted an installation license (LI No. 03/12), valid until November 11, 2013, for construction of a thermoelectric plant with a 176.2 MW capacity, and it sold energy in the New Energy Auction A-5, in 2008, in the form of CCEARs, totaling 98 average MW, at a price of R$189.90/MWh, enabling receipt of fixed annual revenue of R$93.5 million (both figures by the November 2012 base date) (as long as the parties comply with the applicable contractual provisions). The CCERAs are valid for 15 years.
Parnaíba IV
Also in April 2013, the Company, with MPX E.ON Participações S.A. and Petra Energia S.A., executed a contract with Kinross Brasil Mineração S.A. for deployment of a natural gas thermoelectric plant, with a 56 MW installed capacity, which holds an installation license issued by SEMA/MA (LI No. 33/13), valid until March 22, 2015, also being installed in the Parnaíba Basin, State of Maranhão. The annual contract amount is approximately R$54 million.
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UTE Açu
A ENEVA and E.ON joint venture is developing a major two-stage project, totaling 5,400 MW, in São João da Barra, North of the State of Rio de Janeiro. It is called UTE Açu. In one stage, it will use coal for producing 2,100 MW through four 525 MW generating units. Another UTE Açu stage will be supplied with natural gas and will have a 3,300 MW capacity, with ten gas and five steam turbines.
Strategically located within the Açu Superport Industrial Complex, the plant has been granted Installation License No. IN000882, for which a renewal application has been submitted, for coal-fired generation of 2,100MW, in addition to the preliminary license (LP) IN015964, also in the course of renewal, that approves the environmental feasibility, conception and location of a natural-gas fired thermal plant with total installed capacity of 3,300MW.
UTE Sul
Viewed as a great business opportunity and integrating natural product exploration, generation, and trading, the Sul thermoelectric plant (TPE) will be supplied with the Seival Mine coal, an PPX project in partnership with Copelmi (70/30). Located in the Municipality of Candiota, State of Rio Grande do Sul, the plant is expected to have a 727 MW installed capacity, with two 363.5 MW generating units. The project also includes construction of a DAM – Sul DAM – which will enable, in addition to water supply to Sul TPE’s production process, a greater availability of water in the region (multiple use dam). The Sul Dam has been granted a Preliminary License (LP) issued by the State Foundation for Environmental Protection of Rio Grande do Sul – FEPAM (LP No. 601/10), and renewal was applied for in January 2012.
The Preliminary License (LP) of Sul TPE - certifying its environmental feasibility and establishing the requirements to be met in the following stages - was granted in November 2009 for a 600 MW capacity and rectified to the current 727 MW by the Brazilian Institute of Environment and Renewable Natural Resources http://www.ibama.gov.br/(IBAMA). In August 2012, the Company applied for renewal of this LP, its effectiveness being then automatically extended.
UTE Seival
The opportunity to add further value to the Candiota coal reserve, generating competitive gains due to synergy with UTE Sul, resulted in the acquisition of Seival thermoelectric plant in November 2010.
The UTE Seival has an Installation License (LI) No. 589/2009, issued by IBAMA, valid until February 18, 2014, for an output of 600 MW, on a plot
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located within ENEVA’s concession area.
When commercial operation begins, the UTE Sul and UTE Seival complex will add 1,327 MW of installed capacity to the National Interconnected System (SIN). Both plants will be supplied by the Seival Mine coal, a ENEVA venture in a partnership with Copelmi (70/30).
UTE Castilla
The UTE Castilla is strategically located in a region with a significant unmet energy and water demand: Copiapó, Atacama, Chile. It is a coal-fired thermoelectric plant with an installed capacity under analysis.
(B)Renewable Energy
Tauá Power Plant (SPP)
The Tauá SPP has 4,680 photovoltaic panels to convert solar energy into electricity in an area of approximately 12,000 square meters. Around R$10 million were invested in the unit, whose initial capacity is 1 MW. The design also allows the gradual plant expansion to a capacity of up to 5 MW.
Since April 2011, Tauá has Operating License No. 133, issued on June 20, 2012, by the Environmental Agency of the State of Ceará (SEMACE), valid until February 28, 2014, besides ANEEL’s authorization to produce up to 5 MW. In August, 2011, the Company announced a partnership with GE Company for doubling the installed capacity of Tauá from 1 MW to 2 MW, which is still under analysis. The agreement states that the U.S. company will provides the entire package of photovoltaic technology equipment and systems. With the expansion, over 6,900 panels will be installed in the solar plant.
Ventos Wind Farm Complex
The Ventos wind farm complex is located in Rio Grande do Norte, in the municipalities of Jandaíra, Lajes and Pedra Preta, one of the areas with the greatest wind generation potential in Brazil. With a 600 MW total installed capacity and planned expansion to additional 600 MW, totaling 1,200 MW, given its proximity to the basic network (30 km) and the high factor of net average capacity (P50), estimated in 48%, according to the Company’s analyses. Currently, 158 MW already hold a Preliminary Licenses.
(b) Characteristics of the distribution process
The Company’s power plants are mostly connected to the National
Interconnected System (SIN), to which they send their produced energy
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through the basic grid, except for the Serra do Navio TEP, located in the
State of Amapá (having isolated systems). All energy traded by MPX
Comercializadora de Energia Ltda. is also sent through SIN. The above
mentioned generating plants are the Company’s direct or indirect
subsidiaries. The SIN and Isolated Systems characteristics are listed in items
7.3 (c), (d), (e), and 7.5. Currently, the Company has Preliminary Licenses
for a total of 158 MW.
(c) Characteristics of business markets
National Interconnected System and Isolated Systems
The Company’s business market is power generation and sale in Brazil. Brazil currently has about 128 GW of installed capacity, according to data available on the National Electricity Agency (“ANEEL”) website, across its existing generating plants, serving more than 61 million electricity consumers in the whole country. This installed capacity includes the National Interconnected System (SIN), the Isolated Systems, international interconnections already in operation, and also Itaipu’s share imported from Paraguay. The plants in commercial operation are subdivided according to their sources, as described in the table below.
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Operational Plants
Type
Installed Capacity
%
Total
% No. of plants
(kW) No. of plants
(kW)
Hydroelectric - 1067 84,904,144 64.32 1067 84,904,144 64.32
Gas Natural 110 11,936,349 9.04
199 12,820,092 10.32 Processed 39 1,683,663 1.29
Petroleum Diesel 1048 3,481,375 2.64
1.082 7,450,022 5.64 Residual
Oil 34 3,968,647 3.01
Biomass
Cane Bagasse
369 8,822,312 6.76
458 10,748,730 8.14
Black Liquor
15 1,304,182 0.99
Wood 46 411,435 0.31
Biogas 19 74,888 0.06
Rice Husk 9 36,433 0.03
Nuclear - 2 2,007,000 1.51 2 1,990,000 1.51
Mineral Coal Mineral
Coal 12 2,664,328 2.29 12 3,024,465 2.29
Wind - 95 2,092,541 1.45 86 2,092,841 1.45
Import
Paraguay - 5,650,000 5.46
- 8,170,000 6.19 Argentina - 2,250,000 2.17
Venezuela - 200,000 0.19
Uruguay - 70,000 0.07
Total 1,880 132,011,894 100 2,768 132,011,894 100
Source: ANEEL Generation Information Bank (www.aneel.gov.br) in February 7, 2013.
SIN is a large hydrothermal system, with a strong predominance of hydroelectric power plants and multiple owners. SIN covers power plants from the South, Southeast, Midwest, and Northeast regions, as well as part of the North region. Approximately 3,4% of the country power production capacity is outside the SIN, i.e., the so-called Isolated Systems, consisting of smaller electrical systems located mainly in the Amazon region. Electrical Energy Generation Segment In the generation segment, the current agreements on energy sale to which our subsidiaries are a party as sellers are long-term agreements (15 or 20 years) with fixed revenues adjusted by the IPCA index and holding guarantees for transfer of variable costs. In turn, the expansion of the installed capacity for generation in Brazil is mostly made through new energy auctions (regulated market) and, to a lower extent, on the free market. The auctions’ demand is determined according to the future demand for electrical energy from distribution concessionaires. On the other hand, on the free market, the demand for new generation facilities is influenced by the future demand for electrical energy from free consumers (large energy consumers). Power Trading Segment The trade of electrical energy on the free market is basically influenced by
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two drivers: the balance between supply and demand for electrical energy from free consumers, and the electric energy prices on the free market. The balance between supply and demand for energy from free consumers is influenced by their own decisions regarding the effectiveness of the agreements (short or long term), and by the demand for electrical energy from these consumers. On the other hand, electrical energy prices on the free market are influenced by various factors. In the short term, they are directly impacted by the Difference Settlement Price (PLD), which, in turn, is impacted by the levels of hydroelectric power plants’ reservoirs, future hydrological conditions, and supply and demand estimates regarding the electrical system. In the long term, the system’s structural conditions for electrical energy supply and demand will largely influence energy prices.
(i) share in each market
Electric Energy Generation
The Company’s generating units currently in commercial operation (Serra do
Navio TEP, Solara Tauá, Parnaíba I, Itaqui, and the first turbine of Energia
Pecém) have an approximate installed power of 1,780 MW.
The following units have won New Energy Auctions and are being built: the
second turbine of Energia Pecém (360 MW), Pecém II (360 MW), Parnaíba
II, III and IV (749 MW).
The agreements enable receipt of a minimum annual revenue and an
additional variable revenue intended to cover costs (fuel, operation and
maintenance) incurred when the power plant is dispatched by the National
System Operator (ONS), as long as the parties comply with the applicable
contractual provisions.
Power Trading
The Group company authorized to act as a power supplier for SIN is MPX Comercializadora de Energia Ltda. In 2012, the company sold 438 average MW, representing an increase of 247% compared to the amount sold in the previous year. Moreover, in 2012, MPX Comercializadora traded on average 428.19 MW that were not connected with the Company’s generation assets, representing a 4.99% share of the independent trading market in the SIN system.
(ii) market competitive conditions
In the generation and trading segments, the competition conditions in the
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ACR and ACL environments are set and regulated by Law 10848/2004,
Decree No. 5162/2004 and by sector legislation, in particular the standards
set by the Brazilian Electricity Regulatory Agency – ANEEL, as described in
items 7.3.d and 7.5.
In the electricity generating segment, the Company’s principal competitors
are: (i) Eletrobrás; (ii) GDF Suez Group; (iii) EDP; (iv) Cemig; (v) Copel; and
(vi) Petrobrás.
In the electricity sales segment, the Company’s principal competitors are: (i)
CPFL; (ii) EDP; (iii) BTG Pactual and (iv) Comerc.
(d) Possible Seasonality
Power Generation
Regarding thermoelectric agents participating in the Regulated Market (ACR), as is the case of ENEVA’s TEPs that have won New Energy Auctions, energy is traded through the Electricity Purchase Contracts in a Regulated Market (CCEARs) within the availability mode. Under an ACR Availability Contract, the generating unit undertakes to provide a given capacity to ACR. In this case, the generating unit revenue will be earned if the contracted energy is made available and the hydrological dispatch risk for such plants (payment for variable costs) is assumed by the buying distributor, according to Law 10848/2004. There is, therefore, no seasonal risk for the generating unit. In this type of contract, the generator receives a fixed annual revenue exactly equal to the total amount corresponding to its New Energy Auction “winning bid”. This fixed revenue must be enough for remunerating investments and covering all the plant fixed costs, including O&M fixed operation and maintenance costs, transmission/distribution tariffs, charges, and taxes. But variable generation costs are fully passed on to the distributors whenever the plant is dispatched by ONS. The distributors, in turn, pass on the variable costs to the final consumers, under the regulator’s authorization. The fixed and variable operation costs are declared by the generator in the EPE conducted process for technical qualification for auction. Regarding the indexing provided in CCEAR, the fixed revenue is indexed by IPCA. Variable costs, however, are divided into fuel cost and variable O&M cost. For imported coal, for example, the fuel cost is adjusted by the variation of the international coal price plus the exchange rate change. The variable O&M is adjusted by IPCA. On the other hand, the generation of electricity to supply our Isolated Systems has certain unique aspects. The Serra do Navio TEP contractual-regulatory arrangement provides for, in net terms, a plant monthly fixed income (Monthly Contracted Power Price), thus avoiding seasonality effects. The execution of the performance guarantee for Parnaíba III, is currently suspended, since ANEEL Communication No. 3.617/2012 determined that the insurance company J. Malucelli Seguradora S.A should execute the guarantee for the undertaking. UTE MC2 Nova Venécia S.A. submitted an
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Administrative Appeal against this decision, on the basis of which the previous decision and the execution of the guarantee were suspended.
(e) Main inputs and raw material
As reported in the characteristic of the production process, the inputs used by the Company in the thermoelectric power segment are the following fuels: natural gas, coal, and diesel.
(i) Description of supplier relationships, including whether they are subject
to government control or regulation, identifying the applicable agencies and
legislation
In the case of thermoelectric power generation, the fuels are steam coal, natural gas, oil, and water for producing steam. For coal supply, the contracts do not have any specific regulations by the government agency. For steam coal, contracts are entered into on an annual basis, and are highly competitive due to the high number of potential suppliers. For natural gas and diesel supply, the contracts are regulated by the Brazilian Petroleum Authority (ANP). Natural gas plants depend on a single supplier. However, the supplier is a company within the same economic group as the Company and the fuel supply contracts are valid in the long term, consistent with the plant CCEARs.
(ii) Possible dependence on few suppliers
In steam coal and diesel generation, there are multiple suppliers for the different plants listed in item 7.3 a. Natural gas plants depend on a single supplier. However, the supplier is a company within the same economic group as the Company and the fuel supply contracts are valid in the long term, consistent with the plant CCEARs.
(iii) Possible price volatility
As stated in item 7.3.(d), under the ACR Availability Contract, the generator receives fixed revenue plus variable revenue, in case the plant generates power. The adjustment of the fuel portion within the variable revenue is realized in accordance with price variation for each fuel and according to the agent statements in auctions. In this context, the main input price volatility has negligible impact on plants bound by Availability Contracts. Similarly, the Company’s thermoelectric plant contractual-regulatory arrangement in the isolated system ensures neutrality for the generator in case of fuel price volatility.
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7.4 - Clients accounting for more than 10% of total net revenue
a) Total amount of revenues from the customer
As of December 31, 2012, we did not have clients which individually
accounted for more than 10% of total net revenue. As of March 31, 2013, the
company does not have customers which individually account for more than
10% of total net revenues.
b) Operating segments affected by revenues from the customer
As of December 31, 2012, none of the Company’s business segments were
affected due to concentration of client revenues.
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7.5 - Relevant effects of state regulations on activities
(a) Need for government authorizations to perform the activities and
history of relationship with the government administration to obtain
such authorizations
Sector and Regulation
The new regulatory framework of the electricity sector had its inception as
from the enactment of Provisional Measures 464 and 466, of 2003,
converted into Laws 10847/2004 and 10848/2004, with regulation of the
latter by Decree 5163/2004. The sector framework has three main
objectives:
Ensure the safety of the electric energy supply: the framework
requires the contracting of 100% of the demand for energy in the regulated
market, in addition to considering a more realistic calculation of the energy
balances (guaranteed energy or physical assurance of the ventures);
Promote low cost tariffs through the efficient contracting of energy:
Consumers in the regulated market acquire energy from distributors. The low
cost tariff consists of ensuring a reliable and isonomic manner of supplying
energy as well as the most economic manner of generating energy. To attain
such purpose, the regulated market agents will be obliged to purchase and
sell energy through biddings; and
Promote the universalization of the service in the electric sector.
The following measures were taken, which are also prescribed in the
regulation, for those purposes to be fulfilled:
Creation of two energy contracting environments, the Regulated Market
(ACR) and the Free Market (ACL);
Modification of the bidding criteria, replacing the criterion of more
usage of the public asset for the criterion of the lowest tariff;
Distributors must be 100% with their contracted demand;
Downsizing of the sector, that is, separation of the generation,
distribution, sale and transmission of energy activities;
Elimination of self-dealing, that is, prohibition of bilateral contracting in
the ACR between related parties without a bidding (self-dealing may be
incidental – in the case of electric-energy generation companies that win the
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auction promoted by the Granting Power - and enters into contracts with
distributors of the same economic group);
Creation of new institutional agents to monitor and enforce the sector
policies;
Creation of universalization programs.
As aforementioned, the new framework of the electricity sector created two
energy-selling environments, ACR and ACL.
Regulated Market (ACR)
In the Regulated Market (“ACR”), distributors purchase the electricity they
expect to sell to their captive consumers, through auctions regulated by
ANEEL and organized by CCEE. Electricity is purchased from the electric
energy generators, sellers and importers.
One of the differences between the new and old regulatory frameworks is the
method used to contract with captive consumers. Under the previous
method, a distributor could contract bilaterally directly with the independent
generators or producers of electricity (PIE). However, under the new
regulatory framework, distributors must contract their electricity through
public auctions only.
The regulated auctions for the purchase of electricity by the distributors are
separated into existing electricity auctions (that aim for contract renewals),
and new electricity auctions (for contracting new plants). The government
also has the right to organize special auctions for renewable electricity
(biomass, small hydroelectric, solar and wind energy). ANEEL and CCEE
conduct these auctions.
The winners of the new electricity auctions promoted by the Granting Power
have the following main rights and obligations:
(a) are authorized to establish as Independent Energy Producers (PIE) for
the implementation and exploration of the central generator plant that
allowed their participation in the auction (the authorization/concession
established the rights and obligations of the sector agent)
(b) enter into Regulated Environment Power Purchase Contracts
(CCEARs) with the pool of distributors that declared demand in the auction.
Within this scenario, the generation agents that intend to participate in the
ACR should participate in a bidding process. The winners of these Auctions
(case of most of the Company’s UTEs) are authorized by the government to
produce energy and enter into contracts to sell energy in SIN, according to
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the price/revenue specified under the terms of the Auction bid.
The authorizations of the Company’s plants participating in the ACR are
listed below:
Holding company Power Plant Concession Act
UTE Porto do Itaqui
Geração de Energia
S.A.
Itaqui Ministry of Mines and
Energy (MME) Ordinance
177/2008
Porto do Pecém
Geração de Energia
S.A.
Energia Pecém MME Ordinance 226/2008
MPX Pecém II Geração
de Energia S.A.
Pecém II MME Ordinance 209/2009
UTE Parnaíba Geração
de Energia S.A
Parnaíba I MME Ordinance 464/2009
(ownership transferred to the
current owner by ANEEL
Resolution for Authorization
(REA) 3175/2011)
UTE Parnaíba Geração
de Energia S.A.
Parnaíba I MME Ordinance 466/2009
(ownership transferred to the
current owner by REA/
ANEEL 3176/2011)
UTE Parnaíba II
Geração de Energia
S.A.
Parnaíba II MME Ordinance 169/2012
UTE Parnaíba III
Geração de Energia
S.A.
Parnaíba III MME Ordinance 105, of
March 22, 2013
Free Market (ACL)
The Free Market (“ACL”) sells energy under freely negotiated terms between
the generation concessionaires, independent producers, self-producers of
energy, electric energy sellers, importers of energy and Free Consumers.
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All the consumers whose energy consumption exceeds 3 MW and who are
connected to tension levels above 69 kV, as well as new consumers above 3
MW, may become deregulated consumers and negotiate their energy supply
contracts directly with the generators and wholesalers within the free market,
always following the rule of being 100% contracted. Special consumers may
also negotiate under the ACL, buying energy strictly from small hydroelectric
plants (PCHs), biomass, wind and solar power plants.
ANEEL has the proper authority to authorize the Independent Production of
Energy (PIE) activities for power plants applicable to ACL (except for
hydroelectric power plants) and can operate as energy selling agent in the
SIN. Such authorizations do not depend on biddings, but only on the
fulfillment of the legislation’s specific requirements.
The authorizations and registrations for the Company’s power plants that do
not participate in the ACR, as well as for the power plants of the selling
company are listed below:
Holding Company Power Plant Concession /
registration Act
Amapari Energia S.A UTE Serra do Navio REA ANEEL 1369/2009
MPX Comercializadora
de Energia Ltda.
N/A (authorization to
operate as an energy
selling agent)
SCT/ANEEL Order
747/2008
UTE Parnaíba IV
Geração de Energia
S.A.
UTE Parnaíba IV SCAG/ANEEL Order
352/2013
It should be pointed out that the exploration of the Tauá solar power plant
does not depend on authorization by the Granting Power/ANEEL, because
this is a solar power plant with less than 5 MW of capacity.
Questioning regarding constitutionality of the New Industry Model Law
Political parties challenged the constitutionality of the New Industry Model
Law before the Federal Supreme Court. In October 2007, a decision was
rendered by the Supreme Court rejecting certain interlocutory appeals filed
within the context of action by majority vote. To date, there is still no final
decision on the merits and it is unknown when this will be rendered.
Meanwhile, the New Industry Model Law remains in force. Regardless of the
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final decision of the Supreme Court, certain provisions of the New Industry
Model Law are expected to remain in force, especially those relating to the
prohibition against distribution companies engaging in activities unrelated to
the distribution of electricity, including electricity sales to Free Consumers
and the elimination of the right to self contracting.
If all or part of the New Industry Model Law is considered unconstitutional by
the Supreme Court - STF, the regulatory framework introduced by the new
law may become null, creating uncertainty about the government’s future
actions regarding electricity sector reform. However, it is important to
mention that the Supreme Court may consider issues related to the theory of
fait accompli, in the face of consolidated situations, which is the case of facts
arising from Law 10.848 of 2004.
Main Regulatory Entities
Ministry of Mines and Energy - MME
The Ministry of Mines and Energy (“MME”) acts as the Granting Power on
behalf of the Federal Government, and its main role is to establish the sector
regulation policies and guidelines.
Brazilian Electricity Regulatory Agency - ANEEL
The Brazilian electricity sector is regulated by the Brazilian Electricity
Regulatory Agency (“ANEEL”), a federal autonomous government agency.
After enactment of the New Regulatory Framework of the Electricity Sector,
ANEEL’s main responsibilities were (i) regulating and inspecting the
electricity sector according to the policy determined by the MME; and (ii)
respond issues delegated to ANEEL by the Federal Government and the
MME. ANEEL’s current responsibilities include, among others, (i) inspection
of concessions for sale, generation, transmission and distribution of electric
energy, including approval of electric energy tariffs; (ii) enactment of
regulations for the electric sector; (iii) implementation and regulation of the
exploration of the sources of energy, including the use of hydroelectric
energy; (iv) promotion of the bidding process for new concessions; (v)
solution of administrative litigations among the electric energy sector agents;
and (vi) definition of the criteria and methodology to determine the
transmission tariffs.
National Council for Energy Policy - CNPE
In August 1997, the National Council for Energy Policy (“CNPE”) was created
to develop and create the national energy policy. It is presided by the MME,
and the majority of its members are ministries of the Federal Government. Its
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aim is to optimize the use of resources to ensure the supply of energy in the
Brazilian territory.
National Electric System Operator - ONS
The National Electric System Operator (“ONS”) was created in 1998 and is a
private non-profit entity organized under the provisions of private law
comprising the entities that render services in the generation, transmission
and distribution areas, as well as the free consumers. The Law of New
Regulatory Framework of the Electricity Sector granted to the Federal
Government Power to appoint three directors for the new Executive Board of
ONS. ONS basic role is to coordinate and control the generation and
transmission of energy of the Interconnected System, subject to the
regulation and supervisory of ANEEL. The objectives and main
responsibilities of ONS comprise: (i) planning of the operation of generation
and transmission of electric energy; (ii) organization and control of the use of
SIN and international interconnections; (iii) guarantee of access to the
transmission network without discrimination to all the agents of the sector;
(iv) provision of concessions to plan the electric system expansion; (v)
presentation to the MME of proposals to enlarge the Basic Network (these
proposals will be taken into consideration in the planning of the expansion of
the transmission system); (vi) proposition of standards related to the
operation of the transmission system for ANEEL approval; and (vii)
preparation of an optimized dispatch program based on the availability stated
by the energy generating agents.
Chamber for Electric Energy Sale - CCEE
On August 12, 2004, the Federal Government published a decree
establishing the regulation applicable to the Chamber for Electric Energy
Sale (“CCEE”) which, on November 10, 2004, succeeded the Energy
Wholesale Market (MAE), absorbing all of its activities and assets.
One of the main roles of CCEE is to make feasible the sale of electric energy
in SIN, conducting electric energy public auctions within the Regulated
Environment. Furthermore, CCEE is responsible, among other things, for (i)
registering all the energy sale contracts with the ACR, the contracts resulting
from adjustment contracting and the contracts entered into in the ACL; and
(ii) accounting for and settling the short-term transactions.
CCEE is comprised of holders of concessions, permits and authorizations of
the electric sector, as well as of Free Consumers and consumers who
acquire energy through solar, wind and biomass sources, and its Board of
Directors is formed by four members appointed by those agents, and by a
member appointed by the MME, whose position is Chair of the Board of
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Directors.
According to the Law of the New Regulatory Framework of the Electricity
Sector, CCEE is responsible for calculating the price of the electric energy
bought or sold in the spot market (Difference Settlement Price– PLD).
Energy Research Company - EPE
On August 16, 2004, through Decree 5184, the Energy Research Company,
or EPE, was created. It is a federal government company linked to the MME.
Law 10847, of March 15, 2004, granted the authorization for its creation.
EPE is responsible for conducting strategic researches in the energy sector,
including with respect to the electric energy, oil, gas, coal and renewable
energy sources. The researches carried out by EPE will be used to
concession subsidies to the formulation, planning and implementation of
actions by the MME within the sphere of the national energy policy.
Electric Sector Monitoring Committee - CMSE
The Law of the New Regulatory Framework of the Electricity Sector
authorized the creation of the Electric Sector Monitoring Committee
(“CMSE”), which is managed by the MME. The CMSE is responsible for
monitoring the systems supply conditions, proposing preventive measures to
restore the appropriate conditions of service, including actions on the
demand side and also conjuncture reserve contracts on the offer side and
others.
Environmental Licensing
The Brazilian environmental legislation determines that the construction,
installation, enlargement and operation of establishments and activities that
use environmental resources that are able to or potentially able to pollute, or
are able, under any circumstances, to cause environmental degradation, will
depend on previous environmental licensing. In the licensing, the
entrepreneur must present an environmental study that is compatible with
the risks and damages posed by the activity for which licensing is intended.
The licensing of activities whose environmental impacts are considered
relevant requires a Previous Study on Environmental Impact and its related
Environmental Impact Report (EIA/RIMA), as well as the implementation of
measures to mitigate and compensate the environmental impacts caused by
the venture. In the case of the compensatory measures, the environmental
legislation obliges the entrepreneur to address funds to the implementation
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and maintenance of conservation units, according to a percentage to be
determined by the environmental entity granting the license, in accordance
with the degree of the environmental impact caused by the venture, and
based on its total amount, excluding, among others, investments referring to
plans, projects and programs required in the environmental licensing
procedure for impact mitigation (cf. Law 9985/2000 – SNUC).
Supplementary Law 140/2011 established the general rules to define the
competence of agencies integrating the National System for the Environment
to receive environmental license applications and conduct the environmental
licensing. In general, except for the cases in which the environmental
licensing is subject to IBAMA, the environment state agencies, such as the
State Institute of Environment (INEA”) in the State of Rio de Janeiro, are able
to conduct the environmental licensing. LC 140/2011 also forecast the
possibility of the Municipalities promoting the environmental licensing of
activities with local impact, provided that the requirements prescribed in that
Law be met.
The environmental licensing process comprises the issue of three licenses,
all of them with determined validity terms and subject to specific conditions:
(i) Preliminary License: granted in the preliminary phase of the planning of
the venture or activity, approving its location and conception, attesting the
environmental feasibility and establishing the basic requirements and
conditions to be met in the next phases f its implementation; (ii) Installation
License: authorizes the installation of the venture or activity, after fulfillment
of the Preliminary License conditions and in accordance with the
specifications included in the plans, programs and projects approved,
including the environmental control measures and other conditions and (iii)
Operating License: authorizes the operation of the activity or venture, after
verifying whether the requirements included in the previous licenses were
met, with the environmental control and conditional measures determined for
the operation. Each license is issued in conformity with the development
phase of the venture, and the maintenance of its validity depends on whether
the requirements established by the licensing environmental agency were
met.
Water Resources
The Water Resources National Policy determines the use of multiple water
bodies and requires that the necessary volume for impounding or effluent
discharge (i) be previously authorized by the Public Power through the
concession of the right to use, with due regard for the required quality
parameters, in addition to (ii) causing the charging of amounts for this
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purpose. For the hydroelectric power plants located on state Rivers, the
water resources state entity is entitled to issue the concession. If it is a river
under the domain of the Federal Government, this task is made by the
National Agency of Waters (“ANA”).
The use of the water resources both for generation of energy and for use in
the industrial processes constitutes an activity subject to concession and
subsequent charge of water use.
(b) Environmental policy of the issuers and costs incurred to comply
with the environmental regulation and, if applicable, of other
environmental practices, including the commitment to comply with the
international environmental protection standards
In addition to respecting the applicable environmental legislation, ENEVA
seeks to integrate the production of energy into the preservation of the
ecosystems and the welfare of the communities where it operates. For this
reason, the company incorporates the three pillars of the sustainability,
creating economically feasible, environmentally and socially fair ventures and
supporting, voluntarily, initiatives to preserve the biodiversity and develop, on
a sustainable basis, the regions where it operates.
It was the first company of the EBX Group to establish an advisory board
directed to Sustainability, and currently it is integrated to the whole group
with the presence of the management of ENEVA S.A. and representatives of
all subsidiaries on a monthly basis for submission, review and approval of
the sustainability issues. Nowadays under implementation, the Management
System for ENEVA Sustainability will be adopted to direct how the company
will operate and will be used as a basis for a process of improvement of all
the sustainability aspects.
In 2012, the Company invested approximately R$50,000,000.00 in
environmental programs and actions.
Finally, it is noteworthy that the Company always seeks to contract loans
from financial institutions which adopt international standards and are
regularly audited by independent auditors to verify their compliance with
national legislation and international standards.
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(c) Dependence on relevant patents, trademarks, licenses,
concessions, franchises, royalty agreements relevant for the
development of activities
The Company and its subsidiaries depend on the granting of authorization by
the Granting Authority/ANEEL to perform their operating activities and carry
on their business. For additional information, see items 7.3. and 9.1.(b) of
this Reference Form. Additionally, the Company needs the licenses to
operate set forth in item 7.5.(b), issued by the respective environmental
agency. Except for the aforesaid authorization and licenses, the Company
and its subsidiaries do not depend on any other patents, trademarks,
licenses, concessions, royalty agreements for the development of their
activities.
For additional information on the Company’s trademarks and patents, domains and software, see sections 9.1 and 9.2 of this Reference Form.
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7.6 – Relevant foreign revenue
a. Revenue from clients attributed to the issuer’s country of origin
and its share in the issuer’s total net revenue
In the fiscal year ended December 31, 2012, as well as in the quarter ended
March 31, 2013, we did not record revenues deriving from other countries.
b. Revenue from clients attributed to each foreign country and its
share in the issuer’s total net revenue
In the fiscal year ended December 31, 2012, as well as in the quarter ended
March 31, 2013, we did not have record revenues deriving from countries
other than Brazil.
c. Total revenue from other countries and its share in the issuer’s
total net revenue
Not applicable, as in the fiscal year ended December 31, 2012, as well as in
the quarter ended March 31, 2013, we did not record revenues deriving from
other countries.
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7.7 – Effects of foreign regulations on activities
Given that the Company does not generate revenue in countries other than
Brazil, the Company is not subject to foreign regulations.
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7.8 – Relevant long-term relationships
ENEVA Sustainability Policy ForENEVA, sustainability is an intrinsic value of its business strategy. Our
business activities are developed so that an integrated view that is capable
of equating financial return to shareholders and employees, social and
economic development, environmental protection, safety for people, asset
integrity, cultural diversity and rational use of natural resources is applied.
Senior Management assumes a proactive and responsible attitude toward ensuring the application of this Policy as the basis for all business decisions. Thus, ENEVAS.A. is committed to:
I. Adopting the concept of prevention related to environmental, social,
health and safety issues in its activities, products and services and in its
entire lifecycle;
II. Respecting human rights when conducting its activities, operations
and services;
III. Seeking the development and retention of workforce and fighting
against discrimination by promoting diversity at work;
IV. Offering dignified working conditions to employees and workers of
contractors, in accordance with the best quality standards;
V. Protecting people’s health, safety and integrity from risks and impacts
related to their activities, operations and services: employees and workers of
contractors and business partners working at its facilities or on its behalf and
other interested parties potentially affected by these risks and impacts;
VI. Identifying and managing positive and negative impacts on the
environment and people and providing the effective management of the use
of natural resources, seeking to use the best market practices;
VII. Contributing to protecting biodiversity and responsibly managing its
impacts on biodiversity;
VIII. Effectively managing solid waste and liquid and gas effluents,
including greenhouse gases originated from its activities, seeking to use the
best technologies and processes available for control of emissions;
IX. Investing in research, scientific development and technologic
innovation directed toward rationalization of the use of natural resources and
reduction in social and environmental impacts;
X. Keeping a transparent, credible and ethical relationship with its target
audience;
XI. Adopting anti-corruption practices in conducting its business;
XII. Seeking to understand expectations and promote involvement of its
interested parties;
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XIII. Promoting local sustainable development in regions where it operates,
in partnership with the interested parties, adopting and disseminating
territory’s management and governance practices that incorporate the
integrated nature of social, environmental, economic and cultural fields;
XIV. Respecting cultural, regional and ethnic diversity in regions where it
operates;
XV. Promoting education, qualification and awareness of its employees
and workers of contractors for environmental, social, cultural, health and
safety issues;
XVI. Requiring contractors and business partners to comply with legal
requirements and normative instruments provided for in the SGS;
XVII. Complying with legal and other applicable requirements;
XVIII. Implementing a management system that ensures continuous
improvement in applying the sustainability concept to the company and its
business units;
XIX. Establishing tools to meet continuous improvement in sustainability
management and performance standards.
Throughout 2011, ENEVA S.A. conducted an internal preparatory study for
sustainability reporting according to the Global Reporting Initiative (GRI)
standard. The study also contemplated actions aiming at adherence to the
initiatives of the Global Compact and the integration into ISE-BOVESPA’s
portfolio.
The primary purpose of this study was to raise information on sustainability
actions and themes that will be subject to report, such as health & safety,
work and human rights indicators, among others, in order to identify
indicators either available or not, so that ENEVA could define its positioning
and reporting capacity. The result of this study defined the current situation
and actions required for ENEVA to be able to measure, publish and justify
organizational performance focused on sustainable development to all its
stakeholders.
In this sense, ENEVA reassessed the schedule for development of its
Sustainability Report, taking into account the Company’s peculiarities and
respective business plan. Considering the need to systematize the
information gathered from the internal study developed by the Company to
enable the disclosure of information on sustainability in the scope of the
Global Reporting Initiative (GRI) standard, ENEVA aims to publish its
Sustainability Report by 2014, when it expects to consolidate the social and
environmental investments currently in progress.
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For more information, see item 7.5 (b) of this Reference Form.
Environmental Responsibility
The company encourages initiatives for the preservation of biodiversity and
sustainable development in the regions where it operates. These principles
are reflected both in offsetting, monitoring and mitigation actions for
environmental impacts associated with Licensing and voluntary social and
environmental initiatives. Around 200 social and environmental plans and
programs are currently in progress.
Upon establishing in a region, ENEVA seeks to contribute to the local social
development and to keep a transparent dialogue with its target audience, in
order to get to know their expectations better, thus keeping an effective
communication channel.
ENEVA provides direct communication channels through a 0800 toll-free
telephone line and via Internet, as well as permanent teams that interface in
person with the communities where the company is present, establishing a
permanent dialogue with local associations, government institutions, NGOs,
opinion makers and other social players.
The company seeks to fully comply with legal requirements in implementing
environmental offsetting, monitoring and controlling measures. In the social
area, investments made in 2012 include the Medical Center and Police
Group of Vila Canaã, which will directly benefit around 10,000 people.
In December, the facilities of the first phase of the Fishing Warehouse of São
João da Barra were concluded and delivered. The project is an initiative of
EBX Group’s companies in partnership with the Local Government of São
João da Barra, which will spur the productive chain of the fishing sector in
the region.
Voluntary Investments
’s Social Investment actions are performed in a planned manner and linked
to the business, and their results are constantly assessed. The amount of
R$19 million has already been invested in preserving biomass and in
voluntary social and environmental projects.
The Preserved Caatinga Project (Projeto Caatinga Preservada), developed
in partnership with Caatinga Association (Associação Caatinga), will enable
an increase by nearly 45% in the number of private protected areas (RPPNs)
in the state of Ceará. In the Pantanal area of the State of Mato Grosso, the
protected area accounts for 70,000 hectares, in accordance with the
Preservation Project (Projeto de Conservação) for Acurizal, Penha, Dorochê
and Rumo ao Oeste RPPNs”.
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By means of a commitment entered into with Chico Mendes Biodiversity
Preservation Institute (Instituto Chico Mendes de Conservação da
Biodiversidade, or ICMBio), an agency of the Ministry of Environment, the
company provides funds for handling and preservation of Lençóis
Maranhenses National Park. In 2012, the focus of social investment actions
and projects in locations near its ventures was on education, health and
income generation areas. The Healthy Children, Healthy Future Program
(Programa Crianças Saudáveis, Futuro Saudável), which seeks to improve
children’s quality of life, contributing to the fighting and prevention of worm
infection and anemia, reached 10,000 beneficiaries.
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7.9 Other relevant information
Market Opportunities
The following are our considerations on some energy sector opportunities,
from which we may benefit, including recent regulatory changes by the
Brazilian Federal Government, the diversification of the Brazilian energy
matrix, the occurrence of new energy auctions, and the description of regions
with potential for energy exploration.
Recent regulatory changes
Recently, the Brazilian federal government enacted Provisional Measure
579, converted into Law No. 12783, dated January 11, 2013, whose purpose
is to enable reduction of electricity cost to Brazilian consumers, promote low
tariffs, ensure electricity supply, and make the production sector even more
competitive.
With this purpose, and in order to allow flexibilization of electricity tariffs,
rules were established to enable the extension, in 2013, of electric power
generation, transmission, and distribution concession contracts granted until
19951, which are currently heavily depreciated and amortized.
Such concessions will normally be extended over 30 years, subject to certain
conditions that industry players shall meet. For thermoelectric generation, the
extension may be for up to 20 years, regardless of the date of grant. The
greatest innovation for these agents is that, at MME’s discretion, the energy
generated by the plants may be directly contracted as backup power.
The changes introduced by the new regulations directly and effectively affect
generating companies whose activity has been granted by MME through
concessions. Our plants are operated or are being built through the grants
we have received, after 2008, through permits. Thus, our concessions
obtained prior to 2005 are not directly affected by such changes.
Nevertheless, we believe that the measures imposed by the new regulations
will open many opportunities for new investors and increase the importance
of alternative generation sources to hydroelectric sources, especially
thermoelectric generation.
Energy sector growth and structural energy deficit in the short term
In recent years, the Brazilian economy has been showing positive scenarios,
arising especially from favorable prospects, involving investments in
infrastructure for the country’s growth, in sports events to be held between
1 The exception is the thermoelectric generation, which may have been granted on any date.
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2014 and 2016, and in oil exploration and production.
Economic growth requires structural improvements enabling the long-term
maintenance of a high economic standard. As for the electricity sector,
attempts have been made to structure growth in a way to keep up with the
high economic standard via, for example, the continued success of the new
and reserve energy auctions.
However, the recent regulatory changes and growth prospects coupled with
the quest for environmental sustainability and the delayed start of operations
by some power plants are factors that may negatively impact the reliability of
energy supply and price stability.
Concerns about environmental sustainability have focused mainly on the
construction of large hydroelectric plants, with high environmental impact on
the region where they are installed. The government intends to encourage, in
the long term, smaller hydroelectric plants and the intensified implementation
of new energy sources.
We believe that the growth in the renewable energy sector is directly related
to several factors, among which we highlight: (i) the global concern regarding
the impact that energy generation from non-renewable sources has on the
environment, with the consequent replacement of fossil fuels, (ii)
international agreements providing for the use of carbon credits generated by
such sources, providing additional revenue beyond that arising from power
generation, (iii) government incentives through favorable national laws, (iv) a
decrease, in recent years, in the installation costs for new plants, in
particular, wind power plants, and, finally, (iv) returns that may attract large
investment amounts from both government and private investors.
Inputs mentioned above are the same ones used in thermoelectric plants.
Thus, the increased production and consumption of such products indicates
continuous parallel growth in investments on such energy source.
We have developed and invested in projects involving alternative energy
sources and have favorable conditions for their development, such as the
ownership of inputs required for operating thermoelectric plants through
partnerships. Gas production in the OGX Maranhão’s Gavião Real field will
be strategically directed to the Parnaíba thermoelectric plant. The field is
located close to the thermoelectric plant, allowing cost reduction for power
production. The coal extracted from the Seival Mine will be used as input for
operating the Sul TEP and MPX Seival thermoelectric plants. The proximity
of the mine to these projects is vital for achieving competitiveness in the
prices of energy we will produce.
We therefore believe we are prepared for changes in energy policies and
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focused on the investment on matrices that are strategic for the Brazilian
energy sector in the coming years.
Strengths
We believe that we have the following strengths:
Excellent positioning to take advantage of the growing demand for energy in Brazil.
Brazil has historically been very dependent on water resources for its power grid, and this
has had grave consequences in the past, when severe droughts affected the reservoirs of
the major hydroelectric schemes and led to electricity rationing in 2001. In the face of this
challenge, alternative sources of energy have been gaining momentum over the last
decade, helped by government incentives, and thermal power is of particular importance in
the context of this policy, as it tends to make the system more reliable. We believe that we
are well placed to meet the coming demand for energy supplies in Brazil, with the assets
already in operation and our high quality thermal projects currently in progress, plus the fact
that our coal-powered thermal plants are being readmitted to the electricity auctions as from
August 29 this year. In addition to this, our unique integrated fuel supply position resulting
from our partnerships allows us to possess and exploit the inputs necessary for generating
our own energy. We are confident that after the Offering we shall have the capacity needed
to finance our growth through these new projects.
Proven track record We can show a past record of success in executing and implementing
our projects. Since our IPO in December 2007, when almost all our projects were at the
development stage, five of our plants have come on stream, and four more are under
construction. The total capacity contracted is 2.9 GW. New projects which were not
envisaged at the time of the IPO have been developed, and today are of extreme
importance strategically, showing how successful we are at adapting to changes in the
market scenario. Our experience is also reflected in the successful partnerships we have
formed and our joint ventures with well-known and important players in the sector, among
them E.ON, EDP and Petra. We also successfully completed fund raising operations for our
projects, issuing R$1.4 billion in convertible debentures in 2011, and with E.ON’s investment
of R$1.0 billion in 2012, to subscribe for our new shares.
Verticalization and integration of operations. The verticalization of our operations and the
full integration of the energy chain make our commercial strategy more competitive and
more flexible, reducing the risk of fuel cost variations and income volatility. The integration of
our operations simplifies the logistics and allows us to use fuel more efficiently, as well as
reducing our dependence on Petrobras, since we have the OGX Maranhão exploratory
blocks supplied with energy generation under contract from the Parnaíba I, II, III and IV
UTEs (total installed capacity 1425 MW), and the Seival mine is supplying coal to UTE Sul
and the Seival UTE, which will supply part of our assets in partnership with well-known
private players in these markets.
High quality assets and project portfolio. Together with our partners we have a
remarkable portfolio of high quality assets and projects. Five of our plants are already in
operation, with a total installed capacity of 1,780 MW. We are also at an advanced stage in
constructing a coal-fired thermoelectric plant in the northeastern region of Brazil, providing
additional capacity of 360 MW and with 15-year power supply agreements already signed.
We also have the Parnaíba complex plants under construction, providing further capacity of
749 MW in all. The Açu generation complex in São João da Barra, in the northern part of the
state of Rio de Janeiro, with total plant capacity of up to 5400 MW. We have projects for
another two coal-fired thermoelectric plants, UTE Sul and UTE Seival, with total installed
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capacity of 1327 MW, to be built in the municipality of Candiota, in Rio Grande do Sul, where
they can be supplied with coal from the Seival mine. Lastly, we have capacity estimated of
600 MW wind power project through MPX E.ON Participações, with an option to expand it to
1200 MW, located in Rio Grande do Norte.
Control Group with wide experience in the energy sector. We are currently controlled by
Mr Eike Batista and by E.ON, which is turn is controlled by E.ON SE. Our relationship with
E.ON began in April 2012, when we entered into a strategic partnership, with the
establishment of a joint venture, to share complementary capacity for accelerating our
growth, and with the acquisition by E.ON of 11.7% of the shares of ENEVA by means of a
further capital increase amounting to R$1 billion. This partnership was also intended to join
us to a well-known partner with significant experience in the sector where we operate, so as
to allow us to develop a solid asset portfolio, by the transfer of a range of technologies and
know-how from the technical team, to become more competitive than the other companies in
our market, and to expand our energy generation business and related supply and
marketing activities. In addition, an Investment Agreement was executed in March 2013,
according to which E.ON undertook to acquire from Mr Eike Batista 24.5% of our common
shares and in May 2013, upon the effective transfer of these shares, its interest in our capital
stock reached 36.2%. Subsequently Mr Eike Batista and E.ON executed a shareholders’
agreement regulating the principal issues of their joint control over our company. The fact
that E.ON is now one of our controlling shareholders has given us access to the expertise of
one of the major players in the world energy sector, in addition to the advantages from the
abovementioned partnership.
Strategy
We plan to become a leader among Brazil’s private-sector energy generating companies,
with clear-cut diversification of sources and regions of operation, and to take advantage of
strategic opportunities in Latin America. We shall implement the following strategies to
maximize shareholder return based on our strengths:
To exploit growth opportunities by constantly developing actual and potential energy
projects. Our experience in the market has enabled us to sign up 2.9 GW in projects since
our IPO in 2007. Since then we have also been adept at following market trends and taking
advantage of opportunities for conceiving new projects. One of our priorities is the
successful completion of our current projects, so that we can be ready to grasp any
opportunities for developing new projects, especially through our strategic partnerships with
other players in the sector.
To diversify energy sources by operating thermal plants using a variety of fuels and
renewable energy. The predominance of hydropower in the Brazilian energy grid has
created risks for the country in the past, with serious loss being suffered on occasion, and in
recent times warning signs have again been seen with the low levels of the reservoirs of the
major hydroelectric schemes. As a result, the production of electricity from alternative
sources has become more widespread in recent years, with incentives being offered.
Following this trend, we have constructed a diversified portfolio of projects intended to
exploit thermoelectric energy generation - using natural gas and coal - as well as renewable
sources, such as solar energy and wind power. These renewable sources are still not used
to any significant extent, but there is great potential for increasing their use in Brazil. We
intend to continue with this business strategy and thus to position ourselves not only to
supply the shortfall in Brazil’s energy sector, but also to grasp the opportunities that will
continue to arise as demand grows in tandem with the country’s demographic and economic
expansion.
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To seek potential acquisitions that complement our portfolio and add value for our
shareholders. We are continually analyzing new business opportunities that could
contribute to our portfolio diversification strategy, not only in the energy generation sector but
also in fuel exploration and production, and in the logistics of transporting it to the generating
plants, as a reflection of our focus on the vertical integration of our business. In addition to
developing new projects, we intend to devote our efforts increasingly to prospecting
acquisition opportunities in the market that will add significant value for our shareholders.
This was our objective in setting up MPX E.ON, a joint venture with E.ON, an international
player with vast experience in analyzing and completing acquisitions, and now one of our
controlling shareholders, so as to develop a solid portfolio of energy assets and accelerate
our growth. We shall incorporate MPX E.ON after the Offering has been completed, which
we expect to allow us to benefit from synergies between the Company and MPX E.ON. We
are also in strategic partnerships with other major players in the energy sector, such as EDP
in the Energia Pecém, Eletronorte, in Amapari, and Petra, in the generation of energy and
exploitation and production of natural gas in the Parnaíba Basin.
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8.1 Description of economic group
(a) Direct and indirect controlling shareholders
The Company is directly controlled by Mr. Eike Fuhrken Batista (who holds,
directly and indirectly through Centennial Asset Mining Fund LLC and
Centennial Asset Equity Fund LLC, 29.00% of the Company’s capital stock)
and by DD Brazil Holdings S.A.R.L (which holds 36.20% of the Company’s
capital stock), both of which are a party to a shareholders agreement signed
on May 27 2013, and which is described in item 15.5 of this Reference Form.
Centennial Asset Equity Fund LLC is fully owned by Centennial Asset Mining
Fund LLC, which, in turn, is fully owned by Mr. Eike Fuhrken Batista.
DD Brazil Holdings S.A.R.L. is a company belonging to the German group
E.ON, established in compliance with the Luxembourg laws, whose
controlling shareholders are described in items 15.1 and 15.2 of this
Reference Form.
The corporate purpose of Centennial Asset Equity Fund LLC, Centennial
Asset Mining Fund LLC, and DD Brazil Holdings S.A.R.L. is to hold interest
in other companies.
(b) Subsidiaries and affiliates
The Company has the following direct subsidiaries or joint subsidiaries:
Interest Activities
Direct subsidiaries
MPX Pecém II Geração de Energia S.A. 99,70%
Energy Generation - Pecém II plant
UTE Porto do Itaqui Geração de Energia S.A. 100,00%
Energy generation - Itaqui plant
Amapari Energia S.A. 51,00%
Energy generation - Serra do Navio
plant Seival Sul Mineração Ltda.
70,00%
Industry and trade of minerals
Termopantanal Participações Ltda.
66,67% Interest in other
companies UTE Parnaíba Geração de Energia S.A.
70,00%
Energy generation - Parnaíba plant
UTE Parnaíba II Geração de Energia S.A.
100,00%(*) Energy generation - Parnaíba II plant
UTE Parnaíba V Geração de Energia S.A.
99,99% Interest in other
companies
MPX Investimentos S.A. 99,99%
Interest in other companies
MPX Desenvolvimento S.A. 99,99%
Interest in other companies
MPX Tauá II Energia Solar Ltda. 100,00% Energy generation
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- Solar II plant
Affiliates (equity pick-up)
OGX Maranhão Petróleo e Gás S.A. 33,33%
Research, mining,
refining, trade and transport
of oil and natural gas
UTE Porto do Açu Energia S.A.(2)
50,00%
Energy generation -
Açu plant
UTE MPX Sul Energia Ltda.(2)
50,00%
Energy generation -
MPX Sul plant
MPX Chile Holding Ltda.(2)
50,00%
Interest in other
companies
Porto do Pecém Transportadora de Minérios S.A. 50,00%
Transport of minerals through
conveyor belts in the
Industrial Complex of the Port of
Pecém
OGMP Transporte Aéreo Ltda. 50,00%
Acquisition of aircraft for
exploration of non-
scheduled air transport
Pecém Operação e Manutenção de Unidades de Geração S.A. 50,00%
Operation and maintenance
services for energy
generation units
Seival Participações S.A.(2)
50,00%
Interest in other
companies
MPX E.ON Participações S.A.(3)
50,00%
Interest in other
companies
UTE Porto do Açu II Energia S.A.(2)
50,00%
Energy generation - Açu II plant
Mabe Construção e Administração de Projetos Ltda. 50,00%
Interest in other
companies
Parnaíba Participações S.A.(2)
50,00% Interest in other
companies
(1)
Petra has the option o participate in up to 30% of the project upon equivalent capital contribution. (2)
Companies in which MPX E.ON has a direct interest of 50%. (3) It has a 100% direct interest in the following companies: MPX Solar Empreendimentos Ltda., MPX Comércio de Combustíveis Ltda., Nova Sistemas de Energia Ltda., MPX Comércio de Energia Ltda., SPE’s Ventos.
Additionally, the Company holds an indirect interest in the following companies:
Company Interest (1)
Activities
Termopantanal Ltda. 100.00% Electricity generation
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Company Interest (1)
Activities
Comercializadora de Equipos y Materiales Mabe Limitada 100.00%(2) Executino of EPC contracts for
Pecém I, Pecém II and Itaqui
MPX Energias Renovables Ltda. 100.00%(3)
Energy generation
CCX Castilla Generación Ltda. 100.00%(4)
Interest in other companies
Inversiones CCX Castilla Uno-A Ltda. 100.00%(5)
Energy generation - Uno-A plant
Inversiones CCX Castilla Uno-B Ltda. 100.00%(6)
Energy generation - Uno-B plant
CCX Castilla Uno SpA 100.00% Interest in other companies
Usina Termelétrica Seival Ltda. 100.00% Energy generation - Seival plant
UTE Parnaíba IV Geração de Energia Ltda. 70.00% Energy generation - Parnaíba IV
plant
Parnaíba Geração e Comercializadora de Energia S.A. 70.00% Interest in other companies
MPX Tauá Energia Solar Ltda. 100.00% Energy generation - Tauá plant (1)
The percentages above refer to the direct interest held by the Company’s direct subsidiaries in each one of these
companies, as shown in the chart included comprised in item 8.2 of this Reference Form. (2)
Considers the direct interest held by Pecém Operação e Manutenção de Unidades de Geração S.A. (0.0001%) and Mabe
Construção e Administração de Projetos Ltda. (99.9999%). (3)
Considers the direct interests held by MPX Chile Holding Ltda. (1.00%) and CCX Castilla Generación Ltda. (99.00%). (4)
Considers the direct interests held by MPX Chile Holding Ltda. (99.90%) and MPX E.ON (0.10%). (5)
Considers the direct interests held by MPX Chile Holding Ltda. (0.10%) and CCX Castilla Generación Ltda. (99.90%). (6)
Considers the direct interests held by MPX Chile Holding Ltda. (0.10%) and Inversiones CCX Castilla Uno-A Ltda.
(99.90%).
For additional information on our direct and indirect subsidiaries and
affiliates, see item 8.2 of this Reference Form.
(c) Company’s interest in the group’s companies
The Company does not have any interest in companies of the economic
group to which it belongs other than those mentioned in the prior item.
(d) Interest of companies of the group in the Company
There are no shareholders in the Company other than the controlling
shareholders identified in item (a).
(e) Companies under common control
There are no companies under common control with the Company.
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8.2 – Organizational chart of economic group
The Company chose not to disclose its corporate organizational chart
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8.3 – Restructuring transactions
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Date of transaction 05/16/2013
Corporate Event Blocks Assignment by OGX
Description of
transaction
In May 2013, ENEVA informed the market that it
entered into an agreement with OGX for the
purpose of assigning to ENEVA an interest of 50%
in the Blocks located in the Parnaíba Basin,
acquired by OGX at the 11th Bidding Round held by
ANP, on May 14, 2013. ENEVA will acquire an
interest of 50% in the Blocks under the same
conditions offered by OGX at ANP’s 11th Bidding
Round. The acquisition price paid by ENEVA, thus,
will be equivalent to half the signing bonus and
other exploration and development commitments
assumed in the proposals submitted by OGX to
ANP. The assignment that is the subject matter of
the Agreement is contingent on approval by the
ANP as soon as the Block concession agreements
are signed.
Date of transaction 04/26/2013
Corporate Event Kinross Partnership
Description of
transaction
In April 2013, the Company, jointly with MPX E.ON
Participações S.A. Petra Energia S.A., signed a
contract with Kinross Brasil Mineração S.A. to
implement a natural gas thermal project, with
installed capacity of 56 MW, to be installed in the
Parnaíba Basin, state of Maranhão. The annual
value of the agreement is approximately R$54
million.
Date of transaction 04/05/2013
Corporate event Acquisition of Parnaíba III
Description of
transaction
On April 5, 2013, ENEVA informed the market that it
had concluded the acquisition of 100% of the
capital stock of Parnaíba III by ENEVA, MPX E.ON
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Participações S.A. - a joint venture between ENEVA
and E.ON SE - and Petra Energia S.A. On March
26, 2013, the authorization by the Ministry of Mines
and Energy to change the fuel and transfer the
location of the Project was published. The project,
which has permission to construct a thermal power
plant with capacity of 176.2 MW, was transferred to
the Parnaíba Basin, where ENEVA is currently
constructing 1,369 MW, 1,193 MW of which already
have long-term agreements in the Regulated
Environment. Additional capacity, with start-up
scheduled for May 2013, will supply the Nova
Venécia agreements which sold power at the
auction Leilão de Energia Nova A-5, held in 2008,
in the form of CCEARs, totaling 98 average MW, at
the price of R$189.9 / MWh and annual fixed
revenue of R$93.5 million (both values in having
November 2012 as the base-date). The CCEARs
mature in 15 years, as of 2013.
Date of transaction 03/27/2013
Corporate event Disposal of shares
Description of
transaction
On March 27, 2013, Mr. Eike Fuhrken Batista, and E.ON SE entered into an Investment Agreement. After verification of the conditions precedent included in the Investment Agreement, on May 29, 2013, E.ON SE, through its subsidiary DD Brazil Holdings S.A.R.L., acquired 141,544,637 shares of the Company held by Mr. Eike Fuhrken Batista and by a number of shareholders of ENEVA, holders of options to purchase ENEVA shares, corresponding to 24.47% of its share capital. Besides, E.ON and Mr. Eike Fuhrken Batista entered into a shareholders’ agreement which regulates, among other matters, the exercise of voting rights and restrictions to the transfer of shares in the Company’s capital stock.
Date of transaction 03/27/2013
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Corporate event Acquisition of MABE shares
Description of
transaction
On March 27, 2013, the Company announced to the market that in conjunction with EDP-Energias do Brasil S.A. and in equal proportions, it concluded the acquisition of 100% of the shares of MABE Brasil Ltda., a consortium formed by the company Maire Tecnimont SpA and the Efacec Group, related to the management of the works at the Thermal Power Plants Pecém, Itaqui and Pecém II, for the sum of R$1.00.
Date of transaction 05/24/2012
Corporate event Spin-Off
Description of
transaction
ENEVA spun off its stake in CCX Brasil, thus segregating 100% of its direct interest in MPX Austria and its indirect interest in MPX Vienna and MPX Colombia, converted into CCX. The spin-off comprised one of the steps of ENEVA ’s corporate reorganization, in order to separate from its structure the exploration rights of coal in certain mines located in Colombia and is related to the strategic partnership between ENEVA and E.ON SE.
Date of transaction 05/24/2012
Corporate event Other
Description of the corporate event “Other”
Subscription of Shares
Description of
transaction
E.ON SE subscribed and paid up new common shares of ENEVA due to the assignment of preemptive right from Mr. Eike Batista to E.ON SE in the context of the capital increase of the Company in the amount of R$1,000,000,063.00. As disclosed in the Material Fact dated April 18, 2012, the Company entered into definitive agreements
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related to the transaction, by means of which: (i) ENEVA and E.ON SE have formed a 50:50 joint venture to accelerate growth and develop in Brazil and in Chile of a larger and more profitable energy-related business; and (ii) ENEVA raised R$1,000,000,063.00 through a capital increase in which E.ON gained a 11.7% interest in ENEVA.
Date of transaction 11/22/2010
Corporate event Acquisition and sale of important assets
Description of
transaction
ENEVA acquired from Tractebel Energia S.A. the Seival Thermal Power Plant project (“UTE Seival”), which holds a License To Install 600 MW of coal capacity in the municipality of Candiota, of Rio Grande do Sul State.
Date of transaction 05/28/2010
Corporate event Spin-Off
Description of
transaction Corporate restructuring of MPX Energia de Chile Ltda., through partial spin-off, where the assets and liabilities related to the coal-fueled thermal power plant remained in the existing company and the others were transferred to a new company denominated MPX Chile Holding Ltda. As part of the restructuring mentioned above MPX Energia de Chile Ltda. had its name changed to CGX Castilla Generación S.A.
8.4 – Other relevant information
There are no other relevant information to be inserted in this item.
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9.1- Relevant non-current assets - other
The information on relevant non-current assets of the Company is provided
in items 9.1 (a), (b) and 9.1 (c) of this Reference Form.
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9.1 - Relevant non-current assets / 9.1.a - Property, plant and equipment
Description of property, plant and equipment
Country of
location
State of
location City of location Type of property
Grid and substation of Amapari Energia S.A. Brazil AP Amapari Owned
Machinery and equipment of Porto do Pecém S.A. Brazil CE Fortaleza Owned
Machinery and equipment of Tauá Solar Ltda. Brazil CE Fortaleza Owned
Buildings, Works and improvements of Energia Pecém Brazil CE Fortaleza Owned
Land of UTE Parnaíba Geração de Energia S.A. (1) Brazil MA Sto. Antonio dos Lopes Owned
Construction in progress - Advances (acquisition of Equipment and Construction)
of UTE Porto do Itaqui Brazil MA São Luis Owned
Construction in progress - Advances (acquisition of Equipment and Construction)
of Energia Pecém Brazil CE Fortaleza Owned
Construction in progress - Advances (acquisition of Equipment and Construction)
of Pecém II Brazil CE Fortaleza Owned
Cost of labor allocated to construction of Itaqui Brazil MA São Luis Owned
Cost of labor allocated to construction of Energia Pecém Brazil CE Fortaleza Owned
Cost of labor allocated to construction of Pecém II Brazil CE Fortaleza Owned
Capitalized interest of Itaqui Brazil MA São Luis Owned
Capitalized interest of Energia Pecém Brazil CE Fortaleza Owned
Capitalized interest of Pecém II Brazil CE Fortaleza Owned
Capitalized interest of Parnaiba Brazil MA Sto. Antonio dos Lopes Owned
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Capitalized interest of Parnaiba II Brazil MA Sto. Antonio dos Lopes Owned
Environmental permits and projects studies of ENEVA S.A. Brazil RJ Rio de Janeiro Owned
(1) Property enrolled under No. 2.380 at the Real Estate Registry of the Judicial District of Santo Antonio dos Lopes, owned by UTE Parnaiba
Geração de Energia S.A.
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9.1 - Relevant non-current assets / 9.1.b – Patents, trademarks, licenses, concessions, franchises and technology
transfer agreements
Type of
asset
Description of
asset
Territory
covered
Term
Events that may cause loss of
rights
Consequences from the loss of
rights
Trademarks MMixed mark
ENEVA No.
828327300
Brazil Registration valid until April 1,
2018
In the administrative scope, the
events that may lead to the loss of
rights regarding such trademarks
are: (i) termination of effectiveness
terms without the due and timely
payment of official renewal fees; (ii)
partial or total waiver of our rights
regarding the products and
services showing the trademark;
(iii) lapse of registration, due to
unjustified non-use of the
trademark; (iv) use of the
trademark with significant changes,
which may cause changes in its
original distinctive character as it is
informed in the certificate of
registration, for a period equal to or
above 5 years, as from the
registration date; or (v) statement
of annulment of registration
obtained by third parties after
favorable decision in the
administrative scope. In the judicial
scope, despite holding the
ownership of our own trademarks,
third parties may allege that we are
violating intellectual property rights
and get favorable court decisions.
There is no way to quantify the
impact. Loss of the rights to the
trademarks implies that it will not be
possible to prevent third parties from
using identical or similar trademarks
to indicate even competing products
or services, given that the holder no
longer holds the right to exclusive
use of the sign. The possibility also
exists of legal actions being filed
against the holder in the criminal
and civil spheres on the grounds of
undue use in case of violation of
third party’s rights, as a result of
which it may be impossible to use
the trademarks in its business
activities. In any way, the Company
understands that the loss off such
trademarks will not have a materially
adverse effect on its operations and
financial condition.
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Type of
asset
Description of
asset
Territory
covered
Term
Events that may cause loss of
rights
Consequences from the loss of
rights
Trademarks Word mark MPX
No. 828327297.
Brazil Registration valid until April 1,
2018
In the administrative scope, the
events that may lead to the loss of
rights regarding such trademarks
are: (i) termination of effectiveness
terms without the due and timely
payment of official renewal fees; (ii)
partial or total waiver of our rights
regarding the products and
services showing the trademark;
(iii) lapse of registration, due to
unjustified non-use of the
trademark; (iv) use of the
trademark with significant changes,
which may cause changes in its
original distinctive character as it is
informed in the certificate of
registration, for a period equal to or
above 5 years, as from the
registration date; or (v) statement
of annulment of registration
obtained by third parties after
favorable decision in the
administrative scope. In the judicial
scope, despite holding the
ownership of our own trademarks,
third parties may allege that we are
violating intellectual property rights
and get favorable court decisions.
There is no way to quantify the
impact. Loss of the rights to the
trademarks implies that it will not be
possible to prevent third parties from
using identical or similar trademarks
to indicate even competing products
or services, given that the holder no
longer holds the right to exclusive
use of the sign. The possibility also
exists of legal actions being filed
against the holder in the criminal
and civil spheres on the grounds of
undue use in case of violation of
third party’s rights, as a result of
which it may be impossible to use
the trademarks in its business
activities. In any way, the Company
understands that the loss off such
trademarks will not have a materially
adverse effect on its operations and
financial condition.
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Type of
asset
Description of
asset
Territory
covered
Term
Events that may cause loss of
rights
Consequences from the loss of
rights
Trademarks Word mark ENEVA
No. 900567805
Brazil Registration valid until May 17,
2021
In the administrative scope, the
events that may lead to the loss of
rights regarding such trademarks
are: (i) termination of effectiveness
terms without the due and timely
payment of official renewal fees; (ii)
partial or total waiver of our rights
regarding the products and
services showing the trademark;
(iii) lapse of registration, due to
unjustified non-use of the
trademark; (iv) use of the
trademark with significant changes,
which may cause changes in its
original distinctive character as it is
informed in the certificate of
registration, for a period equal to or
above 5 years, as from the
registration date; or (v) statement
of annulment of registration
obtained by third parties after
favorable decision in the
administrative scope. In the judicial
scope, despite holding the
ownership of our own trademarks,
third parties may allege that we are
violating intellectual property rights
and get favorable court decisions.
There is no way to quantify the
impact. Loss of the rights to the
trademarks implies that it will not be
possible to prevent third parties from
using identical or similar trademarks
to indicate even competing products
or services, given that the holder no
longer holds the right to exclusive
use of the sign. The possibility also
exists of legal actions being filed
against the holder in the criminal
and civil spheres on the grounds of
undue use in case of violation of
third party’s rights, as a result of
which it may be impossible to use
the trademarks in its business
activities. In any way, the Company
understands that the loss off such
trademarks will not have a materially
adverse effect on its operations and
financial condition.
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Type of
asset
Description of
asset
Territory
covered
Term
Events that may cause loss of
rights
Consequences from the loss of
rights
Trademarks Word mark ENEVA
No. 900567902
Brazil Registration valid until June 28,
2021
In the administrative scope, the
events that may lead to the loss of
rights regarding such trademarks
are: (i) termination of effectiveness
terms without the due and timely
payment of official renewal fees; (ii)
partial or total waiver of our rights
regarding the products and
services showing the trademark;
(iii) lapse of registration, due to
unjustified non-use of the
trademark; (iv) use of the
trademark with significant changes,
which may cause changes in its
original distinctive character as it is
informed in the certificate of
registration, for a period equal to or
above 5 years, as from the
registration date; or (v) statement
of annulment of registration
obtained by third parties after
favorable decision in the
administrative scope. In the judicial
scope, despite holding the
ownership of our own trademarks,
third parties may allege that we are
violating intellectual property rights
and get favorable court decisions.
There is no way to quantify the
impact. Loss of the rights to the
trademarks implies that it will not be
possible to prevent third parties from
using identical or similar trademarks
to indicate even competing products
or services, given that the holder no
longer holds the right to exclusive
use of the sign. The possibility also
exists of legal actions being filed
against the holder in the criminal
and civil spheres on the grounds of
undue use in case of violation of
third party’s rights, as a result of
which it may be impossible to use
the trademarks in its business
activities. In any way, the Company
understands that the loss off such
trademarks will not have a materially
adverse effect on its operations and
financial condition.
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Type of
asset
Description of
asset
Territory
covered
Term
Events that may cause loss of
rights
Consequences from the loss of
rights
Trademarks Word mark ENEVA
No. 900567805
Brazil Registration valid until August 2,
2021
In the administrative scope, the
events that may lead to the loss of
rights regarding such trademarks
are: (i) termination of effectiveness
terms without the due and timely
payment of official renewal fees; (ii)
partial or total waiver of our rights
regarding the products and
services showing the trademark;
(iii) lapse of registration, due to
unjustified non-use of the
trademark; (iv) use of the
trademark with significant changes,
which may cause changes in its
original distinctive character as it is
informed in the certificate of
registration, for a period equal to or
above 5 years, as from the
registration date; or (v) statement
of annulment of registration
obtained by third parties after
favorable decision in the
administrative scope. In the judicial
scope, despite holding the
ownership of our own trademarks,
third parties may allege that we are
violating intellectual property rights
and get favorable court decisions.
There is no way to quantify the
impact. Loss of the rights to the
trademarks implies that it will not be
possible to prevent third parties from
using identical or similar trademarks
to indicate even competing products
or services, given that the holder no
longer holds the right to exclusive
use of the sign. The possibility also
exists of legal actions being filed
against the holder in the criminal
and civil spheres on the grounds of
undue use in case of violation of
third party’s rights, as a result of
which it may be impossible to use
the trademarks in its business
activities. In any way, the Company
understands that the loss off such
trademarks will not have a materially
adverse effect on its operations and
financial condition.
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Type of
asset
Description of
asset
Territory
covered
Term
Events that may cause loss of
rights
Consequences from the loss of
rights
Trademarks Mixed mark UTE
Pecém Geração de
Energia No.
901667943
Brazil Registration valid until April 3,
2022
In the administrative scope, the
events that may lead to the loss of
rights regarding such trademarks
are: (i) termination of effectiveness
terms without the due and timely
payment of official renewal fees; (ii)
partial or total waiver of our rights
regarding the products and
services showing the trademark;
(iii) lapse of registration, due to
unjustified non-use of the
trademark; (iv) use of the
trademark with significant changes,
which may cause changes in its
original distinctive character as it is
informed in the certificate of
registration, for a period equal to or
above 5 years, as from the
registration date; or (v) statement
of annulment of registration
obtained by third parties after
favorable decision in the
administrative scope. In the judicial
scope, despite holding the
ownership of our own trademarks,
third parties may allege that we are
violating intellectual property rights
and get favorable court decisions.
There is no way to quantify the
impact. Loss of the rights to the
trademarks implies that it will not be
possible to prevent third parties from
using identical or similar trademarks
to indicate even competing products
or services, given that the holder no
longer holds the right to exclusive
use of the sign. The possibility also
exists of legal actions being filed
against the holder in the criminal
and civil spheres on the grounds of
undue use in case of violation of
third party’s rights, as a result of
which it may be impossible to use
the trademarks in its business
activities. In any way, the Company
understands that the loss off such
trademarks will not have a materially
adverse effect on its operations and
financial condition.
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Type of
asset
Description of
asset
Territory
covered
Term
Events that may cause loss of
rights
Consequences from the loss of
rights
Trademarks Mixed mark
Energia Pecém No.
901779997
Brazil Registration valid until April 10,
2022
In the administrative scope, the
events that may lead to the loss of
rights regarding such trademarks
are: (i) termination of effectiveness
terms without the due and timely
payment of official renewal fees; (ii)
partial or total waiver of our rights
regarding the products and
services showing the trademark;
(iii) lapse of registration, due to
unjustified non-use of the
trademark; (iv) use of the
trademark with significant changes,
which may cause changes in its
original distinctive character as it is
informed in the certificate of
registration, for a period equal to or
above 5 years, as from the
registration date; or (v) statement
of annulment of registration
obtained by third parties after
favorable decision in the
administrative scope. In the judicial
scope, despite holding the
ownership of our own trademarks,
third parties may allege that we are
violating intellectual property rights
and get favorable court decisions.
There is no way to quantify the
impact. Loss of the rights to the
trademarks implies that it will not be
possible to prevent third parties from
using identical or similar trademarks
to indicate even competing products
or services, given that the holder no
longer holds the right to exclusive
use of the sign. The possibility also
exists of legal actions being filed
against the holder in the criminal
and civil spheres on the grounds of
undue use in case of violation of
third party’s rights, as a result of
which it may be impossible to use
the trademarks in its business
activities. In any way, the Company
understands that the loss off such
trademarks will not have a materially
adverse effect on its operations and
financial condition.
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Type of
asset
Description of
asset
Territory
covered
Term
Events that may cause loss of
rights
Consequences from the loss of
rights
Trademarks Mixed mark
Energia Pecém No.
907878022
Brazil Registration valid until June 26,
2022
In the administrative scope, the
events that may lead to the loss of
rights regarding such trademarks
are: (i) termination of effectiveness
terms without the due and timely
payment of official renewal fees; (ii)
partial or total waiver of our rights
regarding the products and
services showing the trademark;
(iii) lapse of registration, due to
unjustified non-use of the
trademark; (iv) use of the
trademark with significant changes,
which may cause changes in its
original distinctive character as it is
informed in the certificate of
registration, for a period equal to or
above 5 years, as from the
registration date; or (v) statement
of annulment of registration
obtained by third parties after
favorable decision in the
administrative scope. In the judicial
scope, despite holding the
ownership of our own trademarks,
third parties may allege that we are
violating intellectual property rights
and get favorable court decisions.
There is no way to quantify the
impact. Loss of the rights to the
trademarks implies that it will not be
possible to prevent third parties from
using identical or similar trademarks
to indicate even competing products
or services, given that the holder no
longer holds the right to exclusive
use of the sign. The possibility also
exists of legal actions being filed
against the holder in the criminal
and civil spheres on the grounds of
undue use in case of violation of
third party’s rights, as a result of
which it may be impossible to use
the trademarks in its business
activities. In any way, the Company
understands that the loss off such
trademarks will not have a materially
adverse effect on its operations and
financial condition.
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9.1 - Relevant non-current assets / 9.1.c - Equity interests
9.1 – Relevant non-current assets / 9.1.c – Equity interests
Corporate name CNPJ CVM Code Type of Company Country of
incorporation
State of the
head office
City of the head office Description of the
activities conducted
Issuer interest (%)
Fiscal year Book value–% change Market price–%
change
Amount of dividends
received (in Real)
Date Amount (in Real)
Porto de Pecém
Geração de Energia
S.A.
08.976.495/0001-09 - Controlled Company Brazil CE São Gonçalo do Amarante Conduction of studies,
projects, construction,
installation,
implementation,
commercial operation,
maintenance and
exploitation of a thermal
power plant named
Energia Pecém, as well as
selling the output
therefrom, and
performance of any acts
inherent to trade business
in general related to such
activities.
50,000000
Market price
31/12/2012 66,38 0,000000 0,00 Book value 03/31/13 605.471.098,07
31/12/2011 37,150000 0,000000 0,00
31/12/2010 23,120000 0,000000 0,00
Reasons for acquisition and maintenance of such interest
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Corporate name CNPJ CVM Code Type of Company Country of
incorporation
State of the
head office
City of the head office Description of the
activities conducted
Issuer interest (%)
Fiscal year Book value–% change Market price–%
change
Amount of dividends
received (in Real)
Date Amount (in Real)
Investment in thermal power generation.
MPX Pecém II
Geração de Energia
S.A.
10.471.487/0001-44 - Controlled Company Brazil CE Fortaleza Conduction of studies,
projects, construction,
installation,
implementation,
commercial operation,
maintenance and
exploitation of Pecém II, as
well as selling the output
therefrom, and
performance of any acts
inherent to trade business
in general related to such
activities, as well as
installation and exploitation
of electric power projects,
throughout the national
territory, including
generation and sale of
energy and electric
capacity, either within
CCEE or within other
jurisdiction regulated by
law, electric power
transmission, assistance in
projects of energy
generation, transmission,
sale and distribution,
purchase and sale, import
and export of equipment
and machinery related to
electric power generation,
export of goods,
equipment and products in
99,700000
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Corporate name CNPJ CVM Code Type of Company Country of
incorporation
State of the
head office
City of the head office Description of the
activities conducted
Issuer interest (%)
Fiscal year Book value–% change Market price–%
change
Amount of dividends
received (in Real)
Date Amount (in Real)
general.
Market price
31/12/2012 19,39 0,000000 0,00 Book value 03/31/13 440.283.670,54
31/12/2011 99,250000 0,000000 0,00
31/12/2010 198,230000 0,000000 0,00
Reasons for acquisition and maintenance of such interest
Investment in thermal power generation.
UTE Porto do Itaqui
Geração de Energia
S.A.
08.219.477/0001-74 - Controlled Company Brazil MA São Luís (i) Conduction of studies,
projects, construction,
installation,
implementation,
commercial operation,
maintenance and
exploitation of a thermal
power plant named UTE
Porto do Itaqui, located in
the State of Maranhão, as
well as selling the output
therefrom, and
performance of any acts
related to trade business in
general related to such
activities; (ii) elaboration,
development and
management of
infrastructure projects; (iii)
port operation for bulk
loading/unloading, their
transportation through
conveyor belt(s) in São
Luis Industrial District,
100,000000
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Corporate name CNPJ CVM Code Type of Company Country of
incorporation
State of the
head office
City of the head office Description of the
activities conducted
Issuer interest (%)
Fiscal year Book value–% change Market price–%
change
Amount of dividends
received (in Real)
Date Amount (in Real)
including, without
limitation, acquisition,
construction, installation,
operation and
maintenance of a bulk
unloading system
consisting of unloaders
and conveyor belt(s).
Market price 448,309,741.57
31/12/2012 25,11 0,000000 0,00 Book value 03/31/13 536.077.416
31/12/2011 17,220000 0,000000 0,00
31/12/2010 38,910000 0,000000 0,00
Reasons for acquisition and maintenance of such interest
Investment in thermal power generation.
Amapari Energia S.A. 08.815.601/0001-64 - Controlled Company Brazil DF Brasília Implementation and
exploitation of UTE Serra
do Navio and PCH
Capivara, and other
electric energy projects in
the State of Amapá,
including generation,
transmission and sale of
energy and electrical
capacity, intermediation in
purchase and sale of
energy and electrical
capacity.
51,000000
Market price
31/12/2012 5,09 0,000000 0,00 Book value 03/31/13 52,329,332.01
31/12/2011 20,69 0,000000 0,00
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Corporate name CNPJ CVM Code Type of Company Country of
incorporation
State of the
head office
City of the head office Description of the
activities conducted
Issuer interest (%)
Fiscal year Book value–% change Market price–%
change
Amount of dividends
received (in Real)
Date Amount (in Real)
31/12/2010 -34,570000 0,000000 0,00
Reasons for acquisition and maintenance of such interest
Investment in thermal power generation.
UTE Porto do Açu
Energia S.A.
09.130.974/0001-64 - Controlled Company Brazil RJ São João da Barra Generation, transmission
and sale of energy and
electrical capacity,
intermediation in purchase
and sale of energy and
electrical capacity.
50,000000
Market price
31/12/2012 -24,92 0,000000 0,00 Book value 03/31/13 21,365,208.47
31/12/2011 -7,640000 0,000000 0,00
31/12/2010 -41,480000 0,000000 0,00
Reasons for acquisition and maintenance of such interest
Investment in thermal power generation.
Seival Sul Mineração
Ltda.
04.527.315/0001-42 - Controlled Company Brazil RJ Rio de Janeiro Industry and trade of
minerals in general,
including research, mining
and processing of minerals
reserves, provision of
geological services,
import, export, trade of
mineral, industrial and
chemicals products.
70,000000
Market price
31/12/2012 7,12 0,000000 0,00 Book value 03/31/13 3.473.818,16
31/12/2011 24,480000 0,000000 0,00
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Corporate name CNPJ CVM Code Type of Company Country of
incorporation
State of the
head office
City of the head office Description of the
activities conducted
Issuer interest (%)
Fiscal year Book value–% change Market price–%
change
Amount of dividends
received (in Real)
Date Amount (in Real)
31/12/2010 -11,170000 0,000000 0,00
Reasons for acquisition and maintenance of such interest
Investment in the industry and trade of minerals
UTE MPX Sul Energia
Ltda.
09.130.156/0001-61 - Controlled Company Brazil RS Candiota Implementation and
exploitation of electric
power plants in any part of
the national territory,
including generation and
sale of exceeding energy
and generation availability,
purchase and sale of
energy and generation
availability, either within
CCEE or other jurisdiction
regulated by law, i.e.,
directly to free consumers
or other energy traders,
including energy sale and
distribution, purchase and
sale, import and export of
goods in general and
inputs, equipment and
products.
50,000000
Market price
31/12/2012 -29,81 0,000000 0,00 Book value 03/31/13 6,499,954.56
31/12/2011 -14,000000 0,000000 0,00
31/12/2010 514,450000 0,000000 0,00
Reasons for acquisition and maintenance of such interest
Investment in thermal power generation.
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Corporate name CNPJ CVM Code Type of Company Country of
incorporation
State of the
head office
City of the head office Description of the
activities conducted
Issuer interest (%)
Fiscal year Book value–% change Market price–%
change
Amount of dividends
received (in Real)
Date Amount (in Real)
Termopantanal
Participações Ltda.
05.929.091/0001-68 - Controlled Company Brazil MS Corumbá Generation, sale, import
and export of energy and
electric capacity;
intermediation in purchase
and sale of energy and
electrical capacity, either
within CCEE or other
jurisdiction regulated by
law; energy transmission;
advice on projects of
generation, transmission,
sale and distribution of
energy; purchase and
sale, import and export of
machinery and equipment
related to electric power
generation; purchase and
sale, import and export,
industrialization and
processing of natural gas,
oil and its byproducts.
66,670000
Market price
31/12/2012 0,00 0,000000 0,00 Book value 03/31/13 0,00
31/12/2011 0,000000 0,000000 0,00
31/12/2010 0,000000 0,000000 0,00
Reasons for acquisition and maintenance of such interest
Investment in thermal power generation.
UTE Parnaíba
Geração de Energia
S.A.
11.744.699/0001-10 - Affiliated company Brazil MA São Luís Sale of natural gas, and
development, construction
and operation of thermal
power plants using natural
70,000000
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Corporate name CNPJ CVM Code Type of Company Country of
incorporation
State of the
head office
City of the head office Description of the
activities conducted
Issuer interest (%)
Fiscal year Book value–% change Market price–%
change
Amount of dividends
received (in Real)
Date Amount (in Real)
gas.
Market price
31/12/2012 115,52 0,000000 0,00 Book value 03/31/13 217.667.194,22
31/12/2011 1.857,130000 0,000000 0,00
31/12/2010 100,000000 0,000000 0,00
Reasons for acquisition and maintenance of such interest
Investment in thermal power generation.
Porto do Pecém
Transportadora de
Minérios S.A.
10.661.303/0001-09 - Controlled Company Brazil CE Fortaleza Transportation of minerals
through conveyor belt(s) in
São Luis Industrial District,
including, without
limitation, acquisition,
construction, installation,
operation and
maintenance of a bulk
unloading system
consisting of unloaders
and conveyor belt(s).
50,000000
Market price
31/12/2012 -35,73 0,000000 0,00 Book value 03/31/13 243.104,14
31/12/2011 52500.00 0,000000 0,00
31/12/2010 0,000000 0,000000 0,00
Reasons for acquisition and maintenance of such interest
Investment in minerals transportation
OGMP Transporte
Aéreo Ltda.
13.528.307/0001-01 - Controlled Company Brazil RJ Rio de Janeiro Exploitation of eventual air
transportation of
passengers, cargo and
mail as air taxi, including
50,000000
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Corporate name CNPJ CVM Code Type of Company Country of
incorporation
State of the
head office
City of the head office Description of the
activities conducted
Issuer interest (%)
Fiscal year Book value–% change Market price–%
change
Amount of dividends
received (in Real)
Date Amount (in Real)
off-shore operations
Market price
31/12/2012 -9,84 0,000000 0,00 Book value 03/31/13 6.343.536,61
31/12/2011 0,000000 0,000000 0,00
31/12/2010 0,000000 0,000000 0,00
Reasons for acquisition and maintenance of such interest
Investment in exploitation exploit of air transportation.
Pecém Operação e
Manutenção de
Unidades de Geração
Elétrica S.A.
13.746.853/0001-19 - Controlled Company Brazil CE São Gonçalo do Amarante Provision of operation and
maintenance services for
electric power plants.
50,000000
Market price
31/12/2012 26,38 0,000000 0,00 Book value 03/31/13 318.316,85
31/12/2011 0,000000 0,000000 0,00
31/12/2010 0,000000 0,000000 0,00
Reasons for acquisition and maintenance of such interest
Investment in operation and maintenance of electric power plants.
Seival Participações
S.A.
05.790.957/0001-00 - Controlled Company Brazil SC Florianópolis Investment in other
companies.
50,000000
Market price
31/12/2012 -49,71 0,000000 0,00 Book value 03/31/13 19.327.016,34
31/12/2011 0,000000 0,000000 0,00
31/12/2010 0,000000 0,000000 0,00
Reasons for acquisition and maintenance of such interest
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Corporate name CNPJ CVM Code Type of Company Country of
incorporation
State of the
head office
City of the head office Description of the
activities conducted
Issuer interest (%)
Fiscal year Book value–% change Market price–%
change
Amount of dividends
received (in Real)
Date Amount (in Real)
Investment in other companies.
UTE Parnaíba II
Geração de Energia
S.A.
14.578.002/0001-77 - Controlled Company Brazil MA São Luís Construction and operation
of thermal power plants
using natural gas.
99,990000
Market price
31/12/2012 8525300,000000 0,000000 0,00 Book value 03/31/13 83.618.135,14
31/12/2011 100,000000 0,000000 0,00
31/12/2010 0,000000 0,000000 0,00
Reasons for acquisition and maintenance of such interest
Investment in thermal power generation.
MPX E.ON
Participações S.A.
15.379.168/0001-27 - Controlled Company Brazil RJ Rio de Janeiro Investment in other
companies.
50,000000
Market price
31/12/2012 0,00 0,000000 0,00 Book value 03/31/13 59.324.293,43
31/12/2011 0,000000 0,000000 0,00
31/12/2010 0,000000 0,000000 0,00
Reasons for acquisition and maintenance of such interest
Investment in other companies.
UTE Porto do Açú II
Geração de Energia
S.A.
15.285.704/0001-25 - Controlled Company Brazil RJ Rio de Janeiro Generation, transmission
and sale of energy and
electrical capacity,
intermediation in purchase
and sale of energy and
50,000000
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Corporate name CNPJ CVM Code Type of Company Country of
incorporation
State of the
head office
City of the head office Description of the
activities conducted
Issuer interest (%)
Fiscal year Book value–% change Market price–%
change
Amount of dividends
received (in Real)
Date Amount (in Real)
electrical capacity.
Market price
31/12/2012 0,000000 0,000000 0,00 Book value 03/31/13 2.132.462,80
31/12/2011 0,000000 0,000000 0,00
31/12/2010 0,000000 0,000000 0,00
Reasons for acquisition and maintenance of such interest
Investment in thermal power generation.
Parnaíba
Participações S.A.
15.439.528/0001-39 - Controlled Company Brazil RJ Rio de Janeiro Investment in other
companies.
50,000000
Market price
31/12/2012 0,00 0,000000 0,00 Book value 03/31/13 18.017.226,71
31/12/2011 0,000000 0,000000 0,00
31/12/2010 0,000000 0,000000 0,00
Reasons for acquisition and maintenance of such interest
Investment in other companies.
UTE Parnaíba V
Geração de Energia
S.A.
16.523.901/0001-06 - Controlled Company Brazil RJ Rio de Janeiro Generation, transmission
and sale of energy and
electrical capacity,
intermediation in purchase
and sale of energy and
electrical capacity.
100,000000
Market price
31/12/2012 0,00 0,000000 0,00 Book value 03/31/13 1.000,00
31/12/2011 0,000000 0,000000 0,00
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Corporate name CNPJ CVM Code Type of Company Country of
incorporation
State of the
head office
City of the head office Description of the
activities conducted
Issuer interest (%)
Fiscal year Book value–% change Market price–%
change
Amount of dividends
received (in Real)
Date Amount (in Real)
31/12/2010 0,000000 0,000000 0,00
Reasons for acquisition and maintenance of such interest
Investment in thermal power generation.
Parnaíba Geração e
Comércio de Energia
S.A.
15.743.303/0001-71 - Controlled Company Brazil RJ Rio de Janeiro Generation, transmission
and sale of energy and
electrical capacity,
intermediation in purchase
and sale of energy and
electrical capacity.
100,000000
Market price
31/12/2012 0,00 0,000000 0,00 Book value 03/31/13 0,00
31/12/2011 0,000000 0,000000 0,00
31/12/2010 0,000000 0,000000 0,00
Reasons for acquisition and maintenance of such interest
Investment in thermal power generation.
MPX Investimentos
S.A.
16.570.411/0001-52 - Controlled Company Brazil RJ Rio de Janeiro Investment in other
companies.
99,9900000
Market price
31/12/2012 0,00 0,000000 0,00 Book value 03/31/13 -144,45
31/12/2011 0,000000 0,000000 0,00
31/12/2010 0,000000 0,000000 0,00
Reasons for acquisition and maintenance of such interest
Investment in other companies.
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Corporate name CNPJ CVM Code Type of Company Country of
jurisdiction
State of the head
office
City of the head office Description of the
activities conducted
Issuer participation
(%)
Fiscal year Book value–% change Market price–%
change
Amount of dividends
received (in Real)
Date Amount (in Real)
OGX Maranhão
Petróleo e Gás S.A.
11.230.122/0001-90
- Affiliated company Brazil RJ Rio de Janeiro Research, mining, refining,
processing, trade and
transport of oil from wells,
shale gas and other rocks,
its byproducts, natural gas
and other fluid
hydrocarbons, maritime
support and port support to
assist exploitation and
production of oil and gas
offshore, as well as any
other related or similar
activities
33,330000
Market price
Dec/31/2012 41,500000 0.000000 0.00 Book value Mar/31/2013 26,043,112.78
Dec/31/2011 107,570000 0.000000 0.00
Dec/31/2010 0,.000000 0.000000 0.00
Reasons for acquisition and maintenance of such interest
Investment in energy sales
Corporate name CNPJ CVM Code Type of Company Country of
jurisdiction
State of the head
office
City of the head office Description of the
activities conducted
Issuer participation
(%)
Fiscal year Book value–% change Market price–%
change
Amount of dividends
received (in Real)
Date Amount (in Real)
MPX Tauá II Energia
Solar Ltda.
17.157.518/0001-36
- Controlled Company Brazil CE Fortaleza Implementation and
exploitation of electric
power plants through
solar energy utilization,
100,000000
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Corporate name CNPJ CVM Code Type of Company Country of
jurisdiction
State of the head
office
City of the head office Description of the
activities conducted
Issuer participation
(%)
Fiscal year Book value–% change Market price–%
change
Amount of dividends
received (in Real)
Date Amount (in Real)
including generation and
sale of electricity and
exceeding generation
availability.
Market price
Dec/31/2012 0,000000 0.000000 0,00 Book value Mar/31/2013 1,000.00
Dec/31/2011 0,000000 0.000000 0,00
Dec/31/2010 0,000000 0,000000 0,00
Reasons for acquisition and maintenance of such interest
Investment in energy trade
176
9.2 - Other relevant information
The Company informs that all equity interest held by it are relevant and are, therefore, described in item 9.1 of this Reference Form.
177
10.1 General financial and equity conditions
The information given below has been reviewed by the Company
Management, and their comments are attached.
The figures shown in this section 10 have been extracted from the Company
consolidated financial statements for the years ended December 31, 2012,
2011 and 2010 and the quarterly financial statements – QFS for the quarter
ended March 31, 2013.
(a) Management’s comments on the general financial and equity
conditions
The Company Management has the following comments to make on the
general financial and equity conditions of the Company:
In the year 2010, our Company recorded consolidated gross revenue of
R$112.9 million, R$43.6 of which from the operation of Serra do Navio
thermoelectric plant and R$69.3 from the energy trader. Our Company
recorded loss of R$256.3 million for the year. Consolidated cash and cash
equivalents, securities and restricted deposits at the end of 2010 reached
R$854.2 million, and loans and financing totaled R$2,590 million, giving a net
debt position of R$1,735 million.
In the year 2011, our Company recorded consolidated gross revenue of
R$190.4 million, R$42.3 of which from the operation of Serra do Navio
thermoelectric plant and R$148.1 from the energy trader. Our Company
recorded loss of R$408.5 million for this year; however, it recorded
consolidated cash (cash and cash equivalents and securities) at the end of
2011 of R$1,451.8 million, which primarily comprised the issuance, in June
this year, of convertible debentures of R$1,377 billion. Loans and financing
totaled R$4,341 million, giving a net debt position of R$2,889 million.
In the year 2012, our Company recorded consolidated gross revenue of
R$541.6 million, which totally derived from the operation of Amapari
Comercializadora de Energia and Itaqui. Our Company recorded loss of
R$434.5 million for this year; however, it recorded consolidated cash and cash
equivalents as of December 31, 2012, of R$590.5 million, while securities
amounted to R$3.4 million. On December 31, 2012, loans, financing and
debentures totaled R$6,072.4 million, giving a net debt position of R$5,478.5
million.
For the quarter ended March 31, 2013, our Company recorded consolidated
178
gross revenue of R$217.6 million, which totally derived from the operation of
Amapari, Parnaíba I and Itaqui. Our Company recorded loss of R$257.1
million for this year; however, it recorded consolidated cash and cash
equivalents of R$359.1 million, and securities of R$5.6 million as of March 31,
2013. On the same date, loans, financing and debentures totaled R$5,465.0
million, giving a net debt position of R$5,100.3 million. It should be noted that
due to the adoption of new accounting practices (IFRS 11), the Company has
ceased to record proportionally the revenue from some investees, among
which is Comercializadora de Energia.
The Company’s overall liquidity ratio, measured as the sum of current and
non-current assets over the sum of current and non-current liabilities, was
1.55 as of December 31, 2010, 1.21 as of December 31, 2011, 1.40 as of
December 31, 2012 and 1.40 as of March 31, 2013.
Management believes that the Company’s financial and equity conditions are
adequate for implementing its business plan and fulfilling its current short,
medium and long-term obligations.
(b) Management’s comments on the capital structure and the
possibility of redemption of shares or quotas
The make-up of our Company’s capital structure is shown below, for the
periods indicated. In the opinion of Management, the current capital structure
indicates a satisfactory relationship between own capital and third party
capital.
As of March 31, 2013, our Company’s capital structure was made up of 28.7% of own
capital and 71.3% of third party capital. ENEVA consolidated shareholders’ equity at this
date amounted to R$2.452 billion, while gross debt plus liabilities to third parties totaled
R$6.078 billion.
As of December 31, 2012, our Company’s capital structure consisted of 28.6% of own
capital and 71.4% of third party capital. ENEVA consolidated shareholders’ equity
amounted to R$2.705 billion as of the same date, while gross debt plus liabilities to third
parties totaled R$6.747 billion.
As of December 31, 2011, our Company’s capital structure consisted of 16% of own capital
and 84% of third party capital. ENEVA consolidated shareholders’ equity amounted to
R$1.37 billion as of the same date, while gross debt plus liabilities to third parties totaled
R$6,583.6 billion.
179
As of December 31, 2010, our Company’s capital structure consisted of 27% of own capital
and 73% of third party capital. ENEVA consolidated shareholders’ equity amounted to
R$1.701 billion as of the same date, while gross debt plus liabilities to third parties totaled
R$3,120.4 billion.
i. circumstances in which shares or quotas could be redeemed
Management also notes that our Company has not issued any redeemable
shares.
ii. formula for calculating redemption value of shares or quotas
Management also notes that there is no formula for calculation redemption
value, since the Company has not issued any redeemable shares.
(c) Management comments on the Company’s ability to meet
financial commitments assumed
Management believes that our Company is fully able to meet all its financial
commitments, since its major undertakings have been structured as Project
Finance, with approximately 25% of total investments being met from its own
resources, which are disbursed pari passu with external financing. These
undertakings are also linked to Regulated Environment Electricity Sales
Contracts (CCEAR), which allow generation of fixed revenues for 15 and 20
years (provided the parties comply with their respective contractual
obligations).
Our operation is performed through an interest, as a shareholder, in the
capital stock of companies that develop such projects. Some of these projects
are developed in partnership with other agents of the energy sector. Funds for
the projects have been raised basically from the Company’s IPO, held on
December 14, 2007, and January 11, 2008, (over-allotment shares), in the
total amount of R$2 billion as well as from financing and more recently from
the issuance of 21,735,744 debentures convertible into shares, held on June
15, 2011, in the amount of R$1.4 billion. On May 24, 2012, 21,653,300
debentures were converted into 33,255,219 new shares, by virtue of the
corporate restructuring process implemented by the Company in the year
2012.
The holding company raised short-term funds of approximately R$800 million
in 2012, in order to finance part of the investments made in projects during the
year. We are arranging to settle a portion of this short-term finance during
2013, and to replace the rest with long-term debt, so as to provide the
capitalization needed for the company to invest in potential new projects.
180
(d) Sources of financing for working capital and investments in
non-current assets
Our reply below under item “f” gives details of sources for financing
investments in non-current assets.
Management believes that the sources of finance used are adequate for our
Company’s debt profile, since projects have been structured on the basis of
Project Finance supplied by development banks at subsidized rates of interest
and on extended repayment terms of up to 14 years.
(e) Sources of financing for working capital and investments in
non-current assets which are intended to be used to cover liquidity
shortfalls
As stated above, we are arranging to settle part of this short-term finance
during 2013, and to replace the rest with long-term debt, so as to provide the
capitalization needed for the company to invest in potential new projects.
(f) Levels of indebtedness and characteristics of the debt
(i) Relevant loan and financing agreements
The following table shows our Company’s consolidated indebtedness with
financial institutions as of March 31, 2013, and December 31, 2012, 2011 and
2010, with the corresponding interest rates and maturity dates. The amounts
are stated in thousands of Reais.
181
Debtor Creditor Currency Interest
rate Maturity
Balance as
of
Mar/31/2013
Balance as of
Dec/31/2012
Balance on
Dec/31/2011
Balance on
Dec/31/2010
Itaqui BNDES (Direct) (a) R$
TJLP + 2.78% Jun/15/2026 874,040 890,703 861,165 568,339
Itaqui BNB (b) R$ 10% Dec/15/2026 200,297 200,365 200,699 184,574
Itaqui BNDES (Indirect) (c) R$
IPCA +
TR
BNDES + 4.8% Jun/15/2026 148,518 141,202 113,707 54,455
Itaqui
BNDES
(Indirect) (d) R$
TJLP +
4.80% Jun/15/2026 170,499 173,685 171,026 141,839
Pecém II BNDES (Direct) (e) R$
TJLP + 2.18% Jun/15/2027 711,645 690,175 574,430 437,044
Pecém II
BNDES
(Direct) (f) R$
IPCA +
TR BNDES
+
2.18% Jun/15/2027 155,652 148,772 127,975 90,048
ENEVA
S/A Itaú BBA (g) R$
CDI +
2.85% Jun/17/2013 108,606 106,158 106,285 251.077
Pecém II BNB (h) R$ 10% Jan/01/2028 250,027 235,053 234,819 -
Parnaíba Bradesco (i) R$
CDI +
3.00% Jun/26/2013 66,380 64,063 75,127 -
Parnaíba Itaú (j) R$ CDI + 3.00% Jun/26/2013 70,073 68,029 125,212 -
Parnaíba Santander (k) R$
CDI +
3.00% Jun/26/2013 - - - -
Parnaíba BNDES (Direct) (l) R$
TJLP + 2.80% Mar/15/2013 - - 242,957 -
Parnaíba
BNDES
(Direct) (m) R$
IPCA +
TR
BNDES +
2.80% Mar/15/2013 - - 157,500 -
Parnaíba BNDES (Direct) (n) R$
TJLP + 1.88% Jun/15/2027 503,040 493,070 - -
Parnaíba
BNDES
(Direct) (o) R$
IPCA +
TR
BNDES
+
1.88% Jul/15/2026 207,957 203,190 - -
Parnaíba II Itaú BBA (p) R$ CDI + 3.00% Sep/30/2013 110,708 108,189 - -
Parnaíba II HSBC (q) R$
CDI +
3.00% Sep/30/2013 138,386 135,236 - -
Parnaíba II CEF (r) R$ CDI + 3.00% Nov/07/2013 354,603 346,523 - -
ENEVA S/A
Promissory
Notes – 1st Issue (s) R$
CDI + 1.50% Jul/15/2013 317,678 311,595
ENEVA
S/A Citibank (t) R$
CDI +
1.15% Sep/27/2013 105,246 103,292 - -
ENEVA S/A Citibank (u) USD
CDI + 1.26% Sep/27/2017 100,708 102,193 - -
ENEVA
S/A
Promissory
Notes – 2nd
Issue (v) R$
Libor +
1.50% Dec/9/2013 306,915 301,005 - -
ENEVA
S/A
BTG
Pactual (w) R$
CDI +
1.50% Dec/13/2013 104,295 102,284 - -
ENEVA
S/A
BTG
Pactual (x) R$
CDI +
2.95% Aug/6/2013 354,451 - - -
ENEVA
S/A HSBC (y) R$
CDI +
1.75% Mar/25/2013 100,101 - - -
Pecém
BNDES
(Direct) (z) R$
TJLP +
2.77% Jun/15/2026 - 796,516
732,128 575,892
Pecém BID (aa) USD
Libor +
3.5% May/15/2026 - 138,518
129,308 109,976
Pecém BID (bb) USD Libor + 3.0% May/15/2022 -
168,498 159,606 136,168
Chile
Credit
Suisse (cc) USD 8.13% Apr/15/2015 - 23,423
28,673 -
182
Chile
Credit
Suisse (dd) USD 8.00% Apr/15/2015 - 15,612
19,116 -
5,459,825 6,067,349 4,059,733 2,549,412
The table below sets forth the composition of loans of the joint subsidiary
Porto do Pecém Geração de Energia S.A. and the indirect subsidiary MPX
Chile Holding Ltda., which, as from 2013, by applying the new consolidation
rules introduced by IFRS 10, have been proportionally consolidated as of
January 1, 2013, (amounts in thousands of Reais):
Contracting
Party Debtor Currency
Interest
rate Maturity
Balance on
Mar/31/2013
Pecém
BNDES
(Direct) (aa) R$
TJLP +
2.77%
Jun 15,
2026 782,053
Pecém BID (bb) USD
Libor +
3.5%
May 15,
2026 137,995
Pecém BID (cc) USD
Libor +
3.0%
May 15,
2022 167,695
Chile
Credit
Suisse (dd) USD 8.13%
Apr. 15,
2015 15,713
Chile
Credit
Suisse (ee) USD 8.00%
Apr. 15,
2015 10,476
1,113,932
Below is a summary of our Company’s principal debt agreements:
(a) The Brazilian Development Bank (Banco Nacional de Desenvolvimento
Econômico e Social or “BNDES”) released the full amount of the R$784
million long-term financing for Porto do Itaqui Geração de Energia S.A.
thermoelectric plant, in respect of sub-loans A, B and C, at an agreed annual
cost of TJLP + 2.78%. The financing period is 17 years, with amortization over
14 years and no repayments of principal until July 2012. Sub-loan D, on the
other hand, which is for R$13.6 million and intended for social investments
(BNDES Social), pays interest only at the TJLP rate. The sum of R$11.7
million has been disbursed so far, R$1.7 million of which was released in the
fourth quarter of 2012. The BNDES Social line of credit is for a total period of
9 years, with amortization over 6 years and no repayments of principal until
July 2012. Interest on these loans is being capitalized during the construction
period. This financing has the following guarantees, which are shared with the
other banks financing the project: (i) Corporate surety of the parent company
ENEVA S/A. (ii) Pledge of shares, (iii) Fiduciary Assignment of Rights and
Credits, (iv) Fiduciary Assignment of Rights Emerging from ANEEL’s
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Authorization, (v) Conditional Assignment of Rights and Agreements, (vi)
Fiduciary Sale of Machinery and Equipment, (vii) Mortgage and (viii) Liquidity
Fund in Reserve Account.
(b) To supplement the BNDES financing, Porto do Itaqui Geração de Energia
S.A. thermoelectric plant has raised a loan from BNB-FNE, for a total of
R$203 million. The final disbursement was made on July 28, 2011, and the
loan is now drawn in full. The BNB loan is for a total period of 17 years, with
amortization over 14 years and no repayments of principal until July 2012.
The annual cost is 10%. There is a 15% compliance bonus, thus reducing the
cost to 8.5% p.a. This financing has the following guarantees, which are
shared with the other banks financing the project: (i) Corporate surety of the
parent company ENEVA S/A. (ii) Pledge of shares, (iii) Fiduciary Assignment
of Rights and Credits, (iv) Fiduciary Assignment of Rights Emerging from
ANEEL’s Authorization, (v) Conditional Assignment of Rights and Agreements,
(vi) Fiduciary Sale of Machinery and Equipment, (vii) Mortgage and (viii)
Liquidity Fund in Reserve Account.
(c) R$100 million of the indirect BNDES line of credit, for which Banco
Bradesco and Banco Votorantim are the agents, has been disbursed to the
Porto do Itaqui Geração de Energia S.A. thermoelectric plant, in respect of
sub-loans A, B, C, D and E. This portion of the loan is for a total period of 17
years, with amortization over 14 years and no payments of capital or interest
until July 2012. The agreed annual cost is IPCA + BNDES Reference Rate +
4.8% during the construction phase, and IPCA + BNDES Reference Rate +
5.3% when the plant is in operation. Interest on these loans is being
capitalized during the construction phase. This financing has the following
guarantees, which are shared with the other banks financing the project: (i)
Corporate surety of the parent company ENEVA S/A. (ii) Pledge of shares,
(iii) Fiduciary Assignment of Rights and Credits, (iv) Fiduciary Assignment of
Rights Emerging from ANEEL’s Authorization, (v) Conditional Assignment of
Rights and Agreements, (vi) Fiduciary Sale of Machinery and Equipment, (vii)
Mortgage and (viii) Liquidity Fund in Reserve Account.
(d) The full amount of sub-loan F, part of the loan described in (c) above,
amounting to R$141.8 million, has been disbursed to the Porto do Itaqui
Geração de Energia S.A. thermoelectric plant. This part of the loan is for a
total period of 17 years, with amortization over 14 years and no payments of
capital or interest until July 2012. The agreed annual cost is TJLP + 4.8%
during the construction phase and TJLP + 5.3% when the plant is in
operation. Interest on these loans is to be capitalized during the construction
phase. This financing has the following guarantees, which are shared with the
other banks financing the project: (i) Corporate surety of the parent company
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ENEVA S/A. (ii) Pledge of shares, (iii) Fiduciary Assignment of Rights and
Credits, (iv) Fiduciary Assignment of Rights Emerging from ANEEL’s
Authorization, (v) Conditional Assignment of Rights and Agreements, (vi)
Fiduciary Sale of Machinery and Equipment, (vii) Mortgage and (viii) Liquidity
Fund in Reserve Account.
(e) By the end of March 2013, Pecém II had drawn down R$607.9 million of
the R$627.3 million provided under sub-loans A, B, C, D and L of the long-
term financing provided by BNDES (in nominal R$, excluding interest during
the construction phase). The sub-loans A, B, C and D are for a total period of
17 years, with amortization over 14 years and no payments of capital or
interest until July 2013. The agreed annual cost is TJLP + 2.18%. sub-loan L
is for a total period of 9 years, with amortization over 6 years and grace period
for payments of capital or interest until July 2013. The agreed annual cost is
TJLP. To guarantee the financing granted, bank guarantees were issued in the
total amount of R$493.9 million, of which R$254.3 million were issued by
Banco Itaú BBA S.A., R$65.4 million were issued by Banco Santander S/A,
R$65.4 million were issued by Banco Votorantim S/A, R$65.4 million were
issued by Banco Bradesco S/A and R$43.6 million were issued by Citibank
S/A. Additionally, this financing has the following guarantees, which are
shared with the other banks financing the project: (i) Pledge of shares, (ii)
Fiduciary Assignment of Rights and Credits, (iii) Fiduciary Assignment of
Rights Emerging from ANEEL’s Authorization, (iv) Conditional Assignment of
Rights and Agreements, (v) Fiduciary Sale of Machinery and Equipment, (vi)
Mortgage, (vii) Liquidity Fund in Reserve Account, and (ix) Corporate surety of
ENEVA S.A.
(f) Pecém II has drawn down R$110.1 million, being the full amount of
sub-loans E, F, G, H and I under the long-term BNDES financing
agreement mentioned in (i) above. These sub-loans are for a total
period of 17 years, with amortization over 14 years and no payments
of capital or interest until July 2014. The agreed annual cost is IPCA
+ BNDES Reference Rate + 2.18%. Sub-loan J for R$22 million,
which was part of this line of credit, was transferred to sub-loan A of
the preceding item in April 2012. To guarantee the financing granted,
bank guarantees were issued by Banco Itaú BBA in the total amount
of R$88.1 million. Additionally, this financing has the following
guarantees, which are shared with the other banks financing the
project: (i) Pledge of shares, (ii) Fiduciary Assignment of Rights and
Credits, (iii) Fiduciary Assignment of Rights Emerging from ANEEL’s
Authorization, (iv) Conditional Assignment of Rights and Agreements,
(v) Fiduciary Sale of Machinery and Equipment, (vi) Mortgage, (vii)
Liquidity Fund in Reserve Account, and (viii) Corporate surety of
ENEVA S.A.
185
(g) On December 17, 2012, the parent company MPX Energia S.A.
renegotiated the Bank Credit Note (CCB), amounting to R$105.8 million, with
Banco Itaú BBA S.A., on December 21, 2010, with maturity date estimated for
December 17, 2012, paying interest due to date in full. The new maturity date
is June 17, 2013, with the interest rate remaining at 100% of the CDI rate plus
2.85% p.a.
(h) To supplement the BNDES financing, MPX Pecém II Geração de
Energia S.A. has raised a loan from BNB with FNE funds, for a total
of R$250 million, of which R$235 million has been drawn so far. The
BNB loan is for a total period of 17 years, with quarterly interest and
amortization over 14 years. No repayments of principal are due until
February 2014, and the annual cost is 10%. The conditions of the
financing include a 15% compliance bonus, thus reducing the cost to
8.5% p.a. This financing has the following guarantees, which are
shared with the other banks financing the project: (i) Pledge of
shares, (ii) Fiduciary Assignment of Rights and Credits, (iii) Fiduciary
Assignment of Rights Emerging from ANEEL’s Authorization, (iv)
Conditional Assignment of Rights and Agreements, (v) Fiduciary Sale
of Machinery and Equipment, (vi) Mortgage and (vii) Liquidity Fund in
Reserve Account, and (viii) Corporate surety of ENEVA S.A.
(i) On December 26, 2011, the Parnaíba Geração de Energia S.A.
thermoelectric plant raised R$75 million by means of a Bank Credit
Note (CCB) issued to Banco Bradesco S/A, against the guarantees
of ENEVA S.A. and Petra Energia S.A. This is a bridge loan to
finance the installation of the Maranhão IV and V thermoelectric
plants. Interest is 100% of the CDI rate plus 3% p.a., with capital and
interest being paid in full when the loan matures on June 26, 2013. A
further amount of R$75 million was disbursed on February 28, 2012,
on the same conditions as for the earlier disbursement. R$90 million
of capital, plus interest accrued, was paid off on December 28, 2012,
when the long-term loan from BNDES, described in items (o) and (p),
was released. In addition to the sureties, this agreement is
guaranteed by fiduciary transfer of shares and conditional fiduciary
assignment of credits shared between Santander and Itaú BBA.
(j) On December 26, 2011, the Parnaíba Geração de Energia S.A.
thermoelectric plant raised R$125 million by means of a Bank Credit
Note (CCB) issued to Banco Itaú BBA, against the guarantee of the
parent companies ENEVA S.A. and Petra Energia S/A. This is a
bridge loan to finance the installation of the Maranhão IV and V
thermoelectric plants. Interest is 100% of the CDI rate plus 3% p.a.,
with capital and interest being paid in full when the loan matures on
186
June 26, 2013. R$60 million of capital, plus interest accrued, was
paid off on December 2012, when the long-term loan from BNDES,
described in items (o) and (p), was released.
(k) On February 28, 2012, the Parnaíba Geração de Energia S.A.
thermoelectric plant raised R$150 million by means of a Bank Credit
Note (CCB) issued to Banco Santander, against the guarantee of the
parent companies ENEVA S.A. and Petra Energia S/A. This loan is to
finance the installation of the Maranhão IV and V thermoelectric
plants. Interest is 100% of the CDI rate plus 3% p.a. This bridge loan
was fully repaid in December 2012, when the long-term BNDES loan
described in items (o) and (p) was released.
(l) The Parnaíba Geração de Energia S.A. thermoelectric plant drew down
R$242.7 million on December 28, being the full amount of sub-loan C of the
BNDES bridge loan (in nominal R$, excluding interest during the capitalization
period). The agreed cost is TJLP + 2.8% p.a. This bridge loan was fully repaid
in December 2012, when the long-term BNDES loan described in items (o)
and (p) was released. Such debt was guaranteed by bank letters of
guarantee.
(m) The Parnaíba Geração de Energia S.A. thermoelectric plant drew
down R$157.3 million on December 28, 2011, being sub-loans A and B of the
same BNDES bridge loan referred to in the preceding item. The agreed
annual cost is IPCA + BNDES Reference Rate + 2.8%. This bridge loan was
fully repaid in December 2012, when the long-term BNDES loan described in
items (o) and (p) was released. Such debt was guaranteed by bank letters of
guarantee.
(n) The Parnaíba Geração de Energia S.A. thermoelectric plant drew
down R$495.6 million in December 2012, being sub-loans B and C of the
long-term BNDES financing agreement totaling R$671 million. These sub-
loans will be amortized in 168 monthly installments, together with interest,
starting on July 15, 2013. The agreed cost is TJLP + 1.88% p.a. This financing
also includes sub-loan D, directed toward social investments (BNDES Social)
in the amount of R$12.2 million, which has not yet been disbursed and which
is only subject to TJLP cost. This debt is guaranteed by: (i) Pledge of Stock,
(ii) Fiduciary Assignment of Rights and Credits, (iii) Fiduciary Assignment of
Rights Emerging from ANEEL’s Authorization, (iv) Fiduciary Sale of Machinery
and Equipment and (v) Mortgage.
(o) The UTE Parnaíba Geração de Energia S.A. thermoelectric plant
drew down R$204.3 million in December 2012, being the full amount
of sub-loan A of the long-term BNDES financing agreement referred
to in the preceding item. This sub-loan is to be amortized in 13
187
monthly installments, together with interest, starting on July 15, 2014.
The agreed annual cost is IPCA + BNDES Reference Rate + 1.88%.
To guarantee the financing granted through sub-loans A, B and C
(referred to in the previous item), bank guarantees were issued in the
total amount of R$700 million, of which R$310 million were disbursed
by Banco Itaú BBA S/A, R$240 million were disbursed by Banco
Bradesco S/A and R$150 million were disbursed by Banco Santander
S/A, as well as corporate surety of ENEVA S.A., with limited liability
of up to 70% of debt. This debt is guaranteed by: (i) Pledge of
shares, (ii) Fiduciary Assignment of Rights and Credits, (iii) Fiduciary
Assignment of Rights Emerging from ANEEL’s Authorization, (iv)
Fiduciary Sale of Machinery and Equipment, and (v) Mortgage.
(p) On March 30, 2012, the Parnaíba II Geração de Energia S.A.
thermoelectric plant raised R$100 million by means of a Bank Credit
Note (CCB) issued to Banco Itaú BBA, against the guarantee of the
parent company ENEVA S.A. This is a bridge loan to finance the
installation of the Parnaíba II thermoelectric plant. Interest is 100% of
the CDI rate plus 3% p.a., with capital and interest being paid in full
when the loan matures on September 30, 2013. (i) Fiduciary Sale of
the total shares issued by the Parnaíba II Geração de Energia S.A.
thermoelectric plant and held by our Company; (ii) Fiduciary
Assignment of Rights of Supply Agreements by which the Parnaíba II
Geração de Energia S.A. thermoelectric plant assigns awards of
damages to be received by Petra Energia S.A. and by OGX
Maranhão Petróleo e Gás S.A. in the scope of the supply
agreements executed, and (iii) Corporate surety of ENEVA S.A.
(q) On March 30, 2012, the Parnaíba II Geração de Energia S.A.
thermoelectric plant raised R$125 million by means of a Bank Credit
Note (CCB) issued to Banco HSBC, in the amount of R$125 million,
against the guarantee of the parent company ENEVA S.A. This is a
bridge loan to finance the installation of the Parnaíba II thermoelectric
plant. Interest is 100% of the CDI rate plus 3% p.a., with capital and
interest being paid in full when the loan matures on September 30,
2013. This debt is guaranteed by the same list of guarantees
described in item (p) above.
(r) On May 7, 2012, the Parnaíba II Geração de Energia S.A. thermoelectric plant raised R$325 million under a Bank Credit Notes (CCBs) agreement with Caixa Econômica Federal, against the guarantee of the parent company. This is a bridge loan to finance the installation of the Parnaíba II thermoelectric plant. A tranche of R$125 million and two tranches of R$100 million each were disbursed on May 8, May 15 and June 15, 2012, respectively. Annual interest is 100% of the CDI rate plus 3%, and principal and interest are payable in full
188
at maturity on November 7, 2013. This debt is guaranteed by the same list of guarantees described in item (p) above.
(s) On July 17, 2012, ENEVA S.A. made the first public distribution of
300 trade promissory notes, in a single series, with a nominal value
of R$1 million each, for a total amount of R$300 million, maturing 360
days after issue and paying interest at the CDI rate plus 1.5% p.a.,
with restricted placement efforts according to CVM Instruction 476.
(t) On September 27, 2012, the parent company ENEVA S.A. issued a
Bank Credit Note (CCB) to Banco Citibank S.A. for an amount of
R$101.3 million, maturing on September 27, 2013. Interest, which will
be payable on maturity, is at 100% of the CDI rate plus 1.15% p.a.
On November 7, 2012, this CCB was split into 14 CCBs of several
amounts. This debt has a guarantee shared with the operation
described in item (u) below.
(u) On September 25, 2012, ENEVA S.A. obtained a loan from Citibank
N.A. United States through a Credit Agreement, under Central Bank
(BACEN) Resolution 4.131, for US$50 million (the equivalent of
R$101.5 million). Interest on this raising is fixed at LIBOR + 1.26%
p.a., to be paid quarterly. The principal is to be paid half-yearly, with
no capital payments until September 26, 2014, and the loan matures
on September 27, 2017. As a currency hedge for this raising, ENEVA
S.A. entered into a swap operation with Citibank itself. The execution
of this agreement was accompanied by the issuance of a promissory
note as a guarantee by the borrower and fiduciary assignment of 7
financial bills. This debt and its related instruments are guaranteed by
fiduciary assignment of securities and credit rights and by standby
letter of credit issued by the parent company.
(v) On December 11, 2012, ENEVA S.A. made the second public
distribution of 300 trade promissory notes, in a single series, with a
nominal value of R$1 million each, for a total amount of R$300
million, maturing 360 days after issue and paying interest at the CDI
rate plus 1.5% p.a., with restricted placement efforts according to
CVM Instruction 476.
(w) On December 13, 2012, ENEVA S.A. issued a Bank Credit Note
(CCB) to Banco BTG Pactual for an amount of R$101.9 million,
maturing on December 13, 2013. Interest, which will be payable on
maturity, is at 100% of the CDI rate plus 1.5% p.a.
(x) On February 7, 2013, ENEVA S.A. issued a Bank Credit Note (CCB)
to Banco BTG Pactual S.A. in the amount of R$350.0 million,
maturing on August 7, 2013. Interest, which will be payable on
189
maturity, was set at 100% of the CDI rate plus 2.95% p.a. This debt is
guaranteed by fiduciary assignment subject to credit rights arising
from a loan agreement between the Company and the Porto do Itaqui
thermoelectric plant entered into in July 2012.
(y) On March 25, 2013, ENEVA S.A. issued a Bank Credit Note (CCB)
to HSBC Bank Brasil S.A. in the amount of R$100 million, maturing
on March 25, 2014. Interest, which will be payable on maturity date,
was set at 100% of the CDI rate plus 1.75% p.a.
(z) By the end of 2012, BNDES had released an amount of R$1.4 billion
of the long-term financing for Porto do Pecém Geração de Energia
S.A. The BNDES financing agreement is for a total amount of R$1.41
billion (in nominal R$, excluding interest during the construction
phase), for a total period of 17 years, with amortization over 14 years
and no payments of capital or interest until July 2012. The agreed
annual cost is TJLP + 2.77%. Interest is being capitalized during the
construction phase. The balances of principal and interest shown in
the above table correspond to 50% of the original balances, taking
into account the 50% share in the company held by EDP Energias do
Brasil S.A. This financing has the following guarantees, which are
shared with the other project financing banks: (i) Mortgage, (iii) Share
Pledge, (iii) Fiduciary Assignment of Rights and Credits, (vi)
Conditional Assignment of Rights and Contracts, (v) Chattel
Mortgage of Machines and Equipment, (vi) Promissory Notes, (vii)
Revenue Account in Reserve Account, (viii) Corporate surety of
ENEVA S.A. up to the limit of 50% of debt balance, and (ix)
Corporate surety of EDP up to the limit of 50% of debt balance.
(aa) To supplement the direct BNDES loan, Porto do Pecém Geração de
Energia S.A. has raised a direct loan from the Banco Interamericano de
Desenvolvimento (BID) (“A Loan”), amounting to US$147 million. The total
disbursed so far is US$143.78 million (the equivalent of R$289,429 as of
December 31, 2012). The cost of the “A Loan” is LIBOR + 3.5% for a total
period of 17 years, with amortization over 14 years and no repayments of
principal until July 2012. The balances of principal and interest shown in the
above table correspond to 50% of the original balances, taking into account
the 50% share in the company held by EDP Energias do Brasil S.A.
(bb) To supplement the direct BNDES loan, Porto do Pecém Geração de
Energia S.A. has raised an indirect loan from the BID (“B Loan”), amounting to
US$180 million. The total disbursed so far is US$176 million (the equivalent of
R$348,997 as of December 31, 2012). The onlending banks are the Banco
Comercial Português Group, Calyon and Caixa Geral de Depósito. The cost
of the “B Loan” is LIBOR + 3% for a total period of 13 years, including 10
190
years of amortization and no repayments of principal until July 2012 The
balances of principal and interest shown in the above table correspond to
50% of the original balances, taking into account the 50% share in the
company held by EDP Energias do Brasil S.A.
(cc) MPX Chile Holding Ltda. entered into a foreign currency loan
agreement with Banco Credit Suisse Bahamas on April 13, 2011, with the
guarantee of the parent company. The loan was raised in US Dollars for a
total of US$15 million (the equivalent of R$31,231 as of December 31, 2012),
at a fixed annual interest rate of 8.13%. Capital and interest are to be paid
half-yearly, with no capital payments until April 15, 2013, and the loan
maturing on April 15, 2015. The balances of principal and interest shown in
the above table correspond to 50% of the original balances. The loan
agreement was accompanied by the issuance of a promissory note as a
guarantee by Credit Suisse AG, Nassau Branch.
(dd) MPX Chile Holding Ltda. entered into a foreign currency loan
agreement with Banco Credit Suisse Bahamas on June 29, 2011, with the
guarantee of the parent company. The loan was raised in US Dollars for a
total of US$10 million (the equivalent of R$20,815 as of December 31, 2012),
at a fixed annual interest rate of 8%. Capital and interest are to be paid half-
yearly, with no capital payments until April 15, 2013, and the loan matures on
April 15, 2015. The balances of principal and interest shown in the above
table correspond to 50% of the original balances. The loan agreement was
accompanied by the issuance of a promissory note as a guarantee by Credit
Suisse AG, Nassau Branch.
In addition to the above mentioned financing, as from July 2012, the Company
disbursed R$500 million as a result of loan agreements subordinated to
transactions with IDB, BNDES and BNB, of which R$150 million to Porto do
Pecém Geração de Energia S.A. and R$350 million to UET Porto do Itaqui
Geração de Energia S.A.
In October and December 2012, the Company entered into two loan
agreements, in each of which the Company undertook to make R$667
thousand available to Pecém Operação e Manutenção de Unidades de
Geração Elétrica S.A., at an annual cost of 110% of the CDI, with maturities
currently fixed for September 30 and December 31, 2013, respectively.
Management of the Company states that the total amount of debt of any nature,
which as defined in Circular Letter CVM/SEP/No. 01/2013 is the aggregate total of
the Company’s consolidated Current and Non-Current Liabilities, is not
contractually subordinated, except for the legal subordination arising from the
collateral given by the Company to its financial creditors.
As of March 31, 2013, the Company’s total consolidated debt of any nature was
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R$6,077.4 million. R$3,961.8 million of this was collateralized, with preference, in
the case of collective insolvency proceedings, over the unsecured creditors of the
Company, which at the same date amounted to R$2,115.9 million.
As of December 31, 2012, of the Company’s total consolidated debt of any nature,
amounting to R$6,746.6 million, R$3,898.3 million was collateralized, with
preference, in the case of collective insolvency proceedings, over the unsecured
creditors of the Company, which at the same date amounted to R$2,848.4 million.
The table below shows the financial debt and the non-financial debt and the
Company’s total indebtedness for the periods indicated:
(in thousands of R$) 03/31/2013 12/31/2012
Financial Debt 5,459,825 6,067,349
Non-financial Debt 617,949 679,256
Total Indebtedness 6,077,774 6,746,605
For more information on the Company’s indebtedness, see item 3.7 of this
Reference Form.
(ii) Other long-term relationships with financial institutions
Our Company and its subsidiaries have no long-term relationships with
financial institutions, other than those already described in item 10.1(f)(i) of
this Reference Form.
(iii) Degree of subordination between debts
The long-term financing agreements entered into by our Company’s
subsidiaries and described above are for the most part structured as Project
Finance and are collateralized. The undertakings that have been financed are
subject to the usual market obligations not to issue guarantees of any kind for
transactions with other creditors, without the same guarantees being offers to
the lenders, except with the prior express authorization of the latter, other than
encumbrances allowed in terms of the corresponding agreements.
Furthermore, the financing agreements entered into by one undertaking are in
no way subordinated to debts contracted in respect of the other undertakings.
(iv) Any restrictions imposed on the Company, in particular
regarding borrowing limits and the raising of new debt, dividend
distribution, asset disposal, the issue of new securities or the transfer of
control of the Company.
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Certain usual market covenants are included in the financial agreements
mentioned above. We highlight the following: (i) the obligation to submit
regular financial statements to lenders; (ii) the right of the lenders to make
inspections and to visit the borrowers’ premises; (iii) the obligation to pay all
tax, social security and labor liabilities as they fall due; (iv) the obligation to
ensure that contracts materially relevant to their business remain in force; (v)
to respect the environmental legislation and to renew the licenses necessary
for their operations; (vi) contractual restrictions on transactions with related
parties and disposals of assets outside the normal course of business; (vii)
restrictions on change in control, corporate restructuring and material changes
in the debtors’ business purposes and constituent documents; (viii) limits on
indebtedness and the raising of new debt; (ix) maintenance of debt service
ratios; and (x) distribution of dividends above the legal minimum.
(g) Limits on use of financing previously contracted
The table below shows the financing contracted by the Company and its
subsidiaries, as well as the total disbursed as of March 31, 2013:
Legend:
$ MM
Disbursed
% of Disbursed
(1) Amounts disbursed until March 31, 2013
Porto do Pecém Geração de Energia S.A.
The company has a Financing Agreement upon Opening of Credit entered
into with BNDES, which provides for financing of R$1.4 billion (in nominal R$,
excluding interest during the construction phase), divided into sub-loans A, B,
C and D, for a total period of 17 years, with amortization over 14 years and no
payments of capital or interest until July 2012. The agreed annual cost is TJLP
+ 2.77%. Interest is to be capitalized during the construction phase. As of
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December 31, 2011, a total of R$1.282 billion had been disbursed. The
undertaking also has a financing agreement with the Inter-American
Development Bank (“IBD”), providing for an A Loan for a total of USD147
million and a B Loan for a total of USD180 million. The “A Loan” is for a total
period of 17 years, with amortization over 14 years and no repayments of
principal until July 2012. As of March 31, 2013, US$117 million had been
disbursed on October 30, 2009, US$22.68 million on September 2, 2010 and
US$4.05 million on February 2, 2011, at an annual cost of LIBOR + 3.5%. The
“B Loan” is for a total period of 13 years, including 10 years of amortization
and no repayments of principal until July 2012. As of March 31, 2013, US$143
million had been disbursed on October 30, 2009, US$27.72 million on
September 2, 2010 and US$4.95 million on February 2, 2011, at an annual
cost of LIBOR + 3%.
Porto do Itaqui Geração de Energia S.A. Thermoelectric Plant
The company has a Financing Agreement upon Opening of Direct Credit
entered into with BNDES, which provides for a loan of R$797 million. The
agreed annual cost is TJLP + 2.78%, with part of the line being for social
investments (BNDES Social) for an amount of R$10 million and paying the
TJLP rate only. The “BNDES Social” line is for a total period of 9 years,
including 6 years of amortization and no repayments of principal until July
2012. The financing period for the remaining amount is 17 years, with
amortization over 14 years and no capital repayments until July 2012. Interest
on these loans is to be capitalized during the construction phase. As of March
31, 2013, a total of R$771 million had been disbursed. As a supplement to the
direct BNDES line of credit, the Porto do Itaqui thermoelectric plant has an
indirect line of BNDES credit on-lent by Banco Bradesco S/A and Banco
Votorantim S/A, for a total of R$241 million. This portion of the loan is for a
total period of 17 years, with amortization over 14 years and no payments of
capital or interest until July 2012. The agreed annual cost for sub-loans A, B,
C, D and E is IPCA + Reference Rate + 4.80% during the construction phase
and UMIPCA + Reference Rate + 5.30% when the plant is in operation. The
agreed annual cost for sub-loan F is IPCA + 4.80% during the construction
phase and IPCA + 5.30% during the operational phase. Interest on these
loans is to be capitalized during the construction phase. As of March 31, 2013,
the totality of the loan had been disbursed. In addition to the direct and
indirect BNDES financing, the Porto do Itaqui Geração de Energia S.A.
thermoelectric plant has a loan from BNB-FNE, for a total amount of R$203
million. The BNB loan is for a total period of 17 years, with amortization over
14 years and no capital repayments until July 2012. The annual cost is 10%.
The conditions of the financing include a 15% compliance bonus, thus
reducing the cost to 8.5% p.a. As of March 31, 2013, a total of R$203 million
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had been disbursed.
MPX Pecém II Geração de Energia S.A.
The company has The company has a long-term Financing Agreement upon
Opening of Credit entered into with BNDES, which provides for a loan totaling
R$737.39 million (in nominal R$, excluding interest during the construction
phase), divided into sub-loans A, B, C, D, E, F, G, H, I, J and L. These sub-
loans, amounting to an aggregate amount of R$627.2 million, are for a total
period of 17 years, with amortization over 14 years and no payments of capital
or interest until July 2013. The agreed annual cost is TJLP + 2.18%. Part of
the line, the equivalent of R$2 million, is for social investments (BNDES
Social) and pays the TJLP rate only. The “BNDES Social” line is for a total
period of 9 years, with amortization over 6 years and no repayments until July
2013. These sub-loans, amounting to an aggregate amount of R$110.1
million, are for a total period of 17 years, with amortization over 14 years and
no payments of capital or interest until June 2014. The agreed annual cost is
IPCA + TR BNDES + 2.18%. As of March 31, 2013, a total of R$718 million
had been disbursed. As a supplement to the BNDES financing, MPX Pecém II
Geração de Energia S.A. has raised a loan from BNB with FNE funds, for a
total amount of R$250 million (in nominal R$), for a period of 17 years with
quarterly interest payments and amortization over 14 years. No payments of
principal will be made until February 2014, and the annual cost is 10%. The
conditions of the financing include a 15% compliance bonus, thus reducing
the cost to 8.5% p.a. As of March 31, 2013, the loan totaling R$250 million
had been disbursed.
UTE Parnaíba Geração de Energia S.A.
This plant has funds arising from Bank Credit Notes issued to Banco Itaú
BBA, Banco Bradesco and Banco Santander, in the amounts of R$125.0
million, R$150.0 million and R$150.0 million respectively. The cost of such
bills corresponds to 100% of CDI plus 3.0% per year, with maturity on June
26, 2013. These amounts were partially settled by the release of funds of the
long-term Financing Agreement entered into with BNDES. Only the CCB of
R$150 million issued to Banco Santander was fully settled.
The Parnaíba Geração de Energia S.A. thermoelectric plant has a long-term
Financing Agreement through Opening of Credit with BNDES, signed on
December 18, 2012, in the amount of R$887,516 million, subdivided into sub-
loans A, B, C and D.
The Parnaíba Geração de Energia S.A. thermoelectric plant was released
R$495.6 million of the R$671 million provided under sub-loans B and C of the
long-term financing agreement entered with BNDES. These sub-loans will be
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repaid in 168 monthly installments, the first installment being due, together
with interest, on July 15, 2013. The annual cost agreed is TJLP + 1.88%. This
financing also includes sub-loan D, directed toward social investments
(BNDES Social) in the amount of R$12.2 million, which has not yet been
disbursed and is only subject to TJLP cost. Additionally, Parnaíba Geração de
Energia S.A. thermoelectric plant was released R$204.3 million of the total
sub-loan A of the aforesaid long-term financing agreement entered with
BNDES. This sub-loan will be repaid in 13 monthly installments, the first
installment being due, together with interest, on July 15, 2014. The annual
cost agreed is TJLP + 1.88%.
The total amount of R$700 million disbursed in December 2012 for the long-
term financing agreement entered into with BNDES, with respect to Sub-loans
A, B and C, was used to settle: (i) the entire short-term financing granted by
BNDES of R$400 million; (ii) the entire CCB of R$150 million issued to Banco
Santander; (iii) R$90 million of the total R$150 million of CCBs issued to
Banco Bradesco; and (iv) R$60 million of the total R$125 million of the CCB
issued to Banco Itaú BBA. Funds from the balance to be disbursed by BNDES
will be used to settle the amount of the current short-term debt.
To guarantee the financing granted through sub-loans A, B and C, bank
guarantees were issued in the total amount of R$700 million, of which R$310
million were disbursed by Banco Itaú BBA S/A, R$240 million were disbursed
by Banco Bradesco S/A and R$150 million were disbursed by Banco
Santander (Brasil) S/A.
(h) Significant changes in financial statements items:
The following information expresses the opinions of our Management.
Our summary financial statements for the years ended December 31, 2012, 2011 and 2010, were extracted from our consolidated financial statements, which were prepared under the responsibility of our management and according to the IFRS and the accounting practices adopted in Brazil, both in force on December 31, 2012.
The Company’s Management understands that the Company adopted all rules, revisions of rules and interpretations issued by IASB and then in effect, and applicable to the financial statements as of December 31, 2012, 2011 and 2010.
The consolidated financial statements included the financial statements of our Company and of the business in which the Company has share control, directly or indirectly, and whose fiscal years coincide with ours and whose accounting practices are uniform.
As from January 1, 2013, the Company adopted IFRS 10 and IFRS 11 in the
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preparation of the Quarterly Statements (ITR) as of March 31, 2013, whose accounting policy is as follows:
IFRS 10 establishes one single model that is applicable to all entities, including special purpose entities. The changes introduced by IRFS 10 required significant judgment from Management to determine which entities are controlled, and, thus, which entities must be consolidated by a parent company, compared to the requirements provided for in IAS 27.
IFRS 11 eliminated the option to record joint ventures (ECC) based on proportional consolidation. In turn, ECCs that may correspond to the definition of “joint venture” were recorded based on equity pick-up.
The adoption of IFRS 10 and IFRS 11 was made retroactively regarding the quarterly financial statements for the period ended March 31, 2012.
In compliance with IFRS 11, the investments made in the joint ventures Porto do Pecém Geração de Energia S.A., Porto do Pecém Transportadora de Minérios S.A., OGMP Transporte Aéreo Ltda., Pecém Operação e Manutenção de Unidades de Geração S.A., MABE Construção e Administração de Projetos Ltda., MPX Chile Holding Ltda., Seival Participações S.A., UTE MPX Sul Energia Ltda., Parnaíba Participações S.A., UTE Porto do Açú Energia S.A., Porto do Açú II Energia S.A. and MPX E.ON Participações S.A. were assessed at the equity method in the individual and consolidated quarterly statements for the three-months ended March 31, 2013 and 2012.
The financial statements presented hereby for the fiscal years ended December 31, 2012, 2011 and 2010 were prepared and are presented according to the accounting practices effective as of December 31, 2012, except when otherwise stated. Accordingly, the financial statements for the three-months periods ended March 31, 2013 and 2012, are not comparable with the other financial statements included herein.
Comparison of our consolidated income in the three-month periods ended March 31, 2013 and March 31, 2012.
The statements of income for the three month-period ended March 31, 2013 and 2012 consider the accounting practices adopted as from January 1, 2013, which were adjusted retroactively in the statement of income of the three-month period ended March 31, 2012.
Fiscal year ended March 31 of
2013 AV 2012 AV Var. 13/12
(in R$ thousands, except percentages)
Net operating revenues 196,098 100% 75,669 100% 159%
Cost of goods and/or services sold -312,608 -159% -81,797 -108% 282%
Gross profit (loss) -116,510 -59% -6,128 -8% 1801%
Operating revenue (expenses) -123,531 -63% -81,219 -107% 52%
General and administrative -39,029 -20% -61,873 -82% -37%
Other operating revenues 511 0% 546 1% -6%
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Other operating expenses -1,522 -1% -466 -1% 227%
Equity Pick-up -83,491 -43% -19,426 -26% 330%
Income before net financial revenues (expenses) and taxes
-240,041 -122% -87,347 -115% 175%
Net financial revenues (expenses) -77,827 -40% -6,202 -8% 1155%
Financial revenues 10,256 5% 43,174 57% -76%
Financial expenses -86,015 -44% -54,946 -73% 57%
Derivative financial instruments -3,693 -2% -7,755 -10% -52%
Exchange variation net 1,625 1% 13,325 18% -88%
Income before tax -317,868 -162% -93,549 -124% 240%
Income tax and social contribution - current
0 0% -838 -1% -100%
Income tax and social contribution - deferred
60,807 31% 16,627 22% 266%
Loss for the period -257,061 -131% -77,760 -103% 231%
Attributable to controlling shareholders
-250,901 -128% -77,481 -102% 224%
Interest of Non-controlling shareholders
-6,160 -3% -279 0% 2,108%
Net operating revenues
The Company’s net operating revenues went from R$75.7 million in the three-month period ended March 31, 2012 to R$196.1 million in the three-month period ended March 31, 2013, representing an increase of 159%. The Company’s Management believes that this variation was primarily due to the fact that Parnaíba I and Itaqui thermoelectric plants’ projects intensified their business operations in the first quarter of 2013, which increased the sales of energy of the Company and its subsidiaries by 158% against the same period in the year 2012.
Cost of goods and/or services sold
The cost of goods and/or services sold went from R$81.8 million in the quarter ended March 31, 2012 to R$312.6 million in the quarter ended March 31, 2013, representing an increase of 282%. The Company’s Management believes that this variation was basically due to the following reasons:
Electrical energy purchased for resale
In the quarter ended March 31, 2013, we recorded an increase in the purchase of electrical energy for resale by the subsidiaries Itaqui and Parnaíba I thermoelectric plants, which represented an increase of R$105.3 million in the cost of goods and/or services sold. The increase in the purchase of electrical energy is due to the fulfillment of the obligations of energy supply that the Company and its subsidiaries have vis-à-vis regulatory bodies in the scope of CCEAR contracts, which require that the Company and its subsidiaries supply electrical energy in a given period through its Itaqui and Parnaíba I undertakings. Due to the delay in starting the power generation operations of such undertakings, the Company was forced to purchase electrical energy on the market to honor its electrical energy supply commitments.
Fuel for generation of electrical energy
In the quarter ended on March 31, 2013, we recorded an increase in the
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consumption of coal and natural gas by the aforesaid subsidiaries amounting to R$71.2 millionin which increased the cost of goods and/or services sold against the same period of 2012.
Gross loss
The Company’s gross loss went up from R$6.1 million in the quarter ended March 31, 2012 to R$116.5 million in the quarter ended March 31, 2013, representing an increase of 1801%. Management understands this increase occurred mainly as a result of the factors described above.
Operating revenues (expenses)
General and administrative expenses
General and administrative expenses went from R$61.9 million in the three-month period ended March 31, 2012 to R$39.0 million in the three-month period ended March 31, 2013, representing a decrease by 37%. The Company’s Management believes that this reduction was mainly due to the completion of the Company’s corporate restructuring, which took place in June, 2012 and culminated in the spin-off of CCX. Due to this division, the Company failed to register all expenditures with the campaign to prospect coal of CCX, which demanded the hiring of several outsourced services.
Equity Pick-up
Equity pick-up went from an expense of R$19.4 million in the three-month period ended March 31, 2012 to an expense of R$83.5 million in the three-month period ended March 31, 2013, which represents an increase of 330%. Management understands this increased occurred mainly as a result of the incorporation of MPX E.ON Participações S.A. as a joint venture between the Company and E.ON, in May 2012. The Company therefore ceased to consolidate, either in whole or proportionately, its shareholdings in the following companies: UET Sul, Porto do Açú, MPX Chile, Porto do Açú II, Seival Participações, MPX Comercializadora de Energia, MPX Solar and MPX Comercializadora de Combustível, which were transferred to the said joint venture. Our adoption of the above-mentioned accounting standard caused the Company to cease consolidating the result of certain subsidiaries, which were then stated at the equity method.
Financial revenues (expenses), net
Financial revenues
Financial revenues went from R$43.2 million in the three-month period ended March 31, 2012 to R$10.3 million in the three-month period ended March 31, 2013, representing a decrease by 76%. The Company’s Management believes that this variation was mainly due to determination of the fair value of derivative instruments included in the issue of debentures of the Company made in June 2011 generating financial revenue of R$13.0 million in the three-month period ended on March 31, 2012, and expenses of R$0.3 million in the three-month period ended March 31, 2013. Fair value measurement
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was a result of settlement and consequent conversion of the majority of the debentures issued by the Company in the second quarter of 2012.
Financial expenses
Financial expenses went from R$54,9 million in the three-month period ended March 31, 2012 to R$86.0 million in the three-month period ended March 31, 2013, representing a increase of 57%. The Company’s Management believes that this increase was mainly due to the following reasons: (i) appropriation of interest on loans contracted by the Company and its subsidiaries and intermediation fees charged by financial institutions in the amount of R$59,9 million related to increase in financial expenses registered in the period covered, and (ii) which was partially offset by a decrease in interest on debentures issued by the Company in June 2011 due to the conversion of the majority of such debentures into shares of the Company, representing a decrease of R$28.8 million in the Company financial expenses.
Derivative financial instruments
The amounts regarding our derivative financial instruments went from an expense of R$7.8 million in the three-month period ended March 31, 2012 to a R$3.7 million in the three-month period ended March 31, 2013, representing a decrease by 52%. The Company’s Management believes that this variation was mainly due to the variation on mark to market – MTM of derivatives.
Net exchange variation
The amounts regarding net exchange variation went from a revenue of R$13,3 million in the three-month period ended March 31, 2012 to an expense of R$1.6 million in the three-month period ended March 31, 2013, representing a decrease by 88%. The Company’s Management believes that this variation was mainly due to the partial spin-off of the Company upon the transfer of the equity interest then owned by the Company in MPX Áustria to CCX Carvão in Colombia. It should be noted that the major volume of transactions held by MPX Austria, whether as loans or supply contracts, was in foreign currency. With the conclusion of such partial spin-off, the Company is less exposed to exchange rate variations, which was reflected in its financial information relating to the three-month period ended March 31, 2013.
Income tax and social contribution – deferred
The amounts regarding income tax and social contribution went from R$16.6 million in the three–month period ended March 31, 2012 to R$60.8 million in the three-month period ended March 31, 2013, representing an increase of 266%. The Company’s Management believes that this variation was mainly due to an increase in tax assets generated by an increase in tax losses ascertained in the period.
Loss for the year
The Company’s loss for the year rose from R$77.8 million in the quarter ended March 31, 2012, to R$257.1 million in the quarter ended March 31, 2013, an
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increase of R$179.3 million. The Company Management is of the opinion that this increase was due largely to the factors mentioned above.
Comparison of our consolidated income in the financial years ended December 31, 2012 and December 31, 2011.
The statements of income for the financial years ended December 31, 2012 and 2011, presented below, were prepared and are presented in accordance with the accounting practices in force on December 31, 2012.
Fiscal year ended December 31
2012 AV 2011 AV Var. 12/11
(in R$ thousands, except percentages)
Net operating revenues 490,940 100% 168,279 -100% 192%
Cost of goods and/or services sold (597,554) -122% (163,778) 497% 265%
Gross profit (loss) (106,614) -22% 4,501 -3% -2469%
Operating revenues (expenses) (314,937) -64% (341,585) 203% -8%
General and administrative (280,284) -57% (277,934) 165% 1%
Other operating revenues 1,823 0% 1,128 01% 62%
Other operating expenses (2,241) 0% (37,062.00) 9% -94%
Equity pick-up (34,235) -7% (27,717.00) 7% 24%
Income before net financial revenues (expenses) and taxes
(421,551) -86% (337,084.00) 84% 25%
Net financial revenues (expenses) (127,541) -26% (202,387.00) 50% -37%
Financial revenues 157,760 32% 106,281.00 -26% 48%
Financial expenses (232,045) 47% (197,344.00) 49% 18%
Derivative financial instruments (37,721.00) -8% (62,198.00) 15% -39%
Exchange variation, net (15,535) -3% (49,126.00) 12% -68%
Income before taxes (549,092) 112% (539,471.00) 134% 2%
Income tax and social contribution–current (2,289) 0% (4,864.00) 1% -53%
Income tax and social contribution - deferred 116,927 24% 142,473.00 -35% -18%
Loss for the year (434,454) 88% (401,862.00) 100% 8%
Attributable to controlling shareholders (435,202) 89% (408,553.00) 102% 7%
Interest of Non-controlling shareholders 748 0% 6,691.00 -2% -89%
Net operating revenues
The Company’s net operating revenues increased from R$168.3 million in the fiscal year ended December 31, 2011 to R$490.9 million in the fiscal year ended December 31, 2012, representing an increase of 192%. The Company’s Management believes that this variation was mainly due to the following reasons: (i) beginning of billing of electricity sales by Energia Pecém and Itaqui; and (ii) increase in sales by MPX Comercializadora de Energia.
Cost of goods and/or services sold
The cost of goods and/or services sold increased from R$163.8 million in the fiscal year ended December 31, 2011 to R$597.6 million in the fiscal year ended December 31, 2012, representing an increase of 265%. The increase in the purchase of electrical energy is due to the fulfillment of the obligations of energy supply that the Company and its subsidiaries have vis-à-vis regulatory bodies,
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under CCEAR agreements, which require that the Company and its subsidiaries supply electrical energy in a given period through its Itaqui and Energia Pecém undertakings. Due to the delay in starting the power generation operations of such undertakings, the Company was forced to purchase electrical energy on the market to honor its electrical energy supply commitments. In the case of MPX Comercializadora de Energia, as a company whose purpose is the purchase and sale of electric energy, the increase in these costs was mainly due to the increase in the number of Power Purchase Agreements.
Gross Profit (Loss)
The gross profit (loss) of the Company went from gross profit of R$4.5 million for the year ended December 31, 2011, to gross loss of R$106.6 million for the year ended December 31, 2012, a negative variation of R$111.1 million. Management considers that this decrease occurred principally as a result of the factors described above.
Operating revenues (expenses)
Other operating expenses
Other operating expenses went from R$37.1 million in the fiscal year ended December 31, 2011 to R$2.2 million in the fiscal year ended December 31, 2012, representing an decrease of 94%. Management considers that this variation occurred mainly in the light of the reduction due to the spin-off of CCX and provision for investment loss in 2011.
Equity Pick-up
Equity pick-up went from an expense of R$27.7 million in the three-month period ended March 31, 2011 to an expense of R$34.2 million in the three-month period ended March 31, 2012, which represents an increase of 24%. Management understands this increased occurred mainly due to the result recorded by the subsidiary OGX Maranhão.
Net financial revenues (expenses)
Financial revenues
Financial revenues increased from R$106.3 million in the fiscal year ended December 31, 2011 to R$157.8 million in the fiscal year ended December 31, 2012, representing an increase of 48%. Management considers that this occurred mainly in the light of the portion of the gain on the fair value of debentures.
Financial expenses
Financial expenses increased from R$197.3 million in the fiscal year ended December 31, 2011 to R$232.0 million in the fiscal year ended December 31, 2012, representing an increase of 18%. Management believes that this variation occurred basically due to the payment of a premium on the early conversion of the debentures. This transaction led to an expense of R$75 million being debited in the books.
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Derivative financial instruments
The values of derivatives financial instruments went from an expense of R$62.2 million in the fiscal year ended December 31, 2011 to an expense of R$37.7 million in the fiscal year ended December 31, 2012, representing a decrease of 39%. Management considers that this variation occurred mainly in the light of changes in mark to market – MTM of derivatives.
Exchange variation, net
The amounts regarding net exchange variation went from an expense of R$49.1 million in the fiscal year ended December 31, 2011 to an expense of R$15.5 million in the fiscal year ended December 31, 2012, representing a decrease of 68%. Management believes that this variation occurred mainly due to the effect of the transactions in foreign currency of CCX. As a result of the partial spin-off of the Company with the transfer of the shareholding then owned by the Company in MPX Áustria to CCX Carvão da Colômbia, the Company failed to register in its income the operations of CCX, protecting the Company against exchange variations of CCX’s operations.
Income tax and social contribution – deferred
The amounts regarding deferred income tax and social contribution went from R$142.5 million in the fiscal year ended December 31, 2011 to R$116.9 million in the fiscal year ended December 31, 2012, representing a decrease of 18%. Management believes that this variation occurred mainly due to the increase in tax debts arising from temporary difference, mainly, revenues from exchange variation over loans.
Comparison of our consolidated income in the financial years ended December 31, 2011 and December 31, 2010.
The statements of income for the financial years ended December 31, 2011 and 2010, presented below, were prepared and are presented in accordance with the accounting practices in force on December 31, 2012.
Year ended December 31,
2011 AV 2010 AV Var. 11/10
(in R$ thousands, except percentage)
Net operating revenues 168,279 100% 98,455 100% 71%
Cost of goods and/or services sold (163,778) -97% (116,482) -118% 41%
Gross profit (loss) 4,501 3% (18,027) -18% -125%
Operating revenues (expenses (341,585) -203% (249,865) -254% 37%
General and administrative (277,934) -165% (226,167) -230% 23%
Other operating revenues 1,128 1% 8,236 8% -86%
Other operating expenses (37,062) -22% (30,399) -31% 22%
Equity pick-up (27,717) -16% (1,535) -2% 1706%
Income before net financial revenues (expenses) and taxes
(337,084) -200% (267,892) -272% 26%
Net financial revenues (expenses) (202,387) -120% (45,745) -46% 342%
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Financial revenues 106,281 63% 65,092 66% 63%
Financial expenses (197,344) -117% (23,366) -24% 745%
Derivative financial instruments (62,198) -37% (98,272) -100% -37%
Exchange variation, net (49,126) -29% 10,801 11% -555%
Income before taxes (539,471) -321% (313,637) -319% 72%
Income tax and social contribution - current (4,864) -3% (280) 0% 1637%
Income tax and social contribution - deferred 142,473 85% 58,303 59% 144%
Loss for the year (401,862) -239% (255,614) -260% 57%
Attributable to controlling shareholders (408,553) -243% (256,250) -260% 59%
Interest of Non-controlling shareholders 6,691 4% 636 1% 952%
Net operating revenue
Net operating revenue increased from R$98.5 million in the financial year ended December 31, 2010 to R$168.3 million in the financial year ended December 31, 2011, representing an increase of 71%. The Company’s Management believes that this variation occurred mainly due to the increase in sales agreements of MPX Comercializadora de Energia.
Cost of goods and/or services sold -
Cost of the goods and/or services sold increased from R$116.5 million in the financial year ended December 31, 2010 to R$163.8 million in the fiscal year ended December 31, 2011, representing an increase of 41%. The Company’s Management believes that this variation was due mainly to the increase in the number of Power Purchase Agreements of MPX Comercializadora de Energia.
Gross profit (loss)
The Company’s gross profit (loss) went from R$18.0 million in the fiscal year ended December 31, 2010 to R$4.5 million in the fiscal year ended December 31, 2011, representing an increase of 125%. Management understands this increases occurred mainly due to the variation in the abovementioned accounts.
Operating revenues (expenses)
General and Administrative Expenses
General and administrative expenses went from R$226.2 million in the fiscal year ended December 31, 2010 to R$278.0 million in the fiscal year ended December 31, 2011, representing an increase of 23%. Management considers that this variation occurred mainly due to the increase in payroll and services expenses (legal and environmental) linked to investments.
Equity pick-up
Equity pick up went from negative R$1.5 million in the fiscal year ended December 31, 2010 to negative R$27.7 million in the fiscal year ended December 31, 2011, representing an increase of 1,706%. Management believes that this variation occurred mainly due to the increase in the negative result of investments.
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Financial revenues
Financial revenues increased from R$65.1 million in the fiscal year ended December 31, 2010 to R$106.3 million in the fiscal year ended December 31, 2011, representing an increase of 63%. Management believes that this variation occurred mainly due to the increase in earnings from financial investments.
Net financial revenues (expenses)
Financial expenses
Financial expenses increased from R$23.4 million in the fiscal year ended December 31, 2010 to R$197.3 million in the fiscal year ended December 31, 2011, representing an increase of 745%. Management believes that this variation occurred mainly due to the negative impact from the accounting of the fair value of derivative instruments linked to the convertible debentures, as provided for in the IFRS.
Derivative financial instruments
The values of derivatives financial instruments went from negative R$98.3 million in the fiscal year ended December 31, 2010 to negative R$62.2 million in the fiscal year ended December 31, 2011, representing a decrease of 37%. Management considers that this variation occurred mainly in the light of changes in mark to market – MTM of derivatives.
Exchange variation, net
The amounts regarding net exchange variation went from R$10,8 million in the fiscal year ended December 31, 2010 to negative R$49,1 million in the fiscal year ended December 31, 2011, representing a decrease of 555%. Management believes that this variation occurred mainly due to the effect of the transactions in foreign currency of CCX.
Income tax and social contribution – deferred
The amounts regarding deferred income tax and social contribution went from R$58.3 million in the fiscal year ended December 31, 2010 to R$142.5 million in the fiscal year ended December 31, 2011, representing a decrease of 144%. Management believes that this variation occurred mainly due to the increase in tax debts arising from temporary difference, basically, revenues from exchange variation over loans.
Comparison of the Main Consolidated Balance Sheet Accounts in March 31, 2013 and December 31, 2012.
The balance sheets consolidated on March 31, 2013 and December 31, 2012 consider the accounting practices adopted as from January 1, 2013, which were adjusted retroactively in the balance sheet consolidated on December 31, 2012 for comparability purposes.
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Consolidated Balance Sheets
As of March 31, 2013 AV
As of December 31, 2012
AV Var. 13/12
(in R$ thousands, except percentages)
Total Assets 8,530,091 100%
8,039,596 100%
6%
Current Assets 817,973 10% 765,908 10% 7%
Cash and cash equivalents 359,121 4% 519,277 6% -31%
Securities 5,600 0% 3,441 0% 63%
Accounts receivable 228,964 3% 21,345 0% 973%
Grants receivable – CCC 10,051 0% 17,561 0% -43%
Inventories 130,811 2% 142,687 2% -8%
Prepaid expenses 19,325 0% 19,351 0% 0%
Taxes recoverable 61,397 1% 37,410 0% 64%
Derivative gains 0 0% 3,018 0% -
100%
Miscellaneous advances 2,668 0% 1,783 0% 50%
Restricted deposits 36 0% 35 0% 3%
Non-current Assets 7,712,118 90% 7,273,688 90% 6%
Prepaid expenses 4,167 0% 8,494 0% -51%
Restricted deposits 137,546 2% 135,648 2% 1%
Grants receivable – CCC 24,617 0% 24,617 0% 0%
Taxes recoverable 23,538 0% 24,034 0% -2%
Income tax and social contribution - deferred 366,355 4% 305,548 4% 20%
Loans with affiliates 157,766 2% 134,926 2% 17%
Accounts receivable with other related persons 1,134 0% 1,134 0% 0%
Accounts receivable with affiliates 9,017 0% 6,793 0% 33%
AFAC with joint subsidiaries 19,080 0% 12,425 0% 54%
Embedded derivatives 227 0% 479 0% -53%
Investments 819,435 10% 833,955 10% -2%
Property, plant and equipment 5,933,978 70% 5,570,399 69% 7%
Intangible assets 215,258 3% 215,236 3% 0%
Total Liabilities and Shareholders’ Equity 8,530,091 100%
8,039,596 100%
6%
Current Liabilities 2,829,447 33% 2,109,465 26% 34%
Suppliers 302,729 4% 115,261 1% 163%
Loans and financing 2,341,969 27% 1,819,974 23% 29%
Debts with controlling shareholders 4,284 0% 26,783 0% -84%
Debts with other related parties 47,257 1% 3,989 0% 1085
%
Debentures 163 0% 111 0% 47%
Taxes and contributions payable 39,664 0% 7,241 0% 448%
Social and labor obligations 11,365 0% 9,863 0% 15%
Loss from derivative transactions 24,822 0% 22,951 0% 8%
Contractual reserve 31,767 0% 77,374 1% -59%
Profit sharing 20,633 0% 20,633 0% 0%
Dividends payable 0 0% 1,960 0% -
100%
Other obligations 4,794 0% 3,325 0% 44%
Non-current Liabilities 3,248,297 38% 3,228,993 40% 1%
Loans and financing 3,117,856 37% 3,104,806 39% 0%
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Debts with other related parties 8,400 0% 430 0% 1853
%
Debentures 5,068 0% 4,954 0% 2%
Loss from derivative transactions 93,560 1% 94,797 1% -1%
Provision for unsecured liabilities 19,239 0% 19,840 0% -3%
Income tax and social contribution - deferred 2,048 0% 2,048 0% 0%
Provision for dismantling 2,126 0% 2,118 0% 0%
Shareholders’ Equity 2,452,347 29% 2,701,138 34% -9%
Capital stock 3,731,975 44% 3,731,734 46% 0%
Capital reserve 327,618 4% 321,904 4% 2%
Equity valuation adjustments -116,962 -1% -119,067 -1% -2%
Accumulated losses -1,635,500 -
19% -1,384,971 -17% 18%
Shareholders’ equity attributable to controlling shareholders
2,307,131 27% 2,549,600 32% -10%
Interest of minority shareholders 145,216 2% 151,538 2% -4%
Current assets
Our current assets went from R$765.9 million on December 31, 2012 to R$818.0 million on March 31, 2013, representing an increase of 7%. Management believes that this increase was due mainly to the following reasons:
Cash and cash equivalents
Cash and cash equivalents went from R$519.3 million on December 31, 2012 to R$359.1 million on March 31, 2013, representing a decrease of 31%. The Company’s Management believes that this variation was mainly due to capital expenditure (CAPEX), mainly in Parnaíba I TPP, Parnaíba II TTP and Porto do Itaqui, which was partially offset by fundraising through long-term loans.
Accounts receivable
Accounts receivable went from R$21.3 million on December 31, 2012 to R$229 million on March 31, 2013, representing an increase of 973%. The Company’s Management believes that this increase was mainly due to the fact that Parnaíba I and Itaqui TPP intensified their commercial operations in the first quarter of 2013, resulting in an increase in energy sales of the Company and its subsidiaries of 133% in relation to the same period in the year 2012.
Inventories
The value of inventories went from R$142.7 million on December 31, 2012 to R$130.8 million on March 31, 2013, representing a decrease of 8%. The Company’s Management believes that this variation was mainly due to the use of coal in electricity generation process, mainly by Porto de Itaqui plant.
Taxes recoverable
Accounts receivable went from R$37.4 million on December 31, 2012 to R$61.4 million on March 31, 2013, representing an increase of 64%. The
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Company’s Management believes that this variation was mainly due to an increase in deferred tax assets relating to prepayment of income tax, social contribution, PIS and COFINS, mainly relating to Porto de Itaqui project.
Non-current assets
Our non-current assets went from R$7,237.7 million on December 31, 2012 to R$7,712.1 million on March 31, 2013, representing an increase of 6%. Management believes that this variation was mainly due to the following reasons:
Income tax and social contribution - deferred
Deferred income tax and social contribution went from R$305.5 million on December 31, 2012 to R$366.4 million on March 31, 2013, representing an increase of 20%. The Company’s Management believes that this variation was mainly due to an increase in tax assets generated by an increase in tax losses ascertained in the period.
Loans with affiliates
Loans with affiliates increased from R$134.9 million on December 31, 2012 to R$157.8 million on March 31, 2013, representing an increase of 17%. The Company’s Management believes that such variation was mainly due the creation by the Company and E.ON of the joint venture MPX E.ON Participações S.A. in May 2012, the Company ceased to consolidate, totally and proportionally, its equity interests in the following companies: UTE Sul, Porto do Açú, MPX Chile, Porto do Açú II, Seival Participações, MPX Comercializadora de Energia, MPX Solar e MPX Comercializadora de Combustível, which were transferred to such joint venture. As a result of adjustment to the rule mentioned above, the balances related to loans with subsidiaries were not eliminated, as above mentioned.
Property, plant and equipment
Property, plant and equipment values went from R$5,570.4 million on December 31, 2012 to R$5,934.0 million on March 31, 2013, representing an increase of 7%. The Company’s Management believes that this increase was mainly due to capital expenditure (CAPEX) in the construction of Thermal Power Plants - TPP Parnaíba I and Parnaíba II.
Current liabilities
Our current liabilities went from R$2,109,5 million on December 31, 2012 to R$2,829.4 million on March 31, 2013, representing an increase of 34%. Management believes that this variation was mainly due to the following reasons:
Suppliers
The amounts regarding suppliers went from R$115.3 million on December 31,
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2012 to R$302.7 million on March 31, 2013, representing an increase of 163%. Management believes that this increase was mainly due to expenses with suppliers designated to capital expenditure (CAPEX) in the construction of TPPs, especially Porto de Itaqui, Parnaíba I TPP and Parnaíba II TPP.
Loans and financing
The amounts regarding loans and financing went from R$1,820.0 million on December 31, 2012 to R$2,342,0 million on March 31, 2013, representing an increase of 29%. Management believes that this increase was mainly due to an increase in short term loans primarily taken by the Company.
Debts with other related parties
Debts with other related parties increased from R$4.0 million on December 31, 2012 to R$47.3 million on March 31, 2013, representing an increase of 1085%. The Company’s Management believes that such variation was mainly due to the adoption of new consolidation accounting rules introduced by IFRS 10.
Taxes and contributions payable
Tax and contributions payable increased from R$7.2 million on December 31, 2012 to R$39.7 million on March 31, 2013, representing an increase of 448%. The Company’ Management believes that such increase was mainly due to PIS and COFINS incurred on revenues generated from Porto de Itaqui and Parnaíba I TPP.
Contractual reserve
The amount of contractual reserves went from R$77.4 million on December 31, 2012 to R$31.8 million on March 31, 2013, representing a decrease of 59%. Management believes that this decrease was mainly due to the release of a contractual withholding to MABE (EPC) by Porto de Itaqui and MPX Pecém II.
Non-current Liabilities
Our non-current liabilities went from R$3,229.0 million on December 31, 2012 to R$3,248.3 million on March 31, 2013, representing an increase of 1%. The Company ‘Management believes that such variation was due to the fact that debts with other related parties increased from R$0.4 million on December 31, 2012 to R$8.4 million on March 31, 2013, representing an increase of 1853%. The Company’s Management believes that this variation was mainly due to the capital contribution in the amount of R$8.4 million made by PETRA, the majority shareholder of Parnaíba I TPP.
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Comparison of the Main Consolidated Balance Sheet Accounts in December 31, 2012 and December 31, 2011.
The consolidated balance sheets as of December 31, 2012 and 2011 presented below, were prepared and are presented in accordance with the accounting practices in force on December 31, 2012.
Consolidated Balance Sheets
As of December
31, 2012 AV
As of December
31, 2011 AV Var. 12/11
(in R$ thousands, except percentages)
Total Assets 9,451,180 100% 7,953,680 100% 19%
Current Assets 1,100,728 12% 1,708,592 21% -36%
Cash and cash equivalents 590,469 6% 1,442,415 18% -59%
Securities 3,441 0% 9,437 0% -64%
Accounts receivable 152,114 2% 21,898 0% 595%
Grants receivable – CCC 17,561 0% 4,828 0% 264%
Inventories 211,718 2% 85,938 1% 146%
Prepaid expenses 40,462 0% 13,908 0% 191%
Taxes recoverable 57,438 1% 37,711 0% 52%
Derivative gains 3,018 0% 19,289 0% -84%
Miscellaneous advances 20,267 0% 11,285 0% 80%
Restricted deposits 4,237 0% 61,844 1% -93%
Other credits 3 0% 39 0% -92%
Non-current Assets 8,350,452 88% 6,245,088 79% 34%
Prepaid expenses 8,705 0% 2,514 0% 246%
Restricted deposits 137,717 1% 62,471 1% 120%
Grants receivable – CCC 24,617 0% 24,617 0% 0%
Taxes recoverable 34,709 0% 90,834 1% 62%
Income tax and social contribution - deferred 456,123 5% 339,049 4% 35%
Loans with subsidiaries 359 0% - 0% n/a
Accounts receivable from other related parties 8,575 0% 8,436 0% 2%
Accounts receivable from subsidiaries 3,732 0% - 0% n/a
embedded derivatives 479 0% - 0% n/a
Investments 62,956 1% 55,742 1% 13%
Property, plant and equipment 7,362,815 78% 5,393,809 68% 37%
Intangible assets 249,665 3% 267,616 3% 7%
Total Liabilities and Shareholders’ Equity 9,451,180 100% 7,953,680 100% 19%
Current Liabilities 2,407,159 25% 1,632,130 21% 47%
Suppliers 228,638 2% 186,680 2% 22%
Loans and financing 1,915,402 20% 1,030,687 13% 86%
Debts with parent company 3,407 0% - 0% n/a
Debts with other related parties 19,057 0% 3,697 0% 415%
Debentures 111 0% 30,463 0% 100%
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Taxes and contributions payable 11,375 0% 18,261 0% 38%
Social and labor obligations 12,980 0% 18,017 0% 28%
Loss from derivative transactions 39,506 0% 86,633 1% 54%
Contractual reserve 133,935 1% 180,497 2% 26%
Profit sharing 23,900 0% 19,177 0% 25%
Dividends payable 1,960 0% 2,270 0% -14%
Other obligations 16,888 0% 55,748 1% -70%
Non-current Liabilities 4,339,446 46% 4,951,475 62% -12%
Loans and financing 4,151,947 44% 3,311,063 42% 25%
Debts with other related parties 215 0% 340 0% 37%
Debentures 4,954 0% 1,403,152 18% -100%
Embedded derivatives - 0% 62,003 1% -100%
Loss from derivative transactions 166,992 2% 156,798 2% 7%
Income tax and social contribution - deferred 10,431 0% 13,239 0% 21%
Provision for dismantling 4,197 0% 3,854 0% 9%
Other provisions 710 0% 1,026 0% 31%
Shareholders’ Equity 2,704,575 29% 1,370,075 17% 97%
Capital Stock 3,731,734 39% 2,042,014 26% 83%
Capital reserve 321,904 3% 274,625 3% 17%
Equity valuation adjustments (119,067) (1%) (71,670) (1%) 66%
Accumulated losses (1,384,971) (15%) (982,323) (12%) 41%
Shareholders’ equity attributable to controlling shareholders
2,549,600 27% 1,262,646 16% 102%
Interest of minority shareholders 154,975 2% 107,429 1% 44%
Current assets
Current assets went from R$1,708.6 million on December 31, 2011 to R$1,100.7 million on December 31, 2012, representing a decrease of 36%. Management believes that this variation was primarily due to the following factors:
Cash and cash equivalents
The amounts regarding cash and cash equivalents went from R$1,442.4 million on December 31, 2011 to R$590.5 million on December 31, 2012, representing a decrease of 59%. Management considers that this variation occurred mainly due to expenses from CAPEX investments which were partially offset by funding, via capitalization through the issue of common shares.
Accounts receivable
Accounts receivable increased from R$21.9 million on December 31, 2011 to R$152.1 million on December 31, 2012, representing a decrease of 595%. Management believes that this increase took place, mainly due to (i) the beginning of billing of electricity sales by Energia Pecém and Itaqui; and (ii) the increase in sales by MPX Comerc. de Energia.
Inventories
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Inventories increased from R$86.0 million on December 31, 2011 to R$211.7 million on December 31, 2012, representing a decrease of 146%. Management believes that this increase occurred, mainly due to the purchase of supplies for electricity generation, especially coal.
Taxes recoverable
Taxes recoverable increased from R$37.7 million on December 31, 2011, to R$57.4 million on December 31, 2012, representing an increase of 52%. Management considers that this increase occurred mainly due to the increase in tax credits regarding the prepayment of income tax, social contribution and taxes withheld.
Restricted deposits
Restricted deposits went from R$61.8 million on December 31, 2011, to R$4.2 million on December 31, 2012, representing a decrease of 93%. Management believes that this decrease occurred mainly due to the release of deposits linked to the BNDES loan after capital investments in Energia Pecém.
Non-current assets
Current assets increased from R$6,245.1 million on December 31, 2011, to R$8,350.5 million on December 31, 2012, representing an increase of 34%. Management believes that this increase was primarily due to the following factors:
Restricted deposits
Restricted deposits increased from R$62.5 million on December 31, 2011, to R$137.7 million on December 31, 2012, representing an increase of 120%. Management believes that this increase occurred, mainly, (i) by the release of the guarantees with Banco Bradesco to buy energy on the open market for Itaqui; and (ii) by hiring new loan guarantees with Citibank by ENEVA .
Taxes recoverable
Taxes recoverable went from R$90.8 million on December 31, 2011, to R$34.7 million on December 31, 2012, representing a decrease by 62%. Management considers that this decrease occurred mainly due to the offset of tax credits regarding the prepayment of income tax, social contribution and taxes withheld.
Income tax and social contribution - deferred
The amounts regarding deferred income tax and social contribution increased from R$339.0 million on December 31, 2011, to R$456.1 million on December 31, 2012, representing an increase of 35%. Management considers that this variation occurred mainly due to the increase in tax credits (tax losses and temporary differences) on investments in Energia Pecém, Pecém II, Itaqui, Porto do Açu and Comerc.de Combustíveis.
212
Property, plant and equipment
The amount of property, plant and equipment increased from R$5,393.8 million on December 31, 2011, to R$7,362.8 million on December 31, 2012, representing an increase of 37%. Management believes that this variation occurred mainly due to CAPEX Investments for construction of Thermal Power Plants (Usinas Termelétricas de Energia or UTEs).
Current liabilities
Current liabilities increased from R$1,632.1 million on December 31, 2011, to R$2,407.2 million on December 31, 2012, representing an increase of 47%. Management believes that this variation was primarily due to the following factors:
Suppliers
The amounts regarding suppliers increased from R$186.6 million on December 31, 2011, to R$228.6 million on December 31, 2012, representing an increase of 22%. Management believes that this increase occurred mainly due to expenses with suppliers for CAPEX Investments for construction of UTEs.
Loans and financing
Loans and financing increased from R$1,030.7 million on December 31, 2011 to R$1,915.4 million on December 31, 2012, representing an increase of 86%. Management believes that this increase was mainly due to (i) the increase in short-term loans taken by ENEVA ; and (ii) investments in Parnaíba I and UTE Parnaíba II.
Debentures
The amount of debentures went from R$30.5 million on in December 31, 2011, to R$0.1 million on in December 31, 2012. Management believes that this decrease was mainly due to the conversion of almost all the debentures issued into shares in ENEVA .
Contractual reserve
Contractual reserves went from R$180.5 million on December 31, 2011, to R$133.9 million on December 31, 2012, representing a decrease of 26%. Management considers that this variation was mainly due to the release of the contractual reserve to MABE (EPC) by Itaqui.
Other obligations
The amounts referring to other obligations went from R$55.7 million on December 31, 2010, to R$16.9 million on December 31, 2011, representing a reduction of 70%. Management considers that this variation was mainly due to the reduction in VAT obligation as result of the spin-off of a portion of ENEVA ’s capital regarding the investments made in MPX Colombia.
Non-current liabilities
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Non-current liabilities went from R$4,951.5 million on December 31, 2011, to R$4,339.4 million on December 31, 2012, representing a decrease of 12%. Management believes that this decrease was primarily due mainly to the following factors:
Loans and financing
Loans and financing increased from R$3,311.1 million on December 31, 2011, to R$4,151.9 million on December 31, 2012, representing an increase of 25%. Management believes that this increase was mainly due to the release of long-term credit lines for Energia Pecém, by BNDES and IDB; for Pecém II, by BNDES and BNB; and for Itaqui, by BNDES and BNB.
Debentures
The amount of debentures increased from R$1,403.1 million on in December 31, 2011, to R$5,0 million on in December 31, 2012. Management believes that this variation was mainly due to the conversion of almost all the debentures issued into shares in ENEVA .
Embedded derivatives
The variation in embedded derivatives occurred due to the conversion of almost all of the debentures into shares of ENEVA .
Shareholder’s equity
The amounts regarding consolidated shareholder’s equity went from R$1,370.1 million on December 31, 2011, to R$2,704.6 million on December 31, 2012, representing an increase of 97%. Management believes that this increase was mainly due to (i) the capital increase through issue of common shares; (ii) the capital increase through the conversion of debentures; (iii) the reduction of capital with the spin-off of MPX Colombia; and (iv) the loss recorded in the financial year ended December 31, 2012.
Comparison of the Main Consolidated Balance Sheet Accounts in December 31, 2011 and December 31, 2010.
The consolidated balance sheets as of December 31, 2011 and 2010 presented below, were prepared and are presented in accordance with the accounting practices in force on December 31, 2011.
Consolidated Balance Sheets
As of December
31, 2011 AV
As of December
31, 2010 AV Var. 11/10
(in R$ thousands, except percentages)
Total Assets 7,953,680 100% 4,821,986 100% 65%
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Current Assets 1,708,592 21% 931,961 19% 83%
Cash and cash equivalents 1,442,415 18% 304,467 6% 374%
Securities 9,437 0% 175,091 4% -95%
Accounts receivable 21,898 0% 9,846 0% 122%
Grants receivable – CCC 4,828 0% 4,190 0% 15%
Inventories 85,938 1% 7,068 0% 1116%
Prepaid expenses 13,908 0% 8,469 0% 64%
Taxes recoverable 37,711 0% 52,615 1% 28%
Derivative gains 19,289 0% - 0% -
Miscellaneous advances 11,285 0% 4,132 0% 173%
Restricted deposits 61,844 1% 365,508 8% -83%
Other credits 39 0% 575 0% -93%
Non-current Assets 6,245,088 79% 3,890,025 81% 61%
Prepaid expenses 2,514 0% 4,283 0% -41%
Restricted deposits 62,471 1% 9,170 0% 581%
Grants receivable – CCC 24,617 0% 24,617 1% 0%
Taxes recoverable 90,834 1% 18,270 0% 397%
Income tax and social contribution - deferred 339,049 4% 215,220 5% 58%
Accounts receivable with other related persons 8,436 0% 3,263 0% 159%
Other credits - 0% 3,541 0% -100%
Investments 55,742 1% 50,459 1% 10%
Property, plant and equipment 5,393,809 68% 3,472,679 71% 55%
Intangible assets 267,616 3% 88,523 2% 202%
Total Liabilities 7,953,680 100% 4,821,986 100% 65%
Current Liabilities 1,632,130 21% 675,344 14% 142%
Suppliers 186,680 2% 119,486 2% 56%
Loans and financing 1,030,687 13% 294,809 6% 250%
Debts with other related parties 3,697 0% 649 0% 470%
Debentures 30,463 0% - 0% 100%
Taxes and contributions payable 18,261 0% 5,156 0% 254%
Social and labor obligations 18,017 0% 14,369 0% 25%
Loss from derivative transactions 86,633 1% 46,164 1% 88%
Contractual reserve 180,497 2% 183,958 4% -2%
Profit sharing 19,177 0% 10,753 0% 78%
Dividends payable 2,270 0% - 0% 100%
Other obligations 55,748 1% - 0% 100%
Non-current Liabilities 4,951,475 62% 2,445,079 51% 103%
Loans and financing 3,311,063 42% 2,295,173 48% 44%
Debts with other related parties 340 0% 1,271 0% -73%
Debentures 1,403,152 18% - 0% 100%
Embedded derivatives 62,003 1% - 0% 100%
Loss from derivative transactions 156,798 2% 143,048 3% 10%
Income tax and social contribution - deferred 13,239 0% 2,048 0% 546%
Provision for dismantling 3,854 0% 3,539 0% 9%
Other provisions 1,026 0% - 0% 100%
Shareholders’ Equity 1,370,075 17% 1,701,563 34% -20%
Capital stock 2,042,014 26% 2,041,918 42% 0%
Capital reserve 274,625 3% 223,851 5% 23%
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Equity valuation adjustments (71,670) (1%) (35,400) (1%) 102%
Accumulated losses (982,323) (12%) (572,183) (12%) 72%
Shareholders’ equity attributable to controlling shareholders
1,262,646 16% 1,658,186 34% -24%
Interest of minority shareholders 107,429 1% 43,377 1% 148%
Total shareholders’ equity 1,370,075 17% 1,701,563 35% -19%
Current assets
Our current assets changed from R$932.0 million on December 31, 2010, to R$1,708.6 million on December 31, 2011, representing an increase of 83%. The Company’s Management understands that such increase occurred due to the following factors:
Cash and cash equivalents
The amounts referring to cash and cash equivalents changed from R$304.5 million on December 31, 2010, to R$1,442.4 million on December 31, 2011, representing an increase of 374%. The Company’s Management understands that such increase mainly occurred due to fundraising via issuance of debentures subscribed by BNDESPAR, Gávea Investimentos, the controlling shareholder Eike Batista and non-controlling shareholders.
Securities
The amounts referring to securities changed from R$175.1 million on December 31, 2012, to R$9.4 million on December 31, 2011, representing a decrease by 95%. The Company’s Management understands that such reduction mainly occurred due to a decrease in the amount spent on CAPEX investments.
Inventories
The amounts referring to inventories changed from R$7.1 million on December 31, 2012, to R$85.9 million on December 31, 2011, representing an increase of 1,116%. The Company’s Management understands that such increase mainly occurred due to the acquisition of inputs for generation of electrical energy, particularly coal.
Taxes recoverable
The amounts referring to taxes recoverable changed from R$52.6 million on December 31, 2012, to R$37.7 million on December 31, 2011, representing a decrease by 28%. The Company’s Management understands that such decrease mainly occurred due to the offsetting of tax credits referring to the early payment of income, social contribution and other taxes withheld.
Restricted deposits
The amounts referring to restricted deposits changed from R$365.5 million on December 31, 2012, to R$61.8 million on December 31, 2011,
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representing a decrease of 83%. The Company’s Management understands that such decrease mainly occurred due to the release of restricted deposits to BNDES loans, after capital contributions to investments in Energia Pecém and Pecém II.
Non-current assets
Our non-current assets changed from R$3,890.0 million on December 31, 2010, to R$6,245.0 million on December 31, 2011, representing an increase of 61%. The Company’s Management understands that such increase occurred due to the following factors:
Restricted deposits
The amounts referring to restricted deposits changed from R$9.2 million on December 31, 2010, to R$62.4 million on December 31, 2011, representing an increase of 581%. The Company’s Management understands that such variation mainly occurred due to (i) the increase in the debt from the BNB financing for Pecém II; and (ii) guarantee agreements with Bradesco Trianon for purchase of energy in the free market for Itaqui, Energia Pecém and Comercializadora de Energia.
Taxes recoverable
The amounts referring to taxes recoverable changed from R$18.2 million on December 31, 2010, to R$90.8 million on December 31, 2011, representing a decrease of 397%. The Company’s Management understands that such increase mainly occurred due to the increase in tax credits referring to the early payment of income, social contribution and other taxes withheld.
Deferred income and social contribution taxes
The amounts referring to deferred income and social contribution taxes changed from R$215.2 million on December 31, 2010, to R$339.0 million on December 31, 2011, representing an increase of 58%. The Company’s Management understands that such increase mainly occurred due to the increase in tax credits (tax loss and temporary differences) in investments in Energia Pecém, Pecém II, Itaqui, Porto do Açu and Comerc. de Combustíveis.
Property, plant and equipment
The amounts referring to property, plant and equipment changed from R$3,472.7 million on December 31, 2010, to R$5,393.8 million on December 31, 2011, representing an increase of 55%. The Company’s Management understands that such increase mainly occurred due to expenditures on CAPEX investments.
Intangible assets
The amounts referring to intangible assets changed from R$88.5 million on December 31, 2010, to R$267.6 million on December 31, 2011, representing an
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increase of 202%. The Company’s Management understands that such increase mainly occurred due to the acquisition, together with Bertin Group, of concessions/CCEARs provided by ANEEL.
Current liabilities
Our non-current liabilities changed from R$675.3 million on December 31, 2010, to R$1,632.1 million on December 31, 2011, representing an increase of 142%. The Company’s Management understands that such increase occurred due to the following factors:
Suppliers
The amounts referring to suppliers changed from R$119.5 million on December 31, 2010, to R$186.6 million on December 31, 2011, representing an increase of 56%. The Company’s Management understands that such variation mainly occurred due to expenditures with suppliers for CAPEX investments (building of UTEs).
Loans and financing
The amounts referring to loans and financing changed from R$294.8 million on December 31, 2010, to R$1,030.7 million on December 31, 2011, representing an increase of 250%. The Company’s Management understands that such variation mainly occurred due to the increase in short-term loans for investments in MPX Colômbia and UTE Parnaíba.
Debentures
As of December 31, 2011, the Company raised funds via issuance of debentures subscribed by BNDESPAR, Gávea Investimentos, the controlling shareholder Eike Batista and non-controlling shareholders.
Other obligations
As of December 31, 2011, the variation occurred in other obligations due to the record of VAT obligation referring to the investment in MPX Colômbia.
Non-current liabilities
Our non-current liabilities changed from R$2,445.1 million on December 31, 2010, to R$4,951.5 million on December 31, 2011, representing an increase of 103%. The Company’s Management understands that such increase occurred due to the following factors:
Loans and financing
The amounts referring to loans and financing changed from R$2,295.2 million on December 31, 2010, to R$3,311.1 million on December 31, 2011, representing an increase of 44%. The Company’s Management understands that such variation mainly occurred due to the effect of transactions in foreign currency.
Debentures
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As of December 31, 2011, the Company raised funds via issuance of debentures subscribed by BNDESPAR, Gávea Investimentos, the controlling shareholder Eike Batista and non-controlling shareholders.
Embedded derivatives
The variation in embedded derivatives occurred due to the record of fair value of bonds issued by ENEVA , according to IFRS standards.
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10.2 – Management’s comments on operating and financial result
The financial information included in this Reference Form, except when stated
otherwise, refers to the Company’s consolidated financial statements.
(a) Company’s operating results
(i) Description of any relevant revenue components
The Company’s Management understands that the basis for its revenues and,
consequently, for its operations, in the years ended December 31, 2012, 2011 and
2010, and in the quarters ended March 31, 2013, refers to the gross operating
revenue from the sale of energy that totaled R$541.6 million, R$190.4 million,
R$112.8 million and R$217.6 million, respectively.
(ii) Factors that substantially affected the operating results
According to the Company’s Management, the facts that substantially affected
their operating results may be summarized as follows:
Quarter ended March 31, 2013: The Company assessed a loss of R$257.1
million. The primary factor that substantially affected this result was that the
Company and its subsidiaries received proper authorizations from ANEEL to start
electricity generation, but since the projects for which such authorizations were
granted were not completed, the Company and its subsidiaries were required to
purchase electricity from third parties to comply with their energy supply
agreements, resulting in a material loss.
Year ended 2012: The Company assessed a loss of R$434.5 million. The primary
factors that substantially affected this result are the following: (i) appropriation of
interest incurred and costs of bonds in the amount of R$130.9 million; (ii) negative
result of R$37.7 million from non-speculative derivatives operations; and (iii)
impact on operating costs of coal plants, due to change in the commencement of
commercial operations.
Year ended 2011: The Company recorded a loss of R$408.5 million. The primary
factors that substantially affected this result are the following: (i) measurement of
the fair value of derivatives included in the issue of debentures of the Company
made in June 2011, resulting in a loss of R$62.0 million; (ii) appropriation of
interest incurred on debentures in the amount of R$50.8 million; and (iii) negative
result of R$62.2 million from non-speculative hedge transactions.
Year ended 2010: The Company assessed a loss of R$256.2 million.
(b) Variations in revenues attributable to adjustments to prices, exchange
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rates, inflation, changes in volumes and introduction of new products and
services
The Company’s Management understands that the Company’s revenue is not
directly impacted by variations in prices, exchange rates and inflation and was not
affected in the last three years for changes in volumes and introduction of new
products and services.
(c) Impact of inflation, variation in prices of the primary inputs and
products, exchange and interest rates in the Company’s operating and
financial result
In the year ended December 31, 2012, 2011 and 2010, and in the quarter ended
March 31, 2013, the consolidate net financial result totaled expenses of R$127.5
million, R$202.4 million, R$45.7 million and R$77.8 million, respectively,
especially due to interest on loans and financings, the record of hedge positions
and open mark-to-market positions.
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10.3 – Events with actual and expected relevant effects on the financial
statements
(a) Inclusion or disposal of operational segment
The Company Management informs that in the financial years ended December
31, 2010, 2011 and 2012, and in the three-month period ended March 31, 2013
no operational segment of the Company was added or disposed of.
(b) Establishment, acquisition or disposal of equity interest
(i) On March 1, 2012, CCX Brasil Participações S.A. was incorporated, with the corporate purpose of holding equity interest in other business and non-business companies, in Brazil or abroad. On May 24, 2012, the Board of Directors of ENEVA approved a partial spin-off which resulted in the incorporation of CCX Carvão da Colômbia. (Colombia Coal). The purpose of this transaction was to spin off ENEVA ´s mining assets located in Colombia.
(i) MPX E.ON Participações, established on March 20, 2012, has the business purpose of
holding shares in other business and non-business companies, in Brazil or abroad. On
May 24, 2012, ENEVA S.A. contributed R$67.9 million in the capital of MPX E.ON
Participações, via the partial transfer of its investment portfolio with shareholdings in the
subsidiaries MPX Chile Holding Ltda., Parnaíba Participações S.A., UTE MPX Sul Energia
S.A., UTE Porto do Açu Energia S.A. and UTE Porto do Açu II Energia S.A. On the same
date, ENEVA S.A. contributed R$62.0 million as premium in the subscription of new
shares. On December 12, 2012 ENEVA increased capital stock of MPX EON Participações
by R$19.3 million, via the transfer of 50% of its shares in the subsidiary Seival
Participações.
(ii) On November 8, 2012 MPX Tauá II Energia Solar Ltda. was established,
with the business purpose of implementing and exploring electrical energy projects via solar power use, including the generation and trading of electric power and availability of a generation back-up.
(iii) On May 11, 2012 UTE Parnaíba V Geração de Energia S.A. was established, with the business purpose of developing, building and operating the thermal energy project units from natural gas, and the trading of natural gas.
(iv) On May 12, 2012 Parnaíba Geração e Comercialização de Energia S.A.
was established, with the business purpose of trading, importing and exporting electrical energy, as well as the participation in the capital stock
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of other companies.
(v) On June 20th, 2012 MPX Investimentos S.A. was established, with the business purpose of holding equity interest in other business and non-business companies, as shareholder, in Brazil or abroad.
(vi) On September 10, 2012 MPX Desenvolvimentos S.A. was established, with the business purpose of developing and implementing coal gasification projects for the production of industrial gases and its liquid and gaseous byproducts, utilizing commercial technologies. On December 31, 2012 this subsidiary is reported as uncovered liability.
(vii) On March 1, 2012 UTE Parnaíba III Geração de Energia S.A. was established with the business purpose of developing, constructing and operating projects in thermal energy generation from natural gas, and the trading of natural gas, as well as the holding equity interests in other companies, whether simple or business companies, whose business purposes are similar to the Company´s. On October 8, 2012 its corporate name was changed to Parnaíba Participações S.A.
(c) Unusual events or operations
The Company management informs that there was not any unusual Company
related event or activities during the periods ended December 31, 2012, 2011 and
2010, which may have caused, or is expected to cause any relevant effect on the
financial statements or returns of the Company.
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10.4 – Significant changes in accounting practices – Qualifications and
Emphases in the Auditor´s report
The Company Management has the following comments to make on changes in
accounting practices and emphases in the report of the independent auditors:
(a) Significant changes in accounting practices
The consolidated financial statements for the year ended December 31, 2010
were the first presented in accordance with the IFRS. The Company applied the
accounting policies defined to all periods presented, which includes the balance
sheet at the transition date, defined as January 1, 2009.
To adjust the financial statements to the IFRS requirements, and to the
pronouncements, interpretations and guidelines issued by CPC, the Company
made the relevant mandatory changes required and certain optional exemptions
in relation to full retrospective application, as follows:
Optional exemptions
• Business Combination Exemption – The Company applied the business
combination described in IFRS 1 and CPC 37 and thus did not restate the
business combinations that occurred before January 1, 2009, the transition
date.
• Deemed Cost Exemption – The Company opted not to use deemed cost in
the valuation of its fixed assets, since this item, as presented pursuant to
the previous accounting practices (BR GAAP in force in 2009), already
materially met the main requirements for the recognition, valuation and
presentation of CPC 27 (IAS 16), and mainly because substantial portions
of the Company’s assets are under construction, and were purchased
recently.
Mandatory changes
• Interest of non-controlling shareholders is now part of shareholders’ equity,
separated in a specific line, as per CPC 26 and IAS 1.
• Cumulative Translation Adjustments – The Company set to zero the cumulative
translation adjustments of previous years to the transition date of January 1, 2009.
This change was applied to all subsidiaries abroad.
• The Company recognized Stock Options granted by the Controlling Shareholder,
as per CPC 10 and ICPC 05, for BRGAAP purposes, and IFRS 2 (Share-based
payment) and IFRIC 11, for IFRS purposes.
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• For BRGAAP purposes, Law No. 11941/09 extinguished the deferred asset,
allowing the maintenance of the balance accrued until December 31, 2008, which
can be amortized over up to 10 years, subject to impairment test. This is being
adopted by the Company in the individual financial statements pursuant to the
provisions of CPC 43. In accordance with the IFRS, pre-operational revenues and
expenditures should be recorded in income for the year when incurred. With the
adoption of IFRS.
• The Company valued its fixed assets based on CPC 27, ICPC 10, and IAS 16,
not identifying relevant effects as to the assessment of the useful life, residual
values and componentization of the assets. As it understands that its fixed assets
are recorded at values that are very close to their fair value, and given that they
mostly comprise fixed assets in progress and properties recently purchased, it did
not use deemed cost.
• The net effects of exchange variation on the principal of loans were reclassified
from fixed assets to accumulated losses in the consolidated balance sheet on the
date of initial adoption (January 1, 2009) and in income for the year ended
December 31, 2009, as per CPC 20 and IAS 23.
All IFRS standards and interpretations for financial instruments in force were
adopted by the Company in 2010. The main applicable ones are as follows:
• Amendment to IFRS 7 (Financial Instruments: Disclosure): The purpose of this
amendment is primarily to improve disclosure requirements. This increases the
requirements for the disclosure of fair value measurement, liquidity risk, market
risk, credit risk and any other significant risk.
• Amendment to IFRS 7 relating to Fair Value Hierarchy: This amendment
establishes the division of fair value hierarchy relating to financial instruments.
The hierarchy gives priority to unadjusted quoted prices in active markets for the
financial asset or liability, which are classified as Level 1. Fair Value of financial
instrument may be classified in three different levels, as set forth below:
. Level 1: Data from active market (unadjusted traded price), so that they can be
accessed on a daily basis, including on the day of fair value measurement.
. Level 2: Data from active market (unadjusted traded price) other than that
included in Level 1, derived from pricing model based on observable market data.
. Level 3: Data derived from pricing model based on unobservable market data.
• Amendment to CPC 38 and IAS 39 (Financial Instruments)
In such pronouncement, the procedures to identify derivative instruments
embedded in contracts were highlighted, aiming at timely recognition, control and
appropriate accounting treatment to be used, and which should be applicable to
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the Company and its subsidiaries.
Agreements with possible clauses of embedded derivative instruments or
securities were analyzed in order to mitigate potential host contracts. If found,
there is guidance regarding possible effectiveness testing and methodology for
calculation of fair value.
The Company and its subsidiaries do not hold outstanding agreements with
embedded derivatives.
In addition to the points described above, the Company has adjusted its financial
statements for disclosure purposes, and now presents the following information:
• Consolidated statement of comprehensive income, as required by CPC 26 and
IAS 1
• Earnings (losses) per share, as required in CPC 41 and IAS 33 (Earnings per
share).
• Expenses by nature, as required in CPC 26 and IAS 1 (Presentation of Financial
Statements).
• Information by segment, as required in CPC 22 and IFRS 8 (Operating
Segments).
The consolidated financial statements for the year ended December 31, 2011,
prepared under the IFRS, did not suffer any effects of changes in the accounting
practices.
There were no changes in the accounting practices used by the Company and its
subsidiaries during the years ended December 31, 2012, 2011 and 2010. The
accounting practices adopted by the Company and its subsidiaries are consistent
with those utilized abroad.
Except for the adoption of IFRS 10 and 11, whose accounting policy is described
below, quarterly information has been prepared based on the same accounting
practices used to prepare the Financial Statements as of December 31, 2012.
Therefore, this quarterly information should be read together with the Financial
Statements as of December 31, 2012
IFRS 10 establishes a single control model which applies to all entities, including
special purpose entities. The changes introduced by IFRS 10 required that
Management exercise a significant judgment to determine which entities are
controlled, and hence, required to be consolidated by a controlling company,
comparatively to the requisites that were part of IAS 27.
IFRS 11 eliminates the option of accounting for joint ventures(ECC) based on
proportional consolidation. Instead, the ECCs which fit the definition of joint
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arrangements should be recorded based on the equity method.
In compliance with IFRS 11, investments in jointly-controlled subsidiaries Porto do
Pecém Geração de Energia S.A., Porto do Pecém Transportadora de Minérios
S.A., OGMP Transporte Aéreo Ltda., Pecém Operação e Manutenção de
Unidades de Geração S.A., MABE Construção e Administração de Projetos Ltda.,
MPX Chile Holding Ltda., Seival Participações S.A., UTE MPX Sul Energia Ltda.,
Parnaíba Participações S.A., UTE Porto do Açú Energia S.A., Porto do Açú II
Energia S.A. and MPX E.ON Participações S.A. are evaluated by the equity
method in the individual and consolidated quarterly information.
(b) Significant effects of changes in accounting practices
As of January 1, 2013, the Company adopted new accounting rules for
compliance with the international accounting standards. As a result of the change
in accounting practices, the Company no longer consolidates in its financial
information all investees over which the Company, individually, has no controlling
power, namely, Porto do Pecém Geração de Energia S.A., Porto do Pecém
Transportadora de Minérios S.A., OGMP Transporte Aéreo Ltda., Pecém
Operação e Manutenção de Unidades de Geração S.A., MABE Construção e
Administração de Projetos Ltda., MPX Chile Holding Ltda., Seival Participações
S.A., UTE MPX Sul Energia Ltda., Parnaíba Participações S.A., UTE Porto do
Açú Energia S.A., Porto do Açú II Energia S.A. and MPX E.ON Participações S.A.
In addition, the Company began to recognize recognizes income from the above-
mentioned companies at the equity method. Thus, the Company’s income
account at the equity method gained relevance in the context of income of the
Company as a whole, which would not occur at the previously adopted accounting
practices.
The Company presents below the table showing the amendments made to the comparative balances restated in the quarterly information (ITR) for the consolidated balance sheet as of December 31, 2012 and the three-month period ended March 31, 2012:
Consolidated 12/31/2012
Originally disclosed Adjustments Restated
(in R$ thousands) Assets Current Assets
Cash and cash equivalents 590,469 (71,192) 519,277 Securities 3,441 - 3,441 Accounts receivable 152,114 (130,769) 21,345 Subsidies receivable – Fuel Consumption account 17,561 - 17,561 Inventories 211,718 (69,031) 142,687 Prepaid expenses 40,462 (21,111) 19,351 Tax recoverable 57,438 (20,028) 37,410 Gains on Derivatives 3,018 - 3,018 Miscellaneous advances 20,267 (18,484) 1,783
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Restricted deposits 4,237 (4,202) 35 Other credits 3 (3) -
1,100,728 (334,820) 765,908
Non-current assets
Prepaid expenses 8,705 (211) 8,494 Restricted deposits 137,717 (2,069) 135,648 Subsidies receivable – Fuel Consumption account 24,617 - 24,617 Tax recoverable 34,709 (10,675) 24,034 Income and social contribution taxes - deferred 456,123 (150,575) 305,548 Loans to affiliates 359 134,567 134,926 Accounts receivable from other related persons 8,575 (7,441) 1,134 Accounts receivable from affiliates 3,732 3,061 6,793 Advance for future capital increase in affiliates - 12,425 12,425 Embedded derivatives 479 - 479
675,016 (20,918) 654,098
Investments 62,956 770,999 833,955 Property, plant and equipment 7,362,815 (1,792,416) 5,570,399 Intangible assets 249,665 (34,429) 215,236
9,451,180 (1,411,584) 8,039,596
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Consolidated 12/31/2012
Originally disclosed Adjustments Restated
(in R$ thousands) Liabilities Current Liabilities
Suppliers 228,638 (113,377) 115,261 Loans and Financing 1,915,402 (95,428) 1,819,974 Owing to affiliates - 26,783 26,783 Owing to parent company 3,407 (3,407) - Owing to other related parties 19,057 (15,068) 3,989 Debentures 111 - 111 Taxes and contributions payable 11,375 (4,134) 7,241 Social and labor liabilities 12,980 (3,117) 9,863 Losses on derivatives transactions 39,506 (16,555) 22,951 Contractual reserve 133,935 (56,561) 77,374 Profit sharing 23,900 (3,267) 20,633 Dividends payable 1,960 - 1,960 Other obligations 16,888 (13,563) 3,325
2,407,159 (297,694) 2,109,465
Non-current liabilities
Loans and financing 4,151,947 (1,047,141) 3,104,806 Debts with other related parties 215 215 430 Debentures 4,954 - 4,954 Losses on derivatives transactions 166,992 (72,195) 94,797 Provision for uncovered liabilities - 19,840 19,840 Income and social contribution taxes - deferred 10,431 (8,383) 2,048 Provision for decommissioning 4,197 (2,079) 2,118 Other provisions 710 (710) -
4,339,446 (1,110,453) 3,228,993
Shareholders’ equity
Capital stock 3,731,734 - 3,731,734 Capital Reserve 321,904 - 321,904 Adjustments to equity valuation (119,067) - (119,067) Accumulated loss (1,384,971) - (1,384,971)
Shareholders’ equity attributable to controlling shareholders 2,549,600 - 2,549,600 Participation of non-controlling shareholders 154,975 (3,437) 151,538
Total shareholders’ equity 2,704,575 (3,437) 2,701,138
9,451,180 (1,411,584) 8,039,596
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Statement of income
Consolidated 3/31/2012
Originally disclosed Adjustments Restated
(in R$ thousands) Revenues from sale of goods and/or services 75,669 - 75,669 Cost of goods and/or services sold (81,809) 12 (81,797)
Gross income (6,140) 12 (6,128)
Operating expenses/revenues (76,636) (4,583) (81,219)
General and administrative (64,332) 2,459 (61,873) Personnel and managers (27,440) 641 (26,799) Other expenses (5,024) 854 (4,170) Third party services (26,301) 685 (25,616) Depreciation and amortization (1,304) 210 (1,094) Leases and rentals (4,263) 69 (4,194)
Other operating revenues 575 (29) 546 Other operating expenses (482) 16 (466)
Losses on disposal of assets (482) 16 (466) Equity pick-up (12,397) (7,029) (19,426)
-
Income before financial income and taxes (82,776) (4,571) (87,347) -
Financial income (11,373) 5,171 (6,202)
Financial revenues 180,337 (139,639) 40,698
Positive currency variation 47,738 (29,052) 18,686 Fair value of debentures 13,000 - 13,000 Financial investments 28,137 (37) 28,100 Derivative financial instruments 89,219 (110,381) (21,162) Other financial revenues 2,243 (169) 2,074
Financial expenses (191,710) 144,810 (46,900)
Negative currency variations (25,948) 20,587 (5,361) Derivative financial instruments (110,598) 124,005 13,407 Interest/costs of debentures (29,035) - (29,035) Other financial expenses (26,129) 218 (25,911)
Income before income taxes (94,149) 600 (93,549)
Income and social contribution taxes on earnings 16,389 (600) 15,789
Current (838) - (838) Deferred 17,227 (600) 16,627
Loss for the year (77,760) - (77,760)
Attributed to partners of the parent company (77,481) - (77,481)
Attributed to non-controlling partners (279) - (279)
Loss per share - - - Basic and diluted loss per share (in R$) (0.56870) - (0.56870)
(c) Qualifications and emphases in the auditor´s report
In compliance with the standards contained in article 25 of CVM Instruction No.
480, of December 7, 2009, as amended, Management declares that it has
reviewed, discussed and agreed with the opinions stated in the independent
Auditor´s report, regarding the Financial Statements (Parent Company and
Consolidated) for the period ended December 31, 2010, 2011 and 2012.
(2010)
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Emphasis
As described in note 3, the individual financial statements were prepared
according to the accounting practices adopted in Brazil. In the case of ENEVA
S.A. these practices differ from the IFRS applicable to separate financial
statements only as regards valuation of investments in subsidiaries, affiliates and
joint ventures by the equity method, whilst for the purposes of the IFRS they
would be valued at cost or fair value; and as regards maintenance of the deferred
asset balance existing as of December 31 2008, which is being amortized only for
companies in operating phase.
Financial statements were presented taking into account the regular business
continuity of the Company and its subsidiaries. As mentioned in note 13, the
subsidiaries Porto do Pecém Geração de Energia S.A., MPX Pecém II Geração
de Energia S.A., UTE Porto do Itaqui Geração de Energia Ltda., UTE Porto do
Açu Energia S.A., Seival Sul Mineração Ltda., UTE MPX Sul Energia Ltda., MPX
Energia de Chile Ltda., MPX Áustria GmbH, MPX Viena GmbH, MPX Colombia
S.A., MPX Tauá Energia Solar Ltda., Porto do Pecém Transportadora de Minérios
S.A., MPX Comercializadora de Combustíveis Ltda., Termopantanal
Participações Ltda., Termopantanal Ltda. and Nova-Sistemas de Energia Ltda.
The recovery of values recorded in non-current assets depend on the success of
future operations of the Company and its subsidiaries, and the subsidiaries
depend on financial support of shareholders and/or third party funds until their
operations are profitable. Lack of said financial funds will raise serious doubts as
to the continuity of the Company and its subsidiaries. Management’s plans related
to the operating activities are described in note 12.
The Company’s management agrees with the auditor’s emphasis and reiterates
its understanding that the projects described in these financial statements are
profitable and will remunerate the shareholders for the investments made.
(2011)
Emphasis
As described in note 3, the individual financial statements were prepared
according to the accounting practices adopted in Brazil. In the case of ENEVA
S.A. these practices differ from the IFRS applicable to separate financial
statements only as regards valuation of investments in subsidiaries, affiliates and
joint ventures by the equity method, whilst for the purposes of the IFRS they
would be valued at cost or fair value; and as regards maintenance of the deferred
asset balance existing as of December 31 2008. Our opinion is not qualified as a
231
result of this matter.
As mentioned in note 1, the subsidiaries Porto do Pecém Geração de Energia
S.A., MPX Energia Pecém I Geração de Energia S.A., UTE Porto do Itaqui
Geração de Energia S.A., UTE Porto do Açú Energia S.A., Seival Sul Mineração
Ltda., UTE MPX Sul Energia Ltda., MPX Viena GmbH, MPX Àustria GmbH, MPX
Colômbia S.A., Porto do Pecém Transportadora de Minérios S.A., MPX
Comercializadora de Combustíveis Ltda., Termopantanal Ltda., Nova-Sistemas
de Energia Ltda., UTE Parnaíba Geração de Energia S.A., Pecém Operação e
Manutenção de Unidades de Geração Elétrica S.A., Kebiny S.A., CGX Castilla
Generación de Energia Ltda., Usina Termelétrica Seival Ltda. and UTE Parnaíba
II Geração de Energia S.A. are in pre-operating phase. The recovery of values
recorded in non-current assets depend on the success of future operations of the
Company and its subsidiaries, affiliated and joint ventures, and these depend on
financial support of the shareholders and/or third party funds until their operations
are profitable. Management’s plans for the Company and its subsidiaries related
to operating activities are described in notes 1 and 13.
The Company’s management agrees with the auditor’s emphasis and reiterates
its understanding that the projects described in these financial statements are
profitable and will remunerate the shareholders for the investments made.
(2012)
Emphasis
As described in note 3, the individual financial statements were prepared
according to the accounting practices adopted in Brazil. In the case of ENEVA
S.A. these practices differ from the IFRS applicable to separate financial
statements only as regards valuation of investments in subsidiaries, affiliates and
joint ventures by the equity method, whilst for the purposes of the IFRS they
would be valued at cost or fair value; and as regards maintenance of the deferred
asset balance existing as of December 31 2008, which is being amortized. Our
opinion is not qualified as a result of this matter.
A relevant part of the Company, its subsidiaries and joint ventures are in pre-
operating phase, and the business continuity and recovery of values recorded in
non-current assets depend on the success of future operations, as well as the
shareholder´s financial support and/or third party funds until operations are
profitable. Management’s plans related to the operating activities are described in
notes 1 and 12. The financial statements were prepared considering the regular
business continuity of the Company, as well as of its affiliates and joint ventures.
232
Our opinion is not qualified as a result of this matter.
The Company’s management agrees with the auditor’s emphasis and reiterates
its understanding that the projects described in these financial statements are
profitable and will remunerate the shareholders for the investments made.
(03/2013)
Emphasis
The interim financial statements were prepared taking into account the normal
course of business of the Company and its subsidiaries, including those
mentioned in Note 1, which are in pre-operational phase. The continuity of the
business of the Company and its subsidiaries, and the recovery of the amounts
recorded in non-current assets depend on the success of future operations, as
well as on the financial support from shareholders and/or third-party funds, until
our operations are able to generate the funds needed for the maintenance of the
Company. Management’s plans regarding the Company’s operational activities
are described in Notes 1 and 12. Our opinion has not been changed due to this
issue.
Restatement of corresponding amounts
As mentioned in Note 5, due to the changes occurred in our accounting policy as
a result of adoption of CPC 19 (R2) and IFRS 11 - Joint Arrangements, the
corresponding individual and consolidated amounts regarding the balance sheet
for the year ended December 31, 2012, and the relevant interim financial
information regarding the statement of income, the statement of comprehensive
income, changes in shareholders’ equity, statement of cash flows and statement
of added value (supplementary information) for the quarter ended March 31,
2012, which are presented for comparison purposes, were adjusted and are being
restated as provided for in CPC 23 and IAS 8 - Accounting Policies, Changes in
Accounting Estimates and Erros); and CPC 26(R1) and IAS 1- Presentation of
Financial Statements). Our conclusion did not include changes regarding this
subject.
233
10.5 – Management´s comments on Critical Accounting Policies
The Company’s management clarifies that the critical accounting polices applied
by the Company are described below.
Use of estimates and judgments.
Preparation of individual and consolidated financial statements in accordance with
IFRS and CPC standards requires Management to make judgments, estimates
and assumptions that affect the application of accounting policies and the
reported values of assets, liabilities, income and expenses. Actual future results
may differ from these estimates.
Estimates and assumptions are revised on a continuous basis. Revisions for
accounting estimates are recognized in the year in which the estimates are
revised and in any future years affected.
The information on assumptions and estimates that may result in adjustments
within the next financial year are included below:
Financial Instruments i. Non-derivative financial assets
The Company and its subsidiaries initially recognize loans, receivables and
deposits on their original date. All other financial assets (including assets at fair
value through income) are initially recorded on the negotiation date on which the
Company and its subsidiaries become part of the instrument’s contractual
provisions.
The Company and its subsidiaries do not recognize a financial asset when the
contractual rights to the cash flow of the asset expire or when the Company and
its subsidiaries transfer the rights to receiving the contractual cash flow over a
financial asset in a transaction in which essentially all the risks and benefits of
owning the financial asset are transferred. Any interest that is created or held by
the Company and its subsidiaries in the financial assets are recognized as an
individual asset or liability.
The financial assets and liabilities are offset and the net value presented in the
balance sheet when the Company and its subsidiaries have the legal right to
offset the values and intend to settle them on a net basis or realize the asset and
settle the liability simultaneously.
The Company and its subsidiaries classify non-derivative financial assets in the
following categories: financial assets at fair value through income, investments
234
held to maturity, loans and receivables and financial assets available for sale.
Financial assets at fair value through income
A financial asset is classified at fair value through income in case it is held for
trading or is designated as such at the time of the initial recording. Financial
assets are recorded at fair value through income if the Company and/or its
subsidiaries manage such investments and make buying or selling decisions
based on their fair values according to documented risk management, and the
Company´s and its subsidiaries´ investment strategy. The transaction costs are
recorded in income when incurred. Financial assets recorded at fair value through
income are measured at fair value, and changes in the fair value of these assets,
which take into consideration any gain on dividends, are recorded in income for
the period.
Financial assets at fair value through income comprise Cash and cash
equivalents, and equity instruments which otherwise would be classified as
available for sale.
Financial assets held to maturity
In case the Company and its subsidiaries intend and are capable of holding the
debt instruments until maturity, then such financial assets are classified as held to
maturity. The investments held to maturity are initially recognized at fair value plus
any directly attributable transaction costs. After initial recognition, investments
held to maturity are measured at the amortized cost by the effective interest
method, less any losses for impairment.
Financial assets held to maturity are composed of debentures.
Loans and receivables
Loans and receivable are financial assets with fixed or determinable payments
which are not quoted in the active market. Such assets are initially recognized at
fair value plus any attributable transaction costs. After initial recognition, loans and
receivables are measured at amortization cost by the effective interest method,
less any losses for impairment.
Receivable are comprised of trade accounts receivable, subsidies receivable,
CCC, restricted deposits and related assets.
ii. Non-derivative financial liabilities
The Company and its subsidiaries recognize debt securities issued and
235
subordinate liabilities initially on the date they are created. All the other financial
liabilities (including liabilities at fair value through income) are recorded initially on
the date of negotiation on which the Company and its subsidiaries become part of
the instrument’s contractual provisions. The Company and its subsidiaries write-off
a financial asset when they have their contractual obligations removed, cancelled
or due.
The Company and its subsidiaries classify non-derivative financial liabilities in the
category of other financial liabilities. Such financial liabilities are recorded initially
at fair value plus any attributable transaction costs. After initial recognition, these
financial liabilities are measured at amortized cost by the effective interest
method.
The Company and its subsidiaries have the following non-derivative financial
liabilities: loans and financing, suppliers, accounts payable with related parties
and contractual withholdings.
iii. Derivative financial instruments, including hedge accounting
The Company and its subsidiaries hold financial hedge derivative instruments to
protect its exposure to foreign currency risk and interest rate variation. Embedded
derivatives are separated from the main contracts and recorded individually in
case the economic characteristics and risks of the main contract and the
embedded derivative are not intrinsically related, or an individual instrument with
the same conditions of the embedded derivative meets the definition of derivative
and the combined instrument is not measured at fair value through income.
At the time of initial designation of hedge, the Company and its subsidiaries
formally document the relationship between the hedge instrument and the hedged
items, including the risk management objectives and the hedge transaction
strategy, together with the methods that will be used to evaluate the effectiveness
of the hedge relationship. The Company and its subsidiaries assess, both at the
beginning of the relationship as well as on an ongoing basis, whether there is any
expectation that the hedge instruments are “highly effective” in offsetting the
variations in fair value or the cash flow of the respective hedged items during the
period for which the hedge is designated. For a cash flow hedge of an expected
transaction, the transaction must have a highly predictable occurrence and should
present an exposure to cash flow variations that could affect the final reported net
income.
Property, plant and equipment
1) Recognition and measurement
236
Property, plant and equipment items are measured at historical acquisition or
construction cost, less accumulated depreciation and impairment.
Cost includes expenditures that are directly attributable to the acquisition of an
asset. The cost of assets built by the company itself includes:
The cost of materials and direct labor;
Any other costs to place the asset in the necessary location and conditions
so that it is capable of operating as expected by management;
The costs to disassemble the asset and to restore the location where the
assets are located; and
Costs of loans on qualifiable assets.
The cost of a property, plant and equipment item may include the reclassification
from other comprehensive income of qualifiable cash flow hedges in connection
with the purchase of property, plant and equipment in foreign currency. Software
purchased that integrates the functionality of an equipment item is capitalized as
part of that equipment.
When parts of a property, plant and equipment item have different useful lives,
they are recorded as individual items (main components) of property, plant and
equipment.
Gains and losses in the disposal of a property, plant and equipment item
(determined by the difference between funds stemming from disposal and the
book value of the item), are recorded in other operating revenues/ expenses in
income.
2) Subsequent costs
Subsequent costs are capitalized to the extent that it is probable that future
benefits associated with the costs will inure to the Group. Maintenance costs and
recurrent repairs are recorded in income.
3) Depreciation
Property, plant and equipment items are depreciated by the straight-line method in
income for the period based on the estimated economic useful life of each
component. Leased items are depreciated by the lesser period between the
estimated useful life of the item and the contractual term, unless it is certain that
the Company will obtain ownership of the good at the end of the lease. Land lots
are not depreciated.
Property, plant and equipment items are depreciated as from the date they are
237
installed and are available for use, or in case of assets built internally, as from the
day the construction is complete and the asset is available for use.
Intangible assets and goodwill
Intangible assets comprised items acquired from third parties, and are measured
at the total acquisition cost, less amortization expenses. Goodwill due to future
expected profitability is not amortized and is tested annually for impairment, being
recorded as intangible assets in the consolidated financial statements and in
investments in the parent company’s individual financial statement.
1) Goodwill
The goodwill resulting from the acquisition of subsidiaries is included in intangible
assets in the consolidated financial statements.
2) Other intangible assets Other intangible assets that are acquired by the Company and its subsidiaries and
that have a finite useful life are measured at cost, less accumulated amortization
and impairment losses, when applicable.
3) Amortization
Except for non amortized goodwill, amortization is recorded in income by the
straight-line method over the estimated useful life of the intangible assets, as from
the date these are available for use.
Impairment
(i) Financial assets (including receivables)
A financial asset not measured at fair value through income is valued on each
presentation date to assess whether there is objective evidence of impairment. An
asset is impaired if objective evidence indicates that a loss event occurred after
the initial recognition of the asset, and that such loss event had a negative effect
on projected cash flows that can be estimated in a reliable manner.
The objective evidence of impairment of financial assets (including equity
securities) may include non-payment or late payment by the debtor, the
restructuring of the amount due to the Company and its subsidiaries on conditions
that the Company and its subsidiaries would not consider in other transactions,
indications that the debtor or issuer will file for bankruptcy, or the termination of an
active market for a security. In addition, for equity assets, a significant or long-
lasting decline in its fair value below its cost is objective evidence of impairment.
Financial assets measured at amortized cost
238
The Company and its subsidiaries consider evidence of impairment for
receivables at the individual and collective level. All significant individually
receivables are tested for impairment. All significant individually receivable
identified as impaired are then valued collectively for impairment that has
occurred, but not yet identified. Individually significant assets are valued
collectively for impairment by grouping of these securities with similar risk
characteristics.
Upon assessing impairment collectively, the Company utilizes historical trends
regarding probability of default, recovery terms and impairment amounts incurred,
adjusted to reflect management’s judgment of the assumptions if the current
economic and credit conditions are such that real losses will probably be greater
or less than those suggested by the historical trends.
Impairment of a financial asset measured at amortized cost is calculated as the
difference between the book value and the present value of future estimated cash
flow, discounted at the asset´s original effective interest rate. Losses are recorded
in income and reflected in a provision account against receivables or assets held
to maturity. The interest over the impaired asset is still recorded. When a
subsequent event indicates a reversal of impairment, the decrease in impairment
is reversed and recorded in income.
The Company´s management has not identified any evidence of impairment on
December 31, 2012.
(ii) Non-financial assets
The book values of the non-financial assets of the Company and its subsidiaries,
except the inventories and deferred income tax and social contribution, are
reviewed at each presentation date to assess whether there is any indication of
impairment. If such indication occurs, then the recoverable value of the asset is
estimated. In case of goodwill and intangible assets with undefined useful life, the
recoverable value is estimated every year.
The recoverable value of an asset or cash generating unities the greater of value
in use and fair value less selling expenses. When assessing value in use, the
future estimated cash flow is discounted to its present value via a discount rate
before taxes that reflects the ongoing market conditions for the period of capital
recoverability and the asset specific risks. For the purpose of impairment testing,
assets that cannot be tested individually are grouped together in the smallest
asset group that generates a continuous useful cash inflow, such assets being for
the most part independent of the cash flows from other assets or group of assets
(the “cash generating unit or CGU”). For the purpose of testing impairment of
goodwill, the goodwill amount recorded in a business combination is allocated to
239
the CGU or group of CGUs for which the benefit of combination synergy is
expected. This allocation reflects the lowest level in which goodwill is monitored
for internal purposes, and is not greater than an operating segment determined
according to IFRS 8 and the CPC 22.
The corporate assets of the Company and its subsidiaries do not generate cash
inflow individually. In case there is an indication that a corporate asset is impaired,
then the recoverable value is allocated to the CGU or group of CGUs to which the
corporate asset belongs in a consistent and reasonable base.
An impairment loss is recorded in case the book value of an asset or its CGU
exceeds its estimated recoverable value. Impairment losses are recognized in
income. Impairment losses related to the CGUs are allocated initially to reduce
the book value of any goodwill allocated to the CGUs, and then, if there a loss still
remains, to reduce the book value of the other assets within the CGU or group of
CGUs on a pro rata base.
An impairment loss related to goodwill is not reversed. As for other assets,
impairment losses are reversed only when the book value of the asset does not
exceed the book value that would have been determined, net of depreciation and
amortization, in case the impairment loss had not been recorded.
Share-based payment
The fair value of share-based benefits payment as of the date of granting is
recorded as personnel expenses, with the corresponding increase in
shareholders’ equity, for the year in which the employees unconditionally acquire
the right to the benefits. The amount recorded as expense is adjusted to reflect
the number of shares for which it is expected that service conditions and non-
market acquisition conditions will be met in such a manner that the value finally
recorded as expense is based on the number of shares that actually meet service
conditions and non-market acquisition conditions on the date when payment rights
vest (vesting date). For non-vested share-based benefits, the fair value as of the
date of granting of share-based payment is measured to reflect such conditions,
and there is no change for differences between expected and actual benefits.
Provisions A provision is recorded in the balance sheet when a company has current legal or
constituted obligations as a result of a past event, and it is probable that an
outflow of economic funds will be required to settled the obligation. Provisions are
recorded based on the best estimates of the risk involved.
Income and social contribution taxes Deferred income and social contribution taxes for the current year, for companies
240
opting for the taxable income regime, are calculated at the rate of 15% plus 10%
on the annual taxable income exceeding R$240 for income tax and 9% on taxable
income for social contribution tax, and consider the offsetting of tax losses and
negative basis of social contribution tax limited to 30% of taxable income.
Deferred income and social contribution taxes are recorded to reflect future tax
effects attributable to temporary differences between the tax basis of assets and
liabilities and their respective book value.
Income and social contribution tax expenses include current and deferred income
taxes. Current and deferred income taxes are recognized in income, except for
deferred income tax on hedge accounting impacts, which is recorded as equity
valuation adjustment, directly in shareholders’ equity.
Deferred tax assets and liabilities are offset if there is a legal right to offset current
tax liabilities and assets, and these relate to income taxes assessed by the same
tax authority in the accounting records of the same entity subject to taxation.
A deferred income and social contribution tax asset is recognized for tax losses,
tax credits and unused deductible temporary differences not used when it is
probable that future taxable profits will be available against which the deductible
temporary differences may be used
Deferred income and social contribution taxes are reviewed at every reporting
date and reduced to the extent that their realization is no longer probable.
241
10.6 – Internal controls related to the preparation of financial statements –
Level of efficiency and deficiency and recommendations included in the
auditor’s report
(a) Level of efficiency of such controls indicating occasional
imperfections and measures adopted to correct them
The Company’s Management believes in the efficiency of internal procedures and
controls adopted to ensure the quality, accuracy and reliability of the Company’s
financial statements. For this reason, the Company’s financial statements properly
show the result from its operations and its equity and financial condition as of the
respective dates. Additionally, Management did not identify any types of
imperfections that may compromise the Company’s financial statements.
(b) Deficiencies and recommendations on internal controls set forth in
the independent auditor’s report
Management understands that the internal control reports issued by the
Company’s independent auditors, with respect to the years ended December 31,
2012, 2011, and 2010, do not indicate any material deficiencies in the internal
procedures and controls used to prepare the Company’s financial statements.
242
10.7 - Management’s comments on the use of proceeds from public
offerings and deviations, if any
(a) How proceeds from the public offering were used
The Company Management states that, in June 15, 2011, the Company issued
21,735,744 debentures, at R$63.00 each, totaling R$1.376 billion. In the years
ended December 31, 2011, 2012, and in the current year, the proceeds from the
issuance of debentures were used to:
reinforce the Company’s cash; and
support the contributions required for investments in the development of the
Company’s ventures.
(b) Material deviations between the effective use of proceeds and
proposals disclosed in the memorandums of the respective distribution
Management informs that, in the past three years and in the current year, there
were no deviations between the use of proceeds and proposals set forth in the
memorandums.
(c) In the event of deviations, reasons for such deviations
Management informs that, in the past three years and in the current year, there
were no deviations between the use of proceeds and the proposals set forth in the
memorandums.
243
10.8 – Management’s comments on off-balance sheet items
(a) Off-balance-sheet items directly or indirectly held by the issuer
Management informs that the Company holds no off-balance sheet items.
i. Lease and operational lease of assets and liabilities
This is not applicable given that the Company has no off-balance sheet items.
ii. Written-off receivables portfolios on which the Company maintains risks
and responsibilities, and the relevant liabilities.
Not applicable, given that the Company has no off-balance sheet items.
iii. Agreements on future purchase and sale of products and services
Not applicable, given that the Company has no off-balance sheet items.
iv. Building agreements whose work has not been completed
Not applicable, given that the Company has no off-balance sheet items.
v. Agreements on future financing receivables
Not applicable, given that the Company has no off-balance sheet items.
(b) Other off-balance sheet items
Management informs that there are no other off-balance sheet items.
244
10.9 – Management’s comments on relevant off-balance sheet items
(a) How such items change or may change revenues, expenses,
operating income, financial expenses or other items recorded in the issuer’s
financial statements
Management informs that the Company holds no off-balance sheet items.
(b) Nature and purpose of operation
Management informs that the Company holds no off-balance sheet items.
(c) Nature and amount of obligations assumed and rights generated in
favor of the issuer due to the transaction
Management informs that the Company holds no off-balance sheet items.
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10.10 – Management’s comments on business plan
(a) Investments
(i) Quantitative and qualitative description of current and future
investments
The Company Management states that, by the end of 2012, the Company had
seven projects on final stages of implementation: Energia Pecém, UTE Itaqui,
Pecém II and Parnaíba I, II, III and IV, which are described below.
Energia Pecém
The total investment until the end of 2012, based on the financial information of
2012, is of R$852.9 million.Pecém II
The total investment until the end of 2012, based on the financial information of
2012, is of R$1,623.2 million.Itaqui
The total investment until the end of 2012, based on the financial information of
2012, is of R$2,501.0 million.Parnaíba I
The total investment until the end of 2012, based on the financial information of
2012, is of R$1,066.5 million.Parnaíba II
The total investment until the end of 2012, based on the financial information of 2012, is of R$488.7 million.
(ii) Investment financing sources
Energia Pecém
The Company Management states that, in July 2009, two long-term financing
facilities were contracted for the project with the Brazilian Social and Economic
Development Bank - BNDES and the Inter-American Development Bank – IDB.
The table below summarizes the conditions and stages of the financing contracted
for the project:
Amount
disbursed(1)
% of
disbursement
Total amount (1)
Term (years) Grace period Cost
BNDES R$1,402 MM 99% R$1,410 MM 17 Jul/12 (interest +
principal)
TJLP + 2.77% p.a.
BID (A + B
loan)(2)
R$555 MM 98% R$566 MM 13 to 17 Jul/12 (principal) LIBOR + 3-3.5%
p.a. c/ step-ups
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Total R$1,957 MM(3)
99% R$1,976 MM - - -
(1) Amounts in nominal R$.
(2) The debt in US$ is hedged at a spot rate of 1.81 R$/US$.
(3) Amounts disbursed until December 31, 2012.
The Company Management states that, considering the total amount financed by
the BNDES and IDB and the investment required to implement the venture, the
capital / debt ratio of the project will be nearly 25% / 75%.
Pecém II
The Company Management states that, in September 2010, a long-term financing
facility was contracted for the project with the Brazilian Social and Economic
Development Bank – BNDES. To supplement the BNDES financing, MPX Pecém
II Geração de Energia S.A. contracted a loan with BNB with funds from the FNE,
in January 2011. The table below summarizes the conditions and stages of the
financing contracted for the project:
Amount
disbursed (1)
% of
disbursement
Total amount (1)
Term (years) Grace period Cost
Direct BNDES /
TJLP
R$598 MM 96% R$625 MM 17 Jul/13 (interest +
principal)
TJLP + 2.18% p.a.
Direct BNDES /
IPCA
R$110 MM 100% R$110 MM 17 Jul/13 (interest +
principal)
IPCA + 9.8% p.a.
Social BNDES R$1.2 MM 60% R$2 MM 9 Jul/13 (interest +
principal)
TJLP
BNB (FNE) R$235 MM 94% R$250 MM 17 Jul/13 (principal) 8.5% p.a.
Total R$944 MM (2)
89% R$987 MM - - -
(1) Amounts in nominal R$.
(2) Amounts disbursed until December 31, 2012.
Itaqui
The Company Management states that, in December 2009, two long-term
financing facilities were contracted for the project with the Brazilian Social and
Economic Development Bank - BNDES and Banco do Nordeste – BNB The
BNDES loan has a direct and indirect credit line, with Banco Bradesco and Banco
Votorantim acting as the onlending banks. Considering the total amount financed
by the BNDES, BNB, Bradesco and Votorantim and the investment required to
implement the venture, the capital / debt ratio of the project will be nearly 25% /
75%.
The table below summarizes the conditions and stages of the financing contracted
for the project:
Amount
disbursed (1)
% of
disbursement
Total amount (1)
Term (years) Grace period Cost
247
Direct BNDES R$795 MM 99% R$797 MM 17 Jul/12 (interest +
principal)
TJLP + 2.78% p.a.
Indirect BNDES R$241 MM 100% R$241 MM 17 Jul/12 (interest +
principal)
IPCA + 12.1% p.a.
($100 MM) / TJLP
+ 4.5-5.0% p.a.
($141 MM)
BNB R$203 MM 100% R$203 MM 17 Jul/12 (principal) 8.5% p.a.
Total R$1,239 MM (2)
99% R$1,241 MM -- - -
(1) Amounts in nominal R$.
(2) Amounts disbursed until December 31, 2012.
Parnaíba I
The Company Management states that, in December 2012, a long-term financing
facility was contracted for the project with the Brazilian Social and Economic
Development Bank – BNDES. The table below summarizes the conditions and
stage of the debt contracted as of December 31, 2012:
Amount
disbursed (1)
% of disburseme
nt Total amount
(1) Term (years) Grace period Cost
Direct BNDES TJLP
R$496 MM 74% R$671 MM 14 Jul/13
(interest+principal)
TJLP + 1.88% p.a.
Direct BNDES / IPCA
R$204 MM 100% R$204 MM 13 Jul/14
(interest+principal)
IPCA + 4.78% p.a.
Social BNDES - 100% R$12 MM 14 Jul/13
(interest+principal)
TJLP
Total R$700 MM (2)
100% R$887 MM -- -
(1) Amounts in nominal R$.
(2) Amounts disbursed until December 31, 2012.
Parnaíba II
The Company Management states that, between March and May 2012, a short-
term debt (bridge loan) was contracted with HSBC, Itaú BBA and CEF. This
contracting aims to cover the financial obligations of the venture, in accordance
with the shareholder’s leveraging expectation, until the closing of the long-term
debt scheduled for the third quarter of 2013. The following table summarizes the
conditions and stage of the debt contracted as of December 31, 2012:
Amount disbursed
(1)
% of disbursement
Total amount (1)
Maturity Cost
HSBC R$125 MM 100% R$125 MM Sep. 30, 2013 CDI + 3% p.a.
Itaú BBA R$100 MM 100% R$100 MM Sep. 30, 2013 CDI + 3% p.a.
CEF R$325 MM 100% R$325 MM Sep. 30, 2013 CDI + 3% p.a.
To contract - 0% R$195 MM - -
Total R$550 MM (2)
74% R$745 MM -
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(1) Amounts in nominal R$.
(2) Amounts disbursed until December 31, 2012.
(iii) Material current and expected divestiture
The Company Management states that no capital divestiture has been made for
the last three financial years ended December 31, 2012, 2011 and 2010, as well
as there is no capital divestiture in progress.
(b) Provided that it has already been disclosed, indicate the acquisition
of plants, equipment, patents and other assets that may significantly
influence the Company’s production capacity
UTE Parnaíba Geração de Energia S.A.
The Company Management states that, in September 2011, after the approval by ANEEL, ENEVA S.A. entered into a Concession Purchase Agreement with Grupo Bertin Energia e Participações S.A., valid for 15 years, for the acquisition of concessions granted by ANEEL to UTEs MC2 João Neiva and MC2 Joinville (subsidiaries of Bertin Energia e Participações S.A.), to operate as independent energy producers. Additionally, the aforesaid document determines the assignment of Energy Purchase Agreements in the Regulated Market (CCEARs) from the UTEs to ENEVA S.A. It is worth mentioning that UTEs MC2 João Neiva and MC2 Joinville were contracted at A-5 auction No. 03/2008- ANEEL, held on September 30, 2008, at which the supply of 225 MW (on average) to distributors was ratified, each distributor being authorized for 35 years.
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UTE Parnaíba Geração de Energia S.A. The Company Management states that the Operation Closing Instrument (“Instrument”), of September 2, 2011, provides for two additional assignment payment clauses subject to: (i) the authorization of ANEEL, without encumbrance or restrictions, for an increase in the physical energy guarantee by up to 72.7 MW on average for each venture. If ENEVA S.A. obtains the authorization, the UTEs shall be entitled to the same proportion of the addition to the physical guarantee, limited to the maximum amount of R$83 million, 50% of which for each UTE, as the additional assignment price; and (ii), in the event the authorization is granted by ANEEL, without encumbrance or restrictions, to change factor “i” and “Other Variable Costs” (as provided for in Article 3, item II, of MME Ordinance 42, of March 01, 2007) of the Ventures, ENEVA S.A. shall pay each UTE, in the same proportion, the amount of taxes stated and recorded as due in the UTEs’ financial statements. This amount is limited to R$61.2 million or to the benefit amount obtained by ENEVA S.A. as a result of the change in factor “i” and “Other Variable Costs” of the Ventures. Both conditional clauses are valid for 18 months to be counted from September 2, 2011, date of Operation Closing Instrument. ENEVA S.A. entered into with its subsidiary UTE Parnaíba Geração de Energia S.A. (“UTE Parnaíba”) the Agreement for Assignment of Rights and Obligations related to concessions purchased from Grupo Bertin Energia e Participações S.A. The aforesaid agreement aims to assign to UTE Parnaíba all rights and obligations, free of charge, arising from the Concession Purchase Agreement. The aforesaid Assignment of Rights and Obligations entered into by ENEVA S.A. and UTE Parnaíba also has to conditional clauses, to wit: (i) the authorization of ANEEL to implement the Ventures (UTEs MC2 João Neiva and MC2 Joinville) in the Parnaíba Thermal Complex; and (ii) change in the aforesaid factor “I” and “Other Variable Costs”. The Company Management states that the Company did not treat this transaction as a business combination, but as an acquisition of assets, as the Company is acquiring intangible assets that are concessions and trade agreements. Parnaíba Participações S.A. The Company Management states that, in March 2012, Parnaíba Participações S.A. (former UTE Parnaíba III Geração de Energia S.A.) entered into a Purchase Option Agreement for Concessions granted by ANEEL to UTE MC2 Nova Venecia 2 S.A., which belongs to Grupo Bertin Energia e Participações S.A., which is valid for 35 years. This concession enables UTE Nova Venecia to operate as an independent energy producer.
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Additionally, the aforesaid document sets forth that performance of a technical, legal and accounting audit of the information provided by UTE Nova Venecia is an essential condition for the payment of the R$20 million premium. This procedure was concluded on May 09, 2012, when the aforesaid payment was made, in the proportion of 70% by Parnaíba Participações and 30% by Petra Energia S.A.
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Parnaíba Participações S.A. Additionally, the aforesaid document determines the assignment of Energy Purchase Agreements in the Regulated Market (CCEARs) from the UTE to Parnaíba Participações and Petra Energia. It is worth mentioning that UTE MC2 João Neiva was contracted at A-5 auction No. 03/2008- ANEEL, held on September 30, 2008, at which the supply of 98 MW (on average) to distributors, authorized for 35 years, was ratified.
(c) New products and services
(i) Description of current research studies already disclosed
The Company seeks to develop all its projects in a sustainable manner, aiming at
maximum energy efficiency at low costs and, while preserving the environment.
Thus, the Company continually devotes to the acquisition, research and
development of clean technologies and environmentally-sustainable projects. In
the R&D field, the Company develops several projects, some of them are being
negotiated and contracted, and others are being implemented.
(ii) Total amount spent by the issuer on research for development of new
products and services
In each of the financial years ended December 31, 2010, 2011 and 2012, the
Company invested R$0.4 million in research and development of new
technologies. In the first quarter of 2013, the Company invested R$1.3 million in
research and development of new technologies.
(iii) Projects in progress already disclosed
An agreement was entered into with COPPE-UFRJ to create a Center for
Research in Energy Generation. The primary purposes of the new center will be
the conduction of research and technological development in energy generation
and qualification and training of people in the sector, and the construction of
laboratories to physically support the analyses and studies planned is also
expected. COPPE-UFRJ is also a partner of the Company and of the University of
Tsingua, in China, for joint studies of control and storage of CO2, among others.
(iv) Total amount spent by the issuer on developing new products or
services
The Company did not incur expenses relating to developing new products or
services.
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253
10.11 – Other factors with significant influence
The Company Management states that there are no other factors that significantly
influenced the Company’s operating performance and that have not been
identified or commented in the other items of this section “10”.
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11.1 – - Disclosed forecasts and assumptions
In compliance with the provisions of Circular Letter/CVM/SEP/No.01/2013 and in
accordance with the material fact published on June 4, 2013, the Company
management has opted to discontinue disclosure of financial projections
(guidance) under this item, in view of the need to align its guidance disclosure
policy with the Company’s current operational phase, in accordance with CVM
Instruction 400 and CVM Instruction 480.
In this sense, we clarify that when the Company started to disclose its capital
investment forecasts, it had no commercial developments in operation. However,
the Company currently has five commercial developments with installed capacity
of 1,780 MW. Accordingly, the disclosure of estimates on capital investments
became necessary in view of its real installed capacity and its current operational
phase.
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11.2 – Monitoring and changes of forecasts disclosed
(a) Inform those that are being replaced by new forecasts included in this
Reference Form and those that are being repeated
Not applicable, since, as referred to in item 11.1 hereof, the Company decided to
discontinue the disclosure of forecasts on cash disbursements for investment in its
developments.
(b) As regards the forecasts for last periods, compare the data forecast
with the effective performance of the indicators, demonstrating clearly the
reasons that led to deviations in the forecasts.
Not applicable, since, as referred to in item 11.1 hereof, the Company decided to
discontinue the disclosure of forecasts on cash disbursements for investment in its
developments.
(c) As regards the forecasts related to periods still in progress, inform
whether the forecasts remain valid on the date of delivery of this Reference
Form and, when applicable, explain why they were set aside or replaced.
Not applicable, since, as referred to in item 11.1 hereof, the Company decided to discontinue the disclosure of forecasts on cash disbursements for investment in its developments.
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12.1 - Description of administrative structure
ENEVA S.A. is managed by a Board of Directors advised by a non-statutory Audit
Committee and by an Executive Board. Our Company’s Fiscal Council is a non-
permanent body, and is not currently instated.
(a) Powers of each body and committee
Board of Directors
In addition to the powers conferred by the Company By-Laws, the ENEVA Board
of Directors has Internal Regulations intended to govern the way it functions and
its relationship with the other corporate bodies, subject always to the provisions of
the By-Laws and of the legislation in force at any time.
Our Company Board of Directors consists of at least 8 (eight) and not more than
10 (ten) regular members, all of whom are elected and can be dismissed by the
General Meeting, with a concurrent 2 (two) year term of office. Reelection is
permitted.
Article 17 of the Company By-Laws sets forth the following responsibilities of the
Board of Directors:
(i) To regulate the activities of the Company, with powers to review and
resolve on any matter that is not within the specific competence of the
General Meeting or the Executive Board;
(ii) To fix general guidelines for the Company’s businessand resolve on any
subject relevant to the Company’s strategy, provided that, however,
Management is responsible for all decisions related to the Company’s daily
activities, as set forth in the By-laws;
(iii) To appoint and remove the members of the Company’s Management,
including approval of the corresponding remuneration, according to the
global remuneration previously approved by the General Meeting;
(iv) To attribute to the members of Management their respective functions,
powers and approval limits, where these are not specified in the By-Laws,
and to appoint the Investor Relations Officer, subject to the provisions of
the By-Laws;
(v) To resolve on the calling of General Meetings, acting jointly or through its
Chairman, when judged necessary, or in terms of article 132 of the
Corporate Law (Law no 6404/76);
(vi) To monitor the management of the Company by the Executive Officers,
examining the Company books and documents at any time and calling for
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information on contracts executed or under negotiation, and on any other
actions;
(vii) To choose and to dismiss the independent auditors, providing that the
choice is in accordance with the applicable legislation. The independent
audit firm shall report to the Board of Directors;
(viii) To invite the independent auditors to provide any explanations that it
may think fit;
(ix) To review the Management Report, the financial statements, and the
accounts of the Executive Board and to resolve on their submission to the
General Meeting;
(x) To approve the annual business plans and the strategic plan, as well as the
annual budget, prepared and recommended by Management and any
changes in these plans involving the greater of: (i) variation of 25% (twenty-
five percent) of the original amount; or (ii) R$250,000,000.00 (two hundred
and fifty million reais), provided that Management is responsible for
deploying the annual business plan and the annual budget;
(xi) To resolve on Company capital increases and share issues, within the limits
authorized in article 6 of the By-Laws, setting the conditions of issuance,
including the price and the period for payment, with the power also to
exclude (or reduce the period for) pre-emptive rights in share issues,
subscription warrants and convertible debentures, which are offered for
sale on a stock exchange or by public subscription, or in the course of a
takeover bid, on the terms provided for under the law;
(xii) To resolve on any request of public bid submission of the Company’s
shares;
(xiii) To resolve on the Company’s purchase of its own shares, or on the
issue of sale or purchase options over the Company’s shares, to be held in
treasury and/or for subsequent cancellation or disposal;
(xiv) To start, change, interrupt, or stop the development, creation,
deployment and/or operation of (i) business or activity whose amount is
greater than R$200,000,000.00 (two hundred million reais), except if
previously approved, in the annual business plan or in the annual budget,
and such transaction or activity must occur in one single transaction or in a
series of related transactions, or (ii) any power generation, v, risk capital
and investment project and venture or activity by the Company or by any of
its subsidiaries;
(xv) To approve the rules of internal procedures of the Board of Directors;
(xvi) To enter any joint venture, association, or any other business
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partnership which involves the Company or its ubsidiaries, which is of
strategic importance for the Company;
(xvii) To authorize the execution of amendments related to transactions
between Related Parties that exceed the amount of R$80,000,000.00
(eighty million reais);
(xviii) To approve the purchase, sale, transfer, lease, pledge, creation of
liens or any other type of provision on the Company’s assets or of any of its
subsidiaries, or the issuance of guarantees to third parties to secure
liabilities of the Company itself, whose amount is greater than
R$100,000,000.00 (one hundred million reais), except if previously
approved in the annual business plan or annual budget;
(xix) To approve investments or capital expenditures by the Company or
any of its subsidiaries, whose estimated total amount is higher than
R$200,000,000.00 (two hundred million reais) in one single operation or in
a series of related operations, except if previously approved in the annual
business plan or in the annual budget;
(xx) To approve loans, financing, simple, unconvertible debentures and
unsecured debentures, or any other debt or commercial paper involving an
amount greater than R$100,000,000.00 (one hundred million reais), except
if previously approved in the annual business plan or in the annual budget;
(xxi) To authorize the Company to issue guarantees to secure the
liabilities of its partially and/or wholly owned subsidiaries, or of any other
companies in which the Company has a shareholding, with the issuance of
guarantees to secure the liabilities of any other third parties being
expressly forbidden;
(xxii) To determine a list of three firms specializing in corporate valuations,
to prepare a valuation report on the shares of the Company, in the event of
cancellation of registration as a public company and quitting the Novo
Mercado;
(xxiii) To file for bankruptcy on behalf of the Company, or for its judicial or
extrajudicial reorganization;
(xxiv) To express an opinion on any public bid for the acquisition of the
shares of the Company, giving its duly reasoned views, up to 15 (fifteen)
days before the bid document is made public, on the following issues as a
minimum: (i) the appropriateness and timeliness of the bid for the
acquisition of shares, in terms of the interests of the shareholder body and
in regard to the liquidity of the Company’s securities; (ii) the repercussions
of the bid on the interests of the Company; (iii) the strategic plans for the
Company disclosed by the bidder; and (iv) any other issues that the Board
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of Directors considers pertinent, in addition to the information required by
the applicable rules issued by the CVM.
(xxv) To approve the execution, termination, amendment, or waiver of a
relevant agreement in an aggregate amount of more than
R$100,000,000.00 (one hundred million reais), except if previously
approved in the annual business plan or in the annual budget;
(xxvi) To approve the granting or contracting, by the Company or by its
subsidiaries, of any guarantees or bonds related to any liability of the
Company or of its subsidiaries or of any other person, which exceeds the
amount of R$100,000,000.00 (one hundred million reais), except if
previously approved in the annual business plan or in the annual budget;
(xxvii) To approve the performance of power trading activities, including
participation in bidding processes, the forming of Public Private
Partnerships in the regulated and free markets, and the execution of any
non-negotiated ancillary contracts;
(xxviii) To approve the execution of power purchase contracts for energy
reserve involving amounts greater higher than R$200,000,000.00 (two
hundred million reais), except if previously approved in the annual business
plan or in the annual budget;
(xxix) To implement significant changes or alterations in the accounting
standards, policies, and guidelines applicable to the Company; and
(xxx) To submit proposals for the General Meeting referring to the
allocation of the Company’s earnings and amendments to the By-laws.
Executive Board
The Executive Board of the Company shall consist of at least two (2) members,
who may or may not be shareholders, resident in Brazil, and elected by the Board
of Directors. The following shall be nominated, with a single Officer being
authorized to fulfill more than one function: one Chief Executive Officer, and one
Executive Vice-President. The position of Investor Relations Officer shall be held
by the Chief Executive Officer or by the Executive Vice-President.
In accordance with article 23 of the Company By-Laws, the Executive Board has
the following powers:
(i) to manage and supervise the routine business and affairs of the Company and all
decisions related to the Company’s routine activities, according to the annual business
plan and the Company’s strategic plan, as well as the annual budget, approved by the
Directors;
(ii) to prepare the Company’s business plan and strategic plan, as well as its
budget and recommend it to the Board of Directors;
260
(iii) To implement the Company’s business plan and strategic plan, as well as
its budget, according to what has been approved by the Board of Directors;
(iv) To implement decisions and instructions by the Board of Directors;
(v) To legally represent the Company before third parties, including
commitment, waiver, settlement, and execution of agreements, assumption
of liabilities, investment of funds, and execution of contracts and other
documents on behalf of the Company;
(vi) To approve all measures required and perform all ordinary acts regarding
financial and economic management, according to the provisions of the By-
Laws and the resolutions approved by the General Meeting and by the
Board of Directors at their meetings;
(vii) To prepare and deliver information related to Company matters to the
Board of Directors, as requested by the Board of Directors itself;
(viii) To prepare the issuance, update, and changes to the financial and
investment policies;
(ix) To prepare the Company’s financial statements for approval of the Board of
Directors and maintain the Company’s corporate and financial and tax
books and records; and
(x) To prepare and recommend to the Board of Directors the Company’s
business plan and strategic plan, as well as its annual budget, with regards
to any fiscal year, in a timely manner, for approval by the Board of Directors
during the last quarter of the corresponding fiscal year.
Fiscal Council
The Company By-Laws provide for the functioning of a Fiscal Council on a non-
permanent basis, with powers, when instated, according to the provisions of the
applicable regulations, comprising at least 3 and at most 5 regular members, with
an equal number of alternates, who may or may not be shareholders, elected and
subject to dismissal at any time by the General Meeting.
Audit Committee
The Audit Committee was created at a meeting of the Board of Directors held on
March 25, 2008. Its primary attributes are: (i) to monitor the accounting practices
adopted in the preparation of the financial statements of the Company and its
subsidiaries; (ii) to recommend independent auditors and assess their
effectiveness; (iii) to approve the planning, supervision and assessment of the
work of internal audit; and (iv) to evaluate the efficiency of risk management and
internal controls.
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(b) Date of instatement of fiscal council, if not permanent, and of creation
of committees
The Company’s Fiscal Council was instated in August 2011, and its term of office
ended on April 30, 2012, when an Annual and Extraordinary Meeting of the
Company was held. As of the date of publication of this Reference Form, the
Company has no Fiscal Council installed.
The creation of the Company Audit Committee was approved by the Board of
Directors at a meeting held on March 25, 2008.
(c) Mechanisms for assessing performance of each body or committee
Since 2011, members of the Company Board of Directors have taken part in an
assessment process that includes issues relating to their own performance and of
the board as a whole. The principal benefits of this process, in addition to
assessing the board itself and the individual performance of its members, are that
it encourages members to contribute to the optimization of the Board’s
performance, and improves its interaction with its advisory committees and with
the Executive Board.
Although there is no formal mechanism for assessing the Executive Board, its
performance is evaluated by the Board of Directors by means of constant
interaction, both on the basis of meetings that are held jointly, and according to
the quality of the information prepared by the Executive Board and provided as
support material for the resolutions of the Board of Directors. In the same way, the
Audit Committee is assessed by the Board of Directors when it reports on its
activities, with the Committee meeting minutes being regularly made available to
members of the Board of Directors for their information and for them to monitor
discussions.
(d) Duties and individual powers of members of the Executive Board
As of the date of this Reference Form, the Company Executive Board is made up
of a Chief Executive Officer, and an Executive Vice-President. A single Officer is
authorized to fulfill more than one function, and the duties are defined in article 23
of the By-Laws.
The Chief Executive Officer and the Executive Vice-President are responsible
for managing activities related to overall Company planning, in addition to the
functions, attributes and powers bestowed by the Board of Directors, and subject
to the policies and guidelines previously set forth by the Board of Directors: (i) to
call and chair meetings of the Executive Board; (ii) to supervise the management
activities of the Company, coordinating and monitoring the actions of members of
the Executive Board; (iii) to propose to the Board of Directors the functions to be
undertaken by each Officer upon the latter’s appointment, without having
262
exclusive responsibility for the decision; (iv) to be the active and passive
representative of the company, in judicial matters and otherwise, subject to the
provisions of article 24 of the By-Laws; (v) to coordinate the Company’s
personnel, organizational, management, operational and marketing policies; (vi) to
prepare and present to the Board of Directors, each year, the Company’s annual
business plan and annual budget; and (vii) to manage matters of a corporate
nature in general.
The Investor Relations Officer is responsible, in addition to the functions,
attributes and powers bestowed by the Board of Directors, and subject to the
policies and guidelines previously set forth by the Board of Directors, for: (i)
representing the company with the controlling authorities and other institutions
operating in the capital market; (ii) supplying information to the investing public,
the CVM, the Stock Exchange where the Company’s securities are traded and the
other bodies involved in capital market operations, in accordance with the
applicable legislation, both in Brazil and overseas; and (iii) keeping the Company
register at the CVM up to date.
(e) Mechanisms for assessing the performance of members of the board
of directors, the committees and the executive board
Members of the Company Board of Directors take part in an assessment process
both of their individual performance and of the performance of the Board as a
whole, as described in item 12.1(c) of this Reference Form.
Although there is no formal mechanism for assessing the performance of the
Executive Board or the Audit Committee, these bodies are assessed by the Board
of Directors as described in item 12.1(c) of this Reference Form.
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12.2 – Rules, policies and practices for general meetings
(a) Advance Notice of Meetings
The Company’s practice for giving advance notice of general meetings of
shareholders coincides with the provisions of the applicable legislation.
The Corporate Law requires that all general meetings be called by means of three
announcements in the Federal Official Gazette or that of the State where the
Company is based, and in one other widely circulated newspaper. The Company
announcements are currently carried in the Official Gazette of the State of Rio de
Janeiro and in the Diário Mercantil newspaper. The first call has to be made at
least 15 days before the date of the general meeting, and the second call eight
days in advance, and the meeting must be held as set forth in the Corporate Law.
A general meeting to resolve on the cancellation of the Company’s registration as
a public company, or to consider complex transactions requiring more time for
shareholders to understand and analyze them, shall be called at least 30 days in
advance. In specific circumstances, however, at the request of any shareholder
and after consulting the Company, the CVM may postpone the date of a general
meeting to 30 days after it has been called.
(b) Competencies
In addition to the other competencies provided by the Brazilian Corporation Law,
the Regulations of the Novo Mercado of BM&FBOVESPA and the Company’s
Bylaws, in particular Article 27 of the Company’s Bylaws, provide that it will be
incumbent on the General Meeting to:
(i) take management’s accounts, examine, discuss and vote on the financial statements;
(ii) elect and remove the members of the Board of Directors;
(iii) fix the total annual compensation of the members of the Board of Directors
and the Executive Board as well as members of the Fiscal Council, if
installed; amend the Bylaws and the Company’s corporate purpose;
(iv) decide on the merger, consolidation merger of shares and spin-off involving
the Company;
(v) approve stock option plans for its managers, employees and individuals
providing services to the Company, as well as officers and employees of
other companies that are directly or indirectly controlled by the Company,
as well as approve any changes related to such plans;
(vi) resolve, in accordance with management’s proposal, on allocation of net
income and dividend distribution;
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(vii) resolve on capital increase which exceeds the authorized capital of the
Company;
(viii) elect the liquidator, as well as the Fiscal Council that will operate
during the liquidation period;
(ix) decide on the cancellation of the registration of the company with the CVM;
(x) decide on delisting from Novo Mercado, which, if adopted, should be
communicated to BM&FBOVESPA in writing 30 (thirty) days in advance;
and
(xi) decide on shares which will be listed or delisted from the stock exchange;
(xii) choose the specialized company responsible for developing an appraisal
report in the case of Articles 37 and 40 of the Bylaws, among the
companies indicated in a triple list prepared by the Board of Directors.
(xiii) approve reduction of capital with distribution of funds and assets to
the Company’s shareholders;
(xiv) approve the Company’s interest in a group of companies;
(xv) approve amortization and redemption of Company’s shares; and
(xvi) change the Company’s dividend policy.
(c) Addresses (physical or electronic) in which documents relating to the
general meeting will be available for shareholders’ analysis
All documents relating to the General Meeting, both related to the participation of
shareholders and support for the resolutions, are available at the following
addresses: (i) Company’s head office: City of Rio de Janeiro, State of Rio de
Janeiro, Praia do Flamengo, no 66, 9th floor, Flamengo, and (ii) electronic
addresses: Company website (www.eneva.com.br/ri); CVM website
(www.cvm.gov.br) and BM&FBOVESPA website (www.bmfbovespa.com.br).
(d) Identification and management of conflicts of interest
As a general rule, the Company uses the provisions of Article 115 of the Brazilian
Corporation Law to address issues relating to conflicts of interest at the General
Meetings. In addition, the Company provides, in the Internal Regulations of the
Board of Directors, guidelines on how to address situations involving conflicts of
interest. For more information about the guidelines in the Internal Regulations of
the Board of Directors, see section 12.4. (c) of this Reference Form.
(e) Request for proxies by the management to exercise the right to vote
The Company reports in the call notices of General Meetings the procedures to be
followed in order to exercise the right to vote, as detailed in item “f” below.
265
(f) Formalities necessary for acceptance of proxy instruments granted by
shareholders, indicating whether the issuer accepts proxies granted by
shareholders through electronic means
To participate in the General Meeting, Shareholders must appear in person or by
proxy, who should be a shareholder, Company manager, lawyer, financial
institution or investment fund manager who represents the members, at the time
and place of the Meeting, in accordance with respective Call Notice.
In the case of attendance by proxy, the proxy must: (i) have the signature of the
principal duly notarized; (ii) be issued less than one year from the date of the
Meeting, as required by law (Article 126, paragraph 1 of Law 6.404/76); (iii) be
notarized by a notary public duly authorized for this purpose, certified by the
Brazilian consulate and translated into Brazilian Portuguese by a sworn translator,
in case it has been granted outside Brazil; (iv) the Proxy must also submit their ID.
It should be noted that the Company does not accept proxies issued by electronic
means.
All the above information is provided by the Company in the Call Notice of the
General Meeting and also in the Guide to Participating in Shareholders’ Meeting
at the addresses (physical and electronic) mentioned in item 12.2 “c” of this
Reference Form.
The Guide to Participating in Shareholders’ Meeting is intended to encourage the
participation of shareholders in meetings, providing clear and practical information
as described below:
1. When and where the Meeting is to take place
2. Who can take part
3. How to take part in the Meeting
4. The Shareholders does not have to appear at the General Meeting in person
5. How to be represented by a proxy
6. How to obtain additional information
(g) Keeping of forums and pages on the World Wide Web to receive and
share feedback from shareholders on the agendas of meetings
Although there is no specific channel for receiving feedback from shareholders on
the agendas of meetings, the Company’s Investor Relations website makes
available the email of both the Investor Relations and Corporate Governance
areas of the Company, it being certain that both areas, should they receive any
manifestation in this regard, may adopt reasonable procedures for analysis.
(h) Live broadcast of video and/or audio of meetings
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There is currently no live broadcast of video and/or audio of shareholders’
meetings.
(i) Mechanisms to allow inclusion in the agenda of proposals made by
shareholders
Although there are no mechanisms to allow inclusion in the agenda of proposals
made by shareholders, the Company’s Investor Relations and Corporate
Governance areas may, should they receive some shareholder manifestation in
this regard, refer the matter for consideration of the Board of Directors.
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12.3 - Dates and newspapers for publication of information required by Law 6.404/76
Fiscal Year Publications Newspapers - UF Dates
12/31/2012
Financial Statements
Official Gazette of the State of Rio de Janeiro - RJ 02/20/2013
Valor Econômico Newspaper - RJ 02/20/2013
Valor Econômico Newspaper - SP 02/20/2013
Official Gazette of the State of Rio de Janeiro - RJ 02/20/2013
Convening the GM that examined the Financial Statements
Official Gazette of the State of Rio de Janeiro - RJ 03/28/2013
04/01/2013
04/02/2013
Diário Mercantil Newspaper of the State of Rio de
Janeiro - RJ
03/28/2013
04/01/2013
04/02/2013
Minutes of the GM that examined the Financial Statements
Official Gazette of the State of Rio de Janeiro - RJ 06/11/2013
Valor Econômico Newspaper - Nacional - RJ 06/11/2013
12/31/2011
Financial Statements
Official Gazette of the State of Rio de Janeiro - RJ 03/22/2012
Diário Mercantil Newspaper of the State of Rio de
Janeiro - RJ
03/22/2012
Convening the GM that examined the Financial Statements
Official Gazette of the State of Rio de Janeiro - RJ 03/30/2012
04/02/2012
04/03/2012
Valor Econômico Newspaper - Nacional - RJ 03/30/2012
04/02/2012
04/03/2012
Minutes of the AGM that examined the Financial Statements
Official Gazette of the State of Rio de Janeiro - RJ 05/31/2012
Valor Econômico Newspaper - Nacional - RJ 05/31/2012
12/31/2010
Financial Statements
Official State Gazette - BR 03/25/2011
Valor Econômico Newspaper - RJ 03/25/2011
Notice to Shareholders Communicating Disclosure of Financial Statements
Official State Gazette - RJ 03/30/2011
03/31/2011
04/01/2011
268
Valor Econômico Newspaper - BR 03/30/2011
03/31/2011
04/01/2011
Convening the GM that examined the Financial Statements
Official State Gazette - RJ 04/11/2011
04/12/2011
Valor Econômico Newspaper - BR
04/13/2011
04/11/2011
Valor Econômico Newspaper - RJ 04/12/2011
04/13/2011
Minutes of the AGM that examined the Financial Statements
Official Sate Gazette - RJ 05/30/2011
Valor Econômico Newspaper - BR 05/30/2011
269
12.4 - Rules, policies and practices relating to the Board of Directors
The Company’s Bylaws provides that the Board of Directors will be composed of
at least eight and no more than ten members, whether Company’s shareholders
or not, elected and removed by the General Meeting, with a unified term of office
of two years, with the possibility of reelection.
(a) Frequency of meetings
In accordance with Article 14 of the Bylaws of the Company, the Board of
Directors will meet, at least 06 (six) times a year, upon written notice delivered
personally, by electronic mail, via fax or courier, by initiative of the Chairman
and/or Vice-Chairman or upon written request of any member of the Board of
Directors, at least 03 (three) business days before the meeting and definition of
date, place, time and agenda of topics to be addressed. Should the Chairman not
take the required measures to call the meeting requested by a member of the
Board of Directors within 05 (five) business days starting from the date of receipt
of said request, any member might call the meeting requested. No resolution may
be approved if the topic is not expressly included in the meeting’s agenda. In
urgent cases, the meetings of the Board may be called by the Chairman and/or
Vice-Chairman, without observing the term above, provided that all other Board
members are clearly aware of it. Calls may be personally, by electronic mail, via
fax or courier, with acknowledgment of receipt, fax or any other means, electronic
or otherwise, that allows proof of receipt. Regardless of the formalities provided
for in the Bylaws, a meeting attended by all Directors will be deemed to be
regular. The presence of the member of the Board at the meeting constitutes his
full agreement with the meeting’s call, except if the presence of the member of the
Board of Directors has the express purpose of opposing any resolution of any
business at the beginning of such meeting, due to the fact that the meeting was
not duly called or set.
(b) If any, the provisions of the shareholders’ agreement establishing
restrictions or conditions on the exercise of voting rights of members of the
board
The Company has, as of this date, a shareholders’ agreement in force which,
nevertheless, does not provide for restriction to the exercise of right to vote by
members of the Board of Directors.
(c) Rules for identification and management of conflicts of interest
As a general rule, the Company uses the provisions of Article 115 of the Brazilian
Corporation Law to address issues relating to conflicts of interest at the General
Meetings. In addition, the Company provides, in the Internal Regulations of the
Board of Directors and Audit Committee, guidelines on how to address situations
270
involving conflicts of interest.
According to the Internal Regulations of the Board of Directors of the Company,
said Board should “prevent and manage conflicts of interests or differences of
opinion, so that the Company’s interests always prevail.”
The Directors must also:
(i) ensure that transactions between related parties are conducted based on
market conditions in terms of deadlines, fees and guarantees, and are
disclosed as required by the CVM;
(ii) declare, prior to resolution, that, for whatever reason, they have a particular
or conflicting interest with the Company regarding the particular matter
referred to it, abstaining from discussion and voting; and
(iii) abstain from deciding matters involving conflict of interest.
271
12.5. Description of arbitration clause for resolution of conflicts
Under Article 44 of the Bylaws of the Company and the Listing Regulations of the
Novo Mercado, the Company, its shareholders, directors and members of the
Fiscal Council, when installed, undertake to settle by arbitration before the Market
Arbitration Chamber, any dispute or controversy between them, particularly
related to or arising from the enforcement, validity, effectiveness, construction,
violation and related effects, of the provisions of the Brazilian Corporation Law, the
Company’s Bylaws, the rules issued by the National Monetary Council, the
Central Bank of Brazil and the CVM, as well as other rules applicable to the
operation of the capital markets in general, in addition to those included in the
Listing Regulations of the Novo Mercado, the Arbitration Regulations of the
Market Arbitration Chamber, the Sanctions Regulations and the Agreement for
Participation in the Novo Mercado.
272
12.6 / 8 - Composition and professional experience of management and fiscal council Name Age Management body Election Date Term of office
INDIVIDUAL TAXPAYER CARD (CPF) NO. Profession Elective office held Date of investiture Elected by Controlling
Shareholder
Other positions and functions held at the issuer
Eduardo Karrer
794.312.677-72
Chief Investor Relations Officer
Member of the Audit Committee
Member of the Human Resources Committee
Member of the Finance, Investment and Control
Committee
52
Engineer
Participates only in the Executive Board
Chief Executive Officer
06/13/2013
06/13/2013
2 years
Yes
Alexandre Americano Holanda e Silva
075.225.197-05
45
Lawyer
Participates only in the Executive Board
Executive Vice President
06/13/2013
06/13/2013
2 years
Yes
Eliezer Batista da Silva
607.460.507-63
88
Engineer
Participates only in the Board of Directors
Deputy Chairman of the Board
06/12/2013
06/12/2013
General Meeting 2015
Yes
Ricardo Luiz de Souza Ramos
804.112.237-04
47
Mechanical Engineer
Participates only in the Board of Directors
(Permanent) Member of the Board
06/12/2013
06/12/2013
General Meeting 2015Yes
Stein Dale
Member of the Finance, Investment and Control
Committee
Passport No. 28605707
49
Administrator
Participates only in the Board of Directors
(Permanent) Member of the Board
06/12/2013
06/12/2013
General Meeting 2015Yes
Jørgen Kildahl
Passport No. 25045060
Member of the Human Resources Committee
50
Economist
Participates only in the Board of Directors
President of the Boar of Directors
06/12/2013
06/12/2013
General Meeting 2015Yes
Keith Plowman
Passport No. 801463073
Membro do Comitê de Auditoria
55
Economist
Participates only in the Board of Directors
(Permanent) Member of the Board
06/12/2013
06/12/2013
General Meeting 2015Yes
273
Name Age Management body Election Date Term of office
INDIVIDUAL TAXPAYER CARD (CPF) NO. Profession Elective office held Date of investiture Elected by Controlling
Shareholder
Other positions and functions held at the issuer
Luiz do Amaral de França Pereira
014.707.017-15
76
Civil Engineer
Participates only in the Board of Directors
(Permanent) Member of the Board
08/12/2013
08/12/2013
General Meeting 2015
Yes
Professional background / Declaration of convictions
Eduardo Karrer - 794.312.677-72
a. Eduardo Karrer holds a Bachelor’s degree in Civil Engineering from the UERJ, an MBA in Public Administration from PUC-RJ, attended Leadership Development programs at Rice University
and General Management at SMU-Cox. He is currently a member of the Board of Directors of OGX Petróleo e Gás Participações S.A. (core activity: oil and gas) (since 2010), LLX Minas-Rio
Logística Exportadora S.A. (core activity: port construction and exploitation) (2011) and the CCX Carvão da Colômbia S.A. (core activity: extraction and sale of coal) (since 2012). In addition, he
currently holds the position of CEO of ENEVA S.A. (since 2007). He served as Supervising Officer at Companhia Rio Polímeros S.A. (2007), as Chief Executive Officer (2002/2007) and Vice
President of Operations and New Ventures to South America (2001-2002) at El Paso Brasil Ltda. (core activity: power generation); he also served as General Manager of International Marketing at
Petrobras S.A. (core activity: oil and gas) (2000). At Petrobras Distribuidora S.A. he held the positions of Executive Manager for International Markets (1999), Executive Manager for Aviation
Products (1998) and Executive Manager of the Gas and Energy Division (1997). In addition, he served as General Manager - Marlim Field Development (1996) and Project Manager – Barracuda
and Albacora Fields Projects (1992-1995) at Petrobras S.A. He was Project Manager at Petrobras America Inc. (1990-1991), engineer in the Production Engineering Division at Petrobras S.A.
(1986-1989) and project manager at Construtora Rabello (1984-1985).
b. Eduardo Karrer declares for all purposes of the law that over the last 5 years he has not been subject to any criminal conviction, or to punishment or enforcement of penalties as a result of
administrative proceedings filed with the CVM, or to final judgment in the judicial or administrative spheres, that might have resulted in his suspension or disqualification from engaging in any
professional or commercial activities.
Alexandre Americano Holanda e Silva - 075.225.197-05
a. Alexandre Americano is a law graduate from PUC-RJ (2001), with an MBA in Finance and Capital Markets (2003) and a graduate degree in Company Law (2005), both from the Getúlio Vargas
Foundation - FGV. At UCSD (1999) he completed the NALA (National Association of Legal Assistants) program and graduated as a legal assistant for the State of California (USA). He studied for
13 years at the Colégio Santo Inácio where he completed his primary and secondary education. He is currently General Manager for Legal Affairs and Institutional Relations at ENEVA S.A. (core
activity: power generation) (Feb/2008). He also joined the board of directors of Amapari Energia (core activity: power generation), MPX Chile (core activity: power generation) and Porto do Pecém
Geração de Energia (core activity: power generation) and was an officer of UTE Porto do Itaqui (core activity: power generation). In 2007 he was appointed Legal Superintendent at Brasil
Ecodiesel (core activity: power generation) and from 1999-2006 he worked in the BBM Group (Banco BBM and BBM Holding) (core activity: financial institution), where his last position was that of
Legal Manager.
b. Alexandre Americano declares for all purposes of the law that over the last 5 years he has not been subject to any criminal conviction, or to punishment or enforcement of penalties as a result of
administrative proceedings filed with the CVM, or to final judgment in the judicial or administrative spheres, that might have resulted in his suspension or disqualification from engaging in any
professional or commercial activities.
Eliezer Batista da Silva - 607.460.507-63
a. Eliezer Batista da Silva holds a Bachelor’s degree in Civil Engineering from the University of Paraná, with postgraduate studies and training in United States and Europe. He is currently
274
Name Age Management body Election Date Term of office
INDIVIDUAL TAXPAYER CARD (CPF) NO. Profession Elective office held Date of investiture Elected by Controlling
Shareholder
Other positions and functions held at the issuer
Honorary Chairman of the Board of Directors of MMX Mineração e Metálicos S.A. (core activity: mining) (since 2005), LLX Logística S.A. (core activity: port development and exploitation) (since
2007), and Deputy Chairman of the Board of Directors of OGX Petróleo e Gás Participações S.A. (core activity: oil and gas) (since 2007), OSX Brasil S.A. (core activity: shipyard development)
(since 2009), ENEVA S.A.(since 2007), CCX Carvão da Colômbia S.A. (core activity: extraction and sale of coal) (since 2012), all companies of the EBX Group. In addition, he is currently Member
of the Board of Directors of the Monteiro Aranha Group (core activity: real estate), BUNGE Group (core activity: agribusiness), NEXANS Brasil S/A (core activity: development of cabling and
systems), the Board of Trustees of the Brazilian Center for International Relations (CEBRI/Rio), Member of the Academy of Sciences of Russia, Member of the World Business Council for
Sustainable Development, Member of the Board of Directors of IBIO–Atlantic Bio Institute, Member of the Board of Directors of Lorinvest-Gestão de Recursos Ltda. and Honorary President of the
Notable Group-Brazil-Japan.
b. Eliezer Batista da Silva declares for all purposes of the law that over the last 5 years he has not been subject to any criminal conviction, or to punishment or enforcement of penalties as a result
of administrative proceedings filed with the CVM, or to final judgment in the judicial or administrative spheres, that might have resulted in his suspension or disqualification from engaging in any
professional or commercial activities.
Ricardo Luiz de Souza Ramos - 804.112.237-04
a. Ricardo Luiz de Souza Ramos holds a Bachelor’s degree in Mechanical Engineering from Gama Filho University and a Master’s degree in Business Administration from COPPEAD. He is
currently a member of the Board of Directors of ENEVA S.A. (since 2012). In addition, he currently holds the position of Credit Area Superintendent at the BNDES, as well as Superintendent for
Social Infrastructure. He served as Priorities Departmental Head at BNDES (2006-2008), Aircraft Exports Finance Manager (2005-2006), Executive Manager of the Information Technology
Investment Department (2003-2004), Export Manager - Aircraft and Engineering Services Export Finance Transactions (2001-2003), Investment Analysis in the metallurgy, commerce and services
sectors (1997-2000) and industrial area engineer (1993-1997).
b. Ricardo Luiz de Souza Ramos declares for all purposes of the law that over the last 5 years he has not been subject to any criminal conviction, or to punishment or enforcement of penalties as
a result of administrative proceedings filed with the CVM, or to final judgment in the judicial or administrative spheres, that might have resulted in his suspension or disqualification from engaging in
any professional or commercial activities.
Stein Dale - Passport No. 28605707
a. Stein Dale is a graduate of the Defense Language Institute-Norwegian Armed Forces, with a Master’s degree in General Business from the Norwegian School of Management (BI), and
specialization from IMD – Orchestrating Winning Performance (OWP) in Lausanne, Switzerland and Harvard Business School – Advanced Management Program (AMP), USA. He is currently
CEO of E.On International Energy (core activity: power generation) (since 2012). He was CEO of Multiconsult AS (core activity: engineering consultancy services) (2011-2012), Executive Vice
President and CFO of Statkraft (2002-2011), Executive Vice President of Enitel ASA (core activity: telecommunications) (2000-2001), Executive Vice President of Telia Norge AS (1994-2000). He
also served as member of the Board of Directors of Multiconsult AS (2011-2012), SN Power (2005-2010), and from 2009 to 2012 was Chairman of the Board of Directors, E.On Sweden (2005-
2009) and Fjordkraft (2004-2006). He was also Chairman of the Board of Directors of Statkrafet Treasury Centre Belgium (2008-2011) and of BKK (2007-2010).
b. Stein Dale declares for all purposes of the law that over the last 5 years he has not been subject to any criminal conviction, or to punishment or enforcement of penalties as a result of
administrative proceedings filed with the CVM, or to final judgment in the judicial or administrative spheres, that might have resulted in his suspension or disqualification from engaging in any
professional or commercial activities.
275
Name Age Management body Election Date Term of office
INDIVIDUAL TAXPAYER CARD (CPF) NO. Profession Elective office held Date of investiture Elected by Controlling
Shareholder
Other positions and functions held at the issuer
Jørgen Kildahl - Passport No. 25045060
a. Jørgen Kildahl graduated from the Norwegian School of Economics and Business Administration, with a master’s degree (MSc) in Science in Economics and Business Administration (MBA) and
in Finance, both from the Norwegian Schoold of Economics and Business Administration. He also specialized at the Harvard Business School – Advanced Management Program (AMP). He is
currently a member of the Executive Board of E.ON AG, in Düsseldorf, Germany (core activity: power generation) (since 2010). He was a manager at International Fund Management Ltd. (core
activity: investment in assets) (1988-1991) and Consulting Partner in Public Relations for the Geelmuyden.Kiese Group, Oslo, Norway (core activity: consultancy) (1991-1999). He was also
Executive Vice President of Statkraft Markets SF (core activity: power generation) (1999-2001) and Executive Vice President of Statkraft AS (core activity: power generation), in the Market and
Commercial Operations areas in Europe and Power Generation and Market in Europe (2001-2010).
b. Jørgen Kildahl declares for all purposes of the law that over the last 5 years he has not been subject to any criminal conviction, or to punishment or enforcement of penalties as a result of
administrative proceedings filed with the CVM, or to final judgment in the judicial or administrative spheres, that might have resulted in his suspension or disqualification from engaging in any
professional or commercial activities.
Keith Plowman - Passport No. 801463073
a. Keith Plowman is a graduate of UWIST in engineering (1980), with an MBA from Aston University. He is currently Head of Operations at E.ON International Energy (core activity: power
generation) (since September/2011). Previously he was a Director of Steam Germany and Fleet Management Steam (core activity: power generation) (2010-2011). He was a member of the
Executive Board of E.ON Kraftwerke GmbH (core activity: power generation) (2008-2009), Development and Construction Director and Power Generation Director at Eon UK Ltd (core activity:
power generation)(2004-2007), Superintendent General of CHP Ltd. (core activity: power generation) (2002-2004), Sales Superintendent of CHP Ltd. (core activity: power generation (1998-2002),
and Engineering Superindendent of CHP Ltd (core activity: power generation) (1991-1997).
b. Keith Plowman declares for all purposes of the law that over the last 5 years he has not been subject to any criminal conviction, or to punishment or enforcement of penalties as a result of
administrative proceedings filed with the CVM, or to final judgment in the judicial or administrative spheres, that might have resulted in his suspension or disqualification from engaging in any
professional or commercial activities.
276
12.7 - Composition of the statutory committees and the audit, finance and compensation committees
Name Committee type Position held Profession Date elected Term of office
INDIVIDUAL TAXPAYER CARD (CPF)
NO.
Description of other
committees
description of other positions held Age Date of investiture
Other positions/ functions held at the issuer Professional background/Declaration of convictions
Keith Plowman
Passport No. 801463073
Audit Committee President of the Committee Engineer
55
June 13, 2013
June 13, 2013
1 year
Member of the Board of Directors (Permanent). a. Keith Plowman is an Engineering graduate from UWIST (1980) and holds an MBA from Aston University. He is currently a Chief Operating Officer of E. ON International Energy (core activity: power generation) (since September 2011). He was previously a Director of Steam Germany and of Fleet Management Steam (core activity: power generation) (2010-2011). He was a member of the Board of Directors of E. ON Kraftwerke GmbH (core activity: power generation), Development & Construction Director and Energy Generation Director of Eon UK Ltd (core activity: power generation) (2004-2007), and also held the following positions in CHP Ltd. (core activity: power generation): Engineering Superintendent 1991-1997, Sales Superintendent (1998-2002) and Superintendent General (2002-2004).
b. Keith Plowman declares for all purposes of the law that over the last 5 years he has not been subject to any criminal conviction, or to punishment or enforcement of penalties as a result of administrative proceedings filed with the CVM, or to final judgment in the judicial or administrative spheres, that might have resulted in his suspension or disqualification from engaging in any professional or commercial activities.
Eduardo Karrer
794.312.677-72
Audit Committee Member of the Committee (Permanent) Engineer
52
June 13, 2013
June 13, 2013
1 year
CEO / Investor Relations Director
Member of the Human Resources Committee
Member of the Financial, Investment and Control Committee
a. Eduardo Karrer is a Civil Engineering graduate from the UERJ, holds an MBA in Public Administration from PUC-RJ and attended Leadership Development programs at Rice University and General Management at SMU-Cox. He is currently a member of the Board of Directors of OGX Petróleo e Gás Participações S.A. (core activity: oil and gas) (since 2010), LLX Minas-Rio Logística Exportadora S.A. (core activity: port construction and operation) (2011) and CCX Carvão da Colômbia S.A. (core activity: extraction and sale of mineral coal) (since 2012). Additionally, he currently holds the position of CEO of ENEVA S.A. (since 2007). He held the position of Supervising Officer at Companhia Rio Polímeros S.A. (2007), Chief Executive Officer (2002/2007) and Vice President of Operations and New Ventures for South America (2001-2002) at El Paso Brasil Ltda. (core activity: power generation). He also held the position of General Manager of International Marketing at Petrobras S.A. (core activity: oil and gas) (2000). At Petrobras Distribuidora S.A., he held the position of Executive Manager for International Markets (1999), Executive Manager for Aviation Products (1998) and Executive Manager of the Gas and Energy Division (1997). He also held the position of General Manager - Marlim Field Development (1996) and Project Manager – Barracuda and Albacora Fields Projects (1992-1995) at Petrobras S.A. He was a Project Manager at Petrobras America Inc. (1990-1991), engineer of the Production Engineering Division at Petrobras S.A. (1986-1989) and project manager at Construtora Rabello (1984-1985).
b. Eduardo Karrer declares for all purposes of the law that over the last 5 years he has not been subject to any criminal conviction, or to punishment or enforcement of penalties as a result of administrative proceedings filed with the CVM, or to final judgment in the judicial or administrative spheres, that might have resulted in his suspension or disqualification from engaging in
277
Name Committee type Position held Profession Date elected Term of office
INDIVIDUAL TAXPAYER CARD (CPF)
NO.
Description of other
committees
description of other positions held Age Date of investiture
Other positions/ functions held at the issuer Professional background/Declaration of convictions
any professional or commercial activities.
Frank Possmeier
Passport No. 801463073 (SIC)
Audit Committee Member of the Committee (Permanent) Administrator (Designated)
55
June 13, 2013
June 13, 2013
1 year
Member of the Audit Committee
Member of the Financial, Investment and Control Committee
a. Frank Possmeier is a Business Administration and Economics graduate and holds a PhD in Administration and Economics. Frank was a member of the Board of Directors of E.ON International Energy (core activity: energy generation) (November 2010) and previously held the position of Senior Vice President and Global Consolidation and Acquisition Officer of E.ON Group (core activity: energy generation) (3 years), in which he was responsible for the group’s acquisition and divestiture.
b. Frank Possmeier declares for all purposes of the law that over the last 5 years he has not been subject to any criminal conviction, or to punishment or enforcement of penalties as a result of administrative proceedings filed with the CVM, or to final judgment in the judicial or administrative spheres, that might have resulted in his suspension or disqualification from engaging in any professional or commercial activities.
Jørgen Kildahl
Passport No. 25045060
Human Resources Committee Member of the Committee (Permanent)
Economist
50
June 13, 2013
June 13, 2013
1 year
President of the Boar of Directors a. Jørgen Kildahl is a graduate from the Norwegian School of Economics and Business Administration, holds a Master of Science in Economics and Business Administration (MSc) and an MBA in Finance from the same school. He also specialized in Harvard Business School’s Advance Management Program (AMP), USA. He is currently a member of the Board of Directors of E.ON AG, in Düsseldorf, Germany (Core activity: electricity generation) (since 2010). He was a manager at International Fund Management Ltd. (core activity: investment in assets) (1988-1991) and Public Relations Consulting Partner of the Geelmuyden.Kiese Group, Oslo, Norway (Core activity: consultancy). He was also Deputy CEO of Statkraft Markets SF (Core activity: electricity generation) (1999-2001) and Statkraft AS (Core activity: electricity generation), in the areas of Market and Commercial Operations in Europe and Energy Generation and Market in Europe (2001-2010). He also acted as a
b. Jørgen Kildahl declares for all purposes of the law that over the last 5 years he has not been subject to any criminal conviction, or
to punishment or enforcement of penalties as a result of administrative proceedings filed with the CVM, or to final judgment in the
judicial or administrative spheres, that might have resulted in his suspension or disqualification from engaging in any professional or
commercial activities.
Eduardo Karrer
794.312.677-72
Human Resources Committee Member of the Committee (Permanent) Engineer
52
June 13, 2013
June 13, 2013
1 year
278
CEO / Investor Relations Director
Member of the Human Resources Committee
Member of the Financial, Investment and Control Committee
a. Eduardo Karrer is a Civil Engineering graduate from the UERJ, holds an MBA in Public Administration from PUC-RJ and attended Leadership Development programs at Rice University and General Management at SMU-Cox. He is currently a member of the Board of Directors of OGX Petróleo e Gás Participações S.A. (core activity: oil and gas) (since 2010), LLX Minas-Rio Logística Exportadora S.A. (core activity: port construction and operation) (2011) and CCX Carvão da Colômbia S.A. (core activity: extraction and sale of mineral coal) (since 2012). Additionally, he currently holds the position of CEO of ENEVA S.A. (since 2007). He held the position of Supervising Officer at Companhia Rio Polímeros S.A. (2007), Chief Executive Officer (2002/2007) and Vice President of Operations and New Ventures for South America (2001-2002) at El Paso Brasil Ltda. (core activity: power generation). He also held the position of General Manager of International Marketing at Petrobras S.A. (core activity: oil and gas) (2000). At Petrobras Distribuidora S.A., he held the position of Executive Manager for International Markets (1999), Executive Manager for Aviation Products (1998) and Executive Manager of the Gas and Energy Division (1997). He also held the position of General Manager - Marlim Field Development (1996) and Project Manager – Barracuda and Albacora Fields Projects (1992-1995) at Petrobras S.A. He was a Project Manager at Petrobras America Inc. (1990-1991), engineer of the Production Engineering Division at Petrobras S.A. (1986-1989) and project manager at Construtora Rabello (1984-1985).
b. Eduardo Karrer declares for all purposes of the law that over the last 5 years he has not been subject to any criminal conviction, or to punishment or enforcement of penalties as a result of administrative proceedings filed with the CVM, or to final judgment in the judicial or administrative spheres, that might have resulted in his suspension or disqualification from engaging in any professional or commercial activities.
Frank Possmeier
Passport No. 801463073
Human Resources Committee
Member of the Committee (Permanent) Administrator
55
June 13, 2013
June 13, 2013
1 year
Member of the Audit Committee
Member of the Financial, Investment and Control Committee
a. Frank Possmeier is a Business Administration and Economics graduate and holds a PhD in Administration and Economics. Frank was a member of the Board of Directors of E.ON International Energy (core activity: energy generation) (November 2010) and previously held the position of Senior Vice President and Global Consolidation and Acquisition Officer of E.ON Group (core activity: energy generation) (3 years), in which he was responsible for the group’s acquisition and divestiture.
b. Frank Possmeier declares for all purposes of the law that over the last 5 years he has not been subject to any criminal conviction, or to punishment or enforcement of penalties as a result of administrative proceedings filed with the CVM, or to final judgment in the judicial or administrative spheres, that might have resulted in his suspension or disqualification from engaging in any professional or commercial activities.
Stein Dale
Passport No. 28605707
Financial, Investment and
Control Committee
President of the Committee Administrator
49
June 13, 2013
June 13, 2013
1 year
Member of the Board of Directors (Permanent)
a. Stein Dale is a graduate of the Defense Language Institute-Norwegian Armed Forces, with a Master’s degree in General Business
from the Norwegian School of Management (BI), and specialization from IMD – Orchestrating Winning Performance (OWP) in
Lausanne, Switzerland and Harvard Business School – Advanced Management Program (AMP), USA. He is currently CEO of E.On
International Energy (core activity: power generation) (since 2012). He was CEO of Multiconsult AS (core activity: engineering
consultancy services) (2011-2012), Executive Vice President and CFO of Statkraft (2002-2011), Executive Vice President of Enitel
ASA (core activity: telecommunications) (2000-2001), Executive Vice President of Telia Norge AS (1994-2000). He also served as
member of the Board of Directors of Multiconsult AS (2011-2012), SN Power (2005-2010), and from 2009 to 2012 was Chairman of
the Board of Directors, E.On Sweden (2005-2009) and Fjordkraft (2004-2006). He was also Chairman of the Board of Directors of
279
Statkrafet Treasury Centre Belgium (2008-2011) and of BKK (2007-2010).
b. Stein Dale declares for all purposes of the law that over the last 5 years he has not been subject to any criminal conviction, or to punishment or enforcement of penalties as a result of administrative proceedings filed with the CVM, or to final judgment in the judicial or administrative spheres, that might have resulted in his suspension or disqualification from engaging in any professional or commercial activities.
Eduardo Karrer
794.312.677-72 Financial, Investment and
Control Committee
President of the Committee Engineer
52
June 13, 2013
June 13, 2013
1 year
CEO / Investor Relations Director
Member of the Audit Committee
Member of the Human Resources Committee
a. Eduardo Karrer is a Civil Engineering graduate from the UERJ, holds an MBA in Public Administration from PUC-RJ and attended Leadership Development programs at Rice University and General Management at SMU-Cox. He is currently a member of the Board of Directors of OGX Petróleo e Gás Participações S.A. (core activity: oil and gas) (since 2010), LLX Minas-Rio Logística Exportadora S.A. (core activity: port construction and operation) (2011) and CCX Carvão da Colômbia S.A. (core activity: extraction and sale of mineral coal) (since 2012). Additionally, he currently holds the position of CEO of ENEVA S.A. (since 2007). He held the position of Supervising Officer at Companhia Rio Polímeros S.A. (2007), Chief Executive Officer (2002/2007) and Vice President of Operations and New Ventures for South America (2001-2002) at El Paso Brasil Ltda. (core activity: power generation). He also held the position of General Manager of International Marketing at Petrobras S.A. (core activity: oil and gas) (2000). At Petrobras Distribuidora S.A., he held the position of Executive Manager for International Markets (1999), Executive Manager for Aviation Products (1998) and Executive Manager of the Gas and Energy Division (1997). He also held the position of General Manager - Marlim Field Development (1996) and Project Manager – Barracuda and Albacora Fields Projects (1992-1995) at Petrobras S.A. He was a Project Manager at Petrobras America Inc. (1990-1991), engineer of the Production Engineering Division at Petrobras S.A. (1986-1989) and project manager at Construtora Rabello (1984-1985).
b. Eduardo Karrer declares for all purposes of the law that over the last 5 years he has not been subject to any criminal conviction, or to punishment or enforcement of penalties as a result of administrative proceedings filed with the CVM, or to final judgment in the judicial or administrative spheres, that might have resulted in his suspension or disqualification from engaging in any professional or commercial activities.
Frank Possmeier
Passport No. 801463073
Financial, Investment and
Control Committee
Member of the Committee (Permanent) Administrator
55
June 13, 2013
June 13, 2013
1 year
Member of the Audit Committee
Member of the Human Resources Committee
a. Frank Possmeier is a Business Administration and Economics graduate and holds a PhD in Administration and Economics. Frank was a member of the Board of Directors of E.ON International Energy (core activity: energy generation) (November 2010) and previously held the position of Senior Vice President and Global Consolidation and Acquisition Officer of E.ON Group (core activity: energy generation) (3 years), in which he was responsible for the group’s acquisition and divestiture.
b. Frank Possmeier declares for all purposes of the law that over the last 5 years he has not been subject to any criminal conviction, or to punishment or enforcement of penalties as a result of administrative proceedings filed with the CVM, or to final judgment in the judicial or administrative spheres, that might have resulted in his suspension or disqualification from engaging in any professional or commercial activities.
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12.9 - Existing marital relationship, common-law marriage, or family relationship up to 2nd
degree relating to managers of the
issuer, subsidiaries and controlling shareholders.
There are no marital relationship, common-law marriage, or family relationship up to 2nd degree relating to managers of the issuer, subsidiaries and controlling shareholders.
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12.10 - Relationships of subordination, rendering of services or control between managers and subsidiaries, controlling
shareholders and other:
There are no relationships of subordination, rendering of services or control between managers and subsidiaries, controlling
shareholders and other
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12.11 - Agreements, including insurance policies, for payment or
reimbursement of expenses incurred by management
The company has civil liability insurance policies for its management (members of
the Board of Directors, the Executive Board and committees) and members of the
Fiscal Council, if installed, issued by renowned insurance companies, which aim
to ensure the payment of financial losses arising from claims made against the
insured in accordance with the conditions laid down set out in the contract, by
virtue of harmful acts for which they are held accountable, provided that they have
acted within their capacity as a manager. The premium on this policy is R$1,2
million and the maximum guarantee limit R$300 million, which is considered by
management as sufficient to cover any claims, considering the nature of the
company’s activity.
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12.12 - Other relevant information
Appointment of Frank Possmeier to the Company’s Executive Board
At the Board Meeting on June 13, 2013, the Company deliberated and approved
the appointment of Mr. Frank Possmeier to the position of Executive Vice
President of the Company. However, the election, investiture and taking of office
of Mr. Frank Possmeier will only be formalized as and when he is granted a
permanent visa and is authorized to hold the position of Executive Vice President
of the Company by the competent authorities, including the General Coordinator
of Immigration of the Ministry of Labor and Employment. For this reason, the
election was approved of Mr. Alexandre Americano Holanda e Silva to the position
of Executive Vice President of the Company until authorization is obtained from
the Ministry of Labor, as well as the election, investiture and taking of office of Mr.
Frank Possmeier after deliberation and by means of the proper instrument.
Moreover, until the election, investiture and taking of office of Mr. Frank Possmeier
will only be formalized (i) any decision by the executive committee of ENEVA or by
(any) member(s) of the executive committee of ENEVA are subject to a joint prior
approval by Mr. Eduardo Karrer and Mr. Frank Possmeier; and (ii) it may be
granted powers to Mr. Frank Possmeier in order to (jointly) represent ENEVA.
General Meetings
Regarding the Company’s General Meetings held over the last three years, we
present below (i) The date the meetings were held; (ii) any cases of second call;
and (iii) quorum:
Event Date Quorum
Annual General Meeting 4/30/2010 75.70%
Special General Meeting 9/28/2010 77.10%
Annual General Meeting 4/26/2011 74.02%
Special General Meeting 6/22/2011 74.99%
Special General Meeting 8/30/2011 77.18%
Special General Meeting 1/26/2012 74.88%
Annual General Meeting 4/30/2012 76.86%
Special General Meeting 5/24/2012 69.76%
Special General Meeting 8/15/2012 71.99%
Special General Meeting 10/26/2012 57.75%
Annual General Meeting 4/29/2013 70.96%
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Special General Meeting 06/12/2013 71.10%
Management Positions
In compliance with Item 4.5 of the Novo Mercado Rules, we present below the
positions currently held by the members of the company’s Board of Directors on
the Board of Directors, the fiscal council, the committees and the executive bodies
of other companies or entities:
Mr. Eliezer Batista da Silva:
Honorary Chairman of the Board of Directors of MMX Mineração e
Metálicos S.A.
Deputy Chairman of the Board of Directors of OSX Brasil S.A.
Member of the Board of Directors of CCX Carvão da Colômbia S.A.
Deputy Chairman of the Board of Directors of OGX Petróleo e Gás
Participações S.A.
Honorary Chairman of the Board of Directors of LLX Logística S.A.
Corporate governance practices adopted by our company
IBGC defines corporate governance as the system by which companies are
managed and monitored, involving relationships between their shareholders,
board of directors, management, auditors and fiscal council. This practice is
based on the following basic principles: (i) transparency; (ii) fairness; (iii)
accountability; and (iv) corporate responsibility.
The principle of transparency requires management to cultivate the desire to
disclose not only financial performance but also all other factors (even intangible
ones) that guide business activities. Fairness means fair and equal treatment of
all minority groups, employees, customers, suppliers or creditors. Accountability
refers to corporate governance agents being accountable to those who elected
them, with full responsibility for all acts practiced. Finally, corporate responsibility
is a broader view of business strategy that incorporates social and environmental
considerations in the definition of business and operations.
From IBGC’s recommended Corporate Governance Best Practices Code, we
have adopted the following:
share capital is divided into ordinary shares only, so all shareholders have
voting rights;
maintenance and dissemination of records containing the number of shares
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of each member, identifying them by name;
offers for shares resulting in the transfer of corporate control must be
applicable to all members and not just those of the controlling block. All
shareholders must be able to sell their shares on the same conditions.
Share prices in any transfer of control must be transparent. Tag-along rights
apply in the event of the entire controlling block being sold, in which case a
public offering must be made to all shareholders on the same conditions;
independent auditors must be engaged to analyze their balance sheets and
financial statements;
statutory provision for a fiscal council (conselho fiscal);
bylaws to clearly state (a) the means of convening general meetings, and
(b) the means of elect or remove members of the board of directors and the
executive board, and the term of office;
transparent disclosure in management’s annual reports;
free access to company information and facilities for members of the board
of directors;
any conflicts that may arise between the company, its shareholders,
managers and members of the fiscal council to be settled by arbitration;
the shareholders’ general meeting empowered to discuss and decide on:
(a) increasing or decreasing share capital and other amendments to
bylaws; (b) election or removal of members of the board directors or fiscal
council at any time; (c) be given management accounts and vote financial
statements annually; and (d) any conversion, merger, split, dissolution or
liquidation; and
choice of general meeting location in order to facilitate attendance of all
members or their representatives.
Novo Mercado
In 2000, BM&FBOVESPA introduced three trading segments with different levels
of corporate governance practices, known as Level 1, Level 2 and Novo Mercado,
with the aim of encouraging companies to follow best practices for corporate
governance and adopt levels of disclosure higher than those legally required.
These listing segments are meant for trading shares issued by companies
voluntarily committing to corporate governance practices and disclosure
requirements to higher standards than those legally required in Brazil. In general,
these rules add to shareholders’ rights and enhance the quality of information
provided for them. The Novo Mercado is the most rigorous of the three segments
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and requires the highest level of corporate governance practices.
Companies listed in the Novo Mercado segment voluntarily submit to certain rules
that are stricter than those required under Brazilian legislation, such as (i) issuing
only common shares; (ii) maintaining at least 25% of company shares
outstanding; (iii) quarterly reporting with more detail and information; and (iv)
providing annual financial statements in English, consolidated or individual, or, if
not preparing consolidated financial statements, together with management’s
report or comments on performance and an independent auditor opinion or
special report, pursuant to Brazilian legislation. To adhere to the Novo Mercado
segment, a company must sign an agreement with its controlling shareholders
and BM&FBOVESPA, and amend its bylaws to comply with Novo Mercado rules.
Its management must sign a declaration of acceptance assuming responsibility for
submitting to, and acting in accordance with, the Novo Mercado participation
agreement, listing rules, and regulations covering sanctions and arbitration.
On signing these agreements, companies must adopt Novo Mercado standards
and practices. Novo Mercado rules aim to provide transparency for the market in
relation to a company’s activities and economic situation, assuring greater powers
for minority shareholders to participate in management, among other rights. The
principal Novo Mercado rules that we shall be bound by are briefly described
below.
The Company’s common shares are admitted to trading on BM&FBOVESPA’s
Novo Mercado segment.
Authorization to trade on Novo Mercado
Firstly, a company wishing to list its securities on Novo Mercado must obtain
publicly listed registration with the CVM, and update the latter. Among other
conditions, the company must sign a Novo Mercado participation agreement and
adapt its bylaws to comply with minimum conditions required by BM&FBOVESPA.
Its capital structure must be exclusively divided into common shares and shares
representing at least 25% of share capital must be maintained in circulation.
Companies listed on the Novo Mercado segment are not allowed to issue
participation certificates (or keep them in circulation).
The board of directors of authorized companies that have their shares traded on
the Novo Mercado must consist of at least five members elected by a general
meeting, all of whom are elected together for a maximum of two years, with
reelection being permitted. At least 20% of the members of the board of directors
must be independent directors.
All new members of the board of directors and executive board must sign a
statement of acceptance as a condition for taking office. Through the statement of
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acceptance, new managers are personally responsible for acting in accordance
with the Novo Mercado participation agreement, listing rules, and regulations
covering sanctions and arbitration.
Other Novo Mercado characteristics
Among other requirements for Novo Mercado listed companies, we would
highlight the following: (i) the obligation to make public offerings of shares under
certain circumstances, such as canceling registration for trading on the Novo
Mercado; (ii) any public distribution of shares must favor dispersed share
ownership; (iii) in the event of selling or transferring control of the company, the
same conditions obtained by the controlling block must be extended to all
shareholders; (iv) full disclosure of related party transactions; and (v) the
Company, its shareholders, directors and members of the fiscal council must be
bound by BM & FBOVESPA Arbitration Rules for settling any disputes that may
arise between them, related to or arising from the application, validity, efficacy,
interpretation, violation and its effects, of the Law of Corporations, the company’s
bylaws, rules issued by the CNM, Central Bank and CVM, and other rules
applicable to the securities market in general, in addition to those stated in Novo
Mercado rules governing listing, arbitration and sanctions, and the Novo Mercado
participation agreement.
Additionally, pursuant to CMN Resolution 3456/2007, which established new rules
for closed private pension entities investing their funds, shares issued by
companies that adopt differentiated corporate governance practices, such as
those whose securities are admitted to trading in the Novo Mercado special
segment, or whose listing classification is Level 1 or Level 2 in accordance with
rules and regulations issued by BM & FBOVESPA, may be held in larger
proportions of the investment portfolios of such pension funds. Since said
Resolution was enacted, shares of companies adopting corporate governance
practices have become an important and attractive investment for closed private
pension entities, which are major investors in the Brazilian capital market. This
fact may drive the development of the Novo Mercado and benefit companies
whose securities are traded there.
The Company’s shareholders enjoy all rights and guarantees provided by Novo
Mercado rules, as reflected in the Company’s bylaws.
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13.1 - Description of compensation policy or practice, including non-statutory
board members
(a) Objectives of compensation policy or practice
Our compensation strategy is in line with the market’s best practices and
designed to ensure our competitiveness in relation to our key rivals and majors
operating in Brazil. The main objective is to reward professionals for their
performance ensuring the company evolves as per the strategic planning we have
defined and in alignment with short-, medium- and long-term shareholder returns.
We thus encourage improved management and attract, motivate and retain highly
qualified executives, aligning their interests with those of shareholders.
(b) compensation - breakdown
(i) description of components of compensation and their objectives
Management’s compensation policy consists of (i) a fixed component, the
maximum amount being set annually by general meetings. Depending on the
case, it may include direct or indirect benefits; (ii) a variable component; and (iii) a
share based component - stock options - to purchase or subscribe our shares
(“Stock Options”). Each body will have compensation broken down as described
in the items below.
All these components of compensation are intended to enhance teams’
performance, attract highly qualified professionals for our management, and retain
them.
Board of directors
Fixed compensation
As of May 2012, as decided by the 2012 annual general meeting, members of the
board of directors have been entitled to fixed monthly compensation (fees) with
the purpose of recognizing and reflecting the value of the position internally and
externally, as well as the individual performance, experience, background and
seniority of the directors.
Variable compensation
Short term
Until April 2012, the short-term remuneration of the Board of Directors was paid
upon attendance of board meetings.
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Long term - Compensation based on company shares
Share-based compensation through options to buy or subscribe company shares,
which may be granted in two ways:
(i)Through the “Controller Plan”, i.e. options granted by the Controlling Shareholder with its
own shares, therefore not involving any issue of new shares and consequently not causing
dilution of other shareholders’ equity. These options are granted in favor of certain members of
the executive board and board of directors of the company and other companies controlled by
the Controlling Shareholder (OGX, MMX, LLX, OSX and CCX).
(ii)Through annual stock option plans (“Company Plans”), under the “program
granting options to buy or subscribe the company’s common shares”, the latest
amendment and consolidation of which was voted at the general meeting held
on January 26, 2012 (“Program”).
Both the Company Program and the Controlling Shareholder Plan incentivize
directors, officers and key employees and staff to conduct our business
successfully, encourage entrepreneurial and results-oriented culture, and align our
management’s interests with those of our shareholders.
For more information, see item 13.4 of the Reference Form.
Statutory and non-statutory officers
Fixed compensation
Management’s fixed monthly compensation is determined in accordance with the
responsibilities of each position and in line with best market practices. When
appropriate, this compensation may be supplemented by direct or indirect benefits
as follows: medical assistance, dental assistance, life insurance, supplementary
life insurance, meal voucher and food voucher. Fixed compensation is intended to
compensate directors/officers for their work in accordance with their activity and
seniority.
Variable compensation
Short term
Management’s short-term variable compensation consists of an annual amount
based on the extent to which company targets are reached. Its aim is to provide
compensation for results reached by management in accordance with their
performance and returns earned for our company.
Long term - Compensation based on company shares
Share-based compensation through options to buy or subscribe company shares
(“Stock Options”), which may be granted by the Controlling Shareholder or
Company Plan in the ambit of our company stock option plan as described above.
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The Company’s Program and the Controlling Shareholder’s Plan aim at
stimulating Managers, key employees and staff to conduct our business
successfully, encouraging an entrepreneurial and results-oriented culture, and
aligning Management’s interests with those of our shareholders.
For more information, see Section 13.4 of the Reference Form.
Fiscal Council
Fixed compensation
Our fiscal council is not permanent, therefore fiscal council members, when
installed, will receive fixed monthly payments (fees) equivalent to 10% of the
average assigned to management pursuant to Law 6404/76.
Audit Committee
Fixed compensation
Audit Committee member compensation consists of a fixed monthly amount (fee)
that reflects responsibilities assumed, time devoted to company business and the
professional competence of its members. It is intended to compensate the results
achieved according to their performance and the return for the Company.
(ii) what is each component’s proportion of total compensation
Each component’s proportion of total compensation in FY 201 was as follows:
Board of
directors Management
Audit
Committee Fiscal Council
Fixed compensation
Salary or pro-labore fees 5% 18% 100% 100%
Benefits 0% 1% 0% 0%
Others 2% 3% 0% 0%
Variable compensation - - - -
Share-based compensation
Controlling Shareholder Plan 1 86% 78% 0% 0%
Company Program 4% 0% 0% 0%
Total 100% 100% 100% 100%
(iii) methodology used for calculation and adjustment of each component
of compensation
Management compensation is benchmarked against market practices, taking into
account the practices used by peer companies with similar size and
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characteristics, as well as internal references, which are analyzed on a regular
basis. In the case of the executive board, it is also based on merit and
international competitiveness.
There is no specific methodology for adjustment each of the components of
compensation.
(iv) reasons for composition of compensation
The composition of compensation aims to reflect the responsibility involved in
each position, while maintaining competitiveness in the market. With the use of
various components of compensation and compensation for members of the
board of directors and executive board being largely through stock options (under
the Controlling Shareholders’ Plan and the Company Program), we aim to
encourage improved management, and to attract and retain managers while
aligning their interests with those of shareholders’ by sharing risks in long-term
incentives.
(c) Key performance indicators taken into account to determine each
component of compensation
To determine fixed and variable compensation for executive board members, we
uses market surveys as benchmarks, as well as merit and the extent to which
company targets are met. Compensation of members of the board of directors and
committees is also based on market parameters. Performance is not monitored by
indicators. In relation to share -based compensation (stock options), management
compensation reflects the performance and evolution of the value of our
company’s shares.
(d) How compensation is structured to reflect the evolution of
performance indicators
Compensation is determined from market surveys to define amounts and takes
into account responsibilities, time spent on duties, competence and professional
reputation.
Share-based compensation for our company’s management is directly linked to
share price, which in turn reflects our company’s performance.
(e) How compensation policy or practice aligns with issuer’s short-,
medium- and long-term interests
Fixed and variable compensation together with share-based compensation aim to
encourage better management, and to attract and retain managers, seeking gains
through commitment to short and medium-term results.
292
In addition, stock options give beneficiaries an opportunity to become company
shareholders and encourage them to work to optimizing all aspects that may add
to the company’s value on a long-term sustainable basis.
(f) Existence of compensation supported by directly or indirectly
controlled subsidiaries
The stock option plan granted by the controlling shareholder in favor of certain
members of management (“Controlling Shareholder Plan”), as mentioned
above, grants stock options issued by ENEVA.
For more information, see item 13.4 of the Reference Form.
(g) Existence of any compensation or benefit related to the occurrence of
certain corporate events, such as transfer of control of the issuer
Not applicable, since there is no component of management compensation
related to corporate events.
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13.2 - Total compensation of the board of directors, statutory officers and fiscal
council
Total compensation stipulated for the current fiscal year (2013) - Annual Amounts
Board of directors Statutory officers Fiscal Council Total
No. of members 12.00 5.00 17.00
Fixed annual compensation - - -
Salary or withdrawal 520,800.00 4,591,213.20 5,112,013.20
Direct and indirect benefits - 192,149.23 192,149.23
Attending committees 195,300.00 - 195,300.00
Other - 918,242.64 918,242.64
Description of other fixed
compensation items
No payment of INSS
(social security)
Social security
contributions (INSS)
-
Variable compensation - - -
Bonus - - -
Profit sharing - - -
Share in meetings - - -
Commission - - -
Other -
Description of other variable
compensation items -
Post-employment - - -
Leaving position - - -
Based on shares 6,216,161.54 18,672,647.84 - 24,888,809.37
Note Estimate using the total
number of options
exercised in 2012 and
exercise price or 2012.
Estimate using the total
number of options
exercised in 2012 and
exercise price or 2012.
-
Total compensation 6,932,261.54 24,374,252.91 31,306,514.45
Total compensation in period ended 12/31/2012 - Annual Amounts
Board of directors Statutory officers Fiscal Council Total
No. of members 11.50 5.00 3.00 19.50
Fixed annual compensation
Salary or withdrawal 355,000.00 4,180,276.66 89,402.00 4,624,678.66
Direct and indirect benefits - 177.096,06 177,096.06
Attending committees 165,000.00 - - 165,000.00
Other - 834,473.39 - 834,473.39
Description of other fixed
compensation items No payment of INSS
(social security) Social security
contributions (INSS) No payment of INSS
(social security) -
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Total compensation in period ended 12/31/2012 - Annual Amounts
Board of directors Statutory officers Fiscal Council Total
Variable compensation - - - -
Bonus - - - -
Profit sharing
Attending meetings 195,000.00 - - 195,000.00
Commission -
Other -
Description of other variable
compensation items No payment of INSS
(social security) - - -
Post-employment - - - -
Leaving position - - - -
Based on shares 6,216,161.54 18,672,647.84 - 24,888,809.37
Note Taking the total number of options exercised in 2012, under both the company’s program and the parent’s plans.
Taking the total number of options exercised in 2012, under both the company’s program and the parent’s plans.
Taking the total number of options exercised in 2012, under both the company’s program and the parent’s plans.
Total compensation 6,931,161.54 23,864,493.95 89,402,00 30,885,057.48
Total compensation in period ended 12/31/2011 - Annual Amounts
Board of directors Statutory officers Fiscal Council Total
No. of members 8.92 5.00 3.00 16.92
Fixed annual compensation
Salary or withdrawal 0.00 3,807,761.82 69.748,00 3,877,509.82
Direct and indirect benefits 0.00 173,292.35 0.00 173,292.35
Attending committees 120,000.00 0.00 0.00 120,000.00
Other 0.00 761,552.43 0.00 761,552.43
Description of other fixed
compensation items
No payment of INSS
(social security)
No payment of INSS
(social security)
No payment of INSS
(social security)
Variable compensation
Bonus 0.00 0.00 0.00 0.00
Profit sharing 0.00 0.00 0.00 0.00
Attending meetings 395,000.00 0.00 0.00 395,000.00
Commission 0.00 0.00 0.00 0.00
Other 0.00 0.00 0.00 0.00
Description of other variable
compensation items
N/A
Post-employment 0.00 0.00 0.00 0.00
Leaving position 0.00 0.00 0.00 0.00
Based on shares 9,378,841.05 27,500,757.20 0.00 36,879,598.25
Note Taking the total number of options exercised in
Taking the total number of options exercised in
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Total compensation in period ended 12/31/2011 - Annual Amounts
Board of directors Statutory officers Fiscal Council Total
2011, under both the company’s program and the parent’s plans.
2011, under both the company’s program and the parent’s plans.
Total compensation 9,893,841.05 32,243,363.80 69,748.00 42,206,952.85
Total compensation in the period ended 12/31/2010 - Annual Amounts
Board of directors Statutory officers Fiscal Council Total
No. of members 8.92 5.67 14.58
Fixed annual compensation
Salary or withdrawal 0.00 2,812,410.30 3,515,512.88
Direct and indirect benefits 0.00 155,961.52 155,961.52
Attending committees 445,000.00 0.00 445,000.00
Other 0.00 703,102.58 0.00
Description of other fixed
compensation items
No payment of INSS
(social security)
No payment of INSS
(social security)
Variable compensation
Bonus 0.00 0.00 0.00
Profit sharing 0.00 0.00 0.00
Attending meetings 0.00 0.00 0.00
Commission 0.00 0.00 0.00
Other 0.00 0.00 0.00
Description of other variable
compensation items
Post-employment 0.00 0.00 0.00
Leaving position 0.00 0.00 0.00
Based on shares 17,152,743.50 27,501,473.20 44,654,216.70
Note Taking the total number of options exercised in 2010, under both the company’s program and the parent’s plans.
Taking the total number of options exercised in 2010, under both the company’s program and the parent’s plans.
Total compensation 17,597,743.50 31,172,947.60 48,770,691.10
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13.3 - Variable compensation of the board of directors, statutory officers, and
fiscal council
There was no variable compensation related to bonuses or participation in results
in the last three fiscal years for members of the board of directors or statutory
officers. For 201, there is no provision for payment of bonuses or profit sharing.
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13.4 - Share-based compensation for the board of directors and statutory
officers
(a) General terms and conditions
Stock options granted by the controlling shareholder (“Controlling
Shareholder Plan”)
The Controlling Shareholder granted options to certain members of management
to purchase its shares and those of ENEVA and other companies controlled by the
Controlling Shareholder, namely MMX, LLX, OGX, OSX and CCX, which are not
recognized in result in accordance with accounting practices adopted in Brazil.
The stock options granted to these professionals may be exercised in the
proportion of 10% or 20% on each anniversary of their grant dates for periods of
up to 10 years, as stated in the corresponding individual grant contracts. Shares
acquired by exercising these options are subject to certain restrictions, including a
ban on sale of such shares within 36 months of signing the respective contracts.
Also note that these options refer to acquisition of shares held by the controlling
shareholder, so if they are exercised they will not require new shares to be issued
and therefore will not result in dilution of the equity of other company
shareholders.
Company Program to subscribe or purchase ENEVA shares (“Company
Program”):
The Extraordinary General Meeting held on November 26, 2007 approved a stock
option program consisting of grant of options to purchase or subscribe ENEVA
common shares for members of the board of directors, senior managers and other
Company employees, as well as those of other companies belonging to the
ENEVA Group. This program was altered and consolidated at general meetings
held on September 28, 2010, April 26, 2011 and January 26, 2012.
The latest consolidation of this program determines general guidelines to be
considered by our company’s management for options to purchase or subscribe
our company’s common shares granted to members of the Board of Directors,
executive board and employees, as well as those of other companies belonging to
the Group ENEVA . These guidelines state that:
(i) the total number of shares allocated to the program may not exceed 2% of
the total number of shares issued by our company, not including
authorized capital;
(ii) share value will be determined based on the market value of our shares
calculated as the simple average of their price over the 20 most recent trading
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sessions, counted as of the date - inclusive- of the participant’s appointment, in
all cases taking the daily average price at close of trading (“Share Value “).
(iii)the price for subscribing or buying shares will be calculated based on the
percentage of share value stated in the Option Agreement and will never be
less than 40% or more than 100% of said value (“Subscription Price “); and
(iv) the responsibility for administering the program was delegated to the board
of directors
Therefore, the board of directors shall:
(v) decide issues of shares under the program (art. 168, § 1, “b” of the Law of
Corporations);
(vi) within the parameters of the program, define periodic plans (referred to in
this Reference Form as “Company Plans”);
(vii) proceed to make any alterations in relation to Company Plans currently in
place;
(viii) take any other steps required to manage the Company Program, as
long as they do not lead to its being altered; and
(ix) propose alterations to the Company Program to be submitted to the
approval of extraordinary general meetings.
The board of directors shall also decide on the opportunity and convenience of
implementing said periodic plans in each year of the program’s duration, or not
doing so. If implemented, plans must at least state: (a) their duration; (b) the
maximum number of options that may be granted under each plan; and (c)
whether or not the trading of shares acquired by the exercise of the options will be
blocked, and the period stipulated for this blocking.
On the recommendation of its president, the board of directors shall opportunely
discuss and decide: (a) proposed participants for each Plan; (b) the respective
quantities of stock options; (c) subscription or purchase prices; and (d) other
conditions for acquiring the right to exercise the options.
(b) Principal objectives of the plan
Both the Controlling Shareholder Plan and the Company Program have the
following objectives: (i) align management and shareholder interest, encourage
continuous improvement of management to boost our enterprise value and that of
companies under our direct or indirect control; and (ii) attract, motivate and retain
highly qualified executives to our staff and increase the attractiveness of the
Company and ENEVA Group companies.
299
(c) State how the plan contributes to these objectives
Both the Controlling Shareholder Plan and the Company Program enable their
beneficiaries to become our company’s shareholders, thus encouraging them to
work to optimize all aspects that may add to the value of our company on a
sustainable basis.
(d) How does the plan mesh with the issuer’s compensation policy
The Company’s compensation policy seeks to encourage the professional growth
of its managers, employees and service providers, and value their individual merit.
In this sense, the Stock Option Program is in line with the Company’s
compensation policy as it allows its managers, employees and service providers
to measure their variable compensation in accordance with their personal
performance through the granting of stock options based on that merit.
(e) How does the plan align the interests of the issuer’s management with
issuer short- medium- and long-term interests
Controlling Shareholder Plan and Company Plans stipulate the exercise of options
in annual proportions for a period of up to ten years, depending on the plan.
Therefore, management’s gains are linked to the performance of our shares until
the last period for exercising options, thus boosting management’s commitment to
our company’s short-, medium- and long-term performance.
(f) Maximum number of shares covered
Under the Company Program, beneficiaries may be granted options to purchase
shares up to the limit of 2% of the total number of shares issued by our company,
computing in this calculation all options already granted but not yet exercised.
The maximum number of shares that may be covered by the Controlling
Shareholder Plan is determined by the Controlling Shareholder itself, and does
not follow a pre-established criterion, since such plan does not involve issuing
new shares and therefore will not cause dilution of shares of other company
shareholders.
(g) Maximum number of options to be granted
Under the Company Program, beneficiaries may be granted options to purchase
shares up to the limit of 2% of the total number of shares issued by our company,
computing in this calculation all options already granted but not yet exercised.
The maximum number of shares that may be covered by the Controlling
Shareholder Plan is determined by the Controlling Shareholder itself, and does
not follow a pre-established criterion, since such plan does not involve issuing
300
new shares and therefore will not cause dilution of shares of other company
shareholders.
(h) Conditions for acquiring shares
Once a member of management has been granted options under the Controlling
Shareholder Plan or Company Program, he or she shall: (i) remain with the
company until the date on which each portion of options vests, saving exceptions
stipulated in paragraph 16 of the Program; (ii) state their wish to exercise portions
within the maximum period stipulated in the contract; and (iii) pay the exercise
price set for the shares.
(i) Criteria for determining acquisition or exercise price
Under the Company Program, the option exercise price will be determined based
on market value of the shares calculated by the simple average of the price of the
Company’s shares in the latest 20 trading days as of the share grant date for a
given employees of the company, in all cases taking closing prices of each trading
session. The purchase or exercise price of each share will never be less than
40% or more than 100% of the market value of the shares. Prices may also be
updated by IPCA inflation as announced by IBGE.
Under the Controlling Shareholder Plan, purchase or exercise is determined at the
discretion of the Controlling Shareholder.
(j) Criteria for determining exercise period
In the Company program, the maximum period for option exercise is stated in the
respective stock option contracts. This period shall not exceed one year as of
period of maturity of the last portion of options granted under the respective option
contract.
(k) Means of payment
Subscription or purchase of stock options granted under the Program and Plan,
as applicable, must be paid cash from the beneficiary’s own funds. The same
criteria apply to stock options granted by our controlling shareholder in favor of
executives.
For options granted under the Company Program, exceptionally, the Company’s
board of management may authorize Participants to pay a minimum portion
equivalent to 10% of total subscription price at the time of purchase, with the
remaining 90% to be paid within thirty days of the date of the first payment.
(I) Restrictions on transfer of shares
301
The Controlling Shareholder Plan does not allow trading in shares it has granted
for 36 months as of signing contracts.
Under the Company Plans, some contracts stipulate restriction on trading shares
within three years of signing the contract.
(m) Criteria and events that may lead to suspension, amendment or
termination of the plan
The occurrence of factors that cause severe alterations in the economic outlook
and compromise the Company’s financial condition may lead to modification or
termination of the Program, including in relation to plans already in place and
stock options already granted but not yet exercised. However, note that it is the
incumbency of extraordinary general meetings to approve, alter, suspend or
terminate the Company’s Stock Option Plan.
(n) Effects of manager’s leaving issuer on rights stipulated in share-
based compensation plan
In the Company Program, dismissal cases will be treated as follows:
Dismissal for cause or upon request: (a) unvested options will be cancelled; and
(b) vested options, which were not exercised yet, may no longer be exercised e
and will be equally cancelled.
Dismissal without cause: (a) unvested options will be cancelled; and (b) vested
options, which were not exercised yet, may be exercised, provided that the
conditions set forth in the respective Stock Options Agreement are complied with,
and it is hereby agreed that the maximum term for exercise the options may be
anticipated in this case, according to the resolution of the competent agency or as
set forth in the respective Stock Options Agreement.
Dismissal for retirement for length of service or age: (a) unvested options will be
cancelled; and (b) vested option, which were not exercised yet, may be exercised
within 90 days counted from the date of approval by the National Social Security
Institute (“INSS”) of the request for retirement for length of service or age.
Permanent disability retirement: (a) unvested options will be cancelled upon
termination of the employment agreement due to the granting of permanent
disability retirement, and the Company may establish otherwise in specific cases;
and (b) vested options, which were not exercised yet, may be exercised by the
disabled participant or his/her legal representative (curator) by presenting to the
Company the respective proof of granting of permanent disability retirement
issued by the INSS and respective termination of employment agreement within
302
180 days counted from the date of approval by the INSS of the request for
permanent disability retirement.
Dismissal for the Participant’s death: (a) unvested options will be cancelled after
the Participant’s death, and the Company may establish otherwise in specific
cases; and (b) vested options, which were not exercised yet, may be exercised by
the administrator, as duly defined in the regular probate proceeding, by presenting
to the Company the respective administrator’s commitment agreement, as
appointed by the competent court, within 180 days counted from the appointment
of the administrator by the court, or, in the event of extrajudicial probate
proceeding by the office of the notary public, it is hereby agreed that, if the
probate proceeding is not initiated within six months counted from the date of
death, the vested options will be also cancelled automatically.
With respect to the Controlling Plan, the dismissal of the manager implies the loss
of unvested options.
303
13.5 - Holdings in shares, units or other convertible securities held by
management and fiscal council members - by body
ENEVA LLX Shares MMX
Shares OGX Shares OSX Shares CCX Shares MMX EBX
Board of
directors 314,039,932
(1) 379,182,412 291,409,972 1,876,871,146 227,735,679 106,468,544 670,411,925 202,958,276
Management 2,941,360 - - 1 - 410,693 - -
Fiscal Council - - - - - - - -
(1) Corresponds to the sum of the number of shares presented to the Controlling Shareholder and the Board of Directors
in consolidated trading form for management and related parties referring to December 2012, made available via IPE
system on January 10, 2013.
304
13.6 - Share-based compensation for the board of directors and statutory
officers
Company’s stock option plan:
Share-based compensation estimated for the current financial year (2013)
Board of Directors Statutory Management
Number of members 04 -
Grant of stock options
Grant date 11/26/2007 -
Quantity of stock options granted 528,000 -
Final vesting date for options The options will be
exercised in the
proportion of 20% on
each of the first five
grant-date anniversaries
of the public offering held
on December 13 2007
-
Final date for exercising options 1 year after maturing -
Transfer restriction period none -
Weighted average price for period:
(a) Options outstanding at beginning of year 1.07 -
(b) Options forfeited during the period - -
(c) Options exercised during the period 1.07 -
(d) Options expired during the period - -
Fair value of options on grant date(1)
R$16.03 -
Potential dilution if all options granted were to be exercised 0.02% -
(1) The calculation of the fair value of options takes into account the total number of shares included in the
Company’s Stock Options Plan that may be subscribed or acquired in the proportion of 20% per year and in the
event of full option exercise.
Share-based
compensation –
financial year ended
12/31/2012
Management
Number of members 04 -
Grant of stock options
Grant date 11/26/2007 -
Quantity of stock options granted 528,000 -
Final vesting date for options Options will be
exercised in the
-
305
Share-based
compensation –
financial year ended
12/31/2012
Management
proportion of 20% on
each of the first five
grant-date
anniversaries of the
public offering held on
December 13, 2007
Final date for exercising options 1 year after maturing
“Restricted period for sale or transfer of
shares”
none
Weighted average price for period2: - - - -
(a) Options outstanding at beginning of
year
1.01 -
(b) Options lost during the period - - - -
(c) Options exercised in the period - -
(d) Options expired in period - - - -
Fair value of options on grant date(1)
R$16.03 -
Potential dilution if all options granted were to
be exercised 0.02% -
(1) The calculation of the fair value of options takes into account the total number of shares included in the
Company’s Stock Options Plan that may be subscribed or acquired in the proportion of 20% per year and in the
event of full option exercise.
Share-based compensation – financial year ended 12/31/2011
Board of Directors Statutory Management
Number of members 04 -
Grant of stock options
Grant Date 11/26/2007 -
Quantity of stock options granted 528,000 -
Final vesting date for options Options will be exercised
in the proportion of 20%
on each of the first five
grant-date anniversaries
of the public offering held
on December 13, 2007
-
Final date for exercising options 1 year after maturing -
Transfer restriction period none -
Weighted average price for period:
306
Share-based compensation – financial year ended 12/31/2011
Board of Directors Statutory Management
(a) Options outstanding at beginning of year 0.96 -
(b) Options forfeited during the period - -
(c) Options exercised in the period 0.96 -
(d) Options expired in the period - -
Fair value of options on grant date(1)
R$16.03 -
Potential dilution if all options granted were to be exercised 0.02% -
(1) The calculation of the fair value of options takes into account the total number of shares included in the
Company’s Stock Options Plan that may be subscribed or acquired in the proportion of 20% per year and in the
event of full option exercise.
Share-based compensation – financial year ended 12/31/2010
Board of Directors Statutory Management
Number of members 04 -
Grant of stock options
Grant Date 11/26/2007 -
Quantity of stock options granted 528,000 -
Final vesting date for options Options will be exercised
in the proportion of 20%
on each of the first five
grant-date anniversaries
of the public offering held
on December 13, 2007
-
Final date for exercising options 1 year after maturing -
Transfer restriction period none -
Weighted average price for period:
(a) Options outstanding at beginning of year 0.9 -
(b) Options forfeited during the period - -
(c) Options exercised in the period - -
(d) Options expired in the period - -
Fair value of options on grant date(1)
R$16.03 -
Potential dilution if all options granted were to be exercised 0.02% -
(1) The calculation of the fair value of options takes into accounts the total number of stocks included in the
Company’s Stock Option Plan, which might be subscribed or acquired in the proportion of 20% per year and in the
event of full option exercise.
Parent company’s stock option plan
307
Share-based compensation for the current financial year (2013)
Board of Directors Board of Directors
Statutory
Management
Number of members 01 01 05
Grant of stock options
Grant date 04/28/2008 04/28/2008 04/28/2008
Quantity of stock options granted 1,295,940 2,885,400 17,312,640
Final vesting date for options Options will be
exercised in the
proportion of 20%
on December 13 of
each year
Options will be
exercised in the
proportion of 10% on
December 13 of each
year
Options will be
exercised in the
proportion of 10%
on December 13 of
each year
Final date for exercising options 1 year after maturing 1 year after maturing 1 year after
maturing
Transfer restriction period None None None
Weighted average price for period:
(a) Options outstanding at beginning of
year
R$0.01 R$0.01 R$0.01
(b) Options forfeited during the period - - -
(c) Options exercised in the period R$0.01 R$0.01 R$0.01
(d) Options expired in the period - - -
Fair value of options on grant date) R$15.83 R$15.83 R$15.83
Potential dilution if all options granted
were to be exercised None None None
Share-based compensation – financial year
ended 12/31/2012
Board of directors Board of directors
Statutory
Management
Number of members 01 01 05
Grant of stock options
Grant date 04/28/2008 04/28/2008 04/28/2008
Quantity of stock options granted 1,295,940 2,885,400 17,312,640
Final vesting date for options Options will be
exercised in the
proportion of 20% on
December 13 of each
year
Options will be
exercised in the
proportion of 10%
on December 13 of
each year
Options will be
exercised in the
proportion of 10%
on December 13 of
each year
Final date for exercising options 1 year after maturing 1 year after maturing 1 year after maturing
Transfer restriction period none none none
Weighted average price for period:
(a) Options outstanding at beginning of year R$0.01 R$0.01 R$0.01
(b) Options forfeited during the period - -
308
Share-based compensation – financial year
ended 12/31/2012
Board of directors Board of directors
Statutory
Management
(c) Options exercised in the period R$0.01 R$0.01 R$0.01
(d) Options expired in period - -
Fair value of options on grant date R$15.83 R$15.83 R$15.83
Potential dilution if stock options granted
were exercised in the period none none
none
Share-based compensation – financial
year ended on 12/31/2011
Board of Directors
Board of Directors Statutory
Management
Number of members 01 01 05
Grant of stock options
Grant date 04/28/2008 04/28/2008 04/28/2008
Quantity of stock options granted 1,295,940 2,885,400 17,312,640
Final vesting date for options Options will be
exercised in the
proportion of 20% on
December 13 of each
year
Options will be
exercised in the
proportion of 10% on
December 13 of each
year
Options will be
exercised in the
proportion of 10% on
December 13 of each
year
Final date for exercising options 1 year after maturing 1 year after maturing 1 year after maturing
Transfer restriction period none none none
Weighted average price for period:
(a) Options outstanding at beginning of
year
R$0.01 R$0.01 R$0.01
(b) Options forfeited during the period - - -
(c) Options exercised in the period R$0.01 R$0.01 R$0.01
(d) Options expired in period -
Fair value of options on grant date
(R$’000)
R$15.83 R$15.83 R$15.83
Potential dilution if stock options granted
were exercised in the period none
none none
Share-based compensation – financial year ended on 12/31/2010
Board of Directors Board of Directors
Statutory
Management
Number of members 01 01 05
Stock Options Grant
Grant date 04/28/2008 04/28/2008 04/28/2008
Quantity of stock options granted 1,295,940 2,885,400 17,312,640
309
Share-based compensation – financial year ended on 12/31/2010
Board of Directors Board of Directors
Statutory
Management
Final vesting date for options Options will be
exercised in the
proportion of 20%
on December 13 of
each year
Options will be
exercised in the
proportion of 10% on
December 13 of each
year
Options will be
exercised in the
proportion of 10%
on December 13 of
each year
Final date for exercising options 1 year after maturing 1 year after maturing 1 year after
maturing
Transfer restriction period none none none
Weighted average price for period:
(a) Options outstanding at beginning of
year
R$0.01 R$0.01 R$0.01
(b) Options forfeited during the period - - -
(c) Options exercised in the period
R$0.01 R$0.01 R$0.01
(d) Options expired in period - - -
Fair value of options on grant date (R$’000) R$15.83 R$15.83 R$15.83
Potential dilution if stock options granted were
exercised in the period none none none
310
13.7 - Details of outstanding options held by the board of directors and
statutory officers
Company’s stock option plan
Outstanding options at the year ended December 31, 2012
Year ended December 31, 2012
Board of directors
No. of members 4
Options yet to vest
Quantity -
Vesting date -
Final date for exercising options -
Transfer restriction period none
Weighted average price for period -
Fair value of options on last day of period R$0.00
Options vested
Quantity 84,480
Final date for exercising options 1 year after maturing
Transfer restriction period none
Weighted average price for period R$1.01
Fair value of options on last day of period R$10,14
Fair value of total options on last day of period R$856,627,20
Parent company’s stock option plan
Outstanding options at the year ended December 31, 2012
No. of members 01 01 05
Options yet to vest
Quantity 0 1,442,700 8,656,320
Date becoming exercisable Options will be exercised in
the proportion of 20% on
December 13 of each year
Options will be exercised in
the proportion of 10% on
December 13 of each year
Options will be
exercised in the
proportion of 10% on
December 13 of each
year
Outstanding options at the year ended December 31, 2012
Final date for exercising options 1 year after vesting 1 year after vesting
Transfer restriction period - - -
Weighted average price for period R$0.01 R$0.01 R$0.01
311
Fair value of options on last day of
period
R$0.00 R$0.01 R$0.01
Exercisable options
Quantity 259,200 288,540 1,731,264
Final date for exercising options 12.13.2013 12.13.2013 12.13.2013
Transfer restriction period - - -
Weighted average price for period R$0.01 R$0.01 R$0.01
Fair value of options on last day of
period
R$11,14 R$11,14 R$11,14
Fair value of total options on last
day of period
2,887,448.00 3,228,762.60 19,372,844.16
312
13.8 - Options exercised and shares delivered in relation to share-based
compensation for the board of directors and statutory officers
Company’s stock option plan
Options exercised - Period ended 31/12/ 2012
Board of directors
Number of members 04
Options exercised
Number of shares 0
Weighted average price for period R$0.00
Difference between exercise price and share price for
options exercised R$0.00
Shares delivered
Number of shares 0
Weighted average price for period R$0.00
Options exercised - Period ended 31/12/ 2011
Board of directors
Number of members 04
Options exercised
Number of shares 35,140
Weighted average price for period R$3.52
Difference between exercise price and share price for
options exercised R$1,510,317.20
Shares delivered
Number of shares 0
Weighted average price for period R$0.00
Options exercised - Period ended 31/12/ 2010
Board of directors
Number of members 04
Options exercised
Number of shares 0
Weighted average price for period R$0.00
Difference between exercise price and share price for
options exercised R$0.00
Shares delivered
Number of shares 0
Weighted average price for period R$0.00
313
Parent company’s stock option plan
Options exercised - Period ended 31/12/ 201
Board of
directors Management
Number of members 02 05
Options exercised ENEVA ENEVA
Number of shares 547,740 1,731,240
Weighted average price
for period R$0.01 R$0.01
Difference between
exercise price and share
price for options
exercised R$6,101,823.60 R$19,286,013.60
Shares delivered
Number of shares 0 0
Weighted average price
for period R$0.00 R$0.00
Options exercised - Period ended 12/31/ 2011
Board of
directors Management
Number of members 02 05
Options exercised ENEVA ENEVA MMX LLX
Number of shares 182,580 577,080 10,640 10,640
Weighted average price
for period R$0.01 R$0.01 R$0.01 R$0.01
Difference between
exercise price and share
price for options
exercised R$8,488,144.20 R$26,828,449.20 R$70,862.40 R$35,750.40
Shares delivered
Number of shares 0 0 0 0
Weighted average price
for period R$0.00 R$0.00 R$0.00 R$0.00
Options exercised - Period ended 12/31/ 2010
Board of
directors Management
Number of members 03 06
Options exercised ENEVA MMX LLX
Number of shares 258,440 673,260 10,720 10,720
Weighted average price
for period R$0.01 R$0.01 R$0.01 R$0.01
314
Options exercised - Period ended 12/31/ 2010
Board of
directors Management
Difference between
exercise price and share
price for options
exercised R$5,812,315.60 R$15,141,317.40 R$107,307.20 R$108,272.00
Shares delivered
Number of shares 0 0 0 0
Weighted average price
for period R$0.00 R$0.00 R$0.00 R$0.00
315
13.9 - Information required to understand figures disclosed in items 13.6 to 13.8
- Pricing method for shares and options
(a) Pricing model
Company’s Program
To determine the fair value of the stock options program, the Merton (1973)
model, a variant of the Black & Scholes (1973) model, which takes into account
dividend payment, was used.
Controller Plan
To determine the fair value of the stock options program of the Company’s
Program, the Black & Scholes model was used.
(b) Data and assumptions used in the pricing model, including the
weighted average price of shares, exercise price, expected volatility, term of
the option, expected dividends and risk-free interest rate
Company’s Program
(i) Determination of expected volatility
The limited historical series of quotes of ENEVA shares on the stock exchange
does not guarantee a reliable projection of future volatility of prices from past data.
Therefore, the Electric Power Index-IEE, the first sector index released by
BM&FBOVESPA in August 1996, was used as a proxy. The sector indexes are
designed to provide a segmented view of the stock market behavior. The
definition of time window to estimate expected future volatility (that is, the extent
of the historical data series examined) was also maintained as equal to the T term
of the option to which it will be applied in the pricing.
(ii) Expected Dividend Rate
ENEVA has not distributed any amounts as dividends or interest on shareholders’
equity since its incorporation. Therefore, the hypothesis that dividends will not be
paid during the effectiveness of the stock options program was upheld.
(iii) Risk-Free Rate
Reference rates were used for adjustments of SWAP agreements with IPCA
coupon, disclosed by BM&FBOVESPA.
(iv) Program Abandonment Rate
316
There has been no record of abandonment by the executive officers participating
in the incentive program since its establishment.
Controller’s Plan
(i) Determination of expected volatility
To calculate share volatility, in those cases where there was no historical series of
share price, an approximation through average beta of similar companies was
used and applied to the Bovespa index.
The definition of time window to estimate expected future volatility (that is, the
extent of the historical data series examined) was also maintained as equal to the
T term of the option to which it will be applied in the pricing.
(ii) Expected Dividend Rate
As of the granting date, there was no estimated payment of dividends or interest
on shareholders’ equity. For this reason, the hypothesis that no dividends will be
paid during the effectiveness of the Company’s Program was taken into
consideration.
(iii) Risk-Free Rate
The risk-free interest rate was determined based on market projections.
(iv) Program Abandonment Rate
There has been no record of abandonment by the executive officers participating
in the incentive program since its establishment.
(c) Method and assumptions used to incorporate the effects expected
from early exercise
Company’ Program
The Company’s Program 1 sets forth that options granted under the Plan may be
exercised as follows: (i) 20% per year, at the end of years 1 to 5, counted from the
execution of the corresponding Stock Options Agreement, according to the terms
and conditions established by the Board of Directors and the terms and conditions
set forth in the Stock Options Agreements.
Options granted under the terms of the other Company’s Plans may be exercised
as follows: (i) 10% per year, at the end of years 1 to 4; (ii) 20% per year, at the
end of years 5 to 7, counted from execution of the corresponding Stock Options
Agreement, according to the terms and conditions established by the Board of
317
Directors and under the terms and conditions set forth in the Stock Options
Agreements.
Controller’s Plan
Options granted under the terms of the Plan may be exercised as follows: (i) 10%
per year, at the end of years 1 to 10, counted from the date of ENEVA ’s initial
public offering, December 13, 2007, according to the terms and conditions set
forth in the respective Stock Options Agreements.
For each of the Plans referred to above, the Company determined a period of time
in which the beneficiary may exercise the option. This period is one year, counted
from the date of maturity of the option. The Beneficiary may not exercise the
option before this period.
(d) Determination of expected volatility
It is calculated using continuous returns of historical quotation of MPXE3 stock.
(e) If any other characteristic of the option has been incorporated into the
measurement of its fair value
All characteristics of the option were mentioned in the previous items of this
Reference Form.
318
13.10 - Information on pension plans provided to members of the board of
directors and statutory officers
The Company does not provide a pension plan to its managers.
319
13.11 Maximum, minimum and average compensation of the board of directors, statutory board and fiscal council
Annual amounts
Statutory Executive Board Board of Directors Fiscal Council
12/31/2012 12/31/2011 12/31/2010 12/31/2012 12/31/2011 12/31/2010 12/31/2012 12/31/2011
No. of members 5.00 5.00 5.67 11.50 8.92 8.92 3.00 3.00
Amount of highest compensation (Reais)
7,629,278.95 10,447,471.83 10,154,436.92 3,112,107.97 4,567,588.20 6,854,183.20 29,800.67 23,249.00
Amount of lowest compensation (Reais)
4,011,040.97 5,403,586.68 5,218,405.88 70,000.00 151,623.37 51,000.00 29,800.67 23,249.00
Average amount of compensation (Reais)
4,772,898.79 6,448,672.76 5,497,874.36 705,102.90 1,109,175.01 1,972,841.20 29,800.67 23,249.00
Note
Statutory Executive Board
Board of Directors
12/31/2012 For the calculation, we excluded the three board members who waived the compensation. In this case, the number used was 9.83 members.
Fiscal Council
320
13.12 - Compensation and indemnification mechanisms for management in the
event of removal from office or retirement
The Company has no contractual arrangements, insurance policies or other
instruments for structuring compensation or indemnification mechanisms for the
managers in the event of removal from office or retirement.
321
13.13 - Percentage of total compensation held by management and members of
the fiscal council who are parties related to the controlling shareholders
2010 2011 2012
Board of Directors 89% 91% 91%
Statutory Executive Board 0% 32% 0%
Fiscal Council - - -
322
13.14 - Compensation of management and members of the fiscal council,
grouped by body, received for any reason other than the office they hold
There was no compensation payment to the Board of Directors or Executive
Board members for any reason other than the position they hold.
323
13.15 - Compensation of management and members of the fiscal council
recognized in income of controlling shareholders, whether direct or indirect,
companies under common control and subsidiaries of the issuer
MMX/LLX/
OGX/EBX/OSX (1)
MMX/LLX/
OGX/EBX/OSX (1)
MMX/LLX/
OGX/OSX/CCX/EBX
(1)
2010 2011 2012
Board of Directors 60,365,501.59 4,693,307 3,798,624
Executive Board - -
Fiscal Council - -
Other - -
(1) MMX Mineração e Metálicos S.A.
LLX Logística S.A.
OGX Petróleo e Gás Participações S.A.
OSX Brasil S.A.
EBX Investimentos Ltda.
CCX Carvão da Colômbia S.A.
324
13.16 - Other relevant information
Clarifications about item 13.2 of the Reference Form
The Company wishes to clarify that in notes 15 and 17 to the FiNANCIAL Statements of 2012 and 2011, respectively, the salary line refers to the sum total of commissions, direct and indirect benefits and social security contributions of the executive officers and directors of the Company and its subsidiaries. The difference between what is shown in this Reference Form and in the financial statements of the Company arises because the financial statements present the values assigned to the statutory and non-statutory managers of the Company and its subsidiaries, while item 13.2 of this Reference Form requires the submission of information concerning the Statutory Board only, as shown in the following table.
Ano Conselho de
AdministraçãoDiretoria Estatutária Conselho Fiscal
Total Formulário de
Referência
Demais Diretores da
Companhia e suas
controladas
Total das
Demonstrações
Financeiras
(A) (B) (C ) (A) + (B) + (C ) (D) (A) + (B) + (C ) + (D)
2010 445.000 3.671.474 - 4.116.474 1.537.961 5.654.436
2011 515.000 4.742.607 69.748 5.327.355 5.152.819 10.480.173
2012 715.000 5.191.846 89.402 5.996.248 3.702.157 9.698.405
Year
Board of directors
Statutory Board
Fiscal Council
Total Reference Form
Other Officers of the Company and its subsidiaries
Total Financial Statements
In the case of share-based compensation, it is important to point out that the
accounting practices adopted in Brazil and the IFRS, notably CPC 10 (R1) –
Share-based compensation (equivalent to IFRS 2), paragraph 12, require the
stock option granted to employees, board members and executives to be shown
at fair value, as disclosed by the Company in note 23 to its 2012 financial
statements, and in note 25, Share-based payment plan, to the 2011 financial
statements. In this note we showed two tables: the first containing the
accumulated position showing the fair value of all options not yet exercised by the
participants, and the second, showing the effect on income (expense) of the fair
value of the options ascertained for the period disclosed.
Also in the financial statements for 2012 and 2011 we presented information
regarding the accumulated position under liabilities, respectively in notes 15 and
17 – Related parties, item d.
Therefore in order to cross the information shown in the reference form, regarding
the stock options plans, we have to use the information in note 22, Share-based
payment plans, in the table showing the income (expense) position ascertained in
the period. The amounts shown in the table differ from those in the reference form
325
because the Company’s financial statements show the amounts allocated to all
company employees (including members of the Board of Directors), while the
reference form shows only the amounts allocated to the members of the Board of
Directors and the Statutory Executive Board. The amounts below are shown in
millions of R$.
Conselho de
Administração
Diretoria
Estatutária
Total Formulário
de Referência
Demais
Colaboradores
Total
Demonstrações
Financeiras
(A) (B) (A)+(B) (C) (A)+(B)+(C)
2012 6,216 18,673 24,889 22,390 47,279
2011 9,379 27,501 36,880 13,894 50,774
2010 17,153 27,501 44,654 (44,654) 64,821 Board of Directors Statutory Board Total Reference Form Other employees Total Financial Statements
This notwithstanding, the Company agrees to inform in future disclosures, in the note on related parties, that the balances shown refer to the accumulated liability position of the fair values calculated on the options granted.
326
14.1 - Description of human resources
(a) Number of employees (total, by groups based on the activity
performed and by geographic location)
The table below shows the number of Company employees by administrative and
operational positions.
On December 31,
2010 2011 2012 03/31/2013
Administrative 148 119 159 165
Operational 237 461 490 482
Total 385 580 649 647
The table below shows the number of Company employees by geographic
location of our industrial complexes.
Location 2010 2011 2012 03/31/2013
AMAPARI ENERGIA S/A Amapá 29 30 36 34
MPX COMERCIALIZADORA COMBUSTIVEIS LTDA.
Rio de Janeiro - 3 3 3
MPX COMERCIALIZADORA DE ENERGIA LTDA. Rio de Janeiro - 6 10 10
ENEVA SA Rio de Janeiro 112 119 88 87
MPX EON PARTICIPAÇÕES Rio de Janeiro - - 58 65
MPX PECÉM II E TRANSPORTADORA MINERIOS Ceará 14 21 31 29
MPX TAUA ENERGIA SOLAR LTDA. Ceará - 2 2 1
PORTO DO PECÉM GERAÇÃO DE ENERGIA SA Ceará 100 163 208 199
UTE MPX SUL ENERGIA LTDA. Rio Grande do Sul 6 2 1 1
USINA TERM SEIVAL Rio Grande do Sul - - 1 1
UTE PARNAIBA GERAÇÃO DE ENERGIA SA Maranhão - 35 77 61
UTE PARNAIBA II GERAÇÃO DE ENERGIA SA Maranhão - - 29 61
UTE PORTO DO AÇU ENERGIA SA Rio de Janeiro 4 1 1 1
UTE PORTO DO ITAQUI GER DE ENERGIA SA Maranhão 58 92 88 80
MPX CHILE Chile 12 23 16 11
MPX COLOMBIA * Colombia 50 83 - -
MPX TAUA II ENERGIA SOLAR LTDA. Ceará - - 1 1
UTE PARNAIBA IV GERAÇÃO DE ENERGIA S.A. Maranhão - - 2 2
TOTAL 385 580 649 647
* MPX COLOMBIA is no longer part of the ENEVA group of companies
327
(b) Number of contractors (total, by groups based on the activity
performed and by geographic location)
The table below shows the number of Company contractors by administrative and
operational positions.
On December 31,
2010 2011 2012 03/31/2013
Administrative / General
Services
17 16 11 22
Legal 4 - 3 2
Project Engineering 2 21 41 78
Finance 5 4 9 2
Total 28 41 64 104
The table below shows the number of Company employees by geographic
location of our industrial complexes.
Location 2010 2011 2012 03/31/2013
AMAPARI ENERGIA S/A Amapá - - - 1
MPX COMERCIALIZADORA COMBUSTIVEIS LTDA.
Rio de Janeiro - - - 0
MPX COMERCIALIZADORA DE ENERGIA LTDA. Rio de Janeiro - - - 0
ENEVA SA Rio de Janeiro 28 41 64 6
MPX EON PARTICIPAÇÕES Rio de Janeiro 2 6
MPX PECÉM II E TRANSPORTADORA MINERIOS Ceará - - - 16
MPX TAUA ENERGIA SOLAR LTDA. Ceará - - - 0
PORTO DO PECÉM GERAÇÃO DE ENERGIA SA Ceará - - - 4
UTE MPX SUL ENERGIA LTDA. Rio Grande do Sul - - - 0
USINA TERM SEIVAL Rio Grande do Su - - - 0
UTE PARNAIBA GERAÇÃO DE ENERGIA SA Maranhão - - - 21
UTE PARNAIBA II GERAÇÃO DE ENERGIA SA Maranhão - - - 24
UTE PORTO DO AÇU ENERGIA SA Rio de Janeiro - - - 0
UTE PORTO DO ITAQUI GER DE ENERGIA SA Maranhão - - 8 21
MPX CHILE Chile 1 2 5 5
MPX COLOMBIA * Colombia - -
TOTAL 28 41 79 104
* MPX COLOMBIA is no longer part of the ENEVA group of companies
(c) Turnover rate
328
In 2010, the number of terminations in ENEVA and its subsidiaries was 31
people, or 8% of the total. In 2011, the number of terminations in ENEVA and its
subsidiaries was 45 people, or 7.7% of the total. In 2012, the number of
dismissals in ENEVA and its subsidiaries was 79 people, or 12.17% of the total.
In March 31, 2013, the number of terminations in ENEVA and its subsidiaries was
71 people, or 8.04% of the total.
(d) Company’s exposure to labor liabilities and contingencies
For more information about our exposure to labor liabilities and contingencies, see
item 4.3 of this Reference Form.
329
14.2 Relevant changes - Human resources
There has been no relevant changes with respect to figures disclosed in item 14.1
above.
330
14.3 - Description of employee compensation policy
(a) Salary and variable compensation policy
The Company’s compensation strategy uses the market as a reference, taking
into account the main competitors and largest companies in Brazil, seeking to
comply with best practices and ensuring its competitiveness. The main purpose is
to recognize the performance of its professionals as the company evolves, as per
the strategic planning defined and aligned with the return to shareholders in the
short, medium and long term.
(b) Benefit policy
The benefits provided by the Company include Health and Dental Plan that are
extend to their families, in addition to Life Insurance, Meal Voucher, Food Voucher
and Transportation Ticket.
(c) characteristics of share-based compensation plans of non-
management employees
i) Groups of beneficiaries: The members of the Board of Directors, officers,
managers, consultants and employees of the Company, as well as other
companies belonging to the ENEVA Group, are eligible to participate in the Stock
Options Plan of the Company.
ii, iii, iv) The characteristics of the share-based compensation plans for employees
are identical to those of the share-based compensation plans for managers, in
particular to those described in (b), (c) and (d) of sub-item 13.4 above.
v) Number of shares committed to the Program: 11,550,599 common shares.
331
14.4 - Description of relationship between issuer and unions
The “Collective Labor Agreement” and “Profit Sharing Agreement” were
unanimously approved by the Company’s employees, aiming at improving working
conditions in ENEVA . ENEVA values the commitment and transparency between
its employees and the category union (SINTERGIA – Union of Workers in of
Power Energy Companies of Rio de Janeiro and Region), where dialogue flows
respectfully and effectively, maintaining a policy of permanent negotiation with the
representatives of the employees of the Company.
332
15.1 / 15.2 - Shareholder structure
Shareholder
Shareholder’s Individual Taxpayers Register (CPF) / National Corporate Taxpayers Register (CNPJ)
Nationality-State Party to shareholders’ agreement Controlling shareholder Last change
Number of common shares (Units) % Common shares Number of preferred shares (Units) % Preferred Shares Total qty. of shares (Units) % Total shares
Breakdown by classes of shares (Units)
Share Class Qty. of shares (Units) % Shares
BNDES Participações S.A.
00.383.281/0001-09 Brazilian No No 09/16/2012
72,650,210 10.341505% 0 0.000000% 59,823,537 10.341505%
DD BRAZIL HOLDINGS S.Á.R.L
15.543.256/0001-12 Luxembourgish Yes Yes 09/16/2013
266,269,556 37.902548% 0 0.000000% 209,414,153 37.902548%
Centennial Asset Brazilian Equity Fund LLC
12.055.153/0001-15 North American No Yes 09/16/2012
1,822,065 0.259365% 0 0.000000% 1,822,065 0.259365%
Eike Fuhrken Batista
664.976.807-30 Brazilian-MG Yes Yes 09/16/2013
145,704,988 20.740600% 0 0.000000% 145,704,988 20.740600%
Centennial Asset Mining Fund LLC
07.732.392/0001-22 North American No Yes 09/16/2012
20,208,840 2.876658% 0 0.000000% 20,208,840 2.876658%
OTHER
195,855,310 27.879324% 0 0.000000% 141,506,379 27.879324%
TREASURY SHARES – Date of last change:
0 0.000000% 0 0.000000% 0 0.000000%
333
Shareholder
Shareholder’s Individual Taxpayers Register (CPF) / National Corporate Taxpayers Register (CNPJ)
Nationality-State Party to shareholders’ agreement Controlling shareholder Last change
Number of common shares (Units) % Common shares Number of preferred shares (Units) % Preferred Shares Total qty. of shares (Units) % Total shares
Breakdown by classes of shares (Units)
Share Class Qty. of shares (Units) % Shares
TOTAL
702,510,969 100.000000% 0 0.000000% 702,510,969 100.000000%
334
15.1 / 15.2 – Shareholding structure
PARENT COMPANY / INVESTOR
SHAREHOLDER
Shareholder’s CPF / CNPJ Nationality-State Party to shareholders’ agreement Controlling shareholder Last change
Breakdown of shares (Units)
Number of common shares (Units) % Common shares Number of preferred shares (Units) % Preferred Shares Total qty. of shares (Units) % Total shares
PARENT COMPANY / INVESTOR Shareholder’s CPF / CNPJ Share capital ownership
Centennial Asset Brazilian Equity Fund LLC 12.055.153/0001-15
Centennial Asset Mining Fund LLC
07.732.392/0001-22 North American No Yes 07/21/2010
1.000 100.000000 0 0.000000 1,000 100.000000
Share Class Qty. of shares (Units) % Shares
TOTAL 0 0.000000
OTHER
0 0.000000 0 0.000000 0 0.000000
TOTAL
1,000 100.000000 0 0.000000 1,000 100.000000
335
15.1 / 15.2 – Shareholding structure
PARENT COMPANY / INVESTOR
Shareholder
Shareholder’s CPF / CNPJ Nationality-State Party to shareholders’ agreement Controlling shareholder Last change
Breakdown of shares (Units)
Number of common shares (Units) % Common shares Number of preferred shares (Units) % Preferred Shares Total qty. of shares (Units) % Total shares
PARENT COMPANY / INVESTOR Shareholder’s CPF / CNPJ Share capital ownership
Centennial Asset Mining Fund LLC 07.732.392/0001-22
Eike Fuhrken Batista
664.976.807-30 Brazilian-MG No Yes December 10, 2010
1,000 100.000000 0 0.000000 1,000 100.000000
Share Class Qty. of shares (Units) % Shares
TOTAL 0 0.000000
OTHER
0 0.000000 0 0.000000 0 0.000000
TOTAL
1,000 100.000000 0 0.000000 1,000 100.000000
336
15.1 / 15.2 – Shareholding structure
PARENT COMPANY / INVESTOR
Shareholder
Shareholder’s CPF / CNPJ Nationality-State Party to shareholders’ agreement Controlling shareholder Last change
Breakdown of shares (Units)
Number of common shares (Units) % Common shares Number of preferred shares (Units) % Preferred Shares Total qty. of shares (Units) % Total shares
PARENT COMPANY / INVESTOR Shareholder’s CPF / CNPJ Share capital ownership
DD Brazil Holding S.À R.L. 00.000.000/0000-00
Dutchdelta Finance S.À R.L.
00.000.000/0000-00 Luxembourgish No Yes May 15, 2012
400,500 100.000000 0 0.000000 400,500 100.000000
Share Class Qty. of shares (Units) % Shares
TOTAL 0 0.000000
OTHER
0 0.000000 0 0.000000 0 0.000000
TOTAL
400,500 100.000000 0 0.000000 400,500 100.000000
337
15.1 / 15.2 – Shareholding structure
PARENT COMPANY / INVESTOR
Shareholder
Shareholder’s CPF / CNPJ Nationality-State Party to shareholders’ agreement Controlling shareholder Last change
Breakdown of shares (Units)
Number of common shares (Units) % Common shares Number of preferred shares (Units) % Preferred Shares Total qty. of shares (Units) % Total shares
PARENT COMPANY / INVESTOR Shareholder’s CPF / CNPJ Share capital ownership
Dutchdelta Finance S.À R.L. 00.000.000/0000-00
E.ON Finanzanlagen GmbH
00.000.000/0000-00 German No Yes June 24, 2009
41,828,930 4.000000 0 0.000000 41,828,930 4.000000
Share Class Qty. of shares (Units) % Shares
TOTAL 0 0.000000
OTHER
0 0.000000 0 0.000000 0 0.000000
TOTAL
1,045,723,250 100.000000 0 0.000000 1,045,723,250 100.000000
338
15.1 / 15.2 – Shareholding structure
PARENT COMPANY / INVESTOR
Shareholder
Shareholder’s CPF / CNPJ Nationality-State Party to shareholders’ agreement Controlling shareholder Last change
Breakdown of shares (Units)
Number of common shares (Units) % Common shares Number of preferred shares (Units) % Preferred Shares Total qty. of shares (Units) % Total shares
PARENT COMPANY / INVESTOR Shareholder’s CPF / CNPJ Share capital ownership
E.ON Finanzanlagen GmbH
E.ON SE
German No Yes November 26, 2012
5 100.000000 0 0,000000 5 100.000000
Share Class Qty. of shares (Units) % Shares
TOTAL 0 0.000000
OTHER
0 0.000000 0 0.000000 0 0.000000
TOTAL
5 100.000000 0 0.000000 5 100.000000
339
15.3 - Capital distribution
Date of last meeting / Date of last change
April 29, 2013
Number of Individual shareholders (Units)
1,329
Number of corporate shareholders (Units)
282
Number of institutional investors (Units) 211
Outstanding shares
Outstanding shares correspond to all issuer’s shares except for those of the controlling shareholder, persons
connected to the controlling shareholder, managers of the issuer and treasury shares
Number of common shares (Units)
268,505,520 38.220830%
Number of preferred shares (Units)
0 0.0000000%
Total 268,505,520 38.220830%
340
15.4 - Shareholders’ organizational chart
Since the presentation of this information is optional, the Company chose at this
time not to disclose the organizational chart of its direct and indirect controlling
shareholders.
341
15.5 - Shareholders’ agreement filed at issuer’s head office or to which the
controlling shareholder is a party
Parties (i) DD Brazil Holdings S.À.R.L. (“E.ON”); (ii) Eike Fuhrken Batista (“EBX” and, jointly with E.ON, the
“Parties”); (iii) E.ON SE (“Guarantor”), as guarantor; and (iv) ENEVA S.A. (“ENEVA ”), as
consenting party.
Date of the
agreement
May 27, 2013.
Period of
effectiveness
The Agreement shall come into effect on May 29, 2013, remain in force for as long as the Parties
are shareholders of the Company and may be terminated in the following events, among others: (i)
if the Parties mutually agree, in writing, to terminate the Shareholders’ Agreement; (ii) if E.ON
and/or EBX ceases to hold any shares issued by the Company; or (iii) by the Party holding the
majority interest, if the interest held by E.ON or EBX in the Company’s capital stock becomes lower
than 15% of ENEVA ’s capital stock.
Details of clauses
governing exercise
of the right to vote
and power of
control
The Parties agree (i) to exercise their respective votes at general meetings of the Company; (ii) to
ensure that the company always exercises its vote at general meetings of its subsidiaries; and (iii)
to ensure that their representatives in the management bodies of the Company and its subsidiaries
exercise their right to vote in the long-term interests of the Company’s business, with the conditions
of independence and equity between the parties being respected.
Power of control over the Company is exercised jointly by E.ON and EBX, who jointly hold more
than 50% of the voting capital stock of the Company, with the terms of the power of control being
governed by the Agreement. Before the holding of any Shareholders’ Meeting or Board of
Directors’ Meeting of the Company, E.ON and EBX should hold a prior meeting to agree on how
their votes or their representatives’ votes will be directed, in accordance with the terms of this
Agreement. If E.ON shall acquire a number of voting shares of EBX that increase its interest to
more than 50% and the terminate the Agreement, E.ON shall be obliged to make a public offer for
the acquisition of the shares of the Company, pursuant to the Corporate Law.
Details of clauses
relating to the
appointment of
managers
The Board of Directors shall consist of eight (8) members, two (2) of whom shall be independent,
with the possibility to increase the number up to ten (10) if BNDES, a shareholder of the Company,
and the minority shareholders shall resolve to elect new members pursuant to article 141,
paragraph 4 of the Corporate Law.
The members of the Board of Directors shall be elected by the general meeting, with E.ON and
EBX having the right to appoint three (3) members each. The independent members shall be
appointed by mutual accord between E.ON and EBX. The members of the Board of Directors shall
be professionals with proven qualifications and experience.
BNDES will be entitled, but not obliged, to appoint one (1) additional member to the Board of
Directors, provided that it holds, at least, 10% of the Company’s capital stock. The member
appointed by BNDES will be considered an independent director and will be appointed in
accordance with article 141, paragraph 4, of the Corporate Law.
If any shareholder other than E.ON, EBX and BNDES intends to appoint a member for the Board of
Directors, under the terms of article 141 of the Corporate Law, the number of independent
members should be increased by one (1) member, in order to accommodate the director appointed
by the non-controlling shareholder, and this member appointed by the non-controlling shareholder
then elected should be considered an independent director. E.ON and EBX should never require
the application of article 141 of the Corporate Law.
If the election of members of the Board of Directors at a Shareholders’ Meeting is made by multiple
vote and/or the members of the Board of Directors are elected in accordance with article 141,
paragraph 4 or 5 of the Corporate Law, E.ON and EBX should coordinate between each other and
vote at such Shareholders’ Meeting, as it may be necessary or required for the Shareholders to
elect the highest possible number of members of the Board of Directors appointed for election.
Details of the
clauses relating to
The Parties undertake not to transfer their shares except as mutually agreed between them and
only in the circumstances described in the Agreement.
342
transfer of shares
and preference in
acquiring them
The Parties undertake not to transfer their shares to third parties in a number that causes E.ON
and EBX to hold less than 15% of EBX’s capital stock for a period of five (5) years from the date on
which the Agreement came into force (the “Lock-up”). The Lock-up shall not be applicable to EBX
in the event that a public offer of acquisition of shares of the Company is made by E.ON, except in
the case of a public offer of acquisition of control under which the Company continues to fulfill the
“free float” requirements for its listing level on the BM&FBOVESPA Novo Mercado.
In spite of the Lock-up, the Parties may at any time and on giving advance notification in writing to
the other party, transfer their shares in whole or in part to their subsidiaries, provided that: (i) each
subsidiary is, directly or indirectly, wholly owned by E.ON or EBX; (ii) E.ON or EBX guarantees all
obligations of this wholly-owned subsidiary under the terms of the Agreement; (iii) a legal binding
commitment is established for the shares to be transferred back to E.ON or EBX before the wholly-
owned subsidiary ceases to be a wholly-owned subsidiary of E.ON or EBX. E.ON or EBX will
provided each other, as applicable, with information that may be reasonably requested to verify
whether the wholly-owned subsidiary ceased to be a wholly-owned subsidiary of the shareholder
that is transferring its shares; or (iv) the wholly-owned subsidiary will unconditionally adhere to the
Agreement, and the instrument of adherence is filed at the Company together with the Agreement.
Except for any transfer permitted under the terms of the Agreement, if E.ON or EBX intends to
transfer the totality or part of its shares issued by the Company to third parties, by means of a
series of transactions, the other shareholder shall have the preemptive rights to acquire these
shares, in accordance with the provisions of the Agreement. The shareholder intending to dispose
of its shares must notify, in writing, the other shareholder of the intention to transfer its shares in the
Company, informing the number of shares subject to such proposal of sale and to the terms under
which a purchase offering was made, including the price to be paid for each share and the payment
conditions. The shareholder receiving the sales proposal will be entitled to exercise its preemptive
right exclusively for all, and not less than all, shares held by the shareholder intending to transfer
such shares, upon delivery of written acceptance notice within fifteen (15) Business Days after
delivery of sales proposal notice. If the shareholder that received the sales proposal does not
exercise its exercise of the preemptive right, the shareholder disposing of its shares will be free to
sell its shares to third parties within ninety (90) days. Any transfer of shares in the context of a
secondary sale, as part of any initial public offering of the Company’s shares, will be subject to the
preemptive right procedure set forth in the Agreement.
Details of clauses
restricting or
binding the right to
vote of members of
the board of
directors
Not applicable.
343
15.6 - Relevant changes in equity interests held by members of the controlling
group and by the issuer’s management
Relevant changes in the shareholdings of members of the control group and
managers during the last three financial years and the current financial year were
described in item 6.5 of this Reference Form.
344
15.7 - Other relevant information
The Company informs that, regarding item 15.1 and 15.2 above, its indirect
controlling shareholder E.ON SE does not have controlling shareholders, i.e., its
controlling interest is widely held in the market, and that, for this reason, its
corporate structure has not been presented. Additionally, the Company informs
that the main resolutions of E. ON SE are approved at the shareholders’ meeting.
345
16.1 - Description of issuer’s rules, policies and practices regarding
transactions with related parties
As provided for in the Company’s Corporate Governance Policy, the Company’s transactions with related parties should be based on market conditions, strictly on an arm’s length basis, according to applicable legislation and with the Best Corporate Governance practices, including those provided for in the Novo Mercado Regulations, ensuring transparency and full respect for the best interest of shareholders, investors, employees and other stakeholders. In addition, as a good Corporate Governance practice, the Company submits for approval of its Board of Directors any contracting and business involving related parties. Moreover, the Board of Directors has authority to prevent and manage situations involving conflict of interests, ensuring that the interest of the company always prevails. As also provided for in the Corporate Governance Policy, in the event of a conflict involving the interests of the Company and those of any shareholder or management member in relation to a particular matter, such conflict of interests or the existence of a particular interest should be disclosed by such shareholder or management member, who will declare impediment to participating in the discussions and resolutions related to the matter. In addition, as provided for by law, the management members of the Company may not: (i) perform any act of liberality at the expense of the Company; (ii) receive, by virtue of their offices, any kind of direct or indirect personal advantage from any third party, without authorization, as provided for in its bylaws or granted by the general meeting; (iii) borrow funds or properties from the company, or use in their own benefit properties, services or credit of a company in which they are interested or owned by third parties, without authorization, as provided for in its bylaws or granted by the General Meeting; and (iv) engage in any transaction in which they have an interest conflicting with the interests of the company, or participate in resolutions related thereto taken by other directors. The disclosure of the Company’s transactions with related parties is made in its interim financial
statements, according to applicable law.
346
16.2 - Information on transactions with related parties
Related party Transaction date Amount involved
(in Real)
Remaining balance Amount (in Real) Term Loan
or
other
type
of
debt
Interest
rate
charged
MPX Comercializadora de
Energia Ltda.
01/07/2011 R$248,000.00 R$248,000.00 payable on
03/31/2013
Impossible to assess Indefinite No 0,000000
Relationship with the
issuer
Subsidiary
subject-matter of the
agreement
Operational and financial cost sharing agreement.
Guarantees and insurance N/A
Termination or dissolution N/A
Nature of and reason for
the transaction -
UTE MPX Sul Energia S.A. 07/01/2011 R$140,000.00 R$140,000.00 payable on
03/31/2013
Impossible to assess Indefinite No 0,000000
Relationship with the
issuer
Subsidiary
subject-matter of the
agreement
Operational and financial cost sharing agreement.
Guarantees and insurance N/A
Termination or dissolution N/A
Nature of and reason for Administrative efficiency.
347
Related party Transaction date Amount involved
(in Real)
Remaining balance Amount (in Real) Term Loan
or
other
type
of
debt
Interest
rate
charged
the transaction
UTE Porto do Açú Geração
de Energia S.A.
01/07/2011 R$138,000.00 R$138,000.00 payable on
03/31/2013
Impossible to assess Indefinite No 0,000000
Relationship with the
issuer
Subsidiary
subject-matter of the
agreement
Operational and financial cost sharing agreement.
Guarantees and insurance N/A
Termination or dissolution N/A
Nature of and reason for
the transaction Administrative efficiency.
MPX Comercializadora de
Combustíveis Ltda.
01/07/2011 R$123,000.00 R$123,000.00 payable on
03/31/2013
Impossible to assess Indefinite No 0,000000
Relationship with the
issuer
Subsidiary
subject-matter of the
agreement
Operational and financial cost sharing agreement.
Guarantees and insurance N/A
Termination or dissolution N/A
Nature of and reason for
the transaction Administrative efficiency.
348
Related party Transaction date Amount involved
(in Real)
Remaining balance Amount (in Real) Term Loan
or
other
type
of
debt
Interest
rate
charged
Seival Participações S.A. 01/07/2011 R$52,000.00 R$52,000.00 payable on
03/31/2013
Impossible to assess Indefinite No 0,000000
Relationship with the
issuer
Subsidiary
subject-matter of the
agreement
Operational and financial cost sharing agreement.
Guarantees and insurance N/A
Termination or dissolution N/A
Nature of and reason for
the transaction Administrative efficiency.
EBX Holding Ltda. 01/07/2011 R$1,134,000.00 R$1,134,000.00 payable on
03/31/2013
R$1,134,000.00 Indefinite No 0,000000
Relationship with the
issuer
Other related parties
subject-matter of the
agreement
Operational and financial cost sharing agreement.
Guarantees and insurance N/A
Termination or dissolution N/A
Nature of and reason for
the transaction Administrative efficiency.
Pecém Operação e
Manutenção de Energia S.A.
12/04/2012 R$1,333,333.33 R$1,458,000.00 payable on
03/31/2013
R$1.133.333,33 12/31/2013 Yes 0,000000
349
Related party Transaction date Amount involved
(in Real)
Remaining balance Amount (in Real) Term Loan
or
other
type
of
debt
Interest
rate
charged
Relationship with the
issuer
Subsidiary
subject-matter of the
agreement
Loan agreement.
Guarantees and insurance N/A
Termination or dissolution N/A
Nature of and reason for
the transaction Acquisition of spare parts for conveyor belt. Interest rate charged: 110% of CDI.
Porto do Pecém Geração de
Energia S.A.
09/24/2012 R$150,000,000.00 R$155,940.00 payable on
03/31/2013
150,000,000,00 30/09/2013 Yes 0,000000
Relationship with the
issuer
Subsidiary
subject-matter of the
agreement
Loan agreement.
Guarantees and insurance N/A
Termination or dissolution N/A
Nature of and reason for
the transaction Interest rate charged: 105% of CDI per year.
MPX E.ON Participações
S.A.
01/07/2011 R$8,205,000.00 R$8,205,000.00 payable on
03/31/2013
Impossible to assess Indefinite No 0,000000
Relationship with the
issuer
Subsidiary
350
Related party Transaction date Amount involved
(in Real)
Remaining balance Amount (in Real) Term Loan
or
other
type
of
debt
Interest
rate
charged
subject-matter of the
agreement
Operational and financial cost sharing agreement.
Guarantees and insurance N/A
Termination or dissolution N/A
Nature of and reason for
the transaction Administrative efficiency.
Paranaíba Participações
S.A.
01/07/2011 R$66,000.00 R$66,000.00 payable on
03/31/2013
Impossible to assess Indefinite No 0,000000
Relationship with the
issuer
Subsidiary
subject-matter of the
agreement
Operational and financial cost sharing agreement.
Guarantees and insurance N/A
Termination or dissolution N/A
Nature of and reason for
the transaction Administrative efficiency
Seival Sul Mineração Ltda. 01/07/2011 R$1,000.00 R$1,000.00 payable on
03/31/2013
Impossible to assess Indefinite No 0,000000
Relationship with the
issuer
Subsidiary
subject-matter of the Operational and financial cost sharing agreement.
351
Related party Transaction date Amount involved
(in Real)
Remaining balance Amount (in Real) Term Loan
or
other
type
of
debt
Interest
rate
charged
agreement
Guarantees and insurance N/A
Termination or dissolution N/A
Nature of and reason for
the transaction Administrative efficiency
UTE Paraníba II Geração de
Energia S.A.
01/07/2011 R$32,000.00 R$32,000.00 receivable on
03/31/2013
Impossible to assess Indefinite No 0,000000
Relationship with the
issuer
Subsidiary
subject-matter of the
agreement
Operational and financial cost sharing agreement.
Guarantees and insurance N/A
Termination or dissolution N/A
Nature of and reason for
the transaction Administrative efficiency
Mabe Construção e
Administração de Projetos
Ltda.
07/01/2011 R$369,000.00 R$369,000.00 receivable on
03/31/2013
Impossible to assess Indefinite No 0,000000
Relationship with the
issuer
Subsidiary
subject-matter of the
agreement
Operational and financial cost sharing agreement.
352
Related party Transaction date Amount involved
(in Real)
Remaining balance Amount (in Real) Term Loan
or
other
type
of
debt
Interest
rate
charged
Guarantees and insurance N/A
Termination or dissolution N/A
Nature of and reason for
the transaction Administrative efficiency
MPX Investimentos S.A. 01/07/2011 R$11,000.00 R$11,000.00 receivable on
03/31/2013
Impossible to assess Indefinite No 0,000000
Relationship with the
issuer
Subsidiary
subject-matter of the
agreement
Operational and financial cost sharing agreement.
Guarantees and insurance N/A
Termination or dissolution N/A
Nature of and reason for
the transaction Administrative efficiency
EBX Holding Ltda. 07/01/2011 R$6,351,000.00 R$6,351,000.00 payable on
03/31/2013
Impossible to assess Indefinite No 0,000000
Relationship with the
issuer
Other related parties
subject-matter of the
agreement
Operational and financial cost sharing agreement.
Guarantees and insurance N/A
353
Related party Transaction date Amount involved
(in Real)
Remaining balance Amount (in Real) Term Loan
or
other
type
of
debt
Interest
rate
charged
Termination or dissolution N/A
Nature of and reason for
the transaction Administrative Efficiency
MPX Comercializadora de
Energia Ltda.
03/31/2011 7,974,000.00 R$145,000.00 payable on
03/31/2013 Impossible to assess Indefinite No 0,000000
Relationship with the
issuer
Subsidiary
subject-matter of the
agreement
Agreement for reimbursement of financial losses from energy purchase and sale transactions.
Guarantees and insurance N/A
Termination or dissolution N/A
Nature of and reason for
the transaction Financial Reimbursement
Copelmi Mineração Ltda. 01/07/2011 R$7,000.00 R$7,000.00 payable on
12/31/2013
Impossible to assess Indefinite No 0,000000
Relationship with the
issuer
Other subsidiaries
subject-matter of the
agreement
Operational and financial cost sharing agreement.
Guarantees and insurance N/A
Termination or dissolution N/A
Nature of and reason for Administrative Efficiency
354
Related party Transaction date Amount involved
(in Real)
Remaining balance Amount (in Real) Term Loan
or
other
type
of
debt
Interest
rate
charged
the transaction
MPX E.ON Participações
S.A.
01/07/2011 R$3,113,000.00 R$3,113,000.00 payable on
03/31/2013
Impossible to assess Indefinite No 0,000000
Relationship with the
issuer
Subsidiary
subject-matter of the
agreement
Operational and financial cost sharing agreement.
Guarantees and insurance
Termination or dissolution
Nature of and reason for
the transaction Administrative Efficiency
MPX Tauá Energia Solar
Ltda.
R$400,000.00 R$400,000.00 payable on
03/31/2013
Impossible to assess Indefinite No 0,000000
Relationship with the
issuer
Subsidiary
subject-matter of the
agreement
Reimbursement of costs incurred for implementation of projects.
Guarantees and insurance
Termination or dissolution
Nature of and reason for
the transaction Oral agreement for reimbursement of expenses
355
Related party Transaction date Amount involved
(in Real)
Remaining balance Amount (in Real) Term Loan
or
other
type
of
debt
Interest
rate
charged
Porto do Pecém Geração de
Energia S.A.
07/11/2011 R$5,200,000.00 R$579,000.00 payable on
03/31/2013
R$5,200,000.00 Indefinite NO 0,000000
Relationship with the
issuer
Joint Subsidiary
subject-matter of the
agreement
Asset sharing agreement.
Guarantees and insurance N/A
Termination or dissolution N/A
Nature of and reason for
the transaction Operational optimization
Porto do Pecém
Transportadora de Minérios
S.A.
01/01/2012 7,800,000.00 R$47,000.00 payable on
03/31/2013
Impossible to assess 06/30/2016 No 0,000000
Relationship with the
issuer
Subsidiary
subject-matter of the
agreement
Service provision of port operation of coal discharge and carriage.
Guarantees and insurance
Termination or dissolution
Nature of and reason for
the transaction
356
MMX Mineração e Metálicos
S.A.
04/26/2012 0.00 N/A R$102.00/MWh Until the fulfillment
of all the
contractual
obligations
NO 0.000000
Relationship with the issuer Other related parties
Subject-matter of the
agreement
Power supply agreement (Energy Contracted: January 1, 2014 to September 30, 2014, 45MWm; January 10, 2014 to December 31, 2014, 120MWm;
January 1, 2015 to March 31, 2015, 168MWm; April 1, 2015 to December 31, 2015, 190MWm; January 1, 2016 to December 31, 2018, 200MWm),
entered into by and between MMX Mineração e Metálicos S.A. and MPX Comercializadora de Energia Ltda., ENEVA being the intervening party.
Guarantees and insurance Bank Letter of Guarantee or Performance Bond
Termination or dissolution The possibility exists, in cases of:
(i) Breach of obligation by any of the Parties not remedied within 30 days of notice
(ii) Judicial or Extrajudicial Reorganization of any of the Parties
(iii) Cancellation of agreement registration with CCEE
(iv) Absence of contracted energy registration with CCEE, by seller, twice
(v) Agreement between the Parties
Nature of and reason for the
transaction Power Supply Agreement
SIX Automação S.A. 03/20/2012 R$304,810.00 R$0.00 R$304,810.00 12 months after
start up of the last
thermoelectric
plant
NO 0.000000
Relationship with the issuer Other related parties
subject-matter of the
agreement
Agreement for implementation of a supervisory system for viewing the performance indicators of UTE Porto do Itaqui, Porto do Pecém, MPX Pecém II,
Amapari, Tauá and Parnaíba Complex plants.
Guarantees and insurance N/A
Termination or dissolution The possibility exists (e.g. breach of obligations, bankruptcy application, reorganization, dissolution or liquidation by sending a notice with 30 days in
advance).
357
Nature of and reason for the
transaction Services Agreement
MMX Mineração e Metálicos
S.A.
01/01/2011 0.00 0.00 Impossible to
assess
3 years renewable
for successive
periods of 3 years
NO 0.000000
Relationship with the issuer Other related parties
subject-matter of the
agreement
Operational and financial cost sharing agreement.
Guarantees and insurance N/A
Termination or dissolution (i) mutual agreement between the Parties; (ii) breach of relevant contractual terms; (iii) bankruptcy or filing for judicial reorganization; (iv) if the parties
cease to be part of the same economic group; or (v) acts of God or force majeure lasts longer than 120 days
Nature of and reason for the
transaction Administrative efficiency
OSX Brasil S.A. 01/01/2011 0.00 0.00 Indefinite 3 years renewable
for successive
periods of 3 years
NO 0.000000
Relationship with the issuer Other related parties
subject-matter of the
agreement
Operational and financial cost sharing agreement.
Guarantees and insurance N/A
Termination or dissolution (i) mutual agreement between the Parties; (ii) breach of relevant contractual terms; (iii) bankruptcy or filing for judicial reorganization; (iv) if the parties
cease to be part of the same economic group; or (v) acts of God or force majeure lasts longer than 120 days
Nature of and reason for the
transaction Administrative efficiency
EBX Holding Ltda. 09/01/2010 0.00 0.00 Impossible to
assess
3 years renewable
for successive
periods of 3 years
NO 0.000000
358
Relationship with the issuer Other related parties
subject-matter of the
agreement
Operational and financial cost sharing agreement.
Guarantees and insurance N/A
Termination or dissolution (i) mutual agreement between the Parties; (ii) breach of relevant contractual terms; (iii) bankruptcy or filing for judicial reorganization; (iv) if the parties
cease to be part of the same economic group; or (v) acts of God or force majeure lasts longer than 120 days
Nature of and reason for the
transaction Administrative efficiency
REX Empreendimentos
Imobiliários S.A.
02/01/2011 0.00 0.00 R$642,865.92 35 years NO 0.000000
Relationship with the issuer Other related parties
subject-matter of the
agreement
Area lease agreement of MPX Pecém II Project.
Guarantees and insurance Guarantee by ENEVA S.A. / Mortgage of real property by REX
Termination or dissolution (i) Bankruptcy or Judicial Reorganization
(ii) Breach of obligation by any of the Parties not remedied within 30 days of notice
Nature of and reason for the
transaction Lease Agreement
AVX Taxi Aéreo Ltda. 04/26/2011 R$2,538,348.00 (annual cost) n/a R$2,538,348.00
(annual cost)
Indefinite NO 0.000000
Relationship with the issuer Other related parties
subject-matter of the
agreement
Aircraft Charter Services Agreement.
Guarantees and insurance There is no guarantees or bonds forecast.
Termination or dissolution The agreement may be terminated in the following cases, regardless of notification by any of the parties: (i) bankruptcy, receivership or dissolution of
359
either party being decreed; and (ii) by extraordinary, unpredictable or uncontrollable events, beyond the will of the parties, including hypothesis of
economic balance loss of the contracting
Nature of and reason for the
transaction Aircraft Charter Services Agreement.
REX Empreendimentos
Imobiliários Ltda.
07/08/2009 R$1,019,045.31 N/A R$1,019,045.31
plus variable cost
For the term of
the authorization
of Porto do
Pecém to act as a
power generator.
No 0.000000
Relationship with the issuer Other related parties
subject-matter of the
agreement
Purchase Commitment Agreement of the real property in which UTE Porto do Pecém is located.
Guarantees and insurance N/A
Termination or dissolution (i) In the event of unreasonably termination of the Lease by Porto do Pecém
(ii) In the event of termination of the Lease by the breach of obligations by Porto do Pecém
(iii) Expropriation of real property by the Public Authorities
Nature of and reason for the
transaction Purchase Commitment Agreement of the real property
REX Empreendimentos
Imobiliários Ltda.
07/08/2009 R$228,340.92 per year 0.00 R$228,340.92 per
year
35 years No 0.000000
Relationship with the issuer Other related parties
subject-matter of the
agreement
Lease of the real property in which UTE Porto do Pecém is located, entered into by and between Porto do Pecém and REX
Guarantees and insurance ENEVA Guarantee, in proportion to its interest.
Termination or dissolution (i) Just Cause, at the discretion of Pecém
(ii) Breach of obligation by any of the Parties not remedied within 30 days of notice
Nature of and reason for the Lease Agreement
360
transaction
OGX Maranhão Petróleo e Gás
S.A.
12/18/2012 R$5.26 per MMBTU 0.00 R$5.26 per
MMBTU
15 years from the
startup of UTE
Parnaíba
No 0.000000
Relationship with the issuer Other related parties
subject-matter of the
agreement
Natural Gas Supply Agreement for thermoelectric generation purposes by UTE Parnaíba Geração de Energia S.A.
Guarantees and insurance Corporate guarantee of ENEVA S.A.
Termination or dissolution In the cases of (i) non-payment of collection document; (ii) statement of insolvency, voluntary bankruptcy, bankruptcy, judicial or extrajudicial
reorganization, judicial or extrajudicial liquidation and/or intervention of any competent governmental authority, (iii) non-compliance with contractual
obligations.
Nature of and reason for the
transaction Gas Supply Agreement
OGX Maranhão Petróleo e Gás
S.A.
12/18/2012 R$110,810,529.11/year 49,299,000.00 R$110,810,529.11/
year
15 years from the
startup of UTE
Parnaíba
No 0.000000
Relationship with the issuer Other related parties
subject-matter of the
agreement
Lease Agreement of capacity volume of the UTG, entered into by and between OGX Maranhão Petróleo e Gás S.A., Petra Energia S.A. and UTE
Parnaíba Geração de Energia S.A., for the exclusive purpose of processing of natural gas from production fields for consumption by UTE Parnaíba.
Guarantees and insurance Guarantee of UTE Parnaíba
Termination or dissolution In the cases of: (i) breach of relevant contractual obligation, (ii) statement of bankruptcy, insolvency, judicial or extrajudicial reorganization or liquidation,
(iii) transfer of said contract or any rights or obligations, (iv) in the event of termination of CCEARs with no fault of arrendaria, (v) in the event of
termination of the Gas Sale Agreement with no fault of the lessee, (vi) acts of God or force majeure (vii) in the case of substantial inaccuracy of any
statement provided for in the agreement.
Nature of and reason for the
transaction UTG Lease Agreement.
MMX Mineração e Metálicos
S.A.
04/26/2012 N/A N/A N/A Until the fulfillment
of all contractual
No 0.000000
361
obligations or in
the event of non-
compliance of
requirements for
implementation of
self-production
structure up to
January 1, 2019.
Relationship with the issuer Other related parties
subject-matter of the
agreement
Sale of energy as guarantee for self-production structure.
Guarantees and insurance Bank Letter of Guarantee or Performance Bond, when applicable
Termination or dissolution (i) Termination of the Commitment Instrument
(ii) Agreement between the Parties
(iii) Full compliance with the obligations
Nature of and reason for the
transaction Energy Sale Agreement as guarantee for self-production structure.
LLX Açu Operações Portuárias
S.A.
09/24/2012 0.00 0.00 Impossible to
assess
3 years,
automatically and
renewable for an
equal period
No 0.000000
Relationship with the issuer Other related parties
subject-matter of the
agreement
Administrative activities sharing Agreement related to environmental management between UTE Porto do Açu and LLX Açu.
Guarantees and insurance N/A
Termination or dissolution (i) mutual agreement between the Parties; (ii) breach of relevant contractual terms; (iii) bankruptcy or filing for judicial reorganization; (iv) if the parties
cease to be part of the same economic group; or (v) acts of God or force majeure lasts longer than 120 days.
Nature of and reason for the Administrative efficiency
362
transaction
LLX Açu Operações Portuárias
S.A.
12/24/2012 R$194,220.00 N/A R$194,220.00 4 successive
years out of 3
No 0.000000
Relationship with the issuer Other related parties
subject-matter of the
agreement
Environmental obligations sharing agreement as a result of rent of Porto do Açu area.
Guarantees and insurance n/a
Termination or dissolution (i) mutual agreement between the Parties; (ii) breach of relevant contractual terms; (iii) bankruptcy or filing for judicial reorganization; (iv) if the parties
cease to be part of the same economic group; or (v) acts of God or force majeure lasts longer than 120 days.
Nature of and reason for the
transaction Sharing Agreement
LLX Açu Operações Portuárias
S.A.
11/24/2010 R$12,390,708.00 (paid in 2012) 0.00 R$12,390,708.00
(paid in 2012)
35 years from the
date of
authorization to
be granted by
ANEEL to ENEVA
for the operation
of UTE Porto do
Açu
No 0.000000
Relationship with the issuer Other related parties
subject-matter of the
agreement
Lease Agreement between LLX Açu Operações Portuárias S.A., UTE Porto do Açu Energia S.A. and ENEVA S.A. Rental Agreement (“Agreement”) of
land intended for implementation of Phase I MPX Açu e Phase II MPX Açu Projects at Super Porto do Açu, with a total area of 224.38 hectares. The
following provisions were defined: Initially, the leased area will have 74.79 hectares. With respect to the remaining 149.59 hectares, LLX
granted to ENEVA a lease option in which ENEVA may exercise 74.79 hectares up to January 2, 2013 and the remaining 74.79 hectares up to
January 2, 2013, having respected the right of first refusal in case of land disposal to third parties by LLX in accordance with art. 27 et seq. of
Law No. 8,245/91.
Guarantees and insurance N/A
Termination or dissolution Breach of contracted obligations, bankruptcy or filing for judicial or extrajudicial reorganization of the parties and non-performance of the agreement due to
acts of God or force majeure for more than 90 days.
363
Nature of and reason for the
transaction Lease Agreement
REX Inversiones S.A. 07/25/2008 0.00 n/a Payments should occur
only after the entering
into of project financing
agreements
50 years No 0.000000
Relationship with the issuer Other related parties
subject-matter of the
agreement
Lease Agreement of Porto de Castilla area.
Guarantees and insurance N/A
Termination or dissolution Breach of contracted obligations, bankruptcy or filing for judicial or extrajudicial reorganization of the parties and non-performance of the agreement due to
acts of God or force majeure for more than 90 days.
Nature of and reason for the
transaction Lease Agreement
OGX Maranhão Petróleo e
Gás S.A.
03/08/2012 n/a n/a n/a 30 years No 0.000000
Relationship with the issuer Other related parties
subject-matter of the
agreement
Free Lease Agreement between UTE Parnaíba Geração de Energia S.A. and OGX Maranhão relating to the portion of 18.7 ha of real property at Parnaíba
Complex.
Guarantees and insurance n/a
Termination or dissolution In the cases of: (i) agreement between the parties, (ii) breach of contractual obligations, and (iii) bankruptcy, filing for or grant of judicial or extrajudicial
reorganization and judicial or extrajudicial liquidation of any of the parties.
Nature of and reason for the
transaction Free Lease Agreement
LLX Logística S.A. 01/01/2011 0.00 0.00 R$185,725.68 received
by ENEVA in 2012
3 years, renewed
automatically
No 0.000000
364
Relationship with the issuer Other related parties
subject-matter of the
agreement
Operational and financial cost sharing agreement.
Guarantees and insurance n/a
Termination or dissolution (i) mutual agreement between the Parties; (ii) breach of relevant contractual terms; (iii) bankruptcy or filing for judicial reorganization; (iv) if the parties
cease to be part of the same economic group; or (v) acts of God or force majeure lasts longer than 120 days.
Nature of and reason for the
transaction Administrative efficiency
OGX Maranhão Petróleo e
Gás S.A.
01/01/2011 0.00 0.00 R$376,347.37 3 years, renewed
automatically
No 0.000000
Relationship with the issuer Other related parties
subject-matter of the
agreement
Operational and financial cost sharing agreement.
Guarantees and insurance n/a
Termination or dissolution (i) mutual agreement between the Parties; (ii) breach of relevant contractual terms; (iii) bankruptcy or filing for judicial reorganization; (iv) if the parties
cease to be part of the same economic group; or (v) acts of God or force majeure lasts longer than 120 days.
Nature of and reason for the
transaction Administrative efficiency
EBX Holding Ltda. 03/01/2011 R$1,803,000.00, paid in
2012
0.00 R$1,803,000.00, paid in
2012
5 years No 0.000000
Relationship with the issuer Other related parties
subject-matter of the
agreement
Lease Agreement of the real property for Company’s head-offices
Guarantees and insurance Surety in the amount of 3 rents.
Termination or dissolution If lessees, always taken as a whole, choose to return the real property leased or give cause to termination prior to the end of the term of such lease, by sending written notice with 180 days in advance. Lessor will be entitled to the receipt, proportionally, in accordance with the fulfilled term of the agreement, fine, as provided for in said agreement.
365
Nature of and reason for the
transaction Lease Agreement
Minera MMX de Chile S.A. 11/03/2008 0.00 0.00 Costs, plus 15%, plus
VAT
Indefinite No 0.000000
Relationship with the issuer Other related parties
subject-matter of the
agreement
Operational and financial activities cost sharing agreement of MPX Energia de Chile Limitada with MMX Chile.
Guarantees and insurance n/a
Termination or dissolution Upon notice with 30 days in advance.
Nature of and reason for the
transaction Administrative efficiency
REX Inversiones S.A. 11/03/2008 N/A N/A Costs, plus 15%, plus
VAT
Until the fulfillment
of all contractual
obligations or in
the event of non-
compliance of
requirements for
implementation of
self-production
structure up to
January 1, 2019.
No 0.000000
Relationship with the issuer Other related parties
subject-matter of the
agreement
Operational and financial activities cost sharing agreement of MPX Energia de Chile Limitada with REX Inversiones.
Guarantees and insurance N/A
Termination or dissolution (i) mutual agreement between the Parties; (ii) breach of relevant contractual terms; (iii) bankruptcy or filing for judicial reorganization; (iv) if the parties
cease to be part of the same economic group; or (v) acts of God or force majeure lasts longer than 120 days
Nature of and reason for the Administrative efficiency
366
transaction
OGX Maranhão Petróleo e
Gás e S.A.
03/26/2013 R$5.26 per MMBTU 0.00 R$5.26 per MMBTU 15 years No 0.000000
Relationship with the issuer Other related parties
subject-matter of the
agreement
Natural Gas Supply Agreement for UTE Parnaíba III.
Guarantees and insurance Possibility of Requirement of Payment Guarantee of UTE Parnaiba III should there is a change of control of UTE Parnaiba III.
Termination or dissolution In the cases of (i) non-payment of collection document; (ii) statement of insolvency, voluntary bankruptcy, bankruptcy, judicial or extrajudicial
reorganization, judicial or extrajudicial liquidation and/or intervention of any competent governmental authority, (iii) non-compliance with contractual
obligations.
Nature of and reason for the
transaction Natural Gas Supply Agreement for UTE Parnaíba III.
OGX Maranhão Petróleo e
Gás e S.A.
03/26/2013 R$6.006 per MMBTU 0.00 R$6.00 per MMBTU 15 years, as from
October 2013
No 0.000000
Relationship with the issuer Other related parties
subject-matter of the
agreement
Natural Gas Supply Agreement for UTE Parnaíba IV.
Guarantees and insurance Possibility of Requirement of Payment Guarantee of UTE Parnaiba IV should there is a change of control of UTE Parnaiba IV.
Termination or dissolution In the cases of (i) non-payment of collection document; (ii) statement of insolvency, voluntary bankruptcy, bankruptcy, judicial or extrajudicial
reorganization, judicial or extrajudicial liquidation and/or intervention of any competent governmental authority, (iii) non-compliance with contractual
obligations.
Nature of and reason for the
transaction Natural Gas Supply Agreement for UTE Parnaíba IV.
OGX Maranhão Petróleo e
Gás S.A.
03/26/2013 N/A N/A N/A Indefinite No 0.000000
Relationship with the issuer Other related parties
subject-matter of the Free Lease Agreement for UTE Parnaíba III.
367
agreement
Guarantees and insurance N/A
Termination or dissolution In the cases of: (i) agreement between the parties, (ii) breach of contractual obligations, and (iii) bankruptcy, filing for or grant of judicial or extrajudicial
reorganization and judicial or extrajudicial liquidation of any of the parties.
Nature of and reason for the
transaction Free Lease Agreement for UTE Parnaíba III.
OGX Maranhão Petróleo e
Gás S.A.
03/26/2013 R$21,243,628.08/year N/A R$21,243,628.08/year Indefinite No 0.000000
Relationship with the issuer Other related parties
subject-matter of the
agreement
Lease Agreement of a portion of the total capacity of natural gas processing of UTG necessary for UTE Parnaíba III.
Guarantees and insurance Possibility of Requirement of Payment of Guarantee of UTE Parnaiba III should there is a change of control of UTE Parnaiba III.
Termination or dissolution In the cases of (i) non-payment of collection document; (ii) statement of insolvency, voluntary bankruptcy, bankruptcy, judicial or extrajudicial
reorganization, judicial or extrajudicial liquidation and/or intervention of any competent governmental authority, (iii) non-compliance with contractual
obligations.
Nature of and reason for the
transaction Lease Agreement UTG for UTE Parnaíba III.
OGX Maranhão Petróleo e
Gás S.A.
03/26/2013 R$5.26/MMBTU N/A R$5.26/MMBTU Indefinite No 0.000000
Relationship with the issuer Other related parties
subject-matter of the
agreement
Natural Gas Sale Agreement for UTE Parnaíba II.
Guarantees and insurance Possibility of Requirement of Payment Guarantee of UTE Parnaiba II should there is a change of control of UTE Parnaiba II.
Termination or dissolution In the cases of (i) non-payment of collection document; (ii) statement of insolvency, voluntary bankruptcy, bankruptcy, judicial or extrajudicial
reorganization, judicial or extrajudicial liquidation and/or intervention of any competent governmental authority, (iii) non-compliance with contractual
obligations.
Nature of and reason for the Natural Gas Sale Agreement for UTE Parnaíba III.
368
transaction
OGX Maranhão Petróleo e
Gás S.A.
03/26/2013 R$8.75 million/year N/A R$8.75 million/year 15 years as from
the beginning of
commissioning
and test phase of
UTE
No 0.000000
Relationship with the issuer Other related parties
subject-matter of the
agreement
Lease Agreement of a certain volume of UTG, entered into by and between OGX Maranhão Petróleo e Gás S.A., Petra Energia S.A. and UTE Parnaíba II
Geração de Energia S.A., for the exclusive purpose of processing of natural gas from production fields for consumption by UTE Parnaíba II.
Guarantees and insurance Possibility of Requirement of Payment Guarantee of UTE Parnaiba II should there is a change of control of UTE Parnaiba II.
Termination or dissolution In the cases of: (i) breach of relevant contractual obligation, (ii) statement of bankruptcy, insolvency, judicial or extrajudicial reorganization or liquidation, (iii)
transfer of said contract or any rights or obligations, (iv) in the event of termination of CCEARs with no fault of arrendaria, (v) in the event of termination of
the Gas Sale Agreement with no fault of the lessee, (vi) acts of God or force majeure (vii) in the case of substantial inaccuracy of any statement provided
for in the agreement.
Nature of and reason for the
transaction Lease Agreement UTG for UTE Parnaíba II.
OGX Maranhão Petróleo e
Gás S.A.
03/26/2013 N/A N/A Impossible to assess 7 years or up to
the end of granting
of exploration
blocks
No 0.000000
Relationship with the issuer Other related parties
subject-matter of the
agreement
Preliminary Agreement for Gas Supply and Other Covenants entered into by and between ENEVA S.A., MPX E.ON Participações S.A., OGX Maranhão
Petróleo e Gás S.A. and OGX Petróleo e Gás Participações S.A., defining the key terms and conditions of contracting by each undertaking, the supply of
natural gas and the lease of part of the total capacity of natural gas processing of their UTGs.
Guarantees and insurance N/A
Termination or dissolution N/A
Nature of and reason for the
transaction Preliminary Agreement for Gas Supply and Other Covenants.
369
OGX Maranhão Petróleo e
Gás S.A.
07/26/2012 N/A N/A Impossible to assess Indefinite No 0.000000
Relationship with the issuer Other related parties
subject-matter of the
agreement
Free Lease Agreement for UTE Parnaíba IV.
Guarantees and insurance N/A
Termination or dissolution In the cases of: (i) agreement between the parties, (ii) breach of contractual obligations, and (iii) bankruptcy, filing for or grant of judicial or extrajudicial
reorganization and judicial or extrajudicial liquidation of any of the parties.
Nature of and reason for the
transaction Free Lease Agreement for UTE Parnaíba IV.
UTE Porto do Itaqui Geração
de Energia S.A.
07/31/2012 350,000,000.00 N/A 350.000.000,00 Indefinite Yes 0.000000
Relationship with the issuer Subsidiary
subject-matter of the
agreement
Loan Agreement between ENEVA S.A. and UTE Porto do Itaqui.
Guarantees and insurance N/A
Termination or dissolution N/A
Nature of and reason for the
transaction Loan agreement with interest at 104% of the CDI rate.
UTE Porto do Itaqui Geração de
Energia S.A.
03/26/2013 409,960,000.00 409,960,000.00 409,960,000.00 120 days No 0.000000
Relationship with the issuer Subsidiary
Subject-matter of the agreement Advance payment for future capital increase.
Guarantees and insurance N/A
Termination or dissolution N/A
370
Nature of and reason for the
transaction Advance payment for future capital increase, in order to capitalize the invested party.
MPX Pecém II Geração de
Energia S.A.
03/22/2013 262,600,000.00 262,600,000.00 262,600,000.00 120 days No 0.000000
Relationship with the issuer Subsidiary
Subject-matter of the agreement Advance payment for future capital increase.
Guarantees and insurance N/A
Termination or dissolution N/A
Nature of and reason for the
transaction Advance payment for future capital increase, in order to capitalize the invested party.
UTE Parnaíba Geração de
Energia S.A.
03/28/2013 19,600,000.00 19,600,000.00 19,600,000.00 120 days No 0.000000
Relationship with the issuer Subsidiary
Subject-matter of the agreement Advance payment for future capital increase.
Guarantees and insurance N/A
Termination or dissolution N/A
Nature of and reason for the
transaction Advance payment for future capital increase, in order to capitalize the invested party.
Parnaíba Participações S.A. 03/27/2013 16,887,534.17 16,887,534.17 16,887,534.17 120 days No 0.000000
Relationship with the issuer Subsidiary
Subject-matter of the agreement Advance payment for future capital increase.
Guarantees and insurance N/A
Termination or dissolution N/A
Nature of and reason for the Advance payment for future capital increase, in order to capitalize the invested party.
371
transaction
Porto do Açu Energia S.A. 03/04/2013 1,950,000.00 1,950,000.00 1,950,000.00 120 days No 0.000000
Relationship with the issuer Subsidiary
Subject-matter of the agreement Advance payment for future capital increase.
Guarantees and insurance N/A
Termination or dissolution N/A
Nature of and reason for the
transaction Advance payment for future capital increase, in order to capitalize the invested party.
OGMP Transporte Aéreo Ltda. 03/22/2013 150,000.00 150,000.00 150,000.00 120 days No 0.000000
Relationship with the issuer Subsidiary
Subject-matter of the agreement Advance payment for future capital increase.
Guarantees and insurance N/A
Termination or dissolution N/A
Nature of and reason for the
transaction Advance payment for future capital increase, in order to capitalize the invested party.
Porto do Açú II Energia S.A. 03/05/2013 50,000.00 50,000.00 50,000.00 120 days No 0.000000
Relationship with the issuer Subsidiary
Subject-matter of the agreement Advance payment for future capital increase.
Guarantees and insurance N/A
Termination or dissolution N/A
Nature of and reason for the
transaction Advance payment for future capital increase, in order to capitalize the invested party.
MPX Seival Participações S.A. 03/01/2013 42,500.00 42,500.00 42,500.00 120 days No 0.000000
372
Relationship with the issuer Subsidiary
Subject-matter of the agreement Advance payment for future capital increase.
Guarantees and insurance N/A
Termination or dissolution N/A
Nature of and reason for the
transaction Advance payment for future capital increase, in order to capitalize the invested party.
MPX Tauá II Energia Solar Ltda. 03/21/2013 40,000.00 40,000.00 40,000.00 120 days No 0.000000
Relationship with the issuer Subsidiary
Subject-matter of the agreement Advance payment for future capital increase.
Guarantees and insurance N/A
Termination or dissolution N/A
Nature of and reason for the
transaction Advance payment for future capital increase, in order to capitalize the invested party.
MPX Investimentos S.A. 03/18/2013 2,000.00 2,000.00 2,000.00 120 days No 0.000000
Relationship with the issuer Subsidiary
Subject-matter of the agreement Advance payment for future capital increase.
Guarantees and insurance N/A
Termination or dissolution N/A
Nature of and reason for the
transaction Advance payment for future capital increase, in order to capitalize the invested party.
373
16.3 - Identification of measures taken to address conflicts of interest and
statement of the strictly arm’s length basis of the conditions agreed or proper
compensatory payment
(a) identify measures taken to handle conflicts of interest The Company has no specific mechanism for identifying conflicts of interest, but relies on corporate governance practices and those recommended and/or required by the legislation, including as provided in the Novo Mercado Regulations, which state that shareholders may not vote on resolutions at a general meeting which relate to a valuation report on assets for which they are competing for the formation of capital stock, or to the approval of their own accounts as managers, nor on any others that may benefit them personally, or where their interests conflict with those of the Company. A resolution taken on the vote of a shareholder whose interests conflict with those of the Company may be annulled, and the shareholder is responsible for any damage caused and for restoring to the Company any advantages which may have accrued. The Board of Directors, Executive Board and Fiscal Council, if instated, approve all decisions related to the Company operations, according to the powers granted under the current by-laws. Thus all the Company’s transactions, especially those with related parties, have been duly submitted to the decision-making bodies of the Company to which they are subordinated, pursuant to the rules currently in force. Additionally, pursuant to the Corporate Law, no member of the Company Board of Directors is permitted to vote at any Company meeting or meeting of the Board of Directors, or to take part in any transaction or business in which the member’s interests are in conflict with those of the Company. Company transactions and business with related parties are in line with market practice and are covered by the proper advance assessments of their terms, and according to the Company’s strict interest in undertaking them. (b) show the strictly commutative character of the terms agreed or
adequate payment in compensation
Transactions with parties related to the Company will be made based on market conditions, strictly on an arm’s length basis, according to applicable legislation and with the best corporate governance practices, including those provided for in the Novo Mercado Regulations, ensuring transparency and full respect for the best interest of shareholders, investors, employees and other stakeholders.
374
17.1 - Information on capital stock
Date of authorization or approval
Capital amount (in Real) Deadline for payment Number of common
shares (units) Number of preferred
shares (units) Total number of shares
(units)
Capital type Issued Capital
09/16/2013 4,536,568,316.00 702,510,969 0 702,510,969
Capital stock per share type Other Convertible Securities
Preferred Shares Class Number of Shares (Units) Conversion Conditions
- -
Capital type Subscribed Capital
09/16/2013 4,536,568,316.00 702,510,969 0 702,510,969
Capital type Paid-in Capital
09/16/2013 4,536,568,316.00 702,510,969 0 702,510,969
Capital type Issued Capital
05/08/2013 3,736,568,320.85 578,479,962 0 578,479,962
Capital type Subscribed Capital
05/08/2013 3,736,568,320.85 578,479,962 0 578,479,962
Capital type Paid-in Capital
05/08/2013 3,736,568,320.85 578,479,962 0 578,479,962
Capital type Authorized Capital
08/15/2013 0 1,200,000,000 0 1,200,000,000
375
17.2 - Capital Increases
Date of resolution
Body approving the increase
Date of issue
Total issue amount
(in Real) Type of
increase
Common
(Units)
Preferred
(Units)
Total shares (units)
Subscription/Previous Capital
Price of issue
Quotation ratio
3/24/2011 Meeting of the Board Of Directors
05/19/2011 96,025.60 Private subscription
28.160 0 28,160 0.00469284 3.41 R$ per unit
Criteria for determining the issue price
Fixed amount, according to the Stock Options Plan of the Company, adopted at the Extraordinary General Meeting of the Company held on November 26, 2007, under the terms of article 171, paragraph 3, of Law No. 6.404/76.
Form of payment Cash
02/29/2012 Meeting of the Board Of Directors
02/29/2012 414,219.00 Private subscription
9,633 0 9,633 0.02024225 43.00 R$ per unit
Criteria for determining the issue price
Price established according to the Deed of the 1st Convertible Debentures Issue.
Form of payment Cash
03/21/2012 Meeting of the Board Of Directors
03/21/2012 42,312.00 Private subscription
984 0 984 0.00206730 43.00 R$ per unit
Criteria for determining the issue price
Price established according to the Deed of the 1st Convertible Debentures Issue.
Form of payment Cash
03/21/2012 Meeting of the Board Of Directors
03/21/2012 25,907.20 Private subscription
7,040 0 7,040 0.00126576 3.68 R$ per unit
Criteria for determining the issue price
Exercise of share subscription options granted according to the Stock Option or Share Subscription Plan of the Company.
Form of payment Cash
05/09/2012 Meeting of the Board Of Directors
05/09/2012 176,816.00 Private subscription
4,112 0 4,112 0.00863869 43.00 R$ per unit
Criteria for determining the issue price
Price established according to the Deed of the 1st Convertible Debentures Issue.
376
Date of resolution
Body approving the increase
Date of issue
Total issue amount
(in Real) Type of
increase
Common
(Units)
Preferred
(Units)
Total shares (units)
Subscription/Previous Capital
Price of issue
Quotation ratio
Form of payment Cash
05/09/2012 Meeting of the Board Of Directors
05/09/2012 1,256,177.13 Private subscription
125,620 0 125,620 0.06136769 10.00 R$ per unit
Criteria for determining the issue price
Exercise of share subscription options granted according to the Stock Option or Share Subscription Plan of the Company.
Form of payment Cash
05/24/2012 Meeting of the Board Of Directors
05/24/2012 1,429,952,315.00 Private subscription
33.254.705 0 33.254.705 69.81424156 43.00 R$ per unit
Criteria for determining the issue price
Price established according to the Deed of the 1st Convertible Debentures Issue.
Form of payment Cash
06/15/2012 Meeting of the Board Of Directors
06/15/2012 22,102.00 Private subscription
514 0 514 0.00080782 43.00 R$ per unit
Criteria for determining the issue price
Price established according to the Deed of the 1st Convertible Debentures Issue.
Form of payment Cash
07/25/2012 Meeting of the Board Of Directors
07/25/2012 1,000,000,063.00 Private subscription
22,623,796 0 22,623,796 36.54954928 44.20 R$ per unit
Criteria for determining the issue price
Capital increase made upon private subscription of shares approved at the Meeting of the Board of Directors held on May 2, 2012, defining the price of issue per share.
Form of payment Cash
01/10/2013 Meeting of the Board Of Directors
01/10/2013 247,490.42 Private subscription
147,480 0 147,480 0.00662445 1.68 R$ per unit
Criteria for determining the issue price
Exercise of share subscription options granted according to the Stock Option or Share Subscription Plan of the Company.
Form of payment Cash
377
Date of resolution
Body approving the increase
Date of issue
Total issue amount
(in Real) Type of
increase
Common
(Units)
Preferred
(Units)
Total shares (units)
Subscription/Previous Capital
Price of issue
Quotation ratio
02/06/2013 Meeting of the Board Of Directors
02/06//2013 95,144.63 Private subscription
27,000 0 27,000 0.00254652 3.52 R$ per unit
Criteria for determining the issue price
Exercise of share subscription options granted according to the Stock Option or Share Subscription Plan of the Company.
Form of payment Cash
04/05/2013 Meeting of the Board Of Directors
04/05/2013 114,098.53 Private subscription
34,500 0 34,500 0.00305374 3.30 R$ per unit
Criteria for determining the issue price
Exercise of share subscription options granted according to the Stock Option or Share Subscription Plan of the Company.
Form of payment Cash
05/08/2013 Meeting of the Board Of Directors
08/05/2013 99,500.30 Private subscription
29,250 0 29,250 0.00266295 3.40 R$ per unit
Criteria for determining the issue price
Exercise of share subscription options granted according to the Stock Option or Share Subscription Plan of the Company.
Form of payment Cash
09/16/2013 Meeting of the Board Of Directors
09/16/2013 799,999,995.15 Private subscription
124,031,007 0 124,031,007 0.21410019 6.45 R$ per unit
Criteria for determining the issue price
Capital increase made upon private subscription of shares.
Form of payment Cash
378
17.3 - Information on stock splits, reverse stock splits and stock dividends
Date of approval
Number of shares before approval (Units) Number of shares after approval (Units)
Number of common shares
Number of preferred shares Total number of shares
Number of common shares
Number of preferred shares Total number of shares
Division of shares
08/15/2012 192,747,244 0 192,747,244 578,241,732 0 578,241,732
379
17.4 - Information on capital stock decrease
Date of resolution
Date of decrease
Total amount of
decrease (in Real) Number of common
shares (units)
Number of preferred shares
(units) Total number of
shares (units) Decrease/Previous
Capital Refunded amount per share (in Real)
05/24/2012 05/24/2012 750,163,543.01 0 0 0 20.69499100 0.00
Refund form N/A
Reason for decrease Spin-off of ENEVA net assets to be merged into CCX.
380
17.5 - Other relevant information
There is no other relevant information on this item “17”.
381
18.1 – Rights of shares
Type of shares or CDA Common
Tag along 100.000000
Right to dividends Under Brazilian Corporation Law and the Company’s By-Laws the shareholders are
guaranteed the right to a minimum mandatory annual dividend of not less than 25%
of the net income reported in the Company’s financial statements, adjusted in
accordance with the provisions set forth in the Company’s By-Laws and in Brazilian
Corporation Law.
Right to vote Full
Convertibility No
Right to reimbursement of capital
Yes
Description of the characteristics of reimbursement of capital
In the Company being wound-up, the shareholders will receive the payments
regarding the remaining capital stock, in proportion to their respective share of the
capital stock, after all the Company’s obligations have been settled.
Those shareholders who disagree with certain decisions taken by the majority of
shareholders at General Meetings may leave the Company, under the terms set forth
by Brazilian Corporation Law. For purposes of reimbursement, the share value will
be determined based on the Company’s economic value, as calculated by three
experts or a specialized company appointed and chosen in accordance with the
provisions of Article 45 of the Brazilian Corporation Law. It will be up to the
Company’s board of directors to set the list with either six names or three names,
respectively, of qualified candidates and institutions to be presented to the
Company’s shareholders at a General Meeting for the purpose of assessing the
Company’s economic value.
Restriction upon circulation No
Conditions for altering the rights guaranteed to these securities
According to Brazilian Corporation Law, neither the Company’s by-laws nor the
decisions taken by the shareholders at General Meetings can deprive the
shareholders of the following rights: (i) the right to participate in the distribution of the
profits; (ii) the right to participate, in proportion to their respective share of the capital
stock, in the distribution of any assets remaining under the assumption of the
Company being wound-up; (iii) the preemptive right in the subscription for shares,
debentures convertible into shares or subscription warrants, except in the case of
specific circumstances set forth in Brazilian Corporation Law; (iv) the right to inspect,
in the way set forth in Brazilian Corporation Law, the management of the corporate
business; (v) the right to vote at the General Meetings; and (vi) the right to leave the
Company, under the cases set forth in Brazilian Corporation Law, including merger
or consolidation.
Other relevant characteristics Other relevant characteristics can be found in item 18.10.
382
18.2 – Description of any statutory rules limiting the voting rights of significant
shareholders or requiring them to hold a public offering
Limitations on Voting Rights
There are no statutory rules limiting the voting rights of significant shareholders.
Obligation to hold a public offering
The Novo Mercado Regulations establish that sale of share control of the Company, both by
means of a single operation, as well as by means of successive operations, should be contracted
under suspensive or resolutory conditions, whereby the acquirer undertakes to hold a public
offering for the shares of the other shareholders, in compliance with the conditions and terms in
force under the legislation and the Novo Mercado Regulations, so as to guarantee them an equal
treatment to that given to the controlling shareholder who is selling their shareholding, with there
being an obligation to deliver to the BM&FBOVESPA a declaration that contains the price and
other conditions of the transaction for the sale of share control of the Company.
It will also be necessary for this offer to be made (i) when there is onerous assignment of
subscription rights of shares and of other securities or rights in relation to securities convertible
into shares, which result in the divestiture of share control of the Company; and (ii) in the
divestiture of share control of the company that holds a controlling shareholding in the Company,
with the controlling shareholder that is divesting their interest in this case being obliged to declare
to the BM&FBOVESPA the value attributed to the Company in this divestiture, as well as attaching
documents that support this value.
Under the Novo Mercado Regulations, the party which acquires share control of the Company, as
a result of a private agreement for the purchase and sale of shares signed with the controlling
shareholder involving any number of shares, should make a public offering in the way mentioned
above, in addition to reimbursing to the shareholders an amount equal to the difference between
the public offering price and the amount paid for any shares that may have been acquired on the
stock exchange during the six months prior to the date of the acquisition of share control. Such
amount should be distributed among all the individuals who sold the Company’s shares during
those trading sessions in which the acquirer made the acquisitions, in proportion to the net daily
sales balance of each one, it falling to the BM&FBOVESPA to structure the distribution, in
accordance with the terms of its regulations.
The Novo Mercado Regulations also establish that the divesting controlling shareholder is not
allowed to transfer ownership of its shares, and that the Company is not permitted to register any
transfer of shares that represent control, until such time as the acquiring shareholder and those
who may come to hold share control have signed the controlling shareholders’ Term of Consent as
established in the Novo Mercado Regulations.
Whenever necessary, the purchaser should take all the measures to replace the minimum
percentage of outstanding shares, which consists of 25% of the capital stock’s total number of
shares, within the space of the six months following acquisition of control.
The minimum price to be offered under the public offering for acquisition of shares to be made by
the controlling shareholder(s), the group of controlling shareholders or by the Company in the case
of cancellation of the Company’s registration as a public company, should correspond to the
Economic Value determined by the valuation report.
383
If the shareholders decide at an Extraordinary General Meeting (i) that the Company should leave
the Novo Mercado in order for its shares to be registered for trading outside the Novo Mercado or
(ii) upon a corporate restructuring which would result in a company that would not be admitted for
trading on the Novo Mercado, the shareholder, or group of shareholders, which has share control
should hold a public offering to acquire the shares of the remaining shareholders. The price to be
offered should correspond, at least, to the economic value determined by the valuation report,
referred to in article 38 of the Company’s By-Laws, and comply with the applicable legal and
regulatory rules.
384
18.3 – Description of exceptions and suspensive clauses relating to equity or
political rights set forth in the by-laws
Under the terms of the Company’s By-Laws, at the discretion of the Board of Directors, an issue
may be made, without preemptive right or with reduction of the term covered by article 171,
paragraph 4, of the Brazilian Corporation Law, of shares and debentures convertible into shares or
subscription warrants, the placement of which is made by means of sale on the stock exchange or
by public subscription, or even by means of exchange of shares in a public offering for acquisition
of share control, under the terms established by the law, within the limit of authorized capital.
Also under the terms of the Company’s By-Laws, within the limit of authorized capital and in
accordance with the plan approved by the shareholders in a general meeting, the Company may
grant stock options to managers and employees, as well as to managers and employees of other
companies that are either directly or indirectly controlled by the Company, with exclusion of the
preemptive right of the shareholders in the granting and in the exercising of the stock options,
under the terms of article 168, paragraph 3, combined with article 171, paragraph 3 of the Brazilian
Corporation Law.
385
18.4 – Trading volume and highest and lowest price quotes for securities traded
Financial Year
12/31/2012
Quarter Security Type Class Market Administrative Body Financial volume traded
(Reais) Highest quote
(Reais) Lowest quote
(Reais) Quote Factor
03/31/2012 Shares Common Stock Exchange
BM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias e Futuros
1,700,183,595 14.00 12.64 R$ per Unit
06/30/2012 Shares Common Stock Exchange
BM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias e Futuros
1,733,682,570 14.81 10.01 R$ per Unit
09/30/2012 Shares Common Stock Exchange
BM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias e Futuros
899,124,008 12.74 9.78 R$ per Unit
12/31/2012 Shares Common Stock Exchange
BM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias e Futuros
705,735,638 11.97 9.93 R$ per Unit
Financial Year
12/31/2011
Quarter Security Type Class Market Administrative Body Financial volume traded
(Reais) Highest quote
(Reais) Lowest quote
(Reais) Quote Factor
03/31/2011 Shares Common Stock Exchange
BM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias e Futuros
1,013,410,266 37.08 24.79 R$ per Unit
06/30/2011 Shares Common Stock Exchange
BM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias e Futuros
1,063,381,892 40.03 34.25 R$ per Unit
09/30/2011 Shares Common Stock Exchange
BM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias e Futuros
827,099,206 39.60 31.35 R$ per Unit
12/31/2011 Shares Common Stock Exchange
BM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias e Futuros
874,086,372 47.10 33.80 R$ per Unit
Financial Year
12/31/2010
Quarter Security Type Class Market Administrative Body Financial volume traded
(Reais) Highest quote
(Reais) Lowest quote
(Reais) Quote Factor
03/31/2010 Shares Common Stock Exchange
BM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias e Futuros
661,794,682 27.80 21.85 R$ per Unit
06/30/2010 Shares Common Stock Exchange
BM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias e Futuros
709,821,864 24.10 17.00 R$ per Unit
09/30/2010 Shares Common Stock Exchange
BM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias e Futuros
753,309,588 29.73 18.83 R$ per Unit
12/31/2010 Shares Common Stock Exchange
BM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias e Futuros
815,768,239 31.35 24.01 R$ per Unit
386
18.5 – Description of other securities issued
Security Convertible Debentures
Identification of the security
MPXE-D11
Date of issue 06/15/2011
Date of maturity 06/15/2014
Quantity (Units) 21,735,744
Total value (Reais) 1,376,572,069.00
Restrictions upon circulation
No
Convertibility Yes. On the date of this Reference Form, 72,711 debentures are outstanding, the remaining debentures having been fully settled and converted into common shares issued by the Company.
Condition of convertibility and effects on capital stock
The Convertible Debentures will be able to be converted based on the
fixed price of R$43.00 per share, and this amount does not take into
account the split of shares representing the Company’s share capital
occurred in August 2012.
The conversion price will be simultaneously and proportionally adjusted
whenever there is an increase in capital by means of share bonus, share
split or share grouping, in any form, as from the date of issue, without any
onus for the holders of the Convertible Debentures and in the same
proportion as that established for such events.
Possibility of redemption
No
Characteristics of the securities
The Debentures are registered, book-entry debentures convertible into
common shares issued by the COMPANY, without the issue of certificates.
The Debentures will be secured by floating charge.
Security Commercial Notes
Identification of the security
(BRMPXENPM006)
Date of issue 7/20/2012
Date of maturity 7/15/2013
Quantity (Units) 300
Total value (Reais) 300.000.000,00
Restrictions upon circulation
Yes.
Details of restriction Trading on secondary market only between Qualified Investors and after ninety (90) days from subscription or acquisition by the investor.
Convertible No.
Possibility of Yes.
387
redemption
Circumstances and calculation of redemption value
(i) Optional early redemption in whole or in part, at the sole discretion of the Company. Amount of redemption calculated as the par unit value, equivalent to R$1,000,000, plus remuneration corresponding to 100% of the variation in the DI rate plus a margin of 1.5%, on the basis of 252 business days, calculated pro rata on the par value on a compound basis from the issue date to the date of the optional early redemption.
(ii) Mandatory early redemption in full as a result of (a) any public offer for the issue of fixed income securities or debt securities, such as, but not limited to, debentures, shares of receivables investment funds, bonds or commercial paper, by the Company, in Brazil or overseas; or (b) any public offer, in terms of item (a) above, by any company controlled by the Company, provided that such offer creates a liquidity event for the Company, whether by means of a dividend distribution, a capital increase and/or a loan, or by other means. Amount of redemption calculated as the par unit value, equivalent to R$1,000,000, plus remuneration corresponding to 100% of the variation in the DI rate plus a margin of 1.5%, on the basis of 252 business days, calculated pro rata on the par value on a compound basis from the issue date to the date of the mandatory early redemption.
Characteristics of the securities
Book-entry, registered, non-convertible commercial notes, issued by
public distribution with restricted placement efforts, without collateral or
personal guarantees being offered to the holders.
Security Commercial Notes
Identification of the Security
(BRMPXENPM006)
Date of Issue 12/14/2012
Date of maturity 12/9/2013
Quantity (Units) 300
Total value (Reais) 300.000.000,00
Restrictions upon circulation
Yes.
Details of restriction Trading on secondary market only between Qualified Investors and after ninety (90) days from subscription or acquisition by the investor.
Convertibility No.
Possibility of redemption
Yes.
Circumstances and calculation of redemption value
(i) Optional early redemption in whole or in part, at the sole discretion of the Company. Amount of redemption calculated as the par unit value, equivalent to R$1,000,000, plus remuneration corresponding to 100% of the variation in the DI rate plus a margin of 1.5%, on the basis of 252 business days, calculated pro rata on the par value on a compound basis from the issue date to the date of the optional early redemption.
(ii) Mandatory early redemption in full as a result of (a) any public offer for the issue of fixed income securities or debt securities, such as, but not limited to, debentures, shares of receivables investment funds, bonds or commercial paper, by the Company, in Brazil or overseas; or (b) any public offer, in terms of item (a) above, by any company controlled by the Company, provided that such offer creates a liquidity event for the Company, whether by means of a dividend distribution, a capital increase and/or a loan, or by other means. Amount of redemption calculated as
388
the par unit value, equivalent to R$1,000,000, plus remuneration corresponding to 100% of the variation in the DI rate plus a margin of 1.5%, on the basis of 252 business days, calculated pro rata on the par value on a compound basis from the issue date to the date of the mandatory early redemption.
Characteristics of the securities
Book-entry, registered, non-convertible commercial notes, issued by
public distribution with restricted placement efforts, without collateral or
personal guarantees being offered to the holders.
389
18.6 Brazilian markets where securities are admitted for trading
The Company’s securities are traded on the BM&FBOVESPA (Brazilian Securities, Commodities
and Futures Exchange), and its common shares are traded under the code MPXE3.
390
18.7 – Information about class and type of securities admitted for trading on
foreign markets
Global Depositary Receipts Level 1
Country United States
Market U.S. Over-The-Counter (OTC) Market
The market’s administrative body Pink OTC Markets
Date of admission for trading May 8, 2009
Trading segment Level 1
Date of first listing May 8, 2009
Percentage of volume of trades overseas in
relation to the total volume of trade of each class
and type during the last fiscal year
0.09%
Proportion of deposit certificates overseas in
relation to each class and type of share
1 GDR corresponds to 1 common share of the
Company.
Depositary Bank The Bank of New York Mellon
Custodian Institution Banco Itaú S.A.
391
18.8 – Public offerings for distribution held by issuer or third parties, including
controlling shareholders and subsidiaries and affiliates, regarding securities of
the issuer
Public offering for distribution of commercial notes – July /2012
On July 20, 2012, the Company held a public distribution of 300 commercial promissory notes,
with restricted placement efforts, pursuant to CVM Instruction, No. 476 of January 16, 2009, as
amended (“CVM Instruction No. 476”), in a single series, in the nominal value per unit of R$1
million, totaling R$300 million, maturing on July 15, 2013, remunerated by variation of 100% of the
DI rate, plus a surcharge of 1.50% p.a. Other characteristics of the commercial notes issued in
July/2012 are outlined in item 18.5 of this Reference Form.
Public offering of distribution of commercial notes - December 2012
On December 14, 2012, the Company held a public distribution of 300 commercial promissory
notes, with restricted placement efforts, pursuant to CVM Instruction, No. 476, in a single series, in
the nominal value per unit of R$1 million, totaling R$300 million, maturing on December 9, 2013,
remunerated by variation of 100% of the DI rate, plus a surcharge of 1.50% p.a. Other
characteristics of the commercial notes issued in December/2012 are outlined in item 18.5 of this
Reference Form.
Besides the offerings mentioned above, during the last three financial years, no other public
offerings for distribution of securities issued by the Company were held by the Company or by third
parties.
392
18.9 - Description of public offerings for acquisition held by the issuer in
respect of shares issued by third parties
During the last three financial years and during the current financial year no public offerings for
acquisition of securities issued by third parties were held by the Company.
393
18.10 - Other relevant information
There is no other information that the Company deems to be relevant in relation to item 18 which
has not been disclosed in the other items of this Reference Form.
394
19.1 Information on repurchase of shares of the issuer
Justification for non-completion of the chart:
The Company does not have a repurchase plan in place.
395
19.2 - Variation in treasury shares
Justification for non-completion of the chart:
The Company has not kept treasury shares during the last three fiscal years or in the current
financial year.
396
19.3 - Information on treasury securities as of the closing date of the last fiscal
year
Justification for non-completion of the chart:
The Company has not kept treasury shares during the last fiscal year.
397
19.4 - Other relevant information
There is no other information that the Company deems to be relevant in relation to item 19 which
has not been disclosed in the other items of this Reference Form.
398
20.1. Information on securities trading policy
Date approved 27/03/2009
Position and/or function According to the Company’s Securities Trading Policy (“Trading Policy” or simply
“Policy”) the following are regarded as related persons (“Connected Persons”):
(i) controlling shareholders;
(ii) the Company’s Managers (members of the Executive Board and of the Board of
Directors);
(iii) Members of the Fiscal Council;
(iv) members of the Company’s other bodies with technical or advisory functions
created by statutory provision; or even
(v) executives and employees who, due to their job, function or position in the
Company, in the controlling companies, in the subsidiaries and in the affiliates or in
the EBX group in general, have knowledge of privileged information or relevant
information about the Company.
Main characteristics
The aim of the aforementioned Trading Policy is to establish the rules and procedures that should be observed and applied
by the Connected Persons, as defined above, in connection with trading securities issued by the Company, including their
Derivatives (American Depositary Receipts, for example), with a view to preventing the practice of Insider Trading; that is to
say, the utilization of Privileged or Relevant Information, by Connected Persons and regarding which confidentiality should
be maintained, to obtain undue economic advantage, either for themselves or for others, by means of trading, either on
their own behalf or on behalf of third parties, in Securities issued by the Company.
The rules of the aforementioned Policy also define the periods during which Connected Persons should abstain from
trading in Securities issued by the Company (as indicated in the item below), so as to avoid any potential questions or
suspicions in relation to the undue use of Privileged or Relevant Information not disclosed to the public, in the ways set
forth in CVM Instruction nº 358/2002 (“Instruction 358”).
Connected Persons, Linked Persons and Managers who fail to comply with any provision that is included in the Trading
Policy, in addition to being subject to respond to a sanctioning administrative procedure and the application, by the CVM, of
the penalties set forth in article 11 of Law nº 6385, of December 7, 1976, are also obliged to reimburse the Company and/or
other Connected Persons, in full and without limitation, for all the losses that the Company and/or other Related Persons
incur and which result, directly or indirectly from the aforesaid violation.
Blackout periods and description of the inspection procedures
Related Persons are not allowed to trade in securities issued by the Company
during the following periods (blackout periods):
(i) 15 days prior to disclosure of the Company’s annual financial statements (DFP)
and quarterly financial statements (ITR);
(ii) from the moment that a Connected Person, Linked Person, executive or
employee of the Company has access to the Privileged Information until such time
that the Relevant Act or Fact in relation to the conclusion of the deal or transaction
that the Privileged Information was related to has been disclosed to the market;
and
(iii) in all those periods in which by virtue of the communication of the DRI, it has
been determined that no trading shall take place.
The Company’s Investor Relations Officer is responsible for notifying Connected
Persons of blackout periods.
The prohibitions contained in the Trading Policy include all trading in securities
issued by the Company carried out directly and indirectly by Connected Persons.
Moreover, managers, executives and employees who have left the Company are
not allowed to trade in the Company’s securities in accordance with the following
rules:
399
(i) Managers: for a period of six months after their termination or resignation; and
(ii) Managers, executives and employees: until public disclosure, by the Company,
of the Relevant business Act or Fact that began during their period of management
– even if it takes more than six months after termination or resignation in the case
of former Managers – except if trading in the Company’s shares, after disclosure of
the Relevant Act or Fact, might interfere in the conditions of the aforementioned
business activities, to the expense of the Company’s shareholders or the Company
itself.
Connected Persons should also direct Linked Persons related to them to comply
with the blackout periods.
Other periods in which there are restrictions on trading: (a) when there is, on the
part of the Company’s management, the intention to bring about the consolidation,
spin-off, merger, transformation or corporate restructuring; and (b) when there is,
on the part of the Company’s management, the intention to carry out a capital
increase, whether public or private, or to issue debt or debentures.
The Company’s Investor Relations Officer is responsible for monitoring and
carrying out the Trading Policy, it being his/her job to coordinate the list of
Connected Persons and Linked Persons and keep it permanently up-to-date, as
well as to ensure that Connected Persons are fully informed as to their condition
and of the restrictions imposed by the Company’s Trading Policy.
The persons included in the prohibition list are obliged to communicate to the
Company’s Investor Relations Officer any trade made with the shares issued by
the Company, as well as by its controlling shareholders and by its subsidiaries.
The communication should be made within the space of five days after carrying out
each trade and should contain the following minimum information, as a result of
CVM Instruction 358: (a) name, qualification; (b) quantity of shares traded and, in
the case of other securities, their characteristics; (c) identification of the issuer
company and of the balance of the position held before and after the trade; and (d)
the manner of acquisition or disposal, price and date of the transactions.
If there is any atypical oscillation in the price or in the quantity traded of the
securities issued by the Company, the Company’s Investor Relations Officer
should investigate the people who have access to Privileged or Relevant
Information, with the aim of ascertaining if they, or Linked Persons related to them,
traded securities issued by the Company making use of the differentiated access
to that information, and examining whether they have maintained the due
confidentiality with regard to this Privileged or Relevant Information.
Additionally, related persons should (a) keep relevant information about the
Company confidential and not use it to for the purpose of gaining advantages for
themselves or for anyone else; and (ii) make every effort to ensure that their
subordinates and third parties maintain confidentiality regarding such information
and do not use it for their own benefit.
400
20.2 - Other relevant information
There is no other information that the Company deems to be relevant in relation to item 20 which
has not been disclosed in the other items of this Reference Form.
401
21.1 Description of internal rules, regulations and procedures for disclosing
information
The Company has a Policy on Disclosure and Use of Market Information (“Disclosure Policy”),
which is described in item 21.2 of this Reference Form, the full content of which can be found on
the Brazilian Securities Commission’s site (www.cvm.gov.br) and on the Company’s site
(www.eneva.com.br/ri).
In addition, according to the legislation and the CVM rules that are in force, in particular the
Brazilian Corporation Law and CVM Instruction nº 358, date January 3, 2002 as amended (“CVM
Instruction 358”), all and every public company should, as a general rule, at regular intervals
present the CVM (Brazilian Securities Commission) and the BM&FBOVESPA with certain specific
information, such as quarterly financial reports and annual financial statements accompanied by
management’s report and the independent auditors’ opinion, as well as filing with the CVM and the
BM&FBOVESPA any shareholder agreements that exist, notifications regarding shareholders’
general meetings and communications in relation to the disclosure of relevant acts or potential
relevant facts.
CVM Instruction 358 also governs the rules regarding the disclosure and or use of information
about relevant acts or facts, including, but not restricted to, those which relate to the disclosure of
information regarding trading in and the acquisition of securities issued by public companies.
These rules:
establish the concept of relevant act or fact which gives rise to the obligation of disclosure.
Included within the concept of relevant act or fact are decisions taken by the controlling
shareholders, resolutions taken by the shareholders in general meeting or by the
company’s board of directors, or any other political, administrative, technical, financial or
economic acts or facts related to the company’s business that may influence the price of its
shares and/or investors’ decisions to trade and/or keep these shares or to exercise any
rights underlying these shares;
specify acts or facts that are considered relevant, such as the signing of contracts
foreseeing the transfer of control of the company, the entry or exit of shareholders who
have any operational, administrative, financial or technological agreement or collaboration
with the company as well as the occurrence of any corporate restructuring carried out
among the companies related to the company in question;
oblige the public company to disclose relevant acts or facts to the CVM and to the
BM&FBOVESPA, as well as to the market in general, by means of the publication of the
aforementioned relevant acts or facts in the newspapers generally used by the aforesaid
company;
demand that the acquirer of control of a public company disclose a relevant fact, including
its intention, or not, to cancel the company’s registration as a public company, within the
space of a year;
demand that the members of the board of directors and of the fiscal council (or of any
technical or consultive body) of a public company disclose to the CVM and to the
BM&FBOVESPA the number, type and manner of trading in the shares issued by the
aforementioned company, its subsidiaries and its parent companies, held by the aforesaid
402
persons, as well as by their spouses, companions and dependents, also informing them of
any changes in the aforementioned shareholdings;
demand that any direct or indirect controlling shareholder, or any shareholder electing
members of the board of directors of a public company who increases or decreases his/her
stake in the aforementioned company by more than 5%, should disclose the information
related to the aforesaid acquisition or disposal; and
prohibit the trading of securities based on privileged information.
Moreover, the Company joined the Novo Mercado, the BM&FBOVESPA special listing segment in
terms of corporate governance which, in addition to the legislation and the applicable CVM
regulations, envisages more rigorous disclosure rules and increases the information to be
disclosed by public companies that adopt such differentiated corporate governance practices.
Among other things, the Novo Mercado Regulations impose the obligation to present cash flow
statements together with the quarterly information and the annual financial statements as well as
the annual disclosure of the schedule of corporate events.
According to the applicable CVM regulations, any decision by a potential controlling shareholder,
decision of the shareholders taken in general meeting or of the Company’s administrative bodies,
or any act or fact of a political, administrative, technical, business or economic financial character
that has occurred or which is related to the Company’s business, which may influence to a
measurable degree (i) the price of securities issued by it; (ii) investors’ decisions to purchase, sell
or keep the securities issued by it; or (iii) investors’ decisions in relation to the exercising of any
rights that relate to the condition of ownership of the securities issued by it, is regarded as a
relevant item of information.
Also, according to the applicable CVM regulations, prior to disclosing to the market any relevant
act or fact that has occurred in connection with the Company, it is prohibited for trading in shares
issued by the Company to be carried out by any of the following: (i) the Company itself; (ii)
potential direct or indirect controlling shareholders; (iii) the company’s directors; (iv) the company’s
advisors; (v) the members of any of the company’s bodies with technical or consultive functions,
created by arrangement; (vi) anyone who, by virtue of their job, function or position in the
company, in the parent companies, subsidiaries or affiliate companies, has knowledge of the
relevant act or fact; (vii) anyone who has knowledge of information related to the relevant act or
fact and knows that it relates to information which has not yet been disclosed to the market, in
particular those who have a commercial or professional relationship with the company or one of
trust, such as independent auditors, market analysts and consultants, whose job it is to check
regarding the disclosure of information prior to trading in securities issued by the company; and
(viii) members of the board of directors who have left the company prior to public disclosure or
business activities or facts that began during their period of management, and who will continue to
be subject to the ban for a period of six months after they have left the company.
The aforementioned ban also prevails whenever there is underway an acquisition or disposal of
shares issued by the Company, subsidiaries, affiliate companies or another company which is
under common control, or if an option or mandate has been granted for the same purpose, as well
as if the company has the intention of promoting incorporation, total or partial split, merger,
transformation or corporate restructuring. The persons mentioned above are also prohibited from
trading in securities issued by the Company during the 15 days prior to the publication of the
quarterly information (ITR) and the financial statements.
403
21.2 - Description of the policy for disclosing relevant acts or facts and of the
procedures for maintaining secrecy about relevant information not disclosed
The Company has a Policy on Disclosure and Use of Market Information (“Disclosure Policy” or
simply “Policy”), the purpose of which is to establish guidelines and procedures regarding the use
of relevant information about the Company, as well as maintaining confidentiality with regard to
privileged information, until such time as it is disclosed to the market, under the terms of CVM
Instruction nº 358 and CVM Instruction nº 369. It is compulsory for Connected Persons to comply
with these directives and procedures. The Disclosure Policy is based on the following principles
and objectives:
to provide complete information to the shareholders and investors;
to guarantee ample and immediate disclosure of Relevant Acts or Facts;
to ensure that all shareholders and investors have equal access to the public information
about the Company;
to make every effort to keep undisclosed Relevant Acts or Facts confidential;
to contribute to the stability and development of the Brazilian capital markets; and
to consolidate good corporate governance practices in the Company.
According to the Disclosure Policy, “Relevant Acts or Facts” denotes any decision by the
Company’s controlling shareholder, decision of the shareholders taken in general meeting or of the
Company’s administrative bodies, or any act or fact of a political, administrative, technical,
business or economic financial character that has occurred or which is related to the Company’s
business, which may influence to a measurable degree (a) the price of securities issued by the
Company or which are pegged to them; (b) investors’ decisions to purchase, sell or keep those
securities; and (c) investors’ decisions in relation to the exercising of any rights that relate to the
condition of ownership of the securities issued by the Company or which are pegged to them, in
particular, but not being restricted to, the acts or facts listed in CVM Instruction 358.
The Disclosure Policy determines that Connected Persons have a duty to maintain confidentiality
regarding privileged information until such time as it is disclosed to the market, and to make every
effort to ensure that subordinates and third parties who they trust do the same, being jointly
responsible with these in the case of failure to observe the duty of confidentiality. It is stressed that
Connected Persons may not use privileged information that they have access to for their own
benefit or for the benefit of third parties.
In addition, Connected Persons should make every effort to ensure that those who have a
commercial or professional relationship or a relationship of trust with the Company, such as
independent auditors, securities analysts, consultants and institutions that belong to the
distribution system also observed this duty. Therefore, Connected Persons will be responsible for
communicating to the Company’s Investor Relations Officer all and any Relevant Acts or Facts that
they have knowledge of, and which they know the Company’s Investor Relations Officer is not yet
aware of, as well as checking to see if the Company’s Investor Relations Officer has taken
measures regarding the disclosure of the respective information. If these individuals confirm that
the Company’s Investor Relations Officer has failed in his duty to communicate and disclose, and if
no decision has been made in connection with maintaining confidentiality regarding the Relevant
Act or Fact, they should immediately communicate the Relevant Act or Fact to the CVM in order to
be relieved of the responsibility imposed by the applicable legislation in the case of their failure to
make disclosure.
404
The Policy also determines that the Company’s Executives and Employees, among other
procedures, should always consult the Investor Relations Officer or the Investor Relations area for
guidance before any interviews or making any pronouncements, in addition to passing on to them
any external contact made by research areas or banks’ share selling areas and investors in
general. The Company’s Executives and Employees should only provide the external public with
information that has been widely disclosed to the market.
Those persons who are subject to the provisions set forth in the Disclosure Policy are obliged to
ensure that information which is disclosed about the Company’s equity and financial condition is
correct, complete, continuous and developed through those members of management whose
function this is.
According to the regulations that are in force and the Company’s Disclosure Policy, the Company’s
Investor Relations Officer is the one who is primarily responsible for communicating and disclosing
the Relevant Act or Fact regarding the Company to the CVM, to the Bovespa and, if it is the case,
to the Stock Markets and Over-the-Counter Market in which the securities issued by the company
are admitted for trading, in a clear and precise way, in language which is objective and accessible
to the investor public, with it being a general rule that this disclosure should be made immediately
after the item’s occurrence and at the same time to the entire market, by means (i) of publication in
the newspapers with a large circulation that are normally used by the Company; and (ii) making
the respective information available, with at the very least the same content as that furnished to
the CVM and to the BM&FBOVESPA, on the world wide web.
Disclosure of the Relevant Act or Fact should, whenever possible, be made simultaneously to the
CVM and to the market entities where the securities issued by the Company are trade, before the
start of, or after the close of, trading on the BM&FBOVESPA and, if it is the case, to the Stock
Markets and Over-the-Counter Market in which the securities issued by the company are admitted
for trading. When the securities issued by the Company are being traded simultaneously on both
Brazilian as well as Foreign Market Entities, the disclosure should, as a rule, be made before the
start of, or after the close of, business in all the countries. If there is an incompatibility in terms of
the hours, the operating hours of the Brazilian market will take precedence.
It will also be the responsibility of the Company’s Investor Relations Officer to evaluate the need to
ask, always simultaneously, both the Brazilian and Foreign Market Entities, to suspend trading in
the securities, for as much time as is necessary to properly disseminate the relevant information, if
it is essential that the disclosure of the Relevant Act or Fact be made during trading hours. The
Company’s Investor Relations Officer should provide proof to the Brazilian Market Entities that the
request for the suspension of trading was also made to the Foreign Market Entities.
The Company should immediately disclose any relevant information whenever: (i) the information
is beyond the control of the Company and its bodies, as well as of those who originally had
knowledge of it; and (ii) there are totally atypical oscillations in the quote, price or quantity of
shares traded which may be related to some loss of control of relevant information. And, whenever
the Company’s Investor Relations Officer is asked to provide investors with additional clarification
to the communication and the disclosure of the Relevant Act or Fact, or in the case of atypical
oscillations such as those mentioned previously, the Company’s Investor Relations Officer should
investigate those individuals with access to the Relevant Acts or Facts, for the purpose of checking
whether these have knowledge of information that should be disclosed to the market.
Under the assumption of broadcasting the Relevant Act or Fact by any whatsoever means of
communication, including press releases, or at class entity meetings, investors, analysts or with a
405
selected audience, both in Brazil as well as abroad, the Company’s Investor Relations Officer
should simultaneously disclose the respective information to the market.
Lastly, it is stressed that, violation of the rules established in the Disclosure Policy, in CVM
Instruction 358/2002 and in the other applicable legal and regulatory provisions may subject the
offending party to answer administrative proceedings and to the application by the CVM, of the
penalties foreseen under the law or in the applicable regulations.
Exception to Disclosure
It may be allowed, in exceptional circumstances, for the Relevant Acts or Facts, not to be
disclosed, if the Company’s controlling shareholder or if its board of directors consider that doing
so would jeopardize the Company’s legitimate interests, with it being compulsory in this case to
follow the procedures established under the applicable rules.
The Company’s controlling shareholder or its board of directors, are obliged, by intermediation of
the Company’s Investor Relations Officer or directly, to immediately disclose the Relevant Act or
Fact, in the case of any of the following assumptions:
there are indications that the information has gotten out of control; or
there are atypical oscillations in the quote, price or quantity traded of securities issued by
the Company or which are pegged to them.
Whenever there are doubts, on the part of those who have knowledge of the Relevant Act or Fact,
with regard to the legitimacy of not disclosing the information, the matter should be submitted to
the CVM, in the manner set forth in the applicable rules, with it being up to the CVM to decide
whether or not to disclose it.
406
21.3 - Managers in charge of implementing, maintaining, assessing and
inspecting the information disclosure policy
The Investor Relations Officer is the one who is responsible for implementing, maintaining,
monitoring and carrying out the Company’s Disclosure Policy.
407
21.4 - Other relevant information
There is no other information that the Company deems to be relevant in relation to item 21 which
has not been disclosed in the other items of this Reference Form.
408
22.1 - Acquisition or disposal of any relevant asset that is not included in the
issuer’s ordinary business operations
There was no acquisition of disposal of any relevant asset that is not included in the issuer’s
normal business operations.
409
22.2 - Significant changes in the issuer’s form of conducting business
There was no significant change in the Company’s form of conducting business.
410
22.3 - Relevant agreements entered into by issuer and its subsidiaries which
are not directly related to its operating activities
There are no relevant agreements that have been entered into by the Company or its subsidiaries
which are not directly related to its operating activities.
411
22.4 - Other relevant information
There is no other relevant information which has not been disclosed in this Reference Form.
ajd/dtr/ajd/43334.doc 6/19/13