Beruflich Dokumente
Kultur Dokumente
Balance sheets Statements of income Statements of changes in shareholders' equity Statements of cash flows Statements of added value Notes to the financial statements
Balance sheets
Parent company Assets Current assets Cash and cash equivalents Trade accounts receivable Current tax assets Receivables from suppliers Prepayments Pledges and restricted deposits Dividends receivable Other receivables Total current assets Note 9/30/2012 12/31/2011 Consolidated 9/30/2012 12/31/2011
6 7 8 9 11
Non-current assets Related party transactions Loans - subsidiaries Loans - Parent companies Special savings bonds Pledges and restricted deposits Goodwill (-) Provision for goodwill at the time of the take-over Other receivables Investments Other investments Fixed assets in service Constructions in progress
10 24.949 451 119.272 (119.272) 46 650.322 60 11.665 49.384 25.229 244 449 119.272 (119.272) 464.709 60 7.980 44.636 25 12.615 119.272 (119.272) 46 70 1.500.506 210.048 244 25 11.875 119.272 (119.272) 70 196.337 959.120
11 12
13 14 14
736.877
543.307
1.723.310
1.167.671
Total assets
990.769
816.237
2.088.689
1.579.501
Balance sheets
Parent company Liabilities Current liabilities Suppliers Loans and financing Charges on loans Current tax liabilities Salaries and vacations payable Other accounts payable Note 9/30/2012 12/31/2011 Consolidated 9/30/2012 12/31/2011
15 16 16 17
5.123
155.019
211.471
178.757
Non-current liabilities Loans and financing Charges on loans Related party transactions Loans - subsidiaries Total non-current liabilities Total liabilities
16 16 10
Shareholders' equity Capital (-) Expenses with issue of shares Accumulated loss Total shareholders' equity
18 1.017.511 (36.112) 1 (8.197) 973.203 702.788 (34.241) (19.416) 649.131 1.017.511 (36.112) 1 (9.317) 972.083 702.788 (34.241) (21.673) 646.874
990.769
816.237
2.088.689
1.579.501
Statements of income
Parent company
Note
Net income
19
Cost of services Depreciation and amortization Cost of operation Distribution system use charges Gross income (loss) Operating expenses Administrative and general expenses Depreciation and amortization Other expenses Equity income (loss)
20
20
Income (loss) before net financial income (expenses) and taxes Financial expenses Financial income Net financial income (expenses)
21
9.995
3.081
11.219
(1.370)
22
9.995
3.081
11.219
(1.370)
Basic earnings per share attributable to Company's shareholders - R$ per preferred share per common share
0,04 0,04
0,02 0,02
0,05 0,05
(0,01) (0,01)
Diluted earnings per share attributable to Company's shareholders per preferred share per common share
0,04 0,04
0,02 0,02
0,05 0,05
(0,01) (0,01)
Statements of income
Consolidated
Note
Net income
19
55.356
9.490
74.995
27.063
Cost of services Depreciation and amortization Cost of operation Distribution system use charges Gross income (loss) Operating expenses Administrative and general expenses Depreciation and amortization Other expenses Equity income (loss)
20
20
Income (loss) before net financial income (expenses) and taxes Financial expenses Financial income Net financial income (expenses)
21
12.506
4.309
16.601
1.604
22
(2.132)
(849)
(4.245)
(1.838)
10.374
3.460
12.356
(234)
Basic earnings per share attributable to Company's shareholders - R$ per preferred share per common share
0,05 0,05
0,02 0,02
0,06 0,06
(0,00) (0,00)
Diluted earnings per share attributable to Company's shareholders per preferred share per common share
0,05 0,05
0,02 0,02
0,05 0,05
(0,00) (0,00)
Capital Reserve
Total
Balances at January 1, 2011 Loss for the period Capital increase - issue of shares Expenses with issue of shares Balances at September 30, 2012
Capital Reserve 1 1
Balances at January 1, 2011 Loss for the period Capital increase - issue of shares Expenses with issue of shares Capital Reserve Balances at September 30, 2012
Capital Reserve -
Balances at January 1, 2011 Loss for the period Capital increase - issue of shares Expenses with issue of shares Balances at September 30, 2012
Capital Reserve 1 1
Balances at January 1, 2011 Loss for the period Capital increase - issue of shares Expenses with issue of shares Capital Reserve Balances at September 30, 2012
1.476 (596) 645 29 383 (2) (21.172) (8.018) (3.178) (81) 1.052 (2.360) (379) 262 661 (12.041) (4.857) (16.898) (8.880)
875 (739) 3.063 (4) (6.745) (4.920) 512 35 (2.098) (3.630) (1.201) 84 958 (10.260) (10.750) (21.010) (16.090)
20.334 (2) 645 188 22.302 155 (740) 55.238 (47.269) (3.412) (731) 8.044 (548) 154.501 6.044 638 172.505 (2.796) (10.648) 159.061 103.823
5.130 (5) 11.035 (919) 15.007 (204) 301 (1.104) (1.922) 195 7.276 132 958 20.639 (72) (19.575) 992 (14.015)
Payment of income and social contribution taxes Payment of interest on loans Net cash used in operational activities Cash flows from operating activities Cash flows from investment activities (Increase) in investment (Increase) decrease in AFAC [Advance for future capital increase] Acquisition of property, plant and equipment in service Acquisition of property, plant and equipment in progress
(132.230) (410.829)
(1.439) (568.360)
Net cash generated (consumed) in financing activities Cash flows from financing activities Issue of shares Expenses with issue of shares (Increase) decrease in restricted deposits Increase in loans/financings Payments of loans Increase (decrease) in loans Loan with related parties - Receipt Loan with related parties - Payment Loan with related parties - Granted Net cash generated/(consumed) in financing activities
(170.989)
(91.175)
(543.059)
(569.799)
Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at January 1 Cash and cash equivalents on September 30
77.836
27.063
18.011 49.695
9.681 19.804
4.495 1.161
3.688 802
4.495 1.161 `
3.688 802
302 -
76 -
7.729 -
2.200 -
1. Operations Renova Energia S.A. (Renova or "Company" or Parent Company), with main offices in the city of So Paulo, State of So Paulo, a publicly-held company, was set up on December 6, 2006. The Company is engaged in generating and trading electric power in all its forms, producing fuel from natural and renewable sources, providing logistics services to environmental advisory firms, providing advisory services for energy solutions related to the generation, trading, transmission and other businesses involving alternative energies, providing engineering, construction, logistics, study development and project services related to energy generation plants in all its forms and its systems, as well as its implementation, operation, maintenance and exploration, manufacturing and trading of pieces and equipment for the generation, transmission and distribution of energy; operating in the electric power generation market through solar power generation equipment, including, but not limited to, trading power generated by solar source, trading equipment for the generation, transmission and distribution of energy from solar source, processing of polysilicon, ingots, wafers, cells, panels, modules and inverters, trading, leasing, renting or any other form of making energy generation assets available and holding interest in the capital of other entities. Direct and indirect ownership interests are as follows:
09/30/2012 Direct Indirect 100 99,99 99 12/31/2011 Direct Indirect 100 99,99 99
Company - PCH Enerbras Centrais Eltricas S.A. Energtica Serra da Prata S.A. Renova PCH LT DA (former Bela Vista)
Company - Generating wind energy Nova Renova Energia S.A. (Holding) (former Serto) Bahia Elica Participaes S.A. (Holding) Centrais Elicas Pinda S.A. Centrais Elicas Igapor S.A. Centrais Elicas Licnio de Almeida S.A. Centrais Elicas Candiba S.A. Centrais Elicas Ilhus S.A. Salvador Elica Participaes S.A. Centrais Elicas Alvorada S.A. Centrais Elicas Paje do Vento S.A. Centrais Elicas Planaltina S.A. Centrais Elicas Rio Verde S.A. Centrais Elicas Guirap S.A. Centrais Elicas Nossa Senhora Conceio S.A. Centrais Elicas Guanambi S.A. Centrais Elicas Porto Seguro S.A. Centrais Elicas Serra do Salto S.A. Renova Elica Participaes S.A. Centrais Eltricas Borgo Ltda Centrais Eltricas Dourados Ltda Centrais Eltricas Maron Ltda Centrais Eltricas Serra do Espinhao LT DA Centrais Elicas Ametista Ltda Centrais Elicas Caetit Ltda Centrais Elicas Espigo Ltda Centrais Elicas Pelourinho LT DA (former Palmares) Centrais Elicas Piles LT DA (former Recncavo) Centrais Elicas Morro S.A. (former Morrinhos) Centrais Elicas Serama S.A. Centrais Elicas T anque S.A. Centrais Elicas dos Araas S.A. Centrais Elicas da Prata S.A. Centrais Elicas Ventos do Nordeste S.A. Centrais Eltricas Botuquara LT DA Centrais Eltricas Itaparica LT DA Centrais Elicas So Salvador LT DA
(a) Authorization from ANEEL for a 30-year period (b) Authorization from ANEEL for a 35-year period (*) Companies in pre-operating stage.
Consolidation Full Full at Nova Renova (b) (b) (b) (b) (b) (b) (b) (b) (b) (b) (b) (b) (b) (b) (*) (*) (*) (*) (*) (*) (*) (*) (*) (*) (*) (*) (*) (*) (*) (*) (*) (*) Full at Bahia Elica Full at Bahia Elica Full at Bahia Elica Full at Bahia Elica Full at Bahia Elica Full at Nova Renova Full at Salvador Elica Full at Salvador Elica Full at Salvador Elica Full at Salvador Elica Full at Salvador Elica Full at Salvador Elica Full at Salvador Elica Full at Salvador Elica Full at Salvador Elica Full at Nova Renova Full at Renova Elica Full at Renova Elica Full at Renova Elica Full at Renova Elica Full at Renova Elica Full at Renova Elica Full at Renova Elica Full at Renova Elica Full at Renova Elica Full at Renova Elica Full at Renova Elica Full at Renova Elica Full at Renova Elica Full at Renova Elica Full at Renova Elica Full Full Full
% Interest 09/30/2012 12/31/2011 Direct Indirect Direct Indirect 99,99 100 99,99 99,99 99,99 99,99 99,99 100 99,99 99,99 99,99 99,99 99,99 99,99 99,99 99,99 99,99 100 99,99 99,99 99,99 99,99 99,99 99,99 99,99 99,99 99,99 99,99 99,99 99,99 99,99 99,99 99,99 99 99 99,99 100 100 100 100 100 100 100 100 100 99,99 99,99 99,99 99,99 99,99 99,99 99 99 99,99 99 100 99,99 99,99 99,99 99,99 99,99 100 99,99 99,99 99,99 99,99 99,99 99,99 99,99 99,99 99,99 100
Small Hydroelectric Plants The Enerbras Centrais Eltricas S.A. ("Enerbras"), established on February 9, 2001 as a limited liability company and converted on May 10, 2006 into a private corporation has the exclusive purpose of investing in the capital of Energtica Serra da Prata S.A. ("Espra"), a corporation headquartered in the city of Salvador, Bahia State. The indirect subsidiary Espra was initially established as a consortium on October 30, 2003 and converted into a private corporation on September 17, 2004. The sole business purpose of Espra is to generate and sell the electric power of Serra da Prata Hydroelectric Complex by means of its small hydroelectric power plants (PCHs): (i) Cachoeira da Lixa, with an installed capacity of 14.8MW(*); (ii) Colino 2, with an installed capacity of 16.0MW(*) and (iii) Colino 1 with an installed capacity of 11.0MW(*)whose operating activities started in May, July and September 2008, respectively. On June 30, 2004, the electric power generated by Serra da Prata Hydroelectric Complex was subject to a purchase and sales agreements entered into with ELETROBRS - Centrais Eltricas Brasileiras S.A., under the Incentive Program for Alternative Electric Power Sources (PROINFA). Through these electric power purchase and sales agreements, Espra will sell its entire electric power production which can be negotiated in the long term of twenty (20) years. The authorization period of Espra is 30 years and can be extended for another 30 years. Wind farms LER 2009 wind farms On December 14, 2009, the Company participated in Auction 03/2009-ANEEL, for the procurement of Reserve Electric Energy generated exclusively by wind power, pursuant to Ordinances 147/2009 and 211/2009 of the Ministry of Mines and Electric Energy (MME), and ommitted to sell average 127MW arising from 14 wind farms located in Bahia State. On October 26, 2010, wind power plants Guanambi, Porto Seguro, Rio Verde, Alvorada, Guirap, Ilhus, Candiba, Serra do Salto, Igapor and December 06, 2010 the SPES, Paje do Vento, Pinda, Planaltina, Licnio de Almeida and Nossa Senhora Conceio, respectively, entered into an electric power purchase and sale agreement with the Power Commercialization Chamber (CCEE) for a 20-year supply term. The 14 wind farms already have environmental operation licenses issued by the Environment Institute of the Bahia State (IMA) from June 2 to June 15, 2012. On June 22, 2012, ANEEL established required procedures and documentation to release these farms' billing, already registered by the Company to certify that farms' implementation is complete and that they have necessary conditions for operation, beginning as of July 1, 2012. On October 2, 2012, ANEEL published decisions listed below, certifying that generating units that comprise LER 2009 winning facilities met requirements to be considered able to start operations:
(*) Information not reviewed by independent auditors.
Ilhus Licnio de Almeida Nossa Senhora da Conceio Paje do Vento Pinda Planaltina Porto Seguro Rio Verde Serra do Salto
The Company is in contact with ANEEL to obtain clarification on criteria used to determine recognition date of wind facilities operation, as the Company understands that all facilities were able to operate on the date provided for in contract, namely July 1, 2012. In spite of the divergence in the recognition of dates in which operations started, the Company received the entire revenue amount expected for July 2012, August 2012, and September 2012, on October 23, 2012. Parques LER 2010 On August 26, 2010, the Company participated in Auction 05/2010-ANEEL, for the procurement of Reserve Energy generated exclusively by wind power, pursuant to Ordinances of the Ministry of Mines and Energy (MME) 555/2010, 645/2010, and 483/2010 and is committed to sell average 78MW arising from six wind farms located in Bahia State. On May 26, 2011, wind power plants Da Prata, Dos Aras, Morro, Ventos do Nordeste and July 20, 2011, the wind power plants Serama and Tanque, respectively, entered into an electric power purchase and sale agreement with the Power Commercialization Chamber (CCEE) for a 20-year supply term. Such farms shall commence their business operations by September 2013.
Wind farms LEN A-3 2011 On August 17, 2011, the Company participated in Auction 02/2011-ANEEL, for the procurement of Energia Nova (A-3), pursuant to Ordinances of the Ministry of Mines and Electric Energy (MME) 021/2008, 175/2009, 113/2011 and those that may be changed, and is committed to sell average 103.6MW arising from nine wind farms located in Bahia State. On August 20, 2012, SPEs Pelourinho, Ametista, Borgo, Serra do Espinhao, Caetit, Dourados, Espigo, Piles and Maron executed contracts for the purchase and sale of power with the following distributors: AES Sul, Amazonas Energia, Bandeirante, CEEE D, CELPA, CELPE, CELTINS, CEMIG D, COELBA, COELCE, COSERN, CPFL Paulista, CPFL Piratininga, CPFL Santa Cruz, CPFL Sul Paulista, EEB, ELEKTRO, Eletropaulo, Energisa BO, Energisa MG, Energisa PB, Energisa SE, and Escelsa for the supply term of 20 years. Such farms shall commence their business operations by March 2014.
Light
On July 8, 2011, Light Energia S.A. and the Company, by signing the shareholders agreement, entered into a commitment for the purchase of 400MW of installed power capacity deriving from Renovas portfolio projects. The companies will also have preference rights for the purchase or sale, as applicable, of wind power in long-term contracts entered into in the free trade market.
According to Provisional Measure No. 579, electric power concessions granted before the enactment of the Concessions Law (Law 8987/95) not yet submitted to bidding can be renewed only once, for up to 30 years, provided that concessionaires accept compensation through tariffs only, to cover operation and maintenance costs (O&M), charges, taxes, and, as applicable, transmission and distribution expenses. Some sectorial charges will be eliminated or reduced, and using them will be covered through Treasury allocations. The Companys generating assets were not immediately impacted by Provisional Act 579 regarding postponement of concessions, as our assets are explored through authorizations that mature only beginning as of 2033.
Shared control
On July 8, 2011, RR Participaes S.A. (RR), in the capacity of controlling shareholder of Renova Energia S.A. Renova, and Light S.A., in the capacity of new investor, and Renova, in the capacity of investee, entered into an Investment Agreement with the Company, whereby Light Energia S.A."Light Energia" entered in the Renova's capital by subscribing new common shares issued by the latter, corresponding to a capital increase at Renova in the amount of R$360,000. By means of such Investment on August 19, 2011, Light Energia became the holder of 34.85% of common shares of Renova and 25.85% of its total capital. (As detailed in note 18 - Shareholders' equity). After adhesion of BNDESPAR, as shown in the item below, percentage interest in capital became 22.03%. Minority shareholders also contributed to increase capital and exercised their preference right, in the amount of R$16,044; accordingly, total capital increase amounted to R$376,044.
BNDESPAR" On June 22, 2012, the Contract for Subscription of Deposit Certificates of Shares (Units) Issued by Renova Energia S.A. and Other Covenants", entered into by BNDES Participaes S.A. - BNDESPAR ("BNDESPAR"), Companhia Light Energia S.A. ("Light Energia"), Light S.A., RR Participaes S.A. ("RR"), Ricardo Lopes Delneri and Renato do Amaral Figueiredo ("Contract"), through which investment of BNDESPAR in the Company ("Investment") was regulated, was signed. BNDESPAR committed to subscribe and pay shares issued in the ambit of Capital Increase at the minimum amount of R$250,000. In addition to this minimum subscription, BNDESPAR took part in the apportionment of: (i) remaining Units, after the end of the period to exercise the preference right of other shareholders of the Company; and (ii) remainders possibly not subscribed by other shareholders of the Company and that are sold in an auction to be held at BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros, for the Price per Share (Auction"). RR Participaes S.A., Light Energia S.A. and InfraBrasil Fundo de Investimento em Participaes assigned their respective preference rights deriving from capital increase to BNDESPAR, at no cost. Investment funds will support implementation of the Company's business plan, which refers to projects that are already being developed, as well as to future wind or solar power projects or to small hydroelectric plants. On July 13, 2012, the Companys Board of Directors approved a capital increase of R$314,700, through the issuance of 24,987,244 common, registered, nominative shares, with no par value, and 8,730,416 preferred, registered, nominative, shares, with no par value (Capital Increase). On August 2, 2012, BNDESPAR exercised its preference right and paid capital in the amount of R$250,000, corresponding to 22,673,874 common shares and 4,111,649 preferred shares. Also during the preference right period, other Companys shareholders subscribed 1,866,301 common shares and 3,731,972 preferred shares, equivalent to R$52,251. After the preference right period, two rounds of surpluses occurred, and, on August 27, 2012, BNDESPAR subscribed and paid up 242,977 common shares and 477,690 preferred shares, totaling R$6,726 and, on September 5, 2012, 142,387 common shares and 285,696 preferred shares, totaling R$3,995. Minority shareholders subscribed and paid-up 37,432 common shares and 74,864 preferred shares in the first round of surpluses, totaling R$1,048 and 23,172 common shares and 46,344 preferred shares in the second round of surpluses, totaling R$649. Auction was held on September 26, and BNDESPAR subscribed and paid up 1 common share and 1 preferred share, and other shareholders subscribed and paid up 1,100 common shares and 2,200 preferred shares, totaling R$31. On October 2, 2012, capital increase was homologated and the Companys capital went from R$702,811 to R$1,017,511. The amount exceeding the amount intended for capital increase, R$1,099.70, determined by the difference between minimum issuance price and units sales price in the Auction, was accounted for in a Capital Reserve account.
Corporate Reorganization
On March 16, 2012, the Company authorized the capital increase of its subsidiary Nova Renova Energia S.A., a publicly-held company with head office in the City of So Paulo, State of So Paulo, at Avenida Roque Petroni Junior, n 999, Vila Gertrudes, CEP 04707-910, enrolled with CNPJ/MF under No. 12.041.313/0001-77 ("Nova Renova"), from the current R$344,596 to R$356,887 at book values of investments through the transfer of the total registered common shares, without par value, of its subsidiaries CE da Prata, CE Araas, CE Morro, CE Serama, CE Tanque and CE Ventos do Nordeste, under the terms of the Appraisal Reports, through the issuance of 12,291,409 new registered common shares, with no par value of Nova Renova. This change was necessary due to the financing structure adopted by the Company for its wind farms in connection with the Reserve Energy Auction - 2010 (LER). Accordingly, Nova Renova now holds the direct control of the aforementioned subsidiaries and the Company held indirect control over these companies. On March 16, 2012, the subsidiary Nova Renova Energia S.A. as identified above authorized the capital increase of its subsidiary Renova Elica Participaes S.A. from the current R$ 100.00 to R$ 12,291, total through the transfer of its shares held by its parent company Nova Renova S.A in the companies CE da Prata, CE Araas, CE Morro, CE Serama, CE Tanque and CE Ventos do Nordeste, through the issuance of 12,291,409 new common shares without par value of the Company. On May 31, 2012, the Company authorized the capital increase of its subsidiary Nova Renova Energia S.A., a publicly-held company with head office in the City of So Paulo, State of So Paulo, at Avenida Roque Petroni Junior, n 999, Vila Gertrudes, CEP 04707-910, enrolled with CNPJ/MF under No. 12.041.313/000177 ("Nova Renova"), from the current R$356,887 to R$372,019 upon the issuance of 15,131,144 new common shares, with no par value of Nova Renova. On June 01, 2012, the Company authorized the capital increase of its subsidiary Nova Renova Energia S.A., a publicly-held company with head office in the City of So Paulo, State of So Paulo, at Avenida Roque Petroni Junior, n 999, Vila Gertrudes, CEP 04707-910, enrolled with CNPJ/MF under No. 12.041.313/000177 ("Nova Renova"), from the current R$372,019 to R$387,764 at book values of investments through the transfer of the total registered common shares, without par value, of its subsidiaries CE Maron, CE Piles, CE Ametista, CE Dourados, CE Caetit, CE Espigo, CE Borgo, CE Serra do Espinhao and CE Pelourinho, under the terms of the Appraisal Reports, upon the issuance of 15,745,082 new common shares, with no par value of Nova Renova. This change was necessary due to the financing structure adopted by the Company for its wind farms in connection with the Reserve Energy Auction (A-3) - 2011 (LEN). Accordingly, Nova Renova now holds the direct control of the aforementioned companies and the Company held indirect control over these companies. On March 01, 2012, the subsidiary Nova Renova Energia S.A. as identified above authorized the capital increase of its subsidiary Renova Elica Participaes S.A. from the current R$ 27,423 to R$ 43,168, total through the transfer of its shares held by its parent company Nova Renova S.A in the companies CE Maron, CE Piles, CE Ametista, CE Dourados, CE Caetit, CE Espigo, CE Borgo, CE Serra do Espinhao and CE Pelourinho, upon the issuance of 15,745,082 new common shares with no par value of the Company.
99% Renova PCH LTDA 100% Bahia Elica Participaes S.A. 100% Salvador Elica Participaes S.A. 100% Renova Elica Participaes S.A. 99% Centrais Eltricas Botuquara LTDA
99,99% Centrais Elicas Pinda S.A. 99,99% Centrais Elicas Igapor S.A. Centrais Elicas Paje do Vento S.A. Centrais Elicas Alvorada S.A.
99,99% 99,99% Centrais Elicas Morro S.A. 99,99% 99,99% Centrais Elicas Ventos do Nordeste S.A. 99,99% 99,99% Centrais Elicas S.A. Centrais Elicas Rio Verde S.A. 99,99% 99,99% 99,99% Centrais Elicas Guirap S.A. Centrais Elicas Tanque S.A. 99,99 Centrais Elicas dos Araas S.A. Centrais Elicas Nossa Senhora Conceio S.A. 99,99% 99,99% Centrais Elicas da Prata S.A. Centrais Elicas Guanambi S.A. 99,99% 99,99% 99,99% Centrais Elicas Porto Seguro S.A. 99,99% 99,99% Centrais Elicas Serra dos Saltos S.A. 99,99% Centrais Eltricas Borgo LTDA 99,99% Centrais Eltricas Serra do Espinhao LTDA 99,99% Centrais Elicas Caetit LTDA Centrais Elicas Ametista LTDA Centrais Elicas Pelourinho LTDA
99% Centrais Eltricas Itaparica LTDA 99,99% Centrais Elicas So Salvador LTDA
99,99% Centrais Elicas Licnio de Almeida S.A. 99,99% Centrais Elicas Candiba S.A.
99,99% Centrais Elicas Piles LTDA 99,99% Centrais Eltricas Maron LTDA
2. Summary of significant accounting policies The Company's individual and consolidated interim financial statements were prepared and are being presented in accordance with International Accounting Standards (IAS) IAS 34 Interim Financial Reporting/CPC 21(R1) Interim statements, respectively issued by International Accounting Standards Board (IASB) and Committee of Accounting Pronouncements (CPC), which deals with the interim reports. Therefore, these interim financial statements should be read together with the individual and consolidated financial statements of Renova Energia S.A on December 31, 2011, prepared in accordance with Brazilian accounting practices and International Financial Reporting Standards (IFRS).
the consolidated interim financial information was prepared according to the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB) and also in accordance with accounting practices adopted in Brazil (CPCs): the interim financial information of the Parent Company was prepared in accordance with the CPCs.
The interim financial information of the Parent Company was prepared in accordance with CPCs, and, in the case of the Company, these practices differ from the IFRS applicable to separate interim financial information due to the fact that investments, as, for IFRS purposes, they would be valued at cost or fair value. Pursuant to CPC 43 R1, the shareholders' equity and net income presented in the individual financial interim information, on September 30, 2012 and 2011, differ from the IFRS only in view of the following: (i) adoption of the equity method of accounting in the evaluation of investments in subsidiaries and (ii) existence of balance of deferred assets not yet amortized of the subsidiary, also in these statements. The reconciliation of shareholders' equity and net income for the years ended September 30, 2012 and December 31, 2011 is presented in the note 4. The statements of comprehensive income are not being submitted, as there are no amounts to be presented on this concept; in other words, net income for the year is equal to the total comprehensive income. The issue of individual and consolidated interim financial information (which are expressed in thousands of Reais, rounded to the nearest value, except otherwise indicated) was authorized by the Board of Directors on November 08, 2012.
b. Measuring basis
The individual and consolidated interim financial information were prepared using historical cost as the value base, except for the valuation of certain non-current assets such as financial instruments, which are measured at fair value.
3. Main accounting policies There were no changes in the Company's accounting practices in relation to those disclosed in the financial statements as of December 31, 2011. The accounting policies described in detail below have been consistently applied to all the years presented in this individual and consolidated interim financial information. a. Basis of consolidation The accounting criteria adopted in their calculation were uniformly applied among the various companies of the Company. Description of the main consolidation procedures: elimination of intercompany asset and liability account balances; elimination of investments of parent company in the shareholders' equity of direct and indirect subsidiaries; elimination of intercompany income and expense balances and unearned income arising from intercompany transactions. Unrealized losses are eliminated in the same way as unrealized gains, but only to the extent that there is no evidence of impairment.
b. Foreign currency Transactions in foreign currency are translated into the respective functional currency of the Company and its subsidiaries at the exchange rates on the dates of the transactions. Monetary assets and liabilities denominated and calculated in foreign currencies on the date of presentation are reconverted into the functional currency at the exchange rate determined on that date. Exchange gain or loss in monetary items is the difference between the amortized cost of the functional currency at the beginning of the year, adjusted by
interest and effective payments during the year, and the amortized cost in foreign currency at the exchange rate at the end of the presentation year. c. Financial instruments i. Non-derivative financial assets The Company initially recognizes the loans, receivables and deposits on the date that they are originated. All other financial assets (including assets designated at fair value through profit or loss) are initially recognized on the date of the negotiation under which the Company becomes a party to the contractual provisions of the instrument. The Company fails to recognize a financial asset when the contractual rights to the cash flows of the asset expire, or when they transfer the rights to reception of the contractual cash flows on a financial asset in a transaction in which essentially all the risks and benefits of ownership of the financial asset are transferred. Any interest in transferred financial assets that is created or retained is recognized as a separate asset or liability. Financial assets and liabilities are offset and the net amount reported in the balance sheet only when there is a legally enforceable right to set off and there is intention to settle on a net basis, or to realize the asset and settle the liability simultaneously. The Company classifies non-derivative financial assets in the following categories: financial assets recorded at fair value through profit or loss, investments held to maturity, loans and receivables and financial assets available for sale. Financial assets held to maturity If the Company has the intention and capacity to hold its debt instruments to maturity, these are classified as held to maturity. Investments held to maturity are measured by the amortized cost using the effective interest rate method, deducting any reductions in their recoverable value. Currently, the Company records judicial deposits and restricted deposits under assets held to maturity.
Loans and receivables Loans and receivables are financial assets with fixed or determinable payments, but not quoted on any active market. Such assets are initially recognized at fair value plus any transaction costs directly assignable. After their initial recognition, loans and receivables are measured at amortized cost using the effective interest rate method, reduced by any impairment losses. Loans and receivables comprise trade accounts receivable, receivables from suppliers and related party transactions. Assets at fair value through income (loss) A financial asset is is classified at fair value through profit or loss if it is held for trading, or stated as such when initially recognized. Financial assets are stated at fair value through profit or loss if the Company manages these investments and makes decisions on investment and redemption based on fair value according to the risk management and strategy of investment documented by the Company. The transaction costs are recognized in income (loss) as incurred. Financial assets recorded at fair value through profit or loss are measured at fair value and changes in the fair value of such assets, taking into account any gain with dividends, are recognized in the income for the year. Cash and cash equivalents Cash and cash equivalents comprise balances of cash and financial investments with original maturities of three months or less as of the contracting date, which are subject to an insignificant risk of change in value and are used to manage short-term obligations. ii. Non-derivative financial liabilities The Company recognizes debt securities issued and subordinated liabilities on the date that they are originated. All other financial liabilities (including liabilities designated at fair value through profit or loss) are recognized initially on the negotiation date on which the Company becomes a party to the contractual provisions of the instrument. The Company writes off a financial liability when its contractual obligations are discharged or canceled or expired. The Company classifies non-derivative financial liabilities in the category of other financial liabilities. Such financial liabilities are initially recognized at fair value plus any transaction costs directly assignable. After their initial recognition, these financial liabilities are measured at amortized cost using the effective interest rate method. The Company has the following non-derivative financial liabilities: loans, financing and suppliers. iii. Derivative financial instruments The Company does not have derivative financial assets and liabilities as note 23 f.
iv. Capital Common shares Common shares are classified as shareholders' equity. Additional costs directly attributable to the issue of shares are recognized as a deduction from shareholders' equity, net of any tax effects. Preferred shares Preferred stock has restricted voting rights and takes priority in the settlement of their share of capital. Compulsory minimum dividends are established by the by-laws and when reserved in the end of the year, they are recognized as liabilities. d. Property, plant and equipment i. Recognition and measurement Property, plant and equipment items are stated at historical acquisition or construction cost, net of accumulated depreciation and impairment losses, when required. The cost of the assets built by the entity includes the cost of materials and direct labor, any other costs to bring assets to the site and the necessary conditions for them to operate as intended by management, disassembly costs and restoration of the location where the assets are located, when applicable, and the costs and interest of loans and financing from third parties capitalized during the construction stage, less financial revenue from third party funds that have not been invested, when applicable. ii. Depreciation Fixed assets items are depreciated using the straight-line method in the income for the year based on the estimated economic useful life of each component. Land is not depreciated. Property, plant and equipment items are depreciated as from the date in which they are installed and become available for use; assets that are internally built are depreciated as from the day in which construction is completed and the asset becomes available for use. The useful lives estimated for the current and comparative year are shown in the Note 14. Our depreciation rates conform to ANEEL resolutions 02/1997, 44/1999 and 474/2012. The depreciation methods and residual values are reviewed at every year closing and any adjustments are recognized as changes in accounting estimates, and useful lives are those established by ANEEL.
e. Leases The Company has only operating leases and they are not recognized in the balance sheet. Payments for operating leasing are charged to income on the straight-line basis over the lease period. f. Environmental Licenses
Preliminary environmental licenses and installation permits, obtained in the enterprise planning and installation stage, consecutively, are unitized and recognized as cost of the small hydroelectric power plants and wind farms. g. Employee benefits Short-term employee benefits Obligations for short-term employee benefits are measured on a non-discounted basis and incurred as expenses as the related service is rendered. h. Provisions A provision is set up when the Company has a legal or constructive obligation as a result of a past event, which can be reliably estimated, and it is probable that an outflow of funds will be required to settle the obligation. The financial costs incurred are recorded in the statements of income. i. Results Income and expenses are recognized on the accruals basis. The revenue from electric power sales is recognized in the income statements upon measurement and supply: Income is not recognized if there are significant uncertainties as to its realization. Financial revenues comprise income from interest on cash investments and loans with related parties. Interest income ir recognized in income under the effective interest method. Financial expenses include basically loan interest expenses and financing. Borrowing costs which are not directly attributable to the acquisition, construction, or production of a qualifying asset are recognized in in the income using the effective interest rate method. j. Income and social contribution taxes
For the Company, the income and social contribution taxes of the current year were calculated based on the rates of 15% plus a surcharge of 10% on taxable income in excess of R$ 240 for income tax and 9% on taxable income for social contribution on net income, and take into account tax loss carryforward and negative basis of social contribution, limited to 30% of taxable income. The Company owns companies that opted for the deemed income system, according to calculations shown in note 22. The income tax and social contribution expense comprises current income tax. Current tax is recognized in income (loss). Current taxes are the taxes payable or receivable on the taxable income or loss for the year, at tax rates enacted or substantively enacted on the date of presentation of the interim financial information, and any adjustments to taxes payable in relation to prior years. k. Earnings per share The basic earnings per share are calculated based on the income for the financial year attributable to the Company's controlling shareholders and the weighted average of outstanding common and preferred shares in the respective period. The diluted earnings per share are calculated based on the mentioned average of outstanding shares, adjusted by instruments that can potentially be converted into shares, diluted, in the periods presented.
l. Segment information The results that are reported to management include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. The unallocated items include mostly the corporate assets, office expenses and income and social contribution tax assets and liabilities. m. Statements of added value The Company prepared individual and consolidated statements of added value in accordance with the rules of technical pronouncement CPC 09 - Statement of Added Value, which are presented as an integral part of the inteirim financial information under this CPC applicable to publicly-held companies, whereas under IFRS they represent additional financial information.
n. New standards and interpretations not yet adopted Several IFRS standards, standard amendments, and interpretations issued by IASB have not yet come into effect for the quarter ended September 30, 2012, as follows: News Standards, amendments to Standards and interpretations have effective dates as from annual periods started as of January 01, 2013, and have not been applied to the preparation of these interim financial statements. None of these new Standards are expected to have a material effect on the Company's interim financial statements except for IFRS 9 Financial Instruments that may change classification and measurement of financial assets maintained by the Company. The Company does not expect to adopt this Standard in advance and the impact of its adoptions has not been measured yet. The CPC (Accounting Pronouncements Committee) has not yet issued pronouncements equivalent to the aforementioned IFRSs, although that is expected to be done before the date when they are required to come into effect. The advanced adoption of IFRS pronouncements is conditioned to the prior approval by a regulatory act by the Brazilian Securities Commission ("CVM").
Shareholders' equity 09/30/2012 12/31/2011 Parent company - CPC Write-off of deferred assets and reversals of the respective amortization in income (loss) Consolidated (IFRS) 973.203 649.131
(1.120) 972.083
(2.257) 646.874
1.137 12.356
1.136 (234)
Description of the differences between accounting practices and respective adjustments: The principal difference between the consolidated financial statement (IFRS) and the parent company's financial statement (CPC) is described below: Deferred assets: For purposes of the consolidated interim financial information (IFRS), the Company's management recorded against retained earnings on the transition date of January 1, 2009 the balance formerly recorded as deferred assets based, whereas it was kept in the individual position (CPC) of the subsidiary Espra, since for purposes of this interim financial information, management opted to keep this balance up to its total realization through amortization.
5. Operating segments Three reportable segments are the Company's strategic business units. Such units offer different renewable electric power sources and are managed separately, as they require different technologies, developments and operation stages. The Company's reportable segment operations can be detailed as follows: The difference between segments and the consolidated company refers to administrative activities developed by the Holding: a) PCH (Renewable Energy Development and Generation using hydric sources). This segment includes the development of Inventory and Basic Projects and Energy generation projects for associates Espra and Enerbras. This segment is already in the operating stage and comparison for the semesters ended September 30, 2012 and 2011. b) Wind plants (Renewable Energy Implementation and Generation using wind sources). This segment includes the implementation and operation of bid winning electric power projects by the Company. This segment is under implementation of parks referring to Auctions LER 2009, LER 2010 and LEN 2011, expected to be started up in 2013 and 2014 respectively, and generating power from 14 wind farms of LER 2009 having been already under operation since July 2012.
c) New Technologies and Prospection (Development of new projects). This segment includes the prospection and development of new wind farm projects and the development of new technologies for electric power generation using renewable sources. This segment started in 2011. Information by segment on September 30, 2012 and 2011 for the income statement and December 31, 2012 e 2011 for total assets and liabilities are presented as follows:
09/30/2012 PCH Net revenue Non-manageable expenses Gross margin Manageable expenses EBITDA Depreciation Financial income (loss) Income tax and social contribution Net income T otal assets T otal liabilities 29.804 (637) 29.167 (4.570) 24.597 (3.924) (4.960) (1.975) 13.738 259.555 110.419 Wind farms 45.191 (2.422) 42.769 (4.498) 38.271 (14.934) (12.495) (2.270) 8.572 1.561.995 1.001.064 New technologies (925) (925) 09/30/2012 6.363 Adm (20.038) (20.038) (551) 11.633 (8.956) 260.776 5.123 Consolidated 74.995 (3.059) 71.936 (29.106) 42.830 (20.334) (5.822) (4.245) 12.429 2.088.689 1.116.606 PCH 27.063 (861) 26.202 (3.953) 22.249 (4.255) (7.032) (1.578) 9.384 260.653 124.921 Wind farms (1.316) (1.316) 73 (260) (1.503) 1.063.417 689.804
09/30/2011 New technologies (651) (651) 12/31/2011 2.527 Adm (11.992) (11.992) (224) 4.752 (7.464) 252.904 117.902 Consolidated 27.063 (861) 26.202 (17.261) 8.941 (5.130) (2.207) (1.838) (234) 1.579.501 932.627
(a) Information not reviewed by independent auditors. (b) Depreciation adjusted in accordance with IFRS for the PCH Segment.
Highly liquid short-term interest earning bank deposits are promptly convertible into a known sum of cash and subject to an insignificant risk of change of value. These financial investments refer substantially to fixed income funds of the Interbank Deposit Certificate (CDI), remunerated the rate ranging from 98.5% to 102.75% from the CDI.
Eletrobras (a) Cmara de Comercializao de Energia Eltrica (CCEE - Electric Power Trading Chamber)
(a) Corresponds to the sale of electric power generated by the indirect subsidiary Espra, relating to the PCHs Cachoeira da Lixa, Colino 1 and Colino 2. The average term for receiving amounts relative to power sale invoices is 30 days as of the billing day. (b) Corresponding to the billing months of July, August and September of 14 and wind farms opened in July 2012 of LER 2009 and as mentioned in Note 1. The balances as of September 30, 2012 comprise current amounts for which no losses are expected upon realization.
9. Advances to suppliers
Parent company 09/30/2012 12/31/2011 Advances to suppliers 3.649 4.701 Consolidated 09/30/2012 12/31/2011 5.435 13.479
Balances are basically comprised by advances to prospection services and equipment supply referring to short-term agreements.
9/30/2012 RR Enerbras Espra Renova PCH Nova Renova Energia Bahia Elica Salvador Elica CE Guanambi Renova Elica CE Serra do Espinhao CE Ametista CE Borgo CE Botuquara CE Caetit CE Dourados CE Espigo CE Itaparica CE Maron CE Pelourinho CE Piles CE So Salvador 11 13 8.461 16.421 12 10 10 11
12/31/2011 244 10 7 8 8.046 15.695 7 8 163 151 144 6 175 159 175 6 153 144 172 -
Maturity Beginning End 5/27/2009 12/28/2013 1/2/2008 12/28/2013 1/0/1900 1/0/1900 4/30/2010 4/30/2013 4/30/2010 4/30/2013 9/15/2009 12/31/2012 9/15/2009 12/31/2012 5/27/2011 5/27/2012 9/15/2009 9/15/2012 7/1/2011 3/31/2012 7/1/2011 3/31/2012 7/1/2011 3/31/2012 4/30/2010 4/30/2013 7/1/2011 3/31/2012 7/1/2011 3/31/2012 7/1/2011 3/31/2012 4/30/2010 4/30/2013 7/1/2011 3/31/2012 7/1/2011 3/31/2012 7/1/2011 3/31/2012 9/25/2009 9/25/2012
9/30/2012 12.443 -
12/31/2011 12.087 -
The main balances of assets and liabilities on September 30, 2012, as well as the transactions that influenced income for the period, relating to operations with related parties, result from transactions of the Company with its parent company, subsidiaries and other related parties. Although their due dates are in short-term, the Company expects that these amounts will be realized only in long-term. Revenue with loan interests in the consolidated result on September 30 2012 amounted to R$ 2 and on September 30, 2011, R$ 7.
a. Accounts receivable/payable
Accounts receivable - correspond to a loan from associated companies and subsidiaries as described in the chart. These loans were raised to supply these companies' cash requirements. Accounts payable - loan from associate Espra was raised to cover cash requirements. For both balances (receivable and payable), the amount due is subject to adjustment by the Long-term Interest Rate (TJLP) plus interest of 0.5% per year, which will not be capitalized. The request for authorization to prepare loan contracts for Espra was registered with ANEEL in 2008.
Management remuneration
The remuneration of Management's key personnel in the period ended September 30, 2012 and 2011, as required by CVM Resolution 560, of December 11, 2008, reached the amount of R$ 1,539 and R$ 1,410, respectively, amounts solely comprised of short-term benefits. Remuneration of the Board of Directors and Statutory Board paid by the Company in the accumulated period.
Parent company 3Q 12 Board of Directors Number of members Accumulated fixed compensation Salary or direct compensation Direct and indirect benefits Remuneration for participation in committees Variable compensation Bonus Post-employment benefits T otal amount of compensation per body
( *)
Statutory Board 5 1.397 1.397 n/a n/a n/a n/a n/a 1.397
Board of Directors
( *)
Statutory Board 5 40 25 33
2 10 4 7
On September 30, 2012, total number of shares granted and paid up in the Companys capital stock is 2,423,601 shares, at a ratio of one common share to two preferred shares. 11.
Current Non-current
40 451 491
40 449 489
The balances of R$12,151 and R$11,875 on September 30, 2012 and December 31, 2011, respectively, presented in Consolidated non-current assets" refer to the money market investment in a fixed income fund denominated "reserve account liquidity fund" at Banco do Nordeste do Brasil S.A., the objective of which is to guarantee the financing obtained for the construction of the PCHs of the indirect subsidiary Espra. This investment cannot be used until the final term of the financing in 2026. It reaches 97% of the variation of the Certificate of Interbank Deposit (CDI), the balances of which at the end of the year are already stated at market value. The remaining balance refers to deposits related to guarantees of inventory studies, whereas these deposits are made in favor of ANEEL - Agncia Nacional de Energia Eltrica (National Agency of Electrical Electric Power). 12.
On January 15, 2010, one of the Company's stockholders, Hourtin Holdings S.A. ("Hourtin"), was merged into the Company. As a result of this merger, the Company recognized a goodwill of R$ 119,272. This goodwill initially recognized in Hourtin was due to the acquisition of an ownership interest in the Company's capital. This goodwill is based on expected future earnings of Energtica Serra da Prata ("Espra") and other special purpose entities that hold projects through Renova. Despite of and as indicated in the Appraisal Report prepared to evidence goodwill economic basis, experts indicated that, as Renova is a pure holding and these earnings derive from direct and indirect investments, goodwill should be attributed to these investments' earnings. The assets that were transferred to the Company at the time of the transaction supported the goodwill amount, which was recorded as a contra entry to a capital reserve. Later considering the reverse merger occurred in early 2010, goodwill was fully recognized in the merging company and, for tax purposes, the Company records goodwill from this merger in Part B of Lalur. 13. Investments The Company did record equity in the income of its subsidiary companies in the amount of R$ 21,172 at September 30, 2012 and R$10,968 at December 31, 2011, respectively.
Shareholders' equity Interest % December 31, 2011 Enerbras Centrais Eltricas S.A. Wind farms - SPEs Total assets Total liabilities
Income (loss)
100% 100%
September 30, 2012 Enerbras Centrais Eltricas S.A. Wind farms - SPEs
100% 100%
Movement of investments
Balances 12/31/2011 Enerbras Centrais Eltricas S.A. Wind farms - SPEs Total 106.819 357.890 464.709 Capital increase Advances for future capital increase Equity in net income of subsidiaries 12.690 8.482 21.172 Balances 9/30/2012 119.509 530.813 650.322
46.932 46.932
117.509 117.509
The shareholders' equity of Enerbras as of September 30, 2012 is R$119,509. The net income for the period is R$12,690 and capital is R$101,956, represented by 5,170,101 shares, 4,337,536 thousand of which are common shares, 3 preferred class A shares and 832.562 preferred class B shares, all nominative with no par value. The shareholders' equity of Nova Renova as of September 30, 2012 is R$530,635. The net income for the period is R$8,500 and capital is R$404,552, represented by 404,552,392 common shares, nominative and with no par value. On September 30, 2012, the shareholders equity of the companies Centrais Eltricas Botuquara, Centrais Eltricas Itaparica, Centrais Elicas So Salvador and Renova PCH amouted to R$178. Loss for the period is R$18 and capital stock is R$220, composed by 219.836 quotas at a nominal value of one Brazilian real (R$1.00) each quota. The statement of investments for companies with direct interest is as follows:
Company Enerbras Centrais Eltricas S.A. Centrais Elicas Ametista LTDA Centrais Elicas dos Araas LTDA Centrais Elicas Caetit LTDA Centrais Elicas Espigo LTDA Centrais Elicas Piles LTDA (former Recncavo) Centrais Elicas So Salvador LTDA Centrais Elicas Ventos do Nordeste LTDA Centrais Elicas da Prata LTDA Centrais Eltricas Tanque LTDA Centrais Eltricas Serra do Espinhao LTDA Centrais Eltricas Serama LTDA Centrais Elicas Pelourinho LTDA (former Palmares) Centrais Eltricas Morro LTDA Centrais Eltricas Maron LTDA Centrais Eltricas Itaparica LTDA Centrais Eltricas Dourados LTDA Centrais Eltricas Botuquara LTDA Centrais Eltricas Borgo LTDA Renova PCH LTDA (former Bela Vista) Nova Renova Energia S.A. Total
Investment on 12/31/2011 106.819 210 2.371 211 210 210 212 2.033 1.773 1.878 (7) 2.118 (7) 2.118 (7) (5) (7) (6) (7) (5) 344.597 464.709
Addition to the investment (210) (2.371) (211) (210) (210) (2.033) (1.773) (1.878) 7 (2.118) 7 (2.118) 7 7 7 60.029 46.932
Net Income (loss) for the period 12.690 (4) (5) (4) (5) 8.500 21.172
The composition of investments made in subholding Nova Renova Energia S.A. that controls Renova Elica, Salvador Elica and Bahia Elica is as follows:
Company Investment on 12/31/2011 (32) (5) (46) 42.435 32.592 32.606 18.343 16.039 41 8.328 20.784 28.787 30.806 21.775 28.906 25.568 27.170 10.500 344.597 Addition to the investment 5.123 4.205 3.958 4.322 4.873 4.945 1.551 1.948 1.961 1.531 2.092 2.101 1.556 1.734 2.073 5.097 3.823 3.823 1.784 1.529 60.029 Advances for future capital increase 58 18.535 12.529 12.314 17.450 16.094 16.098 799 1.513 1.575 784 1.517 1.148 773 786 15.700 507 (1.500) 829 117.509 (427) 771 718 1.004 302 131 (646) 49 373 1.315 1.989 305 922 808 953 (58) 8.500 3 3 Net Income (loss) for the period (38) (8) 1 3 3 3 2 4 6 2 3 2 2 Investment on 09/30/2012 (12) (13) 23.659 16.737 16.275 21.775 20.969 21.047 2.356 3.463 3.539 2.317 3.611 3.249 2.332 2.523 17.773 34 46.803 37.133 37.433 20.429 17.699 224 8.377 21.157 30.102 32.795 22.080 29.828 26.376 28.123 10.442 530.635
Nova Renova Energia S.A. Renova Elica Participaes S.A. Centrais Elicas dos Araas LTDA Centrais Elicas Ventos do Nordeste LTDA Centrais Elicas da Prata LTDA Centrais Eltricas Tanque LTDA Centrais Eltricas Serama LTDA Centrais Eltricas Morro LTDA Centrais Eltricas Borgo LTDA Centrais Eltricas Dourados LTDA Centrais Eltricas Maron LTDA Centrais Eltricas Serra do Espinhao LTDA Centrais Elicas Ametista LTDA Centrais Elicas Caetit LTDA Centrais Elicas Espigo LTDA Centrais Elicas Pelourinho LTDA (former Palmares) Centrais Elicas Piles LTDA (former Recncavo) Bahia Elica Participaes S.A. Centrais Elicas Igapor S.A. Centrais Elicas Licnio de Almeida S.A. Centrais Elicas Pinda S.A. Centrais Elicas Ilhus S.A. Centrais Elicas Candiba S.A. Salvador Elica Participaes S.A. Centrais Elicas Alvorada S.A. Centrais Elicas Guanambi S.A. Centrais Elicas Guirap S.A. Centrais Elicas Rio Verde S.A. Centrais Elicas Serra do Salto S.A. Centrais Elicas N. S. Conceio S.A. Centrais Elicas Paje do Vento S.A. Centrais Elicas Planaltina S.A. Centrais Elicas Porto Seguro S.A. TOTAL
20%
(2.974)
(1.511)
14.2 Movements record movements of property, plant and equipment (Parent company)
12/31/2011 Additions Write-offs Capital Subscription SPEs Wind Farms Reclassifications between accounts Depreciation 9/30/2012
Fixed assets in service Generation Measurement towers Administration Machinery and equipment Improvements Furniture and fixtures Software Data processing equipment Vehicles Total fixed assets in service Constructions in progress Generation To pay out Studies and projects Land Advances to suppliers Total constructions in progress Total of Property, plant and equipment
2.527
3.736
925
5.338
23 6 (29) (29)
2 2 -
(1.476)
14.3
Consolidated
9/30/2012 Annual depreciation rates % Historical cost Accumulated depreciation Historical cost 12/31/2011 Accumulated depreciation Net amount Net amount
Fixed assets in service Generation Land Reservoirs, dams and ducts Buildings, civil works and improvements Machinery and equipment Furniture and fixtures Data processing equipment Measurement towers Other Connection and transmission system Buildings, civil works and improvements Machinery and equipment
595 95.797 118.031 1.223.533 119 245 7.253 10 1.668 87.196 1.534.447
(9.441) (5.935) (22.060) (48) (119) 1.915 (4) (13) (762) (40.297) (23) (125) (356) 286 (299) (1.089) (41.386)
595 86.356 112.096 1.201.473 71 126 5.338 6 1.655 86.434 1.494.150 273 2.152 1.894 1.237 800 6.356 1.500.506
595 95.807 46.110 65.009 89 232 3.516 10 211.368 55 2.156 2.139 1.006 672 6 6.034 217.402
(7.818) (5.308) (6.262) (26) (111) 988 (5) (20.518) (6) (60) (205) 108 (168) (547) (21.065)
595 87.989 40.802 58.747 63 121 2.528 5 190.850 49 2.096 1.934 898 504 6 5.487 196.337
Administration Machinery and equipment Improvements Furniture and fixtures Software Data processing equipment Vehicles T otal fixed assets in service
Constructions in progress Generation T o pay out Studies and projects Land Buildings, civil works and improvements Furniture and fixtures Measurement towers Aerogenerators Substation equipment Advances to suppliers Social projects - BNDES T otal constructions in progress T otal fixed assets
(41.386)
120.979 26.404 5.725 77.017 3 3.228 663.066 5.204 57.494 959.120 1.176.522
(21.065)
120.979 26.404 5.725 77.017 3 3.228 663.066 5.204 57.494 959.120 1.155.457
595 87.989 40.802 58.747 63 121 2.528 5 190.850 49 2.096 1.934 898 504 6 5.487 196.337
415 3.735 126.626 130.776 240 121 146 518 429 1.454 132.230
(10) (129) (12) (5) (3) (159) (23) (6) (29) (188)
(1.585) (1.698) (14.753) (7) (34) (925) (1) (13) (762) (19.778) (16) (65) (163) (179) (133) (556) (20.334)
595 86.356 112.096 1.201.473 71 126 5.338 6 1.655 86.434 1.494.150 273 2.152 1.894 1.237 800 6.356 1.500.506
120.979 26.404 5.725 77.017 3 3.228 663.066 5.204 57.494 959.120 1.155.457
94.188 1.581 2.647 84.377 16 1.476 67.795 33.456 156.552 1.946 444.034 576.264
(174.076) (23) (2.813) (161.394) (19) (2.814) (730.855) (38.660) (81.807) (1.192.461) -
(20.334)
Property, plant and equipment in use PP&E in use are divided into two groups: 1) Generation composed by the assets from small hydroelectric plant (PCH) and Wind Farms, divided into: a) Serra da Prata Hydroelectric Complex and the PCHs Cachoeira da Lixa, Colino 1 and Colino 2 b) Alto Serto I Complex Centrais Elicas Alvorada S.A., Paje do Vento S.A., Planaltina S.A., Rio Verde S.A., Nossa Senhora da Conceio S.A., Guanambi S.A., Porto Seguro S.A., Serra do Salto S.A., Igapor S.A., Licnio de Almeida S.A., Candiba S.A., Ilhus S.A., Pinda S.A., Guirap S.A.. 2) Management - Comprised of assets used in Espra's and the parent company's head office, and by equipment such as wind towers used in wind measurement tests for the development of wind projects. In November 2008, pursuant to ANEEL Normative Resolution no. 190/2005, the unitizing procedure was concluded with regard to the fixed assets commissioned at the Serra da Prata hydroelectric compound. The unitized value is composed of the amount of R$11,886 referring to interest capitalized in the construction
period in 2005 and 2006. ANEEL, through official letter 459/2001- SFF/ANEEL, authorized the offering of emergent rights, assets and facilities of the concession in guarantee of the performance of the obligations assumed by the Company in the sphere of the direct financing, transfer and issue of debentures (note 16.1 c). In July 2012, pursuant to ANEEL Normative Resolution no. 190/2005, the unitizing procedure was concluded with regard to the fixed assets commissioned at the Elico Alto Serto I. The unitized value is composed of the amount of R$56,186, for interest on loans, costs such as salaries of implementation teams and owner investments in engineering, environment and construction work insurance. The unitized value is classified in the following accounts:
Accounts Generation Buildings, civil works and improvements Machinery and equipment Connection and transmission system Buildings, civil works and improvements Machinery and equipment Overall total 1,668 87,196 1,319,087 (14) (762) (14,935) 1,654 86,434 1,304,152 Original value 71,696 1,158,527 Depreciation Residual value (662) (13,497) 71,034 1,145,030
According to articles 63 and 64 of Decree 41019/1957, the assets and facilities utilized in the generation, transmission, distribution and trade of electric power are tied to these services, and cannot be removed, divested, assigned or mortgaged without the prior and express authorization of the regulatory body. Depreciation of assets at the Serra da Prata hydroelectric complex and Wind Power Complex Alto do Serto I was calculated according to the Electricity Accounting and Public Service Manual, according to the Ordinance 815/1994, issued by DNAEE (National Department of Waters and Electric Power) and Resolutions 02/1997, 44/1999 and 474/2012 of ANEEL. On October 2, 2012, ANEEL issued a Ruling setting forth that the generating units have met the necessary requirements to be considered able to be started up.
Fixed assets in progress Property, plant and equipment in progress record expenses incurred with hydric projects divided into inventories and basic projects that have already been authorized by ANEEL, and wind projects that won the 2010 and 2011 Reserve and Auction A-3 held in 2011, and that are being built by the Company's subsidiaries. Investments made include the purchase of aerogenerators and several expenses On September 30, 2012, consolidated balance of Advances to suppliers account for R$132,239, composed as follows: advance to purchase measurements towers from IEM, at a cost of R$2,320, advance to a Substation Equipment supply agreement entered into with ABB Ltda, at R$13,500, advance to purchase wind turbines at R$113,510, from GE, advance to environment consulting services and others services, at R$2,909, referring to wind farms of auctions LER 2010 and LEN 2011. Civil construction and plants substations of LER 2009 wind farms are expected to be completed on June 29, 2012. On this date, part of Windmill caption balance was transferred from property, plant and equipment in progress to property, plant and equipment in operation. Other items will be reclassified to property, plant and equipment in operation after unitization which was concluded on July 2, 2012. On May 22, 2012, Catavento Program was launched to group sustainable projects and social-environmental development projects for Bahia State Alto Serto, location where wind farms are being implemented. This initiative is the result of the Company's commitment with projects of public interest intended to drive the region's growth, not only economic but also the sustainable development that will improve Bahia State backcountry population quality of life. The first stage of this initiative is to invest throughout 2012-2013, in the social-economic, cultural, environmental and organization development areas. Funds financed by the National Bank for Economic and Social Development (BNDES) will be invested in gradual actions that will prioritize Farm implementation and will extend to territory occupation. Over R$9 million were financed at special interest rates, as projects are related to collective interest. The Company adopts practices of quarterly reviewing its portfolio of basic projects and inventories. After reviewing its portfolio of development projects for Small Hydroelectric Power Plants in 2012, the Company decided to discontinue the Sobrado and Cachoeira inventory projects and the Nova 1 basic project, in the total amount of R$645. 15. Suppliers
Parent company 9/30/2012 Suppliers 1.680 12/31/2011 2.059 Consolidated 9/30/2012 174.067 12/31/2011 19.566
The Parents suppliers are mainly service providers and suppliers of materials for the projects under development. In the consolidated, are included mainly remaining amounts payable to suppliers of equipment and construction material for 14 wind farms which were completed in June 2012. Amounts referring to the supply of aerogenerators, substation and civil construction are substantially recorded in this account.
Parent company 12/31/2011 Charges Debt cost Local currency BNDES - CEOL Rio Verde S.A. BNDES - CEOL Porto Seguro S.A. BNDES - CEOL Serra do Salto S.A. BNDES - CEOL Planaltina S.A. BNDES - CEOL Paje do Vento S.A. BNDES - CEOL N. S. Conceio S.A. BNDES - CEOL Guirap S.A. BNDES - CEOL Guanambi S.A. BNDES - CEOL Alvorada S.A. BNDES - CEOL Candiba S.A. BNDES - CEOL Licnio de Almeida S.A. BNDES - CEOL Igapor S.A. BNDES - CEOL Pinda S.A. BNDES - CEOL Ilhus S.A. BNDES - CEOL Porto Seguro S.A. (Subcredit "D") BNDES - CEOL Serra do Salto S.A. (Subcredit "D") BNDES - CEOL Candiba S.A. Subcredit "C" BNDES - CEOL Ilhus S.A. Subcredit "C" FNE - Banco do Nordeste do Brasil S.A. - Espra Promissory notes (Banco Votorantim) - Renova Energia S.A. Subtotal loans Operation funding cost TO TAL T JLP + 1.92% p.a. T JLP + 1.92% p.a. T JLP + 1.92% p.a. T JLP + 1.92% p.a. T JLP + 1.92% p.a. T JLP + 1.92% p.a. T JLP + 1.92% p.a. T JLP + 1.92% p.a. T JLP + 1.92% p.a. T JLP + 2.18% p.a. T JLP + 2.18% p.a. T JLP + 2.18% p.a. T JLP + 2.18% p.a. T JLP + 2.18% p.a. Long T erm Interest Rate (T JLP) Long T erm Interest Rate (T JLP) Long T erm Interest Rate (T JLP) Long T erm Interest Rate (T JLP) 9.5% p.a. 100.00% CDI + 3.0% p.a. Current 1.031 1.031 1.031 Principal Current 150.000 150.000 (591) 149.409 Current 202 34 103 155 142 191 150 112 52 42 97 158 105 57 1 856 2.457 2.457 Charges NonCurrent 7.544 1.287 3.907 5.793 5.321 7.138 5.596 4.183 1.941 1.311 2.999 4.895 3.256 1.753 2 7 3 3 56.939 56.939 Current 2.166 380 1.179 1.906 1.784 2.140 1.812 1.321 575 722 1.807 2.708 2.036 959 82 103 5.535 27.215 27.215 9/30/2012 Principal
Consolidated 12/31/2011 Charges NonCurrent 80.991 14.220 44.109 71.299 66.718 80.031 67.752 49.418 21.499 22.385 56.006 83.935 63.122 29.715 1.118 1.397 600 600 103.512 858.427 (10.231) 848.196 Current 1.031 1.031 1.031 NonCurrent 2.766 419 1.351 1.796 1.654 2.384 1.862 1.367 669 19 30 59 32 22 14.430 14.430 Current 4.905 150.000 154.905 (591) 154.314 Principal NonCurrent 80.801 14.080 39.790 60.951 53.096 82.171 54.143 44.503 21.727 21.235 36.000 68.063 36.351 24.750 107.369 745.030 (5.590) 739.440
a. BNB and BNDES financing for the construction of the wind farms of LER 2009. On December 28, 2010, the Company obtained the approval of financing for its 9 wind farms and at September 28, 2011, for its 5 out of 14 wind farms contracted at the 2009 Reserve Auction of December 2009 (LER 2009) from the National Bank for Economic and Social Development (BNDES). The Paje do Vento, Planaltina, Porto Seguro, Nossa Senhora da Conceio, Guirap, Serra do Salto, Guanambi, Alvorada and Rio Verde wind farms obtained approval from the Senior Management of BNDES in a total financed volume of R$586,677. The volume represents approximately 74% of the total investments in this projects. The financing has an interest rate of 1.92% p.a. + TJLP (Long-term Interest Rate), up to two years of interest and principal grace period and 16 years of amortization term. The nine farms total 195.2 MW of installed capacity and an 84 MW on average of firm electric power contracted. On August 17, 2012, the fourth release of funds had already been made. Total financed amount for the wind farms Porto Seguro and Serra do Salto includes the D sub-loan, destined to social investments, at a total amount of R$6,400. The financing is is indexed to long-term interest rate (TJLP), up to two years of interest and principal grace period and 6 years of amortization term. BNDES - agreement n 10.2.2108.1 Signed on May 5, 2011, aimed at the deployment of Central Geradora Elica Serra do Salto from June 2011 to July 2012. The fourth payment was made on March 26, 2012, in the amount of R$6,997. Up to this date, R$46,788 of this total amount R$57,913 has been disbursed with BNDES ordinary funds, amortizable in 192 monthly installments, the first one maturing on May 15, 2013 and the last one on April 15, 2029, bearing interest of 1.92% p.a. indexed to the TJLP. The operation is guaranteed by pledge on shares, fiduciary assignment of credit and emerging rights, fiduciary assignment of assets, and bank guarantee during construction and the first year of business operation. This operation establishes that the ICSD (Debt service coverage rate) = [(division of the cash generation + closing balance of the prior year) / debt service] should be higher or equal to 1.3, and financing currently enjoys the grace period. Total contract value includes sub-credit "D", which is intended to social investments. Up to this date, R$1,500 of this total amount R$2,400 has been disbursed with BNDES ordinary funds, amortizable in 73 monthly installments, the first one maturing on May 15, 2013 and the last one on April 15, 2019, indexed to the TJLP. BNDES - agreement n 10.2.2107.1 Signed on May 5, 2011, aimed at the deployment of Central Geradora Elica Rio Verde from June 2011 to July 2012. The fourth payment was made on March 26, 2012, in the amount of R$2,356. Up to this date, R$83,157 of this total amount R$89,550 has been disbursed with BNDES ordinary funds, amortizable in 192 monthly installments, the first one maturing on May 15, 2013 and the last one on May 15, 2029, bearing interest of 1.92% p.a. indexed to the TJLP. The operation is
guaranteed by pledge on shares, fiduciary assignment of credit and emerging rights, fiduciary assignment of assets, and bank guarantee during construction and the first year of business operation. This operation establishes that the ICSD (Debt service coverage rate) = [(division of the cash generation + closing balance of the prior year) / debt service] should be higher or equal to 1.3, and financing currently enjoys the grace period. BNDES - agreement n 10.2.2106.1 Signed on May 5, 2011, aimed at the deployment of Central Geradora Elica Porto Seguro from June 2011 to July 2012. The fourth payment was made on March 26, 2012, in the amount of R$1,721. Up to this date, R$15,800 of this total amount R$19,252 has been disbursed with BNDES ordinary funds, amortizable in 192 monthly installments, the first one maturing on May 15, 2013 and the last one on April 15, 2029, bearing interest of 1.92% p.a. indexed to the TJLP. The operation is guaranteed by pledge on shares, fiduciary assignment of credit and emerging rights, fiduciary assignment of assets, and bank guarantee during construction and the first year of business operation. This operation establishes that the ICSD (Debt service coverage rate) = [(division of the cash generation + closing balance of the prior year) / debt service] should be higher or equal to 1.3, and financing currently enjoys the grace period. Total contract value includes sub-credit "D", which is intended to social investments. Up to this date, R$1,200 of this total amount R$4,000 has been disbursed with BNDES ordinary funds, amortizable in 73 monthly installments, the first one maturing on May 15, 2013 and the last one on May 15, 2019, indexed to the TJLP. BNDES - agreement n 10.2.2105.1 Signed on May 5, 2011, aimed at the deployment of Central Geradora Elica Planaltina from June 2011 to July 2012. The fourth payment was made on March 26, 2012, in the amount of R$12,254. Up to this date, R$73,205 of this total amount R$82,125 has been disbursed with BNDES ordinary funds, amortizable in 192 monthly installments, the first one maturing on May 15, 2013 and the last one on April 15, 2029, bearing interest of 1.92% p.a. indexed to the TJLP. The operation is guaranteed by pledge on shares, fiduciary assignment of credit and emerging rights, fiduciary assignment of assets, and bank guarantee during construction and the first year of business operation. This operation establishes that the ICSD (Debt service coverage rate) = [(division of the cash generation + closing balance of the prior year) / debt service] should be higher or equal to 1.3, and financing currently enjoys the grace period. BNDES - agreement n 10.2.2104.1 Signed on May 5, 2011, aimed at the deployment of Central Geradora Elica Paje do Vento from June 2011 to July 2012. The fourth payment was made on March 26, 2012, in the amount of R$15,406. Up to this date, R$68,502 of this total amount R$77,294 has been disbursed with BNDES ordinary funds, amortizable in 192 monthly installments, the first one maturing on May 15, 2013 and the last one on April 15, 2029, bearing interest of 1.92% p.a. indexed to the TJLP. The operation is guaranteed by pledge on shares, fiduciary assignment of credit and emerging rights, fiduciary assignment of assets, and bank guarantee during construction and the first year of business operation. This operation establishes that the ICSD (Debt service coverage rate) = [(division of the cash generation + closing balance of the prior year) / debt service] should be higher or equal to 1.3, and financing currently enjoys the grace period. BNDES - agreement n 10.2.2103.1 Signed on May 5, 2011, aimed at the deployment of Central Geradora Elica Nossa Senhora da Conceio from June 2011 to July 2012. The third payment was made on November 25, 2011, in the amount of R$21,391. Up to this date, R$82,171 of this total amount R$86,956 has been disbursed with BNDES ordinary funds, amortizable in 192 monthly installments, the first one maturing on May 15, 2013 and the last one on April 15, 2029, bearing interest of 1.92% p.a. indexed to the TJLP. The operation is guaranteed by pledge on shares, fiduciary assignment of credit and emerging rights, fiduciary assignment of assets, and bank guarantee during construction and the first year of business operation. This operation establishes that the ICSD (Debt service coverage rate) = [(division of the cash generation + closing balance of the prior year) / debt service] should be higher or equal to 1.3, and financing currently enjoys the grace period. BNDES - agreement n 10.2.2102.1 Signed on May 5, 2011, aimed at the deployment of Central Geradora Elica Guirap from June 2011 to July 2012. The fourth payment was made on March 26, 2012, in the
amount of R$15,422. Up to this date, R$69,654 of this total amount R$86,956 has been disbursed with BNDES ordinary funds, amortizable in 192 monthly installments, the first one maturing on May 15, 2013 and the last one on April 15, 2029, bearing interest of 1.92% p.a. indexed to the TJLP. The operation is guaranteed by pledge on shares, fiduciary assignment of credit and emerging rights, fiduciary assignment of assets, and bank guarantee during construction and the first year of business operation. This operation establishes that the ICSD (Debt service coverage rate) = [(division of the cash generation + closing balance of the prior year) / debt service] should be higher or equal to 1.3, and financing currently enjoys the grace period. BNDES - agreement n 10.2.2101.1 Signed on May 5, 2011, aimed at the deployment of Central Geradora Elica Guanambi from June 2011 to July 2012. The fourth payment was made on March 26, 2012, in the amount of R$6,237. Up to this date, R$50,739 of this total amount R$62,801 has been disbursed with BNDES ordinary funds, amortizable in 192 monthly installments, the first one maturing on May 15, 2013 and the last one on April 15, 2029, bearing interest of 1.92% p.a. indexed to the TJLP. The operation is guaranteed by pledge on shares, fiduciary assignment of credit and emerging rights, fiduciary assignment of assets, and bank guarantee during construction and the first year of business operation. This operation establishes that the ICSD (Debt service coverage rate) = [(division of the cash generation + closing balance of the prior year) / debt service] should be higher or equal to 1.3, and financing currently enjoys the grace period. BNDES - agreement n 10.2.2100.1 Signed on May 5, 2011, aimed at the deployment of Central Geradora Elica Alvorada from June 2011 to July 2012. The fourth payment was made on March26, 2012, in the amount of R$347. Up to this date, R$22,074 of this total amount R$23,829 has been disbursed with BNDES ordinary funds, amortizable in 192 monthly installments, the first one maturing on May 15, 2013 and the last one on April 15, 2029, bearing interest of 1.92% p.a. indexed to the TJLP. The operation is guaranteed by pledge on shares, fiduciary assignment of credit and emerging rights, fiduciary assignment of assets, and bank guarantee during construction and the first year of business operation. This operation establishes that the ICSD (Debt service coverage rate) = [(division of the cash generation + closing balance of the prior year) / debt service] should be higher or equal to 1.3, and financing currently enjoys the grace period. The other five plants of Renova Energia contracted according to LER 2009, Candiba, Igapor, Ilhus, Licnio de Almeida and Pinda received the approval of BNDES Executive Board for the total financed amount of R$297,380, corresponding to 70% of total expected investments for these farms. The financing has an interest rate of 2.18% p.a. + TJLP (Long-term Interest Rate), up to two years of interest and principal grace period and 16 years of amortization term. The five farms total 98.8 MW of installed capacity and an 42.5 MW on average of firm electric power contracted. On August 17, 2012, the second release of funds was made. Total financed amount for the wind farms Candiba e Ilhus includes C subcredit, destined to social investments, at a total amount of R$3,000. The financing is indexed to long-term interest rate (TJLP), up to two years of interest and principal grace period and 6 years of amortization term. BNDES - agreement n 11.2.0913.1 Signed on December 06, 2011, aimed at the deployment of Central Geradora Elica Candiba from June 2011 to July 2012. The third payment was made on August 17, 2012 in the amount of R$ 1,000. Up to this date, R$23,707 of this total amount R$27,980 has been disbursed with BNDES ordinary funds, amortizable in 192 monthly installments, the first one maturing on April 15, 2013 and the last one on March 15, 2029, bearing interest of 2.18% p.a. indexed to the TJLP. The operation is guaranteed by pledge on shares, fiduciary assignment of credit and emerging rights, fiduciary assignment of assets, and bank guarantee during construction and the first year of business operation. This operation establishes that the ICSD (Debt service coverage rate) = [(division of the cash generation + closing balance of the prior year) / debt service] should be higher or equal to 1.3, and financing currently enjoys the grace period. Total contract value includes sub-credit C", which is intended to social investments. Up to this date, R$600 of this total amount R$1,200 has been disbursed with BNDES ordinary funds, amortizable in 73 monthly installments, the first one maturing on January 15, 2014 and the last one on December 15, 2019, indexed to the TJLP.
BNDES - agreement n 11.2.0913.1 Signed on December 6, 2011, aimed at the deployment of Central Geradora Elica Ilhus from June 2011 to July 2012. The third payment was made on April 26, 2012 in the amount of R$ 1,400. Up to this date, R$31,274 of this total amount R$33,000 has been disbursed with BNDES ordinary funds, amortizable in 192 monthly installments, the first one maturing on April 15, 2013 and the last one on March 15, 2029, bearing interest of 2.18% p.a. indexed to the TJLP. The operation is guaranteed by pledge on shares, fiduciary assignment of credit and emerging rights, fiduciary assignment of assets, and bank guarantee during construction and the first year of business operation. This operation establishes that the ICSD (Debt service coverage rate) = [(division of the cash generation + closing balance of the prior year) / debt service] should be higher or equal to 1.3, and financing currently enjoys the grace period. Total contract value includes sub-credit C", which is intended to social investments. Up to this date, R$600 of this total amount R$1,800 has been disbursed with BNDES ordinary funds, amortizable in 73 monthly installments, the first one maturing on January 15, 2014 and the last one on December 15, 2019, indexed to the TJLP. BNDES - agreement n 11.2.0912.1 Signed on December 06, 2011, aimed at the deployment of Central Geradora Elica Igapor from June 2011 to July 2012. The fourth payment was made on August 17, 2012 in the amount of R$ 500. Up to this date, R$86,643 of this total amount R$90,750 has been disbursed with BNDES ordinary funds, amortizable in 192 monthly installments, the first one maturing on April 15, 2013 and the last one on March 15, 2029, bearing interest of 2.18% p.a. indexed to the TJLP. The operation is guaranteed by pledge on shares, fiduciary assignment of credit and emerging rights, fiduciary assignment of assets, and bank guarantee during construction and the first year of business operation. This operation establishes that the ICSD (Debt service coverage rate) = [(division of the cash generation + closing balance of the prior year) / debt service] should be higher or equal to 1.3, and financing currently enjoys the grace period. BNDES - agreement n 11.2.0913.1 Signed on December 6, 2011, aimed at the deployment of Central Geradora Elica Pinda from June 2011 to July 2012. The third payment was made on April 26, 2012 in the amount of R$ 18,594. Up to this date, R$65,158 of this amount R$73,150 has been disbursed with BNDES ordinary funds, amortizable in 192 monthly installments, the first one maturing on April 15, 2013 and the last one on March 15, 2029, bearing interest of 2.18% p.a. indexed to the TJLP. The operation is guaranteed by pledge on shares, fiduciary assignment of credit and emerging rights, fiduciary assignment of assets, and bank guarantee during construction and the first year of business operation. This operation establishes that the ICSD (Debt service coverage rate) = [(division of the cash generation + closing balance of the prior year) / debt service] should be higher or equal to 1.3, and financing currently enjoys the grace period. BNDES - agreement n 11.2.0910.1 Signed on December 06, 2011, aimed at the deployment of Central Geradora Elica Licnio de Almeida from June 2011 to July 2012. The fourth payment was made on August 17, 2012 in the amount of R$ 1,000. Up to this date, R$57,813 of this total amount R$72,500 has been disbursed with BNDES ordinary funds, amortizable in 192 monthly installments, the first one maturing on April 15, 2013 and the last one on March 15, 2029, bearing interest of 2.18% p.a. indexed to the TJLP. The operation is guaranteed by pledge on shares, fiduciary assignment of credit and emerging rights, fiduciary assignment of assets, and bank guarantee during construction and the first year of business operation. This operation establishes that the ICSD (Debt service coverage rate) = [(division of the cash generation + closing balance of the prior year) / debt service] should be higher or equal to 1.3, and financing currently enjoys the grace period. b. Banco do Nordeste do Brasil S.A.- Financing Contract through public deed for credit line, intermediated by Enerbras and their parent companies, entered into on June 30, 2006, for the total amount of R$120,096 with interest of 9.5% p.a. (which may be reduced to 8.08% due to the 15% performance bonus), charged on a quarterly basis on the 30th of each month from June 30, 2006 to June 30, 2008 and, from then on, on a monthly basis, on the 30th of each month. The agreement matures on June 30, 2026. The following were given as security to this loan:
bank letter equal to 50% of the sum loaned. In March 2010, Banco do Nordeste do Brasil S.A. released a guarantee in view of the registration of the construction; first-degree mortgage of the property with all the existing facilities at: (i) rural property PCH Cachoeira da Lixa, located in the municipality of Jucuruu (BA); (ii) rural property PCH Colino 1 D, E, F, located in the municipality of Vereda (BA); and (iii) Fazenda Entorno PCH - Colino 2, located in the municipality of Vereda (BA); pledge on shares, entered into pursuant to articles 1,419 and the following of the Brazilian Civil Code (Law 10406/2002) and article 39 of Law 6404/76. As an intervening party, the parent company of Enerbras pledged common shares issued by the subsidiary Espra; Pledge of Rights Arising from the Authorizing Resolutions entered into pursuant to articles 1431 and following of the Brazilian Civil Code (Law 10406/2002) and as permitted in paragraph 1, article 19, Decree 2003 dated September 10, 1996, the subsidiary Espra pledges in favor of BNB: a. The right to receive all and any sums which are or will become actually or potentially payable and outstanding to Espra by the Concession Authority, in accordance with the legal and regulatory norms and applicable to the following Authorizing Resolutions: (i) PCH Cachoeira da Lixa: Authorization Resolution No. 697, dated December 24, 2003; (ii) PCH Colino 1: Authorizing Resolution 703 dated December 24, 2003, and (iii) PCH Colino 2: Authorizing Resolution no. 695 dated December 24, 2003, subsequently amended by Resolutions no. 427, 425, and 426, all dated December 24, 2004, and by means of SCG/ANEEL Provisions no. 591 and 588 dated March 20, 2006, and no. 529 dated March 15, 2006, respectively, including but not limited to all the indemnities owing to the license's repeal or extinction; and b. all other rights, tangible or not, potential or otherwise, likely to be pledged pursuant to the applicable legal and regulatory norms and the following Authorizing Resolutions: (i) PCH Cachoeira da Lixa: Authorization Resolution No. 697, dated December 24, 2003; (ii) PCH Colino 1: Authorization Resolution No. 703, dated December 24, 2003; (iii) PCH Colino 2: Authorizing Resolution 695 dated December 24, 2003, with its amendments mentioned in item 'a' of the Electricity Purchase and Sale Agreements: CT-PROINFA/PCH-MRE n 032/2004 (PCH Cachoeira da Lixa); CT-PROINFA/PCH-MRE no. 033/2004 (PCH Colino 1) and CTPROINFA/PCH-MRE no. 034/2004 (PCH Colino 2),entered into between Espra and ELETROBRAS.
Assignment and Binding of Revenues from the agreements entered into with ELETROBRAS; reserve account liquidity fund (Note 11);
credit insurance to conclude the project, which owing to the conclusion of the works, is already cancelled. c. Commercial promissory notes Banco Votorantim (was settled on March 12, 2012) On March 18, 2011, the Company issued commercial promissory notes in the amount of R$150,000, falling due in 360 days on March 12, 2012. The remuneration is at DI Rate, plus 3% p.a. and other commissions and charges. In order to ensure the full payment and the compliance with all its contractual obligations, the Company pledged as collateral to the holders of Commercial Notes all its current and future shares, representative of the capital of its subsidiary Enerbras, and their respective rights. The holders of the respective commercial notes may only exercise this right in case the Company fails to comply with the contractual clauses.
The proceeds from this operation were used to settle the IFC loan and the remainder was used for investments in the wind farms in connection with LER 2009. On March 12, 2012, the Company settled these loans.
Balance at December 31, 2011 Loans and financing obtained Financial charges provisioned Financial charges paid Capitalized finance costs Amortization of financing Funding cost Amortization of funding cost Balance at September 30, 2012
16.3 Maturities of the long-term portion (principal and charges) The portions classified in non-current assets (Consolidated) have the following payment schedule:
Year of maturity 2013 2014 2015 2016 2017 After 2017 Total
Parent company 9/30/2012 12/31/2011 INSS payable 377 372 FGTS payable 90 75 IRRF on payroll 519 305 IRRF payable 107 44 IOF payable 31 15 ICMS payable 7 4 ISS payable 11 PIS, COFINS and CSLL 69 212 INSS withheld from third-parties 11 6 IRPJ payable 53 CSLL payable 20 TOTAL 1.295 1.033
Consolidated 9/30/2012 12/31/2011 378 376 90 75 519 305 250 192 60 88 31 61 359 183 1.839 260 74 334 1.229 230 681 158 5.510 2.262
a. Capital
As of December 31, 2011, the Company's capital was R$702,788, distributed as the shareholders' chart below:
% of total capital % 51,70% 25,85% 25,85% 48,30% 9,95% 0,67% 17,87% 2,91% 7,16% 6,49% 3,25% 100,00%
RENOVA ENERGIA Controlling Block PR Interests Light Energia Other shareholders RR Participaes* Members of the Board of Directors InfraBrasil Santander FIP Caixa Ambiental FIP Santa Barbara Other Total
ON Shares Quantity 101.123.594 50.561.797 50.561.797 43.943.355 18.892.107 450.866 11.651.467 1.896.000 4.666.666 4.228.732 2.157.517 145.066.949 % 69,70% 34,85% 34,85% 30,30% 13,02% 0,31% 8,03% 1,31% 3,22% 2,92% 1,49% 100,00%
Preferred shares Quantity 50.529.299 573.416 863.332 23.302.933 3.792.000 9.333.332 8.457.460 4.206.826 50.529.299 % 0,00% 0,00% 0,00% 100,00% 1,13% 1,71% 46,12% 7,50% 18,47% 16,74% 8,33% 100,00%
Total shares Quantity 101.123.594 50.561.797 50.561.797 94.472.654 19.465.523 1.314.198 34.954.400 5.688.000 13.999.998 12.686.192 6.364.343 195.596.248
(*) remaining RR Participaes shares that are not in the control block - RR/Light Energia
On January 26, 2012, the Company authorized capital increase in the amount of R$ 7, whereby it issued 68,670 shares in the proportion of one (1) common share and two (2) preferred shares. The Company's capital increased from R$702,788 to R$702,795. On March 01, 2012, the Company authorized capital increase in the amount of R$ 8, whereby it issued 66,000 shares in the proportion of one (1) common share and two (2) preferred shares. The Company's capital increased from R$702,795 to R$702,803.
On May 30, 2012, the Company authorized capital increase in the amount of R$ 8, whereby it issued 67,494 shares in the proportion of one (1) common share and two (2) preferred shares. The Company's capital increased from R$702,803 to R$702,811. On July 13, 2012, the Company authorized capital increase in the amount of R$ 314,700, whereby it issued 33,717,660 shares in the proportion of one (1) common share and two (2) preferred shares. The Company's capital increased from R$702,811 to R$1,017,511. The amounts were subscribed as follows: On August 2, 2012, BNDESPAR exercised its preference right and paid capital in the amount of R$250,000, corresponding to 22,673,874 common shares and 4,111,649 preferred shares. Also during the preference right period, other Companys shareholders subscribed 1,866,301 common shares and 3,731,972 preferred shares, equivalent to R$52,251. After a preemptive right period, two rounds of surplus have happened, in which on August 27, 2012, BNDESPAR subscribed and paid up 242,977 common shares and 477,690 preferred shares totaling R$ 6,726 and on September 5, 2012, 142,387 common shares and 285,696 preferred shares totaling R$3,995. Minority shareholders subscribed and paid up 37,432 common shares and 74,864 preferred shares in the first round of surplus totaling R$1,048 and 23,172 common shares and 46,344 preferred shares in the second round of surplus totaling R$649. Auction was held on September 26, and BNDESPAR subscribed and paid up 1 common share and 1 preferred share, and other shareholders subscribed and paid up 1,100 common shares and 2,200 preferred shares, totaling R$31. On October 2, 2012, the capital increase was decided and the Companys capital increased from R$702,811 to R$1,017,511. The amount exceeding the amount intended for capital increase, R$1,099.70, determined by the difference between minimum issuance price and units sales price in the Auction, was accounted for in a Capital Reserve account.
Quantity % Quantity Controlling Block 101.123.594 69,70% 0 PR Interests 50.561.797 34,85% 0 Light Energia 50.561.797 34,85% 0 Other shareholders 43.975.594 30,30% 50.699.224 RR Participaes* 18.892.107 13,02% 573,416 InfraBrasil 11.651.467 8,03% 23.302.933 Santander 1.896.000 1,31% 3.792.000 FIP Caixa Ambiental 4.666.666 3,22% 9.333.332 FIP Santa Barbara 4.228.732 2,91% 8.457.460 Other 2.640.622 1,81% 5.240.083 145.099.188 100,00% 50.699.224 Total (*) remaining RR Participaes shares that are not in the control block - RR/Light Energia
Below is presented the Companys shareholders frame after the homologation of capital increase, on October 2, 2012:
RENOVA ENERGIA Controlling Block PR Interests Light Energia Other shareholders RR Participaes* BNDESPAR" InfraBrasil Santander FIP Caixa Ambiental FIP Santa Barbara Other Total ON Shares Quantity 101.123.594 50.561.797 50.561.797 68.962.838 18.892.107 23.059.239 11.651.467 2.281.404 5.470.293 4.668.732 2.939.596 170.086.432 % 59,46% 29,73% 29,73% 40,54% 11,11% 13,56% 6,85% 1,34% 3,22% 2,74% 1,72% 100,00% Preferred shares Quantity 0 0 0 59.429.640 573,416 4,875,036 23,302,933 4,562,808 10,940,586 9,337,460 5,837,401 59.429.640 % 0,00% 0,00% 0,00% 100,00% 0,96% 8,20% 39,21% 7,68% 18,41% 15,71% 9,83% 100,00% Total shares Quantity 101.123.594 50.561.797 50.561.797 128.392.478 19.465.523 27.934.275 34.954.400 6.844.212 16.410.879 14.006.192 8.776.997 229.516.072 % of total capital % 44,06% 22,03% 22,03% 55,94% 8,48% 12,17% 15,23% 2,98% 7,15% 6,10% 3,83% 100,00%
(*) remaining RR Participaes shares that are not in the control block - RR/Light Energia
Below is presented the Companys shareholding structure after converting 13,747,814 common shares into preferred shares by BNDESPAR and 2 common shares into preferred shares by a minority shareholder, on October 15, 2012.
RENOVA ENERGIA Controlling Block PR Interests Light Energia Other shareholders RR Participaes* BNDESPAR" InfraBrasil Santander FIP Caixa Ambiental FIP Santa Barbara Other Total ON Shares Quantity 101.123.594 50.561.797 50.561.797 55.215.022 18.892.107 9.311.425 11.651.467 2.281.404 5.470.293 4.668.732 2.939.594 156.338.616 % 64,68% 32,34% 32,34% 35,32% 12,08% 5,96% 7,45% 1,46% 3,50% 2,99% 1,88% 100,00% Preferred shares Quantity 0 0 0 73.177.456 573,416 18.622.850 23.302.933 4.562.808 10.940.586 9.337.460 5.837.403 73.177.456 % 0,00% 0,00% 0,00% 100,00% 0,78% 25,45% 31,84% 6,24% 14,95% 12,76% 7,98% 100,00% Total shares Quantity 101.123.594 50.561.797 50.561.797 128.392.478 19.465.523 27.934.275 34.954.400 6.844.212 16.410.879 14.006.192 8.776.997 229.516.072 % of total capital % 44,06% 22,03% 22,03% 55,94% 8,48% 12,17% 15,23% 2,98% 7,15% 6,10% 3,82% 100,00%
(*) remaining RR Participaes shares that are not in the control block - RR/Light Energia
The Company records all costs of share issuance transactions in a specific line. These amounts refer to expenses with financial consulting and advisors, of IPO operations occurred on July 13, 2010, capital increase through a new investor Light Energia occurred on September 16, 2011 and expenses at R$1,871 with capital increase through new investor BNDESPAR occurred on September 2012.
c. Dividends
As of December 31, 2011, subsidiary Enerbras S.A. approved in the Annual General Meeting the proposal for the distribution of dividends to the Company in the amount of R$11,921, deriving from income earned in 2011, after the recognition of the legal reserve. This amount is recorded under caption Dividends receivable in the Current Assets group of the Parent company with a perspective of receipt up to December 31, 2012.
MWh 9/30/2012 9/30/2011 Supply of electric power - PCHs Supply of electric power - Wind farms (-) Deductions from revenue COFINS PIS 168.324 278.130 446.454 168.324 168.324
R$ 9/30/2012 30.933 46.903 (2.841) (2.335) (506) 74.995 9/30/2011 28.088 (1.025) (843) (182) 27.063
Parent company 9/30/2012 Operating expenses General and Total administrative 5.656 8.041 764 2.041 551 645 112 1.059 519 1.273 20.661 5.656 8.041 764 2.041 1.476 645 112 1.059 519 1.273 21.586
9/30/2011
Reclassified
Operation Personnel, Management Outsourced services Rental and leases Traveling Depreciation Discontinued projects Insurance Telephony and IT Store and supplies Others Total 925 925
Total 4.490 4.271 905 756 875 111 609 251 599 12.867
Consolidated 9/30/2012 Operating expenses General and Total administrative 5.656 9.935 764 2.123 556 645 112 1.114 557 1.839 23.301 23.301 2.993 66 3.059 5.656 12.511 3.302 2.123 20.334 645 1.021 1.114 557 2.250 49.513 52.572 9/30/2011 Reclassified Total 800 61 861 4.490 7.550 1.822 816 5.130 512 616 256 1.199 22.391 23.252
Operation Tusd - Distribution system use charge Inspection fee 2.993 66 3.059 2.576 2.538 19.778 909 411 26.212 29.271
Personnel, Management Outsourced services Rental and leases Traveling Depreciation Discontinued projects Insurance Telephony and IT Store and supplies Others Total
Calculation basis - deemed IRPJ and CSLL Rate - deemed profit IRPJ and CSLL Adjustments to reflect effective rate Other income Adjusted calculation basis for IRPJ and CSLL Effective rate IRPJ and CSLL Calculation Discount in excess of R$240 p.a. IRPJ and CSLL expenses
Consolidated Income tax Social contribution 9/30/2012 9/30/2011 9/30/2012 9/30/2011 77.836 28.088 77.836 28.088 8% 8% 12% 12% (6.227) (2.247) (9.340) (3.371)
The Company adopts the taxable income calculation regime, having determined the total accumulated in the amount of R$9,403 on September 30, 2012. Tax presented in the consolidated position refers to subsidiaries Espra (deemed income system) and 14 wind farms (deemed income system) on financial revenues of some of the associates that, although using deemed income system, should calculate revenues from financial operations using the taxable income rule. The income and social contribution taxes are calculated based on the rates of 15% plus a surcharge of 10% on taxable income in excess of R$ 240 for income tax and 9% on taxable income for social contribution on net income, and take into account tax loss carryforward and negative basis of social contribution, limited to 30% of taxable income. Income and social contribution taxes under the deemed profit system are paid quarterly on the gross revenue, considering the percentage presumption, based on the rates defined in current legislation. (Basis of estimate of 8% and 12% on sales, income and social contribution taxes, respectively, plus the calculation amount of other financial income). 23. Financial instruments Sundry considerations The Company and its subsidiaries maintain operations with financial instruments. The management of these instruments is done through operating strategy and internal controls, aimed at assuring liquidity, security and profitability. The results obtained from such operations are in conformity with the policies adopted by Company's management. The management of the risks associated to these operations is conducted by applying practices established by Management and includes the monitoring of levels of exposure to each market risk, and estimates of future cash flows. Those practices establish a requirement of updating of the information in operating systems, plus exchanging information and performing the transaction with the counterparties. a. Fair value of financial instruments
Fair value is the amount for which an asset could be exchanged, or a liability settled, between parties with knowledge of the deal and interest in performing it, in a transaction where none of the parties is favored. The concept of fair value deals with innumerous variations of metrics used for the purpose of reliably measuring an amount. To calculate the fair value we project the cash flows from the financial instruments up to the end of the operations by following the contractual rules and use as a discount rate the future interbank deposit rate disclosed by BM&F Bovespa. Some of the headings show a book balance equivalent to fair value. This situation occurs because the financial instruments' features are similar to those of instruments traded in the market. The use of different market methodologies may have a material effect on the estimated realizable value. Transactions with financial instruments are stated in the balance sheet at book value, which is equivalent to their fair value under the headings of cash and cash equivalents, trade accounts receivable, related parties, judicial deposits, and trade accounts payable. For loans, financing and debt charges, book balances differ from fair value.
Fair value Financial assets Current Cash and cash equivalents Advances to suppliers Pledges and restricted deposits Non-current Pledges and restricted deposits Related parties Financial liabilities Current Suppliers Loans and financing Non-current Related parties 1.680 12.443 2.059 151.031 12.087 1.680 12.443 2.059 150.440 12.087 Parent company Book value 09/30/2012 12/31/2011 230.888 3.649 40 451 24.949 254.459 4.701 40 449 25.473
09/30/2012 12/31/2011 230.888 3.649 40 451 24.949 254.459 4.701 40 449 25.473
Financial assets Current Cash and cash equivalents T rade accounts receivable Advances to suppliers Pledges and restricted deposits Non-current Pledges and restricted deposits Related parties Financial liabilities Current Suppliers Loans and financing Non-current Loans and financing
Consolidated Fair value Book value 09/30/2012 12/31/2011 09/30/2012 12/31/2011 299.513 52.421 5.435 40 12.615 389.846 5.152 13.479 40 11.875 244 299.513 52.421 5.435 40 12.615 389.846 5.152 13.479 40 11.875 244
Loans and financing in domestic currency by BNB are stated as financial liabilities and are recorded at their amortized cost, and refer to loans with the specific purpose of funding investments in electricity generation, indexed to pre-fixed rates.
Parent company 09/30/2012 Fair value through profit or loss 230.888 Fair value through profit or loss 254.459 12/31/2011
Financial assets Current Cash and cash equivalents Pledges and restricted deposits Non-current Pledges and restricted deposits Related parties Financial liabilities Current Suppliers Loans and financing Non-current Related parties
Held to maturity
Total 230.888 40
Held to maturity
Total 254.459 40
40
40
24.949
451 -
451 24.949
25.473
449 -
449 25.473
1.680 -
1.680 -
2.059 150.440
2.059 150.440
12.443
12.443
12.087
12.087
Consolidated 09/30/2012 Fair value through profit or loss 52.421 299.513 Fair value through profit or loss 5.152 389.846 12/31/2011
Financial assets Current Cash and cash equivalents T rade accounts receivable Pledges and restricted deposits Non-current Pledges and restricted deposits Related parties Financial liabilities Current Suppliers Loans and financing Non-current Loans and financing
Held to maturity
Held to maturity
40
40
12.615 -
12.615 -
244
11.875 -
11.875 244
174.067 29.672
174.067 29.672
19.566 155.345
19.566 155.345
905.135
905.135
753.870
753.870
b. Market risk
The market risk refers to the possibility of monetary loss arising from fluctuations of variables that have impact on prices and rates negotiated in the market. Said fluctuations impact on virtually all sectors and, therefore, are financial risk factors. The loans and financing taken by the Company and its subsidiaries shown in Note 16 are from BNB and BNDES. Contract rules for financial liabilities create risks related to these exposures. On September 30, 2012, the Company and its subsidiaries have a market risk associated to interbank deposit rate, long-term interest rate and the general market price index. To determine market risks associated to interest rates we considered the general market price index, the interbank deposit rate, and the long-term interest rate and extended consumer price index but took into account that the Brazilian economy has a favorable outlook for solid growth and investments in infrastructure, as exemplified by governmental programs such as the Growth Acceleration Program. A controlled inflation and a credit supply are important factors to obtain low-risk funding.
c. Sensitivity analysis (Consolidated) The direct and indirect subsidiaries have investments and loans and financings in domestic currency. The following table considers rate scenarios with the respective effect on the Company's income figures, with the applicable exposures of interest rate fluctuations and other indexes, to these transactions' maturity dates. The likely scenario was established based on the Company's business plan as approved by Management, with balances outstanding on September 30, 2012. Scenarios II and III represent, respectively, 25% and 50% of increase in the risk, and IV and V scenarios represent, respectively, 25% and 50% of deterioration or reduction, as follows:
Financial assets Interest earning bank deposits Reference for financial assets CDI - Year Risk CDI Rate increase in Probable (I) Scenario II Scenario III Scenario IV Scenario V 297.678 299.162 300.650 296.185 294.697 25% 50% -25% -50%
Financial liabilities Risk Probable (I) Scenario II Scenario III Scenario IV Scenario V BNDES Contracts Long Term Interest Rate (TJLP) 835.135 849.770 864.405 820.500 805.865 Reference for financial liabilities Rate increase in 25% 50% -25% -50% CDI - Year and TJLP (Long-term interest rate) - Year
This sensitivity analysis was prepared according to CVM Instruction no. 475/2008, with the purpose of measuring the impact of changes in market variables on each of the Company's financial instruments. However, settling the transactions involving such estimates may result in sums different from those estimated, owing to the subjectivity contained in the procedure used to prepare these analyses. d. Liquidity risk The liquidity risk shows the subsidiary's and parent companys ability to settle assumed obligations. To settle assumed obligations and determine the subsidiary's financial capacity to adequately meet its commitments, loan maturities, and other obligations included in the disclosures. More detailed information on loans taken by the Company is shown in Note 16. The Company's management only makes use of credit facilities that allow its operating leverage. This assumption is confirmed by observing the characteristics of the loans taken. The flow of realization for the liabilities assumed under their contractual conditions is presented in the table below.
Total Financial instruments at interest rate Prefixed Loans, financing and debt charges 1.572.799
From 1 to 3 months
Above 5 years
5.025
63.867
508.587
995.320
Total Contractual obligations Prefixed Loans, financing and debt charges 1.530.457
From 1 to 3 months
Above 5 years
158.649
950.064
e. Credit risk Credit risk includes the possibility that the Company may fail to realize its rights. This description is directly related to headings such as cash and cash equivalents, trade accounts receivable, pledges and restricted deposits, and others.
Fair value Parent company Consolidated 09/30/2012 12/31/2011 09/30/2012 12/31/2011 230.888 40 254.459 40 299.513 52.421 40 389.846 5.152 40
Financial assets Current Cash and cash equivalents Trade accounts receivable Pledges and restricted deposits Non-current Pledges and restricted deposits
Note 6 7 11
11
451
449
12.615
11.875
In the electric power sector information on operations are submitted to the regulatory agency, which maintains active data on electric power produced and consumed, and this structure results in plans for the independent and uninterrupted operation of the electric system. Electric power sales arise from auctions and agreements with other companies. This mechanism brings reliability and controls default among participants of the industry. Another credit risk source is that associated to financial investments. The management of these financial assets is done through operating strategies and internal controls, aimed at assuring liquidity, security and profitability. The Company does not make investments for speculative purpose. The Company manages its risks continuously, assessing whether the practices adopted in the execution of its activities are in line with the policies advocated by management. The Company does not make use of equity hedging financial instruments, as it believes that the risks to which its assets and liabilities are ordinarily exposed compensate each other in the natural course of its activities. The management of these financial instruments is done through operating strategies, aimed at liquidity, profitability and security. The control policy consists of permanent follow-up of the conditions engaged versus those in force in the market. The Company does not make any speculative investments in derivatives or any other risk assets. Regarding financial assets from financial investments, the Company only conducts transactions with financial institutions classified as low risk by rating agencies in order to ensure a higher profitability while aggregating security to the results. Management's understanding is that its contracted financial investment transactions do not expose the Company to significant risks that might, in the future, generate material losses.
f.
There were no transactions with derivative financial instruments during the fiscal years in question.
g. Capital management
Consolidated 9/30/2012 12/31/2011 Financing and loan debt (-) Cash and cash equivalents Net debt Shareholders' equity Capital Financial leverage index - % 934.807 299.513 635.294 972.083 981.399 65% 909.215 389.846 519.369 646.874 668.547 78%
The Company's objectives in managing its capital are to safeguard its business continuity capacity to offer return to shareholders and benefits to the other stakeholders besides maintaining an optimal capital structure to reduce this cost. In order to keep or adjust the capital structure, the Company may review the dividend payment policy, refund capital to the shareholders or, also, issue new shares or sell assets to reduce, for instance, the indebtedness level. 24. Insurance coverage The indirect subsidiary Espra maintains insurance contracts with coverage determined in accordance with the orientation of specialists, considering the nature and the degree of risk, in amounts considered sufficient to cover possible significant losses on its assets and responsibilities. The risk assumptions, due to their nature, are out of the scope of the review of interim financial information, and therefore, were not examined by our independent auditors.
The chart below presents the main values at risk with insurance coverage: Generation, construction and transmission risks:
Subject of the Guarantee Surety bond guaranteeing the faithful performance of the obligations of implementation of the 14 Wind Electric Power Generation Centers of LER 2009. Surety bond guaranteeing the faithful performance of the obligations of implementation of the 06 Wind Energy Generation Centers of LER 2010. ICG Surety - LEN 2011 Registration Project Guarantee - Basic Amount insured Maturity Beginning End National Agency of 10/1/2012 Electrical Electric Energy Insured
R$ 53.910
3/29/2010
R$ 29.470
12/6/2012
National Agency of 12/1/2013 Electrical Electric Energy National Agency of 4/3/2013 Electrical Electric Energy National Agency of 8/15/2013 Electrical Electric Energy National Agency of 11/1/2013 Electrical Electric Energy National Agency of 6/1/2014 Electrical Electric Energy 9/25/2013 ESPRA 9/25/2013 ESPRA 6/28/2013 Renova Energia 6/30/2013 Renova Energia 9/8/2013 ESPRA
R$ 5.560
8/10/2012
R$ 1.770
7/15/2011
Registration Guarantee - PB PCH A Surety bond guaranteeing the faithful performance of implementation of the 09 wind farms - LEN 2011 Operational risks Civil Liability Civil liability Operational LER 2009 Operational risks LER 2009 Surety Contractual obligations
R$ 225
11/1/2011
Relevant contracts
a) Purchase and Sale Contracts for Energy Generation Equipment and Related Services for Wind Farms under Implementation LER 2009 wind farms On May 7, 2010, Purchase and Sale Contracts for Electric Energy Generation Equipment and Rendering of Related Services ("Contracts for the Acquisition of Aerogenerators") were entered into with General Electric do Brasil - Equipamentos e Servios de Energia Ltda. ("General Electric"). Such contracts regulate the principles and general rules for the supply of 180 wind turbines of 1.5MW each and the related transportation services and commissions for Wind farms under Implementation. Pursuant to the terms of said contracts, equipment was delivered and contracts are in final stage. Added value of Contracts for the Acquisition of Aerogenerators is R$854,655, to be paid in installments whose maturities are bound to the performance of some obligations by General Electric, as well as to the occurrence of some specific events, as established in said contracts. On August 26, 2010, we entered into a Memorandum of Understanding with General Electric International, Inc. and General Electric do Brasil - Equipamentos e Servios de Energia Ltda. ("General Electric") to include 4 equipments, in the contract executed. It was also agreed that equipment would be changed to model 1.6 XLE.
b) Contracts for the Rendering of Engineering and Civil Construction Services under the Partial Price contract basis at global price On December 27, 2010, SPEs Centrais Elicas Alvorada S.A. ("Alvorada"), Centrais Elicas Candiba S.A. ("Candiba"), Centrais Elicas Guanambi S.A. ("Guanambi"), Centrais Elicas Guirap S.A. ("Guirap"), Centrais Elicas Igapor S.A. ("Igapor"), Centrais Elicas Ilhus S.A. ("Ilhus"), Centrais Elicas Licnio de Almeida S.A. ("Licnio de Almeida"), Centrais Elicas Nossa Senhora Conceio S.A. ("Nossa Senhora Conceio"), Centrais Elicas Paje do Vento S.A. ("Paje do Vento"), Centrais Elicas Pinda S.A. ("Pinda"), Centrais Elicas Planaltina S.A. ("Planaltina"), Centrais Elicas Porto Seguro S.A. ("Porto Seguro"), Centrais Elicas Rio Verde S.A. ("Rio Verde") and Centrais Elicas Serra do Salto S.A. ("Serra do Salto") entered into Contracts for the Rendering of Engineering and Civil Construction Services under the Partial Contract basis at global price with Construtora Queiroz Galvo S.A. ("Queiroz Galvo") and Mercurius Engenharia S.A. ("MESA"). These contracts discipline general principles and rules for all services, supply and other activities necessary to conduct civil construction work, including bases and accesses to implement wind farms that won bid LER 2009. The added value of contracts is R$167,623, to be paid in installments whose maturities are bound to the performance of some obligations by Queiroz Galvo and MESA, as well as to the occurrence of some specific events, as established in said contracts. In addition to making payments according to contracts, SPEs main obligations include obtaining environmental licenses that are necessary to perform services, on a timely basis. On September 30, 2012, pursuant to the terms of said contracts, all services were provided and contracts are in the final stage.
c) Contracts for the Supply of Equipment and Rendering of Services for the Integrated Installation of Electric Power Distribution and Transmission Systems, Engineering and Civil Construction under the Partial Contract basis at global price. On December 27, 2010, SPEs Alvorada, Candiba, Guanambi, Guirap, Igapor, Ilhus, Licnio de Almeida,
Nossa Senhora Conceio, Paje do Vento, Pinda, Planaltina, Porto Seguro, Rio Verde and Serra do Salto entered into Contracts for the Supply of Equipment and Rendering of Services for the Integrated Installation of Electric Power Distribution and Transmission Systems, Engineering and Civil Construction under the Partial Contract basis at global price with ABB LTDA ("ABB"). These contracts discipline general principles and rules for all services, including the supply of internal distribution networks, unit substations, boosting substations, transmission and distribution lines, connection with ICG and other installations of wind farms that won bid LER 2009. The added value of the contracts is R$85,089, to be paid in installments whose maturities are bound to the performance of some obligations by ABB, as well as to the occurrence of some specific events, as established in said contracts. Equipment and services were delivered and contracts are in the final stage.
d) Contract for the Operation and Maintenance of Aerogenerators On April 06, 2011, SPEs Alvorada, Candiba, Guanambi, Guirap, Igapor, Ilhus, Licnio de Almeida, Nossa Senhora Conceio, Paje do Vento, Pinda, Planaltina, Porto Seguro, Rio Verde and Serra do Salto entered into Contracts for the Operation and Maintenance of Aerogenerators with General Eletric Energy do Brasil - Equipamentos e Servios de Energia LTDA and General Eletric International, INC. ("General Electric"). Such contracts regulate the principles and general rules for the supply of operation and maintenance of 184 wind turbines, model 1.6 XLE, of 1.6MW each. Pursuant to the terms of said contracts, General Eletric will provide operation and maintenance services over 10 years from the final delivery of the last aerogenerator or 12 years from the date that the contract was signed. The added value of the contracts is R$103,040, to be paid in installments whose maturities are bound to the performance of some obligations by General Eletric. e) Contract for the Rendering of Operation and Maintenance Services on the Transmission System of Restricted Use On April 06, 2011, SPEs Alvorada, Candiba, Guanambi, Guirap, Igapor, Ilhus, Licnio de Almeida, Nossa Senhora Conceio, Paje do Vento, Pinda, Planaltina, Porto Seguro, Rio Verde and Serra do Salto entered into Contracts for the Rendering of Operation and Maintenance Services on the Transmission System of Restricted Use with Enex O&M de Sistemas Eltricos LTDA. ("ENEX"). These contracts discipline general principles and rules for the rendering of operation and maintenance services on transmission systems of restricted use. Pursuant to the terms of said contracts, ENEX should provide operation and maintenance services over 120 months, counted as of the start of the commercial operation of the first aerogenerator. The added value of the contracts is R$22,046, to be paid beginning as of the 96th month after the start of SPEs commercial operation period, in installments whose maturities are bound to the performance of some obligations by ENEX.
26. Subsequent events ANEEL Ruling for 14 wind farms Alto do Serto I - LER 2009 Wind Centrals Alvorada, Candiba, Guanambi, Guirap, Igapor, Ilhus, Licnio de Almeida, Nossa Senhora da Conceio, Paje do Vento, Pinda, Planaltina, Porto Seguro, Rio Verde and Serra do Salto form Latin Americas largest wind energy complex, called Alto Serto I. 14 wind farms have an installed capacity of 294.4MW and sold energy of 127MW. On October 2, 2012, ANEEL issued Rulings considering the farms above mentioned as able to be started up (Note 14.4). While the Rulings were issued, CCEE is authorized to make payments to the Company under the terms of the agreements of reserved energy, entered into on
October 26 and December 6, 2010 between CCEE and Special Purposes Entities (SPEs) established as Energy Producers by the Energy Ministry (MME). BNDESPAR Auction of surplus shares and homologation of Capital Increase On October 2, 2012, the capital increase was decided and the Companys capital increased from R$702,811 to R$1,017,511. The amount exceeding to the one destined to Capital Increase, at a total of one thousand, ninety-nine Reais and seventy cents (R$1,099.70, ascertained by the difference between the minimum price of issue and sale price of the units at Auction, was accounted in the Capital Reserve. As described in note 18. After the homologation of the shares held on October 2, 2012, Renovas capital stock is as follows:
RENOVA ENERGIA Aes ON Aes PN % 0,00% 0,00% 0,00% 100,00% 0,96% 8,20% 39,21% 7,68% 18,41% 15,71% 9,83% 100,00% Total de Aes Quantidade 101.123.594 50.561.797 50.561.797 128.392.478 19.465.523 27.934.275 34.954.400 6.844.212 16.410.879 14.006.192 8.776.997 229.516.072 % do Capital Social Total % 44,06% 22,03% 22,03% 55,94% 8,48% 12,17% 15,23% 2,98% 7,15% 6,10% 3,83% 100,00%
Quantidade % Quantidade Bloco de Controle 101.123.594 59,46% 0 RR Participaes 50.561.797 29,73% 0 Light Energia 50.561.797 29,73% 0 Outros Acionistas 68.962.838 40,54% 59.429.640 RR Participaes* 18.892.107 11,11% 573.416 BNDESPAR 23.059.239 13,56% 4.875.036 InfraBrasil 11.651.467 6,85% 23.302.933 Santander 2.281.404 1,34% 4.562.808 FIP Caixa Ambiental 5.470.293 3,22% 10.940.586 FIP Santa Barbara 4.668.732 2,74% 9.337.460 Outros 2.939.596 1,72% 5.837.401 Total 170.086.432 100,00% 59.429.640 (*) remaining RR Participaes shares that are not in the control block - RR/Light Energia
Below is presented the Companys shareholding structure after converting 13,747,814 common shares into preferred shares by BNDESPAR and 2 common shares into preferred shares by a minority shareholder, on October 15, 2012.
RENOVA ENERGIA ON Shares Preferred shares % 0,00% 0,00% 0,00% 100,00% 0,78% 25,45% 31,84% 6,24% 14,95% 12,76% 7,98% 100,00% Total shares Quantity 101.123.594 50.561.797 50.561.797 128.392.478 19.465.523 27.934.275 34.954.400 6.844.212 16.410.879 14.006.192 8.776.997 229.516.072 % of total capital % 44,06% 22,03% 22,03% 55,94% 8,48% 12,17% 15,23% 2,98% 7,15% 6,10% 3,82% 100,00%
Quantity % Quantity Controlling Block 101.123.594 64,68% 0 PR Interests 50.561.797 32,34% 0 50.561.797 32,34% 0 Light Energia 55.215.022 35,32% 73.177.456 Other shareholders RR Participaes* 18.892.107 12,08% 573,416 BNDESPAR" 9.311.425 5,96% 18.622.850 InfraBrasil 11.651.467 7,45% 23.302.933 Santander 2.281.404 1,46% 4.562.808 FIP Caixa Ambiental 5.470.293 3,50% 10.940.586 FIP Santa Barbara 4.668.732 2,99% 9.337.460 2.939.594 1,88% 5.837.403 Other 156.338.616 100,00% 73.177.456 Total (*) remaining RR Participaes shares that are not in the control block - RR/Light Energia
Issuance of non-convertible DEBENTURES into shares On October 11, 2012 the 2nd issuance of simple, non-convertible, unsecured debentures with real guarantee, in nine series, for public distribution with restricted placement efforts, under firm guarantee by the Company was settled, in the total amount of R$300,000 and total term of 10 years, maturing on September 17, 2022. Leading manager of the offering was BB Banco de Investimento S.A. Debentures are remunerated at an interest rate of 123.45% of daily rates of DI. The Company can redeem these debentures at any moment at its discretion as of September 17, 2014. Funds raised through this issue will be allocated to reinforce the Companys cash and/or invest in the projects of LER 2010 and/or A-3 2011. Debentures were issued pursuant to CVM Rule 476, based on the resolution at the Companys Board Meeting held on August 15, 2012 (RCA) and Special General Meeting of the Issuer, held on August 31, 2012 (AGE), pursuant to Article 59 of Corporate Law and the Companys Bylaws.
* Pedro V.B. Pileggi Investor Relations Officer with Investors and New Bbusiness Luiz Eduardo Bittencourt Freitas Chief Legal and Regulatory Officer
Pedro V.B. Pileggi Financial, Controllership, Planning and Administrative Officer* Carlos Mathias Aloysius Becker Neto Engineering and Construction Director and Operations Director*
II
Deloitte Touche Tohmatsu Auditores Independentes Avenida Tancredo Neves 450 Edf. Suarez Trade 29 andar 41.820-020 Salvador - BA Tel: + 55 (71) 2103-9400
REPORT ON THE REVIEW OF QUARTERLY INFORMATION To the Shareholders, Board Members and Management of Consolidated Balance Sheet So Paulo - SP Introduction
We have reviewed the interim, individual and consolidated financial information of Renova Energia S.A. (Company), identified as parent company and consolidated, respectively, contained in the Quarterly Information - ITR Form - , for the quarter ended September 30, 2012, which comprise the balance sheet as of September 30, 2012 and the related statements of income for the three and nine-month period then ended of changes in shareholders' equity and of cash flows for the 9-month period then ended, including the summary of the main accounting policies and other explanatory notes. The Company's Management is responsible for the preparation of the individual interim accounting information in accordance with Technical Pronouncement CPC 21(RI) - Interim Statement and of the consolidated interim accounting information in accordance with CPC 21 (R1) and with international standard IAS 34 - Interim Financial Reporting, issued by the International Accounting Standards Board - IASB, as well as for the presentation of this information in a manner consistent with the standards issued by the Securities Commission - CVM, applicable to the preparation of the Quarterly Information - ITR. Our responsibility is to express a conclusion on this interim financial information based on our review. Scope of review We conducted our review in accordance with the Brazilian and international review standards for interim information (NBC TR 2410 - Review of Interim Financial Information Performed by the Independent Auditor of the Entity and ISRE 2410 - Review of Interim Financial Information Performed by the Independent Auditor of the Entity, respectively). A review of interim information consists in asking questions, chiefly to the persons in charge of financial and accounting affairs, and in applying analytical procedures and other review procedures. The scope of a review is significantly lower than that of an audit held in accordance with auditing rules, and as a result we were unable to ascertain whether we became aware of all the significant matters likely to be detected in an audit. Accordingly, we do not express an audit opinion. Conclusion on the individual interim accounting information Based on our review, we are not aware of any facts that would lead us to believe that the individual interim financial information included in the quarterly information previously referred to above was not prepared, in all material respects, in accordance with CPC 21 (R1) applicable to the preparation of Quarterly Information - ITR, and presented in a manner consistent with the standards issued by the CVM.
Deloitte refers to Deloitte Touche Tohmatsu Limited, a UK private company and its network of member firms, each of which is a legally separate and independent entity. See www.deloitte.com/about for a detailed description of the legal structure of Deloitte Tou che Tohmatsu and its member firms. Deloitte Touche Tohmatsu. All rights reserved.
Conclusion on the consolidated interim financial information Based on our review, we are not aware of any facts that would lead us to believe that the consolidated interim financial information included in the quarterly information previously referred to above was not prepared, in all material respects, in accordance with CPC 21 (R1) and IAS 34 applicable to the preparation of Quarterly Information - ITR, and presented in a manner consistent with the standards issued by the Securities Commission - CVM. Other matters Statements of added value We also reviewed the individual and consolidated value-added statements for the nine-month period ended on September 30, 2012, prepared by the Company's management, whose presentation in the interim information is required according to the standards issued by the CVM - Securities and Exchange Commission, applicable to the preparation of Quarterly Information - ITR and considered supplementary information by the international standards for financial report - IFRS, which do not require the presentation of the SVA. These statements were subjected to the review procedures previously described and, based on our review, we are not aware of any other event that make us believe that those were not prepared, in all material respects, in accordance with the individual and consolidated interim accounting information taken as a whole. Review of individual and consolidated interim accounting information for the quarter ended September 30, 2011 and audit of individual and consolidated accounting information for the year ended December 31, 2011. The information and the amounts corresponding to the three and nine-month periods ended September 30, 2011, presented for comparative purposes, were previously reviewed by other independent auditors, who issued a report dated October 21, 2011, which did not contain any modification. The information and amounts corresponding to the year ended December 31, 2011 presented for comparison purposes were previously audited by other independent auditors that issued a report dated March 1, 2012, which has not been changed. So Paulo, November 8, 2012
Consolidated Balance Sheet Notes to the financial statements September 30, 2012 and 2011
(In thousands of Reais, unless otherwise indicated)
Consolidated Balance Sheet Notes to the financial statements September 30, 2012 and 2011
(In thousands of Reais, unless otherwise indicated)
INVESTOR RELATIONS
Pedro Pileggi IR and Business Development Director Daniel Famano IR and Corporate Finance Superintendent Michelle Dorea IR Manager Fernanda Kitamura IR Analyst Renata Carvalho Controller
PUBLIC RELATIONS
Ins Castelo - ines@tree.inf.br + 55 (11) 3093-3600
Renova Energia S.A. (RNEW11) is an alternative energy generation company with its focus on wind farms and small hydroelectric plants (SHPs). Renova is currently the only dedicated alternative energy company in Brazil to have its shares listed on the BM&FBovespa. The Company undertakes sourcing, development and implementation of alternative energy projects. In its 11 years of operations, Renova has invested in the formation of a highly trained, multidisciplinary team, made up of professionals with experience in the electricity sector. Renova has commercialized 681 MW of installed (1) capacity in the regulated market and 400 MW in the free market, becoming the lead company in the amount of contracted wind energy in Brazil. Subject to technical and regulatory approval by ANEEL.
Consolidated Balance Sheet Notes to the financial statements September 30, 2012 and 2011
(In thousands of Reais, unless otherwise indicated)
Consolidated Balance Sheet Notes to the financial statements September 30, 2012 and 2011
(In thousands of Reais, unless otherwise indicated)
1. HIGHLIGHTS IN DETAIL:
1.1. LER 2009: Receipt of the certification by ANEEL acknowledging that the 14 wind farms that sold energy in the 2009 reserve auction are fully prepared to start operations.
On October 2, 2012, ANEEL (National Electric Energy Agency) published in the Dirio Oficial da Unio, acknowledgment of the fact that the companys 14 wind farms that sold energy in the second 2009 reserve energy auction are fully prepared to start operations. Upon receipt of the acknowledgment, the CCEE (Electric Energy Commercialization Chamber) is authorized to disburse the amount due to the Company under the terms of the reserve energy contracts, celebrated between October 26 and December 6, 2010 between CCEE and the Special Purpose Vehicles established as Independent Electric Energy Producers. Below is a table with the recognition dates published by ANEEL:
LER 2009 Wind Farms Alvorada Candiba Guanambi Guirap Igapor Ilhus Licnio de Almeida Nossa Sra. da Conceio Paje do Vento Pinda Planaltina Porto Seguro Rio Verde Serra do Salto Recognition Date (*) 07/01/2012 07/27/2012 07/27/2012 08/29/2012 07/27/2012 07/27/2012 07/27/2012 07/27/2012 07/01/2012 08/29/2012 07/01/2012 07/27/2012 07/01/2012 07/27/2012 Installed Capacity (MW) 8.0 9.6 20.8 28.8 30.4 11.2 24.0 28.8 25.6 24.0 27.2 6.4 30.4 19.2
294.4 Source: ANEEL certifications published on October 2, 2012 in the Dirio Oficial da Unio. (*) Date on which ANEEL considered the assembly and delivery of the wind farms to have been concluded by the Company 5
Consolidated Balance Sheet Notes to the financial statements September 30, 2012 and 2011
(In thousands of Reais, unless otherwise indicated)
The Company informs that it is in contact with ANEEL to better understand the criteria used to determine the date of recognition of the wind farm operations since the Company believes that all wind farms were fully prepared to start operations on schedule, as per contract date, July 1st 2012.
1.2. LER 2009: startup of Alto Serto I, the largest wind energy complex in Latin America with fourteen wind farms, with a total installed capacity of 294.4 MW and R$1.2 billion in investments in the countryside of Bahia.
On June 28 2012, the Company completed the assembly and installation of all 184 wind turbines and substations, part of the fourteen wind farms contracted in the LER 2009 auction, which constitutes the first phase of Alto Serto I the largest wind complex in Latin America. The wind farms are located in the interior of the state of Bahia and represent 294.4 MW of installed capacity. For the execution of the project Renova partnered with the most experienced suppliers and service providers, with a known track record. The wind turbines are the 1.6 XLE model, manufactured by GE with a 1.6 MW capacity, a tower height of 80 meters and rotor blades of 82.5 meters in diameter. The civil works were executed by Queiroz Galvo and Mercurius Engenharia, the eletromechanical scope was implemented by ABB and the engineering projects were designed by a consortium formed by L&M and Engineering S.A. All the wind farms already have the environmental operational licenses issued by the Environmental Institute of Bahia (Instituto de Meio Ambiente do Estado da Bahia IMA) between June 2 and 15, 2012.
Consolidated Balance Sheet Notes to the financial statements September 30, 2012 and 2011
(In thousands of Reais, unless otherwise indicated)
1.3. A-3 2011: Signature of the Electric Energy Commercialization Contracts with distribution companies in the Regulated Contracting Environment (CCEAR).
During the third quarter, the Specific Purpose Vehicles (SPEs), owners of the nine wind farms which sold energy at the A-3 2011 auction, signed the Electric Energy Commercialization Contracts in the Regulated Contracting Environment (CCEARs) with a supply term of 19 years and 10 months.
1.4. Registration of twelve wind farms with an installed capacity of 270.4 MW to participate in the A-3 2012 and A-5 2012 auctions scheduled for December 12 and 14, 2012, respectively.
Renova Energia has a total of twelve projects with an installed capacity of 270.4 MW registered with the Energy Research Company (Empresa de Pesquisa Energtica EPE) for participation in the A-3 2012 and A-5 2012 auctions scheduled for October 3 and 26 2012, respectively. The following table summarizes the registered projects which are located in the same regions as those projects for which energy was commercialized in the LER 2009, LER 2010, A-3 2011 auctions as well as in the free market.
A-3 2012/A-5 2012 Wind Farms Bela Vista Botuquara Conquista Coxilha Alta Itaparica Lenis Recncavo Riacho de Santana Santana So Salvador Arapu Cedro TOTAL
(1)
Installed Capacity (MW) 24.0 22.4 16.0 12.8 28.8 25.6 19.2 24.0 16.0 22.4 29.6 29.6 270,4
Physical Guarantee (average MW ) (1) 12.8 12.2 6.2 7.1 16.0 13.2 10.8 11.3 7.8 11.4 15.8 17.2 141,8
7
Consolidated Balance Sheet Notes to the financial statements September 30, 2012 and 2011
(In thousands of Reais, unless otherwise indicated)
1.5 Conclusion of the BNDESPAR investment in Renova through a capital increase of R$314.7 million, strengthening the companys shareholder base and capital structure.
On June 22, 2012, Renova Energia and BNDESPAR, a wholly owned subsidiary of BNDES (Brazilian Development Bank - Banco Nacional de Desenvolvimento Econmico e Social), announced an agreement through which BNDESPAR made an investment in Renova with the purpose of making a contribution to the Companys business plan, looking towards growth with profitability. The investment was made through a capital increase of 24,987,244 common shares and 8,730,416 preferred shares at the price of R$9.3334 per common or preferred share, equivalent to R$28.0002 per Unit and a total of R$314.7 million. The capital increase was ratified on October 2, 2012 during the Companys Board of Directors meeting. BNDESPAR made a total investment of R$260.7 million, corresponding to a 12.2% stake in Renovas capital stock. The difference of R$ 54.0 million was paid in by the Companys minority shareholders.
The following charts illustrate the shareholder base before and after the capital increase:
Shareholder breakdown prior to the capital increase: ON Shares Controlling Bloc RR Participaes Light Energia Other Shareholders RR Participaes
(1)
PN Shares 50,697,513 573,416 23,302,933 8,457,460 18,363,704 50,697,513 0.00% 0.00% 0.00% 100.00% 1.13% 45.97% 16.68% 36.22% 100.00%
Total Capital 101,123,594 50,561,797 50,561,797 94,674,818 19,465,523 34,954,400 12,686,192 27,568,703 195,798,412 51.64% 25.82% 25.82% 48.36% 9.94% 17.85% 6.48% 14.09% 100.00%
RR shares outside the controlling bloc. Baseline date: July 13, 2012
Consolidated Balance Sheet Notes to the financial statements September 30, 2012 and 2011
(In thousands of Reais, unless otherwise indicated)
Shareholder breakdown following the capital increase: ON Shares Controlling Bloc RR Participaes Light Energia Other Shareholders RR Participaes
(1)
PN Shares 73,177,456 573,416 18,622,850 23,302,933 9,337,460 21,340,797 73,177,456 0.00% 0.00% 0.00% 100.00% 0.78% 25.45% 31.85% 12.76% 29.16% 100.00%
Total Capital 101,123,594 50,561,797 50,561,797 128,392,478 19,465,523 27,934,275 34,954,400 14,006,192 32,032,088 229,516,072 44.06% 22.03% 22.03% 55.94% 8.48% 12.17% 15.23% 6.10% 13.96% 100.00%
101,123,594 50,561,797 50,561,797 55,215,022 18,892,107 9,311,425 11,651,467 4,668,732 10,691,291 156,338,616
64.68% 32.34% 32.34% 35.32% 12.08% 5.96% 7.45% 2.99% 6.84% 100.00%
RR shares outside the controlling bloc. Baseline date: July 13, 2012
Long-standing Partnership
Strategic Alignment
Infrastructure Expertise
BNDES is the largest source of financing for the infrastructure sector with experience in the structuring of infrastructure projects The injection of capital in Renova will support the implementation of the Companys business plan Contribution to the Companys decision making process with the participation of a representative on the Board of Directors Partnership in the development of new technologies and solutions for alternative energy sources Partnership in outreach programs in the communities where Renova is located
9
Outreach Programs
Consolidated Balance Sheet Notes to the financial statements September 30, 2012 and 2011
(In thousands of Reais, unless otherwise indicated)
BNDESPAR will also make a contribution through its seat on the Board of Directors and with its experience in structuring energy projects as well as its strategic alignment in the development of alternative energy sources and sustainability. The investment will also strengthen the Companys capital structure, which is of great importance to its investment cycle. The resources from the transaction will be used to support the implementation of the Companys business plan, which include investments of R$ 2.9 billion by the end of 2016, considering already contracted projects.
1.6. Issuance of debentures in the amount of R$300.0 million for cash reinforcement and/or investments in the LER 2010 and/or A-3 2011 projects.
Financial liquidation of the Companys 2nd simple debenture issue was completed on October 11, 2012 in the amount of R$300 million with a total term of 10 years maturing on September 17, 2022. The debentures are of the nonconvertible type, with an additional real guarantee, in nine series, for placement on a restricted efforts basis and firm placement guarantee. The lead managing bank for the offering was BB Banco de Investimento S.A.. The debentures will be remunerated at an interest rate of 123.45% of the average daily Interbank Deposit (DI) rate. The Company may at its discretion redeem the debentures as from September 17, 2012.
The resources raised from this issue will be allocated to strengthen the companys cash position and/or investments in LER 2010 and/or A-3 2011 projects.
1.7. Carbon Credits LER 2010: Approval of the PDDs (Project Design Document) by the Interministerial Commission for Global Climate Change in the MCTI (Ministry of Science,Technology and Innovation) for the projects which commercialized energy in the LER 2010 auction.
The PDDs (Project Design Document) for the carbon credit projects relative to the operations that sold energy at the LER 2010 auction were approved by the Interministerial Commission for Global Climate Change in the MCTI (Ministry of Science,Technology and Innovation) and will be submitted for registration with the United Nations Organization. Under current market conditions(1), if the LER 2012 wind farms were in operation and the verified generated energy was exactly the contracted energy, they would generate approximately 365 thousand tons of avoided CO2 and would represent additional revenue of R$ 3.4 million annually.
10
Consolidated Balance Sheet Notes to the financial statements September 30, 2012 and 2011
(In thousands of Reais, unless otherwise indicated)
(1)
Considering the conditions of agreement signed between Renova and Deutsche Bank for the purchase of CERs (Certified Emission Reduction), the emission factor for September 2012 and the price per CER in the spot market in October 2012.
On August 8, 2012, Renova launched its first Sustainability Report. The launch took place at Sustenta2012, an event for fostering presentations and discussion on sustainable development in the urban environment. The Company presented a case study at Sustenta2012 highlighting its work on socio-environmental responsibility projects in the region surrounding the Alto Serto I wind farm complex site with the presentation O vento a favor do desenvolvimento territorial - Wind in favor of territorial development. For more information on the Companys Sustainability Report, go http://www.renovaenergia.com.br/pt-br/sustentabilidade/relatorio2011/Paginas/default.aspx. to:
11
Consolidated Balance Sheet Notes to the financial statements September 30, 2012 and 2011
(In thousands of Reais, unless otherwise indicated)
In the third quarter of 2012, the Company reported a positive result of R$ 10,374 thousand, representing an increase of R$ 6,914 thousand in net income compared to the same period in 2011, largely due to an increase in net operating revenue originating from the beginning of revenue related to the Alto Serto I wind farm complex.
Renova Energia S.A (Amounts in R$ thousands) 3Q12 Gross operating revenue (-) Taxes - Pis and Cofins Net operating revenue Non-manageable costs Manageable costs Depreciation Operating profit Administrative expenses Depreciation Other expenses Financial Revenues/Expenses Income Tax and Social Contribution Net Income Net margin Energy sold (MW hour) Headcount 57,453 -2,097 55,356 -2,644 -2,679 -16,689 33,344 -7,635 -207 -379 -12,617 -2,132 10,374 18,7% 334,238 165 3Q11 9,850 -360 9,490 -274 -1,100 -1,416 6,700 -5,428 -426 -143 3,606 -849 3,460 36,5% 56,108 98 Consolidated Change 483.3% 482.5% 483.3% 865.0% 143.5% 1.078.6% 397.7% 40.7% -51.4% 165.0% -449.9% 151.1% 199.8% - 17.8 p.p 9M12 77,836 -2,841 74,995 -3,059 -6,434 -19,778 45,724 -21,870 -556 -875 -5,822 -4,245 12,356 16,5% 446,454 165 9M11 28,088 -1,025 27,063 -861 -2,964 -4,250 18,988 -13,940 -880 -357 -2,207 -1,838 -234 -0,9% 168,324 98 Change 177.1% 177.2% 177.1% 255.3% 117.1% 365.4% 140.8% 56.9% -36.8% 145.1% 163.8% 131.0% 5.380.3% 17.4 p.p
The consolidated net operating revenue during the period was R$55,356 thousand, representing an increase of R$45,866 thousand compared to the same period in 2011. The increase reflects the beginning of revenue recognition from the fourteen wind farms of the Alto Serto I wind complex which sold energy in the LER 2009 auction.
12
Consolidated Balance Sheet Notes to the financial statements September 30, 2012 and 2011
(In thousands of Reais, unless otherwise indicated)
This value is originated by the controlled wind farms Alvorada, Candiba, Guanambi, Guirap, Igapor, Ilhus, Licnio de Almeida, Paje do Vento, Pinda, Planaltina, Porto Seguro, Rio Verde, Serra do Salto and Nossa Senhora da Conceio as a result of the power purchasing agreements signed with CCEE and from the controlled Energtica Serra da Prata S.A. ESPRA as a result of the power purchasing agreement signed with Eletrobrs under the PROINFA (Program of Incentives for Alternative Energy Sources) terms.
Renova Energia S.A. (Amounts in R$ thousands) 3Q12 Net Revenue - SHPs Net Revenue Wind farms Net operating revenue 10,166 45,190 55,356 3Q11 9,490 9,490 Consolidated Change 7.1% 483.3% 9M12 29,804 45,191 74,995 9M11 27,063 27,063 Change 10.1% 177.1%
We have separated the energy production costs into manageable and non-manageable. Non-manageable costs correspond to (i) the tariff paid to Coelba, the concessionaire to which the SHPs are connected, for the use of the distribution system (TUSD) and the tariff for the use of the transmission system (TUST) related to the use of the transmission lines and substations by the wind farms, and (ii) the inspection fee charged by ANEEL. Both these costs are incurred by the controlled company Energtica Serra da Prata S.A. and by the controlled wind farms Alvorada, Candiba, Guanambi, Guirap, Igapor, Ilhus, Licnio de Almeida, Paje do Vento, Pinda, Planaltina, Porto Seguro, Rio Verde, Serra do Salto and Nossa Senhora da Conceio. The 865.0% YoY increase was mainly due to the fourteen wind farms in the Alto Serto I wind complex, resulting from ANEELs authorization to begin revenue collection. Manageable costs correspond largely to operational and maintenance activities at the Cachoeira da Lixa, Colino 1 and Colino 2 plants and maintenance activities at the Alvorada, Candiba, Guanambi, Guirap, Igapor, Ilhus, Licnio de Almeida, Paje do Vento, Pinda, Planaltina, Porto Seguro, Rio Verde, Serra do Salto and Nossa Senhora da Conceio wind farms. The 143.5% YoY variation was largely due to maintenance services at the fourteen wind farms comprising Alto Serto I where construction work was concluded on June 28th, 2012.
13
Consolidated Balance Sheet Notes to the financial statements September 30, 2012 and 2011
(In thousands of Reais, unless otherwise indicated)
The increase of 1078.6% in depreciation also relates to the fourteen wind farms comprising the Alto Serto I wind complex.
(Amounts in R$ thousands) Personnel and Administration Outsourced Services Rentals and leases Business travel Discontinued Projects Insurance Telecom and IT Material for use and consumption Others Total (*)
9M12 5,656 9,935 764 2,123 645 112 1,114 557 1,839 22,745
9M11 4,490 5,302 1,822 816 111 616 256 884 14,297
Chg. % 26.0% 87.4% -58.1% 160.2% 100.0% 0.9% 80.8% 117.6% 108.0% 59.1%
(*) The total represents the sum of administrative expenses and other expenses in the Consolidated Income Statements
The administrative expenses reported in the third quarter recorded a year-on-year increase of 43.9%, primarily due to the increase in company staff and outsourced services to support projects under development. Personnel and Administration and Outsourced Services expenses increased 35.5% and 98.5% YoY, respectively, due to the acquisition of resources necessary to support company growth. Expenses with rentals and leases declined 81.1% YoY due to rental payments for the Alto Serto I wind farms, which are now being booked as an operating cost from July 1, 2012. Business travel expenses were up by 133.6% YoY due to investments in land sourcing for new projects and travel involving the Investor Relations area. The increase of 133.7% in Material for use and consumption reflects the increase in the structure of the Companys offices. The Others line in administrative expenses represents costs involved with freight and insurance, expenses related to social outreach programs directed towards the communities in which we work as well as non-recurring expenses. The increase of 262.1% is primarily due to freight, mailing and tax expenses.
2.4. Consolidated financial result.
14
Consolidated Balance Sheet Notes to the financial statements September 30, 2012 and 2011
(In thousands of Reais, unless otherwise indicated)
(Amounts in R$ thousand) Financial Income Income from Financial Investments Other financial income Financial Expenses Debt Service Other financial expenses Financial Result
Renova Energia S.A Consolidated 3Q12 3Q11 Chg. % 5,715 6,790 -15.8% 5,708 6,772 -15.7% 7 18 -61.1% 18,332 - 3,184 475.8% 17,439 - 2,829 516.4% 893 355 151.5% 12,617 3,606 -449.9%
The net consolidated financial result in the third quarter 2012 was a negative R$ 12,617 thousand. The year-on-year change largely reflects debt service on financing for the LER 2009 wind projects.
Consolidated Assets
Controlling Company
9/30/2012 12/31/2011
Controlling Company
9/30/2012 12/31/2011
Consolidated
9/30/2012 12/31/2011
Current Liabilities Loans & Financing Suppliers Others Long-term Liabilities Loans & Financing Related Parties
Shareholders Equity Investments Fixed Assets in Use Fixed Assets in 650,382 11,665 464,769 7,980 70 70 Capital Stock Capital Reserve Retained Losses
973,203 981,399 1 -
649,131 668,547 -
972,083 981,399 1 -
646,874 668,547 15
1,500,506 196,337
Consolidated Balance Sheet Notes to the financial statements September 30, 2012 and 2011
(In thousands of Reais, unless otherwise indicated)
Progress
49,384
44,636
210,048
959,120
8,197
19,416
9,317
21,673
Total Assets
990,769
816,237
2,088,689 1,579,501
Total Liabilities
990,769
816,237
2,088,689 1,579,501
Evolution of Investments in Fixed Assets in Use (Amounts in R$ thousands) Wind Farms Wind Energy Wind Measurement Towers SHPs Administrative Total 09/30/2012 1,303,032 5,338 185,780 6,356 1,500,506 12/31/2011 2,528 188,322 5,487 Chg.% 111.2% -1.3% 15.8%
196,337 664.3%
Evolution of Investments in Fixed Assets in Progress (Amounts in R$ thousands) Wind Farms Inventory SHPs Basic Projects SHPs Total 09/30/2012 182,719 14,760 12,569 210.048 12/31/2011 932,716 14,262 12,142 Chg.% -80.4% 3.5% 3.5%
959.120 -78.1%
16
Consolidated Balance Sheet Notes to the financial statements September 30, 2012 and 2011
(In thousands of Reais, unless otherwise indicated)
The increase of R$1,304,169 in Fixed Assets in Use mainly represents the conclusion of the assembly and installation of the wind projects which sold energy in the LER 2009 auction, also reflected in the R$749,072 reduction in Fixed Assets in Progress. The additional R$555,097 thousand increase in Fixed Assets in Use is due to investments made in the period that did not go through Fixed Assets in Progress. As demonstrated in the chart above, there was an evolution in consolidated investments in our wind projects under construction and in our wind and SHPs portfolios. Investments include the purchase of wind turbines, civil works, substations and transmission lines.
2.5.3. Financing.
The short and long-term loans and financing account with financial institutions ended the third quarter with an outstanding of R$ 945,038 thousand(1), representing BNDES disbursements to the LER 2009 wind farms amounting to R$ 776,594 thousand. The remainder represents financing arranged with BNB through our Espra subsidiary. The total values of Loans and Financing as well as details of long-term maturities are shown in the following chart:
Year Maturing: Up to 12 months 2013 2014 2015 2016 After 2016 Total
(1)
(1)
The total represents booked value and interest payable. The difference in relation to the amount in the loans and financing item in the financial statements relates to the funding costs of the operations.
2.5.4.
Renovas Consolidated Shareholders Equity account rose R$ 325,209 thousand, mainly representing the increase in capital of R$ 314,700 thousand approved by the Companys Board of Directors and the recovery of retained losses in previous periods.
2.6.
Consolidated Balance Sheet Notes to the financial statements September 30, 2012 and 2011
(In thousands of Reais, unless otherwise indicated)
The following shows the YTD performance of RNEW11 compared with BOVESPAS Electric Energy Index:
Date: 11 08-2012 R$ 29.90
Source: Bloomberg
The Companys Investor Relations department acts in a transparent manner with the market, keeping its investors updated on its positioning, projects in progress and perspectives. To this end, Renova uses the tools of the corporate website in addition to its ongoing relationship with shareholders and potential investors via public meetings and events organized by the company and investment banks. Company information and publications may be accessed through our website (www.renovaenergia.com.br), where important sector news with a potential impact on our business plan is also highlighted.
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