Reference Form - 2013

Reference Form - 2013 ENEVA S.A.
Version: 32
Contents
1. Persons responsible for the form Declaration and identification of the persons responsible for the form
2. Independent Auditors 2.1/2.2 - Identification and remuneration of Auditors 2.3 Other relevant information
3. Selected financial information 3.1 - Financial information 3.2 Non-accounting measures 3.3 - Events subsequent to the latest financial statements 3.4 - Income allocation policy 3.5 - Distribution of dividends and retained earnings 3.6 - Declaration of dividends to retained earnings account or reserves 3.7 - Indebtedness level 3.8 - Obligations by nature and maturity term 3.9 - Other relevant information
4. Risk factors 4.1- Description of risk factors 4.2 - Comments on expectations of changes in exposure to risk factors 4.3 Non-confidential and relevant legal, administrative or arbitration proceedings 4.4 Non-confidential legal, administrative or arbitration proceedings the opposing parties to which are managers, former managers, controlling shareholders, former controlling shareholders or investors 4.5 - Relevant confidential proceedings 4.6 - Repetitive or related non-confidential legal, administrative or arbitration proceedings that are collectively relevant 4.7 - Other relevant contingencies 4.8 - Regulations in the country of origin and in the country where the securities are held in custody
5. Market risk 5.1 - Description of key market risks 5.2 - Description of the market risk management policy 5.3 - Significant changes in key market risks
Version: 32
Contents
5.4 - Other relevant information
6. Issuer history 6.1 / 6.2 / 6.4 Incorporation, term of duration and date of registration with the CVM 6.3 - Brief history 6.5 - Major corporate events relating to its issuer, subsidiaries or affiliates 6.6 - Information of filing for bankruptcy on the basis of relevant amount or judicial or extrajudicial reorganization 6.7 - Other relevant information
7. Issuer activities 7.1 - Description of the activities of the issuer and its subsidiaries 7.2 - Information on operating segments 7.3 - Information on products and services related to operating segments 7.4 - Clients accounting for more than 10% of total net revenue 7.5 - Relevant effects of state regulations on activities 7.6 - Relevant foreign revenue 7.7 - Effects of foreign regulations on activities 7.8 - Relevant long-term relationships 7.9 - Other relevant information
8. Economic group 8.1 - Description of economic group 8.2 - Organizational chart of economic group 8.3 - Restructuring transactions 8.4 - Other relevant information
9. Relevant assets 9.1 - Relevant non-current assets - other 9.1 Relevant non-current assets / 9.1.a - Property, plant and equipment 9.1 - Non-current assets / 9.1.b Patents, trademarks, licenses, concessions, franchises and technology transfer agreements 9.1 - Non-current assets / 9.1.c - Equity interests 9.2 - Other relevant information 10. Managements comments 2
Version: 32
Contents
10.1 - General financial and equity conditions 10.2 - Operating and financial result 10.3 - Events with actual and expected relevant effects on the financial statements 10.4 - Significant changes in accounting practices - Qualifications and emphases in the auditors report 10.5 - Critical accounting policies 10.6 - Internal controls related to the preparation of financial statements Level of efficiency and deficiency and recommendations included in the auditors report 10.7 - Use of proceeds from public offerings and deviations, if any 10.8 - Relevant off-balance sheet items 10.9 - Comments on relevant off-balance sheet items 10.10 - Business plan 10.11 - Other factors with significant influence
11. Forecasts 11.1 - Disclosed forecasts and assumptions 11.2 - Monitoring and changes of forecasts disclosed
12. Meeting and management 12.1 - Description of administrative structure 12.2 - Rules, policies and practices relating to general meetings 12.3 - Dates and newspapers for publication of information required by Law No. 6.404/76 12.4 - Rules, policies and practices relating to the board of directors 12.5 - Description of arbitration clause for resolution of conflicts 12.6 / 8 - Composition and professional experience of management and fiscal council 12.7 - Composition of the statutory committees and the audit, finance and compensation committees 12.9 - Existing marital relationship, common-law marriage, or family relationship up to 2nd degree relating to managers of the issuer, subsidiaries and controlling shareholders. 12.10 - Relationships of subordination, rendering of services or control between managers and subsidiaries, controlling shareholders and other: 12.11 - Agreements, including insurance policies, for payment or reimbursement of expenses incurred by management 12.12 - Other relevant information
13. Management compensation 13.1 - Description of compensation policy or practice, including non-statutory board 3
Version: 32
Contents
13.2 - Total compensation of the board of directors, statutory board and fiscal council 13.3 - Total variable compensation of the board of directors, statutory board and fiscal council 13.13.3 Share-based compensation plan for the board of directors and statutory board 13.5 - Interests in shares and other convertible securities, held by management and members of the fiscal council 13.6 - Share-based compensation for the board of directors and statutory board 13.7 - Information on outstanding options held by the board of directors and the statutory board 13.8 - Options exercised and shares delivered in connection to share-based compensation of the board of directors and statutory board 13.9 - Information required to understand figures disclosed in items 13.6 to 13.8 - pricing method for shares and options 13.10 - Information on pension plans provided to members of the board of directors and statutory officers 13.11 Maximum, minimum and average compensation of the board of directors, statutory board and fiscal council 13.12 - Compensation and indemnification mechanisms for management in the event of removal from office or retirement 13.13 - Percentage of total compensation held by management and members of the fiscal council who are parties related to the controlling shareholders 13.14 - Compensation of management and members of the fiscal council, grouped by body, received for any reason other than the office they hold 13.15 - Compensation of management and members of the fiscal council recognized in income of controlling shareholders, whether direct or indirect, companies under common control and subsidiaries of the issuer 13.16 - Other relevant information
14. Human resources 14.1 - Description of human resources 14.2 - Relevant changes - human resources 14.3 - Description of employee compensation policy 14.4 - Description of relationship between issuer and unions
15. Control 15.1/15.2 - Shareholder structure 15.3 - Capital distribution 15.4 Shareholders organizational chart 15.5 - Shareholders agreement filed at issuers head office or to which the controlling shareholder is a party 15.6 - Relevant changes in equity interests held by members of the controlling group and by the 4
Version: 32
Contents
issuers management 15.7 - Other relevant information
16. Transactions with related parties 16.1 - Description of issuers rules, policies and practices regarding transactions with related parties 16.2 - Information on transactions with related parties 16.3 - Identification of measures taken to address conflicts of interest and statement of the strictly commutative nature of the conditions agreed or proper compensatory payment
17. Capital stock 17.1 - Information on capital stock 17.2 - Capital Increases 17.3 - Information on stock splits, reverse stock splits and stock dividends 17.4 - Information on capital stock decrease 17.5 - Other relevant information
18. Securities 18.1- Rights of shares 18.2 - Description of any statutory rules limiting the voting rights of significant shareholders or requiring them to hold a public offering 18.3 - Description of exceptions and suspensive clauses relating to equity or political rights set forth in the by-laws 18.4 Trading volume and highest and lowest price quotes for securities traded 18.5 - Description of other securities issued 18.6 - Brazilian markets where securities are admitted for trading 18.7 - Information about class and type of securities admitted for trading on foreign markets 18.8 - Public offerings for distribution held by issuer or third parties, including controlling shareholders and subsidiaries and affiliates, regarding securities of the issuer 18.9 - Description of public offerings for acquisition held by the issuer in respect of shares issued by third parties 18.10 - Other relevant information
19. Repurchase plans/Treasury 19.1 - Information on repurchase of shares of the issuer 19.2 - Variation in treasury shares 19.3 - Information on treasury securities as of the closing date of the past fiscal year
Version: 32
Contents
20. Trading policy 20.1 - Information on securities trading policy 20.2 - Other relevant information
21. Disclosure policy 21.1 - Description of internal rules, regulations and procedures for disclosing information 21.2 - Description of the policy for disclosing relevant act or fact and of procedures for maintaining secrecy about relevant information not disclosed 21.3 - Managers in charge of implementing, maintaining, assessing and inspecting the information disclosure policy 21.4 - Other relevant information
22. Special events 22.1 - Acquisition or disposal of any relevant asset that does is not included in the issuers not f it as normal business operations 22.2 - Significant changes in the issuers form of conducting business 22.3 - Relevant agreements entered into by issuer and its subsidiaries, which do not directly relate to their operating activities 22.4 - Other relevant information
Version: 32
1.1 - Declaration and identification of the persons responsible for the form
Name of the person responsible for the content of the form Position of the responsible person:
Eduardo Karrer Chief Executive Officer/Investor Relations Director
The above qualified officer declares that: a. He reviewed the reference form; b. all information provided in the form complies with the provisions of CVM Instruction No. 480, particularly arts. 14 to 19; and c. the information provided herein is a true, accurate, and complete overview of the economic and financial condition of the issuer, the risks inherent to its business and the securities issued by it.
Version: 32
2.1/2.2 - Identification and remuneration of Auditors

The Company has any Auditor? CVM Code Type of Auditor Name/Corporate Name CPF/CNPJ Period of service Description of the contracted services YES 418-9 Domestic KPMG Auditores Independentes 57.755.217/0003-90 From August 15, 2007 to March, 21, 2012 (i) independent audit and thorough review of the Companys financial statements for the financial years ended December 31, 2010 and 2011; (ii) review of the quarterly information (ITR) of the Company in 2010 and 2011; and (iii) issue of the comfort letter in connection with the Companys IPO in 2013. The amount paid for independent audit services regarding the financial statements for the fiscal years ended December 31, 2010 and 2011 totaled R$1.5 million. The amount to be paid for issue of the comfort letter in connection with the Companys IPO is R$350,000.00. Compliance with the mandatory rotation of independent auditors, pursuant to CVM Instruction 308/99 Not applicable, since the independent auditor did not disagree with the justification. Period of service
From August 15, 2007 to October 14, 2011 From August 15, 2008 to March 21, 2012
Total amount of the independent auditors remuneration itemized by service Justification for replacement Justification presented by the auditor, in the event of disagreement with the issuers justification Name of the responsible accountant
Manuel Fernandes Rodrigues de Sousa
CPF
783.840.017-15
Address
Avenida Almirante Barroso 52, 4 floor, Centro, Rio de Janeiro, RJ, Brazil, Zip Code 20031000, Phone (21) 35159400, Fax (21) 35159000, e-mail: mfernandes@kpmg.com.br Avenida Almirante Barroso 52, 4th floor, Centro, Rio de Janeiro, RJ, Brazil, Zip Code 20031000, Phone (21) 35159400, Fax (21) 35159000, e-mail: mfernandes@kpmg.com.br
Vnia Andrade de Souza
671.396.717-53
Version: 32
The Company has any Auditor? CVM Code Type of Auditor Name/Corporate Name CPF/CNPJ Period of service Description of the contracted services
YES 471-5 Domestic Ernst & Young Terco Auditores Independentes S.S. 61.366.936/0001-25 March 22, 2012 (i) independent audit and review of the individual and consolidated financial statements of the Company for the financial year ended December 31, 2012; (ii) review of the quarterly financial information for the periods ended March 31, 2012, June 30, 2012, September 30, 2012 and March 31, 2013; (iii) issue of a comfort letter in connection with the Companys IPO in 2013. The remuneration paid for independent audit services regarding the financial statements for the fiscal years ended December 31, 2012 totaled R$443,023.00. The amount to be paid for issue of the comfort letter in connection with the Companys IPO is R$480,000 .00. Not applicable since the independent auditor was not replaced. Not applicable, since the independent auditor was not replaced. Period of service
March 22, 2012
Total amount of the independent auditors remuneration itemized by service Justification for the replacement Justification presented by the auditor, in the event of disagreement with the issuers justification Name of the responsible accountant
Roberto Cesar Andrade dos Santos
CPF
077.932.347-58
Address
Praia de Botafogo, n 370, 8 andar, Bairro: Botafogo CEP 22.250-040, Rio de Janeiro/RJ e-mail: roberto.santos@br.ev.com Phone: (21) 3263-7233 Fax: (21) 3262-7004J
Version: 32
10
Version: 32
All information relevant and appropriate to this issue was disclosed in the above items.
11
Version: 32
3.1 - Financial Information - Consolidated
(Real) Shareholders equity Total assets Net Revenue/Fin. Interm. Revenue/Insurance premium earned Gross Income Net income Number of shares, excl. treasury shares (Units) Equity value per share (in Real per Unit) Net earnings per share (in Real per share)
Fiscal year (December 31, 2012) 2,704,575,000.00 9,451,180,000.00
490,940,000.00 -106,614,000.00 -434,454,000.00 578,241,732 4.67723938
168,279,000.00 4,501,000.00 -401,862,000.00 136,720,840 10.02096681
98,454,000.00 -18,028,000.00 -255,614,000.00 136,692,680 12.44809158
-0.75263
-2.939289
1.869990
12
Version: 32
3.2 - Non-accounting measurements
a) Non-accounting measurements EBITDA is a non-accounting measurement prepared by the Company and reconciled with our financial statements, consisting of net income before net financial income; income and social contribution taxes on income; and depreciation and amortization expenses, this being the definition used by the Company for calculation of its EBITDA. EBITDA is not a measure of financial performance prepared in accordance with accounting practices adopted in Brazil or the IFRS, and it should not be considered as an alternative to net income, an indicator of operating performance, an alternative to cash flows or an indicator of liquidity. b) reconciliations between amounts disclosed and amounts included in the audited financial statements
(R$ thousands) Income before Income and Social Contribution Taxes (+) Equity Pickup (+) Other Revenues/ Expenses (+) Net Financial Income (+) Depreciation and Amortization (Expenses) (+) Depreciation and Amortization (Costs) EBITDA 2012 (549.090) (34.235) (418) (127.540) 3.976 8.945 (373.976) 1Q13 (317.868) (83.490) (1.011) (77.827) 638 17.257 (137.645)
c) reason for choosing such indicator as the most suitable for the correct understanding of financial condition and results of operations Our management believes that EBITDA provides a useful measure of the company's performance, being widely used by investors and analysts to evaluate performance and compare companies. Because financial revenues and expenses, IRPJ and CSLL, depreciation and amortization are not taken into account for calculation of EBITDA, EBITDA works as an indicator of our overall economic performance, which is not affected by fluctuations in interest rates, changes in IRPJ and CSLL tax burden or changes in levels of depreciation and amortization. As a result, we believe that EBITDA enables a better understanding not only of our financial performance, but also of our capacity to comply with our liabilities and to obtain funds for our capital expenditure and working capital.
13
Version: 32
3.3 - Subsequent events to the latest financial statements
In April 2013, Parnaba I Thermal Plant in the State of Maranho was authorized by the Brazilian Electricity Regulatory Agency (ANEEL) to start commercial operation of the third and fourth turbines with installed capacity of 169 MW each. Parnaba I therefore reached its total installed capacity of 676 MW and is already operating. In the same month, the company completed acquisition of the total capital stock of UTE MC2 Nova Vencia. The project, which is authorized for construction of a thermal plant with capacity of 176 MW, will be transferred to the Paranaba Basin, in the State of Maranho. Also in April 2013, ENEVAannounced that, together with MPX-E ON Participaes S.A. and Petra Energia, it executed an agreement with Kinross Brasil Minerao S.A. for implementation of a natural gas-fuled thermal project with installed capacity of 56 MW to be built in the Parnaba Basin, state of Maranho, which is scheduled to go on stream in December 2013. The annual amount of the agreement totals approximately R$54 million. In view of the provisions of CVM/SEP Circular Letter No. 01/2013, the Company reports that it is not possible to estimate the financial effects of the subsequent events described above. For more information on the subsequent events described above, see item 6.5 of this Reference Form.
14
Version: 32
3.4 - Income allocation policy

2012 Rules on retained earnings The Companys Bylaws provide that the remaining balance of the net income for the year shall be allocated as follows: (i) Five percent (5%) to the establishment of a legal reserve, up to the limit provided for by law; (ii) Establishment of a reserve for contingencies, as proposed by the management bodies; (iii) Payment of mandatory minimum annual dividend to shareholders; (iv) Retention based on the capital budget approved in advance by the administration bodies, and (v) Establishment of a statutory reserve for the purpose of funding the development, growth and expansion of the Companys business, which shall not exceed the amount equivalent to 100% of the share capital of the Company. In the fiscal year ended December 31, 2012 no retention was made as the Company reported losses. The Companys Bylaws ensures to shareholders the right to receive a mandatory annual dividend of not less than twenty five percent (25%) of the net income for the year, minus or plus the following amounts: (i) amount allocated to the establishment of a legal reserve; and (ii) amount allocated to the establishment of reserves for contingencies and reversals of those established in previous years; (iii) payment of annual minimum mandatory dividend to shareholders; (iv) amount intended for creating the unrealized profit reserve, should the mandatory dividend amount exceed the realized portion of income for the year. The company may maintain the statutory profit reserve named Investment Reserve, the purpose of which will be to finance expansion of activities of the Company and/or subsidiaries and affiliates. This reserve may be created out of up to one hundred per cent (100%) of net income remaining after legal and statutory deductions and its balance, added to the balance of the other profit 2011 The Companys Bylaws provide that the remaining balance of the net income for the year shall be allocated as follows: (i) Five percent (5%) to the establishment of a legal reserve, up to the limit provided for by law; (ii) Establishment of a reserve for contingencies, as proposed by the management bodies; (iii) Payment of mandatory minimum annual dividend to shareholders; (iv) Retention based on the capital budget approved in advance by the administration bodies, and (v) Establishment of a statutory reserve for the purpose of funding the development, growth and expansion of the Companys business, which shall not exceed the amount equivalent to 100% of the share capital of the Company. In the fiscal year ended December 31, 2011 no retention was made as the Company reported losses. The Companys Bylaws grant to shareholders the right to receive a mandatory annual dividend of not less than twenty five percent (25%) of the net income for the year, minus or plus the following amounts: (i) amount allocated to the establishment of a legal reserve; and (ii) amount allocated to the establishment of reserves for contingencies and reversals of those established in previous years; (iii) payment of annual minimum mandatory dividend to shareholders; (iv) amount intended for creating the unrealized profit reserve, should the mandatory dividend amount exceed the realized portion of income for the year. The company may maintain the statutory profit reserve named Investment Reserve, the purpose of which will be to finance expansion of activities of the Company and/or subsidiaries and affiliates. This reserve may be created out of up to one hundred per cent (100%) of net income remaining after legal and statutory deductions and its balance, added to the balance of the other profit 2010 The Companys Bylaws provide that the remaining balance of the net income for the year shall be allocated as follows: (i) Five percent (5%) to the establishment of a legal reserve, up to the limit provided for by law; (ii) Establishment of a reserve for contingencies, as proposed by the management bodies; (iii) Payment of mandatory minimum annual dividend to shareholders; (iv) Retention based on the capital budget approved in advance by the administration bodies, and (v) Establishment of a statutory reserve for the purpose of funding the development, growth and expansion of the Companys business, which shall not exceed the amount equivalent to 100% of the share capital of the Company. In the fiscal year ended December 31, 2010 no retention was made as the Company reported losses. The Companys Bylaws grant to shareholders the right to receive a mandatory annual dividend of not less than twenty five percent (25%) of the net income for the year, minus or plus the following amounts: (i) amount allocated to the establishment of a legal reserve; and (ii) amount allocated to the establishment of reserves for contingencies and reversals of those established in previous years; (iii) payment of annual minimum mandatory dividend to shareholders; (iv) amount intended for creating the unrealized profit reserve, should the mandatory dividend amount exceed the realized portion of income for the year. The company may maintain the statutory profit reserve named Investment Reserve, the purpose of which will be to finance expansion of activities of the Company and/or subsidiaries and affiliates. This reserve may be created out of up to one hundred per cent (100%) of net income remaining after legal and statutory deductions and its balance, added to the balance of the other profit
Retained earnings amounts Rules on dividend distribution
15
Version: 32
2012 reserves, except for unrealized profit reserve and reserve for contingencies, may not exceed one hundred percent (100%) of the Companys paid in capital stock. In the fiscal year ended December 31, 2012 no distribution of dividend was made as the Company reported losses. Frequency of dividend distributions The dividend distribution policy is subject to the provisions of the Brazilian Corporation Law, i.e., annual distribution, and the Company may, by resolution of the Board of Directors, draw up a half-yearly balance sheet and declare dividends to the income account ascertained thereon. Moreover, the Board of Directors may declare interim dividends to retained profits or profit reserves accounts reported in the latest annual or half-yearly balance sheet. The Brazilian Corporation Law allows the Company to suspend distribution of mandatory dividend if the Board of Directors declares to the General Meeting that the distribution is inconsistent with its financial condition. The Fiscal Council, if established, shall issue its opinion on the Board of Directors proposal. In addition, the Board of Directors shall submit within five days of the General Meeting to the Securities and Exchange Commission a justification for suspending the dividend distribution. Profits retained due to a suspension as above mentioned shall be allocated to a special reserve and, if they are not absorbed by subsequent losses, shall be paid as dividends, as soon as the financial condition of the company so allows.
2011 reserves, except for unrealized profit reserve and reserve for contingencies, may not exceed one hundred percent (100%) of the Companys paid in capital stock. In the fiscal year ended December 31, 2011 no distribution of dividend was made as the Company reported losses. The dividend distribution policy is subject to the provisions of the Brazilian Corporation Law, i.e., annual distribution, and the Company may, by resolution of the Board of Directors, draw up a half-yearly balance sheet and declare dividends to the income account ascertained thereon. Moreover, the Board of Directors may declare interim dividends to retained profits or profit reserves accounts reported in the latest annual or half-yearly balance sheet. The Brazilian Corporation Law allows the Company to suspend distribution of mandatory dividend if the Board of Directors declares to the General Meeting that the distribution is inconsistent with its financial condition. The Fiscal Council, if established, shall issue its opinion on the Board of Directors proposal. In addition, the Board of Directors shall submit within five days of the General Meeting to the Securities and Exchange Commission a justification for suspending the dividend distribution. Profits retained due to a suspension as above mentioned shall be allocated to a special reserve and, if they are not absorbed by subsequent losses, shall be paid as dividends, as soon as the financial condition of the company so allows.
2010 reserves, except for unrealized profit reserve and reserve for contingencies, may not exceed one hundred percent (100%) of the Companys paid in capital stock. In the fiscal year ended December 31, 2010 no distribution of dividend was made as the Company reported losses. The dividend distribution policy is subject to the provisions of the Brazilian Corporation Law, i.e., annual distribution, and the Company may, by resolution of the Board of Directors, draw up a half-yearly balance sheet and declare dividends to the income account ascertained thereon. Moreover, the Board of Directors may declare interim dividends to retained profits or profit reserves accounts reported in the latest annual or half-yearly balance sheet. The Brazilian Corporation Law allows the Company to suspend distribution of mandatory dividend if the Board of Directors declares to the General Meeting that the distribution is inconsistent with its financial condition. The Fiscal Council, if established, shall issue its opinion on the Board of Directors proposal. In addition, the Board of Directors shall submit within five days of the General Meeting to the Securities and Exchange Commission a justification for suspending the dividend distribution. Profits retained due to a suspension as above mentioned shall be allocated to a special reserve and, if they are not absorbed by subsequent losses, shall be paid as dividends, as soon as the financial condition of the company so allows.
Restrictions on dividends distribution
16
Version: 32
3.5 - Distribution of dividends and net earnings retained

(in Real) Adjusted net income Dividend distributed in relation to adjusted net income Rate of return in relation to the shareholders equity of issuer Total distributed dividend Net earnings retained Approval date of the retention Fiscal year ended December 31, 2012 -435,202,000.00 0,000000 0,000000 0,00 0,00 Fiscal year ended December 31, 2011 -401,862,000.00 0,000000 0,000000 0,00 0,00 Fiscal year ended December 31, 2010 -255,614,000.00 0,000000 0,000000 0,00 0,00
Net earnings retained
Amount
Dividend payment
Amount
Dividend payment
Amount
Dividend payment
0,00
0,00
17
Version: 32
3.6 - Declaration of dividends to retained earnings account or reserves
In the latest three fiscal years, the Company declared no dividends or interest on equity credited as dividends which have been allocated to retained earnings account or reserves established in previous fiscal years, as the Company reported losses in the latest three fiscal years.
18
Version: 32
3.7- Level of indebtedness
Fiscal year 12/31/2012
Total debt amount, of any Ratio type nature 6,746,605,000.00 Debt/equity ratio
Debt/equity ratio Description and justification for utilization of other ratio 2.49452
19
Version: 32
3.8 - Obligations by nature and maturity term
Fiscal year (December 31, 2012) Type of Debt Less than a year One to three years Three to five years Collateral 895,622,000 436,028,000 423,728,000 Floating guarantee Unsecured 1,511,567,000 718,007,000 618,806,000 Total 2,407,159,000 1,154,035,000 1,042,534,000 Note: The information provided in this item refers to the consolidated financial statements of the Company.
More than five years 2,142,877,000 2,142,877,000
Total 3,898,255,000 0 2,848,350,000 6,746,605,000
20
Reference Form - 2013 - ENEVAS.A.
Version: 32
The Company has adopted, as of January 1, 2013, IFRS 10 and IFRS 11 to prepare its Quarterly Information ITR as of March 31, 2013, whose accounting policy is as follows:
IFRS 10 establishes a single control model that applies to all entities, including special purpose entities. The changes introduced by IFRS 10 require that Management exercises significant judgment to determine which entities are controlled and are hence required to be consolidated by a controlling company, comparative to the requirements that were part of IAS 27. IFRS 11 eliminates the option of accounting for joint ventures (ECC) based on proportional consolidation. Instead, the ECCs which fit the definition of joint venture are recorded based on the equity method.
The adoption of IFRS 10 and IFRS 11 was performed retroactively for the financial information of the period of three months ended March 31, 2012. In compliance with IFRS 11, investments in the joint ventures Porto do Pecm Gerao de Energia S.A., Porto do Pecm Transportadora de Minrios S.A., OGMP Transporte Areo Ltda., Pecm Operao e Manuteno de Unidades de Gerao S.A., MABE Construo e Administrao de Projetos Ltda., MPX Chile Holding Ltda., Seival Participaes S.A., UTE MPX Sul Energia Ltda., Parnaba Participaes S.A., UTE Porto do A Energia S.A., Porto do A II Energia S.A. e MPX E.ON Participaes S.A. are valued at the equity method in the individual and consolidated quarterly information for the three month period ended March 31, 2013 and 2012. The financial information for the fiscal years ended December 31, 2012, 2011, and 2010 shown in this Reference Form was prepared and is presented in accordance with the accounting practices in force on December 31, 2012, unless otherwise indicated. Thus, the financial information for the quarters ended March 31, 2013 and 2012, does not compare with the other financial information contained in this Reference Form. As of January 1, 2013, the Company adopted new accounting rules aiming to comply with international accounting standards. As a result of the change in accounting practices, the Company no longer consolidates in its financial information the investees over which the Company individually does not have controlling power, namely Porto do Pecm Gerao de Energia S.A., Porto do Pecm Transportadora de Minrios S.A., OGMP Transporte Areo Ltda., Pecm Operao e Manuteno de Unidades de Gerao S.A., MABE Construo e Administrao de Projetos Ltda., MPX Chile Holding Ltda., Seival Participaes
21
Version: 32
S.A., UTE MPX Sul Energia Ltda., Parnaba Participaes S.A., UTE Porto do A Energia S.A.,Porto do A II Energia S.A. and MPX E.ON Participaes S.A. In addition, the Company now recognizes income for the above-mentioned companies by the equity method. Thus, the Companys equity pick-up account has become more relevant for the Companys overall income, which would not occur under the previous accounting practices. The Company presents below a table showing changes made in comparative balances represented in quarterly financial information - ITR regarding the consolidated balance sheet as of December 31, 2012 and the three-month period ended March 31, 2012:
Consolidated 12/31/2012 (in thousands of R$) Assets Current assets Cash and cash equivalents Securities Trade accounts receivable Subsidies receivable Fuel Consumption account Inventories Prepaid expenses Taxes recoverable Derivative gains Miscellaneous advances Escrow deposits Other credits Originally disclosed Adjustments Restated
590,469 3,441 152,114 17,561 211,718 40,462 57,438 3,018 20,267 4,237 3 1,100,728
(71,192) (130,769) (69,031) (21,111) (20,028) (18,484) (4,202) (3) (334,820)
519,277 3,441 21,345 17,561 142,687 19,351 37,410 3,018 1,783 35 765,908
Non-current assets Prepaid expenses Escrow deposits Subsidies receivable - Fuel Consumption account Taxes recoverable Deferred Income and Social Contribution Taxes Loan agreement with affiliates Accounts receivable with other connected persons Accounts receivable with affiliates Advance for future capital increase in affiliates Embedded derivatives
8,705 137,717 24,617 34,709 456,123 359 8,575 3,732 479 675,016 62,956 7,362,815 249,665 9,451,180
(211) (2,069) (10,675) (150,575) 134,567 (7,441) 3,061 12,425 (20,918) 770,999 (1,792,416) (34,429) (1,411,584)
8,494 135,648 24,617 24,034 305,548 134,926 1,134 6,793 12,425 479 654,098 833,955 5,570,399 215,236 8,039,596
Investments Property, plant and equipment Intangible assets
Consolidated 12/31/2012 (in thousands of R$) Liabilities Current liabilities Trade accounts payable Loans and financing Originally disclosed Adjustments Restated
228,638 1,915,402
(113,377) (95,428)
115,261 1,819,974
22
Version: 32
Debts with affiliates Debts with parent company Debts with other related parties Debentures Taxes and contributions payable Social and labor liabilities Losses in derivative transactions Contractual withholding Profit sharing Dividends payable Other liabilities
3,407 19,057 111 11,375 12,980 39,506 133,935 23,900 1,960 16,888 2,407,159
26,783 (3,407) (15,068) (4,134) (3,117) (16,555) (56,561) (3,267) (13,563) (297,694)
26,783 3,989 111 7,241 9,863 22,951 77,374 20,633 1,960 3,325 2,109,465
Non-current liabilities Loans and financing Debts with other related parties Debentures Losses in derivative transactions Provision for unsecured liabilities Deferred income and social contribution taxes Provision for dismantling Other provisions Shareholders equity Capital stock Capital reserve Equity valuation adjustments Accumulated losses Shareholders equity attributable to controlling shareholders Minority interests Total shareholders equity
4,151,947 215 4,954 166,992 10,431 4,197 710 4,339,446
(1,047,141) 215 (72,195) 19,840 (8,383) (2,079) (710) (1,110,453)
3,104,806 430 4,954 94,797 19,840 2,048 2,118 3,228,993
3,731,734 321,904 (119,067) (1,384,971) 2,549,600 154,975 2,704,575 9,451,180
(3,437) (3,437) (1,411,584)
3,731,734 321,904 (119,067) (1,384,971) 2,549,600 151,538 2,701,138 8,039,596
Statement of income
Consolidated 03/31/2012
(in thousands of R$)

Revenue from sales of goods and/or services Cost of goods and/or services sold Gross profit Operating expenses/revenues General and administrative expenses Personnel and managers Other expenses Third parties services Depreciation and amortization Leases and rentals Other operating revenues Other operating expenses Losses in the disposal of assets Equity pickup Income before financial income and taxes Financial income Financial revenues Exchange variation gain Debentures at fair value Financial investment Derivative financial instruments Other financial revenues Financial expenses Exchange variation loss Derivative financial instruments Debentures interest/costs Other financial expenses
Originally disclosed
75,669 (81,809) (6,140) (76,636) (64,332) (27,440) (5,024) (26,301) (1,304) (4,263) 575 (482) (482) (12,397) (82,776) (11,373) 180,337 47,738 13,000 28,137 89,219 2,243 (191,710) (25,948) (110,598) (29,035) (26,129)
Adjustments
12 12 (4,583) 2,459 641 854 685 210 69 (29) 16 16 (7,029) (4,571) 5,171 (139,639) (29,052) (37) (110,381) (169) 144,810 20,587 124,005 218
Restated
75,669 (81,797) (6,128) (81,219) (61,873) (26,799) (4,170) (25,616) (1,094) (4,194) 546 (466) (466) (19,426)
-
(87,347)
-
(6,202) 40,698 18,686 13,000 28,100 (21,162) 2,074 (46,900) (5,361) 13,407 (29,035) (25,911)
23
Version: 32
Income before taxes on income Income and social contribution taxes on income Current Deferred Loss for the period Attributed to shareholders of parent company Attributed to non-controlling shareholders Loss per share Basic and diluted loss per share (in R$)
(94,149) 16,389 (838) 17,227 (77,760) (77,481) (279) (0.56870)
600 (600) (600) -
(93,549) 15,789 (838) 16,627 (77,760) (77,481) (279) (0.56870)
24
Version: 32
4.1 - Description of risk factors

(a) Company related risks
We may be unable to obtain all licenses and permits required to implement and operate our projects. We hold or have applied for licenses and permits, or the renovation thereof, as the case may be, to perform our activities, so that our projects can comply with rules, terms and conditions established by the regulatory agencies in Brazil. We must obtain various licenses and permits from different national and international government agencies and bodies, including government agencies and authorities with jurisdiction over the environment, such as, for example, Brazilian Environmental Protection Agency (Instituto Brasileiro de Meio Ambiente dos Recursos Naturais Renovveis, or IBAMA) and other Brazilian and Chilean government agencies. In addition, several of the contracts we have signed in relation to future operations also require us to obtain such licenses and permits. However, we are unable to provide assurance as to whether or when we will be able to obtain all licenses and permits required to build and operate the plants planned in our project portfolio. Not obtaining licenses, concessions or permits required for our operations, or their being obtained and subsequently challenged, could materially and adversely affect our business, financial condition and results from operations. We may fail to reach results or projections, or may not fully implement our business strategy. Certain information and conclusions included in this Reference Form were based on estimates prepared our management, as assumptions concerning funds we may have in the future, and in relation to investment and operating costs. Additionally, we may be unable to fully implement our business strategy due to inability to conclude our current and future projects without delays or incurring additional costs; grow while maintaining financial discipline; manage our customer portfolio efficiently; obtain additional funding as expected; or maintain desired levels of operational efficiency. Our actual productivity, investments, operating costs and business strategy may turn out to be substantially less favorable than estimated. Projections stated in this Reference Form may not, in any circumstances, be regarded as statements, assurances or predictions that we will or may reach any specific results in the future. We cannot provide assurance that our future results will not be materially different from those included in this Reference Form. Consequently, current or potential investors may lose part or all of their investments in our shares in as far as projections and conclusions stated in this Reference Form fail to materialize.
The construction, expansion and operation of plants, of the blocks in the Paranaba Basin and the Seival Mine involve significant risks, including those related to logistic infrastructure, which may lead to loss of revenues, increased expenses, or any other adverse effect on our financial condition. The construction, maintenance, expansion and operation of facilities and equipment used to generate electricity involve a number of risks, including: 25
Version: 32
being unable to obtain governmental permits and licenses; equipment items not being available; distribution and / or transmission systems not being available; fuel supplies being cut off or hydrological and meteorological interference; stoppage of work, strikes or other labor disputes; social unrest; unexpected engineering and environmental problems delays affecting construction and operation, or costs exceeding those stipulated; work being halted, including in the port through which we import our coal for certain projects; high capital investment requirements; adequate funding not being available; and volatile fuel prices.
The construction, maintenance, expansion and operation of natural gas blocks and coalmines involve a number of risks, including: geological risks being unable to obtain governmental permits and licenses; equipment items not being available; hydrological and meteorological interference; stoppage of work, strikes or other labor disputes; social unrest; unexpected engineering and environmental problems delays affecting construction and operation, or costs exceeding those stipulated; high capital investment requirements; adequate funding not being available; and volatile natural gas and coal prices.
Additionally, operation of the plants, natural gas blocks and coal mines depend on infrastructure and logistics for the conduct of our business during the construction and operation stages of our projects, which are subject to failures, delays and interruptions that may adversely affect such operations. We have not taken out insurance for some of the above risks, and even for risks covered, insurance may be insufficient. Any of these events or other problems could adversely affect our ability to generate electricity and / or produce coal and / or natural gas in amounts consistent with our projections and obligations to our customers, which could have a material adverse effect on our financial situation and operating results, and on our shares market prices. 26
Version: 32
Changes in current or future subsidies may have material adverse effects on our results. Certain tax benefits (deferral, exemption or other) that would benefit ENEVAmay not be applied by the states in which our projects are located. In the case of these tax benefits not being granted, our economic-financial estimates may not materialize, and there may be a need for unplanned expenditures that may adversely affect our business, operating, and financial results. Construction delays or cost overruns could increase expenses required for to build power plants, exploit natural gas blocks, or operate our coalmine, as well as result in revenue losses and imposition of administrative and contractual penalties. Delays affecting our construction deadlines or cost overruns may lead to increases in spending projected to build plants, exploit natural gas blocks, and operate our coalmine. Additionally, delays in completing these projects may lead to initial cash flows being delayed, which could lead to higher cash requirements. We may also incur project development and construction costs exceeding original estimates due to interest-rate hikes in the period or higher costs of materials, labor, or other costs. Additionally, we may be unable to get projects built in time or within budget due to a range of other factors, including, but not limited to, materials, equipment, technical capacity or labor being in short supply or not being available; adverse weather conditions; natural disasters; labor disputes; unforeseen engineering or geological or environmental problems affecting projects; disputes with contractors and subcontractors; delays in granting licenses, permits or authorizations from the competent authorities; and other issues and circumstances that may involve increased costs of developing and operating plants. Especially for those power plants that entered into electricity purchase and sale agreements on the regulated market, delays in power plant construction and commercial operation may result in losses of fixed revenue as established in such agreements and in the penalties set forth therein, which can vary from a fine and agreement termination to the penalties provided for in regulations by the National Electricity Agency (ANEEL) for non-compliance with the schedule of grants (such penalties may range from fines - limited to 1% of the estimated amount of energy output during the 12 months before the notice of infraction is issued - to authorization cancellation, in severe cases). Moreover, in the event of delays leading to non-fulfillment of the relevant energy agreements, we may have to purchase energy by executing short-term energy agreements with third parties in, which usually represents greater costs and may compromise our financial profitability and the quality of the services provided to consumers. Two of our power plants are currently in commercial operation and have started to meet the supply conditions included in some late agreements - Pecm II and Parnaba III. Other power plants started commercial operation with delay and consequently may suffer revenue losses and imposition of the penalties described above. Any of these factors could have an adverse effect on our financial results and business plans. Delay in the schedule for construction and coming on stream of any of the Plants could also result in execution of the performance guarantee. In this context, ANEEL Order No. 3.617/2012 determined that the insurance company J. Malucelli Seguradora S.A. should execute the guarantee, in the amount of R$16,356,500.00, relating to the Parnaba III undertaking. UTE MC2 Nova Vencia S.A. filed an administrative appeal against this decision, and the execution was stayed. The stay, however, will only remain in force until the appeal has been judged, and could be overturned if the appeal is not granted. Estimates on volume and quality of the natural gas reserves in the blocks in Parnaba basin and Seival Mine may be overestimated. 27
Version: 32
The natural gas blocks and coal mine reserves described in this Reference Form are estimates based on evaluation methods used in the corresponding sectors and in assumptions related to the production and market prices of natural gas and coal. There are many uncertainties inherent to estimating the quantity of reserves and to forecasting potential future indices for the production of natural gas and coal, including several factors beyond the Companys c ontrol. Mineral resources engineering involves estimating mineral deposits that cannot be determined precisely and the accuracy of any reserves estimates is a function of the quality of data available, as well as of geological and engineering evaluation and interpretation. Consequently, the Company cannot guarantee to the investors that the natural gas and coal reserves described in this Reference Form will be recovered or that they will be recovered at the expected rates. The Company may need to review the useful life of the coal mine and of the natural gas blocks based on their actual production and on other factors. For example, fluctuations in the market prices of natural gas and coal, reduction of the reserves recovery rates, higher income or increase in operating and capital costs due to inflation, exchange rates, or other factors may make mining or exploring determined reserves expensive and may result in re-allocating the Companys reserves. The Company might be significantly and adversely affected if the number of its reserves referring to the blocks of natural gas and coal is lower than estimated, especially if it has to purchase natural gas and coal from third parties or develop mines in farther locations from the plants. We may not be capable of generating all the energy we agreed to deliver by contract, which may have an adverse effect on us. In our electrical energy purchase and sales agreements, we undertake to generate and deliver certain amounts of electrical energy. If we are not capable of or if we are prevented from generating electrical energy in a sufficient amount to meet our obligations, we may have a reduction in our estimated revenue, which may adversely affect our cash flow and results of operation. Additionally, we may be obliged to acquire energy by entering short-term energy agreements, which are usually more burdensome, to meet our obligations, which may compromise our financial profitability and the quality of our services to consumers. The natural gas blocks in the Parnaba basin and the Seival mine may not reach projected production volumes. Our operations show significant dependence on production of natural gas by our affiliated, OGX Maranho, and on mineral coal by our subsidiary, Seiva Sul Minerao. Our estimates involve future production from natural gas blocks in the Parnaba basin and the Seival coal mine. No assurance may be given that we will reach production volumes as expected. These production volume estimates depend on the following factors: concluding projects on time; accurate estimates of gas and coal resources and reserves; obtaining the equipment required and its performing properly, as well as skilled labor to operate it; soil conditions, including hydrologic conditions; physical characteristics of coal; chemical characteristics of natural gas; accurate indices and estimated costs for producing and processing natural gas; 28
Version: 32
accurate indices and estimated costs for coal mining, extraction, processing and production; obtaining the necessary rights to exploit and produce (gas) and mine (coal), along with licenses, authorizations and concessions; actual production may differ from estimates due to several factors, including the following: lower than initially estimated reserves; faults relating to gas wells and mineshafts and their inclination, faults in processing and treatment units or their equipment; industrial accidents; natural phenomena such as weather conditions, floods, droughts and landslides; interest of our partners (including the majority shareholder of OGX Maranho and partners in the exploration of each block) regarding operation of the natural gas blocks may go against our interests; financial capacity of our Company and its partners to invest in the natural gas blocks and coal mines, which is necessary to enable fund their operation; unusual or unexpected geological conditions; changing costs of electricity and possible power shortages; shortages of key inputs and supplies necessary for operations, including explosives, fuels, chemical reagents, water, spare parts and lubricants; inability to process certain types of gas or mineral ores; strikes and lack of manpower; protests or civil unrest; and government restrictions or regulations or other regulatory framework alterations.
Due to limited historical data and uncertainties affecting the nature, scope and results of our future activities, we may not benefit from experience for the purpose of testing estimates, which would raise the chances of these factors leading to actual results differing from estimates. Our not reaching estimated production volumes of gas or coal may have a material adverse effect on any and all future cash flows, profitability, results from operations and financial condition, particularly if obtaining other sources of natural gas or coal is not possible or feasible. Unfavorable court or administrative decisions may adversely affect our operating results. We are a party to various cases involving civil law, labor, pensions and social security or tax cases, initiated from time to time in the normal course of our business, which involve civil or commercial matters, real estate, environmental, labor, social security or tax issues, among others. In the event that actions lead to unfavorable verdicts in proceedings where the chance of dismissal is regarded as possible or remote, or adversely affect our project deadlines, results from operations may be adversely affected. In the case of administrative proceedings, unfavorable administrative decisions may also adversely affect the schedule for implementing our undertakings. In this context, Amapari Energia S.A., which has its industrial operations in the Municipality of Serra do Navio, in the state of Amap, with a capacity of 23 MW, has suffered an 29
Version: 32
unfavorable administrative decision, with the vacation of a specific area being determined. Amapari Energia S.A. has submitted an application for the area to be regularized, which is now being considered by the Federal Properties Management Superintendence in Amap. If this application is refused, our operating results may be adversely affected. For more information on the relevant proceedings involving the Company and its subsidiaries, see item 4.3 in this Reference Form. Since a significant portion of our assets will be related to providing public services, these assets will not be available to creditors even in the event of bankruptcy and may not be pledged to ensure enforcement of court rulings. A significant portion of our generating assets is related to providing public utility services. These assets would not be available to settle claims in the event of bankruptcy nor may they be pledged to ensure enforcement of judgments against us, since they must be returned to the concession authority pursuant to our concession agreements and legislation. In addition, if there is early termination of concession agreements or permits, the amount of compensation the concession authority will pay us may be below the market value of the assets returned. These limitations may significantly reduce amounts available to shareholders in the event of liquidation and may adversely affect our ability to obtain funding. We have several projects underway or being implemented and their future performance is uncertain. Currently we have several projects being implemented, or which have not reached implementation phase yet, in addition to those that are being built and the prospecting for natural resources. Therefore, we are subject to risks, expenses and uncertainties relating to implementation of our business plan. Implementing projects will depend on our strategic planning and on adopting the right business, financial, environmental, and logistics strategies required for our operations to perform properly. We may be unable to successfully implement these strategies, or to effectively manage the risk inherent to projects, which may adversely affect our revenues. Our performance in the electricity generation industry in Brazil may be negatively affected by increasing competition. In the electricity generation segment, we face increasing competition in ANEELs auctions and for that reason, our development and growth may undergo adverse conditions. The competition in our sector by state and private companies has increased and that may result in pressure from the competition by offering lower rates, which may result in a lower profitability level, which may affect adversely our success in the auctions. In addition, regarding electrical energy trade activities, other electrical energy suppliers may compete with us in offering electrical energy to consumers qualified as free or potentially free consumers. If free consumers decide to buy electrical energy from our competitors, we may be adversely affected, and this may have an impact on our cash flow and results of operation. We are significantly dependent on the performance of certain members of management and losing any of them could adversely affect our ability to implement business strategies and ensure growth. Investors buying our shares rely on the ability, expertise, judgment, discretion, integrity and good faith of our officers. Our performance depends significantly on our senior managements efforts and abilities. Any unexpected loss or departure of any of the most important officers, employees or 30
Version: 32
consultants, especially our CEO, could prejudice our future success and adversely affect our business. Our growth depends on our capacity to attract and maintain highly qualified technical and administrative personnel. We strongly depend on the services of technical personnel, as well as those services provided by members of our administration, to perform our development activities and our project implementation, as well as in the operation of existing assets. If we lose the main members of this staff, we will have to attract and train additional personnel for our technical area. Such personnel may not be available at the moment they are needed or, if they are available, this may have a high cost. Technical personnel have been highly demanded and we compete for this type of workforce in a global market offering these services. Attractive opportunities in Brazil and in other countries may affect our capacity to hire or maintain the talents we need. If we cannot attract and maintain the key staff we need to expand our operations, we may not be capable of managing our business effectively, and this may have an adverse effect on us. Our activities will require substantial capital investments and maintenance costs that we may not be able to afford. To meet estimates for levels of production, construction of power plants, natural gas blocks and our coal mines, and subsequent sale of energy and natural resources, more substantial capital investment will be needed. Among other purposes, we and our partners in the various plants and in the exploration of the natural gas blocks, will require capital for managing acquired assets, acquiring new equipment, maintaining existing equipment in operational conditions, funding operating costs, obtaining property ownership rights, licenses and permits, and to ensure ongoing compliance with environmental regulations and legislation. To the extent that funds generated internally and those arising from loans and financing may be insufficient to fund our capex requirements, we will have to obtain additional funds through debt and / or issuing securities. However, this funding may not be available or, may not be available on acceptable terms. Future funding of our debt, if available, may result in higher debt servicing and amortization costs, higher levels of leverage and diminution of revenues available to fund further acquisitions and growth of business. Moreover, future debt financing may limit our ability to withstand competitive pressures and subject us to more vulnerability in periods of economic crisis. If we are unable to generate cash or obtain sufficient additional capital in the future, we may be forced to reduce or delay capital expenditures, sell assets or restructure or refinance our debt.
Our growth through bids may be adversely affected by future government or political actions related to grants for energy generation plants in Brazil. The Company intends to participate in bids to receive generation grants. In the invitations to bid for generation grant, the Granting Authority imposes certain demands on all participants, including minimum requirements indicating financial stability of the participant and/or its shareholders. We cannot guarantee that we will be capable of meeting all the necessary requirements to obtain new grants or to participate in new bidding processes. The rules for generation plants bidding processes are subject to changes. We cannot guarantee how frequently the bidding processes related to new energy generating plants will actually take place. If such biddings do not occur, or if they are held on terms that are not economically feasible or sufficiently attractive to us and to our controlling shareholder, the expansion and diversification of the current generation park may be adversely affected and consequently, this may lead to a reduction in the market price of the 31
Version: 32
Companys shares. Our financial agreements have specific obligations, among which the obligation to maintain financial indices and restrictions to our indebtedness capacity, and any default due to noncompliance with these obligations may materially adversely affect us. The Company is a party to several financial agreements, with a significant level of indebtedness due to the need for a large volume of financial resources to develop our projects and undertakings. These financial agreements subject us to certain specific conditions and obligations, as a result of which significant adverse changes in interest rates and the currency rate in the Brazilian policy affect us, causing an increase in our future expenses, due to debt charges, or leaving us unable to renegotiate payment terms, which could reduce our net earnings and, consequently, our capacity to honor our contractual obligations. In addition, we could incur additional indebtedness in the future to finance acquisitions or investments, or for other purposes, or for conducting our business transactions, subject to the restrictions applicable to our existing debt. If we incur additional debt, the risks associated with our financial leverage may increase, as well as the possibility that we may not manage to maintain financial ratios or generate sufficient cash to pay the principal, interest and other charges on the debt. Default due to non-compliance with those obligations and conditions, which is not remedied or waived by the creditors, may result in such creditors decision to declare acceleration of maturity of the balance of the corresponding debt, and this may also result in acceleration of debts under other financial agreements, and future amounts to become due (principal, interest, and fines) and that are the subject matter of the respective agreements, may become immediately payable. In the event of regular or accelerated maturity deriving from default of some of our debts, our assets and cash flow may be insufficient to fully pay the balance in our financial agreements, which may have a significant negative effect on our financial condition and results of operation. We cannot guarantee that we shall have the financial resources to carry out our investment plans in full, and lack of access to such resources on satisfactory terms and in sufficient amounts may restrict the future growth and development of our activities, which might adversely affect us. For more information of our indebtedness, see sections 3.7, 3.8 and 10.1 (f) and (g) of this Reference Form. We are liable for any damages resulting from our electrical energy activities, and our insurance policies may be insufficient to cover such damages. According to the Brazilian legislation, our Company is liable for damages deriving from electrical energy generation activities. In addition, our Company may be adversely affected by damages caused by third parties due to shutdowns or disruptions to its activities not attributed to a specific member of the ONS. We cannot guarantee that our insurance policies will fully, or even partially, cover potential damages deriving from our activities, which may have an adverse effect on the Company. We may not succeed in retaining the buildings and areas in which our plants are located or are under development, which may adversely affect our activities, financial condition, and operating results.
We have a large portfolio of thermal energy projects, three of which are developed in own areas (Itaqui, Seival TEP, and Parnaba) and the remainder developed in areas occupied under lease, freelease, easement, right of use, usufruct, or surface (such as Energia Pecm, Pecm II, Amapari, Sul TEP, Seival TEP, Tau, Au TEP, among others). We have no means of 32
Version: 32
guaranteeing that such areas will not be subject to expropriation, or that no early termination of the contracts legitimizing their occupation will take place. If any of these situations should arise, our financial condition may be adversely affected, possibly causing negative effects on our business and operating results. (b) Risks relating to our controlling shareholder or group
Our controlling shareholders may make certain decisions in relation to the business without participation of all shareholders and that may conflict with the interests of all shareholders. On the date of this Reference Form, the Controlling Shareholders hold voting powers sufficient for the following purposes: designating a majority of members of our board of directors; casting the deciding vote in relation to altered control of our company even if such alterations do not reflect the best interests of shareholders; casting the deciding vote in relation to strategic merger with another company that could bring significant results for companies involved in the merger; restricting the opportunity for shareholders other than the controlling shareholders to receive the difference between carrying value and the amount paid for their shares in any corporate restructuring, including absorption, merger or demerger, and influence our companys dividend policy. Risks related to our shareholders
(c)
We cannot guarantee that shareholders will be paid dividends in the future. Under our bylaws, shareholders are entitled to an annual mandatory dividend of not less than 25% of net income, to be decreased or increased by the following amounts: (i) the amount allocated to legal reserve; and (ii) the amount allocated to the contingency reserve and reversal of reserves made in prior years. Except for the mandatory minimum dividend required under the Law of Corporations and our bylaws, any future decision regarding payment of dividends will be made on a discretionary basis. The decision to distribute dividends will depend on profitability, financial condition, investment plans, contractual limitations and restrictions imposed under applicable law, including regulations issued by the CVM, among other factors. Additionally, our ability to pay dividends depends on our ability to generate profits and to absorb accumulated losses. We cannot guarantee that shareholders will be paid dividends in the future. Brazilian stock market volatility and illiquidity may substantially limit investors ability to sell our shares at the desired price and time. Investment in securities traded in emerging markets such as Brazil, often involves higher risk than other global markets, and such investments are in general seen as more speculative. The Brazilian securities market is substantially smaller, less liquid, more concentrated and may be more volatile than other major stock markets worldwide. Any outflow of foreign capital from Brazil in times of economic crisis may affect share prices of companies listed on the BM&FBOVESPA. The market price of our shares may also be affected by various factors unrelated to our performance, such as economic crises, changing interest rates, exchange-rate controls and restrictions on remittances abroad, exchange-rate variations, inflation, liquidity in the domestic 33
Version: 32
financial and capital market, lending, tax policy and tax regime or other political, social and economic events. Additional funding through a share offering could dilute the equity interest of investors. In the future, we may obtain funding through public or private issues of debt securities, whether or not convertible into shares, or by issuing shares. Under the Law of Corporations, additional funding from shares or securities convertible into shares may be obtained with the exclusion of preemptive rights of our shareholders, which may lead to the dilution of such shareholders equity interests. The interests of company officers, and employees in some cases, may become excessively linked to our share prices, since they may be granted options to purchase or subscribe to our shares. The purpose of our stock option program is to enable our officers and employees or those of other companies under our control, subject to certain conditions, to acquire our shares for the following reasons: (a) encourage better management of the company and undertakings under our direct or indirect control; (b) attract, motivate and retain highly qualified executives on our staff; and (c) make our companies and other EBX group companies more attractive. The possibility of our managers and employees receiving as part of their remuneration, options to purchase or subscribe to our shares at a strike price below market price, may lead such officers and employees to have their interests excessively linked to the price of our shares to the detriment of their long-term goals, which may negatively impact our business. (d) Risks related to our subsidiaries and affiliates
Risks related to our subsidiaries and affiliates are the same as those related to our company. (e) Risks related to our suppliers
We signed Engineering, Procurement and Construction (EPC) contracts for the construction of projects with Power Purchase Agreements (PPAs). If the EPC counterpartys services do not conform to a minimum standard of quality, or do not meet project specifications, our financial condition and results of operations may be adversely affected. We signed energy supply agreements for various of our projects before they are completed and before their energy generation capacity is installed. For construction of these projects, we enter into EPC contracts, which must follow the specifications of each project. Failure to comply with such technical specifications, not meeting levels of quality for services provided, or delays affecting construction schedules provided for in our EPC contracts may adversely affect our financial condition and results of operations. We rely on suppliers of domestic and imported equipment and hire outsourced services for the construction, operation and maintenance of our projects. If equipment purchased or used by suppliers, or services provided are not delivered in such a way as to meet specifications and minimum quality levels for each project, our results of operations may be adversely affected. Key equipment for construction of our projects, or their operation and maintenance is purchased 34
Version: 32
by contracting Brazilian and / or international companies that are recognized in their fields. Services supplied to us may not meet quality requirements stipulated, which may lead to our failing to comply with conditions stated in our concession agreement and may cause accelerated wear and tear of electric generating assets, or other problems resulting in additional costs and affecting cash flows of projects and our company, which may adversely impact our financial condition and operating results. The above may take place in case of unforeseen disruption or suspension of contracts for supply of equipment or services. In the case of our suppliers of products and services being hit by cyclical, administrative or financial impacts affecting delivery of products or services as agreed, our financial condition and results of operations may be adversely affected. Our company engages and depends on services and products provided by certain companies. Conjunctural, administrative or financial impacts may involve these companies and definitively or partly affect delivery of products or services as agreed, which may lead to impact on operating results from our projects, due to possible suspension or disruption of supplies, or to difficulty in engaging other suppliers. We may be unable to ensure we have all fuel required to generate electricity at our thermoelectric plants, or be unable to ensure viable conditions for operating them, in which case, our financial condition and results of operations may be adversely affected. Supplies of fuel may not be satisfactory, or may be technically impracticable due to production shortfalls and finding another source of fuel may be uneconomical. Several variables may contribute to this possibility, but mainly factors related to the risk of operating and producing the coalmine and natural gas exploration blocks, as mentioned in item (a) above, and the logistical risks of transporting fuel from its production area to the thermoelectric plants. In these cases, our financial condition and results of operations may be adversely affected. (f) Risks Related to Our Customers
We may be liable for losses and damages caused to third parties as a result of failures in electricity generation at our plants, or outages or disruption that cannot be attributed to any other electric industry agent, and insurance may be insufficient to cover such losses and damages. We may be held liable for (i) loss or damage to third parties due to failures in the operation of our plants causing outages or disturbances for the distribution and / or transmission system or (ii) outages or disruption that cannot be assigned to any identified electric industry agent, except in cases of force majeure. In this case, compensation amounts shall be allocated in the following proportions: 60% distribution agents, 20% generation agents and 20% transmission agents, which could lead to materially and adversely affect the conduct of our business, operating results and financial condition. Our ability to receive payments owed by clients may be adversely affected in case of deterioration of such clients ability to pay Receivables from our investees in the generation and trading of electrical energy depends on the continuous creditworthiness of their clients, control of risk and ability to charge amounts due. If these clients ability to pay deteriorates, this may adversely affect our financial condition and operating results.
35
Version: 32
(g)
Risks Relating to Sectors of the Economy in which We Operate
Our market risk management strategy may be ineffective. We are exposed to normal market risks, such as fluctuating interest rates, exchange rates and commodity prices. Our hedge transactions, which may also limit potential benefits we could otherwise enjoy if commodity prices were to rise. In addition, we may decide not to hedge market risks, or we may use other risk management practices, or such types of transaction may not be available. Accordingly, in the event our hedging strategy fails to successfully minimize cash flow exposure to said fluctuations, and in the event we fail to identify correlations between various market risks to which we are subject, our financial condition may adversely be affect. Demand for electricity in Brazil may not grow, or may grow less than we estimated, or may be supplied by other electric generating projects. Our investments in electric generating projects were based on expected growth of demand for electricity in the coming years in Brazil. However, demand may not grow or may grow less than we initially estimated. In addition, any growth of demand, whether less than, equal to, or greater than the increase we estimated, may be met by other electric generating projects that are now operating or will come on stream in the future. In this case, estimated revenue from our projects may be reduced, thus adversely affecting our results. How our electric generating projects yet to be contracted will materialize depends on the scenario for future electricity prices, which may differ significantly from the current market consensus. Our investments in electric generating projects were based on future electric- price scenarios that may not occur or may be largely unfavorable for new investments providing attractive returns. In this case, estimated revenue from our projects may be reduced, thus adversely affecting our results. (h) Risks Relating to Regulation of Sectors in which we operate
Extensive governmental legislation and regulation and changes in regulations for the electric sector may affect our business and results of operations. Our activities and those of our competitors are regulated and supervised by the National Agency of Electrical Agency - ANEEL, which implements guidelines from the Ministry of Mines and Energy, the federal government body responsible for Brazils energy policies. Brazils electric sector institutions have historically had a substantial degree of influence on their business, including energy production, for which dispatch is centralized by the National Electric System Operator (ONS). The federal government has brought in new policies for the energy sector through Law 10488 of March 15, 2004, which introduced the New Electric Industry Model and altered guidelines for industry agents. Any regulatory measure may have significant impact on our activities and adversely affect our results. Among the regulatory changes promoted in the industry, we highlight (i) the creation of the Chamber of Electrical Energy Trade (CCEE) and of new sectoral bodies; and (ii) the changes in 36
Version: 32
the Ministry of Mines and Energy - MME and the National Electricity Agency - ANEEL competencies. According to the Brazilian legislation, ANEEL is authorized to regulate several aspects of the business of electrical energy generation, transmission, and distribution concessionaires, in the overall electric industry, including investment needs, incurring additional expenses, and tax and price calculation (except for the prices of electrical energy in the free market), as well as the limit to passing on the prices of energy purchase to tariffs charged by the concessionaires. The constitutionality of the New Industry Model Law was challenged before the Federal Supreme Court through direct actions for unconstitutionality. On October 11, 2006, the Federal Supreme Court denied the provisional measures of the direct actions for unconstitutionality, stating that, in principle, the New Industry Model Law does not violate the Federal Constitution. The merits of the direct actions for unconstitutionality are pending judgment, and on January 6, 2009, the Office of the Attorney General of the Republic ruled in favor of dismissing the request. Should the New Industry Model Law be declared unconstitutional, the electric power sector agents will be adversely affected. The full effect of the reforms introduced by the New Industry Model Law and its continuity, as well as the final result of the action before the Federal Supreme Court and future reforms in the electric power industry regulation are difficult to predict, and they may have an adverse effect on our business and results of operation. Our main commercial activities, the implementation of our growth strategy, and the running of our business may be adversely affected by government actions, among which: (a) changes in the legislation applicable to our business; (b) disruptions and/or changes in federal concession programs; and (c) imposition of stricter criteria to qualify for future bids ANEEL may apply penalties against us or intervene in authorizations that we may be awarded for breach of obligations stipulated in concession agreements, permits and industry laws and regulations. ANEEL may apply penalties for breach of any stipulation in our concession agreements or permits. Depending on the severity of the breach, pursuant to current legislation such penalties may include: cautions; fines per breach of up to 2% of our revenues for the year immediately preceding the current period on the date of violation; embargoes on construction of new facilities or equipment; restrictions on operating existing facilities and equipment; temporary suspension from bidding processes for new concessions or permits; or forfeiting concessions or permits.
Without prejudice to the above-mentioned penalties, ANEEL may also intervene temporarily in concessions or permits awarded us to ensure proper operation of generating structure and compliance with applicable laws and regulations. Any of the above listed penalties, or ANEELs intervention in concessions or permits we may be awarded, could have a materially adverse effect on our business, operating results and financial condition, and on the market price of our shares. We cannot guarantee whether our authorizations will be renewed. 37
Version: 32
We conduct our electrical energy generation activities based on authorizations granted by ANEEL, which are valid for 35 years. The permits may be revoked in the event of material loss in the development of authorized activities and/or in the event of holders non-compliance, especially, in the event of: I failure to comply with schedules, obligations and charges arising from the authorization; II failure to pay the amount arising from the penalty imposed on the holder; III failure to comply with the notice of inspection to regulate the operation of the authorized venture; IV trading of electrical energy not in compliance with the provisions of the legislation, specific rules and authorization act; and V termination of the agent of the Electrical Energy Trading Chamber CEEE for non-compliance, among others. Additionally, we cannot guarantee whether our authorizations will be renewed or new authorizations will be granted upon the expiration of current terms. If these authorizations are not renewed or granted, or renewed or granted under unfavorable conditions for our Company, our business and operating and financial results may be adversely affected. Like the electricity sector, the natural gas and mining sectors are also subject to government regulation and any changes in the latter may affect our business and results of operations. Our activities in the mining and natural gas sectors are subject to regulations applied by local authorities, therefore regulatory changes may materially affect our projected results. Under the terms of the Brazilian legislation, the Brazilian Government is the owner of all mineral deposits and natural gas reserves in Brazil, and the concessionaire has the title only to the ore and/or natural gas it produces. The Company depends on natural gas to generate electrical energy in some of its ventures, which are supplied by certain concessionaires duly licensed by the Brazilian Government. In addition, the National Petroleum Agency (ANP) and the National Department of Mineral Deposits (DNPM) regulate and supervise the natural gas and mining sector, respectively, granting concessions for the production of natural gas. Such concessions impose several obligations on the concessionaires, including concessionaires from which the Company obtains the natural gas and mineral coal for the generation of electrical energy, and in the event any such obligations are defaulted, the ANP and/or DNPM are entitled to terminate the concession agreements. Thus, in the event the Brazilian Government limits or prevents such concessionaires with which the Company has a relationship from exploiting these natural gas or mineral coal reserves or in the event the ANP and DNPM impose restrictions that interrupt the natural gas and/or mineral coal supply to the Company and its controlled companies, its capacity to generate revenue may be adversely affected, causing a significant adverse effect on the result of its operations and on its financial condition. Changes in environmental laws and regulations may adversely affect the business of the companies operating in the electricity industry, including Our Company. Companies operating in the electricity industry, in particular generation companies, are subject to strict federal, state and local environmental legislations regarding, among other things, air emissions and intervention in protected area. Such companies need licenses and permits from government agencies to conduct their activities. In the event of breach of or non-compliance with such laws, regulations, licenses and permits, companies may suffer administrative sanctions such as fines, suspension of activities, cancellation and revocation of licenses or permits, and, in certain cases, they may be subject to criminal sanctions (including its management). The Office of the Federal Prosecutor may file a civil investigation and/or a public civil action seeking compensation for any damage caused to the environment and third parties. Government agencies or other 38
Version: 32
authorities may also issue new stricter rules or adopt more restrictive interpretations of existing laws and regulations, which may require electricity companies to use additional resources in environmental remediation, including in obtaining environmental permits for facilities and equipment not previously subject to environmental licensing. Government agencies or other authorities may also significantly delay the issuance of licenses and permits required for the development of electricity companies, causing delays in project implementation schedules. Any action in this direction by government agencies may adversely affect electricity business and create a negative effect on our business and results. The occurrence of environmental damages involving our activities may subject us to paying substantial environmental remediation costs, including indemnification and penalties, which could adversely affect our business and the market value of our shares. The activities of the electricity sector may cause significant environmental impacts and damages. Federal laws impose strict liability to those who directly or indirectly cause environmental degradation and therefore the duty to remediate or compensate the damage caused to the environment and to third parties affected, regardless of willful misconduct or fault. Federal laws also provide for disregard of corporate veil of the polluting company, holding managers personally liable, to enable compensation of the damages caused to the environment. As a result, the Company, its controlling shareholders and managers may be required to bear the cost of environmental remediation. The payment of substantial environmental indemnifications or relevant expenses incurred to fund environmental remediation may prevent, or lead our Company to postpone or redirect investment plans in other areas, which may adversely affect our business and operations. (i) Risks relating to our foreign operations
We are subject to operational risks relating to international operations. In addition to Brazil, we are developing a project that is under analysis and review in Chile, which is being analyzed and reviewed. Therefore, the risks referred to in item (a) above are also applicable to ENEVAs foreign operations, which involve risks relating to construction of thermoelectric plants, risks related to exploitation of natural resources, logistical risks, risks related to meeting construction deadlines, licensing risks, and others. If one or more of the above-mentioned risk factors should materialize, we may not reach our strategic objectives in these countries or in our international operations as a whole, which may adversely affect our operating results and financial condition. We are subject to social, political and economic risks in relation to our international operations. Our international operations include those in countries in which there may be political, economic or social instability. The operating results and financial condition of our subsidiaries in these countries may be adversely affected by fluctuating economic conditions, political instability and local government measures, in addition to other risks including: controls on currency exchange and prices; restrictions on exports and imports of natural resources; local currencies fluctuating against the BRL or USD; 39
Version: 32
higher rates of export tax, income tax or royalty payments; or unilateral institutional (government) or contractual alterations, including controls and limitations on investments in new projects.
If one or more of the above-mentioned risk factors materializes, we may not achieve our strategic objectives in these countries or our international operations as a whole, which may adversely affect our operating results and financial condition.
40
Version: 32
4.2 - Comments on expected alterations of exposure to risk factors

Our policy is to continuously monitor risks related to our operations, and macroeconomic or industry-level changes that may affect our activities. We have not presently identified any increase or decrease of exposure to the risks factors mentioned in item 4.1.
41
Version: 32
4.3 Non-confidential and relevant legal, administrative or arbitration proceedings
On April 30, 2013, the Company and its parent companies were party to 108 court proceedings of which 34 are civil proceedings, 69 are labor claims and 5 are tax claims, all of them involving an approximate amount of R$22 million, assessed by external attorneys as not bearing a likely risk of loss, and, therefore, no provision for contingency was created. The Company and its parent companies are also party to 51 administrative tax proceedings, labor claims and environmental proceedings that involve an approximate amount of R$28 million. As of the date of this Reference Form, our subsidiaries were party to 5 administrative proceedings filed by National Electric Power Agency. These proceedings involve, among other matters, failure to comply with the schedule for implementation of generation units, failure to meet dispatch requests made by the Electric System National Operator and non-compliances related with plants (e.g. no identification and signs and lack of information in monthly reports filed by our Company at National Electric Power Agency). In the scope of these administrative proceedings for inspection, National Electric Power Agency may impose penalties upon issuance of an assessment notice. When applying the penalty, National Electric Power Agency will observe the dosimetry criteria, considering the scope and severity of the breach, potential damages resulting from this breach, the advantage obtained by the breaching party and the existence or not of recurrence. Additionally, all administrative proceedings in question must observe the principles of broad defense and adversary proceeding, so that our Company may have the opportunity to submit justifications and exclusions of liability. The Company and its parent companies are parties to lawsuits and/or administrative proceedings that, in the opinion of the Company, are individually considered relevant from a financial perspective as they involve amounts above R$10,000,000.00 or matters that, if decided against the Company, may affect its operations or image, as we show below:
Tax Proceedings
On April 30, 2013, the Company and its parent companies are party to 5 court tax proceedings and 9 administrative tax proceedings. The amount involved in court proceedings totals approximately R$71 thousand. Of the five court proceedings, the Company and its subsidiaries are plaintiffs in two of them. The administrative proceedings, in turn, total approximately R$27.4 million. In all of them the chances of loss range from possible to remote. For this reason, the Company recorded no provisions for the respective amounts. The subject matters of the most significant
42
Version: 32
proceedings in terms of amounts mainly involve the payment of the Goods and Services Circulation Tax - ICMS.
Administrative Proceeding 28730.024452 - Assessment Notice No. 505/2011 a. Court b. Court c. Filing Date d. Parties to the Proceeding State Revenue of the State of Amap Lower administrative court November 11, 2011 Plaintiff: State Revenue of the State of Amap Defendant: Amapari Energia S.A. e. Amounts, Goods or Rights in Dispute f. Principal Facts R$14,341,575.39
Collection of the Goods and Services Circulation Tax - ICMS due to alleged lack of payment of tax, due to the improper recognition of the Goods and Services Circulation Tax - ICMS credit accumulated, resulting in an outstanding tax debt for April 2009. Further, a fine was imposed for failure to comply with an accessory obligation. On November 11, 2011, we learnt about the issue of the notice and, on December 12, 2011, we filed a challenge. The case records have been waiting for a decision by the judging body since then.
g. Chances of Loss h. Analysis of the Impact if the Case Is Lost i. Provisioned Amount, in the Case of Provision
Possible in the administrative sphere and remote in the legal sphere. Only the financial impact referred to in item e. A loss in this proceeding may impact our results in the year this amount becomes payable. Not applicable because the Company does not make provisions when the chances of loss are possible and remote.
Administrative Proceeding No. 1/000364/2011 - Assessment Notice N 1/201022812 a. Court b. Court c. Filing date d. Parties to the Proceeding State Revenue of the State of Cear Second administrative court January 29, 2011 Defendant: MABE Construo e Administrao de Projetos Ltda. Plaintiff: State of Cear e. Amounts, Goods or Rights in Dispute f. Principal Facts R$10,593,732.69
January 26, 2011: Collection of formal fine for failure to comply with ancillary obligation consisting of receipt of goods from other states with tax documentation lacking transit stamp. August 6, 2012: Assessment notice still with the lower court. On September 20, 2012, we have filed a voluntary Appeal. The case records have been waiting for a decision by the judging body since then. Remote Only the financial impact referred to in item e. A loss in this proceeding may impact our results in the year this amount becomes payable. Not applicable because the Company does not make provisions when the
g. Chances of Loss h. Analysis of the Impact if the Case is Lost i. Provisioned Amount, in the
43
Version: 32
Case of Provision
chances of loss are possible and remote.
Civil Proceedings
On April 30, 2013, the Company and its subsidiaries were party to 34 civil lawsuits and 23 administrative civil proceedings. The amount involved in court civil proceedings totals approximately R$18 million and, out of the 34 civil lawsuits, we and our subsidiaries are plaintiffs in eight. The amount involved in administrative civil proceedings totals approximately R$832 thousand. In all proceedings, the chances of loss range from possible to remote and, therefore, we did not record a provision for these amounts. Among the civil proceedings to which the Company is a party, no matter is the most representative.
Ordinary Proceeding No. 2008.34.00.032541-0 a. Court b. Court c. Filing Date d. Parties to the Proceeding 3 Federal Lower Court of the Judicial District of the Federal District Lower court October 14, 2008 Plaintiff: Amapari Energia S.A. Defendant: National Electrical Power Agency e. Amounts, Goods or Rights in Dispute f. Principal Facts Fuel cost recovery mechanism, CCC-ISOL.
rd
Amapari Energia filed a lawsuit with a request for provisional protection against the National Electric Power Agency, because after granting the authorization as Independent Power Producer, on August 05, 2008, the National Electric Power Agency handed down a decision denying the recovery mechanism related to Fossil Fuel Consumption Account of Isolated Systems, a tax created by Law No. 5899 of July 5, 1973, further amended by Law No. 12.111 of December 9, 2009 (CCC-ISOL) to Amapari. On October 29, 2008, the request for provisional protection was granted. On January 29, 2009 Amapari filed a petition requesting the immediate execution of the granted protection, with the determination that an official note be issued to Eletrobrs for the inclusion in the CCCISOL. On July 02, 2009, Amapari filed a petition stating (i) loss of a subsequent interest in the lawsuit due to the acknowledgment on the part of the National Electric Power Agency that in a recent decision of its Executive Board authorized the inclusion of the thermoelectric power plant, or UTE, in the CCC-ISOL; and (ii) the noncompliance with the provisional decision. On July 15, 2009, a decision was handed down declaring the default of the National Electric Power Agency. On July 20, 2009, Amapari filed a request to produce accounting evidence, and on August 19, 2009 the National Electric Power Agency filed a petition informing that the evidence present is sufficient for the solution of the demand and requesting the reconsideration of the decision in which its default was declared. On August 27, 2009, Amapari filed a petition repeating the request for the release of the collateral corresponding to
44
Version: 32
the months that are no longer the subject-matter of the case and requesting the official issue to Eletrobrs that the inclusion of the thermoelectric power plant, or UTE, in the CCC-ISOL mechanism comprises the fuel purchases made since November 11, 2008, and on October 02 2009, the National Electric Power Agency filed a petition stating that it did not agree with the request of partial collateral release. On October 22, 2009 Amapari repeated the request for collateral release, and on October 26, 2009, the request of Amapari was dismissed. Amapari then filed a motion for clarification on November 09, 2009. On March 01, 2010, a decision was handed down rejecting the Motion for Clarification. On May 13, 2010, a decision was handed down of the bill of review that grants the provisional protection to release Amapari form the obligation to maintain the collateral offered by it in the original pledge. On May 28, 2010, a decision was handed down serving the parties of the decision handed down by the Regional Federal Court st of the 1 Region that released Amapari from maintaining the collateral. On July 01, 2010, a petition of the Prosecution Office was filed sending copies of the official communications 392/PJSN/2008 and 144/PJSN/2010 and of the Partnership Instrument executed in 2008 with Amapari. On July 27, 2010, a complied warrant was entered of record by means of which the National Electric Power Agency was summoned to comply with the court decision releasing Amapari from the obligation to maintain the offered collateral. On September 30, 2010, a petition of the National Electric Power Agency was entered of record explaining that the release makes the action of the authority dispensable. On September 30, 2010, a petition of the National Electric Power Agency was entered of record explaining that the release makes the action of the authority dispensable. On November 09, 2010, a decision was published determining that the plaintiff file a statement on the petition of the National Electric Power Agency. On November 12, 2010, a petition was filed by Amapari informing that it was aware of the statement of the National Electric Power Agency, as well as requesting the continuation of the case with the conduction of an expert analysis. On May 26, 2011, a decision was published that dismissed the request for an expert analysis made by Amapari, on grounds that there is no claim for damages in the complaint. On May 31, 2011, a motion for clarification was filed by Amapari, indicating an omission in the decision that dismissed the request for an expert analysis for not having regarded the fact that the order that the National Electric Power Agency pay damages makes the request expressed in the complaint dispensable, in view of the fact that it is a conversion of the affirmative covenant concerning the period in which the authority did not include the Thermoelectric Power Plant Serra do Navio in the CCC-ISOL, in spite of a decision in that sense. On August 08, 2011, the motion for clarification was rejected. On July 25, 2012, a decision was published that the parties should file their final briefs. On November 09, 2012, the records with the final briefs of Amapari and the National Electric Power Agency were sent to the judge, to be taken under advisement. g. Chances of Loss h. Analysis of the Impact if the Case Is Lost Possible In the event the case is lost, Amapari would have to reduce the outstanding balance (receivable) in the amount of R$24,6 million, for the result (loss). Not applicable because the Company does not make provisions when
i. Provisioned Amount, in the
45
Version: 32
Case of Provision
the chances of loss are possible.
Action of trespass No. 9236-03.2012.8.10.0001 a. Court b. Court c. Filing Date d. Parties to the Proceeding 2nd Lower Civil Court of the Judicial District of So Lus MA Lower court March 4, 2012 Plaintiff: Lurdimar Santos Magalhes Defendant: ENEVAS.A. (UTE Porto do Itaqui Gerao de Energia S.A.) e. Amounts, Goods or Rights in Dispute f. Principal facts Area of 2500 square meters located at Estrada de Porto Grande No. 6, close to Vila Maranho, where ENEVA was to construct an electricity transmission tower. The Plaintiff filed an action of trespass against ENEVA S.A. (UTE Porto do Itaqui), alleging that she had undisturbed and peaceful possession of Estrada de Porto Grande No. 06, close to Vila Maranho. She alleges that ENEVA constructed an electricity transmission tower occupying 40 square meters, in addition to the transmission network area where nothing may be planted. She demanded that the defendant be sentenced to pay an indemnity in the amount of R$50,000,00 (fifty thousand Reais). ENEVA (UTE Porto do Itaqui) filed its defense on September 4, 2012. The plaintiff was notified on October 18, 2012, to file a reply, but has not done so. The case records were sent to the judge on December 6, 2012. Possible Only the financial amount in dispute. Not applicable because the Company does not make provisions when the chances of loss are possible.
g. Chances of Loss h. Analysis of the Impact if the Case is Lost i. Provisioned Amount, in the Case of Provision
Action for damages No. 36066-74.2010.8.10.0001

a. Court b. Court c. Filing Date d. Parties to the Proceeding 8th Lower Civil Court of the Judicial District of So Lus MA Lower court October 25, 2010 Plaintiff: Maria do Socorro Santos and others Defendant: UTE Porto do Itaqui Gerao de Energia S.A. e. Amounts, Goods or Rights in Dispute Request for interlocutory relief for defendant to suspend construction works on the Itaqui Thermoelectric Plant while this claim is in progress, on penalty of a daily fine to be fixed by the Judge. Payment of material damages amounting to R$1,415,000 (one million four hundred and fifteen thousand Reais) and moral damages to be fixed by the Judge. The plaintiffs filed an action for damages with a claim for interlocutory relief owing to the alleged occupation by the defendant of an area belonging to the plaintiffs. They claim (i) an interlocutory relief ordering the defendant to suspend work on the Itaqui Thermoelectric Plant while this case is in progress, on penalty of a daily fine to be fixed by the Judge; (ii) that the
f. Principal facts
46
Version: 32
defendant be sentenced to pay an amount of R$1,415,000 (one million four hundred and fifteen thousand Reais) for material damages, plus moral damages to be fixed by the Judge. The defendant filed its defense on February 4, 2011. The plaintiffs filed a petition on September 1, 2011, reiterating the request for an injunction to be granted for the removal of the transmission line from the land supposedly belonging to the plaintiffs. The case records were sent to the judge on September 5, 2011. g. Chances of Loss h. Analysis of the Impact if the Case is Lost i. Provisioned Amount, in the Case of Provision Possible Only the financial amount in dispute. Not applicable because the Company does not make provisions when the chances of loss are possible.
Action for Repossession No. 36.445/2009

a. Court b. Court c. Filing Date d. Parties to the Proceeding 3rd Lower Civil Court of the Judicial District of So Lus MA Lower court September 30, 2009 Plaintiff: Companhia Operadora Porturia do Itaqui - COPI (COPI) Defendant: UTE Porto do Itaqui Gerao de Energia S.A. e. Amounts, Goods or rights in Dispute f. Principal facts Possession of land in the Industrial District of So Lus MA and sentencing of defendant to pay damages due to the time the defendant occupied the property. The Plaintiff filed an action repossession claiming damages for the purpose of being granted an injunction for repossession of land measuring 88,124.75 square meters in the Industrial District of So Lus MA and sentencing of defendant to pay damages due to the time the defendant occupied the property. The defendant filed its defense on April 20, 2010. The injunction requested by COPI was denied in a ruling dated September 1, 2011, since the plaintiff had not proved possession, a legal requirement of article 927, paragraph I, of the Civil Procedure Code. This decision was appealed (Case No. 0005318-28.2011.8.10.0000) by COPI, and the suspensive effect was denied in a ruling rendered on October 21, 2011, by Judge Jaime Ferreira de Arajo. On January 12, 2012, the Court of Justice of the State of Maranho ruled against COPIs appeal. The plaintiff submitted a special appeal against this decision, which was not accepted by the President of the Court of Justice of the State of Maranho, in a final and unappeallable decision. The case was sent to the judge on November 1, 2012, and is probably pending trial. Possible Only the financial amount in dispute is R$88,124.75. Not applicable because the Company does not make provisions when the chances of loss are possible.
Action for Annulment of Public Deeds of establishment of easement No. 37.156/2009

a. Court 4th Lower Court of the Public Treasury of the Judicial District of So Luis MA
47
Version: 32
b. Court c. Filing Date d. Parties to the Proceeding
Lower court December 1, 2009 Plaintiff: Maria Cristina dos Santos Bittencourt et al Defendant: UTE Porto do Itaqui Gerao de Energia S.A. et al
e. Amounts, Goods or rights in Dispute f. Principal facts
Rights related to the deed of establishment of easement The action was filed on December 1, 2009. On February 11, 2010, an order was issued granting free legal aid and determining that the defendant be summoned to file a defense. Case records sent to the judge on July 21, 2010, in view of the plaintiffs filing for interlocutory relief. Possible Only the financial amount in dispute, R$255,000,00. Not applicable because the Company does not make provisions when the chances of loss are possible.
Action of trespass No. 5923.34.2012.8.10.0001

a. Court b. Court c. Filing Date d. Parties to the Proceeding 1st Lower Civil Court of the Judicial District of So Lus MA Lower court February 1, 2012 Plaintiffs: Jos Ribamar Figueiredo and Emlia Campos Figueiredo Defendant: UTE Porto do Itaqui Gerao de Energia S.A. e. Amounts, Goods or rights in Dispute f. Principal facts Area where the Thermoelectric Plant is to be built, which had supposedly been occupied by the defendant, and sentencing of the latter to pay damages. The plaintiffs filed this action claiming to be the owners of an area located in Vila Maranh, where they allege that the defendant built 3 electricity transmission towers without their authorization, violating their rights of ownership. They thus allege that the defendant trespassed on their property. They claim that the defendant be sentenced to vacate the land and to pay damages. The defendant filed its defense on May 25, 2012. The plaintiffs filed their reply on August 27, 2012. Preliminary hearing to be held on August 21, 2013, at 10.30 a.m. Possible Only the financial amount in dispute is R$1,000.00. Not applicable because the Company does not make provisions when the chances of loss are possible.
Action for Repossession No. 15.042/2009

a. Court b. Court c. Filing Date 5th Lower Civil Court of the Judicial District of So Lus MA Lower court May 27, 2009
48
Version: 32
d. Parties to the Proceeding
Plaintiff: Florindo Mota dos Santos Defendant: ENEVAS.A.
e. Amounts, Goods or rights in Dispute f. Principal facts
Area used by the UTE Porto do Itaqui in constructing the Thermoelectric Plant. On April 16, 2012, a ruling was rendered partially granting the Special Appeal and denying the special appeal filed by Florindo (published on April 18, 2012). The plaintiff filed an appeal in the case records. On May 30, 2012, we filed our appellees brief. On June 6, 2012, the case records were sent to the Superior Court of Justice for the special appeal submitted by the plaintiff to be examined. In the Court of Appeals, the proceeding was distributed to Justice Isabel Gallotti of the Fourth Division and is pending examination since June 18, 2012. Remote Only the financial amount in dispute of R$10,000.00. Not applicable because the Company does not make provisions when the chances of loss are remote.
Extrajudicial Execution Instrument No. 49046-19.2011.8.10.0001 (49.354/2011)

a. Court b. Court c. Filing Date d. Parties to the Proceeding 1st Lower Civil Court of the Judicial District of So Lus MA Lower court October 20, 2011 Plaintiff: Alberto Mendes de Arajo and others Defendant: UTE Porto do Itaqui Gerao de Energia S.A. e. Amounts, Goods or rights in Dispute f. Principal facts Properties assigned by the defendant to the plaintiffs upon expropriation of land located in the area where the Thermoelectric Plant will be built. The plaintiffs filed this execution alleging that when the expropriation took place from the former residents of the said village, an agreement was signed stating that the Thermoelectric Plant Porto de Itaqui would give each resident a property worth R$48,000,00 (forty-eight thousand Reais) as an indemnity. They state, however, that the amount shown in the deeds for these properties is R$28,000,00 (twenty-eight thousand Reais). They therefore request that the defendant be sentenced to pay the difference, which comes to a total amount of R$400,161,00 (four hundred thousand one hundred and sixty-one Reais). A motion to stay execution was filed on September 21, 2012, and was sent to the judge. The motion to stay execution defended the thesis of mere material error in registering the property, and it was stated that the notary office was correcting the deeds to show the correct value. On November 28, 2012, a petition was filed requesting the corrected property certificates to be filed and the proceeding to be cancelled without prejudice since the proceeding was no longer of interest. Pending examination. Possible Since the property certificates have been corrected, the action will lose its purpose. Not applicable because the Company does not make provisions when the chances of loss are possible.
49
Version: 32
50
Version: 32
Environmental
As of April 30, 2013, the Company and its subsidiaries were party to 10 legal proceedings related to environmental issues. In these cases, it is not possible to measure the real impact on the Companys financial and equity condition in the event of loss, since the majority of these proceedings involve questions about the environmental licenses granted to the Itaqui and Energia Pecm thermoelectric plants. In all these proceedings, the probability of loss is ranked as possible or remote, and so no provision is made for the corresponding amounts. We are also party to civil investigations into supposed irregularities in the licensing process for our operations. On the basis of information produced during a civil investigation with no assigned value, if applicable, the Prosecutors Office may propose the execution of a Term for Adjustment of Conduct on environmental obligations, as well as file a Public Civil Action, for example, for damages or the regularization of the environmental process, which may involve significant amounts.
Public-interest Civil Action No. 2008001260819 a. Court Single Lower Court of the Judicial District of So Gonalo do Amarante State of Cear Lower court April 17, 2008 Plaintiff: Public Prosecution of the State of Cear Defendants: ENEVA S.A, Pecm II and State Office for Environment SEMACE e. Amounts, Goods or Rights in Dispute f. Principal Facts Environmental licenses granted for the Energia Pecem Thermoelectric Power Plant Public-interest civil action in which the annulment of the environmental licenses granted to the Energia Pecm Thermoelectric Power Plant is requested. Reply and objection of the amount in dispute entered of record by ENEVA on June 04, 2008. Decision handed down on March 04, 2009, admitting such objection to change the amount in dispute to R$2,000,000.00. Against such decision a bill of review was filed by ENEVA and by the Office of the Public Defender of the State of Cear that are still awaiting judgment. In the records of the principal action, ENEVA filed a petition on June 12, 2009, requesting the sending of the records to the Federal Justice for processing and deciding on this case, when also the connection with federal public-interest civil action No. 2008.81.00.012450-9 should be analyzed. Awaiting decision on the jurisdiction for processing and deciding on the action and on the request for summary judgment made by the Office of the Public Defender of the State of Cear. On May 07, 2012, a decision was handed down th determining the sending of the records to the 4 Lower Federal Court to represent on the jurisdiction for the decision on the case. On September th 09, 2012, the judge of the 4 Federal Lower Court handed down a decision in which he judged the request moot and determined that the case be remanded to the State Justice.
b. Court c. Filing Date d. Parties to the Proceeding
51
Version: 32
g. Chances of Loss h. Analysis of the Impact if the Case Is Lost
Possible It is not possible to measure the real impact of a loss on our financial and equity condition, given that the amount in dispute has not been established. Not applicable because the Company does not make provisions when the chances of loss are possible.
i. Provisioned Amount, in the Case of Provision
Public-interest Civil Action No. 00169183820094058100 (2009.81.00.016918-2) a. Court b. Court c. Filing Date d. Parties to the Proceeding 10 Federal Lower Court of the State of Cear Lower court December 11, 2009 Plaintiff: Federal Prosecution Office Defendants: State of Cear, the Environment State Superintendence SEMACE, Brazilian Institute for Environment and Renewable Natural Resources IBAMA, Companhia Siderrgica do Pecm CSP, Porto do Pecm Gerao de Energia S.A. and MPX Pecm II Gerao de Energia S.A. e. Amounts, Goods or Rights in Dispute f. Principal Facts Land where the enterprises Thermoelectric Power Plants Porto do Pecm I and II are located, as well as their environmental licenses. Public-interest civil action with request for provisional protection in order to ensure the delimitation of Indigenous Land Anac in the area of the Industrial and Port Complex of Pecm CIPP. Previous statement filed by Porto do Pecm and MPX Pecm II, on January 11, 2010. Injunction dismissed on January 25, 2010. Against such decision, the Federal Prosecution Office filed a bill of review on February 02, 2010 that was dismissed on December 07, 2010. In the main case, on February 25, 2010, the objection of the companies Porto do Pecm and MPX Pecm II was entered of record. On September 02, 2010, a decision was handed down granting the request of the Federal Prosecution Office for suspension of the case for 180 days. Porto do Pecm and MPX Pecm II filed an interlocutory appeal to be decided on appeal from final judgment. On May 20, 2011, the records were attached to Public-interest Civil Action No. 0002218-23.2010.4.05.8100. On July 20, 2011, a decision was handed down determining the issue of an official communication to the National Indian Foundation for information on the existence of the Anac tribe in the area of the Complex. According to the information provided by the National Indian Foundation that it had not yet completed the necessary measures for such verification, on April 11, 2012, a decision was handed down determining the suspension of the case for 90 days. On August 31, 2012, a decision was handed down determining a new official communication to the National Indian Foundation for information on the existence of the Anac tribe in the area of the Complex. On January 09, 2013, the decision determining the suspension of the case for 90 days was published again. g. Chances of Loss h. Analysis of the Impact if the Possible. It is not possible to measure the real impact of a loss on our financial
th
52
Version: 32
Case Is Lost
and equity condition, given that the amount in dispute has not been established. Not applicable because the Company does not make provisions when the chances of loss are possible.
Public-interest Civil Action No. 200881000124509 a. Court b. Court c. Filing Date d. Parties to the Proceeding 4 Federal Lower Court of Fortaleza / State of Cear Lower court August 19, 2008 Plaintiff: Federal Prosecution Office Defendant: Porto do Pecm Gerao de Energia S.A., Brazilian Institute for Environment and Renewable Natural Resources (IBAMA) and the Environment State Superintendence - SEMACE e. Amounts, Goods or Rights in Dispute f. Principal Facts Licensing of the Thermoelectric Power Plant Porto do Pecm.
th
Public-interest civil action arguing with the impossibility of continuation of the works of the Thermoelectric Power Plant Porto de Pecm while the Industrial and Port Complex of Pecm is not licensed and questioning the state jurisdiction for the environmental licensing of the enterprise. Injunction partially granted on November 24, 2008, to determine the standstill of the works until the licensing is made by the Brazilian Institute for Environment and Renewable Natural Resourc es (IBAMA). Bill of review filed by Porto do Pecm on November 26, 2008, to which staying effects were granted on December 05, 2008. On June 08, 2010, the bill of review was granted. In the principal case, an objection was filed by Porto do Pecm on January 07, 2009. On April 08, 2011, an order was handed down abandoning the case without trial on the merits. The Federal Prosecution Office filed an appeal on April 26, 2011 that was admitted only with effect of review. On June 08, 2011, we filed our brief of respondent. On July 29, 2011, the IBAMA filed its brief of respondent and on August 31, 2011, SEMACE filed its brief of respondent. On September 06, 2011, a decision was handed down determining the return of the case to the Federal Regional Court of the th 5 Region for judgment of the appeal filed by the Federal Prosecution Office. Case held under advisement at the Federal Regional Court of th the 5 Region since then. On August 07, 2012, the appeal was dismissed. On September 16, 2012, the case was received by the nd Federal Regional Prosecution Office of the 2 Region. On September 27, 2012, the case was definitively remanded. On October 05, 2012, a decision was handed down determining the definitive shelving of the case.
g. Chances of Loss h. Analysis of the Impact if the Case Is Lost i. Provisioned Amount, in the
Remote Not applicable.
Not applicable because the Company does not make provisions when
53
Version: 32
Case of Provision
the chances of loss are remote.
Provisional Remedy No. 2009.81.00.006337-9 a. Court b. Court c. Filing Date d. Parties to the Proceeding 4 Federal Lower Court of the State of Cear Lower court May 16, 2009 Plaintiff: Federal Prosecution Office Defendant: State of Cear, Brazilian Institute for Environment and Renewable Natural Resources - IBAMA, the Environment State Superintendence - SEMACE and Porto do Pecm Gerao de Energia S.A. e. Amounts, Goods or Rights in Dispute Environmental licenses granted to Porto do Pecm Gerao de Energia S.A. for the installation of a thermoelectric power plant in an area located in the Industrial and Port Complex of Pecm CIPP. Provisional Remedy with request for provisional protection (assigned in connection with Public-interest Civil Action No. 2008.81.00.012450-9) in which the following is requested: (i) standstill of the installation works of the Thermoelectric Power Plan; (ii) that the Environment State Superintendence - SEMACE refrains from issuing any renewal of the licenses already granted or any new environmental license for the enterprise in question until the errors and omissions indicated by the Federal Prosecution Office are corrected. Previous defense and objection filed by Porto do Pecm, on May 06, 2008 and October 07, 2009, respectively. Provisional injunction dismissed on March 16, 2010. Against such decision, the Federal Prosecution Office filed a bill of review on April 13, 2010, with a request of staying effects, which was dismissed by a decision published on April 30, 2010. On September 29, 2010, the appeal was dismissed. In the principal case, a reply was filed on April 14, 2011. On May 11, 2011, an order was handed down dismissing the request. On September 28, 2011, the Federal Prosecution Office filed an appeal against such decision. The brief of respondent of Porto do Pecm and the Environment and Renewable Natural Resources - IBAMA and the Environment State Superintendence -SEMACE was filed. On March 27, 2012, the case returned from the Federal Prosecution office with a petition. On August 27, 2012, the case was sent back to the Federal th Regional Court of the 5 Region with the brief or respondent to the appeal On December 11, 2012, the case was sent to the judge to be held under advisement with the opinion of the Federal Prosecution Office. g. Chances of Loss h. Analysis of the Impact if the Case Is Lost Possible. It is not possible to measure the real impact of a loss on our financial and equity condition, given that the amount in dispute has not been established. Not applicable because the Company does not make provisions when the chances of loss are possible.
th
f. Principal Facts
54
Version: 32
Public-interest Civil Action No. 15.542/2007 a. Court b. Court c. Filing Date d. Parties to the Proceeding Lower Court of the Public Treasury of So Lus / State of Maranho Lower court July 02, 2007 Plaintiff: State Prosecution Office of Maranho Defendant: Thermoelectric Power Plant Porto do Itaqui Gerao de Energia S.A., State of Maranho and EDP Energias do Brasil S.A. e. Amounts, Goods or Rights in Dispute Preliminary license of the Thermoelectric Power Plant Porto de Itaqui granted by the Environment and Natural Resources Office of the State of Maranho SEMA Public-interest civil action that requests the nullity of the preliminary license for lack of presentation of the Environmental Impact Study and its respective Environmental Impact Report EIA-RIMA. Objections filed by the Thermoelectric Power Plant Porto do Itaqui and by EDP on February 01, 2008 and May 26, 2009, respectively. On August 03, 2009, MPE filed its reply. On May 24, 2010, the Thermoelectric Power Plant Porto do Itaqui filed a petition requesting that the case be dismissed without prejudice. On April 07, 2011, EDP filed a petition requesting its exclusion as defendant of the action. On September 20, 2011, a decision was handed down that determined the connection of this action with Public-interest Civil Action No. 26.458/2007 and scheduled a date for the initial hearing and judgment. On January 13, 2012, a motion for clarification was filed for. On February 08, 2012, after the petition requesting postponement, the hearing was suspended and a term of 10 days was granted to each party to represent on the preliminary questions. On April 11, 2012, the records with the motion for clarification were sent to the judge to be held under advisement. On November 12, 2012, an order was issued for designation of a hearing, but as the court went into recess this did not occur. A new date had not been set for the hearing by April 22, 2013.
f. Principal Facts
55
Version: 32
Possible No impact in view of the fact that the licensing proceeding was transferred to the Environment and Renewable Natural Resources IBAMA and new and installation licenses were issued. Not applicable because the Company does not make provisions when the chances of loss are possible.
Public-interest Civil Action No. 26.458/2007 a. Court b. Court c. Filing Date d. Parties to the Proceeding Lower Court of the Public Treasury of So Lus / State of Maranho Lower court November 22, 2007 Plaintiff: State Prosecution Office of Maranho Defendants: Thermoelectric Power Plant Porto do Itaqui Gerao de Energia S.A. and Municipality of So Lus e. Amounts, Goods or Rights in Dispute f. Principal Facts Certificate of use and occupancy of the soil of the Thermoelectric Power Plant Porto do Itaqui Public-interest civil action in which the suspension of the effects of Municipal Decree No. 32.439/2007 that admits the possibility of an installation of the Thermoelectric Power Plant in the Industrial District of So Luis, as well as the certificate of use and occupancy of the soil. Objections filed by the Thermoelectric Power Plant Porto do Itaqui and by the Municipality of So Lus on June 04, 2008 and August 05, 2009 respectively. On September 20, 2011, a decision was handed down that determined the connection of this case with Public-interest Civil Action No. 26.458/2007 and scheduled a date for the initial hearing and judgment. On January 13, 2012, a motion for clarification was filed. On February 08, 2012, after the petition requesting postponement, the hearing was suspended and a time of 10 days was granted for each party to represent on the preliminary questions. On April 11, 2012, the records were sent to the judge for advisement with the motion for clarification. On April 23, 2012, a decision was handed down that dismissed the motion for clarification and scheduled the initial hearing and judgment on June 27, 2012. The hearing was not held because the court went into recess, and no new date had been set by April 22, 2013. On April 15, 2013, a precatory letter was filed and the case records were sent to the judge. g. Chances of Loss h. Analysis of the Impact if the Case Is Lost Possible It is not possible to measure the real impact of a loss on our financial and equity condition, given that the amount in dispute has not been established. Not applicable because the Company does not make provisions when the chances of loss are possible.
Public-interest Civil Action No. 2008.37.00.003564-6 (0003446-23.2008.4.01.3700)
56
Version: 32
a. Court b. Court c. Filing Date d. Parties to the Proceeding
6 Federal Lower Court of the State of Maranho Lower court May 13, 2008 Plaintiff: Brazilian Institute for Environment and Renewable Natural Resources - IBAMA, State Prosecution Office of Maranho and Federal Prosecution Office Defendants: State of Maranho and Thermoelectric Power Plant Porto do Itaqui Gerao de Energia S.A.
th
e. Amounts, Goods or Rights in Dispute f. Principal Facts
Licensing of the Thermoelectric Power Plant Porto do Itaqui
Public-interest civil action with provisional injunction in which the nullity of all administrative acts carried out by the state environmental body with regard to the environmental licensing process of the Thermoelectric Power Plant Porto do Itaqui, as well as the transfer of the licensing to the IBAMA is requested. The provisional injunction was partially granted on May 26, 2008 to determine the suspension of the works of the Thermoelectric Power Plan until the question of the licensing jurisdiction is decided. A bill of review was filed by the Thermoelectric Power Plant Porto do Itaqui on May 27, 2008. Decision handed down on June 03, 2008 that determined that the licensing studies and processes of the Thermoelectric Power Plant pending before the State Environment Office - SEMA be assessed by the Environment and Renewable Natural Resources - IBAMA for the analysis of a possible use and continuation of the licensing. On May 06, 2009, a petition was filed by the Thermoelectric Power Plant Porto do Itaqui requesting that the lawsuit be dismissed. The case was remanded th to the 8 Federal Lower Court. On April 20, 2012, a decision was handed down with the examination of the merit granting the request in which the acts carried out in connection with the environmental licensing before State Environment Office - SEMA were declared null and the Thermoelectric Power Plant Porto do Itaqui ordered to an obligation to do consisting of the submission of the licensing request to the IBAMA and to pay the attorneys fees, exclusively determined in favor of the IBAMA in the amount of R$100,000.00. On May 07, 2012, we filed a Motion for Clarification. Records held under advisement. On October 11, 2012, the Motion for Clarification filed by the Thermoelectric Power Plant Porto do Itaqui was rejected. On November 19, 2012 and December 11, 2012, the Thermoelectric Power Plant Porto do Itaqui and the State of Maranho filed their respective appeals.
g. Chances of Loss
Possible. It should be noted that the purpose of the action is to transfer authority to issue the license from the state to the federal body. The company voluntarily restarted the process of obtaining the environmental license from the federal body and obtained all the licenses necessary from it (Preliminary License, Installation License and Operation License). Accordingly, the Company believes that this action has lost its purpose, and should therefore not be classified as a probable loss. Not applicable as the licensing proceeding was transferred to the Environment and Renewable Natural Resources - IBAMA, which issued new and installation licenses.
h. Analysis of the Impact if the Case Is Lost
57
Version: 32
Not applicable because the Company does not make provisions when the chances of loss are possible.
Public-interest Civil Action No. 18069-24.2010.4.01.3700 a. Court b. Court c. Filing Date d. Parties to the Proceeding 8 Federal Lower Court of the State of Maranho Lower court June 11, 2010 Plaintiff: Federal Prosecution Office Defendants: Thermoelectric Power Plant Porto do Itaqui Gerao de Energia S.A. e the Environment and Renewable Natural Resources IBAMA e. Amounts, Goods or Rights in Dispute f. Principal Facts Environmental licensing of the Thermoelectric Power Plant Porto do Itaqui Public-interest civil action with request for provisional protection in which the Federal Prosecution Office requests the declaration of nullity of the licenses issued by the Environment and Renewable Natural Resources IBAMA, which authorize the installation of the Thermoelectric Power Plant Porto do Itaqui. The Thermoelectric Power Plant Porto do Itaqui filed its previous statement on July 29, 2010. On November 16, 2010, a decision was handed down dismissing the request for provisional protection. The Thermoelectric Power Plant Porto do Itaqui filed its objection on January 07, 2011. On April 28, 2011, a reply was filed by the Federal Prosecution Office. On May 26, 2011, the records were returned by the Office of the General Counsel of the Republic. On February 23, 2012, a decision was handed down in which it was determined that a technical expert analysis be conducted, summons of the Environment and Renewable Natural Resources - IBAMA to provide, within 10 days, information on the question whether or not the conditions for the installation licenses were met, summons of the Environment and Renewable Natural Resources - IBAMA and of the Thermoelectric Power Plant Porto do Itaqui to provide, within 30 days, information on the implementation of the monitoring station Joo Paulo and an implementation prognosis, after producing expert evidence, determining the conduction of a public hearing in the hearing room of the Judicial District for the testimony of persons with experience and authority in the matter, including technicians of the parties. On May 16, 2012, expert Andreia Pereira Amorim was served of the decision handed down that granted the conduction of a technical analysis and the receipt of the records by the expert. On August 10, 2012, the Thermoelectric Power Plant Porto do Itaqui filed a Motion for Clarification against such decision to understand that the new expert analysis was not requested by the Federal Prosecution Office and that the Judge explains his motivation for the reversal of the burden of proof. On April 11, 2013, we filed appellees brief against the Motion for Clarification and the notice was returned to the expert Andreia Pereira Amorim with its purpose fulfilled. On April 19, 2013, the case records were sent to the judge. Possible
th
g. Chances of Loss
58
Version: 32
h. Analysis of the Impact if the Case Is Lost
Not applicable as the licensing proceeding was transferred to the Brazilian Institute for Environment and Renewable Natural Resources IBAMA, which issued new and installation licenses. Not applicable because the Company does not make provisions when the chances of loss are possible.
Class action No. 2009.37.00.006877-1 (6730-05.2009.4.01.3700) a. Court b. Court c. Filing Date d. Parties to the Proceeding 8 Lower Federal Court of the State of Maranho Lower court September 28, 2009 Plaintiff: Pedro Leonel Pinto de Carvalho Defendants: Federal Government, Brazilian Institute for Environment and Renewable Natural Resources - IBAMA, Municipality of So Luis, State of Maranho, Thermoelectric Power Plant Porto do Itaqui Gerao de Energia S.A. and ENEVA S.A. e. Amounts, Goods or Rights in Dispute f. Principal Facts Environmental licensing of the Thermoelectric Power Plant Porto do Itaqui Class action with injunction in which the nullity of the environmental licensing process of the Thermoelectric Power Plant Porto do Itaqui, transfer of jurisdiction to the Environment and Renewable Natural Resources - IBAMA and the annulment of the of the authorization for occupancy of urban soil granted by the Municipal Urbanism and Housing Office of the Municipality of So Luis is requested. On September 30, 2009, the judged determined that the public authorities involved represent on the injunction, which was done by the Environment and Renewable Natural Resources - IBAMA and the Federal Government on October 13, 2009. On November 26, 2009, the Thermoelectric Power Plant Porto do Itaqui entered a prior statement on the injunction. The injunction was partially granted, upon which a bill of review was filed by the Thermoelectric Power Plant Porto do Itaqui was filed on April 26, 2011. The provisional protection of the decision was granted on April 30, 2010. In the main records, the Thermoelectric Power Plant Porto do Itaqui and ENEVA filed their reply on June 22, 2010 and the Municipality of So Luis on June 09, 2010. Records sent for decision from August 04, 2011 to April 22, 2013. Remote. Not applicable as the licensing proceeding was transferred to the Environment and Renewable Natural Resources - IBAMA, which issued new and installation licenses. Not applicable because the Company does not make provisions when the chances of loss are remote.
th
Labor Claims
On April 30, 2013, the Company and its subsidiaries were party to 69 court labor claims and 21 administrative labor proceedings. The amount involved in court
59
Version: 32
labor claims totals approximately R$4 million out of the 69 claims, we and our subsidiaries are plaintiffs in none of them. There is no amount involved in administrative labor proceedings. In all proceedings, the chances of loss range from possible to remote and, therefore, we did not record a provision for these amounts. The subject matters of such proceedings and claims mainly involve requests for hazard pay, overtime, severance pay and fines according to Article 477 of the Consolidated Labor Laws. The administrative labor proceedings involve, for the most part, irregular working conditions on the site, work on public holidays and the accuracy of labor documents. There are no specific amounts involved in the administrative labor proceedings. The chances of loss are classified as possible for all the proceedings, according to the assessment of our legal counsel responsible for handling them. Among the labor claims to which the Company and its subsidiaries are parties and in which the claims are not subject to secrecy, the Company understands that there is none that is individually relevant.
60
Version: 32
4.4 Non-confidential legal, administrative or arbitration proceedings the opposing parties to which are managers, former managers, controlling shareholders, former controlling shareholders or investors
On the presentation date of the Reference Form, there are no non-secret court, administrative or arbitration proceedings in which the managers, ex-managers, parent companies, former parent companies or investors of the Companies are defendants.
61
Version: 32
4.5 Relevant confidential proceedings
On the presentation date of this Reference Form, the Company was not aware of any action in relevant secret proceedings to which the Company or its subsidiaries are a party that has not been disclosed in the previous items and that could impact the business of the Company and/or of its subsidiaries in the event of a conviction.
62
Version: 32
4.6 Repetitive or related non-confidential legal, administrative or arbitration proceedings that are collectively relevant
On the presentation date of this Reference Form, the Company was not aware of any action in non-secret repetitive or related court, administrative or arbitration proceedings that are jointly relevant.
63
Version: 32
4.7 Other Relevant Contingencies
All relevant contingencies were covered in the items above.
64
Version: 32
4.8 Regulations in the country of origin and in the country where the securities are held in custody
Not applicable, in view of the fact that the Company has its head office in Brazil and its securities are being held in custody in Brazil.
65
Version: 32
5.1 - Description of the main market risks
The companys operations and those of its subsidiaries are subject to the following market risks described below:
Credit risk
Credit risk arises from the possibility of the company and its subsidiaries incurring losses arising from default by their counterparties or by depository or financial investment institutions. Failure to perform the obligations undertaken by them may result in losses to the Company, given a potential "replacement cost" of its cash flows, adversely affecting its business. Such risk may arise from trading operations and cash management. The companys maximum exposure to credit risk can be demonstrated by the balance of financial applications.
As of March 31, 2013 (in RS thousands) Credit risk positions Cash and cash equivalents Securities Trade accounts receivable Gains on derivative transactions Subsidies receivable - CCC Linked deposits Consolidated creditor accounts 359,121 5,600 228,964 34,668 137,582 765,935 590,469 3,441 152,114 3,018 42,178 141,954 933,174 1,442,415 9,437 21,898 19,289 29,445 124,315 1,646,799 As of December 31, 2012 As of December 31, 2011
Interest rate risk
Interest rate risk arises from the possibility of the company and its subsidiaries incurring losses resulting from volatility in interest rate on their financial assets and liabilities. Additionally, a risk also exists of change in the interest rate structures associated with flows of payment of principal and of debt interest.
As of the date of this Reference Form, the Company's outstanding loans and financing were denominated in Reais and subject to floating rates, such as the Long Term Interest Rate (TJLP), Interbank Deposit Certificate (CDI) rates and the Consumer Price Index (IPCA). Any increase in interest rates may affect not only the cost of new loans to the Company, as well as its current indebtedness costs,
66
Version: 32
leading to increased financial expenses. As of March 31, 2013, the consolidated debt of the Company and its subsidiaries totaled R$5,365 billion, and was subject to interest rate variations that may increase our financing cost. Of this amount, 41.3% are indexed to the TJLP, 39.1% were indexed to the CDI rate and 8.3% were indexed to fixed rates. Accordingly, any increase in the TJLP or CDI may increase our debts financial charges.
Exchange rate risk
Exchange rate risk arises from the possibility of fluctuations in the foreign currency exchange rates used by ENEVA and its subsidiaries when purchasing equipment and entering into financial instruments. Accordingly, any depreciation in the Real may increase the cost of equipment purchase and of part of our debt, thus affecting our financial condition. As of March 31, 2013, 98.2% of the consolidated debt of the Company and its subsidiaries, or R$5,365 billion, were denominated in Reais and 1.8%, or R$100.7 million, were denominated in foreign currency.
Sensitivity analysis
This involves sensitivity analysis, as of March 31, 2013, for exchange variation (appreciation of US dollar against the real) in derivative instruments related with the Companys original transactions. The probable scenario refers to the fair value on the reference date. Results in the scenarios show the book market value (with the original transaction and its related hedges) if the risk factor were to assume the value of the scenario.
Sensitivity analysis for foreign exchange exposure
Risk
Probable scenario (fair value) In R$ thousands
Scenario I USD 25%
Scenario II USD 50%
UTE Porto do Itaqui Ger. Energia Swap Libor x Prefixed Result of transaction US dollar appreciation
(116,811) (116,811)
(145,859) (145,859)
(174,908) (174,908)
Liquidity risk
Liquidity risk is the risk that the company and its subsidiaries may find it difficult to comply with the obligations associated with their financial liabilities that are settled with cash payments or other financial assets. Therefore, we may not guarantee
67
Version: 32
that there will be sufficient funds in cash or new financing to pay the financial obligations and that funding will be available according to the project needs.
Consolidated 3/31/2013
(R$ thousands) Financial liabilities Suppliers Related parties Loans and financing Contractual withholding Debentures Derivative financial instruments Total by term Up to 6 months 302,729 51,541 1,509,182 15,172 1,878,624 From 6 to 12 From 1 to 2 months years 1,383,096 31,767 163 15,723 1,430,749 8,400 645,471 5,068 29,263 688,202 From 2 to 5 years 1,374,684 59,419 1,434,103 More than 5 years 3,194,761 26,797 3,221,558 Total 302,729 59,941 8,107,194 31,767 5,231 146,374 8,653,236
68
Version: 32
5.2 Description of the market risk management policy
(a)
risks for which protection is sought
In their business the company and its subsidiaries are subject to credit risk, interest rate risk, exchange rate risk and liquidity risks. To minimize these risks, the company has policies and procedures for managing these exposures and may avail itself of protection instruments, subject to prior approval by the Board of Directors.
Credit risk
To mitigate credit risk, the company and its subsidiaries adopt the practice of analyzing the financial and economic situations of their counterparties, as well as the ongoing monitoring of the open positions. With respect to financial institutions, ENEVA and its subsidiaries only enter into operations with financial institutions with recognized reputation in the market and enjoying good ratings. Additionally, the company has a Financial Investments Policy setting out the investment limits per institution and taking into account the rating as a reference for limiting the amount invested. The benchmark used is the RiskBank Index a Brazilian system for assessment and classification of banks and financial institution risks. The higher the index, the lower the institution risk. The indexes for the last two quarters are shown in the table below. Average terms are constantly assessed together with investment indices in order to diversify the portfolio.
Bank Bradesco BTG Pactual HSBC Bank Brasil Ita Unibanco Santander Citibank Votorantim
Risk Rating Low long-term risk Low medium-term risk Low long-term risk Low long-term risk Low medium-term risk Low long-term risk Medium long-term risk
As of March 31, 2012
As of December 31, 2012
11.27 11.28 9.99 11.31 9.78 10.14 9.07
11.23 11.27 10.49 11.25 9.81 10.41 8.90
Interest rate risk
In order to mitigate the interest rate risk to which it is exposed, the company and
69
Version: 32
its subsidiaries seek to diversify funding in terms of pre- or post-fixed rates, and in certain circumstances hedge transactions are entered into in order to lock in the financial cost of the transactions. Specifically, the company and its subsidiaries have funds tied to the dollar and indexed to the LIBOR rate. For this debt structure the company entered into a debt swap transaction to protect itself against fluctuations in the LIBOR rate, taking on as a liability a prefixed interest structure.
Exchange rate risk
The company works to manage currency risk management within the consolidated environment of its companies, so as to identify and resolve the risks associated with the oscillation of the value of the currencies associated with global assets and liabilities. The goal is to identify or create natural hedges, taking advantage of the synergy between the operations of ENEVA subsidiaries The idea is to minimize the use of hedge derivatives by managing foreign exchange risk on the net exposure. Derivative instruments are used in cases where it is not possible to use the natural hedge strategy. Considering that the revenues of the ENEVA companies will be denominated in Reais, while a large part of investments in fixed assets (Capex) is denominated in US dollars and in Euros, a portion of the investments in foreign currency is being financed in dollars at international interest rates (Libor). In addition, the price of the raw material for the (coal-fired) thermoelectric plants is established on the international market, in dollars. Within this context, the level of exposure of the assets and liabilities is permanently evaluated against the possible needs protection. To minimize the impact of currency mismatches the company and its subsidiaries operate in NDF (Non Deliverable Forward)-type instruments, which consist of negotiating forwards without physical delivery of the currency. The volume of protection taken out mirrors the payment flows of the original contract. For this type of transaction there is no margin requirement. It is worth noting that the hedge policy of the company and its subsidiaries prohibits any kind speculative leveraging. The volumes of protection contracted out also respect their level of exposure, observing at all times best market governance practices. As part of the policy adopted by ENEVA and its subsidiaries, daily calculations are made of the maximum potential loss on their derivative transactions, based on statistical techniques that enable the assumed exposure to be controlled. (b) hedge strategy
The company has a formal risk management policy. The company enters into
70
Version: 32
financial instruments for hedge purposes by periodically analyzing its exposure to the risk that management intends to cover, which is approved by the Board of Directors. The results obtained from these transactions and the implementation of internal risk management controls are in line with the objectives proposed, namely liquidity, profitability and security. Hedge guidelines are applied according to the type of exposure. Foreign currency-related risk factors are neutralized in the short term (up to one year), and the hedge may be extended for a longer period. Decision making in the face of interest rate risk and inflation arising from acquired liabilities is evaluated within the economic and operational context and occurs when management considers the risk relevant. (c) instruments used for hedging
When putting hedges into effect the following instruments can be used individually or jointly:
(a)
Swaps, Currency Forwards, Currency Futures Contracts (Non Deliverable Forwards - NDF) and Options; Swaps Floating to Fixed, Interest Futures Contracts and Options; Futures Contracts and Options. parameters used for managing these risks
(b) (c)
(d)
As part of the policy adopted by ENEVA and its subsidiaries, monitoring mechanisms are adopted, such as statistical evaluation measures, for example: MtM (Mark to Market), VaR (Value at Risk with a 95% Confidence level and Holding Period (time interval) of 1 day) and Stress Tools (Monte Carlo) that provide inputs for daily decisions regarding the management of the companys hedge position. The hedge transaction must protect the net exposure, taking into account the balance between the companys incoming and outgoing cash flow and the risk it wants to mitigate. The hedge strategy must distinguish between situations involving amounts (revenues/expenses/cash/fixed assets added) effectively committed and those involving estimated amounts (not actually committed):
(d)
for values effectively committed or engaged, a coverage position of up to 100% should be adopted; for estimated amounts, a position should be adopted with a coverage maturity date limited to twelve months and a weighted coverage position of less than 100% based on conservative prospects of realization.
(e)
It is the responsibility of the Chief Financial Officer to monitor any changes in the
71
Version: 32
market and/or business premises that require adjustments to hedge transactions already closed. This practice results in permanent commitment by management to mitigate inherent or occasional exposure risks involving the companys different operations. (e) if the issuer deals in financial instruments for a variety of hedge objectives and what those objectives are The hedge strategy and its respective actions must strictly adhere to the objective of mitigating exposures to identified financial risks. Should the events that gave rise to the hedge transactions be no longer applicable, the hedge should be unwound in good time, with the necessary approvals. In this manner all financial instrument transactions of the company and its subsidiaries are strictly dedicated to protecting its assets. The company does not speculate with financial instruments. (f) organizational structure of risk management control
The companys risk management control is structured as follows:
Board of Directors
Approve the strategy
CEO
Submit the strategy to the Board of Directors
CFO
Identify and quantify the requirements
Treasury
Suggest financial securities Execute Follow-up
Responsibilities
(a) It is the responsibility of the companys Chief Financial Officer to identify and quantify the companys need to engage in hedge transactions;
(b)
It is the responsibility of the companys Chief Executive Officer, or to whom he delegates, to submit the recommended strategy to the Board of Directors;
72
Version: 32
(c)
It is the responsibility of the Board of Directors to consider the recommendation and decide whether to approve it; It is the responsibility of the Chief Financial Officer, with the support of the General Management of Corporate Treasury, to implement the strategy approved by the Board of Directors.
(d)
Execution It is the responsibility of the Chief Financial Officer to select the best instrument for protection against certain financial risks. The hedge transactions to be entered into should take into account the following aspects:
(a) (b) (c) (d) (e) Alignment with exposure periods;
Instruments available; Liquidity; Margins required; Cost x benefit ratio; and
(f) Other relevant features. (g) adaptation of the internal control and operational structure in order to verify the effectiveness of the policy adopted The company and its subsidiaries periodically check the effectiveness of the policy through the Internal Controls and Internal Audit areas, in order to identify compliance with the same, as well as suggesting opportunities for improvement.
73
Version: 32
5.3- Significant changes in key market risks
There were no changes to the market risks identified by the company, nor changes to the risk management policy.
74
Version: 32
There is no other information that the company deems relevant in relation to item 5 which has not been disclosed in the other items of this Reference Form.
75
Version: 32
6.1/6.2/6.4- Constitution of the issuer, duration and date of registration with the CVM
Date of Issuer Constituted Issuers Form of Constitution Country of Constitution Duration Period Date of Registration with the CVM
25/04/2001 Joint-stock corporation. Brazil Indeterminate Duration Period 07/12/2007
76
Version: 32
6.3 - Brief history

ENEVA started its activities on April 25, 2001, with the incorporation of MPX Minerao e Energia S.A., a company intended to operate in the power generation industry. Although it has been recently incorporated, the Company has relied on the experience of EBX Group to perform and finance large projects since its beginning. From 2001 to 2004, the Companys main investment consisted of a majority interest (51%) in the capital of Termocear, which operates thermal plant (UTE) Senador Carlos Jereissati, a natural gas-fired thermal electric power plant located in the Municipality of Caucaia, in the State of Cear. The plant construction started in November 2001, and, on July 7, 2002, the partial operation of two generating units was officially registered with the National System Operator (ONS), and an additional power of 100 MW was provided to the National Interconnected System SIN (SIN). UTE Senador Carlos Jereissati has fulfilled the dispatch orders completely, whether for electric or for power purposes, whenever determined by ONS, except for the opportunities when there were fuel supply failures. Through 2004 and 2005, the Brazilian market underwent a strong crisis in the natural gas supply, which seriously limited Termocear operations, and generated an adverse impact on its operational revenue. For that reason, and considering the obligation undertaken by Petrobrs to perform contingency contributions to cover certain fixed and variable costs for the plant, Petrobrs acquired, in June 2005, the whole of Termocears capital. This operation was preceded by a corporate restructuring promoted by our controlling shareholder, which started on October 5, 2004, in which we reduced our social capital by transferring Termocears shares to its controlling shareholder at that time, MPX Participaes Ltda. (MPX Participaes). The value of Termocears sale was R$324 million, which generated an approximate gain of R$192 million for MPX Participaes, considering the initial investment, profits ascertained, and integral debt settlement. On October 16, 2007, UTE Porto do Pecm (Energia Pecm), a 50/50 partnership between ENEVA and EDP - Energias do Brasil S.A. (EDP)with a 720 MW installed capacity, traded 615 MW on average at the A-5 auction that took place in October, 2007, ensuring a fixed revenue for 15 years as of 2012 of approximately R$417.4 million (base: Jan/07), indexed to the IPCA (National Extended Consumer Price Index - IBGE) inflation index. At the same auction, the then called UTE Termomaranho (currently UTE Porto do Itaqui or Itaqui) traded 315 MW on average, ensuring a fixed revenue for 15 years as of January 2012 of approximately R$220.7 million (base: Jan/07), also indexed to the IPCA. In December, 2007, ENEVA issued 1,903,743 common shares at the price of R$1,006.63 each share, which started to be traded on the Novo Mercado segment of BM&FBOVESPA S.A. Bolsa de Valores, Mercadorias e Futuros (BM&FBOVESPA) on December 14, 2007. In January, 2008, the option for subscription of a supplementary lot of 118,261 common shares was exercised at the same price. The closing of the public offering took place on January 17th, 2008, and considering the supplementary shares, a total of 2,022,004 shares were made available in the market, which resulted in R$2.0 billion raised. On September 30, 2008, 360 MW UTE Porto do Pecm II (Pecm II), a 100% ENEVA project, sold 276 MW on average at the new energy auction A-5, held by the Electricity Trading Chamber (CCEE) for supply agreements with duration of 15 years. The PPA (Power Purchase Agreement), 77
Version: 32
effective as of January 2013, has a 15 year term and ensures an annual fixed revenue of R$207.0 million (base: Jan/08), indexed to the IPCA. The three above mentioned energy sales agreements provide for an integral transfer of fuel costs, including the impact of exchange fluctuation, to the energy price. On May 8, 2009, the Company launched the Level I Global Depositary Receipts Program, under the MPXEY code, with Banco Ita S.A. as a custodian institution and Bank of New York Mellon as a depositary institution of said receipts. On July 17, 2009, the Company communicated that, under the minutes of the Companys Extraordinary General Meeting, held on the same date, the shareholders approved, by unanimity and with no exceptions, the Split of the common shares issued by the Company, through which each existing common share corresponded to 20 shares of the same class. The shares started to trade on BM&FBOVESPA, in the ex-split form as of July 20, 2009. On September 24, 2009, ENEVA signed a Memorandum of Understanding with OGX formalizing the intent to acquire 33.3% of the shares OGX acquired in seven land exploration blocks in the Parnaba Basin. As published in ANPs site on that date, OGX acquired 70% of the Blocks. Said shares were acquired from Petra, which remains with 30%. Additionally, ENEVA and Petra signed a Partnership Agreement to develop integrated thermal electric generation projects using the natural gas produced in the Blocks. The Agreement sets forth that ENEVA shall have a 70% share in the Projects, and the remaining 30% belong to Petra. On April 27, 2010, ANP approved the transfer of 70% of the rights and obligations referring to seven land exploration blocks in the Parnaba Basin, upstate Maranho ( Blocks), held by OGX Petrleo e Gs S.A. (OGX) to OGX Maranho Petrleo e Gs Ltda. ( OGX Maranho), a specific purpose company in which ENEVA holds 33.3% and OGX, 66.7% of the capital stock, as already set forth in the Memorandum of Understanding signed between the parties in September, 2009. On November 22, 2010, ENEVA communicated the acquisition of the Usina Termeltrica de Seival (UTE Seival project), which has an Installation License for 600 MW of mineral coal in the municipality of Candiota, State of Rio Grande do Sul. ENEVA acquired the project from Tractebel Energia S.A. for approximately R$37 million, of which R$24 million were paid in advance and R$13 million were paid after the actual share transfer. On March 10, 2011, ENEVA disclosed a Relevant Fact to the market, informing that the Framework and Credit Committee of the National Bank for Economic and Social Development BNDES approved the classification of ENEVA capitalization, upon subscription by BNDES Participaes S.A. BNDESPAR, of convertible debentures in a total amount of R$600 million. GIF Gesto de Investimentos e Participaes Ltda., through one or more of its managed funds (Gvea Investimentos), and the controlling shareholder of ENEVA, Mr. Eike Batista, participated in the operation with the same conditions set forth by BNDESPAR, subscribing convertible debentures in a total amount of R$200 million each. Thus, the amount raised in the operation totaled approximately R$1 billion. Mr. Eike Batista agreed to transfer his preemptive rights, partially and proportionally, to BNDESPAR and to Gvea for the subscription of convertible debentures. On April 15, 2011, ENEVA announced that DeGolyer & MacNaughton estimates indicated that the total contingent and prospective risked resources from the seven land blocks controlled by OGX Maranho in the Parnaba Basin add up to 11.3 trillion cubic feet (Tcf). In addition, the estimates shown by DeGolyer & MacNaughton pointed out prospective risked resources of 96 million oil barrels. 78
Version: 32
ENEVA share in the resources is equal to 2.6 Tcf gas, with potential to reach 13.3 Tcf and 0.5 billion oil barrels. Such exceptional results have reinforced the Companys initial estimates regarding the great potential for production of gas in the region and also confirm the oil potential. These estimates were based on three wells drilled until December 31, 2010, all of which were located in the PNT- 68 block, and in seismic studies carried out across all blocks. In May, 2011, the commercial viability of two natural gas fields operated by the affiliate OGX Maranho in the Parnaba Basin was declared. Development plans estimate a daily production of 5.7 million m3 in 2013, which corresponds to the total production of 1.1 Tcf of gas. The capitalization of ENEVA upon subscription of debentures convertible was approved in June, 2011, by the anchor participants in the operation, Gvea Investimentos Ltda. ( Gvea), through one of its managed funds, the controlling shareholder of ENEVA, Mr. Eike Batista, and BNDESPAR. With the issuing of R$1.4 billion in convertible debentures, the Companys investment capacity was reinforced. In June, 2011, a Term of Commitment was signed between ENEVA and Grupo Bertin to acquire projects with energy contracted at the A-5 auction of 2008, totaling, on average, 450 MW. In August, 2011, the board of the National Electricity Agency (ANEEL) approved the transfer of authorizations of the thermal electric plants UTE MC2 Joo Neiva S.A. and UTE MC2 Joinville S.A. (together, Parnaba I) from Bertin Energia e Participaes S.A. (Bertin) to ENEVA, in addition to approving the changes in location and technical characteristics of Parnaba I, thus implementing the acquisition of energy agreements of Grupo Bertin by ENEVA to begin the energy supply in 2013. In that same month, regarding the Parnaba Thermal Complex, the thermal electric power plant UTE Parnaba II (UTE Parnaba II), with an installed capacity of 517 MW - to be installed in the Complex - was the winner in the new energy auction A-3, held on August 17, 2011. The power plant shall start to operate in 2014 and the total term of the energy agreement shall be 20 years. To implement the above mentioned natural gas thermal plants in MPX Parnaba Thermal Complex, ENEVA signed engineering, construction, and assembly agreements with the Spanish companies Duro Felguera and Initec Energia S.A. In September, 2011, ENEVA acquired, through its affiliate OGX Maranho, 50% of the shares in land exploration block PN-T-102 in the Parnaba Basin, together with the companies (Consortium) Imetame Energia S.A., DELP Engenharia Mecnica Ltda. e Orteng Equipamentos and Sistemas Ltda., which remain with a share of 16.67%, 16.665%, and 16.665%, respectively, in the block. OGX Maranho has become the operator of this block, together with this Consortium, which has already been operating with good results for some years in several basins in Brazil. With this additional concession, OGX Maranho holds now shares in eight land exploration blocks in the Parnaba Basin, with a total area larger than 24,500 km. Also in September, ENEVA and MMX Minerao e Metlicos S.A. finished negotiations to supply electric energy, totaling 200 MW on average, and signed a Term of Commitment to adopt a selfproduction structure. The agreement ensures energy supply for a period of 15 years, starting May, 2014, at the basic price of R$125/MWh (basic date: May, 2011). In November, 2011, ENEVA disclosed preliminary conclusions of 3D seismic studies and the results of the ongoing drill program in the San Juan area, in Colombia. Still in November, the Office of Environment and Natural Resources of the State of Maranho (SEMA) issued an Installation License for the additional capacity of 1,859 MW at Parnaba 79
Version: 32
Thermal Complex, with total capacity of 3,722 MW with LI in the region. In December, OGX Maranho obtained a Preliminary License for production of natural gas in the Gavio Real and Gavio Azul fields, in the Parnaba Basin. In January 2012, ENEVA received the Installation License for a project of production and flow of natural gas in Gavio Real and Gavio Azul fields, in the Parnaba Basin. In the same month, the Company announced its intention to form a joint venture with E.ON SE, one of the largest private power and gas companies in the world, according to Forbes, with the aim of leveraging significant supplementarities of both companies to accelerate growth and develop a bigger and more profitable power project. In April 2012, the definitive documents were signed for this operation, through which ENEVA raised R$1.0 billion through a capital increase subscribed by DD Brazil Holdings S.A.R.L, an E.ON SE subsidiary. After such increase, E.ON. achieved an 11.7% share in ENEVA. On April 17, 2012, ENEVA signed final agreements for the incorporation of a joint venture (JV) with E.ON, which was completed on May 25, 2012. The JV structure was designed with the objective of leveraging the supplementarities of ENEVA and E.ON, which, according to the expectations of both companies, will lead to the development, implementation and efficient operation of a total capacity of 20 GW, between thermal and renewable generation. The JV management brings together E.ON international executives with large experience in engineering, construction and operation of thermal power projects and renewable energy, according to Forbes, and a group of ENEVA executives with deep knowledge of the Brazilian electricity sector, including the planning and operation of the National Integrated System and the processes for the preparation of the energy policy, as can been verified by our executives resumes, provided in item 12 of this Reference Form. Regarding Chile project, in March 2012, ENEVA released a note on the decision of the Court of Antofagasta, Chile, as to the environmental classification of Castilla project. In February 2011, a decision rendered by the Supreme Court of Chile on the administrative proceeding that had been adopted in the environmental analysis of Castilla resulted in the revision of the emission levels of the Project and hence its environmental classification. The revised classification was the basis for the approval of the Castilla environmental license by the Committee for Environmental Assessment of the Atacama Region. In April 2012, ANEEL changed the implementation schedule of power plants Itaqui and Energia Pecm and changed the starting date of the Agreement for Sale of Electricity in the Regulated Market to June 1, 2012 and July 23, 2012, respectively, or the actual commencement of commercial operation of the power plants, whichever occurs first. In April 2012, ENEVA and MMX signed an amendment to the agreement for the supply of electricity. Under the amendment, from January 2014 to December 2018, ENEVA will supply electricity to the MMX Serra Azul Unit via MPX Comecializadora de Energia. From January 2019 to May 2029, the terms of the original agreement for power supply remain unchanged. MPX UTE Parnaba will supply 200 MW average, at a base price of R$125/MWh (May 2011 base date), using self-production structure. Also in May 2012, 99.6% of the debentures were converted into ENEVA shares. Then the mining assets in Colombia were segregated, and the spun off portion was transferred to a new Company listed on Novo Mercado of BM&FBOVESPA, CCX, which began trading independently on May 25 2012. On July 8, 2012, ENEVA signed an agreement to take over the management of the works of Energia Pecm, Itaqui and Pecm II through the acquisition, together with EDP and in equal proportions, of 100% shares of MABE Brasil Ltda., a consortium formed by Maire Tecnimont Group and Grupo Efacec, for the value of R$1.00. The acquisition enabled the Company to take over the management of the works to avoid interruptions to work in progress, ensuring effective 80
Version: 32
management of Projects through completion. EDP and ENEVAagreed that Pecm II and Itaqui, which are projects controlled entirely by ENEVA, will be managed exclusively by ENEVA. In July 2012, the affiliate OGX Maranho concluded a drill-stem test in well OGX-88, accumulation of Bom Jesus, in block PN-T-68, 1.4 km from the wildcat discoverer of this accumulation, OGX-34, and about 30 km far from Gavio Real field, in the Parnaba onshore basin. The drill-stem test in well OGX-88 was performed in 36 meters of gas net pay in the carboniferous section. In August 2012, ENEVA, through its joint venture with E.ON, signed an Agreement for the acquisition of Wind Complexes Jandara, Pedra Preta I and Pedra Preta II, together, Projeto Ventos with 600 MW total capacity. The agreement also inclu ded an option to acquire an expansion of the Projects, with 600 MW additional capacity, to be exercised by May 31, 2013. Also in August 2012, ENEVA made a split of common shares issued by the Company, whereby each existing common share now corresponds to three shares of the same class. In parallel, there was the unfolding of Global Depositary Receipts (GDRs) of the Company, whereby each GDR now corresponds to three GDRs, so there is no change in the ratio between the shares and Global Depositary Receipts. On August 28, 2012, a decision of the Chilean Supreme Court annulled the environmental license of Central Castilla thermal plant. The Court further determined that relicensing should consider a new environmental impact study conducted together by Castilla and Puerto Castilla, which will receive coal to supply the plant. In September 2012, OGX Maranho obtained the Operating License authorizing the start of production and flow of natural gas in Gavio Real and Gavio Azul fields, in the Parnaba Basin, northeastern Brazil. The license was issued by the State Department of Environment and Natural Resources of Maranho (SEMA/MA). In October 2012, ANEEL authorized the Itaqui venture to start operation on a test basis. In addition, ANEEL Board authorized the change of the start date of the Agreement for Sale of Electricity in the Regulated Market to December 20, 2012 or the date of actual commencement of commercial operation of the power plant, whichever occurs first. That same month IBAMA issued Operating License (LO) for Itaqui. In the same month, Energia Pecm I TPP held the first synchronization of its first generating unit with an installed capacity of 360 MW, with NIS. In November 2012, ENEVA notified Star Energy Participaes S.A. and Bertin on the exercise of an option to acquire the entire capital stock of UTE MC2 Nova Vencia (currently UTE Parnaba III, or Parnaba III, owner of authorization for the construction of a thermal power plant with 176.2 MW capacity in the state of Esprito Santo. ENEVA intends to transfer the Project to the Parnaba Basin, state of Maranho. On November 23, 2012, Itaqui performed the first synchronization with NIS as a test. On December 1, 2012, Energia Pecm TPP received authorization from ANEEL to start commercial operation of the first generating unit with an installed capacity of 360 MW. On January 19, 2013, the first turbine of Parnaba I TPP ( Paranaba I), with an installed capacity of 169 MW, was first synchronized with NIS. Also in January 2013, ANEEL approved the postponement of the energy supply from Pecm II TPP (360 MW) to June 1, 2013 and from Parnaba I (676 MW) to April 1, 2013. In the same month, OGX Maranho presented to ANP the Declaration of Commerciality of accumulation of Bom Jesus, discovered in Blocks PN-T-67 and PN-T-68, in the Parnaba Basin. 81
Version: 32
The declaration of commerciality presented on the accumulation of Bom Jesus was named Gavio Branco field and OGX Maranho estimates a total in situ volume between 0.2 and 0.5 Tcf of gas for this field. On February 1, 2013, Parnaba I received authorization from ANEEL to start commercial operation of the first turbine with an installed capacity of 169 MW. Parnaba I has total installed capacity of 676 MW, consisting of four gas turbines of 169 MW each. In the same month, Itaqui received authorization from ANEEL to start commercial operation with an installed capacity of 360 MW. On February 20, 2013, Parnaba I received authorization from ANEEL to start commercial operation of the second turbine with an installed capacity of 169 MW and on March 29, 2013, it received authorization to begin commercial operation of the third turbine with an installed capacity of 169 MW. On April 12, 2013, Parnaba I received authorization from ANEEL to start commercial operation of the fourth turbine, also with installed capacity of 169 MW. Parnaba I TPP reached thus its total installed capacity of 676 MW, being paid under the terms of CCEAR assured in the A5 energy auction, in 2008. On March 27, 2013, the Company announced to the market, together with EDP-Energias do Brasil S.A. and in equal proportions, that they completed the acquisition of 100% shares of MABE Brasil Ltda., a consortium formed by Maire Tecnimont SpA and Grupo Efacec, relating to the management of the works of Pecm, Itaqui and Pecm II TPP. On the same date, Mr. Eike Fuhrken Batista and E.ON SE signed an Investment Agreement. After verifying all conditions precedent provided for in the Investment Agreement, on May 29, 2013, E.ON SE, through its subsidiary DD Brazil Holdings S.A.R.L acquired 141,544,637 shares of the Company owned by Mr. Eike Fuhrken Batista and certain ENEVA shareholders, holders of options to purchase shares of ENEVA, representing 24.47% of its share capital. Additionally, E.ON SE and Mr. Eike Fuhrken Batista entered into a shareholders agreement that regulates, among other matters, the exercise of voting rights and restrictions on transfers of shares in our Company. For additional information on the Shareholders Agreement, see item 15 of this Reference Form. On April 5, 2013, ENEVA informed the market that it had completed the acquisition of the entire capital stock of UTE MC2 Nova Vencia (currently Parnaba III) by ENEVA, MPX E.ON Participaes S.A. - joint venture between ENEVA and E.ON SE - and Petra Energia S.A. On March 26, 2013, the authorization of the Ministry of Mines and Energy to change the fuel and transfer the Project location was published. The project, which has permission for the construction of a thermal power plant with 176 MW capacity, was transferred to the Parnaba Basin, where ENEVA is currently building 1,369 MW, 1,193 MW of which already have long-term agreements contracts in Regulated Market. The additional capacity, with start-up scheduled for May 2013, will supply Parnaba III agreements, which sold energy in the New Energy Auction A-5, 2008, in the form of CCEARs, totaling 98 MW average, at a price of R$189,9/MWh and annual fixed revenues of R$93,5 million (both figures at the base date of November 2012). The CCEARs have a term of 15 years from 2013. On April 26, 2013, ENEVA informed the market that together with MPX-E ON Participaes S.A. and Petra Energia it executed an agreement with Kinross Brasil Minerao S.A. for implementation of a natural gas-fuled thermal project (UTE Parnaba IV) with installed capacity of 56 MW to be built in the Parnaba Basin, state of Maranho. The annual amount of the 82
Version: 32
agreement totals approximately R$54 million. In May 2013, ENEVA informed the market that it entered into an agreement with OGX Petrleo e Gs Participaes S.A. (OGX), for the purpose of assigning to ENEVA an interest of 50% in onshore exploration blocks PN-T-168, PN-T-153, PN-T-113 and PN-T-114 (Blocks), located in th the Parnaba Basin, acquired by OGX at the 11 Bidding Round held by the Brazilian Oil, Natural Gas and Biofuel Agency (Agncia Nacional de Petrleo, Gs Natural e Biocombustveis , or ANP), on May 14, 2013. ENEVA will acquire an interest of 50% in the Blocks under the same th conditions offered by OGX at the ANPs 11 Bidding Round. The acquisition price paid by ENEVA, thus, will be equivalent to half of the signature bonus and other exploration and development commitments assumed in the proposals submitted by OGX to ANP. The assignment that is the subject matter of the Agreement is contingent on approval by the ANP as soon as the Block concession agreements are signed.
83
Version: 32
6.5 Major corporate events relating to its issuer, subsidiaries or affiliates
OGX Maranho a) and b) Event and Main Business Conditions In April 2010, ANP approved the transfer of 70% of the interest in the rights and obligations relating to seven land exploration blocks in the Parnaba Basin in the State of Maranho, held by OGX for OGX Maranho. According to the Notice to the Market published on September 24, 2009, OGX acquired the interest in the Blocks from Petra Energia Ltda. (Petra) that keeps 30% of the interest therein. Additionally, ENEVA and Petra executed a Partnership Agreement for the development of integrated thermoelectric power generation using the natural gas to be produced in the Blocks, setting forth an interest of 70% of ENEVA and 30% of Petra in the energy generation projects that may be developed and implemented in the Parnaba basin.
c) Companies involved ENEVAS.A., OGX Petrleo and Gs Participaes S.A. and OGX Maranho Petrleo e Gs S.A. d) Relevant Effects of the Operation on the Shareholding Structure, especially on the share of the Controlling Shareholder, of the Shareholder with over 5% of the Capital Stock, and of the Issuers Managers Not applicable, since the operation had no effect on the shareholding structure of the Company. e) Shareholding Structure Before and after the Operation There were no changes in the shareholding structure
MPX Solar Empreendimentos Ltda. a) and b) Event and Main Business Conditions
On May 7, 2010, the Company founded MPX Solar Empreendimentos Ltda., a limited-liability company in which ENEVA holds 99.99% of the capital stock, and the remaining interest of 0.01% in the capital stock is held by Mr.
84
Version: 32
Eduardo Karrer, CEO of the Company. The capital stock was paid up by ENEVA by assigning 350,999 shares to MPX Solar Empreendimentos Ltda., representing 99.99% of the capital stock of MPX Tau Energia Solar Ltda. at its equity value. c) Companies involved MPX Solar Empreendimentos Ltda., ENEVAS.A. and MPX Tau Energia Solar Ltda. d) Relevant Effects of the Operation on the Shareholding Structure, especially on the share of the Controlling Shareholder, of the Shareholder with over 5% of the Capital Stock, and of the Issuers Managers No relevant effects were observed on the shareholding structure of the Company, or on the shares of Controlling Shareholders and shareholders with over 5% of the capital stock of the Company and of its managers. e) Shareholding Structure Before and after the Operation
The table below summarizes the equity interest of ENEVA in the transaction:
MPX TAU ENERGIA SOLAR LTDA. Before ENEVA 99.99% Afterwards ENEVA Eduardo Karrer Eduardo Karrer 0.01% MPX Solar Empreendimentos Ltda. 99.99%
0%
0.01%
The transaction did not result in any change to the shareholding structure of the Company. EDP Energias do Brasil S.A. a) and b) Events and Main Business Conditions On October 14, 2011, the Company and EDP entered into the Share Purchase Agreement by means of which the Company sold EDP 50% of the shares representing the voting capital and 100% of the shares of Porto do Pecm Transportadora de Minrios S.A. for the total amount of R$500.00, paid via electronic cash transfer TED.
85
Version: 32
c) Companies involved ENEVAS.A., EDP Energias do Brasil S.A. and Porto do Pecm Transportadora de Minrios S.A. d) Relevant Effects of the Operation on the Shareholding Structure, especially on the share of the Controlling Shareholder, of the Shareholder with over 5% of the Capital Stock, and of the Issuers Managers No relevant effects were observed on the shareholding structure of the Company, or on the shares of Controlling Shareholders and shareholders with over 5% of the capital stock of the Company and of its managers. e) Shareholding Structure Before and after the Operation The transaction is reflected in the table below:
Porto do Pecm Transportadora de Minrios S.A. Before ENEVA 100% Afterwards ENEVA 50% EDP 0% EDP 50%
The transaction did not result in any change to the shareholding structure of the Company. MPX E.ON Participaes S.A. a) and b) Events and Main Business Conditions On April 17, 2012, the Company entered into definitive agreements with E.ON SE, relating to the setting up of a 50:50 joint venture under the name MPX E.ON Participaes S.A. (MPX E.ON), which was completed on May 25, 2012, as well to the raising of R$1,000,000,063.00 subscribed almost in its entirety by E.ON to obtain interest in the amount of 11.7% in ENEVA. The purpose of the joint venture is the exclusive development of new power generation projects in Brazil and Chile, as well as the development of certain thermal and renewable power projects of the enterprise portfolio already held by ENEVA in those countries that were transferred to the joint venture at book value. In that line, on May 24, 2012, DD Brazil Holdings S.A.R.L, a
86
Version: 32
subsidiary of E.ON SE, joined MPX E.ON, and the Company transferred the corporate interest in its subsidiaries as covenanted in the definitive agreements. Also on May 24, 2012, the partial spin-off of the Company, followed by the merger of the spun-off portion of its net equity into CCX Carvo da Colmbia S.A. was approved in a Special Shareholders Meeting. On the same occasion, the amendment to the Bylaws of the Company due to the capital reduction resulting from the partial spin-off, without the cancellation of shares, was also approved. c) Companies involved ENEVAS.A., E.ON SE, DD Brazil Holdings S.A.R.L. and MPX E.ON Participaes S.A. d) Relevant Effects of the Operation on the Shareholding structure, especially on the share of the Controlling Shareholder, of the Shareholder with over 5% of the Capital Stock, and of the Issuers Managers Because of the operation mentioned, Mr. Eike Fuhrken Batistas shareholding decreased to 53.9% and simultaneously, E.ON became the holder of 11.7% of the Companys capital stock. e) Shareholding Structure Before and after the Operation
Below, the shareholding structure of the Company before and after the spinoff of ENEVA, creation of the joint venture and capital increase: Before:
EIKE BATISTA
Free Float
~72%
~28%
50% UTE Pecm I 70% UTEs Parnaba
100% UTE Pecm II 100% UTEs Au
100% UTE Itaqui
51% Amapari Energia 100% UTE Castilla
33% OGX Maranho* 100% Tau Solar
100% Supply & Trading 70% Mina de Carvo Seival
100% UTEs Sul & Seival
87
*70% - Blocos Exploratrios de Gs Natural na Bacia do Parnaba
Version: 32
[UTE: Thermoelectric Power Plant Mina de Carvo: Coal Mine *70% - Natural Gas Exploration Blocks in the Parnaba Basin] Afterwards:
[UTE: Thermoelectric Power Plants Mina de carvo: coal mine Expanso: expansion Suprimento & Trading: Supply and Trading Ventos Elicos: Wind Farms Blocos Exploratrios de Gs Natural na Bacia do Parnaba: Exploration Blocks of Natural Gas in Parnaba Basin]
Acquisition of Wind Farm a) and b) Event and Main Business Conditions In July of 2012, MPX E.ON Participaes S.A. acquired CSRX Energias Renovveis Ltda., 100% of the total capital stock of each one of the 23 SPEs founded for the development of the wind farms Jandara, Pedra Preta I and Pedra Preta II, with a total capacity of 600 MW (Wind Farms). The agreement also includes an option to acquire a project expansion, with an additional capacity of 600 MW, to be exercised by May 31, 2013. The purchase price was R$37,000.00 per installed MW, corresponding to a total amount of R$22.2 million for the initial 600 MW. Additionally, the agreement
88
Version: 32
sets forth the payment of royalties in the amount of R$1.30 per commercialized MWh for the power supply period, up to the maximum limit of 20 years. The same terms will apply for the project expansions, in the event the Company opts to exercise the option. c) Companies involved MPX E.ON Participaes S.A. and CSRX Energias Renovveis Ltda. d) Relevant Effects of the Operation on the Shareholding Structure, especially on the share of the Controlling Shareholder, of the Shareholder with over 5% of the Capital Stock, and of the Issuers Managers No relevant effects were observed on the shareholding structure of the Company, or on the shares of Controlling Shareholders and shareholders with over 5% of the capital stock of the Company and of its managers. e) Shareholding Structure Before and after the Operation
23 Wind Energy SPEs Wind Farm Project Before MPX E.ON Participaes 0% Afterwards MPX E.ON Participaes 100% CSRX 100% CSRX 0%
Below the organization chart of the project:
MPX Energia S.A.
DD Brazil Holdings S..r.l.

* Central Elica Algaroba Ltda. Central Elica Asa Branca Ltda. Central Elica Boa Vista I Ltda. Central Elica Boa Vista II Ltda. Central Elica Boa Vista III Ltda. Central Elica Bonsucesso Ltda. Central Elica Bonsucesso II Ltda. Central Elica Milagres Ltda. Central Elica Morada Nova Ltda. Central Elica Ouro Negro Ltda. Central Elica Pau Branco Ltda. Central Elica Pau DArco Central Elica Pedra Branca Ltda. Central Elica Pedra Rosada Ltda. Central Elica Pedra Vermelha I Ltda. Central Elica Pedra Vermelha II Ltda. Central Elica Santa Benvinda I Ltda. Central Elica Santa Benvinda II Ltda. Central Elica Santa Luzia Ltda. Central Elica Santo Expedito Ltda. Central Elica So Francisco Ltda. Central Elica Ubaeira I Ltda.
50% 50% MPX E.ON Participaes S.A.
100%
89
Version: 32
Investment Agreement between Eike Fuhrken Batista and E.ON SE a) and b) Event and Main Business Conditions On March 27, 2013, Mr. Eike Fuhrken Batista and E.ON SE entered into an Investment Agreement. After verifying all conditions precedent provided for in the Shareholders Agreement, on May 29, 2013, E.ON SE, through its subsidiary DD Brazil Holdings S.A.R.L, acquired 141,544,637 shares issued by the Company and held by Mr. Eike Fuhrken Batista and by certain shareholders of ENEVA, holding purchase options for shares issued by ENEVA representing 24.47% of its share capital. Additionally, E.ON and Mr. Eike Fuhrken Batista entered into a shareholders agreement that governs, among others, the exercise of the voting rights and transfer restrictions to shares in our Company. c) Companies involved Eike Fuhrken Batista, E.ON SE and DD Brazil Holdings S.A.R.L. d) Relevant Effects of the Operation on the Shareholding structure, especially on the share of the Controlling Shareholder, of the Shareholder with over 5% of the Capital Stock, and of the Issuers Managers and Shareholding Structure Before and after the Operation The transaction will result in the following change to the shareholding structure of the Company:
Shareholding structure before the transaction:
EIKE BATISTA 11.7% 53.5%
Other
34.8%
90
MPX-E.ON 50% 50%
Version: 32
Shareholding structure projected after the transaction:
EIKE BATISTA 36.2% 29.0%
Other
34,8%
Acquisition - Mabe Brasil Ltda. a) and b) Event and Main Business Conditions On March 27, 2013, the Company informed the market that, together with EDP and in equal proportions, it had completed the acquisition of 100% of the shares of MABE Brasil Ltda., a consortium made up of the companies Maire Tecnimont SpA and Grupo Efacec, with regard to the management of the works of Pecm, Itaqui and Pecm II, for the symbolic amount of R$1.00. c) Companies involved ENEVAS.A., EDP Energias do Brasil S.A. and MABE Brasil Ltda. d) Relevant Effects of the Operation on the Shareholding structure, especially on the share of the Controlling Shareholder, of the Shareholder with over 5% of the Capital Stock, and of the Issuers Managers No relevant effects were observed on the shareholding structure of the Company, or on the shares of Controlling Shareholders and shareholders with over 5% of the capital stock of the Company and of its managers. e) Shareholding Structure Before and after the Operation
91
Version: 32
MABE Brasil Ltda. Before ENEVA EDP Consortium Maire and Efacec 100% Consortium Maire and Efacec 0%
0% Afterwards ENEVA
0% EDP
50%
50%
Acquisition of Parnaba III a) and b) Event and Main Business Conditions On April 5, 2013, ENEVA informed the market that it had completed the acquisition of the entire capital stock of Parnaba III by ENEVA, MPX E.ON and Petra Energia S.A. On March 26, 2013, the authorization of the Mining and Energy Ministry for change of fuel and transfer of the Enterprise to a new location was published. The project with an authorization for the construction of a thermoelectric power plant with a capacity of 176 MW was transferred to the Parnaba Basin where ENEVA is currently building 1,369 MW of which 1,193 MW are already included in long-term agreements within the Regulated Market. The additional capacity, with its operation start scheduled for May 2013, will supply the contracts of Parnaba III that contracted the sale of energy in the New Power Auction A-5 of 2008, in the form of Agreements for Electric Power Commercialization on Regulated Markets (CCEARs), with an average of 98 MW, at a price of R$189.9/MWh and may receive an annual fix income of R$93.5 million (both amounts on the base date of November 2012), provided that the applicable agreement provisions are complied with by the parties. The CCEARs have a validity of 15 years, starting in 2013. c) Companies involved MOX Energia S.A., MPX E.ON Participaes S.A. and Petra Energia S.A. d) Relevant Effects of the Operation on the Shareholding Structure, especially on the share of the Controlling Shareholder, of the Shareholder with over 5% of the Capital Stock, and of the Issuers Managers
92
Version: 32
No relevant effects were observed on the shareholding structure of the Company, or on the shares of Controlling Shareholders and shareholders with over 5% of the capital stock of the Company and of its managers. e) Shareholding Structure Before and after the Operation The shareholding structure of the Company was not changed due to this operation. The only change was an increase in the indirect interest of the Company in Parnaba III. The structure below illustrates the current shareholding structure of Parnaba III:
50%
MPX E.ON Participaes

50% 50% 50%
Parnaba Participaes
30% 70%
Parnaba III (Nova Vencia)
Assignment of Onshore Exploration Blocks by OGX Petrleo e Gs Participaes S.A. a) and b) Event and Main Business Conditions In May 2013, ENEVA informed the market that it had signed an agreement with OGX Petrleo e Gs Participaes S.A. (OGX), the subject matter of which is the assignment to ENEVA of a 50% interest in the PN-T-168, PN-T153, PN-T-113, and PN-T-114 onshore exploration blocks (Blocks), located in the Parnaba Basin, acquired by OGX at the 11th Bidding Round held by the Brazilian Petroleum, Natural Gas and Biofuels Regulatory Agency (ANP), on May 14, 2013. ENEVA will acquire a 50% interest in the Blocks under the same terms offered by OGX at the ANPs 11th Bidding Round. The purchase price paid by ENEVA, therefore, will be equivalent to half of the signing bonus and other exploration and development commitments made in
93
Version: 32
the proposals submitted by OGX to ANP. The assignment, which is the subject matter of the Agreement, shall be submitted to ANPs approval as soon as the Block concession contracts are signed. c) Companies involved ENEVAS.A. and OGX Petrleo e Gs Participaes S.A. d) Relevant Effects of the Operation on the Shareholding structure, especially on the share of the Controlling Shareholder, of the Shareholder with over 5% of the Capital Stock, and of the Issuers Managers No relevant effects were observed on the shareholding structure of the Company, or on the shares of Controlling Shareholders and shareholders with over 5% of the capital stock of the Company and of its managers. e) Shareholding structure Before and after the Operation The transaction did not result in any change to the shareholding structure of the Company.
94
Version: 32
6.6 Information of filing for bankruptcy on the basis of relevant amount or judicial or extrajudicial reorganization
Until the date of this Reference Form, no bankruptcy or judicial or extrajudicial reorganization has been filed for against the Company.
95
Version: 32
6.7 Other Relevant Information
There is no information that the Company deems relevant with regard to Item 6 other than the information disclosed in the other items of this Form.
96
Version: 32
7.1 - Description of the activities of the issuer and its subsidiaries

We are a diversified energy company with supplementary business in electrical energy generation and natural gas exploration and production in South America. Our current energy generation basis is focused on thermal sources (mineral coal, natural gas and diesel) and we have also been developing supplementary sources, such as solar energy and wind generation projects. This diversification is particularly strategic for the Brazilian energy matrix, which is strongly dependent on hydroelectric energy. We currently hold an interest in five power plants, fully owned by us or through partnerships, already in operation, located in the states of Amap, Cear and Maranho, totaling an installed capacity of 1,780 MW: Energia Pecm: located in the municipality of So Gonalo do Amarante, state of Cear, Energia Pecm is a 50/50 partnership between ENEVA and EDP. Energia Pecm uses mineral coal brought from the Port of Pecm and has two generation units with installed capacity of 360 MW each. The first unit started operating commercially in December 2012 and the second one in May 2013. At the A-5 new energy auction, held in October 2007, the plant contracted 615 MW on average, for a period of 15 years, which will enable receipt of annual fixed revenue of up to R$567,2 million (effective date: November 2012), indexed to the IPCA (provided that the applicable agreement provisions are complied with by Energia Pecm and by energy purchasers), and a variable revenue to cover (fuel, operating and maintenance) costs incurred upon dispatching of the plant by the National System Operator (ONS). Itaqui: located in the Industrial District of So Lus, state of Maranho, Itaqui is a mineral coal-fuel thermal plant wholly owned by our Company, with installed capacity of 360 MW. Itaqui contracted the sale of 315 MW on average, for a period of 15 years, at the A-5 new energy auction held in October 2007, which will enable receipt of annual fixed revenue of R$299.8 million (effective date: November 2012), indexed to the IPCA (provided that the applicable agreement provisions are complied with by Itaqui and by energy purchasers. The energy supply agreement additionally sets forth a variable revenue to cover (fuel, operating and maintenance) costs incurred upon dispatching of the plant by the National System Operator (ONS). Itaqui started operating commercially in February 2013. Parnaba I: located, in the Parnaba Basin, in the city of Santo Antnio dos Lopes, state of Maranho, Parnaba I is a natural gas-fueled thermal plant, in which we hold an interest of 70%, comprised of four natural gas turbines of 169 MW of capacity each, totaling an installed capacity of 676 MW. The plant contracted the sale of 450 MW on average, for a period of 15 years, at the A-5 new energy auction held in September 2008, which will enable receipt of annual fixed revenue of R$421.2 million (effective date: November 2012), indexed to the IPCA (provided that the applicable agreement provisions are complied with by Parnaba I and energy purchasers). The natural gas will be produced in blocks explored by OGX Maranho, at the Parnaba Basin, state of Maranho. The energy supply agreements additionally set forth a variable revenue to cover (fuel, operating and maintenance) costs incurred upon dispatching of the plant by the National System Operator (ONS). The plants fourth and last turbine received authorization to start operating commercially on April 12, 2013; thus, 97
Version: 32
Parnaba I now generates 676 MW, with all its turbines in commercial operation. Amapari: located in the municipality of Serra do Navio, state of Amap, Amapari is a dieselfueled thermal plant in which we hold a majority interest (51%). The remaining interest is held by Eletronorte. Amapari has been operating commercially since November 2008, with installed capacity of 21.6 MW. Additionally, we estimate variable revenues from amounts arising from the Supplied Energy agreement, divided into variable supplied energy regarding O&M and variable supplied energy regarding fuel acquisition cost. The revenues are adjusted annually on the basis of the variation of IPCA. On the other hand, amounts referring to Supplied Energy regarding Fuel Acquisition Cost will be adjusted according to the cost det ermined by ANEEL. Tau: located in the municipality of Tau, state of Cear, Tau is a business venture that generates energy from the sun and that is wholly owned by our subsidiary MPX E.ON. In operation since July 2011, Tau has installed capacity of 1 MW, and holds an authorization issued by ANEEL and SEMACE to gradually increase its installed capacity to up to 5 MW. We also have four power plants in construction phase, which are wholly owned or owned through partnerships (including through MPX E.ON., in which we hold an interest of 50%): Pecm II: located in the municipality of So Gonalo do Amarante, state of Cear, Pecm II is a mineral coal-fueled thermal plant of which we hold 99.7%, with installed capacity of 360 MW. At the A-5 new energy auction held in September 2008, Pecm II contracted the sale of 276 MW on average, for a period of 15 years, which will enable receipt of annual fixed revenue of nearly 269.2 million (effective date: November 2012), indexed to the IPCA (provided that the applicable agreement provisions are complied with by Pecm II and energy purchasers). The energy supply agreement additionally sets forth a variable revenue to cover (fuel, operating and maintenance) costs incurred upon dispatching of the plant by the National System Operator (ONS). The power plant is expected to start operating in the second quarter of 2013. In January 2013, ANEEL approved the postponement of the agreement date of the beginning of energy supply of UTE Pecm II until June 1, 2013, or the effective date of beginning of commercial operation of the plants, whichever occurs first. Parnaba II: In August 2011, we won the A-3 new energy auction, which ensured contracting of electrical energy from UTE Parnaba II, in which we hold an interest of 100% of the capital stock and whose installed capacity will be 517 MW. According to the supply agreement secured at the auction, Parnaba II, located in the Parnaba Basin, will start operating in February 2014, on an open cycle basis and, subsequently in June 2014, it will start operating on a combined cycle basis, supplying a total of 400 MW on average in 2014 and a total of 450 MW on average as of 2015. The energy agreement obtained at the auction is valid for 20 years and ensures receipt of annual fixed revenue of R$353.1 million (effective date: November 2012), annually adjusted by the IPCA (provided that the applicable agreement provisions are complied with by Parnaba II thermoelectric power plant and energy purchasers). The natural gas will be produced in blocks explored by OGX Maranho, at the Parnaba Basin, state of Maranho. The energy supply agreement additionally sets forth a variable revenue to cover (fuel, operating and maintenance) costs incurred upon dispatching of the plant by the National System Operator (ONS). Lastly, Petra has the option to 98
Version: 32
participate in up to 30% of the project, upon equivalent capital contribution . Parnaba III: In April 2013, we acquired the total capital stock of UTE MC2 Nova Vencia, which is currently owned in the following proportion: our Company (35%), MPX E.ON (35%) and Petra (30%). Parnaba III, under construction in the Parnaba Basin, which is expected to start operating in the second quarter of 2013, will be a thermoelectric power plant with installed capacity of 176 MW and will supply Nova Vencia agreements, which contracted the sale of 98 MW on average, for a period of 15 years at the A-5 new energy auction held in September 2008 (effective date: November 2012). The energy supply agreement ensures receipt of an annual fixed revenue of R$93.5 million (effective date: November 2012), annually adjusted by the IPCA (provided that the applicable agreement provisions are complied with Parnaba III thermoelectric power plant and by energy purchasers), and a variable revenue to cover (fuel, operating and maintenance) costs incurred upon dispatching of the plant by the National System Operator (ONS). Parnaba IV: In April 2013, our Company entered into an agreement with Kinkross Brasil Minerao S.A. to implement a natural gas-fueled thermal plant with installed capacity of 56 MW, to be constructed in the Parnaba Basin, state of Maranho. The annual value of the agreement is approximately R$54 million. Parnaba IV is owned in the following proportion: our Company (35%), MPX E.ON (35%) and Petra (30%), and the beginning of its commercial operations is scheduled for December 2013.
The table below summarizes the energy supply agreements entered into by our Company and the flow of revenues estimated for the next years (provided that the applicable agreement provisions are complied with by the respective parties):
Total ENEVA direct interest MPX E.ON direct interest Annual fixed revenue (in millions of R$)(1) 283.5 Fuel PPA period Start-up date(COD)
Energia Pecm Itaqui Pecm II Parnaba I
720 MW
50%
Coal
2012-2026
12/2012
360 MW 360 MW 676 MW
100% 100% 70% 100% (*)
299.8 269.2 294.8
Coal Coal Natural gas Natural gas Natural gas Natural gas Diesel -
2012-2026 2013-2027 2013-2027
02/2013 06/2013(2) 04/2013 02/2014(2) 06/2013(2) 11/2013(2)
Parnaba II
517 MW
247.2
2014-2033
Parnaba III
176 MW
35%
35%
49.1
2013-2027
Parnaba IV
56 MW
35%
35%
28.4
2013-2018
Amapari Tau Total
21.6 MW 1 MW 2,887.6 MW
51% -
100%
1.472.1
11/2008 07/2011
99
Version: 32
Note 1. Adjusted Capacity / Energy Sold / Annual Fixed Revenue: data adjusted considers our interest in each project Note 2. Fixed Revenue is annually adjusted by the IPCA and represents ENEVAs interest in the ventures (amounts represented as of the effective date of November 2012). (*) Petra has the option to participate in up to 30% of the project, upon equivalent capital contribution. (1) Annual pro rata fixed rate (2) Dates estimated.
We have projects under study and development, whose construction has not started yet, distributed across the regions of Brazil and Chile, which will use diversified energy sources, such as mineral coal, natural gas and wind energy. These projects do not yet have energy supply contracts and, regarding the projects in Brazil, still depe nd on the ANEELs granting. UTE Au: UTE Au, 50/50 owned by our Company and MPX E.ON, will be strategically located in the industrial complex of Au superport, in So Joo da Barra, state of Rio de Janeiro. With a total licensed capacity of up to 5,400 MW, the power plant is authorized to install 2,100 MW using mineral coal will be used as input. Additionally, UTE Au has a preliminary license to construct a natural gasfueled thermal plant, with capacity of up to 3,330 MW. UTE Sul and UTE Seival: located in the municipality of Candiota, state of Rio Grande do Sul, the plants having our Company (50%) and MPX E.ON (50%) as partners integrate generation of energy into exploration of natural resources and will be supplied with Seival Mines mineral coal. This is our venture in partnership with Copelmi, in the proportion of 70% and 30%. When its full commercial operation starts, UTE Sul and UTE Seival will add 1,327 MW of installed capacity to the SIN, (i) 727 MW of installed capacity originated from UTE Sul and (ii) 600 MW of installed capacity originated from UTE Seival. UTE Castilla: the UTE Castilla project, proportionally held by us and MPX E.ON, consists of a thermal power plant fueled by mineral coal. Its installed capacity is still being analyzed. Located 80 km from the city of Copiap, in Atacama, Chile, a region with a significant repressed demand for energy and water, this project is expected to be in connection to the Central Interconnected System. Ventos Wind Complex: this project is entirely controlled by MPX E.ON. It is located in the State of Rio Grande do Norte and comprises the cities of Jandara, Lajes and Pedra Preta. With total installed capacity estimated of 600 MW and planned expansion of up to 600 MW, we believe that this project is an asset with industrial scale, being also highly competitive due to its proximity to the basic network (30 km) and high factor of average liquid capacity (P50) estimated at 48%, according to our analysis. Parnaba (expansion): We are developing a thermal complex for generation of energy with natural gas as a result of a partnership between ENEVA, MPX E.ON and Petra. These companies hold interests of 35%, 35% and 30%, respectively. We hold an installation license for generation of additional 2.3GW in the Parnaba Basin. This additional energy may be contracted as OGX Maranho goes ahead with its exploration activities in the blocks of the Parnaba Basin and identifies new wells that may be commercially feasible for production of natural gas.
In addition to our developments and projects for energy generation, the management of natural resources required to such generation such as mineral coal and natural gas (through our one third interest in OGX Maranho, which holds an interest in eight exploratory blocks with high potential for natural gas in the Parnaba Basin, as described 100
Version: 32
below, as well as our 70% interest in Seival Mine) is one of our greatest competitive advantages. We invest in mineral assets with strategic locations and with capacity to supply our plants. Our interest in natural resource assets is described below: Blocks in the Parnaba Basin: OGX Maranho, a partnership between us (one third of capital stock) and OGX (two thirds of capital stock), is the controlling shareholder in the concession of eight onshore exploratory blocks located at the Parnaba Basin, in an area of approximately 24,500 km, distributed in the states of Maranho, Piau, Tocantins and a small portion of the states of Par, Cear and Bahia, of which one block in partnership with the consortium formed by Imetame Energia, DELP Engenharia Mecanica, Orteng Equipamentos (50%/ 50%), and 7 blocks in partnership with Petra, where OGX Maranho holds a 70% interest. According to estimates by DeGolyer & MacNaughton dated April 2011, total contingent and prospective resources estimated in these blocks surpass 11 Tcf. In addition, in May 2013, the Company signed an agreement with OGX, the subject matter of which is the assignment to the Company of a 50% interest in the PN-T-168, PN-T-153, PN-T-113, and PN-T-114 onshore exploration blocks, located in the Parnaba Basin, acquired by OGX at the 11th Bidding Round held by ANP on May 14, 2013. The Company will acquire a 50% interest in such blocks under the same terms offered by OGX at the ANPs 11th Bidding Round. The purchase price paid by the Company, therefore, will be equivalent to half of the signing bonus and other exploration and development commitments made in the proposals submitted by OGX to ANP. The assignment, which is the subject matter of the Agreement, shall be submitted to ANPs approval as soon as the final concession contracts are signed. Seival Mine: located in the municipality of Candiota, in the State of Rio Grande do Sul, 375 km from Porto Alegre, the Seival Mine, in which we hold a 70% interest, is installed next to the UTE Sul and UTE Seival plants, which will be supplied with mineral coal from this mine. As result of our partnership with Copelmi in the proportion of 70% and 30%, respectively, Seival Mine may also have its production traded in the local market. Its proven fuel reserves total 152 million tons, exceeding the amount needed to operate UTE Sul, whose licensed installed capacity is 727 MW, or UTE Seival, whose licensed installed capacity is 600 MW. The mines certified resources total 611 million tons of coal, an amount that exceeds the quantity needed to operate the two plants together. These figures resulted from a comprehensive drilling and research program carried out in the area, and they were certified by John T. Boyd Company in July 1999.
In an innovative manner, we also trade energy on the free market through MPX Comercializadora. This positioning is only possible due to the full integration of our energy chain, which includes from the production or purchase of fuel and transportation logistics, to the generation of energy in our plants. Currently, MPX Comercializadora is among the 10 largest companies in Brazil as to the volume of energy traded, according to the Chamber of Electrical Energy Trade.
Business Purpose
The purpose of the Company is the generation, distribution and sale of electricity and interest as partner or shareholder in the capital stock of other civil or commercial companies, in Brazil or abroad, whatever the business
101
Version: 32
purpose may be.
102
Version: 32
7.2 - Information on operating segments
(a)
Products and services sold
The revenues from ENEVAs activities come from the three activities performed by its direct and indirect subsidiaries. Power Generation Electricity, which is provided to free and special consumers, other generators and traders in bilateral agreements, and to distributors through Electric Power Sales Agreements on the Regulated Market; ENEVA is a company in the Brazilian private sector with a full strategy of integration of the energy chain, the production of electricity being its main business. ENEVA currently operates in the North and Northeast submarkets and it has projects under study and development, whose construction has not started yet, in the South and Southeast submarkets. It is also present in all submarkets of the country. Today, there are 12 generation business under development, most with sites already identified and part of them with their energy traded. Its generation comes primarily from thermal sources (mineral coal, natural gas, and diesel oil), but also has additional sources, such as solar and wind energies. This diversification is strategic for the Brazilian energy matrix, which today depends heavily on the hydroelectric power plants.
Electricity Sales Revenue arising from sale of energy results from the sale of electricity purchased for resale by the invitee MPX Comercializadora de Energia Ltda. (MPX Comercializadora). Due to the adoption by the Company, as from January 1, 2013, of new accounting standards (IFRS 11), MPX Comercializadora has, since then, been registered by the equity method, as a result of which the Company no longer records revenues from by MPX Comercializadora in its consolidated financial statements.
Other services Together with OGX, ENEVA holds an interest in eight exploration blocks with high potential of natural gas in the Parnaba Basin, State of Maranho, Brazil, through OGX Maranho, of which 1 block in partnership with a
103
Version: 32
consortium formed by Imetame Energia, DELP Engenharia Mecnica, Orteng Equipamentos (50%/50%), and another 7 blocks in partnership with Petra, where OGX Maranho holds a 70% interest. ENEVAs generation plants will also be the main consumers of natural gas produced in blocks of OGX Maranho. In addition, the Company invests in coal assets in southern Brazil. Seival Sul Minerao Ltda., located in the municipality of Candiota, State of Rio Grande do Sul, with operating license already issued, has 152 million tons of proven reserves and 459 million tons of total resources, according to John T. Bovd report. (b) Revenues from the sector and their share in the Companys net revenues The Companys operating revenues from business sectors, as well as their share in total revenue of the Company, are shown in the tables below:
3/31/2013 Net Revenues 196.1 196.1 % of total 12/31/2012 Net Revenues 215.3 0.8 186.8 88.0 490.9 % of total 12/31/211 Net Revenues 33.3. 135.0 0.4. -0,5 168.3. % of total 12/31/2010 Net Revenues 35.6 62.9 98.5. % of total
(in R$ million) Electricity generation Electricity trader Supplies Other Spin-off/transfers Eliminations and transfers Total Net Revenues
100.0% 0.0% 0.0% 0.0% 0.0% 0.0% 100.0%
43.9% 0.00% 0%. 38.1% 38.1% 38.1% 100.00%.
19.8%. 80.2%. 0.2%. 0.0% 0.0% 0.0% 100.0%.
36.13%. 63.9%. 0.0%. 0.0% 0.0% 0.0% 100.00%.
(c) Profit or loss resulting from the sector and its share in the issuers net income. The revenues from the sectors of Company business, as well as their share in the net loss of the Company, are shown in the tables below:
3/31/2013 Net income -112.1. -0.1 -250.9 % of total 12/31/2012 Net income -182.6. -0.7 -435,2 -17.9 -11.4 % of total 12/31/211 Net income 168.2. 2.4 49.1 -408.6 -2.0 % of total 12/31/2010 Net income -125.7. 0.2 -21.6 -256.3 % of total
(in R$ million) Electricity generation Electricity trader Supplies Corporate Other Spin-off/transfers
44.7%. 0.0% 0.0% 100.0% 0.0% 0.0%
42.0%. 0.0% 0.2% 100.0% 4.1% 2.6%
41.2%. -0.6% 12.0% 100.0% 0.0% 0.0%
49.2%. -0.1% 8.4% 100.0% 0.0% 0.0%
104
Version: 32
3/31/2013 Eliminations and transfers Total Net Income (Loss) -112.1. -250.9 44.7%. 100.0%
12/31/2012 212.6 434.2 -48.9 100.0%
12/31/211 220.3 -408.6 -53.9% 100.0%
12/31/2010 147.1 -256.3 -57,4% 100.0%
105
Version: 32
7.3 Information on products and services related to operating segments
(a) Characteristics of the production process Electricity production is nothing but a process of energy conversion. For example, at mineral coal plants, the chemical energy of fuels (primary energy) enables conversion into thermal energy (heat) of hot gases inside equipment known as steam boilers. Then, the electricity is converted into potential energy (overheated steam), and the energy resulting thereof is converted into mechanical energy for rotating the steam turbine. Finally, the electrical generator converts the mechanical energy into electromagnetic energy, that is, electricity, which is the final form of the use of energy. This process is also in place for natural gas fueled plants, and the thermal energy source derives from the burning of natural gas.
Regarding diesel-fueled power generation plants (as in the case of Amapari), energy conversion takes place through the internal combustion of diesel, which is turned into mechanical energy for engines and electromagnetic energy for generators. It is also possible to generate electricity using other forms of conversion, like, for example, taking advantage of sunlight energy by converting it into electrical energy through appropriate photovoltaic panels, as in the Tau plant, as described below.
Energy generation scheme for mineral coal fueled plants:
106
Version: 32
Steam Boiler Superheated steam Fuel Fuel Burning Air Hot Gases Water Fuel (Chemical Energy) Hot Gases (Thermal Energy) Overheated steam (Potential Energy) Turbogenerator Inbound overheated steam
107
Version: 32
Steam turbine Electrical Generator Outbound steam Turbine rotation (Mechanical Energy) Electricity (Electromagnetic Energy)
The existing technologies for generation of electrical energy are in general very strong, and been used for a long time now with a high level of confidence. In general, the risks attributed to the continuity of the plants operations are connected to failures in the systems or equipment, and they are mitigated through predictive and preventive maintenance activities, as well as through the action of operation and maintenance professionals, who are systematically trained. As a rule, such events are minimal, and can be easily fixed. In any case, the Company has contracted insurance coverage for operational and engineering risks, which also cover equipment and machines used in the production of electrical energy, as well as the works and installations performed. Risks inherent to the production process Technologies used by the company in the electricity generation processes are widely used worldwide and enjoy high levels of reliability. Risks inherent to the production process, which may result in interruption of activities, are mainly related to: (i) mechanical problems and failures in the turbines and other plant equipment, such as valves, fans, or engines/motors (ii) unavailability of equipment and spare parts (iii) interruption in fuel or water supply or meteorological interferences; and (iv) work disruption, strikes, social unrest, and other labor disputes
108
Version: 32
ELECTRIC ENERGY GENERATION
(A)
Thermoelectric Plants (UTE)
Amapari Amapari is a diesel-fired power generation plant, consisting of twelve 1,800 kW diesel engines, with a total installed capacity of 21.6 MW. The plant is located in the Municipality of Serra do Navio, about 200 km from Macap, the capital of the State of Amap. The plant diesel fuel is supplied by Petrobras Distribuidora S.A., located in the port of Santana. The figures below describe the diesel-fired power generation process in Serra do Navio:
Key: Chimney Exhaustion Diesel Oil Generator Set Air Radiator
109
Version: 32
Key - Base for receipt and storage of fuel oil - Engine Room - Step-up Substation - Transformer - M - Combustion Engines - Diesel - G - Electric Generators - Electromechanical Auxiliary Services - Administrative Support and Maintenance Buildings The diesel-fired generators are supplied by tank trucks that use the road connecting the Municipality of Serra do Navio to Macap, the capital of the State of Amap. The undertaking holds the Operating License, No. 172/2013, issued by the Secretary of State of the Environment of Amap on March 25, 2013 and with expiration date on March 25, 2016. Energia Pecm A coal-fired thermoelectric plant located in the Municipality of So Gonalo do Amarante, State of Cear, with a 720 MW installed capacity, consisting of two power generating units with 360 MW installed capacity each. Energia Pecm (on which ENEVA and EDP currently hold a 50% interest each) sold 615 average MW in the New Energy Auction A-5/2007. The project was granted Operating License No. 496/2001, issued by the State Superintendence of the Environment of Cear SEMACE, on December 12, 2001, subsequently renewed on December 28, 2012, with the issuance of Operating License No. 1062/12 (valid until December 28,2015), as well as Operating License No. 889/12 for the transmission line (valid until September 26, 2015). Its first unit has started commercial operation on December 1, 2012. Pecm II
110
Version: 32
A coal-fired thermoelectric plant with expected 360 MW power generation capacity still under construction. Located in the Municipality of So Gonalo do Amarante, State of Cear, the plant uses the clean coal burning technology. Pecm II (with a 100% ENEVA ownership) sold 276 average MW in the New Energy Auction A-5/2008, enabling receipt of an Broad Consumer Price Index (IPCA) indexed fixed income for 15 years, from 2013 (as long as the parties comply with the applicable contractual provisions). With an Operating License issued by the Environmental Agency of the State of Cear (Semace) on February 8, 2013, under No. 09/2013 (valid until February 8, 2016), and Installation License No. 9/2013 (valid until February 15, 2015) for the transmission line, the plant has the whole key equipment secured. Itaqui Porto do Itaqui, a coal-fired thermoelectric plant, has a 360 MW power generation capacity. Itaqui traded 315 MW on average, ensuring fixed revenue during 15 years as from January 2013 of approximately R$220.7 (base: Jan/07), indexed to the IPCA. The Operating License was issued by IBAMA on October 26, 2012, under No. 1101/2012 (valid until October 26, 2017). Itaqui also holds Operating License No. 1061/2011 for the transmission line (valid until December 16, 2017). The plants commercial operation started in February 2013. In November 2012, Itaqui performed the first synchronization with the National Interconnected System (SIN) and, on February 5, 2013, it started commercially supplying energy to SIN. The plant investment amounts to R$2.2 billion, to be used in environmental control technologies. This makes it possible to significantly reduce gas emissions. Parnaba Complex ENEVA is deploying a natural gas thermoelectric power generation complex which currently has the following projects: Parnaba I, in operation, Parnaba II, Parnaba III and Parnaba IV, under construction. Natural gas is produced in OGX Maranho exploration blocks, in a partnership between ENEVA (one third of capital stock) and OGX (two thirds of capital stock), in the Parnaba River Basin (Maranho). This thermoelectric power generation complex, called Parnaba, is strategically located: in the Municipality of Santo Antnio dos Lopes, on the gas field, and near the 500 kV President Dutra - Miranda II line, which was been sectioned for inserting the complex connecting substation.
111
Version: 32
The volume of potentially exploitable resources in these reservoirs indicates the possibility of deploying an up to 3,722 MW power generation complex. This plant will consist of combined and open cycle modules, allowing greater flexibility for natural gas use and for power trading. Parnaba I Parnaba is comprised of four natural gas-fired 169 MW turbines, with total installed capacity of about 676 MW. The power plant contracted the sales of 450 MW on average for a period of 15 years at the A-5 auction in September, 2008, which will enable receipt of annual fixed revenue of up to R$421.2 million (base date: November 2012), indexed to the IPCA. The projects Operating License was issued by the State Office of Environment and Natural Resources of Maranho SEMA/MA on December 21, 2012 (LO No. 559/2012), valid until December 21, 2016. Parnaba II Also in August 2011, ENEVA won the A-3 energy auction with the Parnaba II project (beginning of the 2nd stage of the Parnaba Complex). More than R$6.5 billion were contracted, over a 20-year period, from a combined cycle natural gas power plant being installed in the Municipality of Santo Antnio dos Lopes, in the State of Maranho, and which will have about 500 MW of installed capacity. The projects installation license was issued by SEMA/MA (LI No. 274/11) valid until December 27, 2013. Parnaba III In April 2013, the Company completed, in a partnership with Petra Energia S.A. and MPX E.ON Participaes S.A., the acquisition of the entire capital stock of the UTE MC2 Nova Vencia (currently, UTE Parnaba III Gerao de Energia S.A.). The project was granted an installation license (LI No. 03/12), valid until November 11, 2013, for construction of a thermoelectric plant with a 176.2 MW capacity, and it sold energy in the New Energy Auction A-5, in 2008, in the form of CCEARs, totaling 98 average MW, at a price of R$189.90/MWh, enabling receipt of fixed annual revenue of R$93.5 million (both figures by the November 2012 base date) (as long as the parties comply with the applicable contractual provisions). The CCERAs are valid for 15 years. Parnaba IV Also in April 2013, the Company, with MPX E.ON Participaes S.A. and Petra Energia S.A., executed a contract with Kinross Brasil Minerao S.A. for deployment of a natural gas thermoelectric plant, with a 56 MW installed capacity, which holds an installation license issued by SEMA/MA (LI No. 33/13), valid until March 22, 2015, also being installed in the Parnaba Basin, State of Maranho. The annual contract amount is approximately R$54 million.
112
Version: 32
UTE Au A ENEVA and E.ON joint venture is developing a major two-stage project, totaling 5,400 MW, in So Joo da Barra, North of the State of Rio de Janeiro. It is called UTE Au. In one stage, it will use coal for producing 2,100 MW through four 525 MW generating units. Another UTE Au stage will be supplied with natural gas and will have a 3,300 MW capacity, with ten gas and five steam turbines. Strategically located within the Au Superport Industrial Complex, the plant has been granted Installation License No. IN000882, for which a renewal application has been submitted, for coal-fired generation of 2,100MW, in addition to the preliminary license (LP) IN015964, also in the course of renewal, that approves the environmental feasibility, conception and location of a natural-gas fired thermal plant with total installed capacity of 3,300MW.
UTE Sul Viewed as a great business opportunity and integrating natural product exploration, generation, and trading, the Sul thermoelectric plant (TPE) will be supplied with the Seival Mine coal, an PPX project in partnership with Copelmi (70/30). Located in the Municipality of Candiota, State of Rio Grande do Sul, the plant is expected to have a 727 MW installed capacity, with two 363.5 MW generating units. The project also includes construction of a DAM Sul DAM which will enable, in addition to water supply to Sul TPEs production process, a greater availability of water in the region (multiple use dam). The Sul Dam has been granted a Preliminary License (LP) issued by the State Foundation for Environmental Protection of Rio Grande do Sul FEPAM (LP No. 601/10), and renewal was applied for in January 2012. The Preliminary License (LP) of Sul TPE - certifying its environmental feasibility and establishing the requirements to be met in the following stages - was granted in November 2009 for a 600 MW capacity and rectified to the current 727 MW by the Brazilian Institute of Environment and Renewable Natural Resources http://www.ibama.gov.br/(IBAMA). In August 2012, the Company applied for renewal of this LP, its effectiveness being then automatically extended. UTE Seival The opportunity to add further value to the Candiota coal reserve, generating competitive gains due to synergy with UTE Sul, resulted in the acquisition of Seival thermoelectric plant in November 2010. The UTE Seival has an Installation License (LI) No. 589/2009, issued by IBAMA, valid until February 18, 2014, for an output of 600 MW, on a plot
113
Version: 32
located within ENEVAs concession area. When commercial operation begins, the UTE Sul and UTE Seival complex will add 1,327 MW of installed capacity to the National Interconnected System (SIN). Both plants will be supplied by the Seival Mine coal, a ENEVA venture in a partnership with Copelmi (70/30). UTE Castilla The UTE Castilla is strategically located in a region with a significant unmet energy and water demand: Copiap, Atacama, Chile. It is a coal-fired thermoelectric plant with an installed capacity under analysis.
(B)Renewable Energy Tau Power Plant (SPP) The Tau SPP has 4,680 photovoltaic panels to convert solar energy into electricity in an area of approximately 12,000 square meters. Around R$10 million were invested in the unit, whose initial capacity is 1 MW. The design also allows the gradual plant expansion to a capacity of up to 5 MW. Since April 2011, Tau has Operating License No. 133, issued on June 20, 2012, by the Environmental Agency of the State of Cear (SEMACE), valid until February 28, 2014, besides ANEELs authorization to produce up to 5 MW. In August, 2011, the Company announced a partnership with GE Company for doubling the installed capacity of Tau from 1 MW to 2 MW, which is still under analysis. The agreement states that the U.S. company will provides the entire package of photovoltaic technology equipment and systems. With the expansion, over 6,900 panels will be installed in the solar plant. Ventos Wind Farm Complex The Ventos wind farm complex is located in Rio Grande do Norte, in the municipalities of Jandara, Lajes and Pedra Preta, one of the areas with the greatest wind generation potential in Brazil. With a 600 MW total installed capacity and planned expansion to additional 600 MW, totaling 1,200 MW, given its proximity to the basic network (30 km) and the high factor of net average capacity (P50), estimated in 48%, according to the Companys analyses. Currently, 158 MW already hold a Preliminary Licenses.
(b)
Characteristics of the distribution process
The Companys power plants are mostly connected to the National Interconnected System (SIN), to which they send their produced energy
114
Version: 32
through the basic grid, except for the Serra do Navio TEP, located in the State of Amap (having isolated systems). All energy traded by MPX Comercializadora de Energia Ltda. is also sent through SIN. The above mentioned generating plants are the Companys direct or indirect subsidiaries. The SIN and Isolated Systems characteristics are listed in items 7.3 (c), (d), (e), and 7.5. Currently, the Company has Preliminary Licenses for a total of 158 MW. (c) Characteristics of business markets
National Interconnected System and Isolated Systems The Companys business market is power generation and sale in Brazil. Brazil currently has about 128 GW of installed capacity, according to data available on the National Electricity Agency (ANEEL) website, across its existing generating plants, serving more than 61 million electricity consumers in the whole country. This installed capacity includes the National Interconnected System (SIN), the Isolated Systems, international interconnections already in operation, and also Itaipus share imported from Paraguay. The plants in commercial operation are subdivided according to their sources, as described in the table below.
115
Version: 32
Operational Plants Installed Capacity Type Hydroelectric Gas Natural Processed Diesel Petroleum Residual Oil Cane Bagasse Black Liquor Wood Biogas Rice Husk Nuclear Mineral Coal Wind Mineral Coal Paraguay Argentina Import Venezuela Uruguay Total 1,880 200,000 70,000 132,011,894 0.19 0.07 100 2,768 132,011,894 100 No. of plants 1067 110 39 1048 34 369 15 46 19 9 2 12 95 8,822,312 1,304,182 411,435 74,888 36,433 2,007,000 2,664,328 2,092,541 5,650,000 2,250,000 3,481,375 3,968,647 (kW) 84,904,144 11,936,349 1,683,663 % 64.32 9.04 1.29 2.64 1.082 3.01 6.76 0.99 0.31 0.06 0.03 1.51 2.29 1.45 5.46 2.17 8,170,000 6.19 2 12 86 1,990,000 3,024,465 2,092,841 1.51 2.29 1.45 458 10,748,730 8.14 7,450,022 5.64 No. of plants 1067 199 Total (kW) 84,904,144 12,820,092 % 64.32 10.32
Biomass
Source: ANEEL Generation Information Bank (www.aneel.gov.br) in February 7, 2013.
SIN is a large hydrothermal system, with a strong predominance of hydroelectric power plants and multiple owners. SIN covers power plants from the South, Southeast, Midwest, and Northeast regions, as well as part of the North region. Approximately 3,4% of the country power production capacity is outside the SIN, i.e., the so-called Isolated Systems, consisting of smaller electrical systems located mainly in the Amazon region. Electrical Energy Generation Segment In the generation segment, the current agreements on energy sale to which our subsidiaries are a party as sellers are long-term agreements (15 or 20 years) with fixed revenues adjusted by the IPCA index and holding guarantees for transfer of variable costs. In turn, the expansion of the installed capacity for generation in Brazil is mostly made through new energy auctions (regulated market) and, to a lower extent, on the free market. The auctions demand is determined according to the future demand for electrical energy from distribution concessionaires. On the other hand, on the free market, the demand for new generation facilities is influenced by the future demand for electrical energy from free consumers (large energy consumers). Power Trading Segment The trade of electrical energy on the free market is basically influenced by
116
Version: 32
two drivers: the balance between supply and demand for electrical energy from free consumers, and the electric energy prices on the free market. The balance between supply and demand for energy from free consumers is influenced by their own decisions regarding the effectiveness of the agreements (short or long term), and by the demand for electrical energy from these consumers. On the other hand, electrical energy prices on the free market are influenced by various factors. In the short term, they are directly impacted by the Difference Settlement Price (PLD), which, in turn, is impacted by the levels of hydroelectric power plants reservoirs, future hydrological conditions, and supply and demand estimates regarding the electrical system. In the long term, the systems structural conditions for electrical energy supply and demand will largely influence energy prices.
(i) share in each market
Electric Energy Generation
The Companys generating units currently in commercial operation (Serra do Navio TEP, Solara Tau, Parnaba I, Itaqui, and the first turbine of Energia Pecm) have an approximate installed power of 1,780 MW. The following units have won New Energy Auctions and are being built: the second turbine of Energia Pecm (360 MW), Pecm II (360 MW), Parnaba II, III and IV (749 MW). The agreements enable receipt of a minimum annual revenue and an additional variable revenue intended to cover costs (fuel, operation and maintenance) incurred when the power plant is dispatched by the National System Operator (ONS), as long as the parties comply with the applicable contractual provisions.
Power Trading
The Group company authorized to act as a power supplier for SIN is MPX Comercializadora de Energia Ltda. In 2012, the company sold 438 average MW, representing an increase of 247% compared to the amount sold in the previous year. Moreover, in 2012, MPX Comercializadora traded on average 428.19 MW that were not connected with the Companys generation assets, representing a 4.99% share of the independent trading market in the SIN system.
(ii) market competitive conditions
In the generation and trading segments, the competition conditions in the

117
Version: 32
ACR and ACL environments are set and regulated by Law 10848/2004, Decree No. 5162/2004 and by sector legislation, in particular the standards set by the Brazilian Electricity Regulatory Agency ANEEL, as described in items 7.3.d and 7.5. In the electricity generating segment, the Companys principal competitors are: (i) Eletrobrs; (ii) GDF Suez Group; (iii) EDP; (iv) Cemig; (v) Copel; and (vi) Petrobrs. In the electricity sales segment, the Companys principal competitors are: (i) CPFL; (ii) EDP; (iii) BTG Pactual and (iv) Comerc.
(d) Possible Seasonality
Power Generation
Regarding thermoelectric agents participating in the Regulated Market (ACR), as is the case of ENEVAs TEPs that have won New Energy Auctions, energy is traded through the Electricity Purchase Contracts in a Regulated Market (CCEARs) within the availability mode. Under an ACR Availability Contract, the generating unit undertakes to provide a given capacity to ACR. In this case, the generating unit revenue will be earned if the contracted energy is made available and the hydrological dispatch risk for such plants (payment for variable costs) is assumed by the buying distributor, according to Law 10848/2004. There is, therefore, no seasonal risk for the generating unit. In this type of contract, the generator receives a fixed annual revenue exactly equal to the total amount corresponding to its New Energy Auction winning bid. This fixed revenue must be enough for remunerating investments and covering all the plant fixed costs, including O&M fixed operation and maintenance costs, transmission/distribution tariffs, charges, and taxes. But variable generation costs are fully passed on to the distributors whenever the plant is dispatched by ONS. The distributors, in turn, pass on the variable costs to the final consumers, under the regulators authorization. The fixed and variable operation costs are declared by the generator in the EPE conducted process for technical qualification for auction. Regarding the indexing provided in CCEAR, the fixed revenue is indexed by IPCA. Variable costs, however, are divided into fuel cost and variable O&M cost. For imported coal, for example, the fuel cost is adjusted by the variation of the international coal price plus the exchange rate change. The variable O&M is adjusted by IPCA. On the other hand, the generation of electricity to supply our Isolated Systems has certain unique aspects. The Serra do Navio TEP contractualregulatory arrangement provides for, in net terms, a plant monthly fixed income (Monthly Contracted Power Price), thus avoiding seasonality effects. The execution of the performance guarantee for Parnaba III, is currently suspended, since ANEEL Communication No. 3.617/2012 determined that the insurance company J. Malucelli Seguradora S.A should execute the guarantee for the undertaking. UTE MC2 Nova Vencia S.A. submitted an
118
Version: 32
Administrative Appeal against this decision, on the basis of which the previous decision and the execution of the guarantee were suspended.
(e) Main inputs and raw material
As reported in the characteristic of the production process, the inputs used by the Company in the thermoelectric power segment are the following fuels: natural gas, coal, and diesel.
(i) Description of supplier relationships, including whether they are subject to government control or regulation, identifying the applicable agencies and legislation
In the case of thermoelectric power generation, the fuels are steam coal, natural gas, oil, and water for producing steam. For coal supply, the contracts do not have any specific regulations by the government agency. For steam coal, contracts are entered into on an annual basis, and are highly competitive due to the high number of potential suppliers. For natural gas and diesel supply, the contracts are regulated by the Brazilian Petroleum Authority (ANP). Natural gas plants depend on a single supplier. However, the supplier is a company within the same economic group as the Company and the fuel supply contracts are valid in the long term, consistent with the plant CCEARs.
(ii) Possible dependence on few suppliers
In steam coal and diesel generation, there are multiple suppliers for the different plants listed in item 7.3 a. Natural gas plants depend on a single supplier. However, the supplier is a company within the same economic group as the Company and the fuel supply contracts are valid in the long term, consistent with the plant CCEARs.
(iii) Possible price volatility
As stated in item 7.3.(d), under the ACR Availability Contract, the generator receives fixed revenue plus variable revenue, in case the plant generates power. The adjustment of the fuel portion within the variable revenue is realized in accordance with price variation for each fuel and according to the agent statements in auctions. In this context, the main input price volatility has negligible impact on plants bound by Availability Contracts. Similarly, the Companys thermoelectric plant contractual-regulatory arrangement in the isolated system ensures neutrality for the generator in case of fuel price volatility.
119
Version: 32
7.4 - Clients accounting for more than 10% of total net revenue
a)
Total amount of revenues from the customer
As of December 31, 2012, we did not have clients which individually accounted for more than 10% of total net revenue. As of March 31, 2013, the company does not have customers which individually account for more than 10% of total net revenues. b) Operating segments affected by revenues from the customer
As of December 31, 2012, none of the Companys business segments were affected due to concentration of client revenues.
120
Version: 32
7.5 - Relevant effects of state regulations on activities
(a) Need for government authorizations to perform the activities and history of relationship with the government administration to obtain such authorizations Sector and Regulation The new regulatory framework of the electricity sector had its inception as from the enactment of Provisional Measures 464 and 466, of 2003, converted into Laws 10847/2004 and 10848/2004, with regulation of the latter by Decree 5163/2004. The sector framework has three main objectives: Ensure the safety of the electric energy supply: the framework requires the contracting of 100% of the demand for energy in the regulated market, in addition to considering a more realistic calculation of the energy balances (guaranteed energy or physical assurance of the ventures); Promote low cost tariffs through the efficient contracting of energy: Consumers in the regulated market acquire energy from distributors. The low cost tariff consists of ensuring a reliable and isonomic manner of supplying energy as well as the most economic manner of generating energy. To attain such purpose, the regulated market agents will be obliged to purchase and sell energy through biddings; and Promote the universalization of the service in the electric sector.
The following measures were taken, which are also prescribed in the regulation, for those purposes to be fulfilled: Creation of two energy contracting environments, the Regulated (ACR) and the Free Market (ACL);
Market
Modification of the bidding criteria, replacing the criterion of more usage of the public asset for the criterion of the lowest tariff; Distributors must be 100% with their contracted demand;
Downsizing of the sector, that is, separation of the generation, distribution, sale and transmission of energy activities; Elimination of self-dealing, that is, prohibition of bilateral contracting in the ACR between related parties without a bidding (self-dealing may be incidental in the case of electric-energy generation companies that win the
121
Version: 32
auction promoted by the Granting Power - and enters into contracts with distributors of the same economic group); Creation of new institutional agents to monitor and enforce the sector policies; Creation of universalization programs.
As aforementioned, the new framework of the electricity sector created two energy-selling environments, ACR and ACL. Regulated Market (ACR) In the Regulated Market (ACR), distributors purchase the electricity they expect to sell to their captive consumers, through auctions regulated by ANEEL and organized by CCEE. Electricity is purchased from the electric energy generators, sellers and importers. One of the differences between the new and old regulatory frameworks is the method used to contract with captive consumers. Under the previous method, a distributor could contract bilaterally directly with the independent generators or producers of electricity (PIE). However, under the new regulatory framework, distributors must contract their electricity through public auctions only. The regulated auctions for the purchase of electricity by the distributors are separated into existing electricity auctions (that aim for contract renewals), and new electricity auctions (for contracting new plants). The government also has the right to organize special auctions for renewable electricity (biomass, small hydroelectric, solar and wind energy). ANEEL and CCEE conduct these auctions. The winners of the new electricity auctions promoted by the Granting Power have the following main rights and obligations: (a) are authorized to establish as Independent Energy Producers (PIE) for the implementation and exploration of the central generator plant that allowed their participation in the auction (the authorization/concession established the rights and obligations of the sector agent) (b) enter into Regulated Environment Power Purchase Contracts (CCEARs) with the pool of distributors that declared demand in the auction. Within this scenario, the generation agents that intend to participate in the ACR should participate in a bidding process. The winners of these Auctions (case of most of the Companys UTEs) are authorized by the government to produce energy and enter into contracts to sell energy in SIN, according to
122
Version: 32
the price/revenue specified under the terms of the Auction bid. The authorizations of the Companys plants participating in t he ACR are listed below:
Holding company
Power Plant
Concession Act Ministry of Mines and Energy (MME) Ordinance 177/2008 MME Ordinance 226/2008
UTE Porto do Itaqui Itaqui Gerao de Energia S.A. Porto do Gerao de S.A. Pecm Energia Pecm Energia
MPX Pecm II Gerao Pecm II de Energia S.A. UTE Parnaba Gerao Parnaba I de Energia S.A
MME Ordinance 209/2009
MME Ordinance 464/2009 (ownership transferred to the current owner by ANEEL Resolution for Authorization (REA) 3175/2011) MME Ordinance 466/2009 (ownership transferred to the current owner by REA/ ANEEL 3176/2011) MME Ordinance 169/2012
UTE Parnaba Gerao Parnaba I de Energia S.A.
UTE Parnaba II Parnaba II Gerao de Energia S.A. UTE Parnaba III Parnaba III Gerao de Energia S.A.
MME Ordinance March 22, 2013
105,
of
Free Market (ACL) The Free Market (ACL) sells energy under freely negotiated terms between the generation concessionaires, independent producers, self-producers of energy, electric energy sellers, importers of energy and Free Consumers.
123
Version: 32
All the consumers whose energy consumption exceeds 3 MW and who are connected to tension levels above 69 kV, as well as new consumers above 3 MW, may become deregulated consumers and negotiate their energy supply contracts directly with the generators and wholesalers within the free market, always following the rule of being 100% contracted. Special consumers may also negotiate under the ACL, buying energy strictly from small hydroelectric plants (PCHs), biomass, wind and solar power plants. ANEEL has the proper authority to authorize the Independent Production of Energy (PIE) activities for power plants applicable to ACL (except for hydroelectric power plants) and can operate as energy selling agent in the SIN. Such authorizations do not depend on biddings, but only on the fulfillment of the legislations specific requirements. The authorizations and registrations for the Companys power plants that do not participate in the ACR, as well as for the power plants of the selling company are listed below:
Holding Company Amapari Energia S.A
Power Plant UTE Serra do Navio
Concession / registration Act REA ANEEL 1369/2009 Order
MPX Comercializadora N/A (authorization to SCT/ANEEL operate as an energy 747/2008 de Energia Ltda. selling agent) UTE Parnaba IV UTE Parnaba IV Gerao de Energia S.A. SCAG/ANEEL 352/2013
Order
It should be pointed out that the exploration of the Tau solar power plant does not depend on authorization by the Granting Power/ANEEL, because this is a solar power plant with less than 5 MW of capacity. Questioning regarding constitutionality of the New Industry Model Law Political parties challenged the constitutionality of the New Industry Model Law before the Federal Supreme Court. In October 2007, a decision was rendered by the Supreme Court rejecting certain interlocutory appeals filed within the context of action by majority vote. To date, there is still no final decision on the merits and it is unknown when this will be rendered. Meanwhile, the New Industry Model Law remains in force. Regardless of the
124
Version: 32
final decision of the Supreme Court, certain provisions of the New Industry Model Law are expected to remain in force, especially those relating to the prohibition against distribution companies engaging in activities unrelated to the distribution of electricity, including electricity sales to Free Consumers and the elimination of the right to self contracting. If all or part of the New Industry Model Law is considered unconstitutional by the Supreme Court - STF, the regulatory framework introduced by the new law may become null, creating uncertainty about the governments future actions regarding electricity sector reform. However, it is important to mention that the Supreme Court may consider issues related to the theory of fait accompli, in the face of consolidated situations, which is the case of facts arising from Law 10.848 of 2004. Main Regulatory Entities Ministry of Mines and Energy - MME The Ministry of Mines and Energy (MME) acts as the Granting Power on behalf of the Federal Government, and its main role is to establish the sector regulation policies and guidelines. Brazilian Electricity Regulatory Agency - ANEEL The Brazilian electricity sector is regulated by the Brazilian Electricity Regulatory Agency (ANEEL), a federal autonomous government agency. After enactment of the New Regulatory Framework of the Electricity Sector, ANEELs main responsibilities were (i) regulating and inspecting the electricity sector according to the policy determined by the MME; and (ii) respond issues delegated to ANEEL by the Federal Government and the MME. ANEELs current responsibilities include, among others, (i) inspection of concessions for sale, generation, transmission and distribution of electric energy, including approval of electric energy tariffs; (ii) enactment of regulations for the electric sector; (iii) implementation and regulation of the exploration of the sources of energy, including the use of hydroelectric energy; (iv) promotion of the bidding process for new concessions; (v) solution of administrative litigations among the electric energy sector agents; and (vi) definition of the criteria and methodology to determine the transmission tariffs. National Council for Energy Policy - CNPE In August 1997, the National Council for Energy Policy (CNPE) was created to develop and create the national energy policy. It is presided by the MME, and the majority of its members are ministries of the Federal Government. Its
125
Version: 32
aim is to optimize the use of resources to ensure the supply of energy in the Brazilian territory. National Electric System Operator - ONS The National Electric System Operator (ONS) was created in 1998 and is a private non-profit entity organized under the provisions of private law comprising the entities that render services in the generation, transmission and distribution areas, as well as the free consumers. The Law of New Regulatory Framework of the Electricity Sector granted to the Federal Government Power to appoint three directors for the new Executive Board of ONS. ONS basic role is to coordinate and control the generation and transmission of energy of the Interconnected System, subject to the regulation and supervisory of ANEEL. The objectives and main responsibilities of ONS comprise: (i) planning of the operation of generation and transmission of electric energy; (ii) organization and control of the use of SIN and international interconnections; (iii) guarantee of access to the transmission network without discrimination to all the agents of the sector; (iv) provision of concessions to plan the electric system expansion; (v) presentation to the MME of proposals to enlarge the Basic Network (these proposals will be taken into consideration in the planning of the expansion of the transmission system); (vi) proposition of standards related to the operation of the transmission system for ANEEL approval; and (vii) preparation of an optimized dispatch program based on the availability stated by the energy generating agents. Chamber for Electric Energy Sale - CCEE On August 12, 2004, the Federal Government published a decree establishing the regulation applicable to the Chamber for Electric Energy Sale (CCEE) which, on November 10, 2004, succeeded the Energy Wholesale Market (MAE), absorbing all of its activities and assets. One of the main roles of CCEE is to make feasible the sale of electric energy in SIN, conducting electric energy public auctions within the Regulated Environment. Furthermore, CCEE is responsible, among other things, for (i) registering all the energy sale contracts with the ACR, the contracts resulting from adjustment contracting and the contracts entered into in the ACL; and (ii) accounting for and settling the short-term transactions. CCEE is comprised of holders of concessions, permits and authorizations of the electric sector, as well as of Free Consumers and consumers who acquire energy through solar, wind and biomass sources, and its Board of Directors is formed by four members appointed by those agents, and by a member appointed by the MME, whose position is Chair of the Board of
126
Version: 32
Directors. According to the Law of the New Regulatory Framework of the Electricity Sector, CCEE is responsible for calculating the price of the electric energy bought or sold in the spot market (Difference Settlement Price PLD).
Energy Research Company - EPE On August 16, 2004, through Decree 5184, the Energy Research Company, or EPE, was created. It is a federal government company linked to the MME. Law 10847, of March 15, 2004, granted the authorization for its creation. EPE is responsible for conducting strategic researches in the energy sector, including with respect to the electric energy, oil, gas, coal and renewable energy sources. The researches carried out by EPE will be used to concession subsidies to the formulation, planning and implementation of actions by the MME within the sphere of the national energy policy.
Electric Sector Monitoring Committee - CMSE The Law of the New Regulatory Framework of the Electricity Sector authorized the creation of the Electric Sector Monitoring Committee (CMSE), which is managed by the MME. The CMSE is responsible for monitoring the systems supply conditions, proposing preventive measures to restore the appropriate conditions of service, including actions on the demand side and also conjuncture reserve contracts on the offer side and others. Environmental Licensing The Brazilian environmental legislation determines that the construction, installation, enlargement and operation of establishments and activities that use environmental resources that are able to or potentially able to pollute, or are able, under any circumstances, to cause environmental degradation, will depend on previous environmental licensing. In the licensing, the entrepreneur must present an environmental study that is compatible with the risks and damages posed by the activity for which licensing is intended. The licensing of activities whose environmental impacts are considered relevant requires a Previous Study on Environmental Impact and its related Environmental Impact Report (EIA/RIMA), as well as the implementation of measures to mitigate and compensate the environmental impacts caused by the venture. In the case of the compensatory measures, the environmental legislation obliges the entrepreneur to address funds to the implementation
127
Version: 32
and maintenance of conservation units, according to a percentage to be determined by the environmental entity granting the license, in accordance with the degree of the environmental impact caused by the venture, and based on its total amount, excluding, among others, investments referring to plans, projects and programs required in the environmental licensing procedure for impact mitigation (cf. Law 9985/2000 SNUC). Supplementary Law 140/2011 established the general rules to define the competence of agencies integrating the National System for the Environment to receive environmental license applications and conduct the environmental licensing. In general, except for the cases in which the environmental licensing is subject to IBAMA, the environment state agencies, such as the State Institute of Environment (INEA) in the State of Rio de Janeiro, are able to conduct the environmental licensing. LC 140/2011 also forecast the possibility of the Municipalities promoting the environmental licensing of activities with local impact, provided that the requirements prescribed in that Law be met. The environmental licensing process comprises the issue of three licenses, all of them with determined validity terms and subject to specific conditions: (i) Preliminary License: granted in the preliminary phase of the planning of the venture or activity, approving its location and conception, attesting the environmental feasibility and establishing the basic requirements and conditions to be met in the next phases f its implementation; (ii) Installation License: authorizes the installation of the venture or activity, after fulfillment of the Preliminary License conditions and in accordance with the specifications included in the plans, programs and projects approved, including the environmental control measures and other conditions and (iii) Operating License: authorizes the operation of the activity or venture, after verifying whether the requirements included in the previous licenses were met, with the environmental control and conditional measures determined for the operation. Each license is issued in conformity with the development phase of the venture, and the maintenance of its validity depends on whether the requirements established by the licensing environmental agency were met. Water Resources The Water Resources National Policy determines the use of multiple water bodies and requires that the necessary volume for impounding or effluent discharge (i) be previously authorized by the Public Power through the concession of the right to use, with due regard for the required quality parameters, in addition to (ii) causing the charging of amounts for this
128
Version: 32
purpose. For the hydroelectric power plants located on state Rivers, the water resources state entity is entitled to issue the concession. If it is a river under the domain of the Federal Government, this task is made by the National Agency of Waters (ANA). The use of the water resources both for generation of energy and for use in the industrial processes constitutes an activity subject to concession and subsequent charge of water use. (b) Environmental policy of the issuers and costs incurred to comply with the environmental regulation and, if applicable, of other environmental practices, including the commitment to comply with the international environmental protection standards In addition to respecting the applicable environmental legislation, ENEVA seeks to integrate the production of energy into the preservation of the ecosystems and the welfare of the communities where it operates. For this reason, the company incorporates the three pillars of the sustainability, creating economically feasible, environmentally and socially fair ventures and supporting, voluntarily, initiatives to preserve the biodiversity and develop, on a sustainable basis, the regions where it operates. It was the first company of the EBX Group to establish an advisory board directed to Sustainability, and currently it is integrated to the whole group with the presence of the management of ENEVA S.A. and representatives of all subsidiaries on a monthly basis for submission, review and approval of the sustainability issues. Nowadays under implementation, the Management System for ENEVA Sustainability will be adopted to direct how the company will operate and will be used as a basis for a process of improvement of all the sustainability aspects. In 2012, the Company invested approximately R$50,000,000.00 in environmental programs and actions. Finally, it is noteworthy that the Company always seeks to contract loans from financial institutions which adopt international standards and are regularly audited by independent auditors to verify their compliance with national legislation and international standards.
129
Version: 32
(c) Dependence on relevant patents, trademarks, licenses, concessions, franchises, royalty agreements relevant for the development of activities The Company and its subsidiaries depend on the granting of authorization by the Granting Authority/ANEEL to perform their operating activities and carry on their business. For additional information, see items 7.3. and 9.1.(b) of this Reference Form. Additionally, the Company needs the licenses to operate set forth in item 7.5.(b), issued by the respective environmental agency. Except for the aforesaid authorization and licenses, the Company and its subsidiaries do not depend on any other patents, trademarks, licenses, concessions, royalty agreements for the development of their activities. For additional information on the Companys trademarks and patents, domains and software, see sections 9.1 and 9.2 of this Reference Form.
130
Version: 32
7.6 Relevant foreign revenue
a. Revenue from clients attributed to the issuers country of origin and its share in the issuers total net revenue In the fiscal year ended December 31, 2012, as well as in the quarter ended March 31, 2013, we did not record revenues deriving from other countries. b. Revenue from clients attributed to each foreign country and its share in the issuers total net revenue In the fiscal year ended December 31, 2012, as well as in the quarter ended March 31, 2013, we did not have record revenues deriving from countries other than Brazil. c. Total revenue from other countries and its share in the issue rs total net revenue Not applicable, as in the fiscal year ended December 31, 2012, as well as in the quarter ended March 31, 2013, we did not record revenues deriving from other countries.
131
Version: 32
7.7 Effects of foreign regulations on activities
Given that the Company does not generate revenue in countries other than Brazil, the Company is not subject to foreign regulations.
132
Version: 32
7.8 Relevant long-term relationships
ENEVA Sustainability Policy ForENEVA, sustainability is an intrinsic value of its business strategy. Our business activities are developed so that an integrated view that is capable of equating financial return to shareholders and employees, social and economic development, environmental protection, safety for people, asset integrity, cultural diversity and rational use of natural resources is applied. Senior Management assumes a proactive and responsible attitude toward ensuring the application of this Policy as the basis for all business decisions. Thus, ENEVAS.A. is committed to: Adopting the concept of prevention related to environmental, social, health and safety issues in its activities, products and services and in its entire lifecycle; II. Respecting human rights when conducting its activities, operations and services; III. Seeking the development and retention of workforce and fighting against discrimination by promoting diversity at work; IV. Offering dignified working conditions to employees and workers of contractors, in accordance with the best quality standards; V. Protecting peoples health, safety and integrity from risks and impacts related to their activities, operations and services: employees and workers of contractors and business partners working at its facilities or on its behalf and other interested parties potentially affected by these risks and impacts; VI. Identifying and managing positive and negative impacts on the environment and people and providing the effective management of the use of natural resources, seeking to use the best market practices; VII. Contributing to protecting biodiversity and responsibly managing its impacts on biodiversity; VIII. Effectively managing solid waste and liquid and gas effluents, including greenhouse gases originated from its activities, seeking to use the best technologies and processes available for control of emissions; IX. Investing in research, scientific development and technologic innovation directed toward rationalization of the use of natural resources and reduction in social and environmental impacts; X. Keeping a transparent, credible and ethical relationship with its target audience; XI. Adopting anti-corruption practices in conducting its business; XII. Seeking to understand expectations and promote involvement of its interested parties;
133
I.
Version: 32
Promoting local sustainable development in regions where it operates, in partnership with the interested parties, adopting and disseminating territorys management and governance practices that incorporate the integrated nature of social, environmental, economic and cultural fields; XIV. Respecting cultural, regional and ethnic diversity in regions where it operates; XV. Promoting education, qualification and awareness of its employees and workers of contractors for environmental, social, cultural, health and safety issues; XVI. Requiring contractors and business partners to comply with legal requirements and normative instruments provided for in the SGS; XVII. Complying with legal and other applicable requirements; XVIII. Implementing a management system that ensures continuous improvement in applying the sustainability concept to the company and its business units; XIX. Establishing tools to meet continuous improvement in sustainability management and performance standards.
XIII.
Throughout 2011, ENEVA S.A. conducted an internal preparatory study for sustainability reporting according to the Global Reporting Initiative (GRI) standard. The study also contemplated actions aiming at adherence to the initiatives of the Global Compact and the integration into ISE-BOVESPAs portfolio. The primary purpose of this study was to raise information on sustainability actions and themes that will be subject to report, such as health & safety, work and human rights indicators, among others, in order to identify indicators either available or not, so that ENEVA could define its positioning and reporting capacity. The result of this study defined the current situation and actions required for ENEVA to be able to measure, publish and justify organizational performance focused on sustainable development to all its stakeholders. In this sense, ENEVA reassessed the schedule for development of its Sustainability Report, taking into account the Companys peculiarities and respective business plan. Considering the need to systematize the information gathered from the internal study developed by the Company to enable the disclosure of information on sustainability in the scope of the Global Reporting Initiative (GRI) standard, ENEVA aims to publish its Sustainability Report by 2014, when it expects to consolidate the social and environmental investments currently in progress.
134
Version: 32
For more information, see item 7.5 (b) of this Reference Form. Environmental Responsibility The company encourages initiatives for the preservation of biodiversity and sustainable development in the regions where it operates. These principles are reflected both in offsetting, monitoring and mitigation actions for environmental impacts associated with Licensing and voluntary social and environmental initiatives. Around 200 social and environmental plans and programs are currently in progress. Upon establishing in a region, ENEVA seeks to contribute to the local social development and to keep a transparent dialogue with its target audience, in order to get to know their expectations better, thus keeping an effective communication channel. ENEVA provides direct communication channels through a 0800 toll-free telephone line and via Internet, as well as permanent teams that interface in person with the communities where the company is present, establishing a permanent dialogue with local associations, government institutions, NGOs, opinion makers and other social players. The company seeks to fully comply with legal requirements in implementing environmental offsetting, monitoring and controlling measures. In the social area, investments made in 2012 include the Medical Center and Police Group of Vila Cana, which will directly benefit around 10,000 people. In December, the facilities of the first phase of the Fishing Warehouse of So Joo da Barra were concluded and delivered. The project is an initiative of EBX Groups companies in partnership with the Local Government of So Joo da Barra, which will spur the productive chain of the fishing sector in the region. Voluntary Investments s Social Investment actions are performed in a planned manner and linked to the business, and their results are constantly assessed. The amount of R$19 million has already been invested in preserving biomass and in voluntary social and environmental projects. The Preserved Caatinga Project (Projeto Caatinga Preservada), developed in partnership with Caatinga Association (Associao Caatinga), will enable an increase by nearly 45% in the number of private protected areas (RPPNs) in the state of Cear. In the Pantanal area of the State of Mato Grosso, the protected area accounts for 70,000 hectares, in accordance with the Preservation Project (Projeto de Conservao) for Acurizal, Penha, Doroch and Rumo ao Oeste RPPNs.
135
Version: 32
By means of a commitment entered into with Chico Mendes Biodiversity Preservation Institute (Instituto Chico Mendes de Conservao da Biodiversidade, or ICMBio), an agency of the Ministry of Environment, the company provides funds for handling and preservation of Lenis Maranhenses National Park. In 2012, the focus of social investment actions and projects in locations near its ventures was on education, health and income generation areas. The Healthy Children, Healthy Future Program (Programa Crianas Saudveis, Futuro Saudvel), which seeks to improve childrens quality of life, contributing to the fighting and prevention of worm infection and anemia, reached 10,000 beneficiaries.
136
Version: 32
7.9
Other relevant information
Market Opportunities The following are our considerations on some energy sector opportunities, from which we may benefit, including recent regulatory changes by the Brazilian Federal Government, the diversification of the Brazilian energy matrix, the occurrence of new energy auctions, and the description of regions with potential for energy exploration. Recent regulatory changes Recently, the Brazilian federal government enacted Provisional Measure 579, converted into Law No. 12783, dated January 11, 2013, whose purpose is to enable reduction of electricity cost to Brazilian consumers, promote low tariffs, ensure electricity supply, and make the production sector even more competitive. With this purpose, and in order to allow flexibilization of electricity tariffs, rules were established to enable the extension, in 2013, of electric power generation, transmission, and distribution concession contracts granted until 19951, which are currently heavily depreciated and amortized. Such concessions will normally be extended over 30 years, subject to certain conditions that industry players shall meet. For thermoelectric generation, the extension may be for up to 20 years, regardless of the date of grant. The greatest innovation for these agents is that, at MMEs discretion, the energy generated by the plants may be directly contracted as backup power. The changes introduced by the new regulations directly and effectively affect generating companies whose activity has been granted by MME through concessions. Our plants are operated or are being built through the grants we have received, after 2008, through permits. Thus, our concessions obtained prior to 2005 are not directly affected by such changes. Nevertheless, we believe that the measures imposed by the new regulations will open many opportunities for new investors and increase the importance of alternative generation sources to hydroelectric sources, especially thermoelectric generation. Energy sector growth and structural energy deficit in the short term In recent years, the Brazilian economy has been showing positive scenarios, arising especially from favorable prospects, involving investments in infrastructure for the countrys growth, in sports events to be held between
1
The exception is the thermoelectric generation, which may have been granted on any date.
137
Version: 32
2014 and 2016, and in oil exploration and production. Economic growth requires structural improvements enabling the long-term maintenance of a high economic standard. As for the electricity sector, attempts have been made to structure growth in a way to keep up with the high economic standard via, for example, the continued success of the new and reserve energy auctions. However, the recent regulatory changes and growth prospects coupled with the quest for environmental sustainability and the delayed start of operations by some power plants are factors that may negatively impact the reliability of energy supply and price stability. Concerns about environmental sustainability have focused mainly on the construction of large hydroelectric plants, with high environmental impact on the region where they are installed. The government intends to encourage, in the long term, smaller hydroelectric plants and the intensified implementation of new energy sources. We believe that the growth in the renewable energy sector is directly related to several factors, among which we highlight: (i) the global concern regarding the impact that energy generation from non-renewable sources has on the environment, with the consequent replacement of fossil fuels, (ii) international agreements providing for the use of carbon credits generated by such sources, providing additional revenue beyond that arising from power generation, (iii) government incentives through favorable national laws, (iv) a decrease, in recent years, in the installation costs for new plants, in particular, wind power plants, and, finally, (iv) returns that may attract large investment amounts from both government and private investors. Inputs mentioned above are the same ones used in thermoelectric plants. Thus, the increased production and consumption of such products indicates continuous parallel growth in investments on such energy source. We have developed and invested in projects involving alternative energy sources and have favorable conditions for their development, such as the ownership of inputs required for operating thermoelectric plants through partnerships. Gas production in the OGX Maranhos Gavio Real field will be strategically directed to the Parnaba thermoelectric plant. The field is located close to the thermoelectric plant, allowing cost reduction for power production. The coal extracted from the Seival Mine will be used as input for operating the Sul TEP and MPX Seival thermoelectric plants. The proximity of the mine to these projects is vital for achieving competitiveness in the prices of energy we will produce. We therefore believe we are prepared for changes in energy policies and
138
Version: 32
focused on the investment on matrices that are strategic for the Brazilian energy sector in the coming years.
Strengths
We believe that we have the following strengths: Excellent positioning to take advantage of the growing demand for energy in Brazil. Brazil has historically been very dependent on water resources for its power grid, and this has had grave consequences in the past, when severe droughts affected the reservoirs of the major hydroelectric schemes and led to electricity rationing in 2001. In the face of this challenge, alternative sources of energy have been gaining momentum over the last decade, helped by government incentives, and thermal power is of particular importance in the context of this policy, as it tends to make the system more reliable. We believe that we are well placed to meet the coming demand for energy supplies in Brazil, with the assets already in operation and our high quality thermal projects currently in progress, plus the fact that our coal-powered thermal plants are being readmitted to the electricity auctions as from August 29 this year. In addition to this, our unique integrated fuel supply position resulting from our partnerships allows us to possess and exploit the inputs necessary for generating our own energy. We are confident that after the Offering we shall have the capacity needed to finance our growth through these new projects. Proven track record We can show a past record of success in executing and implementing our projects. Since our IPO in December 2007, when almost all our projects were at the development stage, five of our plants have come on stream, and four more are under construction. The total capacity contracted is 2.9 GW. New projects which were not envisaged at the time of the IPO have been developed, and today are of extreme importance strategically, showing how successful we are at adapting to changes in the market scenario. Our experience is also reflected in the successful partnerships we have formed and our joint ventures with well-known and important players in the sector, among them E.ON, EDP and Petra. We also successfully completed fund raising operations for our projects, issuing R$1.4 billion in convertible debentures in 2011, and with E.ONs investment of R$1.0 billion in 2012, to subscribe for our new shares. Verticalization and integration of operations. The verticalization of our operations and the full integration of the energy chain make our commercial strategy more competitive and more flexible, reducing the risk of fuel cost variations and income volatility. The integration of our operations simplifies the logistics and allows us to use fuel more efficiently, as well as reducing our dependence on Petrobras, since we have the OGX Maranho exploratory blocks supplied with energy generation under contract from the Parnaba I, II, III and IV UTEs (total installed capacity 1425 MW), and the Seival mine is supplying coal to UTE Sul and the Seival UTE, which will supply part of our assets in partnership with well-known private players in these markets. High quality assets and project portfolio. Together with our partners we have a remarkable portfolio of high quality assets and projects. Five of our plants are already in operation, with a total installed capacity of 1,780 MW. We are also at an advanced stage in constructing a coal-fired thermoelectric plant in the northeastern region of Brazil, providing additional capacity of 360 MW and with 15-year power supply agreements already signed. We also have the Parnaba complex plants under construction, providing further capacity of 749 MW in all. The Au generation complex in So Joo da Barra, in the northern part of the state of Rio de Janeiro, with total plant capacity of up to 5400 MW. We have projects for another two coal-fired thermoelectric plants, UTE Sul and UTE Seival, with total installed 139
Version: 32
capacity of 1327 MW, to be built in the municipality of Candiota, in Rio Grande do Sul, where they can be supplied with coal from the Seival mine. Lastly, we have capacity estimated of 600 MW wind power project through MPX E.ON Participaes, with an option to expand it to 1200 MW, located in Rio Grande do Norte. Control Group with wide experience in the energy sector. We are currently controlled by Mr Eike Batista and by E.ON, which is turn is controlled by E.ON SE. Our relationship with E.ON began in April 2012, when we entered into a strategic partnership, with the establishment of a joint venture, to share complementary capacity for accelerating our growth, and with the acquisition by E.ON of 11.7% of the shares of ENEVA by means of a further capital increase amounting to R$1 billion. This partnership was also intended to join us to a well-known partner with significant experience in the sector where we operate, so as to allow us to develop a solid asset portfolio, by the transfer of a range of technologies and know-how from the technical team, to become more competitive than the other companies in our market, and to expand our energy generation business and related supply and marketing activities. In addition, an Investment Agreement was executed in March 2013, according to which E.ON undertook to acquire from Mr Eike Batista 24.5% of our common shares and in May 2013, upon the effective transfer of these shares, its interest in our capital stock reached 36.2%. Subsequently Mr Eike Batista and E.ON executed a shareholders agreement regulating the principal issues of their joint control over our company. The fact that E.ON is now one of our controlling shareholders has given us access to the expertise of one of the major players in the world energy sector, in addition to the advantages from the abovementioned partnership.
Strategy
We plan to become a leader among Brazils private -sector energy generating companies, with clear-cut diversification of sources and regions of operation, and to take advantage of strategic opportunities in Latin America. We shall implement the following strategies to maximize shareholder return based on our strengths: To exploit growth opportunities by constantly developing actual and potential energy projects. Our experience in the market has enabled us to sign up 2.9 GW in projects since our IPO in 2007. Since then we have also been adept at following market trends and taking advantage of opportunities for conceiving new projects. One of our priorities is the successful completion of our current projects, so that we can be ready to grasp any opportunities for developing new projects, especially through our strategic partnerships with other players in the sector. To diversify energy sources by operating thermal plants using a variety of fuels and renewable energy. The predominance of hydropower in the Brazilian energy grid has created risks for the country in the past, with serious loss being suffered on occasion, and in recent times warning signs have again been seen with the low levels of the reservoirs of the major hydroelectric schemes. As a result, the production of electricity from alternative sources has become more widespread in recent years, with incentives being offered. Following this trend, we have constructed a diversified portfolio of projects intended to exploit thermoelectric energy generation - using natural gas and coal - as well as renewable sources, such as solar energy and wind power. These renewable sources are still not used to any significant extent, but there is great potential for increasing their use in Brazil. We intend to continue with this business strategy and thus to position ourselves not only to supply the shortfall in Brazils energy sector, but also to grasp the opportunities that will continue to arise as demand grows in tandem with the countrys demographic and economic expansion. 140
Version: 32
To seek potential acquisitions that complement our portfolio and add value for our shareholders. We are continually analyzing new business opportunities that could contribute to our portfolio diversification strategy, not only in the energy generation sector but also in fuel exploration and production, and in the logistics of transporting it to the generating plants, as a reflection of our focus on the vertical integration of our business. In addition to developing new projects, we intend to devote our efforts increasingly to prospecting acquisition opportunities in the market that will add significant value for our shareholders. This was our objective in setting up MPX E.ON, a joint venture with E.ON, an international player with vast experience in analyzing and completing acquisitions, and now one of our controlling shareholders, so as to develop a solid portfolio of energy assets and accelerate our growth. We shall incorporate MPX E.ON after the Offering has been completed, which we expect to allow us to benefit from synergies between the Company and MPX E.ON. We are also in strategic partnerships with other major players in the energy sector, such as EDP in the Energia Pecm, Eletronorte, in Amapari, and Petra, in the generation of energy and exploitation and production of natural gas in the Parnaba Basin.
141
Version: 32
8.1
Description of economic group
(a)
Direct and indirect controlling shareholders
The Company is directly controlled by Mr. Eike Fuhrken Batista (who holds, directly and indirectly through Centennial Asset Mining Fund LLC and Centennial Asset Equity Fund LLC, 29.00% of the Companys capital stock) and by DD Brazil Holdings S.A.R.L (which holds 36.20% of the Companys capital stock), both of which are a party to a shareholders agreement signed on May 27 2013, and which is described in item 15.5 of this Reference Form. Centennial Asset Equity Fund LLC is fully owned by Centennial Asset Mining Fund LLC, which, in turn, is fully owned by Mr. Eike Fuhrken Batista. DD Brazil Holdings S.A.R.L. is a company belonging to the German group E.ON, established in compliance with the Luxembourg laws, whose controlling shareholders are described in items 15.1 and 15.2 of this Reference Form. The corporate purpose of Centennial Asset Equity Fund LLC, Centennial Asset Mining Fund LLC, and DD Brazil Holdings S.A.R.L. is to hold interest in other companies. (b) Subsidiaries and affiliates
The Company has the following direct subsidiaries or joint subsidiaries:
Interest Direct subsidiaries
Activities
MPX Pecm II Gerao de Energia S.A. UTE Porto do Itaqui Gerao de Energia S.A.
99,70% 100,00% 51,00%
Amapari Energia S.A. Seival Sul Minerao Ltda. Termopantanal Participaes Ltda. UTE Parnaba Gerao de Energia S.A. UTE Parnaba II Gerao de Energia S.A. UTE Parnaba V Gerao de Energia S.A. 70,00% 66,67% 70,00% 100,00%(*) 99,99%
Energy Generation - Pecm II plant Energy generation - Itaqui plant Energy generation - Serra do Navio plant Industry and trade of minerals Interest in other companies Energy generation - Parnaba plant Energy generation - Parnaba II plant Interest in other companies Interest in other companies Interest in other companies Energy generation
MPX Investimentos S.A. MPX Desenvolvimento S.A. MPX Tau II Energia Solar Ltda.
99,99% 99,99% 100,00%
142
Version: 32
- Solar II plant
Affiliates (equity pick-up) Research, mining, refining, trade and transport of oil and natural gas Energy generation Au plant Energy generation MPX Sul plant Interest in other companies Transport of minerals through conveyor belts in the Industrial Complex of the Port of Pecm Acquisition of aircraft for exploration of nonscheduled air transport Operation and maintenance services for energy generation units Interest in other companies Interest in other companies Energy generation Au II plant Interest in other companies Interest in other companies
OGX Maranho Petrleo e Gs S.A. UTE Porto do Au Energia S.A.(2) UTE MPX Sul Energia Ltda.(2) MPX Chile Holding Ltda.(2)
33,33%
50,00%
50,00%
50,00%
Porto do Pecm Transportadora de Minrios S.A.
50,00%
OGMP Transporte Areo Ltda.
50,00%
Pecm Operao e Manuteno de Unidades de Gerao S.A. Seival Participaes S.A.(2) MPX E.ON Participaes S.A.(3) UTE Porto do Au II Energia S.A.(2)
50,00%
50,00%
50,00%
50,00%
Mabe Construo e Administrao de Projetos Ltda. Parnaba Participaes S.A.

(1) (2)
50,00% 50,00%
(2)
Petra has the option o participate in up to 30% of the project upon equivalent capital contribution. Companies in which MPX E.ON has a direct interest of 50%. (3) It has a 100% direct interest in the following companies: MPX Solar Empreendimentos Ltda., MPX Comrcio de Combustveis Ltda., Nova Sistemas de Energia Ltda., MPX Comrcio de Energia Ltda., SPEs Ventos.
Additionally, the Company holds an indirect interest in the following companies:
Company Termopantanal Ltda.
Interest (1) 100.00%
Activities Electricity generation
143
Version: 32
Company Comercializadora de Equipos y Materiales Mabe Limitada MPX Energias Renovables Ltda. CCX Castilla Generacin Ltda. Inversiones CCX Castilla Uno-A Ltda. Inversiones CCX Castilla Uno-B Ltda. CCX Castilla Uno SpA Usina Termeltrica Seival Ltda. UTE Parnaba IV Gerao de Energia Ltda. Parnaba Gerao e Comercializadora de Energia S.A. MPX Tau Energia Solar Ltda.
(1)
Interest (1) 100.00%

(2)
100.00%(3) 100.00%(4) 100.00%(5) 100.00%(6) 100.00% 100.00% 70.00% 70.00% 100.00%
Activities Executino of EPC contracts for Pecm I, Pecm II and Itaqui Energy generation Interest in other companies Energy generation - Uno-A plant Energy generation - Uno-B plant Interest in other companies Energy generation - Seival plant Energy generation - Parnaba IV plant Interest in other companies Energy generation - Tau plant
The percentages above refer to the direct interest held by the Companys direct subsidiaries in each one of these companies, as shown in the chart included comprised in item 8.2 of this Reference Form. (2) Considers the direct interest held by Pecm Operao e Manuteno de Unidades de Gerao S.A. (0.0001%) and Mabe Construo e Administrao de Projetos Ltda. (99.9999%). (3) Considers the direct interests held by MPX Chile Holding Ltda. (1.00%) and CCX Castilla Generacin Ltda. (99.00%). (4) Considers the direct interests held by MPX Chile Holding Ltda. (99.90%) and MPX E.ON (0.10%). (5) Considers the direct interests held by MPX Chile Holding Ltda. (0.10%) and CCX Castilla Generacin Ltda. (99.90%). (6) Considers the direct interests held by MPX Chile Holding Ltda. (0.10%) and Inversiones CCX Castilla Uno-A Ltda. (99.90%).
For additional information on our direct and indirect subsidiaries and affiliates, see item 8.2 of this Reference Form. (c) Companys interest in the groups companies
The Company does not have any interest in companies of the economic group to which it belongs other than those mentioned in the prior item. (d) Interest of companies of the group in the Company
There are no shareholders in the Company other than the controlling shareholders identified in item (a). (e) Companies under common control
There are no companies under common control with the Company.
144
Version: 32
8.2 Organizational chart of economic group The Company chose not to disclose its corporate organizational chart
145
Version: 32
8.3 Restructuring transactions

146
Version: 32
Date of transaction Corporate Event Description of transaction
05/16/2013 Blocks Assignment by OGX In May 2013, ENEVA informed the market that it entered into an agreement with OGX for the purpose of assigning to ENEVA an interest of 50% in the Blocks located in the Parnaba Basin, acquired by OGX at the 11th Bidding Round held by ANP, on May 14, 2013. ENEVA will acquire an interest of 50% in the Blocks under the same conditions offered by OGX at ANPs 11th Bidding Round. The acquisition price paid by ENEVA, thus, will be equivalent to half the signing bonus and other exploration and development commitments assumed in the proposals submitted by OGX to ANP. The assignment that is the subject matter of the Agreement is contingent on approval by the ANP as soon as the Block concession agreements are signed.
Date of transaction Corporate Event Description of transaction
04/26/2013 Kinross Partnership In April 2013, the Company, jointly with MPX E.ON Participaes S.A. Petra Energia S.A., signed a contract with Kinross Brasil Minerao S.A. to implement a natural gas thermal project, with installed capacity of 56 MW, to be installed in the Parnaba Basin, state of Maranho. The annual value of the agreement is approximately R$54 million.
Date of transaction Corporate event Description of transaction
04/05/2013 Acquisition of Parnaba III On April 5, 2013, ENEVA informed the market that it had concluded the acquisition of 100% of the capital stock of Parnaba III by ENEVA, MPX E.ON
147
Version: 32
Participaes S.A. - a joint venture between ENEVA and E.ON SE - and Petra Energia S.A. On March 26, 2013, the authorization by the Ministry of Mines and Energy to change the fuel and transfer the location of the Project was published. The project, which has permission to construct a thermal power plant with capacity of 176.2 MW, was transferred to the Parnaba Basin, where ENEVA is currently constructing 1,369 MW, 1,193 MW of which already have long-term agreements in the Regulated Environment. Additional capacity, with start-up scheduled for May 2013, will supply the Nova Vencia agreements which sold power at the auction Leilo de Energia Nova A-5, held in 2008, in the form of CCEARs, totaling 98 average MW, at the price of R$189.9 / MWh and annual fixed revenue of R$93.5 million (both values in having November 2012 as the base-date). The CCEARs mature in 15 years, as of 2013.
03/27/2013 Disposal of shares On March 27, 2013, Mr. Eike Fuhrken Batista, and E.ON SE entered into an Investment Agreement. After verification of the conditions precedent included in the Investment Agreement, on May 29, 2013, E.ON SE, through its subsidiary DD Brazil Holdings S.A.R.L., acquired 141,544,637 shares of the Company held by Mr. Eike Fuhrken Batista and by a number of shareholders of ENEVA, holders of options to purchase ENEVA shares, corresponding to 24.47% of its share capital. Besides, E.ON and Mr. Eike Fuhrken Batista entered into a shareholders agreement which regulates, among other matters, the exercise of voting rights and restrictions to the transfer of shares in the Companys capital stock. 03/27/2013
Date of transaction
148
Version: 32
Corporate event Description of transaction
Acquisition of MABE shares On March 27, 2013, the Company announced to the market that in conjunction with EDP-Energias do Brasil S.A. and in equal proportions, it concluded the acquisition of 100% of the shares of MABE Brasil Ltda., a consortium formed by the company Maire Tecnimont SpA and the Efacec Group, related to the management of the works at the Thermal Power Plants Pecm, Itaqui and Pecm II, for the sum of R$1.00.
05/24/2012 Spin-Off ENEVA spun off its stake in CCX Brasil, thus segregating 100% of its direct interest in MPX Austria and its indirect interest in MPX Vienna and MPX Colombia, converted into CCX. The spin-off comprised one of the steps of ENEVA s corporate reorganization, in order to separate from its structure the exploration rights of coal in certain mines located in Colombia and is related to the strategic partnership between ENEVA and E.ON SE. 05/24/2012 Other Subscription of Shares
Date of transaction Corporate event Description of the corporate event Other Description of transaction
E.ON SE subscribed and paid up new common shares of ENEVA due to the assignment of preemptive right from Mr. Eike Batista to E.ON SE in the context of the capital increase of the Company in the amount of R$1,000,000,063.00. As disclosed in the Material Fact dated April 18, 2012, the Company entered into definitive agreements
149
Version: 32
related to the transaction, by means of which: (i) ENEVA and E.ON SE have formed a 50:50 joint venture to accelerate growth and develop in Brazil and in Chile of a larger and more profitable energyrelated business; and (ii) ENEVA raised R$1,000,000,063.00 through a capital increase in which E.ON gained a 11.7% interest in ENEVA.
Date of transaction Corporate event Description transaction
11/22/2010 Acquisition and sale of important assets of ENEVA acquired from Tractebel Energia S.A. the Seival Thermal Power Plant project (UTE Seival), which holds a License To Install 600 MW of coal capacity in the municipality of Candiota, of Rio Grande do Sul State.
Date of transaction Corporate event Description transaction
05/28/2010 Spin-Off of Corporate restructuring of MPX Energia de Chile Ltda., through partial spin-off, where the assets and liabilities related to the coal-fueled thermal power plant remained in the existing company and the others were transferred to a new company denominated MPX Chile Holding Ltda. As part of the restructuring mentioned above MPX Energia de Chile Ltda. had its name changed to CGX Castilla Generacin S.A.
8.4 Other relevant information There are no other relevant information to be inserted in this item.
150
Version: 32
9.1- Relevant non-current assets - other
The information on relevant non-current assets of the Company is provided in items 9.1 (a), (b) and 9.1 (c) of this Reference Form.
151
Version: 32
9.1 - Relevant non-current assets / 9.1.a - Property, plant and equipment

Description of property, plant and equipment Grid and substation of Amapari Energia S.A. Machinery and equipment of Porto do Pecm S.A. Machinery and equipment of Tau Solar Ltda. Buildings, Works and improvements of Energia Pecm Land of UTE Parnaba Gerao de Energia S.A. (1) Construction in progress - Advances (acquisition of Equipment and Construction) of UTE Porto do Itaqui Construction in progress - Advances (acquisition of Equipment and Construction) of Energia Pecm Construction in progress - Advances (acquisition of Equipment and Construction) of Pecm II Cost of labor allocated to construction of Itaqui Cost of labor allocated to construction of Energia Pecm Cost of labor allocated to construction of Pecm II Capitalized interest of Itaqui Capitalized interest of Energia Pecm Capitalized interest of Pecm II Capitalized interest of Parnaiba Country of location Brazil Brazil Brazil Brazil Brazil Brazil Brazil Brazil Brazil Brazil Brazil Brazil Brazil Brazil Brazil State of location AP CE CE CE MA MA CE CE MA CE CE MA CE CE MA City of location Amapari Fortaleza Fortaleza Fortaleza Sto. Antonio dos Lopes So Luis Fortaleza Fortaleza So Luis Fortaleza Fortaleza So Luis Fortaleza Fortaleza Sto. Antonio dos Lopes Type of property Owned Owned Owned Owned Owned Owned Owned Owned Owned Owned Owned Owned Owned Owned Owned
152
Version: 32
Capitalized interest of Parnaiba II Environmental permits and projects studies of ENEVA S.A.
(1)
Brazil Brazil
MA RJ
Sto. Antonio dos Lopes Rio de Janeiro
Owned Owned
Property enrolled under No. 2.380 at the Real Estate Registry of the Judicial District of Santo Antonio dos Lopes, owned by UTE Parnaiba
Gerao de Energia S.A.
153
Version: 32
9.1 - Relevant non-current assets / 9.1.b Patents, trademarks, licenses, concessions, franchises and technology transfer agreements
Type of asset Description of asset Territory covered Term Events that may cause loss of rights Consequences from the loss of rights
Trademarks
MMixed mark ENEVA No. 828327300
Brazil
Registration valid until April 1, 2018
In the administrative scope, the events that may lead to the loss of rights regarding such trademarks are: (i) termination of effectiveness terms without the due and timely payment of official renewal fees; (ii) partial or total waiver of our rights regarding the products and services showing the trademark; (iii) lapse of registration, due to unjustified non-use of the trademark; (iv) use of the trademark with significant changes, which may cause changes in its original distinctive character as it is informed in the certificate of registration, for a period equal to or above 5 years, as from the registration date; or (v) statement of annulment of registration obtained by third parties after favorable decision in the administrative scope. In the judicial scope, despite holding the ownership of our own trademarks, third parties may allege that we are violating intellectual property rights and get favorable court decisions.
There is no way to quantify the impact. Loss of the rights to the trademarks implies that it will not be possible to prevent third parties from using identical or similar trademarks to indicate even competing products or services, given that the holder no longer holds the right to exclusive use of the sign. The possibility also exists of legal actions being filed against the holder in the criminal and civil spheres on the grounds of undue use in case of violation of third partys rights, as a result of which it may be impossible to use the trademarks in its business activities. In any way, the Company understands that the loss off such trademarks will not have a materially adverse effect on its operations and financial condition.
154
Version: 32
Type of asset
Description of asset
Territory covered
Term
Events that may cause loss of rights
Consequences from the loss of rights
Trademarks
Word mark MPX No. 828327297.
Brazil
155
Version: 32
Type of asset
Territory covered
Term
Trademarks
Word mark ENEVA Brazil No. 900567805
Registration valid until May 17, 2021
156
Version: 32
Type of asset
Territory covered
Term
Trademarks
Registration valid until June 28, 2021
157
Version: 32
Type of asset
Territory covered
Term
Trademarks
Registration valid until August 2, 2021
158
Version: 32
Type of asset
Territory covered
Term
Trademarks
Mixed mark UTE Brazil Pecm Gerao de Energia No. 901667943
159
Version: 32
Type of asset
Territory covered
Term
Trademarks
Mixed mark Brazil Energia Pecm No. 901779997
160
Version: 32
Type of asset
Territory covered
Term
Trademarks
Mixed mark Brazil Energia Pecm No. 907878022
Registration valid until June 26, 2022
161
Version: 32
9.1 - Relevant non-current assets / 9.1.c - Equity interests
9.1 Relevant non-current assets / 9.1.c Equity interests
Corporate name Fiscal year Porto de Pecm Gerao de Energia S.A.
CNPJ Book value% change 08.976.495/0001-09
CVM Code Market price% change -
Type of Company Amount of dividends received (in Real) Controlled Company
Country of incorporation
State of the head office Date
City of the head office Amount (in Real) So Gonalo do Amarante
Description of the Issuer interest (%) activities conducted
Brazil
CE
Conduction of studies, projects, construction, installation, implementation, commercial operation, maintenance and exploitation of a thermal power plant named Energia Pecm, as well as selling the output therefrom, and performance of any acts inherent to trade business in general related to such activities.
50,000000
Market price 31/12/2012 31/12/2011 31/12/2010 66,38 37,150000 23,120000 0,000000 0,000000 0,000000 0,00 Book value 0,00 0,00 03/31/13 605.471.098,07
Reasons for acquisition and maintenance of such interest
162
Version: 32
Corporate name Fiscal year
CNPJ Book value% change
CVM Code Market price% change
Type of Company Amount of dividends received (in Real)
City of the head office Amount (in Real)
Investment in thermal power generation. MPX Pecm II Gerao de Energia S.A. 10.471.487/0001-44 Controlled Company Brazil CE Fortaleza Conduction of studies, projects, construction, installation, implementation, commercial operation, maintenance and exploitation of Pecm II, as well as selling the output therefrom, and performance of any acts inherent to trade business in general related to such activities, as well as installation and exploitation of electric power projects, throughout the national territory, including generation and sale of energy and electric capacity, either within CCEE or within other jurisdiction regulated by law, electric power transmission, assistance in projects of energy generation, transmission, sale and distribution, purchase and sale, import and export of equipment and machinery related to electric power generation, export of goods, equipment and products in 99,700000
163
Version: 32
general. Market price 31/12/2012 31/12/2011 31/12/2010 19,39 99,250000 198,230000 0,000000 0,000000 0,000000 0,00 Book value 0,00 0,00 03/31/13 440.283.670,54
Reasons for acquisition and maintenance of such interest Investment in thermal power generation. UTE Porto do Itaqui Gerao de Energia S.A. 08.219.477/0001-74 Controlled Company Brazil MA So Lus (i) Conduction of studies, projects, construction, installation, implementation, commercial operation, maintenance and exploitation of a thermal power plant named UTE Porto do Itaqui, located in the State of Maranho, as well as selling the output therefrom, and performance of any acts related to trade business in general related to such activities; (ii) elaboration, development and management of infrastructure projects; (iii) port operation for bulk loading/unloading, their transportation through conveyor belt(s) in So Luis Industrial District, 100,000000
164
Version: 32
including, without limitation, acquisition, construction, installation, operation and maintenance of a bulk unloading system consisting of unloaders and conveyor belt(s). Market price 31/12/2012 31/12/2011 31/12/2010 25,11 17,220000 38,910000 0,000000 0,000000 0,000000 0,00 Book value 0,00 0,00 03/31/13 448,309,741.57 536.077.416
Reasons for acquisition and maintenance of such interest Investment in thermal power generation. Amapari Energia S.A. 08.815.601/0001-64 Controlled Company Brazil DF Braslia Implementation and exploitation of UTE Serra do Navio and PCH Capivara, and other electric energy projects in the State of Amap, including generation, transmission and sale of energy and electrical capacity, intermediation in purchase and sale of energy and electrical capacity. 51,000000
Market price 31/12/2012 31/12/2011 5,09 20,69 0,000000 0,000000 0,00 Book value 0,00 03/31/13 52,329,332.01
165
Version: 32
Corporate name Fiscal year 31/12/2010
CNPJ Book value% change -34,570000
CVM Code Market price% change 0,000000
Type of Company Amount of dividends received (in Real) 0,00
Reasons for acquisition and maintenance of such interest Investment in thermal power generation. UTE Porto do Au Energia S.A. 09.130.974/0001-64 Controlled Company Brazil RJ So Joo da Barra Generation, transmission and sale of energy and electrical capacity, intermediation in purchase and sale of energy and electrical capacity. 50,000000
Market price 31/12/2012 31/12/2011 31/12/2010 -24,92 -7,640000 -41,480000 0,000000 0,000000 0,000000 0,00 Book value 0,00 0,00 03/31/13 21,365,208.47
Reasons for acquisition and maintenance of such interest Investment in thermal power generation. Seival Sul Minerao Ltda. 04.527.315/0001-42 Controlled Company Brazil RJ Rio de Janeiro Industry and trade of minerals in general, including research, mining and processing of minerals reserves, provision of geological services, import, export, trade of mineral, industrial and chemicals products. 70,000000
Market price 31/12/2012 31/12/2011 7,12 24,480000 0,000000 0,000000 0,00 Book value 0,00 03/31/13 3.473.818,16
166
Version: 32
CNPJ Book value% change -11,170000
Reasons for acquisition and maintenance of such interest Investment in the industry and trade of minerals UTE MPX Sul Energia 09.130.156/0001-61 Ltda. Controlled Company Brazil RS Candiota Implementation and exploitation of electric power plants in any part of the national territory, including generation and sale of exceeding energy and generation availability, purchase and sale of energy and generation availability, either within CCEE or other jurisdiction regulated by law, i.e., directly to free consumers or other energy traders, including energy sale and distribution, purchase and sale, import and export of goods in general and inputs, equipment and products. 50,000000
Market price 31/12/2012 31/12/2011 31/12/2010 -29,81 -14,000000 514,450000 0,000000 0,000000 0,000000 0,00 Book value 0,00 0,00 03/31/13 6,499,954.56
Reasons for acquisition and maintenance of such interest Investment in thermal power generation.
167
Version: 32
Corporate name Fiscal year Termopantanal Participaes Ltda.
CNPJ Book value% change 05.929.091/0001-68
City of the head office Amount (in Real) Corumb
Brazil
MS
Generation, sale, import and export of energy and electric capacity; intermediation in purchase and sale of energy and electrical capacity, either within CCEE or other jurisdiction regulated by law; energy transmission; advice on projects of generation, transmission, sale and distribution of energy; purchase and sale, import and export of machinery and equipment related to electric power generation; purchase and sale, import and export, industrialization and processing of natural gas, oil and its byproducts.
66,670000
Market price 31/12/2012 31/12/2011 31/12/2010 0,00 0,000000 0,000000 0,000000 0,000000 0,000000 0,00 Book value 0,00 0,00 03/31/13 0,00
Reasons for acquisition and maintenance of such interest Investment in thermal power generation. UTE Parnaba Gerao de Energia S.A. 11.744.699/0001-10 Affiliated company Brazil MA So Lus Sale of natural gas, and development, construction and operation of thermal power plants using natural 70,000000
168
Version: 32
gas. Market price 31/12/2012 31/12/2011 31/12/2010 115,52 1.857,130000 100,000000 0,000000 0,000000 0,000000 0,00 Book value 0,00 0,00 03/31/13 217.667.194,22
Reasons for acquisition and maintenance of such interest Investment in thermal power generation. Porto do Pecm Transportadora de Minrios S.A. 10.661.303/0001-09 Controlled Company Brazil CE Fortaleza Transportation of minerals through conveyor belt(s) in So Luis Industrial District, including, without limitation, acquisition, construction, installation, operation and maintenance of a bulk unloading system consisting of unloaders and conveyor belt(s). 50,000000
Market price 31/12/2012 31/12/2011 31/12/2010 -35,73 52500.00 0,000000 0,000000 0,000000 0,000000 0,00 Book value 0,00 0,00 03/31/13 243.104,14
Reasons for acquisition and maintenance of such interest Investment in minerals transportation OGMP Transporte Areo Ltda. 13.528.307/0001-01 Controlled Company Brazil RJ Rio de Janeiro Exploitation of eventual air transportation of passengers, cargo and mail as air taxi, including 50,000000
169
Version: 32
off-shore operations Market price 31/12/2012 31/12/2011 31/12/2010 -9,84 0,000000 0,000000 0,000000 0,000000 0,000000 0,00 Book value 0,00 0,00 03/31/13 6.343.536,61
Reasons for acquisition and maintenance of such interest Investment in exploitation exploit of air transportation. Pecm Operao e Manuteno de Unidades de Gerao Eltrica S.A. 13.746.853/0001-19 Controlled Company Brazil CE So Gonalo do Amarante Provision of operation and maintenance services for electric power plants. 50,000000
Market price 31/12/2012 31/12/2011 31/12/2010 26,38 0,000000 0,000000 0,000000 0,000000 0,000000 0,00 Book value 0,00 0,00 03/31/13 318.316,85
Reasons for acquisition and maintenance of such interest Investment in operation and maintenance of electric power plants. Seival Participaes S.A. 05.790.957/0001-00 Controlled Company Brazil Market price 31/12/2012 31/12/2011 31/12/2010 -49,71 0,000000 0,000000 0,000000 0,000000 0,000000 0,00 Book value 0,00 0,00 03/31/13 19.327.016,34 SC Florianpolis Investment companies. in other 50,000000
Reasons for acquisition and maintenance of such interest
170
Version: 32
Investment in other companies. UTE Parnaba II Gerao de Energia S.A. 14.578.002/0001-77 Controlled Company Brazil MA So Lus Construction and operation of thermal power plants using natural gas. 99,990000
Market price 31/12/2012 31/12/2011 31/12/2010 8525300,000000 100,000000 0,000000 0,000000 0,000000 0,000000 0,00 Book value 0,00 0,00 03/31/13 83.618.135,14
Reasons for acquisition and maintenance of such interest Investment in thermal power generation. MPX E.ON Participaes S.A. 15.379.168/0001-27 Controlled Company Brazil Market price 31/12/2012 31/12/2011 31/12/2010 0,00 0,000000 0,000000 0,000000 0,000000 0,000000 0,00 Book value 0,00 0,00 03/31/13 59.324.293,43 RJ Rio de Janeiro Investment companies. in other 50,000000
Reasons for acquisition and maintenance of such interest Investment in other companies. UTE Porto do A II Gerao de Energia S.A. 15.285.704/0001-25 Controlled Company Brazil RJ Rio de Janeiro Generation, transmission and sale of energy and electrical capacity, intermediation in purchase and sale of energy and 50,000000
171
Version: 32
electrical capacity. Market price 31/12/2012 31/12/2011 31/12/2010 0,000000 0,000000 0,000000 0,000000 0,000000 0,000000 0,00 Book value 0,00 0,00 03/31/13 2.132.462,80
Reasons for acquisition and maintenance of such interest Investment in thermal power generation. Parnaba Participaes S.A. 15.439.528/0001-39 Controlled Company Brazil Market price 31/12/2012 31/12/2011 31/12/2010 0,00 0,000000 0,000000 0,000000 0,000000 0,000000 0,00 Book value 0,00 0,00 03/31/13 18.017.226,71 RJ Rio de Janeiro Investment companies. in other 50,000000
Reasons for acquisition and maintenance of such interest Investment in other companies.
UTE Parnaba V Gerao de Energia S.A.
16.523.901/0001-06
Controlled Company
Brazil
RJ
Rio de Janeiro
Generation, transmission and sale of energy and electrical capacity, intermediation in purchase and sale of energy and electrical capacity.
100,000000
Market price 31/12/2012 31/12/2011 0,00 0,000000 0,000000 0,000000 0,00 Book value 0,00 03/31/13 1.000,00
172
Version: 32
CNPJ Book value% change 0,000000
Reasons for acquisition and maintenance of such interest Investment in thermal power generation. Parnaba Gerao e Comrcio de Energia S.A. 15.743.303/0001-71 Controlled Company Brazil
RJ
Rio de Janeiro
Generation, transmission and sale of energy and electrical capacity, intermediation in purchase and sale of energy and electrical capacity.
100,000000
Market price 31/12/2012 31/12/2011 31/12/2010 0,00 0,000000 0,000000 0,000000 0,000000 0,000000 0,00 Book value 0,00 0,00 03/31/13 0,00
Reasons for acquisition and maintenance of such interest Investment in thermal power generation. MPX Investimentos S.A. 16.570.411/0001-52 Controlled Company Brazil Market price 31/12/2012 31/12/2011 31/12/2010 0,00 0,000000 0,000000 0,000000 0,000000 0,000000 0,00 Book value 0,00 0,00 03/31/13 -144,45 RJ Rio de Janeiro Investment companies. in other 99,9900000
Reasons for acquisition and maintenance of such interest Investment in other companies.
173
Version: 32
Corporate name Fiscal year OGX Maranho Petrleo e Gs S.A.
Type of Company Amount of dividends received (in Real) Affiliated company
Country of jurisdiction
State of the head City of the head office Description of the office activities conducted Date Amount (in Real) Rio de Janeiro Research, mining, refining, processing, trade and transport of oil from wells, shale gas and other rocks, its byproducts, natural gas and other fluid hydrocarbons, maritime support and port support to assist exploitation and production of oil and gas offshore, as well as any other related or similar activities
Issuer participation (%)
11.230.122/0001-90
Brazil
RJ
33,330000
Market price Dec/31/2012 Dec/31/2011 Dec/31/2010 41,500000 107,570000 0,.000000 0.000000 0.000000 0.000000 0.00 Book value 0.00 0.00 Mar/31/2013 26,043,112.78
Reasons for acquisition and maintenance of such interest Investment in energy sales
Corporate name Fiscal year MPX Tau II Energia Solar Ltda.
State of the head City of the head office Description of the office activities conducted Date Amount (in Real) Fortaleza
17.157.518/000136
Brazil
CE
Implementation and exploitation of electric power plants through solar energy utilization,
100,000000
174
Version: 32
State of the head City of the head office Description of the office activities conducted Date Amount (in Real)
including generation and sale of electricity and exceeding generation availability.

Market price Dec/31/2012 Dec/31/2011 Dec/31/2010 0,000000 0,000000 0,000000 0.000000 0.000000 0,000000 0,00 Book value 0,00 0,00 Mar/31/2013 1,000.00
Reasons for acquisition and maintenance of such interest Investment in energy trade
175
9.2 - Other relevant information The Company informs that all equity interest held by it are relevant and are, therefore, described in item 9.1 of this Reference Form.
176
10.1
General financial and equity conditions
The information given below has been reviewed by the Company Management, and their comments are attached. The figures shown in this section 10 have been extracted from the Company consolidated financial statements for the years ended December 31, 2012, 2011 and 2010 and the quarterly financial statements QFS for the quarter ended March 31, 2013. (a) Managements comments on the general financial and equity conditions
The Company Management has the following comments to make on the general financial and equity conditions of the Company: In the year 2010, our Company recorded consolidated gross revenue of R$112.9 million, R$43.6 of which from the operation of Serra do Navio thermoelectric plant and R$69.3 from the energy trader. Our Company recorded loss of R$256.3 million for the year. Consolidated cash and cash equivalents, securities and restricted deposits at the end of 2010 reached R$854.2 million, and loans and financing totaled R$2,590 million, giving a net debt position of R$1,735 million. In the year 2011, our Company recorded consolidated gross revenue of R$190.4 million, R$42.3 of which from the operation of Serra do Navio thermoelectric plant and R$148.1 from the energy trader. Our Company recorded loss of R$408.5 million for this year; however, it recorded consolidated cash (cash and cash equivalents and securities) at the end of 2011 of R$1,451.8 million, which primarily comprised the issuance, in June this year, of convertible debentures of R$1,377 billion. Loans and financing totaled R$4,341 million, giving a net debt position of R$2,889 million. In the year 2012, our Company recorded consolidated gross revenue of R$541.6 million, which totally derived from the operation of Amapari Comercializadora de Energia and Itaqui. Our Company recorded loss of R$434.5 million for this year; however, it recorded consolidated cash and cash equivalents as of December 31, 2012, of R$590.5 million, while securities amounted to R$3.4 million. On December 31, 2012, loans, financing and debentures totaled R$6,072.4 million, giving a net debt position of R$5,478.5 million. For the quarter ended March 31, 2013, our Company recorded consolidated
177
gross revenue of R$217.6 million, which totally derived from the operation of Amapari, Parnaba I and Itaqui. Our Company recorded loss of R$257.1 million for this year; however, it recorded consolidated cash and cash equivalents of R$359.1 million, and securities of R$5.6 million as of March 31, 2013. On the same date, loans, financing and debentures totaled R$5,465.0 million, giving a net debt position of R$5,100.3 million. It should be noted that due to the adoption of new accounting practices (IFRS 11), the Company has ceased to record proportionally the revenue from some investees, among which is Comercializadora de Energia. The Companys overall liquidity ratio, measured as the sum of current and non-current assets over the sum of current and non-current liabilities, was 1.55 as of December 31, 2010, 1.21 as of December 31, 2011, 1.40 as of December 31, 2012 and 1.40 as of March 31, 2013. Management believes that the Companys financial and equity conditions are adequate for implementing its business plan and fulfilling its current short, medium and long-term obligations.
(b) Managements comments on the capital structure and the possibility of redemption of shares or quotas The make-up of our Companys capital structure is shown below, for the periods indicated. In the opinion of Management, the current capital structure indicates a satisfactory relationship between own capital and third party capital.
As of March 31, 2013, our Companys capital structure was made up of 28.7% of own capital and 71.3% of third party capital. ENEVA consolidated shareholders equity at this date amounted to R$2.452 billion, while gross debt plus liabilities to third parties totaled R$6.078 billion.
As of December 31, 2012, our Companys capital structure consisted of 28.6% of own capital and 71.4% of third party capital. ENEVA consolidated shareholders equity amounted to R$2.705 billion as of the same date, while gross debt plus liabilities to third parties totaled R$6.747 billion.
As of December 31, 2011, our Companys capital structure consisted of 16% of own capital and 84% of third party capital. ENEVA consolidated shareholders equity amounted to R$1.37 billion as of the same date, while gross debt plus liabilities to third parties totaled R$6,583.6 billion.
178
As of December 31, 2010, our Companys capital structure consisted of 27% of own capital and 73% of third party capital. ENEVA consolidated shareholders equity amounted to R$1.701 billion as of the same date, while gross debt plus liabilities to third parties totaled R$3,120.4 billion.
i. circumstances in which shares or quotas could be redeemed Management also notes that our Company has not issued any redeemable shares. ii. formula for calculating redemption value of shares or quotas Management also notes that there is no formula for calculation redemption value, since the Company has not issued any redeemable shares. (c) Management comments on the Companys ability to meet financial commitments assumed Management believes that our Company is fully able to meet all its financial commitments, since its major undertakings have been structured as Project Finance, with approximately 25% of total investments being met from its own resources, which are disbursed pari passu with external financing. These undertakings are also linked to Regulated Environment Electricity Sales Contracts (CCEAR), which allow generation of fixed revenues for 15 and 20 years (provided the parties comply with their respective contractual obligations). Our operation is performed through an interest, as a shareholder, in the capital stock of companies that develop such projects. Some of these projects are developed in partnership with other agents of the energy sector. Funds for the projects have been raised basically from the Companys IPO, held on December 14, 2007, and January 11, 2008, (over-allotment shares), in the total amount of R$2 billion as well as from financing and more recently from the issuance of 21,735,744 debentures convertible into shares, held on June 15, 2011, in the amount of R$1.4 billion. On May 24, 2012, 21,653,300 debentures were converted into 33,255,219 new shares, by virtue of the corporate restructuring process implemented by the Company in the year 2012. The holding company raised short-term funds of approximately R$800 million in 2012, in order to finance part of the investments made in projects during the year. We are arranging to settle a portion of this short-term finance during 2013, and to replace the rest with long-term debt, so as to provide the capitalization needed for the company to invest in potential new projects.
179
(d) Sources of financing for working capital and investments in non-current assets Our reply below under item f gives details of sources for financing investments in non-current assets. Management believes that the sources of finance used are adequate for our Companys debt profile, since projects have been structured on the basis of Project Finance supplied by development banks at subsidized rates of interest and on extended repayment terms of up to 14 years. (e) Sources of financing for working capital and investments in non-current assets which are intended to be used to cover liquidity shortfalls As stated above, we are arranging to settle part of this short-term finance during 2013, and to replace the rest with long-term debt, so as to provide the capitalization needed for the company to invest in potential new projects. (f) Levels of indebtedness and characteristics of the debt (i) Relevant loan and financing agreements The following table shows our Companys consolidated indebtedness with financial institutions as of March 31, 2013, and December 31, 2012, 2011 and 2010, with the corresponding interest rates and maturity dates. The amounts are stated in thousands of Reais.
180
Debtor
Creditor BNDES (Direct) BNB
Currency
Interest rate TJLP + 2.78% 10% IPCA + TR BNDES + 4.8% TJLP + 4.80% TJLP + 2.18% IPCA + TR BNDES + 2.18% CDI + 2.85% 10% CDI + 3.00% CDI + 3.00% CDI + 3.00% TJLP + 2.80% IPCA + TR BNDES + 2.80% TJLP + 1.88% IPCA + TR BNDES + 1.88% CDI + 3.00% CDI + 3.00% CDI + 3.00% CDI + 1.50% CDI + 1.15% CDI + 1.26% Libor + 1.50% CDI + 1.50% CDI + 2.95% CDI + 1.75% TJLP + 2.77% Libor + 3.5% Libor + 3.0% 8.13%
Maturity
Balance as Balance as of Balance on Balance on of Dec/31/2012 Dec/31/2011 Dec/31/2010 Mar/31/2013 874,040 200,297 890,703 200,365 861,165 200,699 568,339 184,574
Itaqui Itaqui
(a) (b)
R$ R$
Jun/15/2026 Dec/15/2026
Itaqui Itaqui Pecm II
BNDES (Indirect) BNDES (Indirect) BNDES (Direct)
(c) (d) (e)
R$ R$ R$
Jun/15/2026 Jun/15/2026 Jun/15/2027
148,518 170,499 711,645
141,202 173,685 690,175
113,707 171,026 574,430
54,455 141,839 437,044
Pecm II ENEVA S/A Pecm II Parnaba Parnaba Parnaba Parnaba
BNDES (Direct) Ita BBA BNB Bradesco Ita Santander BNDES (Direct)
(f) (g) (h) (i) (j) (k) (l)
R$ R$ R$ R$ R$ R$ R$
Jun/15/2027 Jun/17/2013 Jan/01/2028 Jun/26/2013 Jun/26/2013 Jun/26/2013 Mar/15/2013
155,652 108,606 250,027 66,380 70,073 -
148,772 106,158 235,053 64,063 68,029 -
127,975 106,285 234,819 75,127 125,212 242,957
90,048 251.077 -
Parnaba Parnaba
BNDES (Direct) BNDES (Direct)
(m) (n)
R$ R$
Mar/15/2013 Jun/15/2027
503,040
493,070
157,500 -
Parnaba Parnaba II Parnaba II Parnaba II ENEVA S/A ENEVA S/A ENEVA S/A ENEVA S/A ENEVA S/A ENEVA S/A ENEVA S/A Pecm Pecm Pecm Chile
BNDES (Direct) Ita BBA HSBC CEF Promissory Notes 1st Issue Citibank Citibank Promissory Notes 2nd Issue BTG Pactual BTG Pactual HSBC BNDES (Direct) BID BID Credit Suisse
(o) (p) (q) (r)
R$ R$ R$ R$
Jul/15/2026 Sep/30/2013 Sep/30/2013 Nov/07/2013
207,957 110,708 138,386 354,603
203,190 108,189 135,236 346,523
(s) (t) (u)
R$ R$ USD
Jul/15/2013 Sep/27/2013 Sep/27/2017
317,678 105,246 100,708
311,595 103,292 102,193 -
(v) (w) (x) (y) (z) (aa) (bb) (cc)
R$ R$ R$ R$ R$ USD USD USD
Dec/9/2013 Dec/13/2013 Aug/6/2013 Mar/25/2013 Jun/15/2026 May/15/2026 May/15/2022 Apr/15/2015
306,915 104,295 354,451 100,101 -
301,005 102,284 796,516 138,518 168,498 23,423
732,128 129,308 159,606 28,673
575,892 109,976 136,168 -
181
Chile
Credit Suisse
(dd)
USD
8.00%
Apr/15/2015
5,459,825
15,612 6,067,349
19,116 4,059,733
2,549,412
The table below sets forth the composition of loans of the joint subsidiary Porto do Pecm Gerao de Energia S.A. and the indirect subsidiary MPX Chile Holding Ltda., which, as from 2013, by applying the new consolidation rules introduced by IFRS 10, have been proportionally consolidated as of January 1, 2013, (amounts in thousands of Reais):
Contracting Party Pecm Pecm Pecm Chile Chile
Debtor BNDES (Direct) BID BID Credit Suisse Credit Suisse (aa) (bb) (cc) (dd) (ee)
Currency R$ USD USD USD USD
Interest rate TJLP + 2.77% Libor + 3.5% Libor + 3.0% 8.13% 8.00%
Maturity Jun 15, 2026 May 15, 2026 May 15, 2022 Apr. 15, 2015 Apr. 15, 2015
Balance on Mar/31/2013 782,053 137,995 167,695 15,713 10,476 1,113,932
Below is a summary of our Companys principal debt agreements:
(a) The Brazilian Development Bank (Banco Nacional de Desenvolvimento Econmico e Social or BNDES) released the full amount of the R$784 million long-term financing for Porto do Itaqui Gerao de Energia S.A. thermoelectric plant, in respect of sub-loans A, B and C, at an agreed annual cost of TJLP + 2.78%. The financing period is 17 years, with amortization over 14 years and no repayments of principal until July 2012. Sub-loan D, on the other hand, which is for R$13.6 million and intended for social investments (BNDES Social), pays interest only at the TJLP rate. The sum of R$11.7 million has been disbursed so far, R$1.7 million of which was released in the fourth quarter of 2012. The BNDES Social line of credit is for a total period of 9 years, with amortization over 6 years and no repayments of principal until July 2012. Interest on these loans is being capitalized during the construction period. This financing has the following guarantees, which are shared with the other banks financing the project: (i) Corporate surety of the parent company ENEVA S/A. (ii) Pledge of shares, (iii) Fiduciary Assignment of Rights and Credits, (iv) Fiduciary Assignment of Rights Emerging from ANEELs
182
Authorization, (v) Conditional Assignment of Rights and Agreements, (vi) Fiduciary Sale of Machinery and Equipment, (vii) Mortgage and (viii) Liquidity Fund in Reserve Account. (b) To supplement the BNDES financing, Porto do Itaqui Gerao de Energia S.A. thermoelectric plant has raised a loan from BNB-FNE, for a total of R$203 million. The final disbursement was made on July 28, 2011, and the loan is now drawn in full. The BNB loan is for a total period of 17 years, with amortization over 14 years and no repayments of principal until July 2012. The annual cost is 10%. There is a 15% compliance bonus, thus reducing the cost to 8.5% p.a. This financing has the following guarantees, which are shared with the other banks financing the project: (i) Corporate surety of the parent company ENEVA S/A. (ii) Pledge of shares, (iii) Fiduciary Assignment of Rights and Credits, (iv) Fiduciary Assignment of Rights Emerging from ANEELs Authorization, (v) Conditional Assignment of Rights and Agreements, (vi) Fiduciary Sale of Machinery and Equipment, (vii) Mortgage and (viii) Liquidity Fund in Reserve Account. (c) R$100 million of the indirect BNDES line of credit, for which Banco Bradesco and Banco Votorantim are the agents, has been disbursed to the Porto do Itaqui Gerao de Energia S.A. thermoelectric plant, in respect of sub-loans A, B, C, D and E. This portion of the loan is for a total period of 17 years, with amortization over 14 years and no payments of capital or interest until July 2012. The agreed annual cost is IPCA + BNDES Reference Rate + 4.8% during the construction phase, and IPCA + BNDES Reference Rate + 5.3% when the plant is in operation. Interest on these loans is being capitalized during the construction phase. This financing has the following guarantees, which are shared with the other banks financing the project: (i) Corporate surety of the parent company ENEVA S/A. (ii) Pledge of shares, (iii) Fiduciary Assignment of Rights and Credits, (iv) Fiduciary Assignment of Rights Emerging from ANEELs Authorization, (v) Conditional Assignment of Rights and Agreements, (vi) Fiduciary Sale of Machinery and Equipment, (vii) Mortgage and (viii) Liquidity Fund in Reserve Account. (d) The full amount of sub-loan F, part of the loan described in (c) above, amounting to R$141.8 million, has been disbursed to the Porto do Itaqui Gerao de Energia S.A. thermoelectric plant. This part of the loan is for a total period of 17 years, with amortization over 14 years and no payments of capital or interest until July 2012. The agreed annual cost is TJLP + 4.8% during the construction phase and TJLP + 5.3% when the plant is in operation. Interest on these loans is to be capitalized during the construction phase. This financing has the following guarantees, which are shared with the other banks financing the project: (i) Corporate surety of the parent company
183
ENEVA S/A. (ii) Pledge of shares, (iii) Fiduciary Assignment of Rights and Credits, (iv) Fiduciary Assignment of Rights Emerging from ANEELs Authorization, (v) Conditional Assignment of Rights and Agreements, (vi) Fiduciary Sale of Machinery and Equipment, (vii) Mortgage and (viii) Liquidity Fund in Reserve Account. (e) By the end of March 2013, Pecm II had drawn down R$607.9 million of the R$627.3 million provided under sub-loans A, B, C, D and L of the longterm financing provided by BNDES (in nominal R$, excluding interest during the construction phase). The sub-loans A, B, C and D are for a total period of 17 years, with amortization over 14 years and no payments of capital or interest until July 2013. The agreed annual cost is TJLP + 2.18%. sub-loan L is for a total period of 9 years, with amortization over 6 years and grace period for payments of capital or interest until July 2013. The agreed annual cost is TJLP. To guarantee the financing granted, bank guarantees were issued in the total amount of R$493.9 million, of which R$254.3 million were issued by Banco Ita BBA S.A., R$65.4 million were issued by Banco Santander S/A, R$65.4 million were issued by Banco Votorantim S/A, R$65.4 million were issued by Banco Bradesco S/A and R$43.6 million were issued by Citibank S/A. Additionally, this financing has the following guarantees, which are shared with the other banks financing the project: (i) Pledge of shares, (ii) Fiduciary Assignment of Rights and Credits, (iii) Fiduciary Assignment of Rights Emerging from ANEELs Authorization, (iv) Conditional Assignment of Rights and Agreements, (v) Fiduciary Sale of Machinery and Equipment, (vi) Mortgage, (vii) Liquidity Fund in Reserve Account, and (ix) Corporate surety of ENEVA S.A. (f) Pecm II has drawn down R$110.1 million, being the full amount of sub-loans E, F, G, H and I under the long-term BNDES financing agreement mentioned in (i) above. These sub-loans are for a total period of 17 years, with amortization over 14 years and no payments of capital or interest until July 2014. The agreed annual cost is IPCA + BNDES Reference Rate + 2.18%. Sub-loan J for R$22 million, which was part of this line of credit, was transferred to sub-loan A of the preceding item in April 2012. To guarantee the financing granted, bank guarantees were issued by Banco Ita BBA in the total amount of R$88.1 million. Additionally, this financing has the following guarantees, which are shared with the other banks financing the project: (i) Pledge of shares, (ii) Fiduciary Assignment of Rights and Credits, (iii) Fiduciary Assignment of Rights Emerging from ANEELs Authorization, (iv) Conditional Assignment of Rights and Agreements, (v) Fiduciary Sale of Machinery and Equipment, (vi) Mortgage, (vii) Liquidity Fund in Reserve Account, and (viii) Corporate surety of ENEVA S.A.
184
(g) On December 17, 2012, the parent company MPX Energia S.A. renegotiated the Bank Credit Note (CCB), amounting to R$105.8 million, with Banco Ita BBA S.A., on December 21, 2010, with maturity date estimated for December 17, 2012, paying interest due to date in full. The new maturity date is June 17, 2013, with the interest rate remaining at 100% of the CDI rate plus 2.85% p.a. (h) To supplement the BNDES financing, MPX Pecm II Gerao de Energia S.A. has raised a loan from BNB with FNE funds, for a total of R$250 million, of which R$235 million has been drawn so far. The BNB loan is for a total period of 17 years, with quarterly interest and amortization over 14 years. No repayments of principal are due until February 2014, and the annual cost is 10%. The conditions of the financing include a 15% compliance bonus, thus reducing the cost to 8.5% p.a. This financing has the following guarantees, which are shared with the other banks financing the project: (i) Pledge of shares, (ii) Fiduciary Assignment of Rights and Credits, (iii) Fiduciary Assignment of Rights Emerging from ANEELs Authorization, (iv) Conditional Assignment of Rights and Agreements, (v) Fiduciary Sale of Machinery and Equipment, (vi) Mortgage and (vii) Liquidity Fund in Reserve Account, and (viii) Corporate surety of ENEVA S.A. (i) On December 26, 2011, the Parnaba Gerao de Energia S.A. thermoelectric plant raised R$75 million by means of a Bank Credit Note (CCB) issued to Banco Bradesco S/A, against the guarantees of ENEVA S.A. and Petra Energia S.A. This is a bridge loan to finance the installation of the Maranho IV and V thermoelectric plants. Interest is 100% of the CDI rate plus 3% p.a., with capital and interest being paid in full when the loan matures on June 26, 2013. A further amount of R$75 million was disbursed on February 28, 2012, on the same conditions as for the earlier disbursement. R$90 million of capital, plus interest accrued, was paid off on December 28, 2012, when the long-term loan from BNDES, described in items (o) and (p), was released. In addition to the sureties, this agreement is guaranteed by fiduciary transfer of shares and conditional fiduciary assignment of credits shared between Santander and Ita BBA. (j) On December 26, 2011, the Parnaba Gerao de Energia S.A. thermoelectric plant raised R$125 million by means of a Bank Credit Note (CCB) issued to Banco Ita BBA, against the guarantee of the parent companies ENEVA S.A. and Petra Energia S/A. This is a bridge loan to finance the installation of the Maranho IV and V thermoelectric plants. Interest is 100% of the CDI rate plus 3% p.a., with capital and interest being paid in full when the loan matures on
185
June 26, 2013. R$60 million of capital, plus interest accrued, was paid off on December 2012, when the long-term loan from BNDES, described in items (o) and (p), was released. (k) On February 28, 2012, the Parnaba Gerao de Energia S.A. thermoelectric plant raised R$150 million by means of a Bank Credit Note (CCB) issued to Banco Santander, against the guarantee of the parent companies ENEVA S.A. and Petra Energia S/A. This loan is to finance the installation of the Maranho IV and V thermoelectric plants. Interest is 100% of the CDI rate plus 3% p.a. This bridge loan was fully repaid in December 2012, when the long-term BNDES loan described in items (o) and (p) was released. (l) The Parnaba Gerao de Energia S.A. thermoelectric plant drew down R$242.7 million on December 28, being the full amount of sub-loan C of the BNDES bridge loan (in nominal R$, excluding interest during the capitalization period). The agreed cost is TJLP + 2.8% p.a. This bridge loan was fully repaid in December 2012, when the long-term BNDES loan described in items (o) and (p) was released. Such debt was guaranteed by bank letters of guarantee. (m) The Parnaba Gerao de Energia S.A. thermoelectric plant drew down R$157.3 million on December 28, 2011, being sub-loans A and B of the same BNDES bridge loan referred to in the preceding item. The agreed annual cost is IPCA + BNDES Reference Rate + 2.8%. This bridge loan was fully repaid in December 2012, when the long-term BNDES loan described in items (o) and (p) was released. Such debt was guaranteed by bank letters of guarantee. (n) The Parnaba Gerao de Energia S.A. thermoelectric plant drew down R$495.6 million in December 2012, being sub-loans B and C of the long-term BNDES financing agreement totaling R$671 million. These subloans will be amortized in 168 monthly installments, together with interest, starting on July 15, 2013. The agreed cost is TJLP + 1.88% p.a. This financing also includes sub-loan D, directed toward social investments (BNDES Social) in the amount of R$12.2 million, which has not yet been disbursed and which is only subject to TJLP cost. This debt is guaranteed by: (i) Pledge of Stock, (ii) Fiduciary Assignment of Rights and Credits, (iii) Fiduciary Assignment of Rights Emerging from ANEELs Authorization, (iv) Fiduciary Sale of Machinery and Equipment and (v) Mortgage. (o) The UTE Parnaba Gerao de Energia S.A. thermoelectric plant drew down R$204.3 million in December 2012, being the full amount of sub-loan A of the long-term BNDES financing agreement referred to in the preceding item. This sub-loan is to be amortized in 13
186
monthly installments, together with interest, starting on July 15, 2014. The agreed annual cost is IPCA + BNDES Reference Rate + 1.88%. To guarantee the financing granted through sub-loans A, B and C (referred to in the previous item), bank guarantees were issued in the total amount of R$700 million, of which R$310 million were disbursed by Banco Ita BBA S/A, R$240 million were disbursed by Banco Bradesco S/A and R$150 million were disbursed by Banco Santander S/A, as well as corporate surety of ENEVA S.A., with limited liability of up to 70% of debt. This debt is guaranteed by: (i) Pledge of shares, (ii) Fiduciary Assignment of Rights and Credits, (iii) Fiduciary Assignment of Rights Emerging from ANEELs Authorization, (iv) Fiduciary Sale of Machinery and Equipment, and (v) Mortgage. (p) On March 30, 2012, the Parnaba II Gerao de Energia S.A. thermoelectric plant raised R$100 million by means of a Bank Credit Note (CCB) issued to Banco Ita BBA, against the guarantee of the parent company ENEVA S.A. This is a bridge loan to finance the installation of the Parnaba II thermoelectric plant. Interest is 100% of the CDI rate plus 3% p.a., with capital and interest being paid in full when the loan matures on September 30, 2013. (i) Fiduciary Sale of the total shares issued by the Parnaba II Gerao de Energia S.A. thermoelectric plant and held by our Company; (ii) Fiduciary Assignment of Rights of Supply Agreements by which the Parnaba II Gerao de Energia S.A. thermoelectric plant assigns awards of damages to be received by Petra Energia S.A. and by OGX Maranho Petrleo e Gs S.A. in the scope of the supply agreements executed, and (iii) Corporate surety of ENEVA S.A. (q) On March 30, 2012, the Parnaba II Gerao de Energia S.A. thermoelectric plant raised R$125 million by means of a Bank Credit Note (CCB) issued to Banco HSBC, in the amount of R$125 million, against the guarantee of the parent company ENEVA S.A. This is a bridge loan to finance the installation of the Parnaba II thermoelectric plant. Interest is 100% of the CDI rate plus 3% p.a., with capital and interest being paid in full when the loan matures on September 30, 2013. This debt is guaranteed by the same list of guarantees described in item (p) above. (r) On May 7, 2012, the Parnaba II Gerao de Energia S.A. thermoelectric plant raised R$325 million under a Bank Credit Notes (CCBs) agreement with Caixa Econmica Federal, against the guarantee of the parent company. This is a bridge loan to finance the installation of the Parnaba II thermoelectric plant. A tranche of R$125 million and two tranches of R$100 million each were disbursed on May 8, May 15 and June 15, 2012, respectively. Annual interest is 100% of the CDI rate plus 3%, and principal and interest are payable in full
187
at maturity on November 7, 2013. This debt is guaranteed by the same list of guarantees described in item (p) above. (s) On July 17, 2012, ENEVA S.A. made the first public distribution of 300 trade promissory notes, in a single series, with a nominal value of R$1 million each, for a total amount of R$300 million, maturing 360 days after issue and paying interest at the CDI rate plus 1.5% p.a., with restricted placement efforts according to CVM Instruction 476. (t) On September 27, 2012, the parent company ENEVA S.A. issued a Bank Credit Note (CCB) to Banco Citibank S.A. for an amount of R$101.3 million, maturing on September 27, 2013. Interest, which will be payable on maturity, is at 100% of the CDI rate plus 1.15% p.a. On November 7, 2012, this CCB was split into 14 CCBs of several amounts. This debt has a guarantee shared with the operation described in item (u) below. (u) On September 25, 2012, ENEVA S.A. obtained a loan from Citibank N.A. United States through a Credit Agreement, under Central Bank (BACEN) Resolution 4.131, for US$50 million (the equivalent of R$101.5 million). Interest on this raising is fixed at LIBOR + 1.26% p.a., to be paid quarterly. The principal is to be paid half-yearly, with no capital payments until September 26, 2014, and the loan matures on September 27, 2017. As a currency hedge for this raising, ENEVA S.A. entered into a swap operation with Citibank itself. The execution of this agreement was accompanied by the issuance of a promissory note as a guarantee by the borrower and fiduciary assignment of 7 financial bills. This debt and its related instruments are guaranteed by fiduciary assignment of securities and credit rights and by standby letter of credit issued by the parent company. (v) On December 11, 2012, ENEVA S.A. made the second public distribution of 300 trade promissory notes, in a single series, with a nominal value of R$1 million each, for a total amount of R$300 million, maturing 360 days after issue and paying interest at the CDI rate plus 1.5% p.a., with restricted placement efforts according to CVM Instruction 476. (w) On December 13, 2012, ENEVA S.A. issued a Bank Credit Note (CCB) to Banco BTG Pactual for an amount of R$101.9 million, maturing on December 13, 2013. Interest, which will be payable on maturity, is at 100% of the CDI rate plus 1.5% p.a. (x) On February 7, 2013, ENEVA S.A. issued a Bank Credit Note (CCB) to Banco BTG Pactual S.A. in the amount of R$350.0 million, maturing on August 7, 2013. Interest, which will be payable on
188
maturity, was set at 100% of the CDI rate plus 2.95% p.a. This debt is guaranteed by fiduciary assignment subject to credit rights arising from a loan agreement between the Company and the Porto do Itaqui thermoelectric plant entered into in July 2012. (y) On March 25, 2013, ENEVA S.A. issued a Bank Credit Note (CCB) to HSBC Bank Brasil S.A. in the amount of R$100 million, maturing on March 25, 2014. Interest, which will be payable on maturity date, was set at 100% of the CDI rate plus 1.75% p.a. (z) By the end of 2012, BNDES had released an amount of R$1.4 billion of the long-term financing for Porto do Pecm Gerao de Energia S.A. The BNDES financing agreement is for a total amount of R$1.41 billion (in nominal R$, excluding interest during the construction phase), for a total period of 17 years, with amortization over 14 years and no payments of capital or interest until July 2012. The agreed annual cost is TJLP + 2.77%. Interest is being capitalized during the construction phase. The balances of principal and interest shown in the above table correspond to 50% of the original balances, taking into account the 50% share in the company held by EDP Energias do Brasil S.A. This financing has the following guarantees, which are shared with the other project financing banks: (i) Mortgage, (iii) Share Pledge, (iii) Fiduciary Assignment of Rights and Credits, (vi) Conditional Assignment of Rights and Contracts, (v) Chattel Mortgage of Machines and Equipment, (vi) Promissory Notes, (vii) Revenue Account in Reserve Account, (viii) Corporate surety of ENEVA S.A. up to the limit of 50% of debt balance, and (ix) Corporate surety of EDP up to the limit of 50% of debt balance. (aa) To supplement the direct BNDES loan, Porto do Pecm Gerao de Energia S.A. has raised a direct loan from the Banco Interamericano de Desenvolvimento (BID) (A Loan), amounting to US$147 million. The total disbursed so far is US$143.78 million (the equivalent of R$289,429 as of December 31, 2012). The cost of the A Loan is LIBOR + 3.5% for a total period of 17 years, with amortization over 14 years and no repayments of principal until July 2012. The balances of principal and interest shown in the above table correspond to 50% of the original balances, taking into account the 50% share in the company held by EDP Energias do Brasil S.A. (bb) To supplement the direct BNDES loan, Porto do Pecm Gerao de Energia S.A. has raised an indirect loan from the BID (B Loan), amounting to US$180 million. The total disbursed so far is US$176 million (the equivalent of R$348,997 as of December 31, 2012). The onlending banks are the Banco Comercial Portugus Group, Calyon and Caixa Geral de Depsito. The cost of the B Loan is LIBOR + 3% for a total period of 13 years, including 10
189
years of amortization and no repayments of principal until July 2012 The balances of principal and interest shown in the above table correspond to 50% of the original balances, taking into account the 50% share in the company held by EDP Energias do Brasil S.A. (cc) MPX Chile Holding Ltda. entered into a foreign currency loan agreement with Banco Credit Suisse Bahamas on April 13, 2011, with the guarantee of the parent company. The loan was raised in US Dollars for a total of US$15 million (the equivalent of R$31,231 as of December 31, 2012), at a fixed annual interest rate of 8.13%. Capital and interest are to be paid half-yearly, with no capital payments until April 15, 2013, and the loan maturing on April 15, 2015. The balances of principal and interest shown in the above table correspond to 50% of the original balances. The loan agreement was accompanied by the issuance of a promissory note as a guarantee by Credit Suisse AG, Nassau Branch. (dd) MPX Chile Holding Ltda. entered into a foreign currency loan agreement with Banco Credit Suisse Bahamas on June 29, 2011, with the guarantee of the parent company. The loan was raised in US Dollars for a total of US$10 million (the equivalent of R$20,815 as of December 31, 2012), at a fixed annual interest rate of 8%. Capital and interest are to be paid halfyearly, with no capital payments until April 15, 2013, and the loan matures on April 15, 2015. The balances of principal and interest shown in the above table correspond to 50% of the original balances. The loan agreement was accompanied by the issuance of a promissory note as a guarantee by Credit Suisse AG, Nassau Branch. In addition to the above mentioned financing, as from July 2012, the Company disbursed R$500 million as a result of loan agreements subordinated to transactions with IDB, BNDES and BNB, of which R$150 million to Porto do Pecm Gerao de Energia S.A. and R$350 million to UET Porto do Itaqui Gerao de Energia S.A. In October and December 2012, the Company entered into two loan agreements, in each of which the Company undertook to make R$667 thousand available to Pecm Operao e Manuteno de Unidades de Gerao Eltrica S.A., at an annual cost of 110% of the CDI, with maturities currently fixed for September 30 and December 31, 2013, respectively. Management of the Company states that the total amount of debt of any nature, which as defined in Circular Letter CVM/SEP/No. 01/2013 is the aggregate total of the Companys consolidated Current and Non-Current Liabilities, is not contractually subordinated, except for the legal subordination arising from the collateral given by the Company to its financial creditors. As of March 31, 2013, the Companys total consolidated debt of any nature was
190
R$6,077.4 million. R$3,961.8 million of this was collateralized, with preference, in the case of collective insolvency proceedings, over the unsecured creditors of the Company, which at the same date amounted to R$2,115.9 million. As of December 31, 2012, of the Companys total consolidated debt of any nature, amounting to R$6,746.6 million, R$3,898.3 million was collateralized, with preference, in the case of collective insolvency proceedings, over the unsecured creditors of the Company, which at the same date amounted to R$2,848.4 million. The table below shows the financial debt and the non-financial debt and the Companys total indebtedness for the periods indicated:
03/31/2013 5,459,825 617,949 6,077,774 12/31/2012 6,067,349 679,256 6,746,605
(in thousands of R$) Financial Debt Non-financial Debt Total Indebtedness
For more information on the Companys indebtedness, see item 3.7 of this Reference Form.
(ii)
Other long-term relationships with financial institutions
Our Company and its subsidiaries have no long-term relationships with financial institutions, other than those already described in item 10.1(f)(i) of this Reference Form. (iii) Degree of subordination between debts
The long-term financing agreements entered into by our Companys subsidiaries and described above are for the most part structured as Project Finance and are collateralized. The undertakings that have been financed are subject to the usual market obligations not to issue guarantees of any kind for transactions with other creditors, without the same guarantees being offers to the lenders, except with the prior express authorization of the latter, other than encumbrances allowed in terms of the corresponding agreements. Furthermore, the financing agreements entered into by one undertaking are in no way subordinated to debts contracted in respect of the other undertakings. (iv) Any restrictions imposed on the Company, in particular regarding borrowing limits and the raising of new debt, dividend distribution, asset disposal, the issue of new securities or the transfer of control of the Company.
191
Certain usual market covenants are included in the financial agreements mentioned above. We highlight the following: (i) the obligation to submit regular financial statements to lenders; (ii) the right of the lenders to make inspections and to visit the borrowers premises; (iii) the obligation to pay all tax, social security and labor liabilities as they fall due; (iv) the obligation to ensure that contracts materially relevant to their business remain in force; (v) to respect the environmental legislation and to renew the licenses necessary for their operations; (vi) contractual restrictions on transactions with related parties and disposals of assets outside the normal course of business; (vii) restrictions on change in control, corporate restructuring and material changes in the debtors business purposes and constituent documents; (viii) limits on indebtedness and the raising of new debt; (ix) maintenance of debt service ratios; and (x) distribution of dividends above the legal minimum. (g) Limits on use of financing previously contracted
The table below shows the financing contracted by the Company and its subsidiaries, as well as the total disbursed as of March 31, 2013:
Legend: $ MM Disbursed % of Disbursed

(1) Amounts disbursed until March 31, 2013
Porto do Pecm Gerao de Energia S.A. The company has a Financing Agreement upon Opening of Credit entered into with BNDES, which provides for financing of R$1.4 billion (in nominal R$, excluding interest during the construction phase), divided into sub-loans A, B, C and D, for a total period of 17 years, with amortization over 14 years and no payments of capital or interest until July 2012. The agreed annual cost is TJLP + 2.77%. Interest is to be capitalized during the construction phase. As of
192
December 31, 2011, a total of R$1.282 billion had been disbursed. The undertaking also has a financing agreement with the Inter-American Development Bank (IBD), providing for an A Loan for a total of USD147 million and a B Loan for a total of USD180 million. The A Loan is for a total period of 17 years, with amortization over 14 years and no repayments of principal until July 2012. As of March 31, 2013, US$117 million had been disbursed on October 30, 2009, US$22.68 million on September 2, 2010 and US$4.05 million on February 2, 2011, at an annual cost of LIBOR + 3.5%. The B Loan is for a total period of 13 years, including 10 years of amortization and no repayments of principal until July 2012. As of March 31, 2013, US$143 million had been disbursed on October 30, 2009, US$27.72 million on September 2, 2010 and US$4.95 million on February 2, 2011, at an annual cost of LIBOR + 3%. Porto do Itaqui Gerao de Energia S.A. Thermoelectric Plant The company has a Financing Agreement upon Opening of Direct Credit entered into with BNDES, which provides for a loan of R$797 million. The agreed annual cost is TJLP + 2.78%, with part of the line being for social investments (BNDES Social) for an amount of R$10 million and paying the TJLP rate only. The BNDES Social line is for a total period of 9 years, including 6 years of amortization and no repayments of principal until July 2012. The financing period for the remaining amount is 17 years, with amortization over 14 years and no capital repayments until July 2012. Interest on these loans is to be capitalized during the construction phase. As of March 31, 2013, a total of R$771 million had been disbursed. As a supplement to the direct BNDES line of credit, the Porto do Itaqui thermoelectric plant has an indirect line of BNDES credit on-lent by Banco Bradesco S/A and Banco Votorantim S/A, for a total of R$241 million. This portion of the loan is for a total period of 17 years, with amortization over 14 years and no payments of capital or interest until July 2012. The agreed annual cost for sub-loans A, B, C, D and E is IPCA + Reference Rate + 4.80% during the construction phase and UMIPCA + Reference Rate + 5.30% when the plant is in operation. The agreed annual cost for sub-loan F is IPCA + 4.80% during the construction phase and IPCA + 5.30% during the operational phase. Interest on these loans is to be capitalized during the construction phase. As of March 31, 2013, the totality of the loan had been disbursed. In addition to the direct and indirect BNDES financing, the Porto do Itaqui Gerao de Energia S.A. thermoelectric plant has a loan from BNB-FNE, for a total amount of R$203 million. The BNB loan is for a total period of 17 years, with amortization over 14 years and no capital repayments until July 2012. The annual cost is 10%. The conditions of the financing include a 15% compliance bonus, thus reducing the cost to 8.5% p.a. As of March 31, 2013, a total of R$203 million
193
had been disbursed. MPX Pecm II Gerao de Energia S.A. The company has The company has a long-term Financing Agreement upon Opening of Credit entered into with BNDES, which provides for a loan totaling R$737.39 million (in nominal R$, excluding interest during the construction phase), divided into sub-loans A, B, C, D, E, F, G, H, I, J and L. These subloans, amounting to an aggregate amount of R$627.2 million, are for a total period of 17 years, with amortization over 14 years and no payments of capital or interest until July 2013. The agreed annual cost is TJLP + 2.18%. Part of the line, the equivalent of R$2 million, is for social investments (BNDES Social) and pays the TJLP rate only. The BNDES Social line is for a total period of 9 years, with amortization over 6 years and no repayments until July 2013. These sub-loans, amounting to an aggregate amount of R$110.1 million, are for a total period of 17 years, with amortization over 14 years and no payments of capital or interest until June 2014. The agreed annual cost is IPCA + TR BNDES + 2.18%. As of March 31, 2013, a total of R$718 million had been disbursed. As a supplement to the BNDES financing, MPX Pecm II Gerao de Energia S.A. has raised a loan from BNB with FNE funds, for a total amount of R$250 million (in nominal R$), for a period of 17 years with quarterly interest payments and amortization over 14 years. No payments of principal will be made until February 2014, and the annual cost is 10%. The conditions of the financing include a 15% compliance bonus, thus reducing the cost to 8.5% p.a. As of March 31, 2013, the loan totaling R$250 million had been disbursed. UTE Parnaba Gerao de Energia S.A. This plant has funds arising from Bank Credit Notes issued to Banco Ita BBA, Banco Bradesco and Banco Santander, in the amounts of R$125.0 million, R$150.0 million and R$150.0 million respectively. The cost of such bills corresponds to 100% of CDI plus 3.0% per year, with maturity on June 26, 2013. These amounts were partially settled by the release of funds of the long-term Financing Agreement entered into with BNDES. Only the CCB of R$150 million issued to Banco Santander was fully settled. The Parnaba Gerao de Energia S.A. thermoelectric plant has a long-term Financing Agreement through Opening of Credit with BNDES, signed on December 18, 2012, in the amount of R$887,516 million, subdivided into subloans A, B, C and D. The Parnaba Gerao de Energia S.A. thermoelectric plant was released R$495.6 million of the R$671 million provided under sub-loans B and C of the long-term financing agreement entered with BNDES. These sub-loans will be
194
repaid in 168 monthly installments, the first installment being due, together with interest, on July 15, 2013. The annual cost agreed is TJLP + 1.88%. This financing also includes sub-loan D, directed toward social investments (BNDES Social) in the amount of R$12.2 million, which has not yet been disbursed and is only subject to TJLP cost. Additionally, Parnaba Gerao de Energia S.A. thermoelectric plant was released R$204.3 million of the total sub-loan A of the aforesaid long-term financing agreement entered with BNDES. This sub-loan will be repaid in 13 monthly installments, the first installment being due, together with interest, on July 15, 2014. The annual cost agreed is TJLP + 1.88%. The total amount of R$700 million disbursed in December 2012 for the longterm financing agreement entered into with BNDES, with respect to Sub-loans A, B and C, was used to settle: (i) the entire short-term financing granted by BNDES of R$400 million; (ii) the entire CCB of R$150 million issued to Banco Santander; (iii) R$90 million of the total R$150 million of CCBs issued to Banco Bradesco; and (iv) R$60 million of the total R$125 million of the CCB issued to Banco Ita BBA. Funds from the balance to be disbursed by BNDES will be used to settle the amount of the current short-term debt. To guarantee the financing granted through sub-loans A, B and C, bank guarantees were issued in the total amount of R$700 million, of which R$310 million were disbursed by Banco Ita BBA S/A, R$240 million were disbursed by Banco Bradesco S/A and R$150 million were disbursed by Banco Santander (Brasil) S/A. (h) Significant changes in financial statements items:
The following information expresses the opinions of our Management. Our summary financial statements for the years ended December 31, 2012, 2011 and 2010, were extracted from our consolidated financial statements, which were prepared under the responsibility of our management and according to the IFRS and the accounting practices adopted in Brazil, both in force on December 31, 2012. The Companys Management understands that the Company adopted all rules, revisions of rules and interpretations issued by IASB and then in effect, and applicable to the financial statements as of December 31, 2012, 2011 and 2010. The consolidated financial statements included the financial statements of our Company and of the business in which the Company has share control, directly or indirectly, and whose fiscal years coincide with ours and whose accounting practices are uniform. As from January 1, 2013, the Company adopted IFRS 10 and IFRS 11 in the
195
preparation of the Quarterly Statements (ITR) as of March 31, 2013, whose accounting policy is as follows: IFRS 10 establishes one single model that is applicable to all entities, including special purpose entities. The changes introduced by IRFS 10 required significant judgment from Management to determine which entities are controlled, and, thus, which entities must be consolidated by a parent company, compared to the requirements provided for in IAS 27. IFRS 11 eliminated the option to record joint ventures (ECC) based on proportional consolidation. In turn, ECCs that may correspond to the definition of joint venture were recorded based on equity pick-up.
The adoption of IFRS 10 and IFRS 11 was made retroactively regarding the quarterly financial statements for the period ended March 31, 2012. In compliance with IFRS 11, the investments made in the joint ventures Porto do Pecm Gerao de Energia S.A., Porto do Pecm Transportadora de Minrios S.A., OGMP Transporte Areo Ltda., Pecm Operao e Manuteno de Unidades de Gerao S.A., MABE Construo e Administrao de Projetos Ltda., MPX Chile Holding Ltda., Seival Participaes S.A., UTE MPX Sul Energia Ltda., Parnaba Participaes S.A., UTE Porto do A Energia S.A., Porto do A II Energia S.A. and MPX E.ON Participaes S.A. were assessed at the equity method in the individual and consolidated quarterly statements for the threemonths ended March 31, 2013 and 2012. The financial statements presented hereby for the fiscal years ended December 31, 2012, 2011 and 2010 were prepared and are presented according to the accounting practices effective as of December 31, 2012, except when otherwise stated. Accordingly, the financial statements for the three-months periods ended March 31, 2013 and 2012, are not comparable with the other financial statements included herein. Comparison of our consolidated income in the three-month periods ended March 31, 2013 and March 31, 2012. The statements of income for the three month-period ended March 31, 2013 and 2012 consider the accounting practices adopted as from January 1, 2013, which were adjusted retroactively in the statement of income of the three-month period ended March 31, 2012.
Fiscal year ended March 31 of 2013 Net operating revenues Cost of goods and/or services sold Gross profit (loss) Operating revenue (expenses) General and administrative Other operating revenues 196,098 -312,608 -116,510 -123,531 -39,029 511 AV 100% -159% -59% -63% -20% 0% 2012 75,669 -81,797 -6,128 -81,219 -61,873 546 AV 100% -108% -8% -107% -82% 1% Var. 13/12 159% 282% 1801% 52% -37% -6% (in R$ thousands, except percentages)
196
Other operating expenses Equity Pick-up Income before net financial revenues (expenses) and taxes Net financial revenues (expenses) Financial revenues Financial expenses Derivative financial instruments Exchange variation net Income before tax Income tax and social contribution current Income tax and social contribution deferred Loss for the period Attributable to controlling shareholders Interest of Non-controlling shareholders
-1,522 -83,491 -240,041 -77,827 10,256 -86,015 -3,693 1,625 -317,868 0 60,807 -257,061 -250,901 -6,160
-1% -43% -122% -40% 5% -44% -2% 1% -162% 0% 31% -131% -128% -3%
-466 -19,426 -87,347 -6,202 43,174 -54,946 -7,755 13,325 -93,549 -838 16,627 -77,760 -77,481 -279
-1% -26% -115% -8% 57% -73% -10% 18% -124% -1% 22% -103% -102% 0%
227% 330% 175% 1155% -76% 57% -52% -88% 240% -100% 266% 231% 224% 2,108%
Net operating revenues The Companys net operating revenues went from R$75.7 million in the three month period ended March 31, 2012 to R$196.1 million in the three-month period ended March 31, 2013, representing an increase of 159%. The Companys Management believes that this variation was primarily due to the fact that Parnaba I and Itaqui thermoelectric plants projects intensified their business operations in the first quarter of 2013, which increased the sales of energy of the Company and its subsidiaries by 158% against the same period in the year 2012. Cost of goods and/or services sold The cost of goods and/or services sold went from R$81.8 million in the quarter ended March 31, 2012 to R$312.6 million in the quarter ended March 31, 2013, representing an increase of 282%. The Companys Management believes that this variation was basically due to the following reasons: Electrical energy purchased for resale In the quarter ended March 31, 2013, we recorded an increase in the purchase of electrical energy for resale by the subsidiaries Itaqui and Parnaba I thermoelectric plants, which represented an increase of R$105.3 million in the cost of goods and/or services sold. The increase in the purchase of electrical energy is due to the fulfillment of the obligations of energy supply that the Company and its subsidiaries have vis--vis regulatory bodies in the scope of CCEAR contracts, which require that the Company and its subsidiaries supply electrical energy in a given period through its Itaqui and Parnaba I undertakings. Due to the delay in starting the power generation operations of such undertakings, the Company was forced to purchase electrical energy on the market to honor its electrical energy supply commitments. Fuel for generation of electrical energy In the quarter ended on March 31, 2013, we recorded an increase in the
197
consumption of coal and natural gas by the aforesaid subsidiaries amounting to R$71.2 millionin which increased the cost of goods and/or services sold against the same period of 2012. Gross loss The Companys gross loss went up from R$6.1 million in the quarter ended March 31, 2012 to R$116.5 million in the quarter ended March 31, 2013, representing an increase of 1801%. Management understands this increase occurred mainly as a result of the factors described above. Operating revenues (expenses) General and administrative expenses General and administrative expenses went from R$61.9 million in the three-month period ended March 31, 2012 to R$39.0 million in the three-month period ended March 31, 2013, representing a decrease by 37%. The Companys Management believes that this reduction was mainly due to the completion of the Companys corporate restructuring, which took place in June, 2012 and culminated in the spin-off of CCX. Due to this division, the Company failed to register all expenditures with the campaign to prospect coal of CCX, which demanded the hiring of several outsourced services. Equity Pick-up Equity pick-up went from an expense of R$19.4 million in the three-month period ended March 31, 2012 to an expense of R$83.5 million in the three-month period ended March 31, 2013, which represents an increase of 330%. Management understands this increased occurred mainly as a result of the incorporation of MPX E.ON Participaes S.A. as a joint venture between the Company and E.ON, in May 2012. The Company therefore ceased to consolidate, either in whole or proportionately, its shareholdings in the following companies: UET Sul, Porto do A, MPX Chile, Porto do A II, Seival Participaes, MPX Comercializadora de Energia, MPX Solar and MPX Comercializadora de Combustvel, which were transferred to the said joint venture. Our adoption of the above-mentioned accounting standard caused the Company to cease consolidating the result of certain subsidiaries, which were then stated at the equity method. Financial revenues (expenses), net Financial revenues Financial revenues went from R$43.2 million in the three-month period ended March 31, 2012 to R$10.3 million in the three-month period ended March 31, 2013, representing a decrease by 76%. The Companys Management believes that this variation was mainly due to determination of the fair value of derivative instruments included in the issue of debentures of the Company made in June 2011 generating financial revenue of R$13.0 million in the three-month period ended on March 31, 2012, and expenses of R$0.3 million in the three-month period ended March 31, 2013. Fair value measurement
198
was a result of settlement and consequent conversion of the majority of the debentures issued by the Company in the second quarter of 2012. Financial expenses Financial expenses went from R$54,9 million in the three-month period ended March 31, 2012 to R$86.0 million in the three-month period ended March 31, 2013, representing a increase of 57%. The Companys Management believes that this increase was mainly due to the following reasons: (i) appropriation of interest on loans contracted by the Company and its subsidiaries and intermediation fees charged by financial institutions in the amount of R$59,9 million related to increase in financial expenses registered in the period covered, and (ii) which was partially offset by a decrease in interest on debentures issued by the Company in June 2011 due to the conversion of the majority of such debentures into shares of the Company, representing a decrease of R$28.8 million in the Company financial expenses. Derivative financial instruments The amounts regarding our derivative financial instruments went from an expense of R$7.8 million in the three-month period ended March 31, 2012 to a R$3.7 million in the three-month period ended March 31, 2013, representing a decrease by 52%. The Companys Management believes that this variation was mainly due to the variation on mark to market MTM of derivatives. Net exchange variation The amounts regarding net exchange variation went from a revenue of R$13,3 million in the three-month period ended March 31, 2012 to an expense of R$1.6 million in the three-month period ended March 31, 2013, representing a decrease by 88%. The Companys Management believes that this variation was mainly due to the partial spin-off of the Company upon the transfer of the equity interest then owned by the Company in MPX ustria to CCX Carvo in Colombia. It should be noted that the major volume of transactions held by MPX Austria, whether as loans or supply contracts, was in foreign currency. With the conclusion of such partial spin-off, the Company is less exposed to exchange rate variations, which was reflected in its financial information relating to the three-month period ended March 31, 2013. Income tax and social contribution deferred The amounts regarding income tax and social contribution went from R$16.6 million in the threemonth period ended March 31, 2012 to R$60.8 million in the three-month period ended March 31, 2013, representing an increase of 266%. The Companys Management believes that this variation was mainly due to an increase in tax assets generated by an increase in tax losses ascertained in the period. Loss for the year The Companys loss for the year rose from R$77.8 million in the quarter ended March 31, 2012, to R$257.1 million in the quarter ended March 31, 2013, an
199
increase of R$179.3 million. The Company Management is of the opinion that this increase was due largely to the factors mentioned above. Comparison of our consolidated income in the financial years ended December 31, 2012 and December 31, 2011. The statements of income for the financial years ended December 31, 2012 and 2011, presented below, were prepared and are presented in accordance with the accounting practices in force on December 31, 2012.
Fiscal year ended December 31 2012 Net operating revenues Cost of goods and/or services sold Gross profit (loss) Operating revenues (expenses) General and administrative Other operating revenues Other operating expenses Equity pick-up Income before net financial revenues (expenses) and taxes Net financial revenues (expenses) Financial revenues Financial expenses Derivative financial instruments Exchange variation, net Income before taxes Income tax and social contributioncurrent Income tax and social contribution - deferred Loss for the year Attributable to controlling shareholders Interest of Non-controlling shareholders 490,940 (597,554) (106,614) (314,937) (280,284) 1,823 (2,241) (34,235) (421,551) (127,541) 157,760 (232,045) (37,721.00) (15,535) (549,092) (2,289) 116,927 (434,454) (435,202) 748 AV 100% -122% -22% -64% -57% 0% 0% -7% -86% -26% 32% 47% -8% -3% 112% 0% 24% 88% 89% 0% 2011 168,279 (163,778) 4,501 (341,585) (277,934) 1,128 (37,062.00) (27,717.00) (337,084.00) (202,387.00) 106,281.00 (197,344.00) (62,198.00) (49,126.00) (539,471.00) (4,864.00) 142,473.00 (401,862.00) (408,553.00) 6,691.00 AV -100% 497% -3% 203% 165% 01% 9% 7% 84% 50% -26% 49% 15% 12% 134% 1% -35% 100% 102% -2% Var. 12/11 192% 265% -2469% -8% 1% 62% -94% 24% 25% -37% 48% 18% -39% -68% 2% -53% -18% 8% 7% -89% (in R$ thousands, except percentages)
Net operating revenues The Companys net operating revenues increased from R$168.3 million in the fiscal year ended December 31, 2011 to R$490.9 million in the fiscal year ended December 31, 2012, representing an increase of 192%. The Companys Management believes that this variation was mainly due to the following reasons: (i) beginning of billing of electricity sales by Energia Pecm and Itaqui; and (ii) increase in sales by MPX Comercializadora de Energia. Cost of goods and/or services sold The cost of goods and/or services sold increased from R$163.8 million in the fiscal year ended December 31, 2011 to R$597.6 million in the fiscal year ended December 31, 2012, representing an increase of 265%. The increase in the purchase of electrical energy is due to the fulfillment of the obligations of energy supply that the Company and its subsidiaries have vis--vis regulatory bodies,
200
under CCEAR agreements, which require that the Company and its subsidiaries supply electrical energy in a given period through its Itaqui and Energia Pecm undertakings. Due to the delay in starting the power generation operations of such undertakings, the Company was forced to purchase electrical energy on the market to honor its electrical energy supply commitments. In the case of MPX Comercializadora de Energia, as a company whose purpose is the purchase and sale of electric energy, the increase in these costs was mainly due to the increase in the number of Power Purchase Agreements. Gross Profit (Loss) The gross profit (loss) of the Company went from gross profit of R$4.5 million for the year ended December 31, 2011, to gross loss of R$106.6 million for the year ended December 31, 2012, a negative variation of R$111.1 million. Management considers that this decrease occurred principally as a result of the factors described above. Operating revenues (expenses) Other operating expenses Other operating expenses went from R$37.1 million in the fiscal year ended December 31, 2011 to R$2.2 million in the fiscal year ended December 31, 2012, representing an decrease of 94%. Management considers that this variation occurred mainly in the light of the reduction due to the spin-off of CCX and provision for investment loss in 2011. Equity Pick-up Equity pick-up went from an expense of R$27.7 million in the three-month period ended March 31, 2011 to an expense of R$34.2 million in the threemonth period ended March 31, 2012, which represents an increase of 24%. Management understands this increased occurred mainly due to the result recorded by the subsidiary OGX Maranho. Net financial revenues (expenses) Financial revenues Financial revenues increased from R$106.3 million in the fiscal year ended December 31, 2011 to R$157.8 million in the fiscal year ended December 31, 2012, representing an increase of 48%. Management considers that this occurred mainly in the light of the portion of the gain on the fair value of debentures. Financial expenses Financial expenses increased from R$197.3 million in the fiscal year ended December 31, 2011 to R$232.0 million in the fiscal year ended December 31, 2012, representing an increase of 18%. Management believes that this variation occurred basically due to the payment of a premium on the early conversion of the debentures. This transaction led to an expense of R$75 million being debited in the books.
201
Derivative financial instruments The values of derivatives financial instruments went from an expense of R$62.2 million in the fiscal year ended December 31, 2011 to an expense of R$37.7 million in the fiscal year ended December 31, 2012, representing a decrease of 39%. Management considers that this variation occurred mainly in the light of changes in mark to market MTM of derivatives. Exchange variation, net The amounts regarding net exchange variation went from an expense of R$49.1 million in the fiscal year ended December 31, 2011 to an expense of R$15.5 million in the fiscal year ended December 31, 2012, representing a decrease of 68%. Management believes that this variation occurred mainly due to the effect of the transactions in foreign currency of CCX. As a result of the partial spin-off of the Company with the transfer of the shareholding then owned by the Company in MPX ustria to CCX Carvo da Colmbia, the Company failed to register in its income the operations of CCX, protecting the Company against exchange variations of CCXs operations. Income tax and social contribution deferred The amounts regarding deferred income tax and social contribution went from R$142.5 million in the fiscal year ended December 31, 2011 to R$116.9 million in the fiscal year ended December 31, 2012, representing a decrease of 18%. Management believes that this variation occurred mainly due to the increase in tax debts arising from temporary difference, mainly, revenues from exchange variation over loans. Comparison of our consolidated income in the financial years ended December 31, 2011 and December 31, 2010. The statements of income for the financial years ended December 31, 2011 and 2010, presented below, were prepared and are presented in accordance with the accounting practices in force on December 31, 2012.
Year ended December 31, 2011 Net operating revenues Cost of goods and/or services sold Gross profit (loss) Operating revenues (expenses General and administrative Other operating revenues Other operating expenses Equity pick-up Income before net financial revenues (expenses) and taxes Net financial revenues (expenses) 168,279 (163,778) 4,501 (341,585) (277,934) 1,128 (37,062) (27,717) (337,084) (202,387) AV 100% -97% 3% -203% -165% 1% -22% -16% -200% -120% 2010 98,455 (116,482) (18,027) (249,865) (226,167) 8,236 (30,399) (1,535) (267,892) (45,745) AV 100% -118% -18% -254% -230% 8% -31% -2% -272% -46% Var. 11/10 71% 41% -125% 37% 23% -86% 22% 1706% 26% 342% (in R$ thousands, except percentage)
202
Financial revenues Financial expenses Derivative financial instruments Exchange variation, net Income before taxes Income tax and social contribution - current Income tax and social contribution - deferred Loss for the year Attributable to controlling shareholders Interest of Non-controlling shareholders
106,281 (197,344) (62,198) (49,126) (539,471) (4,864) 142,473 (401,862) (408,553) 6,691
63% -117% -37% -29% -321% -3% 85% -239% -243% 4%
65,092 (23,366) (98,272) 10,801 (313,637) (280) 58,303 (255,614) (256,250) 636
66% -24% -100% 11% -319% 0% 59% -260% -260% 1%
63% 745% -37% -555% 72% 1637% 144% 57% 59% 952%
Net operating revenue Net operating revenue increased from R$98.5 million in the financial year ended December 31, 2010 to R$168.3 million in the financial year ended December 31, 2011, representing an increase of 71%. The Companys Management believes that this variation occurred mainly due to the increase in sales agreements of MPX Comercializadora de Energia. Cost of goods and/or services sold Cost of the goods and/or services sold increased from R$116.5 million in the financial year ended December 31, 2010 to R$163.8 million in the fiscal year ended December 31, 2011, representing an increase of 41%. The Companys Management believes that this variation was due mainly to the increase in the number of Power Purchase Agreements of MPX Comercializadora de Energia. Gross profit (loss) The Companys gross profit (loss) went from R$18.0 million in the fiscal year ended December 31, 2010 to R$4.5 million in the fiscal year ended December 31, 2011, representing an increase of 125%. Management understands this increases occurred mainly due to the variation in the abovementioned accounts. Operating revenues (expenses) General and Administrative Expenses General and administrative expenses went from R$226.2 million in the fiscal year ended December 31, 2010 to R$278.0 million in the fiscal year ended December 31, 2011, representing an increase of 23%. Management considers that this variation occurred mainly due to the increase in payroll and services expenses (legal and environmental) linked to investments. Equity pick-up Equity pick up went from negative R$1.5 million in the fiscal year ended December 31, 2010 to negative R$27.7 million in the fiscal year ended December 31, 2011, representing an increase of 1,706%. Management believes that this variation occurred mainly due to the increase in the negative result of investments.
203
Financial revenues Financial revenues increased from R$65.1 million in the fiscal year ended December 31, 2010 to R$106.3 million in the fiscal year ended December 31, 2011, representing an increase of 63%. Management believes that this variation occurred mainly due to the increase in earnings from financial investments. Net financial revenues (expenses) Financial expenses Financial expenses increased from R$23.4 million in the fiscal year ended December 31, 2010 to R$197.3 million in the fiscal year ended December 31, 2011, representing an increase of 745%. Management believes that this variation occurred mainly due to the negative impact from the accounting of the fair value of derivative instruments linked to the convertible debentures, as provided for in the IFRS. Derivative financial instruments The values of derivatives financial instruments went from negative R$98.3 million in the fiscal year ended December 31, 2010 to negative R$62.2 million in the fiscal year ended December 31, 2011, representing a decrease of 37%. Management considers that this variation occurred mainly in the light of changes in mark to market MTM of derivatives. Exchange variation, net The amounts regarding net exchange variation went from R$10,8 million in the fiscal year ended December 31, 2010 to negative R$49,1 million in the fiscal year ended December 31, 2011, representing a decrease of 555%. Management believes that this variation occurred mainly due to the effect of the transactions in foreign currency of CCX. Income tax and social contribution deferred The amounts regarding deferred income tax and social contribution went from R$58.3 million in the fiscal year ended December 31, 2010 to R$142.5 million in the fiscal year ended December 31, 2011, representing a decrease of 144%. Management believes that this variation occurred mainly due to the increase in tax debts arising from temporary difference, basically, revenues from exchange variation over loans.
Comparison of the Main Consolidated Balance Sheet Accounts in March 31, 2013 and December 31, 2012. The balance sheets consolidated on March 31, 2013 and December 31, 2012 consider the accounting practices adopted as from January 1, 2013, which were adjusted retroactively in the balance sheet consolidated on December 31, 2012 for comparability purposes.
204
Consolidated Balance Sheets

As of March 31, 2013 AV As of December 31, 2012 A V Var. 13/12
(in R$ thousands, except percentages) 100 % 10% 4% 0% 3% 0% 2% 0% 1% 0% 0% 0% 90% 0% 2% 0% 0% 4% 2% 0% 0% 0% 0% 10% 70% 3% 100 % 33% 4% 27% 0% 1% 0% 0% 0% 0% 0% 0% 0% 0% 38% 37% 100 % 10% 6% 0% 0% 0% 2% 0% 0% 0% 0% 0% 90% 0% 2% 0% 0% 4% 2% 0% 0% 0% 0% 10% 69% 3% 100 % 26% 1% 23% 0% 0% 0% 0% 0% 0% 1% 0% 0% 0% 40% 39%
Total Assets Current Assets Cash and cash equivalents Securities Accounts receivable Grants receivable CCC Inventories Prepaid expenses Taxes recoverable Derivative gains Miscellaneous advances Restricted deposits Non-current Assets Prepaid expenses Restricted deposits Grants receivable CCC Taxes recoverable Income tax and social contribution - deferred Loans with affiliates Accounts receivable with other related persons Accounts receivable with affiliates AFAC with joint subsidiaries Embedded derivatives Investments Property, plant and equipment Intangible assets Total Liabilities and Shareholders Equity Current Liabilities Suppliers Loans and financing Debts with controlling shareholders Debts with other related parties Debentures Taxes and contributions payable Social and labor obligations Loss from derivative transactions Contractual reserve Profit sharing Dividends payable Other obligations Non-current Liabilities Loans and financing
8,530,091 817,973 359,121 5,600 228,964 10,051 130,811 19,325 61,397 0 2,668 36 7,712,118 4,167 137,546 24,617 23,538 366,355 157,766 1,134 9,017 19,080 227 819,435 5,933,978 215,258 8,530,091 2,829,447 302,729 2,341,969 4,284 47,257 163 39,664 11,365 24,822 31,767 20,633 0 4,794 3,248,297 3,117,856
8,039,596 765,908 519,277 3,441 21,345 17,561 142,687 19,351 37,410 3,018 1,783 35 7,273,688 8,494 135,648 24,617 24,034 305,548 134,926 1,134 6,793 12,425 479 833,955 5,570,399 215,236 8,039,596 2,109,465 115,261 1,819,974 26,783 3,989 111 7,241 9,863 22,951 77,374 20,633 1,960 3,325 3,228,993 3,104,806
6% 7% -31% 63% 973% -43% -8% 0% 64% 100% 50% 3% 6% -51% 1% 0% -2% 20% 17% 0% 33% 54% -53% -2% 7% 0% 6% 34% 163% 29% -84% 1085 % 47% 448% 15% 8% -59% 0% 100% 44% 1% 0%
205
Debts with other related parties Debentures Loss from derivative transactions Provision for unsecured liabilities Income tax and social contribution - deferred Provision for dismantling Shareholders Equity Capital stock Capital reserve Equity valuation adjustments Accumulated losses Shareholders equity attributable to controlling shareholders Interest of minority shareholders
8,400 5,068 93,560 19,239 2,048 2,126
0% 0% 1% 0% 0% 0%
430 4,954 94,797 19,840 2,048 2,118
0% 0% 1% 0% 0% 0%
1853 % 2% -1% -3% 0% 0%
2,452,347 3,731,975 327,618 -116,962 -1,635,500 2,307,131 145,216
29% 44% 4% -1% 19% 27% 2%
2,701,138 3,731,734 321,904 -119,067 -1,384,971 2,549,600 151,538
34% 46% 4% -1% -17% 32% 2%
-9% 0% 2% -2% 18% -10% -4%
Current assets Our current assets went from R$765.9 million on December 31, 2012 to R$818.0 million on March 31, 2013, representing an increase of 7%. Management believes that this increase was due mainly to the following reasons: Cash and cash equivalents Cash and cash equivalents went from R$519.3 million on December 31, 2012 to R$359.1 million on March 31, 2013, representing a decrease of 31%. The Companys Management believes that this variation was mainly due to capital expenditure (CAPEX), mainly in Parnaba I TPP, Parnaba II TTP and Porto do Itaqui, which was partially offset by fundraising through long-term loans. Accounts receivable Accounts receivable went from R$21.3 million on December 31, 2012 to R$229 million on March 31, 2013, representing an increase of 973%. The Companys Management believes that this increase was mainly du e to the fact that Parnaba I and Itaqui TPP intensified their commercial operations in the first quarter of 2013, resulting in an increase in energy sales of the Company and its subsidiaries of 133% in relation to the same period in the year 2012. Inventories The value of inventories went from R$142.7 million on December 31, 2012 to R$130.8 million on March 31, 2013, representing a decrease of 8%. The Companys Management believes that this variation was mainly due to the use of coal in electricity generation process, mainly by Porto de Itaqui plant. Taxes recoverable Accounts receivable went from R$37.4 million on December 31, 2012 to R$61.4 million on March 31, 2013, representing an increase of 64%. The
206
Companys Management believes that this variation wa s mainly due to an increase in deferred tax assets relating to prepayment of income tax, social contribution, PIS and COFINS, mainly relating to Porto de Itaqui project.
Non-current assets Our non-current assets went from R$7,237.7 million on December 31, 2012 to R$7,712.1 million on March 31, 2013, representing an increase of 6%. Management believes that this variation was mainly due to the following reasons:
Income tax and social contribution - deferred Deferred income tax and social contribution went from R$305.5 million on December 31, 2012 to R$366.4 million on March 31, 2013, representing an increase of 20%. The Companys Management believes that this variation was mainly due to an increase in tax assets generated by an increase in tax losses ascertained in the period. Loans with affiliates Loans with affiliates increased from R$134.9 million on December 31, 2012 to R$157.8 million on March 31, 2013, representing an increase of 17%. The Companys Management believes that such variation was mainly due the creation by the Company and E.ON of the joint venture MPX E.ON Participaes S.A. in May 2012, the Company ceased to consolidate, totally and proportionally, its equity interests in the following companies: UTE Sul, Porto do A, MPX Chile, Porto do A II, Seival Participaes, MPX Comercializadora de Energia, MPX Solar e MPX Comercializadora de Combustvel, which were transferred to such joint venture. As a result of adjustment to the rule mentioned above, the balances related to loans with subsidiaries were not eliminated, as above mentioned. Property, plant and equipment Property, plant and equipment values went from R$5,570.4 million on December 31, 2012 to R$5,934.0 million on March 31, 2013, representing an increase of 7%. The Companys Management believes that this increase was mainly due to capital expenditure (CAPEX) in the construction of Thermal Power Plants - TPP Parnaba I and Parnaba II. Current liabilities Our current liabilities went from R$2,109,5 million on December 31, 2012 to R$2,829.4 million on March 31, 2013, representing an increase of 34%. Management believes that this variation was mainly due to the following reasons: Suppliers The amounts regarding suppliers went from R$115.3 million on December 31,
207
2012 to R$302.7 million on March 31, 2013, representing an increase of 163%. Management believes that this increase was mainly due to expenses with suppliers designated to capital expenditure (CAPEX) in the construction of TPPs, especially Porto de Itaqui, Parnaba I TPP and Parnaba II TPP. Loans and financing The amounts regarding loans and financing went from R$1,820.0 million on December 31, 2012 to R$2,342,0 million on March 31, 2013, representing an increase of 29%. Management believes that this increase was mainly due to an increase in short term loans primarily taken by the Company. Debts with other related parties Debts with other related parties increased from R$4.0 million on December 31, 2012 to R$47.3 million on March 31, 2013, representing an increase of 1085%. The Companys Management believes that such variation was mainly due to the adoption of new consolidation accounting rules introduced by IFRS 10. Taxes and contributions payable Tax and contributions payable increased from R$7.2 million on December 31, 2012 to R$39.7 million on March 31, 2013, representing an increase of 448%. The Company Management believes that such increase was mainly due to PIS and COFINS incurred on revenues generated from Porto de Itaqui and Parnaba I TPP. Contractual reserve The amount of contractual reserves went from R$77.4 million on December 31, 2012 to R$31.8 million on March 31, 2013, representing a decrease of 59%. Management believes that this decrease was mainly due to the release of a contractual withholding to MABE (EPC) by Porto de Itaqui and MPX Pecm II.
Non-current Liabilities Our non-current liabilities went from R$3,229.0 million on December 31, 2012 to R$3,248.3 million on March 31, 2013, representing an increase of 1%. The Company Management believes that such variation was due to the fact that debts with other related parties increased from R$0.4 million on December 31, 2012 to R$8.4 million on March 31, 2013, representing an increase of 1853%. The Companys Management believes that this variation was mainly due to the capital contribution in the amount of R$8.4 million made by PETRA, the majority shareholder of Parnaba I TPP.
208
Comparison of the Main Consolidated Balance Sheet Accounts in December 31, 2012 and December 31, 2011. The consolidated balance sheets as of December 31, 2012 and 2011 presented below, were prepared and are presented in accordance with the accounting practices in force on December 31, 2012. Consolidated Balance Sheets
As of December 31, 2012 As of December 31, 2011
AV
AV
Var. 12/11
(in R$ thousands, except percentages)
Total Assets Current Assets Cash and cash equivalents Securities Accounts receivable Grants receivable CCC Inventories Prepaid expenses Taxes recoverable Derivative gains Miscellaneous advances Restricted deposits Other credits Non-current Assets Prepaid expenses Restricted deposits Grants receivable CCC Taxes recoverable Income tax and social contribution - deferred Loans with subsidiaries Accounts receivable from other related parties Accounts receivable from subsidiaries embedded derivatives Investments Property, plant and equipment Intangible assets Total Liabilities and Shareholders Equity Current Liabilities Suppliers Loans and financing Debts with parent company Debts with other related parties Debentures
9,451,180 1,100,728 590,469 3,441 152,114 17,561 211,718 40,462 57,438 3,018 20,267 4,237 3 8,350,452 8,705 137,717 24,617 34,709 456,123 359 8,575 3,732 479 62,956 7,362,815 249,665 9,451,180 2,407,159 228,638 1,915,402 3,407 19,057 111
100% 12% 6% 0% 2% 0% 2% 0% 1% 0% 0% 0% 0% 88% 0% 1% 0% 0% 5% 0% 0% 0% 0% 1% 78% 3% 100% 25% 2% 20% 0% 0% 0%
7,953,680 1,708,592 1,442,415 9,437 21,898 4,828 85,938 13,908 37,711 19,289 11,285 61,844 39 6,245,088 2,514 62,471 24,617 90,834 339,049 8,436 55,742 5,393,809 267,616 7,953,680 1,632,130 186,680 1,030,687 3,697 30,463
100% 21% 18% 0% 0% 0% 1% 0% 0% 0% 0% 1% 0% 79% 0% 1% 0% 1% 4% 0% 0% 0% 0% 1% 68% 3% 100% 21% 2% 13% 0% 0% 0%
19% -36% -59% -64% 595% 264% 146% 191% 52% -84% 80% -93% -92% 34% 246% 120% 0% 62% 35% n/a 2% n/a n/a 13% 37% 7% 19% 47% 22% 86% n/a 415% 100%
209
Taxes and contributions payable Social and labor obligations Loss from derivative transactions Contractual reserve Profit sharing Dividends payable Other obligations Non-current Liabilities Loans and financing Debts with other related parties Debentures Embedded derivatives Loss from derivative transactions Income tax and social contribution - deferred Provision for dismantling Other provisions Shareholders Equity Capital Stock Capital reserve Equity valuation adjustments Accumulated losses Shareholders equity attributable to controlling shareholders Interest of minority shareholders
11,375 12,980 39,506 133,935 23,900 1,960 16,888 4,339,446 4,151,947 215 4,954 166,992 10,431 4,197 710 2,704,575 3,731,734 321,904 (119,067) (1,384,971) 2,549,600 154,975
0% 0% 0% 1% 0% 0% 0% 46% 44% 0% 0% 0% 2% 0% 0% 0% 29% 39% 3% (1%) (15%) 27% 2%
18,261 18,017 86,633 180,497 19,177 2,270 55,748 4,951,475 3,311,063 340 1,403,152 62,003 156,798 13,239 3,854 1,026 1,370,075 2,042,014 274,625 (71,670) (982,323) 1,262,646 107,429
0% 0% 1% 2% 0% 0% 1% 62% 42% 0% 18% 1% 2% 0% 0% 0% 17% 26% 3% (1%) (12%) 16% 1%
38% 28% 54% 26% 25% -14% -70% -12% 25% 37% -100% -100% 7% 21% 9% 31% 97% 83% 17% 66% 41% 102% 44%
Current assets Current assets went from R$1,708.6 million on December 31, 2011 to R$1,100.7 million on December 31, 2012, representing a decrease of 36%. Management believes that this variation was primarily due to the following factors: Cash and cash equivalents The amounts regarding cash and cash equivalents went from R$1,442.4 million on December 31, 2011 to R$590.5 million on December 31, 2012, representing a decrease of 59%. Management considers that this variation occurred mainly due to expenses from CAPEX investments which were partially offset by funding, via capitalization through the issue of common shares. Accounts receivable Accounts receivable increased from R$21.9 million on December 31, 2011 to R$152.1 million on December 31, 2012, representing a decrease of 595%. Management believes that this increase took place, mainly due to (i) the beginning of billing of electricity sales by Energia Pecm and Itaqui; and (ii) the increase in sales by MPX Comerc. de Energia. Inventories
210
Inventories increased from R$86.0 million on December 31, 2011 to R$211.7 million on December 31, 2012, representing a decrease of 146%. Management believes that this increase occurred, mainly due to the purchase of supplies for electricity generation, especially coal. Taxes recoverable Taxes recoverable increased from R$37.7 million on December 31, 2011, to R$57.4 million on December 31, 2012, representing an increase of 52%. Management considers that this increase occurred mainly due to the increase in tax credits regarding the prepayment of income tax, social contribution and taxes withheld. Restricted deposits Restricted deposits went from R$61.8 million on December 31, 2011, to R$4.2 million on December 31, 2012, representing a decrease of 93%. Management believes that this decrease occurred mainly due to the release of deposits linked to the BNDES loan after capital investments in Energia Pecm. Non-current assets Current assets increased from R$6,245.1 million on December 31, 2011, to R$8,350.5 million on December 31, 2012, representing an increase of 34%. Management believes that this increase was primarily due to the following factors: Restricted deposits Restricted deposits increased from R$62.5 million on December 31, 2011, to R$137.7 million on December 31, 2012, representing an increase of 120%. Management believes that this increase occurred, mainly, (i) by the release of the guarantees with Banco Bradesco to buy energy on the open market for Itaqui; and (ii) by hiring new loan guarantees with Citibank by ENEVA . Taxes recoverable Taxes recoverable went from R$90.8 million on December 31, 2011, to R$34.7 million on December 31, 2012, representing a decrease by 62%. Management considers that this decrease occurred mainly due to the offset of tax credits regarding the prepayment of income tax, social contribution and taxes withheld. Income tax and social contribution - deferred The amounts regarding deferred income tax and social contribution increased from R$339.0 million on December 31, 2011, to R$456.1 million on December 31, 2012, representing an increase of 35%. Management considers that this variation occurred mainly due to the increase in tax credits (tax losses and temporary differences) on investments in Energia Pecm, Pecm II, Itaqui, Porto do Au and Comerc.de Combustveis.
211
Property, plant and equipment The amount of property, plant and equipment increased from R$5,393.8 million on December 31, 2011, to R$7,362.8 million on December 31, 2012, representing an increase of 37%. Management believes that this variation occurred mainly due to CAPEX Investments for construction of Thermal Power Plants (Usinas Termeltricas de Energia or UTEs). Current liabilities Current liabilities increased from R$1,632.1 million on December 31, 2011, to R$2,407.2 million on December 31, 2012, representing an increase of 47%. Management believes that this variation was primarily due to the following factors: Suppliers The amounts regarding suppliers increased from R$186.6 million on December 31, 2011, to R$228.6 million on December 31, 2012, representing an increase of 22%. Management believes that this increase occurred mainly due to expenses with suppliers for CAPEX Investments for construction of UTEs. Loans and financing Loans and financing increased from R$1,030.7 million on December 31, 2011 to R$1,915.4 million on December 31, 2012, representing an increase of 86%. Management believes that this increase was mainly due to (i) the increase in short-term loans taken by ENEVA ; and (ii) investments in Parnaba I and UTE Parnaba II. Debentures The amount of debentures went from R$30.5 million on in December 31, 2011, to R$0.1 million on in December 31, 2012. Management believes that this decrease was mainly due to the conversion of almost all the debentures issued into shares in ENEVA . Contractual reserve Contractual reserves went from R$180.5 million on December 31, 2011, to R$133.9 million on December 31, 2012, representing a decrease of 26%. Management considers that this variation was mainly due to the release of the contractual reserve to MABE (EPC) by Itaqui. Other obligations The amounts referring to other obligations went from R$55.7 million on December 31, 2010, to R$16.9 million on December 31, 2011, representing a reduction of 70%. Management considers that this variation was mainly due to the reduction in VAT obligation as result of the spin-off of a portion of ENEVA s capital regarding the investments made in MPX Colombia. Non-current liabilities
212
Non-current liabilities went from R$4,951.5 million on December 31, 2011, to R$4,339.4 million on December 31, 2012, representing a decrease of 12%. Management believes that this decrease was primarily due mainly to the following factors: Loans and financing Loans and financing increased from R$3,311.1 million on December 31, 2011, to R$4,151.9 million on December 31, 2012, representing an increase of 25%. Management believes that this increase was mainly due to the release of long-term credit lines for Energia Pecm, by BNDES and IDB; for Pecm II, by BNDES and BNB; and for Itaqui, by BNDES and BNB. Debentures The amount of debentures increased from R$1,403.1 million on in December 31, 2011, to R$5,0 million on in December 31, 2012. Management believes that this variation was mainly due to the conversion of almost all the debentures issued into shares in ENEVA . Embedded derivatives The variation in embedded derivatives occurred due to the conversion of almost all of the debentures into shares of ENEVA . Shareholders equity The amounts regarding consolidated shareholders equity went from R$1,370.1 million on December 31, 2011, to R$2,704.6 million on December 31, 2012, representing an increase of 97%. Management believes that this increase was mainly due to (i) the capital increase through issue of common shares; (ii) the capital increase through the conversion of debentures; (iii) the reduction of capital with the spin-off of MPX Colombia; and (iv) the loss recorded in the financial year ended December 31, 2012.
Comparison of the Main Consolidated Balance Sheet Accounts in December 31, 2011 and December 31, 2010. The consolidated balance sheets as of December 31, 2011 and 2010 presented below, were prepared and are presented in accordance with the accounting practices in force on December 31, 2011. Consolidated Balance Sheets
As of December 31, 2011 As of December 31, 2010
AV
AV
Var. 11/10
(in R$ thousands, except percentages)
Total Assets
7,953,680
100%
4,821,986
100%
65%
213
Current Assets Cash and cash equivalents Securities Accounts receivable Grants receivable CCC Inventories Prepaid expenses Taxes recoverable Derivative gains Miscellaneous advances Restricted deposits Other credits Non-current Assets Prepaid expenses Restricted deposits Grants receivable CCC Taxes recoverable Income tax and social contribution - deferred Accounts receivable with other related persons Other credits Investments Property, plant and equipment Intangible assets Total Liabilities Current Liabilities Suppliers Loans and financing Debts with other related parties Debentures Taxes and contributions payable Social and labor obligations Loss from derivative transactions Contractual reserve Profit sharing Dividends payable Other obligations Non-current Liabilities Loans and financing Debts with other related parties Debentures Embedded derivatives Loss from derivative transactions Income tax and social contribution - deferred Provision for dismantling Other provisions Shareholders Equity Capital stock Capital reserve
1,708,592 1,442,415 9,437 21,898 4,828 85,938 13,908 37,711 19,289 11,285 61,844 39 6,245,088 2,514 62,471 24,617 90,834 339,049 8,436 55,742 5,393,809 267,616 7,953,680 1,632,130 186,680 1,030,687 3,697 30,463 18,261 18,017 86,633 180,497 19,177 2,270 55,748 4,951,475 3,311,063 340 1,403,152 62,003 156,798 13,239 3,854 1,026 1,370,075 2,042,014 274,625
21% 18% 0% 0% 0% 1% 0% 0% 0% 0% 1% 0% 79% 0% 1% 0% 1% 4% 0% 0% 1% 68% 3% 100% 21% 2% 13% 0% 0% 0% 0% 1% 2% 0% 0% 1% 62% 42% 0% 18% 1% 2% 0% 0% 0% 17% 26% 3%
931,961 304,467 175,091 9,846 4,190 7,068 8,469 52,615 4,132 365,508 575 3,890,025 4,283 9,170 24,617 18,270 215,220 3,263 3,541 50,459 3,472,679 88,523 4,821,986 675,344 119,486 294,809 649 5,156 14,369 46,164 183,958 10,753 2,445,079 2,295,173 1,271 143,048 2,048 3,539 1,701,563 2,041,918 223,851
19% 6% 4% 0% 0% 0% 0% 1% 0% 0% 8% 0% 81% 0% 0% 1% 0% 5% 0% 0% 1% 71% 2% 100% 14% 2% 6% 0% 0% 0% 0% 1% 4% 0% 0% 0% 51% 48% 0% 0% 0% 3% 0% 0% 0% 34% 42% 5%
83% 374% -95% 122% 15% 1116% 64% 28% 173% -83% -93% 61% -41% 581% 0% 397% 58% 159% -100% 10% 55% 202% 65% 142% 56% 250% 470% 100% 254% 25% 88% -2% 78% 100% 100% 103% 44% -73% 100% 100% 10% 546% 9% 100% -20% 0% 23%
214
Equity valuation adjustments Accumulated losses Shareholders equity attributable to controlling shareholders Interest of minority shareholders Total shareholders equity
(71,670) (982,323) 1,262,646 107,429 1,370,075
(1%) (12%) 16% 1% 17%
(35,400) (572,183) 1,658,186 43,377 1,701,563
(1%) (12%) 34% 1% 35%
102% 72% -24% 148% -19%
Current assets Our current assets changed from R$932.0 million on December 31, 2010, to R$1,708.6 million on December 31, 2011, representing an increase of 83%. The Companys Management understands that such increase occurred due to the following factors: Cash and cash equivalents The amounts referring to cash and cash equivalents changed from R$304.5 million on December 31, 2010, to R$1,442.4 million on December 31, 2011, representing an increase of 374%. The Companys Management understands that such increase mainly occurred due to fundraising via issuance of debentures subscribed by BNDESPAR, Gvea Investimentos, the controlling shareholder Eike Batista and non-controlling shareholders. Securities The amounts referring to securities changed from R$175.1 million on December 31, 2012, to R$9.4 million on December 31, 2011, representing a decrease by 95%. The Companys Management understands that such reduction mainly occurred due to a decrease in the amount spent on CAPEX investments. Inventories The amounts referring to inventories changed from R$7.1 million on December 31, 2012, to R$85.9 million on December 31, 2011, representing an increase of 1,116%. The Companys Management understands that such increase mainly occurred due to the acquisition of inputs for generation of electrical energy, particularly coal. Taxes recoverable The amounts referring to taxes recoverable changed from R$52.6 million on December 31, 2012, to R$37.7 million on December 31, 2011, representing a decrease by 28%. The Companys Management understands that such decrease mainly occurred due to the offsetting of tax credits referring to the early payment of income, social contribution and other taxes withheld. Restricted deposits The amounts referring to restricted deposits changed from R$365.5 million on December 31, 2012, to R$61.8 million on December 31, 2011,
215
representing a decrease of 83%. The Companys Management understands that such decrease mainly occurred due to the release of restricted deposits to BNDES loans, after capital contributions to investments in Energia Pecm and Pecm II. Non-current assets Our non-current assets changed from R$3,890.0 million on December 31, 2010, to R$6,245.0 million on December 31, 2011, representing an increase of 61%. The Companys Management understands that such increase occurred due to the following factors: Restricted deposits The amounts referring to restricted deposits changed from R$9.2 million on December 31, 2010, to R$62.4 million on December 31, 2011, representing an increase of 581%. The Companys Management understands that such variation mainly occurred due to (i) the increase in the debt from the BNB financing for Pecm II; and (ii) guarantee agreements with Bradesco Trianon for purchase of energy in the free market for Itaqui, Energia Pecm and Comercializadora de Energia. Taxes recoverable The amounts referring to taxes recoverable changed from R$18.2 million on December 31, 2010, to R$90.8 million on December 31, 2011, representing a decrease of 397%. The Companys Management understands that such increase mainly occurred due to the increase in tax credits referring to the early payment of income, social contribution and other taxes withheld. Deferred income and social contribution taxes The amounts referring to deferred income and social contribution taxes changed from R$215.2 million on December 31, 2010, to R$339.0 million on December 31, 2011, representing an increase of 58%. The Companys Management understands that such increase mainly occurred due to the increase in tax credits (tax loss and temporary differences) in investments in Energia Pecm, Pecm II, Itaqui, Porto do Au and Comerc. de Combustveis. Property, plant and equipment The amounts referring to property, plant and equipment changed from R$3,472.7 million on December 31, 2010, to R$5,393.8 million on December 31, 2011, representing an increase of 55%. The Companys Management understands that such increase mainly occurred due to expenditures on CAPEX investments. Intangible assets The amounts referring to intangible assets changed from R$88.5 million on December 31, 2010, to R$267.6 million on December 31, 2011, representing an
216
increase of 202%. The Companys Management understands that such increase mainly occurred due to the acquisition, together with Bertin Group, of concessions/CCEARs provided by ANEEL. Current liabilities Our non-current liabilities changed from R$675.3 million on December 31, 2010, to R$1,632.1 million on December 31, 2011, representing an increase of 142%. The Companys Management understands that such increase occurred due to the following factors: Suppliers The amounts referring to suppliers changed from R$119.5 million on December 31, 2010, to R$186.6 million on December 31, 2011, representing an increase of 56%. The Companys Management understands that such variation mainly occurred due to expenditures with suppliers for CAPEX investments (building of UTEs). Loans and financing The amounts referring to loans and financing changed from R$294.8 million on December 31, 2010, to R$1,030.7 million on December 31, 2011, representing an increase of 250%. The Companys Management understands that such variation mainly occurred due to the increase in short-term loans for investments in MPX Colmbia and UTE Parnaba. Debentures As of December 31, 2011, the Company raised funds via issuance of debentures subscribed by BNDESPAR, Gvea Investimentos, the controlling shareholder Eike Batista and non-controlling shareholders. Other obligations As of December 31, 2011, the variation occurred in other obligations due to the record of VAT obligation referring to the investment in MPX Colmbia. Non-current liabilities Our non-current liabilities changed from R$2,445.1 million on December 31, 2010, to R$4,951.5 million on December 31, 2011, representing an increase of 103%. The Companys Management understands that such increase occur red due to the following factors: Loans and financing The amounts referring to loans and financing changed from R$2,295.2 million on December 31, 2010, to R$3,311.1 million on December 31, 2011, representing an increase of 44%. The Companys Management understands that such variation mainly occurred due to the effect of transactions in foreign currency. Debentures
217
As of December 31, 2011, the Company raised funds via issuance of debentures subscribed by BNDESPAR, Gvea Investimentos, the controlling shareholder Eike Batista and non-controlling shareholders. Embedded derivatives The variation in embedded derivatives occurred due to the record of fair value of bonds issued by ENEVA , according to IFRS standards.
218
10.2 Managements comments on operating and financial result
The financial information included in this Reference Form, except when stated otherwise, refers to the Companys consolidated financial statements. (a) (i) Companys operating results Description of any relevant revenue components
The Companys Management understands that the basis for its revenues and, consequently, for its operations, in the years ended December 31, 2012, 2011 and 2010, and in the quarters ended March 31, 2013, refers to the gross operating revenue from the sale of energy that totaled R$541.6 million, R$190.4 million, R$112.8 million and R$217.6 million, respectively. (ii) Factors that substantially affected the operating results
According to the Companys Management, the facts that substantially affected their operating results may be summarized as follows: Quarter ended March 31, 2013: The Company assessed a loss of R$257.1 million. The primary factor that substantially affected this result was that the Company and its subsidiaries received proper authorizations from ANEEL to start electricity generation, but since the projects for which such authorizations were granted were not completed, the Company and its subsidiaries were required to purchase electricity from third parties to comply with their energy supply agreements, resulting in a material loss. Year ended 2012: The Company assessed a loss of R$434.5 million. The primary factors that substantially affected this result are the following: (i) appropriation of interest incurred and costs of bonds in the amount of R$130.9 million; (ii) negative result of R$37.7 million from non-speculative derivatives operations; and (iii) impact on operating costs of coal plants, due to change in the commencement of commercial operations. Year ended 2011: The Company recorded a loss of R$408.5 million. The primary factors that substantially affected this result are the following: (i) measurement of the fair value of derivatives included in the issue of debentures of the Company made in June 2011, resulting in a loss of R$62.0 million; (ii) appropriation of interest incurred on debentures in the amount of R$50.8 million; and (iii) negative result of R$62.2 million from non-speculative hedge transactions. Year ended 2010: The Company assessed a loss of R$256.2 million. (b) Variations in revenues attributable to adjustments to prices, exchange
219
rates, inflation, changes in volumes and introduction of new products and services The Companys Management understands that the Companys revenue is not directly impacted by variations in prices, exchange rates and inflation and was not affected in the last three years for changes in volumes and introduction of new products and services. (c) Impact of inflation, variation in prices of the primary inputs and products, exchange and interest rates in the Companys operating and financial result In the year ended December 31, 2012, 2011 and 2010, and in the quarter ended March 31, 2013, the consolidate net financial result totaled expenses of R$127.5 million, R$202.4 million, R$45.7 million and R$77.8 million, respectively, especially due to interest on loans and financings, the record of hedge positions and open mark-to-market positions.
220
10.3 Events with actual and expected relevant effects on the financial statements
(a)
Inclusion or disposal of operational segment
The Company Management informs that in the financial years ended December 31, 2010, 2011 and 2012, and in the three-month period ended March 31, 2013 no operational segment of the Company was added or disposed of.
(b)
Establishment, acquisition or disposal of equity interest
(i) On March 1, 2012, CCX Brasil Participaes S.A. was incorporated, with the corporate purpose of holding equity interest in other business and non-business companies, in Brazil or abroad. On May 24, 2012, the Board of Directors of ENEVA approved a partial spin-off which resulted in the incorporation of CCX Carvo da Colmbia. (Colombia Coal). The purpose of this transaction was to spin off ENEVA s mining assets located in Colombia.
(i) MPX E.ON Participaes, established on March 20, 2012, has the business purpose of holding shares in other business and non-business companies, in Brazil or abroad. On May 24, 2012, ENEVA S.A. contributed R$67.9 million in the capital of MPX E.ON Participaes, via the partial transfer of its investment portfolio with shareholdings in the subsidiaries MPX Chile Holding Ltda., Parnaba Participaes S.A., UTE MPX Sul Energia S.A., UTE Porto do Au Energia S.A. and UTE Porto do Au II Energia S.A. On the same date, ENEVA S.A. contributed R$62.0 million as premium in the subscription of new shares. On December 12, 2012 ENEVA increased capital stock of MPX EON Participaes by R$19.3 million, via the transfer of 50% of its shares in the subsidiary Seival Participaes.
(ii)
On November 8, 2012 MPX Tau II Energia Solar Ltda. was established, with the business purpose of implementing and exploring electrical energy projects via solar power use, including the generation and trading of electric power and availability of a generation back-up. On May 11, 2012 UTE Parnaba V Gerao de Energia S.A. was established, with the business purpose of developing, building and operating the thermal energy project units from natural gas, and the trading of natural gas. On May 12, 2012 Parnaba Gerao e Comercializao de Energia S.A. was established, with the business purpose of trading, importing and exporting electrical energy, as well as the participation in the capital stock
(iii)
(iv)
221
of other companies.
(v)
On June 20th, 2012 MPX Investimentos S.A. was established, with the business purpose of holding equity interest in other business and nonbusiness companies, as shareholder, in Brazil or abroad. On September 10, 2012 MPX Desenvolvimentos S.A. was established, with the business purpose of developing and implementing coal gasification projects for the production of industrial gases and its liquid and gaseous byproducts, utilizing commercial technologies. On December 31, 2012 this subsidiary is reported as uncovered liability. March 1, 2012 UTE Parnaba III Gerao de Energia S.A. was established with the business purpose of developing, constructing and operating projects in thermal energy generation from natural gas, and the trading of natural gas, as well as the holding equity interests in other companies, whether simple or business companies, whose business purposes are similar to the Companys. On October 8, 2012 its corporate name was changed to Parnaba Participaes S.A.
(vi)
(vii) On
(c)
Unusual events or operations
The Company management informs that there was not any unusual Company related event or activities during the periods ended December 31, 2012, 2011 and 2010, which may have caused, or is expected to cause any relevant effect on the financial statements or returns of the Company.
222
10.4 Significant changes in accounting practices Qualifications and Emphases in the Auditors report The Company Management has the following comments to make on changes in accounting practices and emphases in the report of the independent auditors:
(a)
Significant changes in accounting practices
The consolidated financial statements for the year ended December 31, 2010 were the first presented in accordance with the IFRS. The Company applied the accounting policies defined to all periods presented, which includes the balance sheet at the transition date, defined as January 1, 2009. To adjust the financial statements to the IFRS requirements, and to the pronouncements, interpretations and guidelines issued by CPC, the Company made the relevant mandatory changes required and certain optional exemptions in relation to full retrospective application, as follows: Optional exemptions Business Combination Exemption The Company applied the business combination described in IFRS 1 and CPC 37 and thus did not restate the business combinations that occurred before January 1, 2009, the transition date. Deemed Cost Exemption The Company opted not to use deemed cost in the valuation of its fixed assets, since this item, as presented pursuant to the previous accounting practices (BR GAAP in force in 2009), already materially met the main requirements for the recognition, valuation and presentation of CPC 27 (IAS 16), and mainly because substantial portions of the Companys assets are under construction, and were purchased recently.
Mandatory changes Interest of non-controlling shareholders is now part of shareholders equity, separated in a specific line, as per CPC 26 and IAS 1. Cumulative Translation Adjustments The Company set to zero the cumulative translation adjustments of previous years to the transition date of January 1, 2009. This change was applied to all subsidiaries abroad. The Company recognized Stock Options granted by the Controlling Shareholder, as per CPC 10 and ICPC 05, for BRGAAP purposes, and IFRS 2 (Share-based payment) and IFRIC 11, for IFRS purposes.
223
For BRGAAP purposes, Law No. 11941/09 extinguished the deferred asset, allowing the maintenance of the balance accrued until December 31, 2008, which can be amortized over up to 10 years, subject to impairment test. This is being adopted by the Company in the individual financial statements pursuant to the provisions of CPC 43. In accordance with the IFRS, pre-operational revenues and expenditures should be recorded in income for the year when incurred. With the adoption of IFRS. The Company valued its fixed assets based on CPC 27, ICPC 10, and IAS 16, not identifying relevant effects as to the assessment of the useful life, residual values and componentization of the assets. As it understands that its fixed assets are recorded at values that are very close to their fair value, and given that they mostly comprise fixed assets in progress and properties recently purchased, it did not use deemed cost. The net effects of exchange variation on the principa l of loans were reclassified from fixed assets to accumulated losses in the consolidated balance sheet on the date of initial adoption (January 1, 2009) and in income for the year ended December 31, 2009, as per CPC 20 and IAS 23. All IFRS standards and interpretations for financial instruments in force were adopted by the Company in 2010. The main applicable ones are as follows: Amendment to IFRS 7 (Financial Instruments: Disclosure): The purpose of this amendment is primarily to improve disclosure requirements. This increases the requirements for the disclosure of fair value measurement, liquidity risk, market risk, credit risk and any other significant risk. Amendment to IFRS 7 relating to Fair Value Hierarchy: This amendment establishes the division of fair value hierarchy relating to financial instruments. The hierarchy gives priority to unadjusted quoted prices in active markets for the financial asset or liability, which are classified as Level 1. Fair Value of financial instrument may be classified in three different levels, as set forth below: . Level 1: Data from active market (unadjusted traded price), so that they can be accessed on a daily basis, including on the day of fair value measurement. . Level 2: Data from active market (unadjusted traded price) other than that included in Level 1, derived from pricing model based on observable market data. . Level 3: Data derived from pricing model based on unobservable market data. Amendment to CPC 38 and IAS 39 (Financial Instruments) In such pronouncement, the procedures to identify derivative instruments embedded in contracts were highlighted, aiming at timely recognition, control and appropriate accounting treatment to be used, and which should be applicable to
224
the Company and its subsidiaries. Agreements with possible clauses of embedded derivative instruments or securities were analyzed in order to mitigate potential host contracts. If found, there is guidance regarding possible effectiveness testing and methodology for calculation of fair value. The Company and its subsidiaries do not hold outstanding agreements with embedded derivatives. In addition to the points described above, the Company has adjusted its financial statements for disclosure purposes, and now presents the following information: Consolidated statement of comprehensive income, as required by CPC 26 and IAS 1 Earnings (losses) per share, as required in CPC 41 and IAS 33 (Earnings per share). Expenses by nature, as required in CPC 26 and IAS 1 (Presentation of Financial Statements). Information by segment, as required in CPC 22 and IFRS 8 (Operating Segments). The consolidated financial statements for the year ended December 31, 2011, prepared under the IFRS, did not suffer any effects of changes in the accounting practices. There were no changes in the accounting practices used by the Company and its subsidiaries during the years ended December 31, 2012, 2011 and 2010. The accounting practices adopted by the Company and its subsidiaries are consistent with those utilized abroad. Except for the adoption of IFRS 10 and 11, whose accounting policy is described below, quarterly information has been prepared based on the same accounting practices used to prepare the Financial Statements as of December 31, 2012. Therefore, this quarterly information should be read together with the Financial Statements as of December 31, 2012 IFRS 10 establishes a single control model which applies to all entities, including special purpose entities. The changes introduced by IFRS 10 required that Management exercise a significant judgment to determine which entities are controlled, and hence, required to be consolidated by a controlling company, comparatively to the requisites that were part of IAS 27. IFRS 11 eliminates the option of accounting for joint ventures(ECC) based on proportional consolidation. Instead, the ECCs which fit the definition of joint
225
arrangements should be recorded based on the equity method. In compliance with IFRS 11, investments in jointly-controlled subsidiaries Porto do Pecm Gerao de Energia S.A., Porto do Pecm Transportadora de Minrios S.A., OGMP Transporte Areo Ltda., Pecm Operao e Manuteno de Unidades de Gerao S.A., MABE Construo e Administrao de Projetos Ltda., MPX Chile Holding Ltda., Seival Participaes S.A., UTE MPX Sul Energia Ltda., Parnaba Participaes S.A., UTE Porto do A Energia S.A., Porto do A II Energia S.A. and MPX E.ON Participaes S.A. are evaluated by the equity method in the individual and consolidated quarterly information. (b) Significant effects of changes in accounting practices
As of January 1, 2013, the Company adopted new accounting rules for compliance with the international accounting standards. As a result of the change in accounting practices, the Company no longer consolidates in its financial information all investees over which the Company, individually, has no controlling power, namely, Porto do Pecm Gerao de Energia S.A., Porto do Pecm Transportadora de Minrios S.A., OGMP Transporte Areo Ltda., Pecm Operao e Manuteno de Unidades de Gerao S.A., MABE Construo e Administrao de Projetos Ltda., MPX Chile Holding Ltda., Seival Participaes S.A., UTE MPX Sul Energia Ltda., Parnaba Participaes S.A., UTE Porto do A Energia S.A., Porto do A II Energia S.A. and MPX E.ON Participaes S.A. In addition, the Company began to recognize recognizes income from the abovementioned companies at the equity method. Thus, the Companys income account at the equity method gained relevance in the context of income of the Company as a whole, which would not occur at the previously adopted accounting practices. The Company presents below the table showing the amendments made to the comparative balances restated in the quarterly information (ITR) for the consolidated balance sheet as of December 31, 2012 and the three-month period ended March 31, 2012:
Consolidated 12/31/2012 Originally disclosed (in R$ thousands) Assets Current Assets Cash and cash equivalents Securities Accounts receivable Subsidies receivable Fuel Consumption account Inventories Prepaid expenses Tax recoverable Gains on Derivatives Miscellaneous advances Adjustments Restated
590,469 3,441 152,114 17,561 211,718 40,462 57,438 3,018 20,267
(71,192) (130,769) (69,031) (21,111) (20,028) (18,484)
519,277 3,441 21,345 17,561 142,687 19,351 37,410 3,018 1,783
226
Restricted deposits Other credits
4,237 3 1,100,728
(4,202) (3) (334,820)
35 765,908
Non-current assets Prepaid expenses Restricted deposits Subsidies receivable Fuel Consumption account Tax recoverable Income and social contribution taxes - deferred Loans to affiliates Accounts receivable from other related persons Accounts receivable from affiliates Advance for future capital increase in affiliates Embedded derivatives
8,705 137,717 24,617 34,709 456,123 359 8,575 3,732 479 675,016 62,956 7,362,815 249,665 9,451,180
(211) (2,069) (10,675) (150,575) 134,567 (7,441) 3,061 12,425 (20,918) 770,999 (1,792,416) (34,429) (1,411,584)
8,494 135,648 24,617 24,034 305,548 134,926 1,134 6,793 12,425 479 654,098 833,955 5,570,399 215,236 8,039,596
Investments Property, plant and equipment Intangible assets
227
Consolidated 12/31/2012 Originally disclosed (in R$ thousands) Liabilities Current Liabilities Suppliers Loans and Financing Owing to affiliates Owing to parent company Owing to other related parties Debentures Taxes and contributions payable Social and labor liabilities Losses on derivatives transactions Contractual reserve Profit sharing Dividends payable Other obligations Adjustments Restated
228,638 1,915,402 3,407 19,057 111 11,375 12,980 39,506 133,935 23,900 1,960 16,888 2,407,159
(113,377) (95,428) 26,783 (3,407) (15,068) (4,134) (3,117) (16,555) (56,561) (3,267) (13,563) (297,694)
115,261 1,819,974 26,783 3,989 111 7,241 9,863 22,951 77,374 20,633 1,960 3,325 2,109,465
Non-current liabilities Loans and financing Debts with other related parties Debentures Losses on derivatives transactions Provision for uncovered liabilities Income and social contribution taxes - deferred Provision for decommissioning Other provisions Shareholders equity Capital stock Capital Reserve Adjustments to equity valuation Accumulated loss Shareholders equity attributable to controlling shareholders Participation of non-controlling shareholders Total shareholders equity
4,151,947 215 4,954 166,992 10,431 4,197 710 4,339,446
(1,047,141) 215 (72,195) 19,840 (8,383) (2,079) (710) (1,110,453)
3,104,806 430 4,954 94,797 19,840 2,048 2,118 3,228,993
3,731,734 321,904 (119,067) (1,384,971) 2,549,600 154,975 2,704,575 9,451,180
(3,437) (3,437) (1,411,584)
3,731,734 321,904 (119,067) (1,384,971) 2,549,600 151,538 2,701,138 8,039,596
228
Statement of income
Consolidated 3/31/2012 Originally disclosed (in R$ thousands) Revenues from sale of goods and/or services Cost of goods and/or services sold Gross income Operating expenses/revenues General and administrative Personnel and managers Other expenses Third party services Depreciation and amortization Leases and rentals Other operating revenues Other operating expenses Losses on disposal of assets Equity pick-up Income before financial income and taxes Financial income Financial revenues Positive currency variation Fair value of debentures Financial investments Derivative financial instruments Other financial revenues Financial expenses Negative currency variations Derivative financial instruments Interest/costs of debentures Other financial expenses Income before income taxes Income and social contribution taxes on earnings Current Deferred Loss for the year Attributed to partners of the parent company Attributed to non-controlling partners Loss per share Basic and diluted loss per share (in R$) 75,669 (81,809) (6,140) (76,636) (64,332) (27,440) (5,024) (26,301) (1,304) (4,263) 575 (482) (482) (12,397) (82,776) (11,373) 180,337 47,738 13,000 28,137 89,219 2,243 (191,710) (25,948) (110,598) (29,035) (26,129) (94,149) 16,389 (838) 17,227 (77,760) (77,481) (279) (0.56870) 12 12 (4,583) 2,459 641 854 685 210 69 (29) 16 16 (7,029) (4,571) 5,171 (139,639) (29,052) (37) (110,381) (169) 144,810 20,587 124,005 218 600 (600) (600) 75,669 (81,797) (6,128) (81,219) (61,873) (26,799) (4,170) (25,616) (1,094) (4,194) 546 (466) (466) (19,426)
-
Adjustments
Restated
(87,347)
-
(6,202) 40,698 18,686 13,000 28,100 (21,162) 2,074 (46,900) (5,361) 13,407 (29,035) (25,911) (93,549) 15,789 (838) 16,627 (77,760) (77,481) (279) (0.56870)
(c)
Qualifications and emphases in the auditors report
In compliance with the standards contained in article 25 of CVM Instruction No. 480, of December 7, 2009, as amended, Management declares that it has reviewed, discussed and agreed with the opinions stated in the independent Auditors report, regarding the Financial Statements (Parent Company and Consolidated) for the period ended December 31, 2010, 2011 and 2012.
(2010)
229
Emphasis As described in note 3, the individual financial statements were prepared according to the accounting practices adopted in Brazil. In the case of ENEVA S.A. these practices differ from the IFRS applicable to separate financial statements only as regards valuation of investments in subsidiaries, affiliates and joint ventures by the equity method, whilst for the purposes of the IFRS they would be valued at cost or fair value; and as regards maintenance of the deferred asset balance existing as of December 31 2008, which is being amortized only for companies in operating phase. Financial statements were presented taking into account the regular business continuity of the Company and its subsidiaries. As mentioned in note 13, the subsidiaries Porto do Pecm Gerao de Energia S.A., MPX Pecm II Gerao de Energia S.A., UTE Porto do Itaqui Gerao de Energia Ltda., UTE Porto do Au Energia S.A., Seival Sul Minerao Ltda., UTE MPX Sul Energia Ltda., MPX Energia de Chile Ltda., MPX ustria GmbH, MPX Viena GmbH, MPX Colombia S.A., MPX Tau Energia Solar Ltda., Porto do Pecm Transportadora de Minrios S.A., MPX Comercializadora de Combustveis Ltda., Termopantanal Participaes Ltda., Termopantanal Ltda. and Nova-Sistemas de Energia Ltda. The recovery of values recorded in non-current assets depend on the success of future operations of the Company and its subsidiaries, and the subsidiaries depend on financial support of shareholders and/or third party funds until their operations are profitable. Lack of said financial funds will raise serious doubts as to the continuity of the Company and its subsidiaries. Managements plans related to the operating activities are described in note 12. The Companys management agrees with the auditors emphasis and reiterates its understanding that the projects described in these financial statements are profitable and will remunerate the shareholders for the investments made. (2011) Emphasis As described in note 3, the individual financial statements were prepared according to the accounting practices adopted in Brazil. In the case of ENEVA S.A. these practices differ from the IFRS applicable to separate financial statements only as regards valuation of investments in subsidiaries, affiliates and joint ventures by the equity method, whilst for the purposes of the IFRS they would be valued at cost or fair value; and as regards maintenance of the deferred asset balance existing as of December 31 2008. Our opinion is not qualified as a
230
result of this matter. As mentioned in note 1, the subsidiaries Porto do Pecm Gerao de Energia S.A., MPX Energia Pecm I Gerao de Energia S.A., UTE Porto do Itaqui Gerao de Energia S.A., UTE Porto do A Energia S.A., Seival Sul Minerao Ltda., UTE MPX Sul Energia Ltda., MPX Viena GmbH, MPX ustria GmbH, MPX Colmbia S.A., Porto do Pecm Transportadora de Minrios S.A., MPX Comercializadora de Combustveis Ltda., Termopantanal Ltda., Nova-Sistemas de Energia Ltda., UTE Parnaba Gerao de Energia S.A., Pecm Operao e Manuteno de Unidades de Gerao Eltrica S.A., Kebiny S.A., CGX Castilla Generacin de Energia Ltda., Usina Termeltrica Seival Ltda. and UTE Parnaba II Gerao de Energia S.A. are in pre-operating phase. The recovery of values recorded in non-current assets depend on the success of future operations of the Company and its subsidiaries, affiliated and joint ventures, and these depend on financial support of the shareholders and/or third party funds until their operations are profitable. Managements plans for the Company and its subsidiaries related to operating activities are described in notes 1 and 13. The Companys management agrees with the auditors emphasis and reiterates its understanding that the projects described in these financial statements are profitable and will remunerate the shareholders for the investments made. (2012) Emphasis As described in note 3, the individual financial statements were prepared according to the accounting practices adopted in Brazil. In the case of ENEVA S.A. these practices differ from the IFRS applicable to separate financial statements only as regards valuation of investments in subsidiaries, affiliates and joint ventures by the equity method, whilst for the purposes of the IFRS they would be valued at cost or fair value; and as regards maintenance of the deferred asset balance existing as of December 31 2008, which is being amortized. Our opinion is not qualified as a result of this matter. A relevant part of the Company, its subsidiaries and joint ventures are in preoperating phase, and the business continuity and recovery of values recorded in non-current assets depend on the success of future operations, as well as the shareholders financial support and/or third party funds until operations are profitable. Managements plans related to the operating activities are described in notes 1 and 12. The financial statements were prepared considering the regular business continuity of the Company, as well as of its affiliates and joint ventures.
231
Our opinion is not qualified as a result of this matter. The Companys management agrees with the auditors emphasis and reiterates its understanding that the projects described in these financial statements are profitable and will remunerate the shareholders for the investments made. (03/2013) Emphasis The interim financial statements were prepared taking into account the normal course of business of the Company and its subsidiaries, including those mentioned in Note 1, which are in pre-operational phase. The continuity of the business of the Company and its subsidiaries, and the recovery of the amounts recorded in non-current assets depend on the success of future operations, as well as on the financial support from shareholders and/or third-party funds, until our operations are able to generate the funds needed for the maintenance of the Company. Managements plans regarding the Companys operational activities are described in Notes 1 and 12. Our opinion has not been changed due to this issue. Restatement of corresponding amounts As mentioned in Note 5, due to the changes occurred in our accounting policy as a result of adoption of CPC 19 (R2) and IFRS 11 - Joint Arrangements, the corresponding individual and consolidated amounts regarding the balance sheet for the year ended December 31, 2012, and the relevant interim financial information regarding the statement of income, the statement of comprehensive income, changes in shareholders equity, statement of cash flows and statement of added value (supplementary information) for the quarter ended March 31, 2012, which are presented for comparison purposes, were adjusted and are being restated as provided for in CPC 23 and IAS 8 - Accounting Policies, Changes in Accounting Estimates and Erros); and CPC 26(R1) and IAS 1- Presentation of Financial Statements). Our conclusion did not include changes regarding this subject.
232
10.5 Managements comments on Critical Accounting Policies
The Companys management clarifies that the critical accounting polices applied by the Company are described below. Use of estimates and judgments. Preparation of individual and consolidated financial statements in accordance with IFRS and CPC standards requires Management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported values of assets, liabilities, income and expenses. Actual future results may differ from these estimates. Estimates and assumptions are revised on a continuous basis. Revisions for accounting estimates are recognized in the year in which the estimates are revised and in any future years affected. The information on assumptions and estimates that may result in adjustments within the next financial year are included below: Financial Instruments i. Non-derivative financial assets
The Company and its subsidiaries initially recognize loans, receivables and deposits on their original date. All other financial assets (including assets at fair value through income) are initially recorded on the negotiation date on which the Company and its subsidiaries become part of the instruments contractual provisions. The Company and its subsidiaries do not recognize a financial asset when the contractual rights to the cash flow of the asset expire or when the Company and its subsidiaries transfer the rights to receiving the contractual cash flow over a financial asset in a transaction in which essentially all the risks and benefits of owning the financial asset are transferred. Any interest that is created or held by the Company and its subsidiaries in the financial assets are recognized as an individual asset or liability. The financial assets and liabilities are offset and the net value presented in the balance sheet when the Company and its subsidiaries have the legal right to offset the values and intend to settle them on a net basis or realize the asset and settle the liability simultaneously. The Company and its subsidiaries classify non-derivative financial assets in the following categories: financial assets at fair value through income, investments
233
held to maturity, loans and receivables and financial assets available for sale. Financial assets at fair value through income A financial asset is classified at fair value through income in case it is held for trading or is designated as such at the time of the initial recording. Financial assets are recorded at fair value through income if the Company and/or its subsidiaries manage such investments and make buying or selling decisions based on their fair values according to documented risk management, and the Companys and its subsidiaries investment strategy. The transaction costs are recorded in income when incurred. Financial assets recorded at fair value through income are measured at fair value, and changes in the fair value of these assets, which take into consideration any gain on dividends, are recorded in income for the period. Financial assets at fair value through income comprise Cash and cash equivalents, and equity instruments which otherwise would be classified as available for sale. Financial assets held to maturity In case the Company and its subsidiaries intend and are capable of holding the debt instruments until maturity, then such financial assets are classified as held to maturity. The investments held to maturity are initially recognized at fair value plus any directly attributable transaction costs. After initial recognition, investments held to maturity are measured at the amortized cost by the effective interest method, less any losses for impairment. Financial assets held to maturity are composed of debentures. Loans and receivables Loans and receivable are financial assets with fixed or determinable payments which are not quoted in the active market. Such assets are initially recognized at fair value plus any attributable transaction costs. After initial recognition, loans and receivables are measured at amortization cost by the effective interest method, less any losses for impairment.
Receivable are comprised of trade accounts receivable, subsidies receivable, CCC, restricted deposits and related assets.
ii. Non-derivative financial liabilities The Company and its subsidiaries recognize debt securities issued and
234
subordinate liabilities initially on the date they are created. All the other financial liabilities (including liabilities at fair value through income) are recorded initially on the date of negotiation on which the Company and its subsidiaries become part of the instruments contractual provisions. The Company and its subsidiaries write -off a financial asset when they have their contractual obligations removed, cancelled or due. The Company and its subsidiaries classify non-derivative financial liabilities in the category of other financial liabilities. Such financial liabilities are recorded initially at fair value plus any attributable transaction costs. After initial recognition, these financial liabilities are measured at amortized cost by the effective interest method. The Company and its subsidiaries have the following non-derivative financial liabilities: loans and financing, suppliers, accounts payable with related parties and contractual withholdings. iii. Derivative financial instruments, including hedge accounting The Company and its subsidiaries hold financial hedge derivative instruments to protect its exposure to foreign currency risk and interest rate variation. Embedded derivatives are separated from the main contracts and recorded individually in case the economic characteristics and risks of the main contract and the embedded derivative are not intrinsically related, or an individual instrument with the same conditions of the embedded derivative meets the definition of derivative and the combined instrument is not measured at fair value through income. At the time of initial designation of hedge, the Company and its subsidiaries formally document the relationship between the hedge instrument and the hedged items, including the risk management objectives and the hedge transaction strategy, together with the methods that will be used to evaluate the effectiveness of the hedge relationship. The Company and its subsidiaries assess, both at the beginning of the relationship as well as on an ongoing basis, whether there is any expectation that the hedge instruments are highly effective in offsetting the variations in fair value or the cash flow of the respective hedged items during the period for which the hedge is designated. For a cash flow hedge of an expected transaction, the transaction must have a highly predictable occurrence and should present an exposure to cash flow variations that could affect the final reported net income.
Property, plant and equipment 1) Recognition and measurement
235
Property, plant and equipment items are measured at historical acquisition or construction cost, less accumulated depreciation and impairment. Cost includes expenditures that are directly attributable to the acquisition of an asset. The cost of assets built by the company itself includes: The cost of materials and direct labor; Any other costs to place the asset in the necessary location and conditions so that it is capable of operating as expected by management; The costs to disassemble the asset and to restore the location where the assets are located; and Costs of loans on qualifiable assets. The cost of a property, plant and equipment item may include the reclassification from other comprehensive income of qualifiable cash flow hedges in connection with the purchase of property, plant and equipment in foreign currency. Software purchased that integrates the functionality of an equipment item is capitalized as part of that equipment. When parts of a property, plant and equipment item have different useful lives, they are recorded as individual items (main components) of property, plant and equipment. Gains and losses in the disposal of a property, plant and equipment item (determined by the difference between funds stemming from disposal and the book value of the item), are recorded in other operating revenues/ expenses in income. 2) Subsequent costs Subsequent costs are capitalized to the extent that it is probable that future benefits associated with the costs will inure to the Group. Maintenance costs and recurrent repairs are recorded in income. 3) Depreciation Property, plant and equipment items are depreciated by the straight-line method in income for the period based on the estimated economic useful life of each component. Leased items are depreciated by the lesser period between the estimated useful life of the item and the contractual term, unless it is certain that the Company will obtain ownership of the good at the end of the lease. Land lots are not depreciated. Property, plant and equipment items are depreciated as from the date they are
236
installed and are available for use, or in case of assets built internally, as from the day the construction is complete and the asset is available for use. Intangible assets and goodwill Intangible assets comprised items acquired from third parties, and are measured at the total acquisition cost, less amortization expenses. Goodwill due to future expected profitability is not amortized and is tested annually for impairment, being recorded as intangible assets in the consolidated financial statements and in investments in the parent companys individual financial statement. 1) Goodwill The goodwill resulting from the acquisition of subsidiaries is included in intangible assets in the consolidated financial statements. 2) Other intangible assets Other intangible assets that are acquired by the Company and its subsidiaries and that have a finite useful life are measured at cost, less accumulated amortization and impairment losses, when applicable. 3) Amortization Except for non amortized goodwill, amortization is recorded in income by the straight-line method over the estimated useful life of the intangible assets, as from the date these are available for use. Impairment (i) Financial assets (including receivables) A financial asset not measured at fair value through income is valued on each presentation date to assess whether there is objective evidence of impairment. An asset is impaired if objective evidence indicates that a loss event occurred after the initial recognition of the asset, and that such loss event had a negative effect on projected cash flows that can be estimated in a reliable manner. The objective evidence of impairment of financial assets (including equity securities) may include non-payment or late payment by the debtor, the restructuring of the amount due to the Company and its subsidiaries on conditions that the Company and its subsidiaries would not consider in other transactions, indications that the debtor or issuer will file for bankruptcy, or the termination of an active market for a security. In addition, for equity assets, a significant or longlasting decline in its fair value below its cost is objective evidence of impairment. Financial assets measured at amortized cost
237
The Company and its subsidiaries consider evidence of impairment for receivables at the individual and collective level. All significant individually receivables are tested for impairment. All significant individually receivable identified as impaired are then valued collectively for impairment that has occurred, but not yet identified. Individually significant assets are valued collectively for impairment by grouping of these securities with similar risk characteristics. Upon assessing impairment collectively, the Company utilizes historical trends regarding probability of default, recovery terms and impairment amounts incurred, adjusted to reflect managements judgment of the assumptions if the current economic and credit conditions are such that real losses will probably be greater or less than those suggested by the historical trends. Impairment of a financial asset measured at amortized cost is calculated as the difference between the book value and the present value of future estimated cash flow, discounted at the assets original effective interest rate. Losses are recorded in income and reflected in a provision account against receivables or assets held to maturity. The interest over the impaired asset is still recorded. When a subsequent event indicates a reversal of impairment, the decrease in impairment is reversed and recorded in income. The Companys management has not identified any evidence of impairment on December 31, 2012. (ii) Non-financial assets The book values of the non-financial assets of the Company and its subsidiaries, except the inventories and deferred income tax and social contribution, are reviewed at each presentation date to assess whether there is any indication of impairment. If such indication occurs, then the recoverable value of the asset is estimated. In case of goodwill and intangible assets with undefined useful life, the recoverable value is estimated every year. The recoverable value of an asset or cash generating unities the greater of value in use and fair value less selling expenses. When assessing value in use, the future estimated cash flow is discounted to its present value via a discount rate before taxes that reflects the ongoing market conditions for the period of capital recoverability and the asset specific risks. For the purpose of impairment testing, assets that cannot be tested individually are grouped together in the smallest asset group that generates a continuous useful cash inflow, such assets being for the most part independent of the cash flows from other assets or group of assets (the cash generating unit or CGU). For the purpose of testing impairment of goodwill, the goodwill amount recorded in a business combination is allocated to
238
the CGU or group of CGUs for which the benefit of combination synergy is expected. This allocation reflects the lowest level in which goodwill is monitored for internal purposes, and is not greater than an operating segment determined according to IFRS 8 and the CPC 22. The corporate assets of the Company and its subsidiaries do not generate cash inflow individually. In case there is an indication that a corporate asset is impaired, then the recoverable value is allocated to the CGU or group of CGUs to which the corporate asset belongs in a consistent and reasonable base. An impairment loss is recorded in case the book value of an asset or its CGU exceeds its estimated recoverable value. Impairment losses are recognized in income. Impairment losses related to the CGUs are allocated initially to reduce the book value of any goodwill allocated to the CGUs, and then, if there a loss still remains, to reduce the book value of the other assets within the CGU or group of CGUs on a pro rata base. An impairment loss related to goodwill is not reversed. As for other assets, impairment losses are reversed only when the book value of the asset does not exceed the book value that would have been determined, net of depreciation and amortization, in case the impairment loss had not been recorded. Share-based payment The fair value of share-based benefits payment as of the date of granting is recorded as personnel expenses, with the corresponding increase in shareholders equity, for the year in which the employees unconditionally acquire the right to the benefits. The amount recorded as expense is adjusted to reflect the number of shares for which it is expected that service conditions and nonmarket acquisition conditions will be met in such a manner that the value finally recorded as expense is based on the number of shares that actually meet service conditions and non-market acquisition conditions on the date when payment rights vest (vesting date). For non-vested share-based benefits, the fair value as of the date of granting of share-based payment is measured to reflect such conditions, and there is no change for differences between expected and actual benefits. Provisions A provision is recorded in the balance sheet when a company has current legal or constituted obligations as a result of a past event, and it is probable that an outflow of economic funds will be required to settled the obligation. Provisions are recorded based on the best estimates of the risk involved. Income and social contribution taxes Deferred income and social contribution taxes for the current year, for companies
239
opting for the taxable income regime, are calculated at the rate of 15% plus 10% on the annual taxable income exceeding R$240 for income tax and 9% on taxable income for social contribution tax, and consider the offsetting of tax losses and negative basis of social contribution tax limited to 30% of taxable income. Deferred income and social contribution taxes are recorded to reflect future tax effects attributable to temporary differences between the tax basis of assets and liabilities and their respective book value. Income and social contribution tax expenses include current and deferred income taxes. Current and deferred income taxes are recognized in income, except for deferred income tax on hedge accounting impacts, which is recorded as equity valuation adjustment, directly in shareholders equity. Deferred tax assets and liabilities are offset if there is a legal right to offset current tax liabilities and assets, and these relate to income taxes assessed by the same tax authority in the accounting records of the same entity subject to taxation. A deferred income and social contribution tax asset is recognized for tax losses, tax credits and unused deductible temporary differences not used when it is probable that future taxable profits will be available against which the deductible temporary differences may be used Deferred income and social contribution taxes are reviewed at every reporting date and reduced to the extent that their realization is no longer probable.
240
10.6 Internal controls related to the preparation of financial statements Level of efficiency and deficiency and recommendations included in the auditors report (a) Level of efficiency of such controls indicating imperfections and measures adopted to correct them occasional
The Companys Management believes in the efficiency of internal procedures and controls adopted to ensure the quality, accuracy and reliability of the Companys financial statements. For this reason, the Companys financial statements properly show the result from its operations and its equity and financial condition as of the respective dates. Additionally, Management did not identify any types of imperfections that may compromise the Companys financial statements. (b) Deficiencies and recommendations on internal controls set forth in the independent auditors report Management understands that the internal control reports issued by the Companys independent auditors, with respect to the years ended December 31, 2012, 2011, and 2010, do not indicate any material deficiencies in the internal procedures and controls used to prepare the Companys financial statements.
241
10.7 - Managements comments on the use of proceeds from public offerings and deviations, if any (a) How proceeds from the public offering were used
The Company Management states that, in June 15, 2011, the Company issued 21,735,744 debentures, at R$63.00 each, totaling R$1.376 billion. In the years ended December 31, 2011, 2012, and in the current year, the proceeds from the issuance of debentures were used to: reinforce the Companys cash; and
support the contributions required for investments in the development of the Companys ventures. (b) Material deviations between the effective use of proceeds and proposals disclosed in the memorandums of the respective distribution Management informs that, in the past three years and in the current year, there were no deviations between the use of proceeds and proposals set forth in the memorandums. (c) In the event of deviations, reasons for such deviations
Management informs that, in the past three years and in the current year, there were no deviations between the use of proceeds and the proposals set forth in the memorandums.
242
10.8 Managements comments on off-balance sheet items (a) Off-balance-sheet items directly or indirectly held by the issuer
Management informs that the Company holds no off-balance sheet items. i. Lease and operational lease of assets and liabilities This is not applicable given that the Company has no off-balance sheet items. ii. Written-off receivables portfolios on which the Company maintains risks and responsibilities, and the relevant liabilities. Not applicable, given that the Company has no off-balance sheet items. iii. Agreements on future purchase and sale of products and services Not applicable, given that the Company has no off-balance sheet items. iv. Building agreements whose work has not been completed Not applicable, given that the Company has no off-balance sheet items. v. Agreements on future financing receivables Not applicable, given that the Company has no off-balance sheet items. (b) Other off-balance sheet items
Management informs that there are no other off-balance sheet items.
243
10.9 Managements comments on relevant off-balance sheet items
(a) How such items change or may change revenues, expenses, operating income, financial expenses or other items recorded in the issuers financial statements Management informs that the Company holds no off-balance sheet items. (b) Nature and purpose of operation
Management informs that the Company holds no off-balance sheet items. (c) Nature and amount of obligations assumed and rights generated in favor of the issuer due to the transaction Management informs that the Company holds no off-balance sheet items.
244
10.10 Managements comments on business plan (a) Investments
(i) Quantitative and qualitative description of current and future investments The Company Management states that, by the end of 2012, the Company had seven projects on final stages of implementation: Energia Pecm, UTE Itaqui, Pecm II and Parnaba I, II, III and IV, which are described below.
Energia Pecm The total investment until the end of 2012, based on the financial information of 2012, is of R$852.9 million.Pecm II The total investment until the end of 2012, based on the financial information of 2012, is of R$1,623.2 million.Itaqui The total investment until the end of 2012, based on the financial information of 2012, is of R$2,501.0 million.Parnaba I The total investment until the end of 2012, based on the financial information of 2012, is of R$1,066.5 million.Parnaba II The total investment until the end of 2012, based on the financial information of 2012, is of R$488.7 million. (ii) Investment financing sources
Energia Pecm The Company Management states that, in July 2009, two long-term financing facilities were contracted for the project with the Brazilian Social and Economic Development Bank - BNDES and the Inter-American Development Bank IDB. The table below summarizes the conditions and stages of the financing contracted for the project:
Amount (1) disbursed BNDES BID (A + B loan)(2) R$1,402 MM R$555 MM % of disbursement 99% 98% Total amount
(1)
Term (years) 17 13 to 17
Grace period Jul/12 (interest + principal) Jul/12 (principal)
Cost TJLP + 2.77% p.a. LIBOR + 3-3.5% p.a. c/ step-ups
R$1,410 MM R$566 MM
245
Total
R$1,957 MM(3)
99%
R$1,976 MM
(1) Amounts in nominal R$. (2) The debt in US$ is hedged at a spot rate of 1.81 R$/US$. (3) Amounts disbursed until December 31, 2012.
The Company Management states that, considering the total amount financed by the BNDES and IDB and the investment required to implement the venture, the capital / debt ratio of the project will be nearly 25% / 75%. Pecm II The Company Management states that, in September 2010, a long-term financing facility was contracted for the project with the Brazilian Social and Economic Development Bank BNDES. To supplement the BNDES financing, MPX Pecm II Gerao de Energia S.A. contracted a loan with BNB with funds from the FNE, in January 2011. The table below summarizes the conditions and stages of the financing contracted for the project:
Amount (1) disbursed Direct BNDES / TJLP Direct BNDES / IPCA Social BNDES BNB (FNE) Total R$598 MM R$110 MM R$1.2 MM R$235 MM R$944 MM
(2)
% of disbursement 96% 100% 60% 94% 89%
Total amount
(1)
Term (years) 17 17 9 17 -
Grace period Jul/13 (interest + principal) Jul/13 (interest + principal) Jul/13 (interest + principal) Jul/13 (principal) -
Cost TJLP + 2.18% p.a. IPCA + 9.8% p.a. TJLP 8.5% p.a. -
R$625 MM R$110 MM R$2 MM R$250 MM R$987 MM
(1) Amounts in nominal R$. (2) Amounts disbursed until December 31, 2012.
Itaqui The Company Management states that, in December 2009, two long-term financing facilities were contracted for the project with the Brazilian Social and Economic Development Bank - BNDES and Banco do Nordeste BNB The BNDES loan has a direct and indirect credit line, with Banco Bradesco and Banco Votorantim acting as the onlending banks. Considering the total amount financed by the BNDES, BNB, Bradesco and Votorantim and the investment required to implement the venture, the capital / debt ratio of the project will be nearly 25% / 75%. The table below summarizes the conditions and stages of the financing contracted for the project:
Amount (1) disbursed % of disbursement Total amount
(1)
Term (years)
Grace period
Cost
246
Direct BNDES Indirect BNDES
R$795 MM R$241 MM
99% 100%
R$797 MM R$241 MM
17 17
Jul/12 (interest + principal) Jul/12 (interest + principal)
TJLP + 2.78% p.a. IPCA + 12.1% p.a. ($100 MM) / TJLP + 4.5-5.0% p.a. ($141 MM) 8.5% p.a. -
BNB Total
R$203 MM R$1,239 MM
(2)
100% 99%
R$203 MM R$1,241 MM
17 --
Jul/12 (principal) -
Parnaba I The Company Management states that, in December 2012, a long-term financing facility was contracted for the project with the Brazilian Social and Economic Development Bank BNDES. The table below summarizes the conditions and stage of the debt contracted as of December 31, 2012:
Amount (1) disbursed Direct BNDES TJLP Direct BNDES / IPCA Social BNDES Total R$496 MM % of disburseme nt 74% Total amount
(1)
Term (years)
Grace period Jul/13 (interest+principal ) Jul/14 (interest+principal ) Jul/13 (interest+principal )
Cost
R$671 MM
14
TJLP + 1.88% p.a.
R$204 MM
100%
R$204 MM
13
IPCA + 4.78% p.a.
R$700 MM
(2)
100% 100%
R$12 MM R$887 MM
14 --
TJLP -
Parnaba II The Company Management states that, between March and May 2012, a shortterm debt (bridge loan) was contracted with HSBC, Ita BBA and CEF. This contracting aims to cover the financial obligations of the venture, in accordance with the shareholders leveraging expectation, until the closing of the long -term debt scheduled for the third quarter of 2013. The following table summarizes the conditions and stage of the debt contracted as of December 31, 2012:
Amount disbursed
(1)
% of disbursement 100% 100% 100% 0%
Total amount R$125 MM R$100 MM R$325 MM R$195 MM R$745 MM
(1)
Maturity Sep. 30, 2013 Sep. 30, 2013 Sep. 30, 2013 -
Cost CDI + 3% p.a. CDI + 3% p.a. CDI + 3% p.a. -
HSBC Ita BBA CEF To contract Total
R$125 MM R$100 MM R$325 MM R$550 MM

(2)
74%
247
(iii)
Material current and expected divestiture
The Company Management states that no capital divestiture has been made for the last three financial years ended December 31, 2012, 2011 and 2010, as well as there is no capital divestiture in progress. (b) Provided that it has already been disclosed, indicate the acquisition of plants, equipment, patents and other assets that may significantly influence the Companys production capacity UTE Parnaba Gerao de Energia S.A. The Company Management states that, in September 2011, after the approval by ANEEL, ENEVA S.A. entered into a Concession Purchase Agreement with Grupo Bertin Energia e Participaes S.A., valid for 15 years, for the acquisition of concessions granted by ANEEL to UTEs MC2 Joo Neiva and MC2 Joinville (subsidiaries of Bertin Energia e Participaes S.A.), to operate as independent energy producers. Additionally, the aforesaid document determines the assignment of Energy Purchase Agreements in the Regulated Market (CCEARs) from the UTEs to ENEVA S.A. It is worth mentioning that UTEs MC2 Joo Neiva and MC2 Joinville were contracted at A-5 auction No. 03/2008- ANEEL, held on September 30, 2008, at which the supply of 225 MW (on average) to distributors was ratified, each distributor being authorized for 35 years.
248
UTE Parnaba Gerao de Energia S.A. The Company Management states that the Operation Closing Instrument (Instrument), of September 2, 2011, provides for two additional assignment payment clauses subject to: (i) the authorization of ANEEL, without encumbrance or restrictions, for an increase in the physical energy guarantee by up to 72.7 MW on average for each venture. If ENEVA S.A. obtains the authorization, the UTEs shall be entitled to the same proportion of the addition to the physical guarantee, limited to the maximum amount of R$83 million, 50% of which for each UTE, as the additional assignment price; and (ii), in the event the authorization is granted by ANEEL, without encumbrance or restrictions, to change factor i and Other Variable Costs (as provided for in Article 3, item II, of MME Ordinance 42, of March 01, 2007) of the Ventures, ENEVA S.A. shall pay each UTE, in the same proportion, the amount of taxes stated and recorded as due in the UTEs financial statements. This amount is limited to R$61.2 million or to the benefit amount obtained by ENEVA S.A. as a result of the change in factor i and Other Variable Costs of the Ventures. Both conditional clauses are valid for 18 months to be counted from September 2, 2011, date of Operation Closing Instrument. ENEVA S.A. entered into with its subsidiary UTE Parnaba Gerao de Energia S.A. (UTE Parnaba) the Agreement for Assignment of Rights and Obligations related to concessions purchased from Grupo Bertin Energia e Participaes S.A. The aforesaid agreement aims to assign to UTE Parnaba all rights and obligations, free of charge, arising from the Concession Purchase Agreement. The aforesaid Assignment of Rights and Obligations entered into by ENEVA S.A. and UTE Parnaba also has to conditional clauses, to wit: (i) the authorization of ANEEL to implement the Ventures (UTEs MC2 Joo Neiva and MC2 Joinville) in the Parnaba Thermal Complex; and (ii) change in the aforesaid factor I and Other Variable Costs. The Company Management states that the Company did not treat this transaction as a business combination, but as an acquisition of assets, as the Company is acquiring intangible assets that are concessions and trade agreements. Parnaba Participaes S.A.
The Company Management states that, in March 2012, Parnaba Participaes S.A. (former UTE Parnaba III Gerao de Energia S.A.) entered into a Purchase Option Agreement for Concessions granted by ANEEL to UTE MC2 Nova Venecia 2 S.A., which belongs to Grupo Bertin Energia e Participaes S.A., which is valid for 35 years. This concession enables UTE Nova Venecia to operate as an independent energy producer.
249
Additionally, the aforesaid document sets forth that performance of a technical, legal and accounting audit of the information provided by UTE Nova Venecia is an essential condition for the payment of the R$20 million premium. This procedure was concluded on May 09, 2012, when the aforesaid payment was made, in the proportion of 70% by Parnaba Participaes and 30% by Petra Energia S.A.
250
Parnaba Participaes S.A. Additionally, the aforesaid document determines the assignment of Energy Purchase Agreements in the Regulated Market (CCEARs) from the UTE to Parnaba Participaes and Petra Energia. It is worth mentioning that UTE MC2 Joo Neiva was contracted at A-5 auction No. 03/2008- ANEEL, held on September 30, 2008, at which the supply of 98 MW (on average) to distributors, authorized for 35 years, was ratified.
(c) (i)
New products and services Description of current research studies already disclosed
The Company seeks to develop all its projects in a sustainable manner, aiming at maximum energy efficiency at low costs and, while preserving the environment. Thus, the Company continually devotes to the acquisition, research and development of clean technologies and environmentally-sustainable projects. In the R&D field, the Company develops several projects, some of them are being negotiated and contracted, and others are being implemented. (ii) Total amount spent by the issuer on research for development of new products and services In each of the financial years ended December 31, 2010, 2011 and 2012, the Company invested R$0.4 million in research and development of new technologies. In the first quarter of 2013, the Company invested R$1.3 million in research and development of new technologies. (iii) Projects in progress already disclosed
An agreement was entered into with COPPE-UFRJ to create a Center for Research in Energy Generation. The primary purposes of the new center will be the conduction of research and technological development in energy generation and qualification and training of people in the sector, and the construction of laboratories to physically support the analyses and studies planned is also expected. COPPE-UFRJ is also a partner of the Company and of the University of Tsingua, in China, for joint studies of control and storage of CO2, among others. (iv) Total amount spent by the issuer on developing new products or services The Company did not incur expenses relating to developing new products or services.
251
252
10.11 Other factors with significant influence
The Company Management states that there are no other factors that significantly influenced the Companys operating performance and that have not been identified or commented in the other items of this section 10.
253
11.1 - Disclosed forecasts and assumptions
In compliance with the provisions of Circular Letter/CVM/SEP/No.01/2013 and in accordance with the material fact published on June 4, 2013, the Company management has opted to discontinue disclosure of financial projections (guidance) under this item, in view of the need to align its guidance disclosure policy with the Companys current operational phase, in accordance with CVM Instruction 400 and CVM Instruction 480. In this sense, we clarify that when the Company started to disclose its capital investment forecasts, it had no commercial developments in operation. However, the Company currently has five commercial developments with installed capacity of 1,780 MW. Accordingly, the disclosure of estimates on capital investments became necessary in view of its real installed capacity and its current operational phase.
254
11.2 Monitoring and changes of forecasts disclosed
(a) Inform those that are being replaced by new forecasts included in this Reference Form and those that are being repeated Not applicable, since, as referred to in item 11.1 hereof, the Company decided to discontinue the disclosure of forecasts on cash disbursements for investment in its developments. (b) As regards the forecasts for last periods, compare the data forecast with the effective performance of the indicators, demonstrating clearly the reasons that led to deviations in the forecasts. Not applicable, since, as referred to in item 11.1 hereof, the Company decided to discontinue the disclosure of forecasts on cash disbursements for investment in its developments.
(c) As regards the forecasts related to periods still in progress, inform whether the forecasts remain valid on the date of delivery of this Reference Form and, when applicable, explain why they were set aside or replaced. Not applicable, since, as referred to in item 11.1 hereof, the Company decided to discontinue the disclosure of forecasts on cash disbursements for investment in its developments.
255
12.1 - Description of administrative structure
ENEVA S.A. is managed by a Board of Directors advised by a non-statutory Audit Committee and by an Executive Board. Our Companys Fiscal Council is a non permanent body, and is not currently instated. (a) Powers of each body and committee
Board of Directors In addition to the powers conferred by the Company By-Laws, the ENEVA Board of Directors has Internal Regulations intended to govern the way it functions and its relationship with the other corporate bodies, subject always to the provisions of the By-Laws and of the legislation in force at any time. Our Company Board of Directors consists of at least 8 (eight) and not more than 10 (ten) regular members, all of whom are elected and can be dismissed by the General Meeting, with a concurrent 2 (two) year term of office. Reelection is permitted. Article 17 of the Company By-Laws sets forth the following responsibilities of the Board of Directors:
(i)
To regulate the activities of the Company, with powers to review and resolve on any matter that is not within the specific competence of the General Meeting or the Executive Board; To fix general guidelines for the Companys businessand resolve on any subject relevant to the Companys strategy, provided that, however, Management is responsible for all decisions related to the Companys daily activities, as set forth in the By-laws; To appoint and remove the members of the Companys Management, including approval of the corresponding remuneration, according to the global remuneration previously approved by the General Meeting; To attribute to the members of Management their respective functions, powers and approval limits, where these are not specified in the By-Laws, and to appoint the Investor Relations Officer, subject to the provisions of the By-Laws; To resolve on the calling of General Meetings, acting jointly or through its Chairman, when judged necessary, or in terms of article 132 of the Corporate Law (Law no 6404/76); To monitor the management of the Company by the Executive Officers, examining the Company books and documents at any time and calling for
(ii)
(iii)
(iv)
(v)
(vi)
256
information on contracts executed or under negotiation, and on any other actions;

(vii) To
choose and to dismiss the independent auditors, providing that the choice is in accordance with the applicable legislation. The independent audit firm shall report to the Board of Directors; To invite the independent auditors to provide any explanations that it may think fit;
(viii)
(ix)
To review the Management Report, the financial statements, and the accounts of the Executive Board and to resolve on their submission to the General Meeting; To approve the annual business plans and the strategic plan, as well as the annual budget, prepared and recommended by Management and any changes in these plans involving the greater of: (i) variation of 25% (twentyfive percent) of the original amount; or (ii) R$250,000,000.00 (two hundred and fifty million reais), provided that Management is responsible for deploying the annual business plan and the annual budget; To resolve on Company capital increases and share issues, within the limits authorized in article 6 of the By-Laws, setting the conditions of issuance, including the price and the period for payment, with the power also to exclude (or reduce the period for) pre-emptive rights in share issues, subscription warrants and convertible debentures, which are offered for sale on a stock exchange or by public subscription, or in the course of a takeover bid, on the terms provided for under the law; resolve on any request of public bid submission of the Companys shares; To resolve on the Companys purchase of its own shares, or on the issue of sale or purchase options over the Companys shares, to b e held in treasury and/or for subsequent cancellation or disposal; To start, change, interrupt, or stop the development, creation, deployment and/or operation of (i) business or activity whose amount is greater than R$200,000,000.00 (two hundred million reais), except if previously approved, in the annual business plan or in the annual budget, and such transaction or activity must occur in one single transaction or in a series of related transactions, or (ii) any power generation, v, risk capital and investment project and venture or activity by the Company or by any of its subsidiaries; approve the rules of internal procedures of the Board of Directors; To enter any joint venture, association, or any other business
(x)
(xi)
(xii) To
(xiii)
(xiv)
(xv) To (xvi)
257
partnership which involves the Company or its ubsidiaries, which is of strategic importance for the Company;
(xvii)
To authorize the execution of amendments related to transactions between Related Parties that exceed the amount of R$80,000,000.00 (eighty million reais); To approve the purchase, sale, transfer, lease, pledge, creation of liens or any other type of provision on the Companys assets or of any of its subsidiaries, or the issuance of guarantees to third parties to secure liabilities of the Company itself, whose amount is greater than R$100,000,000.00 (one hundred million reais), except if previously approved in the annual business plan or annual budget; To approve investments or capital expenditures by the Company or any of its subsidiaries, whose estimated total amount is higher than R$200,000,000.00 (two hundred million reais) in one single operation or in a series of related operations, except if previously approved in the annual business plan or in the annual budget; approve loans, financing, simple, unconvertible debentures and unsecured debentures, or any other debt or commercial paper involving an amount greater than R$100,000,000.00 (one hundred million reais), except if previously approved in the annual business plan or in the annual budget; To authorize the Company to issue guarantees to secure the liabilities of its partially and/or wholly owned subsidiaries, or of any other companies in which the Company has a shareholding, with the issuance of guarantees to secure the liabilities of any other third parties being expressly forbidden; To determine a list of three firms specializing in corporate valuations, to prepare a valuation report on the shares of the Company, in the event of cancellation of registration as a public company and quitting the Novo Mercado; To file for bankruptcy on behalf of the Company, or for its judicial or extrajudicial reorganization; To express an opinion on any public bid for the acquisition of the shares of the Company, giving its duly reasoned views, up to 15 (fifteen) days before the bid document is made public, on the following issues as a minimum: (i) the appropriateness and timeliness of the bid for the acquisition of shares, in terms of the interests of the shareholder body and in regard to the liquidity of the Companys securities; (ii) the re percussions of the bid on the interests of the Company; (iii) the strategic plans for the Company disclosed by the bidder; and (iv) any other issues that the Board
(xviii)
(xix)
(xx) To
(xxi)
(xxii)
(xxiii)
(xxiv)
258
of Directors considers pertinent, in addition to the information required by the applicable rules issued by the CVM.
(xxv)
To approve the execution, termination, amendment, or waiver of a relevant agreement in an aggregate amount of more than R$100,000,000.00 (one hundred million reais), except if previously approved in the annual business plan or in the annual budget; To approve the granting or contracting, by the Company or by its subsidiaries, of any guarantees or bonds related to any liability of the Company or of its subsidiaries or of any other person, which exceeds the amount of R$100,000,000.00 (one hundred million reais), except if previously approved in the annual business plan or in the annual budget; To approve the performance of power trading activities, including participation in bidding processes, the forming of Public Private Partnerships in the regulated and free markets, and the execution of any non-negotiated ancillary contracts; To approve the execution of power purchase contracts for energy reserve involving amounts greater higher than R$200,000,000.00 (two hundred million reais), except if previously approved in the annual business plan or in the annual budget; To implement significant changes or alterations in the accounting standards, policies, and guidelines applicable to the Company; and To submit proposals for the General Meeting referring to the allocation of the Companys earnings and amendments to the By-laws.
(xxvi)
(xxvii)
(xxviii)
(xxix)
(xxx)
Executive Board The Executive Board of the Company shall consist of at least two (2) members, who may or may not be shareholders, resident in Brazil, and elected by the Board of Directors. The following shall be nominated, with a single Officer being authorized to fulfill more than one function: one Chief Executive Officer, and one Executive Vice-President. The position of Investor Relations Officer shall be held by the Chief Executive Officer or by the Executive Vice-President. In accordance with article 23 of the Company By-Laws, the Executive Board has the following powers:
(i) to manage and supervise the routine business and affairs of the Company and all decisions related to the Companys routine activities, according to the annual business plan and the Companys strategic plan, as well as the annual budget, approved by the Directors; (ii)
to prepare the Companys business plan and strategic plan, as well as its budget and recommend it to the Board of Directors;
259
(iii)
To implement the Companys business plan and strategic plan, as well as its budget, according to what has been approved by the Board of Directors; To implement decisions and instructions by the Board of Directors; To legally represent the Company before third parties, including commitment, waiver, settlement, and execution of agreements, assumption of liabilities, investment of funds, and execution of contracts and other documents on behalf of the Company; To approve all measures required and perform all ordinary acts regarding financial and economic management, according to the provisions of the ByLaws and the resolutions approved by the General Meeting and by the Board of Directors at their meetings; prepare and deliver information related to Company matters to the Board of Directors, as requested by the Board of Directors itself; To prepare the issuance, update, and changes to the financial and investment policies;
(iv) (v)
(vi)
(vii) To
(viii)
(ix)
To prepare the Companys financial statements for approval of the Board of Directors and maintain the Companys corporate and financial and tax books and records; and To prepare and recommend to the Board of Directors the Companys business plan and strategic plan, as well as its annual budget, with regards to any fiscal year, in a timely manner, for approval by the Board of Directors during the last quarter of the corresponding fiscal year.
(x)
Fiscal Council The Company By-Laws provide for the functioning of a Fiscal Council on a nonpermanent basis, with powers, when instated, according to the provisions of the applicable regulations, comprising at least 3 and at most 5 regular members, with an equal number of alternates, who may or may not be shareholders, elected and subject to dismissal at any time by the General Meeting. Audit Committee The Audit Committee was created at a meeting of the Board of Directors held on March 25, 2008. Its primary attributes are: (i) to monitor the accounting practices adopted in the preparation of the financial statements of the Company and its subsidiaries; (ii) to recommend independent auditors and assess their effectiveness; (iii) to approve the planning, supervision and assessment of the work of internal audit; and (iv) to evaluate the efficiency of risk management and internal controls.
260
(b) Date of instatement of fiscal council, if not permanent, and of creation of committees The Companys Fiscal Council was instated in August 2011, and its term of office ended on April 30, 2012, when an Annual and Extraordinary Meeting of the Company was held. As of the date of publication of this Reference Form, the Company has no Fiscal Council installed. The creation of the Company Audit Committee was approved by the Board of Directors at a meeting held on March 25, 2008. (c) Mechanisms for assessing performance of each body or committee
Since 2011, members of the Company Board of Directors have taken part in an assessment process that includes issues relating to their own performance and of the board as a whole. The principal benefits of this process, in addition to assessing the board itself and the individual performance of its members, are that it encourages members to contribute to the optimization of the Boards performance, and improves its interaction with its advisory committees and with the Executive Board. Although there is no formal mechanism for assessing the Executive Board, its performance is evaluated by the Board of Directors by means of constant interaction, both on the basis of meetings that are held jointly, and according to the quality of the information prepared by the Executive Board and provided as support material for the resolutions of the Board of Directors. In the same way, the Audit Committee is assessed by the Board of Directors when it reports on its activities, with the Committee meeting minutes being regularly made available to members of the Board of Directors for their information and for them to monitor discussions. (d) Duties and individual powers of members of the Executive Board
As of the date of this Reference Form, the Company Executive Board is made up of a Chief Executive Officer, and an Executive Vice-President. A single Officer is authorized to fulfill more than one function, and the duties are defined in article 23 of the By-Laws. The Chief Executive Officer and the Executive Vice-President are responsible for managing activities related to overall Company planning, in addition to the functions, attributes and powers bestowed by the Board of Directors, and subject to the policies and guidelines previously set forth by the Board of Directors: (i) to call and chair meetings of the Executive Board; (ii) to supervise the management activities of the Company, coordinating and monitoring the actions of members of the Executive Board; (iii) to propose to the Board of Directors the functions to be undertaken by each Officer upon the latters appointment, without having
261
exclusive responsibility for the decision; (iv) to be the active and passive representative of the company, in judicial matters and otherwise, subject to the provisions of article 24 of the By-Laws; (v) to coordinate the Companys personnel, organizational, management, operational and marketing policies; (vi) to prepare and present to the Board of Directors, each year, the Companys annual business plan and annual budget; and (vii) to manage matters of a corporate nature in general. The Investor Relations Officer is responsible, in addition to the functions, attributes and powers bestowed by the Board of Directors, and subject to the policies and guidelines previously set forth by the Board of Directors, for: (i) representing the company with the controlling authorities and other institutions operating in the capital market; (ii) supplying information to the investing public, the CVM, the Stock Exchange where the Companys securities are traded and the other bodies involved in capital market operations, in accordance with the applicable legislation, both in Brazil and overseas; and (iii) keeping the Company register at the CVM up to date.
(e) Mechanisms for assessing the performance of members of the board of directors, the committees and the executive board Members of the Company Board of Directors take part in an assessment process both of their individual performance and of the performance of the Board as a whole, as described in item 12.1(c) of this Reference Form. Although there is no formal mechanism for assessing the performance of the Executive Board or the Audit Committee, these bodies are assessed by the Board of Directors as described in item 12.1(c) of this Reference Form.
262
12.2 Rules, policies and practices for general meetings
(a)
Advance Notice of Meetings
The Companys practice for giving advance notice of general meetings of shareholders coincides with the provisions of the applicable legislation. The Corporate Law requires that all general meetings be called by means of three announcements in the Federal Official Gazette or that of the State where the Company is based, and in one other widely circulated newspaper. The Company announcements are currently carried in the Official Gazette of the State of Rio de Janeiro and in the Dirio Mercantil newspaper. The first call has to be made at least 15 days before the date of the general meeting, and the second call eight days in advance, and the meeting must be held as set forth in the Corporate Law. A general meeting to resolve on the cancellation of the Companys registration as a public company, or to consider complex transactions requiring more time for shareholders to understand and analyze them, shall be called at least 30 days in advance. In specific circumstances, however, at the request of any shareholder and after consulting the Company, the CVM may postpone the date of a general meeting to 30 days after it has been called. (b) Competencies
In addition to the other competencies provided by the Brazilian Corporation Law, the Regulations of the Novo Mercado of BM&FBOVESPA and the Companys Bylaws, in particular Article 27 of the Companys Bylaws, provide that it will be incumbent on the General Meeting to:
(i) take managements accounts, examine, discuss and vote on the financial statements; (ii) (iii)
elect and remove the members of the Board of Directors; fix the total annual compensation of the members of the Board of Directors and the Executive Board as well as members of the Fiscal Council, if installed; amend the Bylaws and the Companys corporate purpose; decide on the merger, consolidation merger of shares and spin-off involving the Company; approve stock option plans for its managers, employees and individuals providing services to the Company, as well as officers and employees of other companies that are directly or indirectly controlled by the Company, as well as approve any changes related to such plans; resolve, in accordance with managements proposal, on allocation of net income and dividend distribution;
(iv)
(v)
(vi)
263
(vii) resolve
on capital increase which exceeds the authorized capital of the Company; elect the liquidator, as well as the Fiscal Council that will operate during the liquidation period;
(viii)
(ix) (x)
decide on the cancellation of the registration of the company with the CVM; decide on delisting from Novo Mercado, which, if adopted, should be communicated to BM&FBOVESPA in writing 30 (thirty) days in advance; and decide on shares which will be listed or delisted from the stock exchange; the specialized company responsible for developing an appraisal report in the case of Articles 37 and 40 of the Bylaws, among the companies indicated in a triple list prepared by the Board of Directors. approve reduction of capital with distribution of funds and assets to the Companys shareholders; approve the Companys interest in a group of companies; approve amortization and redemption of Companys shares; and change the Companys dividend policy.
(xi)
(xii) choose
(xiii)
(xiv) (xv) (xvi)
(c) Addresses (physical or electronic) in which documents relating to the general meeting will be available for shareholders analysis All documents relating to the General Meeting, both related to the participation of shareholders and support for the resolutions, are available at the following addresses: (i) Companys head office: City of Rio de Janeiro, State of Rio de Janeiro, Praia do Flamengo, no 66, 9th floor, Flamengo, and (ii) electronic addresses: Company website (www.eneva.com.br/ri); CVM website (www.cvm.gov.br) and BM&FBOVESPA website (www.bmfbovespa.com.br). (d) Identification and management of conflicts of interest
As a general rule, the Company uses the provisions of Article 115 of the Brazilian Corporation Law to address issues relating to conflicts of interest at the General Meetings. In addition, the Company provides, in the Internal Regulations of the Board of Directors, guidelines on how to address situations involving conflicts of interest. For more information about the guidelines in the Internal Regulations of the Board of Directors, see section 12.4. (c) of this Reference Form. (e) Request for proxies by the management to exercise the right to vote
The Company reports in the call notices of General Meetings the procedures to be followed in order to exercise the right to vote, as detailed in item f below.
264
(f) Formalities necessary for acceptance of proxy instruments granted by shareholders, indicating whether the issuer accepts proxies granted by shareholders through electronic means To participate in the General Meeting, Shareholders must appear in person or by proxy, who should be a shareholder, Company manager, lawyer, financial institution or investment fund manager who represents the members, at the time and place of the Meeting, in accordance with respective Call Notice. In the case of attendance by proxy, the proxy must: (i) have the signature of the principal duly notarized; (ii) be issued less than one year from the date of the Meeting, as required by law (Article 126, paragraph 1 of Law 6.404/76); (iii) be notarized by a notary public duly authorized for this purpose, certified by the Brazilian consulate and translated into Brazilian Portuguese by a sworn translator, in case it has been granted outside Brazil; (iv) the Proxy must also submit their ID. It should be noted that the Company does not accept proxies issued by electronic means. All the above information is provided by the Company in the Call Notice of the General Meeting and also in the Guide to Participating in Shareholders Meeting at the addresses (physical and electronic) mentioned in item 12.2 c of this Reference Form. The Guide to Participating in Shareholders Meeting is intended to encourage the participation of shareholders in meetings, providing clear and practical information as described below: 1. When and where the Meeting is to take place 2. Who can take part 3. How to take part in the Meeting 4. The Shareholders does not have to appear at the General Meeting in person 5. How to be represented by a proxy 6. How to obtain additional information (g) Keeping of forums and pages on the World Wide Web to receive and share feedback from shareholders on the agendas of meetings Although there is no specific channel for receiving feedback from shareholders on the agendas of meetings, the Companys Investor Relations website makes available the email of both the Investor Relations and Corporate Governance areas of the Company, it being certain that both areas, should they receive any manifestation in this regard, may adopt reasonable procedures for analysis. (h) Live broadcast of video and/or audio of meetings
265
There is currently no live broadcast of video and/or audio of shareholders meetings. (i) Mechanisms to allow inclusion in the agenda of proposals made by shareholders Although there are no mechanisms to allow inclusion in the agenda of proposals made by shareholders, the Companys Investor Relations and Corporate Governance areas may, should they receive some shareholder manifestation in this regard, refer the matter for consideration of the Board of Directors.
266
12.3 - Dates and newspapers for publication of information required by Law 6.404/76
Fiscal Year 12/31/2012 Publications Financial Statements Newspapers - UF Official Gazette of the State of Rio de Janeiro - RJ Valor Econmico Newspaper - RJ Valor Econmico Newspaper - SP Official Gazette of the State of Rio de Janeiro - RJ Convening the GM that examined the Financial Statements Official Gazette of the State of Rio de Janeiro - RJ Dates 02/20/2013 02/20/2013 02/20/2013 02/20/2013 03/28/2013 04/01/2013 04/02/2013 Dirio Mercantil Newspaper of the State of Rio de Janeiro - RJ Minutes of the GM that examined the Financial Statements 12/31/2011 Financial Statements Convening the GM that examined the Financial Statements Official Gazette of the State of Rio de Janeiro - RJ Valor Econmico Newspaper - Nacional - RJ Official Gazette of the State of Rio de Janeiro - RJ Dirio Mercantil Newspaper of the State of Rio de Janeiro - RJ Official Gazette of the State of Rio de Janeiro - RJ 03/28/2013 04/01/2013 04/02/2013 06/11/2013 06/11/2013 03/22/2012 03/22/2012 03/30/2012 04/02/2012 04/03/2012 Valor Econmico Newspaper - Nacional - RJ 03/30/2012 04/02/2012 04/03/2012 Minutes of the AGM that examined the Financial Statements 12/31/2010 Financial Statements Notice to Shareholders Communicating Disclosure of Financial Statements Official Gazette of the State of Rio de Janeiro - RJ Valor Econmico Newspaper - Nacional - RJ Official State Gazette - BR Valor Econmico Newspaper - RJ Official State Gazette - RJ 05/31/2012 05/31/2012 03/25/2011 03/25/2011 03/30/2011 03/31/2011 04/01/2011
267
Valor Econmico Newspaper - BR
03/30/2011 03/31/2011 04/01/2011
Convening the GM that examined the Financial Statements
Official State Gazette - RJ
04/11/2011 04/12/2011 04/13/2011
Valor Econmico Newspaper - BR Valor Econmico Newspaper - RJ Minutes of the AGM that examined the Financial Statements Official Sate Gazette - RJ Valor Econmico Newspaper - BR
04/11/2011 04/12/2011 04/13/2011 05/30/2011 05/30/2011
268
12.4 - Rules, policies and practices relating to the Board of Directors
The Companys Bylaws provides that the Board of Directors will be composed of at least eight and no more than ten members, whether Companys shareholders or not, elected and removed by the General Meeting, with a unified term of office of two years, with the possibility of reelection. (a) Frequency of meetings
In accordance with Article 14 of the Bylaws of the Company, the Board of Directors will meet, at least 06 (six) times a year, upon written notice delivered personally, by electronic mail, via fax or courier, by initiative of the Chairman and/or Vice-Chairman or upon written request of any member of the Board of Directors, at least 03 (three) business days before the meeting and definition of date, place, time and agenda of topics to be addressed. Should the Chairman not take the required measures to call the meeting requested by a member of the Board of Directors within 05 (five) business days starting from the date of receipt of said request, any member might call the meeting requested. No resolution may be approved if the topic is not expressly included in the meetings agenda. In urgent cases, the meetings of the Board may be called by the Chairman and/or Vice-Chairman, without observing the term above, provided that all other Board members are clearly aware of it. Calls may be personally, by electronic mail, via fax or courier, with acknowledgment of receipt, fax or any other means, electronic or otherwise, that allows proof of receipt. Regardless of the formalities provided for in the Bylaws, a meeting attended by all Directors will be deemed to be regular. The presence of the member of the Board at the meeting constitutes his full agreement with the meetings call, except if the presence of the member of the Board of Directors has the express purpose of opposing any resolution of any business at the beginning of such meeting, due to the fact that the meeting was not duly called or set. (b) If any, the provisions of the shareholders agreement establishing restrictions or conditions on the exercise of voting rights of members of the board The Company has, as of this date, a shareholders agreement in force which, nevertheless, does not provide for restriction to the exercise of right to vote by members of the Board of Directors. (c) Rules for identification and management of conflicts of interest
As a general rule, the Company uses the provisions of Article 115 of the Brazilian Corporation Law to address issues relating to conflicts of interest at the General Meetings. In addition, the Company provides, in the Internal Regulations of the Board of Directors and Audit Committee, guidelines on how to address situations
269
involving conflicts of interest. According to the Internal Regulations of the Board of Directors of the Company, said Board should prevent and manage conflicts of interests or differences of opinion, so that the Companys interests always prevail. The Directors must also:
(i)
ensure that transactions between related parties are conducted based on market conditions in terms of deadlines, fees and guarantees, and are disclosed as required by the CVM; declare, prior to resolution, that, for whatever reason, they have a particular or conflicting interest with the Company regarding the particular matter referred to it, abstaining from discussion and voting; and abstain from deciding matters involving conflict of interest.
(ii)
(iii)
270
12.5. Description of arbitration clause for resolution of conflicts
Under Article 44 of the Bylaws of the Company and the Listing Regulations of the Novo Mercado, the Company, its shareholders, directors and members of the Fiscal Council, when installed, undertake to settle by arbitration before the Market Arbitration Chamber, any dispute or controversy between them, particularly related to or arising from the enforcement, validity, effectiveness, construction, violation and related effects, of the provisions of the Brazilian Corporation Law, the Companys Bylaws, the rules issued by the National Monetary Council, the Central Bank of Brazil and the CVM, as well as other rules applicable to the operation of the capital markets in general, in addition to those included in the Listing Regulations of the Novo Mercado, the Arbitration Regulations of the Market Arbitration Chamber, the Sanctions Regulations and the Agreement for Participation in the Novo Mercado.
271
12.6 / 8 - Composition and professional experience of management and fiscal council

Name INDIVIDUAL TAXPAYER CARD (CPF) NO. Other positions and functions held at the issuer Eduardo Karrer 794.312.677-72 Chief Investor Relations Officer Member of the Audit Committee Member of the Human Resources Committee Member of the Finance, Investment and Control Committee Fabio Hironaka Bicudo 820.110.876-00 Chief Investor Relations Officer Frank Possmeier 062.408.577-50 Eliezer Batista da Silva 607.460.507-63 Ricardo Luiz de Souza Ramos 804.112.237-04 Stein Dale Member of the Finance, Investment and Control Committee Passport No. 28605707 Jrgen Kildahl Passport No. 25045060 Member of the Human Resources Committee Keith Plowman Passport No. 801463073 Membro do Comit de Auditoria Age Profession Management body Elective office held Election Date Date of investiture Term of office Elected by Controlling Shareholder 2 years Yes
52 Engineer
Participates only in the Executive Board Chief Executive Officer
06/13/2013 06/13/2013
39 Administrator 55 Administrator 88 Engineer 47 Mechanical Engineer 49 Administrator
Participates only in the Executive Board Chief Executive Officer Participates only in the Executive Board Executive Vice President Participates only in the Board of Directors Deputy Chairman of the Board Participates only in the Board of Directors (Permanent) Member of the Board Participates only in the Board of Directors (Permanent) Member of the Board
01/27/2014 02/17/2014 01/27/2014 01/27/2014 06/12/2013 06/12/2013 06/12/2013 06/12/2013 06/12/2013 06/12/2013
General Meeting 2016 Yes General Meeting 2016 Yes General Meeting 2015 Yes General Meeting 2015 Yes General Meeting 2015 Yes
50 Economist
Participates only in the Board of Directors President of the Boar of Directors
06/12/2013 06/12/2013
General Meeting 2015 Yes
55 Economist
Participates only in the Board of Directors (Permanent) Member of the Board
06/12/2013 06/12/2013
General Meeting 2015 Yes
272
Name INDIVIDUAL TAXPAYER CARD (CPF) NO. Other positions and functions held at the issuer Luiz do Amaral de Frana Pereira 014.707.017-15 Adriano Cavalhdo Castello Branco Gonalves 085.158.937-54 Luiz Fernando Vendramini Fleury 036.577.328-02 Ronnie Vaz Moreira 512.405.487-53
Age Profession
Management body Elective office held
Election Date Date of investiture
Term of office Elected by Controlling Shareholder General Meeting 2015 Yes General Meeting 2015 Yes General Meeting 2015 No General Meeting 2015 No
76 Civil Engineer 38 Lawyer 57 Administrator 57 Economista
Participates only in the Board of Directors (Permanent) Member of the Board Participates only in the Board of Directors (Permanent) Member of the Board Participates only in the Board of Directors Independent Member of the Board Participates only in the Board of Directors Independent Member of the Board
08/12/2013 08/12/2013 11/11/2013 11/11/2013 12/12/2013 12/12/2013 10/01/2014 10/01/2014
Professional background / Declaration of convictions Eduardo Karrer - 794.312.677-72 a. Eduardo Karrer holds a Bachelors degree in Civil Engineering from the UERJ, an MBA in Public Administration from PUC-RJ, attended Leadership Development programs at Rice University and General Management at SMU-Cox. He currently holds the position of CEO of ENEVA S.A. (since 2007). He served as Supervising Officer at Companhia Rio Polmeros S.A. (2007), as Chief Executive Officer (2002/2007) and Vice President of Operations and New Ventures to South America (2001-2002) at El Paso Brasil Ltda. (core activity: power generation); he also served as General Manager of International Marketing at Petrobras S.A. (core activity: oil and gas) (2000). At Petrobras Distribuidora S.A. he held the positions of Executive Manager for International Markets (1999), Executive Manager for Aviation Products (1998) and Executive Manager of the Gas and Energy Division (1997). In addition, he served as General Manager - Marlim Field Development (1996) and Project Manager Barracuda and Albacora Fields Projects (1992-1995) at Petrobras S.A. He was Project Manager at Petrobras America Inc. (1990-1991), engineer in the Production Engineering Division at Petrobras S.A. (1986-1989) and project manager at Construtora Rabello (1984-1985). b. Eduardo Karrer declares for all purposes of the law that over the last 5 years he has not been subject to any criminal conviction, or to punishment or enforcement of penalties as a result of administrative proceedings filed with the CVM, or to final judgment in the judicial or administrative spheres, that might have resulted in his suspension or disqualification from engaging in any professional or commercial activities.
273
Name INDIVIDUAL TAXPAYER CARD (CPF) NO. Other positions and functions held at the issuer Fabio Hironaka Bicudo - 820.110.876-00
Age Profession
Term of office Elected by Controlling Shareholder
a. Mr. Bicudo has 16 years of experience in investment banking in different sectors with local and global clients, having worked at Goldman Sachs and at Citibank. Prior to join ENEVA's executive committee, was the co-Head of Brazil Investment Banking and a member of the Brazil Management Committee at Goldman Sachs. Holds an MBA in Finance from Columbia Business School and also studied at HEC in Paris and at Fundao Getlio Vargas FGV, in So Paulo. b. Fabio Bicudo declares for all purposes of the law that over the last 5 years he has not been subject to any criminal conviction, or to punishment or enforcement of penalties as a result of administrative proceedings filed with the CVM, or to final judgment in the judicial or administrative spheres, that might have resulted in his suspension or disqualification from engaging in any professional or commercial activities. Frank Possmeier 062.408.577-50 a. Frank Possmeier is an executive with more than 10 years of solid background in M&A and finance. Member of E.ON International Energy Board of Management as Chief Financial Officer and also as Deputy CEO. As part of the E.ON group, served as Senior VP and Global Head of M&A. Holds a Masters Degree and a PhD in business and economics. b. Frank Possmeier declares for all purposes of the law that over the last 5 years he has not been subject to any criminal conviction, or to punishment or enforcement of penalties as a result of administrative proceedings filed with the CVM, or to final judgment in the judicial or administrative spheres, that might have resulted in his suspension or disqualification from engaging in any professional or commercial activities. Eliezer Batista da Silva - 607.460.507-63 a. Eliezer Batista da Silva holds a Bachelors degree in Civil Engineering from the University of Paran, with postgraduate studies and training in United States and Europe. He is currently Honorary Chairman of the Board of Directors of MMX Minerao e Metlicos S.A. (since 2005), Prumo Logstica S.A. (since 2007), and Deputy Chairman of the Board of Directors of Oleo e Gs Participaes S.A. (since 2007), OSX Brasil S.A. (since 2009), ENEVA S.A. (since 2007), CCX Carvo da Colmbia S.A. (since 2012), all companies of the EBX Group. In addition, he is currently Member of the Board of Directors of the Monteiro Aranha Group, BUNGE Group, NEXANS Brasil S/A, the Board of Trustees of the Brazilian Center for International Relations (CEBRI/Rio), Member of the Academy of Sciences of Russia, Member of the World Business Council for Sustainable Development, Member of the Board of Directors of IBIO Atlantic Bio Institute, Member of the Board of Directors of Lorinvest-Gesto de Recursos Ltda and Honorary President of the Notable Group-Brazil-Japan. b. Eliezer Batista da Silva declares for all purposes of the law that over the last 5 years he has not been subject to any criminal conviction, or to punishment or enforcement of penalties as a result of administrative proceedings filed with the CVM, or to final judgment in the judicial or administrative spheres, that might have resulted in his suspension or disqualification from engaging in any professional or commercial activities. Luiz do Amaral de Frana Pereira - 014.707.017-15 a. Luiz do Amaral de Frana Pereira is graduated with a degree in Civil Engineering from Universidade Federal do Paran, attended the Executive Program at Stanford University and completed several courses in Business Administration and Corporate Finance. Currently, he is independent member of the Board of Directors of Prumo Logstica S.A. (since 2007), MMX Minerao e Metlicos S.A. (since 2007) and CCX Carvo da Colmbia S.A. (since 2012), acting also as member of the Audit Committee of these Companies. In addition, he acted as member of the Fiscal Board of Instituto Desiderata and member of the Board of Directors of Brasil Florestas S.A. He worked as Finance and Investor Relations Vice-President at Caemi Minerao e Metalurgia S.A.
274
Name INDIVIDUAL TAXPAYER CARD (CPF) NO.
Age Profession
Other positions and functions held at the issuer and later on acted as member of the Board of Directors at this company. He was Administrative-Financial Executive Officer and Executive Officer at Siderrgica Hime S.A. and also at other Companies part of the Group Bozano Simonsen. Mr. Frana Pereira was Vice -President Executive Officer at Monteiro Aranha S.A. and member of the Board of Directors at Klabin Papel e Celulose S.A. and at other companies controlled by both. He also worked for nearly 20 years at Companhia Vale do Rio Doce, first acting at various technical and executive positions and later as Chief Financial and Investor Relations Officer, Vice Chief Executive Officer, Vice-Chairman at the Board of Directors and as member of the Board of Directors of its subsidiaries and affiliates. Mr. Frana Pereira also acted as Companies Advisor and as teacher at the Engineering School at Federal Universities (Paran e Esprito Santo) and at Instituto de Administrao e Gerncia located at PUC, Rio de Janeiro. b. Luiz do Amaral de Frana Pereira declares for all purposes of the law that over the last 5 years he has not been subject to any criminal conviction, or to punishment or enforcement of penalties as a result of administrative proceedings filed with the CVM, or to final judgment in the judicial or administrative spheres, that might have resulted in his suspension or disqualification from engaging in any professional or commercial activities. Adriano Castello Branco 085.158.937-54 a. Adriano Castello Branco is graduated with a degree in law from Pontifcia Universidade Catlica do Rio de Janeiro (PUC-RJ), a Masters Degree in Business Law from Brazilian Capital Markets Institute (IBMEC) and attended the Mergers & Acquisition course at New York University (NYU). Currently, he is a member of the Board of Officers of the Brazilian Institute of Business Law IBRADEMP. Mr. Castello Branco was a lawyer at Veirano Advogados from 2001 to 2007 and at Davis Polk & Wardwell (NY) from 2007 to 2008. He acted as Executive Manager of Corporate Finance at EBX Holding Ltda. from 2009 to 2013. He is currently Director of Mergers and Acquisitions at EBX Holding Ltda. b. Adriano Castello Branco declares for all purposes of the law that over the last 5 years he has not been subject to any criminal conviction, or to punishment or enforcement of penalties as a result of administrative proceedings filed with the CVM, or to final judgment in the judicial or administrative spheres, that might have resulted in his suspension or disqualification from engaging in any professional or commercial activities. Ricardo Luiz de Souza Ramos - 804.112.237-04 a. Ricardo Luiz de Souza Ramos holds a Bachelors degree in Mechanical Engineering from Gama Filho University and a Masters degree in Business Administration from COPPEAD. He is currently a member of the Board of Directors of MPX Energia S.A. (since 2012). In addition, he currently holds the position of Credit Area Superintendent at the BNDES, as well as Superintendent for Social Infrastructure. He served as Priorities Departmental Head at BNDES (2006-2008), Aircraft Exports Finance Manager (2005-2006), Executive Manager of the Information Technology Investment Department (2003-2004), Export Manager - Aircraft and Engineering Services Export Finance Transactions (2001-2003), Investment Analysis in the metallurgy, commerce and services sectors (1997-2000) and industrial area engineer (1993-1997). b. Ricardo Luiz de Souza Ramos declares for all purposes of the law that over the last 5 years he has not been subject to any criminal conviction, or to punishment or enforcement of penalties as a result of administrative proceedings filed with the CVM, or to final judgment in the judicial or administrative spheres, that might have resulted in his suspension or disqualification from engaging in any professional or commercial activities. Stein Dale - 000.000.000-00 a. Stein Dale is a graduate of the Defense Language Institute-Norwegian Armed Forces, with a Masters degree in Business from the Norwegian Business School, and specialization from IMD in Lausanne, Switzerland and Harvard Business School, USA. He is currently CEO of E.On International Energy (since 2012). He was CEO of Multiconsult AS (2011-2012), CFO of Statkraft (2002-
275
Name INDIVIDUAL TAXPAYER CARD (CPF) NO.
Age Profession
Other positions and functions held at the issuer 2011), Vice President of Enitel ASA (2000-2001), Vice President of Telia Norge AS (1994-2000). He also served as member of the Board of Directors of Multiconsult AS (2011-2012), SN Power (2005-2010), Statkrafet Treasury Centre Belgium (2008-2011), BKK (2007-2010), E.On Sweden (2005-2009) and Fjordkraft (2004-2006). b. Stein Dale declares for all purposes of the law that over the last 5 years he has not been subject to any criminal conviction, or to punishment or enforcement of penalties as a result of administrative proceedings filed with the CVM, or to final judgment in the judicial or administrative spheres, that might have resulted in his suspension or disqualification from engaging in any professional or commercial activities. Jrgen Kildahl - 000.000.000-00 a. Jrgen Kildahl is graduated by the Norwegian School of Economics and Business Administration, with masters degree in Science in Economics and Business Administration and Finance (MBA). Currently, he is a member of the Board of Officers of E.ON AG, based on Dsseldorf, Germany (since 2010). He was a Vice President Officer of Statkraft Markets SF and Vice President Officer of Statkraft AS, in the fields of Market and Commercial Transaction in Europe and Power and Market Generation in Europe. He has also served as an Associate Consultant of Public Relations of Geelmuyden.KieseGroup, based in Oslo, Norway. b. Jrgen Kildahl declares for all purposes of the law that over the last 5 years he has not been subject to any criminal conviction, or to punishment or enforcement of penalties as a result of administrative proceedings filed with the CVM, or to final judgment in the judicial or administrative spheres, that might have resulted in his suspension or disqualification from engaging in any professional or commercial activities.
Keith Plowman - 000.000.000-00 a. Keith Plowman is graduated by UWIST in engineer, with MBA by the Aston University. Currently he is the COO of E.ON International Energy (since September/2011). He was a member of the board of officers of E.ON Kraftwerke GmbH, Officer of Development and Construction and Officer of Power Generation of E.ON UK Ltd. b. Keith Plowman declares for all purposes of the law that over the last 5 years he has not been subject to any criminal conviction, or to punishment or enforcement of penalties as a result of administrative proceedings filed with the CVM, or to final judgment in the judicial or administrative spheres, that might have resulted in his suspension or disqualification from engaging in any professional or commercial activities. Luiz Fernando Vendramini Fleury 036.577.328-02 a. Luiz Fernando Vendramini Fleury is graduated with a degree in Business Administration from Getulio Vargas Foundation (FGV), Post Graduated in Financial Management (CEAG - FGV) and Diploma in Financial Management from New York University (NYU). He served as Executive Managing Director at Salomon Brother/Citibank (1998-1999) and as a President & CEO at Redecard S.A. (2000-20003), Banco Ibi S.A. (2004-2009) and Cetip S.A. (July 2009 May 2013). He was a member of the Board of Directors of Credicard S.A. (1992-1994), Redecard S.A. (2000-2003) and Banco Ibi (2004-2009). b. Luiz Fernando Vendramini Fleury declares for all purposes of the law that over the last 5 years he has not been subject to any criminal conviction, or to punishment or enforcement of penalties as a result of administrative proceedings filed with the CVM, or to final judgment in the judicial or administrative spheres, that might have resulted in his suspension or disqualification from engaging in any professional or commercial activities.
276
Ronnie Vaz Moreira - 512.405.487-53 a. Ronnie Vaz Moreira graduado em Economia pela Universidade Federal do Rio de Janeiro (UFRJ), mestre em International Management pela American School of International Management Thunderbird. Atuou como Gerente de Project Finance no Banco Montreal em Toronto (1981-1993), Vice-Presidente Senior do Banco ABN AMRO no Project Finance Group da Amrica Latina (1995-1999), CFO da Petrobras (1999-2001), Diretor Executivo do Deutsche Bank (2001-2002), CEO da Globopar (2002-2005), Vice-Presidente Executivo da Light (2005-2010), CEO da CP+ (2011-2012), e atualmente CEO da Bowood Consultoria e Assessoria Ltda (desde janeiro de 2013). b. Ronnie Vaz Moreira declara, para todos os fins de direito, que nos ltimos 5 anos no esteve sujeito aos efeitos de nenhuma condenao criminal, nenhuma condenao ou aplicao de pena em processo administrativo perante a CVM e nenhuma condenao transitada em julgado, na esfera judicial ou administrativa, que tivesse por efeito a suspenso ou inabilitao para prtica de qualquer atividade profissional ou commercial.
277
12.7 - Composition of the statutory committees and the audit, finance and compensation committees
Name INDIVIDUAL TAXPAYER CARD (CPF) NO. Committee type Description of other committees Position held description of other positions held Profession Age Date elected Date of investiture Term of office
Other positions/ functions held at the issuer Keith Plowman Passport No. 801463073 Member of the Board of Directors (Permanent). Audit Committee
Professional background/Declaration of convictions President of the Committee Engineer 55 June 13, 2013 June 13, 2013 1 year
a. Keith Plowman is an Engineering graduate from UWIST (1980) and holds an MBA from Aston University. He is currently a Chief Operating Officer of E. ON International Energy (core activity: power generation) (since September 2011). He was previously a Director of Steam Germany and of Fleet Management Steam (core activity: power generation) (2010-2011). He was a member of the Board of Directors of E. ON Kraftwerke GmbH (core activity: power generation), Development & Construction Director and Energy Generation Director of Eon UK Ltd (core activity: power generation) (2004-2007), and also held the following positions in CHP Ltd. (core activity: power generation): Engineering Superintendent 1991-1997, Sales Superintendent (1998-2002) and Superintendent General (2002-2004). b. Keith Plowman declares for all purposes of the law that over the last 5 years he has not been subject to any criminal conviction, or to punishment or enforcement of penalties as a result of administrative proceedings filed with the CVM, or to final judgment in the judicial or administrative spheres, that might have resulted in his suspension or disqualification from engaging in any professional or commercial activities.
Eduardo Karrer 794.312.677-72 CEO / Investor Relations Director Member of the Human Resources Committee
Audit Committee
Member of the Committee (Permanent)
Engineer 52
June 13, 2013 June 13, 2013
1 year
Member of the Financial, Investment and Control Committee
a. Eduardo Karrer is a Civil Engineering graduate from the UERJ, holds an MBA in Public Administration from PUC-RJ and attended Leadership Development programs at Rice University and General Management at SMU-Cox. He currently holds the position of CEO of ENEVA S.A. (since 2007). He held the position of Supervising Officer at Companhia Rio Polmeros S.A. (2007), Chief Executive Officer (2002/2007) and Vice President of Operations and New Ventures for South America (2001-2002) at El Paso Brasil Ltda. (core activity: power generation). He also held the position of General Manager of International Marketing at Petrobras S.A. (core activity: oil and gas) (2000). At Petrobras Distribuidora S.A., he held the position of Executive Manager for International Markets (1999), Executive Manager for Aviation Products (1998) and Executive Manager of the Gas and Energy Division (1997). He also held the position of General Manager - Marlim Field Development (1996) and Project Manager Barracuda and Albacora Fields Projects (1992-1995) at Petrobras S.A. He was a Project Manager at Petrobras America Inc. (1990-1991), engineer of the Production Engineering Division at Petrobras S.A. (1986-1989) and project manager at Construtora Rabello (1984-1985). b. Eduardo Karrer declares for all purposes of the law that over the last 5 years he has not been subject to any criminal conviction, or to punishment or enforcement of penalties as a result of administrative proceedings filed with the CVM, or to final judgment in the judicial or administrative spheres, that might have resulted in his suspension or disqualification from engaging in any professional or commercial activities.
278
Frank Possmeier Passport No. 801463073 (SIC)
Audit Committee
Administrator (Designated) 55
June 13, 2013 June 13, 2013
1 year
Member of the Audit Committee Member of the Financial, Investment and Control Committee
a. Frank Possmeier is a Business Administration and Economics graduate and holds a PhD in Administration and Economics. Frank was a member of the Board of Directors of E.ON International Energy (core activity: energy generation) (November 2010) and previously held the position of Senior Vice President and Global Consolidation and Acquisition Officer of E.ON Group (core activity: energy generation) (3 years), in which he was responsible for the groups acquisition and divestiture. b. Frank Possmeier declares for all purposes of the law that over the last 5 years he has not been subject to any criminal conviction, or to punishment or enforcement of penalties as a result of administrative proceedings filed with the CVM, or to final judgment in the judicial or administrative spheres, that might have resulted in his suspension or disqualification from engaging in any professional or commercial activities.
Jrgen Kildahl Passport No. 25045060
Human Resources Committee
Economist 50
June 13, 2013 June 13, 2013
1 year
President of the Boar of Directors
a. Jrgen Kildahl is a graduate from the Norwegian School of Economics and Business Administration, holds a Master of Science in Economics and Business Administration (MSc) and an MBA in Finance from the same school. He also specialized in Harvard Business Schools Advance Management Program (AMP), USA. He is currently a member of the Board of Directors of E.ON AG, in Dsseldorf, Germany (Core activity: electricity generation) (since 2010). He was a manager at International Fund Management Ltd. (core activity: investment in assets) (1988-1991) and Public Relations Consulting Partner of the Geelmuyden.Kiese Group, Oslo, Norway (Core activity: consultancy). He was also Deputy CEO of Statkraft Markets SF (Core activity: electricity generation) (19992001) and Statkraft AS (Core activity: electricity generation), in the areas of Market and Commercial Operations in Europe and Energy Generation and Market in Europe (2001-2010). He also acted as a b. Jrgen Kildahl declares for all purposes of the law that over the last 5 years he has not been subject to any criminal conviction, or to punishment or enforcement of penalties as a result of administrative proceedings filed with the CVM, or to final judgment in the judicial or administrative spheres, that might have resulted in his suspension or disqualification from engaging in any professional or commercial activities.
Eduardo Karrer 794.312.677-72 CEO / Investor Relations Director Member of the Human Resources Committee
Human Resources Committee
Engineer 52
June 13, 2013 June 13, 2013
1 year
Member of the Financial, Investment and Control Committee
a. Eduardo Karrer is a Civil Engineering graduate from the UERJ, holds an MBA in Public Administration from PUC-RJ and attended Leadership Development programs at Rice University and General Management at SMU-Cox. He currently holds the position of CEO of ENEVA S.A. (since 2007). He held the position of Supervising Officer at Companhia Rio Polmeros S.A. (2007), Chief Executive Officer (2002/2007) and Vice President of Operations and New Ventures for South America (2001-2002) at El Paso Brasil Ltda. (core activity: power generation). He also held the position of General Manager of International Marketing at Petrobras S.A. (core activity: oil and gas) (2000). At Petrobras Distribuidora S.A., he held the position of Executive Manager for International Markets (1999), Executive Manager for Aviation Products (1998) and Executive Manager of the Gas and Energy Division (1997). He also held the position of General Manager - Marlim Field Development (1996) and Project Manager
279
Barracuda and Albacora Fields Projects (1992-1995) at Petrobras S.A. He was a Project Manager at Petrobras America Inc. (1990-1991), engineer of the Production Engineering Division at Petrobras S.A. (1986-1989) and project manager at Construtora Rabello (1984-1985). b. Eduardo Karrer declares for all purposes of the law that over the last 5 years he has not been subject to any criminal conviction, or to punishment or enforcement of penalties as a result of administrative proceedings filed with the CVM, or to final judgment in the judicial or administrative spheres, that might have resulted in his suspension or disqualification from engaging in any professional or commercial activities. Frank Possmeier Passport No. 801463073 Human Committee Resources Member of the Committee (Permanent) Administrator 55 June 13, 2013 June 13, 2013 1 year
Member of the Audit Committee Member of the Financial, Investment and Control Committee
Stein Dale Passport No. 28605707
Financial, Investment and Control Committee
President of the Committee
Administrator 49
June 13, 2013 June 13, 2013
1 year
Member of the Board of Directors (Permanent)
a. Stein Dale is a graduate of the Defense Language Institute-Norwegian Armed Forces, with a Masters degree in General Business from the Norwegian School of Management (BI), and specialization from IMD Orchestrating Winning Performance (OWP) in Lausanne, Switzerland and Harvard Business School Advanced Management Program (AMP), USA. He is currently CEO of E.On International Energy (core activity: power generation) (since 2012). He was CEO of Multiconsult AS (core activity: engineering consultancy services) (2011-2012), Executive Vice President and CFO of Statkraft (2002-2011), Executive Vice President of Enitel ASA (core activity: telecommunications) (2000-2001), Executive Vice President of Telia Norge AS (1994-2000). He also served as member of the Board of Directors of Multiconsult AS (2011-2012), SN Power (2005-2010), and from 2009 to 2012 was Chairman of the Board of Directors, E.On Sweden (2005-2009) and Fjordkraft (2004-2006). He was also Chairman of the Board of Directors of Statkrafet Treasury Centre Belgium (2008-2011) and of BKK (2007-2010). b. Stein Dale declares for all purposes of the law that over the last 5 years he has not been subject to any criminal conviction, or to punishment or enforcement of penalties as a result of administrative proceedings filed with the CVM, or to final judgment in the judicial or administrative spheres, that might have resulted in his suspension or disqualification from engaging in any professional or commercial activities.
Eduardo Karrer 794.312.677-72
President of the Committee
Engineer 52
June 13, 2013 June 13, 2013
1 year
280
CEO / Investor Relations Director Member of the Audit Committee Member of the Human Resources Committee
a. Eduardo Karrer is a Civil Engineering graduate from the UERJ, holds an MBA in Public Administration from PUC-RJ and attended Leadership Development programs at Rice University and General Management at SMU-Cox. He currently holds the position of CEO of ENEVA S.A. (since 2007). He held the position of Supervising Officer at Companhia Rio Polmeros S.A. (2007), Chief Executive Officer (2002/2007) and Vice President of Operations and New Ventures for South America (2001-2002) at El Paso Brasil Ltda. (core activity: power generation). He also held the position of General Manager of International Marketing at Petrobras S.A. (core activity: oil and gas) (2000). At Petrobras Distribuidora S.A., he held the position of Executive Manager for International Markets (1999), Executive Manager for Aviation Products (1998) and Executive Manager of the Gas and Energy Division (1997). He also held the position of General Manager - Marlim Field Development (1996) and Project Manager Barracuda and Albacora Fields Projects (1992-1995) at Petrobras S.A. He was a Project Manager at Petrobras America Inc. (1990-1991), engineer of the Production Engineering Division at Petrobras S.A. (1986-1989) and project manager at Construtora Rabello (1984-1985). b. Eduardo Karrer declares for all purposes of the law that over the last 5 years he has not been subject to any criminal conviction, or to punishment or enforcement of penalties as a result of administrative proceedings filed with the CVM, or to final judgment in the judicial or administrative spheres, that might have resulted in his suspension or disqualification from engaging in any professional or commercial activities.
Frank Possmeier Passport No. 801463073
Administrator 55
June 13, 2013 June 13, 2013
1 year
Member of the Audit Committee Member of the Human Resources Committee
281
12.9 - Existing marital relationship, common-law marriage, or family relationship up to 2nd degree relating to managers of the issuer, subsidiaries and controlling shareholders.
Name Individual Taxpayer Card (CPF): Business name of the issuer, subsidiary or parent company Corporate Taxpayer Code (CNPJ) Type of relationship with the manager of the issuer or subsidiary
Title Manager of the issuer or subsidiary Eike Fuhrken Batista Controlling Shareholder Related party Eliezer Batista da Silva Member of the Board of Directors Note 607.460.507-63 ENEVA S.A. 04.423.567/0001-21 664.976.807-30 ENEVA S.A. 04.423.567/0001-21 Father or Mother (1st degree by consanguinity)
Note
282
12.10 - Relationships of subordination, rendering of services or control between managers and subsidiaries, controlling shareholders and other:
Identification CPF/CNPJ Type of Managers relationship with the Related party Type of Related party
Position/Function
Fiscal year ended December 31, 2012 Manager of the issuer Eike Fuhrken Batista Controlling Shareholder of the Company Related Party MMX Minerao e Metlicos S.A. Chairman of the Board of Directors Controlling Shareholder of the Company 02.762.115/0001-49 664.976.807-30 Control Supplier
Note Mr. Eike Batista, the companys controlling shareholder, together with Mr. Eliezer Batista da Silva, members of the Board of Directors of ENEVA, is also members of the Board of Directors of MMX Minerao e Metlicos S.A. (MMX) while Mr. Eike Batista is Chairman of the Board and direct and indirect controlling shareholder of MMX, a company with which UTE Parnaba Gerao de Energia S.A. (UTE), a sub sidiary of ENEVA, signed an energy sales contract on 2/13/2008, as published in agreements with related parties of both parent companies. Manager of the issuer Eike Fuhrken Batista Controlling Shareholder of the Company Related Party Parnaba Gs Natural S.A. Indirect Controlling Shareholder of the Company Note Mr. Eike Batista is one of the Controlling Shareholders of ENEVA and Chairman of the Board of Directors and Controlling Shareholder of leo e Gs Participaes S.A., which is the Controlling Shareholder of OGX Petrleo e Gs S.A., shareholder of Parnaba Gs Natural S.A., an ENEVAs subsidiary. 08.926.302/0001-05 664.976.807-30 Control Supplier
283
12.11 - Agreements, including insurance policies, reimbursement of expenses incurred by management
for
payment
or
The company has civil liability insurance policies for its management (members of the Board of Directors, the Executive Board and committees) and members of the Fiscal Council, if installed, issued by renowned insurance companies, which aim to ensure the payment of financial losses arising from claims made against the insured in accordance with the conditions laid down set out in the contract, by virtue of harmful acts for which they are held accountable, provided that they have acted within their capacity as a manager. The premium on this policy is R$1,2 million and the maximum guarantee limit R$300 million, which is considered by management as sufficient to cover any claims, considering the nature of the companys activity.
284
Appointment of Frank Possmeier to the Companys Executive Board At the Board Meeting on June 13, 2013, the Company deliberated and approved the appointment of Mr. Frank Possmeier to the position of Executive Vice President of the Company. However, the election, investiture and taking of office of Mr. Frank Possmeier will only be formalized as and when he is granted a permanent visa and is authorized to hold the position of Executive Vice President of the Company by the competent authorities, including the General Coordinator of Immigration of the Ministry of Labor and Employment. For this reason, the election was approved of Mr. Alexandre Americano Holanda e Silva to the position of Executive Vice President of the Company until authorization is obtained from the Ministry of Labor, as well as the election, investiture and taking of office of Mr. Frank Possmeier after deliberation and by means of the proper instrument. Moreover, until the election, investiture and taking of office of Mr. Frank Possmeier will only be formalized (i) any decision by the executive committee of ENEVA or by (any) member(s) of the executive committee of ENEVA are subject to a joint prior approval by Mr. Eduardo Karrer and Mr. Frank Possmeier; and (ii) it may be granted powers to Mr. Frank Possmeier in order to (jointly) represent ENEVA. General Meetings Regarding the Companys General Meetings held over the last three years, we present below (i) The date the meetings were held; (ii) any cases of second call; and (iii) quorum:
Event Annual General Meeting Special General Meeting Annual General Meeting Special General Meeting Special General Meeting Special General Meeting Annual General Meeting Special General Meeting Special General Meeting Special General Meeting Annual General Meeting Date 4/30/2010 9/28/2010 4/26/2011 6/22/2011 8/30/2011 1/26/2012 4/30/2012 5/24/2012 8/15/2012 10/26/2012 4/29/2013 Quorum 75.70% 77.10% 74.02% 74.99% 77.18% 74.88% 76.86% 69.76% 71.99% 57.75% 70.96%
285
Special General Meeting
06/12/2013
71.10%
Management Positions In compliance with Item 4.5 of the Novo Mercado Rules, we present below the positions currently held by the members of the companys Board of Directors on the Board of Directors, the fiscal council, the committees and the executive bodies of other companies or entities: Mr. Eliezer Batista da Silva: Honorary Chairman of the Board of Directors of MMX Minerao e Metlicos S.A. Deputy Chairman of the Board of Directors of OSX Brasil S.A. Member of the Board of Directors of CCX Carvo da Colmbia S.A. Deputy Chairman of the Board of Directors of OGX Petrleo e Gs Participaes S.A. Honorary Chairman of the Board of Directors of LLX Logstica S.A.
Corporate governance practices adopted by our company
IBGC defines corporate governance as the system by which companies are managed and monitored, involving relationships between their shareholders, board of directors, management, auditors and fiscal council. This practice is based on the following basic principles: (i) transparency; (ii) fairness; (iii) accountability; and (iv) corporate responsibility. The principle of transparency requires management to cultivate the desire to disclose not only financial performance but also all other factors (even intangible ones) that guide business activities. Fairness means fair and equal treatment of all minority groups, employees, customers, suppliers or creditors. Accountability refers to corporate governance agents being accountable to those who elected them, with full responsibility for all acts practiced. Finally, corporate responsibility is a broader view of business strategy that incorporates social and environmental considerations in the definition of business and operations. From IBGCs recommended Corporate Governance Best Practices Code, we have adopted the following: share capital is divided into ordinary shares only, so all shareholders have voting rights; maintenance and dissemination of records containing the number of shares
286
of each member, identifying them by name; offers for shares resulting in the transfer of corporate control must be applicable to all members and not just those of the controlling block. All shareholders must be able to sell their shares on the same conditions. Share prices in any transfer of control must be transparent. Tag-along rights apply in the event of the entire controlling block being sold, in which case a public offering must be made to all shareholders on the same conditions; independent auditors must be engaged to analyze their balance sheets and financial statements; statutory provision for a fiscal council (conselho fiscal); bylaws to clearly state (a) the means of convening general meetings, and (b) the means of elect or remove members of the board of directors and the executive board, and the term of office; transparent disclosure in managements annual reports; free access to company information and facilities for members of the board of directors; any conflicts that may arise between the company, its shareholders, managers and members of the fiscal council to be settled by arbitration; the shareholders general meeting empowered to discuss and decide on: (a) increasing or decreasing share capital and other amendments to bylaws; (b) election or removal of members of the board directors or fiscal council at any time; (c) be given management accounts and vote financial statements annually; and (d) any conversion, merger, split, dissolution or liquidation; and choice of general meeting location in order to facilitate attendance of all members or their representatives.
Novo Mercado In 2000, BM&FBOVESPA introduced three trading segments with different levels of corporate governance practices, known as Level 1, Level 2 and Novo Mercado, with the aim of encouraging companies to follow best practices for corporate governance and adopt levels of disclosure higher than those legally required. These listing segments are meant for trading shares issued by companies voluntarily committing to corporate governance practices and disclosure requirements to higher standards than those legally required in Brazil. In general, these rules add to shareholders rights and enhance the quality of information provided for them. The Novo Mercado is the most rigorous of the three segments
287
and requires the highest level of corporate governance practices. Companies listed in the Novo Mercado segment voluntarily submit to certain rules that are stricter than those required under Brazilian legislation, such as (i) issuing only common shares; (ii) maintaining at least 25% of company shares outstanding; (iii) quarterly reporting with more detail and information; and (iv) providing annual financial statements in English, consolidated or individual, or, if not preparing consolidated financial statements, together with mana gements report or comments on performance and an independent auditor opinion or special report, pursuant to Brazilian legislation. To adhere to the Novo Mercado segment, a company must sign an agreement with its controlling shareholders and BM&FBOVESPA, and amend its bylaws to comply with Novo Mercado rules. Its management must sign a declaration of acceptance assuming responsibility for submitting to, and acting in accordance with, the Novo Mercado participation agreement, listing rules, and regulations covering sanctions and arbitration. On signing these agreements, companies must adopt Novo Mercado standards and practices. Novo Mercado rules aim to provide transparency for the market in relation to a companys activities and economic situation, assuring greater powers for minority shareholders to participate in management, among other rights. The principal Novo Mercado rules that we shall be bound by are briefly described below. The Companys common shares are admitted to trading on BM&FBOVESPAs Novo Mercado segment. Authorization to trade on Novo Mercado Firstly, a company wishing to list its securities on Novo Mercado must obtain publicly listed registration with the CVM, and update the latter. Among other conditions, the company must sign a Novo Mercado participation agreement and adapt its bylaws to comply with minimum conditions required by BM&FBOVESPA. Its capital structure must be exclusively divided into common shares and shares representing at least 25% of share capital must be maintained in circulation. Companies listed on the Novo Mercado segment are not allowed to issue participation certificates (or keep them in circulation). The board of directors of authorized companies that have their shares traded on the Novo Mercado must consist of at least five members elected by a general meeting, all of whom are elected together for a maximum of two years, with reelection being permitted. At least 20% of the members of the board of directors must be independent directors. All new members of the board of directors and executive board must sign a statement of acceptance as a condition for taking office. Through the statement of
288
acceptance, new managers are personally responsible for acting in accordance with the Novo Mercado participation agreement, listing rules, and regulations covering sanctions and arbitration. Other Novo Mercado characteristics Among other requirements for Novo Mercado listed companies, we would highlight the following: (i) the obligation to make public offerings of shares under certain circumstances, such as canceling registration for trading on the Novo Mercado; (ii) any public distribution of shares must favor dispersed share ownership; (iii) in the event of selling or transferring control of the company, the same conditions obtained by the controlling block must be extended to all shareholders; (iv) full disclosure of related party transactions; and (v) the Company, its shareholders, directors and members of the fiscal council must be bound by BM & FBOVESPA Arbitration Rules for settling any disputes that may arise between them, related to or arising from the application, validity, efficacy, interpretation, violation and its effects, of the Law of Corporations, the companys bylaws, rules issued by the CNM, Central Bank and CVM, and other rules applicable to the securities market in general, in addition to those stated in Novo Mercado rules governing listing, arbitration and sanctions, and the Novo Mercado participation agreement. Additionally, pursuant to CMN Resolution 3456/2007, which established new rules for closed private pension entities investing their funds, shares issued by companies that adopt differentiated corporate governance practices, such as those whose securities are admitted to trading in the Novo Mercado special segment, or whose listing classification is Level 1 or Level 2 in accordance with rules and regulations issued by BM & FBOVESPA, may be held in larger proportions of the investment portfolios of such pension funds. Since said Resolution was enacted, shares of companies adopting corporate governance practices have become an important and attractive investment for closed private pension entities, which are major investors in the Brazilian capital market. This fact may drive the development of the Novo Mercado and benefit companies whose securities are traded there. The Companys shareholders enjoy all rights and guarantees provided by Novo Mercado rules, as reflected in the Companys bylaws.
289
13.1 - Description of compensation policy or practice, including non-statutory board members
(a)
Objectives of compensation policy or practice
Our compensation strategy is in line with the markets best practices and designed to ensure our competitiveness in relation to our key rivals and majors operating in Brazil. The main objective is to reward professionals for their performance ensuring the company evolves as per the strategic planning we have defined and in alignment with short-, medium- and long-term shareholder returns. We thus encourage improved management and attract, motivate and retain highly qualified executives, aligning their interests with those of shareholders.
(b)
compensation - breakdown description of components of compensation and their objectives
(i)
Managements compensation policy consists of (i) a fixed component, the maximum amount being set annually by general meetings. Depending on the case, it may include direct or indirect benefits; (ii) a variable component; and (iii) a share based component - stock options - to purchase or subscribe our shares (Stock Options). Each body will have compensation broken down as described in the items below. All these components of compensation are intended to enhance teams performance, attract highly qualified professionals for our management, and retain them.
Board of directors
Fixed compensation As of May 2012, as decided by the 2012 annual general meeting, members of the board of directors have been entitled to fixed monthly compensation (fees) with the purpose of recognizing and reflecting the value of the position internally and externally, as well as the individual performance, experience, background and seniority of the directors. Variable compensation Short term Until April 2012, the short-term remuneration of the Board of Directors was paid upon attendance of board meetings.
290
Long term - Compensation based on company shares Share-based compensation through options to buy or subscribe company shares, which may be granted in two ways:
(i)Through the Controller Plan, i.e. options granted by the Controllin g Shareholder with its own shares, therefore not involving any issue of new shares and consequently not causing dilution of other shareholders equity. These options are granted in favor of certain members of the executive board and board of directors of the company and other companies controlled by the Controlling Shareholder (OGX, MMX, LLX, OSX and CCX).
(ii)Through annual stock option plans (Company Plans), under the program granting options to buy or subscribe the companys common shares, the latest amendment and consolidation of which was voted at the general meeting held on January 26, 2012 (Program). Both the Company Program and the Controlling Shareholder Plan incentivize directors, officers and key employees and staff to conduct our business successfully, encourage entrepreneurial and results-oriented culture, and align our managements interests with those of our shareholders. For more information, see item 13.4 of the Reference Form.
Statutory and non-statutory officers
Fixed compensation Managements fixed monthly compensation is determined in accordance with the responsibilities of each position and in line with best market practices. When appropriate, this compensation may be supplemented by direct or indirect benefits as follows: medical assistance, dental assistance, life insurance, supplementary life insurance, meal voucher and food voucher. Fixed compensation is intended to compensate directors/officers for their work in accordance with their activity and seniority. Variable compensation Short term Managements short-term variable compensation consists of an annual amount based on the extent to which company targets are reached. Its aim is to provide compensation for results reached by management in accordance with their performance and returns earned for our company. Long term - Compensation based on company shares Share-based compensation through options to buy or subscribe company shares (Stock Options), which may be granted by the Controlling Shareholder or Company Plan in the ambit of our company stock option plan as described above.
291
The Companys Program and the Controlling Shareholders Plan aim at stimulating Managers, key employees and staff to conduct our business successfully, encouraging an entrepreneurial and results-oriented culture, and aligning Managements interests with those of our shareholders.
For more information, see Section 13.4 of the Reference Form.

Fiscal Council
Fixed compensation Our fiscal council is not permanent, therefore fiscal council members, when installed, will receive fixed monthly payments (fees) equivalent to 10% of the average assigned to management pursuant to Law 6404/76.
Audit Committee
Fixed compensation Audit Committee member compensation consists of a fixed monthly amount (fee) that reflects responsibilities assumed, time devoted to company business and the professional competence of its members. It is intended to compensate the results achieved according to their performance and the return for the Company. (ii) what is each components proportion of total compensation
Each components proportion of total compensation in FY 201 was as follows:

Board of directors Fixed compensation Salary or pro-labore fees Benefits Others Variable compensation Share-based compensation Controlling Shareholder Plan 1 Company Program Total 86% 4% 100% 78% 0% 100% 0% 0% 100% 0% 0% 100% 5% 0% 2% 18% 1% 3% 100% 0% 0% 100% 0% 0% Management Audit Committee Fiscal Council
(iii) methodology used for calculation and adjustment of each component of compensation Management compensation is benchmarked against market practices, taking into account the practices used by peer companies with similar size and
292
characteristics, as well as internal references, which are analyzed on a regular basis. In the case of the executive board, it is also based on merit and international competitiveness. There is no specific methodology for adjustment each of the components of compensation. (iv) reasons for composition of compensation
The composition of compensation aims to reflect the responsibility involved in each position, while maintaining competitiveness in the market. With the use of various components of compensation and compensation for members of the board of directors and executive board being largely through stock options (under the Controlling Shareholders Plan and the Company Program), we aim to encourage improved management, and to attract and retain managers while aligning their interests with those of shareholders by sharing risks in long -term incentives. (c) Key performance indicators taken into account to determine each component of compensation To determine fixed and variable compensation for executive board members, we uses market surveys as benchmarks, as well as merit and the extent to which company targets are met. Compensation of members of the board of directors and committees is also based on market parameters. Performance is not monitored by indicators. In relation to share -based compensation (stock options), management compensation reflects the performance and evolution of the value of our companys shares.
(d) How compensation performance indicators
is structured to reflect the evolution of
Compensation is determined from market surveys to define amounts and takes into account responsibilities, time spent on duties, competence and professional reputation. Share-based compensation for our companys management is directly linked to share price, which in turn reflects our companys performance. (e) How compensation policy or practice aligns with issuers short-, medium- and long-term interests Fixed and variable compensation together with share-based compensation aim to encourage better management, and to attract and retain managers, seeking gains through commitment to short and medium-term results.
293
In addition, stock options give beneficiaries an opportunity to become company shareholders and encourage them to work to optimizing all aspects that may add to the companys value on a long-term sustainable basis. (f) Existence of compensation supported by directly or indirectly controlled subsidiaries The stock option plan granted by the controlling shareholder in favor of certain members of management (Controlling Shareholder Plan), as mentioned above, grants stock options issued by ENEVA. For more information, see item 13.4 of the Reference Form. (g) Existence of any compensation or benefit related to the occurrence of certain corporate events, such as transfer of control of the issuer Not applicable, since there is no component of management compensation related to corporate events.
294
13.2 - Total compensation of the board of directors, statutory officers and fiscal council
Total compensation stipulated for the current fiscal year (2013) - Annual Amounts Board of directors No. of members Fixed annual compensation Salary or withdrawal Direct and indirect benefits Attending committees Other Description of other fixed compensation items Variable compensation Bonus Profit sharing Share in meetings Commission Other Description of other variable compensation items Post-employment Leaving position Based on shares Note 497,820.37 47,999.97 No payment of INSS (social security) 2,866,392.12 459,652.31 3,364,212.49 459,652.31 47,999.97 8.53 Statutory officers 3.08 Fiscal Council 0 Total 11.62
585,465.30 -
585,465.30 -
65,116.19 Estimate using the total number of options exercised in 2012 and exercise price or 2012. 610,936.53 39,649,277.28 Estimate using the total number of options exercised in 2012 and exercise price or 2012. 43,560,787.01 0.00 39,714,393.47
44,171,723.54
Total compensation
Total compensation in period ended 12/31/2012 - Annual Amounts Board of directors No. of members Fixed annual compensation Salary or withdrawal Direct and indirect benefits Attending committees Other Description of other fixed compensation items 355,000.00 165,000.00 No payment of INSS (social security) 4,180,276.66 177.096,06 834,473.39 Social security contributions (INSS) No payment of INSS (social security) 89,402.00 4,624,678.66 177,096.06 165,000.00 834,473.39 11.50 Statutory officers 5.00 Fiscal Council 3.00 Total 19.50
295
Total compensation in period ended 12/31/2012 - Annual Amounts Board of directors Variable compensation Bonus Profit sharing Attending meetings Commission Other Description of other variable compensation items Post-employment Leaving position Based on shares Note 195,000.00 No payment of INSS (social security) 6,216,161.54 Taking the total number of options exercised in 2012, under both the companys program and the parents plans. 6,931,161.54 18,672,647.84 Taking the total number of options exercised in 2012, under both the companys program and the parents plans. 23,864,493.95 Taking the total number of options exercised in 2012, under both the companys program and the parents plans. 89,402,00 30,885,057.48 24,888,809.37 195,000.00 Statutory officers Fiscal Council Total -
Total compensation
Total compensation in period ended 12/31/2011 - Annual Amounts Board of directors No. of members Fixed annual compensation Salary or withdrawal Direct and indirect benefits Attending committees Other Description of other fixed compensation items Variable compensation Bonus Profit sharing Attending meetings Commission Other Description of other variable compensation items Post-employment Leaving position Based on shares Note 0.00 0.00 9,378,841.05 Taking the total number of options exercised in 0.00 0.00 395,000.00 0.00 0.00 N/A 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 395,000.00 0.00 0.00 0.00 0.00 120,000.00 0.00 No payment of INSS (social security) 3,807,761.82 173,292.35 0.00 761,552.43 No payment of INSS (social security) 69.748,00 0.00 0.00 0.00 No payment of INSS (social security) 3,877,509.82 173,292.35 120,000.00 761,552.43 8.92 Statutory officers 5.00 Fiscal Council 3.00 Total 16.92
0.00 0.00 27,500,757.20 Taking the total number of options exercised in
0.00 0.00 0.00
0.00 0.00 36,879,598.25
296
Total compensation in period ended 12/31/2011 - Annual Amounts Board of directors 2011, under both the companys program and the parents plans. Total compensation 9,893,841.05 Statutory officers 2011, under both the companys program and the parents plans. 32,243,363.80 69,748.00 42,206,952.85 Fiscal Council Total
Total compensation in the period ended 12/31/2010 - Annual Amounts Board of directors No. of members Fixed annual compensation Salary or withdrawal Direct and indirect benefits Attending committees Other Description of other fixed compensation items Variable compensation Bonus Profit sharing Attending meetings Commission Other Description of other variable compensation items Post-employment Leaving position Based on shares Note 0.00 0.00 17,152,743.50 Taking the total number of options exercised in 2010, under both the companys program and the parents plans. 17,597,743.50 0.00 0.00 27,501,473.20 Taking the total number of options exercised in 2010, under both the companys program and the parents plans. 31,172,947.60 48,770,691.10 0.00 0.00 44,654,216.70 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 445,000.00 0.00 No payment of INSS (social security) 2,812,410.30 155,961.52 0.00 703,102.58 No payment of INSS (social security) 3,515,512.88 155,961.52 445,000.00 0.00 8.92 Statutory officers 5.67 Fiscal Council Total 14.58
Total compensation
297
13.3 - Variable compensation of the board of directors, statutory officers, and fiscal council
There was no variable compensation related to bonuses or participation in results in the last three fiscal years for members of the board of directors or statutory officers. For 201, there is no provision for payment of bonuses or profit sharing.
298
13.4 - Share-based compensation for the board of directors and statutory officers
(a)
General terms and conditions
Stock options granted by the controlling shareholder (Controlling Shareholder Plan) The Controlling Shareholder granted options to certain members of management to purchase its shares and those of ENEVA and other companies controlled by the Controlling Shareholder, namely MMX, LLX, OGX, OSX and CCX, which are not recognized in result in accordance with accounting practices adopted in Brazil. The stock options granted to these professionals may be exercised in the proportion of 10% or 20% on each anniversary of their grant dates for periods of up to 10 years, as stated in the corresponding individual grant contracts. Shares acquired by exercising these options are subject to certain restrictions, including a ban on sale of such shares within 36 months of signing the respective contracts. Also note that these options refer to acquisition of shares held by the controlling shareholder, so if they are exercised they will not require new shares to be issued and therefore will not result in dilution of the equity of other company shareholders. Company Program to subscribe or purchase ENEVA shares (Company Program): The Extraordinary General Meeting held on November 26, 2007 approved a stock option program consisting of grant of options to purchase or subscribe ENEVA common shares for members of the board of directors, senior managers and other Company employees, as well as those of other companies belonging to the ENEVA Group. This program was altered and consolidated at general meetings held on September 28, 2010, April 26, 2011 and January 26, 2012. The latest consolidation of this program determines general guidelines to be considered by our companys management for options to purchase or subscribe our companys common shares granted to members of the Board of Directors, executive board and employees, as well as those of other companies belonging to the Group ENEVA . These guidelines state that: (i) the total number of shares allocated to the program may not exceed 2% of the total number of shares issued by our company, not including authorized capital; (ii) share value will be determined based on the market value of our shares calculated as the simple average of their price over the 20 most recent trading
299
sessions, counted as of the date - inclusive- of the participants appointment, in all cases taking the daily average price at close of trading (Share Value ). (iii)the price for subscribing or buying shares will be calculated based on the percentage of share value stated in the Option Agreement and will never be less than 40% or more than 100% of said value (Subscription Price ); and
(iv)
the responsibility for administering the program was delegated to the board of directors
Therefore, the board of directors shall:

(v)
decide issues of shares under the program (art. 168, 1, b of the Law of Corporations); within the parameters of the program, define periodic plans (referred to in this Reference Form as Company Plans); to make any alterations in relation to Company Plans currently in place;
(vi)
(vii) proceed
(viii)
take any other steps required to manage the Company Program, as long as they do not lead to its being altered; and
(ix)
propose alterations to the Company Program to be submitted to the approval of extraordinary general meetings.
The board of directors shall also decide on the opportunity and convenience of implementing said periodic plans in each year of the programs duration, or not doing so. If implemented, plans must at least state: (a) their duration; (b) the maximum number of options that may be granted under each plan; and (c) whether or not the trading of shares acquired by the exercise of the options will be blocked, and the period stipulated for this blocking. On the recommendation of its president, the board of directors shall opportunely discuss and decide: (a) proposed participants for each Plan; (b) the respective quantities of stock options; (c) subscription or purchase prices; and (d) other conditions for acquiring the right to exercise the options. (b) Principal objectives of the plan
Both the Controlling Shareholder Plan and the Company Program have the following objectives: (i) align management and shareholder interest, encourage continuous improvement of management to boost our enterprise value and that of companies under our direct or indirect control; and (ii) attract, motivate and retain highly qualified executives to our staff and increase the attractiveness of the Company and ENEVA Group companies.
300
(c)
State how the plan contributes to these objectives
Both the Controlling Shareholder Plan and the Company Program enable their beneficiaries to become our companys shareholders, thus encouraging them to work to optimize all aspects that may add to the value of our company on a sustainable basis. (d) How does the plan mesh with the issuers compensation policy
The Companys compensation policy seeks to encourage the professional growth of its managers, employees and service providers, and value their individual merit. In this sense, the Stock Option Program is in line with the Companys compensation policy as it allows its managers, employees and service providers to measure their variable compensation in accordance with their personal performance through the granting of stock options based on that merit. (e) How does the plan align the interests of the issuers management with issuer short- medium- and long-term interests Controlling Shareholder Plan and Company Plans stipulate the exercise of options in annual proportions for a period of up to ten years, depending on the plan. Therefore, managements gains are linked to the performance of our shares until the last period for exercising options, thus boosting managements commitment to our companys short-, medium- and long-term performance. (f) Maximum number of shares covered
Under the Company Program, beneficiaries may be granted options to purchase shares up to the limit of 2% of the total number of shares issued by our company, computing in this calculation all options already granted but not yet exercised. The maximum number of shares that may be covered by the Controlling Shareholder Plan is determined by the Controlling Shareholder itself, and does not follow a pre-established criterion, since such plan does not involve issuing new shares and therefore will not cause dilution of shares of other company shareholders. (g) Maximum number of options to be granted
Under the Company Program, beneficiaries may be granted options to purchase shares up to the limit of 2% of the total number of shares issued by our company, computing in this calculation all options already granted but not yet exercised. The maximum number of shares that may be covered by the Controlling Shareholder Plan is determined by the Controlling Shareholder itself, and does not follow a pre-established criterion, since such plan does not involve issuing
301
new shares and therefore will not cause dilution of shares of other company shareholders. (h) Conditions for acquiring shares
Once a member of management has been granted options under the Controlling Shareholder Plan or Company Program, he or she shall: (i) remain with the company until the date on which each portion of options vests, saving exceptions stipulated in paragraph 16 of the Program; (ii) state their wish to exercise portions within the maximum period stipulated in the contract; and (iii) pay the exercise price set for the shares. (i) Criteria for determining acquisition or exercise price
Under the Company Program, the option exercise price will be determined based on market value of the shares calculated by the simple average of the price of the Companys shares in the latest 20 trading days as of the share grant date for a given employees of the company, in all cases taking closing prices of each trading session. The purchase or exercise price of each share will never be less than 40% or more than 100% of the market value of the shares. Prices may also be updated by IPCA inflation as announced by IBGE. Under the Controlling Shareholder Plan, purchase or exercise is determined at the discretion of the Controlling Shareholder. (j) Criteria for determining exercise period
In the Company program, the maximum period for option exercise is stated in the respective stock option contracts. This period shall not exceed one year as of period of maturity of the last portion of options granted under the respective option contract. (k) Means of payment
Subscription or purchase of stock options granted under the Program and Plan, as applicable, must be paid cash from the beneficia rys own funds. The same criteria apply to stock options granted by our controlling shareholder in favor of executives. For options granted under the Company Program, exceptionally, the Companys board of management may authorize Participants to pay a minimum portion equivalent to 10% of total subscription price at the time of purchase, with the remaining 90% to be paid within thirty days of the date of the first payment. (I) Restrictions on transfer of shares
302
The Controlling Shareholder Plan does not allow trading in shares it has granted for 36 months as of signing contracts. Under the Company Plans, some contracts stipulate restriction on trading shares within three years of signing the contract. (m) Criteria and events that may lead to suspension, amendment or termination of the plan The occurrence of factors that cause severe alterations in the economic outlook and compromise the Companys financial condition may lead to modification or termination of the Program, including in relation to plans already in place and stock options already granted but not yet exercised. However, note that it is the incumbency of extraordinary general meetings to approve, alter, suspend or terminate the Companys Stock Option Plan. (n) Effects of managers leaving issuer on rights stipulated in sharebased compensation plan
In the Company Program, dismissal cases will be treated as follows: Dismissal for cause or upon request: (a) unvested options will be cancelled; and (b) vested options, which were not exercised yet, may no longer be exercised e and will be equally cancelled. Dismissal without cause: (a) unvested options will be cancelled; and (b) vested options, which were not exercised yet, may be exercised, provided that the conditions set forth in the respective Stock Options Agreement are complied with, and it is hereby agreed that the maximum term for exercise the options may be anticipated in this case, according to the resolution of the competent agency or as set forth in the respective Stock Options Agreement. Dismissal for retirement for length of service or age: (a) unvested options will be cancelled; and (b) vested option, which were not exercised yet, may be exercised within 90 days counted from the date of approval by the National Social Security Institute (INSS) of the request for retirement for length of service or age. Permanent disability retirement: (a) unvested options will be cancelled upon termination of the employment agreement due to the granting of permanent disability retirement, and the Company may establish otherwise in specific cases; and (b) vested options, which were not exercised yet, may be exercised by the disabled participant or his/her legal representative (curator) by presenting to the Company the respective proof of granting of permanent disability retirement issued by the INSS and respective termination of employment agreement within
303
180 days counted from the date of approval by the INSS of the request for permanent disability retirement. Dismissal for the Participants death: (a) unvested options will be cancelled after the Participants death, and the Company may establish otherwise in specific cases; and (b) vested options, which were not exercised yet, may be exercised by the administrator, as duly defined in the regular probate proceeding, by presenting to the Company the respective administrators commitment agreement, as appointed by the competent court, within 180 days counted from the appointment of the administrator by the court, or, in the event of extrajudicial probate proceeding by the office of the notary public, it is hereby agreed that, if the probate proceeding is not initiated within six months counted from the date of death, the vested options will be also cancelled automatically. With respect to the Controlling Plan, the dismissal of the manager implies the loss of unvested options.
304
13.5 - Holdings in shares, units or other convertible securities held by management and fiscal council members - by body
ENEVA LLX Shares MMX Shares OGX Shares OSX Shares CCX Shares MMX EBX
Board of directors Management Fiscal Council
314,039,932(1) 2,941,360 -
379,182,412 -
291,409,972 -
1,876,871,146 1 -
227,735,679 -
106,468,544 410,693 -
670,411,925 -
202,958,276 -
(1) Corresponds to the sum of the number of shares presented to the Controlling Shareholder and the Board of Directors in consolidated trading form for management and related parties referring to December 2012, made available via IPE system on January 10, 2013.
305
13.6 - Share-based compensation for the board of directors and statutory officers
Companys stock option plan:
Share-based compensation estimated for the current financial year (20131) Board of Directors Number of members Grant of stock options Grant date Quantity of stock options granted Final vesting date for options 11/26/2007 528,000 The options will be exercised in the proportion of 20% on each of the first five grant-date anniversaries of the public offering held on December 13 2007 1 year after maturing none 04 Statutory Management -
Final date for exercising options Transfer restriction period Weighted average price for period: (a) Options outstanding at beginning of year (b) Options forfeited during the period (c) Options exercised during the period (d) Options expired during the period Fair value of options on grant date(2) Potential dilution if all options granted were to be exercised
(2)
1.07 1.07 R$16.03 0.02%
The deadline for the exercise of stock options under the Company Plan ended on November 26, 2011.
The calculation of the fair value of options takes into account the total number of shares included in the Companys Stock Options Plan that may be subscribed or acquired in the proportion of 20% per year and in the event of full option exercise.
(2)
Share-based compensation financial year ended 12/31/2012 Management Number of members Grant of stock options Grant date Quantity of stock options granted Final vesting date for options 11/26/2007 528,000 Options will be 04 -
306
Share-based compensation financial year ended 12/31/2012 Management exercised in the proportion of 20% on each of the first five grant-date anniversaries of the public offering held on December 13, 2007
Final date for exercising options Restricted period for sale or transfer of shares
1 year after maturing none
Weighted average price for period2: (a) Options outstanding at beginning of year (b) Options lost during the period (c) Options exercised in the period (d) Options expired in period Fair value of options on grant date(1) Potential dilution if all options granted were to be exercised
(1)
1.01
R$16.03
0.02%
Share-based compensation financial year ended 12/31/2011 Board of Directors Number of members Grant of stock options Grant Date Quantity of stock options granted Final vesting date for options 11/26/2007 528,000 Options will be exercised in the proportion of 20% on each of the first five grant-date anniversaries of the public offering held on December 13, 2007 1 year after maturing none 04 Statutory Management -
Final date for exercising options Transfer restriction period
307
Share-based compensation financial year ended 12/31/2011 Board of Directors Weighted average price for period: (a) Options outstanding at beginning of year (b) Options forfeited during the period (c) Options exercised in the period (d) Options expired in the period Fair value of options on grant date
(1)
Statutory Management
0.96 0.96 R$16.03 0.02%
Potential dilution if all options granted were to be exercised

(1)
Share-based compensation financial year ended 12/31/2010 Board of Directors Number of members Grant of stock options Grant Date Quantity of stock options granted Final vesting date for options 11/26/2007 528,000 Options will be exercised in the proportion of 20% on each of the first five grant-date anniversaries of the public offering held on December 13, 2007 1 year after maturing none 04 Statutory Management -
Final date for exercising options Transfer restriction period Weighted average price for period: (a) Options outstanding at beginning of year (b) Options forfeited during the period (c) Options exercised in the period (d) Options expired in the period Fair value of options on grant date
(1)
0.9 R$16.03 0.02%

(1)
The calculation of the fair value of options takes into accounts the total number of stocks included in the Companys Stock Option Plan, which might be subscribed or acquired in the proportion of 20% per year an d in the event of full option exercise.
Parent companys stock option plan
308
Share-based compensation for the current financial year (2013) Board of Directors Number of members Grant of stock options Grant date Quantity of stock options granted Final vesting date for options 04/28/2008 1,295,940 Options will be exercised in the proportion of 20% on December 13 of each year 1 year after maturing 04/28/2008 2,885,400 Options will be exercised in the proportion of 10% on December 13 of each year 1 year after maturing 04/28/2008 17,312,640 Options will be exercised in the proportion of 10% on December 13 of each year 1 year after maturing None 01 Board of Directors 01 Statutory Management 05
Final date for exercising options
Transfer restriction period Weighted average price for period: (a) Options outstanding at beginning of year (b) Options forfeited during the period (c) Options exercised in the period (d) Options expired in the period Fair value of options on grant date
)
None
None
R$0.01
R$0.01
R$0.01
R$0.01 R$15.83
R$0.01 R$15.83
R$0.01 R$15.83
None
None
None
Share-based compensation financial year ended 12/31/2012 Board of directors Number of members Grant of stock options Grant date Quantity of stock options granted Final vesting date for options 04/28/2008 1,295,940 Options will be exercised in the proportion of 20% on December 13 of each year 1 year after maturing none 04/28/2008 2,885,400 Options will be exercised in the proportion of 10% on December 13 of each year 1 year after maturing none 04/28/2008 17,312,640 Options will be exercised in the proportion of 10% on December 13 of each year 1 year after maturing none 01 Board of directors 01 Statutory Management 05
Final date for exercising options Transfer restriction period Weighted average price for period: (a) Options outstanding at beginning of year (b) Options forfeited during the period
R$0.01 -
R$0.01 -
R$0.01
309
Share-based compensation financial year ended 12/31/2012 Board of directors (c) Options exercised in the period (d) Options expired in period Fair value of options on grant date Potential dilution if stock options granted were exercised in the period R$0.01 R$15.83 Board of directors R$0.01 R$15.83 R$15.83 none none none Statutory Management R$0.01
Share-based compensation financial year ended on 12/31/2011 Board of Directors Board of Directors Number of members Grant of stock options Grant date Quantity of stock options granted Final vesting date for options 04/28/2008 1,295,940 Options will be exercised in the proportion of 20% on December 13 of each year 1 year after maturing none 04/28/2008 2,885,400 Options will be exercised in the proportion of 10% on December 13 of each year 1 year after maturing none 04/28/2008 17,312,640 Options will be exercised in the proportion of 10% on December 13 of each year 1 year after maturing none 01 01 Statutory Management 05
Final date for exercising options Transfer restriction period Weighted average price for period: (a) Options outstanding at beginning of year (b) Options forfeited during the period (c) Options exercised in the period (d) Options expired in period Fair value of options on grant date (R$000) Potential dilution if stock options granted were exercised in the period
R$0.01
R$0.01
R$0.01
R$0.01 R$15.83
R$0.01
R$0.01
R$15.83
R$15.83
none none
none
Share-based compensation financial year ended on 12/31/2010 Board of Directors Number of members Stock Options Grant Grant date Quantity of stock options granted 04/28/2008 1,295,940 04/28/2008 2,885,400 04/28/2008 17,312,640 01 Board of Directors 01 Statutory Management 05
310
Share-based compensation financial year ended on 12/31/2010 Board of Directors Final vesting date for options Options will be exercised in the proportion of 20% on December 13 of each year 1 year after maturing Board of Directors Options will be exercised in the proportion of 10% on December 13 of each year 1 year after maturing Statutory Management Options will be exercised in the proportion of 10% on December 13 of each year 1 year after maturing none
Final date for exercising options
Transfer restriction period Weighted average price for period: (a) Options outstanding at beginning of year (b) Options forfeited during the period (c) Options exercised in the period
none
none
R$0.01
R$0.01
R$0.01
R$0.01
R$0.01
R$0.01
(d) Options expired in period Fair value of options on grant date (R$000) Potential dilution if stock options granted were exercised in the period
R$15.83
R$15.83
R$15.83
none
none
none
311
13.7 - Details of outstanding options held by the board of directors and statutory officers
Companys stock option plan

Outstanding options at the year ended December 31, 2012 Year ended December 31, 2012 Board of directors No. of members Options yet to vest Quantity Vesting date Final date for exercising options Transfer restriction period Weighted average price for period Fair value of options on last day of period Options vested Quantity Final date for exercising options Transfer restriction period Weighted average price for period Fair value of options on last day of period Fair value of total options on last day of period 84,480 1 year after maturing none R$1.01 R$10,14 R$856,627,20 none R$0.00 4

Outstanding options at the year ended December 31, 2012 No. of members Options yet to vest Quantity Date becoming exercisable 0 Options will be exercised in the proportion of 20% on December 13 of each year 1,442,700 Options will be exercised in the proportion of 10% on December 13 of each year 8,656,320 Options will be exercised in the proportion of 10% on December 13 of each year 01 01 05
Outstanding options at the year ended December 31, 2012 Final date for exercising options Transfer restriction period Weighted average price for period 1 year after vesting R$0.01 1 year after vesting R$0.01 R$0.01
312
Fair value of options on last day of period Exercisable options Quantity Final date for exercising options Transfer restriction period Weighted average price for period Fair value of options on last day of period Fair value of total options on last day of period
R$0.00
R$0.01
R$0.01
259,200 12.13.2013 R$0.01 R$11,14
288,540 12.13.2013 R$0.01 R$11,14
1,731,264 12.13.2013 R$0.01 R$11,14
2,887,448.00
3,228,762.60
19,372,844.16
313
13.8 - Options exercised and shares delivered in relation to share-based compensation for the board of directors and statutory officers
Companys stock option plan

Options exercised - Period ended 31/12/ 2012 Board of directors Number of members Options exercised Number of shares Weighted average price for period Difference between exercise price and share price for options exercised Shares delivered Number of shares Weighted average price for period 0 R$0.00 0 R$0.00 04
R$0.00
Options exercised - Period ended 31/12/ 2011 Board of directors Number of members Options exercised Number of shares Weighted average price for period Difference between exercise price and share price for options exercised Shares delivered Number of shares Weighted average price for period 0 R$0.00 35,140 R$3.52 04
R$1,510,317.20
Options exercised - Period ended 31/12/ 2010 Board of directors Number of members Options exercised Number of shares Weighted average price for period Difference between exercise price and share price for options exercised Shares delivered Number of shares Weighted average price for period 0 R$0.00 0 R$0.00 04
R$0.00
314

Options exercised - Period ended 31/12/ 201 Board of directors Number of members Options exercised Number of shares Weighted average price for period Difference between exercise price and share price for options exercised Shares delivered Number of shares Weighted average price for period 0 0 02 ENEVA 547,740 Management 05 ENEVA 1,731,240
R$0.01
R$0.01
R$6,101,823.60
R$19,286,013.60
R$0.00
R$0.00
Options exercised - Period ended 12/31/ 2011 Board of directors Number of members Options exercised Number of shares Weighted average price for period Difference between exercise price and share price for options exercised Shares delivered Number of shares Weighted average price for period 0 0 0 0 02 ENEVA 182,580 ENEVA 577,080 Management 05 MMX 10,640 LLX 10,640
R$0.01
R$0.01
R$0.01
R$0.01
R$8,488,144.20
R$26,828,449.20
R$70,862.40
R$35,750.40
R$0.00
R$0.00
R$0.00
R$0.00
Options exercised - Period ended 12/31/ 2010 Board of directors Number of members Options exercised Number of shares Weighted average price for period 258,440 03 ENEVA 673,260 Management 06 MMX 10,720 LLX 10,720
R$0.01
R$0.01
R$0.01
R$0.01
315
Options exercised - Period ended 12/31/ 2010 Board of directors Difference between exercise price and share price for options exercised Shares delivered Number of shares Weighted average price for period 0 0 0 0 Management
R$5,812,315.60
R$15,141,317.40
R$107,307.20
R$108,272.00
R$0.00
R$0.00
R$0.00
R$0.00
316
13.9 - Information required to understand figures disclosed in items 13.6 to 13.8 - Pricing method for shares and options
(a)
Pricing model
Companys Program To determine the fair value of the stock options program, the Merton (1973) model, a variant of the Black & Scholes (1973) model, which takes into account dividend payment, was used. Controller Plan To determine the fair value of the stock options program of the Companys Program, the Black & Scholes model was used. (b) Data and assumptions used in the pricing model, including the weighted average price of shares, exercise price, expected volatility, term of the option, expected dividends and risk-free interest rate Companys Program (i) Determination of expected volatility The limited historical series of quotes of ENEVA shares on the stock exchange does not guarantee a reliable projection of future volatility of prices from past data. Therefore, the Electric Power Index-IEE, the first sector index released by BM&FBOVESPA in August 1996, was used as a proxy. The sector indexes are designed to provide a segmented view of the stock market behavior. The definition of time window to estimate expected future volatility (that is, the extent of the historical data series examined) was also maintained as equal to the T term of the option to which it will be applied in the pricing. (ii) Expected Dividend Rate ENEVA has not distributed any amounts as dividends or interest on shareholders equity since its incorporation. Therefore, the hypothesis that dividends will not be paid during the effectiveness of the stock options program was upheld. (iii) Risk-Free Rate Reference rates were used for adjustments of SWAP agreements with IPCA coupon, disclosed by BM&FBOVESPA. (iv) Program Abandonment Rate
317
There has been no record of abandonment by the executive officers participating in the incentive program since its establishment. Controllers Plan (i) Determination of expected volatility To calculate share volatility, in those cases where there was no historical series of share price, an approximation through average beta of similar companies was used and applied to the Bovespa index. The definition of time window to estimate expected future volatility (that is, the extent of the historical data series examined) was also maintained as equal to the T term of the option to which it will be applied in the pricing. (ii) Expected Dividend Rate As of the granting date, there was no estimated payment of dividends or interest on shareholders equity. For this reason, the hypothesis that no dividends will be paid during the effectiveness of the Companys Program was taken into consideration. (iii) Risk-Free Rate The risk-free interest rate was determined based on market projections. (iv) Program Abandonment Rate There has been no record of abandonment by the executive officers participating in the incentive program since its establishment. (c) Method and assumptions used to incorporate the effects expected from early exercise Company Program The Companys Program 1 sets forth that options granted under the Plan may be exercised as follows: (i) 20% per year, at the end of years 1 to 5, counted from the execution of the corresponding Stock Options Agreement, according to the terms and conditions established by the Board of Directors and the terms and conditions set forth in the Stock Options Agreements. Options granted under the terms of the other Companys Plans may be exercised as follows: (i) 10% per year, at the end of years 1 to 4; (ii) 20% per year, at the end of years 5 to 7, counted from execution of the corresponding Stock Options Agreement, according to the terms and conditions established by the Board of
318
Directors and under the terms and conditions set forth in the Stock Options Agreements. Controllers Plan Options granted under the terms of the Plan may be exercised as follows: (i) 10% per year, at the end of years 1 to 10, counted from the date of ENEVA s initial public offering, December 13, 2007, according to the terms and conditions set forth in the respective Stock Options Agreements. For each of the Plans referred to above, the Company determined a period of time in which the beneficiary may exercise the option. This period is one year, counted from the date of maturity of the option. The Beneficiary may not exercise the option before this period. (d) Determination of expected volatility
It is calculated using continuous returns of historical quotation of MPXE3 stock. (e) If any other characteristic of the option has been incorporated into the measurement of its fair value All characteristics of the option were mentioned in the previous items of this Reference Form.
319
13.10 - Information on pension plans provided to members of the board of directors and statutory officers
The Company does not provide a pension plan to its managers.
320
13.11 Maximum, minimum and average compensation of the board of directors, statutory board and fiscal council
Annual amounts
Statutory Executive Board 12/31/2012 No. of members Amount of highest compensation (Reais) Amount of lowest compensation (Reais) Average amount of compensation (Reais) 5.00 7,629,278.95 4,011,040.97 4,772,898.79 12/31/2011 5.00 10,447,471.83 5,403,586.68 6,448,672.76 12/31/2010 5.67 10,154,436.92 5,218,405.88 5,497,874.36 12/31/2012 11.50 3,112,107.97 70,000.00 705,102.90 Board of Directors 12/31/2011 8.92 4,567,588.20 151,623.37 1,109,175.01 12/31/2010 8.92 6,854,183.20 51,000.00 1,972,841.20 Fiscal Council 12/31/2012 3.00 29,800.67 29,800.67 29,800.67 12/31/2011 3.00 23,249.00 23,249.00 23,249.00
Note
Statutory Executive Board
Board of Directors 12/31/2012 For the calculation, we excluded the three board members who waived the compensation. In this case, the number used was 9.83 members.
Fiscal Council
321
13.12 - Compensation and indemnification mechanisms for management in the event of removal from office or retirement
The Company has no contractual arrangements, insurance policies or other instruments for structuring compensation or indemnification mechanisms for the managers in the event of removal from office or retirement.
322
13.13 - Percentage of total compensation held by management and members of the fiscal council who are parties related to the controlling shareholders
2010 Board of Directors Statutory Executive Board Fiscal Council 89% 0% -
2011 91% 32% -
2012 91% 0% -
323
13.14 - Compensation of management and members of the fiscal council, grouped by body, received for any reason other than the office they hold
There was no compensation payment to the Board of Directors or Executive Board members for any reason other than the position they hold.
324
13.15 - Compensation of management and members of the fiscal council recognized in income of controlling shareholders, whether direct or indirect, companies under common control and subsidiaries of the issuer
MMX/LLX/ OGX/EBX/OSX (1)
MMX/LLX/ OGX/EBX/OSX (1)
MMX/LLX/ OGX/OSX/CCX/EBX (1) 2012 3,798,624
2010 Board of Directors Executive Board Fiscal Council Other

(1) MMX Minerao e Metlicos S.A. LLX Logstica S.A. OGX Petrleo e Gs Participaes S.A. OSX Brasil S.A. EBX Investimentos Ltda. CCX Carvo
2011 4,693,307 -
60,365,501.59 -
da
Colmbia
S.A.
325
Clarifications about item 13.2 of the Reference Form The Company wishes to clarify that in notes 15 and 17 to the FiNANCIAL Statements of 2012 and 2011, respectively, the salary line refers to the sum total of commissions, direct and indirect benefits and social security contributions of the executive officers and directors of the Company and its subsidiaries. The difference between what is shown in this Reference Form and in the financial statements of the Company arises because the financial statements present the values assigned to the statutory and non-statutory managers of the Company and its subsidiaries, while item 13.2 of this Reference Form requires the submission of information concerning the Statutory Board only, as shown in the following table.
Ano Conselho de Administrao (A) 2010 2011 2012 445.000 515.000 715.000 Diretoria Estatutria Conselho Fiscal (B) 3.671.474 4.742.607 5.191.846 (C ) 69.748 89.402 Total Formulrio de Referncia (A) + (B) + (C ) 4.116.474 5.327.355 5.996.248 Demais Diretores da Total das Companhia e suas Demonstraes controladas Financeiras (D) (A) + (B) + (C ) + (D) 1.537.961 5.654.436 5.152.819 10.480.173 3.702.157 9.698.405
Year Board of directors Statutory Board Fiscal Council Total Reference Form Other Officers of the Company and its subsidiaries Total Financial Statements
In the case of share-based compensation, it is important to point out that the accounting practices adopted in Brazil and the IFRS, notably CPC 10 (R1) Share-based compensation (equivalent to IFRS 2), paragraph 12, require the stock option granted to employees, board members and executives to be shown at fair value, as disclosed by the Company in note 23 to its 2012 financial statements, and in note 25, Share-based payment plan, to the 2011 financial statements. In this note we showed two tables: the first containing the accumulated position showing the fair value of all options not yet exercised by the participants, and the second, showing the effect on income (expense) of the fair value of the options ascertained for the period disclosed. Also in the financial statements for 2012 and 2011 we presented information regarding the accumulated position under liabilities, respectively in notes 15 and 17 Related parties, item d. Therefore in order to cross the information shown in the reference form, regarding the stock options plans, we have to use the information in note 22, Share-based payment plans, in the table showing the income (expense) position ascertained in the period. The amounts shown in the table differ from those in the reference form
326
because the Companys financial statements show the amounts allocated to all company employees (including members of the Board of Directors), while the reference form shows only the amounts allocated to the members of the Board of Directors and the Statutory Executive Board. The amounts below are shown in millions of R$.
Conselho de Administrao (A) 2012 6,216 2011 9,379 2010 17,153 Board of Directors Statutory Board Total Reference Form Other employees Total Financial Statements
Diretoria Estatutria
Total Total Formulrio Demais Demonstraes de Referncia Colaboradores Financeiras (B) (A)+(B) (C) (A)+(B)+(C) 18,673 24,889 22,390 47,279 27,501 36,880 13,894 50,774 27,501 44,654 (44,654) 64,821
This notwithstanding, the Company agrees to inform in future disclosures, in the note on related parties, that the balances shown refer to the accumulated liability position of the fair values calculated on the options granted.
327
14.1 - Description of human resources
(a) Number of employees (total, by groups based on the activity performed and by geographic location) The table below shows the number of Company employees by administrative and operational positions.
On December 31, 2010 Administrative Operational Total 148 237 385 2011 119 461 580 2012 159 490 649 03/31/2013 165 482 647
The table below shows the number of Company employees by geographic location of our industrial complexes.
Location AMAPARI ENERGIA S/A MPX COMERCIALIZADORA COMBUSTIVEIS LTDA. MPX COMERCIALIZADORA DE ENERGIA LTDA. ENEVA SA MPX EON PARTICIPAES MPX PECM II E TRANSPORTADORA MINERIOS MPX TAUA ENERGIA SOLAR LTDA. PORTO DO PECM GERAO DE ENERGIA SA UTE MPX SUL ENERGIA LTDA. USINA TERM SEIVAL UTE PARNAIBA GERAO DE ENERGIA SA UTE PARNAIBA II GERAO DE ENERGIA SA UTE PORTO DO AU ENERGIA SA UTE PORTO DO ITAQUI GER DE ENERGIA SA MPX CHILE MPX COLOMBIA * MPX TAUA II ENERGIA SOLAR LTDA. UTE PARNAIBA IV GERAO DE ENERGIA S.A. TOTAL Amap Rio de Janeiro Rio de Janeiro Rio de Janeiro Rio de Janeiro Cear Cear Cear Rio Grande do Sul Rio Grande do Sul Maranho Maranho Rio de Janeiro Maranho Chile Colombia Cear Maranho 2010 29 112 14 100 6 4 58 12 50 385 2011 30 3 6 119 21 2 163 2 35 1 92 23 83 580 2012 36 3 10 88 58 31 2 208 1 1 77 29 1 88 16 1 2 649 03/31/2013 34 3 10 87 65 29 1 199 1 1 61 61 1 80 11 1 2 647
* MPX COLOMBIA is no longer part of the ENEVA group of companies
328
(b) Number of contractors (total, by groups based on the activity performed and by geographic location) The table below shows the number of Company contractors by administrative and operational positions.
On December 31, 2010 Administrative / General Services Legal Project Engineering Finance Total 17 2011 16 2012 11 03/31/2013 22
4 2 5 28
21 4 41
3 41 9 64
2 78 2 104
The table below shows the number of Company employees by geographic location of our industrial complexes.
Location AMAPARI ENERGIA S/A MPX COMERCIALIZADORA COMBUSTIVEIS LTDA. MPX COMERCIALIZADORA DE ENERGIA LTDA. ENEVA SA MPX EON PARTICIPAES MPX PECM II E TRANSPORTADORA MINERIOS MPX TAUA ENERGIA SOLAR LTDA. PORTO DO PECM GERAO DE ENERGIA SA UTE MPX SUL ENERGIA LTDA. USINA TERM SEIVAL UTE PARNAIBA GERAO DE ENERGIA SA UTE PARNAIBA II GERAO DE ENERGIA SA UTE PORTO DO AU ENERGIA SA UTE PORTO DO ITAQUI GER DE ENERGIA SA MPX CHILE MPX COLOMBIA * TOTAL Amap Rio de Janeiro Rio de Janeiro Rio de Janeiro Rio de Janeiro Cear Cear Cear Rio Grande do Sul Rio Grande do Su Maranho Maranho Rio de Janeiro Maranho Chile Colombia 28 1 2 41 79 2010 28 2011 41 2012 64 2 8 5 03/31/2013 1 0 0 6 6 16 0 4 0 0 21 24 0 21 5 104
* MPX COLOMBIA is no longer part of the ENEVA group of companies (c) Turnover rate
329
In 2010, the number of terminations in ENEVA and its subsidiaries was 31 people, or 8% of the total. In 2011, the number of terminations in ENEVA and its subsidiaries was 45 people, or 7.7% of the total. In 2012, the number of dismissals in ENEVA and its subsidiaries was 79 people, or 12.17% of the total. In March 31, 2013, the number of terminations in ENEVA and its subsidiaries was 71 people, or 8.04% of the total. (d) Companys exposure to labor liabilities and contingencies
For more information about our exposure to labor liabilities and contingencies, see item 4.3 of this Reference Form.
330
14.2
Relevant changes - Human resources
There has been no relevant changes with respect to figures disclosed in item 14.1 above.
331
14.3 - Description of employee compensation policy
(a)
Salary and variable compensation policy
The Companys compensation strategy uses the market as a reference, taking into account the main competitors and largest companies in Brazil, seeking to comply with best practices and ensuring its competitiveness. The main purpose is to recognize the performance of its professionals as the company evolves, as per the strategic planning defined and aligned with the return to shareholders in the short, medium and long term. (b) Benefit policy
The benefits provided by the Company include Health and Dental Plan that are extend to their families, in addition to Life Insurance, Meal Voucher, Food Voucher and Transportation Ticket. (c) characteristics of management employees share-based compensation plans of non-
i) Groups of beneficiaries: The members of the Board of Directors, officers, managers, consultants and employees of the Company, as well as other companies belonging to the ENEVA Group, are eligible to participate in the Stock Options Plan of the Company. ii, iii, iv) The characteristics of the share-based compensation plans for employees are identical to those of the share-based compensation plans for managers, in particular to those described in (b), (c) and (d) of sub-item 13.4 above. v) Number of shares committed to the Program: 11,550,599 common shares.
332
14.4 - Description of relationship between issuer and unions
The Collective Labor Agreement and Profit Sharing Agreement were unanimously approved by the Companys employees, aiming at improving working conditions in ENEVA . ENEVA values the commitment and transparency between its employees and the category union (SINTERGIA Union of Workers in of Power Energy Companies of Rio de Janeiro and Region), where dialogue flows respectfully and effectively, maintaining a policy of permanent negotiation with the representatives of the employees of the Company.
333
15.1 / 15.2 - Shareholder structure
Shareholder Shareholders Individual Taxpayers Register (CPF) / National Corporate Taxpayers Register (CNPJ) Number of common shares (Units) Breakdown by classes of shares (Units) Share Class BNDES Participaes S.A. 00.383.281/0001-09 72,650,210 DD BRAZIL HOLDINGS S..R.L 15.543.256/0001-12 266,269,556 Centennial Asset Brazilian Equity Fund LLC 12.055.153/0001-15 1,822,065 Eike Fuhrken Batista 664.976.807-30 145,704,988 Centennial Asset Mining Fund LLC 07.732.392/0001-22 20,208,840 OTHER 195,868,810 TREASURY SHARES Date of last change: 0 0.000000% 0 0.000000% 0 0.000000% 27.879324% 0 0.000000% 195,868,810 27.879324% North American 2.876603% No 0 Yes 0.000000% 10/21/2013 20,208,840 2.876603% Brazilian-MG 20.740201% Yes 0 Yes 0.000000% 10/21/2013 145,704,988 20.740201% North American 0.259360% No 0 Yes 0.000000% 10/21/2013 1,822,065 0.259360% Luxembourgish 37.901819% Yes 0 Yes 0.000000% 10/21/2013 266,269,556 37.901819% Brazilian 10.341307% No 0 No 0.000000% 10/21/2013 72,650,210 10.341307% Qty. of shares (Units) % Shares Nationality-State % Common shares Party to shareholders agreement Number of preferred shares (Units) Controlling shareholder % Preferred Shares Last change Total qty. of shares (Units) % Total shares
334
Shareholder Shareholders Individual Taxpayers Register (CPF) / National Corporate Taxpayers Register (CNPJ) Number of common shares (Units) Breakdown by classes of shares (Units) Share Class TOTAL Qty. of shares (Units) % Shares Nationality-State % Common shares Party to shareholders agreement Number of preferred shares (Units) Controlling shareholder % Preferred Shares Last change Total qty. of shares (Units) % Total shares
702,524,469
100.000000%
0.000000%
702,524,69
100.000000%
335
15.1 / 15.2 Shareholding structure

PARENT COMPANY / INVESTOR SHAREHOLDER Shareholders CPF / CNPJ Breakdown of shares (Units) Number of common shares (Units)
PARENT COMPANY / INVESTOR
Nationality-State
Party to shareholders agreement
Controlling shareholder
Last change
% Common shares
Number of preferred shares (Units)
% Preferred Shares
Total qty. of shares (Units)

Shareholders CPF / CNPJ
% Total shares
Share capital ownership
Centennial Asset Brazilian Equity Fund LLC Centennial Asset Mining Fund LLC 07.732.392/0001-22 1.000 Share Class TOTAL OTHER 0 TOTAL 1,000 100.000000 0 0.000000 0.000000 0 0.000000 North American 100.000000 Qty. of shares (Units) 0 % Shares 0.000000 No 0 Yes 0.000000
12.055.153/0001-15
07/21/2010 1,000 100.000000
0.000000
1,000
100.000000
336

PARENT COMPANY / INVESTOR Shareholder Shareholders CPF / CNPJ Breakdown of shares (Units) Number of common shares (Units)
Nationality-State
Last change
% Common shares
% Preferred Shares

% Total shares
Centennial Asset Mining Fund LLC Eike Fuhrken Batista 664.976.807-30 1,000 Share Class TOTAL OTHER 0 TOTAL 1,000 100.000000 0 0.000000 0.000000 0 0.000000 Brazilian-MG 100.000000 Qty. of shares (Units) 0 % Shares 0.000000 No 0 Yes 0.000000
07.732.392/0001-22
December 10, 2010 1,000 100.000000
0.000000
1,000
100.000000
337
Nationality-State
Last change
% Common shares
% Preferred Shares

% Total shares
DD Brazil Holding S. R.L. Dutchdelta Finance S. R.L. 00.000.000/0000-00 400,500 Share Class TOTAL OTHER 0 TOTAL 400,500 100.000000 0 0.000000 0.000000 0 0.000000 Luxembourgish 100.000000 Qty. of shares (Units) 0 % Shares 0.000000 No 0 Yes 0.000000
00.000.000/0000-00
May 15, 2012 400,500 100.000000
0.000000
400,500
100.000000
338

Nationality-State
Last change
% Common shares
% Preferred Shares

% Total shares
Dutchdelta Finance S. R.L. E.ON Finanzanlagen GmbH 00.000.000/0000-00 41,828,930 Share Class TOTAL OTHER 0 TOTAL 1,045,723,250 100.000000 0 0.000000 0.000000 0 0.000000 German 4.000000 Qty. of shares (Units) 0 % Shares 0.000000 No 0 Yes 0.000000
00.000.000/0000-00
June 24, 2009 41,828,930 4.000000
0.000000
1,045,723,250
100.000000
339

Nationality-State
Last change
% Common shares
% Preferred Shares

% Total shares
E.ON Finanzanlagen GmbH E.ON SE German 5 Share Class TOTAL OTHER 0 TOTAL 5 100.000000 0 0.000000 5 100.000000 0.000000 0 0.000000 0 0.000000 100.000000 Qty. of shares (Units) 0 % Shares 0.000000 No 0 Yes 0,000000 November 26, 2012 5 100.000000
340
15.3 - Capital distribution

Date of last meeting / Date of last change Number of Individual shareholders (Units) Number of corporate shareholders (Units) Number of institutional investors (Units) October 21, 2013 1,894 245 303
Outstanding shares
Outstanding shares correspond to all issuers shares except for those of the controlling shareholder, persons connected to the controlling shareholder, managers of the issuer and treasury shares
Number of common shares (Units) Number of preferred shares (Units) Total
267,878,165 0 267,878,165
38.130795% 0.0000000% 38.130795%
341
15.4 - Shareholders organizational chart
Since the presentation of this information is optional, the Company chose at this time not to disclose the organizational chart of its direct and indirect controlling shareholders.
342
15.5 - Shareholders agreement filed at issuers head office or to which the controlling shareholder is a party
Parties (i) DD Brazil Holdings S..R.L. (E.ON); (ii) Eike Fuhrken Batista (EBX and, jointly with E.ON, the Parties); (iii) E.ON SE (Guarantor), as guarantor; and (iv) ENEVA S.A. (ENEVA ), as consenting party. May 27, 2013.
Date of the agreement Period of effectiveness
The Agreement shall come into effect on May 29, 2013, remain in force for as long as the Parties are shareholders of the Company and may be terminated in the following events, among others: (i) if the Parties mutually agree, in writing, to term inate the Shareholders Agreement; (ii) if E.ON and/or EBX ceases to hold any shares issued by the Company; or (iii) by the Party holding the majority interest, if the interest held by E.ON or EBX in the Companys capital stock becomes lower than 15% of ENEVA s capital stock. The Parties agree (i) to exercise their respective votes at general meetings of the Company; (ii) to ensure that the company always exercises its vote at general meetings of its subsidiaries; and (iii) to ensure that their representatives in the management bodies of the Company and its subsidiaries exercise their right to vote in the long-term interests of the Companys business, with the conditions of independence and equity between the parties being respected. Power of control over the Company is exercised jointly by E.ON and EBX, who jointly hold more than 50% of the voting capital stock of the Company, with the terms of the power of control being governed by the Agreement. Before the holding of any Shareholders Meeting or Board of Directors Meeting of the Company, E.ON and EBX should hold a prior meeting to agree on how their votes or their representatives votes will be directed, in accordance with th e terms of this Agreement. If E.ON shall acquire a number of voting shares of EBX that increase its interest to more than 50% and the terminate the Agreement, E.ON shall be obliged to make a public offer for the acquisition of the shares of the Company, pursuant to the Corporate Law.
Details of clauses governing exercise of the right to vote and power of control
Details of clauses relating to the appointment of managers
The Board of Directors shall consist of eight (8) members, two (2) of whom shall be independent, with the possibility to increase the number up to ten (10) if BNDES, a shareholder of the Company, and the minority shareholders shall resolve to elect new members pursuant to article 141, paragraph 4 of the Corporate Law. The members of the Board of Directors shall be elected by the general meeting, with E.ON and EBX having the right to appoint three (3) members each. The independent members shall be appointed by mutual accord between E.ON and EBX. The members of the Board of Directors shall be professionals with proven qualifications and experience. BNDES will be entitled, but not obliged, to appoint one (1) additional member to the Board of Directors, provided that it holds, at least, 10% of the Companys capital stock. The member appointed by BNDES will be considered an independent director and will be appointed in accordance with article 141, paragraph 4, of the Corporate Law. If any shareholder other than E.ON, EBX and BNDES intends to appoint a member for the Board of Directors, under the terms of article 141 of the Corporate Law, the number of independent members should be increased by one (1) member, in order to accommodate the director appointed by the non-controlling shareholder, and this member appointed by the non-controlling shareholder then elected should be considered an independent director. E.ON and EBX should never require the application of article 141 of the Corporate Law. If the election of members of the Board of Directors at a Shareholders Meeting is made by multiple vote and/or the members of the Board of Directors are elected in accordance with article 141, paragraph 4 or 5 of the Corporate Law, E.ON and EBX should coordinate between each other and vote at such Shareholders Meeting, as it may be necessary or required for the Shareholders to elect the highest possible number of members of the Board of Directors appointed for election.
Details of the clauses relating to
The Parties undertake not to transfer their shares except as mutually agreed between them and only in the circumstances described in the Agreement.
343
transfer of shares and preference in acquiring them
The Parties undertake not to transfer their shares to third parties in a number that causes E.ON and EBX to hold less than 15% of EBXs capital stock for a period of five (5) years from the date on which the Agreement came into force (the Lock-up). The Lock-up shall not be applicable to EBX in the event that a public offer of acquisition of shares of the Company is made by E.ON, except in the case of a public offer of acquisition of control under which the Company continues to fulfill the free float requirements for its listing level on the BM&FBOVESPA Novo Mercado. In spite of the Lock-up, the Parties may at any time and on giving advance notification in writing to the other party, transfer their shares in whole or in part to their subsidiaries, provided that: (i) each subsidiary is, directly or indirectly, wholly owned by E.ON or EBX; (ii) E.ON or EBX guarantees all obligations of this wholly-owned subsidiary under the terms of the Agreement; (iii) a legal binding commitment is established for the shares to be transferred back to E.ON or EBX before the whollyowned subsidiary ceases to be a wholly-owned subsidiary of E.ON or EBX. E.ON or EBX will provided each other, as applicable, with information that may be reasonably requested to verify whether the wholly-owned subsidiary ceased to be a wholly-owned subsidiary of the shareholder that is transferring its shares; or (iv) the wholly-owned subsidiary will unconditionally adhere to the Agreement, and the instrument of adherence is filed at the Company together with the Agreement. Except for any transfer permitted under the terms of the Agreement, if E.ON or EBX intends to transfer the totality or part of its shares issued by the Company to third parties, by means of a series of transactions, the other shareholder shall have the preemptive rights to acquire these shares, in accordance with the provisions of the Agreement. The shareholder intending to dispose of its shares must notify, in writing, the other shareholder of the intention to transfer its shares in the Company, informing the number of shares subject to such proposal of sale and to the terms under which a purchase offering was made, including the price to be paid for each share and the payment conditions. The shareholder receiving the sales proposal will be entitled to exercise its preemptive right exclusively for all, and not less than all, shares held by the shareholder intending to transfer such shares, upon delivery of written acceptance notice within fifteen (15) Business Days after delivery of sales proposal notice. If the shareholder that received the sales proposal does not exercise its exercise of the preemptive right, the shareholder disposing of its shares will be free to sell its shares to third parties within ninety (90) days. Any transfer of shares in the context of a secondary sale, as part of any initial public offering of the Companys shares, will be subject to the preemptive right procedure set forth in the Agreement.
Details of clauses restricting or binding the right to vote of members of the board of directors
Not applicable.
344
15.6 - Relevant changes in equity interests held by members of the controlling group and by the issuers management
Relevant changes in the shareholdings of members of the control group and managers during the last three financial years and the current financial year were described in item 6.5 of this Reference Form.
345
The Company informs that, regarding item 15.1 and 15.2 above, its indirect controlling shareholder E.ON SE does not have controlling shareholders, i.e., its controlling interest is widely held in the market, and that, for this reason, its corporate structure has not been presented. Additionally, the Company informs that the main resolutions of E. ON SE are approved at the shareholders meeting.
346
16.1 - Description of issuers rules, policies and practices regarding transactions with related parties
As provided for in the Companys Corporate Governance Policy, the Companys transactions wi th related parties should be based on market conditions, strictly on an arms length basis, according to applicable legislation and with the Best Corporate Governance practices, including those provided for in the Novo Mercado Regulations, ensuring transparency and full respect for the best interest of shareholders, investors, employees and other stakeholders. In addition, as a good Corporate Governance practice, the Company submits for approval of its Board of Directors any contracting and business involving related parties. Moreover, the Board of Directors has authority to prevent and manage situations involving conflict of interests, ensuring that the interest of the company always prevails. As also provided for in the Corporate Governance Policy, in the event of a conflict involving the interests of the Company and those of any shareholder or management member in relation to a particular matter, such conflict of interests or the existence of a particular interest should be disclosed by such shareholder or management member, who will declare impediment to participating in the discussions and resolutions related to the matter. In addition, as provided for by law, the management members of the Company may not: (i) perform any act of liberality at the expense of the Company; (ii) receive, by virtue of their offices, any kind of direct or indirect personal advantage from any third party, without authorization, as provided for in its bylaws or granted by the general meeting; (iii) borrow funds or properties from the company, or use in their own benefit properties, services or credit of a company in which they are interested or owned by third parties, without authorization, as provided for in its bylaws or granted by the General Meeting; and (iv) engage in any transaction in which they have an interest conflicting with the interests of the company, or participate in resolutions related thereto taken by other directors. The disclosure of the Companys transactions with related parties is made in its interim finan cial statements, according to applicable law.
347
16.2 - Information on transactions with related parties
Related party
Transaction date
Amount involved (in Real)
Remaining balance
Amount (in Real)
Term
Loan or other type of debt No
Interest rate charged
MPX Comercializadora de Energia Ltda. Relationship with the issuer subject-matter of the agreement Guarantees and insurance Termination or dissolution Nature of and reason for the transaction UTE MPX Sul Energia S.A. Relationship with the issuer subject-matter of the agreement Guarantees and insurance Termination or dissolution Nature of and reason for
01/07/2011 Subsidiary
R$248,000.00
R$248,000.00 payable on 03/31/2013
Impossible to assess
Indefinite
0,000000
Operational and financial cost sharing agreement. N/A N/A 07/01/2011 Subsidiary Operational and financial cost sharing agreement. N/A N/A Administrative efficiency. R$140,000.00 R$140,000.00 payable on 03/31/2013 Impossible to assess Indefinite No 0,000000
348
Related party
Transaction date
Remaining balance
Amount (in Real)
Term
Loan or other type of debt
the transaction UTE Porto do A Gerao de Energia S.A. Relationship with the issuer subject-matter of the agreement Guarantees and insurance Termination or dissolution Nature of and reason for the transaction MPX Comercializadora de Combustveis Ltda. Relationship with the issuer subject-matter of the agreement Guarantees and insurance Termination or dissolution Nature of and reason for the transaction 01/07/2011 Subsidiary Operational and financial cost sharing agreement. N/A N/A Administrative efficiency. 01/07/2011 Subsidiary Operational and financial cost sharing agreement. N/A N/A Administrative efficiency. R$123,000.00 R$123,000.00 payable on 03/31/2013 Impossible to assess Indefinite No 0,000000 R$138,000.00 R$138,000.00 payable on 03/31/2013 Impossible to assess Indefinite No 0,000000
349
Related party
Transaction date
Remaining balance
Amount (in Real)
Term
Loan or other type of debt No
Seival Participaes S.A. Relationship with the issuer subject-matter of the agreement Guarantees and insurance Termination or dissolution Nature of and reason for the transaction EBX Holding Ltda. Relationship with the issuer subject-matter of the agreement Guarantees and insurance Termination or dissolution Nature of and reason for the transaction Pecm Operao e Manuteno de Energia S.A.
01/07/2011 Subsidiary
R$52,000.00
R$52,000.00 payable on 03/31/2013
Indefinite
0,000000
Operational and financial cost sharing agreement. N/A N/A Administrative efficiency. 01/07/2011 Other related parties Operational and financial cost sharing agreement. N/A N/A Administrative efficiency. 12/04/2012 R$1,333,333.33 R$1,458,000.00 payable on 03/31/2013 R$1.133.333,33 12/31/2013 Yes 0,000000 R$1,134,000.00 R$1,134,000.00 payable on 03/31/2013 R$1,134,000.00 Indefinite No 0,000000
350
Related party
Transaction date
Remaining balance
Amount (in Real)
Term
Relationship with the issuer subject-matter of the agreement Guarantees and insurance Termination or dissolution Nature of and reason for the transaction Porto do Pecm Gerao de Energia S.A. Relationship with the issuer subject-matter of the agreement Guarantees and insurance Termination or dissolution Nature of and reason for the transaction MPX E.ON Participaes S.A. Relationship with the issuer
Subsidiary Loan agreement. N/A N/A Acquisition of spare parts for conveyor belt. Interest rate charged: 110% of CDI. 09/24/2012 Subsidiary Loan agreement. N/A N/A Interest rate charged: 105% of CDI per year. 01/07/2011 Subsidiary R$8,205,000.00 R$8,205,000.00 payable on 03/31/2013 Impossible to assess Indefinite No 0,000000 R$150,000,000.00 R$155,940.00 payable on 03/31/2013 150,000,000,00 30/09/2013 Yes 0,000000
351
Related party
Transaction date
Remaining balance
Amount (in Real)
Term
subject-matter of the agreement Guarantees and insurance Termination or dissolution Nature of and reason for the transaction Paranaba Participaes S.A. Relationship with the issuer subject-matter of the agreement Guarantees and insurance Termination or dissolution Nature of and reason for the transaction Seival Sul Minerao Ltda.
Operational and financial cost sharing agreement. N/A N/A Administrative efficiency. 01/07/2011 Subsidiary Operational and financial cost sharing agreement. N/A N/A R$66,000.00 R$66,000.00 payable on 03/31/2013 Impossible to assess Indefinite No 0,000000
Administrative efficiency
01/07/2011 R$1,000.00 R$1,000.00 payable on 03/31/2013 Impossible to assess Indefinite No 0,000000
Relationship with the issuer subject-matter of the
Subsidiary Operational and financial cost sharing agreement.
352
Related party
Transaction date
Remaining balance
Amount (in Real)
Term
agreement Guarantees and insurance Termination or dissolution Nature of and reason for the transaction UTE Paranba II Gerao de Energia S.A. Relationship with the issuer subject-matter of the agreement Guarantees and insurance Termination or dissolution Nature of and reason for the transaction Mabe Construo e Administrao de Projetos Ltda. Relationship with the issuer subject-matter of the agreement N/A N/A Administrative efficiency 01/07/2011 Subsidiary Operational and financial cost sharing agreement. N/A N/A Administrative efficiency 07/01/2011 R$369,000.00 R$369,000.00 receivable on 03/31/2013 Impossible to assess Indefinite No 0,000000 R$32,000.00 R$32,000.00 receivable on 03/31/2013 Impossible to assess Indefinite No 0,000000
Subsidiary Operational and financial cost sharing agreement.
353
Related party
Transaction date
Remaining balance
Amount (in Real)
Term
Guarantees and insurance Termination or dissolution Nature of and reason for the transaction MPX Investimentos S.A.
N/A N/A Administrative efficiency 01/07/2011 R$11,000.00 R$11,000.00 receivable on 03/31/2013 Impossible to assess Indefinite No 0,000000
Relationship with the issuer subject-matter of the agreement Guarantees and insurance Termination or dissolution Nature of and reason for the transaction EBX Holding Ltda. Relationship with the issuer subject-matter of the agreement Guarantees and insurance
Subsidiary Operational and financial cost sharing agreement. N/A N/A Administrative efficiency 07/01/2011 Other related parties Operational and financial cost sharing agreement. N/A R$6,351,000.00 R$6,351,000.00 payable on 03/31/2013 Impossible to assess Indefinite No 0,000000
354
Related party
Transaction date
Remaining balance
Amount (in Real)
Term
Termination or dissolution Nature of and reason for the transaction MPX Comercializadora de Energia Ltda. Relationship with the issuer subject-matter of the agreement Guarantees and insurance Termination or dissolution Nature of and reason for the transaction Copelmi Minerao Ltda. Relationship with the issuer subject-matter of the agreement Guarantees and insurance Termination or dissolution Nature of and reason for
N/A Administrative Efficiency 03/31/2011 Subsidiary Agreement for reimbursement of financial losses from energy purchase and sale transactions. N/A N/A Financial Reimbursement 01/07/2011 Other subsidiaries Operational and financial cost sharing agreement. N/A N/A Administrative Efficiency R$7,000.00 R$7,000.00 payable on 12/31/2013 Impossible to assess Indefinite No 0,000000 7,974,000.00 R$145,000.00 payable on 03/31/2013 Impossible to assess Indefinite No 0,000000
355
Related party
Transaction date
Remaining balance
Amount (in Real)
Term
the transaction MPX E.ON Participaes S.A. Relationship with the issuer subject-matter of the agreement Guarantees and insurance Termination or dissolution Nature of and reason for the transaction MPX Tau Energia Solar Ltda. Relationship with the issuer subject-matter of the agreement Guarantees and insurance Termination or dissolution Nature of and reason for the transaction Oral agreement for reimbursement of expenses Subsidiary Reimbursement of costs incurred for implementation of projects. Administrative Efficiency R$400,000.00 R$400,000.00 payable on 03/31/2013 Impossible to assess Indefinite No 0,000000 01/07/2011 Subsidiary Operational and financial cost sharing agreement. R$3,113,000.00 R$3,113,000.00 payable on 03/31/2013 Impossible to assess Indefinite No 0,000000
356
Related party
Transaction date
Remaining balance
Amount (in Real)
Term
Loan or other type of debt NO
Porto do Pecm Gerao de Energia S.A. Relationship with the issuer subject-matter of the agreement Guarantees and insurance Termination or dissolution Nature of and reason for the transaction Porto do Pecm Transportadora de Minrios S.A. Relationship with the issuer subject-matter of the agreement Guarantees and insurance Termination or dissolution Nature of and reason for the transaction
07/11/2011 Joint Subsidiary
R$5,200,000.00
R$579,000.00 payable on 03/31/2013
R$5,200,000.00
Indefinite
0,000000
Asset sharing agreement. N/A N/A Operational optimization 01/01/2012 7,800,000.00 R$47,000.00 payable on 03/31/2013 Impossible to assess 06/30/2016 No 0,000000
Subsidiary Service provision of port operation of coal discharge and carriage.
357
MMX Minerao e Metlicos S.A.
04/26/2012
0.00
N/A
R$102.00/MWh
Until the fulfillment of all the contractual obligations
NO
0.000000
Relationship with the issuer Subject-matter of the agreement
Other related parties Power supply agreement (Energy Contracted: January 1, 2014 to September 30, 2014, 45MWm; January 10, 2014 to December 31, 2014, 120MWm; January 1, 2015 to March 31, 2015, 168MWm; April 1, 2015 to December 31, 2015, 190MWm; January 1, 2016 to December 31, 2018, 200MWm), entered into by and between MMX Minerao e Metlicos S.A. and MPX Comercializadora de Energia Ltda., ENEVA being the intervening party. Bank Letter of Guarantee or Performance Bond The possibility exists, in cases of: (i) Breach of obligation by any of the Parties not remedied within 30 days of notice (ii) Judicial or Extrajudicial Reorganization of any of the Parties (iii) Cancellation of agreement registration with CCEE (iv) Absence of contracted energy registration with CCEE, by seller, twice (v) Agreement between the Parties
Guarantees and insurance Termination or dissolution
Nature of and reason for the transaction SIX Automao S.A.
Power Supply Agreement 03/20/2012 R$304,810.00 R$0.00 R$304,810.00 12 months after start up of the last thermoelectric plant NO 0.000000
Relationship with the issuer subject-matter of the agreement Guarantees and insurance Termination or dissolution
Other related parties Agreement for implementation of a supervisory system for viewing the performance indicators of UTE Porto do Itaqui, Porto do Pecm, MPX Pecm II, Amapari, Tau and Parnaba Complex plants. N/A The possibility exists (e.g. breach of obligations, bankruptcy application, reorganization, dissolution or liquidation by sending a notice with 30 days in advance).
358
Nature of and reason for the transaction MMX Minerao e Metlicos S.A.
Services Agreement 01/01/2011 0.00 0.00 Impossible to assess 3 years renewable for successive periods of 3 years NO 0.000000
Other related parties Operational and financial cost sharing agreement.
N/A (i) mutual agreement between the Parties; (ii) breach of relevant contractual terms; (iii) bankruptcy or filing for judicial reorganization; (iv) if the parties cease to be part of the same economic group; or (v) acts of God or force majeure lasts longer than 120 days Administrative efficiency 01/01/2011 0.00 0.00 Indefinite 3 years renewable for successive periods of 3 years NO 0.000000
Nature of and reason for the transaction OSX Brasil S.A.
N/A (i) mutual agreement between the Parties; (ii) breach of relevant contractual terms; (iii) bankruptcy or filing for judicial reorganization; (iv) if the parties cease to be part of the same economic group; or (v) acts of God or force majeure lasts longer than 120 days Administrative efficiency 09/01/2010 0.00 0.00 Impossible to assess 3 years renewable for successive periods of 3 years NO 0.000000
Nature of and reason for the transaction EBX Holding Ltda.
359
N/A (i) mutual agreement between the Parties; (ii) breach of relevant contractual terms; (iii) bankruptcy or filing for judicial reorganization; (iv) if the parties cease to be part of the same economic group; or (v) acts of God or force majeure lasts longer than 120 days Administrative efficiency 02/01/2011 0.00 0.00 R$642,865.92 35 years NO 0.000000
Nature of and reason for the transaction REX Empreendimentos Imobilirios S.A. Relationship with the issuer subject-matter of the agreement Guarantees and insurance Termination or dissolution
Other related parties Area lease agreement of MPX Pecm II Project.
Guarantee by ENEVA S.A. / Mortgage of real property by REX (i) Bankruptcy or Judicial Reorganization (ii) Breach of obligation by any of the Parties not remedied within 30 days of notice
Nature of and reason for the transaction
Lease Agreement
AVX Taxi Areo Ltda.
04/26/2011
R$2,538,348.00 (annual cost)
n/a
R$2,538,348.00 (annual cost)
Indefinite
NO
0.000000
Other related parties Aircraft Charter Services Agreement.
There is no guarantees or bonds forecast. The agreement may be terminated in the following cases, regardless of notification by any of the parties: (i) bankruptcy, receivership or dissolution of
360
either party being decreed; and (ii) by extraordinary, unpredictable or uncontrollable events, beyond the will of the parties, including hypothesis of economic balance loss of the contracting Nature of and reason for the transaction REX Empreendimentos Imobilirios Ltda. Aircraft Charter Services Agreement. 07/08/2009 R$1,019,045.31 N/A R$1,019,045.31 plus variable cost For the term of the authorization of Porto do Pecm to act as a power generator. No 0.000000
Other related parties Purchase Commitment Agreement of the real property in which UTE Porto do Pecm is located.
N/A
(i) In the event of unreasonably termination of the Lease by Porto do Pecm
(ii) In the event of termination of the Lease by the breach of obligations by Porto do Pecm (iii) Expropriation of real property by the Public Authorities Nature of and reason for the transaction REX Empreendimentos Imobilirios Ltda. Relationship with the issuer subject-matter of the agreement Guarantees and insurance Termination or dissolution Purchase Commitment Agreement of the real property 07/08/2009 R$228,340.92 per year 0.00 R$228,340.92 per year 35 years No 0.000000
Other related parties Lease of the real property in which UTE Porto do Pecm is located, entered into by and between Porto do Pecm and REX
ENEVA Guarantee, in proportion to its interest. (i) Just Cause, at the discretion of Pecm
(ii) Breach of obligation by any of the Parties not remedied within 30 days of notice Nature of and reason for the Lease Agreement
361
transaction OGX Maranho Petrleo e Gs S.A. 12/18/2012 R$5.26 per MMBTU 0.00 R$5.26 per MMBTU 15 years from the startup of UTE Parnaba No 0.000000
Other related parties Natural Gas Supply Agreement for thermoelectric generation purposes by UTE Parnaba Gerao de Energia S.A.
Corporate guarantee of ENEVA S.A. In the cases of (i) non-payment of collection document; (ii) statement of insolvency, voluntary bankruptcy, bankruptcy, judicial or extrajudicial reorganization, judicial or extrajudicial liquidation and/or intervention of any competent governmental authority, (iii) non-compliance with contractual obligations. Gas Supply Agreement 12/18/2012 R$110,810,529.11/year 49,299,000.00 R$110,810,529.11/ year 15 years from the startup of UTE Parnaba No 0.000000
Nature of and reason for the transaction OGX Maranho Petrleo e Gs S.A.
Other related parties Lease Agreement of capacity volume of the UTG, entered into by and between OGX Maranho Petrleo e Gs S.A., Petra Energia S.A. and UTE Parnaba Gerao de Energia S.A., for the exclusive purpose of processing of natural gas from production fields for consumption by UTE Parnaba. Guarantee of UTE Parnaba In the cases of: (i) breach of relevant contractual obligation, (ii) statement of bankruptcy, insolvency, judicial or extrajudicial reorganization or liquidation, (iii) transfer of said contract or any rights or obligations, (iv) in the event of termination of CCEARs with no fault of arrendaria, (v) in the event of termination of the Gas Sale Agreement with no fault of the lessee, (vi) acts of God or force majeure (vii) in the case of substantial inaccuracy of any statement provided for in the agreement. UTG Lease Agreement. 04/26/2012 N/A N/A N/A Until the fulfillment of all contractual No 0.000000
Nature of and reason for the transaction MMX Minerao e Metlicos S.A.
362
obligations or in the event of noncompliance of requirements for implementation of self-production structure up to January 1, 2019. Relationship with the issuer subject-matter of the agreement Guarantees and insurance Termination or dissolution Other related parties Sale of energy as guarantee for self-production structure.
Bank Letter of Guarantee or Performance Bond, when applicable (i) Termination of the Commitment Instrument
(ii) Agreement between the Parties (iii) Full compliance with the obligations Nature of and reason for the transaction LLX Au Operaes Porturias S.A. Energy Sale Agreement as guarantee for self-production structure. 09/24/2012 0.00 0.00 Impossible to assess 3 years, automatically and renewable for an equal period No 0.000000
Other related parties Administrative activities sharing Agreement related to environmental management between UTE Porto do Au and LLX Au.
N/A (i) mutual agreement between the Parties; (ii) breach of relevant contractual terms; (iii) bankruptcy or filing for judicial reorganization; (iv) if the parties cease to be part of the same economic group; or (v) acts of God or force majeure lasts longer than 120 days. Administrative efficiency
Nature of and reason for the
363
transaction LLX Au Operaes Porturias S.A. Relationship with the issuer subject-matter of the agreement Guarantees and insurance Termination or dissolution 12/24/2012 R$194,220.00 N/A R$194,220.00 4 successive years out of 3 No 0.000000
Other related parties Environmental obligations sharing agreement as a result of rent of Porto do Au area.
n/a (i) mutual agreement between the Parties; (ii) breach of relevant contractual terms; (iii) bankruptcy or filing for judicial reorganization; (iv) if the parties cease to be part of the same economic group; or (v) acts of God or force majeure lasts longer than 120 days. Sharing Agreement 11/24/2010 R$12,390,708.00 (paid in 2012) 0.00 R$12,390,708.00 (paid in 2012) 35 years from the date of authorization to be granted by ANEEL to ENEVA for the operation of UTE Porto do Au No 0.000000
Nature of and reason for the transaction LLX Au Operaes Porturias S.A.
Relationship with the issuer subject-matter of the agreement
Other related parties Lease Agreement between LLX Au Operaes Porturias S.A., UTE Porto do Au Energia S.A. and ENEVA S.A. Rental Agreement (Agreement) of land intended for implementation of Phase I MPX Au e Phase II MPX Au Projects at Super Porto do Au, with a total area of 224.38 hectares. The following provisions were defined: Initially, the leased area will have 74.79 hectares. With respect to the remaining 149.59 hectares, LLX granted to ENEVA a lease option in which ENEVA may exercise 74.79 hectares up to January 2, 2013 and the remaining 74.79 hectares up to January 2, 2013, having respected the right of first refusal in case of land disposal to third parties by LLX in accordance with art. 27 et seq. of Law No. 8,245/91. N/A Breach of contracted obligations, bankruptcy or filing for judicial or extrajudicial reorganization of the parties and non-performance of the agreement due to acts of God or force majeure for more than 90 days.
Guarantees and insurance Termination or dissolution
364
Nature of and reason for the transaction
Lease Agreement
REX Inversiones S.A.
07/25/2008
0.00
n/a
Payments should occur only after the entering into of project financing agreements
50 years
No
0.000000
Other related parties Lease Agreement of Porto de Castilla area.
N/A Breach of contracted obligations, bankruptcy or filing for judicial or extrajudicial reorganization of the parties and non-performance of the agreement due to acts of God or force majeure for more than 90 days. Lease Agreement 03/08/2012 n/a n/a n/a 30 years No 0.000000
Nature of and reason for the transaction OGX Maranho Petrleo e Gs S.A. Relationship with the issuer subject-matter of the agreement Guarantees and insurance Termination or dissolution
Other related parties Free Lease Agreement between UTE Parnaba Gerao de Energia S.A. and OGX Maranho relating to the portion of 18.7 ha of real property at Parnaba Complex. n/a In the cases of: (i) agreement between the parties, (ii) breach of contractual obligations, and (iii) bankruptcy, filing for or grant of judicial or extrajudicial reorganization and judicial or extrajudicial liquidation of any of the parties. Free Lease Agreement 01/01/2011 0.00 0.00 R$185,725.68 received by ENEVA in 2012 3 years, renewed automatically No 0.000000
Nature of and reason for the transaction LLX Logstica S.A.
365
n/a (i) mutual agreement between the Parties; (ii) breach of relevant contractual terms; (iii) bankruptcy or filing for judicial reorganization; (iv) if the parties cease to be part of the same economic group; or (v) acts of God or force majeure lasts longer than 120 days. Administrative efficiency 01/01/2011 0.00 0.00 R$376,347.37 3 years, renewed automatically No 0.000000
n/a (i) mutual agreement between the Parties; (ii) breach of relevant contractual terms; (iii) bankruptcy or filing for judicial reorganization; (iv) if the parties cease to be part of the same economic group; or (v) acts of God or force majeure lasts longer than 120 days. Administrative efficiency 03/01/2011
Nature of and reason for the transaction EBX Holding Ltda.
R$1,803,000.00, paid in
2012
0.00
R$1,803,000.00, paid in 2012
5 years
No
0.000000
Other related parties Lease Agreement of the real property for Companys head -offices
Surety in the amount of 3 rents. If lessees, always taken as a whole, choose to return the real property leased or give cause to termination prior to the end of the term of such lease, by sending written notice with 180 days in advance. Lessor will be entitled to the receipt, proportionally, in accordance with the fulfilled term of the agreement, fine, as provided for in said agreement.
366
Nature of and reason for the transaction Minera MMX de Chile S.A.
Lease Agreement 11/03/2008 0.00 0.00 Costs, plus 15%, plus VAT Indefinite No 0.000000
Relationship with the issuer subject-matter of the agreement Guarantees and insurance Termination or dissolution Nature of and reason for the transaction REX Inversiones S.A.
Other related parties Operational and financial activities cost sharing agreement of MPX Energia de Chile Limitada with MMX Chile.
n/a Upon notice with 30 days in advance. Administrative efficiency 11/03/2008 N/A N/A Costs, plus 15%, plus VAT Until the fulfillment of all contractual obligations or in the event of noncompliance of requirements for implementation of self-production structure up to January 1, 2019. No 0.000000
Other related parties Operational and financial activities cost sharing agreement of MPX Energia de Chile Limitada with REX Inversiones.
N/A (i) mutual agreement between the Parties; (ii) breach of relevant contractual terms; (iii) bankruptcy or filing for judicial reorganization; (iv) if the parties cease to be part of the same economic group; or (v) acts of God or force majeure lasts longer than 120 days Administrative efficiency
367
transaction OGX Maranho Petrleo e Gs e S.A. Relationship with the issuer subject-matter of the agreement Guarantees and insurance Termination or dissolution 03/26/2013 R$5.26 per MMBTU 0.00 R$5.26 per MMBTU 15 years No 0.000000
Other related parties Natural Gas Supply Agreement for UTE Parnaba III.
Possibility of Requirement of Payment Guarantee of UTE Parnaiba III should there is a change of control of UTE Parnaiba III. In the cases of (i) non-payment of collection document; (ii) statement of insolvency, voluntary bankruptcy, bankruptcy, judicial or extrajudicial reorganization, judicial or extrajudicial liquidation and/or intervention of any competent governmental authority, (iii) non-compliance with contractual obligations. Natural Gas Supply Agreement for UTE Parnaba III. 03/26/2013 R$6.006 per MMBTU 0.00 R$6.00 per MMBTU 15 years, as from October 2013 No 0.000000
Nature of and reason for the transaction OGX Maranho Petrleo e Gs e S.A. Relationship with the issuer subject-matter of the agreement Guarantees and insurance Termination or dissolution
Other related parties Natural Gas Supply Agreement for UTE Parnaba IV.
Possibility of Requirement of Payment Guarantee of UTE Parnaiba IV should there is a change of control of UTE Parnaiba IV. In the cases of (i) non-payment of collection document; (ii) statement of insolvency, voluntary bankruptcy, bankruptcy, judicial or extrajudicial reorganization, judicial or extrajudicial liquidation and/or intervention of any competent governmental authority, (iii) non-compliance with contractual obligations. Natural Gas Supply Agreement for UTE Parnaba IV. 03/26/2013 N/A N/A N/A Indefinite No 0.000000
Nature of and reason for the transaction OGX Maranho Petrleo e Gs S.A. Relationship with the issuer subject-matter of the
Other related parties Free Lease Agreement for UTE Parnaba III.
368
agreement Guarantees and insurance Termination or dissolution N/A In the cases of: (i) agreement between the parties, (ii) breach of contractual obligations, and (iii) bankruptcy, filing for or grant of judicial or extrajudicial reorganization and judicial or extrajudicial liquidation of any of the parties. Free Lease Agreement for UTE Parnaba III. 03/26/2013 R$21,243,628.08/year N/A R$21,243,628.08/year Indefinite No 0.000000
Other related parties Lease Agreement of a portion of the total capacity of natural gas processing of UTG necessary for UTE Parnaba III.
Possibility of Requirement of Payment of Guarantee of UTE Parnaiba III should there is a change of control of UTE Parnaiba III. In the cases of (i) non-payment of collection document; (ii) statement of insolvency, voluntary bankruptcy, bankruptcy, judicial or extrajudicial reorganization, judicial or extrajudicial liquidation and/or intervention of any competent governmental authority, (iii) non-compliance with contractual obligations. Lease Agreement UTG for UTE Parnaba III. 03/26/2013 R$5.26/MMBTU N/A R$5.26/MMBTU Indefinite No 0.000000
Other related parties Natural Gas Sale Agreement for UTE Parnaba II.
Possibility of Requirement of Payment Guarantee of UTE Parnaiba II should there is a change of control of UTE Parnaiba II. In the cases of (i) non-payment of collection document; (ii) statement of insolvency, voluntary bankruptcy, bankruptcy, judicial or extrajudicial reorganization, judicial or extrajudicial liquidation and/or intervention of any competent governmental authority, (iii) non-compliance with contractual obligations. Natural Gas Sale Agreement for UTE Parnaba III.
369
transaction OGX Maranho Petrleo e Gs S.A. 03/26/2013 R$8.75 million/year N/A R$8.75 million/year 15 years as from the beginning of commissioning and test phase of UTE No 0.000000
Other related parties Lease Agreement of a certain volume of UTG, entered into by and between OGX Maranho Petrleo e Gs S.A., Petra Energia S.A. and UTE Parnaba II Gerao de Energia S.A., for the exclusive purpose of processing of natural gas from production fields for consumption by UTE Parnaba II. Possibility of Requirement of Payment Guarantee of UTE Parnaiba II should there is a change of control of UTE Parnaiba II. In the cases of: (i) breach of relevant contractual obligation, (ii) statement of bankruptcy, insolvency, judicial or extrajudicial reorganization or liquidation, (iii) transfer of said contract or any rights or obligations, (iv) in the event of termination of CCEARs with no fault of arrendaria, (v) in the event of termination of the Gas Sale Agreement with no fault of the lessee, (vi) acts of God or force majeure (vii) in the case of substantial inaccuracy of any statement provided for in the agreement. Lease Agreement UTG for UTE Parnaba II. 03/26/2013 N/A N/A Impossible to assess 7 years or up to the end of granting of exploration blocks No 0.000000
Nature of and reason for the transaction OGX Maranho Petrleo e Gs S.A.
Relationship with the issuer subject-matter of the agreement
Other related parties Preliminary Agreement for Gas Supply and Other Covenants entered into by and between ENEVA S.A., MPX E.ON Participaes S.A., OGX Maranho Petrleo e Gs S.A. and OGX Petrleo e Gs Participaes S.A., defining the key terms and conditions of contracting by each undertaking, the supply of natural gas and the lease of part of the total capacity of natural gas processing of their UTGs. N/A N/A Preliminary Agreement for Gas Supply and Other Covenants.
Guarantees and insurance Termination or dissolution Nature of and reason for the transaction
370
OGX Maranho Petrleo e Gs S.A. Relationship with the issuer subject-matter of the agreement Guarantees and insurance Termination or dissolution
07/26/2012
N/A
N/A
Indefinite
No
0.000000
Other related parties Free Lease Agreement for UTE Parnaba IV.
N/A In the cases of: (i) agreement between the parties, (ii) breach of contractual obligations, and (iii) bankruptcy, filing for or grant of judicial or extrajudicial reorganization and judicial or extrajudicial liquidation of any of the parties. Free Lease Agreement for UTE Parnaba IV. 07/31/2012 350,000,000.00 N/A 350.000.000,00 Indefinite Yes 0.000000
Nature of and reason for the transaction UTE Porto do Itaqui Gerao de Energia S.A. Relationship with the issuer subject-matter of the agreement Guarantees and insurance Termination or dissolution Nature of and reason for the transaction UTE Porto do Itaqui Gerao de Energia S.A. Relationship with the issuer Subject-matter of the agreement Guarantees and insurance Termination or dissolution
Subsidiary Loan Agreement between ENEVA S.A. and UTE Porto do Itaqui.
N/A N/A Loan agreement with interest at 104% of the CDI rate. 03/26/2013 409,960,000.00 409,960,000.00 409,960,000.00 120 days No 0.000000
Subsidiary Advance payment for future capital increase. N/A N/A
371
Nature of and reason for the transaction MPX Pecm II Gerao de Energia S.A. Relationship with the issuer Subject-matter of the agreement Guarantees and insurance Termination or dissolution Nature of and reason for the transaction UTE Parnaba Gerao de Energia S.A. Relationship with the issuer Subject-matter of the agreement Guarantees and insurance Termination or dissolution Nature of and reason for the transaction Parnaba Participaes S.A. Relationship with the issuer Subject-matter of the agreement Guarantees and insurance Termination or dissolution Nature of and reason for the
Advance payment for future capital increase, in order to capitalize the invested party. 03/22/2013 262,600,000.00 262,600,000.00 262,600,000.00 120 days No 0.000000
Subsidiary Advance payment for future capital increase. N/A N/A Advance payment for future capital increase, in order to capitalize the invested party. 03/28/2013 19,600,000.00 19,600,000.00 19,600,000.00 120 days No 0.000000
Subsidiary Advance payment for future capital increase. N/A N/A Advance payment for future capital increase, in order to capitalize the invested party. 03/27/2013 Subsidiary Advance payment for future capital increase. N/A N/A Advance payment for future capital increase, in order to capitalize the invested party. 16,887,534.17 16,887,534.17 16,887,534.17 120 days No 0.000000
372
transaction Porto do Au Energia S.A. Relationship with the issuer Subject-matter of the agreement Guarantees and insurance Termination or dissolution Nature of and reason for the transaction OGMP Transporte Areo Ltda. Relationship with the issuer Subject-matter of the agreement Guarantees and insurance Termination or dissolution Nature of and reason for the transaction Porto do A II Energia S.A. Relationship with the issuer Subject-matter of the agreement Guarantees and insurance Termination or dissolution Nature of and reason for the transaction MPX Seival Participaes S.A. 03/04/2013 Subsidiary Advance payment for future capital increase. N/A N/A Advance payment for future capital increase, in order to capitalize the invested party. 03/22/2013 Subsidiary Advance payment for future capital increase. N/A N/A Advance payment for future capital increase, in order to capitalize the invested party. 03/05/2013 Subsidiary Advance payment for future capital increase. N/A N/A Advance payment for future capital increase, in order to capitalize the invested party. 03/01/2013 42,500.00 42,500.00 42,500.00 120 days No 0.000000 50,000.00 50,000.00 50,000.00 120 days No 0.000000 150,000.00 150,000.00 150,000.00 120 days No 0.000000 1,950,000.00 1,950,000.00 1,950,000.00 120 days No 0.000000
373
Relationship with the issuer Subject-matter of the agreement Guarantees and insurance Termination or dissolution Nature of and reason for the transaction MPX Tau II Energia Solar Ltda. Relationship with the issuer Subject-matter of the agreement Guarantees and insurance Termination or dissolution Nature of and reason for the transaction MPX Investimentos S.A. Relationship with the issuer Subject-matter of the agreement Guarantees and insurance Termination or dissolution Nature of and reason for the transaction
Subsidiary Advance payment for future capital increase. N/A N/A Advance payment for future capital increase, in order to capitalize the invested party. 03/21/2013 Subsidiary Advance payment for future capital increase. N/A N/A Advance payment for future capital increase, in order to capitalize the invested party. 03/18/2013 Subsidiary Advance payment for future capital increase. N/A N/A Advance payment for future capital increase, in order to capitalize the invested party. 2,000.00 2,000.00 2,000.00 120 days No 0.000000 40,000.00 40,000.00 40,000.00 120 days No 0.000000
374
16.3 - Identification of measures taken to address conflicts of interest and statement of the strictly arms length basis of the conditions agreed or proper compensatory payment
(a)
identify measures taken to handle conflicts of interest
The Company has no specific mechanism for identifying conflicts of interest, but relies on corporate governance practices and those recommended and/or required by the legislation, including as provided in the Novo Mercado Regulations, which state that shareholders may not vote on resolutions at a general meeting which relate to a valuation report on assets for which they are competing for the formation of capital stock, or to the approval of their own accounts as managers, nor on any others that may benefit them personally, or where their interests conflict with those of the Company. A resolution taken on the vote of a shareholder whose interests conflict with those of the Company may be annulled, and the shareholder is responsible for any damage caused and for restoring to the Company any advantages which may have accrued. The Board of Directors, Executive Board and Fiscal Council, if instated, approve all decisions related to the Company operations, according to the powers granted under the current by-laws. Thus all the Companys transactions, especially those with related parties, have been duly submitted to the decision-making bodies of the Company to which they are subordinated, pursuant to the rules currently in force. Additionally, pursuant to the Corporate Law, no member of the Company Board of Directors is permitted to vote at any Company meeting or meeting of the Board of Directors, or to take part in any transaction or business in which the members interests are in conflict with those of the Company. Company transactions and business with related parties are in line with market practice and are covered by the proper advance assessments of their terms, and according to the Companys strict interest in undertaking them. (b) show the strictly commutative character of the terms agreed or adequate payment in compensation
Transactions with parties related to the Company will be made based on market conditions, strictly on an arms length basis, according to applicable legislation and with the best corporate governance practices, including those provided for in the Novo Mercado Regulations, ensuring transparency and full respect for the best interest of shareholders, investors, employees and other stakeholders.
375
17.1 - Information on capital stock
Date of authorization or approval Capital type 09/16/2013

Preferred Shares Class
Capital amount (in Real) Issued Capital 4,536,608,413.70

Number of Shares (Units)
Deadline for payment
Number of common shares (units) 702,524,469
Number of preferred shares (units) 0

Conversion Conditions
Total number of shares (units) 702,524,469
Capital stock per share type
Other Convertible Securities
Capital type 09/16/2013 Capital type 09/16/2013 Capital type 09/16/2013 Capital type 09/16/2013 Capital type 09/16/2013 Capital type 05/08/2013 Capital type 05/08/2013 Capital type 05/08/2013 Capital type 08/15/2013 Subscribed Capital 4,536,608,413.70 Paid-in Capital 4,536,608,413.70 Issued Capital 4,536,568,316.00 Subscribed Capital 4,536,568,316.00 Paid-in Capital 4,536,568,316.00 Issued Capital 3,736,568,320.85 Subscribed Capital 3,736,568,320.85 Paid-in Capital 3,736,568,320.85 Authorized Capital 0
702,524,469 702,524,469 702,510,969 702,510,969 702,510,969 578,479,962 578,479,962 578,479,962 1,200,000,000 0 0 0 0 0 0 0 0 0 702,524,469 702,524,469 702,510,969 702,510,969 702,510,969 578,479,962 578,479,962 578,479,962 1,200,000,000
376
17.2 - Capital Increases

Date of resolution
3/24/2011
Body approving the increase

Meeting of the Board Of Directors
Date of issue
05/19/2011
Total issue amount (in Real)

96,025.60
Type of increase
Private subscription
Common (Units)
28.160
Preferred (Units)
0
Total shares (units)

28,160
Subscription/Previous Capital
0.00469284
Price of issue
3.41
Quotation ratio
R$ per unit
Criteria for determining the issue price Form of payment 02/29/2012 Meeting of the Board Of Directors
Fixed amount, according to the Stock Options Plan of the Company, adopted at the Extraordinary General Meeting of the Company held on November 26, 2007, under the terms of article 171, paragraph 3, of Law No. 6.404/76. Cash 02/29/2012 414,219.00 Private subscription 9,633 0 9,633 0.02024225 43.00 R$ per unit
Price established according to the Deed of the 1st Convertible Debentures Issue. Cash 03/21/2012 42,312.00 Private subscription 984 0 984 0.00206730 43.00 R$ per unit
Price established according to the Deed of the 1st Convertible Debentures Issue. Cash 03/21/2012 25,907.20 Private subscription 7,040 0 7,040 0.00126576 3.68 R$ per unit
Exercise of share subscription options granted according to the Stock Option or Share Subscription Plan of the Company. Cash 05/09/2012 176,816.00 Private subscription 4,112 0 4,112 0.00863869 43.00 R$ per unit
Criteria for determining the issue price
Price established according to the Deed of the 1st Convertible Debentures Issue.
377
Date of resolution
Date of issue
Cash 05/09/2012
Type of increase
Common (Units)
Preferred (Units)
Price of issue
Quotation ratio
Form of payment 05/09/2012 Meeting of the Board Of Directors
1,256,177.13
125,620
125,620
0.06136769
10.00
R$ per unit
Exercise of share subscription options granted according to the Stock Option or Share Subscription Plan of the Company. Cash 05/24/2012 1,429,952,315.00 Private subscription 33.254.705 0 33.254.705 69.81424156 43.00 R$ per unit
Price established according to the Deed of the 1st Convertible Debentures Issue. Cash 06/15/2012 22,102.00 Private subscription 514 0 514 0.00080782 43.00 R$ per unit
Price established according to the Deed of the 1st Convertible Debentures Issue. Cash 07/25/2012 1,000,000,063.00 Private subscription 22,623,796 0 22,623,796 36.54954928 44.20 R$ per unit
Capital increase made upon private subscription of shares approved at the Meeting of the Board of Directors held on May 2, 2012, defining the price of issue per share. Cash 01/10/2013 247,490.42 Private subscription 147,480 0 147,480 0.00662445 1.68 R$ per unit
Criteria for determining the issue price Form of payment
Exercise of share subscription options granted according to the Stock Option or Share Subscription Plan of the Company. Cash
378
Date of resolution
02/06/2013

Meeting of the Board Of Directors
Date of issue
02/06//2013

95,144.63
Type of increase
Common (Units)
27,000
Preferred (Units)
0

27,000
0.00254652
Price of issue
3.52
Quotation ratio
R$ per unit
Exercise of share subscription options granted according to the Stock Option or Share Subscription Plan of the Company. Cash 09/16/2013 799,999,995.15 Private subscription 124,031,007 0 124,031,007 0.21410019 6.45 R$ per unit
Capital increase made upon private subscription of shares. Cash 10/21/2013 40,097.70 Private subscription 13,500 0 13,500 0.00088388 2.97 R$ per unit
Criteria for determining the issue price Form of payment
Capital increase made upon private subscription of shares. Cash
379
17.3 - Information on stock splits, reverse stock splits and stock dividends
Number of shares before approval (Units) Number of common shares Number of preferred shares Number of shares after approval (Units) Number of common shares Number of preferred shares
Date of approval Division of shares 08/15/2012
Total number of shares
Total number of shares
192,747,244
192,747,244
578,241,732
578,241,732
380
17.4 - Information on capital stock decrease

Date of decrease Date of resolution 05/24/2012 Refund form Reason for decrease 05/24/2012 Total amount of decrease (in Real) 750,163,543.01 N/A Spin-off of ENEVA net assets to be merged into CCX. Number of common shares (units) 0 Number of preferred shares (units) 0 Total number of shares (units) 0 Decrease/Previous Capital 20.69499100 Refunded amount per share (in Real) 0.00
381

There is no other relevant information on this item 17.
382
18.1 Rights of shares
Type of shares or CDA

Tag along Right to dividends
Common
100.000000 Under Brazilian Corporation Law and the Companys By-Laws the shareholders are guaranteed the right to a minimum mandatory annual dividend of not less than 25% of the net income reported in the Companys financial statements, adjusted in accordance with the provisions set forth in the Companys By-Laws and in Brazilian Corporation Law. Full No
Right to vote Convertibility Right to capital reimbursement of the of
Yes In the Company being wound-up, the shareholders will receive the payments regarding the remaining capital stock, in proportion to their respective share of the capital stock, after all the Companys obligations have been settled. Those shareholders who disagree with certain decisions taken by the majority of shareholders at General Meetings may leave the Company, under the terms set forth by Brazilian Corporation Law. For purposes of reimbursement, the share value will be determined based on the Companys economic value, as calculated by three experts or a specialized company appointed and chosen in accordance with the provisions of Article 45 of the Brazilian Corporation Law. It will be up to the Companys board of directors to set the list with either six names or three names, respectively, of qualified candidates and institutions to be presented to the Companys shareholders at a General Mee ting for the purpose of assessing the Companys economic value.
Description of characteristics reimbursement of capital
Restriction upon circulation Conditions for altering the rights guaranteed to these securities
No According to Brazilian Corporation Law, neither the Companys by -laws nor the decisions taken by the shareholders at General Meetings can deprive the shareholders of the following rights: (i) the right to participate in the distribution of the profits; (ii) the right to participate, in proportion to their respective share of the capital stock, in the distribution of any assets remaining under the assumption of the Company being wound-up; (iii) the preemptive right in the subscription for shares, debentures convertible into shares or subscription warrants, except in the case of specific circumstances set forth in Brazilian Corporation Law; (iv) the right to inspect, in the way set forth in Brazilian Corporation Law, the management of the corporate business; (v) the right to vote at the General Meetings; and (vi) the right to leave the Company, under the cases set forth in Brazilian Corporation Law, including merger or consolidation. Other relevant characteristics can be found in item 18.10.
Other relevant characteristics
383
18.2 Description of any statutory rules limiting the voting rights of significant shareholders or requiring them to hold a public offering
Limitations on Voting Rights
There are no statutory rules limiting the voting rights of significant shareholders.
Obligation to hold a public offering The Novo Mercado Regulations establish that sale of share control of the Company, both by means of a single operation, as well as by means of successive operations, should be contracted under suspensive or resolutory conditions, whereby the acquirer undertakes to hold a public offering for the shares of the other shareholders, in compliance with the conditions and terms in force under the legislation and the Novo Mercado Regulations, so as to guarantee them an equal treatment to that given to the controlling shareholder who is selling their shareholding, with there being an obligation to deliver to the BM&FBOVESPA a declaration that contains the price and other conditions of the transaction for the sale of share control of the Company. It will also be necessary for this offer to be made (i) when there is onerous assignment of subscription rights of shares and of other securities or rights in relation to securities convertible into shares, which result in the divestiture of share control of the Company; and (ii) in the divestiture of share control of the company that holds a controlling shareholding in the Company, with the controlling shareholder that is divesting their interest in this case being obliged to declare to the BM&FBOVESPA the value attributed to the Company in this divestiture, as well as attaching documents that support this value. Under the Novo Mercado Regulations, the party which acquires share control of the Company, as a result of a private agreement for the purchase and sale of shares signed with the controlling shareholder involving any number of shares, should make a public offering in the way mentioned above, in addition to reimbursing to the shareholders an amount equal to the difference between the public offering price and the amount paid for any shares that may have been acquired on the stock exchange during the six months prior to the date of the acquisition of share control. Such amount should be distributed among all the individuals who sold the Companys shares during those trading sessions in which the acquirer made the acquisitions, in proportion to the net daily sales balance of each one, it falling to the BM&FBOVESPA to structure the distribution, in accordance with the terms of its regulations. The Novo Mercado Regulations also establish that the divesting controlling shareholder is not allowed to transfer ownership of its shares, and that the Company is not permitted to register any transfer of shares that represent control, until such time as the acquiring shareholder and those who may come to hold share control have signed the controlling shareholders Term of Consent as established in the Novo Mercado Regulations. Whenever necessary, the purchaser should take all the measures to replace the minimum percentage of outstanding shares, which consists of 25% of the ca pital stocks total number of shares, within the space of the six months following acquisition of control. The minimum price to be offered under the public offering for acquisition of shares to be made by the controlling shareholder(s), the group of controlling shareholders or by the Company in the case of cancellation of the Companys registration as a public company, should correspond to the Economic Value determined by the valuation report.
384
If the shareholders decide at an Extraordinary General Meeting (i) that the Company should leave the Novo Mercado in order for its shares to be registered for trading outside the Novo Mercado or (ii) upon a corporate restructuring which would result in a company that would not be admitted for trading on the Novo Mercado, the shareholder, or group of shareholders, which has share control should hold a public offering to acquire the shares of the remaining shareholders. The price to be offered should correspond, at least, to the economic value determined by the valuation report, referred to in article 38 of the Companys By-Laws, and comply with the applicable legal and regulatory rules.
385
18.3 Description of exceptions and suspensive clauses relating to equity or political rights set forth in the by-laws
Under the terms of the Companys By-Laws, at the discretion of the Board of Directors, an issue may be made, without preemptive right or with reduction of the term covered by article 171, paragraph 4, of the Brazilian Corporation Law, of shares and debentures convertible into shares or subscription warrants, the placement of which is made by means of sale on the stock exchange or by public subscription, or even by means of exchange of shares in a public offering for acquisition of share control, under the terms established by the law, within the limit of authorized capital. Also under the terms of the Companys By-Laws, within the limit of authorized capital and in accordance with the plan approved by the shareholders in a general meeting, the Company may grant stock options to managers and employees, as well as to managers and employees of other companies that are either directly or indirectly controlled by the Company, with exclusion of the preemptive right of the shareholders in the granting and in the exercising of the stock options, under the terms of article 168, paragraph 3, combined with article 171, paragraph 3 of the Brazilian Corporation Law.
386
18.4 Trading volume and highest and lowest price quotes for securities traded
Financial Year Quarter 03/31/2012 06/30/2012 09/30/2012 12/31/2012 Financial Year Quarter 03/31/2011 06/30/2011 09/30/2011 12/31/2011 Financial Year Quarter 03/31/2010 06/30/2010 09/30/2010 12/31/2010 12/31/2012 Financial volume traded (Reais) 1,700,183,595 1,733,682,570 899,124,008 705,735,638 Highest quote (Reais) 14.00 14.81 12.74 11.97 Lowest quote (Reais) 12.64 10.01 9.78 9.93 Quote Factor R$ per Unit R$ per Unit R$ per Unit R$ per Unit
Security Shares Shares Shares Shares 12/31/2011
Type Common Common Common Common
Class
Market Stock Exchange Stock Exchange Stock Exchange Stock Exchange
Administrative Body BM&FBOVESPA S.A. Bolsa de Valores, Mercadorias e Futuros BM&FBOVESPA S.A. Bolsa de Valores, Mercadorias e Futuros BM&FBOVESPA S.A. Bolsa de Valores, Mercadorias e Futuros BM&FBOVESPA S.A. Bolsa de Valores, Mercadorias e Futuros
Security Shares Shares Shares Shares 12/31/2010
Class
Financial volume traded (Reais) 1,013,410,266 1,063,381,892 827,099,206 874,086,372
Highest quote (Reais) 37.08 40.03 39.60 47.10
Lowest quote (Reais) 24.79 34.25 31.35 33.80
Quote Factor R$ per Unit R$ per Unit R$ per Unit R$ per Unit
Security Shares Shares Shares Shares
Class
Financial volume traded (Reais) 661,794,682 709,821,864 753,309,588 815,768,239
Highest quote (Reais) 27.80 24.10 29.73 31.35
Lowest quote (Reais) 21.85 17.00 18.83 24.01
Quote Factor R$ per Unit R$ per Unit R$ per Unit R$ per Unit
387
18.5 Description of other securities issued

Security Identification of the security Date of issue Date of maturity Quantity (Units) Total value (Reais) Restrictions upon circulation Convertibility Convertible Debentures MPXE-D11 06/15/2011 06/15/2014 21,735,744 1,376,572,069.00 No Yes. On the date of this Reference Form, 72,711 debentures are outstanding, the remaining debentures having been fully settled and converted into common shares issued by the Company. The Convertible Debentures will be able to be converted based on the fixed price of R$43.00 per share, and this amount does not take into account the split of shares representing the Companys share capital occurred in August 2012. The conversion price will be simultaneously and proportionally adjusted whenever there is an increase in capital by means of share bonus, share split or share grouping, in any form, as from the date of issue, without any onus for the holders of the Convertible Debentures and in the same proportion as that established for such events. Possibility of redemption Characteristics of the securities No The Debentures are registered, book-entry debentures convertible into common shares issued by the COMPANY, without the issue of certificates. The Debentures will be secured by floating charge.
Condition of convertibility and effects on capital stock
Security Identification of the security Date of issue Date of maturity Quantity (Units) Total value (Reais) Restrictions upon circulation Details of restriction Convertible Possibility of
Commercial Notes (BRMPXENPM006) 7/20/2012 7/15/2013 300 300.000.000,00 Yes. Trading on secondary market only between Qualified Investors and after ninety (90) days from subscription or acquisition by the investor. No. Yes.
388
redemption Circumstances and calculation of redemption value (i) Optional early redemption in whole or in part, at the sole discretion of the Company. Amount of redemption calculated as the par unit value, equivalent to R$1,000,000, plus remuneration corresponding to 100% of the variation in the DI rate plus a margin of 1.5%, on the basis of 252 business days, calculated pro rata on the par value on a compound basis from the issue date to the date of the optional early redemption. (ii) Mandatory early redemption in full as a result of (a) any public offer for the issue of fixed income securities or debt securities, such as, but not limited to, debentures, shares of receivables investment funds, bonds or commercial paper, by the Company, in Brazil or overseas; or (b) any public offer, in terms of item (a) above, by any company controlled by the Company, provided that such offer creates a liquidity event for the Company, whether by means of a dividend distribution, a capital increase and/or a loan, or by other means. Amount of redemption calculated as the par unit value, equivalent to R$1,000,000, plus remuneration corresponding to 100% of the variation in the DI rate plus a margin of 1.5%, on the basis of 252 business days, calculated pro rata on the par value on a compound basis from the issue date to the date of the mandatory early redemption. Book-entry, registered, non-convertible commercial notes, issued by public distribution with restricted placement efforts, without collateral or personal guarantees being offered to the holders. Commercial Notes (BRMPXENPM006) 12/14/2012 12/9/2013 300 300.000.000,00 Yes. Trading on secondary market only between Qualified Investors and after ninety (90) days from subscription or acquisition by the investor. No. Yes. (i) Optional early redemption in whole or in part, at the sole discretion of the Company. Amount of redemption calculated as the par unit value, equivalent to R$1,000,000, plus remuneration corresponding to 100% of the variation in the DI rate plus a margin of 1.5%, on the basis of 252 business days, calculated pro rata on the par value on a compound basis from the issue date to the date of the optional early redemption. (ii) Mandatory early redemption in full as a result of (a) any public offer for the issue of fixed income securities or debt securities, such as, but not limited to, debentures, shares of receivables investment funds, bonds or commercial paper, by the Company, in Brazil or overseas; or (b) any public offer, in terms of item (a) above, by any company controlled by the Company, provided that such offer creates a liquidity event for the Company, whether by means of a dividend distribution, a capital increase and/or a loan, or by other means. Amount of redemption calculated as
Characteristics of the securities
Security Identification of the Security Date of Issue Date of maturity Quantity (Units) Total value (Reais) Restrictions upon circulation Details of restriction Convertibility Possibility of redemption Circumstances and calculation of redemption value
389
the par unit value, equivalent to R$1,000,000, plus remuneration corresponding to 100% of the variation in the DI rate plus a margin of 1.5%, on the basis of 252 business days, calculated pro rata on the par value on a compound basis from the issue date to the date of the mandatory early redemption. Characteristics of the securities Book-entry, registered, non-convertible commercial notes, issued by public distribution with restricted placement efforts, without collateral or personal guarantees being offered to the holders.
390
18.6
Brazilian markets where securities are admitted for trading
The Companys securities are traded on the BM&FBOVESPA (Brazilian Securities, Commodities and Futures Exchange), and its common shares are traded under the code MPXE3.
391
18.7 Information about class and type of securities admitted for trading on foreign markets
Global Depositary Receipts Level 1 Country Market The markets administrative body Date of admission for trading Trading segment Date of first listing Percentage of volume of trades overseas in relation to the total volume of trade of each class and type during the last fiscal year Proportion of deposit certificates overseas in relation to each class and type of share Depositary Bank Custodian Institution United States U.S. Over-The-Counter (OTC) Market Pink OTC Markets May 8, 2009 Level 1 May 8, 2009 0.09%
1 GDR corresponds to 1 common share of the Company. The Bank of New York Mellon Banco Ita S.A.
392
18.8 Public offerings for distribution held by issuer or third parties, including controlling shareholders and subsidiaries and affiliates, regarding securities of the issuer
Public offering for distribution of commercial notes July /2012 On July 20, 2012, the Company held a public distribution of 300 commercial promissory notes, with restricted placement efforts, pursuant to CVM Instruction, No. 476 of January 16, 2009, as amended (CVM Instruction No. 476), in a single series, in the nominal value per unit of R$1 million, totaling R$300 million, maturing on July 15, 2013, remunerated by variation of 100% of the DI rate, plus a surcharge of 1.50% p.a. Other characteristics of the commercial notes issued in July/2012 are outlined in item 18.5 of this Reference Form. Public offering of distribution of commercial notes - December 2012 On December 14, 2012, the Company held a public distribution of 300 commercial promissory notes, with restricted placement efforts, pursuant to CVM Instruction, No. 476, in a single series, in the nominal value per unit of R$1 million, totaling R$300 million, maturing on December 9, 2013, remunerated by variation of 100% of the DI rate, plus a surcharge of 1.50% p.a. Other characteristics of the commercial notes issued in December/2012 are outlined in item 18.5 of this Reference Form. Besides the offerings mentioned above, during the last three financial years, no other public offerings for distribution of securities issued by the Company were held by the Company or by third parties.
393
18.9 - Description of public offerings for acquisition held by the issuer in respect of shares issued by third parties
During the last three financial years and during the current financial year no public offerings for acquisition of securities issued by third parties were held by the Company.
394

There is no other information that the Company deems to be relevant in relation to item 18 which has not been disclosed in the other items of this Reference Form.
395
19.1
Information on repurchase of shares of the issuer
Justification for non-completion of the chart: The Company does not have a repurchase plan in place.
396
19.2 - Variation in treasury shares

Justification for non-completion of the chart: The Company has not kept treasury shares during the last three fiscal years or in the current financial year.
397
19.3 - Information on treasury securities as of the closing date of the last fiscal year
Justification for non-completion of the chart: The Company has not kept treasury shares during the last fiscal year.
398

399
20.1. Information on securities trading policy
Date approved Position and/or function
27/03/2009
According to the Companys Securities Trading Policy (Trading Policy or simply Policy) the following are regarded as related persons (Connected Persons): (i) controlling shareholders; (ii) the Companys Managers (members of the Executive Board and of the Board of Directors); (iii) Members of the Fiscal Council; (iv) members of the Companys other bodies with technical or advisory functions created by statutory provision; or even (v) executives and employees who, due to their job, function or position in the Company, in the controlling companies, in the subsidiaries and in the affiliates or in the EBX group in general, have knowledge of privileged information or relevant information about the Company.
Main characteristics The aim of the aforementioned Trading Policy is to establish the rules and procedures that should be observed and applied by the Connected Persons, as defined above, in connection with trading securities issued by the Company, including their Derivatives (American Depositary Receipts, for example), with a view to preventing the practice of Insider Trading; that is to say, the utilization of Privileged or Relevant Information, by Connected Persons and regarding which confidentiality should be maintained, to obtain undue economic advantage, either for themselves or for others, by means of trading, either on their own behalf or on behalf of third parties, in Securities issued by the Company. The rules of the aforementioned Policy also define the periods during which Connected Persons should abstain from trading in Securities issued by the Company (as indicated in the item below), so as to avoid any potential questions or suspicions in relation to the undue use of Privileged or Relevant Information not disclosed to the public, in the ways set forth in CVM Instruction n 358/2002 (Instruction 358). Connected Persons, Linked Persons and Managers who fail to comply with any provision that is included in the Trading Policy, in addition to being subject to respond to a sanctioning administrative procedure and the application, by the CVM, of the penalties set forth in article 11 of Law n 6385, of December 7, 1976, are also obliged to reimburse the Company and/or other Connected Persons, in full and without limitation, for all the losses that the Company and/or other Related Persons incur and which result, directly or indirectly from the aforesaid violation.
Blackout periods and description of the inspection procedures
Related Persons are not allowed to trade in securities issued by the Company during the following periods (blackout periods): (i) 15 days prior to disclosure of the Companys annual financial statements (DFP) and quarterly financial statements (ITR); (ii) from the moment that a Connected Person, Linked Person, executive or employee of the Company has access to the Privileged Information until such time that the Relevant Act or Fact in relation to the conclusion of the deal or transaction that the Privileged Information was related to has been disclosed to the market; and (iii) in all those periods in which by virtue of the communication of the DRI, it has been determined that no trading shall take place. The Companys Investor Relations Officer is responsible for notifying Connected Persons of blackout periods. The prohibitions contained in the Trading Policy include all trading in securities issued by the Company carried out directly and indirectly by Connected Persons. Moreover, managers, executives and employees who have left the Company are not allowed to trade in the Companys securities in accordance with the following rules:
400
(i) Managers: for a period of six months after their termination or resignation; and (ii) Managers, executives and employees: until public disclosure, by the Company, of the Relevant business Act or Fact that began during their period of management even if it takes more than six months after termination or resignation in the case of former Managers except if trading in the Companys shares, after disclosure of the Relevant Act or Fact, might interfere in the conditions of the aforementioned business activities, to the expense of the Companys shareholders or the Company itself. Connected Persons should also direct Linked Persons related to them to comply with the blackout periods. Other periods in which there are restrictions on trading: (a) when there is, on the part of the Companys management, the intention to bring about the consolidation, spin-off, merger, transformation or corporate restructuring; and (b) when there is, on the part of the Companys management, the intention to carry out a capital increase, whether public or private, or to issue debt or debentures. The Companys Investor Relations Officer is responsible for monitoring and carrying out the Trading Policy, it being his/her job to coordinate the list of Connected Persons and Linked Persons and keep it permanently up-to-date, as well as to ensure that Connected Persons are fully informed as to their condition and of the restrictions imposed by the Companys Trading Policy. The persons included in the prohibition list are obliged to communicate to the Companys Investor Relations Officer any trade made with the shares issued by the Company, as well as by its controlling shareholders and by its subsidiaries. The communication should be made within the space of five days after carrying out each trade and should contain the following minimum information, as a result of CVM Instruction 358: (a) name, qualification; (b) quantity of shares traded and, in the case of other securities, their characteristics; (c) identification of the issuer company and of the balance of the position held before and after the trade; and (d) the manner of acquisition or disposal, price and date of the transactions. If there is any atypical oscillation in the price or in the quantity traded of the securities issued by the Company, the Companys Investor Relations Officer should investigate the people who have access to Privileged or Relevant Information, with the aim of ascertaining if they, or Linked Persons related to them, traded securities issued by the Company making use of the differentiated access to that information, and examining whether they have maintained the due confidentiality with regard to this Privileged or Relevant Information. Additionally, related persons should (a) keep relevant information about the Company confidential and not use it to for the purpose of gaining advantages for themselves or for anyone else; and (ii) make every effort to ensure that their subordinates and third parties maintain confidentiality regarding such information and do not use it for their own benefit.
401

402
21.1 Description of internal rules, regulations and procedures for disclosing information
The Company has a Policy on Disclosure and Use of Market Information ( Disclosure Policy), which is described in item 21.2 of this Reference Form, the full content of which can be found on the Brazilian Securities Commissions site (www.cvm.gov.br) and on the Companys site (www.eneva.com.br/ri). In addition, according to the legislation and the CVM rules that are in force, in particular the Brazilian Corporation Law and CVM Instruction n 358, date January 3, 2002 as amended (CVM Instruction 358), all and every public company should, as a general rule, at regular intervals present the CVM (Brazilian Securities Commission) and the BM&FBOVESPA with certain specific information, such as quarterly financial reports and annual financial statements accompanied by managements report and the independent auditors opinion, as well as filing with the CVM and the BM&FBOVESPA any shareholder agreements that exist, notifications regarding shareholders general meetings and communications in relation to the disclosure of relevant acts or potential relevant facts. CVM Instruction 358 also governs the rules regarding the disclosure and or use of information about relevant acts or facts, including, but not restricted to, those which relate to the disclosure of information regarding trading in and the acquisition of securities issued by public companies. These rules: establish the concept of relevant act or fact which gives rise to the obligation of disclosure. Included within the concept of relevant act or fact are decisions taken by the controlling shareholders, resolutions taken by the shareholders in general meeting or by the companys board of directors, or any other political, administrative, technical, fin ancial or economic acts or facts related to the companys business that may influence the price of its shares and/or investors decisions to trade and/or keep these shares or to exercise any rights underlying these shares; specify acts or facts that are considered relevant, such as the signing of contracts foreseeing the transfer of control of the company, the entry or exit of shareholders who have any operational, administrative, financial or technological agreement or collaboration with the company as well as the occurrence of any corporate restructuring carried out among the companies related to the company in question; oblige the public company to disclose relevant acts or facts to the CVM and to the BM&FBOVESPA, as well as to the market in general, by means of the publication of the aforementioned relevant acts or facts in the newspapers generally used by the aforesaid company; demand that the acquirer of control of a public company disclose a relevant fact, including its intention, or not, to cancel the companys registration as a public company, within the space of a year; demand that the members of the board of directors and of the fiscal council (or of any technical or consultive body) of a public company disclose to the CVM and to the BM&FBOVESPA the number, type and manner of trading in the shares issued by the aforementioned company, its subsidiaries and its parent companies, held by the aforesaid
403
persons, as well as by their spouses, companions and dependents, also informing them of any changes in the aforementioned shareholdings; demand that any direct or indirect controlling shareholder, or any shareholder electing members of the board of directors of a public company who increases or decreases his/her stake in the aforementioned company by more than 5%, should disclose the information related to the aforesaid acquisition or disposal; and prohibit the trading of securities based on privileged information.
Moreover, the Company joined the Novo Mercado, the BM&FBOVESPA special listing segment in terms of corporate governance which, in addition to the legislation and the applicable CVM regulations, envisages more rigorous disclosure rules and increases the information to be disclosed by public companies that adopt such differentiated corporate governance practices. Among other things, the Novo Mercado Regulations impose the obligation to present cash flow statements together with the quarterly information and the annual financial statements as well as the annual disclosure of the schedule of corporate events. According to the applicable CVM regulations, any decision by a potential controlling shareholder, decision of the shareholders taken in general meeting or of the Companys administrative bodies, or any act or fact of a political, administrative, technical, business or economic financial character that has occurred or which is related to the Companys business, which may influence to a measurable degree (i) the price of securities issued by it; (ii) investors decisions to purchase, sell or keep the securities issued by it; or (iii) investors decisions in relation to the exercising of any rights that relate to the condition of ownership of the securities issued by it, is regarded as a relevant item of information. Also, according to the applicable CVM regulations, prior to disclosing to the market any relevant act or fact that has occurred in connection with the Company, it is prohibited for trading in shares issued by the Company to be carried out by any of the following: (i) the Company itself; (ii) potential direct or indirect controlling shareholders; (iii) the companys directors; (iv) the companys advisors; (v) the members of any of the companys bodies with technical or consultive functions, created by arrangement; (vi) anyone who, by virtue of their job, function or position in the company, in the parent companies, subsidiaries or affiliate companies, has knowledge of the relevant act or fact; (vii) anyone who has knowledge of information related to the relevant act or fact and knows that it relates to information which has not yet been disclosed to the market, in particular those who have a commercial or professional relationship with the company or one of trust, such as independent auditors, market analysts and consultants, whose job it is to check regarding the disclosure of information prior to trading in securities issued by the company; and (viii) members of the board of directors who have left the company prior to public disclosure or business activities or facts that began during their period of management, and who will continue to be subject to the ban for a period of six months after they have left the company. The aforementioned ban also prevails whenever there is underway an acquisition or disposal of shares issued by the Company, subsidiaries, affiliate companies or another company which is under common control, or if an option or mandate has been granted for the same purpose, as well as if the company has the intention of promoting incorporation, total or partial split, merger, transformation or corporate restructuring. The persons mentioned above are also prohibited from trading in securities issued by the Company during the 15 days prior to the publication of the quarterly information (ITR) and the financial statements.
404
21.2 - Description of the policy for disclosing relevant acts or facts and of the procedures for maintaining secrecy about relevant information not disclosed
The Company has a Policy on Disclosure and Use of Market Information ( Disclosure Policy or simply Policy), the purpose of which is to establish guidelines and procedures regarding the use of relevant information about the Company, as well as maintaining confidentiality with regard to privileged information, until such time as it is disclosed to the market, under the terms of CVM Instruction n 358 and CVM Instruction n 369. It is compulsory for Connected Persons to comply with these directives and procedures. The Disclosure Policy is based on the following principles and objectives: to provide complete information to the shareholders and investors; to guarantee ample and immediate disclosure of Relevant Acts or Facts; to ensure that all shareholders and investors have equal access to the public information about the Company; to make every effort to keep undisclosed Relevant Acts or Facts confidential; to contribute to the stability and development of the Brazilian capital markets; and to consolidate good corporate governance practices in the Company.
According to the Disclosure Policy, Relevant Acts or Facts de notes any decision by the Companys controlling shareholder, decision of the shareholders taken in general meeting or of the Companys administrative bodies, or any act or fact of a political, administrative, technical, business or economic financial character that has occurred or which is related to the Companys business, which may influence to a measurable degree (a) the price of securities issued by the Company or which are pegged to them; (b) investors decisions to purchase, sell or keep those securities; and (c) investors decisions in relation to the exercising of any rights that relate to the condition of ownership of the securities issued by the Company or which are pegged to them, in particular, but not being restricted to, the acts or facts listed in CVM Instruction 358. The Disclosure Policy determines that Connected Persons have a duty to maintain confidentiality regarding privileged information until such time as it is disclosed to the market, and to make every effort to ensure that subordinates and third parties who they trust do the same, being jointly responsible with these in the case of failure to observe the duty of confidentiality. It is stressed that Connected Persons may not use privileged information that they have access to for their own benefit or for the benefit of third parties. In addition, Connected Persons should make every effort to ensure that those who have a commercial or professional relationship or a relationship of trust with the Company, such as independent auditors, securities analysts, consultants and institutions that belong to the distribution system also observed this duty. Therefore, Connected Persons will be responsible for communicating to the Companys Investor Relations Officer all and any Relevant Acts or Facts that they have knowledge of, and which they know the Companys Investor Relations Officer is not yet aware of, as well as checking to see if the Companys Investor Relations Officer has taken measures regarding the disclosure of the respective information. If these individuals confirm that the Companys Investor Relations Officer has failed in his duty to communicate and disclose, and if no decision has been made in connection with maintaining confidentiality regarding the Relevant Act or Fact, they should immediately communicate the Relevant Act or Fact to the CVM in order to be relieved of the responsibility imposed by the applicable legislation in the case of their failure to make disclosure.
405
The Policy also determines that the Companys Executives and Em ployees, among other procedures, should always consult the Investor Relations Officer or the Investor Relations area for guidance before any interviews or making any pronouncements, in addition to passing on to them any external contact made by research areas or banks share selling areas and investors in general. The Companys Executives and Employees should only provide the external public with information that has been widely disclosed to the market. Those persons who are subject to the provisions set forth in the Disclosure Policy are obliged to ensure that information which is disclosed about the Companys equity and financial condition is correct, complete, continuous and developed through those members of management whose function this is. According to the regulations that are in force and the Companys Disclosure Policy, the Companys Investor Relations Officer is the one who is primarily responsible for communicating and disclosing the Relevant Act or Fact regarding the Company to the CVM, to the Bovespa and, if it is the case, to the Stock Markets and Over-the-Counter Market in which the securities issued by the company are admitted for trading, in a clear and precise way, in language which is objective and accessible to the investor public, with it being a general rule that this disclosure should be made immediately after the items occurrence and at the same time to the entire market, by means (i) of publication in the newspapers with a large circulation that are normally used by the Company; and (ii) making the respective information available, with at the very least the same content as that furnished to the CVM and to the BM&FBOVESPA, on the world wide web. Disclosure of the Relevant Act or Fact should, whenever possible, be made simultaneously to the CVM and to the market entities where the securities issued by the Company are trade, before the start of, or after the close of, trading on the BM&FBOVESPA and, if it is the case, to the Stock Markets and Over-the-Counter Market in which the securities issued by the company are admitted for trading. When the securities issued by the Company are being traded simultaneously on both Brazilian as well as Foreign Market Entities, the disclosure should, as a rule, be made before the start of, or after the close of, business in all the countries. If there is an incompatibility in terms of the hours, the operating hours of the Brazilian market will take precedence. It will also be the responsibility of the Companys Investor Relations Officer to evaluate the nee d to ask, always simultaneously, both the Brazilian and Foreign Market Entities, to suspend trading in the securities, for as much time as is necessary to properly disseminate the relevant information, if it is essential that the disclosure of the Relevant Act or Fact be made during trading hours. The Companys Investor Relations Officer should provide proof to the Brazilian Market Entities that the request for the suspension of trading was also made to the Foreign Market Entities. The Company should immediately disclose any relevant information whenever: (i) the information is beyond the control of the Company and its bodies, as well as of those who originally had knowledge of it; and (ii) there are totally atypical oscillations in the quote, price or quantity of shares traded which may be related to some loss of control of relevant information. And, whenever the Companys Investor Relations Officer is asked to provide investors with additional clarification to the communication and the disclosure of the Relevant Act or Fact, or in the case of atypical oscillations such as those mentioned previously, the Companys Investor Relations Officer should investigate those individuals with access to the Relevant Acts or Facts, for the purpose of checking whether these have knowledge of information that should be disclosed to the market.
Under the assumption of broadcasting the Relevant Act or Fact by any whatsoever means of communication, including press releases, or at class entity meetings, investors, analysts or with a
406
selected audience, both in Brazil as well as abroad, the Companys Investor Relations Officer should simultaneously disclose the respective information to the market. Lastly, it is stressed that, violation of the rules established in the Disclosure Policy, in CVM Instruction 358/2002 and in the other applicable legal and regulatory provisions may subject the offending party to answer administrative proceedings and to the application by the CVM, of the penalties foreseen under the law or in the applicable regulations. Exception to Disclosure It may be allowed, in exceptional circumstances, for the Relevant Acts or Facts, not to be disclosed, if the Companys controlling shareholder or if its board of directors consider that doing so would jeopardize the Companys legitimate interests, with it being compulsory in this case to follow the procedures established under the applicable rules. The Companys controlling shareholder or its board of directors, are obliged, by intermediation of the Companys Investor Relations Officer or directly, to immediately disclose the Relevant Act or Fact, in the case of any of the following assumptions: there are indications that the information has gotten out of control; or there are atypical oscillations in the quote, price or quantity traded of securities issued by the Company or which are pegged to them.
Whenever there are doubts, on the part of those who have knowledge of the Relevant Act or Fact, with regard to the legitimacy of not disclosing the information, the matter should be submitted to the CVM, in the manner set forth in the applicable rules, with it being up to the CVM to decide whether or not to disclose it.
407
21.3 - Managers in charge of implementing, maintaining, assessing and inspecting the information disclosure policy
The Investor Relations Officer is the one who is responsible for implementing, maintaining, monitoring and carrying out the Companys Disclosure Policy.
408

409
22.1 - Acquisition or disposal of any relevant asset that is not included in the issuers ordinary business operations
There was no acquisition of disposal of any relevant asset that is not included in the issuers normal business operations.
410
22.2 - Significant changes in the issuers form of conducting business

There was no significant change in the Companys form of conducting business.
411
22.3 - Relevant agreements entered into by issuer and its subsidiaries which are not directly related to its operating activities
There are no relevant agreements that have been entered into by the Company or its subsidiaries which are not directly related to its operating activities.
412

There is no other relevant information which has not been disclosed in this Reference Form.
ajd/dtr/ajd/43334.doc 6/19/13
413

Reference Form - 2013

Hochgeladen von

Dokumentinformationen

Originalbeschreibung:

Copyright

Verfügbare Formate

Dieses Dokument teilen

Dokument teilen oder einbetten

Freigabeoptionen

Stufen Sie dieses Dokument als nützlich ein?

Sind diese Inhalte unangemessen?

Copyright:

Verfügbare Formate

Reference Form - 2013

Hochgeladen von

Copyright:

Verfügbare Formate

Reference Form - 2013 ENEVA S.A.