UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Amendment No. 3
FORM 20-F/A
o | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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OR | |
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x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2016 |
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OR | |
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o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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OR | |
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o | SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Commission file number: 001-34129
CENTRAIS ELÉTRICAS BRASILEIRAS S.A. — ELETROBRAS |
(Exact name of Registrant as specified in its charter) |
|
BRAZILIAN ELECTRIC POWER COMPANY |
(Translation of Registrant’s name into English) |
|
Federative Republic of Brazil |
(Jurisdiction of incorporation or organization) |
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Avenida Presidente Vargas, 409 — 9th floor, Edifício Herm. Stoltz — Centro, CEP 20071-003, Rio de Janeiro, RJ, Brazil |
(Address of principal executive offices) |
Securities registered or to be registered pursuant to Section 12(b) of the Act:
Title of each class |
| Name of each exchange on which registered |
American Depositary Shares, evidenced by American Depositary Receipts, each representing one Common Share |
| New York Stock Exchange |
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Common Shares, no par value* |
| New York Stock Exchange |
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American Depositary Shares, evidenced by American Depositary Receipts, each representing one Class B Preferred Share |
| New York Stock Exchange |
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Preferred Shares, no par value* |
| New York Stock Exchange |
* Not for trading but only in connection with the registration of the American Depositary Shares pursuant to the requirements of the SEC.
Securities registered or to be registered pursuant to Section 12(g) of the Act: None.
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None.
The number of outstanding shares of each of the issuer’s classes of capital or common stock as of December 31, 2016 was:
1,087,050,297 |
| Common Shares |
146,920 |
| Class A Preferred Shares |
265,436,883 |
| Class B Preferred Shares |
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
o Yes x No
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
o Yes x No
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days
x Yes o No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
o Yes x No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer x |
| Accelerated filer o |
| Non-accelerated filer o |
| Emerging growth company o |
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards* provided pursuant to Section 13(a) of the Exchange Act. o
*The term ‘‘new or revised financial accounting standard’’ refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:
U.S. GAAP o |
| IFRS x |
| Other o |
Indicate by check mark which financial statement item the registrant has elected to follow.
o Item 17 x Item 18
If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.).
o Yes x No
Explanatory Note — Amendment
This Amendment No. 3 amends our Annual Report on Form 20-F for the year ended December 31, 2016 (“Annual Report”) dated April 29, 2017, as filed with the U.S. Securities and Exchange Commission on May 1, 2017 and is being filed solely for the purpose of including the 2016 financial statements of Madeira Energia S.A. as Madeira Energia S.A. met the criteria set forth in Rule 3-09 of Regulation S-X in 2014.
This Amendment No. 3 speaks as of the initial filing date of the Annual Report. Other than as expressly set forth above, no part of the Annual Report is being amended. Accordingly, other than as discussed above, this Amendment No. 3 does not purport to amend, update or restate any other information or disclosure included in the Annual Report or reflect any events that have occurred after the initial filing date of the Annual Report. As a result, our Annual Report on Form 20-F for the fiscal year ended December 31, 2016 continues to speak as of April 28, 2017 or, to the extent applicable, such other date as may be indicated in the Annual Report.
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1 | ||
1 | ||
2 |
PART III
See “Item 18, Financial Statements.”
In 2016, our affiliate CTEEP — Companhia de Transmissão de Energia Elétrica Paulista was a significant associate under Rule 3-09 of Regulation S-X. In 2015, none of our affiliated entities was a significant entity under Rule 3-09 of Regulation S-X. In 2014, Madeira Energia S.A. and Energia Sustentável do Brasil Participações S.A. constituted significant subsidiaries under Rule 3-09 of Regulation S-X. The financial statements for those entities as of December 31, 2014 and 2013 and for the years ended December 31, 2014, 2013 and 2012 were included in our annual report for 2014 on Form 20-F and the financial statements for those entities as of December 31, 2015 and 2014 and for the years ended December 31, 2015, 2014 and 2013 were included in our annual report for 2015 on Form 20-F. The financial statements of Energia Sustentável do Brasil Participações S.A. and CTEEP — Companhia de Transmissão de Energia Elétrica Paulista, each as of December 31, 2016 and 2015 and for the years ended December 31, 2016, 2015 and 2014 were filed as an amendment to our Annual Report on June 12, 2016. Please see attached the financial statements of Madeira Energia S.A. as of December 31, 2016 and 2015 and for the years ended December 31, 2016, 2015 and 2014.
2.1 Amended and Restated Deposit Agreement dated October 18, 2002 between Centrais Elétricas Brasileiras S.A. — Eletrobras and J.P. Morgan Chase Bank, N.A., incorporated herein by reference from our Registration Statement on Form 20-F, filed July 21, 2008, File No. 001-34129.
2.2 The total amount of long-term debt securities of our company and our subsidiaries under any one instrument does not exceed 10% of the total assets of our company and our subsidiaries on a consolidated basis. We agree to furnish copies of any or all such instruments to the SEC upon request.
3.2 By-Laws of Centrais Elétricas Brasileiras S.A. — Eletrobras (English translation), dated April 28, 2017.
4.1 Itaipu treaty signed by Brazil and Paraguay — Law No. 5,899 of July 5, 1973, incorporated herein by reference from our Registration Statement on Form 20-F, filed July 21, 2008, File No. 001-34129.
8.1 List of subsidiaries, incorporated by reference to Exhibit 8.1 to our Annual Report on Form 20-F (File No. 001-34129), filed on May 1, 2017.
12.1 Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer of Centrais Elétricas Brasileiras S.A. — Eletrobras.
12.2 Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer of Centrais Elétricas Brasileiras S.A. — Eletrobras.
13.1 Section 906 Certification of Chief Executive Officer of Centrais Elétricas Brasileiras S.A. — Eletrobras.
13.2 Section 906 Certification of Chief Financial Officer of Centrais Elétricas Brasileiras S.A. — Eletrobras.
SIGNATURES
The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this Amendment No. 3 to its Annual Report on its behalf.
| CENTRAIS ELÉTRICAS BRASILEIRAS S.A. —
ELETROBRAS | |
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June 14, 2017 | By: | /s/ Wilson Pinto Ferreira Junior |
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| Name: Wilson Pinto Ferreira Junior |
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| Title: Chief Executive Officer |
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| By: | /s/ Armando Casado de Araújo |
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| Name: Armando Casado de Araújo |
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| Title: Chief Financial and Investor Relations Officer |
CENTRAIS ELÉTRICAS BRASILEIRAS S.A. — ELETROBRAS
AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
Contents
Madeira Energia S.A. — MESA
and its subsidiary
Consolidated Financial statements
at December 31, 2016 and
independent auditor’s report
To the Board of Directors and Shareholders
Madeira Energia S.A. — MESA
We have audited the accompanying consolidated balance sheet of Madeira Energia S.A. — MESA and its subsidiary (the “Company”) as of December 31, 2016 and 2015, and the related consolidated statements of operations, comprehensive loss, changes in equity and of cash flows for each of the three years in the period ended December 31, 2016. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the auditing standards generally accepted in the United States of America and in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Madeira Energia S.A. — MESA and its subsidiary as of December 31, 2016 and 2015, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2016 in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.
São Paulo - Brazil |
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April 28, 2017 |
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/s/ PricewaterhouseCoopers |
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PricewaterhouseCoopers Auditores Independentes |
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PricewaterhouseCoopers, Av. Tancredo Neves 620, 34°, Ed. Empresarial Mundo Plaza, Caminho das Árvores, Salvador, BA, Brasil 41820-020, T: (71) 3417-7500, F: (71) 3417-7698, www.pwc.com.br
Madeira Energia S.A. - MESA
and its subsidiary
All amounts in thousands of reais
|
|
|
| December 31, |
| December 31, |
|
Assets |
| Note |
| 2016 |
| 2015 |
|
Current assets |
|
|
|
|
|
|
|
Cash and cash equivalents |
| 4 |
| 57,974 |
| 299,963 |
|
Consumers and concessionaires |
| 5 |
| 332,552 |
| 300,931 |
|
Income tax and social contribution recoverable |
|
|
| 34,575 |
| 36,926 |
|
Taxes for offset |
| 6 |
| 1,262 |
| 14,302 |
|
Inventories |
|
|
| 42,089 |
| 23,481 |
|
Guarantee deposits |
| 7 |
| 37,771 |
| 46,147 |
|
Recoverable expenses |
| 8 |
| 34,880 |
| 830,936 |
|
Prepaid expenses |
| 9 |
| 65,809 |
| 39,351 |
|
Other assets |
|
|
| 21,948 |
| 16,182 |
|
|
|
|
|
|
|
|
|
|
|
|
| 628,860 |
| 1,608,219 |
|
|
|
|
|
|
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Income tax and social contribution recoverable |
|
|
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|
|
|
|
Taxes for offset |
| 6 |
| 1,394 |
| 1,418 |
|
Guarantee deposits |
| 7 |
| 317,557 |
| 499,028 |
|
Recoverable expenses |
| 8 |
| 891,105 |
| 32,687 |
|
Deferred income tax and social contribution |
| 10 |
| 588,161 |
| 620,581 |
|
Prepaid expenses |
| 9 |
| 209,593 |
| 13,531 |
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Other assets |
|
|
| 12 |
| 15,131 |
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| 2,007,822 |
| 1,182,376 |
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|
Property, plant and equipment |
| 11 |
| 22,242,621 |
| 21,978,007 |
|
Intangible assets |
| 12 |
| 197,780 |
| 202,379 |
|
|
|
|
| 24,448,223 |
| 23,362,762 |
|
Total assets |
|
|
| 25,077,083 |
| 24,970,981 |
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|
|
| December 31, |
| December 31, |
|
Liabilities and equity |
| Note |
| 2016 |
| 2015 |
|
Current liabilities |
|
|
|
|
|
|
|
Trade payables |
| 13 |
| 366,198 |
| 976,217 |
|
Salaries and charges payable |
|
|
| 2,668 |
| 2,678 |
|
Borrowings |
| 14.1 |
| 560,747 |
| 440,915 |
|
Debentures |
| 14.2 |
| 41,612 |
| 9,864 |
|
Taxes and contributions |
| 15 |
| 53,529 |
| 31,753 |
|
Advances from customers |
| 16 |
|
|
| 86,697 |
|
Performance bond |
| 17 |
|
|
| 114,169 |
|
Regulatory and sector charges |
|
|
| 48,507 |
| 40,275 |
|
Concessions payable |
| 18 |
| 20,649 |
| 19,301 |
|
Social and environmental provisions |
| 19 |
| 116,454 |
| 63,890 |
|
Provision for contingencies |
| 20 |
| 552,478 |
| 355,973 |
|
Other liabilities |
| 21 |
| 731,353 |
| 9,725 |
|
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|
| 2,494,195 |
| 2,151,457 |
|
Non-current liabilities |
|
|
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|
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Borrowings |
| 14.1 |
| 10,445,639 |
| 10,427,165 |
|
Debentures |
| 14.2 |
| 4,020,316 |
| 3,634,073 |
|
Taxes and contributions |
| 15 |
| 26,737 |
| 38,377 |
|
Advances from customers |
| 16 |
|
|
| 260,941 |
|
Performance bond |
| 17 |
| 350,157 |
| 219,590 |
|
Concessions payable |
| 18 |
| 241,439 |
| 226,896 |
|
Obligations tied to the concession |
|
|
| 8,655 |
| 5,653 |
|
Social and environmental provisions |
| 19 |
| 263,482 |
| 266,602 |
|
Provision for contingencies |
| 20 |
| 27,868 |
| 10,983 |
|
Other provisions |
| 22 |
| 520,940 |
| 210,325 |
|
Deferred income tax and social contribution |
| 23 |
| 259,038 |
| 267,822 |
|
|
|
|
| 16,164,271 |
| 15,568,427 |
|
Total liabilities |
|
|
| 18,658,466 |
| 17,719,884 |
|
Equity |
| 24 |
|
|
|
|
|
Share capital |
|
|
| 9,546,672 |
| 9,761,952 |
|
Accumulated losses |
|
|
| (3,128,055 | ) | (2,510,855 | ) |
|
|
|
| 6,418,617 |
| 7,251,097 |
|
Total liabilities and equity |
|
|
| 25,077,083 |
| 24,970,981 |
|
The accompanying notes are an integral part of these financial statements.
Madeira Energia S.A. - MESA
and its subsidiary
Consolidated Statement of operations
Years ended December 31
All amounts in thousands of reais unless when otherwise stated
|
| Note |
| 2016 |
| 2015 |
| 2014 |
|
Net operating revenue |
| 26 |
| 2,802,554 |
| 2,604,869 |
| 2,343,960 |
|
Net revenue from sale of energy |
|
|
| 2,802,554 |
| 2,604,869 |
| 2,520,600 |
|
Share of net loss related to the 2nd advance schedule |
|
|
|
|
|
|
| (176,640 | ) |
Cost of electric energy service |
| 27 | (a) | (1,844,691 | ) | (2,082,620 | ) | (3,686,398 | ) |
Cost of sale of electric energy |
|
|
| (961,370 | ) | (1,393,144 | ) | (3,042,482 | ) |
Cost of operation |
|
|
| (883,321 | ) | (689,476 | ) | (643,916 | ) |
Gross operating income |
|
|
| 957,863 |
| 522,249 |
| (1,342,438 | ) |
General and administrative expenses |
| 27 | (b) | (146,593 | ) | (152,229 | ) | (139,184 | ) |
Other revenues / (expenses) |
|
|
| 685 |
| (36 | ) | 364 |
|
Operating income (loss) |
|
|
| 811,955 |
| 369,984 |
| (1,481,258 | ) |
Finance income |
| 28 |
| 146,200 |
| 156,717 |
| 64,533 |
|
Finance costs |
| 28 |
| (1,551,719 | ) | (1,123,658 | ) | (797,759 | ) |
Finance costs, net |
|
|
| (1,405,519 | ) | (966,941 | ) | (733,226 | ) |
Loss before income tax and social contribution |
|
|
| (593,564 | ) | (596,957 | ) | (2,214,484 | ) |
Income tax and social contribution - current |
|
|
|
|
|
|
| (49 | ) |
Income tax and social contribution - deferred |
|
|
| (23,636 | ) | 614,983 |
| 6,473 |
|
(Loss)/profit for the year |
|
|
| (617,200 | ) | 18,026 |
| (2,208,060 | ) |
Basic and diluted (loss)/ earnings per thousand common shares (in reais) |
| 25 |
| (60.13 | ) | 1.86 |
| (287.12 | ) |
The accompanying notes are an integral part of these financial statements.
Madeira Energia S.A. - MESA
and its subsidiary
Consolidated Statement of comprehensive (loss) income
Years ended December 31
All amounts in thousands of reais
|
| 2016 |
| 2015 |
| 2014 |
|
Net (loss) income for the year |
| (617,200 | ) | 18,026 |
| (2,208,060 | ) |
Comprehensive (loss) income for the year |
| (617,200 | ) | 18,026 |
| (2,208,060 | ) |
Comprehensive (loss) income for the year attributable to the stockholders of the Company |
| (617,200 | ) | 18,026 |
| (2,208,060 | ) |
The accompanying notes are an integral part of these financial statements.
Madeira Energia S.A. - MESA
and its subsidiary
Consolidated Statement of changes in equity
All amounts in thousands of reais
|
| Note |
| Subscribed |
| Unpaid |
| Retained earnings |
| Advance for future capital |
| Total |
|
At January 1, 2014 |
|
|
| 6,746,672 |
|
|
| (320,821 | ) |
|
| 6,425,851 |
|
Total comprehensive income (loss) for the year |
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit for the year |
|
|
|
|
|
|
| (2,208,060 | ) |
|
| (2,208,060 | ) |
Total comprehensive loss for the year |
|
|
|
|
|
|
| (2,208,060 | ) |
|
| (2,208,060 | ) |
Total contribution by stockholders |
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital increase on 2.18.2014 |
|
|
| 200,000 |
|
|
|
|
|
|
| 200,000 |
|
Capital increase on 3.25.2014 |
|
|
| 200,000 |
|
|
|
|
|
|
| 200,000 |
|
Capital increase on 8.05.2014 |
|
|
| 350,000 |
|
|
|
|
|
|
| 350,000 |
|
Capital increase on 9.05.2014 |
|
|
| 850,000 |
|
|
|
|
|
|
| 850,000 |
|
AFCI received on 10.3.2014 |
|
|
|
|
|
|
|
|
| 295,740 |
| 295,740 |
|
Capital subscrited on 10.21.2014 |
|
|
| 1,415,280 |
| (1,415,280 | ) |
|
|
|
| — |
|
Capital increase on 10.21.2014 |
|
|
|
|
| 483,635 |
|
|
| (150,660 | ) | 332,975 |
|
Capital increase on 10.22.2014 |
|
|
|
|
| 326,365 |
|
|
|
|
| 326,365 |
|
Capital increase on 10.27.2014 |
|
|
|
|
| 232,800 |
|
|
| (55,800 | ) | 177,000 |
|
Capital increase on 12.9.2014 |
|
|
|
|
| 66,234 |
|
|
| (21,204 | ) | 45,030 |
|
Total contribution by stockholders |
|
|
| 3,015,280 |
| (306,246 | ) | — |
| 68,076 |
| 2,777,110 |
|
At December 31, 2014 |
| 24 |
| 9,761,952 |
| (306,246 | ) | (2,528,881 | ) | 68,076 |
| 6,994,901 |
|
Total comprehensive income (loss) for the year |
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit for the year |
|
|
|
|
|
|
| 18,026 |
|
|
| 18,026 |
|
Total comprehensive loss for the year |
|
|
|
|
|
|
| 18,026 |
|
|
| 18,026 |
|
Total contribution by stockholders |
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital increase on 1.8.2015 |
|
|
|
|
| 22,230 |
|
|
|
|
| 22,230 |
|
Capital increase on 1.12.2015 |
|
|
|
|
| 41,594 |
|
|
| (9,970 | ) | 31,624 |
|
Advance for future capital increase received on 1.12.2015 |
|
|
|
|
|
|
|
|
| 62,480 |
| 62,480 |
|
Capital increase on 1.21.2015 |
|
|
|
|
| 166,374 |
|
|
| (82,758 | ) | 83,616 |
|
Capital increase on 7.31.2015 |
|
|
|
|
| 76,048 |
|
|
| (37,828 | ) | 38,220 |
|
Total contribution by stockholders |
|
|
|
|
| 306,246 |
|
|
| (68,076 | ) | 238,170 |
|
At December 31, 2015 |
| 24 |
| 9,761,952 |
|
|
| (2,510,855 | ) |
|
| 7,251,097 |
|
Total comprehensive income (loss) for the year) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss for the year |
|
|
|
|
|
|
| (617,200 | ) |
|
| (617,200 | ) |
Total comprehensive income (loss) for the year |
|
|
|
|
|
|
| (617,200 | ) |
|
| (617,200 | ) |
Total contribution by stockholders |
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital increase on 3.4.2016 |
|
|
| 111,540 |
|
|
|
|
|
|
| 111,540 |
|
Capital increase on 3.7.2016 |
|
|
| 126,360 |
|
|
|
|
|
|
| 126,360 |
|
Capital increase on 3.8.2016 |
|
|
| 152,100 |
|
|
|
|
|
|
| 152,100 |
|
Return of capital increase |
|
|
| (605,280 | ) |
|
|
|
|
|
| (605,280 | ) |
Total contribution by stockholders |
|
|
| (215,280 | ) |
|
|
|
|
|
| (215,280 | ) |
At December 31, 2016 |
| 24 |
| 9,546,672 |
|
|
| (3,128,055 | ) |
|
| 6,418,617 |
|
The accompanying notes are an integral part of these financial statements.
Madeira Energia S.A. - MESA
and its subsidiary
Consolidated Statements of cash flows
Years ended December 31
All amounts in thousands of reais
|
| Note |
| 2016 |
| 2015 |
| 2014 |
|
Cash flows from operating activities |
|
|
|
|
|
|
|
|
|
Loss for the year before income tax and social contribution |
|
|
| (593,564 | ) | (596,957 | ) | (2,214,484 | ) |
Adjustments |
|
|
|
|
|
|
|
|
|
Interest and monetary variation, net |
|
|
| 1,386,879 |
| 962,876 |
| 595,696 |
|
Sale and supply of electric energy |
|
|
| (421,218 | ) | (347,615 | ) | (520,478 | ) |
Electric energy purchased for resale |
|
|
| 86,724 |
| 874,445 |
| 306,821 |
|
Network use charge |
|
|
| 121,983 |
| 73,351 |
| 60,788 |
|
Depreciation and amortization |
| 11 e 12 |
| 674,768 |
| 480,758 |
| 377,280 |
|
Advance schedule loss, net |
|
|
|
|
|
|
| 67,501 |
|
Provision for contingencies |
|
|
| 3,076 |
| 62 |
|
|
|
Other operating costs |
|
|
|
|
| 11,675 |
| 163,977 |
|
|
|
|
| 1,258,648 |
| 1,458,595 |
| (1,162,899 | ) |
Changes in assets and liabilities |
|
|
|
|
|
|
|
|
|
Consumers and concessionaires |
|
|
| 300,931 |
| 280,934 |
| 191,677 |
|
Other assets |
|
|
| (4,965 | ) | (10,685 | ) | (10,791 | ) |
Income tax and social contribution recoverable |
|
|
| 3,770 |
| 22,969 |
| (5,895 | ) |
Recoverable expenses |
|
|
| (71 | ) | 5,522 |
| 23,644 |
|
Prepaid expenses |
|
|
| (222,520 | ) | 22,790 |
| 8,652 |
|
Taxes for offset |
|
|
| 13,064 |
| 49,642 |
| (61,674 | ) |
Guarantee deposits |
|
|
| 189,847 |
| (374,071 | ) | (13,467 | ) |
Trade payables |
|
|
| (471,939 | ) | (636,061 | ) | (510,433 | ) |
Salaries and charges payable |
|
|
| (10 | ) | 541 |
| 189 |
|
Taxes and social contributions |
|
|
| 9,596 |
| (10,568 | ) | 1,168 |
|
Advances from customers |
|
|
| (270,513 | ) | 300,000 |
| 154,789 |
|
Personnel liabilities |
|
|
|
|
|
|
| 2,085 |
|
Regulatory and sector charges |
|
|
| 11,081 |
| 11,144 |
| 20,682 |
|
Other liabilities |
|
|
| 1,037 |
| (10,977 | ) | 1,386 |
|
Social and environmental provisions |
|
|
| (147,270 | ) | (47,423 | ) | (114,609 | ) |
|
|
|
| 670,686 |
| 1,062,352 |
| (1,475,496 | ) |
|
|
|
|
|
|
|
|
|
|
Receipt of Availability Factor of turbines (“FID”) |
|
|
| 144,981 |
|
|
|
|
|
Payment of interest and charges on debentures |
|
|
| (94,492 | ) | (86,506 | ) | (72,412 | ) |
Payment of interest on borrowings |
| 14.1 | (c) | (676,563 | ) | (622,487 | ) | (381,356 | ) |
Net cash provided by (used in) operating activities |
|
|
| 44,612 |
| 353,359 |
| (1,929,264 | ) |
Cash flows from investing activities |
|
|
|
|
|
|
|
|
|
Additions to property, plant and equipment |
|
|
| (360,871 | ) | (1,182,907 | ) | (1,373,516 | ) |
Additions to intangible assets |
|
|
| (9,131 | ) | (14,156 | ) | (17,057 | ) |
Payment for the use of public property - concession |
| 18 |
| (20,068 | ) | (18,289 | ) | (1,552 | ) |
Net cash used in investing activities |
|
|
| (390,070 | ) | (1,215,352 | ) | (1,392,125 | ) |
Cash flows from financing activities |
|
|
|
|
|
|
|
|
|
Stockholders’ capital increase |
|
|
| 390,000 |
| 175,690 |
| 2,777,110 |
|
Advance for future capital increase |
|
|
|
|
| 62,480 |
|
|
|
Issue of debentures |
|
|
|
|
|
|
| 704,941 |
|
Borrowings |
| 14.1 | (c) | 138,677 |
| 1,060,573 |
| 15,000 |
|
Payment of borrowings- Principal |
| 14.1 | (c) | (425,208 | ) | (377,916 | ) | (232,903 | ) |
Net cash provided by financing activities |
|
|
| 103,469 |
| 920,827 |
| 3,264,148 |
|
(Decrease) Increase in cash and cash equivalents, net |
|
|
| (241,989 | ) | 58,834 |
| (57,241 | ) |
Cash and cash equivalents at the beginning of the year |
| 4 |
| 299,963 |
| 241,129 |
| 298,370 |
|
Cash and cash equivalents at the end of the year |
| 4 |
| 57,974 |
| 299,963 |
| 241,129 |
|
The accompanying notes are an integral part of these financial statements.
Madeira Energia S.A. - MESA
and its subsidiary
Notes to the Consolidated financial statements
at December 31, 2016
All amounts in thousands of reais unless when otherwise stated
1 General information
Madeira Energia S.A. - MESA (“Company”) is a privately-held corporation, organized on August 27, 2007, headquartered in the city of São Paulo Brazil, whose purpose is the development of the implementation project of the Santo Antônio Hydroelectric Plant (“HEP”) in a section of the Madeira River, in the city of Porto Velho, State of Rondônia, as well as conducting all the activities necessary to the construction, operation, maintenance and exploitation of that hydroelectric plant and its associated transmission system.
On September 29, 2008, the Company gained consent of the ANEEL (“National Electric Energy Agency”) to transfer the energy generation concession to its wholly-owned subsidiary, Santo Antônio Energia S.A. (“Subsidiary”), currently responsible for the construction and exploitation of the development and facilities of restricted interest transmission of the electricity powerhouse.
The Concession Agreement between MESA and MME (“Ministério de Minas e Energia”) of Brazil, define that Santo Antônio Hydroelectric Plant (“HEP”) can be operating by MESA for 35 years as from the date of its signature, June 13, 2008.
(a) Generation capacity
The construction of the Santo Antônio HEP, which expected minimum installed capacity is 3,568 MW, with the implementation of 50 “Bulb” turbines that operate in rivers with low waterfall and large flow of water, was started in the second half of 2008. The average physical guarantee of energy of the Santo Antônio HEP, after full motorization, is of 2,424.2 MW.
At December 31, 2016, the Santo Antônio HEP has 44 generating units in commercial operation, totaling 2,218 MW of average physical guarantee. In the same period of the previous year, 2015, the Santo Antônio HEP operated with 35 generating units.
On January 3, 2017, the Santo Antonio HEP has 50 generating units in commercial operation, reaching its full generating capacity of 2,424.2 average MW of physical guarantee.
(b) Sale of electric energy
Electric energy is produced and sold by the Subsidiary as an “Independent Producer” in accordance with the Concession Agreement.
In compliance with public auction notice 05/ 2007 of the Santo Antônio HEP, which sets forth the sale of 70% (1,552.6 average MW) of the Santo Antônio HEP original project energy (2,218 average MW) guaranteed in the Regulated Contracted Environment (ACR), on July 25 and 28, 2008, the Agreements for Sale of Electric Energy in the Regulated Environment (CCEARs) were entered into through the intermediation of the Electric Energy Trading Chamber (CCEE), with the 32 purchasers that took part in auction 05/2007 - ANEEL.
The balance of 30% of the original project’s guaranteed energy (665.4 average MW), as well as the energy volume resulting from the Santo Antônio HEP expansion project (206.2 average MW), was freely sold by the Company.
Madeira Energia S.A. - MESA
and its subsidiary
Notes to the Consolidated financial statements
at December 31, 2016
All amounts in thousands of reais unless when otherwise stated
The energy related to the expansion of the Santo Antonio HEP (206.2 average MW) was sold through the 19th A-3 energy auction conducted on June 6, 2014, when the Company sold 129.6 average MW of energy net of losses. The remaining 70 average MW were sold under Agreements for Sale of Electric Energy in the Free Environment (CCEALs).
SAE sells 100% of its physical guarantee, of which 70% is sold in the Regulated Contracting Environment (ACR) and 30% in the Free Contracting Environment (ACL).
(c) Carbon credits
In 2013, the Subsidiary obtained authorization to register with the United Nations Organization (“UN”) to take part in the Clean Development Mechanism (“CDM”). With UN’s endorsement, the Santo Antônio HEP was the first large plant in commercial operation in Brazil to effectively generate carbon credits for the global market. In accordance with the CDM’s methodology, the volume of credits is equivalent to the greenhouse gases not emitted into the atmosphere, expanding the offer of energy generated from a clean and renewable source.
In 2016, the Subsidiary sold eight hundred thirty-three thousand six hundred and three (833,603) carbon credits at the United Nations Framework Convention on Climate Change (UNFCCC).
The Subsidiary recognizes carbon credit when it is sale is realized.
Santo Antônio HEP, which operates within the quota of 70.5m, has a ratio of installed nominal power/reservoir area of 8.88 W/m2, which is the double of minimum energy efficiency to generate carbon credits (4W/m2), thanks to the use of bulb turbines, responsible for generating energy using the river flow, not requiring the formation of a large reservoir.
(d) Company compliance program
With respect to Brazilian Law 12,846/13 that provides for the administrative and civil accountability of legal persons for the practice of acts against the public administration, the Company has an Integrity Program consisting of a set of internal control mechanisms and procedures aimed at detecting, avoiding and remedying irregularities against itself or against third parties, so the financial statements will be free from material misstatements. Specifically in relation to controls and mechanisms to ensure that its property, plant and equipment is free from irregularities and that the amount stated in the financial statements reflects adequately the correct amount, the Company has implemented: (i) a monthly checking procedure including the issue of an engineering monitoring report prepared by an external independent company contracted within the Company’s financing agreements, which follow the enterprise’s physical and financial schedule; (ii) physical count procedure, validation and unitization of property, plant and equipment components performed in accordance with the rules established by ANEEL based on the Electricity Sector Asset Control Manual (MCPSE); and (iii) checking by financial agents based on the analysis of invoices and other documents, to confirm the use of funds in the Santo Antônio HEP construction project. The Company has an Ethics Committee whose purpose is to promote the legitimization, compliance, and the enhancement of the guidelines of its Code of Conduct, as well as analyze and judge cases of infringement by members, partners, third parties and contracted parties.
Madeira Energia S.A. - MESA
and its subsidiary
Notes to the Consolidated financial statements
at December 31, 2016
All amounts in thousands of reais unless when otherwise stated
(e) Approval of the consolidated financial statements
In compliance with the provisions of Instruction 480/09 of the Brazilian Securities Commission (CVM), the Company’s Executive Board declares that it has discussed, reviewed, and agreed with the opinions expressed by the independent auditors in their report, and with the consolidated financial statements for the year ended December 31, 2016, which were presented to and reviewed by the Board of Directors at a meeting held on April 27, 2017, that unanimously recommended its approval in the OrdinaryGeneral Stockholders Meeting.
2 Summary of significant accounting policies
The main accounting policies applied in the preparation of the consolidated financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.
Accounting policies specific to items presented in the consolidated balance sheet, statement of operations, statement of changes in equity and statement of cash flows are presented in their respective notes.
2.1 Basis of preparation
(a) Consolidated financial statements
The consolidated financial statements have been prepared and are presented in accordance with the International Financial Reporting Standards (IFRS), issued by the International Accounting Standards Board (IASB). Additionally, aspects of the specific Brazilian legislation issued by the ANEEL, particularly regarding the structure of accounts and the way of recording events were considered, aiming at standardizing the practices with other companies of the electric sector.
(b) Changes in accounting policies and disclosures
The following new standards were issued by IASB but are not effective for 2015.
· IFRS 15 - “Revenue from Contracts with Customers” replaces IAS 11, “Construction Contracts”, IAS 18, “Revenue” and related interpretations and introduces the principles to be applied by an entity to determine the measure and recognition of revenue. Effective date is January 1, 2018. Management is yet to assess IFRS 15’s full impact.
· IFRS 9 - “Financial instruments” addresses the classification, measurement and recognition of financial assets and financial liabilities. The complete version of IFRS 9 was issued in July 2014 and is effective as from January 1, 2018. It replaces the orientation included in IAS 39 related to the classification and measurement of financial instruments. IFRS 9 maintains but simplifies the combined measurement model and establishes three main measurement categories for financial assets: amortized cost, fair value through other comprehensive income and fair value through profit or loss. It also establishes a new model for expected credit losses, replacing the current model of incurred losses. IFRS 9 relaxes the requirements for hedge effectiveness, and demands an economic relationship between the hedged item and the hedge instrument, and that the hedge rate be the same as the one used by management for risk management purposes. Management is yet to assess the full impact of its adoption.
Madeira Energia S.A. - MESA
and its subsidiary
Notes to the Consolidated financial statements
at December 31, 2016
All amounts in thousands of reais unless when otherwise stated
· IFRS 16 — “Leases”: the new standard requires lessees to recognize the liability of the future payments and the right of use of the leased asset for virtually all lease contracts, including operating leases. Certain short-term and low-value contracts may be out of the scope of this new standard. The criteria for recognition and measurement of leases in the financial statements of the lessors are substantially maintained. IFRS 16 is effective for years beginning on or after January 1, 2019 and replaces IAS 17 — “Leases” and corresponding interpretations. Management is assessing IFRS 16’s impact on adoption.
There are no other IFRSs or IFRIC interpretations that are not yet effective that would be expected to have a material impact on the Company and its subsidiary.
2.2 Financial assets — Classification, recognition and measurement
The Company and its Subsidiary classify their financial assets in the loans (Notes 14.1 — 14.2) and receivables (Notes 5 - 7) category, included receivables based on contractual rights (Note 8). The classification depends on the purpose for which the financial instruments were acquired. Management determines the classification of its financial assets upon initial recognition. Loans and receivables are initially carried at fair value and subsequently at amortized cost using the effective interest rate method.
2.3 Impairment of non-financial assets
Assets that are subject to depreciation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized when the asset’s carrying amount exceeds its recoverable amount, which represents the higher of an asset’s fair value less costs to sell and its value in use. For purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (Cash-generating units (CGU’s)). For the years ended December 31, 2016 and 2015, management did not identify indications that could require the recording of impairment losses for non-financial assets.
2.4 Impairment of financial assets
The Company assesses whether there is objective evidence that a financial asset or group of financial assets is impaired. A financial asset or group of financial assets is impaired and impairment losses are incurred only if there is objective evidence of impairment as result of one or more events occurred after the initial recognition of the assets (a “loss event”) and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated. For the year ended December 31, 2016, management did not identify objective evidence that could require the recognition of impairment losses on financial assets. However, for the year ended December 31, 2015, management recognized impairment of “Recoverable expenses” (Note 8).
2.5 Critical accounting estimates and judgment
The preparation of consolidated financial statements requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the accounting policies.
Madeira Energia S.A. - MESA
and its subsidiary
Notes to the Consolidated financial statements
at December 31, 2016
All amounts in thousands of reais unless when otherwise stated
Accounting estimates and judgment are continuously assessed and are based on the historical experience and other factors, including expected future events considered reasonable in the circumstances.
Based on assumptions, the Company and its subsidiary make estimates concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results.
The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities in the current year are related to deferred income tax and social contribution asset (Note 10), useful economic life of property, plant and equipment items (Note 12), Social and environmental provisions (Note 19) and Provisions for contingencies (Note 20).
2.6 Net working capital - negative
At December 31, 2016, the Company and its subsidiary posted excess current liabilities over current assets in the amount of R$ 1,865,335, arising mainly from the “Trade payables” (Note 13), “Other liabilities” (Note 21), “Borrowings” (Note 14.1), and Provision for contingencies (Note 20) accounts.
To solve the status of negative working capital, the Company counts on the favorable decision of ANEEL’s administration, in accordance with the 34th Ordinary Public Meeting, when it expects to revert this debt (Note 20) item (i) FID (“Availability Factor”) of turbines R$ 552M, upon release of funds from the debt service reserve account, which will be replaced by bank guarantee, and with operating cash flow.
Upon the adjustment of the Company’s capital (Note 24), the funds contributed by MESA’s stockholders, specifically Furnas Centrais Elétricas S.A. (“Furnas”), Caixa Fundo de Investimento em Participações Amazonia Energia, and Odebrecht Energia do Brasil S.A. — will be sorted out in accordance with one of the manners permitted by corporate law, by decision of stockholders in an Extraordinary General Stockholders Meeting called for that purpose.
2.7 Intangible assets
Clarifies that the depreciation of a property, plant and equipment item based on the revenue generated by the use of the asset is not appropriate. Also states that only in rare circumstances, the amortization of an intangible asset based on revenue generated by the use of the asset may be adequate, depending on the correlation between revenue and the economic benefits generated
2.8 Trade payables
Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business. Accounts payable are classified as current liabilities if payment is due in one year or less(1). If not, they are presented as non-current liabilities.
Trade payables are recognized initially at fair value and subsequently measured at amortized cost using the effective interest rate method.
Madeira Energia S.A. - MESA
and its subsidiary
Notes to the Consolidated financial statements
at December 31, 2016
All amounts in thousands of reais unless when otherwise stated
2.9 Social and environmental provisions
In accordance Brazilian Power Accounting Guidance (MCSE - Manual Contábil do Setor Elétrico), at the start of the operation all social and environmental expenses included Operating License should be booked at fixed asset. When the project was concluded these kind of charges must be booked in P&L.
Provisions are measured at the present value of the expenditures expected to be required to settle the obligation. The increase in the provision due to the elapsed time is recognized as interest expense.
3 Financial instruments and risk management
(a) Overview
The Company and its subsidiary operate with various financial instruments, including cash and cash equivalents, trade payables and financing.
The purpose of the financial instruments operated by the Company and its subsidiary is to manage the financial availability of its operations and to hedge against the effects of interest rate variations.
Risks involved in these operations are managed by financial market mechanisms aimed at minimizing the exposure of assets and liabilities, protecting the profitability of agreements and equity of the Company and its subsidiary.
(b) Risk management
The Company and its subsidiary adopt operating and financial policies and strategies approved by their Managements, which regulate the exposure to credit risk in financial instruments, to ensure the value, liquidity, safety and profitability of its assets, and to maintain the indebtedness level and debt profile as established in the Company’s business plan and in accordance with resolutions of the Board of Directors.
The most significant financial risks to be managed by the Company and its subsidiary are:
(i) Interest rate and inflation risk
The Subsidiary is also exposed to the variation in the interest rate of borrowings. At December 31, 2016, Santo Antônio Energia S.A. had borrowings in the amount of R$ 11,006,386, of which R$ 10,419,712 (Note 14.1) related to borrowings from the National Economic and Development Bank (BNDES), pegged to the Long-Term Interest Rate (TJLP) and has R$ 4,061,928 (Note 14.2) in debentures pegged to the Extended National Consumer Price Index (IPCA).
Additionally, the Subsidiary assumed, upon execution of Concession Agreement 001/2008 for Use of public property for generation of energy, the obligation to pay to the Federal Government the total amount of R$ 379,267, in monthly installments proportionate to the annual amount of R$ 11,852, annually adjusted by the IPCA (Note 18).
At December 31, 2016, the Subsidiary does not have derivative financial instruments to hedge these risks.
Madeira Energia S.A. - MESA
and its subsidiary
Notes to the Consolidated financial statements
at December 31, 2016
All amounts in thousands of reais unless when otherwise stated
(ii) Credit risk
Credit risk of the counterparty is the risk existing due to the counterparty’s inability to comply with its financial obligations to the Company or its Subsidiary due to insolvency.
Aiming at managing this risk, the Company’s and its subsidiary’s relationships with financial institutions are only with prime institutions with ratings provided by international agencies such as Fitch Rating, Standard & Poor’s and Moody’s Investor and duly approved by the Company’s Board of Directors through the Financial Risk Management Policy.
Part of the Subsidiary’s agreements for sale of energy is backed by rules of the commercialization of electric energy in regulated environment. Additionally, the Subsidiary seeks to minimize its credit risks through guarantee mechanisms involving receivables from its customers and, when applicable, by means of bank guarantees.
(iii) Liquidity risk
The Company and its Subsidiary permanently monitor short-, medium- and long-term, budgeted and actual cash flows, seeking to avoid possible mismatching and consequent financial losses, and to guarantee the liquidity requirements for operating needs. To solve the negative working capital, the Subsidiary counts on the decision of the 34th Ordinary Public Meeting of ANEEL’s Executive Board to revert this debt, although the final sentence was not pronounced, upon release of funds from the debt service reserve account, which will be replaced by bank guarantee, and with operating cash flow.
(iv) Hydrological risk
In view of hydrological seasonality, the energy produced by a hydroelectric plant varies greatly over time, causing an impact on the production of energy. The cyclical conditions of the system in the last few years, with low rate of flow and low storage capacity of hydroelectric power plants, have caused significant decrease of hydraulic energy generated by the Energy Reallocation Mechanism (ERM), consequently increasing the exposure of the generating agent when participating in apportionment based on the Settlement Price for Differences (PLD), causing an expenditure with the Generation Scaling Factor (GSF) on the hydroelectric generators.
Accordingly, in order to reduce the exposure to this risk, the Subsidiary decided to renegotiate the hydrological risk with ANEEL, pursuant to Law 13.203/2015, product class SP93, in accordance with Regulatory Resolution 684/2015, for its sale of electric energy agreements in the Regulated Contracting Environment (ACR). The renegotiated amount is 1,498,478 average MW of the Santo Antônio HEP (Note 1).
(v) Sensitivity analysis
Regarding the most significant risk of increased inflation, the Subsidiary estimates that, in a probable scenario, at December 31, 2016, the IPCA rate will be 4.71%. For the most significant interest rate risk, the Company and its Subsidiary estimate that, in a probable scenario, at December 31, 2017, the TJLP and CDI will be 7.50% and 10.91%, respectively.
Madeira Energia S.A. - MESA
and its subsidiary
Notes to the Consolidated financial statements
at December 31, 2016
All amounts in thousands of reais unless when otherwise stated
The Company and its Subsidiary conducted a sensitivity analysis of the effects on consolidated results arising from an increase in rates of 25% and 50% in relation to the probable scenario, considered as possible and remote, respectively.
|
|
|
|
|
| At December 31, 2017 |
| ||||
|
| Carrying amount |
| Estimated |
| Probable |
| Possible scenario |
| Remote scenario |
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents - CDI - (Note 4) |
| 57,974 |
| 10.91 | % | 64,299 |
| 65,880 |
| 67,461 |
|
Guarantee deposits (Note 7) |
| 355,328 |
| 10.91 | % | 394,094 |
| 403,786 |
| 413,477 |
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
Debentures - IPCA - (Note 14.2) |
| (4,061,928 | ) | 4.71 | % | (4,253,245 | ) | (4,301,074 | ) | (4,348,903 | ) |
Borrowings (1) - TJLP - (Note 14.1) |
| (10,419,712 | ) | 7.50 | % | (11,201,190 | ) | (11,396,560 | ) | (11,591,930 | ) |
Concessions payable - IPCA - (Note 18) |
| (262,088 | ) | 4.71 | % | (274,432 | ) | (277,518 | ) | (280,605 | ) |
Social and environmental provisions - IPCA (Note 19) |
| (379,936 | ) | 4.71 | % | (397,831 | ) | (402,305 | ) | (406,778 | ) |
Net liabilities exposed |
| (14,710,362 | ) |
|
| (15,668,305 | ) | (15,907,791 | ) | (16,147,278 | ) |
Net effect of variations |
|
|
|
|
| (957,943 | ) | (1,197,429 | ) | (1,436,916 | ) |
(1) The analysis does not consider the borrowing from Banco da Amazônia S.A., which funds arise from the Constitutional Fund for the Financing of the North Region (FNO). This borrowing is not pegged to the TJLP (Note 14.1(b)), its interest rate is fixed.
(c) Capital management
By managing its capital, the purpose of the Company and its Subsidiary is to safeguard the capacity to continue as a going concern to offer return to the stockholders and benefits to the other stakeholders, in addition to pursuing the ideal capital structure to reduce this cost.
The financial leverage ratios were:
Description |
| Note |
| December 31, |
| December 31, |
|
Borrowings |
| 14.1 |
| 11,006,386 |
| 10,868,080 |
|
Debentures |
| 14.2 |
| 4,061,928 |
| 3,643,937 |
|
Less: Cash and cash equivalents |
| 4 |
| (57,974 | ) | (299,963 | ) |
Net debt (A) |
|
|
| 15,010,340 |
| 14,212,054 |
|
Total equity |
|
|
| 6,418,617 |
| 7,251,097 |
|
Total capital (B) |
|
|
| 21,428,957 |
| 21,463,151 |
|
Financial leverage ratio (C = A/B x 100) |
|
|
| 70.05 | % | 66.22 | % |
4 Cash and cash equivalents
|
| December 31, |
| December 31, |
|
Cash funds |
| 21 |
| 24 |
|
Checking accounts |
| 2,110 |
| 18 |
|
Financial investments |
|
|
|
|
|
Bank deposit certificate (CDB) |
| 35,235 |
| 75,725 |
|
Repurchase agreements |
| 20,608 |
| 224,196 |
|
|
| 57,974 |
| 299,963 |
|
Madeira Energia S.A. - MESA
and its subsidiary
Notes to the Consolidated financial statements
at December 31, 2016
All amounts in thousands of reais unless when otherwise stated
In 2016, the average interest rate of financial investments was 100.5 % of the CDI variation. The financial investments mature in up to 15 days from the date of their contracting, are readily convertible into cash as the funds have daily liquidity, and are subject to an immaterial risk of change in value.
Financial investments by financial institution:
Financial agent |
| Type of |
| Indexing |
| December 31, |
| December 31, |
|
Banco ABC do Brasil S.A. |
| CDB |
| CDI |
| 10,056 |
|
|
|
Bradesco |
| Repurchase agreement |
| CDI |
|
|
| 657 |
|
Banco ABC do Brasil S.A. |
| CDB |
| CDI |
|
|
|
|
|
Banco do Amazonia S.A |
| CDB |
| CDI |
|
|
| 2,065 |
|
Banco Daycoval S.A. |
| CDB |
| CDI |
| 12,067 |
|
|
|
Banco do Brasil S.A. |
| Repurchase agreement |
| CDI |
| 20,609 |
| 74,948 |
|
Banco Itaú S.A |
| Repurchase agreement |
| CDI |
|
|
| 7 |
|
Banco do Nordeste do Brasil S.A. |
| CDB |
| CDI |
| 1,045 |
|
|
|
Banco Safra S.A. |
| Repurchase agreement |
| CDI |
|
|
| 74,016 |
|
Banco Santander Brasil S.A. |
| Repurchase agreement |
| CDI |
|
|
|
|
|
Banco Votorantim S.A. |
| Repurchase agreement |
| CDI |
|
|
| 74,568 |
|
Caixa Econômica Federal |
| CDB |
| CDI |
| 12,067 |
| 73,660 |
|
Other |
| — |
| — |
| 2,130 |
| 42 |
|
|
|
|
|
|
| 57,974 |
| 299,963 |
|
5 Consumers and concessionaires
|
| December 31, |
| December 31, |
|
|
| 2016 |
| 2015 |
|
Consumers - Industrial supply |
| 60,190 |
| 109,078 |
|
Concessionaires - Conventional supply |
| 272,362 |
| 191,853 |
|
|
|
|
|
|
|
|
| 332,552 |
| 300,931 |
|
Trade receivables “Consumers — supply to industries” refers to receivables from energy consumers and trade receivables “Concessionaires — conventional supply” refers to receivables from energy dealers.
The Subsidiary’s billing term is usually 15 days, so the amounts of trade receivables correspond to fair value on the selling date.
The Subsidiary did not identify any evidences that its “Trade receivables” will not be realized, therefore it did not set up a provision for impairment of trade receivables.
Madeira Energia S.A. - MESA
and its subsidiary
Notes to the Consolidated financial statements
at December 31, 2016
All amounts in thousands of reais unless when otherwise stated
6 Taxes for offset
The balance of the “Taxes for offset” account, amounting to R$ 2,656 (2015 - R$ 15,720) recorded in current and non-current assets refers substantially to withholding PIS and COFINS levied on sales.
7 Guarantee deposits
|
| December 31, |
| December 31, |
|
Current |
|
|
|
|
|
Debenture service reserve - 3rd issue |
| 10,615 |
| 11,935 |
|
Electric Energy Trading Chamber - CCEE |
| 27,156 |
| 34,212 |
|
|
| 37,771 |
| 46,147 |
|
Non-current |
|
|
|
|
|
Debt service reserve - BNDES |
| 273,001 |
| 489,012 |
|
Static reservation of debentures - 3rd issue |
| 34,387 |
|
|
|
O&M reserve - BNDES |
| 10,169 |
| 10,016 |
|
|
| 317,557 |
| 499,028 |
|
|
| 355,328 |
| 545,175 |
|
The balance of guarantee deposits in current assets comprises, respectively, the amount to cover the interest on the Company’s 3rd issue of debentures, paid semiannually, and the guarantee amount for settlement at the Electric Energy Trading Chamber (CCEE). The non-current asset for 2016 is composed by the debt service reserve account in an amount equivalent to three times the amount paid for the last installment of borrowing (BNDES direct and indirect, and FNO — Note 14.1), by the Static Reserve Account of the 3rd issue of debentures, in the amount of R$ 34,387, and by the O&M reserve account which must be kept invested during the whole term of the Fiduciary Assignment Agreement. In 2016, the debt service reserve account was composed by three times the amount of the last installment of borrowing paid. The balance of R$ 10,169 refers to the O&M reserve account.
8 Recoverable expenses
|
| December 31, 2016 |
| December 31, 2015 |
|
Current |
|
|
|
|
|
Allianz Seguros |
|
|
| 46 |
|
Consórcio Construtor Santo Antônio (i) |
|
|
| 57,000 |
|
Consórcio Construtor Santo Antônio (ii) |
|
|
| 1,452,441 |
|
(-) Provision for impairment |
|
|
| (678,551 | ) |
Energia Sustentável do Brasil S.A. (iii) |
| 34,880 |
|
|
|
|
| 34,880 |
| 830,936 |
|
Non-current |
|
|
|
|
|
Consórcio Construtor Santo Antônio (i) |
| 61,089 |
|
|
|
Consórcio Construtor Santo Antônio (ii) |
| 1,508,567 |
|
|
|
(-) Provision for impairment |
| (67 8,551 | ) |
|
|
Energia Sustentável do Brasil S.A. (iii) |
|
|
| 32,687 |
|
|
| 891,105 |
| 32,687 |
|
|
|
|
|
|
|
|
| 925,985 |
| 863,623 |
|
Madeira Energia S.A. - MESA
and its subsidiary
Notes to the Consolidated financial statements
at December 31, 2016
All amounts in thousands of reais unless when otherwise stated
Recoverable expenses refer to disbursements that do not represent expenses for the Company and which based on contractual rights will be reimbursed by its beneficiary. Expenses made by the Company, for which reimbursement is set forth in an agreement, are initially recorded in SAE”s profit or loss or in property, plant and equipment, in accordance with their nature, and separately, as a credit to reduce this expense, the Company allocates the reimbursable portion as a contra entry to “Recoverable expenses”. Refunds are recorded at the amount of the reimbursable cost incurred and restated as set forth in each agreement. The amounts recorded in current assets, related to the Construction Consortium, should be realized during the course of 2017.
(i) In accordance with the Santo AntônioHEP Implementation Agreement entered into between the Company and the Santo Antônio Construction Consortium (“CCSA”), Santo Antônio Energia S.A. must pass on to CCSA the cost for the purchase of the volume of energy at the energy tariff price resulting from the Santo Antônio HEP auction (R$ 78.87/MWh), to allow for delays in the start-up of the generating units in relation to the schedule of the 1st Amendment to the Concession Agreement;
(ii) CCSA submitted to the Company a start-up schedule advancing for the second time the start-up date of the generating units from May 1, 2012 to December 15, 2011, in accordance with the 2nd Amendment to the Concession Agreement. However, the start-up schedule of the generating units was not fully met, and the result thereof generated for the Company a reimbursement from CCSA in the amount of R$ 1,508,567. The Company’s management made, in 2014, additional analyses, including legal aspects, and changed its estimate of the asset’s realization value. Accordingly, an impairment of R$ 678,551 was recognized on the total reimbursable expenditure of R$ 1,508,567, to reflect the expected amount receivable of R$ 830,016.
To settle any doubts as to the use of the contractual limit considered in the calculation of a portion of the net result from the advance of the start-up date of the plant, established in the 2nd Amendment to the Concession Agreement entered into with the National Electric Energy Agency (“ANEEL”), which gave rise to the referred impairment, the Company filed with the International Chamber of Commerce (“ICC”) the request for arbitration proceedings before the CCSA, which is confidential in accordance with ICC’s Arbitration Regulation.
(iii) Refers to the commitment signed between the Company and Energia Sustentável do Brasil S.A. (ESBR) whereby the latter with compensate financially the Company for the change in location of the Porto Velho Collector Substation (SE Coletora), in order to satisfy the request of Porto Velho Transmissora de Energia S.A. This change has generated a cost decrease for ESBR as a result of the reduction, from what had been set forth in Public Auction Notice 006/08-ANEEL, of the extent of the transmission line which establishes the connection of the Jirau HEP with SE Coletora and an increase in the costs of the Company due to the need to increase, in relation to the provisions of Public Auction Notice 005/07-ANEEL, the extent of the transmission line which establishes the connection of the Santo Antônio HEP with SE Coletora. The commitment provides for the restatement of the balance based on the IGP-M. The Company has requested arbitration to receive its credit from ESBR.
Madeira Energia S.A. - MESA
and its subsidiary
Notes to the Consolidated financial statements
at December 31, 2016
All amounts in thousands of reais unless when otherwise stated
9 Prepaid expenses
|
| 31 de dezembro |
| 31 de dezembro de |
|
Current |
|
|
|
|
|
Insurance |
| 37,526 |
| 39,351 |
|
GSF renegotiation |
| 28,283 |
|
|
|
|
| 65,809 |
| 39,351 |
|
Non-current |
|
|
|
|
|
Insurance |
| 2,182 |
| 13,531 |
|
GSF renegotiation |
| 207,411 |
|
|
|
|
| 209,593 |
| 13,531 |
|
|
| 275,402 |
| 52,882 |
|
Pursuant to Regulatory Resolution 684/2015, in order to reduce the exposure to the GSF (Generation Scaling Factor) risk, the Company decided to renegotiate the hydrological risk with ANEEL regarding its sale of electric energy agreements in the Regulated Contracting Environment (ACR), pursuant to Law 13.203/ 2015, product class SP93, with associated risk premium of R$3.25 per MWh.
A portion of the renegotiated GSF recovered in 2015 was recognized, after its payment, as insurance premium in Assets and is amortized in 10 years and 4 months starting January 2015 and ending in April 2025.
10 Deferred income tax and social contribution
a) Composition
Income tax and social contribution recorded in the year are determined on current and deferred bases. These taxes are calculated based on the tax laws in effect on the consolidated balance sheet date and are recognized in the statement of operations. Deferred income tax and social contribution are calculated at the rates of 25% e de 9%, respectively.
Deferred income tax and social contribution are mainly recognized on: a) tax losses and social contribution tax loss carryforward; and b) FID provision — Availability Factor (Note 20) which corresponds to a temporary difference between the tax basis and the carrying amount recorded at December 31, 2016. This difference will be deductible in future years, when the provision is settled.
The total deferred tax asset amount recognized in the consolidated financial statements at December 31, 2016 is as follows:
Madeira Energia S.A. - MESA
and its subsidiary
Notes to the Consolidated financial statements
at December 31, 2016
All amounts in thousands of reais unless when otherwise stated
|
| December 31, |
| December 31, |
|
|
|
|
|
|
|
Balance at the beginning of the year |
| 620,581 |
| 12,340 |
|
|
|
|
|
|
|
Changes |
|
|
|
|
|
Temporary provisions |
|
|
|
|
|
Debenture issue transaction costs |
|
|
| (18,702 | ) |
Borrowing transaction costs |
| (1,272 | ) | (5,477 | ) |
Provision for the availability factor - FID |
| (92,635 | ) | 355,973 |
|
Tax loss/ Tax loss carryforwards |
|
|
| 1,457,095 |
|
Amortization of temporary difference |
|
|
|
|
|
Amortization - Debenture issue transaction costs |
| 2,614 |
| 3,561 |
|
Amortization - Borrowing transaction costs |
| 1,520 |
| 1,209 |
|
Amortization of use of public property |
| (1,499 | ) | (1,499 | ) |
Amortization of land |
| (74 | ) | (74 | ) |
Amortization of easements |
| (2 | ) | (2 | ) |
Amortization of preoperating expenses - Carried out in accordance with the start-up of turbines. 1/44th per month/turbine is amortized |
| (4,001 | ) | (3,140 | ) |
|
| (95,349 | ) | 1,788,944 |
|
IRPJ - 25% |
| (23,838 | ) | 447,236 |
|
CSLL - 9% |
| (8,582 | ) | 161,005 |
|
Tax charge |
| (32,420 | ) | 608,241 |
|
|
|
|
|
|
|
Balance at the end of the year |
| 588,161 |
| 620,581 |
|
Tax losses and social contribution tax loss carryforward do not expire in Brazil.
b) Realization of Corporate Income Tax (IRPJ) and Social Contribution (CSLL)
The recognition and the amount of deferred tax assets depend on the future generation of taxable income, which requires the use of estimates of the future performance of the Company and of its subsidiary. These estimates are included in the business plan that is sent annually for approval of the Board of Directors. This plan is prepared by the Executive Board, which uses as main variables the energy sales agreements entered into with its customers, operating costs and expenses based on inputs defined by the regulatory agencies, restatement of debts based on pre-established rates (especially the corporate income tax and the IPCA). These variables are obtained from specialized external consultants, from the Company’s and its subsidiary’s historical performance and from their ability to create taxable income.
Madeira Energia S.A. - MESA
and its subsidiary
Notes to the Consolidated financial statements
at December 31, 2016
All amounts in thousands of reais unless when otherwise stated
|
| Balance |
|
|
|
|
|
|
|
|
|
|
|
Assets |
| December 31, 2016 |
| 2017 |
| 2018 |
| 2019 |
| 2020 |
| After 2020 |
|
Tax losses (inc. tax) and tax loss carryforward (social cont.) |
| 495,413 |
|
|
|
|
|
|
|
|
| 495,413 |
|
Temporary provisions - FID |
| 89,535 |
| 89,535 |
|
|
|
|
|
|
| — |
|
Amortization of preoperating expenses |
| 3,356 |
| 1,328 |
| 1,007 |
| 558 |
| 378 |
| 85 |
|
Amortization of land and easements |
| 704 |
| 26 |
| 26 |
| 26 |
| 26 |
| 600 |
|
Allocation right- UPP |
| 13,761 |
| 510 |
| 510 |
| 510 |
| 510 |
| 11,721 |
|
|
| 602,769 |
| 91,399 |
| 1,543 |
| 1,094 |
| 914 |
| 507,819 |
|
Transaction costs - issue of debentures |
| 6,034 |
| 889 |
| 889 |
| 889 |
| 889 |
| 2,478 |
|
Transaction costs - borrowings |
| 8,574 |
| 527 |
| 527 |
| 527 |
| 527 |
| 6,466 |
|
|
| 14,608 |
| 1,416 |
| 1,416 |
| 1,416 |
| 1,416 |
| 8,944 |
|
Net |
| 588,161 |
| 89,983 |
| 127 |
| (322 | ) | (502 | ) | 498,875 |
|
Deferred corporate income tax and social contribution assets are recognized on:
(i) Tax losses and social contribution tax loss carry-forward — the Subsidiary recognized in 2015 tax credit of R$ 495,413 arising from deferred income tax and social contribution, calculated on tax losses and tax loss carryforward accumulated up to December 31, 2014;
(ii) FID temporary difference — The temporary difference is related to the provision for the Availability Factor (FID) (Note 20), corresponding to the difference between the asset tax basis and the carrying amount for which this event was recorded in the consolidated financial statements at December 31, 2016. This will result in an amount deductible in future periods when the amount recorded as provision is settled;
(iii) Temporarily non-taxable expenses;
(iv) Tax expenses that will be reflected in the books in subsequent periods.
Considering the limits for using tax losses and the known impacts on the position of deferred taxes, the Company and its subsidiary estimate that it will be necessary to generate taxable income at the Subsidiary of about R$ 4,367,900 in the next years in order to realize the deferred tax assets presented at December 31, 2016.
The Company reviews annually the projection of taxable income using its business plan as basis. If such projection indicates that the taxable income will not be sufficient to absorb the deferred tax, the asset portion that will not be recovered will be written off.
Madeira Energia S.A. - MESA
and its subsidiary
Notes to the Consolidated financial statements
at December 31, 2016
All amounts in thousands of reais unless when otherwise stated
11 Property, plant and equipment
Property, plant and equipment is recorded at acquisition or construction cost. Includes the capitalization of charges on borrowings made specifically to finance projects, net of revenues earned with these funds. The measurement of capitalizable borrowing costs considers all borrowings of the Company and its subsidiary as if they were only one economic entity. These charges are being appropriated, on a monthly basis, proportionately to the number of generating units under construction.
It also includes: (a) advances to suppliers for acquisition of goods that are part of property, plant and equipment; (b) inventory of goods for application in property, plant and equipment; (c) expenditures related to environmental actions for protection, monitoring, reforestation, recovery or compensation for social and environmental impacts; and (d) other expenses incurred to conclude the plant.
|
| Average annual |
| December 31, 2016 |
| December 31, |
| ||||
|
| depreciation |
| Historical |
| Accumulated |
| Net |
| Net |
|
Property, plant and equipment in use |
|
|
|
|
|
|
|
|
|
|
|
Land |
| 3.20 | % | 67,171 |
| (5,789 | ) | 61,382 |
| 63,426 |
|
Reservoirs, dams and water mains |
| 3.34 | % | 7,872,710 |
| (659,022 | ) | 7,213,688 |
| 7,457,382 |
|
Buildings, civil works and improvements |
| 3.43 | % | 3,939,662 |
| (338,630 | ) | 3,601,032 |
| 3,734,887 |
|
Machinery and equipment |
| 4.12 | % | 8,291,298 |
| (762,944 | ) | 7,528,354 |
| 5,944,837 |
|
Furniture and fittings |
| 6.25 | % | 63 |
| (9 | ) | 54 |
| 44 |
|
Vehicles |
| 14.29 | % | 2,315 |
| (950 | ) | 1,365 |
|
|
|
Total property, plant and equipment in use |
|
|
| 20,173,219 |
| (1,767,344 | ) | 18,405,875 |
| 17,200,576 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment in progress |
|
|
|
|
|
|
|
|
|
|
|
Land |
|
|
| 105 |
|
|
| 105 |
| 483 |
|
Reservoirs, dams and water mains |
|
|
| 390,004 |
|
|
| 390,004 |
| 412,368 |
|
Buildings, civil works and improvements |
|
|
| 409,777 |
|
|
| 409,777 |
| 635,875 |
|
Machinery and equipment |
|
|
| 848,366 |
|
|
| 848,366 |
| 1,479,301 |
|
Vehicles |
|
|
| 3,854 |
|
|
| 3,854 |
| 3,844 |
|
Furniture and fittings |
|
|
| 7,709 |
|
|
| 7,709 |
| 6,448 |
|
To be apportioned |
|
|
| 1,927,680 |
|
|
| 1,927,680 |
| 1,443,975 |
|
Material in storage |
|
|
| 35,391 |
|
|
| 35,391 |
| 51,686 |
|
Advances to suppliers |
|
|
| 197,120 |
|
|
| 197,120 |
| 726,869 |
|
Other |
|
|
| 16,740 |
|
|
| 16,740 |
| 16,582 |
|
Total property, plant and equipment in progress |
|
|
| 3,836,746 |
|
|
| 3,836,746 |
| 4,777,431 |
|
Total property, plant and equipment |
|
|
| 24,009,965 |
| (1,767,344 | ) | 22,242,621 |
| 21,978,007 |
|
In 2016, the Company capitalized to property, plant and equipment the amount of R$ 375,161 (2015 - R$579,558) corresponding to charges on borrowings obtained with the specific purpose of financing the construction of the Santo Antônio HEP.
At December 31, 2016, the Company has commitments amounting to R$ 1,305 related to the Engineering, Procurement and Construction (EPC) contract for completion of the construction of the hydroelectric enterprise.
Madeira Energia S.A. - MESA
and its subsidiary
Notes to the Consolidated financial statements
at December 31, 2016
All amounts in thousands of reais unless when otherwise stated
Changes in property, plant and equipment for the years ended December 31 were as follows:
2016
|
| Net |
| Additions |
| Reclassification |
| Transfer to |
| Depreciation |
| Net |
|
Property, plant and equipment in use |
|
|
|
|
|
|
|
|
|
|
|
|
|
Land |
| 63,426 |
|
|
|
|
|
|
| (2,044 | ) | 61,382 |
|
Reservoirs, dams and water mains |
| 7,457,382 |
|
|
|
|
|
|
| (243,694 | ) | 7,213,688 |
|
Buildings, civil works and improvements |
| 3,734,887 |
|
|
|
|
|
|
| (133,855 | ) | 3,601,032 |
|
Machinery and equipment |
| 5,944,837 |
|
|
|
|
| 1,869,585 |
| (286,068 | ) | 7,528,354 |
|
Furniture and fittings |
| 44 |
|
|
|
|
| 19 |
| (9 | ) | 54 |
|
Vehicles |
|
|
|
|
|
|
| 2,315 |
| (950 | ) | 1,365 |
|
hTotal PPE in use |
| 17,200,576 |
|
|
|
|
| 1,871,919 |
| (666,620 | ) | 18,405,875 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment in progress |
|
|
|
|
|
|
|
|
|
|
|
|
|
Land |
| 483 |
|
|
| (378 | ) |
|
|
|
| 105 |
|
Reservoirs, dams and water mains |
| 412,368 |
| 87,101 |
| (109,465 | ) |
|
|
|
| 390,004 |
|
Buildings, civil works and improvements |
| 635,875 |
| 9,776 |
| (235,874 | ) |
|
|
|
| 409,777 |
|
Machinery and equipment |
| 1,479,301 |
| 172,653 |
| 436,124 |
| (1,239,712 | ) |
|
| 848,366 |
|
Vehicles |
| 3,844 |
| 2,325 |
|
|
| (2,315 | ) |
|
| 3,854 |
|
Furniture and fittings |
| 6,448 |
| 1,261 |
|
|
|
|
|
|
| 7,709 |
|
To be apportioned |
| 1,443,975 |
| 674,632 |
| 438,965 |
| (629,892 | ) |
|
| 1,927,680 |
|
Material in storage |
| 51,686 |
| 713 |
| (17,008 | ) |
|
|
|
| 35,391 |
|
Advances to suppliers |
| 726,869 |
|
|
| (529,749 | ) |
|
|
|
| 197,120 |
|
Other |
| 16,582 |
| 3,323 |
| (3,165 | ) |
|
|
|
| 16,740 |
|
Total PPE in progress |
| 4,777,431 |
| 951,784 |
| (20,551 | ) | (1,871,919 | ) |
|
| 3,836,746 |
|
Total property, plant and equipment |
| 21,978,007 |
| 951,784 |
| (20,551 | ) |
|
| (666,620 | ) | 22,242,621 |
|
Madeira Energia S.A. - MESA
and its subsidiary
Notes to the Consolidated financial statements
at December 31, 2016
All amounts in thousands of reais unless when otherwise stated
2015
|
| December 31, |
| December 31, 2015 |
| ||||||||
|
| Net |
| Additions |
| Transfer |
| Transfer to |
| Depreciation |
| Net |
|
Property, plant and equipment in use |
|
|
|
|
|
|
|
|
|
|
|
|
|
Land |
| 65,013 |
|
|
|
|
|
|
| (1,587 | ) | 63,426 |
|
Reservoirs, dams and water mains |
| 6,872,907 |
|
|
| 761,959 |
|
|
| (177,484 | ) | 7,457,382 |
|
Buildings, civil works and improvements |
| 2,365,049 |
|
|
| 1,463,184 |
|
|
| (93,346 | ) | 3,734,887 |
|
Machinery and equipment |
| 5,283,340 |
|
|
| 861,687 |
|
|
| (200,190 | ) | 5,944,837 |
|
Furniture and fittings |
|
|
|
|
| 44 |
|
|
|
|
| 44 |
|
Total PPE in use |
| 14,586,309 |
|
|
|
|
|
|
| (472,607 | ) | 17,200,576 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment in progress |
|
|
|
|
|
|
|
|
|
|
|
|
|
Land |
| 483 |
|
|
|
|
|
|
|
|
| 483 |
|
Reservoirs, dams and water mains |
| 2,018,200 |
| 440,896 |
| (1,435,817 | ) | (610,911 | ) |
|
| 412,368 |
|
Buildings, civil works and improvements |
| 475,234 |
| 256,967 |
| 1,254,479 |
| (1,350,805 | ) |
|
| 635,875 |
|
Machinery and equipment |
| 976,118 |
| 1,014,470 |
| 181,338 |
| (692,625 | ) |
|
| 1,479,301 |
|
Vehicles |
| 2,893 |
| 951 |
|
|
|
|
|
|
| 3,844 |
|
Furniture and fittings |
| 4,724 |
| 1,768 |
|
|
| (44 | ) |
|
| 6,448 |
|
To be apportioned |
| 1,578,291 |
| 298,173 |
|
|
| (432,489 | ) |
|
| 1,443,975 |
|
Material in storage |
| 45,373 |
| 6,313 |
|
|
|
|
|
|
| 51,686 |
|
Advances to suppliers |
| 1,100,364 |
| (373,495 | ) |
|
|
|
|
|
| 726,869 |
|
Other |
| 13,660 |
| 2,922 |
|
|
|
|
|
|
| 16,582 |
|
Total PPE in progress |
| 6,215,340 |
| 1,648,965 |
|
|
|
|
|
|
| 4,777,431 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total property, plant and equipment |
| 20,801,649 |
| 1,648,965 |
|
|
|
|
| (472,607 | ) | 21,978,007 |
|
The depreciation is under the straight-line method. Depreciation is based on the amount of the units in operation.
ANEEL is responsible for establishing the economic useful life of property, plant and equipment items of the Brazilian electric sector. The rates established by that agency are used to calculate indemnity at the end of the concession period and they are recognized as a reasonable estimate of the useful life of concession assets. Additionally, the depreciation of assets which are part of the Santo Antônio HEP original project is limited to the concession period, since there is no forecast of indemnity of a residual amount of these assets at the end of the concession. Accordingly, the useful lives established by ANEEL or the concession period was used as the basis to depreciate the property, plant and equipment items, whichever is the shortest period, since the Company and its subsidiary understand that the useful lives established by ANEEL represent the useful lives of assets for accounting purposes.
Based on the analysis mentioned in Note 1 (a), the managements of the Company and of the Subsidiary will operate at their optimal capacity in the estimated period. The assets are recoverable in full.
Madeira Energia S.A. - MESA
and its subsidiary
Notes to the Consolidated financial statements
at December 31, 2016
All amounts in thousands of reais unless when otherwise stated
12 Intangible assets
|
|
|
| December 31, 2016 |
| December 31, |
| ||||
|
| Average annual |
| Historical |
| Accumulated |
| Net |
| Net |
|
Intangible assets in use |
|
|
|
|
|
|
|
|
|
|
|
Permanent easement |
| 3.20 | % | 737 |
| (112 | ) | 625 |
| 649 |
|
Software |
| 20.00 | % | 14,769 |
| (7,840 | ) | 6,929 |
| 3,990 |
|
Concession right - Use of Public Property - UPP |
| 3.20 | % | 199,339 |
| (30,300 | ) | 169,039 |
| 175,418 |
|
Total intangible assets in use |
|
|
| 214,845 |
| (38,252 | ) | 176,593 |
| 180,057 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Intangible assets in progress |
|
|
|
|
|
|
|
|
|
|
|
Software |
|
|
| 16,087 |
|
|
| 16,087 |
| 17,222 |
|
Permanent easement |
|
|
| 5,100 |
|
|
| 5,100 |
| 5,100 |
|
Total intangible assets in progress |
|
|
| 21,187 |
|
|
| 21,187 |
| 22,322 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total intangible assets |
|
|
| 236,032 |
| (38,252 | ) | 197,780 |
| 202,379 |
|
13 Trade payables
|
| December 31, |
| December 31, |
|
Current |
|
|
|
|
|
Supply of electric energy |
| 12,802 |
| 13,717 |
|
CCEE (purchase of short-term energy) (i) |
| 166,827 |
| 504,755 |
|
Charges for the use of electric network (ii) |
| 121,983 |
| 73,351 |
|
Materials and services |
| 64,586 |
| 85,969 |
|
Santo Antônio Construction Consortium (iii) |
|
|
| 298,425 |
|
|
| 366,198 |
| 976,217 |
|
(i) The balance of the Electric Energy Trading Chamber (CCEE) account represents a debt position of SAE in energy purchase and sale operations carried out under that chamber. In addition to energy balance, CCEE is responsible for the collection of charges such as the Availability Factor (FID) and Generation Scaling Factor (GSF).
(ii) Charges for the use of the electric network — this is an obligation arising from agreement signed with the Electric System National Operator (ONS) and transmission concessionaires for energy transmission services. The amounts are determined based on the tariff for the use of basic network transmission and the amount of use of the transmission system contracted by Santo Antônio HEP.
Madeira Energia S.A. - MESA
and its subsidiary
Notes to the Consolidated financial statements
at December 31, 2016
All amounts in thousands of reais unless when otherwise stated
(iii) Expenses incurred with strikes and stoppages occurred between 2009 and 2013, which resulted in the increase of the costs of the EPC contract due to productivity losses and the granting of salary increases and other benefits to consortium workers, are recorded as due to the “Santo Antônio Construction Consortium” caption.
14 Borrowings and debentures
Borrowings and debentures are recognized initially at fair value, net of transaction costs incurred, and are subsequently carried at amortized cost. Any difference between the proceeds (net of transaction costs) and the total amount payable is recognized in the statement of operations over the period the borrowings are outstanding using the effective interest rate method.
Financial instruments which redemption is mandatory on a specific date are classified as liabilities.
Borrowings and debentures are classified as current liabilities unless the Company and its subsidiary have an unconditional right to defer settlement of the liability for at least 12 months from the reporting period.
Borrowing costs directly related to the acquisition, construction or production of a qualifying asset that requires a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of that asset when it is probable that future economic benefits associated with the item will flow to the entity and costs can be measured reliably (Note 11). The other borrowing costs are recognized as finance costs in the period in which they are incurred.
14.1 Borrowings
|
| Currency |
| Financial charges |
| December 31, 2016 |
| December 31, |
| |
BNDES - Indirect (a) |
| R$ |
|
| TJLP |
| 276,025 |
| 222,985 |
|
BNDES - Direct (a) |
| R$ |
|
| TJLP |
| 262,281 |
| 210,427 |
|
Transaction costs to be amortized - BNDES (a) |
|
|
|
|
| (1,558 | ) | (14,134 | ) | |
Banco da Amazônia S.A. - FNO (b) |
| R$ |
|
| Interest of 10.0% p.a. |
| 23,999 |
| 21,637 |
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
| 560,747 |
| 440,915 |
|
|
| Currency |
| Financial charges |
| December 31, 2016 |
| December 31, |
| |
BNDES - Indirect (a) |
| R$ |
|
| TJLP |
| 5,016,513 |
| 4,990,005 |
|
BNDES - Direct (a) |
| R$ |
|
| TJLP |
| 4,864,892 |
| 4,836,534 |
|
Transaction costs to be amortized - BNDES (a) |
| R$ |
|
|
|
| (24,990 | ) | (11,331 | ) |
Banco da Amazônia S.A. - FNO (b) |
| R$ |
|
| Interest of 10.0% p.a. |
| 589,224 |
| 611,957 |
|
Non-current liabilities |
|
|
|
|
| 10,445,639 |
| 10,427,165 |
| |
|
|
|
|
|
| 11,006,386 |
| 10,868,080 |
|
Madeira Energia S.A. - MESA
and its subsidiary
Notes to the Consolidated financial statements
at December 31, 2016
All amounts in thousands of reais unless when otherwise stated
(a) Banco Nacional de Desenvolvimento Econômico e Social - BNDES
The installments released arise from the borrowing from the National Bank for Economic and Social Development (BNDES), the Direct Financing Agreement 08.2.1120.1 in the amount of R$ 3,092,586 and the Repass Agreement 01/2009 in the amount of R$ 3,042,586 through financial agents. A portion of the supplementary financing funds has also been released and both the Supplementary Direct Financing Agreement 12.2.1307.1 and the Supplementary Repass Agreement 01/2013 are each in the same amount of R$ 995,000.
The referred financing agreements are intended for the implementation of the Santo Antônio HEP (Note 1). The main conditions are:
(i) Maturity of the installments — non-current (principal and charges)
|
| Non-current |
| ||||||||||||
|
| 2018 |
| 2019 |
| 2020 |
| 2021 |
| 2022 |
| After 2022 |
| Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal and charges |
| 605,016 |
| 616,713 |
| 616,713 |
| 616,713 |
| 616,713 |
| 6,809,538 |
| 9,881,406 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 605,016 |
| 616,713 |
| 616,713 |
| 616,713 |
| 616,713 |
| 6,809,538 |
| 9,881,406 |
|
(ii) Guarantees
(a) Pledge of the total number of the Subsidiary’s shares owned by the Company, which are delivered to BNDES by means of a pledge of shares and other covenants agreement;
(b) Fiduciary assignment between the Subsidiary and BNDES involving its ownership rights in view of the Concession Agreement for the Use of Public Property for the generation of electric energy, including the credit rights of its ownership related to Electric Energy Purchase and Sale Agreements (CCVEs) and the Energy Sales in Regulated Environment Agreements (CCEARs), Purchase of Carbon Emission Reduction Agreements (CCRECs), should they be signed, and conditional assignment of the agreement for the Santo Antônio Hydroelectric Plant execution project;
(c) Stockholders’ support and other covenants to ensure payment of any obligations of the financing agreement;
(d) Stockholders’ support to cover shortages that may occur during the execution of the project, in addition to frustration of the sources of funds established to be used in the project’s investments;
(e) Eletrobrás and Cemig guarantees to ensure payment of any obligations of the financing agreements and shortages that may occur during execution or frustration of the sources of funds established for the project;
(f) Supplementary stockholders’ support and other covenants to ensure payment of any obligations of the supplementary financing agreement.
Madeira Energia S.A. - MESA
and its subsidiary
Notes to the Consolidated financial statements
at December 31, 2016
All amounts in thousands of reais unless when otherwise stated
(iii) Restrictive covenants
The previously mentioned borrowing obtained by the Subsidiary from BNDES contains covenants, among other restrictive clauses, on the relation between total assets and equity, which are being duly complied with by the Company, including in 2016, except for the debt service coverage ratio (ICSD) in 2015, established by BNDES for a minimum of 1.2, for which waiver was obtained.
(b) Banco da Amazônia S.A.
The installments released arise from a financing agreement entered into by the Subsidiary and Banco da Amazônia S.A. on March 11, 2009, and approved based on Executive Board Decision 1.120/2008, of December 16, 2008, with the Company and its stockholders as intervening parties, in the total amount of R$ 503,420, which funds arise from the Constitutional Fund for the Financing of the North Region (FNO). The objective of the referred financing agreement is the implementation of the Santo Antônio Hydroelectric Plant (Note 1). The main conditions of the financing are:
(i) Maturity of the installments - non-current (principal and charges)
|
| Non-current |
| ||||||||||||
|
| 2018 |
| 2019 |
| 2020 |
| 2021 |
| 2022 |
| After 2022 |
| Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal and charges |
| 71,309 |
| 46,048 |
| 46,048 |
| 46,048 |
| 46,048 |
| 333,722 |
| 589,223 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 71,309 |
| 46,048 |
| 46,048 |
| 46,048 |
| 46,048 |
| 333,722 |
| 589,223 |
|
(ii) Guarantees and restrictive covenants
Banco da Amazônia shares the same guarantees and restrictive covenants presented in Note 14.1 (a) (ii) and (iii).
(c) Changes in borrowings
Balance at December 31, 2015 |
| 10,868,080 |
|
Financial charges accrued |
| 1,102,483 |
|
Financial charges paid |
| (676,563 | ) |
Repayment of principal |
| (425,208 | ) |
Borrowings - Insurance |
| 138,677 |
|
Transaction costs |
| (1,083 | ) |
Balance at December 31, 2016 |
| 11,006,386 |
|
|
|
|
|
Current |
| 560,747 |
|
Non-current |
| 10,445,639 |
|
Madeira Energia S.A. - MESA
and its subsidiary
Notes to the Consolidated financial statements
at December 31, 2016
All amounts in thousands of reais unless when otherwise stated
14.2 Debentures
|
|
|
|
|
|
|
|
|
| December 31, 2016 |
| December 31, 2015 |
| |||||
|
| Series |
| Unit value (in reais) |
| Remuneration |
| Principal |
| Charges |
| Transaction costs |
| Total |
| Total |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
1st issue (a) |
| 1st and 2nd |
|
|
|
|
|
|
|
|
| (50 | ) | (50 | ) | (50 | ) | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2nd issue (b) |
| Single |
| R$ | 100,000.00 |
| IPCA + interest of 6.2% p.a. |
|
|
| 31,324 |
| (560 | ) | 30,764 |
| (185 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3rd issue (c) |
| 1st |
| R$ | 10,000.00 |
| IPCA + interest of 7.05% p.a. |
|
|
| 3,523 |
| (977 | ) | 2,546 |
| 2,765 |
|
|
|
|
|
|
|
| IPCA + interest of 7.49% p.a. |
|
|
| 9,379 |
| (1,027 | ) | 8,352 |
| 7,334 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
|
|
| 44,226 |
| (2,614 | ) | 41,612 |
| 9,864 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 1,039,951 |
| 312,7 02 |
| (507 | ) | 1,352,146 |
| 1,186,072 |
|
1st issue (a) |
| 1st |
| R$ | 1,000.00 |
| IPCA + interest of 6.5% p.a. |
| 1,039,951 |
| 257,413 |
| (507 | ) | 1,296,857 |
| 1,137,570 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2nd issue (b) |
| Single |
| R$ | 100,000.00 |
| IPCA + interest of 6.2%pa.a. |
| 529,018 |
|
|
| (2,848 | ) | 526,170 |
| 520,316 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3rd issue (c) |
| 1st |
| R$ | 10,000.00 |
| IPCA + interest of 7.05% p.a. |
| 244,291 |
|
|
| (3,215 | ) | 241,076 |
| 225,747 |
|
|
|
|
|
|
| IPCA + interest of 7.49% p.a. |
| 612,123 |
|
|
| (8,056 | ) | 604,067 |
| 564,368 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Non-current liabilities |
|
|
|
|
| 3,465,334 |
| 570,115 |
| (15,133 | ) | 4,020,316 |
| 3,634,073 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
|
|
|
|
|
|
|
| 3,465,334 |
| 614,341 |
| (17,747 | ) | 4,061,928 |
| 3,643,937 |
|
(a) 1st issue
In September 2012, the entered into an agreement for the issue of 1,520,120 debentures non-convertible into shares, with real guarantee and additional guarantees, divided into two series, the first one received on October 25, 2012, in the amount of R$ 760,060 (R$ 770,448, restated up to the date of receipt) and the second series received on June 28, 2013, in the amount of R$ 760,060 (R$ 809,346, restated up to the date of receipt), with the Government Severance Indemnity Fund for Employees Investment Fund (FI-FGTS) as debenture holder, Pentágono S.A. Distribuidora de Títulose Valores Mobiliários as fiduciary agent and representative of the debenture holder, and the Company as intervening consenting party.
The objective of this issue was to raise funds for the development, implementation and construction of the Santo Antônio HEP original project and its associated transmission system for exploitation of the concession (Note 1).
FI-FGTS, as debenture holder, shares the same guarantees presented in Note 14.1 (a) (ii). The restrictive covenants of this agreement are being adequately complied with by the Subsidiary.
The 1st series of this issue matures in 15 annual installments starting 2023 and the 2nd matures in 15 annual installments starting 2024. The annual amounts of the debenture installments are stated in item (d) of this Note.
(b) 2nd issue
In December 2012, the issued 4,200 unsecured debentures, nonconvertible into shares, with additional real and fidejussory guarantee, in a single series, received on January 24, 2013, in the restated amount of R$ 424,924. The unitary nominal value of the debentures is R$ 100, totaling R$ 420,000, with Pentágono S.A. Distribuidora de Títulos e ValoresMobiliários as fiduciary agent
Madeira Energia S.A. - MESA
and its subsidiary
Notes to the Consolidated financial statements
at December 31, 2016
All amounts in thousands of reais unless when otherwise stated
representing the communion of debenture holders, and the Company as intervening consenting party.
The objective of this issue was to raise funds for the development, implementation and construction of the Santo Antônio HEP original project and its associated transmission system for exploitation of the concession (Note 1).
The debenture holders share the same guarantees presented in Note 14.1 (a) (ii). The restrictive covenants of this agreement are being adequately complied with by the Subsidiary.
Interest is paid on a semiannual basis, while the principal matures as follows: 5.5% on 12.27.2017; 17.5% on 12.27.2019, 25% on 12.27.2020; 24% on 12.27.2021; and the balance on 12.27.2022. The annual amounts of the debenture installments are stated in item (d) of this Note.
(c) 3rd issue
On April 15, 2014, the 70,000 unsecured debentures, nonconvertible into shares, with additional real and fidejussory guarantee, divided into two series, totaling R$ 700 million, for public distribution, pursuant to Instruction 400 of December 29, 2003 of the Brazilian Securities Commission (CVM), with Pentágono S.A. Distribuidora de Títulos e Valores Mobiliários as fiduciary agent and representative of the debenture holders and the Company as intervening consenting party. The two series were received between May 2 and 5, 2014, the 1st series totaling R$ 200 million (R$ 201 million restated up to the date of receipt) and the 2nd series totaling R$ 500 million (R$ 504 million, restated up to the date of receipt).
The objective of this issue was to raise funds for making viable and implementing the 50 generating units of Santo Antônio HEP.
The debenture holders of this 3rd issue share the same guarantees and restrictions presented in Note 14.1 (a) (ii) and (iii).
Interest is paid on a semiannual basis, while the principal matures as follows: 1st series — 16.4% on 4.15.2020 - 49.3% on 4.15.2021 and the balance on 4.15.2022; 2nd series — 25.1% on 4.15.2022 — 55.6% on 4.15.2023 and the balance on 4.15.2024. The annual amounts of the debenture installments are stated in item (d) of this Note.
(d) Maturity of debenture installments — non-current (principal and charges)
|
| Non-current |
| ||||||||||||
|
| 2018 |
| 2019 |
| 2020 |
| 2021 |
| 2022 |
| After 2022 |
| Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal and charges |
| — |
| 128,755 |
| 180,081 |
| 254,986 |
| 394,217 |
| 3,108,199 |
| 4,066,238 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| — |
| 128,755 |
| 180,081 |
| 254,986 |
| 394,217 |
| 3,108,199 |
| 4,066,238 |
|
Madeira Energia S.A. - MESA
and its subsidiary
Notes to the Consolidated financial statements
at December 31, 2016
All amounts in thousands of reais unless when otherwise stated
(e) Changes in debentures
Balance at December 31, 2015 |
| 3,643,937 |
|
Financial charges accrued |
| 509,868 |
|
Interest paid |
| (94,492 | ) |
Amortization of transaction costs |
| 2,615 |
|
Balance at December 31, 2016 |
| 4,061,928 |
|
|
|
|
|
Current |
| 41,612 |
|
Non-current |
| 4,020,316 |
|
15 Taxes and contributions
|
| December 31, |
| December 31, |
|
Current |
|
|
|
|
|
ICMS |
| 18,739 |
| 12,055 |
|
ICMS - tax rate difference (i) |
| 18,965 |
| 15,700 |
|
COFINS |
| 9,785 |
|
|
|
PIS |
| 2,106 |
|
|
|
INSS |
| 1,149 |
| 890 |
|
ISS |
| 776 |
| 1,145 |
|
Other |
| 2,009 |
| 1,963 |
|
|
| 53,529 |
| 31,753 |
|
Non-current |
|
|
|
|
|
ICMS - tax rate difference (i) |
| 26,737 |
| 38,377 |
|
|
| 80,266 |
| 70,130 |
|
(i) The Company opted for the tax benefit established in State Decree/RO 18.496, of January 8, 2014, which reduced to 2% the ICMS (Value-Added Tax on Sales and Service) DA (Rate Differential), arising from the receipt of goods or assets intended for the installation, construction, operation and maintenance of the hydroelectric plant in interstate transactions. The balance of the tax payable of R$ 45,702, recorded in current and non-current liabilities, corresponds to receipts recorded in the period from 2009 to June 2014 and is being paid in 60 monthly installments since July 2014. The balance of the installment payment is restated annually based on the standard fiscal unit (UPF) of the State of Rondônia subject to interest of 1% per month.
Madeira Energia S.A. - MESA
and its subsidiary
Notes to the Consolidated financial statements
at December 31, 2016
All amounts in thousands of reais unless when otherwise stated
Estimated installments of ICMS rate differential in non-current liabilities:
2018 |
| 6,597 |
|
2019 |
| 13,911 |
|
2020 |
| 6,229 |
|
|
| 26,737 |
|
16 Advances from customers
On February 6, 2015, the Company received R$ 292,395, net of taxes withheld, as advances from customers with energy sales agreement signed with Furnas Centrais Elétricas S.A., Cemig Geração e Transmissão S.A. and Odebrecht Comercializadora de Energia S.A.
The amounts advanced were amortized monthly in accordance with the supply of energy contracted and settled in 2016. Following are the changes in the above-mentioned advances:
|
| Current |
| Non-current |
|
Balance at January 1, 2015 |
| 46,684 |
|
|
|
|
|
|
|
|
|
Advances |
| 74,667 |
| 225,333 |
|
Inflation restatement |
| 12,030 |
| 35,608 |
|
Recognition of revenue |
| (46,684 | ) |
|
|
|
|
|
|
|
|
Balance at December 31, 2015 |
| 86,697 |
| 260,941 |
|
|
|
|
|
|
|
Inflation restatement |
| 1,969 |
| 9,572 |
|
Settlement of advance |
|
|
| (270,513 | ) |
Recognition of revenue |
| (88,666 | ) |
|
|
|
|
|
|
|
|
Balance at December 31, 2016 |
|
|
|
|
|
17 Performance bond
Refers to the withholding of 5% of the amount advanced on the agreements signed for the purchase of machinery and equipment for the Santo Antônio HEP, especially for the construction, transportation, and assembly of the 50 energy generating turbines and control panels. The amount withheld is the guarantee of compliance with all of the obligations set out in contract. At December 31, 2016, the amount of R$ 350,157 (2015 - R$ 333,759).
Madeira Energia S.A. - MESA
and its subsidiary
Notes to the Consolidated financial statements
at December 31, 2016
All amounts in thousands of reais unless when otherwise stated
18 Concessions payable
This refers to an obligation assumed by the Subsidiary in Concession Agreement 001/2008 for Use of Public Property (“UBP”) for the generation of energy, to pay to the Federal Government the total of R$ 379,267, in equal monthly installments, as from the date the first generating unit went into commercial operation, on March 30, 2012, up to the 35th year of concession. The payment amount is restated annually based on the IPCA. The total amount of the obligation is recorded at the total present value of the UBP until the end of the concession agreement discounted at the rate of 6.94% p.a.
The amounts of the concession were recorded in intangible assets (Note 12) as contra entry to liabilities.
(a) Changes
|
| Current |
| Non-current |
|
|
|
|
|
|
|
Balance at December 31, 2015 |
| 19,301 |
| 226,896 |
|
|
|
|
|
|
|
Restatement - IPCA |
|
|
| 41,425 |
|
Adjustment to present value |
|
|
| (5,466 | ) |
Payments |
| (20,068 | ) |
|
|
Transfers |
| 21,416 |
| (21,416 | ) |
|
|
|
|
|
|
Balance at December 31, 2016 |
| 20,649 |
| 241,439 |
|
(b) Maturities of the concession payable recorded in non-current liabilities
2018 |
| 20,427 |
|
2019 |
| 20,735 |
|
2020 |
| 21,007 |
|
2021 |
| 21,269 |
|
2022 a 2043 |
| 158,001 |
|
|
| 241,439 |
|
19 Social and environmental provisions
The Brazilian Institute of Environment and Renewable Natural Resources (IBAMA) granted environmental licenses to the Subsidiary, and they impose conditions for the construction of the development. Such obligations, that are related to environment protection actions, monitoring, reforesting, recovery and compensation for social and environmental impacts, were estimated and are monitored by the Subsidiary’s Management. These expenditures related to the construction were estimated and recorded as cost of property, plant and equipment, in Reservoir, dams and water mains. That estimate was made by the Subsidiary’s sustainability and environment area and submitted to approval by the Company’s Board of Directors at the time of approval of the Company’s business plan.
Madeira Energia S.A. - MESA
and its subsidiary
Notes to the Consolidated financial statements
at December 31, 2016
All amounts in thousands of reais unless when otherwise stated
|
| 31 de dezembro |
| December 31, |
|
Current |
|
|
|
|
|
Basic environmental programs (i) |
| 116,454 |
| 51,782 |
|
Environmental compensation (ii) |
|
|
| 12,108 |
|
|
| 116,454 |
| 63,890 |
|
Non-current |
|
|
|
|
|
Basic environmental programs (i) |
| 170,608 |
| 197,207 |
|
Environmental compensation (ii) |
| 92,874 |
| 69,395 |
|
|
| 263,482 |
| 266,602 |
|
|
|
|
|
|
|
|
| 379,936 |
| 330,492 |
|
(i) The Subsidiary’s management estimates of the social and environmental expenses that the Subsidiary will incur in order to mitigate the impact caused by the construction to the Santo Antônio HEP, in compliance with the programs established in the Installation License 540/2008 and Operation License 1,044/2011 issued by IBAMA, are recorded under the “Basic environmental programs” caption. These licenses establish that the following Basic Environmental Programs (PBA) among others, be performed:
· Groundwater Table Monitoring Program;
· Seismological Monitoring Program;
· Climate Monitoring Program;
· Flora Conservation Program;
· Fauna Conservation Program;
· Ictiofauna Conservation Program;
· Public Health Program;
· Relocation of Affected Population Program;
Madeira Energia S.A. - MESA
and its subsidiary
Notes to the Consolidated financial statements
at December 31, 2016
All amounts in thousands of reais unless when otherwise stated
(a) Changes in environmental provisions during the year ended December 31, 2016
|
| Current |
| Non-current |
|
Balance at December 31, 2015 |
| 51,782 |
| 197,207 |
|
Restatement - IPCA |
|
|
| 14,803 |
|
Payments |
| (147,189 | ) |
|
|
Additions |
| 170,459 |
|
|
|
Transfers |
| 41,402 |
| (41,402 | ) |
|
|
|
|
|
|
Balance at December 31, 2016 |
| 116,454 |
| 170,608 |
|
In accordance with the Accounting Manual of the Electric Sector (MCSE), and considering the renewal of Operation License 1041/11 for a period of 10 years, the costs arising from the extension of the Basic Environmental Programs (PBA), mentioned in item (i) were added to the social and environmental provision.
(ii) The amount recorded in “Environmental compensation”, calculated based on Law 9,985/00 and on Decree 6,848/09, corresponds to 0.5% (R$ 56,159) of the reference value of the enterprise, as defined in Operation License 1,044/11, issued by IBAMA. These funds, which are used to compensate for environmental impacts caused by the construction work and which on December 31, 2016 amount to R$ 0 in current liabilities (2015 — R$ 12,108) and R$ 92,874 in non-current liabilities (2015 - R$ 69,395), are being restated based on the SELIC, in accordance with regulatory instructions issued by IBAMA, which replaced the IPCA-e restatement index with Selic.
20 Provision for contingencies
The existing contingent liabilities and provisions are mainly linked to discussions in the legal and administrative spheres and arise mostly from labor, environmental, civil and tax lawsuits.
Based on the opinion of their external legal advisors, the Company’s and the Subsidiary’s managements classify these lawsuits in accordance with their probability of loss, as follows:
a) Probable loss — includes lawsuits whose probability of loss is higher than the probability of success or, in other words, the probability of loss is higher than 50%.
b) Possible loss — these are lawsuits whose possibility of loss is higher than remote. They may be lost, however the elements available are not sufficient or clear enough to make it possible to conclude that they will be lost or won. In terms of percentage, the probability of loss is between 25% and 50%. The Company and its Subsidiary do not set a provision for these lawsuits, which are commented on in a note.
Madeira Energia S.A. - MESA
and its subsidiary
Notes to the Consolidated financial statements
at December 31, 2016
All amounts in thousands of reais unless when otherwise stated
(a) Probable risk
|
| December 31, |
| Additions |
| December 31, |
|
| December 31, |
| Additions |
| December 31, |
|
Current |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Regulatory (i) |
| 552,478 |
| 196,505 |
| 355,973 |
|
| 355,973 |
| 355,973 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Environmental (ii) |
| 12,484 |
| 1,564 |
| 10,920 |
|
| 10,920 |
| 1,256 |
| 9,664 |
|
Civil (iii) |
| 13,709 |
| 13,646 |
| 63 |
|
| 63 |
| 63 |
|
|
|
Labor (iv) |
| 1,675 |
| 1,675 |
| — |
|
|
|
|
|
|
|
|
|
| 27,868 |
| 16,885 |
| 10,983 |
|
| 10,920 |
| 1,256 |
| 9,664 |
|
Total |
| 580,346 |
| 213,390 |
| 366,956 |
|
| 366,956 |
| 357,292 |
| 9,664 |
|
(i) Regulatory
FID (Availability Factor)
On July 31, 2015, the Federal Regional Court of the 1st Region granted the Subsidiary’s request for temporary relief to suspend the application of the Availability Factor (FID) related to the Santo Antônio HEP generating units not delivered by the Electric System National Operator (ONS). The referred decision orders that the National Electric Energy Agency (ANEEL) and the Electric Energy Trading Chamber (CCEE) adopt the procedures that are necessary for the effectiveness of such decision in the accounting and settlements and the referred chamber. The balance of R$ 552,478 represents the effect of the limits of the application of FID to the Santo Antônio HEP.
(ii) Administrative environmental
Refers to the notice of infringement issued on December 23, 2008, by the Brazilian Institute of Environment and Renewable Natural Resources (IBAMA) of R$ 7,700. The reason for the notice is to impose a fine on the Company for alleged environment-damaging behavior characterized by the alleged mortality of 11,000 kg of various species of fish as a result of possible pollution in the cofferdams of the Santo Antônio HEP, in the Madeira river, city of Porto Velho, State of Rondônia.
On January 13, 2009, the Company presented an administrative defense. On July 19, 2011, the IBAMA Technical Team informed about the increase in the amount of the fine and notified the Company to present the Final Allegations. On August 8, 2011, the Company presented a manifestation about the fine increase and Final Allegations. On November 25, 2014, the denial of the Company’s defense was received. On December 15, 2014, the Company filed an administrative appeal against the decision of denial. According to the understanding of its lawyers, a probable loss of R$ 12,484 related to the merits of the notice of infringement (2015 - R$ 10,920) and possible loss with respect to the penalty aggravations mentioned in the referred notice are expected.
(iii) Civil
This refers to an action for damages to a trader who alleges that his business premises were affected by the flooded area as a result of the construction of the hydroelectric plant. Indemnity is calculated at R$ 13,709 (2015- R$ 63)
Madeira Energia S.A. - MESA
and its subsidiary
Notes to the Consolidated financial statements
at December 31, 2016
All amounts in thousands of reais unless when otherwise stated
(b) Loss risk
At December 31, 2016, lawsuits amounting to R$ 2,891,096, shown below, are considered possible losses. These lawsuits are regularly revalued by the Company’s management and legal advisors, and do not require recognition of provisions in the consolidated financial statements.
|
| 31 de dezembro |
|
|
| de 2016 |
|
Labor |
| 28,857 |
|
Civil |
| 2,270,331 |
|
Administrative - Environmental |
| 37,734 |
|
Administrative - Tax |
| 554,174 |
|
|
| 2,891,096 |
|
Following are the main lawsuits whose risk of loss is considered possible:
(i) Labor
The Subsidiary is subsidiarily liable in various lawsuits in which the claimants seek, among others, the payment of overtime and health risk premium.
(ii) Civil
Most of the civil lawsuits refer to indemnities sought by individuals who consider that they suffer the impact of the filling of the plant’s reservoir or who intend to increase the indemnities received due to expropriations.
(iii) Administrative - environmental
Various notices of infringement related to environmental issues, such as mortality of fish and ground clearance by fire in areas of the Subsidiary.
(iv) Administrative — taxes
Administrative proceedings to discuss the non-homologation of requests for compensation formally submitted to the Special Federal Revenue Office, as well as to discuss compensation for Withholding Income Tax (IRRF) and notifications from the Municipal Department of Finance of the city of Porto Velho and from the State Secretariat of Finance of the State of Rondônia.
Madeira Energia S.A. - MESA
and its subsidiary
Notes to the Consolidated financial statements
at December 31, 2016
All amounts in thousands of reais unless when otherwise stated
21 Other liabilities
|
| December 31, 2016 |
| December 31, 2015 |
|
Current |
|
|
|
|
|
Furnas Centrais Elétricas |
| 359,959 |
|
|
|
Odebrecht Energia do Brasil |
| 174,792 |
|
|
|
Fundo de Investimento em |
|
|
|
|
|
Participações Amazonia Energia |
| 185,841 |
|
|
|
Sundry creditors |
| 10,761 |
| 9,725 |
|
|
|
|
|
|
|
|
| 731,353 |
| 9,725 |
|
The effects of the partial annulment of the capital increase go back to 2014, consequently the amount to be reimbursed to stockholders will be monetarily restated by the IGPM + interest of 1% per month.
22 Other provisions
|
| December 31, 2016 |
| December 31, 2015 |
|
CCSA (i) |
| 225,412 |
| 210,325 |
|
Consórcio Construtor Santo Antônio (ii) |
| 295,528 |
|
|
|
|
| 520,940 |
| 210,325 |
|
(i) At December 31, 2016, the amount of R$ 225,412 (2015 — R$ 210,325) refers to reimbursement to CCSA by the Company of costs related to the extension of the start-up schedule due to stoppages caused by strikes in the years from 2009 to 2013 (Act of God — force majeure events) at the Santo Antônio HEP construction site.
(ii) Expenses incurred with strikes and stoppages occurred between 2009 and 2013, which resulted in the increase of the costs of the EPC contract due to productivity losses and the granting of salary increases and other benefits to consortium workers, are recorded under the “Santo Antônio Construction Consortium” caption.
23 Deferred income tax and social contribution liability
At December 31, 2016, the deferred tax amount refers to temporary differences arising from the capitalization of financial charges.
Madeira Energia S.A. - MESA
and its subsidiary
Notes to the Consolidated financial statements
at December 31, 2016
All amounts in thousands of reais unless when otherwise stated
Changes in the deferred taxes account are as follows:
|
| December 31, |
| December 31, |
|
|
| 2016 |
| 2015 |
|
|
|
|
|
|
|
Balance at the beginning of the year |
| 267,822 |
| 274,564 |
|
|
|
|
|
|
|
Changes |
|
|
|
|
|
Amortization of capitalized charges |
| (25,836 | ) | (19,828 | ) |
|
| (25,836 | ) | (19,828 | ) |
|
|
|
|
|
|
IRPJ - 25% |
| (6,459 | ) | (4,957 | ) |
|
|
|
|
|
|
CSLL - 9% |
| (2,325 | ) | (1,785 | ) |
Tax charge |
| (8,784 | ) | (6,742 | ) |
|
|
|
|
|
|
Balance at the end of the year |
| 259,038 |
| 267,822 |
|
The Company estimates that the deferred tax liability will be realized as follows:
|
| Balance |
|
|
|
|
|
|
|
|
|
|
|
Liabilities |
| At December 31, 2016 |
| 2017 |
| 2018 |
| 2019 |
| 2020 |
| After 2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of capitalized financial charges |
| 259,038 |
| 9,465 |
| 9,465 |
| 9,465 |
| 9,465 |
| 221,178 |
|
|
| 259,038 |
| 9,465 |
| 9,465 |
| 9,465 |
| 9,465 |
| 221,178 |
|
Deferred corporate income tax and social contribution liabilities are realized through amortization of the capitalized financial charges, calculated in accordance with the end of the concession period and the progressive realization of the start-up schedule of the turbines.
24 Equity
(i) Subscribed and paid-up capital
The Company approved, at the Extraordinary Stockholders’ Meeting held on March 7, 2016, a capital increase through the issue of 573,529,412 nominative common shares, without par value, with face value of sixty-eight centavos (R$ 0.68) each, totaling R$ 390,000. The shares issued were fully paid- up on March 8, 2016.
At December 31, 2016, the Company’s subscribed and paid-up capital amounts to R$ 9,546,672 (2015 — R$ 9,761,952) divided into 9,730,201,137 (2015 — 9,761,952,724) nominative common shares, without par value, whose ownership is distributed among the following stockholders:
Madeira Energia S.A. - MESA
and its subsidiary
Notes to the Consolidated financial statements
at December 31, 2016
All amounts in thousands of reais unless when otherwise stated
|
| Amounts in R$ thousand |
|
|
| ||
|
| December 31, 2016 |
| December 31, |
| Interest (%) at December |
|
Cemig Geração e Transmissão S.A.(ii) |
| 954,667 |
| 915,667 |
| 10.00 |
|
Eletrobrás - Furnas |
| 3,723,202 |
| 3,875,302 |
| 39.00 |
|
Fundo de Investimento em Participações Amazônia Energia |
| 1,909,335 |
| 1,987,335 |
| 20.00 |
|
Odebrecht Energia do Brasil S.A. |
| 1,775,681 |
| 1,848,221 |
| 18.60 |
|
SAAG Investimentos S.A.(ii) |
| 1,183,787 |
| 1,135,427 |
| 12.40 |
|
|
|
|
|
|
|
|
|
|
| 9,546,672 |
| 9,761,952 |
| 100.00 |
|
The Arbitration filed by SAAG and CEMIG against MESA, in compliance with judgment by the Market Arbitration Chamber (CAM), partially annulled the capital increase established at the Extraordinary Stockholders’ Meeting of October 21, 2014, causing the cancelation of six hundred five million two hundred eighty thousand (605,280,000) subscribed and paid up shares, of which:
Furnas Centrais Elétricas S.A. (“Furnas”), - three hundred four million two hundred thousand (304,200,000) Caixa Fundo de Investimento em Participações Amazonia Energia — one hundred fifty-six million (156,000,000) Odebrecht Energia do Brasil S.A — one hundred forty-five million eighty thousand (145,080,000).
The effects of the partial annulment of the capital increase go back to 2014, consequently the amount to be reimbursed to stockholders, mentioned above, which have made the contribution for capital increase corresponding to their interest, will be monetarily restated by the IGPM + interest of 1% per month.
25 Earnings (loss) per share
The table below establishes the calculation of net earnings (loss) per lot of one thousand shares for the years ended December 31, 2016, 2015 and 2014 (in thousands, except for the amount per lot of one thousand shares, presented in reais):
|
| Years ended December 31 |
| ||||
|
| 2016 |
| 2015 |
| 2014 |
|
|
|
|
|
|
|
|
|
(Loss)/Profit for the year |
| (617,200 | ) | 18,026 |
| (2,208,060 | ) |
Weighted average number of common shares |
| 10,264,610,610 |
| 9,706,354,459 |
| 7,690,295,787 |
|
Basic and diluted loss per thousand common shares (in reais) |
| (60.13 | ) | 1.86 |
| (287.12 | ) |
Madeira Energia S.A. - MESA
and its subsidiary
Notes to the Consolidated financial statements
at December 31, 2016
All amounts in thousands of reais unless when otherwise stated
26 Net operating revenue
(a) Sale of electric energy
Revenue from operations with electric energy is recognized monthly in the results in accordance with the delivery of the energy volumes set forth in the energy sale and supply agreement. Revenue is not recognized if its realization is uncertain.
|
| Years ended December 31 |
| ||||
|
| 2016 |
| 2015 |
| 2014 |
|
Sale of energy to industries |
| 661,285 |
| 585,444 |
| 662,227 |
|
Supply of electric energy |
| 2,532,613 |
| 2,391,523 |
| 2,214,633 |
|
Short-term energy |
| 28,809 |
|
|
| 12,608 |
|
|
| 3,222,707 |
| 2,976,967 |
| 2,889,468 |
|
(-) Revenue deductions |
|
|
|
|
|
|
|
P & D |
| (28,026 | ) | (26,049 | ) | (25,206 | ) |
ICMS |
| (103,611 | ) | (77,884 | ) | (84,171 | ) |
PIS and COFINS |
| (288,516 | ) | (268,165 | ) | (259,491 | ) |
|
| (420,153 | ) | (372,098 | ) | (368,868 | ) |
Net revenue from sale of energy |
| 2,802,554 |
| 2,604,869 |
| 2,520,600 |
|
Share of net revenue related to 2nd advance schedule |
|
|
|
|
| (176,640 | ) |
Net operating revenue |
| 2,802,554 |
| 2,604,869 |
| 2,343,960 |
|
Revenues from the sale of energy to industry arise from the sale of energy to consumers, while the supply of electric energy represent sales to energy dealers.
At December 31, 2016, Santo Antônio HEP has 44 generating units in commercial operation, totaling 2,218 average MW of physical guarantee (Note 1).
27 Operating expenses
(a) Cost of electric energy service
|
| Years ended December 31 |
| ||||||||||||||||
|
| 2016 |
| 2015 |
| 2014 |
| ||||||||||||
|
| Cost of services |
| Cost of services |
| Cost of services |
| ||||||||||||
|
| Electric energy |
| Operations |
| Total |
| Electric energy |
| Operations |
| Total |
| Electric energy |
| Operations |
| Total |
|
Short-term energy - CCEE (i) |
| (53,803 | ) |
|
| (53,803 | ) | (700,427 | ) |
|
| (700,427 | ) | (1,782,604 | ) |
|
| (1,782,604 | ) |
Energy purchased for resale |
| (206,943 | ) |
|
| (206,943 | ) | (213,306 | ) |
|
| (213,306 | ) | (1,156,907 | ) |
|
| (1,156,907 | ) |
Use and connection charges (ii) |
| (808,085 | ) |
|
| (808,085 | ) | (585,128 | ) |
|
| (585,128 | ) | (533,204 | ) |
|
| (533,204 | ) |
Pis and Cofins credits |
| 107,461 |
|
|
| 107,461 |
| 105,717 |
|
|
| 105,717 |
| 321,428 |
|
|
| 321,428 |
|
Personnel |
|
|
| (55,555 | ) | (55,555 | ) |
|
| (47,480 | ) | (47,480 | ) |
|
| (34,558 | ) | (34,558 | ) |
Materials |
|
|
| (13,378 | ) | (13,378 | ) |
|
| (10,062 | ) | (10,062 | ) |
|
| (3,652 | ) | (3,652 | ) |
Third-party services |
|
|
| (48,260 | ) | (48,260 | ) |
|
| (29,558 | ) | (29,558 | ) |
|
| (17,065 | ) | (17,065 | ) |
Depreciation and amortization |
|
|
| (673,009 | ) | (673,009 | ) |
|
| (479,010 | ) | (479,010 | ) |
|
| (375,533 | ) | (375,533 | ) |
Other |
|
|
| (93,119 | ) | (93,119 | ) |
|
| (123,366 | ) | (123,366 | ) | 108,805 |
| (213,108 | ) | (104,303 | ) |
|
| (961,370 | ) | (883,321 | ) | (1,844,691 | ) | (1,393,144 | ) | (689,476 | ) | (2,082,620 | ) | (3,042,482 | ) | (643,916 | ) | (3,686,398 | ) |
Madeira Energia S.A. - MESA
and its subsidiary
Notes to the Consolidated financial statements
at December 31, 2016
All amounts in thousands of reais unless when otherwise stated
(i) Variation arising mainly from the reduction of the average Settlement Price for Differences (PLD) from approximately R$288.00/Mwh in 2015 to R$ 93.91/Mwh in 2016, as well as the reduction of the benefit due to the renegotiation of the Generation Scaling Factor (“GSF”) which has limited the Company’s hydrological risk in up to 7%. There was the beginning of the generation test (Expansion), as well as the FID recovery of R$ 147,872 in the period from 2012 to 2014.
(ii) Charges for the use of the electric network — is an obligation arising from agreement signed with the Electric System National Operator (ONS) and transmission concessionaires for energy transmission services. The amounts are determined based on the tariff for the use of basic network transmission and the amount of use of the transmission system contracted by Santo Antônio Energia HEP. The R$ 150 increase was caused by the startup of new turbines in this period as compared to the same period in the previous year.
(b) General and administrative expenses
|
| Years ended December 31 |
| ||||
|
| 2016 |
| 2015 |
| 204 |
|
Staff and managers of the entity |
| (34,158 | ) | (28,164 | ) | (35,195 | ) |
Materials |
| (2,061 | ) | (4,515 | ) | (4,403 | ) |
Third-party services |
| (66,349 | ) | (72,592 | ) | (57,250 | ) |
Amortization |
| (1,759 | ) | (1,748 | ) | (1,747 | ) |
Rents and leases |
| (5,632 | ) | (6,701 | ) | (5,543 | ) |
Insurance |
| (28,999 | ) | (16,646 | ) | (19,551 | ) |
Taxes |
| (1,889 | ) | (823 | ) | (433 | ) |
Other |
| (5,746 | ) | (21,040 | ) | (14,728 | ) |
|
| (146,593 | ) | (152,229 | ) | (138,850 | ) |
Madeira Energia S.A. - MESA
and its subsidiary
Notes to the Consolidated financial statements
at December 31, 2016
All amounts in thousands of reais unless when otherwise stated
28 Finance income (cost)
|
| Years ended December 31 |
| ||||
|
| 2016 |
| 2015 |
| 2014 |
|
Finance income |
|
|
|
|
|
|
|
Income from financial investments |
| 81,880 |
| 64,770 |
| 25,472 |
|
Adjustment to present value |
| 5,466 |
| 11,503 |
| 23,336 |
|
Other finance income |
| 3,128 |
| 3,312 |
| 12,600 |
|
Local currency monetary variations |
| 62,821 |
| 82,167 |
| 3,125 |
|
(-) Tax on finance Income |
| (7,095 | ) | (5,035 | ) |
|
|
|
| 146,200 |
| 156,717 |
| 64,533 |
|
Finance costs |
|
|
|
|
|
|
|
Debt charges |
| (954,632 | ) | (731,362 | ) | (537,076 | ) |
Monetary variation of debt |
| (286,184 | ) | (242,008 | ) | (80,265 | ) |
Monetary variations (Use of public property) |
| (41,425 | ) | (49,275 | ) | (31,776 | ) |
Local currency monetary variations |
| (210,626 | ) | (58,370 | ) | (40,115 | ) |
Other finance costs |
| (58,852 | ) | (42,643 | ) | (108,527 | ) |
|
| (1,551,719 | ) | (1,123,658 | ) | (797,759 | ) |
Total |
| (1,405,519 | ) | (966,941 | ) | (733,226 | ) |
Madeira Energia S.A. - MESA
and its subsidiary
Notes to the Consolidated financial statements
at December 31, 2016
All amounts in thousands of reais unless when otherwise stated
29 Related parties
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|
| Years ended December 31 |
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| Assets |
| Liabilities |
| Property, plant and equipment |
| Revenue |
|
|
| Expense |
|
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| ||||||||||
|
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|
| 31 de dezembro |
| 31 de dezembro |
| 31 de dezembro |
| 31 de dezembro |
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| Relationship with the Company |
| de 2016 |
| de 2015 |
| de 2016 |
| de 2015 |
| 2016 |
| 2015 |
| 2016 |
| 2015 |
| 2014 |
| 2016 |
| 2015 |
| 2014 |
|
Current |
|
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|
CEMIG Geração e Transmissão S.A |
| Company stockholder* |
| 33,115 |
| 27,571 |
| 1,566 |
| 87,897 |
|
|
|
|
| 426,372 |
| 463,672 |
| 781,495 |
| 18,436 |
| 23,775 |
| 10,699 |
|
CEMIG Distribuição S.A |
| Common stockholder |
| 17,636 |
| 15,639 |
|
|
|
|
|
|
|
|
| 152,783 |
| 142,826 |
| 85,747 |
|
|
|
|
|
|
|
Construtora Norberto Odebrecht |
| Common stockholder |
|
|
|
|
| 29,311 |
| 59,274 |
| 82,187 |
| 318,264 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Andrade Gutierrez Engenharia S.A |
| Common stockholder |
|
|
|
|
| 21,925 |
| 24,396 |
| 4,242 |
| 90,722 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Odebrecht Serviços e Participações |
| Common stockholder |
|
|
|
|
| 21,925 |
| 24,396 |
| 4,243 |
| 90,722 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Odebrecht Energia do Brasil S.A |
| Company stockholder* |
|
|
|
|
| 174,792 |
| — |
|
|
|
|
|
|
|
|
|
|
|
|
| 168 |
| 906 |
|
Andrade Gutierrez Participações S.A |
| Company stockholder* |
|
|
|
|
| 442 |
| 398 |
|
|
|
|
|
|
|
|
|
|
| 44 |
| 35 |
| 28 |
|
Fundo de Investimento em Participações |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amazonia Energia |
| Company stockholder* |
|
|
|
|
| 185,841 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Eletrobrás Furnas |
| Company stockholder* |
|
|
|
|
| 372,311 |
| 9,578 |
| 3,017 |
| 2,762 |
|
|
|
|
|
|
| 138,226 |
| 108,662 |
| 44,040 |
|
|
|
|
|
|
|
|
|
|
|
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|
|
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|
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|
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|
|
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|
Non-current |
|
|
|
|
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|
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|
|
|
|
|
|
|
|
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|
Andrade Gutierrez Engenharia S.A |
| Common stockholder |
| 12,287 |
| 12,358 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Construtora Norberto Odebrecht |
| Common stockholder |
| 14,272 |
| 15,204 |
| 22,459 |
| 18,992 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Odebrecht Comercializadora de Energia. S |
| Common stockholder |
|
|
|
|
|
|
| 110,398 |
|
|
|
|
|
|
|
|
|
|
| 4,050 |
| 15,065 |
|
|
|
Odebrecht Serviços e Participações |
| Common stockholder |
| 17,486 |
| 17,232 |
| 48 |
| 48 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Eletrobrás Furnas |
| Company stockholder* |
|
|
|
|
|
|
| 150,543 |
|
|
|
|
|
|
|
|
|
|
| 5,522 |
| 20,543 |
|
|
|
|
|
|
| 94,796 |
| 88,004 |
| 830,620 |
| 485,920 |
| 93,689 |
| 502,470 |
| 579,155 |
| 606,498 |
| 867,242 |
| 166,278 |
| 168,248 |
| 55,673 |
|
* Nota 24
CEMIG Geração e Transmissão S.A.—The asset balance recorded refers to two agreements for the purchase and sale of electric energy in the Free Contracting Environment entered into on March 19, 2009, in which the Subsidiary acts as the seller of energy to CEMIG of variable amounts during a big part of the motorization period of Santo Antônio HEP. One agreement is for 400 average megawatts and the other one for 250.4 average megawatts, effective between May 1, 2012 and December 31, 2027.
The liability balance is related to charges for the use of the network by the energy transmission service (Note 13) and the balance of the advance of energy volume occurred on February 6, 2015, when the Subsidiary received R$ 74,667 from Cemig Geração e Transmissão S.A. (Note 16).
CEMIG Distribuição S.A—The balance refers to the Agreement for Sale of Electric Energy in the Regulated Environment (CCEARs), related to the participation of CEMIG DistribuiçãoS.A. in ANEEL Auction 05/2007, in which 70% of Santo Antônio HEP guaranteed energy was sold. (Note 1). Cemig Distribuição purchased from the Subsidiary 117.8 average megawatts with supply term from December 31, 2012 to December 31, 2041.
Madeira Energia S.A. - MESA
and its subsidiary
Notes to the Consolidated financial statements
at December 31, 2016
All amounts in thousands of reais unless when otherwise stated
Andrade Gutierrez Engenharia S.A - The Subsidiary has an agreement for Implementation of the Santo Antônio HEP, as well as for installations of restricted interest transmission of the electricity powerhouse of Santo Antônio HEP, with the Santo Antônio Construction Consortium (CCSA), according to which Andrade Gutierrez Engenharia S.A. is the company responsible for the services of project development and civil works (Santo Antônio Civil Consortium).
Construtora Norberto Odebrecht S.A. and Odebrecht Serviços e Participações S.A - The Subsidiary has an agreement for Implementation of the Santo Antônio HEP, as well as for the restricted interest transmission installations of the Santo AntônioHEP’s electricity powerhouse with Santo Antônio Construction Consortium (CCSA), according to which Construtora Norberto Odebrecht S.A. (CNO) and OdebrechtServiços e Participações S.A. are the companies responsible for the development of project services and civil works (Santo Antônio Civil Consortium) and, additionally, CNO, for the management and performance of electromechanical assembly services.
Eletrobrás Furnas - The Subsidiary has an Owner’s Engineering Services agreement with Furnas Centrais Elétricas, which is in force from December 17, 2008 to February 28, 2016.
Eletrobrás Furnas is also contracted to provide data analysis services of the acoustic investigation of the civil structures and foundations for the Santo Antônio HEP. This agreement is in force for 30 months starting January 6, 2014.
The Subsidiary has also entered into a purchase and sale of electric energy agreement in the Free Contracting Environment, whereby the Subsidiary acts as purchaser of 47,318 average megawatts of energy from Furnas Centrais Elétricas S.A., supplied from January 1, 2015 to December 31, 2027.
On February 5, 2015, the Subsidiary signed with Furnas Centrais Elétricas S.A. an agreement for the sale of energy and received, on February 6, 2015, the amount of R$ 122,395, corresponding to R$ 130,000, net of withholding taxes, related to this sale and which is restated based on the IPCA. (Note 16).
The Subsidiary also has an agreement with Eletrobrás Furnas for transactions related to charges for the use of the network of energy transmission service. (Note 13).
Odebrecht Energia do Brasil S.A. — The Subsidiary recorded an amount related to finance costs incurred in order for the Santo Antônio HEP construction work to be carried out in accordance with the schedule established in the Concession Agreement.
Andrade Gutierrez Participações S.A. The amount recorded refers to finance costs incurred so that the Santo Antônio HEP construction would be carried out in accordance with the schedule established in the Concession Agreement. The amount is restated at TJLP plus 3.1%.
Odebrecht Comercializadora de Energia S.A. - On February 5, 2015, the Subsidiary signed with Odebrecht Comercializadora de Energia S.A. an agreement for the sale of energy and received, on February 6, 2015, the amount of R$ 95,333 related to this sale and which is restated based on the IPCA. (Note 16).
Madeira Energia S.A. - MESA
and its subsidiary
Notes to the Consolidated financial statements
at December 31, 2016
All amounts in thousands of reais unless when otherwise stated
Management compensation
|
| Years ended December 31 |
| ||||
|
| 2016 |
| 2015 |
| 2014 |
|
Compensation |
| 5,589 |
| 4,679 |
| 3,385 |
|
Profit sharing |
| 1,688 |
|
|
| 4,876 |
|
Direct and fringe benefits |
| 261 |
| 389 |
| 137 |
|
Total |
| 7,538 |
| 5,068 |
| 8,398 |
|
30 Information by segment
The only business segment of the Company and of its subsidiary is the generation of electric energy through the exploitation of the Santo Antônio Hydroelectric Plant and its associated transmission system, located at the Madeira river, in the city of Porto Velho, State of Rondônia, as an “Independent Producer”, pursuant to the conditions established in the Concession Agreement. Accordingly, Company management, which is responsible for regularly reviewing the financial information in order to allocate the funds and analyze the company’s performance, does not use segment information to carry out its analyses.
31 Subsequent events
On January 31, 2017, the International Chamber of Commerce (“ICC”) rendered a decision and judged the Company’s petitions related to the arbitration procedure filed against Energia Sustentável do Brasil (Note 8) to be partially valid.
* * *