XML 39 R32.htm IDEA: XBRL DOCUMENT
v3.8.0.1

Equity and Remuneration to Shareholders | 12 Months Ended
--- | ---
Dec. 31, 2017
Text block1 [abstract] |
Equity and Remuneration to Shareholders |
25. | EQUITY AND REMUNERATION TO SHAREHOLDERS
The Company’s issued and outstanding share capital on December 31, 2017, 2016 and 2015 is R$ 6,294, represented by 420,764,708 common shares and 838,076,946 preferred shares, all with nominal value of R$ 5.00 (five Reais), as follows:
Shareholders |  | Number of shares on December 31, 2017 |
| Common |  |  | % |  |  | Preferred |  |  | % |  |  | Total |  |  | % |
State of Minas Gerais |  |  | 214,414,739 |  |  |  | 51 |  |  |  | — |  |  |  | — |  |  |  | 214,414,739 |  |  |  | 17 |
Other entities of Minas Gerais State |  |  | 56,703 |  |  |  | — |  |  |  | 4,860,228 |  |  |  | 1 |  |  |  | 4,916,931 |  |  |  | 1 |
FIA Dinâmica Energia S.A. |  |  | 41,635,754 |  |  |  | 10 |  |  |  | 62,469,590 |  |  |  | 7 |  |  |  | 104,105,344 |  |  |  | 8 |
Others |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
In Brazil |  |  | 110,343,209 |  |  |  | 26 |  |  |  | 237,174,007 |  |  |  | 28 |  |  |  | 347,517,216 |  |  |  | 27 |
Foreign shareholders |  |  | 54,314,303 |  |  |  | 13 |  |  |  | 533,573,121 |  |  |  | 64 |  |  |  | 587,887,424 |  |  |  | 47 |
Total |  |  | 420,764,708 |  |  |  | 100 |  |  |  | 838,076,946 |  |  |  | 100 |  |  |  | 1,258,841,654 |  |  |  | 100 |
Shareholders |  | Number of shares on December 31, 2016 |
| Common |  |  | % |  |  | Preferred |  |  | % |  |  | Total |  |  | % |
State of Minas Gerais |  |  | 214,414,739 |  |  |  | 51 |  |  |  | — |  |  |  | — |  |  |  | 214,414,739 |  |  |  | 17 |
Other entities of Minas Gerais State |  |  | 56,703 |  |  |  | — |  |  |  | 4,860,228 |  |  |  | 1 |  |  |  | 4,916,931 |  |  |  | 1 |
AGC Energia S.A. |  |  | 84,357,856 |  |  |  | 20 |  |  |  | — |  |  |  | — |  |  |  | 84,357,856 |  |  |  | 7 |
Other |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
In Brazil |  |  | 112,584,011 |  |  |  | 27 |  |  |  | 252,478,755 |  |  |  | 30 |  |  |  | 365,062,766 |  |  |  | 28 |
Foreign shareholders |  |  | 9,351,399 |  |  |  | 2 |  |  |  | 580,737,963 |  |  |  | 69 |  |  |  | 590,089,362 |  |  |  | 47 |
Total |  |  | 420,764,708 |  |  |  | 100 |  |  |  | 838,076,946 |  |  |  | 100 |  |  |  | 1,258,841,654 |  |  |  | 100 |
Shareholders |  | Number of shares on December 31, 2015 |
| Common |  |  | % |  |  | Preferred |  |  | % |  |  | Total |  |  | % |
Minas Gerais State |  |  | 214,414,739 |  |  |  | 51 |  |  |  | — |  |  |  | — |  |  |  | 214,414,739 |  |  |  | 17 |
Other entities of M.G. State |  |  | 56,703 |  |  |  | — |  |  |  | 10,418,812 |  |  |  | 1 |  |  |  | 10,475,515 |  |  |  | 1 |
AGC Energia S.A. |  |  | 138,700,848 |  |  |  | 33 |  |  |  | 42,671,763 |  |  |  | 5 |  |  |  | 181,372,611 |  |  |  | 15 |
Others |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
In Brazil |  |  | 58,127,167 |  |  |  | 14 |  |  |  | 179,358,041 |  |  |  | 21 |  |  |  | 237,485,208 |  |  |  | 18 |
Foreign shareholders |  |  | 9,465,251 |  |  |  | 2 |  |  |  | 605,628,330 |  |  |  | 73 |  |  |  | 615,093,581 |  |  |  | 49 |
Total |  |  | 420,764,708 |  |  |  | 100 |  |  |  | 838,076,946 |  |  |  | 100 |  |  |  | 1,258,841,654 |  |  |  | 100 |
(a) | Earnings per share
In view of the capital increase described in more detail in subclause ‘e’ of this explanatory note, the calculation of the basic and diluted earnings taking into account the new shares that will potentially be subscribed, as follows:
Number of shares |  | 2017 |  |  | 2016 |  |  | 2015 |
Common shares already paid up |  |  | 420,764,708 |  |  |  | 420,764,708 |  |  |  | 420,764,708 |
Common shares to be paid up |  |  | 66,849,505 |  |  |  | — |  |  |  | — |
Shares in treasury |  |  | (69 | ) |  |  | (69 | ) |  |  | (69 | )
|  |  | 487,614,144 |  |  |  | 420,764,639 |  |  |  | 420,764,639 |
Preferred shares already paid up |  |  | 838,076,946 |  |  |  | 838,076,946 |  |  |  | 838,076,946 |
Preferred shares to be paid up |  |  | 133,061,442 |  |  |  | — |  |  |  | — |
Shares in treasury |  |  | (560,649 | ) |  |  | (560,649 | ) |  |  | (560,649 | )
|  |  | 970,577,739 |  |  |  | 837,516,297 |  |  |  | 837,516,297 |
Total |  |  | 1,458,191,883 |  |  |  | 1,258,280,936 |  |  |  | 1,258,280,936 |
Basic earnings per share The Company’s preferred shares carry the right to a minimum mandatory dividend, as shown in more detail in item ‘c’. The calculation of basic earnings per share is as follows:
|  | 2017 |  |  | 2016 |  |  | 2015 |
Net income for the year |  |  | 1,001 |  |  |  | 334 |  |  |  | 2,469 |
Minimum mandatory dividend for preferred shares from income for the period (item c) |  |  | 486 |  |  |  | 204 |  |  |  | 422 |
Income not distributed arising from the net income for the year – preferred shares |  |  | 333 |  |  |  | 87 |  |  |  | 1,221 |
Total of the earnings for the preferred shares (A) |  |  | 819 |  |  |  | 291 |  |  |  | 1,643 |
Minimum mandatory dividend for the common shares |  |  | 15 |  |  |  | — |  |  |  | 212 |
Income not distributed arising from the net income for the period – common shares |  |  | 167 |  |  |  | 44 |  |  |  | 614 |
Total earnings for the common shares (B) |  |  | 182 |  |  |  | 44 |  |  |  | 826 |
Basic earnings per preferred share ( A / number of preferred shares ) |  |  | 0.84 |  |  |  | 0.35 |  |  |  | 1.96 |
Basic earnings per common share ( B / number of common shares ) |  |  | 0.37 |  |  |  | 0.10 |  |  |  | 1.96 |
Diluted profit per share The call and put options in shares of investees, described in more detail in Note 30, have potential to dilute the Company’s shares. The following shows the calculation of diluted profit per share:
|  | 2017 |  |  | 2016 |  |  | 2015 |
Net income for the year |  |  | 1,001 |  |  |  | 334 |  |  |  | 2,469 |
Total basic earnings for the preferred shares |  |  | 819 |  |  |  | 291 |  |  |  | 1,643 |
Dilution effect related to the RME/Lepsa Option |  |  | — |  |  |  | (22 | ) |  |  | — |
Dilution effect related to the Ativas Option |  |  | — |  |  |  | (5 | ) |  |  | — |
Diluted earnings for the preferred shares (C) |  |  | 819 |  |  |  | 264 |  |  |  | 1,643 |
Total earnings for the year for the common shares |  |  | 182 |  |  |  | 43 |  |  |  | 826 |
Dilution effect related to the RME/Lepsa Option |  |  | — |  |  |  | (11 | ) |  |  | — |
Dilution effect related to the Ativas Option |  |  | — |  |  |  | (2 | ) |  |  | — |
Diluted earnings for the common shares (D) |  |  | 182 |  |  |  | 30 |  |  |  | 826 |
Diluted earnings per preferred share ( C / No. of preferred shares ) |  |  | 0.84 |  |  |  | 0.32 |  |  |  | 1.96 |
Diluted earnings per common share ( D / No. of common shares ) |  |  | 0.37 |  |  |  | 0.07 |  |  |  | 1.96 |
Shareholders’ agreement On August 1, 2011, the government of Minas Gerais State signed a Shareholders’ Agreement with AGC Energia S.A., with BNDES Participações S.A. as consenting party, valid for 15 years. The agreement maintained the State of Minas Gerais as dominant, sole and sovereign equity holder of the Company, and attributes to AGC Energia certain prerogatives for the purpose of contributing to the sustainable growth of the Company, among other provisions. On September 7, 2017 AGC Energia unilaterally resiled the Shareholders’ agreement.
(b) | Reserves
Capital reserves and Profit reserves are made up as follows:
Capital reserves and shares in Treasury |  | 2017 |  |  | 2016 |  |  | 2015 |
Investment-related subsidies |  |  | 1,857 |  |  |  | 1,857 |  |  |  | 1,857 |
Goodwill on issuance of shares |  |  | 69 |  |  |  | 69 |  |  |  | 69 |
Shares in treasury |  |  | (1 | ) |  |  | (1 | ) |  |  | (1 | )
|  |  | 1,925 |  |  |  | 1,925 |  |  |  | 1,925 |
The Reserve for investment-related donations and subsidies basically refers to the compensation by the federal government for the difference between the profitability obtained by Cemig up to March 1993 and the minimum return guaranteed by the legislation in effect at the time. The reserve for treasury shares refers to the pass-through by Finor of shares arising from funds applied in Cemig projects in the area covered by Sudene (the development agency for the Northeast) under tax incentive programs.
Profit reserves |  | 2017 |  |  | 2016 |  |  | 2015 |
Legal reserve |  |  | 853 |  |  |  | 853 |  |  |  | 853 |
Statutory Reserve |  |  | 57 |  |  |  | 57 |  |  |  | 57 |
Retained Earnings reserve |  |  | 3,341 |  |  |  | 2,813 |  |  |  | 2,906 |
Incentives tax reserve |  |  | 58 |  |  |  | 57 |  |  |  | 50 |
Reserve for mandatory dividends not distributed |  |  | 1,420 |  |  |  | 1,420 |  |  |  | 797 |
|  |  | 5,729 |  |  |  | 5,200 |  |  |  | 4,663 |
Legal Reserve Constitution of the Legal Reserve is mandatory, up to the limits established by law. The purpose of the reserve is to ensure the security of the share capital, its use being allowed only for offsetting of losses or increase capital. The Company did not record Legal Reserve due to that reserve having reached its legal limit. Statutory reserve The Reserve under the By-laws is for future payment of extraordinary dividends, in accordance with Article 28 of the by-laws. Retained earnings reserve The Retained Earnings Reserves are for profits not distributed in prior years, to guarantee execution of the Company’s Investment Program, and amortizations of loans and financings planned for 2018. The retentions are supported by capital budgets approved by the Board of Directors in the related periods. Incentives Tax reserve The federal tax authority (‘Receita Federal’) recognized the right of the subsidiaries Cemig D and Cemig GT to reduction of 75% in income tax, including the tax paid at the additional rate, calculated on the basis of the operating profit in the region of Sudene (the Development Agency for the Northeast), for 10 years starting in 2014. The amount of the incentive recognized in the Statement of income was R$ 1 in 2017 (R$ 7 in 2016 and R$ 21 in 2015), and it was subsequently transferred to the Incentives Tax reserve. The amount of the Tax incentives reserve on December 31, 2017 was R$ 58 (R$ 57 at December 31, 2016). This reserve cannot be used for payment of dividends.
(c) | Dividends
Reserve for mandatory dividends not distributed
|  | 2017 |
Dividends withheld, arising from the net income of 2015 |  |  | 623 |
Dividends withheld, arising from the net income of 2014 |  |  | 797 |
|  |  | 1,420 |
These dividends were retained in Equity, in years 2015 and 2014, in the account Reserve for mandatory dividends not distributed; and as per the proposal approved in the Annual General Meetings of 2016 and 2015, the dividends retained will be paid as soon as the Company’s financial situation permits. Common dividends Under its by-laws, Cemig is required to pay to its shareholders, as mandatory dividends, 50% of the net income of each year. The preferred shares have preference in the event of reimbursement of capital and participate in profits on the same conditions as the common shares. They have the right, when there is profit, to a minimum annual dividend equal to the greater of:
| (a) | 10% of their par value, and
| (b) | 3% of the portion of equity that they represent.
Under its by-laws, Cemig’s shares held by private individuals and issued up to August 5, 2004 have the right to a minimum dividend of 6% per year on their par value in all years when Cemig does not obtain sufficient profits to pay dividends to its Shareholders. This guarantee is given by the State of Minas Gerais by Article 9 of State Law 828 of December 14, 1951 and by State Law 15,290 of August 4, 2004. Under the by-laws, if the Company is able to pay dividends higher than the mandatory minimum dividends required for the preferred Shareholders, and the remaining net income is sufficient to offer equal dividends for both the common and preferred shares, then the dividend per share will be the same for the holders of common shares and preferred shares. Dividends declared are paid in two equal installments, the first by June 30 and the second by December 30, of the year following the generation of the profit to which they refer. The Executive Board decides the location and processes of payment, subject to these periods. Under the proposal for capital increase approved by the General Meeting of October 26, 2017 it was decided that the subscribed shares (described in more detail in subclause ‘e’ of this Note) have the full right to all benefits, including dividends and/or Interest on Equity, that are declared by the Company; and the calculations of the minimum dividends proposed for distribution to Shareholders already takes into account the full capitalization of the new preferred shares originating from the capital increase, to be assessed and completed on the occasion of the Extraordinary General Meeting to be called for ratification of the capital increase. The calculation of the minimum dividends proposed for distribution to Shareholders as a result of the 2017, as mentioned in the previous paragraph, is as follows:
|  | 2017 |  |  | 2016 |  |  | 2015 |
Calculation of Minimum Dividends required by the By-laws for the preferred shares |  |  |  |  |  |  |  |  |  |  |  |
Nominal value of the preferred shares |  |  | 4,191 |  |  |  | 4,190 |  |  |  | 4,190 |
Nominal value of the preferred shares to be capitalized |  |  | 665 |  |  |  | — |  |  |  | — |
|  |  | 4,856 |  |  |  | 4,190 |  |  |  | 4,190 |
Percentage applied to the nominal value of the preferred shares |  |  | 10.00 | % |  |  | 10.00 | % |  |  | 10.00 | %
Amount of the dividends by the First payment criterion |  |  | 486 |  |  |  | 419 |  |  |  | 419 |
Equity |  |  | 14,326 |  |  |  | 12,930 |  |  |  | 12,984 |
Preferred shares as a percentage of Equity (net of shares held in Treasury) |  |  | 66.58 | % |  |  | 66.58 | % |  |  | 66.58 | %
Portion of Equity represented by the preferred shares |  |  | 9,538 |  |  |  | 8,609 |  |  |  | 8,645 |
Percentage applied to the portion of Equity represented by the preferred shares |  |  | 3.00 | % |  |  | 3.00 | % |  |  | 3.00 | %
Amount of the dividends by the Second payment criterion |  |  | 286 |  |  |  | 258 |  |  |  | 259 |
Minimum Dividends required by the Bylaws for the preferred shares |  |  | 486 |  |  |  | 419 |  |  |  | 419 |
Calculation of the Minimum Dividend under the by-laws based on the net income for the period |  |  |  |  |  |  |  |  |  |  |  |
Mandatory dividend |  |  |  |  |  |  |  |  |  |  |  |
Net income for the year |  |  | 1,001 |  |  |  | 334 |  |  |  | 2,469 |
Mandatory dividends – 50% of Net income |  |  | 500 |  |  |  | 167 |  |  |  | 1,235 |
In 2017 the mandatory minimum dividends under the by-laws for the preferred shares is R$ 486. Allocation of Net income for 2017 – Management’s Proposal The Board of Directors decided to propose to the annual General Meeting of Shareholders to be held on April 30, 2018 that the profit for 2018, in the amount of R$ 1,001, and retained earnings, of R$ 28, should be allocated as follows:
| • |  | R$ 486 for payment of the mandatory minimum dividend to holders of preferred shares whose names are in the Company’s Nominal Share Registry on the date of the AGM.
| • |  | R$ 14 to payment of the mandatory minimum dividend to holders of common shares whose names are in the Company’s Nominal Share Registry on the date of the AGM.
| • |  | R$ 528 to be held in Equity in the Retained earnings reserve, to ensure the Company’s consolidated investments planned for 2018, as per capital budget.
| • |  | R$ 1 to be held in Equity in the Incentives Tax reserve, in reference to the tax incentive amounts obtained in 2017 in relation to the investments made in the region of Sudene.
(d) | Equity valuation adjustments
|  | 2017 |  |  | 2016 |  |  | 2015 |
Deemed cost of PP&E |  |  | 639 |  |  |  | 685 |  |  |  | 720 |
Accumulated Other Comprehensive Income |  |  |  |  |  |  |  |  |  |  |  |
Variation in fair value of financial asset available for sale in jointly-controlled entity |  |  | — |  |  |  | 37 |  |  |  | 18 |
Cumulative translation adjustments |  |  | — |  |  |  | — |  |  |  | 63 |
Adjustments to actuarial liabilities – Employee benefits |  |  | (1,476 | ) |  |  | (1,211 | ) |  |  | (699 | )
Equity valuation adjustments |  |  | (837 | ) |  |  | (489 | ) |  |  | 102 |
The amounts reported as deemed cost of the generation assets represent the fair value of the generation assets determined using the replacement cost at initial adoption of IFRS on January 1, 2009. The valuation of the generation assets resulted in an increase in their book value, recorded in a specific line in Equity, net of the tax effects. These values are being realized based on the depreciation of the assets.
(e) | Cemig’s capital increase proposal
On October 26, 2017, an Extraordinary Meeting of Shareholders unanimously decided to approve the proposal by the Board of Directors for a capital increase in the amount of R$ 1,000, through issuance of up to 199,910,947 new shares, each with par value of R$ 5.00, comprising up to 66,849,505 common shares and up to 133,061,442 preferred shares, at the price of R$ 6.57 per share. All the shares resulting from this subscription will carry the same rights as the shares in the same class which originated the capital increase. The increase will be by private subscription, with preference for existing Shareholders to participate in proportion to their present holdings, as to 15.89% of a new share for each share they held at the end of the day that the EGM that approve the capital increase. By December 31, 2017, R$ 1,215 had been subscribed by Shareholders, and a total of 14,945,429 shares had not been subscribed, comprising 13,139,679 ON (common) shares and 1,815,750 PN (preferred) shares. The Company expects to sell all of the remaining shares within the first quarter of 2018, by auction. After this sale, the Company will submit to an Extraordinary General Meeting of Shareholders a proposal for verifying and ratification of increase in the Company’s share capital from R$ 6,294 to R$ 7,294.

X
- Definition The entire disclosure for share capital, reserves and other equity interest. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Name IAS -Number 1 -IssueDate 2017-01-01 -Paragraph 79 -URI http://eifrs.ifrs.org/eifrs/XBRL?type=IAS&num=1&date=2017-03-01&anchor=para_79&doctype=Standard -URIDate 2017-03-09 + Details
Name: | ifrs-full_DisclosureOfShareCapitalReservesAndOtherEquityInterestExplanatory
Namespace Prefix: | ifrs-full_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Text block1 [abstract] + References No definition available. + Details
Name: | xcmig_TextBlock1Abstract
Namespace Prefix: | xcmig_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration