17. INVESTMENTS


	Control	2018		2017
Hidrelétrica Cachoeirão	Jointly-controlled		49		58
Hidrelétrica Pipoca	Jointly-controlled		31		26
Retiro Baixo	Jointly-controlled		171		158
Aliança Norte (Belo Monte plant)	Jointly-controlled		664		577
Madeira Energia (Santo Antônio plant)	Affiliated		270		535
FIP Melbourne (Santo Antônio plant)	Affiliated		470		582
Baguari Energia	Jointly-controlled		162		148
Renova	Jointly-controlled		—		282
Aliança Geração	Jointly-controlled		1,217		1,242
Central Eólica Praias de Parajuru	Subsidiary		—		60
Central Eólica Volta do Rio	Subsidiary		—		68
Central Eólica Praias de Morgado	Jointly-controlled		—		51
Amazônia Energia (Belo Monte Plant)	Jointly-controlled		1,013		867
Light (1)	Subsidiary		—		1,534
Guanhães Energia (1)	Subsidiary		—		25
Axxiom Soluções Tecnológicas (1)	Subsidiary		—		12
Usina Hidrelétrica Itaocara S.A. (1)	Subsidiary		—		4
Lightger (1)	Subsidiary		—		41
Taesa	Jointly-controlled		1,143		1,101
Ativas Data Center	Affiliated		16		17
RME (2)	Subsidiary		—		383
UFV Janaúba Geração de Energia Elétrica Distribuída (3)	Affiliated		9		—
Companhia de Transmissão Centroeste de Minas	Jointly-controlled		20		21

Total of investments			5,235		7,792

(1)

Until December 31, 2017 Light was a jointly-controlled entity as described in Note 17.1. On November 30, 2018 Company obtained control of Light, and subsequently, in accordance with IFRS 5, reclassified the investment in Light, Axxion, Lightger, Guanhães and Itaocara as Non-current assets held for sale.

(2)

On November 30, 2018 the Company acquired all RME’s shares, and therefore as from that date on it consolidates that company in its financial statements. RME’s sole asset is its holdings in the share capital of Light. Hence, the Comapay no longer presents the investment that it previously held at RME in its consolidated statement, presenting only the interest in Light.

(3)	Special-purpose Company (SPC) constituted by Efficientia and GD Energia (holding company of the Mori Group) to develop a 5MW photovoltaic generation plant in Janaúba, Minas Gerais, to be leased to customers of Cemig Distribuição that qualify under Aneel Resolution 482/2012.

The Company’s investees that are not consolidated are jointly-controlled entities, with the exception of the interests in the Santo Antônio power plant, and Ativas Data Center.

a) Right to exploitation of the regulated activity

In the process of allocate the purchase price for of the acquisition of the jointly-controlled subsidiaries and affilites, a valuation was made for the intangible assets relating to the right to operate the infraestructure. This asset is presented together with the acquisition cost of the investments in the previous table. These assets will be amortized over the remaining period of the concessions on a straight-line basis.

Changes in these assets are as follows:


Investees	2015		Addition		Amortization			Written off			2016		Amortization			Written off			2017		Addition		Amortization			Written off			2018
Taesa		415		—		(18	)		(109	)		288		(13	)		(86	)		189		—		(9	)		—			180
Light		231		—		(22	)		—			209		(23	)		—			186		—		(22	)		(164	)		—
Lepsa		—		50		(1	)		—			49		(6	)		(43	)		—		—		—			—			—
RME		—		49		(1	)		—			48		(5	)		—			43		20		(5	)		(58	)		—

Total		646		99		(42	)		(109	)		594		(47	)		(129	)		418		20		(36	)		(222	)		180

b) This table shows the changes in investments in subsidiaries, jointly-controlled entities and affiliates:


Investee	2017		Gain (loss) by equity method (Income statement)			Remeasurement of previously held equity interest in subsidiaries acquired (step- acquisition)			Dividends			Additions / acquisitions		Disposals			Reclassification to held for sale			Others			2018
Companhia de Transmissão Centroeste de Minas		21		5			—			(6	)		—		—			—			—			20
Light (1)		1,534		19			(231	)		(8	)		—		—			(1,255	)		(59	)		—
RME (1)/(5)		383		3			(52	)		(1	)		104		—			(326	)		(111	)		—
Axxiom Soluções Tecnológicas (1)		12		(7	)		—			—			—		—			(4	)		(1	)		—
Lightger (1)		41		3			84			(2	)		—		—			(126	)		—			—
Guanhães Energia (1)		25		30			—			—			57		—			(112	)		—			—
Usina Hidrelétrica Itaocara S.A. (1)		4		(4	)		—			—			5		—			(5	)		—			—
Hidrelétrica Pipoca		26		7			—			(2	)		—		—			—			—			31
Madeira Energia (Santo Antônio plant) (2) (4)		535		(163	)		—			—			25		—			—			(127	)		270
FIP Melbourne (Santo Antônio plant) (4)		582		(139	)		—			—			27		—			—			—			470
Hidrelétrica Cachoeirão		58		10			—			(19	)		—		—			—			—			49
Baguari Energia		148		28			—			(15	)		—		—			—			1			162
Central Eólica Praias de Parajuru (3)		60		(6	)		21			—			74		(3	)		—			(146	)		—
Central Eólica Volta do Rio (3)		68		(16	)		59			—			92		(22	)		—			(181	)		—
Central Eólica Praias de Morgado (3)		51		(15	)		—			—			—		(12	)		—			(24	)		—
Amazônia Energia (Belo Monte Plant)		867		80			—			—			69		—			—			(3	)		1,013
Aliança Norte (Belo Monte plant)		577		44			—			—			43		—			—			—			664
Ativas Data Center		17		(1	)		—			—			—		—			—			—			16
Taesa (1)		1,101		225			—			(208	)		—		—			—			25			1,143
Renova		282		(282	)		—			—			—		—			—			—			—
Aliança Geração		1,242		65			—			(90	)		—		—			—			—			1,217
Retiro Baixo		158		10			—			(3	)		6		—			—			—			171
UFV Janaúba Geração de Energia Elétrica Distribuída				0			—			—			9		—			—			—			9
Total of investments		7,792		(104	)		(119	)		(354	)		511		(37	)		(1,828	)		(626	)		5,235

(1)

The movement in the Others column arises from the first-time adoption of the new accounting standards on January 1, 2018, recognized by the investees directly in equity without inclusion in the statement of income. For more details, please see Note 2.5. The column Reclassification to held for sale includes the effect of the reclassification of the investment in Light, Axxion, Lightger, Guanhães and Itaocara to Non-current assets held for sale, in accordance with IFRS 5.

(2)

Due to the result of analysis of impairment indication, due to the recurring losses incurred by Madeira, a provision was recognized for loss of part of the residual added value of the investment in Madeira, to limit its balance to the minimum value of the excess of future economic benefits arising from use of the net fixed asset on December, 31, 2018, using the nominal WACC of 9.59% as the discount rate. The provision is presented in the statement of income for the year ended December, 31, 2018 as Impairment loss on Investments.

(3)

Movements arising from the business combination between the Company and Energimp. The rights to exploitation of the regulated activity are classified in the consolidated statement of financial position under Intangible. Details of the transaction are in the topic Parajuru, Volta do Rio and Morgado in this note.

(4)	In October 2018 the subsidiary Cemig GT subscribed capital increases in Mesa and FIP Melbourne, of R$ 25 and R$ 27, respectively. These funds were entirely applied in capital contributions to Santo Antônio Energia S.A. (‘Saesa’ or ‘Santo Antônio Hydroelectric Plant’).

(5)	As mentioned in note 38, on April 24, 2019 the merger of the subsidiaries Lepsa and RME into the Company was completed.


	2016			Gain (loss) by equity method (Income statement)			Gain (loss) by equity method (Other comprehensive income)			Dividends			Additions / acquisitions		Disposals			Others			2017
Companhia Transleste de Transmissão		22			5			—			(7	)		—		(20	)		—			—
Companhia Transudeste de Transmissão		21			3			—			(12	)		—		(12	)		—			—
Companhia Transirapé de Transmissão		24			4			—			(6	)		—		(22	)		—			—
Companhia de Transmissão Centroeste de Minas		21			5			—			(5	)		—		—			—			21
Light (1)		1,070			35			(3	)		—			—		—			432			1,534
Axxiom Soluções Tecnológicas		19			(7	)		—			—			—		—			—			12
Lepsa (1)		344			—			(2	)		—			—		—			(342	)		—
RME		339			7			(2	)		—			38		—			1			383
Hidrelétrica Cachoeirão		50			10			—			(3	)		—		—			1			58
Guanhães Energia (2)		—			(13	)		—			—			97		—			(59	)		25
Hidrelétrica Pipoca		32			2			—			(8	)		—		—			—			26
Madeira Energia (Santo Antônio plant)		644			(109	)		—			—			—		—			—			535
FIP Melbourne (Santo Antônio plant)		677			(95	)		—			—			—		—			—			582
Lightger		42			2			—			(3	)		—		—			—			41
Baguari Energia		162			17			—			(30	)		—		—			(1	)		148
Central Eólica Praias de Parajuru		63			(1	)		—			—			—		—			(2	)		60
Central Eólica Volta do Rio		81			(12	)		—			—			—		—			(1	)		68
Central Eólica Praias de Morgado		60			(8	)		—			—			—		—			(1	)		51
Amazônia Energia (Belo Monte Plant)		781			1			—			—			85		—			—			867
Ativas Data Center		18			(2	)		—			—			—		—			1			17
Taesa (3)		1,583			216			—			(183	)		—		(515	)		—			1,101
Renova		689			(390	)		(34	)		—			18		—			(1	)		282
Usina Hidrelétrica Itaocara S.A.		3			(2	)		—			—			3		—			—			4
Aliança Geração		1,319			72			—			(149	)		—		—			—			1,242
Aliança Norte (Belo Monte plant)		527			(2	)		—			—			51		—			1			577
Retiro Baixo		162			10			—			(14	)		—		—			—			158

Total of investments		8,753			(252	)		(41	)		(420	)		292		(569	)		29			7,792

Guanhães Energia – Uncovered liabilities of jointly-controlled entity (2)		(59	)		—			—			—			—		—			59			—

Total		8,694			(252	)		(41	)		(420	)		292		(569	)		88			7,792

(1)

On November 30, 2017 the Company acquired all Lepsa’s shares, and therefore as from that date on it consolidates that company in its financial statements. Lepsa’s sole asset is its holdings in the share capital of Light. Hence, the Company no longer presents the investment that it previously held at Lepsa in its consolidated statement, presenting only the interest in Light.

(2)	Uncovered liability reversed through injection of capital.

(3)

On November 2017 the Company sold part of its equity interest in the jointly-controlled entity Taesa. The Company sold 34 million Units of Taesa at the price of R$ 21.10 per Unit. With the sale, the Company’s holding in the share capital of Taesa was reduced from 31.54% to 21.68%. The shares that were sold are not part of the controlling shareholding block of Taesa, and as a result Cemig continues to be in the controlling block of Taesa.


	2015			Equity method gain (Statement of income)			Gain (loss) by equity method (Other comprehensive income)			Dividends			Additions / acquisitions		Disposals			Merger			Other			2016
Companhia Transleste de Transmissão		18			6			—			(2	)		—		—			—			—			22
Companhia Transudeste de Transmissão		18			4			—			(1	)		—		—			—			—			21
Companhia Transirapé de Transmissão		19			5			—			—			—		—			—			—			24
Transchile		108			2			(23	)		—			—		(87	)		—			—			—
Companhia de Transmissão Centroeste de Minas		18			5			—			(2	)		—		—			—			—			21
Light		1,188			(121	)		3			—			—		—			—			—			1,070
Axxiom Soluções Tecnológicas		24			(5	)		—			—			—		—			—			—			19
Lepsa		—			(18	)		1			(57	)		252		—			166			—			344
RME		—			(20	)		—			(58	)		247		—			169			1			339
Hidrelétrica Cachoeirão		42			10			—			(2	)		—		—			—			—			50
Guanhães Energia (1)		19			(103	)		—			—			25		—			—			59			—
Hidrelétrica Pipoca		27			5			—			—			—		—			—			—			32
Madeira Energia (Santo Antônio Plant through Madeira Energia)		676			(71	)		—			—			39		—			—			—			644
FIP Melbourne (Santo Antônio Plant through Madeira Energia)		703			(63	)		—			—			40		—			—			(3	)		677
LightGer		37			5			—			—			—		—			—			—			42
Baguari Energia		187			41			—			(14	)		—		—			—			(52	)		162
Central Eólica Praias de Parajuru		63			—			—			—			—		—			—			—			63
Central Eólica Volta do Rio		85			(4	)		—			—			—		—			—			—			81
Central Eólica Praias de Morgado		62			(2	)		—			—			—		—			—			—			60
Amazônia Energia (Belo Monte Plant through Norte Energia)		495			(6	)		—			—			292		—			—			—			781
Ativas Data Center (2)		—			(31	)		—			—			99		—			—			(50	)		18
Parati		358			(24	)		1			—			—		—			(335	)		—
Taesa		2,242			342			—			(382	)		—		(619	)		—			—			1,583
Renova (3)		1,527			(372	)		19			—			278		—			—			(763	)		689
Usina Hidrelétrica Itaocara S.A.		—			—			—			—			3		—			—			—			3
Aliança Geração		1,327			104			—			(112	)		—		—			—			—			1,319
Aliança Norte (Belo Monte Plant through Norte Energia)		354			(7	)		—			—			180		—			—			—			527
Retiro Baixo		148			16			—			(2	)		—		—			—			—			162

Total of investments		9,745			(302	)		1			(632	)		1,455		(706	)		—			(808	)		8,753

Ativas Data Center – Uncovered liabilities of jointly-controlled entity		(28	)		—			—			—			—		—			—			28			—
Guanhães Energia – Uncovered liabilities of jointly-controlled entity		—			—			—			—			—		—			—			(59	)		(59	)

Total		9,717			(302	)		1			(632	)		1,455		(706	)		—			(839	)		8,694

1)	Transfer to uncovered liabilities.

2)	The amount of R$ 50 refers to the dilution of shareholding interest arising from subscription of share capital by a new shareholder.

3)	The amount of R$ 763 refers to the impairment of intangible concession assets resulting from the financial difficulties of Renova.

Changes in dividends receivable are as follows:


	2018			2017
Initial balance		77			11
Investees’ dividends proposed		354			420
Amounts received		(311	)		(354	)

Final balance		120			77

c)	Information from the subsidiaries, jointly-controlled entities and affiliates:


Company	Number of shares		2018						2017						2016
Company	Number of shares		Cemig interest %		Share capital		Equity		Cemig interest %		Share capital		Equity		Cemig interest %		Share capital		Equity
Cemig Geração e Transmissão		2,896,785,358		100.00		2,600		4,980		100.00		1,838		4,794		100.00		1,838		4,583
Madeira Energia (Usina Santo Antônio)		12,034,025,147		15.51		10,620		4,657		18.13		9,547		5,327		18.13		10,152		6,419
Hidrelétrica Cachoeirão		35,000,000		49.00		35		100		49.00		35		118		49.00		35		103
Guanhães Energia		396,401,600		49.00		396		228		49.00		331		51		49.00		186		-
Hidrelétrica Pipoca		41,360,000		49.00		41		63		49.00		41		53		49.00		41		65
Baguari Energia (1)		26,157,300,278		69.39		187		234		69.39		187		214		69.39		187		248
Central Eólica Praias de Parajuru (4)		71,834,843		100.00		72		80		49.00		71		89		49.00		71		89
Central Eólica Volta do Rio (4)		138,867,440		100.00		139		84		49.00		117		116		49.00		117		137
Central Eólica Praias de Morgado (4)		—		—		—		—		49.00		53		54		49.00		53		65
Lightger		79,078,937		49.00		79		86		49.00		79		83		49.00		79		85
Aliança Norte (Usina Belo Monte)		41,437,698,407		49.00		1,206		1,247		49.00		1,119		1,066		49.00		1,014		1,077
Amazônia Energia (Usina Belo Monte) (1)		1,322,427,723		74.50		1,322		1,359		74.50		1,230		1,163		74.50		1,116		1,048
Aliança Geração		1,291,582		45.00		1,291		1,858		45.00		1,291		1,858		45.00		1,291		1,973
Retiro Baixo		222,850,000		49.90		223		278		49.90		223		258		49.90		223		264
Renova (1)		41,719,724		36.23		2,919		-76		36.23		2,919		780		34.15		2,856		1,956
Usina Hidrelétrica Itaocara S.A.		22,165,114		49.00		22		10		49.00		11		8		49.00		6		6
Cemig Ger.Três Marias S.A.		1,291,423,369		100.00		1,291		1,396		100.00		1,291		1,392		100.00		1,291		1,410
Cemig Ger.Salto Grande S.A.		405,267,607		100.00		405		440		100.00		405		440		100.00		405		444
Cemig Ger. Itutinga S.A.		151,309,332		100.00		151		179		100.00		151		171		100.00		151		170
Cemig Geração Camargos S.A.		113,499,102		100.00		113		132		100.00		113		130		100.00		113		127
Cemig Geração Sul S.A.		148,146,505		100.00		148		176		100.00		148		168		100.00		148		167
Cemig Geração Leste S.A.		100,568,929		100.00		101		121		100.00		101		116		100.00		101		116
Cemig Geração Oeste S.A.		60,595,484		100.00		61		70		100.00		61		69		100.00		61		70
Rosal Energia S.A. (3)		46,944,467		100.00		47		125		—		—		—		—		—		—
Sá Carvalho S.A. (3)		361,200,000		100.00		37		94		—		—		—		—		—		—
Horizontes Energia S.A. (3)		39,257,563		100.00		39		55		—		—		—		—		—		—
Cemig PCH S.A. (3)		45,952,000		100.00		46		93		—		—		—		—		—		—
Usina Termelétrica do Barreiro S.A. (3)		16,902,000		100.00		17		18		—		—		—		—		—		—
Empresa de Serviços de Comercialização de Energia Elétrica S.A. (3)		486,000		100.00		—		27		—		—		—		—		—		—
Cemig Comercializadora de Energia Incentivada S.A. (3)		1,000,000		100.00		1		3		—		—		—		—		—		—
Cemig Trading S.A. (3)		1,000,000		100.00		1		28		—		—		—		—		—		—
Cemig Distribuição		2,359,113,452		100.00		2,772		4,642		100.00		2,772		3,737		100.00		2,362		2,5
Rosal Energia (3)		—		—		—		—		100.00		47		107		100.00		47		141
Sá Carvalho (3)		—		—		—		—		100.00		37		103		100.00		37		106
Horizontes Energia (3)		—		—		—		—		100.00		39		53		100.00		39		52
Cemig PCH (3)		—		—		—		—		100.00		36		97		100.00		36		92
UTE Barreiro (3)		—		—		—		—		100.00		17		18		100.00		31		39
Empresa de Comercialização de Energia Elétrica (3)		—		—		—		—		100.00		—		18		100.00		—		20
Cemig Comercializadora de Energia Incentivada (3)		—		—		—		—		100.00		1		2		100.00		1		2
Cemig Trading (3)		—		—		—		—		100.00		1		29		100.00		1		29
Light		203,934,060		26.06		2,226		3,389		26.06		2,226		3,462		26.06		2,226		3,354
TAESA		1,033,496,721		21.68		3,042		4,572		21.68		3,042		4,347		31.54		3,042		4,308
Cemig Telecom (2)		—		—		—		—		100.00		292		247		100.00		242		192
Ativas Data Center		456,540,718		19.60		182		84		—		—		—		—		—		—
Gasmig		409,255,483		99.57		665		1,001		99.57		665		1,224		99.57		665		1,426
Cemig Geração Distribuída (5)		174,281		100.00		0		3		100.00		0		5		100.00		—		4
LEPSA		1,379,839,905		100.00		406		447		100.00		406		456		66.62		438		443
RME		1,365,421,406		100.00		403		423		75.00		403		453		66.27		434		440
Efficientia		15,121,845		100.00		15		18		100.00		6		7		100.00		6		5
Companhia de Transmissão Centroeste de Minas		28,000,000		51.00		28		39		51.00		28		40		51.00		28		42
Companhia Transleste de Transmissão		49,569,000		—		—		—		—		—		—		25.00		50		81
Companhia Transudeste de Transmissão		30,000,000		—		—		—		—		—		—		24.00		30		85
Companhia Transirapé de Transmissão		22,340,490		—		—		—		—		—		—		24.50		22		98
Axxiom Soluções Tecnológicas		46,600,000		49.00		47		17		49.00		47		24		49.00		47		39

(1)	Jointly-control under a Shareholders’ Agreement.

(2)	On March 31, 2018 Cemig Telecom was merged into the Company.

(3)

On November 30, 2018 ownership of the Company’s wholly-owned subsidiaries Rosal Energia, Sá Carvalho, Horizontes Energia, Cemig PCH, UTE Barreiro, Empresa de Comercialização de Energia Elétrica, Cemig Comercializadora de Energia Incentivada and Cemig Trading was transferred to the wholly-owned subsidiary Cemig GT.

(4)

(5)	Previously named “Usina Térmica Ipatinga S.A” until December, 2017.

The main balances for the affiliated and jointly-controlled entities, at December 31, 2018, 2017 and 2016, are as follows:


2018	Centroeste			Ativas Data Center			Taesa			Hidrelétrica Cachoeirão			Hidrelétrica Pipoca			Retiro Baixo			Aliança Norte
Assets
Current		19			17			1,679			23			12			47			—
Cash and cash equivalents		—			1			19			18			4			36			—
Non-current		36			106			6,750			85			95			354			1,247

Total assets		55			123			8,429			108			107			401			1,247
Liabilities
Current		6			23			606			7			11			32			—
Loans and financings – Current		3			9			8			—			7			14			—
Non-current		10			16			3,252			—			33			91			—
Loans and financings – Non-Current		10			13			402			—			33			82			—
Equity		39			84			4,572			100			63			278			1,247

Total liabilities		55			123			8,430			107			107			401			1,247
Statement of income
Net sales revenue		14			70			1,245			50			29			71			—
Cost of sales		(1	)		(72	)		(185	)		(29	)		(12	)		(29	)		—
Depreciation and amortization		—			—			—			(3	)		(3	)		(10	)		—
Gross profit (loss)		13			(2	)		1,060			21			17			42			—
General and administrative expenses		—			(16	)		(138	)		—			—			(4	)		(3	)
Finance income		1			—			53			1			—			2			1
Finance expenses		(3	)		(3	)		(275	)		—			(4	)		(11	)		(1	)
Operational profit (loss)		11			(21	)		700			22			13			29			(3	)
Share of (loss) profit, net, of subsidiaries and joint ventures		—			—			481			—			—			—			97
Income and Social Contribution taxes		(1	)		—			(110	)		(2	)		(1	)		(3	)		—

Net income (loss) for the year		10			(21	)		1,071			20			12			26			94

Comprehensive income (loss) for the year
Net income (loss) for the year		10			(21	)		1,071			20			12			26			94

Comprehensive income (loss) for the year		10			(21	)		1,071			20			12			26			94


2018	Amazônia Energia			Madeira Energia			Baguari Energia			Renova			Aliança Geração
Assets
Current		—			618			44			295			712
Cash and cash equivalents		—			69			8			—			344
Non-current		1,360			22,453			201			1,229			2,277

Total assets		1,360			23,071			245			1,524			2,989
Liabilities
Current		1			1,281			7			442			534
Loans and financings – Current		—			53			—			342			149
Non-current		—			17,134			5			1,158			597
Loans and financings – Non-Current		—			10,220			—			—			140
Equity		1,359			4,656			233			(76	)		1,858

Total liabilities		1,360			23,071			245			1,524			2,989
Statement of income
Net sales revenue		—			3,005			74			—			907
Cost of sales		—			(2,689	)		(31	)		(4	)		(555	)
Depreciation and amortization		—			—			(9	)		(4	)		(125	)
Gross profit (loss)		—			316			43			(4	)		352
General and administrative expenses		(1	)		(195	)		—			(93	)		(31	)
Finance income		2			128			3			1			30
Finance expenses		(2	)		(1,881	)		(1	)		(84	)		(67	)
Operational profit (loss)		(1	)		(1,632	)		45			(180	)		284

Share of (loss) profit, net, of subsidiaries and joint ventures		105			—			—			(676	)		10
Income and Social Contribution taxes		(1	)		(112	)		(4	)		—			(96	)

Net income (loss) for the year		103			(1,744	)		41			(856	)		198

Comprehensive income (loss) for the year
Net income (loss) for the year		103			(1,744	)		41			(856	)		198

Comprehensive income (loss) for the year		103			(1,744	)		41			(856	)		198


2017 (1)	Centroeste			RME			Light			Taesa			Axxiom			Aliança Norte			Itaocara			Lightger			Amazônia Energia			Aliança Geração
Assets
Current		56			2			4,250			1,970			46			1			5			51			—			622
Cash and cash equivalents		17			1			342			2			3			—			5			1			—			468
Non-current		1			451			11,181			6,608			11			1,065			11			142			1,163			2,398

Total assets		57			453			15,431			8,578			57			1,066			16			193			1,163			3,020

Liabilities
Current		4			—			5,575			736			29			—			1			31			—			448
Suppliers		—			—			2,023			48			1			—			1			20			—			44
Loans and financings – Current		3			—			1,373			—			5			—			—			—			—			84
Non-current		13			—			6,394			3,495			4			—			7			79			—			714
Equity		40			453			3,462			4,347			24			1,066			8			83			1,163			1,858

Total liabilities		57			453			15,431			8,578			57			1,066			16			193			1,163			3,020

Statement of income
Net sales revenue		15			—			11,315			1,104			43			—			—			42			—			920
Cost of sales		(4	)		—			—			(209	)		(55	)		—			(4	)		(28	)		—			(554	)
Depreciation and amortization		(1	)		—			—			(1	)		(2	)		—			—			(11	)		—			(127	)

Gross profit (loss)		11			—			11,315			895			(12	)		—			(4	)		14			—			366
General and administrative expenses		—			(1	)		(9,941	)		(124	)		(7	)		(1	)		—			(2	)		(1	)		(11	)
Finance income		2			16			136			368			1			—			—			4			2			30
Finance expenses		(2	)		—			(1,212	)		(434	)		(1	)		—			—			(9	)		—			(65	)

Operational profit (loss)		11			15			298			705			(19	)		(1	)		(4	)		7			1			320
Income and Social Contribution taxes		(1	)		—			(174	)		(58	)		6			—			—			(3	)		—			(104	)

Net income (loss) for the year		10			15			124			647			(13	)		(1	)		(4	)		4			1			216

Comprehensive income (loss) for the year
Net income (loss) for the year		10			15			124			647			(13	)		(1	)		(4	)		4			1			216

Comprehensive income (loss) for the year		10			15			124			647			(13	)		(1	)		(4	)		4			1			216

(1)

The ‘Transmineiras’ companies (Companhia Transleste de Transmissão S.A.; Companhia Transudeste de Transmissão S.A. and Companhia Transirapé de Transmissão S.A.) were removed from the table for 2017, due to their sale in November 2017. LEPSA is not presented in the 2017 table due to the fact that it has been under the Company’s control since November 2017.


2017	Hidrelétrica Cachoeirão			Baguari Energia			Guanhães Energia			Madeira Energia			Hidrelétrica Pipoca			Retiro Baixo			Renova			Central Eólica de Parajuru			Central Eólica de Morgado			Central Eólica Volta do Rio
Assets
Current		51			29			11			557			15			23			32			41			11			16
Cash and cash equivalents		46			5			7			55			6			14			—			35			7			5
Non-current		87			209			42			23,594			95			366			1,679			121			136			233

Total assets		138			238			53			24,151			110			389			1,711			162			147			249

Liabilities
Current		10			18			2			2,031			18			27			395			26			90			126
Suppliers		1			10			—			203			6			3			25			1			2			1
Non-current		10			6			—			16,793			39			104			536			47			3			7
Equity		118			214			51			5,327			53			258			780			89			54			116

Total liabilities		138			238			53			24,151			110			389			1,711			162			147			249

Statement of income
Net sales revenue		39			64			—			2,971			29			67			—			21			14			22
Cost of sales		(17	)		(37	)		(1	)		(1,859	)		(18	)		(34	)		(5	)		(16	)		(17	)		(28	)
Depreciation and amortization		(4	)		(9	)		—			—			(3	)		(10	)		(5	)		(10	)		(10	)		(17	)
Gross profit (loss)		22			27			(1	)		1,112			11			33			(5	)		5			(3	)		(6	)
General and administrative expenses		—			—			—			(817	)		(1	)		—			—			(2	)		(1	)		(3	)
Provision for loss		—			—			(22	)		—			—			—			—			—			—			—
Financial income		4			6			1			115			2			3			4			3			2			3
Finance expenses		(2	)		—			(3	)		(1,551	)		(5	)		(11	)		(1,260	)		(6	)		(8	)		(12	)
Operational profit (loss)		24			33			(25	)		(1,141	)		7			25			(1,261	)		—			(10	)		(18	)
Income and Social Contribution taxes		(3	)		(11	)		—			49			(2	)		(3	)		121			—			(1	)		(3	)

Net income (loss) for the year		21			22			(25	)		(1,092	)		5			22			(1,140	)		—			(11	)		(21	)

Comprehensive income (loss) for the year
Net income (loss) for the year		21			22			(25	)		(1,092	)		5			22			(1,140	)		—			(11	)		(21	)

Comprehensive income (loss) for the year		21			22			(25	)		(1,092	)		5			22			(1,140	)		—			(11	)		(21	)


2016	Parati			Transleste			Transirapé			Centroeste			Transudeste			Lepsa			RME			Light			Taesa			Axxiom			Aliança Norte
Assets
Current		12			50			41			61			32			6			3			3,612			1,955			66			2
Cash and cash equivalents		8			3			2			20			4			—			—			668			102			9			2
Non-current		1,327			123			122			1			78			437			437			10,718			6,456			13			1,075

Total assets		1,339			173			163			62			110			443			440			14,330			8,411			79			1,077

		—			—			—			—			—			—			—			—			—			—			—
Liabilities		—			—			—			—			—			—			—			—			—			—			—
Current		—			28			33			5			22			—			—			4,871			1,074			32			—
Suppliers		—			—			—			—			—			—			—			1,342			37			1			—
Loans and financings		—			18			19			3			19			—			—			15,568			9			10			—
Non-current		—			63			32			15			3			—			—			6,105			3,029			8			—
Equity		1,339			82			98			42			85			443			440			3,354			4,308			39			1,077

Total liabilities		1,339			173			163			62			110			443			440			14,330			8,411			79			1,077

		—			—			—			—			—			—			—			—			—			—			—
Statement of income		—			—			—			—			—			—			—			—			—			—			—
Net sales revenue		—			34			45			13			22			—			—			9,645			1,391			57			—
Cost of sales		—			(2	)		(19	)		(2	)		(1	)		—			—			(8,042	)		(149	)		(64	)		—
Depreciation and amortization		—			—			—			(1	)		—			—			—			(452	)		(1	)		(2	)		—

Gross profit (loss)		—			32			26			11			21			—			—			1,603			1,242			(7	)		—
General and administrative expenses		(6	)		—			(1	)		—			(1	)		(1	)		(1	)		(753	)		(107	)		(8	)		(2	)
Finance income		4			2			1			4			1			—			1			148			58			1			—
Finance expenses		(60	)		(11	)		(5	)		(3	)		(4	)		(41	)		(41	)		(1,281	)		(223	)		—			(7	)

Operational profit (loss)		(62	)		23			21			12			17			(42	)		(41	)		(283	)		970			(14	)		(9	)
Income tax and the Social Contribution tax		—			(2	)		(2	)		(1	)		(1	)		—			—			(30	)		(108	)		5			—

Net income (loss) for the year		(62	)		21			19			11			16			(42	)		(41	)		(313	)		862			(9	)		(9	)

Comprehensive income (loss) effects		1			—			—			—			—			—			—			3			—			—			—

Comprehensive income (loss) for the year		(61	)		21			19			11			16			(42	)		(41	)		(310	)		862			(9	)		(9	)


2016	Hidrelétrica Cachoeirão			Baguari Energia			Guanhães Energia			Madeira Energia			Hidrelétrica Pipoca			Retiro Baixo			Renova			Central Eólica de Parajuru			Central Eólica de Morgado			Central Eólica Volta do Rio			Lightger			Amazônia Energia			Aliança Geração
Assets
Current		43			45			16			1,520			20			30			136			38			24			37			35			—			388
Cash and cash equivalents		40			11			1			58			17			19			36			18			17			27			32			—			147
Non-current		86			220			65			23,557			98			377			5,765			128			142			245			152			1,048			2,512

Total assets		129			265			81			25,077			118			407			5,901			166			166			282			187			1,048			2,900

		—			—			—			—			—			—			—			—			—			—			—			—			—
Liabilities		—			—			—			—			—			—			—			—			—			—			—			—			—
Current		9			12			191			3,131			8			25			3,347			19			27			37			16			—			592
Suppliers		2			6			—			662			—			1			547			1			1			1			6			—			101
Non-current		17			5			11			15,527			45			118			598			58			74			108			86			—			335
Equity		103			248			(121	)		6,419			65			264			1,956			89			65			137			85			1,048			1,973

Total liabilities		129			265			81			25,077			118			407			5,901			166			166			282			187			1,048			2,900

		—			—			—			—			—			—			—			—			—			—			—			—			—
Statement of income		—			—			—			—			—			—			—			—			—			—			—			—			—
Net sales revenue		34			65			—			2,803			25			62			484			27			22			29			36			—			804
Cost of sales		(10	)		(12	)		—			(1,845	)		(6	)		(29	)		(454	)		(17	)		(17	)		(27	)		(17	)		—			(314	)
Depreciation and amortization		(3	)		(9	)		—			(673	)		(3	)		(9	)		(93	)		(10	)		(10	)		(17	)		(11	)		—			(125	)

Gross profit (loss)		24			53			—			958			19			33			30			10			5			2			19			—			490
General and administrative expenses		—			(1	)		—			(146	)		(2	)		—			(41	)		(1	)		(1	)		(2	)		(1	)		(1	)		(58	)
Impairment of PP&E		—			—			—			—			—			—			(281	)		—			—			—			—			—			—
Adjustment for losses on investment		—			—			—			—			—			—			(455	)		—			—			—			—			—			—
Finance income		4			15			—			146			2			2			16			3			3			5			3			—			46
Finance expenses		(3	)		(1	)		(208	)		(1,552	)		(6	)		(15	)		(424	)		(7	)		(10	)		(15	)		(10	)		(8	)		(58	)

Operational profit (loss)		25			66			(208	)		(594	)		13			20			(1,155	)		5			(3	)		(10	)		11			(9	)		420
Income tax and the Social Contribution tax		(2	)		(7	)		—			(23	)		(2	)		(3	)		54			(2	)		1			3			(3	)		—			(127	)

Net income (loss) for the year		23			59			(208	)		(617	)		11			17			(1,101	)		3			(2	)		(7	)		8			(9	)		293

Comprehensive income (loss) effects		—			—			—			—			—			—			99			—			—			—			—			—			—

Comprehensive income (loss) for the year		23			59			(208	)		(617	)		11			17			(1,002	)		3			(2	)		(7	)		8			(9	)		293

Madeira Energia S.A. (‘MESA’) and FIP Melbourne

On December 31, 2018 the investee MESA reported a loss of R$1,743 (R$1,091 on 2017 and R$ 617) and current liabilities in excess of current assets by R$663 (R$ 1,474 on 2017). To balance the situation of negative working capital, in addition to its long-term sale contracts that ensure regularity in its operational cash flow; MESA concluded in December 2018, the reprofiling of its debt with BNDES, adjusting the flow of payments of the debt to its cash generation capacity. The values for the guarantee provided by the Company in relation to these debts are given in Note 27. Additionally, to ensure its liquidity, MESA also rely on financial support from its shareholders, under an equity support agreement signed for this purpose. Under this agreement the Company is required, in accordance with a limit defined by its shareholding interest, to fund any cash shortfalls that occur, or any frustrations of sources of funds specified in the project.

The FID (Availability Factor)

On April 10, 2018 the Federal Supreme Court re-established the requirement for application of the Availability Factor (FID) in relation to the generating units of the Santo Antônio Hydroelectric Plant not dispatched by the National System Operator (ONS). Obeying this decision, the CCEE agreed to accept payment of the FID in installments, for a total of approximately R$738, recorded as liabilities under Suppliers, that has being paid in 36 equal installments, from September 2018, with the addition of inflation adjustment and interest.

Arbitration proceedings

In 2014, Cemig GT and SAAG Investimentos S.A. (SAAG), a vehicle through which Cemig GT holds an indirect equity interest in MESA, opened arbitration proceedings, in the Market Arbitration Chamber, challenging the following: (a) the increase approved in the capital of MESA of approximately R$ 750 partially to be allocated to payment of the claims by the Santo Antonio Construction Consortium (‘CCSA’), based on absence of quantification of the amounts supposedly owed, and absence of prior approval by the Board of Directors, as required by the bylaws and Shareholders’ Agreement of MESA; and also on the existence of credits owed to MESA by CCSA, for an amount greater than the claims; and (b) the adjustment for impairment carried out by the Executive Board of MESA, in the amount of R$ 750, relating to certain credits owed to Mesa by CCSA, on the grounds that those credits are owed in their totality by express provision of contract.

The arbitration judgment recognized the right of Cemig GT and SAAG in full, and ordered the annulment of the acts being impugned. As a consequence of this decision, MESA reversed the impairment, and posted a provision for receivables in the amount of R$ 679 in its financial statements as of December 31, 2017.

To resolve the question of the liability of the CCSA consortium to reimburse the costs of re-establishment of the collateral and use of the contractual limiting factor, the affiliated company opened arbitration proceedings with the International Chamber of Commerce (ICC) against CCSA, which are in progress. This process is confidential under the Arbitration Regulations of the ICC.

Renova Energia S.A. (‘Renova’)

Going concern

On December 31, 2018 the jointly controlled investee Renova reported a consolidated loss of R$ 856 (R$ 1,139 on 2017 and R$1,101 on 2016), accumulated losses of R$ 3,051 (R$ 2,195 on 2017), current liabilities in excess of current assets by R$ 458 (R$ 1,607 on 2017), an equity deficit of R$ 76, negative gross margin and needs to obtain capital to comply with its commitments, including those for construction of wind and solar power plants..

These events or conditions indicate the existence of relevant uncertainty that may raise significant doubt about its ability to continue as a going concern as of December 31, 2018.

In this scenario, the investee and its shareholders, including the Company, approved a corporate and financing restructuring plan with the aim of rebalancing its liquidity and cash flow structure, resolving the capital structure and honoring its commitments, including the approval of a binding proposal from AES Tietê Energia S.A. for purchase of the investee’s wind farms and renegotiation of debt with financial creditors. Management of the Company and the investee believe that, with the success of the measures approved, it will be possible to recover economic, financial and liquidity balance to continue the investee’s business in the future.

However, in view of the investee’s equity deficit, the Company has reduced the carrying value of its equity interests at Renova to zero and no further losses have been recognized, considering the non-existence of any legal or constructive obligations to the investee.

The continuity of Renova as a going concern depends on the success of the implementation of these measures, continuity of the flow of dividends from its investees, and obtaining of the necessary funding, from its shareholders and/or from outside parties.

Amazônia Energia S.A. and Aliança Norte Energia S.A.

Amazônia Energia and Aliança Norte are shareholders of Norte Energia S.A. (‘NESA’), which holds the concession to operate the Belo Monte Hydroelectric Plant. Through the jointly-controlled entities referred to above, Cemig GT owns an indirect equity interest in NESA of 11.69%.

NESA has expended significant funds for costs of organization, development and pre-operating costs, resulting in negative net working capital of R$ 2,762 as of December 31, 2018 (R$2,651 as of December 31, 2017). The completion of the construction of the Belo Monte plant, and consequent generation of revenues, in turn, depend on the capacity of the investee to continue to comply with the planned construction schedule, as well as obtaining the necessary financial resources, either from its shareholders and / or from third parties.

On April 7, 2015, NESA was awarded a preliminary injunction ordering the regulator to ‘abstain, until hearing of the application for an injunction made in the original case, from applying to Appellant any penalties or sanctions in relation to the Belo Monte Hydroelectric Plant not starting operations on the date established in the original timetable for the project, including those specified in an the regulator (Aneel) Normative Resolution 595/2013 and in the Concession Contract for the Belo Monte Hydroelectric Plant’. The legal advisers of NESA have classified the probability of loss as ‘possible’ and estimated the potential loss on December 31, 2018 to approximately R$ 1,643 (R$286 on December 31, 2017).

Companhia de Transmissão Centroeste de Minas

On December 20, 2018 Cemig stated to Eletrobras its intention of exercise its right of first refusal for acquisition of the equity interest held by Eletrobras in Companhia de Transmissão Centroeste de Minas S.A. (‘Centroeste’) which was the subject of Lot P in Eletrobras Auction 01/2018, held on September 27, 2018.

On January 15, 2019 Cemig became aware of the ratification by Eletrobras of the object of Eletrobras Auction 01/2018, referring to the exercise of first refusal, by the Company, in acquisition of the shareholding interest in Centroeste, conclusion of which will take place in 2019.

17.1 – Business combination

Light S.A. (‘Light’)

Acquisition of additional equity interest in RME, and control of Light.

Until November 27, 2018, the Company held, through the holding companies, RME (jointly controlled entity at that time) and Lepsa, an aggregate direct and indirect equity interest of 48.9% in Light. On that same date, RME sold 2.13% of its equity interest in Light, for R$ 65, and, as a result, a loss of R$ 7 was recognized in the RME’s statement of income.

On November 30, 2018, BB-Banco de Investimento S.A., BV Financeira S.A. – Crédito, Financiamento e Investimento and Banco Santander (Brasil) S.A. exercised their put option to sell to the Company the remaining interests in the shares of RME, equivalent to 25% interest, for R$ 659. Of the total amount paid, R$104 represented the fair value of the shares of RME acquired, and R$556 corresponded to the loss already recognized by the Company upon valuation of the put, as disclosed in Note 32.

As a result of the above, the Company holds 100% of the share of RME.

Acquisition of control of Light

Due to the exercise of the put option on the RME’s shares, by the other shareholders of RME, the Shareholders’ Agreement related to the jointly control of the investee Light lost effect, and the Company directly and indirectly holds an aggregated 49.99% of Light’s voting shares. As a result the Company currently controls Light, in accordance with the provisions of IFRS 10 – Consolidated financial statements.

In addition, upon obtaining control of Light, the investments Lightger, Axxiom, Guanhães Energia and Itaocara in which the Company exercised joint control with Light, became controlled subsidiaries of the Company.

As specified in IFRS 3 – Business combinations, the Company remeasured the interest previously held in the investments at fair value, and any difference between the fair value and the carrying value of the previously held interest was recognized in the statement of income for the year, as follows:


	Light			Lightger			Total
Fair value at November 30, 2018		3,198			257			3,455
Equity interest held by the Company before the acquisition of control		47.25	%		49.00	%
Company’s original interest, valued at fair value on the acquisition date		1,511			126			1,637
Original book value		(1,794	)		(42	)		(1,836	)

Gain (loss) on remeasurement of previously held equity interest in subsidiaries acquired		(283	)		84			(199	)

The fair value of the net assets acquired, and the remeasurement of the previous held interest in the subsidiaries is as follows:


	Light		Lightger		Total
Total consideration paid (1)		104		—		104
Previously held interest, valued at fair value on the acquisition date		1,511		257		1,768

Total		1,615		257		1,872

Intangible – Right to exploitation of the regulated activity		475		127		602
Fair value of other assets and liabilities identified		1,140		130		1,270

Total		1,615		257		1,872

(1)	The interest in LightGer was acquired indirectly and did not involve a payment of consideration.

The above, related to the right to exploitation of the regulated activity and the fair value of other assets and liabilities identified are presented in the operating segments of generation and distribution. No material effects were identified between the fair value and the book value of the assets and liabilities of Axxiom, Guanhães and Itaocara.

As described in Note 33, on November 30, 2018, the Company classified its investment in Light, Lightger, Axxiom, Guanhães Energia and Itaocara as Assets held for sale and discontinued operations.

Parajuru, Volta do Rio and Morgado

On May 17, 2018, Company signed a ‘Private Transaction Agreement’ with Energimp S.A. (‘Energimp’), in relation to investments held by both, the Company and Energimp in Central Eólica Praias de Parajuru S.A. (‘Parajuru’), Central Eólica Volta do Rio S.A. (‘Volta do Rio’) and Central Eólica Praia de Morgado S.A. (‘Morgado’), and settlement of the debt owed by Energimp to the Company.

Energimp debt arose due to a contractual penalty for the delay in the start of the operations of the three wind farms, in which the Company acquired a 49% interest in 2009. As a result of this delay, an adjustment was made to the original purchase price for an amount of R$37.

On December 20, 2018, the Company acquired 51% equity interest held by Energimp in Parajuru and Volta do Rio, which became wholly-owned subsidiaries, in exchange for its 49% interest in Morgado.

Consideration paid for the 51% interest in Parajuru and Volta do Rio was as follows:



Amount owed by Energimp due to the adjustment of the original acquisition price of the investees	37
Inflation adjustment of the adjustment to the acquisition price (Note 30).	77
Indemnities	2
Adjustments under the negotiation for elimination of crossover holdings of the assets (1)	(12	)

Total amount owed to the Company by Energimp as a result of the arbitration process.	104
49% equity interest held by the Company in Morgado (2).	39
Cash consideration (3).	24

Consideration paid for a 51% interest in Parajuru and Volta do Rio	167

(1)	Amounts have been adjusted in accordance with the terms of the agreement. On December 20, 2018, a valuation was made to determine the fair value of the net assets acquired, resulting in an adjustment for the difference between the fair value of the net assets and the value used as a reference.

(2)	The fair value of Morgado was calculated by independent appraisal using of the discounted cash flow valuation model.

(3)	Cash payment to Energimp for the reimbursement of amounts paid in excess of the final settled amount comprised of: R$ 5 already been paid in 2018, R$ 16 that will be paid in 2019, and R$ 3 that were deposited in an escrow account as guarantee against future contingencies.

Prior to the transaction above, the Company owned a joint controlled interest of 49% in the share capital of Parajuru and Volta do Rio. As such these investment were accounted for under the equity method.

Upon obtaining control, the Company remeasured the previously held interest in these investments at fair value, and the difference between the fair value and the carrying value was recognized in the statement of income for the year, as follows:


	Parajuru			Volta do Rio			Total
Fair value on the transaction date		146			181			327
Previously held interest before the acquisition of control		49	%		49	%

Previously held interest at fair value on the acquisition date		71			89			160
Carrying value as of acquisition date		50			30			80

Gain on remeasurement of previously held equity interest in subsidiaries acquired		21			59			80

The allocation of the fair value of the interest acquired, and the remeasurement of the previous equity interest in the subsidiaries are as follows:


	Parajuru		Volta do Rio		Total
Total consideration paid for 51% interest in Parajuru and Volta do Rio.		75		92		167
Previously held interest, of 49%, at fair value on the acquisition date		71		89		160

Total		146		181		327

Intangible – Right to exploitation of the regulated activity (1)		66		96		162
Fair value of other assets and liabilities identified		80		85		165

Total		146		181		327

(1)	Intangible corresponding to the right of authorization to generate wind power granted to the investees, identifiable and with defined useful life.

The above effects are presented in the operating segment of generation.

17.2 - Risks related to compliance with law and regulations

Jointly controlled investees:

Norte Energia S.A. (‘NESA’) - through Amazônia Energia and Aliança Norte

Investigations and other legal measures are in progress since 2015, conducted by the Federal Public Attorneys’ Office, which involve other shareholders of NESA and certain executives of those other shareholders. In this context, the Federal Public Attorneys have started investigations on irregularities involving contractors and suppliers of NESA and of its other shareholders, which are still in progress. At present, it is not possible to determine the outcome of these investigations, and their possible consequences. These might at some time in the future affect the investee. In addition, based on the results of the independent internal investigation conducted by NESA and its other shareholders, an infrastructure write-down of the R$ 183 was already recorded at NESA, and reflected in the Company’s consolidated financial statements through the equity pick effect in 2015.

On March 9, 2018 Operação Fortuna started, as a 49th phase of ‘Operation Lava Jato’ (‘Operation Carwash’). According to what has been disclosed by the media this operation investigates payment of bribes by the construction consortium of the Belo Monte power plant, comprising the companies Camargo Corrêa, Andrade Gutierrez, Odebrecht, OAS e J. Malucelli. Management of NESA believes that so far there are no new facts that have been disclosed by the 49th phase of ‘Operation Carwash’ that require additional procedures and internal independent investigation in addition to those already carried out.

Madeira Energia S.A. (‘MESA’)

Investigations and other legal measures are in progress since 2015, conducted by the Federal Public Attorneys’ Office, which involve other indirect shareholders of MESA and certain executives of those other indirect shareholders. In this context, the Federal Public Attorneys have started investigations searching for irregularities involving contractors and suppliers of MESA and of its other shareholders. In response to allegations of possible illegal activities, the investee and its other shareholders started an independent internal investigation.

The independent internal investigation, concluded in February 2019, in the absence of any future developments such as any leniency agreements by third parties that may come to be signed or collaboration undertakings that may be signed by third parties with the Brazilian authorities, found no objective evidence enabling it to be affirmed that there were any supposed undue payments by MESA (SAESA) that should be considered for possible accounting write-off, passthrough or increase of costs to compensate undue advantages and/or linking of MESA with the acts of its suppliers, in the terms of the witness accusations and/or cooperation statements that have been made public.

Renova Energia S.A. (‘Renova’)

Since 2017 Renova is part of a formal investigation by the Civil Police of Minas Gerais State related to certain capital injections made by some of its controlling shareholders, including Cemig GT and capital injections made by Renova in certain projects under development in previous years. As a consequence, the Board of Directors of Renova requested an internal independent investigation, which is being conducted by a third party investigator. A separate independent internal monitoring committee was also set up to accompany the internal investigation, jointly with the Audit Committee.

On April 11, 2019, the Brazilian Federal Police commenced the “Operation E o Vento Levou” as part of the Lava Jato Investigation, and executed a search and seizure warrant issued by a Federal Court of São Paulo at Renova’s head office in São Paulo, based on allegations and indications of misappropriation of funds harmful to the interests of Cemig. Based on the allegations being investigated, these events are alleged to have taken place before 2015.

The internal investigation is in progress and, although deficiencies in internal controls were noted in relation to the documentation of certain payments and the archiving of support documentation for services provided by third parties, no evidence supporting the allegations has been uncovered so far. Additional procedures are still required to complete the last phase of the investigation. As a result, no adjustments were recorded on the financial statements of jointly controlled Renova nor on the Company’s consolidated financial statements for the year ended December 31, 2018.

Other investigations

In addition to the cases above, there are investigations being conducted by the Public Attorneys’ Office of the State of Minas Gerais (‘MPMG’) and by the Civil Police of the State of Minas Gerais (‘PCMG’), which aim to investigate possible irregularities in the investments made by Cemig GT at Guanhães Energia and also at MESA. These proceedings are being investigated through the analysis of documents demanded by the respective authorities, and by hearing of witnesses.

Internal procedures for risks related to compliance with law and regulations

Taking into account the investigations that are being conducted at the Company, at Cemig GT and at certain investees, as described above, the governance bodies of the Company have authorized contracting a specialized company to analyze the internal procedures related to these investments. This independent investigation is subject to oversight of an independent committee whose creation was approved by our Board of Directors on October 5, 2018. (Comitê Especial de Investigação) (the “Independent Committee”).

On April 11, 2019, agents of the Brazilian Federal Police presented themselves at Company’s head office in Belo Horizonte to execute a search and seizure warrant issued by a Federal Court of São Paulo in connection with the operation named ‘Operação e o Vento Levou’ as previously described.

The first phase of Company’s internal investigation was completed and the report was delivered on May 14, 2019, and considering the current status and preliminary results of the internal investigations, no effect was recorded in the consolidated financial statements as of December 31, 2018.

The Company will evaluate any changes in the future scenario and eventual impacts that could affect the Financial Statements, when applicable. The Company will collaborate with the relevant authorities and their analysis related to the investigations in progress.