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32. RELATED PARTY TRANSACTIONS (Tables)

12 Months Ended

Dec. 31, 2019

Disclosure of transactions between related parties [line items]

Schedule of cemig's principal balances and transactions with related parties

Cemig’s main balances and transactions with related parties and its jointly-controlled entities are as follows:

ASSETS

LIABILITIES

REVENUE

EXPENSES

COMPANY

2019

2018

2019

2018

2019

2018

2017

2019

2018

2017

Shareholder

Minas Gerais State Government

Current

Receivables from customers and traders (1)

346

245

–

–

166

163

163

–

–

–

ICMS tax – early payment (2)

–

–

–

11

12

–

–

–

Non-current

Accounts Receivable – AFAC (3)

115

246

–

–

17

18

18

–

–

–

Jointly-controlled entity

Aliança Geração

Current

Transactions with energy (4)

–

–

14

13

40

35

34

(166

)

(165

)

(147

)

Provision of services (5)

1

2

–

–

7

12

12

–

–

–

Interest on Equity, and dividends

103

91

–

–

–

–

–

–

–

–

Contingency (6)

–

–

32

–

–

–

–

(32

)

–

–

Baguari Energia

Current

Transactions with energy (4)

–

–

1

1

–

–

–

(8

)

(11

)

(7

)

Provision of services (5)

–

–

–

–

1

1

1

–

–

–

Madeira Energia

Current

Transactions with energy (4)

6

6

58

64

68

70

70

(730

)

(778

)

(686

)

Advance for future energy supply (7)

–

7

–

–

–

9

9

–

–

–

Reimbursement due to cancelled contract (8)

4

42

–

–

4

2

2

–

–

–

Non-current

Reimbursement for cancelled contract (8)

–

4

–

–

–

–

–

–

–

–

Norte Energia

Current

Transactions with energy (4)

–

–

24

23

22

16

16

(228

)

(202

)

(122

)

Advance for future power supply (9)

40

–

–

–

–

–

–

–

–

–

Lightger

Current

Transactions with energy (4)

–

–

2

–

–

–

–

(21

)

(21

)

(19

)

Hidrelétrica Pipoca

Current

Transactions with energy (4)

–

–

1

1

–

–

–

(19

)

(19

)

(15

)

Retiro Baixo

Current

Transactions with energy (4)

–

–

–

–

5

4

–

(5

)

(5

)

(6

)

Interest on Equity, and dividends

6

6

–

–

–

–

–

–

–

–

Hidrelétrica Cachoeirão

Current

–

–

Interest on Equity, and dividends

3

2

–

–

–

–

–

–

–

–

Renova

Current

Transactions with energy (4)

–

–

–

1

4

–

–

–

(81

)

(179

)

Non-current

Advance for future energy supply (8)

–

–

–

–

–

–

7

–

–

–

Accounts Receivable (10)

–

594

–

–

94

106

37

(688

)

–

–

Loans from related parties (11)

17

–

6

–

–

–

–

–

–

–

Reimbursement for suspension of supply of power

–

–

–

–

–

–

52

–

–

–

Reimbursement for cessation of power purchase agreement

–

–

–

–

–

–

10

–

–

–

Empresa Amazonense de Transmissão de Energia (EATE)

Current

Transactions with energy (4)

–

–

–

–

–

–

–

–

–

(26

)

COMPANY

ASSETS

LIABILITIES

REVENUE

EXPENSES

2019

2018

2019

2018

2019

2018

2017

2019

2018

2017

Light

Current

Transactions with energy (4)

–

–

1

1

98

60

54

(9

)

(1

)

(1

)

Interest on Equity, and dividends

73

10

–

–

–

–

–

–

–

–

Taesa

Current

Transactions with energy (4)

–

–

9

8

–

–

–

(96

)

(109

)

(127

)

Provision of services (5)

–

–

–

–

1

1

1

–

–

–

Hidrelétrica Itaocara

Current

Adjustment for losses (12)

–

–

22

–

–

–

–

–

–

–

Cia. Transirapé de Transmissão

Current

Transactions with energy (4)

–

–

–

–

–

–

–

–

–

(10

)

Provision of services (5)

–

–

–

–

–

–

1

–

–

–

Axxiom

Current

Provision of services (13)

–

–

3

–

–

–

–

–

–

–

Transudeste

Current

Transactions with energy (4)

–

–

–

–

–

–

–

–

–

(2

)

Provision of services (5)

–

–

–

–

–

–

1

–

–

–

Transleste

Current

Transactions with energy (4)

–

–

–

–

–

–

–

–

–

(3

)

Provision of services (5)

–

–

–

–

–

–

1

–

–

–

Centroeste

Current

Interest on Equity, and dividends

1

1

–

–

–

–

–

–

–

–

Other related parties

FIC Pampulha

Current

Cash and cash equivalents

36

274

–

–

–

–

–

–

–

–

Marketable securities

743

727

–

–

8

1,106

9

–

–

–

(–) Marketable securities issued by subsidiary companies (Note 24)

(3

)

(24

)

–

–

–

–

–

–

–

–

Non-current

–

–

–

Marketable securities

2

101

–

–

–

–

–

–

–

–

Forluz

Current

Post-employment obligations (14)

–

–

145

123

–

–

–

(197

)

(192

)

(174

)

Supplementary pension contributions – Defined contribution plan (15)

–

–

–

–

–

–

–

(78

)

(78

)

(84

)

Administrative running costs (16)

–

–

–

–

–

–

–

(30

)

(28

)

(26

)

Operating leasing (17)

179

–

35

2

–

–

–

(55

)

(46

)

(55

)

Non-current

Post-employment obligations (14)

–

–

2,827

2,046

–

–

–

–

–

–

Operating leasing (17)

–

–

149

–

–

–

–

–

–

–

Cemig Saúde

Current

Health Plan and Dental Plan (18)

–

–

141

120

–

(227

)

–

–

(186

)

(193

)

Non-current

Health Plan and Dental Plan (18)

–

–

3,022

2,271

–

–

–

–

–

–

The main conditions and characteristics of interest with reference to the related party transactions are:

(4)	The transactions in sale and purchase of energy between generators and distributors take place through auctions in the Regulated Market, and are organized by the federal government. In the Free Market, transactions are made through auctions or through direct contracting, under the applicable legislation. Transactions for transport of energy, on the other hand, are carried out by transmission companies and arise from the centralized operation of the National Grid, executed by the National System Operator (ONS).
(5)	Refers to a contract to provide plant operation and maintenance services.
(6)	This refers to the aggregate amounts of legal actions realized and legal actions provisioned arising from the agreement made between Aliança Geração, Vale S.A. and Cemig. The action is provisioned in the amount of R$98, of which Cemig’s portion is R$32.
(7)	In 2017, payments of R$70 were made to Santo Antônio Energia, subsidiary of Madeira Energia: R$52 was advanced by Cemig GT; R$ 12 by Sá Carvalho; and R$ 6 by Rosal. The last installment was paid in January 2019.
(8)	Refers to reimbursement due to termination of contract related to change of the “power purchase agreements” (CCEARs) between Santo Antônio Energia S.A., a subsidiary of Madeira Energia, and Cemig Distribuição – totaling R$ 84, to be settled in 24 monthly installments, with inflation adjustment by the Selic rate and maturities up to January 2020. The outstanding amount at December 31, 2019 was R$4.
(9)	Refers to advance payments for energy supply made in 2019 to Norte Energia, established by auction and by contract registered with the CCEE (Power Trading Chamber). In full-year 2020 Norte Energia S.A. will deliver contracted supply in the amount of R$40. There is no financial updating of the contract.
(10)	As mentioned in Note 18, in June 2019, due to the uncertainties related to continuity of Renova, an estimated loss on realization of the receivables was recorded for the full value of the balance in the amount of R$688.
(11)	On November 25 and December 27, 2019, DIP loan contracts under court-supervised reorganization proceedings, referred to as ‘DIP’ and ‘DIP 2’, were entered into between the Company and Renova Energia S.A., in the amounts of R$10 and R$6.5, respectively. The contracts specify interest equal to 100% of the accumulated variation in the DI rate, plus an annual spread, applied pro rata die (on 252-business-days basis), of 1.083% for the DIP contract and 2.5% for the DIP2 contract, up to the date of respective full payment. The proceeds of this loan were allocated to the investee’s minimum cash needs. The contracts specify a guarantee, given by the investee and its guarantor, through surety and a fiduciary assignment on the shares of the special-purpose company Mina de Ouro, which represents 120% of the principal value of the loan, according to an independent valuation.
(12)	A liability was recognized corresponding to the Company’s interest in the share capital of Hidrelétrica Itaocara, due to its negative equity (see Note 18).
(13)	This refers to a contract for development of management software between Cemig D and Axxiom Soluções Tecnológicas S.A., instituted in Aneel Dispatch 2657/2017;
(14)	The contracts of Forluz are updated by the Expanded Customer Price Index (Índice Nacional de Preços ao Consumidor Amplo, or IPCA) calculated by the Brazilian Geography and Statistics Institute (IBGE) plus interest of 6% p.a. and will be amortized up to the business year of 2031 (see Note 26).
(15)	The Company’s contributions to the pension fund for the employees participating in the Mixed Plan, and calculated on the monthly remuneration, in accordance with the regulations of the Fund.
(16)	Funds for annual current administrative costs of the Pension Fund in accordance with the specific legislation of the sector. The amounts are estimated as a percentage of the Company’s payroll.
(17)	Rental of the Company’s administrative head offices, in effect until November 2020 (able to be extended every five years, up to 2035) and August 2024 (able to be extended every five years, up to 2034), with annual inflation adjustment by the IPCA index and price reviewed every 60 months. Aiming at costs reduction, in November, 2019, Cemig returned the Aureliano Chaves building to Forluz.
(18)	Post-employment obligations relating to the employees’ health and dental plan (see Note 26).

Schedule of dvidends receivable from equity investees

Dividends receivable from Company’s equity investees are as follows:

Dividends receivable		2019				2018
Light		73				–
Aliança Geração		103				91
Others (1)		10				29
		186				120

(1)	The subsidiaries grouped in ‘Others’ are identified in the table above under “Interest on Equity, and Dividends”.

Schedule of cemig is provider of surety or guarantee of loans, financings and debentures of related parties

Cemig has provided guarantees on loans, financing and debentures of the following related parties – not consolidated in the financial statements because they relate to jointly-controlled entities or affiliated companies:

Related party

Relationship

Type

Objective

2019

Maturity

Norte Energia (NESA)

Affiliated

Surety

Financing

2,555

2042

Light (1)

Affiliated

Counter-guarantee

Financing

684

2042

Santo Antônio Energia (SAESA) (2)

Affiliated

Guarantee

Financing

939

2034

Santo Antônio Energia (SAESA) (2)

Affiliated

Surety

Debentures

424

2037

Centroeste

Jointly-controlled entity

Surety

Financing

5

2023

4,607

(1)	Related to execution of guarantees of the Norte Energia financing.
(2)	Corporate guarantee given by Cemig to Saesa.

Schedule of total costs of key management personnel

The total costs of key personnel, comprising the Executive Board, the Fiscal Council, the Audit Committee and the Board of Directors in 2019, 2018 and 2017, are within the limits approved at a General Shareholders’ Meeting, and the effects on the income statements of the years ended, are as follows:

		2019				2018				2017
Remuneration		25				34				32
Profit sharing (reversal)		6				4				1
Assistance benefits		1				3				2
Total		32				41				35

Related parties [Member]

Disclosure of transactions between related parties [line items]

Schedule of financial investments in securities of related parties, in the investment fund

The financial investments of the investment fund in marketable securities of related parties are as follows:

Issuer of security

Type

Annual contractual
conditions

Maturity

2019
29,93%

2018
44.20%

ETAU (1)

Debentures

108.00% of CDI

Dec. 01, 2019

–

5

Light

Promissory Note

CDI + 3.50%

Jan. 22, 2019

–

3

–

8

(1)	Empresa de Transmissão do Alto Uruguai S.A.