LIGHT S.A.

MANAGEMENTS PROPOSAL ANNUAL SHAREHOLDERS MEETING ON APRIL 26, 2012

Table of Contents
Table of Contents.................................................................................1 Management Proposal..........................................................................4 Net Income Allocation ..........................................................................5 13.1 - Describe the policy or practice of compensation of the board of directors, statutory and non-statutory board of executive officers, fiscal council, statutory committees, and audit, risk, financial and compensation committees, addressing the following aspects........12 There is no compensation or benefit connected with the occurrence of a certain corporate event, such as the sale of share control of the Company.........................................................................................15 13.2 Total compensation per body:..............................................16 13.4 Concerning the share-based compensation plan of the board of directors and statutory board of executive officers in effect in the last fiscal year and estimated for the current fiscal year, describe: ........................................................................................................25 13.5. Inform the number of shares or quotas directly or indirectly held in Brazil or abroad, and other securities convertible into shares or quotas, issued by the issuer, its direct and indirect controlling shareholders, subsidiaries or companies under common control, by members of the board of directors, statutory board of executive officers or fiscal council, grouped by body, on the closing date of the last fiscal year: ...............................................................................30 13.6. Concerning the share-based compensation of the board of directors and statutory board of executive officers recognized in the income for the last three fiscal years and the one estimated for the current fiscal year, prepare a table with the following content:......30 13.7 - Concerning the outstanding options of the board of directors and statutory board of executive officers at the end of the last fiscal year, prepare a table with the following content:............................32

13.8. Concerning the options exercised and shares granted as share-based compensation for the board of directors and the statutory board of executive officers during the last 3 fiscal years, prepare a table with the following content:.....................................32 13.10 - Provide the following information on pension plans in effect for members of the Board of Directors and Statutory Board of Executive Officers, prepare a table with the following contents: . . .35 (*) Amount calculated based on the value of quota of Plan C and D on 12/31/2012.................................................................................36 13.11 For the last 3 fiscal years, concerning the board of directors, the statutory executive board and the fiscal council, provide the following information in a table::.....................................................36 13.12. Description of contractual arrangements, insurance policies or other instruments that structure compensation or indemnification mechanisms for members of management in case of termination of employment or retirement, indicating the financial consequences to the issuer. .......................................................................................37 13.13. In relation to the last 3 fiscal years, indicate the percentage of total compensation of each body recognized in the issuers result corresponding to members of the board of directors, statutory board of executive officers or fiscal council that are related parties to the controlling shareholders, direct or indirectly, as defined by the accounting principles about this subject...................................37 13.14. With regard to the last three fiscal years, indicate the amounts recognized in the issuers result as compensation of members of the board of directors, statutory board of executive officers or fiscal council, grouped by body, for any reason other than the performance of their position's duties, such as commissions and consulting or advisory services rendered........................................37 13.15. In relation to the last three fiscal years, indicate the amounts recognized in the income of indirect and direct controlling shareholders, companies under common control and subsidiaries of the issuer, such as, compensation of the members of the board of directors, statutory board of executive officers or fiscal council, grouped by body, specifying why these amounts were assigned to these individuals.............................................................................38 10. Comments of the Board of Executive Officers:.............................45 10.1. Executive Officers shall comment on :...................................45 12.6. In relation to each manager and members of the issuers Fiscal Council, indicate the following in a table:..............................92 12.7. Provide information mentioned in 12.6 for members of statutory committees, as well as audit, risk, finance and compensation committees, even if said committees or structures are not statutory :...........................................................................93

12.8. For each manager and fiscal council member, please provide: ........................................................................................................93 12.9. Inform the existence of marital or stable relationship, or kinship up to second degree between:............................................97 12.10. To inform about the hierarchical structures, services rendered or control relationship, over the last 3 fiscal years, between issuers managers and:.....................................................98

LIGHT S.A.

Management Proposal
Dear Sirs,
The Management of Light S.A. (Company) hereby submits to the consideration of its shareholders participating at the Annual Shareholders Meeting to be held on April 26, 2012, at 2:00 p.m., at the Companys headquarters located at Av. Marechal Floriano, 168, Parte, 2 andar, Corredor A, Centro, in the city and state of Rio de Janeiro, the following proposals of the agenda:

1) To acknowledge the Managements accounts and analyze, discuss and vote on the financial statements for the fiscal year ended December 31, 2012 (according to the document available in the IPE system Category: Standardized Financial Statements DFP); 2) To resolve on the allocation of net income for the fiscal year ended December 31, 2012 (according to the document available in the IPE system Category: Meeting, Type: Management Proposal, and Agenda: Allocation of Income); 3) To establish the Managements overall annual compensation (according to the document available in the IPE system Category: Meeting, Type: Management Proposal, and Agenda: Compensation of the Management and Board of Directors); 4) To install and elect the members of the Fiscal Council (according to the document available in the IPE system Category: Meeting, Type: Management Proposal, and Agenda: Election of Members of the Board of Directors and Fiscal Council); and 5) To establish the overall annual compensation of the members of the Fiscal Council (according to the document available in the IPE system Category: Meeting, Type: Management Proposal, and Agenda: Compensation of the Management and Board of Directors). Rio de Janeiro, March 26, 2013 Management

I Allocation of Income (Rule 481 (EXHIBIT 9-1-II) Net Income Allocation

1. Inform the net income for the fiscal year Net income for fiscal year 2012 was four hundred twenty-three million, nine hundred twenty-three thousand, four hundred fifty-eight reais and forty-three centavos (R$423,923,458.43). 2. Inform the overall amount and amount per share of dividends, including prepaid dividends and interest on equity that have already been declared. The amount declared in advance was two hundred fifty-six million, five hundred forty-nine thousand, forty-seven reais and forty-eight centavos (R$256,549,047.48), of which one hundred sixty-nine million, eight hundred seventy-seven thousand, seventy-one reais and ninetyeight centavos (R$169,877,071.98) as dividends, and eighty-six million, six hundred seventy-one thousand, nine hundred seventy-five reais and fifty centavos (R$86,671,975.50) as interest on equity. The total amount per share of dividends and interest on equity is R$1.258. 3. Inform the percentage of net income for the fiscal year distributed The Management proposes to distribute the equivalent to 60.5% of the net income for fiscal year 2012. 4. Inform the overall amount and amount of dividends per share distributed based on the net income for previous fiscal years The Management proposes to distribute ninety-one million, seven hundred seventy thousand, three hundred and twenty-seven reais (R$91,770,327.00) based on the profit retention reserve recorded on the balance sheet as of December 31, 2012. The amount per share of dividends is forty-five centavos (R$0.45). 5. Inform, net of prepaid dividends and interest on equity already declared: a. The gross amount of dividends and interest on equity separately for each type and class of share 5

The gross amount of dividends proposed, in addition to those already declared, is ninety-one million, seven hundred seventy thousand, three hundred and twenty-seven reais (R$91,770,327.00), equivalent to R$0.45 per common share (Light S/A ON). b. The form and period for the payment of dividends and interest on equity The form and period for the payment of dividends will be defined at the Annual Shareholders Meeting. c. Any restatement and interest applied to the dividends and interest on equity There will be no restatement or interest applied to the dividends. d. The declaration date of payment of dividends and interest on equity used to identify shareholders who will be entitled to such payments To be defined at the Annual Shareholders Meeting. 6. If dividends or interest on equity have been declared based on net income recorded in the semiannual balance sheet or balance sheets for shorter periods: a. Inform the amount of dividends and interest on equity already declared
Prepaid dividends totaled one hundred sixty-nine million, eight hundred seventy-seven thousand, seventy-one reais and ninety-eight centavos (R$169,877,071.98) and interest on equity already declared amounted to eighty-six million, six hundred seventy-one thousand, nine hundred seventy-five reais and fifty centavos (R$86,671,975.50).

b. Inform the date of the respective payments The prepaid dividends were paid on December 27, 2012, and the interest on equity will be paid by April 30, 2013.

7. Provide a comparative table with the following amounts per share of each type and class: a. Net income for the fiscal year and for the three (3) previous fiscal years b. Dividends and interest on equity distributed in the last three (3) previous fiscal years
2010 2011 Net income for the fiscal year 575,150 310,647 Dividends distributed/proposed 350,979 208,361 Interest on equity distributed 86,754 Number of common shares 203,934,060 203,934,060 Net income per share 2.82 1.52 Dividends per share 1.72 1.02 Interest on equity per share 0.43 *Management Proposal subject to resolution at the Annual Shareholders Meeting 2012* 423,923 261,647 86,672 203,934,060 2.08 1.28 0.43

8. If net income was allocated to the legal reserve a. Identify the amount allocated to the legal reserve To this reserve, it is allocated 5% of the net income for the fiscal year up to the limit of twenty percent (20%) of the capital stock and after absorption of accumulated losses, pursuant to Article 193 of Law 6,404, i.e. eighteen million, seven hundred eighteen thousand, eight hundred eighty-two reais and ninety-two centavos (R$18,718,882.92). b. Detail the method used to calculate the legal reserve 5% of the net income for the fiscal year after absorption of accumulated losses. 9. If the company has preferred shares with the right to fixed or minimum dividends The company does not have preferred shares. a. Describe the calculation method for the fixed or minimum dividends

b. Inform if the net income in the fiscal year is sufficient for the full payment of fixed or minimum dividends c. Identify if any portion not paid is cumulative d. Identify the overall amount of fixed or minimum dividends to be paid for each class of preferred shares e. Identify the fixed or minimum dividends to be paid per preferred share for each class 10. In relation to the minimum mandatory dividends a. Describe the calculation method set forth in the bylaws In compliance with Article 202 of Law 6,404 and Article 25 of the Bylaws, each fiscal year shareholders will be entitled to minimum mandatory dividends of twenty-five percent (25%) of the Companys net income. b. Inform whether they have been fully paid The minimum mandatory dividends have been fully paid. c. Inform any amount withheld There was no withheld amount. 11. If any of the minimum mandatory dividend was withheld due to the Companys financial situation Not applicable a. Inform the amount withheld b. Describe in detail the companys financial situation, including the aspects related to liquidity analysis, working capital and positive cash flows c. Justify the withholding of dividends

12. If a portion of net income was allocated to the contingency reserve Not applicable a. Identify the amount allocated to the reserve b. Identify any losses deemed probable and their causes c. Explain why the loss was deemed probable d. Justify the constitution of the reserve 13. If a portion of net income was allocated to the unearned income reserve Not applicable a. Inform the amount allocated to the unearned income reserve b. Inform the nature of the unearned income that originated the reserve 14. If a portion of net income was allocated to the statutory reserves Not applicable a. Describe the clauses of the bylaws that established the reserve b. Identify the amount allocated to the reserve c. Describe how the amount was calculated 15. If the withholding of profit was provided for in the capital budget a. Identify the amount withheld
Not applicable

b. Provide copy of the capital budget

16. If a portion of net income was allocated to the fiscal incentive reserve Not applicable a. Inform the amount allocated to the reserve b. Explain the nature of the allocation

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II Compensation of the Management and Board of Directors (Rule 481 - Art.12) Proposal for Compensation of the Management and Fiscal Council
Compensation of the Management and Fiscal Council
For fiscal year 2013, the Company submitted, at the Board of Directors Meeting held on March 25, 2013, the proposal for overall annual compensation of the Management of the Company, Light S.E.S.A. and of Light Energia S.A. totaling seventeen million, two hundred fiftytwo thousand, and six hundred fifty-three reais (R$17,252,653.00), and for individual compensation of the members of the Fiscal Council, when serving as a sitting member, in the amount of seven thousand, five hundred and thirty-eight reais (R$7,538.00), and when serving as an alternate member, in the amount of three thousand, seven hundred and sixty-nine reais (R$3,769.00), both of them on a monthly basis.

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Item 13 Reference Form Compensation of the Management and Fiscal Council 13.1 - Describe the policy or practice of compensation of the board of directors, statutory and non-statutory board of executive officers, fiscal council, statutory committees, and audit, risk, financial and compensation committees, addressing the following aspects1 a. Objectives of the compensation policy and practice Based on market research, the Companys compensation policy complies with the best corporate governance practices and aims to attract and retain qualified and competent professionals. The Companys strategy is to maintain a transparent and sustainable policy geared toward a results-oriented culture. In this context, the variable compensation plays an important role, since shareholders share success and value generation with the executive officers, creating a long-term vision and sustainability, in addition to aligning all their interests. The Human Resources Committee, within the Companys organizational structure, is responsible for addressing matters related to the compensation of the statutory management. This Committee is instated on a permanent basis and aims to review and propose to the Board of Directors policies and guidelines of compensation of the Company's statutory executive officers, as well as of the members of the Board of Directors and Fiscal Council, based on the performance targets established by the Board of Directors. The Board of Directors examines the Human Resources Committees proposals and approves the fixed and variable compensation amounts, respecting the limits established at the Annual Shareholders Meeting. b. i. breakdown of the compensation, indicating: description of the compensation components and the objectives of each

one of them: The Company adopts a compensation model composed of monthly fixed compensation and variable compensation, depending on the result of individual and corporate performance indicators, in addition to benefits.
1

The information on the compensation policy must cover audit, risk, financial and compensation committees, as well as related organizational structures, even if such committees or structures are not statutory, as long as these committees or structures participate in the decision-making process of the management bodies or of management of the issuer as consultant or controller.

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1 Board of Directors The members of the Board of Directors are entitled only to fixed compensation. All members receive the same compensation based on the position they hold: sitting member or alternate. 2 Board of Executive Officers The members of the Board of Executive Officers are entitled to fixed and variable compensation. The amounts paid as fixed compensation are based on the markets average, including a more substantial portion in the variable compensation, based on individual performance, as well as the Companys global indicators, which allows the risks and results to be shared, aligning the interests of the Company with those of the executive officers. It is worth noting that the Company has a Human Resources Committee that examines the compensation strategy to be adopted, as well as its beneficiaries, which is subsequently submitted to the Board of Directors for approval. 3 Fiscal Council The compensation of the Fiscal Council is fixed at the shareholders meeting in which the members are elected and may not be inferior to 10% of the average compensation assigned to each executive officer, excluding benefits, procuration fees. The members of this group are entitled only to fixed compensation, in addition to legal reimbursements for transportation and lodging expenses necessary for the performance of their duties. 4 Committees All members of the Committees are administrators and do not receive any extra compensation for participating in these committees. ii. share of each compensation component in the total compensation In the case of the Board of Directors and Fiscal Council, the fixed compensation represents 100% of their total compensation. In the case of the Board of Executive Officers, in 2012 the fixed portion represented 64% of the total compensation, the variable portion represented 29%, and 13

the portion other represented 7%. The percentages may vary according to the results achieved and the respective attaining of the targets established in each year. iii. calculation and adjustment method of each compensation component The fixed and variable portions of the Executive Officers compensation are based on the markets development, through surveys conducted by specialized consulting firms, so that competitiveness may be measured and the need to perform any adjustments may be verified. The fixed compensation is established considering samesize companies, as well as the duties, complexity and knowledge level required for the position. The variable compensation depends on the achievement of targets for financial and operating results that are common for all members of the Board of Executive Officers. The compensation of the Board of Directors and Fiscal Council is adjusted according to the inflation on an annual basis. iv. reasons justifying the compensations breakdown The Company has a compensation policy that concentrates a substantial portion in the variable compensation, in line with its strategy of sharing success and value generation with the executive officers, in addition to fostering a long-term vision and sustainability. c. main performance indicators that are taken into consideration when To determine the compensation, the Companys global indicators are taken into consideration, which are approved by the Board of Directors and include the targets set for the year (such as EBITDA, net income, dividends, quality of services rendered, occupational safety, losses, collection, and other indicators). d. how the compensation is structured to reflect the evolution of the performance indicators The variable compensation is directly connected with the Companys global performance and the achievement of the targets established for the period under consideration.

determining each compensation component:

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e.

how the compensation policy or practice aligns itself with the Companys The Companys compensation policy chiefly aims to align the interests of the

interests in the short, medium and long terms members of the Management with the interests of the Shareholders, assigning a global compensation and elements that are compatible with the markets best practices in the segments where the Company operates and with its short-, mid-, and long-term goals, as well as with its goals of value generation to shareholders, sharing risks and results with the Companys executive officers. f. existence of a compensation supported by subsidiaries, controlled companies or direct or indirect controlling shareholders The subsidiaries Light SESA and Light Energia partially support the compensation of the Companys Management. There is no other compensation or benefit supported by direct or indirect controlling shareholders. g. existence of any compensation or benefit connected with the occurrence of a certain corporate event, such as the sale of share control of the issuer There is no compensation or benefit connected with the occurrence of a certain corporate event, such as the sale of share control of the Company.

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13.2 Total compensation per body2:

Statutory Fiscal Board of Board of Counci Directors Executive l Officers 21.25 8.25 10

2013

Total 40.00

No. of members Fixed annual compensation (R$) Salaries/ officers compensation Direct and fringe benefits Participation in Committees Others Variable compensation Bonus Profit Sharing Attendance at Meetings Commissions Others Post-employment benefits Benefits due to the termination of the position held Share-based payment Total compensation
2

2,295,455 8,980,680 805,205 12,001,198 1,846,0 94 5,549,18 671,00 8,066,28 8 5 6 813,352 813,352 369,219 2,618,14 134,20 3,121,55 0 1 9 5,171,31 5,251,45 2 5 5,171,31 5,171,31 2 2 80,143 80,143 -

2,295,4 14,151,9 805,2 17,252,6 55 92 06 53

The information on the compensation policy must include the audit, risk, financial and compensation committees, as well as similar organizational structures, even if these committees or structures are non-statutory, as long as they participate in the decision-making process of the issuers administration or management bodies as advisors or inspectors.

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2012

Board of Directors 21.25

Statutory Board of Executive Officers 8.33

Fiscal Counci l 10

Total 39.58

No. of members Fixed annual compensation (R$) Salaries/ officers compensation Direct and fringe benefits Participation in Committees Others Variable compensation Bonus Profit Sharing Attendance at Meetings Commissions Others (ILP) Post-employment benefits Benefits due to the termination of the position held Share-based payment Total compensation

1,514,123 8,849,995 1,261,76 9 5,298,894 730,687

665,3 11,393,2 08 60 554,42 7,143,36 4 8 1,018,13 0 -

252,354 -

2,820,414 110,88 3,231,76 5 2 3,975,52 3,975,528 8 3.975.52 3.975.528 8 975,890

975,890

1,514,12 13,801,41 665,3 15,980,8 3 3 08 44

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2011 No. of members Fixed annual compensation (R$) Salaries/ officers compensation Direct and fringe benefits Participation in Committees Others Variable compensation Bonus Profit Sharing Attendance at Meetings Commissions Others (ILP) Post-employment benefits Benefits due to the termination of the position held Share-based payment Total compensation

Board of Directors 20.33 1,076,323 1,076,323 -

Statutory Board of Executive Officers 7.75 5,231,339 4,474,651 756,688

Fiscal Counci l 10

Total 38.1

520,541 6,828,203 520,541 6,071,515 756,688 -

7,297,920 1,802,591 5,495,329 -

7,297,920 1,802,591 5,495,329 -

1,076,323

12,529,259 520,541 14,126,123

2010

Board of Directors

Statutory Board of Executive

Fiscal Council

Total

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Officers No. of members Fixed annual compensation (R$) Salaries/ officers compensation Direct and fringe benefits Participation in Committees Others Variable compensation Bonus Profit Sharing Attendance at Meetings Commissions Others (ILP) Postemployment benefits Benefits due to the termination of the position held Share-based payment Total compensation 6,073,715 5,883,868 189,847 22.00 1,089,819 1,089,819 7.17 5,747,259 4,218,507 1,468,317 5.00 369,120 369,120 34.17 7,145,763 5,677,446 1,468,317 6,073,715 5,883,868 189,847 -

2,183,430

2,183,430

1,089,819

13,943,969

369,120

15,402,908

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13.3 Variable Compensation:

Variable compensation estimated for the current fiscal year 2013 Board of Directors Number of members Bonus Minimum amount estimated in the compensation plan Maximum amount estimated in the compensation plan Amount estimated in the compensation plan, in case the targets are achieved Amount effectively recognized in the income for the fiscal year Profit sharing Minimum amount estimated in the compensation plan Maximum amount estimated in the compensation plan Amount estimated in the compensation plan, in case the targets are achieved Amount effectively recognized in the income for the fiscal year Statutory Board of Executive Officers 8.33 Fiscal Council -

Total 8.33

zero 12.58 salaries Average of 8.98 salaries

zero 12.58 salaries Average of 8.98 salaries

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Variable Compensation fiscal year ended on 12/31/2012 Statutory Board of Board of Fiscal Total Directors Executive Council Officers Number of 8.33 8.33 members Bonus 3,975,528 Minimum amount estimated in the zero zero compensation plan Maximum amount estimated 13.55 13.55 in the salaries salaries compensation plan Amount estimated in the Average of Average compensation plan, 9.68 of 9.68 in case the targets salaries salaries are achieved Amount effectively recognized in the 3,975,528 income for the fiscal year Profit sharing Minimum amount estimated in the compensation plan Maximum amount estimated in the compensation plan Amount estimated in the compensation plan, in case the targets are achieved Amount effectively recognized in the income for the fiscal year -

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Variable Compensation fiscal year ended on 12/31/2011 Statutory Board of Board of Fiscal Total Directors Executive Council Officers Number of 7.75 7.75 members Bonus 1,802,591 1,802,591 Minimum amount estimated in the zero zero compensation plan Maximum amount estimated 10.25 10.25 in the salaries salaries compensation plan Amount estimated in the Average of Average compensation plan, 7.32 of 7.32 in case the targets salaries salaries are achieved Amount effectively recognized in the 1,802,591 1,802,591 income for the fiscal year Profit sharing Minimum amount estimated in the compensation plan Maximum amount estimated in the compensation plan Amount estimated in the compensation plan, in case the targets are achieved Amount effectively recognized in the income for the fiscal year -

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Variable Compensation fiscal year ended on 12/31/2010 Statutory Board of Board of Fiscal Total Directors Executive Council Officers Number of 22 7.17 5 34.17 members Bonus 5,883,868 5,883,868 Minimum amount estimated in the compensation plan Maximum 140% of 140% of amount estimated 12.92 12.92 in the salaries salaries compensation plan Amount estimated in the Average of Average of compensation 10.60 10.60 plan, in case the salaries salaries targets are achieved Amount effectively recognized in the 5,883,868 6,073,715 income for the fiscal year Profit sharing Minimum amount estimated in the compensation plan Maximum amount estimated in the compensation plan Amount estimated in the compensation plan, in case the targets are achieved Amount effectively recognized in the income for the fiscal year -

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13.4 Concerning the share-based compensation plan of the board of directors and statutory board of executive officers in effect in the last fiscal year and estimated for the current fiscal year, describe: In the last fiscal year, there was no share-based compensation plan nor it is forecast for the current fiscal year. The share-based compensation plan was in effect until January 26, when the last granted options were exercised. The share-based compensation plan is not forecast for the current fiscal year. a. general terms and conditions: At the Special Shareholders Meeting, held on March 3, 2008, the shareholders approved the Long-Term Incentive Plan of the Company, in the Modality of Stock Options, and the Long-Term Incentive Plan of the Company in the Modality of Phantom Stock Options, as per deliberation proposal previously approved by the Companys Board of Directors at the meeting held on February 13, 2008. The eligible beneficiaries of the Stock Option Modality were the Companys executive officers, provided that they had not been nominated by the Board of Directors to participate in the Long-Term Incentive Plan in the modality of Phantom Stock Options. Options granted totaled 6,917,733, equivalent to 3.4% of total shares issued by the Company, and the strike price to be paid by the holders is R$21.49 per Option, less eventual amounts paid per share to shareholders as dividends, interest on equity or capital reduction. These options may be fully exercised, in a sole opportunity, between August 10, 2010 and August 10, 2011. In the event the employment contract or term of office of the Beneficiaries of the Options is terminated by initiative of the Board of Directors, before the end of the grace period, the Beneficiary may exercise up to five (5) business days after being withdrawn from the Company: fifty percent (50%) of the Options granted to the Beneficiary, in case the seventy percent (70%) of the Options granted to the Beneficiary, in case withdrawal took place between 12 and 24 months as of August 10, 2006; the withdrawal took place between 24 and 36 months as of August 10, 2006;

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ninety-five percent (95%) of the Options granted to the Beneficiary, in case

the withdrawal took place between 36 and 48 months as of August 10, 2006. Considering that the executives were eligible to 95% of the total options granted (6,917,733 shares), equivalent to 6,571,846 shares, the other Options were automatically cancelled. b . main goals of the plan: The purpose of this Stock Option Plan (Plan) was to grant stock options issued by Light S.A. (Light or Company) to eligible statutory executive officers, with the following goals (i) To retain executives; (ii) To align the interests of executives with the goals and interests of shareholders; (iii) To share the success and value generation with the executives; and (iv) To create a long-term and sustainability vision. c. how the plan contributes to these goals: The Plan contributed to the goals in the sense that the value generation to shareholders reflects on the appreciation of the Company shares. Therefore, the increase in the market value of the Company shares generated an increase in the executives gains, since the value of share purchase is fixed and, yet, deductible from dividends paid. In addition, the longer the executive remained working for the Company, the higher the appropriated percentage of this appreciation. d. how the plan is included in the issuers compensation policy: The plan was included in the Companys compensation policy to the extent that its main objective was also to align the interests of the members of the Management with the interests of the Shareholders, assigning a global compensation that is compatible with its short-, mid-, and long-term objectives, as well as with its objectives of value generation to shareholders, sharing risks and results with the Companys executive officers. e. how the plan aligns the Managements interests and of the issuer in the short, mid, and long-term: The gains of the Management were directly proportional to a successful value generation and their length of service at the Company.

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f. maximum number of shares: The Long-Term Incentive Plan in the Stock Options modality was limited to the grant of call options for 6,917,733 shares, which represented, on the date of approval of the plan, i.e., March 3, 2008, 3.4% of total shares of Light S.A. Each option entitled its holder to acquire one (1) common share issued by Light, strictly on the terms and conditions set forth in this plan. g. maximum number of options to be granted: The Long-Term Incentive Plan in the Stock Options modality was limited to the grant of call options for 6,917,733 shares, which represented, on the date of approval of the plan, 3.4% of total shares of Light S.A. h. conditions for share acquisition: The strike price was R$21.49 per common share call option, less eventual amounts paid per share to shareholders as dividends, interest on equity or capital reduction between the date of approval of the plan and the exercise of the option, which led to an exercise price of R$15.86 on the option exercise date. i . criteria to establish the purchase or strike price: The criteria to establish the purchase price was a 20% discount on the average quote of the Company shares verified within 60 days before the Board of Directors meeting that decided to submit the Stock Option Plan to the Special Shareholders Meeting for approval. j. criteria to establish the term of exercise: The options would be fully exercisable, in a sole opportunity, between August 10, 2010 and August 10, 2011, except in case of secondary sale of shares issued by the Company by its current controlling shareholders, in which event the beneficiaries would be able to exercise their stock option before August 2010. k. form of payment: The payment could be made in cash upon acquisition, except for the cases in which the Beneficiary notifies the Company about its option for immediately partially or fully selling all its shares on the stock exchange. In this case, the payment related to the 27

amount to be immediately sold could be made through the issue, by the Beneficiary, of a pro-soluto promissory note maturing on the first business day after the financial settlement of the sale transaction. l. restrictions on the transfer of shares: The number of shares to be transferred could not be higher than 30% of the average of shares traded in the last 5 sessions. m. criteria and events that, when verified, will cause the suspension, alteration or cancellation of the plan: In the event of (i) deregistering as a publicly-held company, (ii) the Companys delisting from the Novo Mercado listing segment; or (iii) corporate restructuring, in which the Company resulting from this operation was not admitted to Novo Mercado, the options would be released to be totally or partially exercised by the Beneficiaries. The Board of Directors was to establish special rules that would allow the shares purpose of the Options to be sold in the tender offer to be carried out in compliance with Bovespas Novo Mercado Listing Rules and the Bylaws in effect. In the event shareholders of RME at the time no longer held, whether directly or indirectly, at least 50% of the controlling group of the Company, the grace period for the exercise of the stock options would be anticipated, maintaining, in relation to the year in which the transfer of control was verified, the same percentages corresponding to the year of the executives withdrawal from the Company, as long as he resigned his position as an officer of Light. In case the Company were involved in: (i) merger, incorporation resulting from the liquidation of Light S.A., spin-off with transfer of all or substantially all operating assets of Light S.A. to another Company; or (ii) sale of all or substantially all operating assets of Light S.A.; or (iii) another form of corporate restructuring that generated a similar effect, the Board of Directors should adjust, by common agreement with the Beneficiaries included in previous Programs and in an equitable manner, the Plan and the other terms and conditions of the options to the changes made in the shares of Light, so as to preserve the financial and economic breakeven of the rights granted to the holders of the Options.

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n. effects of the withdrawal of the issuers manager over his rights established in the share-based compensation plan: In case the employment contract or term of office of the Beneficiaries of the Options were terminated by initiative of the Board of Directors, before the end of the grace period, the Beneficiary could exercise within five (5) business days after his withdrawal * 50% of the options granted to the Beneficiary, if the withdrawal took place between 12 and 24 months as of August 10, 2006; * 70% of the options granted to the Beneficiary, if the withdrawal took place between 24 and 36 months as of August 10, 2006; * 95% of the options granted to the Beneficiary, if the withdrawal took place between 36 and 48 months as of August 10, 2006; The early exercise of the options would not apply to the events of employment contract and/or the term of office termination with cause (as this term is defined by prevailing labor laws), neither of noncompliance with Lights Bylaws and/or other corporate provisions provided for in Law 6,404/76. In case the Beneficiary had his employee contract and/or term of office terminated with Light due to retirement, permanent disability or decease, during the effectiveness of the Plan, the grace period would be anticipated and all the options would be automatically exercised.

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13.5. Inform the number of shares or quotas directly or indirectly held in Brazil or abroad, and other securities convertible into shares or quotas, issued by the issuer, its direct and indirect controlling shareholders, subsidiaries or companies under common control, by members of the board of directors, statutory board of executive officers or fiscal council, grouped by body, on the closing date of the last fiscal year3:
Light S.A. 12/31/2012 Common Shares Board of Directors Fiscal Council Board of Executive Officers Total Shares 1,010 0 0 203,934,060 0% 0% 0% 100%

Total shares 1,010 0 0 203,934,060 0% 0% 0% 100%

Board of Directors Board of Executive Officers Total Shares

Light SESA (subsidiary) 12/31/2012 Common Shares 8 0% 0 203,934,060,011 0% 100%

Total shares 8 0% 0 0% 100%

203,934,060,011

Board of Directors Board of Executive Officers Total Shares

Light Energia S.A. (subsidiary) 12/31/2012 Common Shares Total shares 0 0% 0 0% 0 77,421,581 0% 100% 0 77,421,581 0% 100%

13.6. Concerning the share-based compensation of the board of directors and statutory board of executive officers recognized in the income for the last three fiscal years and the one estimated for the current fiscal year, prepare a table with the following content4: 2013: There is no share-based compensation forecast for the current fiscal year. 2012: None.
3

To avoid duplicity, when a person is a member of the board of directors and of the board of executive officers, the securities held by him or her shall be disclosed exclusively in the amount of securities held by the members of the board of directors.
4

To avoid duplicity, the amounts calculated as compensation of the members of the board of directors shall be deducted from the compensation of executive officers who compose said body.

30

2011: None.
Share-based compensation for the fiscal year ended 12/31/2010 Board of Directors Number of members Stock option grant Grant date Number of options granted Term for options to become exercisable Maximum term for the exercise of the options Term of restriction on the transfer of the shares Weighted average strike price: (a) Of the options outstanding in the beginning of the fiscal year (b) Of the options lost during the fiscal year (c) Of the options exercised during the fiscal year (R$) (d) Of the options expired during the fiscal year Fair value of the options on the grant date Potential dilution in case all granted options are exercised 3/14/2008 6,917,733* August 10, 2010 August 10, 2011 0 Statutory Board of Executive Officers 2

15.86**

Null The fair value on grant date is R$11.28 Null

* Out of the total options granted (6,917,733 shares) the executives were eligible to 95%, corresponding to 6,571,846 shares. ** A total of 1,725,346 shares were exercised until January 26, 2010.

31

13.7 - Concerning the outstanding options of the board of directors and statutory board of executive officers at the end of the last fiscal year, prepare a table with the following content5: There are no outstanding options. 13.8. Concerning the options exercised and shares granted as share-based compensation for the board of directors and the statutory board of executive officers during the last 3 fiscal years, prepare a table with the following content:
Options exercised fiscal year ended 12/31/2010 Number of members Exercised options Number of shares Weighted average strike price Difference between the strike price and the market value of the shares related to the exercised options (R$) Shares delivered Number of shares delivered Weighted average purchase price (R$) Difference between the purchase price and the market value of the purchased shares (R$) Board of Directors 0 Statutory Board of Executive Officers 2 1,725,346 16 15,107,300

1,725,346 16 15,107,300

2011: None. 2008: None.

To avoid duplicity, the amounts calculated as compensation of the members of the board of directors shall be deducted from the compensation of executive officers who compose said body.

32

13.9 - Brief description of the information necessary to understand the data disclosed in items 13.6 to 13.8, such as the explanation of the pricing method of shares and options, indicating at least: a . pricing model Black & Scholes Model b. data and assumptions used in the pricing model, including the share weighted average price, strike price, expected volatility, life term of the option, expected dividends and risk-free interest rates Calculation assumptions used in the model: - Share weighted average price: Not applicable. - Strike price: R$21.49 - Expected volatility: 44% - Life term of the option: 890 days - Expected dividends Not applicable. - Risk-free interest rates: 8% c. the method used and the assumptions made to incorporate the expected effects of early exercise The best estimate of the Company at that time was that there would not be early exercise, therefore this assumption was not considered in the pricing model used. d . how the expected volatility is determined 33

The historical volatility was used based on share return. The last 247 observations, as of the grant date, were considered. e. if any other features of the option was incorporated when measuring its fair value Not applicable.

34

13.10 - Provide the following information on pension plans in effect for members of the Board of Directors and Statutory Board of Executive Officers, prepare a table with the following contents:
Board of Directors Number of members Name of the plan Number of managers who have conditions to retire Conditions for early retirement in Plan C 0 Statutory Board of Executive Officers 8 (5 are participants of Braslight, 1 in Plan C and 4 in Plan D) Plan C and Plan D 0 To be at least 45 years old and have at least 36 months of credited service (period of continuous service at the sponsor). To be at least 50 years old and registered in the Plan or have a work contract with the sponsor for at least 3 years in effect R$1,912,460.70,considering only the contributions related to the period from 2007 to 2012)(*)

Conditions for early retirement in Plan D Adjusted amount of the contributions accumulated up to the end of the last fiscal year, deducting the amount related to contributions directly made by the members of the management Total accumulated amount of the contributions made during the last fiscal year, deducting the amount related to contributions directly made by the members of the management

R$ 261,595.85(*)

Possibility of early redemption and conditions

Redemption is always possible. Its value corresponds to: [100% of the balance of the participants individual account (resulting from the contributions made by the participant)]+[a percentage of the individual account of the sponsor (resulting from the contributions made by the sponsor) available by 50% plus 0.5% for each month of binding to the Plan, limited to 80%]+[100% of resources from publiclyheld entities].

35

(*) Amount calculated based on the value of quota of Plan C and D on 12/31/2012.

13.11 For the last 3 fiscal years, concerning the board of directors, the statutory executive board and the fiscal council, provide the following information in a table:6:

2010 b number of members c value of the highest individual compensation (R$) d value of the lowest individual compensation (R$) e value of average individual compensation (R$)

Statutory Board of Executive Officers 7.17 1,690,341 629,742 1,944,766

Board of Directors 22 94,500 47,250 70,875

Fiscal Council 5 73,824 73,824 73,824

2011 b number of members c value of the highest individual compensation (R$) d value of the lowest individual compensation (R$) e value of average individual compensation (R$)

Statutory Board of Executive Officers 7.75 2,815,549 908,181 1,616,678

Board of Directors 20.33 98,519 49,259 52,943

Fiscal Council 10 77,280 26,644 52,054

To verify the amounts to be inserted in this item, use the criteria established in item 13.2.

36

2012 b number of members c value of the highest individual compensation (R$) d value of the lowest individual compensation (R$) e value of average individual compensation (R$)

Statutory Board of Executive Officers 8.33 2,303,482

Board of Directors 21.25 104,255 52,128 59,377

Fiscal Council 10 83,003

825,776 1,318,489

41,497 55,442

13.12. Description of contractual arrangements, insurance policies or other instruments that structure compensation or indemnification mechanisms for members of management in case of termination of employment or retirement, indicating the financial consequences to the issuer. None. 13.13. In relation to the last 3 fiscal years, indicate the percentage of total compensation of each body recognized in the issuers result corresponding to members of the board of directors, statutory board of executive officers or fiscal council that are related parties to the controlling shareholders, direct or indirectly, as defined by the accounting principles about this subject. None. 13.14. With regard to the last three fiscal years, indicate the amounts recognized in the issuers result as compensation of members of the board of directors, statutory board of executive officers or fiscal council, grouped by body, for any reason other than the performance of their position's duties, such as commissions and consulting or advisory services rendered. None.

37

13.15. In relation to the last three fiscal years, indicate the amounts recognized in the income of indirect and direct controlling shareholders, companies under common control and subsidiaries of the issuer, such as, compensation of the members of the board of directors, statutory board of executive officers or fiscal council, grouped by body, specifying why these amounts were assigned to these individuals.

38

LIGHT SESA:
2012 Number of members Annual Fixed Compensation (R$) Salary/officers compensation Direct and fringe benefits Participation in committees Other Variable Compensation Bonus Profit Sharing Attendance at meetings Commissions Other (ILP) Post-employment benefits Benefits due to the termination of the position held Share-based compensation Overall Total Board of Directors 17.67 1,193,817 994,848 198,970 1,193,817 Statutory Board of Executive Officers 8.25 7,388,223 4,432,848 620,043 2,335,332 3,271,508 3,271,508 780,712 11,440,443 Fiscal Council Total 25.92 8,582,040 5,427,696 620,043 2,575,107 3,271,508 3,271,508 780,712 12,634,260

39

2011 Number of members Annual Fixed Compensation (R$) Salary/officers compensation Direct and fringe benefits Participation in committees Other Variable Compensation Bonus Profit Sharing Attendance at meetings Commissions Other (ILP) Post-employment benefits Benefits due to the termination of the position held Share-based compensation Overall Total

Board of Directors 16.85 873,361 873,361 873,361

Statutory Board of Executive Officers 7.75 4,350,908 3,686,781 664,126 6,114,041 1,490,339 4,623,712 10,464,948

Fiscal Council -

Total 24.33 5,224,268 4,560,142 664,126 6,114,041 1,490,339 4,623,712 11,338, 309

40

2010 Number of members Annual Fixed Compensation (R$) Salary/officers compensation Direct and fringe benefits Participation in committees Other Variable Compensation Bonus Profit Sharing Attendance at meetings Commissions Other (ILP) Post-employment benefits Benefits due to the termination of the position held Share-based compensation Overall Total

Board of Directors 18 854,663 854,663 854,663

Statutory Board of Executive Officers 7.17 4,871,903 3,449,222 1,422,681 5,221,886 5,051,024 170,862 1,853,878 11,947,667

Fiscal Council -

Total 25.17 5,726,566 4,303,885 1,422,681 5,221,886 5,051,024 170,862 1,853,878 12,802,330

41

Light Energia:

2011 Number of members Annual Fixed Compensation (R$) Salary/officers compensation Direct and fringe benefits Participation in committees Other Variable Compensation Bonus Profit Sharing Attendance at meetings Commissions Other (ILP) Post-employment benefits Benefits due to the termination of the position held Share-based compensation Overall Total

Statutory Board of Executive Officers 5 550,311 336,157 11,113 203,040 306,467 306,467

Board of Directors

Fiscal Council

Total 5 550,311 336,157 11,113 203,040 306,467 306,467

97,589 954,368 97,589 954,368

42

2011 Number of members Annual Fixed Compensation (R$) Salary/officers compensation Direct and fringe benefits Participation in committees Other Variable Compensation Bonus Profit Sharing Attendance at meetings Commissions Other (ILP) Post-employment benefits Benefits due to the termination of the position held Share-based compensation Overall Total

Statutory Board of Executive Officers 5.79 353,800 340,404 13,396 454,087 131,993

Board of Directors

Fiscal Council

Total

322,094 807,887

43

2010 Number of members Annual Fixed Compensation (R$) Salary/officers compensation Direct and fringe benefits Participation in committees Other Variable Compensation Bonus Profit Sharing Attendance at meetings Commissions Other (ILP) Post-employment benefits Benefits due to the termination of the position held Share-based compensation Overall Total

Statutory Board of Executive Officers 5 363,260 347,854 15,406 346,403 346,403 111,209 820,872

Board of Directors

Fiscal Council

Total 5 363,260 347,854 15,406 346,403 346,403 111,209 820,872

III - Comments of the Management on the Companys Financial Situation Pursuant to Item 10 of the Reference Form

44

10. Comments of the Board of Executive Officers:

10.1. Executive Officers shall comment on7 8: a. general financial and equity conditions

The Companys revenues represent proceeds from the following energy segments: distribution, generation, trading and services. The distribution segment accounts for 90.5% of consolidated net revenue, while the generation and trading segments account for 5.7% and 3.8%, respectively.

On December 31, 2012, the Companys shareholders equity was R$3.0 billion, 4.6% (R$146.1 million) down on December 31, 2011, chiefly due to the payment of proposed additional dividends and actuarial losses.
On December 31, 2012, the Companys cash position was R$392.9 million. The Companys current working capital is sufficient to meet existing requirements and its cash resources, including loans from third parties; to finance its activities; and cover its need for resources. On the same date, the Companys net debt totaled R$4,273.1 billion. The net debt to shareholders equity ratio stood at 1.4 in 2012, versus 1.1 in 2011. Management believes that the Companys equity and financial conditions is sufficient to implement its business plan and meet its short and medium-term obligations.

Capital structure and possibility of redemption of shares or interest, indicating: Below is the fluctuation of the Net Debt / (Net Debt + Shareholders Equity) and Shareholders Equity / (Net Debt + Shareholders Equity) ratios, where Net Debt = Loans and Financing + Debentures Cash and Cash Equivalents), calculated as follows:

Capital Structure Net Debt/(Net Debt+Shareholders Equity) Shareholders Equity/(Net Debt+Shareholders Equity)

2011 68.4% 31.6%

2012 58.5% 41.5%

The information included in the annual disclosure of the reference form must refer to the last 3 year-end financial statements. When the reference form is disclosed upon request of registration of public securities offering, the information must refer to the last 3 year-end financial statements and the last accounting information disclosed by the issuer.
8

Whenever possible, Management must also use this field to comment on the main trends acknowledged, uncertainties, commitments or events that may have a material effect on the financial and equity conditions of the issuer, especially its results, revenue, profit, and conditions and availability of financing sources.

45

i.

Cases of redemption

ii. formula used to calculate the redemption value

There are no possibilities of redeeming shares issued by the Company in addition to those envisaged by law.

c. ability to pay financial obligations

The Company believes to have liquidity and capital resources sufficient to cover its indebtedness, cash flows and liquidity position, which can be complemented by resources borrowed from public and private financial institutions, to cover its investments, expenses, debt and other amounts to be paid in the coming years. However, it cannot ensure that this situation will remain the same.

d. sources used to finance working capital and investments in non-current assets:

In addition to partially using its own cash generation, the main source of financing for the Companys investment projects is the BNDES, which usually offers lower interest rates than the private market, in addition to terms of payment compatible with the investment projects return period. If the investment project is not eligible for BNDES financing, the Company usually raises funds through the capital market (debentures), multilateral development agencies or other sources from the banking market.

e. sources of financing for working capital and investments in non-current assets to be used to cover illiquidity
Currently, the Company has working capital lines worth R$450.0 million that have been contracted and/or approved by first-tier financial institutions.

f. levels and characteristics of indebtedness, detailing: i. relevant loan and financing agreements 46

On December 31, 2012, the Companys total outstanding consolidated indebtedness was R$4,618.2 million, of which 13.1% (R$604.2 million) was indexed in foreign currency. Of the total indebtedness mentioned above, 10.8% (R$496.6million) matures in the short term and 89.2% (R$4,121.6 million), in the long term. On December 31, 2012, the Company had swap operations denominated in foreign currency whose notional value was US$240.2 million and 34.9 million, corresponding to 96.8% of the debt balance denominated in foreign currency (excluding charges). In addition to these currency derivatives, in August 2010 the Company contracted forward interest rate swap operations in the amount of R$150 million from Banco HSBC, whose maturities were pegged to the amortization flow of the CCBs of Bradesco. The table below shows the Companys total consolidated outstanding indebtedness for the following reference periods:
Debts (R$ million) Short Term Foreign Currency Local Currency Long Term Foreign Currency Local Currency Swap Overall total 2010 543.1 13.2 529.9 1,924.20 61.3 1,862.90 5.3 2,472.60 2011 463.4 9.9 453.5 3,640.10 219.7 3,420.40 4.0 4,107.50 2012 496.6 7.0 489.6 4,121.5 597.2 3,524.4 26.3 4,644.40

In addition to the indebtedness described above, the Company also has actuarial liabilities with Braslight (the Companys pension fund plan) which amounted to R$1,054.7 million on December 31, 2012.

Relevant Financing
In 2010, 2011 and 2012, the Company contracted debt facilities, among which:

Bank Credit Certificates (CCBs) to deposit with ABN Amro Real S.A., issued on August 27, 2008, totaling R$80 million. These CCBs matured in August 2010 and was renewed with Banco Santander (new controlling shareholder of Banco Real) in the same amount and at a cost of CDI + 1.4% p.a., maturing on September 3, 2014. Credit Facility Agreement for Light SESAs and Light Energias investment programs for the two-year period 2009 and 2010, signed with the BNDES on November 30, 2009, under the FINEM direct finance modality, whose amounts financed, disbursed and the respective remunerations are detailed below:

47

 Light SESA: o FINEM TJLP + 2.58% p.a.: R$205 million maturity on April 15, 2017, of which R$146 million were disbursed by December 2010 and R$26.5 million by March 31, 2011. o FINEM TJLP + 3.58% p.a.: R$205 million maturity on April 15, 2017, of which R$146 million were disbursed by December 2010 and R$23.4 million by March 31, 2011. o FINEM PSI 4.5% p.a.: R$101 million maturity on September 15, 2019, of which R$101 million were disbursed by December 2010. Light Energia: o o o FINEM TJLP + 2.58% p.a.: R$7.4 million maturity on April 15, 2017, of which R$7 million were disbursed by December 2010. FINEM TJLP + 3.58% p.a.: R$7.4 million maturity on April 15, 2017, of which R$7 million were disbursed by December 2010. FINEM PSI 4.5% p.a.: R$16 million maturity on September 15, 2019, of which R$5 million were disbursed by December 2010 and R$1.6 million by March 2011. Credit Facility Agreements for Light SESAs and Light Energias investment programs for the two-year period 2011 and 2012, signed with the BNDES on December 6, 2011 and April 10, 2012, respectively, under the FINEM direct finance modality, whose amounts financed, disbursed and the respective remunerations are detailed below: Light SESA: o o FINEM TJLP+1.81% p.a.: R$250 million maturity on March 15, 2019, of which R$123 million were disbursed by December 2012. FINEM TJLP+2.21% p.a.: R$625 million maturity on March 15, 2019, of which R$535 million were disbursed by December 2012. Light Energia: o FINEM TJLP+1.81% p.a.: R$35.5 million maturity on March 15, 2018, of which R$26.5 million were disbursed by December 2012. Credit Facility Agreement with BNDES to fund the energy efficiency projects of Light Esco in 2011, totaling R$1.7 million, with the last one maturing on December 31, 2017 at the average TJLP ratio + 1.81% p.a. Credit Facility Agreement with BNDES to fund the SP Market Project of Light ESCO signed on January 19, 2011, totaling R$10.4 million, of which R$6.6 million were disbursed by July 13, 2012. The maturity date is October 15, 2017. The interest rate variation on the principal amount is TJLP + 1.81% p.a..

48

7th debenture issue by Light SESA worth R$650 million on May 2, 2011. The debentures will mature on May 2, 2016. The interest rate variation on the principal amount is 1.35% of the CDI p.a. 8th debenture issue by Light SESA worth R$470 million on September 10, 2012. The debentures will mature on June 4, 2026. The interest rate variation on the principal amount is 1.18% of the CDI p.a. 1st debenture issue by Light Energia worth R$170 million on April 10, 2011. The

debentures will mature on April 10, 2016. The interest rate variation on the principal amount is 1.45% of the CDI p.a. 2nd debenture issue by Light Energia worth R$452 million on December 29, 2011. The debentures will mature on August 19, 2019. . The interest rate variation on the principal amount is 1.18% of the CDI p.a. 3rd debenture issue of Light Energia worth R$30 million on September 10, 2012. The debentures will mature on June 4, 2026. The interest rate variation on the principal amount is 1.18% of the CDI p.a. Funding in foreign currency (operation 4131) on October 17, 2011 in the amount of 34.9 million (equivalent to R$85 million) through Banco BNP Paribas Brasil, with maturity on October 21, 2014; and on November 7, 2011 in the amount of US$50 million (equivalent to R$87.4 million) through Bank of America, with maturity on November 10, 2016. Funding in foreign currency (operation 4131) on August 23, 2012, in the amount of US$100 million (equivalent to R$202.0 million), for Light SESA, through Banco Citibank S.A., with maturity on February 23, 2018. Funding in foreign currency (operation 4131) on October 2, 2012, in the amount of US$80 million (equivalent to R$162.4 million), for Light Energia, through Banco Citibank S.A., with maturity on April 3, 2018.

ii.

other long-term relationship with financial institutions

The Company and its subsidiaries use several financial instruments that require, among

other obligations, that the Company maintains specific financial ratios and/or compliance with several obligations to do and not restricted to its operations. These include: Total net debt/EBITDA ratio lower or equal to 3.0. Including: CCB of Bradesco, 5th debenture issue by Light SESA, FINEM BNDES Light SESA and Light Energia (2006/2008), BNDES Agreement Light Esco, CCB of Santander, funding in foreign currency from BNP Paribas Brasil and Bank of America, 7 th and 8th

49

debenture issues by Light SESA, and 1st, 2nd and 3rd debenture issues by Light Energia. EBITDA/Adjusted and Consolidated Gross Interest Expenses ratio: higher than or equal to 2.5x. Payment of dividends: the Company may only pay dividends higher than the minimum mandatory amount if all contractual obligations are met. Lastly, the financing mentioned contracted mentioned above aims at financing the Companys investment plans and increasing its working capital

iii.

level of subordination between debts

There is no subordination level between the debts.

iv.

eventual restrictions imposed on the issuer, especially those related to

limits on indebtedness and the contracting of new debt, distribution of dividends, disposal of assets, issue of new securities and sale of controlling interest The Companys indentures envisage the maintenance of indebtedness and interest coverage ratios. In the fiscal year ended December 31, 2012, the Company attained all indicators required by contract.

g. limits on the use of loans contracted

For Credit Facility Agreements to finance Light SESA and Light Energias investment programs in for the two-year period of 2009 and 2010, signed with BNDES as FINEM direct finance, the deadline to use the total volume made available from these two credit lines is March 31, 2011. Light SESAs investment programs in for the two-year period of 2011 and 2012, signed with BNDES as FINEM direct finance, the deadline to use the total volume made available from these two credit lines is March 31, 2013.

h. material changes in each item of the financial statements

50

Exerccios findos em 31 de dezem bro de 2011 Re apre sentado % da Re ce ita Lquida 2012 % da Re ce ita Lquida Variao 2012/2011

RECEITA OPERACIONAL
Fornecimento de energia eltrica Suprimento de energia eltrica Receita de Construo Outras receitas T otal De due s Re ce ita O pe racional ICMS Encargos do consumidor PIS/COFINS Outras T otal (2.264.173) (666.950) (539.186) (3.836) (3.474.145) 6.944.785 (5.290.295) (3.828.031) (108.808) (21.377) (197.416) (326.681) (794.649) (13.333) 1.654.490 (781.291) (307.974) (467.456) (5.861) 873.199 (410.190) 175.917 (586.107) (55,1)% (1,6)% (0,3)% (2,8)% (4,7)% (11,4)% (0,2)% 23,8% (11,3)% (4,4)% (6,7)% (0,1)% 12,6% 0,0% (5,9)% 2,5% (8,4)% (32,6)% (9,6)% (7,8)% (0,1)% (50,0)% 100,0% (2.362.055) (811.660) (583.617) (5.940) (3.763.272) 7.613.096 (5.958.907) (4.534.153) (180.878) (22.147) (185.258) (314.971) (669.322) (52.178) 1.654.189 (555.087) (382.346) (548.350) 375.609 1.099.102 (1.288) (495.673) 203.949 (699.622) (31,0)% (10,7)% (7,7)% (0,1)% (49,4)% 100,0% (78,3)% (59,6)% (2,4)% (0,3)% (2,4)% (4,1)% (8,8)% (0,7)% 21,7% (7,3)% (5,0)% (7,2)% 4,9% 14,4% (0,0)% (6,5)% 2,7% (9,2)% 4,3% 21,7% 8,2% 54,8% 8,3% 9,6% 12,6% 18,4% 66,2% 3,6% (6,2)% (3,6)% (15,8)% 291,3% (0,0)% (29,0)% 24,1% 17,3% (6.508,6)% 25,9% 20,8% 15,9% 19,4% 8.274.888 530.927 794.649 818.466 10.418.930 119,2% 7,6% 11,4% 11,8% 150,0% 9.020.144 734.960 669.322 951.942 11.376.368 118,5% 9,7% 8,8% 12,5% 149,4% 9,0% 38,4% (15,8)% 16,3% 9,2%

RECEITA LQUIDA CUSTO DA OPERAO

Energia Eltrica comprada para reveda Pessoal Material Servio de terceiros Depreciao e amortizao Custo de Construo Outras

LUCRO BRUTO DESPESAS OPERACIONAIS

Despesas gerais e administrativas Despesas com vendas Outras Receitas/ Despesas

LUCRO OPERACIONAL RESULTADO DE EQUIVALNCIA PATRIMONIAL RESULTADO FINANCEIRO

Receitas Despesas

LUCRO ANTES DO IMPOSTO DE RENDA E DA CONTRIBUIO SOCIAL

Imposto de renda e contribuio social Corrente Imposto de renda e contribuio social Diferido

463.009 (56.891) (64.140) 341.978

6,7% (0,8)% (0,9)% 4,9%

602.141 (109.034) (69.184) 423.923

7,9% (1,4)% (0,9)% 5,6%

30,0% 91,7% 7,9% 24,0%

LUCRO LQUIDO DO EXERCCIO Lucro bsico por ao Lucro diludo por ao QUANTIDADE DE AES AO FINAL DO EXERCCIO

1,67690 1,65470
203.934.060

2,07873 2,05930
203.934.060

51

Analysis of the statement of income for the fiscal year ended December 31, 2012 compared to the fiscal year ended December 31, 2011
Net Operating Revenue Net operating revenue for the fiscal year ended December 31, 2012 totaled R$7,613.1 million, up 9.6% in relation to the R$6,944.8 million in 2011, due to the increase in revenue in all segments: distribution by 7.4%, generation by 31.1% and commercialization and services by 53.1%. In the distribution segment, this increase can be explained by the 2% growth of total market (captive and free markets) consumption. The increase in the commercial segment was due to a 9.1% growth of consumption, combined with the effects of the 7.82% tariff adjustment of November 2011. In the generation segment, the increase in net revenue can be explained by the higher price and volume of energy contracts traded on the free market. In the commercialization segment, the increase was mainly a reflection of the 44.3% increase in energy trading revenue, which was impacted by the higher energy resale price and volume increase This revenue growth was also a result of the larger number of projects developed during the year in the services segment. Operating Costs and Expenses In the fiscal year ended December 31, 2012, costs of goods and services sold by the Company totaled R$5,9958.9 million, a 12.6% increase in relation to the R$5,290.3 million in 2011. This increase was mainly a result of the18.4% increase in costs from the purchase of energy between the periods. Energy Purchased for Resale: Costs and expenses with energy purchases totaled R$4,534.2 million in the fiscal year ended December 31, 2012, an 18.4% increase over the R$3,828.0 million recorded in 2011, chiefly due to: (i) the upturn in difference settlement prices (PLD), which drove up the cost of thermal plant availability and spot market purchases; (ii) the readjustments to existing contracts in November 2011 and November 2012; (iii) the increase in energy purchased volume; and (iv) the exchange variation impacting energy purchase costs from Itaipu and UTE Norte Fluminense. The average purchased energy cost, excluding spot market purchases, amounted to R$134.3/MWh, 25.4% up on the R$107.1/MWh recorded in 2011. Costs with charges climbed by 11.2% between 2011 and 2012, mainly due to the annual PROINFA readjustment, in accordance with an ANEEL Resolution, and the rise in System Service Charges (ESS), thanks to the activation of thermal plants, dispatched outside the order of merit.

52

Personnel: In the fiscal year ended December 31, 2012, personnel costs amounted to R$180.9 million, an increase of 66.2% from the R$108.8 million recorded in 2011, chiefly due to insourcing in some activities, which resulted in an increase in the payroll, combined with the annual collective bargaining. Materials: In the fiscal year ended December 31, 2012, costs from materials amounted to R$22.1 million, 3.6% up on the R$21.4 million recorded in 2011. Outsourced services: In the fiscal year ended December 31, 2012, outsourced services amounted to R$185.3 million, representing a decrease of 6.2% from the R$197.4 million recorded in 2011, chiefly due to insourcing in some activities, which reduced the costs from thirdparty contracts. Depreciation and Amortization: In the fiscal year ended December 31, 2012, the depreciation and amortization totaled R$315.0 million, a 3.6% fall in relation to the R$326.7 million in 2011. This result was partially offset by the change in depreciation rates introduced by ANEEL Resolution 474/2012, which reduced the average depreciation rate, in effect since January 2012. Others: In the fiscal year ended December 31, 2012, other operating costs totaled R$52.2 million, an increase of 291.3% in relation to the R$13.3 million recorded in 2011. Gross Operating Profit In the fiscal year ended December 31, 2012, the Companys gross operating profit came to R$1,654.2 million, in line with the R$1,654.5 million recorded in 2011. Operating Expenses Selling Expenses: This line includes provisions for past due accounts (PCLD). In the fiscal year ended December 31, 2012, the Companys selling expenses totaled R$382.2 million, an increase of 24.1% in relation to the R$308.0 million recorded in 2011. In 2012, PCLD totaled R$282.6 million, versus the R$251.3 million recorded in 2011. General and Administrative expenses: In the fiscal year ended December 31, 2012, the Companys general and administrative expenses amounted to R$548.4 million, an increase of 17.3% over the R$467.5 million recorded in 2011. Other Operating Revenues (Expenses) In the fiscal year ended December 31, 2012, the Companys other revenues/expenses was a positive R$375.6 million, versus a negative R$5.9 million recorded in 2011. This result can be explained by the recording of the asset remuneration revenue of R$408.2 million at the end of the concession, calculated based on the new repositioned value criterion, defined by the Granting Power through Provisional Measure 579/2012.

53

Income Before Financial Revenues and Expenses

In the fiscal year ended December 31, 2012, the Companys operating income was R$1,097.8 million, versus R$873.2 million in 2011, an increase of 25.7%, mainly due to the recording of additional operating revenues.

Financial Revenues (Expenses)

The financial result for the fiscal year ended December 31, 2012 was a negative R$495.7 million. In 2011, the Company also had a negative financial result amounting to R$410.2 million. Revenues: In 2012, financial revenues amounted to R$203.9 million, 15.9% higher than in 2011, primarily due to the non-recurring effect of the adjustment for inflation of judicial deposits from lawsuits on the other financial revenue line, in the amount of R$37.2 million. Expenses: Financial expenses came to R$699.6 million, up 19.4% in relation to 2011. This was mainly due to the impact of the adjustment to present value that increased financial expenses, in light of the provisions in 2012 in the amount of R$74.5 million, related to conditional discounts provided for in installment contracts of large clients with Light, and due to the nonrecurring effect of the adjustment for inflation of judicial deposits from lawsuits on the other financial revenue line, in the amount of R$35.0 million, as well as to higher DIC and FIC, totaling R$38.1 million in 2012, versus R$29.8 million in 2011. Income before Income Tax and Social Contribution In the fiscal year ended December 31, 2012, income before income tax and social contribution was R$602.1 million, versus the R$463.0 million recorded in 2011, an increase of 30.0%. The factor that most contributed to such increase was the 25.7% upturn in income before the financial result. In the fiscal year ended December 31, 2012, the Company recorded income tax and social contribution totaling R$178.2 million, versus R$121.0 million in 2011. Income Tax and Social Contribution In the fiscal year ended December 31, 2012, the Company recorded income tax and social contribution totaling R$178.2 million, versus R$121.0 million in 2011. Net Income for the Period In 2012, net income totaled R$423.9 million, 24.0% higher than in 2011, chiefly driven by the higher net operating revenue and the lower operating expenses in the year.

54

Demonstrao de Resultados Anuais Exerccios findos em 31 de dezem bro de % da % da Rece ita Rece ita 2010 Lquida 2011 Lquida Em mi lhares de reais, exceto pe rcentuais ou quando indicado forma diversa

Variao 2011/2010

RECEITA OPERACIONAL
Fornecimento de energia eltrica Suprimento de energia eltrica Receita de Construo Out ras receitas T otal Dedues Re ceita O peracional ICMS Encargos do consumidor PIS/COFINS Out ras T otal 7.919.155 513.704 552.831 851.301 9.836.991 121,7% 7,9% 8,5% 13,1% 151,1% 8.274.888 530.927 794.649 818.466 10.418.930 119,2% 7,6% 11,4% 11,8% 150,0% 4,5% 3,4% 43,7% (3,9)% 5,9%

(2.219.444) (569.975) (535.303) (3.685) (3.328.407) 6.508.584 (4.633.841) (3.392.464) (168.302) (27.452) (156.965) (311.224) (552.831) (24.603) 1.874.743 (632.730) (285.066) (357.492) 9.828

(34,1)% (8,8)% (8,2)% (0,1)% (51,1)% 100,0%

(2.264.173) (666.950) (539.186) (3.836) (3.474.145) 6.944.785 (5.290.295) (3.828.031) (108.808) (21.377) (197.416) (326.681) (794.649) (13.333) 1.654.490 (781.291) (467.456) (307.974) (5.861)

(32,6)% (9,6)% (7,8)% (0,1)% (50,0)% 100,0% (76,2)% (55,1)% (1,6)% (0,3)% (2,8)% (4,7)% (11,4)% (0,2)% 23,8% (11,3)% (6,7)% (4,4)% (0,1)%

2,0% 17,0% 0,7% 4,1% 4,4% 6,7% 14,2% 12,8% (35,3)% (22,1)% 25,8% 5,0% 43,7% (45,8)% (11,7)% 23,5% 64,0% (13,9)% (159,6)%

RECEITA LQUIDA CUSTO DA OPERAO

Energia Elt rica comprada para reveda Pessoal Material Servio de terceiros Depreciao e amortizao Custo de Construo Out ras

(52,1)% (2,6)% (0,4)% (2,4)% (4,8)% (8,5)% (0,4)% 28,8% (9,7)% (4,4)% (5,5)% 0,2%

LUCRO BRUTO DESPESAS OPERACIONAIS

Despesas gerais e administrativas Despesas com vendas Out ras Receitas/ Despesas

LUCRO ANTES DAS RECEITAS/(DESPESAS) FINANCEIRAS

1.242.013

19,1%

873.199

12,6%

(29,7)%

RESULTADO FINANCEIRO
Receitas Despesas

(319.394) 173.223 (492.617)

(4,9)% 2,7% (7,6)%

(457.661) 175.917 (633.578)

(6,6)% 2,5% (9,1)%

43,3% 1,6% 28,6%

LUCRO ANTES DO IMPOSTO DE RENDA E DA CONTRIBUIO SOCIAL

Imposto de renda e contribuio social Corrente Imposto de renda e contribuio social Diferido

922.619 (103.482) (243.987) 575.150

14,2% (1,6)% (3,7)% 8,8%

415.538 (56.891) (48.000) 310.647

6,0% (0,8)% (0,7)% 4,5%

(55,0)% (45,0)% (80,3)% (46,0)%

LUCRO LQUIDO DO EXERCCIO Lucro bsico e diludo por ao QUANTIDADE DE AES AO FINAL DO EXERCCIO

2,82027
203.934.060

1,52327
203.934.060

Analysis of the statement of income for the fiscal year ended December 31, 2011 compared to the fiscal year ended December 31, 2010
Net Operating Revenue Net operating revenue for the fiscal year ended December 31, 2011 totaled R$6,944.8 million, up 6.7% compared with R$6,508.6 million in 2010, due to the increases of 6.7%, 4.9%

55

and 2.6% in the revenues of the distribution, generation and trading segments. In the

distribution segment, this increases can be explained by the 2.5% upturn in total market (captive and free markets) consumption, led by the residential and commercial segments, which climbed by 2.1% and 4.3%, respectively these segments jointly accounted for 78% of captive-market revenue and have the highest tariffs, and the effect of the 2.20% and 7.82% tariff adjustments in November 2010 and 2011, respectively. In
the trading segment, the result was strongly impacted by the increase in energy purchase and sale. The increase in net revenue in the generation segment is mainly due to the adjustments in the energy purchase agreements of the Regulated Contracting Environment and the increased revenue from the consolidation of Renova Energias revenue as of September 2011. Operating Cost In the fiscal year ended December 31, 2011, the cost of goods and services sold by the Company totaled R$5.290,3 million, up 14.2% from R$4,633.8 million in 2010. This growth basically reflects the 12.8% increase in electricity purchase costs between the periods. Energy Purchased for Resale: Costs from purchased energy for resale came to R$3,828.0 million in the fiscal year ended December 31, 2011, up 12.8% from R$3,392.5 million in 2010. This increase is a mainly a result of: (i) the 4.9% upturn in purchased energy volume, (ii) adjustments to existing contracts in November 2010 and November 2011, (iii) the entry of two new products contracted at the auction in 2006, with supply beginning in 2011 (A-5), totaling 837 GWh in 2011, at an average price of R$116.8/MWh, (iv) the Adjustment Auction (February 2011) with a contracted volume of 269 GWh at an average cost of R$108.9/MWh, and (v) the foreign exchange variation that impacted the costs with energy purchases from the Norte Fluminense thermal plant, which pushed up prices from R$127.0/MWh to R$138.3/MWh. The average purchased energy cost, excluding spot market purchases, amounted to R$105.1/MWh in 2011, 5.7% up on the R$99.4/MWh recorded in 2010. Costs for charges and transmission increased by 6.8%, mainly reflecting the 6.6% or R$27.4 million upturn in expenses from charges for the use of the core network and the 37.3% or R$8.3 million, increase in transmission system connection expenses. Personnel: In the fiscal year ended December 31, 2011, costs and expenses from personnel amounted to R$108.8 million, down 35.3% from R$168.3 million in 2010, mainly driven by the booking of R$23.1 million in provisions for the voluntary redundancy program in 4Q10, R$8.9 million of which was reversed in December 2011, as a result of lower-than-expected adhesion, giving a positive period variation of R$32.0 million.

56

Materials: In the fiscal year ended December 31, 2011, expenses with materials amounted to R$ 21.4 million, 22.1% down on the R$27.5 million recorded in 2010. Outsourced services: In the fiscal year ended December 31, 2011, expenses with outsourced services totaled R$197.4 million, 25.8% up on the R$156.9 million recorded in 2010. This increase was mainly a reflection of costs from the distribution segment, specially higher expenses with the default-prevention program, IT services, tree pruning, preventive maintenance and call center services, which corresponded to an upturn of R$32 million in the period. Depreciation and Amortization: In the fiscal year ended December 31, 2011, this line totaled R$326.7 million, up 5.0% from R$311.2 million in 2010. This result is mainly due to the investments, which increased 32.5%, from R$700.6 million in 2010 to R$928.6 million in 2011. Others: In the fiscal year ended December 31, 2011, other operating costs totaled R$13.3 million, down 45.8% from R$24.6 million in 2010. Gross Operating Profit In the fiscal year ended December 31, 2011, the Companys gross operating profit stood at R$1,654.5 million, down 11.7% from R$1,874.7 million in 2010, mainly due to the 12.8% increase in electricity purchase costs and the 25.8% growth in third-party services, offset by the 6.7% increase in net revenue. Operating Expenses Selling Expenses: This item included allowance for doubtful accounts (PDD). In the fiscal year ended December 31, 2011, the Companys selling expenses totaled R$308.0 million, down 13.9% compared with R$357.5 million in 2010. Allowance for doubtful accounts totaled R$251.3 million in 2010, compared with R$54.8 million in 2010. General and Administrative expenses: In the fiscal year ended December 31, 2011, the Companys general and administrative expenses totaled R$467.5 million, up 64.0% from R$285.1 million in 2010. Other Operating Revenues (Expenses) In the fiscal year ended December 31, 2011, the Companys balance of other operating revenues/expenses amounted to negative R$9.8 million, up 18.6% on 2009.

Income Before Financial Revenues and Expenses

57

In the fiscal year ended December 31, 2011, the Companys operating income was R$873.2 million, down 29.7% from R$1,242.0 million in 2010. This reduction was primarily due to the increase in purchased energy and outsourced service costs.

Financial Revenues (Expenses)

The financial result for the fiscal year ended December 31, 2011 was a negative R$457.7 million, versus the R$319.4 million recorded in 2010. Revenues: Financial revenues totaled R$175.9 million in 2011, up 1.6% from the previous year, due to the restatement of Light Escos contracts by the IGPM general price index (R$4.5 million) in the monetary variation line, the consolidation of Renova (R$2.1 million), and the reimbursement of costs related to the installation of a network for CSN in 2008 (R$5.7 million). Expenses: Financial expenses came to R$633.6 million, 28.6% more than in 2010, largely due to: (i) the R$84.0 million increase in servicing expenses from national and BNDES debt, due to increased funding between the periods; (ii) the R$27.6 million increase in interest on taxes, (iii) the R$27.2 million upturn in REFIS fine and interest installments. (iv) the R$19.0 million increase in the DIC and FIC fine, (v) the R$18 million increase from the adjustment of accounts receivable to present value, and (vi) the R$15.5 million increase in expenses related to Braslight, due to the R$17.3 million upturn in interest and monetary variation, partially offset by the lower actuarial deficit recorded in 2011. Income before Taxes and Minority Interest In the fiscal year ended December 31, 2011, the Companys income before taxes and minority interest stood at R$415.5 million, down 55.0% from R$922.6 million in 2010. This was due to the increase of 28.6%, or R$141.0 million, in financial expenses between the periods. Income Tax and Social Contribution In the fiscal year ended December 31, 2011, the Company recorded income tax and social contribution of R$104.9 million, versus R$347.5 million in 2010. Net Income for the Period Light recorded net income of R$301.7 million in 2010, down 46.0% from R$575.2 million in 2010.This is chiefly due to the changes in electricity purchase costs and third-party services and the financial result between the periods in comparison. ANALYSIS OF THE MAIN BALANCE SHEETS

58

Exerccios findos em 31 de dezembro de 2011 Reapresentado % do ativo total 2012 % do ativo total Variao 2012/2011

Ativo Circulante Caixa e equivalentes de caixa Ttulos e valores mobilirios Consumidores, concessionrias e permissionrias Tributos e contribuies Imposto de renda e contribuio social Estoques Rendas a receber sw ap Servios prestados a receber Despesas pagas antecipadamente Outros crditos Total do Circulante Ativo No Circulante Consumidores, concessionrias e permissionrias Tributos e contribuies Tributos diferidos Ativo financeiro de concesso Rendas a receber sw ap Depsitos vinculados a litgios Despesas pagas antecipadamente Outros crditos Investimentos Imobilizado Intangvel Total do no circulante 298.538 95.622 836.411 656.473 754 268.505 263 7.979 54.086 1.985.833 4.174.900 8.379.364 2,7% 0,9% 7,6% 5,9% 0,0% 2,4% 0,0% 0,1% 0,5% 18,0% 37,7% 75,8% 289.556 118.878 830.233 1.573.349 470 224.631 21.215 91.855 2.220.564 4.017.057 9.387.808 2,5% 1,0% 7,1% 13,4% 0,0% 1,9% 0,0% 0,2% 0,8% 18,9% 34,3% 80,1% (3,0)% 24,3% (0,7)% 139,7% (37,7)% (16,3)% (100,0)% 165,9% 69,8% 11,8% (3,8)% 12,0% 772.548 8.171 1.383.620 134.551 90.947 27.430 3.801 84.964 2.180 173.550 2.681.762 7,0% 0,1% 12,5% 1,2% 0,8% 0,2% 0,0% 0,8% 0,0% 1,6% 24,2% 377.607 15.266 1.446.171 199.182 11.662 30.355 35.070 46.154 2.426 174.870 2.338.763 3,2% 0,1% 12,3% 1,7% 0,1% 0,3% 0,3% 0,4% 0,0% 1,5% 19,9% (51,1)% 86,8% 4,5% 48,0% (87,2)% 10,7% 822,7% (45,7)% 11,3% 0,8% (12,8)%

Ativo Total

11.061.126

100,0%

11.726.571

100,0%

6,0%

59

Comparative Analysis of the Balance Sheets as of December 31, 2012 and 2011. In the assets account, the main variations were:

Cash and cash equivalents: On December 31, 2012, cash and cash equivalents amounted to R$377.6 million, a reduction of 51.1% over the R$772.5 million recorded on December 31, 2011, mainly due to less financing activities in the year, which dropped by 60

91.6% in relation to 2011. The acquisition of fixed assets climbed by 56.0%, which led to a negative impact on the Companys cash position. Payment of dividends and interest on equity resulted in a disbursement of R$425.1 million. Consumers, concessionaires and permissionaires (current and noncurrent): On December 31, 2012, consumers, concessionaires and permissionaires totaled R$1,735.7 million, in line with the R$1,682.2 million recorded on December 31, 2011. Taxes and contributions (current and noncurrent): On December 31, 2012, taxes and contributions amounted to R$318.1 million, an increase of 38.2% in relation to the R$230.2 million recorded on December 31, 2011, chiefly due to the increase in ICMS credits resulting from higher investment in electricity grid assets, which will be offset in up to four years.
Income tax and social contribution (current and noncurrent): On December 31, 2012, income tax and social contribution was R$11.7 million, 87.2% lower than the R$90.9 million recorded on December 31, 2011, mainly due to the reduction of 99.7% in advanced income tax and social contribution recorded in 2011 in relation to 2012. Financial assets from concessions: On December 31, 2012, financial assets from concessions stood at R$1,573.3 million, an increase of 139.7% in relation to the R$656.5 million on December 31, 2011. This increase was mainly a result of the new depreciation rates established by Aneel (Resolution 474/12), which led to a re-measurement of infrastructure and resulted in the reclassification of R$118.3 million from intangible assets to financial assets. Another important factor was the publishing of the Provisional Measure 579/2012, converted into Law 12,783, which defined that the calculation for asset indemnification must use the New Replacement Value (NRV) methodology, so the Company recorded the amount referring to the difference between the new replacement value and historical cost, generating a gain in the financial assets totaling R$408.1 million. In addition, the Company made significant investments in the distribution grid during the year, which when divided into two parts (bifurcated) have a direct impact on the concessions financial assets. Other receivables (current and noncurrent): On December 31, 2012, other receivables amounted to R$196.1 million, an increase of 8.0% versus the R$181. 5 million recorded on

61

December 31, 2011, mainly due to the recording of guarantees and linked deposits related to the jointly-owned subsidiary Renova Energia. Fixed assets: On December 31, 2012 , fixed assets totaled R$2,220.6 million, an increase of 11.8% versus the R$1,985.9 million on December 31, 2011, mainly due to usual investments made in the Companys operations.

Intangible assets: On December 31, 2012, intangible assets amounted to R$4,017.1 million, a reduction of 3.8% in relation to the R$4,174.9 million recorded on December 31, 2011, mainly resulting from the dilution of the interest in Renova Energia, in addition to the reclassification of R$118.3 million to financial assets of the concession, as described above in this item. In the liabilities account, the main variations were: Suppliers: On December 31, 2012, suppliers amounted to R$861.8 million, an increase of 13.8%, versus the R$757.1 million recorded on December 31, 2011, chiefly due to the higher volume of energy purchased within the scope of the Electric Energy Commercialization Chamber (CCEE) and power auctions, which in turn were impacted by the increase in the Difference Settlement Price (DSP) in the year. Loans, financing and debentures (current and noncurrent): On December 31, 2012, loans, financing and debentures (including financial charges) totaled R$4,666.0 million, an increase of 12.1% versus the R$4,162.2 million recorded on December 31, 2011. During the year, the Company raised funds totaling R$1,320.9 million, partially offset by amortizations in the amount of R$812.5 million. Contingencies: On December 31, 2012, provisions for contingencies amounted to R$583.2 million, up 13.1% from R$515.7 million on December 31, 2011. This increase can be mainly explained by adjustments and new lawsuits totaling R$174.1 million, partially offset by write-offs due to payment or reversal in the amount of R$106.6 million. Post-employment benefits: On December 31, 2012, post-employment benefits totaled R$1,370.7 million, an increase of 17.0% versus the R$1,171.2 million recorded on December 31, 2011, chiefly due to the reduction in the interest rate, which had a direct impact on the Companys actuarial liabilities for December 31, 2012. 62

Other payables (current and noncurrent): On December 31, 2012, other payables amounted to R$325.8 million, down 14.4% from the R$380.6 million recorded on December 31, 2011, chiefly due to the transfer from use of public asset of the UHE Itaocara, recorded in Itaocara Energia Ltda, the Companys direct subsidiary, to the respective Consortium that manages this plant.
Cash Flow The Company has recorded significant cash generation across its distribution and generation operations, though the cash flow may vary according to tariff adjustments in relation to cost variations. On December 31, 2012, the Companys cash and cash equivalents totaled R$377.6 million, versus the R$772.5 million recorded on December 31, 2011. This reduction is explained by the variation in the cash from financing activities. The table below shows certain components of the Companys cash flows on December 31, 2012 and 2011: On December 31, 2012 Cash at the beginning of the period (1) Net cash from operations (2) Financing activities (3) Investing activities (4) Cash at the end of the period (1+2+3+4) Cash variation (2+3+4) 772.5 457.0 83.3 (935.3) 377.6 (394.9 ) 2011 514.1 472.0 986.7 (1,200.3) 772.5 258.4 2012/20 11 50.3% -3.2% -91.6% -22.1% -51.5%

Cash Flows from Operations Cash from operating activities decreased by 3.2%, from R$472.0 million in the fiscal year ended December 31, 2011 to R$457.0 million in the fiscal year ended December 31, 2012, primarily due to the reduction in net income. Cash Flows from Investments

63

Cash flow used in investments fell by 22.1%, from R$1,200.3 million in the fiscal year ended December 31, 2011 to R$935.3 million in the fiscal year ended December 31, 2012. This result was impacted by the capital increase carried out by Renova Energia, which led to a dilution in the Companys interest.

Cash Flows used in Financing Activities

Cash flow used in financing activities decreased from R$986.7 million in the fiscal year ended December 31, 2011 to R$83.1 million in the fiscal year ended December 31, 2012, mainly due to the contracting of loans and financing in a significantly lower amount than in 2011.

ANALYSIS OF THE MAIN BALANCE SHEETS

Exerccios findos em 31 de dezem bro de % do ativo 2010 total 2011

% do ativo total

Variao 2011/2010

Ativo Circulante Caixa e equivalentes de caixa Ttulos e valores mobilirios Consumidores, concessionrias e permissionrias Tributos e contribuies Imposto de renda e contribuio social Estoques Rendas a receber sw ap Servios prestados a receber Despesas pagas antecipadamente Outros crditos Total do Circulante Ativo No Circulante Consumidores, concessionrias e permissionrias Tributos e contribuies Tributos diferidos Ativo financeiro de concesso Rendas a receber sw ap Depsitos vinculados a litgios Despesas pagas antecipadamente Outros crditos Investimentos Imobilizado Intangvel Total do no circulante

514.109 11.122 1.338.704 115.252 163.633 20.537 59.724 2.114 152.973 2.378.168 296.261 57.908 899.265 469.030 211 225.251 714 7.865 17.586 1.628.893 3.613.772 7.216.756

5,4% 0,1% 14,0% 1,2% 1,7% 0,2% 0,0% 0,6% 0,0% 1,6% 24,8% 3,1% 0,6% 9,4% 4,9% 0,0% 2,3% 0,0% 0,1% 0,2% 17,0% 37,7% 75,2%

772.548 8.171 1.383.620 158.962 111.649 27.430 3.801 84.964 2.180 173.550 2.726.875 298.538 95.622 811.464 656.473 754 268.505 263 7.979 54.086 1.985.833 4.075.268 8.254.785

7,0% 0,1% 12,6% 1,4% 1,0% 0,2% 0,0% 0,8% 0,0% 1,6% 24,8% 2,7% 0,9% 7,4% 6,0% 0,0% 2,4% 0,0% 0,1% 0,5% 18,1% 37,1% 75,2%

50,3% (26,5)% 3,4% 37,9% (31,8)% 33,6% 0,0% 42,3% 3,1% 13,5% 14,7% 0,8% 65,1% (9,8)% 40,0% 257,3% 19,2% (63,2)% 1,4% 207,6% 21,9% 12,8% 14,4%

Ativo Total

9.594.924

10.981.660

64

Exerccios findos em 31 de dezem bro de % do passivo 2010 total 2011

% do passivo total

Variao 2011/2010

Passivo Circulante Fornecedores Tributos e contribuies Imposto de renda e contribuio social Emprstimos, financiamentos e encargos financeiros Debntures e encargos financeiros Dividendos e JCP a Pagar Obrigaes estimadas Encargos regulatrios - Contribuies do Consumidor Benefcio ps-emprego Outros dbitos Total do Circulante Passivo No Circulante Emprstimos, financiamentos e encargos financeiros Debntures e encargos financeiros Tributos e contribuies Tributos diferidos Provises Benefcio ps-emprego Outros dbitos Total do no Circulante Patrim nio Lquido Capital Social Reservas de Lucro Proposta de Dividendos Adicionais Ajuste de avaliao patrimonial Total do Patrim nio Lquido Total do Passivo

658.421 119.238 230.931 165.878 381.332 136.598 45.264 117.218 95.555 236.318 2.186.753

6,9% 1,2% 2,4% 1,7% 4,0% 1,4% 0,5% 1,2% 1,0% 2,5% 22,8%

757.158 108.760 60.974 305.341 213.740 73.741 47.379 112.356 80.525 227.154 1.987.128

6,9% 1,0% 0,6% 2,8% 1,9% 0,7% 0,4% 1,0% 0,7% 2,1% 18,1%

15,0% (8,8)% (73,6)% 84,1% (43,9)% (46,0)% 4,7% (4,1)% (15,7)% (3,9)% (9,1)%

1.197.500 727.891 177.699 275.755 551.897 920.630 226.655 4.078.027

12,5% 7,6% 1,9% 2,9% 5,8% 9,6% 2,4% 42,5%

1.854.724 1.790.132 200.263 243.335 515.678 1.015.615 153.411 5.773.158

16,9% 16,3% 1,8% 2,2% 4,7% 9,2% 1,4% 52,6%

54,9% 145,9% 12,7% (11,8)% (6,6)% 10,3% (32,3)% 41,6%

2.225.822 395.839 214.381 494.102 3.330.144 9.594.924

23,2% 4,1% 2,2% 5,1% 34,7% 100,0%

2.225.822 341.695 181.501 472.356 3.221.374 10.981.660

20,3% 3,1% 1,7% 4,3% 29,3% 100,0%

0,0% (13,7)% (15,3)% (4,4)% (3,4)% 14,5%

Comparative Analysis of the Balance Sheets as of December 31, 2011 and 2010.
In the assets accounts, the main variations were: Cash and cash equivalents: On December 31, 2011, cash and cash equivalents amounted to R$772.5 million, representing an increase of 50.3% in relation to the R$514.1 million recorded on December 31, 2010. This growth was mainly a result of the inflow from the Companys operating activities totaling R$472.0 million, loans contracted in the amount of R$2,364.6 million, partially offset by the amortization of loans in the amount of R$908.6 million, payment of dividends totaling R$469.3 million, and investments in assets in the amount of R$1,200.3 million. Securities: On December 31, 2011, securities totaled R$8.1 million, a reduction of 26.5% in relation to the R$11.1 million recorded on December 31, 2010. These amounts refer basically to the funds received from the sales of assets, which were withheld and can only be invested in the electricity grid. In 2011, these restrictions were slightly inferior in relation to 2010.

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Consumers, concessionaires and permissionaires (current and noncurrent): On December 31, 2011, consumers, concessionaires and permissionaires totaled R$1,682.2 million, up 2.9%, from the R$1,635.0 million recorded on December 31, 2010. This variation can be explained by the increase in the volume billed in relation to the previous year and the fact that a major client had two bills overdue at the end of 2011. Taxes and contributions (current and noncurrent): On December 31, 2011, taxes and contributions amounted to R$254.6 million, an increase of 47.1% in relation to the R$173.1 million recorded on December 31, 2010. This increase was mainly a result of the upturn in ICMS credits, chiefly due to the increase in ICMS credits resulting from higher investment in electricity grid assets, which will be offset in up to four years. Income tax and social contribution (current and noncurrent): On December 31, 2011, income tax and social contribution amounted to R$111.6 million, down 31.8% when compared to the R$163.6 million recorded on December 31, 2010. This reduction was mainly a result of the lower anticipations of income tax and social contributions in 2011 over 2010, especially due to the writing off of defaulting clients in 2011, which made part of the sum previously established as temporary differences deductible, and due to the resolution of payment of interest on equity in 2011. Deferred taxes: On December 31, 2011, deferred assets amounted to R$811.5 million, a reduction of 9.8% in relation to the R$899.3 million recorded on December 31, 2010. This reduction was mainly due to the writing off of defaulting clients in 2011, as a result of bills overdue for a long time within the tax deductibility criteria. Financial assets from concessions: On December 31, 2011, financial assets from concessions totaled R$656.5 million, up 40.0% from the R$469.0 million recorded on December 31, 2010. This increase resulted from the residual amount of the fixed assets acquired in 2011, in line with the large investment made in the Companys electricity grid assets. In accordance with ICPC 01, the fixed assets of electricity distribution companies must be divided into financial assets, whose amount corresponds to the indemnification (accounting residual amount of electricity assets) to be received at the end of the concession, and intangible assets, which reflect the right to explore the infrastructure (estimated depreciation of electricity assets until the end of the concession term) and are received through tariffs over the course of the concession term. Other receivables (current and noncurrent): On December 31, 2011, other receivables totaled R$181.5 million, an increase of 11.7% in relation to the R$160.8 million recorded on December

66

31, 2010, mainly due to the increase in the expenditures to be reimbursed and public lighting contribution lines. Fixed assets: On December 31, 2011, fixed assets amounted to R$1,985.8 million, an increase of 21.9% over the R$1,628.9 million recorded on December 31, 2010, mainly due to the acquisition of shares of Renova Energia, which has large investments in fixed assets for generation of wind power, creating balancing effects via proportionate consolidation. Intangible assets: On December 31, 2011, intangible assets totaled R$4,075.3 million, an increase of 12.8% in relation to the R$3.613, million recorded on December 31, 2010, mainly due to the large investments made in 2011 in the Companys electricity grid. A portion of these investments is reflected in the financial asset of the concession (accounting residual value of the electricity assets), as described above, and a portion in the intangible assets line, related to the estimated depreciation of the electricity assets until the end of the concession term. In addition, with the acquisition of Renova Energia in 2011, the surplus value related to the right of use of the concession was recorded in the amount of R$196,712 million. In the liabilities account, the main variations were: Suppliers: On December 31, 2011, suppliers came to R$757.2 million, an increase of 15.0%, versus R$658.4 million on December 31, 2010, mainly due to purchased energy, the 6.9% increase in existing contracts in November 2011, as well as the upturn in the exchange rate, which affected the costs from energy purchased from Norte Fluminense and Itaipu. In addition, at the end of 2011, there was an increase in the purchase of materials and services for investment in the modernization of the grid. Loans, financing and debentures (current and noncurrent): On December 31, 2011, loans, financing and debentures (including financial charges) amounted to R$4,163.9 million, an increase of 68.4% versus the R$2,472.6 million recorded on December 31, 2010. This is increase resulted from new funding operations carried out in 2011 totaling R$2,364.6 million, combined with an increase in foreign exchange and monetary variations in the amount of R$366.1, partially offset by the amortization of the principal amount of the debt in the amount of R$908.6 million and payment of interests in the amount of R$341.1 million. Provisions: On December 31, 2011, provisions for contingencies totaled R$515.7 million, a reduction of 6.6% over the R$551.9 million recorded on December 31, 2010, chiefly due to the

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partial reversal of a lawsuit related to IPTU, in the amount of R$18.3 million, and payments for labor lawsuits in 2011. Post-employment benefits: On December 31, 2011, post-employment benefits amounted to R$1,096.1 million, up 7.8% from the R$1,016.2 million recorded on December 31, 2010, reflecting the substantial increase in the IPCA (Extended Consumer Price Index), according to which the Companys debt with Braslight is adjusted, in relation to the figure recorded in 2010, as well as the reduction in the actuarial discount rate from 6% to 5.8%, which serves as basis for the calculations of the actuarial liabilities. Other payables (current and noncurrent): On December 31, 2011, other payables amounted to R$380.6 million, a reduction of 18.9% from the R$463.0 million recorded on December 31, 2010. This reduction was primarily due to the recording, in 2011, of the fair value adjustment of the debt resulting from the onerous concession agreement in Itaocara Consortium, as per provisions of the Accounting Pronouncement CPC 12 Fair Value Adjustment.

Cash Flow The Company presents a substantial cash generation as a result of its operations in the distribution and generation segments, although cash flow can vary between periods in accordance with tariff adjustments vis--vis variations in costs. On December 31, 2011, the Companys cash and cash equivalents totaled R$772.5 million, versus R$514.1 million on December 31, 2010. This increase can be explained by the cash generated by operating and financing activities, surpassing the cash absorbed by the Companys investment activities. The table below shows the breakdown of our cash flows on December 31, 2011 and 2010:
Em 31 de dezembro de 2010 Caixa no Incio do Perodo (1) Caixa Gerado pelas Operaes (2) Atividade de Financiamento (3) Atividade de Investimento (4) Caixa no Final do Perodo (1+2+3+4) Variao no caixa 760,3 1.232,5 (787,0) (691,7) 514,1 (246,2) 2011 514,1 472,0 986,7 (1.200,3) 772,5 258,4 2011/2010 -32,4% -61,7% -225,4% 73,5% 50,3%

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Cash flows from operating activities Cash generated by operating activities decreased by 61.7%, from R$1,232.5 million in the fiscal year ended December 31, 2010 to R$472.0 million in the fiscal year ended December 31, 2011, mainly due to the reduction in income before taxes in 2011 compared to 2010, and the negative impact of taxes and deferred taxes in 2011 (a significant reduction in IRPJ and CSLL payable). Cash flows used in investment activities Cash absorbed by investment activities climbed by 73.5%, from R$691.7 million in the fiscal year ended December 31, 2010 to R$1,200.3 million in the fiscal year ended December 31, 2011, chiefly reflecting the increased acquisition of assets for investment in the distribution grid, higher investments in generation, and the acquisition of interests in Renova Energia and Norte Energia in 2011. Cash flows used in financing activities Cash flow used in financing activities moved up from R$787.0 million in the fiscal year ended December 31, 2010 to R$986.7 million raised in the fiscal year ended December 31, 2011, mainly due to the contracting of loans and financing in a higher amount than in 2010, in addition to the payment of dividends and lower amortization of loans and financing in 2011.

10.2. Executive Officers must comment on a) Results of the issuers operations, especially: i. any important components of revenue
The Companys revenues are generated mainly from the distribution of energy in its concession area. To a lesser degree, the Companys revenues are also generated from the generation, transmission, trading and services segments. We present below net revenue for the last 3 years:
Net Revenue (R$ million) Distribution and Transmission Generation Trading and Services 2012 6,991.6 440.2 291.3 2011 6,506.9 335.8 190.2 2010 6,097.1 319.9 185.4

ii.

Factors with material impact on the operating results

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Electric Power Supply

The table below shows the electric power supplied by the Company to each class of clients, i.e., residential, industrial, commercial and other clients, as well as their consumption and sales trends since 2010 and their share in total sales:

2010 (GWh)Consumption (GWh)Consumption % of Electric Power Supply

2011 (GWh)Consumption % of Electric Power Supply

2012 % of Electric Power Supply 40.6 7.6 34.2 17.6 100.0

R$ million

R$ million

Class of Client

Residential Industrial Commercial Other ICMS Unbilled Supply Total

8,243.0 1,717.3 6,156.7 3,342.3 19,459.3

2,746.0 335.3 1,866.8 775.8 2,194.0 -8.8 7,919.2

42.4 8.8 31.6 17.2 100.0

8,418 1,731 6,310 3,417 19,876

2,870.3 392.4 1,923.6 833.4 2,237.5 17.8 8,274.9

42.4 8.7 31.7 17.2 100.0

8,149 1,528 6,856 3,521 20,054

3,042.3 502.8 2,261.5 925.2 2,323.9 105.1 9,160.8

R$ million

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Migration of Free Consumers

The number of Potentially Free Consumers is relatively small. However, these consumers represent a relevant percentage of the Companys revenues and the amount of electric power supplied. In 2012, nearly 5.9% (1,192 GWh) of the electric power supplied by the Company to the Captive Market was allocated to Potentially Free Consumers. Even if consumers decide to migrate to the regulated tariff system in order to become Free Consumers, the Company will still be entitled to receive TUSD for the use of its distribution system (which does not materially affect the Companys profitability), and it can also return energy to Generators that sold the energy.

Delinquency
Historically, a significant percentage of the Companys energy distribution billing is not paid on their due date, which requires provisions for past due accounts (PCLD), observing the sectors regulatory accounting practices. In 2010 and 2011, PCLD accounted for 3.2% and 3.1%, respectively, of gross billed energy. In 2012, PCLD totaled R$282.6 million, accounting for 3.2% of gross billed energy, of which R$111.7 million refer to the extraordinary effect of the adjustment of the estimate for receiving old balances from large clients, in the amount of R$111.7 million. Excluding such effect, PCLD would be equivalent to 1.9% of gross billed energy, totaling R$170.8 million, R$80.5 million less than the provisioned amount in 2011, of R$251.3 million, or 3.0% of the billed energy for that year. This reduction reflects the change in the criterion for treating clients with long-term default as from March 2012, in addition to default-combating activities throughout 2012. Light SESAs delinquency, however, is still higher than 0.9% of gross revenues recognized in the reference company of Distributors in the 2nd cycle of Tariff Reviews. This level was adopted by Aneel through a method that grouped energy distribution companies from the entire country in clusters, which were defined according to a social complexity index developed by the regulatory agency.

Energy Losses
The Company is subject to two types of energy loss: technical and commercial losses. Technical losses occur in the normal course of electric power distribution, while commercial losses result from energy theft, in addition to fraud, incorrect measurement and errors when issuing bills. Energy losses mean that the Company will have to acquire more energy in order to meet its distribution needs, thereby increasing the cost of energy purchased for resale. The conclusion of Public Hearing 052/2007 on November 25, 2008, led Aneel to modify the methodology used to calculate regulatory energy loss rate, which is then passed through to

71

consumers. The new methodology adopted by Aneel considers the social complexity index, which enables the differentiation of social and economic aspects in the concession areas. Based on this new methodology, non-technical losses, which were previously calculated by wire charge, are now calculated on the low voltage market, considering a downward trend until the end of the tariff cycle. The starting point for non-technical losses now is 38.98% and for the ending point, 31.82% of the low voltage market. In the fiscal year ended December 31, 2012, non-technical losses, which amounted to 6,007 GWh and accounted for 16.5% of wire charge, totaled 45.4% of the low voltage market. In the fiscal year ended December 31, 2011, non-technical losses, which amounted to 5,256 GWh, totaled 40.5% of the low voltage market and in fiscal year ended December 31, 2010, non-technical losses accounted for 41.8% of the low voltage market.

b) variations in revenue attributed to changes in prices, foreign exchange rates, inflation, volume and launching of new products and services
The Companys operating revenue, excluding construction revenue in the amount of R$669.3 in fiscal year ended December 31, 2012 was R$6,943.8 million, up 12.9% from R$6,150.1 million on December 31, 2011, mainly due to increase in revenue in the energy distribution segment. The 2.0% upturn in the volume of energy sold to the concession area market was and the adjustment was the main factor in the variation of revenues. Another important factor that led to an increase in consolidated revenue was the 31.1% growth in revenue in the energy generation segment, which resulted from the higher price and volume of energy contracts negotiated on the free market.

c) impact from inflation, price variation of main inputs and products, exchange and interest rates on operating and financial results of the issuer
The main indexes used in the Companys business plan are the IGP-M (General Market Price Index), IPCA (Extended Consumer Price Index), CDI (Interbank Deposit Certificate) and exchange rate (U.S. dollar): IGP-M: part of Light Servios de Eletricidade S/As energy distribution IPCA: most of energy generation agreements of Light Energia S/A is CDI: all the Companys financial investments and approximately 66.8%

tariff is pegged to the IGP-M index. pegged to the IPCA index. of its total indebtedness are pegged to the CDI rate.

72

Foreign exchange rates: Approximately 13.0% of the Companys

indebtedness with third parties is indexed in foreign currency, 10.9% of which in U.S. dollars and 2.1% in Euros. However, the policy of use of foreign exchange derivative instruments approved by the Board of Directors determines the debt service protection (principal plus interest rates and commissions) denominated in foreign currency to mature within 24 months. Thus, excluding the value of exchange derivatives position contracted on December 31, 2011 (US$64.7 million and 34.9 million) from the percentage of foreign currency-denominated debt, the effective exchange rate exposure is 0.57%. In addition, the energy purchase tariff of Itaipu is also pegged to the U.S. dollar, but variations are transferred to the tariff through the CVA mechanism.

10.3. Executive officers shall comment on material effects caused or expected on the issuers financial statements and results from the events mentioned below: a) introduction or sale of an operating segment
Currently, we do not expect any introduction or future sale of an operating segment.

b) creation, acquisition or sale of equity interest or unusual operations

In accordance with item 9.1 of its Shareholders Agreement signed on March 23,

2006, Rio Minas Energia Participaes S.A. (RME) merged Lidil Comercial Ltda. (Lidil) on November 17, 2009, and on December 31, 2009 it was spun off into three parts, which were merged by Andrade Gutierrez Concesses S.A. (AGC), Companhia Energtica de Minas Gerais (Cemig), and Luce Empreendimentos e Participaes S.A. (LEPSA), a company created and controlled by Luce Brasil Fundo de Investimento em Participaes. Equatorial Energia S.A. (Equatorial) remained the single shareholder of RME. The corporate restructuring of RME by its shareholders streamlined its corporate structure by excluding the holding company RME, resulting in a direct interest of approximately 13.03% in the capital stock of the Company, or 26,576,149 common shares issued by the Company, for each of the four shareholders AGC, CEMIG, LEPSA and RME. RMEs shareholders agreement was replaced by a new agreement between the four shareholders of the Company, which included the same rights and obligations provided for in RMEs shareholders agreement. On December 30, 2009, CEMIG and AGC signed a Share Purchase Agreement (AGC Agreement) and on March 25, 2010, CEMIG paid for the acquisition of twenty-five million, four hundred, ninety-four thousand and five hundred (25,494,500) common shares issued by the Company and held by AGC, representing 12.50% of the Company's total and voting capital. In addition, on November 17, 2010, one million, eighty-one thousand, six hundred and forty-nine

73

(1,081,649) common shares issued by the Company, representing 0.53% of its total and voting capital, held by AGC, were paid in and transferred to CEMIG, which corresponds to the remaining share of the acquisition. On December 30, 2009, Fundo de Investimento em Participaes PCP (FIP PCP), an indirect controlling shareholder of Equatorial, and CEMIG signed a Share Purchase Agreement and Other Covenants (Equatorial Agreement), in which Equatorial was a consenting intervening party, aiming at selling the indirect interest of FIP PCP in the Company representing 55.41% of a total of twenty-six million, five hundred, seventy-six thousand, one hundred and forty-nine (26,576,149) common shares issued by the Company or a company in which CEMIG holds interest not less than twenty percent (20%). On April 29, 2010, Equatorials annual and special shareholders meetings approved its partial spin-off through the transfer of a portion of its shareholders' equity corresponding to its interest in the capital stock of RME to a new corporation named Redentor Energia S.A. (Redentor), which was created specifically for this purpose as of the partial spin-off. On March 24, 2010, CEMIG entered into a Quota Put Option Agreement and other Covenants (Option) with Enlighted Partners Venture Capital LLC (ENLIGHTED), a limited liability company from Delaware, United States of America. The purpose of this operation was to grant a put option of Luce Investment Fund quotas (LUCE Fund), headquartered in Newark, Delaware, United States of America, which holds seventy-five percent (75%) of the quotas of Luce Brasil Fundo De Investimento Em Participaes (FIP Luce), which in turn holds indirectly through LEPSA twenty-six million, five hundred, seventy-six thousand, one hundred and fortynine (26,576,149) common shares issued by the Company, representing approximately 13.03% of its total and voting capital. On October 6, 2010, ENLIGHTED exercised the put option of its quotas in LUCE Fund to Cemig or a third party appointed by Cemig, subject to compliance with certain requirements provided for in the agreement and approval of Aneel, the Brazilian Antitrust Authority (CADE), the Brazilian Development Bank (BNDES) and other financial agents and debenture holders of the Company and its subsidiaries, when necessary. On October 28, 2010, the Company received a letter from its shareholder BNDES Participaes S.A. BNDESPAR informing that it had sold 10,347,200 common shares issued by the Company on trading sessions at the BM&FBOVESPA between March 19, 2010 and October 27, 2010, thus, reducing its interest in the Companys capital stock by 5.07%. Now, BNDESPARs remaining interest is 39,429,583 common shares, or 19.33% of the Companys capital stock. On December 31, 2010, BNDESPAR held 30,631,782 common shares, representing 15.02% of the Companys capital stock. On May 12, 2011, Parati S.A. Participaes em Ativos de Energia Eltrica (Parati), a corporation owned by CEMIG and by Redentor Fundo de Investimento em Participaes (FIP Redentor), acquired from FIP PCP, 58,671,565 common shares,

74

representing 54.08% of the total capital stock of Redentor, the Companys indirect shareholder through its subsidiary RME - Rio Minas Energia Participaes S.A., which holds 13.03% of the Companys capital stock. As a result, Parati now holds an indirect interest of 7.05% in Lights voting capital, and FIP Redentor holds an indirect interest of 5.29%. On July 7, 2011, Parati acquired from ENLIGHTED PARTNERS VENTURE CAPITAL LLC (ENLIGHTED) 100% of the interest in Luce LLC (Luce), holder of 75% of FIP LUCE, which in turn is the indirect holder, through LEPSA, of twenty-six million, five hundred seventy-six thousand, one hundred forty-nine (26,576,149) common shares issued by the Company, representing approximately 13.03% of its total and voting capital. With this acquisition, Parati, which already held indirectly 7.05% of the Companys total and voting capital, became the indirect holder of 16.82% of the Companys total and voting capital. On July 29, 2011, Parati acquired from Braslight all of its remaining shares, Now Parati holds 100% of Fip Luce. With the acquisition, Parati, which indirectly representing a 25% stake in FIP Luce. held 16.82% of the Companys total and voting capital, now holds indirectly 20.08% of the Company total and voting capital. On October 3, 2011, Parati became the holder of 96.8% of the total capital stock of Redentor, which in turn holds indirectly, through RME, 26,576,150 common shares issued by the Company, representing approximately 13.03% of the capital. As a result, Parati, considering also its other indirect holdings, is now the indirect holders of a 25.64% stake in the Company. Up to date, no material effect on the Companys financial statements or results deriving from the operations mentioned above was observed.

c)

Unusual events or operations.

There were no unusual events or operations.

10.4. Executive officers shall comment a) Significant changes in accounting practices

The Company changed its accounting policy regarding the recording of actuarial gains or losses related to the defined benefit pension plans, which used to be immediately recognized in the years income and now are recognized immediately on the shareholders equity, under other comprehensive income, in compliance with CVM Rule 600/09. This accounting practice allows more relevant information and will be consistent in the coming years for the recording of actuarial gains or losses.

b) Significant effects from changes in the accounting practices

75

This change generated an increase in income for fiscal year 2011 by R$31,331 and a reduction in the same amount in other comprehensive income. There were no effects on shareholders equity on January 1, 2011 or on December 31, 2011.

c) Independent auditor's qualified opinion

2012: Qualified opinion: None Opinion:

We draw attention to Note 3 to the financial statements, which state that the individual financial statements have been prepared in accordance with accounting practices adopted in Brazil. In the case of the Company, these accounting practices differ from the IFRSs, applicable to separate financial statements, only with respect to the measurement of investments in subsidiaries, associates and joint ventures by the equity method of accounting, which, for purposes of IFRS would be measured at cost or fair value. Our opinion is not qualified regarding this matter.

2011: Qualified opinion: None Opinion:

As described in Note 4, the individual financial statements were prepared in accordance with the accounting practices adopted in Brazil. In the case of Light S.A., these practices differ from the IFRS, applicable to the separate financial statements, only regarding the valuation of investments in subsidiaries, associated companies and jointly-controlled companies through the equity method, while IFRS require the cost or fair value method. Our opinion is not qualified regarding this matter.

2010: 76

Qualified Opinion: None Opinion:

As mentioned in Note 2, the individual financial statements were prepared in accordance with accounting practices adopted in Brazil. In the case of Light S.A., these practices differ from the IFRS applicable to the separate financial statements, only with respect to the valuation of investments in subsidiaries, associated companies and joint ventures by the equity accounting method, while for IFRS purposes it would be valued at cost or fair value. Our opinion is not qualified regarding this matter.

10.5. Executive Officers must point out and comment on critical accounting policies adopted by the issuer, discussing in particular the Managements accounting estimates for issues that are uncertain and material to describe financial situation and results, and that require subjective or complex explanations, such as: provisions, contingencies, revenue recognition, tax credits, long-lived assets, useful life of non-current assets, pension plans, adjustments due to translation of figures into foreign currency, environmental recovery costs, criteria for impairment test and financial instruments
The preparation of the financial statements requires that the Management makes certain judgments, estimates and premises that affect the application of accounting policies and the reported amounts of assets, liabilities, revenues and expenses. Below is the description of the main accounting practices adopted by the Management of the Company, especially those related to estimates and judgments: a) Consumers, concessionaires and permissionaires (clients) Include electric power supplying, billed and unbilled, moratory charges, interest for arrears and electricity traded with other concessionaries for electricity supply, according to the amounts available in the Electric Energy Trade Chamber (CCEE). The allowance for doubtful accounts is recorded based on the Managements estimates in amount sufficient to cover any losses. Main criteria defined by the Company for consumers

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are: (i) for consumers with significant amounts, an analysis is conducted on the balance receivable taking into account the Companys recovery record, negotiations in progress and security interest; (ii) for other consumers, debts overdue by more than 90 days for residential consumers, another 180 days for commercial consumers or another 360 days for other consumers, 100% of balance is accrued. These credits do not differ from those defined by ANEEL. b) Investments The subsidiaries, joint ventures and affiliated companies financial information are recognized in the individual financial statements of the parent company through the equity method. In the consolidated financial statements, investments in affiliated companies are booked in accordance with the equity method. The Companys investments include the surplus value identified in the acquisition of interest, net of any accumulated losses due to impairment. c) Fixed assets Measured at acquisition, formation or construction cost, less accumulated

depreciation. Costs include expenses directly attributable to the acquisition of an asset. The costs of assets built by the Company itself include: The cost of materials and direct labor; Any other costs to put the asset in place and conditions necessary so that they are capable of operating as planned by the Management; Costs of loans over qualifying assets.

i. Depreciation
Items of fixed assets are depreciated by the straight-line method against the income statement based on each components estimated economic useful life. Assets

78

estimated economic useful life is in line with those set forth by Aneel. Lands are not depreciated. Items of fixed assets are depreciated as of the date they are installed and are available for use, or in case of assets internally built, the date when construction is complete and asset is available for use. d) Intangible assets i. Concession agreements and infrastructure assets linked to the concession The Company recognizes an intangible asset deriving from a concession agreement when it is entitled to charge for the use of concessions infrastructure or explore it. An intangible asset received as consideration for construction services provided in a concession agreement is measured at fair value upon initial recognition. Following initial recognition, the intangible asset is measured at cost, which includes capitalized loans, less accumulated amortization. The estimate of an intangible assets useful life in a concession agreement is the period counted when the Company is capable of charging consumers for the use of infrastructure until the end of concession period. ii. Amortization Amortization is recognized in the income statement based on the straight-line method in view of estimated useful lives of intangible assets, from the date when they are available for use or for generation of related economic benefits. Amortization methods, useful lives and residual values are reviewed at the end of each financial year and are adjusted whenever it is adequate as change of accounting estimates. e) Impairment i. Financial assets (including receivables)

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A financial asset not measured at fair value is evaluated at each reporting date to assess if there is objective evidence of loss in its recoverable value. An asset has loss in its recoverable value if an objective evidence indicates that a loss event occurred after the initial recognition of the asset, and that such loss event has a negative effect on future projected cash flows, which can be reasonably estimated. The objective evidence that the financial assets have lost value might include default or late payment by the debtor, restructuring the amount due to the Company under conditions the Company usually would not consider in other transactions, indications that the debtor or issuer will face bankruptcy, or the disappearance of an active market for a security. Additionally, for an equity instrument, a significant or long decrease in its fair value below its cost is an objective evidence of impairment.

Financial assets measured at amortized cost The Company considers evidences of impairment of assets measured at amortized cost either individually as collectively. All individually significant assets are assessed for impairment. All individually significant receivables identified as not suffering individual impairment are then collectively assessed regarding any other impairment not yet identified. Assets that are not individually important are collectively assessed for impairment, by jointly grouping securities with similar risk characteristics. When collectively assessing impairment, the Company uses historical trends of probability of default, recovery term and incurred loss amounts, adjusted to reflect the Managements judgment regarding premises, as current economic and credit conditions may be such that actual losses will be probably higher or lower than those suggested by historical trends. An impairment related to a financial asset measured at amortized cost is calculated as the difference between book value and present value of estimated future discounted cash flows at the original effective interest rate of the asset. Losses are recognized in the income statement and reflected in an account of allowance for receivables. Interest on impaired assets remains being recognized. When a subsequent event indicates reversion of the impairment, a decrease on impairment is reversed and recorded in the income statement.

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Management has not identified any evidence that justifies the need to reduce the financial assets to their recoverable value as of December 31, 2012 and 2011, except for the allowance for doubtful accounts and adjustment to the present value of receivables. ii. Non-financial assets The book values of the Companys non-financial assets, rather than inventories and deferred income tax and social contribution are reviewed every reporting date to check for impairment. If impairment occurs, then the assets recoverable value is estimated. In case of intangible assets with indefinite useful life, the recoverable value is estimated every year. The impairment is recognized if the book value of an asset or cash generating unit (CGU) exceeds its recoverable value. The recoverable value of an asset or CGU is the highest amount between the value in use and fair value less selling expenses. When evaluating the value in use, estimated future cash flows are discounted at their present values through discount rate before taxes to reflect markets current conditions as to recovery period of capital and specific risks of asset or CGU. In order to test for impairment, assets that cannot be individually tested are grouped to the smallest group of assets that generate continued use cash inflow which are mostly independent from cash flows of other assets or groups of assets (CGU). Impairment losses are recognized in the income statement. Impairment losses are only reversed when the assets book value does not exceed the book value calculated, net of depreciation or amortization, in case loss of value has not been recognized. f) Benefits to employees i. Defined contribution plans A defined contribution plan is a post-retirement benefit plan under which an entity pays fixed contributions to a separate entity (Pension Fund) and shall not have any legal or constructive obligation to pay for additional amounts. Liabilities for contributions to defined contribution pension plans are recorded as expenses with benefits to

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employees in the income statement in the periods during which services are rendered by employees. Contributions previously paid are recognized as assets under the condition that there is a cash reimbursement or a reduction in future payments is available. ii. Defined benefit plans The net liability of the Company regarding defined benefit pension plans is individually calculated for each plan, by estimating the value of the future benefit earned by the employees in return of services rendered in current and previous periods; the benefit is discounted to its present value. Any unrecognized past service costs and the fair values of any plan assets are deduced. The discount rate is the gains presented in the reporting date of the financial statements for first line securities which due dates are close to the conditions of the liabilities of the Company and that are denominated in the same currency in which the benefits are expected to be paid. The calculation is made annually by a qualified actuary using the projected unit credit method. When the calculation results in a benefit for the Company, the asset to be recognized is limited to the total of any unrecognized past service costs and the present value of economic benefits available as future reimbursements of the plan or reduction in future contributions to the plan. To calculate the present value of the economic benefits, any minimum cost demands applicable to any plan in the Company are considered. An economic benefit is available to the Company if it is realizable throughout the life of the plan, or in the settlement of the liabilities of the plan. Sponsor costs of the pension plan and occasional plan deficits are immediately recognized in shareholders equity, under other comprehensive income, in compliance with CVM Resolution no. 600/09. Actuarial gains and losses arising from adjustments and changes in actuarial premises of pension and retirement benefit plans are immediately recognized in shareholders equity, under other comprehensive income, and immediately transferred to retained profits or accumulated losses. iii. Share-based payment transactions

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The share-based compensation plan for employees and service providers is measured by the fair value of equity instruments on the grant date. The fair value of the options granted, established on the grant date, is recorded by the straight-line method as expenses in the income for the year, or capitalized during the construction of wind farms of the jointly-owned company Renova within the term in which the right is acquired, based on the Managements estimates on which options granted will be acquired, with the corresponding increase in shareholders equity. At the end of each reporting period, the Management revises its estimates on the number of equity instruments that will be acquired. The transactions resulting in share-based payments, whose liquidation is carried out, through equity instruments, with third parties, except employees and executives, are measured by fair value of products or services received. When the fair value cannot be estimated in a reliable manner, the transactions are measured by the fair value of the equity instruments granted on the date when the products and services are received. g) Provisions A provision is recognized when the Company has a legal or construed liability that can be reliably estimated as the result of a past event, and it is probable that an economic resource is required to settle the liability. Provisions are recorded based on the best estimates of risk involved and expected future cash flows. A provision for contingencies is recorded by evaluating and quantifying lawsuits, whose probability of loss is deemed as probable, in the opinion of the Management and its legal counsels. h) Revenue recognition Revenues are measured at fair value of the receivable or received counterpart, less taxes and discounts inherent to revenues. i. Electricity sales revenues These are recognized when there is conclusive evidence that most significant risks and benefits inherent to the assets ownership were transferred to the buyer, is probable that the economic benefit associated with transactions will flow to the Company and the amount of revenues can be reasonably measured. Traded

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electricity is monthly invoiced based on the electricity supply, according to amounts disclosed by the Electric Energy Trade Chamber (CCEE). ii. Service Revenues Revenues from services rendered are recognized in the income statement based on the stage of completion of services on the reporting date of the financial statements. The stage of completion is evaluated by referencing research of works performed. i) Income tax and social contribution Current and deferred income tax and social contribution of the year are calculated based on 15% rates, plus 10% surcharge over the taxable income exceeding R$240 for income tax and 9% over the taxable income for social contribution on net income and consider social contribution tax loss carryforwards, restricted to 30% of taxable income. Deferred tax is recognized regarding temporary differences between book value of assets and liabilities for accounting purposes and the corresponding values for taxation purposes. When calculating current and deferred income tax, the Company takes into account the impact of uncertainties related to tax positions assumed and if additional payment of income tax and interests has been made. The Company believes that the provision for income tax under liabilities is appropriate in relation to all outstanding tax periods based on its assessment of several factors, including tax laws interpretations and past experience. This evaluation is based on estimates and assumptions that may involve a series of judgments on future events. New information may be available, which would lead the Company to change its judgment as to the adequacy of current provision; these changes will impact income tax expense in the year they occur. A deferred income tax and social contribution asset is recognized by tax losses, tax credits and deductible temporary differences, not used when it is probable that future profits subject to taxation will be available and against which they shall be used. As provided for by Law No. 11,941/09, the Company uses the Transition Tax Regime (RTT) to calculate taxable income, so that the changes in the criteria of recognition of revenues, costs and expenses comprised in the calculation of the net income for the year do not have material effects on the calculation of the taxable income of the entity subject to RTT, and for

84

taxation purposes, the accounting methods and criteria in force on December 31st, 2007 shall be considered. j) Present value adjustment The items subject to discount at present value are: i. Consumer, concessionaires, permissionaires and clients

The Company calculated the present value for balances with payment terms over 180 days. The discount rate used by Management for the discount at present value for these items is 12.0% and is based on a risk-free rate of 5.8% plus a credit risk of 5.9%. Interest rates accumulated in a sales transaction are determined upon initial recording of transaction and are not subsequently adjusted. ii. Onerous granting of concessions

The Company calculated the present value for balances with onerous grants of concessions payable to the granting authority. The discount rate used by Management for discount at present value for these items is 13.1% and is based on a risk-free rate of 5.8% plus a credit risk of 6.9%. Interest rates accumulated in a sales transaction are determined upon initial recording of transaction and are not subsequently adjusted.

10.6. Executive officers shall comment on internal controls adopted to ensure the preparation of reliable financial statements: a) Efficiency level of these controls, indicating eventual inadequacies and measures adopted to correct them
The Company complies with the Novo Mercado" (New Market) corporate governance standards and considers its internal controls to be sufficient, given its type of activity and the volume of transactions. Moreover, given the complexity of activities and technological innovations, the Management endeavors its efforts to probe, review and continuously improve its processes and to implement new review and internal controls tools.

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b) deficiencies and recommendations about internal controls included in the independent auditors report
The independent auditors report on accounting procedures and internal controls did not record any deficiencies or recommendations that could significantly affect the Companys Financial Statements.

10.7. If the issuer has conducted a public tender offer, the executive officers shall comment on: a) how the proceed from the offering were allocated
Below is how the proceeds for the last offerings were allocated: 6th debenture issue of Light SESA totaling R$300.0 million: the proceeds derived

from this operation were used to (i) pay for the mandatory early redemption of Promissory Notes of the 1st Issue, amounting to R$100 million; and (ii) to increase the Companys working capital. 1st promissory note issue: R$100.0 million. The proceeds from this operation were Secondary Tender Offer: R$772.1 million. The proceeds were raised by the 7th debenture issue of Light SESA totaling R$650 million: the proceeds derived used to increase the Companys working capital. shareholders who carried out the offering, and therefore the Company is not entitled thereto. from this operation were used to (i) pay off the debt resulting from the sixth debenture issue of the Company in June 2011; and (ii) to fund its investment program. 8th debenture issue of Light SESA totaling R$470 million: the proceeds derived 1st debenture issue of Light Energia totaling R$170 million: the proceeds derived from this operation are being used to (i) fund the investment program of Light SESA. from this operation were used to (i) fund the investment program of Light Energia; and (ii) to increase its working capital. S.A. 2nd debenture issue of Light Energia totaling R$425 million: the proceeds derived from this operation were used (i) for the early redemption of the promissory notes, including charges, issued on August 19, 2011, part of the single series of the first issue of Light Energia; and (ii) to strengthen the working capital of Light Energia. 1st promissory note issue of Light Energia totaling R$400 million: the proceeds derived from this operation were used to pay for the acquisition of interest in Renova Energia

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3rd debenture issue of Light Energia totaling R$30 million: the proceeds derived

from this operation were used to (i) fund the investment program of Light Energia.

b) if any relevant bias occurred between the effective use of funds and the proposals disclosed in the respective offering
There was no relevant bias of these purposes.

c) in the event of bias, justify its reasons

There was no relevant bias of these purposes.

10.8. Executive officers shall describe relevant items which not covered by the issuer's financial statements, indicating: a) assets and liabilities directly or indirectly held by the issuer, off-balance sheet items, such as: i. ii. iii. iv. v. operating lease, assets and liabilities portfolios of receivables written off to which the entity maintains risks and responsibilities, indicating their respective liabilities forward contracts of products or services construction agreements not concluded agreements on financing receivables

The Company does not have any assets or liabilities that are not reflected in this Reference Form or in its financial statements and notes.

b) other items not covered by the financial statements

There are no other items not covered by the financial statements

10.9. In relation to each one of the items not included in the financial statements and indicated in item 10.8, the executive officers shall comment on: i. how these items change or may in the future change revenues, expenses, operating income, financial expenses or other items of the issuers financial statements

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As mentioned in item 10.8 above, there are no items not covered by the financial statements.

ii.

nature and purpose of the operation

As mentioned in item 10.8 above, there are no items not covered by the financial

statements.

iii.

nature and amount of the obligations assumed and the ensuing issuers rights from the transaction

As mentioned in item 10.8 above, there are no items not covered by the financial statements.

10.10. Executive officers shall indicate and comment on the main elements of the issuers business plan, specifically the following topics: a) investments, including: i. quantitative and qualitative description of investments in progress and estimated investments
The main investments in previous years have been allocated to the maintenance and improvement of the Companys distribution network and its generation projects. The table below shows the Companys investments in the fiscal years ended December 31, 2010, 2011 and 2012:

Period Investment (R$ million)

Fiscal year ended December 2010 700.6

Fiscal year ended Fiscal year ended December 2011 December 2012 928.6 796.8

In 2012, R$796.8 million were allocated to Capex projects, of which we highlight R$338.4 million in networks and quality improvement; and R$199.8 million in network shielding, electronic measurement system and fraud regularization. Investments in generation amounted to R$25.7 million, allocated mainly to the maintenance of the existing generating facilities.

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The Company plans to invest approximately R$772.9 million in 2013. Of the total investments budgeted for this period, R$544.8 million will be allocated to the distribution segment, R$36.4 million to the maintenance of the generation segment and R$90.9 million as contribution to equity interest. ii. Sources of financing for investments

The Company finances its investment projects partially through its own cash generation and partly through BNDES lines of credit (when eligible) and/or other funding instruments, i.e., on the capital markets or banks.

iii.

Material divestments in progress and estimated divestments

From 2010 to 2012, the Company made several divestments, of which the most relevant were: (i) sale of a property located in Bonsucesso for R$0.7 million, of the buildings and sites located in Triagem for R$12 million and in Ilha do Governador for R$3.5 million in 2010; (ii) sale of property at Estrada dos Bandeirantes, lote 4, in the amount of R$0.9 million, in March 2012. All these assets are not operational.

b) Previously announced acquisitions of plants, equipment, patents or other assets that may materially affect the issuer's production capacity
In 2012, the Companys Board of Directors approved the acquisition by Light Energia of 26,520,000 common shares of Guanhes Energia S.A. (Guanhes Energia), equivalent to 51% of its capital stock. Guanhes Energia is a special-purpose entity authorized for a 30-year period, possible to be extended, to generate hydraulic electric energy under an independent production system, by using four hydraulic potentials located at Guanhes and Corrente Grande rivers (Rio Doce Basin), in the cities of Guanhes, Virginpolis and Dores de Guanhes, in the state of Minas Gerais. The Small Hydroelectric Plants (SHPs) Dores de Guanhes, Fortuna II, Jacar and Senhora do Porto, together, have installed capacity of 44 MW and 25.03 average MW of assured energy. The first PCH shall start its commercial operations in October 2013 and the last one shall start in February 2014. The estimated investment in the construction of the SHPs totals R$269.2 million in current currency, R$118.0 million of which corresponding to capital contribution from shareholders equity of Guanhes Energia, while Light Energia invested R$60.2 million.

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c) New products and services, including: i. Description of research in progress already announced
Our Research & Development program (R&D) is prepared in accordance with Law 9,991 of July 24, 2000, which establishes that public utility distribution concessionaires must invest 0.2% of their net operating revenue in R&D projects, with Aneel Resolution 271 of July 19, 2000 and with the guide approved by Aneel Resolution 504, of August 14, 2012.

ii.

total amounts invested by the issuer on researches for the development of new products and services
In 2012, a total of R$22.7 million were invested in research projects to develop new products or services, R$20.6 million of which were invested by LIGHT SESA and R$2.1 million by LIGHT ENERGIA.

iii.

projects under development that have already been announced

Giving continuity to the research projects and in compliance with the same guidelines applied to these projects, two (2) new projects were developed in 2012 at LIGHT SESA, while forty-six (46) R&D projects were carried in 2012. LIGHT SESAs main projects, products and services under industrial development phase include (a) self-protected transformer, (b) detection system for cables in energy transmission lines, (c) special adapter for cutting supply of low voltage clients, (d) provisional repair for fluid oil cable class 145kV, and (e) straight-wire fiberglass poles.

iv.

total amounts invested by the issuer in the development of new products

and services
The 2012 ongoing projects accounted for approximately R$2.2 million of total investments, spent on projects in the first unit of the series or pioneering lot phases.

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10.11 Comment on other factors that materially influenced the operating performance and neither identified nor commented in others items of this section.
All the relevant information referring to this topic was disclosed in the items above.

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IV Election of members of the Board of Directors and Fiscal Council

12.6. In relation to each manager and members of the issuers Fiscal Council, indicate the following in a table: a. name b. c. d. e. f. g. h. i. j.
a. name

age profession individual taxpayers ID (CPF) or passport number position date of election date of investiture term of office other positions or offices held in the issuer if elected by controlling shareholder or not
b. age c. profession d. CPF number passport e. position f. date of the Annual Shareholde rs Meeting g. date of investiture h. term of office i. other positions held in the Company j. appointe d by controlli ng sharehol der

Members of the Fiscal Council: or of

Francisco Luiz Moreira Penna Aristteles Luiz Menezes Vasconcellos Drummond Eduardo Grande Bittencourt Rogrio Fernando Lot Aliomar Silva Lima Ronald Gasto Andrade Reis Francisco Vicente Santana Silva Telles Ari Barcelos da Silva

64

Business administrator

092.294.00610

Sitting member

04/26/2013

04/26/2013

1 year

Not applicable

Yes

69

Journalist

026.939.25720

Sitting member

04/26/2013

04/26/2013

1 year

Not applicable

Yes

75

Accountant Business administrator Economist

003.702.40006 344.161.10120 131.654.45672 007.237.03604

Sitting member Sitting member Alternate member Alternate member

04/26/2013

04/26/2013

1 year

Not applicable

Yes

48

04/26/2013

04/26/2013

1 year

Not applicable

Yes

59

04/26/2013

04/26/2013

1 year

Not applicable

Yes

69

Business administrator

04/26/2013

04/26/2013

1 year

Not applicable

Yes

43

Accountant

000.461.52717 006.124.13772

Alternate member Alternate member

04/26/2013

04/26/2013

1 year

Not applicable

Yes

70

Engineer

04/26/2013

04/26/2013

1 year

Not applicable

Yes

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12.7. Provide information mentioned in 12.6 for members of statutory committees, as well as audit, risk, finance and compensation committees, even if said committees or structures are not statutory 9: Not Applicable. 12.8. For each manager and fiscal council member, please provide: a. resume including the following information: i. main professional experiences in the last five years, including: name of the company position and job duties main activity in the company in which the experience took place,

indicating the associations or organizations that comprise (i) the issuers economic group, or (ii) shareholders who hold direct or indirect interest greater than 5% of a same class or type of the issuers securities ii. a list of all of the managerial positions held in publicly held companies

a. Resumes

Fiscal Council Sitting Members Aristteles Luiz Menezes Vasconcellos Drummond Born on November 22, 1944, Mr. Drummond completed high school and has professional experience in the areas of journalism, public relations and business management. He is certified to act as a member of fiscal councils and boards of directors by the Brazilian Corporate Governance Institute (IBGC). He worked in the private sector as an advisor to the board of executive officers of Banco Nacional (1963-1970) and in 1973 he became managing officer of Irad Assessoria e Consultoria Ltda. In the Guanabara state government (during the Negro de Lima administration) he held the positions of president and officer of Companhia de Habitao Popular do Estado da Guanabara (COHAB-GB), was an advisor to the Guanabara State
9

Information included in this item shall cover audit, risk, finance and compensation committees, as well as similar organizational structures, even if these committees or structures are not statutory, provided that these committees or structures participate in the decision-making process of the Managements bodies or in the issuers management as consultants or controllers.

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Secretary of the Government and division head in the Guanabara State Department of Public Works. At the federal government level, Mr. Drummond served as an advisor to the state Mining and Energy Ministry office chief (1980-1984). He was administrative officer at Light S.A. in 1985 and from November 1987 to June 1996. He served on the boards of directors of the Rio de Janeiro Subway System (1985), Centrais Eltricas do Norte S.A. (1996-2002) and Manaus Energia S.A. and Boa Vista Energia S.A. (1997-2002). He was a member and chairman of the Vale fiscal council from 1986 to 1989 and a member of the Petrofertil S.A. fiscal council. He also served as employer advocate at the Regional Labor Court of Rio de Janeiro (TRT-RJ) from 1994 to 1997. He has been the chairman of Companhia Energtica de Minas Gerais (Cemig)s fiscal council since 1999 and is currently a member of Cemats board of directors. Eduardo Grande Bittencourt Born on March 3, 1938, Mr. Bittencourt was the managing partner of Handel, Bittencourt & Cia. Auditores Independentes, founded in 1979, where he was active through December 2008. He was chief financial officer of Adubos Pampa S.A. and an auditor with Treuhand Auditores Associados Ltda. (currently, KPMG PEAT MARWICK), from 1972 to 1974. He also served as a member of the boards of directors of C.P. Eletrnica S.A. and TRAFO Equipamentos Eltricos S.A. (WEG Group). He has served as litigation expert (company dissolutions, asset appraisal, restatement of debts, liquidation of the award and other), and worked in the areas of economic-financial analysis, auditing and the technical advisory services of private organizations. Mr. Bittencourt is currently a member of the fiscal councils of Light S.A., Bematech S.A., Santos Brasil S.A, Santos Brasil Participaes S.A. and WEG S.A. He holds a bachelors degree in accounting from the Federal University of Rio Grande do Suls School of Economics and specialization course in business administration from the same university. Francisco Luiz Moreira Penna Born on September 8, 1948, Mr. Francisco Penna holds a bachelors degree in Business Administration from the Faculty of Management Studies at UNA. He began his professional career at Lider Engenharia Ltda., working in civil construction. He was a Board Member at Prodabel for three (3) years. He worked as the Secretary of State for Public Works and as the Administration and Finance Officer from May 1986 to March 1987. He was a Board Member at GASMIG Companhia de Gs de Minas Gerais, later serving as the Finance and Market Relations Officer at CEMIG Companhia Energtica de Minas Gerais from November 1991 to January 1999. He went on to work as a Development Analyst at the Development Bank of Minas Gerais (BDMG), from February 1999 to March 2004, and he offered services to the State and City Governments from July 1995 to January 1999. He has been a member of the fiscal council of CEMIG Telecom Cemig Telecomunicaes S.A. since July 2010, a member of

94

the fiscal council of Redentor Energia S.A. since September 2011 and a member of the fiscal council of GASMIG Companhia de Gs de Minas Gerais since April 2011. Rogrio Fernando Lot Born on January 3, 1965, Mr. Lot has a bachelors degree in Business Administration with general formation for Senior Executives from UFRJ/UNIBB (MBA). He has worked for Banco do Brasil since December 1983, holding several management positions. Since February 2012, he has been the head of the Private Bank Unit, being a member of the Board of Executive Officers of Banco do Brasil and responsible for the Private Bank businesses. Previously, he served as: General Manager of the Banco do Brasil branch in Miami FL, USA (2009 to 2012), Chief Representative of Banco do Brasil in Washington DC, USA (2007 to 2009), Acting Director and Executive Manager of Banco do Brasils Foreign Trade Office in Braslia (member of the Board of Executive Officers of Banco do Brasil) (2004 to 2007). In 2006, Mr. Lot served as member of the Board of Directors of TEKA Tecelagem Kuenrich, in the city of Blumenau (state of Santa Catarina), as representative of PREVI, Banco do Brasil Employee Pension Fund.

Alternate members Ari Barcelos da Silva Born on March 3, 1942, Mr. Silva is external auditor at Arthur Andersen & Co., internal auditor at Empreendimentos e Estudos Econmicos S.A., general accountant at Companhia Guanabara de Crdito, Financiamento e Investimento, assistant to the chief financial officer at Companhia Hidro Eltrica do So Francisco (Chesf), president of the Fundao Eletrobrs de Seguridade Social (Eletros), head of accounting department at ELETROBRS, Tax Officer at the Fundao de Seguridade Social (Geasp), chief financial officer at Centrais Eltricas do Maranho S.A. (Cemar) and head auditor and head of CEO office at Eletrobrs Termonuclear (Eletronuclear). Officer of Investimentos Canadenses em Energia Ltda. (Incae) and Companhia Canadense de Investimentos em Energia (Coince) (Brascan Group). Mr. Silva has served on the fiscal and decision-making councils of the following companies: Centrais Eltricas S.A. (Eletrosul), Chesf, Companhia Auxiliar de Empresas Eltricas Brasileiras (Caeeb), Furnas, Cemar and Fundao Eletrobrs de Seguridade Social. He holds bachelors degree in business administration (CRA/RJ No. 2027107-7) and in accounting (CRC/RJ No. 11627-6). Currently, he serves as board member of Light S.A. and Companhia Energtica de Minas Gerais (Cemig). Ronald Gasto Andrade Reis

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Born on November 17, 1943, Mr. Reis holds a bachelors degree in business administration from the Pontifical Catholic University of Minas Gerais (PUC-Minas), with specialization course in economic-financial planning in Toronto, Canada. He started his career at Companhia Energtica de Minas Gerais (Cemig) in 1967, where he served as superintendent of Programming and Financial Control until November 1997. He was in charge of structuring the financial management of the Electric System National Operator (ONS), where he served as manager until 2002. Currently, he is consultant for ONS in the Project Management and Finance areas. He is a member of the fiscal councils of Cemig Telecomunicaes S.A. and Transmissora Aliana de Energia Eltrica S.A. He was a member of the fiscal councils of Cemig, Cemig Gerao e Transmisso S.A. and of Cemig Distribuio S.A.

Aliomar Silva Lima Born on November 7, 1953, Mr. Lima is currently a professor of Finance for graduate and postgraduate courses at Pontifical Catholic University of Minas Gerais (PUC-MG); a partner at ASL Servios Financeiros S/C Ltda.; and alternate member at the Fiscal Councils of Redentor Energia S.A., Companhia Energtica de Minas Gerais Cemig , Cemig Distribuio S.A. and Cemig Gerao e Transmisso S.A. and Companhia de Gs de Minas Gerais-Gasmig; and sitting member at the Fiscal Councils of Cemig Telecomunicaes S.A. CemigTelecom. Francisco Vicente Santana Silva Telles Born on May 10, 1969, Mr. Telles has a bachelors degree in Accounting Sciences from UFRJ, and two MBAs, one in Environmental Management (UFRJ) and another in Finance (IBMEC). Currently, he serves as Controller of Tevisa e Linhares Gerao (since 2007). Previous positions: CFO of Edemoglobo (2006-2007), Controller of Lafarge Cimentos Mau (2002-2006), Superintendent of New Businesses, CFO and Controller of AES Corporation (1999 to 2002), Assistant Controller of El Camino Resourses LTDA (1998 to 1999), Senior Auditor of Deloitte Touch Tohmatsu (1991-1995).

b.

description of any of the following events that have occurred in the past five

years: i. any criminal conviction

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ii. iii.

any conviction in a CVM administrative procedure and the penalties imposed any final and unappealable conviction, in judicial or administrative level,

which has either suspended or prohibited the practice of any professional or commercial activity

Members of the Fiscal Council All those nominated in item 12.6 above, have stated, individually and for all legal purposes, that in the past five (5) years they were not subject to any criminal conviction, to any CVM administrative conviction or penalties, or to any final and unappealable convictions, in the judicial or administrative level, which has either suspended or prohibited them the practice of any professional or commercial activity.

12.9. Inform the existence of marital or stable relationship, or kinship up to second degree between: a. issuers management
None.

b.

(i) issuers Management and (ii) members of the management of direct or

indirect subsidiaries of the issuer

None.

c.

(i) management of the issuer or its direct or indirect subsidiaries, and (ii)

issuers direct or indirect controlling shareholders

None.

d.

(i) issuers management and (ii) management of issuers direct and

indirect parent companies

None.

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12.10. To inform about the hierarchical structures, services rendered or control relationship, over the last 3 fiscal years, between issuers managers and: a. company directly or indirectly controlled by the issuer
Mr. Aliomar Silva Lima was a member of the Fiscal Council of Light S.A. from 2010 to 2011. Mr. Eduardo Grande Bittencourt and Mr. Aristteles Menezes Vasconcellos Drummond served as sitting members of the Fiscal Council of Light S.A. in the last three fiscal years. Mr. Rogrio Fernando Lot served as sitting member of the Fiscal Council of Light in 2012. Messrs. Francisco Luiz Moreira Penna, Ronald Gasto Andrade Reis, Francisco Vicente Santana Silva Telles and Ari Barcelos served as alternate members of the Fiscal Council in 2012

b.

the issuer's direct or indirect controlling shareholder

Mr. Aristteles Luiz Menezes Vasconcellos Drummond is a member of the Fiscal Council

of Companhia Energtica de Minas Gerais (Cemig), a direct controlling shareholder of the Company. Mr. Ronald Gasto Andrade Reis is a member of the Fiscal Council of Companhia Energtica de Minas Gerais (Cemig), a direct controlling shareholder of the Company. Mr. Francisco Luiz Moreira Penna is a member of the Fiscal Council of Redentor Energia S.A., an indirect controlling shareholder of the Company. Mr. Aliomar Silva Lima is an alternate member of the Fiscal Councils of Redentor Energia, S.A., Energtica de Minas Gerais - Cemig, Cemig Distribuio S.A., Cemig Gerao e Transmisso S.A. and Companhia de Gs de Minas Gerais Gasmig, and sitting member of the Fiscal Council of Cemig Telecomunicaes S.A. - CemigTelecom.

c.

if relevant, the issuers supplier, client, debtor or creditor, its subsidiary or

parent company, of any of these persons

None.

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