Financial Statements 2009

7/30/2019 Financial Statements 2009

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FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)

STANDARDIZED FINANCIAL STATEMENTS (DFP)

COMMERCIAL, INDUSTRY AND OTHER TYPES OF COMPANIES

December 31, 2009 Brazilian Corporation Law

01987-9 LIGHT S.A. 03.378.521/0001-75

11.01 NOTES TO THE FINANCIAL STATEMENTS

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Net revenue

4,992

5,4325,387

2007 2008 2009

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Costs and expenses

4,183

4,549

4,195

2007 2008 2009


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%*

In 2009, EBITDA totaled R$1,188.0 million, falling 21.0% compared to 2008. Excluding

the non-recurring effects of R$107.5 million that impacted EBITDA in 2008, related to

the recognition of financial additions of previous years and R$133.8 million referring to

the reversal of Braslights provision, the decline in EBITDA was 5.9%, partially

explained by the reduction in the distribution companys EBITDA, as a result of the

November 2008 tariff adjustment process. The consolidated EBITDA margin was 21.9%.

The share of the distribution segment in the consolidated EBITDA was 82.0% in 2009.

The generation and trading segments were responsible for 16.3% and 1.7% of

consolidated EBITDA, respectively.

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80

100

120

140

160

180200

220

240

260

Light x Ibovespa x IEE8/10/06 = 100 until 12/30/09

127% Light

84% Ibovespa

104% IEE

R$/share8/10/06 11.45

12/30/09 25.98

2008IEE -12%IBOV -41%

LIGT3 -14%

2009IEE 59%IBOV 83%

LIGT3 34%

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01987-9 LIGHT S.A. 03.378.521/0001-75


34

CONSOLIDATED SOCIAL REPORT (unaudited)

1 - Basis

Net Revenue (NR)

Operating result (OR)

Gross payroll (GP)

2 - Internal social indicators Amount % of GP % over NR Amount % of GP % over NR

Food 16.762 8% 0% 16.822 7% 0%

Mandatory payroll charges 38.997 18% 1% 44.891 20% 1%Private pension plan 6.559 3% 0% 8.960 4% 0%

Health 8.535 4% 0% 10.728 5% 0%

Occupational health and safety 210 0% 0% 179 0% 0%

Education 909 0% 0% 1.144 0% 0%

Culture 0 0% 0% 0 0% 0%

Skills and professional development 5.117 2% 0% 2.953 1% 0%

Day care or day care allow ances 499 0% 0% 462 0% 0%

Prof it sharing 20.507 9% 0% 31.527 14% 1%

Other 3.813 2% 0% 3.042 1% 0%

Total - Internal social indicators 152.095 68% 3% 147.515 64% 3%

3 - Ext ernal s ocial indicat ors Am ount % o f OR % ove r NR Am ount % o f OR % ove r NR

Education 2.165 0% 0% 2.043 0% 0%

Culture 6.178 1% 0% 3.940 0% 0%

Health and sanitation 10.793 1% 0% 4.732 0% 0%

Sports 837 0% 0% 0 0% 0%

Food safety and fighting hunger 0 0% 0% 0 0% 0%

Other 25.502 3% 0% 11.666 1% 0%

Total contributions to society 45.474 6% 1% 22.382 2% 0%

Taxation (excluding payroll charges) 2.731.688 331% 50% 2.737.124 209% 51%Total - External social indicators 2.777.162 336% 51% 2.759.506 211% 51%

4 - Environmental indicators Amount % of OR % over NR Amount % of OR % over NR

Investments related to Company's production/operation 19.966 2% 0% 18.005 1% 0%

Investments in external programs/projects 0 0% 0% 0 0% 0%

Total environmental investments 19.966 2% 0% 18.005 1% 0%

Regarding the definition of annual goals to minimize residues, the

general consumption in the production/operation and to increase

the eff iciency in using natural resources, the Company:

5 - Work Force Indicators 2009 2008

Number of employees at the end of the year

Number of employees admitted over the year

Number of outsourced employees

Number of interns

Number of employees over age 45

Number of female employees

% of female executive officers and managers

Number of Af rican-Brazilians employees

% of African-Brazilian executive officers and managersNumber of disabled people or with special needs

6 - Relevant information re lated to corporate citizens hip

Largest compensation over smallest compensation ratio (w ithin the

Number of occupational accidents

Social and environmental projects undertaken by the Company w ere

determined by:

( ) executive

officers

( ) executive

officers and

managers

(x ) all

employees

( ) executive

officers

( ) executive

officers and

managers

( x) all

employees

Safety and hazard fr ee conditions standards at w ork are defined by:

( ) executive

officers and

managers

( ) all em plo yees ( x) all

employees +

Cipa

( ) executive

officers and

managers

( ) all em plo yees ( x) all

employees +

Cipa

Regarding union freedom, right to collective labor negotiations and

internal representation of employees, the Company:

( ) has no

involvement

( ) follows the

rules of the ILO

( x ) fosters and

follo ws the rules

of t he ILO

( ) will have no

involvement

( ) will follow the

rules of the ILO

( ) will foster and

follo w the rules

of t he ILO

Private pension plan includes:( ) executive

officers

( ) executive

officers and

( x ) all

employees

( ) executive

officers

( ) executive

officers and

( x ) all

employees

Profit sharing plan includes:

( ) executive

officers

( ) executive

officers and

managers

( x ) all

employees

( ) executive

officers

( ) executive

officers and

managers

( x ) all

employees

For suppliers selection, they should follow the same ethical, social

responsibility and environmental protection standards adopted by the

( ) this is not a

relevant

r

( ) they are

advised

( x ) they are

required

( ) this will no t

be relevant

r

( ) they are

advised

( x ) they are

required

Regarding employees participation in volunteering work, the Company:

( ) does not get

involved

( ) supports

initiatives

( x ) organizes

and provides

incentives

( ) will not get

involved

( ) will support

initiatives

( x) will organize

and provide

incentives

Number of consumers complaints and comments:in the Company

13.251

in Proc on 909 in courts

35.039

in the Company

Reduce 10%

in Procon

Reduce 10%

in courts

Reduce 15%

% of complaints and criticisms received or solved:in the Comapny

ND

in Procon

ND

in courts ND in the Com pany

100 %

in Procon

100 %

in co urts 100%

Total added value distribution (in R$ thousand):In 2009: In 2008:

Distribution of A dded Value (DAV):

7 - Other information

1.504

0

70 % gov ernment 5% emplo yees 10%

shareho lders 4 % third parties 11% retained

2010 Goals

ND

0

4.621.541

830

20,90%

1.381

2008 (thousand reais)

() does not have goals ( ) complies with 51to 75%

( ) complies with 0 to 50% ( x ) complies with 76 to

100%

3.732

270

5.386.644

1.307.511

229.153

6.415

105

13,30%

2009

1.359

854

21,40%

1.006

173 147

4.615.175

75.18 % gov ernment 5.11% emplo yees 9.37

% shareho lders 6.60 % third parties 3.74 %

retained

23

15,20%

3.694

269

101

7.689

2009 (thousand reais)

5.432.306

825.734

222.243

() does not have goals ( ) com plies with 51to 75%

( ) complies with 0 to 50% ( x ) complies with 76 to

100%

52,35


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Independent auditors report

To the Board of Directors and Shareholders ofLight S.A.

Rio de Janeiro - RJ

1. We have examined the accompanying balance sheet of Light S.A. (Company) and theconsolidated balance sheet of the Company and its subsidiaries as of December 31, 2009 and

2008, and the related statements of income, changes in shareholders equity, cash flows andadded value for the years then ended, which are the responsibility of its Management. Our

responsibility is to express an opinion on these financial statements.

2. Our examinations were conducted in accordance with auditing standards generally acceptedin Brazil and included: (a) planning of the audit work, considering the materiality of the

balances, the volume of transactions and the accounting systems and internal accountingcontrol of the Company and its subsidiaries; (b) verification, on a test basis, of the evidence

and records which support the amounts and accounting information disclosed; and (c)evaluation of the most significant accounting policies and estimates adopted by Company

management and its subsidiaries, as well as the presentation of the financial statements takenas a whole.

3. In our opinion, the aforementioned financial statements present fairly, in all material aspects,the financial position of Light S.A. and the consolidated financial position of the Company

and its subsidiaries as of December 31, 2009 and 2008, the result of its operations, thechanges in its shareholders equity, its cash flows and the added value on operations for the

years then ended, in conformity with accounting practices adopted in Brazil.

4. The financial statements of Fundao de Seguridade Social Braslight for the year endedDecember 31, 2009 were examined by other independent auditors whose opinion, dated

January 21, 2010, includes an emphasis paragraph regarding the balance of R$137,317

related to tax credits arising from the Entitys tax court case which was successful inobtaining a final and non-appeasable decision, which, according to the Managementsforecast, will allow them to utilize these credits to offset taxes payable in future years. The

future realization of the credits is subject to the completion of the offset process with theFederal Tax Authority (Secretaria da Receita Federal), which the Entity suspended in

September 2005. If the Entity does not complete the offset process, they may eventuallyrecord a provision for this asset. This asset, which guarantees the Entitys actuarial reserves,


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was deducted from calculation of the subsidiaries actuarial deficit, as required by Resolution

n 371/00 of the Brazilian Securities and Exchange Commission - CVM . Consequently, inthe event that a provision is recorded for this amount, Companys liability may be

proportionally adjusted.

5. Accounting practices adopted in Brazil vary in certain significant aspects from InternationalFinancial Reporting Standards - IFRS as issued by IASB. Except for the non-adoption of

IFRIC 12 (Service Concession Arrangements) for whose effects were not determined by the

Companys management, for non inclusion all the IFRS disclosure requeriments and for thenon recognition of the fair value of fixed assets at initial adoption as required by IFRS or the

revision of the historical cost in compliance with IFRS, the information relating to the natureand effect of such differences were presented in Item 39 to the consolidated financial

statements.

Rio de Janeiro, February 10, 2010

KPMG Auditores Independentes

CRC SP-014428/O-6 F-RJ

Vnia Andrade de Souza

Accountant CRC RJ-057497/O-2


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Notes 31/12/2009 31/12/2008 31/12/2009 31/12/2008

CURRENTCash and Cash Equivalents 6 14.584 40.256 828.372 590.126

Consumers, concessionaires and permissionaires 7 - - 1.362.365 1.350.832

Recoverable Taxes 8 774 284 675.881 836.504Inventories - - 14.369 18.603

Receivables from swap transactions 32 - - 4 6.671

Dividends Receivable 432.340 499.638 - -

Services - - 131.902 57.500

Prepaid Expenses 9 175 135 260.502 383.291

Other receivables 10 20.212 167 100.016 107.879

468.085 540.480 3.373.411 3.351.406

NON-CURRENT 2.859.457 2.764.479 5.986.748 6.110.559

LONG-TERM ASSETS

Consumers, concessionaires and permissionaires 7 - - 297.798 292.594

Recoverable Taxes 8 - - 820.843 1.109.566

Receivables from swap transactions 32 - - - 4.413

Escrow deposits 152 121 200.520 194.200

Prepaid expenses 9 - - 37.779 129.435

Other receivables 10 - - 8.725 26.420

152 121 1.365.665 1.756.628

Investments 11 2.858.627 2.764.358 20.388 13.615

Property, Plant and Equipment 12 678 - 4.319.087 4.059.358

Intangible assets 13 - - 281.608 280.958

3.327.542 3.304.959 9.360.159 9.461.965

ASSETS

Parent Company Consolidated

LIGHT S.A.

BALANCE SHEETS ON DECEMBER 31, 2009 AND 2008

(In thousands of reais)


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Notes 31/12/2009 31/12/2008 31/12/2009 31/12/2008

CURRENT

Suppliers 14 6.348 283 564.181 486.204

Payroll 47 7 3.338 2.791Taxes 8 53 10 285.180 230.461

Loans, Financing and Financial Charges 15 - - 197.150 116.799

Debentures and Financial Charges 16 - - 96.412 61.523

Dividends Payable 432.340 499.638 432.340 499.638

Estimated Liabilities 176 31 49.036 55.052

Sector charges Consumer Contributions 17 - - 110.791 126.733

Provision for contingencies 18 - - - 2.237

Pension plan and other employee benefits 20 - - 95.044 87.744

Other Liabilities 19 1.524 1.286 377.471 519.757

440.488 501.255 2.210.943 2.188.939

NON-CURRENT - - 4.262.162 4.469.322

LONG-TERM LIABILITIES

Loans, Financing and Financial Charges 15 - - 1.006.204 1.046.550

Debentures and Financial Charges 16 - - 1.165.759 945.549

Taxes 8 - - 303.585 324.743Provision for contingencies 18 - - 673.930 998.460

Pension plan and other employee benefits 20 - - 861.386 944.417

Other Liabilities 19 - - 251.298 209.603

- - 4.262.162 4.469.322

SHAREHOLDERS' EQUITY

Capital stock 23 2.225.822 2.225.819 2.225.822 2.225.819

Profits Reserve 633.187 555.426 633.187 555.426

Legal Reserve 133.999 103.757 133.999 103.757

Profit Retention 499.188 451.669 499.188 451.669

Capital Reserve 23 28.045 22.459 28.045 22.459

Recognized granted options 34.406 22.459 34.406 22.459

Treasury Shares (6.361) - (6.361) -

Retained earnings (accrued losses) - - - -

2.887.054 2.803.704 2.887.054 2.803.704

3.327.542 3.304.959 9.360.159 9.461.965


BALANCE SHEETS ON DECEMBER 31, 2009 AND 2008

LIGHT S.A.


LIABILITIES


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Parent Company Parent Company Consolidated Consolidated

Notes 01/01/2009 to 12/31/2009 01/01/2008 to 12/31/2008 01/01/2009 to 12/31/2009 01/01/2008 to 12/31/2008

OPERATING REVENUE

Electric Power Supply to Consumers 26 - - 7.681.486 7.214.341

Electric Power Supply to Distributors 26 - - 361.602 360.009

Other Revenues 27 - - 597.957 664.298

- - 8.641.045 8.238.648

Deductions from operating revenueICMS - - (2.080.591) (1.949.018)

Consumer Charges 28 - - (677.447) (416.411)

PIS/COFINS - - (448.148) (484.004)

Other - - (2.553) (2.571)

- - (3.208.739) (2.852.004)

NET OPERATING REVENUE - - 5.432.306 5.386.644

ELECTRIC POWER COST

Electric Power Purchased for Resale 30 - - (3.284.601) (3.063.177)

- - (3.284.601) (3.063.177)

OPERATING COST

Personnel 29 - - (112.204) (141.964)

Material 29 - - (21.239) (13.987)

Outsourced services 29 - - (119.373) (120.526)

Depreciation and amortization 29 - - (247.305) (275.887)

Other 29 - - (14.193) (16.364)

- - (514.314) (568.728)

GROSS OPERATING PROFIT - - 1.633.391 1.754.739

OPERATING EXPENSES

Selling 29 - - (322.389) (315.476)

General and Administrative 29 (56.701) (26.446) (427.904) (247.581)

(56.701) (26.446) (750.293) (563.057)

EQUITY IN THE EARNINGS OF SUBSIDIARIES 660.311 1.023.996 - -

FINANCIAL REVENUES (EXPENSES)

Revenues 31 1.598 763 201.864 270.149

Expenses 31 (316) (384) (272.527) (175.757)

1.282 379 (70.663) 94.392

OTHER OPERATING REVENUES (EXPENSES)

Revenues - - 38.144 30.188

Expenses - - (24.845) (8.751)

- - 13.299 21.437

INCOME BEFORE TAXES

AND INTEREST 604.892 997.929 825.734 1.307.511

Current income tax and social contributions 8 - - (168.994) (161.410)

Deferred income tax and social contributions 8 - - (31.402) (140.121)

INCOME BEFORE INTEREST 604.892 997.929 625.338 1.005.980

Interest (61) (25) (20.507) (31.527)

NET INCOME FOR THE YEAR 604.831 997.904 604.831 974.453

Earnings per share R$ 2,96959 4,89327 2,96959 4,77828

No. of shares, Ex-Treasury 203.675.160 203.933.778 203.675.160 203.933.778


LIGHT S.A.

STATEMENT OF INCOME FOR THE YEARS ENDED ON DECEMBER 31, 2009 AND 2008


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RETAINED EARNINGS

CAPITAL CAPITAL LEGAL PROFIT / (ACCRUED TOTAL

STOCK RESERVE RESERVE RETENTION LOSSES)

BALANCE ON DECEMBER 31, 2007 2.220.355 - 53.862 394.131 - 2.668.348

Adjustment to the first-time adoption of Law 11,638/07 - - - - (40.067) (40.067)

Capital Increase 5.464 - - - - 5.464

Dividends paid profits reserve - - - (350.766) - (350.766)

Recognized granted options - 22.459 - - - 22.459

Net income for the year - - - - 997.904 997.904

Allocation of net income for the year:

Legal reserve - - 49.895 - (49.895) -Proposed dividends - - - - (499.638) (499.638)

Profit retention reserve - - - 408.304 (408.304) -

BALANCE ON DECEMBER 31, 2008 2.225.819 22.459 103.757 451.669 - 2.803.704

Capital Increase 3 - - - - 3

Dividends paid profits reserve - - - (94.730) - (94.730)

Treasury shares - (6.361) - - - (6.361)


Exercised granted options - (39.726) - - - (39.726)



Proposed dividends - - - - (432.340) (432.340)

Legal reserve - - 30.242 - (30.242) -



PROFIT RESERVE

LIGHT - S.A.

STATEMENT OF CHANGES IN SHAREHOLDERS EQUITY PARENT COMPANY


RETAINED EARNINGS

TOTAL CAPITAL LEGAL PROFIT / (ACCRUED TOTAL

STOCK RESERVE RESERVE RETENTION LOSSES)

BALANCE ON DECEMBER 31, 2007 2.220.355 - 53.862 417.582 - 2.691.799

Adjustment to preliminary adoption of Law 11,638/07 - - - - (40.067) (40.067)

Capital increase 5.464 - - - - 5.464

Dividends paid - profits reserve - - - (350.766) - (350.766)




Legal reserve - - 49.895 - (49.895) -




Capital increase 3 - - - - 3


Exercised granted options - (39.726) - - - (39.726)


Treasury shares - (6.361) - - - (6.361)

Dividends paid - profits reserve - - - (94.730) - (94.730)


Legal reserve - - 30.242 - (30.242) -




LIGHT - S.A.

STATEMENT OF CHANGES IN SHAREHOLDERS EQUITY CONSOLIDATED


PROFITS RESERVE


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0 1/ 01 /2 00 9 t o 12 /3 1/ 200 9 0 1/ 01 /2 008 to 12/ 31 /20 08 0 1/ 01 /20 09 to 12 /3 1/ 20 09 01 /0 1/ 20 08 to 12/ 31 /2 00 8

Cash flows from operations

Net income for the period

Expenses (revenues) not affecting cash:

Allowance for doubtful accounts - -

Allowance for doubtful accounts - Free Energy - -

Provision for (reversal of) losses in the recovery of amounts in the Long-term RTE - -

Restatement of regulatory and contingent assets and liabilities - - 61.599

Adjustment of receivables to present value - - (19.072)

Depreciation and amortization - - 304.882

Equity in the earnings of subsidiaries - -

Interest and monetary variations, net - - 175.714 Write-off of property, plant and equipment - - (13.103)

Deferred income and social contribution taxes - - 31.402

Charges and monetary variation on post-employment liability - - 18.197

PIS/COFINS reversal - rate increase and base expansion - - -

Provision for contingencies - liabilities - - 61.563

Granted Options 51.673

Other - - -

(3.807) (3.633) 1 .536.790 1.734.121

(Increase) decrease in assets

Consumers and distributors - -

Recoverable taxes

Services provided - -

Inventories - -

Prepaid expenses (other) - -

Dividends - -

Regulatory assets (CVA and Financial Bubbles) - -

Escrow deposits - -

Other

667.376 595.555 134.714 (440.367)

Increase (Decrease) in liabilities

Suppliers

Energy suppliers - -

Payroll and social contributions

Taxes and social contributions

Memorandum accounts - CVA - -

Regulatory charges - -

Contingencies - -

Post-employment liabilities - -

Other

4.706 27 (323.185) 14.263

Cash provided by operations 668.275 591.949 1.348.319 1.308.017

Investing activities

Sale of income property, plant and equipment - -

Investments in property, plant and equipment - -

Share acquisition (64 .721) -

Advances - -

Consumer contributions - - 25.448 2.570

Shareholding - - -

Cash used in investing activities (99.579) - (605.688) (590.908)

Financing activities

Dividends paid

Loans and financing - -

Capital increase - - -

Amortization of loans and financing - -

Cash used in financing activities (594.368) (554.229) (504.385) (617.194)

Cash net variation (25.672) 37.720 238.246 99.915

Statement of cash net variation

At the beginning of the period 2.536

At the end of the period 40.256

Cash variation (25.672) 37.720 238.246 99.915


LIGHT - S.A.

STATEMENT OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2009 AND 2008

( In thousands of reais )


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01/01/2009 to 12/31/2009 01/01/2008 to 12/31/2008 01/01/2009 to 12/31/2009 01/01/2008 to 12/31/2008

Revenues - - 8.408.268 8.024.304

Goods, products and services sold - - 8.641.045 8.238.648

Other Revenues - - 13.299 21.437

Provision/Rev. of allowance for doubtful accounts - - (246.076) (235.781)

Raw material acquired from third-parties (2.010) (1.683) (3.690.074) (3.360.469)

Cost of goods, products and services sold - - (3.284.601) (3.063.176)

Material-electric power-third-party services-other (2.010) (1.683) (405.473) (297.293)

Gross Value-Added (2.010) (1.683) 4.718.194 4.663.835

Retentions - - (304.882) (312.443)Depreciation, Amortization and Depletion - - (304.882) (312.443)

Net value-added (2.010) (1.683) 4.413.312 4.351.392

Value-added received in transfer 661.908 1.024.759 201.864 270.149

Equity in the earnigns of subsidiaries 660.310 1.023.996 - -

Financial revenues 1.598 763 201.864 270.149

Total Value-Added to Distribute 659.898 1.023.076 4.615.176 4.621.541

Value-Added Distribution 659.898 1.023.076 4.615.176 4.621.541

Personnel 54.571 24.747 235.830 226.552

Direct remuneration 54.353 24.635 174.342 160.955

Benefts 166 102 35.363 39.881

FGTS (Government Severance Indemnity Fund for Employees) 49 10 20.588 22.653

Other 3 - 5.537 3.063

Taxes, Fees and Contributions 451 123 3.469.722 3.220.169

Federal 451 123 1.381.320 1.249.177

State - - 2.081.205 1.949.018

Municipal - - 7.197 21.974

Third-party capital remuneration 45 302 304.793 200.367

Interest rates 30 295 266.118 152.582

Rentals 15 7 22.960 29.923

Other - - 15.715 17.862Remuneration of own capital 604.831 997.904 604.831 974.453

Dividends 432.340 499.638 432.340 499.638

Retained earnings / accrued losses in the year 172.491 498.266 172.491 474.815

ConsolidatedParent Company

STATEMENT OF VALUE ADDED FOR THE YEARS ENDED ON DECEMBER 31, 2009 AND 2008

LIGHT - S.A.

( In thousands of reais)


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NOTES TO THE FINANCIAL STATEMENTSAS OF DECEMBER 31, 2009 and 2008(Amounts in thousands of Brazilian reais)

1. Operations

Light S.A.s corporate purpose is to hold equity interests in other companies, as partner or

shareholder, and is involved in the direct or indirect exploitation, as applicable, of electric powerservices, including electric power generation, transmission, sale and distribution systems, as well

as other related services.

Light S.A. is a parent company of the following companies:

Light Servios de Eletricidade S.A. (Light SESA) - Publicly-held corporation engaged in thedistribution of electric power;

Light Energia S.A. - (Light Energia) Closely-held corporation whose main activity is to study,

plan, construct, operate and exploit systems of electric power generation, transmission and sales,

and related services;

Light Esco Prestao de Servios S.A. - (Light Esco) Company whose main activity is toprovide services related to co-generation, projects, management and solutions, such as improving

efficiency and defining energy matrixes and sale of energy on the free market. The ExtraordinaryGeneral Meeting held on December 10, 2009 resolved to convert Light Esco Prestao de

Servios Ltda. from a limited liability company into a corporation.

Itaocara Energia Ltda. - (Itaocara Energia) Company in the pre-operating stage, primarily

engaged in the exploitation and production of electric power;

Lightger S.A. (Light Ger) and Lighthidro Ltda.(Light Hidro) Both companies are in the pre-operating stage and participate in auctions for concession, authorization and permission for new

plants. On December 24, 2008, Light Ger obtained the installation license that authorizes the startof implementation works of Paracambi small hydroelectric power plant (PCH). The Extraordinary

General Meeting held on August 27, 2009 resolved to convert Lightger Ltda. from a limitedliability company into a corporation.

Instituto Light para o Desenvolvimento Urbano e Social (Light Institute) It is engaged inparticipating in social and cultural projects, with interest in the cities economic and socialdevelopment, affirming the Companys ability to be socially responsible.


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Grupo Lights concessions and authorizations:

Concessions / authorizationsDate of concession /

authorization Maturity Date

Generation, Transmission and Distribution July 1996 June 2026Paracambi small hydroelectric power plant (PCH) February 2001 February 2031Itaocara hydroelectric power plant (indirect) March 2001 March 2036

2. Presentation of the financial statements

The individual and consolidated financial statements including the items thereto, are presented

in thousands of reais and other currencies, except when otherwise indicated. These financialstatements were prepared in accordance with the accounting practices adopted in Brazil, which

comprises the Brazilian corporation laws, pronouncements, guidance and interpretations issuedby the Brazilian Committee on Accounting Pronouncements (CPC), rules issued by the

Brazilian Securities and Exchange Commission (CVM), and standards established by ANEELaccording to the Accounting Guide for the Electric Power Public Utility, in compliance with theaccounting concepts introduced by Laws 11,638/07 and 11,941/09.

Given that the Company is comprised primarily of interests in other corporations, the items tothe financial statements primarily reflect the accounting practices and breakdown of companys

subsidiaries accounts.

The Board of Directors authorized the conclusion of these financial statements on February 10,2010.


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3. Summary of main accounting practices

Determination of income

Income is determined pursuant to the accrual basis of accounting.

Revenues from all services rendered are recognized when these are earned. Electricity bills toall consumers are prepared monthly according to the reading calendar of meters. Unbilledrevenue, corresponding to the period between the date of last reading and the end of the month,is estimated and recognized as revenue in the month that energy was consumed. Revenue is not

recognized if its realization is uncertain.

Accounting Estimates

The preparation and disclosure of the financial statements require Management to be based onestimates and its judgment when recording certain transactions that affect assets and liabilities,revenues and expenses. Final results of the transactions upon their effective realization insubsequent periods may differ from Managements estimates and judgment. The Company andits subsidiaries review estimates and assumptions, at least once a year.

Main estimates related to the financial statements refer to the recording of effects derivingfrom:

allowance for doubtful accounts;

provision for contingencies and supplementary private pension plans;

recovery of deferred income and social contribution taxes; and

market value of financial instruments.

Financial revenues and expenses

These include interest rates, monetary and currency variations incurring on rights andobligations subject to monetary restatement until the balance sheet date and hedge operationsresults, which are appropriated to income according to the duration of agreements. Foreigncurrency-denominated assets and liabilities are translated into reais in view of exchange ratereported by Brazilian Central Bank on the balance sheet date. The net effect of theserestatements is reflected in the net income for the year.


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Net income per share

This is determined taking into account the number of outstanding shares on the balance sheetdate.

Non-derivative financial instruments

These include temporary cash investments, cash and cash equivalents, loans, financing anddebentures.

Loans, financing and debentures are measured by the amortized cost using the effective interest

rate method, reduced by eventual impairment and transaction costs directly attributable.Investments are measured at the fair value through income.

Derivative Financial Instruments

The Company and its subsidiaries maintain derivative financial instruments to hedge againstforeign currency and interest rates risks.

Derivatives are preliminarily recognized by their fair value; attributable transaction costs are

recognized in income when they are incurred. Subsequently to the initial recognition,derivatives are measured by fair value and changes are recorded in income.

Current and non-current assets

Consumers, concessionaires and permissionaires (Clients) These include the supply ofelectricity billed and to be billed (estimate), default surcharges, interest deriving from

payment in arrears and renegotiation of consumers debts, adjusted to present value whereapplicable and energy sold to other concessionaires due to electric power supply according

to amounts made available within the scope of Electric Power Commercialization Chamber

(CCEE) and credits related to varied nature regulatory assets.

Present value is calculated for each material renegotiation transaction of consumers debt(payment by installments), based on interest rates that reflect the term and the risk of each

transaction, on average, 1% per month. The counter entry of accounts receivable presentvalue adjustment is the financial result.

The allowance for doubtful accounts was established in amount considered sufficient by

Management to cover eventual losses in the realization of credits.


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Inventories (property, plant and equipment inclusive) materials under inventory, classified

in Current Assets (maintenance and administrative storehouse) and those allocated to

investments, classified in Non-Current Assets Property, Plant and Equipment (workswarehouse), are recorded at the average acquisition cost and do not exceed their

replacement costs or realization values, deducted from provision for losses, whereapplicable.

Investments permanent equity interest in subsidiaries are valued by the equity accountingmethod. Other investments are valued at the acquisition cost monetarily restated until

December 31, 1995, deducted from provision for devaluation, where applicable.

Property, plant and equipment These are recorded at the acquisition, formation orconstruction cost, monetarily restated until December 31, 1995, deducted from accumulateddepreciation. Other expenditures are capitalized only when there is an increase in economic

benefits of this item of property, plant and equipment. Another type of expenditure isrecognized in income as expense when this is incurred.

Assets under Service AIS This includes assets and facilities in view of servicegranted, registered and controlled by means of the Registration Unit (UC) and Unit of

Addition and Withdrawal (UAR), by Assets Order - ODI, book account and date oftransfer (capitalization) for Assets under Service, as required by ANEEL.

Depreciation The depreciation is calculated by the straight-line method, based on

book balances recorded at the respective Registration Units. Annual rates aredetermined in the chart attached to ANEEL Resolution 367 of June 2, 2009, based on

estimates of assets useful life, as disclosed in the Item 12.

Construction in progress AIC this refers to assets and facilities under construction.

General Management Apportionment (RAG) Part of administrative and generalexpenses, deriving from staff expenses, services rendered, leasing, rentals and other are

monthly appropriated to construction and other orders in progress, according to the

Accounting Guide published by ANEEL.

Financial Charges In view of provision in Accounting Instruction 6.3.10 of theAccounting Guide for the Electric Power Public Utility, enacted by ANEEL Resolution

444 of October 26, 2001 and CVM Resolution 577 of June 5, 2009, which revokedCVM Resolution 193 of July 11, 1996, interest rates, monetary variations and financial

charges related to financing obtained from third parties, effectively applied toconstruction in progress were appropriated to the orders in progress.


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Financial lease Certain leasing agreements substantially transfer risks and benefitsinherent to an asset ownership to the Company and its subsidiaries. These agreements are

characterized as financial lease agreements and assets are recognized by fair value orpresent value of minimum payments provided for in the agreement. Goods recognized as

assets are depreciated by depreciation rates applicable to each group of assets pursuant tothe Item 12. Financial charges related to the financial lease agreements are appropriated to

income over the term of the agreement, based on the amortized cost method and effective

interest rate.

Intangible asset Intangible assets of the Company and its subsidiaries comprise assetsacquired from third parties and are measured by total acquisition cost, deducted from

accumulated depreciation. Intangible assets with definite useful life are amortized on astraight-line basis by the annual rate of 20%.

Impairment Fixed and intangible assets with useful life have their recoverable valuetested, at least, yearly, should exist signs of impairment. Intangible assets without definiteuseful life are annually tested for impairment.

Current and non-current liabilities these are stated by known or calculable values, accruedof, where applicable, corresponding charges, monetary and currency variations incurred upto the balance sheet date. A provision is recognized in the balance sheet when the Company

and its subsidiaries have a real or legal obligation established as a result of past event and it

is likely that an economic resource will be required to settle the obligation. Provisions are

recorded based on the best estimates of risk involved.

Pension plan and post-employment benefits to employees Costs subsidizing pension plansand eventual plan deficits are recognized by the accrual basis and pursuant to CVMResolution 371/00 and NPC 26 of IBRACON based on actuarial calculation prepared by

independent actuary.

When plan benefits are improved, the increase portion of benefit related to employees

services rendered in the past is recognized in income on a straight-line basis during theaverage period until benefits are acquired. If criteria to obtain these benefits are

immediately met, expenses are immediately recognized in income.

The Company and its subsidiaries recognize all gains and losses deriving from definedbenefit plans directly defined in income.


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Share-based remuneration plan the effects of share-based remuneration plan arecalculated based on the fair value of equity instruments granted and recognized in the

balance sheet and in the statement of income as contractual conditions are met.

Current and deferred income and social contribution taxes Income and socialcontribution taxes for current and deferred year are calculated based on the 15% rate,accrued of 10% surcharge over excess taxable income of R$240 for income tax and 9%

over taxable income for social contribution on net income and take into account socialcontribution tax loss carryforward limited to 30% of book taxable income.

Deferred tax assets deriving from tax losses, social contribution tax loss carryforward and

temporary differences were established pursuant to CVM Instruction 371 of June 27, 2002,and consider the profitability track record and the expectation of generating future taxable

income, based on feasibility technical study approved by Management bodies.

As provided for in Law 11,941/09, the Company and its subsidiaries opted for adopting the

Transition Tax Regime (RTT) when determining the book taxable income, so that changesin the criterion to recognize revenues, costs and expenses considered in the determination

of net income for the year will not have effects for the purposes of determining booktaxable income of company subject to RTT, and should consider for tax effects the

accounting methods and criteria effective on December 31, 2007.

Provision for contingencies These are recorded by means of evaluation and quantification

of lawsuits, the probability of loss is deemed as probable according to Managements andlegal counsels opinion.

Recording of electric power purchase and sale transactions through Electric PowerCommercialization Chamber (CCEE) The cost of energy purchased and supply revenues

are recognized by accrual basis based on information published by CCEE, which is in

charge of determining the amount and quantities of purchases and sales made within aregulated environment, or by Managements estimate, when this information is notavailable.


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4. Consolidation procedures

Consolidated financial statements include Light S.A. and its direct subsidiaries, listed below:

Interest %

2009 (%) 2008 (%)

Light Servios de Eletricidade S.A. 100 100Light Energia S.A. 100 100Light Esco Prestao de Servios S.A. 100 100Lightger S.A. 100 100Light Hidro Ltda. 100 100Instituto Light para o Desenvolvimento Urbano e Social 100 100Itaocara Energia Ltda. 100 100

Accounting practices were consistently applied in all consolidated companies and compatiblewith those employed in the previous year.

These consolidated financial statements were prepared pursuant to consolidation rules of Law6,404/76, amended by Laws 11,638/07 and 11,941/09 and CVM Instruction 247/96. Thus,interest between consolidated companies, balances of accounts receivable and payable,intercompany revenues and expenses were eliminated.


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5. Regulatory assets and liabilities

12/31/2009 12/31/2008 12/31/2009 12/31/2008

Assets

Consumers, concessionaries and permissionaires (Note7) 6,511 67,977 - -

Tariff Adjustment - TUSD 6,511 67,977 - -

Prepaid expenses (Note9) 258,121 381,624 36,121 125,071

CVA - (b) 206,631 222,245 36,121 125,071

Other regulatory expenses - (c) 51,490 27,469 - -

Portion "A" - (a) - 131,910 - -

TOTAL ASSETS 264,632 449,601 36,121 125,071

Liabilities

Suppliers (Note 14) (54,185) - - -

Free energy refund to generation companies (54,185) - - -

Other payables (Note 19) (39,780) (160,661) (14,793) (1,719)

CVA - (b) (3,273) (143,947) (14,793) (1,719)

Other regulatory expenses - (c) (17,895) (16,714) - -

Portion "A" - (a) (18,612) - - -

TOTAL LIABILITIES (93,965) (160,661) (14,793) (1,719)

NET OVERALL TOTAL 170,667 288,940 21,328 123,352

Consolidated

Current Non-current

a) Rationing:

The electric power distribution and generation companies (free energy) revenues for the

rationing period is being recovered through the Extraordinary Tariff Recovery - RTE,which agreement only allowed for the billing related to revenue lost of Light SESA throughFebruary 2008. In June 2008, Light SESA wrote off the items related to the extraordinary

tariff recovery, free energy and its respective provisions, which were not recovered withinthe 74-month term set forth by ANEEL in the Emergency Program for Reduction of

Electric Power Consumption (PERCEE), in the amount of R$291,448, with no impact on

results of that period.

The Company has lawsuits, both within ANEEL and in the judiciary scopes, seeking theindemnity of such losses.


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In compliance with ANEEL Order 4,722 of December 18, 2009, DistributionConcessionaires calculated the amounts due to the Generation Concessionaires, according

to the calculation established at Resolution 387 of January 12,2010. The amount calculated,

by estimate, was recorded in liabilities, under Suppliers against the financial result (seeItem 14), amounting to R$54,185 on December 31, 2009.

Due to the maturity of term for the RTE billing (Loss of Revenue), the Variation in

Portion A items (from January 1, 2001 to October 25, 2001) started to be recovered fromMarch 2008, as approved by ANEEL Directive Release 267/04:

Pursuant to ANEELs rules, the additional tariff should remain effective until the end of the

month when the ratified amount would be fully amortized, duly adjusted by the Central

Bank overnight (Selic) rate. In the case of Light SESA, this amortization occurred by midJune 2009. Amounts billed after the amortization of ratified Portion A amount were

recorded in 2009s tariff adjustment, totaling R$23,003 and refunded to consumers. Saidamount is recorded in Other Debts, under current liabilities.

b) Account for Compensation in Variations of Installament A - CVA

CVA records the variations during the period and the annual tariff adjustment based on the

Central Bank overnight rate (SELIC) for: purchase of energy; the tariff for transportationof electric power from Itaipu; the Fuel Usage Quota (CCC); the Economic Development

Account (CDE); System service charges (ESS); the tariff for the use of transmission

facilities of the basic electric network; and compensation for the use of water resources(CFURH) and Incentive Program to Electric Power Alternative Sources (PROINFA).

The amounts recorded under current (assets and liabilities) refer to amounts already

approved by ANEEL in November 2009, when the tariff adjustment was concluded. Theamounts recorded under non-current represent an estimate of the formation of CVA to beapproved in the next tariff adjustment (November 2010).


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Breakdown of CVA

12/31/2009 12/31/2008 12/31/2009 12/31/2008

Breakdown - CVA

Fuel Consumption Account - CCC - 141,650 18,858 31,871

Enery Development Account - CDE - - 268 -

Cost of electricity acquisition 158,226 - 3,885 75,419

System Service Charges - ESS 10,970 73,145 - 14,200

PROINFA 25,431 - 633 -

Transportation of electric power from Itaipu 984 2,620 324 825

Transportation of electric power to basic electric network 11,020 4,830 12,153 2,756

TOTAL - CVA 206,631 222,245 36,121 125,071

12/31/2009 12/31/2008 12/31/2009 12/31/2008

Breakdown - CVA

Fuel Consumption Account - CCC (2,592) - - -

Energy Development Account - CDE (681) (30,863) - (1,664)

Cost of electricity acquisition - (109,934) - -

System Service Charges - ESS - - (14,793) -

PROINFA - (3,150) - (55)

TOTAL - CVA (3,273) (143,947) (14,793) (1,719)

Current Non-Current

Consolidated

Assets

Non-CurrentCurrent

ConsolidatedLiabilities

c) Other regulatory assets/liabilities

Finance costs transferred in the annual tariff adjustment of subsidiary Light SESA in

accordance with Normative Resolution 905 of November 4, 2009, as per chart below:


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6. Cash and cash equivalents

12/31/2009 12/31/2008 12/31/2009 12/31/2008

Financial investments 12,027 40,206 801,233 549,097

Cash available 2,557 50 27,139 41,029

Total 14,584 40,256 828,372 590,126

12/31/2009 12/31/2008 12/31/2009 12/31/2008

Financial investments: Rate Maturity

CDB CDI Daily 12,027 40,206 801,233 547,919

Overnight Pre-fixed Daily - - - 992

Other CDI Daily - - - 186Total 12,027 40,206 801,233 549,097



7. Receivables from consumers, concessionaires and permissionairies (clients)

12/31/2009 12/31/2008

CURRENT

Billed sales 1,678,167 1,729,885

Unbilled sales 286,170 260,361

Debt payment by installments (a) 153,421 140,874

2,117,758 2,131,120

Sales within the scope of CCEE 1,001 613

Supply and charges related to the use of electric network 54,946 52,412

Tariff recoverable credits (Note 5) 6,511 67,977

62,458 121,002

(-) Allowance for doubtful accounts (817,851) (901,290)

1,362,365 1,350,832

Non-Current

Debt payment by installments (a) 297,798 292,594

297,798 292,594

Consolidated

a) The balances of debt installments are adjusted to present value, when applicable, pursuant to Law

11,638/07. The calculation of present value is made for each material transaction of consumers debtsrenegotiation (debt payment by installments), based on the interest rate which reflects the term andrisk of each transaction, being about 1% p.m.


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The allowance for doubtful accounts was set up in amounts deemed sufficient to cover eventuallosses in the realization of credits and it is in accordance with ANEELs instructions

summarized below:

Clients with significant debts (large clients):

Individual analysis of balance receivable fromconsumers, by consumption class, deemed unlikely to be received.

In other cases:

Residential consumers past due for more than90 days;

Commercial consumers past due for morethan 180 days;

Industrial and rural consumers, public sector,public lighting, public utilities and other past due for more than 360 days

Overdue and falling due balances related to electric power billed sales and debt payment byinstallments are distributed as follows:

Maturing Overdue up to Overdue over

Balance 90 days 90 days Total

Residential 148,915 158,614 746,228 1,053,757

Industrial 24,296 15,887 175,937 216,120

Commercial 130,502 45,920 200,665 377,087

Rural 521 282 634 1,438

Public sector 34,839 18,935 107,147 160,921

Public lighting 4,506 2,124 34,415 41,045

Public utility 268,337 357 10,325 279,019

Billed sales and renegotiated debts (current and non-current) 611,916 242,119 1,275,351 2,129,386

Maturing Overdue up to Overdue over

Balance 90 days 90 days Total

Residential 187,010 135,907 758,851 1,081,768

Industrial 27,127 17,671 196,919 241,717

Commercial 130,691 38,719 177,802 347,212

Rural 584 272 531 1,387

Public sector 27,355 19,330 95,172 141,857

Public lighting 12,239 2,822 35,967 51,028

Public utility 274,160 2,544 21,680 298,384

Billed sales and renegotiated debts (current and non-current) 659,166 217,265 1,286,922 2,163,353

12/31/2008

12/31/2009


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8. Taxes

12/31/2009 12/31/2008 12/31/2009 12/31/2008 12/31/2009 12/31/2008 12/31/2009 12/31/2008

CURRENT

Tax credits IRPJ and CSLL (a) 703 284 - - 102,073 107,818 - -

IRRF (Withholding Income Tax) recoverable - - - - 11,522 11,522 - -

IRRF (Withholding Income Tax) payable - - - - - - 2 2

Deferred IRPJ and CSLL (b) - - - - 233,213 270,493 - -

P IS /COF IN S P AES p ai d b y i ns tal lme nt s ( Ref is II) ( c) - - - - - - - 2,701

INSS - PAES paid by installments (Refis II) (c) - - - - - - - 8,272

ICMS recoverable (f) - - - - 109,704 123,440 - -

ICMS payable - - - - - - 5,561 15,166

Installment- Law 11,941/09 (d) - - - - - - 21,685 -

PIS/COFINS recoverable (g) - - - - 6,634 103,945 - -

PIS/COFINS payable - - - - - - 57,420 51,112

Prepaid IRPJ/CSLL 71 - - - 181,364 204,552 - -

Provision for IRPJ/CSLL - - - - - - 188,835 143,394

Other - - 53 10 31,371 14,734 11,677 9,814TOTAL 774 284 53 10 675,881 836,504 285,180 230,461

Non-Current

Deferred IRPJ and CSLL (b) - - - - 780,076 1,036,759 - -

IRPJ and CSLL unrealized profits abroad (e) - - - - - - - 286,337

Installment- Law 11,941/09 (d) - - - - - - 303,585 -

PIS/C OFINS PA ES paid by installments (R efis II) (c) - - - - - - - 9,455

INSS PAES paid by installments (Refis II) (c) - - - - - - - 28,951

ICMS recoverable (f) - - - - 40,767 72,807 - -

TOTAL - - - - 820,843 1,109,566 303,585 324,743

Liabilities

Consolidated

Assets Liabilities

Parent Company

Assets

a) The balance refers to negative balance tax credits recoverable arising from withholdings ofcash investments and government agencies in the amount of R$22,951 and prepaid Income

Tax and Social Contribution credits for 2007 and 2008 amounting to R$79,122. Thevariation of the amounts for the year is obtained by the adjustment based on the Selic rate in

the amount of R$ 24,726, the new credits in the amount of R$125,077, net of offsets in theyear, amounting to R$155,548, of which R$23,356 refer to other taxes in the period andR$132,192 refer to LIR Energy Limited (LIR) and Light Overseas Investment Limited

(LOI) write-offs.

b) The deferred tax assets include amounts expected to be recoverable within 10 years, as setforth in CVM Instruction 371/02, and in the assumption of not being barred by credit.

In order to justify these deferred tax assets, Light SESA restated, already taking into account

realizations up to December 2009, the technical feasibility study, approved by the Board of

Directors and examined by the Fiscal Council, which is based on the projections made in 2008and approved by the Board of Directors at that time. The feasibility study shows the balancerecovery within 4 years. Below, the amounts of these deferred tax assets per year of estimated

realization.


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2010 233,213

2011 269,392

2012 222,629

2013 288,055

Total Light S.A. and Subsidiaries 1,013,289

The deferred assets is broken down as follows:

12/31/2009 12/31/2008

ASSETS AND LIABILITIES Current and Non-Current

Tax loss carryforwards 463,694 770,681

Allowance for doubtful accounts 274,865 300,922

Provision for profit sharing 8,916 11,288

Provision for labor contingencies 55,642 56,007

Provision for tax contingencies 61,027 136,060

Provision for civil contingencies 87,289 94,932

Impacts resulting from the adoption of Law 11,638/07 19,328 19,967

Other provisions 41,762 31,592

1,012,523 1,421,449

(-) Provision for non-recovery - (118,462)

Total - Light SESA 1,012,523 1,302,987

Tax loss carryforwards - Light Energia S.A. and Light Esco S.A. 766 4,265

Total - Consolidated 1,013,289 1,307,252

Consolidated

c) Special Installment Payment Program PAES (REFIS II) The remaining balance ofPAES-Internal Revenue Service was fully paid on December 28, 2009, corresponding to the

outstanding amount made available by the Brazilian Internal Revenue Service (RFB)totaling R$5,566. Regarding the PAES-Social Security, the remaining balance was

calculated for a new installment program due to the adhesion to the New REFIS Law941/09, whose figures and effects are disclosed in the Item below.

d) New REFIS (Law 11,941/09) On November 6, 2009, the Board of Directors of thesubsidiary LIGHT SESA approved its adhesion to the tax reduction and installment

program, pursuant to Law 11,941/09.

The main benefits of adhering to the New Refis were interest rate and fine reduction in theamount of R$128,921, the possibility to pay off the remaining interest and fines by using tax

losses, as well as the disbursement of cash by installments.


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The chart below shows the taxes included in this program, as well as the changes of respective

balances accrued as of the last quarterly information (September 30, 2009).

Debit

Taxes

payable

Provision for

Contingencies

Restatements and

Offsettings

Recording of

Provision

Fees and interest

complement

Reduction in fees and

interest

Total Debt included

in REFIS

Fines and interest

offsetting (tax losses)

Amount paid by

installments (Law

11,941/09)

PAES Social security (32,009) - 1,323 - (12,376) 9,559 (33,503) 16,706 (16,797)

COFINS 1% - (231,245) (691) - (19,996) 44,962 (206,970) 106,853 (100,117)

IRPJ and CSLL LIR/LOI (303,748) - 130,612 - (27,643) 27,576 (173,202) 47,543 (125,659)

IRPJ offset not ratified (LIR/LOI) - - - (7,012) (5,442) 1,851 (10,602) 3,590 (7,012)

COFINS offset not ratified (LIR/LOI) - - - (12,700) (10,420) 3,494 (19,626) 6,926 (12,700)

CSLL offset not ratified (LIR/LOI) - - - (2,634) (2,044) 695 (3,982) 1,349 (2,634)

CSLL (interest on capital deduction) - (20,448) (45) - (5,392) 6,553 (19,332) 12,797 (6,536)

CSLL (enforceability suspended) - (7,250) (13) (8,830) (5,319) 3,805 (17,606) 5,478 (12,129)

CPMF (symbolic forex) - - - (3,569) (2,659) 915 (5,314) 1,745 (3,569)

IRPJ / CSLL Law 8,200/91 - (20,783) (63) (6,725) (23,518) 12,913 (38,176) 26,923 (11,254)

INSS quarterly - (75,980) (321) - 16,848 13,442 (46,011) 25,779 (20,232)

INSS joint liability - (208) - - (662) 163 (706) 374 (333)

IRPJ (voluntary confession) - - - - (6,323) 1,150 (5,173) 2,781 (2,391)

CSLL (enforceability suspended) - - - (1,850) (5,428) 1,842 (5,435) 3,585 (1,850)

(335,757) (355,914) 130,802 (43,319) (110,372) 128,921 (585,639) 262,428 (323,211)

Balances on 09/30/2009

As shown above, the initial amount included in the REFIS was R$585,639. Since R$262,428were offset with tax losses, the effective installment that will result in future cash disbursementsis R$323,211.

The debt mentioned above, in the amount of R$323,211, has been paid in 29 installments toPAES-Social Security and 180 installments in other cases. The adhesion provided a gain to

income amounting to R$152,085, of which R$27,722 from financial result and R$124,363 from

income tax and social security.

e) On February 20, 2003, Light SESA filed Writ of Mandamus 2003.51.01.005514-8requesting an injunction that would release it from the payment of levied income and social

contribution taxes on:

(i) Profits earned by the companies LIR Energy Limited (LIR) and Light OverseasInvestment Limited (LOI) before they are effectively available, in which case sole

paragraph, Article 74 of Provisional Measure 2,158-35, of August 24, 2001 (MP 2,158-

35), for the periods from 1996 to 2001, shall not apply;

(ii) Equity pickup referring to the companies LIR and LOI, in this case Article 7, of INSRF 213 of October 7, 2002 shall not apply;


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Due to the adhesion to the New REFIS, as mentioned in the previous item, the Company will

partially discontinue the writ of mandamus, specifically concerning the taxation thesis (CashBasis x Accrual Basis), however, the Company will still discuss the equity pick-up taxation,

under exact terms set forth in Article 13, paragraphs 4 and 5, combined with Article 2 ofPGFN/RFB Joint Ordinance 13 of November 19, 2009.

f) The amount of the state VAT (ICMS) recovery on December 31, 2009 includes R$34,675(R$72,011 on December 31, 2008) of credits deriving from the renegotiations of theCEDAE debt in July and December 2006.

g) It includes the tax credits to offset derived from the adjustment of PIS and COFINScalculation bases in the period from February 2004 through April 2008, due to the use ofsome segment charges, such as calculation basis deduction from these taxes.

In relation to the period from November 2005 through April 2008, the amount related to

credits assessed has been transferred to consumers and it is recorded in Other Payables, in

the amount of R$11,622 (R$46,893 on December 31, 2008) see Item 19.

Reconciliation of effective and nominal rates of the provision for income and socialcontribution taxes:

12/31/2009 12/31/2008

Earnings before Income and Social Contribution Taxes (LAIR) 825,734 1,307,511

Profit sharing (20,507) (31,527)

Adjusted income basis for taxation 805,227 1,275,984

Combined income and social contribution tax rate 34% 34%

Income and social contribution taxes at statutory rates (273,777) (433,835)

Income and social contribution tax effect on permanent additions and exclusions 109,409 29,037

Income and social contribution tax effect on equity in the earnings of subsidiaries - LIR/LOI (87,463) 182,961

Offshore income (52,582) (81,158)

Deferred tax credits not recognized CVM 371/02 - Light S.A. (18,863) -

Reversal provision for IRPJ and CSLL - deferred 118,462 -

Tax incentives 4,332 1,895

Other 86 (431)

Income and social contribution taxes in income (200,396) (301,531)

Current IRPJ and CSLL on income (168,994) (161,410)

Deferred IRPJ and CSLL on income (31,402) (140,121)

(200,396) (301,531)

Consolidated


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11. Investments

12/31/2009 12/31/2008 12/31/2009 12/31/2008

Accounted for under the equity method:

Light SESA 2,555,131 2,598,541 - -

Light Energia S.A. 229,201 143,054 - -

Light Esco Prestao de Servios S.A. 27,825 17,042 - -

Lightger S.A. (a) 29,665 3,289 - -

Lighthidro Ltda (a) 50 50 - -

Itaocara Energia (a) 15,586 849 - -

Subtotal 2,857,458 2,762,825 - -

Accounted for at the cost - - 3,796 3,796

Leased assets - - 11,297 7,097

Other 1,169 1,533 5,295 2,722

Subtotal 1,169 1,533 20,388 13,615

Total 2,858,627 2,764,358 20,388 13,615

(a) Pre-operating companies


Information on subsidiaries

Light SESA Light Energia Light Esco Light Ger Light Hidro Instituto Light Itaocara Energia

12/31/2009

Ownership interest (%) 100 100 100 100 100 100 100

Paid-up capital 2,082,365 77,422 7,584 23,791 50 300 17,294

Shareholders' equity 2,555,131 229,201 27,825 29,665 50 - 15,586

Proposed dividends (402,149) (26,833) (3,358) - - - -

Dividends paid (481,564) (18,074) - - - - -

Additional dividends paid (169,729) - - - - - -

Income for the year 528,465 112,980 14,141 4,585 - - 140

Light SESA Light Energia Light Esco Light Ger Light Hidro Instituto Light Itaocara Energia

12/31/2008Ownership interest (%) 100 100 100 100 100 100 100

Paid-up capital 2,082,362 77,422 7,584 2,000 50 300 2,697

Shareholders' equity 2,598,541 143,054 17,042 3,289 50 - 849

Dividends paid (350,766) (41,387) - - - - -

Proposed dividends (481,564) (18,074) - - - - -

Income for the year 918,164 76,101 6,280 - - - -

Moviments in investments in subsidiaries

Light SESA Light Energia Light Esco Light Ger Light Hidro Itaocara Energia Instituto Light Total

Balances on 12/31/2008 2,598,541 143,054 17,042 3,289 50 849 - 2,762,825

Capital increase 3 - - 21,791 - 14,597 - 36,391

Additional dividends paid (169,729) - - - - - - (169,729)

Proposed dividends (402,149) (26,833) (3,358) - - - - (432,340)

Equity accounting 528,465 112,980 14,141 4,585 - 140 - 660,311

Balances on 12/31/2009 2,555,131 229,201 27,825 29,665 50 15,586 - 2,857,458


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12. Property, plant and equipment

a) The balance of special obligations derives from the consumers financial income,appropriation of the Federal Government, federal, state and municipal funds to finance the

work necessary to meet the electric pow

Financial Statements 2009

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Transcript of Financial Statements 2009