Financial Statements: December 31, 2011

Financial statements
December 31, 2011
Renova Energia S.A. Notes to the financial statements

Years ended December 31, 2011 and 2010
(In thousands of Brazilian Reais, unless otherwise indicated)
Balance sheets Statement of income for the year Statement of changes in shareholders equity Statement of cash flows Statement of added-value Notes to the financial statements

(In thousands of Brazilian Reais, unless otherwise indicated) Balance sheets
Parent company Assets Current assets Cash and cash equivalents Trade accounts receivable Current tax assets Receivables from suppliers Prepayments Pledges and restricted deposits Dividends receivable Other receivables Total current assets Note 12/31/2011 12/31/2010 Consolidated 12/31/2011 12/31/2010
6 7 8 9 11
254.459 1.307 4.701 110 40 11.921 392 272.930
7.251 1.118 116.091 174 59 4.852 129.545
389.846 5.152 1.512 13.479 1.408 40 393 411.830
18.569 3.918 1.274 121.059 576 59 105 145.560
Non-current assets Related party transactions Loans - subsidiaries Loans - Parent companies Special savings bonds Pledges and restricted deposits Goodwill (-) Provision for goodwill at the time of the takeover Investments Other investments Fixed assets in service Constructions in progress Total non-current assets
10 25.229 244 449 119.272 (119.272) 464.709 60 7.980 44.636 543.307 48 164 444 119.272 (119.272) 134.953 60 2.927 33.276 171.872 244 25 11.875 119.272 (119.272) 70 196.337 959.120 1.167.671 164 25 12.019 119.272 (119.272) 70 196.310 77.390 285.978
11 12 12 13 14 14
Total assets
816.237
301.417
1.579.501
431.538

(In thousands of Brazilian Reais, unless otherwise indicated) Balance sheets
Parent company Liabilities Current liabilities Suppliers Loans and financing Charges on loans Current tax liabilities Salaries and vacations payable Other accounts payable Note 12/31/2011 12/31/2010 Consolidated 12/31/2011 12/31/2010
15 16 16 17
2.059 149.409 1.031 1.033 1.413 74
5.989 787 652 59
19.566 154.314 1.031 2.262 1.413 171
8.100 6.336 854 1.263 652 150
Total current liabilities
155.019
7.487
178.757
17.355
Non-current liabilities Loans and financing Charges on loans Related party transactions Loans - subsidiaries Total non-current liabilities
16 16 10
12.087 12.087
1.577 1.577
739.440 14.430 753.870
125.599 125.599
Total liabilities
167.106
9.064
932.627
142.954
Shareholders' equity Capital (-) Expenses with issue of shares Accumulated loss
18 702.788 (34.241) (19.416) 326.515 (13.686) (20.476) 702.788 (34.241) (21.673) 326.515 (13.686) (24.245)
Total shareholders' equity
649.131
292.353
646.874
288.584
Total liabilities and shareholders' equity
816.237
301.417
1.579.501
431.538
See the accompanying notes to the financial statements.

(In thousands of Brazilian Reais, unless otherwise indicated) Statement of income for the year
Parent company Note 12/31/2011 12/31/2010 Consolidated 12/31/2011 12/31/2010
Net income
19
36.553
35.486
Cost of services Depreciation and amortization Operating cost Distribution system use charges Gross income (loss) Operating expenses Other income Administrative and general expenses Tax expenses Depreciation and amortization Other expenses Equity income (loss)
20
(3.607) (13.212) (196) (170) 9.971
(10.890) (5.667) (4.068) (1.155) 25.663 (25.586) (22.930) (1.190) (1.466) -
(10.503) (5.667) (3.617) (1.219) 24.983 (14.880) (14.176) (204) (500) -
20
(11.374) (19.820) (1.183) (1.339) 10.968
Income (loss) before net financial income (expenses) and taxes Financial expenses Financial income Net financial income (expenses)
(11.374) (4.373) 16.807 12.434
(3.607) (498) 4.073 3.575
77 (14.910) 20.078 5.168
10.103 (12.522) 5.629 (6.893)
21
Income (loss) before taxes
1.060
(32)
5.245
3.210
Current income tax and social contribution
22
(2.673)
(1.712)
Income (loss) for the period
1.060
(32)
2.572
1.498
Basic earnings per share attributable to Company's shareholders - R$ per preferred share per common share
0,01 0,01
(0,00) (0,00)
0,01 0,01
0,01 0,01
Diluted earnings per share attributable to Company's shareholders per preferred share per common share
0,01 0,01
(0,00) (0,00)
0,01 0,01
0,01 0,01

(In thousands of Brazilian Reais, unless otherwise indicated) Statement of changes in shareholders equity
Parent company Paid-in Balances at January 1, 2010 Loss for the year Capital increase Capital increase - issue of shares Expenses with issue of shares Balances at December 31, 2010 Income for the year Capital increase - issue of shares Expenses with issue of shares Balances at December 31, 2011
Consolidated Paid-in
Capital Expenses with issue of shares (13.686) (13.686) (20.555) (34.241) Capital reserve 119.272 (119.272) Accumulated losses (20.444) (32) (20.476) 1.060 (19.416)
Total 145.364 (32) 160.707 (13.686) 292.353 1.060 376.273 (20.555) 649.131
46.536 119.272 160.707 326.515 376.273 702.788

Capital Expenses with issue of shares (13.686) (13.686) (20.555) (34.241)
Capital reserve 119.272 (119.272) -
Accumulated losses (25.743) 1.498 (24.245) 2.572 (21.673)
Total 140.065 1.498 160.707 (13.686) 288.584 2.572 376.273 (20.555) 646.874
Balances at January 1, 2010 Income for the year Capital increase Capital increase - issue of shares Expenses with issue of shares Balances at December 31, 2010 Income for the year Capital increase - issue of shares Expenses with issue of shares Balances at December 31, 2011
46.536 119.272 160.707 326.515 376.273 702.788

(In thousands of Brazilian Reais, unless otherwise indicated) Statement of cash flows
Parent company 12/31/2011 Cash flows from operating activities Income (loss) for the period Adjustments due to : operational activities: Depreciation and amortization Charges on loan Write-off of intangible assets Write-off of fixed assets Interest on loan Escrow interest Equity income (loss) Changes in assets (Increase) decrease in trade accounts receivable (Increase) decrease in recoverable taxes (Increase) decrease in prepaid expenses (Increase) decrease in pledges and restricted deposits (Increase) decrease in advances Changes in liabilities (Decrease) increase in suppliers (Decrease) increase in taxes and contributions payable (Decrease) increase in other accounts 1.060 (32) 2.572 1.498 12/31/2010 Consolidate d 12/31/2011 12/31/2010
1.183 (413) 836 3.576 (5) (10.968) (4.731) (189) 64 19 (3.930) 246 (3.846) (12.367) (15.865) (28.232)
196 319 3.237 (2) (9.971) (6.253) (672) (174) (4) 4.581 (118.899) (121.421) 421 (121.000)
6.857 (10) 836 13.789 (1.215) 22.829 (1.234) (238) (832) 19 11.466 862 (7.652) 25.220 137 (36.343) (10.986)
5.871 (6) 3.237 11.698 (1.063) 21.235 (15) (795) (189) (4) 385 6.132 (121.009) (94.260) 643 (16.732) (110.349)
Payment of income and social contribution taxes Payment of interest on loans Net cash used in operational activities Cash flows from investment activities Increase (decrease) in investment Increase (decrease) in Advance for future capital increase Acquisition of property, plant and equipment in service Acquisition of property, plant and equipment in progress
(178.855) (3.173) (4.326) (27.075)
(44.206) (1.496) (11.152)
(4.973) (728.762)
(1.886) (53.728)
Net cash generate d (consumed) in financing activities Cash flows from financing activities Issue of shares Expenses with issue of shares (Increase) decrease in restricted deposits Increase in loans/financings Payments of loans Increase (decrease) in loans Loan with related parties - Receipt Loan with related parties - Payment Loan with related parties Net cash generate d/(consumed) in financing activities
(213.429)
(56.854)
(733.735)
(55.614)
376.126 (20.555) 147.636 (14.338) 36.570 (11.674) (39.234) 488.869
160.707 (13.686) (245) (2.909) 7.745 (10.486) (168) 143.867
376.126 (20.555) 1.359 978.827 (219.689) (70) 171 (241) 1.115.998
160.707 (13.686) 2.121 (5.964) (121) (121) 143.057
Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at January 1 Cash and cash equivalents at December 31
247.208 7.251 254.459 247.208
(33.987) 41.238 7.251 (33.987)
371.277 18.569 389.846 371.277
(22.906) 41.475 18.569 (22.906)

(In thousands of Brazilian Reais, unless otherwise indicated) Statement of added-value
Parent company 12/31/2011 Revenues Sales of goods, products and services Non-operating income Inputs acquired by third parties (include ICMS and IPI) Cost of goods sold and services rendered Materials, energy, outsourced services and other operating expenses Gross added value Depreciation, amortization and depletion Net added value generated by the Company Added value received as transfer Equity income (loss) Financial income Total added value payable Distribution of added value Employees Salaries and payroll charges Management fees Taxes Federal State Municipal Third-party capital remuneration Interest Rents Other Income (loss) for the period Distribution of added value 12/31/2010 Consolidated 12/31/2011 12/31/2010
36.553 -
35.486 -
(13.529) (13.529) (1.183) (14.712)
(8.548) (8.548) (196) (8.744)
(5.223) (16.017) 15.313 (6.857) 8.456
(4.836) (8.981) 21.669 (5.870) 15.799
10.968 16.807 13.063
9.971 4.073 5.300
20.078 28.534
5.629 21.428
5.170 1.067
3.151 797
5.170 1.067 `
3.151 797
98 -
137 -
3.618 -
1.849 -
3.576 1.393 699 1.060 13.063
716 531 (32) 5.300
13.789 2.142 176 2.572 28.534
11.698 1.249 1.186 1.498 21.428

1. Operations
Renova Energia S.A. (Renova or "Company" or Parent Company), with main offices in the city of So Paulo, State of So Paulo, a publicly-held company, was set up on December 6, 2006. The business purpose of the Company is the generation and trade of electric power in all its forms, production of fuels from natural and renewable sources, rendering of logistic support services to environmental consulting firms or companies and holdings in the capital of other companies. Direct and indirect ownership interests are as follows:
Company - PCH Enerbras Centrais Eltricas S.A. Energtica Serra da Prata S.A. Renova PCH LT DA (former Bela Vista) Consolidation Full Full at Enerbras Full % Inte re st 12/31/2011 12/31/2010 Dire ct Indire ct Dire ct Indire ct 100 100 99,99 99,99 99 % Inte re st 12/31/2011 12/31/2010 Dire ct Indire ct Dire ct Indire ct 99 100 99,99 99,99 99,99 99,99 99,99 100 99,99 99,99 99,99 99,99 99,99 99,99 99,99 99,99 99,99 100 100 100 100 100 100 100 100 100 100 99,99 99,99 99,99 99,99 99,99 99,99 99,99 99 99 100 100 99,99 99,99 99,99 99,99 99,99 100 99,99 99,99 99,99 99,99 99,99 99,99 99,99 99,99 99,99 100 99 99 99 99 99,99 99,99 100 99 99,99 100 100 100 100 100 100 100 99 99
(*) (**)
Company - Ge ne rating wind e ne rgy Nova Renova Energia S.A. (Holding) (former Serto) Bahia Elica Participaes S.A. (Holding) Centrais Elicas Pinda S.A. Centrais Elicas Igapor S.A. Centrais Elicas Licnio de Almeida S.A. Centrais Elicas Candiba S.A. Centrais Elicas Ilhus S.A. Salvador Elica Participaes S.A. Centrais Elicas Alvorada S.A. Centrais Elicas Paje do Vento S.A. Centrais Elicas Planaltina S.A. Centrais Elicas Rio Verde S.A. Centrais Elicas Guirap S.A. Centrais Elicas Nossa Senhora Conceio S.A. Centrais Elicas Guanambi S.A. Centrais Elicas Porto Seguro S.A. Centrais Elicas Serra do Salto S.A. Renova Elica Participaes S.A. Centrais Eltricas Borgo LT DA Centrais Eltricas Dourados LT DA Centrais Eltricas Maron LT DA Centrais Eltricas Serra do Espinhao LT DA Centrais Elicas Ametista Ltda Centrais Elicas Caetit LT DA Centrais Elicas Espigo LT DA Centrais Elicas Pelourinho LT DA (former Palmares) Centrais Elicas Piles LT DA (former Recncavo) Centrais Elicas So Salvador LT DA Centrais Eltricas Morro LT DA (former Morrinhos) Centrais Eltricas Serama LT DA Centrais Eltricas T anque LT DA Centrais Elicas dos Araas LT DA Centrais Elicas da Prata LT DA Centrais Elicas Ventos do Nordeste LT DA Centrais Eltricas Botuquara LT DA Centrais Eltricas Itaparica Ltda (**) (**) (**) (**) (**) (**) (**) (**) (**) (**) (**) (**) (**) (**) (**) (**) (**) (**) (**) (**) (**) (**) (**) (**) (**) (**) (**) (**) (**) (**) (**) (**) (**) (**) (**) (**) Full
Consolidation
Full at Nova Renova Full at Bahia Elica Full at Bahia Elica Full at Bahia Elica Full at Bahia Elica Full at Bahia Elica Full at Nova Renova Full at Salvador Elica Full at Salvador Elica Full at Salvador Elica Full at Salvador Elica Full at Salvador Elica Full at Salvador Elica Full at Salvador Elica Full at Salvador Elica Full at Salvador Elica Full at Nova Renova Full Full Full Full Full Full Full Full Full Full Full Full Full Full Full Full Full Full
(*) Authorization from ANEEL for a 30-year period (**) Companies in pre-operating phase;

Enerbras Centrais Eltricas S.A. ("Enerbras"), established on February 9, 2001 as a limited liability company and converted on May 10, 2006 into a private corporation has the exclusive purpose of investing in the capital of Energtica Serra da Prata S.A. ("Espra"), a corporation headquartered in the city of Salvador, Bahia State. The indirect subsidiary Espra was initially established as a consortium on October 30, 2003 and converted into a private corporation on September 17, 2004. The sole business purpose of Espra is to generate and sell the electric power of Serra da Prata Hydroelectric Complex by means of its small hydroelectric power plants (PCHs): (i) Cachoeira da Lixa, with an installed capacity of 14.8MW; (ii) Colino 2, with an installed capacity of 16.0MW; and (iii) Colino 1 with an installed capacity of 11.0MW, whose operating activities started in May, July and September 2008, respectively. On June 30, 2004, the electric power generated by Serra da Prata Hydroelectric Complex was subject to a purchase and sales agreement entered into with ELETROBRS - Centrais Eltricas Brasileiras S.A., under the Incentive Program for Alternative Electric Power Sources (PROINFA). Through these electric power purchase and sales agreements, Espra will sell its entire electric power production which can be negotiated in the long term of twenty (20) years. The authorization period of Espra is 30 years and can be extended for another 30 years. On December 14, 2009, the Company participated in Auction 03/2009-ANEEL, for the procurement of Reserve Energy generated exclusively by wind power, pursuant to Ordinances 147/2009 and 211/2009 of the Ministry of Mines and Energy (MME), and committed to sell average 127MW arising from 14 wind farms located in Bahia State. Such farms are already under implementation and shall commence their business operations by July 2012. On October 26, 2010, wind power plants Guanambi, Porto Seguro, Rio Verde, Alvorada, Guirap, Ilhus, Candiba, Serra do Salto, Igapor e 06 de dezembro de 2010 as SPES, Paje do Vento, Pinda, Planaltina, Licnio de Almeida and Nossa Senhora Conceio, respectively, entered into an energy purchase and sale agreement with the Power Commercialization Chamber (CCEE) for a 20-year supply term. On August 26, 2010, the Company participated in Auction 05/2010-ANEEL, for the procurement of Reserve Energy generated exclusively by wind power, pursuant to Ordinances of the Ministry of Mines and Energy (MME) 555/2010, 645/2010, and 483/2010 and those that may be changed, and is committed to sell average 78MW of installed capacity arising from six wind farms located in Bahia State. Such farms shall commence their business operations by September 2013. On May 26, 2011, wind power plants Da Prata, Dos Aras, Morro, Ventos do Nordeste and July 20, 2011, the wind power plants Serama and Tanque, respectively, entered into an energy purchase and sale agreement with the Power Commercialization Chamber (CCEE) for a 20-year supply term. On August 17, 2011, the Company participated in Auction 02/2011-ANEEL, for the procurement of Energia Nova (A-3), pursuant to Ordinances of the Ministry of Mines and Energy (MME) 021/2008, 175/2009, 113/2011 and those that may be changed, and is committed to sell average 103.6MW of installed capacity arising from nine wind farms located in Bahia State. Such farms shall commence their business operations by March 2014.
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Shared control
On July 8, 2011, RR Participaes S.A. (RR), in the capacity of controlling shareholder of Renova Energia S.A. Renova, and Light S.A., in the capacity of new investor, and Renova, in the capacity of investee, entered into an Investment Agreement with Renova, whereby Light Energia S.A. Light Energia entered in Renova's capital stock by subscribing new common shares to be issued by the latter, corresponding to a capital increase at Renova in the amount of R$360,000 (three hundred and sixty thousand Brazilian Reais), as per the following terms: The Investment was previously authorized by the National Agency of Electrical Energy ANEEL, and authorized by the lenders of Renova and its subsidiaries. Once all the suspensive conditions established in the Investment Agreement are met, as described below, the capital increase of Renova was carried out on August 19, 2011. By means of such Investment on August 19, 2011, Light Energia became the holder of 34.9% of common shares of Renova and 25.9% of its total capital. (As detailed in note 18 - Shareholders' equity).
Corporate Reorganization
On March 14, 2011, the Company authorized the capital increase of its subsidiary Nova Renova Energia S.A., a publicly-held company with head office in the City of Salvador, State of Bahia, at Avenida Paulo VI, n 1498, Bairro Pituba, CEP 41810-001, enrolled with CNPJ/MF under No. 12.041.313/0001-77 ("Nova Renova"), from the current R$100.00 (one hundred reais) to R$42,609 (forty-two thousand, six hundred and nine reais), total at book values of investments through the transfer of the total registered common shares, without par value, of its subsidiaries CE Alvorada, CE Candiba, CE Guanambi, CE Guirap, CE Igapor, CE Ilhus, CE Licnio de Almeida, CE Nossa Senhora Conceio, CE Paje do Vento, CE Pinda, CE Planaltina, CE Porto Seguro, CE Rio Verde and CE Serra do Salto, under the terms of the Appraisal Reports, through the issuance of 42,608,946 (fortytwo million, six hundred and eight thousand and nine hundred and forty-six) new registered common shares, with no par value of Nova Renova. This change was necessary due to the financing model and strategy adopted by the Company for its wind farms in connection with the Reserve Energy Auction - 2009 (LER). Accordingly, Nova Renova now holds the direct control of the aforementioned companies and will hold indirect control over these companies. On March 15, 2011, the subsidiary Nova Renova Energia S.A. as identified above authorized the capital increase of its subsidiary Salvador Elica Participaes S.A. from the current R$ 100.00 to R$ 24,332, total through the transfer of its shares held by its parent company Nova Renova S.A in the companies CE Alvorada, CE Guanambi, CE Guirap, CE Nossa Senhora Conceio, CE Paje do Vento, CE Planaltina, CE Porto Seguro, CE Rio Verde and CE Serra do Salto, through the issuance of 24,331,687 (twenty-four million, three hundred thirty-one thousand, six hundred eighty-seven) new common shares without par value of the Company.
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(In thousands of Brazilian Reais, unless otherwise indicated) On March 15, 2011, the subsidiary Nova Renova Energia S.A., as identified above authorized the capital increase of its subsidiary Bahia Elica Participaes S.A . from the current R$ 100.00 to R$ 18,277, total through the transfer of its shares held by its parent company Nova Renova S.A in the companies CE Candiba, CE Igapor, CE Ilhus, CE Licnio de Almeida, and CE Pinda, through the issuance of 18,277,259 (eighteen million, two hundred seventy-seven thousand, two hundred fifty-nine) new common shares without par value of the Company. Before and after organization chart: Before
Renova Energia S.A.
100% Enerbrs Centrais Eltricas S.A. 99% Energtica Serra da Prata S.A.
99% Nova Renova Energia S.A.
100% Salvador Elica Participaes S.A.
100% Bahia Elica Participaes S.A.
100% Renova Elica Participaes S.A.
99,99% Centrais Elicas Ametista Ltda 99% Centrais Eltricas Bela Vista Ltda 99% Centrais Eltricas Borgo Ltda 99% Centrais Eltricas Botuquara Ltda 99,99% Centrais Elicas Caetit Ltda 99% Centrais Eltricas Dourados Ltda 100% Centrais Elicas Espigo Ltda 99% Centrais Eltricas Itaparica Ltda 99% Centrais Eltricas Maron Ltda 100% Centrais Elicas Pelourinho Ltda 99,99% Centrais Elicas Piles Ltda 99% Centrais Eltricas Serra do Espinhao Ltda
100% Centrais Elicas Aras LTDA 100% Centrais Elicas da Prata LTDA 100% Centrais Eltricas Morro LTDA 100% Centrais Elicas Ventos do Nordeste LTDA 100% Centrais Eltricas Seraima LTDA 100% Centrais Eltricas Tanque LTDA
99,99% Centrais Elicas Alvorada S.A. 99,99% Centrais Elicas Guanambi S.A. 99,99% Centrais Elicas Igapor S.A. 99,99% Centrais Elicas Licnio de Almeida S.A. 99,99% Centrais Elicas Paje do Vento S.A. 99,99% Centrais Elicas Planaltina S.A. 99,99% Centrais Elicas Rio Verde S.A. 99,99% Centrais Elicas Candiba S.A. 99,99% Centrais Elicas Guirap S.A. 99,99% Centrais Elicas Ilhus S.A. 99,99% Centrais Elicas Nossa Senhora Conceio S.A. 99,99% Centrais Elicas Pinda S.A. 99,99%
100% Centrais Elicas So Salvador Ltda 99,99%
Centrais Elicas Porto Seguro S.A.
Centrais Elicas Serra dos Saltos S.A.
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(In thousands of Brazilian Reais, unless otherwise indicated) Current
Renova Energia S.A.
99% 100% Enerbrs Centrais Eltricas S.A. 99,99% Energtica Serra da Prata S.A. 100% Bahia Elica Participaes S.A. 100% Salvador Elica Participaes S.A. 100% Renova Elica Participaes S.A. 100% Centrais Elicas Pelourinho Ltda 100% Centrais Elicas Ametista Ltda Nova Renova Energia S.A.
99,99% Centrais Elicas Pinda S.A. 99,99% Centrais Elicas Igapor S.A. Centrais Elicas Paje do Vento S.A. Centrais Elicas Alvorada S.A.
99,99%
100% Centrais Eltricas Borgo Ltda 100%
99,99%
Centrais Eltricas Serra do Espinhao Ltda 100%
99,99% Centrais Elicas Licnio de Almeida S.A. Centrais Elicas Planaltina S.A. 99,99%
Centrais Elicas Caetit Ltda 100% Centrais Eltricas Dourados Ltda
99,99% Centrais Elicas Candiba S.A. Centrais Elicas Rio Verde S.A. 99,99% 100% Centrais Elicas Espigo Ltda 99,99% Centrais Elicas Ilhus S.A. Centrais Elicas Guirap S.A. 100% Centrais Elicas Piles Ltda Centrais Elicas Nossa Senhora da Conceio S.A. 99,99% 100% Centrais Eltricas Maron Ltda 99,99% 99,99% Centrais Eltricas Morro LTDA 99,99% Centrais Elicas Porto Seguro S.A. 99,99% Centrais Elicas Ventos do Nordeste LTDA 99,99% Centrais Elicas Serra do Salto S.A. 99,99% Centrais Eltricas Seraima LTDA 99,99%
Centrais Elicas Guanambi S.A.
99,99% Centrais Eltricas Tanque LTDA 99,99% Centrais Elicas Aras dos LTDA
99,99% Centrais Elicas da Prata LTDA
99% Renova PCH Ltda. 99% Centrais Eltricas Botuquara Ltda 99% Centrais Eltricas Itaparica Ltda
99,99% Centrais Elicas So Salvador Ltda
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2. Preparation basis
a. Statement of compliance (in relation to IFRS standards and CPC standards)
These financial statements include: the consolidated financial statements were prepared in accordance with the International Financial Reporting System (IFRS) issued by the International Accounting Standards Board (IASB) and also in accordance with the accounting practices adopted in Brazil (CPCs); the individual financial statements of the Parent company were prepared in accordance with CPCs.
The individual financial information of the Parent Company were prepared in accordance with CPCs, and, in the case of the Company, these practices differ from the IFRS applicable to separate financial statements due to the fact that investments, as, for IFRS purposes, they would be valued at cost or fair value. Pursuant to CPC 43 R1, the shareholders' equity and net income presented in the individual financial information, on December 31, 2011 and 2010, differ from the IFRS only in view of the following: (i) adoption of the equity method of accounting in the evaluation of investments in subsidiaries and (ii) existence of balance of deferred assets not yet amortized, also in these statements. The reconciliation of shareholders' equity and net income for the years ended December 31, 2011 and 2010 is presented in the note no. 4. The issue of individual and consolidated financial statements (which are expressed in thousands of Reais, rounded to the nearest value, except otherwise indicated) was authorized by the Board of Directors on February 29, 2012.
b. Measuring basis
The individual and consolidated financial statements were prepared using historical cost as the value base, except for the valuation of certain non-current assets such as financial instruments, which are measured at fair value.
c. Functional currency and presentation currency

These individual and consolidated financial statements are being presented in Brazilian Reais, functional currency of the Company. All financial information presented in Brazilian Reais has been rounded to the nearest value, except otherwise indicated.
d. Use of estimates and judgments

The preparation of individual and consolidated financial statements according to IFRS and CPC standards requires Management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported values of assets, liabilities, income and expenses. Actual results may differ from these estimates. Currently, the Company recognizes provision for contingencies for administrative lawsuits that are reviewed at least on a quarterly basis.
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3. Main accounting policies

The accounting policies described in detail below have been consistently applied to all the years presented in these individual and consolidated financial statements. a. Consolidation basis The accounting criteria adopted in their calculation were uniformly applied among the various companies of the Company. Description of the main consolidation procedures: elimination of intercompany asset and liability account balances; elimination of investments of parent company in the shareholders' equity of direct and indirect subsidiaries; elimination of intercompany income and expense balances and unearned income arising from intercompany transactions. Unrealized losses are eliminated in the same way as unrealized gains, but only to the extent that there is no evidence of impairment.
b. Foreign currency Transactions in foreign currency are translated into the respective functional currency of the Company and its subsidiaries at the exchange rates on the dates of the transactions. Monetary assets and liabilities denominated and calculated in foreign currencies on the date of presentation are reconverted into the functional currency at the exchange rate determined on that date. Exchange gain or loss in monetary items is the difference between the amortized cost of the functional currency at the beginning of the year, adjusted by interest and effective payments during the year, and the amortized cost in foreign currency at the exchange rate at the end of the presentation year. c. Financial instruments i. Non-derivative financial assets The Company initially recognizes the loans, receivables and deposits on the date that they are originated. All other financial assets (including assets designated at fair value through profit or loss) are initially recognized on the date of the negotiation under which the Company becomes a party to the contractual provisions of the instrument. Financial assets and liabilities are offset and the net amount reported in the balance sheet only when there is a legally enforceable right to set off and there is intention to settle on a net basis, or to realize the asset and settle the liability simultaneously. The Company fails to recognize a financial asset when the contractual rights to the cash flows of the asset expire, or when they transfer the rights to reception of the contractual cash flows on a financial asset in a transaction in
15

(In thousands of Brazilian Reais, unless otherwise indicated) which essentially all the risks and benefits of ownership of the financial asset are transferred. Any interest in transferred financial assets that is created or retained is recognized as a separate asset or liability. The Company classifies non-derivative financial assets in the following categories: financial assets recorded at fair value through profit or loss, investments held to maturity, loans and receivables and financial assets available for sale. Financial assets held to maturity If the Company has the intention and capacity to hold its debt instruments to maturity, these are classified as held to maturity. Investments held to maturity are measured by the amortized cost using the effective interest rate method, deducting any reductions in their recoverable value. Currently, the Company records escrow deposits and restricted deposits under assets held to maturity. Loans and receivables Loans and receivables are financial assets with fixed or determinable payments, but not quoted on any active market. Such assets are initially recognized at fair value plus any transaction costs directly assignable. After their initial recognition, loans and receivables are measured at amortized cost using the effective interest rate method, reduced by any impairment losses. Loans and receivables comprise trade accounts receivable, receivables from suppliers and related party transactions. Assets at fair value through income (loss) Cash and cash equivalents Cash and cash equivalents comprise balances of cash and financial investments with original maturities of three months or less as of the contracting date, which are subject to an insignificant risk of change in value and are used to manage short-term obligations. ii. Non-derivative financial liabilities The Company recognizes debt securities issued and subordinated liabilities on the date that they are originated. All other financial liabilities (including liabilities designated at fair value through profit or loss) are recognized initially on the negotiation date on which the Company becomes a party to the contractual provisions of the instrument. The Company writes off a financial liability when its contractual obligations are discharged or cancelled or expire. The Company classifies non-derivative financial liabilities in the category of other financial liabilities. Such financial liabilities are initially recognized at fair value plus any transaction costs directly assignable. After their initial recognition, these financial liabilities are measured at amortized cost using the effective interest rate method.
16

(In thousands of Brazilian Reais, unless otherwise indicated) The Company has the following non-derivative financial liabilities: loans, financing and suppliers. iii. Capital Common shares Common shares are classified as shareholders' equity. Additional costs directly attributable to the issue of shares are recognized as a deduction from shareholders' equity, net of any tax effects. Preferred shares Preferred stock has restrict voting rights and takes priority in the settlement of their share of capital. Mandatory minimum dividends are established by the by-laws and when reserved in the end of the year, they are recognized as liabilities.
d. Property, plant and equipment i. Recognition and measurement Property, plant and equipment items are stated at historical acquisition or construction cost, net of accumulated depreciation and impairment losses, when required. The cost of the assets built by the entity includes the cost of materials and direct labor, any other costs to bring assets to the site and the necessary conditions for them to operate as intended by management, disassembly costs and restoration of the location where the assets are located, when applicable, and the costs and interest of loans and financing from third parties capitalized during the construction stage, less financial revenue from third party funds that have not been invested, when applicable. ii. Depreciation Fixed assets items are depreciated using the straight-line method in the profit or loss of the year based on the estimated economic useful life of each component. Land is not depreciated. Property, plant and equipment items are depreciated as from the date in which they are installed and become available for use; assets that are internally built are depreciated as from the day in which construction is completed and the asset becomes available for use. The useful lives estimated for the current and comparative year are shown in the Note 14. Our depreciation rates conform to ANEEL resolutions 02/1997 and 44/1999. The depreciation methods and residual values are reviewed at every year closing and any adjustments are recognized as changes in accounting estimates, and useful lives are those established by ANEEL.
17

e. Leases The Company has only operating leases and they are not recognized in the balance sheet. Payments for operating leasing are charged to income on the straight-line basis over the lease period. f. Environmental Licenses
Preliminary environmental licenses and installation permits, obtained in the enterprise planning and installation stage, consecutively, are unitized and recognized as cost of the small hydroelectric power plants and wind farms. g. Employee benefits Short-term employee benefits Obligations for short-term employee benefits are measured on a non-discounted basis and incurred as expenses as the related service is rendered. h. Provisions A provision is set up when the Company has a legal or constructive obligation as a result of a past event, which can be reliably estimated, and it is probable that an outflow of funds will be required to settle the obligation. The financial costs incurred are recorded in the statements of income. i. Results Income and expenses are recognized on the accruals basis. The revenue from electric power sales is recognized in the income statements upon measurement and supply: Income is not recognized if there are significant uncertainties as to its realization. Financial revenues comprise income from interest on cash investments and loans with related parties. Interest income is recognized in income under the effective interest method. Financial expenses include basically loan interest expenses and financing. Borrowing costs which are not directly attributable to the acquisition, construction, or production of a qualifying asset are recognized for in profit or loss using the effective interest rate method. j. Income and social contribution taxes
For the Company, the income and social contribution taxes of the current year were calculated based on the rates of 15% plus a surcharge of 10% on taxable income in excess of R$ 240 for income tax and 9% on taxable income for social contribution on net income, and take into account tax loss carryforward and negative basis of social contribution, limited to 30% of taxable income. The Company owns companies that opted for the deemed income system, according to calculations shown in note 22. The income tax and social contribution expense comprises current income tax. Current tax is recognized in income (loss). Current taxes are the taxes payable or receivable on the taxable income or loss for the year, at tax rates enacted or substantively enacted on the date of presentation of the financial statements, and any adjustments to taxes payable in relation to prior years.
18

k. Income per share The basic earnings per share are calculated based on the result for the financial year attributable to the Company's controlling shareholders and the weighted average of outstanding common and preferred shares in the respective period. The diluted earnings per share are calculated based on the mentioned average of outstanding shares, adjusted by instruments that can potentially be converted into shares, diluted, in the periods presented.
l. Segment information The results that are reported to management include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. The unallocated items include mostly the corporate assets, office expenses and income and social contribution tax assets and liabilities.
m. Statements of added value The Company prepared individual and consolidated statements of added value in accordance with the rules of technical pronouncement CPC 09 - Statement of Added Value, which are presented as an integral part of the financial statements under BRGAAP applicable to publicly-held companies, whereas under IFRS they represent additional financial information.
n. New standards and interpretations not yet adopted Several IFRS standards and standard amendments, and interpretations issued by IASB have not yet come into effect for the year ended December 31, 2011, as follows: New Standards, amendments to Standards and interpretations have effective dates as from annual periods started as of January 01, 2013, and have not been applied to the preparation of these financial statements. None of these new Standards are expected to have a material effect on the Company's financial statements except for IFRS 9 Financial Instruments that may change classification and measurement of financial assets maintained by the Company. The Company does not expect to adopt this Standard in advance and the impact of its adoptions has not been measured yet. The CPC (Accounting Pronouncements Committee) has not yet issued pronouncements equivalent to the aforementioned IFRS, although that is expected to be done before the date when they are required to come into effect. The advanced adoption of IFRS pronouncements is conditioned to the prior approval by a regulatory act by the Brazilian Securities Commission ("CVM").
19

4. Reconciliation of the consolidated financial statements (IFRS) and the parent company's financial statements (CPC)
The reconciliation of the shareholders' equity on December 31, 2011 and 2010 as compared to the results for the years ended December 31, 2011 and 2010 are shown as follows:
Shareholders' equity 12/31/2011 12/31/2010 Parent company - CPC Write-off of deferred assets and reversals of the respective amortization of income Consolidated (IFRS) 649.131 292.353 Net income for the year 12/31/2011 12/31/2010 1.060 (32)
(2.257) 646.874
(3.769) 288.584
1.512 2.572
1.530 1.498
Description of the differences between accounting practices and respective adjustments: The principal difference between the consolidated financial statement (IFRS) and the parent company's financial statement (CPC) is described below: Deferred assets: For purposes of the consolidated financial statements (IFRS), the Company's management recorded against retained earnings on the transition date of January 1, 2009 the balance formerly recorded as deferred assets, whereas it was kept in the individual (CPC) position of the indirect subsidiary Espra, since for purposes of these financial statements, the Management opted to keep this balance up to its total realization through amortization.
5. Operating segments
Three reportable segments are the Company's strategic business units. The strategic business units offer different renewable energy sources and are managed separately, as they require different technologies, developments and operation stages. The Company's reportable segment operations can be detailed as follows: The difference between segments and the consolidated company refers to administrative activities developed by the Holding: a) PCH (Renewable Energy Development and Generation using hydric sources). This segment includes the development of Inventory and Basic Projects and Energy generation projects for associates Espra and Enerbras. This segment is already in the operating stage and comparison between 2011 and 2010 is possible. b) Wind plants (Renewable Energy Implementation and Generation using wind sources). This segment includes the implementation and operation of bid winning energy projects by the Company. This segment is implementing plants related to Auctions LER 2009, LER 2010 and LEN 2011; operation and energy generation by first plants is expected to begin as of July 2012.
20

c) New Technologies and Prospection (Development of new projects). This segment includes the prospection and development of new wind farm projects and the development of new technologies for energy generation using renewable sources. This segment started in 2011.
PCH Net revenue Non-manageable expenses Gross Margin Manageable expenses Depreciation EBITDA Financial income (loss) Deferred income and social contribution taxes Net income T otal assets T otal liabilities 36.553 (1.155) 35.398 (5.397) (5.674) 30.001 (8.096) (2.171) 14.060 260.653 124.921 Wind farms (1.908) (1.908) 830 (502) (1.580) 1.063.417 689.804 2011 New technologies (988) (988) 2.527 Adm (21.159) (195) (21.159) 12.434 (8.920) 252.904 117.902 Consolidated 36.553 (1.155) 35.398 (28.464) (6.857) 6.934 5.168 (2.673) 2.572 1.579.501 932.627 PCH 35.486 (1.219) 34.267 (4.789) (5.675) 29.478 (10.464) (1.712) 11.627 249.667 133.626 Wind farms (122) (122) (4) (126) 56.079 6.636 2010 New technologies 2.745 Adm (13.382) (196) (13.382) 3.575 (10.003) 123.047 2.692 Consolidated 35.486 (1.219) 34.267 (18.293) (5.871) 15.974 (6.893) (1.712) 1.498 431.538 142.954
*Depreciation adjusted in accordance with IFRS for the PCH Segment.
6. Cash and cash equivalents

Parent company 12/31/2011 12/31/2010 Cash Banks checking account Interest earnings bank deposits Cash and cash equivalents in the statement of cash flows 58 281 254.120 254.459 1 126 7.124 7.251 Consolidated 12/31/2011 12/31/2010 62 69.638 320.146 389.846 5 2.093 16.471 18.569
Highly liquid short-term interest earning bank deposits are promptly convertible into a known sum of cash and subject to an insignificant risk of change of value. These financial investments refer substantially to fixed income funds of the Interbank Deposit Certificate (CDI), remunerated rates ranging from 98.5% to 102.75% from the CDI.
7. Trade accounts receivable (Consolidated)

Current
Consolidated 12/31/2011 12/31/2010 5.152 3.918
Trade accounts receivable
Corresponds to amounts receivable from the sale of energy generated by the indirect subsidiary Espra, relating to the PCHs Cachoeira da Lixa, Colino 1 and Colino 2. The balance as of December 31, 2011 comprise current
21

(In thousands of Brazilian Reais, unless otherwise indicated) amounts exclusively related to our agreement with ELETROBRAS, for which no losses are expected upon realization.
8. Current tax assets

Current assets
Parent company 12/31/2011 IRRF on financial investment COFINS recoverable Social contribution tax recoverable PIS recoverable IRRF recoverable ISS recoverable Negative balance of Corporate Income tax Total 1.297 1 9 1.307 12/31/2010 1.064 54 1.118 Consolidated 12/31/2011 1.344 95 44 20 9 1.512 12/31/2010 1.064 94 41 20 1 54 1.274
9. Receivables from suppliers

Parent company 12/31/2011 12/31/2010 Receivables from suppliers Advances - imports Total 4.701 4.701 116.091 116.091 Consolidated 12/31/2011 12/31/2010 13.479 13.479 120.533 526 121.059
On May 27, 2011, the indirect subsidiaries (SPE's) that are building the 14 wind farms regarding LER 2009 projects entered into a supply and O&M agreement with GE. On the same date, Renova Energia S.A. increased the capital of Subsidiary Nova Renova S.A., which in turn, increased the capital in its subsidiaries using credits in the amount of R$ 117.000, which were used to settle suppliers' invoices issued on May 27, 2011. As of December 31, 2011, the balance of R$13,479 presented in consolidated financial statements is comprised of advances for the purchase of wind towers and credit lines from suppliers of aerogenerators.
22

10. Related party transactions

Parent company Assets Liabilities Income (loss) for the period ended 12/31/2011 10 (657) 72 22 502 34 78 98 88 85 72 1 1 1 1 1 1 1 1 1 413 Consolidated Income (loss) for the period ended 12/31/2011 10 10
12/31/2011 RR Enerbras Espra CE Paje do Vento Renova PCH Nova Renova Energia Bahia Elica Salvador Elica CE Alvorada CE Planaltina CE Rio Verde CE Guirap CE N S Conceio CE Guanambi Renova Elica CE Serra do Espinhao CE Ametista CE Borgo CE Botuquara CE Caetit CE Dourados CE Espigo CE Itaparica CE Maron CE Pelourinho CE Piles CE So Salvador T otal 244 10 7 8 8.046 15.695 7 8 163 151 144 6 175 159 175 6 153 144 172 25.473
12/31/2010 164 2 3 3 3 3 2 4 2 2 4 2 4 2 2 2 4 4 212
Maturity Beginning End 05/27/2009 12/28/2013 02/01/2008 12/28/2013 05/27/2011 05/27/2012 07/01//2011 03/27/2012 07/01//2011 03/27/2012 07/01//2011 03/27/2012 05/27/2011 05/27/2011 05/27/2011 05/27/2012 05/27/2011 05/27/2012 05/27/2011 05/27/2012 05/27/2011 05/27/2012 05/27/2011 05/27/2012 05/27/2011 05/27/2012 07/01//2011 03/27/2012 07/01//2011 03/27/2012 07/01//2011 03/27/2012 07/01//2011 03/27/2012 07/01//2011 03/27/2012 07/01//2011 03/27/2012 07/01//2011 03/27/2012 07/01//2011 03/27/2012 07/01//2011 03/27/2012 07/01//2011 03/27/2012 07/01//2011 03/27/2012 07/01//2011 03/27/2012 07/01//2011 03/27/2012 -
12/31/2011 12.087 12.087
12/31/2010 1.577 1.577
Maturity Beginning End 08/26/2009 12/28/2013 -
The main balances of assets and liabilities on December 31, 2011, as well as the transactions that influenced income for the year, relating to operations with related parties, result from transactions of the Company with its parent company, subsidiaries and other related parties.
a. Accounts receivable/payable
Accounts receivable - Correspond to a loan from parent RR Participaes S.A. and other associates and subsidiaries, as described in the chart. These loans were raised to supply these companies' cash requirements. Accounts payable - loan from associate Espra was raised to cover cash requirements. For both balances (receivable and payable), the amount due is subject to adjustment by the Long-term Interest Rate (TJLP) plus interest of 0.5% per year, which will not be capitalized. The request for authorization to prepare loan contracts was registered with ANEEL in 2008.
b. Management remuneration
The remuneration of Management's key personnel in the years ended December 31, 2011 and 2010, as required by CVM Resolution 560, of December 11, 2008, reached the amount of R$ 2,015 and R$ 2,468, respectively, amounts solely comprised of short-term benefits.
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(In thousands of Brazilian Reais, unless otherwise indicated) Remuneration of the Board of Directors and Statutory Board paid by the Company in the accumulated period.
Parent company 2011 Board of Directors Number of members Annual fixed remuneration (in R$) Salary or director compensation Direct and indirect benefits Remuneration for participation in committees Variable compensation (in R$) Bonus Post-employment benefits T otal amount of compensation per body 2 120 96 n/a 24 n/a n/a n/a 120 Board of Executive O fficers 7 1.895 1.895 n/a n/a n/a n/a n/a 1.895
Total 9 2.015 1.991 n/a 24 n/a n/a n/a 2.015
Average monthly compensation of the Board of Directors and Statutory Board.

Parent company Board of Board of Executive Directors O fficers 2 8 4 6 7 35 23 29
2011
Number of members Amount of the highest individual pay (in R$) Amount of the lowest individual pay (in R$) Average amount of individual pay (in R$)
11.
Pledges and restricted deposits

Parent company 12/31/2011 12/31/2010 Consolidated 12/31/2011 12/31/2010 40 11.875 11.915 59 12.019 12.078
Current Non-current
40 449 489
59 444 503
The balance of R$11,875 on December 31, 2011, presented in non-current assets refers to the money market investment in a fixed income fund denominated "reserve account liquidity fund" at Banco do Nordeste do Brasil
24

(In thousands of Brazilian Reais, unless otherwise indicated) S.A., the objective of which is to guarantee the financing obtained for the construction of the PCHs of the subsidiary Espra. This investment cannot be used until the final term of the financing in 2026. It reaches 97% of the variation of the Certificate of Interbank Deposit (CDI), the balances of which at the end of the year are already stated at market value. The remaining balance refers to deposits related to guarantees of inventory studies, whereas these deposits are made in favor of ANEEL - Agncia Nacional de Energia Eltrica (National Agency of Electrical Energy).
12.
Goodwill in the takeover

Goodwill (-) Provision for goodwill at the time of the merger Parent company 12/31/2011 12/31/2010 119.272 119.272 (119.272) (119.272)
On January 15, 2010, one of the Company's stockholders, Hourtin Holdings S.A. ("Hourtin"), was merged into the Company. As a result of this merger, the Company recognized a goodwill of R$ 119,272. This goodwill initially recognized in Hourtin was due to the acquisition of an ownership interest in the Company's capital. This goodwill is based on expected future earnings of Energtica Serra da Prata ("Espra") and other special purpose entities that hold projects through Renova. Despite of and as indicated in the Appraisal Report prepared to evidence goodwill economic basis, experts indicated that, as Renova is a pure holding and these earnings derive from direct and indirect investments, goodwill should be attributed to these investments' earnings. The assets that were transferred to the Company at the time of the transaction supported the goodwill amount, which was recorded as a contra entry to a capital reserve. Later considering the reverse merger occurred in early 2010, goodwill was fully recognized in the merging company and, for tax purposes, the Company records goodwill from this merger in Part B of Lalur.
13. Investments
The Company did record equity in the income of its subsidiary companies in the amount of R$ 10,968 at December 31, 2011 and R$9,971 at December 31, 2010.
Total Assets 224.499 50.716 275.215 Total liabilities 133.626 6.636 140.262 Shareholders' equity 90.873 44.080 134.953 Income ( loss) Equity in net income of subsidiaries 10.097 (126) 9.971
Interest % 40.543 Enerbras Centrais Eltricas S.A. Wind farms - SPEs 100% 100%
10.097 (126) 9.971
40.908 Enerbras Centrais Eltricas S.A. Wind farms - SPEs
100% 100%
231.740 1.047.694 1.279.434
124.921 689.804 814.725
106.819 357.890 464.709
12.548 (1.580) 10.968
12.548 (1.580) 10.968
25

Changes in the investment

Balances 12/31/2010 Enerbras Centrais Eltricas S.A. Wind farms - SPEs Total 90.873 44.080 134.953 Capital increase Adv. for future capital increase Dividends Equity in net income payable of subsidiaries (11.921) (11.921) 12.548 (1.580) 10.968 Balances 12/31/2011 106.819 357.890 464.709
15.319 312.217 327.536
3.173 3.173
The shareholders' equity of Enerbras as of December 31, 2011 is R$ 106,819. The net income for the period is R$12,548 and capital is R$101,956, represented by 5,170,101 shares, 4,337,536 thousand of which are common shares, 832,562 preferred class B shares and 3 preferred class A shares. In addition to Enerbras, the Company has holdings in another 23 Companies, with 20 in direct interest and 3 subholding with indirect interest (see note 1). These Companies are in the pre-operational phase and their business purpose consists of developing studies, designing, implementing, operating and exploring electric power plants using a wind energy source and to hold interests in other companies, as the case. The statement of investments for companies with direct interest is as follows:
C ompany Enerbtras Centrais Eltricas S.A. Centrais Elicas Alvorada S.A. Centrais Elicas Candiba S.A. Centrais Elicas Guanambi S.A. Centrais Elicas Guirap S.A. Centrais Elicas Licino de Almeida S.A. Centrais Elicas Pinda S.A. Centrais Elicas Rio Verde S.A. Centrais Elicas Serra do Salto S.A. Centrais Elicas Igapor S.A. Centrais Elicas Ilhus S.A. Centrais Elicas N. S. Conceio S.A. Centrais Elicas Paje do Vento S.A. Centrais Elicas Planaltina S.A. Centrais Elicas Porto Seguro S.A. Centrais Elicas Ametista LT DA Centrais Elicas dos Araas LT DA Centrais Elicas Caetit LT DA Centrais Elicas Espigo LT DA Centrais Elicas Piles LT DA (former Recncavo) Centrais Elicas So Salvador LT DA Centrais Elicas Ventos do Nordeste LT DA Centrais Elicas da Prata LT DA Centrais Eltricas T anque LT DA Centrais Eltricas Serra do Espinhao LT DA Centrais Eltricas Serama LT DA Centrais Elicas Pelourinho LT DA (former Palmares) Centrais Eltricas Morro LT DA Centrais Eltricas Maron LT DA Centrais Eltricas Itaparica LT DA Centrais Eltricas Dourados LT DA Centrais Eltricas Botuquara LT DA Centrais Eltricas Borgo LT DA RENOVA PCH LT DA (former Bela Vista) Nova Renova Energia S.A. Total Inve stme nt on 12/31/2010 90.873 1.292 2.359 2.566 3.520 4.220 4.087 3.630 2.265 5.054 2.545 3.470 3.178 3.349 1.047 214 214 214 214 214 214 214 134.953 Addition to the inve stme nt 15.319 (1.292) (2.359) (2.566) (3.520) (4.220) (4.087) (3.630) (2.265) (5.054) (2.545) (3.470) (3.178) (3.349) (1.047) 1.885 1.393 1.544 1.644 1.883 1.869 344.581 327.536 Adv. for future capital incre ase 273 Divide nds payable (11.921) Ne t Income (loss) for the pe riod 12.548 (4) (1) (3) (4) (4) (2) (3) (6) (7) (7) (6) (7) (5) (7) (5) (7) (6) (7) (5) (1.484) 10.968 Inve stme nt on 12/31/2011 106.819 210 2.371 211 210 210 212 2.033 1.773 1.878 (7) 2.118 (7) 2.118 (7) (5) (7) (6) (7) (5) 344.597 464.709
429 235 241 241 254
1.500 3.173
(11.921)
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(In thousands of Brazilian Reais, unless otherwise indicated) The composition of investments made in subholding Nova Renova Energia S.A. that controls Renova Elica, Salvador Elica and Bahia Elica is as follows:
C ompan y In ve stme n t on 12/31/2010 Addi ti on to th e i n ve stme n t Adv. for fu tu re capi tal i n cre ase Ne t In come (l oss) for th e pe ri od In ve stme n t on 12/31/2011
Nova Renova Energia S.A.
(32)
(32)
Renova Elica P art icipaes S.A.
(5)
(5)
Bahia Elica P art icipaes S.A. Cent rais Elicas Igapor S.A. Cent rais Elicas Lcinio de Almeida S.A. Cent rais Elicas P inda S.A. Cent rais Elicas Ilhus S.A. Cent rais Elicas Candiba S.A.
40.995 32.694 32.695 18.395 16.093
1.500 -
(46) (60) (102) (89) (52) (54)
(46) 42.435 32.592 32.606 18.343 16.039
Salvador Elica P art icipaes S.A. Cent rais Elicas Alvorada S.A. Cent rais Elicas Guanambi S.A. Cent rais Elicas Guirap S.A. Cent rais Elicas Rio Verde S.A. Cent rais Elicas Serra do Salt o S.A. Cent rais Elicas N. S. Conceio S.A. Cent rais Elicas P aje do Vent o S.A. Cent rais Elicas P lanalt ina S.A. Cent rais Elicas P ort o Seguro S.A. TO TAL
8.422 20.977 29.028 30.640 21.826 29.030 25.810 27.420 10.556 344.581
1.500
41 (94) (193) (241) 166 (51) (124) (242) (250) (56) (1.484)
41 8.328 20.784 28.787 30.806 21.775 28.906 25.568 27.170 10.500 344.597
On December 28, 2011, the Company entered into agreements for future capital increase at the amount of R$1,500 with Centrais Elicas Igapor S.A.
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14. Fixed assets 14.1 Parent company
12/31/2011 Annual depreciation rates % Fixed assets in service Generation Measurement towers Administration Machinery and equipment Improvements Furniture and fixtures Software Data processing equipment Vehicles T otal fixed assets in service Constructions in progress Generation T o pay out Studies and projects Land Machinery and equipment T otal constructions in progress T otal fixed assets
12/31/2010
Historical cost
Accumulated depreciation
Net amount
Historical cost
Accumulated depreciation
Net amount
20%
3.515 3.515 55 2.156 2.099 1.006 654 6 5.976 9.491
(988) (988) (6) (60) (192) (108) (157) (523) (1.511)
2.527 2.527 49 2.096 1.907 898 497 6 5.453 7.980
512 1.236 669 564 337 6 3.324 3.324
(136) (69) (89) (103) (397) (397)
376 1.167 580 564 234 6 2.927 2.927
10% 10% 10% 20% 20% 20%
15.723 26.404 2.509 44.636 54.127
(1.511)
15.723 26.404 2.509 44.636 52.616
5.363 22.159 3.009 2.745 33.276 36.600
(397)
5.363 22.159 3.009 2.745 33.276 36.203
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14.2 Movements record movements of property, plant and equipment (Parent company)
12/31/2010 Writeoffs Capital Subscription SPEs Wind Farms Reclassifications between accounts Depreciation 12/31/2011
Additions
Fixed assets in service Generation Measurement towers Administration Machinery and equipment Improvements Furniture and fixtures Software Data processing equipment Vehicles T otal fixed assets in service Constructions in progress Generation T o pay out Studies and projects Land Machinery and equipment T otal constructions in progress T otal of Property, plant and equipment
232
3.121
(826)
2.527
376 1.167 580 564 234 6 2.927 2.927
33 1.787 1.468 442 365 4.095 4.327
(803) (33) (836) (836)
(356) (20) (376) 2.745
(4) (55) (108) (108) (82) (357) (1.183)
49 2.096 1.907 898 497 6 5.453 7.980
5.363 22.159 3.009 2.745 33.276 36.203
37.315 4.245 606 42.166 46.493
(836)
(28.061) (28.061) (28.061)
1.106 (1.106) (2.745) (2.745) -
(1.183)
15.723 26.404 2.509 44.636 52.616
31/12/2010
Adies
Baixas
Integralizao Capital SPEs Elicas
Reclassificaes entre rubricas
Depreciao
31/12/2011
Imobilizado em servio Gerao T orres de Medio Administrao Mquinas e equipamentos Benfeitorias Mveis e utenslios Softwares Equipamento de informtica Veculos T otal do imobilizado em servio Imobilizado em curso Gerao A ratear Estudos e projetos T errenos Mquinas e equipamentos T otal do imobilizado em curso T otal do imobilizado
232
3.121
(826)
2.527
376 1.167 580 564 234 6 2.927 2.927
33 1.787 1.468 442 365 4.095 4.327
(803) (33) (836) (836)
(356) (20) (376) 2.745
(4) (56) (107) (108) (82) (357) (1.183)
49 2.095 1.908 898 497 6 5.453 7.980
5.363 22.159 3.009 2.745 33.276 36.203
37.315 4.245 606 42.166 46.493
(836)
(28.061) (28.061) (28.061)
1.106 (1.106) (2.745) (2.745) -
(1.183)
15.723 26.404 2.509 44.636 52.616
29

14.3
Consolidated
12/31/2011 Annual depreciation rates % Historical cost Accumulated depreciation Net amount Historical cost 12/31/2010 Accumulated depreciation Net amount
Fixed assets in service Generation Land Reservoirs, dams and ducts Buildings, civil works and improvements Machinery and equipment Furniture and fixtures Data processing equipment Measurement towers Other Administration Machinery and equipment Improvements Furniture and fixtures Software Data processing equipment Vehicles T otal fixed assets in service
3% 3% 4% 10% 20% 20% 20%
595 95.807 46.110 65.009 89 232 3.516 10 211.368 55 2.156 2.139 1.006 672 6 6.034 217.402
(7.818) (5.308) (6.262) (26) (111) (988) (5) (20.518) (6) (60) (205) (108) (168) (547) (21.065)
595 87.989 40.802 58.747 63 121 2.528 5 190.850 49 2.096 1.934 898 504 6 5.487 196.337
595 95.797 45.500 64.995 80 228 10 207.205 512 1.236 709 564 355 6 3.382 210.587
(5.560) (3.595) (4.622) (18) (65) (3) (13.863) (136) (69) (99) (110) (414) (14.277)
595 90.237 41.905 60.373 62 163 7 193.342 376 1.167 610 564 245 6 2.968 196.310
10% 10% 10% 20% 20% 20%
Constructions in progress Generation T o pay out Studies and projects Land Machinery and equipment Buildings, civil works and improvements Furniture and fixtures Measurement towers Aerogenerators Substation equipment Advances to suppliers T otal constructions in progress T otal fixed assets
120.979 26.404 5.725 77.017 3 3.228 663.066 5.204 57.494 959.120 1.176.522
(21.065)
120.979 26.404 5.725 77.017 3 3.228 663.066 5.204 57.494 959.120 1.155.457
34.067 22.159 3.009 2.745 15.410 77.390 287.977
(14.277)
34.067 22.159 3.009 2.745 15.410 77.390 273.700
30

14.4 Movement of the Property, plant and equipment (Consolidated)

12/31/2010 Fixed assets in service Generation Land Reservoirs, dams and ducts Buildings, civil works and improvements Machinery and equipment Furniture and fixtures Data processing equipment Measurement towers Other Administration Machinery and equipment Improvements Furniture and fixtures Software Data processing equipment Vehicles T otal fixed assets in service Constructions in progress Generation T o pay out Studies and projects Land Machinery and equipment Buildings, civil works and improvements Furniture and fixtures Measurement towers Aerogenerators Substation equipment Advances to suppliers T otal constructions in progress T otal of Property, plant and equipment Additions Writeoffs Capital Subscription SPEs Wind Farms Reclassifications between accounts Depreciation 12/31/2011
595 90.237 41.905 60.373 62 163 7 193.342 376 1.167 610 564 245 6 2.968 196.310
10 610 14 9 4 233 880 33 1.787 1.468 442 365 4.095 4.975
(803) (33) (836) (836)
3.121 3.121 (356) (20) (376) 2.745
(2.258) (1.713) (1.640) (8) (46) (826) (2) (6.493) (4) (55) (111) (108) (86) (364) (6.857)
595 87.989 40.802 58.747 63 121 2.528 5 190.850 49 2.096 1.934 898 504 6 5.487 196.337
34.067 22.159 3.009 2.745 15.410 77.390 273.700
125.809 4.245 4.044 64.645 3 1.940 652.007 4.934 54.909 912.536 917.511
(836)
(28.061) (28.061) (28.061)
(10.836) (1.328) (2.745) 12.372 1.288 11.059 270 (12.825) (2.745) -
(6.857)
120.979 26.404 5.725 77.017 3 3.228 663.066 5.204 57.494 959.120 1.155.457
31

(In thousands of Brazilian Reais, unless otherwise indicated) Property, plant and equipment in use PP&E in use are divided into two groups: i. Generation - Basically comprised of assets of the Serra da Prata Hydroelectric Complex and the PCHs Cachoeira da Lixa, Colino 1 and Colino 2 Management - Comprised of assets used in Espra's and the parent company's head office, and by equipment such as wind towers used in wind measurement tests for the development of wind projects.
ii.
In November 2008, pursuant to ANEEL Normative Resolution no. 190/2005, the unitizing procedure was concluded with regard to the fixed assets commissioned at the Serra da Prata hydroelectric compound. The unitized value is composed of the amount of R$11,886 referring to interest capitalized in the construction period in 2005 and 2006. According to articles 63 and 64 of Decree 41019/1957, the assets and facilities utilized in the generation, transmission, distribution and trade of electric power are tied to these services, and cannot be removed, divested, assigned or mortgaged without the prior and express authorization of the regulatory body. ANEEL, through official letter 459/2001- SFF/ANEEL, authorized the offering of emergent rights, assets and facilities of the concession in guarantee of the performance of the obligations assumed by the Company in the sphere of the direct financing, transfer and issue of debentures. (note 14.4). Depreciation of assets at the Serra da Prata hydroelectric compound was calculated according to the Electricity Accounting and Public Service Manual, according to the Ordinance 815/1994, issued by DNAEE (National Department of Waters and Electric Energy), and ReN ANEEL no. 240/2006. Fixed assets in progress Property, plant and equipment in progress record expenses incurred with hydric projects divided into inventories and basic projects that have already been authorized by ANEEL, and wind projects that won the 2009 and 2010 Reserve Auction and that are being built by the Company's subsidiaries. Investments made include the purchase of aerogenerators, civil construction work and several expenses incurred for the construction of our wind farms that, after completed, are unitized before operation starts. The amount of R$27,451 was recorded under amounts to be apportioned and refers to interest on loans capitalized up to December 31, 2011. For the comparative balance as of December 31, 2010, we had not raised loans for that purpose. Caption Amounts to be apportioned includes, in addition to interest on loans, costs such as salaries of implementation teams and owner investments in engineering, environment and construction work insurance. As of December 31, 2011, consolidated balance of Advances to suppliers is R$57,494 and refers to advances on contracts for the supply of Substation Equipment entered into with ABB Ltda, which totals R$43,325, to advances for the civil construction contract entered into with consortium Queiroz Galvo and Mercurius, which totals R$13,889, and to advances for imports, in the amount of R$280. Civil construction and plants substations are expected to be completed in July 2012.
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Administration As of September 30, 2011, as a result of the change in the Company's So Paulo head office address, improvements to our prior head office, amounting to R$836, (referring to assets) and R$69 (referring to accumulated depreciation) were written-off from our assets.
15. Suppliers
Parent company 12/31/2011 Suppliers 2.059 12/31/2010 5.989 Consolidated 12/31/2011 19.566 12/31/2010 8.100
The Parents suppliers are mainly service providers and suppliers of materials for the projects under development. Consolidated financial statements include mainly amounts payable to suppliers of equipment and construction material for wind farms.
16. Loans and financing

Parent company 31/12/2011 Charges Debt cost Local currency Promissory notes (Banco Votorantim) - Renova Energia S.A. BNDES - CEOL Rio Verde S.A. BNDES - CEOL Porto Seguro S.A. BNDES - CEOL Serra do Salto S.A. BNDES - CEOL Planaltina S.A. BNDES - CEOL Paje do Vento S.A. BNDES - CEOL N. S. Conceio S.A. BNDES - CEOL Guirap S.A. BNDES - CEOL Guanambi S.A. BNDES - CEOL Alvorada S.A. BNDES - CEOL Candiba S.A. BNDES - CEOL Licnio de Almeida S.A. BNDES - CEOL Igapor S.A. BNDES - CEOL Pinda S.A. BNDES - CEOL Ilhus S.A. IFC - Banco Santander S.A. FNE - Banco do Nordeste do Brasil S.A. - Espra Subtotal loans Operation funding cost TO TAL 100.00% CDI + 3.0% p.a. T JLP + 1.92% p.a. T JLP + 1.92% p.a. T JLP + 1.92% p.a. T JLP + 1.92% p.a. T JLP + 1.92% p.a. T JLP + 1.92% p.a. T JLP + 1.92% p.a. T JLP + 1.92% p.a. T JLP + 1.92% p.a. T JLP + 2.18% p.a. T JLP + 2.18% p.a. T JLP + 2.18% p.a. T JLP + 2.18% p.a. T JLP + 2.18% p.a. 100.00% CDI + 2.5% p.a. 9.5% p.a. Current 1.031 1.031 1.031 Principal Current 150.000 150.000 (591) 149.409 Current 1.031 1.031 1.031 Charges NonCurrent 2.766 419 1.351 1.796 1.654 2.384 1.862 1.367 669 19 30 59 32 22 14.430 14.430 31/12/2011 Principal Current 150.000 4.905 154.905 (591) 154.314 NonCurrent 80.801 14.080 39.790 60.951 53.096 82.171 54.143 44.503 21.727 21.235 36.000 68.063 36.351 24.750 107.369 745.030 (5.590) 739.440 Charges Current 824 30 854 854 Consolidated 31/12/2010 Principal Current 1.764 4.572 6.336 6.336 NonCurrent 13.353 112.246 125.599 125.599
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16.1 Additional information on debt service a. Commercial promissory notes Banco Votorantim On March 18, 2011, the Company issued commercial promissory notes in the amount of R$150,000. These securities fall due in 360 days on March 12, 2012. The remuneration is at DI Rate, plus 3% p.a. and other commissions and charges. The Company is entitled to early redemption of the debt. In order to ensure the full payment and the compliance with all its contractual obligations, the Company pledged as collateral to the holders of Commercial Notes all its current and future shares, representative of the capital of its subsidiary Enerbras, and their respective rights. The holders of the respective commercial notes may only exercise this right in case the Company fails to comply with the contractual clauses. The proceeds from this operation were used to settle the IFC loan and the remainder was used for investments in the wind farms parks in connection with LER 2009.
b. BNB and BNDES financing for the construction of the wind farms of LER 2009. On December 28, 2010, the Company obtained the approval of financing for its 9 wind farms and on September 28, 2011, for its 5 out of 14 wind farms contracted at the 2009 Reserve Auction of December 2009 (LER 2009) from the National Bank for Economic and Social Development (BNDES). The consolidated financial volume reaches R$884,057 and represents approximately 76% of the total planned investments of R$1,170,000. The Paje do Vento, Planaltina, Porto Seguro, Nossa Senhora da Conceio, Guirap, Serra do Salto, Guanambi, Alvorada and Rio Verde wind farms obtained approval from the Senior Management of BNDES in a total financed volume of R$586,677. The volume represents approximately 74% of the total investments in these projects. The financing has an interest rate of 1.92% p.a. + TJLP (Long-term Interest Rate), up to two years of interest and principal grace period and 16 years of amortization term. The nine farms total 195.2 MW of installed capacity and an 84 MW on average of firm energy contracted. On November 25, 2011, the third release of funds had already been made. BNDES - agreement n 10.2.2108.1 Signed on May 5, 2011, aimed at the deployment of Central Geradora Elica Serra do Salto from June 2011 to July 2012. The third payment was made on November 25, 2011, in the amount of R$4,648. Up to this date, R$39,790 of this total amount (R$57,913) has been disbursed with BNDES ordinary funds, amortizable in 192 monthly installments, the first one maturing on May 15, 2013 and the last one on April 15, 2029, bearing interest of 1.92% p.a. indexed to the TJLP. The operation is guaranteed by pledge on shares, fiduciary assignment of credit and emerging rights, fiduciary assignment of assets, and bank guarantee during construction and the first year of business operation. This operation establishes that the DFB/EBITDA index should be higher or equal to 1.3, and financing currently enjoys the grace period. BNDES - agreement n 10.2.2107.1 Signed on May 5, 2011, aimed at the deployment of Central Geradora Elica Rio Verde from June 2011 to July 2012. The third payment was made on November 25, 2011, in the amount of R$9,541. Up to this date, R$80,801 of this total amount (R$89,550) has been disbursed with BNDES ordinary funds, amortizable in 192 monthly installments, the first one maturing on May 15, 2013 and the last one
34

(In thousands of Brazilian Reais, unless otherwise indicated) on April 15, 2029, bearing interest of 1.92% p.a. indexed to the TJLP. The operation is guaranteed by pledge on shares, fiduciary assignment of credit and emerging rights, fiduciary assignment of assets, and bank guarantee during construction and the first year of business operation. This operation establishes that the DFB/EBITDA index should be higher or equal to 1.3, and financing currently enjoys the grace period. BNDES - agreement n 10.2.2106.1 Signed on May 5, 2011, aimed at the deployment of Central Geradora Elica Porto Seguro from June 2011 to July 2012. The third payment was made on November 25, 2011, in the amount of R$4,026. Up to this date, R$14,080 of this total amount (R$19,252) have been disbursed with BNDES ordinary funds, amortizable in 192 monthly installments, the first one maturing on May 15, 2013 and the last one on April 15, 2029, bearing interest of 1.92% p.a. indexed to the TJLP. The operation is guaranteed by pledge on shares, fiduciary assignment of credit and emerging rights, fiduciary assignment of assets, and bank guarantee during construction and the first year of business operation. This operation establishes that the DFB/EBITDA index should be higher or equal to 1.3, and financing currently enjoys the grace period. BNDES - agreement n 10.2.2105.1 Signed on May 5, 2011, aimed at the deployment of Central Geradora Elica Planaltina from June 2011 to July 2012. The third payment was made on November 25, 2011, in the amount of R$17,915. Up to this date, R$60,951 of this total amount (R$82,125) has been disbursed with BNDES ordinary funds, amortizable in 192 monthly installments, the first one maturing on May 15, 2013 and the last one on April 15, 2029, bearing interest of 1.92% p.a. indexed to the TJLP. The operation is guaranteed by pledge on shares, fiduciary assignment of credit and emerging rights, fiduciary assignment of assets, and bank guarantee during construction and the first year of business operation. This operation establishes that the DFB/EBITDA index should be higher or equal to 1.3, and financing currently enjoys the grace period. BNDES - agreement n 10.2.2104.1 Signed on May 5, 2011, aimed at the deployment of Central Geradora Elica Paje do Vento from June 2011 to July 2012. The third payment was made on November 25, 2011, in the amount of R$12,748. Up to this date, R$53,096 of this total amount (R$77,294) has been disbursed with BNDES ordinary funds, amortizable in 192 monthly installments, the first one maturing on May 15, 2013 and the last one on April 15, 2029, bearing interest of 1.92% p.a. indexed to the TJLP. The operation is guaranteed by pledge on shares, fiduciary assignment of credit and emerging rights, fiduciary assignment of assets, and bank guarantee during construction and the first year of business operation. This operation establishes that the DFB/EBITDA index should be higher or equal to 1.3, and financing currently enjoys the grace period. BNDES - agreement n 10.2.2103.1 Signed on May 5, 2011, aimed at the deployment of Central Geradora Elica Nossa Senhora da Conceio from June 2011 to July 2012. The third payment was made on November 25, 2011, in the amount of R$21,391. Up to this date, R$82,171 of this total amount (R$86,956) has been disbursed with BNDES ordinary funds, amortizable in 192 monthly installments, the first one maturing on May 15, 2013 and the last one on April 15, 2029, bearing interest of 1.92% p.a. indexed to the TJLP. The operation is guaranteed by pledge on shares, fiduciary assignment of credit and emerging rights, fiduciary assignment of assets, and bank guarantee during construction and the first year of business operation. This operation establishes that the DFB/EBITDA index should be higher or equal to 1.3, and financing currently enjoys the grace period. BNDES - agreement n 10.2.2102.1 Signed on May 5, 2011, aimed at the deployment of Central Geradora Elica Guirap from June 2011 to July 2012. The third payment was made on November 25, 2011, in the amount of R$6,829. Up to this date, R$54,143 of this total amount (R$86,956) has been disbursed with BNDES ordinary funds, amortizable in 192 monthly installments, the first one maturing on May 15, 2013 and the last one on April 15, 2029, bearing interest of 1.92% p.a. indexed to the TJLP. The operation is guaranteed by pledge on shares,
35

(In thousands of Brazilian Reais, unless otherwise indicated) fiduciary assignment of credit and emerging rights, fiduciary assignment of assets, and bank guarantee during construction and the first year of business operation. This operation establishes that the DFB/EBITDA index should be higher or equal to 1.3, and financing currently enjoys the grace period. BNDES - agreement n 10.2.2101.1 Signed on May 5, 2011, aimed at the deployment of Central Geradora Elica Guanambi from June 2011 to July 2012. The third payment was made on November 25, 2011, in the amount of R$11,137. Up to this date, R$44,503 of this total amount (R$62,801) has been disbursed with BNDES ordinary funds, amortizable in 192 monthly installments, the first one maturing on May 15, 2013 and the last one on April 15, 2029, bearing interest of 1.92% p.a. indexed to the TJLP. The operation is guaranteed by pledge on shares, fiduciary assignment of credit and emerging rights, fiduciary assignment of assets, and bank guarantee during construction and the first year of business operation. This operation establishes that the DFB/EBITDA index should be higher or equal to 1.3, and financing currently enjoys the grace period. BNDES - agreement n 10.2.2100.1 Signed on May 5, 2011, aimed at the deployment of Central Geradora Elica Alvorada from June 2011 to July 2012. The third payment was made on November 25, 2011, in the amount of R$4,115. Up to this date, R$21,727 of this total amount (R$23,829) has been disbursed with BNDES ordinary funds, amortizable in 192 monthly installments, the first one maturing on May 15, 2013 and the last one on April 15, 2029, bearing interest of 1.92% p.a. indexed to the TJLP. The operation is guaranteed by pledge on shares, fiduciary assignment of credit and emerging rights, fiduciary assignment of assets, and bank guarantee during construction and the first year of business operation. This operation establishes that the DFB/EBITDA index should be higher or equal to 1.3, and financing currently enjoys the grace period. The other five plants of Renova Energia contracted according to LER 2009, Candiba, Igapor, Ilhus, Licnio de Almeida and Pinda received the approval of BNDES Executive Board for the total financed amount of R$297,380, corresponding to 70% of total expected investments for these farms. The financing has an interest rate of 2.18% p.a. + TJLP (Long-term Interest Rate), up to two years of interest and principal grace period and 16 years of amortization term. The five farms total 98.8 MW of installed capacity and an 42.5 MW on average of firm energy contracted. The first release of funds occurred on December 28, 2011. BNDES - agreement n 11.2.0914.1 Signed on December 6, 2011, aimed at the deployment of Central Geradora Elica Candiba from June 2011 to July 2012. The first payment was made on December 28, 2011 in the amount of R$ 21,235, with BNDES ordinary funds, amortizable in 192 monthly installments, the first one maturing on April 15, 2013 and the last one on March 15, 2029, bearing interest of 2.18% p.a. indexed to the TJLP. The operation is guaranteed by pledge on shares, fiduciary assignment of credit and emerging rights, fiduciary assignment of assets, and bank guarantee during construction and the first year of business operation. This operation establishes that the DFB/EBITDA index should be higher or equal to 1.3, and financing currently enjoys the grace period. BNDES -agreement n 11.2.0913.1 Signed on December 6, 2011, aimed at the deployment of Central Geradora Elica Ilhus from June 2011 to July 2012. The first payment was made on December 28, 2011 in the amount of R$ 24,750, with BNDES ordinary funds, amortizable in 192 monthly installments, the first one maturing on April 15, 2013 and the last one on March 15, 2029, bearing interest of 2.18% p.a. indexed to the TJLP. The operation is guaranteed by pledge on shares, fiduciary assignment of credit and emerging rights, fiduciary assignment of assets, and bank guarantee during construction and the first year of business operation. This operation establishes that the DFB/EBITDA index should be higher or equal to 1.3, and financing currently enjoys the grace period.
36

(In thousands of Brazilian Reais, unless otherwise indicated) BNDES -agreement n 11.2.0912.1 Signed on December 6, 2011, aimed at the deployment of Central Geradora Elica Igapor from June 2011 to July 2012. The first payment was made on December 28, 2011 in the amount of R$ 68,063, with BNDES ordinary funds, amortizable in 192 monthly installments, the first one maturing on April 15, 2013 and the last one on March 15, 2029, bearing interest of 2.18% p.a. indexed to the TJLP. The operation is guaranteed by pledge on shares, fiduciary assignment of credit and emerging rights, fiduciary assignment of assets, and bank guarantee during construction and the first year of business operation. This operation establishes that the DFB/EBITDA index should be higher or equal to 1.3, and financing currently enjoys the grace period. BNDES -agreement n 11.2.0911.1 Signed on December 6, 2011, aimed at the deployment of Central Geradora Elica Pinda from June 2011 to July 2012. The first payment was made on December 28, 2011 in the amount of R$ 36,351, with BNDES ordinary funds, amortizable in 192 monthly installments, the first one maturing on April 15, 2013 and the last one on March 15, 2029, bearing interest of 2.18% p.a. indexed to the TJLP. The operation is guaranteed by pledge on shares, fiduciary assignment of credit and emerging rights, fiduciary assignment of assets, and bank guarantee during construction and the first year of business operation. This operation establishes that the DFB/EBITDA index should be higher or equal to 1.3, and financing currently enjoys the grace period. BNDES - agreement n 11.2.0910.1 Signed on December 6, 2011, aimed at the deployment of Central Geradora Elica Licnio de Almeida from June 2011 to July 2012. The first payment was made on December 28, 2011 in the amount of R$ 36,000, with BNDES ordinary funds, amortizable in 192 monthly installments, the first one maturing on April 15, 2013 and the last one on March 15, 2029, bearing interest of 2.18% p.a. indexed to the TJLP. The operation is guaranteed by pledge on shares, fiduciary assignment of credit and emerging rights, fiduciary assignment of assets, and bank guarantee during construction and the first year of business operation. This operation establishes that the DFB/EBITDA index should be higher or equal to 1.3, and financing currently enjoys the grace period.
c. Banco Santander S.A. - Loan Agreement in the form of a credit facility, the most recent amendment dated November 7, 2007. The main financing value upon the contracting was equal to R$23,253, at a 2.5% p.a. interest rate plus updating at 100% of the CDI rate, payable every six months on the last days of January and July, with the final portion due on May 24, 2014. On March 18, 2011 the Company fully settled the loan. d. Banco do Nordeste do Brasil S.A. Financing Contract through public deed for credit line, intermediated by Enerbras and their parent companies, entered into on June 30, 2006, for the total amount of R$120,096 with interest of 9.5% p.a. (which may be reduced to 8.08% due to the 15% performance bonus), charged on a quarterly basis on the 30th of each month from June 30, 2006 to June 30, 2008 and, from then on, on a monthly basis, on the 30th of each month. The agreement matures on June 30, 2026. The following were given as security to this loan: bank letter equal to 50% of the sum loaned. In March 2010, Banco do Nordeste do Brasil S.A. released a guarantee in view of the registration of the construction; first-degree mortgage of the property with all the existing facilities at: (i) rural property PCH - Cachoeira da Lixa, located in the municipality of Jucuruu (BA); (ii) rural property PCH Colino 1 - D, E, F, located
37

(In thousands of Brazilian Reais, unless otherwise indicated) in the municipality of Vereda (BA); and (iii) Fazenda Entorno PCH - Colino 2, located in the municipality of Vereda (BA); pledge on shares, entered into pursuant to articles 1,419 and the following of the Brazilian Civil Code (Law 10406/2002) and article 39 of Law 6404/76. As an intervening party, the parent company of Enerbras pledged common shares issued by Espra; Pledge of Rights Arising from the Authorizing Resolutions entered into pursuant to articles 1431 and following of the Brazilian Civil Code (Law 10406/2002) and as permitted in paragraph 1, article 19, Decree 2003 dated September 10, 1996, the subsidiary Espra pledges in favor of BNB: a. The right to receive all and any sums which are or will become actually or potentially payable and outstanding to Espra by the Concession Authority, in accordance with the legal and regulatory norms and applicable to the following Authorizing Resolutions: (i) PCH Cachoeira da Lixa: Authorizing Resolution no. 697 dated December 24, 2003; (ii) PCH Colino 1: Authorizing Resolution 703 dated December 24, 2003, and (iii) PCH Colino 2: Authorizing Resolution no. 695 dated December 24, 2003, subsequently amended by Resolutions no. 427, 425, and 426, all dated December 24, 2004, and by means of SCG/ANEEL Provisions no. 591 and 588 dated March 20, 2006, and no. 529 dated March 15, 2006, respectively, including but not limited to all the indemnities owing to the license's repeal or extinction; and b. All other rights, tangible or not, potential or otherwise, likely to be pledged pursuant to the applicable legal and regulatory norms and the following Authorizing Resolutions: (i) PCH Cachoeira da Lixa: Authorizing Resolution no. 697 dated December 24, 2003; (ii) PCH Colino 1: Authorization Resolution No. 703, dated December 24, 2003; (iii) PCH Colino 2: Authorizing Resolution 695 dated December 24, 2003, with its amendments mentioned in item 'a' of the Electricity Purchase and Sale Agreements: CT-PROINFA/PCH-MRE no. 032/2004 (PCH Cachoeira da Lixa); CT-PROINFA/PCHMRE no. 033/2004 (PCH Colino 1) and CT-PROINFA/PCH-MRE no. 034/2004 (PCH Colino 2),entered into between Espra and ELETROBRAS. Assignment and Binding of Revenues from the agreements entered into with ELETROBRAS; reserve account liquidity fund (Note 11); credit insurance to conclude the project, which owing to the conclusion of the works, is already cancelled.
16.2 Maturities of the long-term portion (principal and charges) The portions classified in non-current assets (Consolidated) have the following payment schedule:
38

Year of maturity: 2013 2014 2015 2016 2017 After 2017 TOTAL
12/31/2011 33.340 46.293 46.651 47.031 47.431 538.714 759.460
17. Current tax liabilities

Parent company 12/31/2011 12/31/2010 INSS payable 372 140 INSS withheld from third-parties 6 1 IRRF on payroll 305 186 PIS, COFINS and CSLL 212 306 IRPJ payable IRRF payable 44 108 ISS payable 3 CSLL payable IOF payable 15 2 FGTS payable 75 40 ICMS payable 4 1 TOTAL 1.033 787 Consolidated 12/31/2011 12/31/2010 376 140 334 9 305 186 260 436 230 191 192 157 183 34 158 59 88 10 75 40 61 1 2.262 1.263
18. Shareholders' equity

a. Capital
As of December 31, 2010, the Company's capital was R$326,515. On March 17, 2011 through the re-confirmation of the minutes of the board of directors' meeting of January 18, 2011, the Company granted call option of 360,051 (three hundred thousand and sixty and fifty-one) Certificates of Deposits of Shares ("Units"), each representative of 1 (one) registered common share and 2 (two) preferred shares of the Company's authorized capital, at the exercise value of R$0.34 (thirty-four cents of Real) for purchase option of Unit, which will result in the maximum dilution of 0.77% (seventy-seven hundredth per cent) for the
39

(In thousands of Brazilian Reais, unless otherwise indicated) current shareholders of the Company. On this date, the Company's capital increased from R$326,515 to R$326,637 (increase of R$122). On April 4, 2011, the Company authorized capital increase in the amount of R$43, whereby it issued 375,000 shares in the proportion of one (01) common share and two (02) preferred shares. The Company's capital increased from R$326,637 to R$326,680. On August 15, 2011, the Company authorized capital increase in the amount of R$63, whereby it issued 562,284 shares in the proportion of one (01) common share and two (02) preferred shares. The Company's capital increased from R$326,680 to R$326,743. On August 17, 2011, Renova's Board of Directors authorized a capital increase of R$378,132, through the issuance of 53,108,330 new common shares, at the issuance price of R$7.12 per common share ("Capital Increase"). Issuance share price for capital increase was fixed, without unjustified dilution for current Company's shareholders, based on provisions of Article 170, Paragraph 1, I of Law 6404/76, as amended ("Brazilian Corporate Law"), taking into consideration the Company's expected profitability, supported by the appraisal report attached to the Board of Directors' Meeting Minute. Note that the capital increase could be partially homologated for the limit value of the investment made by Light Energia or any amount between this investment and the capital increase value, due to the right of other shareholders of the Company to exercise the preference right to subscribe new issued common shares. On August 17, 2011, shareholders RR Participaes S.A., Infra Brasil Fundo de Investimento em Participaes, Fundo de Investimento em Participao Caixa Ambiental - FIP Caixa Ambiental, Banco Santander (Brazil) S.A. and Santa Barbara Fundo de Investimento em Participao waived the preference right. On the same day, according to relevant fact published on August 17, 2011, Light Energia S.A. and Renova Energia S.A., in compliance with the provisions of Article 157, paragraph 4 of Law 6,404, of December 15, 1976, according to transaction announced in the market on July 8, 2011, Light S.A., through its wholly-owned subsidiary Light Energia S.A.("Light Energia"), paid up 50,561,797 common shares issued by Renova with a contribution of R$360,000. On August 19, 2011, Light Energia S.A., RR Participaes and Renova Energia S.A. entered into the shareholders' agreement that disciplines the following matters, among others : (i) voting rights by the shareholder; (ii) The Company's and its subsidiaries' Corporate Governance (if any); (iii) the exercize of the right of preference and the right to equal an offer at the Transfer of Shares Bound by Shareholders; (iv) the exercize of the right of jointly selling shares bound by Shareholders and (v) the right of exit. On September 16, 2011, the period to exercise the right of subscribing shares in the capital increase ended, considering subscription and payment of 50,561,797 common shares by Light Energia S.A. as previously mentioned, and on the exercise of preference rights, 52,727,813 common shares were subscribed and paid up at issuance price of R$7.12 per common share, totaling R$375,422. On September 30, 2011, paid-up capital of Renova Energia S.A. was R$702,166.
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(In thousands of Brazilian Reais, unless otherwise indicated) Considering that 380,517 common shares were in excess, in the total amount of R$2,709, and that the interest of shareholders in subscription was higher than the effective number, excess was fully apportioned among shareholders that showed interest in subscribing, pursuant to the terms of Article 171, paragraph 7, item "b", of Law 6404/76. Excess subscription period was from September 30 to October 6, 2011. After the subscription period of the 380,517 common shares, on October 6, 87,398 common shares were paid up, in the amount of R$622. On October 6, 2011, paid-up capital of Renova Energia S.A., which was R$702,166 became R$702,788. Cancellation of surplus in the total amount of 293,119 occurred on October 25, 2011 in the Board of Directors' Meeting to homologate capital increase and cancel remaining shares. The Company's shareholders' chart on December 31, 2010 is as follows:
RENOVA ENERGIA ON Shares Quantity 70.889.212 33.936 22.109.919 11.651.467 3.904.800 4.666.666 1.886.986 93.033.067 % 76,198% 0,036% 23,8% 12,524% 4,197% 5,016% 2,028% 100,0% Preferred shares Quantity 3.444.032 66.664 44.219.837 23.302.933 7.809.600 9.333.332 3.773.972 47.730.533 % 7,216% 0,140% 92,6% 48,822% 16,362% 19,554% 7,907% 100,0% Total shares Quantity 74.333.244 100.600 66.329.756 34.954.400 11.714.400 13.999.998 5.660.958 140.763.600 % of Total Equity Capital % 52,81% 0,07% 47,12% 24,83% 8,32% 9,95% 4,02% 100,00%
% of Total Equity Capital % 51,70% 25,85% 25,85% 48,30% 9,95% 0,67% 17,87% 2,91% 7,16% 6,49% 3,25% 100,00%
RR Participaes Members of the Board of Directors Free Float InfraBrasil Santander Equity FIP Ambiental Other Total
On December 31, 2011, the Company's shareholders are as follows:

RENOVA ENERGIA ON Shares Quantity 101.123.594 50.561.797 50.561.797 43.943.355 18.892.107 450.866 11.651.467 1.896.000 4.666.666 4.228.732 2.157.517 145.066.949 % 69,71% 34,85% 34,85% 30,29% 13,02% 0,31% 8,03% 1,31% 3,22% 2,92% 1,49% 100,00% Preferred shares Quantity 0 0 0 50.529.299 573.416 863.332 23.302.933 3.792.000 9.333.332 8.457.460 4.206.826 50.529.299 % 0,00% 0,00% 0,00% 100,00% 1,13% 1,71% 46,12% 7,50% 18,47% 16,74% 8,33% 100,00% Total shares Quantity 101.123.594 50.561.797 50.561.797 94.472.654 19.465.523 1.314.198 34.954.400 5.688.000 13.999.998 12.686.192 6.364.343 195.596.248
Controlling Block RR Participaes Light Energia Other shareholders RR Participaes* Members of the Board of Directors InfraBrasil Santander FIP Caixa Ambiental FIP Santa Barbara Other Total
(*) remaining RR Participaes shares that are not in the control block - RR/Light Energia
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b. Expenses with issue of shares

Parent company 12/31/2011 12/31/2010 34.241 13.686
Expenses with issue of shares
The Company records all costs of share issuance transactions in a specific line. On July 13, 2010, the Company made its initial public offering of 10,000,000 (ten million) of Share/Unit Deposit Certificates at R$15.00 per unit, composed of R$150,000. This offering was settled on July 15, 2010. Referring to the operation's expenditures with lawyers, advisors and structuring, the Company invested the amount of R$13,686. To issue shares related to the capital increase of Light Energia, occurred in September 2011, as previously described, the Company contracted an advisory company to render financial advisory services, fund raising through equity contribution and/or disposal of the Company's shares. The total investments of these services was 5% on transaction plus taxes, totaling R$20,555.
c. Dividends
As of December 31, 2011, subsidiary Enerbras approved the proposal for the distribution of dividends to the Company in the amount of R$11,921, deriving from income earned in 2011, after the recognition of the legal reserve. This amount is recorded under caption Dividends receivable in the Current Assets group of the Parent company.
19. Net operating income (Consolidated)

MWh 12/31/2011 12/31/2010 Supply of electric power (-) Deductions from revenue Cofins Pis 224.434 224.434 224.434 224.434 R$ 12/31/2011 37.938 (1.385) (1.138) (247) 36.553 12/31/2010 36.830 (1.344) (1.105) (239) 35.486
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20. Operating expenses

Parent company 12/31/2011 12/31/2010 Operating expenses General and Total Total administrative 6.237 8.867 1.393 1.428 1.183 147 866 416 1.805 22.342 6.237 8.867 1.393 1.428 1.183 147 866 416 1.805 22.342 3.948 3.503 716 938 196 3.219 211 380 174 293 13.578
Manageable Personnel, Management Outsourced services Rental and leases Traveling Depreciation Discontinued projects Insurance Telephony and IT Store and supplies Others Total
Consolidated 12/31/2011 Operating expenses General and Total administrative 6.237 9.838 3.159 1.514 1.190 147 882 425 2.194 25.586 25.586 1.074 81 1.155 6.237 12.981 3.159 1.514 6.857 667 980 425 2.501 35.321 36.476 12/31/2010 Total 1.143 76 1.219 3.948 6.542 1.249 970 5.871 3.219 764 561 184 856 24.164 25.383
Operation Non-manageable Tusd - Distribution system use charge Inspection fee 1.074 81 1.155 3.143 5.667 520 98 307 9.735 10.890
Personnel, Management Outsourced services Rental and leases Traveling Depreciation Discontinued projects Insurance Telephony and IT Store and supplies Others Total
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21. Financial income (loss)

Parent company 12/31/2011 12/31/2010 Financial income Yields from financial investments Interest received - Loans Interest received Discounts obtained Monetary variation Financial expenses Interest Interest - Loans Debt Charges IOF Bank expenses Other financial expenses Total 15.680 1.070 1 9 47 16.807 (10) (657) (3.576) (98) (32) (4.373) 12.434 3.979 7 6 9 72 4.073 (25) (327) (137) (9) (498) 3.575 Consolidated 12/31/2011 12/31/2010 19.905 10 77 39 47 20.078 (67) (13.788) (945) (110) (14.910) 5.168 5.268 269 6 12 74 5.629 (40) (262) (11.699) (246) (13) (262) (12.522) (6.893)
22. Income and social contribution taxes

Consolidated Income tax Social contribution 12/31/2011 12/31/2010 12/31/2011 12/31/2010 37.938 36.830 37.938 36.830 8% 8% 12% 12% (3.035) (2.946) (4.553) (4.420)
Calculation basis - deemed IRPJ and CSLL Rate - deemed profit IRPJ and CSLL Adjustments to reflect effective rate Other income IRPJ and CSLL calculation basis Effective rate IRPJ and CSLL Calculation Discoun in excess of R$0.240 per annum IRPJ and CSLL expenses
(4.731) (7.766) 24% (1.853) 24 (1.829)
(1.770) (4.716) 25% (1.179) 24 (1.155)
(4.731) (9.284) 9% (844) (844)
(1.770) (6.190) 9% (557) (557)

44

(In thousands of Brazilian Reais, unless otherwise indicated) The Company adopts the taxable income calculation regime, having determined the total accumulated in the amount of R$29,953 in 2011. Tax presented in the consolidated position refers to subsidiary Espra (deemed income system) and on financial revenues of some of the associates that, although using deemed income system, should calculate revenues from financial operations using the taxable income rule. The income and social contribution taxes are calculated based on the rates of 15% plus a surcharge of 10% on taxable income in excess of R$ 240 for income tax and 9% on taxable income for social contribution on net income, and take into account tax loss carryforward and negative basis of social contribution, limited to 30% of taxable income. Income and social contribution taxes under the deemed profit system are paid quarterly on the gross revenue, considering the percentage presumption, based on the rates defined in current legislation. (Basis of estimate of 8% and 12% on sales, income tax and social contribution, respectively, plus the calculation amount of other financial revenue).
23. Financial instruments

Sundry considerations The Company and its subsidiaries maintain operations with financial instruments. The management of these instruments is done through operating strategy and internal controls, aimed at assuring liquidity, security and profitability. The results obtained from such operations are in conformity with the policies adopted by Company's management. The management of the risks associated to these operations is conducted by applying practices established by Management and includes the monitoring of levels of exposure to each market risk, and estimates of future cash flows. Those practices establish a requirement of updating of the information in operating systems, plus exchanging information and performing the transaction with the counterparties.
a. Fair value of financial instruments
Fair value is the amount for which an asset could be exchanged, or a liability settled, between parties with knowledge of the deal and interest in performing it, in a transaction where none of the parties is favored. The concept of fair value deals with innumerous variations of metrics used for the purpose of reliably measuring an amount. To calculate the fair value we project the cash flows from the financial instruments up to the end of the operations by following the contractual rules and use as a discount rate the future interbank deposit rate disclosed by BM&FBovespa. Some of the headings show a book balance equivalent to fair value, and this situation occurs because the financial instruments' features are similar to those of instruments traded in the market.
45

The use of different market methodologies may have a material effect on the estimated realizable value. Transactions with financial instruments are stated in the balance sheet at book value, which is equivalent to their fair value under the headings of cash and cash equivalents, trade accounts receivable, related parties, escrow deposits, and trade accounts payable. For loans, financing and debt charges, book balances differ from fair value.
Parent company Fair value Financial assets Current Cash and cash equivalents Receivables from suppliers Pledges and restricted deposits Non-current Related party transactions Pledges and restricted deposits Financial liabilities Current Suppliers Loans and financing Non-current Related party transactions 2.059 151.031 12.087 5.989 1.577 2.059 150.440 12.087 5.989 1.577 12/31/2011 12/31/2010 254.459 4.701 40 25.473 449 7.251 116.091 59 212 444 Book value 12/31/2011 12/31/2010 254.459 4.701 40 25.473 449 7.251 116.091 59 212 444
Financial assets Current Cash and cash equivalents T rade accounts receivable Receivables from suppliers Pledges and restricted deposits Non-current Related party transactions Pledges and restricted deposits Financial liabilities Current Suppliers Loans and financing Non-current Loans and financing
Consolidated Fair value Book value 12/31/2011 12/31/2010 12/31/2011 12/31/2010 389.846 5.152 13.479 40 244 11.875 18.569 3.918 121.059 59 164 12.019 389.846 5.152 13.479 40 244 11.875 18.569 3.918 121.059 59 164 12.019
19.566 155.935 759.460
8.100 7.796 128.586
19.566 155.345 753.870
8.100 7.190 125.599
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(In thousands of Brazilian Reais, unless otherwise indicated) Loans and financing in local currency with Banco Santander S.A. and the Promissory Note with Banco Votorantim are classified as financial liabilities and are recorded at amortized cost, correspond to loans with specific purposes for financing of investments in generation of electricity, indexed to 100% of CDI and prefixed rates for the Santander financing and 100% CDI + 3 % p.a. for the promissory note of Banco Votorantim. Loans and financing in domestic currency by BNB are stated as financial liabilities and are recorded at their amortized cost, and refer to loans with the specific purpose of funding investments in electricity generation, indexed to pre-fixed rates.
Pare nt company 12/31/2011 Fair value through the state me nt of income 254.459 Fair value through the state me nt of income 7.251 115.655 40 40 59 12/31/2010
Financial asse ts Curre nt Cash and cash equivalents Receivables from suppliers Pledges and restricted deposits Non-curre nt Related party transactions Pledges and restricted deposits Financial liabilitie s Curre nt Suppliers Loans and financing Non-curre nt Related party transactions
Loans and re ce ivable s
He ld to maturity
O the rs at amortiz e d cost
Total
He ld to maturity
Total
254.459
7.251 115.655 59
25.473 449
25.473 449
212 444
212 444
2.059 150.440
2.059 150.440
5.989
5.989
12.087
12.087
1.577
1.577
Consolidate d 12/31/2011 Fair value through the state me nt of income 389.846 5.152 Fair value through the state me nt of income 18.569 3.918 121.059 40 40 59 12/31/2010
Financial asse ts Curre nt Cash and cash equivalents T rade accounts receivable Receivables from suppliers Pledges and restricted deposits Non-curre nt Related party transactions Pledges and restricted deposits Financial liabilitie s Curre nt Suppliers Loans and financing Non-curre nt Loans and financing
He ld to maturity
Total
He ld to maturity
Total
389.846 5.152
18.569 3.918 121.059 59
244 11.875
244 11.875
164 12.019
164 12.019
19.566 155.345
19.566 155.345
8.100 7.190
8.100 7.190
753.870
753.870
125.599
125.599
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b. Market risk The market risk refers to the possibility of monetary loss arising from fluctuations of variables that have impact on prices and rates negotiated in the market. Said fluctuations impact on virtually all sectors and, therefore, are financial risk factors. The loans and financing taken by the Company and its affiliated company Espra shown in Note 16 are from BNB, Banco Votorantim and BNDES. Contract rules for financial liabilities create risks related to these exposures. On December 31, 2011, the Company and its subsidiaries have a market risk associated to interbank deposit rate, long-term interest rate and the general market price index. To determine market risks associated to interest rates we considered the general market price index, the interbank deposit rate, and the long-term interest rate and extended consumer price index but took into account that the Brazilian economy has a favorable outlook for solid growth and investments in infrastructure, as exemplified by governmental programs such as the Growth Acceleration Program. A controlled inflation and a credit supply are important factors to obtain low-risk funding. Considering that the market rate (or the opportunity cost of capital) is defined by this agent, bearing in mind a risk premium compatible with the area's activities and that, as it is not possible to seek out other alternatives or different market opportunities and/or methodologies for its estimates, the market value of this portion of domestic loans is close to its book value, as are the other financial assets and liabilities assessed. c. Sensitivity analysis (Consolidated)
The direct and indirect subsidiaries have investments and loans and financings in domestic currency. The following table considers rate scenarios with the respective effect on the Company's income figures, with the applicable exposures of interest rate fluctuations and other indexes, to these transactions' maturity dates. The likely scenario was established based on the Company's business plan as approved by Management, with balances outstanding on December 31, 2011. Scenarios II and III represent, respectively, 25% and 50% of increase in the risk, and IV and V scenarios represent, respectively, 25% and 50% of deterioration or reduction, as follows:
Financial asset Interest earning bank deposits Reference for financial assets CDI - Year Risk CDI Rate increase in Probable (I) Scenario II Scenario III Scenario IV Scenario V 333.896 336.859 339.823 330.932 327.969 25% 50% -25% -50%
Financial liability Loans and financing - NP Renova Energia S.A. BNDES Contracts Reference for financial liabilities CDI - Year and TJLP - Year
Risk CDI TJLP Rate increase in
Probable (I) 151.031 652.091
Scenario II 151.288 655.698 25%
Scenario III Scenario IV Scenario V 151.546 659.306 50% 150.773 648.483 -25% 150.515 644.875 -50%
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(In thousands of Brazilian Reais, unless otherwise indicated) This sensitivity analysis was prepared according to CVM Instruction no. 475/2008, with the purpose of measuring the impact of changes in market variables on each of the Company's financial instruments. However, settling the transactions involving such estimates may result in sums different from those estimated, owing to the subjectivity contained in the procedure used to prepare these analyses. d. Liquidity risk The liquidity risk shows the subsidiary's and parent company's ability to settle assumed obligations. To settle assumed obligations and determine the subsidiary's financial capacity to adequately meet its commitments, loan maturities, and other obligations are included in the disclosures. More detailed information on loans taken by the Company is shown in Note 16. The Company's management only makes use of credit facilities that allow its operating leverage. This assumption is confirmed by observing the characteristics of the loans taken. The flow of realization for the liabilities assumed under their contractual conditions is presented in the table below.
Consolidated 12/31/2011 Maturity Maturity from 2013 to from 2016 to 2015 2017
Total Contractual obligations Loans, financing and debt charges 915.396
Maturity in 2012
Maturity over 2017
155.936
126.284
94.462
538.714
Consolidated 12/31/2010 Maturity Maturity from 2012 to from 2015 to 2014 2016
Total Contractual obligations Loans, financing and debt charges 132.789
Maturity in 2011
Maturity over 2016
7.190
28.965
12.171
84.463
e. Credit risk Credit risk includes the possibility that the Company may fail to realize its rights. This description is directly related to headings such as cash and cash equivalents, trade accounts receivable, escrow deposits, and others. In the energy sector information on operations are submitted to the regulatory agency, which maintains active data on energy produced and consumed, and this structure results in plans for the independent and uninterrupted
49

(In thousands of Brazilian Reais, unless otherwise indicated) operation of the electric system. Energy sales arise from auctions and agreements with other companies This mechanism brings reliability and controls default among participants of the industry. Another credit risk source is that associated to financial investments. The management of these financial assets is done through operating strategies and internal controls, aimed at assuring liquidity, security and profitability. The Company does not make investments for speculative purpose. The results obtained from such operations are consistent with the policies and strategies defined by Company's Management. The Company manages its risks continuously, assessing whether the practices adopted in the execution of its activities are in line with the policies advocated by management. The Company does not make use of equity hedging financial instruments, as it believes that the risks to which its assets and liabilities are ordinarily exposed compensate each other in the natural course of its activities. The management of these financial instruments is done through operating strategies, aimed at liquidity, profitability and security. The control policy consists of permanent follow-up of the conditions engaged versus those in force in the market. The Company does not make any speculative investments in derivatives or any other risk assets. Regarding financial assets from financial investments, the Company only conducts transactions with financial institutions classified as low risk by rating agencies in order to ensure a higher profitability while aggregating security to the results. Management's understanding is that its contracted financial investment transactions do not expose the Company to significant risks that might, in the future, generate material losses. In addition, regarding the credits with suppliers described in note 9, Management also believes that there are no material risks in relation to the realization of the respective credits.
f.
Transactions with derivative financial instruments
There were no transactions with derivative financial instruments during the fiscal years in question.
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(In thousands of Brazilian Reais, unless otherwise indicated) g. Capital management
12/31/2011 12/31/2010
Financing and loan debt (-) Cash and cash equivalents Net debt Shareholders' equity Capital Financial leverage index - %
909.215 389.846 519.369 646.874 668.547 78%
132.789 18.569 114.220 288.584 312.829 37%
The Company's objectives in managing its capital are to safeguard its business continuity capacity to offer return to shareholders and benefits to the other stakeholders besides maintaining an optimal capital structure to reduce this cost. In order to keep or adjust the capital structure, the Company may review the dividend payment policy, refund capital to the shareholders or, also, issue new shares or sell assets to reduce, for instance, the indebtedness level .
24. Insurance coverage

The indirect subsidiary Espra maintains insurance contracts with coverage determined in accordance with the orientation of specialists, considering the nature and the degree of risk, in amounts considered sufficient to cover possible significant losses on its assets and responsibilities. The risk assumptions, due to their nature, are out of the scope of the review of financial statements, and therefore, were not examined by our independent auditors. The main values at risk with insurance coverage are R$ 319,035 for power generation and transmission. Due to participation in LER 2009, 2010, LEN 2011 auctions and construction of the wind farms, the Company has the following insurance policies still active:
Subject of the Guarantee Surety bond guaranteeing the faithful performance of the obligations of implementation of the 14 Wind Energy Generation
Amount insured
Maturity Beginning End
Insured
R$53,910
03/29/2010
10/01/2012
National Agency of Electrical Energy
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Centers of LER 2009. Surety bond guaranteeing the faithful performance of the obligations of implementation of the 06 Wind Energy Generation Centers of LER 2010. ICG surety bond Guarantee LER 2009
ICG Surety - LEN 2011
R$29,470
12/06/2012
12/01/2013
R$16,275 R$ 5,560 R$ 1,154 R$ 225
07/22/2011
10/05/2011
07/01/2012
08/10/2012
Registration Guarantee Basic Project Registration Guarantee PB PCH A Surety bond guaranteeing the faithful performance of implementation of the 09 wind farms - LEN 2011 Operational risks
Civil Liability Civil Liability LER 2009 Engineering Risks LER 2009 Operational risks LER 2009 Surety Contractual obligations
07/15/2011 11/01/2011
08/15/2013 11/01/2013
National Energy National Energy National Energy National Energy
Agency of Electrical Agency of Electrical Agency of Electrical Agency of Electrical
R$ 41,193
12/05/2011
06/01/2014
R$ 138,487 R$ 20,000 R$ 10,000 R$ 1,289 R$ 1,289 R$ 183
09/25/2011 09/25/2011 04/14/2011 04/14/2011 06/11/2012 09/08/2011
09/25/2012 09/25/2012 06/30/2012 06/30/2012 06/30/2013 09/08/2012
ESPRA ESPRA Renova Energia Renova Energia Renova Energia ESPRA
The company also has the following insurance policies:
Subject of the Guarantee General civil liability insurance for directors and officers - D&O Civil Liability Insurance for Public Offering of Shares POSI Offices Insurance - Branches Insurance - Head Office
Amount insured R$30,000
Maturity Beginning End 12/18/2011 12/18/2012
Insured
Renova Energia
R$25,000 R$ 2,464 R$ 8,000
07/07/2010 11/19/2011 11/07/2011
07/07/2013 11/19/2012 11/07/2012
Renova Energia Renova Energia Renova Energia
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25.
Capital commitment
Relevant contracts a) Purchase and Sale Contracts for Energy Generation Equipment and Related Services for Wind Farms under Implementation On May 7, 2010, Purchase and Sale Contracts for Energy Generation Equipment and Rendering of Related Services ("Contracts for the Acquisition of Aerogenerators") were entered into with General Electric do Brasil - Equipamentos e Servios de Energia Ltda. ("General Electric"). Such contracts regulate the principles and general rules for the supply of 180 wind turbines of 1.5MW each and the related transportation services and commissions for Wind farms under Implementation. Pursuant to the terms of said contracts, General Electric should complete the installation of our Wind Farms under Implementation by June 30, 2012. Added value of Contracts for the Acquisition of Aerogenerators is R$854,655, to be paid in installments whose maturities are bound to the performance of some obligations by General Electric, as well as to the occurrence of some specific events, as established in said contracts. On August 26, 2010, we entered into a Memorandum of Understanding with General Electric International, Inc. and General Electric do Brasil - Equipamentos e Servios de Energia Ltda. ("General Electric") to include 4 aerogenerators in the contract executed on November 4, 2009. It was also agreed that equipment would be changed to model 1.6 XLE. b) Contracts for the Rendering of Engineering and Civil Construction Services under the Partial Price contract basis at global price On December 27, 2010, SPEs Centrais Elicas Alvorada S.A. ("Alvorada"), Centrais Elicas Candiba S.A. ("Candiba"), Centrais Elicas Guanambi S.A. ("Guanambi"), Centrais Elicas Guirap S.A. ("Guirap"), Centrais Elicas Igapor S.A. ("Igapor"), Centrais Elicas Ilhus S.A. ("Ilhus"), Centrais Elicas Licnio de Almeida S.A. ("Licnio de Almeida"), Centrais Elicas Nossa Senhora Conceio S.A. ("Nossa Senhora Conceio"), Centrais Elicas Paje do Vento S.A. ("Paje do Vento"), Centrais Elicas Pinda S.A. ("Pinda"), Centrais Elicas Planaltina S.A. ("Planaltina"), Centrais Elicas Porto Seguro S.A. ("Porto Seguro"), Centrais Elicas Rio Verde S.A. ("Rio Verde") and Centrais Elicas Serra do Salto S.A. ("Serra do Salto") entered into Contracts for the Rendering of Engineering and Civil Construction Services under the Partial Contract basis at global price with Construtora Queiroz Galvo S.A. ("Queiroz Galvo") and Mercurius Engenharia S.A. ("MESA"). These contracts discipline general principles and rules for all services, supply and other activities necessary to conduct civil construction work, including bases and accesses to implement wind farms that won bid LER 2009.The added value of contracts is R$167,623, to be paid in installments whose maturities are bound to the performance of some obligations by Queiroz Galvo and MESA, as well as to the occurrence of some specific events, as
53

established in said contracts. In addition to making payments according to contracts, SPEs main obligations include obtaining environmental licenses that are necessary to perform services, on a timely basis. c) Contracts for the Supply of Equipment and Rendering of Services for the Integrated Installation of Electric Power Distribution and Transmission Systems, Engineering and Civil Construction under the Partial Contract basis at global price. On December 27, 2010, SPEs Alvorada, Candiba, Guanambi, Guirap, Igapor, Ilhus, Licnio de Almeida, Nossa Senhora Conceio, Paje do Vento, Pinda, Planaltina, Porto Seguro, Rio Verde and Serra do Salto entered into Contracts for the Supply of Equipment and Rendering of Services for the Integrated Installation of Electric Power Distribution and Transmission Systems, Engineering and Civil Construction under the Partial Contract basis at global price with ABB LTDA ("ABB"). These contracts discipline general principles and rules for all services, including the supply of internal distribution networks, unit substations, boosting substations, transmission and distribution lines, connection with ICG and other installations of wind farms that won bid LER 2009. Pursuant to the terms of said contracts, ABB should complete service delivery in May 2012, so that SPEs commercial operation starts on July 1, 2012, and electrical-mechanical installations are free from failures by August 2014. The added value of the contracts is R$85,089, to be paid in installments whose maturities are bound to the performance of some obligations by ABB, as well as to the occurrence of some specific events, as established in said contracts. d) Contract for the Operation and Maintenance of Aerogenerators On April 6, 2011, SPEs Alvorada, Candiba, Guanambi, Guirap, Igapor, Ilhus, Licnio de Almeida, Nossa Senhora Conceio, Paje do Vento, Pinda, Planaltina, Porto Seguro, Rio Verde and Serra do Salto entered into Contracts for the Operation and Maintenance of Aerogenerators with General Eletric Energy do Brasil - Equipamentos e Servios de Energia Ltda. and General Eletric International, INC. ("General Electric"). Such contracts regulate the principles and general rules for the supply of operation and maintenance of 184 wind turbines, model 1.6 XLE, of 1.6MW each. Pursuant to the terms of said contracts, General Eletric will provide operation and maintenance services over 10 years from the final delivery of the last aerogenerator or 12 years from the date that the contract was signed. The added value of the contracts is R$103,040, to be paid in installments whose maturities are bound to the performance of some obligations by General Eletric.
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e) Contract for the Rendering of Operation and Maintenance Services on the Transmission System of Restricted Use On April 6, 2011, SPEs Alvorada, Candiba, Guanambi, Guirap, Igapor, Ilhus, Licnio de Almeida, Nossa Senhora Conceio, Paje do Vento, Pinda, Planaltina, Porto Seguro, Rio Verde and Serra do Salto entered into Contracts for the Rendering of Operation and Maintenance Services on the Transmission System of Restricted Use with Enex O&M de Sistemas Eltricos LTDA. ("ENEX"). These contracts discipline general principles and rules for the rendering of operation and maintenance services on transmission systems of restricted use. Pursuant to the terms of said contracts, ENEX should provide operation and maintenance services over 120 months, counted as of the start of the commercial operation of the first aerogenerator. The added value of the contracts is R$22,046, to be paid beginning as of the 96th month after the start of SPEs commercial operation period, in installments whose maturities are bound to the performance of some obligations by ENEX.
* Carlos Mathias Aloysius Becker Neto Chief Executive Officer * * Pedro V.B. Pileggi Investors Relations, New Businesses, Financial, Controllership, Planning and Administrative Officer
Luiz Eduardo Bittencourt Freitas Chief Legal and Regulatory Officer
Marcelo Amaral da Silva Engineering and Construction Director Reinaldo Silveira Accountant CRC 014311-0/0-S- SP
Ney Maron de Freitas Director for the Environment
55

Financial Statements: December 31, 2011

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Financial Statements: December 31, 2011

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Financial statements

December 31, 2011

Renova Energia S.A. Notes to the financial statements

Renova Energia S.A. Notes to the financial statements

254.459 1.307 4.701 110 40 11.921 392 272.930

7.251 1.118 116.091 174 59 4.852 129.545

389.846 5.152 1.512 13.479 1.408 40 393 411.830

18.569 3.918 1.274 121.059 576 59 105 145.560

Renova Energia S.A. Notes to the financial statements

2.059 149.409 1.031 1.033 1.413 74

5.989 787 652 59

19.566 154.314 1.031 2.262 1.413 171

8.100 6.336 854 1.263 652 150

Total current liabilities

739.440 14.430 753.870

Total shareholders' equity

Total liabilities and shareholders' equity

See the accompanying notes to the financial statements.

Renova Energia S.A. Notes to the financial statements

(3.607) (13.212) (196) (170) 9.971

(10.890) (5.667) (4.068) (1.155) 25.663 (25.586) (22.930) (1.190) (1.466) -

(10.503) (5.667) (3.617) (1.219) 24.983 (14.880) (14.176) (204) (500) -

(11.374) (19.820) (1.183) (1.339) 10.968

(11.374) (4.373) 16.807 12.434

(3.607) (498) 4.073 3.575

77 (14.910) 20.078 5.168

10.103 (12.522) 5.629 (6.893)

Income (loss) before taxes

Current income tax and social contribution

Income (loss) for the period

Renova Energia S.A. Notes to the financial statements

46.536 119.272 160.707 326.515 376.273 702.788

Capital reserve 119.272 (119.272) -

Accumulated losses (25.743) 1.498 (24.245) 2.572 (21.673)

46.536 119.272 160.707 326.515 376.273 702.788

Renova Energia S.A. Notes to the financial statements

(178.855) (3.173) (4.326) (27.075)

(44.206) (1.496) (11.152)

376.126 (20.555) 147.636 (14.338) 36.570 (11.674) (39.234) 488.869

160.707 (13.686) (245) (2.909) 7.745 (10.486) (168) 143.867

376.126 (20.555) 1.359 978.827 (219.689) (70) 171 (241) 1.115.998

160.707 (13.686) 2.121 (5.964) (121) (121) 143.057

247.208 7.251 254.459 247.208

(33.987) 41.238 7.251 (33.987)

371.277 18.569 389.846 371.277

(22.906) 41.475 18.569 (22.906)

See the accompanying notes to the financial statements.

Renova Energia S.A. Notes to the financial statements

(13.529) (13.529) (1.183) (14.712)

(8.548) (8.548) (196) (8.744)

(5.223) (16.017) 15.313 (6.857) 8.456

(4.836) (8.981) 21.669 (5.870) 15.799

10.968 16.807 13.063

9.971 4.073 5.300

3.576 1.393 699 1.060 13.063

716 531 (32) 5.300

13.789 2.142 176 2.572 28.534

11.698 1.249 1.186 1.498 21.428

See the accompanying notes to the financial statements.

Renova Energia S.A. Notes to the financial statements

Renova Energia S.A. Notes to the financial statements

Renova Energia S.A. Notes to the financial statements