Presentation on theme: "1 Restating the Financial Statements 2 nd and 3 rd Quarters 2002."— Presentation transcript:
1 Restating the Financial Statements 2 nd and 3 rd Quarters 2002
2 All financial information in Brazilian GAAP Chronology Cemig filed its Brazilian GAAP 2nd Quarter Financial Statements – ITR with CVM on August 15 th, 2002 On September 25th, 2002, the CVM, in response to a qualification contained in the independent auditor’s letter accompanying the filing, determined that Cemig should accrue a loss provision relating to the CRC receivables and refile the 2nd Quarter Financial Statements. Cemig appealed to the CVM Board on October 10 th, 2002 On January 8th, 2003, CVM denied Cemig’s appeal and demanded the refiling of the 2nd Quarter Financial Statements Cemig refiled its restated 2nd and 3rd Quarter Financial Statements with the CVM on January 22nd, 2003.
3 All financial information in Brazilian GAAP Notice to public Companhia Energética de Minas Gerais – CEMIG, in compliance with Ordinance No. 358 of January 1, 2002, of the Comissão de Valores Mobiliários (the “CVM”) (the Brazilian Securities and Exchange Commission) announced today that it will accrue a loss provision of certain receivables it has from the Government of the State of Minas Gerais, Brazil in its financial statements in the amount of R$1,045,325,000.00 (approximately US$450,000,000). The receivables represent installments becoming due on or after January 1, 2003 under the second amendment, signed in October 2002, to the CRC Assignment Agreement between CEMIG and the State of Minas Gerais. In accordance with CVM rules, this provision will be reflected through a restatement of CEMIG’s Brazilian GAAP second- and third-quarter 2002 financial statements. CEMIG’s U.S. GAAP financial statements for the year ended December 31, 2001 will reflect the provision. CEMIG, together with the Government of the State of Minas Gerais, is continuing to negotiate the payment of the balance due under the second amendment to the CRC Assignment Agreement, including the transfer of the obligation to pay the receivables to the Federal Government.
4 All financial information in Brazilian GAAP Announcement on CRC related loss provision Press conference on January 22 nd Hosted by the new Secretary of Economic Development: Mr. Wilson Brumer Notice to the public: material fact published simultaneously in Brazil, US and Europe. Press release in Brazil, US and Europe
5 All financial information in Brazilian GAAP Values in millions of Reais Shareholder’s equity reduced by R$883 Mi
6 All financial information in Brazilian GAAP Statement of Income Holding
7 All financial information in Brazilian GAAP Net impact of R$ 192 Mi on the Financial Result Holding
8 All financial information in Brazilian GAAP Summary of the changes
9 All financial information in Brazilian GAAP The day after The State is commited to finding means to repay CRC credits –The assignment to the Federal Government is still the best alternative if this can be successfully negotiated. The State is also committed to running Cemig as profitably as any private company –Dividends will be retained in full
10 All financial information in Brazilian GAAP Financial situation remains solid Income reserve used No covenants affected Dividend policy unchanged No cash impact Investment policy unchanged
11 All financial information in Brazilian GAAP BOVESPA Level I : CMIG3 and CMIG4BOVESPA Level I : CMIG3 and CMIG4 NYSE Level II ADR: CIGNYSE Level II ADR: CIG Latibex : XCMIGLatibex : XCMIG Dow Jones Sustainability Index 2000, 2001 and 2002Dow Jones Sustainability Index 2000, 2001 and 2002 Cemig subscribes to the best Corporate Governance practices