Investor Relations

Business Model


The Light business model, supported by corporate governance and the company's business model, is related to electricity distribution, generation, sales, and service activities.

To develop our activities, we count on established resources and relationships that, according to the International Integrated Reporting Framework, are called "capitals," which are divided into:


This capital represents the infrastructure, the facilities themselves, the materials and equipment owned by Light that are necessary for the operation of business activities, such as: power plants, reservoirs, dams, canals, dykes, spillways, substations, distribution lines and grids, transformers, electrical conductors, circuit breakers, disconnectors, and protection and control devices, as well as support structures such as vehicles, electrical and electronic test laboratories, computer systems, enterprise network, intranet, and internet, among others.


These are the renewable or non-renewable environmental resources and processes that support Light in their supply of services and products, including water, land, forests, and biodiversity.


This capital includes the individual skills, knowledge, and abilities of the Light employees that are part of the organization's collection of experiences and culture. Considers the actions to align the workforce with the organizational culture and the Company's strategies, focusing on results.

Human capital also includes the training actions, internal communication, retention, engagement and promoting integration between different areas to improve processes.


Includes the tacit knowledge, organizational standards and procedures, cooperative systems, patents, licenses, technologies, R&D projects, etc. It also includes the knowledge management processes, to preserve it for future generations.

Social and Relationship

This Capital considers the relationship with the interested parties and/or participation in networks, sharing information and improving individual and collective wellbeing. It also includes established relationships, partnerships, common values, and intangibles related to the brand, reputation. etc.


These are the resources available for the presentation of services and investments, including debts incurred, shares, subsidies received, return on investments made, etc. At Light, financial capital is related to the company's results, the purchase of energy, new business, regulation, and other themes and activities.

Learn more in the 2015 Sustainability Report

Corporate governance

Light's Corporate Governance Manual lists the set of formal mechanisms and practices set aside to meet the objectives of value creation for the Company and its shareholders.

Transparency and dialogue with the market and other stakeholders are insured in the following manner:

  • Construction of a positive dynamic between shareholders, providing clear direction for the Company and agile decision making.
  • Creation of the necessary conditions for effective managements of business by executives;
  • Formalization and organization of interfaces, allowing dialogue and effective understanding between shareholders and executives;
  • Timely and precise reporting of all relevant facts regarding Light, including the financial situation, performance, equity position, and governance.

In the company's governance structure, the Shareholder Forum is the body responsible for consolidating the alignment of the decisions inside the controlling group. It includes the General Assembly, the Fiscal Committee, and the Controller's Forum.

This structure also has Interface Forums, made up of the Board of Directors and by the committees that aid them. These committees are consultative, and do not have executive or decision making roles. They are called or meet to deal with issues listed in the Governance Manual of specific issues designated by the Board of Directors and/or Senior Management.

Board of Directors and committees [G4-38, G4-40]

The Chairman of the Board of Directors is not an executive manager. [G4-39]

The composition of the Board of Directors, at least 20% of the board members are independent, according to the definition of the Listing Rules of the Novo Mercado. The board members elected via the means listed in article 141, §§ 4 and 5, of the Law of Stock Corporations are also considered independent.

Independent Director means a member of the board of directors that: (i) has no ties to the Company, other than an equity interest; (ii) is not a Controlling Shareholder, spouse or close family member (to the second degree) of a Controlling Shareholder, and neither has, nor has had in the three (3) previous years, any ties to any company or entity related to a Controlling Shareholder (excluding persons with ties to public education or government research entities); (iii) in the three (3) previous years has not been an employee or officer of the Company, or of the Controlling Shareholder or of a subsidiary of the Company; (iv) is not a direct or indirect provider, supplier or buyer of goods and/or services, to an extent that would imply loss of independence; (v) is not an employee or senior manager of any company or entity that is offering or requesting services and/or products to and from the Company to an extent that would imply loss of independence; (vi) is not a spouse or close family member (to the second degree) of any senior manager of the Company; and (vii) is not entitled to any payment by the Company other than the consideration earned as director (excluding cash distributions received in the capacity of an equity holder).

On December 31, 2015, the Board of Directors had 11 members and their respective alternates, with two independent board members and one representative of the Company employees. Of the 11 board members, ten where male and one was female. Regarding the alternates, all of the board members are male.

Some of the characteristics and conduct required of board members include the following:

  • Learn details about the Company, its business, and all of the issues submitted to the Board of Directors.
  • Bring to the discussion any issues of interest for Light, offering pertinent contributions;
  • Place the company's limits above those of the partners or other board members;
  • Work well as a team and express themselves appropriately;
  • Have a solid business background;
  • Maintain a good relationship and cooperate with the other board members;
  • Contribute to the long term planning;
  • Prepare for meetings, participate in them, and be available when necessary;
  • Act in an attentive and proactive manner.

The board members have experience in the following areas: energy, investor relations, funding, financial management, finance, economics, telecommunications, electrical engineering, business consulting, business management, legal, communications, project development, banking, military.

Light has a total of five committees: Audit Committee (CAUDIT), Finance Committee (CFIN), Human Resource Committee (CRH), Management Committee (CGEST), and the Governance and Sustainability Committee (CGOV).

See the jurisdiction of each committee in the Governance Manual.

The Governance and Sustainability Committee (CGOV) participated in the recruiting of independent board members for the Board of Directors, developing and managing the selection process.

The CGOV also has sustainability related tasks, such as:

  • Propose practices and rules for governance and sustainability that ensure the proper functioning of the Board of Directors;
  • Conduct the Company's corporate governance and sustainability evaluation process;
  • Aid the Board of Directors in the spreading of the strategic concept of sustainability, seeking to ensure the Company's maintenance of the strategy over the long term.
  • Suggest general guidelines to the Board of Directors for applying sustainability principles.
  • Monitor the initiatives of the Campaign related to sustainable development. [G4-35]

All of the members of the Board of Directors' committees are managers and do not receive specific compensation for this.

Next, we will list the profile and characteristics of their members:

  • Have specific and relevant knowledge for the respective committees they are part of;
  • Are participatory and willing to hold constructive discussions;
  • Have time and analytical capacity available to make the required analyses;
  • Are easy for the main shareholders to access, to interact with during committee discussion, if necessary;
  • Go deep into specific committee topics;
  • Have abilities to coordinate and lead the committee if necessary;
  • Have the capacity to communicate to other board members the critical points of the committee discussions.

The composition of the committees can be found at

Executive Management

The criteria for the selection and hiring of the board members considers their abilities and skills. The openings at any level or sector of the Company are filled, preferably, by professionals in the concession area of Light, but there is not a specific clause for the contracting of local labor. [G4-EC6]

Find out the current composition of Light´s Executive Management

Analyzing risks and opportunities [G4-45, G4-46, G4-47]

The Board of Director's meetings are ordinarily held once a month, and extraordinarily when necessary. Before each meeting, the aid committees, within their jurisdictions, meet to analyze and examine all of the issues presented by Executive Management, expected to the decided on by the Board of Directors.

In the Company's Bylaws, tasks are assigned to the executive managers in accordance with their respective role. The Chief Executive Officer is responsible for coordination the corporate risk management in all of his actions, with policy proposals; the Chief Financial Officer coordinated the management of the financial risk; and the Director of Energy should identify, measure, and manage the risk related to the sale of energy.

The responsibilities of the Board of Directors also include:

  • Inspect the management of executive managers, examining the books and papers of the Company at any time, and requesting information regarding contracts signed or about to be signed;
  • Prevent potential losses of value due to the release of improper financial information or due to the non-release of mandatory information;
  • Support the relationship between Light and the government, labor unions, clients, and main suppliers, acting in common accord with Executive Management.
Conflict resolutions [G4-41]

Light does not have a mechanism of policy for identifying and resolving conflicts of interest beyond those imposed by law. Potential occurrences will be resolved in an individualized manner, as needed.

The Company, its shareholders, managers, and members of the Fiscal Committee must resolve, through the Market Arbitration Chamber, any dispute or controversy that may arise among them, related to or resulting from the application, validity, effectiveness, interpretation, or violation, and its effects of the provisions of the Law of Stock Corporations (Law No. 6.404/1976), in the Light Corporate Bylaws and the rules issued by the National Monetary Council, the Central Bank of Brazil, and the Brazilian Securities and Exchange Commission (CVM). These include the rules applicable to the operation of capital markets in general, in addition to those listed in the Novo Mercado Listing Rules, the Novo Mercado Participation Agreement, the Sanction Regulations, and the Arbitration Regulations of the Market Arbitration Chamber.

Under the Company's Shareholder Agreement, entered into by Cemig, Andrade Gutierrez Concessões, Luce Empreendimentos e Participações, and Rio Minas Energia Participações, on December 30, 2009, the board members designated by the parties shall exercise voting rights in accordance with the common guidelines established in previous meetings, which should be held prior to any assembly or meeting of the Board of Directors.

As a rule, matters shall be approved if they contain affirmative votes representing more than half of the shares. However, there are certain matters in the Shareholder Agreement that require a qualified quorum. According to Article 11, § 1, of the Light Corporate Bylaws, during deliberations regarding the implementation of business by the Company or its subsidiaries with shareholders or related parties, the board members designated by the shareholder who intends to conduct the business will excuse himself during the discussion and vote on the matter.

All of the transactions with the related parties are in compliance with the signed contracts and with the terms released in the Financial Statement Explanatory Notes. Additionally, the concessionaire and authorized companies that are Light subsidiaries should abide by the rules in ANEEL Resolution No. 334/2008, which establishes the procedures for previous and later control of the agency over legal acts and business between concessionaires, trustees, and authorized companies, as well as their related parties.

The main transactions currently made by Light, involving related parties, are the Company's business operations, such as buying and selling of electricity, and actuarial liabilities with the pension fund sponsored by Light and its subsidiaries. The disclosure of these transactions is done through the publication of the minutes of meetings in the Federal Official Gazette (DOU) and submission to the CVM, and are included in the Light Reference Form.

Compensation policy [G4-51, G4-52]

In the structural organization of the Company, there is a specific committee to deal with the compensation of statutory managers: the Human Resource Committee (CRH). This committee is permanent and is made up of members of the Board of Directors. The CRH seeks to revise and suggest to the Board of Directors the compensation policies and guidelines to the statutory directors of the Company, as well as to the members of the Board of Directors and the Fiscal Board, based in the performance goals established by the Board of Directors.

The Board of Directors evaluated the CRH recommendations and approves the amounts for fixed and variable compensation, respecting the limits established in the Ordinary General Assembly.

In the Company's compensation plans there is no clause that allows the confiscation of salary and bonuses if there is poor management or fraudulent accounting (clawbacks). However, Light has rules and mechanisms geared towards ethical conduct, which apply, not only to the labor force, but also to board members and executives.

The supplementary pension plan offered to Light executives and employees is Braslight. The board members do not have a right to receive it, unless they are employees or former employees of the Company. The coverage of the obligations included in the pension plan is detailed in [G4-EC3]

The opinion of the stakeholders are not specifically considered when defining compensation, although the company considers client satisfaction as an indicator to measure the variable compensation results. [G4-53]


A) Board of Directors

The Board of Directors receive fixed compensation, with a monthly honorarium. The amounts are based on the role that hold: active members or alternates. Social fees are withheld and there is reimbursement for expenses with transportation and lodging necessary to perform the job.

B) Statutory Board

The members of the Statutory Board receive fixed and variable compensation, as well as benefits. The fixed compensation represent the honorarium paid monthly for the positions they hold.

The variable compensation is made up of a short term bonus, based on market values and according to the complexity of the position, both connected to the performance of goals and performance indicators. This is a part of the compensation based on the executive's performance and the global indicators for the Company, which allows the sharing of risks and rewards.

In 2015, for the short term bonus, financial indicators - EBITDA, Net Income, and Dividends, BRR - and the quality of services provided - DEC/FEC, Customer Satisfaction Survey, Losses, PDD, and Complaints from the ANEEL Ombudsman.

The benefits are medical and dental insurance, private pension plan, life insurance, and meal vouchers. It is worth noting the social fees are withheld for both fixed and variable compensation.

C) Fiscal Board

The compensation of the Fiscal Board is established by the General Assembly, which according to § 3 of article 162 of Law no 6.404/76 may not be less than 10% of the average compensation given to each director, excluding benefits, representation funds, and variable compensation. The members of this group have fixed compensation, as well as legal reimbursement of expenses with travel and lodging required to execute the job. Social fees are withheld.

D) Employees

Employee compensation is made up of their monthly salary, benefits, and variable compensation.

The package of social benefits includes a private pension plan, meal vouchers, health insurance, life insurance, daycare assistance, social and psychological assistance, and a scholarship to Primeiro de Maio School, among others.

In 2015, the global performance indicators for variable compensation were the following: Non-technical losses over Low Tension Revenue, Collection Rate, DEC, FEC, Customer Satisfaction Surveys, Plant Availability Factor (FID), New Certifications in the Environmental Management System (SGA).


Upon hiring, all employees and suppliers sign and agree that they are fully aware and in agreement with what is established in the Code of Ethics.

In 2015, the Corporate Channel received over 18 claims regarding harassment, abuse, or discrimination, five regarding violation of labor laws, 14 related to favoritism or conflict of interests, fraud, bribery or graft, and 29 claims of internal rules violations. The Ombudsman and Light customer service received 193 administrative claims made by customers, regarding misconduct that violate the Code of Ethics. [G4-HR3, G4-HR12, G4-SO5]

We also held several internal actions to disseminate the Code of Ethics and Business Conduct, revised in 2014.

For our own employees, we launched an online course called Nossa Ética (Our Ethics), which had personalized tutoring and reinforcement and incentive actions for participation, such as a letter from the CEO, notification e-mails, corporate TV, and intranet. In 2015, 3,789 employees took the course. [G4-HR2, G4-SO4]

Light produced and distributed copies of a Brochure called Nossa Ética (Our Ethics) for service providers. The initiative sought to reinforce the Code of Ethics and Business Conduct in a clear and instructional manner, with examples from day-to-day activities that reinforce the importance of an attitude in alignment with the essential principles required to work with companies that are part of Grupo Light. Currently, the company has 8,329 outsourced employees who have already received the brochure. [G4-SO4]

To reinforce the reading of the Code of Ethics and Business Conduct with the entire labor force, we prepared monthly "pills" in an email marketing format with the main points of the documents, such as corruption, harassment, diversity, gift receiving, and relationship with suppliers, and we promote it through the Corporate Channel. [G4-SO4]

Also, through training, lectures, and events, we always present the DNA video, which addresses the practice of Light's values and reinforces the importance of ethical conduct. Specifically, in the case of workers who provide services in Zero Loss Areas (APZs), there were lectures about the topic during orientation. [G4-SO4]

By email, we share memos with examples of real ethical misconduct situations, and their consequences, seeking to provide transparency to the events and reinforce an ethical culture in the company. [G4-SO4]

In 2015, Light structured the Company's compliance program, which considers the risks related to corruption involving public agents, defined by Law 12.846/13, and other stakeholders. The programs has two action fronts. The first is through preventative actions, which spreads the importance of ethics in professional and personal relations. The second front acts to identify corruption or misconduct cases through claims made to the Corporate Channel, and the customer communication channels, as well as through risk monitoring.

Due to our detection mechanisms, in 2015, 86 investigations were completed, of which 34 were considered to be founded. The appropriate administrative measures were adopted.

Also, we mapped the main corruption risks in Light's processes, with 72 identified risks. The appropriate recommendations for mitigation controls were taken. To map the risks, recommend developments, and the create internal guidelines, Light used the assistance of a specialized consulting firm.

For all of the aforementioned actions, Light considers that 100% of the operations are submitted to corruption related risk analysis. [G4-SO3]

Strategy and Sustainability

To execute the strategies, the company uses a management and structured governance model based on ethical, true, and transparent relations with government, society, customers, shareholders, managers, employees, service providers, suppliers, unions, trade associations, and all other stakeholders that relate to the Company and contribute to the achievement of the mission, the realization of the vision, and the building of the brand and the corporate image on a daily basis.

The commitment to create value for the company and its stakeholders can be seen when the priority issues of the Light Materiality Matrix are aligned with the Strategic Planning and the Company's senior management.

The intersection of the Materiality Matrix priority issues with the macrodirectives defined in the Strategic Planning helps to identify the issues that are more connected to the company's strategy.

Light set ten macrodirectives for the 2015-2019 period, with the strategic guideline of combining synergies, operational efficiency, and loss and default prevention. They are:

Catavento, a consulting company specializing in sustainability, validated the issues prioritized in the Materiality Matrix with Light senior management, connecting them to the strategy, with the objective that the Matrix will become a key reference for the basis of Light business decisions and for the direction of the accountability process.

Of the ten strategic microdirectives, three are closely connected to the Materiality Matrix, for are somewhat connected, and only two are slightly connected, as shown in the image below:

The convergence of the strategic actions for sustainable development can be explained by the fact that Light acts in the infrastructure sector, and their activities directly affect the society and the environment where they are inserted.

Risk management [G4-2]

In search of excellence in our management processes, we continually improve the monitoring and management of the risk Light is exposed to.

We consider risk as the probability that an event will occur impacting negatively or positively the company´s results.

Light's risk management acts at both the strategic and corporate level, so that the Strategic Risk Matrix and the Corporate Risk Matrix are revised annually.


The financial risks are related to unplanned events that impact the liquidity and/or cause the deterioration of the Company's capital structure. One of the most critical financial risks is the increase in delinquency, which is related to variables such as income, employment, interest rates, and the price of energy, all elements that affect the payment capacity of customers. This risk becomes critical in the current Brazilian economic landscape, characterized by slow economic growth and returning inflation.

We seek to mitigate this risk with strong investments in the sales department and in the regularization of clients. Especially in the regions occupied by the Pacification Police Units (UPPs). In these areas, we implemented the Comunidade Eficiente (Efficient Community) and Light Legal projects, which created the Zero Loss Areas (APZs). Also, we developed energy efficiency and environmental education actions to reduce waste and promote conscientious consumption. The integrated operations of this set of activities allows a reduction in the delinquency rates in these locations. Educate the consumer, aligning energy usage with payment capacity, is one of the main risk mitigation mechanisms.


The operations risks are related to several Company processes, including unexpected events, such as human error, equipment and system failure, and the action of external agents. These events can provoke substantial losses in the economic value and image of the organization, affecting our clients, and even the long term performance of the Company.

Among the critical operational risks, we highlight the electrical energy losses. To allow the reduction of non-technical losses, Light has been continually investing in actions that include the conventional fraud inspection processes and the modernization of the network and measurement systems, and even the APZ projects.

We also highlight the critical operational risk of accidents at work and with the population. The operations and the maintenance processes for the energy distribution grids, and the generation units involve significant accident risks, with major potential for critical or fatal accidents. These risks can include accidents related to company operations, affecting the workforce - employees and contractors - and/or the population in the concession area.

To mitigate the occurrence of work and population accident risk, in 2013, Light developed the Programa Vida!, which drastically reduced the number and gravity of the accidents. This program, which extends to suppliers and service providers, acts to create awareness about the importance of the life of our employees and the population, emphasizing the need to adopt safe behavior with the entire workforce. Also, constant inspections in the field are done to verify that the teams are complying with the safety procedures. [EU21]

Another relevant risk in the operational realm was for service quality, especially with the supply of electricity and client service. This risk extends to suppliers and contractors. An example is the supplier management risk, which includes possible economic losses or damage to the Company's image, caused by the inappropriate action of suppliers or outsourced contractors. It becomes more critical when a large amount of the expansion, emergency, maintenance, and field operations are carried out by third parties.

To minimize this risk, we use advanced processes for supplier selection and managers. Also, we updated procedures and policies for contracting, and require that suppliers comply with the criteria and directives listed in the Social Responsibility Agreement and Light's Code of Ethics and Business Conduct. This way, we ensure that everyone complies with the guidelines regarding human rights, labor practices, and the reduction of societal impact, including environmental impact, adopted by Light. Therefore, we developed a supply chain that is robust, permanent, and sustainable.


The compliance risks involve legal and regulatory issues, such as changes to the political situation that can impact the energy sector landscape. In a more specific realm, the legislative alterations cause an increase in the Company's legal contingencies.

The risk of legal contingencies considers the unexpected losses without contingency plans from legal procedures, especially from unfavorable results in lawsuits where Light is involved. The monitoring of this risk is incorporated into the routine of the legal department and the controllership, which use the contingency profiles as metrics - if winning the case is probable, possible, or unlikely, - and the entry of new high-cost lawsuits.

Another significant compliance risk is in regards to corruption, which can affect the image of the Company, as well as its client service level. To mitigate this risk, in December of 2014, Light created the Risk and Compliance Management, which is primarily responsible for developing, implementing, and monitoring the anti-corruption Compliance program. This program seeks to create awareness among the entire workforce, including suppliers and service providers, regarding the importance of ethics in labor relations and when interacting with consumers. The program also includes the treatment of reports related to misconduct in violation of the Code of Ethics and Business Conduct, investigating as necessary and applying the appropriate administrative measures. Light systematically reinforces its commitment to ethics and rejects any corruption practices.

Still within compliance risk, when considering the regulatory aspect, the hydrological risk is one of the most critical, because it is due to a deficit in the generation capacity of the hydroelectric plants - known as GSF (Generation Scaling Factor) - unlike what was forecasted in the base scenario. If the hydroelectric plants don't generate 100% of the volume forecasted in the contracts, due to an extended drought for example, the difference between the total amount generated and the physical guarantee will need to be purchased in the short term market at higher prices. Thus, the root cause of the GSF reduction is also due to the lack of rain and the low reservoir levels.

Therefore, the hydrologic risk management includes the monitoring of indicators and scenarios, as well as the rapid adaptation of possible negative consequences of this risk. The monitoring metrics include the reservoir levels, environmental scenarios, monitoring climate indicators, and the evaluation of the political context.

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