EFTA01367028.pdf

Amendment #4 Page 599 of 868 cc!! oil, Centres ECacas Rio Verde S A Centres Fences, Serra do Salto S A 2. Basis of presentation The Group has prepared these combined finaraal statements in accorcema we, International Financial Reporting Standards ('FAS) as issued by the Ireematonal Accouttorg Standards Board ('IASEr) The Group has applied IFRS 1 Fat-Time Acbptein of I rterretonal Financial Reportng Standards fIFFtS1') in its adoption of FRS. The uansacn date (-Transition Date') ro January 1. 2013 The Group has applied IFRS standards effective for Ire period ended as of December 31, 2014 to all years presented in these combined financial statements The Group has never prepared financial statements or finarcoI information on the carve-cut toss of preparation presented herein. Prior to the Group's first-time adoption al IFRS. it reported financial irformation to Rerova m accordance with accourting practices adopted n Brazil (BR GAN') The Group also follows the gudance rn the Accounting Manual for the Brayton Electricity Industry and standards estateshed by the Brazilian National Agency for Electric Energy (Agencra Nacznal de Energe Eenca-ANEEL) The financial information is presented in thousands of Brazilian Rears (RS), u -iless otherwise stated The Group applied tenon rrerdatory exceptions as app&cable for first-time IFRS adopters The Group elected rot bawdy the optional exceptions for fist-time adopters Estimates made by the Group in preparing its first IFRS financial statements reflect the facts and orcumstences which existed at the time such estimateswere made. Accordingly. the estimates made by tie Group to prepare these combined financial statements we consistent with those made in the nstioncal reporting of financial information to Renova Since the Group bet not Wevi0uSti papered financial statements, the (*ratified finance, statements do not include any IFRS 1 first-time ad0pton reconoliatons The financial infamabon wan respect to the Group is reflected an the ircandual legal entitles that comprise the Group. whoh were all under the common control and management of Rerova for all periods presented These combined financial statements have been prepared from the accounting records of Renova and reflect the cash flows, revenues. expenses, assets, and lobelia ct these individual legal altos All transactions and balances between the nd dual legal entees within the Group inn been eliminated n canbinatort Because ire separate legal entries that comprise the Group were not and are riot held by a urge legal entty, Parents net indemment Is gown in lieu of starehdders' equity in these combined financial statements. Parents net investment represents the at-rotative net investment by Renova n the Group through Mat date. The impact of transactors between the Group and Remove that were not hstoncally settled in cash, nclucIng certain intercompany bans, are ate inducted in Parents net investment (see note 14) Dunrg the periods ;resented the Group fuoboned as part of the larger group of companies controlled Cy Renova, and accordingly Renova performed certain operating and corporate overhead functions for tie Group These functions include but are not ammo to, executive oversight, legal, trance, human resources information technology, internal audit financial reporting, tax planning and master relations The costs d such services have been allocated to the Group oased on the most relevant allocation method to the service provided, primarily based on restive percentage of revenue notated capaoty or headtount Management believes such allocations are reasonable, however, they rrey not be indicatye ci the actual expense that woud have teen incurred had the Group been operaarg as a separate early apart from Renova. The cost atocated for dose ructions is included in general and admnstrafire expenses in the comae ed income statements for The historical pencds presented. A complete Oscussion of the Groups retanorenp win Renova and its dfirtated entees together with the cost allocations, is included in rote 14 to the combined financial statements F.279 http://cfdocs.btogo.com:27638/cf/drv7/pub/edgar/2015/07/20/0001193125-15-256461/d78... 7/20/2015 CONFIDENTIAL - PURSUANT TO FED. R. CRIM. P. 6(e) DB-SDNY-0058556 CONFIDENTIAL SDNY_GM_00204740 EFTA01367028