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					Message from the CEO


For Light, 2010 was a year in which we conquered significant challenges. The
changes introduced late 2009 in our Company's controlling interests resulted in
modifications in our executive board. The new management team began its tenure in
March 2, 2010 amidst recurrent power supply shortages, specially in the South and
Downtown regions of the city of Rio de Janeiro. The need to swiftly respond to this
challenge and the fact that the executive board began working in such an
environment caused the new team to operate in an integrated fashion since their
very first minute. This integration effort, far from being restricted to the executive
board, also reached other leadership groups within the Company.

Given this setting, an emergency plan was soon laid out in an attempt to reduce the
level of dissatisfaction of those consumers affected by power shortages and the
consequent negative publicity in the media, and thus pave the way for a project
designed to address issues in the long run. The issue was dealt with transparently;
as a result, nowhere in the media could anyone read anything like ―Light could not
be contacted or they did not respond‖. In doing so we managed to avoid the
spreading of negative articles, preventing many from being written at all and
mitigating the impact of any news released that had a potential negative effect on
the Company's reputation.

The first measures adopted ranged from rather simple actions, such as replacing the
material used in underground chamber buoys, which had been systematically stolen
for the copper of such items, to changes of a more strategic nature, including doing
part of underground grid operation and maintenance services with in-house
employees. This in-house approach did not result from an ideological stance but
rather upon the acknowledgment that we could accomplish more, and with better,
cost-effective results if those specific services were performed by our own teams.
The truth of this approach was confirmed when the services provided to our
customers were restored to their prior level of quality.

Those vendors and suppliers involved in and with responsibility for these shortages
that nevertheless showed a capability to provide quality services were called to
satisfy new requirements in terms of qualification and labor conditions of the relevant
work forces. As a result, Light entered into new long-term service agreements that
commanded a significant increase in the unit cost of the relevant services. We
adopted the motto ―Nossa Gente é Toda Gente‖ (―Our People is All People‖) to
signal the message that Light will respect and acknowledge contractor teams and
that we expect from them the same level of commitment to service quality
demanded from our own employees. This bet on the success of long-term alliances
with service providers will be monitored on an ongoing basis so that we can actually
confirm the expected improvement in reliability and productivity levels.



                                                                                          1
Equipment recovery plans were designed over the months, focusing first on our
underground grids. These grids were then the source of most difficulties, the severity
of which was dramatically made known to the public in the incident involving an
underground explosion where a couple of foreign tourists was badly burned.

As a result, a thorough, engineering-level servicing was performed, which included
replacement of obsolete or defective pieces of equipment, partitioning of the grid into
several smaller sections, monitoring of chambers and several preventive measures
to stay ahead of any potential failures. In the meantime, a media campaign was
launched to convey the message that Light was aware of the quality issues affecting
its services, based on the understanding that customers will tend to tolerate failures
of utility companies if they perceive that a genuine effort is being made to improve
the quality of services provided. Conversely, customers will be disgruntled if they
think the utility company is averting or ignoring critique and unwilling to perform any
self-evaluation.

Owing to the fact that Light's underground grid system is the largest in Latin
America, we could not accomplish everything that was required in 2010. In other
words, the recovery work will continue throughout 2011. Our overhead network was
also a point of attention. Approximately 530 km of our overhead network, which were
particularly prone to being damaged due to entanglement with tree branches during
storms or gusts, were replaced for a more modern, safer and compact spacer cable
network.

In order to ensure development of the areas in which it operates, Light made
investments in construction, expansion, and retrofitting of substations and
transmission lines. Six additional substations (three in the Baixada Fluminense, two
in the South Zone of the capital, and one in Itaguaí) are being built. In addition to
this, we are expanding the operations of other six substations. The Company's
investment plan also includes implementation and modernization of three
transmission lines, which together comprise an electric grid of 21 km. These
investments are being made in anticipation of the 2014 Soccer World Cup and the
2016 Olympic Games. These global-scale sports events will put Light's concession
area in the spotlight for billions of spectators around the world.

Contrary to what had happened until very recently, the behavior of consumers within
Light's concession area was consistent with the growth of the country's economy.
The market's average expansion rate was up 4.2% compared to the prior year, with
positive developments being seen in all business segments. In addition to the
increase in purchasing power experienced by lower income individuals, for the first
time in many decades there is a positive and coordinated effort to formalize certain
economical activities and businesses that had until then happened at the margin of
the formal economy. This is the outcome of implementation of new public policies
designed to advance social coexistence and utilization of public facilities.


                                                                                          2
For a large part, this success results from the state government reclaiming the so-
called ―risk areas‖, formerly territories controlled by criminal organizations. This
resumed the urbanization process that is so critical for Light. Indeed, issues such as
fraud and theft of power can reduce the quality of the supply and increase accident
levels. Additionally, these problems also damage consumers, in that they could be
charged lower rates if everyone would pay, the government, because of decreased
taxation, and Light itself. However, the worst effect of such noxious practices is the
advancement of a wasteful culture. Individuals involved in theft usually exhibit in
wasteful power consumption patterns.

Power thefts within Light's concession area add up to over 5,000 GWh per year,
which is equivalent to the supply requirement of a state the size of Espírito Santo.
Only 40% of all power stolen disappear in risk areas. The other 60% disappear in a
scattered fashion over our concession area. However, risk areas offer the best cost-
effective opportunities when community normalization procedures are adopted. This
is an excellent opportunity to add value to our Company and contribute to the
universalization of supply and citizenship. Naturally, this effort requires improvement
in the level of security provided.

Thus, the successful deployment of the so-called Unidades de Polícia Pacificadora
(Pacifier Police Units), or UPPs, has opened a whole new frontier, nonexistent until
then, for a regular electric power consumer market. Working in the trail of the
government's law enforcement teams, Light has entered pacified communities with
the triple goal of supporting government authority through new investments,
improving the quality of power supply services, and fighting fraud and power theft.

Investments in UPPs occur in the form of grid reconstruction actions (i.e.
replacement of posts, cables, and transformers, and installation of electronic
metering systems), renovation of internal premise facilities, and replacement of
lamps and refrigerators. The ultimate goal is to make sure bills will not hurt
consumers' pockets. Throughout 2010 the peoples of seven communities, including
Chapéu Mangueira, Cidade de Deus, and Cantagalo, were reached.

Light resumed deployment of more technologically advanced grids, consistent with
what had been done in prior years. Electronic meters installed atop of light posts
support telemetry and tele-command, which allows measurements, power cut-offs
and reconnection to be made at a distance and without exposing Light's Personnel
to risks. However, this effort, which takes place also in areas other than the UPPs,
happens at a slower pace only due to a limited number of suppliers of duly certified
electronic metering equipment. The situation is aggravated by constraints faced by
the few manufacturers of certified meters, which prevents timely delivery and
installation of a sufficient number of equipment to meet Light's needs. Despite these
shortcomings, the investments made in technological improvements already reflect
in our loss indicators, which have dropped for the third consecutive quarter.


                                                                                          3
In an attempt to increase availability of electronic metering, Light channeled
substantial resources into R&D to design a smart metering system with good
prospects of obtaining certification by Inmetro. Six patent applications were filed with
Inpi in connection with this R&D project. A total of three companies have started
manufacturing prototypes for testing purposes. All this technological advance,
however, is but the tip of the iceberg. The rest consists in the alliance formed by
Light and Cemig to develop the so-called smart grids, which among other benefits
will provide customers with real-time information on their power consumption, thus
allowing predictable changes in consumption patterns. This is a R&D project worth
R$65 million, the scope of which integrates research conducted by the Brazilian
Electricity Regulatory Agency (Aneel), the Ministry of Mines and Energy (MME), and
the U.S. Government through its Trade and Development Agency.

Over 2010, Light improved its relationship with customers. The Company began to
act proactively, providing special support in incidents such as prolonged shortages in
areas with greater potential of large population affected (i.e. downtown Rio de
Janeiro and shopping malls). In such instances, Light staff will now reach
consumers, even at their doorsteps, to clarify issues and even take reimbursement
claims for losses and damages caused by electricity supply issues. In doing so, it
was possible to avoid legal action that could be taken by consumers affected by
supply shortages.

In addition to the foregoing, Light has created an emergency customer support
service, the ―Light Já‖ (Light Now), which allows consumers to report power
shortages using SMS capabilities. We enhanced our call center capabilities to the
point of exceeding ANEEL requirements in terms of ease of access. These
improvements were captured in a survey conducted by the Exame magazine in
which Light ranked first in customer service for power utility companies.

Light continued to leverage its installed hydroelectric power plant capacity of 855
MW in 2010. Our well maintained and operated equipment presented satisfactory
availability levels. The pace of generation expansion efforts was increased when
construction of the 25-MW Paracambí Hydroelectric Power Plant reached full speed.
This facility is slated to start up by the end of 2011. Also running within the schedule
are the construction works for the HPP of Lajes. In a recent development, a machine
was installed in a building within the Lajes Complex, which hosts the largest
operating plants of the Company. A sophisticated environment management layout
was designed to avoid deforestation in connection with construction of a new
pumping station within the complex. A hoist was used to move piping items, with
fittings being reverted in order to allow welding in the inside and thus avoid
elimination of waste to the forest. The Itaocara Plant project has advanced further,
and is only pending the last environmental permits required for commencement of
the construction works.

                                                                                           4
The amount of electricity transactions in 2010 (120 MWmed of conventional power,
and 19 MWmed of stimulus power) was 86% higher than 2009 figures. By the end of
2010, Light had a total of 107 free consumers in its consumer portfolio, including
large manufacturers, shopping malls, hotels and general business premises, in
several locations throughout Brazilian jurisdiction but more specifically in São Paulo
and Rio de Janeiro. In order enhance its operations in the São Paulo market, Light
incorporated a subsidiary for trading energy and providing services in São Paulo
(LightCom). The Company also engaged in projects of energy efficiency for
Petrobrás (the new Cenpes), Fundação Oswaldo Cruz, Rede Globo (Projac), among
others.

Light has contributed actively for the enhancement of Brazil's electric power industry
regulations. As a result of technically qualified interaction, we managed to revert
some penalties that had been imposed on the Company. These included both
unmerited and unreasonable fines. Additionally, Light made significant contributions
of a technical nature in connection with ANEEL's Public Consultation No. 40. This
consultation was launched for the purpose of laying the foundations for the third rate
review cycle, which, as far as Light is concerned, begins in November 2013, and that
has been subject of heated discussions in the electric power industry.

Currently, Light has in its asset portfolio two wind farms in Ceará with a total output
of 30 MW, which are currently in environmental licensing phase. These farms are
expected to become viable once the related power is sold through auctions or free-
market agreements. In addition to these wind farms, Light is actively considering
other investment opportunities in connection with hydroelectric, wind, natural gas,
solid was and photovoltaic generation.

A task force has been set up to promptly take action upon accidents involving
technicians or the public in general. The outcome of this effort has transpired in
minimized suffering of injured individuals and enhancement of the Company's
reputation with the public. However, we do not have only good news to report.
Regrettably we recorded a total of 4 accidents that resulted in death (3 contractors
and 1 lady that touched a live wire). Staff development, in addition to continued
leadership and technical qualification programs, provided through the Academia
Light (Light Academy), has faced the additional challenge of training new hires in
connection with our strategy of keeping grid servicing activities in-house. All
managers were evaluated against competency indicators, an effort that provided
input to our successor mapping program. For the first time ever, this competency
evaluation system was extended to all of the Company's work force.

Our variable compensation policy has once again fulfilled its goal of bringing
individual efforts in line with our corporate goals, a practice that has now been fully
incorporated in our Company's daily activities.


                                                                                          5
As for our relationship with our investors, represented at year end by 32.85% of our
stock being held by minority shareholders (in addition to BNDESPar, which holds
15.02% of our stock), Light organized or took part in several conferences and road
shows, in Brazil and abroad. Because of these efforts and obviously in expectation
of our future operating and financial results, in 2010 our stock experienced a 15%
increase in their value. This percentage was considerably higher than the variation
of the Ibovespa index (1%) and the electricity utilities index, the IEE (12%).

Investments in generation, distribution, and corporate activities amounted to
R$700.6 million. This represents an all-time record. The amount of dividends paid
throughout the year also set an all-time record at the Company. A total of R$795
million was distributed as dividends.

In the accounting front, the challenge remained in converting the Company's
financial statements to international standards, which requires compliance with
rather complex accounting standards that are hard to construe in light of the
circumstances of Brazil and our electric industry. As a result of adopting said
accounting standards, our Company managed to achieve a EBITDA-measured cash
flow of R$1,585 million, plus a net income of R$575 million. These figures provide a
comfortable basis to allow Light will continue to honor its commitments with
consumers, suppliers, creditors, governments, employees and shareholders.

The good results achieved by the Company would never be possible without the
stable and business-oriented environment afforded by federal, state, and municipal
authorities, whose coordinated efforts have ushered in a noticeable progress to Rio
de Janeiro.

Managing a private utility operator in Brazil, in which there still remains a lot of
prejudice against making a profit from a public utility, is no easy task. Success,
however, is a material achievement because Light brings together all the conditions
necessary and sufficient to achieve its trifocals goal of: (a) providing service quality
at a reasonable cost to its consumers; (b) being profitable to its shareholders; and
(c) afford our employees a satisfactory work environment so that they can perform
their duties.

We have overcome our most immediate hurdles. There is much more to be done,
however, specially in terms of increasing our productivity. In order to conquer yet this
objective, we rely on the competence, dedication, and hard work of our more than
11,000 professionals that make the People of Light (3,800 employees and 7,300
outsourced contractors).




                                                                                           6
Corporate Profile

Grupo Light is headquartered in Rio de Janeiro and has 4,070,263 billed clients in its
concession area that consists in 31 municipalities in the State of Rio de Janeiro. The
Group consists of the following companies: Light S.A., the holding company; Light
Serviços de Eletricidade S.A. (Light SESA), the distribution arm; Light Energia S.A.
(Light Energia), the generation and transmission arm; and Light Esco – Prestação
de Serviços S.A. (Light Esco) and Lightcom, the trading and services arm.
                                                  Holding




 Distribution              Generation                            Trading/Services            Technology

     Light                                                   Light Esco       Lightcom
  Serviços de     Light Energia      Itaocara               Prestação de     Comerciali-     Axxiom S.A.
                                                                              zadora de      Axxiom S.A.
  Eletricidade        S.A.         Energia Ltda               Serviços
      S.A.                                                      S.A.         Energia S.A.
           100%             100%            100%                      100%            100%           51%



                                    Lighthidro
                  Lightger S.A.        Ltda
                      (SHPP           (Non                      EBL
                    Paracambi)     Operational)
                            51%             100%
                                                                      33%




Operating Context

Business Environment

As the Government reclaimed its rights over Rio de Janeiro communities through
Pacifying Police Units (UPPs), and as the country undergoes significant economic
growth and Rio lives a new urbanization cycle, particularly due to the important
                                                                                                           7
sports events to be hosted in Rio (the 2014 World Cup and the 2016 Olympic
Games), Light is presented with a scenario of opportunities.

The region of its concession area is also likely to receive large investments in
infrastructure and record significant growth in the oil, tourism, steelwork and logistics
industries, which will also be reflected in the expansion of the labor market and the
rise of new consumption hubs. In addition, the increase in purchasing power has a
direct impact on the increase in electric power consumption, mainly due to the higher
volume of home appliances acquired by the mass of people who migrated to the
middle class.

In order to meet this growing demand we are focusing our investments on strategic
fronts, including the strengthening and improvement of our distribution network,
where the initiative carried out in 2010 with underground chambers stands out,
including the direct contracting of workforce (insourcing) and strong team
qualification. The investments seek to guarantee the quality of the service and are
focused on the execution of preventive actions to reduce the need for corrective
actions.

In power generation, we will expand our current installed capacity, which is currently
855 MW, by 117 MW with the start-up of three new plants in coming years: PCH
Lajes, UHE Itaocara and PCH Paracambi, the latter expected to start-up in late
2011. We are thus working to ensure that the state of Rio de Janeiro will have the
necessary generation capacity to meet local demand.




                                                                                            8
Operational Performance

Energy Distribution

Light SESA is the fourth-largest distribution company in Brazil in terms of number of
clients and the fifth-largest in amount of energy distributed, according to data
furnished by the Energy Research Company (EPE), arm of Ministry of Mines and
Energy.


Tariff Adjustment

On November, 2010, Brazil’s electric power agency (ANEEL) ratified an average
adjustment of 6.99% to Light’s tariffs, effective for the 12-month period beginning
November 7, 2010, and applicable to all consumption classes (residential, industrial,
commercial, rural and others). The adjustment index, consists of two components:
the structural component, which accounts for 8.31% percent of the tariff; and the
financial component of -1.33% valid for this period.


                             Light 2010 Tariff Adjustment

                        Structural TRI              8.31%

                        Financial Additions         -1.33%

                        Total                       6.99%


The annual tariff adjustment process consists of the pass-through to end consumers,
of non-manageable concession costs (energy purchased for supply, sector charges
and transmission charges), which are calculated in detail annually, and the
restatement of the manageable costs by the variation in the IGPM inflation index,
less Factor X, which transfers to consumers the annual efficiency gains of the
concessionaire. The manageable costs of the concession are calculated in detail
only in the years of Tariff Revision.

The 8.34% variation in non-manageable costs (Part A) is mainly due to the increase
in Sector Charges, in turn due both to the recently approved Law 12,111, which
increased the costs of the Fuel Consumption Account and the Research and
Development Account, and the increase in the System Service Charges. Part B,
which corresponds to manageable costs, increased by 7.95%, chiefly due to the
8.81% increase in the IGPM during the period.

Consumers of Light SESA will notice an average increase of 2.20% in their
electricity bills starting November 7, as a result of the inclusion of the above-
                                                                                        9
mentioned negative financial adjustments of 1.33% and the end of the previous
period’s positive financial adjustments of 4.77%.


Market Growth

Billed captive and free clients in the concession area consumed a total of 22,384
GWh in 2010. ; The number of billed captive clients reached 4,070,591 (including
own consumption), while billed free clients totaled 45. The industrial clients CSN,
Valesul and CSA were excluded. When the energy consumed by these clients is
taken into account, the volume increases to 23,170 GWh. In addition to the free
clients, there are nine generators connected to the Company’s distribution network.
Total energy consumption in Light SESA’s concession area (captive customers +
transport of free customers) came to 22,384 GWh in 2010, a 4.2% increase over
2009, largely driven by the strong performance of the free market and the upturn in
residential consumption.
Warmer temperatures during the summer, together with higher income of the
population, were responsible for the increase in billed energy consumption among
Light’s captive clients, especially in the residential segment, that accounted for
36.8% of the total market in 2010.
The number of billed residential clients grew by 1.9%, totaling 3.76 million in
December 2010, with an average monthly consumption of 184.4 kWh in 2010,
compared to 179.5 kWh in 2009.


                                           ELECTRICITY CONSUMPTION (GWh)
                                                  (CAPTIVE + FREE)
                                                                                                    +4,2%


                                                                                                        22.384
                                                                                               21.492
                     +4,6%
                                                                                                         2,925
                                                                                                2,408
                         8.243                            +4,2%
             7.880

                                                              6.680
                                                    6.413
                                        +5,0%       339           523            +2,2%



                                 3,757      3,945                                              19,084   19,459
                                                                           3,442     3,516

                                                                           169           174
                                                    6,074     6,157
                                 1,900      2,228

                                                                           3,273     3,342
                                 1,857      1,717


             2009        2010    2009       2010    2009      2010         2009      2010       2009     2010

               Residential          Industrial        Commercial               Others               Total10

                                                    Captive         Free
Breakdown of consumption

                                                                                           Other
                   Residential     Commercial            Industrial
                                                                                          Classes
Share of total
                       36.8             29.8               17.6                                15.7
market (%)
Number of billed
clients (captive    3,759,911         275,268             11,403                            23,681
market)
Number of billed
clients   (free          -               22                   22                                    1
market)

                                                                             Light Losses Evolution
                                                                                    12 months


                                                          21.82%     21.98%             21.70%            21.48%              21.29%

Energy Losses                                             15.40%     15.56%             15.39%            15.18%              15.00%

Light SESA’s total energy losses amounted to 7,493
                                                             7,269




                                                                         7,504




                                                                                            7,549




                                                                                                                7,544




                                                                                                                               7,493
GWh, or 21.29% of the grid load, in the 12 months
ended December 2010, 0.19 p.p. down on the close-         Dec-09      Mar-10             Jun-10           Sep-10              Dec-10
of-September ratio.
                                                                                Losses (GWh)

In 2010, non-technical losses totaled 5,278 GWh,                                Losses / Grid Load %
                                                                                Non-technical losses %Grid Load
representing 41.8% of billed energy in the low-
voltage market, or 15.00% of the grid load, 0.7 p.p.
down in relation to 2009.                                    Non tecnical losses / Low Voltage market
                                                                             12 months
Conventional energy recovery processes, such as
the negotiation of amounts owed by customers
                                                                      42.7%
where fraud has been detected, resulted in the            42.5%                           42.4%             42.1%
                                                                                                                               41.8%
recovery of 178.2 GWh in 2010, 17.3% higher than
                                                           5,149




                                                                        5,313




                                                                                            5,352




                                                                                                                 5,330




                                                                                                                                 5,278




in the previous year. Fraud regularization programs
yielded a total of 89,366 normalized clients, 0.5%       Dec-09      Mar-10              Jun-10            Sep-10              Dec-10
up on 2009.
                                                                        Non Tecnincal Losses (GW)
Despite the problems occurred in the beginning of                       Non tecnical Losses % Low Voltage Mkt

2010, due to outages affecting the distribution                          Recovered Energy (GW)


network, jeopardizing the loss prevention program,                                    17.3%
                                                                                                        178.2
there was a great recovery during the year after three
                                                                     151.9
consecutive decreases quarter by quarter. The second
quarter mark the beginning of efforts to catch up
following the previous delays. Convetional energy
recovery initiatives were stepped up and moreover the                2009                               2010

new technologies presented important progress with

                                                                                                                         11
the extension of network protection to more then 150,000 clients and the installation
of around 110,000 eletronic meters certified by Inmetro, with billing through remote
electronic metering.
The delay in the approval of electronic meters, which had been an obstacle in
implementing the program of new technologies, was another problem with good
solutions in 2010. These meters are manufactured by the Swiss company Landis +
Gyr and the American company Itron, the only companies approved by Inmetro to
produce the meters until the end of last year, when another supplier - the German
company Elster - got the approval by Inmetro for its centralized remote telemetering
system giving Light one more supplier option.
Collection
                                                                Collection Rate per Segment
The 2010 collection rate stood at 97.9%, 0.6 p.p.
                                                                            Year
up on 2009. It is worth noting that collection in the
retail segment increased from 93.1%, in 2009, to
                                                                                            107.6%107.1%
94.1%. Major and government clients continued                            100.4%100.8%
to record collection rates of more than 100%, due       93.1% 94.1%

to the collection of current and previous past due
bills.
                                                          Retail       Large Customers      Public Sector
In 2010, Provisions for Past Due Accounts (PPD)                          2009    2010
totaled R$254.8 million, representing 3.2% of
gross billed energy. At the end of 2010, Light
                                                             PDD/Gross Revenue (Billed Sales)
implemented a special program called ―War
Against PDD‖, which consists of segmented
collection initiatives, aiming to reverse PDD and
recover the monthly flow of electricity bills by         3.3%             3.2%             3.2%

offering more flexible repayment conditions for
clients in default.
As a result, PDD fell from R$61.7 million in 4Q09
to R$49.3 million in 4Q10, or 2.5% of gross billed         2008         2009                2010
energy. The factors contributing to the result were: (i) the increased number of
negotiations with retail segment clients; (ii) negotiations with 18 hospitals that are
part of the major client base; and (iii) default recovery of nearly 694,000 clients in
4Q10 compared to 426,000 clients in 4Q09, which offset the Company’s operational
difficulties at the beginning of the year.



Operating Quality

Ensuring high levels of quality in the supply of electricity is an essential part of
establishing good relations between the distribution company and its clients. 2010
began with a series of incidents that jeopardized supply, due to substantially-higher-
than-average summer temperatures that caused a bigger-than-expected surge in
                                                                                           12
energy demand, leading Light to further intensify its distribution improvement
investment plan. In 2010, the Company invested R$219.9 million in efforts to improve
the quality of its electricity supply business and increase the capacity of its distribution
network, 41.2% more than the R$155.7 million invested in 2009.

At the end of 2010, the equivalent length of interruption indicator (DEC), expressed in
hours, registered 11.33 hours, while the equivalent frequency of interruption indicator
(FEC), expressed in occurrences, stood at 5.76 times.
The performance of the electricity system was hindered by adverse weather conditions
in 2010, including 1,580 mm of rainfall, 26% more than in 2009 and 32% more than in
2008, and high summer temperatures, which resulted in strong load growth. In addition,
the renewal of agreements with outsourced maintenance and emergency service
providers, which took place in 3Q10, caused delays in these procedures, negatively
impacting network performance.
In the second half of the year, Light implemented the Summer Action Plan, aiming to
prevent outages and other incidents due to the expected increase in demand during
the 2010/2011 summer. In the distribution network, 48 new circuits in 13.8-kV were
installed, 161 km of low-voltage cable were replaced by multiplex cable, and 368 km of
open network were replaced with spacer cable. In 2010, 14,000 transformer vaults and
12,000 manholes were inspected, more than twice as many as in 2009. In addition,
1,594 fiber glass buoys were installed to prevent flooding in the vaults, twice as many
as in 2009, and 2,703 underground reticulated system protectors were inspected, six
times as many as in the previous year.

DEC and FEC as of Dec, 2010

                                         Regulatory         Global
                     INDICATOR
                                         Target             Result
                     DEC Global
                                         9.95               11.33
                          2010
                     FEC Global
                                         8.77               5.76
                     2010

 DEC and FEC
                             Unit                    2008           2009      2010
                             Number             of
 FEC                         interruptions           7              6         5.76
 DEC                         Hours                   11             10        11.33




Customer Service
Light's retail service is evaluated in three annual satisfaction surveys: the ANEEL Index
of Consumer Satisfaction (IASC), Light's Index of Satisfaction with Service Execution
                                                                                         13
 (ISES), and the Abradee survey. Abradee's evaluation is carried out based on three
 indicators: the Perceived Quality Satisfaction Index (ISQP), the Customer Approval
 Index (IAC) and the Overall Satisfaction Index (ISG). For the Large Customers
 segment, Light also carries out its own evaluation on an annual basis, entitled the
 Large Customer Satisfaction Survey.

 In 2010, the disturbances caused by extremely high temperatures in the summer and
 the problems in the underground network early in the year resulted in power supply
 interruptions and caused Light's customers to criticize and question the company. This
 questioning affected the results of some of the satisfaction surveys carried out in the
 year. However, despite these obstacles, an important survey showed that our
 customers realized that the Company was committed to a transparent dialogue about
 these challenges and to proposing medium and long-term emergency solutions. In
 ANEEL's evaluation (IASC), Light reached 67.55% of satisfaction, the highest rate ever
 recorded by the Company. In the previous year, the IASC showed a 64.2% rate.

 In customer service, one of Light's major initiatives in 2010 was the introduction of a
 new call center with the theme "Positive Energy – More Power to Rio," using next-
 generation technologies and processes. The call center has 700 operators and 300
 workstations, and capacity to handle 6.7 million commercial and emergency calls per
 year.
 We also created Light Now, an automatic emergency service channel to report power
 outage via SMS.


 Generation
 The 5,125 MWh of net energy¹ generated in 2010 represents an 5.6% decrease
 compared to the 2009 total. The origin of all of this energy, considered ―clean‖ since it
 was generated exclusively from hydraulic sources, is basin created by the Paraíba do
 Sul River and the Ribeirão das Lajes. According to ANEEL data, Light Energia is
 Brazil’s sixth-largest private hydraulic energy generation company. Its generation
 complex consists of five plants and two pumping stations located in the States of Rio
 de Janeiro and São Paulo totaling 855 MW of installed capacity.
 1
     Gross generation less own consumption, water pumping and technical losses.



 Energy sales totaled 5,651.8 GWh In 2010, 11.5% up on 2009. Energy sold on the
 captive market came to 4,189.7 GWh, identical to the 2009 figure, while energy sold
 on the free market (ACL) amounted to 529.5 GWh, up by 8.9%. Spot market sales
 volume increased by 137% over the year before, driven by the upturn in first-half sales,
 due to higher hydroelectric generation in the National Interconnected System, which
 resulted in more secondary energy for settlement in the CCEE, and to the CCEE
 booking procedures, which failed to deduct the energy consumed by pumps in 1H10,

LIGHT ENERGIA (GWh)                                  4Q10       4Q09        %       2010      2009        %
Regulated Contracting Environment Sales             1,102.1    1,101.4       0.1%   4,189.7   4,189.7    0.0%
Free Contracting Environment Sales                    186.5      161.0     15.9%     529.5     486.0     8.9%
                                                                                                                 14
Spot Sales (CCEE)                                      35.6      117.4     -69.7%    932.7     393.6    137.0%
Total                                              1,324.3     1,379.8     -4.0%    5,651.8   5,069.3 11.5%
totaling around 394.3 GWh. Excluding this factor, 2010 spot market sales volume
would have risen by 35.3%.




Generation Projects
In a few years, three new hydropower plants will add about 117MW in Light’s installed
capacity: Paracambi Small Hydroelectric Plant, Lajes Small Hydroelectric Plant and
Itaocara Hydroelectric Plant
Paracambi Small Hydroelectric Plant. Construction began on this plant in Ribeirão das
Lajes, State of Rio de Janeiro, in late 2009. The plant will have 25 MW of installed
capacity, and is expected to start operations in December 2011. Efforts to relocate
persons from the reservoir area involved in the development of the Paracambi PCH
are in progress. Should be acquired 107 properties related to the areas of the
reservoir, construction site and APP. By the time, were completed the acquisitions of
95 properties, representing 89% of the total to be disappropriated.
Lajes Small Hydroelectric. The preliminary project for this plant, which will be located
in the Lajes Complex in the State of Rio de Janeiro, is undergoing the approval
process. The plant will have 18 MW of installed capacity and is expected to start
operations in the end of 2012.
Itaocara Hydroelectric Plant. The two plants (Itaocara I and II) will have 195 MW of
installed capacity and is located on the Paraíba River between the states of Rio de
Janeiro and Minas Gerais. It is currently in the engineering project approval and
environmental licensing phase. It is expected to start the commercial operations in
2014.


Trading and Services

In the year as a whole, Light Esco’s energy sales amounted to 3,190.5 GWh, 87.4%
higher than in 2009, reflecting the period’s new long- and short-term operations, and
the expansion of the sales contract portfolio to include Owens Illinois, BR Metals, MD
Papéis, Schincariol and TRW. Light Esco also increased the sale of energy from the
Light Group that will no longer be contracted as of 2013.

Furthermore, Light Esco continued to provide consulting services and represent free
customers before the CCEE (broker), with operations totaling 1,960.6 GWh in 2010.

A Light Esco possui atualmente 107 clientes de comercialização de energia, sendo 98
clientes da atividade de trading e 9 clientes na atividade de consultoria e
intermediação de contratos (broker), em comparação a 61 clientes em dezembro de
2009.

                                                                                     15
Currently, Light Esco has 107 energy commercialization clients, versus 61 in
December 2009, 98 of which use the Company’s trading services and nine use its
consulting and contract intermediation (brokerage) services.
Six of Light Esco’s ongoing service contracts were added in 2010, one of which in the
fourth quarter (the implementation of a cooling system for a large shopping mall in the
city of São Paulo).

                               Volume (GWh)         2010       2009        Var.%
                               Trading            1,229.9  645.8          90.5%
                               Broker             1,960.6 1,057.0         85.5%
                               Total              3,190.5 1,702.8         87.4%




Capex
The Company invested R$700.6 million in 2010. The main destination was to improve
the quality of the distribution network, in addition to combat losses, important issues to
ensure a quality service, efficiently and safely to all its customers. Another focus of the
investment was the expansion of the energy generation capacity of the Group
amounted to R $ 121.8 million in the year.

                                                                                   CAPEX (R$ MM)

The High Voltage System received investments of $ 123.6
                                                                                           24.3%
million, the largest ever made in history of Light in this                                              700.6
                                                                                                                   1.3
segment. Among the highlights is the construction of two                                                 121.8
                                                                           563.8     4.2
new substations: Copacabana (120 MVA) and Marapicu                          51.8                         50.0
(60 MVA), the start of construction of four substations and                 57.6

the expansion and improvement in five others. Also, R $
134.9 million was invested in shielded grid, measuring                                                  527.5
                                                                           450.3
system and electronic settlement of fraud.

                                                                           2009                          2010

                                                                  Distribution   Administration    Generation    Commercial




                                                                                                  16
Comments on the Financial Performance and Capital Markets


Financial Performance


Revenue                                                                         Net Revenue

                                                                                                                  6,509
Consolidated net operating revenue totaled R$6,508.6                                   6,207
                                                            5,387
million in 2010, 4.9% up on 2009, mainly impacted by
the distribution and commercialization segments,
which recorded respective growth of 3.2% and
100.7%, in turn due to increased consumption in the
concession area and the greater volume of energy
purchases and sales. The generation segment also
                                                            2008                        2009                       2010
posted a positive performance, with an increase of
8.5% over the year before.




Costs and Expenses                                                          Costs and Expenses
                                                                                 (R$ MN)

In 2010, operating costs and expenses totalized R$                                      5,169                     5,276
5,276.4 millions, an increase of 2.1%, mainly driven by       4,195
costs and expenses incurred by the distribution and
commercialization businesses, which increased by 1.5%
and 80.9%, respectively, over 4Q09.

                                                              2008                      2009                      2010


                                                                                       EBITDA
EBITDA                                                              27.9%
                                                                                       (R$ MN)

                                                                                                               26.6%

                                                                                         24.3%
                                                                                                               1,585
                                                                    1,504
In 2010, EBITDA amounted to R$1,584.6 million, 14.7% up                                  1,381

on 2009, with an EBITDA margin of 26.6%, a 2.3 p.p.
improvement. The distribution segment accounted for 84.2%
of the total, followed by the generation and
                                                                    2008                 2009                  2010

                                                                              EBITDA           EBITDA MARGIN

                                                                                                  17
commercialization segments, with 14.4% and 1.4%, respectively.


Net Income


Light posted net income of R$575.2 million in                             Net Income
2010, 2.3% down on the R$588.8 million                                     (R$ MN)

recorded in 2009, mainly due to the financial             974

result, which was a net expense of R$319.4
million in 2010, 276.1% higher than in 2009.                                  589           575
Financial expenses were mainly impacted by the
actuarial deficit and monetary restatement of the
Braslight liability, which amounted to R$158.9
million. Excluding the non-recurring R$49.3
                                                         2008                2009           2010
million related to Braslight’s actuarial deficit,
annual net income came to R$607.7 million, 3.2% higher than in 2009.




Income Allocation Proposal
At its March 25, 2011 meeting, the Board of Directors approved the dividend proposal
in the amount of R$350,979,306.36, equal to R$1.72 per share, based on the results
of the 2010 fiscal year. The proposal will be submitted to the Ordinary Shareholders
Meeting to be scheduled.

Financial Condition

Net debt at the end of December was R$1,947.4 million, an increase of 18.9%
compared to December 2009. This increase was primarily due to lower cash
generation of the company. Despite the increase in net debt, the ratio net debt /
EBITDA of December 2010 was in line with 2009, 1.2 x.

The Company’s debt has an average term to maturity of 3.1 years. The average cost
of Real-denominated debt was 11.1% p.a., 0.2 p.p. down on the figure at the close of
September 2010, while the average cost of foreign-currency debt (US$ +5.4% p.a.)
remained flat. At the end of December, only 3.0% of total debt was denominated in
foreign currency and, considering the FX hedge horizon, 1.7% of this total was
exposed to foreign currency risk, 0.2 p.p. less than in September 2010. Light’s hedge
policy consists of protecting cash flow falling due within the next 24 months (principal
and interest) through the use of non-cash swap instruments with premier financial
institutions.



                                                                                       18
                                                 Net Debt
                                                 (R$ MN)

                                                                     1,947
                              1,580               1,637

                                                   1.2                1.2
                               1.1




                               2008                2009              2010

                                      Net Debt              Net Debt/EBITDA




Corporate Governance and the Capital Markets

On December 31, 2010, the capital stock of Light S.A. was comprised of 203,934,060
common shares with no par value.

The Company shares have been listed on Bovespa's Novo Mercado since July of
2005, adhering to the best corporate governance practices and the principles of
transparency and equity, in addition to granting special rights to minority shareholders.
Light S.A.’s shares are listed on the Ibovespa, Itag, IGC, IEE, IBrX and ISE indexes.

Light’s Board of Directors is composed of 11 members, 2 of whom are elected
independently. The following five committees support the Board of Directors: Finance,
Management, Audit, Human Resources, and Governance and Sustainability.


Changes in shareholding structure in 2010
On November 17 of 2009, in compliance with the requirements of Section 9.1 of the
shareholders' agreement (signed on 23 March 2006), RME - Rio Minas Energia
Participações SA (RME), promoted the incorporation of Lidil Comercial Ltda. (Lidil),
and on December 31, 2009, RME was divided into three parts. The portions were
incorporated by Andrade Gutierrez SA (AGC), Companhia Energetica de Minas Gerais
(CEMIG), and Luce Emprendimentos e Participações SA (LEPSA), a company formed
and controlled by Luce Brazil Private Equity Fund. Equatorial Energia SA (Equatorial)
remained the sole shareholder of RME. The reorganization of RME by its shareholders
simplified the corporate structure by eliminating the holding company RME, passing
the four shareholders AGC, CEMIG, LEPSA and RME to be holding, each 26,576,149
common shares issued by the Company, representing direct interest of approximately
13.03% of the capital. The Shareholders' Agreement of RME gave place to a new
agreement between the four shareholders of the Company, reproducing the rights and
obligations under the Shareholders Agreement of RME.

                                                                                       19
On December 30, 2009, CEMIG and AGC celebrated the Purchase and Sale
Agreement ("Agreement AGC"), and on March 25, 2010 was held by CEMIG the
payment for the purchase of 25,494,500 (twenty-five million Four hundred and ninety-
four thousand five hundred) common shares of the Company, owned by AGC,
representing 12.50% of the total voting capital of the Company. Moreover, it was held
on November 17, 2010, the payment and transfer of 1,081,649 (one million, eighty-one
thousand, six hundred forty-nine) common shares of the Company, owned by AGC,
representing 0 53% of the total voting capital of the Company to CEMIG,
corresponding to the remaining portion of the acquisition.
On December 30, 2009, the Fundo de Investimento em Participações PCP (―FIP
PCP‖), the indirect controlling shareholder of Equatorial and CEMIG, celebrated the
Purchase and Sale of Shares and Other Covenants (" Agreement Equatorial "), having
Equatorial as an intervener and consenting, and aiming at the indirect sale of the FIP
PCP in the Company, representing 55.41% of an amount of 26,576,149 (twenty six
million, five hundred seventy-six thousand, one hundred and forty-nine) common
shares of the Company or of a society which CEMIG participate in not less than 20%
(twenty percent). On April 29, 2010, the ordinary and extraordinary general meetings
of Equatorial agreed to the split-off upon release of the portion of its net assets
corresponding to their participation in the capital of RME, to a new corporation called
Redentor Energia S.A. ("Redentor"), formed specifically for this purpose at the time of
the Partial Split. The closing of Equatorial Contract is subject to certain conditions laid
down therein, by the registration of the Redentor on CVM and other regulatory
approvals and government agencies, as applicable.
On March 24, 2010, Companhia Energética de Minas Gerais (―CEMIG‖) and
ENLIGHTED PARTNERS VENTURE CAPITAL LLC (―ENLIGHTED‖), signed an option
agreement for the sale of shares (―Option‖), to CEMIG or to another party indicated
thereby. The purpose of this operation was to grant an option to sell shares of LUCE
INVESTMENT FUND (―LUCE Fund‖), which holds 75% of the shares of LUCE BRASIL
FUNDO DE INVESTIMENTO EM PARTICIPAÇÕES (―FIP Luce‖), which in turn,
through LUCE EMPREENDIMENTOS E PARTICIPAÇÕES S.A. (―LEPSA‖) indirectly
holds 26,576,149 common shares issued by the Company, approximately 13.05% of
its total and voting capital. On October 6, 2010, the ENLIGHTED exercised its option
to sell its shares in LUCE Fund to CEMIG or third party specified by it, subject to
fulfillment of certain contractual requirements established, and to approval by ANEEL,
the Administrative Council for Economic Defense - CADE, Banco Nacional de
Desenvolvimento Economico e Social - BNDES and other financial agents and
debenture holders of the Company and its controllers, when necessary.

On October 28, 2010, the Company received a communication from its shareholder
BNDES Participações S.A. – BNDESPAR, announcing the sale of 10,347,200 (ten
million, three hundred and forty-seven thousand and two hundred) common shares
issued by Light S.A. (―Company‖), on the Securities, Commodities and Futures
Exchange (BMF&BOVESPA) between March 19 and October 27, 2010, reducing its

                                                                                        20
interest in the Company by 5.07% (five point zero seven per cent). After this sale,
BNDESPar held 39,429,583 (thirty-nine million, four hundred and twenty-nine
thousand, five hundred and eighty-three) common shares issued by the Company,
equivalent to 19.33% (nineteen point thirty-three per cent) of the Company’s total
capital stock. On December 31, 2010, BNDESPar held 30,631,782 common shares,
corresponding to 15.02% of the Company’s capital.



                                         Light x Ibovespa x IEE
                                   Base jan/09 = 100 until 12/30/2010

                                                                        2010
                                                                        IEE     12%
                           2009
                 220                                                    IBOV     1%
                           IEE   59%
                                                                        LIGT3   15%
                           IBOV 83%
                 200
                           LIGT3 34%
                                                                                      85% Ibovespa
                 180                                                                  78% IEE
                 160                                                                  53% Light
                 140

                 120

                 100
                             R$/share
                  80         01/02/09   17.82
                             12/30/10   25.43
                  60

                  40
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Shareholder Structure


The shareholding structure of Light on December 31, 2010 was: Control Group with
52.13% and free float representing 47.87% which 15.02% with BNDESPar and
32.85% under the control of minority shareholders. The Control Group is, made by
Companhia Energética de Minas Gerais (CEMIG), with 26.06%, Luce
Empreendimentos e Participações SA (LEPS) with 13.03% and Rio Minas Energia SA
(RME) with 13.03%.



Shareholders structure as of December 31, 2010:




                                                                                             21
                                                    Grupo de Controle                                                      Free Float
                                                        52,13%                                                              47,87%



                              CEMIG                     LEPSA                       RME
                            Companhia                    LUCE                 Rio Minas Energia                BNDESPAR             MINORITÁRIOS
                                                                                                                                       EDFI
                          Energética de MG         Empreendimentos
                                                   Participações S.A.

                                   26,06%                    13,03%                    13,03%                         15,02%                   32,85%




                                                                         LIGHT S.A
                                                                        LIGHT S.A
                                                                          (Holding)
                                                                         (Holding)




                  100%          100%                100%                51%             100%              100%             100%               51%
             LIGHT                             LIGHT
           Serviços de      LIGHT               ESCO           LIGHTGER          ITAOCARA          LIGHTCOM          LIGHTHIDRO          AXXIOM
           Eletricidade   Energia S.A.       Prestação de         S.A.           Energia Ltda      Comercializ.          Ltda             Soluções
               S.A                           Serviços S.A.                                        de Energia S.A.                       Tecnológicas




The table below shows Light’s shareholders and the respective number of shares:

                                                                                                                    Social        Capital
Shareholders                       # of Shares                     Country                Particip.
                                                                                                                    (R$)
RME - RIO MINAS
ENERGIA                            26,576,150                      Brazil                 13.03                     290,063,291.07
PARTICIPAÇÕES S.A
COMPANHIA
ENERGÉTICA     DE
                                   53,152,298                      Brazil                 26.06                     580,126,560.31
MINAS GERAIS S.A. -
CEMIG
LUCE
EMPREENDIMENTOS
                                   26,576,149                      Brazil                 13.03                     290,063,280.15
E PARTICIPAÇÕES
S.A.
BNDES
PARTICIPAÇÕES S.A                  30,631,782                      Brazil                 15.02                     334,328,166.35
- BNDESPAR
MARKET                             66,997,681                      -                      32.85                     731,240,900.01
Total                              203,934,060                                            100.00                    2,225,822,197.89




                                                                                                                                                 22
Commitment to the Future

People Management

The actions focused on the Company's internal audience have the purpose of
stimulating the personal and professional development of the 3,693 people who
comprise its workforce, in line with the Company's strategic goals, and the
development of key competences that will secure business sustainability.

In 2010, we had 218,301.2 hours of workforce training and development, with a total of
11,789 participants. The highlights were the Leadership Development Program, the
Operational Training Program, and the Certification of Teams that work in the
underground network with 37,000 hours.

We also had the Employee Recognition Program, the Competences Evaluation
process for Managers and Employees, and the introduction of self-development
incentive programs—namely the Growth Portal and the Passport to Development.

The Social Security Foundation – Braslight, a private pension fund, was founded by
Light with the purpose of providing the Company's employees linked to the Foundation
with retirement income and pension to their dependents.

Workplace Safety

Light was the first company in the electric power industry to adopt the Workplace
Safety Management System (SGTS), a model developed in Canada and customized
to meet the specific needs of our industry with a focus on high risks. The System is
divided into five major subjects: Leadership, Risk Management, Education, Control &
Protection and Monitoring. One year after its implementation, an international audit
company reported that Light's level of adherence to the System reached 51%, within
the Company's target of reaching 50% in the period.

Another Health and Safety initiative was the revision of the Workplace Health and
Safety Policy; the elaboration of 50 step-by-step operating procedures; the safety
lecture with over 25,000 participants, and the introduction of new protection
technologies.


Research and Development (R&D)

The Research & Development (R&D) program is elaborated according to Law no.
9,991 of July 24, 2000, which establishes that electric power distribution utilities
concessionaires must invest 0.2% of their Net Operating Revenue in R&D projects, as
per Aneel resolution no. 271 of July 19, 2000, and according to the guidelines
approved by Aneel Resolution no. 316 of May 13, 2008.
                                                                                   23
In 2010, already under the new Aneel regulation, 12 (twelve) new projects were
contracted with an investment of R$24.7 million, and up to December a total of 89
(eighty-nine) R&D projects were being executed, of which 77 (seventy-seven) projects
were carried out through Light Serviços de Eletricidade S.A., and 12 (twelve) through
Light Energia S.A.

Environment
Light's Environmental Management System (EMS) was implemented in 2001 with the
purpose of preventing several risks to the Company and establishing standards in all of
its activities, handling environmental issues, avoiding fines, embargoes to
undertakings, environmental incidents, legal proceedings and damages to the
Company's image. All of the Company's plants have, in addition to the EMS, which
integrates the environmental requirements of the ISO 14001 standard and the
workplace health and safety requirements of OHSAS 18001. GRI PR1

In 2010, 34 of Light's stations were certified to ISO 14001, surpassing the target
established for this stage of the program, which was of 20 units, and another 101
stations were re-certified. The certification process was fully supported by various
teams to adjust the plants to the standard's requirements.

In the distribution segment, the environmental licenses obtained for the implementation
of seven new projects stand out, and in the generation segment, 300 people were
trained as environmental and safety agents, and 180 of these agents were contracted
by Light for the construction project of the Lajes duct and the reforesting of
approximately 60 hectares of land in the Lajes Complex.


Social Initiatives

In 2010, Light invested R$38 million in the Efficient Community Program, benefiting
over 300,000 people through power efficiency actions in 362 low-income
communities. This initiative is part of Light's Power Efficiency Program (PEP),
guided by the Brazilian Electricity Regulatory Agency (ANEEL), and since its
introduction in 1999, it has already invested R$209.6 million in 141 projects that
include the modernization of lighting, ventilation and cooling systems in public areas
such as gymnasiums and hospitals.

Through the Efficient Community Program, which started in 2002, the Company also
replaces equipment such as refrigerators and light bulbs with more efficient ones, in
addition to developing initiatives to share information and raise awareness about the
responsible use of power among members of low-income communities.

The Santa Marta community, where the first UPP was installed, is an example of the
Company's success in these locations: before 2008, when the Company was
                                                                                         24
starting power efficiency initiatives and building a closer relationship with the
communities, the number of customers was 80, timely payments totaled 24% of
power bills, and losses totaled 93%. Two years later, after investments that
amounted to R$3 million, the number of customers went up to 1,600, timely
payments reached 98% of power bills, and losses fell to only 2.7%.




Other Information:

Independent Auditors

The Company discloses, pursuant to CVM Rule 381/2003, that it engages KPMG
Auditores Independentes to perform external auditing services and to review Grupo
Light’s quarterly financial statements and that said firm has not provided any
service for the Company not related to auditing during the year ending December
31, 2010.

This Management Report includes information regarding projected investments and
non-financial data that do not pertain to the auditing of financial statements and
was therefore not reviewed by the independent auditors.




                                                                                    1
Balanço Social Anual / 2010
Empresa: CONSOLIDADO
1 - Base de Cálculo                                                                   2010 Valor (mil reais)                                   2009 Valor (mil reais)
Receita líquida (RL)                                                                                             6.508.584                                                6.206.897
Resultado operacional (RO)                                                                                          922.619                                                  960.912
Folha de pagamento bruta (FPB)                                                                                      218.471                                                  222.243
2 - Indicadores Sociais Internos                                       Valor (mil R$) % sobre FPB % sobre RL                    Valor (mil R$) % sobre FPB % sobre RL
Alimentação                                                                       14.142                6%                0%               16.762                 8%               0%
Encargos sociais compulsórios                                                     35.428               16%                1%               38.997               18%                1%
Previdência privada                                                                6.618                3%                0%                6.559                 3%               0%
Saúde                                                                              7.712                4%                0%                8.535                 4%               0%
Segurança e saúde no trabalho                                                          98               0%                0%                   210                0%               0%
Educação                                                                              759               0%                0%                   909                0%               0%
Cultura                                                                                 0               0%                0%                     0                0%               0%
Capacitação e desenvolvimento profissional                                         5.736                3%                0%                5.117                 2%               0%
Creches ou auxílio-creche                                                             481               0%                0%                   499                0%               0%
Participação nos lucros ou resultados                                             15.146                7%                0%               20.507                 9%               0%
Outros                                                                             2.855                1%                0%                3.813                 2%               0%
Total - Indicadores sociais internos                                              88.976               41%                1%              101.907               46%                2%
3 - Indicadores Sociais Externos                                       Valor (mil R$)      % sobre RO        % sobre RL         Valor (mil R$)      % sobre RO        % sobre RL
Educação                                                                           2.178                0%                0%                2.165                 0%               0%
Cultura                                                                            5.410                1%                0%                6.178                 1%               0%
Saúde e saneamento                                                                14.749                2%                0%               10.793                 1%               0%
Esporte                                                                               497               0%                0%                   837                0%               0%
Combate à fome e segurança alimentar                                                    0               0%                0%                     0                0%               0%
Outros                                                                            51.221                6%                1%               25.502                 3%               0%
Total das contribuições para a sociedade                                          74.056                8%                1%               45.474                 5%               1%
Tributos (excluídos encargos sociais)                                         3.105.901              337%                48%           2.731.688               284%               44%
Total - Indicadores sociais externos                                          3.179.957              345%                49%           2.777.162               289%               45%
4 - Indicadores Ambientais                                             Valor (mil R$)      % sobre RO        % sobre RL         Valor (mil R$)      % sobre RO        % sobre RL
Investimentos relacionados com a produção/ operação da empresa                    28.678                3%                0%               19.966                 2%               0%
Investimentos em programas e/ou projetos externos                                       0               0%                0%                     0                0%               0%
Total dos investimentos em meio ambiente                                          28.678                3%                0%               19.966                 2%               0%
Quanto ao estabelecimento de ―metas anuais‖ para minimizar resíduos,
                                                                     ( ) não possui metas ( ) cumpre de 51 a 75%              ( ) não possui metas ( ) cumpre de 51 a 75%
o consumo em geral na produção/ operação e aumentar a eficácia na ( ) cumpre de 0 a 50% (X) cumpre de 76 a 100%               ( ) cumpre de 0 a 50% ( X ) cumpre de 76 a 100%
utilização de recursos naturais, a empresa
5 - Indicadores do Corpo Funcional                                                               2010                                                     2009
Nº de empregados(as) ao final do período                                                       3.693                                                    3.694
Nº de admissões durante o período                                                                312                                                      269
Nº de empregados(as) terceirizados(as)                                                         8.010                                                    7.689
Nº de estagiários(as)                                                                            109                                                      101
Nº de empregados(as) acima de 45 anos                                                          1.110                                                    1.359
Nº de mulheres que trabalham na empresa                                                          861                                                      854
% de cargos de chefia ocupados por mulheres                                                  23,10%                                                    21,40%
Nº de negros(as) que trabalham na empresa                                                      1.330                                                    1.006
% de cargos de chefia ocupados por negros(as)                                                16,90%                                                    15,20%
Nº de pessoas com deficiência ou necessidades especiais                                          164                                                      173
6 - Informações relevantes quanto ao exercício da cidadania                                     2010                                               Metas 2011
empresarial
Relação entre a maior e a menor remuneração na empresa                                         45,88                                                      ND
Número total de acidentes de trabalho                                                             22                                                       0
Os projetos sociais e ambientais desenvolvidos pela empresa foram         ( ) direção       ( ) direção e    ( X ) todos(as)       ( ) direção        ( ) direção e   (X ) todos(as)
definidos por:                                                                                gerências    empregados(as)                               gerências    empregados(as)
Os pradrões de segurança e salubridade no ambiente de trabalho foram     ( ) direção e      ( ) todos(as)  ( X ) todos(as) +      ( ) direção e       ( ) todos(as)  ( X ) todos(as) +
definidos por:                                                             gerências      empregados(as)           Cipa             gerências      empregados(as)           Cipa
Quanto à liberdade sindical, ao direito de negociação coletiva e à    ( ) não se envolve     ( ) segue as   ( x ) incentiva e      ( ) não se        ( ) seguirá as ( x ) incentivará e
representação interna dos(as) trabalhadores(as), a empresa:                                normas da OIT      segue a OIT           envolverá       normas da OIT      seguirá a OIT
                                                                                 ( ) direção         ( ) direção e    ( X ) todos(as)        ( ) direção       ( ) direção e    ( X ) todos(as)
A previdência privada contempla:                                                                       gerências     empregados(as)                              gerências     empregados(as)
                                                                                 ( ) direção         ( ) direção e    ( X ) todos(as)        ( ) direção       ( ) direção e    ( X ) todos(as)
A participação dos lucros ou resultados contempla:                                                     gerências     empregados(as)                              gerências     empregados(as)
Na seleção dos fornecedores, os mesmos padrões éticos e de                       ( ) não são      ( ) são sugeridos ( X ) são exigidos      ( ) não serão        ( ) serão        ( X ) serão
responsabilidade social e ambiental adotados pela empresa:                      considerados                                                considerados         sugeridos          exigidos
Quanto à participação de empregados(as) em programas de trabalho             ( ) não se envolve       ( ) apóia      ( x ) organiza e        ( ) não se         ( ) apoiará    ( X ) organizará e
voluntário, a empresa:                                                                                                   incentiva           envolverá                             incentivará
Número total de reclamações e críticas de consumidores(as):                     na empresa           no Procon          na Justiça          na empresa          no Procon         na Justiça
                                                                                  15.412               1.213             38.438             Reduzir 10%        Reduzir 10%       Reduzir 10%
% de reclamações e críticas atendidas ou solucionadas:                          na empresa           no Procon          na Justiça          na empresa          no Procon         na Justiça
                                                                                    ND                  ND                 ND                  100%               100%              100%
Valor adicionado total a distribuir (em mil R$):                             Em 2010: 5.084.931                                          Em 2009: 4.609.936
                                                                             73,68% governo 4,56% colaboradores(as)                      75,50% governo 5,14% colaboradores(as)
Distribuição do Valor Adicionado (DVA):                                      6,90% acionistas 10,45% terceiros 4,41% retido              9,38% acionistas 6,59% terceiros 3,39% retido
7 - Outras Informações




                                                                                                                                                              2
Independent auditors’ report on the financial statements


(A free translation of the original report in Portuguese, as filed with the Brazilian Securities and
Exchange Commission (CVM), prepared in accordance with the accounting practices adopted in
Brazil, rules of the CVM and the International Financial Reporting Standards - IFRS)


To
Board of Directors and Shareholders
Light S.A.
Rio de Janeiro - RJ


We have examined the individual and consolidated financial statements of Light S.A.
(“Company”), identified as Parent Company and Consolidated, respectively, which
comprise the balance sheet as of December 31, 2010 and the respective statements of
operations, of comprehensive income, of changes in shareholders’ equity and of cash
flows for the year then ended, as well as a summary of the significant accounting
policies and other notes to the financial statements.

Management responsibility for the financial statements

The Company’s management is responsible for the preparation and fair presentation of
the individual financial statements in accordance with the accounting practices adopted
in Brazil and of the consolidated financial statements in accordance with International
Financial Reporting Standards (IFRS) issued by the International Accounting Standards
Board - IASB, and in accordance with the accounting practices adopted in Brazil as well
as for the internal controls, which they deemed necessary to enable the preparation of
these financial statements free of material misstatements, regardless of whether due to
fraud or error.

Independent auditor’s responsibility

Our responsibility is to express an opinion on these financial statements based on our
audit, carried out in accordance with Brazilian and International Standards on Auditing.
These standards require compliance of ethical requirements by the auditors and that the
audit be planned and performed for the purpose of obtaining reasonable assurance that
the financial statements are free from material misstatement.




                                                                                                  3
An audit involves performing selected procedures to obtain evidence with respect to the
amounts and disclosures in the financial statements. The procedures selected depend on
the auditor’s judgment, including the assessment of the risks of material misstatements
of the financial statements, regardless of whether due to fraud or error. In the
assessment of these risks, the auditor considers relevant internal controls for the
preparation and fair presentation of the Company’s financial statements, in order to plan
the audit procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion about the effectiveness of the Company’s internal controls. An
audit also includes evaluating the adequacy of the accounting practices used and the
reasonableness of the accounting estimates made by Management, as well as evaluating
the overall presentation of the financial statements taken as a whole.

We believe that the audit evidence obtained is sufficient and appropriate for expressing
our opinion.

Opinion on the individual financial statements

In our opinion, the aforementioned individual financial statements present fairly, in all
material respects, the financial position of Light S.A. as of December 31, 2010, and of
its financial performance and its cash flows for the year then ended, in accordance with
accounting practices adopted in Brazil.

Opinion on the consolidated financial statements

In our opinion, the aforementioned consolidated financial statements present fairly, in
all material respects, the consolidated financial position of Light S.A. as of December
31, 2010, its consolidated financial performance and its cash flows for the financial year
then ended, in accordance with International Financial Reporting Standards (IFRS)
issued by the International Accounting Standards Board - IASB and accounting
practices adopted in Brazil.

Emphasis

As mentioned in note 2, the individual financial statements were prepared in accordance
with accounting practices adopted in Brazil. In the case of Light S.A., these practices
differ from the IFRS applicable to the separate financial statements, only with respect to
the valuation of investments in subsidiaries, associated companies and joint ventures by
the equity accounting method, while for IFRS purposes it would be valued at cost or fair
value.

Other matters

Statements of added value

We have also examined the individual and consolidated statements of added value
(DVA) for the financial year ended December 31, 2010, which are the responsibility of
management, for which presentation is required by the Brazilian Corporation Law for
publicly-held companies and presented as supplementary information under IFRS, as
these standards do not require the presentation of a Statement of Added Value. These
                                                                                        4
statements were submitted to the same audit procedures previously described and, in our
opinion, are presented fairly, in all material respects, in relation to the financial
statements taken as a whole.




Rio de Janeiro, March 25, 2011

KPMG Auditores Independentes
CRC-SP-14.428/O-6-F-RJ




Original in Portuguese signed by
Vânia Andrade de Souza
Accountant CRC-RJ-057.497/O-2




                                                                                     5
                             FISCAL COUNCIL REPORT

The Fiscal Council of LIGHT S.A. in the use of its legal and statutory attributions,
according to the provisions of Article 163, Law 6,404/76, reviewed the Management
Annual Report, the Financial Statements and the proposal for allocation of profit for the
fiscal year ended December 31, 2010, related to parent company and consolidated.
Our review of the financial statements mentioned in the previous paragraph was also
added by an analysis of documents and substantially by information and clarifications
given by Independent Auditors and the Company’s Management to the members of the
Fiscal Council.
Therefore, also considering KPMG Auditores Independentes unqualified report issued
on March 25, 2011, this FISCAL COUNCIL, by unanimous vote of its members, agree
that these documents can be submitted for resolution at the Annual Shareholders
Meeting.

Rio de Janeiro, March 25, 2011.

Eduardo Grande Bittencourt
Chief Executive Officer

Ari Barcelos da Silva
Aristóteles Luiz Menezes Vasconcellos Drummond
Isabel da Silva Ramos Kemmelmeier
Mauricio Wanderley Estanislau da Costa




                                                                                       6
                                                                                         LIGHT S.A.
                                                                                       BALANCE SHEETS
                                                                                     (In thousands of reais)


                                                                                        Parent Company                                                              Consolidated
                                                              Notes   12/31/2010          12/31/2009               01/01/2009                12/31/2010              12/31/2009           01/01/2009
ASSETS
Cash and cash equivalents                                      6            38,295                 14,584                    40,256                   514,109              760,313             548,983
Marketable Securities                                          7                 -                    -                           -                    11,122               68,059              41,143
Consumers, concessionaires and permissionaires                 8                 -                    -                           -                 1,338,704            1,355,854           1,282,855
Taxes and contributions                                        9             1,080                    774                       284                   278,885              442,668             566,011
Inventories                                                                      -                    -                           -                    20,537               14,369              18,603
Receivables from swap transactions                             33                -                    -                           -                       -                      4               6,671
Dividends receivable                                                        48,054                155,701                   236,138                       -                      -                   -
Services                                                                       146                    -                           -                    59,724               46,015              17,622
Prepaid expenses                                                               159                    175                       135                     2,114                2,381               1,667
Other receivables                                              12           23,860                 20,212                       167                   152,973               97,250             106,669

TOTAL CURRENT ASSETS                                                      111,594              191,446                     276,980                 2,378,168            2,786,913           2,590,224

Consumers, concessionaires and permissionaires                 8                 -                     -                         -                    296,261              297,798             292,594
Taxes and contributions                                        9                 -                     -                         -                     57,908               40,767              72,807
Deferred taxes                                                 10                -                     -                         -                    899,265            1,115,546           1,621,104
Financial assets from concessions                              11                -                     -                         -                    469,030              354,784             304,229
Receivables from swap transactions                             33                -                     -                         -                        211                    -               4,413
Escrow deposits                                                                194                   152                       121                    225,251              200,520             194,200
Prepaid expenses                                                                 -                     -                         -                        714                1,658               4,364
Other receivables                                              12                -                     -                         -                      7,865                8,725              26,420
Investments                                                    13        3,356,788             3,513,147                 3,421,766                     17,586               20,388              13,615
Property, plant and equipment                                  14              678                   678                         -                  1,628,893            1,600,568           1,589,779
Intangible assets                                              15                -                     -                         -                  3,613,772            3,422,980           3,267,632

TOTAL NON-CURRENT ASSETS                                                3,357,660            3,513,977                3,421,887                    7,216,756            7,063,734           7,391,157

TOTAL ASSETS                                                            3,469,254            3,705,423                3,698,867                    9,594,924            9,850,647           9,981,381



The notes are an integral part of the financial statements.



                                                                                        LIGHT S.A.
                                                                                       BALANCE SHEETS
                                                                                     (In thousands of reais)


                                                                                                      Parent Company                                                    Consolidated
                                                                          Notes      12/31/2010         12/31/2009             01/01/2009              12/31/2010        12/31/2009        01/01/2009

LIABILITIES
Suppliers                                                                   16                280                 6,348                    283              658,421           564,181          486,204
Taxes and contributions                                                     9                  31                    53                     10              350,169           285,180          230,461
Loans, financing and financial charges                                      17                  -                     -                      -              165,878           197,150          116,799
Debentures and financial charges                                            18                  -                     -                      -              381,332            96,412           61,523
Dividends payable                                                           25            136,598               143,647                231,433              136,598           143,647          231,433
Estimated liabilities                                                                         220                   223                     38               45,264            52,374           57,843
Sector charges - consumer contributions                                     19                  -                     -                      -              117,218           110,791          126,733
Provision for contingencies                                                 20                  -                     -                      -                  -                 -              2,237
Post-employment benefits                                                    21                  -                     -                      -               95,555            95,044           87,744
Other liabilities                                                           22              1,981                 1,524                  1,286              236,318           236,028          304,998
TOTAL CURRENT LIABILITIES                                                                139,110               151,795                233,050            2,186,753          1,780,807       1,705,975

Loans, financing and financial charges                                      17                    -                    -                      -           1,197,500          1,006,204       1,046,550
Debentures and financial charges                                            18                    -                    -                      -             727,891          1,165,759         945,549
Taxes and contributions                                                     9                     -                    -                      -             177,699            303,585         324,743
Deferred taxes                                                                                    -                    -                      -             275,755            301,230         341,113
Provision for contingencies                                                 20                    -                    -                      -             551,897            669,353         993,883
Post-employment benefits                                                    21                    -                    -                      -             920,630            861,386         944,417
Other Liabilities                                                           22                    -                    -                      -             226,655            208,695         213,334

TOTAL NON-CURRENT LIABILITIES                                                                     -                    -                      -          4,078,027          4,516,212       4,809,589

SHAREHOLDERS' EQUITY                                                        24
Capital stock                                                                            2,225,822             2,225,822              2,225,819           2,225,822          2,225,822       2,225,819
Capital reserves
  Recognized granted options                                                                      -              34,406                 22,459                      -          34,406           22,459
  Treasury shares                                                                                 -              (6,361)                     -                      -          (6,361)               -
Profits reserves
  Legal reserve                                                                            162,756               133,999                103,757             162,756            133,999         103,757
  Profit retention                                                                          37,669               499,188                451,669             233,083            499,188         451,669
Proposed additional dividends                                                              409,795               288,693                268,205             214,381            288,693         268,205
Equity valuation adjustments                                                               494,102               518,761                546,978             494,102            518,761         546,978
Retained earnings/accumulated losses - IFRS                                                      -              (140,880)              (153,070)                  -           (140,880)       (153,070)
TOTAL SHAREHOLDERS' EQUITY                                                               3,330,144             3,553,628              3,465,817           3,330,144          3,553,628       3,465,817

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                                              3,469,254           3,705,423            3,698,867               9,594,924          9,850,647       9,981,381

The notes are an integral part of the financial statements.




                                                                                                                                                                                                          7
                                                                                                       LIGHT S.A.
                                                                                                  INCOME STATEMENTS
                                                                                     FOR THE YEARS ENDED DECEMBER 31, 2010 AND 2009


                                                                                                          Parent Company                                                               Consolidated
                                                                  Notes        01/01/2010 to 12/31/2010               01/01/2009 to 12/31/2009             01/01/2010 to 12/31/2010               01/01/2009 to 12/31/2009
NET OPERATING REVENUE                                              28                                       -                                         -                      6,508,584                                6,206,897
COST OF OPERATIONS                                                                                          -                                         -                     (4,633,841)                              (4,419,050)
GROSS PROFIT                                                                                                -                                         -                      1,874,743                                1,787,847

  Operating expenses                                                                                  (6,772)                                   (56,701)                      (632,730)                                (742,006)

OPERATING INCOME                                                                                      (6,772)                                   (56,701)                     1,242,013                                1,045,841


FINANCIAL RESULT                                                                                       2,528                                      1,282                       (319,394)                                 (84,929)
  Revenues                                                         32                                  2,593                                      1,598                       173,223                                   186,745
  Expenses                                                         32                                     (65)                                     (316)                      (492,617)                                (271,674)


EQUITY IN THE EARNINGS OF SUBSIDIARIES                                                               579,394                                    644,223                            -                                         -

NET INCOME BEFORE INCOME TAX AND
SOCIAL CONTRIBUTION                                                                                  575,150                                    588,804                       922,619                                   960,912


  Current income tax and social contribution                       10                                       -                                         -                       (103,482)                                (168,994)
  Deferred income tax and social contribution                      10                                       -                                         -                       (243,987)                                (203,114)



NET INCOME FOR THE YEAR                                                                              575,150                                    588,804                       575,150                                   588,804


Basic and diluted earnings per Share                               27                                2.82000                                    2.88700


  No. of shares, Ex-Treasury                                                                      203,934,060                               203,934,060
The notes are an integral part of the financial statements.



                                                                                               LIGHT - S.A.
                                                              CASH FLOW STATEMENTS FOR THE FISCAL YEARS ENDED DECEMBER 31, 2010 AND 2009
                                                                                         ( In thousands of reais )

                                                                                                                                    Parent Company                                            Consolidated
                                                                                                                   01/01/2010 to 12/31/2010 01/01/2009 to 12/31/2009      01/01/2010 to 12/31/2010 01/01/2009 to 12/31/2009
Cash flows from operating activities
Net income before income tax and social contribution                                                                               575,150                    588,804                        922,619                     960,912

Adjustments of expenses (revenues) not affecting cash
Allowance for doubtful accounts                                                                                                        -                          -                          254,785                     246,311
Depreciation and amortization                                                                                                          -                          -                           80,714                      83,912
Amortization of intangible assets                                                                                                      -                          -                          272,157                     258,700
Share-based payments                                                                                                                   -                       51,673                            -                        51,673
Loss (gain) from the sale of intangible assets / Residual value of derecognized property, plant and equipment                          -                          -                           (3,983)                    (11,807)
Exchange losses (gains) from financial activities                                                                                      -                          -                           (8,024)                    (55,551)
Restatement of contingencies                                                                                                           -                          -                           44,498                      45,035
Adjustment of receivables to present value                                                                                             -                          -                              -                       (11,831)
Interest expenses on loans                                                                                                             -                          -                          259,764                     260,666
Charges and monetary variation on post-employment liabilities                                                                          -                          -                          158,886                      18,188
Provision for / (Reversal of ) contingencies - liabilities                                                                             -                          -                          (42,039)                    109,142
Equity in the earnings of subsidiaries                                                                                            (579,394)                  (644,223)                           -                           -
Other                                                                                                                                  -                          -                           10,654                      13,351

 (Increase)/decrease in assets
Marketable securities                                                                                                                  -                          -                            56,937                    (26,916)
Consumers, concessionaires and permissionaires                                                                                         -                          -                          (236,098)                  (312,683)
Taxes and contributions                                                                                                               (306)                      (490)                        (37,865)                    31,971
Inventories                                                                                                                            -                          -                            (6,168)                     4,234
Receivables from services rendered                                                                                                    (146)                       -                           (13,709)                   (28,393)
Prepaid Expenses                                                                                                                         16                       (40)                          1,211                      1,992
Escrow deposits                                                                                                                        (42)                       -                           (24,731)                    (6,320)
Dividends                                                                                                                          864,490                    669,368                             -                          -
Other                                                                                                                               (3,648)                   (20,045)                        (55,070)                    38,194

Increase/(decrease) in liabilities
Suppliers                                                                                                                            (6,068)                    6,065                          94,240                     30,402
Estimated liabilities                                                                                                                     (4)                     184                          (7,108)                    (5,469)
Taxes and contributions                                                                                                                 (22)                        43                         64,989                     54,719
Sector charges - consumer contributions                                                                                                 -                         -                            (4,227)                   (29,293)
Contingencies                                                                                                                           -                         -                          (119,915)                   (76,320)
Post-employment benefits                                                                                                                -                         -                           (99,131)                   (93,919)
Other liabilities                                                                                                                       320                      (168)                         20,156                    (73,609)

Interests paid                                                                                                                          -                          -                         (252,980)                  (261,514)
Income tax and social contribution paid                                                                                                 -                          -                          (98,042)                  (161,228)

Net cash provided by operating activities                                                                                          850,346                    651,171                       1,232,520                  1,054,549

Cash flows from investment activities
Share acquisition                                                                                                                   (45,352)                 (117,201)                        (45,352)                  (117,201)
Receivables related to shares                                                                                                        61,625                    71,114                          61,625                     71,114
Receivables from the sale of property, plant and equipment                                                                              -                         -                            15,595                     32,408
Receivables from the sale of financial asset / investment                                                                               -                         -                             2,802                        -
Capital increase - mergers                                                                                                              -                         -                               -                            3
Acquisition of property, plant and equipment                                                                                            -                         -                          (141,317)                  (100,790)
Acquisition of intangible assets                                                                                                        -                         -                          (491,021)                  (456,057)
Consumer contributions                                                                                                                  -                         -                            24,604                     31,649
Acquisition of financial assets (concession)                                                                                            -                         -                          (114,646)                   (54,707)
Additions to/acquisition of investment                                                                                              (47,564)                  (36,388)                         (3,976)                    (6,773)
Net cash used in investment activities                                                                                              (31,291)                  (82,475)                       (691,686)                  (600,354)

Cash flows from financing activities
Dividends and interest on equity paid                                                                                             (795,344)                  (594,368)                       (795,344)                  (594,368)
Loans and financing                                                                                                                    -                          -                         1,094,845                    579,440
Amortization of loans and financing                                                                                                    -                          -                        (1,086,539)                  (227,937)
Net cash used in financing activities                                                                                             (795,344)                  (594,368)                       (787,038)                  (242,865)

Increase (decrease) in cash and cash equivalents                                                                                    23,711                    (25,672)                       (246,204)                   211,330

Cash and cash equivalents at beginning of the year                                                                                  14,584                     40,256                         760,313                    548,983
Cash and cash equivalents at end of the year                                                                                        38,295                     14,584                         514,109                    760,313
Changes in cash and cash equivalents                                                                                                23,711                    (25,672)                       (246,204)                   211,330

The notes are an integral part of the financial statements.




                                                                                                                                                                                                                                   8
                                                                                                              LIGHT - S.A.
                                                                                      STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY - Consolidated
                                                                                                YEARS ENDED DECEMBER 31, 2010 AND 2009
                                                                                                        ( In thousands of reais)


                                                                                                                                  PROFIT RESERVES
                                                                                                                                                                      PROPOSED             EQUITY                      RETAINED
                                                                    CAPITAL         CAPITAL            TREASURY                LEGAL           PROFIT                ADDITIONAL          VALUATION                    EARNINGS /                    TOTAL
                                                                     STOCK          RESERVES            SHARES                RESERVE        RETENTION               ADIVIDENDS         ADJUSTMENTS              (ACCUMULATED)LOSSES
BALANCE ON 01/01/2009                                                 2,225,819          22,459               -                  103,757         451,669                    268,205             546,978                          (153,070)          3,465,817

 Realization of equit valuation adjustment                                      -              -                       -                 -               -                         -             (28,217)                           28,217                   -
 Capital increase                                                               3              -                       -                 -               -                         -                   -                                 -                     3
 Recognized granted options                                                     -         51,673                       -                 -               -                         -                   -                                 -                51,673
 Exercised granted options                                                      -        (39,726)                      -                 -               -                         -                   -                                 -               (39,726)
 Treasury Shares                                                                -              -                  (6,361)                -               -                         -                   -                                 -                (6,361)
 Dividends paid - profit reserves                                               -              -                       -                 -         (94,730)                        -                   -                                 -               (94,730)
 Payment of proposed additional dividends                                       -              -                       -                 -               -                  (268,205)                  -                                 -              (268,205)
 Net income for the year                                                        -              -                       -                 -               -                         -                   -                           588,804               588,804
 Allocation of net income for the year:
    Legal reserve                                                               -                -                       -        30,242                -                          -                     -                          (30,242)                 -
    Proposed dividends                                                          -                -                       -             -                -                          -                     -                         (143,647)            (143,647)
    Proposed additional dividends                                               -                -                       -             -                -                    288,693                     -                         (288,693)                 -
    Profit retention reserve                                                    -                -                       -             -          142,249                          -                     -                         (142,249)                 -

BALANCE ON 12/31/2009                                                2,225,822           34,406                   (6,361)        133,999         499,188                    288,693             518,761                           (140,880)         3,553,628



  Realization of equity valuation adjustment                                -                -                       -               -                 -                         -               (24,659)                           24,659                     -
  Loss absorption – adjustment to 1st time adoption of IFRS                 -                -                       -               -            (114,319)                      -                   -                             114,319                     -
  Exercised granted options                                                 -            (12,243)                    -               -                 -                         -                   -                                 -                 (12,243)
  Derecognition of treasury shares                                          -             (6,361)                  6,361             -                 -                         -                   -                                 -                       -
  Transfer of unexercised options                                           -            (15,802)                    -               -              15,802                       -                   -                                 -                       -
  Equity interest related adjustment                                        -                -                       -               -                 -                         -                   -                               1,902                 1,902
  Dividends paid - profit reserves                                          -                -                       -               -            (363,002)                      -                   -                                 -                (363,002)
  Payment of proposed additional dividends                                  -                -                       -               -                 -                    (288,693)                -                                 -                (288,693)
  Net income for the in year                                                -                -                       -               -                 -                         -                   -                             575,150               575,150
  Allocation of net income for the year:
    Legal reserve                                                           -                -                       -            28,757              -                          -                   -                              (28,757)                   -
    Proposed dividends                                                      -                -                       -               -                -                          -                   -                             (136,598)            (136,598)
    Proposed additional dividends                                           -                -                       -               -                -                      214,381                 -                             (214,381)                 -
    Profit retention reserve                                                -                -                       -               -            195,414                          -                 -                             (195,414)                 -

BALANCE ON 12/31/2010                                                2,225,822              -                        -           162,756         233,083                    214,381             494,102                                -            3,330,144

The notes are an integral part of the financial statements.

                                                                                          LIGHT - S.A.
                                                         STATEMENTS OF ADDED VALUE FOR THE YEARS ENDED DECEMBER 31, 2010 AND 2009
                                                                                    ( In thousands of reais )

                                                                                                       Parent Company                                                                                    Consolidated
                                                                          01/01/2010 to 12/31/2010                           01/01/2009 to 12/31/2009                      01/01/2010 to 12/31/2010                  01/01/2009 to 12/31/2009


Revenues                                                                                                 -                                                  -                                  9,582,206                                   9,008,554
  Sales of goods, products and services                                                                  -                                                  -                                   9,836,991                                      9,254,630
  Other revenues                                                                                         -                                                  -                                                -                                      -
  Allowance/Reversal of allowance for doubtful accounts                                                  -                                                  -                                    (254,785)                                     (246,076)
Input acquired from third parties                                                                     (3,060)                                        (2,010)                                  (4,318,036)                                  (4,277,406)
  Costs of Products, Goods and Services Sold                                                             -                                                  -                                  (3,392,464)                                  (3,322,637)
  Material – Energy – third-party services – Other                                                     (3,060)                                         (2,010)                                   (925,572)                                     (954,769)
Gross added value                                                                                     (3,060)                                        (2,010)                                   5,264,170                                   4,731,148
Retentions                                                                                               -                                                  -                                    (352,462)                                     (307,957)
  Depreciation, amortization and depletion                                                               -                                                  -                                    (352,462)                                     (307,957)
Net added value produced                                                                              (3,060)                                        (2,010)                                   4,911,708                                   4,423,191
Added value received in transfers                                                                    581,987                                        645,821                                      173,223                                       186,745
  Equity in the earnings of subsidiaries                                                             579,394                                        644,223                                                  -                                      -
  Financial income                                                                                     2,593                                            1,598                                     173,223                                       186,745
Total added value to distribute                                                                      578,927                                        643,811                                    5,084,931                                   4,609,936


Distribution of added value                                                                          578,927                                        643,811                                    5,084,931                                   4,609,936
Personnel                                                                                              3,492                                         54,511                                      231,752                                       236,764
  Direct remuneration                                                                                  3,182                                          54,293                                      156,253                                       175,273
  Benefits                                                                                               179                                                166                                    31,257                                        35,364
  Government Severance Fund for Employees (FGTS)                                                         131                                                    49                                 15,393                                        20,588
  Other                                                                                                  -                                                      3                                  28,849                                         5,539
Taxes, fees and contributions                                                                           233                                              451                                   3,746,405                                   3,480,428
  Federal                                                                                                233                                                451                                 1,517,026                                      1,392,026
  State                                                                                                  -                                                  -                                   2,220,013                                      2,081,205
  Municipal                                                                                              -                                                  -                                        9,366                                        7,197
Third party capital remuneration                                                                          52                                                  45                                 531,624                                       303,940
  Interest                                                                                                   50                                                 30                                475,835                                       265,265
  Rental                                                                                                     2                                                  15                                 34,630                                        22,960
  Other                                                                                                  -                                                  -                                      21,159                                        15,715
Remuneration of own capital                                                                          575,150                                        588,804                                      575,150                                       588,804
  Dividends                                                                                          350,979                                        432,340                                       350,979                                       432,340
  Retained earnings / accumulated losses for the year                                                224,171                                        156,464                                       224,171                                       156,464


The notes are an integral part of the financial statements.




                                                                                                                                                                                                                                                                9
NOTES TO THE FINANCIAL STATEMENTS
ON DECEMBER 31, 2010 AND 2009
(Amounts in thousands of Brazilian reais)




1. OPERATIONS


The corporate purpose of Light S.A. (Company) and its subsidiaries, headquartered in the City and
State of Rio de Janeiro, is to hold equity interests in other companies, as partner or shareholder, and is
involved in the direct or indirect exploitation, as applicable, of electric power services, including
electric power generation, transmission, sale and distribution systems, as well as other related services.

The Company is listed in the New Market (Novo Mercado) of the São Paulo Stock Exchange (BM&F
Bovespa – under LIGT3).

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

Light Serviços de Eletricidade S.A. (Light SESA) - Publicly-held corporation engaged in the
distribution of electric power, with a concession area comprising 31 cities in the State of Rio de
Janeiro, including its capital.

Light Energia S.A. - (Light Energia) - Privately-held corporation, headquartered in the city of Rio de
Janeiro, whose main activity is to study, plan, construct, operate and exploit systems of electric power
generation, transmission and sales, and related services. It comprises the Pereira Passos, Nilo Peçanha,
Ilha dos Pombos, Santa Branca and Fontes Novas plants, with a total installed capacity of 855 MW.
Light Energia holds interest in the following subsidiaries:

    Central Eólica São Judas Tadeu Ltda. - Company at a pre-operating stage whose main activity
     is the generation and sale of electric power through an wind power plant located in the state of
     Ceará, with an 18 MW nominal power.

    Central Eólica Fontainha Ltda. - Company at a pre-operating stage whose main activity is the
     generation and sale of electric through an wind power plant located in the state of Ceará, with
     an 16 MW nominal power.


Light Esco Prestação de Serviços S.A. - (Light Esco) – Privately-held corporation , headquartered in
the city of Rio de Janeiro, whose main activity is the purchase, sale, import, export and provision of
advisory services in the energy sector.

Lightcom Comercializadora de Energia S.A. (Lightcom) – Privately-held corporation, headquartered in
the city of São Paulo, whose purpose is the purchase, sale, import, export and provision of advisory
services in the energy sector.

Itaocara Energia Ltda. - (Itaocara Energia) – Company in the pre-operating stage, primarily engaged in
the execution of project, construction, installation, operation and exploration of electric power
generation plants.

Lighthidro Ltda. (Light Hidro) – Company in the pre-operating stage that participate in auctions for
concession, authorization and permission for new plants.

                                                                                                       10
NOTES TO THE FINANCIAL STATEMENTS
ON DECEMBER 31, 2010 AND 2009
(Amounts in thousands of Brazilian reais)


Instituto Light para o Desenvolvimento Urbano e Social (Light Institute) – Non-profit private limited
company, engaged in participating in social and cultural projects, with interest in the cities’ economic
and social development, affirming the Company’s ability to be socially responsible.

The subsidiaries jointly-controlled by the Company are:

Lightger S.A. (Lightger) - Company in the pre-operating stage that participate in auctions for
concession, authorization and permission for new plants. On December 24, 2008, Lightger obtained the
installation license that authorizes the start of implementation works of Paracambi small hydroelectric
power plant (PCH). Jointly-controlled by Light S.A (51%) and Companhia Energética de Minas Gerais
- CEMIG (49%).

Axxiom Soluções Tecnológicas S.A. (Axxiom) – Privately-held corporation, headquartered in the city
of Belo Horizonte, state of Minas Gerais, whose purpose is to offer technology solutions and systems
for operating management of public utilities companies, including electric power, gas, water and
sewage, in addition to other public utilities. It is jointly controlled by Light S.A (51%) and Companhia
Energética de Minas Gerais - CEMIG (49%).

Grupo Light’s concessions and authorizations:

                   Concessions / Authorizations            Date of         Maturity Date
                                                          Signature
           Generation, transmission and distribution      Jul/1996          Jun/2026
           PCH Paracambi                                  Feb/2001          Feb/2031
           Itaocara Hydroelectric Plant                   Mar/2001          Mar/2036




                                                                                                     11
NOTES TO THE FINANCIAL STATEMENTS
ON DECEMBER 31, 2010 AND 2009
(Amounts in thousands of Brazilian reais)




2. PRESENTATION OF THE FINANCIAL STATEMENTS

       a) Declaration of compliance (regarding the IFRS and the accounting standards issued by the
          Brazilian Committee on Accounting Pronouncements (CPC)


The financial statements herein include:


Consolidated Financial Statements

The consolidated financial statements were prepared according to the International Financial
Reporting Standards ( IFRS) issued by the International Accounting Standards Board (IASB) and also
according to accounting practices adopted in Brazil (BR GAAP).

In the initial financial statements following the IFRS, in January 1st, 2009, the Company assessed the
mandatory exceptions and optional exemptions presented in IFRS 1 and CPC 37, and presented such
effects in Note 3.


Individual Financial Statements

The individual financial statements are presented according to the accounting practices adopted in
Brazil, in compliance with the provisions of the Corporation Law, and comprise the changes
introduced by Laws no. 11,638/07 and 11,941/09, complemented by new pronouncements,
interpretations and guidance from CPC, issued in 2009 and 2010, approved by CFC Resolutions, and
in accordance with CVM rules.

Pronouncements, interpretations and guidance by CPC, approved by CFC Resolutions and CVM rules,
are convergent with the international accounting standards issued by IASB.

These standards are different from the IFRS applicable to individual financial statements due to the
evaluation of investments in subsidiaries by the equity method in BR GAAP, whilst for IFRS
purposes, it would be calculated at cost or fair value.

However, there is no difference between the consolidated shareholders’ equity and result of operations
attributable to the controlling shareholders, presented by the Company, and the shareholders’ equity
and result of operations of the parent Company presented in its individual financial statements.
Therefore, the consolidated financial statements and the individual financial statements of the parent
Company are being presented side-by-side in a sole set of financial statements.

The Company did not calculate comprehensive income, which is the reason why it is not presenting
the Comprehensive Income Statement.

These are the first consolidated financial statements prepared according to the IFRS in which the CPC
37 was applied.

                                                                                                   12
NOTES TO THE FINANCIAL STATEMENTS
ON DECEMBER 31, 2010 AND 2009
(Amounts in thousands of Brazilian reais)



Financial Statements 2009

Until December 31st, 2009, the Company presented its individual and consolidated financial
statements according to the accounting standards adopted in Brazil, which comprised the changes
introduced by the Laws no. 11,638/07 and 11,941/09 (Provisional Measure nº 449/2008 - MP no.
449/2008), complemented by the pronouncements of the Accounting Pronouncements Committee –
CPC, approved by resolutions of the Federal Accounting Council – CFC and rules of the Securities
Commission – CVM until December 31st, 2008.

As established in the CVM Deliberation no. 609/2009 (CPC 37 – Initial Adoption of International
Accounting Standards), the international standards were retroactively implemented at January 1st,
2009. Therefore, the financial statements originally disclosed were adjusted and are presented
according to the international accounting standards.

The authorization to conclude these financial standards was given by the Board of Directors at March
25th, 2011.

       b) Basis of measurement

The financial statements were prepared based at historical cost, except for the following items:

        Financial instruments measured by fair value through the profit and loss;

        The defined benefit actuarial asset is recognized as the net total of plan assets, adding the
         unrecognized past service cost and unrecognized actuarial losses, deducing the
         unrecognized actuarial gains and the present value of the defined benefit liability; and

        Fixed assets of the generation plants, measured at fair value as deemed cost.

       c) Functional currency and presentation currency

The financial statements are presented in thousands of reais, which is the functional currency of the
Company, except when otherwise indicated, including the explanatory notes.




                                                                                                   13
NOTES TO THE FINANCIAL STATEMENTS
ON DECEMBER 31, 2010 AND 2009
(Amounts in thousands of Brazilian reais)




       d) Use of estimates and judgement

The preparation of the financial statements according to the IFRS and CPC standards demand the
Management to make certain judgements, estimates and premises that affect the application of
accounting policies and the reported amounts of assets, liabilities, revenues and expenses. Actual
results may differ from these estimates.

Estimates and premises are continuously reviewed. Reviews regarding accounting estimates are
recognized in the period when the estimates are effectively reviewed and in any affected future
periods.

Information about premises and estimates that may result in adjustments within the next financial year
are included in the following Notes:

Note 10 – Deferred income tax and social contribution
Note 20 – Contingencies
Note 21 – Post Employment Benefits
Note 28 – Detail of the net operating revenue (unbilled sales)


3. INITIAL ADOPTION OF NEW ACCOUNTING PRONOUNCEMENTS

The approval of the Laws no. 11,638/07 and 11,941/09 started for publicly-held companies the
convergence process with international accounting standards, through issuance, by CPC, and approval
by Brazilian accounting regulating bodies, of several accounting pronoucements, interpretations and
guidance, in two steps: the first step, developed and applied in 2008, with the adoption of the technical
pronouncements CPC 00 to 14 (the latter revoked since 2010) and the second step, with issuance, in
2009, of the technical pronouncements CPC 15 to 43 (except for CPC 34), with mandatory adoption in
2010, with retroactive effects to 2009 for comparability purposes.

The financial statements for the year ended at December 31st, 2010, will be the first presented
according to these accounting pronouncements and according to the IFRS. The Company prepared its
transition opening balance sheet in January 1st, 2009.

a) Exemptions adopted

       The Company has chosen to apply the following exemptions regarding retroactive application:

            Exemption of fair value as deemed cost: Light Energia chose to measure fixed asset
             items by fair value in January 1st, 2009.

            Exemption of business combinations: The Company did not restated the business
             combinations occurred before January 1st, 2009, which is the transition date.

            Exemption related to retroactive application of ICPC 01: the Company considered
             unfeasible to remeasure, individually, the assets comprising the infrastructure used in
             the concession of public service in its acquisition dates, choosing the residual value
                                                                                                 14
NOTES TO THE FINANCIAL STATEMENTS
ON DECEMBER 31, 2010 AND 2009
(Amounts in thousands of Brazilian reais)


                      method to measure: (i) intangible assets, corresponding to the estimated part of
                      investments made, which shall be amortized until the end of the concession and (ii)
                      financial assets corresponding to the unconditional contractual right to receive cash or
                      other financial asset of the grantor for the construction services performed and not
                      amortized until the end of the concession.

b) Reconciliation of the adoption of the CPCs issued in 2009 and 2010 in the transition date and
   reclassifications taken into effect:

          Opening balance sheet in January 1st, 2009:

                                                                                Consolidated
                                                  Published on          INITIAL ADOPTION IFRS              Restated
                                                   12/31/2008     Reclassifications       Adjustments     01/01/2009


 CURRENT ASSETS
 Cash and cash equivalents                                  -               548,983                -            548,983
 Marketable securities                                      -                41,143                -             41,143
 Cash and cash equivalents                              590,126            (590,126)               -                -
 Consumers, concessionaires and permissionaires       1,350,832                 -              (67,977)       1,282,855
 Recoverable taxes                                      836,504            (836,504)               -                -
 Taxes and contributions                                    -               566,011                -            566,011
 Inventories                                             18,603                 -                  -             18,603
 Receivables from swap transactions                       6,671                 -                  -              6,671
 Dividends receivable                                       -                   -                  -                -
 Services provided                                       57,500             (52,888)            13,010           17,622
 Prepaid expenses                                       383,291                 -             (381,624)           1,667
 Other receivables                                      107,879              (1,210)               -            106,669

 TOTAL CURRENT                                        3,351,406            (324,591)          (436,591)       2,590,224

 NON-CURRENT
 Consumers, concessionaires and permissionaires         292,594                  -                 -            292,594
 Recoverable taxes                                    1,109,566           (1,109,566)              -                -
 Taxes and contributions                                    -                 72,807               -             72,807
 Deferred taxes                                             -              1,307,252           313,852        1,621,104
 Financial assets from concessions                          -                304,229               -            304,229
 Receivables                                              4,413                  -                 -              4,413
 Escrow deposits                                        194,200                  -                 -            194,200
 Prepaid expenses                                       129,435                  -            (125,071)           4,364
 Other receivables                                       26,420                  -                 -             26,420
 Investments                                             13,615                  -                 -             13,615
 Property, plant and equipment                        4,059,358           (3,290,903)          821,324        1,589,779
 Intangible assets                                      280,958            2,986,674               -          3,267,632

 TOTAL NON-CURRENT                                    6,110,559             270,493          1,010,105        7,391,157

 TOTAL ASSETS                                         9,461,965             (54,098)           573,514        9,981,381




                                                                                                                          15
NOTES TO THE FINANCIAL STATEMENTS
ON DECEMBER 31, 2010 AND 2009
(Amounts in thousands of Brazilian reais)



                                                                        Consolidated
                                        Published on           INITIAL ADOPTION IFRS                 Restated
                                         12/31/2008      Reclassifications        Adjustments       01/01/2009


 CURRENT LIABILITIES
 Suppliers                                    486,204                     -                  -            486,204
 Payroll                                        2,791                     -                  -              2,791
 Taxes                                        230,461              (230,461)                 -                  -
 Taxes and contributions                            -               230,461                  -            230,461
 Loans, financing and charges                 116,799                     -                  -            116,799
 Debentures and charges                        61,523                     -                  -             61,523
 Dividends payable                            499,638                     -           (268,205)           231,433
 Estimated liabilities                         55,052                     -                  -             55,052
 Sector charges                               126,733                     -                  -            126,733
 Prosvision for contingencies                   2,237                     -                  -              2,237
 Post-employment benefits                      87,744                     -                  -             87,744
 Other liabilities                            519,757               (54,098)          (160,661)           304,998

 TOTAL CURRENT                               2,188,939              (54,098)          (428,866)         1,705,975



 NON-CURRENT
 Loans, financing and charges                1,046,550                    -                  -          1,046,550
 Debentures and charges                        945,549                    -                  -            945,549
 Taxes                                         324,743             (324,743)                 -                  -
 Taxes and contributions                             -              324,743                  -            324,743
 Deferred taxes                                      -                    -            341,113            341,113
 Prosvision for contingencies                  998,460                    -             (4,577)           993,883
 Post-employment benefits                      944,417                    -                  -            944,417
 Other liabilities                             209,603                    -              3,731            213,334

 TOTAL NON-CURRENT                           4,469,322                    -            340,267          4,809,589

 SHAREHOLDERS' EQUITY
 Capital stock                               2,225,819                    -                     -       2,225,819
 Capital reserves
   Recognized granted options                  22,459                     -                     -          22,459
 Profit reserve
   Legal reserve                               103,757                    -                  -            103,757
   Profit retention                            451,669                    -                  -            451,669
 Equity valuation adjustments                        -                    -            546,978            546,978
 Retained earnings/accumulated losses                -                                 115,135            115,135
 TOTAL SHAREHOLDERS' EQUITY                  2,803,704                    -            662,113          3,465,817

 TOTAL LIABILITIES                           9,461,965              (54,098)           573,514          9,981,381




                                                                                                                    16
NOTES TO THE FINANCIAL STATEMENTS
ON DECEMBER 31, 2010 AND 2009
(Amounts in thousands of Brazilian reais)




          Balance sheet in the year ended at December 31st, 2009:
                                                                                 Consolidated
                                                   Published in          INITIAL ADOPTION IFRS
                                                      2009         Reclassifications       Adjustments     Restated 2009


 CURRENT ASSETS
  Cash and cash equivalents                                    -             760,313                  -           760,313
  Marketable Securities                                        -              68,059                  -            68,059
  Cash and cash equivalents                              828,372            (828,372)                 -                 -
  Consumers, concessionaires and permissionaires       1,362,365                   -             (6,511)        1,355,854
  Recoverable taxes                                      675,881            (675,881)                 -                 -
  Taxes and contributions                                      -             442,668                  -           442,668
  Inventories                                             14,369                   -                  -            14,369
  Receivables from swap transactions                           4                   -                  -                 4
  Dividends receivable                                         -                   -                  -                 -
  Services provided                                      131,902             (98,897)            13,010            46,015
  Prepaid expenses                                       260,502                   -           (258,121)            2,381
  Other receivables                                      100,016              (2,766)                 -            97,250
 TOTAL CURRENT                                         3,373,411            (334,876)          (251,622)        2,786,913

 NON-CURRENT
  Consumers, concessionaires and permissionaires         297,798                    -                 -           297,798
  Recoverable taxes                                      820,843             (820,843)                -                 -
  Taxes and contributions                                      -               40,767                 -            40,767
  Deferred taxes                                               -            1,013,289           102,257         1,115,546
  Financial assets from concessions                            -              354,784                 -           354,784
  Escrow deposits                                        200,520                    -                 -           200,520
  Prepaid expenses                                        37,779                    -           (36,121)            1,658
  Other receivables                                        8,725                    -                 -             8,725
  Investments                                             20,388                    -                 -            20,388
  Property, plant and equipment                        4,319,087           (3,496,156)          777,637         1,600,568
  Intangible assets                                      281,608            3,141,372                 -         3,422,980
 TOTAL NON-CURRENT                                     5,986,748             233,213            843,773         7,063,734

 TOTAL ASSETS                                          9,360,159            (101,663)           592,151         9,850,647




                                                                                                                            17
NOTES TO THE FINANCIAL STATEMENTS
ON DECEMBER 31, 2010 AND 2009
(Amounts in thousands of Brazilian reais)




                                                                       Consolidated
                                       Published in           INITIAL ADOPTION IFRS
                                          2009          Reclassifications        Adjustments       Restated 2009


 CURRENT LIABILITIES
  Suppliers                                  564,181                    -                   -             564,181
  Payroll                                      3,338                    -                   -               3,338
  Taxes                                      285,180             (285,180)                  -                   -
  Taxes and contributions                          -              285,180                   -             285,180
  Loans, financing and charges               197,150                    -                   -             197,150
  Debentures and charges                      96,412                    -                   -              96,412
  Dividends payable                          432,340                    -            (288,693)            143,647
  Estimated liabilities                       49,036                    -                   -              49,036
  Sector charges                             110,791                    -                   -             110,791
  Provision for contingencies                      -                    -                   -                   -
  Post-employment benefits                    95,044                    -                   -              95,044
  Other liabilities                          377,471             (101,663)            (39,780)            236,028

 TOTAL CURRENT                             2,210,943             (101,663)           (328,473)           1,780,807


 NON-CURRENT
 Loans, financing and charges              1,006,204                    -                   -            1,006,204
 Debentures and charges                    1,165,759                    -                   -            1,165,759
 Taxes                                       303,585             (303,585)                  -                    -
 Taxes and contributions                           -              303,585                   -              303,585
 Deferred taxes                                    -                    -             301,230              301,230
 Dividends payable                                 -                    -                   -                    -
 Provision for contingencies                 673,930                    -              (4,577)             669,353
 Post-employment benefits                    861,386                    -                   -              861,386
 Other liabilities                           251,298                    -             (42,603)             208,695

 TOTAL NON-CURRENT                         4,262,162                     -            254,050            4,516,212

 SHAREHOLDERS' EQUITY
 Capital stock                             2,225,822                     -                     -         2,225,822
 Capital reserves
   Recognized granted options                 34,406                     -                     -           34,406
   Treasury shares                            (6,361)                    -                     -           (6,361)
 Profits reserve
   Legal reserve                             133,999                     -                  -             133,999
   Profit retention                          499,188                     -                  -             499,188
 Equit valuation adjustments                       -                     -            518,761             518,761
 Retained ernings/accumulated losses               -                     -            147,813             147,813
 TOTAL SHAREHOLDERS' EQUITY                2,887,054                     -            666,574            3,553,628

 TOTAL LIABILITIES                         9,360,159             (101,663)            592,151            9,850,647




                                                                                                                     18
NOTES TO THE FINANCIAL STATEMENTS
ON DECEMBER 31, 2010 AND 2009
(Amounts in thousands of Brazilian reais)



             Income statement for the year ended at December 31st, 2009:
                                                                                                     Consolidated
                                                                    Published                 INITIAL ADOPTION IFRS                        Restated
                                                                      2009                Reclassification        Adjustments                2009


 REVENUES                                                              8,641,045                           -               613,585            9,254,630
 DEDUCTIONS OF REVENUES                                                (3,208,739)                         -               161,006           (3,047,733)

 NET REVENUE                                                           5,432,306                           -               774,591            6,206,897
 COST OF OPERATIONS                                                    (3,819,422)                         -               (599,628)         (4,419,050)



 GROSS PROFIT                                                          1,612,884                           -               174,963            1,787,847

 OPERATING EXPENSES                                                     (736,994)                      -                    (5,012)           (742,006)
 General and administrative expenses                                    (427,904)                      -                        -             (427,904)
 Selling expenses                                                       (322,389)                      -                        -             (322,389)
 Other operating income                                                   38,144                       -                        -               38,144
 Other operating expenses                                                (24,845)                      -                     (5,012)            (29,857)


 OPERATING INCOME                                                        875,890                           -               169,951            1,045,841

 FINANCIAL INCOME                                                        (70,663)                          -                (14,266)            (84,929)
  Revenues                                                               201,864                                            (15,119)           186,745
  Expenses                                                              (272,527)                                              853            (271,674)


 EQUITY IN THE EARNINGS OF SUBSIDIARIES                                           -                        -                        -                 -


 NET INCOME BEFORE INCOME TAX AND
 SOCIAL CONTRIBUTION                                                     805,227                           -               155,685             960,912

   Current income tax and social contribution                           (168,994)                          -                    -             (168,994)
   Deferred income tax and social contribution                           (31,402)                          -               (171,712)          (203,114)

 NET INCOME FOR THE YEAR                                                 604,831                           -                (16,027)           588,804




Table with the effects of the adjustments arising from the adoption of the issued CPCs in the
Shareholders’ Equity at January 1 st, 2009 and at December 31st, 2009, and in the Net Income of 2009,
with notes thereto:

                                                                Parent Company                                          Consolidated
                                                           12/31/2009          01/01/2009                        12/31/2009          01/01/2009
                                                    Shareholders                      Shareholders    Shareholders            Shareholders
                                                       Equity      Net Income            Equity          Equity    Net Income    Equity

 Balance before the adoption of the new practices     2,887,054      604,831            2,803,704            2,887,054        604,831       2,803,704

 Investiments (*)                                        666,574           -               662,113                  -               -
 Equity method (*)                                           -         (16,027)                -                    -               -              -
 Dividends above the mandatory minimum (6)                                 -                   -                288,693             -          268,205
 Regulatory assets and liabilities (1)                       -             -                   -               (205,095)        199,512       (404,607)
 Fair value as deemed cost (4)                               -             -                   -                786,000         (42,754)       828,754
 Pre-operational expenses (9)                                -             -                   -                 (8,364)           (934)        (7,430)
 Other (9)                                                                 -                   -                  4,312            (140)         4,452
 Deferred income tax and social contribution (5)             -             -                   -               (198,972)       (171,711)       (27,261)
 Total of adjustments                                    666,574       (16,027)            662,113             666,574          (16,027)       662,113

 Balance after the adoption of the new practices      3,553,628      588,804            3,465,817            3,553,628        588,804       3,465,817



(*) Reflex effect of subsidiaries in the parent company

                                                                                                                                                           19
NOTES TO THE FINANCIAL STATEMENTS
ON DECEMBER 31, 2010 AND 2009
(Amounts in thousands of Brazilian reais)


Description of the main adjustments arising from the new accounting pronouncements which affected
the financial statements of the Company:

   (1) Framework of the preparation and presentation of the financial statements (CPC Framework):
       This pronouncement establishes, among other concepts, the basis for recognition of assets,
       liabilities, revenues and expenses.

       The differences between the estimated amounts included in the calculation of the electricity
       tariff and those effectively incurred by the Company, recognized before applying the new
       CPCs as regulatory assets and liabilities are not, according to this pronouncement, recognized
       in the balance sheet since they do not fit in the definition of assets and/or liabilities. Therefore,
       the balances of regulatory assets and liabilities accounted for before the date of initial adoption
       of the new CPCs were recorded against retained earning and in the income statement of the
       years 2009 and 2010, according to the competence period.

   (2) CPC 25 – Provisions, Contingent Liabilities and Contingent Assets: The objective of this
       pronouncement is to set forth the application of adequate recognition criteria and basis of
       measurement to provisions, contingent liabilities and assets, as well as the disclosure of
       sufficient information in the explanatory notes. According to this pronouncement, the amount
       recognized as provision must be the best estimate of the demanded disbursement to settle the
       present liability in the date of the balance sheet. The best estimate of the demanded
       disbursement to settle the present liability is the amount the Company would reasonably pay to
       settle the liability in the date of the balance sheet or to transfer it to a third party at this
       moment.

      Considering that the amounts recognized in the account “Services Rendered” related to the
      expenditures incurred in the Research and Development (R&D) and Energy Efficiency
      Programs (EEP) represent amounts effectively disbursed by the Company, reducing, therefore,
      the remaining total amount the Company shall disburse in expenditures of this nature, such
      amounts were written off against the provision account in Liabilities, so that they come to
      represent solely the remaining total amount to be disbursed for EEP and R&D.

   (3) CPC 26 – Presentation of the Financial Statements: The objective of this Pronouncement is to
       define the basis for the presentation of the financial statements and to assure their
       comparability, either with previous periods for the same entity, or with the financial statements
       of other entities. In this scenario, this Pronouncement establishes general requirements to the
       presentation of financial statements, guidelines for their structure and minimal content
       requirements.

      Deferred income tax and social contribution expected to be realized within twelve months after
      the presentation of the financial statements were accounted for in current assets, as provided in
      the Instruction CVM 371/2002. In compliance with CPC 26, these deferred taxes are now fully
      accounted for in non-current assets/liabilities.

   (4) CPC 27 – Fixed Assets: The objective of this Pronouncement is to establish the accounting
       procedures regarding fixed assets, in order to allow users of financial statements to understand
       information about investments of the entity in its fixed assets, as well as its changes. The main
       points to be considered in accounting for fixed assets are asset recognition, establishing their
       accounting values and depreciation values and devaluation losses to be recognized thereto.
                                                                                                      20
NOTES TO THE FINANCIAL STATEMENTS
ON DECEMBER 31, 2010 AND 2009
(Amounts in thousands of Brazilian reais)



      In compliance with the guidelines provided in the pronouncements related to this matter, the
      subsidiary Light Energia has adopted fair value as the deemed cost deemed for the fixed assets
      of the plants that presented their book value substantially lower than their fair value. This
      procedure was encouraged by CPC, through ICPC 10 (Clearance about CPC 27 and CPC 28)
      and by CVM and the Company believes it represents the adoption of the best corporate
      governance practices in the preparation of financial statements. The fair value adjustment of
      the asset, in the amount of R$828,754 had, as its counterpart, the shareholders’ equity account
      denominated “Equity Valuation Adjustments”, net of deferred income tax and social
      contribution of R$281,776. Depreciation over the referred adjustment shall neither affect the
      income tax and social contribution calculation basis, nor the basis of dividend distribution. The
      Company maintained the useful lives of its assets used so far, since they are estimated and set
      by ANEEL and are used in the industry and accepted as adequate by the market, being such
      procedure supported by OCPC 05 (Guidelines on Concession Contracts).

   (5) CPC 32 – Taxes on Income: The objective of this pronouncement is to set forth accounting
       procedures related to taxes on income. It is about current and deferred assets and liabilities
       related to taxes on income. It demands the recognition of deferred tax liabilities for all taxable
       temporary differences between tax base and accounting base in the balance sheet, except in
       certain specific cases For purposes of recognizing deductable temporary differences between
       tax basis and book basis in the balance sheet, or recognizing tax losses and recoverable tax
       credits, the pronouncement binds the recognition to the probable existence of taxable profit,
       against which the deductable temporary difference and/or recoverable loss may be realized.

      Due to the fact that the adjustments to adopt international standards have impact on the
      Shareholders' Equity and the Income Statement previously used as calculation basis of the
      taxes on income, it is necessary to recognize Deferred Income Tax (asset or liability) at the rate
      of 34% on the IFRS/CPC adjustments. For purposes of the accounting standards used by the
      Company (BR GAAP), a provision for non-recoverable deferred income tax assets was
      recognized, which was reversed throughout the fiscal year ended at December 31st, 2009.
      However, the adjustment mentioned should had been recognized in previous years, which is the
      reason why there was a write-off of revenues against retained earnings in the fiscal year ended
      at December 31st, 2009.



   (6) ICPC 08 – Accounting for the Proposal of Payment of Dividends: The Pronouncement
       provides that dividends in an amount above the minimum mandatory dividend established by
       Law, not yet approved in a general meeting, shall be presented and disclosed in shareholders’
       equity. According to previous accounting standards, these additional dividends above the
       minimum statutory dividend were deduced from shareholders’ equity and recognized in
       liabilities.

   (7) ICPC 01 – Concession Contracts: This Interpretation provides that, since it is considered that
       the concessionary does not control underlying assets, concession infrastructure (including
       electricity) can not be recorded as fixed assets, being then recorded according to one of the
       accounting models presented in the Interpretation, depending on the type of committment
       regarding concessionary remuneration assumed before the grantor, according to the contract

                                                                                                      21
NOTES TO THE FINANCIAL STATEMENTS
ON DECEMBER 31, 2010 AND 2009
(Amounts in thousands of Brazilian reais)


      established between the parties, which is the financial asset model, the intangible asset model
      and the branched model.

      The branched model is applied in distribution of electricity, due to the fact that the companies
      in this segment are remunerated (i) by the Granting Authority, regarding the residual value of
      the infrastructure at the end of the concession contract (financial asset of the concession) and
      (ii) by users, for the part that is attributable to them for construction services and for electricity
      supplying services (intangible assets).

   (8) CPCs 38, 39 and 40 – Financial Instruments

      All rules and interpretations currently in force and applicable to the Company were adopted in
      2010, as follows:

           Changes to IFRS 7 Financial Instruments: The objective of this change is basically to
            improve its disclosure requirements. It increases disclosure requirements for fair value
            measurement, liquidity risk, market risk, credit risk and any other significant risk.

           Changes to IFRS 7 regarding fair value hierarchy: This change establishes fair value
            hierarchy division regarding financial instruments. Hierarchy prioritizes unadjusted
            quoted prices in an active market related to financial assets or liabilities classified as
            Level 1. There are three types of levels of fair value classification related to financial
            instruments, as follows:

                 Level 1 – Data coming from the active market (unadjusted quoted price), in order to
                 make possible daily access, including in the date of the fair value measurement.

                 Level 2 – Other data, different from those coming from the active market
                 (unadjusted quoted price) included in Level 1, extracted from the price model based
                 on observable market data.

                 Level 3 – Data extracted from the pricing model based on non-observable market
                 data.

      Additionaly to the issues described above, the Company improving its Financial Statements, for
      disclosure purposes, and started to present the following information:

           Earnings per share, as required by CPC 41 and IAS 33 (Earnings per share), presented
            in Note 28;

           Segment information, as required by CPC 22 and IFRS 8 (Operating Segments),
            presented in Note 39.

   (9) Additionally, adjusting the financial statements at the transition date and at December 31st,
       2009, the Company reclassified, for better disclosure, cash balances, presenting them as cash
       and cash equivalents and securities and recognized an adjustment of the effects of the reversal
       of deferred tax liabilities in the opening balance.


                                                                                                         22
NOTES TO THE FINANCIAL STATEMENTS
ON DECEMBER 31, 2010 AND 2009
(Amounts in thousands of Brazilian reais)


c) Presenting again the 2010 ITRs, comparably with those from 2009, equally adjusted to the
   standards adopted in 2010.

In compliance with CVM Deliberation no. 656, of January 25th, 2011, the Company presents below
the effects in the income statement and in shareholders’ equity, in the quarters ended in 03/31/2009,
06/30/2009, 09/30/2009, 03/31/2010, 06/30/2010 and 09/30/2010, arising from full adoption of the
2010 standards.
                                                            3/31/2010                    3/31/2009                   3/31/2010                      3/31/2009
                                                    Shareholders                  Shareholders                Shareholders                   Shareholders      Net
                                                       Equity      Net Income        Equity      Net Income      Equity        Net Income       Equity       Income

 Balance before the adoption of the new practices     2,995,361         120,550     2,981,969      168,288       2,995,361       120,550       2,981,969     168,288

 Pre-operational expenses                                    -              -              -            -            (8,519)         (153)         (7,734)         (304)
 Investiment                                             479,260            -          298,907          -               -             -               -             -
 Regulatory assets and liabilities                           -              -              -            -           (37,660)      167,435        (354,477)       50,130
 Fair value as deemed cost                                   -              -              -            -           776,720        (9,280)        819,085        (9,669)
 Equity method                                               -          104,229            -         26,400             -             -               -             -
 Income tax and differed social contribution                 -              -              -            -          (251,280)      (53,773)       (157,967)      (13,757)
                                                         479,260        104,229        298,907       26,400        479,260        104,229         298,907        26,400

 Balance after the adoption of the new practices      3,474,621         224,779     3,280,876      194,688       3,474,621       224,779       3,280,876     194,688



                                                                        Parent Company                                            Consolidated
                                                            06/30/2010                  06/30/2009                   06/30/2010                 06/30/2009
                                                    Shareholders                 Shareholders                 Shareholders                Shareholders     Net
                                                       Equity      Net Income       Equity     Net Income        Equity      Net Income      Equity      Income

 Balance before the adoption of the new practices     3,093,636         218,825     3,113,477      289,725       3,093,636       218,825       3,113,477     289,725

 Pre-operational expenses                                    -              -              -            -            (8,696)         (330)         (7,924)         (494)
 Investiments                                            518,638            -          347,663          -               -             -               -             -
 Regulatory assets and liabilities                           -              -              -            -            31,792       236,887        (270,648)      133,959
 Fair value as deemed cost                                   -              -              -            -           767,199       (18,801)        809,416       (19,338)
 Equity method                                               -          143,607            -         75,156             -             -               -             -
 Deferred income tax and social contribution                 -              -              -            -          (271,657)      (74,149)       (183,181)      (38,971)
                                                         518,638        143,607        347,663       75,156        518,638        143,607         347,663        75,156




 Balance after the adoption of the new practices      3,612,274         362,432     3,461,140      364,881       3,612,274       362,432       3,461,140     364,881


                                                                        Parent Company                                            Consolidated
                                                            09/30/2010                  09/30/2009                   09/30/2010                 09/30/2009
                                                    Shareholders                 Shareholders                 Shareholders                Shareholders     Net
                                                       Equity      Net Income       Equity     Net Income        Equity      Net Income      Equity      Income

 Balance before the adoption of the new practices     2,861,911         350,102     3,191,030      357,115       2,861,911       350,102       3,191,030     357,115

 Pre-operational expenses                                    -              -              -            -            (8,839)         (472)         (8,006)         (575)
 Investiments                                            548,323            -          352,897          -               -             -               -             -
 Regulatory assets and liabilities                           -              -              -            -            86,267       291,362        (252,925)      151,682
 Fair value as deemed cost                                   -              -              -            -           757,918       (28,082)        799,747       (29,007)
 Equity method                                               -          173,292            -         80,390             -             -               -             -
 Deferred income tax and social contribution                 -              -              -            -          (287,023)      (89,515)       (185,919)      (41,710)
                                                         548,323        173,292        352,897       80,390        548,323        173,292         352,897        80,390

 Balance after the adoption of the new practices      3,410,234         523,394     3,543,927      437,505       3,410,234       523,394       3,543,927     437,505




Regarding these information, the independent auditors applied the special review procedures,
according to CVM requirements for Quarterly Information (NPA 06, from IBRACON), not being,
therefore, audited.


4. SUMMARY OF ACCOUNTING PRACTICES

The accounting policies described in details below have been applied consistently to all periods
presented in these financial statements and in the preparation of the opening balance sheet in January

                                                                                                                                                                           23
NOTES TO THE FINANCIAL STATEMENTS
ON DECEMBER 31, 2010 AND 2009
(Amounts in thousands of Brazilian reais)


1st, 2009, with the purpose of transitioning to IFRS and CPC standards.

     a) Financial instruments:

        All financial instruments were recorded in the balance sheet of the Company, both in assets
        and liabilities, and are initially measured at fair value when applicable and after initial
        recognition, according to their classification.

       Non derivative financial assets – Include financial investments, cash and cash equivalents,
       marketable securities, concessionaires and permissionaires, financial concession assets and
       other credits. Receivables and financial concession assets are measured at amortized cost using
       the effective interest rate method, reduced by occasional losses in recoverable value, when
       applicable, plus directly attributable transaction costs. Financial investments are measured at
       fair value through profit and loss.

       The Company derecognizes a financial asset when the contractual rights to cash flows of the
       asset expire, or when the Company transfers the rights to receive contractual cash flows over a
       financial asset in a transaction in which essentially all risks and benefits inherent to the
       ownership of the financial asset are transferred. Occasional participations created or held by
       the Company in financial assets are recorded as individual assets or liabilities.

       Financial assets recorded at fair value – A financial asset is classified at fair value through
       profit and loss if it is classified as held for trading or is designated as such at the moment of its
       initial recording. Financial instruments are designated as fair value through profit and loss if
       the Company manages such investments and make purchase and sale decisions based on their
       fair values, according to its risk management and its investment strategy. Transaction costs are
       recorded in the income statement as incurred. Financial instruments recorded at fair value
       through profit and loss are measured at fair value and changes of assets fair value are
       recognized in the income statement.

       Loans and receivables – Financial assets with fixed or calculated installments which are not
       rated in the active market. Such assets are initially recorded at fair value plus any attributable
       transaction costs. After initial recognition, loans and receivables are measured by amortized
       cost through the effective interest rate method, less any losses from impairment.

       Cash and cash equivalents – Include cash, bank deposits and immediate liquidity financial
       investments, due until 3 months from the investment date and subject to non-significant value
       risks.

    Non derivative financial liabilities – The Company initially recognizes liabilities in the
     inception date. The Company writes-off a financial liability when its contractual obligations
     are withdrawn, cancelled or expired.

       Financial assets and liabilities are offset and the net balance is presented in the balance sheet
       when, and only when, the Company has the legal right to offset the amounts and intends to
       settle in an offset basis or to realize the asset and settle the liability simultaneously.
       The Company has the following non-derivative financial liabilities: loans, financing,
       debentures and suppliers. Such financial liabilities are initially recognized at fair value plus any
                                                                                                         24
NOTES TO THE FINANCIAL STATEMENTS
ON DECEMBER 31, 2010 AND 2009
(Amounts in thousands of Brazilian reais)


      attributable transaction costs. After initial recognition, these financial liabilities are measured
      by amortized cost through the effective interest rate method.

   Derivative financial instruments – The Company operates with derivative financial instruments
    to hedge from foreign exchange risks.

      Derivatives are initially recognized at fair value and attributable transaction costs are
      recognized in the income statement as incurred. After initial recognition, derivatives are
      measured at fair value and changes are accounted for in the income statement.


    b) Concessionaries and permissionaries (Clients) – Include electricity supplying, billed and
       unbilled, moratory charges, interest for arrears and electricity traded with other
       concessionaries for electricity supply, according to the amounts available in the Electric
       Energy Trade Chamber (CCEE).

    c) Inventories (including fixed assets) – Materials in inventories, classified in Current Assets
       (maintenance and administration warehouse) and those destined to investments, classified in
       Non-Current Assets – Fixed Assets (warehouse), are recorded at average acquisition cost and
       do not exceed their replacement costs or realizable values, less allowances for losses, when
       applicable.

    d) Financial Concession Assets – The subsidiary Light SESA recorded a financial asset
       receivable from the Granting Authority due to the unconditional right to receive cash at the
       end of the concession, as provided in contract, as an indemnification for construction
       services performed and not received through services rendered related to the concession.
       These financial assets are accounted for at present value of the right and are calculated based
       on the value of the assets in services inherents to the concession, measured at historical cost,
       which shall be reversible at the end of the concession. These assets are held at amortized cost
       and are remuneratel, via tariff, at the average investment remuneration rate, represented by
       the capital cost (regulatory WACC), established by ANEEL, being this amount monthly
       recognized as financial revenue, in the group of operating revenues, consistent with OCPC
       05.

    e) Investments – The subsidiaries and joint ventures financial statements are included in the
       consolidated financial statements from the date when control begins until the date when
       control ceases to exist. Accounting policies of subsidiaries and joint ventures are jointly
       aligned with policies applied by the Company.

         The subsidiaries and Joint ventures financial information are recognized in the individual
         financial statements of the parent company through the equity method.

         Business Combination

     Acquisitions effective in January 1st, 2009, or after this date

      For acquisitions effective in January 1st, 2009 or after this date, the Company measures
      goodwill as the fair value of the transferred counterpart, including the recognized amount of

                                                                                                      25
NOTES TO THE FINANCIAL STATEMENTS
ON DECEMBER 31, 2010 AND 2009
(Amounts in thousands of Brazilian reais)


      any non-controlling interest in the acquired company, deducing the net recognized amount
      (generally the fair value) of identifiable assets and liabilities assumed, all measured at the
      acquisition date. When the exceeding amount is negative, a gain resulting from the purchase
      deal is immediately recognized in the income statement.

      For each business combination the Company chooses if it will measure non-controlling interest
      by its fair value, or by the proportional participation of non-controlling interest on identifiable
      net assets, identified in the acquisition date.

      Other transaction costs than those associated with issuance of debt securities or shareholding
      interest, incurred by the Company, related to a business combination, are recorded as expenses
      as they are incurred.

     Acquisitions prior to January 1st, 2008

     As a part of the transition to IFRS and CPCs, the Company chose not to restate business
     combinations prior to January 1st, 2008. Regarding acquisitions prior to January 1st, 2009,
     goodwill represents the amount recorded under the accounting standards previously adapted.


   f) Fixed assets

      Only tangible assets not linked to the infrastructure of the concession are recorded in this
      account.

         Recognition and measurement – measured at acquisition, formation or construction cost,
          monetarily restated until 1995, less accumulated depreciation. Interest and other financial
          charges and inflation effects resulting from loans with third parties, effectively applied in
          works in progress, are recorded as cost of the respective fixed assets. Average annual
          depreciation rates are presented in Note 14.

          According to guidelines provided in CPC 27, about fixed assets, and interpretation ICPC10,
          subsidiary Light Energia adopted fair value as deemed cost for fixed assets of the plants
          that presented book value substantially lower than their fair value. Other fixed assets were
          held at historical cost, either for being under construction or for being in compliance with
          fixed assets requirements provided in CPC 27 and, in the Management's opinion, being
          aligned with their fair values.

       Depreciation – It is calculated by linear method, based on annual rates established by
        ANEEL, which are used in the industry and accepted by the market as adequate.

     g) Intangible assets

       Research and Development – Expenditures in research activities, made with a possibility of
        gaining knowledgement and scientific or technological understanding, are recognized in the
        income statement as incurred. Development activities involve a plan or project aiming at
        producing new or substantially enhanced products. Development expenditures are
        capitalized only if the development costs can be reasonably measured, if the product or
        process is technically and commercially viable, if future economical benefits are probable,
                                                                                                      26
NOTES TO THE FINANCIAL STATEMENTS
ON DECEMBER 31, 2010 AND 2009
(Amounts in thousands of Brazilian reais)


         and if the Company and its subsidiaries have the intention and enough resources to
         conclude the development and use or sell the asset. Capitalized expenditures include cost of
         materials, direct labor, manufacturing costs directly attributable to the preparation of the
         asset for its proposed use, and cost of loans in qualifying assets for which the starting date
         of capitalization is January 1st, 2009 or later. Other development expenditures are recorded
         in the income statement as they are incurred. Capitalized development expenditures are
         measured at cost, less accumulated depreciation and losses from impairment.

       Infrastructure assets linked to the concession – Subsidiary Light SESA recognizes an
        intangible asset resulting from the service concession contract when it has the right to
        charge for using the infrastructure of the concession, measured at fair value, in the date of
        initial recognition. After initial recognition, the intangible asset is measured at cost, which
        includes costs of capitalized loans, less accumulated depreciation and losses from
        impairment, as applicable.

       Other intangible assets – Other intangible assets with finite useful lives are measured at
        cost, less accumulated depreciation and losses from impairment, as applicable.

       Subsequent expenditures – Subsequent expenditures are capitalized only when they
        increase future economic benefits incorporated in the specific asset they relate to. All other
        expenditures, including expenditures with internally generated goodwill and trademarks are
        recognized in the income statement as incurred.

      Amortization – Calculated on the cost of an asset, or other value replacing cost, less the
       residual value. Amortization is recognized in the income statement based on the linear
       method related to estimated useful lives of intangible assets, other than goodwill, from the
       date when they are available for use, given that this method is the one that better reflects
       the consumption pattern of future economic benefits incorporated in the asset. The useful
       life of an intangible asset in a service concession contract is the period from which the
       Company is able to charge public consumers for using the infrastructure, until the end of
       the concession period. Amortization methods, useful lives and residual values are reviewed
       at the end of each financial year and are adjusted whenever it is adequate.

    h) Impairment

       Financial assets (including receivables) – A financial asset not measured at fair value
        through profit and loss is evaluated at each reporting date to assess if there is objective
        evidence of loss in its recoverable value. An asset has loss in its recoverable value if an
        objective evidence indicates that a loss event occurred after the initial recognition of the
        asset, and that such loss event has a negative effect on future projected cash flows, which
        can be reasonably estimated.
          The objective evidence that the financial assets (including) have lost value might include
          default or late payment by the debtor, restructuring the amount due to the Company under
          conditions the Company usually would not consider in other transactions, indications that
          the debtor or issuer will face bankruptcy, or the disappearance of an active market for a
          security. Additionally, for a equity instrument, a significant or long decrease in its fair
          value below its cost is an objective evidence of impairment.


                                                                                                    27
NOTES TO THE FINANCIAL STATEMENTS
ON DECEMBER 31, 2010 AND 2009
(Amounts in thousands of Brazilian reais)


          The Company considers evidences of impairment of receivables either individually as
          collectively. All individually significant receivables are assessed for impairment. All
          individually significant receivables identified as not suffering individual impairment are
          then collectively assessed regarding any other impairment not yet identified. Receivables
          that are not individually important are collectively assessed for impairment, by jointly
          grouping securities with similar risk characteristics.
          When collectively assessing impairment, the Company uses historical trends of probability
          of default, recovery term and incurred loss amounts, adjusted to reflect the Management’s
          judgement regarding premises, as current economic and credit conditions may be such that
          actual losses will be probably higher or lower then those suggested by historical trends.
          An impairment related to a financial asset measured by amortized cost is calculated as the
          difference between book value and present value of estimated future discounted cash flows
          at the original effective interest rate of the asset. Losses are recorded in the income
          statement and reflected in an account of allowance for receivables. Interest on impaired
          assets remain being recognized through discount reversal. When a subsequent event
          indicates reversion of the impairment, a decrease on impairment is reversed and recorded
          in the income statement.
          Management has not identified any evidence that justifies the need to reduce the financial
          assets to their recoverable value as of December 31st, 2010 and 2009, except for the
          allowance for doubtful accounts.
       Non-financial assets – Assets with undefined useful lives, such as goodwill, are not subject
        to amortization and are annually tested for impairment. Assets subject to amortization are
        reviewed for impairment whenever events or changes in circumstances indicate that the
        book value may not be recoverable. An impairment loss is recognized at the value for
        which the book value exceeds its recoverable value. The latter is the highest amount
        between the fair value of an asset less sale costs and its value in use. For purposes of
        impairment assessment, assets are grouped in lower levels for which there are segregate
        identifiable cash entries (Cash Generating Units-CGU). Non financial assets, except for
        goodwill, suffering impairment, are subsequently reviewed, to analise possible impairment
        reversals in the report presentation date. For purposes of testing the recoverable value of
        goodwill, the amount of goodwill arising from a business combination is allocated to the
        CGU or group of CGU for which the benefit of sinergies of the combination is expected.
        This allocation reflects the lowest level in which goodwill is monitored for internal
        purposes and is not higher than a certain operating segment according to IFRS 8 and CPC
        22.

    i)   Benefits to employees

       Defined contribution plans – A defined contribution plan is a post-retirement benefit plan
        under which an entity pays fixed contributions to a separate entity (Pension Fund) and shall
        not have any legal or constructive obligation to pay for additional amounts. Liabilities for
        contributions to defined contribution pension plans are recorded as expenses with benefits
        to employees in the income statement in the periods during which services are rendered by
        the employees. Contributions previously paid are recognized as assets under the condition
        that there is a cash reimbursement or a reduction in future payments is available.


                                                                                                 28
NOTES TO THE FINANCIAL STATEMENTS
ON DECEMBER 31, 2010 AND 2009
(Amounts in thousands of Brazilian reais)


       Defined benefit plans – The net liability of the Company regarding defined benefit pension
        plans is individually calculated for each plan, by estimating the value of the future benefit
        earned by the employees in return of services rendered in current and previous periods; the
        benefit is discounted to its present value. Any unrecognized past service costs and the fair
        values of any plan assets are deduced. The discount rate is the gains presented in the date of
        presentation of the financial statements for first line securities which due dates are close to
        the conditions of the liabilities of the Company and that are denominated in the same
        currency in which the benefits are expected to be paid. The calculation is made annually by
        a qualified actuary using the projected unit credit method. When the calculation results in a
        benefit for the Company, the asset to be recognized is limited to the total of any
        unrecognized past service costs and the present value of economic benefits available in the
        form of future reimbursements of the plan or reduction in future contributions to the plan.
        To calculate the present value of the economic benefits, any minimum cost demands
        applicable to any plan are considered. A economic benefit is available if it is realizable
        throughout the life of the plan, or in the settlement of the liabilities of the plan.

         Sponsor costs of the pension plan and occasional plan deficits are recorded by competence
         and in compliance with CVM Resolution no. 600/09, based on the actuarial calculation
         prepared by independent actuary.

         Actuarial gains and losses arising from adjustements and changes in actuarial premises of
         pension and retirement benefit plans are recorded in the income statement.

       Short term benefit liabilities to employees – are measured in undiscounted basis and are
        incurred as expenses as the related service is rendered. The liability is recorded at the
        amount expected to be paid under the cash bonus or short term profit share plans if the
        Company and its subsidiaries have a legal or constructive obligation to pay this amount
        due to past services rendered by the employee and the liability can be reasonably
        estimated.

       Benefits of termination of employment relationship – The termination of employment
        relationship benefits are recognized as expenses when the Company is proven to be
        committed, with no realistic possibility of change, with a detailed formal plan to terminate
        the employment contract before normal retirement or to provide benefits of termination of
        employment relationship due to an offer made to encourage voluntary resignation. The
        benefits for termination of employment relationship for voluntary resignation are
        recognized as expenses when the Company has made a voluntary resignation offer, it is
        probable that the offer will be accepted, and the number of employees adhering to the
        program can be reasonably estimated.

       Profit Sharing – The Company recognizes profit sharing liabilities and expenses based on
        a formula that considers profits attributable to the shareholders of the Company after
        certain adjustments. The Company recognize a provision when it is contractual obliged by
        contract or when there is a past practice that created a liability not recorded.

       Share based payment transactions – The fair value of benefits of share based payment is
        recognized in the granting date, as personnel expenses, with a corresponding increase in
        shareholders’ equity, for the period when the employees unconditionally acquire the right
        to these benefits. The amount recognized as an expense is adjusted to reflect the number
                                                                                               29
NOTES TO THE FINANCIAL STATEMENTS
ON DECEMBER 31, 2010 AND 2009
(Amounts in thousands of Brazilian reais)


          of shares for which there is an expectation that the service conditions and non market
          acquisition conditions will be met, in such way that the amount eventually recognized as
          an expense is based on the number of shares that really meet the service conditions and
          non-market acquisition conditions in the date when the rights of payment of these benefits
          are acquired (vesting date). For benefits of share based payment with non-acquired
          condition (non-vesting), the fair value at the granting date of the share based payment is
          measured to reflect such conditions and there are no changes for differences between
          expected and actual benefits.

          The fair value of the amount payable to employees related to rights over share valuations,
          payable in cash, is recognized as an expense with corresponding increase in liabilities, for
          the period when employees unconditionally acquire the right for payment. The liability is
          measured again on each date of presentation of the financial statements and at the
          settlement date. Any changes in the fair value of the liability are recognized as personnel
          expenses in the income statement.

    j) Income tax and social contribution – Current and deferred income tax and social contribution
       of the year are calculated based on 15% rates, plus the additional 10% over the taxable
       income exceeding R$240 for income tax and 9% over the taxable income for social
       contribution on net profit.

        Current tax is the expected payable or recoverable tax on the taxable profit or loss of the
        year, at tax rates decreed or substantially decreed in the date of presentation of the financial
        statements and any adjustments to payable taxes related to previous years.

        Deferred tax is recognized regarding temporary differences between book value of assets
        and liabilities for accounting purposes and the corresponding values for taxation purposes.

        Deferred tax assets and liabilities are offset if there is a legal right to offset current tax assets
        and liabilities, and they relate to income taxes charged by the same tax authority on the
        same entity subject to taxation.

        A deferred income tax and social contribution asset is recognized by tax losses, tax credits
        and deductible temporary differences, not used when it is probable that future profits subject
        to taxation will be available and against which they shall be used.

        Deferred income tax and social contribution assets are reviewed at each closing date and are
        reduced as their realization is no longer probable.

        As provided in Law no. 11,941/09, the Company uses the Transition Tax Regime (RTT) to
        calculate actual profit, so that the changes in the criteria of recognition of revenues, costs
        and expenses comprised in the calculation of the net income for of the year do not have
        material effect on the calculation of the actual profit of the entity subject to RTT, and for
        taxation purposes, the accounting methods and criteria in force in December 31, 2007 shall
        be considered.

    k) Suppliers – Accounts payable to suppliers are liabilities payable for goods or services
       acquired from suppliers in the regular course of business, classified as current liabilities if
       the due date is within the period of one year.
                                                                                                          30
NOTES TO THE FINANCIAL STATEMENTS
ON DECEMBER 31, 2010 AND 2009
(Amounts in thousands of Brazilian reais)



        They are initially recorded at fair value and, subsequently, measured at amortized cost, using
        the effective interest rate method. Practically, they are usually recorded at the corresponding
        invoice value.

     l) Loans – Loans are recognized, initially, at fairvalue, net of incurred transaction costs and
        are, subsequently, presented at amortized cost. Any difference between the amounts
        obtained (net of transaction costs) and the settlement value is recognized in the income
        statement during the period in which the loans are outstanding, usind the effective interest
        rate method.

        All fees paid to establish the loan are recognized as transaction costs of the loan, since it is
        probable that part of or the full loan is withdrawn. In this case, the fee is deferred until the
        withdrawal takes place. When there are no evidences of probability of withdrawal of part of
        or the total loan, the fee is capitalized as an prepayment for liquidity services and it is
        amortized during the period to which the loan is related.

    m) Provisions – A provision is accounted for in the balance sheet when the Company and its
       subsidiaries have a legal or constituted liability resulting from a past event, and it is probable
       that an economic resource is required to settle the liability. Provisions are accounted for
       based on the best estimates of involved risks. A provision for contingencies is constituted
       upon appraisal and quantification of lawsuits, with a loss probability considered to be
       probable in the opinion of the Management and its legal advisors.

    n) Accounting for transactions of purchase and sale of electric energy in the Electric Energy
       Trade Chamber - CCEE - The cost of the electricity purchased and supply revenues are
       recorded by competence, based on information disclosed by CCEE, which is responsible for
       calculating the amounts and quantities of purchases and sales in its forum, or based on the
       Management’s estimates, whenever this information is not available.

    o) Capital Stock – Common Shares – Are classified as shareholders’ equity. Additional costs
       directly attributable to issuance of shares are registered as deductions in shareholders’ equity,
       net of any tax effects.

    p) Revenue recognition – Revenues are measured at fair value of the receivable or received
       counterpart, less taxes and discounts inherent to them.

           Electricity sales revenues – are recognized when it is probable that the economic
            benefit associated to the transactions will flow to the Company and the amount of
            revenues can be reasonably measured. Traded electricity is monthly invoiced based on
            the electric energy supply, according to amounts disclosed by the Electric Energy
            Trade Chamber (CCEE).

           Service Revenues – Revenues from services rendered are recognized in the income
             statement based on the stage of completion of services in the date of presentation of the
             financial statements. The stage of completion is appraised by reference to research of
             works performed.


                                                                                                      31
NOTES TO THE FINANCIAL STATEMENTS
ON DECEMBER 31, 2010 AND 2009
(Amounts in thousands of Brazilian reais)


           Construction Revenues – ICPC 01 establishes that the concessionary of electric energy
             shall register and measure revenues from services rendered according to Technical
             Pronouncements CPC 17 – Contruction Contracts (construction or improvement
             services) and CPC 30 – Revenues (operating services – electric energy supply), even
             when ruled by a single concession contract. Subsidiary Light SESA accounts for
             revenues and costs related to construction or improvement services on the
             infrastructure used to render electric energy distribution services. The construction
             margin adopted is established as being equal to zero, considering that: (i) the activity
             of the subsidiary is electric energy distribution; (ii) every construction revenue is
             related to the construction of insfrastructure to reach its main activity; and (iii) the
             subsidiary hires non-related parties for constructing infrastructure. The totality of
             additions to intangible assets in process is monthly recorded in the income statement,
             as construction cost.

    q) Financial revenues and expenses – Include interest, monetary and exchange changes on
       rights and obligations, subject to monetary restatement until the balance sheet date. Foreign
       currency assets and liabilities are converted to reais according to the exchange rate disclosed
       by Banco Central do Brasil, in the balance sheet date.

    r) Earnings per share - Basic earnings per share are calculated through the earnings of the
       period attributable to controlling and non-controlling shareholders of the Company and
       weighted average of outstanding shares in the respective period. Diluted earnings per share
       are calculated through the referred average outstanding shares, adjusted by instruments
       potentially convertible in shares, with a diluting effect, in the presented periods.

    s) Added value statement – The Company prepared added value statements (DVA) in the terms
       of the technical pronouncement CPC 09 – Added Value Statement, which are presented as an
       integral part of the financial statements under BRGAAP applicable to publicly-held
       companies, whilst they represent, for IFRS, additional financial information.

     t) Foreign currency – Transactions in foreign currency are converted to the functional currency
        of the Company at the exchange rates in the transaction dates. Monetary assets and
        liabilities denominated and calculated in foreign currencies are converted to the functional
        currency at the exchange rate in the closing date. Gains and losses resulting from
        restatement of these assets and liabilities between the exchange rate in force at the transition
        date and year-end dates are recognized as financial revenues or expenses in the income
        statement.

    u) Segment information – An operating segment is a component of the Company that develops
       business activities in which it can obtain revenues and incur in expenses, including revenues
       and expenses related to transactions with other components of the Company. All results from
       operating segments are frequently reviewed by the Management, in order to make decisions
       regarding the resources to be allocated to the segment and to assess their performance, and
       for this purpose individual financial information is available.

      The segment results reported to the Management include items directly attributable to the
      segment, as well as those that may be allocated in reasonable basis.


                                                                                                     32
NOTES TO THE FINANCIAL STATEMENTS
ON DECEMBER 31, 2010 AND 2009
(Amounts in thousands of Brazilian reais)


    v) Distribution of dividends – Distribution of dividends to shareholders of the Company is
       recognized as a liability in the year-end financial statements, based on the by-laws of the
       Company. Any amounts above the minimum mandatory dividend is only accounted for in
       the date they are approved by the shareholders, in a General Meeting.

    w) Rules and interpretations not yet adopted – Several IFRS rules, amendments to rules and
       interpretations issued by IASB are not yet in force in the year ended in December 31st, 2010,
       such as:

         Improvements to IFRS 2010.
         IFRS 9 Financial Instruments.
         Prepayment of a minimum fund requirement (Amendment to IFRIC 14).
         Amendments to IAS 32 Classification of rights issues.

      CPC did not issued yet pronouncements equivalent to the IFRSs mentioned above, but there
      are expectations that it does before the required date to become in force. Anticipated adoption
      of IFRSs pronouncements is conditioned to previous approval in normative act by CVM –
      Brazilian Securities and Exchange Commission.

      Since it did not adopt these standards in anticipation, the Company has not yet appraised the
      potential effects of them in its financial statements.




                                                                                                  33
NOTES TO THE FINANCIAL STATEMENTS
ON DECEMBER 31, 2010 AND 2009
(Amounts in thousands of Brazilian reais)



5. CONSOLIDATION PROCEDURES

The consolidated financial statements include those of Light S.A., its direct subsidiaries and joint
ventures, listed as follows:

                                                                                                                 Percentage
                                                                                                                  Interest
                                                                                                     2010 (%)                2009 (%)

Light Serviços de Eletricidade S.A.                                                                        100                 100
Light Energia S.A                                                                                          100                 100
Light Esco Prestação de Serviços S.A.                                                                      100                 100
Lightcom Comercializadora de Energia S.A                                                                   100                  -
Light Hidro Ltda.                                                                                          100                 100
Instituto Light para o Desenvolvimento Urbano e Social                                                     100                 100
Itaocara Energia Ltda.                                                                                     100                 100
Lightger S.A.                                                                                               51                 100
Axxiom Soluções Tecnológicas S.A.                                                                           51                  -

Transactions eliminated in the consolidation

Intragroup balances and transactions, and any revenues or expenditures derived from intragroup
transactions, were eliminated in preparing the consolidated financial statements. Unrealized gains in
transactions with subsidiaries recorded at equity pickup were offset against the relevant investment
proportionate to the parent's interest in the subsidiary Company. Unrealized losses were eliminated
using the same method employed to unrealized gains, however only to the extent that there is no
evidence of any impairment loss.


6. CASH AND CASH EQUIVALENTS
                                                              Parent Company                                 Consolidated
                                                12/31/2010      12/31/2009     01/01/2009    12/31/2010      12/31/2009      01/01/2009

 Cash                                                   386           2.557             50        36.028           27.139         41.029
 Financial investments of immediate liquidity
    Certificate of deposit (CDB)                     37.909          12.027         40.206       478.081          733.174        507.954
Total                                                38.295          14.584         40.256       514.109          760.313        548.983




Financial investments are represented by transactions purchased from organizations trading in the
domestic financial market, at regular market terms and rates. These investments are highly liquid, have
a daily repurchase commitment by the counterparty financial institution (the repurchase rate is
previously agreed upon by the parties), involve low credit exposures, and yield according to the
variation of the interbank deposit rate (CDI).




                                                                                                                                           34
NOTES TO THE FINANCIAL STATEMENTS
ON DECEMBER 31, 2010 AND 2009
(Amounts in thousands of Brazilian reais)



7. MARKETABLE SECURITIES

These papers involve bank deposit certificates (CDB) in the amount of R$11,122 (R$68,059 in 2009
and R$41,143 in 2008) forming the underlying assets of certain surety bonds pledged in power
auctions, and also other proceeds from the sale of assets that were held for re-investment in the electric
grid system or have maturies of 3 months or longer.


8. CONSUMERS, CONCESSIONAIRES AND PERMISSIONAIRES (CLIENTS)

                                                                            Consolidated
                                                             12/31/2010     12/31/2009      01/01/2009
CURRENT
 Billed sales                                                  1,912,492       1,678,167      1,729,885
 Unbilled sales                                                  277,339         286,170        260,361
 Debt payment by installments (a)                                154,896         153,421        140,874
 Other receivables                                                   489             -              -
                                                               2,345,216       2,117,758      2,131,120

 Sales within the scope of CCEE                                    5,546           1,001            613
 Supply and charges related to the use of electric network        46,444          54,946         52,412
                                                                  51,990          55,947         53,025

 (-) Allowance for doubtful accounts (b)                      (1,058,502)       (817,851)      (901,290)
                                                               1,338,704       1,355,854      1,282,855

NON-CURRENT
 Debt payment by installments (a)                                276,092         297,798        292,594
 Other receivables                                                20,169             -              -
                                                                 296,261         297,798        292,594


a) The balances of debt repayment facilities were adjusted to their present value, as applicable,
   pursuant to Law No. 11,638/07. The present value is determined for each relevant consumer debt
   renegotiation (debt repayment facilities) based on such interest rate as will reflect the term and risk
   associated with each individual transaction, on average 1% per month.

     The balance includes the present value of repayment agreements with installment acceleration
     options (these options, once exercised, give customers a discount on any accelerated installment). It
     is estimated that an aggregate amount of R$21,007 in options will be exercised in 2011.

b) An allowance for doubtful accounts was set up based on certain premises and in an amount deemed
   sufficient to meet any asset realization losses, in accordance with the ANEEL guidelines
   summarized as follows:

     Customers with significant debts (large accounts):
     - Outstanding balances of customer accounts are reviewed on a case-by-base basis and per
     consumer class.




                                                                                                           35
NOTES TO THE FINANCIAL STATEMENTS
ON DECEMBER 31, 2010 AND 2009
(Amounts in thousands of Brazilian reais)



        In all other instances:
        - Residential consumers – over 90 days past due.
        - Commercial consumers – over 180 days past due.
        - Industrial, rural, public sector, public lighting, public utility, and other accounts – over 360 days
        past due.

        Outstanding balances and receivables in connection with invoiced electric power sales and also
        debt repayment programs are summarized as follows:
                                                        Matured balances                       TOTAL                                Allowance for bad debts (PCLD)
                                        Maturing   Overdue up to Overdue over
Billed sales and renegotiated debts     balance      90 days        90 days     12/31/2010    12/31/2009     01/01/2009       12/31/2010          12/31/2009     01/01/2009


 Residential                             240,927      160,278         807,486     1,208,691    1,053,757         1,081,768          (786,940)       (565,483)      (743,636)
 Industrial                               26,905       11,516         163,843       202,264      216,120           241,717           (39,993)        (37,774)       (32,604)
 Commercial                              144,495       40,629         300,284       485,408      377,087           347,212          (223,836)       (205,948)      (114,031)
 Rural                                       671          269             628         1,568        1,437             1,387              (499)           (431)          (286)
 Public sector                            42,579       17,174         112,970       172,723      160,921           141,857            (4,919)         (5,224)        (6,481)
 Public lighting                           4,651        2,844          32,171        39,666       41,045            51,028            (1,635)         (2,088)        (2,718)
 Public utility                          220,761        1,263          11,136       233,160      279,019           298,384              (546)           (766)        (1,400)
Total - current and non-current          680,989      233,973       1,428,518     2,343,480    2,129,386         2,163,353        (1,058,368)       (817,715)      (901,156)




In 2010, a total amount of R$14,133 (R$217,391 in 2009) of noncollectable accounts was written off.


9. TAXES AND CONTRIBUTIONS
                                                                                                       Parent Company
                                                                                   Assets                                                 Liabilities
                                                             12/31/2010         12/31/2009      01/01/2009            12/31/2010          12/31/2009             01/01/2009
CURRENT
 Tax credits – IRPJ and CSLL (a)                                    1,080               703                284                -                         -                  -
 IRRF (Withholding Income Tax) recoverable                            -                 -                  -                    1                       -                  -
 ICMS payable                                                         -                 -                  -                   13                       -                  -
 Prepaid IRPJ/CSLL                                                    -                  71                -                  -                         -                  -
 Other                                                                -                 -                  -                   17                        53                 10
TOTAL                                                               1,080               774                284                 31                        53                 10




                                                                                                         Consolidated
                                                                  Assets                                         Liabilities
                                                                12/31/2010      12/31/2009      01/01/2009      12/31/2010               12/31/2009             01/01/2009
  CURRENT
   Tax credits – IRPJ and CSLL (a)                                  6,838          102,073          107,818                   -                     -                  -
   IRRF (Withholding Income Tax) recoverable                          -             11,522           11,522                   -                     -                  -
   IRRF (Withholding Income Tax) payable                              -                -                -                     523                     2                  2
   ICMS recoverable                                                80,080          109,704          123,440                   -                     -                  -
   ICMS payable                                                       -                -                -                  23,833                 5,561             15,166
   Installment Payments - Law 11,941/09 (b)                           -                -                -                  21,633                21,684             10,973
   PIS/COFINS recoverable (c)                                      17,935            6,634          103,945                   -                     -                  -
   PIS/COFINS payable                                                 -                -                -                  61,234                57,420             51,112
   Prepaid IRPJ/CSLL                                              156,795          181,364          204,552                   -                     -                  -
   Provision for IRPJ/CSLL                                            -                -                -                 230,408               188,835            143,394
   Other                                                           17,237           31,371           14,734                12,538                11,678              9,814
  TOTAL                                                           278,885          442,668          566,011               350,169               285,180            230,461

  NON-CURRENT
   Installment Payment - PAES                                         -                 -               -                     -                     -               38,406
   Installment Payment - Law 11,941/09 (b)                            -                 -               -                 177,699               303,585                -
   IRPJ and CSLL – Unrealized foreign income                          -                 -               -                     -                     -              286,337
   ICMS recoverable                                                57,908            40,767          72,807                   -                     -                  -
  TOTAL                                                            57,908            40,767          72,807               177,699               303,585            324,743



a) The balance refers to tax credits recoverable arising from negative balance withholdings of
   financial investments and government agencies in the amount of R$5,743 and prepaid Income Tax
   and Social Contribution credits for 2009 amounting to R$1,095. The variation of the amounts for
                                                                                                                                                                                 36
NOTES TO THE FINANCIAL STATEMENTS
ON DECEMBER 31, 2010 AND 2009
(Amounts in thousands of Brazilian reais)


   the year arises from the adjustment based on the Selic rate in the amount of R$16,778, including
   new credits in the amount of R$172,200, net of offsets in the year, amounting to R$284,213.

b) New REFIS (Tax Recovery Program) - (Law 11,941/09) – Light has been making monthly
   minimum payments of one hundred reais as provided for by laws, plus payment of installments
   deriving from migration of PAES (Special Installment Payment Program) - Social Security (REFIS
   II), in the consolidated annual amount of R$7,010. The installment balance is restated by SELIC
   rate and the restatement amount recorded in the year is R$16,908.

                                                                                                 Adjustments                                       Adjustments
                                             Debt total     Interest and Fine    Installment   for inflation and                                 for inflation and
                                          included in the    Compensation       Amount Law       Payments in       Balance as of   Desistance/     Payments in       Balance as of
                 LIABILITIES                  REFIS            (tax losses)      11.941/09           2009          12/31/2009       Reversal           2010          12/31/2010

     PAES - Social Welfare Employees            (33,503)            16,706          (16,797)            1,005          (15,792)           -               5,865           (9,927)
     COFINS 1%                                 (206,970)           106,853         (100,117)           (1,001)        (101,118)           -              (9,180)        (110,298)
     IRPJ and CSLL LIR/LOI                     (173,202)            47,542         (125,660)           (1,258)        (126,918)       126,918               -                -
     IRPJ comp. unconfirmed (LIR/LOI)           (10,602)             3,590           (7,012)              (70)          (7,082)           -                (643)          (7,725)
     COFINS comp. unconfirmed (LIR/LOI)         (19,626)             6,926          (12,700)             (127)         (12,827)           -              (1,164)         (13,991)
     CSLL comp. unconfirmed (LIR/LOI)            (3,982)             1,349           (2,633)              (26)          (2,659)           -                (242)          (2,901)
     CSLL (JCP deduction)                       (19,332)            12,797           (6,535)              (65)          (6,600)           -                (600)          (7,200)
     CSLL (enforcement suspended)               (17,606)             5,478          (12,128)             (121)         (12,249)         8,917              (302)          (3,634)
     CPMF (symbolic foreign exchange)            (5,314)             1,745           (3,569)              (36)          (3,605)           -                (327)          (3,932)
     IRPJ / CSLL Law 8200/91                    (38,176)            26,923          (11,253)             (112)         (11,365)           -              (1,032)         (12,397)
     INSS - quarterly                           (46,011)            25,779          (20,232)             (202)         (20,434)           -              (1,854)         (22,288)
     INSS - joint and several                      (706)               374             (332)               (3)            (335)           -                 (31)            (366)
     IRPJ (spontaneous confession)               (5,173)             2,781           (2,392)              (24)          (2,416)           -                (218)          (2,634)
     CSLL (enforcement suspended)                (5,435)             3,585           (1,850)              (18)          (1,868)           -                (170)          (2,038)
                                               (585,639)           262,428         (323,211)           (2,058)        (325,269)       135,835            (9,898)        (199,332)




   Given that the motion to partially withdraw the matter of assessment timing (cash basis vs. accrual
   basis) relative to the incomes of the LIR and LOI businesses from writ of mandamus #
   2003.51.01.005514-8 was not accepted by the Treasury attorney nor granted by the competent
   court, the Company elected to fully withdraw the foregoing case. As a result, Light SESA
   recalculated income earned overseas from 2002 through 2007 (term of the REFIS ) using equity
   accounting on an accrual basis, then applied the balance of tax losses accrued over that period to
   fully offset the income tax and social contributions payable on its overseas income. Consequently,
   the variation seen in the outstanding REFIS balance over the year can be explained by exclusion of
   the (restated) amount of R$135,835 relating to the issue of taxation of overseas income, which
   amount had been previously included in the repayment program (REFIS), and the amount paid in
   connection with the PAES – Previdenciário as described above.




                                                                                                                                                                                     37
NOTES TO THE FINANCIAL STATEMENTS
ON DECEMBER 31, 2010 AND 2009
(Amounts in thousands of Brazilian reais)



Debts per group of tax repayment programs:
                                                                                                         Monetary
                                                                         Balance as of                  adjustment     Balance as of
                                                                         12/31/2009         Reversal      2010         12/31/2010
   FEDERAL REVENUE SERVICE
    OTHER TAXES                                                             (284,425)         135,835       (13,490)      (162,079)
   PENSIONS ( PAES )                                                         (15,792)             -           5,865         (9,927)

   OFFICE OF THE GENERAL COUNSEL TO THE NATIONAL TREASURY ( PGFN )
    OTHER TAXES                                                               (4,283)             -            (388)        (4,671)
   PENSIONS                                                                  (20,769)             -          (1,885)       (22,654)
                                                                            (325,269)         135,835        (9,898)      (199,332)




c) The balance of recoverable PIS and COFINS relates to charges withheld by government agencies
   and instrumentalities in connection with service sales.


10. DEFERRED TAXES

                                                                          Consolidated
                                             12/31/2010                   12/31/2009                         01/01/2009
                                                     Deferred                      Deferred                          Deferred
ASSETS                                  Tax Base        tax          Tax Base         tax               Tax Base        tax
Income Tax
  Tax Losses                              844,992        211,248     1,385,458            346,365       2,169,381             542,345
  Temporary Differences                 1,786,984        446,746     1,917,214            479,304       2,557,953             639,488

Social Contribution
 Negative Base                            893,800         80,442     1,303,657            117,329       2,537,064             228,336
 Temporary Differences                  1,786,984        160,829     1,917,214            172,549       2,343,716             210,934
Total                                                    899,265                         1,115,546                         1,621,104


                                                                          Consolidated
                                            12/31/2010                    12/31/2009                         01/01/2009
                                                    Deferred                       Deferred                          Deferred
LIABILITIES                            Tax Base        tax           Tax Base         tax               Tax Base        tax

Income Tax
  Temporary Differences                  811,043        202,761       885,972            221,493        1,003,271           250,819

Social Contribution
 Temporary Differences                   811,043          72,994      885,972              79,737       1,003,271             90,294


Total                                                   275,755                          301,230                            341,113




                                                                                                                                        38
NOTES TO THE FINANCIAL STATEMENTS
ON DECEMBER 31, 2010 AND 2009
(Amounts in thousands of Brazilian reais)



In order to substantiate its deferred tax assets, the Company updated the feasibility analysis approved
by the Board of Directors and reviewed by the Fiscal Council considering realizations as of December
2010, which analysis is based on estimations prepared in 2010. The feasibility analysis indicates the
balance will be recovered in up to 5 years. Below is a list of deferred tax asset amounts per relevant
estimated year of realization.


  ASSETS
  2011                                                                                                                        211,602
  2012                                                                                                                        217,625
  2013                                                                                                                        194,819
  2014                                                                                                                        264,590
  2015                                                                                                                         10,629
  Total – Light S.A. and subsidiaries                                                                                         899,265


The interim difference taxable basis breakdown is as follows:
                                                                                                  Consolidated
                                                                     12/31/2010                   12/31/2009                       01/01/2009
                                                                IR                CSLL         IR             CSLL            IR                CSLL
 ASSETS
  Allowance for doubtful accounts                             1,051,462           1,051,462    808,427        808,427         885,065            885,065
  Provision for profit sharing                                   19,270              19,270     26,223         26,223          33,200             33,200
  Provision for labor contingencies                             169,886             169,886    256,734        256,734         164,725            164,725
  Provision for tax contingencies                               167,657             167,657    163,654        163,654         279,212            279,212
  Provision for civil contingencies                             196,095             196,095    179,490        179,490         456,887            242,650
  Impacts resulting from the adoption of the new CPCs            34,754              34,754    357,602        357,602         574,676            574,676
  Other provisions                                              147,860             147,860    125,084        125,084         164,188            164,188
 TOTAL - ASSETS                                               1,786,984           1,786,984   1,917,214     1,917,214       2,557,953           2,343,716

 LIABILITIES
   Deemed cost - Light Energia                                 748,637             748,637     786,000        786,000         828,754             828,754
   Other provisions                                             62,406              62,406      99,972         99,972         174,517             174,517
                                                               811,043             811,043     885,972        885,972       1,003,271           1,003,271



Reconciliation of effective and nominal rates in the provision for income tax and social contribution:

                                                                                                                                Consolidated
                                                                                                                        12/31/2010       12/31/2009
   Earnings before Income tax and Social Contribution                                                                       922.619           960.912
   Combined income tax and social contribution rate                                                                             34%               34%
 Income tax and social contribution at statutory rates                                                                     (313.690)         (326.710)
   Income tax and social contribution effect on permanent additions and exclusions                                          (14.905)          109.409
   Income tax and social contribution effect on equity in the earnings of subsidiaries                                          -             (87.463)
   Effect of offshore income and social contribution taxation                                                               (25.341)          (52.582)
   Deferred tax credits not recognized CVM 371/02 - Light S.A.                                                               (1.541)          (18.863)
   Tax incentives                                                                                                             7.887             4.126
   Others                                                                                                                       121                86
 Income tax and social contribution on income                                                                              (347.469)         (371.997)

   Current IRPJ and CSLL on income                                                                                         (103.482)        (168.994)
   Deferred IRPJ and CSLL on income                                                                                        (243.987)        (203.114)
                                                                                                                           (347.469)        (372.108)




                                                                                                                                                            39
NOTES TO THE FINANCIAL STATEMENTS
ON DECEMBER 31, 2010 AND 2009
(Amounts in thousands of Brazilian reais)



11. CONCESSION FINANCIAL ASSETS

Owing to its utility nature, distribution of electric power is governed by certain Utility Concession
Agreements and any subsequent amendments thereto, entered into by the Union (Granting Authority -
Grantor) and the subsidiary Light Serviços de Eletricidade S.A (Concessionare Operator). These
agreements generally contain provisions governing matters such as follows:

    Which services the Operator must provide and to whom (i.e. consumer classes) such services
     must be provided.

    These concession agreements contain a service level clause or provisions establishing
     performance standards applicable to utility services, usually addressing quality maintenance
     and improvement in connection with any services provided to the public. Additionally, the
     Operator is required, upon expiration of the concession, to return infrastructure assets in the
     same operating conditions as they were handed over when the agreement was executed. In
     order to satisfy and meet these obligations, investments are made on an ongoing basis over the
     term of the concession. Therefore, some assets associated with the concession contract may be
     replaced a number of times before the concession expires.

    Once the concession expires, infrastructure assets return to the granting authority upon
     payment of a certain compensation.

    Concession prices are fixed through a rate methodology set forth in each concession agreement
     that is based on a parametric formula (Portions A and B), and includes a review mechanism to
     ensure that the tariff will be sufficient to cover any costs, repay investments made and provide
     return on the capital invested.

Based on the features of the electric power distribution agreement of the subsidiary, management is of
the opinion that the requirements for application of Accounting Interpretation ICPC 01 - Concession
Contracts, which interpretation provides guidelines addressing how to account for public to private
service concession arrangement, have been successfully met in order to reflect the electric power
distribution business, comprising:

   a) An estimated portion of any investments made and not repaid or amortized before the
      concession expires, net of special obligations classified as financial assets due to their nature as
      an unqualified right to receive cash or any other financial asset directly from the granting
      authority.

   b) A portion remaining after the financial asset was determined, net of any special obligations
      classified as intangible assets because its recovery is contingent upon the utility service being
      used.




                                                                                                       40
NOTES TO THE FINANCIAL STATEMENTS
ON DECEMBER 31, 2010 AND 2009
(Amounts in thousands of Brazilian reais)



The infrastructure handed over or built in connection with the power distribution business, originally
represented by power, plant and equipment and other intangible asset items of the subsidiary, is
recovered through two distinct cash flows, as follows:

      a) a portion of the infrastructure is recovered through selling power distribution services to
         consumers (monthly billing of power consumed/sold) during the term of the concession; and

      b) another portion is recovered by way of the compensation payable for revertible assets upon
         expiration of the concession, which compensation will be paid directly by the Granting
         Authority or any of its agents.

Management estimates that the compensation payable for the financial assets will be made based on
the not yet amortized portions of investments in revertible concession infrastructure assets, determined
at the cost of acquisition/construction, made for the purpose of ensuring stable, continuously improved
provision of utility services, net of any special obligations. This compensation has been determined at
transition date to be as follows:

                                                                                                               Recoverable
                                                                               Property, Plant   Intangible       Assets
                                                                               and Equipment       Assets      (Concession)
Original balance published on January 1, 2009                                      3,459,072        162,135            -
Bifurcation of special obligation                                                   (157,302)       (97,571)       (59,731)
Bifurcation of property, plant and equipment and intangible assets - ICPC 01      (3,133,601)     3,084,245        363,960
Balance in accordance with ICPC 01 - Light SESA                                     168,169       3,148,809        304,229

Balance of subsidiaries                                                           1,421,610         118,823             -

Balance in accordance with ICPC 01 - Consolidated                                 1,589,779       3,267,632        304,229




Below is a summary of transactions related to the balances of revertible assets (concession assets):

Balance as of January 1, 2009                                                                                   304,229
Additions                                                                                                        51,743
Write-offs                                                                                                       (1,188)
Balance as of December 31, 2009                                                                                 354,784
Additions                                                                                                       114,375
Write-offs                                                                                                         (129)
Balance as of December 31, 2010                                                                                 469,030




                                                                                                                              41
NOTES TO THE FINANCIAL STATEMENTS
ON DECEMBER 31, 2010 AND 2009
(Amounts in thousands of Brazilian reais)



12. OTHER RECEIVABLES

                                                                    Parent Company                               Consolidated
                                                    12/31/2010        12/31/2009 01/01/2009        12/31/2010    12/31/2009       01/01/2009
CURRENT
 Advances to suppliers and employees                         18                31             30      38,065         20,395          11,835
 Property rental                                           -                 -              -            302            425             113
 Account receivable from the sale of property              -                 -              -         12,130            -               -
 Public lighting fee                                       -                 -              -         48,399         25,119          25,740
 Expenditures to refund                                    -                 -              -          8,111         10,779          13,360
 Subsidy to low-income segment                             -                 -              -         19,584         15,256          49,926
 Other amounts receivable - LTIP                           -              18,634            -            -           18,634             -
 Other                                                  23,842             1,547            137       26,382          6,642           5,695
Total                                                   23,860            20,212            167      152,973         97,250         106,669

NON-CURRENT
 Assets and rights for disposal                               -               -             -          7,226          7,229          11,597
 Energy - Other                                                                                          -              -            13,329
 Other                                                        -               -             -            639          1,496           1,494
Total                                                         -               -             -          7,865          8,725          26,420



a) Out of the amount stated, a total of R$5,489 (R$3,373 as of December 31, 2009) was
   acknowledged (however yet unpaid) by ANEEL in February 2011, while R$14,095 (R$11,883 as
   of December 31, 2009) are pending acknowledgment.


13. INVESTMENTS
                                                                  Parent Company                                   Consolidated
                                                12/31/2010          12/31/2009      1/01/2009      12/31/2010      12/31/2009         1/01/2009
    Accounted for under the equity method:
     Light SESA                                   2,442,433           2,699,254       2,716,401            -                -                  -
     Light Energia S.A.                             815,593             747,962         690,032            -                -                  -
     Light Esco Prestação de Serviços S.A.           37,787              27,825          17,042            -                -                  -
     Lightger S.A. (a)                               36,767              25,772            (425)           -                -                  -
     LightCom                                         2,733                 -               -              -                -                  -
     Itaocara Energia (a)                            16,067              11,115          (2,867)           -                -                  -
     Axxiom Soluções Tecnológicas S.A.                2,304                 -               -              -                -                  -
     Lighthidro Ltda (a)                                 50                   50              50           -                -                  -
  Subtotal                                        3,353,734           3,511,978       3,420,233            -                -                  -

   Goodwill from future profitability                 2,034                 -               -              -                -                -
   Other permanent investments                        1,020               1,169           1,533         17,586           20,388           13,615
  Subtotal                                            3,054               1,169           1,533         17,586           20,388           13,615
  Total                                           3,356,788           3,513,147       3,421,766         17,586           20,388           13,615



(a) Pre-operational Company




                                                                                                                                                   42
NOTES TO THE FINANCIAL STATEMENTS
ON DECEMBER 31, 2010 AND 2009
(Amounts in thousands of Brazilian reais)




INFORMATION ON SUBSIDIARIES AND JOINT VENTURES
                                                        Ownership                     Paid-up                 Shareholders'              Dividends                  Dividends               Income / loss            Total
                      12/31/2010
                                                       interest (%)                    capital                   equity                  receivable                 received                 for the year            Assets

     Light SESA                                             100                         2,082,365                   2,442,433                   (23,346)                 (89,544)                  475,316             8,037,865
     Light Energia                                          100                            77,422                     815,593                   (21,066)                     -                      88,697             1,538,389
     Light Esco                                             100                             7,584                      37,787                    (3,102)                     -                      13,064                68,161
     LightCom                                               100                             1,000                       2,733                      (540)                     -                       2,273                18,831
     Light Hidro                                            100                                50                           50                      -                        -                         -                      67
     Instituto Light                                        100                               300                         -                         -                        -                         -                       2
     Itaocara Energia                                       100                            22,294                      16,067                       -                        -                         (47)              145,003
     Light Ger                                               51                            35,743                      36,767                       -                        -                           13               48,819
     Axxiom                                                  51                             3,672                       2,304                       -                        -                           78                4,216


                                             Ownership                  Paid-up               Shareholders'            Dividends               Dividends               Additional               Income              Total
             12/31/2009
                                            interest (%)                 capital                 equity                receivable              received              dividends paid           for the year          Assets

Light SESA                                      100                       2,082,365                2,699,254               (125,510)                 (481,564)             (169,729)                541,589           8,419,932
Light Energia                                   100                          77,422                  747,962                (26,833)                  (18,074)                  -                    84,763           1,616,010
Light Esco                                      100                           7,584                   27,825                 (3,358)                      -                     -                    14,141              58,753
Light Hidro                                     100                              50                        50                   -                         -                     -                       -                    69
Instituto Light                                 100                             300                      -                      -                         -                     -                       -                     2
Itaocara Energia                                100                          17,294                   11,115                    -                         -                     -                      (617)            129,530
Light Ger                                       100                          23,791                   25,772                    -                         -                     -                     4,406              32,905



                                                   Ownership                       Paid-up               Shareholders'                 Dividends                 Dividends                   Income                 Total
               01/01/2009
                                                  interest (%)                      capital                 equity                     receivable                received                  for the year             Assets

Light SESA                                             100                           2,082,362                    2,716,401                  (218,064)                (350,766)                  918,164              8,679,914
Light Energia                                          100                              77,422                      690,032                   (18,074)                 (41,387)                   76,101              1,547,093
Light Esco                                             100                               7,584                       17,042                       -                        -                       6,280                 42,933
Light Hidro                                            100                                  50                            50                      -                        -                         -                        53
Instituto Light                                        100                                 300                          -                         -                        -                         -                      -
Itaocara Energia                                       100                               2,697                       (2,867)                      -                        -                         -                  126,583
Light Ger                                              100                               2,000                         (425)                      -                        -                         -                   17,556




CHANGES IN SUBSIDIARIES AND JOINT VENTURES
                                                                             Capital                   Sale of             Dividends                Dividends                                    Equity
                             01/01/2009               12/31/2009                                                                                                                                                  12/31/2010
                                                                             Increase                  interest             received                receivable             Other                 method

   Light SESA                      2,716,401               2,699,254                      -                    -                 (708,791)               (23,346)                  -                 475,316        2,442,433
   Light Energia                     690,032                 747,962                      -                    -                      -                  (21,066)                  -                  88,697          815,593
   Light Esco                         17,042                  27,825                      -                    -                      -                   (3,102)                  -                  13,064           37,787
   LightCom                              -                       -                    1,000                    -                      -                     (540)                  -                   2,273            2,733
   Light Ger                            (425)                 25,772                 37,892                (28,851)                   -                      -                   1,941                     13          36,767
   Light Hidro                             50                      50                     -                    -                      -                      -                     -                     -                  50
   Instituto Light                       -                       -                        -                    -                      -                      -                     -                     -                -
   Itaocara Energia                   (2,867)                 11,115                  5,000                    -                      -                      -                       (1)                 (47)          16,067
   Axxiom                                -                       -                    3,672                    -                      -                      -                  (1,446)                    78           2,304




                                                                                    Capital                       Dividends                      Dividends                            Equity
                                                                                                                                                                                                                12/31/2009
                                          01/01/2009                               increase                        received                      receivable                           method

    Light SESA                                   2.716.401                                         3                   (169.729)                         (389.010)                         541.589                 2.699.254
    Light Energia                                  690.032                                       -                          -                             (26.833)                          84.763                   747.962
    Light Esco                                      17.042                                       -                          -                              (3.358)                          14.141                    27.825
    Light Ger                                         (425)                                   21.791                        -                                 -                              4.406                    25.772
    Light Hidro                                         50                                       -                          -                                 -                                -                          50
    Itaocara Energia                                (2.866)                                   14.597                        -                                 -                               (616)                   11.115




                                                                                                                                                                                                                                   43
NOTES TO THE FINANCIAL STATEMENTS
ON DECEMBER 31, 2010 AND 2009
(Amounts in thousands of Brazilian reais)



14. PROPERTY, PLANT AND EQUIPMENT


                                                                                                     Consolidated
                                                                                 12/31/2010                                  12/31/2009          01/01/2009
                                                                                   Accumulated
                                                           Historical cost          depreciation          Net value          Net value           Net value

      Generation                                                   2,662,063         (1,436,442)            1,225,621         1,281,715            1,341,295
      Transmission                                                    57,601            (41,504)               16,097            16,770               17,455
      Distribution                                                    47,479            (36,907)               10,572            15,336               22,542
      Administration                                                 240,265           (166,885)               73,380            91,141              103,423
      Commercialization                                                9,785             (7,519)                2,266             2,305                3,479
    In service                                                     3,017,193         (1,689,257)            1,327,936         1,407,267            1,488,194

      Generation                                                      185,964                                   185,964         112,751              57,266
      Administration                                                  114,993                                   114,993          80,550              44,319
    In progress                                                       300,957                -                  300,957         193,301             101,585


    Total                                                          3,318,150         (1,689,257)            1,628,893         1,600,568            1,589,779




The statement below summarizes the changes in property, plant and equipment:
                                                                                                 Consolidated
                                                                Balance as of                                                  Inter-account        Balance as of
                                                                 12/31/2009          Additions              Write offs           transfers           12/31/2010
PROPERTY, PLANT AND EQUIPMENT IN SERVICE
Cost

    Land                                                              105,803                -                       (777)                -                105,026
    Reservoir, dams and water mains                                 1,247,913              4,121                   (1,331)                -              1,250,703
    Buildings, works and improvements                                 271,021                222                  (15,289)                -                255,954
    Machinery and equipment                                         1,240,560              6,789                   (1,403)                -              1,245,946
    Vehicles                                                           32,497                 65                      (71)                -                 32,491
    Fixtures and furnishings                                          127,130                894                     (951)                -                127,073
Total Property, Plant and Equipment in Service - Cost               3,024,924             12,091                  (19,822)                -              3,017,193

(-) Depreciation
     Reservoir, dams and water mains                                 (734,988)            (22,524)                 1,331                  -               (756,181)
     Buildings, works and improvements                               (147,937)             (7,853)                 6,214                  -               (149,576)
     Machinery and equipment                                         (616,922)            (37,738)                   576                  -               (654,084)
     Vehicles                                                         (24,857)             (3,114)                    73                  -                (27,898)
     Fixtures and furnishings                                         (92,953)             (9,485)                   920                  -               (101,518)
Total Property, Plant and Equipment in Service - Depreciation      (1,617,657)            (80,714)                 9,114                  -             (1,689,257)

PROPERTY, PLANT AND EQUIPMENT IN PROGRESS

    Reservoir, dams and water mains                                   43,416              34,198                     -                    -                 77,614
    Buildings, works and improvements                                 29,866              14,645                     -                    -                 44,511
    Machinery and equipment                                           81,300              51,364                     -                (13,874)             118,790
    Vehicles                                                           7,497               2,623                     -                    (65)              10,055
    Fixtures and furnishings                                          14,530               2,081                     -                 (3,022)              13,589
    Studies and frojects                                              16,692              20,481                    (775)                                   36,398
Total Property, Plant and Equipment in Progress                      193,301             125,392                    (775)             (16,961)             300,957

TOTAL PROPERTY, PLANT AND EQUIPMENT                                 1,600,568             56,769                  (11,483)            (16,961)           1,628,893




                                                                                                                                                                      44
NOTES TO THE FINANCIAL STATEMENTS
ON DECEMBER 31, 2010 AND 2009
(Amounts in thousands of Brazilian reais)


                                                                                              Consolidated
                                                             Balance as of                                                     Inter-account        Balance as of
                                                             01/01/2009           Additions             Write offs                transfers         12/31/2009
PROPERTY, PLANT AND EQUIPMENT IN SERVICE
Cost
   Land                                                            105,803                -                      -                         -              105,803
   Reservoir, dams and water mains                               1,247,913                -                      -                         -            1,247,913
   Buildings, works and improvements                               271,950                -                     (929)                      -              271,021
   Machinery and equipment                                       1,248,149             12,649                (20,238)                      -            1,240,560
   Vehicles                                                         36,732                -                   (4,235)                      -               32,497
   Fixtures and furnishings                                        139,784                535                (13,189)                      -              127,130
Total Property, Plant and Equipment in Service - Cost            3,050,331             13,184                (38,591)                      -            3,024,924

(-) Depreciation
    Reservoir, dams and water mains                               (711,660)           (23,328)                  -                          -             (734,988)
    Buildings, works and improvements                             (140,535)            (8,021)                  619                        -             (147,937)
    Machinery and equipment                                       (593,192)           (37,999)               14,269                        -             (616,922)
    Vehicles                                                       (24,953)            (3,595)                3,691                        -              (24,857)
    Fixtures and furnishings                                       (91,797)           (10,969)                9,813                        -              (92,953)
Total Prop., Plant and Equip. in Service - Depreciation         (1,562,137)           (83,912)               28,392                        -           (1,617,657)

PROPERTY, PLANT AND EQUIPMENT IN PROGRESS

   Reservoir, dams and water mains                                 22,389              21,027                    -                        -                43,416
   Buildings, works and improvements                               15,102              14,764                    -                        -                29,866
   Machinery and equipment                                         49,737              45,605                    -                    (14,042)             81,300
   Vehicles                                                         3,645               3,852                    -                        -                 7,497
   Fixtures and furnishings                                         6,146               8,756                    -                       (372)             14,530
   Studies and projects                                             4,566              13,060                   (934)                     -                16,692
Total Property, Plant and Equipment in Progress                   101,585             107,064                   (934)                 (14,414)            193,301


TOTAL PROPERTY, PLANT AND EQUIPMENT                              1,589,779             36,336                (11,133)                 (14,414)          1,600,568



       (i) Subsidiary Light SESA does not hold any Union-owned resources and rights in its assets.

       (ii) Annual depreciation rates:

       The schedule below summarizes significant depreciation rates as determined in ANEEL Resolution
       No. 367, as of June 2, 2009:

                 Generation                        ( %)      Commercialization    (%)            Administration         (%)             Transmission       (%)
    Busbar                                           2.5   Constructions           4.0        Constructions              4.0       System conductor         2.5
    Circuit Breaker                                  3.0   General equipment      10.0        General equipment         10.0       General equipment       10.0
    Buildings                                        4.0   Vehicles               20.0        Vehicles                  20.0       System structure         2.5
    Water intake equipment                           3.7                                                                           Switchgear               4.3
    Water intake structure                           4.0
    Generator                                        3.3
    Turbines – generator                             5.9
    Reservoir, dams and water mains                  2.0
    Local communications system                      6.7
    Hydraulic turbine                                2.5

    Average depreciation rate                              Average depreciation rate          Average depreciation rate            Average depreciation rate
    Generation                                      3.8    Commercialization        11.3         Administration        11.3        Transmission              4.8




                                                                                                                                                                     45
NOTES TO THE FINANCIAL STATEMENTS
ON DECEMBER 31, 2010 AND 2009
(Amounts in thousands of Brazilian reais)



15. INTANGIBLE ASSETS


                                                                         Consolidated
                                                       12/31/2010                        12/31/2009    01/01/2009
                                                       Accumulated
                                       Historic cost   amortization        Net Value     Net Value     Net Value
Intangible
  Concession right of use                  5,897,129       (3,218,801)       2,678,328     2,667,560     2,674,501
  Goodwill from future profitability           2,034              -              2,034           -             -
  Other                                      450,714         (367,943)          82,771        77,070        96,570
In Use                                     6,349,877       (3,586,744)       2,763,133     2,744,630     2,771,071
  Concession right of use                    788,111              -            788,111       489,639       329,364
  Other                                       62,528              -             62,528       188,711       167,197
In progress                                  850,639              -            850,639       678,350       496,561

TOTAL INTANGIBLE (1)                       7,200,516       (3,586,744)       3,613,772     3,422,980     3,267,632




  (1) Net of special obligations comprising (i) contributions made by the Union, states, municipalities
      and consumers, (ii) any unqualified donations (i.e. not subject to any consideration in benefit of
      the donor), and assistance intended as investments to be made toward concession of the electric
      power distribution utility.

In progress intangible includes inventories of project materials in the amount of R$43,808 as of
December 31, 2010 (R$26,904 as of December 31, 2009), as well as a provision for inventory
devaluation in the amount of R$5,749 (R$5,749 as of December 31, 2009).

A total amount of R$9,183 (R$29,973 in 2009) was carried over to intangible assets in 2010 by way of
interest capitalization and as a counterparty to the financial income.

The infrastructure used by subsidiary Light SESA is associated with the distribution service, and
therefore cannot be removed, disposed of, assigned, conveyed, or encumbered as mortgage collateral
without the prior written authorization of the Granting Authority, which authorization, if given, is
regulated by Resolution ANEEL No. 20/99.

It is the responsibility of ANEEL in its capacity as regulatory agency to determine the estimated
economic useful lives of each piece of distribution infrastructure assets for pricing purposes, as well as
for the purpose of calculating the amount of the relevant compensation payable upon expiration of the
concession term. This estimate is revised from time to time, represents the best estimate concerning
the assets' useful lives, and is accepted in the market as appropriate for accounting and regulatory
purposes.

The management of Light SESA is of the opinion that amortization of intangible assets must be
consistent with the return expected on each infrastructure asset, via the applicable rates. Thus,
intangible assets are amortized over the expected length of such return, limited to the term of the
concession. As a result of this amortization method, the total amount of intangible assets will be
amortized at all times in a non-linear fashion.


Below is a summary of changes in the intangible assets:

                                                                                                                     46
NOTES TO THE FINANCIAL STATEMENTS
ON DECEMBER 31, 2010 AND 2009
(Amounts in thousands of Brazilian reais)



                                                                           CONSOLIDATED
                                             Balances on                                  Inter-account     Balances on
                                             12/31/2009      Additions     Write offs       transfers       12/31/2010
In Service
  Concession right of use                      5,691,229        259,135        (53,235)               -         5,897,129
  Goodwill from future profitability                 -            2,034            -                  -             2,034
Other                                            413,090         37,624            -                  -           450,714
Total Intangible in Service                    6,104,319        298,793        (53,235)               -         6,349,877

(-) Depreciation
   Concession right of use                     (3,023,643)     (240,387)        45,229                -        (3,218,801)
Other                                            (336,184)      (31,759)           -                  -          (367,943)
Total Intangible in Service - Depreciation     (3,359,827)     (272,146)        45,229                -        (3,586,744)

In Progress
  Concession right of use                        605,289        579,084            -            (396,262)         788,111
Other                                             73,199         21,578            -             (32,249)          62,528
Total Intangible in Progress                     678,488        600,662            -            (428,511)         850,639

TOTAL INTANGIBLE ASSETS                        3,422,980        627,309         (8,006)         (428,511)       3,613,772


                                                                           CONSOLIDATED
                                             Balances on                                  Inter-account     Balances on
                                             01/01/2009      Additions     Write-offs       transfers       12/31/2009
In Service
  Concession right of use                      5,549,279        226,674        (84,724)                         5,691,229
Other                                            397,368         15,722            -                  -           413,090
Total Intangible in Service                    5,946,647        242,396        (84,724)               -         6,104,319

(-) Depreciation
   Concession right of use                     (2,874,778)     (224,193)        75,328                -        (3,023,643)
Other                                            (300,975)      (35,209)           -                  -          (336,184)
Total Intangible in Service - Depreciation     (3,175,753)     (259,402)        75,328                -        (3,359,827)

In Progress
  Concession right of use                        446,947        471,293         (2,885)         (310,066)         605,289
Other                                             49,791         40,982            -             (17,574)          73,199
Total Intangible in Progress                     496,738        512,275         (2,885)         (327,640)         678,488

TOTAL INTANGIBLE ASSETS                        3,267,632        495,269        (12,281)         (327,640)       3,422,980




                                                                                                                             47
NOTES TO THE FINANCIAL STATEMENTS
ON DECEMBER 31, 2010 AND 2009
(Amounts in thousands of Brazilian reais)



16. SUPPLIERS




a) Free Energy – Reimbursement to Power Generation Companies

At a meeting held December 15, 2009, the executive board of ANEEL approved the methodology and
procedures applicable to determining the balances of Free Energy and Revenue Losses incurred by
generation and distribution utility companies following expiration of the Extraordinary Tarift Review
(RTE) applicable to power supply rates. However, Resolution No. 387 as of December 15, 2009,
published January 12, 2010, concluded the process of computing the Revenue Loss and Free Energy
closing balances, and also determined the amounts of any reimbursement operators should pay each
other, as applicable, which amounts were pending validation as of December 31, 2010.

Energy supply, electric network usage grid charge, materials and service balances have an average
settlement period of up to 90 days.




                                                                                                    48
NOTES TO THE FINANCIAL STATEMENTS
ON DECEMBER 31, 2010 AND 2009
(Amounts in thousands of Brazilian reais)



17. LOANS, FINANCING AND FINANCIAL CHARGES
                                                                                             Consolidated
                                                 Principal                           Charges                                       Total
          Financing Entity               Current       Non-current          Current       Non-current       12/31/2010          12/31/2009           01/01/2009
TN - Par Bond                                 -              64,848              838               -              65,686              68,641               92,130
TN - Collateral - Par Bond                    -             (38,844)             -                 -             (38,844)            (35,060)             (43,507)
TN - Discount Bond                            -              45,249              146               -              45,395              47,443               63,976
TN - Collateral - Discount Bond               -             (27,276)             -                 -             (27,276)            (24,597)             (30,519)
TN - C. Bond                                5,512            13,780              330               -              19,622              26,364               43,247
TN - Debit. Conv.                           6,174             3,087               31               -               9,292              16,185               30,558
TN - Bib                                      200               401               11               -                 612                 852                1,431
  BNDES - Importation                         -                 -                -                 -                 -                   446                2,397
KFW III , IV, and V - Tranche A/B/C           -                 -                -                 -                 -                 1,439                3,981
  TN - Flirb                                  -                 -                -                 -                 -                   -                  1,168
  TN - New Money                              -                 -                -                 -                 -                   -                  1,151
  Societe Generale II                         -                 -                -                 -                 -                   -                  4,409
TOTAL FOREIGN CURRENCY                     11,886            61,245            1,356               -              74,487            101,713              170,422
Eletrobrás                                   564                2,033               1              -              2,598                3,809              11,052
CCB Bradesco                                  -               450,000          11,340              -            461,340              458,381             464,014
BNDES - FINEM                              82,616             227,193           1,353              -            311,162              394,139             433,062
BNDES - FINEM direct                       16,973             135,946           2,346              -            155,265               59,806                 -
BNDES - FINEM + 1                          16,973             135,946           2,609              -            155,528               59,811                 -
BNDES - FINEM direct PSI                    8,316              96,768             747              -            105,831               35,284                 -
   Working capital- Santander                 -                80,000           2,646              -             82,646               82,601              83,919
   BNDES - PROESCO 1                          119                 338               2              -                459                1,812                 596
   BNDES - PROESCO 2                          230                 768               4              -              1,002                  -                   -
   BNDES - PROESCO 3                          109                 371               1              -                481                  -                   -
   BNDES - PROESCO 4                          339               1,694              18              -              2,051                  -                   -
   BNDES - PROESCO 5                          793               3,963              22              -              4,778                  -                   -
   RGR                                        -                   -               246              -                246                  246                 -
Sundry banking warranties                     -                   -               209              -                209                  194                 284
TOTAL DOMESTIC CURRENCY                   127,032           1,135,020          21,544              -          1,283,596            1,096,083             992,927
SWAP                                           -                 -              4,060            1,235             5,295               5,558                  -
OVERALL TOTAL                             138,918           1,196,265          26,960            1,235        1,363,378            1,203,354           1,163,349



The statement below summarizes the contractual terms and conditions applicable to our loans and
borrowings as of December 31, 2010:
                                                                                                             Principal Amortization
                                       Date of                        Interest Rate                                                    Remaining
           Financing Entity            signature    Currency               p.a.              Beginning             Payment            Installments        End
TN - Par Bond                         04/29/1996     US$                   6%                  2024               Lump sum                  1             2024
TN - Collateral - Par Bond            04/29/1996     US$             U$ Trandasury             2024               Lump sum                  1             2024
TN - Discount Bond                    04/29/1996     US$             Libor + 13/16             2024               Lump sum                  1             2024
TN - Collateral - Discount Bond       04/29/1996     US$             U$ Trandasury             2024               Lump sum                  1             2024
TN - C. Bond                          04/29/1996     US$                   8%                  2004               Half-yearly               7             2014
TN - Debit. Conv.                     04/29/1996     US$               Libor + 7/8             2004               Half-yearly               3             2012
TN - Bib                              04/26/1996     US$                   6%                  1999               Half-yearly               6             2013
                                                                                                                                       between 2         2013 to
                                                     UFIR                                                    Monthly and quarterly
Eletrobrás                              Sundry                           5%                                                             and 120           2017
CCB Bradesco                          10/18/2007     CDI            CDI + 0.85%                2012                 Yearly                  6             2017
BNDES - FINEM                         11/05/2007     TJLP           TJLP + 4.3%                2009                Monthly                 45             2014
BNDES - FINEM direct                  11/30/2009     TJLP          TJLP + 2.58%                2011                Monthly                 72             2017
BNDES - FINEM + 1                     11/30/2009     TJLP        TJLP + 1% + 2.58%             2011                Monthly                 72             2017
BNDES - FINEM direct PSI              11/30/2009                        4.5%                   2011                Monthly                101             2019
Working capital- Santander            09/03/2010     CDI             CDI + 1.4%                2010                 Yearly                  1             2014
BNDES - PROESCO 1                     12/12/2008     TJLP           TJLP + 2.5%                2009                Monthly                 46             2014
BNDES - PROESCO 2                     6/15/2009      TJLP          TJLP + 2.51%                2009                Monthly                 53             2015
BNDES - PROESCO 3                     6/15/2010      TJLP      TJLP + 2.18% and 4.5%           2010                Monthly                 53             2015
BNDES - PROESCO 4                     9/15/2010      TJLP      TJLP + 2.05% and 5.5%           2010                Monthly                 60             2016
BNDES - PROESCO 5                     12/16/2010     TJLP      TJLP + 2.05% and 5.5%           2010                Monthly                 60             2016




The loan with Banco Real (ABN Amro) due in August 2010 in the amount of R$80,000 was renewed
with Banco Santander (new controlling company of Banco Real) maintaining the same amount and
CDI cost + 1.4% p.a., due on September 3rd, 2014.


                                                                                                                                                                     49
NOTES TO THE FINANCIAL STATEMENTS
ON DECEMBER 31, 2010 AND 2009
(Amounts in thousands of Brazilian reais)


In 2010 a total of R$246,942 was drawn down against the finacing signed with BNDES on November
30, 2009 in connection with the investment plan of Light SESA, while R$10,155 were drawn down for
Light Energia in 2009 and 2010.

On September 27, 2010, R$7,322 was directly released to Light Esco through Proesco’s special
financing line to the implementation of the energy efficiency project.

In addition to the collaterals indicated above, loans are guaranteed by receivables in the approximate
amount of R$45,978.

The principal of long-term loans and financing matures as follows (excluding financial charges) on
December 31st, 2010:


                            Local Currency      Foreign Currency          Total
  2012                            223,461                  8,799            232,260
  2013                            223,448                  5,712            229,160
  2014                            282,556                  2,756            285,312
  2015                            140,153                    -              140,153
  after 2015                      265,402                 43,978            309,380
 TOTAL                          1,135,020                 61,245          1,196,265


In percentage terms, the variation of major foreign currencies and economic ratios in the period, which
are used to adjust loans, financing and debentures, was as follows in the years:

                                               Variation %
                           12/31/2010          12/31/2009          01/01/2009
  USD                             (4.31)               (25.49)            31.94
  EUR                            (11.14)               (22.57)            24.13
  UMBNDES                         (3.76)               (25.66)            33.86
  IGP-M                           11.32                 (1.71)             9.81
  CDI                              9.75                  9.87             12.37
  SELIC                            9.78                  9.92             12.48

Covenants

The funding of CCB Bradesco, the loans with Banco Santander and with BNDES FINEM, classified as
current and non-current, requires that the Company maintain certain debt ratios and interest coverage.
In the year ended December 31, 2010, the Company and its subsidiaries are in compliance with all
required debt covenants.




                                                                                                    50
NOTES TO THE FINANCIAL STATEMENTS
ON DECEMBER 31, 2010 AND 2009
(Amounts in thousands of Brazilian reais)



18. DEBENTURES AND FINANCIAL CHARGES

                                                                                      Consolidated
                                             Principal                        Charges                            Total
          Financing Entity           Current      Non Current                 Current      12/31/2010         12/31/2009        01/01/2009
   Debentures 1st Issue                     -                     -               -                 -               8,057           24,066
   Debentures 4th Issue                   19                       67             -                 86                107              118
   Debentures 5th Issue               61,822                 727,824           17,760          807,406            955,598          982,888
   Debêntures 6th Issue              298,670                     -              3,061          301,731            298,409              -
LOCAL CURRENCY - TOTAL               360,511                 727,891           20,821        1,109,223          1,262,171        1,007,072


Contractual conditions of debentures on December 31, 2010 are as follows:

                                                                                             Principal Amortization
                              Date of                         Interest Rate                                       Remaining
      Financing Entity        Signature         Currency           p.a.         Beginning        Payment         Installments     End
Debentures 4th Issue         06/30/2005          TJLP         TJLP + 4%           2009           Monthly              54          2015
Debentures 5th Issue         01/22/2007           CDI         CDI + 1,50%         2008          Quarterly             13          2014
Debentures 6th Issue         06/01/2009           CDI         115% of CDI         2011          Lump Sum               1          2011


Total principal amount is represented net of debentures issue costs, as provided for in CVM Resolution
556/08. These costs are detailed in the table below:

                                                           12/31/2010                                     12/31/2009       01/01/2009
                                 Incurred                  Value to be               Total                 Total                Total
           Issue                   value                    recognized               Cost                  Cost                 Cost
  Debentures 1st Issue                     -                         -                       -                 1,070                1,069
  Debentures 4th Issue                 7,448                           20                7,468                 7,468                7,468
  Debentures 5th Issue                 7,094                       5,354                12,448               12,448                12,457
  Debentures 6th Issue                 3,961                       1,330                 5,291                 5,291                    -
  TOTAL                               18,503                       6,704                25,207               26,277                20,994


Installments related to principal of long-term debentures are due (financial charges not included) on
December 31, 2010:

 2012                                                  179,839
 2013                                                  243,438
 2014                                                  304,606
 2015                                                        8
TOTAL                                                  727,891




                                                                                                                                             51
NOTES TO THE FINANCIAL STATEMENTS
ON DECEMBER 31, 2010 AND 2009
(Amounts in thousands of Brazilian reais)



Covenants

Classified in the current and non-current, the 5th and 6th Issue of Debentures require the maintenance of
indebtedness indexes and coverage of interest rates. In the period ended December 31, 2010, the
Company and its subsidiaries complied with all the covenants required.


19. REGULATORY CHARGES – CONSUMER CONTRIBUTIONS
                                                                                   Consolidated
                                                                     12/31/2010    12/31/2009     01/01/2009
CURRENT
 Fuel usage account quota – CCC                                           25,472          4,298        24,895
 Energy development account quota – CDE                                   17,182         17,173        16,638
 Reversal global reserve quota – RGR                                       1,394          5,359         6,428
 Incentive Program to Electric Power Alternative Sources – PROINFA           -           10,792         5,369
 Charges for capacity and emergency acquisition                           73,170         73,169        73,403
                                                                         117,218        110,791       126,733



Fuel Consumption Account (Conta Consumo de Combustível, or CCC) - This is a charge to the
invoiced revenues derived by distribution operators, intended as a subsidy toward the fuel costs
associated with isolated electric systems so that consumer rates payable in locations within such
systems are similar to those charged in interconnected systems.

Energy Development Account (Conta de Desenvolvimento Energético, or CDE) - This charge is
intended to further energy development in states and increase competitiveness of the energy generated
from alternative sources in those locations served by interconnected grid systems, thus allowing an
universal electric power supply service. The amounts payable are also defined by ANEEL.

Global Reversal Reserve (Reserva Global de Reversão, or RGR) - This is a charge applying to the
Brazilian electric power industry, payable every month by electric power utility operators for the
purpose of funding reversal, expansion and improvement of electric power utility services. The annual
amount of this charge corresponds to 2.5% of an operator's investments in assets employed in the
electric power utility service, subject to a cap of 3.0% of the operator's annual revenue.

Alternative Power Source Stimulus Program (Programa de Incentivo às Fontes Alternativas de Energia
Elétrica, or PROINFA) - Established by Law No. 10,438/2002, the goal of PROINFA is to further
greater participation of renewable sources such as small hydroelectric plants (PCHs), wind farms, and
thermoelectric projects as power sources. All electricity generated under this program is purchased by
Eletrobrás, and the associated costs are shared among all end consumers (both free and dedicated)
within the National Interconnected System (SIN), except low-income consumers with a monthly
power consumption of less than or equal to 80 kilowatts-hour (kWh).

Emergency Capacity Charge and Emergency Acquisition Charge (Encargo de Capacidade Emergencial
e Encargo de Aquisição Emergencial, ECE and EAE) – These charges comprise operating, tax, and
administrative costs incurred by the Comercializadora Brasileira de Energia Emergencial – CBEE
when purchasing generation or power capacities, which costs are prorated among end consumers
served by the NIS based on each individual power consumption pattern.



                                                                                                                52
NOTES TO THE FINANCIAL STATEMENTS
ON DECEMBER 31, 2010 AND 2009
(Amounts in thousands of Brazilian reais)


20. CONTINGENCIES

The Company and its subsidiaries are party in tax, labor and civil lawsuits and regulatory proceedings
in several courts. Management periodically assesses the risks of contingencies related to these
proceedings, and based on the legal counsel’s opinion it records a provision when unfavorable
decisions are probable and whose amounts are quantifiable. In addition, the Company does not record
assets related to lawsuits with a less-than-probable chance of success, as they are considered uncertain.

The changes of provisions for contingencies are:


CURRENT                                                              Consolidated
                                       Labor            Civil            Tax          Other          Total
Balance as of January 1, 2009                  597              -              -          1,640          2,237
 Write-offs / reversals                        (597)            -              -         (1,640)         (2,237)

Balance as of December 31, 2009                 -               -              -            -              -



There were no contingencies recorded under current on December 31st, 2009 and 2010.


NON CURRENT                                                         Consolidated
                                      Labor            Civil           Tax          Other          Total
Balance as of January 1 2009            164,128         252,930         493,823        83,002        993,883
 Additions                               18,399          53,352              371        3,982         76,104
 Adjustments                                -            12,999           29,281        3,213         45,493
 Write-offs / payments                  (16,380)        (57,875)             -         (2,519)       (76,774)
 Write-offs / reversals                  (2,492)         (9,257)             -           (555)       (12,304)
 Reversal - Law 11941/09                    -               -           (357,049)         -         (357,049)
Balance as of December 31 2009          163,655         252,149          166,426       87,123       669,353
 Additions                               18,208          38,909            1,578       36,121         94,816
 Adjustments                                -            22,614           16,485        5,398         44,497
 Write-offs / payments                  (13,371)        (75,852)          (4,147)     (26,944)      (120,314)
 Write-offs / reversals                    (836)        (82,238)             -        (53,381)      (136,455)
Balance as of December 31 2010          167,656         155,582          180,342       48,317       551,897

Escroe deposits
Balance as of December 31 2010           18,746          26,160           40,354        1,655        86,915



20.1 Labor Contingencies

There are approximately 3,372 labor-related legal proceedings in progress (3,680 on December 31st,
2009) in which the Company and subsidiaries are the defendants. These labor proceedings mainly
involve the following matters: overtime; hazardous work wage premium; equal pay; pain and
suffering; subsidiary/joint liability of employees from outsourced companies; difference of 40% fine of
FGTS (Government Severance Indemnity Fund for Employees) derived from the adjustment due to
understated inflation and overtime.




                                                                                                                   53
NOTES TO THE FINANCIAL STATEMENTS
ON DECEMBER 31, 2010 AND 2009
(Amounts in thousands of Brazilian reais)



20.2 Civil Contingencies

The Company and its subsidiaries are defendants in approximately 37,171 civil legal proceedings
(39,506 on December 31st, 2009), of which 18,138 are in the state and federal courts referring to Civil
Proceedings (14,497 on December 31st, 2009), among which those claims that can be accurately
assessed amounting to R$310,800 (R$747,873 on December 31, 2009) and 19,033 are in Special Civil
Courts (24,559 on December 31 st, 2009), with total claims amounting to R$300,959 (R$377,124 on
December 31 st, 2009).

  Civil Contingencies                           Accrued Value (probable loss)

                                   12/31/2010           12/31/2009              01/01/2009
  a) Civil proceedings                    87,842              124,576                113,303
  b) Special civil court                  25,138               29,555                 33,783
  c) "Cruzado" Plan                       42,602               98,018                105,844
  Total                                 155,582               252,149                252,930


a) The Provision for civil proceedings comprises lawsuits in which Light SESA is the defendant and it
   is probable the claim will result in a loss in the opinion of the respective attorneys. The claims
   mainly involve alleged moral and property damage due to the Company’s ostensive behavior
   fighting irregularities in the network, as well as consumers challenging the amounts paid.

    Subsidiary Light SESA is party of 11,831 civil proceedings that Management believes that risk of
    loss are less than probable, based on the opinion of its legal counsels. Therefore, no provision was
    established. The amount, currently assessed, represented by these claims is R$159,200 (R$480,060
    on December 31, 2009).

b) Lawsuits in the Special Civil Court are mostly related to matters regarding consumer relations,
   such as improper collection, undue power cut, power cut due to delinquency, network problems,
   various irregularities, bill complaints, meter complaints and problems with ownership transfer.
   There is a limit of 40 minimum monthly wages for claims under procedural progress at the Special
   Civil Court. Accruals are based on the moving average of the last 12 months of condemnation
   amount.

c) In the last quarter of 2010, the Company obtained a favorable decision in last resort (High Court of
   Justice – STJ) on the final decision on lawsuit #1995.001.073862-2 against CSN in which it was
   discussed the legality of the tariff adjustment authorized by the National Department of Water and
   Electric Power during the freeze period of prices (“Cruzado Plan”). This decision enabled the
   reversal of the accrued amount of R$61,735, as contra-account in item operating expenses.



20.3 Tax Contingencies

The provisions accounted for tax contingencies are as follows:

                                                                                                     54
NOTES TO THE FINANCIAL STATEMENTS
ON DECEMBER 31, 2010 AND 2009
(Amounts in thousands of Brazilian reais)


Tax Contingencies                         Accrued Value (probable loss)
                                  12/31/2010      12/31/2009         01/01/2009
 PIS / COFINS                              -               -            214,237
 PIS/COFINS – RGR and CCC                8,561           8,561           17,709
 INSS – tax deficiency notice           40,964          39,291           37,756
 INSS – quarterly                       22,579          21,504           92,677
 Law nº 8200/91                            -               -             20,063
 ICMS                                   94,400          88,039           76,610
 Social contribution                       -               -             27,076
 CIDE                                    4,988           4,792            4,593
 Other                                   8,850           4,239            3,102
Total                                  180,342         166,426          493,823

After the enactment of Law 11,941/2009 that allowed for the payment of federal tax debits in
installments, Light SESA chose to include debits purpose of a few lawsuits and administrative
proceedings in said payment, totaling R$713,000. It is worth pointing out that the adhesion to said
payment in installments was already authorized by the Brazilian Federal Revenue Service, pursuant to
the electronic message sent to the Company on December 12, 2009, and in the moment it awaits the
consolidation of said debits.

Light SESA is parties to tax, regulatory and legal proceedings in which Management, based on the
opinion of its legal counsels, believes the risks of loss are less than probable, and for which no
provision was recorded. Currently, the quantifiable amount of these proceedings is R$858,400
(R$1,156,600 on December 31 st, 2009).

Discussed below are certain tax issues or procedures that were deemed as likely losses and significant
or which had any developments in 2010:

(i) Normative Instruction (NI) No. 86 (2003 through 2005) - This notice of infringement was issued to
assess a fine on the Company for alleged failure to make electronic file submissions, as required by NI.
No. 86/2001, for calendar years 2003 through 2005. The appeal of the Company was dismissed, upon
which an special appeal was filed. The amount involved with this issue as of December 31 st, 2010 was
R$257,800 (R$240,200 as of December 31 st, 2009).

(ii) Contribution for Education Allowance – This issue relates to dis-allowance and subsequent
assessment of deductions made by the Company when withholding contributions for the education
allowance between July 1996 and June 2006. The Company's response to the relevant notice of
infringement was granted in part, and the amount assessed was reduced by R$9,300 to R$624. The
Company nevertheless filed an appeal to discuss the remaining amount.

(iii) Transfer of PIS/COFINS - Up to December 31 st, 2010, subsidiary Light SESA was party in 203
pending lawsuits filed by clients questioning the transfer of PIS and COFINS to the electricity bill,
pleading the refund of the amounts unduly paid. On August 22, 2010, the Superior Court of Justice
judged a leading case of the electricity sector, affirming the legitimacy of transferring the PIS/COFINS
to electricity bills. In view of this case law favorable to the distribution companies, the chances of
losing the case which were possible now become remote.

                                                                                                     55
NOTES TO THE FINANCIAL STATEMENTS
ON DECEMBER 31, 2010 AND 2009
(Amounts in thousands of Brazilian reais)


(iv) SEPT – This lawsuit was brought by subsidiary Light SESA seeking cancellation of an assessment
of the so-called Single Electric Power Tax (SEPT) in connection with the subsidiary's alleged failure to
invoice the amount of this tax to consumers classified as “government” consumers. The appeal filed by
the subsidiary was granted. The historic (in 2004) amount of this case is R$3,400.

(v) LIR/LOI - IRPJ/CSLL - Income vs. Equity Pickup – Subsidiary Light SESA filed writ of
mandamus No. 2003.51.01.005514-8 to challenge an assessment of corporate income tax (IRPJ) and
social contribution (CSL) on income earned by its subsidiaries LIR e LOI since 1996 that was
allegedly not offered to taxation, as well as the demand for including equity pickup income in the
assessment of the IRPJ and CSL for calendar years up to 2002 and subsequent years. Light SESA
attempted to move for a partial withdrawal in this writ of mandamus to include the tax debts in the
repayment program created by Law No. 11,941/09, and proceed against the assessment in connection
with the equity accounting method. However, the Treasury attorney did not accept this partial
withdrawal, nor did the competent court. As a result, Light SESA withdrew its writ completely and
changed the assessment methodology for the IRPJ/CSLL, which had previously been done based on
the income, to use the equity method of accounting. The tax authorities disallowed this change and
assessed Light SESA in the amount of R$131,550. Light SESA filed a challenge in response to this
assessment.

20.4 Other Contingencies

a) Administrative Regulatory Contingencies

The Company will now discuss regulatory contingencies of its subsidiaries Light SESA and Light
Energia in connection with administrative issues pending with ANEEL.

a.1) Notice of Infringement ANEEL No. 007/2010-SFE – This notice was issued on February 17,
2010 and a fine was imposed in the amount of R$9,544 as a result of an inspection carried out in
December 2009 by ANEEL officials to verify and review the causes of power shortages occurred in
the Operator's underground distribution system. The Company challenged this notice of infringement
on March 5, 2010 and moved for dismissal of any alleged noncompliances, as well as for reduction of
the fines applied. Alternatively, the Company moved that the fine was converted in an memorandum of
agreement (TAC). The executive board of ANEEL did not consent to the TAC and the Company then
filed an internal appeal against this decision by ANEEL. The case is currently pending a decision by
ANEEL on the appeal and the motion for a TAC. A provision was set up in the amount of the fine
imposed.

a.2) Notice of Infringement ANEEL No. 071/2010-SFF – This notice was issued on March 17, 2010,
and a fine was imposed in the amount of R$448 on account of alleged nonconformities determined in
economic, financial and accounting audits performed in subsidiary Light SESA. The subsidiary filed
an appeal on April 1, 2010 and requested the fines were converted in admonitions. This appeal is
currently pending a decision by ANEEL. In Order No. 1665/2010 dated June 10, 2010, ANEEL
reduced the amount of the fine to R$419. The appeal filed is currently pending a decision by ANEEL.
A provision was set up in the amount of the fine imposed.

a.3) Notice of Infringement ANEEL No. 013/2010-SFG – This notice was issued on March 4, 2010,
and a fine was imposed in the amount of R$1,120 on account of alleged failures determined by the
regulator in connection with black-start procedures at the UHE generation plants of Fontes Nova, Nilo
Peçanha e Pereira Passos, which failures occurred in resuming the NIS following the anomaly
                                                                                                     56
NOTES TO THE FINANCIAL STATEMENTS
ON DECEMBER 31, 2010 AND 2009
(Amounts in thousands of Brazilian reais)


experienced on November 10, 2009. Light Energia appealed the notice on May 9, 2010 to request the
fines were reduced. The Bureau of Generation Service Inspection (SFG) upheld the decision
challenged, and the case is pending a decision by the executive board of ANEEL. A provision was set
up in the amount of the fine imposed.

a.4) Notice of Infringement ANEEL No. 061/2010-SFE – This notice was issued on May 19, 2010, and
a fine was imposed in the amount of R$5,049 on account of alleged nonconformities determined in
economic, financial and accounting audits performed by ANEEL in May 2009. Subsidiary Light SESA
filed an appeal against the notice on June 3, 2010, seeking cancellation of all fines imposed or,
alternatively, that they were reduced. The Bureau of Generation Service Inspection (SFG) upheld the
decision challenged, and the case is pending a decision by the executive board of ANEEL. A provision
was set up in the amount of the fine imposed.

a.5) Notice of Infringement ANEEL No. 082/2010-SFE – This notice was issued on June 18, 2010, and
a fine was imposed in the amount of R$16,052 on account that subsidiary Light SESA allegedly failed
to comply with continuity metrics DEC and FEC for 65 groups during 2009. The incident occurred on
November 10, 2009 (the Furnas Blackout) was taken into consideration for computation of the relevant
metrics. The Company filed an appeal on July 8, 2010, and moved for a mitigation so that the shortage
experienced on November 10, 2009 is not considered for the purpose of computing the DEC and FEC
metrics. Currently this appeal is pending review by ANEEL. A provision in the amount of R$4,110
was set up based on the opinion of the Company's legal counsels, which opinion also indicates that
ANEEL is likely to reduce the amount of the fine imposed based on the subsidiary's allegations that the
Furnas' transmission line downtime should be disregarded in the computation of continuity metrics on
account of their nature as force majeure/act of God events and thus capable of defeating the liability of
Light SESA in the incident.


21. POST-EMPLOYMENT BENEFITS

Light Group’s companies sponsor Fundação de Seguridade Social – BRASLIGHT, a nonprofit closed
pension entity, whose purpose is to provide retirement benefits to the Company’s employees and
pension benefits to their dependents.

BRASLIGHT was incorporated in April 1974 and has four plans - A, B, C and D – established in
1975, 1984, 1998 and 2010, respectively, with about 96% of the active participants of plans A and B.

Current plans in effect include defined-benefit- (Plans A and B), mixed-benefit- (Plan C), and defined-
contribution plans (Plan D).

a) Below is a summary of the Company's liabilities involving pension plan benefits as stated on its
balance sheet:
                                                           12/31/2010                              12/31/2009
                                             Current       Non Current    Total      Current       Non Current   Total

        Contractual debt with pension fund        95,048      920,630    1,015,678        95,044      861,386    956,430
        Other                                        507            -          507             -            -          -
        Total                                     95,555      920,630    1,016,185        95,044      861,386    956,430



On October 2rd, 2001 the Bureau of Supplementary Pension Plans approved an agreement for the
purpose of balancing accounting deficits and refinancing of repayable reserves, which began to be paid

                                                                                                                           57
NOTES TO THE FINANCIAL STATEMENTS
ON DECEMBER 31, 2010 AND 2009
(Amounts in thousands of Brazilian reais)


out in 300 monthly as of July 2001. As of December 31, 2010 there were 186 monthly installments
remaining, in a total contract outstanding amount of R$1,015,678.

Until May 2009 the installments were escalated against the variation of the IGP-DI (with one month in
arrears) and actuarial interest at the rate of 6% p.a.. Beginning in June 2009, IPCA replaced IGP-DI as
the applicable escalation index (with one month in arrears).

The agreement is adjusted yearly against the deficit (surplus) reported by Braslight, and as a result the
amounts of outstanding installments may increase or decrease accordingly. This adjustment is
recognized wholly as financial income in the sponsors' income for the year.

The statement below summarizes the changes in agreement liabilities in years 2010 and 2009:

                                                       Total
                                                    Consolidated      Current        Non-current
       Contractual liabilities on 01/01/2009             1,032,161         87,744          944,417
         Amortization in the period                        (93,928)       (93,928)             -
         Restatements in the period                         18,197         64,345          (46,148)
         Transfer to current                                   -           36,883          (36,883)
       Contractual liabilities on 12/31/2009              956,430          95,044          861,386
         Amortization in the period                       (93,251)        (93,251)             -
         Restatements in the period                       152,499          54,243           98,256
         Transfer to current                                  -            39,012          (39,012)
       Contractual liabilities on 12/31/2010             1,015,678         95,048          920,630




                                                                                                      58
NOTES TO THE FINANCIAL STATEMENTS
ON DECEMBER 31, 2010 AND 2009
(Amounts in thousands of Brazilian reais)




b) Plan description

Plan A/B - Benefits in these plans are 'defined benefits' and correspond to the difference between
application of certain percentage, between 80% and 100%, of the average of the last 12 and the last 36
salaries, escalated as of the date the benefit began to be paid out, and the amount of the benefit paid by
the INSS, whichever is the highest.

Plan C - During the capitalization phase, elective benefits are 'defined-contribution' benefits not linked
to INSS benefits, and contingent benefits (i.e. sickness allowance, permanent disability pension,
pensions payable upon death of active, disabled, or sick participants), as well as continued income,
once granted, are 'defined' benefits. The assets of the two portions are determined in shares.

For a participant migrating from Plan A/B to Plan C, a settled lifetime income benefit was granted,
revertible into a pension benefit, proportionate to the amount of contributions made to Braslight at
migration time, as of the participant's latest enrollment in the Fundação, which is deferred until the
participant has satisfied a number of qualification requirements. This portion is called the Plan C
Settled Defined Benefit Subplan.

Plan D - This plan was approved by the Ministry of Social Security's National Bureau of
Supplementary Pension (PREVIC/MPS) on March 22rd, 2010, with the first contribution made in April
2010. In this plan, benefits are 'defined contribution' benefits before and after the relevant grant.

The statement below summarizes the amounts determined in an actuarial report as recognized in the
balance sheet:
                                                                                                                    Consolidated
                                                                                                     12/31/2010      12/31/2009      1/1/2009
 Reconciliation of the recognized values in the balance sheet
  Fair value of the plan assets                                                                        1,120,960        1,105,523     1,013,384
  Present value of the actuarial obligation with cover                                                (2,123,507)      (2,055,223)   (1,785,142)
  Net assets (unsecured liabilities)                                                                  (1,002,547)        (949,701)     (771,758)
 Net liabilities, CVM nº 600/2009                                                                     (1,002,547)        (949,701)     (771,758)
  Balance of the adjusted and recorded contract, in accordance with the Interest Rate Equalization    (1,015,678)        (956,430)   (1,032,161)




The statement below summarizes the changes in plan fair value over the relevant periods:

                                                                                                                    12/31/2010              12/31/2009
             Reconciliation of fair value of assets
              Fair value of assets at the beginning of the year                                                        1,105,523                   1,013,384
                Expected returns for the year                                                                            114,886                     121,732
                Actuarial gains/(losses) in the plan assets                                                               11,169                      55,974
                Sponsor's contributions                                                                                   94,601                      95,300
                Participants' contributions                                                                                   50                          69
                Benefits paid by the plan/company                                                                       (205,269)                   (180,937)
              Fair value of assets at the end of the year                                                              1,120,960                   1,105,523


The statement below summarizes changes in defined-benefit liabilities over the periods reported:



                                                                                                                                                                59
NOTES TO THE FINANCIAL STATEMENTS
ON DECEMBER 31, 2010 AND 2009
(Amounts in thousands of Brazilian reais)


                                                                                          12/31/2010             12/31/2009
             Reconciliation of the value of actuarial liabilities
              Fair value of liabilities at the beginning of the year                        (2,055,223)            (1,785,142)
                Gross cost of current service                                                   (1,592)                (1,565)
                Interest on actuarial obligations                                             (212,216)              (210,679)
                Transfers of participants' contributions in the year                               (50)                   (69)
                Actuarial gains/(losses)                                                       (59,695)              (238,705)
                Benefits paid in the year                                                      205,269                180,937
              Fair value of liabilities at the end of the year                              (2,123,507)            (2,055,223)


Amounts recognized in the statement of income are summarized below:

             Amounts recognized in the income statement                                      2010                  2009
               Cost of current service                                                          1,592                  1,565
               Cost of interest                                                               212,216                210,679
               Expected return on investments                                                (114,886)              (121,732)
             Estimated expected cost                                                           98,922                 90,512


The effective return on plan assets amounted R$114,394 in 2010 (R$141,846 as of December 31,
2009).

Actuarial considerations:

                                                                                     2010                 2009
Nominal interest rate (discount) at present value of the actuarial liabilities           10.66%            10.77%
Expected rate of return on nominal plan assets                                           10.96%            10.77%
Annual inflation rate                                                                     4.40%             4.50%
Salary growth rate                                                                        6.49%             6.59%
Adjustment index of continued benefits                                                    4.40%             4.50%
Capacity factor                                                                          98.00%            98.00%
Revolving rate                                                                      Based on age      Based on age
General mortality table                                                             AT - 83 (1)       AT - 83 (1)
Disability (plans A/B)                                                           LIGHT - Strong    LIGHT - Strong
Disability table (plan C settled)                                                LIGHT - Strong    LIGHT - Strong
Mortality table of disabled people                                                     IAPB-57           IAPB-57
Active participants                                                                       3,454             3,638
Retiree and pensioner participants                                                        5,679             5,727

(1)
      Table without aggravation




                                                                                                                                 60
NOTES TO THE FINANCIAL STATEMENTS
ON DECEMBER 31, 2010 AND 2009
(Amounts in thousands of Brazilian reais)




22. OTHER DEBTS
                                                                               Parent Company                         Consolidated
                                                                  12/31/2010     12/31/2009 01/01/2009   12/31/2010   12/31/2009     01/01/2009
CURRENT
Advances from clients                                                   -              -           -          3,491         8,691           -
 Compensation for use of water resources                                -              -           -          4,000         4,293         3,274
 Energy Research Company – EPE                                          -              -           -            503         1,038         7,404
 National Scientific and Technological Development Fund – FNDCT         -              -           -          1,007         2,173        14,808
 Energy Efficiency Program – PEE                                        -              -           -         48,925        76,012        77,936
 Research and Development Program – P&D                                 -              -           -         37,445        49,090        47,031
 Ex-isolated charges                                                    -              -           -         10,966           -             -
 Public lighting fee                                                    -              -           -         69,243        51,402        40,917
 Provision for voluntary resignation                                    -              -           -         23,113           -             -
 Other debits - reimbusements to consumers                              -              -           -            -          11,622        46,893
 Other                                                                1,981          1,524       1,286       37,625        31,707        66,735
Total                                                                 1,981          1,524       1,286      236,318       236,028       304,998

NONCURRENT
 Provision for success fees                                                                                  14,306        13,275        13,136
 Reserve for reversal                                                   -             -           -          69,933        69,933        69,933
 Use of Public Asset - UBP (a)                                          -             -           -         128,746       115,651       117,583
 Other                                                                  -             -           -          13,670         9,836        12,682
Total                                                                   -             -           -         226,655       208,695       213,334



a) In accordance with Concession Agreement No. 12/2001 dated March 15th, 2001, which governs the
   development of the hydroelectric potential of the Paraíba do Sul river in the municipalities of
   Itaocara and Aperibé, subsidiary Itaocara Energia Ltda. shall pay to the União, by way of a fee
   owing to use of a public asset, as of the start-up date (scheduled for 2013) and until the concession
   expires or while the hydroelectric potential is being exploited, monthly installments equal to 1/12
   (one twelfth) of the proposed annual payment of R$2,017, duly escalated against the variation of
   the IGP-M, or any other index as shall replace the former. The contra-entry to liability escalation is
   being recognized as an intangible asset during the construction phase, without any impact on the
   income. Following start-up, the escalation will be recognized directly in the income for the year
   (see note 13).

b) Contingent fees

     The Company set up a provision in the amount of R$14,306 to cover contingent fee liabilities
     arising from disputes wherein the likeliness of loss is deemed remote.


23. RELATED-PARTY TRANSACTIONS

Light S.A. belongs to the Controlling Group Companhia Energética de Minas Gerais – CEMIG, Luce
Empreendimentos e Participações S.A. and Rio Minas Energia Participações S.A (RME) – company
controlled by Redentor Energia.

Interest in operating subsidiaries is outlined in the Note 1.

Below, a summary of related-party transactions occurred in the years ended 2010 and 2009:




                                                                                                                                                  61
NOTES TO THE FINANCIAL STATEMENTS
ON DECEMBER 31, 2010 AND 2009
(Amounts in thousands of Brazilian reais)


                       Contra c ts with the s a me group                                                                                                                              C o ns o lida te d
                                                                                      Re la tions hip with Light
                                                                                                                               As s e ts                            Lia b ilitie s                           Re ve n u e                           Exp e n s e s
                                                                                                 S .A.
Ite m         (Agre e me nt obje c tive s a nd c ha ra c te ris tic s )                                            12 / 3 1/ 2 0 10   12 / 3 1/ 2 0 0 9   12 / 3 1/ 2 0 10   12 / 3 1/ 2 0 0 9    12 / 3 1/ 2 0 10   12 / 3 1/ 2 0 0 9   12 / 3 1/ 2 0 10   12 / 3 1/ 2 0 0 9
        S tra te gic a gre e m e nt
                                                                                       CEMIG (pa rty of the
        P urc ha s e a gre e m e nt o f e le c tric po we r be twe e n Light
  1                                                                                     c ontrolling group)                    -                  -               8,653              8,503                    -                  -             67,473           100,237
        S ES A a nd C EM IG
        S tra te gic a gre e m e nt
                                                                                       CEMIG (pa rty of the
        P urc ha s e a gre e m e nt o f e le c tric po we r be twe e n Light
 2                                                                                      c ontrolling group)                    -                  -                  166                 -                    -                  -               1,263                  -
        S ES A a nd C EM IG
        S tra te gic a gre e m e nt
                                                                                       CEMIG (pa rty of the
        S a le a gre e m e nt o f e le c tric po we r be twe e n Light Ene rgia
 3                                                                                      c ontrolling group)                2,561              2,528                   -                  -                 21,769          22,553                   -                   -
        a nd C EM IG
        S tra te gic a gre e m e nt
                                                                                       CEMIG (pa rty of the
        C o lle c tio n o f dis tributio n s ys te m us a ge c ha rge s be twe e n
 4                                                                                      c ontrolling group)                   381                180                  -                  -                  2,291            2,059                  -                   -
        Light S ES A a nd C EM IG
        S tra te gic a gre e m e nt
                                                                                       CEMIG (pa rty of the
        C o m m itm e nt to the ba s ic e le c tric ne two rk us a ge c ha rge s
 5                                                                                      c ontrolling group)                    -                  -               1,634              2,248                    -                  -             17,264              16,977
        be twe e n Light S ES A a nd C EM IG
        S tra te gic a gre e m e nt
                                                                                       CEMIG (pa rty of the
        C o m m itm e nt to the ba s ic e le c tric ne two rk us a ge c ha rge s
 6                                                                                      c ontrolling group)                     10                 10                 -                  -                   120                115                 -                   -
        be twe e n Light Ene rgia a nd C EM IG

        Lo a ns
         Lo a n with Light S .A., whic h ho lds 50.9% Lightge r, in o rde r
        to ho no r fina nc ia l c o m m itm e nts re la te d to the                           Light S .A
        im pla nta tio n o f the P a ra c a m bi s m a ll hydro e le c tric pla nt
 7      (P HC ).                                                                                                               -                  -             11,156                   -                    -                  -                  115                 -
        P la no P re vide nc iá rio
                                                                                     BRAS LIGHT (pa rty of the
 8                                                                                     c ontrolling group)                     -                  -        1,016,185             956,430                      -                  -           152,499               18,197
        F unda ç ã o de S e gurida de S o c ia l - B R AS LIGHT




                                                                                                                                                                                                                                                                                62
NOTES TO THE FINANCIAL STATEMENTS
ON DECEMBER 31, 2010 AND 2009
(Amounts in thousands of Brazilian reais)



 Below, a summary of agreements executed with related parties:


                                                                                                                                                                           C o nditio ns fo r
                                                                                         Re la tions hip with Light                                     M a turity da te   te rm ina tio n o r   R e m a ining
  Ite m                      C o ntra c ts with the s a m e gro up                                                      Origina l Va lue     Da te
                                                                                                    S .A.                                                  o r te rm              e nd            ba la nc e       Agre e m e nt C o nditio ns
                     (Agre e m e nt o bje c tive s a nd c ha ra c te ris tic s )                                                                                                                 12/31/2010

            S tra te gic a gre e m e nt                                                                                                                                         30% o f
                                                                                            C EM IG (pa rty o f the                                                                                                P ric e e s ta blis he d in the
            P urc ha s e a gre e m e nt o f e le c tric po we r be twe e n Light                                                           J a n/2006     De c /2038          re m a ining
                                                                                             c o ntro lling gro up)                                                                                                    re gula te d m a rke t
    1       S ES A a nd C EM IG                                                                                              614,049                                           ba la nc e            450,358
            S tra te gic a gre e m e nt                                                                                                                                         30% o f
                                                                                            C EM IG (pa rty o f the                                                                                                P ric e e s ta blis he d in the
            P urc ha s e a gre e m e nt o f e le c tric po we r be twe e n Light                                                           J a n/2010     De c /2039          re m a ining
                                                                                             c o ntro lling gro up)                                                                                                    re gula te d m a rke t
    2       S ES A a nd C EM IG                                                                                                37,600                                          ba la nc e              36,348
            S tra te gic a gre e m e nt
                                                                                            C EM IG (pa rty o f the                                                                                                P ric e e s ta blis he d in the
            P urc ha s e a gre e m e nt o f e le c tric po we r be twe e n Light                                                           J a n/2005     De z/2013              N/A
    3       S ES A a nd C EM IG
                                                                                             c o ntro lling gro up)          156,239                                                                   54,066          re gula te d m a rke t

            S tra te gic a gre e m e nt
                                                                                            C EM IG (pa rty o f the                                                                                                P ric e e s ta blis he d in the
            C o lle c tio n o f dis tributio n s ys te m us a ge c ha rge s be twe e n                                                     No v/2003    Unde te rm ine d         N/A
    4       Light S ES A a nd C EM IG
                                                                                             c o ntro lling gro up)                  -                                                                     381         re gula te d m a rke t

            S tra te gic a gre e m e nt
                                                                                            C EM IG (pa rty o f the                                                                                                P ric e e s ta blis he d in the
            C o m m itm e nt to the ba s ic e le c tric ne two rk us a ge c ha rge s                                                       De c /2002   Unde te rm ine d         N/A
    5       be twe e n Light Ene rgia a nd C EM IG
                                                                                             c o ntro lling gro up)                  -                                                                   1,634         re gula te d m a rke t

            S tra te gic a gre e m e nt
                                                                                            C EM IG (pa rty o f the                                                                                                P ric e e s ta blis he d in the
            C o m m itm e nt to the ba s ic e le c tric ne two rk us a ge c ha rge s                                                       De c /2002   Unde te rm ine d         N/A
                                                                                             c o ntro lling gro up)                                                                                                    re gula te d m a rke t
    6       be twe e n Light Ene rgia a nd C EM IG                                                                                   -                                                                        10
            Lo a ns
             Lo a n with Light S .A., whic h ho lds 50.9% Lightge r, in o rde r
            to ho no r fina nc ia l c o m m itm e nts re la te d to the                           Light S .A                               Oc t/2010       Oc t/2011             N/A                                    C DI + 0,9% p.a .
            im pla nta tio n o f the P a ra c a m bi s m a ll hydro e le c tric pla nt
    7       (P HC ).                                                                                                           11,042                                                                  11,156
            P e ns io n P la n
                                                                                         B R AS LIGHT (pa rty o f the
                                                                                                                                           J un/2001      J un/2026              N/A                                     IP C A+ 6% p.a .
            F unda ç ã o de S e gurida de S o c ia l (S o c ia l S e c urity                 c o ntro lling gro up)
    8       F o unda tio n) - B R AS LIGHT                                                                                   535,052                                                              1,016,185



Related-party transactions have been executed under usual market conditions.

MANAGEMENT REMUNERATION

The shareholders convened at annual general meeting on March 22, 2010, approved the global
remuneration payable to the members of the Company's Board of Directors and Executive Board, in
the amounts of R$14,506, R$2,060, and R$97, for Light Energia, Light S.A. and Light Energia,
respectively.

Policy regarding remuneration of the Board of Directors, Executive Board, Supervisory Board and
board committees.

(i) Pro-rata share of each component to the aggregate remuneration for 2010.

          Board of Directors
            Fixed Remuneration:                                                                                                                                                                                  100%
            Variable Remuneration:                                                                                                                                                                                -
          Board of Executive Officers
            Fixed Remuneration:                                                                                                                                                                                    41%
            Variable Remuneration:                                                                                                                                                                                 43%
            Outros                                                                                                                                                                                                 16%
          Fiscal Council
            Fixed Remuneration:                                                                                                                                                                                  100%
            Variable Remuneration:                                                                                                                                                                                -




                                                                                                                                                                                                                                                     63
NOTES TO THE FINANCIAL STATEMENTS
ON DECEMBER 31, 2010 AND 2009
(Amounts in thousands of Brazilian reais)


Remuneration paid by the Company to the Board of Directors, Executive Board, and Fiscal council in
2010:

                                                                                                                                       Consolidated
                                                                                                                                                        Board of
                                                                                               Board of                       Fiscal                    Executive
                                           2010                                                Directors                     Council                     Offcers                   Total
        Number of members                                                                           22                           5                            7                     34
        Annual fixed remenution                                                                          1,090                          369                    5,747                 7,206
         Salary or pro-labore                                                                            1,090                          369                    4,219                 5,677
         Direct and indirect benefits                                                                      -                            -                      1,529                 1,529
        Variable remunution                                                                                -                            -                      6,074                 6,074
         Bonus                                                                                             -                            -                      5,884                 5,884
         Other (LTIP)                                                                                      -                            -                        190                   190
        Benefits from the assiognment of office                                                            -                            -                      2,183                 2,183
        Total remuneration per body                                                                      1,090                          369                   14,004                15,463




Average annual compensation due to the Board of Directors, Executive Board, and Fiscal council in
2010:

                                                                                                                             Parent company
                                                                                                                                          Board of
                                                                                         Board of                        Fiscal           Executive
                                        2010                                             Directors                      Council            Offcers                               Total

        Number of members                                                                      22                            5                            7                        34
        Highest individual remuneration                                                                  95                            74                     1,102                  1,270
        Lowest individual remuneration                                                                   47                            74                       455                    576
        Average individual remuneration                                                                  71                            74                       625                    769




24. SHAREHOLDERS’ EQUITY

a) Capital Stock

There are 203,934,060 non-par and book-entry common shares of Light S.A. (203,934,060 on
December 31st, 2009) as of December 31 st, 2010 recorded as Capital Stock in the total amount of
R$2,225,822 (R$2,225,822 on December 31 st, 2009), as follows:
                                                               12/31/2010                                        12/31/2009                                           01/01/2009
                SHAREHOLDERS                      Number of Shares          % Interest              Number of Shares                 % Interest          Number of Shares           % Interest
Controlling Group                                        106,304,597                52.12                     106,304,597                    52.12                106,304,597                52.12
   RME Rio Minas Energia Participações S.A.               26,576,150                 13.03                     26,576,150                    13.03                100,719,912                49.39
   Lidil Comercial Ltda                                          -                    -                               -                        -                    5,584,685                 2.73
   Andrade Gutierrez Concessões S.A.                             -                    -                        26,576,149                    13.03                        -                    -
   Companhia Energética de Minas Gerais S.A.              53,152,298                 26.06                     26,576,149                    13.03                        -                    -
   Luce Empreendimentos and Participações S.A.            26,576,149                 13.03                     26,576,149                    13.03                        -                    -

Other                                                     97,629,463                47.88                      97,629,463                    47.88                 97,629,181                47.88
   BNDES Participações S.A. - BNDESPAR                    30,631,782                 15.03                     49,776,782                     24.41                68,555,918                33.62
   EDF International S.A                                         -                    -                               -                        -                   13,391,345                 6.57
   Public                                                  66,997,681                32.85                      47,593,781                    23.34                 15,681,918                7.69
   Treasury Shares                                               -                    -                            258,900                     0.13                       -                   -
Overall Total                                            203,934,060                     100                  203,934,060                         100             203,933,778                    100




Light S.A. is authorized to increase its capital up to the limit of R$203,965,072 through resolution of
the Board of Directors, regardless of amendments to the bylaws. However, this increase is to occur

                                                                                                                                                                                                       64
NOTES TO THE FINANCIAL STATEMENTS
ON DECEMBER 31, 2010 AND 2009
(Amounts in thousands of Brazilian reais)


exclusively upon the exercise of the warrants issued, strictly pursuant to the conditions of the warrants
(Bylaws, Article 5, paragraph 2).
On March 25th, 2010, the Company released a relevant fact concerning a payment in connection with
the acquisition, by CEMIG, of 25,494,500 (twenty-five million, four hundred ninety-four and five
hundred) common shares of the Company, held by AGC, which shares represented 12.50% of the total
voting stock of the Company.On November 18, 2010, the Company made an announcement to the
market in connection with a payment made in connection with the acquisition, by CEMIG, of
1,081,649 (one million, eighty-one thousand six hundred forty-nine) common shares of the Company,
held by AGC, which represented 0.53% of the total voting stock of the Company. Said transactions
were anticipated in the Share Purchase and Sale Agreement entered into December 30th, 2009,
between CEMIG and AGC, as per the material facts released by Light, CEMIG and AGC on that same
date.
b) Capital reserves

Consistent with CVM Resolution No. 562 issued December 17 th, 2008, Light S.A. had recorded the
amount of R$34,406 as capital reserves under its shareholders' equity (R$22,459 as of January 1st,
2009). This amount related to stock options granted to certain officers of the company corresponding
to the vesting period completed until then. These options were fully exercised over the first quarter of
2010.

c) Profit reserve

Light S.A. has two profit reserves, as follows:

- A Statutory Reserve set at the rate of 5% of the net income for the year, pursuant to the applicable
laws.

- A Retained Earnings reserve, which is set against the net income for the year that remains after the
appropriations in a capital budget have been made, as approved by the Company's Board of Directors
subject to shareholder approval at general meeting.

d) Treasury Shares

As per the material fact released November 6th, 2009, the Company approved a plan to repurchase its
own shares as part of the Company's Long-Term Incentive Plan, comprising a Stock Option Plan, in
such way that there will be no further need to issue new shares and consequently dilute shareholder
interests. As of December 31, 2009, the amount of treasury shares was 258,900, or R$6,361. In
January 2010 all treasury shares were delivered to executives entitled to stock options (as mentioned in
note 40), and therefore there is no remaining balance as of December 31, 2010.




                                                                                                      65
NOTES TO THE FINANCIAL STATEMENTS
ON DECEMBER 31, 2010 AND 2009
(Amounts in thousands of Brazilian reais)



25. DIVIDENDS

The Company's by-laws provides for distribution of a mandatory dividend at the rate of 25% of the net
income for the year, adjusted pursuant to article 202 of Law No. 6,404 dated December 15, 1976. The
dividends proposed at year end were determined as follows:

                                                         12/31/2010
Calculation of minimum mandatory dividends
 Net income for the year                                      575,150
 Legal reserve                                                (28,757)
Calculation base for minimum mandaory dividends               546,393


Proposed dividends
Minimum mandaory dividends (25%)                              136,598
  Additional dividends                                        214,381
TOTAL DIVIDENDS                                               350,979

 (1) Proposed additional dividends were recorded under a specific item of the shareholders' equity,
pursuant to the standards set forth in the CPC 08.

26. PROFIT SHARING

The Company's Profit Sharing Plan implemented in 1997 spans the whole corporation and is
essentially contingent upon consolidated net income and EBITDA results of the Company. Payment of
the profit-sharing amount comprises two portions, a fixed and a variable one. The Program has evolved
over the years in order to elicit increased employee commitment to improving the Company's and its
subsidiaries' bottom-lines.

As of December 31st, 2010 the balance of the provision for profit sharing was R$15,308, with payment
expected to take place in April 2011.

27. EARNINGS PER SHARE

Pursuant to the requirements of CPC 41 and the IAS 33 (Earnings per Share), the statement below
reconciles the year's earnings per share with the amounts used to determine the basic and diluted
earnings per share.

                                                                  Consolidated
                                                         12/31/2010          12/31/2009
NUMERATOR
 Net income for the year (R$)                                  575,150             588,804
DENOMINATOR
 Weighted average number of common shares                  203,934,060         203,933,966
DILUTED EARNINGS PER COMMON SHARE                                2.820               2.887


There were no significant differences between the basic and diluted earnings per share as of December
                                                                                                  66
NOTES TO THE FINANCIAL STATEMENTS
ON DECEMBER 31, 2010 AND 2009
(Amounts in thousands of Brazilian reais)


31 st, 2009 and 2010.


28. NET OPERATING REVENUE BREAKDOWN

                                                           Consolidated
                                                    2010                  2009
  Supply to consumers/distributors (note 29)        8,432,859             8,043,088
  Leases, rentals and other                            36,606                48,451
  Revenue from network usage                          705,309               515,713
  Revenue from consrtruction                          552,831               526,986
  Revenue from services rendered                       71,055                31,118
  Taxed servicefee                                      2,186                 2,675
  Other revenue                                        36,145                86,599
 GROSS REVENUE                                      9,836,991             9,254,630

 Billed supply -ICMS                                (2,219,444)       (2,080,591)
   PIS / COFINS                                       (535,303)         (449,125)
 Other                                                  (3,685)           (2,553)
 REVENUE TAXES                                      (2,758,432)       (2,532,269)


  Fuel Consumption Account - CCC                     (220,500)            (177,422)
  Energy Development Account - CDE                   (206,184)            (206,076)
  Global Reveral Reserve - RGR                        (57,654)             (77,720)
  Energy Research Company - EPE                        (6,146)              (5,685)
  National Technological Development Fund - FNDCT     (12,295)             (11,363)
  Energy Efficiency Program - PEE                     (27,545)             (25,835)
  Research and Development -R&D                       (14,481)             (11,363)
  Other charges                                       (25,170)                 -
 CONSUMER CHARGES                                    (569,975)            (515,464)

 TOTAL DEDUCTIONS                                   (3,328,407)       (3,047,733)

 NET REVENUE                                        6,508,584             6,206,897




                                                                                      67
NOTES TO THE FINANCIAL STATEMENTS
ON DECEMBER 31, 2010 AND 2009
(Amounts in thousands of Brazilian reais)


29. ELECTRIC POWER SUPPLY
                                                                                                             Consolidated
                                                         Number of billed sales (1) (2)                        GWh (1)                                        R$
                                                          2010                 2009                   2010                    2009              2010                 2009

  Residential                                                 3,759,911           3,688,998               8,243                    7,880        2,746,002            2,569,692
  Industrial                                                     11,403              11,749               1,717                    1,857          335,307              405,557
  Commerce, services and other                                  275,268             271,768               6,157                    6,074        1,866,809            1,852,986
  Rural                                                          11,185              11,072                   51                       50           9,500                9,357
  Public sector                                                  10,451              10,177               1,441                    1,410          449,051              434,749
  Public lighting                                                   726                 525                 677                      675          103,316              100,652
  Public utility                                                  1,319               1,300               1,095                    1,071          223,958              213,616
  Own consumption                                                   328                 327                   78                       67             -                    -
Billed sales                                                  4,070,591           3,995,916              19,459                   19,084        5,733,943            5,586,609
  ICMS (State VAT)                                                  -                   -                   -                        -          2,194,042            2,069,067
  Unbilled sales                                                    -                   -                   -                        -             (8,830)              25,810
TOTAL SUPPLY (3)                                              4,070,591           3,995,916              19,459                   19,084        7,919,155            7,681,486

 Electric power auction                                            -                     -                 4,719                   4,676         429,371               332,516
 Short-term energy                                                 -                     -                 1,565                     853          84,333                29,086
TOTAL SUPPLY                                                       -                     -                 6,284                   5,529         513,704               361,602

OVERALL TOTAL                                                 4,070,591           3,995,916              25,743                   24,613        8,432,859            8,043,088

(1) Not audited by the independent auditors
(2) Number of billed sales in December 2010, with and without consumption
(3) Light SESA




30. OPERATING COSTS AND EXPENSES
                                                                                                       Consolidated
                                                      Cost of Service                               Operating Expenses
                                                                                                                           Other Operating       2010              2009
                                             Electric Power        Operation         Selling      General and Adm        Revenues (Expenses)
Nature of the expense
Personnel and management                               -              (168,302)        (17,646)          (79,806)                         -       (265,754)          (271,863)
Material                                               -               (27,452)         (2,187)           (3,851)                         -        (33,490)           (25,911)
Outsourced services                                    -              (156,965)        (80,267)         (123,194)                         -       (360,426)          (274,105)
Electricity purchased for resale (Note 31)      (3,392,464)                -               -                 -                            -     (3,392,464)        (3,322,637)
Depreciation and amortization                          -              (311,224)         (1,163)          (40,075)                         -       (352,462)          (343,557)
Allowance for doubtful accounts                        -                   -          (254,785)              -                            -       (254,785)          (246,076)
Provision for contingencies                            -                   -               -              37,100                          -         37,100            (59,969)
Cost of Construction                                   -              (552,831)            -                 -                            -       (552,831)          (526,986)
Other                                                  -               (24,603)         (1,444)          (75,240)                       9,828      (91,459)           (89,952)
                                                (3,392,464)         (1,241,377)       (357,492)         (285,066)                       9,828   (5,266,571)        (5,161,056)




                                                                                                                                                                                 68
NOTES TO THE FINANCIAL STATEMENTS
ON DECEMBER 31, 2010 AND 2009
(Amounts in thousands of Brazilian reais)


31. ENERGY PURCHASED FOR RESALE

                                                                                                             Consolidated
                                                                                              GWh                                       R$
                                                                                  2010                2009                  2010                  2009
  Connection charges                                                                        -               -              (19,968)              (19,044)
  Spot market energy                                                                      1,068           1,327            (25,234)              (65,877)
  Network usage charges                                                                     -               -             (419,401)             (408,011)
  UTE Norte Fluminense                                                                    6,351           6,351           (806,846)             (935,536)
  Itaipu                                                                                  5,420           5,649           (548,741)             (630,975)
  National Electric System Operator (O.N.S.)                                                -               -              (17,752)              (15,913)
  PROINFA                                                                                   532             480            (83,501)                  -
  ESS                                                                                       -               -             (128,976)                  -
  Other contracts and electric power auctions                                            14,683          13,627         (1,342,045)           (1,247,281)
                                                                                         28,054          27,434         (3,392,464)           (3,322,637)




32. FINANCIAL INCOME

                                                                                            Parent Company                         Consolidated
                                                                                         2010            2009               2010                  2009
REVENUES
 Interest and variation on debts paid by installments                                         -                -               75,546               75,944
 Restatement of tax credits                                                                     66             -               21,449               33,007
 Income from temporary cash investments                                                     2,003            1,571             59,977               61,197
 Swap operations                                                                              -                -                  298              (10,308)
 Other                                                                                        522                27            15,953               26,905
                                                                                            2,591            1,598            173,223              186,745
EXPENSES
 Adjustment at present value of receivables                                                   -                  -                (13)              19,072
 Surplus (deficit) adjustment - Braslight                                                     -                  -            (49,263)              48,616
 Restatement of tax liabilities                                                               -                  -                (34)             (23,392)
 Restatement of provision for contingencies                                                   -                  -            (44,498)             (45,036)
 Banking expenses                                                                             (15)              (286)         (16,782)              (6,409)
 Charges and monetary variations with BNDES financing                                         -                  -            (53,953)                 -
 Charges and monetary variations on actuarial liability of Brasilight                         -                  -           (109,625)             (66,813)
 Interest and charges on loans and financing – foreign currency                               -                  -             (7,184)             (10,726)
 Interest and charges on loans and financing – domestic currency                              -                  -           (184,108)            (184,560)
 Charges on free energy transactions                                                          -                  -                -                (47,575)
 Credit reversal of IR Debenture 4th Issue                                                    -                  -            (11,523)                 -
 Interest and fines on taxes                                                                  -                  -             10,885               (4,577)
 Regulatory fines                                                                             -                  -            (10,805)                 -
 Installment payment - Reduction in fines and interest rates - Law 11,941 / 09 (REFIS)        -                  -                -                128,921

  Installment payment - other fines and
  interest rates Law 11,941/09 - REFIS                                                        -                  -              3,284             (101,199)
  Monetary variation – local currency                                                         -                  -                  1                  (22)
  Exchange variation – foreign currency                                                       -                  -             12,859               44,698
  Itaipu exchange variation                                                                   -                  -             (4,612)              (7,554)
  Swap operations                                                                             (50)               (30)         (27,246)             (15,118)
  Other                                                                                       (65)              (316)        (492,617)            (271,674)

TOTAL                                                                                       2,526            1,282           (319,394)             (84,929)




                                                                                                                                                              69
NOTES TO THE FINANCIAL STATEMENTS
ON DECEMBER 31, 2010 AND 2009
(Amounts in thousands of Brazilian reais)



33. FINANCIAL INSTRUMENTS

The statement below reconciles the carrying and market values of assets and liabilities related to our
financial instruments:

                                                                         Parent Company
                                                          12/31/2010                         12/31/2009
                                                 Book value       Market Value      Book value       Market Value
ASSETS
 Cash and cash equivalents (note 6 )                    38,295            38,295            14,584            14,584
 Other credits (note 12)                                23,860            23,860            20,212            20,212
                                                        62,155            62,155            34,796            34,796

LIABILITIES
  Suppliers (Note 16)                                     280                280             6,348             6,348
                                                          280                280             6,348             6,348


                                                                         Consolidated
                                                         12/31/2010                          12/31/2009
                                                Book value       Market Value       Book value       Market Value
ASSETS
 Cash and cash equivalents (note 6 )                 514,109          514,109           760,313           760,313
 Marketable securities (note 7)                       11,122           11,122            68,059            68,059
 Concessionaires and permissionaires (note 8)      1,634,965        1,634,965         1,653,652         1,653,652
 Swaps                                                   211              211                 4                 4
 Concession financial assets (note 11)               469,030          469,030           354,784           354,784
 Other credits (note 12)                             152,973          152,973            97,250            97,250
                                                   2,782,410        2,782,410         2,934,062         2,934,062

LIABILITIES
  Suppliers (Note 16)                                658,421          658,421           564,181           564,181
  Loans and financing (Note 17)                    1,335,183        1,342,054         1,183,003         1,195,561
  Debentures (Note 18)                             1,088,402        1,095,106         1,241,675         1,241,675
  Swaps (Note 17)                                      5,295            5,295             5,558             5,558
                                                   3,087,301        3,100,876         2,994,417         3,006,975



In compliance with CVM Statement No. 475/2008 and CVM Resolution No. 604/2009, which revoked
Resolution No. 566/2008, the description of accounting balances and market values of financial
instruments stated in the balance sheet as of December 31, 2010 and 2009 are identified as follows:

 Financial investments
     Financial investments in bank deposit certificates are measures at their acquisition cost duly
     escalated at the balance sheet date, which value is proximate to their market value, as determined
     by the management.

 Marketable securities
     Financial investments in bank deposit certificates are measures at their acquisition cost duly
     escalated at the balance sheet date, which value corresponds to their market value.

 Consumers, concessionaries and permissionaries (clients)
      These are classified as “loans and receivables”, being recorded at their original values and subject
      to a provision for losses and adjustments to their present values, where applicable.

 Financial concession assets
                                                                                                                       70
NOTES TO THE FINANCIAL STATEMENTS
ON DECEMBER 31, 2010 AND 2009
(Amounts in thousands of Brazilian reais)


   These are classified as “loans and receivables”, being recorded at their original values and subject
   to a provision for losses and adjustments to their present values, where applicable.

 Suppliers
   Accounts payable to suppliers of materials and services required in the operations of the Company
   and its subsidiaries, the amounts of which are known or easily determinable, added, where
   applicable, of relevant charges, escalation and/or exchange costs incurred as of the balance sheet
   date.

   These balances are classified as “financial liability not measured at fair value” and were
   recognized at their amortized cost, which is not significantly different from their market value.

 Loans, financing and debentures
   These are measured by the “restated amortized cost method”. Market values were calculated at
   interest rates applicable to instruments with similar nature, maturities and risks, or based on market
   quotations of these securities. The market values for BNDES financing are identical to accounting
   balances, since there are no similar instruments, with comparable maturities and interest rates. In
   case of debentures, book and market values are identical, as there is no liquid trading market for
   these debentures as an accurate benchmark in the market calculation. These financial instruments
   are classified as “financial liabilities not measured at the fair value”.

 Swaps
   These are measured by the “market value”. A the determination of market value used available
   information in the market and usual pricing methodology: the face value (notional) evaluation for
   long position (in U.S. dollars) until maturity date and discounted at present value of clean coupon
   rates, published in bulletins of Securities, Commodities and Futures Exchange – BM&F Bovespa.

   It is worth mentioning that estimated market values of financial assets and liabilities were
   determined by means of information available on the market and appropriate valuation
   methodologies. Nevertheless, meaningful judgment was required when interpreting market data to
   produce the most appropriate market value estimate. As a result, estimates used and presented
   below do not necessarily indicate the amounts that may be realized in current exchange market.




                                                                                                      71
NOTES TO THE FINANCIAL STATEMENTS
ON DECEMBER 31, 2010 AND 2009
(Amounts in thousands of Brazilian reais)



a) Financial Instruments by category:


                                                                            Parent Company                                 Consolidated
                                                                              12/31/2010                                   12/31/2010
                                                                               Fair value                                   Fair value
                                                               Loans         through profit                  Loans        through profit
                                                          and receivables       and loss      Total     and receivables      and loss      Total
ASSETS
 Cash and cash equivalents (note 6 )                                386              37.909    38.295         36.028           478.081       514.109
 Marketable securities (note 7)                                     -                   -         -              -              11.122        11.122
 Concessionaries and permissionaries (Clients) (note 8)             -                   -         -        1.634.965               -       1.634.965
 Swaps                                                              -                   -         -              -                 211           211
 Concession financial assets (note 11)                              -                   -         -          469.030               -         469.030
 Other Credits (note 12)                                         23.860                 -      23.860        152.973               -         152.973
                                                                 24.246              37.909    62.155      2.292.996           489.414     2.782.410

                                                                               Fair value                                   Fair value
                                                            Amortized        through profit               Amortized       through profit
                                                              Cost              and loss      Total         Cost             and loss      Total
LIABILITIES
  Suppliers (Note 16)                                               280                  -        280        658.421                -        658.421
  Loans and financing (Note 17)                                     -                    -        -        1.335.183                -      1.335.183
  Debentures (Note 18)                                              -                    -        -        1.088.402                -      1.088.402
  Swaps (Note 17)                                                   -                    -        -              -                5.295        5.295
                                                                    280                  -        280      3.082.006              5.295    3.087.301




b) Policy concerning derivative instruments

The Company has a policy of using derivative instruments which has been approved by its Board of
Directors. According to this policy, the debt service (principal plus interest and charges) denominated
in foreign currency maturing within 24 months is to be hedged, except no speculative transaction is
allowed, whether using derivatives or any other risky asset.

In line with the policy standards, the Company and its subsidiaries do not have any forward contracts,
options, swaptions, callable swaps, flexible options, derivatives embedded in other products,
derivative-structured transactions and so-called “exotic derivatives”. Furthermore, the statement above
denotes that the Company and its subsidiaries use cashless exchange rate swaps (US$ vs. CDI), of
which the Notional Contract Value is equal to the amount of the debt service denominated in foreign
currency maturing in 24 months.

Additionally, in October 2010 certain swap transactions were performed for interest rates in
connection with the maturity of the CCB Bradesco.

c) Risk management and goals achieved

Management of derivative instruments is achieved through operating strategies with a view to
liquidity, profitability and safety. Our control policy consists of ongoing enforcement of policy
standards concerning the use of derivative instruments, as well as continued monitoring of agreed upon
rates versus market rates.




                                                                                                                                                       72
NOTES TO THE FINANCIAL STATEMENTS
ON DECEMBER 31, 2010 AND 2009
(Amounts in thousands of Brazilian reais)



d) Risk Factors

During the normal course of its businesses, the Company and its subsidiaries are exposed to the market
risks related to currency variations and interest rates, as evidenced in the chart below:

Debt breakdown (excluding financial charges):

                                                                  Consolidated
                                                 12/31/2010                            12/31/2009
                                             R$               %                   R$                %
 USD                                           73,131               3.0             99,721               4.1
 Currency Basket (BNDES)                          -                 -                  444               -
Foreign currency (current and noncurrent)      73,131               3.0            100,165               4.1
 CDI                                        1,618,316              66.8          1,763,892              72.7
 TJLP                                         624,457              25.8            521,542              21.5
 Other                                        107,681               4.4             39,079               1.7
Local currency (current and noncurrent)     2,350,454              97.0          2,324,513              95.9
Overall total (current and noncurrent)      2,423,585             100.0          2,424,678              100




On December 31st, 2010, according to the chart above, the foreign currency-denominated debt is
R$73,131, or 3.01% of total debt.

Financial derivative instruments were contracted for the amount of foreign currency-denominated debt
service to expire within 24 months, in the swap modality, whose notional value on December 31 st,
2010 stood at US$19,191, according to the policy for utilization of derivative instruments approved by
the Board of Directors. Thus, if we deduct this amount from total foreign currency-denominated debt,
the foreign exchange exposure represents 1.72% of total debt.

Below we provide a few considerations and analyses on risk factors impacting on business of Grupo
Light companies:

    Currency risk

Considering that a portion of Light SESA’s loans and financing is denominated in foreign currency,
the company uses derivative financial instruments (swap operations) to hedge service associated with
these debts (principal plus interest and commissions) to expire within 24 months in addition to the
swap of previously mentioned rates. Derivative operations resulted in a R$1,134 loss in the fourth
quarter of 2010 (R$1,671 loss in the fourth quarter of 2009) and a R$4,406 loss in the year (a loss of
R$17,862 in 2009). The net amount of swap operations as of December 31, 2010, considering the fair
amount, is a negative R$5,084 (negative by R$5,554 on December 31, 2009), as shown below:




                                                                                                               73
NOTES TO THE FINANCIAL STATEMENTS
ON DECEMBER 31, 2010 AND 2009
(Amounts in thousands of Brazilian reais)


 Interest Rate Swaps
                                                                               Notional
                                                                                            Fair Value   Fair Value           Fair Value
                    Light's                                                     Value
  Institution                  Light's Payable Starting Date Maturity Date                   Dec/10       Dec/10                Dec/10
                  Receivable                                                 Contracted
                                                                                           (R$) Assets (R$) Liabilities      (R$) Balance
                                                                                (US$
  Banco Itau     US$+2,20%       100% CDI       6/18/2009      3/10/2011     thousand)69            -              (36)               (36)
   Citibank      US$+2,33%       100% CDI       6/18/2009      4/12/2011          5,436             -           (2,846)            (2,846)
  Banco Itau     US$+2,30%       100% CDI       9/10/2009      9/12/2011             66             -              (22)               (22)
  Banco Itau     US$+2,79%       100% CDI       10/9/2009     10/11/2011          5,273             -           (1,155)            (1,155)
   Citibank      US$+3,20%       100% CDI       3/10/2010      3/12/2012             63             -              (14)               (14)
  Banco Itau     US$+2,82%       100% CDI       4/12/2010      4/11/2012          5,010             -           (1,006)            (1,006)
  Bradesco       US$+2,50%       100% CDI       9/10/2010      9/10/2012             63             -                  (7)             (7)
    HSBC         US$+2,20%       100% CDI      10/11/2010      10/9/2012          3,211             -            (209)               (209)


                                                                 Total           19,191             -           (5,295)            (5,295)


 Tax Swap
                                                                               Notional
                                                                                Value       Fair Value   Fair Value           Fair Value
                    Light's
  Institution                  Light's Payable Starting Date Maturity Date   Contracted      Dec/10       Dec/10                Dec/10
                  Receivable
                                                                                (US$       (R$) Assets (R$) Liabilities      (R$) Balance
                                                                             thousand)
                               101,9%CDI
    HSBC        CDI+0,85%                      10/11/2010      10/9/2011        150,000            211             -                  211
                               +(TJLP-6%)


                                                                 Total          150,000            211             -                  211


The amount recorded was measured by its fair value on December 31st, 2010. All operations with
derivative financial instruments are registered in clearing houses for the custody and financial
settlement of securities and there is no margin deposited in guarantee. Operations have no initial cost.

Below, the sensitivity analysis for foreign exchange and interest rates fluctuations, showing eventual
impacts on financial result of the Company and its subsidiaries.

The methodology used in the “Probable Scenario” was to consider that both foreign exchange and
interest rates will maintain the same level verified on December 31, 2010 until the end of 2011,
maintaining steady liabilities, derivatives and temporary cash investments then verified. It is worth
highlighting that, as this refers to a sensitivity analysis of the impact on the 2011 financial result, debt
and investment balances on December 31, 2010 were considered, and charges projection and
compensation on these balances. It is worth mentioning that the behavior of debt and derivatives
balances will observe their respective contracts, and the balance of temporary cash investments will
fluctuate according to the need or available funds of the Company and its subsidiaries.




                                                                                                                                             74
NOTES TO THE FINANCIAL STATEMENTS
ON DECEMBER 31, 2010 AND 2009
(Amounts in thousands of Brazilian reais)



Risk of Exchange Rate Depreciation:

                                                                                    R$
Operation                                        Risk   Scenario (I): Probable     Scenario (II)     Scenario (III)

FINANCIAL LIABILITIES                                                    (7,418)          (26,705)           (45,993)
Par Bond                                         USD                     (3,891)          (10,919)           (17,947)
Discount Bond                                    USD                     (1,612)           (6,324)           (11,035)
C. Bond                                          USD                     (1,543)           (6,575)           (11,608)
Debit. Conv.                                     USD                       (336)           (2,696)            (5,057)
Bib                                              USD                        (36)             (191)              (346)

DERIVATIVES                                      USD
Swaps                                                                    (2,199)            6,161             14,521

Reference for financial assets and liabilities                                              +25%               +50%
Financial
     R$/US$ exchange rate (end of the period)                            1.6662             2.0828            2.4993


Risk of Exchange Rate Appreciation:

                                                                                     R$
Operation                                        Risk   Scenario (I): Probable     Scenario (IV)     Scenario (V)

FINANCIAL LIABILITIES                                                   (7,418)            11,869            31,157
Par Bond                                         USD                    (3,891)             3,137            10,165
Discount Bond                                    USD                    (1,612)             3,099             7,811
C. Bond                                          USD                    (1,543)             3,489             8,521
Debit. Conv.                                     USD                      (336)             2,025             4,386
Bib                                              USD                       (36)               119               274

DERIVATIVES                                      USD
Swaps                                                                   (2,199)           (10,559)          (18,919)

Reference for financial assets and liabilities                                               -25%               -50%
Financial
     R$/US$ exchange rate (end of the period)                           1.6662             1.2497             0.8331




With the chart above, it is possible to identify that despite partial hedge against foreign currency-
denominated debt (only limited to debt service to expire within 24 months), as R$/US$ quote
increases, liabilities financial expense also increases but financial revenues of derivatives also partially
offset this negative impact and vice-versa. Thus, cash is hedged thanks to the derivatives policy of the
Company and its subsidiaries.

    Interest rate risk

This risk derives from impact of interest rates fluctuation not only over financial expense associated
with loans and financing of subsidiaries, but also over financial revenues deriving from temporary cash
investments. The policy for utilization of derivatives approved by the Board of Directors does not
comprise the contracting of instruments against such risk. Nevertheless, the Company and its
subsidiaries continuously monitor interest rates so that to evaluate eventual need of contracting
derivatives to hedge against interest rates volatility risk.


                                                                                                                        75
NOTES TO THE FINANCIAL STATEMENTS
ON DECEMBER 31, 2010 AND 2009
(Amounts in thousands of Brazilian reais)


See below the sensitivity analysis of interest rate risk, evidencing the effects on scenarios variation
results:

Risk of Interest Rate Increase:

                                                                        R$
Operation                                   Risk   Scenario (I):    Scenario (II)    Scenario (III)
                                                    Probable

FINANCIAL ASSETS                            CDI
Temporary cash investments                                51,985           64,981           77,977

FINANCIAL LIABILITIES                                   (259,363)        (314,847)        (370,623)
Debentures 5th issue                        CDI          (97,782)        (119,246)        (140,710)
CCB Bradesco                                CDI          (52,171)         (64,244)         (76,317)
CCB Bco ABN Amro Banking S/A                CDI           (9,751)         (11,909)         (14,067)
Debentures 4th issue                        TJLP             (11)             (13)             (14)
FINEM BNDES 2006-2008                       TJLP         (33,187)         (38,107)         (43,026)
FINEM BNDES 2009-2010                       TJLP         (13,584)         (15,977)         (18,371)
FINEM BNDES 2009-2010 TJLP+1                TJLP         (15,234)         (17,651)         (20,068)
PROESCO                                     TJLP            (652)            (772)            (893)
Debentures 6th issue                        CDI          (36,991)         (46,928)         (57,157)

DERIVATIVES
Currency swaps                              CDI           (2,199)          (2,896)           (3,591)
Interest rate swaps                         CDI            1,139            1,093             1,045
Interest rate swaps                         TJLP           1,139           (1,029)           (3,197)

Reference for FINANCIAL ASSETS                                             +25%              +50%
CDI (% YTD)                                              10.64%           13.30%            15.96%

Reference for FINANCIAL LIABILITIES                                        +25%              +50%
CDI (% YTD)                                              10.64%           13.30%            15.96%
TJLP (% YTD)                                              6.00%            7.50%             9.00%




                                                                                                       76
NOTES TO THE FINANCIAL STATEMENTS
ON DECEMBER 31, 2010 AND 2009
(Amounts in thousands of Brazilian reais)



Risk of Interest Rate Decrease:

                                                                        R$
 Operation                                  Risk   Scenario (I):    Scenario (IV)    Scenario (V)
                                                    Probable

 FINANCIAL ASSETS                            CDI
 Temporary cash investments                               51,985           38,988          25,992

 FINANCIAL LIABILITIES                                  (259,363)        (204,163)       (149,238)
 Debentures 5th issue                       CDI          (97,782)         (76,318)        (54,853)
 CCB Bradesco                               CDI          (52,171)         (40,098)        (28,025)
 CCB Bco Santander                          CDI           (9,751)          (7,593)         (5,436)
 Debentures 4th issue                       TJLP             (11)              (9)             (8)
 FINEM BNDES 2006-2008                      TJLP         (33,187)         (28,268)        (23,349)
 FINEM BNDES 2009-2010                      TJLP         (13,584)         (11,191)         (8,797)
 FINEM BNDES 2009-2010 TJLP+1               TJLP         (15,234)         (12,817)        (10,400)
 PROESCO                                    TJLP            (652)            (531)           (410)
 Debentures 6th issue                       CDI          (36,991)         (27,338)        (17,960)

 DERIVATIVES
 Currency swaps                             CDI           (2,199)          (1,498)           (795)
 Interest rate swaps                        CDI            1,139            1,183           1,226
 Interest rate swaps                        TJLP           1,139            3,307           5,476

 Reference for FINANCIAL ASSETS                                              -25%            -50%
 CDI (% YTD)                                             10.64%             7.98%           5.32%

 Reference for FINANCIAL LIABILITIES                                         -25%            -50%
 CDI (% YTD)                                             10.64%             7.98%           5.32%
 TJLP (% YTD)                                             6.00%             4.50%           3.00%



   Credit risk

It refers to the Company eventually suffering losses deriving from default of counterparties or
financial institutions depositary of funds or temporary cash investments. To mitigate these risks, the
Company uses all collection tools allowed by the regulatory body, such as disconnection for
delinquency, debit losses and permanent monitoring and negotiation of outstanding positions.
Concerning financial institutions, the Company only carries out operations with low-risk financial
institutions classified by rating agencies.

   Liquidity risk

Liquidity risk relates to the Company's ability to settle its liabilities. In order to determine the
Company's ability to satisfactorily meet its financial liabilities, the streams of maturities for funds
raised and other liabilities are reported with the Company's statements. Further information on the
Company's loans can be found in detail in notes 17 and 18.

The Company has raised funds through its operations, from financial market transactions and from

                                                                                                     77
NOTES TO THE FINANCIAL STATEMENTS
ON DECEMBER 31, 2010 AND 2009
(Amounts in thousands of Brazilian reais)


affiliate companies. These funds are allocated primarily to support its investment plan and in
managing its cash for working capital and liability management purposes.

Management of financial investments focuses on short-term instruments in an attempt to achieve
maximum liquidity and satisfy our expenditure requirements.

The Company's cash-generation ability and low volatility concerning receivables and accounts payable
over the year provide cash flow stability and thus reduce its liquidity exposure.

The realization flow concerning future liabilities as per the relevant terms and conditions is
summarized in the statement below:

                                                                 Consolidated
                                     1 to 3      3 months to 1    1 to 5 years   More than     Total
Interest rate instruments            months          year                         5 years
Floating
  Loans, financings and debentures     74,465        676,162        1,999,085       228,921   2,978,633

Interest rate instruments
Fixed rate
  Loans, financings and debentures       2,181         57,188         108,932       185,814     354,115




e)    Capital Management

The Company manages its capital with the purpose of safeguarding its capacity to continuously offer
return to shareholders and benefits to other stakeholders, in addition to maintaining the ideal capital
structure to reduce costs.

In order to maintain or adjust its capital structure, the Company either reviews the dividend payment
policy, returns capital to shareholders or issues new shares and sells assets to reduce the indebtedness
level, for instance.

f)    Hierarchical Fair Value

     There are three types of classification levels for the fair value of financial instruments. This
     hierarchy prioritizes unadjusted prices quoted in an active market for financial assets or liabilities.
     The classification of hierarchical levels can be presented as follows:

             Level 1 - Data originating from an active market (unadjusted quoted price) that can be
           accessed on a daily basis, including at the date of fair value measurement.

      Level 2 - Different data originating from the active market (unadjusted quoted price) included
       in Level 1, extracted from a pricing model based on data observable in the market.

      Level 3 - Data extracted from a pricing model based on data that are not observable in the
       market.




                                                                                                          78
NOTES TO THE FINANCIAL STATEMENTS
ON DECEMBER 31, 2010 AND 2009
(Amounts in thousands of Brazilian reais)


                                                                  Consolidated
                                                           Measurement of Fair Value
                                                            Identical           Similar     Without active
                                                            markets            markets         market
                                           12/31/2010        Level 1            Level 2        Level 3
ASSETS
 Cash and cash equivalent (note 6 )            478,081              -             478,081            -
 Marketable securities (note 7)                 11,122              -              11,122            -
 Swaps                                             211              -                 211            -
                                               489,414              -             489,414            -

LIABILITIES
  Loans and financing (Note 17)               1,335,183             -           1,335,183            -
  Debentures (Note 18)                        1,088,402             -           1,088,402            -
  Swaps (Note 17)                                 5,295             -               5,295            -
                                              2,428,880             -           2,428,880            -



No financial instrument classified as Level 1 or 3 was observed in the analysis period, and there was
no transfer from one level to another in the same period.

34.      INSURANCE

On December 31st, 2010, Grupo Light had insurances covering its main assets, including:

Operational Risk Insurance - it covers material damages caused to buildings, machinery, equipment,
furniture and fixtures as a result of fires, explosions, dumping, floods, earthquakes, machinery
breakdown and electrical damage.

All assets of Grupo Light are insured under the Operational Risks modality, with an “All Risks”
coverage, except for transmission and distribution lines.

Directors and Officers Liability Insurance (D&O) - It has the purpose of protecting Executives from
losses and damages resulting from their activities as Directors, Officers and Managers of the Company.

General and Civil Liability Insurance - focuses on the payment of indemnity if the Company is deemed
civilly liable by a final and unappealable sentence or deal authorized by the insurance company, in
relation to remedies for collateral damage, physical damage to people and/or material damage caused
to third parties and related to pollution, contamination and sudden leakage.

International Transport Insurance – cargo/equipment shipping, Financial Guarantee Insurance – Energy
Trading (8 policies) and Fire Insurance – Leased Properties.

The assumptions of risks adopted, given their nature, are not included in the scope of an audit firm,
accordingly, they were not audited by independent auditors.

Insurance coverage as of December 31, 2010 is considered sufficient by Management, as summarized
below:

                                               Effective Term                  Amount
RISKS                                        From             To               Insured        Premium

 Directors & Officers (D&O)                08/10/2010     08/10/2010        US$20.000         US$ 76
 Civil and general liabilities             09/25/2010     09/25/2010         R$20,000          R$448
 Operating risks*                          10/31/2010     10/31/2011       R$ 3,664,000       R$1,482
                                                                                                             79
NOTES TO THE FINANCIAL STATEMENTS
ON DECEMBER 31, 2010 AND 2009
(Amounts in thousands of Brazilian reais)




35. ENVIRONMENTAL ISSUES

Amongst the most relevant initiatives taken by the Company to ensure environmental quality, the
following stand out:

 Greenhouse Gas (GHG) Emissions (1): The Company started a survey on greenhouse gas emissions
 related to its activities in 2006. Based on this survey, the Company established an annual target for
 GHG emission reduction, which has been reached and even surpassed in view of the efforts to make
 processes more efficient (with lower waste and gas generation).

 Waste Management (1): Specialized companies are contracted to ensure the correct destination of
 the waste generated by the Company, including hazardous and recyclable waste. In the maintenance
 of Power Station plants, for example, there is an agreement with a company specialized in providing
 washable and reusable towels to replace rags and cloths, resulting in a reduction of up to 60%. As for
 the activities of the Distribution Station, the Company has an agreement that guarantees the reuse of
 unused equipment removed from the electric power network, allowing for a significant reduction in
 the consumption of natural resources and waste generation.

 Environmental Management System (EMS) and Integrated Management System (IMS) (1): The
 Company currently has 247 sites certified by ISO 14001, a standard that establishes Environmental
 Management criteria. Light Energia has a triple certification – Quality, Health & Safety and
 Environment for the whole Generation Estate in operation. The undertakings certified under the
 Environmental Management System (EMS) include electric power sub-stations, 138-kV overhead
 distribution lines, commercial agencies, hydropower plants, among others. The Company's EMS
 allows for the management of environmental aspects and impacts deriving from the activities listed,
 as well as compliance with the applicable legal requirements, awareness and environmental training
 of employees, among others. The maintenance of such a system requires various investments to avoid
 possible non-compliance.

 Macrophyte Handling (1): The water vegetation formed in the reservoirs can cause significant
 problems in power generation, in the control of floods and the multiple uses of water, which requires
 large investments to control their population growth.

 Macrophyte Handling (1): The water vegetation formed in the reservoirs can cause significant
 problems in power generation, in the control of floods and the multiple uses of water, which requires
 large investments to control their population growth.

 Program for the Recovery of Rivers and Reservoirs (1): The Company took on a commitment with
 the Environmental Department of the Rio de Janeiro State to recover the fish fauna of the Paraíba do
 Sul river. The project elaborated by the State Environmental Institute [Instituto Estadual do Ambiente
 – INEA] provides for the release of 1 million alevins, of which 200,000 will be provided by Light.

 Social-environmental responsibility (1): The Company takes education very seriously, and for many
 years it has been financing primary and technical environmental education projects and schools in
 cities of its concession area. The Social-environmental inclusion project is one of these initiatives, in
 a partnership with the Education Department of Piraí-RJ and researchers from UNESP, UNIRIO,
 UFRRJ, FIOCRUZ and CETAS/IBAMA (Seropédica-RJ), aiming to provide teachers, students and
                                                                                                       80
NOTES TO THE FINANCIAL STATEMENTS
ON DECEMBER 31, 2010 AND 2009
(Amounts in thousands of Brazilian reais)


 employees of the Escola de Lajes school, Company employees and the community with opportunities
 to learn about local environmental resources available, as well as qualify multipliers of sustainable
 initiatives, focusing on the necessary environmental care to prevent water pollution and global
 warming.


 These initiatives have helped Light remain listed in Bovespa's corporate sustainability index (ISE)
 since 2007.

In 2010, investments in the aforementioned projects, among others, amounted to R$4,976.

(1) Unaudited.




                                                                                                   81
NOTES TO THE FINANCIAL STATEMENTS
ON DECEMBER 31, 2010 AND 2009
(Amounts in thousands of Brazilian reais)



36. INFORMATION BY SEGMENT

Segment reporting was prepared according to CPC 22 (Information by Segment), equivalent to IFRS
8, and is reported in relation to the business of the Company and its subsidiaries, identified based on
their management structure and internal management information.

The Company's Management considers the following segments: power distribution, power generation,
power trading and others (including the holding). The Company is segmented according to its
operation, which has different risks and compensation.

Segment information for the years ended December 31st, 2010 and December 31 st, 2009 are presented
below:


                                                                                                               Consolidated
                                 Distribution   Generation     Trading         Other        Eliminations          2010

Current assets                     2,200,937        166,428        61,605       114,245         (165,047)          2,378,168
Non-current assets                 2,152,886          1,017        20,409           195         (218,002)          1,956,505
Investments                           16,374            149           -       3,356,792       (3,355,729)             17,586
Property, plant and equipment        189,015      1,433,849         5,039           990              -             1,628,893
Intangible assets                  3,478,653        131,766           -           1,319            2,034           3,613,772
Current liabilities                1,954,713        217,644        39,398       140,045         (165,047)          2,186,753
Non-current liabilities            3,640,719        647,138         7,134         1,038         (218,002)          4,078,027
Shareholders' equity               2,442,433        868,427        40,521     3,332,458       (3,353,695)          3,330,144




                                                                                                            Consolidated
                                                                                                               2009
                                 Distribution   Generation    Trading       Other         Eliminations        restated

 Current assets                    2,592,400       241,920        49,947      191,464        (288,818)          2,786,913
 Non-current assets                2,324,417           668         1,889            68       (307,244)          2,019,798
 Investments                          16,448           150         2,581    3,514,356      (3,513,147)             20,388
 Property, plant and equipment       180,658     1,414,844         4,336          730                           1,600,568
 Intangible assets                 3,306,009       116,971           -            -                             3,422,980
 Current liabilities               1,632,313       256,089        29,473      151,750        (288,818)          1,780,807
 Non-current liabilities           4,088,365       733,617         1,455            19       (307,244)          4,516,212
 Shareholders' equity              2,699,254       784,847        27,825    3,553,680      (3,511,978)          3,553,628




                                                                                                                               82
NOTES TO THE FINANCIAL STATEMENTS
ON DECEMBER 31, 2010 AND 2009
(Amounts in thousands of Brazilian reais)


Income segment reporting:
                                                                                                                                                             Consolidated
                                                                                                                                       Consolidated              2009
                                         Distribution        Generation           Trading           Other           Eliminations           2010              Re-presented


OPERATIONAL REVENUE                             9,347,209         365,018              303,668                  -        (178,904)            9,836,991             9,254,630
  Billed supplies                               7,927,985                 -                     -               -                  -          7,927,985             7,655,676
  Unbilled supplies                                (8,830)                -                     -               -                  -               (8,830)               25,810
  Supply - Electric Power                          66,446         359,050              249,872                  -        (161,664)                513,704               361,602
  Construction revenue                            552,831                 -                     -               -                  -              552,831               526,986
  Other                                           808,777           5,968               53,796                  -         (17,240)                851,301               684,556


DEDUCTIONS TO REVENUE                          (3,250,106)        (45,077)             (33,224)                 -                  -         (3,328,407)           (3,047,733)
  Billed sales - ICMS (State VAT)              (2,194,042)                -            (25,402)                 -                  -         (2,219,444)           (2,080,591)
  Consumer charges                              (556,347)         (13,628)                      -               -                  -           (569,975)             (515,464)
  PIS (Tax on Revenues)                          (89,735)          (5,606)              (1,098)                 -                  -              (96,439)              (81,702)
  COFINS (Tax on Revenues)                      (407,984)         (25,830)              (5,050)                 -                  -           (438,864)             (367,423)
  Other                                            (1,998)            (13)              (1,674)                 -                  -               (3,685)               (2,553)


NET OPERATIONAL REVENUE                         6,097,103         319,941              270,444                  -        (178,904)            6,508,584             6,206,897


OPERATING EXPENSES AND COSTS                   (5,037,251)       (152,913)            (248,539)        (6,772)             178,904           (5,266,571)           (5,161,056)
  Personnel                                     (238,196)         (20,683)              (3,165)        (3,710)                     -           (265,754)             (271,863)
  Material                                       (22,674)           (814)               (9,996)               (6)                  -              (33,490)              (25,911)
  Outsourced services                           (317,603)         (15,832)             (24,575)        (2,416)                     -           (360,426)             (274,105)
  Energy purchased                             (3,344,010)        (17,701)            (209,297)                 -          178,544           (3,392,464)           (3,322,637)
  Depreciation                                  (290,232)         (61,618)                  (612)               -                  -           (352,462)             (343,557)
  Provisions                                    (208,357)          (9,328)                      -               -                  -           (217,685)             (306,045)
  Construction cost                             (552,831)                 -                     -               -                  -           (552,831)             (526,986)
  Other                                          (63,348)         (26,937)                  (894)           (640)             360                 (91,459)              (89,952)


Equity in the earnings of subsidiaries                   -                -                     -      579,394           (579,394)                       -                     -


FINANCIAL INCOME                                (289,098)         (33,869)                   967            2,606                  -           (319,394)                (84,929)
  Financial revenue                               194,356           6,993                   1,493           2,671         (32,290)                173,223               186,745
  Financial expenses                            (483,454)         (40,862)                  (526)            (65)           32,290             (492,617)             (271,674)


INCOME BEFORE TAXES                               770,754         133,159               22,872         575,228           (579,394)                922,619               960,912
  Social Contribution                            (77,440)         (15,751)              (1,926)                 -              -                  (95,117)           (168,994)
  Income tax                                    (217,998)         (28,745)              (5,609)                 -              -               (252,352)             (203,114)


NET INCOME                                        475,316          88,663               15,337         575,228           (579,394)                575,150               588,804




37. TARIFF ADJUSTMENT

In a public meeting of the board of executive officers held on November 3, 2010, ANEEL (Brazilian
Electricity Regulatory Agency) approved the average adjustment of tariff charged by Light Serviços
de Eletricidade S.A. (Light SESA) by 6.99% for a period of 12 months as of November 7, 2010.

The tariff adjustment index has two components: a Structural component of 8.31%, which is now part
of the tariff, and a Financial component of -1.32%, exclusively applied to the next 12 months.

Tariff Adjustment - Light 2010                                                %
IRT Structural                                                          8.31
Additional Financial Charges                                          (1.32)
Total                                                                     6.99

It is worth pointing out that the tariff incorporate the effects of the new methodology proposed in the
Addendum approved by ANEEL at the meeting of the board of executive officers held on February
2rd, 2010.

Pursuant to the concession contract, the concessionaire's revenue is divided into two portions. “Portion
A” involves the so-called “non-manageable costs” related to the electric power distribution activity,
and are only transferred to the power tariff, regardless of the concessionaire's management. “Portion
                                                                                                      83
NOTES TO THE FINANCIAL STATEMENTS
ON DECEMBER 31, 2010 AND 2009
(Amounts in thousands of Brazilian reais)


B” comprises the remaining revenue amount, therefore involving the so-called "manageable costs", i.e.
costs managed by the concessionaire itself. This portion includes operating and maintenance expenses,
depreciation and investment compensation.

The purpose of the tariff adjustment is to reestablish the purchasing power of the concessionaire's
revenue, according to a formula provided in the concession contract. The tariff is adjusted on an
annual basis at the contract anniversary date, except in the tariff revision year. To apply the formula,
all of the distributor's non-manageable costs are calculated (“Portion A”). Other manageable costs
included in “Portion B” are restated by the IGP-M index established by Fundação Getúlio Vargas. The
restatement of “Portion B” still depends on the X factor, an index established by ANEEL at the time of
adjustment. Its function is to share with the consumer the concessionaire's productivity gains deriving
from the growth in the number of consuming units and the increase in consumption in the existing
market, which contributes to a moderate tariff.

The 8.34% variation in manageable costs (“Portion A”) is mainly due to the increase in Sector
Charges, deriving from the recently approved Law no. 12,111, which increased the costs of the Fuel
Consumption Account (FCA) and Research and Development account (R&D), and from the increase
in System Service Charges (SSC), which results from the inclusion of the forecast of costs associated
to thermal power dispatch, outside the merit order, due to power safety by order of the CMSE.
“Portion B”, which corresponds to manageable costs, reflects the 8.81% IGP-M variation accumulated
in the period of November 2009 to October 2010, with deduction of the 0.86% X Factor, resulting in
the final percentage of 7.95%.

The consumers of Light SESA observed an average increase of 2.20% in their energy bills since
November 7th, 2010.


38. LONG-TERM INCENTIVE PLAN

a) Stock Option Incentive Plan

On November 6th, 2009, the executives entitled to the long-term incentive plan were dismissed from
their positions. Item 10 of the plan provided that, in case of termination of the employment contract
before the end of the grace period, the beneficiaries were allowed to exercise a percentage of up to
95% of the options granted, depending on the contract termination date in relation to the vesting
period.

The options granted totaled 6,917,733 shares, and the executives were entitled to 95% of them, which
was equivalent to 6,571,846 shares.

On December 31st, 2010, all options had already been exercised.

In order to exercise the obligation deriving from the option exercise by the executives, the Company
bought shares in the market, holding them in treasury until the settlement of all obligations.

b) Incentive Plan in “Phantom Options”



                                                                                                     84
NOTES TO THE FINANCIAL STATEMENTS
ON DECEMBER 31, 2010 AND 2009
(Amounts in thousands of Brazilian reais)


The “phantom Options” modality was offered to eligible executives appointed by the Board of
Directors and is directly linked to Light's value creation, measured by the variation in Light's Value
Unit (LVU). The calculation of LVU is based on the weighing of the following factors:

   1. Market value of shares issued by Light S.A;
   2. Economic value (a multiple of EBITDA);
   3. Amount of dividends distributed.

The difference between the LVU provided in the Program for the grant year and the LVU verified in
the exercise year multiplied by the amount of shares exercised by the participant will amount to the
total long-term bonus to be paid to each participant.

The Company established a provision in the amount of R$10,669 (R$4,132 on December 31, 2009) for
the vesting period incurred in 2010, with an offsetting entry under personnel expenses.


39. LONG-TERM CONTRACTS

a) Use of distribution system agreements (CUSD)
All plants of subsidiary Light Energia are conected to the distribution network and are valid until the
termination date of concessions. On December 31st, 2010, the remaining balance of agreements is
R$243,319 (R$244,470 on December 31st, 2009).

b) Electric power sale agreements


On December 31st, 2010, Light Energia had power sale commitments positioned in average MW, as
shown in the chart below:
             Contracted Energy
   Year      TOTAL (avg.MW)
   2011            523,2
   2012            521,2
   2013            510,1
   2014            510,2
   2015            479,9
   2016            479,9
   2017            479,9
   2018            479,9
   2019            479,9
   2020            449,6
   2021            449,6
   2022            449,6
   2023            449,6
   2024            449,6
   2025            449,6
   2026            449,6


c) Electric power purchase agreements

                                                                                                    85
NOTES TO THE FINANCIAL STATEMENTS
ON DECEMBER 31, 2010 AND 2009
(Amounts in thousands of Brazilian reais)


On December 31st, 2010 the Company had power purchase commitments, as follows:


                 avg.MW                avg.MW         avg.MW
   Year     Bilateral Contracts   Energy Auctions   Total Contracts
   2011                  1,341           1816                 3,157
   2012                  1,341           1883                 3,224
   2013                  1,341           1505                 2,846
   2014                  1,341            949                 2,290
   2015                  1,341            883                 2,223
   2016                  1,341            865                 2,206
   2017                  1,341            934                 2,275
   2018                  1,341            939                 2,280
   2019                  1,341            939                 2,280
   2020                  1,341            939                 2,280
   2021                  1,341            939                 2,280
   2022                  1,341            939                 2,280
   2023                  1,341            919                 2,260
   2024                  1,341            877                 2,218
   2025                    616            681                 1,297
   2026                     -             634                   634




                                                                                 86
NOTES TO THE FINANCIAL STATEMENTS
ON DECEMBER 31, 2010 AND 2009
(Amounts in thousands of Brazilian reais)



                                                  BOARD OF DIRECTORS

                         MEMBERS                                             ALTERNATES

                          Aldo Floris                                    Lauro Alberto de Luca

                    Ana Marta Horta Veloso                             João Procópio Loures Vale

                   Djalma Bastos de Morais                                      Vacant

                 João Márcio Lignani Siqueira                        Fernando Henrique Schuffner Neto

                 Firmino Ferreira Sampaio Neto                        Carlos Augusto Leone Piani

                  Luiz Carlos Costeira Urquiza                     Paulo Roberto Reckziegel Guedes

                 Carlos Roberto Teixeira Junger                            Ricardo Simonsen

                      Sérgio Alair Barroso                                Luiz Fernando Rolla

                  Maria Silvia Bastos Marques                            Almir José dos Santos

                    Carlos Alberto da Cruz                           Carmen Lúcia Claussen Kanter

                      Elvio Lima Gaspar                                 Joaquim Dias de Castro


                                                    FISCAL COUNCIL


                    MEMBERS                                           ALTERNATES
             Eduardo Grande Bittencourt                            Ricardo Genton Peixoto
                    (Chairman)
         Isabel da Silva Ramos Kemmelmeier                      Ronald Gastão Andrade Reis
                       (Member)
                Ari Barcelos da Silva                              Eduardo Gomes Santos
                     (Member)
       Maurício Wanderley Estanislau da Costa              Márcio Cunha Cavour Pereira de Almeida
                    (Member)
   Aristóteles Luiz Menezes Vasconcellos Drummond                    Aliomar Silva Lima
                      (Member)




                                                                                                        87
NOTES TO THE FINANCIAL STATEMENTS
ON DECEMBER 31, 2010 AND 2009
(Amounts in thousands of Brazilian reais)



                                      BOARD OF EXECUTIVE OFFICERS

                                                    Jerson Kelman

                                                Chief Executive Officer



                                              João Batista Zolini Carneiro

                                  Chief Financial and Investor Relations Officer



                                              Evandro Leite Vasconcelos

                                                    Energy Officer



                                                 Paulo Carvalho Filho

                                         Corporate Management Officer



                                                Ana Silvia Corso Matte

                                                   Personnel Officer



                                                 José Humberto Castro

                                                  Distribution Officer



                                              Paulo Roberto Ribeiro Pinto

                                      New Business and Institutional Officer




                                 CONTROLLERSHIP SUPERINTENDENCE

                Luciana Maximino Maia                                        Suzanne Lloyd Gasparini
              Controllership Superintendent
                                                                       Accountant – Accounting Manager
                  CPF 144.021.098-50                                          CPF 081.425.517-56
                  CRC-RJ 091476/O-0                                            CRC-RJ 107359-0




                                                                                                         88

				
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