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Cemig Generation and Transmission

Cemig Distribution

Dividend Policy

As specified in our bylaws, dividends for a business year may only be distributed after deducting any accumulated (retained) losses and the provision for income tax.

The requirements for distribution of the net income for each year are as follows: (i) 5% to the legal reserve, up to the maximum limit specified by law; (ii) 50% distributed as obligatory dividend to the company’s stockholders, subject to the other provisions of the bylaws and the applicable legislation; (iii) the balance, after the retention specified in the capital expenditure and/or investments prepared by the management of Cemig, in obedience to the Strategic Plan and the dividend policy therein specified and duly approved, to constitute the earnings reserve for distribution of extraordinary dividends, subject to the provisions below, up to the maximum limit specified by law.

Without prejudice to the obligatory dividend, every two years Cemig will use the above-mentioned earnings reserve for distribution of extraordinary dividends up to the limit of cash available.

The Board of Directors may declare interim dividends, in the form of Interest on Equity, on account of accumulated profits, profit reserves, or profits found in the 6-monthly or interim financial statements.

The amounts paid or credited as Interest on Equity are, under the legislation, computed as on account of the dividends distributed, for all legal purposes.

The obligatory or extraordinary dividends declared are to be paid in two equal installments, by June 30 and December 30 of each year and the Executive Board, subject to these dates, has responsibility for deciding the location and processes of payment. Dividends not claimed within 3 years from the date on which they are made available to the stockholder revert to the benefit of the company.

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