exv10wxny



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Exhibit 10(n)




FINAL VERSION




SALE PURCHASE OF SHARES AND EQUIPMENT AND

INDEBTEDNESS REPAYMENT AGREEMENT



The present Sale Purchase of Shares and Equipment and Indebtedness Repayment Agreement (the
“Agreement”), is executed on March 30, 2007, between CMS Energy Corporation, a corporation duly
incorporated in accordance with the laws of the State of Michigan, United States of America (the
“Seller”), represented in this act by Joseph P. Tomasik, who is a citizen of the United States of
America, of legal age, domiciled in the city of Jackson, State of Michigan, and holder of the
Passport of the United States of America number 027671098, and Petróleos de Venezuela, S.A. a
corporation incorporated in accordance with the laws of the Bolivarian Republic of Venezuela,
domiciled in the city of Caracas in the Metropolitan District, originally constituted by Decree N°
1.123 dated August 30th, 1975, published on Extraordinary Official Gazette of the
Republic of Venezuela N° 1.170 on the date before mentioned and registered before the First
Commercial Registry on September 15th, 1975 of the Judicial Circuit of the Federal
District and Miranda State, under No. 23, Volume 99-A, which entry was published on Extraordinary
Municipal Gazette N° 413 of the Federal District on September 25th, 1975 and which
Corporate Charter and Bylaws have been modified by means of Decrees N° 250, 885, 1313, 2184 and
3299 dated August 23rd, 1979; September 24th, 1985; May 21st,
2001; December 10th, 2002 and December 7th, 2004, respectively, the last
decree published on the Official Gazette of the Bolivarian Republic of Venezuela N° 38.081 (the
“Buyer”), represented in this act by its President, the citizen Rafael Ramírez Carreño, who is
Venezuelan citizen, of legal age, of this domicile, and bearer of the Identity Card N° 5.479.706,
duly authorized for this act in accordance with the numeral 4 of the Thirty-Fourth Clause of the
Corporate Charter and By-Laws of the Buyer;




 









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     WHEREAS that the Seller is the ultimate owner, through its affiliates of 58.961.700 shares
(the “Shares”) of the Sistema Eléctrico de Nueva Esparta, C.A., a Venezuelan corporation
(“SENECA”), representing seventy per cent (70%) of the issued ordinary shares of SENECA, and eighty
eight and two thousandth per cent (88,002%) of its social capital;



     WHEREAS SENECA, in one side, and some of the affiliates of the Seller, are reciprocally
indebted for certain amounts under the concepts described in the Exhibit A, that upon set off
result in a outstanding debt by SENECA to the affiliates of the Seller for an amount of at least
one million nine hundred thousand Dollars of the United States of America (US$ 1.9 millions) (the
“Indebtedness”);



     WHEREAS, that the equipment of an affiliate of the Seller, described in Exhibit B of this
Agreement (the “Equipment”) is currently subject to a lease between CMS Enterprises and SENECA (the
“Lease”), which unpaid amount is of fifteen millions six hundred thousand Dollars of the United
States of America (US$ 15,6 millions) including the payment of purchase to the termination;



     WHEREAS the Seller and the Government of the Republic celebrated a Memorandum of Understanding
dated February 13th, 2007 (the “MOU”), which provides for: (i) the sale of the Shares by
the Seller to the Buyer, (ii) the repayment of the Indebtedness, and (iii) the transfer in favor of
SENECA of ownership of the Equipment (jointly referred to as the “Transactions”); and



     WHEREAS the Seller and the Buyer wish to formalize the Transactions in the terms and
conditions provided in this Agreement.



     Based on the above and with the intention of being legally bound by the present Agreement, the
parties of this Agreement (the “Parties”) agree the following:




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CLAUSE 1

SALE PURCHASE




     Clause
1.1.  Sale Purchase of the Shares.





     Subject to the terms and conditions of the present Agreement, at the moment of the Closing (as
such term is defined below), the Seller shall assure that its affiliate (i) sell and transfer the
Shares to the Buyer, free of all liens, (ii) release the repayment obligation under the
Indebtedness, and (iii) sell and transfer the Equipment to the Buyer, free of all security
interests. The total price that shall be paid by the Buyer to the Seller for the Transactions is
of one hundred five million five hundred thousand Dollars of the United States of America (US$
105,500,000) (the “Price of the Transactions”), which is divided as follows: (a) for the sale
purchase of the Shares, eighty eight million Dollars of the United States of America (US$
88,000,000); (b) for the repayment of the Indebtedness, one million nine hundred thousand Dollars
of the United States of America (US$ 1,900,000); and (c) for the sale purchase of the Equipment,
fifteen millions six hundred thousand Dollars of the United States of America (US$ 15,600,000).
The Price of the Transactions shall be paid at the Closing (as such term is defined below) only and
exclusively in Dollars of the United States of America (with exclusion of any other currency),
though wire transfer in immediately available funds, without any set off, withholding (including
withholding of taxes) deduction or restriction whatsoever, to the account that to such effect the
Seller indicates in writing to the Buyer. The Price of the Transactions constitutes the total
compensation to be paid to the Seller for the transfer of ownership of the Shares and the
Equipment, as well as for the repayment of the Indebtedness. The Seller, on its own behalf and on
behalf of its affiliates, (i) waives, from the Closing, all the claims that has or may have against
the Republic or any of its agencies, dependences, enterprises or other entities (including SENECA),
or any of their respective directors, officers, employees, agents or representatives, in connection
with the Shares, to the announcements or acts of the Republic with respect to the nationalization
of SENECA, or any other matter related to SENECA, being excepted any claim that the Seller may have
under this Agreement and (ii) commits to indemnify to such parties for any claim of its affiliates
related to such matters. The Buyer waives, from the Closing, all claims against the Seller or its
affiliates or its respective directors, officers, employees, agents or representatives, for
reasonable and legal acts of administration of SENECA carried out before the Closing.



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     Clause
1.2  Closing.



     The formalization, perfection and completion of the Transactions shall take place, provided
the conditions precedent that are referred in the Clause 5 of this Agreement have been satisfied,
in a closing (the “Closing”) that shall be held in the offices of the Buyer in Caracas, Venezuela,
on the working day that to such effect the Buyer sets on or before April 30, 2007 (the “Closing
Date”) in the understanding that the Buyer shall notify the Seller of the Closing Date five (5)
working days in advance.



CLAUSE 2




REPRESENTATIONS AND WARRANTIES OF THE SELLER




     The Seller hereby represents and warrants to the Buyer the following:



     Clause
2.1  Incorporation and Authority; Absence of Conflicts.



     It is a corporation duly incorporated and existing in accordance with the law of the State of
Michigan, United States of America, and has all the required powers and corporate authority to
enter into this Agreement, comply with its obligations hereunder and to carry out the Transactions.
This Agreement constitutes a valid and legally binding obligation of the Seller and enforceable
against it in accordance with its terms. The Seller is not required to obtain the consent of any
third party for the execution and performance of this Agreement. The execution and performance of
this Agreement by Seller does not (i) constitutes any violation or breach, nor shall it give a
right to the termination or acceleration of any obligation with respect to (a) any constitutive
document of the Seller or of SENECA, or (b) any law to which the Seller or SENECA are subject, nor
(ii) shall it create any security interest on the assets of SENECA.




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     Clause
2.2.  Shares and Capital.





     The Shares represent seventy per cent (70%) of the issued ordinary shares of SENECA, and the
eighty eight and two thousandth per cent (88,002%) of its social capital. The affiliates of the
Seller are the registered owners of the Shares, which are free of all security interests of any
nature. Except for the Shares, neither the Seller nor any of its affiliates have any right on the
social or stock capital of SENECA, nor have any other rights or interest on SENECA. The Buyer
shall acquire the legitimate ownership of the Shares, free of all security interests, when the
title to the Shares are delivered at the Closing and its assignment be inscribed on the books of
SENECA. SENECA does not have any affiliate or subsidiary nor has any equity right of any kind on
the social participation of any third party. Upon Closing, the Seller and its affiliates will not
have any outstanding obligations or rights, option rights or other rights, contracts or compromises
of any kind related to SENECA and its capital stock.



     Clause
2.3  Equipment and Indebtedness.



     An affiliate of the Seller is the owner of all the Equipment, free of all security interests.
On the Closing, the Buyer shall acquire the legitimate ownership of the Equipment, free of liens of
any nature. The Indebtedness is the only obligation of any nature of SENECA to the Seller or any
of its affiliates, and from the Closing, SENECA shall cease to have any obligation with respect
thereto.



     Clause
2.4  Financial Statements.



     The Appendix 2.4 contains a truthful copy of the financial statements and complementary
information of SENECA, duly audited, which include the balance sheet, the profits and losses and
cash flow reexpressed values, as of December 31st, 2006 (the “Financial Statements”), in
the understanding that the complementary information of the Financial Statements includes as well
historical values. The Financial Statements were prepared in accordance with the general accepted
accounting principles in the Republic, and present in an accurate form all the relevant aspects to
the financial condition of SENECA to such date and the result of its operations during the exercise
that has concluded.



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     Clause
2.5  Conduct of Business and Inexistence of Hidden Liabilities.



     From the date of the issuance of the Financial Statements until the date of the present
Agreement (i) SENECA has, in all the relevant aspects, carried out its business and operations
within the ordinary course of the business in a manner consistent with its past commercial
practices, (ii) neither the Seller, nor SENECA, has taken any action that, if taken after the
execution of this Agreement, may constitute a breach to the provisions of Clauses 4.2 and 4.4
(neither has authorized, nor has proposed, nor has executed any contract with aims to take that
action), and (iii) in the best knowledge of the Seller, no material adverse effect has occurred in
relation with SENECA; provided that, the Seller has disclosed the matters referred to in Appendix
4.1 in connection with the activities of SENECA. Furthermore, except for liabilities incurred after
December 31, 2006 in the ordinary course of business consistent with past practice or any matter
described in the Appendices hereof, SENECA does not have material obligations or liabilities
different from the obligations and liabilities mentioned in the Financial Statements.



     Clause
2.6  Taxes.



     Except as provided in the Appendix 2.6, (i) all the tax returns have been filed with relation
to SENECA and all taxes, fines and recharges that SENECA has to pay in accordance with the
applicable laws have been paid or have been reserved for on SENECA’s financial statements, and (ii)
SENECA has received no notification of a material tax assessments that may affect the valuation of
the Shares.



     Clause
2.7  Litigation and Proceedings.



     There is no existing material litigation, whether civil, criminal, administrative or
regulatory, nor relevant arbitral proceedings or alternative dispute resolution proceedings or
similar proceedings, nor relevant pending investigations, demands, actions or denounces, or to the
best knowledge of the Seller, threaten or announced, against or by SENECA, except to those that are
described in the Financial Statements or in Appendix 2.7 of this Agreement.



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     Clause
2.8  Compliance with the Law.



     Except for the obligation established in the article 6 of the Organic Law of Electric Service
related to the separation of activities, SENECA complies in all material respects with all the laws
or governmental orders that are applicable to it or to any of its properties or assets.



     Clause
2.9  Transactions with Related Parties.



     Except for the Lease and related letter agreements, there are no agreements currently in
effect between SENECA and the Seller, and/or any of its affiliates, shareholders, directors or
officers. Except for the property of the Equipment neither the Seller, nor its affiliates or
shareholders, directors or officers are the owners or have any right related to the assets,
properties or rights used by SENECA.



     Clause
2.10  Property Title and Absence of Security Interests.



     Except as set forth in Appendix 2.10, SENECA is the only and exclusive owner and holder, and
has ownership title to all the real property and other assets, including plants, equipment,
turbines, rights of way and servitudes, free of all security interests or domain limitation.



     Clause
2.11  Assets Conditions.



     Except as set forth in Appendix 2.11, the assets and properties of SENECA, including plants
and equipment, are in reasonable operating condition (excluding the normal wear and tear for use
and for limitations imposed to avoid rationing on SENECA’s distribution system) and have received
maintenance in accordance with the industry prudent practices .



     Clause
2.12  Contracts.



     Appendix 2.12 contains a complete list of all material contracts entered into by SENECA for
the correct and good operation and conduction of the business of SENECA or with an amount higher
than two hundred fifty thousand Dollars of the United States of America (US$ 250,000) (the
“Important Contracts”). Each of the Important Contracts is in full force and effect, provided that
the Seller has disclosed to the Buyer what is set forth in



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Appendix 4.1 in connection with the possible termination of the reinsurance. SENECA is not in
breach in accordance with the Important Contracts, and the completion of the Transactions will not
result in any breach on the part of SENECA in accordance to the Important Contracts, nor will it
give right to the counterpart for early termination of the same.



     Clause
2.13  Environmental Liability.



     Except as set forth in Appendix 2.13, in the best knowledge of the Seller there are no
environmental liabilities of SENECA that may affect in an adverse manner the valuation of the
Shares.



     Clause
2.14  Absence of Indemnification Obligation to Employees.



     Except for payment obligations in accordance with the labor laws that could arise with
relation to Seller’s obligation provided in the Clause 4.3, the execution and performance of this
Agreement by the Seller shall not give any right to any employee, officer or director of SENECA to
receive from SENECA any payment whether arising from the change of control, related with an
obligation derived from termination or by any other reason.



     Clause
2.15  Complete Disclose.



     The Seller has disclosed to the Buyer all the material information and documentation that may
affect the valuation of the Shares. Furthermore, no written information or documentation provided
or to be provided by the Seller or any of its affiliates (including SENECA) to the Buyer hereunder
or in connection with the Transactions contemplated in this Agreement contains or will contain any
false declaration or information of any material fact, nor will they omit any material fact so that
the representations granted are not misleading in the light of the circumstances under which they
were made.



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CLAUSE 3

REPRESENTATIONS AND WARRANTIES OF THE BUYER




     The Buyer hereby represents and warrants to the Seller that the Buyer has all the required
powers and corporate authority to enter into this Agreement, comply with its obligations hereunder
and to carry out the Transactions. The execution and performance of this Agreement by the Buyer
and the completion of the Transactions hereunder have been validly and duly authorized by all the
necessary corporate and administrative bodies. This Agreement has been duly and validly executed by
the Buyer and constitutes a valid and legally binding obligation of the Buyer, enforceable in
accordance with its terms.



CLAUSE 4

ADDITIONAL COVENANTS




     Clause
4.1  Activities of SENECA.



     The Seller warrants that, between the date of execution of this Agreement and the Closing, (i)
the operations of SENECA shall be carry out in the ordinary course of its business in a consistent
manner with its past commercial practices, including maintenance in force of agreement, permits,
consents, leases and insurance policies of such operations, in the understanding that for all the
effects of this Clause 4.1(i), the Seller has revealed to the Buyer the concepts indicated in the
Appendix 4.1, and (ii) shall make its best efforts to maintain the business, operations and good
reputation of SENECA with the clients and providers whose relation is relevant for the business and
operations of SENECA in a consistent manner with its past commercial practices.



     Clause
4.2  Access to Information, Transition Committee.



     Between the date of execution of this Agreement and the Closing Date, the Seller shall (a)
provide to the Buyer a copy of the financial statements and operative reports received by the
Seller and related, in each case, with the operation of SENECA, as close as possible to the date
issued, and (b) give



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access to Buyer, during working hours and having received a request, to all the properties,
books and files and administrative personnel of SENECA and to all the information related thereto.
To carry out an organized transmission of the property and management of SENECA, the Seller will
assure that SENECA will cooperate with a transition committee to be designated by the Seller.



     Clause
4.3  Resignations.



     The Buyer shall indicate in writing to the Seller the directors of SENECA that the Buyer
desires their resignation before the Closing. The Seller shall cause SENECA to obtain the
resignation of said directors, effective upon Closing.



     Clause
4.4  Distribution.



     Without prejudice to Seller’s rights provided in the Clause 4.6, the Seller will not allow,
from the date of execution of this Agreement until the Closing Date, SENECA to declare, make or
separate funds for dividends or distributions to its shareholders.



     Clause
4.5  Delivery of Documentation.



     At the Closing, the relevant entry of the transfer of the Shares in the registry of
shareholders of SENECA and, in each case, the endorsement of the Shares in favor of the Buyer,
shall be made. Furthermore, the Seller shall deliver to the Buyer all the documentation that may
be necessary to evidence the completion of the Transactions, including the documentation that
evidences the transfer of the ownership of the Equipment, the termination of the Lease (and related
letter agreements) and a repayment certificate of the indebtedness owed by SENECA that have been
set off in accordance with Exhibit A of this Agreement, including with respect to the Indebtedness.
By its part, SENECA shall issue a repayment certificate of the indebtedness owed by Seller that
has been set off in accordance with Exhibit A of this Agreement.




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     Clause
4.6  Pending Lease Payment.





     The Parties acknowledge that on December 14, 2006, SENECA delivered to Enelmar S.A., an
affiliate of the Seller, the amount of Bs. 1,961,737,077.50 as guarantee for the payment of the
lease of the fourth quarter of 2006 under the Lease Agreement (the “Pending Lease Payment”). Such
payment is awaiting the governmental authorizations on exchange control to be paid to the Seller or
its affiliate. In the event that SENECA obtains conversion approval from CADIVI not less than five
(5) days before the Closing, SENECA will be able to transfer the amount of the Pending Lease
Payment to the Seller or its affiliate, provided that SENECA has previously received from the
Seller or its affiliate the amount in Bolivars of the Pending Lease Payment. In the event that
SENECA has not obtained the conversion approval from the competent authorities five (5) days prior
to Closing, Buyer shall transfer to Seller at the Closing, only and exclusively in Dollars of the
United States of America the amount of nine hundred twelve thousand four hundred thirty five
Dollars of the United Sates of America and eighty five cents (US$912,435.85) (without interest,
charges, penalties or similar), provided that the Seller or its affiliate transfer, previously or
simultaneously, to SENECA the Pending Lease Payment in Bolivars. Upon receipt from Buyer of the
Pending Lease Payment in Dollars, Seller and its affiliates shall be deemed to have released SENECA
from any liability with respect to the Pending Lease Payment.



CLAUSE 5

CONDITIONS FOR THE CLOSING




     Clause
5.1  Conditions to the Obligation of the Buyer.



     The obligation of the Buyer to formalize and complete the Transactions is subject to the
following conditions precedent:




	 	  a)	 	The Seller shall have complied with all its obligations as set forth herein on
or before the Closing Date, and the representations and warranties of the Seller
contained in this Agreement shall be true and correct in all material respects as of
the date of execution of this Agreement and as of the Closing Date, as if they were
made at that time;




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	 	  b)	 	No facts or circumstances (including the ones that have arisen during the legal
and financial due diligence carried out by the Buyer in relation to SENECA) shall exist
that have resulted or may reasonably result in a material adverse effect in connection
with the value of the Shares, provided that (i) the Price of the Transactions is based
on the Financial Statements and (ii) the Buyer does not have the intention to challenge
the decisions taken by SENECA prior to the Closing, which have been taken under
reasonable commercial criteria;
	 
	 	  c)	 	No material adverse change shall have occurred in the business, financial
condition or the operations of SENECA; and
	 
	 	  d)	 	The Buyer shall have received the resignations of the Directors that have to
resign in accordance with the provided in the Clause 4.3.





     Clause 5.2 Conditions to the Obligation of the Seller.



     The obligation of the Seller to formalize and complete the Transactions is subject to the
warranties and representations of the Buyer contained in this Agreement being true and correct in
all the material aspects as of the date of execution of this Agreement and as of the Closing Date,
as if they were made on that moment.



CLAUSE 6

INDEMNIFICATION




     Clause 6.1 Seller Indemnification.



     The Seller shall protect, defend, indemnify and hold the Buyer and its affiliates (including
to SENECA) and to the relevant representatives, successors and assigns of each one of the above
(jointly referred as, the “Indemnified Parties”) harmless of liability for and against all the
losses, damages, liabilities and claims of any nature such Indemnified Party have



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incurred, endured, suffered, to the extent they arise or are related to any inaccuracy of any
representation made or warranty granted by the Seller in this Agreement, or with the breach of the
Seller to any obligation provided in this Agreement, with the understanding that to enforce this
indemnity, in relation to the representations of the warranties provided for in the Clauses 2.4,
2.5, 2.6, 2.7, 2.8, 2.9, 2.11, 2.12, 2.13, 2.14 and 2.15, the Buyer shall have notified Seller of
the claim within one year from the date of the Closing.



     Clause 6.2 Buyer Indemnification.



     The Buyer shall protect, defend, indemnify and hold the Seller harmless of liability from and
against all the losses, damages, responsibilities and claims of any nature such Indemnified Party
have incurred, endured, suffered, to the extent they arise or are related to any inaccuracy of any
representation made or warrant granted by the Buyer in this Agreement, or the breach by Buyer of
any obligation contained in this Agreement.



     Clause 6.3 Notice and Third Party Claims.



     If any third party notifies Seller or Buyer (as the case may be, an “Indemnified Party”) of
any matter which may give rise to a claim (each, a “Third Party Claim”) for indemnification against
Seller or Buyer (as the case may be, the “Indemnifying Party”), then the Indemnified Party shall
promptly (and in any event within fifteen (15) business days after receiving service of process in
a claim, demand, lawsuit, administrative proceeding or arbitration proceeding with respect to the
Third Party Claim) notify in writing each Indemnifying Party of such circumstance. The Parties
shall cooperate between them and solve any Third Party Claim.




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CLAUSE 7

GENERAL DISPOSITIONS



     Clause 7.1 Fees and Expenses.





     The Party that incurs in fees or expenses in connection with or related to this Agreement or
to the Transactions shall pay and absorb them, whether or not such Transactions are completed, and
SENECA shall not pay fees or expenses of the Seller.



     Clause
7.2 Notices.



     All the notices and other communications that have to be delivered in accordance with this
Agreement shall be in writing and will have effect when received by the addressee on the address or
fax indicated below:



	 	 	 
	If it is to the Buyer:

	 	Petróleos de Venezuela
	 

	 	Av. Libertador, Edif. Petróleos de Venezuela,
	 

	 	Torre Este, La Campiña — Caracas, D.C.
	 

	 	Venezuela.
	 

	 	Attention: Legal Department
	 

	 	Telephone: +58 (0) 212 708 47 90
	 

	 	Fax: +58 (0) 212 708 46 66
	 
	 	 
	If it is to:

	 	CMS Energy Corp.
	 

	 	One Energy Plaza
	 

	 	Jackson, Michigan
	 

	 	Attention: General Counsel
	 

	 	Telephone: (517) 788-0550
	 

	 	Fax: (517) 788-1671






     Clause
7.3  Entire Agreement



     This Agreement embodies the entire agreement among the Parties relating to the transactions
contemplated herein. There are no agreements, representations, or warranties among the parties
other than those set forth or provided for herein. This Agreement supersedes any prior agreements,



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understandings, or letters of intent between or among the Parties with respect to the subject
matter of it.



     Clause
7.4  Applicable Law, Special Domicile and Jurisdiction.



     The interpretation, enforceability and performance of this Agreement shall be governed in
accordance with the laws of the Bolivarian Republic of Venezuela and to all legal effects the
Parties select as special domicile the City of Caracas. The Parties agree to resolve any
controversy or dispute that arises between them in connection with the interpretation and
performance of this Agreement in amicable manner and in good faith. In the event that any
controversy or dispute cannot be resolved amicably, the Parties submit to exclusive jurisdiction of
the Court sitting in the City of Caracas.



     IN WITHNESS WHEREOF, the Seller and the Buyer execute this Agreement through their duly
authorized officers on the date written in the heading.



	 	 	 	 	 
	 	CMS ENERGY CORPORATION

 	 
	 	By:  	/s/ Joseph P. Tomasik
 	 
	 	 	Vice President 	 
	 	 	 	 
	 
	 	PETRÓLEOS DE VENEZUELA, S.A.

 	 
	 	By:  	/s/ Rafael Ramirez
 	 
	 	 	 	 
	 	 	 	 
	 




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Annex A




Indebtedness




SENECA Accounts Payable (Positive Balance) and Accounts Receivable (Negative Balance): CMS de Venezuela

Summary




In Venezuelan Bolivars




As of February 28, 2007




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	2000	 	2001	 	2002	 	2003	 	2004	 	2005	 	2006	 	Total
	Fees
-Services
- Income
	 	 	2.346.630.597,34	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	2.346.630.597,34	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Fees
Expense
	 	 	 	 	 	 	 	 	 	 	(8.031.568,93	)	 	 	 	 	 	 	(4.002.009,60	)	 	 	(40.118,485,00	)	 	 	(61.344.825,50	)	 	 	(113.496.889,03	)
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Business Assets
Tax
	 	 	 	 	 	 	 	 	 	 	(57.034.228,94	)	 	 	(8.147.747 0	)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(65.181.965,92	)
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Income Tax
	 	 	 	 	 	 	26.239.488,92	 	 	 	(246.112.355,89	)	 	 	(94.910.319,81	)	 	 	 	 	 	 	 	 	 	 	(1.157.375.613,00	)	 	 	(1.472.158.799,78	)
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Sale of Fiscal
Credits
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(1.283.129.991,00	)	 	 	(1.283.129.991,00	)
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Travel
Expenses
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(228.748,80	)	 	 	 	 	 	 	 	 	 	 	(228.748,80	)
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Equipment
Leasing
	 	 	1.609.992.000,00	 	 	 	115.271.061,12	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	1.725.263.061,12	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Debt
Capitalization
	 	 	 	 	 	 	(382.076.335,42	)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(382.076.335,42	)
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Amounts
charged to
Account
	 	 	 	 	 	 	 	 	 	 	(346.838.516,85	)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(346.838.516,85	)
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 





 









Table of Contents






	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	2000	 	2001	 	2002	 	2003	 	2004	 	2005	 	2006	 	Total
	Other debts
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	56,68	 	 	 	 	 	 	 	56,68	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Net Balance
	 	 	3.956.622.597,34	 	 	 	(240.565.785,38	)	 	 	(658.016.670,61	)	 	 	(103.058.066,79	)	 	 	(4.230.758,40	)	 	 	(40.118.428,32	)	 	 	(2.501.850.429,50	)	 	 	408.782.458,34	 






SENECA Accounts Receivable (Positive Balance) and Accounts Payable (Negative Balance): Enelmar


Summary




In US Dollars




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	2000	 	2001	 	2002	 	2003	 	2004	 	2005	 	2006	 	2007 *	 	Total
	Fees-Services
	 	 	12.982,11	 	 	 	7.092,00	 	 	 	1.200,00	 	 	 	725,00	 	 	 	3.376,56	 	 	 	3.220,41	 	 	 	11.178.41	 	 	 	 	 	 	 	39.774,49	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Business Assets
Tax
	 	 	 	 	 	 	 	 	 	 	2.146,46	 	 	 	488,37	 	 	 	134,95	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	2.769,78	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Income Tax
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	12.310,99	 	 	 	138.302.48	 	 	 	 	 	 	 	 	 	 	 	150.613.47	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Other expenses
(mail
- miscellaneous
services
- miscellaneous
expenses
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(18.492,86	)	 	 	16,16	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(18.476,70	)
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Enelmar 1%
Capitalization
Rate
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	188.077,43	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	188.077,43	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Adjustments
Commissions
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(13.842,18	)	 	 	(9.950,94	)	 	 	 	 	 	 	3.954,86	 	 	 	(19.838,27	)
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Payment on
Account
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(102.378,30	)	 	 	 	 	 	 	 	 	 	 	(102.378,30	)
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Travel Expenses
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	56,82	 	 	 	 	 	 	 	 	 	 	 	56,82	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Net Balance
	 	 	12.982,11	 	 	 	7.092,00	 	 	 	3.346,46	 	 	 	(17.279,49	)	 	 	190.003,91	 	 	 	29.250,47	 	 	 	11.178,41	 	 	 	3.954,86	 	 	 	240.528,73	 








 




			
	*	 	As of February 28, 2007





 









Table of Contents





SENECA Accounts Payable (Positive Balance) and Accounts Receivable (Negative Balance): CMS Electric & Gas.


Summary




In US Dollars




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	2000	 	2001	 	2002	 	2003	 	2004	 	2005	 	2006	 	2007 *	 	Total
	Fees-Services
	 	 	1.104.193,14	 	 	 	139.223,95	 	 	 	618,25	 	 	 	4.223,33	 	 	 	7.420,68	 	 	 	44.712;49	 	 	 	30.057,81	 	 	 	5.144,20	 	 	 	1.335.593,85	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Travel Expenses
	 	 	56.689,99	 	 	 	5.700,43	 	 	 	9.181,43	 	 	 	 	 	 	 	16.967,52	 	 	 	6.704,66	 	 	 	6.751,81	 	 	 	(1,836.07	)	 	 	100.159,77	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Equipment —
Materials for
Luisa Caceres de
Arismendi Plant
(PLCA)
	 	 	934.301,40	 	 	 	134.089,95	 	 	 	9.742,82	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	1.078.134,17	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Caterpillar (CAT)
Units
	 	 	2.382.967,72	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	2.382.967,72	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	EDEERSA Open
SGC Start-up
Assistance
	 	 	246.676,24	 	 	 	63.550,91	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	310.227,15	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Equipments IT
&T, Software and
Communications
	 	 	128.822,33	 	 	 	72.495,21	 	 	 	13.788,25	 	 	 	 	 	 	 	2900,8	 	 	 	16.677,45	 	 	 	16243,88	 	 	 	4.157,59	 	 	 	252.075,51	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Furniture and
Equipment, Head
Office
	 	 	162.820,83	 	 	 	53.843,45	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	216.664,28	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Insurance
expenses
	 	 	 	 	 	 	692.931,52	 	 	 	653.442,67	 	 	 	 	 	 	 	19.364,18	 	 	 	14.416,15	 	 	 	15.575,30	 	 	 	2.474,39	 	 	 	1.398.204,21	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 





 









Table of Contents






	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	2000	 	2001	 	2002	 	2003	 	2004	 	2005	 	2006	 	2007 *	 	Total
	Other expenses
(mail
- miscellaneous
services-
miscellaneous
expenses
	 	 	138.327,29	 	 	 	20.898,11	 	 	 	3.461,47	 	 	 	 	 	 	 	833,44	 	 	 	487,30	 	 	 	 	 	 	 	 	 	 	 	164.007,61	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Debt Negotiation
	 	 	 	 	 	 	 	 	 	 	(3.333.245,68	)	 	 	(501.139,16	)	 	 	 	 	 	 	(796.742,00	)	 	 	 	 	 	 	 	 	 	 	(4.631.126,84	)
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Adjustments
	 	 	 	 	 	 	 	 	 	 	(18.483,41	)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(18.483,41	)
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Net Balance
	 	 	5.151.798,94	 	 	 	1.182.733,53	 	 	 	(2.661.504,20	)	 	 	(496.915,83	)	 	 	47.486,62	 	 	 	(713.743,95	)	 	 	68.628,80	 	 	 	9.940,11	 	 	 	2.588.424,02	 








 




			
	*	 	As of February 28 2007




 









Table of Contents










Annex “B”




EQUIPMENT DESCRIPTION



Two (2) General Electric Alstrom Frame 6561B gas generating turbines installed at the plant named
Luisa Caseres de Arismendi located in Sector Macho Muerto, Margarita Island Bolivarian Republic of
Venezuela and having the following serial numbers: Unit 1-832 and Unit 2-837, with their
respective step-up transformers.



Generating Units:



Brand: 2 General Electric Alstrom Frame 6561B gas generating turbines. 38,300 kilowatts each:



Model Number: PG6561B



Serial Numbers: 832 and 837



Turbine Type: Gas generating turbines (diesel)



Use: Generate electrical power



Valor estimado: US$11.507.500,00 each



Quality: GE Standard



Condition: Used



Identification: Known in plant as TG-10 and TG-11



Manufacturing Characteristics: Metal Finishing



Present State/Condition: Unit TG-10 has accumulated 54,000 operating hours and Unit TG-11 has
accumulated 50,000 operating hours.



Step-up Transformers:



Brand: Koncar Power



Serial numbers: 307040 y 307041



Power: 30 / 50 MVA



Transformer Ratio: 13.8 / 115 kV



Cooling: OA / FA



Identification: known in Plant as TR-10 and TR-11





 











 





SENECA — Sistema Electrico del Estado Nueva Esparta, C.A.

Independent Auditors’ Report

Financial Statements

For the years ended December 31, 2006 and 2005



SENECA — SISTEMA ELECTRICO DEL ESTADO NUEVA ESPARTA, C.A.



















TABLE OF CONTENTS








	 	 	 
	 	 	Pages
	 
	 	 
	INDEPENDENT AUDITORS’ REPORT
	 	1-2
	FINANCIAL STATEMENTS STATED IN CONSTANT BOLIVARS FOR
THE YEARS ENDED DECEMBER 31, 2006 AND 2005:
	 	 
	 
	 	 
	Balance sheets
	 	3
	 
	 	 
	Statements of operations
	 	4
	 
	 	 
	Statements of changes in stockholders’equity
	 	5
	 
	 	 
	Statements of cash flows
	 	6
	 
	 	 
	Notes to the financial statements
	 	7-26






Deloitte Lara Marambio & Asociados

Torre Corp Banca, Piso 21, Av. Blandfn, La Castellana Caracas 1060 — Venezuela 2



Tel:
(58-212)206 85 03 Fax: (58-212) 206 88 70 www.deloitte.com/ve








INDEPENDENT AUDITORS’ REPORT




To the Stockholders and Board of Directors of

SENECA — Sistema Electrico del Estado Nueva Esparta, C.A.




We have audited the accompanying balance sheets of SENECA — Sistema EI6ctrico del Estado Nueva
Esparta, C.A. as of December 31, 2006 and 2005, and the related statements of operations, changes
in stockholders’ equity, and cash flows for the years then ended, stated in constant bolivars.
These financial statements have been prepared by and are the responsibility of the Company’s
management. Our responsibility is to express an opinion on these financial statements based on our
audits.




We conducted our audits in accordance with auditing standards generally accepted in Venezuela.
Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit
also includes . assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.




As discussed in Note 23 to the financial statements, on February 13,2007 the Company’s main
stockholder signed a memorandum of understanding with Petr61eos de Venezuela, S.A. (PDVSA), which
establishes the bases of negotiation for the sale of its equity participation in the Company.




In our opinion, such financial statements present fairly, in all material respects, the financial
position of SENECA — Sistema Eltctrico del Estado Nueva Esparta, C.A. as of December 31,2006 and
2005, and the results of its operations and its cash flows for the years then ended in conformity
with accounting principles generally accepted in Venezuela.









 









Table of Contents








As indicated in Note 20 to the financial statements, from January 21, 2003, the Venezuelan
Government and die Central Bank of Venezuela agreed to temporarily suspend the trading of foreign
currencies in the country. In connection therewith, they have entered into some Exchange Agreements
and issued certain related standards that rule the Foreign Currency Management Regime and establish
the exchange rate applicable to transactions set forth in such agreements. The Company has taken
proceeds with die corresponding institutions to obtain the foreign currencies required for the
payment of its foreign currency liabilities, and presents a foreign currency asset and liability
position as of December 31, 2006 and 2005 as indicated in Note 20 to the financial statements. To
the date of this report, the acquisition of foreign currencies necessary for foreign transactions
carried out by the Company in the normal course of operations, will be dependent upon: (1) the
approval of all the registrations requested by the related institutions; (2) the availability of
foreign currencies to be established in the application of the standards referred to above; and (3)
the actions to be performed by the Company to obtain either the required foreign currencies not
requested with the related institutions, of those requests that could be rejected by such
institutions; therefore, we do not have sufficient facts in order to determine the effects, if any,
on the financial statements as of December 31,2006.




The translation of the financial statements into English has been made solely for the convenience
of English-speaking readers.




LARA MARAMBIO & ASOCIADOS




Adriana Blanco E.

Public Accountant CPCN° 5416




Caracas — Venezuela, January 20,2007, except for the matter mentioned in Note 23
to the Financial Statements, as to which the date is February 13, 2007




2









Table of Contents






SENECA — SISTEMA ELECTRICO DEL ESTADO NUEVA ESPARTA, C.A.









BALANCE SHEETS AS OF DECEMBER 31, 2006 AND 2005

IN CONSTANT BOLIVARS AS OF DECEMBER 31, 2006

(In thousands of bolivars)







	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	NOTES	 	2006	 	2005
	 	 	 
	ASSET
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	CURRENT ASSETS:
	 	 	 	 	 	 	 	 	 	 	 	 
	Cash and equivalents
	 	1, 2 and 20	 	 	37,554,635	 	 	 	28,155,419	 
	Accounts receivable, net
	 	3 and 20	 	 	34,971,793	 	 	 	34,683,575	 
	Inventories, net
	 	1 and 4	 	 	4,469,046	 	 	 	3,409,775	 
	Prepaid expenses and other current assets
	 	5 and 20	 	 	5,124,620	 	 	 	6,869,076	 
	 	 	 	 	 	 	 
	Total current assets
	 	 	 	 	 	 	82,120,094	 	 	 	73,117345	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	LONG-TERM ACCOUNTS RECEIVABLE
	 	 	13	 	 	 	508,633	 	 	 	566,818	 
	PROPERTY, PLANT AND EQUIPMENT, NET
	 	1 and 6	 	 	330,181,660	 	 	 	337,451,773	 
	DEFERRED CHARGES AND OTHER ASSETS, NET
	 	1 and 7	 	 	1,015,728	 	 	 	194,720	 
	 	 	 	 	 	 	 
	TOTAL
	 	 	 	 	 	 	413,826,115	 	 	 	411,331,156	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	LIABILITIES
AND STOCKHOLDERS’ EQUITY
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	CURRENT LIABILITIES:
	 	 	 	 	 	 	 	 	 	 	 	 
	Trade accounts payable
	 	17,18,19 and 21	 	 	31,056,958	 	 	 	7,838,821	 
	Accounts payable to related companies
	 	13 and 20	 	 	1,967,804	 	 	 	4,612,960	 
	Accrued liabilities
	 	 	9	 	 	 	11,348,238	 	 	 	12,154,695	 
	Other accounts payable
	 	 	 	 	 	 	851,717	 	 	 	490,189	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Total current liabilities
	 	 	 	 	 	 	45,224,717	 	 	 	25,096,665	 
	LONG-TERM LIABILITIES:
	 	 	 	 	 	 	 	 	 	 	 	 
	Accounts payable to stockholder and related companies
	 	13 and 20	 	 	5,952,523	 	 	 	9,716,176	 
	Accrual for severance benefits
	 	 	1	 	 	 	4,444,822	 	 	 	4,294,715	 
	Accrual for pension plan
	 	1 and 8	 	 	5,745,867	 	 	 	477,725	 
	Accrual for contingencies
	 	1 and 22	 	 	858,252	 	 	 	824,676	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Total long-term liabilities
	 	 	 	 	 	 	17,001,464	 	 	 	19,213,292	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Total liabilities
	 	 	 	 	 	 	62,226,181	 	 	 	44,309,957	 
	 	 	 	 	 	 	 
	STOCKHOLDERS’ EQUITY:
	 	 		 	 	 		 	 	 		 
	Restated capital stock (equivalent to nominal capital
stock of Bs. 127,457,58)
	 	 	14	 	 	 	361,894,743	 	 	 	361,894,743	 
	Stockholders’ contribution to be
capitalized
	 	 	 	 	 	 	2,989,215	 	 	 	264,693	 
	Legal reserve
	 	 	 	 	 	 	264,693		 	 	4,861,763	 
	Accumulated surplus
	 	 	 	 	 	 	(13,548,717	)	 	 		 
	Total stockholders’ equity
	 	 	 	 	 	 	351,599,934	 	 	 	367,021,199	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	TOTAL
	 	 	 	 	 	 	413,826,115	 	 	 	411,331,156	 
	 	 	 	 	 	 	 







See notes to the financial statements





3









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SENECA — SISTEMA ELECTRICO DEL ESTADO NUEVA ESPARTA, C.A.





STATEMENTS OF OPERATIONS



FOR THE YEARS ENDED DECEMBER 31, 2006 AND 2005

IN CONSTANT BOLIVARS AS OF DECEMBER 31, 2006





	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	NOTES	 	2006	 	2005
	 	 	 
	OPERATING REVENUES
	 	 	1	 	 	 	104,288,054	 	 	 	129,689,673	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	PURCHASES OF ENERGY AND DIESEL
	 	18 and 19	 	 	40,063,101	 	 	 	39,692,258	 
	 	 	 	 	 	 	 
	GROSS MARGIN
	 	 	 	 	 	 	64,224,953	 	 	 	89,997,415	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	OPERATING COSTS:
	 	 	 	 	 	 	 	 	 	 	 	 
	Operating and maintenance expenses
	 	 	 	 	 	 	50,201,015	 	 	 	56344,865	 
	Administrative expenses
	 	 	 	 	 	 	13,757,092	 	 	 	14,564,153	 
	Commercialization expenses
	 	 	 	 	 	 	14,101,231	 	 	 	17,285,050	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	78,059,38	 	 	 	88,194,068	 
	 	 	 	 	 	 	 
	OPERATING (LOSS) INCOME
	 	 	16	 	 	 	(13,834,385	)	 	 	1,803347	 
	 
	OTHER INCOME AND EXPENSES:
	 	 	 	 	 	 	 	 	 	 	 	 
	Loss from disposal of property, plant and equipment
	 	 	13	 	 	 	(561,135	)	 	 	(666,033	)
	Gam on debt Structuring 
	 	 	7	 	 	 	924,136	 	 	 	1,930,871	 
	 	 	 	 	 	 	 
	Reversal of provisions for
net realizable value of other assets
	 	 	 	 	 	 	363,001	 	 	 	1,264,838	 
	COMPREHENSIVE FINANCING COST:
	 	 	 	 	 	 
	Monetary result for the period 
	 	1 and 15	 	 	(4,016,881	)	 	 	(2,942,910	)
	Loss from sale of
investment securities
	 	 	2	 	 	 	(5,430	)	 	 	(160,671	)
	Exchange loss, net
	 	 	1	 	 	 	2,658,507	 	 	 	(765,610	)
	Financial income, net
	 	 	 	 	 	 	(1,363,804	)	 	 	1,425,126	 
	 
	 	 	 	 	 	 	 	 	 	 	(2,444,065	)
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	(LOSS) INCOME BEFORE INCOME TAXES
	 	 	 	 	 	 	(14,835,188	)	 	 	624,120	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	INCOME TAXES
	 	1 and 12	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	NET (LOSS) INCOME
	 	 	 	 	 	 	(14,835,188	)	 	 	624,120	 
	 	 	 	 	 	 	 







See notes to the financial statements






4











Table of Contents









SENECA — SISTEMA ELECTRICO DEL
ESTADO NUEVA ESPARTA, C.A.


STATEMENTS OF CHANGES IN


STOCKHOLDERS’ EQUITY


FOR THE YEARS ENDED DECEMBER 31, 2006 AND 2005

IN CONSTANT BOLIVARS AS OF DECEMBER 31, 2006 

(In thousands of bolivars)






	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Restated	 	Stockholder’s	 	 	 	 	 	 	 	 	 	Accumulated	 	Total
	 	 	 	 	 	 	Capital	 	contribution to	 	Legal	 	Special	 	surplus	 	stockholders’
	 	 	NOTES	 	stock	 	be capitalized	 	reserve	 	reserve	 	(deficit)	 	equity
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	BALANCES AS OF
DECEMBER 31, 2004
	 	 	 	 	 	 	361,894,743	 	 	 	—	 	 	 	233,487	 	 	 	—	 	 	 	4,268,849	 	 	 	366,397,079	 
	Net income
	 	 	 	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	624,120	 	 	 	624,120	 
	Provision for legal reserve
	 	 	 	 	 	 	—	 	 	 	—	 	 	 	31,206	 	 	 	— 	 	 	 	(31,206	)	 	 	—	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	BALANCES AS OF
DECEMBER 31, 2005
	 	 	 	 	 	 	361,894,743	 	 	 	—	 	 	 	264,693	 	 	 	—	 	 	 	4,861,763	 	 	 	367,021,199	 
	Dividends declared
	 	 	14	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	(3,575,292	)	 	 	(3,575,292	)
	Stockholder’s contribution to
be capitalized
	 	 	14	 	 	 	—	 	 	 	2,989,215	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	2,929,215	 
	Net loss
	 	 	 	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	(14,835,188	)	 	 	(14,835,188	)
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	BALANCES AS OF DECEMBER 31, 2006
	 	 	 	 	 	 	361,894,743	 	 	 	2,989,215	 	 	 	264,693	 	 	 	—	 	 	 	(13,548,717	)	 	 	351,599,934	 







See notes to the financial statements





5









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SENECA — SISTEMA ELECTRICO DEL ESTADO NUEVA ESPARTA, C.A.


STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2006 AND 2005

IN CONSTANT BOLIVARS AS OF
DECEMBER 31, 2006

(In thousadsof bolivars)






	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	NOTES	 	2006	 	2005
	 	 	 
	OPERATING ACTIVITIES:
	 	 	 	 	 	 	 	 	 	 	 	 
	Net (loss) income
	 	1 and 15	 	 	(14,835,188	)	 	 	624,120	 
	Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
	 	 	 	 	 	 	 	 	 	 	 	 
	Comprehensive financing cost-Exchange loss, net
	 	 	 	 	 	 	5,430	 	 	 	765,610	 
	Monetary result for the period
	 	 	 	 	 	 	4,016,881	 	 	 	2,942,910	 
	Depreciation
	 	 	 	 	 	 	20,771,105	 	 	 	20322,112	 
	Accrual for severance benefits
	 	 	 	 	 	 	1,774,630	 	 	 	1*492,957	 
	Allowance for doubtful accounts
	 	 	 	 	 	 	683,779	 	 	 	2316,674	 
	Reversal of provision for realizable value of other asset:
	 	 	 	 	 	 	(924,136	)	 	 	116,820	 
	Allowance for obsolescence
	 	 	 	 	 	 	10091	 	 	 	(4320,178	)
	Changes in operating assets and
liabilities:
	 	 	 	 	 	 	 	 	 	 	 	 
	Decrease (increase) in:
	 	 	 	 	 	 	 	 	 	 	 	 
	Accounts receivable
	 	 	 	 	 	 	(6,498,097	)	 	 	(8,090382	)
	Inventories
	 	 	 	 	 	 	(1,791,155	)	 	 	(1342,154	)
	Prepaid expenses
	 	 	 	 	 	 	814,043	 	 	 	(3,948,140	)
	Increase (decrease) in:
	 	 	 	 	 	 	 	 	 	 	 	 
	Accounts payable
	 	 	 	 	 	 	22355,859	 	 	 	(265378	)
	Accrued liabilities
	 	 	 	 	 	 	1,040.959	 	 	 	2,001338	 
	Accrual for pension plan
	 	 	 	 	 	 	2,179,767	 	 	 	(297,952	)
	Accrual for contingencies
	 	 	 	 	 	 	166,706	 	 	 	(176,639	)
	Severance benefits paid
	 	 	 	 	 	 	(933,396	)	 	 	 	 
	 	 	 
	Net cash provided by operating activities
	 	 	 	 	 	 	28,836,178	 	 	 	11,941,718	 
	 	 	 
	INVESTING ACTIVITIES:
	 	 	 	 	 	 	 	 	 	 	 	 
	Purchases of property, plant and equipment
	 	 	 	 	 	 	(12,878,102	)	 	 	(11,120,198	)
	 	 	 
	Net cash used in investing activities
	 	 	 	 	 	 	(12,878,102	)	 	 	(11,120,198	)
	 	 	 
	FINANCING ACTIVITIES:
	 	 	 	 	 	 	 	 	 	 	 	 
	Cash dividends
	 	 	14	 	 	 	(586,077	)	 	 	 	 
	 	 	 
	Net cash used in financing activities
	 	 	 	 	 	 	(586,077	)	 	 	 	 
	 	 	 
	NET INCREASE IN CASH AND CASH
EQUIVALENTS
	 	 	 	 	 	 	15,371,999	 	 	 	821320	 
	CASH PURCHASING POWER LOSS
	 	 	 	 	 	 	(5,972,783	)	 	 	(3,545,368	)
	CASH AND CASH EQUIVALENTS AT THE BEGINNING OF YEAR
	 	 	 	 	 	 	28,155,419	 	 	 	30,879367	 
	 	 	 
	CASH AND CASH EQUIVALENTS AT THE END OF YEAR
	 	 	 	 	 	 	37,554,635	 	 	 	28,155,419	 
	 	 	 
	MONETARY RESULT FOR THE PERIOD
	 	 	14	 	 	 	1,955,900	 	 	 	602,458	 
	CORRESPONDING TO:
	 	 	 	 	 	 	 	 	 	 	 	 
	Operations
	 	 	 	 	 	 	(5,972,781	)	 	 	(3,545368	)
	Cash
	 	 	 	 	 	 	(4,016,881	)	 	 	(2,942,910	)
	INFORMATION ON TRANSACTIONS NOT GENERATING CASH FLOWS:
	 	 	 	 	 	 	 	 	 	 	 	 
	Stockholder’s contribution to be capitalized
	 	 	 	 	 	 	2,989^15	 	 	 	 	 






See notes to the financial statements






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SENECA — SISTEMA ELECTRICO DEL ESTADO NUEVA ESPARTA, CA.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2006 AND 2005

(In thousands of constant bolivars)







1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES




The Company was incorporated on February 26, 1998 and is mainly engaged in the generation,
non-trunk transmission, distribution and commercialization of electric energy in Nueva Esparta
state and its interconnection with the National Electric System



On June 3,1998, the National Government issued Decree N° 2552 granting SENECA Sistema Eletrico del
Estado Nueva Esparta, C.A., a concession for the exclusive rights to render public electric
services in Nueva Esparta State (See Notes 10 and 17).



Significant
accounting policies —The main accounting policies used by the Company for the
preparation of its financial statements are summarized as follows:




	 	a.	 	Financial statements in constant bolivars — The financial statements are presented in
constant bolivars, for the purpose of eliminating the distortion generated by changes in
the price levels in the Venezuelan economy. The General Price Level Method (G.P.L.) was
used to prepare the financial statements in constant bolivars. This method consists in
substituting the measurement unit used in traditional accounting for a constant currency,
restated at the date of the financial statements. For restating purposes, the “Consumer
Price Index” (C.P.I.) for the metropolitan area of Caracas was used, which is issued by the
Central Bank of Venezuela.





Monetary items included in the balance sheet are presented at nominal value, since they reflect the
purchasing power of the monetary unit to the date of the last balance sheet. Nonmonetary items such
as inventories, deferred charges, and other assets, property, plant and equipment, capital stock
and other income accounts related to nonmonetary items such as depreciations and amortizations are
stated in constant bolivars using the ^ factor from the date of acquisition or origin. Operating
revenues, costs and expenses and other monetary items are stated in constant bolivars, based on the
average inflation factor for the year. The monetary result for the year is calculated applying
during the period die inflation rates to net monetaiy assets and liabilities. This represents the
result from exposure to inflation for holding net monetary assets or liabilities during
inflationary periods (See Note 15).



The 2005 financial statements, previously presented in constant bolivars at that date, are
presented for comparison purposes in constant bolivars as of December 31,2006 through the
application of the annual variation in the Consumer Price Index (C.P.I.).



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The Consumer Price Indexes at the beginning, end and average for the years ended December 31 are as
follows:



	 	 	 	 	 	 	 	 	 
	 	 	2006	 	2005
	 
	 	 	 	 	 	 	 	 
	At the beginning of year
	 	 	525.65	 	 	 	459.65	 
	At the end of year
	 	 	614.83	 	 	 	525.65	 
	Average for the year
	 	 	565.01	 	 	 	497.13	 
	Inflation for the year
	 	 	16.97	%	 	 	14.36	%






b. Cash equivalents — Cash equivalents include investments in time deposits, maturing in three
months or less and National Public Debt Bonds with agreed-upon terms generally under 30 days (See
Note 2).



c. Allowance far doubtful accounts — Allowance for doubtful accounts is determined by management
based on the estimated amount of doubtful accounts over the basis of specific balances and prior
year experience, considering both official and private entities (See Note 3).



d. Inventories — Inventories are accounted for at cost adjusted for inflation, determined under the
average cost method, which does not exceed their recovery value (See Note 4).



e. Property, plant and equipment — Property, plant and equipment included as assets during the
shares transfer process, are presented at acquisition cost determined by appraisals made by
independent appraisers at acquisition date and restated through the application of the
corresponding CPI. Property, plant and equipment subsequently acquired are presented at acquisition
cost adjusted for inflation. Disbursements for maintenance and repairs are charged to income for
the year as incurred, while disbursements for renewals or improvements are capitalized.
Depreciation is calculated using the straight-line method based on the original estimated useful
lives of the assets, as follows (See Note 6):



	 	 	 	 	 
	 	 	Years
	Transmission system

	 	 	7-36	 
	Diesel plant

	 	 	15-30	 
	Distribution system

	 	 	10-25	 
	Metering equipment

	 	 	15-25	 
	Computers and software

	 	 	2-10	 
	Coche plants

	 	 	15-30	 
	Vehicles and trucks

	 	 	5-15	 
	Buildings

	 	 	5-20	 
	Flow Meter

	 	 	5-25	 
	Communication equipment

	 	 	5-15	 
	Office furniture and equipment

	 	 	12	 






The Company includes within property, plant and equipment* inventories of spare parts that will be
used for maintenance or improvement of property, plant and equipment, based on International
Accounting Standard (IAS) 16 Property, plant and equipment.



Constructions in progress include the costs of on-going projects and are depreciated upon beginning
of operations



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f. Deferred charges — Deferred charges mainly correspond to organization and restructuring
expenses, which are amortized over five (5) years or less using the straight-line method and are
restated for inflation considering its original acquisition date (See Note 7).



g. Accrual for severance benefits — Accrual for severance benefits comprises all the liabilities
related to the workers’ vested rights in accordance with the Labor Law and the collective
bargaining agreement.

Additionally, the Company maintains an accrual based on experience to cover this liability set
forth in the current legislation with respect to the employees* stability.



h. Income
taxes—The provision for income taxes represents the sum of the estimated current income
tax payable and deferred income taxes, if significant.



Current income taxes are determined by applying the tax rates as established by the current tax
legislation to net taxable income for the period. Deferred income taxes have been determined in
accordance with Statement of Accounting Principles N° 3 (DPC-3
Accounting for income taxes —
Revised August 2003). In accordance with said statement, deferred tax assets and liabilities should
be recognized, corresponding to the amount of income taxes expected to be recovered or payable on
temporary differences between reported book values of assets and liabilities and their
corresponding tax bases.



Deferred tax assets and liabilities are determined by applying the tax rates established or decreed
under current tax law at the balance sheet date.



The recording of the deferred income tax is subjected to the assurance, beyond a reasonable doubt,
of its realization. Considering current conditions, the Company has not recorded the asset
resulting from deferring the tax effect on the aforementioned temporary differences.



The investment tax credit resulting from investments in property, plant and equipment is treated as
a reduction of the provision for current income taxes (See Note 12).



i. Accrualfor pension plan and other post-retirement benefits — The non-contributory pension plan
and other post-retirement benefits (medical benefit insurance and electric subsidy) are accumulated
in accordance with estimates made by independent actuaries and based on the technical discount rate
used to calculate the obligation for the projected benefit (See Note 8).



j. Accrual for contingencies — Contingencies are situations at each period closing that might
result in a loss for the Company, and the realization of which depends oh the potential occurrence
or non-occurrence of one or more future events. Review of contingent liabilities and creation of
corresponding accruals is the responsibility of the Company’s management, based on the opinion of
its legal counsel and available judgment elements (See Note 22).



k. Fair value of financial instruments — The carrying amount reported on the balance sheets for
cash and cash equivalents, accounts receivable and payable, accruals and other short-term
liabilities approximate their fair values due to the short-term maturity of these financial
instruments. Consequently, these items have been excluded from the disclosure of fair value in the
notes to these financial statements.



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l. Transactions in foreign currency — Transactions in foreign currency are recorded in bolivars
using the exchange rates applicable on the transaction date/Balances in foreign currency are
presented in bolivars and adjusted at the year-end exchange rate. The resulting exchange
differences are recorded in die statement of operations (See Note 20).



m. Revenue recognition — Revenues from energy services are recognized on a cumulative basis in the
period earned. At each month-end, Company’s management estimates and records the unbilled energy
effectively distributed to its subscribers. As of December 31,2006 and 2005, accounts receivable
include Bs. 5,960,304 thousand and Bs. 5,990,906 thousand, respectively, from earned but unbilled
revenues. Once approved, decreases in the price of diesel foel granted by the Ministry of Energy
and Petroleum (MENPET) are recorded as income in their corresponding period and presented as
operating income in the statement of operations (See Note 16).



n. Use ofestimates in the preparation ofthefinancial statements — The preparation of financial
statements in conformity with accounting principles generally accepted in Venezuela requires
management to make estimates and assumptions that affect die reported amounts of assets and
liabilities, their disclosure and the reported amounts of revenues and expenses. Final results
could differ from those estimates.



o. Reclassifications — Certain items of the financial statements as of December 31,2005 have
been reclassified to conform to the 2006 presentation.



Previously reported Reclassification Restructured




	 	 	 	 	 	 	 	 	 	 	 	 	 
	Property, plant and equipment, net
	 	 	315,696,835	 	 	 	21,754,938	 	 	 	337,451,773	 
	Inventories, net
	 	 	25,164,713	 	 	 	(21,754,938	)	 	 	3,409,775	 






For the purpose of complying with International Accounting Standard N° 16, Company’s management has
decided to include inventories of spare parts in Property, plant and equipment, by considering
these are fixed asset components which will only be used for maintenance or improvement of
Property, plant and equipment.



2. CASH AND EQUIVALENTS




As of December 31, cash and equivalents are as follows:



	 	 	 	 	 	 	 	 	 
	 	 	2006	 	2005
	 	 	 
	Cash and banks
	 	 	1,650,750	 	 	 	3,702,455	 
	 
	 	 	 	 	 	 	 	 
	Placements:
	 	 	 	 	 	 	 	 
	Time deposits
	 	 	15,016,000	 	 	 	13,690,898	 
	National Public Debt Bonds (DPN)
	 	 	20,887,885	 	 	 	10,762,066	 
	 	 	 
	 
	 	 	37,554,635	 	 	 	28,155,419	 
	 	 	 





Placements in time deposits are due in 90 days or less with annual interests at current market
rates ranging between 5.50% and 10%, and 6.5 and 12% for the years 2006 and 2005, respectively.
National Public Debt Bonds placements are due in 90 days or less, with annual interests ranging
between 3.30% and 7.25%, and 3.5% and 10.5% for 2006 and 2005, respectively





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During 2005, the Company purchased National Public Debt Bonds (PDB), which were exchanged by
securities denominated in foreign currency and later traded on the secondary market. As a result of
these transactions, losses were generated, which amounted to Bs. 160,671 thousand in 2005, included
in the statements of operations as comprehensive financing cost.







3. ACCOUNTS RECEIVABLE, NET






As of December 31, accounts receivable, net are as follows:




	 	 	 	 	 	 	 	 	 
	 	 	2006	 	2005
	 	 	 
	Accounts receivable from customers, net
	 	 	34,838,892	 	 	 	34,560,287	 
	 
	 	 	 	 	 	 	 	 
	Other
	 	 	132,901	 	 	 	123,288	 
	 	 	 
	 
	 	 	34,971,793	 	 	 	34,683,575	 
	 	 	 





As of December 31,2006 and 2005, accounts receivable from customers include Bs. 22,469,081 thousand
and Bs. 23,106,256 thousand, respectively, corresponding to accounts receivable from government
entities, which are mostly over 360 days (Note 21). The Company reviews pending balances on a
regular basis in order to update debts with these entities and take proceeds for their collection.




Management considers that all receivable balances from official entities will be fully recovered
since they are guaranteed by the Venezuelan Government.




During 2006, the Company collected for street lighting and electric power supply Bs. 1,089,319
thousand and Bs. 974,933 thousand from Macanao and Tubores Municipalities, respectively.




During 2005, the Company collected Bs. 1,225,515 thousand for street lighting and electric power
supply from Antolfn del Campo Municipality and Bs 1,848,127 thousand from Antonio Diaz
Municipality.




As of December 31, 2006 and 2005, allowance for doubtful accounts amounts to Bs. 8,707,081 thousand
and Bs. 9,907,542 thousand, respectively. Likewise, write-offs to accounts receivable amounted to
Bs. 395,764 thousand and Bs. 1,006,363 thousand for 2005.







INVENTORIES, NET






As of December 31, inventories, net are as follows:




	 	 	 	 	 	 	 	 	 
	 	 	2006	 	2005
	 	 	 
	Materials and spare parts for distribution
	 	 	3,556,113	 	 	 	2,233,619	 
	 
	 	 	 	 	 	 	 	 
	Fuels
	 	 	447,959	 	 	 	670,612	 
	Other
	 	 	543,390	 	 	 	544,560	 
	Materials and spare parts for transmission
	 	 	578,398	 	 	 	508,806	 
	 	 	 
	 
	 	 	5,125,860	 	 	 	3,957,597	 
	Less — allowance for obsolescence
	 	 	(656,814	)	 	 	(547,822	)
	 	 	 
	 
	 	 	4,469,046	 	 	 	3,409,775	 
	 	 	 





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5. PREPAID EXPENSES AND OTHER CURRENT ASSETS






As of December 31, prepaid expenses and other current assets are as follows:




	 	 	 	 	 
	2006	 	2005
	 
	1,982,960
	 	 	4,988,076	 
	1,940,925
	 	 	32,020	 
	451,840
	 	 	135,094	 
	543,765
	 	 	1,506,030	 
	205,130
	 	 	207,856	 
	 
	5,124,620
	 	 	6,869,076	 
	 





Guarantee deposits (Note 13)

Prepaid insurance

Advances to suppliers

Prepaid taxes

Other







6. PROPERTY, PLANT AND EQUIPMENT, NET






As of December 31, property, plant and equipment, net are as follows:




	 	 	 	 	 	 	 	 	 
	 	 	2006	 	2005
	 
	 	 	 	 	 	 	 	 
	Transmission system
	 	 	121,664,667	 	 	 	121,248,597	 
	Diesel plants
	 	 	122,168,291	 	 	 	121,930,731	 
	Distribution system
	 	 	96,593,015	 	 	 	93,169,888	 
	Metering equipment
	 	 	51,577,367	 	 	 	47,526,098	 
	Computers and software
	 	 	20,785,462	 	 	 	20,456,639	 
	Coche plants
	 	 	5,726,736	 	 	 	5,681,761	 
	Vehicles and trucks
	 	 	5,145,670	 	 	 	4,935,336	 
	Buildings
	 	 	8,997,324	 	 	 	8,737,055	 
	Flow meters
	 	 	1,655,010	 	 	 	1,655,010	 
	Communication equipment
	 	 	2,586,234	 	 	 	2,582,129	 
	Furniture and office equipment
	 	 	2,155,184	 	 	 	1,998,524	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	439,054,960	 	 	 	429,921,768	 
	Less- accumulated depreciation
	 	 	(142,790,345	)	 	 	(122,423,560	)
	 
	 	 	 	 	 	 	 	 
	 
	 	 	296,264,615	 	 	 	307,498,208	 
	Land
	 	 	2,903,232	 	 	 	2,928,995	 
	Materials and spare parts for generation
	 	 	18,313,123	 	 	 	17,078,284	 
	Materials and spare parts for investment projects
	 	 	4,064,705	 	 	 	4,676,654	 
	Constructions in progress
	 	 	8,635,985	 	 	 	5,269,632	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	330,181,660	 	 	 	337,451,773	 
	 
	 	 	 	 	 	 	 	 






Depreciation expense for the years ended December 31,2006 and 2005 amounts to Bs. 20,771,105
thousand and Bs. 20,222,111 thousand, respectively.




As of December 31,2006 and 2005, fully depreciated assets incorporated to the production process
amount to Bs. 6,719,249 thousand and Bs. 6,268,155 thousand, respectively.




Durante 2006, the Company capitalized Bs. 4,051,268 thousand corresponding to the Metering
Normalization Project, and Bs. 408,945 thousand for Chacopata Electrical Improvement Project




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During 2005, the Company capitalized Bs. 7,445,363 thousand corresponding to the Metering
Normalization Project, Bs. 2,784,187 thousand for the Data Geoprocessing System, Bs. 1,490,087
thousand for 13.8 KV Cells Project and Bs. 4,526,827 thousand corresponding to other projects.




As of December 31, 2006, constructions in process mainly include the Unit N° 5 Generation Turbine
Repair Project for Bs. 2,908,377 thousand, and the Preassembled Cable Project for Bs. 2,094,755
thousand, and Metering Normalization Project for Bs. 1,584,396 thousand.




As of December 31, 2005, construction in progress mainly includes the Normalization and Metering
Projects for Bs. 854,751 thousand and Preassembled Cable Project for Bs. 914,345 thousand.




In December 1999, the Company completed its analysis on the historical value of property, plant and
equipment as of December 31, 1998, resulting from the transfer made during die privatization
process (See Note 10), taking as basis an appraisal made by an Independent Appraisers Firm. This
appraisal allowed for the segregation of property, plant and equipment by business units and define
the basis to adapt to the requirements of the Organic Electric Service Law.




Certain assets amounting to approximately Bs. 5,398,084 thousand have been given as guarantee in
order to comply with the surety bond filed before the Ministry of Energy and Petroleum (See Note
11).







7 DEFERRED CHARGES AND OTHER ASSETS, NET






As of December 31, deferred charges and Other assets, net are as follows:




	 	 	 	 	 	 	 	 	 
	 	 	2006	 	2005
	 
	 	 	 	 	 	 	 	 
	Restructuring expenses
	 	 	8,870,434	 	 	 	8,870,434	 
	Reorganization expenses
	 	 	4,575,819	 	 	 	4,575,819	 
	Investments in real estate and other assets
	 	 	1,015,728	 	 	 	194,720	 
	 
	 	 	 	 	 	 	 	 
	Less — accumulated amortization
	 	 	14,461,981	 	 	 	13,640,973	 
	 
	 	 	(13,446,253	)	 	 	(13,446,253	)
	 
	 	 	 	 	 	 	 	 
	 
	 	 	1,015,728	 	 	 	194,720	 
	 
	 	 	 	 	 	 	 	 





Restructuring expenses correspond to disbursements made by the Company to carry out projects during
start-up for the extension, update and improvement of the company’s administrative and operating
functions, as well as professional fees and start-up expenses. Reorganization expenses correspond
to payments made by virtue of the Company’s privatization process, such as extraordinary labor
indemnities, payroll and other labor benefits for personnel released as part of the reorganization
process implemented by the Company. These expenses have been amortized since January 1,2000 over a
five-year period. As of December 31,2004, deferred charges were folly amortized.




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Investments in real estate correspond to property received during 2003 as part of accounts
receivable recovery and restructuring plan carried out during such year, and are as follows:




	 	 	 	 	 	 	 	 	 
	 	 	2006	 	2005
	 
	 	 	 	 	 	 	 	 
	Three (3) premises at C.C. Jumbo, in Porlamar, Nueva
Esparta State
	 	 	397,735	 	 	 	465,216	 
	 
	 	 	 	 	 	 	 	 
	Twenty-nine (29) apartments at Complejo Turistico
Vacacional Condominio Margarita Caribe Hotel-
Resort, in Porlamar, Nueva Esparta State
	 	 	849,254	 	 	 	993,340	 
	 
	 	 	 	 	 	 	 	 
	Less- provision for decrease in realizable value of other
Assets
	 	 	(231,259	)	 	 	(1,263,836	)
	Total
	 	 	1,015,728	 	 	 	194,720	 






During the year ended December 31, 2004, the Company recorded a provision of Bs. 1,263,836 thousand
to recognize the realizable value of certain assets represented by the premises at C.C. El Jumbo
and the total value of the apartments at Complejo Turistico Vacacional Condominio Margarita Caribe
Hotel-Resort.




During the year ended December 31, 2006, the Company reversed the provision for realizable value of
the apartments located at Complejo Turistico Vacacional Condominio Margarita Caribe Hotel-Resort
for Bs. 924,136 thousand, which is presented in Other income in the statement of operations. The
Company reversed the provisions for die realizable value of the assets aforementioned, based on the
evidence of the fair value of the apartments through the purchase-sale agreement entered into
during December 2006, whereby the Company received an advance of Bs. 300,000 thousand presented in
Other accounts payable.







8 ACCRUAL FOR PENSION PLAN






The Company has a non-contributory pension plan for employees as provided in the collective
bargaining agreement. Benefits under this plan are based on years of service and employees’
30-salary average.




The Company annually contracts an actuarial study prepared by an independent actuarial management
consulting company that includes the benefits corresponding to the collective bargaining agreement
and those established in the Decree-Law for the Partial Amendment to Retirement Regime regulations
in order to determine its obligations for this concept.




As of December 31, the balance of pension plan liabilities, net is as follows:




	 	 	 	 	 	 	 	 	 
	 	 	2006	 	2005
	 	 	 
	Obligation from projected benefit
	 	 	7,993,953	 	 	 	7,896,972	 
	 
	 	 	 	 	 	 	 	 
	Unrecognized net transitory obligation (UNTO)
	 	 	(261,875	)	 	 	(481,342	)
	Unrecognized gain (loss)
	 	 	(1,986,211	)	 	 	(3,037,905	)
	 	 	 
	Values recorded in books to support the plan
	 	 	5,745,867	 	 	 	4,377,725	 
	 	 	 





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The estimated cost for the years ended September 30,2006 and 2005 (actuarial study period) is as
follows:




	 	 	 	 	 	 	 	 	 
	 	 	2006	 	2005
	 
	Service cost at year-end
	 	 	449,451	 	 	 	478,608	 
	 
	 	 	 	 	 	 	 	 
	Interest cost
	 	 	1,131,233	 	 	 	1,112,810	 
	Amortization of unrecognized net transitory obligation
(UNTO)
	 	 	149,644	 	 	 	175,034	 
	Amortization of unrecognized loss
	 	 	697339	 	 	 	829,048	 
	 
	 
	 	 	2,427,667	 	 	 	2,595,500	 
	Expected payment of benefits
	 	 	216,230	 	 	 	298,174	 






For the years ended December 31,2006 and 2005, the Company recorded pension plan expenses for Bs.
2,204,552 thousand and Bs. 2,049,072 thousand, respectively.







9. ACCRUED LIABILITIES






As of December 31, accrued liabilities are as follows:




	 	 	 	 	 	 	 	 	 
	 	 	2006	 	2005
	 	 	 
	Municipal taxes payable
	 	 	6,683,631	 	 	 	8,359,280	 
	 
	 	 	 	 	 	 	 	 
	Allowance for production and service quality
	 	 	1,646,867	 	 	 	1,540,119	 
	Accounts payable for tax inspection rate
	 	 	957,604	 	 	 	1,226,517	 
	Contribution to the Organic Law of Science,
	 	 	 	 	 	 	 	 
	Technology and Innovation
	 	 	1,078,715	 	 	 	 	 
	Other provisions
	 	 	810,643	 	 	 	924,484	 
	Payroll and contributions payable
	 	 	170,778	 	 	 	104,295	 
	 	 	 
	 
	 	 	11,348,238	 	 	 	12,154,695	 
	 	 	 








PRIVATIZATION AND CONCESSION AGREEMENT






On September I5, 1998, the Company’s privatization process was carried out through a public
offering of Class A shares of SENECA — Sistema Eldctrico del Estado Nueva Esparta, C-A as a result
of this process Energfa Etectrica de Margarita, S.A. (ENELMAR) was granted the share. On October
19, 1998, Enelmar initiated management of Seneca.




The concession contract mainly provides, among others, for the following terms:




a. The concession for the rendering of electric public utility in Nueva Esparta state will be
ruled by the terms of such contract and Decrees N° 138 of the Concession Law on Public Works and
National Public Services; Decree N° 368 on Standards for Determining Electric Sector tariffs; and
Decree No. 1558 on Standards for the Electric Sector Regulation, of which only Articles 69 and 71
are in effect, since this decree was substituted by the Electric Service Law (See Note 17).




15









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b. The concession for the rendering of electric public utility in Nueva Esparta state will be in
effect for 50 years. Exclusive rights of the concession to cany out generation and
commercialization activities by SENECA — Sistema Etectrico del Estado Nueva Esparta, C.A. will be
for a minimum period of 10 years from the granting date.




c. The Company will not be able to transfer, convey or alienate the rights granted by the
concession contract, without the prior authorization of the Venezuelan Government.




d. The concession establishes that the Company must render continuous, reliable and uninterrupted
services at agreed-upon quality levels. Also, it shall make investments and adopt the necessary
measures to guarantee the supply of electricity services, arid compliance with environmental
laws.




e. The Company will apply the tariffs approved by the Venezuela Ministry of Energy and Petroleum,
in accordance with the Tariff Regime included in the concession contract from January 1,1999
through 2002. The application of the tariff conditions for the 2003-2006 period, contemplated in
this contract, has not been approved yet (See Note 17).







11 SURETY BOND






In order to guarantee the performance of the obligations assumed by SENECA by virtue of the
concession contract (see Note 10), the Company must file a surety bond before the Venezuelan
Ministry of Energy and Petroleum. The bond shall be granted by a financial institution or an
insurance company. Its value is equivalent to 1% of the value of net revalued fixed assets of the
Company. The bond shall be renewed on an annual basis and filed with the Ministry of Energy and
Petroleum within the first ninety (90) days following the beginning of each economic period.




As of December 31, 2006, the Company maintains a surety bond for a Bs. 2,699,042 thousand to
guarantee the Ministry of Energy and Petroleum its compliance with the obligations assumed by the
Company under the concession contract (See Note 22).







12. TAX REGIME






Income Taxes




Venezuelan tax legislation considers an annual calculation of a regular adjustment for inflation of
its nonmonetary items, which is included in the reconciliation of the net taxable income as taxable
or deductible, as appropriate. With respect to property, plant and equipment and other similar
assets, this regular adjustment for inflation is either depreciated or amortized over the remaining
useful tax life of the respective assets. For inventories, this adjustment is considered in the
cost of sale of products upon consumption or sale. The total regular adjustment for the year is
determined through the algebraic sum of the various adjustments for inflation of each nonmonetary
item. This total reconciling item is considered to be a permanent difference for the effects of the
deferred income tax for the year.




In conformity with such legislation, taxpayers subject to income taxes that cany out transactions
with foreign related parties must determine their income from exports, and costs for goods and
services from foreign related parties, in accordance with certain methods set forth in such
legislation. Management conducted the transfer pricing study required to document such foreign
transactions, and it did not result in important differences with regard to the amounts included
for determining the net taxable income for the years ended December 31, 2006 and 2005.




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Likewise, in conformity with such legislation, die Company can cany forward operating tax losses,
other than losses from the tax adjustment for inflation for up to three (3) years subsequent to the
period in which they were incurred/The deductible tax effect that is not offset with the adjustment
for inflation can be carried forward up to the following year after itisincurred. As of December
31, 2006, the Company does not maintain tax loss carryforwards applicable to future taxable income.




In accordance with the Income Tax Law published in Extraordinary Official Gazette N° 5390 dated
October 22,1999, the Company can credit ten percent (10%) of new investments carried out during
five (5) years after its issuance, and these can be carried forward up to three (3) years following
the period in which they were incurred. Such Law was subsequently amended and published on
Extraordinary Official Gazette N° 5566 dated December 28, 2001. Management considers that this last
amendment sets forth a five (5) year term, from the date it became effective, for the application
of investment tax credits — i.e. all investments carried out by the Company until December 28,
2006, may be considered for the effects of credit calculation for the fiscal years ended December
31, 2005 and 2006, Based on the matters aforementioned, as of December 31,2006, the Company
maintained unutilized investment tax credits applicable to future income taxes for Bs. 2,158,745
thousand, expiring in 2007.




Decree-Law N° 3266, whereby the Business Assets Tax Law was issued, published in the Extraordinary
Official Gazette of the Bolivarian Republic of Venezuela N° 4654, dated December 1, 1993, was
derogated in Official Gazette N° 38002, dated August 17, 2004, as well as the other standards
issued during the development of this Law, effective since September 1, 2004.







13. TRANSACTIONS WITH STOCKHOLDERS AND RELATED COMPANIES






During years 2006 and 2005, the Company carried out the following significant transactions with its
stockholders and related companies, during the normal course of operations:




	 	 	 	 	 	 	 	 	 
	 	 	2006	 	2005
	Equipment leasing
	 	 	8,538,843	 	 	 	9,531,718	 
	Transfer of tax credits
	 	 	2,445,790	 	 	 	—	 
	Accounts payable restructuring
	 	 	—	 	 	 	1,930,871	 
	Professional fees
	 	 	74,866	 	 	 	241,243	 
	Insurance premium charge
	 	 	39,429	 	 	 	22,972	 






In December 2000, the Company entered into a lease agreement with CMS Electric and Gas, LLC, a
related company, for Frame 6B assets. Such agreement is effective for eight (8) years and is
subject to quarterly installments of approximately US$912,436 each, until 2008.




During 2006, the Company transferred to its stockholder CMS Venezuela, C.A., through balance
compensation, Bs. 2,445 million in tax credits.




Insurance premium and fee charges correspond to reimbursable expenses.





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As a result of these and other less significant transactions, the following balances
receivable and payable are as follows:




	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	2006	 	2005	 	 	 	 
	 	 	 
	Long-term accounts receivable: Energfa Electrica
de Margarita, S.A. (ENELMAR)
	 	 	508,633	 	 	 	566,818	 	 	 	 	 
	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Short-term accounts payable:
	 	 	 	 	 	 	 	 	 	 	 	 
	CMS Enterprises Company
	 	 	1,959,754	 	 	 	4,586,821	 	 	 	 	 
	CMS Operating, LLC
	 	 	5,401	 	 	 	23,568	 	 	 	 	 
	CMS Argentina, S.A.
	 	 	2,649	 	 	 	2,571	 	 	 	 	 
	 	 	 
	Long-term accounts payable:
	 	 	1,967,804	 	 	 	4,612,960	 	 	 	 	 
	CMS Electric and Gas, LLC
	 	 	5,543,740	 	 	 	6,311,718	 	 	 	 	 
	CMS Venezuela, S.A.
	 	 	408,783	 	 	 	3,404,458	 	 	 	 	 
	 	 	 
	 
	 	 	5,952,523	 	 	 	9,716.176	 	 	 	 	 
	 	 	 





Long-term accunts receivable from Energia Electrica de Margarita, S.A. (ENELMAR) correspond to
payments made by the Company on behalf of a stockholder for taxes and equity capitalization .
contributions.”




During 2005, CMS Venezuela, S.A. (stockholder) and CMS Electric and Gas, LLC restructured the
accounts payable that the Company maintained with both companies. As a result from these
transactions, income amounting to Bs. 1,930,871 thousand was generated, which is presented in the
statements of operations as part of other income and expenses




During 2004, the Company entered into an agreement for guarantee deposits in bolivars in order to
ensure payment of its foreign currency obligations with related companies. As of December 31, 2006
and 2005, these guarantee deposits amounted to Bs. 1,961,737 thousand and Bs. 4,589,140 thousand,
respectively, and are recorded as prepaid expenses and other current assets (See Note 5).







14. STOCKHOLDERS* EQUITY






Capital stock and stockholders’ contribution to be capitalized




As of December 31,2006 and 2005, the Company’s subscribed and paid-in capital stock is as follows:




	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Number of	 	Legal capital
	Stockholders	 	Class	 	shares	 	stock
	 
	Energia Electrica de Margarita, S.A.
(ENELMAR)
	 	 	A	 	 	 	58,961,699	 	 	 	35,682,834	 
	Fideicomiso BANDES
	 	 	B	 	 	 	3,038,646	 	 	 	1,838,948	 
	Labor Partcipation Program
	 	 	B	 	 	 	13,807,554	 	 	 	8,356,148	 
	Fideicomiso BANDES
	 	 	C	 	 	 	8,423,100	 	 	 	5,097,548	 
	CMS VENEZUELA, S.A.
	 	 	D	 	 	 	1	 	 	 	76,481,880	 
	 
	 	 	 	 	 	 	84,231,000	 	 	 	127,457,358	 









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	•	 	Class A shares owned by Energfa Etectrica de Margarita, S.A. (ENELMAR), acquired through the
privatization process
	 
	•	 	Class B shares owned by employees and former employees of SENECA, as well as of CADAFE -
ELEORIENTE; these shares were granted in trust to Banco de Desarrollo Econ6mico y Social de
Venezuela (BANDES) for the Labor Participation Program pursuant to provisions of the privatization
process.
	 
	•	 	Class C shares owned by CADAFE, granted in trust to Banco de Desarrollo Econdmico y Social de
Venezuela (BANDES), for the Civil Participation Program, pursuant to provisions of the
privatization process.
	 
	•	 	Class D shares owned by CMS Venezuela, S.A.





As of December 31, 2003, the Company maintained Bs. 34,746,604 thousand (Bs. 21,795,288 thousand,
in constant bolivars as of December 31, 2003) as stockholder’s contributions to be capitalized.
Later, at an Extraordinary Stockholders’ Meeting held on December 10, 2004, it was agreed to
increase the Company’s legal capital stock to Bs. 135,908,532 thousand, through the capitalization
of the stockholder’s contribution of CMS Venezuela, C.A, amounting to Bs. 34,746,604 thousand (Bs.
21,795,288 thousand, in constant bolivars as of December 31, 2003), thus maintaining the number of
shares and increasing the value of “Class D” shares owned by CMS Venezuela, S.A. In addition, in
the same Meeting, it was agreed to reduce capital stock in Bs. 11,518,768 thousand (Bs. 8,451,169
thousand, in constant bolivars as of December 31, 2003) to reach Bs. 127,457,358 thousand, in order
to cover the accumulated deficit as of December 31, 2003, thus maintaining the number of shares and
reducing the value of each share according to its class on a proportional basis.




At an Extraordinary Stockholders Meeting held on April 26,2006, it was agreed to declare and pay a
dividend corresponding to the period ended December 31,2004 of Bs. 3,116,547 thousand (Bs.
3,575,292 thousand in constant bolivars) based on the number of shares subscribed and paid as of
December 31,2005, from which Bs. 510,879 thousand (Bs. 586,080 thousand in constant bolivars) were
paid in cash to the class “B” stockholders enrolled in the Labor Participation Program. In
addition, Bs. 2,605,668 thousand (Bs. 2,989,215 thousand in constant bolivars) were recorded as
stockholders’ contributions to be capitalized in favor of the rest of the stockholders. The cash
dividend was transferred to BANDES for its later distribution to the aforementioned stockholders.




Legal Reserve




The Commercial Code sets forth a provision of 5% of companies’ net income for establishing the
legal reserve, until it reaches at least 10% of capital stock. This reserve cannot be distributed
as dividends.




Special reserve




At an Extraordinary Stockholders’ Meeting held on December 7,2001, a special reserve was created
with cash received from Banco de Desarrollo Econ6mico y Social (BANDES); these funds were related
to a labor liabilities’ settlement.







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At an Extraordinary Stockholders’ Meeting held on December 10,2004, it was agreed to transfer the
special reserve included in stockholders’ equity, which amounts to Bs. 10,793,442 thousand (Bs.
6,770,336 thousand, in constant bolivars as of December 31,2003) to the accumulated surplus account
included in stockholders’ equity




Undistributed earnings




The Company’s stockholders consider die financial statements stated in constant bolivars for the
purpose of approvals set forth in the bylaws and the Venezuelan Commercial Code.







15 MONETARY RESULT FOR THE PERIOD






The monetaiy result for the years ended December 31, is as follows:




	 	 	 	 	 	 	 	 	 
	 	 	2006	 	 	2005	 
	NET MONETARY ASSET POSITION, at the beginning
of year
	 	 	26,966,334	 	 	 	24,742,257	 
	Increase due to:
	 	 	 	 	 	 	 	 
	Net sales
	 	 	101,424,561	 	 	 	126,420,992	 
	Other income
	 	 	2,863,493	 	 	 	5,199,552	 
	Financial income
	 	 	2,658,508	 	 	 	1,425,126	 
	Reversal of monetary asset provision
	 	 	924,136	 	 	 	 	 
	Sale of property, plant and equipment
	 	 	3,537	 	 	 	 	 
	Provision for disposal of property, plant and equipment
	 	 	—	 	 	 	662,321	 
	Sale of materials
	 	 	—	 	 	 	79,978	 
	 
	 	 	 	 	 	 
	 
	 	 	107,874,235	 	 	 	133,787,969	 
	 
	 	 	 	 	 	 	 	 
	Decrease due to:
	 	 	 	 	 	 	 	 
	Operating and maintenance expenses
	 	 	29,510,514	 	 	 	28,742,588	 
	Purchases of diesel fuel
	 	 	27,187,330	 	 	 	28,166,279	 
	Purchases of inventories
	 	 	17,289,593	 	 	 	28,361,857	 
	Purchase of energy
	 	 	12,653,117	 	 	 	11,562,457	 
	Administrative expenses
	 	 	10,753,964	 	 	 	11,091,057	 
	Commercialization expenses
	 	 	10,499,495	 	 	 	13,354,984	 
	Acquisition of property, plant and equipment
	 	 	1,503,028	 	 	 	3,367,505	 
	Additions to projects and works
	 	 	3,845,492	 	 	 	3,047,974	 
	Exchange losses
	 	 	5,430	 	 	 	765,610	 
	Loss from investment securities
	 	 	—	 	 	 	160,671	 
	 
	 	 	 	 	 	 
	 
	 	 	113,247,963	 	 	 	128,620,982	 
	ESTIMATED NET MONETARY ASSET POSITION, at
year end
	 	 	21,592,605	 	 	 	29,909,244	 
	ACTUAL NET MONETARY ASSET POSITION, at year end
	 	 	17,575,724	 	 	 	26,966,334	 
	 
	 	 	 	 	 	 
	Monetary result for the period
	 	 	(4,016,881	)	 	 	(2,942,910	)
	 
	 	 	 	 	 	 








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16. OPERATING INCOME






During 2006, the Company did not obtain from the Ministry of Energy and Petroleum, reductions in
the price of diesel fuel corresponding to such period. These reductions would have partially offset
the non-application and/or partial application of the price adjustment factor (PAF) of electric
energy, set forth in the Joint Resolution of the Ministry of Production and Commerce N° 089 and
that of the Ministry of Energy and Petroleum N° 455, dated April 3, 2002 (Note 16). The financial
statements include an operating loss amounting to Bs. 13,834,3 85 thousand and accumulated deficit
at that date of Bs. 13,548,717 thousand, originated by non-received reductions. Currently,
Company’s management is in the process of evaluating the impact of this situation in the business;
future.




As of December 31, 2006, the Company has issued credit notes to Deltaven (diesel fuel supplier) of
Bs. 18,908,400 thousand, which are presented in Trade accounts payable.







17 REGULATION AND TAFIFFS






The Venezuelan Electric Industry is ruled by the Electric Service Law, enacted on December 31,
2001, published in Extraordinary Official Gazette of the Bolivarian Republic of Venezuela N° 5568.
This law substitutes the previous Electric Service Decree-Law published in Official Gazette of the
Bolivarian Republic of Venezuela, N° 36791 dated September 21,1999, and other legal provisions
contrary to this law. The Law provides for the following:





	•	 	The legal, accounting and managerial segregation of the functions for generation, transmission,
distribution and commercialization.
	 
	•	 	The opening to competition in generation and commercialization activities.
	 
	•	 	Access to the national energy distribution and transmission system network to other electric
service agents, as well as large consumers. Its use shall be compensated according to this law and
the regulations issued by the National Commission of Electric Power on this matter.
	 
	•	 	The creation of an unregulated wholesale electric power market for generators, distributors and
large clients, especially those engaged in generation and distribution activities.
	 
	•	 	The creation of regulatory entities such as the National Commission of Electric Power authorized
by the Ministry of Energy and Petroleum (formerly, Ministry of Energy and Mines), to be responsible
for the regulation, supervision, inspection and control of electric service activities and the
National Center of Electric System Management and the Wholesale Electric Power Market.
	 
	•	 	Elimination of Article 120, related to the applicability of contractual conditions in cases of
concessions granted.





The Electric Service Law provided for the gradual implementation of some of its resolutions,
indicating January 31, 2003 as the deadline for the legal, accounting and managerial segregation of
generation, distribution and commercialization functions. Nevertheless, on November 6, 2002, this
deadline was extended by the Ministry of Energy and Petroleum through January 31, 2004 in
accordance to Resolution N° 303. To date, the Regulator has not required electric sector companies
to fully comply with the segregation of activities set forth for January 31, 2004. The segregation
of







21









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activities in the electric service in Venezuela, including the opening for competition in certain
activities might have an effect on revenues and consequently on the company’s assets values. To
date, such effect cannot be reasonably estimated.




The regulations related to the Venezuelan Electric Service Law were published on the Extraordinary
Official Gazette N° 5510 of the Bolivarian Republic of Venezuela on December 14, 2000. The
objective of this regulation is to develop the provisions of the Law ruling the electric service at
national level, including generation, transmission, national electric system management,
distribution and commercialization activities of electric power and energy sectors, as well as
performance of the agents involved in the electric service.




The National Electric System Management Center (CNGSE) was officially created by the National
Government through Decree N° 5026 of the Presidency of the Republic, published in Official Gazette
N° 38576, dated December 1, 2006. The main functions of the CNGSE are the control, supervision, and
coordination of the joint operation of the National Electric System Generation and transmission
Resources. The CNGSE is a state Company under the status of a Limited Liability Company with equity
participation of the Bolivarian Republic of Venezuela through the Ministry of Energy and Petroleum
(MENPET).




Despite of its official incorporation, the CNGSE has not started operations. In this regard, the
Organic Electric Service Law (LOSE) sets forth that until CNGSE’s start-up, the operation and
control of generation and transmission activities of the National Electric system will continue to
be performed by the Electric System Operation Office (OPSIS) under the terms established in the
Interconnection Agreement entered into^ CADAFE; ENELVEN and EDC on December 1, 1988.




Tariff regime




The Electric Service Law and its regulations provide for the economic regime applicable to the
rendering of electric services. Likewise, the Concession Agreement entered into between the
Bolivarian Republic of Venezuela and SENECA clearly defines terms and methodology to be applied for
the preparation of subsequent tariff conditions to which it was originally authorized.




In the case of SENECA, on December 30, 1998, according to Official Gazette N° 36612, the Ministry
of Energy and Petroleum established the tariffs that the Company should apply to electric energy
consumption beginning January 1,1999. It also included applicability conditions and the methodology
for their subsequent adjustment and modification for a term of up to four years from that date.




On February 6, 2003, the National Government issued Decree No. 2304, whereby prices of certain
goods and services, including power supply, are frozen. Subsequently, on May 5, 2003, a joint
Resolution by the Ministry of Energy and Petroleum and the Ministry of Production and Commerce was
published in Official Gazette, which temporarily suspends tariff increases derived from the FAP
application. However, Article 2 of this resolution sets forth that MENPET might exceptionally
approve the application of such factor.




On February 9, 2004, MENPET informed SENECA about the incorporation of its information in the
tariff calculation process in order to evaluate its future application. This should generate the
benefit of applying the same tariff methodology in all companies within the sector.






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Pursuant to Articles 11 and 12 of Official Gazette N° 36612 and communications received from
MENPET, the Company applied adjustments related to the application of gas and energy charges
(CACE). In connection with the application of the price adjustment factor (FAP), the Company has
applied the values authorized by MENPET beginning August 2003. These values did not maintain tariff
levels in real terms; therefore, until 200S, the Company has received partial compensation in
diesel fuel prices, thus obtaining from the Ministry of Energy and Petroleum reductions in the
price of diesel fuel corresponding to 2006 (See Note 16).




During 2006 and 2005, in order to maintain established tariff levels in real terms, management
periodically carried out communications with the regulator as to the appropriate current tariff
that should be applied if regulation were followed.







18. ELECTRIC POWER SUPPLY CONTRACT






On July 1998, the Company entered into a contract with CVG — Electrificacion del Caroni, C.A. (CVG
EDELCA). CVG commits to render services of supply and transportation of electric power to SENECA -
Sistema Electrico del Estado Nueva Esparta, C.A, through die payment of pre-established tariffs per
each kilowatt of energy transmitted. This contract is effective for twenty (20) years, and clause
N° 25 provides for a minimum annual charge, which has not been applied by the parties.







19. FUEL SUPPLY CONTRACT






On July 27, 1998, the Company entered into a contract with Deltaven Sociedad Mercantil, a
subsidiary of PDVSA. PDVSA committed therethrough to provide fuel for the generation of
thermoelectricity for the internal consumption in Nueva Esparta state. The fuel price is set by the
related authorities. This contract will be in effect for five (5) years from the date of
subscription, and it will be automatically renewed for equal and consecutive periods. Consequently,
such contract will be in effect until 2008.







20. ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCY






Since 2003, the Venezuelan Government and the Central Bank of Venezuela have entered into several
Exchange Agreements that rule the Foreign Currency Management Regime and establish the exchange
rate applicable to transactions set forth in such agreements. Since then, the Foreign Exchange
Administration Commission (CADIVI) is in charge of coordinating, administrating, controlling and
establishing the requirements, procedures and restrictions that the execution of said agreement
would require.




CADIVI has issued certain rules related to the registrations, guidelines, requirements and
conditions related to the foreign currency administration. The Company has taken all the necessary
proceeds to obtain the foreign currencies required for payment of its foreign currency liabilities
amounting to US$8,299,891 as of December 31, 2006.




The acquisition of foreign currencies necessary for foreign currency transactions carried out by
the Company in the normal course of operations will be dependent upon: (1) the approval of all the
registrations requested by the related institutions; (2) the availability of foreign currencies to
be established in the application of the standards referred to above; and (3) the actions to be
performed by the Company to obtain either the required foreign currencies not requested with the
related institutions, or those requests rejected by such institutions.







23









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A summary of assets and liabilities denominated in foreign currencies as of December 31,2006 and
2005, recorded in bolivars at the official exchange rate at year-end of Bs. 2,150 per US$1 (in US
dollars) are as follows:




	 	 	 	 	 	 	 	 	 
	 	 	2006	 	 	2005	 
	 
	ASSETS:


	Cash and equivalents
	 	 	312,124	 	 	 	841,958	 
	Advances to suppliers
	 	 	 	 	 	 	11,330	 
	Guarantee deposits
	 	 	45,268	 	 	 	148,765	 
	 
	Total assets
	 	 	357,392	 	 	 	1,002,053	 
	 
	 	 	 	 	 	 	 	 
	LIABILITIES:

	Trade accounts payable
	 	 	1,626,100	 	 	 	1,186,671	 
	Accounts
payable to stockholder and related companies
	 	 	915,258	 	 	 	1,834344	 
	Total liabilities
	 	 	2,541,358	 	 	 	3,021.015	 
	Excess of liabilities over assets
	 	 	2,183,966	 	 	 	2,018,962	 
	 








21. CONCENTRATION OF CREDIT RISKS






Financial instruments that partially subject the Company to concentrations of credit risks mainly
consist of short-term investments in time deposits and investments in National Public Debt Bonds
with terms agreed for less than 30 days and trade accounts receivable. The Company places its
short-term investments in different financial institutions, and which excludes risks on price
and/or conditions. Concentration of credit risk regarding trade accounts receivable is limited due
to the Company’s significant number of clients; however, as of December 31, 2006 and 2005,
government clients represent approximately 64% and 67%, respectively, of the Company’s portfolio
(See Note 3). As of December 31, 2006 and 2005, the Company does not have any additional
significant concentration of credit risk.







22. CONTINGENCIES AND COMMITMENTS






Contingencies




During 2006, certain claims have been filed against the Company by former employees enrolled in the
labor participation program, which are mainly related to difference in severance benefits payments
amounting to Bs. 2,741 million. Management estimates that the outcome of thesis claims would not be
in favor of the former employees; therefore the Company has not recorded any provision in the
financial statements for this concept (See Note 1 j)




Certain claims related to labor indemnities, moral and material damages, among others, have been
filed against the Company. Management estimates that if the results of such claims were adverse,
they would not have any material effect on the financial statements. Provisions have been created
pursuant to available information regarding the possibility of success of such cases.




Bonds and guarantees granted




The Company currently maintains a surety bond in order to guarantee the Ministry of Energy and
Petroleum, obligations assumed by virtue of the concession agreement (See Note 11).







24









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Commitments




In December 2005, the Company entered into a Cooperation Agreement with Compania Anonima de
Administracion y Fomento Electrico (CADAFE). CADAFE will install, operate and maintain a thermal
generation plant on Margarita Island, and the Company will buy the energy generated thereof
Likewise, CADAFE and the Company commit to enter into an electric power supply contract effective
for 10 years under the terms and conditions agreed upon by the parties, in maximum six (6) months
from the date of execution of the partnership agreement.




However, due to changes in the sector guidelines, a new cooperation agreement is being discussed
under similar terms and conditions to the aforementioned, as well as a commodatum contract for an
area located at Luisa Caceres de Arismendi Plant, where thermal generation plants will be
installed, operated and maintained by the corresponding government entity.




In December 2005, the Company also entered into an agreement with Compania Anonima de
Administracion y Fomento Eletrico (CADAFE) for the leasing of a turbine compartment (cigar), which
is fully and exclusively owned by the latter. The annual installment will amount to Bs. 40,000
thousand, which shall be paid upon installation of the module in Luisa Ciceres de Arismendi Plant.
When the agreement term ends, the Company commits to return the compartment to CADAFE in its
current conditions. At year-end 2006, the module was incorporated to Unit N° 5, which is currently
undergoing pre-dperating tests prior to its start-up, expected during January 2007.







23 SUBSEQUENT EVENTS




FUNDELEC




In January 2007, the Company entered into a Cooperation Agreement with Fundaci6n para el Desarrollo
del Sector E16ctrico (FUNDELEC) for the purpose of installing, operating and maintaining thermal
generation units with their respective fuel supply, protection and communications system in Nueva
Esparta State, assumed by FUNDELEC. SENECA, on the other hand, will receive, in conformity with the
quality, continuity and reliability specifications, energy generated by FUNDALEC for its
distribution and conmierci^izatiott. FUNDELEC and SENECA commit to enter into an electric energy
supply agreement in no later than six (6) months since the Agreement execution, which will be in
effect for five (5) years under the terms and conditions agreed upon by the parties.




Based on this agreement, SENECA gives FUNDELEC in commodatum or loan for use, at all risks, a real
estate for five (5) years, destined to the installation of the generation units mentioned in Clause
III of the Cooperation Agreement between FUNDELEC — SENECA aimed at increasing Thermal Generation
in Nueva Esparta state and meet the increasing local customers’ demand.




Presidential announcements on January 8, 2007




The President of the Bolivarian Republic of Venezuela announced through the local media, the
nationalization, among others, of the telecommunication, electricity and petroleum sectors, which
had been formerly privatized, by considering them strategic sectors.







25









Table of Contents









Enabling Law




On February 1, 2007, the National Assembly passed a Law enabling the President of the Republic to
issue legislative decrees on certain specific matters for an 18-month period since the publication
of said Law in the Official Gazette of the Bolivarian Republic of Venezuela. The purpose of this
law is to rule on different matters related to the Transformation of Government Entities, Popular
Participation, as well as Economic, Social, Financial, Tax and Energy matters.




Memorandum of Understanding with Petrdleos de Venezuela (PDVSA)




On February 13, 2007 the Company’s main stockholder signed a memorandum of understanding (MOU) with
Petroleos de Venezuela, S.A. (PDVSA), which establishes the bases of negotiation for the sale of
their equity participations in the Company, as well as other assets from related companies for
US$105.5 million, subject to:





	•	 	Negotiation and conclusion of a full sale purchase agreement of CMS Interest, with standard
representations, warranties and indemnity obligations to be granted by CMS and PDVSA.
	 
	•	 	Performance of a legal and financial due diligence by PDVSA, which do not result in the
identification of material differences with the financial statements accompanying the MOU, and
that, in the reasonable opinion of PDVSA, does not materially affect the value of CMS Interest
previously agreed. It is expressly understood that the agreed compensation is based on SENECA’s
current situation according to the accompanying financial statements, and that it is not PDVSA’s
intent to challenge the legal and reasonable administrative acts carried out by the employees and
executives of the Company prior to the acquisition.
	 
	•	 	Inexistance of transactions outside the ordinary course of business before the closing of the
acquisition.
	 
	•	 	Full cooperation on the part of CMS up to the closing of the acquisition with a liaison team to
be appointed by PDVSA shortly, and best efforts of CMS to facilitate the transition in the
administration of SENECA.
	 
	•	 	Accuracy in all substantial aspects of the representations granted by CMS in the sale purchase
agreement of CMS Interest; and
	 
	•	 	Transfer of ownership regarding all the shares and equipment included in CMS Interest, as well as
the discharge of all SENECA’s indebtedness with CMS or any of its subsidiaries, and delivery of
evidence that the value of leased equipment to be transferred is equal or higher than US$15.6
million and that the total debt amount is not lower than US$1.9 million (amounts included in the
compensation referred to in the memorandum of understanding).
	 
	•	 	Both parties will proceed, in good faith, to conclude the agreements tp close the operation as
soon as possible, but in no event after March 31, 2007.








26












Table of Contents





Appendix 2.6 Taxes




1. Tax on Economic Activities:




Status of the Gross Income Returns with Municipalities of the State of Nueva Esparta as of
12/31/2006.




a. Diaz Municipality:




SENECA filed gross income return from October 2005 to September 2006. Pending review of the
situation to reconcile debt.




b. Tubores Municipality:




Solvent until September 2006.




c. Macanao Municipality: Solvent until September 2006.




d. Antolin del Campo Municipality:




	 	 	 	 	 
	Filed Returns	 	Observations
	Oct-03

	 	Sep-04
	 	Pending
	Oct-04

	 	Sep-05
	 	agreement
	Oct-05

	 	Sep-06
	 	to reconcile debt






e. Marcano Municipality:




	 	 	 	 	 
	Filed Returns	 	Observations
	Oct-03

	 	Sep-04
	 	Pending
	Oct-04

	 	Sep-05
	 	agreement
	Oct-05

	 	Dic-05
	 	to reconcile debt
	Ene-06

	 	Dic-06	 	 






f. Arismendi Municipality:




Gross income return has not been filed. Pending review of the situation to reconcile debt.




g. Garcia Municipality:




Gross income declaration has not been filed.




h. Gomez Municipality:




Gross income return has not been filed. Pending review of the situation to reconcile debt.




i. Maneiro Municipality:




Gross income return has not been filed. Pending review of the situation to reconcile debt,




j. Villalba Municipality:




Gross income return has not been filed. Pending review of the situation to reconcile debt




Following, a summary of the outstanding debts as of December 31st, 2006 for municipal taxes on
economic activities, its provision in SENECA, and the favorable balance to SENECA upon
reconciliation of debts:




	 	 	 	 	 
	TOTAL AMOUNT of TAXES on GROSS INCOME as of DECEMBER 2006
	 	 	6,188,904,614	 
	PROVISION FOR MUNICIPAL TAXES DECEMBER 2006
	 	 	6,683,630,906	 
	ACCOUNTS RECEIVABLES TO MUNICIPALITIES as OF DDECEMBER
2006 FOR ELECTRIC SERVICE
	 	 	18,147322,664	 






 









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	NET BALANCE IN FAVOR OF SENECA AS OF DECEMBER 2006
	 	 	(11,958,418,050	)






2. Other Municipal Taxes:




Status of Municipal Taxes year 2007




	 	 	 	 	 	 	 	 	 
	Marifio

	 	Solvent until 2007.
	 	Solvent until
February 2007
	 	Solvent until 2007
	 	Solvent untilo 2007
	Maneiro

	 	Solvent until 2007
	 	A communication was
sent and
awaiting for
Account Statement
	 	A communication was
sent
and awaiting for
Account Statement
	 	Solvent until 2007
	Antolln del eampo

	 	Solvent until 2007
	 	A communication was
sent and awaiting
for Account
Statement.
	 	and awaiting for

Account
	 	Not applicable
	Diaz

	 	Not applicable
	 	Not applicable
	 	Not applicable
	 	Not applicable
	Macanma

	 	A communication was
sent and
awaiting for
Account Statement.
Solvent until 2004
	 	A communication was
sent and awaiting
for Account
Statement
	 	A communication was
tend and awaking for
Account
§&forar“flfe to
2004
	 	Acommunkaaionwasscnd
and awaking for Account
5of£rtun*12M>4
	Arismendi

	 	Solvent until 2007
	 	A communication was
sent and awaiting
for Account
Statement.
	 	and awaking for
Account Statement.
	 	Not applicable
	Tuhorts

	 	Not applicable
	 	Not applicable
	 	No applicable
	 	Not applicable
	VUlalba

	 	A communication was
sent and
awaiting for
Account Statement.
	 	A communication was
sent and
awaiting for
Account Statement.
	 	A commu taxation
was sent
and awaking for
Account Statemaatt
	 	A comminication was sent
and awaking for Account
Statement
	Gomez

	 	Not applicable
	 	Not applicable
	 	No applicable
	 	No applicable
	Marcano

	 	A communication was
sent and
awaiting for
Account Statement.
Solvent until 2005
	 	A communication was
sent and awaiting
for Account
Statement
	 	A coinuMMcutton was
sent and awaking
for Account
Statement.
	 	A communication was sent
and awaking for Account
State. Solvent until
2003
	Cruz Salmon* Acoaa

	 	A communication was
sent and
awaiting for
Account Statement.
Solvent until 2006
	 	Not applicable
	 	Not applicable
	 	Not applicable
	Garcia

	 	Solvent until 2007
	 	A communication was
sent and awaiting
for Account
Statement.
	 	A cominu nicotian
was sent
sad awaking for
Account
StstejMfiL.
	 	Not applicable






 









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The amounts outstanding as of December 31st 2006 included in the Financial Statements for the
abovementioned taxes are Bs. 31.533.000,00.




3. Assessment




On March 8th, 2007 SENECA received assessment N° J-H.04-2007 issued by the Mayor’s Office Tax
Department of the Garcia Municipality, in connection with years 1998 to 2006 for the amount of Bs.
61,939,223,059.00, based on Municipality’s Ordinance on Industrial and Commercial License and the
Municipal Ordinance on Urban Property Tax for the following concepts:




1. Energy Distribution




2. Post rental




3. Garbage Collection Fee




1,428,521,843




10,863,680




1,557,536




4. Servitude (Distribution)




5. Servitude (Transmission)




54,335,200,000




6,163,080,000




Bs. 61,939,223,059




SENECA agrees with the concepts described in points 1, 2 and 3. However, it does not agree with the
amounts assessed in the concepts 4 and 5.




On 2004, Antolin del Campo Municipality of the State of Nueva Esparta issued an assessment to
SENECA for the same concepts asserted by Garcia Municipality. The Assessment of Antolin del Campo
Municipality was declared null and void by the Mayor’s Office, at his own instance, and therefore,
the Judicial Tax Appeal was voluntarily desisted by SENECA, and confirmed by the Superior Tax
Court.




Action: SENECA filed defense arguments before the Garcia Municipality’s Tax Department on March
27th, 2007 for the concepts 4 and 5, based on the arguments used in the Antolin del Campo
Municipality assessment. SENECA has not reserved for concepts 4 and 5.





 











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Provision: As of December 31st, 2006, SENECA Financial Statements show the assigned provision
for the amounts contained in concepts 1, 2 and 3, aforementioned. Therefore, there shall be no
changes in the financial condition of SENECA.




Debt of the Municipality: Garcia Municipality owes SENECA for energy consumption since 1998. As of
December 31”, 2006 the amount owed is Bs. 3,045,000,000.00 without interests and Bs.
5,157,000,000.00 with interests.




Appendix 2.10




Exceptions to Property Title and Liens of Assets




1. — Airport Substation. Located at the General Santiago Marino International Airport in the State
of Nueva Esparta. The Nueva Esparta Government is the owner of the land. Seneca has no title to the
constructions. The aforementioned property was listed in Annex 5 (Property with Entitlement
Problems) of the Sales Purchase Agreement entered into on September 15th, 1998 between
FIV-Cadafe-Eleoriente and Enelmar whereby the Seneca class “A” shafes were purchased. The property
of this asset was never transferred to Seneca.




2. — Las Hernandez Substation. Located at Las Hernandez Sector in the Diaz Municipality of the
State of Nueva Esparta. Cadafe transferred Seneca the possession rights over the land and
constructions by document authenticated before Pampatar Notary Public Office of the State of Nueva
Esparta on May 26th, 2000, under N° 68, Volume 21, and before Sucre Municipality’s Second Notary
Public Office of the State of Miranda on May 17th, 2000 under N° 78, Volume 24, There is an adverse
ownership declaration proceeding identified with N° 19.765, as mentioned in Appendix 2.7.




3. — Land on which Coche Plant and Substation is located. The land has an area of 14,663 Mt2 and is
owned by the Villalba Municipality of the State of Nueva Esparta. The aforementioned property was
listed on Annex 5 (Property with Entitlement Problems) of the Sales Purchase Agreement entered on
September 15th, 1998 between FIV-Cadafe-Eleoriente and Enelmar whereby the Seneca class “A” shares
were purchased. The property of this asset was never transferred to Seneca.




4. — San Lorenzo Transition Substation. This substation existed at moment class “A” shares were
purchased, but was never mentioned in Annex 2 (Inventory on the Fixed Assets), nor in Annex 5
(Property with Entidement Problems) of the Sales Purchase Agreement Seneca has tide neither to the
land, nor to the constructions.




5. -Servitudes:




For the transmission lines, networks and circuits referred to below, SENECA servitude right is
based on a legal presumption of servitude, transferred by Cadafe and Eleoriente, and not on
servitudes formally constituted.




a.- As evidenced in document registered before the following Registry Offices:




	•	 	Subordinate Public Registry Office of Maneiro Municipality of the State of Nueva Esparta on
February 2nd, 2005, under N° 12, Volume 4, Protocol 1°.
	 
	•	 	Subordinate Public Registry Office of Diaz Municipality of the State of Nueva Esparta on April
5th, 2005, under N° 11, Volume 1, Protocol 1°, pages 46 to 60.
	 
	•	 	Subordinate Public Registry Office of Gomez Municipality of the State of Nueva Esparta on April
11th, 2005, under N° 21, Protocol 1 °, pages 46 to 60.
	 
	•	 	Subordinate Public Registry Office of Arismendi y Antolin del Campo Municipalities of the State
of Nueva Esparta on April 1.1* 2005, under N° 29, Volume 2, Protocol 1°, pages 162 to 183.
	 
	•	 	Subordinate Public Registry Office of Marcano Municipality of the State of Nueva Esparta on
April 12th, 2005, under N° 27, Volume 1, Protocol 1°, pages 140 to 157.
	 
	•	 	Subordinate Public Registry Office of Marino Municipality of the State of Nueva Esparta on April
21”, 2005, under N° 17, Volume 5, Protocol 1°, pages 125 to 151.





Cadafe and Eleoriente transferred Seneca the right of way for electric conductors identified below,
based on the existence of duly constituted servitude’s presumption in favor of Cadafe issued by the
First Instance Civil and




 









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Commerce Second Court in the State of Nueva Esparta on May 2nd, 2001, file N° 1198/01, and
registered before the following Real Estate Subordinate Registry Public Offices:





	•	 	Subordinate Public Registry Office of Maneiro Municipality of the State of Nueva Esparta on
November 20*, 2003, under N° 37, Volume 7, Protocol 1°, pages 225 to 287;
	 
	•	 	Subordinate Public Registry Office of Gomez Municipality of the State of Nueva Esparta on
December 5th, 2003, under N° 24, Volume 3, Protocol 1°;
	 
	•	 	Subordinate Public Registry Office of Marcano Municipality of the State of Nueva Esparta on
December 19*, 2003, under N° 10, Volume 5, Protocol 1°, pages 95 to 166;
	 
	•	 	Subordinate Public Registry Office of Diaz Municipality of the State of Nueva Esparta on January
20*, 2004, under N° 37, Volume 1, Protocol 1°, pages 215 to 280;
	 
	•	 	Subordinate Public Registry Office of Marino Municipality of the State of Nueva Esparta on March
8*, 2004, under N° 50, Volume 13, Protocol 1°, pages 295 to 321;
	 
	•	 	Subordinate Public Registry Office of Arismendi y Antolin del Campo Municipality of the State of
Nueva Esparta on March 15*, 2004, under N° 21, Volume 9, Protocol 1°, pages 217 to 290:





1.- 115 Kv. Transmission Lines




Name of the Lines_

Luisa Caceres — Los Millanes_

La Asuncion — San Lorenzo — Los Robles

Luisa Caceres — Boca de Rio_.

Pampatar — San Lorenzo_




2.- Networks:




(i). 34,5 Kv Circuits,




	 	 	 
	Name of the Substation (E/S)	 	Name of the Line
	Pampatar

	 	Morropo
	Los Millanes

	 	Aricagua
	Luisa Caceres

	 	Aeropuerto — Las Hernandez
	Luisa Caceres

	 	Conejeros
	Boca de Rio

	 	Boca de Rio — Las Hernandez
	Los Robles

	 	Morropo — Conejeros






(ii). 13,8 Kv Circuits.




	 	 	 
	Name of the Substation (E/S)	 	Name of the Line
	Los Robles

	 	Los Robles
	 

	 	Playa El Angel
	 

	 	Sabanamar — Fermtn
	 

	 	Av. 4 de mayo
	 

	 	Achipano
	 

	 	La Arboleda
	 

	 	ClinicaLa Fe
	Coche

	 	San Pedro
	 

	 	ElBichar
	Aricagua

	 	Paraguachi
	 

	 	ElSalado






 









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	Name of the Substation (E/S)	 	Name of the Line
	 

	 	Hotel Playa El Agua
	 

	 	La Mir a
	 

	 	Aricagua
	Conejeros

	 	Calle Maneiro
	 

	 	Calle Marcano
	 

	 	ElValle
	 

	 	La Comarca
	 

	 	Av. F. Fajardo
	 

	 	Mercado
	Porlamar

	 	CANTV
	 

	 	Iiano Adentro
	 

	 	Calle Igualdad
	 

	 	El Jumbo
	 

	 	Clinico Margarita
	 

	 	Hospital
	 

	 	CC. El Angel
	 

	 	Calle Guevara
	La Asuncion

	 	La Otra Banda
	 

	 	Cruce de Guacuco
	 

	 	Av. 31 de Julio
	 

	 	La Gobernacion
	 

	 	La Fuente
	 

	 	Atamo Norte
	Pampatar

	 	Pampatar
	 

	 	La Caranta
	 

	 	ElParaiso
	 

	 	Hotel Hilton
	 

	 	Marina Bay
	 

	 	San Lorenzo
	 

	 	Laguna Mar
	 

	 	Centro AB
	 

	 	Jorge Coll






	 	 	 
	Name of the Substation (E/S)	 	Name of the Line
	Boca de Rio

	 	Boca de Pozo
	 

	 	San Francisco
	 

	 	Boca de Rio
	Las Hernandez

	 	Los Gomez
	 

	 	El Guamache
	 

	 	Punta Piedras
	 

	 	Las Hernandez
	Aeropuerto

	 	Aeropuerto
	 

	 	Av. Aeropuerto
	 

	 	Base Aerea
	 

	 	Los Bagres
	Luisa Caceres

	 	Villa Rosa






 









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	Name of the Substation (E/S)	 	Name of the Line
	 

	 	Valle Verde
	 

	 	Los Cocos
	 

	 	El Piache
	 

	 	Cuidad Carton
	 

	 	La Isleta
	Los Millanes

	 	Isla Bonita
	 

	 	Bahia de Plata
	 

	 	Pedregales
	 

	 	San Juan
	 

	 	La Vecindad
	 

	 	Taritare
	 

	 	Los Martires
	 

	 	Juan Griego
	Morropo

	 	Dumar — Caracola
	 

	 	Bella Vista
	 

	 	Av. Bolivar
	 

	 	El Dandy
	 

	 	Concorde
	 

	 	Costa Azul






b.- On the following 13.8 Kv circuits there is no constituted servitude, but the presumption of
duly constituted semtude provided in the Electric Service Organic Act may be applied.




	 	 	 	 	 
	Substation	 	Circuit	 	Description
	Pampatar

	 	Sambil
	 	Feeds Centro Comercial Sambil
	Los Millanes

	 	El Maco
	 	Feeds El Maco, El Tuey y Punta Cuji.
	Morropo

	 	Sabanamar
	 	Feeds Sabanamar y Porlamar’s El Hambre Street
	Porlamat

	 	Av. Terranova
	 	Feeds the hamlets form Terranova Este Av.






c- On the following 13.8 Kv circuits there is no constituted servitude.




	 	 	 	 	 
	Substation	 	Circuit	 	Description
	Luisa Caceres

	 	San Antonio
	 	Feeds San Antonio and Pedro Luis Briceiio
hamlets.
	Luisa Caceres

	 	ElDatil
	 	Feeds El Datil, Cotoperis I, II and III
	Boca de Rio

	 	El Indio
	 	Feeds Chacachacare and Santa Maria
	Conejeros

	 	Macho Muerto
	 	Feeds Macho Muerto and Los Cuartos






6. — There is no title to vehicle Type: PICK-UP; Year: 1985; Number Plate: 721 -BBJ; Brand: TOYOTA;
Model: FJ45LPK; Body Serial Number: FJ45-947426.




7. — As evidenced in document registered before the Real Estate Registry Public Office of Marino
Municipality in the State of Nueva Esparta on May 23rf, 2006, under N° 5, Volume 18, Protocol 1°,
pages 28 to 40 and before the Real Estate Registry Public Office of Maneiro Municipality in the
same State on June 1st, 2006, under N° 46, Volume 11, Protocol 1°, pages 223 to 238 a first degree
mortgage was granted in order to secure performance bond issued by




 









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Corpbanca, and required by the Nueva Esparta Electric Service Concession Agreement, on the
following real estate:




(i) Land on which Pampatar Substation is located with an area of 2,412 Mts2. Seneca owns the land
as evidenced in document registered before Subordinate Registry Public Office of Maneiro
Municipality in the State of Nueva Esparta on March 16th, 2000, under N° 31, Volume 6, Protocol 1°,
pages 153 to 156




(ii) Land on which Seneca Main Offices are located with an area of 22,500Mts2. Seneca owns the land
as evidenced in document registered before the Subordinate Registry Public Office of Maneiro
Municipality in the State of Nueva Esparta on March 16th, 2000, under N° 31, Volume 6, Protocol 1°,
pages 153 to 156, and the Main Offices as evidenced in document before the same Registry Office on
July 29th, 2003, under N° 18, Volume 4, Protocol 1°, pages 79 to 101.




(iii) Two (2) commercial establishments identified with N° 17 with an area of de 106,88 mts2 and
17-D with an area of 144.03 mts2 located at El Angel Shopping Mall in the city of Porlamar, Marino
Municipality. Seneca owns the aforementioned commercial establishments as evidenced in document
registered before the Subordinate Registry Public Office of Marino Municipality in the State of
Nueva Esparta on January 14th, 1999, under N° 34, Volume 2 Protocol 1°, pages 223 to 230 and on
April 8th, 1999, under N° 6, pages 37 to 46, Volume 1 °, Protocol 3°.




(iv) Two (2) commercial establishments identified with N° 18 with an area of de 104,92 nits2 and
18-D with an area of 144.03 mts2 located at El Angel Shopping Mall in the city of Porlamar, Marino
Municipality. Seneca owns the aforementioned commercial establishments as evidenced in document
registered before the Subordinate Public Registry Office of Marino Municipality in the




State of Nueva Esparta on April 8th, 1999, under N° 31, Volume 30 Protocol 1°, pages 250 to 257 and
on April 7th, 1999, under N° 9, pages 67 to 76, Volume 1°, Protocol 3°.




(v) Two (2) commercial establishments identified with N° 19 with an area of de 104,92 mts2 and 19-D
with an area of 141.66 mts2 located at El Angel Shopping Mall in the city of Porlamar, Marino
Municipality. Seneca owns the aforementioned commercial establishments as evidenced in document
registered before the Subordinate Public Registry Office of Marino Municipality in the State of
Nueva Esparta on January 14* 1999, under N° 33, Volume 2 Protocol 1°, pages 215 to 222 and on April
8*, 1999, under N° 8, pages 57 to 66, Volume 1°, Protocol 3°.




(iv) Two (2) commercial establishments identified with N° 20-A and 20-B, both with an area of de
154,69 mts2 each, located at El Angel Shopping Mall in the city of Porlamar, Marino Municipality.
Seneca owns the before mentioned commercial establishments as evidenced in document registered
before the Subordinate Public Registry Office of Marino Municipality in the Nueva Esparta State on
January 14*, 1999, under N° 9, Volume 2 Protocol 1°, pages 57 to 64 and on April 8*, 1999, under N°
7, pages 47 to 56, Volume 1°, Protocol 3°.




8.- Nueva Esparta Electric Supply Concession Agreement entered between Republic of Venezuela Acting
through the Ministry of Energy and Mines, SENECA Sistema Electrico del Estado Nueva Esparta, C.A.
authenticated by the 27^ Notary Public Office in the Libertador Municipality of the Federal
District on July 17th, 1998, under N° 9, Volume 42, sets forth in its Fourth Clause that the
Electric Supply Concession in the State of Nueva Esparta will have term of 50 years, that is, until
July 17*, 2048. The Eighteenth Clause of the Agreement establishes that upon termination of the
concession all the assets affected to the supply of the service shall gratuitously reverse to the
Republic, free of liens and encumbrances.





 












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Appendix 2.7 Litigation




	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Docket	 	 	 	 	 	 
	 	 	Court	 	Number	 	Case	 	Amount	 	Description
	1

	 	First Court of
First Instance on
Civil, Mercantile,
Traffic and
Agrarian Matters of
Nueva Esparta State
	 	20.286	 	 	 	Lawsuit filed by
Jose R. Lares
against SENECA for
economic/physic al
and moral damages
	 	Bs. 814.720.000,oo
NOTE:

Due to calculation
mistake on the
lawsuit (External
lawyer’s opinion)
the amount of the
action reduces to
Bs. 435.000.000,00
1. -
400.000,00-moral
damages, and
2. — 35.000.000,00
-material damages
	 	Claim for moral and
material damages to
the plaintiff and
his property, who
entered into a
contract with a
third party to
perform works of
removal of aerial
electric lines to
underground lines,
and lost both arms
due to an electric
shock. This trial
presents many
controversial
facts, since the
circumstances
alleged by the
plaintiff in the
complaint are not
coincident with the
facts alleged in
the answer to the
complaint, nor the
allegations of
three trade
companies summoned
and acting as third
parties.
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	2

	 	First Court of
First Instance on
Civil, Mercantile,
Traffic and
Agrarian Matters of
Nueva Esparta State
	 	20.442	 	 	 	Lawsuit filed by
SENECA against
CONSORCIO CVA
seeking payment of
outstanding
amounts.
(Collection action)
	 	Bs. 360.000.000,00	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	3

	 	First Court of
First Instance on
Civil, Mercantile,
Traffic and
Agrarian Matters of
Nueva Esparta State
	 	21.011	 	 	 	Lawsuit filed by

Ivan De Angelis

against SENECA for

moral damages
	 	Bs. 50.000.000,00
	 	Claim for moral and
material damages
allegedly caused by
officers of SENECA
upon carrying out
inspections to
power consumption
measuring equipment

There are
reasonable
arguments to think
that this claim
should be
dismissed.
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	4

	 	Second Court of
First Instance on
Civil, Mercantile,
Traffic and
Agrarian Matters
of Nueva Esparta
State
	 	6192	 	 	 	Lawsuit fileid by
SENECA against
PENTAG for
Termination of
Contract
	 	Bs. 600.000.000,00	 	 






 









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	 	 	 	 	Docket	 	 	 	 	 	 
	 	 	Court	 	Number	 	Case	 	Amount	 	Description
	5

	 	Second Court of
First Instance on
Civil, Mercantile,
Traffic and
Agrarian Matters of
Nueva Esparta State
	 	6229	 	 	 	Lawsuit filed by
SENECA against
Jenny Acuero
seeking payment of
outstanding
amounts.
(Collection action)
	 	Bs. 25.000.000,00	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	6

	 	Second Court of
First Instance on
Civil, Mercantile,
Traffic and
Agrarian Matters of
Nueva Esparta State
	 	8538	 	 	 	Foreclosure lawsuit

filed by SENECA

against JUMBO

CIUDAD COMERCIAL	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	7

	 	Second Court of
First Instance on
Civil, Mercantile,
Traffic and
Agrarian Matters of
Nueva Esparta State
	 	6388	 	 	 	Lawsuit filed by
SENECA against
TELECARIBE seeking
payment of
outstanding
amounts.
(Collection action)
	 	Bs. 72.000.000,00	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	8

	 	Superior Court on
Civil, Mercantile,
Traffic and
Agrarian Matters of
Nueva Esparta State
	 	5.480	 	 	 	Demand for payment
of legal costs 

Brigitte Rudolph W.
(CADAFE Case)
	 	Bs. 125.000.000,00
	 	Demand for Payment
of Legal Costs
derived from final
ruling in the suit
for legal
protection filed by
Brigitte Rudolph W.
against SENECA
(1998).
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	9

	 	Superior Court on
Labor Matters of
Nueva Esparta State
	 	OP02-R- 2006-
 000002
6 3738
	 	Lawsuit filed
against SENECA by
former employees of
PENTAG, Joint
Liability of
Employers
	 	Bs. 55.696.353,69
	 	Lawsuit filed by a
group of former
employees that
provided services
to the company
PENTAG, C.A.,
contractor of
seneca, engaged in
carrying out
costumer, posts and
lighting census.
Plaintiffs claim
payment of social
benefits of labor
nature from both
companies, since
they allege that
existed inherence
in the labor
provided by the
contractor PENTAG,
C.A. to Seneca,
this last one is
jointly liable for
the payment of the
amounts and social
benefits of labor
nature claimed.
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	10.

	 	Superior Court on
Labor Matters of
Nueva Esparta State	 	 	 	 	 	 	 	 	 	 






 









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OP02-R-2005-148 y 1516 OP02-L-2004-0000267



Lawsuit filed by Romulo Lorenzo Oliveros against Lecturay Servicios Electricos Buen Viaje and
SENECA seeking payment of outstanding amounts. (Collection action)



Bs. 33.854.398,47

Claim seeking acknowledgement of labor relation that purportedly existed between the plaintiff and
SENECA and payment of social benefits derived from said relation; however, it is indicated the
existence of a company named Lecturas y Servicios Electricos Buen Viaje, C.A., integrated by
several stockholders, being that the plaintiff was actually an employee of Lecturas y Servicios
Electricos Buen Viaje, C.A., so it is alleged that SENECA lacks the quality to be demanded in this
trial.



11 Superior Court on Labor Matters of Nueva Esparta State

OP02-R-2007-000009 6OP02-L-2005-0000580



Lawsuit filed by Pablo Cesar Nunez against SENECA seeking payment of Severance Benefits.



Bs. 611.830.458,58



Claim seeking acknowledgement of labor relation that purportedly existed between the plaintiff and
SENECA since the first service contract entered into on January 1st, 2001 until August 12th, 2005.
Consequendy, payment of social benefits derived from said relation, including vacation pay,
severance pay and further benefits provided by the Collective Bargaining Agreement of the Company



12 First Court on Contentious-Administrative Matters



00351



Lawsuit filed by several employees against SENECA for enforcement of contract



Bs. 421.273.010,08



Action for annulment of settlement entered into by former employees and Seneca before the Labor
Inspectorate, whereby both parties agreed to terminate the labor . relations, payment of social
benefits and a setdement fee, and mutual releases were exchanged. Plaintiffs allege that such
settlement is null and void due to defect of consent, since they mistakenly considered that such
settlement was more favorable in economic terms. In this sense, they alleged that the Company owes
them a series of social benefits of labor nature, including: rise of wages, housing pay, vacation
pay, food pay, and back wages, and profits among others.




	 	 	 	 	 	 	 	 	 	 	 
	13

	 	Third Court of
First Instance of
substantiation,
Mediation and
Execution on Labor
Matters
	 	OP02-L-2006-000 612
	 	Lawsuit filed by
NumarMata against
Electric 3000, CA.
and SENECA seeking
payment of
outstanding
amounts,
(collection action)
	 	Bs. 15.625.507,00
	 	Claim seeking
acknowledgement of
labor relation that
purportedly existed
between the
plaintiff and
SENECA and payment
of social benefits
derived from said
relation; however,
it is indicated the
existence of a
company named
ELECTRIC 3000, C
A., integrated by
several
stockholders, being
that the plaintiff
was actually an
employee of the
ELECTRIC 3000, CA.
so it is alleged
that SENECA lacks
the quality to be
demanded in this
trial






 









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	14

	 	Supreme Tribunal of
Justice, the Full
Court (Sala Plena)
	 	2006-353
	 	Action for
annulment against
SENECA filed by
Migdalia Ramona
Vasquez, Luisa
Beltrana Acosta
Garcia and Beltran
Diaz, (former
employees of
SENECA) + economic
damages
	 	Bs. 277.253.219,72
	 	Action for
annulment of
setdement entered
into by former
employees and
Seneca before the
Labor Inspectorate,
whereby both
parties agreed to
terminate the labor
relations, payment
of social benefits
and a setdement
fee, and mutual
releases were
exchanged.
Plaintiffs allege
that such setdement
is null and void
due to defect of
consent, since they
mistakenly
considered that
such setdement was
more favorable in
economic terms. In
this sense, they
alleged that the
Company owes them a
series of social
benefits of labor
nature,..’
including: rise of
wages, back wages,
sole
gratifications,
housing pay, food
pay, profits,
vacations, vacation
pay, among others;
	 
	 	 	 	 	 	 	 	 	 	 
	15

	 	Supreme Tribunal of
Justice, the Full
Court (Sala Plena)
	 	2006-356
	 	Action for
annulment against
SENECA filed by
Elena Salazar de
Landaeta, Juan
Antonio Hernandez,
Luis Beltran
Velasquez Marin
(former employees
of SENECA) +
economic damages
	 	Bs. 268.075.744,75
	 	Action for
annulment of
settlement entered
into by former
employees and
Seneca before the
Labor Inspectorate,
whereby both
parties agreed to
terminate the labor
relations, payment
of social benefits
and a settlement
fee, and mutual
releases were
exchanged.
Plaintiffs allege
that such setdement
is null and void
due to defect of
consent, since they
mistakenly
considered that
such setdement was
more favorable in
economic terms. In
this sense, they
alleged that the
Company owes them a
series of social
benefits of labor
nature, including:
	 

	 	 	 	 	 	 	 	 	 	rise of wages, back
wages, sole
gratifications,
housing pay, food
pay, vacations,
vacation pay, among
others.






 









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	16

	 	Supreme Tribunal of
Justice, the Full
Court (Sala Plena)
	 	2006-351
	 	Action for
annulment against
SENECA filed by
Juana Alcira Diaz
de Cedeno,Jennis
Velasquez and Jose
Gregorio Gonzalez,
(former employees
of SENECA) +
economic damages
	 	Bs. 78.512.411,63
	 	Action for
annulment of
setdement entered
into by former
employees and
Seneca before the
Labor Inspectorate,
whereby both
parties agreed to
terminate the labor
relations, payment
of social benefits
and a settlement
fee, and mutual
releases were
exchanged.
Plaintiffs allege
that such setdement
is null and void
due to defect of
consent, since they
mistakenly
considered that
such setdement was
more favorable in
economic terms. In
this sense, they
alleged that the
Company owes them a
series of social
benefits of labor
nature, including:
	 

	 	 	 	 	 	 	 	 	 	rise of wages, back
wages, sole
gratifications,
housing pay, food
pay, vacations,
vacation pay, among
others
	 
	 	 	 	 	 	 	 	 	 	 
	17

	 	Supreme Tribunal of
Justice, the Full
Court (Sala Plena)
	 	2006-358
	 	Action for
annulment against
SENECA filed by
Estilito jose
Milano, Neidy del
Valle Monasterios
deIimpio,Jose
Rafael Rojas
(former employees
of SENECA)
	 	Bs. 75.832.264,20
	 	Action for
annulment of
setdement entered
into by former
employees and
Seneca before the
Labor Inspectorate,
whereby both
parties agreed to
terminate the labor
relations, payment
of social benefits
and a settlement
fee, and mutual
releases were
exchanged.
Plaintiffs allege
that such setdement
is null and void
due to defect of
consent, since they
mistakenly
considered that
such setdement was
more favorable in
economic terms. In
this sense, they
alleged that the
Company owes them a
series of social
benefits labor
nature, including:
	 

	 	 	 	 	 	 	 	 	 	rise of wages, back
wages, sole
gratifications,
housing pay, food
pay, vacations,
vacation pay, among
others






 









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	18

	 	Supreme Tribunal of
Justice, the Full
Court (Sala Plena)
	 	2006-352
	 	Action for
annulment against
SENECA filed by
Emiro Rafael
Salazar Brito,
Orlando Jose
Rodriguez Vizcaino,
Alceo Rafael
Velasquez Marcano
(former employees
of SENECA) +
economic damages
	 	Bs. 75.832.264,20
	 	Action for
annulment of
settlement entered
into by former
employees and
Seneca before the
Labor Inspectorate,
whereby both
parties agreed to
terminate the labor
relations, payment
of social benefits
and a setdement
fee, and mutual
releases were
exchanged.
Plaintiffs allege
that such setdement
is null and void
due to defect of
consent, since they
mistakenly
considered that
such setdement was
more favorable in
economic terms. In
this sense, they
alleged that the
Company owes them a
series of social
benefits of labor
nature, including:
	 

	 	 	 	 	 	 	 	 	 	rise of wages, back
wages, sole
gratifications,
housing pay, food
pay, vacations,
vacation pay, among
others
	 
	 	 	 	 	 	 	 	 	 	 
	19

	 	Supreme Tribunal of
Justice, the Full
Court (Sala Plena)
	 	2006-355
	 	Action for
annulment against
SENECA filed by
Felix Gomez,
Remigio Ganero and
Luisa Diaz (former
employees of
SENECA) + economic
damages
	 	Bs. 71.103.479,77
	 	Action for
annulment of
settlement entered
into by former
employees and
Seneca before the
Labor .
Inspectorate,
whereby both
parties agreed to
terminate the labor
relations, payment
of social benefits
and a setdement
fee, and mutual
releases were
exchanged.
Plaintiffs allege
that such setdement
is null and void
due to defect of
consent, since they
mistakenly
considered that
such settlement was
more favorable in
economic terms. In
this sense, they
alleged that the
Company owes them a
series of social
benefits of labor
nature, including:
	 

	 	 	 	 	 	 	 	 	 	rise of wages, back
wages, sole
gratifications,
housing pay, food
pay, vacations,
vacation pay, among
others






 









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	20

	 	Supreme Tribunal of
Justice, the Full
Court (Sala Plena)
	 	2006-323
	 	Action for
annulment against
SENECA filed by
Teowaldojose Milano
Gonzalez, Jesus
Maria Tineo
Martinez and
Enrique Marcano
Jimenez (former
employees of
SENECA) + economic
damages
	 	Bs. 74.760.199,45
	 	Action for
annulment of
setdement entered
into by former
employees and
Seneca before the
Labor Inspectorate,
whereby both
parties agreed to
terminate the labor
relations, payment
of social benefits
and a setdement
fee, and mutual
releases were
exchanged.
Plaintiffs allege
that such setdement
is null and void
due to defect of
consent, since they
mistakenly
considered that
such setdement was
more favorable in
economic terms. In
this sense, they
alleged that the
Company owes them a
series of social
benefits of labor
nature, including:
	 

	 	 	 	 	 	 	 	 	 	rise of wages, back
wages, sole
gratifications,
housing pay, food
pay, vacations,
vacation pay, among
others
	 
	 	 	 	 	 	 	 	 	 	 
	21

	 	Supreme Tribunal of
Justice, the Full
Court (Sala Plena)
	 	2006-357
	 	Action for
annulment against
SENECA filed by
Leonardo Rafael
Gonzalez, Maria
Rosario Medina
Perez and Luis
Alberto Suarez
(former employees
of SENECA) +
economic damages
	 	Bs. 68.443.614,01
	 	Action for
annulment of
settlement entered
into by former
employees and
Seneca before the
Labor Inspectorate,
whereby both
parties agreed to
terminate the labor
relations, payment
of social benefits
and a setdement
fee, and mutual
releases were
exchanged.
Plaintiffs allege
that such setdement
is null and void
due to defect of
consent, since they
mistakenly
considered that
such setdement was
more favorable in
economic terms. In
this sense, they
alleged that the
Company owes them a
scries of social
benefits of labor
nature, including:
	 

	 	 	 	 	 	 	 	 	 	rise of wages, back
wages, sole
gratifications,
housing pay, food
pay, vacations,
vacation pay, among
others
	 
	 	 	 	 	 	 	 	 	 	 
	22

	 	Supreme Tribunal of
Justice, the Full
Court (Sala Plena)
	 	2006-350
	 	Action for
annulment against
SENECA filed by
Jose Rivas, Gonzalo
Rodriguez and
Guillermo Rocca
(former employees
of SENECA) +
economic
	 	Bs. 74.545.447,00
	 	Action for
annulment of
settlement entered
into by former
employees and
Seneca before the
Labor Inspectorate,
whereby both
parties agreed to
terminate the labor
relations, payment
of social benefits
and a setdement
fee, and mutual
releases were
exchanged.
Plaintiffs allege
that such setdement
is null and void
due to defect of







 









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	 	 	 	 	 	 	 	 	 	consent, since they
mistakenly
considered that
such setdement was
more favorable in
economic terms. In
this sense, they
alleged that the
Company owes them a
series of social
benefits of labor
nature, including:
	 

	 	 	 	 	 	 	 	 	 	rise of wages, back
wages, sole
gratifications,
housing pay, food
pay, vacations,
vacation pay, among
others
	 
	 	 	 	 	 	 	 	 	 	 
	23

	 	Supreme Tribunal of
Justice, the Full
Court (Sala Plena)
	 	2006-326
	 	Action for
annulment against
SENECA filed by
Saud Ramon
Villaroel,Jose
German Barreto
Frontado and
Zoraida Veronica
Lopez (former
employees of
SENECA) + economic
damages
	 	Bs. 77.332.539,45
	 	Action for
annulment of
settlement entered
into by former
employees and
Seneca before the
Labor Inspectorate,
whereby both
parties agreed to
terminate the labor
relations, payment
of social benefits
and a setdement
fee, and mutual
releases were
exchanged.
Plaintiffs allege
that such setdement
is null and void
due to defect of
consent, since they
mistakenly
considered • that
such setdement was
more favorable in
economic terms. In
this sense, they
alleged that the
Company owes them a
series of social
benefits of labor
nature, including:
	 

	 	 	 	 	 	 	 	 	 	rise of wages, back
wages, sole
gratifications,
housing pay, food
pay, vacations,
vacation pay, among
others






	 	 	 	 	 	 	 	 	 	 	 	 	 
	24

	 	Regional Archives for the
Judicial Circuit of Nueva
Esparta State
(Remitted under file No.
363, page. 1, official
communication No.
0970-5602 dated
27/07/2006)
	 	 	19.765	 	 	Lawsuit filed by CADAFE
claiming adverse
ownership of land plot on
which Las Hernandez
Substation is built
	 	 
	 	 







 











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Potencial
Litigation




	 	 	 	 	 	 	 	 	 	 	 
	1

	 	Garcia
Municipality’s Tax
Department
	 	 
	 	Tax Assesment

N°J-H-04-2007

received on March

8th, 2007
	 	Bs.
61.939.223.059,00
	 	SENECA filed
defense arguments
before the Garcia
Municipality’s Tax
Department on March
27*, 2007






Criminal Complaints involving Seneca as a victim as of March 28th, 2007




	 	 	 	 	 	 	 
	 	 	Mode of	 	 	 	 
	 	 	Commencement of	 	 	 	 
	Commencement of criminal	 	criminal	 	 	 	 
	investigation	 	investigation	 	Place and Cause of Action	 	Remarks
	1.
18/08/2003 INEPOL Report C13-3626

	 	EX-OFFICIO
	 	Francisco Esteban Gomez Avenue Defendants:
Omar Jose Mendez and Hender Jean Ramos
Quijada. Type of criminal Offense: ATTEMPTED
QUALIFIED THEFT
	 	1st Prosecutor’s
Office. Docket No.
17-F3-0855-03 TRIAL
STAGE. Public and
oral hearing
scheduled 29/07/05
at 11 AM, and
adjourned until
07/09/05 at 10:00
AM, due to the
absence of the
counsel for the
defense. The trial
was scheduled
21/08/06 but it was
adjourned due to
the lack of
available room
until 20/10/06 at
11:00 AM 1” Trial
Court Docket No.
1M-206
	 
	 	 	 	 	 	 
	2.
18/04/05 Polimarino Dckt. 2053-05

	 	Formal complaint
made by Erica
Hernandez and
several residents
of El Poblado.
	 	Alteration of electric meters and collection
of unlawful fees.
El Poblado, calle el Colegio, cruce con
callejon El Chino.
Defendant: Jose Ramon Gil
	 	3rd Prosecutor’s
Office. Docket No.
17 -F3-601-05 TRIAL
STAGE. Defendant
was presented
before die 3rd
Tribunal of Control
on 19/04/05 charged
with EXTORTION AND
MISAPPROPRIATION OF
GOODS FROM A
CRIMINAL OFFENSE,
with a conditional
release
precautionary
measure which
involves appearing
before the court
every thirty days.
On 05/06/05 a power
of attorney was
filed on the
records. The trial
was scheduled
14/08/06 but it was
subsequently
adjourned due to
lack of available
room until
05/10/06. 1* Trial
Court Docket No.
2431
	 
	 	 	 	 	 	 
	3.
15/01/2004 Polimarino Report no.
1641-04

	 	Formal Complaint

made by Angel

Bermudez
	 	Calle Guayacan Sur, Costa Azul
Theft of 250 meters of underground cable
Defendant: Felipe Antonio Lopez.
	 	1* and 3rd
Prosecutor’s
Offices. Docket No.
17-F3-039-04
INVESTIGATION
STAGE. The
Prosecutor’s Office
received the
complaint and the
commencement of
investigations was
ordered by official
communication No.
0127 dated
10/02/04.
On 14/10/04 the
police force
requested members
of SENECA staff to
testify in order to
proceed with the
investigations
	 
	 	 	 	 	 	 
	4.
16/1/2004
CICPC Report No. G-587157

	 	Formal Complaint

made by Angel

Indriago
	 	SENECA, Luisa Caceres
JL UUll
Theft of 700 meters of electrical cable at
Almacen delaPlantaLCA.
	 	1” and 3rd
Prosecutor’s
Offices. Docket No.
17-F3-089-04
INVESTIGATION
STAGE. The
Prosecutor’s
Office-received the
complaint and the
commencement of
investigations was
ordered on 19/01/04






 









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	 	 	Mode of	 	 	 	 
	 	 	Commencement of	 	 	 	 
	Commencement of criminal	 	criminal	 	 	 	 
	investigation	 	investigation	 	Place and Cause of Action	 	Remarks
	5.
13 / 9 / 2003 CICPC Report G-492296

	 	Formal Complaint

made by Marianella

Silva
	 	Av. Bolivar, Urb. Piedra Virgen, El Datil
Theft of electrical cable
	 	1* and 5th
Prosecutor’s
Offices, Docket
No.17-F5-0961-03
INVESTIGATION
STAGE. This case is
to be processed by
the ltt
Prosecutor’s
Office, but it is
waiting for the
police records in
order to commence
proceedings
	 
	 	 	 	 	 	 
	6.
04/03/05 CICPC Report No G-751.813

	 	Formal Complaint

made by

Cruz Manuel Rasse

Rojas
	 	Altagracia, calle Presente Quijada.
Theft of 2 Motorola transmission radios,
black valued at Bs.2 million
	 	1* Prosecutor’s
Office Docket No.
17-F1-298-05
INVESTIGATION
STAGE. Commencement
of investigations
was ordered on
06/04/05. On
21/04/05
Prosecutor’s Office
requested dismissal
of the case
	 
	 	 	 	 	 	 
	 

	 	 	 	each. One pair of
electrical insulated
gloves valued at Bs.l50
thousand. One plastic
lantern, yellow, valued
at Bs.90 thousand. One
hydraulic jack valued at
Bs.l50 thousand and one
lug wrench valued at Bs.
30 thousand Total Bs.
420.000,00	 	 
	 
	 	 	 	 	 	 





	 	 	 	 	 	 	 
	7.
11 /06 / 2003 CICPC
Report No G-431018

	 	Formal Complaint made by Marianella

Silva
	 	 	 	2nd Prosecutor’s Office Docket No.
17-F2^477-03 INVESTIGATION STAGE. This
Prosecutor’s Office is processing the
case, but the records are with the
Police, Theft and Robbery Brigade,
since 27/05/03
	 
	 	 	 	 	 	 
	8.
08 / 01 / 2004
INEPOL

	 	Formal Complaint made by Pedro

Losada
	 	Villa Rosa
Attempted theft at the
communications tower of
O/C
	 	2nd Prosecutor’s Office Docket No.
17-F2-549-03 INVESTIGATION STAGE. The
Prosecutor’s Office received formal
complaint and on 20/01 /04 it was
ordered the commencement of
investigations.
	 
	 	 	 	 	 	 
	9.
10 / 01 / 2004
Inepol Report No.C-22-4549

	 	EX-OFFICIO
	 	Recuperadora el Datil.
Theft of goods owned by
SENECA and CANTV.
	 	2nd Prosecutor’s Office Docket No.
17-F2-081-04 INVESTIGATION STAGE. It
is at investigation stage since 09/03/04
	 
	 	 	 	 	 	 
	10
11 /02/2004 CICPC
Report No. G-748022

	 	Formal Complaint made by
Dra. Marianella Silva
	 	Costa Azul, Macho Muerto
and Los Bagres
Theft of electrical wiring
	 	2nd Prosecutor’s Office Docket No.
17-F2-133-04 INVESTIGATION STAGE. The
Prosecutor’s Office received the
complaint and the commencement of
investigations was ordered on
13/02/04.
	 
	 	 	 	 	 	 
	11.
06/04/2005 CICPC
Report No.
H-067.052

	 	Formal Complaint made by Angela
Castillo.
	 	Sector Cotoperi 2 calle 7
casa E-143.
Theft of Electric meter.
	 	2nd Prosecutor’s Office Docket No.
17-F2-497-05 INVESTIGATION STAGE.
Commencement of investigations was
ordered on 13/02/04 by the
Prosecutor’s Office.






 









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	 	 	Mode of	 	 	 	 
	 	 	Commencement of	 	 	 	 
	Commencement of criminal	 	criminal	 	 	 	 
	investigation	 	investigation	 	Place and Cause of Action	 	Remarks
	12.
04/09/2005

	 	EX-OFFICIO
	 	Isla de Coche. Near
Cementerio El Bichar
Theft of cables
Criminal Offense:
ATTEMPTED QUALIFIED THEFT
Defendant: J-Fran
Reinaldo Suarez Gonzalez
	 	2nd Prosecutor’s Office Docket No.
17-F2-1257-05 INVESTIGATION STAGE.
This case was remitted ex-officio by
Coche police forces since the
defendant was found with cables from
the public electric wiring. The
prosecutor carried out the
Presentation Hearing on Sunday
04/09/05 Control 2. Docket No. OP01
-P- 05-4684. Judicial Archives Docket
No 8220
	 
	13
05/08/05 INEPOL
Report No. El
6-0400

	 	Formal Complaint

made by

Alexandra Gomez

Garcia
	 	Av. Fucho Tovar
Illegal Connections
	 	2nd Prosecutor’s Office Docket No. 17-F2-1181-05
INVESTIGATION STAGE. The Prosecutor’s Office
ordered commencement of investigations. On
31/01/06 a petition was filed before the
Prosecutor’s Office seeking the Company to
normalize the irregular situation.
	 
	 	 	 	 	 	 
	14.
13/08/04 INEPOL
Report No D16-6399

	 	Formal Complaint

made by

Alexandra Gomez
	 	Luisa Caceres de
Arismendi
Warehouse, Sector
Macho Muerto, via
la Isleta,
Municipio Garcia
Theft of four tires
for vehicles, model
300-040-0207-0
valued at Bs.
94.373,46 each, and
two tires for
forklift trucks,
model
300-040-0301-0
valued at Bs.
5.852,30 each.
Total amount Bs.
389.198,44
	 	3rf Prosecutor’s Office 3° Docket No. 17-F3-848-04
INVESTIGATION STAGE. Commencement of
investigations was ordered on 13/02/04 by the
Prosecutor’s Office.
	 
	 	 	 	 	 	 
	15.
27/01/05 INEPOL
Report No. D16-8495

	 	EX-OFFICIO
	 	Raids carried out
at la Chatarrera
San Juan, in
Carapacho, a scrap
dealer located at
Av. San Juan
Bautista Arismendi,
Sector Macho Muerto
and another one at
Calle Velasquez in
Porlamar.
	 	3* Prosecutor’s Office 3° Docket 17-F3-175-05
INVESTIGATION STAGE. Commencement of
investigations was ordered. The Company may not
request for return of stolen goods until
processed by the prosecution. On 08/03/05 a broad
request was filed for the return of goods found
in the raids carried out by the National Guard.
On 19/05/05 a new petition was filed for the
return of the stolen goods to Seneca. On 09/06/05
the order for the released of stolen goods was
delivered.
	 
	 	 	 	 	 	 
	16.
28/02/05
Prosecutor’s Office
Superior

	 	Formal Complaint
made by Asociacion
de Trabajadores del
Centro Comercial
Jumbo.
Ivano Bonciani et al.
	 	Centro Gudad
Comercial Jumbo.
Formal complaint
related to
incorrect
installation of
electric meters
	 	3rd Prosecutor’s Office 3° Docket No. 17
-F3-340-05 INVESTIGATION STAGE. Commencement of
investigations was ordered on 09/04/05 by the
Prosecutor’s Office, on 09/04/05 information on
the installation of electric meters was requested
from Seneca by official communication.






 









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	 	 	Mode of	 	 	 	 
	 	 	Commencement of	 	 	 	 
	Commencement of criminal	 	criminal	 	 	 	 
	investigation	 	investigation	 	Place and Cause of Action	 	Remarks
	17.
04/06/05 INEPOL
Report No. D16-9876

	 	Formal Complaint
made by
Alexandra Gomez
Garcia.
	 	Calle Guayacan,
urbanizacion Costa
Azul.
Cut of public
electric wiring and
theft of the
control box
	 	3"* Prosecutor’s Office Docket 17- F3-886-05
INVESTIGATION STAGE. Commencement of.
investigations was ordered on 08/06/05
	 
	 	 	 	 	 	 
	18.
01/04/04 INEPOL
Report No.
D-16-5196

	 	Formal Complaint

made by

Alexandra Gomez
	 	Puente de la
Restinga, theft of
100 meters of No. 2
coated conductor
cooper cables,
valued at
Bs.280.000,oo and
100 meters of 2”
wire duct,
Bs. 289.000,oo. 2)
At Juan Griego,
Theft of 6 meters
of 2/0 coated TTU
cooper conductor
valued at Bs.
82.500,oo. 3) Av.
Los Robles. Theft
of AWG coated
cooper threaded
cable valued at Bs
147.000,oo
	 	4* Prosecutor’s Office Dckt 17 -F4-0266-04
INVESTIGATION STAGE. On 2/04/04, said docket was
remitted to the Prosecutor’s Office, enclosed
with official communication No. 0199, and
commencement of investigations was ordered.
Remission to a Prosecutor’s Office still pending.
	 
	19. 06/05/04 INEPOL
Report No Dl
6-5490-04

	 	Formal Complaint

made by Alexandra

Gomez
	 	Several places
	 	4th Prosecutor’s
Office 4° Docket.
17-F4-0423-04
INVESTIGATION
STAGE. Remission to
a Prosecutor’s
Office still
pending.
	 
	 	 	 	 	 	 
	20. 06 / 02 / 2004
INEPOL Report No.
D-6201

	 	Formal Complaint

made by Alexandra

Gomez
	 	1) La Asuncion
Substation, 2) Plaza
Bolivar, la
Asuncion., 1) Theft
of several materials
valued at 9 million
bolivars. 2) theft
of wiring, automatic
start, lighters and
lighting
strengthened valued
at Bs. 13.500.000,oo
Total Bs22.500.000,oo
	 	5th Prosecutor’s
Office. Docket No.
17-F5-0713-04
INVESTIGATION
STAGE. Case was
entered and
commencement of
investigations
ordered. It is
processed by CICPC
under Docket No.
G-749.789






 









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	 	 	Mode of	 	 	 	 
	 	 	Commencement of	 	 	 	 
	Commencement of criminal	 	criminal	 	 	 	 
	investigation	 	investigation	 	Place and Cause of Action	 	Remarks
	21. 26/06/04 INEPOL
report No. Dl
6-6538

	 	Formal Complaint

made by Alexandra

Gomez
	 	TariTari Sector,
2da transversal
near Comercial
Leon.
Theft of 3
stretches of cooper
wire valued at Bs.
225.150,oo
Valparaiso Street
with Campos de Juan
Griego Street.
Theft of one
stretch of cooper
wire valued at Bs.
85.050,oo. 

Pedregales, theft
of two stretches of
cooper wire valued
at Bs. 170.100,oo.
Calle Campos con
Av. Chalia, theft
of one stretch of
cooper wire valued
at Bs. 85.050,oo.
Abre Brecha Sector.
Theft of cooper
line valued at Bs.
85.050,oo.
El Palito Sector,
Pedregales. Theft
of a cooper line
valued at Bs.
85.050,oo.
Altos de Moro de la
Vecindad, near Urb.
Los Cocoteros.
Theft of 4
stretches of cooper
wire line valued at
Bs. 340.000,oo.
Total 1.075.450,oo
	 	5th Prosecutor’s
Office 5° Docket
No. 17-F5- 0833-04
INVESTIGATION
STAGE. The
prosecution ordered
commencement of
investigations. The
police department
requested a
technical-scientific
report on the
stolen material and
information about
the defendant. On
17/09/04 Inspector
Marin received a
report .containing
photographs of the
places where the
theft took place
	 
	 	 	 	 	 	 
	22. 7/11/2004 GN
Report No.

	 	Formal Complaint
	 	Luisa Caceres de

Arismendi Warehouse
	 	5th Prosecutor’s
Office Docket No.
17-F5 -1216-04
INVESTIGATION
STAGE. On 02/12/04
said docket was
remitted to
Criminal
Investigations
Department (CICPC)
so as to proceed
with the
investigations
	 
	 	 	 	 	 	 
	23.14/09/05 INEPOL
Report No. E16-0698

	 	Formal Complaint
made by Alexandra
Gomez Garcia.
	 	Several thefts in
Maneiro and Marino
Municipalities,
Playa el Angel and
Costa Azul Sectors.

Several meters of
cable and fittings
	 	5th Prosecutor’s
Office Docket No.
17-F5 -1271-05
INVESTIGATION STAGE
commencement of
investigations was
ordered on 22/09/05






 









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	 	 	Mode of	 	 	 	 
	 	 	Commencement of	 	 	 	 
	Commencement of criminal	 	criminal	 	 	 	 
	investigation	 	investigation	 	Place and Cause of Action	 	Remarks
	24. 14/04/05 INEPOL
Report No. D16-9203

	 	Formal Complaint made
by Alexandra Gomez Garcia.
	 	Boca del Rio to Las
Hernandez Substation, at
Santa Maria. Theft of 2/0
cooper wire, two stretches
of 200 meters each, and
different fittings and
parts. Total value: Bs.
2.086.372,01
	 	5th Prosecutor’s Office Docket No. 17- F5-0567-05 On 22/04/05 the
prosecution received the complaint and ordered commencement of criminal
investigations. On 30/05/05 the prosecution received the corresponding
records from the Criminal Investigations Department On 14/2/07, the
court ordered Stay of Proceedings.
	 
	 	 	 	 	 	 
	25. 15/04/04 INEPOL
Report No. Dl-5326

	 	Formal Complaint made
by representatives of
Seneca
	 	Festejos Super Portu. Calle
Maria Losada, Sector Sabana
Mar.
An electric meter was being
placed at this business
premises without an
installation order due to
delinquent accounts

Criminal Offense: Qualified
Fraud.
Defendants: Tomas Enriquez
Guzman Silva, Adolfo Rafael
Guerra Sihra and Joscar Luis
Lares Hernandez.
	 	1st Prosecutor’s Office 1° Dckt 17-F1 -434-04 CONCLUSIVE ACT PENDING.
On 16/04/04 the presentation hearing was carried out by the Prosecution
before the Fourth Tribunal of Control, and the defendant was charged
with QUALIFIED FRAUD with a conditional release precautionary measure
which involves appearing before the court every fifteen days. Juneima
Cordero takes te case over and indicates that it has been a
transgression of article 26 of the Constitution, therefore, the Court
requests the Prosecutor’s Office to issue conclusive act The
prosecution issues summons upon the defendants. On 22/06/06 the
Prosecutor’s Office request a certified copy of the Presentation
Hearing records. Control 3. Docket No.C3-7871-04 Judicial Archives
Docket No 6261
	 
	 	 	 	 	 	 
	26.
03/05/04 INEPOL Report
No. D8-5471

	 	EX-OFFICIO
	 	Qualified Offense.
Appropriation of goods from
criminal Offense
	 	1” Prosecutor’s Office 1° Dckt. 17-F1 -693-04
(4th Prosecutor’s Office 4° 0381) Case was entered on
12/07/04
CONCLUSIVE REPORT PENDING. Charges against
defendants Roberto Jose Ruiz and Manuel Masks still
pending. The court granted a conditional release
precautionary measure hich involves appearing before
the court every fifteen days
Control 4. Docket No. 7489 Judicial Archives Docket
6448
	 
	 	 	 	 	 	 
	27.
01/03/04 GN
Report No. 027

	 	EX-OFFICIO
	 	Recuperadora de Metales

Heracleo Gomez

Investigation proceedings
	 	2nd Prosecutor’s Office Docket No. 17-F2-188-04
CONCLUSIVE REPORT PENDING. Marcelo Heracleo Gomez
was charged. The Prosecutor’s Office received
criminal investigation records from the National
Guard and is currendy preparing conclusive report On
28/04/05 the return of stolen materials was
requested by the Company’s attorneys






 









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	 	 	Mode of	 	 	 	 
	 	 	Commencement of	 	 	 	 
	Commencement of criminal	 	criminal	 	 	 	 
	investigation	 	investigation	 	Place and Cause of Action	 	Remarks
	28.
15/04/04

	 	Formal Complaint made

by Lairon Jimenez
	 	Isla de Coche

Theft at business premises
	 	1* Prosecutor’s Office Docket No. 17-F1-375-04
CONCLUSIVE REPORT PENDING. On 29/04/04 it was
remitted to the National Guard by official
communication No. NE1-555-04 so as to commence the
investigations. The prosecution issued an arrest
warrant against the defendant, Raiber Jose Carreno.
CHARGES: QUALIFIED THEFT. On 04/10/04 the
prosecution issued an arrest warrant On 25/07/05 it
is requested the dismissal of the case
	 
	 	 	 	 	 	 
	24/08/05 INEPOL Report
No. E16-0582

	 	Formal Complaint made

by Alexandra Gomez Garcia
	 	Res. Villas Castilla Mar, Juan
Griego, Av. Juan de CasteUanos
Illegal connections Second
Offense.
	 	Prosecutor’s Office 1° Dckt. 17-F1256-05 CONCLUSIVE
REPORT PENDING. Commencement of investigations was
ordered to the National Guard on 29/09/05. A
petition was filed for the prosecution to render a
conclusive report. Records were remitted to the
Criminal Investigations Department on 18/01/06, and
it is still pending the conclusive report by^ the
prosecution.
	 
	 	 	 	 	 	 
	30.
14/05/04 INEPOL Report No
D14-5569

	 	EX-OFFICIO
	 	At the Hospital
An individual was found and
arrested by the Police with a
bag of cables used by the
Company to coat electrical
control panels, different
colors and No. 18, with
necessary fittings for power
connection and transmission
	 	5* Prosecutor’s Office Docket No. 17-F5-0477-04
PRELIMINARY HEARING PENDING. On May 15 2007, the
prosecutor presented the case and Luis Gregorio
Perez Saarez was charged with QUALIFIED THEFT before
the 2nd Tribunal of Control, with a conditional
release precautionary measure which involves
appearing before the court every thirty days. On
August 25th, 2004 the prosecution changed charges to
APPROPRIATION OF GOODS FROM CRIMINAL OFFENSE, with
the same precautionary measure. Hearing was
scheduled 28/10/04 at 1:00 p.m., and subsequendy
adjourned due to the absence of the defendant until
11/04/05 at 01:00 PM. The defendant did not appear
before the court. The hearing was scheduled 19/07/05
at 12:00 PM, and the defendant did not appear before
the court On 26/07/05 the court issued an arrest
warrant
Control 4. Dckt No. C4-7491. Judicial Archives 6363
	 
	 	 	 	 	 	 
	31
14/09/05
INTEPOL Report No.
E16-0699

	 	Formal Complaint made

by Alexandra Gomez Garcia
	 	Several thefts at Sabana Mar,
Villa Rosal and Costa Azul.
Theft of several meters of
cable and different fittings
	 	Superior Prosecutor’s Office. Dckt 17 INVESTIGATION
STAGE. Court assignmentpending
	 
	 	 	 	 	 	 
	32

	 	Formal Complaint made

by Alexandra Gomez Garcia
	 	Seneca’s facilities
	 	5th Prosecutor’s Office Dckt 17-F5-1365-05
INVESTIGATION STAGE The Prosecutor’s Office ordered
the commencement of investigations
	 
	 	 	 	 	 	 
	33.
17/01/07 INEPOL Report
No. C-DAI-002-01-07

	 	Formal Complaint made

by Marianella Silva Brea
	 	Several thefts: At Santa Maria,
Chacachacare and Los Gomez of
Tubores Municipality, 2/0
cooper conductor cable
stretches corresponding to the
34.5kv Las Hernandez— Boca de
Rio power line
	 	Superior Prosecutor’s Office INVESTIGATION STAGE.
Court assignment pending






 









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	 	 	Mode of	 	 	 	 
	 	 	Commencement of	 	 	 	 
	Commencement of criminal	 	criminal	 	 	 	 
	investigation	 	investigation	 	Place and Cause of Action	 	Remarks
	34.
19/02/07 CICPC Report No.
H-485.750

	 	Formal Complaint made

by Marianella Silva Brea
	 	Several thefts: At Carretera
Nacional Boca de Rio, Tubores
and Peninsula de Macanao
Municipalities, 2/0 cooper
conductor cable stretches
corresponding to the 34.5kv Las
Hernandez— Boca de Rio power
line
	 	Superior Prosecutor’s Office INVESTIGATION STAGE.
Court assignment pending
	 
	 	 	 	 	 	 
	35 12/03/07 INEPOL Report
No. C-DAI-002-03-07

	 	Formal Complaint made

by Marianella Silva Brea
	 	Several thefts: At Las
Hernandez Substation (doors of
the Battery Room) and at
Carretera Nacional Boca de Rio,
Tubores and Peninsula de
Macanao municipalities, 2/0
cooper conductor cable
stretches corresponding to the
34.5kv Las Hernandez-Boca de
Rio power line.
	 	Superior Prosecutor’s Office INVESTIGATION STAGE.
Court assignment pending
	 
	 	 	 	 	 	 
	36.
15-03-07 INEPOL Report
No. CPP-056-15-03-07

	 	Formal Complaint made

by Jose Mata
	 	Several Larcenies: (£) at Las
Hernandez Subsation (doors from
the Batteries’ Room) and (H)
Theft of streches of copper
conductor caliber 2/0 on the
National Road Boca de Rio in
the Tubores and Macanao
Municipalities that belong to
the 34.5 Kv line Las Hernandez
-Boca de Rio
	 	Superior Prosecutor’s Office INVESTIGATION STAGE.
 Court assignment pending
	 
	 	 	 	 	 	 
	37. 19-03-07 INEPOL
Report No. CPA-028-03-
07

	 	Formal Complaint made

by Jose Mata
	 	Several Larcenies: (i) at Las
Hernandez Subsation (doors from
the Batteries’ Room) and (ti)
Theft of streches of copper
conductor caliber 2/0 on the
National Road Boca de Rio in
the Tubores and Macanao
Municipalities that belong to
the 34.5 Kv line Las Hernandez
-Boca de Rio.
	 	Superior Prosecutor’s Office INVESTIGATION STAGE.
 Court assignment pending







 











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Appendix 2,11 Assets* Condition




1) 115 kV underwater cable Chacopata-Luisa Caseres de Arismendi Plant




The underwater cable consists of four 28 km, cooper individual conductors of approximately 28km
long OF type (Internal oil circulation for cooling) manufactured by Fujikura of Japan and installed
between 1975 and 1977. Design capacity of 100 MVA. Discontinuities on the protective metallic mesh
caused by anchors and/or deep-sea trawling, have caused inefficiency in the operation of the
cathodic protection at least for the last 15 years; therefore the cable should be operated up to
75% of its designed capacity. One of the four cables is kept as a “reserve” and operated when one
of die other three is out of service due to maintenance operations or inspection. As a result of
such inspection it was determined that two of the four cables have some oil leak apparendy in the
Chacopata extreme and are partially under control While awaiting new repairs, the cables are being
operated at 60 to 65% design capacity. Repairs consist of identifying the precise point of the
leak, applying a seal or other repair technique done at the precise junction and replacing the
damage section. These repairs are of outmost priority and should be performed immediately during
the second quarter subject to the availability of Fujikura or other vendor managing such
technology.




2) Unit 03- MS- 5001P Serial # 244.681




Unit 03 is one of seven Frame 5 gas turbines (diesel operated), manufactured by AEG Kanis, in 1977,
installed in the Luisa Caseres de Arismendi Plant. In 1999, the unit was converted in its main
components to “High Tech” obtaining an increase in power and a specific reduction in fuel
consumption. Since its major inspection (3rd quarter 2004) the unit has operated 16,000 hours. The
unit was shut down due to high vibrations caused by a detachment of material from blinding. A
boroscopic inspection was performed and it was determined that the second stage blinding and
thermal blocks are damaged. The required spare parts for replacement and inspection of hot gases
have been ordered from the manufacturer (GE). 90% of these spare parts are already in stock at the
SENECA warehouse. Replacing and assembling the unit has already begun according to the current
contract signed with GE. Expected date to be in service is April / May 07.




3) Unit 10- PG 6561B- Serial # 832




Unit 10 is one of two Frame 6B owned by CMS Enterprises currently under a leasing agreement with
SENECA. This unit was manufactured by GE-Alsthom (GEEPE) in 1999 and put in service during the
first quarter of 2000. During its operation, routine inspections have been performed to determine
the condition of main components which have shown normal wear considering the type of operation,
fuel, weather and air. Since its last major overhaul the unit has operated 30,000 hours
(manufacturers recommended interval 32,000 hours). An inspection of hot gases was planned for last
quarter of 2006 (manufacturer’s recommended interval for a hot gas path inspection is 16,000
hours); however, such inspection had to be postponed due to suppliers’ delivery delay of certain
spare parts. This inspection was then replaced by a major inspection which is expected to occur in
mid April. During such time and as a safety measure the unit’s release temperature has been lowered
to 490*C and its power reduced to 20MW. During 2006, a series of boroscopic inspections were
performed to monitor and deterioration levels of main components were determined.




4) GT Unit 11- PG 6561B- Serial # 837




Unit 11 is one of two Frame 6B owned by CMS Enterprises currendy under a leasing agreement with
SENECA. This unit was manufactured by GE-Alsthom (GEEPE) in 1999 and put in service during the
second quarter of 2000. Since its last major overhaul the unit has operated 23,000 hours
(manufacturer’s recommended interval is 32,000). An inspection of hot gases was planned for the
first quarter of 2007 (manufacturer’s recommended interval for a hot gas path inspection is 16,000
hours); however, a delay in the closing down of Unit 10 has caused the hot gases inspection of Unit
11 to be postponed. Consequendy, a major overhaul is to be performed during the last quarter of
2007 or beginning of 2008. During such time and as a safety measure the fire temperature of the
unit has been reduced.




5) Los Millanes — La Asuncion 115 kV power line.




High voltage, open air power line interconnecting two substations of 115 kV of the SENECA high
voltage ring. This power line, built in 1981, comprises 3 type ACAR conductors with 350 MCM and 80
MVA capacity. The replacement of two towers has been scheduled for March 07. This has already been
contracted and the work has begun. At least 3 Km of said power line lack a guard conductor.




 









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6) La Asuncion — Pampatar- Los Robles 115 kV power line.




High voltage, open air power line interconnecting three substations of 115 kV of the SENECA high
voltage ring. This power line, built in 1981/1983, comprises 3 type ACAR conductors with 350 MCM
and 80 MVA capacity. 8 km approximately lack a guard conductor.




7) Luisa Caceres — Porlamar — Los Robles 115 kV power line.




High voltage, open air power line interconnecting three substations of 115 kV of the SENECA high
voltage ring. This power line, built in 1993, comprises 2x3 ACAR conductors with 500 MCM and 120
MVA capacity. Tower 15 needs to be replaced due to saline contamination. Another six towers are to
be inspected. Near 3 km lack a guard conductor.




 









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Appendix 2.11 Assets’ Condition




1) 115 kV underwater cable Chacopata-Luisa Caseres de Arismendi Plant




The underwater cable consists of four 28 km, cooper individual conductors of approximately 28km
long OF type (Internal oil circulation for cooling) manufactured by Fujikura of Japan and installed
between 1975 and 1977. Design capacity of 100 MVA. Discontinuities on the protective metallic mesh
caused by anchors and/or deep-sea trawling, have caused inefficiency in the operation of the
cathodic protection at least for the last 15 years; therefore the cable should be operated up to
75% of its designed capacity. One of the four cables is kept as a “reserve” and operated when one
of the other three is out of service due to maintenance operations or inspection. As a result of
such inspection it was determined that two of the four cables have some oil leak apparendy in the
Chacopata extreme and are partially under control. While awaiting new repairs, the cables are being
operated at 60 to 65% design capacity. Repairs consist of identifying the precise point of the
leak, applying a seal or other repair technique done at the precise junction and replacing the
damage section. These repairs are of outmost priority and should be performed immediately during
the second quarter subject to the availability of Fujikura or other vendor managing such
technology.




2) Unit 03- MS- 5001P Serial # 244.681




Unit 03 is one of seven Frame 5 gas turbines (diesel operated), manufactured by AEG Kanis, in 1977,
installed in the Luisa Caseres de Arismendi Plant. In 1999, the unit was converted in its main
components to “High Tech” obtaining an increase in power and a specific reduction in fuel
consumption. Since its major inspection (3rd quarter 2004) die unit has operated 16,000 hours. The
unit was. shut down due to high vibrations caused by a detachment of material from blinding. A
boroscopic inspection was performed and it was determined that the second stage blinding and
thermal blocks are damaged. The required spare parts for replacement and inspection of hot gases
have been ordered from the manufacturer (GE). 90% of these spare parts are already in stock at the
SENECA warehouse. Replacing and assembling the unit has already begun according to the current
contract signed with GE. Expected date to be in service is April / May 07.




3) Unit 10- PG 6561B- Serial #832




Unit 10 is one of two Frame 6B owned by CMS Enterprises currendy under a leasing agreement with
SENECA. This unit was manufactured by GE-Alsthom (GEEPE) in 1999 and put in service during the
first quarter of 2000. During its operation, routine inspections have been performed to determine
the condition of main components which have shown normal wear considering the type of operation,
fuel, weather and air. Since its last major overhaul the unit has operated 30,000 hours
(manufacturer’s recommended interval 32,000 hours). An inspection of hot gases was planned for last
quarter of 2006 (manufacturer’s recommended interval for a hot gas path inspection is 16,000
hours); however, such inspection had to be postponed due to suppliers’ delivery delay of certain
spare parts. This inspection was then replaced by a major inspection which is expected to occur in
mid April During such time and as a safety measure the unit’s release temperature has been lowered
to 490*C and its power reduced to 20MW. During 2006, a series of boroscopic inspections were
performed to monitor and deterioration levels of main components were determined.




4) GT Unit 11- PG 6561B- Serial # 837




Unit 11 is one of two Frame 6B owned by CMS Enterprises currendy under a leasing agreement with
SENECA. This unit was manufactured by GE-Alsthom (GEEPE) in 1999 and put in service during the
second quarter of 2000. Since its last major overhaul the unit has operated 23,000 hours
(manufacturer’s recommended interval is 32,000). An inspection of hot gases was planned for the
first quarter of 2007 (manufacturer’s recommended interval for a hot gas path inspection is 16,000
hours); however, a delay in the closing down of Unit 10 has caused the hot gases inspection of Unit
11 to be postponed. Consequendy, a major overhaul is to be performed during the last quarter of
2007 or beginning of 2008. During such time and as a safety measure the fire temperature of the
unit has been reduced.




5) Los Millanes — La Asuncion 115 kV power line.




High voltage, open air power line interconnecting two substations of 115 kV of the SENECA high
voltage ring. This power line, built in 1981, comprises 3 type ACAR conductors with 350 MCM and 80
MVA capacity. The replacement of two towers has been scheduled for March 07. This has already been
contracted and the work has begun. At least 3 Km of said power line lack a guard conductor.




 









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6) La Asuncion — Pampatar- Los Robles 115 kV power line.




High voltage, open air power line interconnecting three substations of 115 kV of the SENECA high
voltage ring. This power line, built in 1981/1983, comprises 3 type ACAR conductors with ‘ 350 MCM
and 80 MVA capacity. 8 km approximately lack a guard conductor.




7) Luisa Caceres — Porlamar — Los Robles 115 kV power line.




High voltage, open air power line interconnecting three substations of 115 kV of the SENECA high
voltage ring. This power line, built in 1993, comprises 2x3 ACAR conductors with 500 MCM and 120
MVA capacity. Tower 15 needs to be replaced due to saline contamination. Another six towers are to
be inspected. Near 3 km lack a guard conductor.




 









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Appendix 2.13 Environmental Liability




1. Industrial water recollection pond, Luisa Caceres de Arismendi Plant:




Except for suspended solids, biochemical oxygen demand and chemical oxygen demand, all the
parameters (21) analyzed show values below the standard limits or range set forth in Decree N0.883,
which establishes the Rules for the Classification and Quality Control of Water Bodies and
Effluents or Wastewater published in the Extraordinary Official Gazette NO. 5021 dated October 11,
1985. The test results have been sent to the Ministry of Environment and Natural Resources. SENECA
continues to take corrective actions to bring these measures into compliance.




2. Industrial Effluent, Coche Plant:




Except for hydrogen potential, mineral and fuel gases and oils, biochemical oxygen demand and
chemical oxygen demand, all the parameters (21) analyzed show values below the standard limits or
range set forth in Decree N0.883, which establishes the Rules for the Classification and Quality
Control of Water Bodies and Effluents or Wastewater, published in the Extraordinary Official
Gazette NO. 5021 dated October 11,1985. The test results have been sent to the Ministry of
Environment and Natural Resources.




3. Noise Levels, Luisa Caceres de Arismendi Plant:




The noise level equivalent (Leq) and the noise level exceeded during 10% of testing period (L10)
in the peripheral areas showed that during night hours the levels were higher than the tolerable
noise established in Decree NO. 2217 which sets forth the Rules on Noise Pollution Control
published in the Special Official Gazette NO.4.418 dated April 23, 1992 for areas classified as
Zone IV. The test results have been sent to the Ministry of Environment and Natural Resources.
SENECA continues to take corrective actions to bring these measures into compliance.




4. Noise Levels, Coche Plant:




The noise level equivalent (Leq) and the noise level exceeded during 10% of testing period (L10)
in the peripheral areas showed that during day and night hours the levels were higher than the
tolerable noise established in Decree NO. 2217 which sets forth the Rules on Noise Pollution
Control published in the Special Official Gazette NO.4.418 dated April 23, 1992 for areas
classified as Zone IV. The test results have been sent to the Ministry of Environment and Natural
Resources.




5. Soil Characteristics, Coche Plant: There are two precise pollution points with hydrocarbons
sub-products (Fuel pumping system around 6m2 and adjacent area to Unit CAT01 55m2approx.)




6. Equipment that may contain PCB: There are two 660 kVA Marelli transformers manufactured in 1953
currendy out of service which may contain Askarel dielectric oil with capacity of approximately 430
litters each. This equipment has been isolated, covered and kept in metal boxes and shows no signs
of leaking. The test results have been sent to the Ministry of Environment and Natural Resources.




7. Underwater Cable: The underwater cable consists of four individual cooper conductors of
approximately 28km long, OF type (Internal oil circulation for cooling) manufactured by Fujikura of
Japan and installed between 1975 and 1977. As a result of inspections it was determined that two of
the four cables have some oil leak apparendy in the Chacopata extreme which are partially under
control. Repairs consist of identifying the precise point of the leak, applying a seal or other
repair technique, perform the relevant junction and replace the damaged section. These repairs are
of outmost priority and should be performed immediately during the second quarter subject to the
availability of Fujikura or other vendor managing such technology. SENECA continues to take
corrective actions to bring these measures into compliance.




 









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Appendix 4.1 Seneca’s Activities




1. The Maintenance Agreement entered into by GE and SENECA dated July 1, 2005 provides that SENECA
shall confirm to GE prior to shipping that all payments related to the shipping of spare parts from
abroad shall be covered by the guaranty issued by CMS Electric & Gas, LLC, in favor of GE. As
explained hereunder such guaranty is no longer in effect and shall not be renewed as consequence of
the sale of SENECA. GE could request a payment guaranty for the shipping of spare parts from
abroad.




On March 1, 2004, CMS Electric & Gas, L.L.C., issued a payment guaranty in favor of GE which was
renewed for the last time on June 29,2006. Said renewal established that the guaranty was to be in
effect until December 29, 2006 and would only cover those spare parts and equipment requested in a
letter dated June 29, 2006 which confirmed GE’s quotation NO.06-1281 as evidenced by SENECA’s
Purchase Order No.38315, up to the amount of USD 956,641.71. In light of such guaranty CMS Electric
& Gas, L.L.C., and SENECA signed a Reimbursement Agreement whereby SENECA agrees to repay any and
all costs incurred by CMS Electric & Gas, L.L.C., pursuant the aforementioned guaranty. Effective
as of March 26, 2007, the Reimbursement Agreement was terminated in all respects and therefore
SENECA is released of any payment or reimbursement obligation.




2. The All Risk Insurance Contract NO 01-04-01914-22-001 entered into with Banesco Seguros, C.A.,
which is in effect from December 14, 2006 until December 14, 2007 establishes as a requirement of
the reinsurance contract set forth in Attachment 6 (Insurance Premium payment Requirements
Attachment NO 22-06-9-03 Special Conditions) that the reinsurance premium owed from the date of the
agreement shall be paid and received by the reinsures before midnight on April 14, 2007. In the
event that such conditions are not met, the reinsurance contract shall be terminated on the
aforesaid date and the reinsured shall pay the premium calculated on a pro rata basis for the time
at risk. Regarding this matter Banesco Seguros, C A., requested authorization to purchase foreign
currency from the Currency Administration Commission (CADIVI) in order to pay the reinsurers:
however said authorization has not yet been granted.




3. Clause NO 5 (Worsening of Risk of the Especial Conditions for Industry All Risk Attachment) of
the AH Risk Insurance Contract NO 01-04-01914-22-001 entered into with Banesco Seguros, C.A., which
is in effect from December 14, 2006 until December 14, 2007 states that if during the life of the
policy the risk was change, the insured shall inform Banesco Seguros, CA. of such changes by
written notice sent within five (5) consecutive days following the date in which the insured became
aware of such changes indicating the precise changes of risk. Banesco Seguros, C.A., shall have
fifteen (5) consecutive days commencing on the date notice is received to propose amending or
terminating the policy. Additionally, it is set forth that the transfer of interest that the
insurer has in the properties subject to the agreement shall constitute a risk change fact. On
March 2, 2007 SENECA informed Marsh Venezuela, C.A., that upon the purchase of SENECA’s shares and
the Equipment by Buyer, the same maintenance programs will continue in effect. Seller has also
requested a confirmation that the purchase of SENECA’s shares and the Equipment is not a worsening
of risk; about this matter, on March 15*, 2007 Banesco Seguros,




CA. informed the reassurer through Marsh Venezuela, CA. that Banesco Seguros, CA. would keep in
effect SENECA’s insurance policies under the same current conditions and including the new holder
of SENECA’s shares, PDVSA.




4. Difficulties with diesei transportation/supply: SENECA’s Luisa Caceres Plant has a storage
capacity of approximately 12.5 million liters, while the daily average diesei consumption is
approximately 1.5 million liters, seven days a week (with peaks up to 1.7 million liter on holiday
season). Due to various circumstances (including without limitation, dispatching problems, limited
hours of operation at PDVSA’s El Guamache Plant, unsuitable and unreliable transportation, traffic
botdenecks, rate disputes with transporters and increased demand on Margarita Island), SENECA’s
inventories of diesei fuel have reached an historically low level of 2.8 million liters. Such
information is reported daily to the Ministry of the Popular Power for Energy and Petroleum
(Electric Room and Internal Market Division), to the National Management Center, to PDVSA and
Deitaven.




 









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SENECA could run short of diesei fuel to operate its plants. Prior to Closing, SENECA will continue
to take such actions (or undertake new actions) as it deems reasonably necessary to maintain and
replenish its inventories of diesei fuel SENECA has previously proposed, among others, the
following solutions:




a) to establish a self-dispacth system in El Guamache




b) to extend dispatch hours until inventory replenishment




c) to dispatch on Sundays and holidays until inventory replenishment




d) Once the inventory is replenished agree with PDVSA/Deltaven delivery of product in Luisa Caseres
de Arismendi Plant, allowing PDVSA/Deltaven to manage with more flexibility and opportunity the
dispatch of fuel, including gas (service stations) and SENECA requirements.




5. On March 23, 2007, SENECA received notice from the regional Labor Authority that a new Labor
Contract has been proposed by SENECA’s labor union. The labor contract proposes wage increases in
excess of three hundred percent (300%). The first meeting before the Labor Authority is scheduled
for March 28, 2007 which was postponed by the Labor Inspector to be held on April 3TM, 2007. SENECA
will continue to take such actions as reasonably necessary to delay the first meeting and/or
postpone negotiations with the labor union until after Closing. If unsuccessful, SENECA may enter
into negotiations with the labor union regarding the proposed Labor Contract




6. As mentioned on Appendix 2.6, on March 8th, 2007 SENECA received assessment N° J-H.04-2007
issued by the Mayor’s Office Tax Department of the Garcia Municipality, in connection with years
1998 to 2006 for the amount of Bs. 61,939,223,059.00, based on Municipality’s Ordinance on
Industrial and Commercial License and the Municipal Ordinance on Urban Property Tax. To this
respect, SENECA filed defense arguments before the Garcia Municipality’s Tax Department on March
27th, 2007.




7. As describe on Appendix 2.7, there are current and potential litigation in which SENECA is
either the plaintiff or defendant processed before the Courts there mentioned. On the Appendix 2.7
all current criminal complaints are also described; in all of which SENECA is the victim.




8. As described in detail on Appendix 2.11, on the assets there mentioned some activities are being
carried out or need to be carried out as established on the aforementioned Appendix.




9. As describe don Appendix 2.13, there are potential environmental liabilities against which
SENECA continues to take corrective actions to bring these measures into compliance including the
notification of these situations to the Ministry of Environment and Natural Resources.




Schedule 2.12




Important Contracts in force entered into by Seneca




	 	 	 	 	 	 	 	 	 	 	 
	 	 	Subject Matter of	 	Termination Date	 	Aprox. Annual	 	 
	Contracting Party	 	Contract	 	(dd/mm/yyyy)	 	Cost ($)	 	Status
	MINISTRY OF ENERGY 

AND OIL

	 	CONCESSION CONTRACT
	 	26/07/2048
	 	 	 	 	 	In force
	DELTAVEN

	 	Diesel supply for
generation in Luisa
Caceres Plant and Coche
Plant
	 	27/07/2008
	 	12.574.884	 	In force






 









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	 	 	Subject Matter of	 	Termination Date	 	Aprox. Annual	 	 
	Contracting Party	 	Contract	 	(dd/mm/yyyy)	 	Cost ($)	 	Status
	EDELCA (1)

	 	Power delivered at
Substations Chacopata I
and II
	 	01/07/2018
	 	5.193.455	 	In force
	GE Energy Parts, 

General Electric 

International, 

Turbimeca

	 	Multiannual maintenance

plan for Frame 5

generation units
	 	30/06/2009
	 	2.000.000	 	In force
	MANPRESA / SINEAUCA

	 	Processing and collection
of garbage disposal fees
	 	14/07/2007
	 	1.311.628	 	In force
	EDELCA (2)

	 	Transportation Services
(Toll) power delivered at
Substations Chacopata I
and II
	 	01/07/2018
	 	1.036.160	 	In force
	Banesco Seguros

	 	(Industrial) Property

damage insurance policy
	 	14/12/2007
	 	840.000	 	In force
	BANESCO/ MARSH /London 

Reinsurers

	 	All Risk Insurance Policy
	 	12/12/2007
	 	800.000	 	Reinsurers payment
is
being processed
	General Electric
International/Turbinas
y
Mecanica, C A.

	 	TG 10 Unit Major

Maintenance
	 	19/06/07 approx.,
until the
completion of the
work
	 	750.000	 	In force
	Inversiones El
Taparo, CA.

	 	Diesel transportation
service to Luisa Caceres
Plant and Coche Plant
	 	30/11/2006
	 	684.681	 	Expired
	Sigo

	 	Food Voucher Payments to
SENECA’s Employees and
Workers on Payroll
	 	23/05/2007
	 	558.140	 	In force
	Makler 

Administradora

	 	Administration of
Self-Administered Health
Plan
	 	31/07/2007
	 	446.512	 	In force
	CANTV

	 	Leasing of poles owned by
SENECA and used by CANTV
for rendering services to
third parties
	 	30/06/2007
	 	418.605	 	In force






 









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	 	 	Subject Matter of	 	Termination Date	 	Aprox. Annual	 	 
	Contracting Party	 	Contract	 	(dd/mm/yyyy)	 	Cost ($)	 	Status
	Venequip, S.A.

	 	Coche Plant’s Unit #
CAT-02 overhaul
	 	Until delivery date.
Estimated date: 6
weeks from delivery
of spare parts
	 	354.889	 	In force
	Venequip, S.A.

	 	Coche Plant’s Unit #
CAT-05 overhaul
	 	Until delivery date.
Estimated date: 6
weeks —from delivery
of spare parts
	 	354.889	 	In process
	Seguridad
Venezuela, C.A.

	 	Surveillance and
Protection of SENECA’s
facilities
	 	31/01/2007
	 	252.000	 	Agreed. Written
contract is being
prepared by the
Legal Department
	Servicios Tecnicos
Turbicar, CA.

	 	Operation and regular
maintenance of Coche
Plant
	 	09/08/2007
	 	77.348	 	In force