business plan for 2004 - EDP

whose main function is controling the internal
certification process of all publicly disclosed
information.
Audit Committee
The EDP Audit Committee is a specific Board of
Directors’ committee comprising three independent
directors, charged, by management delegation, with
specific duties in the matters of supervision of the
company’s financial information and with monitoring
the activity of the external auditors, the internal auditors
and the internal control systems. The current members
of the committee are directors António de Almeida
(chairman), José Manuel Trindade Neves Adelino and
Luís Filipe Rolim de Azevedo Coutinho.
The Audit Committee is charged with the following:
• Supervising compliance with and proper application
of prevailing accounting principles and standards,
in conjunction with the work of the supervisory
body and of the external auditors, promoting and
requesting the exchange of information required for
the purpose;
• Analysing the quarterly, half-yearly and yearly
financial information, drawing up non-binding
reports on these accounts for appraisal by the Board
of Directors prior to their approval and signature by
the Board, which may include recommendations to
the Board of Directors on the provision of
information to shareholders;
• Submitting to the Board of Directors a proposal in
connection with the appointment of the company’s
external auditor and determination of its
remuneration;
• Monitoring the activity and vicissitudes of the
contractual relations with the external auditors,
including recommendations within the scope of the
relationship between the Board of Directors, the
Executive Committee or the directors and the
external auditors with regard to the financial
information, and appraising the objectivity and
independence of the external auditors;
• Checking the consistency and adequacy of the
expenditure on auditing in respect of its efficiency,
providing an opinion, if appropriate, on the
contracting of services, directly or indirectly, with
the entity providing the external auditor services or
with entities in a controlling or group relationship
with it;
• Discussing with the external auditors the scope of
the audit for the purpose of presentation of
recommendations to the Executive Committee or to
the Board of Directors;
2003 - Annual Report - EDP
• Proposing to the Board of Directors measures
designed to improve the monitoring of the internal
control and internal auditing systems;
• Discussing the contents of the internal control report
with the internal auditor; and
• Defining and implementing procedures in respect
of receiving and processing complaints regarding
accounting matters, internal accounting and
auditing controls, as well as complaints lodged by
employees in respect of accounting or auditing
practices.
In performing these duties the Audit Committee may
hire the services of independent consultants and take
such steps as may be deemed necessary with regard to
the services and companies of the EDP Group.
The members of the Audit Committee are qualified as
independent directors in accordance with the criteria
established in Article 1 of CMVM Regulation 11/2003 of
December 2. Additionally, although the committee was
appointed prior to the publication of the said CMVM
regulation, the definition of the independence of the
members of the Audit Committee took certain criteria
into account such as the lack of any employment
relationship or contractual tie with EDP and its
subsidiaries or with shareholders with a holding greater
than 2% or with entities in a controlling or group
relation with such shareholders.
The appointment of the Audit Committee was a
pioneering step in corporate governance in Portugal,
designed to contribute to the strengthening of
internal control mechanisms through the actions of
members of the Board that hold real monitoring
responsibilities.
The Audit Committee met on 13 occasions during 2003.
Disclosure of Information Control & Procedures
Committee (CDI)
The CDI has three prime functions:
• Identifying and analysing the information to be
made available to the public periodically;
• Taking part in the review of the information
periodically provided by EDP within the scope of
the preparation of reports and other market press
releases; and
• Evaluating on a quarterly basis the EDP information
control and disclosure mechanisms.
This committee is therefore an organisational structure
responsible for monitoring and evaluating of the control
mechanisms in place and the information procedures, and
is a part of the EDP Group Information Certification
project, which involves a Project Work Group headed by