business plan for 2004 - EDP

2003 - Annual Report - EDP
the Internal Audit Office in close co-operation with the
Executive Committee and Business Area Teams in charge
of the control procedures for each area of activity.
The CDI comprises the heads of Investor Relations,
Internal Audit, Legal, Consolidation, Control and
Budget Management, Financial Management, Regulation
and Tariffs, Human Resources and Environment Offices
and the Board of Directors’ Assistants involved in the
preparation of information, as well as the heads of the
company’s main business areas.
Environment Board
The Environment Board is one of the oldest of EDP’s
functional bodies, established by the articles of
association back in 1991.
The Environment Board is charged with performing
consultative duties for the Board of Directors in
environmental issues, including issuing opinions and
recommendations on the environmental impact of
projects to be developed by the EDP Group.
The Environment Board consists of five persons of
recognised competence in the field of preservation of
the environment, elected by the general meeting:
Eduardo Oliveira Fernandes (co-ordinator), Carlos
Alberto Pimenta, Gonçalo Ribeiro Teles, Maria Teresa
Andresen and Álvaro José Patrício Costa.
>> 1.4 Compliance with the Sarbanes-Oxley Act
The Sarbanes-Oxley Act published in July 2002 requires
all companies listed with the Securities and Exchange
Commission (SEC) to certify their annual report with
regard to the fullness and exactness of the information
contained therein and to public disclosure of the result
of the evaluation of the internal control of the financial
information disclosed to the market.
Aware of the benefits accruing from the adoption of the
practices recommended by the Sarbanes-Oxley Act with
regard to the transparency of the company’s relations
with the market, EDP launched a project designed to
ensure timely creation of conditions allowing it to meet
in full the requirements of the act.
Therefore, in a first stage, the project focused on
establishing and implementing information disclosure
procedures and controls consistent with the provisions
of Section 302 of the act, directed mainly at those items
that must be reported to the American market.
At present, the project has two fronts:
• Perfecting the market information disclosure
procedures and controls established during the first
stage and rendering them more agile, while
extending their application to the disclosure of
information to the Portuguese market; and
• Surveying, documenting, evaluating and correcting
omissions and weaknesses detected in the internal
control of flows of information in respect of events
and transactions with a materially relevant impact
on EDP’s financial statements.
The conclusion of this work, planned for the end of
2004, will allow EDP:
• to monitor more effectively the monitoring of the
internal controls related to the disclosure of financial
information and, consequently, to act more quickly in
correcting any omissions or weaknesses that could
compromise the quality of the information provided
internally and externally; and
• provide more objective grounds for the evaluation of
the internal control of the financial information to
which it will be bound under the terms of the
Sarbanes-Oxley Act as from 2005.
>> 1.5 EDP on the Capital Market
EDP shares have been admitted to listing on the official
market of Euronext Lisbon and on the New York Stock
Exchange in the form of American Depositary Shares
(ADS) since June 1997. Additionally, the EDP shares are
a common underlying asset for the the futures traded on
the Euronext Lisbon.
EDP is one of the Portuguese companies of greater
relative weight on the Euronext Lisbon index, the PSI 20,
around 15% and one of the seven portuguese companies
with greater relative weight on the Euronext 100 index,
with a weighting of around 0.48%. EDP shares are also
included in several European indices, such as the Dow
Jones EuroStoxx Utilities, calculated on the basis of the
market performance of the principal, most
representative European companies in the Utilities
sector.
During the period from December 31, 2002, to December
31, 2003, the EDP shares appreciated by 31.4%, up from
€1.59 to €2.09, an increase of €0.60 per share. This market
appreciation shows that the EDP shares outperformed
the average of its European counterparts and
outperformed the PSI 20 index by 16 percentage points,
the Dow Jones EuroStoxx Utilities by 22 percentage
points and the EuroNext100 index by 19 percentage
points.
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